Definitely infrequent for a few weeks while I’m in Europe, hunting the elusive Euro: An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Berlin – when I’m in Berlin.
Idle chatter: More and more drivers of Japanese cars will have their rides die on them at an intersection, only to miraculously re-start once they mash the pedal. “Japanese carmakers have been equipping more and more of their passenger cars with a function that automatically kills the engine when the vehicle is stationary,” the Nikkei (sub) writes. Mazda aims to make the idling stop function available with some configurations of its fully remodeled Axela to be launched this summer. Toyota started offering a newly developed idling stop system on some of its Crown Comfort sedans in August. Toyota plans to install the system in a wider range of its passenger cars in the future, with a focus on Europe. Mitsubishi aims to offer some of its European model Colt cars with an idling stop system starting this year.
Ready, set, fire: Toyota plans to reduce its full-time work forces in North America and the U.K., by more than 1,000 jobs, the Nikkei (sub) says. The move is unprecedented for the automaker, which has protected full-time jobs even in tough times. A rare exception was in 1950, when it let go roughly 1,600 workers in Japan through early retirement programs. Toyota employs nearly 30,000 in North America, mainly at seven assembly plants, and about 5,000 in the U.K., where it has one assembly facility. The scope of the job reductions there will likely be finalized as early as this month. Toyota is considering pay cuts as well.
Nissan joins club of lost profits: Nissan joins other Japanese car makers such as Toyotay and will most likely ost a group operating loss of more than 100 billion yen for the year ending March 31, its first dip into the red since fiscal 1994, the Nikkei (sub) says. Depending on car sales for the January-March quarter, the loss could even swell to around 200 billion yen. The automaker logged an operating profit of 790.8 billion yen for the year ended March 2008. Sinc January, “the situation has grown more dire each day,” a company official says. Depressed demand alone will eat into operating profit by more than 200 billion yen. In addition, the yen’s appreciation against the dollar, the euro and emerging-market currencies is seen dragging down the result by some 100 billion yen.
Less idle pay at Mazda: Roughly 10,000 full-time workers at two Mazda factories in Japan will see their base pay lowered by 30 percent for the days that their factories close for production adjustments, the Nikkei (sub) reports. They currently take a 20% cut for each of their mandatory days off. The 30% reduction will kick in from next month and last through March. Mazda stopped nighttime operations at two factories this month. Beginning in February, the company plans to resume night operations and instead close the plants on Fridays.
Hitachi cable pulls the plug: Facing a sharp fall in demand from Detroit, Hitachi Cable will close by 2011 two of its five North American factories that manufacture autoparts such as wiring harnesses, the Nikkei (sub) reports. The factories targeted for closure are in the states of Indiana and Kentucky.
Bridgestone’s US tire plant slashed: Japanese tire manufacturer Bridgestone will stop producing tires for passenger cars and light trucks at its factory in LaVergne, Tennessee, by the end of June, the Nikkei (sub) says. The production halt will be Bridgestone’s first since 2006, when it closed factories in Chile and the U.S. state of Oklahoma. Employing around 1,700 workers, the LaVergne plant has the highest payroll of the firm’s five North American facilities.
China hearts Audi: Volkswagen’s Audi announced that its sales in Chinancreased 17 percent in 2008 to 119,598 vehicles in 2008, Gasgoo reports. Construction of a new assembly plant in Changchun has started for even more production capacity. Sales of Audi cars locally made by FAW VW in Changchun increased 14 percent to 105,958 units. Sales of imported Audi vehicles grew 55 percent. Sales of the Audi A8 rose 35 percent to 4,608 units, making China the world’s largest sales market for the Audi A8. Global sales of Audi broke through the one million barrier in 2008 at 1,003,400 units.
China hearts Skoda, too: Volkswagen’s Skoda sold 59,284 cars in China last year, representing a gain of 117 percent from a year earlier, Gasgoo writes. Skoda, which is in a joint venture agreement with SAIC, expects sales to rise another 50 percent to 90,000 units this year, according to Fu Qiang, deputy director of Skoda Marketing & Sales Business of Shanghai Volkswagen Co.
FAW is raking it in: While other Chinese car makers are facing dire numbers, FAW Car Co, a unit of one of China’s three largest auto makers, is looking at 2008 net profits between 90 and 120 percent higher than 2007. FAW is especially proud because archrival SAIC is expecting an estimated profit slump of more than 50 percent, Gasgoo reports.
Changan and SAIC guide down: Chongqing Changan Auto Co. warned that there will be a sharp drop in its 2008 net profit, Gasgoo reports. Changan, Ford Motor’s China partner, said unaudited 2008 net profit was at roughly 38.93 million yuan ($5.7 million), down from 666.89 million yuan a year earlier. Changan Auto makes cars in a three way tie-up with Ford and Mazda Motor. It was hit badly as car sales at the joint venture fell by 20,000 vehicles, or 5.9 percent, this year, after a 60 percent jump in 2007. The sales of Changan Auto’s own-brand vehicles dropped by 27,000 units last year from 2007. China’s biggest automaker SAIC Motor, has also warned about a nosedive in last year’s net profit. SAIC expects a 50 percent fall in unaudited net profit in 2008, hit in part by its investment in Korea’s Ssangyong Motor, which has filed for bankruptcy protection due to severe liquidity problems.
Benz hybrids coming to China: This year, Mercedes-Benz, or “Benz” as they are called in China, will launch its first hybrid model S400 BlueHYBRID, a gasoline-electric hybrid based on the S-Class sedan, and a more advanced diesel-electric hybrid version of the M-Class SUV, Gasoo reports. The two Mercedes-Benz hybrid models will be introduced to China later this year. The new S400 BlueHYBRID is scheduled for launch in Europe this June, with China to follow in August and the U.S. by September. The diesel-electric version of the M-Class SUV should follow shortly after.
VW expecting Q1 loss: Volkswagen thinks global car sales of all manufacturers will be down 15 percent in 2009 compared to 2008. VW wants to beat that, but they still budget own sales to be 10 percent less that 2008. After positive results in 2008, VW is guiding for a minus in the first quarter of 2009, Automobilwoche (sub) reports. VW’s CFO Hans Dieter Pötsch is not worried about running out of cash anytime soon. He’s expecting a “substantial liquidity for 2009.”
With regards to the “Toyota job cuts story”, I’m sorry but that simply isn’t true:
http://news.uk.msn.com/uk/article.aspx?cp-documentid=13143784
Also, Toyota have 2 assembly plants in the UK, not 1. One for engines in Deeside and one for cars at Burnaston.
Just reporting what the Nikkei writes ….
Mr. Schmitt:
Love your “while America sleeps” series. Just hoped you’d keep a wider range. For example, as the 2008 results keep rolling in it’s becoming apparent Brazil has become the world’s 4th or 5th (depending on numbers yet) car producer. Surely this warrants some extra coverage.
Apparently by country production in 2008:
#1 US
#2 Japan
#3 China
#4 Germany or Brazil
Have you the right numbers? Did Brazil really beat Germany? Not to mention South Korea. Though apparently we’ve flown by the UK, France and Italy.
Yes I’m proud of that. I consider it an accomplishment.
@FromBrazil: Brazil wakes up when USA wakes up, so …. Do you have the Brazil number?
Anyway, I guess, we still have to wait for the official word from OICA. http://oica.net/category/production-statistics/ has only the 2007 numbers.
B
Hey,
I’m quite surprised you missed this one – this is VERY IMPORTANT news: the incentives Germany put in place to help their car industry IS CREATING A HUGE DEMAND FOR NEW CARS IN GERMANY…
By Erik Kirschbaum
BERLIN, Jan 25 (Reuters) – The 2009 outlook for Germany’s car industry has suddenly brightened thanks to the unexpectedly quick impact of government growth-boosting measures, the head of the powerful VDA automotive industry association said on Sunday.
On a weekend when car dealers across Germany reported a brisk upturn in business thanks to new government incentives, VDA President Matthias Wissmann said car sales could surpass the 3 million mark in 2009 — about the same as in 2008.
Car showrooms in Europe’s largest economy have been filled with buyers in recent days after the government announced plans to issue certificates worth 2,500 euros for all new car buyers who scrap cars that are at least nine years old.”
You can read the rest here: http://www.guardian.co.uk/business/feedarticle/8321726
Mr. Schmitt:
You can get the Brazilian numbers at http://www.anfavea.com.br which is the association of car, bus, truck and agricultural and construction machine makers. There’s also the http://www.abeiva.com.br which is the association of car makers who just import (BMW, Mercedes, Chrysler, Kia, Maserati, some chinese brands).
The results of Anfavea, according to a well respected Brazilian website are as follows:
Internal sales – 2007: 2.46 million
2008: 2.82 million
An increase of about 14% and the best results ever! BTW, my contacts at Fiat expect this year a fall of 20%. But you know what? That would make 2009 the third best year ever for the Brazilian car industry (2008 was the best and 2007 the second best).
Total production – 2007: 2.98 million
2008: 3.21 million
An increase of 8% and the first time ever the number of 3 million was reached.
Now a correction, that makes us the 5th largest consuming market (up 3 positions) and the world’s 6th largest producer (up one position). Which I guess means South Korea is still ahead of us in production and Germany in production and consumption.
Total exports (not just cars, but buses, components etc.) were down about 7%. From 790 thousand to about 730 thousand, though these reduced sales brought in 3.5% more money (US$13.9 billion) than last year.
As in aside, and maybe to your interest, and by the way that’s how the government taxes cars in Brazil,(engine size) 1.0L cars made up 50% of the market. Between 1.0L and 2.0L 48% and above 2.0L just 1.5%. Flex fuel cars were 86% of the market, gasoline 10% and diesel 4%.
k.amm :
Hardly a statistical report form an unbiased source. As TTAC has pointed out, U.S. carmakers have been reporting a sales surge at the beginning of the last three months. Only to be proven very VERY wrong.
And even if this does represent an uptick, it looks a lot like a dead cat bounce to me.
Time will tell.
@k.amm: We didn’t miss it. We reported the clunker culling the day it was announced. As far as numbers, we’ll be watching the real ones. There are indications that the incentives may work. Also, I wrote a little update ….
@FromBrazil: Germany produced 6m vehicles in 2007. Domestic sales approx 3m in 2008. Any hopes of getting surpassed by Brazil are premature. But don’t give up the hope. The future definitely is in the BRIC countries.
Mr. Schmitt
Yeah, when I posted the first time I just knew my memmory and hence, my numbers were off. Thanks for your follow up comment which led me to do some digging and finding the right numbers, and thanks also for keeping me honest (as discussions in this site should always be).
So production-wise there’s still a distance to go. But maybe in the next 3 yrs if all is well and as is natural (due to differences in population) we could pass you in terms of consumption. Germany’s demand is relatively inelastic and Brazil’s is pent up. So the trend is clear.
In terms of production I guess it will follow closely internal demand. The real is very strong (good ’cause it killed inflation) and Brazil has specialized in producing small cars. Which is all fine and well but leads to the postion where our producers (mainly from Europe) have to compete in Latin America, Mexico (maybe US and Canada with Fiat in future?), Africa, poor Middle East and Central and Eastern Europe (AFAIK Brazil doesn’t export cars to Far East Asia). And who is setting up shop in these places? Yes, the Chinese. That I think is an interesting story and will forecast how the European companies will fare against that competition.