Did we mention that China’s Brilliance hasn’t been doing so, well, brilliantly? The joint venture partner of BMW, and maker of supposedly homegrown Ersatz-BMWs (the sight of which makes any BMW engineer reach for a bottle of Jägermeister) had racked up losses to the tune of 9b Chinese Yuan ($1.3b) in the first half of the year. And now, its European importer went kaputt. HSO Imports, located in tax-friendly Luxemburg, declared insolvency. To the tune of silent, but audible “hipp-hipp, hurrah!” amongst Germany’s automakers. Break out the bubbly, another attempted Chinese invasion has been repelled.
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Posts By: Bertel Schmitt
I’m thinking about opening a car factory. A really small one. Tata would sell me their Nano in kit form. I’d have it assembled (using cheap Chinese labor, of course) and sell it as the Bertel car. Entirely possible. Tata may allow small car assemblers to put together its Nano and sell it under their own brand, India’s Business Standard reports via Reuters.
Nannification makes a great leap forward: OnStar services will be activated and fully operational in China in December 2009 on some Cadillac, Buick and Chevrolet vehicles, PRNewswire reports. The system will be operated by OnStar Telematics Company Limited, a joint venture between GM and SAIC. According to the blurb, “this is OnStar’s first venture outside of North America in its 11-year history.”
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While other countries are weaning off their auto markets from the amphetamine injections, China is set to increase the dosage. Already the world’s largest auto market, the Middle Kingdom is hell-bent on turning its working masses into mega motorists.
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BMW is talking to China’s 800 lb gorilla SAIC about producing BMW’s luxo-barge, the 7-series in China. This according to Bloomberg who has it from Dongfang Daily, who heard it from an unnamed source at SAIC.
BMW and SAIC had been talking about a joint venture three times in the past, says the Chinese paper, but noting came of it.
If this isn’t one of those Chinese rumors that are floated on one day, and denied the next, then this could be interesting in several respects.
The sale of GM’s Opel to Magna/Sberbank is being mulled-over in Brussels (decision by November 27, maybe.) Sperbank’s Oligarch Oleg Deripaska finally was allowed to enter the United States after his visa was denied because of mob-related suspicions. He finally met Fritz Henderson, and some FBI agents. There is talk that GM doesn’t want to let go of Opel’s R&D. Will it ever end? Magna thinks so. A Magna man is ready to take the helm.
China will lead the U.S. as the world’s biggest auto market for a “long time,” (if not forever.) This assessment doesn’t come from the Chinese propaganda machine. Nick Reilly, GM’s head of international operations, thinks China is too far ahead of the U.S. and demand will grow next year, Bloomberg reports.
Reilly sees vehicle demand in China increase to more than 13 million units next year from about 12.5 million in 2009. “I don’t see the U.S. being anywhere near that,” Reilly said.
President Obama started a trade war by slapping a 35 percent punitive tariff on imported tires as a big “Thank you” to his friends at the United Steelworkers. Most industry observers think this was mentally challenged exercise: Production of cheap tires will be shifted to other countries. Not a single US job will be created. Jobs will be lost and consumers will have to pay more.
The war is not going away. As a matter of fact, it is heating up. Not only did China lodge a formal complaint to the WTO. China has told the United States it is launching a trade investigation that could lead to new import duties on autos and sports utility vehicles made by Chrysler, Ford and General Motors, a U.S. industry official confirmed to Reuters.
The action will leave no happy faces with U.S. Commerce Secretary Gary Locke, Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack, who are in China right now for high-level talks aimed at resolving trade disputes between the two countries.
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Someone who has the same name as myself had urged Chinese parts manufacturers for more than a year to go overseas and to buy parts houses at firesale prices. Why? Because they make much more money that way. The foreign parts houses mostly produce in China anyway. Often with huge Chinese manufacturers as subcontractors. By moving closer to the customer and up the value chain, by turning from contract manufacturer to marketer, the Chinese manufacturers could realize much higher profits.
A year later, this thought finally resonates in Detroit. Under the title “Chinese likely to be buyers of U.S. auto suppliers.” Crain’s Detroit Business runs a rather belated story.
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We nearly abandoned all hope (or fear) that China might buy a Western brand. The Ford-Volvo-Geely deal was on the ropes, supposedly over intellectual property worries. We didn’t believe it.
Finally, FoMoCo officially announced that they had inspected all the bids. Geely came out on top, says the Wall Street Journal.
China’s Zhejiang Geely Group Holdings Co. was bestowed the official title “preferred bidder for Ford’s luxury Volvo brand.” Apparently, Geely coughed up the better deal Ford wanted. Now the two sides will enter “more detailed and focused negotiations.”
Europe has tried long and hard to stop Chinese cars at its gates. Mainly by smashing them to bits and putting the results on YouTube. The cars that make EU certification remain unmentioned. This is going to change.
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Chongqing Lifan, a Chinese car maker that is more known for its prodigious motorcycle output, launched its collector’s edition of their 320 model last week. The car is priced at 39,800 yuan ($5,830). Even China’s Gasgoo thinks that the Lifan “resembles a Mini Cooper.” But hey, BMW has motorcycle roots also.
The marketing strategy of the “collectors model” is interesting. The Lifan 320 prototype was officially launched at the 2009 Shanghai Auto Show in April. At its launch, the Lifan 320 was priced at 48,800 yuan ( $7,086).
The collector’s edition of the 320 comes with many upgrades, but is lower priced “to target fashion-conscious young buyers.” Hmm. Having trouble selling the knock-off?
Maybe the brand conscious Chinese fancy a real Mini. Or not. In the first nine months of 2009, BMW sold 59,400 BMWs and only 2,934 Minis. It’s a big country. They want big cars to go along with it.
If it goes according to the plans of two competing car dealers, Des Moines, Iowa, will become the center of the Chinese car export revolution. The Chinese car invasion has been long feared, but so far has not materialized. Two guys in Des Moines are on a Chinese trade mission …
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Prepare yourself for an increasing number of „good news“ along the following lines:
„October U.S. auto sales should be down about 6 percent from a year ago, marking the first single-digit monthly decline since May 2008, industry forecasting firm J.D. Power and Associates said on Friday.” Glad tidings, brought to you by Reuters.
Times must be really bad when single digit declines are feted as an improvement.
In reality, things stay as bad as they have been all year. In September 2008, the bottom fell out of the light vehicle market. From now on out, monthly sales will be compared to hell.
The GM-Opel-Magna-Sperbank deal is on its last gasp. On Friday, GM’s chief Opel negotiator, John Smith, said that nothing will happen until the GM BOD will get around to reconsider the sale at its next regular meeting on November 3, says Reuters. In the meantime, the matter turns into a chain letter exercise. Chain letters everybody wants to receive, but nobody wants to write.
As reported by TTAC, EU competition commissioner Neelie Kroes wants letters from all parties involved, certifying that the deal had not been reached under political pressure. All parties involved, meaning GM, the Opel Trust that officially owns Opel, and the German government. Except a vague note from Berlin to Brussels, no letters have been written. Nobody wants to write, everybody wants to receive a letter:
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