Fiat never had much luck in China, one of the few remaining growth markets on the planet. Neither had Chrysler. One word fits both: “Orribile!”
“Never say die,” says Sergio Marchionne (or in Italiano to that effect.) Today, he will try again. At a ceremony in Rome, flanked by China’s President Hu Jintao and Italy’s President Silvio “Daddy” Berlusconi, Sergio will sign a deal for joint venture with China’s Guangzhou Automobile Industry Group, Reuters reports. Hu Jintao is in town anyway to attend the G8 meeting. And what will they build together?
We left the first chapter of this episode with BS at the southern tip of Spain. He had to produce a launch movie for the Audi 80. He had run out of time, luck, and, most embarrassingly, of film. BS was in deep dung. What will happen to him? Will he finish the mission? Or will he and his bunch of mad men rot in a Spanish cell? Join us today for parte dos, part two of the great Spanish spectacle . . .
The power struggle between Wendelin Wiedeking of Porsche and Ferdinand Piech of Volkswagen has attracted other suitors. The German magazine Focus reports that three additional bidders are interested: two sovereign wealth funds (read: goverments which are tired of investing their money in T-bonds) and a hedge fund. The nationalities of the sovereign wealth funds are interesting. One is the Russian fund and the other is Chinese, says Focus. The identity of the hedge fund is unclear.
After a lot of arm twisting, and several deadlines set by the US court and the German government, the Opel deal finally is entering the final round—for now. After a suitor has been found, a French woman may spoil the whole wedding.
The way it looks, China will severely trounce the USA as the world’s largest auto market in 2009. From January to June, Americans bought 4.8m units, a drop of 35.1 percent. China had sold more a month earlier.
New car registrations in Germany, Europe’s biggest auto market, went stratospheric by 40 percent in June. At record numbers, Germany’s Autofahrer junked their old cars, collected €2500 and bought a new one, says Reuters. This followed a May that also saw a 40 percent rise over the same month last year.
In the market for a parking lot in Flint, Michigan? Or a nine-hole golf course in New Jersey (needs TLC)? How about some scenic acreage way upstate New York that features prominently on New York State Registry of Hazardous Waste Sites and on the federal superfund list of contaminated places? All—and more—available now to the highest bidder. Come on down!
While the supposedly best of GM is sold to the supposedly new GM, the worst will be auctioned off in bankruptcy court. Call it the Adam and Eve of all foreclosure sales.
Open house in Massena, New York. This fine waterfront property, abutting the St. Regis Mohawk Indian Reservation in the east and the St. Lawrence River to the north, was home to a GM foundry. It made aluminum cylinder heads for the Chevrolet Corvair. It also mass-produced PCB sludge.
Chrysler press release: “Overall industry figures for June 2009 are projected to come in at an estimated 9.7 million SAAR. ”
Expected around 10 million . . . depending on who was doing the expecting.
Automotive News:
BMW Group –20.3 percent
Chrysler –41.9 percent
Daimler AG –26.4 percent
Ford Motor Co. –10.7 percent
General Motors –33.4 percent
Honda –29.5 percent
Hyundai Group not reported yet
Jaguar Land Rover not reported yet
Maserati –47.9 percent
Mazda not reported yet
Mitsubishi not reported yet
Nissan –23.1 percent
Porsche –66.0 percent Subaru +3.4 percent
Suzuki –78.0 percent
Toyota –31.9 percent
VW -21.3 percent
Other –23.7 percent
TOTAL –28.4 percent
First six months 4,177,830 units sold, –37.2 percent
A month ago, we reported that GM offered to buy back Opel some day “when we do better after a restructuring phase.” Offered? GM downright demands the right to buy back Opel after a buyer has successfully resuscitated and restructured Opel.
The rumors of such a demand have been around for a while. GM is pretty much the only one on the planet who thinks this is a swell idea.
China isn’t giving up its quest for distressed and desperate Western auto assets.
On the Opel front, Magna reportedly has hit a rough patch. Reuters says that RHJ International, a former bidder for Opel, is back in the running and may be close to a deal. Financial Times says that BAIC will also hand in a formal bid. The news wire cautions that the sudden bidding activity may be just “a ploy to pressure Magna to reach a final agreement by a mid-July deadline on terms acceptable to GM.”
At the same time “China’s Beijing Automotive Industry Holding Corp (BAIC), rival Geely, and at least one Western industrial group remain interested in Ford Motor Co’s Volvo car unit,” says Reuters, citing the industry’s prime source, the “person close to the situation.”
A few days ago, RHJ International, the Belgium-based industrial holding company interested in Opel, was moping. They said, apparently, they were not wanted anymore, were “kicked out of the bidding process.” GM and Germany were only talking Magna and maybe China’s BAIC. Guess who’s back in the game?
Porsche finally has a written offer from the Sheik of Qatar, if theFrankfurter Allgmeine‘s sources are not mistaken. It sounds pretty official: “We have a written offer of the Qatar Investment Authority which details their engagement in the Porsche Holding SE and their purchase of our options for Volkswagen stock,” said a Porsche spokesperson to the FAZ. Currently, the both sides are in the bargaining phase: How much or how little will they pay?
Over the weekend, Porsche complained loudly about a Monday ultimatum to accept Volkswagen’s merger proposal—or else. The answer from Wolfsburg: “Ultimatum? What ultimatum?”
“There is no ultimatum,” a VW spokesman told Reuters. He would not comment further.
Parallel worlds? Porsche Chairman Wolfgang Porsche and his deputy on the supervisory board, Uwe Hueck, said in a statement on Saturday they had been given an ultimatum by VW and Lower Saxony and that they would “not accept extortion.” Most likely explanation . . .
You know what I loved most about car advertising? There was never a shortage of money to play with. I’m no longer tracking these things, but in 2007, GM spent $3 billion on what we call “measured media” alone. Measured media is defined as television, print, and outdoor advertising. The unmeasured expenses, what’s called “below the line,” in the vernacular, are usually just as huge, maybe bigger. Above and below the line, GM must have spent the GDP of Mongolia on advertising.
Volkswagen’s budget resembled the GDP of a much smaller country, but I thoroughly enjoyed helping them to put it to good use. Sometimes, the money was thoroughly wasted. This was one of these times . . .
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