Imagine: You head down to your friendly AutoZone or Pep Boys. While you shop for the latest “guaranteed 10 horses more” K&N filter, and the Manager’s Special floormats all the way from Ningbo, China, your incredulous eyes stare at a sign: “New cars at shocker prices! More than 30 brands! Up to 35 percent off!”
Representatives of China’s BAIC are on their way to Frankfurt, where they will pile in limos with the proper branding and go to nearby Rüsselsheim. There, they will receive entry to the inner sanctum of Opel: The due diligence room.
Opel will open wide and BAIC will be able to inspect books, trade secrets, business plans. The next step will be a binding offer, the Frankfurter Allgemeine Zeitung [sub] reports. In the coming weeks, BAIC Chairman Xu Heyi himself will land in Frankfurt and will present his plan to unions in Rüsselsheim and politicos in Berlin. Xu knows how to deal with the Germans. His company has a successful joint venture with Daimler.
Two items become apparent:
China Daily, widely regarded as the (English-speaking) voice of China’s central government is appalled:
All bankrupt US carmaker General Motors Corporation needs from the proposed sale of its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery is money, with experience and expertise in making vehicles not an issue in the deal.
“All I need is cash,” Hummer CEO Jim Taylor told China Daily in a recent telephone interview.
In a wild orgy of he-said-she-said-it-whispered, Chinese media, from China Daily, to Shanghai Daily, to car186.com, all the way to Motor Trend (with the help of the ever-so-reliable Google Translate), the MSM are busy reporting yesterday’s news of Geely buying Volvo. However, it’s no surprise of the connoisseur of the Chinese news cycle . . .
The usually quite reliable Chinacartimes has it from the not always reliable auto.sohu.com that Ford and Geely have reached a deal for Volvo. According to Sohu, the Chinese-owned Volvo will put a production line into Dongguan City in Guangdong Province, one of China’s rustbelts. Supposedly, the first Geely owned Volvo is a XC90 SUV.
As BS lacks the necessary puthongua, Ms. Zhang, my trusted Chinese adjutant, translated the Sohu report as follows:
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China’s auto industry has more than 100 companies. The Chinese government has been strongly suggesting that this number gets more manageable through mergers and acquisitions. One of these mergers seems to be on its way.
If China’s 21st Century Business Herald (translation via Gasgoo) is not mistaken (and the Herald is far from infallible) FAW and Brilliance are talking about a wedding.
China is becoming the new America, while America is becoming the old China. Jack Perkowski thinks it’s happening right now. Jack is an Old China Hand and a colleague in the automotive parts business. He’s an American, and a Yale graduate. 15 years ago, he came to China and started ASIMCO, an auto component manufacturing company. In January, Perkowski left the company. The global decline in the business didn’t spare ASIMCO. Perkowski is a true Lao Wai, which literally translates into “Old Foreigner” in Mandarin. From one of the first in China, we inherited a lot of his experience. Some is chronicled in Perkowski’s book Managing the Dragon, which made the best seller lists. Most is regularly updated in Perkowski’s blog that goes by the same name. In a recent post, he left us some interesting thoughts. Some may find them revolting, even seditious.
Years ago, I was in a new Volkswagen factory. Different cars of different brands were rolling down the same assembly line, most of the work done by robots. A huge stamping machine made fifty fenders, dropped the tool into a storage bin, grabbed another tool and made eighty doors. I said to the guy who showed me the factory: “Soon, you can ship the tooling to another factory via e-mail.”
“Sure,” the guy said. “As long as they all have a setup like this.” This is what Ford seems to be doing.
European car sales are not out of the woods yet. But they are on the rutted logging road to recovery. That’s the bottom line of the May sales report of the European Automobile Manufacturers’ Association ACEA.
China Business News [via Gasgoo] reports that Automotive Industry Holding (BAIC) is miffed. They’re walking from any Opel, Saab and Volvo deals. BAIC will not engage in more talks— for the time being. China Business Daily claims to have a source on the inside.
Snickers in Detroit, horrors in Rüsselsheim: Suddenly departed Government Motors purchasing chief Bo Andersson is taking a job in Russia. He will be Putin charge as chairman of Russian automaker Gorkovsky Avtomobilny Zavod, better known as hapless GAZ.
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Tengzhong’s bid for Hummer brand “is normal behavior for a company seeking to take advantage of the global downturn to broaden its horizons,” a spokesman of China’s Ministry of Commerce said according to Reuters. “Against the backdrop of the global financial crisis, it is rational and normal for Chinese companies to adopt an international outlook,” MofCom spokesman Yao Jian told reporters.
Does that mean that China’s government will approve the deal? They may, or may not. Sympathy for “normal behavior” doesn’t equal a big red rubber stamp. And none has been asked for . . .
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It was November 1989. After a long into-the-evening meeting with Volkswagen execs in Wolfsburg, after the usual after-meeting festivities and after a very short night, I sat groggily behind the wheel of my Audi V8 (as it was called at the time) and headed back to Düsseldorf. Little did I know that what happened that night would gain me the company of sixty near-naked women. Others would gain even more . . .
A faint silver lining in the dark clouds brewing over Chrysler and GM dealers who have received “Dear John” letters: Volkswagen’s sales chief, Christian Klingler, said he will try to turn many into Volkswagen dealers, Automobilwoche [sub] reports. With a market share of 2.1 percent for VeeDub in the US, unbridled growth would be practically assured. Meanwhile at home, Klingler expects 2009 to become “the best new car sales year since 1999.” The cash4clunkers Abwrackprämie is bringing Germany record sales. Klingler and other analysts believe that 2009 will end with more that 3.5 million cars sold. Looking at the fact that nearly 1.6 million applications for Abwrackprämien money have been filed already, and that nearly half of the applicants never had bought a new car before, the number could reach 4 million.
The European Commission has scrutinized care packages given to car makers by their governments. The Commissars find those programs highly objectionable. According to Reuters, “U.S. financial aid to carmakers and a number of stimulus packages adopted by other countries to fight the economic slowdown could distort global trade,” a (probably not very) confidential European Commission report says. Here are the EU commission’s main objections:
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