Unlike a lot of car blogs, we failed to post a “that’s all folks” wrap-up on the Hummer to China deal last week. Mostly because GM’s insistence [by press release] that it had “entered into a definitive agreement that will allow Tengzhong to acquire GM’s premium all-terrain HUMMER brand,” didn’t answer the real question about the deal. Namely, whether it would fly past the Chinese officials who shot it down on the last go-round. And sure enough, Automotive News [sub] reports that Chinese officials didn’t even know there was a deal to approve.
The Ministry of Commerce has yet to receive an application concerning Tengzhong’s purchase of Hummer. Currently, the Sichuan province commerce office is preparing to report the situation to the Ministry of Commerce, and because nothing is known about the specific content of the purchase agreement, for now (the ministry) will not say any more
Sounds “definitive” alright. So, who didn’t get greased? Or was the application just lost in the mail?
Ron: Is the new Chevy Cruze a rebranded Daewoo, or a genuinely novel GM product? I understand it will be assembled in the US.
Fritz Henderson: cruze is an all new vehicle developed as a true chevrolet. we will build the vehicle in our plant in lordstown, ohio.
Ron, that’s a great question, but you shouldn’t expect real answers from a GM livechat with Fritz Henderson. Yes, the Cruze was engineered in South Korea by Daewoo, but it’s not a developing-market-mobile with a bowtie like the first Cruze. And the Aveo. And the forthcoming Spark. It’s a global product, sold in different markets as the Daewoo Lacetti, the Holden Cruze and the Chevrolet Cruze. It’s even a pace car! But to answer your question, the major difference between the Daewoo pictured above and the US-market Cruze is engine options. Other than that… Dude, you’re getting a Daewoo!
Keep in mind, Chrysler’s incentives were averaging $4,908 per vehicle in September. Marchionne’s going to be singing the “ask me again in the medium-to-long-term” song for a while.
“There must be increased access to capital through the entire supply chain — from the largest tier one to the smallest family-owned firm,” Dave Andrea, vice president of industry analysis and economics at the Original Equipment Suppliers Association told the Senate Banking Committee [via The Freep]. “Without assistance this country will needlessly lose manufacturing capacity, technology development and jobs.” Which is about what suppliers have been telling congress since bailout mania struck. What the Freep fails to properly explain is that the supplier bailout passed earlier this year was an unmitigated disaster for suppliers and their relations with OEMs.
As the latest sales show (and have been showing for some time now) Scion is one hot mess. And though the best advice we can give is for Toyota to start selling its JDM confections as Toyotas, somehow we don’t think the big T wants to hear it. Instead, why not pick a new lineup from the latest batch of Daihatsu concepts shown at the Tokyo show [courtesy:AutoBild]? Or better yet, post a link to other Toyota/Daihatsu products that could pep up the least youthful “youth brand’s” sales. After all, anything would be better than leaving Scion as-is.
Unlike Chrysler and GM, Ford has managed to minimize the downward depreciation spiral that’s been plaguing business models across Detroit. In fact, FoMoCo has increased its net pricing by $1.9b in the first half of this year alone. Ford explains this achievement with a reach back to history: a team of 19 P.H.D.s tasked with managing pricing, production and option mixes is given credit, and compared with the “Whiz Kids” of the post-war era in the Detroit News. “They are unbelievable,” gushes Ford’s Jim Farley. “It’s very scientific. I’ve never seen anything like it in our industry.” The Global Lifecycle Analytics Department (GLAD) was formed in 2000, as a modern-day equivalent to the statistical analysis pioneers hired to bring Ford back from the brink of oblivion in the 1940s. By 2005 the team, led by Rose “The Silent Lamb” Peng, had figured out that “the resale value of Ford’s cars and trucks was being eroded by sales of poorly contented vehicles to rental agencies.” Go figure. Let’s hear it for statistical analysis.
Laugh, said an anonymous sage, and the world laughs with you. The corollary to which apparently, is “make unrealistic predictions of your own success and the world laughs at you.” Fiat CEO Sergio Marchionne is finding this out the hard way, having predicted in a Globe and Mail interview that his Auburn Hills-based bailout baby will be making money “in the next 24 months.” And how, pray, does Marchionne expect to achieve the impossible? Marchionne insists his goal is achievable “because we have decided not to flog inventory, because we’re disciplined about production, because we’re going to try not to discount the vehicles. If [discounts are] the only way I can sell them, I’d prefer not to produce them because I’m not making any money.” But is there some other way of selling Chryslers?
A China-market exclusive, this porcelain-patina’d prancer’s look is based on a Song Dynasty vase. And costs about as much. Now it’s just a matter of time before the savvy marketers from Maranello decide to name the California’s replacement the “Guangdong.” [via AutoBild]
GM and Sichuan Tzenzhong hope to close the Hummer deal within the next few days, reports Automotive News [sub]. GM expects to receive $150m for the brand, or about $1m per dealer (pre-cull). Incidentally, GM made each of those dealers pay up to $15m for the “brand faithful” (read: garish) dealership upgrades pictured above. Not to get all Lou Dobbs about it, but GM already turned down $100m from an American bidder too. But hey, $50m is $50m. Just ask the Hummer dealers. Meanwhile, who else is ready for Hummer to become a symbol of China?
Penske Automotive’s official explanation for pulling the cord on Saturn was that they couldn’t get a supply deal. Renault-Samsung figured the risks of supplying a reborn Saturn were high, while the reward was (at best) competition with established Nissan offerings. But Roger Penske was putting his company out on a limb as well. Penske Automotive stock had been bid up in the days before the Saturn deal fell apart, as speculators sought to get in on the ground floor of the new company. As usual though, the speculative bid-up was based more in hype and long-term potential than underlying financial realities. Despite a losing over $3 in share price after the collapse of the Saturn deal, Penske’s forbearance is being rewarded. Standard and Poors had put Penske on a credit-rating downgrade watch on fears of the firm over-leveraging to take on Extreme Makeover Saturn Edition. With the deal called off, Penske stock might not have the speculative upside it once did, but it has already doubled this year. And backing away from a potentially messy revival of a troubled brand has PAG headed out of the credit-rating doghouse. And as the man himself has said, “my dad told me a long time ago, it’s not what’s good for you Roger, it’s what’s good for the company.” Meanwhile, Pete “Autoextremist” DeLorenzo figures the Saturn network would make a good upscale network for Hyundai’s Genesis and forthcoming Eqquus lines. A whole network for two vehicle lines? I wouldn’t be holding my breath. Luckily Saturn dealers have had a few years to get used to being unwanted.
The tortured relationship between auto writers and the industry got a little more complicated this week, as Hyundai debuted its “Hyundai Momentum” advertising site. The site itself is a wall of images showing reviews of Hyundai products from such fine publications as Autoblog, Edmunds Inside Line, and KickingTires. And of course, carefully curated by Hyundai PR. “Everything you want to know about Hyundai,” reads the tagline, “As told by everyone but Hyundai.” Which is true if “everything you want to know” consists of breathless Genesis reviews, concept car hype, and meaningless award write-ups. If Hyundai’s going to drape itself in the questionable credibility of so-called auto-journalists, why not post a few Elantra or Sonata reviews while they’re at it? Or, better yet, why not pretend there still is a line between the auto media and manufacturer PR? The sad part is that Hyundai actually has momentum, which makes snowjobs like this all the more unnecessary.
AutoNation CEO Mike Jackson has issues with the industry practice of maintaining 50 to 60 days worth of supply of new vehicles. In today’s Automotive News [sub], Jackson advocates for a 30-day benchmark, blasting the manufacturers for their complacency.
What other business accepts the same benchmark for 50, 60 years and says, ‘That’s fine”? As soon as you put the parts together in a vehicle, nobody cares if it sits there for 90 days. And how you can get those ideas together in the same head is beyond me
Disagree? Take a look at the latest Automotive News [sub] inventory report before you weigh in. One example: as of September 1, Buick had a 25-day supply of LaCrosse and a 130-day supply of Lucerne. Cadillac and Lincoln also had no models with fewer than 72 days of supply. It seems this Jackson character is on to something…
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