Starting January 1, 2010, Chinese buyers will get the rare chance to buy a genuine, Made-in-München (or Regensburg) BMW 3 Series at the price of a Made-in-Shenyang BMW 3 Series, while the Chinese BMW/Brilliance joint venture updates its production facilities.
BMW Brilliance will import BMW 3 Series in large quantities starting January 1, 2010. The BMW venture in China will stop manufacturing the series temporarily to upgrade its production line, Gasgoo reports.
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The Christmas season would be a reason to be merry, would it not be for Hugo Chavez. More details about his expropriation threats emerge. Turns out, Chavez did not just threaten to kick out Toyota for being lackadaisical in the production of “rustic” vehicles.
“President Hugo Chavez told foreign automakers Wednesday to share their technology with local businesses or they will be told to leave the country,” writes the Boston Globe. Chavez gave the ultimatum in wholesale fashion to Ford, General Motors, Toyota and Fiat. Implied, the ultimatum is also meant for Fiat-controlled Chrysler, for Mitsubishi, Mack and Fiat-owned Iveco. All of the above have production facilities in Venezuela. All are at risk of instant deportation.
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Not all too surprisingly, China’s Geely is planning to build a Volvo factory in China once the purchase of Volvo from Ford has closed, Bloomberg reports. The plant will most likely go up in Beijing, but just in case the Beijing government is not providing the adequate support, Geely has two other Chinese cities identified for the facility.
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Venezuela’s, well, President Hugo Chavez took a page out of the U.S. government’s playbook, and ordered Toyota’s local assembly plant to make more cars, pronto. If the Japanese don’t produce an adequate number of vehicles designed for rural areas, Chavez will expropriate Toyota and kick them out of Venezuela.
According to this morning’s indignant Nikkei [sub,] Chavez said his socialist government is going to apply strict quotas on the number and types of vehicles firms can produce. He ordered an immediate inspection of Toyota’s facilities to see how many “rustic vehicles” they are currently producing. (“Rustic,” not “rusty.”)
“They’ll have to fulfill (the quotas), and if not, they can get out,” said Chavez during a televised address. “We’ll bring in another company.” And what company would that be?
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As predicted various times on TTAC, Volvo has finally been sold to China. Ford said in a statement that it had agreed to all substantial commercial terms in a deal to sell Volvo to China’s Geely Holding Group, parent of Geely Auto, Reuters has on the wire.
“While some work still remains to be completed before signing, Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010,” Ford said. Final closing on the deal is expected for Q2 of 2010.
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GM netted a paltry $200m for the Saab technology it sold to China’s BAIC. So said BAIC to Reuters today, while desperately trying to keep a straight face. The money bought BAIC the rights to three vehicle platforms, two engine technologies and two transmission systems. A pittance, given the fact that developing a new car typically costs from $1b on upwards these days.
Granted, the IP for the 9-5 and 9-3, and the tooling to make them are not the newest, but you can trust BAIC to make the most of it. Interestingly, BAIC got what they desperately needed:
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Two sales of two Swedish car factories are close to the finish line. One may live on happily, but in a foreign land. The other may die from exhaustion. You want the good news or the bad news first? Ok, let’s start with the good news.
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There is an interesting analysis on Chinacarforums: China-produced Western cars tend to come out bigger than their Western siblings. Especially at the higher end. A made-in-China Cadillac STS is 124mm longer than the U.S. sister model. The wheelbase grew by 100mm. A Chinese Audi A6 L has gained 97 mm in length over the Made-in-Ingolstadt relative. A BMW 5-series, made at the Chinese joint venture with Brilliance, has gained a whopping 140 mm in length and wheelbase over the Bavarian model.
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After a two year neck-and-neck race between battery makers LG Chem and A123, GM awarded its Volt contract to Lucky Goldstar – make that LG Chem, or rather their subsidiary Compact Power: Now the Lucky Guys are waiting for the thing to hit the road in large quantities. A123 was widely regarded as the far better technology, the Koreans most likely were cheaper – we’ll most likely never know.
Now, A123 cut a possibly much bigger and more lucrative deal. A123 is forming a joint venture with China’s top carmaker SAIC to build and sell battery systems for electric vehicles in the world’s largest auto market, and possibly beyond.
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China’s Chery will be the first ever Chinese brand to enter the venerable Dakar Rally.
After the Paris-Dakar Rally had been canceled in 2008 for fear of terrorist attacks, the world’s roughest race moved to South America in 2009. For good, as it seems. The 2010 edition will start on New Year’s Day in Buenos Aires, to return (with a considerably thinned-out field) to Buenos Aires on January 16. The route is some 9,000km/5600m long. Four of the 14 legs of the race will be spent in the Atacama Desert. The Andes will be crossed two times at altitudes of about 4,700m. Team Chery will send 4 cars:
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When I came to China for the first time in 2004, after-work congregations of foreign executives who worked for Chinese auto joint ventures usually went like this: Someone muttered into his Tsingtao beer, or something stronger: “The Chinese will want us out within eight years.” Upon hearing this, all others around him nodded gravely, and another round was ordered. Over the years, more and more expats were sent home to Detroit, Wolfsburg, and Aichi. The silly “twin” system (a foreigner and a Chinese on the same job) stopped. Of course, the open secret was never officially discussed, but the outcome appeared to be inevitable: The days of the foreigners are numbered.
It will be 2010 within a few weeks, and the foreign (U.S., European; Japanese) joint ventures are still seemingly safely ensconced in China. As reported umpteen times at TTAC, China has become a strategically important market for most auto manufacturers. Nobody thinks anymore that come 2012, China will kick all joint venture partners out.
Yet, here is the first step in that general direction:
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Automotive News China [sub] reports that Mercedes believes its Chinese-built cars are every bit as good as its German-built models. Ulrich Walker, Chairman and CEO of Daimler Northeast Asia says:
Yes, our cars here are exportable. There is no difference in quality with those made outside China.
But, as Bertel Schmitt reports, demand for luxury cars is strong enough in China that we won’t be seeing “Beijing, China” as the point of assembly on US-market Mercs.
Unfazed by Swedish unions calling for an investigation into the Ford-Volvo-Geely deal, Geely is getting itself ready to swallow the big Swedish fish. The deal is already being feted as episode two of the takeover of international icons by the Chinese.
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GM Chairman and CEO Ed Whitacre has made his first real media availability today, answering questions on a number of issues including the deal that sent control of GM’s most important Chinese joint venture to its partner, SAIC. According to Whitacre, the deal was put in place by former CEO Fritz Henderson. “It was sort of done before I got here,” Whitacre tells Reuters. Not to worry though, Whitacre has met with his counterpart at SAIC and was assured that “the nature of the partnership would not change.” Meanwhile, Gasgoo all but confirms that the rationale behind the deal is competition in India’s small-car sweepstakes, as a $3,500 sub-Spark model is apparently being planned to compliment the GM-SAIC-Wuling commercial vans that will spearhead the effort. Given how crowded India’s small car market is shaping up to be, it’s interesting that Whitacre didn’t cancel the agreement as he did with Henderson’s deal to sell Opel to Magna. And as for Henderson’s departure? “There was just a common agreement that what you want to do is not what I want to do,” says Whitacre.
“We’re still dependent on each other,” Ford’s head of global product development Derrick Kuzak tells the Detroit News, dispelling rumors that Ford and Mazda are going their separate ways. “You cannot change that overnight.” According to Kuzak, many of Ford’s most important vehicles continue to be based off of Mazda platforms. Ford Chief Financial Officer Lewis Booth adds,
The strategic relationship continues. The business relationships continue. And they continue on the basis that they’ve always continued. Where it works to the benefit of both companies, we do things together, and where it doesn’t, we don’t.
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