While U.S. Senators are wringing their hands and pounding their chests about EV know-how allegedly escaping to China, makers from other countries are doing business. The most recent EV entry is Honda. Honda will build an EV in China and sell it in China in 2012 “in limited quantities,” its R&D chief Toshihiro Mibe told TTAC in Chengdu. The electric vehicle will undergo tests this year. When ready, the EV will be launched under the Honda brand. When asked, Honda spokesperson Natsuna Asanuma was convinced that the Honda EV will qualify for Chinese subsidies.
Mibe dismissed know-how issues: “An EV is much simpler than a regular car. The only difference is the battery and the electric motor.” Read More >
Pangda’s Chairman Pang Qinghua was not in Stockholm as reported. He was in Chengdu. At least today. As you can see above, he smiled into TTAC’s camera. At the sidelines of the conference, Chairman Pang had told Fang Yan of Reuters:
“Now that it’s in bankruptcy protection, all previous pacts are invalid. It’s up to the court to decide. It can also find a new partner.”
Talking to Fang Yan again, Pang qualified the statement:
“What I meant was that during restructuring, the court is authorised to adapt any restructuring plans, including vetoing previous agreements. It’s up to the one handling the reorganisation to decide whether previous agreements are valid or not. I am sticking to the commitment. Yes, I am confident about it.”
Saab calls the initial comments a “misunderstanding,” and Victor Muller apparently texted Reuters to say the deal with both PangDa and Youngman are “on track.” But, as Bertel reported yesterday, the real issue is whether or not Saab has any intellectual property to bring to the table. If not, the Chinese government will not approve the deal, regardless of how optimistic Muller, Pang, or the Swedish bankruptcy administrator who controls Saab’s fate are. The furor over Pang’s comments have provided a temporary smokescreen for that issue, but it won’t last…
The Global Automotive Forum is an annual confab of Chinese politicos, functionaries, industry leaders and wonks of the world. This year, it is in Chengdu, and the motto is “From volume leader to innovation leader.” The subhead could very well be: “What now?”
Speaker after speaker bemoans the fact that China is winning by sheer numbers, but is falling behind in the innovation race. The fractionalized Chinese car industry simply does not have the wherewithal to keep up with the big multinationals. Read More >
In a statement issued late Friday, China’s Geely poured cold water over rumors that it is interested in Saab, but confirmed that there was a meeting – because they wanted to be nice. There is another version that says that Sweden’s Finance Minister caused Geely’s Li Shu Fu a massive loss of face, whereupon he took his balls and went home. Read More >
Where to start? Let’s start with the money. The $96 million promised by China’s Youngman and badly needed by Saab are not here. They haven’t left China either. Not just because China is on vacation. Youngman claims they have not received what they were promised, and until that happens, no money will be sent. “If the conditions are not met, we cannot pay,” Rachel Pang, president of Youngman, said in an email to Dagens Industri. Welcome to China. Now wait what the Swedes have up their sleeves. Read More >
At Saab, which is working (well, not really working) under court protection from creditors, the big question is: “Did the money come in?”
The money is the €70 million ($93 million) promised by the Chinese bus manufacturer Youngman as a bridge loan. Saab needs cash desperately. Court protection means no new loans. Cash is king. No cash has arrived from China. Saab is not the only party in Sweden that is waiting for answers from China. Sweden’s National Debt office is waiting for answers also. Let’s have a look. Read More >
What looks like a Chinese-Japanese matter should cause considerable heartburn in Sweden and the Netherlands: The Chinese government has informed Fuji Heavy Industries Ltd. that it will not approve the automaker’s application to set up a joint venture in China, says Japan’s Yomiuri Shimbun. Let’s take a closer look. Read More >
Last year, tensions ran high – about dirt. Emotions were whipped up about a Chinese embargo on stuff most people never had heard of: Rare earth.The stuff is used to make magnets that go into anything from hard drives to generators and electric motors. Cooler heads tried to point out that rare earth is not rare at all, and that China has as much a monopoly on rare earth as it has on sand. Nobody listened to the cooler heads, and rare earth prices went stratospheric. Step aside, those rare earth prices are crashing down.
The prospect of a Chinese auto industry growing at insane speed thanks to a booming market and resiliently low wages has long kept auto industry execs up at night, most notably inspiring Sergio Marchionne’s acquisition of Chrysler. But basic economic principles dictate that you can have a high rate of growth or low wages… but not both. Growth inevitably drives inflation, which drives up wages, which in turn slows growth. And according to a report in the Wall Street Journal [sub], that dynamic is already taking hold.
Jae-Man Noh, head of Hyundai’s joint-venture operations in China, said average manufacturing-worker wages in China—about 27,000 yuan ($4,200) a year per worker in 2009—are likely to double by 2015 from current levels.
Auto makers are expected to be affected as much as other industries by the trend, if not more, Mr. Noh said, adding that wage costs for many foreign auto manufacturers already have doubled in less than a decade. He said that a rival foreign auto maker that Hyundai has researched has seen worker wages in China rise to 49,000 yuan a year per worker in 2010, up from 24,500 yuan a year in 2003.
“We need to let go of our perception that the Chinese market is a low-cost production base,” Mr. Noh told a group of reporters at Hyundai’s office in Beijing. He didn’t offer specifics on Hyundai’s wage costs in China.
And though the laws of supply and demand made this development inevitable, the story of the decline of China’s low-wage manufacturing base is a lot more interesting than you might think. After all, economic and historical forces may seem mechanical in the abstract, but on the ground level they work in dramatic, disruptive ways.
Thanks to the notoriously leaky Chinese Patent and Trademark Office, and the intrepid research of Carnewschina, we now know that Honda will enter the Chinese market with a second “Chinese” brand. Read More >
Manufacturers are racing to enter the largely non-existent market of electric cars in China. After Nissan,Daimler,GM, and possibly Ford, Volkswagen has been caught doing it with SAIC. Reuters found that an electric car called Tantus, “which will be produced by Shanghai Volkswagen, is already on a list of approved new vehicles, according to China’s Ministry of Industry and Information Technology.”
This is not Volkswagen’s first Chinese EV-to-be. And it’s not surprising. Read More >
The Detroit News‘s David Shepardson has a way of being on hand with a microphone whenever GM CEO Dan Akerson lets loose with a memorable line, and today he has Akerson telling a Bloomberg News Forum that the green star of the American auto turnaround, the Chevy Volt, could be built in China within a few years. Said Akerson
We’re going to export into China for probably a year or two and see if it gets a take … if customers set the right usage patterns. If it does, we may manufacture it there.
[Editor’s note: the following block-quoted passages were sent to us by an enterprising anonymous tipster (italicized passages were quoted in the original from linked sources). I’ve decided to let the argument speak for itself, and simply interject a few thoughts (non-block-quoted) towards the end.]
“On Slide 12, we provide what we view as key performance indicators for GM North America. The 2 lines on the top of the slide represents GM’s U.S. total and retail share. The bars on the slide represent GM’s average U.S. retail incentives on a per unit basis. Now U.S. retail incentives as a percentage of average transaction price and compared to the industry average is noted at the bottom of the slide.
“For the second quarter of 2011, our U.S. retail share was 17.6%, up 1.3 percentage points versus the prior year and down 0.6 percentage points versus the prior quarter due to the absence of the first quarter sales programs. Our incentive levels on an absolute basis have declined significantly from the prior year as well as sequentially. On a percentage of ATP basis, our incentives were 8.9%, down 2 percentage points versus the prior year. This puts us at approximately 103% of industry average levels for the second quarter of 2011, flat versus the prior year.
“In terms of incentive levels, our plan continues for us to be at approximately the industry average for the year on a percentage of ATP basis. These results for share and incentive demonstrate the impact of our plan to produce great vehicles the customers are willing to pay for.”
I did not try to verify the first part of the highlighted claim (that incentives have declined compared to previous year totals), but the second part of the claim (that incentives have declined sequentially) is demonstrably false.
When Lansing Senator Debbie Stabenow sent her most recent routine letter to U.S. Trade Representative Ron Kirk, complaining that the nasty Chinese want to get their greedy hands on the super-secret electric vehicle know-how of Ford and GM, both manufacturers protested. Against the assistance from Ms. Stabenow. Ford and GM said that “they have no plans to build electric vehicles in China.” At least that’s how the Detroit News heard it. Either the DetN was misinformed. Or GM and Ford quickly changed their minds. Or they just wanted Debbie off their backs. Ford and GM both want to make EVs in China. Read More >
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