It used to be that joint ventures with Chinese manufacturers were strictly for Chinese consumption. The Chinese would like nothing more than to expand to other markets with their foreign branded products. Strict joint venture contracts typically forbid just that. Sure, sometimes there are some small scale exportation tests. But usually, what is made in China, stays in China. Contracts can be changed or amended. More and more Chinese automakers seek to expand their relationship with joint venturers beyond China’s borders. Read More >

If you think China’s auto growth is scary, then you find yourself in rare agreement with China’s central government. China’s 30 (!) major (!) auto makers had a production capacity of 13.59m vehicles by the end of 2009. Chinese bought 13.64m units. This year, it will be much more. By July, Chinese had already made and Chinese had already bought more than 10m units, according to data released by China’s Ministry of Industry and Information Technology.

Chinese buy more than just cars. They have bought (well, leased) enough land, buildings and machinery in order to more than double car output by 2015. With the current expansion and investment plans exercised, China will have production capacity for a mind-blowing 31.24m units by the end of 2015. That according to Chen Bin, head of industrial coordination at the National Development and Reform Commission, the nation’s economic regulation agency.That’s more than six (!) times the U.S. production in 2009, and three times the U.S. auto production in the heydays of 2007. You are not the only one to get worried now. Even China’s NDRC thinks that might be a bit much. Read More >

China is currently in a state of confusion about August sales numbers: More than 50 percent up? Or less than 20 percent? It will take a week or so to sort that out. But one thing is clear: The big winners in China are German purveyors of luxobarges, says Reuters. Read More >

Another day, another story detailing the political nightmare that is the GM IPO. The WSJ [sub] reports that

The U.S. Treasury is concerned about how many overseas investors it should allow to buy big stakes in General Motors Co. through the car maker’s initial public offering this fall, according to people familiar with the matter.

The caution—aimed at minimizing any political fallout from the massive stock sale—could involve limiting or being selective about which non-U.S. investors such as sovereign-wealth funds would be invited to be “cornerstone” investors in the IPO

Expect Treasury to publicize any limitations on foreign investment in GM’s IPO sometime “within the next couple of weeks.” And no matter how the bureaucrats rule, it won’t be great for taxholders. After all, foreign investors (particularly in China) have the motivation and means to invest heavily in GM, which would help boost the IPO price. The downside, of course, is that the taxpayers’ $50b investment wouldn’t have kept the company American-owned. If keeping ownership in the US is the priority, it’s fair to expect a considerably lower IPO valuation. Heads they win, tails we lose. Ain’t the intersection of politics and business grand?

GM, Toyota, and Ford reported subdued August sales numbers for China today. This rains on the parade of the China Automotive Technology and Research Center. It said yesterday that August sales in China rose 55.7 percent. Did we say “don’t take it as gospel?” Read More >

Don’t take it as gospel. The China Automotive Technology and Research Center is known for its early, but not always its most precise numbers, although their precision has improved lately. If they have their act halfway together, then a new revolution is underway in China.  According to the CATRC’s numbers, August sales in China rose 55.7 percent over a year earlier to 1.21 million vehicles. This is absoNSFWingly mindblowing, because in August 2009, sales had been up 95 percent. Read More >

Karl-Thomas Neumann, Volkswagen’s new Emperor of China, took over his job today. He replaces  Winfried Vahland, who now runs Volkswagen’s Skoda division. Neumann has a problem many would like to have. “We can’t build enough cars to meet the demand in China,” Neumann told the Sueddeutsche Zeitung. Now, if you have nothing to sell, you lose market share, and you really have a problem.  Neumann will build. he will build new factories, and  … Read More >

As China’s car market no longer delivers the obscene growth rates it used to deliver (pretty hard when you compare with prior-year months where car sales jumped nearly 100 percent), carmakers are looking for clever ideas to light a fire under their Chinese sales. They all come up with the same solution: Attractive loans.

But nobody wants them. Read More >

GM is announcing the arrival of the first “driveable Volt” in China, in a move that GM’s China boss Kevin Wale calls a sign of The General’s “long-term commitment to bringing our industry-leading technology to China.” And despite a distinct lack of Chinese demand for green vehicles, a recent survey that shows as much as 75 percent of Shanghai’s drivers plan to purchase an EV in the next three years (not to mention government plans for increased EV subsidies) is giving GM hope that its plug-in will take off there. But in order to achieve Chinese-market success with the Volt, GM will likely have to offer the vehicle at a price point well below its US-market MSRP of $41,000.
Read More >

With the Volvo sale from Ford to Geely finally closed and consummated, Geely is losing no time, both in Sweden and in China.

In Sweden, Geely will “pursue investment opportunities” (read: buy other companies in part or in whole), reports Gasgoo, citing sources from the Ministry of Commerce (MOFCOM). When MOFCOM gets involved, then we are talking sizeable deals. According to the report, Geely intends to cooperate with Swedish companies in several sectors, including green cars, alternative fuels, and hybrid technology. Stefan Ostling, an auto project manager from Invest Sweden, says that Geely has already completed tie-ups with Swedish auto technology consulting firms like Semcon and HiQ through equity participation and acquisitions. Read More >

A year ago, BYD issued the startling announcement that “it’s our company’s long-term target, to be China’s No. 1 automaker by 2015 and to be the world’s leading car maker by 2025.” Meaning that they would have to unseat either Volkswagen or Toyota. When they said that, polite analysts in China opined that BYD’s dream was  “realistic” because China and other Asian markets show more promise for growth than the relatively mature US and European markets. In private, people were wondering what drinks they were serving at BYD’s cafeteria.

Now BYD spokesman Lin Mi told Beijing’s Global Times that they may have been a bit overconfident. Read More >

From a week deep in our “How The Hell Did We Miss That” file comes a Reuters report that shows GM considered floating its IPO on the Hong Kong Hang Seng index. GM’s interest in a Hong Kong float has obvious roots: the company is extremely well-positioned in China, where high savings rates and the prospect of steady local sales growth could have helped bring in both private investors and GM’s partner firms. But according to a Reuters source, GM rejected the idea because it would have delayed the IPO past its Thanksgiving deadline

I don’t think signaling goodwill toward Asia is likely to be a significant enough argument for all the cost and complexity. I don’t want to overstate the cost and complexity but it’s not insignificant

Read More >

The number of cars in Beijing is expected to double by 2015, the Beijing Transportation Research Center told Global Times. By the end of 2009, Beijing had 4 million cars.

A taxi driver said it more succinctly: “We’re making another Great Wall, it’s just that this one is a wall of cars.”  Relief could come from a monstrous contraption called the straddle bus. Read More >

Up to now. GM saw a limited, Europe-only role for Opel. That’s pretty much a death knell. No serious brand can survive on Europe alone. With the weak Euro, it would be utter stupidity to try to survive on Europe alone. Finally, this fact dawned on GM. Opel now received the o.k. to expand into markets outside of Europe. You probably can guess which markets they have in mind. Read More >

Think GM has a tough sell for its coming IPO? Chinese battery/automaker BYD is preparing its own $420m stock offering, likely to be floated on the Shenzhen A-Shares exchange, in the midst of a Chinese-market downturn, and an ongoing lawsuit with electronics manufacturing giant Foxconn. And all this comes after a long run of good news for the Hong Kong-listed BYD, which had been running strong on optimism generated by Warren Buffet’s major investment in the firm nearly two years ago. So, is BYD in real trouble of having its overvalued stock burst, or is the company strong enough to weather the storm that’s swirling around it?
Read More >