Chinese automakers may not get government approval to expand their capacities, unless they first agree to take over another Chinese carmaker, says the Shanghai Securities News via Reuters.

China may have the largest auto market in the world, with 13.6m units sold in 2009, but China also has a big problem: Way too many automakers. There are more than 100 automakers in China. The exact number is unknown. China’s top 10 automakers accounted  for 87 percent of total sales, or 11.9m in 2009. The more than 100 small guys built some 1.7m units – together. That’s 17000 units each. Read More >

Though Toyota is getting the brunt of the attention for what are apparently faulty gas pedals, the fact that the problem has been traced to supplier CTS means that Toyota isn’t the only OEM that’s shutting down production until a fix for the pedals is found. Bloomberg reports that Ford’s JV with Jiangling Motors in Nanchang, China has halted production of the Ford Transit commercial van, after switching over to CTS-supplied pedals in December. “We think it’s pretty isolated, but we are aggressively running it to ground,” Ford’s Alan Mulally told analysts in today’s financial results conference call. No other Transits are said to be affected, and Jiangling says that they have not received any reports of unintended acceleration for its Transits.

Here is an interesting facet of the “the Chinese car market is bigger than the American car market” meme:

In 2009, Japanese automakers have, for the first time, built more cars in China than in the U.S. reports the Nikkei [sub]. Says the paper: “Of the eight Japanese passenger carmakers, six manufacture vehicles in China. Their aggregate Chinese output came to roughly 2.25 million units in 2009, exceeding the 2.1 million produced in the U.S.”

Which pours cold water on the often voiced theories that people base their car choices on ethnic prejudice. Japanese people are not necessarily hugely popular in China. Japanese cars are. Read More >

GM and VW are the undoubted leaders in the biggest car market in the world, and despite challenges from homegrown upstarts like BYD, analysts say that the two global majors are best positioned to take advantage of their leadership in China. But now strategies they are a-changing. Recently, TTAC reported that VW seemed to be getting cold feet about expanding their capacity, but GM seem to have come to the opposite conclusion. Reuters reports that GM expects that they will need to build a new manufacturing plant to allow the growth of their Chinese division to continue. “We expect to sell more than 2 million units this year,” Kevin Wale, managing director of GM China, said. “We have enough capacity to build the cars we need to sell this year and we need to continue to look for ways of increasing our capacity. That will mean we will have to add a new plant some time in the near future.” The plant won’t be built this year because, according to Mr Wale it would be “physically impossible” to move so quickly, but with current GM China plants adding new shifts and expanding current production lines, it seems like their current facilities are just about tapped out. Maybe they could use some of their excess capacity in the United States? Er, maybe not.

Want to move to Shanghai to cash in on the Chinese car boom? Want to drive a car in Shanghai? Better bring a lot of money.

Prices for a license plate in Shanghai rose to at two year high in the year’s first plate auction, Shanghai Daily reports. The average price of a private car license rose to US$5,617. A new QQ goes for as little as $4,100. Read More >

On the back of a 45 percent growth that propelled Chinese car sales to 13.6m in 2009, and faced with a shortage of cars that doesn’t allow them to feed China’s ravenous appetite for even more cars, Chinese automakers are racing to build more plants. The combined capacity of the 10 largest players is expected to balloon from around 12 million units in 2009 to a breathtaking 21 million in 2012, today’s Nikkei [sub] reports.

Some examples: Read More >

The extent to which Honda has lost its mojo has been a hot topic in these pages of late. Though the big H has stumbled with Acura, hybrids, design and other crucial areas, one major positive seems to persist: the strength of the Honda name. Which is why it’s so strange to read Bloomberg report that Honda will launch a new brand in China next year. The new brand, named Li Nian meaning “ideal” or “spirit”, will be used for Honda’s new sub-Fit small car, designed to take advantage of China’s reduced tax on engines smaller than 1.6 liters.
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In November last year, we reported about rumors in the Chinese press that Volkswagen might introduce the SEAT brand to the Middle Kingdom. We didn’t put much credence in the rumor, due to some inconsistencies in the reports. The Guangzhou auto show, at which the news was supposed to be announced, came and went with no announcement. Another Chinese rumor.

Now, the matter is back on the ticker. Read More >

Japanese car manufacturers, reeling from a doubly whammy at home (down 9.3 percent) and in the U.S.A. (down 21.2 percent) are looking increasingly to growth markets such as China (up 45 percent) and India (up 18.7 percent.) Large players like Nissan, Honda and Toyota in China, and Suzuki in India, have been there for years. Now there is a virtual stampede. A collection of news from today’s Nikkei [sub]: Read More >

Remember how GM brags that they are the largest auto manufacturer in China? CAAM, the China Association of Automobile Manufacturers says otherwise (via Gasgoo.) Here is the official CAAM list of the 10 largest passenger vehicle manufacturers in China, and their units sold in 2009:

1. Shanghai Volkswagen Automotive Co: 708,100 units
2. FAW-VW Automobile Co Ltd: 669,200 units
3. Shanghai General Motors Co Ltd: 668,200 units
4. Beijing Hyundai Motor Co: 521,000 units
5. Dongfeng Nissan Ltd: 459,300 units
6. BYD Co Ltd: 448,400 units
7. Chery Automobile Co Ltd: 409,300 units
8. Guangqi Honda Automobile Co Ltd: 337,200 units
9. Tianjin FAW Toyota Motor Co Ltd: 334,700 units
10. Geely Holding Group Co Ltd: 329,100 units

Taken into account that VW makes their Chinese cars with two joint ventures, SVW and FAW-VW, Volkswagen’s  combined total rises to 1,377,300. The imported VWs bring the number well above 1.4m . Read More >

There’s a lot happening in the world of cars these days, but few stories are as compelling as the emergence of two rival US-based firms created by two former bosses of the Chinese automaker Brilliance. At face value, both Hybrid Kinetic Motors and Greentech Auto are little more than visa scams: neither attempts to hide the fact that their fundraising plans involve a US Visa program (EB-5) which allows citizenship to foreign nationals who invest a half-million bucks in an American business. For additional scam warning points, both firms purport to use mythical hybrid engines and plan factories with annual capacities of a million units. But as easy as it is to simply write these firms as Chinese visa hucksters grifting the good folks of such towns as Tunica, Mississippi and Bay Minette, Alabama, they keep showing up in the news with stories that predecessors like ZAP would have given their stock-price-boosting-press releases for. To wit: the latest news that Alabama hopeful Hybrid Kinetic Motors has signed a half-billion dollar deal with Italdesign-Giugiaro, the largest order in the famed design house’s 42-year history.

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Everybody is denying that Mazda’s Chinese joint venture with Ford is quickly coming to an end. The Nikkei is unfazed by the chorus of contradiction. Today’s edition of the Japanese paper sheds more light on the impending divorce in China: Mazda wants “to give itself more latitude to navigate the growing market as it sees fit.” That’s putting it mildly. Read More >

China’s Geely has joined other manufacturers such as Chevrolet, Ford, Hyundai, Renault, Kia, and Toyota, and launched a production line in Russia. Geely opened a plant in Russia’s Caucasus republic of Karachay-Cherkessia, China’s state news agency Xinhua reports. Read More >

A lot of what we have written in the last few days, even what we have not yet written, is utterly wrong, say the objects of our writings. Here are the denials of the day. Read More >

Divorce Sunday: Mazda and Ford will dissolve their joint venture partnership in China by 2012, The Nikkei [sub] writes.

The Chang’an Ford Mazda Automobile Co. has been producing cars since 2006. The JV is 50 percent owned by Chang’an, 35 percent by Ford and 15 percent by Mazda. Read More >