Did we say that the auto industry has to deal with severe capacity problems? China has capacity problems alright. It looks like the biggest impediment to further sales growth in China is a shortage of cars.
China’s car makers are running three shifts and still cannot keep up with the demand, Bloomberg reports. Nissan’s factory in central China is making cars almost 24 hours a day, yet customers are faced with three month waits for their new car. Other companies, such as Ford and Honda, are running their Chinese factories at full capacity, with overtime and weekend shifts, and still can’t deliver enough cars. Read More >
People have a refound appetite for luxury vehicles, decided Daimler. Their workforce in Sindelfingen is working full-time. Wonders of wonders: They even brought temporary workers back. All this as per the Frankfurter Allgemeine Zeitung [sub] in Germany. Reason for the sudden Benz boom? Read More >
“I’m optimistic that it’s going to happen,” Wale told the Freep reporters on the sidelines of the Automotive News World Congress in Detroit. “Tengzhong is not an established manufacturer and that’s an issue that needs to be addressed with the Chinese regulators.” Uh-oh. Read More >
Kevin Wale, president of GM China, is convinced that China has passed the U.S. for good as the world’s largest auto sales market. He expects China’s growth to continue, creating a gap that will be too large for the U.S. to close, says AP.
As reported ad nauseam, vehicle sales in China last year rose 46.2 percent to 13.64m units. For this year, cautious industry association projections expect somewhere between 15m and 16m units to change hands.
Wale thinks Chinese auto sales will be anywhere between 14.5m to 15.5m by the end of this year. For the U.S., analysts predict 11.5m to 12m.
Very optimistic analysts reckon the two countries could be trading places until 2015 when China firmly takes the lead. Wale isn’t one of them. He doesn’t think the U.S. will ever regain the lead. Read More >
The prospect of US launches by Chinese and Indian auto brands like Tata and BYD have at least one of the established US-market players in a paranoid froth. Honda VP John Mendel revealed a few of the nightmare scenarios that keep him up at night to USA Today [UPDATE: more on Mendel’s fears at Automotive News [sub]]. One, inspired by BYD’s plans for a 2010 US launch without a distribution channel in place, is that newcomers could skip the dealer model altogether. Mendel worries that “warehouse stores or electronics stores” (sound familiar?) could be used to cut dealers out of the loop, “blowing up” business-as-usual for US distribution strategy.
Having divested much of its premium brand portfolio (Volvo, Jaguar, Land Rover, Aston Martin), Ford is missing out on luxury sales in growth markets like China. So it comes as no surprise that Automotive News [sub] would ask Ford President of the Americas Mark “MKF” Fields whether Ford’s Lincoln brand could go global. Fields’ reply?
Potentially, but we are focusing Lincoln here in North America for right now. We don’t have any plans at this point to take it global. That doesn’t mean in the future we wouldn’t look at that, but it’s very important for us to focus on North America.
According to the Detroit News, production of Hummer H3 and H3T models at its Shreveport, LA plant will stop on Monday, as the in-limbo brand watches its sales collapse. H3 and H3T models account for about a quarter of the Shreveport plant’s capacity, and Colorado and Canyon platformmates will continue to be produced. Meanwhile, the deal to sell the Hummer brand to Chinese firm Sichuan Tenzhong remains unconsummated, reportedly held up by the Chinese government. So when will Hummers go back into production? “When a sale is complete, once marketing kicks back in and there is new interest and enthusiasm, production will fire back up,” says a Hummer spokesman. In other words, never. It’s been a fun ride, Hummer. Thanks for the memories!
“Ford is trying to get the deal done with Zhejiang Geely Holding Group within the next several weeks,” a Ford spokesman said to Dow Jones Newswire. Ford is sticking with Geely, and is pouring cold water on rumors that Ford is entertaining other bids and bidders.
Sweden’s Dagens Industri had reported on Tuesday that Volvo’s CEO Stephen Odell had intimated that “Ford is open to talk with others. Those who say that the door is shut can go to Ford and talk with them whenever they like.” Looks like it’s wishful thinking. Sure, anybody can talk to Ford (if their call is taken.) But they will receive only one answer: “No.” Read More >
So they say, if you want to be a successful car manufacturer, you must have steel in your DNA, gasoline in your blood, a history reaching back generations, and an annual output of at least 5m to stay profitable. And even then it’s not a slam dunk, as we are painfully aware.
Buffett-backed Chinese EV firm BYD is back at the Detroit Auto Show after making its main-floor debut last year. Like most automakers, BYD has toned things down a bit this year, featuring the same vehicle it brought last year, the all-electric e6 crossover. Last year, BYD said the 250-mile, 14-sec 0-60 e6 would be coming to the US at an estimated $40k pricetag. This year, BYD’s Fred Ni is telling ABC that the e6 could be more reasonably priced, implying that it would be sold at a price point comparable to similar gas-powered vehicles.
Up to now, the M.O. of foreign joint ventures operating in China was that precious intellectual property was brought to China, where the working masses would turn it into cars. Now, the Chevrolet Sail marks a, well, change of tide.
Old China hands remember the Buick Sail. For quite a while, the Opel Corsa supermini had popped up all over the world under various guises: Vauxhall Nova, Chevrolet Classic, Holden Barina, Opel Vita, as the Chevy in Mexico, as Swing, Joy, and in China as the Buick Sail. In China, the Sail came down in 2005.
Now, a new Sail is sold in China. Not just made, but developed in China. Read More >
It’s definitely official now. The last word in Chinese vehicle sales has the China Association of Automobile Manufacturers (CAAM,) and the CAAM has spoken. Vehicle sales in China last year rose 46.2 percent to 13.64m units. This is not surprising, but it is nonetheless reassuring that the 13.6m number TTAC had reported last week was only 40,000 short. It is equally official that China is the world’s largest auto market, ahead of the U.S.A. by 3m units, more or less.
Vehicle sales in December alone rose 91.7 percent from a year earlier to 1.41m units in China, the CAAM said. Passenger car sales jumped 88.7 percent in the last month to 1.1m units. Full-year 2009 China passenger car sales are up 52.9 percent in 2009 to 10.3m. If passenger cars alone would count, then the truck and SUV happy USA would look like a 3rd world country: According to Automotive News [sub], only 5.7m new “passenger cars” drove off U.S. dealers’ lots in 2009, slightly more than half of what the Chinese bought.
Will the sales boom continue in 2010? Not as mad as in 2009, expects the CAAM. The manufacturers association expects growth to continue at a more moderate pace of 10 percent. This would mean 1.36m units in additional sales, or a total of a little less than 15m. Merrill Lynch is a little more bullish and thinks that the Chinese market will grow to 15.5 million vehicles this year, the Nikkei [sub] reports. A horrific thought to those who are scared that Chinese will use all our oil, and that melting polar caps will destroy the value of our waterfront properties. Wait, it’s getting worse. Read More >
With more than 30 years of advertising under my belt, I’m no stranger to spin. Once in a while, I’m impressed by the gumption of some spinmeisters. This is one of those times.
So I read at Reuters that Jaguar is “ready to leap back to pre-crisis sales.” Reuters quotes Jaguar Land Rover’s head David Smith, who said: “In the past, Jaguar built more than 100,000 vehicles per year. We can return to such levels once the crisis is over.” Reuters says Smith gave those optimistic remarks to Germany’s Wirtschaftswoche.
So over to Wirtschaftswoche I go. At first, I think I found the wrong article. Read More >
Volkswagen has grand plans for the U.S.A. Volkswagen wants to “increase sales and market share in 2010.” Ok, who doesn’t. Now, for the delusions of grandeur part: By 2018, Volkswagen wants to more than triple annual car sales in the U.S. to 1 million a year, with Audi accounting for 200,000 sales, reports the Wall Street Journal. Seen any flying pigs lately?
Why 2018? By 2018, Volkswagen wants to rule the world, and trounce Toyota in unit sales, profitability, customer satisfaction, innovation, and most likely size and quantity of cup-holders also.
Everybody in the company has to do his or her share for the grand plan. Read More >
Bloomberg read it in Sweden’s Dagens Industri that General Motors will send the tools for Saab’s new 9-5 model to China. Mind you, these are not the old 9-5 tools sold to BAIC. These are the tools for the new Epsilon 2 based 9-5, or what Dagens Industri calls “the crown jewels of Saab.” Read More >
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