Category: Global

By on August 31, 2011

Bloomberg reports that Fiat is considering moving production of planned Alfa/Jeep-branded compact CUVs from its Italian Mirafiori plant to the US, as a rising Euro forces tough production choices. Production of some 280,000 units per year were planned to start at Mirafiori in late 2012, but Fiat may now build an as-yet unannounced subcompact there instead. According to Bloomberg’s reporting, Fiat/Chrysler CEO Sergio

Marchionne, while confirming his commitment to invest at the Turin facility, told Piedmont Region President Roberto Cota Aug. 29 that he may change the production plans for the plant.

“Fiat is evaluating which model it will build at Mirafiori,” Cota said after meeting the CEO.

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By on August 9, 2011

With GM’s share price currently hovering below $25, well under its $33 IPO price, The General is holding its second annual Global Business Conference in hopes of encouraging investors the world over to buy into its turnaround. A webcast is currently streaming over at the GM Investor Relations website, but the key points are available in slides available in PDF here. The presentation involves nearly every level of GM’s business, so listening in and reading the entire PDF is going to be the best way to make sense of what GM is trying to communicate… but if you just want an overview, check out the gallery below for a few hand-picked slides, illustrating some of the more important points.

By on August 4, 2011

From the “sidelines” of the MBS conference in Traverse City Michigan, Wards Auto reports that Fiat-Chrysler CEO Sergio Marchionne is not keen on giving the UAW a board seat. UAW President Bob King has been pushing for VW Works Council-style representation on the Chrysler board, but as Marchionne explains

The best intervention that the unions or labor or organized labor can bring to the party is a support for the choice of the right leader to lead the organization… I understand Bob. I understand what he’s saying (but) we have to be very careful that we don’t exaggerate the value of co-determination

Co-determination gives rise to two decision-making bodies. The executive board makes decisions. And the unions sit on supervisory boards, one of which is the choice of the CEO. The most fundamental and difficult decision that a board makes is the choice of a CEO. If you make the right choice, issues with labor unions will not arise

Considering the UAW VEBA trust fund is the single minority shareholder in his company, Marchionne is admirably and typically frank in dismissing his union boss’s ambition. And since Marchionne doesn’t intend on retiring before 2015, his answer might as well have been “why do you need a board seat, when you have me?” But there’s another aspect to his argument that reveals that Bob King might have already doomed the union’s chances at a board seat.

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By on August 4, 2011

GM has announced its Q2 earnings [Analyst slides in PDF here], and the firm has recorded a healthy $2.5b profit for the quarter on strong North American performance and an end to losses from the European Opel division. In fact, on an EBIT (earnings before interest and taxes) basis, all of GM’s global divisions were in the black last quarter, although GM Europe and GM South America both recorded modest $100m gains and GMIO (which includes the lucrative Chinese market) recorded a $600m EBIT. The powerhouse continues to be GM North America, which recorded $2.2b in EBIT, continuing North America’s post-bailout importance as the driver of GM’s financial results. Globally, a $600m reduction in EBIT due to costs and “other” was offset by the same amount of gains in volume/mix, while pricing added a billion dollars to overall EBIT. And though fleet sales were up in North America, incentives for the quarter appear to have hit record lows. [Hit the jump for global deliveries and market share/fleet data, via GM’s financial highlights release].

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By on August 2, 2011

With the luxury market defying sluggish economic conditions, Daimler CEO Dieter Zetsche doesn’t want the upstarts at BMW and Audi to slip past it… which they are. Six months through 2011, the Mercedes brand found itself in third place among the German global luxury brands, at 610,531 units. A surging BMW captured 689,861 sales in the half, while Audi took second with 652,970. This, for Zetsche, is an unthinkable state of affairs.  In a letter to his employees, excerpted by Automotive News Europe [sub], Zetsche makes it clear that leadership in the luxury space is a Daimler birthright.

Some of our competitors are now growing faster and more profitably than we are. Granted, those are just snapshots in time and should not be overestimated. After all, many of our best new products are yet to come… In the long run we can’t be content to be in a “solid second” or even “third” place: We are Daimler – we should be far ahead of the pack! And if that requires something that we don’t currently have, then we’ll identify and develop it.

Enjoy your summer and refill your tanks. Because in the second half of this year we’re going to continue to play some hard offense!

But does a sense of entitlement actually motivate workers?
By on July 30, 2011

The 19th Indonesian International Motor Show (IIMS) is currently taking place at the JIExpo in the capital city, Jakarta, with almost all the world’s major automakers represented at a show which is quite simply bigger, bolder and brasher than ever before. There is a real spring in the step here as this huge, underdeveloped nation of 238 million people, the fourth-most populated in the world, stands poised to unlock the potential of its auto industry and become a major player on the world stage. Indonesia is standing at a crossroads and everyone is preparing to join the party.

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By on July 17, 2011

An extravagant ceremony at Bangkok’s Impact Arena has seen the launch of Toyota’s new Hilux and Fortuner – key models in its developing market portfolio. The pair are products with big, tough reputations, and importantly, the profit-generating ability to match.

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By on July 16, 2011

When I think of the South African car industry, I’m a bit ashamed to admit that I first think of the Citi Golf, the ageless Mk.1 VW Golf that was built there from ’84 to 2009 (or possibly armored cars). Of course that’s a grossly inaccurate representation, and the Financial Times recently clued me into South Africa’s booming auto sector growth . Led by screaming exports of Ford’s Global Ranger pickup and the Mercedes C-Class, South Africa will very nearly have doubled its production numbers between 2009 and 2012. And with the government introducing yet another Motor Industry Development Programme in 2013, the plan is to build South African production capacity to 1.2m vehicles per year by 2020. And though South Africa is not immune to the currency, labor and supply chain problems that plague nearly every production location, Mercedes has already promised  to double C-Class production to 95,000 units by 2014. Sounds like a vote of confidence, and another reason to keep a closer eye on South Africa.

By on July 15, 2011

According to an infographic in the WSJ, based on research undertaken by Hyundai-Kia, the US doesn’t just buy a huge number of vehicles… we buy our cars a greater diversity of colors than any other market in the world. Sure, silver, grey, black and white still make up just over 60% of our new cars, but amazingly that’s one of the lowest percentages among large markets. By comparison, those four colors represent a whopping 885 of all new cars sold in South Korea. China and Japan buy 79% and 78& of their cars in those four colors respectively, but China is the only nation represented with a significant proportion of yellow cars sold, at 3%. Why? I’d guess it has something to do with the fact that yellow was once forbidden from buildings and garments, reserved for the Imperial family by sumptuary law (although it could be a more recent craze for “Bumblebee” edition Camaros). Meanwhile, India and US have the highest rates of (literally) green cars, at four percent, Europe has the blues, with 18% ordered in that color, and red-blooded Americans still buy the most red cars at 12%.  And with a full 9% of new cars purchased in a color not represented here, the US has the most offbeat car colors as well… a distinction that seems fitting to our individualistic, car-worshipping culture.

By on July 14, 2011

Colliers International has come out with its 2011 parking survey results for North America [PDF] and the world [PDF], and you might be surprised by what people pay on average to let their car sit somewhere. The global expensive parking crown (on a monthly basis) goes to London’s West End, which runs a cool $1,014 per month… by comparison, the US average is $155.22 per month. On a daily basis, Copenhagen takes the cake with $73.11, with the highest daily rate in the US coming to $41 per day in Midtown Manhattan. Puts things into perspective, doesn’t it?

By on July 14, 2011

When Fiat and the US government collaborated to bail out and restructure Chrysler, many hailed the news as nothing less than the rescue of the American auto industry. Though Fiat CEO Sergio Marchionne became CEO of the Auburn Hills-based automaker, he maintained much of its management corps on the strength of brief interviews, only relieving a few key members of the old guard. But the debate over whether the rapidly-aligning Fiat-Chrysler is more Fiat or Chrysler is going to be resolved “pretty quickly” according to Marchionne, as Bloomberg reports that a unified management structure is in the works.

Marchionne is working on management changes as he steps up the integration of the two companies. He plans to merge the carmakers to reduce costs and achieve a target of more than 100 billion euros ($140 billion) in combined revenue by 2014. The executive said in May that the timing of a merger hasn’t been decided yet, adding that a combination isn’t likely this year.

But just as there was furor in Italy when Marchionne suggested that the unified Fiat-Chrysler could be headquartered in Detroit, the unified management structure could be yet another source of controversy. It will, after all, be the most direct signal yet as to whether Fiat-Chrysler is an Italian firm with global operations, an Italian-American alliance or a truly global firm. For one thing, unified management should force Marchionne to commit to a single headquarters for the group, reviving a controversy he temporarily cooled by fatuously suggesting there be four Fiat-Chrysler “headquarters,” in Turin, Detroit, Brasil and “Asia.” Having masterfully finessed the PR messaging transition from “rescue of an American automaker” to “wholly owned subsidiary” thus far, a unified management could bring up a lot of unresolved issues. In short, it’s a branding challenge that makes the Chrysler-Lancia transformation look like child’s play…

By on July 5, 2011

You’ve seen them before, photos from some godforsaken place of insurgent warfare. A half dozen rag tag soldiers, if you can call them soldiers, bristling with Chinese Kalishnikov knockoffs, piled into a Toyota Hilux with a heavy machine gun or some other armament like a recoil-less rifle or ack-ack gun mounted on the roof or in the bed. The Toyota Hilux has been the choice of low level combatants around the world since the 1960s. As noted by China Car Times, when Muammar Gaddafi (is there a world leader whose names, first and last, are spelled in so many different ways?) had one of his snit fits and invaded Chad in 1987 to overturn the government, both sides used so many Hiluxes that Time magazine dubbed it the Toyota War. In the early 90s, the war in Somalia brought us the term “technical”, interestingly enough derived from the NGO practice of hiring local gunmen to protect their employees, and paying them with funds earmarked as “technical assitance grants”.

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By on June 28, 2011

According to Wards Auto, global auto sales through May hit 32.62 million units, up 6.0% from the year-ago number. But as the chart above shows, the rate of growth in global deliveries has slowed dramatically over the past year-and-a-half, falling below five percent the last several months. So what’s the problem? At this point, what isn’t the problem? The US and Japan have been hit hard by the Japanese tsunami, while the once-blistering-hot markets of China and India are shrinking and growing more slowly respectively.

Collectively, markets in the Asia/Pacific region accounted for 2.35 million vehicle deliveries, equating to 37% of world sales, the region’s lowest global market share since May 2009.

In the U.S. and Canada, sales of Japanese vehicles slipped precipitously below the rest of the market in May due to supply shortages, pulling North America’s year-over-year performance 2.3% below like-2010 on a volume basis, despite an 11.7% increase in Mexico.

So where’s the good news? After a forgettable few years, Europe is back… and South America is staying strong.

Overall deliveries in Europe rose 14.2% in May, to 1.85 million units. The resulting 29.2% share of world sales was the region’s highest take since June of last year…

Double-digit growth in many of South America’s smaller markets lifted regional sales in May 27.6%, compared with year-ago, for a 7.9% share of global deliveries – a 9-month high.

By on June 28, 2011

 

Talk about bad associations! Bloomberg reports that

General Motors Co.’s European Opel unit is introducing models with advanced options typically sold on luxury cars, seeking to revive a business that’s lost $14.5 billion since 1999.

The GM unit is working with AlixPartners LLP on how to tweak options packages or production plans to spur higher prices, said two people familiar with the matter. They are also studying ways to reduce engineering and manufacturing costs, said the people, who asked not to be identified disclosing private plans. Some new features include headlights tuned to high-speed driving on the Autobahn.

Which leads to one damning conclusion:

“They can’t price their cars like Audi or BMW,” said Thomas Stallkamp, principal of Collaborative Management LLC, a Naples, Florida-based consulting firm. Stallkamp, a former Chrysler Corp. president, was a partner at private-equity firm Ripplewood Holdings Inc. when it tried to buy Opel in 2009. “They’re like the Chrysler of Europe.”

Keep in mind, this isn’t just any old analyst… this is a guy who tried to buy Opel back when it was officially for sale. And though pricing issues in the face of rising costs are one Chrysler-like problem facing Opel, there’s another issue that may even be more troubling…

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By on June 17, 2011


Well, we’ve accidentally developed something a of a Chevy theme this morning, what with the Cobalt and 2013 Malibu… and now this, the Colorado Rally Concept, a first look at the next generation of GM compact pickups. Though the concept’s 2.8 liter turbodiesel engine is unlikely to make it to the US, Pickuptrucks.com reports

According to manufacturing documents we’ve obtained, the Colorado’s start of regular production is slated for Oct. 3, 2011, in Thailand and Jan. 16, 2012, in Brazil, where it will likely be sold as the S-10.

According to our sources, the code names for the Chevrolet Colorado and GMC Canyon versions for North America are 31XC and 31XG. Start of U.S. manufacturing is scheduled for around July 2014, though production of the current Colorado and Canyon are expected to end by 2012 at the plant in Shreveport, La.

Aimed directly at the global pickup segment defined by Toyota’s HiLux and Ford’s Global Ranger, the Colorado looks to be larger than the typical compact pickup and represents a fundamentally different strategy than Chrysler’s planned minivan-based “lifestyle pickup.” And don’t look now, but tough midsized trucks like this could be as much a replacement for current full-size buyers as gas prices and CAFE standards rise, as they could be true entry-level compacts. But then, we’ll need to see how much this global vehicle is modified for the US market before we really know what we’re getting here.

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