Just two short months after Hyundai CEO John Krafcik warned that a brewing incentive and price war was “a step backward for the industry” and “short-term thinking in a long-term process that hurts manufacturers and consumers,” it seems that any signs of a price war are over. But before you rush to give a certain earthquake/tsunami combo credit for the entire situation, consider for a moment that Ford has now joined Toyota in raising prices while insisting it has nothing to do with supply interruptions. A Ford spokesman tells the Detroit News that

This is the second price increase this year [Ed: Ford bumped prices by $130 in January] but has been in the works for months as the industry faces higher commodity costs

Meanwhile, Ford is also the only Detroit-based manufacturer to bring incentives below nine percent of its average transaction price, as its March incentives were down nearly 10 percent compared to March of 2010. Between Ford and Toyota bringing up prices and Hyundai keeping sales growth strong despite low-low incentives, the pressure is mounting on GM, Chrysler, Nissan and Honda. Will they continue to trade margins for volume, or will they take the opportunity to bump prices as Japanese parts shortages continue to play out?

The 2011 Model Year will probably not go down as one of the better lineups in the Chrysler brand’s history, consisting of only four models from three nameplates. But, according to Automotive News [sub] it will probably be one of the most exclusive and rarest years for the Chrysler Group, which includes Chrysler, Dodge, Ram and Fiat, as the 2012 model-year will go into production as soon as dealers receive the “one or two buildouts” of 2011 vehicles.

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The international auto manufacturers association OICA finally got around to publishing its 2010 production statistics by country. Officially still provisional, but don’t expect material change. Publication of the all important by manufacturer part will probably take well into summer, but you, esteemed TTAC reader, are well ahead of the game.

Before we delve into the numbers, some kudos: (Read More…)

Amidst the rubble of earthquake and tsunami-racked Japan, a strange phenomenon: Three of the smallest local automakers suffered no interruption in production, while the very largest seemed to be hit the hardest. Toyota, Honda, and Nissan have all suffered some kind of production interruption since the quake hit, while Mazda, Suzuki and Mitsubishi remain untouched according to Automotive News [sub]. In a tragedy like this, some might be tempted to ascribe this division of suffering to some universal sense of justice, a cosmic leveling of Japan’s automotive playing field. But, as the map above proves, this twist of fate is purely geographic… Mazda, Mitsubishi and Suzuki happen to have all of their plants located well south of the affected area near Sendai. Besides, Subaru, one of Japan’s smallest automakers, closed five factories. There’s no making sense of a mess like this…

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The Freep reports

General Motors plans to add a second shift worth as many as 1,000 jobs to its Detroit-Hamtramck plant late this year, as the automaker prepares to ramp up production of its Chevrolet Volt extended-range electric car.

Current plans have second-shift workers arriving for training late this year and starting production in earnest in early 2012,

Now, it makes sense that any “more assembly jobs are coming” story would play big in Detroit, but does this mean GM has its suppliers lined up for a second shift of Volt production? Can the market support the increased volumes GM has been talking about (25k instead of 10k this year, 60k+ instead of the planned 45k next year)? As it turns out, those questions haven’t actually been answered yet…

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Tesla has made much of the fact that its next model, the Model S sports sedan, will be half the price of its $110k Roadster and be built in far greater volume… but it turns out that both of these goals are going to take just a little bit longer than Tesla thought. Though the Model S will be offered at a base price of $57,400 with a 160 mile range, that version won’t be built until after the firm produces its first 1,000 units. Those first thousand models of the 5,000 unit 2012 production run will be loaded “Signature Series” models that will cost at least $77,400 (the base price for all Model S versions with 300 miles of range). According to Tesla, versions with a 230 mile range will start at around $67,400.

And with 20k units of production planned for 2013, Tesla had better not run into any delays as it won’t build its firs “production intent” (known internally as “Beta”) models until late this year. That gives the firm only about 6 months to validate the production-intent version, tool up and build the thing for its mid-2012 launch. And with a first run of expensive, loaded models planned, customers will definitely expect the kinks to have been worked out. This is going to be interesting…

Hyundai and Kia are on a tear in the European market, having recently passed Toyota to become the best-selling Asian automaker in the EU (at 605,386 units, some 50k away from Daimler’s 2010 sales). And with its first Europe-centric product coming online, aimed at the heart of Europe’s 896k unit midsize segment, it hopes to keep the growth coming. In service of that goal, Hyundai is moving European production of its iX35 (Tucson) CUV from Kia’s plant in Zilina, Slovakia, to its own factory in Nosovice, Czech Republic, and adding an extra shift according to the WSJ. And unlike many of its European competitors, Hyundai is keeping its Euro-zone production capacity on the slim side, importing the forthcoming i40 from South Korea and the i10 from India, helping to keep the Korean automaker out of the overcapacity trap that plagues its competitors. Though Hyundai has good prospects for growth in Europe, production capacity expansions are being targeted at the developing markets that show more promise for growth.

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Most foreign-based automakers see the United States as a market first and a production center second: If sales are good enough, production will follow. Mitsubishi, on the other hand, seems to be taking the opposite approach. The Japanese automaker has announced [via Automotive News [sub]] that it will replace production its weak-selling midsized offerings (Galant, Endeavor, Eclipse) at its Normal, Il factory with one model: the Outlander Sport compact crossover. The Outlander Sport (known elsewhere as RVR and ASX) is Mitsu’s newest vehicle, but the firm still envisions only abput half of Normal’s planned 50k units of production to be sold in North American markets (a safe estimate considering it’s still not outselling the Lancer). The other half will be exported to Russia, Latin America and the Middle East. That’s right, Mitsubishi is keeping its only UAW-represented workforce in order to build compact crossovers for export.

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With worrying news breaking recently about Nissan’s slow rollout of its Leaf EV, Toshiharu Sakai, a senior VP at the Japanese automaker reassures the Nikkei that

We initially planned to produce 10,000 this fiscal year, and we can meet (this target) by the end of March.

Sakai insists that the Leaf’s production has not been interrupted, and that the Oppama plant would produce 3,000 units in February before ramping up to its capacity production of about 4,000 units by March. Leaf production at Nissan’s Smyrna, TN plant will begin late next year, and will produce as many as 150k units per year (and 200k battery packs per year), while Nissan’s Sunderland, UK plant will be producing another 50k Leafs and 60k battery packs annually starting in 2013. All told, Nissan will have about 250k units of Leaf production when the Sunderland plant reaches full volume, which puts it on track to a commanding lead in global EV production… now it just needs the market to start demanding that many cars. Meanwhile, a minor issue with the Leaf’s ownership experience has raised its head and deserves a little attention.

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Production of Chevrolet’s Volt was supposed to be limited to 10k units this year, a target GM has already set its sights on surpassing. With 2012 volume projections now reaching 25k units, the next step in The General’s quest to prove that the Volt is a viable vehicle is a staggering goal: doubling its 2013 production target from 60k  to 120k units of production. According to Bloomberg, GM has not officially announced the 120k volume goal and may not build that many Volts in 2013 at all, if energy prices and supplier challenges don’t allow it. And though supplier issues could well leave the goal out of reach, even if GM is able to ramp up production to fulfill its 120k unit goal by next year, there are no signs yet that the market will support those production levels. After all, GM is essentially banking on the kind of volume-to-price niche that BMW has taken years to cultivate with its 3 Series… which starts at prices slightly below the Volt’s $41k, and still moved fewer than 110k units last year.

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If there’s a face of Toyota’s overinvestment in the United States market, it’s the company’s Blue Springs, Mississippi assembly plant. Construction on the billion-dollar plant was begun in 2007, but was halted in 2008, when plummeting demand for new automobiles forced Toyota to cut back on is US manufacturing capacity. For the past two years, Toyota’s 170 workers at the Mississippi plant have been doing their best to stay busy, but the Wall Street Journal reports that hiring has now been restarted and the plant will begin producing Corollas next fall. But will demand be high enough for Toyota to justify its eighth production plant in the US? Not everyone seems to think so…
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Bailing out the U.S. auto industry was all in the name of jobs, jobs, jobs, and the recent sales increases in new cars should have made a decent dent into the jobless rate. It just didn’t work out quite as expected. By the end of the year, J.D. Power expects that 11.8 million units will have been made in North America, up 38 percent from 8.5 million units in 2009. And where did the jobs go? They went mostly south. (Read More…)

Typically when a major automotive manufacturer is preparing to spend a billion bucks on a new manufacturing facility we’ll see multiple reports on the investment. That’s why it’s strange to see only a single report, from rediff.com, on a new manufacturing plant in Punjab province that will reportedly be built by a US automotive firm. According to the report

A United States-based automobile company may set up a car manufacturing facility in Punjab with an expected investment of $1 billion, as audit and consultation firm Deloitte has made enquiries on behalf of the firm with the state government.

“There is some American company which has made enquiries and has shown interest (for setting up a manufacturing facility) here,” Punjab Industry Minister Manoranjan Kalia said on Friday.

Asked about the name of the automobile company that has evinced interest, Kalia said that the company’s name has not been disclosed.

However when contacted, a senior official of Punjab State Industries Department revealed that Deloitte has approached Punjab government on behalf of US-based automobile company  to look at the possibility of setting up a car facility.

State industry secretary S S Channy said Deloitte has indicated an investment of $1 billion for putting up a car facility and the company requires 750 acres of land for manufacturing facility and 150 acres for ancillary units.

The automaker in question probably isn’t Chrysler, as Fiat is leading that firm’s international efforts. It probably isn’t GM either, as The General has subordinated its Indian campaign to its Chinese partner SAIC. That leaves Ford, which has recently targeted India with its Figo small car, as the most likely builder of this plant. But does Ford work with Deloitte? Are there any other hints as to who this American investor is? Over to you, Best  Brightest…

We don’t yet have understanding and expertise when it comes to mass production or even limited mass production. There is so much to learn, I don’t know quite where to start.

When the mess gets sorted out, I’d like to have a conversation with whoever’s in charge at the time — the car czar or whoever — and say “I’d like to run your plants, if you don’t mind”

Even though Fiat CEO Sergio Marchionne’s disparaging comments about its over-reliance on Italian manufacturing have opened the door for more US manufacturing opportunities, United Auto Workers boss Bob King wants to make it clear that he won’t be taking advantage of Fiat’s rift with its Italian unions. Fiat tells Automotive News [sub] that failure to secure Italian union agreement with its new manufacturing plan could send increased production to Serbia, Poland and even the United States. King’s response [via Michigan Public Radio]:

They (automakers) won’t be pitting one worker in one country against another. We’re going to be part of working with our global partners in other unions and building a global middle class – and rebuild the American middle class, really.

Yes, in the brutally competitive international labor market, there is a way for everyone to win… really.

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