Automobile Industry 01 (Aug 08 - Sep 15)

[kennynah]

my simple thoughts.... big fancy luxurious cars may take a hit during this period and forward many months.... but i remind myself, only here in singapore, do we actually not require a car...making it a "want" than a "need"....

we dont need to think europe nor america, just look across our causeway and we realize that when one doesnt have a car, one is trapped like a hostage in the house. my good friend, a malaysian, years ago married a singaporean girl. and for 2 years, they only had a car...the result, his singaporean wife cannot tahan....in the end, bought the cheapest malaysian made vehicle, so she can be "freed"....

in geographically large countries, people need cars to move around and have a decent life.

imo, the auto industry will never die, unless someone wise guy invents teleportation or a new breed of vehicle than renders all the current car plants to close shop....otherwise, they will survive and smart cookies like them would have by now devised some great marketing plans.....just like the british produced heir austin minis...to cater to the working class years ago during a severe economic downturn....

[winston]

China November Car Sales Drop 10% as Slump Spreads (Update2) By Li Yanping

Dec. 5 (Bloomberg) -- China’s November car sales plunged 10 percent, the biggest decline in more than three years, extending a global rout in auto demand that has caused carmakers to seek government support.

Sales dropped for the third month in four, sinking to 522,800 cars, sport-utility and multipurpose vehicles, the China Association of Automobile Manufacturers said in an e-mailed statement today. Before August, there hadn’t been a decrease for more than three years.

Dwindling sales in China, the world’s second-biggest auto market, add to the strain on automakers already wrestling with plunging demand in the U.S., Europe, Japan, Brazil and India. General Motor Corp., Ford Motor Co. and Chrysler LLC are seeking as much as $34 billion in U.S. aid to survive.

“We’re heading into the worst automotive recession since World War II, and that will also drag down growth markets, including China,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg- Essen, Germany. “The decline in China means the problems for GM will get bigger and it will force Volkswagen to react.”

GM Sales

GM, the biggest overseas automaker in China, is counting on emerging markets and a U.S. government bailout to help it weather a plunge in North American sales. The automaker aims to boost China sales to 1.2 million next year, 9.1 percent more than this year’s target, Kevin Wale, president of the carmaker’s China unit, said in a Bloomberg TV interview aired today. The tally this year may rise 6.8 percent to 1.1 million.

In the first 11 months, China’s industrywide car sales climbed 8.9 percent to 6.2 million. That compares with a 16 percent decline in the U.S. The European market slipped 5.4 percent in the first 10 months.

Emerging-market auto sales are also slumping as the effects of the global recession spreads. Brazil’s tally tumbled 25 percent in November, the most in at least six years, causing the local automakers’ association to cut its full-year forecast and warn of little growth next year. Indian car sales fell 6.6 percent in October.

Vehicle deliveries in China may fall short of a 10 million unit forecast this year, as slowing economic growth undermines consumers’ purchasing power, according to the China Association of Automobile Manufacturers. The industry’s consensus for growth next year is 5 percent to 10 percent, compared with a 22 percent gain in 2007.

Chinese automakers including Guangzhou Automobile Group Co., a Chinese partner of Toyota Motor Corp. and Honda Motor Co., have called on the government to take steps to help local manufacturers. Canada, the U.K. and Germany have also had requests for help from their national auto industries.

[winston]

It has been well established that total compensation for U.S. auto workers, including pensions and benefits, comes in around $70 per hour. That compares to $45 per hour for Japanese workers.

But some auto industry supporters have distorted the argument. They use the American workers' hourly wage without benefits – about $30 an hour – and compare that number to the $45 hourly total compensation for Japanese workers. Then they claim that U.S. auto makers are actually more labor efficient than their Japanese counterparts.

Obviously that's not comparing apples to apples. If you are looking at apples versus apples, a new auto plant in India offers hourly pay of only $19.

And it's not just line workers who are overpaid. Ford's chief executive Alan Mulally earned $22 million in total compensation last year – a year that helped push the company toward oblivion. Asked last month if he thought he deserved a pay cut, Mulally said, "I think I'm all right where I am."

Top executives at Bear Stearns, AIG, Lehman Brothers, and Merrill Lynch probably felt the same way right before their companies went under.

– NewsMax

[millionairemind]

BYD Adds Plug-In as China Gets Edge on Toyota, GM (Update2)
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By Tian Ying

Dec. 15 (Bloomberg) -- BYD Co., the Chinese automaker backed by Warren Buffett, started selling the world’s first mass-produced plug-in hybrid, gaining an edge on Toyota Motor Corp. and General Motors Corp. in electric-powered vehicles.

The F3 DM can run for 100 kilometers (62 miles) using only batteries, Shenzhen-based BYD said in a statement today. Toyota plans to begin testing plug-ins, which can be recharged from household powerpoints, late next year, it said in August. GM aims to start selling the Volt plug-in in late 2010.

BYD surged the most in two months in Hong Kong trading after saying the new model and government tax breaks for small cars would help it almost double vehicle sales next year. China is encouraging automakers to develop alternative-energy vehicles to curb oil imports and to help local companies challenge GM and Toyota, the world’s biggest hybrid-car maker, overseas.

“BYD is making progress in the right direction,” said Yale Zhang, director at CSM Asia. “Still, a lack of fast recharging facilities and other infrastructure is handicapping BYD’s efforts.”

The automaker expects to boost total sales to 350,000 cars next year from an expected 180,000 this year, founder and Chairman Wang Chuanfu told reporters in Shenzhen today.

“The development of electric-powered vehicles is the best way for the Chinese auto industry to surpass other leading countries,” Wang said at an unveiling ceremony. BYD currently sells gasoline models such as the F3, F6 and F8. It plans to add at least five new models next year.

The company, also China’s biggest maker of rechargeable batteries, rose 16 percent to HK$13.32 at the close in Hong Kong. It has fallen 1.9 percent this year compared with a 46 percent plunge for the benchmark Hang Seng Index.

Rechargeable Batteries

The F3 DM’s batteries can be fully recharged from a power point in as little as seven hours and 50 percent powered via a quick charge at a specialist station in 10 minutes, BYD said. The car also has a gasoline engine as a back-up power source.

The car costs from 149,800 yuan ($22,000), said Xia Zhibing, BYD’s sales head. That compares with Toyota’s Prius, which costs from 259,800 yuan. The high price of hybrids and the lack of charging stations have damped demand in China. The Prius, the bestselling hybrid in China, racked up 748 sales nationwide in the first ten months of the year.

Still, GM started selling a Buick LacCrosse Eco-Hybrid in July and Nissan Motor Co., Japan’s third-largest automaker, intends to begin offering electric cars in China by 2012.

China Support

The Chinese government plans to support domestic automakers’ research into alternative-energy vehicles in a bid to have 60,000 on the roads of 10 cities by 2012. BYD has signed a deal for “financial cooperation” with Export-Import Bank of China, it said without elaboration.

The government may subsidize hybrid cars to cut costs for consumers, Wang said. The State Council is also set to consider a plan to scrap a sales tax on vehicles with engines of less than 1.6 liters, he added.

“It would be a very big push for cars sales,” if the sales tax plan is approved, Wang said. The government has also altered fuel taxes and is mulling ways to encourage people to buy cars on credit to help revive vehicle sales, which have fallen for three out of the last four months.

BYD will initially target the F3 DM at government agencies and corporate customers, Wang said. The Shenzhen local government and China Construction Bank today signed deals to buy a total of 50 cars.

U.S. sales of the F3 DM will likely start in 2011, Wang said. They may begin earlier if the company can complete the necessary regulatory steps more quickly than expected, he added.

Buffett’s MidAmerican Energy Holdings Co. in September bought 9.9 percent of BYD for HK$1.8 billion ($232 million). The stake sale may help the automaker boost its profile overseas and also reassure potential customers, Wang said.

“Buffett’s investment helps us enhance our brand image,” he added. “It’s a long-term investment and it will help our growth in the long run.”

[winston]

* Chinese carmaker Dongfeng Motor Group rose 5.5 percent on hopes that China will move to protect growth in its auto industry.

China may cut its vehicle purchase tax for passenger cars to aid its slumping auto industry, focusing the cut on stimulating purchases of small cars, the official Shanghai Securities News reported on Tuesday.

Authorities are considering a proposal to cut the 10 percent tax paid by car buyers to 2 percent for engine sizes of up to 1 litre, the newspaper said. The tax would be cut by less for larger cars, and stay at 10 percent for engines above 4 litres.

The government announced it would aid the industry after Chinese passenger car sales in November fell 10 percent from a year earlier, this year's third monthly drop.

[mojo_]

A Modern Parable

A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River . Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale-boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India .

Sadly, the End.

Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US . The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses...

IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

[millionairemind]

GM, Chrysler May Get U.S. Loans to Survive to March (Update1)
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By John Hughes and Robert Schmidt

Dec. 19 (Bloomberg) -- General Motors Corp. and Chrysler LLC would get U.S. loans to stay afloat until March under a Bush administration rescue plan that may be unveiled as soon as today, people familiar with the talks said.

The government could take back the money should the automakers not comply with federal restrictions as a condition of receiving the funds, said the people, who asked not to be identified because the discussions are private. The plan isn’t final and may change, the people said.

The aid is intended to help GM, the largest U.S. automaker, and No. 3 Chrysler avoid collapse because they may run out of operating funds by early next year. GM and Chrysler have said they need $14 billion to stay in business through March and are temporarily idling plants to trim expenses.

http://www.bloomberg.com/apps/news?pid= ... refer=home

[HengHeng]

Waste money to keep it afloat so that people will have a MERRY x'mas and a happy new year instead of a sorry x'mas and a gloomy new year.

The champions of FREE TRADE and CAPITALISM is practising communism soon.. LOL

[kennynah]

when the rubber hits the tarmac.... capitalists cannot succumb to the lure of communal hot pots...hahahaha...

this is an example of the wisdom of not being too extreme in our ideology....

[iam802]

Canada Lends GM, Chrysler $3.3 Billion, Does Not Rule Out More

http://www.bloomberg.com/apps/news?pid= ... refer=home