Automobile Industry 01 (Aug 08 - Sep 15)

[winston]

Toyota had their first loss in history. Maybe the Japanese would be next to support their Automobile manufactuers. The Chinese are already lobbying their government for some assistance. The Europeans should not be too far behind. LOL.. Would not surprise me to see Proton doing the same thing...

[winston]

China plans to avert US-style auto crisis: report

China's top economic planning agency is drafting a stimulus package to save the automotive sector from a US-style crisis, state media reported Thursday.

The National Development and Reform Commission is to send rescue plans to the cabinet by the end of the week, and if approved they are expected to be implemented in January, the Shanghai Securities News said, citing sources.

Measures will include cuts in the 10 percent vehicle purchase tax to boost consumption, and direct government funding to help automakers upgrade their technologies, the report said.

The Ministry of Science and Technology has also suggested steps such as facilitating mergers in the sector and encouraging banks to provide low-interest loans to automakers, the report said.

China's auto sales fell 14.6 percent in November from the same month a year earlier, according to industry association figures, as consumer confidence showed further signs of weakening amid the economic slowdown.

China cut gasoline and diesel prices by around 13 percent and 17 percent respectively last week, in what was seen as a signal aimed at boosting confidence among car buyers and manufacturers.

[kennynah]

W : what's the household brand of chinese made cars ?

[winston]

There's a lot of foreign assembled cars on the road in China eg. GM.

Donht pay much attention to the Chinese cars but Geely comes to mind..

[kennynah]

thanks W

so hence, PRC doesnt have a strong home grown car maker....

[iam802]

Treasury Drafts Broad Rules on More Auto Industry Aid

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

Dec. 31 (Bloomberg) -- The U.S. Treasury drafted broad guidelines for aid to the auto industry that would let officials provide funds to any company they deem important to making or financing cars.

............

So, apart from Delphi, which other counter can benefit from this?

[millionairemind]

White knight appears??

Fiat to Take 35% Chrysler Stake, Form Global Auto Partnership
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By Marco Bertacche and Mike Ramsey

Jan. 20 (Bloomberg) -- Fiat SpA, Italy’s largest carmaker, agreed to take a 35 percent stake in Chrysler LLC to expand in the world’s biggest auto market and give the U.S. company access to its small-car technology.

Turin, Italy-based Fiat and Cerberus Capital Management LP, Chrysler’s controlling shareholder, signed a non-binding agreement on the alliance, they said today in an e-mailed statement.

Fiat won’t make any cash payment and isn’t making a commitment for future funding of Chrysler, the statement said. The Italian company will provide platforms to produce fuel- efficient and small cars to be produced at Chrysler plants. The two manufacturers would also share their distribution networks, allowing Fiat to return to the U.S. with its main brands.

[millionairemind]

ublished January 21, 2009

Obama clean air plan gives car industry the jitters
States may enforce own greenhouse-gas emission standards

(LOS ANGELES) If the car industry thinks it has problems now, wait until Barack Obama takes the wheel.

Complying with the California guidelines would create technology burden that could add up to US$5,000 to the cost of each vehicle.

Not long after assuming the presidency, Mr Obama is expected to grant a waiver allowing more than 13 states to enforce their own greenhouse-gas emissions standards on cars.

That would completely change the landscape for vehicle regulation and obligate carmakers to produce cars that are far more efficient than those called for under current federal standards - an average of 3 miles per gallon (1.28 km/litre) more by 2015, and 7 mpg by 2020, according to some calculations.

Environmentalists and state regulators say the rules are key to combating global warming, and point to a series of court rulings backing their implementation.

'This is an essential piece of the nation's environmental strategy,' said Tim Carmichael, president of the Coalition for Clean Air. Environmentalists estimate that cars create about a quarter of US carbon emissions.

But it's a nightmare scenario for carmakers, which argue that complying with the California guidelines would create regulatory headaches and a technology burden that could add at least US$1,000 and as much as US$5,000 to the cost of each vehicle.

As such, the prospect of the waiver is creating a fierce debate about automotive regulation, pitting concerns about the environment against the deeply troubled finances of an industry that has thrown itself at the mercy of Washington just to remain solvent.

GM and other carmakers, including foreign brands like Toyota and Honda, have vigorously opposed implementation of the California rule and have fought it in court for years.

Nonetheless, their efforts have provoked judicial rulings in four different federal courts that open the door to California - along with 17 states that have also adopted the Golden State's rules - regulating its own carbon emissions under a 2002 law.

The final barrier to implementation, a waiver from the Environmental Protection Agency, was held up a year ago when the Bush administration denied the request. California then sued the EPA, a congressional investigation was launched and during the campaign, Mr Obama pledged to grant the waiver if he became president.

According to Mary Nichols, chair of California's Air Resources Board - the agency that would implement and enforce the regulation - the likelihood of getting the waiver is 'over 95 per cent.' She said that Mr Obama's transition team has 'had conversations' with her agency to coordinate how and when the waiver should be granted.

'A plan of action is already pretty much in hand,' she said.

Last week, Lisa Jackson, Mr Obama's nominee to head the EPA, addressed the emissions issue as well. 'If I am confirmed, I will immediately revisit the waiver,' she said.

Currently, the only standard that carmakers have to meet is Corporate Average Fuel Economy. Slightly more than a year ago Congress passed a law that will ramp up the national average fuel economy for cars and trucks. Final rules for implementing the new standard have not been issued - the outgoing administration threw that football to Mr Obama earlier this month - but the law calls for a fleet-wide average of 35 mpg by 2020.

That's a substantial increase from the previous standard of 27.5 mpg for cars and 22.5 mpg for trucks, but pales in comparison to the California rule.

Under it, carmakers have to show a 30 per cent overall reduction in greenhouse gas emissions on their vehicles by 2016. That's the same kind of regulation employed in Europe and Japan, where cars have strict emissions requirements but not specific mileage standards. -- LAT-WP

[winston]

20090114 Macquarie China on the wheel
Still spinning its wheels

We are bearish on the auto industry in China in 2009 and believe investors will not miss out if they avoid the sector for 1H09. Our coverage of the HK/China auto industry has been transferred to Hiu Lui Ko.

Key issues in 2009

In terms of sales volumes, passenger vehicles (PV) are less cyclical and will suffer a smaller downturn than commercial vehicles (CV), in our view.

Government policies are driving fuel efficiencies, favouring economy-sized cars and more fuel-efficient vehicles in the PV and CV segments.

Decline in the steel price benefits trucks more. We expect for every 10% steel price decline, improvement in the PV GP margin would be 1–5%, while for trucks, GP margin improvement would be 14–29%.

A JV structure is an underappreciated negative. While a JV structure has kept the Chinese PV manufacturers afloat, we believe it creates some fundamental problems that equity investors cannot ignore, in terms of valuation and operations.

Impact on the top four auto and trucking stocks

Policy bias favours economy-sized cars but neither Denway nor Dongfeng is benefiting: Policy bias towards economy-sized cars is accelerating. However, neither Denway nor Dongfeng is ideally placed for exposure. Denway’s earnings are mainly from high-end cars while we think Dongfeng’s cannibalisation problem will become more acute in the downturn.

Medium-term pain for the HDT segment but Sinotruk to outperform once dust settles: Sinotruk has the most integrated manufacturing operations in the industry and the best R&D capability. We think the company’s cost advantage will help Sinotruk navigate the downturn better than its peers. The net cash balance accounts for around half of its market cap. We suggest accumulating the stock once earnings downgrades end, likely by mid-year.

How to play the sector in 2009

While the Chinese auto stocks have de-rated, we think the cheap can get cheaper. High cash balances and stronger long-term prospects should allow Sinotruk and Denway to maintain current valuations. The weaknesses in Dongfeng and Weichai’s structures and business models are likely to be exposed by the economic slump and we think there is further downside to their valuations.

[millionairemind]

Jan 25, 2009
Auto market to shrink
Nissan chief says auto market to shrink 14 per cent

RIYADH - NISSAN chief executive Carlos Ghosn said on Sunday that the global car market could shrink almost another 14 per cent in 2009, after a nine-percent fall last year, due to the global financial crisis.

Mr Ghosn said at a Global Competitiveness Forum in Riyadh that he expected more consolidation in the automotive industry in the months ahead and that recovery would not take place before 2011.

'This is going to be a long recession,' Ghosn said. 'There is absolutely no question of the fact that you are going to see more consolidation.'

Mr Ghosn predicted world auto sales would fall to 55 million vehicles in 2009, a fall of almost 14 per cent, compared to 63 million in 2008, a year that was already nine per cent down on the 69-million figure of 2007.

The global financial crisis had slashed credit for car buyers, two-thirds of whom buy on credit. 'We are the first victim of the financial meltdown,' he said of the auto industry. -- AFP