Automobile Industry 01 (Aug 08 - Sep 15)

[winston]

It's Good to Know: Changing the Car Radio With Your Eyeballs

Electronics giant Toshiba is developing technology that will allow drivers to change radio stations, turn up the AC, and more with simple head and eye movements.

The system, which includes a dash-mounted camera, will even recognize when they are dozing off or take their eyes off the road and then kick in safety features (like an alarm to wake them up).

(Source: Wired)

[winston]

Are u surprized ?

China may reject GM deal

In a potential blow for Louisiana, the Chinese government is likely to reject a bid by one of that nation’s industries to buy the Hummer unit of General Motors Corp., according to a report by China National Radio.

http://www.2theadvocate.com/news/business/49282607.html

[kennynah]

26Jun09 20:36 EST

Next week Lear Corp. (LEA) may file for Chapter 11 bankruptcy protection as the second largest auto seat maker in the world struggles with the auto industry downturn, reports the Wall Street Journal . The company has unsuccessfully been trying to negotiate an out-of-court deal with its lenders.

[Reference Link]:[http://online.wsj.com/article/SB124595993731955785.html#mod=todays_us_marketplace]

[winston]

China car boom could last a few years - analysts

HONG KONG, July 8 (Reuters) - China is at the start of another boom in car sales that is being propelled by rising incomes in third-tier cities and could continue for a few years, JP Morgan said on Wednesday.

A 21 percent surge in car sales this year has caught Chinese car makers, which had curbed production on expectations the country's sharp economic slowdown late last year would depress demand for big-ticket items, off guard.

Frank Gong, JP Morgan managing director and China economist, attributes the boom to a surge in the number of people in third-tier cities like Xian and Chengdu who now earn more than $5,000-$6,000, the minimum needed to buy and maintain a car.

"The strongest growth in car sales now is in third-tier cities and low-end cars," Gong told a press briefing in Hong Kong. "We believe this is the start of a third auto boom in China."

Car sales have been supported by Beijing's economic stimulus measures, which included halving purchase tax on small vehicles to 5 percent from January and incentives for rural residents to replace old vehicles.

Car ownership is just 2.9 percent of the population -- one of the lowest rates in the world -- says Credit Suisse, which expects ownership to surge fivefold in the next decade to reach 148 cars per 1,000 residents by 2020.

The rebound in car sales, which has accelerated in the past few months with sales surging 47 percent in May from a year earlier, is prompting car makers in China to ramp up production again as they also put in place long-term expansion plans.

State-owned carmaker Beijing Automotive (BAIC) is vying with Canadian rival Magna (MGa.TO) to bid for General Motors' (GMGMQ.PK) Opel unit, aiming to use the Opel brand and technology to tap China's growth potential, documents show [ID:nL7725432].

Italy's Fiat (FIA.MI) meanwhile announced plans this week to start car and vehicle production in China with local partner Guangzhou Automobile Industry Group.

Credit Suisse estimates that 40 percent of urban households in China can afford a medium-priced car if auto financing is available, and 90 percent of rural households can afford the cheapest cars on the market.

It forecasts 20 percent growth in car sales throughout 2009 and 15 percent growth next year. As strong car sales are key to buoying the domestic economy, the investment bank expects the government would introduce more stimulus measures to boost demand if sales cool.

[winston]

June auto sales in China came roaring back from a year earlier, rising 47.7% thanks to government stimulus measures, Reuters reported, citing the China Association of Automobile Manufacturers.

A total of 872,900 cars were sold, compared to the 588,400 in June 2008 and the 829,100 sold in May. China is the strongest market for beleaguered U.S. automaker General Motors Corp. (OTC: GMGMQ), which saw its vehicle sales rise 38% in the first half.

[millionairemind]

July 16, 2009
Ford gaining market share

DETROIT - FORD Motor Co is expected to gain US market share in the next few years and rivals General Motors Co and Chrysler may see sharp declines, a Merrill Lynch report released on Wednesday has found.

The annual 'Car Wars' study from Merrill Lynch found that Ford's market share could surpass GM and based on the share gains Ford could post better than break-even earnings per share in 2010 and possibly US$1 (S$1.46) per share for the year in 2011.

Ford's US market share could rise 3 percentage points over the next four years to about 18 per cent, while a realistic GM market share would be closer to 15 per cent or 16 per cent, the study found.

Ford, whose shares rose 3.6 per cent on Wednesday, is the only US automaker not to go through bankruptcy. GM emerged last week as a much smaller automaker and Chrysler was acquired by a group led by Italy's Fiat SpA in June.

GM aims to focus on its Chevrolet, Cadillac, Buick and GMC brands, trimming several other brands from its lineup.

'We continue to believe Ford is effectively executing on its restructuring plan, while bolstering liquidity, and view the results of our Car Wars study as further evidence that management is making all of the right moves,' Merrill Lynch analyst John Murphy said in a separate note to clients on Wednesday.

Merrill Lynch, which raised its price objective on Ford stock to US$8.75 from US$7.50, gave a much less rosy outlook for GM and Chrysler in the study, predicting a 5 percentage point drop in GM market share over four years and a 6 percentage point drop at Chrysler that would leave it half its current size.

With US annual industry auto sales at about 14 million units, far higher than the 10 million sales expected in 2009, GM's market share losses would equate to 500,000 vehicles or about two fewer assembly plants, the study found.

'Chrysler's product pipeline is dubious and likely to drive significant market share losses,' the study said. Chrysler plans to introduce Fiat-designed small cars into the US market starting in about 18 months.

Merrill Lynch also said it sees Korean automakers Hyundai Motor Co and Kia Motors gaining significant market share, about 3.5 percentage points, over the next four years, and Honda Motor Co Ltd gaining 3 percentage points. -- REUTERS

[winston]

10 Things We Should Not Tell You!

As bad as we sleazy car salesman do not want to give up our secrets, we found this article and thought it would really be very helpful for you guys out there searching and looking to purchase a new or used vehicle, so here you go.

http://www.carsetc.info/2009/07/09/knox ... rs-carmax/

[winston]

Rev up

Timothy Ting-Kong Kwai
Monday, July 27, 2009

Last year was tough for global car manufacturers because of high oil prices and the economic turmoil. The road was still patchy for the auto sector in the first half of this year but there is light at the end of the tunnel in the mainland market.

Vehicle sales in China reached an all- time high last month as government incentives helped fuel demand. The China Association of Automobile Manufacturers said sales in June surged to 1.4 million units.

A number of incentives boosted the car sector. These included a tax cut for cars with an engine capacity of less than 1.6 liters and a rebate of up to 6,000 yuan (HK$6,806) for buying certain commercial vehicles.

Beijing is subsidizing farmers who buy environmentally friendly commercial vehicles.

Auto companies listed in Hong Kong have different niches. For example, Dongfeng (0489), through its joint ventures with Peugeot, Nissan and Honda focuses on sedans while Great Wall Motor (2333) has been moving into special utility vehicles and pick- up cars. Pick-ups are very popular in the countryside because of energy- efficiency and cost.

Geely Auto (0175) also produces such vehicles which sell from 80,000 yuan to 100,000 yuan. Great Wall's pick-ups sell for 55,000 yuan each.

Great Wall is the top brand in terms of sales volume and it has a 35 percent share of the pick-up market. Geely Auto has cornered 17 percent of the market.

The low-cost pick-up has become an income driver for Great Wall, which will benefit greatly as farmers buy the vehicles in the wake of Beijing's incentive policy.

The new rural subsidies were announced in early June. Farmers purchasing a new light truck or a minivan can get a subsidy equivalent to 10 percent of the price, up to a maximum of 5,000 yuan.

I am not sure if Geely's pick-ups will be able to make further inroads in the market but one certainty is that Great Wall has successfully built a strong sales network with more than 1,000 outlets covering both urban and rural areas.

Comparatively speaking, Geely's pick-ups were developed recently and its sales network has just begun to develop. So I believe that Great Wall will be among the main beneficiaries of the recent auto incentives.

On the other hand, Geely has grabbed the opportunity in the midst of the financial crisis to acquire a great deal of steel to make vehicles.

It has been able to grant discounts to compete with other auto giants because of its storage of low-cost steel.

As for commercial vehicles, Geely produced 100p light trucks of Euro III emission standards in April at 86,000 yuan, which is 25 percent lower than the earlier Euro II emission light truck.

The competitive price proved to be effective as monthly sales rose 32 percent in April to 3,593 units, and 15 percent to 12,475 units in the first four months of this year.

This type of light truck used to be priced at over 100,000 yuan. Qingling (1122) sold 18,146 light trucks, a decrease of 10.5 percent year on year.

Sales revenue of light trucks recorded a 7.6 percent year on year drop.

With a price war on, I believe that other core market players like Dongfeng will begin to follow the price pattern.

Consumers will, of course, benefit from the discounts but I am sure that manufacturers' net profit margin will be squeezed to a new low.

I trust that keen competition in commercial vehicles is a major risk for investors buying auto stocks.

Apart from producing commercial cars, Dongfeng also successfully launched a wide range of new models in 2008 and 2009.

Last year, Dongfeng's revenue rose 19 percent year on year to 70.56 billion yuan. Its reported net profit increased slightly by 7.2 percent to 4.04 billion yuan.

Dongfeng's Nissan brand has grabbed a 5 percent share of the passenger car market and it is among the top five in terms of car sales in China.

It means that Dongfeng has consolidated its existing brand in the auto market but diversification of models can drive growth.

Dongfeng's Peugeot and Honda models, which will be launched in 2010, are expected to help the mainland firm grow.

If you prefer to buy a stock in this sector, I would think Dongfeng is a primary choice. With a price-earnings ratio of 15 times, I think it is still a good and stable pick.

If you put your faith in rural growth, then I trust that Great Wall will be your choice. With a price-earnings ratio of 14 times, I consider it slightly undervalued.

Timothy Kwai is an investment strategist at Quam Securities. E-mail: [email protected]

[millionairemind]

Some things never change...

August 6, 2009, 6.59 pm (Singapore time)

US car buyers 'still want gas guzzlers'

ZURICH - General Motors Vice-Chairman Bob Lutz said in a newspaper interview published on Thursday that US consumers still wanted to buy big 'gas-guzzler' cars and suggested that GM had to respond to that demand.

Mr Lutz told the Swiss newspaper Tages-Anzeiger that the ailing US auto giant had decided this week to ramp up production of big pick-up trucks and sports utility vehicles in the United States because stocks had nearly run bare.

'It remains a fact that the American public buys big, high consumption, cars,' he said.

'It is completely wrong to hope that Americans will massively rush to economical vehicles.

'The mass movement towards 'green cars' is only taking place in the media,' he added, pointing to 'poor' sales of hybrid vehicles, other than the one offered by Japanese rival Toyota, and their small share of market.

GM's challenge was to 'meet the tougher emissions standards by 2015 and deliver the whole range of cars that the public wants', Mr Lutz cautioned.

Much of the recovery plan for the US auto industry and government support for cash-strapped GM is based on a shift towards more environmentally-friendly and fuel-efficient vehicles.

The Obama administration has set up tougher new fuel consumption targets, while a government-funded 'Cash for Clunkers' programme that pays consumers up to US$4,500 to trade in a petrol-guzzler for a more fuel efficient vehicle has spurred sales.

But an attempt to renew the trade-in scheme has hit resistance in the senate, prompting an effort to push through the additional funding needed to keep it going before legislators break for their summer holidays on Friday.

Mr Lutz said GM had worked closely with the Obama administration in setting up the fuel efficiency targets.

But buyers would change only if there was a durable rise in petrol prices, he underlined.

'The government faces a dilemma. It wants on the one hand to bring pump prices closer to European levels and therefore introduce more economical cars.'

'On the other hand the economy is so fragile that a renewed sudden surge in petrol prices would have a devastating impact,' he added. -- AFP

[winston]

Who's gonna be paying for the US$3b ? The guy who did not exchange his car is the one who's losing out here ..

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"Cash for Clunkers" generated nearly 700,000 new-car sales and ended under its $3 billion budget, the Transportation Department said Wednesday.

Releasing final data, the government said dealers submitted 690,114 vouchers totaling $2.88 billion. New-car sales through the program ended late Monday and dealers were allowed to submit paperwork to the government until late Tuesday.

Japanese auto makers Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. Ltd. accounted for 41% of the new vehicle sales, outpacing Detroit auto makers General Motors Co., Ford Motor Co. and Chrysler LLC, which had nearly 39%. Toyota led the industry with 19.4% of new sales, followed by GM with 17.6% and Ford with 14.4%.


– Wall Street Journal