While America Slept. Saturday, December 27, 2008

A short overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. For the next two weeks, WAS will be filed from Tokyo.

Japanese car sales down 30 percent: Japan is looking at “the worst December on record for auto sales,” the Nikkei (sub) writes. Only 161K autos (excluding minicars) were registered by Thursday evening. Unless a miracle happened on Friday, Japanese “sales of new cars are on track to drop almost 30 percent in December,” says the Nikkei. Sales dropped 5 percent in September, 13 percent in October, and 27 percent in November. For all of 2008, Japanese auto sales are expected to come in 7 percent lower. That would be the fifth consecutive yearly decline of the Japanese domestic auto market.

Fuji Heavy and Toyota getting cozier. Fuji Heavy, manufacturer of the Subaru, plans to join up with Toyota in the development of electric vehicles, Fuji Heavy President Ikuo Mori told The Nikkei (sub.) Fuji Heavy’s prototype electric vehicle is powered by a lithium ion battery from an alliance of Nissan Motor and NEC. They want to broaden their base of battery suppliers, and the partnership between Toyota and Panasonic would be among possible choices. Toyota holds a 16.5 percent stake in Fuji Heavy.

Korean/Chinese stand-off: And the SAIC/Ssangyong saga continues. China’s SAIC owns 51 percent of South Korea’s Ssangyong. The plant has been sitting idle for three weeks, workers were not paid. SAIC said. No money until the unions get reigned in. Ssangyong went begging to their government. The Nikkei (sub) writes: “The South Korean government Friday said it would not aid Ssangyong, unless SAIC put in more capital first.” The soap opera wouldn’t have garnered attention, had it not, as the Nikkei reports, “emerged as a test both of how far Seoul will go to protect large manufacturers hit by the global downturn and of how willing Chinese companies that bulked up on overseas acquisitions will be to defend their assets through the global economic downturn.”

China to give cash for clunkers: The Chinese mass motorization has just begun, and it’s not like there are a lot of old clunkers on Chinese roads. However, China’s government wants to get rid of the few that still are. China plans to offer incentives for car owners to scrap their old models in favor of new ones, in a bid to lift the auto industry, writes Gasgoo. “Details of the plan will be announced very soon,” said an unnamed official with the Commerce Ministry.

Chinese are steeling themselves for higher taxes on fuel. China has unveiled the draft plan to raise the fuel to approximately 15 cent a gallon. Some university professors don’t like that at all. They wrote a letter to Chinese Premier Wen Jiabao and said that at tax between $1.70 and $2.20 per gallon would just be the ticket. China is the world’s third-largest oil importer and the second-largest consumer. Until now, taxes on (Government regulated) fuel prices were very moderate.

GM sues bankrupt parts supplier: GM is suing their bankrupt automotive supplier Cadence Innovation for immediate access to specialized parts and equipment, arguing that a delay would hamper the launch of the new Chevrolet Camaro, disrupt GM’s assembly operations and cause millions of dollars in damages, the Detroit News reports. In a filing with the U.S. Bankruptcy Court in Delaware, GM accuses Cadence of “holding hostage” the parts and tooling equipment the automaker needs, and said Cadence was breaching the terms of an agreement signed with the automaker in August. The suit was filed Christmas Eve.

Too much vodka in Vladivostok: Russia’s auto industry is slowly coughing back into life, with the help of eager joint venture partners, such as Ford, GM, VW et al. Nevertheless, fewer than 50 percent of all new cars sold in Russia this year were produced in Russia, according to a report published this week by PricewaterhouseCoopers. Russia tries to stem imports by raising import taxes, which led so social unrest. “Mr. Putin, why do you get driven about in a Mercedes?” read a banner at a Russian rally. All of this seems to have been lost on the Vladivostok Times. The Russian reporters reckon: “Russia can be a strong competitor importing cars into Chinese market.” Must be a case of too much vodka in freezing Vladivostok. Actually, the Chinese have opposite plans: The see their northern neighbor as a ripe target. January-October 2008, 33,338 Chinese vehicles were sold in Russia. Many Chinese automakers are thinking or are in the process of setting up shop in Russia, despite Russia’s attempt of making it expensive. Joint ventures are getting increasingly edgy about heavy handed Russian measures, such a slapping unreasonably high import duties on car bodies for instance.

Stoj! Tomare! Stop. Japanese carmaker Suzuki has postponed construction of a new factory near St. Petersburg, Novosti press writes. The plant was scheduled to be built and put into operation in the second half of 2009. Suzuki is the second Japanese carmaker to halt investment in Russia during the crisis. In mid-December, Isuzu announced it was halting a project to produce heavy trucks with a Russian company due to low demand. Since August the ruble has lost 23 percent of its value.