While America Slept. Friday, February 27th, 2009
An 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. Note: This week-end, BS will change his location to Berlin for a few weeks. WAS will be filed as time allows—or not, as RF fancies to say.
Daimler may buy Opel plant: Opel has contacted Daimler over plans to sell its Corsa-building Eisenach plant. The Financial Times Deutschland [via Reuters] bases its story on “government sources,” who also claim that Opel’s Astra and Zafira-producing Bochum plant is on the chopping block. Daimler management board member, Thomas Weber, said a takeover of Opel is not on the cards. “That also goes for Volvo or Saab,” Weber told Reuters. Meanwhile, Opel’s management is about to present their supervisory board with a restructuring plan. It’s expected to call for thousands of job cost and closure of one or more plants. Opel dealers have signaled a willingness to help secure their livelihoods by taking some form of equity stake in an independent company—an automaker without the excess workers and capacity, presumably.
And here comes the trade war: France’s President Nicolas Sarkozy wants the World Trade Organization to consider the legality of American aid to its domestic automakers. “We need to see if the U.S. aid is compatible with the WTO,” Sarkozy said in eastern France at a roundtable discussion on the car industry on Thursday, reported by Automotive News [sub]. [NB: This is the same Nicolas Sarkozy who recently announced protectionist aid for French automakers and called for a coordinated European plan to help the E.U.’s car industry.] EU competition authorities are scrutinizing car industry support from governments in France, Spain, Britain, Italy, Germany and Sweden. Separately, European Transport Commissioner, Antonio Tajani, said Europe’s lawmakers would consider appealing to the WTO if US aid made conditions unfair for European manufacturers.
No-show Nissan: Nissan will skip some major international auto shows in its new business year starting on April 1 to save cash, Automotive News [sub] reports. Nissan will be absent from the Detroit auto show next January, and skip the IAA in Frankfurt this September. Nissan said it will attend the New York, Shanghai, Tokyo and Geneva auto shows.
Japan hands out cash to buyers of cars, homes: In a desperate bid to keep their economies from deteriorating further, several Japanese municipalities started to offer subsidies to buyers of cars and homes, the Nikkei [sub] writes.
Akita Prefecture began offering subsidies for car purchases in January. People who replace their old cars that were registered in or before December 2001 with low-emission models are eligible for refunds equivalent to the amount they pay as consumption tax. The Tokyo Metropolitan Government will offer five-year exemptions from auto-related taxes to people who purchase electric cars and other next-generation vehicles. Kanagawa Prefecture will begin providing subsidies of possibly up to 700,000 yen to people buying electric vehicles. Saitama Prefecture will from April provide subsidies of up to 200,000 yen a year for five years to new homebuyers who meet certain criteria.
Nipponese hybrid bimmer: BMW will start selling the hybrid version of their 7-Series Japan, starting summer of 2010, the Nikkei [sub] reports. Despite promises of a two-mode hybrid X5 (the GM – DaimlerChrysler – BMW disaster), this will be BMW’s first hybrid offering. Daimler AG said earlier it will release the hybrid version of its Mercedes-Benz S-Class sedans in Japan this year.
Bidders for Volvo: Chinese car makers Dongfeng and Changan, as well as “a European constellation” may bid for Ford’s Volvo unit in April, Swedish business daily Dagens Industri reports via Reuters. “Indicative bids are to be expected around the Easter weekend,” the paper quoted a source as saying. Sweetening the pot; the European Investment Bank (EIB) is expected to grant Volvo a 5-billion-Swedish-crown ($568 million) loan in the near future.
Chinese numerology: China had 19.47 million private cars on its roads by the end of 2008, up 28 percent from a year earlier, according to official statistics released by National Bureau of Statistics of China. The total number of motor vehicles for civilian use reached 64.67m, which includes 14.92m tri-wheel motor vehicles and low-speed trucks, Gasgoo writes. China has many years to go and drive before it reaches anything close to saturation. At the end of 2008, the total number of Chinese population reached 1.3b, officially.
Car leasing coming to China: Mercedes Benz Auto Finance (MBAC) will become the first finance company to offer vehicle leasing on the Chinese market, after receiving the approval of the Chinese Banking Regulatory Commission. Starting in March, MBAC plans to begin its work by focusing on corporate fleet leasing to companies in Beijing, Gasgoo writes.
Leasing, in fact the whole concept of residual value, was alien to the Chinese market. This is about to change: 80 foreign-funded and 37 domestic-funded financial leasing companies received approval from the Chinese Ministry of Commerce as part of the governments stimulus package to boost new car sales.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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As kaleun says, the fisrt thing that has to happen at Opel is that they get their patents back which GM has taken a couple of years ago. Without those, an independent Opel would be DOA. If they manage to resolve that problem, an Opel/Daimler solution would indeed make sense...if the car market ever gets back to what was called "normal" until shortly. At this point, I suppose Daimler doesn't want to burn its fingers with Opel after the Chrysler disaster. Anyway, the only scenario that I could think of would be the following: 1) Opel gets it's patents back, possibly in exchange for the $2 billion that GM still owes them and which it won't be able to pay back anyway. 2) The German government, the German federal states and possibly other European governments like Spain and Britain will have to buy the majority of Opel and infuse it with cash. 3) A third Automaker (possibly Daimler or PSA) buys a minority share...let's say 30%. In that case, the risk for Daimler (or anyone else) would be much lower. If the economy get's going again, they can still decide if they want to fully take over Opel (since no government wants to be involved indefinitely anyway), or if Opel should die.
Daimler has purchased other car companies before. It didn't work then. It won't work now.