Chinese MG TF Not Coming Stateside. Riots Reported.
By Edward NiedermeyerAugust 27, 2008 - 880 views
MG first introduced its mid-engine F (later TF) roadster way back in 1995, but new owners Nanjing (SAIC) are still trying to sell the damn thing. Production of 500 TFs for the British market began this month at the Longbridge plant, in a run-up to restarting regular production. And until recently the Chinese firm was planning on opening an R&D facility and factory in Ardmore, OK with an eye towards selling the outdated runabout in the US. But no longer, reports Automotive News (sub). "The U.S.A. isn't on the short-term radar as an anticipated market for us, but with the right product, it would be good to return there," says Nanjing flack Gary Hagen. Considering the TF hasn't been a competitive product for nearly a decade, yeah, it's safe to assume it might help to jump into the US market with a better best foot forward. After all, the TF's British comeback is gamble enough, despite a number of sales upsides. First, it's still nominally a British sports car, and Nanjing can rely on patriotism to move at least a few models in Old Blighty. Besides, Brits go for underpowered and out-of-date sports cars as long as they're sufficiently charming, as witnessed by the eternal availability of Fiat's Barchetta. The US offers far fewer sympathy-buy opportunities and much higher dealer and advertising costs. Whether Nanjing ever decides to build an all-new MG to make good on its North American ambitions is very much up in the air. At least they haven't already re-killed the brand stateside before even trying.
Posted in China | News Blog | UK | 4 comments 
Carmakers Fight Anti-Terrorism Import Law
By Robert FaragoAugust 20, 2008 - 947 views
You'd think "just-in-time" production techniques wouldn't extend to, say, Korea (Aveo) or China (Equinox engine). But you'd be wrong. And The National Association of Automakers view new anti-terrorism legislation– that's been six years in the making– as a threat to their business. "The U.S. Customs and Border Protection Bureau wants shippers to collect 10 new categories of data for U.S.-bound cargo 24 hours before it's loaded on ships in foreign countries," The Detroit News reports. "As well as to provide data about the physical location of cargo aboard a U.S.-bound vessel and status messages that report container movements… Automakers say the rule could upset the delicate 'just in time' shipping of parts to arrive at auto factories as they are needed for vehicle production, which saves the companies the cost of stockpiling parts… The automakers argue the rules would do little to make the country safer." And might be extended to Canada and Mexico. "Automakers argue in their letter that 'there is a better way,' saying that CBP [Customs and Border Protection] should focus 'on importers, exporters and countries that pose a risk.'" Isn't that exactly what they're trying to do?
Posted in China | News Blog | Safety | Suppliers | 35 comments
China’s Changfeng Laughs at HUMMER. Allegedly.
By Robert FaragoAugust 18, 2008 - 1,133 views
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Reuters quotes a source with "direct knowledge of the matter" (i.e. themselves) that claims Chinese SUV maker Changfeng Motor Co. took at a look at buying GM's Dead Brand Stunting and said "Hahahahaha. No." More journalistically, "Changfeng, partly owned by Mitsubishi Motors Corp decided not to proceed with the talks after a tour of Hummer's U.S. production facility, as it saw only limited potential for it to market the vehicle, the source said. 'The Hummer is way too expensive for the Chinese military and demand from civilian buyers is not big enough to justify a purchase, especially with oil prices running near an all-time high,' the source said." OK, if that doesn't sound like a made-up quote, nothing does. Despite the fact that Reuters should have filed this one under Wild Ass Rumor, it's certainly true that the HUMMER brand is a drug on the market, and it ain't Viagra. CNN reports that India's Mahindra and Mahindra is also taking a pass. After Russian "oligarch" Oleg Deripaska said "nyet."
Posted in Chapter 11 | China | News Blog | 16 comments
E85 Boondoogle of the Day: “Let Them Eat Rice”
By Edward NiedermeyerAugust 13, 2008 - 758 views
In a recent interview with the Weekly Standard, Iowa Senator Charles Grassley weighed-in on the food-for-fuel debate. "If part of our problem is that the Chinese are going to eat meat and you've got to have corn and soybeans to feed the Chinese their meat, then why isn't it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol?" Despite the growing consensus (so to speak) that ethanol is not an environmentally-friendly fuel, drives up food prices and contributes to world starvation, Grassley isn't willing to surrender the $4.5b of federal ethanol subsidies and the farm lobby support that goes with it. The Weekly Standard condemns Grassley's position. "As this 'let them eat rice' soundbite made clear, the debate over the food versus fuel issue is about as undignified as a full out real food fight at a summer camp cafeteria."
Posted in Bio-fuels | China | E85 | News Blog | Politics | 10 comments
GM CEO Rick Wagoner and Reality Announce Divorce
By Frank WilliamsAugust 12, 2008 - 2,533 views
Bob Lutz better watch out; his boss is challenging him for the title of Most Delusional Person on Earth. After the Olympic Games' opening ceremonies, Rick Wagoner told Financial Times, "I would say, from an assembly perspective [the pain] is largely behind us." And even though GM has had to cut large chunks of their workforce, is losing market share on an almost daily basis and flushed $15.5b down the toilet last quarter, he feels they're in "a pretty good position." Since the interview was in China, the discussion turned to their Chinese operations. "This has been miracle story from our perspective. For me it's the replay of the US auto industry in the 50s, 60s, 70s, but the upside potential is dramatically greater." Correct me if I'm wrong, but aren't those the decades when GM began, advanced and perfected the brand dilution and model overlap that brought them to the point they are today? And when someone pointed out that analysts expect sales growth in China to slow drastically this year, he didn't care. "That's not something we are losing sleep over." Of course, with the golden parachute he has strapped to his back, he probably doesn't loose any sleep over very much of anything. His private little world must truly be a wonderful place to live in.
Financial Times (registration req'd) »
Posted in China | Industry | News Blog | 23 comments
Chinese Auto Market Hitting the Skids?
By Robert FaragoAugust 5, 2008 - 1,158 views
For the last five years or more, GM PR has attempted to put a rosy glow on the latest sad stats from North American by saying, "Yeah, but we're kicking some serious ass in China!" From the beginning, TTAC has warned that A) the People's Republic will eventually game the market to favor 100% domestic carmakers B) GM is making the same branding mistakes in China that it's made elsewhere C) GM's Chinese growth has not kept pace with its rivals and D) what goes up, must come down. The New York Times reports that China's booming automotive market, indeed its whole economy, is entering the doldrums. "Demand is beginning to weaken for big-ticket purchases. J. D. Power and Associates just cut its forecast for car sales in China this year to 5.95 million — still up from 5.42 million last year, but much less of an increase than the company’s previous forecast of 6.2 million." And there are some interesting side-effects. "China’s slowing growth is one reason that gasoline prices have fallen in the United States, for example. Similarly, world prices for metals like copper, tin, zinc and aluminum have tumbled in the last several weeks, as voracious Chinese factories have closed, or cut back their consumption."
Posted in China | News Blog | 8 comments
China Considers Banning 90% of All Cars in Beijing for Olympics
By Robert FaragoJuly 30, 2008 - 33 views
There is no question that China's leaders want the Olympics to showcase/enhance The People's Republic's international prestige and power, in that 1936 Berlin kinda way. There's also no question that Beijing's air quality sucks, Big Style. To rectify that politically intolerable situation, The Powers That Be have relocated the city's major polluter (Oy! Beijing Shougang Group! Take your steel plant and piss off!). They've also banned half the city's 3.3m vehicles. Nope. Not good enough. Mother nature is not cooperating, with high humidity, light winds and high temps. As xinhuanet.com reports, China's ready to do whatever it takes to let Olympic athletes gulp great quantities of healthy O2. "A more radical measure would be to allow only vehicles on which had the last number of the license plate matched the last number of the day of the month, effectively banning 90 percent of privately owned cars." Eurozone ministers must be green with envy! Unfortunately… "I cannot ensure whether the government will take these measures," Professor Zhu Tong, air quality adviser to the Beijing Olympics reports, sadly. "Even if the measures are strengthened, the enforcement will last only three or four days." Oh. That's alright then.
Posted in China | Green | News Blog | 20 comments
Chinese Court Rubber Stamps Fiat Panda Clone
By Edward NiedermeyerJuly 28, 2008 - 51 views
Remember how an Italian court recently banned Great Wall's GWPeri from sale in Europe for too closely resembling Fiat's Panda? Well, the Shijiazhuang Intermediate People's Court sees things more… sympathetically. Fiat had sued Great Wall in China as well as Europe. But the legal battle has been lost on the eastern front. Reuters reports that the Chinese court dismissed patent infringement claims against Great Wall, ordering Fiat to pay $1,290 in court fees. Fiat is "evaluating its options" (read: figuring out who to bribe), posing petulantly for the press. "We acknowledge the Chinese court decision notwithstanding we point out that it goes on the opposite avenue vis-a-vis a resolution taken on July 15 by a court in Europe on the same issue," say Fiat spokesfolks. Great Wall, on the other hand, is using this as one of those "no such thing as bad publicity" opportunities, letting everyone know that it will start selling a pickup in Italy later this year. What, you thought all that cheap labor didn't have its price?
Posted in China | Crime & Punishment | Design | News Blog | 11 comments
Automakers Over-Estimate Chinese Car Market
By Edward NiedermeyerJuly 28, 2008 - 36 views
Auto Motor und Sport reports on a cautionary study by Bain & Company on the Chinese automotive market. According to the report, automakers estimate that the Chinese market will demand 9.3m new cars in 2010. Nein! "Our study shows that automakers are overestimating the Chinese market and are calling for too much production," says analyst Jörg Gnamm. "We're talking about an overestimation of 1.5m vehicles. That's half of Germany's annual sales, and the production capacity of four to five car factories." In other words, they reckon the Chinese market will grow by "only" about 12 percent per year to 7.9m units. Did Jörg mention increasing competition for those sales? Yes he did. Volume automakers like Toyota, VW and GM are the ones who will face the toughest pressures. The warning comes shortly after Renault-Nissan CEO Carlos Ghosn predicted that the Chinese market could cool off in the next few years. And it doesn't factor in any Chinese government move to favor home-grown automakers over mandatory joint-venture "foreign partners." On that score, it's only a matter of time…
Posted in China | News Blog | Sales | 7 comments
And While We’re on the Subject of Oil Subsidies…
By Robert FaragoJuly 28, 2008 - 25 views
Our previous blog post made the connection between China's increasing demand for imported oil, The People's Republic's subsidies for the black gold ($40b p.a.) and the policy's inflationary effect on U.S. gas prices. Common sense (and The New York Times) suggest that other "managed economies" are using the same pro-growth strategy, amplifying the inflationary effect on world oil prices. "The oil company BP, known for thorough statistical analysis of energy markets [excellent hat tip to Big Oil!], estimates that countries with subsidies accounted for 96 percent of the world’s increase in oil use last year — growth that has helped drive prices to record levels." Hey, what happened to "Let's all blame the evil speculators?" Anyway, you think the U.S. is "addicted to oil?" Malaysia spent 7.5 percent of its economic output on oil subsidies. Indonesia shelled-out $20b this year to keep prices down. And where there's no political will to let the free market do its thing, there's no way they'll stop. "You talk about subsidies, you’re not only talking about the economy," asserts Purnomo Yusgiantoro, Indonesia’s minister of energy and mineral resources. "You’re talking about politics.” I.e. his job. So they're damned if they do, damned if they don't. And for this you pay at the pump. [thanks to OldDavid for the link]
Posted in Big Oil | China | News Blog | Overseas | 16 comments
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