China to Harmonize Safety Regs with EU (US, Not So Much)
By Bertel SchmittNovember 13, 2008 -
A few days ago, we told you that the Chinese government will enact “nine measures” to prop up the ailing auto export sector. In the meantime we got our hands on the nine measures. Turns out (some may say, in typical Chinese fashion) that it’s only eight. 8 is a lucky number in China. Some of the measures are fluff, such as government support for car and parts shows, help for ailing shipping companies, advertising support (oddly, targeted at “Russia, Ukraine, South Africa, Vietnam, and Iran,”) and a ban on exporting used Chinese cars. Here are the biggies:
Posted in China | News Blog | 12 comments 
Benz And Beemer Start Food Co-op For Chinese Parts
By Bertel SchmittNovember 13, 2008 -
As reported here, Daimler AG plans to increase its sourcing of automotive components from China nearly eight-fold within four years. The luxury car maker will buy $3.25b worth of car components per year in China. Now, BMW is itching to get in on the act. Not that BMW is new to buying parts in China, they have done that for years, mostly unbeknown to their well-heeled customers. BMW and Daimler are in talks to create a huge buying co-op. They want to create critical mass, and drop the bomb on their Chinese suppliers, the German Handelsblatt reports. By concentrating their buying power, Beemer and Benz intend to save €350m per year, in discounts alone. To assuage their American clientele, they say that they will also extend the stingy hand of their allied purchasing departments to parts suppliers in the U.S.A. However, with the dollar high and U.S. parts manufactures dead, or on the brink of extinction, the BMW/Mercedes buying axis is squarely targeted at China. The “deeper discounts” news from Deutschland already has Chinese parts makers atwitter and alarmed. Here is why ….
Posted in China | News Blog | 11 comments
The Year That Got Away: China’s Auto Makers Way Off Target
By Bertel SchmittNovember 12, 2008 -
With the end of the (Western) year in sight, Chinese auto makers look in their books, roll their eyes, and sigh. One by one they come to the same conclusion: this year’s targets are toast. Bu hao, no good. According to a tally by Gasgoo, five Chinese auto makers have officially written off their old targets and revised them way down: Changan Mazda (-50 percent); Dongfeng Yueda Kia (-20 percent); Dongfeng Peugeot (-31 percent); Dongfeng Citroen (-27percent); FAW-VW’s Magotan (-22 percent). This doesn’t mean that their year-on-year sales will be down by that much. They probably started the year with optimistic growth rates. Which are now coming home to rust. Other companies don’t want to throw in the towel yet, or they say it’s too early to call. But ending October, most of China’s big auto makers were way off course.
Posted in China | News Blog | 9 comments
Chinese Government: Our Car Exports Suck
By Bertel SchmittNovember 11, 2008 -
The auto industry and auto exports have top billing in China’s current 5 Year Plan. (Yes, for sentimental reasons, they still have one of those.) Yet when it comes to the car export part, China is still light-years away from fulfilling their master plan. The Vice Director General of the Department of Mechanic, Electronic and Hi-Tech Industry, Ministry of Commerce, made the startling admission. “China’s auto exports are still in the early stage, leaving a large gap in global exports,” Zhou Shijie told Xinhua. Translation: China’s auto exports are in the doghouse of the export powerhouse. “It is difficult for export companies to master the vehicle entry policy in foreign countries.” Translation: Our cars failed miserably in crash tests, we have trouble with pesky U.S. FMVSS and European ECE regulations, which we can barely comprehend (let alone satisfy). We’re fed up and we’re not gonna take it. No, we’re not gonna take it. Uh-oh.
Posted in China | News Blog | Safety | Sales | 5 comments
GM Buying Into Chinese Venture… But With What?
By Edward NiedermeyerNovember 10, 2008 -
Dig through the dire news about GM floating around this morning’s autoblogosphere, and you just might notice a story that doesn’t quite jive with all the doom and gloom. Bloomberg reports that GM is “in talks with a local partners” to increase its 34 percent stake in GM-SAIC-Wuling, a Chinese light-truck and van maker. As our man in Beijing reports, China is aggressively stimulating its car market (which has bottomed out, by Chinese standards, at 11 percent growth) and GM wants in on the action. Of course there are just a few issues with the move– beyond the fact that GM has no cash with which to make such a deal. SAIC currently owns 50.1 percent of the consortium, and its Chairman Hu Maoyuan tells Bloomberg that it won’t be giving up its majority. “GM and our partner in Guangxi (Wuling) are still discussing how to settle the share transfer,” says Hu. So GM wants to spend cash it doesn’t have to increase a non-majority stake in an overseas joint venture. Non-starter, right? Not according to Ricon Xia, an analyst with Daiwa Associate Holdings…
Posted in China | News Blog | Overseas | 15 comments
Shock! Horror! Chinese Auto Sales Slow to 11%
By Bertel SchmittNovember 10, 2008 -
China’s closely-watched auto sales stats are in. During the first month after the start of the worldwide auto industry meltdown, the first month after China awoke from the self-inflicted paralysis (a.k.a. the Olympics), sales are growing, but slowing. Compared to last year, China’s vehicle output and sales both grew 11 percent from January through October. October sales accounted for 715,700 units, up 3.37 percent year-on-year. Other countries would party after having received these numbers. In China, they come as a shock. According to China Associations of Automobile Manufacturers (CAAM) [via Gasgoo], China produced 8.02 million motor vehicles– and sold 7.94 million from January to October. Oops.
Posted in China | News Blog | Sales | no comments
11% Rise in Chinese Car Sales Triggers Government Bailout
By Bertel SchmittNovember 10, 2008 -
According to the officious, English-language China Daily, “Chinese automakers are facing their toughest challenge in three years as demand is falling and profitability is plunging amid rising costs.” And that’s because “China’s car sales rose 11 percent in the first nine months, compared with a 22 percent increase for the whole of last year.” So, even before the U.S. of A. can open the federal bra on behalf of Detroit’s automakers, the Chinese government has swung into action. “China’s government is discussing policies to help automakers boost sales and fend off the global financial crisis.” Policies being considered in Beijing include… “Consumption-tax breaks” - The PRC plans to give the little guy a break and money in his hand, instead of giving billions to three (or maybe just two) big guys. “Subsidies to automakers that develop vehicles powered by alternative energies” - that has a familiar ring to it. Because alternative energies are still mostly a gleam in the eye of a few believers, the real plan consists a hefty tax break with a green top coat finish. Chinese consumption tax (nothing to do with TB) can be as low as one percent for a (non-)car with a displacement of less than a liter, and as high as 40 percent for a bigger-bore vehicle of more than four liters. China Daily’s source is Chen Jianguo, himself “deputy head of the industrial coordination department of the National Development and Reform Commission.” If China Daily quotes a guy with a title that long, you can consider the plan as good as done.
Posted in China | News Blog | 12 comments
Ford Taiwan: Emigrants Cause Car Malaise
By Bertel SchmittNovember 6, 2008 -
Memo to Ford: recall your Taiwanese head honcho and put him in charge of Detroit’s pimp-machine. Jeffery Nemeth, Prez. Of Ford Taiwan, a.k.a. Lio Ho Motor Co., found an ingenious rationale for sagging sales: too many people are leaving the country. The Taipei Times reports that Nemetz is pissed that 1.3m Taiwanese have moved to mainland China; it’s getting worse, it’s bad for auto sales, and it’s gotta stop. His warnings come on the heels of the latest government statistics that counted a paltry 17,324 units being sold last month- - the crappiest October level in 20 years. If this trend continues, two million Taiwanese move to China next year, it could cost Taiwan 150k units, Nemetz predicted. Judging from October’s insipid new car sales rates, fleeing Taiwanese could wipe out the island’s entire car market. Of course, it’s pure coincidence that there are rumors of yet another prospective emigrant: Ford itself. Nemetz immediately denied that his company would forego Formosa. “Ford does not plan to leave or end our operations in Taiwan.” Likewise not true: industry-protective measures of Taiwan’s government might cancel all citizens’ passports to prevent an extenuation of the exodus. Dear DHS: Please, don’t get any ideas, ok?
Posted in China | News Blog | Overseas | Sales | 7 comments
WSJ: China Won’t Save U.S. Automakers. Duh!
By Bertel SchmittNovember 5, 2008 -
Ever since it lost its new hotness, TTAC has been reporting that the Chinese car market has lost its new hotness. TTAC also gave its readers a heads-up that China won’t save U.S. carmakers’ butts, as the Middle Kingdom had done in the past, when skyrocketing sales in China buttressed anorexic auto sales elsewhere on the planet (i.e. North America). Yesterday, that bit of news finally reached The Wall Street Journal [sub]. “China’s Car Market Loses Luster for Foreign Firms,” alliterates the WSJ, surprising everybody except TTAC’s B&B. “Growth in China’s once-roaring auto market has slowed to a near-crawl, casting doubt on the country’s status as industry savior,” writes Patricia Jiayi Ho. Previously, Patricia penned articles titled “Ex-Tuskeege Airman Moore dies at age 82,” or “Badminton club to open in Arcadia,” so she’s clearly qualified to report on expiring markets, and the back-and-forth of the world economy. Patricia’s prose continues: “Foreign giants like General Motors and Ford Motor Co. have increasingly been looking to emerging markets like China and India to provide a much needed fillip to declining sales at home.” And look they did…
The Wall Street Journal [sub] »
Posted in China | High Finance | News Blog | no comments
Chinese Cabbies Riot over Fuel, Tickets
By Bertel SchmittNovember 4, 2008 -
Things must be really, really, really bad if someone goes on strike in China. But striking cabbies striking policemen? Unheard of. Speaking of which: Ever heard of China’s largest municipality? It’s Chongqing, population 31,442,300 (as of 2005, Buddha knows how many today). Yesterday, in Chongqing, the doomsday scenario unfolded. Hundreds of perturbed taxi drivers took to the streets (on foot) and smashed vehicles to protest “shortages of fuel and high fines for traffic violations,” as the official Xinhua News Agency has it. The enraged cabbies gathered on a business street, destroyed 20 vehicles, including three police cars. Scab cab drivers who refused to join the protest were pulled out of their cars, along with the petrified passengers. A spokesman for the Chongqing police bureau confirmed the violence, and said the situation was now “under control.” 800 cab drivers returned to work by Monday afternoon. Downtown Chongqing has 9000 taxis. American car drivers: Don’t try this at home.
Posted in China | Crime & Punishment | News Blog | 7 comments
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