Memo to Detroit: Gas Prices Could Go Up!
By Robert FaragoAugust 19, 2008 -
GM CEO Rick Wagoner and his Motown pals maintain that "nobody could have predicted" the recent surge in gas prices. You know, the price hike that's driven a stake through the heart of their high profit light truck biz. Never mind the fact that TTAC and others were bemoaning The General's re-investment in their GMT900 trucks back in '03. Well, guys, here's an article in The New York Times that says that nationalization of oil resources around the globe could lead to a drop in supply. (Maybe we should drill nearer to home? Nah.) OK, it's kind of funny (ironic) that the Gray Lady's piece paints Big Oil as the good guy. But that's not the point. Now pay attention: this trend could mean oil prices will go up again. Which would raise the price of gas. Now there's many a slip between the well and the ship, but do NOT tell us that you're surprised if pump prices go up again. That is all.
Posted in Big Oil | News Blog | Overseas | 26 comments 
Has GM’s and Ford’s Chinese Hothouse Become Cold Comfort?
By Robert FaragoAugust 13, 2008 -
The Detroit News reports that The People's Republic has a new strategy to combat air pollution: tax the shit out of large cars [paraphrasing]. "The tax on passenger vehicles with engines bigger than 4 liters will be doubled to 40 percent from 20 percent, effective Sept. 1, the Finance Ministry said Wednesday in a statement on its Web site. Those buying vehicles with engines sized from 2 liters up to 4 liters will have to pay a 25 percent tax, up from the current 15 percent, it said." So, Buick's big barges get blasted. Ditto Ford's Chinese Volvos and Lincolns. OK, so both companies sell small cars in China as well, as part of their [mandatory] joint ventures. Only just-auto [sub] reports China's new car market has hit the skids. July sales fell 17 percent. "The Chinese vehicle market has cooled this year under the combined influences of higher inflation (reducing consumers' disposable income), increased petrol prices, the effects of the Sichuan earthquake and generally lower consumer confidence (stock markets are down)." Things don't look so bad year-to-date, but the domestics' Chinese bright spot won't be shining a ray of sunshine on next quarter's financials. Beyond that, the threat of official action to tamp-down the JVs to help the home team looms large. [thanks to autoacct628 for the link]
Posted in News Blog | Overseas | Sales | 13 comments
Russian ‘Undesirable’ Makes an Offer for HUMMER that GM Can Refuse. Or Can It?
By Robert FaragoAugust 12, 2008 -
The Daily Vedomosti (a combination of The Financial Times, The Wall Street Journal and Russia's Independent Media) says Russian "oligarch" Oleg Deripaska is making a play to purchase GM's HUMMER brand. ABC News repeats the report without providing any further details– save a few salacious facts about the Russian 28-billionaire's unsavory past. In context, of course. "The U.S. State Department revoked his visa in 2005 because they were reportedly concerned he had not been honest about his business dealings. U.S. law enforcement officials reportedly believe he is tied to organized crime. The allegations add a layer of irony to the possible purchase, as the Hummer has been popular with the would-be outlaw set in the United States. Gangsta rappers like now-deceased Tupac Shakur and 'Gangster's Paradise' artist Coolio owned Hummers, as did Christopher Moltosanti, the young ill-fated capo in HBO's The Sopranos." Less culturally aware commentators may remember Deripaska as Magna strongman Frank Stronach's partner in his ill-fated attempt to "liberate" Chrysler from Daimler. Anyway, GM will neither confirm or deny the report. "We haven't announced any of the discussions that have taken place with any outside parties that are interested in the brand," Hummer spokesman Nick Richards announced.
Posted in High Finance | News Blog | Overseas | People | 24 comments
Toyota to Export Big Trucks?
By Frank WilliamsAugust 11, 2008 -
If you're a manufacturer with operations all over the globe and a model is bombing in one market, what do you do? You send it to other markets to see how it fares. At least that seems to be Toyota's plan for the Tundra and Sequoia, according to Steve St. Angelo, president of Toyota Motor Manufacturing Kentucky Inc. Automotive News [sub] reports he stated today that the humongous "trucks could be attractive to overseas buyers." They have to do something to reclaim their investment in design and manufacturing as they aren't selling here. They halted production on both last Friday to try to clear an inventory backlog, with plans to resume production - most likely at a greatly reduced rate - in November. St. Angelo didn't say just where they plan to sell these gas-sucking mega-trucks, or who they think will buy them, but I have a feeling Europe and Japan are pretty low on their list.
Posted in News Blog | Overseas | 21 comments
“If we have a sense of humor, I expect them to have one as well”
By Robert FaragoAugust 7, 2008 -
As a Jew with a pretty solid claim on owning a functional sense of humor, I have to say that Hadar Goldman, co-owner of the Zarmon Goldman advertising agency in Tel Aviv, is being disingenuous. His company's ad, depicting a wild-eyed Arab sheik wailing on a Nissan Tilda for its [theoretical] effect on his bank balance, is over-the-top, over-the-line and not-so-funny. What if an Arabian agency created an ad that portrayed Jews as money-grubbing shysters? "It's a humorous campaign that was loved by both the Jewish and Arab worlds," Nissan spinmeister Daniella Ribenbach told The Jerusalem Post. Uh, we'd like to see some data on that Danny. Meanwhile, "It's my opinion that Nissan made a huge error by igniting these [racist] instincts," official Hani al-Wafa told Saudi Arabian TV. "In order for Nissan to keep its interests in the region, it must apologize." And so it will.
Posted in Marketing | Media | News Blog | Overseas | Politics | 24 comments
SUV Sales Up… In London
By Edward NiedermeyerJuly 31, 2008 -
Despite the fact that SUV are PC pariahs in The Land of Hope and Glory, despite the fact that unleaded costs $8.74 per gallon, SUV sales are up 11 percent on the year. Londoners are buying up SUVs faster than any other municipality. As London's roads haven't reverted to potholes and cobblestones, there must be some other way to logically explain this trend-defying headline. Are the expat Russian billionaires beefing-up their security entourages? Are conservatives celebrating the demise of Ken Livingstone and his $50/day C-charge plan? Is Clarkson on a Landie kick? Why is Old Blighty leading the Charge of the Light Truck Brigade while we here In The Land of the Free run for our Priora at first sign of $4 gas? Whatever the reason keep in mind that Britons consider things like the Daihatsu Terios an "SUV"– even though it sports a 1.5-liter engine and gets a combined 35mpg. Um, not that there's anything wrong with that…
Posted in News Blog | Overseas | Sales | UK | 10 comments
And While We’re on the Subject of Oil Subsidies…
By Robert FaragoJuly 28, 2008 -
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
U.S. Gas Prices to Remain High; Chinese Oil Imports Rise 11%
By Robert FaragoJuly 28, 2008 -
Those who claim that the current price of oil is a supply - demand deal have some new ammo. Industrialinfo.com reports that The People's Republic of China imported 90.53 million tons of crude oil in the first half of 2008, up 11 percent over the same period last year. And you know all those dollars we send over to China to build the cheap stuff we buy at Wal-Mart? A big chunk of that went to "Angora, Saudi Arabia and Iran" [sic]. "The value of imported oil rose to $64.98 billion, representing a dramatic 85.8% increase in costs." Although China exports some oil (2.37m barrels worth $1.42b), experts reckon the percentage of imported oil will continue to rise. The only possible brake on Chinese oil consumption: the lowering of government subsidies. The New York Times pegs that number at $40b per annum. So far, nothing much happening on that front. All of which means the current status is likely to remain quo.
Posted in Big Oil | China | News Blog | Overseas | 15 comments
Toyota to GM: We Will Bury You in Priora!
By Robert FaragoJuly 25, 2008 -
Just kidding. Toyota wouldn't say that, what with Motown's implosion about to force the transplants to paint themselves as nativists. But even if they aren't saying it, they're doing it. The Nikkan Kogyo [via Automotive News, sub] reports that the Japanese automaker is shifting non-Prius production out of its Tsutsumi plant to build as many gas - electric vehicles as they can (presumably without working their employees to death). No question: ToMoCo's going Hell for leather. Last year, they sold 281,300 Priora. With these changes, they'll be cranking-out at least 480k units. By the time a single example of GM's Hail Mary-shaped plug-in electric - gas hybrid hits the streets, Toyota will be building their fuel-sipper stateside. ToMoCo will have amped-up (so to speak) worldwide Priora production to 1m unit p.a. Whilst shunning the grammatical consensus on Prius pluratization established by TTAC's Best and Brightest, AN reports that Toyota built "320 Priuses in China last year." What's that all about?
Posted in Dealer News | Marketing | News Blog | Overseas | Sales | 50 comments
Wild Ass Rumor of the Day: Volvo Shipping C30s Back To Sweden?
By Edward NiedermeyerJuly 23, 2008 -
According to Autospies' spies, Volvo NA is shipping C30s "back to Sweden." Yes, well, the C1-based hatch is assembled in Ghent, Belgium. In any case, the C30 seems to be selling poorly; Volvo's dropped C30 prices in Australia and Old Blighty. This might have something to do with a $22k base price for what is, in essence, a tarted-up Focus. Though the C30 offers more cargo space than, say, a MINI Cooper, the C30's practicality is hurt by its awkward hatch shape. And then there's the Swede's EPA 20/28 mpg via a turbo I-5. The poisoned cherry on top: the Volvo brand is in the weeds, facing a date with Ford's corporate strimmer. Add it all up and the C30 boomerang story seems plausible. Throw a little anecdotal evidence into the mix (how many C30s have you seen on the road lately?) and well… if Volvo can't sell its smallest, most efficient car, what does that say about its odds of survival?
Posted in News Blog | Overseas | Wild Ass Rumor of the Day | 53 comments
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