The Truth About Cars » Latin America http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 20 Oct 2014 22:44:14 +0000 en-US hourly 1 http://wordpress.org/?v=4.0 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Latin America http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Riding the Luxury Buses of Latin America http://www.thetruthaboutcars.com/2014/08/riding-luxury-buses-latin-america/ http://www.thetruthaboutcars.com/2014/08/riding-luxury-buses-latin-america/#comments Tue, 19 Aug 2014 16:34:59 +0000 http://www.thetruthaboutcars.com/?p=895202 Traveling by bus is the preferred mode for the growing middle class throughout Latin America. White collar workers, government employees, and students take long-distance buses for many reasons. First, it is much less expensive than flying. Second, buses reach a lot more destinations than planes. Finally, even those who own cars prefer to let a […]

The post Riding the Luxury Buses of Latin America appeared first on The Truth About Cars.

]]>
securedownload-5

Traveling by bus is the preferred mode for the growing middle class throughout Latin America. White collar workers, government employees, and students take long-distance buses for many reasons. First, it is much less expensive than flying. Second, buses reach a lot more destinations than planes. Finally, even those who own cars prefer to let a professional do the driving, thus minimizing wear and tear to their own cars and the stress of dodging out-of-control big rigs and stray animals for hundreds of miles.

The stereotype, of course, is that all buses South of the Border are chicken buses– second-hand American school buses with psychedelic paint schemes, tinted windows, and chrome galore. In fact, luxury buses– built in Brazil and Europe– are very common and often have more amenities than commercial airliners. Make the jump to learn more about them.

The Buses. Along the Pan-American Highway, three brands dominate. Busscar (Brazil), Marcopolo (Brazil), and Scania (Sweden). Many are double deckers.

securedownload-5-1

Accommodations. All the buses have TVs hooked up to DVD players up front, constantly blaring bad American movies. Think Beverly Hills Chihuahua 2, Fireproof (starring Kirk Cameron), or any Kevin James movie.

All luxury buses have a toilet in the back, as the long-distance buses make very few stops.

The seats recline, some up to 160 degrees. One Peruvian bus company even offers a business center onboard, complete with printer and fax machine.

securedownload

The Staff. Two drivers usually man each bus. And they are always men. They switch off after a few hours of driving, as it is very fatiguing work. The express bus from Osorno, Chile, to Punta Arenas, Chile, which cuts through Argentine Patagonia, for example, takes over 28 hours.

CIMG0626

The waitstaff onboard the buses puts the flight attendants of American legacy carriers to shame. Their uniforms are chic and tidy and they will go out of their way to make their passengers’ trips pleasant. Even after a couple of days on the road, they look like they just started the workday an hour ago. It’s unreal.

securedownload-3

The meals. On the most fancy of coaches, you get a meal just like on an airplane. When you buy your ticket, you have the option of beef, chicken, or vegetarian meals. And they are actually delicious. When meals are not available onboard, the bus will invariably stop at a clean and reputable restaurant. The photo below shows a meal I had during a stop in the Argentinean Lake District. The restaurant was at the base of a cliff and a waterfall behind the eatery provided the ambiance.

securedownload-9

The worst meal I had on a luxury bus was in Honduras, where I was served a Burger King breakfast sandwich, and it still wan’t half bad. Here it is, served in a cute bus shaped box.

securedownload-1

For a summary of my Pan-American bus journeys, by the numbers, click here.

The post Riding the Luxury Buses of Latin America appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/08/riding-luxury-buses-latin-america/feed/ 34
GM Moves EV Pack Production In-House, Almost Had A Commodore EV http://www.thetruthaboutcars.com/2014/05/gm-moves-ev-pack-production-in-house-almost-had-a-commodore-ev/ http://www.thetruthaboutcars.com/2014/05/gm-moves-ev-pack-production-in-house-almost-had-a-commodore-ev/#comments Thu, 15 May 2014 13:00:21 +0000 http://www.thetruthaboutcars.com/?p=820874 Automotive News reports General Motors will bring production of the Chevrolet Spark EV’s battery pack in-house to its Brownstown Township plant in the Detroit metro area, having already moved the subcompact’s 85-kilowatt electric motors to White Marsh, Md. in 2013. The pack was originally assembled by A123 Systems before Wanxiang Group picked up the torch. […]

The post GM Moves EV Pack Production In-House, Almost Had A Commodore EV appeared first on The Truth About Cars.

]]>
2014 Chevrolet Spark EV Exterior-003

Automotive News reports General Motors will bring production of the Chevrolet Spark EV’s battery pack in-house to its Brownstown Township plant in the Detroit metro area, having already moved the subcompact’s 85-kilowatt electric motors to White Marsh, Md. in 2013. The pack was originally assembled by A123 Systems before Wanxiang Group picked up the torch. No new jobs will be created as a result of the move, spokesman Dave Darovitz stating GM would add jobs “if consumer demand requires it.” The packs for the 2015 Spark EV — whose market will expand to include California and Oregon later this year — will be 86 pounds lighter than the outgoing units, and will have a storage capacity of 19 kilowatts held within 192 lithium ion cells.

Speaking of GM EVs, GoAuto reports the Holden Commodore almost had an EV variant that would have been priced for $10,000 AUD ($9,400 USD) less than the Volt. Only seven pre-production units made it out of the joint venture between Axiflux, EV Engineering, Bosch Australia, Better Place, GE Finance and Air International before Holden announced it would end all local production by 2017. The announcement, along with the collapse and withdrawals among a majority of the project’s partners, led to Axiflux acquiring EV Engineering’s assets. The company plans to focus on industrial applications for the developed technology until the right partner comes along to pick up where the project left off for an automotive joint venture.

The Detroit Press says GM’s board of directors has retained New York-based Wachtell, Lipton, Rosen & Katz to give an “independent assessment” of the automaker’s inner workings. An unnamed source familiar with the announcement says the decision “was a good governance practice” aimed to deliver sound advice to GM’s senior management. The firm is the latest third-party to join GM’s cadre of attorneys, including Anton Valukas and Ken Feinberg, as the automaker navigates the legal waters in the wake of the February 2014 ignition switch recall.

Finally, Just-Auto reports GM is planning to expand its Indian operations into a global base of operations for small-car exports to Latin America and beyond. The exports will begin with 2,000 to 2,500 Beats to Chile in October from the automaker’s factory in Talegon, with some 30,000 to 33,000 units to leave annually for Latin America within two years. GM expects Mexico to receive the biggest imports from India, with over 12,000 units shipped annually.

The post GM Moves EV Pack Production In-House, Almost Had A Commodore EV appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/05/gm-moves-ev-pack-production-in-house-almost-had-a-commodore-ev/feed/ 18
New PSA Boss Tavares Prepares To Rebuild Company http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/ http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/#comments Mon, 14 Apr 2014 14:15:58 +0000 http://www.thetruthaboutcars.com/?p=797482 Though PSA Peugeot Citroen secured funding in a three-way deal between itself, the French government and Dongfeng, new boss and former Renault COO Carlos Tavares has a hard road ahead of him as he rebuilds the ailing automaker. Reuters reports Tavares will focus using the joint venture it shares with Dongfeng to go after 1.5 […]

The post New PSA Boss Tavares Prepares To Rebuild Company appeared first on The Truth About Cars.

]]>
Carlos Tavares

Though PSA Peugeot Citroen secured funding in a three-way deal between itself, the French government and Dongfeng, new boss and former Renault COO Carlos Tavares has a hard road ahead of him as he rebuilds the ailing automaker.

Reuters reports Tavares will focus using the joint venture it shares with Dongfeng to go after 1.5 million sales by 2020, bring exports to Southeast Asia and establish a research center. He will also tighten up both working capital and the number of models sold in each market, as well as squeeze savings from PSA’s suppliers.

However, development woes, pricing issues on some models, and the use of heavy discounts and incentives are all roadblocks on Tavares’ “Back in the Race” plan expected to be issued in full Monday, as well as currency challenges in Latin America and Russia and lower-cost products from around Asia.

As part of the plan, Tavares is expected to halve the number of models it currently offers. On the bright side, the 308 and 2008 both delivered a combined 5.2 percent sales increase in the first two months of 2014, as well as an 8.5 percent Q1 2014 gain over PSA’s home market.

The post New PSA Boss Tavares Prepares To Rebuild Company appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/04/new-psa-boss-tavares-prepares-to-rebuild-company/feed/ 9
Japanese Automakers Find New Export Base, Opportunity In Mexico http://www.thetruthaboutcars.com/2014/03/japanese-automakers-find-new-export-base-opportunity-in-mexico/ http://www.thetruthaboutcars.com/2014/03/japanese-automakers-find-new-export-base-opportunity-in-mexico/#comments Tue, 11 Mar 2014 14:45:26 +0000 http://www.thetruthaboutcars.com/?p=769626 Within four months of each other, Honda, Mazda and Nissan have opened new factories in Mexico, taking advantage of the opportunities within the nation’s automotive industry to grow a new export base into the United States, Latin America and Europe while also gaining ground in the rapidly expanding local market, all in direct challenge to […]

The post Japanese Automakers Find New Export Base, Opportunity In Mexico appeared first on The Truth About Cars.

]]>
Mazda3s Loading Onto Three-Tiered Train Car

Within four months of each other, Honda, Mazda and Nissan have opened new factories in Mexico, taking advantage of the opportunities within the nation’s automotive industry to grow a new export base into the United States, Latin America and Europe while also gaining ground in the rapidly expanding local market, all in direct challenge to the Detroit Three and other automakers on both sides of the border.

Automotive News reports Mexico will become the No. 1 exporting nation to the U.S. by 2015 at the earliest in large part due to the 605,000 units per year added by the three Japanese automakers. Meanwhile, Toyota will begin production in 2015 at Mazda’s newly opened Salamanca plant prior to deciding whether or not to build a new factory of their own. Nissan’s premium brand, Infiniti, may also set-up shop in Mexico.

In turn, the Japanese will see benefits from the move, from mitigating losses from a weaker yen in exports from home and greater profit due to cheap labor, to no tariffs on exports to the U.S. due to the North American Free Trade Agreement and improved product availability resulting from shorter distances between markets.

Speaking of free-trade agreements, Japanese automakers will also have access to some 44 countries and up to 40 million sales annually as a result of Mexico’s many agreements, allowing them to take on competitors in Latin America and Europe.

Finally, the Japanese have taken market share away from the Detroit Three in Mexico’s own automotive market, holding a collective 42 percent over Detroit’s 35 percent in 2013, when just four years earlier Detroit dominated with 57 percent of the market over Japan’s 23 percent.

The post Japanese Automakers Find New Export Base, Opportunity In Mexico appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/03/japanese-automakers-find-new-export-base-opportunity-in-mexico/feed/ 27
Yamanouchi: Mazda’s Mexico Factory Key To Global Strategy http://www.thetruthaboutcars.com/2014/02/yamanouchi-mazdas-mexico-factory-key-to-global-strategy/ http://www.thetruthaboutcars.com/2014/02/yamanouchi-mazdas-mexico-factory-key-to-global-strategy/#comments Fri, 28 Feb 2014 16:15:21 +0000 http://www.thetruthaboutcars.com/?p=757201 Mazda Chairman Takashi Yamanouchi opened his company’s sole North American factory in Salamanca, Mexico, proclaiming the new factory the key to a global strategy “upon which the very future of [the] company hinges.” Automotive News reports the strategy with the factory — Mazda’s Structural Reform Plan — follows a three-pronged approach: a hedge against currency […]

The post Yamanouchi: Mazda’s Mexico Factory Key To Global Strategy appeared first on The Truth About Cars.

]]>
Takashi Yamanouchi

Mazda Chairman Takashi Yamanouchi opened his company’s sole North American factory in Salamanca, Mexico, proclaiming the new factory the key to a global strategy “upon which the very future of [the] company hinges.”

Automotive News reports the strategy with the factory — Mazda’s Structural Reform Plan — follows a three-pronged approach: a hedge against currency exchange disruptions, provide Mazda with a low-cost manufacturing base, and give the automaker access to new markets. The factory’s location allows the automaker to gain more profit for the Mazda3s destined for the United States, than those exported from Japan, while also providing an export base to Europe and access to new markets in Latin America. In turn, Mazda’s new access through Mexico’s free trade pacts provides to markers worth a combined 35 million to 40 million vehicle sales annually.

Though the yen is weakening against the dollar at the moment, Yamanouchi said the factory will act as a hedge against unpredictable currency fluctuations that could bring down profits for his company at any time:

When the yen becomes stronger, we have the Mexican plant, therefore we will never again go into the lost position. But when the yen gets weaker, we will further cost reduce the Mexican plants so it will contribute to our total profitability. Our philosophy is that we will strike the balance of business so that we won’t go into the very difficult times of the past that we have experienced. Never.

The factory is expected to employ 4,600 workers once at full capacity of 230,000 units/annually. Currently, 3,000 employees assemble Mazda3s for the North American market, which will be joined by the Mazda2 and a Mazda2-based vehicle for Toyota. An engine machining plant will also set up shop in the factory by October 2014.

The post Yamanouchi: Mazda’s Mexico Factory Key To Global Strategy appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2014/02/yamanouchi-mazdas-mexico-factory-key-to-global-strategy/feed/ 41
Double Safety Standards Abound in Latin America, Global Markets http://www.thetruthaboutcars.com/2013/12/double-safety-standards-abound-in-latin-america-global-markets/ http://www.thetruthaboutcars.com/2013/12/double-safety-standards-abound-in-latin-america-global-markets/#comments Fri, 06 Dec 2013 12:30:40 +0000 http://www.thetruthaboutcars.com/?p=672538 Should you find yourself renting a Chevrolet Spark in Acapulco in the near future, beware: it won’t have the same safety features — as in none at all — as the Spark exported to your local dealership. In fact, unless a car or truck screwed together in Mexico is bound for the United States or […]

The post Double Safety Standards Abound in Latin America, Global Markets appeared first on The Truth About Cars.

]]>
2013 Nissan Tsuru Latin NCAP

Should you find yourself renting a Chevrolet Spark in Acapulco in the near future, beware: it won’t have the same safety features — as in none at all — as the Spark exported to your local dealership. In fact, unless a car or truck screwed together in Mexico is bound for the United States or Europe, only the bare minimum, if any, in safety features will be available to customers in Latin America shopping for base models.

The results? Cars whose sticker prices in Mexico are higher than in the United States in spite of having less safety features than those shipped abroad, for one. For another, higher road fatalities south of the border; over 5,000 drivers and their passengers lost their lives in 2011, a 58 percent increase since 2001. Alas, the Mexican government’s hands are tied when it comes to drafting, passing and enforcing the sort of laws that would bring an end to this particular double standard.

The reason for is said to be cost savings: Automakers doing business in Mexico go so far as to code their production lines in determining which car goes to export and those that remain in Latin America. For the latter, this means a couple of air bags and a few seat belts, and nothing more. This two-tiered approach holds up the bottom line, one that is beneficial to Mexico’s economy to the tune of $30 billion annually.

The post Double Safety Standards Abound in Latin America, Global Markets appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2013/12/double-safety-standards-abound-in-latin-america-global-markets/feed/ 70
Beyond The BRICs http://www.thetruthaboutcars.com/2013/10/beyond-the-brics/ http://www.thetruthaboutcars.com/2013/10/beyond-the-brics/#comments Wed, 23 Oct 2013 12:30:02 +0000 http://www.thetruthaboutcars.com/?p=632226 Emerging markets have been a big theme at TTAC for the past few years, with our coverage going beyond the cursory articles on automotive developments in the BRIC countries. Our articles on places like North Africa and Indonesia aren’t always the most popular, but we keep an eye on them for a very important reason. […]

The post Beyond The BRICs appeared first on The Truth About Cars.

]]>
Not business as usual_1

Emerging markets have been a big theme at TTAC for the past few years, with our coverage going beyond the cursory articles on automotive developments in the BRIC countries. Our articles on places like North Africa and Indonesia aren’t always the most popular, but we keep an eye on them for a very important reason. These countries are the final frontier for growth in the automotive sector.

Boston Consulting Group released a report that urges auto makers to look beyond the BRICs, to a group of 88 countries that contain roughly 40 percent of the world’s population. Collectively, annual growth of 6 percent is expected, below India’s 10 percent, but on par with China and outpacing both Brazil and Russia.

Rather than cover all 88 nations, BCG identified the “Future 15″ countries where car sales are expected to show strong increases in sales (Iran, Turkey, Saudi Arabia, the Ukraine, Indonesia, South Korea, Thailand, Malaysia, Taiwan, Mexico, Argentina, Colombia, Chile, South Africa and Algeria), as well as four regional areas that will serve not only as sales hot spots, but also as future locations for assembly plants, R&D and sourcing. Not surprisingly, these are based in North Africa, the ASEAN region, the Middle East and the Andean region in South America.

The need for specific regional strategies is a key theme in the report, with BCG devoting plenty of space to the need for product, financing and sourcing solutions that are best adapted to regional characteristics. Among their examples are the importance of offering a vehicle with a low tax burden in the Middle East, a tailor-made financing plan for Latin American consumers from Chevrolet and Renault’s North African assembly efforts for its Dacia brand.

One of the more interesting examples highlighted by the report was that of the ASEAN countries. Toyota is overwhelmingly dominant in Indonesia, its biggest market, and one possible reason is because of its ability to build products at an appropriate price-point that strongly resonate with local buyers. A side by side comparison between the Japanese market Sienta MPV and the Indonesian Avanza shows how this is done.

On the surface, the two seem indistinguishable, but under the skin, they are vastly different cars. The Sienta rides on a platform shared with the Yaris, while the Avanza uses a rugged, body-on-frame rear-drive layout with increased ground clearance, to handle Indonesia’s rougher roads and frequent flooding. Its powertrain and interior are much less advanced, and the Avanza has fewer creature comforts. But it’s built to a price, costing as much as $5,000 less than a Sienta, a fact that’s reflected in the slab-sided body panels, which are easier and cheaper to stamp. This kind of specialization is what’s allowed Toyota to capture 90 percent of Indonesia’s market, giving them an enormous head start in what is expected to be the next big place to sell cars.

ASEAN is not the only region where Toyota enjoys the top spot. The auto maker is leading slightly in volume in the Middle East, though second-place Kia is essentially equal in terms of market share. Chevrolet is regarded as the leader in the Andean belt, while Renault and Dacia are tops in North Africa. While Korean OEMs also have a strong showing, both Renault and Peugeot are strong in the Middle East and Africa, even as their efforts falter in Europe.

The common thread with all of this is an emerging middle class in regions where that notion did not exist. With prosperity on the rise, they are eager to attain greater mobility and freedom though an automobile of their own. Along with personal transportation comes the possibility of good jobs in assembly plants, sales and after-sales, logistics and other related industries. Renault and Dacia have begun to look to North Africa as a regional hub not only for the African market, but for the Middle East and even Europe. Nissan’s Datsun brand is one of the first to explicit target the “Beyond BRIC” countries, with stated aims to expand into Indonesia and Africa in the near future.

The post Beyond The BRICs appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2013/10/beyond-the-brics/feed/ 17
Best Selling Cars Around The Globe: How The Chinese Are Setting Themselves Up For Success (Part 2: Latin America) http://www.thetruthaboutcars.com/2013/06/best-selling-cars-around-the-globe-how-the-chinese-are-setting-themselves-up-for-success-part-2-latin-america/ http://www.thetruthaboutcars.com/2013/06/best-selling-cars-around-the-globe-how-the-chinese-are-setting-themselves-up-for-success-part-2-latin-america/#comments Tue, 04 Jun 2013 14:41:29 +0000 http://www.thetruthaboutcars.com/?p=490777 This is Part 2 of a 5 Part-series about how the Chinese car manufacturers are faring abroad. You can check out Part 1 about Africa here. If Chinese carmakers have started exporting to Africa in the early 00′s, they set foot in Latin America even earlier, with JAC starting to export trucks to Bolivia back […]

The post Best Selling Cars Around The Globe: How The Chinese Are Setting Themselves Up For Success (Part 2: Latin America) appeared first on The Truth About Cars.

]]>

This is Part 2 of a 5 Part-series about how the Chinese car manufacturers are faring abroad.

You can check out Part 1 about Africa here.

If Chinese carmakers have started exporting to Africa in the early 00′s, they set foot in Latin America even earlier, with JAC starting to export trucks to Bolivia back in 1990. Similarly to the strategy they adopted in Africa, the Chinese have initially focused on the less developed car markets in the region. They are now in the process of stepping up their involvement by launching in the bigger, more mature markets like Argentina and Brazil.

In fact, the foundations the Chinese have built in secondary Latin American car markets are potentially their strongest in the world so far

FAW S80. Picture courtesy of www.autowp.ruFAW S80. FAW is the 10th most popular brand in Uruguay vs. #16 at home in China.

The first logical anchor points in the region are Uruguay and Paraguay, both located between Argentina and Brazil and all part of the Mercosur, which makes it easier to export towards those two powerhouses as local assembly with 30% to 50% share of local components currently receive zero-tariff status inside the Mercosur. Both Chery and Lifan (40,000 units/year capacity) have assembly factories in Uruguay while Dongfeng has one in Paraguay.

In Uruguay, 26 of the 60 brands on sale are Chinese, capturing 23.4% of the market so far in 2013 – their highest country penetration outside of China and actually on par with the penetration of Chinese passenger cars within China! There are 7 Chinese carmakers in the Uruguayan Top 20 and 2 among the Top 10: Chery is 6th with 6.8% share after peaking at #2 and 12.2% share in June 2011. FAW is 10th at 3.9%, followed by Geely at #12 and 2.7% and Great Wall at #14 and 2.2%. For comparison Toyota ranks #13 with 2.6% of the market… 

DongFeng Mini Pick-up. Picture courtesy of www.autowp.ruThe DongFeng Mini Pick-up is now produced in Paraguay.

In Paraguay, the Chinese hold 9% of the passenger car market but 59% of the truck market! There were 10 Chinese among the Top 30 best-selling brands in 2012, led by Dongfeng which now produces pick-ups locally, up 57% to #11, Great Wall at #18, ChangAn at #21, Haima at #22, Foton at #23 and ChangHe at #24.

Geely CK. Picture courtesy of GeelyGeely CK Police car in Cuba

Peru is another very important hub for Chinese manufacturers in Latin America: it is one of the fastest growing car markets in the world, with the last 3 years all being new records topped up by 178,000 registrations in 2012, and is “facing” China on the Pacific Ocean, making it an enticing port-of-entry into the continent. Roughly 15% of the Peruvian car market go to Chinese models, and latest data shows JAC at #9 in the overall brands ranking and Chery at #10 in the passenger cars one, with Great Wall at #12 and Geely at #19.

Local analysts even estimate that as much as 96 Chinese car brands (who knew there even were that many?!) are sold in Peru both formally in dealerships and informally by rogue vendors…

DongFeng S30. Picture courtesy of www.autowp.ruThe DongFeng S30 was the best-selling model in Venezuela in December 2012…

Venezuela is a slightly different situation because the exchanges with the rest of the region are more patchy, so the Chinese’s success so far has stemmed either from local production – Chery has started assembling cars there in 2011 but no figures are available – or direct agreements with the Chinese government, like the unprecedented 4,000-unit batch of DongFeng S30 imported in late 2012 which enabled the model to simply take the lead of the sales charts last December. The S30 has since celebrated its 5th consecutive month within the Top 5 best-sellers in Venezuela last month.

Chevrolet N300. Picture courtesy of Chevrolet ColombiaChevrolet N300

If we go up one notch to Chile – yet another record-breaking market at 340,000 sales in 2012, we notice that the best-selling model in the country, the Chevrolet Sail, is actually imported from China. Chinese brands have a 7% market share, with no less than 18 of them represented in the brands ranking. They are led by Great Wall at #11, Chery at #16, JAC at #20, Geely at #26, BYD at #27 and Hafei at #30. In Colombia, there is one (hidden) Chinese model in the Top 40 in 2012: the Chevrolet N300 which is actually a rebadged Wuling Rongguang, up 171% to #18. Bolivia and Ecuador, although no sales data is available, are two other developing Latin American markets likely to have seen a recent flood of Chinese cars.

The Caribbean region is yet another under-developed zone most carmakers traditionally sidestep, except the Chinese. Geely regularly ships cars to Cuba, the last batch from October 2011 was composed of 1,300 Geely CK (now a common sight in La Habana as a police car) and 250 Emgrand EC7. In the Dominican Republic, a few Chinese models have already managed to break into the Full Year Top 20 like the BYD F3 (#9 in 2010), the DongFeng Cargo Van (#14 in 2011) and the Jinbei Haise (#18 in 2011).

JAC J3. Picture courtesy of JAC BrazilBrazilian JAC J3

This all means that Chinese carmakers have now established a solid footing in almost all Latin American markets,  working extremely hard hard to secure the foundations for long-term success in the region. They are now using these stepping stones to access Argentina (800,000+ annual units) and Brazil (record 3.6 million units in 2012), where the volumes really are. In Argentina, Chery imports from Uruguay and as a result has seen a few models make their way up the ladder: both the Chery QQ (#47) and Tiggo (#53) reached their highest ranking so far in the country in March 2013.

In Brazil, JAC broke with the Chinese tradition and chose to enter the market all guns blazing on 18 March 2011, which they called J-Day. They simultaneously inaugurated 50 dealerships across the country and hired a famous TV presenter, Fausto Silva, as their ambassador in a multi-million dollar TV campaign (watch above).

JAC J2. Picture courtesy of autossegredos.com.brThe JAC J2 is now the best-selling Chinese model in Brazil (#64 in April 2013)

However JAC’s strong start in the country has since fizzled out. The JAC J3 hatchback (#36) and J3 Turin sedan (#56) both hit their highest ranking only 3 months after launch in June 2011 while in the meantime the Chery QQ peaked at #36 in September 2011, but 2012 was harsh: J3 at -37%, J3 Turin at -40% and QQ at -25%, on the back of increased levies on imports. Now both manufacturers realise their success in Brazil lies in local assembly: Chery is reportedly building a 150,000 annual unit-production facility in the São Paulo state while JAC is set to open a 100,000 annual vehicle-plant in the state of Bahia in 2014.

A very strong base in Latin America’s developing markets should ensure Chinese manufacturers surf on these markets’ predicted explosive growth in the next coming decades. The next challenge is to manage to crack more mature markets like Brazil and Argentina and this will require a much more significant level of investments in the form of large scale manufacturing operations. But the rewards could be priceless: thanks to its brand-new factory producing models tailored to Brazilian tastes, Hyundai has tripled its market share in the space of a few months… No doubt the Chinese are watching with tremendous interest.

Stay tuned for Part 3 of this series tomorrow about Eastern Europe

The post Best Selling Cars Around The Globe: How The Chinese Are Setting Themselves Up For Success (Part 2: Latin America) appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2013/06/best-selling-cars-around-the-globe-how-the-chinese-are-setting-themselves-up-for-success-part-2-latin-america/feed/ 12
Treasury Lowers The Bar, Fiat Snags Another 5% Of Chrysler http://www.thetruthaboutcars.com/2011/04/treasury-lowers-the-bar-fiat-snags-another-5-of-chrysler/ http://www.thetruthaboutcars.com/2011/04/treasury-lowers-the-bar-fiat-snags-another-5-of-chrysler/#comments Tue, 12 Apr 2011 15:22:34 +0000 http://www.thetruthaboutcars.com/?p=390995 Exactly a week ago, Fiat said it would up its stake in Chrysler “within weeks,” and according to the Detroit News, the deed is now done. Having earned 5% of Chrysler’s equity by building a FIRE-family engine in the US (for use in the Mexico-built Fiat 500), Chrysler had to confirm that it has brought […]

The post Treasury Lowers The Bar, Fiat Snags Another 5% Of Chrysler appeared first on The Truth About Cars.

]]>

Exactly a week ago, Fiat said it would up its stake in Chrysler “within weeks,” and according to the Detroit News, the deed is now done. Having earned 5% of Chrysler’s equity by building a FIRE-family engine in the US (for use in the Mexico-built Fiat 500), Chrysler had to confirm that it has brought in $1.5b in non-NAFTA foreign revenue, and (according to Chrysler’s LLC agreement [PDF])

[execute] one or more franchise agreements covering in the aggregate at least ninety percent (90%) of the total Fiat Group Automobiles S.p.A. dealers in Latin America pursuant to which such dealers will carry Company products

in order to bring its stake up from 25% to 30%. We already know that Fiat will achieve this goal by rebadging Chrysler vehicles as Fiats for Latin American markets, a move that is technically compliant with the letter (if not the spirit) of the LLC agreement. But, it turns out that Fiat still had to get the Treasury to amend its agreement in order to bend the rules just a little bit more.

Exactly one week ago, a third amendment to the Chrysler LLC Operating Agreement [see gallery] was signed, making this second opportunity for Fiat to increase its share in Chrysler far easier. Whereas the original “Non-NAFTA Distribution Event” called for franchise agreements “pursuant to which dealers will carry Company [Chrysler] products” (note the plural), the amended version requires

“a distribution agreement… which shall (a) cover in the aggregate at least ninety percent of the total Fiat Group Automobiles S.p.A. dealers selling passenger vehicles in the European Union pursuant to which such dealers will have the right to carry one or more Company products (which may include Company products rebadged under any Fiat Group Automobiles S.p.A. brand name)” [Emphasis added]

The amendment also covers Brazil under the same language, which means Fiat was able to get Treasury to back off on a number of key conditions. First, Treasury only gets agreements to distribute Chrysler Group vehicles in Brazil and Europe, whereas the original called for agreements with Fiat dealers in all Latin American countries that Fiat has a presence. This was apparently too difficult for Fiat to negotiate with all of its Latin American dealers, so it was dropped (Chrysler dealers who were cut in the bailout-era dealer cull, take note). Second, the agreement went from requiring the sale of multiple Chrysler group models at Fiat’s Latin American dealers to requiring only one model to be sold in Fiat’s European and Brazilian dealers (so much for developing robust foreign markets for US-built Chrysler products). Finally, by agreeing in writing to Fiat’s rebadge request, Treasury has written the death warrant for any hopes of seeing Chrysler emerge as even a semi-independent company. Without any effort to push Chrysler’s brands in developing markets, Chrysler will become little more than the US manufacturing and retail arm of Fiat.

Are these amendments pragmatic? Possibly. It may not have been reasonable to expect Fiat to subvert its own global brand-building exercises to pump up Chrysler’s independent value, but that’s just what Treasury’s initial agreement with Fiat did. If Fiat was willing to agree to it when a bankruptcy-rinsed and publicly-refinanced Chrysler was on the line, why would Treasury back away from it after the fact? After all, Fiat was going to sell “at least one” Chrysler in most of its European dealerships anyway (as its Lancia line, and the Fiat Freemont), so why get rid of the multiple-vehicle requirement and leave aside the non-Brazilian Latin American markets? Chrysler Group’s vehicles would have had at least as good of a shot in Latin America as they have in Europe, particularly if Fiat had any intention of developing Chrysler’s brands outside of North America.

What this amendment acknowledges then, is that Chrysler’s opportunities for any kind of standalone independence are not something the Treasury is willing to fight for. Despite the rhetoric about “saving American automakers,” Treasury clearly has no intention of making any effort to preserve Chrysler’s options outside of being subsumed by Fiat. Like the green justifications for Treasury’s intervention in the auto industry, the “preserving American companies” justification has been abandoned in favor of a “we saved jobs” after-the-fact justification. Which would have been fine if Treasury had been upfront about it, and hadn’t signed agreements holding Fiat to conditions that made the bailout seem more favorable to American taxpayers, only to abandon them.

As things stand, Treasury has botched negotiations over Fiat’s “ecological commitment” (or purposefully made the agreement seem more significant than it is), and now it has pulled the teeth out of an agreement that was supposed to guarantee Chrysler some independent viability and access to foreign markets. It’s more than a little bit puzzling that, having been literally deadlocked over whether or not to save Chrysler at all, the president’s auto task force (and its successors at Treasury) decided not to save Chrysler, but to pump it with taxpayer cash and then doom it to becoming a Fiat subsidiary. That this would be accomplished while maintaining the impression that taxpayers were getting some kind of value out of the deal (in the form of the “ecological commitment” and “Non-NAFTA Distribution Event”), speaks to the fact that the rescue of Chrysler was, rather than the act of bravery it is so often trumpeted as, ultimately an act of cowardice. Fiat Obama in Mexico City is still waiting for its Chryslers... Picture 36 Picture 35 Picture 37

The post Treasury Lowers The Bar, Fiat Snags Another 5% Of Chrysler appeared first on The Truth About Cars.

]]>
http://www.thetruthaboutcars.com/2011/04/treasury-lowers-the-bar-fiat-snags-another-5-of-chrysler/feed/ 12