While America Slept. Saturday, December 20, 2008

Bertel Schmitt
by Bertel Schmitt
while america slept saturday december 20 2008
A short 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: For the next two weeks, WAS will be filed from Tokyo.

Cerberus wants to unload Chrysler, keep GMAC: That’s what Automotive News says. I’m sure TTAC’s day shift will have more on this.

Honda uses the F-word: Honda President Takeo Fukui had already dropped hints about locating the Honda HQ outside the land of the rising yen. Now, even more sinister threats. Fukui said to the Nikkei (sub) that Honda “may have to abandon one of its key principles of protecting the jobs of its full-time workers next year, if the Japanese currency remains at current levels of around 90 yen to the dollar.” That means F as in fire, unless the effing Yen is getting cheaper against the greenback. Honda is bracing for a group operating loss of 190 billion yen in the second half of the current fiscal year. “I think the dollar will move back to above 100 yen because the level of below 90 yen is abnormal,” Fukui said. Hint, hint, hint.

Toyota and Fuji Heavy put joint sports car on back burner: Toyota decided to delay the compact sports car it has been developing with Fuji Heavy, the Nikkei (sub) writes. The two automakers had planned to begin manufacturing the car in late 2011 for the domestic market, but the start of production will now likely be postponed until 2012 or later.

Japanese overstock: Toyota, Honda, and Nissan could take a four month vacation and would still not run out of cars to sell in the U.S. “The average inventory among the top three Japanese automakers came to 103 days in November, up 60 percent from a year earlier, to post its highest level since 2000. The three major U.S. automakers also have inventory levels of more than 100 days,” says the Nikkei [sub]. At Toyota, U.S. inventories in November were 90 percent higher than a year earlier at 92 days. Honda’s inventories went up 70 percent to 106 days. There are 117 days worth of Accords in the U.S. Even the Civic, which had waiting lists in September, now has a 90 day supply.

No blow-out pricing in China: Worries of a huge fire sale in China to blow out end-of year inventories were unwarranted – so far, writes G asgoo. November auto prices in the Chinese market were stable, says a survey conducted by the Price Monitoring Center of China’s National Development and Reform Commission (NDRC). Chinese-made vehicles posted stable prices while the prices of imported vehicles continued to go down. Let’s see what happens in December.

VW wants government to co-sign loan: Volkswagen is seeking loan guarantees exceeding €10b for their captive financing arm Volkswagen Financial Services. This according to an article which will appear in the Monday issue of Der Spiegel. Underwritten by the government, money could be borrowed at much more favorable rates, says Das Autohaus.

Talks trashed: The talks between Daimler, BMW, and Fiat about a possible cooperation, remain just talks so far, writes Das Autohaus. In July. BMW and Fiat signed a letter of intent to share the burden of developing the Mini and Alfa platforms. The talks are going nowhere, says das Autohaus. Even the project to pool the parts buying of Daimler and BMW is dragging along. The engineers have their usual concerns. A project to develop a joint engine had been buried a while ago.

Golf VI gets new hood ornament – money: VeeDub launched their Golf VI in October. They must be sitting on a big supply of them. They put €1,250 on the hood of every new Golf VI that is ordered from factory stock, says Automobilwoche (sub.) Other models will receive incentives between €1,500 and €3,000.

Dominoes falling: Federal Mogul said it would cut 4,600 jobs from its already reduced workforce in response to what it called “continued challenging conditions” in the global automotive market. Visteon withdrew their already reduced sales forecast for 2008 because of “larger than anticipated declines in global vehicle production and overall industry uncertainty,” Reuters writes.

No joke: Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200b program, writes the Financial Times. The Fed said it would offer low-cost three-year funding to any US company investing in securitized consumer loans under the Term Asset-backed Securities Loan Facility (TALF). This includes hedge funds, which have never been able to borrow from the US central bank before.

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2 of 3 comments
  • John Horner John Horner on Dec 20, 2008

    "Hedge funds will be allowed to borrow from the Federal Reserve for the first time under a landmark $200b program" What kind of a crazy country do we live in where anyone in the financial industry can just knock on the door of the government and get money, yet manufacturing companies are put through the grinder for it? Not to say I'm in favor of car bailouts, but the disconnect between the way to two industries are treated is maddening. I guess bankers are just inclined to help each other while at the same time prescribing "hard medicine" to the poor fools who actually make stuff!

  • 50merc 50merc on Dec 20, 2008

    "There are 117 days worth of Accords in the U.S. Even the Civic, which had waiting lists in September, now has a 90 day supply." Maybe that's why the local Honda dealer's storage lots appear to be jammed full. I wonder if they're still pasting $500 to $1000 additional dealer markup/wax job stickers on the windows.

  • Alan I blame COVID, the chip shortage, container shortage and the war in Ukraine. This aggression is evident in normal daily driving of late.
  • Alan $10 000 is a bit rich for a vehicle that most likely been flogged all its life, plus it's a VW. Lots of electrical gremlins live in them.
  • Alan Mitsubishi, Hino and Izuzu trucks are quite common in Australia. Another factor that needs to be taken into account are the cheap Chinese trucks and vans that are entering the market in Australia and becoming more popular as reliability improves, with huge warranties. Businesses want the cheapest logistics. Plumbers, concreters, builders buy many of these in their lightest versions, around 2.5 tonne payload. Hino/Toyota could use the cheaper competitor in Mitsubishi as a competitor against the Chinese. You don't see too many of the Japanese/Asian trucks in the rural areas.
  • 2ACL I think it's a good choice. The E89 didn't get respect due to its all-around focus when new, but it's aged well, and the N52/6HP combo is probably more fun and capable than it's given credit for.
  • Wjtinfwb I can hear the ticking from here...