While America Slept. Sunday, December 21, 2008

by Bertel Schmitt

December 21st, 2008 7:37 AM

while america slept sunday december 21 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. For the next two weeks, WAS will be filed from Tokyo.

Canada paying their share for the bailout: Canada will follow the United States and give $3.3b in emergency loans to the Canadian arms of the D2.8, Prime Minister Stephen Harper said to Reuters. GM of Canada is eligible for loans of up to $C3b, Chrysler Canada Inc can get up to C$1 billion. The Canadian arm of Ford has not asked for assistance. Harper said the governments were attempting to attach some liens and secure some assets of the car companies “but I will not fool you — there is obviously some money at risk here.” Translation: Don’t ever expect to see the money again.

Toyota still has got the dough: One of the most important metrics in business is “free cashflow.” It’s the money you can spend: cash generated from operations plus capital available for investment. Despite the business downturn, Japanese companies added to their free cashflow. Toyota tops the list with an improvement of 500.7 billion yen on the year, The Nikkei (sub) reports.

And now, the Chinese bailout plan: China is thinking about its own bailout plan for the auto industry, says Gasgoo. The plan joins several that had been announced in the past. It could also be a retread of the bailout plan that was proposed Ministry of Industry and Information Technology in November 2008. What is interesting is that the plans get more focused. Or less diverse, however you may want to look at it. The first plan had nine recommendations. Further plans went to eight, then seven. The new plan now reportedly is down to six policy recommendations including jacking up domestic demand, expanding overseas markets, supporting homegrown brands, reforming fuel tax, boosting the second-hand vehicle market, and “preventing policies and regulations that may hurt auto sales.” The last one sounds like a great idea.

FAW doing fine: While other car companies try to outdo themselves with morose announcements, China’s carmakers are doing just fine, xie xie (thank you.) Case in point: FAW, one of China’s largest automobile manufacturers, increased their sales by 8.8 percent during the first 11 months, reports Gasgoo. Interesting tidbit: FAW’s sales are “0.28 percentage points higher than the industrial average.” Which means that China still powers ahead by 8.5 percent. FAW sold 1.42m vehicles through November, and holds a 16.5 percent share of the Chinese market. They are also serious about export: They opened 27 full service dealerships in Mexico. “In addition, an assembling workshop of FAW Group with a local counterpart is being planned in the country.” China is coming to NAFTA.

German automotive trade stable: The German automotive trade with its more than 39K dealers and workshops is looking at annual revenue of €129b for 2008. That’s only €2b less than last year. Guilty: falling car sales, downsizing, and falling used car sales, Das Autohaus reports. The mostly recession-proof service business is doing just fine.

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2 of 5 comments

Bertel Schmitt on Dec 21, 2008

Charly: It's a bad number by Chinese standards, but 8.5 percent plus is still an increase, no a contraction.

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Charly on Dec 21, 2008

No, it is a contraction. It is 8.5% more than November last year. But if you have 30% growth a year and than you have growth which completely stops than that year you stil have 15% growth. So 8.5% growth is a contraction of 6.5%. ps. It depends a bit in which month the growth stop and there is a big seasonal effect in carsales etc. so 15% is not a very precise number.

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