While America Slept. Thursday, December 11, 2008
Volvo soap opera update: Indian farm tractor builder Mahindra & Mahindra denied media reports that they are considering to go for Volvo. Earlier, the Hindustan Times reported that the company was in discussions with private-equity players including Cerberus Capital and Texas Pacific Group to place a joint bid. TTAC didn’t believe the story. According to AFP, Mahindra & Mahindra said they “have to assess how to finance our mergers and acquisitions in times like these.” So the ball is back in China. Or outfield.
Changan expands Volvo range. Unfazed by the discussion about a possible sale of the Volvo mark, China’s Changan announced they want to widen their range of Volvo cars. They refused to comment on a newspaper report that Changan might acquire the Swedish brand. They want to build higher end cars, without naming specific cars, Gasgoo reports.
Dongfeng whips up a storm: Dongfeng (“East Wind”,) one of China’s top three automakers, said they expect to end the year with more than 1.1m units sold, says Gasgoo. Dongfeng has recently been named as a bidder for Volvo and even for GM as a whole. On Wednesday, shares of Dongfeng went up by nearly 20 percent, and JPMorgan Chase cashed in by selling 1.61m shares of the automaker. JPMorgan Chase used to own 10.04 percent in Dongfeng. Now they are down to a mere 9.9 percent. Still a chunk sizeable enough to keep an active interest in the company. JPMorgan had been named as an actor in the Volvo soap.
German makers want to suckle too: Looking longingly across the Atlantic, German automakers are asking: “And where’s our money?” They are asking Brussels for between €20m and €40m in loans for the purpose of building greener cars, Automobilwoche (sub) says. Background: Money for good causes such as the environment would be legal in Europe, subsidies aren’t. The CO2 targets have been watered down and are easy to meet. However, VDA-President Anton Wissmann calls the targets “barely bearable.” The new rules push Germany’s makers “to their limits.” He also sees a good side: The new rules will help “German makers to lead the market of environmentally friendly cars.” Hint to Brussels: Give us the damn money, and we’ll blow those cubic-inch-happy Yankees out of their murky waters.
Germany way ahead of the Americans. Not so, say the Germans: Michael Glos, Germany’s Minister of Economy, also thinks the German auto industry is way ahead of the Americans. And that’s why the German auto industry won’t need and won’t get any government money, if Glos can help it. “Our makers have a huge technological advantage over the American competition. That advantage is worth much more than $40b,” Glos said according to Automobilwoche (sub.) The makers see it different. VW CEO Winterkorn is worried about a crisis, “which could turn into a wildfire.” Germany’s auto makers want money from Brussels. And from Berlin. If they don’t get it, soon there will be an unfair trade case before the WTO.
Geely cuts back, raises targets: Geely, one of the largest home-grown Chinese auto markers, announced sweeping cut-backs. They trimmed 22 administrative divisions down to 15, reduced 25 tier-1 companies to 19, and closed five tier-2 companies. While they were cutting back, they increased the sales target for this year by 25 percent, they also raised the productivity of the workforce by up to 30 percent, Gasgoo reports.
Under water? No problem! Hoteliers in Venice, trying to lure tourists to the canal city despite floods caused by the highest sea levels in over two decades, are offering special “High Water” packages complete with free rubber boots, reports Reuters. It is not true that the German government will hand out free rubber boots to car manufacturers and suppliers that are under water.
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