While America Slept. Thursday, February 12th 2009
HUMMER sold to China? General Motors Corp., working to sell assets to help keep $13.4b in US loans, has drawn interest in its HUMMER brand from a Chinese company and a private-equity firm, says Bloomberg [via Gasgoo]. The pace of negotiations has intensified in the past few weeks, said the people, who wouldn’t name the suitors and asked not to be identified because the discussions are private (so there). More meetings are scheduled this week. According to Bloomberg, “unloading the sport-utility vehicle unit would move GM closer to the goal of showing its future viability to the U.S. Treasury by Feb. 17. If the biggest US automaker can’t prove its ability to return to profit, it could be told to give up the loans or use the cash for a government-funded bankruptcy.” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, estimates Hummer might fetch $100m or less.
Fallout in Japan: The major production cuts being implemented by Japan’s carmakers are beginning to seriously hurt the finances of their parts suppliers, the Nikkei [sub] writes. Autoparts suppliers and other firms in the industry employ a total 670k workers in Japan, nearly four times as many as those working at domestic carmakers. Says the Nikkei: “If many of them fail, the industry itself could become unsustainable.”
More fallout in Japan: A shed load of no good is spreading from declining automobile sales through a wide range of industries in Japan, spilling over to non-life insurance companies and consumer lenders, the Nikkei [sub] reports. Major non-life insurers rely on auto insurance for roughly half of their earnings. Their premium revenues are forecast to decrease for a second consecutive year. Meanwhile, companies offering auto loans (yes, they still give loans in Japan) are also having a tough time. Total auto loans handled last month by Toyota Finance Corp. are believed to have dropped nearly 20 percent from a year earlier.
Ghson gloomy: Renault posted a 79 percent drop in full-year net profit due to the collapse in demand for autos and offered no financial forecasts for 2009, the Nikkei [sub] says. Renault targets positive free cash flow in 2009 by cutting inventories, suspending its dividend, reducing capital expenditure and fixed costs, and wringing more synergies from its alliance with Nissan. Chief Executive Carlos Ghosn gave a gloomy outlook for global sales this year. Ghosn, who is also president of the European Automobile Manufacturers’ Association, said that if demand continued to drop at the same rate as it’s fallen so far this year the world market could end up below 50m vehicles in 2009, compared to 69m in 2007.
We don’t hire: As part of urgent workforce cuts at home and abroad, Nissan plans to hire only a few dozen graduates in spring 2010, compared with 582 this spring, the Nikkei [sub] reports. Nissan seeks to slash 12k domestic jobs by the end of fiscal 2009, including 4k full-time positions. Honda will hire only 890 new graduates in spring 2010, down 40 percent from 2009 and the first drop below 1k in four years, the Nikkei [sub] says.
All you can eat Passat: SVW, one of Volkswagen’s two Chinese ventures, will launch a new Passat in the second quarter of this year, Gasgoo reports. The revamped Passat model, code-named B6.5 inside, will share the PQ46 platform with FAW-VW’s Magotan. By lengthening the wheelbase and bodywork, the revamped Passat will be longer than the Magotan. The Magotan, based on the original new Passat B6, was introduced by FAW because SVW wanted to stick to its B5 model. SVW reportedly will launch an all-new B-class car Skoda Superb in the second half of this year. The new Superb will also be produced on VW’s PQ46 (B6) platform, and is also expected to be longer than its European version. Welcome to VW in China.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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