Chinese High-Rollers High On Rollers

(First published in TheTruthAboutCars on November 2, 2008)

It’s not yet that Chinese mothers admonish their one-and-only child to “eat up, there are children starving back in America.” But it’s getting close. Case in point: This weekend, another Rolls-Royce showroom opened in Shenzen, Gasgoo reports. It’s the seventh Rolls Royce retail location in China. Another one, located in China’s industrial center Ningbo, will open its doors in a few months. Rollers are on a roll in China. I counted two Phantoms alone in the underground garage of my Beijing building.

At the Shenzen opening, Rolls presented their new Rolls-Royce Phantom Coupé to the Chinese public. It’s their entry model. “Nearly two-thirds of Coupé customers worldwide have not owned a Rolls-Royce before,” said Jenny Zheng, Rolls-Royce Motor Cars’ General Manager for Greater China. BMW are thanking their lucky stars…

While Rolls-Royce’s parent BMW saw its global sales slide by 15 percent in September, Rolls flipped their Emily at the flagging economy, and increased sales by seven percent in the same month. Year-to-date, Rolls-Royce sales rose a record 43 percent year-on-year. Granted, that total was only 827 cars. But in this economy, every car counts. Especially as each example retails at $415k base - and no true Roller proprietor will get caught in a riff-raff reeking base model. “There’s been an 80 per cent increase in the number of vehicles sold this year with some form of bespoke element,” says the British Autocarmagazine with the appropriate nasal accent. Not surprisingly, sales in the United Arab Emirates are up by around 70 per cent. China? Fifty percent rise.

You think it’s a fluke? Further in the same vein(ity), New Delhi’s Financial Express reports “that Mercedes Benz India has registered an impressive 47% growth in car sales for the first 10 months of the current calendar year.” Sales of C-class Benzes more than doubled. Holy cow! And by the way, Time Magazine already said two years ago that Chinese children are getting fat.

(Picture courtesy Kaeyau. Thank you!)

Old News Of The Day: Toyota Tops GM

(First published in TheTruthAboutCars on November 1, 2008)

“Toyota Motor Corp. trumped General Motors (GM) in total car sales during the first nine months of 2008 to become the world’s top car producer for the first time,” the Mainichi Shimbun reports from Tokyo. “Huh,” say you, “hasn’t ToMoCo trampled GM already?” Not exactly, and not officially. But they are kicking ass and GM to the bottom. Unstoppably, one may add.

“GM’s sales between January and September in 2008 were down 5.8 percent to 6,655,751, according to figures released by the company on Wednesday. Toyota’s sales for the same period, including those of subsidiaries Daihatsu Motor Co. and Hino Motors, were 7,051,029, almost unchanged from last year,” writes the Tokyo broadsheet with a kuso-eating grin on their faces, in the same sentence dispelling rumors that ToMoCo had contracted the galloping auto trade tuberculosis. [NB: Mainichi is one of the top three Nipponese papers,thick with Japanese politicos. Two of Mainichi’s CEOs became Prime Ministers of the Land of the Rising Corolla.]

Officially, and unbelievably, GM is still the world’s largest automaker. The official score keeper of all things auto is the oddly French-named “Organisation Internationale des Constructeurs d’Automobiles,” better known as OICA. In OICA’s 2007 tally of units sold, GM had edged-out Toyota by 800k units, and by creative bookkeeping, such as counting sales of companies where they had only a minority share. Immediately, Toyota shouted “foul!” (Politely.) They pointed to 9,497,754 units Toyota had made (as in produced) worldwide in 2007, versus 9,349,818 made by GM. Be it as it may, in the world according to OICA, GM is still the top dog until the fat lady sings the aria of the 2008 numbers.

With a deep bow towards Detroit, the Mainichi scribes now rub it in slicker than a Tokyo oily massage: “And while GM just beat out Toyota in total sales over 2007 as a whole, good first half figures and a relatively soft blow from the economic crisis compared to its American rival mean that Toyota is set to take the top spot this year.” You bet your ketsu they will.

(Picture courtesy of pictures.businessweek.com. Thank you!)

VW Profits Up 15%; China’s Automakers Also Doing Well

(First published in TheTruthAboutCars on October 31, 2008 )

VeeDub in Germany has just issued their numbers for the past nine months of 2008. Viewed through the prevailing “the world is coming to an end” perspective, VW’s financial results are financial pornography, performing better than the male lead in a Russ Meyer movie. We’re talking a 15 percent gain, a money shot of more than $6b pretax. From January to September 2008, VW moved 4.8m units and grabbed a 10.1 percent share of the world market, according to the usually reliable Automobilwoche [sub]. Despite of what’s happening elsewhere in the piston business, Volkswagen’s CFO Hans-Dieter Pötsch stands by his bullish guidance for 2008: the predicted numbers will ... come.

Elsewhere, China’s automakers have also released profit reports for the third quarter. From July to September, the 17 companies combined automotive revenues totaled 47.385b yuan ($6.93b), down a mere 2.9 percentage points from last year. Their net profits drooped to 747m yuan, down - oops - 62.4 percent year-on-year, laments the government’s news agency Xinhua via Gasgoo. Never mind. Profits aren’t a Chinese company’s main objective; they often leave that to their presence in Hong Kong, where taxes are low. The notable news: they ain’t losing money.
That said, China’s bad boys are from Detroit’s central casting: China’s former car giant Shanghai GM has completed only 54 percent of its 2008 sales goal. In a wise move, the joint venture reduced this year’s sales target of its Chevrolet brand by 25 percent. Likewise, big cheese Chinese automaker FAW reduced 2008 targets for its Magotan (think VW Passat B6 platform) to 70k units from the 90k target set in January. Which didn’t faze Wolfsburg one bit.

(Picture courtesy of alexisgentry.net. Thank you!)

VW’s Martin Winterkorn To World: “Don’t Panic!”

(First published in TheTruthAboutCars on October 30, 2008 )

“Was uns nicht umbringt, macht uns härter.” What doesn't kill us, make us stronger. Martin Winterkorn may not have quoted Friedrick Nietzsche in his speech at the International Zulieferer Börse (IZB), related to us via Automobilwoche [sub]. But the CEO of Volkswagen’s theme was clear. “Don’t panic!” Winterkorn said (in German). VW will emerge from the crisis “stronger than ever.” Winterkorn pointed to growth markets such as China– which did little to calm suppliers’ fears (unless they were Chinese). “In China, 100 million people have a driver’s license,” VW’s capo di tutti capi said. Correct. “Only 10 million have a private car,” he added.

Wrong. Matter of fact, nobody really knows how many private cars there are in China. Gasgoo.com once had two numbers in the same article: “The total number of private cars in China jumps 32.5% to 15.22 million units by the end of 2007,” Gasgoo wrote. A paragraph later.. “35.34 million are private cars, an increase of 20.8% from one year earlier.” It’s easy to get confused in China. But if VW, China’s largest auto manufacturer doesn’t know the market’s size, who does? OK, now you can panic. [NB: the IZB is an ingenious cost-cutting measure of VW Purchasing whereby parts suppliers meet in Volkswagen's Autostadt-- and pay for the privilege.]

(Picture courtesy of msnbcmedia4.msn.com . Thank you!)

China’s BYD EVs Headed to Europe. Then Stateside. Allegedly.

(First published in TheTruthAboutCars on October 29, 2008 )

While TTAC has Tesla on a Death Watch, aspiring Chinese EV-automaker BYD is getting massive street cred in The People’s Republic. In case you’ve got something called a life, BYD stands for “Build Your Dreams.” Since late September, “BYD” also stands for “Buffet’s Yankee Dollars.” Omaha’s Oracle liked the company so much he wrote a check for $230m for a 9.89 percent stake. [NB: Buffet knows the tax consequences lurking in a CFC-- and we're not talking chlorofluorocarbons.] Based in Shenzen, BYD is one of the world’s largest manufacturers of rechargeable batteries for cell phones. According to The New York Times, “the company also has a fast-growing auto-making unit that accounts for nearly a third of its revenue and makes fuel-efficient compact and subcompact cars for the Chinese market.” They have some bitchin hybrid and plug-in cars in the works with specs that scare the BYDickens out of the competition– if they’re half true.

Today's BYDispatches:

1.) Gasgoo reports that BYD is on course to sell 200k automotive units this year; double that next year. The F0 model (a clone of the Toyota Aygo/Citroen C1/Peugeot107) just made the Top Ten in China. The company will soon begin selling its first electric hybrid car in China, followed by an all-electric vehicle that could go 300 kilometers on a single full charge. [ED: or not.] The biggest break-through: fast-charging in 15 minutes to 80 percent capacity.

2.) Reuters reports that BYD has signed up 10 distributors for its plug-in hybrid car in Europe ahead of its targeted entry in 2010. Fleet buyers including Deutsche Post AG’s delivery arm DHL Express have indicated initial interest, or so BYD says. Henry Li, General Manager of BYD Auto’s export trade division is electrified by the news. “We’ll start selling in Europe before we get into the United States.”

3.) Motorauthority says that BYD hybrids and plug-ins will definitely be on sale in the U.S. in 2010, after BYD is done “talking to some third-party consulting and engineering companies to get a thorough understanding of the safety standards” in the U.S. Good thinking.

(Picture courtesy of Huffingtonpost. God knows where she got it from. Thank you all the same!)

They Are Starving In China - For Gas Guzzlers

(First published in TheTruthAboutCars on October 25, 2008 )

Last Thursday, the cargo ship CSCC Shanghai left Ventura County’s Port Hueneme with a load of near-extinct species bound for Shanghai, China: 2,100 GM big bore Buicks and Cadillacs. A lot of cargo space was also taken-up by gas-gulping Cadillac Escalades. China’s importing the American behemoths like they are going out of style (which, of course, they are). According to China’s General Administration of Customs, SUV imports from January to August surged a whopping 75 percent year-on-year, to 147k units. In fact, SUVs amount for half of the total imported vehicles.(Imported sedans only increased 17 percent.) Even higher gasoline prices and punitive taxes slapped on big displacement vehicles could not suppress China’s appetite for cubic inches. As far as GM’s concerned, China won’t go hungry. GM logistics specialist Don Asdell told the Associated Press that he’s looking at one or two boatloads a month for the Chinese market. Needless to say, there’s more (says so right there).

China will also import more foreign GM technology for domestic production and consumption. Gasgoo reports that GM will bolster its Chinese Buick line with European and American implants. Shanghai GM will use the Delta II platform (think Chevy Cruze) to make its new-generation Buick Excelle. Open source auto intelligence analysts scoured a new car model list recently released by China’s auto industry regulator. They found two new Shanghai GM models, code-named SGM7205 and SGM7241. Further prying revealed that these are longer-wheel based models of the Chinese Buick Regal and LaCrosse, made from the Epsilon II platform (a.k.a. Opel Insignia.) The new models are expected in China’s showrooms by year’s end.

Chinese Car Exports Retreat, Return Under Cover

(First published in TheTruthAboutCars on October 28, 2008 )

For the few past years, European and American automakers looked to Chinese carmakers with hope and trepidation. They hoped the booming Chinese market would lift their worldwide sales. It did. They feared the Chinese would export cars en masse, swamping Europe and the U.S. with cheap vehicles. They did not. For various reasons (crash tests, emissions, the economy), the arrival of the four-wheeled Yellow Peril was a non-starter. What little exports the Chinese managed went to second- or third-tier markets like Africa or South America. Even those are are going down, down, down. In August, China exported a mere 44,400 units, a decline of 22.18 percent month-on-month and 11.29 percent year-on-year. This according to numbers straight from the China Association of Automobile Manufacturers, quoted in Gasgoo, which calls the news “discouraging.”

Chinese companies who had Europe in their sights are holstering their guns. The German trade publication Autohaus reports that Chinese auto maker Geely is back-pedaling from prior announcements of an entry into the European market. With unusual candor, Jie Zhao, Vice President of the Zhejiang Geely Holding Group said: “Our products aren’t ready for the European market. We are realistic. We will not get ahead of ourselves.” According to Jie Zhao, they may reconsider a market entry “after 2010.”

Instead, Chinese exports are happening under cover. Under the cover of your car, to be exact. More and more parts in your American or European car are already made in China. Compared to 2002, exports of automotive products surged twentyfold to $41b last year. With cost cutting and job cutting being the mantra, this is just the beginning. Gasgoo reports that Daimler AG plans to increase its sourcing of automotive components from China nearly eight-fold within four years. The luxury car maker will buy $3.25b worth of car components per year in China, up from the $400m for this year. Will your next S-Class Merc be Made in China? Partly, at least.

(Picture courtesy europeancarweb.com. Thank you!)