Automotive

Japan - With Incentives, Japan Car Sector Is Spinning Tires

Source: The Wall Street Journal, 22 February 2012

Domestic car sales have been shrinking for years because of demographics and the high cost of owning a car. But the temporary subsidies and the tax breaks currently on the table don't address the industry's long-term plight.

Japan's effort to bolster car sales with subsidies after the 2008 Lehman shock was a success. The government is offering eco-car subsidies of up to $1,250 per car from December 2011 through January next year, as well as extending tax breaks on fuel-efficient cars through early 2015. Yet the demand slump that took hold after the March 2011 earthquake has ended and inventories are back to normal after supply-chain disruptions caused by the quake and flooding in Thailand.

China - Europe's first Chinese auto plant opens in Bulgaria

Source: Reuters, 21 February 2012

Chinese automaker Great Wall Motor Co Ltd opened its first European factory on Tuesday as part of its strategy to lift sales in the region. The plant in the Bulgarian town of Lovech will assemble 50,000 units of Great Wall's Hover SUV, Steed pick-up and Voleex city car models and employ 2,000 people when at full capacity in 2013.

Growth in China's once-sizzling auto market fell back last year and European sales are expected to contract this year as austerity and economic uncertainty bite into consumer spending.But China's top manufacturer of sport utility vehicles and pick-up trucks will aim to sell 600,000 vehicles in 2012, up 23 percent, with an export target of 100,000 vehicles.

India - Tata's Jaguar Land Rover Selects China Partner

Source: The Economic Times, 22 February 2012

Tata Motors Ltd. unit Jaguar Land Rover has selected a partner to assemble cars in China, a move that will likely enable it to sell vehicles at competitive prices in a market that is emerging as one of the biggest outside Europe for its luxury brands.

Jaguar Land Rover is looking to China as demand wavers in its traditional strongholds of the U.S. and Europe, where consumer spending has been hit by the economic downturn. Most emerging markets, including China, levy higher taxes on imported vehicles in an effort to boost domestic manufacturing. Auto makers, therefore, look to assemble vehicles locally.

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