Asia News Update - Automotive
Southeast Asia: GM to stop production in Indonesia and Thailand
Source: Reuters, 27 February 2015
GM announced it is going to stop producing GM-branded cars in Indonesia, where its market share is below 1 percent. Additionally, it will stop the production of its Chevrolet Sonic and Spin in Thailand, where GM has a 3-percent market share. In Indonesia, GM will stop production of the Chevrolet Spin by the end of June, and it will close a factory in Bekasi that employs around 500 people. GM’s plant in Rayong, Thailand will be scaled down from its current annual capacity of 180,000 vehicles in the middle of 2015. In addition, GM said it would start a "voluntary separation program" for its 3,000 workforce based in Thailand. GM is facing big competition from Japanese carmakers. Additionally, it said the Spin was unsuccessful because its logistics chain was too complex, which made the car too costly.
The US automaker will continue to sell cars like the Cruze sedan in parts of Southeast Asia, while also shifting its focus to push the “American heritage” of its pickups and SUVs. GM will also continue to focus on Indonesia, but it will cooperate with Chinese partners, including SAIC Motor Corp. The restructuring of GM marks a retrenchment in Asia. While its business in China is growing, GM has problems with other parts of its international operations unit.
Indonesia: President Widodo pledges to back Esemka’s new positioning
Source: Jakarta Post, 27 February 2015
President Joko “Jokowi” Widodo said the government will support the locally made car Esemka as the manufacturer will reposition its business. After a meeting between the president, executives of PT Solo Manufaktur Kreasi (Esemka) and top policymakers the agreement was made the reposition Esemka in the market. Instead of competing with automotive giants, Esemka will produce cars for farming and agriculture purposes. More specifically, Esemka will produce small trucks or pickups with low-capacity engines. Coordinating Economic Minister Sofyan Djalil said, “It’s not feasible [for Esemka] to compete with global automotive giants as we lag far behind them,” he told reporters after the meeting. This is why they should tap a new market segment, such as vehicles for agriculture or inter-village transportation purposes.”
The President agreed with the plans and that it should take small steps. The manufacturer expects to produce around 500 vehicles a month. This would be enough for the company to thrive financially and sustain its production capacity in the long-term. The minister said that the initial capital outlay for Esemka to start mass production would be at least IDR 100 billion. The government will prepare a plan to support Esemka and provide it with incentives.
China: Wanxiang plans to rebrand Fisker as Elux and launch it in mid-2016
Source: Reuters, 22 February 2015
Two anonymous sources said, Wanxiang Group, a Chinese auto parts maker, will delay its planned relaunch of Fisker Karma hybrid sports car until mid-2016. Additionally, it plans to rebrand Fisker Automotive as Elux. Wanxiang hoped to relaunch Karma this year. The sources also said that Wanxiang has not yet determent the final production site, which earlier was thought to be in Finland. The sources also said Wanxiang plans to price the car around USD 135,000, which is almost 20 percent higher than the original price for the Karma in 2012. The design of the car will resamble the original design of the Karma. One of the sources said that the company is spending millions to upgrade the hardware in order to compete with the newer vehicles in the market today.
Wanxiang bought the assets of California-based Fisker Automotive in a US bankruptcy auction in 2014. The car was an early competitor of Tesla Motors Inc. but failed in 2013 despite the backing of the US government and private investors. Wanxiang also acquired the developer and supplier of the car's battery pack A123 Systems, which also went bankrupt. Wanxiang did not respond to the news story.
Citra Lestari, Proton Holding in discussions to create national vehicle
Source: Wall Street Journal, 07 February 2015
Indonesia plans to revive its automotive project halted nearly 20 years ago and has asked Malaysia for some assistance to revamp the car sector. Indonesia’s Adiperkasa Citra Lestari and Malaysia’s Proton Holding Bhd have signed a nonbinding agreement to explore the possibility of developing and making Indonesia’s national vehicle. Both companies agreed to complete a study within six months (if it turns out unfavorable, the project would be dismissed). Abdullah Mahmud Hendropriyono, chief executive of Adiperkasa, said a successful partnership could lead to job creation and help boost the domestic car industry.
Malaysia was the Southeast Asia’s top manufacturer of passenger vehicles until 2003, when Thailand had generous incentives for investors. In 2014, Indonesia overtook Thailand as Southeast Asia’s largest automobile market as a result to the local growing consumer market and Thailand’s political struggle that rattled overseas manufacturers. Abdul Harith Abdullah, chief executive of Proton, said, “Closer ties between both companies will facilitate international and regional investments, spurring more automotive markets activity and economic development.”
China: ZTE likely to invest USD 560 million in wireless charging technology by 2016
Source: Channel News Asia, 12 February 2015
According to a George Sun, a senior executive at ZTE Corp, the company plans to allocate CNY 1.5 billion (USD 240 million) in wireless charging technology for automobiles in 2015 and over CNY 2 billion in 2016. Sun also said the firm has signed deals with over 20 cities in China to offer wireless charging technology for public transportation. No further details were disclosed. Sun noted “So far the feedback (from local governments) is very, very positive. We solved the biggest headache of electric car charging for local government.” ZTE will likely conduct pre commercial trials of wireless charging for public transportation in 50-100 cities this year.
The technology saves space, permitting authorities to install it in bus terminals or car parks, even though the costs of wireless equipment are higher than traditional charging facilities. In order to reduce pollution, China has introduced aggressive targets for car fuel efficiency that will rise increasingly strict until 2020. Local authorities have offered tax reductions for eco-friendly vehicles and proposed extending subsidies, mostly for local producers, to assist car manufacturers meet these goals. On January 2015, ZTE said its profit for 2014 was likely to increase 94% due to its high-speed 4G network division and smartphone business.
India: Car sales increased by 3.2% y/y in January 2015
Source: The Wall Street Journal, 9 February 2015
In January, India’s sales of passenger vehicles retreated to a slow pace as a result of the rollback of excise tax breaks and year-end discounts. According to data provided by the Society of Indian Automobile Manufacturers, sales of new vehicles, sport-utility cars and vans rose by 3.2% y/y to 230,619 units in January 2015. Of the 13 vehicle manufacturers, 9 reported a decrease in sales. In December 2014, sales growth of 12% was registered. SIAM Director General Vishnu Mathur said December’s strong results was due primarily by consumer concerns that local authorities would permit the tax break, a cut in factory-gate taxes on vehicles, to expire at the end of month.
Furthermore, price discounts offered be manufacturers to clear year-end stocks bolstered demand in December. SIAM Deputy Director General Sugato Sen noted vehicle sales may continue muted in February and March consumer expect authorities to cut taxes across industries, such as the automobile sector, in the federal budget to be presented later this month. SIAM reiterated its forecast for passenger car sales to increase up to 5% this fiscal year through March. In the first 10 months of the year, sales grew by 3.6% to about 2.13 million units. Medium and heavy commercial vehicle sales rose by 37% in January to 21,363 vehicles as a result to rising freight movement and a rebound from last year’s sluggish sales.
Southeast Asia: Indonesia set to take regional crown as it narrows auto output gap with Thailand
Source: Reuters, 29 January 2015
Indonesia narrowed the auto output gap with Thailand to its smallest ever last year in percentage terms and is expected to overtake the Thai industry within the decade. In particular, auto production in Indonesia increased by 7% in 2014 to 1.30 million vehicles while Thai output fell by 23% to 1.88 million. This means that Indonesian output was 69% of the Thai total, compared with 43% in 2012. Indonesia has already surpassed Thailand as the region’s largest auto market, with President Joko Widodo having lured General Motors Co, Tata Motors Ltd and others to build plants there.
According to Ipsos Business Consulting manager Chukiat Wongtaveerat, this will help to push Indonesia past Thailand in output within the next seven to 10 years. However, the Thai auto production is expected to rebound, with a spokesman for the Federation of Thai Industries’ Auto Industry Club indicating that output would increase 17% this year to 2.2 million vehicles. "Even when Indonesia overtakes Thailand's automotive production output, Thailand will still be a dominant player, with its component manufacturers providing many of the parts required by the assemblers in Indonesia," Chukiat said. "The challenge for Indonesia is to raise the quality of its product to be suitable for the global market, and to develop its domestic supply chain to match the quality of Thailand."
India: Mahindra raids auto part makers to counter counterfeit products
Source: Reuters, 29 January 2014
Mahindra & Mahindra, the leading utility vehicle manufacturer in India, has conducted raids across six auto spare part markers and sales outlets in the country in an effort to counter the growing threat of counterfeit products. The company said in a statement that they had seized more than a thousand items from raids conducted jointly with the police at shops, traders, packing and manufacturing units in Northern India. Commonly duplicated parts include air filters, oil filters, pressure plates and clutch plates. Counterfeit packaging and labels were also found.
The biggest concern is safety, since counterfeit parts can wreak havoc in a vehicle, from braking failure to triggering a fire," said Hemant Sikka, chief purchase officer, automotive and farm equipment at Mahindra. "We will actively continue our action against proliferation of these parts in the market," said Sikka, adding that the company also raises awareness among customers about counterfeit products. In September, India’s competition watchdog directed carmakers to make spare parts more widely available in the after sales market, raising concerns that this would increase the production of non-certified generic parts.
China: More auto dealerships quitting their sales networks last year
Source: Bloomberg, 26 January 2015
According to a trade group’s survey, more auto dealerships in China quit their sales networks last year due to deteriorating profits. In particular, the China Auto Dealers Chamber of Commerce found that dealers of Honda Motor Co.’s premium Acura brand were the least satisfied, while Volkswagen AG’s Audi ranked first. The group said that the number of vehicles sold at a loss rose. The decline in profitability among dealers “not only threatens the survival and development of auto distributors, but more importantly affects the prospects of the auto manufacturing industry and ultimately the interests of consumers,” the trade group said in a statement accompanying the survey.
Dealerships in China have requested financial support and lower sales targets from manufacturers after a combination of rapid expansion of sales networks and over-reliance on new-vehicle sales hurt profits. Volkswagen recently issued an e-mailed statement saying that they had reached an agreement with its dealers of imported models. The company will continue to set reasonable sales targets as part of its strategy to ensure a financially sound distribution network. Volkswagen is currently the largest foreign carmaker in China.
China: Volvo to be the first direct exporter of Chinese cars to the US
Source: International Business Times, 16 January 2015
Volvo will be the first worldwide automaker to export cars from its Chengdu manufacturing base in China directly to the US. Around 1,500 of Volvo S60 Inscription are expected to be sold in the US. This version is expected to be successful as it possibly is an extended version of the luxury sedan of Volvo, with a stretched wheelbase and an additional 3.4 inches of rear legroom. Also, S60 Cross Country will be launched in the US market. Further, China has surpassed the US as the biggest car market, and it is where most carmakers produce and sell vehicles. However, Volvo is the first to move away from that strategy.
US consumers have spent USD 426 billion on exports from China in 2014, which is a 6% year-on-year increase. The Asian carmakers such as Toyota and Hyundai are currently holding 45% of the auto sales in the US. Over 70% of autos sold in the US by Asian automakers are manufactured at North American factories. IHS Automotive analyst Ian Fletcher claims that the current Asian automakers in the US require shorter supply chains and find shipping costs from Asia expensive. He expects that Volvo’s new strategy will not be followed by others directly, but will see inexpensive Chinese cars finding a place in the market with a certain brand presence.
Australia: Large automakers record sales drop amid an increasingly competitive environment
Source: Financial Times, 15 January 2015
Large automakers in Australia are cutting prices and introducing new models in an attempt to change an alarming decline in sales. General Motors’ Holden and Ford are relying on sturdy pipelines of novel products to staunch declining sales, which in 2014 reached record 20- and 48-year lows. Furthermore, Japanese automakers have slashed prices right before the phasing out of tariffs on most Japanese vehicle exports, under the new Australia-Japan trade agreement that came into effect on 15 January 2015. For instance, Toyota has cut prices on its Japan-produced cars by up to 5%; Subaru cut up to 25%; and Mazda with more humble cuts. Additionally, the weak Japanese yen against the Australian dollar further aided these cuts. The sharp price slashes highlights the competitive car market in Australia, where 350 models were sold by 67 automakers in 2014.
Toyota, Ford and Holden have announced that their car production in Australia will be ended by 2017. Holden’s director of sales Peter Keley believe that this will give the company more flexibility in product choice and help the brand to revive its leading market position by 2020. Moreover, the historically dominant industry players have lost market share to new Asian carmakers and luxury producers entering the Australian market. As a result, eight out of ten largest automakers recorded sales plunges in 2014. According to Richard Johns at Australian Automotive Intelligence, Holden and Ford will see big challenges ahead as they are phasing out their domestically produced and best-sellers, while Toyota will be in a better position as it will keep its top-selling product.
Asia: Ford records sales surges by 5% across ASEAN and 31% in Malaysia
Source: The Star, 12 January 2015
Ford has announced that it posted record sales in Malaysia with a 31% year-on-year increase to 13,938 units sold, with overall sales for ASEAN increasing over 5% to 100,824 units. Furthermore, an increased market share in Thailand and record performances in the Philippines, Malaysia, Vietnam, Myanmar and Cambodia, were also key drivers behind the overall surge. In addition, the Ford Ranger boosted the ASEAN sales as well, as it was the best-selling pickup truck in 2014 in the Philippines, Cambodia, Vietnam and Myanmar and second-best in Malaysia. The sales of the ranger gained 10% year-on-year to 50,190 units. Additionally, the launch of the new EcoSport compact urban SUV aided sales, as it was the second best-selling car in Thailand, Vietnam, the Philippines, Indonesia and Malaysia, with sold units of 18,149.
Thailand remained as the biggest market for Ford’s overall sales with 38,087 units, with a 0.5% increase in market share to 4.4% in 2014. Furthermore, the Philippines recorded a sales increase of 53% to 20,341 units. Vietnam saw a sales surge of 71% to 13,988 units, driving Ford’s full-year market share to 8.9%. In addition, the carmaker posted substantial rises in the emerging markets of Laos, Cambodia and Myanmar, with combined sales increasing 31% to 2,161 units. Lastly, Singapore sales increased 14%.
Vietnam: Car sales see major growth; foreign brands benefit the most
Source: Asia One Business, 29 December 2014
Car sales are booming in Vietnam. The lower interest rates and inflation, as well as the growing purchasing power of consumers are driving demand for cars. But, imported cars gain the most benefit from the increased demand. More and more consumers upgrade from a motorbike to a car. In January to October, 121,600 cars were sold; an increase of 40% y/y. Domestic car manufacturer Truong Hai Auto Corporation reported a sales increase of 50% in the same period. Toyota reported an increase of 20%, and many other foreign brands also reported sales increases in the period.
Since Vietnam’s local automotive manufacturing industry is not fully developed it is facing though competition with foreign imports. Also the supporting industry for car manufacturing is lacking behind with only 5% to 25% of local content for the component industry being used in local assembled cars. The government released a master plan, encouraging local manufactures to adopt advanced technology and cooperate with international manufactures. It set a goal of 65% of components locally made by 2035. Car manufactures are saying the infrastructure is lacking and there aren’t enough financial incentives. Ford Vietnam said it is 20% more expensive to produce a car in Vietnam than to import it. Hence, skepticism remains about the effectiveness of the new government plan.
India: Sri City to build nation’s next auto hub
Source: Auto Car Professional, 29 December 2014
The recently elected Chandra Babu Naidu formed the first government in the recently created state, Andhra Pradesh. Naibu is known as an industry-friendly chief minister and is positioning Sri City as a new industrial destination, especially for the automotive industry. In September Naibu attracted Hero MotoCorp by offering more perks than a competing Indian state. Hero MotoCorp made an INR 22 billion investment in Sri City for its manufacturing facility.
The government is also in talks with various auto component makers from Japan. The Japanese companies are showing interest since Isuzu is already building a plant, which will begin operations by early 2016. The facility will have an initial production capacity of 50,000 units a year that will be scaled up to 120,000 units. It will also have modern machinery to be on par with its other facilities worldwide. Japanese companies and institutions, which included major automotive players, have recently visited the state as well. Additionally, various companies are opening facilities in Sri City. Hence, the area is expected to continue its growth.
China: Hyundai to open two new manufacturing plants
Source: Automotive News, 30 December 2014
Hyundai forecasts the Chinese car market will continue to grow despite slowing economic growth. The two new manufacturing facilities will be operational in 2016 and 2017, and have a capacity of 300,000 units each. Hyundai’s affiliate Kia will also expand in China by raising the capacity of one of its factories to 450,000 from 300,000 by 2016. By 2018, both companies expect to have production capacity of 2.7 million personal and commercial cars, up from 1.95 million in 2014.
The new facilities would also compete with Volkswagen and General Motor. VW recently announced it will increase its capacity at its Chinese factories to more than the previously targeted 4 million autos a year by 2018. Also GM will invest more in China up to 2018 by opening five vehicle assembly plants worth USD 14 billion. It will support annual sales of around 5 million cars and trucks in China.
South Korea: Visteon’s operations in the country to sell for USD 3.6 billion
Source: Reuters, 18 December 2014
Visteon Corp, the US-based auto parts producer, has entered into an agreement with South Korea’s private equity firm Hahn & Co and the South Korean tire producer Hankook Tire, to sell all of its 70% stake in Halla Visteon Climate Control Corp for USD 3.6 billion. The sale is part of a strategy to focus on in-car electronics as Visteon has been pressured by its hedge fund investors to streamline its businesses. Hahn & Co will buy 50.5% stake in Hall Visteon while Hankook Tire will hold the remaining 19.49% stake for USD 984 million, as it wants to broaden its portfolio. On 18 December 2014, Hankook Tire and Visteon Climate control gained 3% on Seoul trading.
The South Korean unit of Visteon produces cooling and heating systems for vehicles and was originally created in 1984 through a joint venture between Ford and Korea’s Mando Corp. Visteon, whose key clients are Hyundai Motor and Ford Motor, will receive KRW 52,000 for each Halla Visteon share. However, there have been concerns from Hyundai Motor of Visteon focusing on profit in the short-term over investments in the long-term. Moreover, the Samsung Securities auto analyst Yin Eun-young says that the sale might result in Hyundai further decreasing its dependence on Halla Visteon.
Philippines: Mahindra to enter auto market as part of Southeast Asian expansion
Source: Indian Autos Blog, 16 December 2014
The Indian automaker Mahindra is to enter the automotive market in the Philippines. The automotive market in Philippines is the fastest growing in Southeast Asia and has recently experienced the introduction of India’s Tata Motors. The Colombian Group (TCG), which has clients such as BMW, Kia and Peugeot, is going to be Mahindra’s distribution and importing partner in the country, according to Inquirer. The automaker’s introduction into the Philippine market is likely to occur within the next few months, with Mahindra Bolero being the first auto available under the name Enforcer.
The Enforcer will be offered as passenger variants and as single and double cabs. The passenger variant will also be provided as police patrol cars in the country. Furthermore, the Indian automaker is also considering entering additional markets in the Southeast Asia region. The chief executive of Mahindra’s Automotive Sector Pravin Shah has stated that the Southeast Asia market is unquestionably part of the automaker’s global plan, where the brand is also to target the Indonesian automotive market.
Vietnam: Domestic automakers enter into a strategic alliance
Source: Vietnamnet, 19 December 2014
Vietnam’s major companies in auto production and assembling, who also are members of the Vietnam Association of Mechanical Industry (VAMI), are entering into an alliance including Vietnam Engine and Agricultural Machinery Corporation (VEAM), Saigon Transportation Mechanical Corporation (SAMCO), Vinamotor, Truong Hai Automobile, Z179 Factory, Vinaxuki and the mechanical engineering developer MDC. The new Automobile Committee under VAMI will back the members with the aim to develop the automotive and supporting industries with a focus on trucks, sedans, passenger vehicles and specialized vehicles. The VAMI deputy chair Dao Phan Long announced that 50% of auto parts could be domestically produced. Vinaxuki general director Bui Ngoc Huyen said that the Vietnamese automotive market wants to reduce the reliance on foreign automakers by making its own automobiles.
However, the new alliance’s success will depend on support from the state, as the Vietnamese companies are poor in capital, technology and branding. Moreover, analysts are concerned about the companies’ ability to persuade the government agencies about their plan’s feasibility. Huyen recognizes that the Vietnamese automobiles cannot be marketed yet as they are hindered by high taxes and fees. The state has been requested to relieve 50% of luxury tax for sedan producers with a localization ratio of 50%. This has been accepted by the Ministry of Industry and Trade, but rejected by the Ministry of Finance. The state agencies that are not supporting are still not confident in the enterprises in Vietnam. In addition, Vietnam will by 2018 implement a zero tariff policy to all imported autos from ASEAN nations. Vietnam automobile imports totaled USD 1.1 billion for the first 10 months of 2014.
India: Leading car manufacturers record higher November sales
Source: The Wall Street Journal, 01 December 2014
Some of India’s top car manufacturers recorded improved sales for November 2014, marking a sign for revival in the country’s demand. The biggest carmaker by volume, Maruti Suzuki showed an increase in sales in November 2014 by almost 20% to 110,147 vehicles year-on-year, while the second largest producer Hyundai surged 8.7% to 54,011 vehicles year-on-year in its November 2014 sales. The surge in demand has been boosted by the companies’ latest models: Maruti Suzuki’s Ciaz, Alto and Celerio hatchbacks, and Hyundai’s Excent compact sedan and i20 Elite hatchback. Additionally, the improved consumer sentiments and falling prices in local fuel and global crude oil have also driven demand.
Over the past fiscal years in India, sales have dropped due to stagnating economic growth, high prices of fuel and expensive loans, but the November 2014 sales have shown a changing outlook for the market. Furthermore, sales for Honda and Toyota in India for vehicles rose 64% to 15,263 and 11% to 14.134 vehicles year-on-year respectively. In addition, Tata Motors passenger vehicle sales also increased by 16% to 12,021 autos. Meanwhile, India’s biggest sport-utility vehicle maker recorded a drop in sales by 18% to 13,765 vehicles.
Thailand: Eco-car scheme to revive automobile industry in 2015
Source: The Bangkok Post, 02 November 2014
Thailand’s industry minister Chakramon Phasukvanich announced that the country’s automotive industry is to go through a transitional phase in the beginning of 2016 following the new excise tax and car manufacturers starting the production under the second stage of the eco-car scheme. The output in 2015 is expected to record 2.2 million vehicles, improving significantly from the forecast in 2014 of 1.9 million. Moreover, as farmers will be aided with a THB 1,000 handout and novel projects will be implemented, economic growth in 2015 is expected to range from 3-3.5%.
Once the new excise tax for vehicles begins in 2016, the retail prices will be cheaper for environment friendly vehicles such as hybrids and eco-cars. The new tax regime will be based on CO2 emissions, fuel efficiency and E85 compatibility, where eco-cars with CO2 emissions below 100 mg/km will be taxed 12-14% instead of the current 17%. Hybrids on the other hand will still be taxed 10%. The nation’s car output is expected by Thailand Automotive Institute to grow by 500,000 vehicles in 2015. Furthermore, for 2014 it is projected that Thailand will produce 2.1 million vehicles regardless of the slow local sales and exports. The output for 10M/2014 recorded a fall by 25.9% to 1.57 million, while domestic sales fell by 36% to 719.171 autos year-on-year and exports dropped 1.25% to 932,365 vehicles.
China: Nissan, Honda report further sales drops, but Toyota bucks the trend
Source: The Wall Street Journal, 02 December 2014
Nissan Motor and Honda Motor recorded a fall in China sales in November 2014 for the fifth straight month, indicating a decelerating Chinese car market following a sluggish economy and intensified competition. The carmakers’ sales in the period dropped 12% year-on-year, representing 116,200 cars for Nissan and 72,973 autos for Honda. Nissan claims the sales were hit by increased competition and slow light commercial vehicle sales amid the weakening Chinese economy. Meanwhile, Toyota Motor experienced an increase by 2.9% to 92,300 autos following the launch of its two improved compact sedans.
According to analysts the sluggish car market in the country has been affected by the tighter credit conditions and economic uncertainties. In October and September 2014, new passenger vehicles sales experienced the lowest year-on-year growth since February 2013 with 6.4%. Japanese carmakers are especially having a challenging outlook, as their retail sales have shown a slower growth than the overall industry since April 2014. Japanese car sales in China started to drop two years ago due to the territorial dispute between the countries, but it improved after the Japanese automakers introduced models adapted to Chinese tastes and giving compensation to owners for damage caused by anti-Japanese demonstrations. Furthermore, the Japanese labels recorded a decrease in passenger vehicle market share from 15.6% to 15.2% year-on-year, while German and US manufacturers experienced growth of 21.1% and 12.8%, respectively. In addition, Nissan and Honda had to reduce their 2014 sales forecasts for China to 1.27 million cars and 900,000 cars, respectively.
Indonesia: Automotive giant Astra supports government fuel subsidy cuts
Source: CNBC, 20 November 2014
Indonesia’s decision to cut fuel subsidies is supported by the country’s largest automobile distributor, Astra International, although it could affect the company’s revenue. The President Director, Prijono Sugiarto believes that reducing fuel subsidies will in the medium to long term benefit the nation’s economy, which will in turn result in an increase in cars and motorcycle sales. He believes the impact of the weakening purchasing power on the automotive market will only be very short term. Moreover, the government reported that there was an approximately 30% rise in subsidized gasoline prices to IDR 8,500 per liter and a 36% rise in diesel prices to IDR 7,500 per liter. An inflation increase to 7.3% this year is also expected.
Astra International has faced challenges with increased competition, a stagnant domestic economy and the effect of the domestic currency’s 21% decrease against the US dollar. Sugiatro is hoping for an improved global economy and is not expecting a turnaround until 2016. He sees the potential in the country’s USD 1.2 million car-market with a GDP per capita of USD 3,500, comparing with China, with a car market of USD 9.7 million when having the same GDP per capita. Furthermore, Boston Consulting Group estimates that Indonesia’s middle class of 70 million will double by 2020. The automotive giant Astra has also entered into other industries including the promising infrastructure sector, mining and palm oil plants.
India: Tesla struggles to sell electronic vehicles
Source: Quartz India, 20 November 2014
Tesla has entered the Indian automotive market, which is to be the third biggest in the world. However, the company has met challenges with selling its luxury electric vehicles in India; its luxury pricing is only engaging a small segment of the car consumers, and the country has been experiencing an energy shortage of more than 42 million kilowatt hours, making electronic car purchases risky. Tesla’s chief information officer Jay Vijayan is still optimistic about the potential in the Indian car market.
The company has been working on a smaller, inexpensive ‘Tesla Model 3’, addressing the price issue and targeting emerging markets. The price of the new model in India will be between INR 1,800,000 (USD 30,000) and INR 2,400,000 (USD 40,000). Nevertheless, it will still be hard to counteract the electricity shortage that makes the electric vehicle sector weak. Furthermore, the Indian electric car-maker Mahindra Reva has been in the market for more than 10 years and is still struggling with only less than 500 sold cars per year. The government’s National Electronic Mobility Mission Plan 2020 includes plans of INR 14,000 crore (USD 2.25 billion) investment into infrastructure construction that are suitable for electronic cars. However, the development has been very sluggish.
China: Daimler targets China for Maybach revival
Source: Financial Times, 19 November 2014
Daimler aims to revive its luxury brand Maybach by targeting Chinese consumers with a global launch in Guangzhou Motor Show on 19 November 2014. The Maybach vehicle is a high-end version of its Mercedes-Benz sedans and seeks to catch up with Volkswagen’s Audi and BMW. China is an important target as it is the biggest automotive market in the world and is expected to surpass US as the largest premium car market by 2020.
Daimler’s board member Hubertus Troska was sent to Beijing in 2013 to supervise operations in China and reduce the longstanding gap between Mercedes and its two major competitors. Troska states that the sales in China rose 30% year-on-year over the first three quarters of 2014, giving the company a new target for China in 2015 to sell considerably more than 300,000 units. He believes that over the next 10 years there will be a 6% average growth in the Chinese passenger vehicle market where Mercedes is planning to catch up. The carmaker is aiming to place Mercedes as a slight premium above the competitors’ respective cars. However, it is unclear if the new positioning of Maybach as a separate S-Class brand will attract the Chinese consumers.
India: Daihatsu to develop small vehicles for Toyota
Source: Reuters, 7 November 2014
As Toyota Motors Corp struggles to remain competitive in the Indian car market, the company has reached a collaboration agreement with Daihatsu. Earlier this year, Yasumori Ihara, VP at Toyota, requested Daihatsu executives to help develop affordable small vehicles suited for its Indian clients. Through Toyota’s sales channel in India, these no-frills cars will be sold. A similar cooperation agreement has been successful for many years in Indonesia. According to a senior Daihatsu executive, Toyota is struggling considerably in India mostly because it utilizes comparably high-quality and high-spec parts for its automobiles there and fails to use cheaper components available from domestic suppliers.
Another senior Daihatsu executives says, “We’re currently looking extensively into why a strategic no-frills car like (Toyota’s) Etios doesn’t sell well in India…. As part of an effort to ready ourselves in case we’re asked to develop low-cost cars formally by Toyota.” No more details were disclosed, however they mentioned Indonesia would probably serve as a model. Experts have stated India is a major car market for the next 10 years. Toyota’s total sales in India for the year to March dropped by 22% to 128,811 cars, surpassed by market leader Maruti Suzuki India Ltd that sold 1.05 million cars. HIS Automotive expects sales of light-cars (below 6 tonnes) will rise solely by 0.2% this year to 3.14 million in India.
Thailand: TAIA advises government to construct regional automotive testing center
Source: Bangkok Post, 6 November 2014
The Thai Automotive Industry Association (TAIA) has urged the government to establish a long-delayed automotive testing center to enhance the country as a regional automotive hub when the Asean Economic Community (AEC) is carried out in 2015. According to Thanawat Koomsin, president at the TAIA, the country is the de facto main car producer of Asean with a maximum annual production of 2.85 million units. As the AEC seeks to strengthen standards in 19 automotive categories, the existing center operated by the Thailand Automotive Institute (TAI) in Samut Prakan can serve only eight categories.
Since October 2012, the nation’s car sector has requested financial support from the Strategic Committee for Reconstruction and Future Development (SCRF) to construct a THB 8 billion facility. As currently domestic car manufacturers need to test their units in India, Taiwan, or Spain (when a new model is launched), automobiles tested at the center would not need further testing in other nations. The TAI proposed three locations in Eastern Thailand for the new facility: Gateway City, Amata City, or Hemaraj industrial estates. Last year, the SCRF noted car manufacturers should also contribute capital for the testing, research, and development center and asked the TAI to examine the feasibility of getting funding from automotive enterprises.
China: Lincoln opens 3 stores, plans to open 65 more by 2016
Source: Automotive News, 6 November 2014
Lincoln has opened stores in Shanghai, Beijing, and Hangzhou – its first three dealerships in China. The firm has also launched its initiative “The Lincoln Way” which is directed for younger and more discerning luxury clients who value individuality. The company has stated it expects to open five additional stores in China before the year-ends and 60 dealerships in 50 cities by 2016. These newly established stores will offer the MKC crossover and MKZ midsize premium sedan. By 2016, the Lincoln MKX, Navigator and a new full-size luxury sedan will be available.
Kumar Glahotra, president at Lincoln, says, “The launch of The Lincoln Way and out first Lincoln stores in China marks an important milestone for Lincoln’s reinvention as a global luxury automotive brand.” The initiative was developed after three years of examining the behavior of Chinese luxury clients and provides buyers with personalized technology, sales, and service. The facilities include a 46” interactive LCD touch screen that allows potential buyers to change the color and features in the selection of vehicles. Clients will also be allowed to schedule personal test drives. According to media reports, the company will invest up to USD 5 billion to strengthen its position within the next 10 years.
India: Tata Motors raises USD 750 million by issuing bonds
Source: The Economic Times, 27 October 2014
Tata Motors has raised USD 750 million from Asian and European investors; this bond issue got six times over subscription at USD 4.5 billion. The firm has priced the 5.5-year bonds of USD 500 million with a 4.625% coupon rate, whereas the10-year bonds of USD 250 million with a 5.750% coupon rate per annum. Earlier this year, it had sold 5-year benchmark bonds totaling USD 300 million with 5.53% coupon rate.
Tata Motors has announced the proceeds from this issue will be utilized to refinance external commercial borrowing, capital expenditure, and for general corporate purposes. Standard & Poor’s rated these bonds as BB, while Moody’s rated these as Ba2. Despite the negative free cash flow overall, Moody’s projects a stable outlook for Tata Motors. The global rating agency added the current fiscal year is crucial as the company’s sales slows and execution risks rises in terms of increased product development expenditures and the launch of foreign manufacturing operations.
Thailand: Auto parts industry forecasted to grow by 10% next year
Source: Bangkok Post, 21 October 2014
According to the Thai Autoparts Manufacturers Association (Tampa), the auto parts sector is expected to grow by 10% in 2015 due to increasing overseas orders. The association predicts the combined sales value for domestic auto parts manufacturers will be THB 400-450 billion in 2014 and will reach THB 500 billion in 2015. Furthermore, the association predicts auto parts supply will be evenly divided between the domestic and foreign markets next year. Atchana Limpaitoon, president at Tampa, noted the depreciating baht against key currencies should assist domestic sales. The domestic car sector also expected to export a total of 2 million vehicles next year.
On another note, the new Switch-Asia program plans to improve the competitiveness of the domestic auto parts sector – which is one of the primary drivers in the local economy. This program, which is key to improve its cost efficiency in the industry, plans to advocate SMEs in Asia to adopt sustainable consumption and output concepts. From 2012 to 2015, the Switch-Asia program has a budget of EUR 200 million; nearly 300 local auto parts SMEs are members.
Japan: Small auto companies continue to prosper
Source: The Economist, 25 October 2014
Mazda, Mitsubishi, Suzuki, Subaru, and Daihatsu are five smaller Japanese auto companies that continue to thrive with the three large firms – Toyota, Nissan, and Honda. These second-tier firms sell from 1 million to 2 million vehicles per annum and are determined to disprove the idea that global scale and large volumes are indispensable. After several years of losses, these carmakers are making decent profits. The biggest exporters among the five, Subaru and Mazda, currently have record sales in North America. Additionally, Subaru now outsells VW in North America as well. As there is currently a falling and greatly unprofitable home market, Daihatsu has relied on Toyota’s support to expand its business abroad.
Even though Japanese automakers are more profitable than numerous enterprises in the sector that may not last as a succession of lean years suggests smaller companies lack cash to invest in new technology. Nonetheless, the Japanese government has supported these companies. Authorities have granted longstanding tax breaks to Suzuki, Mitsubishi, and Daihatsu to manufacture kei cars. In Japan, these tiny cars account for nearly 40% of new-vehicle sales. The largest carmakers, however, have said manufacturing kei vehicles diverts attention and fund from the development of models that have potential to be exported.
Japan: Toyota supplier Denso considers expanding production
Source: Bloomberg, 7 Oct 2014
Denso Corp. has announced that it is now considering expanding production in Japan, which is a signal that Abe’s weak yen policy has drawn back the interest in domestic production. The yen’s decline of 28% in the past two years, which is moderating the trends of dwindling export and deteriorating domestic auto industry, may also boost support for the policy. It is estimated that automakers will add 22 million auto production unites worldwide by 2021 whole the annual output will decrease by more than 1.6 million vehicles in the following 10 years.
Moody’s Corp. estimates that capital spending growth at Japanese companies will decline to 1.3% at the end of March this year, which compares with 12.3% spending growth in fiscal 2012. The currency between the yen and the dollar is at an average of 103.30 this fiscal year. Denso, which is 22% owned by Toyota, has been working on the improvement of productivity at domestic plants in the wake of the global recession, Japan earthquake and the yen’s surge. The company is searching for the companies with distinctive technologies like image processing, which will improve vehicle safety, as the choices of acquisition.
Malaysia: Budget in 2015 spurs manufacturing automation
Source: The Rakyat Post, 11 Oct 2014
According to Malaysian Automotive Institute (MAI) chief executive officer Mohamad Madani Sahari, the automation capital allowance is just up to 200% on the expenditure will benefit manufacturers of energy-efficient vehicles. The Ministry of Science, Technology and Innovation has been injected MYR 1.3 billion to commercialize 360 high-impact innovative products in the next five years. The government also offers MYR 290 million in research funds to support high-impact research, development and commercialization program.
MAI is leading research on electric buses using lithium ion batteries, with the first model expected by January in 2015. And SME Bank is welcomed to establish the sustainable mobility fund of MYR 70 million to develop the electric vehicle manufacturing industry in Malaysia. The expectation of Malaysia to adopt new and sustainable technologies in its automotive industry is demonstrated by the initiative to develop the electric vehicle manufacturing industry.
Thailand: Political crisis and expiring tax break hit car sales
Source: Bloomberg, 8 Oct 2014
Japanese manufacturers in Thailand have been hit by a double whammy of political crisis and an expiring tax break for first-time vehicle buyers, which have raised hesitations on plans of future investment. The influence from the ending of the tax break has intensified this year, which caused auto purchases to soar more than 80% in 2012 y/y. The industry figures of Thailand show that car and truck sales have fallen by at least 30% each month y/y since January.
Toyota’s Thai operation expected that sales by all automakers my fall almost a third to 920,000 vehicles in 2014 y/y, which is more than double the drop that predicted in January. Honda, Mazda Motor and Mitsubishi Motor have all warned of falling sales in Thailand since the anti-government street protests that paralysed parts of Bangkok began last November. The foreign carmakers’ expansion plans are also influenced by the longstanding domestic political crisis, including Toyota’s proposals for USD 609 million of further investment.
Philippines: Motor vehicle sales rise by 26% y/y from January to July
Source: Asia One, 25 September 2014
Philippines has recently been reaching other Asian countries that have more developed auto industries. According to a recent report issued by the ASEAN Automotive Federation, the Philippines increased its motor vehicle sales at least by 26% for the first seven months of the year, in comparison to the same period in 2013 (better than sales growth reported in Vietnam, Singapore, Malaysia, and Indonesia). The report also revealed that the nation has the second-highest growth rate at 23.1% y/y from January to July in terms of motor vehicle output, surpassed only by Vietnam.
Antonio Zara, president and managing director at Nissan Philippines Inc, says, “One can't imagine that our current auto industry is less than a quarter of Thailand's despite a population which is 40% more. I expect significant growth to come from outside Metro Manila." Toyota Motor Asia Pacific Japan Project General Manager Vince Socco believes that the nation will be one of the most valuable automotive markets for Toyota – the country is anticipated to become the third largest market of corporation in Asia, succeeding Thailand and Indonesia. Additionally, BMW executives have agreed that the Philippines will become an important participant in the automotive sector.
China: Tesla plans to open 10-12 stores by the end of 2014
Source: NASDAQ, 26 September 2015
As China offers considerable growth opportunities, Telsa Motors Inc plans to boost its operations in Hong Kong – which the corporation considered to be the Norway of Asia. Even though the company started operating in China this year, it anticipates that domestic sales will be equal to those in the US by next year. By late 2015, it additionally plans to manufacture 100,000 premium electric cars and have global sales of at least 500,000 vehicles per annum.
The corporation has hired a China director and Tesla expects to open from 10 to 12 stores in China by the end of this year. Furthermore, it plans to establish service centers and a Supercharger network for its Chinese clients. Hong Kong clients are expected to charge their electric cars solely once a week as a result that the city solely extends across 10 miles. The electric carmaker forecasts that the nation will account for 30%-35% of its worldwide sales growth this year. By 2017-2018, the company projects to manufacture its vehicles in China as well.
Indonesia: Toyota plans to boost exports by 30% in 2014 and 2015
Source: The Jakarta Post, 23 September 2014
Under its projects to turn Indonesia into Asia’s automotive manufacturing hub, PT Toyota Astra Motor (TAM) reports it will concentrate more on surging exports. Hiroyuki Fukui, president director at TAM, said, “We have around 70 (export) destinations and our exports — combined with that of Daihatsu’s — comprise more than 80% of total Indonesian (automotive) exports.” Fukui added the corporation doubled capacity for its second plant in Karawang, West Java, this year and an engine plant with an output capacity of 216,000 units per annum is expected to start operations by the end of 2015. In H1/2014, Toyota Motor Manufacturing Indonesia (TMMIN) increased its exported by 10.7% y/y to 67,757 CBU units.
For the same period, the corporation also exported more than 20,800 CKD units, more than 30.6 million components, 25,000 engines, and 48,000 cylinder heads. For the first half of 2014, Toyota has exported a combined total of USD 870.2 million worth of cars and components. The corporation plans to boost 2014 and 2015’s exports by 30% on an annual basis. Fukui stated that the corporation would need more tier II and tier III suppliers to become more competitive and meet it’s long-term goal of making Indonesia its output hub. Through TMMIN, Toyota currently operates four facilities in the country with an overall output capacity of 250,000 vehicles per annum.
Indonesia: Mitsubishi Corp considers investing in auto facility
Source: Reuters, 10 September 2014
Japan’s Mitsubishi Corp could invest in a new car plant in Indonesia with its partners, as the nation under the Widodo administration projects to attract investment s into manufacturing and cut it reliance on volatile resources. However, Mitubishi Corp’s Senior Advisor Mikio Sasaki stated that nothing had yet been decided. An individual familiar with the matter said that the chief executive would visit Indonesia this week.
Various corporations from nations such as Japan have shown interest to invest in the automotive industry, as Indonesia is projected to overtake Thailand as Southeast Asia’s biggest vehicle market. The medium term project of these manufacturing corporations looking at Indonesia to build nearly 3 million vehicles by 2020, compared to 1.3 million this year. Mitsubishi Corp could invest up to USD 1 billion to enhance its Indonesian automotive business, according to the Jakarta Post. However, a company spokesman mentioned the amount was incorrect.
Thailand: Domestic political instability will not alter Japanese auto makers’ investment plans
Source: The Wall Street Journal, 12 September 2014
The Japanese Automobile Manufacturers Association chairman, stated that the current political unrest in Thailand will not a restraint on the Japanese automobile manufacturers’ projects to invest in the country. Fumihiko Ike, who is also the chairman of Honda Motor Co, further mentioned that political instability would not alter their decisions as political changes occur almost every year. In addition, the tsunami of 2011 raised concerns that the auto manufacturers would reconsider their expansion projects in Thailand. Domestic car production in dropped 26.1% y/y in June 2014.
In April, Honda announced that it would postpone the construction of a USD 530 million car-assembly facility in Thailand by at least half a year as a result of rapid changes in the car market. In May, Thai Army Chief General Prayuth Chan-ocha ousted Prime Minister Yingluck Shinawatra succeeding months of political instability and street protests that affected the country’s economy. Ike reported that Japanese automobile manufacturers are also considering India and will take the appropriate measures to increase their commitment there. He did not disclose further information.
Malaysia: Vehicle prices forecasted to drop between 1-3% after GST implementation
Source: The Star, 11 September 2014
According to the Malaysian Automotive Institute (MAI), the average vehicle prices are forecasted to drop between 1% to 3% after the implementation of the Goods and Services Tax (GST) in April of the next year. MAI CEO Madani Sahari stated that the agency conducted a price-stimulation to figure out how car prices would be affected by GST. The automobile corporations, not the government, would establish the offering price of cars. The current sales tax of 10% will be replaced by the 6% GST. The multiple tariff level feature of GST is the essential change from the current single-stage sales tax and service tax imposed at solely one stage of the supply chain.
After the implementation of GST, tariff can be levied various times by the producer and retailer – not only once at the end before the product is presented to the customer. Madani reported that it would be useless to wait to purchase a new car until after GST is imposed as a result that an individual would be losing on the resale value of an old car – a vehicle depreciates on average nearly 10% a year. Furthermore, he stated that car prices are anticipated to be more competitive in 2015, as the MAI has expected total industry volume to reach 700,000 cars next year.
India: Toyota dealers most satisfying according to JD Power Asia Pacific study
Source: India Today, 28 August 2014
According to a study by JD Power Asia Pacific, Toyota dealers have been named most satisfying in India with 866 points out of a max 1000 points. Maruti Suzuki, Honda, and Hyundai came second, third and fourth, respectively. This is important because Indians are increasingly considering the reputation of the dealer as a factor when buying, with the study showing an 11% increase from 5 years ago. Also, customers who consider reputation, availability of model and hassle-free negotiation of the dealer, pay on average 4% more than those who choose a dealer for other reasons, such as location.
Other findings show that efficiency is increasing, with time needed to complete paperwork falling from 10 days to 9 days in 2014, and average delivery time falling from 12 days to 9 days in 2014. Average amount of discount has increased 12.4% y/y. Owners who have a sales satisfaction score of over 926 are 1.5 times more likely than those who have a score of below 815, to recommend their dealer to others. Only 15% of owners got their vehicles delivered with a special ceremony, or were asked for their feedback on their purchase experience.
Indonesia/Thailand: Indonesia to overtake Thailand as Southeast-Asia’s biggest car market
Source: Bloomberg, 26 August 2014
With better economic growth and political stability, Indonesia is expected to beat Thailand as the biggest car market in Southeast-Asia for the first time since 2011, with sales in Indonesia to amount to 1.2 millio in 2014, compared to 1 millio in Thailand. This coincides with an increase in vehicle sales of 6.6% in Indonesia for H1, compared to a 40% decrease in Thailand. The slump in Thailand is owed to the recent coup on May 22, which sent the economy close to recession. Whereas, in Indonesia, consumer confidence is at a 20-month high, as President Joko Widodo is expected to lay out economic growth policies.
The recent trends is also supported by other economic indicators. Although the average 2013 income in Indonesia was 30% below those in Thailand at USD 9559, Indonesia’s income growth from 2008 was 12 percentage points faster than in Thailand. Also, Indonesia’s economy grew by 5.17% in 2014 H1, compared to a 0.1% growth for Thailand. Furthermore, vehicle production output has increased by 15% in Indonesia in 2014 H1, compared to a 29% fall in Thailand, for the same period.
China: Government considers RMB 100 billion injection to fund charging stations for e-vehicles
Source: South China Morning Post, 28 August 2014
With demand for e-vehicles limited by the lack of charging stations in China, the government is contemplating a RMB 100 billion investment to build charging stations and encourage growth in clean cars. This fund would lead to an increase in consumer confidence for e-vehicles and also help China, the world’s largest carbon emitter, to tackle pollution and develop an electric vehicle (EV) market, which already composes of BYD and Kandi Technologies. However, further details of the plan are yet to be disclosed, such as the duration of the plan, and whether or not the charging stations will be compatible with cars by US carmaker, Tesla Motors.
In the meantime, Beijing will be excluding new-energy vehicles (NEVs), such as electric cars, plug-in hybrids and fuel-cell vehicles, from a purchase tax, which will come into force next month. Beijing will also be forcing their departments to purchase NEVs as their official vehicle. Furthermore, the government is considering a draft initiative, which will allow non-carmakers to build EVs in an attempt to boost competition. This would allow firms, such as Wanxiang, the owner of Fisker Automotive, to manufacture electric vehicles.
Singapore: Greenlots and BMW Group Asia to set up first electric vehicle network
Source: ABR, 13 August 2014
Singapore’s first Home and Public Charging network will be provided as part of BMW’s 360º ELECTRIC program, which includes services attached to the purchase of every BMW i model: Public Charging, Home Charging, Flexible Mobility, and Assistance Services. The network, based on the Open Charge Point Protocol (OCPP), will be provided by BMW Group Asia in collaboration with Greenlots, a global provider of open standards-based technology solutions for electric vehicle networks. It will be available to both BMW i owners and Singapore EV drivers.
As part of the collaboration, ChargeNow, BMW i’s public charging program, will be administered by Greenlots' open standards based, SKY Smart Charging platform by using the BMW i ChargeNow card and Greenlots mobile app. Greenlots expects to have up to 30 L2 (AC) chargers across 20 public locations by the end of 2014. In order to assist BMW i drivers in locating the nearest available charging point, real-time information will be provided through the car’s navigation system. As for Home Charging, Greenlots will manage and install the BMW i Wallbox Pure at the home or office of customers upon the purchase of a BMW i vehicle.
Korea: Domestic automakers facing competition as import sales grow
Source: Livemint, 17 August 2014
Falling shipments to Europe and an unfavorable South Asian environment led to a decline in car exports to 171,274 in April-July 2014 from 180,332 units in the year-ago period. Hyundai Motor, which accounted for 45% of all cars exported from India in 2013, has decided to shift production for the European market from its Chennai plant to Turkey and the Czech Republic, thus reducing the plant’s exports by 25%. These numbers run counter to the country’s objective to become a global hub for small-car exports.
Meanwhile, challenges in neighboring countries have led to lost opportunities worth around USD 2 billion. Exports to Sri Lanka are barred while Bangladesh and Nepal have become second-hand vehicle markets. With the slowdown in the automotive market, the Society of Indian Automobile Manufacturers (SIAM) has announced that it will miss its annual turnover target, as set under the Automotive Mission Plan (AMP) 2006-2016, by USD 35 million. Facing the abovementioned challenges, companies are now paying greater attention to regions with high growth potential such as Latin America and Africa.
China: Mercedes found guilty of price-fixing
Source: BBC, 18 August 2014
Investigators from the anti-monopoly bureau of Jiangsu Province said Mercedes-Benz has been found guilty of using its dominant position in after-market parts to maintain price controls, according to the official Xinhua News Agency. There has been no mention of the likely penalty yet. On 19 August 2014, a Daimler spokesperson said the company was "unable to comment further on what is still an on-going matter”. A growing number of foreign companies, including in the pharmaceutical, technology and food sectors, have recently come under increased scrutiny, as part of an anti-monopoly crackdown which is leading the European Chamber of Commerce in China to openly wonder if foreign companies are being disproportionately targeted.
In the midst of this campaign, foreign car makers have been particularly hurt, with BMW, Audi and Chrysler all facing sanctions. In addition, Toyota recently said its Lexus division was under scrutiny and General Motors had to respond to requests for information by regulators. Foreign car makers seem to be victims of both their success in China and their pricing strategies. As they still maintain a monopoly over high-end models in the country, they have been able to use Chinese consumers’ thirst for luxury to sometimes charge unreasonably high prices.
China: Mercedes-Benz Sales Service Co. to cut auto spare parts prices
Source: Global Times, 04 August 2014
Luxury car dealers in China have begun to cut prices for spare parts as a reaction to greater competition and antitrust investigations by China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce. Beginning on September 1, Mercedes-Benz will cut another 15% on top of the already 20% reduction for maintenance costs. Price reduction will include about 15,000 different parts.
FAW-Volkswagen and Jaguar Land Rover both plan to lower prices on their car models in reaction to the investigation by the Chinese government. BMW is said to follow suit soon. The Chinese authorities are attempting to stave off monopolies and increase competition in addition to decreasing consumer costs.
India: Tata Motors to “Zest” up revenue with new sedan
Source: Times of India, 01 August 2014
Tata Motors introduced a new, fuel-efficient sedan for the mass consumption in the Indian market. While the majority of the company’s profit comes from the truck and bus market, Tata aims to diversify and begin to compete with Maruti Suzuki, Hyundai, and Honda. With India’s economy slowing to growth below 5%, the truck and bus industry is suffering. Yet, consumer trends set India to be the world’s 3rd largest car market by 2018. Still, Tata’s domestic car sales fell 39% y/y; its market share fell 4.2% and 10.2% from 2 years ago.
The Zest compact sedan is built on a new platform and includes user-friendly features such as touch screen panels. Analysts see the Zest as a step in the right direction, yet they continue to be skeptical about its incursion into the car market. Tata lacks a product pipeline and consumers are turned off to their products because they are mainly used by taxi drivers and their extreme budget car, the Nano, is perceived as a “poor man’s car.” To remedy this, Tata plans to launch 2 new vehicles each year until 2020, as well as focus on fuel-efficient vehicles.
Korea: Domestic automakers facing competition as import sales grow
Source: Korea JoongAng Daily
Korean customs agency says that exports rose 3.8% from last year to USD11.63bil from April to June. Yet with a strong won and an increase of imports of 58.4% y/y to USD1.93bil has hurt Korean auto manufacturers. Additionally, trade surplus of passenger vehicles decreased 2.8% y/y to USD9.7bil due to growth in imports.
Korean automakers have suffered from factory recalls and labor union requirements. Hyundai recalled approximately 883,000 YF Sonatas from the US and Puerto Rico after problems with transmission-shift cables, thus losing more face in wake of inflating its fuel efficiency claims in 2012. As well, Korea currently struggles with labor union agreements regarding base wage increases, which, in turn, lead to increase in retirement pensions and overtime pay. Ssangyong Motor and GM Korea have come to agreements with unions while Hyundai, Kia, and Renault Samsung have not.
China: Mercedes-Benz Sales Service Co. to cut auto spare parts prices
Source: Global Times, 04 August 2014
Luxury car dealers in China have begun to cut prices for spare parts as a reaction to greater competition and antitrust investigations by China’s National Development and Reform Commission (NDRC) and the Ministry of Commerce. Beginning on September 1, Mercedes-Benz will cut another 15% on top of the already 20% reduction for maintenance costs. Price reduction will include about 15,000 different parts.
FAW-Volkswagen and Jaguar Land Rover both plan to lower prices on their car models in reaction to the investigation by the Chinese government. BMW is said to follow suit soon. The Chinese authorities are attempting to stave off monopolies and increase competition in addition to decreasing consumer costs.
India: Tata Motors to “Zest” up revenue with new sedan
Source: Times of India, 01 August 2014
Tata Motors introduced a new, fuel-efficient sedan for the mass consumption in the Indian market. While the majority of the company’s profit comes from the truck and bus market, Tata aims to diversify and begin to compete with Maruti Suzuki, Hyundai, and Honda. With India’s economy slowing to growth below 5%, the truck and bus industry is suffering. Yet, consumer trends set India to be the world’s 3rd largest car market by 2018. Still, Tata’s domestic car sales fell 39% y/y; its market share fell 4.2% and 10.2% from 2 years ago.
The Zest compact sedan is built on a new platform and includes user-friendly features such as touch screen panels. Analysts see the Zest as a step in the right direction, yet they continue to be skeptical about its incursion into the car market. Tata lacks a product pipeline and consumers are turned off to their products because they are mainly used by taxi drivers and their extreme budget car, the Nano, is perceived as a “poor man’s car.” To remedy this, Tata plans to launch 2 new vehicles each year until 2020, as well as focus on fuel-efficient vehicles.
Korea: Domestic automakers facing competition as import sales grow
Source: Korea JoongAng Daily
Korean customs agency says that exports rose 3.8% from last year to USD11.63bil from April to June. Yet with a strong won and an increase of imports of 58.4% y/y to USD1.93bil has hurt Korean auto manufacturers. Additionally, trade surplus of passenger vehicles decreased 2.8% y/y to USD9.7bil due to growth in imports.
Korean automakers have suffered from factory recalls and labor union requirements. Hyundai recalled approximately 883,000 YF Sonatas from the US and Puerto Rico after problems with transmission-shift cables, thus losing more face in wake of inflating its fuel efficiency claims in 2012. As well, Korea currently struggles with labor union agreements regarding base wage increases, which, in turn, lead to increase in retirement pensions and overtime pay. Ssangyong Motor and GM Korea have come to agreements with unions while Hyundai, Kia, and Renault Samsung have not.
Thailand to serve as R&D hub in growing ASEAN auto industry
Source: Pattaya Mail, 14 July 2014
The chairwoman of the ASEAN Automotive Federation, Piengjai Kaewsuwan, has said the ASEAN auto industry will see further growth over the next few years following the regionís overall economic growth. And though all the countries of ASEAN are attracting auto-related investment, Kaewsuwan, who is also president of the Thai Automobile Industry Association, sees Thailand as the regionís R&D and manufacturing hub.
Kaewsuwan has supported this claim by pointing out that Thailand is already home to large R&D investment by such major firms like Nissan and Honda. In terms of manufacturing, the country currently can put out 2.4-2.5 million vehicles per year, with capacity set to increase further. Lastly, Kaewsuwan notes that while Indonesia has recently received significant investments and possesses a growing capacity of 1.2 million vehicles per year, most of the countryís auto industry growth has been spurred by domestic demand, and therefore does not indicate the countryís potential as an auto export leader.
Indonesia: June boost in auto sales may indicate market recovery
Source: The Jakarta Post, 15 July 2014
June saw Indonesiaís auto sales rise 6% y/y, which was a welcomed rebound from May's contraction of 2.6%. This means that the country will mark the first half of 2014 with 6.7% growth over the same period 2013. Astra International dominated the market by contributing to over half these sales with its Japanese-heavy catalogue. The company has said that 15% of its sales were from low-cost green cars (LCGCs), while low multipurpose vehicles comprised 45% of sales. The Association of Indonesian Automotive Manufacturers (Gaikindo) has said that all car segments sold in the country showed increased growth in June.
Whether or not the Indonesian car industry is back on track is a matter of debate. Gaikindo secretary-general Eddy Sumedi believes the June sales indicate that their 2014 goal of selling 1.2 million vehicles will be met. Echoing these sentiments, Astra spokesperson, Tira Ardianti, believes the company may be able to sell even more vehicles in the second half of the year. However, PT Hyundai Mobil Indonesia president director Mukiat Sutikno is skeptical, stating that the first half of 2014 is growth was propped up by big sales in LCGCs, while other segments did not fair as well.
India: 2014-15 domestic car sales to grow 4%, double-digit growth coming in 2017
Source: Business Standard, 21 July 2014
A report by the French international advisory firm, Mazars, forecasts Indiaís domestic car sales to grow by 4% this year after two consecutive years of negative growth. Specifically, the four-wheel segment is expected to grow 4%, while two-wheeler sales will expand by 7% this year. The report used data from a survey of over 300 companies in Indiaís automotive industry, such as manufacturers, component suppliers, and dealerships.
Looking toward the future, the report also noted that this yearís turnaround will be part of a larger trend. As growth is slowly being seen in various verticals within the auto industry, the Mazars report also sees domestic growth reaching the double-digits starting in fiscal year 2017-18. India, after all, has very low car-ownership when compared to other nations. While there are 100 cars per 1000 people in China, that number is 20 in India. Beyond domestic growth, there are also opportunities for Indian carmakers to export, as the Mazars report also revealed that an increasing number of companies in India are considering entering the African market.
Malaysia: Automotive industry receives fresh injection of incentives
Source: Borneo Post, 15 February 2014
The incentives were announced by the National Automotive Policy (NAP), following two budgets of no-show. The Malaysian automotive sector has been rather stagnant in recent years but saw some gradual increase at the end of 2013 due to promotions and backlogs. This was evident from total industry volume (TIV) which was flat year-on-year at 60,500 units in December 2013, according to statistics released by the Malaysian Automotive Association (MAA). Nonetheless, the TIV jumped sequentially by 15.8% month on month due in part to the aggressive year-end sales campaigns and together with Christmas and New Year festive promotions by some distributors. What was interesting was that local player Proton lost its second position to Toyota, a non-national marquee.
The three largest non-national carmakers in December 2013 continued to be Japanese big caps Toyota, Honda and Nissan. Toyota bumped up to the second spot overall and remained the largest non-national marquee with 16.8 % market share. The sales of the Japan’s largest automaker increased 0.3 % at 10,200 units. Honda climbed up to the fourth spot in December 2013, controlling 10.8 % of the market. Nissan dropped to fifth spot in December 2013 with a market share of 7.6 %. With the new NAP set to focus on establishing Malaysia as a regional hub for energy-efficient vehicles (EEVs), the policy is expected to further boost the non-national carmakers’ presence in the country and put in place definitive incentives for car and auto part manufacturers to set up facilities in Malaysia.
China: Automotive output and sales for January increase 4.4% and 6% respectively
Source: Steel Orbis, 14 February 2014
Auto output and sales of automotive vehicles in China increased by 4.4% and 6% respectively to 2.0517 million units and 2.1564 million units. The month-by-month comparison shows a decrease of 4% for output and an increase in sales by 1%. In particular, the output and sales volumes of passenger vehicles for the month of January achieved 1.7106 million units and 1.8469 million respectively, an increase of 5.5% and 7% respectively. However, compared to the December figures, the output fell 4% and the sales increased 3.9%.
In January, China’s auto export volume totaled 68,500 units, down 17% month by month, and decreasing 7% year on year, the total included 45,600 passenger vehicles and 22,900 commercial vehicles, down 2% and 36.3% both on a month by month basis. For the full year of 2013, China’s auto import volume increased 5.6% year on year to 1.1954 million units, and at the same time their export volume decreased 6.6% year on year to 948,100 units.
Vietnam: Car market sees improvement in 2013
Source: Foundry Planet, 11 February 2014
In December 2013, car sales boomed above 20% as the Vietnamese car market improved from the negative peak touched in 2012. The full year ended up 7.4%: Toyota dominates squashed competitors and was voted Brand of the Year with Three models on top of Model of the Year. Accordingly with data released by VAMA, the Vietnam Automotive Manufacturers Association, in December total light passengers vehicles sold in Vietnam were 9.578, up 20.9% from 2013 Full Year sales were 76.117, up 7.4% from 2013, which was the worst in a decade.
Sharing general remarks on Brands & Models performance, based not only on volume but also comparison between potential and performance, focus2move Team quoted the Best of the Year 2013, as Brand and Model. Brand of Year went to Toyota, market leader and able to boost market share at 44.0%, up 9.0 points from 2012. Second was Honda ranked 5th with share at 6.1%, up 3.6 points from 2012. Third was Mazda in 6th with share at 5.4%, up 3.8 points from 2012. Model of Year was the new Toyota Camry in 3rd place with 7.7% of share, up 3.3 points from 2012. Second was Toyota Innova in 2nd with 7.9% of share, up 2.0 points from 2013. Third was Toyota Fortuner in 1st place with share at 10.9%, up 2.3 from year ago.
Malaysia: Green light for foreign hybrid car manufacturers
Source: CCTV, 26 January 2014
According to its 2014 National Automotive Policy, Malaysia will allow foreign companies manufacture small hybrid cars. The aim of the policy is to encourage car manufacturers such as Mazda or Honda to make energy-efficient cars similarly to Thailand and Indonesia. Malaysia wants to establish itself as the regional hub for environment-friendly vehicles.
Foreign companies will be allowed to produce passenger cars with engine sizes of 1.8 liters or less run on gasoline and battery. The country is looking to export 200,000 energy-efficient cars, reach USD 3 billion of car component shipments while creating 150,000 jobs. Up until now, Mazda and local Perodua have decided to invest over USD 682 million in production of energy-efficient vehicles.
Australia: Concerns over Australian-made automobiles
Source: Sunshine Coast Daily, 31 January 2014
According to the latest report by the Productivity Commission, assistance for automotive manufacturing industry in Australia is no longer guaranteed. The Commission wanted that transitional costs involved that resulted in the closure’s announcements of Ford and Holden. Both companies will shut their operations by the end of 2016 and 2017 respectively. The report mentioned that the manufacturing capacity of the manufacturers exceeds the demand on the global level.
There is an ongoing pressure on automotive manufacturers to reduce costs, especially in the small and medium size car segments. The key drivers in the automotive industry are production scale and labor costs. In Australia, vehicle manufacturers need to produce between 200,000 and 300,000 automobiles in order for their assembly plants to remain competitive. Compared to countries such as China or India, component manufacturing in Australia is very expensive and vehicle manufacturers increasingly look to source automotive components from overseas.
India: The leader of automotive R&D
Source: Business Line, 30 January 2014
India has become a very attractive country for automotive R&D and currently is its preferred destination, according to Zinnov, a firm focusing on globalization advisory and market expansion. This is mainly due to strong growth in engineering analytics and talented individuals located in a so-called “Deccan Triangle”. Even though the key driver to R&D globalization is still cost, there is a strong need for local MNC R&D companies to drive innovation in this and other industries.
Indian automotive R&D industry spent the highest amount in 2013 amongst top 500 R&D spenders that totaled USD 110 billion globally. India’s position is strengthening as 874 MNCs have set up 1031 R&D centers and 45% of top 500 R&D companies are present in the country. According to Zinnov, Japan contributed the most towards the automotive R&D with 40% throughout 2013. It was followed by Europe with 37%, North America with 13% and Asia Pacific 12%. .
China: Car sales in China outpace forecasts
Source: The Wall Street Journal, 13 January 2014
In 2013, China automakers associations predicted much lower growth forecasts than the actual figures showed. They estimated that the industry would grow by some 7 %, however; in fact the industry’s growth at least doubled at 14 % for passenger and commercial vehicles reaching 21.98 million units and 16 % for passenger vehicles alone of 17.93 million units.
In 2014, the same experts expect the growth to reach somewhere between 8 and 10 %, however, it is very likely that actual numbers will be again much higher. For 2014, more careful predictions are valid due to already slowing economy as a whole. In 2013 it lost momentum during the Q1/2013 and Q4/2013. Also, the central government convinced local governments in cities such as Beijing, Shanghai or Guangzhou to limit their car sales due to growing pollution problems.
Malaysia: Positive changes in Malaysian automotive industry
Source: The Star Online, 20 January 2014
On 01/20/2014 Malaysia announced that it would allow foreign automobile manufacturers to produce smaller passenger cars domestically as the country is trying to become a leader in energy-efficiency vehicles. Smaller cars are defined by having an engine of 1.8 litres or less and foreign players would be allowed to manufacture them as long as they qualify as energy-efficient. The Trade Minister, Mustapa Mohamed, stated that the aforementioned project would receive large tax breaks as incentives.
In the past, national policies aim at protecting Malaysian car brand, Proton, however current changes open up the market and expose it to foreign competition. As Mustapa Mohamed said, “… these policies will enable Malaysia to regain our position as one of the most dynamic hubs for Southeast Asia”. Nowadays, Malaysia is the third largest economy in the region after Thailand and Indonesia and it used to be Southeast Asia’s automotive hub. Through national policies protecting Proton, it has fallen behind.
Australia/South Korea: Potential for GM’s increased supply from South Korea to Australia
Source: Chicago Tribune, 14 January 2014
It has been announced that due to the expected General Motor’s (GM) plant shutdown in Australia in 2017, South Korea may boost its exports to satisfy the demand in the region. The shutdown is a result of high cost and strong local currency, AUD. This news came out once GM reported it would pull out Chevrolet from the European continent in order to place a strong focus on Opel. South Korea’s increased exports are even more likely due to the bilateral trade deal signed with Australia.
GM “remains very committed to the Korean market”, reported the incoming CEO of the company, Mary Barra. The labor cost in South Korea, however, also keeps on increasing. GM increased its production capacity in China yet Mary Barra did not make it clear whether this is going to affect production in South Korea. The company keeps on evaluating the most optimal production base.
Japan/China: Increased competition for Japanese car manufacturers
Source: The Wall Street Journal, 6 January 2014
Automakers from Japan are looking to increase their sales in China seeing ongoing growth on the market. Toyota Motor Corp. reported that its 2014 sales would increase by 20% compared to 2013, from 917,500 to over 1.1 million vehicles. Similarly, Honda Motor Co. predicts an increase in sales from 756,882 to over 900,000 automobiles and Nissan that is yet to issue its 2013 figures. Between 01/2013 and 11/2013 the company sold 1.13 million vehicles recording a 13% increase from the same period in 2012.
Japanese automobile manufacturers face huge domestic and international competition. For instance, a relative newcomer to China Ford Motor Co. reported that its sales in the country went up by 49% in 2013 surpassing Toyota. One of the reasons for worse performance of Japanese brands were tensions over Diaoyu Islands that resulted in anti-Japanese protests reducing their market share. Toyota did well with its low-cost car strategy and is looking to make longer its Yaris and Vios, and wants to launch RAV4, crown and Reiz models. It has also opened a research center in China in 11/2013 to manufacture batteries for hybrid cars. Honda is also looking to present upgraded models in the future.
Malaysia/New Zealand: Record car sales in 2013
Source: Indian Autos Blog, 7 January 2014
Year 2013 was a very successful year for the automotive industry. Even markets that have previously stagnated such as the USA or Europe, recorded slight growth in 2013. Other developing markets such as New Zealand or Malaysia recorded a much better performance. Car sales in Malaysia went up by 3.9% from 627,753 in 2012 to 652,120 vehicles in 2013, according to the Malaysian Automotive Institute. The predicted figure of 640,000 units was well exceeded even though sales in 12/2013 fell by 6%.
Malaysia’s top car manufacturers Perodua and Proton ended 2013 sales with 195,865 and 138,750 vehicles respectively. In terms of the foreign brans, Toyota was the top performer with 91,010 units, Nissan with 52,047 and Honda with 51,235. New Zealand’s market exceeded the record sales from 1984 for the first time in 2013 and achieved 113,294, up by 12%. Since the global financial crisis in 2009 when car sales were reported to be at 70,048, this shows a fast recovery. Toyota again showed tremendous performance and ended up on top with 23,705 vehicles being sold in 2013.
Korea: Car sales reach 8.6 million in 2013
Source: Global Post, 2 January 2014
Automakers from South Korea reported sales of 8.6 million vehicles in 2013, up around 5% from nearly 8.2 million units in 2012 due to the higher demand from overseas of 6.4% or 435,100 units from 2012. Domestic sales fell by 2.1% by 29,263 vehicles from 2012 so the overseas demand largely offset relatively poor sales in South Korea. Hyundai and KIA Motors Corp. showed strongest growth with 7.3 and 3.9% respectively compared to 2012.
Hyundai also reported that 2.9 million of its vehicles were made overseas, up by 16.5% from 2012 with main production in China, India and the United States. The car manufacturer expects the international competition to increase in 2014 and deems adaptability and flexibility of development of its models the key for potential success. Kia also saw poor domestic demand that was compensated for by overseas demand with nearly 2.4 million vehicles in total sales in 2013. Its company representative stated that further depreciating Japanese Yen would make Kia’s cars less competitive on the international arena.
China: Car sales see a double-digit rebound
Source: Financial Times, 15 December 2013
The world’s largest car market, China, has experienced a rebound in car sales to double-digits after a disappointing decline in 2012. Sales of passenger automobiles in China during the first nine months were very impressive and rose to nearly 12 million units, a 15% increase year-on-year. As a comparison, the passenger car market in the US is expected to grow by 8% in 2013, while a decrease is projected in Brazil, Russia, India, Germany and Japan. Due to the widespread congestion and pollution issues in large municipalities such as Shanghai, Beijing, Shenzhen and Guangzhou, car manufacturers are constantly looking to expand their operations to smaller cities that are homes to over 80% of the population, some 1.3 billion people.
Volkswagen and General Motors (GM) are the two most successful multinational car companies in China thanks to their fast-paced localization of production and R&D strategy. Volkswagen and GM sold 1.9 million and 1.1 million in passenger vehicles respectively in the first three quarters of 2013. A similar strategy is currently being pursued by the luxury car manufacturers in China. Even though domestic car sales figures look promising, China’s automobile export market saw a decline of 3% in the first eight months of 2013 to 500,000 vehicles, compared to the same period in 2012.
Vietnam: Car sales go up by 8% in November 2013
Source: just-auto, 13 December 2013
Vietnam Automotive Manufacturers Association reported that automobile car sales in Vietnam rose by 8.3% to 9,295 units in November 2013 from 8,592 in November 2012 thanks to the rebound in the commercial sector. Commercial vehicles sales increased from 3,085 units in November 2012 to 3,413 units in November 2013, up by 10.6%. At the same time, light passenger vehicles such as cars, SUVs and MVPs jumped by 6% from 5,394 to 5,720 units in 2012 and 2013 respectively.
Overall sales between January 2013 and November 2013 in the automotive industry in Vietnam increased by 18.2% to 85,061 units. Light passengers showed stronger growth of more than 33% to 50,733 units compared with commercial vehicles that jumped by only 1.2% to 32,806 units. Year-to-date Toyota led the market with 29,292 sales; an increase of nearly 35% from year earlier. On the contrary, Truong Hai announced a fall in sales by 1.4% to 21,550 units during the same period. Ford was the top performer with an increase of 76% to 7,158 units due to the release of its new Ranger pickup truck and sound demand for transit vans while GM reported poor sales of 4,427 units, down by 13%.
Thailand: The largest automotive manufacturer in ASEAN region targeting large expansion
Source: Thailand Business News, 18 December 2013
Starting from just 500 units in 1961, Thailand’s automotive industry grew to 2.4 million vehicles produced in 2012 with an increase of 68% over 2011. Currently, Thailand ranks as the number one automobile manufacturer in ASEAN region and number nine in the World. Indonesia in second and Malaysia in third produced 1.02 million and 570,000 units in 2012 respectively. Estimated production figures for Thailand in 2013 are 2.5 million vehicles while in 2017 it is already 3.4 million potentially making Thailand number five largest producer in the World. Thailand’s promising future targets require solutions to current labor shortages.
Thailand Automotive Institute is looking to develop labor skills for 300,000 workers between 2011 and 2016. It is targeting production of 6 cars per year per employee (up by 50% in 2011). The number, however, still remains low, as a typical worker in Japan is able to produce between 11 and 12 vehicles annually. The government is also preparing a new international program on automotive engineering at a leading Thammasat University. Finally, Thailand Board of Investment (BOD) is looking for investors in its Eco Car Scheme that is open until 03.31.2014. Successful contractors face a number of obligations such as: making an investment of the minimum USD 200,000, beginning production by 2019, achieving minimum production of 100,000 vehicles per year since their 4th year of operation and more.
India: Nissan to sell cars online
Source: Zig Wheels 10 December 2013
Nissan Motors India has announced online booking through credit card, marking the company’s first foray into online sales. The entire product range will be available for purchase via the web. The process is simple and straightforward; customers make the payment online and then pick up their car at the nearest Nissan dealership. Nitish Tipnis, director of marketing, for Hover Automotive India, Nissan’s Indian company said that the decision was made sense given how consumers use the internet.
“Today most car buyers go online before making a decision so using the internet is a logical extension of the purchase cycle. At Nissan, we are putting in place suitable payment gateways with the help of specific car portals to ensure timely delivery and service at the time of purchase. The objective is to simplify the purchase cycle and delight the customer by making the entire sales journey quicker and more efficient with no compromise on service," he said. The vehicles currently on offer include the mid-sized sedan 'Sunny', Nissan Evalia (MPV), compact hatchback Micra, newly launched compact premium SUV Terrano, luxury sedan Teana, SUV X-Trail and the iconic sports car Nissan 370Z.
China’s car lobby opposes softening of foreign automaker restrictions
Source: Automotive News, 4 December 2013
China's automotive lobby has fiercely opposed a potential easing of restrictions by Beijing on foreign ownership in the car industry, arguing that the move would seriously weaken the position of domestic carmakers. Dong Yang, secretary general of the China Association of Automobile Manufacturers, maintained that if foreign ownership rules were relaxed, Chinese carmakers would lose control of the joint ventures they currently own and run together with global automakers. China has required foreign companies including General Motors, Ford Motor Co., Volkswagen Group and Toyota Motor Corp. to form joint ventures in order to produce cars in the country, with the hope that the Chinese manufacturers would absorb foreign technology and management expertise to become more competitive.
The Ministry of Commerce stated in a media briefing in November that the government would likely relax rules on foreign investment soon in areas including auto manufacturing. The current regulations also requires that foreign automakers’ technical centers be jointly run in China and that the foreign enterprises transfer certain technology to their local partners. At a recent automotive conference in Wuhan, Chen Lin, the Commerce Ministry official who oversees international automotive investment policy, acknowledged that unlike China, automakers investing in most countries around the world are not required to form a joint venture with a local partner to own and operate any assembly plants in their markets.
Indonesia: General Motors sees China-like take-off in car market
Source: Reuters, 10 December 2013
General Motors is trying to break the Japanese stranglehold on the popular family car market in Indonesia, where it sees the next auto boom after China. Despite being in Indonesia for about 30 years longer than Japan's Toyota Motor and its affiliates including Daihatsu Motor Co Ltd, the U.S. company is only a small player in Southeast Asia's biggest economy. The U.S. company sold around 12,000 cars from January to October 2013, whereas Toyota, the world's biggest car maker, sold more than 350,000.
General Motors is banking on multi-purpose vehicles, sport utility vehicles and compact cars to close the gap with its Japanese rivals, said Michael Dunne, who became president of the company's Indonesian operations in September. "The most exciting thing about Indonesia is it reminds me of China about a dozen years ago, early 2000s," Dunne, a former car consultant who was also the author of a book on General Motors' strategy in China, he continued “Population times per capita income equals opportunity for automakers. So when you have a massive population and you have that income threshold crossing $3,500, in country after country, without exception, that's been a trigger of take-off." Sales in Indonesia by some estimates are expected to double over the next three years.
China: Facing new car expansion
Source: Autocar, 24 October 2013
According to estimates by the Global Automotive Forum, new car sales in China will reach 20 million by 2020, and will hit 40 million by 2030. This growth, which is due to an average GDP growth of 7% for the rest of the decade, will place China as the largest car market in the world. If Chinese does attain these figures, it will be the result of the desire of car manufacturers to penetrate new markets, especially the smaller cities located in western and central China, which are forecast to expand, following huge growth in Chinese megacities.
Long-term growth will be driven by the government of China, which currently has plans to expand the country’s infrastructure. Estimates shown by Ronald Hoge, CEO of Pinnacle Engines, placed Chinese sales at 40.7 million units and the US at 17.6 million. India is predicted to have sales of 11.7 million, Brazil 7.8 million, and Russia 5.2 million. Germany is expected to experience 3.7 million new cars sales in 2030, France 3.2 million, and the UK predicted to hit 2.9 million units.
Thailand: Automobile industry sprints to meet SE Asia’s demand
Source: Voice of America, 22 October 2013
Thailand is now the world’s third largest maker of commercial vehicles, behind China and the US, and is ranked ninth in terms of total vehicle production. Several foreign automakers are now producing automobiles in Rayong for the growing middle class in Southeast Asia. Ford's regional president, Matt Bradley, Ford’s regional president commented, "Thailand, I think, has made a concerted effort from government policy in the last 15 years to plan to support the automotive industry. Ford has been in Thailand about 17 years and just since 2007 we've invested over a billion dollars in our manufacturing and product cycle plant footprint in Thailand."
The automotive sector now comprises 12% of the country's GDP and employs 400,000 individuals. Some automakers in Thailand import critical components, including engines, from overseas. However, GM Powertrain assembles its engines on site and sources their components in Thailand as it is cost-effective. Manufacturers in Thailand must also tailor their vehicles to meet the regional demand; this includes designing parts, such as four-cylinder diesel engines, which take advantage of the widespread availability of affordable diesel fuel. Thailand's dominant auto production industry, which is led by Toyota and other Japanese manufacturers, faces obstacles. Expansion of the industry is inhibited by a labor shortage in a country with nearly full employment.
India: Scania inaugurates first manufacturing facility
Source: Automotive World, 29 October 2013
Scania Commercial Vehicles India will manufacture about 2,500 heavy haulage trucks besides 1,000 inter-city buses and coaches annually at its facility in Narasapura. Currently the localisation is 18% for trucks and 100% for bus bodies. Scania will also employ over 800 people at this facility within five years. The manufacturing facility with initial investment of USD 45.25million was inaugurated by Karnataka’s Chief Minister, S. Siddaramaiah in the presence of Union Minister for Road and Transportation, Oscar Fernandes and Mr. Martin Lundstedt, President and Chief Executive Officer of Scania Global. The facility will serve as company’s head office and centre for all commercial operations across the country.
The operations will consist of final assembly of trucks with bodywork and building of complete coaches along with a service workshop and a central parts warehouse for timely service. This opening will provide impetus to industrial growth in the region but also present significant employment opportunities to local residents. With its superior technological processes, large-scale manufacturing set-up and eco-friendly focus, the plant is a testimony to our emphasis on inspiring corporate India to reach greater heights. With the country’s highway infrastructure improving and hub-and-spoke model gaining increasing acceptance, the domestic truck and bus industry is witnessing polarization.
China: Still not ready for electric vehicles
Source: US News, 8 November 2013
With expectations of reaching 2 million electric vehicles sold annually by 2020, China is keen to become a major force in the industry. However, due to a range of issues it is unlikely that it will produce a major competitor akin to the key players like Tesla, the Chevy Volt or the Toyota Prius. Despite the central government’s desire to create such a player and its wish to coordinate automotive producers in support of this goal, local governments have resisted through their inefficient deployment of preferential policies and wasted research funding.
Although EV manufacturers are now found in 23 provinces, companies have only put 25% of designed and certified models into production. Moreover, in spite of demonstration projects in 25 cities and USD 9,000 of incentives per car offered, only 8,733 EVs sold in 2012. Cities lack charging stations, EVs are more expensive than other vehicles, and a popular domestic brand has yet to take root. To promote sales abroad, international consumer brand awareness must be stimulated and a brand leader needs to emerge. Although many American industries are concerned about the rise of EV Chinese manufacturers, the fragmented nature of their production continues to undermine its success.
Japan: Brands trending towards ‘small’, ‘sporty’, and ‘futuristic’ at the Tokyo Motor Show
Source: Automotive News, 10 November 2013
Japan-s automotive producers are highlighting futuristic concept car designs and small 660cc vehicles – which represent one third of Japan’s market – at the Tokyo Motor Show. Toyota, for example, is showing a wave-like hydrogen fuel cell sedan and a mini car that resembles a pod, while Nissan has modified its DeltaWing Le Mans racer, transforming it into a street-legal electric three-seater. Honda and Daihatsu will show convertible, sporty mini vehicles to target the domestic market. However, with the prominence of these trends, the show is lacking new models catering to North America.
Here are some examples of what is being put on display at the show: Daihatsu will be showing two modified versions of its Kopen minicar, in addition to unveiling a new fuel cell minitruck; Honda has produced a market-ready Fit-based urban SUV concept vehicle as well as a 660cc two-seat convertible; Lexus will show off a near-production ready sports coupe and a gasoline-only variant of the LF-NX SUV it first presented in Frankfurt; and Mitsubishi will show three new concept vehicles with electric drivetrains. Subaru, Suzuki, Volkswagen, Mercedes-Benz, Jaguar, Mazda and Mini will also be showing new vehicles.
South Korea: Hyundai struggles with factory, production issues
Source: Automotive News, 10 November 2013
Hyundai will needs to address production issues in its seven domestic plants to sustain profit growth. These problems include the fact that car production takes twice as long on average, despite double the number of workers for each line compared to the US, wages are high, there are frequent work stoppages and the factories are outdated. Much like Toyota in Japan, Korea remains committed to its domestic production base and has set adjusting productivity issues with its union as a top priority. Following militant union leadership that oversaw two strikes in two years, Hyundai’s labour union elected a new more moderate president, suggesting signs of steadier industrial relations.
Hyundai’s believes it stands more to gain in remaining committed to its domestic production. More than simply emotional ties, Hyundai has an extensive supply chain and profitable car lineup in Korea, and sells more high-margin sedans domestically than in any other market. The company’s backbone is in Ulsan, which hosts the largest single car complex in the world and knits together 380 suppliers and 5,000 second- and third-tier suppliers across Korea. However, as the company has expanded globally, its portion of Korean produced vehicles has halved to 43%. Rather than expand its Korean capacity, the company has opted to boost production by running longer working days. Without the necessary increase in productivity in spite of high wages and long hours, Hyundai is now rethinking this strategy as it takes on increasing domestic competition from rivals BMW and VW.
China: Smart becomes first European company to import electric cars to ChinaSource: The Green Car Website, 21 November 2013
Capitalizing on China’s expanding market
for electric vehicles, Smart has become the first European importer to the
Chinese market. China is the 14th market for the company’s fully-electric smart
fortwo that is already available in Europe, North America and Japan. Following
the electric drive smart fortwo’s launch at the Guangzhou Motor Show, the car
has become available for sale across China. According to company head, Dr Annette Winkler:
"Our smart electric drive was one of the first all-electric cars and is
the clear market leader in Germany. We are now bringing this successful vehicle
to China, and are the first European manufacturer to launch an all-electric car
on this market. Offering powerful driving pleasure with zero local emissions,
the smart electric drive is perfectly suited to China's big cities."
China is already becoming a major market for Smart, alongside Germany and Italy. In 2012, the company’s China sales increased 43.8 % year-over-year. China is now the world's largest automotive market, and it is expected to be a crucial market for the growing demand for alternative fuel vehicles. This is in large part thanks to the Chinese government’s supportive environmental legislation. One example is the government’s most recent renewal of a grant programme that provides buyers of fully electric cars a subsidy worth up to USD 10,000 towards their purchase.
India: Car sales decline in October,
industry body cuts forecast for full year to negative growth
Source: International Business Times, 12 November 2013Passenger car sales in India fell about 4 % annually in October, while cumulative sales for the April-October period fell by 4.5 %, as high interest rates and a slowdown in the economy continue to hurt the market. Auto manufacturers sold 163,199 cars in October in the country, while exports marked a 0.09 % increase -- with 42,536 vehicles shipped out -- from the same period last year. Sales in the domestic market are expected to decline further in the current financial year ending March 2014, SIAM said, cutting its previous forecast that the sector would grow by 3.9 % this year.
“Now the decline is moderating, so if it keeps on moderating at this pace maybe we'll see zero growth in January-February," said Vishnu Mathur, director general at SIAM. "Definitely the year will be negative," The Indian automobile Industry has suffered from a slowing economy, high interest rates and rising fuel prices, all of which have put a crimp on an industry that was booming only two years ago. The country's automobile sales took a hit after a surprise move by the Reserve Bank of India in July to help the rupee tightened liquidity in the system and made auto loans dearer. And, the fall in sales in October, which typically sees heavy demand fueled by the start of a two-month festival season, took automakers by surprise.
Vietnam: New vehicle sales up 20% in October
Source: Just Auto, 13 November 2013
Vietnam’s new vehicle market continued to show improvement in October, with sales rising by 20.2% to 8,465 units, from 7,041 units in the same month of last year, according to data released by the Vietnam Automotive Manufacturers Association. Light passenger vehicles continued to drive the market forward, with sales rising by close to 29% year on year to 5,232 units, from 4,066 units, with consumers benefiting from much lower interest rate compared with last year.
Commercial vehicles have also begun to trend higher, with volumes rising by 6.6% to 3,053 units, from 2,864 units a year earlier. A further 205 sales were reported separately by Mercedes-Benz in October, bringing its year to date total to 1,363 sales - mostly passenger vehicles. In the first 10 months of 2013, total vehicle sales increased by just over 20% to 67,045 units, from 55,807 units in the same period of 2012. Light passenger vehicle sales were up by 38.5% at 39,761 units, while commercial vehicle sales were just slightly lower at 26,126 units.
Hong Kong: Hong Kong launches electric bus in drive against pollution
Source: Channel News Asia, 9 September 2013
Hong Kong released its first battery-powered public bus as a part of a measure against the city's pollution on September 9. The new single-decker bus is powered by lithium iron phosphate batteries that take three hours to charge and give the vehicle a range of about 180 kilometers. The bus was produced by Chinese automaker BYD, which also manufactured the first electric taxi in southern China. In addition, Hong Kong government has invested USD 23 million in the pilot scheme in order to subsidize the purchase of 36 electric buses by the end of next year.
Kowloon Motor Bus, the largest operator involved in the trial scheme, pointed out that it would take time and money to transform its fleet of 3,800 buses with each battery-run vehicle costing about USD 644,700 and they need to collect a lot of operating data from the frontline to do detailed analysis and get customer feedback. Some local environmental groups were skeptical about the launch because the one bus would not make big change and Hong Kong was lagging behind other parts of the world when it came to electric vehicles.
India: Rise in car sales considered unsustainable
Source: Financial Times, 10 September 2013
India's carmakers showed a temporary recovery in August, due to higher sales from Maruti Suzuki, India's largest carmaker. The sales of Maruti's passenger cars increased 15% year-on-year during August. Although the rest of the carmakers suffered from weak consumer confidence and rising fuel costs, Maruti was on the upturn. During August 2012, the company shut down a big Maruti plant and cut the company's production, following industrial unrest and rioting in which a senior manager was killed.
According to the data from the Society of Indian Automobile Manufacturers (SIAM) trade group, car sales were up at 133,486. SIAM pointed out that the good figure would be temporary because of high inflation, a declining foreign exchange rate, and the high cost of manufacturing. The fall in the Indian rupee has added further downward pressure to a downturn of the automotive industry in India. Analysts expected that the sales increase would be unsustainable over the next couple of months because India's middle class will not buy cars due to people's worries about growth and jobs.
Indonesia: Honda jumps into LCGC market with Brio Satya
Source: The Jakarta Post, 12 September 2013
PT Honda Prospect Motor launched the Brio Satya, a city car with a 1,200 cubic centimeter engine on September 11, entering into the low-cost green car (LCGC) market. Honda expects to start production of the Satya in October and to begin delivery in November, after receiving the permission from the Industry Ministry. Honda has targeted to produce 4,000 Brio every month, 30 percent of which would include Satya's. The sales of Brio are expected to increase by 50%. The Brio has occupied about 28% of a city car market share. Honda sold 8,002 Brio's from the August to the end of 2012.
Honda equipped its Satya with a 1,200-cc engine, the maximum engine capacity for LCGCs. According to the Industry Ministerial regulation, engine size for LCGC's is limited to between 980 cc up and 1,200 cc for fuel and the car price should not be above USD 8278. The car price is allowed to increase by up to 10% for safety technology and 15% for an automatic transmission. With Dual airbags, the price of Satya is between USD 9237 up and USD 10196, which is the cheapest in Honda cars. However, the Satya's starting price is the highest among recently launched cars, such as the Daihatsu Ayla and Toyota Agya, starting at USD 6623 and USD 8627, respectively.
China: Ford sales poised to stun Toyota and Honda in market
Source: China Daily, 9 October 2013
Ford Motor Co is set to surpass its Japanese rivals on the top seller's list in China as Toyota Motor Corp and Honda Motor Co struggle to regain market share following a flare up in anti-Japanese sentiment a year ago. Over the past decade it has lagged a long way behind General Motors Co and Volkswagen AG in China due to its late foray into China and the subsequent, conservative approach it has taken in an auto market that became the worlds biggest in 2009. Ford is fighting to change that picture and appears likely to sell more vehicles in China this year than two of its main Japanese rivals - Toyota and Honda. Its China sales are also coming close to that of Nissan Motor Co.
Ford is likely to sell more than 900,000 vehicles, including passenger cars and commercial vehicles, in China this year thanks to its beefed-up product lineup. New in the showroom since last year are a couple of small sport-utility vehicles and the redesigned Focus car. It has also just launched the redesigned Mondeo car, a China version of the car marketed in North America as the Fusion. The American automaker sold 551,738 vehicles during the first eight months of the year, up 50 percent. Toyota is targeting to sell about 900,000 vehicles and Honda about 750,000 in China this year. Nissan is aiming to sell 1.25 million vehicles, but a Nissan company executive speaking on condition of anonymity said last month the company was "stretching to achieve" that goal.
India car sales post steep drop
Source: Sky News, 8 October 2013
India's car sales fell nearly 5% in the first half of the financial year, the steepest drop in a decade, as buyers steered clear of showrooms due to a weak economy. The sales performance released by the Society of Indian Automobile Manufacturers (SIAM) appeared to put the once-vibrant sector on track for a second straight year of declining sales. The trade body's data showed car sales in September squeezed out growth of 0.7% year-on-year to 156,018 units – the highest monthly total since the start of the financial year. But car sales growth for the six months since April plunged by 4.67% from a year ago, the sharpest decline since the first half of 2002-03 when car sales shrank by 6.96%.
SIAM initially expected passenger car sales to grow by one to three percent this financial year to March 2014 but the body has said it expects negative growth unless there is 'a big surprise' in the next few months. Carmakers hope more buyers may come into showrooms in the next few months as India's religious festivals season swings into high gear. The season is traditionally seen as an auspicious time to make big-ticket purchases and automakers have ramped up special offers for purchasers. But analysts warn that even the festive season could produce disappointing results with economic growth expected to be as low as 3.7% by some analysts, down from 5% last year.
Indonesia: National electric car project could boost products' exports
Source: Antara News, 7 October 2013
State Owned Enterprises Minister Dahlan Iskan is optimistic about the success of the national electric car project as it is expected to boost imports from Indonesia in the future. He said "If we are not prepared, we will only be a potential market for foreign products. It is time for Indonesians to produce their own green car. That is why we displayed the Indonesian-made electric car during APEC Leaders Meeting 2013 in Bali. We hope to attract some investors." It was earlier reported that the Indonesian Institute of Sciences (LIPI) had produced various types of electric buses and city cars with models included judged at a scale seven of the nine levels of technology readiness.
The technology center will become the main location for the design of electric auto components produced by Indonesians. Indonesia will continue to develop the electric automobile, but it will be developed in stages because of the many obstacles that must be overcome. Another problem is that of overall electricity supply, since the need for power will increase if electric automobiles are manufactured, though electricity is still subsidized by the government.
South Korea: GM looks to curtail production due to rising labor costs
Source: Chosun Media, 21 August 2013
20% of all GM cars are built in Korea, and over 80% of those produced are exported. GM is now strongly considering pulling out their manufacturing operations in the country, the main reasons behind this are rising labor costs and an unfavorable currency exchange. South Korea's highly unionized labor forces are turning the tables on the car makers and their demands are becoming increasingly costly to meet for GM. Just last week 45,000 union workers voted to strike over unfilled labor demands including a payment of USD 2.45 billion from the company's 2012 profits.
In 2012 GM informed the Korean labor union that it will not look to produce the next gen Chevrolet Cruze in Korea and will transfer the operations to Spain from the H2/2014. The uncertainty has filtered through to the unions and has been reflected back, leading GM to face increased political tension, for GM to maintain their bottom line figure of 20% year on year revenue increase, the curtailment of production in Korea looks inevitable.
India: Demand for smaller SUVs stays strong despite the slowing auto market
Source: Times of India, 20 August 2013
Sales of sport utility vehicles dropped 17.5% last month, marking the first slide month on month for the segment in four years. Prior to the last month's figures, the area had been a fillip for the Indian automotive market. Nissan has recently released a new model, the "Terrano" a compact sport utility vehicle, which aims at the affordable cross-over vehicle market. The company will produce the compact SUV at its factory near southern India in the city of Chennai and take orders from next month.
This market area has been forecasted for continued growth, and even though prices start at an aggressive USD 8,800 starting the EcoSport has proven popular since its release in June, other similar products competing in this range include Renault's compact SUB Duster. Ford reported sales of 4,715 EcoSports in July, boosting company sales by 26%, whilst Renault shipped 3,763 vehicles in July almost double what it sold in the previous month. Analysts have warned that sales may stabilize in the coming months for the segment.
China: Car makers face probing on over pricing
Source: China Daily, 14 August 2013
Since 2012, the National Development and Reform Commission (NDRC), responsible for enforcing anti-trust rules on pricing, has been conducting nation-wide market research on the prices of all foreign cars sold in China with the aim of concluding whether carmakers were setting a minimum retail price for dealers in China. Any contortion of prices could be in direct conflict with the country's 2008 anti-monopoly law, and with 2.7 million luxury cars expected to be old each year until 2020 it is vital that China enforces standardized regulation for the market.
At the moment, foreign carmakers and their local dealers account for roughly 75% of the overall Chinese market, imports of luxury vehicles account for around 5.7% of total car sales in 2012. Workers at foreign carmakers have claimed ignorance to the market research being conducted, however is has been reported that a number of imported cars have been priced 200% above regular overseas market prices when sold in mainland China. Companies highlighted included Volkswagen's luxury division Audi and BMW. The NDRC has noted that companies that fall foul of the anti-trust rules on pricing will be penalized.
Australia: New car sales slowdown in August
Source: Reuters, 4 September 2013
Total Australian vehicle sales in August were 93,336 compared to 93,552 in the same month last year. The strongest performance for the month came from Toyota who captured 19% of sales. It was also a profitable month for Holden, the Australian unit of General Motors, who saw an increased market share of 11.4%. Mazda were also able to report an increase in market share capturing 10.4% of new car sales. Hyundai's held its 8.4% share of the market with Ford only registering a 6.7% stake.
The market for light commercial vehicles had seen strong demand in the first half of 2013 but this demand very much fell away in August as sales slipped 15.3% year-on-year. The market for heavy trucks also saw a noteworthy contraction of 8%. The market for sports utility vehicles and passengers cars remained healthy with sales up 4.3% and 3.5% respectively. The January-August period has seen a year-on-year increase in total sales of 4%. July saw sales of 90,235 which, adjusting for seasonal factors, represented a year-on-year increase of 2.9%.
Thailand: Green light for eco-car mark II
Source: Bangkok Post, 27 August 2013
The second phase of Thailand's eco-car project was approved by the Board of Investment (BoI) on 27 August. The second phase of the eco-car project requires each automobile manufacturer to invest more than USD 200 million (THB 6.5 billion) in the production of small, clean vehicles. An eco-car is defined as a small vehicle that emits no more than 100g of carbon dioxide per kilometer. There is a reduction in excise tax with an eco-car being taxed at 14% compared to 17% for a normal car. An eco-car that is also compatible with biofuel E85 is taxed at just 12%.
The first phase of the project, beginning in 2007, required an investment of USD 156 million (THB 5 million) from each ear maker. The project saw USD 1.6 billion (THB 50 billion) of inward investment in total and attracted manufacturers including Nissan, Mitsubishi and Toyota. This government initiative is one of several projects to promote growth in the Thai economy that is experiencing a slowdown. The Thai parliament has also recently agreed to enter free-trade talks with the European Union which could help attract further direct investment from European car makers and investors.
China: Domestic carmakers play foreign competitors at their own game
Source: Auto News China, 30 August 2013
Chinese automakers are subject to increasing competition domestically from global brands and are losing market share. As a growing number of foreign car makers invest and or build assembly plants in China this trend looks likely to continue. There are, however, several prominent Chinese automobile manufacturers who have embraced globalization and successfully fought against this trend. Great Wall Motor Co., Zhejiang Geely Holding Group Co. and Chongqing Lifan Industry Group Co. have all nurtured strategic alliances with foreign parts suppliers to improve both the quality and technology of their products.
Great Wall and Geely took the strategic decision to focus on a core product and channel the synergy of their respective collaborations. Great Wall's Haval SUVs and Geely's Emgrand range have underpinned the strong financial performance of both companies. Haval SUVs sales surged 78% in the first half of 2013 while sales of Geely's Emgrand range increased 33%. The costs of these collaborations with global suppliers have been expensive but the benefits appear to have already made it an inspired investment.
Indonesia: Indonesian Car Makers Brace for Tough Second Half
Source: The Jakarta Globe, 03 July 2013
Indonesian car producers are bracing for weaker sales for the rest of the year as the low interest rates and aggressive marketing campaigns that supported double-digit growth in domestic car sales so far this year begin to wane. Domestic car sales rose 12 % to 601,200 units in the first half this year, according to preliminary data from the Indonesian Automotive Industry Association (Gaikindo). Widyawati Soedigdo, general marketing manager at Toyota Astra Motor, said car sales have slowed since the fourth quarter of last year in line with weakening economic growth. But car manufacturers could not adjust production immediately, so the supply of cars to dealers remained high, she said. As a result, dealers undertook aggressive marketing campaigns, including discounting prices.
Further crimping sales is the fact that from June to August many consumers face costs linked to the new school year and holiday-related expenses, prompting further delays to buying cars, Mulyadi said. Car sales are a benchmark indicator of Indonesia’s household consumption, which accounts for more than half of GDP. Still, the slowdown in sales is considered temporary as car production capacity in the country are set to double over the medium term, in line with the country robust economic growth. Auto-parts manufacturers are seeking to establish or bolster production capacity to meet the increase in demand due to the expansion in production. Budi Darmadi, a director general at the Industry Ministry, said about 90 local and foreign auto-parts companies are expected to invest USD 4.5 BN in Indonesia by 2014. Budi said those investments came in response to a recent government regulation to encourage production of low-cost green cars, which have low levels of greenhouse gas emissions and are cheap to buy.
China: Sparking interest in all-electric cars
Source: China Daily, 01 July 2013
As electric vehicles become more widely used in public transportation, some local governments are moving a step further and promoting their private use. Among the initiatives is a rental outlet for all-electric cars that recently opened in a science park near Tsinghua University in Beijing. Part of the "EV Beijing Partnership" program by the Beijing Science and Technology Commission, the station offers 16 electric cars made by BAIC Motor at a lease price of USD 8 for two hours or USD 16 per day or USD 323 per month. The station is also equipped with charging facilities. According to the commission, the response has been "impressive". Fifteen of the cars have been rented not for hours or days but for months and about 2,000 applicants are now waiting for the service.
Analysts said the cost is usually high to buy an all-electric vehicle, but rental services "greatly lower the threshold". The ultimate goal of the EV Beijing Partnership is not to just rent cars, but to create opportunities for customers to experience the vehicles and help them make the decision to buy one, the commission said. After trying the vehicles, many lauded the performance of electric cars and the low cost of using electricity. But they still voiced concerns about the inconvenience finding charging facilities and the long wait for a full charge. "The ideal time for a single charge I can accept is half an hour," said Ouyang Liang, an employee at an IT company. But usually it takes about seven hours to fully charge an electric car. According to the commission, as it builds more rental stations in Beijing, more charging facilities will also be set up across the city.
Thailand: Thai auto makers look set to thrive in ASEAN
Source: Pattaya Mail, 04 July 2013
The Department of Industrial Promotion (DIP) is encouraging automakers to increase their export volumes by expanding their markets within the ASEAN region. DIP Director General Sophon Polprasit said Thai automakers should launch an aggressive marketing campaign in ASEAN to attract importers of vehicles given the positive forecast of regional growth and Thailand’s reputation in the auto industry.
The DIP will adopt a 4 step measure to promote sustainable growth in the auto industry, namely supporting the industry with facilitating factors, developing new and existing SMEs, increasing organizational efficiency to increase their competitiveness, as well as prepare them for the opening of the ASEAN Economic Community. According to Mr. Sophon, the DIP has educated manufacturers about taxes, branding and establishment of foreign networks and investment. Overseas business trips have also been organized to allow businessmen to explore ways to expand their businesses.
South Korea: Carmarkers jostle for positions in S.Korea’s electric car market
Source: Global Post, 18 July 2013
Carmakers jostle for positions in South Korea's burgeoning electric car market as Seoul seeks to encourage ordinary citizens to buy zero-emission cars by offering subsidies and tax incentives. Renault Samsung Motors Co., said it has lowered the price of the electric version of its SM3 compact sedan to USD 40K, down from the USD 53.6K price tag of its previous model imported from Renault's plant in Turkey. Separately, the environment ministry provides subsidies worth USD 13.4K to those who buy electric cars as part of the country's efforts to promote the use of electric cars that do not emit greenhouse gases largely responsible for global warming. The subsidies and exemption from taxes mean that an ordinary driver can buy the new SM3 electric car for USD 17K, according to the carmaker. In comparison, the price of the gasoline-powered SM3 ranges from USD 13.6K to USD 16.8K.
Currently, about 1,100 electric cars are being used mostly by government agencies and public corporations across the country, according to Yang Chang-joo, an official handling the issue of electric cars at the environment ministry. GM Korea Co., said its electric version of the compact Chevrolet Spark will hit local showrooms in the second half of this year. The carmaker said it will set an appropriate price for its electric car by taking into account of market conditions, an apparent reference to the price cut by Renault Samsung. Kia Motors Corp., also said it was considering whether to cut the price of its electric car, the Ray, by USD 8900 to USD 31.2K. Environment Minister Yoon Seong-kyu has pledged that South Korea will spare no efforts to establish an advanced market for electric cars, noting that his ministry has made preparations to revitalize the use of electric cars.
Japan: Cars yet to motor on abenomics
Source: Wall Street Journal, 12 July 2013
Japan’s car makers are sticking to their grim assessment for domestic sales, despite the high hopes for the economy generated by Prime Minister Shinzo Abe’s aggressive policies, dubbed “Abenomics.” While auto sales for the first six months of the year fell less than the 12% slide predicted by the Japan Automobile Manufacturers Association for the whole of 2013, the car makers’ group said it would not be revising its forecast for the year, indicating continued pessimism about a recovery in demand. Auto sales fell 8.0% in the first half from the same period last year in Japan as the end of government subsidies for fuel-efficient cars last September continued to dent demand. The industry association’s reluctance to shake off its glum view, contrasts with signs of change seen elsewhere in the economy, as Mr. Abe tries to pull the nation out of 15 years of deflation.
Mr. Abe’s administration is no doubt watching developments in the car industry closely since a healthy pickup in demand for automobiles – a major durable good – would provide more evidence of strength returning to the real economy. Perhaps one reason for the auto makers’ reluctance to adopt a more optimistic tone is the failure so far of Mr. Abe to comply with a key request of the association. For years, JAMA has been calling for two automobile taxes to be scrapped. It argues that Japanese drivers have to pay 50 times more in vehicle taxes than their U.S. counterparts. The tax on automobile purchases is scheduled for the chop in 2015 but a second tax on vehicle weight is set to live on, and could even be raised to make up for loss of funds from the other tax’s demise. As long as auto demand remains sluggish with no help from a lower auto tax burden, “it will be hard to increase (capital) spending to ramp up production” in Japan for car makers, Mr. Toyoda said.
China: Chinese automakers urged to enter use car market
Source: The Malaysian Insider, 13 July 2013
China is encouraging car manufacturers to enter the second-hand auto market to cash in on the growing sector and boost China's auto consumption, Xinhua news agency reported. Deng Li, deputy director of the Market System Development Department from the Ministry of Commerce (MOC), said China is working to speed up the development of its second-hand car market. MOC figures showed second-hand vehicle sales stood at 7.94 million units last year and growing faster than new vehicle sales but accounted for only 40 % of total sales. Part of the process will include encouraging automakers to utilise their existing dealership network to expand second-hand auto trading business. Experts said a lack of quality assurance is among the main reasons preventing Chinese consumers from purchasing second-hand vehicles.
Chinese automaker FAW Group has already entered the used car business, and is working on a second-hand vehicle project that includes several of its models. The company will provide vehicle inspection, price evaluation and car transaction services as part of the project. China also intends to build regional second-hand vehicle markets and an online national platform for second-hand vehicle bidding.
South Korea: Demand for foreign cars reaches an all-time high
Source: Global Post, 06 August 2013
The successful marketing and increasing popularity of foreign car brands has contributed to a boom in the South Korean import car market. 14,953 imported foreign-brand cars were sold in South Korea in July. This represents a year-on-year increase of 39% and an increase of 17% on June figures. In the first seven months of 2013 73,007 imported foreign-brand cars were sold in South Korea. This year 89,440 cars have been sold ñ an increase of 22.5%.
The leading four German car brands, BMW, Volkswagen, Mercedes-Benz and Audi, further cemented their dominant position in the South Korean. In July BMW sold 3,023 units, Volkswagen 2,696 units, Mercedes-Benz with 2,567 and Audi with 1,776. The South Korean domestic car industry remains solid. The leading five automobile manufacturers sold 124,963 units within South Korea compared to 113,440 units the previous month.
China: The unexploited car market of the smaller city
Source: Retail In Asia, 31 July 2013
A majority of China's car owners (55%) may currently reside in smaller, third and fourth tier cities but these markets are a long way from saturated. More than two-thirds (68%) of consumers likely to buy a car in the following year live in smaller cities and 56% of these prospective buyers would be purchasing a car for the first time. In first and second tier cities 65% of prospective buyers are repurchase buyers.
These cities, whilst not subject to the international publicity of first tier cities like Beijing, Shanghai or Guangzhou, have nonetheless themselves witnessed enormous levels of urbanization and considerable improvements in living standards. This is reflected by the potential of the car market in which a third of prospective buyers intend on spending between 13,000 USD and 19,500 USD. The joint study carried out by China Association of Automobile Manufacturers (CAAM) and Nielsen suggested that consumers in the smaller cities demonstrate a stronger preference for utility over brand, style and non essential features.
Australia: Government invests in manufacturing future
Source: Business Spectator, 05 August 2013
The Australian government is set to announce an estimated 200,000 USD investment in its domestic car manufacturing sector. The primary objective of the government intervention is to guarantee the continued existence of the car manufacturing industry and ensure that it remains globally competitive. The government argues that an investment in manufacturing is an investment in the future not the past.
The automobile manufacturing industry is hugely important to the Australian manufacturing sector and the economy as a whole. 250,000 jobs are directly or indirectly affected by its maintenance. The industry also has many positive externalities for Australian commerce such as the products of its research and development which ripple throughout the supply chain. In addition to the monetary investment the governments has sought to intervene in the market in other ways. The governmental agencies will henceforth by required to buy Australian vehicles. This will create an additional 18,000 Australian car sales a year.
India: Car sales remain weak ahead of festivals
Source: Times of India, 2 October 2013
Due to an uncertain economy and high interest rates car sales continued to remain under pressure as companies reported weak numbers ahead of the crucial festive season that begins later this week. Only companies with new models like Honda and Ford reported a double-digit growth in volumes while others such as Hyundai, Mahindra, Toyota and Tata Motors reported a year-on-year decline in volumes in September, while market leader Maruti managed a 2% growth.
Sales have been feeling a lot of pressure over the past many months and the spiralling fuel prices have only compounded the pressure on buyers, who have been reluctant to commit to new purchases. Many companies are weighed down with heavy inventory levels at dealerships, notwithstanding offering customers attractive discounts and giveaways. "In the current market scenario, volume growth is a big challenge. We expect market challenges to continue and have a cautious optimism for the upcoming festive season" said Rakesh Srivastava, Sr VP at Hyundai Motor India. The company's sales dropped 1% in September this yea.
China: Beijing not giving up on the electric car with substantial subsidies
Source: Quartz, 22 September 2013
Beijing hasn't given up on the race to dominate electric cars. In 2010, China announced ambitious aims to capture the global electric car market by putting 500,000 electrified vehicles on their roads by 2015. Today however, China only has 40,000. But China isn't giving up. On Sept. 17, Beijing renewed subsidies for electric cars, plug-in hybrids and fuel cell vehicles. They are substantial – a buyer of an electric car receives a direct payment of USD 9,800. (The payment is USD 5,700 for a plug-in hybrid and up to a whopping USD 81,000 on the purchase of a hydrogen fuel-cell vehicle.) But analysts doubt the renewed subsidies will finally trigger a buying binge; the cars will still cost more than pure gasoline-fueled vehicles, and will cover less ground and lack the convenience of quick refueling. In short: Despite the new subsidies, China still faces an uphill battle to get motorists to embrace electrics.
China's difficulties boosting the number of electric cars are surprising. After all, unlike the West, China's leaders at least purportedly have substantial powers to compel companies to produce certain cars and push people to buy them. But the strong hand of the government can only go so far. Chinese officials latest policies cut†the high numerical sales goals for electric vehicles, while encouraging car companies to get back to the lab and make their batteries and hydrogen fuel cells better and cheaper. As motivation, the announced subsidies gradually scale back, a message that ultimately China's car companies must prove themselves to motorists in China's version of the marketplace.
Australia: Scraping of proposed changes to Automotive tax gives positive outlook for industry
Source: Yahoo Finance, 27 September 2013
Following the abandonment of proposed changes to the fringe benefits tax, Australia's largest automotive retailer is even more positive about the outlook for car sales. Automotive Holdings Group (AHG) currently operates more than 150 car and truck dealerships across the country. AHG's outlook for the automotive retail segment is full-bodied heading into FY2014 on the back of low interest rates, manufacturer support, continual advancements in the quality and safety of new vehicles and overall vehicle affordability levels.
The former Labor government had planned to stiffen FBT guidelines on car leasing and salary-sacrifsice packaging. The coalition government has dumped the previous government's FBT changes, which were heavily criticised by the auto sector because of their potential detrimental impact on consumer demand. AHG said new vehicle sales remained at record levels up to August 2013, buoyed by manufacturer incentives of low interest rates and service offerings. Acquisitions and new business opportunities are expected to generate growth for AHG into the 2013/14 year.
South Korea: South Korea turns up the heat on foreign car markers
Source: Reuters, 17 June 2013
Recent free trade deals have helped foreign premium-brand automakers such as BMW and Mercedes-Benz drive up sales in South Korea, previously a heavily protected market dominated by Hyundai Motor and affiliate Kia Motors. In January-April, sales of imported passenger cars accounted for 12 % of the market, a fifth more than last year and up from just 2 % a decade ago. Hyundai/Kia sales were flat. Now, the Koreans look like they're trying to push back the foreign tide. Foreign automakers and distributors say various moves by Korean lawmakers and government agencies aim to make life tougher for them. Privately, some talk of "import bashing". In March, South Korean lawmakers proposed a bill to reduce corporate tax breaks on cars priced above USD 44 K and bought as company cars - typically those top-of-the-range models from German, Japanese and U.S. automakers.
In February, Korea's Fair Trade Commission (FTC) raided the offices of the Korea Automobile Importers and Distributors Association and of Volkswagen's Audi, BMW, Daimler's Mercedes-Benz and Toyota Motor's Lexus as part of a probe into possible price collusion, according to local media. And this week, local media reported that BMW Korea was being investigated by the tax authorities. An official at the foreign car association refuted price-fixing charges, saying this was impossible given there are 400 or so foreign models involved. Toyota, BMW, Mercedes-Benz and Volkswagen confirmed their sales offices in Seoul were raided, but declined to elaborate. Hyundai and Kia have over 70 % market share in South Korea, but that is being eroded by imports following free trade agreements struck with the European Union in mid-2011 and with the United States eight months later.
India: Amid gloom in auto sector, Japanese firms stand out
Source: Business Standard, 20 June 2013
Even as domestic passenger car sales hit a decade-low last financial year, forcing major automobile companies to resort to production cuts, a clutch of car makers with parent companies operating out of Japan, have lined up investments of about USD 2.15 BN to enhance capacity. While Maruti Suzuki is set to invest about 1 BN to add capacity of about 500,000 units across Haryana and Gujarat by 2015-16, Honda Cars India has commenced work to double production by making operational a second facility at Tapukara (Rajasthan) by 2014. Nissan, set to debut the Datsun brand in India later this year, is learnt to be evaluating possibilities to expand capacity to about 600,000 units at its Chennai unit. In fact, despite the slowdown in the industry, these Japanese car companies have been able to improve their collective market share from 47.9 % in 2011-12 to 49.4 %. (Japanese auto investments in India)
This growth came at a time when major car companies across the board, apart from utility vehicle maker Mahindra & Mahindra (which saw sales increase 26 % to 319,707 units), struggled to raise volumes. While the share of European car makers such as Volkswagen, Fiat, BMW and Mercedes improved from 5.5 % to 6.5 %, largely driven by the success of the Renault Duster, the market share of US-based Ford and General Motors dropped to 6.2 % from 7.7 %. Given the uncertainties clogging sales in India, the Germany-head quartered Volkswagen Group is learnt to have shifted to a pause-mode here and has, instead, shifted focus to China. The company has said no major investment, either for capacity expansion or new product development, for the Indian market is likely till 2015. Mahindra & Mahindra, too, is said to have adopted a cautionary stance regarding its USD 663.7 MN investment in a new manufacturing facility, owing to "challenging" market conditions.
Malaysia: Local car markers urged to invest in new technologies
Source: Free Malaysia Today, 24 June 2013
Local car manufacturers have been urged to invest in new technologies to boost green vehicles production in Malaysia, via partnerships with international automakers. International Trade and Industry Ministry (MITI) secretary-general Datuk Dr Rebecca Fatima Sta Maria said local car manufacturers had to perform with a bang in this green vehicle area, otherwise they would be left out in the current trend towards energy-saving vehicles. Malaysia's national carmakers, Proton Holdings Bhd and Perusahaan Otomobil Kedua Sdn Bhd (Perodua), had transformed Malaysia from a mere motorcar assembler, into a global car manufacturer with export business. However, to further enhance their sustainability, Dr Sta Maria said both Proton and Perodua should engage actively in commercialising energy-efficient vehicles in line with the rising car ownership rate in Malaysia.
Foreign automakers such as Honda, Toyota and Lexus are very much on track in producing energy-efficient vehicles, to meet the increasing demand for such cars in Malaysia. Hence, she said investing in the development of hybrid and electric vehicles bears the benefits of acquisition of new and high-end technology, as well as promotion of a more sustainable energy policy. Taking that into consideration, a comprehensive mix of fiscal incentives, duty exemptions and customised training and research and development grants was included in the National Automotive Policy (NAP) review to maximise returns on investment. Under the new measures in the NAP review (effective from Jan 1, 2010) there is a segment to promote hybrid and electric vehicles and the development of related infrastructure to encourage local automakers to explore into advanced technology area.
Taiwan: Q2 auto industry output forecast to increase 6.3%
Source: Taipei Times, 21 May 2013
The production value of the nation's auto industry is expected to rebound in the second quarter, driven by the launch of new models and more promotional campaigns, the Industrial Economics and Knowledge Research Center (IEK) said. The output of the local auto sector is likely to total USD 1.57 BN in the second quarter, up 6.3 % from the previous three months, the center forecast. The sector is expected to benefit from the launch of new vehicle models and extended promotions announced by automakers in the first quarter, which will boost consumer interest, the government-funded institute said. In the January to March period, the output of the auto industry declined 8.7 % from a quarter earlier to USD 1.47 BN because of a reduced number of working days and delayed buying due to concerns over a falling yen, the research center said.
Some local sales agents for Japanese automakers have canceled their plans to raise prices in reflection of the yen's decline, while some vendors have cut prices by between 3 % and 6 % since the beginning of March, according to the institute. For the whole of this year, the production value of the local auto industry is expected to total USD 6.3 BN, up 1.6 % from last year, the IEK said, lowering its forecast from the 1.7 % growth it estimated in February. In the auto parts sector, output for this year is likely to grow by an annual 6.5 % to USD 6.96 BN, in reflection of recovering demand in the US, Japan and Europe, the research center said. Sales of new cars totaled 28,844 units last month, up 5 % from March and 0.8 % from a year earlier, according to government statistics. In the first four months of this year, auto sales declined 4.2 % year-on-year to 119,131 units due to weak buying, the data showed.
South Korea: Foreign Cars Boom in 2nd-Hand market
Source: Chosun Media, 21 May 2013
The number of vehicle transfers rose 2.25 % on-year to a record 1.14 million in the first four month of this year, the Transportation Ministry said. But that does not mean consumer confidence is returning. While sales of foreign and second-hand cars increased, sales of new Korean models dwindled 1.5 % on-year over the same period. The main reason for booming sales of used cars is that they are cheaper, but the improving quality of models that come on the market and ease of online transactions also contribute to the trend. Imported cars are hugely popular. In the second-hand market, three-year-old foreign cars cost little more than half of their original price tag.
At SK Encar, the nation's biggest second-hand car dealer, registration of foreign cars far outpaced that of domestic models for the last three years, at 40 % against 24 %. Of overall offerings, imports account for 12.3 % this year, up 7.8 % in 2009. The sales volume of new foreign cars hit the 100,000 mark for the first time in 2011. As cars begin to be traded in the second-hand market after two or three years of use, the used-car market will likely see a flood of foreign cars this year. Reflecting soaring interest, the top search word on the used car dealer's website was BMW 520d, with 290,000 hits in the first quarter of this year.
Australia: Car production in Australia not at an end
Source: Sky News, 26 May 2013
Manufacturing of cars in Australia will continue despite Ford ending local production in October 2016, Trade Minster Craig Emerson says. Ford announced about 1200 workers will lose their jobs at its two plants in Victoria by October 2016. Its profits have been squeezed by the high Australian dollar, making exports more expensive and imports cheaper. "We don't accept we should preside over the end of the automotive industry here in Australia - that is coalition policy," Dr Emerson said. He said Labor policy recognised around 50,000 people were employed making motor vehicles and components in Australia. Ford lacked a plan to export cars and components to other areas where the global company made vehicles, unlike rivals Holden and Toyota, Dr Emerson said. "Ford were working on a business model that really didn't offer long-term prospects, where they should have realised they needed to integrate into that global supply chain earlier," he said.
Opposition industry spokeswoman Sophie Mirabella said the coalition would establish a Productivity Commission review into the automotive industry to find a viable funding model for it. "If companies don't qualify once the new funding model is set up, I'm not going to do special deals behind closed doors because it makes a mockery of having benchmarks that companies need to reach in order to be granted the privilege of taxpayers' dollars," she told Network Ten. Opposition environment spokesman Greg Hunt said cars should be manufactured competitively in Australia, and a coalition government would help by reducing imposts like the carbon tax. Dr Emerson said coalition policy was to cut subsidies to the car industry of around USD 500 MN by 2015 if elected, forcing a rethink by Holden and Toyota about the viability of remaining in Australia. Australian Industry Group boss Innes Willox said there were huge benefits to maintaining the automotive sector, and giving it up would leave a hole in the economy.
Australia/Malaysia: Australia primed to provide expertise to Malaysia's automotive industry
Source: Aus Trade, 30 May 2013
Australia's automotive capabilities put the nation's exporters in a strong position to provide components, research and development (R&D), technology and other expertise to Malaysia as the South East Asian nation works to become a major producer of hybrid cars and other higher-value vehicles, an Australian Trade Commission (Austrade) senior representative said. "Australia has a proud automotive history and is one of only 13 countries with the capability and know-how to design a car from scratch and take it through to final production at world-class quality standards," Austrade Senior Trade Commissioner Susan Kahwati said.
In the interests of collaboration, Malaysia Automotive Industry (MAI) chief executive Encik Madani Sahari invited Malaysian automotive companies wanting access to Australian expertise to approach MAI for assistance. "By working together, Australian and Malaysian automotive companies can leverage their complementary skills and capabilities to access demand in the broader ASEAN market," Ms Kahwati said. The Malaysia-Australia Free Trade Agreement (MAFTA), which came into effect on 1 January 2013, eliminates tariffs across the automotive and other industries, and provides majority ownership rights for providers of financial, professional, educational and other services.
China: Auto-industry faces uphill challenges
Source: China Daily, 30 May 2013
A leading industry analyst has warned that China's automobile sales could slow considerably within the next two years, choked mainly by the inability of roads and highways to cope with the growing volume of traffic, particularly in the major cities. Hou Yankun, head of China Equity Research and head of Asia Autos at UBS Securities, said that 2013 will witness the "last wave" of sales surges in China's auto industry. Hou stressed that bottlenecks already exist in infrastructure development, which is likely to lead to more vehicle purchase restrictions in the near future. Many analysts still hold the view that the Chinese market is promising due to its low penetration rate, which is around 8 %, compared with 50 % in developed economies. Moreover, affordability of cars is rising, as prices continue to drop and people's income swells. Theoretically speaking, if car affordability continues to follow the examples of Japan and South Korea, sales could maintain rapid growth for at least 10 years in China.
But Hou said the ability of the country's roads to cope with that level of growth is already being stretched. Mega-cities including Beijing and Guangzhou have already introduced car-purchasing restrictions, and people in Shanghai have to enter an auction for car licenses because of massive demand. Some industry commentators noted that China's auto industry is also starting to face an oversupply of vehicles. Several of the country's major automakers have raised their capacity targets over the next few years, which could push vehicle production past government projections, listed as 37 million units in the 12th Five-Year Plan (2011-15), to as much as 40 million by 2015. "If China could effectively cut the occupancy of roads by a single car through improving its public transportation system, and sufficiently exploring the rural market, it could still achieve a high auto penetration rate of 50 %," Hou added.
Indonesia: Indonesia approves cheap, green car tax incentives
Source: Reuters, 05 June 2013
Indonesia said it has approved tax exemption for the production of low-cost, low-emission cars, a long-awaited move that should be a significant boost for Toyota Motor Corp and Daihatsu Motor Co Ltd joint ventures in Southeast Asia's biggest economy. Both Japanese producers have local tie-ups with Astra International Tbk PT, which dominates Indonesia's fast-growing auto market, and already have production facilities in place for so-called low-cost, green cars, or LCGC. Industry Minister M.S. Hidayat said no luxury tax would be imposed on cars or station wagons with engine capacity of up to 1,200 cc and with a minimum fuel consumption of 20 km per litre. Tax exemption would also apply to diesel or semi-diesel vehicles of up to 1,500 cc, also with minimum fuel consumption of 20 km per litre.
The current tax for new vehicles ranges from 10-75 % depending on engine size. Only emergency vehicles, such as ambulances, are tax exempt. Some analysts have forecast that the policy could eventually boost Indonesian vehicle consumption by a third. Indonesian auto sales, buoyed by an expanding middle class, hit a record 1.1 million last year though the figure is expected to be slightly lower this year because of likely fuel price increases and higher down-payment requirements.
Japan: Japanese carmakers turn to Chinese parts for China market
Source: Gasgoo, 22 April 2013
The quality of Chinese-made car parts has improved and, facing tougher competition in what is now the world's biggest autos market, Nissan and its Japanese rivals Toyota Motor Corp and Honda Motor Co Ltd are having to increase the locally made content in their cars. This is a big step for Japanese automakers that have built a global reputation for quality through close relationships with known and trusted suppliers, many of whom they own and control and with whom they jointly design and develop components. But, at the fast-growth end of the Chinese market - the sub-USD 10,000, no-frills cars that appeal to a new generation of drivers - the Japanese are going bumper-to-bumper with local manufacturers such as Geely as well as some global brands, and they need to contain their costs. This segment of the market is seen as a key battleground for all carmakers as growth is forecast at nearly 40 % over the next two years.
Entering China a decade ago, Japan's automakers relied heavily on parts from their affiliates, or "keiretsu" companies, which were often imported from Japan or elsewhere. To check costs, the automakers urged suppliers to shift production to China - and Honda and Nissan say they can now secure more than 90 % of their car parts locally depending on brand. But even these parts made by "keiretsu" suppliers at Chinese plants are more expensive than those from Chinese manufacturers as they often rely on materials imported from Japan. Now, a firmer yen and a lingering anti-Japan sentiment from a territorial row between Asia's two leading economies last year are adding pressure for automakers to source more parts from local Chinese suppliers. Until now, the battle for the sub-USD 10,000 car market has been between Chinese firms. But as the higher-end market is crowded and volume sales are at the cheaper end, the entry-level segment is one that foreign automakers can no longer ignore.
Indonesia: Indonesia eyes bigger role as vehicle production base
Source: Channel News Asia, 25 April 2013
The Indonesian government is hoping the country will become an automotive production base particularly for four-wheel vehicles. Indonesian news agency ANTARA quoted Ansari Bukhari, Secretary-General of the Ministry of Industry, as saying that there had been an increase in vehicle exports to several countries such as the Middle East.
"We want Indonesia to become a production base not only to meet domestic demands. We can utilise the potential that exists around us and if it can be synergised with APEC members it would be better," he said. The automotive dialogue with APEC countries is expected to open up market access, said Ansari. "The policy would not make any regulations that are contrary to what have existed," the Minister clarified, while adding that Indonesia is keen to strengthen its spare parts production sector and will prepare to enter a larger scale automotive industry in future.
Vietnam: More luxury cars to make debut in Vietnam
Source: Vietnam Net, 28 April 2013
Automakers will continue to bring high-end cars into Vietnam although the domestic market is described as small and business development has not been favorable as expected, especially in the context of economic woes. Euro Auto, official importer and distributor of BMW cars in Vietnam, said it will debut the Mini brand of BMW Group in the local market to exploit the segment of high-end small cars. The company will start distributing Mini cars in the fourth quarter at the first dealership for this brand in Hanoi. In the near future, customers in Vietnam will also easily buy Peugeot cars assembled at home with after-sales service in accordance with the standards for this French luxury car line. It is because Truong Hai (Thaco) has recently partnered with French automaker to assemble and distribute Peugeot vehicles. In addition to locally-made cars, Peugeot automobiles will be imported directly from the factory in France.
Another luxury brand namely Lexus whose debut has been delayed due to the market downturn will officially make its market entry late this year or early next year. Since this is a Toyota brand, Toyota Vietnam will be the only distributor of this model in Vietnam. Moreover, other renowned car manufacturers such as Lamborghini, Rolls-Royce and Bentley are also eyeing Vietnam's automobile market. In fact, the above brands are getting more popular in Vietnam. However, to establish of a dealership for distributing cars of famous manufacturers, one must satisfy extremely stringent requirements, make careful preparations and cover huge investment costs. Despite a market described as infant and unpredictable, Vietnam still attracts the attention of renowned automobile brands in the world. According to auto traders, although the market is small, its real potential is very large as the number of car users is still low compared to the world's level.
Japan/Korea: Japan overtakes South Korea in battle for automotive dominance
Source: Financial Times, 08 May 2013
Toyota’s Camry midsize saloon has dominated its competition for so long that another car of the year award, in a small market where it sells only a handful of units, would hardly seem like cause for excitement. But when the Korea Automobile Journalist Association voted the latest version of the Camry the best car of 2013 in January, it created a stir. After several years of breakneck sales and profit growth that have turned Hyundai, and to a lesser extent its smaller sister company Kia, into titans of the global industry, things have cooled lately. Hyundai and Kia have forecast their slowest sales growth for a decade this year, with a strengthening won likely to exacerbate the impact of a decision to hold off on new production capacity. The slowdown is especially apparent when contrasted with the situation in Japan, where, thanks partly to a plunge in the value of the yen, Toyota and other producers are experiencing their strongest earnings growth in five years.
One of the main reasons that foreign investors want to move away from Korean autos is currency shifts. However, there are other forces at play too. In Japan, carmakers responded to the yen’s prolonged appreciation by slashing costs – standardising more parts, for instance, and strong-arming suppliers to reduce their prices. In Korea, meanwhile, some say the new and more measured pace of growth is at least partly intentional. Having emulated Japanese rivals’ earlier rise to prominence, Hyundai insiders say it is keen to avoid the problems that afflicted Toyota in 2010, when serious safety problems prompted a high-profile recall of millions of vehicles. While there have been a few recent price cuts by Japanese automakers, they are unlikely to execute large-scale cuts for fear of eroding brand value. However, they might find other ways to lure potential Hyundai buyers – by turning extras into standard features, say, or increasing the commission offered to car dealerships.
Philippines: Auto parts makers hopes rise
Source: Malaya Business Insight, 07 May 2013
The automotive parts industry is expecting a turnaround this year after suffering from smaller volume of exports in 2012. The high expectation is anchored on marked improvement of car sales in key markets such as the United States, members of the ASEAN region and Japan. The Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) said exports are expected to grow 16 % this year from 2012 when it fell 6.8 %. Exports to the Asean region have remained strong, helped substantially by the fact that 55 % of total car sales in the Philippines come from the region. These automobiles also use parts made in the Philippines. Citing a report of the National Statistics Office (NSO), the MVPMAP said exports last year stood at USD 3.495 BN, down 6.8 % from USD 3.751 BN in 2011. About 90 % of automotive parts and components exports are supplied by the MVPMAP members. The Philippine automotive parts sector is a net exporter. Its exports in 2011 of USD 3.8 BN accounted for 7 % of total exports in that year.
The industry has a comparative advantage in the production of wiring harness, propellers and shafts, transmissions, tires and auto electrical parts In the lamps, mold and die, disc brake side of the business, the Philippines is second to Thailand in tie lamp manufacturing, and second to China in die casting and at the bottom in brake parts. “In terms of cost competitiveness, the Philippines is lagging except in mold and die due to heavy reliance on imports and low productivity due to low production,” a roadmap on the parts sector said. The country is a key player in the automakers’ production networks: such as Toyota for its innovative multipurpose vehicle for the production of manual transmissions; Philippine Auto Components, a subsidiary of Denso, manufactures one of the most advanced auto parts for both domestic and export OEMs (aircon parts, instrument clusters, radiators). The domestic parts industry hopes to increase exports of parts to USD 6 BN by 2015.
Indonesia: Indonesia’s 18% Car Sales Growth Defies Slowdown Talk
Source: The Jakarta Globe, 07 May 2013
Car sales in Indonesia grew by 18 % in the first four months this year compared to the same period in 2012, with smaller brands like Honda and Suzuki posting the fastest growth. The figures mean that this year’s growth is matching that achieved last year, despite fears expressed by the industry earlier this year that 2013 growth would be flat. Some 397,991 units were sold in the January to April period, according to preliminary data. Jonfis Fandy, marketing director at Honda Prospect Motor, said carmakers introduced new models and face-lift versions early this year and also introduced efficient fuel consumption in a bid to prop up sales amid tighter auto-financing rules, higher production costs due to wage increases, expensive imported materials and a subsidized fuel price increase.
Indonesian Automotive Industry Association (Gaikindo) previously predicted that automotive sales would remain steady at around 1.1 million cars this year, matching last year’s result. “As with the last subsidized fuel price increase in 2006, we expect the impact to be temporary and indirect on car sales,” Widyawati Soedigdo, general manager for corporate planning at Toyota Astra Motor said. “On the other hand, tighter Islamic financing regulations will have a bigger impact.” More than two-thirds of car purchases are made on credit. Bank Indonesia last year increased the minimum down payment required for commercial bank loans for car and motorcycle purchases and subsequently implemented the policy on Islamic banks to prevent arbitrage. Sales could to rise 7.5 % 1.2 million this year, should car makers introduce low-cost and energy-efficient cars this year, say experts.
Australia: Automotive sector at risk of collapse
Source: Business Spectator, 13 April 2013
Former Nissan Australia head Ivan Deveson has warned that if one Australian car manufacturer shuts down its operations, the entire Australian auto sector will collapse, according to The Australian Financial Review. Mr Deveson said he agrees with former Ford chief executive, and current BHP Billiton Ltd chairman, Jacques Nasser, who recently said that the Australian car industry is at risk of collapsing. The three automakers left in Australia, Ford, Toyota and General Motors Holden, are all in varying states of uncertainty. GM recently announced 500 Australian job cuts, while there is speculation that Ford will halt its auto manufacturing in Australia after 2016.
Mr Deveson added that exports, which have been hit hard by the strong Australian dollar, are the only key to success for the sector. "There's no doubt with the three of them, if one was to fold up, the impact of the supplier industry would be devastating and probably cause the other two to pack their bags," Mr Deveson said, according to the AFR. Australian Workers Union national secretary Paul Howes added that Australia's auto sector is reaching a "tipping point" that will be determined by the extent to which governments intervene to prop-up the sector.
Korea: Imported car sales jump 13% in March
Source: Korea Herald, 05 April 2013
Sales of foreign-made vehicles in South Korea spiked more than 13 % in March from a year earlier, boosted by steady-selling models, a trade association said. A total of 12,063 foreign brand cars were sold here last month, up 13.3 % from a year earlier, according to the Korea Automobile Importers and Distributors Association. In the first three months of 2013, a total of 34,964 foreign vehicles were sold in the country, also up 19.4 % from a year earlier, the association said.
BMW topped the list with 2,924 units sold last month, leading Germany's dominance of the South Korean imported auto market. Mercedes-Benz followed with 2,122 units, trailed by Volkswagen with 1,650 and Audi with 1,282. Sales of imported cars in South Korea jumped 24.6 % on-year to a record high of 130,858 units last year as foreign brand vehicles have successfully made their presence felt in the country.
China: Prices for luxury automobiles in China may decrease
Source: Gasgoo, 10 April 2013
Experts predict prices in the import car market in China to fall in the near future. Analysts say that the price fall may spread to luxury vehicles unless dealership inventories are reduced. The Mercedes S-Class was one of the first import luxury models to receive a noticeable price cut in the country, with its price being cut over USD 47,887 last year. It was followed by other import models, as several dealerships were put under considerable stress due to a variety of market factors, including decreasing consumer demand.
According to Wang Cun, head of marketing and sales for the China Automobile Trading Company, China imported a total of 53,200 automobiles in February. The figure represents negative year-on-year growth of 54.2 %. A total of 140,000 vehicles were imported over the first two months of the year. Mr. Wang pointed out that the import quantities are below average levels, which means that growth in inventory levels are remaining relatively stable. As a result, Mr. Wang points out that it is hard to accurately predict future pricing trends in the country. However he does expect import levels to recover over the next few months, which would cause prices to decrease.
China: Chinese auto brands get greater chance
Source: People Daily, 22 March 2013
With government support, home-grown auto brands will have a good chance to enter an official vehicle market currently dominated by foreign brands, analysts have said. China's official vehicles, or those purchased by government departments for official use, are currently dominated by foreign brands like Volkswagen, Audi, Toyota and Buick. Premier Li Keqiang said that spending on hospitality, overseas trips for official purposes and purchases of official vehicles will be reduced. The government has shown its support for indigenous automobile brands in a draft catalog of car models for government procurement released last year. The catalog, released by the Ministry of Industry and Information Technology in March 2012, included only domestic car models.
"The direction of China's official vehicle reform is very reasonable," said Li Shufu, chairman of Zhejiang Geely Holding Group, a leading automaker. Li said the government's policies will bring benefits for the country's indigenous brands. The Hongqi H7, a luxury car model manufactured by the China FAW Group Corporation, has been ordered by more than 10 provincial government and some central government departments, company president Xu Xianping said. However, since government procurement only accounts for about 3 % of China's auto market, experts believe the procurement is mainly intended to encourage purchases of domestic brands. To gain the trust of consumers and become competitive in the market, Chinese auto companies must continuously improve their product quality, Zhang said.
South Korea: S. Korea's small car sales drop on prolonged slump
Source: Korea Herald, 25 March 2013
Sales of small cars in South Korea sank in the first two months of the year due to weak demand stemming from the country's protracted economic slump, industry data showed. According to the data, a total of 28,711 small cars with engine capacities of 1.0 liter were sold in the country in the January-February period, down 8.2 % from a year earlier. The overall domestic passenger car market, however, shrank at a lower rate of 2.8 % during the cited period, the data showed, indicating that low-income earners' purchasing power fell by a wider margin. Demand for small cars had remained high in the country for their fuel efficiency and driving convenience.
Last year, a total of 202,854 small cars were sold in South Korea amid high fuel costs with Kia Motors Corp.'s Ray, released in late November 2011, leading the overall growth. There are currently three small so-called city car models in South Korea – the Chevrolet Spark made by GM Korea Co., and the Morning and the Ray produced by Kia Motors. "If the current trend continues, this year's sales of small cars will be less than 200,000 units," said an official at Kia Motors. On the other hand, sales of sport utility vehicles surged this year with a total of 37,425 units sold in the first two months of the year, up 18.5 %, the data showed. Market watchers said the economic slowdown may further sap demand for small cars that are cheaper to buy and operate, but high fuel costs may prevent a sharp drop in sales of small cars here.
Thailand: Government to offer automakers new eco-car chance
Source: The Bangkok Post, 27 March 2013
The decision follows the growing popularity of small cars, helped in no small part by the recently concluded first-time car buyer scheme. The populist policy may have stirred up controversy, but the tax rebates to customers helped to boost annual vehicle sales to 1.3 million units last year. As well, the Thai government wants to promote the country as one of the world's leading automotive production hubs. After hitting a new milestone of 2 million vehicles produced last year, the state wants to raise the target to 3 million by 2017.
Leading car companies that have established large manufacturing facilities in Thailand but missed out on the eco-car boat have expressed approval for the anticipated second round of applications. Executives from Ford and Mazda say they will likely participate in the new eco-car programme since such products are mostly B-segment small cars with unusually low prices due to benefits such as lower excise tax, duty-free importation of machinery and corporate income tax exemption. Even if the proposed carbon dioxide-based excise tax system does take effect as planned in 2016, eco-cars will enjoy lower rates than their ineligible counterparts with other engine or fuel types. The source said the new eco-car applications will automatically lead to more investment in production capacity, more jobs and a higher-value-added parts supply chain.
Korea: Imported cars have changed market landscape in Korea
Source: The Korea Herald, 24 February 2013
Imported passenger cars have seen tremendous growth in South Korea over the last few years. In 2012 for instance, BMW Korea sold three times more cars than it did in 2009. However, contrary to other markets with similar or even higher growth rates, the total domestic market has been quite stable, with annual sales totaling around 1.2 million units. One major reason for this development is obviously the general change of mindset in Korean society. What may have given rise to social discrimination ten years ago is now a symbol of professional success and personal confidence. In addition to this, the Korean-based importers have also contributed their part. They have continuously analyzed the local market needs to provide the right products (models, engines, options), streamlined their logistic processes and created a broad and reliable network of retail stores.
The Korean car manufacturers might face new challenges. Chinese, Indian and Russian cars may hit the market and tap the lower price segments. At the other end of the spectrum we might see the Japanese manufacturers coming back strong if the currency environment continues to provide warm tailwinds. Also, near-premium brands may continue their conquering expedition. Finally, the premium segment including BMW will continue to launch new models, present new body type niches, and invent new mobility concepts. At the same time, the race is on for new engine technologies, new drive concepts and new communication philosophies. The Korean car manufacturers are perfectly aware of these developments ahead. They will continue to invest in R&D to catch up with high-end engine and underbody technologies to improve performance and fuel efficiency. Having said that, it looks like the domestic market could become a testing kitchen where Korean and foreign chefs can compete for the customers' favor.
China: China's new electric cars subsidy to expand
Source: China Daily, 27 February 2013
China is expected to subsidize electric vehicles sold in 25 model cities, expanding from the current five cities, and adopt a unified national subsidy standard, 21st Century Business Herald reported citing China Association of Automobile Manufacturers. "The new subsidy policy for electric vehicles, still under research, will be issued soon, possibly shortly after the two sessions of NPC and CPPCC," said Ye Shengji, deputy secretary general of China Association of Automobile Manufacturers.
The central government's subsidies for electric cars, introduced in 2010, used to be as much as USD 9,631, but the policy was terminated in 2012. Currently, local governments decide the amount of subsidy in their local regions.
India: Vehicle sales decline 16% for third month in a row
Source: Business Standard, 02 March 2013
Domestic passenger vehicle sales declined for a third month in February with eight Indian car makers posting a combined drop of 15.8 % to sell 197,066 vehicles. While the preliminary numbers are only indicative, as some companies are yet to report their monthly sales data, industry observers say February might have witnessed FY13's sharpest decline. Market leader Maruti Suzuki, which has been clawing back share since the normalisation in operations late last year, registered a nine % drop in domestic sales at 97,955 units. Rakesh Srivastava, vice-president (sales and marketing), Hyundai Motor India Limited (HMIL), explained, "The market was suppressed, as there was a drop in enquiries, with lower rates of conversions to purchase. The increase in fuel prices negatively impacted the already low market sentiments. We expect the challenge to continue in the next quarter, until there is a significant change in macro-economic conditions."
The drop in volumes was even sharper at Tata Motors, at nearly 70 %. The firm could sell only 10,613 units last month, compared with 34,832 units in the corresponding period last year. The company says it registered combined sales of 7,769 units of small cars Nano, Indica and Indigo" far lower than the initial expected volumes of 20,000 units a month of Nano alone. Only Mahindra & Mahindra and Renault India managed to buck industry trend. While M&M's sales increased 14 % to 23,421 units, on the back of diesel-powered utility vehicles, Renault rode high on the success of compact sports utility vehicle (SUV), Duster. Renault sold 6,723 units last month, with 83 % of the volumes coming from the Duster.
Malaysia: Local car manufacturers urged to boost production
Source: China Daily, 14 March 2013
Malaysian car manufacturers must step up production should they want to continue operating and compete once the country's automotive industry is further liberalised, said Deputy Prime Minister Muhyiddin Yassin. Manufacturers, he said, should also assist their component suppliers via research and development activities in order for them to remain competitive and meet the needs of both the local and global markets. "The government has always thrown its support behind the needs of the automotive industry due to the crucial role it plays in generating the economy. "However, we cannot run away from the challenges of globalization and with a highly competitive market, it is important that the manufacturers get ready to face stiff competition," said Muhyiddin.
The government, he said, had made detailed planning to ensure that any change as a result of market liberalization was systematic to avoid a negative impact on the automotive industry. The price reduction of between 3 % and 5 % or between USD 703.5 and USD 5436 for new cars in the fourth quarter of last year was the start of the government's long-term plan to lower car prices, he pointed out. Malaysia, said Muhyiddin, had also announced its plans to be a manufacturer of energy efficient vehicles (EEV), adding that car manufacturers could play their role by assisting the support industry to develop components and parts complementing such vehicles.
India: Indian auto market size to triple to 9.3 mn units by 2020
Source: Business Standard, 12 March 2013
Car sales in India may be on a downside at present but industry analysts believe that the total automobile market size will triple to 9.3 million units by 2020. Driven by enhanced demand as the number of people with disposable income increases, the sector will grow at a compounded annual growth rate of 16% during the period, they say. Explaining the factors that will drive the growth, they say, "As India's economy grows, the number of people with more disposable income is bound to increase. Moreover, there will be a sizeable amount of young population, who are going to be potential customers for cars." Further, the infrastructure improvement in India will also play a role in the growth of the automobile market.
There are short term challenges in India like the high interest rates, inflationary pressures but in the long term it has the advantages of having stable government and legal systems. However, India would need to have consistent policies, especially when it comes to issues related to the sector such as fuel pricing, for the sector to fulfil its potential. For instance, due to ambiguity of diesel pricing many OEMs are unable to fix their plans. Together with that, the Indian pyramid will not change and the small car will continue to dominate although the %age can slightly decrease to about less than 70% to 60% from the current 70% of the total car market. Going forward, automobile companies in India will adhere to the pursuit of profitable growth rather than chasing market share.
China: China to extend subsidies for new energy cars
Source: China Daily, 13 March 2013
Officials from China's auto industry are seeking to expand a subsidy program for electric cars, across 25 Chinese cities. During the on-going two sessions in Beijing, China's Minister of Industry and Information Technology, Miao Wei, announced that the subsidies for new energy cars will be extended by three years. China has started promoting new energy cars in 2009, with public transport used as a pilot zone. As of last year, there were nearly 28,000 new energy cars in 25 Chinese cities, and 80 % of them were buses.
China's Minister of Industry and Information Technology, Miao Wei noted that the central government will step up investment in clean energy cars and extend subsidies for the promotion of electric vehicles. Meanwhile, the new electric-car subsidies will be made available in more cities and will be expanded to cover other types of fuel-efficient cars, including hybrid vehicles. Wan Gang, CPPCC member, Ministry of Science & Technology, said, "We should make more efforts in the area of technology innovation and we also need to open up new markets, including buses and private cars." Subsidies are currently offered to private buyers of new energy cars, but analysts say more coordinated policy action will be needed in the long run so as to encourage more private buyers in the future.
Thailand: 2013: Another challenging year for industry
Source: The Nation, 11 January 2013
Thailand's automobile industry sped ahead with many important achievements in 2012, ranging from production of more than 2 million vehicles to domestic sales of over 1.4 million. This has helped the country to become the world's 10th largest auto producer five years before the target set by both the government and private sector. Well, 2013 is another challenging year for the industry. The Auto Industry Club of the Federation of Thai Industries and the Thai Automotive Industry Association both believe that auto companies are firmly on the road to maximizing production in order to satisfy demand, especially those generated by the government's First Car Buyer Program. The scheme had attracted 1.25 million applications for tax rebates, which blew the top off previous forecasts.
This year, the total production target has been set at 2.5 million vehicles, but we could see as many as 2.7 million being produced depending on the potential of each manufacturer. Last year was a historic year indeed for the country's auto industry due to the First Car program. But the scheme has also been blamed for distorting the auto market, despite the fact that everyone seems to be happy about it. Although demand is expected to weaken due to the end of the First Car scheme, Honda still has aggressive plans and has set a sales target of 200,000 vehicles from a total market of 1.2 million. Industry sources say Honda Japan will need some time to carefully consider the investment, which will make Thailand a production and export base for the company's hybrid vehicles. Furthermore, it is highly possible that Honda may increase the amount of investment by pulling part of the funds planned for Indonesia and using the money in Thailand.
Malaysia: Malaysia to unveil policies for energy efficient vehicles
Source: The Star, 22 January 2013
The government will unveil policies on energy efficient vehicles (EEV) by the first half of this year, which would see the opening up of the segment in the automotive industry. Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said this would provide good opportunities and a level-playing field for local and foreign players in the industry. He said the government is ironing out policy details such as on technology, fuel emission, standards and quality, adding Malaysia is the only Asean country focusing on the EEV market. "All the stakeholders in the automotive trade have agreed on two things that we should make the production and marketing of EEV the future focus of the industry and that we should seek to establish a leadership position in the region for this sub-sector," he said.
Mustapa said although the government has not announced the final shape and form of the revised NAP, it will first introduce the pre-package customised incentives to support the development of the EEV sub-sector. This is all part of the transition period towards the opening up of the automotive market towards 2015 and 2016 with the realisation of Asean Economic Community (AEC) and the implementation of free trade agreements between Malaysia and trade partners like Australia and Japan. "With 2015 and 2016 around the corner, everyone in the motor sector are aware that they have to open up and all of them are gearing up to face new reality and new competition," he said.
China: China continues as world's top automaker, market
Source: China Daily, 12 January 2013
China remained the world's largest producer and market for automobiles for the fourth consecutive year in 2012, according to data released by the country's auto industry association. The China Association of Automobile Manufacturers said in a statement posted on its website that the country's auto sales last year hit 19.31 million units, up 4.33 % year on year and marking a new high. Meanwhile, auto production grew 4.63 % from a year earlier to 19.27 million vehicles last year, the CAAM said. "In 2012, both the country's auto sales and production hit new historic highs, and the country remained the world's largest auto manufacturer and market for the fourth consecutive year," the statement said.
China overtook the United States to become the world's largest automaker and auto market in 2009. "Automobile production in China has exceeded 18 million units for three years in a row, showing that the industry has entered a stage of steady growth at a relatively high level," the CAAM said. In December alone, 1.81 million vehicles were sold, up 1.05 % from November and 7.12 % year on year. Sales and production of passenger vehicles both topped 15 million units last year for the first time, said Dong Yang, secretary-general of the CAAM. Chinese-brand passenger vehicles saw total sales up 6.1 % year on year to 6.49 million units, representing 41.9 % of all passenger cars sold. The CAAM said sales and production of new energy cars also experienced rapid growth last year. China's auto exports maintained the momentum of strong growth last year, with a total of 1.06 million complete vehicles exported, up 29.7 % from a year earlier, according to the CAAM.
South Korea: S. Korea auto sales jump on strong overseas demand
Source: Xinhua, 02 February 2013
South Korea's automobile sales jumped in January from a year earlier thanks to strong overseas demand for locally-made models, industry data showed. Global auto sales by the nation's five carmakers, including Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and Ssangyong Motor, reached 756,255 vehicles in January, up 22.2 % from a year earlier. Overseas sales led the January growth. Sales, including cars exported from South Korean factories and vehicles assembled in overseas plants, expanded 24.8 % in January from a year before to 651,878 units. Domestic car sales increased 8.2 %.
A positive base effect from more working days contributed to brisk auto sales. The January 2013 had more business days than in 2012 when the Lunar New Year holiday fell in January. In 2013, the holiday falls in February. Global car sales by Hyundai Motor, the country's No 1 automaker, increased 11.1 % year-on-year to 50,211 units in January, and those by its affiliate Kia Motors grew 6 % to 36,250 vehicles. GM Korea, the South Korean unit of General Motors saw its global sales rise 24.7 % in January from a year before, and those by Ssangyong Motor surged 43.9 %.
India: Luxury car makers excited about India
Source: Business Standard, 29 January 2013
Last year, Italian luxury car maker Lamborghini sold 17 units in India, each unit costing upwards of USD 564,535. With two new models slated to hit the Indian market later this year, the company hopes to sell more than 20 units to India's millionaires in 2013. According to industry sources, millionaires in India are projected to double to 403,000 by 2015. That's why luxury car makers such as Audi, Porsche, BMW, Mercedes and Lamborghini are pressing with their plans, despite the slowdown in automobile demand. Andrea Baldi, head of operations, Southeast Asia & Pacific at Automobili Lamborghini Asia Pacific, said, "The people we are targeting are seemingly few. Their buying decisions are not the same as everybody else's." I can say that the financial crisis in Asia has not affected our sales. It is clearly giving us the impression that we can grow."
Audi, the world's second largest luxury car company, launched the R8 sports car with a price tag USD 252,159 (ex-showroom, Delhi). Michael Perschke, head of Audi India, said, "2013 is a critical year for Audi in India and we will see the announcement of several initiatives on the product and network front." Similarly, UK's Rolls Royce, which sells the Ghost for USD 564,535 and its flagship model Phantom for around USD 846,802, sees the potential to sell 130-150 cars a year over the next three years in India, with demand coming not just from tier-I cities but tier-II cities as well. Meanwhile, luxury car brand Aston Martin, which became famous thanks to James Bond movies, has matched its last year's sale of 20 units this year as well. Tata Motors-owned Jaguar Land Rover, too, does not want to be left behind in the race. It commissioned the works of its first locally-built Jaguar at its Pune facility, aimed at pricing the luxury saloon competitively, compared to alternatives from Audi, Mercedes and BMW.
China: Auto Lending Is A Big Hurdle In China
Source: Forbes, 28 January 2013
Auto finance is a big part of the challenge facing the world's automakers and their finance arms in emerging markets, especially China. As auto sales move into the true mass market in China, auto lenders have to establish the basics from scratch. That starts with creating a consumer-credit culture in the first place, plus many of the things lenders take for granted in North America, like individual credit histories, and finely tuned risk-based pricing - where the riskiest customers pay the highest interest rates, to cover expected losses. "In the world's largest automotive market – that is, China – you hear stories where people actually go to the dealership, even a BMW dealership in a market where BMWs are a lot more expensive than they are here, with a briefcase full of cash," said Chicago-based Gary Silberg, national automotive industry leader for KPMG LLP.
Nowadays the auto industry is also experimenting with other formats. Bank-based auto lenders like Ally Financial or Chase Auto Finance are also "preferred lenders" for different automotive brands, while retaining their independence. The Chrysler Group is said to be shopping for a potential lending partner, once its current relationship with Ally Financial expires later this year. Having an in-house lender is an important factor for automakers to succeed, according to experts. Silberg said his take on the results is that the car companies and related industries are realizing how important auto lending is going to be in China once auto sales become a truly mass-market phenomenon.
Japan: AEC to reduce dominance of big Japanese auto-makers
Source: The Nation, 09 February 2013
Small Japanese auto-makers like Suzuki, Mitsubishi and Isuzu and new entrants will gain the most from the implementation of the Asean Economic Community (AEC), which will create a more level playing field for their competition against larger rivals. However, big Japanese OEMs [original equipment manufacturers] are still likely to continue to lead the market, say experts. The low level of motorisation in Asean indicates a strong growth potential, while the heavily motorised markets of Western Europe and North America represent a saturated replacement market. However, industry analysts say that given the sheer scope and complexities of various outstanding issues, there was a strong likelihood that closer to 2015 some elements of the AEC would be put on hold. Indonesia, Thailand and Malaysia are the key automotive markets in Asean, accounting for 89% of the passenger-car market. However, at the global level, Indonesia, Thailand and Malaysia do not figure amongst the top 15 passenger-car markets.
BRIC countries (Brazil, Russia, India and China) were much bigger than the key Asean markets in terms of industry volume, and competed aggressively for investment in the automotive sector. The attractiveness of those markets, led by China and India, stems from their larger economies. As an integrated market, Asean will be more competitive and a better match to the BRIC economies. An integrated automotive sector would enhance Asean's attractiveness as an investment destination and help the local players, held back by limited resources, to survive. But political compulsions, accentuated by the development divide, serve as key restraints for the implementation of the AEC. Industry sources say local OEMs would find it a challenge to maintain their existing market positions and some degree of consolidation was expected. OEMs and suppliers should focus on increasing value and reducing the cost of safety systems. Under the full implementation of the AEC, a structural change is likely in the automotive sector.
India: Car sales set to be in negative zone, first time in a decade
Source: Business Standard, 12 February 2013
Domestic annual car sales are set to be in the negative territory for the first time in a decade, with industry body Siam saying its growth forecast of 0-1% for this year will not be met, as gloomy macroeconomic factors and negative sentiments continue to hit demand. The statement by the Society of Indian Automobile Manufacturers (Siam) comes on the back of January numbers also showing a decline of 12 %, the third consecutive monthly decline since November. Worried by the performance of the industry, Siam called for government intervention in the form of reduction in excise duties in the Budget and special schemes for commercial vehicles under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to boost the sector.
The last time car domestic sales witnessed a decline was in 2002-2003, when it dropped two %, he added. In between, the lowest growth was witnessed during the 2008-09 global downturn, when car sales in the domestic market grew just 1.4 %. "In the April-January period this year, the domestic passenger car sales have declined 1.8 % to 15,56,283 units compared with the year-ago period. The overall economic situation is low and the consumer sentiments are deeply negative despite the recent notional rate cuts by the RBI," Director General Vishnu Mathu said, adding even new model launches have not been able to have a major uplifting impact. He said the auto industry has put forward demands to the government to reduce excise duties on small cars to 10 % and big cars to 22 % in the coming Budget. "Also, we have asked for special schemes under the JNNURM, as was done in 2008-09 to support state transport undertakings to purchase buses for fleet upgradation," Mathur added.
Korea: Korea remains worlds 5th-largest car producer
Source: The Korea Herald, 18 February 2013
South Korea retained its position as the world's fifth largest automobile producer last year for the eighth year in a row behind China, the United States, Japan and Germany, a local industry group said. Top automaker Hyundai Motor Co. and four other local automakers produced a combined 4.56 million units in 2012, compared with 4.66 million vehicles produced a year earlier, according to the Korea Automobile Manufacturers Association. South Korea's output accounted for 5.4 % of a total of 84.70 million vehicles produced in 10 countries around the world, KAMA said.
Output by Chinese and foreign car makers in China jumped 4.6 % on-year to 19.27 million units in the latest sign that production of cars in the world's largest auto market is increasing, according to the association. China, home to plants of top foreign automakers, including Hyundai, Toyota Motor Co., BMW and General Motors Co., has been keeping the top spot since 2009 when it supplanted Japan as the world's largest auto producer. China is followed by the U.S. with 10.33 million units, Japan with 9.94 million vehicles and Germany with 5.65 million units. India took sixth place in the global production of cars with 4.14 million vehicles, followed by Brazil with 3.34 million units, according to KAMA.
Thailand: Thailand Automotive industry’s five year master plan aims at increased output
Source: The Nation, 14 December 2012
The third master plan for the Thai automobile sector has been drawn up, alongside a study of long-term development of the industry with a view to establishing the Kingdom as one of the world's key manufacturing hubs by increasing production from 2.3 million units this year to 5.6 million units by 2050. The plan is also aimed at making the country one of the top 10 auto-manufacturing nations within the same time scale and increasing the use of local content in the industry from 40 % now to 50 %. In addition, the institute's long-term development goal is to increase production step by step over the next several decades. Under the plan, manufacturing will concentrate on development in four areas: "green" vehicles, using alternative energy such as biodiesel, ethanol and compressed natural gas; light-weight cars with a high standard for energy saving; autos equipped with information technology to facilitate driving; and high-safety manufacturing in all vehicles types - passenger cars, trucks and motorcycles.
The new plan will concentrate all vehicles that can use a variety of energy sources, notably hybrids and electric vehicles, in line with the global manufacturing trend of the industry. Also, the government should encourage the establishment of an auto-testing centre in Thailand, which would be used as the testing centre for Asean, said Patima Jeerapaet, president of the Thailand Automotive Institute. The centre would require an investment of USD 263.9 MN, with construction divided into two phases. The first phase, for a standard-testing centre worth USD 104.2 MN on 200 rai of land close to a deep-sea port and automotive and parts manufacturing plants in the East of the country, would be completed by 2015. The second phase, costing USD 159.6 MN, would focus on a centre for product testing and an R&D facility for new products, including parts.
Vietnam: Vietnam auto industry faces gloomy future
Source: DTI News, 15 December 2012
Reports from the Ministry of Industry and Trade (MIT) show a gloomy picture and huge inventory of the automobile companies since 2008 until now. Vietnam Automobile Manufacturers' Association forecast domestic producers will only be able to make 80,000 vehicles in 2012, down 34%-38% compared to last year, which would mark a low productivity. From now to 2018 the import tariff for fully-assembled automobiles may be lowered and exempted in line with the ASEAN-China Free Trade Agreement, Vietnamese auto manufacturers may stop operation and choose to import fully-assembled vehicles instead of manufacturing. The MIT also pointed out that most of the production quotas set in Government's plan for automobile development in 2004 are not met, especially the quotas for producing engines for automobile.
Experts have said that support industries in Vietnam are weak. There are about 210 enterprises in the industry, but most of them only produce simple component parts. The number of enterprises in support industries in Vietnam is only one fifth of that of Indonesia and one fiftieth of that of Thailand. Domestic manufacturers have largely failed in localising the industry. Many also lay blame for this on incomprehensive policies. To ensure the stability of the traffic and infrastructure, the Government has issued a number of regulations, such as high taxes and limitations on the number of personal vehicles, which has caused trouble for the auto companies. The automobile development plan for the period of 2001-2010 has proven largely ineffective and non-conducive to the real situation. The MIT suggested keeping import taxes for automobiles high until 2018 to encourage domestic manufacturers and exempt import taxes for materials and component parts that Vietnamese manufacturers cannot provide.
Indonesia: Automotive industry has good prospect in 2013
Source: Antara News, 13 December 2012
Experts believe that Indonesia`s automotive industry will have a good prospect in 2013, given the positive macroeconomic trends. According to the spokesperson for the Association of the Indonesian Automotive Industries (Gaikindo), Yongkie D. Sugiarto, the Indonesian automotive industry has benefitted from the nation`s economic growth, rupiah exchange rate stability, political stability, interest rates and market liquidity. So far, he said there has not been a decrease in the demand for motor vehicles. "The economic growth rate of over 6 % has been a decisive factor in the development of the automotive industry because it is related to the people`s purchasing power," he explained. He said if the market is stable, the automotive industry will grow by 10 % next year. "We are afraid of the new Syariah rule, which states that the minimum down payment for cars is 30 % of the sales price. This regulation will come into force from April 2013," he continued.
However, Sugiarto pointed out that the projection of 10 % growth is not inclusive of green car (LCGC) sales. "LCGC sales are projected to reach 150,000 units per year. If the cost of a LCGC car is USD 8248, the national automotive industry will see an additional turnover of around USD 1.23 BN per year," he added. Annual car sales have been projected to reach 1.1 million units because new factories of Nissan, Honda and Daihatsu have become operational. Meanwhile, Gaikindo’s Chairman, Sudirman Maman Rusdi, said the Indonesian automotive industry could surpass Thailand’s automotive industry in three to four years. "However, the government should set up the necessary infrastructure, implement appropriate policies, provide incentives for research and development, and ensure availability of raw materials such as iron, aluminium, rubber and plastic," he pointed out.
India: PM Manmohan Singh asks auto industry to adopt electric technology fast
Source: Economic Times, 09 January 2013
The mission involves a total investment of over USD 4.18 BN which would be equally shared by the government and the auto industry. The Prime Minister said India's transport sector consumes a large amount of energy. Over 80 % of the country's requirement of petroleum products is met through imports. "This dependence on imports is likely to increase further. High international prices of oil contribute significantly to India's import bill, to our trade deficit and, I dare say in a world of rising petroleum prices, to inflation, thus putting a big strain on our economy," Singh said. As per the ambitious National Electric Mobility Mission Plan, 6-7 million electric vehicles along with resultant liquid fuel savings of 2.2-2.5 million tonnes can be achieved in 2020. At present, the production of electric and hybrid vehicles is negligible in the country.
Japan: Japanese car sales slump in China on island row
Source: Channel News Asia, 07 January 2013
Japan's top three carmakers, which all have manufacturing facilities in China, scaled back production as sales slumped. Despite predictions of a bounce back this year, there are plenty of uncertainties that may slow a recovery including new governments in China and Japan, said Tatsuya Mizuno, auto analyst at Mizuno Credit Advisory. "There is also concern about the future of the Chinese economy. The prospects for a full recovery of Japanese cars in China are still obscure." However domestic auto sales in the last month of 2012 slipped 3.4 % to 214,429 units, the data showed, partly due to the expiry of government subsidies aimed at bumping up sales of eco-friendly cars. "It is difficult to cite any decisive factor for the decline in monthly sales... but the end of subsidies still matters the most," an association official said.
South Korea: S. Korea's auto sales hit record high in 2012
Source: Xinhua, 02 January 2013
Last year's record sales were attributable to improved recognition of local auto brands in overseas markets that offset weak domestic sales. Domestic auto sales contracted 4.2 % on-year to 1,403,165 units in 2012 amid the economic slowdown, but overseas sales, including cars exported from South Korean factories and vehicles assembled in overseas plants, expanded 7.9 % to 6,793,736 units last year.
Japan/Malaysia - Malaysian auto giant Proton partners Honda to explore business opportunities
Source: The Star, 30 October 2012
Proton Holdings Bhd is going to partner Japanese automotive giant Honda Motor Co Ltd to explore opportunities in a wide scope of business areas, involving technology, products and sharing of facilities. DRB-Hicom Bhd, parent to Proton, said in filings that the opportunities were endless and that a foreign strategic partner (FSP) like Honda would enable Proton and DRB-Hicom to grow as an original equipment manufacturer (OEM). It said the freshly inked collaboration agreement signifies the potential of a long-term strategic collaboration with Honda, and it added hints of things to come including in the areas of technology enhancement, new product line-up, platform and facilities sharing.
However, with the sketchy details at this point in time, analysts believe the non-exclusive agreement would be just a prelude to more strategic collaborations should the need and opportunity arise. Analysts predict that any global OEMs for that matter would be capable of bringing Proton to a better place. Honda has a comprehensive product range, particularly in the medium to small car market, including hybrid technology, which is a wide area the parties involved can delve into. The strategic collaborations were just another way for DRB-Hicom to harvest Proton's low hanging fruits, besides rationalizing its current operations.
India - Auto production likely to bounce back by may end FY13 with 6% growth
Source: The Financial Express, 28 October 2012
Automobile production, which took a hit due to the high borrowing costs and rising fuel prices coupled with weak consumer sentiment in the April-August period, is likely to bounce back in the second half and may end FY13 with about 6 % growth, CMIE has said. The recovery in the production is expected to come on the back of festival season and a host of new launches by auto companies, the Centre for Monitoring Indian Economy (CMIE) said in its latest report. "We expect automobile production to grow by 5.8 % the current fiscal. Yet, this will be considerably lower than 13.8 % recorded in the previous fiscal."
The RBI's continued hawkish stance on key policy rates and rising oil prices along with deceleration in consumer demand impacted the auto production in the five months of the fiscal as it grew by a muted 4.1 %, the report said. According to CMIE, the two-and three-wheeler industry, which accounts for almost three-fourths of total production, is expected to grow by a mere 5.9 % during the fiscal, impacting the overall industry's growth. However, driven by a likely 32.7 % growth in the multi-utility vehicle segment, passengers cars and vans, the segment is expected to record a slightly faster 6.2 % growth.
Vietnam - Auto-makers experiencing tough times in a slowing market
Source: Talk Vietnam, 31 October 2012
Auto-makers are experiencing such tough times in Vietnam’s slowing market that some companies may shut down assembly plants and transfer into importing autos. Sales of so-called completely knocked down (CKD) vehicles that were assembled from auto parts imported to Vietnam stopped at around 50,000 units during the first nine months of 2012, only half the expected total for 2012. These vehicles accounted for more than 70 % of the overall sale, which included fully-assembled imports, according to Vietnam Automotive Manufacturers’ Association (VAMA).
Laurent Genet, general director of Automotive Asia Limited, Audi’s official importer in Vietnam said that without efforts to support the CKD industry, some auto-makers would have to halt assembly and switch to imports. In January, when the import tax was reduced for pick-ups, all CKD operators in Vietnam stopped assembly and switched to imports from Thailand. Isuzu Vietnam’s general director Kenji Matsuoka told VIR that Isuzu Vietnam had transferred to completely built-up units (CBU) instead of CKD for pick-ups because of the lower import tax compared to the cost of importing automotive parts for assembly in Vietnam. Vietnam reducing import taxes in align with the agreement on trade in goods in ASEAN (ATIGA) is accelerating this trend towards CBU from ASEAN, China, South Korea or Japan further.
Japan/Indonesia - Toyota to invest USD 1.3 BN in Indonesia over 5 years
Source: Channel News Asia, 10 November 2012
Japan's Toyota group said it will invest about USD 1.3 BN over the next five years in expanding its vehicle production in Indonesia. Toyota Motor and its five affiliated firms are making the move "considering the remarkable growth of the (Indonesian) market in recent years", a statement from the group said. The investment will create 9,000 new jobs, raising the group's total workforce in Indonesia to around 41,000, according to Japanese media. Toyota Motor's Indonesian unit, Toyota Motor Manufacturing Indonesia (TMMIN), will buy 150 hectares (370 acres) of land near its two plants in Karawang outside Jakarta to build a new engine plant, the statement said. TMMIN will increase annual production at one of the Karawang plants from 110,000 vehicles to 130,000 by September 2013 to reinforce supply of pickup trucks, minivans and sports utility vehicles.
The five Toyota group firms are Daihatsu Motor, Toyota Auto Body, Aisin Seiki, Denso and Toyota Tsusho. In the expansion project, Toyota Auto Body will begin vehicle production in December, the statement said. Daihatsu Motor will also begin construction of its second test track and design centre outside Japan – at one of its Karawang plants – by the end of this year. The six group firms have already invested about USD 2.8 BN over four decades with Toyota Motor accounting for USD 984 MN, the statement said.
India - Automotive aftermarket industry may grow to USD 9.4 BN by 2015
Source: Financial Express, 07 November 2012
The size of the automotive aftermarket industry is expected to grow to around USD 9.4 BN in India by 2015, according to an industry official. "The Indian automotive aftermarket is expected to grow to around USD 9.4 BN by 2015 from its present estimated size of USD 3.7 BN. "With the population of automobiles in India exceeding 110 million and growing at the rate of 10-12 % per annum, the automotive aftermarket business in India is poised for an immense growth", T V Sundram Iyengar and Sons Joint Managing Director R Dinesh said.
Entry of global players in the Indian automotive market coupled with major expansion plans of domestic industry would further aid the growth of the automotive aftermarket business in India, Dinesh also the Chairman of Auto-Serve 2012 said. Confederation of Indian Industry is organising the Auto-Serve 2012, three-day conference featuring automotive care, maintenance, service, parts and garage equipment and commercial vehicles from November 16 which would have participations from National and Regional level associations.
Vietnam - Auto manufacturers enter year-end sprint race
Source: VietnamNet, 05 November 2012
The car sales have increased slightly after automobile manufacturers launched a series of new models. However, high hopes would be put in the last two months of the year. After the five-month decrease period, automobile joint ventures have seen the sales increasing slightly since June. Reports showed that 5858 cars were sold in June, an increase of 2 % over the previous month. Meanwhile, the July sales increased by 15 % over June. The sales improvement has brought high hopes to automobile manufacturers, who were put on tenterhooks in the first six months of the year when seeing the car sales prices drop dramatically.
Yoshihisa Maruta, General Director of Vietnam Automobile Corporation, said 2012 is really a difficult year for auto manufacturers with the economic recession in Vietnam and the world, the consequences of the natural calamities in Japan and Thailand. However, he believes that the demand would increase in the time to come, and that despite the current bad situation, the Vietnamese market still can see great potentials. Believing that the market would warm up in the last months of the year, automobile manufacturers have been launching a lot of new car models. Not only having launched new models, automobile manufacturers have been trying to attract customers with noisy sales promotion campaigns.
Vietnam - VN luxury sedan imports unfazed by economic woe
Source: Tuoitrenews, 20 November 2012
While the economy is still struggling with difficulties, the number of luxury cars has remained on the rise in the year to date. Figures from the authorized importers of luxury sedan megabrands Rolls Roye and Maybach show that 80 vehicles of the two models have arrived in the country. “As of mid-November, as many as 20 luxury cars are being used in Vietnam,” said Michael Behrens, CEO of the Mercedes – Benz Vietnam joint-venture, which is the guarantee agency of Maybach in Vietnam. Vietnam remains an important market of Maybach in Southeast Asia, despite the exorbitant import tariff and tightened import policies from the government, he said.
All of Maybach’s cars in Vietnam are second-hand, and the country has imported cars of models such as 57, 57S, 62, and 62S, which cost USD 460,000 each in the US, and the Zeppelin series, which fetches USD 670,000 per vehicle. Meanwhile, 32 Rolls Royce sedans have registered for maintenance and repair services at Euro Auto, its representative in Vietnam, a company spokesperson said. However, insiders said this is only some 40 to 50 % of the real number of Rolls Royce cars in Vietnam. Four of these luxury vehicles have been shipped to Vietnam as of last May, the company spokesperson said. “Vietnam is also the very first buyer of the Rolls Royce Phantom special edition, as local customers have purchased the first two cars in the series,” he added.
Australia - USD 6.8 million for automotive components makers to diversify products and improve productivity
Source: Manufacturers’ Monthly, 20 November 2012
Ten companies in the automotive components sector have received USD 6.8 million worth of grants. "These grants will assist firms to develop a range of exciting new capabilities including robotics, precision components, accident avoidance and high-intensity floodlighting," said federal industry minister, Greg Combet. The grants are funded by the Victorian and federal governments through the USD 37 million Automotive New Markets Initiative, and administered by them and the South Australian government. Their aim is to encourage manufacturers to diversify their products and improve productivity.
The money will help “enable our automotive suppliers to build their commercial base while maintaining the capacity to service existing automotive customers," said Dalla-Riva. Eight of the companies - including Australian Arrow, Chassis Brakes, APV Automotive Components and Bosch - are located in Victoria. The other two are SA-based. The problems in the auto parts industry are threatening the viability of the country’s car makers Ford, Toyota and Holden, and come after Ford retrenched 212 workers and parts maker Autodom was put in receivership.
Japan - Honda chief eyes more exports from US
Source: Channel news Asia, 27 November 2012
Honda chief executive Takanobu Ito wants to boost the Japanese carmaker's exports from the United States to counterbalance the effects of the strong yen "Our US plants export just 6% to 7% of production. But they should be able to do more than that," Ito told the Wall Street Journal. "If there's enough demand from other regions for larger vehicles, then closer to 20% is conceivable," he added. While the yen has eased from record highs hit last year, its continued strength makes exports from Japan more expensive, and Ito said Honda was not likely to ramp up overseas shipments from its domestic plants.
Honda, Japan's third biggest automaker, currently exports five models from the United States – the Accord and Civic sedans, the Pilot and MDX sport utility vehicles, and the Odyssey minivan. Last year, it exported 55,000 vehicles from North America. Also last year, the company suffered production delays triggered by the quake-tsunami disaster in Japan and record flooding in Thailand. This year, it returned to full production.
Oil rises in Asia on China stimulus hopes
Source: Channel News Asia, 23 August 2012
Oil prices surged in Asia on Thursday as hopes of a Chinese stimulus soared after manufacturing activity in the world's largest energy consumer fell to a nine-month low in August, analysts said. Crude markets, which had earlier been buoyed by hopes of additional stimulus from the US Federal Reserve, were given a further boost from heightened optimism that China's central bank would do the same.
Preliminary figures released Thursday from the closely watched HSBC purchasing managers' index (PMI), which gauges nationwide manufacturing activity, hit 47.8 this month, its lowest since November. This raised trader hopes that the Chinese government would intervene with policy easing measures to jumpstart growth.
Indonesia - Indonesia's car demand to rise 275 pct by 2025
Source: Silobreaker, 25 September 2012
Domestic demand for automobiles in Indonesia is going to increase dramatically by 275 percent by 2025, driven by rising per capita incomes, robust economic growth and urbanization. The ratio of local car owners would jump significantly from 80 to 300 units per 1,000 people by 2025, an increase of 275 percent, boosted particularly by increased consumer purchasing power.
According to Honda, another trend that would influence car demand by 2025 was urbanization, which will create more megacities, or cities with populations of around 8 million; mega-regions, with populations of around 15 million; and mega-corridors, with more than 25 million inhabitants.
Korea - S. Korea's auto sales rebound in Sept. on overseas demand
Source: Xinhua Daily, 04 October 2012
South Korea's automobile sales rebounded last month due to solid overseas demand for locally-made cars, industry data showed. Global auto sales by the nation's five carmakers, including Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and Ssangyong Motor, reached 673,318 vehicles in September, up 0.3 percent from the same month of last year.
Domestic auto sales declined 6.6 percent on-year to 115,811 units in September, but overseas sales, including cars exported from South Korea and vehicles assembled in overseas factories, expanded 1.8 percent to 557,507 units.
Japan - Japan's new car sales in September log 1st fall in 12 months
Source: Kyodo News, 01 October 2012
Japan's new vehicle sales in September tumbled 3.4 percent on year to 446,686 units, the first drop in 12 months as the government ended a subsidy program for eco-friendly vehicle purchases, industry bodies said.
Though sales of mini-vehicles with engines not larger than 660 cc increased 6.6 percent to 158,208 units, those of larger vehicles dropped 8.1 percent to 288,476 units, said the Japan Automobile Dealers Association and the Japan Mini Vehicles Association.Passenger car sales plunged 10.1 percent to 252,186 units, but truck sales expanded 8.4 percent to 35,304 units.
Japan - Japan auto giants to halve Chinese output
Source: Channel News Asia, 08 October 2012
Japan's top three car makers will halve production in China following a sales slump there sparked by a backlash over a territorial row between Tokyo and Beijing. Toyota, Honda and Nissan all plan to resume output at roughly half their normal levels when workers return to their jobs after the end of China's week-long National Day holiday, the Nikkei business daily said.
Nissan will suspend its night shift and operate its Chinese factories only during the day "for the time being", while Toyota and Honda will cut operating hours and run production lines at slower speeds, the daily said. If the production cut continues for a month, each of the three firms is likely to suffer a reduction of 30,000 units to 40,000 units. Sales of Toyota cars in China reportedly plunged by 50% in September from August due to the row over disputed islands in the East China Sea, which are controlled by Japan but claimed by China. The dispute has badly affected trade between Asia's two biggest economies. Japanese factories and businesses across China closed or scaled back operations in September over fears they or their workers could be targeted by mobs protesting against Tokyo's purchase of the islands.
Philippines - Philippines seen as e-vehicle parts manufacturing hub
Source: Business Inquirer, 15 October 2012
The Asian Development Bank sees the Philippines becoming a regional manufacturing hub for electric vehicle parts, that is if the government and its partners will be able to successfully pull off the USD 500 million electric tricycle program. The e-Trike project will involve the roll out of 100,000 units of electronic tricycles across the country, as an initiative that could generate economic and “transformational” gains not only for tricycle drivers but for a whole new industry – the electric vehicle industry. Five to six foreign companies had expressed interest in relocating their factories to the Philippines, after seeing that the government and the ADB were aggressively pushing forward with the e-Trike project.
The e-Trike project is supported by local auto parts makers led by the Motor Vehicle Parts Manufacturers Association of the Philippines (MVPMAP) and the Electric Vehicle Association of the Philippines (EVAP). Both groups believe that the successful rollout of the program will attract major electric vehicle partners to set up shops in the Philippines. Under the program, the government plans to replace 100,000 fuel-fed tricycle units with energy efficient e-trikes to help reduce the transport sector’s gasoline consumption by 561,000 barrels yearly, reducing 260,000 tons of carbon dioxide emission yearly.
Asia: Asian Transport Firms Ride Regional Growth Wave
Source: The Nikkei Business Daily, 05.10.2012
Transport services companies in Asia are expanding quickly at home and abroad, riding the wave of economic growth in the region. Worth some USD 22 billion, MTR Corp., a Hong Kong-based railway operator, tops the list of the largest non-Japanese transport firms in Asia by market capitalization. MTR, which is nearly 80% owned by the Hong Kong government, has been aggressively expanding outside the city. Overseas markets now account for 40% of its sales. Singapore Airlines Ltd. is the third-largest company in Asia's transport sector by stock market value; Cathay Pacific ranks eighth. The largest Asian shipping company is South Korea's Hyundai Glovis Co., which carries Hyundai Motor Co.'s cars around the world. But Hyundai Glovis is exceptional in Asia's shipping industry, which has been battered by the slowing world economy.
Long-term growth prospects for transport services in Asia, however, remain strong. Passenger rail traffic in China grew 15% from 2008 to 2010, and by 30% in India, according to the World Bank. Many companies operating airports, ports and highways are also among the 50 largest Asian transport firms. These infrastructure operators often use money raised in the stock market to finance new projects. By contrast, there are no listed Japanese companies in the business.
Asia - Daimler to build SUVs in India, Indonesia, Thailand
Source: Channel News Asia, 27 August 2012
German carmaker Daimler said Monday it would extend assembly of its sports utility vehicles to production sites in India, Indonesia and Thailand. It would be the first time that Daimler will build its new Mercedes-Benz M and GL models outside the main SUV plant in Tuscaloosa in the United States, the statement said.
Assembly of the M class models would begin in India, Indonesia and Thailand this year, with the GL class following next year in India and Indonesia. "Our new SUVs are very popular with our customers. We expect high growth rates also in the emerging markets and are therefore extending our local production. That will enable us to open up new potential as part of our growth strategy," said board member Wolfgang Bernhard.
China - Brand-building urged amid overcapacity in car sector
Source: Xinhua Daily, 01 September 2012
Automobile experts urged Chinese car companies to set their sights on strong brands in a market that is predominantly taken up by overseas giants such as Volkswagen and General Motors. Currently, China's car sector still relies heavily upon overseas technologies, with joint venture companies producing and selling about three quarters of sedans sold here, said Su Bo, Vice Minister of Industry and Information Technology.
China's auto sales and output both witnessed an average 20-percent annual growth over the past decade, according to the official. However, the world's largest auto market faces a potential overcapacity problem after that explosive growth over the past decade, said Chen Bin, director of the Industrial Coordination Department of the National Development and Reform Commission, China's top economic planner. China's auto sales and output both witnessed an average 20-percent annual growth over the past decade, according to the official.
Thailand - Thailand's output ahead of schedule
Source: The Bangkok Post, 31 August 2012
Thailand's car production is expected to hit 3 million units in the next 18 months, much faster than a previous projection of the next three years or by 2015, says the Thailand Automotive Institute (TAI). Under the current forecast, Thai automobile output will reach 3 million units by 2015, moving the country to 11th place from 15th.
Production in Southeast Asia reached 3 million units last year with overall domestic sales of 2.6 million. Output is poised to grow by an average of 10% a year until 2020, requiring 40,000 more workers each year to serve the continuous expansion.
Indonesia - India's Tata Motors enters Indonesia
Source: Channel News Asia, 11 September 2012
India's leading vehicle maker Tata Motors announced it had set up a wholly owned Jakarta-based subsidiary, PT Tata Motors Indonesia, to start selling vehicles next year.
"Our research is showing that there is a large opportunity for Tata vehicles in Indonesia, with operating conditions and customer needs being very similar to those in India," Tata Motors' Indonesia director Biswadev Sengupta said. Sengupta said the Indonesian unit would set up a network of about 60 full-service dealers and 100 workshops over three years.
Korea - S. Korea's auto production plunges 25.9 pct in Aug
Source: Xinhua Daily, 09 September 2012
South Korea's automobile production plunged 25.9 percent in August from a year earlier due to frequent partial strikes by major automakers, a government report showed. Auto production by the nation's five carmakers, including Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and Ssangyong Motor, reached 237,477 vehicles in August, down 25.9 percent from the same month of last year, according to the Ministry of Knowledge Economy.
The sharp drop was attributed to a supply shortage stemming mainly from partial strikes by key carmakers. Top automaker Hyundai Motor and its affiliate Kia Motors saw their unionized workers go on strikes around 10 times last month.
China - Obama to launch China WTO action on autos
Source: Business Spectator, 17 September 2012
"The Obama administration is launching an enforcement action against China at the World Trade Organization for illegally subsidising exports in their autos and auto-parts sectors," a White House official said. The US case will argue that China is providing impermissible export subsidies to auto and auto-parts firms and is violating WTO prohibitions on export-contingent subsidies, an official said.
Obama will leverage the political power of his office when he makes the announcement in swing state Ohio and argue that Chinese practices in the auto sector put US manufacturers at a disadvantage, a White House official said. The official added, on condition of anonymity, that China's actions were "putting US auto parts manufacturers at a competitive disadvantage and that is encouraging the outsourcing of auto-parts production to China."
India - India's Maruti locks out workers at riot-hit plant
Source: Channel News Asia, 21 July 2012
India's top carmaker Maruti Suzuki said on Saturday it was locking out workers at one of its plants hit by a riot. The lockout at Japanese-owned Maruti's Manesar plant near New Delhi that produces 550,000 vehicles a year – one-third of annual output – would continue until the safety of its employees could be assured, the company said.
The indefinite lockout comes less than a year after labour disputes at Maruti cost more than US$500 million in lost output. In response to repeated questions about how long the plant would be shut, Bhargava replied: "We will be very inefficient if we take six months. I don't think we are that bad."
Australia - Ford to sack 440 workers in Australia
Source: Channel News Asia, 17 July 2012
Car manufacturer Ford announced that it would sack 440 Australian workers as it scaled back production due to muted demand, despite a multimillion-dollar government bailout earlier this year. Ford said the jobs would be shed from its manufacturing plants in southern Australia's Geelong and Broadmeadows as part of a sweeping restructure to address plunging sales.
Ford Australia president Bob Graziano said the changes, which will see production pulled back from about 210 cars to 150 cars per day from November, were "essential to ensure the longer-term health of the business". Canberra extended a A$3.2 billion (US$3.3 billion) bailout to the ailing auto industry at the height of the global downturn and stepped in with additional lifelines to Ford and General Motors subsidiary Holden earlier this year.
Indonesia - Indonesia Powers Ahead with Electric Car Plans
Source: The Wall Street Journal, 24 July 2012
The much-touted program to make Southeast Asia’s largest economy a hub for eco-car production is just revving up. The moody battery-powered car, is the latest in an ongoing quest for a locally-designed and produced vehicle in a country where Japanese brands have dominated the auto market for decades.
Mr. Iskan, a media mogul and one of the most popular government ministers, says electric cars are the future for Indonesia. He said the country could start producing environmentally-friendly electric cars next year.“If the infrastructure is ready, we can start mass producing the car with a capacity of 5,000 units per year,” he told the state-run Antara news agency. “We should now focus on quality, quality and quality. It’s my hope that quality will no longer be a concern in August and after that, we can talk about the cost.”
China - Some China carmakers look overseas as domestic demand stalls
Source: The Economic Times, 22 August 2012
Chinese automakers have had their toughest first half since the global financial crisis and the rest of this year looks set to be tougher still as the world's largest auto market sputters in a slowing economy. State auto groups with strong foreign ties, can still deliver earnings growth, but others may find themselves locked in reverse gear, industry observers say.
For some, exports, mostly to emerging markets such as Ukraine, Indonesia and Sri Lanka, may offer some relief from weak sales at home. The China Association of Automobile Manufacturers is keeping to its forecast for a 5-8 percent rise in overall vehicle sales this year - a far cry from explosive growth of 46 percent and 32 percent in 2009 and 2010 respectively.
Vietnam - Vietnam's automobile sector shows signs of recovery
Source: Xinhua Daily, 13 August 2012
The Vietnamese automobile sector saw signs of recovery in July, with increasing sales of both domestically assembled and imported automobiles, according to the Vietnam Association of Automobile Manufacturers (VAMA).
Total sales of automobiles nationwide in July increased 15 percent with 7,433 units, over 6,555 units in the previous month. To increase the sales turnover in the coming months, domestic auto companies have applied various promotion programs, including cooperation with the banks to lower the interest rate of loans for their clients, introduction of new auto brands to renew the market and reduction of services fees.
Australia - Chinese Cars Recalled in Australia for Asbestos
Source: The Wall Street Journal, 16 August 2012
An Australian importer recalled about 23,000 Chinese cars after a government probe found asbestos in engine and exhaust gaskets, setting back a Chinese auto industry eager to sell cars in developed markets.
The disclosure comes as China’s domestic auto makers look abroad for new markets. At home they face a glut of auto-making capacity and competition from foreign auto makers such as General Motors Co. and Volkswagen AG. Chinese exports of passenger cars rose to 236,200 vehicles in the first half, up 16% from a year earlier, according to the China Association of Automobile Manufacturers. Nations such as Russia, Iran, Algeria and Iraq take up the bulk of China’s exports, according to the group.
China - Nissan's China unit to build new US$784m auto plant
Source: Trade Newswire, 25 June 2012
Japan's Nissan Motor said Monday that its joint venture with China's Dongfeng Motor Group would spend up to 5.0 billion yuan (US$784 million) on a new plant in China, the world's biggest car market. The investment is part of Nissan's efforts to meet its target of selling two million cars a year in China by 2015, it said.
The new plant in the northeastern city of Dalian is scheduled to begin producing Nissan-brand passenger vehicles in 2014, with an annual capacity of 150,000 units, the Japanese firm said in a statement at a groundbreaking for the factory.
India - Tata Motors to Suspend Production This Week
Source: The Wall Street Journal, 27 June 2012
Tata Motors Ltd. and the local unit of General Motors Co. will suspend vehicle production at their factories this week to avoid piling up stocks amid tepid demand in Asia's third-largest automotive market, executives at the companies said.
Automobile sales in India have slowed recently, mainly due to higher interest rates and global economic uncertainty. Car sales grew just 2.2% in the year through March to 2.02 million vehicles, compared with a 30% jump in the previous year. Demand for gasoline vehicles has taken the biggest hit since June 2010, when the government lifted price controls on the fuel.
Vietnam - Clear-Cut Policies Needed To Rescue Vietnam Automobile Market
Source: Vietnam Business News, 28 June 2012
Since 2012, local auto makers have seen a sharp decline in sales revenue. There is growing concerns that manufacturers will be more likely to import cars instead of producing them in Vietnam. If this happens, the strategy to develop a Vietnamese automobile industry will be a flop.
At a recent seminar in Hanoi, experts said producing more parts locally to reduce costs is key to developing Vietnam’s automobile market. The Ministry of Industry and Trade (MoIT) has proposed slashing the value-added tax (VAT) and special consumption tax on motor vehicles by 50 percent. According to the MoIT, this will benefit both manufacturers and consumers, and also meet the requirements for growth rates as mentioned in the plan for auto industry development until 2020.
China - China caps car sales in Guangzhou to ease jams
Source: The Straits Times, 01 July 2012
China's booming southern city of Guangzhou is limiting the number of new cars on the streets to ease traffic jams and cut pollution, state media said, a move that could weigh on sales in the world's largest car market.
Guangzhou, the capital city of Guangdong – the factory workshop of China and the world – will only allow 120,000 new cars to be registered over a one-year trial period, or 10,000 cars a month.The measure puts Guangzhou as the third Chinese city after Beijing and Guiyang to limit car sales in an attempt to improve traffic conditions and air quality.
Korea - S. Korea's Kia breaks ground for new China plant
Source: Channel News Asia, 29 June 2012
South Korea's second-largest automaker Kia Motors said it broke ground for its third plant in China, the world's fastest-growing car market. The company said the new plant in the northeastern city of Yancheng would produce 300,000 cars annually when completed in the first half of 2014. It would help Kia boost its annual production in China to 730,000 units.
Kia, an affiliate of South Korea's leading automaker Hyundai Motor, sold 432,518 vehicles in China last year and plans to sell 460,000 this year. Hyundai and Kia together form the world's fifth-largest car-making group by sales. Kia operates 13 plants in eight countries including India and the United States.
Vietnam - Auto sales fall 41 percent in first half
Source: Vietnam News, 12 July 2012
Automobile sales in Vietnam fell an historic 41 percent year-on-year in the first six months of 2012, an industry group said, slowed by the economic recession. The Ministry of Industry and Trade in April also forecast that Vietnam ‘s total car sales in 2012 will drop drastically and return to 2007's level of some 80,000 units.
The ministry earlier this year proposed car ownership fees under which each car owner will have to pay from 20-50 million VND per year in a move to try and restrict rising car numbers that cause chronic traffic congestion. However, the letter from the MOT stated that it will be looking into the matter further and taking advice from relevant ministries as well as public opinion before making a final decision.
Asia - Toyota making 8 new models for emerging markets
Source: Channel News Asia, 25 May 2012
Toyota said it would roll out a number of new compact cars priced around $12,500 in developing nations, targeting sales of more than one million of the models annually in emerging markets by 2015. Japan's biggest automaker said it would make eight new cars at plants in Thailand, Indonesia, India and Brazil, priced at "about 1.0 million yen ($12,500) or more."
In 2010, the firm launched its Etios compact to the Indian market with a base price of about $10,000.Total sales of Etios have surpassed 100,000 vehicles since its debut, the company said. Etios is part of a broader plan to see half of Toyota's worldwide vehicle sales come from emerging markets, up from 45 percent in 2011, as global automakers rush to emerging nations amid stuttering sales in their developed markets.
China - Xinjiang to become new engine for China's auto industry
Source: Xinhua Daily, 28 May 2012
China's far west Xinjiang Uygur autonomous region is expected to become another engine for the country's automobile industry as Shanghai Volkswagen, German carmaker Volkswagen AG's joint venture in China, laid the foundation for its new factory.
The plant, located in the regional capital Urumqi, is expected to become operational in 2014 with an annual production of 50,000 units. The factory's first phase of construction will cost 2 billion yuan (316 million U.S. dollars), said Hu Maoyuan, chairman of SAIC Motor Corp and Shanghai Volkswagen. As the first sedan manufacturing program in Xinjiang, the factory provides opportunities for Shanghai Volkswagen to explore the booming western China and central Asia markets, Hu said.
Japan - Japan's April auto output soars in year after quake
Source: AFP, 29 May 2012
Japan's major automakers on Monday reported huge production increases for April, as the hard-hit sector recovers from the devastating impact of last year's quake-tsunami. Heavyweights Toyota, Nissan, and Honda saw huge jumps in output from the same month a year earlier when they slashed production and shuttered plants due to power shortages and a parts supply crunch after the disaster.
The latest production figures come less than a week after data showed Toyota regained its position as the world's number one automaker in the first quarter of 2012, stealing back the lead from US giant General Motors.
Japan - Saab sold to Chinese-Japanese-founded NEVS
Source: Channel News Asia, 13 June 2012
Bankrupt Swedish automaker Saab has been sold to National Electric Vehicle Sweden AB (NEVS), a new company registered in Sweden and founded by two firms in Hong Kong and Japan. NEVS, which is 51-percent owned by Hong Kong-based alternative energy specialist National Modern Energy Holdings and 49-percent owned by Japanese investment firm Sun Investment LLC, was "established for the purpose of acquiring the assets of the Saab Automobile bankruptcy estate," according to the statement.
"NEVS and the Receivers of the Saab Automobile bankruptcy estate signed a purchase agreement which covers the main assets of Saab Automobile AB, Saab Automobile Powertrain AB and Saab Automobile Tools AB," NEVS and Saab bankruptcy administrators said in a joint statement that did not specify the purchase sum.
Korea - S. Korean auto production grows 3.8 pct in May
Source: Philippine Times, 12 June 2012
South Korea's automobile production grew 3.8 percent in May from a year earlier due to brisk exports and a rise in domestic sales that stemmed from launch of new models, a government report showed.
Auto production by the nation's five carmakers – Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and Ssangyong Motor – reached 403,593 vehicles in May, up 3.8 percent from the same period of last year, according to the ministry of knowledge economy.
Australia - Australia new vehicles sales up 24% in May
Source: The Straits Times, 05 June 2012
Sales of new vehicles in Australia were up a hefty 24.1 per cent in May, compared to the same month last year when sales had been temporarily hit by supply disruptions from Japan's tsunami. Sales in May were up 21.5 per cent on April, which is typically a soft selling month.
Sales of sport utility vehicles continued their meteoric run with a rise of 56.6 per cent, compared to a year earlier, while gains in light and heavy trucks pointed to solid business investment. The strength of vehicle sales sits at odds with softness in the retail sector and suggests consumers are still confident enough to splash out on big ticket items.
India - Car sales tepid; diesel fares better
Source: The Hindustan Times, 02 May 2012
After a spell of three consecutive months of record breaking sales, the automobile industry started feeling the heat of economic slowdown with tepid sales in April.Market leader Maruti Suzuki reported a mere 3.5% increase in sales last month. Homegrown Tata Motors and US car majors General Motors and Ford fared even worse.
Sales of its “petrol only” cars suffered as diesel cars continued to flourish. “The sales were not on the expected lines as uncertainty in fuel prices, hike in excise duty and local taxes in some states continue to put a lot of pressure,” said P Balendran, vice-president, General Motors. “We are hopeful that the market will improve in the coming months.”
Japan - Japanese Auto Sales Surge
Source: The Wall Street Journal, 01 May 2012
Japan's auto sales surged 92% in April from a year earlier, sustaining a strong upward trend as government subsidies helped accelerate the recovery in demand from the lows seen after last year's natural disasters.
Japan's domestic sales of new cars, trucks and buses swelled to 208,977 vehicles from 108,824 a year earlier in April, outstripping the 78% jump in March with the eighth straight month of increase, the Japan Automobile Dealers Association said. The figures don't include sales of mini cars and trucks.
China - International carmakers aggressively wooing China
Source: The Straits Times, 27 April 2012
With weak demand from Europe and the US, international carmakers are aggressively wooing China to boost sales, launching over 100 new models at this year's Beijing Auto Show. Analysts project auto sales in China to hit 35 million units by 2020, as car-owners make up only three per cent of the population here, compared to 80 per cent in America.
And while it is the world's biggest and most powerful market for cars, it's also not an easy one to manoeuvre.The mainstream market is extremely competitive with well-established local brands. The Chinese government has also raised gasoline prices, mandated officials to buy only local brands and has made it tougher for foreign carmakers to invest and set up manufacturing plants here.
India - Volvo may source components from Indian joint venture
Source: The Business Standard, 16 May 2012
World’s leading truck-maker Volvo is mulling to source auto components for global market from its Indian joint venture, VE Commercial Vehicles (VECV). The Sweden-based Volvo Group is exploring the possibilities as it wants to take advantage of the low-cost manufacturing in India.
VECV has already a component manufacturing plant in Dewas (Madhya Pradesh) and a second plant is under construction in the adjacent area. The Volvo group has already expressed its intent to source engine from VECV’s upcoming engine plant in Pithampur. It will be the global hub for producing engines which go into Volvo group’s trucks and buses worldwide.
China - Auto sales see optimistic market in China
Source: Xinhua Daily, 15 May 2012
The China Passenger Car Association released statistics last Wednesday showing that a total of over 1.15 million cars, sport utility vehicles, multi-purpose vehicles and minivans were sold in April. That figure was down 9.3 percent from March but up 6.3 percent from a year earlier.
Because of the slowing economy, the removal of subsidies and tighter rules on new car registration, China's auto sales growth slowed dramatically during the first few months of 2012, prompting analysts to express concern about the 8-percent growth target set for the world's largest auto market. However, the country's auto industry showed a trend of recovery in April, as vehicle sales rose 5.2 percent, rebounding from a 3.4-percent fall registered during the first quarter.
Australia - Australia's new vehicle sales down 0.7% in April
Source: Nasdaq, 16 May 2012
Total new motor vehicle sales in Australia fell 0.7% in April from the previous month, the Australian Bureau of Statistics (ABS) reported. The ABS data showed that 89,261 new vehicles were sold across Australia in April, down from 89,869 in March.
Sales of new motor vehicles decreased in five of the eight states and territories in April, compared to March, the ABS said. The Northern Territory recorded the largest percentage decrease, with 5.6 percent, followed by South Australia and Victoria. Sales in Western Australia increased by 1.4 percent over the same period.
Australia - Australia March vehicle sales up 3.9 pct on year
Source: Reuters, 03 April 2012
Sales of new vehicles inAustralia rose 3.9 percent in March, from a year earlier, with strong demand for sport utility vehicles again defying consumer caution elsewhere. The Australian Federal Chamber of Automotive Industries said total vehicle sales in March were 97,616, compared to 93,984 in the same month last year.
China - Toyota China Sales Rise
Source: The Wall Street Journal, 04 April 2012
China sales by Japan's Toyota Motor Corp. and its two local joint-venture partners rose 2.2% in March from a year earlier to about 86,000 vehicles, according to a company spokesman. Various industry forecasts point to overall vehicle sales this year growing about 5% to 10% from 2011.
After rapid growth in 2009 and 2010, China's auto market as a whole slowed considerably last year as sales of smaller-engine cars and commercial vehicles stalled after the government ended some incentives for car buyers.
India - Price hike fears drive March auto sales
Source: The Business Standard, 03 April 2012
Passenger vehicle sales in the domestic market soared to a record high last month, as buyers advanced their purchases to avoid price hikes after the government announced an increase in excise duty, registration tax and value-added tax in the Budget.
Ten of India’s 19 leading automobile manufacturers sold 18 per cent more vehicles at 270,441 units, compared to 228,793 units in March 2010. This was the highest growth rate since April 2011, when sales rose 14 per cent. Despite the strong numbers, car companies are cautious about the turnaround and the sentiment in the market.
India - India's auto sector gears up for higher sales
Source: Channel News Asia, 10 April 2012
India's auto sector is gearing up for higher sales in the current business year, thanks to record numbers in the January-March period. And most car manufacturers are planning on launching new diesel models to meet growing demand.
After a rough start, India's automobile industry hit high gear in the final quarter of the last business year ended in March.Sales numbers were strong for the January to March period, with market leader Maruti Suzuki booking its highest ever monthly sales for the month of March. Experts hope that the industry will end at a 2-4 per cent growth for the last fiscal helped by the last quarter. But only time can tell whether a good fourth quarter is a sign of a profitable economic year ahead.
China - China's auto sales fall 3.4% in first quarter
Source: Channel News Asia, 11 April 2012
Vehicle sales in China fell 3.4 percent year on year in the first three months of 2012 as the world's largest auto market slows. Total vehicle sales for the three-month period reached 4.79 million units, the China Association of Automobile Manufacturers said in a statement.
China's auto sales have slowed since last year after the government rolled back incentives and some cities imposed tough restrictions on car numbers to ease chronic traffic congestion and pollution. But some foreign automakers in China saw strong improvement, helped by consumers favouring overseas brands and perceptions of higher quality.
China - Ford Plans $760 Million Factory in Eastern China
Source: The Wall Street Journal, 19 April 2012
Ford Motor Co. said it will build a $760 million factory in eastern China as part of a plan to double its production capacity there by 2015, which would mark the auto maker's largest industrial expansion in at least 50 years.
Ford is counting on Asia to increase its global sales to eight million vehicles by 2020, up from 5.6 million in 2011, with most of the growth coming from Asia. The auto maker lost $83 million in its Asia-Pacific region last year as it pumped money into expansion plans. Mr. Hinrichs, Ford's Asia chief declined to say whether Ford lost money in China specifically, but he said that the overall Changan Ford Mazda Automobile venture is profitable.
Japan - Japan's Honda to open second Indonesia car plant
Source: Channel News Asia, 15 March 2012
Japanese auto giant Honda said it would invest $320 million in a new car plant in Indonesia, just days after saying it would build a new motorcycle factory in the fast-developing country. The plant will put together the carmaker's smaller models for domestic sales and export to other Asian markets, the company said in Tokyo.
Japanese manufacturers are increasingly looking to expand abroad, hammered at home by a shrinking, greying market and assailed in their export divisions by a strong yen.Indonesia's economy – Southeast Asia's biggest – is a bright spot in a weak global environment, with figures in February showing GDP expanded 6.5 per cent last year, spurred by strong household consumption and private investment.
India - India Auto Buyers to See Prices Rise
Source: The Wall Street Journal, 18 March 2012
India's auto makers on Friday began raising prices of cars and sport-utility vehicles to pass on an increase in the "factory gate" tax, a move that the industry expects will crimp demand for new vehicles in Asia's third-largest automobile market.
A silver lining, however, is the government's decision not to levy an additional tax on diesel-run vehicles, a tax that was widely feared by the industry. These vehicles have been in demand as the lower cost of diesel and higher efficiency adds to their appeal. The government controls the price of diesel – used by trucks and trains – to keep inflation in check.
Korea - POSCO develops lighter steel bodies for electric vehicles
Source: steelguru.com, 20 March 2012
POSCO has succeeded in developing a safer and lighter steel body for electric vehicles. Developed for using high quality steel and complex technologies, the new steel body named PBC-EV (POSCO Body Concept-Electric Vehicle) is 25% lighter than existing steel bodies and abide by all international collision safety regulations. Moreover, test results show that PBC-EV is environment friendly and that the newly developed electric vehicle steel body emits 50% less greenhouse gases.
With the increased usage of electric vehicles around the world, it is believed that PBC-EV will be an added advantage for POSCO to tap the growing demand for such vehicles.
Global - Electric cars boost auto sales market
Source: The Straits Times, 02 February 2012
A new wave of plug-in electric vehicles hitting the market is giving the auto sales industry a boost. And while sales and production of electric cars are providing the industry with a boost, big oil players say electric cars are unlikely to outnumber their gasoline cousins by 2030.
However, rail, electric vehicles and plug-in hybrids, and the use of compressed natural gas in transport is likely to grow, but without making a material contribution to total transport before 2030. BP said the slowing of growth in total energy in transport is related to higher oil prices and improving fuel economy, vehicle saturation in mature economies, and expected increases in taxation and subsidy reduction in developing economies.
Indonesia - Auto Makers Step on the Gas in Indonesia
Source: The Wall Street Journal, 09 February 2012
The world's top car makers are in the middle of an expansion spree in Indonesia, battling for a piece of the world's next auto hub. Toyota Motor Corp. and other Japanese auto makers have dominated the Indonesian market for decades. But General Motors Co., Ford Motor Co., Tata Motors Ltd. and others are trying to wedge their way in. They have plans for new plants, new models or new dealerships, aimed at reaching the emerging middle class in Indonesia.
With overall Indonesian auto sales expected at nearly one million vehicles next year, the country is becoming one of the world's largest car markets. More important, its low auto-ownership rate means Indonesia – the world's fourth most-populous nation, behind China, India and the U.S. – could be one of the world's last great growth markets.
India - India Car Sales Set to Miss Forecast
Source: The Wall Street Journal, 08 February 2012
Car sales in India gained for the third consecutive month in January but the recovery came late as the local body of auto makers expects car sales to miss its guidance of up to 2% growth in the current financial year through March.
Subdued economic growth, higher gasoline and diesel prices and a surge in loan rates – the Reserve Bank of India has increased rates 13 times since March 2010 – forced potential customers to put off car purchases. Discounts by car makers, introduction of new models and higher demand for diesel models in recent months helped to partly revive sales, which grew 7.2% in January to 196,013 cars. The January performance followed an 8.5% increase in December and a 7.5% addition in November, which was the first rise in car sales in five months.
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.
Global - Global car sales to "rise 4%"
Source: Channel News Asia, 06 March 2012
The global car market should grow four percent this year although Europe will lag behind because of the debt crisis, the German automaker federation. Despite "headwinds" in the world economy "the global automotive market remains on course for growth," VDA president Matthias Wissmann said at a news conference on the eve of the Geneva International Motor Show opening.
VDA expects the US market to remain dynamic after two years of double-digit growth, racking up an eight percent gain to 13.7 million light vehicles in 2012. It said China will also post strong growth of eight percent to 13.1 million vehicles. In Japan, where car sales last year were hit by the earthquake and nuclear disaster, the market should rebound by 17 percent to 4.1 million units. Western Europe is the dark cloud on the horizon.
India - India's Tata Motors places bid for Saab
Source: Channel News Asia, 06 March 2012
Tata Motors has placed a US$350 million bid to buy bankrupt Swedish car maker Saab Automobile, a newspaper report said. "Tata's global acquisition team has been in negotiations with Saab and private equity players for a prospective acquisition by its Jaguar-Land Rover unit," the Financial Express newspaper reported, quoting an unnamed source.
Last month, Saab officials said that at least four companies had placed preliminary bids for a buy-out -- most of them from outside Sweden. All of Saab's assets would be for sale, the company has said. Tata Motors, which also makes the world's cheapest car, the Nano, bought British luxury brands Jaguar and Land Rover from US Ford Motor in 2008 for US$2.3 billion as part of its plans to expand beyond Asia. Tata Motors' spokesman declined to comment when contacted by AFP.
Korea - S.Korea's auto sales rebounds in Feb. on local demand
Source: Xinhua Daily, 02 March 2012
South Korea's automobile sales rebounded last month as domestic sales were enhanced amid rising working days, local carmakers said. Global car sales by the nation's five automakers, including Hyundai Motor, Kia Motors, GM Korea, Renault Samsung Motors and Sangyong Motor, reached 689,915 vehicles in February, up 28.3 percent from a year earlier. From a month before, global auto sales expanded 11.5 percent.
The February rebound came after the sales posted a 1.7 percent on-year contraction in January. The rebound was mainly attributed to a recovery in domestic demand, which drove down car sales the previous month. Overseas sales, including cars exported from South Korea and vehicles assembled in overseas plants, came to 577,010 units in February, up 34 percent from a year earlier.
China - China's Geely to sell sedans in Britain
Source: Channel News Asia, 15 December 2011
Chinese automaker Geely said it plans to start selling cars in Britain by the end of next year, as the company seeks to expand its presence in developed markets. Zhejiang Geely Holding Group, which owns Swedish nameplate Volvo, will sell its Emgrand EC7 sedan through a network of 30-40 dealerships around Britain, company spokesman Victor Yang told AFP on Thursday.
The four and five-door sedans will be priced from 10,000 pounds (US$15,460) and will be distributed through Manganese Bronze Holdings under the name Geely Auto UK. Geely already exports vehicles to more than 40 developing countries in eastern Europe, Latin America, the Middle East, Africa and Southeast Asia.
India - Renault bets on diesel models to beat competition
Source: The Economic Times, 16 December 2011
With diesel variants now accounting for over a fourth of India's passenger car sales, French major Renault has decided to roll out this fuel's versions in three of its new launches next year with more locally-sourced parts to cut costs.
Renault has made this strategic move at a time when the auto industry is facing a rough patch, following falling passenger car sales due to high fuel cost and soaring interest rates. Petrol prices were hiked five times this year, while diesel remained stable.
Indonesia - Indonesia Car Sales to Remain on a Positive Growth Path
Source: Indonesia Today, 15 December 2011
Although Indonesia has one of the largest passenger car markets in South East Asia, commercial vehicles have been outperforming the industry average in recent years and this a trend Business Monitor International (BMI) expects to continue in the short term.
Looking ahead to 2012, BMI expects car sales to remain on a positive growth path, although it does think some level of slowdown is inevitable, given the pace of growth to date. One of the biggest risks to its forecast for passenger car sales is the potential for new regulations on car financing, which were suggested in October to avoid a credit bubble. Nevertheless, the passenger car segment still attracts investment thanks to clear government policy.
Oil rises in Asia on China stimulus hopes
Source: Channel News Asia, 23 August 2012
Oil prices surged in Asia on Thursday as hopes of a Chinese stimulus soared after manufacturing activity in the world's largest energy consumer fell to a nine-month low in August, analysts said. Crude markets, which had earlier been buoyed by hopes of additional stimulus from the US Federal Reserve, were given a further boost from heightened optimism that China's central bank would do the same.
Preliminary figures released Thursday from the closely watched HSBC purchasing managers' index (PMI), which gauges nationwide manufacturing activity, hit 47.8 this month, its lowest since November. This raised trader hopes that the Chinese government would intervene with policy easing measures to jumpstart growth.
South Korea: S.Korea's auto exports estimated to grow 3.1% in 2013
Source - Xinhua, 10 December 2012
South Korea's auto exports were estimated to grow 3.1 % in 2013 despite lasting instabilities in the global economy that will be offset by positive effects from the free trade agreement (FTA), the economy ministry said. According to the Ministry of Knowledge Economy, the country's auto exports were forecast to reach 3.3 million units in 2013, up 3.1 % from estimated 3.2 million for this year. The 2012 estimation was 1.5 % higher than the previous year.
The ministry cautioned that the local auto industry will show a slight growth next year amid the persistent uncertainties in the global economy, saying that the eurozone fiscal crisis, the U.S. fiscal cliff and economic slowdown in China will have a negative impact on the auto sector. However, the ministry noted that the auto industry will be boosted by the rising demand from North America and the positive effect from additional cuts in tariff following the FTA with the European Union (EU).
Japan/China: Japanese auto sales improve in China on promotions
Source - Xinhua, 07 December 2012
Japanese auto brands are gradually recovering from the fallout of anti-Japan protests on the back of heavy sales promotions, according to new data. Data from several leading Japanese automakers showed improved sales in China last month. New car sales at Honda Motor Co. surged 70.9 % to 41,205 units from October to November.
Although the figure still marked a decline of 29.2 % from a year earlier, the decrease narrowed from 54 % in October and 40.5 % in September. Toyota Motor Corp. saw its new car sales jump 39.9 % to 63,800 units in November from October. Other Japanese automakers that saw an increase in Chinese sales last month included Nissan Motor Co. and Mazda Motor Corp. The rebounds came after Japanese auto companies launched sales promotions to lure Chinese consumers, industry insiders said. About 64 % of respondents said they expect a pick-up in sales for Japanese auto brands in the first quarter of 2013 or even earlier. But the extent and duration of the improvement will depend on the development of China-Japan relations.
Thailand: 2012 turning out to be golden year for Thai automobile industry
Source - The Nation, 30 November 2012
This year can certainly be considered the golden year for Thailand's automobile industry. Apart from achieving a new sales record of an expected 1.4 million vehicles, 2012 also marks the first year that the industry has broken the 2-million-vehicle production mark. Auto exports from Thailand this year is estimated at USD 32.6 BN, making the auto industry the biggest earning industry, with 1-tonne pickup trucks and eco-cars as the mainstream products, as well as auto parts and components. Watching this growth trend, many are already eyeing the 3-million-vehicle production mark for the auto industry. It is expected that by the end of 2012, total auto and auto parts exports from Thailand would exceed USD 32.6 BN - 1 million automobiles worth USD 19.6 BN and parts worth another USD 13 BN. Indeed, this makes the automotive industry the top exporter of the country.
In terms of technology, an important factor in automotive industry development, research and development centres have been set up by major auto and auto parts producers. In social and environmental issues, the auto industry has also played an important role in raising the quality of life and of society, through development of its workforce. In addition, it has contributed to the development of transport and has spread development to rural areas. It is highly possible that Thailand would replace other countries as auto exporters due to the strong foundation of the Thai auto industry as a whole. This also includes the auto parts industry, and that is the next step in creating sustainability for the Thai auto industry on the global stage.
Indonesia - Suzuki to Spend $780m in Indonesia for Engines, Cars
Source: The Jakarta Globe, 04 January 2012
Suzuki Motor Corp said on Wednesday it would spend 60 billion yen ($780 million) to build more engines and cars in Indonesia as it seeks growth in the fast-expanding market dominated by the Toyota Motor Corp group.
Suzuki will spend another 20 billion yen to further raise the ratio of locally produced components and for the planned expansion of output capacity by 20,000 cars to 100,000 a year this spring, when it is due to launch a new model in the seven-seater segment popular in Indonesia.
China - Chinese Demand to Lead in Global Auto Sales
Source: The Jakarta Globe, 04 January 2012
The number of cars and light trucks sold globally will grow 6.7 percent this year, led by Chinese demand outside the population centers of Shanghai and Beijing, R.L. Polk & Company said. Sales will rise to 77.7 million vehicles, helped by a 16 percent gain in China to 17.9 million, according to Polk, a research company based in Southfield, Michigan.
“Growth in China will pick up again in 2012,” Anthony Pratt, Polk’s director of forecasting for the Americas, said in a telephone interview. “The growth there will be more a function of natural demand than stimulus, and the expansion in the second-and third-tier cities is a trend that’s going to continue to develop.”
India - Mahindra to launch electric cars by Nov
Source: Reuters, 06 January 2012
Mahindra & Mahindra Ltd expects to sell Mahindra Reva electric cars in India by November, a top official said. The automaker, which acquired electric vehicle maker Reva in 2010, unveiled two electric cars at the Delhi Auto Expo in New Delhi.
"We will launch these cars in the market by Diwali," Pawan Goenka, head of Mahindra Reva Electric Motor Co, as well as president at parent Mahindra & Mahindra, told reporters at the Auto Expo. "India is ready for electric vehicles if manufacturers provide them," he said.
Japan - Japanese Automakers Plea for Govt to Reduce Taxes on Cars to Spur Sales
Source: The Jakarta Post, 07 November 2011
The plea from the heads of Toyota Motor, Nissan Motor, Honda Motor as well as representatives from auto unions and dealers – a rare show of combined forces – underlines the industry’s crisis from the March tsunami disaster, the surging yen and stagnant sales.
The auto executives appear to have public opinion on their side. 4.3 million people signed the petition in just two months. Japanese taxes, which are paid each year for ownership in addition to the time of purchase, are so high that over a decade a car owner pays more in taxes than their original outlay on the vehicle, they said. Reducing the tax burden would potentially add some 920,000 vehicles to annual auto sales in Japan, according to a government estimate. Japan’s annual sales of new autos have shrunk to about 4.25 million vehicles, falling from a peak 7.8 million vehicles in 1990.
Thailand - Toyota, Mitsubishi to resume Thai production
Source: Channel News Asia, 10 November 2011
Japanese auto giants Toyota and Mitsubishi Motor have said they will resume production in Thailand, after the country's flood disaster closed factories for more than a month. Toyota said it would resume production from November 21 at its three Thai plants, which were forced to halt operations on October 10. The closures triggered a shortage of parts at home, in Asia and as far away as North America and South Africa.
Fellow automotive giant Mitsubishi said on Thursday it would restart production at its Laem Chabang Plant in Thailand from Monday, after the plant closed on October 13 due to a lack of parts from flood-hit suppliers. Suppliers were steadily recovering, "enough so that parts needed for its models produced at the Laem Chabang Plant are now available again", the company said.
Korea - Hankook Tire's accumulative tire production tops 1 bln units
Source: Xinhua News, 14 November 2011
South Korea's leading tire maker Hankook Tire said Monday that its accumulated tire production topped 1 billion units. The company became the first South Korean tire maker that produced more than 1 billion tires, and it took only seven years to double the 500 million units produced as of 2004, according to the statement sent by Hankook.
Hankook, founded in 1942, started full-fledged tire output in 1979 with a plant that had a production capacity of 1.5 million units per year. The company added a factory with a production capacity of 10 million units in 1991, before building two plants in China in 1999 and one factory in Hungary in 2007. The tire maker, which can mass produce 90 million tires per year as of November, aimed to manufacture 100 million units annually, Hankook said.
Japan - Environmentally friendly cars continue to be refined
Source: Bisnis Indonesia, 30 November 2011
The current global automotive manufacturers continue to compete to develop environmentally friendly automobile technology. In Tokyo Motor Show which opens to-24 this morning at Tokyo Big Sight exhibition area, the entire principal display their latest technology applied to dozens of concept cars, whether hybrid technology, electric, diesel or the new generation.
“The automotive sector is still a very promising industry, where technological development in the sector is moving very rapidly," CEO of Nissan Motors Co.. Ltd. Charles Ghosn said in Tokyo this morning, Wednesday, November 30, 2011. According to him, the automotive industry continues to compete to improve the current automotive technology so it can fulfill the dream of society in the future.
India - Uncertain diesel pricing policy hits expansion plans of several carmakers
Source: The Economic Times, 30 November 2011
Ambiguity over diesel pricing and possibility of additional duty on diesel cars have forced several carmakers, including market leader Maruti Suzuki, to go slow on or even abandon their expansion plans in the fastest-growing segment for India's automobile industry.
In the past few months, demand for diesel cars has gone through the roof with the gap between prices of diesel and petrol widening as much as Rs 25 per litre compared with a price gap of Rs 9.00-9.50 in June 2010. Almost every car powered by diesel now has a waiting of more than 3-6 months. While the country's largest carmaker, Maruti Suzuki, is rethinking its expansion strategy for diesel cars, Hyundai India has already put its plans of setting up a diesel engine plant on a back burner.
China - Automakers confident about China market
Source: Xinhua News, 28 November 2011
China's automobile market has cooled down this year, but automakers remain confident about the long-term outlook for its market. China has been the world's largest auto market since 2009, when full-year sales soared 46 percent to 13 million units thanks to favorable policies from the government including tax rebates for small cars. The momentum continued in 2010 as sales jumped more than 32 percent to 18 million vehicles
But as government stimulus programs expired, growth slowed sharply in 2011 to 3 percent. Vehicle sales totaled 15 million units in the first 10 months, according to China Association of Automobile Manufacturers. While automakers remain confident about the long-term outlook for China, as evidenced by a slew of expansion projects announced in recent years, near-term prospects are not promising amid global economic uncertainties.
India - Maruti Suzuki Loses $307 Million Revenue on Strike
Source: The Wall Street Journal, 18 October 2011
Maruti Suzuki India Ltd. has incurred a revenue loss of 15 billion rupees ($306.7 million) since Aug. 29 due to labor woes at one of its factories that have severely impacted vehicle output at the country's largest car maker by sales.
The labor unrest and the resultant lower production during the ongoing festive season may impact sales at Maruti, which controls nearly half of the local market with 15 models. Auto sales usually rise during the two-month festive season, which is considered an auspicious time in India to make new purchases.
Thailand - Thai flooding disrupts auto supply chains
Source: CBC News, 13 October 2011
Severe flooding has forced a halt to Honda and Toyota assembly lines in Thailand that account for about 7 per cent of their combined global car production. American automakers Ford and General Motors are faring better.
The disruption to production at Toyota Motor Corp. and Honda Motor Co. comes just as they bounce back from the March 11 earthquake and tsunami in Japan that destroyed autos parts suppliers and upended car production around the world. U.S. automakers have not been as badly affected as their Japanese rivals. Eastern Rayong province where their factories are located has not taken the brunt of flooding. About two thirds of Thai industry is in the province.
Vietnam - Automakers spared million of dong in taxes
Source: VNEconomyNews.com, 06 October 2011
Automakers in the country certainly have a sigh of huge relief after the Ministry of Finance in a new decision spared them of trillions of Vietnam dong in payable tax owing to the recalculation of tax rates for auto components.
Honda Vietnam and Ford Vietnam do not have to pay the amounts of VND3.34 trillion and VND32.5 billion for import tax respectively as earlier proposed by customs offices, according to Ministry of Finance’s guiding document. Other automakers escaping the crippling tax sums include Vinamotor, Toyota Vietnam, and GM Daewoo.
Global - Peugeot announces plan to slash costs, jobs in 2012
Source: The Bangkok Post, 26 October 2011
French auto giant PSA Peugeot Citroen on Wednesday announced an 800-million-euro cost-cutting plan for next year that is expected to include lay-offs amid a stagnating European car market.
The company, France's largest automaker and Europe's second-largest, employs over 205,000 people worldwide, including 100,000 in France. The savings plan comes after the company announced that sales in its cars division was down 1.6 percent to 9.3 billion euros ($12.94 billion). However, overall sales were up 3.5 percent in the third quarter to 13.45 billion euros. Saint-Geours said the company expected growth in the European market to stabilise, but to grow seven percent in China, six percent in Latin America and 30 percent in Russia. CGT union representative Bruno Lemerle slammed the savings plan as "scandalous."
India - Thai floods disrupt Indian auto firms' ops
Source: The Business Standard, 30 October 2011
Tata Motors, India's biggest vehicle maker by revenue, is being forced to suspend work at its plant in Thailand where it makes the stylish single and double cab pick-up truck Xenon in partnership with a local company. As Bangkok remains under constant flood alert, several automotive manufacturers have seen their plants inundated with more than knee-high waters entering the main vehicle assembly area also crippling supplies of essential auto components.
In a statement a Tata Motors spokesperson stated, "We have kept the plant's operation suspended this week as a precautionary measure, as is reasonable. We will review the situation on Monday. We have stocks both of finished vehicles and material."
Japan - Honda to suspend Philippine production
Source: The Mainichi Daily News, 02 November 2011
Honda Motor Co. said Wednesday it will suspend operation at its Philippine plant from Thursday, while also downsizing output in other countries as the impact of supply chains disruptions caused by the Thai flooding continues to spread globally.
Domestically, the company said it will slash output by around half at its plants in Sayama, Saitama Prefecture, and Suzuka, Mie Prefecture, from Monday. It also said it began downsizing production in Britain from Oct. 31, while it plans to cut 30 percent of the production volume at its plant in Brazil from Monday.
China - China's luxury dealer set for used-car boom
Source: scmp.com, 21 September 2011
The head of China's car dealer Zhongsheng Group expects growth in the market for reliable second-hand autos to outpace new car sales in the coming years.
"Right now we don't even have a item on our income statement for second-hand sales... but this is going to be a huge and very important factor for us," said Huang Yi, chairman of the biggest Hong Kong-listed auto dealer by market value and a major mainland dealer for Toyota, Lexus, Nissan and Mercedes-Benz. "I think in the next few years sales of used cars will grow at more than 20 percent," he said.
Indonesia - Toyota to boost Indonesian output
Source: The Wall Street Journal, 16 September 2011
Toyota Motor Corp. said it would crank up production in Indonesia by more than 60% in a move to maintain its dominant position in Southeast Asia's largest economy. Japan's largest auto maker said Tuesday that it will invest around $340 million to build a new factory which will lift its capacity to 180,000 vehicles a year in Indonesia by the middle of 2013, from about 110,000.
As Toyota struggles with a downturn in demand at home and key export markets like the U.S. and Europe, Indonesia continues to be a sweet spot for the company. It is expected to sell around 300,000 vehicles in Indonesia this year giving it about 40% of the rapidly growing market.
China - G.M. plans to develop electric cars with China
Source: The New York Times, 21 September 2011
General Motors said Tuesday that it would develop electric cars in China through a joint venture with a Chinese automaker, and would transfer battery and other electric car technology to the venture.
G.M. has been a pioneer in electric car technology, as many other automakers have been more interested in hybrids. The company gained expertise that practically no automaker in Europe or Japan can match, much less in China, by pouring large sums of money into the development of the EV1 electric car in the early 1990s, and it has continued to invest since.
India - Auto Makers Prepare Launches for India Festival Season
Source: The Wall Street Journal, 04 October 2011
Hyundai Motor Co., Tata Motors Ltd. and Skoda Auto a.s. are among several auto makers gearing up to introduce a slew of vehicles in India this month as they attempt to win over customers and reverse a slowdown in sales in Asia's third-largest automobile market.
The introduction of new models comes at a time when the Indian automobile market is reeling from the impact of rising loan rates and higher fuel costs, with sales falling 10% in August after a 16% decline in July – the biggest drop since November 2008 and the first since January 2009. Companies are hoping that, like in previous times, new vehicles will help perk up customer sentiment and revive sales.
China - China's Low-Cost Image Fades
Source: The Wall Street Journal, 30 September 2011
Rapidly rising wages in China have reached the point at which foreign manufacturers need to give up on the notion of the country as a low-cost production base, a senior Hyundai Motor Co. executive said Thursday.
Auto makers are expected to be affected as much as other industries by the trend, if not more, Mr. Noh said, adding that wage costs for many foreign auto manufacturers already have doubled in less than a decade. He said that a rival foreign auto maker that Hyundai has researched has seen worker wages in China rise to 49,000 yuan a year per worker in 2010, up from 24,500 yuan a year in 2003. China still offers other draws, including strong economic growth, an increasingly affluent population and a quickly growing car culture.
Japan - Japan Auto Sales Post First Rise Since Quake
Source: The Wall Street Journal, 03 October 2011
Sales of new cars, trucks and buses in Japan in September grew 1.7% from a year earlier to 313,790 vehicles, rising for the first time in 13 months, the Japan Automobile Dealers Association said on Monday.
Still, the outlook for the country's auto industry remains bleak, as the yen stays near record highs against the dollar, and the debt crisis in Europe and slowing global growth weigh on overseas demand. A stronger yen cut into profits earned overseas when repatriated and makes Japan-built vehicles less competitive overseas.
India - India May Lift Diesel Prices for Luxury Cars
Source: The Wall Street Journal, 04 August 2011
The Indian government will consider a proposal to charge higher diesel prices for luxury cars and commercial users to ensure they don't benefit from a policy designed to help the needy, the country's finance minister said Thursday.
The government, which last raised diesel prices on June 25, mandates that state-run fuel retailers sell the fuel at discounted prices to shield consumers from volatile global crude oil prices. Diesel is the main transport fuel and any change in its price has a significant bearing on India's inflation. Automakers are investing heavily in rolling out diesel-run vehicles to meet growing demand from consumers, who are increasingly shifting to such vehicles as diesel prices are kept sharply lower than those of gasoline.
Indonesia - Hankook aiming for 25% of local market through Indonesian plant
Source: Tyrepress, 08 August 2011
In June Hankook Tire held a ground breaking ceremony for a new tyre plant in Indonesia. While the Korean manufacturer has already shared plans to service the North American and Middle East markets from this facility, executive vice-president Hyun Bum Cho has told Indonesian journalists that it intends to secure a 25 per cent share in the domestic market through output from the plant.
Initially an emphasis will be placed on export markets, however. Cho stated that at first 70 to 80 per cent of tyres produced in the new Lippo Cikarang in West Java will be sent to Middle Eastern and North American markets; when annual production reaches 18 to 20 million units Hankook aims to focus more on Indonesia and Asia. “We plan to have 30 per cent of our production sold in Indonesia, 11 to 20 per cent in ASEAN and the rest for export,” he comments.
China - China July car sales rise 6.7 percent; India down sharply
Source: Reuters, 10 August 2011
Car sales in China climbed 6.7 percent in July from a year earlier, extending a pattern of subdued growth in the world's largest auto market as the weak auto selling season kicks in. Sales in India fell 15.8 percent in July, the first drop in two-and-half years, and higher interest rates and rising vehicle costs are expected to keep demand subdued for the next few months.
The drop in July largely reflected a 25 percent fall in sales reported by market leader Maruti Suzuki as production of one of its popular sedans was crippled due to a shift in its manufacturing facility.
Industry sales growth has been nearly flat in recent months, after jumping 30 percent in the fiscal year ended March to almost 2 million vehicles. U.S. auto sales ticked higher in July, but the industry's top sellers cautioned that the prospect for a second-half recovery remained clouded with consumers hurting in a weak economy. In Japan, sales of new vehicles, excluding 660cc mini cars, fell 27.6 percent to 241,472 units in July and parts supply shortage continue to disrupt production at Toyota Motor (7203.T) and Honda Motor (7267.T). In neighbouring South Korea, however, Hyundai Motor (005380.KS) and Kia Motors (000270.KS) continued to extend their gains with affordable quality cars.
Indonesia - GM to Make Push for Indonesia Hub
Source: The Wall Street Journal, 15 August 2011
General Motors Co. plans to produce a seven-seat "people mover" van in Indonesia as part of a move to re-establish its presence in a surging market dominated by Japanese auto makers and eventually use the country as an export hub. GM intends to build a plant near Jakarta capable of producing about 50,000 vehicles a year, with plans to turn it into a major production base for the region, taking advantage of Indonesia's location to export cars cheaply to the rest of the Southeast Asian market.
GM's new push in Indonesia shows the growing attractiveness of Southeast Asia's largest economy and underscores the U.S. car company's global search for growth to offset slowing sales in some of its key markets.
China - Audi, Nissan lead Chinese auto charts
Source: Warc, 17 August 2011
Audi, Nissan and Volkswagen are among the auto brands most effectively building customer loyalty in China, a study has revealed. The quality of the delivery process held a 25% weighting in terms of determining satisfaction, while salespeople and dealer facilities yielded 14% apiece, and the deal available provided 12% of the final score.Audi topped the charts with 887 points, ahead of Dongfeng Nissan's 800 points, FAW-Volkswagen's 869 points, and the total of 866 points recorded by both Dongfeng Honda and GAC Toyota.
India - Germany's Continental's India arm to invest 50 mln euros to expand
Source: Reuters, 24 August 2011
Germany's Continental AG said on Wednesday its India arm plans to invest over 50 million euros to expand tyre capacity in the world's second fastest growing major auto market.
Continental, which in July acquired India's Modi Rubber's tyre making unit for about $30.11 million, also plans to ramp up operations in the unit's Modipuram plant. The firm plans to double bias truck and bus tyre capacity from this plant to more than one million units in 2013. Continental India plans to increase its headcount by more than a third from the current 1,600 to 2,200-2,400 within the next few years, it added.
Thailand - Honda Plant approaching maximum capacity
Source: The Bangkok Post, 31 August 2011
Vehicle production in Thailand last year reached a record 1.65 million units, according to the Federation of Thai Industries. It forecasts output this year of at least 1.8 million units, of which one million will be exported and 800,000 sold domestically. Output of 2 million units is forecast next year.
Mr Fujimoto, the president of Honda Automobile Thailand, forecasts Honda's production would be 80,000 units short of its full capacity of 240,000 this year because of supply disruptions from Japan following the earthquake and tsunami in March. Production at the company's facilities in Ayutthaya will be ramped up to maximum capacity with two lines and two shifts daily, for the first time in Thailand, starting next month. The company believes sales will reach 920,000 units this year, up from slightly more than 800,000 units last year, and will grow around 9% in 2012.
India - Maruti's labour dispute may impact domestic car sales
Source: The Business Standard, 02 September 2011
The Society of Indian Automobile Manufacturers (SIAM) today said the ongoing stand-off between Maruti Suzuki's management and workers at the Manesar plant was likely to impact the domestic passenger car segment, which had already been witnessing a slowdown, if the dispute prolonged. SIAM also said the "needed" labour reforms could not be carried out as there was no consensus inside the government on crucial issues like laying off of permanent employees during slowdown in the market.
The passenger car segment is already facing tough time in sales with sentiment among customers running low due to high interest rates and hike in fuel prices. Domestic passenger car sales fell for the first time in July this year after 30 months of continuous growth, registering a 15.76% decline mainly due to the hike in lending rates and lower production by market leader Maruti Suzuki during the month.
China - China's SAIC planning to invest $ 3.45 billion on a new brand
Source: Wheels Unplugged, 27 August 2011
China which is already the largest automobile market in the world is looking all set to become the biggest market for the electric vehicles. Now it has been reported that one of China’s biggest domestic auto players, SAIC has reportedly plans to invest $ 3.45 billion in a new brand which will be in electric vehicles business.
In addition to constructing a production site and procuring the necessary equipment, SAIC would allocate 3 billion yuan ($470,429) of the investment to establish a new research and development department in order to increase its research capability.
China - China auto sales growth "to slow sharply" in 2011
Source: Channel News Asia, 08 July 2011
Auto sales in China, the world's largest vehicle market, are expected to hit the brakes this year despite showing a slight rebound in June, an industry group said Friday.The China Association of Automobile Manufacturers said it expects sales to grow five percent in 2011 compared with its earlier forecast for 10-15 percent growth – much lower than the more than 32 percent rise recorded last year.
China, which overtook the US to become the world's top auto market in 2009, has become increasingly important for global players. Auto sales in China rose more than 32 percent last year to a record 18.06 million units. But the sector has since lost steam after Beijing phased out sales incentives such as tax breaks for small engine vehicles introduced to ward off the impact of the global financial crisis. The State Council, or Cabinet, is considering introducing new incentives to revive the auto industry, the official Xinhua news agency said last week.
Asia - Asian Car Makers Cry Foul on Gas Rules
Source: The wall Street Journal, 11 July 2011
Plans being floated by the White House initially would permit more lenient mileage improvements for the largest pickup trucks and sport-utility vehicles – vehicles made primarily by General Motors Co., Ford Motor Co. and Chrysler Group LLC, according to people familiar with the matter. Smaller trucks and SUVs, a market dominated by Toyota Motor Corp. and Honda Motor Co., initially would be required to achieve higher fuel-efficiency gains.
The final ruling could affect the competitive balance in the U.S. auto industry for years to come. Detroit companies have long dominated the market for large trucks, which are highly profitable. Asian auto makers tend to outperform the Detroit Three when it comes to small trucks, such as the Toyota Tacoma, and the RAV-4 and Honda CRV, both small SUVs. In meetings with U.S. officials, Japanese and Korean car makers have argued the proposed rules would give Detroit manufacturers an unfair advantage.
Japan - Toyota Merging Some Units
Source: The Wall Street Journal, 14 July 2011
Toyota Motor Corp. outlined a broad reorganization on Wednesday that merges several subsidiaries to make its domestic operations more cost efficient and address the impact of a strong yen on profitability.
The company's Japanese operations are under enormous pressure from the strong yen that threatens to make domestic production unprofitable and from the impact from the March 11 earthquake. One of Japan's biggest employers and the backbone of the country's manufacturing sector, Toyota also is under significant pressure to resist shifting production overseas.
China - Nissan eyes Chinese market Source: Channel News Asia, 08 July 2011
Source: The Wall Street Journal, 26 July 2011
Nissan Motor Co.'s China joint venture said it will invest 50 billion yuan ($7.76 billion) over five years to expand manufacturing capacity and nearly double sales in China, a key element of the auto maker's broader plan to grab 8% of the global auto market and significantly improve its profitability.
Nissan's global growth strategy, unveiled in Japan last month, aims to raise its profit margin to 8% over the next six years from 6.1% in the last fiscal year. It targets global market share of 8% – well above 5.8% in the last fiscal year – with much of that to come from the biggest and fastest-growing emerging markets, especially Brazil, China, Russia and India.
India - India tyre makers to see better profits from Q2 as rubber dips
Source: The Economic Times, 22 July 2011
Indian tyre makers are likely to see improved profitability from the September quarter aided by a correction in rubber prices and higher product prices, leaving behind two quarters of lower margins, industry officials said.
Natural rubber makes up more than 40 per cent of the cost of a tyre and its prices have fallen over 12 per cent from a peak of Rs 24,300 per 100 kg struck on April 5. "Rubber prices have come down from its peak. It should benefit us from second quarter," said Anant Goenka, deputy managing director, Ceat Ltd , India's fourth largest tyre maker.
Australia - Australia plans to build ties with Indian automotive industry
Source: The Economic Times, 25 July 2011
Australia is exploring possibilities of building better ties between its world-class firms and rapidly growing Indian automotive industries to create new export opportunities and help secure the ongoing strength of the multi-billion-dollar auto industry.
The Indian automotive and other industries using innovations done in Australia for scaling up and manufacturing parts can benefit with its newly introduced R&D Tax Credit Legislation. Australian Minister for Innovation, Industry, Science and ResearchKim Carr, further said the Indian automotive industry wanted to develop more vehicle design, manufacturing processes and low emission technologies and Australia is well placed to provide these innovative products.
Japan - Mitsubishi Predicts 28% Profit Rise
Source: The Wall Street Journal, 14 June 2011
Mitsubishi Motors Corp. said Monday its profit would rise 28% this fiscal year, becoming the first Japanese car maker to predict profit growth since the March 11 earthquake disrupted production and the strength of the yen undercut export earnings.
The maker of the Pajero sport-utility vehicle and the i-MiEV electric car aims to make more vehicles in Japan than previously planned in the second half to make up for the lost volume in the first six months, pushing its annual domestic output slightly up from the past fiscal year. Improving manufacturing operations at home and a planned 10% growth in overseas production will increase its global production 6% to 1.17 million vehicles this fiscal year, it said. The robust output target reflects the company's ambitious growth in Thailand and other Southeast Asian countries, where it aims to attract customers with the Triton pickup truck and the Pajero Sport SUV.
India - India May Become Third Largest Auto Market by 2020
Source: Reuters, 13 June 2011
India, the world's sixth largest auto market, is poised to become the third-largest market for auto sales by 2020 after China and the United States, J.D. Power and Associates said on Monday.
Auto sales are expected to reach about 11 million in India in about a decade, according to J.D. Power, which tracks the auto industry. During that time period, China is expected to see 35 million light vehicle sales and the United States is expected to reach sales of 17.4 million. But profit margins in India will remain narrow because much of the demand there is for small cars, which are not as lucrative for automakers. Nearly 80 percent of all passenger vehicles sold in India were mini-cars or subcompact passenger cars last year, J.D. Power said.
China - China Holds Keys For Saab's Rescue
Source: The Wall Street Journal, 14 June 2011
Saab Automobile owner Spyker Cars NV signed a €245 million ($351.5 million) rescue package with two Chinese firms that effectively would transfer control of the troubled Swedish auto maker to the Chinese companies.
Pang Da Automobile Trade Co. agreed to increase its investment in Spyker to €109 million from €65 million to retain a 24% stake in the Dutch company.The two Chinese companies together will control 53.9% of Spyker, and each has the right to nominate as many as two members of the Spyker supervisory board. Victor Muller, chief executive of Saab and Spyker, said he will hold 29.9%. Spyker also signed a nonbinding agreement with Youngman and Pang Da to create distribution and manufacturing joint ventures in China. Youngman would control 45% of the manufacturing venture, Saab would control 45% and Pang Da 10%. In the distribution venture, Youngman would hold 33%, Pang Da 34% and Saab Automobile 33%.It remains to be seen what influence the new Chinese owners will exert.
China - Saab auto says cannot pay wages to 3,800 staff
Source: AFP, 23 June 2011
Swedish automaker Saab cannot pay its 3,800 employees their wages for lack of "short-term funding," the Dutch parent company Swedish Automobile, formerly Spyker, said Thursday.Saab, which has based its funding strategy on tie-ups in China, had announced on June 13 a partnership with two Chinese businesses which was to generate investment of 245 million euros ($350 million). The two Chinese firms were car distributor Pang Da and manufacturer Zhejiang Youngman Lotus Automobile.
But production at the Saab factory at Trollhattan in western Sweden has been at a standstill since June 8. On Monday, management told workers on the assembly lines that they should not come to work before July 4. Its attempts to tie up with Chinese firms are aimed partly at accessing funding and partly at widening access to the fast-growing Chinese auto market.
China - Chinese electric taxis have a long way to go
Source: Today, 29 June 2011
A pioneering electric taxi (picture) project in China's southern economic powerhouse of Shenzhen seems a success by most accounts. Riders are enthusiastic, there have been no accidents and drivers are termed "gracious", not a term usually applied to mainland drivers.The pilot project, which could be replicated in other cities, underpins China's ambitious plans to put at least half a million electric vehicles (EV) and plug-in hybrids on the road by 2015.
To bolster China's energy security, Beijing has pronounced the electric vehicle industry a top priority, earmarking US$1.5 billion (S$1.9 billion) annually for the next 10 years in the hope it can transform the country into one of the leading producers of clean vehicles. Local manufacturers, from SAIC Motor to Dongfeng Motor Group, have pledged massive investments in greener vehicles. Global automakers, including BMW and Nissan Motor, are also working with local governments to roll out their E-Mini and Leaf respectively.
Japan - Mazda sees growth with lean gas engines, not EVs
Source: Associated Press, 30 June 2011
Mazda's president believes gasoline engines will still power 80 to 90 percent of the world's autos even in 20 years time, and remains confident it can grow without electric vehicles.
The comments Thursday from Mazda Motor Corp. President Takashi Yamanouchi contrast with the strategy at Japanese rival Nissan Motor Co., which is banking heavily on electric cars. Yamanouchi said Mazda's efficient gas engine called "Skyactiv" will be a pillar of its growth strategy as the Hiroshima-based manufacturer seeks to boost sales in emerging markets.
China - Auto sales post 1st drop in 27 months
Source: The Global Times, 11 May 2011
China's auto sales posted its first annual decline in 27 months in April amid rising fuel prices and the expiry of government incentives to boost buying. Car makers sold a total of 1.55 million vehicles last month in China, down 0.25 percent annually, the China Association of Automobile Manufacturers said yesterday. The sales decline followed a 5.36-percent growth in March and 4.57-percent increase in February. April's sales were also 15 percent lower than March's.
"The auto industry faces a very tough growth situation this year," Dong said. The end of government stimulus on fuel-efficient small cars and purchase curbs in some big cities slowed vehicle sales in the world's largest auto market this year after a two-year surge. Demand was also dented after the central government raised retail gasoline and diesel prices twice this year and Japan's devastating earthquake disrupted deliveries and affected Chinese output.
China - Saab's China Lifeline Cancelled Within Days
Source: The Wall Street Journal, 13 May 2011
Saab Automobile's future was again in doubt Thursday after owner Spyker Cars NV said a €150 million ($213 million) investment agreement with a Chinese auto maker had fallen apart. In a statement, Hawtai confirmed the deal had been terminated. "The current situation is complex and it was not possible to reach agreed documentation in the time frame contemplated by the agreement," it said. "Hawtai remains in discussions with Spyker to reach an agreement which is mutually beneficial to all parties."
Netherlands-based Spyker said in a statement that it and Saab continued to work on securing short and medium term funding. "To that end, Spyker and Saab Automobile are negotiating equity and debt financing and/or technology licensing with various (strategic) Chinese partners," it said. Several possible partners have been identified, but none has confirmed active negotiations with Spyker. Saab intended to resume talks SAIC Motor Corp. but the Chinese auto maker hadn't been notified about a visit by Mr. Muller any time soon, said Zhao Yan, SAIC's deputy director of public relations. Great Wall Motor Co. had held talks with Saab, but Great Wall's public relations chief Shang Yugui didn't believe they would resume in the near term. China Youngman Automobile Group Co. wasn't immediately available to comment. Auto-parts suppliers' organization FKG said Saab's suppliers would have to cut staff following Thursday's announcement.FKG, which represents the automotive suppliers in Sweden, estimates that about 3,000 employees are working at different auto parts supplier companies that have exposure to Saab Automobile.
Japan - Japanese Automakers Likely to Cut China Output
Source: Bernama News, 16 May 2011
Major Japanese automakers are likely to reduce their output in China this month due to supply disruptions sparked by the March earthquake, a Chinese partner said Monday.Guangzhou Automobile Industry Group Co. said in a statement that its May production will likely decrease 30 percent from a year earlier. The group, which has separate joint ventures with two Japanese automakers Toyota Group Corp. and Honda Motor Co., didn't disclose the year-earlier figure.
"Guangzhou Honda Automobile Co. and Guangzhou Toyota Motor Co. are adjusting their output by allowing long-term leaves or abolishing overtime work," said Chairman Zhang Fangyou.
Meanwhile, Dongfeng Honda Automobile Co., a joint venture between Dongfeng Motor Corp. and Honda Motor, predicted earlier the overall impact of the earthquake would not have significant impact on the company. Chen, Vice president of Dongfeng Motor, added that there are still enough new car stocks in Beijing.
Japan - Toyota Lifts Output View
Source: The Wall Street Journal, 01 June 2011
Toyota Motor Corp. said Tuesday that it expects to resume production at 90% of normal capacity during June and match last year's output for the full year, a move signaling a sharp rebound from its post-earthquake doldrums.
In a meeting with its key auto parts suppliers in the Nagoya area of central Japan, Toyota executives said they are now confident of boosting production to 90% of planned levels as of next month, said company spokesman Keisuke Kirimoto. That is a marked improvement over the 70% of production capacity figure Toyota estimated as recently as May 12 when it posted its latest quarterly earnings. It is well above the 50% of normal level it has projected for May.
India - Unsold Stock to Hurt India’s Auto Industry
Source: The Wall Street Journal, 01 June 2011
Auto companies who have reported May sales so far have managed to meet investors’ subdued expectations. However, as unsold stock in dealerships has started to pile up, a more accurate picture of sales is set to emerge over the next two to three months, analysts say. Investors did not have very high expectations of May sales to begin with. In April, local car sales grew 13% from a year earlier, their slowest pace in nearly two years, as higher car loan rates and rising fuel prices discouraged prospective buyers. Although this figure still suggests a robust growth, it is a lot lower than the overall 30% increase in car sales for the year that ended March 31 – the biggest increase since 1999-2000.
Auto companies record dispatches to dealers as sales. This means a drop in demand at the dealership level does not immediately show on companies’ sales figures. But it will once unsold stock fills up warehouses and dealers stop taking in more units.The analyst expects auto sales growth in the fiscal year that started April 1 to slow to 9%-10% from 30% in the previous fiscal year.Four of the five auto stocks included in the Sensex – Bajaj Auto Ltd., Mahindra & Mahindra Ltd., Tata Motors and Maruti Suzuk i– underperformed the benchmark over the last month due to concerns about slowing sales, and rising raw materials costs. Things are unlikely to get better for investors any time soon.
Korea - Hyundai, Kia Production Disrupted Due to Strike at Supplier
Source: BBC News, 24 May 2011
Hyundai, South Korea's top carmaker, has warned of a severe production disruption, because of a shortage of engine parts.A strike at parts supplier Yoosung Enterprise has affected production, and it could get worse.
Yoosung manufactures piston rings, which are key components in car engines. Yoosung also supplies parts to the Korean units of General Motors and Renault. Hyundai has already suspended production of diesel engines at its Ulsan plant and has warned a shortage of parts could also force it to stop production of petrol or gasoline engines.Hyundai said the supply disruption could also hit its subsidiary car manufacturer Kia Motors. The disruption comes as South Korean carmakers are poised to take market share from their Japanese rivals, which are suffering from parts shortages of their own.
Thailand - Vehicle Output And Exports Soar
Source: BMI, 03 May 2011
Thailand's auto industry has continued to live up to BMI's estimates that it is the biggest vehicle hub in the ASEAN region, with production and exports achieving solid growth in Q111. Investment in new models, spurred on by the government's incentives for fuel efficient vehicles, is keeping output on course to meet forecast for total output of 1.89mn units in 2011. However, the potential for supply shortages, particularly for Japanese companies, will act as a downside risk to this outlook as the year goes on. Data from the Federation of Thai Industries (FTI) show a 13.8% year-on-year (y-o-y) increase, to 172,004 units, for the month of March. This is the highest level of monthly output for the year so far and comes as several carmakers have started production of new models and also increased exports on the back of growing overseas demand. Exports for the month were up 1.8%, to 85,626 units. For Q111, production was up 22%, to 468,981 units, as exports increased 8.2%, to 234,407 units.
This momentum has been sustained in 2011, with March sales up 47.5% to 93,008 units. This represented both the highest sales and highest growth of the year so far. This means sales growth for the quarter of 43.1% y-o-y to 238,619 units. The appreciation of the baht means that while exports in volume terms achieved solid growth of 8% y-o-y, the value of both vehicles and parts was only 6.5% higher y-o-y at THB150.37bn. Although BMI's Asia team expects the baht's appreciation to be steady over the year, it will be an issue for the industry to keep an eye on, particularly as Thailand has become an alternative production base for some Japanese carmakers that are looking to avoid the impact of a strong yen on exports.
China - Saab Gets a Financing Lifeline In Deal With Beijing Carmaker
Source: The New York Times, 03 May 2011
Saab Automobile, the struggling Swedish carmaker, received a lifeline on Tuesday when a Beijing company agreed to provide a loan to help restart production and open access to the booming Chinese market. The Chinese company, Hawtai Motor, will provide 150 million euros, or $222 million, in financing, including 120 million euros for a 29.9 percent equity stake in Spyker Cars, the Dutch company that bought Saab from General Motors last year. Hawtai will provide a 30-million-euro convertible loan with a six-month maturity. The deal includes joint ventures in manufacturing, technology and distribution in China.
The deal comes after increasingly desperate efforts by Saab to remain afloat as it drained its cash reserves and left suppliers in Sweden unpaid. Production has been halted since early April; Mr. Muller, the Spyker chief executive and chairman of Saab Automobile, said operations should restart early next week. Under the deal with Hawtai, Saab’s next-generation 9-3 will be made under license in China from 2013, while Saab will export to China from its plant in Trollhattan, Sweden. Saab is contractually barred from allowing its 9-4X and 9-5 models, which were developed with G.M., from being produced in China.
South Korea - Q1 auto exports to Eastern Europe up 93%
Source: Automotiveworld.com, 28 April 2011
The automotive industry in South Korea exported nearly double the number of vehicles exported to eastern Europe in Q1 of 2011, compared to what it had managed in the corresponding quarter in 2010. Citing industry reports, said non-EU nations on the continent imported around 72,000 South Korean vehicles during the quarter, translating into a year-on-year increase of 93%. Out of this, Russia alone accounted for 82%.
Kia Motors was the largest vehicle exporter to this region, accounting for 30,000 vehicles, or 42%. According to the report, Kia's Pride compact car accounted for half of the company's exports. General Motors Korea followed Kia by way of export volumes, managing 22,000 units, while Hyundai came third, exporting 11,000 vehicles to eastern Europe. Hyundai now produces cars for this region at its plant in St Petersburg, Russia.
Korea - Output of S. Korean automakers rises in March
Source: Asia Pulse Data Source, 06 April 2011
The output of five automakers in South Korea rose 3.6 percent in March from a year earlier on strong sales at home and abroad. The March figure marks the largest volume ever produced in the month of March.
Led by industry leader Hyundai Motor Co. and its affiliate Kia Motors Corp., the automakers produced 395,889 vehicles last month, compared with 382,173 units produced during the same period in 2010, according to the Korea Automobile Manufacturers Association (KAMA). Combined domestic sales of the automakers rose 8.4 percent on-year to 134,079 units last month, with exports soaring 9.8 percent to 259,108 units. The automakers here include GM Korea Co., the South Korean unit of General Motors Co.; Renault Samsung Motors Co., the local unit of French automaker Renault SA; and Ssangyong Motor Co., the country's smallest automaker recently sold to Indian utility vehicle maker Mahindra & Mahindra Ltd.
The figures do not include sales of vehicles produced at overseas plants. The automakers earlier said their combined sales in March rose 10.8 percent from a year earlier to 649,994 units with their overseas sales jumping 11.5 percent on-year to 515,721 units.
India - India’s March local car sales up by 24%
Source : Reuters, 08 April 2011
Car sales in India rose 24.4 percent in March, an industry body said, driven by a growing middle class in Asia's third-largest economy, easier access to loans and a wider choice of models
Indian automakers sold 194,199 cars in March, according to data from the Society of Indian Automobile Manufacturers (SIAM) released on Friday. India's car sales for the full year 2010/2011 rose almost 30 percent to 1,982,702, it said. Sales of trucks and buses, a key pointer to economic activity, rose 15.4 percent to 77,688 units in March, SIAM said.
China - China’s auto consumption to change post Japan’s quake
Source: Asia Pulse, 11 April 2011
China's auto consumption pattern is expected to change this year following the earthquake, tsunami, and the nuclear power station crisis in Japan. Analysts believe that European and Korean auto companies will grab a larger share of China's auto market, especially at the medium and high end.
The quake will definitely lead to a decline of auto imports from Japan. As a result, Japanese automakers will lose market share, giving US and European auto companies the chance to obtain greater market share. In 2010, China imported 253,000 autos from Japan, accounting for one-third of China's total auto imports. Although the China-Japan auto joint ventures have fully localized their manufacturing processes and nearly 90 per cent of parts are from local factories, they still rely on Japanese companies for key auto parts. In 2010, the value of China's auto parts imports totaled US$27.366 billion. Imported auto parts from Japan reached 10.9 billion US dollars, an increase of 29 per cent year on year. Many joint ventures said they have strong inventories of key auto parts. But, if the Japanese companies are unable to resume operation within two weeks, it will be difficult to meet the demand from China's auto market in three months.
Jakarta - Indonesia's car sales up by 40%
Source: Reuters, 28 February 2011
Indonesia's domestic car sales, an indicator of consumer demand in Asia's biggest economy, reached 73,761 units in January, a 40percent increase on the same period last year, automotive data showed on Tuesday. Sales volumes were led by Toyota, Daihatsu, Mitsubishi, Suzuki and Honda , according to the Indonesian Automotive Association (Gaikindo) data.
Domestic car sales rose 5.3 per cent month-on-month as sales volume in December 2010 was at 70,061 units. Astra International, Indonesia's largest automotive distributor, has said it will spend up to $1.4 billion on capital expenditure this year and expects car sales volume at 800,000 units.
Japan - Hybrid, electric vehicles set to grow
Source; Business Report, 07 March 2011
Eight out of 10 automotive executives believe hybrid and electric vehicle sales will have the biggest growth of any vehicle category over the next five years, according to the 12th KPMG annual global automotive executive survey. However, this growth was off a low base and total sales were still expected to lag well behind traditional internal combustion-powered cars over this period due to some challenges that had not yet been addressed, Ashleigh Raine-Botha, a senior research analyst at KPMG, said on Friday. These challenges include safety, reliability, comfort, image and cost.
The survey shows 37 per cent of executives believe industry investment over the next five years in alternative fuel technologies will be made in hybrid fuel systems, 31 per cent in battery electric cars and 21 per cent in hydrogen fuel-cell electric power. 43 per cent of automotive executives expected subsidies for electric vehicles to decrease despite many believing electric cars would not be affordable without subsidies. The survey results were based on the opinions of 200 automotive executives in 14 countries and all parts of the automotive value chain, including six South African firms.
China - Automakers expansion in China leads to bubble concerns
Source: The New York Times, 27 February 2011
The efforts by Volvo and companies like Daimler of Germany, which said last week that it would build a Mercedes engine plant in China and expand its dealer network there, are raising concerns that car companies may be investing too much in the country, creating an automotive bubble and setting themselves up for a sudden fall. As auto executives converge on Geneva for the annual auto show in the city, which opens to the news media Tuesday, there are warning signs that China could soon suffer from the same overcapacity that has long afflicted the United States and Europe.
Industry analysts agree that a slowdown in the growth rates for Chinese car sales is inevitable, if only because the increases have been so breath taking. BMW, for example, reported this month that its sales in China had grown 70 per cent in January from the same period a year earlier. Despite the warning signs, there is little indication that automakers plan to scale back their plans for China. Even as growth in China slows, other markets, like Brazil, Russia and India, promise to take up the slack, said Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen in Duisburg, Germany, who follows the automotive industry.
China - February auto sales up 4.57%
Source: AFP, 9 March 2011
Auto sales in China, the world's largest car market, rose by 4.57% in February 2011 from a year earlier. According to the China Association of Automobile Manufacturers (CAAM), a total of 1.27 million vehicles were sold in the country last month. That brought total sales in the first two months of the year to 3.16 million units, up 9.71% from a year earlier.
Passenger vehicle sales, which account for most of the country's auto sales - increased 2.57% year-on-year in February to 967,200 units. In the January-February period, 2.5 million passenger vehicles were sold in the country, up 10.5% from a year earlier. Growth in passenger car sales is expected to slow this year due to measures imposed by some major cities to restrict the number of vehicles on the road, plus the withdrawal of policies that encouraged car purchases.
India - Carmakers to increase prices
Source: The Hindu, 19 March 2011
The beginning of the next financial year (2011-12) will see top carmakers increasing their prices due to growing input cost which is affecting their bottomlines. While Tata Motors has already announced that it would hike prices of its passenger vehicles by up to Rs.36,000 from 1 April 2011, other leading carmakers — Maruti Suzuki and Hyundai Motor — are also considering a similar move to offset rising input cost.
In the utility vehicle segment, Sumo prices will go up by Rs.13,000-15,000, Grande by Rs.16,000-19,000, Safari by Rs.18,000-29,000, Aria by Rs.30,000-36,000 and Venture by Rs.9,000-12,000. Similarly, other players like Ford and General Motors are still to decide on this. In the luxury segment, Honda has already announced a 2-3% increase in the prices of its cars from next month. Other luxury carmakers like BMW, Mercedes-Benz, Audi, Toyota, Volkswagen and Skoda are still to decide on the price hike issue.
Japan - Earthquake dents Japan's chances in China's luxury car market
Source: Reuters, 15 March 2011
Japan's car makers, already reeling from the country's natural disaster, may find that their woes extend to an increasingly important market: China's luxury car segment. Toyota Motor, Honda Motor and Nissan Motor see China's wealthy consumers as a great opportunity for their top-end brands. Nissan, for one, doubled sales of its Infiniti cars to nearly 11,000 units in 2010 and aims to double sales again this year. Such goals could now prove impossible to meet.
Unlike other foreign car makers, the top Japanese manufacturers export their luxury cars to China rather than producing them locally. With Toyota, Honda and Nissan having shut all of plants in Japan after the earthquake and tsunami, exports to China will suffer. The Japanese are already way behind the German brands. The earthquake will hurt their luxury brands further as they don't make them here in China.
China - Goodyear plans to open 400more tire outlets in
ChinaSource: Asia Pulse, 31 March 2011
The United States-based Goodyear Tire and Rubber Co said on Tuesday that it plans to open 400 more stores in China this year. The new outlets are part of a strategy to further tap into the Chinese market, at a time when tire makers are under scrutiny after malpractices surfaced earlier this month. The opening of the new stores will raise the company's total number of stores to 1,200 in China.
Huan Yuan, managing director of Goodyear China has assured that the amount of recycled rubber used in the company's tires is well within standards and promised "world-class quality" for the products made by its factories in China.The expansion plan comes after Goodyear registered a strong year in China. Sales, profit and revenue all jumped to record highs in 2010. A $700 million plant is currently under construction in Pulandian, Liaoning province. The facility has been designed to produce as many as 5 million tires a year, raising Goodyear's total annual capacity in the country to 11.5 million tires. The new factory, which is expected to be operational by May, will serve the company's target of doubling sales in China by 2013, the company said.
World - Pigment Shortage Hits Auto Makers
Source: The Wall Street Journal, 26 March 2011
A shortage of a type of shiny pigment that is used in automobile paints and is only made in a single plant in Japan has emerged as the newest headache for the auto industry.The pigment, called Xirallic, is made at a plant owned by a German chemical company, Merck KGaA, and is located in Onahama, a coastal town that was damaged by the tsunami and was exposed to radiation spewing from the Fukashima nuclear reactor.
Many of the world's auto makers, including Ford Motor Co., Chrysler Group LLC, Volkswagen AG, BMW AG, Toyota Motor Corp. and General Motors Co., use Xirallic in metallic paints known for their glistening, shimmering appearance. Many are now scrambling to see if they can switch to different types of paints, according to auto makers and suppliers with knowledge of the matter. Ford and Chrysler both emphasized the paint shortage won't reduce the number of vehicles they produce, but rather will only limit what colour vehicles customers can choose.
The devastation in Japan forced most of the country's auto plants to cease production, although a few are supposed to slowly begin operating again next week. Auto dealers and industry analysts believe Toyota, Honda Motor Co. and Nissan Motor Co. have enough inventory to keep sales going for a few more weeks.
Asia - Ford plans expansion in Asia
Source: COMTEX News Network, 26 March 2011
Ford Motor Co. plans to introduce 8 new models in Southeast Asia over the next 5 years in order to boost its market share from the 3% presently in the region. The automaker has already announced production of Ford's Ranger pickup truck, which will be manufactured in Thailand and exported to 180 countries.At the same time, Ford plans to invest 7 billion yuan ($1.1 billion) in China in order to expand production capacity. The automaker will enhance the production capacity at its new plant in Chongqing, operated by Changan Ford Mazda Automobile Co, to 650,000 units by 2012. It will also increase power train and engine capacity to 750,000 units from 400,000 units in the country.
Ford has been pursuing a major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. Through the expansion plan, the automaker aims to tap the growing market potential in the countries, especially those in Asia. Since last year, Ford has invested $510 million in China and $500 million in India as part of its expansion plan. Last year, Ford has added 40 new dealerships in China as a part of its expansion plan. Further, the automaker plans to add 66 new dealerships by the end of the year, raising its total dealerships to 340 in the country.
India - Audi eyes top slot in Indian luxury car market by 2015
Source: The Press Trust of India Limited, 04 February 2011
German luxury car-maker Audi said it is eyeing to be the leader in the Indian luxury car market ahead of compatriots BMW and Mercedes Benz. The Volkswagen group firm, which is currently occupying the third place behind BMW and Mercedes Benz, said it is looking for over 50% sales growth this year as it gears up to launch new models in the country.
The company expects the Indian luxury car market to cross 50,000 units annually in the next five years from about 15,000 units in 2010. BMW had maintained its lead over rivals to remain the top luxury car-maker in India in 2010, with sales of 6,246 units. Mercedes had clocked sales of 5,819 cars between January and December, 2010, the highest-ever figure registered by the company in the country.
New Zealand - Vehicle sales rise in January
Source: Just-Auto, 04 February 2011, Graeme Roberts
New Zealand new vehicle sales started on a positive note with both new passenger cars and commercial vehicles ahead on January 2010, according to Perry Kerr, chief executive officer of the Motor Industry Association. New car registrations were up 10.8% on the same month last year to 6,210 units with commercials ahead by 19.1% to 1,313 - this figure being influenced by the very low sales volume last January.
Toyota was market leader for the month with 23.7% of total registrations, followed by Holden (11.0%) and Ford (10.5%). In the commercial vehicle segment Toyota was top, followed by Ford and Nissan. The top selling model for the month was the Toyota Corolla (907) which was assisted by strong rental vehicle registrations [it's summer there, peak tourist season]. Second was the Holden Commodore (380) and the Suzuki Swift third (265).
South Korea - Attracts world's top 3 electric cars
Source: Maeil Business Newspaper, 06 February 2011, Seung-hoon Lee
The top three electric cars in the global market - Volt, Leaf, and Focus EV - will appear in South Korea within 2011. These models will not be up for sale yet. Instead, they will act as testers to check electric car infrastructure in Korea and improve consumer awareness and recognition, According to the auto industry, GM Daewoo will be exhibiting Chevrolet's Volt - an electric car rolled out by GM in the US since last year - at the Seoul Motor Show in April.
Nissan's electric car Leaf will also make an appearance at the Seoul Motor Show. Unlike Volt, which is equipped with electric batteries as well as gasoline engines, Leaf relies wholly on electricity-powered batteries. Meanwhile, Ford is also considering a test run in Korea for Focus EV, an electric car model to be launched by the company in the second half of 2011.
Asia - Chinese all set to drive into India
Source: Business Standard, 14 February 2011, Sharmistha Mukherjee
With India slated to become the fourth largest automobile market in the world over the next five years, a host of Chinese automobile manufacturers such as Jianghuai Automobile Company (JAC), Brilliance Auto, Chery international, Build Your Dreams (BYD) and Beiqi Foton are all exploring opportunities to set up shop in the country. The Indian automobile market increased by 30% to register sales of 2.4 million vehicles in 2010.
Shanghai Automotive Industry Corporation (SAIC) has already made an entry into the market here and manufacturers such as Chery, Brilliance, JAC, BYD and Beiqi Foton are working out modalities to start operations. These companies have products which are a strategic fit for the Indian market. Some of them have already made enquiries regarding the vendor base available in India for starting operations there.
South Korea - Ranks 5th in global auto production
Source: Asia Pulse, 15 February 2011
South Korea retained its status as the world's fifth-largest auto making nation last year with over 4.2 million vehicles produced, a local industry body said. The country's five automakers produced some 4,272,000 cars in 2010, up 21.6% from a year earlier, according to the Korea Automobile Manufacturers Association (KAMA).
China, the world's largest market for automobiles, became the world's largest producer for the second consecutive year by churning out more than 18.26 million units, a 32.4% spike from 2009. Japan followed with some 9.62 million vehicles, and the United States was next with 7.73 million units that represented a 35% increase from the previous year. Germany was ranked fourth with just over 5.9 million units.
India - Car companies split over import duty
Source: The Times of India, 21 February 2011, Pankaj Doval
The proposed India-EU trade agreement has divided car makers with Pawan Goenka, the president of industry body Society of Indian Automobile Manufacturers (Siam), opposing any move to cut duty on imported cars while several members, including foreign luxury car makers such as Audi, Mercedes and BMW, batting for lower tariffs.
Siam has struck a protectionist note, opposing any move to remove car imports from the negative list, that will see a gradual lowering of duty from the current level of 60%, which finally bulges to around 110% after the addition of counter-vailing duty (CVD), VAT and other local levies. The industry lobby has made a strong pitch to the commerce department against the lowering of duty, saying it could see a flight of manufacturing investments from India and will negatively affect the domestic players and hurt employment.
Japan - Motorcycle makers boost line-ups for emerging economies
Source: Jiji Press English News Service, 07 January 2011
Japanese motorcycle makers such as Honda Motor Co. and Yamaha Motor Co. are upgrading their product line-ups for emerging economies, where rising incomes have created demand for more fashionable two-wheelers. In many developing countries, demand continues to grow for motorcycles, the primary mode of transportation, offsetting slumping demand in developed economies such as Japan and the United States.
Honda President Takanobu Ito says his company will launch a series of more upscale models in India, the world's second-largest motorcycle market, through its fully owned subsidiary, Honda Motorcycle & Scooter India Pvt Ltd. Meanwhile, Yamaha, Honda's rival, is building a new production line in Indonesia, the third-largest motorcycle market, anticipating demand for more fuel-efficient models.
South Korea - Carmakers post record output
Source: Daily The Pak Banker, 07 January 2011
South Korea's automobile industry greatly expanded in 2010 as output and sales by five automakers here reached record highs on brisk overseas sales, a trade association said. The five car makers, led by Hyundai Motor Co and its affiliate Kia Motors Corp, produced a record 4,271,741 vehicles last year, up 21.6% from a year earlier, according to the Korea Automobile Manufacturers Association (KAMA).
The number does not include vehicles produced at overseas plants. The previous record was set in 2007 when the automakers produced 4,086,308 vehicles, according to KAMA. Such a large increase was partly due to a growing domestic market, which purchased 1,465,430 new vehicles in 2010, up 5.1% from 2009. Exports of automobiles produced in South Korea increased 29% on-year to 2,771,482 vehicles in 2010.
China - Foreign automakers expands investments in auto market
Source: SinoCast Transportation Beat, 07 January 2011
Roland Berger Strategy Consultants, one of the world's leading strategy consultancies, said in a report that the exceptionally strong growth of the Chinese auto market has geared down and the business will go into a slow-growing period. The Chinese auto market growth drops to 15% in 2011 and the growth will further shrink to 8% in 2015, the report shows. However, the trend fails to impede foreign automakers to make investments in the Chinese auto market.
Foreign automakers who have not set up joint ventures in China are stepping up to launch business in the country. For instance, Japan's Fuji Heavy Industries Ltd. is in talks with China's private carmaker Chery Automobile on making Subarus hand in hand in China. Fuji Heavy Industries vice president Akira Mabuchi aired that the new venture with Chery would be able to produce at least 100,000 Subarus each year.
Thailand - Record auto sales in 2010
Source: Agence France-Presse, 18 January 2011
Thailand's domestic auto sales soared more than 45% in 2010, hitting a record high of 800,357 vehicles as demand grew on the back of solid economic growth, market leader Toyota said. The figure topped a previous all-time sales peak of 703,432 vehicles in 2005, according to the local subsidiary of the Japanese giant, which compiles the industry-wide data.
It predicted that the Thai market would grow by 7.4% in 2011, to 860,000 vehicles. Thailand's economy is believed to have enjoyed relatively robust economic growth in 2010 thanks to brisk exports and the relatively limited impact of violent political unrest in April and May. Thailand is a major exporter of rice and rubber, and any boost to the agricultural sector is often reflected in vehicle demand by the country's largely rural population.
Pakistan - Low tariffs for newcomers to hurt existing carmakers
Source: Plus News Pakistan, 20 January 2011
One of the three Japanese carmakers in Pakistan has demanded of the government to maintain level playing field while inviting new entrants in the industry, saying that the change in tariffs to facilitate newcomers would be a serious setback for existing players. Media reports were suggesting that the government was considering collecting mere 5% duties on import of cars and parts by the new car makers in first year of their arrival in the country and then gradually raise the rate of duties to match the rate the existing players were paying.
The existing carmakers pay 32.5% duty on the import of parts, which are not available in local markets or pay 50% otherwise. While, duties for the import of brand new cars vary from 50% to 150% depending on the capacity of engine from 800cc to above 1800cc cars. Some also worry that the new entrants might not make cars in the country and may instead import and sell cars by taking full advantage of tariff relaxation to them.
Malaysia - Auto sales hit record in 2010
Source: Intellasia, 20 January 2011
Sales of new vehicles in Malaysia hit a record high in 2010 but growth is tipped to slow this year in Southeast Asia's biggest passenger car market, an industry group said. The country saw motor vehicle sales grow 12.7% to 605,156 units last year thanks to a robust economy and consumer confidence, surpassing the 570,000 units forecast by the Malaysian Automotive Association (MAA).
The 2010 total industry volume had overtaken the previous record of 552,316 units achieved in 2005. Sales of passenger vehicles grew 11.8% to 543,594 units while commercial vehicles grew 21.8% to 61,562. Malaysian carmaker Perodua kept its top spot with a 31.2% market share, followed by another local carmaker Proton with 26% and Japanese firm Toyota with 15.1%.
Vietnam - Auto market contracts 9% in November
Source: Automotive World, 09 December 2010
New car sales in Vietnam declined year-on-year for the fifth consecutive month in November. In that month, the industry posted sales of 11,198 cars, down 9% compared with 12,259 cars sold in November 2009. Car sales were up, however, compared with the previous month of October, when sales stood at 10,421 units, Dow Jones Newswires said, citing figures released by the Vietnam Automobile Manufacturers' Association (VAMA).
The country imported 45,570 completely built-up (CBU) cars, with a total value of US$836 million, in the first 11 months of this year. This figure was down 34.3% year-on-year by way of volume, and 22.4% by value. Including automotive parts, the value of imports stood at US$2.556 billion in this 11-month period, down 4% compared with the January-November 2009 period.
China - Auto sales jump as incentives near end
Source: The Wall Street Journal Asia, 10 December 2010, Yajun Zhang and Norihiko Shirouzu
Auto sales for November rose to 1.697 million vehicles, the China Association of Automobile Manufacturers said, as consumers rushed to take advantage of purchase incentives before they expire at the end of the year. Total industry sales are on track to rise about 32% for the full year to 18 million vehicles, the semi-official association said.
China is important to global auto makers, having surpassed the U.S. last year as the world's biggest market by vehicle sales. Much of the growth in the past two years has come from government incentives for purchases of smaller, more fuel-efficient vehicles. Expectations that at least some of the incentives are to expire have helped passenger-vehicle sales.
India - Automotive industry growing from strength to strength
Source: The Times of India, 12 December 2010
Indian automotive industry is one of the largest and fastest growing industries in the world. It manufactures more than 11 million two and four-wheeled vehicles every year. Its annual exports are also around 1.5 million. With annual sales exceeding 8.5 million in 2009, the country became the world's second largest manufacturer.
It ranked seventh in the world in the year 2009 by producing more than 2.6 million units of cars and commercial vehicles. It is fourth in Asia in terms of exports of passenger cars. India was behind Japan, South Korea and Thailand. And with domestic demand shooting up, the Society of Indian Automobile Manufacturers claims that annual car sales are likely to increase up to 5 million vehicles by 2015.
Vietnam - CBU car imports on the rise
Source: Vietnam News Summary, 22 December 2010
Vietnam's Ministry of Finance lately announced that from 2011, complete-built-unit (CBU) cars’ import tariffs will stand at between 72-82% from current 77-83% depending on vehicle lines. The tax levels are expected to further go down as the 2018 deadline for Vietnam to exempt cars from paying import duties under common effective preferential tariffs within the ASEAN free trade area (CEPT/AFTA) scheme getting closer.
CBU car imports contracted in 2010 following the government’s strong measures to curb rising trade deficit through limiting the import of luxury goods, including cars. Consequently, just 46,940 CBU cars were imported in the first 11 months of 2010, half of 2009’s level, bringing in a total import value of US$856 million.
China - New Access admin rules for commercial auto makers
Source: Asia Pulse, 23 December 2010
China's new access administration rules for commercial vehicle manufacturing and products issued by the Ministry of Industry and Information Technology have sounded alarm bells for overcapacity in the industry. According to the new rules, effective from January 1, 2011, a commercial vehicle maker shall have an annual capacity not lower than 10,000 units for heavy-duty truck, not less than 100,000 units for medium- and light-duty truck, not less than 5,000 for large and midsize bus, and not less than 50,000 units for light bus.
The new rules nailed down more detailed stipulations for truck manufacturers and also set a higher requirement for bus makers, in comparison with the present auto industry development rules introduced by the National Development and Reform Commission in 2004. Industry observers say there are likely to be more related policies if automakers neglect the government's signal to rein in blind capacity expansion.
India - Record car sales mark 2010 for auto sector
Source: Asia Pulse, 23 December 2010
Record sales made 2010 a special year for automakers in India, which also saw the iconic Maruti 800 take a bow from big cities, Hero split with Honda and demand for the promising Nano sputter following a string of accidents. For a country whose economy has been expanding at near 9% rate, it was not surprising that automobile sales broke all records between July and October to average a growth of 30%.
There was also a flurry of new launches, with the likes of Renault and Ford joining the bandwagon to cash in on the sales boom. The Indian auto market is inching towards the two million units a year mark. Some of the new models that hit the roads during the year include Maruti Suzuki Eeco, Ford Figo, Volkswagen Polo and Vento and Nissan Micra.
South Korea - Automakers stumped by Euro 5 emission standards
Source: Chosun Ilbo, 24 October 2010
Korean carmakers are worried ahead of the implementation of stricter emissions standards in the European Union next year. The Euro 5 standards are the toughest environmental regulations in the world, and cars that fail to meet them cannot be sold in Europe. There are concerns that the standards could curtail the benefits Korean carmakers expect to gain in the European market from the Korea-EU free trade agreement, which goes into effect in July of 2011.
Industry analysts say there are currently only four Korean diesel cars that meet the Euro 5 criteria. Korean-made cars running on gasoline mostly do meet the regulations, but they do not help boost car exports to Europe, where diesel vehicles account for 40% to 50% of all vehicles. In France, the proportion is 70%. Korean carmakers' overseas plants produce only about one or two diesel models that meet Euro 5 standards, and they are not subject to tariff incentives under the FTA.
Vietnam - Automakers predict sluggish market
Source: Asia Pulse, 27 October 2010
The domestic automobile market is predicted by the Vietnam Automobile Manufacturers' Association (VAMA) to be sluggish for the remainder of 2010. General Director of website www.muabanoto.vn Nguyen Thanh Binh predicted automobile sales to decline by 20%. Automobile companies and dealerships are now aggressively offering several promotional programmes.
According to Binh, interest rates are the main reason behind the dismal sales. According to VAMA, 9,141 automobiles were purchased last month, a year-on-year decrease of 17%. Meanwhile, 4,000 automobiles were imported in September. During the first nine months of the year, 36,000 units were imported, a 25% decrease over the same period last year.
Japan - Automakers dominate U.S. reliability rankings
Source: Jiji Press English News Service, 27 October 2010
Seven Japanese brands were on the top 10 list in Consumer Reports' 2010 auto reliability survey released. Affected by massive vehicle recalls, however, Toyota Motor Corp. dropped to third place from sixth last year, the U.S. magazine said. Its luxury brand Lexus fell to ninth from sixth. Still, Toyota's Scion, its youth label, remained no. 1, followed by Germany's Porsche, up sharply from eighth.
Honda Motor Co.'s Acura luxury brand ranked third, up from fifth, while the Honda brand fell to fourth from second. In fifth place was Nissan Motor Co.'s Infiniti premium badge, down from fourth. The survey, conducted last spring, covered 1.3 million vehicles in 2001-2010 models owned by Consumer Reports subscribers.
Indonesia - Rising major car power
Source: Nikkei Weekly, 08 November 2010
Automobile production in Indonesia is expected to grow rapidly in the next several years, as the government is preparing tax incentives and manufacturers are raising output capacity. The envisioned tax break will cover low-cost and fuel-efficient vehicles. The government is expected to decide on the criteria by the year's end.
Sudirman MR, president of the Association of Indonesia Automotive Industries, predicted that automobile sales in the country will hit a record 700,000 or so units in 2010, and that production will total about 620,000 units. Given the country's economic growth and manufacturers' production plans, both domestic sales and output are likely to reach 1 million vehicles in 2015. Exports are expected to be 65,000 to 70,000 units for this year, but will likely increase to 100,000 units in 2015.
Thailand - Production of 1.7 million vehicles by year end
Source: Thai News Service, 12 November 2010
Thailand is maintaining its position as the "Detroit of Asia", beating all production records to produce about 1.7 million cars by year end and is now ranked as the 14th largest world auto producer, according to the Federation of Thai Industries (FTI)'s Automotive Industry Club. Of the 1.7 million automobiles, 750,000 are for domestic sale and the rest, or 950,000 vehicles, are for export.
For the first nine months, Thailand already produced about 1.2 million vehicles. Among them, 556,000 were for local sale and 664,000 for export. In 2011, it is forecast that Thailand's auto production will likely to increase by 10%, making it have about 800,000 automobiles to be sold in the kingdom and about one million for export.
Australia - Plea to rescue auto industry
Source: Herald-Sun, 12 November 2010
Thailand and South Korea have joined Japan as countries each selling more new vehicles in Australia than Australian-made cars, sparking a warning that a strategy is needed to save the Australian car manufacturing industry. Also, the climbing dominance of imported cars compared with Australian-made cars has provoked a slap on the face to the Federal Government for making a "big mistake" in a free-trade agreement with Thailand.
In the first 10 months this year, cars made in Japan have won 296,555 sales in Australia, from South Korea's 137,914 and Thailand's 135,618. Cars sold in Australia made in Australia by Toyota, Holden and Ford tallied 121,628. In that 10 months compared with the same period last year, Japanese cars grew 9% in sales, Thailand 17% and South Korea 36% while Australia's were up just 3%.
China - Government to announce plans for promotion of new-energy vehicles
Source: IHS Global Insight Daily Analysis, 24 November 2010
China's Ministry of Industry and Information Technology, along with other government departments, will announce plans to promote new-energy vehicles in China during its next five-year plan 2011–15. The ministry wants Chinese automakers to collaborate with global automakers on the development of new-energy vehicles.
Most of the major Chinese automakers have announced plans to develop electric vehicles, as have a number of joint ventures, although not all are behind the onerous conditions of the strategy. Nevertheless, the development of such technology is expected to rely heavily on the regulatory environment before mass acceptance. Such vehicles are not expected to take a significant share of total industry volumes until the second half of the next decade.
Japan - Seven automakers cut domestic output in October
Source: Jiji Press English News Service, 26 November 2010
Seven of Japan's eight major automakers cut their vehicle production in Japan in October following the termination of a government subsidy program for eco-friendly vehicles, according to data released by the companies. Toyota Motor Corp. said its domestic output dropped 22.4% to 237,089 units, marking a second straight month of decline. Nissan Motor Co. , Honda Motor Co. , Suzuki Motor Corp. , Mazda Motor Corp. , Daihatsu Motor Co. and Fuji Heavy Industries Ltd. also posted declines.
The automakers cut their domestic production as sales in Japan declined in line with the end to the subsidy program in September. Many automakers expect their output will continue to slump at least by the end of the year. Toyota's drop was the biggest on percentage terms as it was hit by a reversal of brisk sales of the Prius gasoline-electric hybrids induced by the government incentive program.
India - Chennai is emerging as the country’s largest automotive hub
Source: Business Standard, 26 November 2010
Chennai is emerging as the country’s largest automotive and auto components manufacturing hub in terms of investment. According to a state government official, over US$3 billion will be invested in Chennai by global car manufacturers by end of 2010-11. The proposed investment is significantly higher than other auto hubs like Gurgaon in Haryana.
Tamil Nadu Industry Secretary Rajeev Ranjan said the total installed capacity in and around Chennai would be 1.28 million cars a year by the end of the financial year. But, that figure is expected to go up significantly thanks to projects by Ford, Hyundai, BMW, Renault- Nissan and Mitsubishi-HM coming up in the area.
China - Carmakers seeking own brands
Source: SinoCast Transportation Beat, 13 October 2010
Automakers are pinning their hopes on China, the world's biggest car market. But there's a growing hurdle: China's own-brand cars. After running joint ventures with foreign partners for almost two decades, Chinese carmakers are striking for their own brands. Guangzhou Automobile Industry Group Co., Ltd. (GAIG) is pushing ahead with plans to develop its own car brands to capture mainland China's growing demand for passenger vehicles.
Although auto-sales growth in China remained fast at the start of 2010, the growth has moderated since the second quarter partly because of a reduction in government incentives and high base for comparison a year earlier. Of every ten vehicles sold in China, only four currently bear a Chinese logo. But the number will rise to five or six by 2015.
Taiwan - Economics ministry unveils electric car subsidy program
Source: Taipei Times, 14 October 2010
The Ministry of Economic Affairs launched a subsidy program in an effort to increase the number of electric cars on the roads in the next three years as part of a long-term plan to boost the electric car industry. Industrial Development Bureau Director-General Woody Duh said the government has set aside about NT$2.3 billion (US$74 million) in subsidies for 10 cases, with the aim of getting 3,000 electric cars on the roads by 2013 and increasing the number to 60,000 by 2016.
The bureau said the program which offers subsidies of up to 40% of the vehicle budgets for the cases whose applications for the subsidies are accepted would encourage local companies to use the electric vehicles. Taiwan’s dense population and short distances between cities make it suitable for developing intelligent electric vehicles.
Thailand - Eco-car industry benefits from incentives
Source: Bangkok Post, 16 October 2010
Rising energy costs and concern about the environment in Thailand has prompted the Industry Ministry and the Board of Investment (BoI) to introduce the eco-car concept to the public in November 2006. The BoI has offered various incentives - 17% excise tax, eight-year exemptions on corporate income tax and machinery import duties and up to 90% reduction of import duties on raw materials and parts - to attract investment in the eco-car programme. Current excise tax for standard passenger cars ranges from 30-50%.
Five carmakers - Nissan, Honda, Mitsubishi, Suzuki and Toyota - have made commitments to the eco-car programme and are expected to invest a combined Bt36 billion (US$1.2 billion) in their projects. Nissan has already rolled out its locally manufactured March eco-car for sale in Japan this year. Honda is expected to launch its eco-car next year, followed by Mitsubishi, Suzuki and Toyota in 2012.
Japan - Vehicle sales up before subsidies end
Source: Just-Auto, 01 September 2010
Sales of new passenger cars, trucks and buses in Japan soared 46.7% in August from a year earlier to 290,789 units for the 13th straight monthly increase, an industry group said. Sales apparently grew as customers rushed to buy eco-friendly vehicles before the government ends subsidies at the end of this month.
Sales of passenger cars, excluding mini-vehicles, increased 49% to 267,777 units, the Japan Automobile Dealers Association revealed. Truck sales grew 23.0% to 21,740 units and bus sales climbed 54.0% to 1,272 units. The Japan Mini Vehicles Association said separately mini-vehicle sales in August rose 21.7% year on year to 134,197 units, marking record sales for the month of August and the eighth straight month of growth.
India - Car sales continue to rise in August
Source: Accord Fintech, 02 September 2010
India's passenger car sales continued to drive in top gear, disregarding any impact of the partial rollback of fiscal stimulus or the high base effect from the last year. This is despite the fact that the original gross domestic product (GDP) estimates released showed a stagnant private demand and even the revised ones released reported a very slow growth in private consumption.
Riding on a number of new launches and a continued availability of finance at reasonable rates, the auto industry has posted a healthy growth in sales for the month of August. Going forward, the industry expects sales to continue showing strong growth with the festival season around the corner. Maruti Suzuki, the market leader, led the pack and sold close to 105,000 vehicles including exports, registering a growth of 24% year-on-year.
China - Vehicle market sees accelerated sales
Source: The Wall Street Journal, 02 September 2010
China's growth in car sales accelerated sharply in August thanks in part to new government incentives for small fuel-efficient cars, Xinhua news agency reported. Car-sales growth in the country has been slowing recently from its torrid pace in 2009, and analysts have widely expected it to continue slowing.
But overall automobile sales in August rose nearly 56% from the same month a year earlier to 1.21 million vehicles, according to data from the China Automotive Technology and Research Center (Catarc). August sales rose about 15% from July. The new incentives for fuel-efficient cars were announced by Beijing in the face of concerns about a significant slowdown in sales later this year.
China - Vice-premier encouraged development of auto parts industry
Source: Industry Updates, 28 September 2010
Chinese Vice-premier Zhang Dejiang has urged more efforts to develop China's auto parts industry and new energy vehicles, to increase the international competitiveness of the nation's auto sector. Auto-part producers should step up self-development of core technologies and form their own brands to advance the sector, Zhang said. Improving the design and manufacturing level of the auto parts industry is "crucial" to the nation's auto sector.
China overtook the United States to become the world's largest auto maker and auto market in 2009. Output and sales both expanded by more than 40% to reach 13.79 million and 13.64 million units, respectively, in 2009, due to the government's tax reduction on car purchases and other stimulus measures. In the first eight months of 2010, auto sales to dealers totalled 11.58 million units, up 39.02% year on year, while output rose 39.27% from a year ago to 11.49 million units.
Malaysia - Government to decide on new foreign carmakers
Source: Just-Auto, 05 October 2010
The Malaysian government will decide by the end of the year on proposals by five foreign vehicle manufacturers to launch assembly operations in the country, according to trade and industry minister Datuk Seri Mustapa Mohamed. The vehicle manufacturers are understood to be from China, India, South Korea, Japan and Europe. The Malaysian Investment Development Authority (Mida) is currently evaluating the applications.
The minister added the some of the applicants may make use of existing production capacity in the country. Malaysia has a production capacity of over 1 million units per year, yet output is around 500,000 units at present. Vehicle sales in the country are expected to reach a new record of 570,000 units this year, according to the Malaysian Automotive Association.
India - Auto sector may achieve export target ahead of schedule
Source: The Economic Times, 05 October 2010
Indian automobile industry may achieve its US$12 billion export target two years ahead of projections in 2013-14, industry body Ficci said. At present, the industry exports $4.5 billion worth of automobiles including tractors, passenger vehicles and commercial vehicles, besides big volume segment two-wheelers. As per the industry body, auto exports will go up to US$5.62 billion in the year ending March 2011 and grow to US$17.64 billion in 2015-16.
Auto export increased 49% to 972,000 vehicles in the first five months of the current fiscal beginning April 2010. India's share in global auto exports may also triple to 3% from the current 1% by 2016, the chamber said. At present, India exports large number of cars to Europe with major carmakers like Maruti Suzuki and Hyundai shipping vehicles to UK, Italy and Germany, their key markets in the continent.
Vietnam - Car sales in June edge up
Source: Reuters News, 07 July 2010
Automakers sold 10,052 vehicles in Vietnam in June, a rise of 4% from the same month last year, led by Japan's Toyota Motor Corp , an industry association said. Toyota surpassed domestic firm Truong Hai Auto Corporation, the top seller in May, to lead the tally with 2,905 units, up 35% from June 2009, the Vietnam Automobile Manufacturers' Association said in its monthly report.
For the first half of 2010, the car industry in Vietnam sold 50,278 cars, up 5% from a year before. The six-month sales data from 16 manufacturers operating in Vietnam included sport utility and multi-purpose vehicles and crossovers as well as passenger cars. Car sales have picked up slowly along with the economy, which expanded an estimated 6.4% in the second quarter from a year earlier, accelerating from growth of 5.83% in the first three months.
China - Green vehicles drive economic future
Source: Asia Pulse, 08 July 2010
The Chinese government announced hefty subsidies for green vehicles, which will play a crucial role in the development of a domestic green auto industry. It is a smart investment for China as the country is relying on its massive and ever-expanding auto market to be the catalyst for future GDP growth, while at the same time it aims to reduce carbon intensity, defined as CO2 emissions per unit of GDP.Currently, China is the largest and fastest-growing auto market in the world, which presents opportunities and challenges. It seeks to switch from export-led growth by encouraging domestic consumption, and in this process, supporting the domestic car market plays a vital role. However, automobiles account for 25% of carbon emissions worldwide. Hence, the growth of the auto market is counterproductive to Chinas efforts to reduce carbon intensity by 45% of 2005 levels by 2020.
Philippines - SUVs gain popularity
Source: Manila Bulletin, 12 July 2010
Despite their being pricey and sometimes flashy, the strong value proposition of most of the sports utility vehicles (SUVs) has made them more attractive to buyers as total SUV sales surged to 19,979 units in the first quarter 2010 almost doubling the 10,226 units sold in the same period last year. SUV sales now account for 24.3% of the 82,147 units total industry sales in the first quarter.
A closer look into the SUV figure would reveal the compact and mid-sized segment grew by 93% in the first half this with total sales of 18,667 versus 9,677 units last year. There are 8 to 9 auto players in this segment. Mitsubishi Motor's Montero Sport emerged as the best selling with 33% (6,177 units), which is up by 82% followed by Toyota Motor's combined Rav 4 and Fortuner with 20.7% .
China - Over RMB100 billion to be invested in energy-efficient cars in 10 years
Source: Dow Jones International News, 04 August 2010
China plans to invest more than RMB100 billion (US$14.76 billion) over the next 10 years to boost production of energy-efficient cars and become the world's biggest producer of such vehicles, according to a proposal by the Ministry of Industry and Information Technology. The ministry will finalize its plan and seek approval from the Chinese cabinet by the end of this month, the state-run paper said, citing unnamed sources.
China aims to produce and sell 15 million energy-efficient vehicles annually by 2020, according to the report. Under the plan, China will have three to five major manufacturers and two to three internationally competitive parts suppliers, including battery-makers. To fund the expansion of China's auto manufacturing industry, the government will also introduce tax cuts for buyers of such vehicles, it added.
India - Automotive industry at the crossroads
Source: M2 Presswire, 06 August 2010
Amidst the global economic downturn, where the world's largest automakers had filed for financial bankruptcy or faced tough times, India emerged as the rising star of the east. Its attractive automotive market grew by 12.9% in 2009. Though it too had been hit, on the export front primarily, due to the slowdown in the latter part of 2008 and early 2009, immediate and far reaching measures by the government helped the industry bounce back and reach record levels of growth in the subsequent quarters.
The passenger vehicle segment of the Indian automotive market with a 4.3% share in global production and fourth in terms of exports by the Organization of International Automotive Manufacturers (OICA) in 2009 was a uniquely attractive and growing market, especially the small car segment that drew manufacturers from world over, heating up competition and triggering price and launch wars.
Philippines - Vehicle sales surge 37% in July
Source: IHS Global Insight Daily Analysis, 10 August 2010
Philippine vehicle sales surged 37% year-on-year (y/y) to 15,972 units during July, according to data released by the Chamber of Automotive Manufacturers of the Philippines Incorporated (CAMPI) and the Truck Manufacturers' Association. Philippine vehicle sales in July were driven by positive market sentiment, new model launches, and overall strong macroeconomic indicators.
Meanwhile, Toyota remained the leading automaker in the country during January-July with sales of 31,745 units, up 29.3% y/y. It achieved a market share of 32.4% in the period. Mitsubishi and Hyundai took second and third spot, respectively, with sales of 18,504 units (up 42.8% y/y) and 11,836 units (up 104.4% y/y). Mitsubishi and Hyundai achieved market shares of 18.9% and 12.1%, respectively.
Philippines - Auto industry to revise growth target
Source: Manila Bulletin, 20 August 2010
The domestic automotive industry is poised to revise growth target for the second time this year to as much as 30% from 11% to end the year with all-time high sales figure of 173,000 units on back of robust sales. Originally, CAMPI set out with a 4% increase in sales for 2010, but as sales posted robust growth in the first semester it revised its target to 11% in June this year or 147,000 units by year end.
Domestic auto sales grew 37.2% in the first seven months this year to 98,119 units as against 71,506 units sold in the same period last year. While Lee has refused to quote a figure, industry leader Toyota Motor Philippines Corp., which accounts for a third of the industry's overall sales, said its projection points to a 31% increase in sales this year to 173,000 from 132,000 units last year.
Indonesia - Car sales expected to reach record high
Source: Asia Pulse, 20 August 2010
Car production in Indonesia during the current fasting month is dropping but automotive business people are upbeat that their car sales this year will set a new record. Johnny Darmawan, an Indonesian Motor Vehicle Industry Association (Gaikindo) executive, said that the production during the current fasting month and next September will decline because overtime hours are being reduced.
Yet, this would not hamper the growth of car sales this year. Darmawan said demand for cars in Indonesia is continuing to increase. He predicted that car sales in the country this year would set a new record, namely exceeding 700,000 units. He said that the highest sales figure so far was achieved in 2008 when car sales reached 600,000 units. But this year, automotive businesses are upbeat to hit a record of over 700 thousand units.
Thailand - Automobile exports set record
Source: Bangkok Post, 20 August 2010
Auto exports from Thailand reached a record high last month, with orders up from all regions, especially Asia, according to the Federation of Thai Industries' Automotive Industry Club. Thai-built vehicle exports increased by 140% year-on-year to 87,605 units. These were valued at Bt39.8 billion (US$1.26 billion), up by 129%.
Cumulative vehicle exports in the first seven months of the year rose by 116% year-on-year to 505,783 units worth Bt235 billion (US$7.46 billion), up by 87%. In addition, the Asean Trade in Goods Agreement, which took effect in May, has reduced transaction times and costs of doing business in the region. Thai-built vehicle exports to Asia jumped by 137% year-on-year to 27,558 units in July, making the region the largest export market for Thailand.
Thailand - Toyota maintained lead in vehicle sales
Source: IHS Global Insight Daily Analysis, 14 September 2010
Toyota maintained its leading position in the Thai market during August in both the passenger car (39.6% share) and CV (42.2% share) segments, with an overall market share of 41.1%. Isuzu remained the second-largest brand in the country with a market share of 17.6%, followed by fellow Japanese automaker Honda.
The Thai vehicle market has been witnessing strong growth over the last several months, largely thanks to government support measures and the stabilising global economic situation, despite the long-standing political turmoil. In addition, a favourable interest-rate regime, the introduction of new and revamped passenger car models, higher agricultural product prices, stabilising oil prices, and recovering industrial exports have helped boost sales, while a lower base of comparison has also contributed.
India - RBI's rate hike unlikely to dampen demand
Source: The Press Trust of India Limited, 16 September 2010
The Indian automobile industry, which has been on a record breaking sales spree this fiscal, said an imminent increase in interest rates by banks following RBI's decision to hike key short-term lending and borrowing rates, is unlikely to dampen demand. The Reserve Bank of India raised its key short-term lending rate by 25 basis points and borrowing rate by 50 basis points with immediate effect, which is expected to spike cost of funds for the banks and eventually makes loans expensive.
Society of Indian Automobile Manufacturers (SIAM) President Pawan Goenka said that they believe there is enough power in the economy and these rate hikes will not impact demand. Even in the short term, as the festive season is round the corner, they expect demand to continue. Domestic automobile sales have been on a record breaking spree this fiscal with the industry clocking 1,263,293 units in August, the highest ever achieved in a month.
China - New electric-car plan may threaten foreign automakers
Source: Agence France Presse, 17 September 2010
China is drawing up a new plan to become a leader in eco-friendly cars that could include forcing foreign automakers to share key technologies for access to its market, a report said. The draft suggests China could force the technology transfers by requiring overseas firms enter into joint ventures in which they would be limited to a minority stake.
China is already facing growing complaints from foreign companies, business groups and governments that overseas enterprises are encountering an increasingly skewed playing field in the country's huge market. The report said the 10-year plan being prepared by the Ministry of Industry and Information Technology would make China "the world's leader" in battery-powered cars and hybrids.
India - Carmakers seeking another price increase
Source: Wheels Unplugged, 21 June 2010
At a time when car companies were seeing a massive resurgence in sales, surging raw material costs are creating havoc. Most of the companies have indicated that they would be compelled to raise the prices of its models from next month. Notably, a number of car making companies source key raw materials, including steel, from abroad, and their prices have been affected by the weakening currency.
The prices of steel and rubber have gone sky high, especially during April-May 2010 when prices were up by 20-25%. This would be the fourth round of price hike as the carmakers have already hiked the prices two times after budget and once early this year. Earlier car makers have hiked prices owing to rise in input costs, then for the duty drawback and thereafter owing to switching to higher emission norms.
Thailand - Automotive industry performs in May 2010
Source: Thai News Service, 21 June 2010
Domestic net sale, production rate and exports of vehicles in May 2010 rise in number, according to the Federation of Thai Industries (FTI). The number of domestic automobiles sold in May at 62,205 units, up from April by 8.89% and 53.4% y-o-y. Sale increase derived from continuous economic recovery in the first half year, leading to higher confidence among consumers including the government's Strong Thailand Scheme to stimulate the sale.
Another reason for such a positive figure is the launch of several new models such as eco cars and small and medium-sized cars as well as the impact of the growth in several sectors like agricultural and export. Production number of automobiles in May was 132,165 units, up from May 2009 by 114.03% and higher than the rate in April 2010 by 25.74%. The production number in five months was 620,116 units or 97.26% increase compared to previous year.
China - SAIC plans to raise US$1.5 billion in placement
Source: scmp.com, 26 June 2010
The mainland's largest carmaker, SAIC Motor Corp, aims to raise as much as RMB10 billion (US$1.5 billion) through a private placement to fund the development of its own brand of vehicles, as Beijing urges state-run firms to strengthen their home-grown products. SAIC will use at least half of the funds to develop its own passenger cars. The rest will be used to make commercial vehicles and components.
Mainland carmakers are in a rush to build their own vehicles as they try to compete with global players. Since the 1980s, many mainland carmakers have set up 50-50 joint ventures with global manufacturers. The idea was for domestic carmakers to acquire vital technology and management skills from their foreign partners. SAIC, for example, is the joint-venture partner of General Motors China.
India - Auto industry may feel heat until early 2013
Source: The Economic Times, 28 December 2011
The auto industry may continue to face tough times till the first quarter of 2012-13 as firms are expected to hike car prices by up to 10 per cent, resulting in reduced demand, a study has said. "The hike in car prices would mainly be driven by high interest rates, rising raw material cost coupled with labour pangs," said the Assocham study.
The industry body suggested that automakers should revise their marketing strategies and launch diesel variants to tide over the tough times. "Automakers must revise marketing strategies, launch diesel variants, promote easy availability of finance options to woo the customers and keep a tab on tier II, III cities to spurt the car sales in the recent future," Rawat added.
Thailand - Growth seen for resilient car industry
Source: The Bangkok Post, 22 December 2011
The car industry is predicted to grow 16% in terms of vehicle production next year, despite the impact of flooding. Even with the severe disruption of supply chains and production during the fourth quarter, Thailand's auto industry is expected to fully recover by the second or third quarter next year and produce 1.8 million units in 2012, says Finansia Syrus Securities.
Production will begin to show solid signs of recovery by the first quarter, but full recovery will kick in from the second quarter on. Domestic sales would increase by 14-19% to 925,000-965,000 vehicles, the same volume as the 2011 pre-flood sales target.The government's first-time car owner tax rebate scheme is still in effect, new models have just launched, and flood-affected automakers were able to import cars built overseas duty-free.
Indonesia - Car Sales to Be Driven by Cheap Financing Next Year
Source: The Jakarta Globe, 28 December 2011
Indonesia’s automotive sector faced challenges this year as major supplier countries Japan and Thailand suffered natural disasters, but a combination of a strong economy and cheap financing helped to boost sales of cars and motorcycles.
Further spurring automotive demand, banks’ lending rates have fallen after the central bank’s recent rate cuts to all-time lows to protect the economy from a slowdown in Europe and the United States. Low interest rates have been fueling the rise in sales, Jongkie said, and the trend is expected to continue next year.
Japan - Automakers' global sales to hit 20 million for 1st time in 3 years
Source: Organisation of Asia-Pacific News Agencies, 23 May 2010
Global sales of Japan's seven major automakers are expected to amount to 20.21 million units in the year through next March, the first time for the number to clear 20 million in three years, according to their sales plans. All the car markers save industry leader Toyota Motor Corp. are bullish about their sales prospects on anticipated robust demand in China and other emerging economies as well as in North America.
Among them, Nissan Motor Co. expects global sales to reach an all-time peak of 3.80 million units, up 8.1% from the previous year. Honda Motor Co. also anticipates sales will total 3.62 million units, up 6.6%. Both Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd. expect double-digit growth for the year -- 1.12 million units, or an increase of 16.8%, for the former and a record 630,000 units, or a rise of 11.9%, for the latter.
China - Green car subsidy to be unveiled
Source: scmp.com, 25 May 2010
The measures to promote "green" cars, including subsidies of up to RMB60,000 (US$8,784) for individual purchases of pure electric vehicles, have already been signed off by industry regulators including the National Development and Reform Commission, the Ministry of Finance and the Ministry of Industry and Information Technology.
The subsidy scheme is awaiting final approval from "an even higher authority" - the State Council - and a public announcement is expected by the end of the month. Pollution is a huge and growing problem across the mainland's industrial metropolises and the promotion of electric and hybrid cars has become a major policy goal. A major move towards green cars on the mainland, the world's largest and fastest growing car market, would have significant implications for the future of the global auto industry.
Thailand - Automotive Industry Club plans production boost
Source: Thai News Service, 31 May 2010
The Automotive Industry Club (AIC) plans to increase the car production output by 30,000-50,000 this year after the car export from January to April grew 63% year-on-year. Spokesperson of the AIC of the Federation of Thai Industries (FTI) Surapong Paisitpattanapong said the group would augment the automobile production target by 30,000-50,000 to 1.43-1.45 million this year after the export expanded significantly during January-April.
The number of exported vehicles increased 63% from the same period of last year while the market shares of the Thai auto in ASEAN and Europe went up from 20% to 26% and from 6% to 8% respectively. Most companies will likely decide to continue accelerating their production if the Greek crisis remains under control and the global economy runs smoothly. The Thai auto industry is expected to thrive with a total annual production capacity of 1.6 million cars.
Japan - Automakers' production surges over recent months
Source: IHS Global Insight Daily Analysis, 27 April 2010
Japanese vehicle production has been recovering at a very fast pace over the last few months, thanks to a significant recovery in global vehicle demand and increased domestic consumption led by market support measures. In addition, rising demand from the major markets, including North America, Europe, and Asia, has boosted exports.
This production growth has also been partly thanks to the lower base effects provided by last year's data and the automakers' ability to launch new vehicles intermittently onto the markets. The Japanese automakers have certainly benefited from the industry support measures in place in Japan and have been upping their production levels over the last several months.
Australia - Influx of Chinese auto brands
Source: The Age, 01 May 2010
With more than a dozen Chinese auto makers considering an Australian export program, Australia's car buyers could have many new brands to choose from within two years. The influx of unknown Chinese brands is unprecedented in number but follows a trend forged by Japanese and Korean car makers to use the Australian market as a test bed for Western tastes, before tackling the giant US and European markets.
Most Chinese cars headed to Australia are likely to be small cars or four-wheel-drive-style wagons, but despite their size they have the potential to change the dynamic of the new-car market. Chinese car makers are predominantly producing regular petrol and diesel-engined vehicles, but many are investing hundreds of millions of dollars in electric and hybrid vehicles.
India - Auto sales continue strongly in April
Source: Organisation of Asia-Pacific News Agencies, 02 May 2010
Despite the recent round of price hikes, the Indian auto industry continued to cruise ahead in April with auto makers such as Maruti Suzuki, Hyundai and Tata Motors recording good sales growth. Almost all the manufacturers carried on the momentum of record sales achieved consecutively in February and March, with companies posting double-digit growth in April in spite of an increase in prices of vehicles due to the shift to Bharat Stage IV emission norms.
In April, the country's largest car maker Maruti Suzuki India reported a jump of 29.7% in total sales at 93,058 units over the same month last year. Maruti Suzuki had sold 71,748 units during the same month last year. Rival Hyundai Motor's total sales for April 2010 jumped 17.24% at 52,020 units against 44,370 units in the year-ago period.
Philippines - Vehicle sales surge 39.2% in June
Source: IHS Global Insight Daily Analysis, 22 July 2010
According to data released by the Chamber of Automotive Manufacturers of the Philippines Incorporated (CAMPI) and the Truck Manufacturers' Association, Philippine vehicle sales surged 39.2% year-on-year (y/y) to 15,189 units during June. Passenger car sales increased 43.5% y/y to 5,083 units in the month and are up 32.2% y/y at 28,222 units in the year to date (YTD).
Toyota remained the leading automaker in the country during the first half of the year with sales of 26,493 units, up 27.6% y/y. It achieved a market share of 32.3% in the period. Mitsubishi and Hyundai took second and third spot, respectively, with sales of 15,653 units (up 46.9% y/y) and 9,834 units (up 100.6% y/y). Mitsubishi and Hyundai achieved market shares of 19.1% and 12%, respectively.
Indonesia - Auto sales boosted by popularity of MPV
Source: The Jakarta Post, 24 July 2010
Indonesia's auto sales in the first half of 2010 grew by 76% on the same period last year to 370,208 units, the Indonesian Automotive Industry Association (Gaikindo) says. Johnny Darmawan, the president director of PT Toyota-Astra Motor said the association were optimistic that they can reach the target of selling 650,000-700,000 units by the end of 2010.
According to the association's data, this year's growth was mainly driven by the high sales of the Multi-Purpose Vehicle (MPV) model which accounted for 242,694 units, making up 65% of all models marketed in the country. In 2009 the MPV model was also a favoured choice, taking 69.3% of the market share, despite sales being down to 335,053 units from 388,790 in the previous year.
China - Slow demand bringing down auto prices
Source: International Business Times, 25 July 2010
China, the world’s biggest automobile market is set to witness a fall in prices over the rest of the year due to rising inventories and pressure among wholesalers to meet sales deadlines, according to the National Development and Reform Commission (NDRC). Inventory levels reached 55 days supply in June from 43 days at the beginning of the year, according to China Automotive Tech & Research Centre.
Due to rising consumer prices, passenger-car deliveries in June recorded the slowest growth in the past 15 months. Since February 2009, vehicle sales saw a continuous rise after slowing in April 2010. Auto prices have already fallen by 1.18% in the first half of 2010, according to the ministry. While dealers are already offering discounts, automakers are also set to join them.
Philippines - Auto sales increase 37.4% in 1Q 2010
Source: Manila Bulletin, 10 May 2010
Despite a slight decrease in April, overall domestic auto sales surge 37.4% in the first four months in 2010 boosted by continued consumer and business confidence, manageable inflation rate, sustained overseas remittances and an aggressive financing environment. These factors support the continued growth of the entrepreneurial trend that benefits the auto industry and the relatively peaceful election.
Data from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) showed that total sales in the January-April period reached 52,963 units or 37.4% higher than the 38,551 units sold in the same period in 2009. Strong growth thus far has been supported by the slew of new model introductions by auto players coupled with aggressive financing packages available making the purchase of vehicles more accessible and affordable for a larger group of consumers.
China - Chinese government encourages car makers to merge
Source: Car Advice, 14 May 2010
The Chinese government is set to reveal plans towards the end of this year to encourage mergers and acquisitions between China’s car makers. Through mergers and alliances stronger Chinese car companies will arise to increase the sector’s growth. Last year, the Chinese car market became the world’s largest, overtaking the United States for the first time in history.
Currently, only a handful of the 130 car makers in China have annual sales exceeding 10,000 units with China’s top 10 car makers making up 87% of all sales. European manufacturers have taken a strong presence in China to capitalise on the boom. The Chinese government wants to prohibit car makers from building new plants unless they acquire an existing manufacturer first.
Thailand - Vehicle sales on the up despite political crisis
Source: Automotive News, 17 May 2010
Political strife within the Thai government has not slowed down vehicle sales in the country. In April 2010, General Motors reported a 62% jump in sales to 1,879 vehicles compared to 1,162 units in the same month last year. With this rise in demand, GM is toying with the idea of increasing output at its Rayong factory to 76,000 vehicles per annum and to invest US$467 million to upgrade facilities and build a new diesel engine plant.
The gains are not just for GM, as even Toyota, who recently suspended production at one of its plants, increased deliveries by 43% to 92,000 units. Isuzu, another big pick-up truck player, has reported a 44% jump to 46,071 units sold. These figures are year-to-date, as of end April. According to the Automotive Industry Club, general vehicle output has increased by 129% from a year earlier to 150,119 vehicles.
Thailand - Promoting Thailand as a car production hub in Asia Pacific
Source: Thai News Service, 31 March 2010
The Thai Automotive Industry (TAI) has planned to promote Thailand as the major car production base of the Asia Pacific region. TAI President, Suparat Sirisuwannangkura, revealed the industry's annual strategy to combine the industry with the auto parts sector towards the goal of being the major production base of the Asia Pacific region.
It is believed that the cluster of industries would enable Thailand to compete with other automobile producing countries in the Free Trade era and able topple inferior quality cars produced in China and India. In addition, the establishment of a research and development institute was revealed in order to boost production rate at the outstanding level among all Asia Pacific countries, particularly the eco cars production.
South Korea - Car sales up 45% in March
Source: Dow Jones International News, 01 April 2010
South Korea's five car makers posted a combined 45% on year increase in vehicle sales in March, helped by an improving global economy combined with robust demand for new models. Collectively, they sold 584,970 vehicles, up from 403,189 units, according to data from the companies released. The sales figures indicate the local car industry's pace of recovery is picking up speed after the five companies reported a 30% on year increase in sales in February.
Hyundai Motor Co. and Kia Motors Corp., which together form the world's fifth-largest car maker by sales, were helped by increased demand for vehicles manufactured at their overseas plants. Domestic sales by the five car makers, that also include GM Daewoo Auto & Technology Co., Ssangyong Motor Co. and Renault Samsung Motors Corp., jumped 30% from a year earlier to 123,259 units in March from 94,867 units.
China - Pure electric cars key to launch of subsidy
Source: South China Morning Post, 02 April 2010
China government has delayed the long-awaited consumer subsidies for alternative-fuel vehicles because of disagreement within the car industry over whether to favour hybrid cars or pure electric vehicles. A Ministry of Industry and Information Technology meeting in March, which included more than 10 car executives, ended without an agreement on subsidies.
China originally planned to begin the subsidies in the first quarter. But car executives and the government could not come up with a compromise. The plan was to give individual consumers a huge subsidy, as much as RMB60,000 (US$8,789.15) for a pure electric, plug-in car, while hybrids would get RMB3,000 (US$439) per unit.
Australia - New vehicle sales see strong recovery
Source: The Newcastle Herald, 06 March 2010
Australia's new vehicle market continued to show strong signs of recovery last month with more than 82,000 sales putting it a massive 17.1% ahead of February last year. In a remarkable turnaround shown in the 12,000-strong sales improvement, February ended on par with February 2008 and set the forecasters rushing to predict 2010's numbers.
With all major segments (passenger, SUV, light trucks and heavy trucks) all well ahead of the February 2009 numbers, fears that 2010 would carry some of the baggage left over from last year's global financial crisis seem to be abating. The Federal Chamber of Automotive Industries said the boost in national sales was driven by private buyers coming back into the market in greater numbers, bringing about a 9.3% increase in private sales compared to February 2009.
India - Auto sales in February jumped by 35%
Source: Mail Today, 09 March 2010
India’s auto sales in February increased by 35% to hit an all- time high of 1.13 million units as buyers rushed to beat the price rise anticipated in the Union budget. According to figures released by the Society of Indian Automobile Manufacturers (SIAM), total vehicle sales in the domestic market stood at 1,129,783 units, up from 837,017 units in the same month last year.
The domestic passenger car segment clocked its highest ever sales at 153,845 units, which was 33.2% higher than the 115,505 units sold in the year- ago period. This also showed that the growth trend in car sales had endured for the 11th month in a row. During the month, leading manufacturers, including Maruti Suzuki, Hyundai Motor, General Motors, Honda and Ford reported their best sales ever.
Vietnam - February new vehicle sales fall 34% from 2009
Source: Dow Jones International News, 09 March 2010
Figures released by the Vietnam Automobile Manufacturers Association show new vehicle sales in Vietnam fell 34% from a year earlier in February 2010. Sales of new cars, trucks and buses (both imports and locally produced vehicles) totaled 4,394 units, compared with 6,674 units a year earlier. Sales were down 37% from January 2010.
Analysts opined that car sales fell from the previous month after the Vietnamese government raised the value-added tax and registered fees in January. The impact was felt in February as typically, it takes a few weeks for Vietnamese to buy and collect their cars. According to government data, Vietnam imported 6,417 fully assembled vehicles valued at US$102 million in the first two months of this year, up 80.5% in volume terms and up 52.3% in value on year.
Japan - Domestic sales to be affected as subsidies end
Source: Asia Pulse, 19 March 2010
The expiration of Japan government subsidies for the purchase of new vehicles in September is expected to cause domestic sales of new automobiles to fall to a 33-year low next fiscal year. The Japan Automobile Manufacturers Association said that domestic demand for new vehicles is projected to shrink 4.9% to 4.64 million units in fiscal 2010.
The association forecasts that demand for passenger cars, which make up more than 80% of the total, will fall by 5.5% to 3.95 million units. Automobile sales companies are growing concerned about worsening business conditions. In particular, urban dealerships are worried because much of their recent business has been with existing car owners replacing their vehicles through the use of the subsidies.
China - Foreign tire companies expanding rapidly
Source: Xinhua Business Weekly, 22 March 2010
Foreign tire companies have been expanding rapidly in China during recent years, and joint venture tire companies have come to dominate the Chinese market. Foreign companies merged about 50% of key domestic tire companies, and took over an 80% share of China's radial tire market. Along with rapid expansion, foreign tire companies are extending their interests to the automotive after market, rather than just providing tires to complete vehicle producers.
With strong domestic demands, China's homegrown tire companies managed to survive through 2009, when exports were forced down by a US tariff against tires imported from China. However, they are facing even bigger challenges from international tire giants this year. According to data from the National Bureau of Statistics of China, the country's tire market has achieved continuous growth since 2005.
Vietnam - Car imports continue to plunge
Source: Sai Gon Giai Phong, 22 March 2010
The number of cars imported into Vietnam in February was 2,500, a decline of 26.3% over the previous month this year, according to the General Statistics Office. Vehicles with less than nine seats accounted for 1,600 of the imports, a reduction of 400 of the cars over January. The country imported a total of 5,900 cars in the first two months of 2010, tumbling by over a half compared to the same period last year.
The drop in imports is due in part to the removal of a preferential policy on vehicle registration fees; the raising of import taxes by 2-20%; and new Government policies that limit loans for importing cars. The General Statistics Office also said that Vietnam’s total import-export turnover in the first two months of 2010 reached nearly US$19.9 billion, 20.2% higher than last year during the same period.
Korea - Electric car tax breaks in the pipeline
Source: BMI, 19 February 2010
The South Korean government is mulling over new tax breaks for electric cars, similar to those already in place for hybrid car purchases. As it aims to make 'green' industries a feature of the economy in the future, the Ministry of Strategy and Finance is considering reductions in consumption, acquisition and registration tax. Industry figures estimate that the cuts could take as much as W3 million (US$2,600) off the cost of an electric vehicle (EV).
The Ministry of Knowledge Economy already announced in June 2009 that it would offer tax breaks on purchases of hybrid cars. While the government's plans are aimed at improving the country's environmental standards, it is believed they will have the added bonus of supporting the domestic auto industry. Adopting more stringent fuel efficiency and emission standards will give the brands an advantage when exporting, particularly when the US introduces its own stricter nationwide standards.
Japan - Electric vehicles to aid the expansion of auto market
Source: Jiji Press English News Service, 21 February 2010
Keio University Prof. Hiroshi Shimizu, a top electric vehicle researcher in Japan, said that Electric vehicles will help expand Japan's auto industry, without taking tolls on makers of conventional vehicles. Japanese electric vehicles "should attract an increasing number owners in Japan and emerging economies in years to come because they are easier to drive and cheaper to maintain and cause fewer troubles" than gasoline and diesel peers.
Citing that digital cameras have helped double the size of the camera market in Japan, Shimizu said if electric vehicles proliferate, the auto industry will grow further and offer more business opportunities for newcomers. He also said production costs for an electric vehicle will drop to a level equal to or lower than those for a gasoline rival if 100,000 units or more are produced.
China - Chongqing expects auto industry boom in 2010
Source: Asia Pulse, 22 February 2010
According to information from the Chongqing Municipal Commission of Economy and Information Technology, the auto industry in southwestern China's Chongqing city is expected to boom in 2010 with the catalytic support of government incentives. In 2010, Chongqing's auto sales are predicted to surge 18% year on year to two million vehicles, and motorcycle sales should rise 5% to ten million units.
The gross industrial output value is expected to reach RMB300 billion (US$43.9 billion), up 16% from RMB258 billion (US$37.8 billion) in the previous year. In 2009, the city's auto output and sales reached 1.7 million and 1.68 million vehicles, up 61.5% and 58.2% year on year, respectively. The industry's profit soared 72.7% to RMB10.1 billion (US$1.5 billion).
India - Indian car exports soar 33%
Source: Daily The Pak Banker, 10 April 2010
At a time when many major global auto markets witnessed declines, Indian carmakers were able to expand their overseas presence with exports from the country registering a robust 33.23% growth in the last fiscal. According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), passenger car exports from India touched 441,710 units in FY'10 against 331,535 units in the previous financial year.
SIAM President Pawan Goenka said that the increase in exports was driven by demand for small cars in the European nations, which offered incentives to customers for buying new cars in exchange of their old ones under a scrappage incentive programme. Overall vehicle exports from India grew by 17.90% at 1,804,619 units in the last financial year, while the same stood at 1,530,594 units in 2008-09, SIAM said.
China - Domestic M&A for auto makers
Source: Dow Jones Chinese Financial Wire, 16 April 2010
Despite major steps for Chinese auto makers in overseas expansion during the past year, companies are now expected to be more cautious in overseas acquisitions while accelerating their pace in domestic mergers. Based on a survey of 50 executives from China's auto manufacturers and suppliers, it is forecasted that China's auto sales will continue to grow by 20% in the next five years.
In order to achieve sustainable growth, Chinese auto companies will focus on technology upgrades, after-sale services and internal management in the domestic market. China's automobile industry has remained the most dispersed in the world. The top five manufacturers in China comprise only 50% of market share, compared to 87% in Japan and 65% in the United States.
Australia - Sales of bikes show weakness
Source: Herald-Sun, 16 April 2010
Australia's Federal Chamber of Automotive Industries' sales figures show 23,211 motorcycles, scooters and all-terrain vehicles were sold in the first quarter of 2010. That is down 3215 bikes on the same period in 2009. And it has affected all sectors, from scooters to sportsbikes, though off-road bikes were hardest hit with a 14% slump.
Part of that reason appears to be the lack of new product. In addition, there is an after-effect of the global financial crisis, when the Japanese makers slashed R&D spending. All of the major new bikes in the past 12 months, from Harley-Davidson's Iron 883 to the Honda Fury and BMW S1000 RR, have sold solidly. Yamaha is the leading bikemaker on 4604 sales, nearly a 600-bike edge on Honda, with Suzuki almost 1000 sales further back.
Taiwan - MOEA to invest in safe lithium-ion battery development
Source: Asia Pulse, 25 January 2010
Taiwan's Ministry of Economic Affairs (MOEA) announced that it would invest more in safe lithium battery technology in 2010, to make inroads into the global lithium-ion (Li-ion) battery market. MOEA's Department of Industrial Technology (DOIT) has invested a total of NT$120 million (US$3.75 million) annually over the years, to develop safe Li-ion battery, and it will allocate NT$160 million (US$5 million) in 2010.
According to the DOIT, global sales of electric cars will grow by 7.29 million in 2018, and 85.9% of them (or 6.26 million cars) will use li-ion batteries for power. MOEA’s increase in Li-ion battery development investment aims to turn Taiwan into a testing ground for electric cars developed globally, and to tap into a China project called "1,000 electric cars in 10 cities."
Asia - Japan automakers made more cars in China than in U.S. in 2009
Source: Nikkei Report, 26 January 2010
Japanese automakers became increasingly dependent on the Chinese market in 2009, with their combined output surpassing that in the U.S. for the first time. Among the eight Japanese passenger carmakers, six of them manufacture vehicles in China. Their aggregate Chinese output came to roughly 2.25 million units in 2009, exceeding the 2.1 million produced in the U.S.
In 2009, China replaced the U.S. as the world’s biggest auto market with sales soaring to 13.64 million vehicles. As the growth rate is forecast to continue with a double digit pace in 2010, Nissan and Honda are working to beef up their passenger car factories in China. While Toyota plans to revive a suspended factory construction project there, Mazda has dissolved its Chinese joint venture with Ford Motor Co., with an aim to set up its own production system.
Asean - Malaysia steps up investment incentives for hybrid car production
Source: Thai News Service, 26 January 2010
Malaysia is going to increase its investment incentives for hybrid vehicle production. This could draw investment from Thailand and threaten its plan to be Asean's hybrid manufacturing hub. At the same time, Malaysia and Indonesia are likely to work together to strengthen their share of the region's automobile production.
While neighbouring countries are moving fast to attract manufacturers of hybrid cars, the Thai government remains reluctant to cut import duties on components for environmentally friendly hybrid cars as proposed by Toyota Motor Thailand, the country's largest automaker. This may be because Thailand is currently far ahead of its two regional rivals in production capacity, rolling out more than 1 million vehicles annually. Malaysia and Indonesia each manufacture about 500,000 vehicles per year.
Indonesia - Car and component markers to invest US$472 million
Source: Asia Pulse, 29 December 2009
Encouraged by the improvement in the purchasing power of Indonesian, some Indonesian car makers plan to invest US$472 million until 2012, to produce new models and expand distribution networks. Toyota plans to invest US$180 million for expansion of distribution networks, Volkswagen to invest US$143 million to build assembling plant. Other car companies have plans for investment including producers of Hino and Daihatsu and Isuzu cars and Chinese car maker Geely.
According to the transport equipment director general Budi Darmadi, car makers are optimistic that car domestic sales will reach at least 550,000 units in 2010 from 2009’s estimate of 480,000 units.
China - Government continues to spur auto sales in 2010
Source: Asia Pulse, 29 December 2009
In order to encourage consumption, China’s Ministry of Commerce will continue and optimize the stimulus measure of automobile consumption in 2010.The Chinese government has decided to extend the incentives for automobile sales for rural people to the end of 2010 and the incentives for motor bicycles sales for rural people will be active until January 31, 2013.
China raised auto purchase tax to 7.5% from the current 5% for vehicles with 1.6-liter engines or less from 1 January 2010, but still lower than the 10% rate before the stimulus policy. The incentives for motor bicycles sales for rural people will be active until January 31, 2013. Meanwhile, the ministry will improve incentive policies for auto replacement and lift subsidies for each vehicle up to RMB5,000-18,000 (US$732-2,636). Other measures for smooth administration of new car distribution and value-added tax for the transactions of secondhand vehicles are under consideration.
Thailand - Eco-cars set to shake up domestic market
Source: The Nation (Thailand), 29 December 2009
The Thai automotive industry is preparing for a major shake-up, with eco-cars being highlighted as the new engine to boost the industry. The current market focus in on small cars, this could lead to a change in the market ratio between pickups and passenger cars, to reach a balance of 50:50 in next two years. The eco-car is set to draw low-end pickup buyers, who usually pay about Bt380,000 (US$11,401) for a vehicle and can now turn to a new sedan.
Besides the pickup market, the eco-car will also affect the second-hand car market. People who currently cannot afford a new vehicle have to turn to the used-car market. Prices for used B-segment (subcompact) cars are likely to drop after the launch of the first eco-car. Under the Board of Investment rules, each carmaker has to meet the 100,000-unit annual output target within five years. With the overall auto output estimated to hit 1.2 million units in 2010, the eco-car will further boost Thailand's position as the "Detroit of Asia".
China - Auto and chassis exports slump in 2009
Source: Asia Pulse, 09 February 2010
According to an annual report released by the Automobile Branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, China's auto and chassis exports suffered a big slump in 2009. The 2009 exports slumped 44.7% from a year earlier to 370,700 units, valued at US$5.19 billion, down 42.6%.
Similarly, the export prices of most vehicle models suffered a decline, except that car price rose 5% year on year. China is now the biggest auto producer and market in the world. In 2009, the country's auto sales increased 46.15% from the previous year to 13.64 million units, while output surged 48.3% to 13.79 million units, according to data released by the China Association of Automobile Manufacturers.
Vietnam - Auto sales down from December despite strong performance
Source: Vietnam News Agency Bulletin, 09 February 2010
In its monthly report, the Vietnam Automobile announced that January auto sales surged 76% over the same period last year to 6,961 units. Sales of commercial vehicle reported the highest surge of 150% with 3,340 units sold. Passenger cars followed with 2,170 units, up 79% and MPV/SUV vehicles reached 1,440 units, a 3% increase. However, compared to December when car sales reached 16,065 vehicles, January's sales were down 53.8%.
Industry experts attributed this year’s sharp drop in sales to the Government’s decision to end incentive tax policies for the auto industry. Previously, car buyers benefited from a 50% reduction in value-added tax and car registration fees. The Government decision resulted in a roughly 10-12% increase in car purchase costs.
Philippines - January vehicle sales up 34% from last year
Source: Dow Jones International News, 09 February 2010
Driven mainly by robust sales of trucks and utility vehicles amid a stronger business environment, vehicle sales in the Philippines surged 34% on year in January according to an industry report.
Total vehicles sold in January reached 11,763 units compared with 8,791 vehicles in the same month in 2009. Sales of cars rose 14% on year to 3,856 units while commercial vehicle sales rose 46% to 7,907 units. As expected, however, sales volume was down nearly 14% from the 13,596 vehicles sold in December, usually the strongest month for car sales.
China - Auto sales, output go over 12 million
Source: AFP, 06 December 2009
China's auto output and sales exceeded a record 12 million units each in the first 11 months of 2009, cementing the Asian giant's status as the world's largest car market. Output topped 12.3 million units in the first 11 months of 2009, up 41.6% while sales stood at 12.2 million, up 42.4%. The China Association of Automobile Manufacturers forecast sales and output for 2009 would both exceed 13 million units.
China's total car sales outstripped those of the United States for the first time in January 2009 to make the Asian giant the world's biggest auto market, helped by Beijing's efforts to stimulate domestic consumption. These measures included slashing taxes on cars with engines smaller than 1.6 litres and subsidising alternative-energy vehicles.
Philippines - Auto sales rise 3.7% in first 11 months
Source: Manila Bulletin, 08 December 2009
Auto sales in the first 11 months of 2009 posted a 3.7% increase as overall sales reached 118,848 units versus the 114,564 units sold in the January-November period of 2008. The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) said they are now closing in on its 2.3% revised growth forecast this year from a flat growth rate. The industry is targeting a total of 125,000 units this year.
Of the total 118,848 units sold in January-November 2009, total passenger car reached 41,737 units, a modest 1% growth versus 41,334 units in the same period last year. Sales from commercial vehicles managed to improve by 5.3% to 77,111 units from 83,230 units in the January-November period last year.
India - China makes 2nd attempt to drive into Indian auto market
Source: The Economic Times, 09 December 2009
Shanghai Automotive Industry Corporation (SAIC) has teamed up with General Motors in a 50:50 joint venture to sell cars in India, two decades after China first attempted to penetrate the Indian market. SAIC will be the first Chinese car company to enter India officially even as its other counterparts like Chery Automobile and Dongfeng Motor Corporation are vying to grab a piece of the Indian market and are yet to formalise anything concrete.
SAIC operates eight joint-ventures in China and covers four GM brands — Cadillac, Buick, Chevrolet and Saab — and would initially bring two or three compact cars to India. It independently owns Chinese auto maker Nanjing Automobile company and Korea’s fourth largest auto maker, SsangYong Motor Company.
China - PRC to extend auto tax incentive into 2010
Source: Xinhua's China Economic Information Service, 30 November 2009
At the beginning of 2009, China introduced to lower the purchase tax on cars with engine capacities under 1.6 liters from 10% to 5% at the beginning of 2009, effective till 31 December 2009. As the current incentive is going to expire soon, the market has been concerned about whether China will extend it into 2010.
According to Xinhua-run Shanghai Securities News, the Ministry of Finance and the National Development and Reform Commission (NDRC) have decided to continue with the tax incentive into 2010, and have two alternative plans in hand. Plan A is to provide tax breaks based on engine displacement, while Plan B is to base preferential taxation on fuel consumption. Both plans will include more models in the program.
Japan - Domestic vehicle output dives 19% in Oct 2009, down for 13th month
Source: Kyodo News, 30 November 2009
According to the statistics released by the Japan Automobile Manufacturers Association, the domestic vehicle production dropped 19.2% in October 2009 from a year earlier to 820,910 units, marking the 13th straight monthly decline, and the biggest rate of decline on monthly basis since 1966.
Passenger car production slumped 17.3% to 714,365 units, with output of vehicles with engines of over 2,000 cc falling 21.8% to 386,549 units. Production of cars with engines ranging over 660 cc to 2,000 cc fell 9.2% to 221,079 units, while that of mini-vehicles with engines of up to 660 cc dropped 15.1% to 106,737 units. But the pace of decline slowed for the sixth consecutive month thanks to measures to promote sales implemented in various countries.
Indonesia - Car market not as high as October 2009; MPV & city car segment under pressures
Source: Bisnis Indonesia, 30 November 2009
The domestic car market in Indonesia is estimated at 50,000 units maximum in November 2009, down 4.3% from the year high 52,241 units in October 2009, estimated Marketing Director of PT Toyota Astra Motor (TAM) Joko Trisanyoto. He added that car sales in the national market were lower than October 2009 due to fewer working days.
However, Executive Director of PT GM Autoworld Indonesia Mukiat Sutikno viewed the market in November 2009 was quite good, thanks to the realization of standing orders before Idul Fitri. He said the national car market in November 2009 will be more or less the same as that in October 2009. The company sales were still on the tract to meet the target of 2,600 units until November 2009, or the same as that of 2008.
South Korea - SK car production drops by 8% in 2009
Source: Organisation of Asia-Pacific News Agencies, 08 January 2010
According to a Korean Association of Car Manufacturers report, car production in South Korea dropped 8.2% from 3.51 million cars in 2009 from 3.82 million cars in 2008, against the background of the global economic and financial crisis.
The association sees the above decline was mainly contributed by the reduction of car exports from the country. In 2009, car export dropped by 20.1% to 2.12 million cars in South Korea. Meanwhile, domestic car sales rocketed by 20.7% to 1.39 million cars in the same year.
Thailand - Three ministries to consider eco car tax system
Source: Thai News Service, 08 January 2010
Three Thai ministries, Energy Industry and Finance Ministries, are joining hands to consider tax structure for energy-saving cars. They are likely to wrap up a conclusion by the end of January 2010.
The Energy Minister Wannarat Channukul revealed that the three ministries are in talk to devise a tax system for all types of energy-saving cars or eco cars including those vehicles that consume gasohol, E85 fuel, natural gas for vehicles or NGV, and hybrid sedans. The tax structure under consideration will cover all aspects of these cars' production, such as taxes for importing sedan parts and fully-assembled cars as well as the excise tax.
China - Government to subsidize individuals for buying green energy cars
Source: SinoCast Transportation Beat, 11 January 2010
The Chinese government will release the standard for subsidies on the purchase of renewable energy cars by individuals within January 2010. The regulators will provide high subsidies on green energy vehicles in early stage, and the subsidies will decrease with the industrialization of such cars.
The Chinese government will also provide support for the R&D of fuel cell cars, hybrid vehicles and electric cars with more inputs each year. So far, 47 types of green energy vehicles made by 42 carmakers have been included in the list announced by the Ministry of Industry and Information Technology (MIIT), including sedans, coaches, sanitation vehicles, and snowploughs.
China - Passenger car sales surge 76% in October 2009
Source: Business Times, 11 November 2009
Chinese government cut vehicle taxes and offered subsidies in rural areas in early 2009 after vehicle demand plunged amid the economic slowdown. Thanks to the government stimulus measures and the economic growth, the domestic car demand was spurred, and passenger cars sales rose 76% in October 2009. Sales of cars, sport-utility vehicles and multipurpose vehicles climbed to 946,400 units in October 2009. The accumulative sales in the first ten months rose to 8.19 million, up 45.2% year on year.
Industry-wise vehicle sales raised 1.23 million in October 2009, up 72% from a year earlier, pushing the total vehicle sales for the first 10 months to 10.9 million, an increase of 78%. GM and Toyota General Motors Co, the biggest foreign carmaker in China, announced that their sales more than doubled sales to 166,911 vehicles in October 2009. Caijing Magazine predicted that most of the stimulus measures aimed at boosting auto sales in China, expiring at the end of 2009, may have a high potential to be ended.
Singapore - Hybrid buses ready for trials
Source: Straits Times, 14 November 2009
Just one week after a taxi operator rolled out first hybrid taxis in Singapore, two green buses are set to run trials on roads. The disabled-friendly diesel-electric buses consume 30% less fuel. The hybrid buses are assembled in China and are introduced by a Singapore Engineering company, ST Kinetics, which teamed up with two other companies, King Long and ALP Energy. The one drawback of the buses is its cost, which is at S$500,000 (US$360,959) a piece, 25%-30% more expensive than conventional buses.
ST Kinetics is currently in talks with two bus operators about running trials for the buses, with a hope to convince them with the buses' viability and to get more order on such coaches. The two buses companies are said to be SMRT Corp and Brickston Transport. Meanwhile, SBS Transit, Singapore's biggest bus company, said it is also exploring the possibility of buying hybrid buses.
India - Most Indians buy cars based on mobile phone advertisements
Source: The Economic Times, 15 November 2009
According to the latest estimates from Carsonline, the mobile phone advertisements constitute 31% of buying decision among Indians, while it is only 8% globally. The dependence on low-cost advertisement to influence consumers' buying decisions has been increasing, especially when car sales have picked up significantly in the last few months in India.
With the excise benefits and the incentives offered by the dealers and manufacturers, industry analysts expect that auto demand will continue to go up in the next few months. Carmakers like Maruti, Hyundai, Tata Motors and others have begun advertising heavily through cell phones which is generating higher buying decisions among Indians in 2009 compared to global buyers.