China’s largest SUV manufacturer, Great Wall Motor Co., wants to begin selling vehicles in America, and hopes to do so by 2015.
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Despite having made impressive jumps in recent years, the Chinese automotive industry is believed to still be a decade away from being globally competitive.
A new emerging brand from China, Qoros is readying its first car for international debut at the 2013 Geneva Auto Show.
Would you entertain the idea of buying an old-model Ford Focus new from the manufacturer? In today’s throwaway culture it’s hard to imagine buying anything but the latest product, but that’s not the perspective everywhere. In other parts of the world, previous model cars remain for sale at a discount after a new lines debut.
Notorious for stealing body styles, the Chinese automotive industry is quickly becoming the definitive source for unabashed design plagiarism.
With a track record including obviously-bilked F-150 bodies and more recently a hodgepodge S11 supercar set to debut at the upcoming Beijing Auto Show, it’s hard to expect anything short of absolute banditry from some of China’s car companies.
Automakers benefited greatly from China’s rapid growth over the past decade. Chinese appetite for automobiles has been a critical income for manufacturers around the world. Even General Motors sold more vehicles in China than in the United States.
However, China’s economy seems to be cooling. According to LMC Automotive, 2012 vehicle sales will only increase by 9.2 percent, less than half of last year’s growth. Compounding the issue, the Chinese government intends to curb the growth of foreign automakers in order to allow its domestic industry to thrive. When these new policies are in place, those automakers without assembly plants within China, such as Chrysler, may be shut out.
Something the global economy has experienced multiple times, rapid economic growth is often followed by a bubble burst. According to analysts, the Chinese market bubble may pop in just three years. Time will tell which automaker is best prepared for the inevitable market shift.
Two weeks ago, we saw that China’s Jianghuai Automobile Co. (JAC) recreated its own version of Ford’s F-150 pickup truck to an amusing level of detail. According to The Detroit News, JAC now plans to unveil its 4R3 pickup at the upcoming Beijing Auto Show.
Copying Ford design cues to even sport the F-150 grill and big blue oval badge, the JAC successfully mimicked the pickup’s brawny appearance to a tee. However, the JAC 4R3 receives its power from a rather un-Ford-like, gutless, 2.8-liter diesel engine with just a little over 100-hp and 177 lb-ft of torque.
Aware of its clone, Ford has yet to decide the best way to approach JAC on the matter.
“We’re aware of it and we’re investigating. We’re just trying to get an idea of what’s going on with the vehicle and haven’t decided what our next steps might be,” Ford spokesman Mike Levine told the Detroit News.
Chinese knockoffs are anything but rare and it’s really not surprising to see something like this from JAC. That said, Ford may actually struggle to sue the state-owned automaker because doing so would likely require filing against the Chinese government, which might not ever hear the case.
Despite the obvious design ripoff, it might be easier and cheaper for Ford to let the wimpy clone live in the true truck’s shadow, rather than taking legal action.
GALLERY: JAC 4R3
[Source: Detroit News]
Geely will make their first foray into the notoriously tough British market in 2012, hoping to emulate the success of Korean brands like Hyundai.
While Geely already helps produce the iconic London taxis, the company will face an uphill battle regarding the vehicle’s perceived quality. Their first UK offering, the EC7 compact car, will cost 10,000 GBP (roughly $15,581 USD) and feature a five-year, 100,000 mile warranty.
Geely is looking to recruit 30 to 40 dealers and sell about 1,000 cars in 2013, with a new model added for the next 4 to 5 years. Geely will be based out of Coventry, where the office of Manganese Bronze Holdings’ London Taxi Company (its partner in London Taxi production) resides, but Geely will remain separate from its subsidiary Volvo Cars.
[Source: Automotive News]
Even as the Occupy movement is being disbanded around the world, one branch of the movement just had a resurgance, as Saab fans “occupied” the Facebook page of General Motors.
Saab fans blame GM for holding up the sale of Saab to their potential saviors - whoever they may be (so far it’s been Russian businessmen, American private equity investors and now, a Chinese automaker) but GM has expressed concerns about intellectual property getting into the wrong hands. GM definitely has a point, and we’re not sure if juvenile tactics like this will help advance the cause of Saab fans. Perhaps the opposite.
GM’s Chinese-market passenger van, the Chevrolet Move N300, is suffering from slow commercial sales. Seeing a potential market for export, the ever-so-resourceful American automaker has decided to deliver 5,000 of these Chinese complete-knock-down van kits to Egypt. While Egyptian import duties has made building vehicles in North America difficult, CKD kits (Complete Knock Down) provides automakers the ability to legally bypass these regulations operations.
According to Shen Yang, the president of SGMW, a three-shareholder joint venture between SAIC Motor Corporation Limited, Liuzhou Wuling Motors Co Limited and GM China, “The introduction of the Chevrolet Move will help SGMW expand market in Egypt and also seek more opportunities to cover the market in North Africa and the Arabia Free Trade Zone. Besides, it also helps SGMW to increase its export volume and further expand the competitiveness of sales and products.”
The Move N300 will complement the existing smaller N200, which is also imported from China, and currently distributed in African markets by GM Egypt. Chevrolet offers a line of vehicles in Egypt, mostly smaller passenger cars from GM’s Korean operation, through its Al-Monsour Automotive Company distributor and partner. Al-Monsour also runs a CKD factory in 6th-of-October City, Egypt.
Fiat will build Alfa Romeo vehicles in China starting in July, 2012, as part of a joint venture with local partner Guanhzhou Automobile Group Co Ltd.
Company president Zeng Qinghong told Automotive News that ”Besides the Fiat brand, after talks between the two shareholders, we will introduce the Alfa Romeo brand to the venture company.” No timetable was given for when the vehicles would go on sale, but the new venture would be dubbed Guangqi Fiat.
Guangqi Fiat will initially produce 140,000 vehicles annually, and will likely expand beyond just Fiat and Alfa Romeo cars. Fiat has large interests in commercial vehicles, trucks and other vehicles. Alfa Romeo will also have to compete in an increasingly crowded premium vehicle segment in China.
[Source: Automotive News]
BMW and Mercedes-Benz have always been the German luxury brands for the well-to-do set in the United States, but in China, the two companies have been considered cars for the new money and retirees respectively.
Audi and Buick continue their dominance over the hearts and minds of Chinese consumers. Buick has historically been a hot brand in China, thanks to their long tie-up with the Chinese emperors of yore, but according to the New York Times, Audi’s prestige was cemented in the post-1949 era.
“Audi is still the de facto car for government officials,” said Wang Zhi, a Beijing taxi driver who spoke to the paper. “It’s always best to yield to an Audi — you never know who you’re messing with, but chances are it’s someone self-important.”
Audi has produced cars in China since 1988, 15 years ahead of BMW, and Audi cemented itself as the car of choice for government officials. The A6, in particular, has been especially popular, while BMW has become the car of choice for the country’s entrepreneurial class.
Meanwhile, Buick, which is seen as the car of choice for the 65+ set, sold 550,000 cars in China in 2010, triple what it sells in the United States. Mercedes-Benz, on the other hand, is viewed as the car for the geriatric set in China.
[Source: The New York Times]
According to Inside Line, Saab may be ready to re-start production at its factories in as little as 8 weeks, after being sold to two Chinese automakers for $142 million.
While Saab was valued at $660 million this summer, both Pang Da and Zhejiang Youngman Lotus Automobile Co. managed to purchase the company at a rock bottom price after a number of other deals failed to materialize. Chinese companies now own both Saab and Swedish automaker Volvo.
Saab’s Swedish factories have been idled since March, but could be up and running in as little as 2 months. The company claims to have 11,000 vehicle orders on the books, and may even bring the 2012 9-5 SportCombi station wagon to this April’s New York Auto Show if all goes smoothly in the upcoming months.
[Source: Inside Line]
U.S. private equity firm North Street Capital will give Saab a $70 million investment, including an equity stake worth $10 million and a $60 million loan to the ailing car maker.
With Chinese-backed financing looking increasingly unlikely, the investment from North Street Capital, a firm run by auto enthusiast Alex Mascioli, will give Saab the resources it needs to (literally) keep the lights on at their facilities. The Chinese government has yet to approve the bridge loan being offered by both Zhejiang Youngman Lotus Automobile Co and Pang Da, and Saab’s owners fear that full payment will not be received on the October 22nd due date.
[Source: Automotive News]
The administrator in charge of the Saab bankruptcy proceedings has told a Swedish court that the process must stop.
“The money is not enough to continue the reorganization,”said Guy Lofalk in an interview with Reuters. “Now, an application [to terminate the reorganization] has been mailed. It should be on the court’s desk tomorrow.”
Lofalk said that the $70 million investment from North Street Capital was insufficient, and that the two Chinese companies looking to buy Saab have failed to reach an agreement with Saab’s owners.
Saab’s owner, Swedish Automobile, said that it would fight the request and attempt to have Lofalk removed from his position.
[Source: Automotive News]
It’s not clear if Chinese automaker BYD is more famous because of its billionaire investor Warren Buffet, or because of its continued failed promises to sell cars in North America. Soon, however, you might recognize the brand as your emissions free transportation to and from the office. That’s because BYD is preparing to launch its new eBUS-12, the world’s first fully electric full size bus.
Measuring 12 meters (40 feet) in length, the potentially revolutionary bus will have a range of 250 km in urban driving and will debut at Busworld (sounds exciting, we know), in Kortrijk, Belgium on Friday, October 21st.
BYD will also then announce plans for a European launch strategy with tests of the new bus in several major European capitals. Like with its cars, there’s no word of BYD selling buses in North America.
Saab‘s days as an automaker might not yet be numbered. According to a recent report a Chinese automaker may be interested in purchasing the bankrupt automaker. “I’ve heard this one before,” you’re probably thinking to yourself. But this time it’s different…. we promise.
According to Sweden’s Dagens Industry, the interested Chinese suitor is none other than Geely, the very company that successfully bid for and took control of Saab’s Swedish big brother, Volvo. With the resources necessary to complete the transaction Geely has already proven it can navigate the tricky regulations process that has prevented several others from successfully backing Saab.
Recently Saab applied for creditor protection in order to reorganize the company. That move was, however, rejected by the Swedish courts, signifying that Saab may be headed for liquidation.
Fiat CEO and the auto industry’s wise old grandpa, Sergio Marchionne, warned the industry that “the day of reckoning is inevitably coming,” when Chinese automakers begin exporting on a massive scale.
Marchionne is usually regarded as being “usually four steps ahead of everybody else,” according to Chrysler executives. It’s no surprise then that his warning, given during the annual conference of the Center for Automotive Research, sounds dramatic. “We cannot afford to be unprepared for the ascent of China, reassuring ourselves of our invincibility,” said Marchionne. “Rather, we need to work to make our industrial base more competitive.”
Even if China exports a mere 10% of what they build, “the risk we face in our home markets is enormous.” No doubt Marchionne has already seen this in Brazil, where Chinese imports are eroding the sales of normally-popular Fiats.
And behind his words is another warning, this time aimed at Detroit: just because the Big Three are profitable again, doesn’t mean that wages and benefits should increase again—long-term competitiveness against foreign threats like China, South Korea, or even South America is key. America may be years from its own Chinese invasion, but if Marchionne has any say, Detroit won’t get caught off-guard. Wolverines!
[Source: Detroit Free Press]
The masses have spoken, and they are numerous: China’s rapidly-growing car consumers are more likely to choose European brands than two years ago, instead of Japanese and homegrown Chinese cars.
J.D. Powers surveyed China’s buying habits, and found that 32% would buy a European car—up from just 25% in 2009. The figures for Japanese car buyers were almost exactly opposite: they dropped from 32% in 2009 to just 27%. European cars gained popularity through word of mouth, with people endorsing safety and power. Japanese cars got a knock for their dealership service, as well as perceived quality and reliability.
If this latter point seems bizarre to you, given Japan’s reputation for carbuilding, then it’s worth noting that the Chinese feel the same way about their Chinese cars as the world’s automotive pundits. Just 20% of buyers would recommend China’s domestic cars, citing the same quality concerns that fuel endless Youtube videos of Chinese crash tests. The cars mostly excelled in the compact category, with BYD and Chery as the two brands that came ahead in that market segment.
The survey covered 65 brands and 161 models, and 4,979 potential buyers responded from 53 Chinese cities.
[Source: Automotive News]
Warren Buffett and Chinese carmaker BYD have raised 1.4 billion yuan, or $219 million, in their initial public offering in Shenzhen.
While seemingly impressive, the figure was below expectations. Investors were worried over how well the company would perform, and lacked confidence for the company. BYD had hoped to raise 2.19 billion yuan, or another $34 million.
Shares of BYD were priced at 18 yuan, while its Hong Kong shares were priced at $21.50 each. It did sell 79 million shares in its initial outing, however, amidst declining sales: 9% since May.
BYD originated as a battery producer but is now China’s 4th largest automaker, and has been developing its electric car for both mainland and global consumption. Warren Buffett has held a stake in the company since September 2008, and is still happy with the investment.
As part of Spyker’s capital-raising efforts for its ailing Saab brand, the Dutch automaker is entering into talks with Chinese automotive company Pang Da, and will have to rename itself as Swedish Automobile N.V. as part of the deal.
In return, Saab will get a $42 million cash payment, ostensibly to help pay Saab’s substantial debts. Saab CEO Victor Muller confirmed the payment, stating ”Pang Da’s advance payment and sales of imported Saab cars are not subject to approval from the NDRC. The first advance payment of EUR 30 million was received last Tuesday.”
Pang Da is expected to pay $91 million for a 23 percent stake in Saab. However, a Bloomberg report claims that China is hoping to slash the size of its auto industry, and government regulators may not give the go-ahead for the transaction, scuttling Saab’s salvation.
Volkswagen will partner with Chinese automaker FAW to launch a new brand, which will build and sell electric cars for Chinese consumers.
Plans were submitted to the Chinese government, although details of the vehicle weren’t publicly disclosed. Honda, Nissan and General Motors have recently expanded into creating their own Chinese market brands in partnership with other Chinese automakers. China’s government is encouraging these partnerships in order to allow their own domestic automakers to gain experience in developing new cars.
[Source: Automotive News]