AutoGuide News Blog
The AutoGuide News Blog is your source for breaking stories from the auto industry. Delivering news immediately, the AutoGuide Blog is constantly updated with the latest information, photos and video from manufacturers, auto shows, the aftermarket and professional racing.
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]
China’s largest carmaker, Shanghai Automotive Industry Corporation (SAIC), is among a bunch of Chinese automakers looking to expand into the American market.
Before they can form more concrete plans, however, National Highway Traffic Safety Administration official David Strickland visited China to explain U.S. safety standards, and touring the SAIC plant. Despite the reputation Chinese automakers currently have for quality control, Chinese domestic brands are slated to meet international companies in quality by 2015, according to JD Power. Chinese companies tend to hire managers and engineers from other countries, buy supplies from overseas and adopt quality control processes that are industry-standard, said Jacob George, managing director at J.D. Power Asia Pacific
“When they offer their vehicle for sale, we will treat them like we will treat any company whether it is a Detroit company or a Japanese company or a Chinese company,” said Strickland.
SAIC took the reigns of the Rover empire from Britain after MG Rover went belly-up in 2005; they now build the Roewe 550, a car engineered in China with some English input, as well as the former Rover 75. With a partnership from General Motors, SAIC will start selling cars in the burgeoning market of India by the end of the year. Eventually, they’ll aim to sell 800,000 cars by 2015. Hopefully that quality prediction is pretty accurate.
[Source: Automotive News]
Following the lead of General Motors, Honda and Nissan, Volkswagen is looking into creating a sub-brand for the Chinese market, which would sell ultra-affordable compact cars in the world’s biggest auto market.
“A local brand is our opportunity to participate in segments where Volkswagen is not represented yet,” said Volkswagen China’s CEO Wolfgang Neumann, in an interview with German newspaper Handelsblatt. With China playing an integral part of Volkswagen’s ambituous target to be the world’s top automaker by 2018, the supposed 11th brand would add much needed volume to Volkswagen’s sales figures.
Reports suggest that FAW or SAIC, two local automakers that have partnerships with Volkswagen, would be responsible for a major part of the car’s development.
[Source: The Truth About Cars]
Although Volvo is traditionally associated with all things Swedish, but Volvo’s new chairman is hoping to put down serious roots in China as well.
“We are looking at a strategy of making China a second home market. Today we mainly only have one home market, in Sweden,” Volvo Cars China Chairman Freeman Shen said, in a report from Left Lane News.
According to Shen, Volvo will make certain products exclusively for the Chinese market and will not export Chinese made vehicles. While purists may recoil at the notion of Volvo being anything but Swedish, the reality is that Volvo is following the same strategy as companies like BMW and Audi which make China exclusive products (like long wheelbase versions of the 5-Series and A6) as they attempt to establish a strong presence in what is now the world’s biggest car market.
[Source: Left Lane News]
You may have never heard of Guangzhou, China, but with nearly 12 million people, the industrial metropolis is a major player in the Chinese auto market.
Making its debut at the show is one of China’s most anticipated new cars, the MG3 hatchback and MG6 sedan. Although Chinese cars are a laughing stock in much of the automotive press, the MG6, in pre-production form, has been called “borderline best in class to drive” by Autocar magazine in the UK, and with competition like the Ford Focus, Vauxhall Astra and Volkswagen Golf, this is high praise.
While the MG bears the nameplate of the famous British sports car maker, the MG6 was developed from the ground up in China. The car will be sold in the UK within a year, but no plans for American sales have been announced.
China is looking at doing away with their mandatory rule forcing automakers to enter into 50/50 joint ventures with local Chinese auto makers.
This arrangement allows Chinese automakers to gain knowledge from auto makers that are already established, allowing for a an accelerated learning curve while keeping some of the profits at home. However, the arrangement has intellectual property implications that made many automakers uneasy, and doing away with the forced joint ventures would open up China’s auto market and be a strong measure of goodwill towards foreign car makers who wish to invest capital into the Chinese market. Furthermore, it would eliminate the awkward bureaucracy that many joint ventures fall victim to, due to overlapping levels of executives who must approve of corporate decisions.
[Source: The Truth About Cars]
General Motors upcoming IPO is attracting a lot of attention, not least from Chinese car manufacturer SAIC. A long time partner of the General, SAIC is looking to buy a significant portion of GM’s IPO, and with nearly $6 billion in cash reserves, the company is in a good position to do so.
According to reports, the president of SAIC has recently visited America after GM posted its prospectus on November 3rd. GM is hoping to raise $10.6 billion through its IPO.
Citroen is going to enter the large luxury car market with a production version of the Metropolis concept car. The Metropolis will likely be badged as a DS9, and be positioned as a flagship to the company’s DS range, which currently markets a line of premium hatchbacks in Europe.
The Metropolis is unique in that its design and packaging will likely be dictated by the Chinese market and its unique demands. While the Metropolis show car was powered by a hybrid drivetrain, the Chinese market may not get this due to intellectual property issues. Citroen’s previous luxury car efforts have floundered against offerings from German car makers, but Citroen is hoping that their new styling direction and “made in China” design process will attract customers will make it a success.
[Source: Automotive News]
General Motors’ Chinese division is on track to outsell its American unit, a not entirely surprising development in light of the sheer enormity of China’s auto market.
GM China has been bolstered by the strength of their two domestic nameplates, Baojun and Wulin (seen above), which are popular in export markets as well as in China.
Kevin Wale, head of GM China, predicted that the Chinese car market could see total sales of 17 million this year and 19 million in 2011. Wale credits government support, a rising middle class and a love of the automobile for the continued growth.
The Chinese market has a series of peculiar tastes, the most well-known being their love of stretched mid-size sedans. While China gets cars like the BMW 7-Series, Mercedes-Benz S-Class and other full-size luxury cars, stretched versions of everything from the BMW 5-Series to the Skoda Superb come in long-wheelbase versions, ostensibly for budding executives who can afford a driver, but not the biggest luxury car.
Volkswagen has previously offered an LWB Passat and is planning to sell a stretched variant of their newest sedan, which will also be built in China. The stretched car will be 4.7 inches longer than the standard Passat, giving it a larger rear seat area, with legroom highlighted as the key dimension. We’re not getting either variant of this car, so stay tuned to Autoguide for the closest possible look at this Sino-Germanic oddity.
[Source: China Car Times]
Nissan has announced a new brand for the Chinese market, known as Venucia, or Qi Chen in Chinese. The cars will be developed, launched and sold in partnership of Dongfeng Nissan, the local arm of the Japanese automaker.
“In the future, we aim to sell more than one million vehicles annually and the new brand will play an important role by offering practical models with class-leading quality,” said Fumiaki Matsumoto, managing director of Dongfeng Nissan, in an official statement.
The Venucia brand will be for the Chinese market only, and focus on the needs of China’s consumers. The logo, seen above, is based on the brands “five promises”, which are “to respect customers, create value, do the best, achieve world-class quality, and seek the dream.”
Hit the jump to read the official press release
China’s Ministry of Commerce and its National Development and Reform Commission has signed off on a deal that will let Chinese carmaker Geely to purchase Volvo from Ford for $1.8 billion.
“We have received all approvals required from the central government,” Ning Shuyong a spokesman from Geely, told Reuters. “We are currently working on closing the deal.” China’s tight state control of the economy means that government approval is essential for any deals of this nature.
Geely is expected to help double Volvo’s output by investing in a new Chinese factory to produce cars under the Swedish nameplate. Geely is said to be willing to spend another $900 million to ensure that Volvo stays competitive. Currently, Volvo assembles the S40 and S80 sedans at the Ford-Chongqing Changan Automobile, but will likely have to move production due to the sale.
A former GM employee and her husband have been indicted by a federal grand jury in Detroit in an industrial spying case. Ex-GM worker Shanshan Du and her husband Yu Qin are accused of photocopying thousands of documents relating to hybrid vehicle technology.
Prosecutors allege that the couple attempted to pass the documents on to a Chinese company, but destroyed the documents once an investigation began. The two are scheduled to appear in court today.
[Source: Detroit Free Press]
The Ford Escape has been around for nearly a decade now, but it may live on even after it leaves the North American market. Reports say that Chinese automaker Jiangling will acquire the tooling for the first generation Ford Escape, which was sold in certain world markets as the Ford Maverick.
The rumors have appeared as Ford and Jiangling unveiled plans for new factories in China’s Xiaolan Economic Development Zone. The proposed plant would have the capacity for 170,000 vehicles per year.
Ford has yet to announce a replacement for the current Escape, but the model is scheduled to die in 2011.
[Source: Left Lane News]
The Chinese auto market has a strange fascination with stretched versions of compact and mid-size sedans, the the stretched BMW 5-Series (pictured), the Audi A4L and the stretched Mercedes-Benz E-Class to name a few.
BMW wants a bigger piece of the action and is teaming of with Chinese automaker Brilliance (yes, that Brilliance) to build the long-wheelbase 3-Series as well as a new factory in the Chinese region of Shenyeng. The factory should have an ultimate capacity of 300,000 units, with 60 percent of the parts sourced within China. Capacity should be enough that BMW will be able to export cars from the plant, although it’s not likely that we’ll ever see a stretched 3-Series on our shores. Expect identical powertrain options in the stretched car, and a slightly higher price tag.
China is the world’s biggest auto market in the world, so it might not be so surprising that China is also Hyundai‘s new biggest market, after the automaker sold more cars in China than Korea for the second straight month. Buoyed by the success of the Yuedong (aka our Elantra) and the Tuscon crossover, Hyundai was able to move 57, 014 cars in China in May, versus 55, 339 in Korea.
The Yuedong was able to usurp the title of #1 selling compact car from the Chinese engineered and built BYD F3, a significant coup for the Korean automaker. Hyundai expects to move 670,000 cars in China for the year 2010.
[Source: Joon Gang Daily]
Nearly 13 years ago today, Britain handed over sovereignty of Hong Kong to the Chinese government, ending a 99-year lease on the territory, and signaling the end of a British presence in China.
Now, reports from various news agencies say that India’s Tata Motors is looking at building Jaguar and Land Rover assembly plants in China. Like all car factories in China, this one is expected to be a joint venture between a local (read: state owned) automaker and Tata. Carl-Peter Forster, the Tata executive responsible for the British brands said that demand is strong enough to support a Chinese assembly plant, and the construction of a new factory won’t harm any jobs in Britain.
[Source: Inside Line]
Daimler, parent company of Mercedes-Benz and BYD, China’s fastest growing car company, established a joint venture to develop electric cars in China. Based in the industrial city of Shenzen, the two companies respective experience with electric cars complements one another. BYD is experienced with battery and drivetrain systems, while Daimler will bring their knowledge of safety and structural design to the table.
With BYD’s push into the American market this year, the partnership is an astute move for both companies, as China becomes an increasingly larger presence in the automarket, while Daimler is able to leverage its premium Mercedes-Benz brand to help propel sales and interest in their vehicles.
Hit The Jump To See The Official Press Release
[Source: World Car Fans]
Chinese electric car maker BYD announced plans to establish a headquarters in Downtown Los Angeles, in a joint statement released with the Mayor of Los Angeles, and the Governor of California.
“By the end of next year, the plan is to offer several models,” BYD Senior Vice President Stella Li told reporters in Los Angeles. Li also announced that BYD was discussing plans with Penske Motor Group, a large dealer chain, to sell BYD cars in California.
BYD is hoping to capitalize on the growing demand for alternative-fuel vehicles, and a consumer desire to reduce greenhouse gas emissions. The new office as well as a battery and solar panel development center is expected to add 150 initial jobs as well as 1000 jobs in sales and product support.
[Source: Automotive News]
Having been to BYD Auto’s facilities in Shenzhen, China, we have witnessed first-hand the development stages of China’s new-age automotive manufacturers. What was most entertaining was how BYD Auto blatantly copies well-established auto manufacturers when it comes to the styling of its vehicles. In fact, one of the vehicles they had displayed in their museum was a clear replica of a Mercedes-Benz SL-Class.
Universally mocked for outright copying products, China’s auto industry has come to earn a deservedly bad rep over the decades.
New to the pack is Chinese automotive manufacturer Huatai (or better known as Hawtai in English) with its B35 SUV. With the Beijing Auto Show opening last week, lots of surprises are pouring out from Mainland China, the latest being these photos of the B35 SUV. There is quite the blend of styling throughout the car, noticeably screaming Porsche Cayenne with a hint of Audi, Bentley and maybe even Jaguar and subtle Maserati. Based on the images, it looks like the SUV will be powered with a 1.8T – possibly a diesel, as Hautai is known for.
We’re more curious as to how well this vehicle will actually perform on the streets, especially when it comes to safety. It’s really hard to argue though how quickly China is rising in the automotive market and how it could be shaping things to come over the next decade or so. We wouldn’t be surprised to see some Chinese automobiles prowling our streets over the next few years. But for now we’ll just continue to point and giggle while we await for something original to come out of China.
GALLERY: Huatai B35
The Beijing Auto Show has brought a slate of new releases from companies like Ferrari, Lamborghini and Bentley, but the most opulent and outrageous vehicle is a homegrown Chinese product.
The Hongqi may look like a poor imitation of a Rolls Royce, but the Hongqi Limo is a serious car in its own right. At 21 feet long, the Hongqi is a whale of a car, requiring a V12 engine producing 405 horsepower to help the vehicle move. Soundproofing is said to be so good that the cabin is dead silent. One can only assume that armor plating and other security measures befitting of the Chinese Head of State add further mass to an already portly vehicle.
It’s unlikely that the Hongqi will ever reach our shores, but you can buy one in China for a cool $1.1 million, a significant sum by North American standards, but all the more astonishing when you factor in that the average income for a city-dwelling Chinese citizen is closer to $5,000 per year.
GALLERY: Hongqi Limo