TABLE OF CONTENTS
German Auto Exports to India Treble, Firms Eye Expansion
Auto Industry Stabilizes as Ford, Toyota Post U.S. Sales Gains
GM Sales in China Jump 66.9% in 2009
Bosch Sees 10% Rise in Global Car Parts Sales In '10
VW to Buy Stake in Suzuki / Recent Porsche Purchase
Think to Build Plastic-body Car Plant in Indiana
Bosch to Invest $400 million in India
Rolls-Royce Starts Construction of U.S. Machining Plant
The German automotive industry has more than trebled its exports to India over the last five years to 200 million euros (287 million dollars), Germany's VDA auto industry association said recently.
'India is an important growth market for the German automotive industry,' VDA managing director Klaus Braeunig told reporters at the Auto Expo in New Delhi.
The Indian car market is expected to have grown 17 per cent in 2009 at a time when most markets worldwide were shrinking.
In 2009, the Indian market overtook the Russian market of over 1.5 million passenger cars and analysts agree it should continue to grow in 2010, Braeunig said.
The commercial vehicles market in India also posted 12-per-cent growth in the last quarter.
German carmakers and parts suppliers are also increasing their presence in India with over 65 factories already established in the country.
'We believe India presents a huge opportunity. For (German companies) India is not just a client but represents partnership spanning several areas,' German envoy to India, Thomas Matussek said before inaugurating the German pavilion at the show. 'Both our manufacturers and our suppliers are well established in India,' added Braeunig.
Indian producers have also expanded their exports to Germany. In the first three quarters of 2009 alone, Indian manufacturers exported cars to Germany with a total value of over 215 million euros - three times as much as in the previous year.
More than 35 German companies are participating at the Indian auto show, from major manufacturers to small and medium-sized suppliers. The Auto Expo is India's largest car show and is scheduled to run until January 11.
Ford Motor Co., Toyota Motor Corp. and Honda Motor Co. posted U.S. sales gains in December that beat analysts’ estimates as the industry showed signs of stabilizing after its worst year in almost three decades.
General Motors Co. reported a 5.7 percent drop in light- vehicle deliveries, worse than analysts anticipated, while Chrysler Group LLC’s 3.7 percent decline exceeded estimates. Ford sales soared 33 percent, and Toyota jumped 32 percent.
Honda said U.S. deliveries increased 24 percent, and Nissan Motor Co. jumped 18 percent. The results reshuffled the industry rankings in the U.S., with Honda climbing past Auburn Hills, Michigan-based Chrysler and into fourth place for the first time in full-year sales.
Ford, spurred by an 83 percent gain for the Fusion and a doubling of Taurus sales, said the December results gave the Dearborn, Michigan-based automaker an estimated 15 percent of 2009 U.S. sales for the first full-year increase in its home market since 1995. Ford said 2008’s total was about 14 percent.
Industry sales in 2010 may rise 19 percent to 12.4 million because of the need for new vehicles and improving availability of consumer credit, said Sean McAlinden, chief economist for the Center for Automotive Research in Ann Arbor, Michigan.
Other preliminary forecasts for industrywide sales range from Chrysler’s outlook of about 10.8 million to Ford’s 12.3 million.
“For 2010, I’m leaving my seat belt on because I think volatility is still an element of the new norm,” Ken Czubay, Ford vice president of U.S. marketing sales and service, said on a conference call.
Al Castignetti, Nissan’s vice president of U.S. sales, wouldn’t give a forecast for industry sales growth this year beyond saying that his “personal view is we’re not going to see 10 percent or 15 percent increase.”
“I’m fairly optimistic,” Castignetti said. “The market will get better, credit will get better.”
Chrysler announced new incentives of no-interest, five-year financing or $3,000 in cash rebates on virtually of its 2010 model-year vehicles. Chief Executive Officer Sergio Marchionne has said repeatedly he wants to move away from incentives because they undermine the value of the brands.
GM and its joint ventures in China announced that their domestic sales jumped 66.9 percent in 2009 to a record 1,826,424 units. Based on bullish sales of Buick, Chevrolet and Wuling vehicles, the GM China family achieved an estimated market share of 13.4 percent, another year-end record and an improvement of 1.3 percentage points from the end of 2008.
The strong year-end results were possible in part because of record December sales by GM’s Shanghai GM and SAIC-GM-Wuling joint ventures and the addition of sales from its new FAW-GM joint venture.
“We are proud of our performance in 2009,” said Kevin Wale, President and Managing Director of the GM China Group. “Chinese consumers responded enthusiastically to our lineup of modern, fuel-efficient and stylish products, validating our strategy of rolling out a steady cadence of great vehicles that are leaders in their respective segments. This is part of GM’s global strategy of focusing on designing, building and selling the world’s best products.”
In 2009, as part of GM’s aggressive product launch strategy, GM and its joint ventures in China introduced several new and upgraded models to keep up with strong industry demand, including the new Buick LaCROSSE and New Regal turbo series; the Chevrolet Cruze; and the new Cadillac SLS and SRX. In addition, GM continued to bring to China its latest technology such as the new 1.2-liter engine in the Chevrolet Spark and ECOTEC 1.6-liter DVVT engine in the Chevrolet Cruze. Both powertrains made the list of the 10 best engines in China for 2009.
GM and its joint ventures continued increasing their investment in China to help position themselves for long-term success. To provide better service to local customers, Shanghai OnStar initiated in-vehicle safety, security and communication services. In addition, the GM China Science Lab was launched and PATAC opened its new vehicle safety lab. Shanghai GM broke ground on China’s largest proving ground in Anhui province, SAIC-GM-Wuling opened a new engine plant in Qingdao, and GM China moved to new offices in Shanghai, sharing space with the GM International Operations headquarters and the Center for Advanced Research and Science.
To maintain its growth, the GM China family continued to expand. In the middle of the year, GM launched an important new partnership with FAW, FAW-GM, which has given GM a presence in the light commercial vehicle segment. In December, GM and SAIC Motor announced the establishment of a new 50-50 joint venture investment company, General Motors SAIC Investment Ltd., to capture business opportunities in Asia’s emerging markets.
Domestic sales by Shanghai GM rose 63.3 percent to 727,620 units in 2009. The passenger car joint venture was once again led by its original brand, Buick, which experienced sales growth of 59.6 percent year on year to 447,011 units. The Excelle, which sold 241,109 units, remained the brand’s bestseller for the sixth consecutive year. Further contributing to the resurgence of Buick in China were the New Regal, which generated sales of 79,930 units, and the new LaCROSSE, which generated sales of 43,429 units in just six months on the market.
Chevrolet sales in China likewise experienced strong growth, with 332,774 units sold – an increase of 67.1 percent from 2008. The Cruze, GM’s new global compact car, enjoyed great success in China, with sales of 92,190 units despite being on the market only nine months. In addition, the Lova had sales of 118,935 units.
In 2009, SAIC-GM-Wuling became the first automaker in China to sell more than 1 million vehicles in a year, increasing its domestic sales by 63.9 percent to 1,061,213 units. With sales of 596,630 units, the Wuling Sunshine set a Chinese industry record for annual sales by a single model.
FAW-GM sold 34,510 light commercial vehicles in the four months after its establishment in August 2009 and began construction of a new assembly plant in Ha’erbin.
Wale expressed optimism about the 2010 outlook. “Despite the sales records in 2009, it looks as if 2010 will be even stronger. The industry outlook is strong and we expect more growth, albeit on a somewhat slower pace. It is our intent to keep up with that growth and make sure we defend our leadership position. GM has all the tools in place to have another great year in China.”
German autos parts supplier Robert Bosch expects global sales of its car parts division to rise 10 percent year-on-year in 2010, as inventory adjustments have been completed, a top company official said recently.
"Inventory adjustments have taken place in 2009 and is not likely to be repeated in 2010," Bernd Bohr, head of the company's car parts division, told a news conference.
Volkswagen will take a nearly 20% stake in Suzuki for more than $2.5 billion, giving VW a solid footprint in the Indian auto market, the companies said on Dec. 9.
Europe's biggest carmaker, which hopes to unseat world leader Toyota, already has a strong presence in China but wants to expand its Asian reach in an alliance with the Japanese compact car maker.
Tokyo-based auto analyst Tatsuya Mizuno at Mizuno Credit Advisory said "the alliance may accelerate a reshuffle" in the industry. "The global auto industry was weathering the crisis and is now entering into a new stage" where strong offers of small, environmentally friendly cars will be important, Mizuno said. "For VW, Suzuki is attractive as Suzuki is strong in small car businesses in developing countries, in particular India."
The two companies said that they "plan a joint approach to the growing worldwide demand for more environmentally friendly vehicles."
Both firms had "concluded that the complementary strengths of each company make for a perfect fit in exploiting their respective advantages as well as rising to the challenge of the global market."
VW chairman Martin Winterkorn told a Tokyo news conference that "Suzuki is a world leader in the compact and sub-compact car segment, and Suzuki is one of the world's leading motorcycle manufacturers. The company is very strong in Japan and Southeast Asia and Suzuki-Multi is by far the number one car maker on the Indian market."
The chairman of the Japanese company, Osamu Suzuki, praised VW's "exquisite advanced technologies" and strong positions in Europe, South America and China. "Suzuki, on the other hand, has the advantage in manufacturing low-cost compact cars," he added.
General Motors pulled out of Suzuki last year ending an alliance that started in 1981. Mizuno said that "after ending its alliance with GM, Suzuki needed to find a strong partner in order to survive tough competition in the global market."
For VW, the agreement is another step in its plan to overtake Toyota as the world's biggest automaker by 2018. "Eight to 10 years from now, we want to become number one in the world, and I believe that we'll be able to accelerate that into happening with cooperation with Suzuki," Winterkorn said.
The chairman of Suzuki said the Japanese company seeks to become an "equal partner" with the German automaker, not one of the brands owned by it.
VW has just bought 49.9% of the German luxury sports car maker Porsche and will take it over by 2011, making Porsche its 10th brand. The head of VW's supervisory board, Ferdinand Piech, has said he sees VW eventually owning 12 brands, and the group is also interested in the German heavy-vehicle maker MAN which could complement its Swedish truck unit Scania. VW already owns around 30% of the shares in MAN and could aim to create a strong commercial vehicle division with the two companies.
Norwegian electric car maker Think made it official and recently announced it will build a new assembly plant near Elkhart, Ind.
The company already produces its plastic-bodied, battery-powered Think City in Uusikaupunki, Finland, at investor Valmet Automotive’s assembly plant. The new $43.5 million plant in Indiana will have capacity of 20,000 vehicles per year, with production starting in 2011, the company said in a Jan. 5 news release.
The plant will employ up to 400 people by 2013. The Oslo-based carmaker did not mention the exact site in Elkhart County, but officials there are discussing a tax abatement for a Think plant in Goshen, Ind.
Think’s biggest investor, Ener1 Inc. of New York, makes lithium-ion battery packs for Think at its Indianapolis-based subsidiary EnerDel.
Ener1, Valmet and other investors brought the company out of insolvency in 2008, giving Think another lease on life. Its original owner, Pivco Industries AS, ran out of funding in the late 1990s and sold it to Ford Motor Co. It passed from Ford to a series of private investment groups.
Think boasts that its two-passenger City can travel for up to 100 miles at highway speeds on a single charge. It is currently sold in Norway, Sweden, Austria, Denmark, the Netherlands and Spain.
“Things are moving very swiftly for the company in Europe,” CEO Richard Canny said. “Now it’s time for us to do the same in the North American market.”
The Indian arm of German engineering giant Bosch said recently it would invest more than 400 million dollars over two years to expand in the country's fast-growing diesel engine market.
"India is witnessing a strong increase in demand for diesel engines," the company, a major maker of diesel injection systems, said in a statement.
"The diesel engine consumes 30 percent less fuel than the gasoline engine, while common-rail technology reduces the pollutant emissions of diesel engines, thus making it possible to meet strict emission standards."
Bosch introduced common-rail fuel injection systems in India in 2006, the statement said, adding nearly a quarter of the new investment would be earmarked for research.
India is Asia's third-largest car market after China and Japan, where Japanese-owned Maruti Suzuki holds a commanding lead. Indian car sales are expected to cross two million units next year.
Bosch Automotive Group chairman Bernd Bohr told a press conference that sales in India grew by five percent to 68 billion rupees (1.4 billion dollars) in 2009. India, which currently accounts for about five percent of the company's global auto business, is likely to account for seven to nine percent of its total auto business by 2017, he said.
Rolls-Royce recently started construction on a new component finishing plant in suburban Washington, DC, a $500-million project that will be its largest North American manufacturing facility when fully completed. The 1,000-acre site in Prince Georges County, VA, represents an initial investment of about $170 million, according to Rolls, and it will feature space to accommodate suppliers' and partners` co-location in the future.
The company manufactures engine systems for civil and military aerospace, marine, and energy markets. The Crosspointe plant in Virginia will finish-machine aerospace components and products, including turbofan discs for some of Rolls’ civil aerospace engines. Examples of these are the Trent 1000, Trent 900 and Trent XWB engines for the Boeing 787, Airbus A380, and A350 XWB respectively.
Discs are the part of a turbofan engine that contains the blades. Disc production at Crosspointe could begin as early as 2011.
Rolls also projects a second building on the site for machining blisks, i.e., bladed discs. These are gas-turbine engine components that incorporate fan blades and discs into a single piece. Blisks manufactured at Crosspointe would be used in the F136 engine for the Joint Strike Fighter.
A Rolls spokeswoman explained that the forged blisks would be manufactured elsewhere and delivered to the site for finish machining.
"Rolls-Royce is investing in America," stated James M. Guyette, president & CEO, Rolls-Royce North America. "This is a historic day for us as we begin construction on our first manufacturing facility built from-the-ground-up in the U.S. Crosspointe will be a flagship operation for Rolls-Royce, and the significant investment we are making here will enhance our competitiveness in global markets and position us for future growth."
The Crosspointe campus also will be home will to the Commonwealth Center of Advanced Manufacturing (CCAM) and the Commonwealth Center for Aerospace Propulsion Systems (CCAPS.) CCAM is a higher-education partnership founded by the Commonwealth of Virginia, the University of Virginia, Virginia Tech, Rolls-Royce, and other partners. CCAM is intended to be a world-class research facility for design and manufacturing technologies. CCAPS is a virtual research and technology center.
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