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TABLE OF CONTENTS
President Obama Awards $2.3 Billion for New Clean-Tech Manufacturing Jobs
Auto Industry Getting Government Boost in Russia
China Passenger Car Sales Up 55 % in February
Korea Aims to Be a Top Green Car Maker
GM Posts Record Sales in India
Mercedes-Benz Numbers Show Progress
Ford Launches Affordable Made-for-India Compact
President Obama recently announced the award of $2.3 billion in Recovery Act Advanced Energy Manufacturing Tax Credits for clean energy manufacturing projects across the United States. One hundred eighty three projects in 43 states will create tens of thousands of high quality clean energy jobs and the domestic manufacturing of advanced clean energy technologies including solar, wind and efficiency and energy management technologies.
This effort, along with other Recovery Act investments, will drive significant growth in the renewable energy and clean technology manufacturing sectors and give the United States the ability to lead globally in these markets. The investment tax credits, worth up to thirty percent of each planned project, will leverage private capital for a total investment of nearly $7.7 billion in high-tech manufacturing in the United States.
While projects selected for this tax credit generally must be placed in service by 2014, approximately 30 percent of them will be completed in 2010.
The projects announced address the broad spectrum of manufacturing capabilities. Qualifying manufacturers will produce solar, wind, and geothermal energy equipment; fuel cells, microturbines, and batteries; electric cars; electric grids to support the transmission of renewable energy; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions. Related to the auto industry:
Think North America will establish a U.S. manufacturing operation/facility in Bristol, IN (a vehicle assembly operation as well as facilities for fabricating vehicle components) for the Think City light-weight EV-dedicated vehicle for sale throughout North America.
The Russian government is set to breathe new life into the country's struggling auto industry through a cash infusion worth $6 billion, its biggest long-term investment so far in the nation's auto sector, Edmond’s InsideLine reports.
The Cabinet recently approved a 1.2-trillion-ruble ($40.3 billion) investment as part of a 10-year strategy to overhaul the faltering sector, Industry and Trade Minister Viktor Khristenko told journalists.
Domestic automakers are expected to provide $19.6 billion in investment, to be spread over a decade, while the government will support the sector with $6.04 billion, Khristenko said.
Government funding will mainly go to research and development to help modernize the industrial base, while the rest is to be used to subsidize interest rates for loans to keep them at around 7 percent and make them affordable to automakers.
Khristenko said the investment program will also help to launch the projects of major auto alliances presently operating in the country, such as Renault and AvtoVAZ, Fiat and Sollers, and Kamaz and Daimler.
Government support would be withdrawn when the main phase of realizing these projects ends around 2015 or 2016, he said.
Prime Minister Vladimir Putin said the government will continue to support AvtoVAZ, the nation's biggest automaker, by funneling another $940 million to Russian Technologies, AvtoVAZ's parent company.
The government has also earmarked another $336 million for AvtoVAZ, Putin said, but the struggling automaker will not have access to the funds unless it successfully implements a restructuring program.
AvtoVAZ must be turned around and produce a competitive product, Putin said.
An industry-wide study considered by the Cabinet described the technological level of the country's auto industry as "lagging by four to seven years" in fuel efficiency, safety, comfort and emissions.
The report noted that Russian car producers invest only 1 percent of their earnings into research and development; the global average is 4-5 percent.
The report also says labor efficiency in Russia is 50-75 percent lower than in global industry leaders, while existing equipment used by the industry is 60 percent worn out.
Russia's auto industry, once tipped to become Europe's fastest growing, employed about 1.5 million workers and contributed about 1 percent of gross domestic product before the 2009 industry downturn.
The government expects the market to return to pre-crisis levels by 2013-'14. Return on its investment is expected within five to 10 years.
Khristenko also said the government's cash-for-clunkers program, scheduled to start March 8, may involve about 7 percent of cars in Russia that are more than 10 years old.
About 14 million Russians currently own cars older than 10 years and are eligible to trade them in for a 50,000 ruble voucher that can be used to purchase new cars but the $335.9 million set aside for the program can only buy 200,000 vouchers.
The government will give an additional $33.59 million to dealers as compensation for transporting the old cars to recycling centers.
About 66 foreign and Russia-made models are eligible for trade-in at 1,569 dealerships around the country. A total of 153 companies will be responsible for recycling the trade-ins, according to documents on the Industry and Trade Ministry's Web site.
The cash-for-clunkers program is expected to last until November 1.
Russian car sales plunged 56 percent last year to 1.4 million vehicles, according to figures from PricewaterhouseCoopers. The audit company expects sales to rise by as much as 15 percent in 2010.
Wall Street economists have always placed emphasis on the auto industry’s monthly vehicle sales report because it offers a rather reliable gauge as to the health of the U.S. consumer.
But this month, the industry has been fraught with obstacles – the 8.5 million-car Toyota recall, and the massive winter weather storms that paralyzed the East Coast may have cost the industry millions.
“While February sales have improved from a year ago, the pace of the recovery has hit a speed bump,” said Jeff Schuster, forecasting chief at J.D. Power & Associates in Troy, Michigan, to BusinessWeek magazine. “Because of the Toyota recall, buyers are sitting on the sidelines. The severe storms in February also had some impact.”
The February 2009 pace was the lowest since 1981.
Toyota has the biggest issues. Sales of many lines were completely frozen for weeks amid a recall of over 8 million vehicles and the company was expected to see sales drop 10% compared with last February. Honda recalled under 500,000 for an airbag default.
Many were speculating that Toyota’s well-documented woes would hurt other Japanese brands as well. “Toyota is the flagship for products from Japan,” Schuster told CNNMoney. “It’s hard to document how much it could hurt the other Japanese [auto] brands, but clearly it has the potential to ripple through.”
That may be good news for the American auto industry, with General Motors (GM) and especially Ford expected to gain market share. In 2000, Ford and Chevrolet owners reported 29-42% more problems with their cars than Toyota and Honda. In 2009, that gap had closed to 1-4%.
Outside of Toyota and Chrysler, all other major brands are expected to see an increase in year-over-year auto sales.
Edmunds.com reports year-over-year auto sales for Ford showed a 43% jump in sales, to 142,285 vehicles, mostly attributed to a rebound in truck sales.
MarketWatch reported, “Ford car sales surged 54% while truck sales rose 36% from a year earlier, helping the company, which continues to thrive in the wake of competitor bankruptcies and mounting quality woes, reach a total U.S. market share of perhaps 17%.”
General Motors sold 141,951 vehicles. Deliveries climbed 12%, reported Bloomberg, but that’s less than the 20% some analysts were predicting.
General Motors’s sales were also less than those of rival Ford. For the first time since 1998, Ford has sold more autos than General Motors.
When brands like Saab, Saturn and Pontiac are excluded – the nameplates that General Motors will be getting rid of – sales climbed 32%, which is a good sign for General Motors.
Chrysler – predicted by industry analysts to see a fall – actually increased auto sales by a modest amount.
Only Toyota – reeling from massive vehicle recalls and auto sales freezes – saw their numbers decrease. And even that fall was less than expected: only 8.7%, instead of the consensus 12% analysts saw going in.
Mercedes-Benz USA said that its February auto sales rose 8%. The company reported total auto sales rose to 15,385 vehicles, from 14,199 last year. And, so far for 2010, Mercedes has sold 30,543 cars from 24,632, a rise of 24%.
Overall, it was a relatively good reading for the auto industry. Sales of autos across the board were up compared with a year ago… despite multiple East Coast snowstorms that General Motors estimates knocked sales back 5%.
The annualized selling rate rose to 10.28 million units from 9.17 million a year ago, a 12% increase. The February figure was down from January, which reported 10.78 million units. Moving forward, analysts expect the March auto sales figures to be even better as the spring selling season begins.
Sourrce: Taipan Publishing Group
China's passenger car sales climbed 55 percent from a year earlier in February, despite a long national holiday, on strong demand for smaller cars and sport utility vehicles, an industry group reported recently.
Sales of cars, commercial vehicles and SUVs rose to 942,900 units, while sales of all vehicles including trucks and buses rose 46 percent year-on-year to 1.21 million, according to the government-affiliated China Association of Automobile Manufacturers.
Unlike the U.S., China's auto industry does not release monthly sales data adjusted for annual rates. U.S. auto sales rose 13 percent from a year earlier to an annualized rate of 10.4 million, according to Autodata Corp.
Tax cuts and subsidies for small-car purchases pushed demand sharply higher last year, with total vehicle sales leaping 45 percent to 13.6 million, making China the world's biggest auto market, as American car sales languished.
China appears to have kept that lead so far in 2010, though February is traditionally a slow month for auto sales in both markets. The Lunar New Year holiday in mid-February kept China's sales well below the 1.1 million passenger cars sold in January, when sales more than doubled from a year earlier.
Analysts have forecast sales growth to slow this year. Some of the strong growth seen in January was from orders booked late last year, said An Yun, a researcher at Changxin Fund in Shanghai.
In January-February, vehicle sales jumped 84 percent year-on-year to 2.87 million, while production rose 92 percent to 2.82 million, the auto industry association said.
A large share of the vehicles sold in China are small passenger cars and minivans used by farming families and small businesses — the focus of the tax cuts and other policies aimed at spurring sales of fuel-efficient vehicles.
In February, automakers sold 623,100 passenger sedans, up 46 percent from the year before. Sales of multipurpose vehicles, mainly vans and minivans, jumped 72 percent to 25,200, while sales of SUVs more than doubled to 70,300, the association said in a report on its Web site.
It said sales of Chinese-brand vehicles continued to advance, claiming about half of sales in February.
All of the foreign automakers face tough competition from the Chinese partners they mentored in joint ventures the government requires as a condition for manufacturing in China.
But Toyota Motor Corp.'s own troubles with recalls of vehicles for braking and gas pedal problems are putting it under even greater pressure to drum up sales.
The Japanese automaker, which has recalled 75,522 RAV4s in China, saw sales of its venture with FAW Group drop out of the 10 top-selling models in February, the state-run newspaper China Daily said recently.
Toyota's overall sales in China slipped to 45,400 units in February from 72,000 the month before.
Source: AP
The government will finalize a roadmap plan by September to outline the strategies for the Korean auto industry to achieve a ``top-four'' global status in the emerging field of environment-friendly cars.
Despite the strengthening of ``green'' car initiatives, vehicles with hybrid drives are slowly rolling out of the gate here, with drivers being put off by the high prices and lagging fuel economy.
The Ministry of Knowledge Economy launched a forum on the green car strategies recently, which was attended by more than 500 government officials, auto industry representatives and independent experts as they shared their ideas on expanding the market for hybrid and electric cars, and easing the transition on the manufacturing side.
The ministry will establish a unit within the Korea Automotive Technology Institute, which will act as a bridge between the government, academic and business sectors as they collaborate to map the green car strategies.
In an opening speech to the forum, Knowledge Economy Minister Choi Kyung-hwan said that the country aims to become among the top-four manufacturers of eco-friendly cars, including hybrid, electric and other vehicles based on alternative drive technology, by 2015.
``The car industry is at a crossroads, pumping out more than 30 million vehicles out of the factories each year to generate excessive supply, but also seeing an opportunity in the rising consumer demand for better safety and convenience. Another opportunity is brought by the strengthening pressure to reduce emissions and lessen the negative effects on the environment, brought forward by governments and also enforced by international agreements regarding climate change,'' Choi said at the meeting at the Renaissance Hotel in Seoul.
"Countries are now seeing the development of electric, hydrogen and other environment-friendly cars as a necessity, not a choice. Governments and companies around the world are betting their future on environment-friendly cars to achieve green growth and drive the auto industry out of its crisis.''
Choi acknowledged that carmakers will have to hedge their bets, as it is too early to tell which technology will emerge as the dominating standard in environment-friendly cars.
``Electric cars and hydrogen-fuel vehicles are already out on the market and both have growth potential, but right now, it's hard to identify a clear-cut choice in terms of technology. Carmakers should be ready for every kind of eco-friendly technology, as seen by the preparations in the United States and the European Union,'' he said.
At the center of the government plans is Hyundai Motor, which is gathering buyers for its hybrid cars and expects to start commercial production of vehicles with electric drives sometime next year.
To achieve the goal of establishing a top-four status by 2015, the Korean carmakers will have to manage a combined 10 percent share of the world's environment-friendly car market.
Hyundai and Kia Motors are struggling to generate buzz for their hybrid cars, and the recent troubles at Toyota, which involved a massive recall of its Prius hybrid cars, certainly doesn't inspire any confidence from consumers.
According to the Korean carmakers, the number of hybrid vehicles, including Hyundai's Avante hybrid and Kia's Forte hybrid, sold in February was 591, which accounted for just 0.5 percent of the overall market.
Source: Korea Times
Hyundai Motor Co. said its German sales may tumble 38 percent this year and Netherlands-based Ceva Group Plc, the largest car-parts transporter, said shipments suggest there won’t be a strong rebound in the European economy.
Hyundai, South Korea’s largest automaker, is braced for sales in Germany as low as 56,000 in 2010 compared with 91,000 a year earlier, according to Werner Frey, managing director for the country. Clients of Ceva, which include Volkswagen AG and Fiat SpA, are generally predicting “very low single digit” percentage growth, Chief Executive Officer John Pattullo said.
The forecasts add to gloom surrounding European auto markets after Deutsche Bank AG last week cut its estimate for full-year sales by 100,000 units to 12.1 million. A 10 percent gain in the first two months was propelled by orders under cash- for-clunkers programs and demand is likely to drop 14 percent in the remaining 10 months as incentives end, the bank said.
West European car sales rose 0.5 percent to 13.6 million last year, according to figures from the Brussels-based European Automobile Manufacturers’ Association. Deutsche Bank envisages an 11 percent drop in the region for the whole of 2010.
In Germany, deliveries of cars and SUVs may fall to about 3 million this year from 3.8 million in 2009 after scrapping payments ceased last September, Hyundai’s Frey said in an interview in Berlin on March 5.
Renault SA reported its first annual loss in 13 years on Feb. 11 and forecast a 10 percent contraction in European auto demand in 2010. PSA Peugeot Citroen predicted a 9 percent drop a day earlier and Fiat said Jan. 25 that West European sales could fall 16 percent if incentives aren’t revived.
Seoul-based Hyundai aims to keep its share of registrations in Europe’s largest economy above 2 percent this year, compared with 2.4 percent in 2009, the executive said. Sales should increase about 10 percent to 100,000 by 2015, boosting its market share to 3 percent.
Ceva, based in Hoofddorp, west of Amsterdam, had a net loss of 104 million euros ($142 million) in 2009 as revenue fell 13 percent to 5.5 billion euros. Earnings began to revive in the second quarter of last year, when the company posted an operating profit of 69 million euros, compared with a 30 million-euro loss in the previous three months, Pattullo said.
Contracts won by the Dutch company in 2009 included logistics services for the Iveco trucks unit of Turin, Italy- based Fiat, Ceva’s biggest auto-industry client, and for Office Depot Inc., the second-largest office-supplies retailer in the U.S., the executive said in the interview on March 4.
Ceva, the biggest global logistics specialist following its sale by TNT NV to private-equity firm Apollo Management LP in 2006, has accelerated the implementation of the “kaizen” efficiency and cost-reduction system, training 1,800 supervisors last year in the methodology best known for its application at Toyota Motor Corp.
“This industry generally does not have a good reputation for operational performance,” Pattullo said. “We’ll be able to compare sites across the world, we’ll be able to tell customers how good the operations are and we’ll just bring a bit more science to logistics.”
Source: Bloomberg
According to The Financial Express, a division of India Express Ltd., General Motors sold 11,111 vehicles in February, “the highest monthly sales since its inception in the country.” But more interestingly, this figure is more than double that of January’s auto sales.
In January, General Motors sold 4,921 vehicles in India.
That’s a nice boost, and the first time the company has crossed the 10,000 mark since it started selling vehicles in India in 1996.
The data shows that buyers favored small cars… Sales for General Motors’s Beat and Spark were considered robust.
As a result, the company is adding shifts at two of its plants in order to meet demand.
The German auto giant Mercedes Benz said its GL-Class was the company’s top performer, by posting a 45.5% increase, selling 1,368 units versus 940 last year. The starting list price for a Mercedes GL-Class is $60,000, so consumers seemed willing and able to acquire the high-valued item.
The uptick in sales of Mercedes-Benz vehicles wasn’t exclusive to the United States. Mercedes-Benz Canada reported a record-breaking auto sales total of 2,011 sold in February. The company posted an increase of 28.9% from February of last year, which was the best February ever for the Mercedes-Benz Canada group. Year-to-date, the company has seen its auto sales increase 31%.
Ford Motor Co. launched its first made-for-India compact car recently, as the U.S. automaker continues its push into fast-growing Asian markets.
The four-door Figo, Italian for "cool," is the Dearborn, Michigan-based automaker's first car designed — and priced — for the mass Indian market.
"Come heat, come dust, come monsoon rains or Delhi traffic, the Figo was born and bred for India," said Michael Boneham, president and managing director of Ford India.
As the global auto industry suffers, India has been enjoying an auto boom. An economic rebound, rising incomes and pent-up demand drove car sales to 1,370,659 vehicles from April to February, 25 percent more than during the same period the previous year.
Ford has ramped up investment in China and India, but has been slow to adjust to the proclivities of Indian carbuyers, three quarters of whom buy super-small, super-affordable cars.
The luxurious sedans Americans favor find little room on India's teeming streets, and they're priced stratospherically out of reach for a nation where the per capita income is about 43,750 rupees ($960).
The Figo is different. Ford squeezed the car into a tiny frame — 3.8 meters (12.5 feet) by 1.7 meters (5.5 feet) — to ease its passage through the tide of bullock carts, angry taxis, handcarts, motorbikes and cows that clog city roads. And they used easy-to-replace components, like bumpers, to handle the unavoidable dents and dings. The car also has extra durable lubricating and cooling systems, to deal with India's extreme heat and torrential rains.
But its most Indian feature of all is the price. Starting at 349,900 ($7,690), the Figo is within reach of "Sandeep," Ford's vision of its archetypal consumer — a 27-year-old man, recently married and ambitious, with an income of 300,000 to 400,000 rupees ($6,000 to $8000) a year.
Higher-end Figos come with keyless entry and Bluetooth connectivity.
Like other global auto majors, Ford also hopes to turn India into a small car export hub. Boneham said the Figo would first ship to South Africa.
Source: Associated Press
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