Table of Contents
U.S. Auto Sales Show Industry Beginning To Stabilize
China’s Passenger Vehicle Sales Peak in October
Volkswagen's Beetle to be Sold in India in December
Brazilian Demand Boosts Argentina's Auto Industry
Brazil Dealers See Car Sales Growth up to 10 percent in 2010
Mexico Auto Output, Exports Show Recovery in October
Toyota Adjusts Fiscal Forecast after Quarterly Profit
Chrysler Ends Electric Car Plans Under Fiat
Fiat 500 to Have Special Place in Chrysler Dealerships
Changan Auto to be China's No.3 Auto Maker after Merger
The U.S. auto industry showed signs of stability in October. Total sales of cars and light trucks were unchanged at just over 838,000 compared with October of last year, but rose 12 percent from a dismal September 2009, Autodata Corp. reported recently. The results signaled that some consumers are starting to spend again and the sputtering economy is beginning to pull out of trouble.
"It's ... a fairly stable kind of footing that the industry is getting under it," said Gary Dilts, a former Chrysler sales executive who is now senior vice president of global automotive operations for J.D. Power and Associates.
Last month's sales, if projected for an entire year, rose to 10.5 million after slumping to 9.2 million in September, the month after the government's Cash for Clunkers rebates ran out. Analysts said the figures are good for a normally weak October, but they're still far short of the 17 million annual rates from the late 1990s and early 2000s.
The biggest winner among major automakers was South Korea's Hyundai Motor Co., which saw sales skyrocket 49 percent to 31,005 vehicles, boosted by the Elantra small sedan. Japan's Nissan Motor Co. came next with a 5.6 percent gain, followed by GM at 4.7 percent, aided by strong pickup truck sales, the performance of new models and the highest incentives in the industry. It was GM's first year-over-year monthly sales increase in 21 months.
Toyota Motor Corp. said its sales edged up less than a percent, while Honda sales were flat. Chrysler Group’s sales fell 30 percent, though they improved from September.
Ford Motor Co.'s sales rose 3 percent and it gained U.S. market share for the 12th time in 13 months as its critically acclaimed vehicles continue to grab buyers from rivals. Ford has benefited from consumer goodwill because it didn't take government bailout money or go into bankruptcy protection, as General Motors and Chrysler did.
China's automobile market continued its robust growth in October, with passenger vehicle sales clocking a year-on-year growth of 79.6 percent, and provided enough indications that the country is well on its way to occupy the top perch in the global automobile market.
Sales of cars, sports-utility vehicles, minivans and multi-purpose vehicles touched 923,154 units last month, said Rao Da, secretary-general of China Passenger Car Association recently in Shanghai.
During the first 10 months, passenger vehicle sales surged nearly 52.4 percent over the same period last year to 8.08 million units.
"The government's favorable tax policy and the eight-day National Day holidays spurred sales in October. The robust trend was also aided as vehicle manufacturers produced more popular models during the period and reduced the delivery time," said Rao."We are optimistic that the November figures would surpass that of October as sales normally peak toward the end of the year."
Rao said if the government can continue its stimulus package for the automobile industry, the growth rate for the 2010 could reach 25 percent.
Zhu Hongren, spokesman of the Ministry of Industry and Information Technology, said the government is considering extending the favorable tax policies and the subsidy for automobile purchases in rural regions to next year also. The policies were scheduled to end this year.
Source: China Daily
Europe's largest carmaker Volkswagen will roll out the Beetle, fondly called the people's car after its maker, on Indian roads by beginning of December.
A senior company official told media on the sidelines of the India Economic Summit that Volkswagen, which mean People's car, would import the car from its Mexican plant for sale in Indian markets.
Volkswagen, which currently sells luxury sedans Passat and Jetta in Indian market, is planning to launch its small car Polo by early next year.
The group has two facilities in India at Aurangabad and Chakan, which assembles cars of its three brands, Skoda, Audi and Volkswagen.
VW is looking at full-capacity production at this plant by 2012 and in order to strengthen its workforce, it is planning to more than double the India headcount with addition of 1,500 employees at Chakan alone in Maharashtra.
The group had earlier announced a target of 8-10 per cent share of the Indian passenger car market in the next 6 years. It will also consider integrating after-sales service of its three brands in India for better synergy.
It sold about 19,000 units of Skoda, Audi and Volkswagen brands last year in the over 1.5 million-unit Indian passenger vehicle market.
Argentina, Latin America's third-largest carmaker is on track to assemble 500,000 vehicles this year, with the assistance of Brazilian demand. That's still down from the 600,000 made in 2008, but much better than was originally forecast.
"The Brazilian market has helped tremendously," said Gustavo Castagnino, director of institutional relations at Mercedes-Benz in Argentina. "It has become the industry engine for the region, and especially Argentina."
Brazil's tax incentives, combined with the country's quicker rebound from the global economic crisis compared with those of more developed economies, have helped Argentina make up for a lack of demand from Europe.
"The European market, which was key for us last year, disappeared completely from the map. We went from exporting 2,500 units to Spain last year to zero this year. We shipped 2,000 to Russia in 2008 and none this year," said Castagnino.
Daimler AG's Mercedes-Benz produces commercial vehicles in Argentina and until last year exported 25 to 30 percent of its production to Brazil. This year, the figure has risen to 50 percent, Castagnino said.
The situation reflects the health of the Brazilian automobile market, one of the strongest in the world in recent months. Brazil is among the world's top six car producers.
Argentina's automobile sector accounts for almost 15 percent of industrial gross domestic product and sales of vehicles and parts account for about 9 percent of total exports, according to data from the abeceb.com consultancy.
Exports and local demand propelled the automotive sector as it flourished during Argentina's six-year economic boom, before it cooled last year and the global downturn hit.
Leading automakers in Argentina include PSA Peugeot Citroen, which has produced 63,650 vehicles through October of this year, followed by General Motors, with 62,799 vehicles and Fiat SpA's Fiat Argentina with 62,264 automobiles.
Car sales in Brazil could rise by 9 to 10 percent in 2010 from this year should forecasts for robust economic growth prove right, automobile dealers' association Fenabrave said recently.
Fenabrave also revised upward its forecast for sales this year, to an increase of 8 percent from 4 percent previously. If confirmed, registrations for new vehicles would reach a record 2.89 million units in 2009.
"The expectation for 2010 is based on Brazil's growth perspective," said Sergio Reze, president of the Fenabrave.
He said that economic growth forecasts of 5 percent next year for Brazil would make a 9 percent increase in car sales possible, even if prices rose a little.
In October, automobile sales in Brazil dropped 5.2 percent from the previous month, to 281,306 units, but were up 25.1 percent from a year earlier.
Brazil's automobile market has been one of the strongest in the world in recent months as government tax incentives have helped reduce car prices and lure consumers to showrooms.
In late June, the government extended breaks on the so-called IPI tax on industrial goods for six months for trucks and for three months for passenger cars and motorcycles. The tax breaks will gradually expire through the end of 2009.
Brazil, Latin America's largest economy, is a major market for Italy's Fiat SpA, Germany's Volkswagen AG, and U.S.-based General Motors and Ford Motor.
The Mexican Automotive Industry Association, or AMIA, said recently that automakers produced 184,769 vehicles in October, up 26 percent from September and the highest level since late last year. Output has been rising in recent months and October was the fourth straight monthly increase.
'We can say that we hit bottom,' AMIA president Eduardo Solis said at a news conference.
Mexican auto exports of 145,711 units were also up in October, jumping 24 percent compared to the previous month to their highest level since late 2008. Year-on-year, October exports were down 13 percent. Mexico is a major car producer and sends about 70 percent of its exports to the United States, where auto sales have been slashed by the economic downturn.
Toyota Motor Corp. says it now expects to sell 7.03 million vehicles in the 2010 fiscal year ending March 31, up 430,000 units from an earlier forecast of 6.6 million, crediting the increase to government stimulus programs, as well as demand for its environmentally friendly models, specifically hybrids such as the Prius.
The adjustment in vehicle sales for the fiscal year comes after Toyota announces it made a ¥58 billion ($641 million) consolidated operating profit in its second quarter, from July through September.
The auto maker expects to book a ¥350 billion ($3.9 billion) loss in operating income in the current fiscal year, better than the ¥750 billion ($8.3 billion) loss it predicted earlier. The company credits an expected increase in vehicle sales, as well as efforts to reduce fixed costs from ¥900 billion ($9.9 billion) to ¥1.3 trillion ($13.8 billion).
Takuo Sasaki, a TMC managing officer, tells analysts in a conference call there is no telling what demand will look like in the fiscal second half as many government programs to stimulate car sales are ending, including one in Toyota’s home market of Japan.
Toyota Executive Vice President Yukitoshi Funo tells Reuters, “There is not much we do to battle the stronger yen apart from continuing with our cost reductions.”
One of those reductions was announced, with Toyota saying it would exit Formula 1 racing, reportedly resulting in ¥50 billion ($552 million) in savings for the auto maker.
Toyota credits a ¥30.5 billion ($337 million) North American operating income, partially the result of an increase in used-car prices in the U.S., for its positive operating profit.
Chrysler Group has dropped ambitious sales targets for battery-powered cars set as it was sliding toward bankruptcy and seeking government aid. The move by controlling shareholder Fiat S.p.A. marks a major reversal for Chrysler, which had used its electric car program as part of the case for a $12.5 billion federal aid package.
As late as August, Chrysler took $70 million in grants from the U.S. Department of Energy to develop a test fleet of 220 hybrid pickup trucks and minivans, vehicles now scrapped in the sweeping turnaround plan for Chrysler announced recently by Fiat CEO Sergio Marchionne.
Chrysler spokesman Nick Cappa said that an in-house team of electric car development engineers had been disbanded in favor of a more traditional organization.
Under mounting pressure to improve the fuel-efficiency of its lineup, Chrysler announced in September 2008 that it was developing three electric vehicles and would sell the first of the models by 2010. In January at the Detroit auto show, Chrysler upped the ante on its electric car bet by pledging to have 500,000 battery-powered vehicles on the road by 2013, including sports cars and trucks.
Chrysler is the only one of the six top-selling automakers in the U.S. market without a hybrid offering.
Marchionne told reporters and analysts that electric cars would only represent "1 to 2 percent" of Chrysler's sales by 2014, equivalent to less than 60,000 vehicles.
"Until the (battery) storage gets resolved, I think electric vehicles are going to struggle," he said.
Fiat is considering bringing a battery-powered commercial van to the U.S. market but those plans have not been finalized, other Chrysler executives said.
The Obama administration, which has set a target of putting 1 million rechargeable cars on the road by 2015, gave Fiat a 20 percent stake in Chrysler in exchange for bringing vehicles and more fuel-efficient engines to Chrysler.
Marchionne has forecast that Chrysler will be at breakeven on a net basis in 2011. The automaker has said it plans to more than double U.S. sales over the next five years and roll out a dozen new models based on Fiat platforms.
The Fiat 500 will be sold exclusively in metro markets by select dealers, says Peter Grady, Chrysler Group LLC vice president-network and fleet.
The highly anticipated B-car is engineered by Chrysler partner Fiat Automobiles SpA and expected to be assembled at Chrysler’s plant in Toluca, Mexico.
Chosen dealerships will feature salons dedicated to Fiat and staffed by specially trained personnel assigned exclusively to the task of selling the 500.
The auto maker’s expectation is that the stylish minicar will attract customers who might not have otherwise set foot in a Chrysler store, Grady tells journalists and analysts here as the auto maker outlines its 5-year plan.
Changan Automobile (Group) Co Ltd, parent of Chongqing Changan Automobile Co Ltd, will become China's third-largest auto group after acquiring the auto operations from aircraft maker Aviation Industry Corp of China.
Under the restructuring deal, Changan Auto will take over Harbin Hafei Automobile Industry Group, Jiangxi Changhe Auto Co and Haribin Dongan Auto Engine Co, as well as the China joint ventures of Suzuki Motor Corp and Mitsubishi Motors Corp from AVIC, the Chongqing-based auto maker said in a statement.
Upon the completion of the deal, AVIC will take a 23 percent stake in Changan Auto, while China South Industries Group will own the remaining 77 percent.
Changan Auto will see its annual production capacity expand to nearly 2 million units, becoming the country's No.3 auto maker after FAW Group and Shanghai Automotive Industry Corporation (Group).
The enlarged auto maker aims to sell more than 2.6 million vehicles by 2012 and 5 million units by 2020, the company said in a statement.
Changan Auto and its subsidiaries sold 127,600 vehicles in October, 122 percent more than the same period of last year. In the first ten months, auto sales rose 57 percent from a year ago to 1.32 million units.
The Chinese government earlier this year announced a plan to consolidate the country's auto industry, in a bid to increase the industry's competitiveness against foreign auto giants. In May, Guangzhou Automobile Group agreed to buy a 29 percent stake in Hunan Changfeng Motor Co as part of the industrial restructuring.
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