China in May: Market up, passenger vehicles up a lot, commercial vehicles down, foreigners up, Chinese down, GM and Volkswagen in dead heat
June 10, 2014 by Bertel Schmitt
Years ago, and ever since, Western prognosticators said the Chinese car market was in bubble-territory, and ready to roll over. Last month, as in the months and years before, the market ignored the negative vibes, and powered on. According to data released by China’s manufacturers’ association CAAM, sales in May were up 8.5 percent year-on-year to 1,911,200 units across all segments. For the first five months of the year, sales were up 9 percent to 9,838,100 units. The CAAM is targeting an increase of 10 percent for this year (which would bring sales to over 24 million), and the market is making valiant attempts to comply. Read more »
May 21, 2014 by Bertel Schmitt
It’s déjà vu all over again in Trollhättan: “China’s National Electric Vehicle Sweden (NEVS) has temporarily halted output of its Saab car due to a shortage of funds,” the company told Reuters yesterday. The reason for the shortage of funds also sounds far too familiar. “The reason is that NEVS’ part-owner Qingbo Investment Co. Ltd has not fulfilled its commitment to, when necessary, finance NEVS’ activity,” the company which had bought SAAB assets in a fire sale said in a statement.
May 20, 2014 by Bertel Schmitt
In what we thought as a mostly adulatory article, Tycho wrote last week that boundless demand for Tesla’s Model S fuels the grey marketing activities of Tianjin car dealers. I followed it up with the fawning prediction that, based on the high demand and on what Chinese customers are ready to pay more ($13,000 above list) just to get their Model S now, I see no reason why Tesla can’t make its target of selling 5,000 of their electric cars this year in China. In the no good deed going unpunished dept., Tesla’s new China spokesperson Peggy Yang (she was just hired away from Volkswagen) took issue with the story.
May 16, 2014 by Bertel Schmitt
One of the hottest topic on Wall Street is whether Tesla will sell the targeted 5,000 units in China. If you want to know what cars are really hot in the world’s hottest market, China, there is no better place than the grey import dealers around China’s port city of Tianjin, China’s hotbed of cars that officially should not even be there.
May 14, 2014 by Bertel Schmitt
Volkswagen’s supervisory board approved plans for a range of low cost models, and they will be launched in 2017 onto the Chinese market, The Nikkei reports from Volkswagen’s shareholder meeting in Hanover, Germany. CEO Martin Winterkorn said the car will be targeted at first-time car buyers. At a rate of around 60 cars per thousand people in China (USA: more than 800), there is no shortage of first-time buyers in the Middle Kingdom. According to the Nikkei, Winterkorn “did not touch on specifics, such as pricing, he hinted a final decision will be soon made.”
Volkswagen has been thinking more or less aloud about a lower priced brand for several years now, so the decision does not come as a big surprise. The Nikkei, along with the better informed parts of the industry, expect Volkswagen “to keep the price under 7,000 euros ($9,643) and to use a different brand name.”
It will be interesting to see what brand name is used, and the choice will indicate how serious the company is about the budget range. Read more »
May 13, 2014 by Bertel Schmitt
Japanese-branded cars led the market a few years ago. First they were dethroned by the Germans, then they went into a dangerous spiral as collateral damage from the island troubles. Last year, the Nipponese slowly clawed back their sales. After keeping a low profile for a while, Japanese automakers announced aggressive plans to retake lost market share. Today, Nissan’s head of its operations in China, President of Dongfeng Motor Co., Ltd. Jun Seki came to Yokohama to explain his plans to the Japanese media and CarNewsChina.com.
May 9, 2014 by Bertel Schmitt
BMW is investing heavily into a raft of new models to dust rival Audi, but it won’t buy more shares in its Chinese joint venture partner Brilliance. This week in Munich, BMW’s CFO Friedrich Eichiner blew off a Bloomberg reporter who asked whether BMW would. “The market is regulated,” Eichinger snapped. “This question is not relevant, it is legally not possible.” Indeed, it is not. If you want to build cars in China, you need a Chinese joint venture partner who must own no less than 50 percent of the shares.
This system was put in place decades ago when China opened its doors to foreign automakers. The idea was that Chinese would learn on the job everything about developing, manufacturing, and selling cars. Once China was developed into an auto giant, one could dispose of the cumbersome laowei.
It just did not work out that way. Read more »