cars | CHINDIA ALERT: You'll be living in their world, very soon

30/12/2012

* China’s transport improves, faces pressure: minister

Ever more infrastructure.

Xinhua: “Some 87,000 kilometers of new highways opened in China in 2012, marking a record-high year-on-year growth rate, a senior transport official said Saturday.

Minister of Transport Yang Chuantang said 11,000 km of the new highways are expressways. In addition to building new highways, China has also improved 194,000 km of rural roads this year, according to Yang.

“China’s transport sector has seen historic changes during the past decade,” said Yang, adding that the total length of highways in operation is expected to reach 4.1 million km by the end of this year.

However, Yang also said China’s transport capacity remains insufficient, considering the booming demand created by the country’s industrialization and urbanization.

To meet mounting demand, Yang said China will continue to intensify transport facility construction and try to make these facilities more durable and reliable.

China will also make efforts to improve transport facilities in rural areas as well as those in the country’s central and western regions, he said.

At the same time, China will improve road safety by taking measures to prevent serious transport accidents, Yang said.”

via China’s transport improves, faces pressure: minister – Xinhua | English.news.cn.

Posted in China alert, Economics, Highways | Leave a Comment »

Tags: cars, China, Highway, Road traffic safety, transportation

22/12/2012

* Suzuki to Start Building Gujarat Plant Early 2013

Good news for India.

WSJ: “The local unit of Suzuki Motor Corp. expects to start building its third factory in India early next year to meet potential growth in demand for its vehicles in the local market and overseas.

R.C. Bhargava, chairman of Maruti Suzuki India Ltd., said Friday that car sales in India will likely grow in single digits this financial year and the next due to the current slowdown in Asia’s third-biggest economy, as well as uncertainty over the pricing of diesel fuel and gasoline.

The Gujarat plant will be Maruti’s first outside the northern state of Haryana, where a July 18 riot by about 3,000 workers at its Manesar factory resulted in the death of a senior manager, injured more than 100 people and forced the company to suspend production.

The violence was the worst since the company began producing cars in 1983.

But Maruti executives say the plan to build the new plant in Gujarat isn’t linked to the labor unrest in Manesar.

Gujarat has a long coastline, and the new plant will enable the company to save on logistics costs in shipping its cars overseas, especially to Europe. Maruti exports its cars to more than 125 countries.

“The Gujarat project is going along online. We hope that in the early part of next year, we should at least get the groundbreaking done in Gujarat,” Mr. Bhargava told reporters.

Maruti has acquired 700 acres for the third plant from the Gujarat government. It will initially have an annual capacity of 250,000 cars a year when it opens in the financial year starting April 1, 2015. The capacity could be increased to 2.0 million vehicles a year, Maruti has previously said.

The company is investing a total of 40 billion rupees ($740 million) in Gujarat.”

via Suzuki to Start Building Gujarat Plant Early 2013 – WSJ.com.

Posted in Economics, India alert, Investment in tangibles, joint venture, Manufacturing | Leave a Comment »

Tags: cars, Gujarat, India, Maruti Suzuki, maruti suzuki india, Suzuki

10/12/2012

* China’s Great Wall Motor in talks for India entry

China is sensing that India’s time is about to come. Earlier it offered to support infrastructure projects, now it is hoping to make and sell cars in India.

Reuters: “Great Wall Motor Co, China’s biggest SUV maker, is in talks to set up a wholly-owned business in India, an Indian industry official said on Monday, in what would be the first Chinese car maker to enter the country alone.

People look at cars of Chinese automaker Great Wall Motor Co Ltd displayed during the Sofia Motor Show 2011 in Sofia June 15, 2011. REUTERS/Stoyan Nenov

Great Wall, China’s eighth-largest car maker, sent a delegation to India last week, and targets starting manufacturing of vehicles in India in 2016, Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers (SIAM), told Reuters in an interview.

“They are looking at coming into India to set up manufacturing,” said Mathur. “They are meeting industry, they are meeting government, they are meeting suppliers.”

Great Wall executives met with SIAM representatives last week, Mathur said. He did not provide details of investments planned.

Great Wall representatives could not be reached by Reuters for comment.

India’s car market has attracted billions of dollars in investment from overseas manufacturers, such as General Motors (GM.N), Ford (F.N) and Toyota (7203.T). But Chinese car makers have not yet made significant inroads into the country.”

via China’s Great Wall Motor in talks for India entry: industry official | Reuters.

Tags: Automotive industry in the People's Republic of China, cars, China, great wall china, Great Wall Motor, Great Wall of China, India, india entry, indian automobile manufacturers, Society of Indian Automobile Manufacturers, transportation

09/12/2012

* China’s Wanxiang wins auction for U.S. government-backed A123

Chinese firms continue to acquire foreign firms’ expertise and assets.

Reuters: “China’s largest maker of auto parts won a politically sensitive auction for A123 Systems Inc (AONEQ.PK), a bankrupt maker of batteries for electric cars that was funded partly with U.S. government money, A123’s investment banker said on Saturday.

Battery maker A123 Systems Inc. has struggled for years.

Timothy Pohl of Lazard Freres said Wanxiang Group Corp’s bid of about $260 million topped a joint bid from Johnson Controls Inc (JCI.N) of Milwaukee and Japan’s NEC Corp (6701.T) for the maker of lithium-ion batteries.

Siemens AG (SIEGn.DE) of Germany had also qualified to bid, according to two people familiar with the auction, who asked not to be identified. The auction began on Thursday.

Chinese companies have launched $51.3 billion worth of outbound deals this year, making it Asia’s second-biggest spender on overseas acquisitions behind Japan, according to Thomson Reuters data.

While state-owned oil giants continue to dominate outbound deals, recently Chinese companies have targeted deals aimed at securing technology know-how. That shift is supported by China’s five-year development plan that puts emphasis on industries such as high-end manufacturing equipment.

Earlier this year, Shandong Heavy Industry Group agreed to buy a quarter stake in Germany’s Kion Group KIONG.UL, giving China access to industrial technology from the world’s number two fork lift truck maker.

Before that, Xuzhou Construction Machinery Group agreed to buy a majority stake in privately held German machinery manufacturer Schwing, while Sany Heavy Industry (600031.SS) bought rival Putzmeister in a 360 million euro ($472 million) deal.

Wanxiang, one of the largest non-government-owned companies in China, has annual revenue of more than $13 billion and supplies auto parts to many of China’s largest automakers.”

via China’s Wanxiang wins auction for U.S. government-backed A123 | Reuters.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

Posted in Economics, Foreign acquisition, Investment in tangibles, Manufacturing | 1 Comment »

Tags: A123 Systems, a123 systems inc, cars, China, lithium ion batteries

21/11/2012

* Construction on Chery-Jaguar Land Rover JV starts in east China

Jaguar-Land Rover is following a path long set by other top-end car makers like Mercedes and BMW. It will, hopefully, not mean a reduction of jobs in the UK.

Xinhua: “Construction of a joint venture (JV) project between China’s auto giant Chery and Britain-owned luxury carmaker Jaguar Land Rover (JLR) started Sunday in east China’s Jiangsu Province.

Foundation stone-laying ceremony was held at the economic and technology development area in the city of Changshu, according to the city’s government.

The JV project, with a total investment of 17.5 billion yuan (2.8 billion U.S. dollars), will have an ultimate annual output of 250,000 units of passenger vehicles, said the government in a press release.

The first phase of the project, which costs 10.9 billion yuan, is expected begin producing vehicles in July 2014. Annual production capacity of the first phase will include 77,000 Land Rover SUVs, 23,000 Chery cars, and 30,000 unit of Jaguar cars by 2016.

New energy vehicles and cars with aluminum body will be produced in the JV, and its own brand will also be developed after its completion.

The JLR is also expected to establish a research and development center in the city, said the press release.

Chery was founded in 1997 and has since emerged as one of China’s largest and most productive automotive manufacturers. In 2011, Chery recorded sales of 643,000 units, ranking the sixth among China’s passenger vehicle manufacturers.

JLR, a wholly-owned subsidiary of Tata Motors, is the largest manufacturer of premium vehicles in Britain.

In 2005, sales in China accounted for one percent of combined Jaguar and Land Rover sales. The country is now JLR’s third largest market and is still growing.”

via Construction on Chery-Jaguar Land Rover JV starts in east China – Xinhua | English.news.cn.

Posted in Affluence, China alert, Consumer, Economics, FDI, joint venture, luxury brand, Manufacturing | Leave a Comment »

Tags: cars, Chery, Chery Automobile, chery cars, China, Jaguar, Jaguar Land Rover, Land Rover, Tata Motors, xinhua english news

29/10/2012

* Oh, what a sinking feeling: Toyota misfires with Chinese buyers

Although like other Japanese car makers, Toyota suffered recently due to the anti-Japanese protests and violence (eg burning of Japanese car showrooms), its woes are partly self-inflicted.

Reuters: “The roots of Toyota Motor Corp‘s China troubles run far deeper than the anti-Japan protests that have swept the country, stretching back to the 2008 launch of the Yaris subcompact — a spectacular flop with price-conscious Chinese buyers.

A visitor walks past a Toyota Motor Corp's car displayed behind a sign in both Chinese (L) and Japanese at the company's showroom in Tokyo in this October 18, 2012 file photo. REUTERS-Toru Hanai-Files

The car, a success elsewhere, was meant to help build brand loyalty and send Toyota hurtling towards a still-unattained goal of selling one million vehicles annually in the world’s largest auto market.

However the Yaris missed the mark with China’s traditional higher-end customers as well as its new emerging middle class.

To some company insiders and dealers it epitomizes all that does not appeal to the status-conscious, lacking what the Chinese call ‘daqi’ or ‘road presence’. Next to Nissan Motor Co Ltd’s pricier Tiida, for example, it feels small and lacks oomph.

But for frugal first-time buyers, the Yaris which is priced from 87,000 yuan ($13,900) was a non-starter, costing some 55 percent more than General Motor’s Chevy Sail and putting Toyota at a competitive disadvantage in a must-win market.

via Analysis: Oh, what a sinking feeling: Toyota misfires with Chinese buyers | Reuters.

First Test: 2012 Toyota Yaris SE (motortrend.com)

Posted in China alert, Consumer, Economics | Leave a Comment »

Tags: cars, China, Japan, japanese car makers, nissan motor co, nissan motor co ltd, Toyota, Toyota Yaris, Yaris

05/10/2012

* Diaoyu islands dispute hammers Japanese car sales in China

If the September drop in sales continues, the future for Japanese cars in China is very bleak indeed. There are lots of competitors both indigenous and foreign that can take up the slack. If Japanese car factories close as a result, the impact on Chinese employment will be non-trivial. So the anti-Japanese sentiment cuts both ways.

South China Morning Post: “Toyota’s sales in China halved last month from August levels, damaged by anti-Japanese sentiment in a row over disputed islands in the East China Sea, the Yomiuri newspaper reported on Friday, citing the carmaker.

Showroom traffic and sales have plunged at Japanese automakers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over Japan’s acquisition of a group of disputed islands.

A prolonged sales hit of this scale could threaten profit forecasts at Toyota, Nissan and others as China, the world’s biggest car market, makes up a bigger portion of their global sales. Toyota sold about 75,300 cars in China in August.

As demand evaporates, Toyota, Nissan, Honda and others have been forced to cut back production in recent weeks in a slowing, but still promising Chinese market.

A source told reporters late last month that Toyota’s production cutbacks could extend through November, a move that would almost certainly put the company’s goal of selling 1 million cars in China this year out of reach.

A Toyota spokeswoman in Tokyo declined to confirm the newspaper report, saying the company would announce its Chinese sales for September on Tuesday.

On Thursday, Mazda said its China sales tumbled by more than a third last month from a year earlier, providing the first concrete numbers to point to Japanese automakers’ troubles in China.

via Diaoyus dispute hammers Japanese car sales in China | South China Morning Post.

Toyota pays for cars smashed in China riots (wantchinatimes.com)
Dispute hurts Japanese carmakers’ production in China (wantchinatimes.com)
Japanese Automakers Bracing for Bashing in China Protests (bloomberg.com)

Posted in China alert, Economics, GeoPolitics, Manufacturing, Neighbour conflict, Politics, Retail, Territorial dispute | 2 Comments »

Tags: Anti-Japanese sentiment, cars, China, East China Sea, Honda, japanese car sales, Nissan Motor, Toyota

27/09/2012

* Japanese Car Plants in China: Who’s Feeling the Heat?

WSJ: “Explosive anti-Japanese sentiment in China forced Toyota, Honda and Nissan to idle factories across the country this month. Media reports suggest that fresh shutdowns may be coming again in October.

Halting production is never good news. But who’s got the bigger headache – the Japanese or the Chinese?

There is no question that Toyota, Nissan and Honda will lose sales and market share to competitors. It’s already happening. And lost sales matter because China accounts for 15% of global profits at Toyota and Honda and as much as 25% at Nissan.

And yet, the pain could become even greater for China.

All Japanese cars made in China are produced at joint-venture factories owned on a 50-50 basis with Chinese partners. When the plant doors close, Chinese executives who run those joint ventures will immediately confront two frightening realities: a dramatic drop in revenue and tens of thousands of idle workers.

Take Hong Kong-listed Guangzhou Automobile Co for example. GAC, a subsidiary of the powerful Guangzhou municipality, runs world-class car assembly joint ventures with Honda and Toyota that employs just under 13,000 people.

Guangzhou Honda and Guangzhou Toyota also buy car parts from hundred of suppliers based in Guangdong province that employ tens of thousands of more people. Honda and Toyota products are sold through more than 900 dealers owned by Chinese business people. Count several more thousands of jobs there.

As China steps its way through a delicate political transition expected to formally begin in October, the last thing the leadership in Guangzhou wants to deal with is a crush of workers with too much time on their hands. If an argument between workers at a Foxconn 2038.HK +0.78% plant in Taiyuan can trigger rioting by thousands, imagine what might happen should Guangzhou workers start wondering about future job security.

Guangzhou Automobile isn’t an isolated case.”

via Japanese Car Plants in China: Who’s Feeling the Heat? – China Real Time Report – WSJ.

Posted in China alert, Economics, employment, joint venture | 1 Comment »

Tags: car plants, cars, China, Guangdong, guangdong province, Guangzhou, Honda, Nissan, Nissan Motors, Toyota

05/09/2012

* Guangzhou Moves to Limit New Cars

NY Times: “It is as startling as if Detroit or Los Angeles restricted car ownership.

The municipal government of Guangzhou, a sprawling metropolis that is one of China’s biggest auto manufacturing centers, introduced license plate auctions and lotteries last week that will roughly halve the number of new cars on the streets.

The crackdown by China’s third-largest city is the most restrictive in a series of moves by big Chinese cities that are putting quality-of-life issues ahead of short-term economic growth, something the central government has struggled to do on a national scale.

The measures have the potential to help clean up China’s notoriously dirty air and water, reduce long-term health care costs and improve the long-term quality of Chinese growth. But they are also imposing short-term costs, economists say, at a time when policy makers in Beijing and around the world are already concerned about a sharp economic slowdown in China.

“Of course from the government’s point of view, we give up some growth, but to achieve better health for all citizens, it is definitely worth it,” said Chen Haotian, the vice director of Guangzhou’s top planning agency.

Nanjing and Hangzhou in east-central China are moving to require cleaner gas and diesel. Cities near the coast, from Dongguan and Shenzhen in southeastern China to Wuxi and Suzhou in the middle and Beijing in the north, are pushing out polluting factories. And Xi’an and Urumqi in northwestern China are banning and scrapping cars built before 2005, when automotive emissions rules were less stringent.

“There’s a recognition finally that growth at all costs is not sustainable,” said Ben Simpfendorfer, the managing director of Silk Road Associates, a Hong Kong consulting firm.

Facing public pressure to address traffic jams and pollution, municipal governments from across China have been sending delegations to Guangzhou. But the national government in Beijing is pushing back against further car restrictions because of worries about the huge auto industry, said An Feng, a senior adviser in Beijing to transportation policy makers.

“This has really become a battle,” Mr. An said.”

via Guangzhou Moves to Limit New Cars – NYTimes.com.

See also:

Chinese Cities Curb Car Sales (businessweek.com)
Would-be car owners in China fear new restrictions (wantchinatimes.com)
Guangzhou joins list of major cities limiting car sales (wantchinatimes.com)

Posted in Affluence, carbon emission, China alert, Consumer, Economics, Good news, Green, Pollution, Transport | 1 Comment »

Tags: cars, scrapping cars, transportation

CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

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* China’s transport improves, faces pressure: minister

* Suzuki to Start Building Gujarat Plant Early 2013

* China’s Great Wall Motor in talks for India entry

* China’s Wanxiang wins auction for U.S. government-backed A123

* Construction on Chery-Jaguar Land Rover JV starts in east China

* Oh, what a sinking feeling: Toyota misfires with Chinese buyers

* Diaoyu islands dispute hammers Japanese car sales in China

* Japanese Car Plants in China: Who’s Feeling the Heat?

* Guangzhou Moves to Limit New Cars

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