Buick has been GM’s volume brand in China for decades as it enjoyed huge popularity with the masses, its image boosted by the last emperor, who owned two of them. Buick still sells over a million cars a year in the People’s Republic, over 5 times as many as its sells at home in the United States, but its time as the best selling General Motors brand in China may soon be over. In November for the very first time ever, sales of GM’s low-cost Baojun brand, from its SGMW Joint Venture with Chinese auto giants SAIC and Wuling, outsold Buick as its sales jumped more than 40% to nearly 128.500 units. Buick sales were up 2,1% to just [Read more…]
Mitsubishi Motors has presented an ambitious growth plan for the next three years, called “Drive for Growth”. According to this plan, the brand will invest more than 600 billion Yen (€ 4,5 billion / US$ 5.3 billion), of which R&D spending will increase by 50% to € 1 billion (US$ 1.2 billion) to develop six all-new models (including the recently launched Eclipse Cross crossover for the US and Europe, and the Xpander MPV for Indonesia) and significantly update five existing models. As a result of this product offensive, worldwide sales should increase by 40% to 1,3 million units in 2020 and the company expects to return to profitability with a profit margin of 6% by the 2019 fiscal year. This is the first business plan by Mitsubishi since Nissan took a controlling 34% share in its struggling rival in 2016. According to Mitsubishi CEO Osamu Masuko “this is an ambitious program to maximize our strengths in growing product segments, especially four-wheel drive, and to pursue growth in markets where our brand has strong potential, particularly the ASEAN region.” [Read more…]
After almost 10 years of UK-only sales, SAIC MG is ready to start exports of its cars from China to other countries in Europe as well. Recently, Shanghai Automotive Industry Corporation (SAIC) has successfully launched a few crossovers in the domestic market (Roewe RX5, MG ZS), which puts its two passenger car brands among the fastest growing brands in China at the moment. This would be a great moment to expand its footprint to new markets as it can launch there with fresh product, and more importantly: the right product. MG is the designated export brand for passenger cars from SAIC, whereas Roewe is and will remain a China-only brand and Maxus is the LCV brand of the company. MG is already available in a number of countries in the Asia-Pacific, South America and Africa regions, and since 2009 in the UK where it reached a peak of just under 4.200 sales last year. With its expansion into continental Europe, the brand is looking to become the first Chinese brand to successfully enter a mature market, but a number of other players have set similar goals, among others Geely with its newly launched Lynk & Co brand and the resurrected Borgward brand, which both also have concrete plans to enter the European car market. [Read more…]
Ford has announced that the next generation Focus sedan will be imported from China, now that other automakers have proven there’s little public backslash nor customer hesitation over quality from cars produced in China. Buick already imports the Enclave from China, Cadillac will follow with the CT6 PHEV and Volvo sells the Chinese made S60L in the US and S90 in Europe. So not a lot of breaking news there, except that the Focus will be the highest volume model so far that will be shipped from China to the US. The big story about this announcement is Ford’s decision to pick China instead of Mexico as the new production base for the Focus. Ford originally planned to move Focus production to a new $1.6 billion plant in San Luis Potosi, Mexico. Those plans were canceled in January, less than a year after announcing them, under public pressure from then-president-elect Donald Trump. Trump singled out Ford for its decision to move production from Michigan to Mexico, which he claimed would cost US jobs. Then-Ford-CEO Mark Fields called Bullshit on Trump as the Focus would make room for production of the Bronco SUV and Ranger midsize pickup at Ford’s Michigan Assembly Plant in 2018, and no US jobs would be lost as a result of this move, but it was too little too late against the media-savvy populist who never let truth get in the way of headline-grabbing claims.
Eager not to let Trump take any credit for the decision not to invest in extra capacity in Mexico, Ford cited cost savings of $500 million as the reason to change its mind and build the next gen Focus at its existing plant in Hermosillo, Mexico instead of investing in the new plant in San Luis Potosi. Now there’s a new CEO at the helm at Ford and plans have changed again: Mexican production is off the table altogether. Again, cost savings of another $500 million are quoted as the reason for the shift of production across the Pacific. These plans were already in the making under Mark Fields, but it was the new boss Jim Hackett who eventually pulled the trigger. [Read more…]
In the first quarter of 2017, worldwide sales of passenger cars and light commercial vehicles increased almost 5%, according to JATO Dynamics figures, based on their data of 52 markets. Almost a million additional vehicle sales (+962.000) compared to the first quarter of 2016 make for a new total of 21,24 million global sales. Disclaimer: this total excludes some major markets like Iran, the Middle East, Magreb, Pakistan, Philippines and a few South American countries. Still, this should give a reasonably accurate picture of the global car market this year.
In terms of manufacturers, Renault-Nissan is the big winner at the top, entering the top-3 thanks to a 10,4% increase and reaching within a spitting distance (just 1.500 units) of Toyota (+7,8%). Keep in mind that Renault is relatively strong in Iran and the Magreb countries, while Toyota is dominant in the Middle East and Philippines, so even accounting for those markets the gap between the two companies will be small. Volkswagen still leads despite growing slower than the industry at just +1,7%. GM is down to fourth due to the sale of its European unit Opel/Vauxhall to PSA. [Read more…]
In a somewhat surprising move Ford has ousted CEO Mark Fields after only three years, a period in which he oversaw the company losing 40% of its market value and being overtaken by Tesla in market capitalization terms. His replacement, Jim Hackett, comes from within Ford and has recently headed Ford’s Smart Mobility division, in charge of developing the blue oval’s autonomous car technology and ride-sharing business models.
March 2017 was a record month for European car sales, with 1,92 million units it was only 100.000 sales behind China, the world’s largest single car market. Helped by strong UK volume, March is traditionally the biggest selling month of the year, with about 11,5% of full year sales, so records are usually set this month. If the market as a whole sets a new volume record, a number of individual brands are naturally bound to do the same. And indeed, no less than 26 brands break their monthly volume record, which is half of all the brands currently on sale. I guess that may be a record by itself, although I didn’t check it. Especially luxury and exotic brands had a blockbuster month, with 17 record breakers out of 24 brands, compared to 9 new sales records out of 28 mainstream brands. [Read more…]
President Donald Trump has offended the Mexicans in more than one way, and building even a virtual wall between the US and Mexico will affect trade between the two powers in a negative way, which would greatly affect the automotive industry, perhaps more than any other. Thanks to the North American Free Trade Agreement, a great number of carmakers have set up manufacturing facilities south of the Rio Grande to benefit from more than just lower wages to produce their lowest-margin vehicles. Any disturbance in the free trade agreement, most likely import duties, would increase costs for these manufacturers and have a negative impact on consumer prices in the US. Ford has already withdrawn plans to build a new US$1.6 billion plant in central Mexico’s San Luis Potosi in January in favor of a US$700 million upgrade to its Flat Rock, Michigan plant and others may think twice before becoming the target of one of Trump’s Twitter rages. However, as the US is shunning Mexico, the Chinese are more than happy to step in and invest in the growing market.
The success of Mexico
But first we need to look at what made Mexico such a phenomenal automotive production hub, and why automakers from outside North America have invested more than US$13.3 billion in Mexico since 2010, which is more than half of the US$24 billion invested in total. Ironically, Mexico’s low wages make up only a small portion of the explanation, as the biggest reason to build in Mexico is that the country has freer trade with the rest of the world than the US does: Mexican-made cars can be exported duty-free to 44 countries compared to just 20 for US-made cars, which make up only 9% of global car sales. [Read more…]
This week it became apparent that PSA Peugeot-Citroën and General Motors are having talks about the possible takeover of GM’s European division by the French automaker. This includes the Opel and Vauxhall brands, which have been a decade-long money drain on General Motors. The two automakers have been working together closely on the development of a handful of models and are looking for opportunities to boost each company’s profitability, which includes a sale of the two brands. GM has had a stake in PSA until 2013 when it became apparent that projected savings from their cooperation and platform sharing would fall short of expectations. After this breakup, the French company had to be bailed out by the French government and its Chinese partner Dongfeng Motor, which each control 14% of the shares.
Would a new, more intense cooperation bring the promised synergies? And does this mark the start of a much-needed wave of consolidations in the European car market? Or will it only cause PSA to lose focus on its own financial recovery and resurrection of its brands? Let’s look a the pros and cons for both parties involved:
With production of the Chrysler 200 midsized sedan set to end next December, the illustrious brand will be down to just two models: the now almost elderly 300 large sedan, which shares its platform with the Dodge Charger and Challenger, and the brand new minivan Pacifica. That means the two namesake brands of Fiat Chrysler Automobiles are also its weakest volume brands in the North American market. And considering Chrysler cars are sold almost exclusively in the US and Canada, the brand doesn’t seem all that relevant anymore. That’s unfortunate for a brand which used to be one of America’s most innovative brands with a number of important technological breakthroughs to its name and which of course is credited with the creation of the minivan. However, for the past decades Chrysler has let its image crumble by selling mediocre cars and ongoing financial uncertainty under multiple owners as it has gone through a number of (near-)bankruptcies.