Daimler tries again: Daimler, which got egg on its face when it combined with Chrysler, says it will be much more conservative in its pact with the Renault Nissan Alliance. This time the deal is sealed with a 3,1 per cent share swop rather than a full merger.
Last time Daimler’s market worth slid more than $12,6-billion in the nine years before the merger was dismantled while the value of its arch-rival, BMW, more than doubled. During this time Daimler also sold off its stake in Hyundai and disposed of the Mitsubishi car division (it kept Mitsubishi Fuso truck and bus).
Now it needs a partner to boost its small car operations in response to regulatory cuts in carbon-dioxide emissions. The Renault Nissan Alliance had tried unsuccessfully to tie up with General Motors in 2006.
Daimler executives say they cannot afford to fail in this latest joint small car venture and Carlos Ghosn knows the benefit of linking up with a premium automotive brand so it is a case of very willing partners. Combined sales volume will lift this new alliance into third place behind Volkswagen and Toyota.
Wesbank and Imperial join forces: Vehicle and asset finance house, Wesbank, has formed a new business with automotive and logistics group Imperial, to be known as Imperial Fleet management.
The new company will cover everything from full maintenance rental to managed maintenance. It will also offer customers added value products such as roadside assistance and fuel cards to accident management.
BMW will not shackle dealers: BMW has agreed that it will not enforce any policy that prevents its motorcycle dealers from giving discounts on motorcycles and accessories to their customers. This follows a settlement agreement between the company and the Competition Tribunal.
Diesel tax could change: The favourable taxation structure on diesel fuel in Europe could change due to the strong demand for this product while petrol is now plentiful, resulting in an imbalance for refiners.
However, it seems any change in taxation would take about 15 years to have a marked effect due to the slow rate of vehicle replacement.
MBSA buses for Africa: Mercedes-Benz SA will expand sales of its buses to include all RHD markets in southern Africa, as well as Tanzania, Kenya and Uganda. This means that buses for these markets that were previously sourced from Brazil and Germany will now be assembled in East London by MBSA.
This development is expected to add about 100 extra buses a year to MBSA sales. MBSA will also be responsible for after sales service and parts supply in these countries.
BMW reports 2009 loss: Nett income at BMW fell 36 per cent to R2,1-billion because of lower demand for its cars and motorcycles. Group production for the year decreased by 13 per cent to 1.23-million cars. This resulted in a full year operating loss of R2.7-billion measured as earnings before interest and tax.
Call for pressure on fuel industry: Mercedes-Benz SA president and CEO, Dr Hansgeorg Niefer says he has difficulty understanding why there is not more pressure being exerted on fuel companies to produce cleaner diesel and petrol in SA. Stopping short of blaming the government he said the fuel companies would not invest in cleaner fuel is they were not “forced.”
He said cleaner fuels would allow the introduction of new technology engines that emitted far lower noxious emissions.
Niefer said SA fuel companies had indicated that 50 parts per million (ppm) sulphur diesel would only be available six years from now In Europe and the US the level is already 1 ppm, which would only be available in SA in 2010.
He added that emerging countries such as China, Brazil and India already worked to Euro IV standards while in SA the country had only just moved to Euro II.
Used car conundrum: The chief executive of Transunion, Mike van Höne, says a shortage of quality used cars is driving up new car sales, while the MD of Burchmore’s auction house, Darryl Jacobson, said he expects the used car market to remain strong because of the affordability crisis for many buyers who cannot afford a new car.
The Transunion boss said he believed there would be stronger used car sales is quality stock was out there and said the ratio between the sales of new and used cars was continuing to fall, going from 2.4 used to one new in June to 1.83:1 in January..
Standards (“fit for purpose”) for taxis are now going to become the responsibility of the stakeholders of this huge industry if SANTACO has its way. A workshop is being planned by Taxi Choice, the business arm of the national taxi body, with vehicle manufacturers, importers and body builders to consider this aspect of SA’s major transport operation. The new business plan is based on four principles: verification and risk reduction, reduction processes, sales and marketing and the selection of preferred partners.
Motor firms are fighting Transnet over port tariffs that they say is putting extra cost into automotive exports and making SA exporters less competitive with other countries in the world. For instance, it is claimed that Chinese port charges are 10 per cent of those in SA. Dr. Norman Lamprecht, of Naamsa, says these charges could severely harm the local motor industries plans to produce 1.2-million vehicles a year locally by 2020, as many would have to be exported.
Naamsa has set up a supply chain working group to investigate the situation, while Transnet has established a dedicated automotive team which could consider such claims.
Meanwhile Maputo Harbour, where Grindrod has a majority share in the car terminal, is readying itself to become a vehicle exporter in competition to SA ports. Current annual capacity is 52 000 cars, but this can be lifted to 250 000 cars a year. Some OEMs, including Tshwane-based BMW and Nissan have run trial shipments from Maputo.
Best Engines: BMW collected four class awards out of eight in the 2010 International Engine of the Year competition which was held at the Engine Expo trade fair in Stuttgart last week. Volkswagen had the overall winner with its 1.4-litre Twincharger FSI (for the second year), while Audi’s 2.5 FSI used in the Audi TT RS won the 2-2.5-litre capacity class. The Mercedes-Benz 6,2-litre AMG power unit came out top in the category for performance engines over 4-litres and the 1-litre Toyota engine used in the Yaris was best in the small capacity class. BMW’s winning engines were the V8 fitted to the M3, its in-line petrol 6-cylinder with TwinPower Turbo, its 4-cylinder diesel with TwinPower Turbo and the 4-cylinder Twin Scroll Turbo used in the MINI Cooper S.
Who needs a partner? The Korean Hyundai-Kia Automotive Group, which is presently the fourth largest motor manufacturer in the world, intends to “go it alone” instead of looking for a partner as is the case with many established makers at this time. Hyundai is considering opening a second factory in the US and has decided to pursue the “green vehicle” path rather than build a range of high performance cars, which had been an option
.
Toyota targeted again: Toyota Motor Corporation, which has had a torrid time in the US with its multi-million vehicle recall campaigns – another one involving a further 17 000 cars has just surfaced – is now being targeted by the new chief of the United Auto Workers (UAW) trade union, Bob King. Toyota, like all the motor manufacturers in the US other than GM, Ford and Chrysler, operates with in-house unions and is not affiliated to the powerful UAW.
What has really upset the UAW is that Toyota has sold the former NUMMI joint venture, unionised plant it has operated with General Motors for many years in Fremont California and is moving Corolla production to Mississippi.
Among the tactics being considered by the UAW is staging nationwide protests at Toyota dealers, while the US union is also looking at supporting strikes by auto workers in developing countries such as China and India, where there have been stoppages at component makers recently.
Blow for Volkswagen: Volkswagen’s plans to grow its sales in the US substantially have been dealt a blow by its senior executive in the US, Stefan Jacoby, being courted to head up Volvo Cars which has been acquired from Ford by China’s Zhejiang Geely Holding Group.
Jacoby has been spearheading VW’s projects to boost sales in the US, to make best use of an expensive new factory in that country and to overcome nagging quality problems.
Jacoby (52) has headed the German company’s US operations since 2007. Its ambitions in this huge market include growing annual sales from the current rate of just over 200 000 units (mainly Jettas) to 450 000 in 2012 and to 800 000 in 2018. To this end it is designing a unique medium-sized car for the US market.
Audi holds off: Meanwhile VW’s luxury car division, Audi, has put on ice its option of manufacturing its cars in the US because of the euro’s recent slide against the dollar. Audi says the lack of a US factory will also not affect its plans to produce 1.5-million cars a year by 2015 at the latest. It says the plans to double its sales volume in the US by 2018 remain unchanged. (This is the year when the multi-brand Volkswagen Group intends overtaking Toyota as the world’s largest motor manufacturer).
“Lagging in empowerment”. The South African motor industry is “lagging in empowerment” according to the deputy president of SA, Kgale Motlanthe. Speaking at the opening of a new Volkswagen SA parts distribution centre in Centurion, Gauteng, he referred to a comprehensive study of corporate strategy and industrial development that was conducted by a research unit based at the University of the Witwatersrand.
The deputy president said that the study had revealed that only 1 per cent of the businesses in the metals and engineering sectors, including the automotive industry, were black owned. He added that the study also revealed a “disturbing trend” in the demographics of the industry at top management level in terms of both race and gender and said the “not enough is being spent on training workers in critical or core skills.”
Good taste? China, which is now the biggest car market in n the world, is taking over from the US as the dictator of taste in terms of design and features, whereas the US has been the major influencer since the founding of the automotive industry.
The Chinese evidently like roomy back seats high tech amenities such as i-Pod jacks and video screens, conservative colour schemes, lots of chrome, extended wheelbases and any car that exudes an aura of grandeur.
“Chinese tastes are influenced by jade sculpture, calligraphy and lots of art dating back centuries,” said GM global design chief Ed Welburn at the recent Beijing Motor Show.
Asians slipping: Honda and Toyota are still the highest rated motor manufacturers by component suppliers in the US, but they no longer hold the Japanese makers in the same stratospheric regard as in the past.
Compared to the 2007 ratings, Honda has overtaken Toyota at the top of the pile, while Nissan has slipped from third to fourth. Ford’s relationship with its suppliers is soaring and it has jumped from sixth to third. GM is still in fifth, but Chrysler has improved from sixth to fourth. Survey scores rose for the Detroit Big 3, while those of the three Japanese companies fell in the past three years.
Ford now top auto brand in US. Ford has been rated top among automotive brands in terms of American consumer perception according to recent market research. Toyota, with its multi-million vehicle recalls, took a huge fall in Brandindex’s survey of 5 000 consumers, but is starting to recover.
The top 10 rankings were:
1. Ford 40 points
2. Chevrolet 22
3. Honda 20
4. BMW 19
5. Volkswagen 18
6. Mercedes-Benz 15
7. Cadillac 14
8. Nissan 13
9. Hyundai 12
10. Buick 11
Toyota did not feature in these June rankings as its score was minus 14, but this is much better than the minus 50 ranking it had in February.
