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Honda First to Blink as Chinese Market Slows Down

Japanese maker delaying construction of $822 mil plant; others could follow.

by on Oct.23, 2015

Honda put the brakes on construction of a proposed plant with Wuhan, which already makes the CR-V in China, due to the sluggish market there.

Automakers from around the world have been flooding the Chinese market with new products – and the plants to build them. But with the long boom in Chinese auto sales suddenly running out of momentum, automakers may be rethinking their investment options.

Honda certainly has. The Japanese maker says it will delay construction of an $822 million assembly plant it was planning to build in Wuhan – which would have been its third factory run in partnership with China’s domestic maker, Dongfeng Motor Group.

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For now, Honda still intends to eventually go ahead with the plant, but even a temporary delay comes as a sign that the industry is questioning assumptions about just how big the market will grow – and how soon. (more…)

BMW Profits Fall as China Auto Sales Soften

Luxury marque hit by weakening market.

by on Aug.04, 2015

BMW's quarterly earnings took a hit as auto sales in China have slowed.

BMW AG, which had enjoyed rapid growth in China in recent years, demonstrated the potential down side of its Chinese partnerships as earnings dropped during the April to June quarter as the Chinese automotive market began to weaken.

“There have been increasing signs of more moderate growth in the Chinese auto market for several months now,” noted Friedrich Eichiner, BMW’s finance chief.

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“The market is normalizing faster than originally forecast. The second quarter saw increased competition across the industry – while the volatility of the Chinese stock market has also weakened consumer confidence,” he said. (more…)

Chinese Car Sales Slow

Will that encourage Chinese automakers to shift focus to the U.S.?

by on Oct.15, 2014

A Chinese ad for the stretched Volvo S60L represents a possible change in how makers are dealing with slowing Chinese auto sales.

China’s once red-hot automotive market appears to be cooling down along with the rest of the Asian nation’s economy – and that could create some serious headaches for manufacturers who have committed billions of dollars in investments for new products and the plants needed to build them.

The slowdown raises the possibility that after long focusing on the booming domestic market, automakers might now need to shift focus to exporting cars to Europe and the U.S. to keep their factories running at full speed. Some observers are speculating that might be one of the reasons why investment guru Warren Buffett has purchased one of the largest auto dealer networks in the U.S.

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The slowdown in China nonetheless needs to be put into perspective. While the pace of growth has slowed substantially from the days when sales soared by as much as 100% annually, China’s car market is still the world’s largest and is growing at roughly the same rate as the U.S. automotive recovery. (more…)

GM, Ford Vehicle Sales Blazing in China

Makers posted record results for first six months.

by on Jul.08, 2014

With cars like the Focus selling well, Ford set a sales record for the first six months in China this year.

General Motors, Ford and their joint venture partners posted record sales in China for the first half of the 2014, capping off the period with a strong showing in June.

GM’s sales in China in the first six months increased 10.5% from last year’s previous record for the period to 1.73 million units. In June, GM’s sales increased 9.1%. Ford China reported a 35% increase for the first six months of 2014, selling 549,256 vehicles. Ford China’s June sales increased 17%, the automaker reported.

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“GM has experienced growth in demand for our products across China this year, especially at the higher end of our lineup and in the SUV/MPV segment,” said Matt Tsien, GM executive vice president and president of GM China. “We anticipate sales remaining strong through the end of 2014, as more people – particularly outside China’s major cities – become first-time vehicle buyers.” (more…)

China Echoes US, January Sales Taking a Tumble

But the market is still growing at an enviable rate.

by on Feb.13, 2014

Ford CEO Alan Mulally has reason to be happy: sales are up in China, unlike many of Ford's competitors.

Late to market, Ford Motor Co. has been racing to catch up with its competitors in China. The maker got a solid boost there last month, sales surging by 53% year-over-year.

But Ford is one of the few makers to be celebrating. After more than a decade of massive growth that has transformed China into the world’s largest automotive market, demand has been sputtering in recent months, and January sales clearly reflected the overall economic slowdown plaguing the country.

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That said, even at a mere 7% increase compared to January 2013, Chinese car sales still managed to maintain at least some momentum – in sharp contrast to the U.S. where demand last month showed a worrisome setback after the booming pace set in 2013. (more…)

Volkswagen Wrests China Sales Crown from GM

German maker takes title by about 30,000 units.

by on Jan.10, 2014

VW toppled GM from the top of the sales mountain top in China this year by 30,000 units.

Volkswagen AG reached one of its major goals in 2013, selling more cars than any foreign automaker in China. In capturing the title, it outsold General Motors for the first time in eight years in China.

Volkswagen’s two joint ventures sold more than 3.19 million units for the year, the government-backed China Association of Automobile Manufacturers reported. The victory was narrow as GM sold 3.16 million units as sales of new vehicle topped 20 million units overall for the first time. VW’s victory in China also served to offset the company’s disappointment in the U.S. where its sales dropped.

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The duel between GM and VW is expected to resume this year as both companies are expecting more growth in 2014. (more…)

Automakers Use China’s Desire for Western Brands to Grow Sales

New book outlines country’s development and relationship with auto industry.

by on Oct.25, 2013

China is the world's largest automotive market and an economic force due to the auto industry.

The Volkswagen Group began construction on its 16th plant in China, while a strong showing in China during the third quarter also bolstered Ford and Daimler AG earnings and outlook for the future in the eyes of many financial analysts.

“This new, state-of-the-art factory is further proof of the Volkswagen Group’s comprehensive commitment in China,” said VW Chief Executive Officer Martin Winterkorn, who noted the new plant will be able to build more than 300,000 vehicles annually. “Here in Ningbo and together with our partners, our pioneering spirit is once again driving economic and technical progress in the Chinese automotive industry.

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“We are working hard to offer our customers in China the best vehicles and most efficient technologies – engineered and made in China. For our Group brands, the Ningbo plant also gives new momentum to tapping the full potential of the huge market south and west of Shanghai.” (more…)

Ford Racing to Catch Up in China and Other Asian Markets

Detroit’s second-largest maker wants to be one of Asia’s Big Three.

by on Oct.09, 2013

David Schoch, (r), president of Ford's Asia/Pacific operations, with CEO Alan Mulally and Joginder Singh, head of Ford India, during a news conference announcing export plans from Ford India.

Ford Motor Co. is racing to make up for lost time after getting off to a late start in the booming Chinese market. And with demand surging 51% since the beginning of the year, the Detroit maker is rapidly expanding both its product line-up and production capacity in a bid to catch up with key competitors like General Motors and Volkswagen AG.

Ford still has a long way to go.  While it was an early participant in other markets in the Asia/Pacific region, it initially steered clear of China – which is expected to see sales of 17 million vehicles this year and as many as 32 million by 2020, according to consensus forecasts. As a result, it lags way behind market leaders in terms of both sales and capacity.

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But the president of the Asia/Pacific region, Ford veteran David Schoch notes that the maker is clearly heading in the right direction. It turned a 2012 loss into a $183 million profit for the first half of this year, and says Schoch, “by mid-decade I do expected Asia/Pacific to be a major contributor to Ford’s (total) profits.”


Chinese Market Defies Gravity

China already bigger than U.S. and the market's still growing.

by on Nov.02, 2009

Workers at a Volkswagen plant, in Shanghai, struggle to keep up with a market that barely felt the impact of the global economic meltdown.

Workers at a Volkswagen plant, in Shanghai, struggle to keep up with a market that barely felt the impact of the global economic meltdown.

U.S. sales numbers for October are due out, starting today, and initial indications suggest it could be one of the first reasonably good months – without federal assistance from the Clunkers program – since the economy began its meltdown.

But while the American market is expected to struggle for some time to come, it’s a very different story, halfway ‘round the world.  China already has surged to the global sales lead, surpassing the States as the globe’s single-biggest national car market.  And, if anything, demand is only growing.

Sales for the first nine months of 2009 have exceeded all of 2008, according to the latest analysis by J.D. Power and Associates, and there is little likelihood momentum will slip in the final months of the year.

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Where even a single-digit gain is big news in the States, September sales, in China, were up an astounding 75%, to 1.26 million.  On an annualized basis, that averages out to 14.9 million vehicles.  And if the growth rate continues, it’s very possible the Chinese market could soon match the best-ever, 17-million numbers set in the U.S. earlier this decade.  A far greater share, however, is made up of commercial vehicles, than in the States.  Power is predicting that on the passenger vehicle side, sales next year will jump 4.6%, to 8.8 million, and that’s expected to reach 12 million by 2016.