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Despite Downturn China’s Economy Still Strong

Current growth rate near sweet spot of expansion.

by on Oct.21, 2014

Fan Gang, director, National Economic Research Institute, suggested China's economy will be strong for several years.

Despite the fact that China’s economy isn’t living up to predictions this year, the overall picture for the country is bright even as it faces significant challenges to its growth, one of China’s leading economists posited yesterday at the Global Automotive Forum in Wuhan, China.

Fan Gang, director, National Economic Research Institute, suggested China’s economy will grow at a slightly slower pace, 7.3% rather than the 7.5% rate projected by the central government at the beginning of the year. However, a growth rate of between 7% and 8% is more manageable and more sustainable for what is now the world’s second-largest economy behind the United States’.

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In fact, a hotter rate of growth would be problematic, Fan said. If the economy grew faster than 9%, inflation would become a problem for the country as a whole, while a growth rate of better than 10% could create an “asset bubble” either in real estate or elsewhere in the economy. (more…)

China Killing 6 Million Old Cars to Cut Smog

Large cities enveloped in perpetual health-threatening haze.

by on May.27, 2014

The Chinese government plans to remove 6 million vehicles from the country's fleet to alleviate some of the country's pollution problem.

During the Beijing Olympics in 2008, the world was exposed to the crippling smog that residents of the city are exposed to on a daily basis. In fact, it’s not uncommon to see Beijing residents wearing masks to ward off the effects of what’s floating around in their air.

The rest of the country faces similar environmental issues and after years of posturing, the government is taking action to mitigate the problem.

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It’s taking 6 million older vehicles off the roads this year in an attempt to offset the problem, although it hasn’t provided the plans yet for doing so. (more…)

VW Emerging as Sales Leader in China over GM in 2013

Ford making big strides to gain sales, passes Toyota.

by on Dec.26, 2013

VW appears to have wrested the sales crown away from General Motors in China this year.

In what has been a fierce battle for sales supremacy in China, it appears that Volkswagen is going to emerge victorious over General Motors for the first time in nine years.

The two automakers, which have announced ambitious investment plans for the country, have been running neck-and-neck all year. VW hit the 3-million vehicle mark in early December with GM eclipsing the mark shortly thereafter.

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Volkswagen plans to invest $24.6 billion through 2018 to expand in China. In the first 11 months of this year, the automaker boosted sales by 17% to 2.96 million vehicles, according to Bloomberg News. VW accounts for nearly 80% of the vehicles sold, but the numbers also include Skoda, Audi, Porsche, Bentley, Lamborghini and Seat. (more…)

Volkswagen Likely Bringing Budget Brand to China in 2014

Maker working on cost while ensuring safety of vehicle.

by on Nov.26, 2013

VW's Martin Winterkorn said earlier this year the company plans to have a budget brand for China.

Volkswagen looks to have its “budget” brand ready to roll next year in China with other markets possibly getting variants of the vehicles.

The German maker recently reiterated its plans to bring a lower-cost, localized brand to China: a strategy similar to other foreign automakers in the country.

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During the North American International Auto Show in January CEO Martin Winterkorn said VW would be ready to make its intentions known by the end of the year, but VW brand development boss Dr. Heinz-Jakob Neusser has said in recent reports that the company is still doing its homework in a budget lineup for China. (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…)

Milestones: Shanghai Volkswagen Builds 5 Million

Volkswagen Group’s first Chinese joint venture is 25 years old.

by on Oct.19, 2009


VW has long been the market leader in China since the Communist party chose it to help set up First Auto Works as the supplier of government vehicles.

The five millionth vehicle produced by Shanghai Volkswagen (SVW) left the assembly line late last week. The occasion also marked the 25th anniversary of the Volkswagen Group’s first German-Chinese joint venture. Established in October 1984, Shanghai Volkswagen was one of the first joint ventures to be set up as China opened its economy.

Together with FAW-Volkswagen in Changchun, the second joint venture, VW Group has delivered more than eight million vehicles from the Volkswagen, Audi and Škoda brands in China. China is now VW’s largest market, and the largest auto market in the world.

Between 2009 and 2011, VW will invest in a total of €4 billion in the world’s largest automotive market to introduce new vehicles and expand its production capacities in China. The expansion will be financed from the cash flow of VW Group’s Chinese joint-venture companies, which are required by Chinese industrial policies.

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The U.S. remains the only industrialized nation in the world without an industrial policy to protect wealth by creating and protecting manufacturing industries, as job losses continue and unemployment reaches highs not seen since the Great Depression.


Ferrari 599 GTB Fiorano, China Limited Edition

World’s biggest car market gets a unique car from Modena.

by on Oct.09, 2009


A “cracked”glaze pattern is colored with clearly defined cracks etched at different depths.

Ferrari will auction a unique one-off 599 GTB Fiorano China Limited Edition, signed by Chinese artist Lu Hao, on the third of November. The super car will appear at a ” Gala Auction Event” hosted by Ferrari in Beijing.

This car follows the Italian sports car maker’s announcement last month of a small series of specially-designed 599 GTB Fiorano China Limited Edition models.

The one-off incorporates a number of the features of the China Limited Edition cars, a very limited series of less than a dozen cars finished in two-tone Rosso Fuoco” (fire red) with silver roof and characterized by unique Chinese design elements.

The company claims that this model represents an even more exclusive version, thanks to a very special exterior finish, which draws inspiration from Ge Kiln porcelain of the Song Dynasty.


GM Creates a Science Lab in China

It’s the first major lab established by a global automaker.

by on Sep.29, 2009


Mega-city safety research is on the agenda.

General Motors Company has established a China Science Lab in Shanghai. The “unique” facility will carry out research projects in a number of automotive-related fields for General Motors.

GM claims the first major science lab established by a global automaker in China will contribute to technological innovation, both domestically and on a worldwide basis.

China is the largest auto market in the world, and General Motors is now, arguably, a more successful company in China than in its home market where share continues to decline.

“Our vision for the China Science Lab is to be recognized as a world-class R&D organization that will help drive GM’s automotive business into the future,” said Alan Taub, GM’s new Vice President of Global Research and Development.

“Our aim is to develop breakthrough technologies that will differentiate GM vehicles in the marketplace and build on GM’s long history of industry firsts. The China Science Lab’s opening demonstrates that GM is moving aggressively to maintain leadership in breakthrough technological research globally,” Taub said.

China News!

China News!

GM says the China Science Lab’s initial concentration will be on research related to advanced propulsion technology and joining technology. The China Science Lab will also focus on battery cells, mega-city safety research, advanced vehicle development, and light materials.


GM Unlikely To Reach Deal with Bondholders before the Dept for Equity Swap Deadline

Bankruptcy closer to reality for a second U.S. automaker.

by on May.19, 2009

President Barack Obama and President Barack Obama shakes hands with GM President Fritz Henderson, AP Photo/Charles Dharapak

The dispute over GM exporting jobs is shaping up to become a major political headache for the Obama Administration, with its claims to be promoting policies that will create American jobs.

General Motors Corporation late today filed a prospectus supplement with the Securities and Exchange Commission about its exchange offers for $27 billion of its unsecured public notes and the related consent solicitations that began on April 27, 2009.

In plain English, the filed supplement says that as of today GM has not reached agreements with its bondholders about a debt-for-equity swap — and it is unlikely to do so before the midnight May 26, 2009 expiration date.

Since the swap is a key element in its revised “viability plan” bankruptcy appears certain. The bondholder deal is necessary to obtain the agreement of the U.S. Treasury Department for further financing. It is also needed for the United Auto Workers Union and the VEBA-settlement class representative to accept GM stock for cash payments due. Bondholders, as they did in the case of the now bankrupt Chrysler LLC, are not cooperating. And the UAW is taking a hard line over other aspects of the plan.

Ron Gettelfinger, president of the UAW, spent the afternoon at the U.S. Treasury Department in Washington, D.C. While not commenting directly on what the issues concerning the union are, Gettelfinger went public over the weekend with at least one of them by releasing a letter to members of Congress that complained about the doubling of imports by GM from non-union and restricted-trade countries in Asia. The union wants job guarantees as part of the fragile, controversial deal Treasury is trying to put together to save GM.

Alan Reuther, UAW Legislative Director, wrote Congress that “As the discussions continue concerning the restructuring of General Motors, the UAW wishes to restate our strong opposition to the company’s plan to close 16 manufacturing facilities in the United States, while at the same time dramatically increasing the number of vehicles it will be importing from Mexico, Korea, Japan and China for sale in this country. We urge Members of Congress to join with the UAW in urging the Obama administration to insist, as part of any further government assistance, that GM should be required to maintain the maximum number of jobs in the U.S., instead of outsourcing more production to these other countries.”    (more…)

UAW Strongly Objects to GM’s U.S. Factory Closings

Negotiation deadlock spills over into public lobbying by union.

by on May.18, 2009

Kevin Melton, UAW Local 602, courtesy UAW

The implication is the Auto Task Force has told the union the closings will proceed.

With the 31 May deadline approaching for GM’s revised plan, the United Autoworkers Union on Friday sent a letter to members of the U.S. Congress objecting to the centerpiece of GM’s Viability plan – closing 16 plants in the U.S. and importing vehicles from low-wage, non-unionized countries.

The factory closings are not new, they have been in various versions of the plan since GM went to the U.S. government for bridge loans late, last year, but in bringing the argument over the closings public, the union is attempting to prevent some of them through political pressure after apparently being shut down at the bargaining table. The implication is that the Auto Task Force has told the union that the closings will proceed.

Alan Reuther, UAW Legislative Director, wrote Congress that “As the discussions continue concerning the restructuring of General Motors, the UAW wishes to restate our strong opposition to the company’s plan to close 16 manufacturing facilities in the United States, while at the same time dramatically increasing the number of vehicles it will be importing from Mexico, Korea, Japan and China for sale in this country. We urge Members of Congress to join with the UAW in urging the Obama administration to insist, as part of any further government assistance, that GM should be required to maintain the maximum number of jobs in the U.S., instead of outsourcing more production to these other countries.”

The Chrysler restructuring plan now being worked out in bankruptcy court in New York City also closes U.S. factories and turns the company over to off-shore based Fiat. The factory closings, though, are smaller in number and the small cars and engines that will be supplied by Fiat will be built in the U.S., Canada or Mexico. Furthermore, by getting access to Fiat’s overseas distribution system, exports of Canadian or U.S. made vehicles could increase, preserving or creating UAW jobs.

Subscribe to TheDetroitBureau.comThe core issue the union is raising – U.S. jobs — is an aspect of industrial policy debates that politicians from both the Democratic and Republican parties have ducked for decades. With unemployment at record levels and increasing, our lack of industrial policy is glaringly obvious. Every major nation in the world has policies, laws, tariffs and non-tariff regulations that protect jobs and encourage the export of goods and services into the large, profitable and unrestricted U.S. market.   

U.S. employment continued to decline in April as another 539,000 jobs evaporated to total 13.7 million out of work people, and the unemployment rate rose from 8.5% to 8.9%, according to the Bureau of Labor Statistics. Since the recession began in December 2007, 5.7 million jobs have been lost. In April, job losses were large and widespread across nearly all major private-sector industries. Overall, private-sector employment fell by 611,000. Over the past 12 months, the number of unemployed persons has risen by 6.0 million, and the unemployment rate has grown by 3.9 percentage points.