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Posts Tagged ‘Great Recession’

Motor City Gains an Edge on Silicon Valley

Detroit evolving from Rust Belt relic to high-tech hub.

by on Sep.22, 2016

As the Detroit automakers rebound, so too is the city, region and other business. Many, like FCA, are re-establishing a presence in the city.

Like the city that helped give it life, Detroit’s auto industry is often seen as a Rust Belt relic, a perception underscored by moves by manufacturers like Ford, which is rapidly expanding its new tech center in Silicon Valley.

But just as the Motor City itself begins to revive after decades of disinvestment and so-called “white flight,” so is the local auto industry gaining new momentum. But it’s not just the traditional Detroit Big Three bouncing back after the Great Recession. The Southeast Michigan region is seeing a flood of new investment from traditional foreign rivals such as Toyota and Nissan, as well as from new, high-tech players including Uber and Google.

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“What we’re realizing is there is a huge critical mass of talent in the Detroit area,” said Sherif Marakby, a long-time Ford veteran who joined Uber as its head of vehicle development earlier this year. At a news conference in the suburb of Novi, he announced this week plans to build a new autonomous vehicle development facility in the region. (more…)

Ford Will Build a Second Engine Plant in China

Chinese industrial policy prompts $500 million JV reinvestment.

by on Sep.27, 2010

Reinvesting in China is mandated by an industrial policy that in practice requires it .

Ford Motor Company and its government dictated partners are building new engine plant in China that is due to open in 2013. With the additional capacity of 400,000 units at the new facility, Ford’s joint venture, Changan Ford Mazda Automobile Ltd (CFMA), is more than doubling its existing engine capacity of 350,000, to 750,000 engines annually.

Ford Motor Company CFO Lewis Booth joined Chongqing Mayor Huang Qifan, Chongqing New North Zone Administrative Committee Director Xiong Xue, Chongqing Changan Automobile Company chairman Xu Liuping, as well as Ford China chairman and CEO Robert J. Graziano in Chongqing at an official signing ceremony over the weekend.

China is now by far the world’s largest auto market, and Chinese industrial policy in effect requires that all profits earned there are reinvested in the country and its local partners. The U.S. remains alone among industrialized nations – with elected or totalitarian governments – without any such job and investment protecting policy.

The $500 million (RMB 3.4 billion) investment will be funded entirely by CFMA and will be located in Chongqing’s so called New North Zone.


Commercial Vehicle Registrations Hit Record Levels

A slight revival of new fleet sales creates a used truck bonanza.

by on Sep.01, 2010

In the commercial truck market, the sales have shifted to used vehicles.

There were 354,400 used commercial vehicles registered in the U.S. during the first two quarters of 2010. This is a new record for previously owned commercial vehicle registrations in the period, and up more than 28% during the same, depressed, time last year.

The used trucks – Gross Vehicle Weight classes 3 to 8 – represent almost 68% of the total commercial vehicle market.

“The significant increase in used vehicle registrations so far this year is indicative of an uptick in the industry with the changeover of the commercial fleet,” said Gary Meteer, director, sales and client services, at R. L. Polk & Company, which compiles such statistics.

The trend, if it holds, should eventually bode well for the economy as combined registrations for all commercial vehicles in the first half of 2010 were 524,700, representing a 19% increase over the same period last year. New commercial vehicle registrations saw just a slight increase of 3.1% during the period, though, reflecting the reluctance of businesses to invest in the faltering U.S. economy, and  concentrating instead on cost cutting and layoffs during the ongoing Great Recession.

Data Driven!

“Large fleet owners and operators are upgrading to new vehicles, and therefore the smaller fleet companies and independent owner-operators have great opportunities to find available clean used equipment,” Meteer claimed.


U.S. Retail Sales Roller Coaster? July Up Slightly

July new-vehicle sales predicted to rebound from a weak June.

by on Jul.22, 2010

Uncertainty prevails as the economy remains in the doldrums with high levels of unemployment.

Well, fasten your seat belt – after two months of declining auto sales in the struggling U.S. auto market, it’s now predicted that new-vehicle retail sales will bounce back in July.

New-vehicle sales are expected to come in at 928,000 units this July, according to J.D. Power and Associates, which tracks actual dealer sales on a daily basis.

This makes for a seasonally adjusted annualized rate (SAAR) of 9.4 million retail units, a significant increase from June’s rate of 8.4 million units.

However, this is still far, far below the pre-financial-disaster boom years of more than 15 million annually.  (See Oops! U.S. June Auto Sales Down Further)

Year-over year comparisons are difficult this month. Even though July’s SAAR selling rate is also up from the 8.9 million units posted in July 2009, last year the “Cash for Clunkers” program, aka CARS, kicked in.


“Consumers appear to be responding to the slight increase in visible incentive spending, which is expected this time of year during typical model-year sell downs,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates.


VW Signs Contracts for another Chinese Plant

Another 300,000 vehicles annually from Eastern China.

by on Jul.16, 2010

The biggest maker in China plans to get bigger.

The Volkswagen Group will build a new vehicle production plant in Jiangsu Province, China. The contracts were signed today by Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft, and Dr. Winfried Vahland, President and CEO of Volkswagen Group China, together with representatives of Shanghai Volkswagen.

The plant in Yizheng, Eastern China, will start operating in 2013 and has a maximum annual production capacity of 300,000 vehicles.

VW is already the largest maker in China, and it will double production capacity there to 3 million vehicles by the end of 2014.

“China is one of the most important automotive markets of the future and a dynamic growth driver for the Volkswagen Group”, Heizmann said at the signing ceremony. “Together with our Chinese partners we plan to double our production capacity to three million vehicles by 2013/14.”


“With more than 950,000 vehicles delivered in the first half of 2010, Volkswagen Group China has exceeded deliveries in the record year of 2009 by 45.7 percent”, Vahland added. “This strong performance further confirms the success of our young and efficient model range. The new plant in Yizheng makes sure we will be able to meet growing demand from our Chinese customers in future, too.”


Ford CEO to Serve on President’s Export Council

Ford exec Alan Mulally will advise on “export enhancement.”

by on Jul.07, 2010

Where are the jobs, Mr. President?

Ford CEO Alan Mulally will serve on the President’s Export Council (PEC) the White House announced today.

“Export growth leads to job growth and economic growth,” Obama said, as he named 18 business, labor and government leaders to a new export advisory council, “at a time when jobs are in short supply, building exports is an imperative.”

“President Obama recently set a national goal of doubling U.S. exports over the next five years. We applaud this forward-looking goal and I am honored to serve on the President’s Export Council and work toward helping America achieve it,” Mulally said in a Ford statement.

Ford Motor already exports about 250,000 vehicles annually – the equivalent of one final assembly plant, not including associated engine, transmission and other parts component plants. Vehicles exported from North America include the E-Series, Escape, Escape Hybrid, Expedition, Explorer, Focus, F-150, F-Series Super Duty, Mariner, MKS, Mustang, Mountaineer, Navigator, Ranger, and Taurus models.

It wasn’t immediately clear if this includes “exports” to Canada, and we await verification from Ford.

Politicians' Promises!

“At Ford, we believe an export-driven strategy is critical to achieving our shared goals of economic growth, job creation and a sustainable future. One thing is certain, for exports to grow we must ensure that market access for manufactured goods remains at the center of U.S. trade policy,” said Mulally.


Oops! U.S. June Auto Sales Down Further

Projections continue to point toward an ongoing decline.

by on Jun.30, 2010

Weakness in new-vehicle retail sales experienced during the first half of June has progressed at an accelerated rate through the remainder of the month, pulling the retail selling rate below 8.5 million units, according to J.D. Power and Associates.

Power had originally projected that new-vehicle retail sales were expected to come in at 768,000 units, which represents a seasonally adjusted annualized rate (SAAR) of just 8.6 million units. Final results from AutoData Corporation will be in late tomorrow.

Ups and Downs!

The difference amounts to about half of the annual output of a typical final assembly plant, not counting the negative effects on production of component parts, such as engines and transmissions at supporting plants.

Thus, the Global Great Recession continues as the U.S. Congress grapples with a bill to regulate the reckless practices of Wall Street, which crippled the global economy in the fall of 2008. Republicans oppose the bill.


U.S. Auto Sales in June to Drop Significantly

SAAR is predicted at just 8.6 million units, down from May.

by on Jun.24, 2010

June new vehicle sales in the U.S. will drop significantly from what was a weak month of May, according to J.D. Power and Associates.

New-vehicle retail sales are expected to come in at 768,000 units, which represents a seasonally adjusted annualized rate (SAAR) of just 8.6 million units. This means June’s selling rate is expected to be down from May’s selling rate of 8.9 million units, but up from a selling rate of 8.2 million units in June 2009. Retail transactions are the most accurate measurement of true underlying consumer demand for new vehicles.


U.S. Retail SAAR June 2010
June 2010 May 2010 June 2009
New retail sales 768,000 units  (5% higher June 09) 847,138 units 730,627 units
Total sales 971,000 units(13% higher June 09) 1,100,565 units 857,952 units
Retail SAAR 8.6 million units 8.9 million units 8.2 million units
Total SAAR 10.9 million units 11.5 million units 9.7 million units
J.D. Power and Associates U.S. Sales. Forecast based on first 16 selling days.



An increase in fleet sales in June is not strong enough to offset weaker-than-expected retail sales, resulting in a decline in the total new-vehicle selling rate. Fleet sales are projected to total 203,000 units, up 59% from 2009. As a result, total light-vehicle sales for June are expected to come in 971,000 units, up 13% from one year ago.


Volkswagen to Build a New Plant in Southern China

Planned capacity of Foshan complex is 300,000 cars annually.

by on Jun.09, 2010


"By 2013/2014, we intend to double our capacity in China to three million vehicles per year."

The Volkswagen Group is expanding its production in China, the world’s largest auto market.

Contracts for the construction of a new plant at Foshan, in the Southern Chinese region of Guangdong, were signed today by Prof. Dr. Martin Winterkorn, Chairman of the Management Board of Volkswagen, AG, and Dr. Winfried Vahland, President and CEO of VW Group China, together with representatives of the partner FAW-Volkswagen in Foshan.

FAW is a government owned automaker, and Chinese industrial policy requires joint ventures to gain access to a market that some experts say could easily reach 20 million units annually by the end of the decade. The U.S. auto market, once the world’s largest and once the source of enormous wealth and job creation, is languishing at 11 to 12 million units annually as the Great Recession and a jobless recovery continues.   (more…)

Hyundai’s Assurance is Baloney, Lawsuit Claims

Auto dealer files $30 million suit against Korean Hyundai.

by on Mar.24, 2010

"Hyundai repeatedly assured its dealers, including Estes, that Hyundai was their partner."

A $30 million lawsuit against Hyundai Motor America and Hyundai Capital America on behalf of what is said to be one of Hyundai’s largest and most successful dealerships has been filed.

Plaintiff Jim Estes and his dealership Merced Hyundai in Northern California are charging Hyundai with fraud, intentional misrepresentation, and concealment, along with other claims.

Estes was a top dealer and Hyundai recognized him for his accomplishments, according to the suit. Hyundai, allegedly, reaped the benefit of Estes’ “business acuity, earning millions of dollars.”

Hyundai refused to comment on, or to discuss, the matter in litigation.

The lawsuit also alleges, “in 2008, as the global recession hit, auto sales began to plummet nationwide…Merced Hyundai began to struggle. However, Hyundai repeatedly assured its dealers, including Estes, that Hyundai was their partner and would help them weather this economic storm.”   (more…)