04 August 2016

Industry Snippets

The Korean Ministry of the Environment has effectively banned the sales of VW, Audi and Bentley cars in Korea. It could be more than three months before they could reenter the market. It also revoked certification for 83,000 vehicles sold here between 2009 this year. The ministry also imposed 17.8 billion won in fines on the German car maker's local division for violating related laws. VW had already voluntarily suspended sales in South Korea of the implicated vehicles.

I have to say that while I was very unhappy with VW for it's cheating attitude, this action does seem massively over the top. I wonder if it is reasonable to think that Bentley cars had these devises fitted. Some may say it is purely punitive action against VW as a whole, others an excuse to hurt import sales. VW is a major part of the small but growing import car scene in Korea.

My take: The punishment is proving costly for VW Group in Korea, perhaps excessively.

In April 2016, Mitsubishi announced that many of the vehicles destined for the Japanese market for itself and Nissan failed to comply with Japan's fuel efficiency testing guidelines. Investigators came to the conclusion that its illegal practices were fostered by a poor corporate culture. The findings said this led to a lack of respect for Japanese law, fighting between departments, workers unable to air grievances with management, and insistence on fuel economy goals that could not be delivered.

Mitsubishi has been struggling for years with development costs. After this revelation Nissan has decided to become a major stakeholder in the company, which will help with cost savings through collaboration.

My take: Mitsubishi got itself into a mess but thanks to Nissan, has landed on its feet.

Decades ago in New Zealand Toyota used a celebrity to promote the Hilux utlility vehicle. It was very successful and the truck became a segment winner for many years. Recently its crown was taken by the Ford Ranger. Would the empire strike back? It surely wanted to but realised that to do so would be financial mistake.

Now in July 2016, The Ford Ranger has broken a record held by the Hilux for two years – the biggest volume for a commercial model in one month. The Ranger took a 24% share of the commercial market, with 925 units sold. The previous high was the Hilux in June 2014, with 847 units. Kiwis can hardly get enough of the Thai built utility with the blue oval as it continues to outperform the Hilux in sales.

My take: It's nice to see the public not simply buying on a model's reputation, but reacting when theyu believe a better product comes along.

Picture source: Korea Herald.

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