30 December 2007

Ellesmere Port Vauxhall

Getting information on the above mentioned plant is not easy. However, car production started there in 1963 and is the only GMV plant making cars after the Luton plant ceased production in the year 2000.

Today the Ellesmere Port plant builds the Astra and Astra Van; in 2006 at the rate of 147,500. GM has put all it's European plants under pressure to meet efficiency targets or be closed. Recently Ellesmere Port was assured of a future by being granted as being one of the factories to make the next Astra. Of course, the UK market is very important to GM. In 2006, 350,000 Vauxhalls were sold and 40,000 other GM vehicles. Even the larger German market couldn't match that and the gap widened in 2007. So GM needs to make cars in such an important European market.
I guess I have an interest in that I spent the first years of my life there before our family emigrated. My father worked there for Castrol, which decided the place of my birth.

So it is good to see that Ellesmere Port Vauxhall has a future. it's made many vehicles in it's time. In fact, in 2005 a milestone was reached when the 4 millionth vehicle rolled off the production line.

What 2008 Will Bring

I'm no soothsayer but I will have a stab at what I think will be happening on the automotive landscape next year. Rather than evaluate by brand, I thought I would look at some countries.

USA: The big three look vulnerable. GM is fighting hard to stay #1 but Toyota will win that one, either in '07 or '08. Ford and Chrysler are not well. Expect falling sales as they strive to make money.

Japan: Getting stronger. It's hard to say something negative here. Toyota has hit a wall in Europe but they are winning everywhere else so it's hardly noticeable. Basically the success seems driven by a reputation for reliability and reasonable value for money. Expect more good news for Nipponese manufacturers in '08.

Germany: Much the same as Japan but being achieved for slightly different reasons. They don't offer value for money and VW struggles to be a big player outside Europe for that reason. However, the other brands, which are more upmarket, are not affected by that. What they all offer is a strong image, good driving dynamics and ever expanding model ranges.

France: They have been not proactive enough in recent years with product. The absence of SUVs testifies to that. PSA are buying a Mitsubishi 4wd to address that a little. Profitability has slipped as they failed to keep up with the play and profits were eroded as they tried to maintain market share in Europe. They seem to now be focusing on improved product and will take a hit on the sales chart to get profit up, Renault in particular.

China: Most Chinese vehicles are for local consumption for the time being so I don't know much about them. The local market is huge and with protection in place to limit imports, China will make cars aplenty. Despite this, they seem in an indecent hurry to establish a presence around the world. But they will do themselves no favours if they simply copy other designs which they have been doing at times, and if they crumple like tissue paper at the sign of an impact. The car market in western markets is far too sophisticated to buy on price alone. As my dad used to say: More haste, less speed.

Korea: Having established their reputation on price, they are now trying to prove themselves on quality. I must say that they are doing a good job on that front. It's hard to make money at the bottom end of the price market and the Chinese will be there soon enough so the timing is right. It takes awhile to gain a reputation. It won't happen overnight but it will happen, as long as they keep quality as their focus.

Italy: After a rough ride where the Italian (read Fiat Group) lost their way, things are looking better. Product is improving and reliability issues are being resolved. They mustn't take their eye off the ball though, as the car market of today is so competitive. An Italian style must be maintained to offer something different too.

UK: The death of MGR as the last locally owned volume maker could have made the UK's inclusion redundant. However, it still has local brands with a strong identity that is uniquely British.

Land Rover, Bentley and Aston Martin will consolidate but must get their average carbon emissions down, which they are all working on I'm sure. Jaguar will do well with the XF but chasing big volumes isn't where Jaguar ought to be. UK Japanese factories are all getting close to capacity with production so no problems there. I admire their sticking with a high cost country rather than 'doing a Peugeot' and going east. Overall a solid market but reaching a ceiling volume wise.

28 December 2007

Magna Steyr, A Real Stayer

Magna Steyr is an unusual company as although it is a vehicle manufacturer, it only assembles automobiles for other companies. It is not a car company itself. It is located in Oberwaltersdorf, Eastern Austria and is a subsidiary of Canadian company Magna International, which manufactures auto parts. Its current production involves all BMW X3 (soon to move to the US), Chrysler Voyager & 300, Jeep Commander & Grand Cherokee, Mercedes Benz E-Class 4wd & G-Class as well as the Saab 9-3 Cabrio. As the X3 is moving, BMW has decided to have the MINI 4wd model made there. There isn't anymore capacity in the UK at MINI Oxford, so the lost production at Magna Steyr will be ideal. I don’t agree with the decision but I can see why it has gone that way.

As for 2006 figures, they made 114,000 X3s for BMW, 90,000 Chrysler/Jeeps. I’m unsure of the others. One source said 25,000 Mercs and another 4,000 (slight difference). For Mercedes, it could be 4,000 E-Class cars and 25,000 if you include the G-Class. The same problem with Saab, 37,000 from two sources and 18,500 from another two. I wonder if half are made at GM Graz and the other half at Magna Oberwaltersdorf. As for the total production, I read that production is 200,000 per annum for the plant, but it could be closer to 250,000 looking at the figures individually, so take what you wish from all that.

Any manufacturer such as Magna Steyr surely must be even more vulnerable than other factories to keep production as manufacturers only contract the work out to them. However, if they develop a good record of quality and reasonable costs associated with the assembly, I guess work will always come.

26 December 2007

NedCar, Netherlands

NedCar, or Netherlands Car B.V. is owned by Mitsubishi Motors. It is the only major car maker in the Netherlands. It is situated in Born, in southeastern Netherlands somewhere near Maastricht. It has produced 4.5 million cars since 1967 and production peaked in 1999 at 260,000 vehicles. It started making DAF cars and did so until 1976, then Volvos from 1975 to 2004. Mitsubishi got involved and made cars from 1995 to the present and smart Forfour cars were made there from 2004 to '06.

Did you get all that? Complicated. The problem is it shouldn't exist and wouldn't but for government intervention in the early 90's. The government slipped out of the arrangement in 1999, Volvo too in 2001, leaving Mitsubishi the sole owner. In 2006 only about 70,000 Colts and the last of the smarts (15,000 or so) were made. With the Colt the only model being made in 2007 and nothing guaranteed beyond 2009, it seemed the end of the factory was nigh. However, the Outlander SUV has been confirmed from 2008, so it has had yet another reprieve. One wonders how much longer it can survive, but NedCar in Born has a future for the time being.

23 December 2007

Jaguar XF

Some say that Jaguar's future is dependant on the success of the new XF. Journalists & editors love a dramatic headline but the marque is strong enough to go on regardless. The XF won't bomb as it's just too good. But if it did, it would mean the brand was sufficiently damaged so that even a good car couldn't sell with the leaping cat attached. That would probably mean making it a niche brand and greatly reduced production volumes and trying to restore the image.

However, there is no point speculating about what won't happen. It will go well and volumes will climb after it's introduction in spring of 2008. It has up to date looks and features, oozing style from every pore. The interior hasn't been forgotten either, which is classy, with some novelty features like the round gear selector which rises from the centre console when you start the engine. If Jaguar can sell all they can make, they will be more than happy.

The 2.7 V6 diesel would be my pick but it also has a normally aspirated 3.0 V6 and a supercharged V8 as well, both petrol. With the excellent auto transmission of course.
So I'll take a stab at how many they will sell in '08. Bearing in mind it won't be a full years sales, I'm picking about 20,000. We will see.

21 December 2007

I Be Talking 'Bout Honda Swindon, Wiltshire

The Honda Swindon site was formerly an airfield and an aircraft production facility where, during World War II, Spitfire fighter aeroplanes were produced by Vickers. Honda uses one of the airfield’s former runways as the on-site test track.

Honda bought the site in 1985 and initially it was a pre-delivery inspection facility for cars built by Rover, then badged as Hondas. Honda then opened an engine assembly facility making units for Honda and Rover cars. Car Plant 1 came started in 1992 and in 2001 Car Plant 2 was added. Initially just over 100,000 cars were made annually, but in 2002, the numbers increased to about 185,000. However, an increase again will lift production to about 230,000 for '07, 135,000 Civics and 95,000 CRVs. Next year should see the maximum 250,000 reached with four shifts. Over 150,000 petrol and Diesel engines are also made there each year, but this figure isn't as up to date as the car production figures. Currently about 5,000 people are employed there.

Late 2007, Honda Swindon produced the millionth Civic. Civic production began on September, 1994 and in that first year just 6,652 Civics were produced. Cars are exported to over 60 countries and Honda has invested £1.38billion in Swindon.
This the only Honda plant in the world manufacturing the Civic 3 and 5 door models.

15 December 2007

Where They Sell. Case Study: France

Three brands considered: Renault, Peugeot Citroen.

Renault: It’s home market share from 2001 forward has dropped from up to 27% to 22% and West European (WE) share slumped from 10.5 to 7.5%. It’s home market / WE split is about 38/62. It’s home sales are about 25% of world sales, and sales outside WE are 36%. Sales are falling in WE and it needs to broaden it’s world sales, which it seems to be trying to do. For it’s long term benefit, the sooner the better.

Peugeot: It’s home market share from 2001 forward has dropped from nearly 21% in ’01 to 17% in ’07. WE share down from 9 to 7%. It’s home market / WE split is about 33/67. It’s home sales are about 20% of world sales, and sales outside WE are 39%. More balanced in worldwide sales than Renault but still could be broader .

Citroen: It’s home market share from 2001 forward has been about 13%. WE share 6%. It’s home market / WE split is about 30/70. It’s home sales are about 21.5% of world sales, and sales outside WE are a poor 27%. Far too reliant on WE.

Combined: The three brand’s home market share has dropped from about 60% to around 52% from ’01 to ‘0. WE share also dropped from about 26% in ’02 to 21% now. Their home market / WE split is about 35/65. Their home sales are about 22% of world sales, and sales outside WE are 35%. Renault, Peugeot & Citroen rely too much on WE.

Where They Sell. Case Study: Germany

Four brands considered: VW, Daimler (M Benz), BMW & Audi.

VW: It’s home market share from 2001 forward has been between 19 to 20% and West European (WE) share 10 to 11%. It’s home market / WE split is about 40/60. It’s home sales are about 20% of world sales, and sales outside WE are 55%. A well balanced sales mix which minimizes it’s risk. Presently it’s home market is in slump but it isn’t affecting it too badly. Much of it’s rest of world sales are in China, a market it got into before other brands, and profited accordingly.

Mercedes: It’s home market share from 2001 forward has dropped from 12% in ’01 to 10% in 06, but recovered a little in ’07. WE share 5%. It’s home market / WE split is about 50/50. It’s home sales are about 28% of world sales, and sales outside WE are 40%. A little too reliant on the German market.

BMW:It’s home market share from 2001 forward has climbed from 7% in ’01 to 8% in ’07. WE share 4.6%. It’s home market / WE split is about 40/60. It’s home sales are about 23% of world sales, and sales outside WE are 45%. A more balanced sales mix than Daimler.

Audi: Their home market share from 2001 forward has been around 7.5%, climbing to 8% in ’07. WE share 4.3%. Their home market / WE split is about 40/60. Their home sales are about 28% of world sales, and sales outside WE are 22.5%. Relies heavily on WE.

Combined: The four brand’s home market share is around 45%, WE share about 24%. Their home market / WE split is about 40/60. Their home sales are about 23% of world sales, and sales outside WE are 47%. VW, Daimler, BMW & Audi have strong sales spread across world markets.