20 December 2008

Tata and Jaguar/Land Rover

There has been much written in the press about car companies struggling with the downturn and drastically cutting production. In the UK, some journalistic scribes have picked up on Tata (new owners of J/LR) wanting a soft loan for Jaguar and Land Rover to move their vehicles to a more eco-friendly position. Everyone is moving that way but it costs so much money and takes time. Many portray Jaguar/Land Rover as on their death beds.

In point of fact, Jaguar isn't about to die. It's one of the leanest companies going around at the moment. It's production for November 2008 was over double that of November 2007. The XF is a runaway success.

What Tata needs to do is get some partnerships going with other manufacturers to share future development costs. Jaguar doesn't have the volume to do it alone. If they quietly got on with doing that rather than seeking tax payer assistance, it wouldn't create scare mongering type articles such as one reads daily on the ‘net.

Jaguars are designed and built exclusively in the UK, giving much to the UK economy. That should not be overlooked. The company is presently profitable. Some of the cynical nonsense written by the UK public shows that most people are not well informed or deep thinkers. To assert, as one UK man does, that Jaguar is as British as a German built ship beggars belief. It's a real company that contributes much to the UK. The uninformed, blinkered British whinging cynic is alive and well, if some of the comments you see around are anything to go by.

Land Rover is doing poorly and needs to tack quickly. The Discovery is a fine piece of engineering that looks good too. But it weighs too much and that makes it less environmentally friendly, with more fuel needed to move it. Range Rovers are also outstanding vehicles, but will in future sell in much smaller numbers. The Freelander is on the money, but nothing is going to sell as well in the 4 x 4 category anyway. It’s difficult to make them efficient. The LRX concept is needed, now. Hybrids are needed, now.

The car industry is taking a battering and it will push manufacturers into alliances, mergers and perhaps some will fall. Personal transport has increasingly reflected the excesses of this greedy commercial world. If the situation wakes people up to that, then it hasn’t been all in vain.

27 November 2008

Cars & Models

They say that women and cars both keep you poor but I think that is unfair. I mean cars never cost me all that much…. Joking aside, cars do keep you poor while only gold diggers do so otherwise. Guys who lavish so much on their beloved car often have an attractive female or dolly bird too. Even in car shows, young pretty girls are seen on the stand with the new gleaming model. There is some association between the two.

All I can say is that whilst both may have stylish curves and nice shapes, the simple reality is the human form is infinitely more beautiful than any contrivance of man. Putting a woman and a car in the same photo means that the car will always come off second best, and a distant second at that. I suppose it brings the photographers at car shows to the stand in the first place and the attention eventually turns to the car, which is what it is all about. However, as the photo above shows, even a car as beautiful as the Jaguar E-Type – some say the most beautiful ever - comes off a poor second to the model on the bonnet. I don’t think that is what the photographer intended. He should have snapped the car on its own. Then it would have stood a chance of being noticed.

24 November 2008

Toyota Europe Production/Sales 2008

Toyota has marched inexorably towards the number one spot in the world for car/LCV production (excluding heavy vehicles). In 1998, Toyota made just under 5 million of such vehicles, well short of GM and Ford at the time. Ford was passed in 2005 and GM is only a matter of time. But now Toyota is being its sensible cautious and scaling back its growth. Even the most successful are not immune to the current downturn. However in Europe, it seems sales would have slipped anyway.

For the first ten months of 2008, ACEA reveals that the overall Euro market sales, excluding Russia, is down 5.4%, but Toyota is –13% and Lexus –27%. For October, -23% and –32 respectively in a market down 14.5%. Toyota is doing much worse than the market. Is it moving away from less profitable sales? It seems so.

Euro production has suffered accordingly. JD Power estimates Euro production was down a quarter or 18,000 units in October alone. YTD nearly 60,000 down or nearly 9%. The new Avensis should help a little but reverse this trend it will not. Overall, a damp year for Toyota/Lexus dealers in the Euro zone.

11 November 2008

Why Can’t Jaguar Have An SUV?

New owners Tata have stated no SUV for Jaguar as Land Rover has that role. I can see where they are coming from, but does this mean Land Rover will in future make and sell “soft roaders” or crossovers? All Land Rovers are serious off roader 4WD sorts. They have a place but a diminishing one in this world, as they tend to be heavy and therefore not so good on fuel and emissions. Crossover type vehicles are for the tarmac with limited off road ability.

Some are downright sporty in handling such as the Mazda CX 9. (See pic below). That is where Jaguar could come in, an up spec CX 9 type of vehicle would be awesome.
However, Tata wants to take them down the sports car road more and that sounds good too. But if Land Rover doesn’t go down the “soft roader” road and Jaguar does, there would be no competing against each other. Maybe Land Rover is about to take a new track, not so off beaten. If so, then it would make sense to leave it to Landie and let Jag head down the sleek car and sports car avenue. Let’s wait and see.

03 November 2008

Chery Automobile, The Car Company

This is a Chinese firm founded in 1997 to make cars in Wuhu. It was supposed to be called Cheery but a mistake in translation led it to this name without meaning, and it has been retained.
At first it used machinery and engines purchased from Ford and a chassis from SEAT, Spain. Since then, to make progress in the car industry quickly, they have worked with Bertone, AVL, Bosch, Lotus Engineering and Ricardo Consulting.

They are opening plants and doing joint venture deals in various emerging markets at a hectic pace. 307,000 cars were made in China in 2006 and 388,000 in 2007. 40,000 were also made in Russia in ‘07.

They have plagiarized GM designs, which GM has sued unsuccessfully in Chinese courts. Intellectual property rights mean nothing there and court rulings said no copying took place. Well look at the two cars on the right and tell me if you see if there is any difference. Anyway, to maintain good will with the government, GM dropped the case as long as they are not exported to western markets. Well I'm not worried about good will, so will call it as it is.

The cars also have a dubious crash safety record. A picture says a thousand words and the photo on the left gives a clear impression on that one..... The last two points raised would make me shy away from ever buying a product from an outfit such as Chery.

Selling copies of cars you haven’t paid the rights for, and failing to respect your customer’s safety is morally bankrupt. A strong sentiment, but what other conclusion could one reach? I would not buy one, not even with a cherry on top. They look fine as you can see below, but looks can be deceptive.

12 October 2008

General Motors, The Car Company

Buick started making cars in 1904 and became the General Motors company in 1908 in Flint, Michigan. GM quickly acquired new brands such as Oldsmobile and Cadillac but it’s growth led to financial problems and ownership changes. Eventually Alfred Sloan became president in 1923 and he led GM to its global dominance. He is credited with creating annual model changes and by establishing a non-competing pricing structure, used the various brands to keep buyers within the GM fold.

Today, the company employs nearly 300,000 people globally It’s worldwide production in 2007 was 9.4 million vehicles in total, and about 9.2 million cars and light commercial vehicles. These were sold under the following brands: Buick, Cadillac, Chevrolet, Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall.

GM’s sales in 2007 in it’s largest national markets were: US 3.8 million, followed by Brazil 500,000, China 450,000 upwards, depending what you count as a GM vehicle (?), Canada 400,000, the UK 330,000, Germany 285,000 and Mexico 230,000.

Regarding production of passenger and LCVs, USA leads with 2.8 million (32% of total production), China 1 million (11%), Korea 950,000 (10%), Brazil and Germany 6% each with just over 550,000 each, Spain and Mexico just over 450,000 each (5%), Poland 350,000 (3.7%), flowed up with Belgium and the UK with about 200,000 each (2%). Seven other countries make up about 670,000 units (7.5%).

You would think that such a large, successful company as GM would be sitting pretty, but it is not. The whole company is only valued at about US$3 billion on the stock market. So while sales are holding up, losses keep mounting. Years of paying workers too high wages, and benefits when they retire, has crippled the company. The gravy train that looked like it would just keep on running is almost out of steam. It created a fool’s paradise for GM workers but reality is about to check in. Unless GM can get costs under control, surely it cannot continue. A possible merger with ailing Chrysler is under consideration but I’m not sure that two problematic companies coming together is the answer. Now with the global meltdown, it must be a worry to GM staff and retirees who get so much from General Motors.

29 September 2008

NZ And Diesel

Diesel has become the fuel type of choice for Europeans. It’s more economical and the engine power is more accessible over a wider rev range. On the down size, it does need more maintenance. When one buys petrol in NZ, the tax is already on the fuel. Diesel, however, is charged separately as road user charges (RUCs). The problem with that is all vehicles up to three tones have the same tax, which is good for larger vehicles but all but makes buying smaller diesel cars pointless. A smaller petrol powered car is cheaper to run than its diesel equivalent.

So while three of my last four vehicles were diesel motored vehicles, my latest one is petrol. It just didn’t stack up to buy a small oil burner. The government has said it would like to see more small cars with diesel engines on the road and promised that by April of 2008, it would make the RUCs lower for such cars. That didn’t happen and who knows if it will in the future?

The reason for hitting diesel vehicles so hard is apparently to pay for the upgrading of the recently purchased but run down rail system. It wants more freight carried by rail, not truck. Trucks are diesel powered but as to why little diesel cars should also shoulder that cost I don’t get. People won’t buy them in large numbers until the RUCs are fairer to the little guy, I mean car.

26 September 2008

Honda, The Car Company

Honda started making cars in the early 60’s and had bold ambitions of dominating the market the way they did with motorcycles. While they have been very successful, they could not duplicate what they had done in the two-wheel arena. Honda is 5th largest carmaker in the world and 2nd largest in Japan.

They have become a respected maker of cars worldwide and in 2007 made 3.9 million passenger vehicles. Japan leads the way in production with 1.3 million (34%), followed by the US with 1 million (26%). China made 450,000 (12%), Canada 390,000 (10%), the UK 240,000 (6%). The remaining eleven countries made 470,000 (12%).

So Honda has been remarkably successful in a relatively short time in car manufacturing but I sense they have gone as far as they can and will at best hold on to what they have achieved.

25 September 2008

Nissan, The Car Company

The first Datsun was built in 1914 in Tokyo. The company meandered along, merging with other companies. In 1933, the company moved to Yokohama and the car division became known as Nissan Motor Co. Nissan then established close ties with Austin of England, making cars under license. It then used Austin engines as a basis for its own cars. The 1960’s saw Nissan getting seriously into exporting cars. It merged with Prince cars in 1966, giving Nissan Skyline and Gloria models. The 70’s and 80’s was a time when Nissan opened factories overseas. Also, a luxury brand Infiniti was introduced by Nissan in 1989 and is now sold in 15 countries.

By 1999, Nissan was experiencing severe financial difficulties. This led to Renault acquiring a 44% stake in the company, while Nissan in turn took a 15% share in Renault. Since that event, Nissan’s fortunes have turned around dramatically, leading to record profits.

Today, Nissan has factories in many countries, making it truly international. Of the 3.3 million passenger vehicles made in 2007, 1,050,000 (32%) were sourced in Japan, 700,000 (21%) from the USA, 500,000 (15%) Mexico, 350,000 (11%) the UK, 300,000 (9%) China and Spain 225,000 (7%). The other seven countries account for 5.5%.

With it’s unusual alliance with Renault, Nissan is doing well and for the present time is riding the stormy car market better than most.

28 August 2008

GM Luton

I know this is about cars but I'll stray into vans occasionally.

IBC Vehicles Limited at Luton, Bedfordshire, was formed in 1987 as a joint venture between GM and Isuzu and has been a wholly owned subsidiary of GM since 1998. In 2003, IBC became a dedicated commercial vehicle plant and now produces vans under the Vauxhall, Opel, Renault and Nissan brands. Officially, it employs 1750 workers and can produce 18 vehicles per hour or 90,000 per annum. However, 95,000 GM and Renault vans were built there in 2007 so they must have ramped up production somehow.

Vauxhall Iron Works moved to Luton from London in 1905. In 1925 GM bought the company. The year 2001 saw 113,000 Vectra cars and 35,000 Frontera SUVs made there. From 2002, production shifted to vans. Understanding how many are actually made there is difficult. GM’s claim was during 2006 60,696 GM vans and 28,369 Renault vans were made for a total of 89,065. Where does the Nissan Primastar fit in then? I have no idea. Nissan say 86,500 Primastars were made in Spain but make no reference to Luton.

So overall, it seems a successful operation, which is good to see as it has a long history.

29 July 2008

Why Buy A Porsche?

I've been suspicious about why Porsche is so profitable. They don't make many vehicles, approximately 100,000 pa. However, Porsche are so cashed up, they have just about taken over the VW/ Audi/ Skoda/ Seat/ Bentley/ Lamborghini conglomeration. I came to the conclusion that must make mega profit on each unit sold.

Then I started reading the Nissan GT-R vs Porsche 911 Turbo comparisons. Every motoring journalist picked the Nissan as the much better vehicle. It also sells at about half the price! How can anyone in 2008 make a better car at half the price of the competitor? Either one is losing bucket loads of money on each car sold, or the other is ripping people off. The answer: Porsche is overcharging...indecently so.

Wealthy people buy Porsches. Usually wealthy people are smart, they don't get ripped off easily. Perhaps lack of competition made it difficult to realise how much Porsche over charge. The Nissan GT-R has just shown them.

20 January 2008

Nothing Mini About MINI Sales In 2007

MINI sold nearly 223,000 vehicles s year. From 2001, when it was introduced, sales grew strongly to 2005, when the 200,000 barrier was breached. 2006 saw a slight decline as work was done to allow for more production. Then 2008 will see the Clubman adding to sales. 260,000 could be reached this year.

Top 10 markets for 2007:
1) The UK has been always been # 1 apart from 2006, when the USA took that spot. The UK fell back nearly 7,000 sales in 2006 but rebounded impressively in 2007 with almost 10,000 more units sold than in ’06, reaching 47700.

2) The USA started selling MINIs in 2002 and it was apparent even then that Americans would take this car to heart. It became the third largest market in that first year, then took the #2 spot in 2003. #1 was achieved in 2006 as it lost few sales in that refurbishment year. Although 2007 was a good year again, a 3,000 sales increase was only good enough to slip back into 2nd spot, with 42,000 sales. It has a some climbing to do if it is to regain #1 slot.

3) Germany started as #2 market for ‘01/’02, but has been 3rd ever since. 29,500 sales last year was it’s biggest ever (as ’07 was for most markets). Germany looks set to stay 3rd for a while.

4) Italy is perennially #4 and looks ensconced there. One of the few not to hit an all time sales record in 2007 (2004 holds that title), 21,000 sales was up a couple of thousand on ’06.

5) France slipped into 5th after being a regular at #6. A massive increase from 9,500 in ’06 to 16,000 saw to that. This market has struggled to get much past 10,000 but that all changed in 2007.

6) Japan fell back a place this year despite a 1,000 sales gain. The way MINI sales are going elsewhere, that was always on the cards. In fact, unless Japan gets it’s derriere into gear, it may drop another spot next year.

7) Spain has always posted increases in MINI sales but 2007 was a bigger than usual increase. 2,200 more to 11,650 to be precise. Another good year could see it shake off it’s usual #7 spot and see it go one better.

8) Belgium bounces around from 10th to 8th but 2007 saw it take back 8th spot again at the expense of Canada. A 600 unit improvement to 3,700 was the reason. Realistically, #8 is as good as it will ever get as the gap above is beyond such a small market. Long term, expect Belgium to be overtaken by bigger nations

9) Canada found that a 300 sales rise just does not cut it in ‘planet MINI’. That cost them #8 spot in ’07. 3,700 sales is not a lot for such a big market. You can do better Canada.

10) Like Belgium, Switzerland over achieves in being #10. Although the Swiss have never been out of the top 10, that will have to happen sooner or later. Still 3,500 sales (up 750) was impressive.

02 January 2008

Ryton's Demise

The Ryton Car Plant was in Warwickshire, bordering on a small village named Ryton-on-Dunsmore. It was originally built by the Rootes Group around 1940 to build aeroplane engines during World War II. The Rootes Group got into financial difficulties in the 1960s and Ryton was taken over Chrysler. I had a Hillman Avenger, a car from that time. It was a GLS Alpine (see pic below, Alpine just as mine on right). Red with a black vinyl roof! It was a top of the range model and it had the best seats I ever sat in in a car. My brother had a Hillman Hunter as a company car and it they were both quite good vehicles.

Chrysler in turn got into financial troubles itself and Ryton came under Peugeot Citroen control in 1978. In 2006, Peugeot decided that the Ryton plant would close, and it did in December 2006 and the site was sold for industrial purposes. Peugeot decided they would rather build cars in Slovakia as labour costs are lower there. Ryton’s good record both in increasing productivity and in industrial relations was no match against that. But equally, unlike workers at other Peugeot plants in France and Spain, it is relatively easier to sack them. I think public apathy is an issue too.

Has Peugeot sales been affected in the UK? No, in fact they have increased market share slightly since the closure. A few years ago Ford was going to move Mondeo production from the Genk factory in Belgium to Halewood, UK. Such was the militancy and sabotage form the Belgian workforce that Ford backed down. Maybe the British feel that just wouldn’t be cricket.

Manufacturing isn't that important in western countries now and such factory closures don't seem to have the impact on the economy as you would think. The French really protect their market but the economy isn't that robust as a consequence. So does Ryton's closure matter? I don't really know, but for the workers and the local community at least, it must have been difficult.