28 December 2009

The UAE Car Market: 2002-2008

According to Wikipedia, the United Arab Emirates (UAE) is a federation of seven emirates situated in the southeast of the Arabian Peninsula. The UAE consists of seven states, termed emirates, which are Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah and Fujairah. The capital and second largest city of the United Arab Emirates is Abu Dhabi. They also buy cars, which is where my interest comes in.

The UAE sales are from 2002 to 2008. In 2002 there were 120,000 vehicles sold in the UAE, and by 2008, that had gone up to 360,000, an increase of 200%. Toyota is the largest brand in the Emirates. It had 30,000 sales (24.5% market share) in 2002 and by ‘08 sold 91,000 (25.3%). Nissan is second with sales going from 34,300 (28.4%) to 54,300 (15.2%). Others were:

3 Mitsubishi 8,400 (7.0%) and 43,600 (12.2%)
4 Honda 10,500 (8.7%) to 23,600 (6.6%)
5 GM 4,500 (3.6%) to 23,400 (6.5%)
6 Hyundai 2,500 (2.1%) to 15,100 (4.2%)
7 Chery new (0%) now 13,900 (3.9%)
8 Kia 1,800 (1.5%) to 10,300 (2.9%)
9 Mazda 3,600 (3%) to 9,000 (2.5%)
10 Mercedes 2,800 (2.3) to 6,800 (1.9%)

The market is strongly Japanese, Toyota top and looking comfortable. Oil rich economies in the Middle East area have vehicle sales growing quickly. Maybe it's time they were a little more transparent reporting the figures as they are increasingly important players in the world's car industry.

The bottom line: I would love to visit the UAE, especially Abu Dhabi.

PS. Sales figures have been modified.

25 December 2009

Saudi Arabia 2008: Vehicle Sales

For reasons unknown to me, getting sales data by brand for the Middle East is not easy. Despite that, I have Saudi Arabian sales from 2001 to 2008 and here is the low down.

In 2001 there were 280,000 vehicles sold in Saudi. By 2008, that had climbed to over 530,000, an increase of 90%. Toyota is the biggest player in the market. It had 105,000 sales (38% market share) in 2001 and by ‘08 sold 189,000 (35.5%). GM has gone from 27,000 (9.6%) to 75,000 (14%). Others in 2008 were:

3 Hyundai 16,000 (5.7%) to 42,000 (7.9%)
4 Nissan 41,000 (14.6%) to 37,2000 (7.0%)
5 Ford 13,500 (4.8%) to 31,700 (6.0%)
6 Isuzu 14,000 (5%) to 31,400 (5.9%)
7 Kia 10,000 (3.5) to 23,500 (4.4%)
8 Mitsubishi 11,000 (4%) to 17,000 (3.2%)
9 Honda 7,000 (2.5%) to 16,500 (3.1%)
10 Daewoo 3,300 (1.2%) to 15,600 (2.9%)

The market is dominated by Japanese, US and Korean brands. Toyota has maintained its strangle hold well and is still very much in the drivers seat. The Koreans are moving up and may pose a bigger threat to the Japanese marques than even the US ones in the long term.

The bottom line: If only this sort of data was more freely available.

PS. Sales Figures have been updated.

Old Trucks Never Die...

They just wile away the hours reminiscing old times. Two brands that don't exist anymore. Shame.

22 December 2009

European Over Capacity

In the US, vehicle plants have been closing as sales fall. There was and is too much over capacity and closing plants, while painful, protects its sustainability long term.

In Europe, it is different. Because the plants across Europe are in different countries, government often fight to make sure no plants are closed within their borders. The UK is an exception, where many car plants have gone to the wall over recent years. However, France has been giving aid to its car makers on the condition that if they close plants, it cannot be in France.

Meanwhile in Germany, the government has not permitted a single vehicle assembly plant to close since the end of World War II. It recently worked with labour unions to interfere in the restructuring of GM Opel. Germany was the one country where GM plants should close. Had the deal to sell Opel to Magna gone through, it's hard to imagine that Opel could have survived long term with the deal the Angela Merkel was stitching together.

There is too much vehicle manufacturing capacity worldwide, much of it in Europe. Europe is supposed to be a free market but the way some European countries behave, the free market in that region is frankly a joke.

The bottom line: Unless capacity is reduced in Europe, especially in Germany and France, profitability will be hard to achieve unless you are making premium brand cars.

13 December 2009

JD Power Customer Satisfaction Survey 2009 : Luxury

JD Power is a respected survey company who show in this survey just completed that dealers play a major part in the car purchase process. JD Power state: The study finds that more than one in five shoppers who leave a dealership without purchasing a vehicle do so because they experienced poor treatment or dealer performance issues such as pricing games, sales pressure tactics or discourteous treatment. While 43 percent of these buyers ultimately purchased from a different dealer of the same brand, 57 percent decided to purchase from a different brand altogether. For the industry as a whole, this equals a 12 percent loss of retail sales to other brands.
I notice Jaguar is doing well Stateside with basically only two models presently, the XF (up 68% in Nov '09) and XK (up 65%). The quality of the service they get at Jaguar dealers must have a major influence in that success. I have found that if you don't like the service before you buy, try getting satisfaction after the purchase.

The bottom line: If you want good service in the US of A when buying a luxury car, your nearest Jaguar dealer should be your first port of call.

JD Power Customer Satisfaction Survey 2009 : Mass Market

Mercury mainly sell in North America so I know little about them. Except their dealers are doing a good job. Among mass market brands in the latest JD Power Survey, Mercury ranks highest. All seven Ford and GM mass market brands rank above the segment average, which shows that even if the Big Three are struggling, their dealers can still satisfy the new car buyer. If only Chrysler could do better, the three marques dominating the bottom spaces. It can't be easy for their dealers.

On another brand, MINI improves by 16 rank positions from 2008 to rank sixth in 2009, and is the most-improved brand this year. Mitsubishi came well back at last in the survey and the brand's sales are down nearly 50% this year with one month to go!

The bottom line: I know myself from years in the retail sector that good service not only wins customers, they keep coming back for more.

(Car pic Mercury Milan)

03 December 2009

Jaguar & Land Rover Profitable Already

It's funny how car brands are bought with the intention of them becoming profitable, but they just end up costing...and costing. The blame often goes to the brand itself, but rarely to the buyer. GM bought Saab and has lost money ever since. It may cost it much more to divest itself of the marque. BMW bought profitable MG Rover and quickly got it into red ink. It blamed MGR, calling it the English Patient and got rid of most of it in such a way to ensure its demise. The arrogance shown by BMW masked its incompetence in ruining a good company. Ford bought a few brands, calling them its PAG Group. Ford rarely made money on any of them and is now trying to get rid its last PAG brand Volvo.

Now Tata has acquired two of those ex-Ford PAG brands (Jaguar & Land Rover) and everyone expected this to be another failed venture. It didn't help when the world's economy went into a tail spin just after the purchase. Yet while the world markets are still struggling, JLR has suddenly turned losses around and is starting to make money! Even Toyota can't do that presently. How has this happened?

Well the Birmingham Post stated that "JLR posted a profit of £22 million for the September quarter compared with a loss of £49 million in the quarter before, thanks to slimmer operating costs". It then quoted Prof Bailey, who said “Sales figures were boosted by improvements in markets like China and the UK and through sheer hard work by the firm....hats off to JLR for a strong set of results. The firm has got on with the job in hand of developing wonderful products and cutting costs to compete internationally - without much in the way of government support."
So hard work and cost cutting is paying off, and doing so quickly. It's not rocket science, is it?

The bottom line: A lesson for all those companies that bought brands and failed.

01 December 2009

VW #1 Producer Worldwide For 2009?

Uncertain times make for marked changes that catch observers by surprise. GM got into all sorts of bother and gave up the top spot in 2008 to Toyota so suddenly, it was an anticlimax. It was inconceivable that anyone would even get near to Toyota as world's largest vehicle producer for 2009. In fact VW had earmarked 2018 as the year it expected to be the largest vehicle maker. Well guess what? These uncertain times have thrown another curve ball. The VW Group has become the largest vehicle maker for 2009 for the first nine months.

VW scored strong sales in its two main markets - in China and Germany, while Toyota's two largest sales markets - USA and Japan - did poorly. This has led to VW manufacturing 4.4 million vehicles in nine months of 2009 compared to only 4 million by Toyota. Ford has done surprisingly well with 3.7 million vehicles made, ahead of GM's 3.6 million.

Toyota will view this as a temporary setback and should take back the top spot in 2010, but the battle is well and truly on.

The bottom line: You cannot write Toyota off, but VW has the momentum and the better brand balance.

20 November 2009

2010 Land Rovers

For the MY 2010, Land Rover has greatly improved the Discovery (LR4) and both Range Rovers.

This involves new exterior styling styling and much improved interiors.

Engines are more powerful and yet, more frugal. They are now better on the road, and unbelievably, better off too.

The bottom line: They are the best 4X4s by far....including the best looking too.

18 November 2009

Tata's Direction For Jaguar/Land Rover

When JLR were part of Ford, they had much they could share with the Ford group of companies that kept costs down. The bad part was that things didn't happen quickly with Ford and that JLR had to wait too long for approval to do things. Now Tata is allowing decisions to happen quicker. Unfortunately, JLR have lost access to cost savings of sharing within Ford. So there are plus and minus points for the company.
One thing that is certain is that costs must be reduced. By doing so, JLR can achieve its break even point profit wise with fewer sales. How to do that is a problem, as this I think involves moving some production away from the UK and closing at least one of its three UK factories.

For example, the Defender sells about 25,000 units per year, is a basic vehicle and is quite expensive to make in the UK. If production was moved to India, it would be cheaper to make and therefore have economic benefits. Another option involves the Jaguar X-Type. It is just being phased out of production in the UK. If the tooling was moved to India, the car could then be made for emerging markets and even some like Australia that really do still sell the car in reasonable numbers. Oh, of course the unions would protest and the doomsday howlers regarding UK industry would say it's the tip of the iceberg. Soon, the whole JLR company will be in India. That would be a stupid thing to do as many people buy JLR because they are British. The majority of production must stay in the UK, but the examples I mentioned could go to India without affecting UK manufacturing much at all. It would get JLR back in the black sooner and protect British jobs.

The bottom line: Tata needs to close a UK factory and move Defender and/or X-Type production (or its successor) to India to give JLR a more profitable future.

17 November 2009

The Worst Of 2009

In various motoring fields, there are those that fall on their face for some reason. To make note of these failures, this is my 'Worst' list:

Least Reliable. Renault usually battles with Peugeot for this dishonour in being at the wrong end of lists when owners are quizzed about it.

Worst Value. Porsche. Just because they build cars well and have a loyal following does not make them value for money. It just proves that people are prepared to pay too much for something, if they really want it. Even wealthy ones.

Ugliest. Porsche. No, this isn't pick on Porsche day. Their cars are from a design going back to before we were born. Things have moved on but Porsche hasn't. The Cayenne is a shocker and the new Panamera an elongated 911. Ugggh. German car design is about engineering, not grace or style and Porsche sets the standard in this.

Weakest Brand. Lada or Proton. Ladas are not sold in NZ and Protons have just started trickling in. Neither have ever had a good name and poor quality is a hard tag to shake off.

Worst Selling. Saab. Sales just about everywhere are in free fall. Only two models in the range and both look about twenty years past their use by date. A new 9-5 is about to arrive and it looks good. Saab needs it to be.

Worst Prospects. Ssangyong. They make ugly vehicles, have enormous worker unrest and seem to be rudderless. I don't know what the future is for this brand, but things are in meltdown.

Most Over rated. Any German premium marque. They are generally unattractive and over priced. They are marketed strongly and well made, which seems to make their ugliness and cost worth it to many. Not me, however, the 'value for money' guru.

Least Safe. Any Chinese brand. Chery, Geely, Great Wall, BYD, Landwing (pictured) etc. Even when sneezed on, they crumple like tissue paper. You and your families' welfare has got to be more precious than to buy one of these. Currently, they sell in China and some emerging nations, although Australasia has started getting Great Wall Utes (Trucks in US). They may be cheap, but is anyone so desperate to buy a new car that they would risk their life and the lives of their families to have one?

The bottom line: What this list proves that even if my assertions are correct, it doesn't bear much co relation to how they will sell. It is all about perception and if you get that right, you can sell most things.

15 November 2009

Audi Production: 2008

Audi has benefitting from sharing car develoment costs with the VW Group. This has helped it to now threaten the more established German marques in the premium sector. Is it only a matter of time before it dominates this segment?

In 2005, Audi made only 800,000 cars, for 1.3% of the world market. By '08 however, that had climbed to 1,025,000 units and 1.5% share. In '05, 95% of production was in Germany, totally unacceptable for any company with global aspirations. Things are a little better now in that regard, as 2008 figures reveal. 2008 production as follows:

Germany 85% 875,000
Hungary 6% 60,000
Slovakia 5.7% 59,000
Belgium 3% 32,000

Again I know they make cars in China but this is not showing up in the figures. It could be for the same reason as for BMW, not enough local content, so are classed as German made.

Audi has put emphasis on quality interiors although the driving experience through the range of vehicles is a little hit and miss for the standard the premium segment buyer expects. It's emphasis has worked well so far, but Audis need more consistency in the driving experience to achieve on its premium car supremacy ambitions. It is strongest in Europe by far, but lacks true international success to overtake Mercedes or BMW. Taking the next step in growth will be a challenge for Audi, but I suspect VW will accept nothing less from its premium mass produced brand.

The bottom line: I'm surprised Audi have been so successful.

09 November 2009

BMW Production: 2008

I would rate BMW as one of the most aggressive car companies there are. They seek sales and new market niches with the goal of being the world's largest selling premium brand. In this they are proving very successful. Their PR department is very active and the company is very open about sales figures. In this I am very impressed and other car makers could learn a thing or two by watching how they go about it. Jaguar/Land Rover for example, take note.

In 2005, 1,125,000 cars were made, for 1.8% of world production. By 2008, it had risen slightly to 1,200,000 but world market shared remained the same. I know they make cars in China, but they do not appear in OICA figures for some reason. Perhaps they are only assembled there, so are included in the German production figures. Little changed from '05 to '08 as to where cars were made, and in what numbers. For 2008 production:

Germany 75% 900,000
USA 14% 170,000
Austria 7% 83,000
South Africa 4% 48,000

On the surface, it all looks good, but it isn't. All premium makers are struggling with sales presently. Competition is stiff too, especially from 'on the up' Audi. And unlike Audi, BMW do not share platforms so each expensive platform is for one car brand only. There are moves to share engines with the likes of PSA, but they are all front wheel drive so platform sharing is out. BMWs are too expensive but people happily pay over the odds for a prestige badge. Most of the range is rather ugly in appearance and they had until recently a much hated iDrive car management system, neither of which put potential buyers off.
The bottom line: They have the determination and foresight to continue succeeding in difficult times.

07 November 2009

Mitsubishi Production: 2008

By rights Mitsubishi shouldn't be here. In the early part of this decade, it was saddled with debt. However, with its returning to Japanese ownership, tough decisions being made, and the model line up quickly revamped, profitablity soon returned after years of losses. In 2005, Mitsubishi made 1.325,000 cars/LCVs, 2.1% of the world market. Just 50% were made in Japan, 10.5% manufactured in Thailand, 10% in Malasia & nearly 7% in th US. That has changed quite a bit by 2008, as the figures below testify. Total 2008 production was 1,315,000 (2% of worldwide production):

Japan 65% 850,000
Thailand 13% 175,000
USA & The Netherlands 4.5% 59,000 each
China 3.5% 46,500
Brazil 3% 39,000
Indonesia & Taiwan 2.4% 32,000 each
Rest 2% 26,000

Heavy reliance on Asia is not healthy, and Mitsubishi was hurt by a slump in Asia area in the late 1990s. The Japanese won't easily allow brands to fail, both to save face and reputation, so it was rescued by Japanese money. In most other countries, Mitsubishi would have gone, but it is doing OK now. It also has started to make SUVs for PSA and that type of deal could be a good way forward.

Frankly, its cars are not quite up to the standard of other Japanese brands. It had nearly 7% (290,000) of the Japanese car market in 2001, but has now slumped to a tad over 3% in the ten months of 2009 (92,000). Times are tough too and it cannot be easy for a company placed where Mitsubishi is, making mass produced cars in modest volumes.

The bottom line: I personally wouldn't buy one.

04 November 2009

Mazda Production: 2008

With Ford having a share of Mazda, much product sharing goes between the companies, a very useful arrangement for both of them. This has helped Mazda to be competitive, despite it's relatively small scale of operation. 1,285,000 cars/LCVs were made in 2005 and 1,350,000 in 2008, for about 2% world market share.

Unlike many other auto makers, Mazda has increased local production at the expense of overseas car making. Japan made 67% of the vehicles back in '05, but is now 80%! As to why this shift has been made and if it will continue in that direction, I do not know. I wouldn't have thought it the way to go if you want to be a global player.

Car making by country for '08:

Japan 80% 1,075,000
China 8% 105,000
USA 6.7% 91,000
Thailand 3.6% 48,000
Rest 2% 27,000

The heavy reliance on Japanese made cars isn't good. Japan traditionally kept the Yen low to help manufacturing, but the US downturn saw money fleeing to Japan like a tidal wave. The Yen soared and Japan suddenly was not a good place to make cars. Mazda must have felt that badly. Too many eggs in one basket is never a good idea. The cars themselves are sporting and different, but not as robust as some other Japanese brands. On the Japanese market, Mazda is a minnow, with less than 5% of the domestic market, and slipping.

The bottom line: If not for Ford, Mazda would be really struggling.

30 October 2009

The Best In 2009

In various motoring fields, there are those that stand out for some reason. To celebrate these successes, this is my 'Best' list:

Most Reliable. I would say Lexus. It seems to get top spot whenever this feature is rated. As for an affordable, regular hack, Toyota have always been viewed as very reliable. Pity they are so boring with it.

Best Value. Both Hyundai and Kia. They sell very strongly on their price advantage. They are now offering more and more class with each new model, yet still seem to undercut the opposition on value for money. It baffles me as to why Korea continues to protect them with high import tariffs on imports in their domestic market. They don't need it any longer.

Most Beautiful. Aston Martin. Each and every variant within the range is like a super model, gorgeous. As for more affordable marques, none seem to get it right across the board with all their models.

Strongest Brand. Toyota. According to Interbrand, it came in 8th for all categories and top in the automotive field.

Biggest Selling. Toyota in 2008, just pipping GM. VW Group is closing in though, while GM is falling away. Toyota's two main markets are the US and Japan, both in bad shape. Toyota has the broadest success overall of any car maker though.

Best Prospects. VW Group. It's strongest markets are China and Germany, both doing well. It has also saved costs cleverly through it various brands, without getting complaints about Audi sharing a Skoda platform.

Most Underrated. Jaguar. The current range of XK and XF along with the new XJ equals or surpasses anything the competition has. Yet Jaguar are struggling to sell cars. British industry has incredible design talent and lousy marketing skills. People would buy a turd if it had a BMW badge on it, such is the German marketing machine. Watch how they do it and learn, Jaguar.

Safest. Volvo have led the way with safety over the years and still seem to lead, although the gap may have narrowed.

The bottom line: Toyota may be best overall, but I get the impression they have faltered of late for the first time ever, and for once have a air of vulnerability.

26 October 2009

Chinese Whispers

Many countries provide car sales figures from government agencies, importer associations or the like. They give out sales data freely in varying degrees of detail that are accurate from year to year. There may be variances in the way they are tabulated from one country to another, but not to any great degree. On the the other hand, some countries do not seem to have any statistics available except what is issued on the payment of sizable fees. Sometimes, one comes across the latter stats by chance and can get an idea of what's going on.

China car sales data is of the second type. The problem is it is hard to find and what you do find is scrambled, just like the Chinese car industry itself. The problem seems to be that China imposed steep import duty on the importation of fully built up cars. To sell cars then, one then needed to make them locally. The government then insisted that this could only be done with a Chinese joint venture partner. I presume this is so they can learn the car making skills, which they can then use to make their own cars too.

Anyway, it works out that an overseas brand of car can be made by more than one joint venture. Then the Chinese partners also can make their own brands too. Most data you find is of production and some counts all production irrespective of the make, while others report it by the brand. It's hard to tell the difference and if you try, it turns out a mess. Much like the industry as a whole.

The upshot is: the largest car market in the world (by units sold at least) does not have any standard accounting of sales or production by brand that you can rely on. What's the big secret? Is it a matter of Chinese whispers?

The bottom line: Wake up China. You can do better than this.

24 October 2009

Citroën Production: 2008

Citroën means lemon, due to the founders ancestral heritage of lemon selling in Amsterdam. Anyway, it also means a poorly made car which makes it an unfortunate name. Production has been solid of late, and Citroën has held world market share for the last few years. In 2008, 1,380,000 cars/LCVs were made, roughly the same as 2005. 48% of production was French, with Spain on 32% in the year of '05. That means 80% of cars were made in two countries, adjacent to each. That makes little sense to me as factories need to be close to markets if possible. That will surely happen in the future.

A new plant in lower wage Czech Rep has helped but the brand relies too much on Europe. Car making by country is as follows for '08:

France 43% 590,000
Spain 25% 340,000
Czech Rep 8% 110,000
China 6.5% 90,000
Italy & Brazil 4% 55,000 each
Turkey 2.4% 34,000
Portugal 2.3% 32,000
Portugal 30,000 1.5%
Rest 2.5% 35,000

Citroën is a contradiction in how it survives. As part of the PSA Group along with Peugeot, it sells similar products to its stablemate and is rarely seen outside of Europe. It's slightly quirky style and history gives it a loyal following. It also keeps going by virtue of development cost savings with Peugeot but one senses that may not be enough long term.

The bottom line: Citroën needs to broaden it's range and global presence. Reliability and a more solid feel about them would help too.

22 October 2009

The BAM Effect

What is the BAM effect? Well, it stand for BMW, Audi and Mercedes Benz. Individually, they compete against each other, but collectively they put up a persuasive argument that buying a German brand executive car is the way to go. In the same way a tsunami wave persuades you to head for the hills. Now, apart from the BAM brands, the other premium marques that are sold widely are Volvo, Lexus and Jaguar/Land Rover (JLR). The latter come from differing countries and don't have that block effect to promote their nation as a maker of fine automobiles, in the way Germany does.

So I decided to compare the market share in 26 varied markets to see how the BAM effect works. The statistics used are for cars/SUVs and for year 2008. Some countries exclude certain models and include others, so it's not perfect. For Land Rover, I have included all 'excludes' so to speak, so the figures slightly favour JLR. However, it still gives a good picture overall. The percentages are what the BAM brands, and others individually, get in a given country. All their sales are combined which equals 100%, and then divided up between them to see what each individually gets. Now for the stats.

BAM are strongest in Germany (95%) , Portugal (90) , France (89) , Austria & Spain (88) , Greece (87), Italy (86), South Africa or RSA (84), Belgium (83) and Switzerland (81). The Bam trio do worst in Sweden (41%), Russia (49), Finland & The US (60).

Lexus does best in the US (28%), Japan (21), Korea & Canada (20). It fails miserably in Brazil, Germany & Italy (around 0.5), Finland, Belgium, Norway & Austria (less than 1%).

Volvo win in Sweden (58%), Finland (37) Norway (30) & the Netherlands (20). It loses out in Germany (3%), RSA (4) and NZ (5).

Finally, JLR score in Brazil (25%), Russia (20), UK (15) NZ (13) & Eire (11). They strike out in Sweden & Germany (1%), Portugal & Norway (2), Greece, Finland & Japan (2.5), France & Austria (3.5).

Three nations didn't get listed here as they are less extreme in their buying preferences. These were Romania (like JLR 10%), Australia (Lexus leaning for 11%), and Poland (keen on Volvo 18%).

When one looks at the chart as a whole, BAM brands dominate in Europe, Volvo are strong in Scandinavia, Lexus Asia and North America while for JLR it's in the emerging nations. The least international of these brands seems to be Lexus.

As the BAM marques widen their range and aggressively attack world markets, expect their share to rise in 2009. The others, competing individually will slip back.

The bottom line: The BAM effect - three brands form one nation in the premium segment - works.

18 October 2009

ADAC Quality Survey

ADAC (Allgemeiner Deutscher Automobil-Club) is Germany's and Europe's largest automobile club. In a customer satisfaction survey it did in 2008 I believe, the results were interesting. The best score was for Subaru on 1.2. Next with 1.3 were Jaguar, Honda and Porsche. The score of 1.4 went to Daihatsu, Mazda, Mitsubishi, Saab and Toyota. At the other end, 1.8 scores were for Fiat, Smart and VW. 1.9 for Land Rover and Peugeot. 2.0 for Chevrolet (Daewoo cars once) and 2.1 for Renault all alone at the bottom. The nine at the top were comprised of six Japanese brands, while there were one each for Britain, Sweden and Germany. The bottom seven were made up of two each for French and German brands, one a piece for Britain, Korea and Italy.

It's probably fair to say that satisfied customers often results in repeat sales as punters return. However, I don't have statistics of how many stay with a brand in Germany. It was of interest to see that German brands were not that good at satisfying their buyers, although most German car buyers are very narrow minded in their loyalty to local product in their new car purchasing.

The bottom line: The Japanese are good at satisfying their customers. Jaguar does too, but they just need more customers.

09 October 2009

Kia Production: 2008

Kia claim they have the power to surprise, but I must say their range does nothing to surprise me. They do sell rather well, based on value rather than surprise factor or innovation. The new model Soul (pictured) is trying to break that mould. Production of Kia cars/LCVs went from 1,140,000 (1.8% worldwide share) in 2005 to 1,395,000 (2.1%) in 2008. One change is that whereas 95% of Kias were made in South Korea in 2005, that has quickly moved down to 76% by 2008. They were still only made in three countries in 2008, as the statistics below show:

Korea 1,050,000 76%
Slovakia 202,000 14,5%
China 140,000 10%

Kia is benefitting from many of the scrappage shemes doing the rounds presently, as they do make mostly smaller vehicles and these have benefitted the most. However, when they cease, as they are now doing, that will reign back increase. Still, one can only assume they will continue to grow steadily for the time being. How they move forward with new models and an expanded model range will determine how they fare further down the line.

The bottom line: The Chinese are coming, so moving up in quality is where Kia is at the moment.

Daimler Production:2008

Daimler (or Mecedes Benz to the great unwashed) has been holding it's world market share of late. In 2005, 2.2% (1,350,000) and in 2008 2.3% (1,516,000). Of the 2008 figure, 1,240,000 were cars and 276,000 LCVs. 81% of MB production was in Germany in 2005 and it is now 74%, so not a vey international company when it comes to where the cars are produced. In 2008, the country breakdown:

Germany 1,120,000 74%
USA 152,500 7%
RSA 55,000 3.6%
Argentina 31,000 2%
Brazil 27,000 1.8%
China 25,000 1.6%
Rest 6,000 0.5%

One would think they would try to make more vehicles away from the Fatherland but it doesn't seem to be hurting them one bit, so why would they?
With Daimler's reputation for building solid, premium cars, it's future will be stable. I must say the cars do nothing for me. They are the 'Toyota' of the premium sector and that safeness appeals to many obviously.

The bottom line: Steady as she goes.

04 October 2009

Chrysler Production: 2008

Chrysler is a surprisingly narrow company. By that I mean it makes and sells nearly all its vehicles in North America. At times it has threatened global expansion but it hasn't done so. As to why, I can only assume it was they didn't make cars that had enough international appeal. Or perhaps didn't try very hard enough. Either way, it has ended up a case of too many eggs in one basket. Anyway, Chrysler's world market share plunged from 4.4% in 2005 to 2.8% in 2008. Yet 2009 will be much worse. Chrysler production for 2008:

USA 1,100,000 58.5%
Canada 480,000 25.5%
Mexico 270,000 14.5%
Austria 28,000 1.5%

With shrinking market share in its few key markets, it was all over rover...until Fiat came along. They have taken control and have designs to use Fiat's small car expertise to help them, with Chrysler's large car, SUV experience helping Fiat. Sounds good but I am a little sceptical. Chrysler product needs much work in many areas. I would like to say it can only go up from here, but it can and will go down.

The bottom line: Can Chrysler become profitable any time soon? Hmmm.

13 September 2009

Peugeot Production: 2008

Peugeot is the slightly larger part of PSA, or the Peugeot / Citroen company. Peugeot made 2 million cars in 2005, for 3.2% of world car/LCVs manufacturing. In 2008, it had slipped below 3%; 2.9% to be precise. Unlike the ever expanding range of vehicles within the German brands, Peugeot has settled for simply replacing models within the existing range. A careful approach, but one that will inevitably see market share fall over time.

In 2005, 61.3% of Peugeot's were made in France. Despite closing their UK plant, local production has slid to under 40% in '08. A new plant in lower wage Slovakia has been a major factor in the shift to more car manufacturing outside of France.

Car production by country is as follows for '08:

France 39% 760,000
Iran 15% 290,000
Spain 11% 215,000
Slovakia 9.5% 185,000
Czech Rep 5.6% 110,000
Argentina 4.7% 90,000
China 4.2% 80,000
Brazil 4% 77,000
Italy 55,000 2.9%
Russia 3.6% 73,000
Iran 2.8% 56,000
Turkey 31,500 1.6%
Portugal 30,000 1.5%
Rest 2.7% 24,000

Peugeot is a major player in Europe and Latin America but is limited elsewhere. It now sells rebadged Mitsubishi SUVs, as do Citroen also, in an attempt to broaden its product range (see pic). It shares engines with other makers and closer links with Mitsubishi, BMW or another maker are needed as the pressure goes on the world's car makers in these tough economic times.

The bottom line: Peugeot is currently benefiting from schemes to promote sales of smaller cars, but it needs to share costs more often with other manufacturers to hold its own.

12 September 2009

BMW's Shame

Once upon a time BMW decided it needed to expand its interests, like many other car companies were doing. It saw MG Rover as that timely expansion. MGR was a small company with a successful tie-up with Honda. The major shareholder was BAe and Honda had a minor share. MGR shared much with Honda, crucially platforms. Its success depended on the costs saved. BMW bought BAe's share of MGR and looked forward to the continued joint venture between MGR and Honda.

However, BMW didn't ask the very private Honda if it wanted BMW's involvement. Honda didn't mind BAe, as it was an aerospace company and its technologies were of no interest to it. BMW was a different kettle of fish. Honda didn't want a car company involved and pulled out. BMW's cars are rear wheel drive so platforms could not be shared with MGR's front wheel drive range. MGR was too small to stand the cost of designing platforms for just itself. Without the cost savings of the Honda joint venture, financial losses followed and BMW showed little patience.

BMW was too proud to admit mistake of not checking with Honda before acquiring MGR. It instead poked fun at the sick 'English patient'. MGR was fine when they bought it, but it was now a liability. However, BMW didn't want to be the company that crashed MGR, so they worked out how much money it would cost to wind it up and paid that amount over to the new owners, some former managers. It seemed they wished MGR well. Ah, but they took the plans for a new model with them (which was nearing completion) back to Munich. It was of no use to them, but essential for MGR's survival, as a new car was desperately needed. The new owners had neither the time nor money to do a new car. Thousands of workers lost their jobs and a piece of motoring history ended. BMW should have stood by their mistakes and put it right. Shame on you BMW.

07 September 2009

Renault Production: 2008

The French like to support their car makers and Renault has been able to rely on strong home support. Some of it's export success, especially in Europe has been garnered by sharp pricing. It was number one in Western Europe between 2002 to 2004 but profits were being hurt. Recently, Renault embarked on making money before market share, sales have fallen sharply and now the brand is 5th in WE. It could soon be 6th! In 2005, Renault made 2.33 million cars/LCVs with a 3.7% share of the worldwide pie but in 2008, it had fallen to 2 million and only 3.0% share. Consider also that of late, Renault production has increasingly including rebadged Dacias (Renault's low cost Romanian brand) in Russia and other markets. Without that things would have been even worse for Renault.

Car making by country is as follows for '08:

France 36% 720,000
Spain 16% 325,000
Turkey 14% 285,000
Slovenia 10% 200,000
Brazil 6.5% 130,000
Argentina 3.7% 75,000
Russia 3.6% 73,000
Iran 2.8% 56,000
Korea 2.2% 45,000
Colombia 1.7% 34,000
UK 1.3% 26,500
Rest 2.0% 44,000

That is a good spread of car making but little presence in many markets, including the biggest two doesn't help. Renault makes interesting cars and headhunting one of Mazda's top designers may bring new and improved direction. It is benefiting from its collaboration with Nissan but there are still many segments Renault isn't a player in.

The bottom line: It's tough out there and I feel that rock bottom hasn't been reached yet for Renault.

Hyundai Production: 2008

Hyundai has a very protected home market to dominate, but has struggled to establish itself on the world stage. Some success was achieved through cheap and cheerful approach, but that isn't the profitable route and the Chinese will soon be entering that end of the market. Recently Hyundai has been improving quality and image, while still retaining a slight price edge on the comparable opposition. It is working and Hyundai is one of the few companies to be doing well presently. In 2008, Hyundai's market share was 3.8% and over 2.5 million units produced. An impressive gain over recent years. As for Hyundai's manufacturing by market in 2008:

Korea 56% 1,420,000
India 19% 475,000
China 12% 300,000
USA 9.5% 235,000
Rest 3.3% 90,000

So production is very much about Korea but that is reducing steadily. One can only wonder why the Korean car market is so protected. The cars can stand on their own merit but obviously political reasons are behind it. Still, it is unreasonable to expect others to take your products and be so restrictive the other way.

The bottom line: Hyundai is on a roll and will continue its growth for the foreseeable future.

A Wee Fuel Solution

A scientist at Ohio University has developed a catalyst capable of extracting hydrogen from urine. Gerardine Botte claims the device uses significantly less energy than is needed to extract hydrogen from water and says it could power hydrogen fuel cell vehicles in the near future. One of hydrogen’s biggest stumbling blocks to use as an alternative fuel is the amount of energy needed to produce it.

And then there’s the matter of distributing it. Botte says her gadget eliminates such problems because it’s small enough to integrate into an automobile. Urine is also readily available — your body produces two to three liters of it each day, and it is the most abundant form of waste on the planet. We could treat waste water while fueling our cars.

It would also be an answer for people like my mum who wants a toilet ten minutes into a ride and each hour thereafter. It would encourage car pooling as there would be more urine on tap so to speak. If you were running low on fuel and the next pump was some way ahead, each person could just swig another litre of water and that would soon sort the problem. You may also be more inclined to pick up hitch hikers if they had a sign saying "I'm busting". If you ran out of fuel in the country, you could talk nicely to any cows nearby.

Bottom line: There are so many ups to this idea, it's got to be a winner.

Suzuki Production: 2008

Suzuki is a company that would like to have global success but struggles to get there. It suffers from a range of vehicles built around small SUVs and small cars. Not the range to achieve much, in fact it overachieves when you look at the range. Its success is based around two markets, Japan and India. Outside of those countries, it is generally a small player.

In 2005, Suzuki made 2.07 million cars/LCVs and 2.6 million in 2008, its worldwide share up from 3.3 to 3.9%.

Production by country for 2008:
Japan 46% 1,220,000
India 29% 760,000
Hungary 11% 282,000
Pakistan 3.4% 89,000
Indonesia 2.7% 71,000
Rest 0.7% 16,000

This is hardly the profile of a world player, with sizable production limited to a few countries. Suzuki are planning to release a larger car very soon but it will have to do much better than that to progress. I wouldn't buy a Suzuki although there is nothing wrong with them as such. They do not excite or in the case of the big selling Swift, is poorly packaged and not very frugal with the fuel.

The bottom line: Success at home and getting a dominant position in India's growing market have been winners, but apart from that it is all about settling for crumbs.

02 September 2009

Nissan Worldwide Production By Nation: 2008

In 1999, with Nissan facing severe financial difficulties, it entered an alliance with Renault. The outcome of that is that Nissan is 44.4% owned by Renault and 15% the other way around. The two companies work closely in "develop synergies while conserving the corporate culture and identity of each brand". Nissan sales include its upmarket Infiniti brand, which is produced mainly for the North American market.
In 2005, Nissan made 3.35 million cars/LCVs and 3.25 million in 2008, so its worldwide share dropped from 5.4 to 4.9% in that period. In the same period, Japanese production dropped from 39% to 35%. Manufacturing by country as follows:

Japan 35% 1,150,000
USA 17% 545,000
Mexico 14% 450,000
UK 12% 385,000
China 12% 380,000
Spain 5% 155,000
Rest 3% 110,000

Nissan has rebounded well since its tie up with Renault, with profits returning. Infiniti needs to get a global presence and isn't doing that well. It seems more successful in its SUV range than in cars, which are somewhat bland. Nissan has a good reputation for build quality.

The bottom line: It could do with a more exciting car range to move forward in the sales stakes.

22 August 2009

Honda Production: 2008

Honda is an independent car company that has shunned mergers and buy outs. It hasn't got into manufacturing commercial vehicles either. For all that it is successful by building cars with good engines and reliability.
In 2005, Honda made 3.3 million vehicles and by 2008 4.3 million, so it is going the right way. World market share was up in the same period from 5.4% to 5.9%. Japanese production of Hondas dropped from 37% to 32%, now 1.264 million. Production by other countries are as follows:

USA 25% 990,000
China 12% 475,000
Canada 10% 380,000
UK 6% 230,000
Thailand 4% 160,000
Brazil 3.5% 133,000
Rest 7.5% 227,000

Honda is big enough and international enough to go it alone. I sense the best it can do now is hold the position it has. I cannot see it going on to ever be top car maker in the world, despite that being the intention when Mr Honda diversified in to cars. The world's motorbike markets were conquered, but the motor vehicle industry is bigger and more competitive.

The bottom line: Honda is too conservative to challenge for the top spot.

19 August 2009

Lotus Evora

This new model is named after a city in Portugal. Évora is inland from Lisbon and a town of some interest to visit. But I digress. How good is this new car? I haven't driven one or even seen one in the metal but comparing test reports soon gives an idea of what is hot and what is not about a given vehicle.
Starting with the outside, it looks good, very good in fact. Stylish, purposeful and distinctive.

Inside it is a 2+2, meaning it can seat four but limited in the rear pew for space. Quality is up on previous Lotus'. Nice driving position but is let down somewhat by the stereo and satnav. The boot (trunk) is at the rear and is roomy. The handling is superb and the 3.5 V6 engine is good too, although a turbo would give it more thrust. It goes fast when you want to and yet is easy to drive every day, something many sports cars fail to manage on both fronts. Lightness gives good fuel economy and it produces low emissions too.

Lotus expect to make about 2,000 cars per year which is good for a company that only sold slightly more than that in 2008.

The bottom line: A great mid engined car that for the price (under 50k in UK Pounds) has no real competitor.

18 August 2009

VW Production: 2008

VW has been relentless in it's sales growth. It has been adding to its range of models, been aggressive in marketing and has a reputation for building solid cars too. But perhaps the main factor has been its dominance in the world's fastest growing major market, China.

In 2005, VW had 5.2% of the world's car/LCV market, in '08 6.5%. Sales have gone from 3.3 to 4.3 million. On top of that volume brands Audi, Skoda and Seat need to be added to make up the VW group. Production as of 2008 by country:

Germany 34% 1,450,000
China 19% 815,000
Brazil 17% 720,000
Mexico 10.5% 450,000
Spain 6% 260,000
Poland 4% 175,000
Rest 10% 430,000.

VW's hindrance is that in too many markets it is still a small player, whereas the company it must beat to be number one - Toyota - is strong everywhere except Europe (and it's not too bad there either). VW has the drive and a wide, solid product range to continue improving it's world market share. It's in the process of absorbing Porsche into the group as well.

The bottom line: Toyota will no doubt be looking over its shoulder as VW Group closes in.

17 August 2009

Triumph Motorcycles

I have never owned or learned to ride a motorbike. My father did and had several scrapes with cars. One day, a lady pulled out in front of him and he hit her front tyre. He sailed over the bonnet and landed on his head on the road. Helmets are lifesavers. Mum put her foot down and said no more bike riding for dad. That was the end of that. There is a side to me that would like to ride and remember sitting on dad’s bikes in the garage as a small boy and pretending to ride. Still, I never liked the idea of riding in the rain and a car seemed so much more practical. Plus having a very protective mum meant I went straight to cars and that is how it has stayed. Nevertheless, one bike manufacturer I always liked was Triumph. The manly noise, the imposing size and the name too all hit a note with me.

It was a German immigrant to the UK that started making bicycles. In 1902, Triumph made its first motorbike. The company survived until the 1980’s by which time Japanese technological advances had led to their dominating the motorcycle markets of the world.

In 1983, when Triumph went into receivership, I thought another British icon of industry going belly up. However, a shrewd businessman, John Bloor bought the name and manufacturing rights off the receiver. Usually these things don’t work, which is why I called him shrewd because he has done a fantastic job of making it work. Initially, Triumph bikes were made under licence in tiny numbers while he hired designers to work on new models. They also visited Japanese factories and modeled the new Triumph production on their techniques. John Bloor spent a lot of money getting everything set up, including a new factory at Hinckley, Leicester, built in 1988. Then came the bikes, one success after another. He did his homework, got good people, spent money and then started reaping the rewards. Not many British businessmen want to go to that trouble to achieve anything, hence why virtually every company manufacturing in Britain is foreign owned. In 2008, Triumph made 50,000 bikes, about 28,000 sold in Europe, 13,500 in North America and the other 8,000 in the rest of the world.

Today, Triumph motorcycles are made in the UK and Thailand (since 2003), a smart move as the cost of UK production is high. All engines are UK sourced however.
This is a success story that too rarely happens in the UK. It shows that the UK has the people to make things happen. The problem is shortsighted investors and management. If you do your homework, make a good product and do it efficiently and reliably, you win. Simple as that.

The bottom line: Well done John Bloor and your excellent team.

16 August 2009

Freelander Does It Tough

Recently I commented on a four way shootout of smaller SUVs and the Freelander won the contest. Now I have just read in my August 2009 Top Gear NZ magazine about a similar head to head. It was the Audi Q5, Volvo XC 60 and the Land Rover Freelander. They were taken around the Flinders Ranges in South Australia on dusty roads. Nothing too serious but testing all the same.

The conclusion was that had there been just the Volvo and Audi, it would have been a tough call. The final sentences: "But the Freelander makes the choice a simple one; out here in the scrub it is every one's favourite. And for me it does a better job of being both a car and an SUV, and in this segment that's what matters most. Good things do indeed come in small packages."

That is a recurring theme in tests and no doubt is reflected in sales figures. Er, no, not at all. From Jan-July '09, Land Rover made about 17,000 Freelanders, Volvo 32,000 odd XC60s and Audi in the region of 57,000 Q5s. So in essence, the better the vehicle, the less it sells. I don't get that except to say that purchases aren't based on buying the best car, but rather it depends on the badge.

The Freelander is made at Halewood, c. Liverpool, UK. They are about to lose the X-Type from production and the workers do a fabulous job there. The product is top notch too. I hope people get behind this fine product and those that assemble it.

The bottom line: The Freelander is the sensible choice.

13 August 2009

Ford Production: 2008

Ford has not been having the best of times lately. It has had to negotiate reduced benefits for its workers in the US and cut back production as sales declined. Back in 2005, Ford had 9% of the world’s car/LCV market but that dropped to 7% in 2008. That is nearly 1 million units less! The 2008 total was 4.75m. 51% of the cars/LCVs were made in the US in 2005, but by ’08, that crashed to 33% or 1.6 million units. This is mainly due to truck sales falling away in large numbers, a staple of Ford US. In most other countries, their share increased of Ford production. Now the following production figures by country:

Germany 16.5% 790,000
Spain 7.5% 360,000
Canada 6.5% 310,000
Mexico and Brazil 6.4% 300,000
Belgium 6% 290,000
Turkey 5.7% 270,000
China 5% 245,000
Rest 7% 330,000.

Ford has been through the pain of restructuring and thanks especially to its robust European operation, is in a reasonably sound position. Sales of late have been most encouraging both in North America and Europe.

The bottom line: Ford needs to stay sharp, as there is still much work to be done.

03 August 2009

GM Production 2008

GM understandably had a sales slump in 2008, as it swaggered from one crisis to another. Therefore, for car/LCV sales, 2007 production of 9.2 million slid down to 8.15m for 2008. That's a worldwide market share drop from 13.3% to 12.3%, in production terms. GM has been moving production away from mature markets to emerging ones, which is cost effective. US plants now makes 28.6% of cars/LCVs, down from 37.5 in '05. China now accounts for 12.6% of production, up from 3.9% from '05. Germany is one established country that has held it's share over the previous four years, steady at 5.9%. Production by country listed as follows (OICA) (figures in ,000):

Country '08 ('07)
USA 2,333 (2,821)
China 1,027 (989)
Korea 800 (941)
Brazil 604 (577)
Canada 577 (933)
Mexico 508 (467)
Germany 482 (557)
Spain 427 (490)
Poland 322 (340)
Uzbekistan 195 (170)
United Kingdom 175 (196)
Russia 160 (109)
Belgium 132 (196)
Australia 118 (106)
Argentina 111 (115)
Thailand 104 (98)

So a wide spread of production locations. Of course, with European operations Opel/Vauxhall in the process of being sold, this will change things markedly. I could have seen benefits in GM staying as it is but it has never intergrated the US/Euro business as it should to save costs. GM is now so desperate, it has no time or money to do so.

The bottom line: Expect a lot more pruning before a very lean GM emerges.

28 July 2009

UK Engine Production

While UK car making has slipped over the years, its engine production has increased. In 1999, 2.1 million engines were made. 50% Ford, 13% Nissan, 11.5% MGR and 9.5% Land Rover. Since then GM, LR and MGR have all ceased UK engine production and BMW has come in. So what is the situation today (2008) in Old Blighty with regard to who makes what?

1) Ford; two plants, Dagenham, c. London, and Bridgend, Wales. 1.75m engines (62%).
2) BMW; Oxford. 370k (13%).
3) Toyota; Deeside, Wales. 300k (10.5%).
4) Honda; Swinton, Wiltshire. 200k (7%).
5) Nissan; Sunderland. 115k (4%).
6) Cummins; Daventry, Northamptonshire. 80k (3%).

With 1.65m vehicles made in the UK and over 2.8m engines, clearly many engines are exported to overseas plants. Most of the exporting is done by Ford who supply European plants with their requirements and in future American ones too. BMW make their 4 cylinder petrol engines in the UK, for the MINI and BMWs in Germany.

The bottom line: UK engine making is on the up.

24 July 2009

Cash For Clunkers/Scrappage Schemes

In Europe, governments have tried to stimulate car sales with incentives to get people buying them in greater numbers. The German market has gone through the roof, such is its success. In other markets the reaction has been more moderate, although these schemes do get Joe Citizen into showrooms in larger numbers. Some manufacturers have gone beyond what the government offers; to sweeten the deals even more. The terms surrounding the enticements favour smaller and more environmentally friendly cars.

The US is embarking on a 'cash for clunkers' deal now and it will have some success for smaller cars, most of which I assume will be imported. The Korean car industry will be rejoicing, as it already has scored well in Europe over this and should do likewise in the US of A.

I cannot help but think that unless economies strenghen quickly, the slump after these deals end will be large indeed. I also wonder about the environmental benefit of encouraging more cars on to congested streets. The downturn has actually been good for the earth. Making more cars isn't. So it seems what is good capitalism is not so for the planet.

The bottom line: What a mess man has got into.