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.