Short news automotive
September 26, 2013 Category Automotive Metals & Minerals, Short news automotive
- Car horns are used 40 times more often in China than in Europe. That was one of the lessons French carmaker PSA Peugeot Citroen learned when it expanded in China. “In Europe, a car horn is used 10,000 times on average,” Pierre-Frédéric Lebelle, head of the company’s Shanghai-based China Tech Center, told Le Monde. “In China, it’s 400,000 times.” Peugeot is not the only carmaker adapting its horns to Chinese tastes. Ford also came up with an electronic horn for its Chinese customers.
- A man in Shenzhen has been making a living by crashing cars for nearly three years, averaging to one crash every three days. The man, surnamed Li, filed 334 insurance claims between the end of 2010 and May 2013, costing insurers millions of yuan and pocketing some CNY357,000. Li took advantage of slow traffic during the morning and evening rush hours, when he needed to accelerate only a little to bump the car ahead, thereby avoiding major injury. He then bribed mechanics to increase the damage estimate on the invoice, pocketing the difference.
- Shanghai opened China’s first electric car rental outlet. The store in Jiading district, where the Electric Vehicle International Demonstration Zone is located, was launched by Shanghai-based eHi Auto Services Co which aims to deploy 200 electric cars in the city this year. Customers can rent 20 Roewe E50 electric cars made by SAIC Motor for CNY149 each daily, cheaper than renting gasoline models of the same size. The company will provide free recharging services at the electric car rental outlet. Another two outlets will open this year in Jiading with more planned for other districts in the city.
- In 2012, Mercedes-Benz sold 196,000 vehicles in China, its third-largest market. Though sales increased 1.5% from the previous year, it was only a fraction of the growth of its main competitors. “That was a lesson for us that if you want to be successful in China, you have to focus on China – China’s needs and China’s customers. So we need a change,” Nicholas Speeks, the new President and CEO of the company’s China operations said. A new integrated sales company established in March is expected to boost sales. Mercedes-Benz is opening 75 new dealerships this year in 36 new cities, 45% of which will be third-or fourth-tier cities. By the end of 2013, there will be 337 dealer outlets covering 151 cities.
- The increasing number of vehicles on China’s roads also requires growth in road assistance services, according to Yukio Ito, CEO of Allianz Global Assistance China. The company is developing a one-stop service that integrates roadside assistance with car insurance and warranties.
- Honda Motor is planning to produce Acura cars in China with Guangzhou Automobile starting in 2016 in an effort to tap growing demand for upscale vehicles. Because of high tariffs on imported luxury cars, it is difficult to generate volume unless a carmaker produces the cars in China. Audi, Mercedes-Benz and BMW all produce models in China with local partners. Demand for premium cars in China is likely to reach 2.7 million a year by 2020, a level that would allow China to displace the United States as the world’s biggest market for upscale cars.
- Local dealer Fortune Dragon has introduced the Italian Tazzari Zero electric vehicle to Hong Kong. With a top speed of 95 km/h and a range of 145 kilometers on one charge the two-seat vehicle can be registered only as a quadricycle, which is not allowed on highways. A upgraded model is classified as a passenger car, but is priced at a hefty HKD350,000. Electric-powered vehicles remain a niche market in Hong Kong, despite various incentive programs. As of the end of April, only 443 of the 700,000 registered vehicles in the city were run purely on electricity.
- Vehicle imports slumped 10.7% in the first half, to 526,000 units, as the domestic demand slowdown of the past two years drove up inventories of foreign cars. It was the first half-year contraction since 2006, when China implemented its World Trade Organization (WTO) commitment to lower the import tariff for vehicles to 25%. As imported vehicle sales are still increasing this year, this shows that dealers are reducing their high inventories, according to Wang Cun, Senior Manager of China Automobile Trading Co, the country’s largest vehicle importer. By segment, sport utility vehicles (SUVs) continued to dominate imports, with 61% of overall sales.
- Auto production and sales reached new highs in the first half, hitting 10.75 million and 10.78 million units, respectively, data from the China Association of Automobile Manufacturers (CAAM) showed. But domestic brands have seen their market share shrink due to rising competition from foreign brands and tightened vehicle ownership regulations. Chinese passenger vehicles accounted for 41.2% of total passenger vehicle sales in the same period.
- Foreign carmakers are reaping exorbitant profits selling imported luxury cars in China and should face an anti-trust investigation, Xinhua news agency said as some imported cars were twice as expensive in China than in overseas markets. But Volkswagen’s luxury division Audi said vehicle prices in China were comparable to other countries once taxes and other factors were taken into account. China has become a key market for the makers of luxury cars, with 2.7 million expected to be sold each year by 2020, overtaking the United States as the world’s largest market. The Xinhua report said tariffs on cars brought into China from abroad are 25% for any type of car. There is also an additional VAT of 17% and a consumption tax based on engine size.
- BMW Brilliance Automotive is recalling 143,215 5-series cars made in the three years from August 2009 over power steering defects. The planned recall comes after BMW in late July failed to get Chinese government approval for a CNY9.2 billion plant expansion in Shenyang, Liaoning province. China’s Environmental Protection Ministry said it had rejected the proposal as it failed to pass environmental tests.
- Privately-owned automaker Chery will open its new plant in Brazil this year. In 2011, Chery Auto started to build the plant in the city of Jacarei in Sao Paulo state with an investment of CNY2.45 billion. The company has introduced several models to Brazil including the QQ, Cielo and Tiggo, which won the country’s title “SUV of the Year” in 2010. In July, police in Sao Paulo started using Celer models, the first time that Chery cars have been used for public service in Brazil. Chery has 80 dealers in the country.
- Brilliance China Automotive, the Chinese partner of BMW, posted a 52% rise in first-half profit from a year ago to CNY2.03 billion, driven by a 60% increased profit contribution from its joint venture BMW Brilliance. Revenue for the period fell 8.5% to CNY2.57 billion, dragged down by a 12.1% drop in minibus sales. The joint venture sold 105,692 units in the six months, an increase of 30.8% from the same period last year. A total of 63,536 5-series cars were sold, a rise of 28.6%, while the BMW 3- series posted a 57.8% growth in sales to 32,126 cars.
- Luo Lei, Deputy Secretary General of the China Automobile Dealers Association (CADA), said the Association has been collecting data for the National Development and Reform Commission (NDRC) to check whether carmakers were making excess profits and setting minimum retail prices for dealers. “However, there is no clear sign that the government will soon be making it the next target of its ongoing anti-trust campaign,” he said. “The auto industry is just one of many under close watch.”
- Great Wall Motor’s first-half net profit rose 73.7% year-on-year to CNY4.09 billion as revenue increased 44.5% to CNY26.4 billion, with car sales growing 41.3% to 370,301 units. Domestic sales rose 51.6% to 328,387 units, of which 169,706 units were SUVs. Its overseas sales came under pressure as a result of competition, with exports dropping 7.8% to 41,914 units. The company said it expected domestic car sales to continue to grow despite concerns over an economic slowdown. In the next two years, the company plans to launch three new SUV models.
- Tesla Motors plans to enter the Chinese market have stalled after a businessman in China claimed trademark rights to the name. Its first shop-front in China, at the Parkview Green Fangcaodi mall in Beijing, remains boarded up. Tesla has still to complete product registration with Chinese authorities enabling the sale of the battery-powered Model S. Zhan Baosheng, a businessman in Guangdong province, owns the “Tesla” trademark in China, according to his agent Jinda Trademark, and runs a website using the Tesla China domain (www.teslamotors.com.cn). China has rules that protect globally-renowned brands, but that might not apply in the case of relatively new companies such as Tesla.
- Shanghai is considering introducing a congestion charge on motorists at peak times, in a bid to reduce traffic in downtown, but traffic experts believe that it would be difficult for the city to enforce the policy. The city has about 1.77 million registered private cars, and the number is increasing by 200,000 annually.
- BYD’s first half net profit surged to CNY426.9 million, 26 times higher than the CNY16.3 million a year earlier. Revenue climbed 13% to CNY24.2 billion. Sales of the company’s mostly gasoline-powered cars jumped 24.7% in the first six months to about 250,000 units, outpacing the 12.3% overall growth of China’s auto industry. Still, BYD expects profits to fall to between CNY3 million and CNY50 million in the third quarter, affected by a seasonal downturn in car sales, a drop in mobile-phone orders in an increasingly competitive smartphone market, and continued losses from the new-energy arm of the business.
- Mercedes-Benz will launch around 20 new or upgraded car models in China over the next two years. Daimler’s new China General Manager Hubertus Troska said the company will spend €2 billion over the next two years as it seeks to boost sales of Mercedes-Benz cars in China by a third to more than 300,000 cars a year by 2015. Last year, Mercedes-Benz sold slightly more than 200,000 cars in China, currently its No 3 market behind Germany and the U.S. The company also launched its redesigned E-class sedan in China.
- The 16th Chengdu Motor Show was held in August in the New International Convention & Exposition Center in Chengdu Century City with more than 400 carmakers, parts makers and dealerships participating in a record showroom space of 140,000 square meters.
- Beijing will reduce car registrations from next year in a bid to clean up its air and ease traffic congestion. The new limit will be announced in late November and be effective in 2014. The total number of vehicles in the city will be restricted to around 6 million by the end of 2017. The city had 5.35 million vehicles at the end of July. Beijing started to cap the number of new cars that could be registered annually in 2011 to 240,000 – one-third of the number registered in 2010. Would-be car buyers must participate in a license plate lottery. In August, the Municipal Transport Commission received 1.6 million new car license applications. One out of 80 applicants got car purchase permits as only 20,000 new license plates are now issued each month. Vehicle exhaust fumes are contributing 22.2% of PM2.5 particles in the city, exceeding the figure for industrial emissions.
- While high-end car sales will remain an important driver of China’s car market, after-sales services are expected to lead the sector’s growth over the next decade, a study by global consulting firm McKinsey said. China will see local car-sales growth slow to about 6% annually between now and 2020, compared to an average of 18% in the period since 2006, according to the study. However, high-end vehicles will outperform the overall market with growth of 8% to 10% a year. After-sales services, which includes car financing, spare parts and used-car sales, is an even more promising sector, with expected revenue growth as high as 20% a year by 2020.
- Sales of passenger cars and commercial vehicles rose 10.3% in August from a year earlier to 1.65 million units. On a monthly basis, sales grew 8.7% as the extremely hot weather dampened sales in July, according to the China Association of Automobile Manufacturers (CAAM). Combined sales so far this year have hit 13.95 million units by August, up 11.8% from a year earlier. Sales of sport utility vehicles (SUVs) surged 46.1% last month and were the key driver in the passenger car market. Sales of sedans rose 4%. Chinese brands achieved a 15.8% year-on-year rise in passenger car sales last month and captured a 38% share of the market, up 2.8 percentage points from July.
- The London Taxi Co (LTC) restarted production of the famous black cab, six months after the business was rescued by the Geely Group. Since Geely Group acquired the company from the administrators in February 2013, the company has cleared the inventory of vehicles that remained following the closure of the production facilities in 2012.
- The Trumpchi E-jet, a sleek, plug-in electric hybrid developed by state-owned Guangzhou Automobile Group (GAC), is set to make its international movie debut in the fourth Transformers film next year. The E-jet, which GAC showed off at the Detroit auto show in January, is a concept car, which the company currently has no plans to commercialize. Last year, GAC earned a profit of CNY1.1 billion on sales of around CNY13 billion.
- The Chinese government unveiled a much awaited new subsidy policy for energy-saving cars. A private buyer of electric passenger cars will continue to enjoy a maximum subsidy of CNY60,000, the Ministry of Industry and Information Technology (MIIT) said. A buyer of electric plug-in hybrids will enjoy a maximum subsidy of CNY35,000. The government will cut the subsidy at all levels by 10% in 2014 and 20% in 2015 to send a message that the industry cannot rely on subsidies indefinitely and should build its own strengths. Non-locally manufactured new-energy cars must account for at least 30% of local governments’ green car promotion targets.
- Sales of recreational vehicles (RVs) and caravans are booming in China, to the surprise of even car dealers. Last month, a four-day exhibition in Beijing ended with sellers pocketing CNY550 million in revenue. About 40,000 people visited the show, and more than 500 vehicles were sold. “A few years ago, there were only a few thousand RVs in China. But now the total number might reach tens of thousands, though no official figure has been given”, Li Mengsha, Sales Consultant with Beijing Camper RV, the largest distributor for RVs and caravans in China, said. When the first RV and caravan show was held in 2010, there were only about 40 vehicles on display, bringing a few million yuan in sales, but last year’s show already generated about CNY500 million in revenue. “The boom surprised everyone in the industry,” Li said. After placing an order, consumers must often wait more than a year, if not two, for delivery.
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