For the first time in more than a decade, Nissan’s car plant in Sunderland has exported cars to Japan. A petition signed by more than 40,000 people was presented to the Prime Minister that asked him to take measures to protect the car industry and local jobs. Automotive suppliers in Worcestershire are being encouraged to take part in a £1.7m initiative that aims to boost productivity and increase global competitiveness.
Siemens VDO, Siemens’ car parts division, attracted such interest from outright buyers that the original plan for an initial public offering was dropped. The launch of the new Fiat 500, exactly 50 years after the launch of the first Fiat 500, is seen as a "new beginning" for the Italian carmaker. Peugeot Citroén increased first half operating profits by 22%. Renault wants to take on an additional partner in India, possibly Bajaj Auto, to make an ultra low-cost car for the fast growing local market.
General Motors has turned a loss in the second quarter of last year into a profit this year. July, however, was one of the worst months for carmakers in the US in two years, with the leading five carmakers all reporting falling sales in the same month. On 19 July the bidding period ended for potential buyers for Land Rover and Jaguar, two parts of Ford’s Premier Automotive Group (PAG): Ford is also considering selling Volvo, the most valuable and profitable part of the PAG. China’s Shanghai Automotive Industry Corp (SAIC) is in merger talks with Nanjing Automobile Group.
For the first time in more than a decade, Nissan’s car plant in Sunderland has exported cars to Japan. In May, Japanese car dealerships began selling the Sunderland-made Qashqai, a hybrid off-road compact car that in Japan has been named the Dualis. The last Sunderland Nissan model to go to Japan was the Primera in 1996. Analysts comment that the renewed shipping of cars to the world’s second biggest economic power is like shipping coals to Newcastle! Nissan’s success comes at a time when British car factories owned by other foreign firms are ending production or face the prospect of closing. However, according to one automotive industry expert the three Japanese car plants in England – Nissan in Sunderland, Toyota in Burnaston and Honda in Swindon – are among the best in Europe for efficiency and product quality.
Following the closure of the Peugeot car factory at Ryton last year, when production was switched to eastern Europe, and the continuing concerns over the future of Jaguar, a petition signed by more than 40,000 people was presented to the Prime Minister that asked him to take measures to protect the car industry and local jobs. However, thanks to its tradition of craft manufacturing, the UK may be less exposed to the global shift in car production than some other car producers.
Automotive suppliers in Worcestershire are being encouraged to take part in a £1.7m initiative that aims to boost productivity and increase global competitiveness. The Midlands Productivity Alliance project aims to help companies drive down lead times reduce waste and stock and embrace best practice techniques.
Siemens VDO, Siemens’ successful car parts division, has attracted such interest from outright buyers – Continental of Germany and TRW of the US – that the original plan for an initial public offering (IPO), which might have valued VDO at around €7.5bn, was dropped. TRW, with backing from its largest shareholder, Blackstock, the private equity firm, bid close to €12bn. Continental, which has a product range compatible with Siemens VDO, bid €11.4bn. Siemens decided to accept Continental’s bid, subject to approval by the antitrust authorities.
The launch of the new Fiat 500 (the Cinquecento), exactly 50 years after the launch of the first Fiat 500, is seen as a "new beginning" for the Italian carmaker. When Sergio Marchionne took over as Fiat boss in 2004, the company was on its knees. Between 2001 and 2004, the firm, which includes names such as Alfa Romeo, Lancia, Ferrari and Maserati, lost €8bn on its car business. Since 2004, Marchionne has cut costs, laid off workers, increased the sharing of components between models and formed alliances with other carmakers to speed development. The new car has been greeted with much enthusiasm. Fiat hopes to maintain its winning streak by introducing over 20 new models by 2010.
Peugeot Citroén increased first half operating profits by 22%, to €842m. The figures are the first under Christian Streiff, who joined in February. The revival comes after cost cutting and the launch of new models. Meanwhile, Volkswagen is to invest up to €4.5bn in Seat over the next ten years as part of a strategy to turn around the loss-making brand.
Carlos Ghosn, Renault’s chief executive, wants the company to take on an additional partner in India, possibly Bajaj Auto, to make an ultra low-cost car ($3,000) for the fast growing local market. Renault is already collaborating with Mahindra & Mahindra on production of the Logan. Car sales in India are expected to reach 2m by 2012, up from 1m in 2007.
General Motors (GM) has turned a loss of $3.4bn in the second quarter of last year into a profit of $891m this year. Last year’s numbers included the cost of redundancies and factory closures. Now capacity is more in line with output. While the US operations made a small profit ($78m), GM Europe recorded its best performance since 1996, with net income of $217m. The company also enjoyed big gains in China, India, Egypt and Venezuela.
July, however, was one of the worst months for carmakers in the US in two years. Fears about falling property prices and rising petrol prices hit GM and Ford sales hard. Sales were down by one-fifth in the month. Toyota, Honda and DaimlerChrysler also reported falling sales. The five carmakers, which account for 75% of US car sales, have all reported a slide in sales in the same month for the first time in two years. In July, GM, Ford, Toyota and Chrysler were all offering interest-free financing and cash rebates to bolster sales.
On 19 July the bidding period ended for potential buyers for Land Rover and Jaguar, two parts of Ford’s Premier Automotive Group (PAG). The unexpectedly large number of bidders included Cerberus Capital Management, the private equity group that bought Chrysler in May, and India’s Tata Motors and Mahindra & Mahindra. In early August, in an unusual move caused by the difficulties in credit markets, Ford said it was prepared to extend credit by issuing loan notes to companies that put in a successful $3bn bid.
Ford is also considering selling Volvo, the most valuable and profitable part of the PAG. Analysts disagree on the wisdom of selling Volvo, which is more integrated into Ford than the other two brands; BMW is one possible bidder. Although the two are compatible premium brands, they do not fit technically: Volvos rely on front-wheel drive and BMWs on rear-wheel drive. Other experts suggest Renault as a more logical buyer, as it needs a premium brand having failed to build one itself. Estimates of the proceeds from a sale of the PAG range from $8bn to $16bn. The money is more likely to be used to take tens of billions of dollars of retiree healthcare liabilities off its balance sheet than being invested in its remaining brands or in product development.
China’s Shanghai Automotive Industry Corp (SAIC) is in merger talks with Nanjing Automobile Group, a smaller rival stronger in commercial vehicles. SAIC builds Rover-derived cars, while Nanjing owns MG. The real goal of the Chinese is to build a world carmaker starting with British technology, as Japan’s Nissan once did.