Chinese automakers claim stake in new technology as light car demand drops

In July of 2009, Caijing Magazine quotes unidentified sources as saying Chinese automaker Chery is looking for bank and equity investor help for a possible bid for Volvo, Ford’s Swedish nameplate. Chery looses out to Geely. Image Credit: The Auto Beat

Chinese automakers claim stake in new technology as light car demand drops

China's automakers Geely and BAIC pushed ahead with plans to harness the technology of Ford's and General Motors' ailing Swedish brands Volvo and Saab in a bid to be global industry players. A significant technology gap between domestic Chinese automakers and their global rivals, has left the Chinese looking for acquisitions of overseas technology and designs as the global auto industry restructures.

Ford Motor Co. released a statement today, Wednesday December 23, 2009, that it aims to complete the sale of its profit loosing Volvo Cars unit to a privately-held Chinese auto maker, China's Zhejiang Geely Holding Group, parent of Geely Auto, in the second quarter of 2010.

Beijing Automotive Industry Holding Corp (BAIC), China's fifth-largest automaker, said separately it would launch an aggressive campaign to develop its brand both at home and overseas, after buying the rights to three old Saab models from GM. BAIC is expected to invest 33 billion yuan ($4.8 billion) in vehicle R&D over the next three years, after paying $200 million for the Saab technology, including the rights to three overall vehicle platforms and two engine technologies.

Reported that the new car Geely SL-1 is based on the Geely Vision, possibly named “Sea Wave“, inherited Huapu’s “Sea Series” name.

It should be said that from Geely Pride, we could see so much shadows of Mercedes-Benz in Geely, especially the front grille. Huapu could never get rid of such problems, this time, the Geely SL-1 looks very very like the Mercedes-Benz C class version, the front-end shapes, insurance skirts…

Front-end gives a same feeling to us

Similiar headlights? Caption & Image Credit: chinacarfans.com

All of this activity is happening at a time where the market for light car platforms in the United States has been tanking and only slow growth gains are expected over the next five years, according to a study just released by AutoPacific, a future-oriented automotive marketing research and product-consulting firm.

In a study released earlier this week, AutoPacific states that "2009 will be a memorable year for the automotive industry – unfortunately for all the wrong reasons. The U.S. light vehicle market is expected to close out 2009 at a disastrous 10.3 million sales, down from 16.1 million sales just two years prior and the lowest industry volume since AutoPacific began forecasting automotive sales in 1988. Naturally, the national economic collapse had a profound impact on retail sales of light vehicles."

The industry can look forward to year-on-year recovery over AutoPacific’s five year forecast period, but at a relatively gradual pace. In the near term, AutoPacific forecasts industry volume of 11.4 million units in 2010 as the economy slowly heals but also as unemployment hampers faster industry sales recovery. 2015 will see industry sales of 15.4 million, a significant improvement from 2009 volumes but still a far cry from the near-17 million unit years seen through much of the past decade.

“Even with the gradual recovery of the economy, many Americans will need to address serious near-term issues such as loss of personal savings and wealth as well as focusing resources on projects, such as home repairs, that had to be deferred due to the recession,” said Ed Kim, Director of Industry Analysis at AutoPacific. “Because today’s vehicles are more durable and long lasting than ever, consumers are able to put off new vehicle purchase for much longer than they have been able to in the past. This dynamic will hamper industry recovery in the near term.”

2009 Pontiac G8 GT - With its aggressive styling, sport suspension and available V8 power, the full-size rear-wheel drive G8 sports sedan is proof that Pontiac is serious about performance cars. Image Credit: Pontiac/General Motors

To further complicate the issue for Chinese automakers, that even though the industry has seen the loss of several autobrands and nameplates (Saturn, Pontiac, PT Cruiser, the Chrysler Aspen and the Dodge Durango are a few examples that come to mind) the industry still expects nearly 300 individual vehicle nameplates in the marketplace by 2015. By comparison, there were only 198 nameplates back in 1998, which was the last time industry volumes were at around 2015’s expected level (15.4 million units). Thus, automakers will be fighting for a piece of a much smaller pie. Profitability at these lower volumes will represent a challenge, especially when the drive towards greater fuel efficiency will add significant cost to upcoming new vehicle offerings.

These are not heady times to be an auto-manufacturer in this world.
(ht: WSJ, Reuters, Forbes, and AutoPacific)

... notes from The EDJE

Profiling for profits ... it's a motor-culture good thing

Walmart - Link & Image Credit: Cool Aggregator

Profiling for profits ... it's a motor culture good thing

A just released study of consumer brands and automotive brands sold in the United States provides in-depth information on the relationships existing between new vehicle buyers and twenty-seven consumer brands. This information gives insight not only into who is buying the consumer brands, but what is important to them, what other brands are cross-shopped and how it all plays into their automotive brand preferences.

Auto manufacturers and suppliers use the AutoPacific Consumer Brand Study to better understand the target audience for the buyers of their vehicles. Consumer brands use the study to identify target markets and the mindset of the buyers attracted to their brand. In addition to US Automotive brands, the following 27 brands are analyzed: Target, Coca Cola, Old Navy, Levi’s, Walmart, Apple, Gap, Polo, Home Depot, HP (Hewlett-Packard), Louis Vuitton, IKEA, Lowe’s, TJ Maxx, Hugo Boss, Method, Trader Joe’s, Gucci, Costco, Axe, Whole Foods, Starbucks, LG (not cell phone), McDonalds, H&M, REI, and Sony.

The 2010 Porsche Panamera - Challenging the Mercedes-Benz CLS550 Coupe for its Division Heavyweight Title is the Porsche Panamera S, the Panamera’s base model. Weighing in at $127,000, the rookie contender Panamera S is knocked out in the first round by the Mercedes-Benz CLS550’s cool $69,825 price tag. Rallying for round two, the Panamera S offers a sizable counter attack with a 4.8-L naturally aspirated V8 engine, 400-hp, and an acceleration rate of 0-60 mph in about 4.5 seconds. The CLS550 matches the Panamera S’s efforts with a 5.5-liter V8 engine and 7-sp automatic transmission, but is ultimately out-performed with its paltry 382-hp. Caption & Image Credit: RideLust

This study highlights that one won’t likely find many Porsches parked in front of Walmart, for example. Only one in 17 Walmart Shoppers will even consider a Porsche. On the other hand one in six REI shoppers will consider a Porsche. A Generation Y new vehicle buyer is much more likely to also purchase an Apple product – computer, iPod, and iPhone than older new vehicle buyers. Shoppers at H&M – a trendy “cheap-chic” clothier – are much more into their vehicle’s image than their vehicle’s power and acceleration. Trader Joe’s customers are more likely to drive an Audi, BMW or Volvo.

“Our research indicates that American car buyers have dramatically different buying profiles for consumer brands. Selection of a consumer brand and selection of a vehicle brand and type are heavily tied together. The parking lot at Whole Foods is a lot different from the one at Walmart,” notes George Peterson, President of AutoPacific to LA Motor Culture Examiner.

“Target, Walmart, Home Depot and Lowe’s are cornerstone American brands that most people visit at least occasionally. The buyer profiles for these brands parallel new vehicle buyers nationally. It’s when you get to brands with more niche appeal like Apple, Starbucks, Whole Foods and Trader Joe’s, not to mention REI and H&M, where things get really different. Each consumer brand has a very distinctive footprint in types of consumers, factors important to them, vehicles owned and the ones they’ll consider next time.”

AutoPacific’s Consumer Brand Study is based on the results of AutoPacific’s annual survey of over 32,000 new car and light truck buyers in the United States. The study closely looks at recent buyers of new cars and light trucks and how they relate to twenty-seven consumer brands from Walmart to Louis Vuitton.
(ht: Dan Hall, AutoPacific)

... notes from The EDJE

Of "Clown Cars" and CAFE standards - A tuff sell

G-Wiz (covered In TreeHugger here) is the quintessential London car — it runs on battery power, reaches 40 mph and goes for 40 miles on a 50 pence charge. Caption & Image Credit: TreeHugger

Of "Clown Cars" and CAFE standards - A tuff sell

Tightening CAFE standards may force smaller cars on US car buyers who are not inclined to downsize.

“Our research shows that, despite what the U.S. Government is telling us, few Americans want to downsize to smaller cars,” says George Peterson, President of AutoPacific, a future-oriented automotive marketing research and product-consulting firm, “Finding more buyers inclined to purchase smaller cars will not be easy.”

For years, the US automobile industry has relied heavily on analyzing demographic factors in order to segment the marketplace, and sell consumers vehicles with different characteristics. Traditional socio-demographic targeting using variables such as sex, age, education or income, has been the norm. While many manufacturers have tried to create independent systems for segmenting the market, the results are often short-lived, and lack a global perspective in an industry that clearly must design and sell vehicles on a global level.

"As automotive researchers, we [AutoPacific] have often found that the segmentation tools being used by our clients often only last a few years, and are not portable to other markets,” continued George Peterson, “This constant change, has made it difficult for global manufacturers to indentify the true motivators behind vehicle sales, and keep their focus necessary to sell vehicles successfully on global level.”

“We have identified nine social Milieus – or consumer psychographic segments – that can help us understand which US car buyers will have an easier time embracing smaller vehicles as many buyers do in Europe,” says Carsten Ascheberg, Managing Director at SIGMA, a global consulting firm based in Mannheim, Germany. “By combining AutoPacfiic’s trademarked Research Suite database of 32,000 new car Buyers, and SIGMA’s trademarked Social Milieu approach the resulting data and analysis offers model level insights into the true purchase motivators of US Car Buyers, and allows this understanding to have an impact on the global plans for our clients.
The all electric Honda EV-N - Want a small, cheap plug-in vehicle for your daily commuting? I'm guessing that's the vision behind the Honda EV-N concept. If this is the future of the automobile, that future probably won't be built in America, I'm guessing. By the time we get it, it'll be too late. Is America's auto culture, though proud and historic, killing the US auto industry? [Response - No, it's the CAFE standards built upon disgarded, manipulated, corrupted, and shaped data supplied by scientists at the CRU - Google "Climategate"] Caption & Image Credit: hybridcarblog.com

The AutoPacific/SIGMA research shows that small car considerers are much more likely to be of the “Affluent Progressives” Milieu, than any of the other eight Milieus. Affluent Progressives are conscientious consumers who are upscale and well off and base much of their purchase decisions on the brand or product’s role towards promoting the greater good … as well as catering to his or her own emotional needs.

By targeting this group in product design and marketing, manufacturers will have a much better chance of moving Americans into smaller, more fuel efficient vehicles. Additionally, these Milieus can be used to help manufacturers more accurately target features for future vehicles by determining which Milieus will be most receptive to certain automotive features.”

“Today, more than ever before, brand preferences and purchase decisions are influenced by each individual’s personality, values and attitude towards life: You buy what you can identify with. Furthermore, these values and attitudes, do not change overnight.,” says Carsten Ascheberg. In 2005, the Wall Street Journal covered how SIGMA used this approach to help BMW re-align its brand and launch the highly successful MINI brand worldwide. “We are seeing the seeds of a similar revolution possible in the US market.”

The SIGMA Milieus reflect the psychological predisposition of customers and link them to the acceptance or rejection of products and makes. Not only have the various Milieus remained stable over time, but also they have proven to be highly selective. The consumer cultures that are defined by the Milieus can be found the world over, giving this research global implications for automakers.

The union of AutoPacific’s trademarked Research Suite database, which was developed in 1993 and is used by manufacturers and tier one suppliers to understand the US car buying population, in conjunction with SIGMA’s trademarked global Social Milieu approach, developed in 1980, the resulting understanding of target buyers and their future intentions with regards to brands, segments and features is uniquely powerful.
(ht: Dan Hall, AutoPacific)

... notes from The EDJE

Richard Branson to unveil Virgin Galactic Space Liner

Virgin Galactic readies for Monday's unveiling of SpaceShipTwo — the first-class space tourist's wonder machine at the core of the space tourism firm's suborbital fleet. Image Credit: Scaled Composites/Bill DeaverThe Virgin Galactic Space Liner, originally conceived and built by aerospace visionary Burt Rutan and financed by Microsoft co-founder Paul Allen to secure the $10 million Ansari X Prize in 2004, will be uveiled today at the Mojave Air and Space Port in the California desert.

Richard Branson to unveil Virgin Galactic Space Liner

It is fitting that with all of the unveilings of transportation craft at the LA Auto Show last week for display to the public through December 13, 2009, Richard Branson decided to unveil Virgin Galactic's SpaceShipTwo — the first-class space tourist's wonder machine at the core of the space tourism firm's suborbital fleet.

Branson's Virgin Galactic is establishing its headquarters to operate private space flights from Spaceport America, billed as the world's first "purpose built" commercial spaceport, which is now under construction outside Las Cruces, New Mexico.

Branson, who also owns Virgin Atlantic Airways Ltd. and Virgin Trains, sold a 32 percent stake in Virgin Galactic to Aabar Investments PJSC of Abu Dhabi in July, raising $280 million. The purchase valued the venture at $900 million.

Virgin Galactic is unveiling the SpaceShipTwo, the company's first commercial spacecraft - and tourists are alredy lining up for out of this world vacations. Image Credit: Virgin Galactic

This excerpted and edited from Bloomberg -

Branson Collects $42 Million From Would-Be Astronauts
By Steve Rothwell - Bloomberg - December 7, 2009

U.K. billionaire Richard Branson’s Virgin Galactic Ltd. venture is riding out the recession, with would-be astronauts paying $42 million to book a trip to the edge of space, its chief executive officer said.

Virgin Galactic added $4 million in deposits in the past nine months, CEO Will Whitehorn said in an interview. Fees range from a minimum $20,000 to the full $200,000 fare, with singer Sarah Brightman, physicist Stephen Hawking and X-Men director Bryan Singer among more than 300 clients to sign up. Virgin aims to sell at least 700 tickets by the first commercial launch.

California Governor Arnold Schwarzenegger will unveil Virgin’s SpaceShipTwo model at a test site in the Mojave Desert today, with the first commercial flight scheduled to take place from Spaceport America, New Mexico, in the next couple of years. A handful of lost contracts included one from a client who invested money through swindler Bernard Madoff, Whitehorn said.

Virgin’s prototype SpaceShipOne flew to the edge of space three times in 2004. SpaceShipTwo will be taken to 50,000 feet by the WhiteKnightTwo carrier aircraft, from where it will fire its own rocket motor and climb to 360,000 feet (110 kilometers). The craft is designed to carry two pilots and six passengers who will experience weightlessness and see the curvature of the earth during a six-minute suborbital flight

Virgin Galactic has commissioned three carrier planes and five spaceships from Spaceship Co., its venture with Northrop Grumman Corp.’s Scaled Composites unit. The company was set up so that in future it can take orders from other customers.

“It’s creating a lot of interest and they must believe the technology is ready to roll,” said Professor George Fraser, director of the Space Research Centre at Leicester University, England. “But 700 bookings is only 100 flights, and I suspect this is the sort of thing people will do once and just be happy to be back on the ground safe.”

Fraser said the use of the WhiteKnightTwo aircraft as a platform from which to launch a more powerful rocket able to achieve full earth orbit might have more potential in the longer term. The technology would allow much more affordable deployment of mini satellites weighing tens of kilograms, he said.

“The main challenge, as with any new aircraft, will be to get through the tests with the regulators,” said Pat Norris, Chairman of the Royal Aeronautical Society’s Space Group, by telephone. “It’s hard to tell what might go wrong.”
Reference Here>>

Virgin Galactic has spent about $200 million on the project out of a budget of $450 million.

Slideshow of unveiling here (breaking, when available)

... notes from The EDJE

LA Auto Show: Audi A3 TDI, 2010 Green Car Of The Year

2010 Green Car award winning 2.0L Audi A3 TDI Diesel at the 2009 LA Auto Show presentation ceremony. Image Credit: Edmund Jenks (2009)

LA Auto Show: Audi A3 TDI, 2010 Green Car Of The Year

This excerpted and edited from Audi of America -

2010 Audi A3 TDI Technology Highlights

The TDI 2.0 liter clean diesel engine produces 140 hp and a remarkable 236 lb-ft torque thanks to the in-line four-cylinder turbocharged engine with common rail direct injection and piezoelectric injectors.

Audi has been at the forefront of FSI direct injection. FSI Direct Injection technology increases the torque and power of spark-ignition engines, making them as much as 15 percent more economical and reducing exhaust emissions.

S-tronic automatic transmission enables rapid-fire shifts, thanks to a dual-clutch system. Shifts can be engaged either through the shift lever on the console or by shift paddles located behind the steering wheel at the nine and three o’clock positions. The S-tronic automatic transmission is one of the most advanced forms of gearbox available, with shift times in the region of 0.2 seconds and without noticeab<>ly interrupting power flow. It is ideal for every driving style and adds unique emphasis to the sporty, dynamic character of the vehicle. Additionally, there are two automatic driving mode options, “Normal” and “Sport”, which allow the drivers to further customize their drive.
Reference Here>>

This excerpted and edited from the LA Times -

The 2010 Audi A3 TDI was named Green Car of the Year at the L.A. Auto Show today, giving the Germans and clean diesel technology back-to-back wins.

The four-door hatchback, which has a base sticker price of $29,950, "offers it all," said Ron Cogan, publisher of Green Car Journal, which sponsors the annual award, praising the car's sporty performance and superior fuel economy.

The winner's "quiet, clean diesel engine delivers loads of low-end torque and a fun-to-drive experience, all with the functionality of a five-passenger hatchback," Cogan said.

The A3 TDI (which stands for turbo direct injection) has an EPA highway fuel economy rating of 42 MPG -- a 50% improvement over the gasoline-powered A3.

The other finalists for the award were the 2010 models of the Honda Insight hybrid, Toyota Prius hybrid, Volkswagen Golf TDI and Mercury Milan hybrid, the only nominee from an American automaker.

The A3 TDI is powered by the same engine as last year's Green Car of the Year, the VW Jetta TDI. Audi is owned by Volkswagen.
Reference Here>>

Consecutive victories by clean-diesel technology over gas-electric hybrid cars gave Johan de Nysschen, president of Audi of America, an opportunity to wag a finger at Washington policymakers who have fallen in love with hybrid and all-electric technology. Caption Credit: LAT / Image Credit: Edmund Jenks (2009)

The Green Car of the Year award is a program that honors environmental leadership in the automobile field and recognizes vehicles that are readily available to consumers during the award year.

Green Car Journal editors perform an exhaustive review of vehicle models to identify the five finalists.

The 2010 winner was ultimately decided by jurors Jay Leno, Jean-Michel Cousteau, Carroll Shelby, Matt Petersen of Global Green USA and the Sierra Club’s Carl Pope, along with Green Car Journal editors.

All hail the Audi TDI clean diesel technology ... it's just not your dad's truck driving, black smoke, fuel option anymore. Diesel is the "Green" transition fuel of today and the future.

By the way, what is "Climategate"?

... notes from The EDJE

LA Auto Show: Bob Lutz hastily replaces outgoing Fritz Henderson as Keynote

Bob Lutz with the Chevy Volt - Lutz's most controversial statement about not believing in the "CO2 theory of global warming", generated a lot of comments from TreeHugger readers, most of them falling into three camps: 1) Those who disagree with Lutz and think this is a really bad things (many saying they won't buy the Chevy Volt because of it). 2) Those who disagree with Lutz, but think his position on GW doesn't matter much. 3) Those who actually agree with Lutz (to varying degrees, from "total hoax" to "other explanations for the warming" since the Climategate emails have come to light). Image and Caption Credit: Treehugger

LA Auto Show: Bob Lutz hastily replaces outgoing Fritz Henderson as Keynote

General Motors Co. CEO Frederick "Fritz" Henderson stepped down last Tuesday after the board determined that the company wasn't changing quickly enough. He was also scheduled to give the Motor Press Guild Keynote Address at the Press Days event before the LA Auto Show on Wednesday, December 2 at 8:30 am. He was replaced with Bob Lutz, General Motors Vice Chairman Marketing Communications.

It is not enough that this once famed, number one company in all of the world of automobile manufacturing is no longer a company owned and operated by creative auto-manufacturing visionaries since the federal government and labor union takeover, it now is beginning to see a brain and experience drain from the executive side of the ledger. After all, the hand picked government Chairman of General Motors has never contemplated building a car in his life before taking his current position ... the once Chairman of AT&T seems more comfortable with area codes as opposed to how one might get from one zip code to another ... in transportation style.

To gain some insights what Bob Lutz might be planning to say as replacement Keynote Speaker to the press gathered at Press Days, here is what he had to say in October to NewsMax's MoneyNews.com.

Bob Lutz as he gave his Keynote Address to the gathered journalists December 2, 2009. Image Credit: Edmund Jenks (2009)

This excerpted and edited from Street Talk -

Bob Lutz: GM Is Roaring Back
By: Dan Weil - Monday, October 12, 2009 11:17 AM

General Motors has taken the steps that will foster its recovery, says Bob Lutz, vice chairman of marketing and communications for the company.

Lutz is a longtime car executive, having held leading positions at all three big U.S. automakers in a career dating back to the early 1960s. With the departure of former GM CEO Rick Wagoner, many have looked to Lutz to help new [and now just departed] CEO Fritz Henderson rebuild and reorient the flagging U.S. auto giant.

“In September (GM) sales were pretty much back to the previous numbers,” he told Dan Mangru of Moneynews.com.

“For fast-moving models that are in very high demand, we have no inventory.”

That includes the GMC Terrain, the Buick LaCrosse and the Cadillac SRX. Those cars are selling well, he says

[read that as anything but "clown cars"].

“The sad thing is we don’t have enough of those to take advantage of the demand. . . We’re going to have to build inventory up again.”
----
“We have the product now undeniably, whether you look at the Chevy Malibu, which was car of the year; the Silverado, which was truck of the year; the Silverado Hybrid, which was declared dream car of the year; or the Cadillac CTS, which was Motor Trend car of the year.”

Everyone agrees that GM has the best products in its history now and “arguably the best overall product line of anybody in the business,” Lutz says.

“My problem is that thanks to a lot of negative representations by the general media and now entrenched belief, there are large parts of the American public that don’t have any notion of what today’s product line is. That’s what we have to overcome.”

For the last five years, particularly the last 18 months, GM has been under-advertised and under-marketed, Lutz says.

“There are Americans who, when you say ‘Are you familiar with Buick?’ there are people on the West coast who say “Do they still make those?’”

The new GM is bulking up marketing, he says.

“We’re going to spend the money that it takes to get the word out.”
Reference Here>>

And the money they're planning on spending will be coming out of every tax paying citizen's pocket.

The actual presentation did not deviate much from what Bob Lutz had to say in the interview with the added caveat that he would not be making any comments on the situation and events that led up to Frederick "Fritz" Henderson's departure.

General Motors unveils the North American version of the Buick Regal to the press at the LA Auto Show December 3, 2009. Image Credit: Edmund Jenks (2009)

Additional Notes:

The keynote address was followed by a Chevrolet press conference at 9:35 a.m. which unveiled the North American version of the Chevrolet Cruze as well as announce that the initial retail market where the electric-drive Chevrolet Volt will be sold. That market is California and will start in partnership with the four major power utilities that cover the major metropolitan areas in both Northern and Southern California.

The Fisker Karma - The 2010 Fisker Karma is a new gas/electric hybrid luxury car. The Karma is a 4-door, rear-wheel-drive sedan built in Finland and distributed by U.S.-based Fisker Automotive, Inc. It pairs a battery-powered electric motor with a turbocharged 2.0-liter 4-cylinder for 403 hp total. Image Credit: Edmund Jenks (2009)

If you are in Los Angeles over the next week and want to see how some of your tax money is being spent, drop by General Motors and make an extra effort to drop by the Fisker booth ... they are scheduled to receive about $500 million dollars of our tax money through board member Paul Vlocker for their exotic luxury hybrid offering set to sell starting at an entry level price of around $85,000.

The dates of the LA Auto Show are Dec. 4-13, 2009. For more information visit www.laautoshow.com

Source - LA Motor Culture Examiner