Archive for the 'China' Category

2012 European Automotive Recap

Monday, January 14th, 2013

The "all-new" MINI for 2014?

Well, it’s mid-January 2013, and partly because automakers have just announced 2012 whole year sales figures, and those at the bottom of the pile will no doubt be slashing prices to make up for a lackluster year of sales. That means it is a pretty good month to buy a car.

So how good/bad were those sales figures?

Let’s start with Lotus. Thanks to Dany Bahar, the company has set its sights on selling 4000-5000 cars annually by 2015. That is a drop in the bucket for a giant like German Volkswagen or even sports car maker Porsche, but Lotus has a long way to go, and will need to expand their sales five-fold over the 1043 cars sold in 2012. Incidentally, the company sold significantly more cars previously, 1457 in 2011, but the company had a delay on the Exige S production, forcing a huge drop. No doubt some Exige customers are a bit miffed about the extra wait, though they will rest easier knowing that it was reportedly a delay due to a quality overhaul.

Autocar is reporting that the generation-three MINI is about 12 months away, and that figure couldn’t come sooner. Apparently, the car will feature serious improvements from the ground up. As a driver of the 2009 MINI Cooper S, all I can say is that they ought to focus on the interior or I won’t be buying a second one. The third generation is the perfect opportunity to go through the cabin, and reduce the number of plastic pieces which cause the excessive rumbling and rattling and squeaking that my and many other MINIs suffer from. The solution is a combination of more leather, fewer hard plastic pieces, and fewer number of parts overall on the interior. The attached photo seems to indicate some serious design changes as well, but let’s hope we see less black plastic trim outside, rather than MORE, as the picture would indicate. Incidentally, MINI and BMW combined hope to sell near 1,000,000 per year by 2020. Currently MINI is selling about 300,000 cars per year, but they do hope to increase that figure by 50% in the not-so-distant future.

BMW Group as a whole did record business. 1,845,186 BMW, MINI and Rolls-Royce vehicles were delivered worldwide. This was an increase of 10.6% over the previous record year in 2011 (1,668,982). BMW brand sales rose 11.6% in 2012 to reach 1,540,085 vehicles, again, a record (2011 totals reached 1,380,384).

  • BMW Group member Rolls-Royce saw another record (the third straight year!). 3,575 cars were delivered to customers in 2012, the highest annual sales in the 108-year history of the marque and the third consecutive record year.
  • Expansion into new markets – Rolls-Royce motor cars are now sold in more than 40 countries worldwide.
  • United States overtakes China to regain number one regional position.

VW’s U.S. numbers were really quite good for 2012, 438,000 units, and worldwide deliveries in 2012 rose 11 percent to 9.07 million vehicles, the Wolfsburg, Germany-based company said in a statement today. With last year’s gains, the maker of VW, Audi and Porsche vehicles has increased annual deliveries 44 percent since 2009.

DECEMBER 2012 SALES

VW US SNAPSHOT –YTD–
Model Line Dec. ’12 Actual Dec. ’11 Actual Yr/Yr % change Dec. ’12 YTD Actual Dec. ’11 YTD Actual Yr/Yr % change
Golf 1,477 1,411 4.7% 20,677 17,839 15.9%
GTI 1,085 1,332 -18.5% 16,314 16,867 -3.3%
Golf R 292 N/A N/A 3,894 N/A N/A
Total Golf/GTI 2,854 2,743 4.0% 40,885 34,706 17.8%
Jetta 13,102 12,422 5.5% 146,478 150,515 -2.7%
SportWagen 2,559 2,000 28% 23,946 26,845 -10.8%
Total Jetta 15,661 14,422 8.6% 170,424 177,360 -3.9%
Beetle 2,666 1,530 74.2 28,654 5,626 409.3%
NBC 516 1 51,5000.0% 520 842 -38.2%
Total New Beetle 3,182 1,531 107.8% 29,174 6,468 351.1%
Eos 372 419 -11.2% 6,214 7,533 -17.5%
Passat 14,462 6,884 110.1% 117,023 22,779 413.7%
Passat Wagon N/A N/A N/A N/A 56 -100.0%
Total Passat 14,462 6,884 110.1% 117,023 22,835 412.5%
CC 2,196 2,450 -10.4% 21,646 29,502 -26.6%
Tiguan 3,310 2,403 37.7% 31,731 25,990 22.1%
Touareg 1,408 1,117 26.1% 10,553 7,535 40.1%
Routan 560 533 5.1% 10,483 12,473 -16.0%
Total Sales 44,005 32,502 35.4% 438,133 324,402 35.1%

Sister company Audi reached U.S. sales of 140,000 for 2012. Interestingly highline imports to the U.S. market accounted for approximately 1.4million cars out of 14.4 million sold overall. Worldwide, however, Audi did quite well with 1.455m units shifted in 2012.

Porsche had a stellar 2012. We’ve seen conflicting reports from Porsche, first saying they were hiring, then saying they were putting a halt, so it’s not quite clear what the internal dynamics of the company are at this time, but the 918 supercar remains on track and Porsche reports it added 30 percent staff in the last year (bringing the total to 17,000). Record worldwide sales of 141,075 were an 18.7% increase over the 2011 record year of 118,868 vehicles. No doubt, China is fueling a large percentage of these records as it sold a record 31,205. Somewhat surprisingly, the largest Porsche market remains the U.S. with 35,043 sales. Due to the new 911 seeing the showroom, 911 series model sales shot up 31.4% and the Boxster, which also received a refresh, saw sales up 29.1%. On the downside, the father of the 911, the Ferdinand Porsche died in 2012, and Dr. Wolfgang Porsche took over as Chairman of the Supervisory board.

Porsche Deliveries December Fiscal year
2012 2011 Variance (%) 2012 2011 Variance (%)
World 12,097 9,159 32.1 141,075 118,868 18.7
Europe 4,674 4,149 12.7 49,639 43,748 13.5
Germany 1,387 1,102 25.9 17,487 14,959 16.9
America 3,479 2,061 68.8 41,060 34,350 19.5
USA 2,952 1,834 61.0 35,043 29,023 20.7
Asia-Pacific 3,944 2,949 33.7 50,376 40,770 23.6
China 1,937 1,867 3.7 31,205 24,340 28.2

Bentley saw worldwide growth of 22% in 2012 to 8,510. 2011 saw 7,003 sales.

Bentley:

The Americas finished 2012 as Bentley’s largest global market, with 2,457 cars delivered to customers in the region, a 22% increase on 2011 (2,021 cars). China followed closely with 2,253 cars delivered, Bentley’s largest ever volume in the region and a 23% increase on 2011 (1,839 cars).

In Europe, deliveries grew by 12% with 1,333 cars delivered to customers (1,187 in 2011). The increasing popularity of the Bentley brand in growing markets like Russia, where deliveries were up 37%, contributed to the strong performance of the region. In the UK, 1,104 cars were delivered to customers, a 7% increase on the previous year (1,031 cars).

The Middle East region performed very well with deliveries up 44% to 815 cars (566 in 2011). Asia Pacific also increased its deliveries by 44% to 358 cars (249 in 2011). Finally Japan saw exceptional growth of 73% with 190 deliveries (110 in 2011).”

Following record sales in the previous year, Mercedes-Benz Cars has once again posted an annual record in 2012 as well as the highest December sales to date. Over the past twelve months, 1,423,835 customers chose a vehicle of the brands Mercedes-Benz, smart and Maybach. The previous year’s sales volumes were thus exceeded by 4.5% or 60,901 units. Also Mercedes-Benz achieved a new sales record in 2012. From January through December, a total of 1,320,097 vehicles of the core brand (Mercedes-Benz) were sold.

Overview of sales by Mercedes-Benz Cars

December 2012 Change in % as of December 2012 Change in %
Mercedes-Benz 125,234 +0.7 1,320,097 +4.7
smart 7,355 -4.0 103,738 +1.7
Mercedes-Benz Cars 132,589 +0.4 1,423,835 +4.5
Mercedes-Benz sales by market
Western Europe 47,195 -3.8 554,797 +0.6
- thereof Germany 22,691 -10.3 261,084 -0.4
NAFTA region 31,872 +10.1 311,547 +11.3
- thereof USA 28,145 +9.5 274,134 +11.8
Asia/Pacific region 33,805 -6.6 337,102 +5.1
- thereof Japan 5,234 +33.3 40,488 +24.9
- thereof China 18,910 -18.6 196,211 +1.5

In Europe, Renault had a tough year. It looked something like this:

Full year 2012 VOLUMES Var vs 2011

(in %)

MS %
RENAULT GROUP PC+LCV 551 334 -19,8% 24,2%
RENAULT GROUP PC 424 147 -22,1% 22,3%
RENAULT GROUP LCV 127 187 -10,8% 33,1%
RENAULT PC 343 355 -24,7% 18,1%
RENAULT LCV 123 455 -10,1% 32,1%
DACIA PC 80 792 -9,2% 4,3%
DACIA LCV 3 732 -29,6% 1,0%

Note, PC=Cars

LCV=Light Commercial Vehicles

Peugeot’s sales were down, as was their media web site. I did find out from Bloomberg that their sales were down 17% to 2.97 million car sales. Twelve-month sales slid 6.1 percent to 1.56 million vehicles at the Peugeot brand and 12 percent to 1.27 million autos at the Citroen marque.

Jaguar Land Rover saw a great year with sales up 30%. Jaguar Land Rover sales totaled 357,773 vehicles in 2012. It plans to add 800 jobs to support development of new models. The brands sold 71,940 vehicles in China last year, up 71 percent, surpassing sales in the U.K. at 68,333 and the U.S. at 55,675. Land Rover global deliveries rose 36 percent last year, while Jaguar sales increased 6 percent. In the U.S., Land Rover sales climbed 15 percent to 43,664 while Jaguar fell 2.2 percent to 12,011, the company said Jan. 3.

Conclusion:

2012 looked good for many automakers. The French clearly need a kick in the pants, but everyone else seems to being playing the game well. Barring any economic issues like the Euro or dollar collapsing, we may continue to see sales increased in 2013 as consumers get more comfortable with the climate.

Sources:

http://www.autocar.co.uk/car-news/industry/lotus-plans-five-fold-sales-increase

http://www.autocar.co.uk/car-news/new-cars/new-mini-set-2014-launch

http://www.autocar.co.uk/blogs/detroit-motor-show-2013/volkswagens-us-ambitions

Porsche

Bentley

BMW Group

Rolls-Royce

http://www.bloomberg.com/news/2013-01-09/peugeot-2012-vehicle-sales-drop-17-on-europen-car-market.html

http://www.bloomberg.com/news/2013-01-13/volkswagen-sees-tougher-competition-after-record-sales-in-2012.html

http://www.bloomberg.com/news/2013-01-13/jaguar-land-rover-says-its-global-sales-rose-30-in-2012.html

Chinese Growth = Big Opportunity for European Carmakers

Saturday, December 16th, 2006

The Financial Times reported next week that the Chinese will become the third largest buyer of Rolls-Royce Phantoms taking the spot from Japan. Rolls-Royce plans to sell 70 Phantoms in China and 50 in Japan according to the article.

The cost of a Rolls-Royce Phantom starts at about US$400,000 in the Chinese mainland. Most orders are in Hong Kong, which has the world’s highest number of Rolls-Royce motorcars per capita. After taxes, the price is nearly doubled because the Chinese heavily taxes imported cars. As a reference point, Thailand taxes imports so heavily the final price can be 4 times what it would be without taxation. Of course, no company knows customisation like Rolls-Royce, and this is the reason one Chinese developer recently paid US$2,000,000 to import a highly customised version recently.

Of course, taken in the grand scheme of it all, Chinese imports of 70 cars pales in comparison to California, which will import twice as many for the rich, and possibly, famous.

For the BTKM analysis, we view this all as a sign that with the significant increase in the number of Chinese millionaires, Rolls-Royce can expect to see increase demand and thus increased revenue generated in Asia. Therefore, R-R will need to consider a strong marketing and supply channel push in the country in the coming year. At current rates, Rolls-Royce could expect to import more cars than California in less than five years.

Of course the implication here is that other European carmakers will also prosper. Rolls-Royce former amalgamate, Bentley, would lead us to believe that the Crewe, England-based automaker will also see much increased sales, especially considering a lower, yet exclusive price point.

Editors note: Here at Beyond the KM, we would buy a Phantom, but still need to find the money and the driver ;-) … so feel free to click the ads to generate a little loving revenue!

Are European automakers the new Ford and GM? Part 2

Tuesday, October 17th, 2006

In the previous posting of Beyond the KM, we took a look at the competition that the European automakers from Peugeot to Porsche will face in the coming years. We examined some of the East Asian manufacturers and assessed their strategies in Europe. In this installment we will suggest some strategies that the automakers might employ to fight off the increasing competition from Asia.

First, the marketing must change at European carmakers. Mercedes-Benz, for example, will see competition in the form of a Chery – Chery Automobiles of China that is. As noted in part 1, pointed out before, Chery will compete on price. Mercedes-Benz could never be profitable producing their vehicles and then selling them for $20,000. They require higher costs and profit margins. As a result, Mercedes and BMW must offer superior channels for delivery of vehicles, offer more models to fit as many niches as economically possible, and they must offer as much customization as possible, and they must develop a special connection with owners to retain current customers and gain more. These factors are essential to not just grow the market, but to retain market share in the face of stiff, price-based competition.

A second strategy that the automakers must focus on is innovation. Innovation does not mean BMW’s iDrive (few people find it fun OR enjoyable to spend five minutes “configuring” a car in order to turn it from mild mannered coupé into deadly beast). The innovation will not just come from more computers that interfere with driver usability, rather the innovation will come in the form of safety systems, handling improvements, design improvement, and improvements in drive train. Most importantly in the coming years will be improvements in engine technology that allows for more fuel-efficient engine designs and later the implementation of alternative fuel engines such as hydrogen.

Third, auto service must become increasingly important to the Europeans. Not only do they have the home field advantage, the companies have existing service centers. Additionally, service is typically higher profit than new car sales. Additionally examine, the highline car market. The average profit for a domestic car in the U.S., of which tens of thousands are made each year compared to the Porsche 911, which has fewer and far more customized vehicles, is vastly different. A Ford dealership may make just a few hundred dollars, but a new Porsche can make thousands because it is more exclusive, higher priced, and a very customized vehicle.

In another example, BMW has a service program called BWM Ultimate Service, available only in the U.S. This program should be offered everywhere because it really puts BMW in a class of its own in the way it deals with the customer. Any problem is easily taken care of, no questions asked. This allows the service departments at dealerships to run like cogs in a well-oiled machine. Service is where the profit is and will be in the future, car companies must embrace this.

Another area that will require change in the future will be on the part of government. Government changes must take place at the national and international levels. Tax laws must favor automakers and suppliers both. Labor laws must become less restrictive and more flexible as the market changes. Import laws must also be modified to handle imports from China. The European Union must take notice now so as to allow proper time for discussion.

Finally, the labor force must change. Germany’s automakers are some of the least product in the world. Only recently did VW force its unions to make its members more flexible in the hours it works. Until the recent agreement, VW workers were working under 29 hours per week and were the highest paid in the world! In addition to flexibility of the workers, the work forces in the EU and even U.S. must become smarter. Education levels are rising and the “blue collar” work is the worker of yesterday. In the future, workers will have to be mentally more flexible and be more innovative in the way they work.

Are European automakers the new Ford and GM? Part 1

Wednesday, October 11th, 2006

Change is afoot in corporate offices in Europe’s automakers. GM and Ford have struggled for many years now with the harsh realities of the global auto market. Now those realities are knocking on the doors of the European automakers. About two-thirds of Western Europe’s carmakers have seen changes in the executive suite in the last two years.

The reasons vary, e.g. BMW’s Helmut Panke left due to age restrictions, yet the BMW board failed to grant him a waive to allow him to drive the ultimate machine longer. The fact remains though that boardrooms and shareholders, alike, are concerned about increasing competition from the Far East.

Once a joke to respectable manufacturers, the Chinese automakers – led by Shanghai Automotive Industry Corporation (SAIC) and Nanjing Automobile – are increasingly competitive. The Chinese are increasingly developing more and more sophisticated facilities and borrowing more and more from the Europeans. Take American Axle and Manufacturing. AAM has been setting up new factories at breakneck pace. Indeed some of the intellectual property has been sold to the Chinese as well.

What all of this means is that the Chinese now have a way to produce good quality cars, yet sell them for next to nothing. Therein lies the problem not just for Renault and Peugeot and VW. Mercedes-Benz and BMW must be careful in their strategies since companies like Chery, is planning to bring their “luxury” automotives to the U.S. market soon. At $20,000 Mercedes and BMW are tracking the company, you can be sure. In the end, automakers will find difficulty in beating the Chinese on price. They must find other ways or they will falter as Ford and GM have done.

The next part in this topic will deal with possible strategies that the European automakers might develop to combat the competition from the east.