Beijing, China (CNN) – Hundreds of thousands of Chinese are expected to stream through the Shanghai Auto Show, but walking around the convention center, it feels as though everyone is here at once. Crowds of people are gawking at the new designs and concepts – the eco-friendlier GM Chevy Malibu, the "masculine" VW Beetle, the Geely motorcycle cum mini car "McCar" that can transport your elderly mother in her wheelchair.
This show is running concurrently with the New York Auto Show, but I'm told the difference is the number of people eager to buy their first car. Auto analysts say 3 out of 4 Chinese car customers are first time buyers - and nearly all of them pay in cold, hard cash; No wonder carmakers are racing in to the Chinese market.
Executives here have been playing up the potential growth; however, many have also voiced their concerns about a recent trend. GM, Ford, and PSA Peugeot Citroen have acknowledged the push here by Chinese authorities for indigenous brands.
Philippe Varin, CEO, PSA Peugeot Citroen, said government pressure crept in to the European carmaker's recent discussions to expand in China. He said it's clear that today a critical matter for the Chinese government is to promote local brands. "That is the reason why we have decided to have a local brand," he said at the unveiling of the company's DS5 model.
Doing business in China is getting tougher for international businesses and the big car brands are feeling the pressure. Despite the government's restrictions on foreign carmakers, companies like GM and VW are highly successful here. The reason is that Chinese people like to buy foreign branded cars. This is not the case for many other industries - such as white goods – where Chinese players reign.
Even though international carmakers would earn money off a Chinese brand, there is still some concern that the new demand could curb brand loyalty among Chinese consumers to foreign cars.
Which car brands will come out ahead in China?
New York (CNN) - Honeywell CEO David Cote may be a fan of blues music, but he is unequivocally upbeat about the company’s prospects.
After years of battling problems related to past acquisitions, asbestos liabilities and unfunded pension obligations, Honeywell finally seems to be hitting its stride. The stock just hit a 52-week high and Cote has affirmed the industrial conglomerate is on track for sales of $35-36 billion dollars this year.
The secret? Being boring pays! Honeywell’s businesses involve energy efficiency, safety and security and engine systems to name a few. Not exactly sexy areas, but they are essential, especially in developing economies. Honeywell gets 50% of its sales outside the U.S.
New York (CNN) – Ford's new Focus Electric drove into the glare of the assembled media in a Manhattan showroom, approaching a mocked-up version of a domestic garage. Bill Ford - the great grandson of Henry - plugged the car into a charging station.
The display was part of a twin city ceremony in New York and Las Vegas to herald the auto giant's answer to the electric passenger cars released by General Motors and Nissan in 2010.
Ford is currently riding high, with record profits and strong consumer reviews. In recent years, the firm has refocused on its iconic brand and diversified its range of models. But it comes to the eco-party late: The car will not be released until late this year - nearly a year after its rivals.
"The biggest difference is we're electrifying our mainstream vehicle called the Focus," Executive Chairman Bill Ford tells CNN. "It's not a one-off vehicle. And of this platform, we're going to have a conventional gasoline engine, we're going to have a hybrid, a plug-in hybrid and we're going to have pure electric."
This portfolio of consumer options is key for Ford: Demand for electric cars remains an unknown quantity and the company is planning to let buyers drive manufacturing and supply.
With oil prices expected to rise throughout 2011, some analysts are predicting interest will jump. But others say progress for all electric cars will be hamstrung by the lack of public charging stations and an inability to travel long distances.
If Ford's gamble will pay off remains an open question.
Paris, France (CNN) - As I sit at Ford's massive stand here at Paris Motor Show, I can see new C-Max models, new Focus models, new Mondeo models, but not a single female model.
I can't remember Ford having the ubiquitous "pretty model" standing by its cars at the last car show either.
No matter, a 30-second walk to Chrysler proves it’s not just an “American” thing. There are plenty of young, tall and always female models in short blue dresses here. Then again, Chrysler is controlled by Italian car company Fiat. It does seem to me the Italian models (the ones made of metal) seem to always have the other kind of models standing next to them.
Now I'm at Alfa Romeo and the ladies are all in black with high heels and lots of bling. Across the way is Ferrari and, well, what can I say? At least there are no bikinis.
David Fitzpatrick, account director at automotive PR agency PFPR Communications, was recently quoted as saying that the “days of bikini-clad women on bonnets are long gone.”
Many women will be cheering that development, especially the ones employed within the industry. The question is whether carmakers are just moving with the times, or whether they are making a deliberate effort not to alienate female car buyers. In tough times for the auto industry, perhaps they should consider going one step further and dispensing with models all together. Just a thought.
Off to Maserati and well, for such a small brand there is a lot of media attention (could the red wine and chef slicing beef have anything to do with it?). At least here there aren't the living models standing quietly next to each car. So it appears not all Italian brands feel the need to accessorize their vehicles with women. Or maybe they are just on a break. I think I'll walk back to Ferrari.
It's been customary of late for Mercedes Benz to kick off the Paris Motor Show (sorry Renault) the night before the doors open to the press.
Mercedes throws a little party at its Champs-Elysees showroom and on Wednesday night it was filled with guests and media.
The highlight for those of us still working is a quick interview - much quicker this time - with Daimler Chairman Dieter Zetsche who is in a buoyant mood and smiling broadly under his signature white handlebar mustache.
And why not? Mercedes sales and revenue have rebounded this year.
Zetsche admits luxury sales have been better than he could have hoped this year and says that Mercedes is increasing its market share within the segment.
At last year's show the luxury and super luxury makers were all cautiously optimistic.
After all, the high end of the auto market is not usually hurt by recession, given the rich don't suffer as much.
But like the airline industry, car makers have seen welcome sales increases, in part due to government support no doubt.
Zetsche notes that Mercedes, like Ford, cut costs enormously during the economic crisis, making it that much easier to post profits when sales increased.
This show is also about the electric car.
We will see mass produced models that are ready to hit the showroom rather than the concept electric cars that have been a staple at these shows for years.
The question is, will you the consumer buy one?
Zetsche told me it would be "optimistic" to say that Mercedes could see even five percent of it sales coming from its electric offerings by 2015, even though it plans to offer an electric version of most models.
Electric cars and electric batteries will be the talk here in Paris. It's not clear if enough buyers will want them though.
(CNN) – People in the U.S. used to rail against imported cars that are “run on rice” (read: from Japan). Now it turns out the most corn-fed cars are from two Japanese automakers: Toyota and Honda.
Cars.com in Chicago released its annual ranking of vehicles deemed most “American” based on American production, percentage of domestic parts used and American sales volume. Half of the top 10 cars are made by the Japanese automakers.
Since the 1980s Japanese automakers have cultivated production facilities within the United States to be both closer to delivery in its largest market and undercut the anti-Japanese angst that rose with the country’s global stature and competitiveness in the world markets.
The ranking comes on the heels of Toyota’s announcement that European and North American operations will be run by European and North American managers to improve cross-country communications in the wake of the wave of recalls earlier this year.
Here’s how the most “Made in America” cars stack up, according to Cars.com.
Rank Make/Model U.S. Assembly Location
1. Toyota Camry; Georgetown, Ky.; Lafayette, Ind.
2. Honda Accord: Marysville, Ohio; Lincoln, Ala.
3. Ford Escape; Kansas City, Kan.
4. Ford Focus; Wayne, Mich.
5. Chevrolet Malibu; Kansas City, Kan.
6. Honda Odyssey Lincoln, Ala.
7. Dodge Ram 1500; Warren, Mich.
8. Toyota Tundra; San Antonio
9. Jeep Wrangler; Toledo, Ohio
10. Toyota Sienna; Princeton, Ind.
After a series of safety recalls, the Japanese automaker has been trying to move on, pledging better safety to its customers.
Now Toyota's luxury sports utility vehicle, the Lexus GX 460, has been slapped with a rare "Don't Buy" warning from influential magazine Consumer Reports.
The magazine's testers believe that the SUV has a handling problem around sharp turns. During the tests, the testers found the vehicle slid nearly sideways before the electronics stability controls kicked in.
Their verdict? They wouldn't want to drive it with their families in the car.
The safety warning is the latest blow to Toyota's battered image. However, the carmaker's attitude appears to have changed. Toyota moved swiftly to address the issue. It suspended the sale of the GX460, is offering loaner vehicles to concerned customers, and says its engineers are already working hard to correct any problem.
Toyota certainly wants to salvage its reputation as a maker of safe, reliable cars.
Would you buy a Toyota car today?
If you had the rare privilege (and money) to buy one of Britain’s most iconic luxury auto brands, would you turn to Toyota to help you round out your range of cars? That is exactly what Ulrich Bez, CEO of Aston Martin has done for the company’s concept “luxury commuter car” called the Cygnet.
The Cygnet mark's Aston Martin's entry in the compact car market.
It’s been two years since Bez, backed by private equity, bought the 100-year-old brand from Ford.
I thought there was a mistake this week when I saw what appeared to be Toyota's iQ microcar displayed at Aston Martin’s stand at the Geneva Motor Show complete with Aston Martin's signature wings above the grille. Before this show, enthusiasts had only still photos released by the company to go by.
Bez enthusiastically told me this was the little car for Aston Martin owners to “go and buy bread” but that luxury models costing 10 times the Cygnet's €30,000 price tag will still be the core of the brand. He scoffed at my suggestion that he has created “a starter car.”
Of course he asked Toyota to help with this concept car long before the current recall problems hit the Japanese auto maker, and he is relaxed about the whole mess. Bez said highly-engineered products are liable to faults and those faults can be fixed.
He also reminded me that although the Cygnet is a Toyota design, the interior craftsmanship is all Aston Martin.
It won't hurt the company’s need to meet the likely onslaught of tougher emissions targets.
The automaker will initially target this car to existing Aston Martin owners or those who have one on order. But the plan, if and when this concept car is launched, is to eventually offer it to the general public.
Finally, there will soon be an Aston Martin for everyone. That is, if you want a tiny Toyota with an amazing leather interior.
Tokyo, Japan - It’s been a rough start to 2010 for some of Japan’s top executives.
Toyota Motor Corp’s management has been in damage control mode, out to protect its now-tarnished brand. The global recall for its sticking accelerator pedals has meant hundreds of millions in lost revenue but more importantly, battered the automaker’s reputation for reliability and quality.
But Toyota is just the latest Japanese corporate icon to lose its way.
A few weeks ago, Japan Airlines executives were feeling similarly uncomfortable, though for a different reason. Japan Airlines filed for bankruptcy, one of Japan’s largest ever corporate failures. The airline collapsed under a mountain of debt, accumulated by ballooning pensions and unprofitable flights.
They’re two very different companies struggling with two very different problems. But analysts agree what they do share is getting too big, too quick, and losing focus of the basics.
Tokyo based financial advisor Timothy Kirkwood says it’s a path that Japanese companies have taken as they’ve expanded globally. In Toyota’s case, it was so focused on cost cutting while becoming the world’s #1 automaker that it lost focus, like making sure the accelerator wouldn’t stick.
“There has been some outward looking management that’s enjoyed the global consumer spending boom in the good times. But they were overexposed to the downside. That’s what’s causing the problems in Japan right now,” said Kirkwood.
But he follows that up with the strong belief that if there will be a company that can recover from being overexposed, it’s Toyota, a well-run company with years of a proven brand.
It will only happen, though, as long as Toyota’s boardroom takes a hard look at itself and gets back to basics.
SEOUL, South Korea - There are a few reasons why Kim Han-Chal calls his supercar the “Tiger.”
The first is apparent when you get behind the wheel of the Spirra. Zero to 100 kilometers per hour (0-62 mph) in 3.8 seconds with 500 horsepower, your throat hits the back of your neck as the gas pedal hits the floor. The Spirra is the definition of supercar: fast, sporty, sleep, and a six-figure U.S.-dollar price tag.
But the more important reason Kim, the creator of the car, calls it the “Tiger,” is that the animal is a powerful symbol of Korea. That’s apropos for Korea’s first venture into the supercar market, made with all Korean parts, built with Korean hands. “We were the only country that didn't have a supercar,” Kim says. Neighbor Japan has a Toyota and Honda supercar, and Germany and Italy has Porsche and Lamborghini.
The car enthusiast, who pledges if you check carefully he has gas running in his veins, dreamed of building a car on his home soil. He believed in his countrymen’s ability to produce a high-end car, not just the reliable, eco-friendly Hyundai or Kia.
For 10 years, he tinkered with designs and poured his money into concept car after concept car. But it wasn't until he partnered with Oullim motors, backed by the wealth of a high tech company, that he began production. Now Europe is his first major customer. A dealer in the Netherlands purchased 145 orders of his handmade cars over the next three years, marking the first commercial entrée of his supercar into the global market.
CLSA auto analyst Christopher J. Richter says supercars are often losing business ventures and are built to send a message. “These guys, I think the message they want say is 'Hey, we can make a super car too, high performance car too, and we can do it with all Korean components. It stirs the pot a little bit and shows that auto-making is not just about Germany or Japan, but Korean auto-makers have a valuable contribution to make.”
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