World Report: Mar. 20, 2006

MG Rover Auctions Its Past

The vultures are circling, picking over the bones of what used to be Britain's last volume car manufacturer. MG Rover went to the wall last summer, and now all that remains - from the valuable to the trivial - is being split up.

The Heritage Motor Centre, one of the U.K.'s most prestigious auto museums and based in Warwickshire, has revealed it's done a deal with Nanjing Automobile, the new owner of MG Rover's Longbridge plant in Birmingham. The move will safeguard historically important artifacts, documents, and photographs. HMC already owns a wide range of archive material - including the last production car, a Rover 75 - which tells the story of the Longbridge site from its beginnings in 1905. The newly rescued items will complete the historic record and form part of a special display later this year.

Meanwhile, there's to be an auction of everything that belonged to MG Sport and Racing, the company's motorsport divisions. Taking place on March 25, there's more than 900 lots of cars, accessories, and workshop equipment. The sale includes race-prepared vehicles, support vans, and even an MGF concept car that's only ever been seen before at motor shows. There's also merchandise including clothing, mugs, keyrings, watches, slot-racing, and die cast model cars - even limited-edition bone china tea sets. Visit www.wyleshardy.com for details of the event. -Richard Yarrow

Polk: China Registrations Up 19 Percent

About 3.8 million vehicles were registered in China in 2005, a 19-percent increase from the year prior, a new report from R.L. Polk and Co. says. The largest brand in the Middle Kingdom was General Motors, which overtook VW for 14.2 percent of the market, with the German automaker checking in at 13.3 percent share. Nissan was China's third-largest brand after being ranked 13^th the year before; a 58-percent boost in sales helped it climb to 4.1 percent market share for third place. Hatchbacks were big gainers in the Chinese market, up 36 percent in 2005, with Chery's QQ the leader in the segment.

Mexican Investments Worry Brazil

The Brazilian automakers' association, Anfavea, is watching and worrying over announcements of new investments in Mexico. DaimlerChrysler is putting $1 billion more in the Toluca, Mexico, plant and will aggregate suppliers on the same site. DC says that the decision to invest would not have been possible without the commitment of the Mexican government to the automotive sector. Anfavea forecasts the Brazilian market will continue to recover this year, but the valuation of the real vs. the dollar will curtail the exuberant growth of exports in the last two years. Brazil exported almost 900,000 vehicles in 2005, for a total of $11 billion in goods. The auto industry accounted for 20 percent of all the country's record trade surplus last year.-Fernando Calmon

Brazil Will Import More Chinese Parts

GM of Brazil's president, Ray Young, said that the company intends to import parts to make good use of the Brazilian currency exchange rates. Components may come from China, South Korea, Mexico and Europe and will trim production costs within Brazil, he says. The four big automakers in Brazil currently work with nearly 90 percent local content, which assures them competitiveness against the newcomers and profitability on exports. Thanks to the currency exchange rates, producers such as Honda and Toyota have been able to source more from Brazil: Honda, for instance, will increase Fit exports to Mexico by 40 percent this year.-Fernando Calmon

Wagoner to Visit South Korea

General Motors Chief Executive Richard Wagoner is to visit South Korea, possibly sometime next week, an industry source said.

During his low-profile visit, Wagoner is to visit GM Daewoo's Bupyong plant near Seoul to encourage workers, the source at GM Daewoo said. Other details weren't immediately available.

Although he had met with reporters during his last visit in June 2004, Wagoner doesn't have plans to meet with the press this time in Seoul, the source said. During the 2004 visit, Wagoner met with South Korean President Roh Moo-hyun.

GM Daewoo, South Korea's third-largest automaker, was established after GM and its partners Suzuki and SAIC took over most of the assets of bankrupt Daewoo Motor in the wake of the 1997-98 Asian financial crisis. -Peter Chang

China

The China car-sales market continues to sparkle, leaping 26 percent last year and off to a projected 12-percent increase this year. 

Sales in 2005 of 3.1 million vehicles (mostly cars) vaulted China into third place among the world's nations in sales of new cars and trailing only the U.S. and Japan. As the mainland market pyramids, the numbers break all kinds of records. Nearly seven buyers out of eight are first-time owners, compared to one percent in the U.S., according to J.D. Power & Associates. Not unlike the first decade of the 1900s in the U.S., as many as 100 domestic automakers are contending for the avid Chinese new-car shoppers, as well as ten foreign-based automakers.

This year, 25 new models will be introduced to the Chinese market, adding to just as many entry-level compacts already on sale. A Business Week report (March 20) comments that "with so many first-time buyers, there's little brand awareness and almost no brand loyalty. The Chinese often spend more than a year's income for even a low-end car, and 89 percent pay in cash." 

China's market has begun to escalate, from about a million sales in 2002 and only about 300,000 in 1996. The used-car market has joined in the upward thrust of sales, amounting to more than 1.25 million units last year.

GM became the top-selling automaker in China during 2005, displacing Volkswagen. The median age of Chinese car buyers is 35, compared to 50 in the U.S., and J.D. Power says Nissan dealers have been voted number one in customer service. With 1.3 billion citizens, China's growth opportunities appear boundless for automakers everywhere.  The U.S. Society of Automotive Analysts (SAA) will examine the China phenomenon at a breakfast session in Southfield, Mich., on March 15. -Mac Gordon

DC Has New Latin Region HQ

DaimlerChrysler AG has created a new regional headquarters inMexico City that will take over responsibility for marketing vehicles built by both the Chrysler and Mercedes-Benz groups throughout Latin American and the Caribbean.

The new headquarters will have responsibility for 30 countries including Brazil, Chile, Argentina, and Venezuela. Until now the management of DaimlerChrysler operations in Latin America and Caribbean region was divided between Auburn Hills and Stuttgart and smaller offices in Chile, DaimlerChrysler officials said.
Chrysler Group sales in Latin America increased 48 percent in 2005, and new small and mid-size vehicles will reach the markets during 2006 and 2007 as part of the DaimlerChrysler's ongoing effort to increase the group's sales outside the U.S. "Latin America is a critical region for our operations, and the new organization in Mexico will allow us to capitalize on existing synergies, increase efficiency, and improve our reach and service to our customers," said Thomas Hausch, Executive Director for International Sales and Marketing, Chrysler Group.

Klaus Maier, executive vice president Mercedes Car Group sales and marketing, also said the new structure of DaimlerChrysler Latina demonstrates the increasing collaboration between Mercedes Car Group and Chrysler Group. "It will help us to further enhance the presence of Mercedes-Benz, Maybach, and smart in the region," he added. -Joe Szczesny

Spy Shots: '08 Chrysler Minivans by KGP Photography (3/6/2006)
More upright and more international, by design.

Korean Brands See Sales Soar

South Korea's five automakers reported a combined 37-percent rise in their February sales, helped by increased demands at both home and overseas of their new products.

The five automakers, including top automaker Hyundai Motor and its affiliate Kia Motors, sold a total of 444,506 units in February. Of the total, domestic sales rose 22 percent to 88,119 units while exports jumped 42 percent to 356,387 units.

In February, Hyundai Motor sold 204,110 vehicles, up 23 percent from 165,688 units a year ago, thanks to rising sales of new premium models such as the TG Grandeur sedans and NF Sonata mid-sized cars.

Domestic sales rose 33 percent to 45,486 units in February while export rose 21 percent to 158,624 units.

The sales of Kia Motors last month rose 44 percent to 115,774 cars, led by a 49-percent increase in exports. During the first two months of 2006, Kia's overseas sales have risen by 5.8 percent year-on-year, with Europe showing the largest gain of 10 percent.

So far in 2006, the Sorento SUV has been Kia's top-selling model in overseas markets, with 17,766 units delivered. The Sorento is followed by the Sportage SUV, with 16,566 units sold in January and February. Passenger cars like the A-segment Picanto, B-segment Rio and C-segment Cerato (Spectra in some markets) continue to be robust sellers in overseas.

Third-largest automaker GM Daewoo posted a 75-percent rise to 102,971 units in overall sales in February, boosted by the launch of its Tosca premium sedan in late January.

Renault Samsung Motors, a unit of French Renault SA, reported 38-percent growth in February sales to 12,192 cars. Domestic sales fell 1.2 percent while exports jumped more than 12-fold.

Sales of SUV maker Ssangyong Motor, which is owned by China's Shanghai Automotive Industry Corp., saw its total sales fall 8 percent to 9,459 vehicles in February, despite a 16-percent rise in exports.-Peter Chang