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

Auto-Culture & Decision Making In A Gen Y World

Magda Wierzycka, the CEO of Sygnia Asset Management, writes on Moneyweb’s blog about Generation Y and their characteristics. Generation Y are those born between 1982 and 1995 of Generation X and Baby Boomer parents. /// She describes this generation as growing up amidst ‘unprecedented prosperity’ with access to ‘better, more rounded education’. Furthermore they are: ‘extreme[ly] technology savvy’, ‘very family orientated’, ‘demanding and outspoken employees’ with an ‘overdeveloped sense of entitlement’, they ’struggle to deal with failure or criticism’ and ‘flounder if left unmanaged or unsupervised’. Caption & Image Credit: dirkvisser/Brightest Young Minds

Auto-Culture & Decision Making In A Gen Y World

In a study released today by AutoPacific - a future-oriented automotive marketing research and product-consulting firm, some interesting and surprising characteristics and purchasing traits reveal themselves and may be useful to those who desire to appeal to an increasingly important market segment.

Many assumptions like the popular belief that the Gen Y crowd exclusively prefers compact and energy efficient cars are somewhat dispelled through the study. Over half of Gen Y are considering the purchase of a mid-size car or mid-size crossover SUV. They expect that technology will improve fuel economy and environmental friendliness and allow them to purchase a vehicle that is sized to meet their personal needs.

“Don’t be fooled by the growth of certain segments over the years,” said George Peterson, president of AutoPacific, the research firm that conducted the study. “The Compact Car segment shows sales growth, yet a new Toyota Corolla is similar in size to an older Toyota Camry. Vehicles have gotten larger over time but segments have not been redefined. Ultimately, Generation Y consumers are purchasing vehicles that are sized appropriately to their needs and lifestyle.”

The study entitled “The Generation Y Opportunity”, which come from data gathered from AutoPacific’s annual survey of over 32,000 new car and light truck buyers in the United States, looks closely at Gen Y recent buyers of new vehicles and how they compare to older generations. In many ways, Gen Y is following in the footsteps of their Baby Boomer parents, but in more extreme ways. The study details current Gen Y new car buyers and the future market.

$1.5M Russian SUV Features Diamonds, Whale Penis Leather - That's all you really need to know about the $1.5 million Dartz Prombron Monaco Red Diamond Edition. Yes, the diamond-encrusted white gold gauges and gold-plated bulletproof windows are impressive, but seriously, whale penis leather interior. /// The already bulletproof and wildly over-the-top 8.1 liter GM V8-powered Dartz Kombat T98 is getting a name change to Prombron and along with it will come a complete and brain-maimingly bourgeoisie upgrade with the Monaco Red Diamond Edition. The world's most expensive ultra-luxury SUV will debut at the 2010 Top Marques Monaco show with luxe features crazy enough to make a Maybach blush. Caption & Image Credit: Jolopnik

This excerpted and edited from a press release issued by AutoPacific -

GENERATION Y OPEN TO NEW BRANDS, NEW TECHNOLOGY AND HYBRIDS
Survey Shows Generation Y Frequently Multitasking While Driving
AutoPacific, “The Generation Y Opportunity”, released for publication - October 21, 2009

Willing to embrace new brands, new technology and alternative powertrains, Generation Y will redefine the automotive market. A just released study on Generation Y new vehicle buyers in the United States shows Generation Y consumers are more likely than the generations before them to consider purchasing a Chinese or Indian branded vehicle, more willing to accept hybrid powertrains, and more likely to want the latest entertainment technology in their vehicle.

As the largest generation since the Baby Boomers continues to gain spending power and enter the new car market, which automakers will win their confidence? AutoPacific’s study underscores the opportunities for automakers to reach Generation Y consumers as they move through their Teen, Young Adult and Young Family life-stages.

“Growing up with continuously evolving technology and electronics has given Generation Y a unique ability to adapt easily to change, a willingness to accept new brands, and an expectation that their vehicle provide the best of what is available,” said George Peterson, president of AutoPacific.

Though many Generation Y consumers would choose a trip around the world over a luxury vehicle, Generation Y does expect that the vehicle they buy will be more than just basic transportation. “Generation Y is more likely than older generations to own portable electronics, more likely to research their vehicle options on the Internet, and an astonishing 29% of those surveyed are more likely to frequently multi-task while driving," continues Peterson. "They know what’s out there, they know the economical and environmental problems we face, and their vehicle expectations reflect that knowledge.”
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The AutoPacific Generation Y Opportunity is conducted annually to determine who Generation Y buyers are and what they want from their future cars, including size, engine, transmission and attributes like entertainment features, luxury features, in-vehicle communications, comfort, and convenience features.
Reference Here>>

Maybe the Russian-made Dartz Prombron isn't exactly the chief target in the luxury car segment for Gen Y'ers, but at this price ( $1.5 million) it had better have bluetooth iPOD compatibility, integrated hands-free cellphone technology, and a mount to hold the Apple MAC that is accessing the internet via a MiFi internet hotspot so that they can be plugged into Twitter while cruising down to Glamis for a week-end of radical Dune-ing!

... notes from The EDJE

May A Tata Or A Chery Be In Your Future?

Chery Automobile Sales Company announced that Chery S16 will be marketed under the names “QQme”, pronounced “QQ mi”. This name sounds smart and fashionable, was from thousands of recommendations of Chery employees, QQ drivers and vendors. Chery QQme was designed by Enrico Fumia, the chief designer of Lancia, Alfa Romeo and Ferrari F90. Pricing in China is only about $2, 940. Caption and Image Credit: chinacarfans.com

May A Tata Or A Chery Be In Your Future?

The Tata, made in India, or the Chery, made in China, may actually become names that American's get to know if 15% of car purchasers can have their way.

That's right, in a newly released study, fifteen percent of new car buyers in the United States say they would consider purchasing their next vehicle from China, and eleven percent or so would consider buying a car from India. The people surveyed were all were so confident, that they even would purchase a car made from these countries without knowing specific brands or vehicles before hand.

If you think this is far fetched, the same study measured found that even though Korean manufacturers like Kia and Hyundai have been selling cars into the US market for about a couple of decades, the American consumer would buy a car model sight unseen at about a sixteen percent response.

As the flagship of all Chinese automakers, Chery have passed its 11th year, and Chery cars had become the first choice of many Chinese people. Until recently, Chery did not have any high-end brand names, but this status changed last March 19th, 2009 when Chery’s high-end brand Riich was introduced. the Chery high-end sedans and commercial cars will be produced using the Riich brand added to the Chery, Rely and Karry brand names for cars to be marketed by the company. Caption and Image Credit: chinacarfans.com

Based on a national survey of more than 30,000 new car and truck buyers, AutoPacific’s 2009 Research Suite database reveals insights into the willingness of Americans to consider cars and trucks coming from China and India. The just-released study – “Opportunity for Chinese and Indian Brands in the USA” –provides new insight into who these consumers are and what they’re looking for in their next car or truck.

“Not only are a significant number of people willing to consider Chinese and Indian brands, this group consists of highly desirable buyers who would be coveted by any manufacturer. They tend to be young, well-educated, and affluent for their age and have good jobs in administrative, health care and middle management positions,” added Peterson.

Tata Nano - The world’s cheapest car, measuring at a mere 10.2 feet in length, goes on sale next month in India. (And I thought the Smart car was small… geez.) Manufactured by Tata Motors, the Nano will retail for just over $2,000.00, making new car shopping affordable to a whole new demographic in India. Caption & Image Credit: carsdiva.wordpress.com

The study shows Chinese and Indian considerers are more likely to currently own a Japanese or a Korean brand car, indicating that these brands may have the most competition from the new entries, rather than domestic brands like Chrysler, Ford and GM. The study also revealed that while those who would consider a car from China and India rate reliability and durability high, they are not as interested in the dynamics of a vehicle like handling, braking and acceleration.

George Peterson, president of automotive research firm AutoPacific and author of the study states, “With so many premium and high-tech non-automotive products already being made in China and purchased by Americans, why not automobiles too? It appears that buyers in America are willing to give Chinese and Indian vehicles a chance right out of the box. Understanding these consumers will be critically important to the success of any newcomer.”
(ht: AutoPacific)

... notes from The EDJE

Survey Sez?! ... Ford Is A winner For Standing Alone

In Los Angeles last November, Ford showed off the latest Mustang in standard and GT forms. (Click here to see our video interview with one of the designers responsible for the terrific 2010 package, filmed in LA.) In Detroit, we get the first look at the newest GT500. The car will be available in coupe and convertible forms in spring 2009. Caption & Image Credit: AutoPacific

Survey Sez?! ... Ford Is A winner For Standing Alone

If life were a game show and that game show were Family Feud, Ford would be the "go to" answer, if the survey answer concerned itself about the level of respect a consumer would have for any automobile manufacturer.

The credit crisis brought about through the fall-out of the greater sub-prime mortgage loan market collapse that has shown itself over this last full year exposed the whole of the American automobile manufacturing community. General Motors and Chrysler accepted the Bush Administration's offer to utilize a loan of Federal money in order to weather the storm and fight off bankruptcy.

Ford elected not to accept the offer and therefore maintained control over the way the company would manage itself and we all now know what has happened to the other two competitors. General Motors is owned by the Federal Government and the Auto Workers Union and has declared bankruptcy while Chrysler's ownership, through bankruptcy, was transferred to the Auto Workers Union while the balance of the company was sold off to the Italian auto manufacturer, Fiat in order to bring it out of bankruptcy more quickly.

In both cases, American contract law was over-run as the Federal Government declared that the primary investors and Bond holders were to be honored last as opposed to first as it related to the control of the assets of the company ... both companies.

Ford Fiesta Poised for USA Launch in 2010 - The Fiesta has been on sale in Europe since August 2008 and about 117,000 have been sold to date. With the assistance of the EPA, Ford has been able to bring in 145 into the states for testing and evaluation purposes. Caption & Image Credit: AutoPacific

In a recently released survey of consumer attitudes conducted by AutoPacific, Ford has surged ahead by a margin of 3 to 1 ... of both GM and Fiat/Chrysler in the "Not concerned at all" response to the level of confidence about the viability of purchasing or leasing from a specific manufacturer.

In the coveted "likely to buy" category, Ford equaled the attitudes held for the top Japanese manufacturers.

The survey proves that consumers want to purchase from Automobile manufacturers that have their corporate structure firmly planted in Capitalism and not a structure born from another route.

Image Credit: AutoPacific

This excerpted and edited from Vehicle Voice -

Survey Indicates Ford Benefits From Troubles Of Others And Not Taking Bailout
Public Responds Positively to Ford's Actions, but Some Still Have Reservations
Vehicle Voice - June 17, 2009

American consumers' opinions about Ford Motor Company have been positively influenced by the company's decision not to accept government bailout funds, and by the bankruptcy filings of rivals General Motors and Chrysler. Automotive research and analysis firm AutoPacfic conducted an online survey of more than 900 U.S. consumers regarding their purchase intent and opinions of individual car companies. Highlights include:

* Asian and European manufacturers scored highest when the survey asked "How concerned are you about buying/leasing a vehicle from" a particular maker, with an average of 61% "Not concerned at all." Ford scored 48%, far ahead of GM's 15% and Chrysler's 14%.

* Ford matched or scored higher than its Asian and European competitors to the question "How likely are you to buy/lease a new car" from a specific manufacturer:

o Toyota -- 43% Likely/Very Likely

o Ford -- 43% Likely/Very Likely

o Honda -- 41% Likely/Very Likely

o Volkswagen -- 33% Likely/Very Likely

o Hyundai -- 22% Likely/Very Likely

o General Motors -- 15% Likely/Very Likely

o Chrysler -- 7% Likely/Very Likely

* Skepticism was also revealed:

o 39% Agreed/Completely Agreed that Ford Motor company was simply lucky to have "cleaned house" before the economic downturn

o 39% Agreed/Completely Agreed that Ford has yet to prove it won't ask for a bailout in the future

"Ford's restructuring, which started months before the current economic downturn, has clearly helped position it more closely with its Asian and European rivals than its domestic competitors, in terms of public perception," said George Peterson, president of Tustin, CA-based AutoPacific. "Some don't think Ford is out of the woods but, overall, consumers view Ford quite favorably verses their cross-town rivals and on par or better than most imports. All brands will be significantly challenged if the downturn continues into 2010."
Reference Here>>

Ok, so Ford is not out of the woods just yet, but all one has to ask themselves when one is considering the purchase of a new automobile ... Would you buy a car manufactured by a car company that is owned by the Federal Government, and/or a labor union, or would you buy a car from a company run by a management team that grew up creating cars from the ground up that address the needs of the consuming public?

... notes from The EDJE