The Dongfeng Race Team; Amsia Motors JV Partner - One Design, Part II.

If you�re from the sailing world you will already know about the extra pressure the One Design nature of the Volvo Ocean 65 racing machines has put on the sailors of the Volvo Ocean Race. And even if you�re not from a sailing background all you need to know is:

Two years ago the Volvo Ocean Race introduced a One-Design boat.
All identical, all built to the same rule, no way to buy victory through technology.

Meaning the playing field is even in technology terms.

Meaning the pressure is all on the people.

Meaning there are no more excuses.

With the finish line approaching, Dongfeng Race Team, one of the Volvo Ocean 65s competing in the Round Britain and Ireland Race, are currently defending third position, holding off the attacks from Alvimedica and Team SCA overnight and throughout today as they head up the English Channel towards the finish in Cowes. For some the outcome of this race could provide a form guide for the Volvo Ocean Race itself, and naturally the predictions were that Abu Dhabi Ocean Racing would come out on top. As it turns out these predictions were spot on and with Ian Walker�s �Azzam� just hours away from the finish line in a record breaking time (for monohulls), it�s time to truly dig into what it means to race �One Design�.

Although some are world class dinghy sailors in their own right, for the Chinese onboard �Dongfeng� adapting to boats as big and powerful as the Volvo Ocean 65, and sailing out of sight of land, is where the challenge lies. Knowing that the design of the boat would no longer play a part in the outcome of the race it has been down to Team Director, Bruno Dubois and Skipper Charles Caudrelier to iron out the creases of communication and build a strong, solid team to compete in this edition of the Volvo Ocean Race. In a race where every tiny move or change of trim is the difference between keeping a place or losing it, racing is intense and the victors will be the team excelling in boat trim, seamanship, tactics, best interpretation of the weather data and pure physical and mental endurance. Small things will matter in this new breed of boats.

Abu Dhabi Ocean Racing are currently setting the bar very high for the rest of the Volvo Ocean Race teams. And its not surprising with 20 Volvo Ocean Races between the crew � a total of 13 years and 7 months at sea - something wouldn�t quite be right if they weren�t at the front of the fleet.

But for Dongfeng Race Team training continues - the learning curve remains very steep and what better way to go up it than racing against your competitors in this dress rehearsal. The team will get better, the people will grow stronger and the gap will close. ref: dongfengraceteam.cn

The Challenge of Dongfeng Race Team; Amsia Motors JV Partner - Part I.

dongfengraceteam.cn

The Volvo Ocean Race is the world�s toughest sailing event, where the elite of the sailing profession battle it out on the most treacherous oceans. It is a nine-month marathon on the seas, passing through four oceans and five continents. The race is an exceptional test of sailing prowess and human endeavour where the athletes push themselves to the limit of endurance in what is commonly referred to as the �Everest of Sailing�.

Over the duration of the race, the crews experience life at the extreme: no fresh food is taken on board so they live off freeze-dried food; they experience temperature variations from -15 to +40 degrees Celsius and only take one change of clothes with them on board. They trust their lives to the skipper and each other and experience hunger and severe sleep deprivation.

dongfengraceteam.cn

Dongfeng Race Team was the second of the Volvo Ocean 65�s to cross the Artemis Challenge finish line, 4 minutes behind Abu Dhabi Ocean Racing and ahead of Team SCA. Today�s Artemis Challenge, a 50-mile race around the Isle of Wight, has been the very first opportunity for �Dongfeng� to line up against the Volvo Ocean Race competition.

Dongfeng Race Team completed the Artemis Challenge course in a time of 5 hours, 3 minutes and 46 seconds. This was the first time since the beginning of the Chinese campaign that Charles Caudrelier and his crew have found themselves within such close proximity to their competitors: �We�re not going to put too much pressure on ourselves but, for sure, it�s important to us,� explained Caudrelier. �The first time for us we�ve see the other teams and the first time we�ve performed in race mode as a team.�

Bruno Dubois, Dongfeng Race Team�s Director was out on the water when his team crossed the finish line. �We know we have a young team and we know that out of all the teams we have the least experience. I�m not expecting miracles but I�m confident we will see progress and eventually results. I am happy with the outcome from today�s challenge.�

A fleet of ocean going racing machines from the 70ft multihull Oman Sail Musandam to the 33ft Beneteau Figaro IIs took part in today�s Artemis Challenge. Dongfeng were part of the winning group A and a share of the �10,000 charity prize fund will be donated to Dongfeng Race Team�s nominated charity Race for Water. A charity dedicated to water preservation.

dongfengraceteam.cn

Today�s Artemis Challenge has been a nice, light airs, warm up. But with the Round Britain and Ireland Race start just days away, and the Volvo Ocean Race starting in less than two months, there is much more to come - and it won�t always be as tame, amicable or rewarding as today.

The RACE FOR WATER Foundation is a Charity dedicated to Water Preservation. Today, this vital resource is in serious danger. It has to be protected. To learn, share and act on our Water Footprint and Marine Plastic Pollution are the main issues the Foundation focuses on.

LEARN: Educate and raise public awareness
SHARE: Work together to make a difference
ACT: Implement practical solutions

The RACE FOR WATER Foundation has specifically developed a program based around four pillars:

AWARENESS: Raise understanding among general public and key opinion leaders about the urgency of water preservation through the �Water Guardian� program, exhibitions, our traveling Water pavilion and our ambassador boat: the MOD70.

BUSINESS: Engage businesses and scientists, develop the understanding of the impacts and propose tools for action in collaboration with the WWF and WBCSD.

EDUCATION: Inspire the next generation to act to preserve our water resources and engage them to make a difference with the help of the super hero �Titeuf�. The aim is to include the program in the school curriculum.

SCIENCE: Develop a better knowledge base and understanding of the impacts of plastics on the maritime environment, measure the real rate of waste dispersal and create a research center on plastic pollution in collaboration with governmental institutions.
Ref: dongfengraceteam.cn

The Big Auto Brands, profits, policies and platforms of Brasil.

Employees work on the assembly line at the Renault plant in Sao Jose dos Pinhais August 2, 2012.
CREDIT: REUTERS/RODOLFO BUHRER

Growth in Brazil's car market has screeched to a halt, but it is way too late for automakers to hit the brakes.

While domestic sales retreat and exports plunge, Brazilian factories are adding over a million vehicles of new capacity in just a few years, battering profitability in the world's fourth biggest auto market.

By 2017, global carmakers will be set up to build 6 million vehicles a year in Brazil even as local sales may struggle to pass 4 million, analysts say. They blame heavy-handed industrial policy and an excess of emerging-market euphoria.

"Everyone jumped on the bandwagon," said IHS Automotive analyst Guido Vildozo, citing oversized ambitions in Brazil after sales averaged 10 percent growth in the past decade. Carmakers are now investing about $5 billion a year in local assembly lines just as the market starts to shrink.

Profits have been the first casualty of the oncoming squeeze and labor relations could be the next, with the specter of layoffs looming in a presidential election year. A scramble for export markets also highlights the competitive gulf separating the industries in Brazil and regional rival Mexico.

"It's going to be a painful process, especially negotiating with the unions, but we're not expecting anyone to close shop," Vildozo said.

Long the darlings of Brazilian industrial policy, carmakers are in a bind precisely because of the protections they enjoy.

President Dilma Rousseff and predecessors have kept auto sales chugging along with tax breaks, cheap credit and import barriers, which encouraged a host of noncompetitive auto plants.

The result is a crowded and inefficient industry shackled to its domestic market, with few export options except a crisis-prone neighbor, Argentina.

Sales and output in Brazil have doubled since 2005 to around 3.8 million vehicles last year, but exports fell 40 percent to about half a million cars, trucks and buses.

When the going was good, automakers enjoyed fat profit margins on outdated platforms like a 56-year-old VW van that only went out of production last year. But the party is over for the biggest brands in Brazil, after years of depending on cash from local units to offset meager global growth.

Fiat SpA (FIA.MI), Volkswagen AG (VOWG_p.DE), General Motors Co (GM.N) and Ford Motor Co (F.N) saw profits plunge at their Brazilian units last quarter due to slipping market share, rising costs and a weaker currency.

Concerns spread through the industry in late 2013 over growing lines of new cars backed up at factory patios. Analysts reported that dealers were offering discounts of as much as 35 percent to clear expiring models.

Brazil's market may be in the middle of a three-year slump, according to Stephan Keese of auto consultancy Roland Berger in Brazil. He warns that the glut of new factories in a weak economy could lead to more than 30 percent excess capacity in the next few years, about double the industry's usual slack.

Rosy forecasts from the boom years are only partly to blame, he added, as Rousseff's policies forced many brands to build local plants in order to avoid steep taxes on imported content.

"The overcapacity was foreseeable because it was not supported by the market. It was largely about government intervention," said Keese.

WORLD CUP DISRUPTION

Rousseff has coaxed along the industry with both carrot and stick, but the tax breaks she unveiled in 2012 to prop up demand have provided diminishing returns. Last year sales fell 1 percent despite the costly stimulus, the first drop in a decade.

The tapering of those incentives, along with tighter credit, shaky consumer confidence and the disruptions of hosting the soccer World Cup starting in June, could cut sales in Brazil as much as 3.5 percent this year, according to Keese.

Another government rescue is unlikely, and not just because of a tight budget target as Rousseff seeks re-election.

Expanding access to new cars has long been an easy crowd pleaser for Brazil's ascendant middle class and the industrial unions at the heart of the ruling Workers' Party. However, that political calculus is starting to change.

Outrage over a lack of decent public transportation set off a wave of protests last year, drawing more than a million Brazilians into the streets. Awful traffic in major cities and a lack of public investments led many to question why the government was using tax breaks to put more cars on the road.

The auto industry argues that it provides more than 150,000 jobs and over a fifth of Brazil's industrial output. Carmakers have announced about $35 billion of capital spending from 2012 to 2018, helping to lift the country's dismal investment rate.

Yet even automaker association Anfavea concedes that sales in Brazil will not absorb more than three quarters of the country's capacity by 2017, when local plants should be able to produce over 6 million vehicles per year.

"This is a good problem to have," Luiz Moan, a senior GM executive currently in charge of Anfavea, told journalists this week. "We know we need to gain competitiveness so we can export at least a million units in 2017."

That process has started with policies requiring carmakers to update their Brazilian assembly lines along global standards rather than recycling outdated models. Anfavea is asking for more government measures to help it boost exports, including new tax benefits, trade deals and preferential financing.

ref: reuters.com

In China, Auto Boom Fuels Workers' Aspirations !

Ford engineer Johnny Wang says, 'The things that were totally impossible as a child are now within reach.' Tim Franco for The Wall Street Journal

Ford, GM and Foreign Car Makers Find it Harder to Attract and Retain Skilled Chinese.

NANJING, China� Johnny Wang grew up in a small town in the poor Anhui province in rural, eastern China, where even riding in a car, let alone owning one was a dream. Landing a job in China's booming auto industry changed all that.

Mr. Wang, 32, is a voice recognition engineer at Ford Motor Co. F -1.23% 's research and engineering lab in neighboring Nanjing. His wife, Xiang Jun, 32, works for Automobile Co. some 56 miles away in Wuhu, where the couple owns an apartment. Mr. Wang rents an apartment nearer to his workplace and drives to the couple's home in his Ford Focus at the weekend. Later this year they plan to take Mr. Wang's parents to Southeast Asia on their first overseas trip.

"All the things that were totally impossible as a child are now within reach," said Mr. Wang.

A century ago, when Henry Ford began paying his assembly-line workers $5 a day, the equivalent of $116 a day today and double the manufacturing norms of the time, he triggered a social revolution in America that transformed low-paid workers into middle-class consumers. Much the same has happened in China.

The explosive growth of China's auto industry during the past 20 years has helped to lift tens of thousands of Chinese like Mr. Wang into the middle class. Though below that of other major car-producing nations such as Germany, Japan and South Korea, wages for factory workers and engineers in China's auto sector are typically higher than average here.

Research by consultancy Mercer LLC, for example, shows wages for automotive engineers and factory workers in Shanghai in 2013 were between 15% and 17.6% higher than the average manufacturing wage in the area.

But now auto makers are confronting in China what U.S. auto makers discovered decades ago: Workers' aspirations rise with their pay. China is no longer a low-wage workshop for auto companies. It is increasingly a center for engineering, and research and development initiatives.

Foreign car companies are finding it increasingly difficult to attract and keep engineering talent, as more Chinese car companies offer better pay packages and at times broader professional experience. At the same time, all auto makers face competition for skilled Chinese workers from certain other industries where the pay and professional prospects are better.

Ford declined to reveal salary figures for its research and development engineers, but Chinese engineers with experience at foreign car firms command top pay in China.

Engineers with under 10 years' experience in research and development for foreign auto makers in China earn between 180,000 yuan ($29,200) and 300,000 yuan a year including bonuses, according to recruitment consultancy Robert WaltersRWA.LN -0.87% PLC.

Chinese auto companies usually offer around 30% more in salary to attract top talent from foreign brands, the consultancy said�more when employees are asked to relocate cross-country to newly emerging industry centers such as Wuhan, Changsha and Chongqing.

Vanessa Moriel, managing director of Human Capital Partners, a recruitment firm specializing in the auto industry, said engineers with specialized knowledge or leadership skills could earn as much as 500,000 yuan.

Chinese auto engineers typically want to fast track their careers and seek opportunities that allow them to expand their skills into high-tech, specialist areas, she said. Companies must pay market price salaries, she said, and interpersonal relations are key. "Chinese don't work for a company, they work for a leader," Ms. Moriel said.

Ford's Mr. Wang is content with his career advancement and has no plans to switch to another car company, Chinese or otherwise. "I have a long way to go in my career�and right now, I think I have a lot to learn at Ford," he said.

He also said he plans to stick with the auto industry. "I do desire an overseas experience to expand my horizons," said Mr. Wang. As to where that might be? "My first choice would be America�it's a country on wheels."

Keeping ambitious employees like Mr. Wang satisfied could still require some changes. He and colleague, Shawn Ma, aspire to greater roles in auto industry R&D.

Mr. Ma, a 27-year-old engine component engineer, said his team mostly modifies existing Ford technology to fit Chinese market requirements. But he is hopeful that will change in the next five to 10 years and allow the group to design new parts that will be used globally.

"They are starting to take some leads on global products but we haven't announced anything yet," said Scott Chang, a spokesman for Ford in China.

John Lawler, chief executive of Ford Motor China, recently described the expansion of the center in Nanjing as one of Ford's "top global product-development priorities." The company has invested more than $200 million there and plans to invest another $100 million. Ford would increase the number of employees at the Nanjing complex to around 2,000 people by 2018 from roughly 1,300 today. When the company moved into the current facility in 2007, the center had around 300 employees.

To maintain and grow their engineering workforces in China, foreign auto companies are finding themselves battling for talent with Chinese auto makers.

"Five years ago, a lot of Chinese wanted to work for multinationals, now that pendulum has swung," said Mary Thornton, formerly human resources director China for General Motors Co. GM -1.87% until the end of April. The attrition rate at GM in China is around 12% a year, she said. Some other companies in the industry have rates of around 20%, according to Human Capital Partners.

If Chinese car makers evolve into national or even international champions, more Chinese engineers working for foreign companies may switch allegiance to homegrown companies.

"The auto industry is almost 100 years old, but I think for China we're just at the start," says Mr. Ma. "At this time we're working for a foreign company. But in the future, more and more Chinese people are going to work in the industry and contribute to our own China automobile" industry.

Ms. Moriel said that trend could become more pronounced as ambitious Chinese employees realize that top jobs at foreign auto makers still go to foreigners. At Chinese companies, Chinese engineers have more chances to perform management roles beyond R&D and, she said, stand a greater chance of becoming chief executives one day.

Still, the auto industry remains a popular choice among engineering graduates. In a recent survey employer branding consultancy Universum Group AB said the car industry overtook heavy industry as the "most ideal" sector to work upon graduation for Chinese engineering students, something the consultancy said could be due to students' perception of the industry as creative and dynamic.

But when Universum looked at specific companies, auto makers in China trailed leading technology companies such as Huawei Technologies Co. and Google Inc.GOOGL -0.82% Only one, BMW AG BMW.XE -1.27% , appeared on the top 10, and GM's Shanghai GM joint venture ranked 20th.

ref: online.wsj.com

Car Sales passed 9.6 Million in the First Half of 2014 !

Car makers in China delivered 1,560,311 units in June and 9,629,246 in the first half of 2014, according to CPCA (China Passenger Car Association). Compared with the same period a year ago, deliveries rose 11.8% and 11.4% respectively. Excluding exports, sales increased 14% to 1,465,735 in June and 11.4% to 9,094,452 in H1. The numbers cover only domestically produced sedans (two- or three-box), MPVs, microvans, and SUVs. Imports and commercial vehicles are not included.

In the past, significantly more consumers chose to buy a new vehicle in the second half of the year than in the first. If the pattern holds, the 2014 passenger market is to exceed 20 million, a record level in history. ref: chinaautoweb.com

Sector	Wholesales in June	Growth on year	Wholesales in H1 2014	Growth on year
Sedan (two- or three-box)	1,005,651	7.0%	6,210,741	6.7%
SUV	319,055	32.3%	1,810,074	35.9%
MPV	123,099	39.3%	862,460	47.3%
Microvan	112,506	-10.4%	745,971	-17.4%
Total	1,560,311	11.8%	9,629,246	11.4%

The growth of Chinese Automobile industry, creates new bridge to the US for EV market.

Chinese automotive companies have long aspired to build vehicles for the U.S. electric vehicle (EV) market, without much progress. However, recent developments indicate that Made in China could be stamped on cars stateside before long.

Chinese automakers, have all made investments in establishing or partnering with U.S. entities with the goal of opening China�s formidable manufacturing resources to America. Geely, which has been the slowest among the three to approach the U.S. market, purchased Emerald Technologies in February. The company, a startup developing electric vans and taxis, has offices in the United Kingdom and Missouri. It will receive up to $200 million during the next 5 years to grow its business.

China is no stranger to EVs, having launched a successful EV carsharing joint venture with Kandi Technologies Group. The Emerald acquisition gives the company access to new technology outside of the consumer passenger vehicle market, which is a common strategy for Chinese companies that do not want to take on Detroit, Japan, and South Korea head on in the United States � yet. If Chinese-built taxis, vans, and trucks can pass all of the required safety tests and prove their reliability in the coming years, then American consumers might become more comfortable in considering them. Chinese Automaker purchased Volvo in 2010 and has been expanding globally during the past few years, including setting up shop in several countries in Eastern Europe and Latin America.

BYD was the first Chinese automaker to target the U.S. market and had announced its intention to sell EVs when it established a presence in California back in 2010, but the company has yet to deliver passenger vehicles. The latest target date for EVs in the United States from Warren Buffett-backed BYD is late 2015. Until then, the company is focused on selling electric buses using its battery packs in China, California, Canada, and Spain.

Wanxiang has been the biggest spender from China on U.S. EV assets: the company picked up the bankrupt pieces of battery maker A123 Systems and of Fisker Automotive for pennies on the dollar. Wanxiang recently said it would resume production of the aborted Fisker Karma (perhaps both as a gas car and plug-in electric vehicle) by the end of 2015, as well as complete the development of the Atlantic, the second EV promised by defunct Fisker. It would not be surprising to see more acquisitions of EV-related technology firms from Wanxiang in the United States in the future.

The U.S. EV market has taken 3 years to grow to just under 100,000 vehicles, but according to Navigant Research�s Electric Vehicle Market Forecast report, over the next 3 years it will more than double � reaching volumes that merit Chinese firms establishing North American assembly and manufacturing plants. Chinese companies will continue to learn more about optimizing EV production at home once a domestic market begins to mature in China, and this will lead to greater efforts to tighten the bond between the two countries� EV industries. ref: www.forbes.com

The World's Automakers and Brasil challenges !

Here�s what the world looks like to a car guy in Detroit right now: In the U.S. new regulations are cranking up costs while cautious car buyers creep back into showrooms. China�s once-hot sales are cooling�fast. Europe is a total basket case, with too much production capacity and an allout price war. Carmakers from General Motors and Ford Motor to Volkswagen and Daimler warn of difficult times ahead. Market conditions, says VW Chief Executive Martin Winterkorn, have become �noticeably harder and tougher.�

But bring up Brazil and you get a smile. No, they�re not looking forward to a Rio vacation or a cheap retirement. What carmakers see when they look at Brazil is South America�s largest consumer market, a still-bustling economy�and a lot of potential customers. Forget that in the world�s fifth-largest country only 14% of the roads are paved. Incomes are rising, lifting almost 40 million more Brazilians into the middle class since 2003�and putting a vehicle purchase within their reach for the first time. �Brazil is at a critical point right now,� said Guido Vildozo, a Latin America specialist at market research firm IHS Automotive, noting that the country�s GDP has topped $10,000 per capita. �That�s a milestone. If you look back at the U.S., Europe, even Korea, you�ll see that this is when markets move to a growth stage. This is why we�re suddenly seeing all the carmakers focusing on Brazil. They want to try to capture a slice of that pie.�

Anfavea, Brazil�s auto industry trade group, forecasts sales will increase 68% from 3.4 million units in 2011 to 5.7 million by 2016, despite a massive tax burden and high borrowing costs that drive up car prices. (In the U.S. sales are forecast to rise 30%.) As early as 2015 Brazil could overtake Japan to become the world�s third-largest car market after China and the U.S., according to Roland Berger Strategy Consultants.

Volkswagen, Fiat, GM and Ford have dominated Brazil for years, with 84% of the market in 2007. But that number is dropping as new players rush in. By 2015 it�s expected to fall to 70%, according to market researcher J.D. Power and Associates. Pressure is coming from global rivals like Kia, Hyundai, Honda, Nissan and BMW, as well as new players like China�s Chery, Geely, JAC and Hafei, and India�s Tata and Mahindra.

Competition is only one problem for Detroit�s Brazilian operations. The government is another. Spooked by the flood of foreign-built cars, President Dilma Rousseff, a onetime Marxist and late convert to capitalism, grabbed for a comfortable crutch earlier this year: tariffs. She raised the tax on imported cars from 25% to 55%. Brazilian shoppers eyeing popular models like a Toyota Corolla, which sells for $16,230 in the U.S., were shocked by sticker prices of $29,000.

Because Mexico was exempt under a regional trade agreement, carmakers figured they could just ship more vehicles from their Mexican factories. That didn�t set right with Rousseff, who slapped a quota on Mexican imports. Carmakers can pay less tax on imports if they do more engineering work in Brazil and use mostly Brazil-made auto parts in their local factories. �Brazilian consumption has been appropriated by imports,� Finance Minister Guido Mantega said in announcing the tax. �We are the fifth-largest automobile market in the world and the seventh-largest producer, but we risk losing our position if we don�t take measures.�

Luckily, all the policy wrangling to bolster Brazil�s industry was trumped by headwinds from the worldwide economic crisis. In May Rousseff�s government enacted tax cuts and lower interest rates to spur consumer spending. The economy bounced back, as did car sales. The stimulus measures have been extended through October, prompting predictions of a second-half boom.

Manufacturers have learned their lesson, though. GM, Ford, VW, Fiat, Toyota, Hyundai, Nissan, Honda, Renault, Peugeot and Chery are among the companies adding or expanding factories at breakneck speed, with plans to invest some $25 billion in Brazil by 2016, adding 1.5 million units a year of production capacity. That doesn�t include investments by auto parts suppliers.

For GM and Ford the ramp-up is especially tough. They tolerated high labor costs and low manufacturing productivity for years in South America, while they focused on growth markets like Asia, which had more immediate potential. While auto industry wages in Brazil have risen 125% in ten years, productivity has increased only 22% due to a lack of automation, poor training and high energy and steel costs.

Both GM and Ford reported lower operating results in the region thus far in 2012. While currency and global economic issues are partly to blame, they�ve also been hurt by outdated product lineups. Both companies are revamping their cars to keep consumers interested�and margins profitable.

GM, for example, is launching seven new products this year in Brazil, including the Chevrolet Spin sport-utility and Colorado pickup. Ford, meanwhile, is rolling out a new small SUV, the EcoSport, along with a redesigned Ranger pickup and the next-generation Ford Fusion. �By 2015 we will have all global platforms in Brazil,� said Rogelio Golfarb, a vice president at Ford South America. �We are caught right in the middle of the transition.� With so much competition, mostly in smaller vehicles, he said, �it forces you to be real efficient. That�s the challenge of Brazil.�

But not the only one. The government�s shifting policies have also made it hard for automakers to make long-term decisions.

�The government has thrown a few curveballs over the last six months or so,� says Robert Shanks, Ford�s chief financial officer, who says the company set up its manufacturing footprint in Mexico and Argentina to take advantage of free trade agreements between Brazil and those countries. Now it has to start over. �That�s not something we can respond to overnight.� Given the global auto market these days, they�ll have no choice but to try.
ref: www.forbes.com

How is Mexico passing Brazil, as the top Latin American Car producer ?

Mexico is poised to overtake Brazil as the top Latin American automobile producer for the first time in more than a decade as surging exports to the U.S. spur factory openings and record output.

After nosing ahead of Brazil in the first six months of the year, Mexico is projected to hold its advantage through 2014, for the first full-year lead since 2002, according to consultant IHS Automotive.

Mexico�s ascent is being fueled in part by auto sales running at the fastest pace in almost eight years in the U.S., the country�s largest market. The boom coincides with a slump in Brazilian production through June as domestic demand cools, setting up a shift in leadership of the Latin American industry faster than analysts predicted.

�The wind is in our sails� in Mexico, said Luis Lozano, lead automotive partner at PricewaterhouseCoopers LLP, in a telephone interview from Mexico City. �People talk about the energy and telecom industries in Mexico, but the auto industry is going to continue as the icon of this country.�

Eclipsing Brazil, where output has fallen 17 percent this year, would vault Mexico to No. 7 among the world�s largest auto producers. China and the U.S. lead the global pack.

Brazil reported today that light-vehicle output fell 32 percent in June from a year earlier to 205,207 with exports plunging 52 percent. Mexico reported today auto production rose 7.9 percent in June from a year earlier to 287,344. Exports rose 2.1 percent.

This year�s diverging fortunes of Mexican and Brazilian auto production reflect the state of their biggest markets. Brazil-made cars and trucks are too expensive, given high labor costs and taxes, to send abroad and go mostly to local buyers. Mexican factories export eight of every 10 cars they produce -- with more than half going to the U.S.

Economic Divergence
The auto industry epitomizes the underlying economic fundamentals in the two countries. Mexico is starting to see signs of rebounding after growth missed forecasts in seven of the past eight quarters, while Brazil cut gross domestic product estimates for this year and next and boosted inflation forecasts. Economists project that the Mexican economy will grow 2.8 percent this year compared with 1.3 percent in Brazil.

Light vehicle output in Mexico rose 7.4 percent through June to 1.6 million vehicles, bolstered by new plants for Nissan Motor Co. (7201), Honda Motor Co. (7267) and Mazda Motor Corp. (7261), according to the Mexican Automobile Industry Association, known as AMIA. Brazil�s total was 1.47 million, according to Anfavea, Brazil�s automaker association.

Mexico�s proximity to the U.S. also gives it an advantage, as do labor costs for automakers that are about 20 percent of U.S. levels, according to Pricewaterhouse Coopers.

�The broader significance is the appeal of Mexico as the production source for North America,� Bill Rinna, senior manager of North American forecasts at LMC Automotive, said in a telephone interview from Troy, Michigan. LMC forecasts Mexico to overtake Brazil in 2016.

Surprise Win
While Mexico�s exports to the U.S. rose 16 percent through June, Brazil�s shipments to its top trading partner, Argentina, declined 28 percent through May according to Anfavea. Within Brazil, consumers have slowed purchases because of tighter credit and a weakening economy.

Mexico�s surge caught some industry watchers by surprise.

�At the beginning of this year, we basically did not have Mexico overtaking Brazil at any point in time,� Guido Vildozo, Latin America analyst at IHS Automotive, said in a telephone interview from Lexington, Massachusetts.

Even as exports are buoying Mexico�s auto industry, the low level of domestic sales is a weak spot, according to AMIA President Eduardo Solis. New car sales in Mexico totaled 1.06 million last year. Mexico should restrict used-car imports from the U.S. more stringently, he said.

�We have record production and exports and a domestic market that just isn�t turning the corner,� Solis told reporters June 10 in Mexico City.

Diplomatic Confrontation
Mexico is likely to produce 3.1 million autos this year, according to Solis, who said he was unsure whether the nation would build more than Brazil. IHS is forecasting Mexican output of almost 3.2 million, ahead of Brazil�s 3.17 million.

Mexico�s auto-production gains combined with Brazil�s losses may lead to a diplomatic confrontation this year between Latin America�s two biggest economies, according to Augusto Amorim, IHS Automotive�s analyst for South America.

In 2012, Mexico agreed to limit car exports to Brazil for three years after a surge in Mexican shipments to Latin America�s largest economy. That led to a 23 percent drop in Mexican-made vehicles exported to Brazil last year, according to AMIA.

While the pact is set to expire in March 2015, Brazil may look for ways to extend it, Amorim said. AMIA will probably meet with Anfavea and a similar trade group from Argentina this summer, Solis said.

Production Chain
�We are still in negotiations for both countries to have successful results,� Brazil�s ministry of development, industry and external commerce said in an e-mailed response.

�The commitment is to get back in 2015 to a free market,� Mexico Economy Minister Ildefonso Guajardo told reporters July 3 in Mexico City.

Automakers� investments show the importance of both countries in the global production chain.
After the recent Mexico plant openings by the Nissan-Honda-Mazda trio from Japan, a combined investment valued at $4 billion, Germany�s Audi AG is building a $1.3 billion plant to assemble the luxury Q5 sport-utility vehicle.

Bayerische Motoren Werke AG announced plans last week to invest about $1 billion in a new factory in Mexico, that will produce about 150,000 cars a year. And in June, Daimler AG and Nissan said they would jointly produce luxury vehicles, including Infiniti compact cars, at a new $1.4 billion factory in Mexico, the biggest project to date in their four-year-old partnership.

Big Volumes
�Whatever is made there can be exported,� to any of the more than 40 countries, including the U.S., that have free trade agreements with Mexico, IHS Automotive�s Amorim said. �When you have Mexico adding a new factory to source the entire world, then you�re talking about big volumes.�

In Brazil, Nissan opened a $1.5 billion complex in Resende in April, and Chery Automobile Co. has a $530 million factory in Sao Paulo state debuting this year, marking the Chinese automaker�s first major investment outside its home country.

New factories being considered for both countries in the coming years may mean neck-and-neck racing for the lead in Latin American production, according to IHS Automotive and LMC Automotive.

Rinna, the LMC Automotive analyst, predicts that Mexico will hold the top spot from 2016 until 2021, when Brazil wrests it back. By then, the combined auto output of the two nations would be 8.83 million vehicles, 38 percent higher than in 2013.

ref: www.bloomberg.com

While Electric Car Owners, are asleep - Tesla

Frankfurt Auto Show
http://www.teslamotors.com/ 

Electric vehicles are entering the mainstream, with the sporty Tesla having sold 30,000 vehicles so far, and recent moves designed to greatly expand the use of innovative battery technology.

However, as more of these cars hit the road, they place unique strains on the electric grid.

Households with electric vehicles guzzle juice from the grid at night in order to get charged up for the next day, according to a new analysis by Opower, a company that provides cloud-based software to the utility industry. And that could be a problem in the long run.

As electric vehicles go mainstream, utilities may need to continue nudging consumers away from plugging in during peak periods of energy demand, the analysis suggests.

The numbers also show that electric vehicle owners are far more likely to have rooftop solar panels than non-electric vehicle owners, which helps offset some of their electrical consumption from coal and natural gas-fired power sources.

Image : Opower

At night, the average power consumption of many electric car households is four times higher than typical levels, Opower reports. The company maintains a database of energy use in more than 50 million households, and is in part a consulting firm to electric utilities, working to help them become more energy efficient.

The company's analysis compared data from about 2,000 electric vehicle owners in the western U.S. who charge their cars at night, to data from nearly 100,000 typical households in the West. The data includes electric vehicles other than Teslas, such as the Nissan Leaf and other plug-ins.

Opower plotted the average hourly grid electricity use of electric vehicle owners compared to typical households with gasoline-powered vehicles. Between midnight and 7 a.m., electric car households used three times as much energy than non-electric vehicle owners did. Researchers found a major spike in energy use from electric vehicle households starting at about 10 p.m., peaking around midnight, and then declining toward 6 a.m.

It's no coincidence that the electric vehicle owners in this study tended to charge their cars at night, since their owners signed up with their utilities to secure discounted electric rates late at night, with higher prices during the day. Opower says its data clearly shows that when consumers sign up for such electricity rate frameworks, they take advantage of them, and this data could encourage utilities to roll out more programs like this.

Such arrangements are advantageous for utilities because they help reduce the electricity demand during the day, when overall demand is highest and the risk of overloading the grid is elevated.

                                                                                                  Image : Opower

Several states have implemented off-peak charging incentives to encourage electric vehicle owners to charge their cars at night, including Texas and Georgia, in addition to the more environmentally conscious California.

Interestingly, Opower found that electric car owners still use more power than their peers during the day. The company explained this by noting that compared to the average household, owners of electric cars tend to be more affluent, with larger houses and more swimming pools than households without such cars. Also, some owners may be plugging their cars in early in the morning or earlier in the evening, missing the low-cost window.

On the other hand, electric vehicle households are also far more likely than typical households to own rooftop solar panels, which cuts their midday energy use and sends power to the grid. In the West, one out of 13 electric vehicle households have rooftop solar installations, compared to just one out of 86 typical households.

If you are an electric vehicle owner without rooftop solar energy, however, it's still likely that you're using more grid electricity than a typical household.
ref: http://mashable.com by Andrew Freedman

Auto Brilliance and BMW !

A specialized group of domesticChinese auto manufacturers are seeing an increase in their ranks as the local auto markets continue to grow and change with the times. Not only is China at the forefront of research and development regarding clean energy and fuel efficient technology, but they are also becoming an increasingly large influence upon the international automobile industry as well.

                Many international car manufacturing companies conduct business in China; among them are BMW, General Motors, Toyota, Nissan, and Honda for starters. The Chinese government requires any international car company that wants to do business in the country to market its cars under different brand names and in cooperation with domestic Chinese car companies, usually in the form of a partnership or a joint venture agreement.

                This policy was instituted in part to grow the international sharing of technology information regarding the cars between the international companies seeking to do business in China and the domestic Chinese car manufacturers who can trade their expertise for much needed outside knowledge. These joint venture partnerships between domestic and international car manufacturers insure the growth of domestic car companies like Amsia Motors in addition to taking advantage of the foreign business investments international companies continue to pump into the Chinese auto industry.

                BMWhas formed a joint venture with the Auto Brilliance Group which also has a partnership with Amsia Motors, a successful Chinese auto manufacturer. Together BMW and Brilliance Automotive have announced the creation of theZinoro brand, an electric car that meets the clean energy requirements of the Chinese government while still being a decent competitor to similar car models from other international companies like Toyota.

                The Zinoro brand will build its cars at the Tiexi plant in the northeastern city of Shenyang, China, under the auspices of the BMW Brilliance Automotive Corporation. Zinoro (which means �honoring promises�) will join the likes of the BMW 3 series, 5 series, and X1 that are also manufactured at the Tiexi plant. The Zinoro model is estimated to go on sale in the first few months of 2014.

                The Zinoro electric car will join other joint venture models and compete with the variety of car models coming from Toyota, GM, Honda and Nissan. BMW has mentioned their high hopes for the Zinoro as well as their other existing models, citing a 5% yearly sale average this year and remaining close behind Audi as China�s leading foreign automobile manufacturer in terms of sales. BMW has seen a 7.5% increase in the first 3 months of this year in sales alone and estimates a continued level of growth after the first few months of the sale of the Zinoro.

                The BMW joint venture with the Brilliance Auto Group and Amsia Motors is doing better than the Mercedes-Benzline, which has declined in sales nearly 12% this year already. Domestic car companies like Amsia Motors will continue to benefit from joint venture partnerships like the one BMW has maintained with the Brilliance Auto Group.

Bentley goes GREEN ?

Bentley joins the go-green effort by introducing its first powertrain choice to the luxury automotive sector.

The British luxury car manufacturer announced the launch an all-new SUV version equipped with its hybrid concept will be available in the market starting 2017.

�There is no doubt that plug-in hybrid technology is true to Bentley�s values of outstanding luxury and effortless performance. Combining our renowned engines with electric power reinforces and enhances both principles, and so we will gradually introduce this powertrain across our model range. By the end of the decade, at least 90% of our production will be available as a plug-in hybrid. We are proud to be pioneering these developments in the luxury sector,� said Dr Wolfgang Schreiber, Chairman and Chief Executive of Bentley Motors.

The Hybrid Concept is based on the flagship model in the Bentley family, the Mulsanne.

Copper will be used as an exterior and interior styling element to highlight the car�s electrical veins, including copper details to the headlamps, radiator shell bezel, brake calipers, feature line details and badges.

Bentley boasts that the plug-in hybrid system will offer a power increase of up to 25% together with a 70% reduction in CO2 emissions and will also be capable of driving at least 50 km on electric power alone.

ref: http://www.arabianbusiness.com/

BMW and their Chinese investment Partners, gains 52% profit.

BMW�s Chinese investments are paying off in their domestic partnership with local Chinese auto manufacturers as profits, stocks and sales continue to grow. Profits from BMW�s partner, the Brilliance Automotive Group, experienced a 52% increase in demand for their new and past models in China this year alone. Experts estimate that the demand for new cars as well as past models will continue to grow as China remains the world�s largest market for automobiles.

                The Brilliance China Automotive Holdings Ltd. Had a net income increase of $332 million dollars, or 2.03 billion yuan, up from the previously reported 1.33 billion yuan. The Hong Kong stock exchange has been the meeting point for industry leaders eagerly awaiting news of the successes of foreign and domestic Chinese automotive market happenings.

                 BMW looks to be poised to make China its biggest buyer of its automobiles, most predominantly the latest 5-series sedan which has been met with much industry and consumer excitement in China. Other BMW car series are popular amongst Chinese drivers, too.

                Although BMW and its partners in China are currently not at the top of the Chinese industry- that accomplishment goes to Audi- they have experienced greater growth year on year according to recent records. This increasingly high level of revenue and growth has BMW and Brilliance China Automotive Holdings Ltd. in good position to take the lead from Audi in the Chinese market, also allowing the Chinese auto market to become a bigger arena for sales than the United States.

                The joint venture partnership between BMW and Brilliance China Automotive Holdings Ltd. has seen continued success in the Chinese market with existing BMW models like the 3 and 5-series. Their new electric car model (called the Zinoro) will be debuted and sold by the end of 2014 and the hype around this new vehicle has continued to increase both abroad and in China. BMW has high hopes for the success of the Zinoro in the Chinese market as it fits perfectly within the new environmental laws that the Chinese government has put in place to increase fuel efficiency in new vehicles to decrease the pollution problem.

                The Brilliance Automotive Group in partnership with BMW is planning to expand their production facilities as well in order to keep up with the demand the Chinese market has for their cars. The demand for cars went up 31% in 2013 and has increased in the first few months of 2014 making this move smart and economical for the company. Their existing production facilities will be used to build the much anticipated hybrid model of the 5-series sedan, which will theoretically hit the market sometime in the year 2015.

                Domestic Chinese production of BMW cars will also be expanded to include a greater variety of models that will be available in China in coming years; in cooperation with BMW and the Brilliance Automotive Group the models will be available at an increasing number of dealerships around the country.

                The world is ready and waiting to see where BMW will succeed next.

18% Automotive sales jump in February 2014 !

Chinese car sales have jumped by 18% in the month of February, which has prompted an increase in hope for the Chinese auto industry. Global auto market analysts underestimated the amount of passenger car sales that China made last month and have continued to adjust their speculation for the remainder of the year in light of the market�s strength so far this year.

                Both the Toyota Motor Corporation and the Ford Motor Company saw wholesale deliveries of passenger vehicles increase in the Chinese market this year. 1.31 million units were delivered in the month of February alone; expert automobile industry analysts had estimated that the Chinese auto industry would need approximately 1.27 million units in February. The China Association of Automobile Manufacturers reports show not only an increased amount of cars being sold in China, but that a growing amount of foreign and domestic investments in the Chinese auto industry is serving to strengthen the domestic market all the more.

                In China the sale of every vehicle, from buses to trucks to sports utility vehicles and sedans, showed a marked improvement over recent years. Total vehicle sales were reported as being 18% higher than previous months with a total of 1.6 million units that were ultimately purchased by consumers. In January and February of 2014 alone the Chinese auto market saw an increase in vehicle deliveries jump 11% with a final delivery count of 3.75 million units.

                International brands like Toyota and Ford have continued to perform well in the Chinese auto market and familiar Japanese brands like Hondaand Nissanare also seeing resurgence in interest after a slight geopolitical dispute markedly slowed down auto deliveries from Japan; depressed sales of Japanese cars in China were another side effect. Toyota�s car sales increased by 43% and Honda saw a leap of 28% as well. Ford saw the biggest percentage increase in sales coming in at 67% with 73,040 units being shipped to China in February. General Motors reported an increase of 20% with its leading cars being the Wuling and Cadillac.

                China�s domestic car brands made up 38.4% of total sales in the month of February, reported the China Association of Automobile Manufacturers. In part because of the pollution problem that plagues China�s major cities, domestic and international investments have been funneled into research and development of domestic clean energy and fuel efficient cars. This market for cleaner technology in China�s automobiles is certain to continue growing in the coming years.

                The continued support of international investors and brands has obviously boosted the Chinese auto market; its domestic brands, while still relatively small, are also beginning to see more international recognition and market interest as well. The growth of domestic Chinese car brands like Amsia Motors to international markets is expected as new models and products are unveiled.

                The international investments and domestic Chinese auto growth spell out a bright future for China�s automobile market to continue increasing sales and profits. Here are a few sneak peeks of what they have in store!

China Association of Automobile Manufacturers & Foreign investors.

Amsia Motors, RANGER Long distance Bus.

The domestic Chinese auto market has seen an increase in foreign investors to the extent that they now make up the majority of the Chinese auto market for the first time in a long while. While China is dominating the markets in technology and other industries their domestic auto market has not seen as big of advances as they would have hoped going up against bigger and more prepared foreign automobile manufacturers.

                The China Association of Automobile Manufacturers (CAAM) does mention in their annual report of the state of the Chinese automobile market that domestic Chinese car manufacturers did see an increase in domestic car sales up 7.5% from November of 2012 and up 5.5% from October of 2013. While the domestic auto manufacturers market is not growing as quickly as the foreign car market is there is still growth being seen in the domestic sector, bringing continued hope to domestic car manufacturers.

                In 2013 domestic Chinese automobile sales increased 11.5% while maintaining a 40% market share in the domestic Chinese automobile market. The Chinese government is attempting to create a series of incentives and subsidies to encourage the sale of domestic Chinese cars to the population while also instituting technology transfers between domestic car companies to level the playing field and create a stronger domestic manufacturing environment to better forge ahead in the years to come.

                Although these measures are being taken to increase the domestic market share of local Chinese car companies China is also searching for ways to profit off of the ever-booming foreign car market. The state may decrease its high tariffs on foreign cars and ease some of the restrictions on foreign automobile companies that do business in China, making it easier and more profitable for foreign car companies to do business in China.

Amsia Motors, KOMI Smart Cart, 2014 new model.

Despite the pressure on the domestic Chinese car market to keep up with production and sales foreign car manufacturing companies are still investing more into the Chinese market than the domestic companies themselves are willing or able to. In addition to investing foreign car manufacturing companies have the advantage of putting out new models of cars at a quicker rate than the domestic Chinese car companies are able to. Consumers who like variety, therefore, are more drawn to purchase a different kind of car than the average Chines domestic model that is available.

Exports of Chinese cars to foreign markets are down this year although car manufacturers hope they will increase as the year continues. As the domestic market is hit by more Chinese car regulations the export market is essential to the Chinese automobile manufacturing industry. Some cities in China have continued to regulate the sales of cars, when they can be driven, and what kind of cars can be bought due to the increasing amount of pollution affecting major cities in China. This puts a damper on the exuberant nature of the Chinese automobile consumer.
The 2014 automobile year looks as though it will bring some beneficial changes to the domestic Chinese automobile market.