Episode 482 – China And Japan Go At It, Ford Reveals New Ranger, Industry Faces Rubber Shortage

September 21st, 2010 at 11:48am

Runtime 7:13

China and Japan are at each other’s throats again, this time over allegations that Toyota bribed dealers in China to steer customers toward their in-house financing arm.  Ford revealed a teaser shot of its redesigned global Ranger pickup.  The tire industry — and by extension, the auto industry — is facing a rubber shortage as droughts then heavy rains hamper production in Asia.  All that and more, plus John shares a few of his thoughts on the design of the 2011 Jaguar XJ.

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This is Autoline Daily for September 21, 2010. And now, the news.

And the news coming out of China is disturbing. The Associated Press reports that Chinese authorities have fined Toyota’s finance unit in the country for allegedly bribing car dealers to steer customers to finance their cars through Toyota. Toyota says they were not bribing dealers. They offered dealers rebates to steer business their way. China and Japan are currently involved in a territorial dispute with Japan holding a Chinese fishing boat that sailed into waters claimed by both Japan and China. And the two countries have been arguing over how Japanese companies are being treated in China. It sure sounds like this alleged bribery case is part of the greater dispute.

Even more disturbing is a story we’ve been following closely here at Autoline Daily, of China’s upcoming policy that could force foreign automakers to hand over their electric car technology to Chinese automakers, if they want to sell EVs in the country. In fact, Nissan looks like it’s already caving in to China’s demand, saying it’s in talks with its partner, Dongfeng, to share some of its leading EV technology. This is a bad move when we see a government formulate a policy that would force foreigners to hand over their intellectual property. It’s even bad for the Chinese automakers. First, it makes them look like they can’t compete on their own – like they have to hide behind their government. And second, by relying on foreign automakers for technology, they won’t come up with new technology of their own. These rules are not yet finalized, and let’s hope a saner policy emerges before they’re put in place.

Now to the small-truck segment. Ford will unveil the latest version of its global Ranger pickup at the Sidney Motor Show in Australia next month.  All it’s showing right now is a teaser shot with this three-bar grille.  With this redesign, the truck grows a little bit and offers more powerful engines.  It will be sold in 180 markets around the world, but guess what?  Not in North America.  Ford is saying “NO GLOBAL RANGER FOR YOU!”  Apparently it’s too close in size to the F-150.  The U.S. version of the Ranger is so old paleontologists have found frames and other parts mixed-in with dinosaur bones.  It goes out of production next year.

You can’t make cars without raw materials and according to Bloomberg, tiremakers are facing a shortage of natural rubber.  A drought early in the year followed by heavy rains has hampered tree-tapping efforts across Asia.  Experts say that demand will outstrip supply for at least the next two years, and that means tire makers will be forced to raise prices.

STEEL PRICES RISE (subscription required)
And speaking of raw material prices going up, so is steel. According to the Wall Street Journal, the price for certain types of steel has risen recently, anywhere from 1 percent to 12 percent depending on the type and where it is sold. Cutbacks in steel production in China ranging anywhere from 3 percent to 5 percent are causing prices to go up. China produces nearly half of the world’s steel.

And you can’t run a car unless you have fuel, so India and Brazil are cooperating on promoting the use of biofuels. According to Ward’s, Brazil’s Minister of Agriculture was recently in India to encourage the country to use ethanol to power vehicles and use sugarcane biogases and residues to generate electricity. The two countries are also considering teaming up to produce biofuels and invest in agriculture. Brazil’s delegation also inspected GM’s biodiesel program in India. The company is studying the possibility of commercial production of jatropha-based biodiesel and has already test-driven vehicles using the biodiesel without any modifications to the engine.

The Jaguar XJ is the newest sedan to come from the company. So what’s the car like? I’ll give you my instant impression, right after this.

The Jaguar XJ is the car that’s supposed to get the brand back on its feet. And initial sales are pretty promising. I recently got a chance to test-drive one, and here are the pros and cons of the car.

So far this year sales of the Jaguar XJ are up by more than 200 percent. Overall, Jaguar sales are up nearly 13 percent, which is much better than the overall market.

We’ve got a great Autoline After Hours coming up on Thursday. Our guest will be Chris Preuss, the head of OnStar. He’s got the task of making OnStar more relevant in today’s world of smart-phones, and other electronic media. Get ready for a great discussion Thursday night at 7:00 p.m. Eastern Time on Autoline After Hours.

And that’s the top news in today’s global automotive industry, thanks for watching, we’ll see you tomorrow.

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22 Comments to “Episode 482 – China And Japan Go At It, Ford Reveals New Ranger, Industry Faces Rubber Shortage”

  1. HtG Says:

    I just drove back from Washington DC, our nation’s seat of power, and here are some of my driving impressions.

    The DC events all occured within one hour on a Saturday morning

    1 woman walks out of alley into the street while car makes fast left into street. Neither is looking. Near collision

    2 I stop at three way intersection. Smart at right STOP sign acknowledges me. Car at left STOP proceeds. Now it’s my turn, but the next car at the left just goes through the intersection without stopping.

    3 Cyclist rolling down center of street does not look at me in Miata, does not move to left. That’s because he’s having a conversation with his buddy riding behind him.

    4 Man crosses street at signaled intersection without looking, a red Civic coming my way wants to go left, blocks my path and just stops. Child driver.

    DC office drones out of their natural habitat. Seriously, they cannot drive ride or walk around here. Auto enthusiasts are in deep trouble.

    1 Coming back to NY on 95 it seems BMW drivers have admitted to themselves that, really they just want to show off their wealth. Nearly all sedans are merely rolling along in either the middle lane or the right lane. Ultimate Geriatric Transporter.

    2 I got caught behind a big Lexus that wouldn’t give way in the left lane. He wasn’t going so fast or even passing anyone. Here is the key; the car had diplomat plates with a chauffeur, so someone big is in the back. But I look in my rear view mirror and see that one of New Jersey’s finest State Troopers is about 200yards back and coming up fast. On the Turnpike radio there is a repeating message not to use the left lane except for passing, since blocking the road is a significant source of accidents. Anyway I move to the right, and just watch the show as the cop car pulls up behind the Lexus. It took about 20 seconds for the Lexus to move to the right, and there were no flashing lights from Officer Bob.(I acted out a bit when I kept my position a little ahead and right of the Lexus, making it harder for it to get out of the way. The cop did glance at me as he drove out ahead.)

    I also watched a Civic sedan come up behind me at about 95-100mph. Man, is that SI a quiet car as it cuts through the air(my top was down). Later another SI came by, and was just as quiet. Slippery cars.

  2. dcars Says:

    It seams like all the companies that saw china as a cash cow are finding out what their are truly dealing with. When I study international business, China showed very little ethics in their business dealings.

  3. pedro fernandez Says:

    This coming decade will go down in history as the decade when China flexed its economic muscle to get its way around the world and if it does not get satisfaction, then there will be the military one. And to think we woke up this monster!!

  4. Mike W Says:

    Tata, the new owners of Jag, are enjoying the benefits of the millions of dollars that the former owners, namely Ford Motor Company, poured into Jaguar over the years. Is the new XJ worth the price? I don’t think so. When Tata finds out how much it takes to stay in high-cost automotive game, they will find their enjoyment is short-lived and the XJ will be yesterday’s news.

  5. G.A.Branigan Says:

    Ohhh Ford,what are we gonna do with you?No more Ranger here in the US is old news as is the “global ranger”.How about the F100?You were going to come out with it,but as the global ranger is too close in size to the 150,so is the F100.I guess that means no more compact/mid size trucks here from you.Okay fine,I can live with that easy enough.So I guess that also means when mahindra finally launchs their clean diesel small pickup trucks and sell the hell out of them,you’ll continue to ignore a potentially big market.Cool huh?

  6. Brett Cammack Says:

    The US version of the Ford Ranger is a great size for current times. I had a 2001 Ranger XLT extracab that I was quite fond of (once I dynamatted the rear wall of the cab).

    Being body-on-frame with fully amortized tooling, they could easily re-engineer the frame one year for more strength, less weight, and more powertrain options, then do a whole new cab the next year.

    I’ll be just as sorry to see the Ranger disappear as I am to see the Panther chassis finally die, but for different reasons. The Ranger is the only choice in the truly compact pickup truck arena and is a completely sorted piece. Ford looked like geniuses for keeping it small when gas prices spiked.

  7. pedro fernandez Says:

    I find it funny when an American car company releases a “global” car and we don’t get it. Are we not part of this globe?

  8. Chuck Grenci Says:

    It is my understanding that car tires are predominantly made from synthetic rubber so why the price increase? Synthetic rubber uses a petroleum derivative,which is still a relatively stable cost (as well as other non latex fillers); so I must be missing something.

    And just when steel should be hanging on to their precipitous hold on auto’s predominant raw material (with challenger just waiting, i.e. aluminum, plastics and carbon fiber) they want to raise prices too; all this when consumers are less able to afford what is already some heady prices for vehicles. Of course, since China is the one cutting supply, perhaps it’s time for the U.S. to increase steel production at home.

  9. dcars Says:

    Couldn’t agree more with increasing US steel production. Do we have any left? With China being almost the sole supplier they can start dreaming up ways to increase prices.

  10. shan Says:

    The current and past Rangers had a ride comparable to a flatbed cabbage truck and horrendous gas mileage for such a vehicle. Quality has also been a issue for decades too.

  11. Salvador G. Says:

    WHAT INTELLECTUAL PROPERTY RIGHTS? … Nissan looks like it’s already caving in to China’s demand,-

    Carlos is such a little Bitch.
    Heck, maybe Japan can claim that all that technology belongs to them.

    I wonder if Ford Motors still view it self as an American company or just see the U.S. as just another market?? or rather how much of an American company, 60%, 40%, 50/50 split??

    This does bring an interesting issue…
    Hey, JohnMc., any way you can find out if someone (by which I mean a company) has look for alternatives for rubber (No Oil), since shorted on rubber could become more and more common in years to come. Or is there an alternative on rubber (No oil base) and we just don’t know about it??

    2011 JAGUAR XJ-
    I love the new Jaguar style, I always felt that among of the British companies Jaguar has been the best, certainly better than Aston Martin…

    And as for the rear black pillar on the new Jaguar, is just noticeable and I think is there because it covers the rear metal pillar frame of the car and makes it look as part of the rear window, which looks really nice.

  12. XA351GT Says:

    Well if we won’t get the new Ranger than send over the Falcon ute . It would fit the small pick up market perfectly.

  13. Alex Kovnat Says:


    Let the price of natural rubber rise to whatever level the market drives it. I’m confident that the ingenuity of those involved, will find substitutes for NR or ways to use less per tire. Let us never forget that there were no long lines for gasoline in the U.S. until the government meddled with natural supply-versus-demand market mechanisms.

  14. Marshy459 Says:

    @pedro – this is how most of the rest of the world feels about how US companies release their products. Try shopping for US based company products outside the US. Watch how companies like Apple delay worldwide deployment. Hollywood has delayed film distribution for decades.

    Re the Jag – that hood gap is embarrassing and the c-post appliqué evokes memories of the ’92 Intrepid – and the clearcoat that will eventually fade and loose…

  15. HtG Says:

    I still like the tailights on the Jag. They look like cat paws and claws swiping at you. They’re the real drama of the rear end IMO.

    But that gap in the hood just makes me laugh. Monday/Friday production unit?

  16. pedro fernandez Says:

    That Tata XJ with the poorly aligned bonnet is understandable, they just wanted to be historically accurate.

  17. Mohammad Rafi Says:

    The 1000s and 1000s of Ford Rangers sold to the Afghan National Police look as big as a Ford F-150. So if ford could produce that pickup for the rest of the world, and the smaller Ranger for the US market, then it shouldn’t be too hard for them to bring out an all-new, more fuel-efficient Ranger (not bigger or heavier, plz) for the US market. That would help them sell trucks when (not IF) gas prices go up again.

  18. Nick Stevens Says:

    Chuck Grenci Says:
    September 21st, 2010 at 2:12 pm

    “It is my understanding that car tires are predominantly made from synthetic rubber so why the price increase? Synthetic rubber uses a petroleum derivative,which is still a relatively stable cost (as well as other non latex fillers); so I must be missing something.”

    You may not be missing anything. Prices do not just go up only when costs go up, they are increased every time the market is willing to pay the higher prices (“what the market can bear”, in econ jargon)

  19. Nick Stevens Says:

    That Tata XJ with Caca fit and finish… whadda you expect under Indian Management?

  20. HyundaiSmoke Says:

    Nick, actually TATA according to an Indian Source is supposedly going to build a $55K Sedan based on the XJ badged as a TATA-Flagship car. They want to sell it in Asia as a lower cost large luxury sedan. They will of course get technical assistance from JLR. This news was out about 3 months ago, but it went under the radar.

    Pedro, that Sleeping Giant was going to wake anyway. 1.3 Billion, Come on. That is surely enough to make waves.

  21. dcars Says:

    The problem with the Ranger is it’s fuel economy and cost. Our roads can more than accommodate the F150 where as in other parts of the world a US made full size pick up is just to big. The price is not that much different either. So what is the sense of selling the Ranger in the US. That size truck turns into a “lifestyle”. Nissan’s Titan, Frontier, Toyota’s Tacoma and Tundra fills that void.

  22. Mouhamad A. Naboulsi Says:

    Jaguar? What Jaguar. This ugly thing may have the badge on it, but nothing else about the car says it is Jaguar.

    The designers need to look back and remember what a Jaguar looks like. Audi, BMW and Mercedes engineers and designers seem to remember that clearly and for more then a half century the cars have evolved but did not change.

    This is No Jaguar.