Episode 539 – China Moves the Metal, Volvo Plans Three New Plants, No Pay Raises At GM

December 13th, 2010 at 11:43am

Runtime 6:44

China’s car exports are up 70% for the year even with a drop in passenger car sales in November. Volvo’s new owner Geely plans on building 3 new plants that could make up to 600,000 Volvo’s a year. GM’s salaried workers will not be receiving a raise next year, despite the fact the company is making boatloads of profits. All that and more, plus a look at the new Lincoln MKZ Hybrid.


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This is Autoline Daily for December 13, 2010. And now, the news.

And we start today in China, where car sales continue to grow, and so do exports. According to Gasgoo, through the first 11 months of the year China’s car exports were up nearly 70% to 480,000 units compared to last year. Even though exports of passenger cars fell in November, commercial vehicles more than made up the slack. Chery is the top exporter followed by Changan and Great Wall.

But not all automakers are doing that well in the booming market. Turns out Suzuki is not only having problems in the American market. Its operations in China are going nowhere. Gasgoo reports that five months after launching the Kizashi in China, the company only sold 50 of them. The company’s attempt to form a joint-venture with Chinese automaker Chang’an failed, it closed its sales office in Shanghai, and it just changed its top management in China.

But while Suzuki is stumbling badly in China, Volvo and its new owner Geely, have agreed to build three plants that could make 600,000 Volvo’s a year there. However, it sounds like these plans will move slowly. Volvo’s management is afraid of moving too fast, since the company is still losing money. The first move reportedly will be to take over an existing Geely plant that makes the Gleagle GX718 in Chengdu, and convert it to make the Volvo S60.

Now to the world of motor racing. Group Lotus PLC is buying into the Renault Formula One team. The team will be renamed Lotus-Renault GP and will be racing next year. But here’s where it gets confusing. There already is a Team Lotus in Formula One. Yet the two are not connected to each other.

Meanwhile, back in the ‘States, GM’s salaried workers won’t be getting any pay raises next year despite the fact the company is making boatloads of profits. According to the Detroit News, GM says its salaried workers already earn pay that’s on par with other companies, after an increase this year. The pay freeze is only for a worker’s base salary, not for incentives. But that didn’t stop GM CEO Dan Akerson from lobbying the federal government last week to allow pay raises for some top executives. He says the company is losing key people and it is having trouble hiring top talent because of government mandated pay restrictions.

Coming up next, a look at the only hybrid on the market that won’t cost you any more money than its non-hybrid version.

With Mercury soon to be a thing of the past, Ford is continuing to grow its luxury brand, Lincoln, not only with new product and but also an image makeover. We recently learned more about it, in Washington DC.

Lincoln unwrapped its new MKZ Hyrbrid in Washington, D.C a few weeks ago with another hybrid – this one in the form of product presentation that upgraded the brand’s image at the same time.

In a room overlooking the National Harbor complex and filled with automotive and lifestyle journalists, the brand skipped the normal podium presentations on the MKZ, instead opting for an educational roundtable discussion on the role of luxury in today’s world.

Understanding the target market is helpful, but driving the car is still the dynamic that still sells. So reporters hit the Virginia hills with MKZ’s 2.5-liter four-cylinder engine and its 191 horsepower.

As a mid-size luxury hybrid it doesn’t have much competition, but that didn’t stop Lincoln from targeting best in class fuel economy – around 38 MPGs combined — because that’s what its research reveals that the luxury customer wants.

The company insists no matter where you drive the MKZ Hybrid that you’ll save in three areas that green consumers care about. Over the life of the car, Lincoln’s numbers say a driver is looking at saving almost 3,000 gallons of gas, 58,000 pounds of CO2 and more than $8,000 compared to a gas-powered non-hybrid cousin.

With that kind of reward aiming to grow those multiple eco-friendly digital flowers in the MKZ hybrid instrument panel seems a smart move.

The MKZ Hybrid starts at just over $35-thousand the same price as Lincoln’s V6 version of the car.

Don’t forget to tune in tonight for Open Line, the biggest party line in the world, where you can sit back and listen, or join in the conversation yourself. Call in at 218-936-6581. The PIN: 23327. Join host Michelle Naranjo tonight starting at 8 PM eastern time, on Open Line.

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

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22 Comments to “Episode 539 – China Moves the Metal, Volvo Plans Three New Plants, No Pay Raises At GM”

  1. David Sprowl Says:

    Hmmm what a great de-motivator. Give the top brass a juicy pay raise, but everyone else can just pound metal. I guess that teamwork concept just too another hit huh?

  2. pedro fernandez Says:

    I see ominous dark clouds in GM’s horizon if they insist on their “fat cats getting fatter while the others have to do with what is given them” philosophy.

  3. David Kornrumpf II Says:

    maybe gm is getting to comfortable in its morals so to speak with getting record profit margins this year . they are going to make a lot of their base employees mad and who knows they might consider striking to get what they want.

  4. tj Martin Says:

    I’m betting GM’s fat cats are just grabbing hold of every dime they can until they’ve bled the Cash Register dry .

    e.g. Grab the money and run .

  5. jf Says:

    Linclon has developed a neat marketing strategy with the MKZ Hybrid. The list price is the same but incentives aren’t. The ICE MKZ receives a $0 down cheap lease and the hybrid doesn’t. So they can promote how they don’t get a premium for the hybrid because list price is the same, but still get the premium because incentives differ. Nice trick.

  6. Chuck Grenci Says:

    You’ve misinterpretted the story. Salaried workers are locked for this year (those are not the UAW workers); those are the white collared middle management workers. As far as the top brass, GM is requesting a lift of the salary cap because of good people going elsewhere.

  7. Darren Says:

    ISUZU ?
    Just try to look for information on their car lineup online. EZ to see why they are failing.

  8. Dale Leonard-Lakewood,Ohio Says:

    Hi John, No matter what Lincoln introduces to the market it’s still going to have a hard time winning over those die hard RWD Town Car Owners.

  9. pedro fernandez Says:

    no matter if they’re assembly line workers or not, UAW or not, it is the same everywhere. I see it where I work too. They cut our throats and then the big shots get their bonuses because they saved the company money, duh!!

  10. dcars Says:

    I’ve asked the same question; what will luxury mean in the future? Is it unrestrained spending? cars getting two miles to the gallon just because it they can afford it?

  11. Chuck Grenci Says:

    Well, you can say that as a general commentary of todays finances (dare I say it’s almost always been the case) but it has little to do with the story presented.

  12. Chuck Grenci Says:

    My #9 responce was to #7; sorry I wasn’t quick enough to get it in sequence.

  13. Steve Says:

    I love your mistake…”600 cars” a to be built in 3 plants for Volvo in china. They must be trying to compete with the Suzuki Kizashi sales numbers.
    Keep up the good work. Love your show.

  14. Kit Gerhart Says:

    I hope Lotus doesn’t turn the Renault F1 team into a true bottom feeder team like Team Lotus. While not one of the top teams, Renault was at least mid-pack this year.

  15. pedro fernandez Says:

    No matter how much the automotive press tries to pat Suzuki in the back for the Kizashi, folks just ain’t buying the hype, not here and not in China either. Hey we have had a bunch of brand casualties here recently, the Japanese can afford to lose one.

  16. HyundaiSmoke Says:

    Who cares about Volvo. Any company that doesnt have a B Seg, and Full C Seg Lineup is a joke, and not to be taken seriously.

    On a global scale Peugeot and Hyundai as they move futher upmarket are too much of a threat to draw in newer younger customers.

    Volvo will have to really work on syphoning customers from established Premium brands.

    If I were Volvo, I’d bring back the Amazon and market the brand as a Global Premium small car/CUV brand.

    C20-B Segment (Sedan, 5 door, 3 door, Crossover)
    C30-C Segment (Sedan, 5 door, 3 Door, Crossover)
    C40-D Segment (Sedan, 4 door coupe, Crossover, 2 door coupe-w. droptop)

    I still think: Volvo, SAAB, Chrysler, Acura, are done for in the long run.

  17. HyundaiSmoke Says:

    Oh Pedro it’s Bye Bye:


    Japan will evolve into the Big 2.

    Toyota Motor Company (GM No.2)


    Renault/Nissan will be a NWO Corp-no national alliances/borders-6 platforms, 20 engines, etc… This will be neither a Japanese or French Company. You’ll be able to buy a:


    anywhere on Earth.

    Mazda will get swallowed up by somebody.

    A Country with 315 Million people like the US with 9 Brands, and a Country like Japan with 180 Million and 55 Billion brands…..

    A balance has been overdue considering countries that are larger than Japan like:


    Lack a domestic auto Industry.

  18. pedro fernandez Says:

    Smoke: don’t forget that the Japanese depended on exporting their automobiles a hell of a lot more than American brands that is why they had proportionately so many brands but as the auto market dwindles and you got new serious players Ford, H/K and the quality disparity has disappeared, the Japanese downsizing is imminent. ex. why would anyone in their right mind buy a Suzuki, Isuzu, Mitsu over a Hyundai or Kia? It makes no sense at all.

  19. Bob Says:

    The apparently huge EGOS (you did not expect some thing else? LOL!!!) that run Suzuki, Isuzu, Mitsubishi and other 100%, USDA choice automotive LOSERS in Japan JUST DO NOT GET IT.

    WHY oh WHY is Suzuki even BOTHERING to sell 50 stupid Kizashis in 17,000,000 a year China or in 12,000,000 a year US market?

    They must be bleeding HUNDREDS OF MILLIONS OF $ just on that one stupid model alone!

  20. Bob Says:

    “dcars Says:
    December 13th, 2010 at 2:12 pm

    I’ve asked the same question; what will luxury mean in the future?”

    Luxury will always mean the same thing for me.

    REAL top-quality leather in EVERY SURFACE if possible, hand-stitched. Seats, doors, ewven the DASH.

    REAL polished dark wood everywhere as well, in generous quantities.

    If I spend too much time in my car, or take long trips frequently, I WANT it to be as pleasant to the eye AND smell as a British Gentleman’s club, with the added benefits of a stellar sound system, an excellent view that changes every minute, and of course a divine engine and tranbsmission and a car that feels absolutely precise in going where you direct it to go.

    And I got ALL of the above 5 years ago, plus much more (a ton of safety systems, ABS, Airbags all over, ESC, even Yaw control, as well as navigation etc), and all for… one tenth of what an equivalent new luxury-performance model would costr today and would look far worse in exterior styling than mine).

  21. Bob Says:

    I guess the question was about the Lincoln MK-Z?

    Just because they label this FORD FUSION a Lincoln anything, does not mean it is a luxury car. FAR from it!

    It is barely a near-luxury car (as most ACURAS and some Lexuses and Infinitis)

    Its pricing policy is interesting. it is a BIG LIE to claim that its hybrid is priced the same as the non-hybrid MKZ,

    SINCE these are two VERY different cars!!!!!

    The Hybrid has a measly 4-cylinder engine, while the non-hybrid comes only with the 6-cylinder!

    I would STILL, eyes closed, buy the HYBRID one.

  22. Kit Gerhart Says:

    “SINCE these (MKZ hybrid and V6) are two VERY different cars!!!!!”

    They are different mainly in that one uses almost twice as much fuel as the other. Acceleration isn’t hugely different, with the V6 doing 0-60 in 7.3 seconds and the hybrid doing 8.9 in CR tests.