Episode 673 – Nissan Details “Power 88″ Plan, Turkey Takes Off, Holden’s In Trouble

June 28th, 2011 at 11:40am

Runtime 7:36

Nissan released more details on its “Power 88″ business plan including how it intends to average one “all new” vehicle introduction every six weeks for the next six years. Turkey of all places is really starting to emerge as an important market for vehicle assembly.  Holden, GM’s Australian subsidiary, could be in deep trouble because of political flip-flopping and budget cuts in the country.  All that and more, plus John reviews the 2011 BMW Active Hybrid 750 Li.


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This is Autoline Daily for June 28, 2011. And now, the news from around the world.

Nissan released more details on its “Power 88” business plan.  As we reported yesterday, the goal is to deliver 8 percent global market share and an 8 percent operating profit by 2016.  To get there the company will introduce an average of one all-new vehicle every six weeks for the next six years.  I say define “all new.” PLUS it claims it will introduce 90 new technologies over that same time period.  “Power 88” also calls for an expansion of Nissan’s global dealership network to some 7,500 stores, up from about 6,000 today.

And it may want to expand in Turkey, which is starting to emerge as an important market for vehicle assembly. Hyundai and Turkish automaker Karsan just signed an agreement to assemble small commercial vehicles in Turkey. And Renualt sees car and van sales in the country hitting between 800,000 and 850,000 units this year compared to just over 760,000 last year.

HOLDEN, AUSTRALIAN FOR TROUBLE (subscription required)
But while Nissan is expanding and Turkey is growing GM Holden could be deep in trouble. According to Ward’s, Holden Chairman and Managing Director, Mike Devereux, says GM may stop making cars in Australia because of political flip-flopping and budget cuts to a fund that supports technological innovation. Also, Australia will implement a carbon tax which will add cost to operating in the country. Between 2005 and 2009 Holden reported over $600 million in losses, but last year the company saw a before-tax profit of $144 million, thanks, in part, to government funding.

IT SOUNDS LIKE A DISEASE! (subscription required)
As long as we’re looking at different automakers around the globe, have you ever heard of the car company Perodua? Me neither. I don’t even know how to say its name. It’s a Malaysian automaker that sells the country’s most-popular car.   The Myvi – a rebadged Daihatsu – has been at the top of the list since 2006, averaging more than 81,000 sales per year.  Nearly one third of all cars sold in Malaysia are Peroduas and half of those are Myvis.  To keep this momentum going the company just introduced a redesigned version of it.  It’s powered by a 1.3-liter four-cylinder engine delivering 86 horsepower.  Starting price is about $14,500.

And now to China. There some truly innovative design and styling coming out of China, and then there are the blatant rip-offs of patents and intellectual property. Fiat finally won its lawsuit against Chinese automaker Great Wall for copying the Fiat Panda. The company has been ordered to stop building and exporting the copies. But it’s a hollow victory. The court case took so long that Great Wall says it actually stopped production last September. That case was heard in Italy, not China. And now another Chinese company, the Beijing Automotive Industry Corporation, looks like it’s doing the same thing. BAIC is coming out with the BC 301Z which is a blatant rip-off of a Mercedes B-class (subscription required). Don’t worry, Mercedes knows all about this. Its partner in China is none other than BAIC.

Electric cars keep making progress, including in motor racing. AC Propulsion, the California company that specializes in electric motors, raced an electric car up Pike’s Peak, shattering the old record for electrics by nearly a minute – a record that it set a year ago. The car uses a 200 kW induction motor. That’s the equivalent of 268 horsepower, not a lot. But since the race ends at more than 9,300 feet of altitude, or 2,800 meters, electric cars do well because they’re not affected by the altitude like internal combustion engines are. Just for good measure, Nissan ran a stock LEAF up the mountain in 14 minutes 33 seconds. The track record is 9 minutes and 20 seconds.

Coming up next, a look at one of the most luxurious and most expensive hybrids that you can buy.

I recently got a chance to test drive the biggest and most expensive hybrid that BMW makes. Here’s my take on what it’s all about.

I think the diesel version of the 7 Series is a far more satisfying car than the hybrid. If BMW decides to sell the diesel in the U.S. market I’ll bet it handily outsells the hybrid.

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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31 Comments to “Episode 673 – Nissan Details “Power 88″ Plan, Turkey Takes Off, Holden’s In Trouble”

  1. Dan Minick Says:

    Yeah, Perodua. Surely you remember the Peodua Nipper… well, ok. maybe not.

  2. Tony Gray Says:

    Shazam, Shazam, SHAZAM!!

  3. pedro fernandez Says:

    Yeah, Sergio good luck collecting from the Commies, don’t hold your wine collection on this, it may end up as expensive vinegar.

  4. pedro fernandez Says:

    Is GM a mess or what? U.S. Europe, Australia, the only place they seem to be ok is China.

  5. Chuck Grenci Says:

    BMW 7 series, yep, diesel; good call John.

  6. HtG Says:

    A few weeks ago I went to a local clothing store where I observed a bald fat guy loudly request that he be brought ‘a top of the line K-Swiss shoe.’ Do you think he also wants that Bimmer with all the best stuff?

    Speaking of clothes. john, oh john.

  7. Don B. Says:

    Hey, that 750 had Jersey plates.
    What you come to my hood and you can’t say hi or stop by for a coffee?

  8. pedro fernandez Says:

    it seems all these new models first arrive in NJ and get tested there, If they can make it there, they can make it anywhere!! its up to you NJ NJ

  9. HtG Says:

    BMW of North America, LLC
    300 Chestnut Ridge Road
    Woodcliff Lake, NJ

    OH!!!, Bada Bing!

  10. pedro fernandez Says:

    in other words, John: the BMW Hybrid SUCKS! Bring in the diesel instead, but they won’t the 3 series diesel is NOT selling well here.

  11. HtG Says:

    all this Jersey talk has to be drivin’ some guy totally pazzo. Like he cannot take it no more.

  12. Kit Gerhart Says:

    That big BMW diesel belongs in the 5 and 7 series. It works well in the 3, but it is too large of diesel to get really exeptional mileage in the 3, compared to the gas engines in that car.

  13. Kit Gerhart Says:

    For those who are after seriously good mpg in the 3 series, BMW should sell us one of the 2 liter, 4 cylinder diesels, and with a manual transmission.

  14. ckernzie Says:

    Sounds like GM is playing a little politics down under and it also sounds like the green hoards have invaded OZ as well. Austrailia better wake up and understand that they WILL loose their domestic auto industry if they don’t support it and continue down the misguided Californiaesque green road that blames the automobile for all the world’s problems. Just like we in North America have discovered the Auto Industry is Global now and any BS results with Unions or Gov’t interference results in production being moved. Austrailia has had a closed system for many years and they are getting their wake up call courtesy of GM.
    Thankfully a full-on carbon tax here in Canada is political suicide and we know better than not to support our Auto Industry.

  15. HtG Says:

    @13 Kit, I think BMW was showing a direct injection I4 in the Z4 at the auto show. I can’t recall if it had a turbo, but didn’t John’s guest on Autoline, Derrick Cusack, talk alittle on how diesel measured up to Ford’s Ecoboost?

  16. pedro fernandez Says:

    just read an article in TTAC about a used car dealer who is finding very high prices at auctions, seems like anything useful, that still looks ok is getting top $ even at the auction places. looks to me that the market is predicting a further drop in new car sales and continue high demand for used ones, specially high mpg models from Japan.

  17. cwolf Says:

    Nissan’s plan sounds good,but considering the global economy,…do you know how to say “IMPOSSIBLE!” Hope they have a big lot to keep all those cars.

    Kit, I would love to have a 2l diesel 3 series,regardless of the service costs! A firm big 3 guy,I could be swayed.

    @ ckemzie: Allow me to inform you that the main reason for the increase in auto plants abroad,particularly Mexico,has little to with unions and union wages. In fact,if you haven’t read todays paper, the auto industry now in negotiations with the UAW stated a more positive outlook and a desire to find mutual benifits. Better reasons for moving are; keeping stock prices higher,lesser corp. taxes, and more cash in CEO pockets.

  18. pedro fernandez Says:

    There are no real reasons for the domestics NOT to move production south to Mexico, the product is not bad, low wages, steady govt and lower transport costs. besides no UAW there.

  19. Kit Gerhart Says:

    I recently read on the AW site that the next generation 1 series will be all 4 cylinder. I think they will be direct injection, both naturally aspirated and turbo. I suspect one or both of the engines will show up in US market Z4′s

    From John’s report on the 7 series hybrid, it sounds like they didn’t do a very good job with it. I wouldn’t want the power train vibrations he describes, even in a Prius, and in a $100K+ luxury car? No wonder it’s not selling, especially with the very mediocre gas mileage. I just checked the BMW UK site, and they don’t sell the 7 hybrid there, but they have a nice selection of other power trains, petrol and diesel. No manual transmissions in the 7, though.

  20. Kit Gerhart Says:

    At some point, the car companies will start to notice that if they build all of the cars in Mexico, there will be no one to buy them. A sizable number of “big three” hourly employees still buy the products their companies build. The people building them for $3/an hour, or whatever it is, in Mexico certainly can’t afford to buy them.

  21. cwolf Says:

    pedro: Considering your Cuban blood, I can only say,”You gotta be NUTS!” “Low wages” are not deserving of what these people endure. Steady Gov’t!; Tell me your just kidding. Yes, there is no UAW. Their union is tied to the gov’t and is, in a nut shell, not only worthless but is ruled by the same elite in bed with the industry and can be bought with the highest peso! pedro, you are usually in the ball park in your opinions, but this time you are not even close to reality!

  22. Jesse W. Henry Says:

    Wow so for 4 times the price of my 2001 Mercury Grand Marquis V8 with 4 speed auto I can get a 7 series BMW Hybrid V8 with 8 speed auto that gets the same MPG’s…. I know it has roughly double the horsepower and torque but come on they can’t beat a ten year car based on a chassis from the 70′s by a couple MPG’s with all the new hybrid tech?

  23. HtG Says:

    I have to agree with cwolf about the Mexican govt. It’s a narco war down south between the oil state and the narcos. Did anyone read about the highway of death on the gulf coast?

    Kit@19, In fact, the Z4 on the floor of the Javitz had the I4 engine. The car was yellow, and if you wanted to sit in it you’d have to wait in a line of people having their picture taken in it. No other car is so consistently mobbed at the Autoshow as the Z4.

  24. HtG Says:

    here ya go


  25. pedro fernandez Says:

    Guys, what I meant to say is that Mexico will not have a Castro or a Chavez taking power and nationalizing and overtaking all companies 9even foreign) like Castro did and Chavez is attempting to do, the US would never allow an enemy country to exist in its borders. Kit, how come all the companies that have moved production to China have not taking that fact into consideration when they decided to move there? Even if they did they figure the extra profits for them was worth the risk.

  26. Kit Gerhart Says:

    Pedro, the products made in China, from $1 dust pans to big screen TV’s are different from $30K cars, but I’m sure the car companies know what they are doing. Ford is the “leader” in moving production to Mexico, and it seems to be working for them. Production workers, even at UAW plants, don’t make the money they once did, so fewer of them are buying new cars.

  27. pedro fernandez Says:

    Oh, they know what they’re doing alright,only worrying about their own bottom line, never mind the fact that we lose more and more manufacturing jobs every year, whether it’s bikes or exercise equipment or whatever or even bridges, yes that bridge in California is being built in China and brought here for assembly, I hope they do a better job than they do with dry walls and cars.

  28. Kit Gerhart Says:

    Pedro, I agree completely. The manufacturing jobs that created our “middle class” are going away, to create China’s emerging middle class.

  29. dcars Says:

    Moving all manufacturing out of the US is irresponsible. I can understand diversity in the manufacturing mix. That’s just good business, but companies like Mattel and “Stanley Black and Decker” that do not maintain any manufacturing here shows how little they care about the US.

  30. Andrew Charles Says:

    Most companies don’t have the auto-industries’ long product cycles, development times and long-term investment outlook. This forces the autoindustry to think long-term, and about how they can develop a market by establishing local production, not just flooding a market with cheap imports. Other industries have a mercantilist approach—how can they screw as much money out of the consumer at the lowest cost. Investment is short term, with little or no investment in manufacturing themselves. If a market collapses or a supplier fails, they just look for a new supplier or target a new market. It’s the kind of short-term, detrimental behavior Adam Smith repudiated over 200 years ago—and coincidentally was a key factor leading to the American Revolution the same year.

    Now it’s not just about moving jobs to Mexico for low wages—a lot of investment in Mexico is for the Mexican and Latin American markets. Not only Hyundai, BMW and Mercedes are increasing US production, but GM is shifting production of the T-body sub-compact from Korea to the US, They’ve shifted production of the Regal from Germany to the US, and will add the Verano to Us plant, even though it’s already being built in China. Almost uniquely the auto industry realizes that local production supports local consumption, and the apparent savings in off-shoring and outsourcing production are offset in increased logistics costs, inventories and reaction times. As Taichi Ohno said “The greatest waste of all is excess inventory,” and any product in shipment, is excess inventory. To paraphrase: “we must build a ship to carry this inventory, and hire workers to load and unload this ship.

    In the ship people will be needed for rust and damage prevention and load management. Even so, some goods will suffer damage. Because of this additional workers will be needed to repair the goods before they can be shipped to retailers for sale.

    If shipments are not precisely tuned to market demand, shortages will arise. So, some people will think shortages are a reflection of inventory capacity. So plans are put into place to increase inventory shipments, and waste increases even more.”

    (I’ve seen this first hand).

    N.B. aligning production to market demand was a key reform instituted by Alfred Sloan at General Motors in the mid 1920s, and enabled GM to weather the Great Depression, while other companies failed.

  31. pedro fernandez Says:

    When historians look back at this time period, they will ask: “Why did the Western governments allow their industries to abandon ship, destroy the American middle class and build up China’s, was it just greed and profit or was there an underlying purpose after the West supposedly “won” the cold war.