January 18th, 2010 at 12:00pm
By 2015 the Chinese government would like to see domestic vehicles make up half of the market. Ford and Mazda are looking at ways to separate their joint venture in China. Honda is mad that Hyundai is beating it in fuel economy. All that and more, plus a look at the spectacular video presentation that Ford put on at the Detroit auto show.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. China wants its domestic brands to take more market share. Ford and Mazda continue to drift apart. And Honda is mad that Hyundai is beating it in fuel economy.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Monday, January 18, 2010 – Martin Luther King, Jr. Day, and now, the news.
Even though China had record auto sales last year, less than half of those were from domestic brands, and according to Edmunds Inside Line, the government is looking to change that. By 2015 the country would like to see domestic vehicles make up half of the market. China is looking at ways to reduce its reliance on foreign automakers and promoting its own. Through the first 11 months of last year, domestic vehicles made up 44 percent of the market.
Looks like Ford and Mazda are continuing to drift apart (subscription required). The Wall Street Journal reports they are looking at ways to separate their joint venture in China. Right now they operate two plants with Chinese automaker Changan, and supposedly want to split that into one plant each for Ford and Mazda. The AFP and Reuters report that Mazda is calling these reports “speculation,” which doesn’t sound like much of a denial to me.
The cooperative arrangement that Mercedes and BMW were trying to put together may be falling apart. Bloomberg reports that the two companies were trying to find areas where they could work together, such as in purchasing, but that talks broke off. Yet Daimler is denying the talks have collapsed. It is also in talks with Renault to jointly develop small cars.
We know that Subaru defied the odds last year and actually saw its sales increase in the U.S. but how did they do around the globe? According to the Detroit Free Press, the company set record sales in a number of other markets as well. Its market share in Australia increased, sales in China were up an eye-popping 86 percent and the company set record sales in other Asian markets. It goes to show that a small niche vehicle company can survive, although the company is now partly owned by Toyota.
Ward’s reports that the average fuel economy for new vehicles sold in the U.S. went down last month (subscription required) as consumers bought bigger. December light-truck sales achieved their highest monthly market share since January 2009 hitting 50.1 percent. Still, the average fuel economy for new, light vehicles sold in the U.S. was up 3.3 percent for the year reaching 22.2 miles per gallon, or about 10.6 L/100km.
Hyundai is now advertising itself as the fuel economy leader in the American market. Company insiders tell Autoline Daily that Honda – the former fuel economy leader – is complaining about those ads because Hyundai is not a full-line manufacturer. Of course, Honda is not a full line manufacturer either. The only full line manufacturers are the Detroit Three and that’s why they always come in at the bottom of these surveys
So you’re thinking about getting a Bugatti Veyron? That’s terrific, but this story may change your mind. Autoblog reports that maintenance costs for the million-dollar supercar rival that of a private jet! Take the tires for instance. The company recommends you swap out the specially made Michelins every 4,000 kilometers or 2,500 miles at a cost of about $30,000! Every 10,000 miles Bugatti recommends a tire AND wheel change which will set you back about $50,000! Some estimates put annual operating expense at $300,000! Yikes! It’s expensive to be rich.
Coming up next, a look at the spectacular video presentation that Ford put on at the Detroit auto show.
Last year’s auto show in Detroit was a conspicuously frugal affair. With the automotive market in a free fall, automakers slashed their spending on the show. And it showed!
This year, the budgets were a lot better and you could notice the difference. The exhibits were not as extravagant as in the past, but were definitely a step up from a year ago.
To me, the most impressive of all the press previews was the one Ford did, where it used a massive video screen, the biggest I’ve ever seen. But it also used the floor of its stage to double as a video screen, and the visual impact was dazzling. Even more than that, all the graphics swirling, moving and flowing on such a grand scale actually created a feeling of euphoria. The impact was electric. You only appreciate how large these video screens were when you see cars and people on the stage. And while the videos themselves were good, it was the giant format that transformed the experience of watching them. When you compare this to how other automakers introduced their new products, the contrast is stark. Ford, knowing the value of showmanship, created a memorable experience.
Mark your calendar for January 26 when we’ll be webcasting live from the Washington DC auto show. We’ll be specifically talking to automakers, lawmakers and regulators about the prospects for clean diesels in the American market. That’s January 26 from 12:30 to 2:30 p.m. Eastern Time.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.