Episode 163 – Car Imports To China Drop, GM Cuts Production, Saab Close To Sale

June 12th, 2009 at 12:08pm

Runtime 5:40

Car imports to China have dropped by more than 30 percent this year. General Motors is scaling-back its third-quarter production estimates by nearly 60,000 units. GM may announce today that it is selling Saab to Swedish super-exotic sports carmaker Koenigsegg. All that and more, plus a look at some of what John Mendel from Honda had to say about Chrysler’s new management structure on Autoline After Hours last night.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. China cuts down on car imports. GM cuts its production forecast. And Saab might get sold today.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Friday, June 12, 2009. And now, the news.

New car sales in China are booming, but most of those sales are coming from its domestic industry because, according to Gasgoo.com, car imports in China have dropped by more than 30 percent this year. It’s mostly attributed to China’s tax policy that encourages consumers to buy vehicles with a displacement of 1.6-liters or less, but a majority of the vehicles imported to China have a displacement of 2.5-liters or more.

The Wall Street Journal says car sales in China will be up 5 percent to 10 percent this year. More importantly, it says Chinese suppliers are boosting their quality and efficiency (subscription required). The supplier market is expected to grow from about $133 billion today to $350 billion by 2015. About 30 percent of those parts are expected to be exported. But Chinese suppliers are also looking to buy other suppliers in North America and Europe.

Meanwhile, back in the states, WardsAuto.com reports that GM is scaling-back its optimistic third-quarter production estimates (subscription required). The company initially said it planned on producing around 560,000 vehicles from July to September, a reduction of almost 36 percent from last year, but the new build schedule trims that figure by nearly 60,000 units to right around half-a-million. This contrasts with Ford and Toyota, who are both modestly upping output. Ford is boosting third-quarter production by about 42,000 vehicles while Toyota plans on building around 7,000 additional Priuses per month for the next six months.

GM may announce today that it is selling Saab, to Swedish super-exotic sports carmaker Koenigsegg. According to the New York Times, the two companies are close to completing the deal. Swedish news reported that a group of Norwegian investors is also involved with the sale. It’s hard to see how Keonigsegg will turn Saab around, last year Saab sold fewer than 100,000 cars which is less than one half the output of one assembly plant.

The cash for clunkers bill in the U.S. is coming closer to fruition. The U.S. House and Senate reached a deal yesterday. According to the Detroit News, $1 billion will be appropriated to the program from a $106 billion bill to help fund the operations in Iraq and Afghanistan. The one billion is expected to last through the end of September but it’s estimated $4 billion will be needed to fully fund the program. The agreement reached yesterday includes everything that was in the House bill. And it’s expected to be voted on and enacted next week.

Coming up next, a look at some of what John Mendel from Honda had to say last night about Chrysler’s new management structure on Autoline After Hours.

Last night on Autoline After Hours we got to talking about how Chrysler has promoted its brand managers into CEOs of their brands with full profit and loss responsibility. John Mendel, executive vice president at Honda, said he likes the idea, but there are pitfalls they’re going to have to try and avoid, like how do they prevent the brands from competing against each other on their media buys.

You can watch the entire show on our website right now. Just check out the John’s Journal section at autolinedetroit.tv.

And that’s it for today’s and this week’s top news in the global automotive industry. Thanks for watching, we’ll see you on Monday.

16 Comments to “Episode 163 – Car Imports To China Drop, GM Cuts Production, Saab Close To Sale”

  1. Tony Gray Says:

    Hey, who won the trivia contest?! It is Friday you know.

  2. Episode 163 - Car Imports To China Drop, GM Cuts Production, Saab Close To Sale Says:

    [...] Original post by John’s Journal [...]

  3. craigerzgt Says:

    Sweet, so Saabs are going to get 800 horsepower, ethanol-powered V8s under the hood? That’s going to be some MAD torquesteer!

    Unbelieveable to hear that in this global financial crisis, China’s car sales are going to be up. Not surprising to hear that China’s domestic vehicles are improved in quality, what with the partnerships they’ve had to do with “foreign” manufacturers, but you could say that some polish on a turd is better quality. It’s still a turd.

  4. John McElroy Says:

    Sorry we missed announcing the trivia winner today; we’ll reveal the winner on Monday!

  5. Pete Pryce Says:

    I think John has accidentally coined a new phrase for the auto industry – “upboosting”. Pretty clever!

  6. David B. Fishburn Says:

    Regarding the Chinese restricting auto imports; that’s something the U.S. gov. should have done about 30 years ago. To those who say that it’s not “free market”; what is “free market”? especially when you consider most countries around the world restrict imports in one way or another. If Uncle Sam had done this , our market and industry would be in better shape. Now about the idea of brands competing against each other, so what? that is excactly what was happening until the late 60′s, earlt 70′s. The brands survived, the companies survived. It made life a little more exciting, watching the competition, especially every fall, when the new models were unveiled.

  7. David B. Fishburn Says:

    whoops, i meant “early”

  8. jeff mohr Says:

    Many pieces of the puzzle are missing as we go through the cafe mpg issues and profitability issues —–

  9. Episode 163 - Car Imports To China Drop, GM Cuts Production, Saab Close To Sale « Honda Says:

    [...] See the original post: Episode 163 – Car Imports To China Drop, GM Cuts Production, Saab Close To Sale [...]

  10. W72indian Says:

    Sorry, John, Peter, & that guy who loves the Vue, on the loss to that bird that can’t fly but finally got the cup.

    Stixburgh, in 7.

  11. Mouhamad A. Naboulsi Says:

    Can we say PROTECTIONISM dear girls and boys?

    It spells like this:

    Politicians are spineless

    Politicians accept agreement and make laws to serve an unknown big pie in the sky, mom, the flag and apple pie, but does not serve the people

    Can we say BRAINELESS boys and girls? Never mind… We voted for a savior and got a dictator.

  12. pedro Fernandez Says:

    Just finished watching Peter’s interview with Bob Lutz, who keeps saying that GM’s problems are with legacy costs, and not with being able to sell vehicles. Who is he kidding? the ever decreasing GM marketshare was not due to legacy costs, it was due to a barrage of inferior products that GM put out year after year and the buyer just got fed up with.

  13. Tom Says:

    pedro Fernandez, your missing the point. The company is failing because of the legacy cost. GM and many american car companies will sell you inferior products because they cannot make profit with their cars for future R&D. Also they are unable to give the prospective manufactures more car because thousands of dollars are per car is duducted from there operating profit to pay for the legacy costs.

    Thats why bankruptcy was inevitable. they needed to clear the balance sheets with the unions, bond holders and ect.. so they actually build there company constructively.

  14. pedro Fernandez Says:

    Agreed, but market share for GM has been going down for many years and Lutz did say that the problem was not that they couldn’t sell cars. obviously if they sold enough cars this would not have happened. Remember the rebates, those was the profits going out the window.

  15. Thor Says:

    I had a recent unbelievable experience with the expensive (to rent) Nissan Altima HYBRID. I had reserved the excellent Toyota Prius (a fantastic vehicle, far more high-quality inside and out than the crappy nissan), but the guy at the counter convinced me to “upgrade” it (LOL!!!) for $7 extra a day to the Nissan Altima Hybrid.

    What a mistake!!! After one day and few miles, I drove it back to the Hertz lot at LAX, when it promtly DIED, out of oil (!), and with only 7k miles. I never considered to check the oil level of rentals, and especially when they told me that the oil in the Nissan was JUST changed at 7k miles.

    I got a $100 Hertz check for my suffering, and an OUTSTANDING PRIUS that I should have insisted on in the first place.

    Besides the unreliability, The nissan SUCKED in EVERY OTHER WAY; Its MPG was PITIFUL at 32 cumulative, while the PRius made 60 and even 68 at times, and 50+MPG the previous time I rented one.

    The steering wheel of the Nissan was a JOKE, too much power assist, made it fit for only frail grannies! And feel it was lacking directional stability as well.

    The interior of the Altima sucked BIG TIME, with its cheapo hard 80s plastics all over. WHat a poor interior!

    I just can’t believe there are BLIND, Ignorant consum,ers that shell out maybe over $30k all told for the Altima Hybrid, it feels like a $10k KIA. a BASE kia!

  16. pedro Fernandez Says:

    @Thor, but they say all cars are equally reliable now, Isn’t that the BS they’ve been trying to feed us for a few years now? That it doesn’t matter what you buy, they’re all well built reliable machines.