Automotive News - April 21, 2008 - (Page 8)

8 • APRIL 21, 2008 advertising OUR DEALERS ARE GROWING AUTOMOTIVE NEWS CHINA CONFERENCE AND SO CAN YOU! Geely chief: ‘We are still an ant’ Chinese companies urged to focus on developing brands, talent, technology Alysha Webb alyshawebb@yahoo.com “With Zimmerman as a partner we have grown to be the # 1 GM Dealer in Albany, NY.“ Kara DePaula DePaula Chevrolet China, most passenger vehicles are produced by joint-venture companies of global and domestic automakers. The brands of the domestics have about one-quarter of the market. Chinese brands are growing rapidly and expanding the number of products. Their design and manufacturing have improved rapidly, Zhao said. For comparison, China’s light-vehicle market in 2007 grew 21.0 percent to 5.23 million, according to Automotive Resources Asia, a division of J.D. Power and Associates. Home-grown talent Geely has a good distribution and service network, with more than 500 outlets in China and more than 200 overseas, Zhao said. It also has its own r&d team. By the end of 2008, Geely will employ more than 1,200 engineers, Zhao said. By 2012, that will rise to 2,000. Geely has developed its own technology, including several engines and a transmission. It has two cars whose powertrains can meet stringent Euro 5 emissions standards, Zhao said. Tata Motor Co. in India sent waves through the automotive industry when it showed a small car that it said would cost dealers around $2,500. Since then, there has been much speculation about whether such an inexpensive car could be built in China. Geely could produce a car that would sell for that little, Zhao said. But increasingly sophisticated Chinese consumers wouldn’t buy it because it would be too basic, he said. c RESULTS! • KEYES AUTO GROUP • IRA MOTOR GROUP • TOM WOOD AUTOMOTIVE • CHECKERED FLAG • AUTONATION • DIEHL MOTOR COMPANY • CORAL SPRINGS AUTOMALL • RUSTY ECK FORD • AUTOLAND • HENDRICK CARY AUTOMALL • PATRICK AUTO GROUP • HUBLER AUTOMOTIVE • PLEASANTON AUTOMALL • DEPAULA CHEVROLET • WALLACE NISSAN OF KINGSPORT • SUPERIOR CHEVROLET Dealers Prove Our Advertising Gets BEIJING — Many U.S. dealers are eager to start selling Chinese cars, but Chinese automakers are not ready to start shipping them. Frank Zhao, vice president of Zhejiang Geely Holding Group Ltd., says Chinese domestic automakers must craft compelling brands, retain talent and develop their own technology. In 2006, Geely Chairman Li Shufu said his company aimed to sell cars in the United States by 2008. Geely has since backed away from that target. Zhao said Geely still had plans to export to the United States, but he declined to reveal any details. At the Automotive News China Conference here last week, Zhao said Chinese automakers have made impressive strides in recent years. But they are still like ants compared to elephants, he said. “We are still an ant, just a large ant,” he said in a candid assessment of the domestic industry. In Scrambling for technology But the Chinese automakers’ growth strategies are confusing, he said. They do not pay enough attention to r&d, concentrating only on getting bigger. Instead of developing their own technology, Chinese companies are buying it. “You can never get core technology through buying it,” Zhao said. Chinese brands have unique advantages on which they should capitalize, he said. Those include: A cost advantage over foreign brands, though it is shrinking. Local talent and familiarity with the market and consumer. The ability to “stand on the shoulders of giants” — that is, learn from the foreign companies. In 2007, Geely sold 184,176 units, up 4.0 percent compared with 2006. Honda could import cars from China Steven Ribet autonews@crain.com GET A COMPLETE MARKETING PROGRAM! Guerrilla TV Marketing Radio Print Hispanic Direct Mail Web Design Internet Website Optimization In-Store CALL OR E-MAIL THE AGENCY THAT WILL WORK FOR YOU 24/7 (SERIOUSLY) 1-888-878-ZADV zauto@zadv.com or visit www.zadv.com BEIJING — Given the trade friction between the United States and China, selling China-built cars in America is a politically sensitive topic for some. But Honda Motor Co. is already shipping China-built cars to Europe. And the automaker could easily export cars from China to America, reckons Masaya Nagai, although Honda has no plans to do so. “I believe we can export products to any country in the world,” said the president of Honda Automobile (China) Co. He said Honda executives in Japan would make the final decision on where his vehicles are marketed. Nagai spoke last week at the Automotive News China Conference here. In 2003, Honda set up its newest Chinese joint venture in the southern city of Guangzhou. Honda owns 65 percent of the venture, Guangzhou Automobile Industry Group Co. owns 25 percent, and Dongfeng Motor Group Co. owns 10 percent. Today, Honda (China) is the only automaker in China that exports more than a handful of vehicles to the developed world. Last year it made more than 43,000 Jazz sedans and shipped all of them to 21 countries in Europe. To meet standards in quality and environmental protection, Nagai said, Honda instructed workers to assemble and disassemble vehicles from Japan more than 1,000 times. Honda makes the same car at its plant in Suzuka, Japan. It is sold in the United States as the Fit. In the first three months of 2008, Fit sales almost doubled in a weak market, to 15,641 from 8,837 a year earlier. Asked whether the quality of his cars made in Guangzhou was the same as those made in Japan, Nagai replied, “I think so.” c ■ Beijing showstoppers The Buick Invicta concept, above, and the 2010 MercedesBenz GLK, right, are among the stars at this week’s Beijing auto show. The Invicta sedan showcases the design direction for future Buick vehicles, especially the LaCrosse replacement. The engine signals General Motors’ intention to offer a 2.0-liter four-cylinder engine, at least in China. That engine produces 250 hp and 220 pounds-feet of torque. The Mercedes GLK will be the automaker’s entry-level SUV. The U.S. model, known as the GLK350, will be equipped with a 268-hp, 3.5-liter V-6. Sales begin in January. GM redirects efforts to serve emerging markets Alysha Webb alyshawebb@yahoo.com BEIJING — Global economic power is shifting to emerging markets such as China, India, Brazil and Russia. So General Motors is developing products especially for those markets, said Nick Reilly, GM’s president of Asia Pacific. “The really big volume will be in the mini, small and lower-medium segments — low-priced segments,” Reilly said here last week at the Automotive News China Conference. Automakers must have products that hit critical prices in emerging markets, he said. But those products also must meet certain safety, fuel efficiency and quality standards. Getting to market quickly is important, too. GM isn’t looking to compete with India’s Tata Nano, a small car that wholesales for around $2,500. But GM needs a car for the huge number of people in emerging markets who are buying cars for the first time, Reilly said. “We are working quite hard to compete in the low-priced segments,” he said. Reilly did not offer specifics on GM’s efforts. But in China, engineers at SAIC-GM-Wuling Automobile Co. have been asked to reduce produc- tion costs by up to half on the nextgeneration Chevrolet Spark small car built there. GM will apply lessons learned in that effort to other inexpensive small cars. Building cars for specific markets is new for many global automakers, including GM, Reilly said. To achieve economies of scale, companies produced one car for all markets, he said. That is no longer viable. GM’s solution is global platforms, Reilly said. They let GM achieve economies of scale but still create distinct products for each market, he said. Said Reilly: “You need to be focused on local needs and requirements.” c http://www.zadv.com http://www.zadv.com

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Automotive News - April 21, 2008 Reorganization plan gives more muscle to 4 sales-channel execs Hummer plummets, Saturn soars in sales per franchise Chrysler-Nissan: Loads of partnership potential LIFESTYLE PICKUPS Strike averted Friday at GM transmission plant Hyundai to phase out Tiburon Veteran lobbyist looks back on decades-long mpg battle Autonews.com offers news customization GM offers free digital marketing package to dealers Lithia extends vehicle repair warranty to 3 years/50,000 miles With new products, is there life in Saturn? Ford plans $100M-plus F-150 launch Ford broadens its diesel strategy GM pitches its management system to dealers Supplier to help Mahindra offer diesel hybrid Transplants top 40% of N.A. output in March Geely chief: 'We are still an ant' Honda could import cars from China GM redirects efforts to serve emerging markets Beijing showstoppers New Challenger is appetizer for full line in 2009 Last week, I got a glimpse of the future Service contracts: Federal oversight is needed Delphi mess drags on Can't we stop importing oil? Ryan revolutionized this business An editorial glass ceiling? Driving on hydrogen — pros and cons BMW should build even more here Not what New York ordered Magna exec: More suppliers will fail Canada sales off 0.4% in March Bosch pushes crash avoidance Chrysler plans hybrid Dodge Ram Honda engineer is honored by SAE for safety efforts Panel: Diesels may hit 20% of U.S. market by 2020 Automotive News PACE Awards: Night of black ties, trophies, praise PACE Awards honor innovation Truck sales drop 31% in March Honda's new Pilot is bigger, more upscale In China, GM looks to fresh vehicles in 2009 U.S. economic woes hurt shareholder values Judge refuses to toss GMC franchise-award case Dealers Farley: Ford's marketing team is ready to roll Landry: Chrysler's consolidation will spawn service-only stores Profits up at Johnson Controls Hyundai to fix airbag problem GM to build $200 million Brazil plant Convis is CEO of Dana Holding Denso names Katoh CEO Stephen Feinberg speaks! Hogan eyes CEO spot in startup Chrysler reviving its global dreams? How I saved Delphi: A work in progress Tesla Motors' lawsuit: Designer Fisker ripped us off Concert in the key of C-3PO

Automotive News - April 21, 2008

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