Automobiles Check 1

Volkswagen AG will buy a 20 percent stake in Suzuki Motor Corp. for 222.5 billion yen ($2.5 billion), forming one of the world’s biggest auto alliances and giving the two carmakers a boost in fast-growing Asian markets.

Suzuki, which makes small cars such as the Swift and the Splash, said Wednesday it will also purchase shares in Volkswagen worth up to half the amount the German maker buys, solidifying the partnership through cross-holding of equity.

The Japanese automaker said the companies plan to complete the deal, which would make Volkswagen its top shareholder, by mid-February.

The two companies said their combined global sales surpassed 8.6 million cars last year, exceeding the 7.5 million sold around the world by the Toyota Motor Corp., the world’s no. 1 automaker.

The deal comes just days after VW announced that it has bought an initial 49.9 percent stake in Porsche AG for $5.9 billion.

The alliance with Suzuki will encompass product development, production and sales and focus on hybrid and electric cars, Suzuki said.

Suzuki, which is smaller than domestic peers such as Toyota and Honda, said it was difficult to stay competitive given quickly developing automotive technology and the need for cost cuts, making a partnership necessary.

“The world automotive industry is in the midst of significant changes,” Suzuki said in a statement. “It is difficult to adapt to these numerous issues on our own.”

“We must move with the times,” Suzuki Chairman and Chief Executive Osamu Suzuki said in a joint news conference with his new partner.

The tieup will allow the two companies to concentrate on each other’s strengths while compensating for each other’s weaknesses, Suzuki said, without elaborating.

For the German company, the alliance is “a big step forward in the compact car segment, particularly on the emerging markets in Asia,” Volkswagen Chief Executive martin Winterkorn said. “In turn, Suzuki can benefit from our experience with efficient and environmentally friendly vehicle technologies.”

They could also boost their presence in expanding markets, Suzuki said. Suzuki has nearly half the market share in India, while Volkswagen is strong in China, as well as South America and Europe, the Japanese company said.

Guam’s top youth golfers, along with players from around the region, will be teeing it up this coming weekend as the Guam Junior Golf League hosts the BMW Guam USA Junior Open from December 19th-21st at Starts Guam Golf Resort.

The tournament, which is presented by Prestige Automobiles, will feature players from age 7 to 18 in both boys’ and girls’ competition. The age brackets are 7-10, 11-12, 13-14 and15-18. Awards will be given to each of the top three finishers in both the boys’ and girls’ brackets

The tournament begins Saturday with registration and a practice round before heading to the first official round of play on Sunday and finishing off with the final round on Monday. Tee times are set for 11 a.m. on Sunday and Monday.

Off-island competitors

This is the first time in its history that the GJGL has invited other countries to join the open. According to coordinator Kaoru Camacho, more than 15 players from the Philippines and Japan have already confirmed their participation in the tournament.

The participation of other countries is a huge accomplishment for the GJGL whose mission statement is “to promote the game of golf on Guam to juniors of all skill levels and to provide introductory, educational, rules, etiquette and competitive programs via top quality coaches and excellent venues, enabling junior golfers the opportunity to learn the game and to compete globally.”

Entry into the tournament is $125 per player and interested golfers can contact the GJGL at 688-2878 or 649-8801 for details. The fee includes access to the opening day banquet on Saturday and the awards banquet on Monday where trophies and prizes will be awarded.

The automotive industry, severely hit by the global financial crisis, needs the introduction of new incentives, Ömer Burhanoğlu, the chairman of the Automotive Parts and Components Manufacturers Association (TAYSAD), has said, urging a cut in value-added tax (KDV) in particular in order to rejuvenate the heavy vehicle industry.

Speaking to the Anatolia news agency yesterday, Burhanoğlu stated that the sector is still suffering from the adverse impact of the global financial crisis and that production, especially of commercial vehicles, is about to come to a halt because of the lack of an incentive. The production of trucks and tractors is limping along at the same figures as seven years ago, he said, stressing the urgent need for a cut in the KDV.

While Turkey’s exports of automobiles decreased by 32 percent in the first 10 months of this year compared to same period of last year due to the crisis, European countries have seen an increase in their auto exports each month thanks to incentives introduced in the sector by their own governments, Burhanoğlu said, adding: “The sector’s exports are expected to be around 650,000 by the end of the year. Last year 79 percent of 1,172,000 vehicles produced in Turkey were exported. This year only 72 percent of 710,917 vehicles produced in the first 10 months of the year were exported.”

Automotive industry exports reached $7.7 billion in value in the first 10 months of this year and $4 billion in sub-industry exports, totaling $11.7 billion for all auto industry exports between January and November 2009, representing a 41 percent decline over the same period of last year. The sector’s exports are predicted to reach about $15 billion by the end of the year, Burhanoğlu said.

Burhanoğlu, saying the automotive industry has been enduring tough times because of the recession, pointed out the positive results from the cut in the private consumption tax (ÖTV) which was introduced in March and lasted until the end of September this year. The sector breathed a sigh of relief with the sales figures for light vehicles, which also increased in production; however, sales of heavy vehicles such as trucks, tractors and minibuses were not influenced by the positive impact of the incentives as the rate of ÖTV was already low for these vehicles, he said, urging a cut in the KDV to ensure the rejuvenation of this vehicle group. The sector is in urgent need of incentives, Burhanoğlu stressed, adding that if there are no incentives, the domestic market will seriously suffer.

According to data released by Burhanoğlu, 84,550 vehicles were produced in October of this year and of them 45,452 were automobiles. The number of vehicles produced in the first 10 months of this year was 710,917 and of them 420,379 were automobiles, he added. These figures show that during this period there was 26 percent decline in the production of automobiles, 38 percent in trucks, 51 percent in minibuses and 20 percent in buses.

Qatar Automobiles Company (QAC), the exclusive dealer of Mitsubishi Motors and Fuso Trucks and Buses in Qatar, yesterday said a new free zone branch for Mitsubishi will be opened in Doha next year.
“Part of the key focus of Mitsubishi’s 2010 strategy for Qatar is the establishment of a free zone branch in Doha that will support marketing, after services, parts supply and training,” an official said.
This was discussed at the Mitsubishi Motors Corporation’s annual GCC meeting, in the presence of MMC president Osamu Masuka. During the meeting, held in Dubai, Masuka praised QAC as “one of the best Mitsubishi franchisees in the Middle East”, the official said.
QAC said Mitsubishi has plans to launch a brand new 2.0L-engine SUV, in addition to the launch of a new edition Lancer EX, Pajero and Pajero Sports in 2011.

The tax cut for cars purchased as replacements for vehicles registered before Dec. 31, 1999 will have been provided to one in four cars sold on the local market this year, industry data showed yesterday.

According to the Korea Automobile Manufacturers Association’s estimates, 340,000 vehicles will be purchased this year to replace automobiles registered 10 or more years ago.

With the total automobile sales expected to come in at 1.37 million, cars that receive the tax cut will account for 24.8 percent of the total.

So far about 284,000 vehicles have already received the tax cut, accounting for 34.2 percent of automobile sold locally since the measure was introduced in May.

Although the measure has succeeded in stimulating the auto market and caused monthly sales to rise above last year’s figures since May, some in the industry are voicing concerns that sales will again drop next year as a large number of motorists were prompted into buying new vehicles while the tax cut is in place.

India and Italy  are eager to boost their bilateral trade from the current level of $ 8 billion to at least $ 10 billion by 2010.

The visiting Italian minister of economic development, Claudio Scajola described India as “the fastest growing market fuelled by the increasing population of middle class with rising income levels.”

Addressing the Italy-India Business Mission-2009 jointly organized by the Italian Institute of Foreign Trade – ITALIA – and the apex Indian industry body, FICCI in Delhi on Monday, Scajola said :”the bilateral trade between the two countries is only $ 8 billion. We need to boost it to at least $ 10 billion. We are interested in transferring technology and innovations to India. Italy would be interested in investing in infrastructure, transport, communication, banking, energy sectors. We are also interested in the renewable energy sector also.”

He described India as an important market for Italian products, especially for food processing, machine tools, infrastructure, transport, telecom, and energy, particularly renewable energy.

He urged Indian companies to take advantage of the opportunities for collaboration with their Italian counterparts as Italian companies would be willing to transfer knowledge and innovation in their respective domains to their Indian partners.

Scajola is leading a 210-member large official-cum-business delegation to India. A similar India-Italian business conclave is scheduled in Mumbai from December 16.

The Italian business delegation represents agrofood, agroindustry, apparel textiles and leather, biotechnology, chemical, construction, cosmetics, electronics, environment and energy, furniture and home furnishing, high technology, ICT, jewellery, machinery, material and supplies, meccatronics and services sectors.

Italy is one of the largest economies in the 27-nation Euro-zone and is characterized by the predominant presence of small and medium sized industries. Italy is India’s fourth largest trading partner in the European Union. In terms of exports from India, Italy stands in the 11th position, while it stands 23rd in imports to India.

Major items of India’s exports to Italy are textile yarn and fabrics, apparel and clothing accessories, automobiles and components, chemical products, refined petroleum products, footwear, iron and steel, leather and leather products. Major items of India’s imports from Italy are machinery and mechanical appliances, basic chemical products, automotive components, engines, power generators, audiovisual devices, machine tools, precision equipment.

Though the bilateral trade is still at modest levels, it has been growing at a steady rate with a yearly average of 30% and the maximum growth of 43% was witnessed in 2006-07.

At the signing of the Memorandum of Intent (MoI) between ‘Invest India’ and ‘Invitalia’, Indian minister for commerce and industry, Anand Sharma expressed the hope that bilateral FDI flows would gather momentum as the agreement provides a single point of contact for existing and potential foreign investors seeking opportunities for investment or those who face impediments to their investments, or seek more information on applicable legislation and regulations.

‘Invest India’, is a joint venture
between the Department of Industrial Policy & Promotion (DIPP), Government of India and FICCI and ‘Invitalia’ is the Italian National Agency for Inward Investment Promotion and Enterprise Development.

Sharma said, “This is the time for India and Italy to engage more than ever before. Prior to the recession that gripped the world, India grew annually at 9% consecutively for the past five years. Last year the Indian economy clocked a growth rate of 6.2% and next year hopefully we will do 7% and by 2011, we will return to the 9% growth trajectory.”

He said, India was today one of the fastest growing economies. This was possible to achieve “because of the dynamism of its people, the strength of its industry, the availability of skilled youth, strong economic fundamentals, a huge domestic market and a society which was governed by the rule of law.”

FICCI and Italian business organisations signed three other cooperation agreements at the ‘Forum Italy-India’. These include: MoU between FICCI and Italian Institute of Foreign Trade, FICCI Arbitration and Conciliation Tribunal (FACT) and the Chamber of Arbitration of Milan; and Invest India & SIMEST.

Sharma said Indian industry had seen exponential growth across sectors, especially in manufacturing, automobiles, engineering, pharmaceuticals, design, apparels, gems and jewellery. Italy, which was known the world over for its SME success story was a global leader in fashion, design and there was great scope for the SMEs of the countries to collaborate and cooperate by way of joint venture and technology transfer.

The Minister said, in the next 10 years, India’s infrastructure sector would absorb $ 1.5 billion. This provided a good opportunity for Italian expertise to cash
in on the huge Indian market.

car sales in Europe rose by 26.6% in November 2009 compared to a drop of 25.8% in the same month last year. Sales were down 2.8% in the 11 months of 2009, according to the European Automobile Manufacturers Association (French: Association des Constructeurs Européens d’Automobiles; abbreviated ACEA). Only 520 units were sold in Ireland in November and sales were down by 62.3% year to date.

The ACEA said  contrasting performances in Western Europe (+30.6%) and the new EU Member States (-16.7%) reflected the impact of public financed car scrappage schemes in a number of main Western European markets.

New registrations amounted to 1,182,082 units in the month. From January to November, the market for new cars shrunk by 2.8%, composed of -0.7% in Western Europe and -27.4% in the new EU Member States, adding up to a total of 13,406,382 new vehicles registered.

Chinese automobile manufacturer, Haima, is set to enter the United Arab Emirates (UAE) market.

This follows a tie-up between the company and Abu Dhabi-based First Motors, a subsidiary of Bin Omeir Holding Group.

“We believe that UAE has a lot of potential and is looking at the mid-income segment,” said Fred Huang, Haima Automobiles general manager.

Haima started exporting its cars in 2007 and its sales network now covers the Middle East, North Africa, eastern Europe, South America and Southeast Asia.

It will be introducing six new models during the Dubai International Motor Show from Dec 16 to 20.

Domestic sales of automobiles for November grew 46 per cent, to 1,037,133 units, over the corresponding period last year.

The Society of Indian Automobile Manufacturers (SIAM), which released the figures said the sales were the highest for the current year. The second highest sales growth was in August when the industry sales grew by 24 per cent. Barring single digit growth in May and September, vehicle sales since April 2009 has been in double digits, it said.

November numbers rose on the back of record sales of passenger vehicles comprising cars and utility vehicles, and from the positive growth, for the fourth consecutive month in sales of medium and heavy commercial vehicles.

“Apart from the strong recovery made possible by the fiscal stimulus packages and improving sentiments, November sales was aided by the disbursement of the balance amount stipulated under the Sixth Pay Commission for PSU employees. The payouts will continue until December, so there will be growth going forward,” said S Ramnath, vice president (research) of IDFC SSKI. Attractive interest rates on vehicle loans by public sector banks also contributed to the surge in sales.

November sales of passenger vehicles grew an impressive 66.54 per cent. The industry sold 166,653 units of vehicles. “November car sales are the highest ever for this year and have come on the back of a low base of last year. All segments of the passenger vehicle sector have posted the highest growth on a year-on-year basis,” said Shashank Srivastava, Chief General Manager (Marketing) of Maruti Suzuki.

Large commercial vehicles sales, which turned positive in August held on to the trend. While October sales grew 64 per cent, November sales of large trucks and buses grew a whopping 132.66 per cent. The industry sold 19,369 vehicles against 8,325 last year. Last year was a low base in which the segment dipped between 50 and 70 per cent in the last quarter. Much of this growth for the last four months is directly linked to GDP growth and massive infrastructure spending by the government. “Truck operators who postponed buying last year citing freight overcapacity are returning to the market,” said Sugato Sen, Senior Director of SIAM.

Total sales of commercial vehicles for November, including smaller light commercial vehicles, stood at 40,847 units, which is 98 per cent growth against the number posted last year.

Two wheeler sales for November grew 39.31 per cent. The motorcycle and scooter manufacturers combined sold 790,613 units. Three wheeler manufacturers sold 39,020 units of goods and passenger vehicles last month, which is 68.45 per cent growth on a year-on-year basis. Much of this growth has come from autorickshaws.

“Going forward we expect the same trend to continue till March 2010. Rising interest rates can, however, play spoilsport,” said Srivastava. “Should stimulus packages be withdrawn prematurely, future sales growth will get affected,” said Sen.