First Chinese Car Goes On Sale In North America
For years, we've reported several Chinese automakers' intentions sell cars in North America. Producers like Brilliance, Chery and Geely made it clear they want a presence in the market.
Even electric-car startup Coda looked like a lock for first Chinese car on sale here, until they stressed final assembly would take place in California.
It's rather a moot point, since the first Chinese car is now on sale here in North America.
Before you look for newly-opened showrooms from the aforementioned manufacturers, The New York Times suggests you look instead to Honda dealers--in Canada. As of this month, Honda Canada's incoming Fit inventory comes from the same Chinese plant that builds them for Europe and other markets, where the cars wear the Jazz badge.
Reasoning behind the shift is simple: it's all about the Yenjamins. The yen is strong and profit margins aren't as thick as Honda would prefer. Offshore production will shore that up. But since Honda's new $800 million plant in Celaya, Guanajuato, Mexico won't be online until 2014, this is the stop-gap solution.
Meanwhile, our curious Canadian friends can confirm a new Fit's place of birth with a quick peek at the VIN. Chinese cars' IDs begin with "L", while Japanese models' are "J". Will they detect any differences otherwise?
And will the Chinese cars go to U.S. dealers?
"L" no, says Honda.
This story originally appeared at The Car Connection
Ford Slides, As Jeep Gains Traction As Most Reliable Domestic Brand
Ford has taken a significant tumble in reliability due to some of its latest vehicle technologies, while Jeep is now the most reliable domestic brand, according to the latest annual-survey data from Consumer Reports.
Both of those pieces of news might come as a bit of a surprise. Consumers have finally caught on to the excellent products coming from Ford [NYSE: F] nowadays; but it seems that some of the same features that might be drawing shoppers in are also negatively affecting reliability.
Consumer Reports points to issues with the MyFord Touch infotainment and connectivity interface—which the organization had already called “frustrating” and a “complicated distraction when driving”—and also points to issues with the new PowerShift automated manual transmission used throughout the 2011 and 2012 Ford Fiesta and Ford Focus lineups.
MyFord Touch had already been blamed for Ford's plunge in J.D. Power Initial Quality Survey (IQS), earlier this year. So far, MyFord Touch and its sibling system, MyLincoln Touch system, have been installed in the Ford Edge, Lincoln MKX, Ford Explorer, and Ford Focus; but versions of the system are due within the next year for many more models in the Ford lineup, including the 2013 Ford Taurus.
Jeep, on the other hand, was bolstered by good reliability indications so far for its redesigned Grand Cherokee SUV. That's a significant achievement, as the previous-generation Grand Cherokee, as well as others before it, carried unimpressive reliability records.
The annual Consumer Reports reliability results were revealed today at an Automotive Press Association lunch in downtown Detroit. They're based on responses to the Consumer Reports 2011 Annual Auto Survey, for 1.3 million vehicles owned or leased by CR subscribers.
Meanwhile, as Ford sees some technology teething pains, Chrysler vehicles are finally doing better, reports the organization. Jeep has become the most reliable domestic brand, moving up seven spots to 13th overall. Chrysler jumped 12 spots—with a 'well above average' rating for the Chrysler 200, so far, bolstering the brand's showing—while Dodge improved its ranking by three, aided by the Durango.
GM slips, somewhat
GM also took a tumble in reliability, but not nearly as much so as Ford. CR cites the Buick LaCrosse, Buick Enclave AWD, and Cadillac SRX as examples of vehicles that had been at least average last year but are no not recommended. Additionally, the Buick Regal and Chevrolet Cruze, two all-new models introduced in the past year, landed below average in reliability.
Saab Ends Deal With Pang Da & Youngman: The End Is (Probably) Near
Saab fans, we have some bad news: the automaker has cancelled its agreements with Chinese firms Pang Da and Youngman. As a result, Saab's future seems a little dimmer and grimmer.
If you've been following this story, you know that Pang Da and Youngman have been the only investors willing to give Saab the funds it needs to survive. (North Street Capital agreed to loans and equity swaps worth $70 million, but that won't keep the company afloat for long.) In total, Saab's Chinese suitors have been planning to offer the automaker $335 million in exchange for a 54% stake in the company.
In recent weeks, though, Pang Da and Youngman have begun quietly backing away from the deal, and their disinterest has not gone unnoticed. Today, Saab's parent company, Swedish Automobile, officially ended the Subscription Agreement into which the three entities had entered, meaning that Pang Da and Youngman's cash is no longer an option.
That said, Pang Da and Youngman haven't completely walked away from the table. In closed-door talks last Wednesday and again on Saturday, the two made a counter-offer to purchase 100% of the company. Saab has not released the details of those offers, but both were declined.
So where does this leave Saab?
Pang Da and Youngman's interest in Saab seems to be all-or-nothing. Our guess is that they aren't interested in being part-owners of a struggling company, but they wouldn't mind taking over Saab entirely to retool it in their own image.
Saab says that talks with Pang Da and Youngman are "ongoing", but from where we sit, there doesn't appear to be much room for discussion. And even if there were, Chinese authorities would still have to authorize the investment -- a scenario that looks highly unlikely, according to numerous sources.
That leaves Saab in the middle of a reorganization, with little cash to keep it afloat in the medium- and long-term. Worse, the man in charge of overseeing that reorganization, Guy Lofalk, has a very dim view of Saab's prospects, and on Friday, he asked Swedish courts to put an end to Saab's reorganization plans. Victor Muller -- the man who bought the company from GM last year -- plans to fight Lofalk in court, but given the fact that said court already rejected Saab's petition for bankruptcy protection just last month, we're not so sure that Muller will prevail.
So in sum, Saab hasn't produced a vehicle in six months, it's unlikely to get any cash from its Chinese investors, and it might not be allowed to reorganize. The company may, indeed, be nearing the end of the tunnel, but that bright, white light probably isn't the sort of exit Saab was hoping for.
This story originally appeared at The Car Connection
Swedish Court Denies Bankruptcy Protection For Saab
Swedish Automaker Saab has been denied bankruptcy protection by a district court in southern Sweden. The decision opens the door for both labor unions and creditors to proceed with bankruptcy filings against the automaker.
The Vanersborg District Court denied Saab's filing for creditor protection, saying it was unclear how the automaker would secure the funding necessary to ensure continued operations. Saab had claimed some $351 million in committed funding from Chinese partners Pang Da and Youngman, but both deals were dependent upon Chinese government approval. As with the failed acquisition of HUMMER by a small truckmaker, the Chinese government has shown reluctance to allow domestic firms to partner with outside manufacturers, as it goes counter to their desire to create a handful of Chinese automakers who can compete with companies like Toyota and GM on a global basis.
The next step is up to the labor unions, whose employees have not been paid since July. It's expected that they will pursue bankruptcy filing against the automaker to recover lost wages, and other creditors will likely follow suit. We'll keep you posted on this breaking story, but the future of Saab looks very bleak at the moment.
This story originally appeared at The Car Connection
Chinese-Made Cars Edge Closer to the United States, Via GM
The U.S. auto industry has long feared an onslaught of cheap cars from Chinese brands like Chery, Geely, and BYD.
But it's more likely that established global automakers will be the first ones to bring Chinese-made cars to the Americas.
The United States market poses tricky political problems for selling a Chinese-made car, but that hasn't stopped General Motors from exporting a Chinese model to South America.
Yesterday, Shanghai GM--a joint venture between the Chinese SAIC Motor Corp. and General Motors--sent the first Chevrolet New Sail models to Chile. The model, introduced last January, costs as little as $8,500 in China. The company plans to offer it in other South American countries, as well as northern Africa and some Middle East countries as well.
The Chevy New Sail is "the first locally developed and manufactured passenger car from an international brand to be exported," said Terry Johnsson, Shanghai GM vice president of vehicle sales, service and marketing, calling the car a "breakthrough" in the company's strategy to export products originally designed for the Chinese market.
Honda was the first global automaker to export a Chinese-made model: It began sending Honda Fit subcompacts to certain left-hand-drive European markets (where it is sold as the Jazz) in June 2005.
And the U.S. arrival of those cheap cars from Chinese makers? It may be a long time coming.
The Chinese auto market--already the largest in the world--is growing rapidly, with pent-up demand from families and an emerging middle class who view vehicles as a status symbol. Local carmakers may find it easier and more profitable to satisfy booming demand at home than to export halfway around the world.
Unlike English, German, Japanese, and Korean manufacturers before them, the domestic market may be more than large enough to satisfy the lofty growth aspirations of Chinese automakers.
Moreover, the U.S. car market is the most challenging in the world. Selling cars in the U.S. would be prestigious for a Chinese brand, but sky-high consumer expectations for quality, durability, and maintenance intervals, combined with fearsome safety and emissions regulations, make entering the U.S. a huge and costly challenge.
With first-time car buyers in China unlikely to be particularly critical or discerning, and seemingly limitless growth at home, Chinese makers may decide the U.S. market is one they can ignore for a while--if not completely.
[Reuters]
This story originally appeared at The Car Connection
