China Rolls Out New Green-Vehicle Subsidies and Awareness Campaign

China Bustle and Street TrafficChina’s urban air quality has long been a source of concern for China’s government and citizens, as the country’s relatively environmentally unregulated factories spewed harmful emissions into the air. Now that the country has become the global leader in annual light-vehicle sales—and the number of light vehicles in operation has exceeded 120 million units, more than triple the number from 2000—China’s air quality challenges are an even greater concern.

Early this year, air pollution in China’s major cities, such as Beijing, was so challenging that residents stocked up on face masks and air purifiers. This kind of smog incidence is partly behind several modest programs that China’s government administrators rolled out recently.

These include another incentive program for buying fuel-efficient vehicles and a “No Car Day” campaign to help curb increasing levels of vehicle pollution in large cities, according to news reports in The Wall Street Journal and China Global Times. Continue reading ›

Shorter Delivery Times in Japan Increases Sales Satisfaction Levels

Kimoto Taku NEW_C_Lg

Taku Kimoto

Customer satisfaction with the new-vehicle sales experience in Japan has improved as delivery times are nine days shorter on average than in 2012 when there were longer delays in delivery due to the initiation of an eco-car subsidy program, according to our 2013 Japan Sales Satisfaction Index (SSI) Study.

This year, the average time for delivery to buyers of non-hybrid vehicles declines to 28 days from 34 days in 2012, and the delivery time for hybrids drops by 23 days and averages 50 days instead of 73 days. Among Japan’s domestic brands, Toyota—the largest seller of hybrid vehicles in Japan—and Honda, which had its production in 2012 negatively affected by flooding in Thailand, achieve notable reductions in delivery times. Continue reading ›

China Continues to Restrict Auto Sales to Curb Smog Levels

Tim Dunne

In order to reduce traffic congestion and pollution, China has been curbing new passenger-vehicle sales in mainly Tier I cities—Beijing, Shanghai, Guangzhou and Guiyang—by limiting the number of license plates issued and selling them to consumers through auctions and lotteries.

Recently, the China Association of Automobile Manufacturers said it hopes to . . . Continue Reading China Continues to Restrict Auto Sales to Curb Smog Levels

Chinese and U.S. EV Makers Face Good News and Challenges

EVSymbolIn recent months, several China-based electric vehicle makers have been making headlines with announcements of new EV contracts in the U.S. market, while several U.S. EV makers, based in California, have been facing new challenges.

Additionally, in May, Tesla Motors made an offer to raise capital and also paid off its government loan, while Fisker Automotive may have another chance to survive with news of a possible purchase bid from several suitors.

Meanwhile, Chinese vehicle maker BYD Automotive Co., which boasts Warren Buffet as a major investor, recently signed a contract in the United States with the city of Long Beach in California to build 10 electric buses at a former RV facility in nearby Lancaster, CA. This arrangement allows BYD (Build Your Dreams) to take advantage of buy-American subsidies for electric vehicles and public transportation. BYD reportedly has made 1,000 electric buses, most of which operate in China, and has completed a pilot program with Hertz, according to the company. Continue reading ›

Who is the Winner? EVs or Flex-Fuel Vehicles and Biofuel?

bangkok-thailandIn looking at the future of alternative fuel vehicles—principally electric vehicles (EVs)—in the Thai market, it appears that the only push for promoting EVs is coming from the Electricity Generating Authority of Thailand (EGAT). In fact, the only comprehensive study on EV use in Thailand has been conducted by EGAT, which suggests that shifting electricity generation at power plants for use in electric vehicles would improve plant efficiency. However, can this alone be the driving force for consumers to move to purchasing EVs? The answer is an emphatic ‘No.’

Thailand’s Future Energy Plans Focus on Biofuel

A major obstacle in transitioning to EV use in Thailand comes in the form of the government’s Alternative Energy Development Plan (2008‐2023), which clearly shows that planned energy output to serve the transport sector for the next decade will be provided by biofuels, not electricity.

Thailand has an abundant supply of sugar cane, which can be processed into ethanol. Ethanol is an alcohol-based fuel made by distilling and fermenting crops, such as sugar cane, and more experimental sources such as cassava and molasses. Continue reading ›

Honda Goes After Share in India with Diesel Entries

Honda Group is getting ready to renew its competitive position in India’s passenger-vehicle market by introducing a slew of diesel models, starting with the soon‐to‐be‐launched Amaze sedan and Brio hatchback.What’s notable is that most Honda models will be equipped with a diesel engine. The only exceptions may be the Civic compact car and Accord midsize sedan.

Ammar Master

No doubt, Honda expects sales to improve in a big way with the launch of its diesel versions. However, LMC Automotive is more cautious since the government has sent a strong signal towards eventual deregulation of diesel prices in India. Admittedly, India’s government has not announced a price increase in diesel fuel, but it has put the onus on oil marketing companies to raise rates gradually in small proportions to bring them in line with global prices. As a result, the 40% price difference between petrol (gasoline) and diesel will slowly change over the course of the next year.

Diesel Amaze and Brio Hatchback to Launch in India Market

Having said this, we agree that having a diesel option is a must in India. Honda, therefore, is on course to correct a major disadvantage in India. We think combined sales of diesel versions of the Amaze and Brio models could make up about 60% of overall volume. Continue reading ›

J.D. Power Asia Pacific Expert Considers Aftermarket Drivers in India

MohitArora

Mohit Arora

Earlier this year, the Competition Commission of India (CCI) served notice to 17 automakers in the country for what the Commission termed to be anti-competitive practices. The charge was that these automakers hold restrictive control on the sales of spare parts to their authorized service networks which, in turn, means high prices to consumers. Mohit Arora, executive director of J.D. Power Asia Pacific, addressed the current situation in an article that was published in Japan’s Nikkan Jidosha Shinmbun (Daily Automotive News) recently. The article, “Drivers of a Vibrant Aftermarket in India,” is excerpted:

“Under India’s CCI ruling, the 17 carmakers will be forced to supply parts in the open market and may have to limit sales to their own dealerships. There are key questions that the industry must face if this ruling holds.

• If this happens, would the authorized networks in the Indian automotive industry be ready to embrace a deregulated aftermarket industry akin to mature markets like the United States, Europe and Thailand?

• Can the two networks survive alongside each other profitably?

• How is consumer behavior likely to change once a reasonable aftermarket option is available to them? Continue reading ›

India’s New Budget May Hamper Local and Foreign Automakers

Much to the chagrin of the auto industry in India, the country’s Finance Minister P. Chidambaram in his 2013 Budget raised duties for utility vehicles (SUVs and MPVs) and fully-imported luxury cars.

India02The changes mean that excise duties for SUVs and MPVs were increased from 27% to 30%, excluding vehicles that are registered as taxis. In addition, India’s government now defines utility vehicles to be over four meters in length (slightly more than 13 feet or 157.5 inches); with 2.5L engine capacity and a ground clearance of at least 170 mm (6.7 inches).

This definition, especially the new criteria for ground clearance, also will subject certain passenger cars, including the Honda Civic and Maruti Suzuki SX4 to the higher duty, while at the same time allowing utility vehicles like Mahindra’s Quanto or Renault’s Duster to be taxed a lower rate.

In preliminary analysis of this change in the taxes, the SUV sales forecast for 2013 may be cut by up to 5%, although the long‐term outlook for the segment remains positive. The only silver lining is that upcoming compact SUVs (of less than four meters) may help offset some of the impact of this new higher excise duty on larger vehicles. Continue reading ›

Will Asean Become Major Market for Parts Makers in India and China?

Ammar Photo

Ammar Master

The realization of the Asean Economic Community in 2015* presents opportunities and challenges in the changing automotive landscape of the Southeast Asian region.

Foremost, a successful Asean integration will support the long‐term goal of creating a region with free movement of goods, services, investment, and skilled labor, in addition to a freer flow of capital. This in turn is likely to lead to faster economic growth and an ever‐expanding middle class.

May Arthapan, director of Asia Pacific forecasting at LMC Automotive in Bangkok, indicated in an aptly titled recent presentation that Asean could well become “Another BRIC in the Wall,”** given the region’s emergence in Asia. Not only are there opportunities for vehicle makers to expand sales in a big way, but component makers also are going to benefit from increasing manufacturing activity in Asean countries, led by Thailand and Indonesia.

Japan’s Suppliers Have Long-Term Presence in Southeast Asia

Japan’s component makers have had a long-established presence in the Asean countries, and will clearly be the biggest beneficiaries. However, there are also opportunities for companies in India and China. These companies have been eyeing the Asean region as a new market for a while. This has been evident from increased participation, especially by companies in China, at Asean region trade shows.Yet, component makers from both nations have been wary to enter unfamiliar territory and face strong Japanese competition. Continue reading ›