- The automotive business blog -
David Leggett's unique web log on the global automotive industry, key events, people and his own daily experiences. If you would like to offer your comments, opinions, suggest topics or just have a good rant, please feel free to email: David Leggett. |
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BMW in Russia
19th November 2009 15:32
BMW's sales and marketing man Ian Robertson was characteristically upbeat yesterday at the annual BMW press dinner (at Claridge's in London; good opportunity to catch up with a few people). He talks a good game. BMW reacted early to the downturn, he says, by cutting production and that has left it in good shape for the downturn. And it's doing well in the places that are growing, especially China and India.
I got the chance to ask him about the Russia market after dinner. He reckons there could be a sharp rebound and that he's hearing optimism that it could come back pretty quickly when things start to improve next year.
It's a tough place for all this year though, and the latest market data gave little cause for cheer for anyone. Mind you, BMW brand sales are only down 16% at 13,200 units in the first ten months - in an overall car market down 51%.
Another talking point on the night was BMW's sponsorship of the London 2012 Olympics. There was much speculation on which other OEMs would have seriously bid for that 'Tier One Automotive Partner' position and also who might have been most crestfallen not to have been successful. One or two might have thought that the idea of a fleet of hybrids moving athletes around would have been a winner...
UK: Olympics ice the cake as BMW weathers the economic storm
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Green Cross Code? Tufty club?
19th November 2009 14:36
I guess we've moved on from the days when kids could be given simple messages about how to cross the road (the few that is, that get the chance to actually use their legs and mental faculties to walk from one place to another and not glide above it all from the rear of an SUV or minivan). Yep, it has to be more sophisticated now if you really want to connect with da kids. So the UK government has commissioned an online game that is heavy with metaphorical messages about the need to be careful when crossing things. I guess it all helps, so I applaud the initiative. Here's hoping that it makes a connection with the young children it's aimed at (and that they are not all way too busy with the latest Call of Duty). While we're on the subject, is the Green Cross Code man (the original guy, I believe, also donned Darth Vader's cloak and mask in Star Wars) still going? And what happened to that amiable and wise squirrel called Tufty?
http://codeofeverand.co.uk/?page=main
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Can Brussels broker a deal?
18th November 2009 15:00
I think I said just after GM had decided to hang on to Opel/Vauxhall rather than offload to Magna, that the politics is far from over.
GM's acting head of European ops Nick Reilly is clearly doing the rounds with a begging bowl to see what state aid/loan guarantees are going to be forthcoming from national European governments where there are plants/jobs at stake.
He appears to have pressed the right buttons in the UK, but that was always a case of pushing at an open door given what went before when Magna was in the Opel frame.
Affable Nick, an ex-Vauxhall man, saves the day and gives a slightly desperate British government a small crumb of positive industrial/economic PR. Sounds like he knows how to choose his words very carefully. There's 'a chance' to save more jobs at Vauxhall than under the Magna-led proposal. It's all mights and maybes, the unions and workers no doubt wondering where it could yet all end up.
And no, he says, turning to a broader European audience, we don't want an unseemly beggar-thy-neighbour 'bidding war' with national governments on state aid that could end up upsetting Brussels again. Well, actually maybe we do want that because we're happy for European taxpayers to give us a helping hand and the bigger the better, but we don't want Brussels then stamping all over it on competition grounds.
Hang about, maybe we can get Brussels to act as an honest broker for a collective deal that still gives us pretty much what we want? I'll just carry on fanning the flames for a little while longer by emphasising the importance of state aid and stressing that nothing is yet cast in stone. Let's keep those cheque-books nice and handy.
Yes, as the EU says, economic criteria is very important. But we seem to be very much in the realm of politics and there's still a lot to be decided. Don't be surprised to find that 'affable Nick' was not all that he seemed. Someone somewhere isn't going to like that new Opel/Vauxhall business plan when it finally emerges. Will that plan adhere 100% to business principles or will there be signs of political fudging?
And can Brussels actually broker a deal of some sort next week? Maybe all sides should realise that now is the time for consensus and for GM's European business to be given a chance to be run as a business.
EU: EU to host Opel/Vauxhall meeting
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Happy Birthday Disco...
16th November 2009 18:05
Land Rover's Discovery was launched twenty years ago today. So, just after the Berlin Wall had come down enabling half of Europe to stretch its legs in unfamiliar territory, us Brits could tackle the tricky terrain of the Tesco car park in a Land Rover that wasn't designed for ease of mucking out (Defender) or as an accessory for the affluent county set (Range Rover). And it did indeed help to define a rapidly expanding mid-range SUV segment.
Here are a few lesser known Disco factoids with which to impress your friends:
- The first Discoverys shared their headlights with the Freight Rover van, and shared their rear lights with the Austin Maestro van. Very early examples were built with tail-lights carrying the Austin-Rover logo.
- Among the options of the first Discoverys was a shoulder bag trimmed to match the seats of your vehicle which could be attached to the centre console. These bags now command quite a high premium with Land Rover enthusiasts, Land Rover says. Nice.
- The original project code name for Discovery was Project Jay. This was because of the naming policy put in place by Alan Edis to enhance prototype secrecy – projects were named in alphabetical order, following bird and animal themes.
- Discovery was the first Land Rover programme to fully utilise CAD technology. The exterior of the Discovery was fully surfaced in CAD to enable prove out models and tooling to be created. The interior was created in a wire frame format in CAD.
Market feedback at design stage
13th November 2009 18:03
I came across an interesting exercise by Audi earlier. It tapped into its facebook community for thoughts on the design of cars being produced as part of a competition. Apparently, the feedback from people who cared about the brand enough to be a part of the Audi Facebook community was pretty useful. I know it was only a competition, but is this a precursor to something like that maybe happening on real designs? Who's going to be first? It is probably something that you would want to manage very, very carefully though (how many BMW owners back in 2001 would have given Bangle the thumbs-up for the 'Bangle-butt' on the new 7? - some designers may not be too keen on this sort of thing).
One other thought - this design competition thing that the LA Show organisers do ahead of the show is a shrewd move. I can recall past competitions; there is usually something to grab media attention because brands like Audi sense a fairly easy PR opportunity and a way to deliver some creative fun for young turks in the design department.
It also pretty effectively lets people know that the show is coming in a way that no number of email mailshots can. Would the LA Show organisers now like to email me concerning my complimentary flight (from London) and lodging arrangements - thanks.
US: Audi utilises social media for LA design competition
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Converting ICE cars to EVs
12th November 2009 17:19
I can see why Iceland might work well for electric vehicles. The population is not huge and it's fairly concentrated. I believe they generate their electricity from fully renewable sources – mainly geothermal. They are sitting on a lot of hot rock. The economy is bust, but maybe that would help to make them very interested in importing less oil.
So the deal REVA has done with a local company that will help with charging infrastructure is maybe not all that surprising.
But what about this element? 'In addition to importing new EV models to Iceland, NLE is also working on developing systems to convert the current internal combustion engine (ICE) car fleet into Electric Cars.' The mind boggles. They certainly don't lack ambition over there.
Disposing of all those replaced ICE engines for the whole fleet might be tricky. Not much of an aftermarket. There could be unwanted stockpiles of the things forming, like little terminal moraines, just outside Reyjavik, an unsightly reminder of a dirtier automotive age. Maybe that's why the place is called 'ICE-LAND' (sorry).
To be serious for a second, anyone out there got thoughts on this sort of conversion work at volume and making it commercially do-able? Sounds like a non-starter but I have been around long enough not to necessarily discount anything, however outlandish sounding.
ICELAND: Northern Lights Energy and REVA sign agreement
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Porsche defends Cayman
11th November 2009 8:38
Here's a strange one I have come across. Porsche is apparently aggressively defending the 'Cayman' trademark. As well as being a Porsche model name, the name is also in use by a firm that makes those funny plastic sandals with holes in them - Crocs. Sounds like a few lawyers will be racking up the fees. Follow the below link for more.
Top marks to the person who posted this caustic response to the Porsche action:
What people/lawyer/companies tend to forget, is that a trademark does not remove a name or word from being used in the English language (or any other for that matter). Will Porsche bring suit against Grand Cayman and the rest of the Cayman islands? What about the amphibious Cayman, can you sue an animal?
Yes, maybe they should take a step back and just relax a bit over such trademark use over at Zuffenhausen. If they want to get all worked up in the legal dept., there are probably more important fish to fry, you would think.
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Ford and Volvo Cars
10th November 2009 10:40
Seeing the just released pictures of the new S60 this morning has got me thinking. I wonder if Ford may decide to hang on to Volvo Cars after all? Why? Because it is a valuable asset and maybe, just maybe, some at Ford will take the view that there is now no need to sell it (Ford making good turnaround headway lately), that Volvo can be returned to profitability on a reasonable timescale and that ultimately its technology specialisations and engineering architecture sharing with Ford make it preferable to hang on to it.
The brand's supporters in Dearborn may feel that the situation has changed now that Ford is on a more solid financial footing and automotive demand prospects globally are looking up.
Volvo is also a highly respected global premium brand. Exchange rates and unfavourable model cycles - as well as market geography and the recession - can explain a lot of what's gone wrong with Volvo profitability in recent years.
I am just speculating, of course. When I met with Mr Mulally recently, he was pretty enthusiastic about One Ford and the rationale behind focusing on a core brand. Fair enough; it has delivered results. And that was a very good bit of business offloading JLR for a few billion just before the recession hit. Along with the assets mortgaging, he seems to have a good sense of timing on the big financial transactions. I asked him about Volvo. He gave a straight bat answer and a few days later Ford said Geely is a preferred bidder.
This is what Lewis Booth said in a statement at that time: "Any prospective sale would have to ensure that Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core 'One Ford' strategy.”
"Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand. But there is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions."
Much work to be done, eh? I bet.
Mr Mulally also highlighted the fact that Ford has continued to invest in Volvo – as evidenced by the new S60.
So sell the brand and technology to a Chinese firm or hang on and realise a return from all that investment in a 'soft premium' brand that comes with positive eco/safety values and potentially very good margins. We are at the low point in the economic cycle. In five years time, hanging on to Volvo might look like another smart bit of business.
I wouldn't mind betting that Ford could 'do a GM' and say it has decided to hang on to Volvo Cars after all. But what's the mad rush? A few more months of uncertainty in Gothenburg before finally and dramatically 'coming to the rescue' might also yield plenty of goodwill from both workers and management in Sweden (not to mention the Swedish government). Swedish stakeholders may well conclude that it is 'better the devil you know'.
For Ford, talking to Geely in advanced discussions over Volvo might uncover some interesting insight into its strategic aims, also. Bonus points.
As I say though, and to be absolutely clear, I am only speculating.
SWEDEN: First images of all-new Volvo S60
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Still fragmented Europe
10th November 2009 10:02
Following GM's decision last week to hang on to Opel/Vauxhall rather than sell to a consortium led by Magna, the fallout continues. But the fallout is not exactly unexpected. After the initial and predictably strong political reaction, especially in Germany, there's the realisation that people have to deal with a new set of circumstances to get the outcomes they want - or the 'least bad' ones.
Restructuring was coming down the tracks anyway, whoever eventually owned Opel/Vauxhall. Is GM's plan going to be much different from what Magna was preparing? The differences are maybe less than many people were thinking. Magna was playing the politicians to some degree, to win support for its bid in Germany. It played that game very well.
And now, GM will be looking very carefully at how it approaches relations with national governments in Europe, especially Germany, where half of Opel/Vauxhall 50,000 strong workforce is based. Be careful not to take all of what you see in the press at face value.
If you were at GM and planning to visit Berlin soon to lay out a new business plan, you might want to stoke the cost-cutting fires up a bit before rocking up with a few olive branches for Mrs Merkel. Shut Bochum? No, where did you hear that? We just want to resize the plant for new market conditions and modernise it...
That things are so highly politically charged for GM is a consequence of having a multi-national footprint in Europe. The European Union, you see, is still - in reality - a rather fragmented place. There's a duality to the 'European project' that the Opel/Vauxhall saga has amply demonstrated. Sure, there's never been a shortage of grand designs and ideas aimed at consolidating European political unity - the Lisbon Treaty is the latest example - but when push comes to shove, competing national interests come to the fore.
What's best for Opel/Vauxhall from a business perspective has been rather lost in the political horse-trading on which plants and jobs might go under restructuring. Look across the EU and you'll see very big differences in the way countries are run, lifestyles, cultures, the way that economies function, levels of taxes and so on. Is that a good thing? In some ways yes, in some ways perhaps not.
But when fundamental national interests or jobs are at stake it's pretty clear that, in Europe, the business case for a particular course of action may be subject to a good deal of political interference coming from nation states.
GM does eleventh hour U-turn on Opel/Vauxhall sale
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Psst! Want an airbag?
9th November 2009 10:47
I have just read a curious item about an aftermarket trend in Malaysia. The Perodua Myvi is apparently being targeted by thieves after its airbags. The Malay Mail says it has learnt recently that syndicates have been stealing airbags, the single most expensive part in the car’s cabin - in order to resell them in the black market to unscrupulous parts dealers.
Customers can install 'second hand' airbags from unauthorised dealers that massively undercut official prices - RM1,000 instead of RM5,000 for a pair. The newspaper points out that there are dangers with these aftermarket airbags (probably procured from dodgy sources); they may not function, may deploy at odd times or could explode and injure the installer.
The report goes on to say that 'this thieving trend is that it is not difficult to do for those with the expertise'.
Thieves with the technical know-how could apparently open up the Myvi hood easily, short-circuit certain equipment and gain access through all the vehicle doors. From that point onwards, stealing the airbags is a breeze, the Malay Mail says.
Perodua has come up with a solution and has fixed anti-theft features on new cars coming out next year. Older models would, however, need to return to service centres for an upgrade. You'd think the thieves might want the whole vehicle, but maybe they have established a nice little 'closed loop' earner sticking with the airbags.
Your Comments
Airbag thefts have been pretty common in the US for years. Not at all unusual for a dealership to find multiple vehicles have had their airbags stolen overnight. Bodyshops with questionable scruples are able to pad their bottom line by charging the insurance company the price for a new airbag and then sub a stolen one.
Bob Boucher, United States
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What's this?
Your Comments
If I dial 911 will I get through to Porsche's lawyers?
Mark Fox, United Kingdom
If they win then Grand Cayman should sue Porsche for the winnings!
Fiona Macartney, United Kingdom