Blog: Dave LeggettUnder pressure

Dave Leggett | 12 August 2005

There were a couple of signs this week that the competitive landscape will continue to hot up in the long-term in both North America and Western Europe. The pressures on the established players from new and growing recent entrants will only intensify.

In North America it emerged that Kia could be looking to open up a new manufacturing plant to underpin its market success there. That would be in addition to parent Hyundai Motor’s Alabama plant. Nothing is confirmed, but it would appear that the lobbying to get the plant has already started. Hyundai and Kia are rapidly filling model lines and the US market is clearly in the Koreans’ crosshairs.

SOUTH KOREA: Mississippi governor lobbies Kia for car plant in his state

Ford and GM also have to contend with the problems presented by the severe financial problems afflicting Visteon and Delphi, as well as other squeezed suppliers. Vehicle manufacturers can only go so far in extracting price concessions from their suppliers and they cannot allow their major suppliers to go under.

Many in the industry met the latest round of predictably terrible financial results with an air of resignation. I guess news will emerge soon of a Visteon-style bailout plan for Delphi too. The latest results should at least serve to concentrate minds.

USA: Delphi reports $US338 million Q2 loss

USA: Visteon loses $US1.2 billion in second quarter

On this side of the Atlantic news broke of a plan by Opel dealers in Germany to sell a Chinese-made SUV, Jiangling’s Landwind. Well, Opel has lost quite a bit of share in Germany over the past decade or so, so the dealers there can perhaps not be blamed for taking up the deal – all apparently brokered by an ambitious young Dutchman. The first batch of Landwind SUVs has already landed at Antwerp. And with Block Exemption rules in Europe now loosened up, GM is legally powerless to prevent its dealers from doing this. I expect it will have caused more than a few furrowed brows in Russlesheim and Zurich though.

Plenty of people will be watching to see how that operation progresses, I’m sure.

GERMANY: Opel dealers to sell Chinese carmaker's SUV


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