Japanese Auto Manufacturing Growth
Japanese auto production rose 3.9% in April from a year ago, marking the sixth straight month of gains. Vehicle output increased to 904,821 vehicles in April, according to the Japanese Automobile Manufacturers. Exports of cars, trucks and buses improved 10.6% from one year ago, making the ninth straight month of gains.
VW and GM Announce Agreements with Russia
Russia signed an agreement with Volkswagen for a car production plant Monday and moved closer to a deal with General Motors (GM) as foreign auto makers continue to boost their operations in a nation whose emerging middle class is shunning domestically designed models.
Volkswagen AG's chairman Bernd Pischetsrieder signed an agreement with Trade and Economic Development Minister German Gref to build a nearly $510 million, 115,000-vehicle plant in the city of Kaluga.
According to the Trade and Economic Development Ministry, the German carmaker will initially spend $345 million on the plant, with a further $128 million to be invested to launch full-scale production. Construction is to begin in August, she said.
GM vice president Carl-Peter Forster has signed an agreement on a project for a car production facility in Russia. However, a GM spokesman said the document was one of several that would be needed to reach a deal and that discussions were continuing.
The proposed plan calls for GM to invest $115 million in the initial stage of the project and that construction would begin in June.
GM was an early major foreign investor in Russia's automobile industry, launching a landmark $340 million joint venture with Soviet-era manufacturer AvtoVaz in the city of Togliatti in 2001.
Nissan Sales Drop Sharply
A senior Nissan executive acknowledged Monday that the recent plunge in the automaker's sales in Japan was worse than expected. The company was considering increasing its lineup of tiny cars in response.
Under an agreement with Suzuki Motor Corp., Nissan sells Suzuki-made minicars under the Nissan brand.
Nissan's sales in Japan in April totaled 34,679 vehicles, down 27% on-year. Including minivehicles, which have engines up to 0.66 liter and must be below certain dimensions, Nissan's sales in Japan fell 18.5%.
Nissan, Japan's second biggest automaker, faces tough competition at home and abroad from Toyota Motor Corp., No. 1 in Japan and No. 2 in the world, and Honda Motor Co.
Daewoo is GM's Bright Spot
General Motors Corp.-owned Daewoo is showing gaining improvement in the normally tough South Korean market. GM purchased Daewoo Motor in April 2002 for $1.2 billion.
The successor company, GM Daewoo Auto and Technology, is now a bright spot for GM, which is struggling with declining market share in the United States and a burdensome legacy of benefit obligations.
GM's ability to thrive in South Korea is surprising; given the country's general hostility to foreign businesses. But GM's decision to rehire all 1,600 workers laid off by the old Daewoo won respect. GM's reputation was further enhanced in October when it bought a Daewoo plant that can produce 400,000 cars a year, which was not part of the original acquisition deal.
Analysts believe Daewoo is providing GM with the ability to quickly develop and produce small, price-competitive cars. This type of market is in heavy demand, not only in the United States, but also in China and other emerging markets.
Last year, GM Daewoo sold 1.16 million cars, more than double the number a year earlier. In the first four months of this year, its sales increased 53%, to 476,000 units, surpassing Kia Motors as South Korea's second-largest carmaker, after Hyundai.
Daewoo produced 32% of all GM cars sold last year in China, the company’s second-largest market after the United States. Chevrolet sales in Europe grew 26% last year; all based on GM Daewoo products.
Visteon to Produce Parts in Slovak Republic
Visteon Corporation has begun producing automotive components at its new manufacturing plant in the Slovak Republic.
The facility manufactures interior and climate control products and gives Visteon a manufacturing base to serve the rapidly expanding automotive market in Slovakia and Eastern Europe. The plant supplies door panels for PSA Peugeot-Citroën's new Peugeot 207. Later this year, the facility is scheduled to begin producing climate control components for the Kia Accent .
The plant houses injection molding equipment and is designed for in-sequence production and shipping of door panels to PSA Peugeot-Citroën's assembly plant in Trnava.
The company is preparing for the opening of another manufacturing facility in Slovakia - located in Dubnica. Scheduled to start production in December 2006, it will be a smaller facility designed to deliver climate control components on a just-in-time basis to Kia. Visteon expects to employ up to 400 people in Slovakia when the facilities reach full capacity in 2007.