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December 7, 2009

Lee to Head GM International

As part of the latest job shuffling announced Friday at General Motors Co., Tim Lee has been appointed president of the company’s international operations. In his new job, Lee will oversee GM’s Africa, Asia Pacific, Latin America and Middle East operations.

Lee replaces Nick Reilly, who is now president of GM Europe. Lee most recently was group vice president of manufacturing and labor relations and was a member of GM’s North American Strategy Board. He also directed product and manufacturing planning for Isuzu Motors Ltd., when that Japanese company was affiliated with GM.

Lee began at GM as a student intern in 1969 and worked his way through a variety of manufacturing, labor relations and personnel positions.


U.S. Group Makes Rival Bid for Volvo

Zhejiang Geely Holding Group Co.’s bid for Volvo Cars has been challenged by a new offer for the Ford Motor Co. unit by the Crown Group, a U.S. consortium, according to The Wall Street Journal.

The American bidders are led by investor Michael Dingman. Citing unidentified sources, the newspaper says Crown’s bid is on a par with Geely’s roughly $2 billion offer.

Crown includes former Ford director Michael Dingman, former Ford executive Shamel Rushwin, ex-Volvo CEO Roger Holtback and Beijing-based merchant bank the Balloch Group.


PSC Mulls Return to India

Confirming media reports from this summer, PSA Peugeot Citroen SA says it is considering forming a joint venture in India to build cars there. The French automaker hasn’t had a presence in India since the late 1990s.

India’s Financial Express lists Caparo India, a unit of U.K.-based Caparo Group that makes body structures for Tata Motor Ltd.’s Nano microcar, as a possible partner. If approved, companies could ramp up a new $320 million plant in 2012 with an annual output of 6,000 vehicles, according to the newspaper.


BAIC Vows a Quick Decision on Saab

China’s Beijing Automotive Industry Holding Co. may partner with Merbanco Inc., a U.S.-based investment group, to buy the Saab Automobiles unit from General Motors Co.

BAIC had planned to acquire a stake in Sweden’s Koenigsegg Group in conjunction with that company’s bid to buy Saab, but the sale collapsed at the end of November. GM says it will decide by the end of the month to shut down the brand sometime in 2010 if it cannot find a buyer for the business.

The Bank of China said it provided BAIC with a $2.9 billion line of credit to help finance the Saab deal. Company officials last week told reporters that the Chinese company aims to make a decision by year-end.

Separately, Sweden’s Ny Teknik cites unidentified sources who say BAIC has purchased the tooling for Saab’s 9-5 sedan, which is being replaced by equipment to produce the next-generation 9-5.


Thai Auto Show Expected to Generate Sales Orders

Organizers of Thailand’s Motor Expo expect car and truck dealers at this year’s event to ring up 15,000 orders and possibly rival last year’s tally of 17,000 vehicles. They point to strong sales in October, stabilizing oil prices and government stimulus packages as reasons for optimism.

Although vehicle sales through the first 10 months are down nearly 18%, demand in October surged almost 9% year-over-year and 9.5% over September, according to The Nation newspaper.

Some 1.6 million visitors are expected to attend this year’s show, which runs the first two weeks of December. Nearly three dozen auto brands are participating in the event.


Malaysian Exports Rebound

Malaysia’s exports rose 15% to $16 billion from September to October, the highest monthly total this year, according to the Malaysia External Trade Development Corp.

Imports increased by nearly 13% to $12.6 billion in October, and overall trade jumped 14% to $28.6 billion. The country has now enjoyed a trade surplus every month since November 1997. Exports have outpaced imports by nearly 20% through the first 10 months of the year although overall trade slipped 0.2% for the period vs. the same period in 2008, according to the trade group.

Last month’s spike in exports was driven by electrical and electronic products, which account for 43% of Malaysia’s overall exports. Deliveries of crude oil, liquefied natural gas, wood products, optical and scientific equipment also were up.

Year-over-year sales to China, Malaysia’s largest export market, soared 39% in October to $2 billion. That’s 1.2% more than September’s total. Exports to the U.S. rebounded nearly 25% from September, but year-on-year shipments to the U.S. are down almost 8%. October also trended up for Malaysia’s exports to Europe and Japan.

Imports into Malaysia fell 2.3% to $12.6 billion in October from a year ago. Electrical and electronic products commanded the largest portion of the import market too, accounting for more than 35% of Malaysia’s total.


Mitsubishi Divests Stake in Indian Truckmaker

The domestic founders of Eicher Motors Ltd. have spent about $11 million to buy out the 3.2% held in the Indian truckmaker by Mitsubishi Motors Corp.

MMC and Eicher Goodearth Investments Ltd. were part of the group that founded Eicher Motors 27 years ago. Following the acquisition from MMC, Eicher Goodearth now owns 56% of the truck company.

Last year Eicher Motors formed a 50:50 venture with Swedish truckmaker Volvo AB. Dubbed VE Commercial Vehicles Ltd., the venture makes and sells Eicher-branded vehicles-including the Canter range of light commercial vehicles-in India. It also markets Volvo-badged trucks there. The partners cooperate on purchasing and engineering services, although a more formal technology transfer program reportedly ended in 1994.


GM, SAIC Expand Partnership into India

General Motors Co. and SAIC Motor Corp., who already operate eight joint ventures in China, have formed a new partnership to oversee their planned growth in Asia. Dubbed General Motors SAIC Investment Ltd., the 50:50 joint company, will be based in Hong Kong. Each partner is contributing $50 million to the new company.

As part of the expansion efforts, the companies will build and sell small cars and mini-commercial vehicles in India. The venture is expected to be finalized in the first quarter of next year.

The new relationship also calls for GM to transfer 1% of its stake in Shanghai GM to SAIC, giving the Chinese firm a controlling 51% stake. The 1% share is valued at $85 million, according to GM.

Gaining a majority stake in the China venture will allow SAIC to consolidate revenue from the partnership, the companies say. It also is expected to provide investors with a better understanding of the business. There are no plans to change Shanghai GM’s management team, although SAIC will increase its board representation from five directors to six.

GM agreed to the stake transfer in part to get greater cooperation from the Chinese government on “other unspecified matters,” according to Nick Reilly, the head of GM’s international operations until last Friday. Reilly was named president of GM Europe as part of a major senior management shakeup at GM.

In India, the partners are expected to invest up to $650 million, with GM’s half coming in the form of factories and a distribution network. They will use GM’s two manufacturing facilities and a powertrain plant in the country. Annual output could reach 225,000 vehicles by 2012, the companies estimate.

The companies plan to sell 300,000 minivans, mini-trucks and small cars per year in India by mid-next decade. The mini-commercial vehicles will be based on their SAIC-GM-Wuling Automotive Co. venture, which is China’s largest minivan maker. That venture is 50.1% owned by SAIC, and GM holds a 34% stake. Liuzhou Wuling Motors Co. owns the remaining 5.95%.

GM is on target to sell 75,000 vehicles on its own in India this year. It sold 65,700 vehicles there in 2008. The company’s current lineup includes six Chevrolet car and SUV models. Several additions are due next year, including the all-new Beat minicar.


Vietnam Targets Small MPVs

Vietnam’s Ministry of Industry and Trade has submitted a plan to Prime Minister Nguyen Tan Dung to develop small MPVs under a new national vehicle program. The proposed vehicles will be able to seat up to nine people and be powered by gasoline engines that displace 1.5 liters or less.

No such models currently are made in Vietnam, which anticipates increasing domestic demand for compact MPVs that combine fuel efficiency with versatility. The country also wants to emulate Thailand’s success as a specialized production hub for compact pickups sold throughout southeast Asia.

To support the project, Vietnam is considering several tax incentives. This includes reducing luxury taxes on MPVs to 30% of the sales price vs. 45%-60% assessed to other vehicle types. VAT and ownership registration fees also are expected to be lowered.

As part of a new free trade agreement among members of the Association of Southeast Asian Nations, imported parts and machinery also will be cheaper. By focusing development plans on a single vehicle type, Vietnam also expects to benefit from economies of scale.

With sales of nearly 11,000 units during the first 10 months of the year, MPVs currently account for 12% of Vietnam’s domestic vehicle market. But most of these models are larger than the proposed national vehicle. Some 85% are locally assembled Toyota Innovas, which are powered by a 2.0-liter engine. The Kia Caren with a 1.8-liter engine accounts for most of the rest.

Vietnam’s primary competition in compact MPV production is Indonesia. Several models are made there, including the Daihatsu Xenia, Honda Freed, Suzuki APV and Toyota Avanza. Media reports note that Vietnam should be able to avoid direct competition by focusing on left-hand-drive models; Malaysia makes right-hand-drive MPVs. Other left-hand-drive markets in the region include the Philippines, Cambodia and Laos.


Hino Goes Big in Indonesia

Hino Motors Ltd. is readying a $33 million plant to make compact trucks in Indonesia beginning late this month, The Nikkei says. With the capability to make 25,000 trucks a year, the facility will be Hino’s largest overseas factory, according to the newspaper.

The plant will make 5-8-ton trucks jointly developed by Hino and parent Toyota Motor Corp. The vehicles will be sold under both the Hino and Toyota brands.

In anticipation of exports, the trucks will be tailored in price and features to suit neighboring countries in the Southeast Asian market. Hino says the new models will offer improved fuel efficiency over its previous trucks.


Maruti May Hike Production in India

Maruti Suzuki India Ltd. hopes to increase its annual output in India from 1 million vehicles currently to 1.75 million units by 2015, Managing Director Shinzo Nakanishi tells The Economic Times.

Nakanishi says capacity will be hiked in two stages as new plants come online in the northern state of Haryana. Each facility would have annual capacity of about 300,000 cars per year.