1.15.2010

比亞迪電動車下半年闖美 較原計劃早一年 (BYD Electric Cars Coming to US One Year Earlier Than Planned)

mingpaovan.com (Vancouver), January 13, 2010

【明報專訊】彭博報道,中國汽車和電池製造商比亞迪主席王傳福在美國底特律車展上表示,最快在今年下半年,該公司生產的純電動汽車便會在美國出售,較原訂計劃早了1年,以滿足市場對省油汽車的需求。

彭博又引述比亞迪汽車出口部總經理李竺杭昨天在該車展上說,公司生產的揭背純電動汽車e6將會在今年下半年打入美國市場,並指該款5人汽車每次充電可走200哩(322公里)。

將首推e6 每次充電走322公里

報道引述王傳福稱:「未來對比亞迪而言,美國是非常重要市場,而電動汽車就是我們的未來。我們會在下半年開始向電動車市場進軍。」李竺杭拒絕透露e6在美國售價似以及銷量目標,但暗示會先在加州推出;「我們要考慮基建,尤其是充電站是否足夠。加州是最優先選擇。」

他上月接受訪問時說,可能選擇洛杉磯作為美國首個電動車市場及美國總部所在,因為電動汽車「更適合在有很多空氣污染問題的人口密集地區使用」,而且洛杉磯是美國最大的和最富有汽車市場之一,在接受新技術方面佔領先地位。

但北京顧問公司Booz & Co.高級顧問Bill Russo認為,比亞迪打算今年便在美國推出e6,是「非常野心勃勃,風險可能太大」。

他指出,即使最有經驗公司,在一個成熟市場推出新品牌及新技術,也是大工程,「對於比亞迪這樣相對新的公司來說,是超過它的能力」。

中國車市騰飛 油荒料成契機

2009年,中國晉升為全球第一汽車產銷大國,銷量增長至1360萬輛。王傳福認為:「5年後,中國汽車年銷量可能增至2000萬輛。意味需要消耗大量汽油,屆時可能引起能源市場短缺。」

比亞迪2008年獲巴菲特旗下中美能源入股一成,08年年底在中國推出可充電混合動力車F3DM,但至今僅對機構售出39輛;批量推出市場日期因補貼政策和基建配合未落實,而遲遲未定論。

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1.13.2010

2010 China Auto Market: Downshifting to Stable Growth

by Bill Russo and Jeffrey Zhao

In 2009, China easily surpassed the US in total car sales to become the world’s largest automotive market. China’s vehicle sales total of 13.6 million units was more than 3 million units ahead of the second largest market, the United States. The dramatic rise of China’s automotive industry, in terms of both consumer demand and production supply, is truly unprecedented in the history of the industrialized world. No country has risen from a nearly standing start to the size and scale that China has achieved in just a few decades.

The astonishing growth in car demand is a direct result of many factors that are fueling China’s economy. This includes aggressive tax cuts as well as a significant investment made in the development of the infrastructure to support transportation. The China government views the automotive industry as a “pillar” of its economy since it brings technology, jobs and investment to the economy. As such, several agencies of the China government play an active role in sponsoring initiatives to further stimulate automotive development and growth.

Driven by the onset of the global financial crisis, the Automotive Industry Stimulus Plan published in early 2009 took specific measures designed to spark the growth of consumer demand. Measures included the reduction of sales tax for cars below 1.6L engine displacement, along with subsidies for new minibus or light truck sales for rural residents. These actions have accelerated the auto market expansion that was already in progress prior to 2009. The impact was particularly evident in China’s lower-tier cities, where the large number of first-time buyers helped to boost the performance of the manufacturers of these smaller vehicles.

While aggressive tax cuts and subsidies have been behind much of the demand growth in 2009, the question now turns to whether this robust demand growth can be sustained in 2010. While very few expect a repeat of the 46% growth experienced this year, most auto executives believe that the fundamentals are in place to push sales up at least 10 percent, even without the incentives.

However, unlike the “cash for clunkers” programs in Europe and the United States, which merely provided a temporary boost to sales, the China government has no intention of completely eliminating the incentives. On December 9, 2009, Chinese Premier Wen Jiabao chaired a State Council executive meeting and approved a number of policy measures including extension of automotive preferential tax and subsidy in 2010. There were four relevant decisions as follows:

  • The “Vehicles to the countryside” project will be extended to the end of 2010; Subsidy of motorcycles sales to the countryside will be extended to January 31, 2013.
  • The number of cities for demonstration of energy-saving and new energy vehicles was expanded from 13 to 20. Five cities would be chosen to execute the personal subsidy to private buyers of energy-saving and new energy vehicles for demonstration purpose.
  • Purchase Tax relief for 1.6-liter and below passenger vehicles will be extended until the end of 2010, however, the degree of relief was reduced, as the tax rate will rise from 5% in 2009 to 7.5% in 2010.
  • Vehicle Trade-in and recycling subsidy standard would be enhanced from 3,000-6,000RMB to 5000-18000 RMB. While a breakdown of new subsidy by vehicle type is so far not clear, the subsidy for passenger car is reported to be 18,000RMB - three times than initial 6,000RMB.

Impact Analysis

At first glance, many industry watchers expressed concern that cutting by half (from 5% in 2009 to 2.5% in 2010) the purchase tax benefit for 1.6-liter and below passenger vehicles would significantly impact sales in 2010. Another potential concern is that some personal-use vehicle buyers may have pulled ahead their purchase plan from 2010 to 2009 to realize the 5% tax savings. In addition, starting from January 2010 the China government began to issue a series of credit tightening measures, which may have an impact on the booming auto, housing and stock markets. China’s car market boom has certainly coincided with the increasing housing and stock valuations, due to the general wealth effect.

In 2009, sales of 1.6L and below cars accounted for almost 70% of total passenger vehicle sales, which was more than 7% higher than that in 2008. Indeed, maintaining such robust growth will be challenging once the new tax rates are in place.

However, there are still several fundamental growth drivers in 2010, which might help offset the negative impact of the reduction of purchase tax relief. Among those, urbanization is a primary driving force and expected to speed up in the coming years. Over the past six decades, the urbanization rate in China rose from 7.3% to 45.68% of the total population. Meanwhile, the urbanization trend is spreading from east coast to mid and west region, thus substantially expanding the coverage of “lower tier” (Tier 3 and below) cities.

Some other driving factors will also take effect. To be specific:

  • Compact and medium-sized vehicle demand will continue their growth momentum from 2009, driven by higher economic growth expectations in 2010 and income levels. Additionally, both private and business demand for mid and large-sized cars will also increase.
  • The increase in trade-in vehicle subsidy will create a powerful incentive for current car owners in urban areas to trade in their old vehicles and buy a new car.
  • An extension of the “van and pickup to countryside” program to the end of 2010 will continue to drive rural residents to trade in their old vehicles. The first 10 months of 2008 saw year-over-year growth of light truck and micro truck by 44% and 22% respectively, due to subsidy stimulus. The coming year is expected to have another double-digit growth for those segments.
  • The increase of the number of cities targeted for new energy vehicle demonstration will help generate demand for hybrid and EV product offerings. Implementation of a personal subsidy in 5 cities will be helpful to shape positive consumer perception.

It should be noted that even with a lower tax savings it is likely that demand in 2010 will downshift from an “exponential” to a “stable” path.

In 2009, China seized an opportunity from the global financial crisis, and used a targeted stimulus plan to spark demand, especially for first-time buyers. The speed and effectiveness of the stimulus plan were indeed impressive. It was an uncomplicated value proposition which Chinese consumers quickly acted upon.

The new plan continues to offer benefits to first-time customers entering the market, while simultaneously providing a strong incentive for people to trade in their older vehicles for newer vehicles with better fuel economy and lower emissions. Under such incentives, it is anticipated that demand structure will continue to move downward to smaller size vehicles including small cars, micro vans, and light trucks. Domestic brands such as Chery, Geely and Chang’ An will further benefit from such demand migration.

While the initial 2010 plan is a bit more complex and some parts are yet to be fully defined, it is clear that China does not intend to relinquish its position as the largest car market in the world in the near future. Moreover, we shall not overlook that plans for vehicle export in 2009 were sharply impacted by the financial crisis. With the global economic recovery, we can expect China to pick up their export growth in broad overseas markets seeking lower priced cars.

Bill Russo, is a Senior Advisor with Booz & Company as well as the Founder and President of Synergistics Limited. He lives in Beijing and has more than 20 years of experience in the automotive industry, most recently serving as Vice President of Chrysler's business in North East Asia.

Jeffrey Zhao, is an Advisor with Synergistics Limited. He lives in Fairfax, Virginia and has more than 10 years of experience in the automotive industry, most recently serving as Senior Manager for New Business Development for Chrysler's business in North East Asia.

Click here to view the article published in GLG News

Click here to view the article published in gasgoo.com's China Automotive News

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1.12.2010

Buffett-Backed BYD Plans 2010 U.S. Arrival for Electric Auto

Business Week, January 12, 2010

By Alan Ohnsman

Jan. 12 (Bloomberg) -- BYD Co., the Chinese auto- and battery maker backed by Warren Buffett, will sell a rechargeable electric car in the U.S. in 2010 as it speeds deliveries to meet demand for fuel-efficient models.

The first e6 hatchbacks will arrive in the U.S. late this year, Henry Li, general manager of BYD’s auto export division, said today at the Detroit auto show. BYD said the five-passenger car can travel 200 miles (322 kilometers) on one charge.

BYD’s plan accelerates the timetable set last year for a 2011 debut. That move is “very ambitious and probably too risky” in a market dominated by hybrids such as Toyota Motor Corp.’s Prius, said Bill Russo, a Beijing-based senior adviser at Booz & Co.

“Introducing a new brand and technology to a mature market is a major task for even the most experienced companies,” Russo said. It “seems like a stretch for a relatively new company like BYD.”

BYD, based in Shenzhen, China, was the country’s sixth- largest automaker last year based on sales. Li declined to give a price or a volume target for the e6 or specify which U.S. market would receive the car first.

“We have to consider infrastructure, availability of charging points,” Li said. “California is a top candidate.”

Batteries will push the e6’s weight past those of comparable compact cars to 5,060 pounds (2,295 kilograms), according to BYD. That’s 500 pounds more than Ford Motor Co.’s Explorer mid-size sport-utility vehicle.


Buffett’s Stake

Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. owns a 10 percent stake in the company. BYD introduced its F3DM plug-in hybrid to company and government agency buyers in December 2008, and sold 39 of the vehicles in the first 11 months of 2009.

The automaker pushed back sales of the model to individual customers until this year after BYD failed to cut costs, Radio Television Hong Kong reported in November.

BYD was unchanged at HK$68.10 in Hong Kong trading. The shares have surged more than fivefold in the past 12 months.

In an interview yesterday in Detroit, Chairman Wang Chuanfu signaled BYD’s intention to hasten sales in the U.S., saying BYD would “start toward” the country in the second half.

BYD sees a chance to reach U.S. buyers who want cars that use little or no gasoline and cut emissions of greenhouse gases, and it faces pressure in China to develop electric vehicles for energy security, Wang said at the North American International Auto Show.


Oil Alternative

China’s auto market grew to 13.6 million units in 2009, surpassing the U.S. for the first time, and “it’s possible over the next five years it will grow to 20 million,” Wang said. “We’ll consume a huge amount of oil that China doesn’t have and may not be able to buy.”

While overall passenger-car sales in China grew 53 percent last year, Wang said BYD’s deliveries jumped 160 percent to about 450,000.

Wang, 43, was named China’s richest man by Forbes Magazine in November after Buffett’s investment helped increase his estimated personal wealth to $5.8 billion.

Buffett, 79, has yet to visit BYD’s factories in China, Wang said.

“I hope he’ll come,” he said.



--Tian Ying in Beijing. Editors: Ed Dufner, Steve Walsh


Buffett-Backed BYD Sees U.S. as Key for Electric Cars (Update 1)

Bloomberg.com, January 12, 2010

Jan. 12 (Bloomberg) -- BYD Co., the Chinese auto- and battery maker backed byWarren Buffett, may sell a rechargeable electric car in the U.S. as soon as this year to meet demand for fuel-efficient models, the company’s founder said.

“The U.S. is a very important market for BYD in the future, and the electric vehicle is our future,” Chairman Wang Chuanfu said yesterday in an interview at the Detroit auto show. “We will start toward the market in the second half.”

Beginning U.S. sales in 2010 would accelerate the timetable BYD set last year, when the Shenzhen, China-based automaker targeted a 2011 debut. Speeding up the model’s debut in a market dominated by hybrids such as Toyota Motor Corp.’s Prius is “very ambitious and probably too risky,” said Bill Russo, a Beijing-based senior adviser at Booz & Co.

“Introducing a new brand and technology to a mature market is a major task for even the most experienced companies,” Russo said. It “seems like a stretch for a relatively new company like BYD.”

Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. owns a 10 percent stake in the company. BYD introduced its F3DM plug-in hybrid to company and government agency buyers in December 2008, and sold 39 of the vehicles in the first 11 months of 2009.

Cutting Costs

The company pushed back sales of the model to individual customers until this year after it failed to cut costs, Radio Television Hong Kong reported in November.

BYD sees a chance to reach U.S. buyers who want cars that use little or no gasoline and cut emissions of greenhouse gases, and it faces pressure in China to develop electric vehicles for energy security, Wang said.

China’s auto market grew to 13.6 million units in 2009, surpassing the U.S. for the first time, and “it’s possible over the next five years it will grow to 20 million,” Wang said. “We’ll consume a huge amount of oil that China doesn’t have and may not be able to buy.”

Wang, 43, is to discuss details of BYD’s plans for the U.S. later today at a press conference at the North American International Auto Show. While overall passenger-car sales in China grew 53 percent last year, Wang said BYD’s deliveries jumped 160 percent to about 450,000.

Wang was named China’s richest man by Forbes Magazine in November after Buffett’s investment helped increase his estimated personal wealth to $5.8 billion.

Buffett, 79, has yet to visit BYD’s factories in China, Wang said.

“I hope he’ll come,” he said.

--Tian Ying in Beijing. Editors: Ed Dufner, Jamie Butters

To contact Bloomberg News staff for this story: Alan Ohnsman in Detroit +1-323-559-1067 or aohnsman@bloomberg.net; Tian Ying in Beijing at +86-10-6649-7571 or ytian@bloomberg.net

Last Updated: January 11, 2010 22:38 EST

1.11.2010

China Ends U.S.’s Reign as Largest Auto Market (Update2)

Bloomberg.com, January 11, 2010

By Bloomberg News

Jan. 11 (Bloomberg) -- China supplanted the U.S. as the world’s largest auto market after its 2009 vehicle sales jumped 46 percent, ending more than a century of American dominance that started with the Model T Ford.

The nation’s sales of passenger cars, buses and trucks rose to 13.6 million, the fastest pace in at least 10 years, according to the China Association of Automobile Manufacturers. In the U.S., sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.

China’s vehicle sales have surged since 1999 as economic growth averaging more than 9 percent a year has helped automakers including General Motors Co. and Volkswagen AG compensate for slumping demand in the U.S. and Europe. The market will likely remain the world’s largest, even as sales slow this year on a reduction in tax cuts, according to Booz & Co.

“China is becoming the center stage of development for the 21st century global auto industry,” said Bill Russo, a Beijing- based senior adviser at Booz & Co., which advises automakers. “Economic growth has directly translated into growth in automobile sales.”

December sales of passenger cars, trucks and buses rose 92 percent to 1.4 million. For the whole of 2009, passenger-car sales rose 53 percent to 10.3 million.

‘Rising Challenges’

“The incredible growth rate last year is not going to be repeated in 2010,” said Yu Bing, an analyst at Pingan Securities Co. in Shanghai. “Automakers will face rising challenges in China this year with slower demand growth and increasing competition.”

China’s government last year halved the sales tax on new vehicles to 5 percent and offered 5 billion yuan ($732 million) in cash to replace old ones, insulating the country from slumping global demand. The Chinese government announced plans on Dec. 10 to scale back the measures, including raising the tax on new vehicles with engines of 1.6 liters or smaller to 7.5 percent.

Vehicle Ownership

China’s vehicle ownership climbed to 51 million by the end of 2008 from 1 million in 1977. Per capital disposable income for Chinese households increased 46-fold in nominal terms during the period, also making the country the world’s biggest markets for products such as cell phones, beer and microwave ovens.

GM and Volkswagen have targeted growing Chinese demand to compensate for slumping sales in the U.S. and Europe.

GM, the biggest overseas automaker in China, said on Jan. 4 that its Chinese sales rose 67 percent last year to a record 1.83 million vehicles. Shanghai General Motors Co. sold 727,620 cars last year, an increase of 63 percent. GM sold 1 percent stake in Shanghai GM in December to partner SAIC Motor Corp., China’s largest domestic automaker. The $84.5 million deal will leave GM with a 49 percent stake in the venture.

Sales at SAIC-GM-Wuling Automobile Co., China’s largest minivan maker, rose 64 percent to 1.1 million vehicles, accounting for about 60 percent of GM’s China sales. The minivans are sold for as little as $4,000 each.

China Investment

Ford Motor Co. is spending $490 million on a third plant in China, while Volkswagen plans to invest 4 billion euros ($5.7 billion) in the country by 2011. Seoul-based Hyundai intends to build a third Chinese factory as it aims to boost local capacity by 50 percent to 900,000 vehicles a year by 2011.

China had 117 automakers at the end of 2008, according to the automobile association, raising the possibility of overcapacity. Automakers should “keep their heads cool” to prevent expanding production beyond demand, Chen Bin, who oversees regulation of China’s auto industry at the National Development and Reform Commission, said last year.

Henry Ford introduced the Model T in 1908 as the world’s first automobile affordable for a mass market. The car was produced at the Piquette Plant in Detroit, helping the city become synonymous with the auto industry. GM, also based in the city, grew into the world’s largest automaker.

The U.S. has since lost out to Asian carmakers producing cheaper and more fuel-efficient models. Toyota Motor Corp. ended GM’s 77-year reign as the biggest automaker in 2008. General Motors Corp. and Chrysler also both filed for bankruptcy as the worst recession since the Great Depression sapped auto sales.

--Tian Ying. Editor: Patrick Harrington, Neil Denslow

To contact Bloomberg News staff for this story: Tian Ying in Beijing at +86-10-6649-7571 or ytian@bloomberg.net

Last Updated: January 11, 2010 04:02 EST

China Ends U.S.'s Reign as Largest Auto Market (Update 1)

BusinessWeek, January 11, 2010

Jan. 11 (Bloomberg) -- China's 2009 vehicle sales rose 46 percent making it the world's largest auto market, a title held by the U.S. since the Model T Ford went into production a century ago.

The nation's vehicle sales rose to 13.6 million units, according to the China Association of Automobile Manufacturers. In the U.S., sales slumped 21 percent to 10.4 million vehicles, the fewest since 1982, according to Autodata Corp.

China's vehicle sales have surged since 1999 as economic growth averaging more than 9 percent a year boosts consumer spending in the world's most populous nation. The market will likely remain larger than the U.S., even as sales slow this year on a reduction in tax cuts, according to Booz & Co.

“China is becoming the center stage of development for the 21st century global auto industry,” said Bill Russo, a Beijing- based senior adviser at Booz & Co., which advises automakers. “Economic growth has directly translated into growth in automobile sales.”

Halving Tax

China's government last year halved the sales tax on new vehicles to 5 percent and offered 5 billion yuan ($732 million) in cash to replace old ones, insulating the country from slumping global demand. The Chinese government announced plans on Dec. 10 to scale back the measures, including raising the tax on new vehicles with engines of 1.6 liters or smaller to 7.5 percent.

China's vehicle ownership climbed to 51 million by the end of 2008 from 1 million in 1977. Per capital disposable income for Chinese households increased 46-fold in nominal terms during the period, also making the country the world's biggest markets for products such as cell phones, beer and microwave ovens.

Automakers such as General Motors Co. and Volkswagen AG have targeted growing Chinese demand to compensate for slumping sales in the U.S. and Europe.

GM, the biggest overseas automaker in China, said on Jan. 4 that its Chinese sales rose 67 percent last year to a record 1.83 million vehicles. Shanghai General Motors Co. sold 727,620 cars last year, an increase of 63 percent. GM said in December it will sell a 1 percent stake in Shanghai GM to partner SAIC Motor Corp., China's largest domestic automaker. The $84.5 million deal will leave GM with a 49 percent stake in the venture.

Minivans

Sales at SAIC-GM-Wuling Automobile Co., China's largest minivan maker, rose 64 percent to 1.1 million vehicles, accounting for about 60 percent of GM's China sales. The minivans are sold for as little as $4,000 each.

Ford Motor Co. is spending $490 million on a third plant in China, while Volkswagen plans to invest 4 billion euros ($5.7 billion) in the country by 2011. Seoul-based Hyundai intends to build a third Chinese factory as it aims to boost local capacity by 50 percent to 900,000 vehicles a year by 2011.

China had 117 automakers at the end of 2008, according to the automobile association, raising the possibility of overcapacity. Automakers should “keep their heads cool” to prevent expanding production beyond demand, Chen Bin, who oversees regulation of China's auto industry at the National Development and Reform Commission, said last year.

Henry Ford introduced the Model T in 1908 as the world's first automobile affordable for a mass market. The car was produced at the Piquette Plant in Detroit, helping the city become synonymous with the auto industry. GM, also based in the city, grew into the world's largest automaker.

The U.S. has since lost out to Asian carmakers producing cheaper and more fuel-efficient models. Toyota Motor Corp. ended GM's 77-year reign as the biggest automaker in 2008. General Motors Corp. and Chrysler also both filed for bankruptcy as the worst recession since the Great Depression sapped auto sales.

--Tian Ying. Editor: Patrick Harrington, Neil Denslow

Click here to view original article at BusinessWeek.com

Booz & Company Publication of "China: Leading the Transition to New Energy Vehicles"

Booz & Company Viewpoint, January 2010



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