Global Automotive Forum: The Future Development of China's Automotive Industry

Wuhan, October 17-18, 2013

Bill Russo will participate in the 4th Global Automotive Forum as a panelist on the topic:

Chinese Automotive Companies:  Opportunities and Challenges Outside of China

CHINA: BMW expansion knockback raises concerns

Just-Auto.com, July 30, 2013

A regulatory refusal for the expansion of a BMW joint venture factory in China has added to recent concern global automakers could find it increasingly difficult to win approval for projects in the country.

According to Bloomberg News, shares in BMW partner Brilliance China Automotive Holdings fell the most in almost four weeks in Hong Kong after China’s Ministry of Environmental Protection said it sent back an application, citing inadequate wastewater analysis and the plan’s failure to meet government anti-pollution targets.

“The ease of expansion is probably not going to be as easy as in the past,” Bill Russo, Beijing-based president of automotive consultant Synergistics, told the news agency.

Russo, in China for the past decade, said he can’t recall the government ever issuing a statement knocking back an automaker’s expansion plans for an existing project.

BMW spokesman Alexander Bilgeri said the ministry asked for additional documents and that the government decision on the project wasn’t final. Such events are routine, he said.

But Russo, a former executive for Chrysler told Bloomberg turning down approvals to expand an existing project was “unusual”.

In a statement on the ministry’s website, the government said it didn’t approve BMW Brilliance Automotive’s plans for the third phase of a factory in the northeastern Chinese city of Shenyang. The first phase of the plant has yet to pass an inspection, it said.

The Economic Information Daily, one of the official Xinhua News Agency’s newspapers, reported on 29 July industry officials are increasingly calling for China to start an investigation into imported car prices. Profit from selling imported luxury cars in China was 30% higher than the global average, the newspaper said, citing China Automobile Dealers Association executive vice president and secretary general Shen Jianjun

Getting lower-level bureaus to sign off on manufacturing projects are among the first regulatory steps for foreign companies before they receive central government approval, Bloomberg noted.

Click here to read the original article at just-auto.com

Daimler unveils €2bn China expansion

The Financial Times, August 27, 2013

Daimler has announced plans to export critical engine components from China for use in its German-made vehicles as part of a fresh €2bn expansion effort intended to kick-start its business in the world’s largest car market.

Hubertus Troska, a Daimler board member and Beijing-based chairman of the company’s Greater China unit, said on Tuesday: “There is a recognition [at Daimler] that we need to improve our position in China vis a vis some of our competitors.”

The expansion plans, which will double capacity at Daimler’s passenger car joint venture in Beijing, include construction of the luxury carmaker’s “first fully fledged engine factory outside Germany”. Frank Deiss, president of Beijing Benz Automotive, said critical engine components including crankshafts, cylinder heads and engine blocks would be exported back to Germany.

Mr Troska added: “The quality level that we are putting in here will be like no other engine plant that we have outside Germany and is to the same level as our German plants.

“Customers will never know – nor do they need to worry – where the parts come from . . . Beginning next year we’re actually going to ship the parts to Germany. They’re waiting for them.”

Bill Russo, a Beijing-based automotive consultant said: “Powertrain systems are usually the last major component technology to be localised. Daimler arriving at this stage is a huge step and using Chinese-sourced components outside of China is also significant.”

Mr Troska is the first board member posted by Daimler to China, where it has long lagged behind German rivals BMW and Audi. “[Board representation] is a prerequisite in order to make sure the decisions of our company will always take Chinese needs and market characteristics into consideration,” said Mr Troska.

Ivo Naumann, managing director at consultancy AlixPartners, added: “The appointment of a board member to China is a reflection that they understand this is one of the two or three core markets for luxury cars and if you are not successful here it is going to be hard to achieve your global targets.”

Last year only 96,500 of the more than 206,000 Mercedes-Benz cars Daimler sold in China were manufactured by its Beijing joint venture – a local production rate well below those achieved by BMW and Audi. Daimler said it intended to boost sales to 300,000 units a year by 2015, with two-thirds produced in China.

Analysts also point to the success of Daimler’s German rivals in developing a wider range of vehicles specifically tailored to the Chinese market, including longer cars with more room in the back seat for owners who prefer to be chauffeured in comfort through the country’s clogged city streets.

“Daimler has been behind BMW and Audi [in China] for quite a while because their product development cycle has been lagging,” said Benjamin Lo, an auto industry analyst with Nomura in Hong Kong.

Click here to read this article at FT.com

Daimler Opens First China Engine Plant

Bloomberg TV, August 27, 2013

Synergistics President & CEO Bill Russo discusses how luxury car makers are trying to tap into the largest growth market in the world. He speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)

Volvos image ska lyfta Geely i USA

Dagens Industri, August 27, 2013


Article on Geely's decision to leverage Volvo technology to accelerate its entry into the US market.

Med hjälp av Volvo personvagnars goda namn och rykte planerar Geely Automobile nu en omstart på den amerikanska marknaden.  Det meddelar bolagets vd Gui Shengyue.

”Bra för Geely men riskabelt för Volvo”, säger den amerikanske bilexperten Bill Russo till Di.

Med start 2016 planerar VolvoPV:s kinesiska systerbolag, biltillverkaren Geely Automobile, att börja exportera gemensamt utvecklade Geelybilar till USA.

Geelys tidigare försök att slå sig in på den amerikanska marknaden har misslyckats. Men Gui Shengyues mål är att 60 procent av bolagets försäljning ska komma från marknaden utanför Kina 2018.

”Förvärvet av Volvo har förbättrat vår image och utländska konsumenter ser oss nu som ett internationellt företag. I USA kommer vi att satsa på våra gemensamt utvecklade modeller”, sa han under en presskonferens i Hongkong.

Enligt Gui Shengyue är Geelys och Volvo PV:s samarbete fortfarande på ett utvecklingsstadium och de nya modellerna väntas vara klara under 2015.

Skiljer sig från mängden 

Till Di säger Bill Russo, ordförande för bilkonsulten Synergistics i Peking och tidigare chef för Chrysler i Nordostasien, att Geelys planer för den amerikanska marknaden ska ses i ljuset av att det nu blir allt viktigare för kinesiska biltillverkare att nå globala framgångar, och därmed kunna särskilja sig från mängden hemma i Kina i takt med att konkurrensen på hemmaplan hårdnar.

”Geelys strategi är att marknadsföra sig som ett globalt bolag med framgångar utomlands och på så sätt vinna de kinesiska konsumenternas förtroende och öka försäljningen
på den kinesiska marknaden”, säger Bill Russo.

Det kinesiska superdepartementet NDRC räknar med att den planerade kapaciteten bland biltillverkare i Kina uppgår till 40 miljoner bilar 2015, vilket med råge överstiger den beräknade inhemska efterfrågan på omkring 27 miljoner. Samtidigt föll de kinesiska billtillverkarnas marknadsandel i landet till den lägsta nivån på fem år under juli, enligt branschorganisationen China association of automobile manufacturers, CAAM.


Volvos varumärke i fara

”Det innebär att det kommer att finnas betydligt mera kapacitet, särskilt för Kinas lokala biltillverkare, än vad det finns efterfrågan”, konstaterar Bill Russo.  

Samtidigt säger han att Geelys strategi för att nå exportframgångar på mogna marknader som USA kan skada Volvos varumärke:

”Uppriktigt sagt är det lite riskabelt om Geely gör kopplingen med Volvo alltför tydlig. Det kan vara negativt för Volvo.”

I förra veckan meddelade Geely Automobile att det strävar efter att bli Kinas största fordonsexportör i år med runt 180 000 exporterade bilar.

Negativ kännedom Enligt CAAM sålde Geely förra året 100 800 bilar utomlands, att jämföra med den kinesiska konkurrenten Chery Automobile vars export landade på 184 800 bilar. Men Bill Russo är tveksam till Geelys försäljningsframgångar i USA.

”Det kommer att vara mycket utmanande, även om Geelys koppling med Volvo ger Geely en relativ fördel”, säger han.

”Geelys största problem på mogna marknader handlar om bristande varumärkeskännedom, eller negativ varumärkeskännedom. Det blir mycket svårt att få konsumenterna att acceptera kinesiskt tillverkade bilar och teknik.”

JENNY HEDELIN

压力重重通用汽车计划转移韩国产能_财经频道_一财网

China Business News, August 16, 2013

在韩国汽车市场销售的汽车品牌主要来自于韩国国内的厂商，比如现代起亚集团。进口税以及本土化率低导致海外汽车品牌很难和现代-起亚品牌竞争。

王含（化名）是一名汽车专业的大三学生，非常迷恋韩国电视剧和电影，但是她发现，出现在韩剧里面的车子不是现代汽车的就是起亚汽车的，极少看到通用汽车、大众汽车等人们耳熟能详的汽车品牌。

王含发现，与中国和美国市场的开放性相比，韩国汽车市场基本上是个封闭性的汽车市场，外来的汽车品牌很难在韩国市场生存。

“在韩国汽车市场销售的汽车品牌主要来自于韩国国内的厂商，比如现代起亚集团。进口税以及本土化率低导致海外汽车品牌很难和现代-起亚品牌竞争。”克莱斯勒东北亚前副总裁、香港协同共进有限公司总裁罗威告诉《第一财经日报》记者。

韩国国内市场的封闭性正在间接逼迫海外品牌撤出韩国市场：通用汽车不断释放退出韩国市场的信号；与之相似的是，之前的7月，日本三菱汽车对外发布消息称，由于该公司在韩国的汽车销售行情不佳，将停止在韩国的销售活动，撤离韩国市场。

多重压力

日前，海外媒体报道，考虑到劳动力成本提升以及工会强势等多方因素，通用汽车正计划退出韩国市场。其实，在多重压力之下，通用汽车从去年开始就不断传递其削减在韩国市场业务的信号。

去年，通用汽车旗下欧宝宣布，将从2014年下半年开始将韩国工厂Mokka车型的部分产能转移至西班牙。

除了Mokka外，通用汽车还宣布，有可能放弃在韩国工厂投产下一代雪佛兰爱唯欧，并将其生产业务交由中国及美国工厂。

转移新车生产基地的一方面原因来自韩国工会强势的文化带来的生产不确定性。通用汽车因为在韩国劳资纠纷等因素对当地制造的兴趣减淡，激进的工会文化和不断攀升的劳动力成本让通用汽车开始重新思考其对韩国市场的业务依赖。通用汽车在韩国市场不断遭遇罢工，去年7月至9月期间，通用韩国公司遭遇了该公司2002年成立以来规模最大的罢工，罢工导致该公司减产4.8万辆汽车。

通用汽车高层对上述媒体表示，需要确保能够将韩国市场上面临的业务风险转移，不仅仅是在未来2~3年，而是在未来很长一段时间，不要再对韩国市场的业务表现出极高的依赖。

过去10年里，韩国市场上的劳动力成本大幅攀升，从而使得韩国市场上的汽车生产成本提升，如果汽车企业再没有规模化优势，其就缺乏竞争力。OECD（经合组织）数据显示，截至2009年的10年时间内，韩国制造业的人均总劳动力薪酬跳涨了119%，高于美国40%和欧元区27%的上涨速度。

除了劳动力成本提升，在过去的一年里，韩元汇率的走强也在一定程度上降低了通用汽车从韩国市场出口的竞争优势，毕竟，通用汽车在韩国5个工厂生产的80%的车型都是出口至海外其他市场。同时，韩国本土汽车市场这两年也不景气，去年韩国国内销量为140万辆左右，下滑4.2%。

封闭市场

韩国市场不仅容量小，同时，也是一个相对封闭的市场，海外汽车品牌在韩国市场不具备竞争优势。

2002年，通用汽车收购韩国大宇汽车以进入韩国市场并获得大宇小型车技术,现在韩国市场已经成为通用汽车重要的出口基地和研发中心。罗威分析认为，大宇作为通用汽车的合作伙伴来说，帮助通用汽车提升了小型车技术，将生产的小型车出口到中国等其他市场。但是，在韩国本土市场，与现代-起亚集团相比，大宇公司并不能给合作伙伴通用汽车带来规模化上的竞争优势。

2012年，韩国5家汽车整车生产企业全球销量共计819万辆，其中出口销量为679万辆，国内销售为140万辆。在韩国国内市场上，现代-起亚市场占有率接近八成，其中现代汽车占42.89%，起亚汽车33.78%，其他份额主要来自通用大宇、双龙，雷诺三星等在韩国本土生产的汽车品牌，进口车奔驰和宝马所占的市场份额微乎其微。

多年来，韩国本土汽车厂商始终保持了以上的竞争格局，其他汽车制造商并未在韩国取得突破性优势，现代-起亚品牌在更早的时期在国内市场占有率曾超过90%。由于不具备规模化优势，海外汽车品牌就很难与现代-起亚竞争。

造成韩国汽车品牌为主导的汽车市场存在多方面原因，其中一个重要的原因是韩国政府对本土品牌的支持，韩国政府通过高关税将外国制造商拒之门外。

韩国政府在1962年制定的《汽车工业保护法》大幅度提高了进口汽车关税，直到1985年韩国汽车工业基本成熟后，才在其他国家的压力下开始逐步降低。1987年进口关税降低到50%，1989年降到25%，到1995年降到8%左右就基本保持稳定，不过即使关税一再降低，进口车仍然在韩国难以有大幅度增长。韩国方面还对汽车进口商推出非关税壁垒措施，比如限制建立进口汽车销售网络；禁止在电视和报刊上做广告；对购买外国高级汽车的顾客进行特别税务检查；政府推行反奢侈和“买韩国货”运动等。

“拥有民族品牌的汽车”是韩国汽车工业规划的重要目标、汽车工业发展的重要标志。他们在较短的期限内有一个非常明确的目标：KD组装—引进技术，提高国产化—国内自主生产，自主开发车型—促进大企业成为骨干企业集团，参与海外竞争—拓展海外市场。

“韩系汽车制造商包括现代及起亚占据充分的本土优势,在上世纪90年代异军突起，在主要竞争领域比如价格、车型、性能、油耗等方面都提供了丰富的、足可以媲美全球竞争对手的产品。当然在韩国汽车起步时期，韩国政府对于本土汽车厂商的倾斜政策也确保了韩系制造商成为市场上的强者。” 普华永道大中华地区汽车行业主管合伙人廖仲敏告诉记者。


(编辑:付筱婧)

Click here to read the original article

Bill Russo to Discuss Outlook for Chinese Auto Market and Luxury Brands at Investor Conference Call

Investor Conference Call, August 21, 2013

Wednesday, August 21, 2013, 10:00 AM EDT

Expert:  
William Russo
Founder and President, Synergistics Ltd.

Wed, 8/21 at 10 a.m. EDT 
REGISTER 
Replay available upon request.

EXPERT INSIGHTS ON:

• Five year growth outlook for China’s premium car segment
• Big three German OEMs vs. smaller players
• Demand drivers and adoption rates for SUVs and sports sedans
• Premium car buyer spending patterns, customer loyalty and opportunities for new brands
• Market segmentation from eastern to western provinces and from large to small tier cities
• Companies: Ford (F), General Motors (GM), Volkswagen (VOW), Toyota (TM),Honda (HMC), Chrysler, Nissan (NSANY), Hyundai (HYMTF), Daimler AG(DDAIF), BMW AG (BMW)

The Chinese auto market has passed a key inflection point, downshifting to a more sustainable growth pattern in-line with GDP. Competition is intense among the foreign and domestic vehicle OEMs as they adjust to the slower environment and attempt to stay profitable. While structural challenges will likely result in negative pricing and margin pressures, certain segments will continue to drive profitability, including luxury cars and SUVs. It remains to be seen if automakers and their partners can understand and anticipate these developments and implement strategies to diversify revenue streams.

ABOUT OUR EXPERT:

Bill Russo is President of Synergistics, Ltd, a consulting firm to the auto market and he has more than 25 years of experience in the industry. Prior to Synergistics he was VP of Chrysler Northeast Asia, where he successfully negotiated and secured government approval for six vehicle programs with three different Asian partners. In this time period, he launched a regional holding company as well as two distribution companies and oversaw the industrialization of the first Chrysler and Dodge-branded vehicles in Asia. He holds a U.S. patent for his innovative efforts towards reducing automotive new product development cycle time and is a published author and opinion leader whose viewpoints have appeared throughout several media outlets.

OUR ANALYST:  
Michael Cohen         Director, Consumer Research