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News & Reviews
Last 7 Days
by John Cadogan

There was no shortage of automotive news in 2009. The Australian market looks like falling about 100,000 units, down to about 918,000 sales this year from 1,012,164 in 2008  (it’s worth remembering that 100,000 cars is a line of traffic that stretches halfway from Sydney to Melbourne).

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But the local slug just doesn’t compare to the one that’s taking place overseas. The market in the United States fell from 16-point-something million to about 10 million. The ‘missing’ 6.5 million cars, if you could find them and line them up, would be a traffic jam stretching from Sydney to Perth – seven lanes wide. So that’s a massive slug for the car industry.

This hit, together with government incentives, meant China overtook the US to become the world’s biggest car market in 2009.

The recession is the canvas upon which all the other top automotive news stories is written. Yet it’s not all doom and gloom.

Ford makes a profit

Shock! Ford surprised the market by posting a $1.1 billion net profit in the third quarter of 2009.

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In the US the company managed this by getting its product range right – consumer reports say the company’s quality is up there with Euro and Japanese cars, and the company also enjoys more IIHS ‘Top Safety Pick’ awards than Honda or Toyota.

Volkswagen overtakes Porsche

After an epic stoush, which at times saw Porsche’s David about to get the upper hand on Volkswagen’s Goliath, Volkswagen will subsume Porsche. Ousted Porsche CEO Wendelin Wiedeking, almost pulled off the coup of the decade, borrowing $17-billion to finance the purchase of options equivalent to a 51 per cent stake in VW, but couldn’t stump up the cash to exercise the options, and the house of cards collapsed. Goliath won.

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This is all part of Volkswagen’s grand plan for world domination that sees the company on pole position by 2018, overtaking Toyota to become the largest car company on earth.

China becomes the new automotive superpower

The numbers – at least in forecast – are in: The Chinese will buy almost 13 million cars in 2009 while the USA will manage to purchase ‘only’ 10 million. It’s a done deal. Just two years ago, before the recession, forecaster JD Power predicted it would take until 2025 for China to overtake the USA. What a difference a global financial crisis makes.

In the spirit of ‘show me the money’, US billionaire investment guru Warren Buffett used 2009 to take a massive shareholding in Chinese electric car maker BYD, which expects to sell electric cars with a 400km cruising range in the US in 2010.

Hyundai shifts into top gear

Swimming against a massive downward trend globally, Hyundai managed to post double-digit growth in many markets. Amid the doom and gloom of the US, Hyundai grew its market share from 3.1 per cent to 4.3 per cent in 2009 – and an extra 1.3 per cent of a 10-million-unit market is a tidy acquisition, thanks very much. US sales grew by more than 20 per cent, so did sales in Canada, which topped 100,000 units for the first time.

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In Australia we keep getting press releases like these: “Hyundai Drives Past 60,000 Units” (Dec.), “Hyundai Sales Up +106 per cent for Highest Ever October Sales Result” (Nov.),  “Hyundai Achieves Highest Ever September Sales Result (Oct.), (Ditto August), and “Hyundai Moves to No. 4” (August), etc.

Currently Hyundai’s Australian sales are a shade over 59,000 vehicles for the year to November 2009. That’s a surge of 41.6 per cent. In a down market.

The government incentives to ABN holders here run out on December 31, 2009, and the economy emerges from recession, and neither of these is especially good news for Hyundai, when Toyota looks in its rear-view mirror, the company it’s most concerned about seeing right up against its rear bumper is Hyundai. (This won’t happen for some time, however – Toyota currently sells three times as many vehicles as Hyundai.)

The Internet becomes unstoppable in automotive communications

Forget radio and TV – and especially print. The web is where people go when they want to be informed about cars, now. The Chevy Volt’s chief engineer Andrew Farah found himself tweeting 140-character answers to anyone who posed them at the vehicle’s unveiling.

One of the first things GM did, post bankruptcy, was launch a new ‘ask Fritz’ website which invited the public to pose questions and comments direct to CEO Fritz Henderson.

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When GM chairman Ed Whitacre ousted CEO Fritz Henderson and took the top job for himself, it was Facebook that offered alternative comment in the face (literally) of the traditional bland PR department commentary and stony silence. (A person purporting to be Fritz’s daughter Sarah let rip in an expletive-heavy rant on the GM Facebook page. It was pulled down after 15 minutes, but not before the news had proliferated throughout the web. It’s still online today.)

One no longer has to wait until the Friday motoring supplement in the newspaper for informed automotive commentary (or the monthly on-sale date of a specialist magazine). With the internet, automotive news is now.

The internet has changed the way information about cars is presented, it’s changed who can comment (and how effectively they can be heard), and the traditional mediums are worried.

A death in the family makes Toyota the world’s new number one … then the big T hits a wall

When the old GM declared bankruptcy, Toyota moved by default into the number-one global spot. And then the GFC really hit. After decades of steady growth and profitability, the development of a devoted customer base, strong resale values and unquestioned quality, sales plummeted. Massive losses – billions of dollars, the first losses in decades – and production cuts were the order of the day.

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Participation in Formula One was unceremoniously dumped. Then a former top in-house lawyer alleges the company is engaged in compensation claim cover-ups. Massive safety recalls didn’t help the ‘unquestioned quality’ reputation built up over decades of smart marketing. A family dies at high speed when an accelerator jams, the emergency services conversation is recorded … and 3.8 million vehicles are recalled.

Adding insult to injury, Volkswagen is now nipping at Toyota’s heels for the number one spot, about eight years ahead of schedule.

General Motors and Chrysler emerge from bankruptcy

Billions of US taxpayer dollars are devoted to the rescue packages for GM and Chrysler. The bail-out took place mid-year, and the bankruptcies were among the shortest ‘Chapter 11’ proceedings in US history.

Fiat and Chrysler are now joined at the hip, and technology will soon flow between them – hopefully to the betterment of both brands. Fiat itself is no stranger to tiptoeing around bankruptcy, managing narrowly to avoid it earlier this century. But it’s Fiat that owns Chrysler, not the other way around. Italy will call (and is calling) the shots. This could be interesting for Australia, where Chrysler products (the Chrysler, Dodge and Jeep brands) are imported by a factory owned company (Chrysler Australia) while Fiat’s products (Fiat, Alfa Romeo and Ferrari) are imported by a third party (Ateco Automotive).

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GM has a board full of federal government control and chaired by former AT&T (telecommunications) boss Ed Whitacre. At the time of writing, Ed W is busily rearranging the deckchairs – ousting CEO Fritz Henderson after hiring a new chief financial officer. Saab is already Chinese, and brands like Pontiac and Saturn have simply disappeared. Against this backdrop, it still looks as if nobody at GM really has his eyes on the ball labelled ‘sell Saab’. Every time a suitor presents for the troubled GM-owned Swedish car brand, the deal falls over. One can only wonder how bad the buyer’s terms and conditions can be, when the company’s preferred option appears to be winding the brand up. (GM is the biggest foreseeable reason to stay tuned to automotive news reports for 2010, by the way. This story’s not over, by a long shot.)




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