WCA March 2008

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Wire & Cable ASIA – March/April 2008 36
Over the forecast period, China is projected to have the
world’s fastest-growing market, making it the largest
market outside of the US for new commercial airplanes.
In other news of Boeing, the company said that the
South Korean budget airline Jeju Air Co had ordered
five 737-800 planes, valued at $370 million at list prices,
from the American aircraft manufacturer. In a 1 st January
statement, Boeing said it had recorded orders for more
than 4,400 of its 737s, and has unfilled orders on the
books for more than 1,900 planes worth more than
$140 billion at current list prices.
Automotive
Toyota overtakes Ford as second to
General Motors in US sales
Breaking Ford’s 75-year hold on the No 2 position in the
US, Toyota Motor Corp in 2007 sold 48,226 more cars
and trucks there than Ford. According to figures released
on 3rd January by the Japanese auto maker, its US sales
were up 3% last year. Ford, with sales off 12%, said 2007
marks the first time since 1931 that Ford Motor Co was not
in second place to General Motors Corp in US sales.
Someone who has a perhaps unique perspective on
the reversal is Jim Farley, who recently became Ford’s
global marketing chief after a career at Toyota. Taking a
constructive view of the results for 2007, Mr Farley said the
new numbers would not effect any changes in Ford’s plan
for recovery.
“In fact, it actually accelerates the way we’re running the
business,” Farley told Associated Press auto writer Dee-Ann
Durbin. “It accentuates the difference between how we’re
running the business and how our competitors are running
the business. It requires us to stick to the plan, no doubt.
But it also requires us to really accelerate the development
of new products.” Mr Farley noted that Ford had some
winners in 2007, notably with its Edge and Lincoln MKX
crossover models. Ford crossovers grew 62% in the year,
far outpacing the industry average of 17%.
As for Toyota, the company has been typically reticent
about both of its spectacular advances in 2007: over Ford
in the US, and its probable overtaking of GM as world’s top
producing auto maker. (GM has estimated its sales total for
2007 at 9.3 million; Toyota, 9.36 million.) But this is not to
say that Toyota is thinking of reining in its vaulting ambition.
The Japanese auto giant said it expects to sell 9.85 million
vehicles worldwide this year, up from a previous target of
9.8 million.
Toyota does not expect to improve its performance in
the US in 2008, given the persistent housing slump and
problems deriving from defaults on sub-prime mortgage
loans. However, even here there are consolations for the
company, which has a devoted and rock-solid American
following. The US consumer may pass on the purchase of
a new car this year, but only from economic constraint – not
from any ‘patriotic’ fervour of the kind seen when Japanese
auto makers penetrated the US market in the 1980s.
❖
Upstart Tata Motors moves closer to
acquiring luxury models Jaguar and
Land Rover from Ford
Ford Motor Co, on 4th January, named Mumbai-based Tata
Motors the preferred bidder for two of the world’s most
prestigious car brands. Tata, which beat out a rival Indian
auto maker and a US private equity firm, is understood to
have entered the final phase of negotiations with Ford over
Jaguar and Land Rover, for which no firm timetable was
announced. Ford acquired Jaguar in 1989 and Land Rover in
2000 for a total $5.2 billion. These purchases were intended
to complement the acquisitions of Aston Martin and Volvo,
and all four brands became part of the Detroit auto maker’s
Premier Automotive Group. In May 2007, Ford sold Aston
Martin to a consortium of British investors for $921 million.
While it must be a wrench to Ford to part with Jaguar and
Land Rover, as well, industry analysts believe that the three
top-shelf acquisitions have never fulfilled the company’s
ambitions for them. Ford has said it will hold on to Volvo,
and intends to invest to bring the brand upscale.
Los Angeles Times staff writer Ken Bensinger considered
what the purchase of Jaguar and Land Rover will mean
for Tata, which built its first car only a decade ago and is
known for its low-priced cars geared to Indian buyers:
“The acquisition would be a significant step forward for
Tata [whose] control of the two British marques would
immediately make it a player in the luxury market. It also
would provide the Indian car maker access to far more
modern technologies as well as new markets.” Among the
other bidders for Jaguar and Land Rover were Indian auto
maker Mahindra & Mahindra and One Equity Partners, a
New York private equity firm that makes investments for
JPMorgan Chase. Ford has not provided information on
the bidding for the two brands, but outside reports said
the bids were in the $1.5-billion to $2-billion range. Tata’s
advance to the forefront of negotiations for Jaguar and
Land Rover set Mr Bensinger to musing on the curious
aspects of some cross-border acquisitions. He wrote: “Tata
has recently garnered attention for its plans to release a
sub-$3,000 economy car. What synergies exist between
the world’s least expensive econobox and $75,000-plus
sports cars and luxury sports cars that top $100,000
remains to be seen.”
Hyundai and Kia see higher US sales
in 2008
Hyundai Motor Co said on 4th January that it expects to
increase its sales in the United States, its largest overseas
market, by about 10% this year. Citing the American
consumer’s economic uncertainty for its failure to meet last
year’s goals there, Hyundai said it expects to sell 515,000
vehicles in the US in 2008, up from 467,009 in 2007. South
Korea’s largest auto maker had lowered its 2007 US sales
target 8.1% to 510,000 in September, partly as a result of
the belt-tightening apparently stemming from defaults on
high-risk housing loans in the world’s largest economy.
Hyundai also said it was activating a previously announced
plan to build its first factory in South America, and was
looking for a site in Brazil. The annual production capacity
of the plant is to be 100,000 vehicles. Hyundai affiliate Kia
Motors – No 2 in South Korea – is also projecting a better