WCA July 2013

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Wire & Cable ASIA – July/August 2013
The swiftness of the auto industry’s response to changing
Chinese preferences may be gathered from the plans of the
three biggest US automakers: General Motors, Chrysler, and
Ford. As reported by Mr Bradsher:
❖
❖ General Motors announced that it would introduce
nine new or restyled SUV models in China over the
next five years, and disclosed that it would build four
more factories and add 6,000 jobs to accommodate its
ever-rising sales there;
Bob Socia, president of GM China, which has for years
been neck-and-neck with Germany’s Volkswagen as
Chinese market leader, said that his company’s focus is
on luxury vehicles and SUV’s. “Not long ago, both were
considered niche segments,” Mr Socia told the Times.
“Both are now mainstream and growing rapidly.”
❖
❖ A Chrysler executive said that the company would start
making Jeep Cherokees in Changsha in southern China
by the end of next year.
John Burton is the general manager of the Fiat and
Chrysler joint venture with the Guangzhou Automobile
Group. With its factories barely able to keep up with
demand in China, he declined to speculate on when or
even whether the company might export Jeeps.
“Potentially we could,” Mr Burton said at the show in
Shanghai. “But if the Chinese market sucks them up
then they’ll stay here.”
❖
❖ For its part, Ford was promoting its Lincoln brand, which
it is bringing to China. Having opened one assembly
plant in Chongqing last year, Ford is building another
assembly plant, an engine factory, and a transmission
factory in Chongqing, and assembly plants in Hangzhou
and Nanchang.
Jim Farley, Ford’s executive vice president for global
marketing, sales and service – and of the Lincoln brand
– said that midsize cars are not only the largest market
segment in China: they now bulk larger than the entire
auto market in Japan, or the combined auto markets of
Germany and Britain.
❖
❖ The shift toward bigger cars and SUVs is prompting
concern in Beijing, where air pollution is so severe as to
threaten a wave of emigration. Policy makers there are
weighing whether to follow the example of the Obama
administration in the US and the European Union in
tightening gas mileage regulations.
“The most important discussion around this area is the
changing fuel-economy requirements,” Ford’s Mr Farley
said in Shanghai.
❖
❖ Stricter rules could hurt sales of the largest models, but
automakers have been getting ready by offering many
cars and SUVs with slightly smaller engines than are in
use in the United States.
And, Mr Bradsher noted, suburban and rural retreats
from polluted cities in China have become fashionable.
Additionally, tens of millions of Chinese travelling
overseas are becoming aware of the international
popularity of higher-riding vehicles.
Michael Dunne, an automotive consultant specialising
in Asia, shared his views with the Times . “SUVs were
definitely uncool to drive here,” he told Mr Bradsher
at the Shanghai show. “Now something is changing.
They’re cool.”
Brisk sales in the American market of
the midsize Lexus luxury sedan lead to
Toyota’s latest US expansion
With luxury cars as much in demand by American buyers
as by their Chinese counterparts, Toyota on 19th April
announced that it would build its Lexus ES 359 for the first
time in the United States. Toyota said that it would invest
$360 million to install a new production line at Georgetown,
Kentucky, that will build about 50,000 of the flagship sedans
a year. The Lexus ES is selling twice as fast as it did in
2012. The expansion will increase annual production at the
plant, which already assembles the Japanese car maker’s
Camry, Avalon and Venza models and employs about 6,600
people, to about 550,000 vehicles a year. Toyota is also
investing $170 million in upgrades to the plant.
As reported by Hiroko Tabuchi in the International
Herald Tribune, the factory, which opened in 1986, was
Toyota’s first wholly owned site in the US and is its largest
manufacturing plant outside of Japan. In a broadcast of
the Lexus announcement streamed live from Georgetown,
Gov Steven L Beshear said that residents of his state
actually view Toyota as a Kentucky company. Akio Toyoda,
president of Toyota Motor, voiced similar sentiments. “For
manufacturing, Kentucky is Toyota’s home,” Mr Toyoda
said in New York. “It has some of the most experienced
engineers in the world.”
Ms Tabuchi, who is based in Tokyo, noted that Toyota has
been eager to bolster the Lexus brand in the United States,
its biggest overseas market, where luxury car sales now
outpace sales of other autos. The Kentucky expansion
underscores how foreign automakers are seeking to
capitalise on robust car sales in the US after years of painful
cutbacks by domestic companies. (“Toyota Expansion
Reflects a Push for US Lexus Sales,” 19th April). Toyota also
wants, Ms Tabuchi wrote, “to shift more production from
Japan to overseas markets to better insulate itself from the
currency gyrations that have wreaked havoc on its bottom
line in recent years.”
❖
❖ Toyota’s chief executive for North America, James
E Lentz, told the Herald Tribune that the Kentucky
investment came on top of $2 billion in investments
to expand and upgrade Toyota factories in Indiana,
Mississippi, West Virginia and Canada. Over the past
two years those expansions have also created new jobs.
Traditionally tightly controlled from its headquarters
in Toyota City, Toyota has revamped its management
structure in recent months to give more authority
to regional managers. These include a new team of
executives in North America led by Mr Lentz, who told
Ms Tabuchi that bringing Lexus production to the United
States was the first decision made by his team, and that
he expected similar decisions to follow.
Dorothy Fabian – Features Editor