WCA September 2014

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Wire & Cable ASIA – September/October 2014
From the Americas
Jeep Grand Cherokee and Wrangler will be the first
FCA products offered in India. The company is looking for
15 to 20 dealers in India’s major cities as it puts together a
dealer network.
Eventually, FCA wants to produce Jeeps in India. The
company is in a joint venture with Tata Motors near Pune,
and Mr Manley said there is enough excess production
capacity at the factory there to begin building some Jeeps.
“If you are going to be successful with Jeep you are going
to have to localise vehicle production in India,” he told
Mr Snavely.
 Jeep sold 731,565 SUVs globally in 2013, and
Mr Manley said it is on track to sell more than a million
this year. But the Jeep chief, while confident, is also
realistic about India’s intensely competitive marketplace.
“In recent years a huge number of global original
equipment manufacturers have increased their
production,” Mr Manley told the Free Press. “We see
pricing as being very difficult.”
 Doing well by doing good? Tesla invites rival electric car
makers to make free of its technology.
Tesla Motors (Palo Alto, California) said on 12th June that
it was lifting the lid on its trade secrets in an attempt by
CEO Elon Musk to bring down costs in the electric car
industry and open business opportunities. Tesla, which
has enjoyed considerable success with its luxury electric
vehicles, pledged itself not to initiate any patent lawsuits
against competitors.
Mr Musk has repeatedly asserted that his primary goal
of more widespread electric car usage is more important
to him than Tesla’s ultimate success.
But the creation of a larger market for electric cars would
also probably have the incidental effect of dropping the
cost of his company’s charging-station infrastructure.
Industry experts have tied Tesla’s long-term future to the
manufacture of a low-priced, mass-market model, and
Mr Musk has promised an electric car costing less than
$35,000 within the next three years. Because meeting
that target would require a sharp reduction in battery
costs, Tesla will build a larger-scale battery operation.
Initial capacity of the plant is to be 500,000 batteries a
year – far in excess of Tesla’s current needs. Presumably
other electric car makers, using technology from Tesla,
might choose to supply their battery needs from that
source.
Tesla has worked with other car makers in the past,
helping them develop electric cars, and has supplied
batteries to Japan’s Toyota and Daimler, the German
owner of Mercedes-Benz. Both are shareholders in Mr
Musk’s company.
Elsewhere in automotive . . .
 Daimler and Renault-Nissan on 27th June announced a
joint venture to produce a new generation of compact
Mercedes and Infiniti cars in Mexico. The car makers
said they would invest about $1.4 billion to build a plant
in Aguascalientes, about 300 miles north of Mexico City,
where Nissan already has a major production operation.
The vehicles produced by the 50-50 partnership
are to carry different brand names but share many
components.
The project reflects a trend for car companies to share
the costs of developing and producing new models
while maintaining separate brand identities. Mercedes
and Renault-Nissan, the French-Japanese alliance,
already make four-cylinder engines together at a factory
in Decherd, Tennessee.
But the chief executives of the two companies made it
plain that there are no plans for a merger. In Stuttgart,
the home of Daimler, memories endure of the company’s
disastrous acquisition in 1998 of the US car maker
Chrysler and the decade of disintegration that ensued.
Manufacturing
China is giving way to Mexico as
American companies in greater numbers
relocate their labour-intensive factory
operations
“When you have the wages in China doubling every few
years, it changes the whole calculus.”
Christopher Wilson, an economics scholar at the Mexico
Institute of the Woodrow Wilson International Center
for Scholars in Washington, had cited the main reason
why Mexico has become the most competitive place to
manufacture goods for the North American market. It has
also, in his view, become the most cost-competitive place
anywhere in the world for some types of manufacturing.
In an interview last spring with Damien Cave, a Mexico
City-based correspondent for the New York Times, Mr
Wilson took note of a reversal that until recently was
scarcely conceivable.
With labour costs rising rapidly in China, American
manufacturers of all sizes are looking south to Mexico with
what economists see as an eagerness reminiscent of the
early years of the North American Free Trade Agreement
in the 1990s. (“As Ties With China Unravel, US Companies
Head to Mexico,” 31st May)
Wrote Mr Cave: “From border cities like Tijuana to the
central plains where new factories are filling farmland,
Mexican workers are increasingly in demand.”
According to the International Monetary Fund, Foreign
direct investment in Mexico hit a record $35 billion in 2013.
American trade with Mexico grew by nearly 30 per cent
since 2010, to $507 billion annually.
Over the past few years, manufactured goods from Mexico
have claimed a larger share of the American import market