WCA September 2008

commodities throughout the world. American officials said that Mr Paulson rejected the charge, saying that high oil and food prices reflected an imbalance in supply and demand for both. The two sides did agree to meet again. In preparation for this, they are to set up a framework to discuss environmental and energy cooperation, specifically to improve joint efforts on clean air, water, energy generation, transportation and conservation. Some genuine advances in Chinese-American relations ❖ ❖ were reported the day before Mr Paulson spoke at Annapolis, at a signing ceremony in Washington hosted by the US Chamber of Commerce. Chinese and American businesses announced $14 billion in new deals: $8 billion in Chinese investments and purchases in the US, $6 billion in American purchases and investments in China. Among the US companies signing deals were Chrysler, Ford and General Motors (engines); Motorola and Qualcomm (telecom); and IBM, Cisco Systems, Sun Microsystems and Texas Instruments (semiconductors and electronic components). Of related interest . . . China is the most popular destination for foreign ❖ ❖ industrial investment in the world, attracting almost $83 billion in 2007. But, with wages in China rising close to 25% a year in many industries, in dollar terms, greater numbers of multinational corporations already active in China are establishing or expanding Asian bases elsewhere. The strategy that analysts call “China plus one” enables a company to reduce the risks of overdependence on factories at a single site. Favoured destinations for American and other multinationals with existing capacity in China are Vietnam, Thailand, and North Korea. If the trend accelerates, it could mean further losses to Asia of manufacturing in Mexico and Central America. According to the editor of the emerging markets ❖ ❖ newsletter Silk Road Investor, impending improvement in relations between China and Taiwan will help increase Chinese power in Asia and diminish American influence there. Yiannis G Mostrous wrote (29 th June) that China’s undertaking of “a more nuanced approach to diplomacy” with Taiwan – raising prospects for an easing of tensions and better economic ties between the mainland and the island – favours this outcome. Taiwan, too, stands to gain from the evolving political landscape in Asia, according to Mr Mostrous, who said, “both sides seem to recognise the value in smoothing the fractious relationship.”

with 48.1% for ten Asian brands sold in the US. Toyota Motor, of Japan, pulled to within 10,000 vehicles of overtaking GM’s sales in the United States. Honda posted its highest monthly sales total ever in May, and the Honda Civic – a compact available with either a hybrid or a gasoline engine – displaced the Ford F-series pickup truck as the month’s best-selling vehicle. Honda’s midsize car, the Accord, and two Toyota sedans also outsold the F-series, whose sales dropped 33%. US vehicle sales across the board weakened in May as ever-higher gasoline prices continued to dampen the market. Total sales fell to 14.27 million units, their lowest monthly level in ten years and down from 14.4 million units in April. The May total was down 13% from May 2007. Across the industry, sales were down 14% for the month. Even Toyota posted an 8% decline, although its market share increased. Chrysler and China’s Great Wall Motor Company explore an alliance Chrysler LLC on 4 th July announced an understanding with China’s Great Wall Motor Co whereby the two firms will study the possibility of a sharing arrangement. The smallest of Detroit’s Big Three auto makers already has a deal with China’s largest independent producer, Chery Automobile Company (Wuhu, Anhui Province), to produce a low-cost model for sale under the American company’s Dodge brand. The pursuit of foreign partnerships reflects Chrysler’s hope of raising its sales abroad, especially in the fast-growing Chinese market. Chrysler and Great Wall will consider ways to use each other’s distribution networks and component and technology capabilities, Chrysler said. A statement released in the US quotes spokeswoman Shawn Morgan as saying the agreement “represents part of Chrysler’s ongoing efforts to explore opportunities to expand the company’s involvement in the development of China’s auto industry, as well as growing Chrysler’s global business through the right partnerships.” For their part, Chinese producers are looking overseas to gain expertise for their technology and marketing. Great Wall, based in the city of Baoding, west of Beijing, is best known as a producer of sports utility vehicles and trucks but is expanding into cars. Chrysler (Auburn Hills, Michigan) reported sales for the first five months of this year down 19% from the same period of 2007. The company has been obliged to deny rumours that it is close to seeking bankruptcy court protection. In other news of Chrysler, in response to the drastic ❖ ❖ slump in domestic demand for large vehicles, the company said in June that it would close one of its two minivan plants and reduce output of its long-awaited new pickup truck. Both plants affected by the announcement are in Fenton, Missouri, near St Louis. The minivan plant, which opened in 1959 and was closed for several years in the early 1990s, is to be idled “indefinitely,” suggesting no expectation that it will reopen. Chrysler is operating some plants on overtime to build more of

Automotive

In a first, Asian auto makers outsell Detroit’s Big Three

As reported on 4 th June by Autodata Corporation, General Motors, Ford Motor and Chrysler, taken together, accounted for a record low market share of 44.4% in May, compared

28

Wire & Cable ASIA – September/October 2008