28 March 2017

Geely UK Investment Electric


The London Taxi Company was acquired by Chinese car manufacturer Geely in 2012. It has just finished building a new assembly plant in Coventry, England, to produce hybrid taxis and electric powered vans. The owners sees both the hybrid taxi and electric van as a cleaner alternatives to diesel commercial vehicles, which are heavy polluters.

Carl-Peter Forster, chairman of LTC commented “The opening of our new plant sets a number of records. It’s the first brand new automotive manufacturing facility in Britain for over a decade, the first dedicated electric vehicle factory in the U.K., and the first major Chinese investment in U.K. automotive.” Impressive.

London Taxi unsurprisingly is known for taxi production. The new TX5 taxi cab is coming, with a petrol-electric plug-in hybrid drive train and all aluminium body. Nothing is carried over from its predecessor. An electric van will follow later.

The lower pound will help export competitiveness as the vehicles are destined to be sold globally. Diesel is surely a fuel that will be increasingly marginalised as cities seek to improve air quality and the health of those who have to live in them. Geely's investment is therefore well timed.

26 March 2017

Vested Interest

It's understandable that what affects you is important. That could include something that will raise challenges to your business or cost you financially. However, painting a picture that is misleading or false to achieve what is desired is dishonest. Yet that is the modus operandi of many today and the media are part of the misinformation propaganda.

Take the UK. When the Commonwealth was losing its common wealth benefit, the UK feared being isolated. It had been barred entry to Europe in the 1960's but did enter successfully in the 1970's. Now it's future was secure in a union that was of mutual benefit.

Erm, not quite. The UK is increasing its borrowing as an over inflated currency hampers exports. Excessive borrowing to prop up a lifestyle is not sustainable, but few notice or care. Few worried about Greece either..... Anyway, the UK imports about half of the food it consumes and Germany supplies far more cars to the UK than the UK makes for its own market. Bonkers! I just found this article (the link is at the bottom of the page) that shows what's been going on.

Between 1998 and 2014, vehicle imports from the EU to the UK jumped from £14.3 billion to £31.3 billion. Components took the total to £43 billion. Meanwhile exports from the the UK to the EU crept up from £8 billion to £11.9 billion, components taking it to £14.6 billion. Increasingly the trade is one way.

So any dire warnings that a trade barrier will hurt the UK and no mention of the EU being affected is totally inaccurate. Ironically the threats of a trade tariff are issued from the EU side and yet many will hold the UK responsible if it is implemented. Wouldn't it be hilarious if the EU imposed the 10% duty it threatens and the UK responded "We'll match your 10% and raise you 10%.

Hang on you say, aren't UK vehicle exports to the EU strong? Just over half go there and the rest elsewhere. Yes, half the exports is still a lot but don't forget the enormous level of EU imports. The pound is already well down since the decision to leave the EU so adding a tariff will greatly affect imports from the EU, helping local UK manufacturers. Trade deals elsewhere would also assist with UK  exports.

On that note from 1998 to 2014, UK exports outside the EU rocketed from £2.9 billion to £17.9 billion, zooming past the EU in value. That says one thing, the EU isn't working for the UK car industry but the rest of the world is. In reality, the EU is at present the vehicle trade winner with the UK, especially Germany.

So vested interests and the media generally paint a false impression of the likely outcome of a tariff between the UK and the EU. The lower pound is already working but the UK trade deficit is still far too high. If the locals were more aware and supportive of domestic manufacturing and production then that would be a huge help. The problem is UK ignorance and apathy, so the trade deficit conundrum remains. All I want is a clear picture of what is going on in the world. Unfortunately the world isn't honest enough for me to expect that.

To read more about the subject by someone more knowledgeable than I am, simply click here. The article is "Great British Cars: Getting Nowhere in Europe".

PS. Human machinations whether politics, commerce or the media - to name a few - I find abhorrent, so writing about it isn't easy for me.

21 March 2017

LDV New Zealand


LDV commercial vehicles has a colourful history. They were part of BL many moons ago, hence the (L)eyland. Later it was owned by (D)AF, therefore the LDV name. In 1993 it became an independent operation and eventually became owned by SAIC in China in 2010 after some turbulent times leading up to that final acquisition. Production was moved from the UK to China.

Things now seem to be on the up with LDV. In New Zealand it is going exceptionally well, the brand name remembered for its association with the NZ ambulance service some years ago. Popular vans  by Toyota, Ford and Hyundai may not have seen LDV as a huge threat but they will be now. NZ has the highest percentage CV penetration for the brand anywhere in the world

They arrived in NZ late 2013 with 45 sold. In 2014 nearly 400 and 2015 close to 500. Over 1,000 were registered in 2016. There are 17 dealers which also sell the SsangYong brand, which is a nice fit with their range. The range consists of four vans, a cab chassis, two mini buses and a large MPV. A range of pick up trucks will be added mid-year and as this is a very popular vehicle in NZ, it will do well.

When China started building vehicles, I expected cheap cars to flood in. A few dipped their toes in the water but they didn't succeed. Light commercial vehicles seem to have much more potential. I don't recommend Chinese brand cars due to their crash safety ratings but the CVs seem to be much more sorted than the cars.

Picture source: LDV NZ.
Text source: RayCee.

14 March 2017

Takata


One song says love changes everything, and so does money. Corruption is rife in the world today and money is so often the motivation. Even human life can be a secondary consideration in the quest to gain or protect money.



Cars are convenient but also dangerous. Safety features are important to consumers and modern cars are full of  such life saving features. I find some such as lane departure warning as quite laughable but most are welcome additions. I must say as one who has always used seat belts I thought airbags were for Americans too lazy to buckle up (no offense intended). However, they do add to occupant safety so I've been won over.

Which leads to the point of the article. Japanese firm Takata changed the main ingredient for its airbags from tetrazole to ammonium nitrate in 2001. Ammonium nitrate provides more bang in a smaller volume than other propellants, which allows the company to offer a more compact device to manufacturers. It was also cheaper to make. However, they have in a few cases caused death by exploding and sending pieces of the device into the car's occupants.

Employee emails show that there were “dire warnings about safety and quality lapses years before Takata Corp would fully acknowledge the threat posed by its defective airbags,” according to a report by the Senate Commerce Committee. Senator Bill Nelson, a Floridan Democrat, says it now appears that Takata was aware of “serious safety and quality control lapses” in its factories as early as 2001.

Company officials debated the data regarding the product and testing of the inflator was manipulated to cover the issues. Nissan, BMW of North America and Ford have accused their airbag supplier Takata of fraud in a lawsuit to cover losses they incur because of its faulty inflators that have been linked to at least 17 deaths worldwide. Court documents filed in United States claim five automakers were aware of potential defects but continued using Takata’s airbags because they were less expensive. The allegations involve Ford, Honda, Nissan, Toyota and BMW.

All in all a sad tale of a business trying to get a competitive edge but getting it wrong and trying to cover it over. Did they really think they would get away with it? The cost of owning up would have been huge. It got worse by not coming clean. Money changes everything.

11 March 2017

The Car Industry Bully Boys - Part Two

The UK sourced Honda Civic Hatch Stateside

This is a two part series. If you haven't read Part One, it sets the scene for this Part Two. To view that one first, simply click here. In part one, I looked at the pressure UK car maufacturers are trying to exert. I ended the article by asking why aren't European car makers not pressuring the EU to forget about a tariff they have raised and threatened with? There could be several reasons.

One is that the EU is fearful that the union may disintegrate due the the UK's imminent departure. Other countries may decide to leave too and that would create much change. Business hates disruption as it leads to uncertainty and the car industry doesn't want to go there. Trying to bring the UK to heel is deeded the best way to retain the status quo.

Another reason is that the UK simply doesn't have enough component manufacturers. Most are imported so a lower pound costs. A solution would be increase component making in the UK. That would be initially costly and in some cases economies of scale would be lost in the factories where the components are currently made.

Also most UK car makers are importers of fully built up cars as well, in many cases the majority of what they sell in the UK is imported. It has been cheaper to import into the UK with its historical over valued currency. Sterling is down so no longer better to import. Many car makers already have ample capacity, so they won't want to open UK plants. However, that may be a tempting solution if the present currency rate remains.

I cannot recall such public outpourings of negativity from an industry in trying to change political direction. Stand over tactics may work in some countries but I don't see it happening here. What it does do is make the car manufacturing industry in Europe look like bullies and rather pathetic ones at that. They are used to getting their way and can get nasty if they don't. Just as you would expect from any self respecting bully.

PS. Some car makers have been upbeat about the lower pound. Both Aston Martin and Mclaren have said it has been good for the bottom line. Honda’s Swindon factory is capitalising on a lower pound, which has lifted exports of its British built Civic hatchback to the USA and other international markets including Japan. For more on Honda's positive attitude, simply click here.

Picture source: Netcarshow.

Honda is one of a few manufacturers upbeat about UK manufacturing

10 March 2017

The Car Industry Bully Boys - Part One

Aston Martin isn't complaining, so why is Bentley? I know why, do you?

It is a well known fact that the car manufacturing industry influences governments (and vice versa). I read not so long back about the enormous political clout the car manufacturing industry has in one European nation. This same industry doesn't have that sort influence in the UK by any stretch.

Of course we all know that the UK is leaving the EU and from the outset there was political threats and sabre rattling from the political entities within the EU. That seems to have quietened down. It has been replaced by the car industry, notably car manufacturers in the UK. You would think that the biggest noises would come from car importers bringing their products from Europe in to the UK. No, because they have nothing to make threats with, and therefore cannot exert pressure.

Car makers in the UK are less affected than full importers, exporting from a country where the depreciated pound is currently to their advantage. Europe heavily relies on the UK market so a tariff would be massively hurtful to EU car manufacturing and therefore highly unlikely (ie. won't happen).

UK car makers seem to be running a war of words through the media of reduced investment in the UK - and even worse - if a tariff is enforced by the EU. They have something to threaten with and as with bullies, they are using fear to try and get their way.

In one extraordinary example, CEO of Bentley cars (Herr Duerheimer) said unfettered access to Europe is vitally important to the company, suggesting investment in the UK could become an issue. Is he serious? Bentley cars will be built in the UK whatever happens because that is what most customers demand. 80% of sales are outside of Europe anyway, so it's of limited consequence to Bentley. Higher margin vehicles will be less affected as well. It's so ludicrous that the Bentley CEO should suggest what he has.

BMW has come out and said the MINI car doesn't have to be built in the UK. So is BMW going to close a large factory if the EU hold on to their tariff threat? Toyota and Nissan have also suggested issues with investment, none of which I believe.

A final question to be addressed is why aren't European car makers not pressuring the EU over a tariff they have raised and threatened with? There could be several reasons. They will be addressed soon....

Pictures: Netcarshow.

Mclaren is a small but important UK car maker. They seem happy about things