Competitive Connection

December 10, 2007

A look at the competition
Chery Automobile drives an industry shift
Barely a decade after it was founded, state-owned Chery has emerged as China's largest independent vehicle maker -- and one that is determined to compete against the world's automobile giants. Its products -- mostly inexpensive cars and SUVs -- are gaining a following in developing countries hungry for low-cost vehicles.

In July, the company signed a landmark deal with Chrysler to sell a series of small cars made by Chery under the American auto maker's Dodge brand. Chrysler has said it plans to start selling the cars in Latin America and other developing markets next year and aims to have them on the market in the U.S. and Western Europe by 2009.

The pact marks the first time that one of Detroit's Big Three has outsourced the production of entire vehicles to a Chinese company. —Source: Wall Street Journal, December 4, 2007
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What others are saying. . .
Pessimism over '08 could crimp auto production
Most industry players are focused on next year's increasingly pessimistic outlook: amid continued market pressures, 2008 is poised to deliver the worst auto-sales results in 10 years.

A Wachovia Capital Markets survey found about 34% of dealers plan to cut new-vehicle orders going forward, a jump from 19% in September, the last time the survey was done. The survey sampled three dozen auto retailers nationwide.--Source: The Wall Street Journal, December 1, 2007
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What Others Are Saying
Lower Industry Sales Expected
GM CFO Fritz Henderson said the company expects U.S. auto sales to be around 15.7 million vehicles in 2008, far below what auto makers had been enjoying.

GM has overhauled its product portfolio and cut billions in structural costs, but it has been hurt by a sustained downturn in demand that has been caused in a large part by the housing slump, credit constraints and high fuel prices. Auto makers had become accustomed to seeing annual industry sales of close to 17 million for most of the decade. --Source: Wall Street Journal, Nov. 30, 2007
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Then and Now
American’s impressions on Japanese cars
Americans' once widespread resentment of Japanese cars is on the wane as sales of those brands continue to rise and foreign manufacturers continue to operate factories in the United States, according to an independent study done for the Japanese Automobile Manufacturers Association.

Seventy percent of Americans believe that if a car is built in this country, regardless of the country of origin, it is an American product, according to a survey of 1,013 adults done in September by Opinion Research Corp. 

Japanese automakers have created 426,926 jobs in factories and dealerships in the United States.

"You have so many U.S. citizens employed at plants owned by Asian companies, and people see this. Then there's the increasing number of vehicles on the road that have Japanese origins. All of this has forced the consumer to realize that these things aren't passing fads. They are here to stay," said Tom Libby, senior director of industry analysis at of J.D. Powers & Associates' Power Information Network. 

The survey was done 50 years after Toyota first started selling cars in the United States and 25 years after Honda opened its Maryville, Ohio, factory, the first car plant built in this country by a Japanese firm. Nissan built the first Japanese truck in the United States on June 16, 1984, at its Smyrna, Tenn., plant.

With 63 percent of the Japanese vehicles sold in the United States in 2006 being built in American factories, the number of vehicles imported from Japan has dropped from 3.4 million in 1986 to fewer than 2.3 million in 2006.—Source: Pittsburgh Post Gazette, November 29, 2007
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What others are saying . . .
Good product news for GM
GM placed three vehicles in Car and Driver magazine's 10 Best list for 2008, which appears in the January edition. 

And GM is the only domestic company to make the top 10.  GM's nameplates on the current list are Chevrolet's Malibu and Corvette and the Cadillac CTS. 

"This year, the strong showing by General Motors proves that the company's stable management and consistent strategy is really starting to pay off. For the new Chevy Malibu to make our list demonstrates that, for the first time in about 20 years, GM can compete with the likes of Toyota and Honda in the important family-sedan segment," said Csaba Csere, the magazine's editor in chief.  

Alisa Priddle, senior news editor at CarandDriver.com, said that the three GM models are impressive -- especially the Malibu, which she tested back-to-back with the Toyota Camry. 

"The Malibu was definitely a better performer than the Camry," she said.—Source: The Los Angeles Daily News, December 7, 2007
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