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  • William Maley
    William Maley

    GAC Puts the Brakes On Entering the U.S.

      ...Damn you trade war!...

    Guangzhou Automobile Group Co. (GAC) made a big splash at the Detroit Auto Show this year with a number of models destined for the U.S. The plan at the time was to begin talking with dealers at the National Automobile Dealers Association convention in March, with sales to follow early next year. But GAC has postponed plans of coming to the U.S. due to the trade war.

    In a statement issued to Bloomberg, GAC said “the escalation of China-U.S. trade frictions” and distribution “uncertainties” had made them decide to put their plans on hold. It's unclear how long this postponement will last, but it will likely be some months - maybe years.

    Many Chinese automakers have made pronouncements to sell vehicles in the U.S. for over a decade, with none coming to shore. As Automotive News notes, Chinese Automaker Zotye as recently as this month was still recruiting dealers and planning to begin sales in the U.S. late next year. Bloomberg reached out to other Chinese automakers,

    • Great Wall: No immediate comment on whether or not it plans on adjusting its plans to coming to the U.S.
    • Lynk & Co. (under the Geely umbrella): Spokesperson said they are "evaluating" plans for North America

    Source: BloombergAutomotive News (Subscription Required)



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    GAC vehicles, aside from the strong smell of adhesive inside them, seemed like reasonably well put together cars. I'd rate them as "two generations of Kia ago" for interior quality.  They certainly have potential.

    Oh, and technically, Geely is already here under the Volvo name.

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    2 minutes ago, oldshurst442 said:

    Seinfeld reference?

    Todd Gack... 

    Nah, just the general exclamation.  Sometimes spelled 'gak' or 'gakk'. 

    • Haha 2

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    On 5/22/2019 at 8:51 PM, Drew Dowdell said:

    GAC vehicles, aside from the strong smell of adhesive inside them, seemed like reasonably well put together cars. I'd rate them as "two generations of Kia ago" for interior quality.  They certainly have potential.

    Oh, and technically, Geely is already here under the Volvo name.

    Wonder about the test crash worthiness myself....

    • Upvote 1

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      Press Release is on Page 2
      Summary of Honda CEO Speech on Automobile Business Direction
      Remarks by Takahiro Hachigo, President & CEO, Honda Motor Co., Ltd. May 8, 2019
      Honda has been working on two top-priority management challenges in the midst of abrupt changes in the global business environment surrounding the automobile industry: to strengthen the structure of our automobile business and to further increase the speed of business transformation for future generations.
      So, today, I would like to introduce some initiatives we are taking for our automobile business, especially how we are strengthening the structure of our automobile business, the direction we are taking with electrification, as well as some progress we have made to date.
      Strengthening automobile business structure 
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      Advancement of our art of making automobiles (automobile development) 
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      Moreover, we have already introduced the Honda Architecture in our development.
      The Honda Architecture is a company-wide initiative which will increase the efficiency of development and expand parts-sharing for our mass-production models. The first model being developed with this new method will be the global model we are launching next year. And we will continue increasing the number of models to which we apply this new architecture.
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      Strengthening our operational structure in the area of production 
      In addition to the area of development, we are further strengthening our operational structure in the area of production as well, so that we can create strong products with high efficiency.
      We are making steady progress in optimizing our production capacity in all regions. When this is complete, we are expecting to see that our global capacity utilization rate, excluding China, will increase from 90% recorded in 2018, and we will be producing at full capacity by 2022.
      In China, the third plant of Dongfeng Honda became newly operational, and this put us in a position where we can definitely accommodate market demand in China. We believe that this progress we made paved the way for the optimization of our global production capacity.
      From here onward, we think it is important to increase our competitiveness by increasing the efficiency of our production system in North America.
      For our business in North America, while keeping pace with sales expansion, we enhanced our model lineup and established a flexible production system where our plants sometimes produce various models in duplication to accommodate changes in market demand. However, as a result of the pursuit of high flexibility, an increase in the investment amount and a decline in production efficiency started to become an issue. Therefore, in North America as well, we will reduce the number of variations at the trim and option level, and at the same time, we will simplify the production model allocation at each plant. Through this initiative, we will re-establish a highly-efficient production system and realize the growth of North American business through the pursuit of quality.
      By implementing these initiatives to increase production efficiency in each region, we are expecting to reduce global cost in the area of production by 10% by 2025, compared to the cost recorded in 2018.
      Through all these initiatives I have mentioned, we will steadily strengthen the structure of our automobile business and realize the solidification of our existing automobile businesses by 2025, and, at the same time, we will accelerate our preparation for the future.
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      Striving to realize a carbon-free society, Honda set a goal to electrify two-thirds of our global automobile unit sales by 2030.
      When we talk about the introduction of electrified vehicles, there are two perspectives. One is the improvement of fuel economy, and the other is zero emissions. Regulations for the Corporate Average Fuel Economy (CAFE) standards are becoming increasingly stringent in every country around the world and complying with CAFE standards is one of the most important challenges for the automobile industry. At Honda, in light of the required infrastructure and how people use automobiles, we believe that hybrid technology is, at this moment, the most effective way for us to comply with CAFE standards. Therefore, we will electrify our products mainly with hybrid technologies. By increasing sales of our hybrid models all around the world, Honda will contribute to the global environment through the improvement of fuel economy.
      To this end, we will expand the application of our 2-motor hybrid system to the entire lineup of Honda vehicles. In addition to the 2-motor hybrid system which is compatible with mid-to-large-sized vehicles, we developed a new, more compact 2-motor hybrid system suitable for small-sized vehicles. This small-sized 2-motor hybrid system will be adopted first by the all-new Fit which we are planning to exhibit as a world premiere at the Tokyo Motor Show this fall.
      In addition to the expansion of the lineup of products equipped with the 2-motor hybrid system, we also will expand the application of the 2-motor hybrid system on a global basis. With that, by 2022, we are expecting to reduce the cost of the 2-motor hybrid system by 25% compared to the cost of this system in 2018.
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      In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market.   
      In China, in order to keep up with the fast speed of electrification, we have already begun introducing battery EV models developed together with our local joint venture companies in China. While envisioning the introduction of battery EV models from the Honda brand, we will continue utilizing local resources in China and introduce more battery EV models in a timely manner to fulfill local market needs in China.
      In Europe and Japan, we will introduce the Honda e, a new battery EV model, which was recently introduced as a prototype at the Geneva Motor Show.
      To summarize, Honda will popularize and improve the business feasibility of electrified vehicles by focusing on hybrid vehicles and battery EVs.
      Changes in operational structure
      In order to ensure the solid implementation of these initiatives I just introduced for our automobile business, we renewed our operational structure as of April. The aims of this structural change are to establish an organization which brings all regional operations together to strongly facilitate inter-regional coordination and collaboration and to increase the speed of our business operations by enabling prompt decisions and prompt execution.
      Today, I introduced our initiatives to strengthen our automobile business structure and the direction of our electrification. Under the new organizational structure, we will realize our goals with a keen sense of speed. 
      Closing
      As we stated in our 2030 Vision, Honda is striving to grow through the pursuit of quality so that we can fulfill our vision to "Serve people worldwide with the joy of expanding their life's potential."
      Honda will continue taking on new challenges while being driven by strong passion, so that we can continue to be a company that society wants to exist even in 2050 after Honda becomes more than 100 years old. 
      *1 S-E-D-B: Sales, Engineering (Manufacturing), Development (R&D), Buying (Purchasing)

      View full article
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      The reaction Peugeot’s return to the U.S. Market a couple weeks back falls into three categories.
      OMG! We're getting exciting French cars again Why is another automaker coming to the U.S.? Split between 1 and 2 I should say that I fall into camp three at the moment. Previously, I was in number one when the rumors began to swirl around about PSA Group - parent company of Peugeot, Citroen, DS, Opel, and Vauxhall - making a possible return in late 2014. The dreams about possibly seeing a small number of Citroen and DS vehicles running around the U.S. sparked some joy. Peugeot was nowhere to be seen in my fantasy as they were seen to be somewhat bland in terms of their design.
      But once I had my dream play through my head, I began to wonder if this could work out for PSA Group. Despite being seen as the holy grail to many outside automakers, the U.S. is very notorious to break in and keep going forward. Consider these quotes from a 2016 report in Automotive News (Subscription Required).
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      PSA would also conduct extensive research into the U.S. marketplace to determine which brand would take the charge. The end goal was to possibly have a brand in the country by 2026. Possibly is the keyword as they made clear that could pass on this idea if various conditions weren't met.
      Since that announcement, PSA has been making some inroads into this plan,
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      Still, PSA Group and Peugeot still have a tough hill to climb. Reading through the comments on the article written by Drew, there are two common issues pointed out. One is how Peugeot doesn't have anything unique in their lineup. Two is how Peugeot could be entering a marketplace that is possibly on the verge of a recession.
      Let's begin with design. Out of all of the brands under the PSA umbrella, Peugeot plays it very much safe in terms of design. While the brand has been taking some risks in the past few years (especially with their interiors) they are no-where near the likes of Citroen. This difference is very apparent in the history of the two brands, 
      Peugeot producing vehicles that were efficient and simple. But some of those design could jump in terms of elegance. Citroen pushing the envelope with their designs that are either praised or hated. DS falls under this umbrella as well. My hunch is that PSA figured that sending either Citroen or DS would be problematic because they might not appeal to consumers, and just sit on lots.
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      But as noted, Peugeot will not be arriving until 2026. That's over six years away and in that time, the economy could be recovering from the recession in question. 
      Time is also the biggest enemy to Peugeot. In six years time, the U.S. marketplace could be in a completely different state than where it stands now. Crossovers and SUVs dominate the sales charts at the moment, but it might be electric vehicles that become the dominant choice. There are also various regulations that may come into fruition, along with the possibility of new tariffs on vehicles built in Europe.
      There’s also the issue of trying to stand out in the U.S. marketplace. Consider this for a moment; there are over forty automakers selling just under 300 or so nameplates. With the prospect of more automakers from China expected to arrive in the next few years, Peugeot might be entering a crowded field. Some of their current models have the looks, but can it combat strong competition that has a long history and reputation in the country?
      One item is very clear, PSA Group isn't stupid. They're taking their time and doing a lot of behind the scenes work before introducing their first models in the U.S. Whether or not this proves to the big success or the white flag being raised remains to be seen.

      View full article
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