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Category: Automotive

Retail News Asia is committed to providing both local and global retailers with the latest Auto and Car news throughout the Asian market. This on a daily base.

  • BMW Contract Assembler to Make Engines in Malaysia

    BMW Contract Assembler to Make Engines in Malaysia

    Malaysian conglomerate Sime Darby Motors and BMW Group Malaysia open a 132 million ringgit ($33.5 million) engine plant for locally assembled vehicles and to support exports to regional markets including Vietnam and the Philippines.

    Sime Darby Managing Director Dennis Ho tells reporters the plant will produce 10,000 units a year in a single shift.

    The 91,493-sq.-ft. (8,500-sq.-m) engine plant is the first of its kind for contract manufacturer Sime Darby. Until now, locally assembled BMW and Mini models have used engines imported from Germany or Austria.

    The new facility will assemble 3- and 4-cyl. gasoline engines, 4-cyl. diesel engines and 3- and 4-cyl. gasoline engines for plug-in hybrid vehicles. It is the second BMW engine plant in the region after Rayong, Thailand.

    The new engine operation is alongside the assembly plant and regional parts-distribution center.

    Ho says there is no compromise in the quality of engines being built at the plant in Padang Meha 233 miles (375 km) north of Kuala Lumpur. “The standards of the quality checks are similar to those used in Germany,” he says. “The parts and components are imported from Germany.”

    BMW Group Malaysia CEO Harald Hoelzl says Malaysia plays a major role in BMW’s plans for Southeast Asia.

    “In Malaysia, BMW has already successfully achieved a 15% increase in the deliveries of BMW, Mini and BMW Motorrad vehicles, with 3,000 vehicles in the first quarter,” he says.

    Malaysian motoring analyst Paul Tan says the inclusion of diesel engines is interesting because BMW Malaysia no longer has diesel models in its lineup. “This means that the company is likely looking to introduce new oil-burning models soon,” Tan says on his website.

    Sime Darby Chairman Abdul Aziz Wan Abdullah says the company aims to be the preferred contract-assembly partner for the most dynamic automakers in the region.

    “We aim to produce more than 50,000 vehicles (including Mazda and Hyundai vehicles produced at the company’s Inokom plant), as well as the engine parts and components for the vehicles by the year 2020,” he says in a statement.

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  • Vietnam’s April car sales fall 4 pct on-year

    Vietnam’s April car sales fall 4 pct on-year

    Toyota remained the leading brand last month, with sales rising 3 percent from a year earlier to 4,234 units. Vietnam’s car sales fell slightly in April, declining 4 percent from a year earlier to 20,557 units, according to data released by the Vietnam Automotive Manufacturers Association (VAMA).

    Sales in April were 2 percent lower than in March, VAMA said in a statement.

    Toyota remained the leading brand last month, with sales rising 3 percent from a year earlier to 4,234 units.

    Truong Hai (Thaco) group, the local assembler and distributor of brands such as Kia, Mazda, Peugeot and Hyundai and a significant player in the commercial vehicle segment, reported a 0.5 percent rise in group sales to 8,679 units in April.

    Ford’s sales were 47 percent lower at 1,359 units in April while Honda sales rose four-fold to 2,815 units.

    For the first four months of this year, total car sales in the country fell 2 percent from a year earlier to 79,115 units, VAMA said.

  • Vietnamese willing to Spend huge Amounts of Money on Super Cars

    Vietnamese willing to Spend huge Amounts of Money on Super Cars

    As many as  8,670 luxury cars of different kinds were sold in Vietnam in 2017, a decrease of 15 percent from 2016, according to one report. However, the amount of money spent on the cars was VND20 trillion.

    According to Choi Duk June, CEO of Mercedes Benz Vietnam, 150 Maybachs were delivered to Vietnamese buyers in 2017. The sales of Maybach in Vietnam are the highest in Southeast Asia.

    This is a luxury model of Mercedes-Benz with three versions in distribution in Vietnam, including Maybach S 400 priced at VND6.899 billion, Maybach S 500 VND10.999 billion and Maybach S 600 VND14.169 billion.

    When launching Maybach S 600 into the market in January 2015, Mercedes Benz then hoped it could sell 10 products a year. However, to its surprise, over 50 products were sold in the year.

    The figure was over 100 in 2016, and Vietnam remained the biggest buyer of Maybachs in 2017, leaving Indonesia, Thailand, Malaysia and Singapore far behind.

    It is estimated that over 300 Maybachs are rolling on Vietnam’s streets.

    The other luxury models also had very good sales. Over 500 S-Class products, priced at VND4-10 billion, were sold in 2017.

    However, the highest growth rate belonged to mid-end luxury models, priced at VND1.5-3 billion. A record number of 2,500 GLCs priced at VND1.939-2.209 billion was sold in 2017, placing GLC as one of the 15 best sellers in the market.

    The other luxury models which sold very well in 2017 included BMW’s Seri 3 and Seri 5, Audi’s A4 and Q5 and Lexus’ ES 250 and NX 200T.

    Car dealers in Vietnam say there is a switch in consumption from common products to mid-end products. A survey by Mercedes Benz found that car buyers tend to be younger.

    In 2014, the average age of car buyers was 42, while it was 39 in 2016 and 38 in 2017.

    Boston Consulting Group’s (BCG) survey showed that Vietnam is getting wealthy thanks to the strong rise of the middle class which has been growing more quickly than any other place in South East Asia.

    Those who have monthly income of $714 and more are classified as middle class. Vietnam expects to have 33 million middle class people by 2020.

    According to the Vietnam Automobile Manufacturers’ Association (VAMA), a total of 272,750 automobile units were sold in 2017, down 10 percent yearly.

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  • Lotus Launches The New Exige Sport 410

    Lotus Launches The New Exige Sport 410

    With a stunning combination of raw speed and real-world ability, the Lotus Exige Sport 410 joins a line-up like no other to complete the Exige family of peerless sports cars.

    Starting with the revised Exige Sport 350, the comprehensive Exige range now includes the new Exige Sport 410 and culminates with the extreme Exige Cup 430: each at a distinct price point, performance level and degree of motorsport focus.

    Developed directly from the track focused Exige Cup 430, the Exige Sport 410 is designed to be the ultimate road drive, unrivalled in its class.

    This latest addition to the Exige range packs the advanced chassis, suspension and powertrain set-up from its more powerful stablemate, the track focused Exige Cup 430, with a recalibrated engine producing 410 hp (416 PS) at 7,000 rpm and 420 Nm (310 lbft) on tap from 3,000 rpm to 7000 rpm. The high-performance 3.5-litre, supercharged and charge cooled V6 engine combined with a dry weight of just 1,054 kg (lightest possible dry) delivers a class-leading power to weight ratio of 389 hp / tonne, and makes the Exige Sport 410 the lightest V6 Exige ever.

    Capable of 0-60 mph in just 3.3 seconds, it records fierce in-gear acceleration before reaching a top speed of 180 mph / 290 km/h (Coupe configuration) – equal to the range-topping Exige Cup 430.

    The Exige Sport 410 has been developed to generate 150 kg of downforce, sharing design cues from the Exige Cup 430, adopting a visually arresting revised lightweight front clam panel incorporating wider grilles and carbon fibre air curtains and front splitter.

    As with all Lotus cars, the Exige Sport 410 has outstanding handling and lightweight agility engineered into its very DNA. Conveying an extraordinary level of tactility and precision, it’s developed to perform at its very best with maximum enjoyment and driver feedback on the road.

    Jean-Marc Gales, CEO, Group Lotus plc said, “With every new Lotus we look to move the bar higher and apply technology and development ideas drawn from top-of-the-range models. Our agility as a company means that the lessons learnt today can quickly be incorporated into the cars of tomorrow and the Exige Sport 410 is a perfect example of this. We have taken the Exige Cup 430, the ultimate track-centric Exige, and developed it into the perfect road orientated sports car, ensuring that we stay ahead of rivals when it comes to cars that deliver a truly engaging analogue driving experience.”

    Completing the update to the entire Exige range, the new front clam design also transitions across to the Exige Sport 350, giving a visual refresh to the entry-level model in the Exige line-up.

    Both the Exige Sport 410 and Exige Sport 350 are available in Coupe and Roadster configurations, with the Roadster having a lightweight black removable soft-top which can be easily stowed within the car for open-top driving. The Roadster configuration is not available for the Exige Cup 430.

    The Exige Sport 410 – forged through development

    Reflecting its Sport nomenclature, the new Exige Sport 410 treads the fine balance of cars that retain their focus on road driving yet remain supremely responsive and agile. Whilst Lotus’ Cup variants are developed with circuit driving at heart, the Sport models are tuned to provide the perfect balance of performance, agility and power delivery for the road.

    Working from Lotus’ standpoint as the leader in lightweight design, every gram has been justified, from the standard lightweight carbon front splitter and access panel at the front to the carbon side pods, tailgate and wing at the rear.

    Distinctive in its appearance, thanks to wider aperture grilles in the new front clam panel, the Exige Sport 410’s revised aero configuration provides total downforce of 150 kg (60 kg at the front and 90 kg at the rear); developed through extensive CFD modelling and wind tunnel testing in order to preserve the car’s handling balance and high-speed stability.

    The front splitter helps separate and speed airflow under the car, and the inclusion of air curtain elements into the front clam panel efficiently moves air through to the front wheel cavities to help reduce turbulence and drag created by the front wheels. In addition, the enlarged front clam panel openings, with wider radiator apertures, aid cooling. At the rear, the extended Aluminium diffuser, combined with the new high-mounted wing all contribute to the Exige Sport 410’s enhanced downforce.

    The Exige Sport 410 uses the Exige Cup 430’s 3.5-litre supercharged V6 engine with supercharger and water-to-air charge cooler, calibrated to generate 410 hp (416 PS) at 7,000 rpm and 420 Nm (310 lbft) of torque from 3,000 rpm to 7,000 rpm. The latest addition to the range also employs the oil cooler configuration and larger clutch from the Exige Cup 430, perfectly matched to the close-ratio, six-speed manual transmission with exposed-gear-change linkage.

    Befitting an industry benchmark, the Exige Sport 410 takes the chassis, suspension and dampers from the Exige Cup 430, re-tuning the three-way adjustable Nitron dampers for a road bias and to suit the car’s revised aerodynamic set-up. These can be customised to the driver’s precise requirements (rebound and low and high-speed compression) along with the Eibach adjustable front and rear anti-roll bars, fitted as standard, which complete the car’s class-leading chassis set-up.

    The Exige Sport 410 is fitted with Michelin Pilot Sport Cup 2 tyres (285/30 ZR18 rear and 215/45 ZR17 front), 20 mm wider at the rear deliver improved traction and work in harmony with the car’s ultra-lightweight forged alloy wheels, which are available in either black or silver. Braking is courtesy of AP Racing, with forged, four-piston calipers and performance two-piece J-hook brake discs. With a higher thermal capacity and improved bite, these discs have better debris clearance and impart consistent pedal feel with greater stopping power.

    Performance options for the Exige Sport 410 include a full exhaust system in titanium, removing 10 kg from beyond the rear axle, and a number of high-gloss, visible weave carbon fibre components including instrument binnacle, sill covers, barge boards and roof. A host of motorsport-centric options are also available including electrical cut-off and fire extinguisher controls, airbag deletion, a non-airbag steering wheel, 4-point harnesses and a dealer fit FIA compliant roll cage.

    Centre of attention in the cabin is Lotus’ acclaimed open-gate manual gearshift design giving quick and precise changes. The fine detailing continues with an Alcantara® steering wheel and Lotus’ own carbon fibre sports seats trimmed with either a combination of Alcantara® and leather or optional full leather, both featuring contrast stitching.

    The optional Interior Colour Pack (in a choice of four colours) provides contrasting surrounds to the transmission console, HVAC surround, carbon seat eyelets and electric window bezels. As standard, the centre console and dashboard are trimmed in Alcantara® with the door cards, a combination of Alcantara® and leather. Air conditioning and an integrated entertainment system including iPod® connectivity and Bluetooth® functionality can also be specified.

    Lotus Exclusive

    The new Exige Sport 410 can be personalised through the popular Lotus Exclusive programme. Combining traditional British craftsmanship with modern design, the service inspires customers to spend time tailoring the character of their Lotus with a comprehensive array of options.

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  • Increasing Chinese wealth helps drive luxury auto sales growth

    Increasing Chinese wealth helps drive luxury auto sales growth

    Almost half of the automotive sales growth in China this year has come from luxury brands, driven by consumers’ increasing household wealth and consumer confidence.

    According to a report from Scotiabank, in March global automotive sales were up 1.2 percent over the previous year, with China one of the key forces behind this growth. As the Asian market becomes increasingly important to luxury auto brands, OEMs are set to benefit from newly eased regulations in China.

    “China now accounts for close to 30 percent of global luxury auto sales, up from 20 percent in 2012,” said Carlos Gomes, senior economist and auto industry specialist at Scotiabank, Toronto. “As wealth continues to increase in China this share will advance further.”

    Accelerating sales
    Chinese auto sales grew 3 percent in January and February, and growth picked up in March, with a 5.1 percent increase.

    Luxury cars made up half of the year-to-date growth in China. Scotiabank notes that this rise in luxury sales is the greatest seen in China since the government began its anti-corruption campaign.

    Over the past few years, the government’s communist party has been working to curb conspicuous spending, in an attempt to fight corruption in politics.

    As part of the campaign, China’s Finance Ministry implemented a 10 percent import tax on the highest priced automobiles entering the country. The tax affects vehicles retailing for at least 1.3 million yuan, or $205,000 at current exchange.

    As of 2012, China represented 20 percent of the total volumes for the top six premium marques. Today, Chinese consumers make up 30 percent of these brands’ businesses.

    Whereas these brands saw an average volume growth of 15 percent in 2016 and 2017 in China, in the first three months of this year, their year-over-year volumes rose 25 percent.

    The top six marques are projected to have their sales exceed 2.7 million cars this year. This would more than double the number sold just five years ago.

    By 2020, the luxury car industry in China is likely to become the world’s largest. The country is leading the way in the breakaway from reliance on dealerships.

    According to L2, while ultra-luxury auto brands such as Ferrari have a better handle on exclusivity and high-end image, standard high-end automakers are more accessible and have a better grasp on digital performance in China.

    L2’s research in its “China: Luxury Auto” report shows that more than 50 percent of luxury auto brands are available on China’s top retail Web site Tmall. Their presence on the ecommerce site beats out luxury fashion and jewelry brands.

    Along with China, auto sales around the world picked up in March due to growth in emerging markets and a 6.5 percent volume increase in the United States. Scotiabank attributes this to growing wages and incomes.

    “Luxury sales in China are up about 23 percent so far this year, lifting global luxury volumes by about 7 percent year-over-year through March,” Mr. Gomes said. “The key driver of these gains is ongoing increases in household wealth, which is being driven by strengthening global economic growth.

    “As long as that trend persists, luxury volumes will  outperform,” he said. “We expect the global economy to expand 3.8 percent in 2018 and 3.7 percent in 2019. If global GDP slows significantly from our current forecast, luxury volumes would slow as well.”

    Auto outlook
    Foreign automakers are set to benefit from some recently announced regulation changes in China.

    One of the changes relates to the 50:50 rule, which prevented automakers from owning more than half of their Chinese operations. At the time the regulation was implemented in 1994, it was intended to help local businesses by forcing OEMs to enter joint ventures.

    China is rolling this back, allowing automakers to have more ownership over their Chinese sales.

    The nation is also lifting its 25 percent tariffs on foreign cars.

    Tesla’s Elon Musk had complained about the import duties on Twitter, saying that having a 25 percent tax compared to the import duty of 2.5 percent for the United States was similar to “competing in an Olympic race wearing lead shoes.”

    The United States is currently at risk of a trade war with China following President Trump’s announcement of tariffs on steel and aluminum in March. Since then, each side has imposed new tariffs on different goods, escalating the disagreement.

    “The announcement that China will reduce import tariffs from the current 25 percent ‘as soon as possible’ is likely to have most significant near-term impact for luxury automakers,” Scotiabank’s Mr. Gomes said. “For example, tariff reduction will improve the affordability of imported luxury models, spurring even stronger sales going forward.”

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  • Volkswagen launches SOL electric brand in China

    Volkswagen launches SOL electric brand in China

    Volkswagen has just launched the SOL brand for electric vehicles and the first product born out of the collaboration is an SUV called the E20X. VW has collaborated with China’s Anhui Jianghuai Automobile Group Corp (JAC). In fact, the E20X is almost identical to another JAC product.

    Volkswagen has provided any specific details on the car yet but it has been mentioned that the car will travel almost 300km on a single charge. The SOL E20X also will include artificial intelligence and intelligent connectivity, according to VW. In the future, VW, JAC, and Zhejiang Tmall Technology Company will collaborate to create a new retail model as well.

    VW did not provide specific details on the SOL brand’s launch, but Chinese consumers should first see the brand and its E20X later this year.

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  • KDDI, Nokia trial eMBMS for connected vehicles

    KDDI, Nokia trial eMBMS for connected vehicles

    Japan’s KDDI and Nokia have completed trials of LTE connected vehicle applications including the first vehicle based LTE broadcast trial.

    During a trial on the island of Hokkaido, the companies implemented evolved multimedia broadcast multicast service (eMBMS) technology for two in-vehicle applications.

    These included vehicle-to-network-to-vehicle connectivity, allowing cars to stay in constant contact with a Nokia-based multi-access edge computing (MEC) platform, sending real-time location, direction and speed data to roadside sensors.

    The proof of concept allows drivers to alert the application and allow information to be distributed to other vehicles using eMBMS.

    In addition, eMBMS was applied in a network real-time kinematic (network RTK) trial of LTE for enhance fully automated in-vehicle navigation, demonstrating how eMBMS could more cost-efficiently use existing geo-location systems to communicate to many vehicles in real-time.

    The companies said the trials are a step towards preparing the car industry for the introduction of 5G-based automated vehicles.

    “We are pleased to work with Nokia to demonstrate our leadership in the delivery of mobile networks for IoT and connected car communications,” added Munefumi Tsurusawa, general manager of the connected vehicle technology department and KDDI’s technical planning division.

    “This is an important trial showing how the automotive industry can leverage cellular technology to enhance safety of connect vehicles on the roads.”

  • Hyundai group under pressure from U.S. activist hedge fund with $1 billion stake

    Hyundai group under pressure from U.S. activist hedge fund with $1 billion stake

    A unit of U.S. activist hedge fund Elliott Management revealed on Wednesday that it holds more than $1 billion worth of shares in key affiliates of South Korea’s Hyundai Motor Group and called for more rapid reform of the auto giant’s governance.

    It is Elliott’s latest challenge to South Korea’s family-run conglomerates after it forced Samsung Electronics to increase shareholder returns in 2017, and comes amid a government campaign to boost investors’ power in a country where shareholder activism is rare.

    Elliott Advisors called for a “more detailed roadmap” as to how Hyundai Motor Group will “improve corporate governance, optimize balance sheets, and enhance capital returns” at Hyundai Mobis, Hyundai Motor and Kia Motors.

    The fund did not provide a breakdown of its stakes in Hyundai’s three affiliates but its over $1 billion worth of shares account for around 1.5 percent of the total market value of the three firms.

    Hyundai Mobis shares jumped as much as 6.1 percent to their highest since Jan. 25 in the wake of the announcement. Hyundai Motor rose 4.9 percent, its highest in three weeks, while Kia Motors gained 3.8 percent in morning trade in Seoul. Hyundai Glovis shares rose as much as 4.8 percent.

    “I see Elliott’s call as positive, as it should enhance shareholder value,” said Kim Sung-soo, a fund manager at LS Asset Management.

    “Elliott has declared war against Hyundai but it has not made detailed demands, so further discussions need to be seen.”

    Auto-to-steel giant Hyundai Motor Group announced a plan last week to streamline its complex ownership structure as it responds to calls from the government and investors for greater transparency and better governance at family-controlled conglomerates.

    But worries that the plan would benefit the parent group’s controlling family ahead of investors have hit the share prices of group companies such as parts supplier Hyundai Mobis.

    While Elliott said it was pleased that Hyundai Motor Group had taken a first step toward reform, it added in a statement that “more needs to be done to benefit the companies and stakeholders”.

    “Elliott looks forward to engaging with management and other stakeholders directly on these issues, and to offering recommendations regarding the proposed plan,” the hedge fund said.

    Hyundai Motor Group responded that it was “confident” its restructuring plan would enhance shareholder value, and promised to communicate with investors at home and abroad.

    Last year, South Korea’s new antitrust chief told Reuters he had been in talks with Hyundai Motor Group about unwinding its circular shareholdings, which critics say give too much power to the controlling family at the expense of shareholders.

    Under Hyundai’s plan, Hyundai Mobis is to spin off its domestic module and after-service parts businesses and merge them with logistics affiliate Hyundai Glovis, which is personally backed by Hyundai’s controlling Chung family.

    But some investors complained that Mobis could be giving away the most profitable part of its business too cheaply.

    The plan is yet to be approved by shareholders.

    After the merger, Group Chairman Chung Mong-koo and his son Chung Eui-sun, who is vice-chairman, will buy stakes in Mobis held by other affiliates Kia Motors, Glovis and Hyundai Steel .

    The group has not announced when the family members would buy the Mobis stakes.

    Elliott’s intervention is another headache for Hyundai, which is already struggling with slowing sales in China and the United States and Seoul’s diplomatic row with Beijing last year.

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  • Nissan, partner eye early 2020s robotaxi rollout

    Nissan, partner eye early 2020s robotaxi rollout

    Nissan is deepening collaboration with a Japanese mobile gaming and communications giant to develop self-driving taxis.

    Nissan wants the partnership to lift it ahead of its rivals in the nascent vehicle mobility services segment. But when it comes to realizing self-driving taxis that can pick up and drop off customers automatically on public roads without a glitch, the automaker acknowledges there is still a long way to go.

    Last month, Nissan Motor Co. and online tech company DeNA Co. field-tested Easy Ride robotaxis, involving some 300 participants.

    “This represents a big step toward enhancing self-driving cars and the mobility service operation system from the stage of just presenting a conceptual image,” Nissan CEO Hiroto Saikawa said during the launch. “This will help advance our business in offering a new mobility service for many customers in a variety of scenes.”

    The robotaxis are based on a modified Nissan Leaf electric vehicle. For their field testing, they traveled about two miles on a preset city route from Nissan’s headquarters in Yokohama to a nearby commercial facility.

    Collaborative effort

    Using a DeNA-designed smartphone app, users could hail a taxi by selecting a pickup time slot and specifying which of a list of preset destinations they wanted. A tablet computer installed inside the vehicle notified the passenger about recommended events in the area.

    Discount coupons for restaurants affiliated with Easy Ride were sent to the user’s smartphone.

    Such an online user experience could not have been possible without the help of DeNA, Nissan officials said.

    “Efficient and effective collaboration with partners who have expertise in their respective fields are the key to remaining competitive in the future,” Saikawa said. DeNA CEO Isao Moriyasu stressed that his company wants to bring innovation to the transportation system as a mobility service provider.

    The companies plan to introduce their robotaxi service commercially in the early 2020s. But they must resolve technical details before introducing a fully autonomous mobility service in a heavily congested urban environment.

    Easy Ride uses Seamless Autonomous Mobility, developed by Nissan from NASA technology, for its fleet operation system. That system allows vehicles to make decisions in unpredictable situations with the combined support of in-vehicle artificial intelligence and humans, according to Nissan. There will be a control center where people monitor Easy Ride fleets.

    Unexpected situations

    But technology challenges remain. Among them: perfecting the robotaxi’s ability to judge where it is most appropriate for loading and unloading passengers. Unexpected complications, such as road construction or a line of parked cars on the roadside, for example, wouldn’t faze a human driver. But altering behavior to accommodate unusual circumstances doesn’t come easily to an AI-powered, sensor-directed taxi without the aid of remote monitoring by humans at the control center.

    At a media test ride in mid-February, an Easy Ride vehicle unexpectedly stopped its self-driving mode just as it was about to get moving when a pedestrian walked in front of it. As a result, another test vehicle was brought in and the procedures had to be repeated.

    Nissan expected such glitches to occur during the field test, and is looking to incorporate the experiences into its development.

    Kazuhiro Doi, a global director of Nissan’s research division, admitted that the experiment was challenging, even in Yokohama’s waterfront area, with its wide streets and relatively light traffic.

    “Self-driving while trying to avoid so many parked cars is actually difficult,” Doi said of the research. “GPS signals are weak or cut off due to high-rise buildings. I thought it would be easy at first, but it has proven to be more challenging.”

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  • GM workers storm Korea CEO’s office after company holds back bonus

    GM workers storm Korea CEO’s office after company holds back bonus

    General Motors workers in South Korea forced their way into company executive offices, destroying and removing furniture, shortly after the automaker’s local unit told employees that there will be no bonuses due to a cash crisis.

    A video posted on YouTube showed about a dozen union members storming the CEO’s office in Incheon on Thursday, kicking and throwing chairs before removing a large desk.

    The union, whose representative could not be reached for comment, was protesting the company’s decision and urged the CEO to resign, according to GM Korea’s spokesman.

    Separately, the company confirmed in a statement what it called a “violent incident” at its executive offices that “resulted in significant damage to company property.”

    GM, which is seeking concessions from the union to revive its South Korean business after mounting losses, has proposed a $2.8 billion new investment plan and a $2.7 billion debt-for-equity swap to turn around the unit. After threatening to exit the country altogether earlier, the subsidiary last month said it intends to file for bankruptcy if the union fails to agree to a restructuring plan, putting pressure on employees and the government to help it stay afloat.

    The incident was reported to the police, the company said, adding that it will take legal action against the workers.

    Government reaction

    South Korea on Friday urged GM and the union to reach a wage deal swiftly, saying the government will be able to discuss support for the money-losing unit on condition of an agreement.

    The latest comments, made by the industry minister during a meeting with GM Korea’s CEO, came after the union’s protest over nixed bonuses.

    “Should the industrial conflict seen yesterday and today happen again, it will be difficult for (GM Korea) to gain public support and government support,” Paik Un-gyu, minister of trade, industry and energy, said in a statement.

    GM’s union accepted the company’s demand for a wage freeze and no bonuses for this year, but opposes a proposal to cut benefits as well as its plan to shut down the Gunsan plant.

    “We appreciate the ministry’s interest and encouragement,” a GM Korea spokesman said.

  • Audi aims to double China sales over six years

    Audi aims to double China sales over six years

    Volkswagen’s premium brand Audi aims to double sales in China over the coming six years, sales chief Bram Schot told Automobilwoche.

    “In 2023 we want to sell 1.2 million cars in China,” the German trade magazine quoted him as saying.

    Audi sold 597,000 vehicles in China, its biggest single market, last year.

    The company last year resolved a dispute with dealers in China that could have disrupted the luxury carmaker’s business in the world’s biggest auto market.

    The dispute stemmed from a long-term collaboration between Audi and SAIC Motor Corp that had riled Audi store operators in China, who among others sell Chinese-made vehicles as part of Audi’s existing joint venture with China’s FAW Corp .

    Schot said Audi would continue to work with both SAIC and FAW.

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  • BMW, Mercedes win with diesels in Korea

    BMW, Mercedes win with diesels in Korea

    It’s only been a couple of weeks since the 2018 Winter Olympics in Pyeongchang concluded, but for two of Germany’s major premium brands the hunt for gold in South Korea continues. BMW’s and Mercedes-Benz’s sales are booming and, unlike Europe, diesels have been a major driver of the success.

    Models such as the BMW 520d or Mercedes-Benz E 220d routinely rank as the best-selling imports.

    Typically, when experts talk about strategically important car markets, the Korean peninsula doesn’t come up. Instead the focus lies mainly on the BRIC countries: Brazil, Russia, India and China.

    While China has become the single-biggest market for Mercedes, BMW and Audi, the other three have failed to live up to their potential. Instead, a market of only 1.53 million light vehicles has stepped into the vacuum. Sales of Mercedes cars in South Korea increased by 20 percent last year. Remarkably, that represents a slowdown over 2016, when volumes surged by a third.

    Some of the growth can be attributed to a 2011 free trade agreement with South Korea that first reduced the 8 percent tariff on cars imported from the EU before eventually eliminating it entirely. Executives say what is even more important has been a change in attitude. A rising number of consumers are eschewing brands controlled by large family-owned conglomerates known as the chaebol, including Hyundai, in favor of foreign makes.

    Several such groups have become embroiled in scandals where the government helped keep chaebol executives found guilty of bribery and corruption out of jail. Now it’s no longer considered your patriotic duty to help the domestic brands, especially if you can afford better.

    “There’s a new spending paradigm called YOLO: You Only Live Once,” said IHS Markit senior analyst Andy Bae. “Thanks to supportive financial and promotion programs, YOLO consumers do not hesitate to purchase premium cars from Mercedes and BMW.”

    Mercedes now counts South Korea as its sixth-largest market worldwide, only narrowly trailing France with nearly 69,000 cars sold last year. BMW wasn’t far behind with a little less than 60,000. South Korea even eclipsed Japan last year as BMW brand’s second-biggest market in Asia.

    “There’s a strong relationship between South Korea and Germany, and they are attracted by German products, so we could utilize that,” Mercedes global sales boss Britta Seeger told journalists in Los Angeles last November.

    Seeger might be the best example of the growing importance of understanding South Korea. Prior to her promotion to the board of Mercedes parent Daimler, her first major assignment was running the automaker’s national sales company in South Korea from 2013 to 2015. Her unique experience there is also influencing what decisions she makes now. As part of her goal to open up the brand to new audiences, not just customers, Seeger decided that Mercedes should sponsor eSports competitive video gaming. “It may not be considered a mainstream sport, but it’s the fastest growing sport in the world,” said Seeger, who was attracted by sold-out stadiums around the globe and almost 500 million streaming hours watched per month. “I lived in South Korea. There it’s very normal — like soccer.”

    So, it’s that much more painful that smaller premium brand Audi has effectively been frozen out of this lucrative market after regulators decertified thousands of its diesels and imposed a ban on new registrations in August 2016 because of parent Volkswagen Group’s emissions-cheating scandal. This caused volumes to plummet from a peak of 32,538 in 2015 to less than 1,000 in 2017, crippling its dealer network.

    “Korean customers migrated from Audi to BMW and Mercedes during the sales ban,” IHS Markit’s Bae explained. “VW (Group) is preparing to start sales again.” Perhaps Audi will be able to benefit from what remains of the Olympic spirit.

  • PSA signs Malaysia production deal to boost Asia reach

    PSA signs Malaysia production deal to boost Asia reach

    PSA Group has signed a deal with Malaysian company Naza to jointly produce PSA-branded cars for Malaysia and other Asian markets. It is part of the automaker’s plans to boost its presence in the region after a failed bid to form a partnership with with Proton Holdings.

    PSA said in a statement on Monday that it had signed a share sale agreement and a joint venture agreement to establish a shared manufacturing hub in Gurun, Kedah, in Malaysia. PSA will own a 56 percent stake in the manufacturing hub, but no deal value was disclosed at the press event in Kuala Lumpur.

    The Malaysian plant will have a 50,000-unit capacity. Output of the Peugeot 3008 will begin this year, with the Citroen C5 Aircross following in 2019, PSA said.

    Naza said that with the joint venture it aimed to export 20,000 cars from the plant in the next three years.

    “The Naza Group will have sole responsibility for the distribution of Peugeot, Citroen and DS Automobiles in the domestic market and, with PSA, will explore distribution prospects in other ASEAN markets,” the statement said.

    PSA said the deal formed part of the company’s Push to Pass strategic plan to boost sales. That plan envisages a 10 percent increase in sales by 2018 and a further 15 percent by 2021 versus 2015 for the French group.

    “The creation of the ASEAN (Association of South East Asian Nations) hub in Gurun, Kedah, is a significant leap forward for PSA that will lead to the development of a profitable business in the region as part of our Push to Pass strategic plan,” PSA CEO Carlos Tavares said.

    PSA’s entry into Malaysia echoes that of Chinese manufacturer Zhejiang Geely Holdings Group’s last year. Geely bought a 49.9 percent stake in Malaysia’s Proton, pledging to help the struggling national automaker to strengthen its presence domestically and in the region. PSA was also in the running to form a partnership with Proton.

  • Hyundai’s union says revised trade deal with US ‘humiliating’

    Hyundai’s union says revised trade deal with US ‘humiliating’

    Hyundai Motor’s South Korean labor union on Tuesday called Seoul’s revised free trade deal with the United States “humiliating”, and said the extended tariffs on pick-up trucks mean a missed opportunity to tap into the US market.

    The United States and South Korea agreed to revise a trade pact sharply criticised by US President Donald Trump, Seoul said on Monday, with the nations agreeing to extend US tariffs on Korean pickup trucks by 20 years until 2041.

    “The union has called for domestic (South Korean) production of pickup trucks for the past several years,” the union said in a statement, adding it believes the US pickup truck market “represents the US market’s blue ocean and the future bread and butter of the South Korean auto industry”.

    Although no South Korean automakers currently export pickup trucks to the United States, Hyundai Motor had said last year it planned to launch a model there to catch up with a shift away from sedans.

    The government’s agreement to revise the US-Korea Free Trade Agreement’s auto industry section “is a humiliating negotiation that accepted Trump’s ‘strategy to preemptively block Korean pickup trucks’”, the union said.

    Hyundai was the worst performer among major automakers in the United States as of February, with its sales down 12 per cent year-on-year over the first two months of this year due to its heavy reliance on sedans and its aging SUV models. This compares to the market’s 0.8 per cent drop over the period.

    “Among potential offerings from (Korean) automakers in the US market, Hyundai Motor’s pickup truck is likely to be made locally (in the US),” Yoo Ji-woong, analyst at eBest Investment & Securities, wrote in a note on Tuesday.

    Hyundai Motor said on Monday it was “too early to elaborate on the details such as the estimated timing of the model release and production location”.

  • South Korea agrees to further open auto market to US

    South Korea agrees to further open auto market to US

    South Korea has agreed to further open its auto market to the United States as the two countries prepare to amend their six-year-old free trade agreement, its top trade negotiator said Monday. South Korea’s Trade Minister Kim Hyun-chong said the United States will end tariffs on South Korean-made pick-up trucks in 2041 instead of 2021.

    Each American carmaker will also be able to export 25,000 additional vehicles to South Korea each year without having to comply with domestic safety regulations. South Korea also will ease emission standards for American cars shipped from 2021-2025, when the Asian country is due to set new import regulations.

    Kim said South Korea also won an exemption from increased import tariffs on steel products. The third-largest steel exporter to the United States after Canada and Brazil, South Korea was among 12 countries whose exports of steel and aluminum U.S. President Donald Trump recently said would be hit with heavy tariffs. But South Korea’s steel tariff exemption is subject to a quota of about 2.7 million tons of steel products a year, about 74 percent of its exports in 2017.

    The agreements in principle were announced Monday just hours after Trump said the United States was on the verge of amending its trade agreement with South Korea, which took effect in 2012. They came as a relief to South Korean industries, although the steel companies said they had wanted a larger quota of tariff-free exports to the United States.

    The auto sector is among the most contentious issues in South Korea’s trade dealings with the U.S. The Korean Automobile Manufacturers Association praised the government’s efforts to protect South Korean automakers and avoid major changes on sensitive issues such as adjusting tariffs.

    The revised agreement appears like significant concessions by South Korea but is expected to have little impact on its exports to the United States or its domestic auto market. No local auto companies export pick-up trucks made in South Korea to the United States, according to Kim.

    While U.S. carmakers will be able to ship 50,000 cars to South Korea annually, 25,000 more than before, without being subject to domestic safety regulations no American car brand sold more than 10,000 vehicles in South Korea last year.

    South Korean negotiators managed to avoid changes in treatment of its agriculture sector, a highly sensitive area in domestic politics.

    The two allies started working on amending the free trade pact in August after Trump blamed the arrangement for causing the U.S. trade deficit with South Korea.

    The president told reporters at a Friday news conference that trade deals are being made with various countries and then highlighted South Korea, a key economic and national security partner in Asia. The United States ran a $10.3 billion trade deficit with South Korea last year.

    While the United States posted a trade surplus of $10.7 billion with South Korea in the services sector, it recorded a goods trade deficit of $27.7 billion in 2016, leaving an overall deficit of $17.0 billion.

    After Trump’s remarks, Commerce Secretary Wilbur Ross said he hoped a final agreement with Seoul would be announced next week.

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