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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.

  • 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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  • BMW raises R&D spending for electric, autonomous cars

    BMW raises R&D spending for electric, autonomous cars

    German carmaker BMW will increase research and development (R&D) spending to an all-time high of up to 7 billion euros ($8.6 billion) this year as part of efforts to bring 25 electrified models to market by 2025.

    The Munich-based maker of BMW, Rolls-Royce and Mini vehicles said that despite higher spending it expects group pretax profit to be over 10 billion euros in 2018, at least in line with last year’s level.

    In its annual report, BMW also warned of a possible impact from trade barriers and any anti-dumping customs duties in the United States and added that Brexit could have an adverse long term effect.

    Spending on developing electric and autonomous cars pushed R&D costs a billion euros higher last year, reaching 6.1 billion euros.

    “Investment will rise by a further high three-digit million euro amount year-on-year, primarily from the ongoing new model initiative as well as continued work on e-mobility and autonomous driving,” BMW said in a statement on Wednesday.

    BMW’s R&D ratio for 2018 is expected to be between 6.5 percent and 7 percent of sales. In the next two years the R&D ratio is expected to remain above its usual target corridor of 5 percent to 5.5 percent range, BMW said.

    LUXURY CARS IN DEMAND

    BMW this month reported a 5.3 percent rise in 2017 operating profit on surging demand for high-margin sports utility vehicles, helping to offset higher research spending.

    Sales of luxury cars are expected to continue rising, contributing to new record unit sales this year, it said.

    “In the automotive segment we expect to achieve new all-time highs in 2018. As long as conditions remain stable, we should see a light increase in deliveries from growth in China and the U.S. in particular,” BMW Chief Financial Officer Nicolas Peter said in a statement.

    BMW did inject a note of caution over trade tensions and Britain’s looming exit from the European Union.

    “A possible introduction of trade barriers, including anti-dumping customs duties, by the U.S. administration could have an adverse impact on the BMW Group’s operations,” BMW said in its annual report.

    Separately, BMW said the prospect of diesel bans had hit the second-hand values of some cars, leading to a rise in the credit loss ratio to 0.34 percent, from 0.32 percent a year earlier, reflecting “the situation in the used car markets in North America and Europe.”

    The increase was mainly due to the debate on diesel engines in parts of Europe, BMW said. BMW said risks related to the residual value of used cars were covered by risk provisions.

    BMW shares traded 0.6 percent higher at 0935 GMT.

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  • BlackBerry to provide software for Jaguar Land Rover EVs

    BlackBerry to provide software for Jaguar Land Rover EVs

    BlackBerry Ltd and Tata Motors Ltd’s Jaguar Land Rover (JLR) said on Thursday they reached a licensing agreement to use the Canadian company’s software in the luxury car brand’s next-generation electric vehicles.

    BlackBerry will provide its infotainment and security software to JLR, in the Canadian firm’s latest licensing deal for its autonomous-driving technology after similar agreements with Qualcomm Inc, Baidu Inc and Aptiv Plc.

    BlackBerry’s QNX unit, which makes software for computer systems on cars and has long been used to run car infotainment consoles, is expected to start generating revenue in 2019.

    Its Certicom unit focuses on security technology and serves customers such as IBM Corp, General Electric Co, and Continental Airlines.

    JLR, which was bought by the Tata group in 2008, said last year that all its new cars would be available in an electric or hybrid version from 2020.

    Britain’s biggest carmaker said in January it would open a software engineering centre in Ireland to work on advanced automated driving and electrification technologies.

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  • Floodgates could open as Honda imports cars

    Floodgates could open as Honda imports cars

    After stopping car exports to Việt Nam for more than a month, Japanese auto giant Honda Motor suddenly decided to import around 2,000 vehicles from Thailand in early March.

    This is the first batch of automobiles exempt from import tax under the ASEAN Trade in Goods Agreement (ATIGA) to be imported into Việt Nam.

    ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Việt Nam.

    Lý Thanh Bình, head of customs at HCM City’s Hiệp Phước Port, confirmed that Honda cars including Jazz, Accord, CR-V and Civic were unloaded at the port on March 1. The vehicles will be sold in one or two months after they undergo several mandatory tests as part of the customs clearance process.

    In January, Toyota Motor and Honda decided to suspend exports to Việt Nam saying they are unable to meet Việt Nam’s stringent checks of imported vehicles under the new Decree 116.

    The decree on the production, assembly, import and warranty of automobiles was issued just as Việt Nam eliminated tariffs on automobiles imported from ASEAN members.

    It requires all models of imported vehicles to obtain a Vehicle Type Approval certificate from authorities in the exporting countries.

    The new rule also requires emission and safety tests to be done on every batch of automobiles imported. In the past, only the first shipment of a model was tested.

    Many auto giants from Japan and the US have expressed concern, saying it would be difficult to meet the requirements.

    Some also said the new requirements would cause a huge waste of time and money for importers since one emission test could take two months and cost up to US$10,000.

    The decree is aimed at strengthening quality checks and protecting the local industry.

    The fact that Honda resumed exports to Việt Nam proves that car importers can remove the biggest obstacles like the above-said things that they were facing as they want to import the vehicles under the new regulations.

    Honda had Vehicle Type Approval certificates granted by Thailand where the cars were produced.

    Analysts said Honda’s decision to resume exports to Việt Nam should be considered a big factor for the Vietnamese auto market. This was because after Honda, other companies would also be able to receive similar certificates like Honda to bring their cars back to Việt Nam.

    Because of this, car imports from other countries such as Indonesia and Malaysia are also expected to soon come to Việt Nam.

    The return of Honda and other companies including Ford and Toyota in the near future is expected to drag prices significantly lower, thus fulfilling Vietnamese consumers’ dream of buying cars at lower prices.

    According to an official announcement from Honda Vietnam, its compact SUV Honda CR-V is now listed at VNĐ958 million ($42,076) to VNĐ1.068 billion ($46,907), depending on the model and specifications.

    Compared to their earlier prices, when a 30 per cent tax was in place, the 1.5E and 1.5G models are cheaper by VNĐ178 million ($7,818) and VNĐ188 million ($8,257).

    However, market observers said though tariffs on automobiles imported from ASEAN were eliminated over two months ago, car prices have shown no signs of coming down.

    Some have even seen their prices rise.

    They blamed this on not only a shortage of vehicles on the market but also the increasing cost of importing cars under the new rules.

    The shortage is understandable since only Honda of those that do not assemble in the country have gone through the new import rigmarole. Meanwhile, the number of assembled cars has also decreased because of lack of components imported from abroad, meaning supply has been unable to meet demand.

    Trường Hải Auto Joint Stock Company has hiked the prices of many models after making some cuts before Tết (Vietnam Lunar New Year) in mid-February.

    Consequently, the prices of its Mazda cars are up by VNĐ30-50 million. The Nissan Navara saw its prices cut by VNĐ10-20 million before Tết, but is now back to its earlier rates.

    Housing allure remains for overseas Vietnamese

    According to statistics from the World Bank, overseas remittances to the country last year were worth at $13.8 billion, up 20 per cent from 2016.

    This year, they are expected to go up by 5-7 per cent.

    Analysts said overseas remittances would continue to provide a vital impetus to the economy, especially to the property sector.

    The State Bank of Việt Nam said around 71 per cent of remittances went into business, and 21-22 per cent into the real estate sector.

    This means that on average every year, the sector gets an infusion of around $2.5 billion.

    Experts said the remittances are a reliable and steady source of foreign currency, and help keep foreign reserves buoyant.

    An executive at Savills Vietnam’s international residential sales department pointed out that by nature remittances are a “one-way” source of funding and could match or exceed foreign direct investment and foreign portfolio investment.

    Now they play an important role in economic growth. There are millions of Vietnamese living in the US, Europe and Asia, and a growing number of them are finding their way home to work, invest or retire.

    A thriving economy, constantly improving business environment and laws that allow overseas Vietnamese to own houses in Việt Nam are the reasons why they are investing in the housing sector.

    Experts said the housing market now offers favourable conditions for overseas Vietnamese to make profits.

    It has a wide range of products of high quality and reasonable prices, meeting overseas Vietnamese investors’ every demand, whether investment, settling down in the country or working.

    According to Savills Vietnam, safety, security and after-sales services are also factors that overseas Vietnamese and other foreign customers consider when buying a house in addition to location, price, convenience, architecture and design.

    It is undeniable that the attractiveness of the housing market has contributed to increasing remittances to Việt Nam in the last few years.

    According to the State Bank of Việt Nam’s HCM City branch, around 50 per cent of remittances to Việt Nam are to the southern metropolis.

    Around 22 per cent of the remittances to the city of $5.2 billion went into the housing market.

    Experts said to stabilise the flow of remittances into the country and into the real estate sector, the Government should offer incentives like low fees.

    They also stressed the need to make the housing market more transparent and efficiently provide market information to overseas Vietnamese.

    They wanted the Government to have tough measures to prevent the frequent occurrence of price “fever” in the housing market.

    They also called on real estate developers to carefully study overseas Vietnamese and foreigners’ housing needs and improve the quality of their products and services.

     

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  • German automakers gain ground in South Korea, outselling GM for first time

    German automakers gain ground in South Korea, outselling GM for first time

    Mercedes and BMW both sold more cars in South Korea than General Motors for the first time last month, helped by the growing popularity of German premium brands and as consumers shied away from GM after it announced a major restructuring.

    While home-grown automakers Hyundai Motor and Kia Motors Corp dominate the local market, high-end German vehicles have made inroads in recent years with more diverse offerings for brand-conscious consumers.

    BMW saw the biggest jump with February sales nearly doubling to 6,118 vehicles, industry data showed. That was just a tad behind Mercedes which led the imported car rankings with 6,192 cars, up 12 percent from the same period a year earlier.

    South Korea last year became the sixth biggest market for Mercedes, climbing from eighth place.

    GM’s announcement last month that it plans to shut down of one of its four factories in South Korea and was weighing the fate of the three other plants resulted in domestic retail sales nearly halving in February to 5,804.

    With consumers worried about loss of after-care services and residual value, GM lost its long-held spot as South Korea’s No. 3 automaker, slipping to sixth place.

    The U.S automaker, whose South Korean operations are primarily geared toward exports, is seeking financial aid from Seoul as well as concessions on wages and benefits from its local union to stay operating in the country.

    Talks with the labor union on Wednesday failed to produce concrete results although some 2,500 workers have applied for voluntary redundancy package.

    “We hope to wrap up talks with the labor union and the government swiftly,” a GM Korea spokesman said.

    “A drawn-out restructuring will hurt consumer trust,” he added.

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  • Kobe Steel, Toyota hit with U.S. lawsuit over vehicle metal quality

    Kobe Steel, Toyota hit with U.S. lawsuit over vehicle metal quality

    U.S. consumers have filed a lawsuit against Kobe Steel Ltd (5406.T) and Toyota Motor Corp (7203.T) accusing the companies of violating consumer protection laws and engaging in fraud by concealing the use of substandard metal components in vehicles.

    The proposed class-action lawsuit represents the first U.S. consumer complaint filed against Kobe Steel over data fraud, and highlights the legal risks the company faces even after Chief Executive Officer Hiroya Kawasaki announced on Tuesday he would quit to draw a line under the scandal.

    The 112-year-old company, which supplies steel and aluminum parts to manufacturers of cars, planes and trains around the world, admitted last year to supplying products with falsified specifications to around 500 customers, throwing global supply chains into turmoil.

    Kobe, Japan’s third-largest steelmaker, said on Tuesday that the data fraud had gone on for nearly five decades, and that it found new cases of impropriety, widening the number of affected clients to 605, including 222 overseas. The company said Kawasaki would quit on April 1.

    The U.S. lawsuit, filed on Monday in federal court in San Francisco, was brought by two California residents who seek to represent a nationwide class of consumers who bought allegedly defective Toyota vehicles.

    According to the complaint, Toyota’s Prius, Camry, Land Cruiser and Lexus vehicles have all been manufactured with “sub-standard” steel, aluminum and copper.

    The plaintiffs allege that Toyota and Kobe Steel both violated federal and state consumer protection laws by claiming that the vehicles complied with U.S. quality standards.

    “We have not grasped the whole content of the case and we are now looking into the matter,” a Kobe Steel spokesman said on Wednesday.

    Toyota declined to comment on the lawsuit.

    In a special order in November, the U.S. National Highway Traffic Safety Administration asked 29 automakers, including Toyota, to disclose any safety issues for any of their vehicles or engines containing products supplied by Kobe Steel.

    The regulator did not immediately respond to a request for comment on what data it had received in response and whether there was any evidence of faulty materials in Toyota cars.

    Monday’s 40-page lawsuit outlines the ways in which the companies allegedly concealed poor metal quality. It demands compensatory and punitive damages of an unspecified amount.

    According to the complaint, at least six Toyota car models sold or leased to U.S. consumers were manufactured with substandard metal from Kobe Steel. Plaintiffs said the metal could impact vehicle safety and performance.

    Toyota had the duty to disclose any defective vehicle components because it has consistently marketed its automobiles as safe, functional and reliable, the lawsuit says.

    Kobe and Toyota had superior knowledge and access to the facts, the lawsuit alleged, giving rise to fraud by concealment claims.

    Four individuals in Canada who bought cars that use Kobe’s products have already brought class-action lawsuits seeking unspecified damages against Kobe and it subsidiaries.

    Kobe is also undergoing a separate U.S. Justice Department probe.

    A company executive said on Tuesday that it is fully cooperating with the U.S. probe, but it was hard to predict how it would develop.