BEIJING - Beijing Automotive Industry Holding Corp (BAIC), the Chinese partner of Daimler AG and Hyundai Motor Corp, plans to launch more than 20 passenger vehicle models under its own brand by 2014, mainly based on acquired core technologies from Swedish brand Saab.
The fifth-biggest Chinese auto group said during the Beijing auto show that its own-brand passenger vehicles will include a subcompact, compact, mid-sized and large-sized sedans as well as light and heavy-duty sports-utility vehicles (SUVs) and crossovers.
BAIC will roll out three models later this year, a B40 light-duty SUV, a C30 subcompact car and a J30 crossover, it said.
The company bought Saab 9-5 and 9-3 models as well as its engine technologies for $200 million last December. But it didn't buy the Saab brand, which was acquired by small Dutch automaker Spyker Cars NV in February.
BAIC's planned passenger vehicle models will be under its own badge Beijing. The Beijing marque was born in 1958, but abandoned soon afterwards.
According to executives from BAIC, the group aims to sell 100,000 own-brand passenger vehicles next year. By 2015, it plans to have an annual production capacity of 550,000 passenger vehicles and boost sales to 400,000 units.
Construction of a 150,000-unit plant for Beijing-brand passenger vehicles kicked off earlier this year in Beijing.
BAIC is also making inroads into China's burgeoning market for new-energy passenger vehicles.
Last November, it registered a branch focusing on research and development of new-energy vehicles, including purely electric cars, petrol-electric hybrid vehicles and other alternative energy vehicles.
It said it will begin small-volume production of new-energy vehicles later this year.
It aims to boost production of new-energy passenger vehicles to 150,000 units a year by 2015.
The group said its purely electric lineup will cover a range from low to high-end vehicles. Prices are estimated to be 10,000 to 90,000 yuan higher than the comparable models powered by conventional fuels.
With declining technology costs and government subsidies, purely electric vehicles have rosy market prospects, BAIC said.
The group now runs joint ventures with Daimler and Hyundai to make premium Mercedes-Benz cars and Hyundai-brand cars.
It is also making its own-brand Foton trucks.
In the first quarter of this year, BAIC's total sales jumped by 43.9 percent year-on-year to 360,000 units. Its first-quarter profits skyrocketed by 162.4 percent to 2.23 billion yuan.
The Group Chairman Xu Heyi said earlier that it planned to move a total of 1.24 million vehicles this year, up 60 percent from 2009.
By Lao Gong (China Daily)
Thursday, September 30, 2010
Solar industry players hit by rising orders
CHENGDU - Xushuang Solar Company, a subsidiary of Hebei Dongxu Investment Group Co, on Wednesday inked an agreement with its Tanzanian partner to invest 500 million yuan ($74.77 million) in a thin-film solar cell project in the African country.
The project will have a production capacity of 20 megawatts (mW).
On the same day, during the China (Chengdu) New Energy International Forum & Fair 2010, Tongwei Group signed another contract with the economic development zone of Shuangliu county in Chengdu to build a base for a whole photovoltaic production line.
The solar energy industry usually hits a bottleneck when the big players start to face production pressure.
And, they have already been hit by mounting order books.
Xie Xiaonan, vice-president of Suntech Power Holdings Co, said the company's production had touched 1,000 mW by Sept 6, and he estimated whole year production to touch 1,500 mW.
"We have to speed up to expand because of the increasing order book. The 1,500 mW can only meet 75 percent of our clients' needs," Xie said.
Experts said the government should take more steps to enlarge the domestic solar energy market and increase the domestic demand for photovoltaic products to help in the sustainable development of the industry.
Shi Dinghuan, counselor of the State Council of China and president of the Chinese Renewable Energy Society, said the nation must seriously regard the renewable energy sector as a substitute for traditional energy sources instead of as a supplement to it.
China produces nearly 40 percent of the photovoltaic cells in the world, but more than 90 percent of its products are exported. The photovoltaic products manufacturers depend heavily on foreign solar energy markets.
"Governments at all levels need to do more to make better policies to provide a more profitable business environment for the solar energy industry as well as for other renewable energy sources," said Shi.
The US, Europe and China are the three leading players in the solar energy industry.
The growth rate of the photovoltaic industry next year will be slower than this year's, many experts believe. It means investors will have to face more competition, they say.
According to Pu Guisen, director of the new energy industry office in Shuangliu County in Chengdu, the central government has carried out only two supportive programs so far to help the development of the solar energy industry.
Statistics show that the two programs, together with some other photovoltaic programs at local government levels, only catered to around 258 mW in photovoltaic products demand in 2009, even as the total output of photovoltaic cells last year was 4,000 mW. The domestic market consumed only 6.5 percent of the industry's total production.
Li Hejun, chairman of the China New Energy Commerce Chamber, said that the government should give more incentives to the renewable energy industry.
"I feel that renewable energy applications in China has been underestimated by most people, especially administrative department officials," said Li. "There is often a gap between the estimates and real production capacities."
Professor Martin Green of the University of New South Wales agreed that the key to widen the bottleneck was to enhance the domestic market.
According to Pu, the total construction area in China was 50 billion square meters, one-fifth of which was suitable for the application of solar energy technology.
"If we install the photovoltaic system in 20 percent of buildings in China, the system would produce 200,000 mW of power," said Pu. "The potential market is huge."
However, some insiders have voiced different views.
Excessive and rapid development could be dangerous for the industry, they have said.
Li Junfeng, deputy director of the Energy Research Institution of the National Development and Reform Commission, said it might cause trouble if the central government implements more policies to improve solar energy development.
"We must control the pace of the development of the new energy industry," Li said.
The project will have a production capacity of 20 megawatts (mW).
On the same day, during the China (Chengdu) New Energy International Forum & Fair 2010, Tongwei Group signed another contract with the economic development zone of Shuangliu county in Chengdu to build a base for a whole photovoltaic production line.
The solar energy industry usually hits a bottleneck when the big players start to face production pressure.
And, they have already been hit by mounting order books.
Xie Xiaonan, vice-president of Suntech Power Holdings Co, said the company's production had touched 1,000 mW by Sept 6, and he estimated whole year production to touch 1,500 mW.
"We have to speed up to expand because of the increasing order book. The 1,500 mW can only meet 75 percent of our clients' needs," Xie said.
Experts said the government should take more steps to enlarge the domestic solar energy market and increase the domestic demand for photovoltaic products to help in the sustainable development of the industry.
Shi Dinghuan, counselor of the State Council of China and president of the Chinese Renewable Energy Society, said the nation must seriously regard the renewable energy sector as a substitute for traditional energy sources instead of as a supplement to it.
China produces nearly 40 percent of the photovoltaic cells in the world, but more than 90 percent of its products are exported. The photovoltaic products manufacturers depend heavily on foreign solar energy markets.
"Governments at all levels need to do more to make better policies to provide a more profitable business environment for the solar energy industry as well as for other renewable energy sources," said Shi.
The US, Europe and China are the three leading players in the solar energy industry.
The growth rate of the photovoltaic industry next year will be slower than this year's, many experts believe. It means investors will have to face more competition, they say.
According to Pu Guisen, director of the new energy industry office in Shuangliu County in Chengdu, the central government has carried out only two supportive programs so far to help the development of the solar energy industry.
Statistics show that the two programs, together with some other photovoltaic programs at local government levels, only catered to around 258 mW in photovoltaic products demand in 2009, even as the total output of photovoltaic cells last year was 4,000 mW. The domestic market consumed only 6.5 percent of the industry's total production.
Li Hejun, chairman of the China New Energy Commerce Chamber, said that the government should give more incentives to the renewable energy industry.
"I feel that renewable energy applications in China has been underestimated by most people, especially administrative department officials," said Li. "There is often a gap between the estimates and real production capacities."
Professor Martin Green of the University of New South Wales agreed that the key to widen the bottleneck was to enhance the domestic market.
According to Pu, the total construction area in China was 50 billion square meters, one-fifth of which was suitable for the application of solar energy technology.
"If we install the photovoltaic system in 20 percent of buildings in China, the system would produce 200,000 mW of power," said Pu. "The potential market is huge."
However, some insiders have voiced different views.
Excessive and rapid development could be dangerous for the industry, they have said.
Li Junfeng, deputy director of the Energy Research Institution of the National Development and Reform Commission, said it might cause trouble if the central government implements more policies to improve solar energy development.
"We must control the pace of the development of the new energy industry," Li said.
Wednesday, September 29, 2010
Michelin goes for growth with shock capital rise
PARIS — Global tyre manufacturer Michelin revealed an aggressive drive into fast-growing emerging markets on Tuesday, with a big capital increase which shocked investors and pushed down its shares.
The surprise announcement that the France-based group would raise 1.2 billion euros (1.6 billion dollars) with a preference issue for shareholders, but at a 31.0-percent discount to the last quoted price, drove Michelin shares down by 11.52 percent to 57.74 euros in midday trading.
Michelin pitched the issue price for the new shares at 45 euros per share, well below the price of 65.26 euros at the close of trading on Monday.
"The price proposed was not disappointing, but the drop is very big," said Xavier de Villepion, a trader at Global Equities.
Michelin said its plan was to quadruple sales in developing markets and chief executive Michel Rollier said the group intended to boost sales by a quarter within five years and by half in the next 10 years.
"The message, is to accelerate growth," Michelin's chief executive Michel Rollier told reporters. "The prospects for growth in world markets are considerable."
Michelin, known as a supplier of tyres for cars, trucks and aircraft around the world, and for its brand logo of a man made of tyres, said that the capital increase would enable it raise investment in 2011 to 1.6 billion euros from 1.2 billion euros.
The new capital would be used to drive up growth. In emerging markets, growth was expected to rocket from 2.0 to 2.5 percent per year now to 8.0-9.0 percent.
The strategy was intended to double sales in emerging markets, and in mature markets the group intended to raise sales by 25 percent by 2015, Rollier said.
The company said that the capital increase would strengthen its credit rating, and "in a general way, improve the group's financial flexibility."
At Global Equities, De Villepion said that the announcement by Michelin was timed to make best use of a recent rise in the price of shares in the company.
In July, Michelin reported a first-half net profit of 503 million euros compared to a loss of 119 million euros in the same period in 2009.
Michelin said at the time that it was benefiting from an extraordinarily strong recovery of the market for tyres.
Trading conditions in the auto sector, an important global economic indicator, improved in the first half this year after being hit by a slump in demand at the height of the economic downturn.
Sales in Europe and the US have slowed in recent months as many countries wind down cash cash-for-clunkers programmes launched last year to prop up the ailing sector during the crisis.
Much of the demand for new vehicles is coming from emerging markets, particularly in Asia.
Sales in China this year are forecast to reach 15 million units, an increase of about 20 percent on a yearly comparison.
In India, Asia's third-biggest auto market, sales are projected to triple over the next decade to six million cars a year from the current two million, according to industry estimates.
The surprise announcement that the France-based group would raise 1.2 billion euros (1.6 billion dollars) with a preference issue for shareholders, but at a 31.0-percent discount to the last quoted price, drove Michelin shares down by 11.52 percent to 57.74 euros in midday trading.
Michelin pitched the issue price for the new shares at 45 euros per share, well below the price of 65.26 euros at the close of trading on Monday.
"The price proposed was not disappointing, but the drop is very big," said Xavier de Villepion, a trader at Global Equities.
Michelin said its plan was to quadruple sales in developing markets and chief executive Michel Rollier said the group intended to boost sales by a quarter within five years and by half in the next 10 years.
"The message, is to accelerate growth," Michelin's chief executive Michel Rollier told reporters. "The prospects for growth in world markets are considerable."
Michelin, known as a supplier of tyres for cars, trucks and aircraft around the world, and for its brand logo of a man made of tyres, said that the capital increase would enable it raise investment in 2011 to 1.6 billion euros from 1.2 billion euros.
The new capital would be used to drive up growth. In emerging markets, growth was expected to rocket from 2.0 to 2.5 percent per year now to 8.0-9.0 percent.
The strategy was intended to double sales in emerging markets, and in mature markets the group intended to raise sales by 25 percent by 2015, Rollier said.
The company said that the capital increase would strengthen its credit rating, and "in a general way, improve the group's financial flexibility."
At Global Equities, De Villepion said that the announcement by Michelin was timed to make best use of a recent rise in the price of shares in the company.
In July, Michelin reported a first-half net profit of 503 million euros compared to a loss of 119 million euros in the same period in 2009.
Michelin said at the time that it was benefiting from an extraordinarily strong recovery of the market for tyres.
Trading conditions in the auto sector, an important global economic indicator, improved in the first half this year after being hit by a slump in demand at the height of the economic downturn.
Sales in Europe and the US have slowed in recent months as many countries wind down cash cash-for-clunkers programmes launched last year to prop up the ailing sector during the crisis.
Much of the demand for new vehicles is coming from emerging markets, particularly in Asia.
Sales in China this year are forecast to reach 15 million units, an increase of about 20 percent on a yearly comparison.
In India, Asia's third-biggest auto market, sales are projected to triple over the next decade to six million cars a year from the current two million, according to industry estimates.
Tuesday, September 28, 2010
Vice-premier urges development of China's auto parts industry
BEIJING - Chinese Vice-premier Zhang Dejiang has urged more efforts to develop China's auto parts industry and new energy vehicles, to increase the international competitiveness of the nation's auto sector.
Auto-part producers should step up self-development of core technologies and form their own brands to advance the sector, Zhang said during his visit to the China International Auto Parts Expo in Beijing on Sept 26.
"Quality should always come first," he said.
Improving the design and manufacturing level of the auto parts industry is "crucial" to the nation's auto sector, Zhang said.
"China's auto industry has overcome the severe impact of the financial crisis and achieved great progress," Zhang said.
(Xinhua)
However, he noted that the overall industry is not strong despite its large volumes of production and sales.
China overtook the United States to become the world's largest auto maker and auto market in 2009.
Output and sales both expanded by more than 40 percent to reach 13.79 million and 13.64 million units, respectively, last year, due to the government's tax reduction on car purchases and other stimulus measures.
In the first eight months of the year, auto sales to dealers totaled 11.58 million units, up 39.02 percent year on year, while output rose 39.27 percent from a year ago to 11.49 million units.
Automakers should work to promote new energy cars, to upgrade the auto industry, he said.
The Chinese government launched a subsidy program to promote green cars purchases in July. Under the scheme, buyers of cars designated "fuel-saving" receive a subsidy of 3,000 yuan ($447) on each vehicle purchase.
(Xinhua)
Auto-part producers should step up self-development of core technologies and form their own brands to advance the sector, Zhang said during his visit to the China International Auto Parts Expo in Beijing on Sept 26.
"Quality should always come first," he said.
Improving the design and manufacturing level of the auto parts industry is "crucial" to the nation's auto sector, Zhang said.
"China's auto industry has overcome the severe impact of the financial crisis and achieved great progress," Zhang said.
(Xinhua)
However, he noted that the overall industry is not strong despite its large volumes of production and sales.
China overtook the United States to become the world's largest auto maker and auto market in 2009.
Output and sales both expanded by more than 40 percent to reach 13.79 million and 13.64 million units, respectively, last year, due to the government's tax reduction on car purchases and other stimulus measures.
In the first eight months of the year, auto sales to dealers totaled 11.58 million units, up 39.02 percent year on year, while output rose 39.27 percent from a year ago to 11.49 million units.
Automakers should work to promote new energy cars, to upgrade the auto industry, he said.
The Chinese government launched a subsidy program to promote green cars purchases in July. Under the scheme, buyers of cars designated "fuel-saving" receive a subsidy of 3,000 yuan ($447) on each vehicle purchase.
(Xinhua)
Monday, September 27, 2010
Nissan and Dongfeng create new car brand
BEIJING - Nissan Motor Co last week unveiled a plan to create an non-Nissan car brand in China with local partner Dongfeng Motor Corp.
The joint venture, Dongfeng Motor Co Ltd, plans to make passenger cars under the all-new Venucia brand that will be first released in a series of concept and production cars at the end of the year.
The first Venucia model will be put on sale during the first half of 2012, the joint venture said.
The program makes Nissan the second foreign carmaker in China after Honda Motor Co to create an all-new brand without its parent company badge.
Honda announced in 2009 that it would produce the Everus-brand high-end cars in China with its joint venture partner Guangzhou Automobile Corp.
The two Japanese carmakers' new-brand campaign signals hyper-competition in China's vehicle market - the world's biggest - in the near future.
There will be more than 90 brands and 300 locally made models in China's passenger vehicle market contesting for buyers by 2015, according to market research firm JD Power.
Their new-brand plans also play to the Chinese regulators' expectations for foreign carmakers to strengthen new product research and development in China, instead of only assembling their own-brand passenger cars here.
All of Sino-foreign passenger car joint ventures are now offering foreign-badge models to Chinese customers.
Nissan's joint venture with Dongfeng Motor Corp are making the Japanese carmaker's Teana mid-sized sedan, Sylphy and Tiida compact car, March subcompact and Qashqai crossover, Livina MPV, and X-Trail and Paladin SUVs.
In the first half of this year, the joint venture's passenger car sales surged by 47 percent year-on-year to 330,776 units, ranking No 4 in China.
The company expects to sell more than 600,000 passenger cars this year, up from 500,000 units in 2009.
It is building a new 300,000-unit passenger car plant with an investment of 5 billion yuan in southern city of Guangzhou. The new factory, to be operational in 2012, will hike the joint venture's annual production capacity to 1 million passenger cars.
Since the tie-up was established in 2003, it has moved a total of more than 2 million cars.
The joint venture is also building Dongfeng-brand commercial vehicles.
Overall vehicle sales in China totaled 9.02 million units in the first half, up 47.67 percent from a year ago, according to the China Association of Automobile Manufacturers.
Full-year vehicles sales in China are predicted to surpass 16 million units, up from 14.7 million units last year.
China Daily
The joint venture, Dongfeng Motor Co Ltd, plans to make passenger cars under the all-new Venucia brand that will be first released in a series of concept and production cars at the end of the year.
The first Venucia model will be put on sale during the first half of 2012, the joint venture said.
The program makes Nissan the second foreign carmaker in China after Honda Motor Co to create an all-new brand without its parent company badge.
Honda announced in 2009 that it would produce the Everus-brand high-end cars in China with its joint venture partner Guangzhou Automobile Corp.
The two Japanese carmakers' new-brand campaign signals hyper-competition in China's vehicle market - the world's biggest - in the near future.
There will be more than 90 brands and 300 locally made models in China's passenger vehicle market contesting for buyers by 2015, according to market research firm JD Power.
Their new-brand plans also play to the Chinese regulators' expectations for foreign carmakers to strengthen new product research and development in China, instead of only assembling their own-brand passenger cars here.
All of Sino-foreign passenger car joint ventures are now offering foreign-badge models to Chinese customers.
Nissan's joint venture with Dongfeng Motor Corp are making the Japanese carmaker's Teana mid-sized sedan, Sylphy and Tiida compact car, March subcompact and Qashqai crossover, Livina MPV, and X-Trail and Paladin SUVs.
In the first half of this year, the joint venture's passenger car sales surged by 47 percent year-on-year to 330,776 units, ranking No 4 in China.
The company expects to sell more than 600,000 passenger cars this year, up from 500,000 units in 2009.
It is building a new 300,000-unit passenger car plant with an investment of 5 billion yuan in southern city of Guangzhou. The new factory, to be operational in 2012, will hike the joint venture's annual production capacity to 1 million passenger cars.
Since the tie-up was established in 2003, it has moved a total of more than 2 million cars.
The joint venture is also building Dongfeng-brand commercial vehicles.
Overall vehicle sales in China totaled 9.02 million units in the first half, up 47.67 percent from a year ago, according to the China Association of Automobile Manufacturers.
Full-year vehicles sales in China are predicted to surpass 16 million units, up from 14.7 million units last year.
China Daily
Nissan to double China capacity to tap hot market
(Agencies)-Japan's Nissan Motor Co Ltd plans to double its production capacity in China to 1.2 million units by 2012, as it aims for a 10 percent share of China auto market, Reuters reported Monday.
The new production plan is 20 percent above Nissan's earlier target, said the report.
The auto company on Monday announced the opening of its first sport utility vehicle (SUV) plant in Zhengzhou, capital city of the central China Henan province.
Nissan represents 20 percent of total sales in China, and holds the number one position, Reuters citing Chief Executive Carlos Ghosn's speech at the opening ceremony for its new SUV plant.
Nissan was expanding its other two production bases in southern Guangzhou and Xiangfen in northern Shanxi province, Reuters quoted Ghosn.
Nissan's new SUV plant in Zhengzhou has a total investment of 1 billion yuan ($148.7 million), and will be run by Zhengzhou Nissan Co Ltd, a joint venture between Nissan and Dongfeng, according to the report.
Nissan, 44 percent held by France's Renault SA, runs an auto venture with Hong Kong-listed Dongfeng Motor Group Co Ltd (DFG) making passenger vehicles, including the Teana and Sylphy sedans. Commercial vehicles are built through Shanghai-listed Dongfeng Automobile Co Ltd and Zhengzhou Nissan Automobile Co, both of which Nissan controls with DFG.
DFG also joined hands with French PSA Peugeot Citroën, and Japanese Honda Motor Co. The parent Dongfeng Motor Corporation is in joint venture with Korean Kia Motors Corp.
Passenger car deliveries in China jumped nearly 60 percent from a year earlier, as economic growth boosts car purchases in the world's biggest automobile market.
The new production plan is 20 percent above Nissan's earlier target, said the report.
The auto company on Monday announced the opening of its first sport utility vehicle (SUV) plant in Zhengzhou, capital city of the central China Henan province.
Nissan represents 20 percent of total sales in China, and holds the number one position, Reuters citing Chief Executive Carlos Ghosn's speech at the opening ceremony for its new SUV plant.
Nissan was expanding its other two production bases in southern Guangzhou and Xiangfen in northern Shanxi province, Reuters quoted Ghosn.
Nissan's new SUV plant in Zhengzhou has a total investment of 1 billion yuan ($148.7 million), and will be run by Zhengzhou Nissan Co Ltd, a joint venture between Nissan and Dongfeng, according to the report.
Nissan, 44 percent held by France's Renault SA, runs an auto venture with Hong Kong-listed Dongfeng Motor Group Co Ltd (DFG) making passenger vehicles, including the Teana and Sylphy sedans. Commercial vehicles are built through Shanghai-listed Dongfeng Automobile Co Ltd and Zhengzhou Nissan Automobile Co, both of which Nissan controls with DFG.
DFG also joined hands with French PSA Peugeot Citroën, and Japanese Honda Motor Co. The parent Dongfeng Motor Corporation is in joint venture with Korean Kia Motors Corp.
Passenger car deliveries in China jumped nearly 60 percent from a year earlier, as economic growth boosts car purchases in the world's biggest automobile market.
Ford to build engine plant in Chongqing
Changan Ford Mazda Automobile Co will spend $500 million to build an engine plant in Southwest China's Chongqing, Bloomberg reported Saturday.
The plant will increase Ford's engine capacity by 400,000 units in China, the report said, citing an e-mail statement from the company.
Construction of this plant will begin next year, and engine production will start in 2013, Ford officials said in the statement. By then, production will more than double the current level.
The plant will increase Ford's engine capacity by 400,000 units in China, the report said, citing an e-mail statement from the company.
Construction of this plant will begin next year, and engine production will start in 2013, Ford officials said in the statement. By then, production will more than double the current level.
Tyre prices here expected to inflate
SINGAPORE - Motorists should brace themselves for higher tyre prices as global demand for rubber bounces up and manufacturers face the biggest shortage in four years. Tyre manufacturers in Japan and China have told dealers here to expect price increases come December, according to Singapore Motor Tyre Dealers Association chairman Lim Gek Choon.
Since January, manufacturers have rolled out at least two price increases of between 5 and 7 per cent, dealers say. This has translated to higher retail prices. For example, a mid-range 15-inch Yokohama tyre that cost $120 eight months ago will cost $130 when the latest increase kicks in next month.
Two weeks ago, Goodyear announced it would charge more for its tyres in the United States, while last month Bridgestone raised European prices for the second time this year.
Prices are expected to climb as China's growth and the recovery in Europe and the US drive the global surge in rubber demand, while a poor harvest this year has led to diminishing stockpiles.
Futures may climb as much as 14 per cent to US$4 ($5.30)a kilogramme by March on the Singapore Commodity Exchange, according to the median estimate of nine brokers and analysts surveyed by Bloomberg.
Mr Ler Hwee Tiong, who runs sales portal Tyrepac.com and has been in the business for 15 years, said retailers would "try to absorb" any price increases. "But this cannot be prolonged because of various factors such as cost of running a business. Usually, down the road, say, in one to two months, we will have to push the cost to consumers. It is inevitable," he told MediaCorp.
Currency movement may help to cushion any increases. For example, the weak US dollar has helped Stamford Tyres "compensate" for warehouse costs despite two rounds of price increases, said company president Wee Kok Wah. "As a result, based on the retail price in Singapore dollars, we have not done much in terms of price increase," he added.
The company, which implemented a 5-per-cent price increase in May, will assess the situation after January. But Mr Wee expects tyre prices for passenger cars, light trucks and sports utilities vehicles to be maintained. "I don't think there is a shortage of tyres but there is a shortage of rubber," he added.
With natural rubber making up half the cost of a tyre, industry players expect the quantum of price increases to be small, similar to those seen this year. "They (manufacturers) don't do double-digit increases because it would be hard to swallow for everyone down the line," said Mr Ler.
http://www.todayonline.com/hotnews/EDC100928-0000045/Tyre-prices-here-expected-to-inflate
Since January, manufacturers have rolled out at least two price increases of between 5 and 7 per cent, dealers say. This has translated to higher retail prices. For example, a mid-range 15-inch Yokohama tyre that cost $120 eight months ago will cost $130 when the latest increase kicks in next month.
Two weeks ago, Goodyear announced it would charge more for its tyres in the United States, while last month Bridgestone raised European prices for the second time this year.
Prices are expected to climb as China's growth and the recovery in Europe and the US drive the global surge in rubber demand, while a poor harvest this year has led to diminishing stockpiles.
Futures may climb as much as 14 per cent to US$4 ($5.30)a kilogramme by March on the Singapore Commodity Exchange, according to the median estimate of nine brokers and analysts surveyed by Bloomberg.
Mr Ler Hwee Tiong, who runs sales portal Tyrepac.com and has been in the business for 15 years, said retailers would "try to absorb" any price increases. "But this cannot be prolonged because of various factors such as cost of running a business. Usually, down the road, say, in one to two months, we will have to push the cost to consumers. It is inevitable," he told MediaCorp.
Currency movement may help to cushion any increases. For example, the weak US dollar has helped Stamford Tyres "compensate" for warehouse costs despite two rounds of price increases, said company president Wee Kok Wah. "As a result, based on the retail price in Singapore dollars, we have not done much in terms of price increase," he added.
The company, which implemented a 5-per-cent price increase in May, will assess the situation after January. But Mr Wee expects tyre prices for passenger cars, light trucks and sports utilities vehicles to be maintained. "I don't think there is a shortage of tyres but there is a shortage of rubber," he added.
With natural rubber making up half the cost of a tyre, industry players expect the quantum of price increases to be small, similar to those seen this year. "They (manufacturers) don't do double-digit increases because it would be hard to swallow for everyone down the line," said Mr Ler.
http://www.todayonline.com/hotnews/EDC100928-0000045/Tyre-prices-here-expected-to-inflate
Sunday, September 26, 2010
Six Rules of Michael Steinhardt
Michael Steinhardt was one of the most successful hedge fund managers of all time. A dollar invested with Steinhardt Partners LP in 1967 was worth $481 when Steinhardt retired in 1995.
The following six rules were pulled out from a speech he gave:
1. Make all your mistakes early in life: The more tough lessons you learn early on, the fewer (bigger) errors you make later. A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you something.
2. Always make your living doing something you enjoy: Devote your full intensity for success over the long-term.
3. Be intellectually competitive: Do constant research on subjects that make you money. Plow through the data so as to be able to sense a major change coming in the macro situation.
4. Make good decisions even with incomplete information: Investors never have all the data they need before they put their money at risk. Investing is all about decision-making with imperfect information. You will never have all the info you need. What matters is what you do with the information you have. Do your homework and focus on the facts that matter most in any investing situation.
5. Always trust your intuition: Intuition is more than just a hunch — it resembles a hidden supercomputer in the mind that you’re not even aware is there. It can help you do the right thing at the right time if you give it a chance. Over time, your own trading experience will help develop your intuition so that major pitfalls can be avoided.
6. Don’t make small investments: You only have so much time and energy so when you put your money in play. So, if you’re going to put money at risk, make sure the reward is high enough to justify it.
This report was originally published by The Kirk Report on June 2, 2004.
The following six rules were pulled out from a speech he gave:
1. Make all your mistakes early in life: The more tough lessons you learn early on, the fewer (bigger) errors you make later. A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you something.
2. Always make your living doing something you enjoy: Devote your full intensity for success over the long-term.
3. Be intellectually competitive: Do constant research on subjects that make you money. Plow through the data so as to be able to sense a major change coming in the macro situation.
4. Make good decisions even with incomplete information: Investors never have all the data they need before they put their money at risk. Investing is all about decision-making with imperfect information. You will never have all the info you need. What matters is what you do with the information you have. Do your homework and focus on the facts that matter most in any investing situation.
5. Always trust your intuition: Intuition is more than just a hunch — it resembles a hidden supercomputer in the mind that you’re not even aware is there. It can help you do the right thing at the right time if you give it a chance. Over time, your own trading experience will help develop your intuition so that major pitfalls can be avoided.
6. Don’t make small investments: You only have so much time and energy so when you put your money in play. So, if you’re going to put money at risk, make sure the reward is high enough to justify it.
This report was originally published by The Kirk Report on June 2, 2004.
Friday, September 17, 2010
DMX Technologies +20.0% ahead of ADRs listing
DMX Technologies (5CH.SG) +20.0% at $0.420 — just below 5-month high of $0.425 — on hopes investors in US will pay more attention to digital media company as it firms up move to list American Depository Receipts, according to Dow Jones.
ADRs will start trading on OTCQX International from Sept 23, with each receipt representing 40 Singapore shares. If ADR take-up positive, shares likely to head even higher.
Stock down 14.6% since beginning 2010 vs STI +5.9% over same period, despite decent earnings growth in 1H10 (net profit +70.7% on year at US$4.1 million ($5.5 million), healthy balance sheet.
Debts minimal vs US$333.6 million in shareholders’ funds, net cash position of US$121.9 million as at June, which translates to about $0.14/share. Immediate resistance at year-to-date high of $0.455 set in January.
WRITTEN BY THE EDGE
FRIDAY, 17 SEPTEMBER 2010 16:21
ADRs will start trading on OTCQX International from Sept 23, with each receipt representing 40 Singapore shares. If ADR take-up positive, shares likely to head even higher.
Stock down 14.6% since beginning 2010 vs STI +5.9% over same period, despite decent earnings growth in 1H10 (net profit +70.7% on year at US$4.1 million ($5.5 million), healthy balance sheet.
Debts minimal vs US$333.6 million in shareholders’ funds, net cash position of US$121.9 million as at June, which translates to about $0.14/share. Immediate resistance at year-to-date high of $0.455 set in January.
WRITTEN BY THE EDGE
FRIDAY, 17 SEPTEMBER 2010 16:21
Mainboard-listed DMX Technologies Group Limited, a leading
internet network infrastructure and digital media solutions
provider in Asia-Pacific, has completed the necessary steps
for the trading of American Depositary Receipts (ADR) on the
highly visible OTCQX International trading platform.
The OTCQX marketplace in New York City is the premier tier
of the US over-the-counter market. Investor-focused companies
use the quality controlled OTCQX listing platform to offer
investors transparent trading, superior information and easy
access through their regulated US broker-dealers.
Each ADR for DMX Technologies, quoted in US dollars, would
represent 40 ordinary shares listed on the Singapore Stock
Exchange and start trading on OTCQX International from 23
September 2010. In addition, the listing would not dilute
shares for existing shareholders and enable the Group to join
a list of established multi-national companies on OTCQX
International where trading volumes averaged US$1.3 billion
in July 2010.
DMX Technologies to Quote ADR on OTCQX
International
www.dmxtechnologies.com
DMX
internet network infrastructure and digital media solutions
provider in Asia-Pacific, has completed the necessary steps
for the trading of American Depositary Receipts (ADR) on the
highly visible OTCQX International trading platform.
The OTCQX marketplace in New York City is the premier tier
of the US over-the-counter market. Investor-focused companies
use the quality controlled OTCQX listing platform to offer
investors transparent trading, superior information and easy
access through their regulated US broker-dealers.
Each ADR for DMX Technologies, quoted in US dollars, would
represent 40 ordinary shares listed on the Singapore Stock
Exchange and start trading on OTCQX International from 23
September 2010. In addition, the listing would not dilute
shares for existing shareholders and enable the Group to join
a list of established multi-national companies on OTCQX
International where trading volumes averaged US$1.3 billion
in July 2010.
DMX Technologies to Quote ADR on OTCQX
International
www.dmxtechnologies.com
DMX
China's spending on green tech exceedes 10b yuan
BEIJING - The Chinese government's investment in research and development of green technologies has exceeded 10 billion yuan ($1.47 billion) for the 2006-2010 period.
Zhang Laiwu, vice minister of science and technology, made the remark Thursday at a press conference in Beijing, also saying that China had developed key technologies that could cut greenhouse emissions.
China has applied energy-saving technologies to traditional industries including steel, power, building materials, chemicals and agriculture, which have enhanced their competitiveness, he said.
China has also issued supportive policies for new-energy industries. For instance, the pilot program of energy-saving and new-energy vehicles has been implemented in 25 cities, and the government has provided subsidies for the purchase of 5,000 vehicles, he said.
Also, more than 1.6 million LED lights were being used in 21 cities in a pilot program to promote the use of LED lights, which will save more than 164 million kWh of electricity annually, he said.
(Xinhua)
Zhang Laiwu, vice minister of science and technology, made the remark Thursday at a press conference in Beijing, also saying that China had developed key technologies that could cut greenhouse emissions.
China has applied energy-saving technologies to traditional industries including steel, power, building materials, chemicals and agriculture, which have enhanced their competitiveness, he said.
China has also issued supportive policies for new-energy industries. For instance, the pilot program of energy-saving and new-energy vehicles has been implemented in 25 cities, and the government has provided subsidies for the purchase of 5,000 vehicles, he said.
Also, more than 1.6 million LED lights were being used in 21 cities in a pilot program to promote the use of LED lights, which will save more than 164 million kWh of electricity annually, he said.
(Xinhua)
Ford China's August sales up 24%
(Agencies)Ford and its Chinese joint ventures reported sales of 44,047 units in August in China, a 24 percent increase year-on-year,according to data from Ford Motor Co.
From January to August this year, Ford has sold 368,103 vehicles, a 42 percent increase from the same period last year.
Strong demand for Ford's new products in China and India, two of the world's fastest-growing automotive markets, led to sales of 51,972 vehicles in August in the two countries, a 37 percent increase year-on-year.
So far this year, Ford has sold 422,779 vehicles in the two countries combined, a 52 percent increase over the same period last year.
In the next 10 years, Ford expects 70 percent of its growth to come from its Asia Pacific and Africa region.
"We have big plans for India, China and the region," said Joe Hinrichs, president of Ford Asia Pacific and Africa. "China will remain the largest car market in the world for the foreseeable future, and we estimate India will be the third-largest market in the world in the next 10 years."
Ford is building two new plants in China: one in Chongqing with Changan Ford Mazda Automotive, and one in Nanchang with Jiangling Motors Corp (JMC).
The $300 million Nanchang plant is expected to have the capacity to produce up to 300,000 vehicles per year and will produce both Ford- and JMC-branded vehicles. JMC is a strategic partner of Ford in producing commercial vehicles, and 30 percent of the company is owned by Ford.
From January to August this year, Ford has sold 368,103 vehicles, a 42 percent increase from the same period last year.
Strong demand for Ford's new products in China and India, two of the world's fastest-growing automotive markets, led to sales of 51,972 vehicles in August in the two countries, a 37 percent increase year-on-year.
So far this year, Ford has sold 422,779 vehicles in the two countries combined, a 52 percent increase over the same period last year.
In the next 10 years, Ford expects 70 percent of its growth to come from its Asia Pacific and Africa region.
"We have big plans for India, China and the region," said Joe Hinrichs, president of Ford Asia Pacific and Africa. "China will remain the largest car market in the world for the foreseeable future, and we estimate India will be the third-largest market in the world in the next 10 years."
Ford is building two new plants in China: one in Chongqing with Changan Ford Mazda Automotive, and one in Nanchang with Jiangling Motors Corp (JMC).
The $300 million Nanchang plant is expected to have the capacity to produce up to 300,000 vehicles per year and will produce both Ford- and JMC-branded vehicles. JMC is a strategic partner of Ford in producing commercial vehicles, and 30 percent of the company is owned by Ford.
Ford to launch first ever SUV model in Chinese market
CHENGDU - US automaker Ford Motor Co plans to enter China's booming sport utility vehicle (SUV) market, launching its first SUV model in the domestic market during the fourth quarter of this year, a top company executive said.
With the launch, Ford will plug the gap in its product portfolio in China. The SUV model will be imported into the domestic market. The move is of vital importance to Ford, said Nigel Harris, vice-president of Ford China and general manager of Chang'an Ford Sales Company.
The Edge, which will premiere at the Chengdu auto show on Friday, will be the first ever SUV offering from Ford's stable ever since it entered the Chinese market seven years ago.
The mid-sized SUV, which is also one of Ford's four global strategic vehicle models, has won a stable market share in the global SUV market, with 400,000 models sold since it hit the road at the end of 2006.
Tang Jidong, marketing and sales service director of Ford China, said that the company would start presales of the SUV in its Chang'an Ford showrooms from November and officially launch the model in December.
Ford will also consider locally producing the Edge to lower its price and improve competitiveness, provided there is enough market demand, Tang said.
Analysts said Ford's move to bring in its SUV this year indicates its ambition to boost sales in the fastest growing vehicle market. However, it has been lagging its rivals, as the SUV segment in China has grown at the rate of over 40 percent year-on-year during the past five years.
Local production, however, will be a hard road for Ford as it does not have an existing platform in its local ventures to manufacture the model. It will also entail huge investment.
Statistics from China Association of Automobile Manufacturers (CAAM) show that China's SUV sales jumped to 750,000 units last year from 160,000 units in 2004.
In the first half, the SUV sector - the fastest growing vehicle segment in China - reported a sales surge of 133 percent over last year, to 587,000 units, said CAAM.
Moreover, among the 353,000 imported vehicles registered last year, the share of SUVs accounted for 54.8 percent.
China's SUV market is now dominated by Japanese manufacturers. Their products, such as Toyota's Highlander, RAV4, Prado, and Land Cruiser, as well as Honda's CR-V and Nissan's X-TRAIL and Qashqai, are competitively priced.
Europe's biggest automaker Volkswagen launched its locally produced SUV, Tiguan, in March this year, and it soon became the nation's best-selling model in the first half.
With the launch, Ford will plug the gap in its product portfolio in China. The SUV model will be imported into the domestic market. The move is of vital importance to Ford, said Nigel Harris, vice-president of Ford China and general manager of Chang'an Ford Sales Company.
The Edge, which will premiere at the Chengdu auto show on Friday, will be the first ever SUV offering from Ford's stable ever since it entered the Chinese market seven years ago.
The mid-sized SUV, which is also one of Ford's four global strategic vehicle models, has won a stable market share in the global SUV market, with 400,000 models sold since it hit the road at the end of 2006.
Tang Jidong, marketing and sales service director of Ford China, said that the company would start presales of the SUV in its Chang'an Ford showrooms from November and officially launch the model in December.
Ford will also consider locally producing the Edge to lower its price and improve competitiveness, provided there is enough market demand, Tang said.
Analysts said Ford's move to bring in its SUV this year indicates its ambition to boost sales in the fastest growing vehicle market. However, it has been lagging its rivals, as the SUV segment in China has grown at the rate of over 40 percent year-on-year during the past five years.
Local production, however, will be a hard road for Ford as it does not have an existing platform in its local ventures to manufacture the model. It will also entail huge investment.
Statistics from China Association of Automobile Manufacturers (CAAM) show that China's SUV sales jumped to 750,000 units last year from 160,000 units in 2004.
In the first half, the SUV sector - the fastest growing vehicle segment in China - reported a sales surge of 133 percent over last year, to 587,000 units, said CAAM.
Moreover, among the 353,000 imported vehicles registered last year, the share of SUVs accounted for 54.8 percent.
China's SUV market is now dominated by Japanese manufacturers. Their products, such as Toyota's Highlander, RAV4, Prado, and Land Cruiser, as well as Honda's CR-V and Nissan's X-TRAIL and Qashqai, are competitively priced.
Europe's biggest automaker Volkswagen launched its locally produced SUV, Tiguan, in March this year, and it soon became the nation's best-selling model in the first half.
Thursday, September 16, 2010
BT: Trek has a new patent and the backing of a 'big brother'
Published September 14, 2010
Trek has a new patent and the backing of a 'big brother'
By VEN SREENIVASAN
EXECUTION is sometimes more important than invention. And few companies would be more aware of this than technology specialist Trek 2000 International.
Almost a decade ago, the little- known company with just 70 staff invented the ThumbDrive - the device that effectively ended the floppy disk era.
After designing the product in 1999, Trek filed patents for intellectual property (IP) protection in over 50 countries and territories worldwide. It then bravely embarked on plans to produce and distribute the product worldwide in 2000.
But what this ambitious little 'mighty mouse' did not realise was that the world can be a hostile place for small companies, no matter how innovative they are. No sooner had it embarked on its mission to launch the ThumbDrive than it found itself face-to-face with some global 'big boys' of the industry, who challenged its IP rights. Within a few months, ThumbDrive-like products were flooding the market. It was, in the crudest terms, a case of 'if you don't like it, sue me'.
After spending several million dollars trying - in vain - to protect and enforce its IP rights, Trek came to the stark realisation that it was fighting a losing battle. It was not just a lost cause; it was also a case of lost opportunities.
The bruising experience made Trek realise that filing for IP protection alone is not enough when there are 'big boys' - or big bullies - out there who can either swallow you up or squeeze you out of the game. Even a mighty mouse can be trampled by huge elephants in the room.
Fast-forward 10 years, and Trek appears to have learned some crucial lessons - the biggest of all being that a small company with valuable technology needs to be 'protected' by a big partner.
This lesson is particularly timely as Trek goes to market with another potential world-beating product: the FluCard.
This wafer-thin SD-type card, barely bigger than a large toenail, essentially enables smart phones, smart cameras, personal computers, printers and any other electronic device with a smart card, to communicate with one another. In short, it's a micro processor that enables smart devices to 'talk' to one another, transfer data and share information - wirelessly and without any physical connection. The FluCard can effectively substitute SD cards in smart devices.
Trek has already rushed through the requisite patent protection papers for the FluCard, just as it did for its ThumbDrive. The product is due to be launched in stages during the coming months.
But this time, the company has a 'big brother' to look after its interests - in case some big bullies come back for another bite. The partner is Japan's Toshiba Corporation, which now owns 17.8 per cent of Trek.
Trek plans to license the FluCard to Toshiba, which will manufacture it through its OEM networks worldwide. Toshiba will also police the IP protection. Meanwhile, licensing revenue and royalties will accrue to the Singapore company. Trek will also collect a portion of the revenue from the cards, which will be priced at US$50 apiece initially, though prices are likely to slide to around US$30.
The partnership with Toshiba is critical as the Japanese giant is a seasoned hand in the SD card market, controlling 45 per cent of the 1.3 billion cards produced each year. It could do the same with the FluCard.
Toshiba - and Trek - are initially chasing the smart digital camera segment. Some 130 million of these cameras are made and sold worldwide every year. And at least a third are expected to come with the FluCard within three years. If this happens, industry insiders estimate a potential revenue of US$200 million a year for Trek by 2013. And at least 20 per cent of this could go straight to its bottom line.
Not bad for a small company which has made barely US$6 million.
As DMG & Partners Research - the only investment house to cover the company - noted last week: 'Once the FluCard starts gaining recognition, the stock will take a life of its own.'
DMG has an internal target of 55 cents for the counter. But judging by the stock's performance last week, the market may already have woken up to Trek's potential.
Of course, all this also makes Trek an attractive investment for some of the bigger boys, if not an outright takeover target.
Trek, ranked Best Managed Small Company in Singapore by AsiaMoney, has learned an important lesson: technology gets you only so far. You also need a 'big brother' to be the custodian of that technology in the global marketplace.
Trek has a new patent and the backing of a 'big brother'
By VEN SREENIVASAN
EXECUTION is sometimes more important than invention. And few companies would be more aware of this than technology specialist Trek 2000 International.
Almost a decade ago, the little- known company with just 70 staff invented the ThumbDrive - the device that effectively ended the floppy disk era.
After designing the product in 1999, Trek filed patents for intellectual property (IP) protection in over 50 countries and territories worldwide. It then bravely embarked on plans to produce and distribute the product worldwide in 2000.
But what this ambitious little 'mighty mouse' did not realise was that the world can be a hostile place for small companies, no matter how innovative they are. No sooner had it embarked on its mission to launch the ThumbDrive than it found itself face-to-face with some global 'big boys' of the industry, who challenged its IP rights. Within a few months, ThumbDrive-like products were flooding the market. It was, in the crudest terms, a case of 'if you don't like it, sue me'.
After spending several million dollars trying - in vain - to protect and enforce its IP rights, Trek came to the stark realisation that it was fighting a losing battle. It was not just a lost cause; it was also a case of lost opportunities.
The bruising experience made Trek realise that filing for IP protection alone is not enough when there are 'big boys' - or big bullies - out there who can either swallow you up or squeeze you out of the game. Even a mighty mouse can be trampled by huge elephants in the room.
Fast-forward 10 years, and Trek appears to have learned some crucial lessons - the biggest of all being that a small company with valuable technology needs to be 'protected' by a big partner.
This lesson is particularly timely as Trek goes to market with another potential world-beating product: the FluCard.
This wafer-thin SD-type card, barely bigger than a large toenail, essentially enables smart phones, smart cameras, personal computers, printers and any other electronic device with a smart card, to communicate with one another. In short, it's a micro processor that enables smart devices to 'talk' to one another, transfer data and share information - wirelessly and without any physical connection. The FluCard can effectively substitute SD cards in smart devices.
Trek has already rushed through the requisite patent protection papers for the FluCard, just as it did for its ThumbDrive. The product is due to be launched in stages during the coming months.
But this time, the company has a 'big brother' to look after its interests - in case some big bullies come back for another bite. The partner is Japan's Toshiba Corporation, which now owns 17.8 per cent of Trek.
Trek plans to license the FluCard to Toshiba, which will manufacture it through its OEM networks worldwide. Toshiba will also police the IP protection. Meanwhile, licensing revenue and royalties will accrue to the Singapore company. Trek will also collect a portion of the revenue from the cards, which will be priced at US$50 apiece initially, though prices are likely to slide to around US$30.
The partnership with Toshiba is critical as the Japanese giant is a seasoned hand in the SD card market, controlling 45 per cent of the 1.3 billion cards produced each year. It could do the same with the FluCard.
Toshiba - and Trek - are initially chasing the smart digital camera segment. Some 130 million of these cameras are made and sold worldwide every year. And at least a third are expected to come with the FluCard within three years. If this happens, industry insiders estimate a potential revenue of US$200 million a year for Trek by 2013. And at least 20 per cent of this could go straight to its bottom line.
Not bad for a small company which has made barely US$6 million.
As DMG & Partners Research - the only investment house to cover the company - noted last week: 'Once the FluCard starts gaining recognition, the stock will take a life of its own.'
DMG has an internal target of 55 cents for the counter. But judging by the stock's performance last week, the market may already have woken up to Trek's potential.
Of course, all this also makes Trek an attractive investment for some of the bigger boys, if not an outright takeover target.
Trek, ranked Best Managed Small Company in Singapore by AsiaMoney, has learned an important lesson: technology gets you only so far. You also need a 'big brother' to be the custodian of that technology in the global marketplace.
Wednesday, September 15, 2010
China's old-for-new car scheme gaining momentum on higher discounts
BEIJING, Sept. 14 (Xinhua) -- China's old-for-new car scheme is gaining momentum after the authorities raised the subsidy levels at the start of this year, the Ministry of Commerce (MOC) announced Tuesday .
In the first eight months, a total of 210,000 automobiles were sold under the program, 690 percent up from last year on a monthly basis, the MOC said in a statement on its official website.
The figures have fueled speculation that the trade-in scheme could be extended and the subsidies raised as the government seeks to improve energy efficiency.
Experts attributed the surge to the government's move in January to raise the original subsidy levels ranging from 3,000 yuan (444.7 U.S. dollars) to 6,000 yuan to the current band of 5,000 to 18,000 yuan.
The added subsidy had proved effective as it boosted consumer spending of 25.3 billion yuan on new cars by granting subsidies of 2.95 billion yuan from January to August, said the statement.
In August alone, the government had issued a total of 340 million yuan in subsidies to participants of the program who traded in their old cars and bought 24,000 new ones, up 82 percent from July, said the MOC.
The scheme was rolled out by the MOC and the Ministry of Finance last June as part of the government's efforts to stimulate domestic consumption amid the global downturn and to eliminate energy-wasting vehicles.
However, the program initially got a lukewarm reception from consumers who could generally sell their old cars for more than the value of the government trade-in program, said Luo Lei, deputy secretary general of the China Automobile Dealers Association (CADA).
In the six months after the scheme was initiated, only 12,000 cars were sold under the trade-in program with 100 million yuan in subsidies generating new spending of 1.8 billion yuan.
Even it gained pace, the trade-in scheme fell far short of reaching the pre-set goal of eliminating a million old cars with subsidies of 5 billion yuan, said Luo.
In June, the authorities extended the replacement program from May 31 to Dec. 31, in a move to accelerate the elimination of high-emission and fuel-guzzling vehicles and stimulate domestic consumption.
As the trade-in program becomes more effective, experts expect the authorities to further extend the scheme or introduce similar ones when it expires at the end of this year.
Luo said China still needed subsidy programs, which had contributed to the drive by the government to boost rural and urban consumption to push up overall economic growth.
In recent years, the trade-in offers, along with tax rebates for rural buyers of domestic appliances and tax breaks on fuel-efficient cars, have helped sustain retail sales.
China's retail sales of consumer goods in the first eight months this year hit 9.75 trillion yuan, up 18.2 percent over the same period last year, the National Bureau of Statistics (NBS) said Saturday.
Luo said China also needed such programs to raise the energy efficiency of its economy as it was under pressure to reach its target of improving energy efficiency by 20 percent between 2005 and 2010.
In the first half this year, China's consumption of energy relative to economic output rose by 0.09 percent from the same period last year after it had reduced energy use by 15.6 percent relative to economic output from 2005 to 2009.
The subsidy levels might be raised further as they were still lower than those in the United States or the European Union where consumers could get a discount of about 3,800 U.S. dollars if they traded in their old cars, Luo said.
In the first eight months, a total of 210,000 automobiles were sold under the program, 690 percent up from last year on a monthly basis, the MOC said in a statement on its official website.
The figures have fueled speculation that the trade-in scheme could be extended and the subsidies raised as the government seeks to improve energy efficiency.
Experts attributed the surge to the government's move in January to raise the original subsidy levels ranging from 3,000 yuan (444.7 U.S. dollars) to 6,000 yuan to the current band of 5,000 to 18,000 yuan.
The added subsidy had proved effective as it boosted consumer spending of 25.3 billion yuan on new cars by granting subsidies of 2.95 billion yuan from January to August, said the statement.
In August alone, the government had issued a total of 340 million yuan in subsidies to participants of the program who traded in their old cars and bought 24,000 new ones, up 82 percent from July, said the MOC.
The scheme was rolled out by the MOC and the Ministry of Finance last June as part of the government's efforts to stimulate domestic consumption amid the global downturn and to eliminate energy-wasting vehicles.
However, the program initially got a lukewarm reception from consumers who could generally sell their old cars for more than the value of the government trade-in program, said Luo Lei, deputy secretary general of the China Automobile Dealers Association (CADA).
In the six months after the scheme was initiated, only 12,000 cars were sold under the trade-in program with 100 million yuan in subsidies generating new spending of 1.8 billion yuan.
Even it gained pace, the trade-in scheme fell far short of reaching the pre-set goal of eliminating a million old cars with subsidies of 5 billion yuan, said Luo.
In June, the authorities extended the replacement program from May 31 to Dec. 31, in a move to accelerate the elimination of high-emission and fuel-guzzling vehicles and stimulate domestic consumption.
As the trade-in program becomes more effective, experts expect the authorities to further extend the scheme or introduce similar ones when it expires at the end of this year.
Luo said China still needed subsidy programs, which had contributed to the drive by the government to boost rural and urban consumption to push up overall economic growth.
In recent years, the trade-in offers, along with tax rebates for rural buyers of domestic appliances and tax breaks on fuel-efficient cars, have helped sustain retail sales.
China's retail sales of consumer goods in the first eight months this year hit 9.75 trillion yuan, up 18.2 percent over the same period last year, the National Bureau of Statistics (NBS) said Saturday.
Luo said China also needed such programs to raise the energy efficiency of its economy as it was under pressure to reach its target of improving energy efficiency by 20 percent between 2005 and 2010.
In the first half this year, China's consumption of energy relative to economic output rose by 0.09 percent from the same period last year after it had reduced energy use by 15.6 percent relative to economic output from 2005 to 2009.
The subsidy levels might be raised further as they were still lower than those in the United States or the European Union where consumers could get a discount of about 3,800 U.S. dollars if they traded in their old cars, Luo said.
Tuesday, September 14, 2010
TREK2000'S New World-First - FluCard - Highlighted In Japanese Daily
Lately, we note the announcement of memory cards with built-in wireless communication function that allows digital cameras to connect to the Web easily.
On 22 June, Toshiba, partnering a Singapore electronic device company, Trek 2000 International, announced the development of a SD card with built-in wireless LAN function, and it is working toward standardizing the specification among digital device manufacturers.
The product will be shipped next spring. Once the new “SD Card” is inserted into the slot of the digital camera, it can transmit pictures to computers as well as digital photo frames. With the photo sharing service offered by the portal, it is easy to share photos with family members or friends.
“The card is usable by the majority of existing digital cameras,” said Mr Ryoichi Sugahara, person in charge of Japan office of Trek 2000.
If the digital devices comply to the specifications decided by Toshiba, the usability is enhanced.
For example, compatible digital cameras are able to exchange photos, and output to printers and projectors becomes possible. In February this year, Sony shipped a memory stick that is capable of 560 Mbit/sec transfer speed within 3cm.
The product caters to high volume of data transfer. The product uses a proprietary technology called “transfer jet”.
Toshiba has raised the eyebrows of SD card players.
Toshiba has taken action to define the new specifications for SD application, without involving SD Card specification partners Panasonic and Sandisk.
Toshiba explained that it is teaming up with Trek whose card is capable of transferring pictures. Beside digital camera manufacturers, Toshiba is inviting the participation of other memory manufacturers.
On the other hand, Panasonic and Sandisk said they have no plan to join the movement of Toshiba. It appeared that the three companies did not reach an agreement regarding the SD Card Consortium. Japan has a substantial share of the digital camera market.
However, the competition in the area of pixels and miniaturization has reached a limit. To counter the competition from Korean and other overseas manufacturers, it has become necessary for the Japanese manufacturers to propose new applications using wireless technologies, such as that of Trek2000.
-www.nextinsight.net
On 22 June, Toshiba, partnering a Singapore electronic device company, Trek 2000 International, announced the development of a SD card with built-in wireless LAN function, and it is working toward standardizing the specification among digital device manufacturers.
The product will be shipped next spring. Once the new “SD Card” is inserted into the slot of the digital camera, it can transmit pictures to computers as well as digital photo frames. With the photo sharing service offered by the portal, it is easy to share photos with family members or friends.
“The card is usable by the majority of existing digital cameras,” said Mr Ryoichi Sugahara, person in charge of Japan office of Trek 2000.
If the digital devices comply to the specifications decided by Toshiba, the usability is enhanced.
For example, compatible digital cameras are able to exchange photos, and output to printers and projectors becomes possible. In February this year, Sony shipped a memory stick that is capable of 560 Mbit/sec transfer speed within 3cm.
The product caters to high volume of data transfer. The product uses a proprietary technology called “transfer jet”.
Toshiba has raised the eyebrows of SD card players.
Toshiba has taken action to define the new specifications for SD application, without involving SD Card specification partners Panasonic and Sandisk.
Toshiba explained that it is teaming up with Trek whose card is capable of transferring pictures. Beside digital camera manufacturers, Toshiba is inviting the participation of other memory manufacturers.
On the other hand, Panasonic and Sandisk said they have no plan to join the movement of Toshiba. It appeared that the three companies did not reach an agreement regarding the SD Card Consortium. Japan has a substantial share of the digital camera market.
However, the competition in the area of pixels and miniaturization has reached a limit. To counter the competition from Korean and other overseas manufacturers, it has become necessary for the Japanese manufacturers to propose new applications using wireless technologies, such as that of Trek2000.
-www.nextinsight.net
TREK 2000 is one of a rare few Singapore companies that have come up with creations that have enjoyed worldwide success and in the process created a new breed of products.
Its ThumbDrive, introduced to the world about 10 years ago, led to the demise of the floppy drive.
Now it has the FluCard, potentially a world-class act. Asked how the idea for the FluCard came about, Mr Henn Tan, chairman of Trek 2000, recalled being on holiday in Chengdu with his family in 2005.
He told NextInsight: “On the third day, my daughter misplaced our camera. I was upset. It wasn’t the camera but the photos which I missed as our holiday place was absolutely beautiful. I was thinking: ‘I am supposed to be a specialist in external storage media. How could I have gotten the photos to be transmitted immediately?”
Recently, at Trek 2000’s office in Loyang Way, we watched (open-mouthed) a demonstration of how FluCard enables photos taken of us by a Trek executive to be transmitted wirelessly from a camera to another within 10 m – and from a camera to our iPhones.
Most amazingly was how, with the flick of one’s wrist, a camera equipped with a FluCard can send a photo to another camera.
Yes, the flick of one’s wrist activates the transmission! It's the hi-tech version of an angel wielding a magic wand to execute a magical event.
Such wizardry is available to most existing digital cameras which have a SD (Secure Digital) card holder as the cameras will work fine with the FluCard inserted – just get rid of the SD card and replace it with the FluCard. Masses of consumers can adopt the invention right away.
Given this vast market, Trek has embarked on selling the FluCard directly to consumers via the electronic stores such as Challenger and Gain City in Singapore and via its website (www.trek2000.com.sg).
Trek has a strategy to ramp up sales globally by tieing up with a consortium of Japanese camera makers, including Toshiba Corporation, which has 17.84% stake in Trek, to launch cameras which incorporate the FluCard.
Japanese camera makers command the largest market share in the world, selling millions of units a year. Their first FluCard-equipped cameras are scheduled to be launched in January next year.
More on the FluCard’s specs
The FluCard, which has storage capacities ranging from 8GB to 64GB, is Wi-Fi enabled and is more than just for capturing and sharing transmitting photos from a camera to another.
It can also be used to send photos to digital photo-frames, television, computers or laptops and many other equipment which have SDIOs or SD Card host slots through which the FluCard can be inserted.
And the card works fine also with video cameras for the sharing of video clips.
The FluCard transmits photos and video clips to the nearest recipient. It can be programmed to send to multi-users.
With the purchase of a FluCard, which costs US$150 for a pair with 8GB capacity each at Trek’s website, each user is given 2GB of space on a portal created by Trek to store their photos.
So after taking photos, users can upload their photos to their accounts in the portal which are accessible via their username and password.
The upload is done in Wi-Fi friendly locations such as shopping malls or via an Internet connection through their smartphones.
Mr Tan is confident of a rapid spread of the use of the FluCard, and its falling costs over the years, which would lead to the demise of the SD card.
“We are all fired up over the FluCard,” said Gucharan Singh, Trek’s CFO.
The FluCard is expected to take Trek’s profit level to a new dimension. In an Aug 15 report, DMG & Partners analyst James Lim forecasted the FluCard could account for 92% of Trek’s earnings in FY2011.
His forecast for Trek’s total net earnings is $14.9 million in FY11 versus $4.1 million this year. At the recently traded 47 cents, the stock was on a PE of 6.8X next year’s forecast earnings. DMG's internal target is 55 cents for the stock.
After its core ThumbDrive business boosted the company’s half-year financial performance (profit after tax rose 138.1% to US$1.3 million), Mr Tan, said, “We are extremely delighted to record strong earnings for the first-half of 2010 and are confident that the company will see even greater growth when our FluCard™ is introduced into markets from the fourth quarter of this year.”
-www.nextinsight.net
Saturday, September 11, 2010
Picking Up Pace To Be World's No.1
IT HAS been six months since China Sunsine listed on the mainboard of the Singapore Exchange in July ’07.
The stock has not been sizzling (30 cents recently versus IPO price of 39 cents) but the business has achieved milestone after milestone during that period.
One of these was in December last year when Sunsine (not to be confused with Sunshine Holdings, a pure property stock) clinched a new customer, Continental AG of Germany, the world’s 4th largest tyre manufacturer.
Prior to that, Continental had conducted an accreditation process of Sunsine before placing trial orders for chemicals it needed to produce rubber tyres and rubber products.
The trial orders for "rubber accelerators" are for use by Continental’s Malaysian and South African plants. After trying out the product, it is expected to placed sales orders next year.
The potential demand for rubber accelerators by the two Continental plants is 1,100 tonnes. This is based on estimates that tyre manufacturing requires 1.7 tonnes of rubber accelerators for every 100 tonnes of rubber used.
Sunsine currently has a production capacity of 39,000 tonnes, which is fully utilised.
The deal with Continental was especially significant because Continental completes the list of the world’s top 10 tyre manufacturers who are Sunsine’s clients.
The other 9 are listed below, and they accounted for 30.1 % of Sunsine’s sales in the first half of 2007.
Higher orders
Even as Continental was pursuing its accreditation process, two of Sunsine’s existing clients were placing maiden orders for their plants outside of the Asia Pacific region.
In November ‘07, Sunsine announced that it would be expanding its service coverage to Pirelli Tyres (world No. 5 tyre manufacturer) to include its Brazil and Turkey operations. These are trial orders.
In the same month, China Sunsine also announced that it would be supplying Michelin (world No. 2 tyre manufacturer) with one additional high-volume product, the rubber accelerator CBS.
Global tyre manufacturers aside, Sunsine counts eight of China’s top 10 tyre manufacturers among its clients too. In all, Sunsine has over 400 clients in more than 30 nations across six continents.
To cater to growing demand for its products, China Sunsine - which was already operating at full capacity - expanded its capacity from 32,000 tonnes to 39,000 tonnes in Q4 of last year.
Capacity will hit 49,000 tonnes by the middle of this year once the integrated workshop is online. Coupled with the introduction of 2 new products - ie, insoluble sulphur and anti-oxidant TMQ - Sunsine’s total production capacity will reach 62,000 tonnes by the end of this year.
The funds for expansion will come from the S$46.8 million raised from the sale of new shares during its IPO.
With a bigger production capacity, Sunsine could overtake LANXESS of Germany which currently produces 45,000 tonnes a year to become
the largest producer of rubber accelerators in the world.
Demand from China is set to soar with the jump in investments in tyre-manufacturing facilities by global players. In 2005 alone:
* Michelin announced investments to make its Shanghai factory
the biggest tyre plant in the world;
* Bridgestone announced plans to be the biggest manufacturer in China;
* Bridgestone will open new plants in Wuxi, Shenyang, and Huizhou and expandTianjin plant;
* Goodyear moved its Asiapac HQ to Shanghai and doubled Dalian production from 2 million to 5.25 million units
And as its production capacity expands, Sunsine will target markets beyond Asia Pacific where it has not entered aggressively into only because of capacity constraints.
mproving profit margins
The past six months of being a listed company have provided some lessons to Sunsine on meeting the expectations of public shareholders.
Traditionally, the company has placed the highest priority on growing its sales. But following the IPO, shareholders and analysts gave feedback to the management that the market placed great emphasis on profit margins and profits too.
And they were concerned with what appeared to be shrinking margins.
In Q3 of 2007, for example, the gross margin had declined to 18.7 % from 21.9 % in the first half of 2007.
Sunsine attributed the decline partly to a fall in government export tax rebates from 13% to 5% from July 07 onwards (industry-wide adjustment as a result of government policy).
In addition, Sunsine experienced a shortage of internally-produced MBT, a rubber accelerator also commonly used as an intermediary product for the production of other rubber accelerators.
The shortage was caused by sales volume increasing, year-on-year, in the past two quarters by an average of 35% each in Q2 and Q3.
As a result of the shortage, Sunsine had to buy MBT from external sources at a higher price.
To address investors’ expectations, Sunsine negotiated with its overseas clients to increase average selling prices by 6% to compensate for the decrease in the export tax rebate.
Otherwise, the margin decline in 3Q would have been worse as about half of Sunsine's sales were from exports.
Then in December 07, Sunsine increased its MBT production by 7,000 tonnes per annum to reduce its purchase of MBT from external sources.
The in-house MBT could cost Rmb2,000/tonne less than external MBT. As a result, accelerator gross margins in FY08-09 could rise by 1-2 percentage points, by CIMB-GK estimates.
Going forward, Sunsine has indicated that it will continue to pursue global market share of accelerators, introduce new products to existing clients, and look for potential acquisitions that may have synergistic value.
-NextInsight 11 January 2008
The stock has not been sizzling (30 cents recently versus IPO price of 39 cents) but the business has achieved milestone after milestone during that period.
One of these was in December last year when Sunsine (not to be confused with Sunshine Holdings, a pure property stock) clinched a new customer, Continental AG of Germany, the world’s 4th largest tyre manufacturer.
Prior to that, Continental had conducted an accreditation process of Sunsine before placing trial orders for chemicals it needed to produce rubber tyres and rubber products.
The trial orders for "rubber accelerators" are for use by Continental’s Malaysian and South African plants. After trying out the product, it is expected to placed sales orders next year.
The potential demand for rubber accelerators by the two Continental plants is 1,100 tonnes. This is based on estimates that tyre manufacturing requires 1.7 tonnes of rubber accelerators for every 100 tonnes of rubber used.
Sunsine currently has a production capacity of 39,000 tonnes, which is fully utilised.
The deal with Continental was especially significant because Continental completes the list of the world’s top 10 tyre manufacturers who are Sunsine’s clients.
The other 9 are listed below, and they accounted for 30.1 % of Sunsine’s sales in the first half of 2007.
Higher orders
Even as Continental was pursuing its accreditation process, two of Sunsine’s existing clients were placing maiden orders for their plants outside of the Asia Pacific region.
In November ‘07, Sunsine announced that it would be expanding its service coverage to Pirelli Tyres (world No. 5 tyre manufacturer) to include its Brazil and Turkey operations. These are trial orders.
In the same month, China Sunsine also announced that it would be supplying Michelin (world No. 2 tyre manufacturer) with one additional high-volume product, the rubber accelerator CBS.
Global tyre manufacturers aside, Sunsine counts eight of China’s top 10 tyre manufacturers among its clients too. In all, Sunsine has over 400 clients in more than 30 nations across six continents.
To cater to growing demand for its products, China Sunsine - which was already operating at full capacity - expanded its capacity from 32,000 tonnes to 39,000 tonnes in Q4 of last year.
Capacity will hit 49,000 tonnes by the middle of this year once the integrated workshop is online. Coupled with the introduction of 2 new products - ie, insoluble sulphur and anti-oxidant TMQ - Sunsine’s total production capacity will reach 62,000 tonnes by the end of this year.
The funds for expansion will come from the S$46.8 million raised from the sale of new shares during its IPO.
With a bigger production capacity, Sunsine could overtake LANXESS of Germany which currently produces 45,000 tonnes a year to become
the largest producer of rubber accelerators in the world.
Demand from China is set to soar with the jump in investments in tyre-manufacturing facilities by global players. In 2005 alone:
* Michelin announced investments to make its Shanghai factory
the biggest tyre plant in the world;
* Bridgestone announced plans to be the biggest manufacturer in China;
* Bridgestone will open new plants in Wuxi, Shenyang, and Huizhou and expandTianjin plant;
* Goodyear moved its Asiapac HQ to Shanghai and doubled Dalian production from 2 million to 5.25 million units
And as its production capacity expands, Sunsine will target markets beyond Asia Pacific where it has not entered aggressively into only because of capacity constraints.
mproving profit margins
The past six months of being a listed company have provided some lessons to Sunsine on meeting the expectations of public shareholders.
Traditionally, the company has placed the highest priority on growing its sales. But following the IPO, shareholders and analysts gave feedback to the management that the market placed great emphasis on profit margins and profits too.
And they were concerned with what appeared to be shrinking margins.
In Q3 of 2007, for example, the gross margin had declined to 18.7 % from 21.9 % in the first half of 2007.
Sunsine attributed the decline partly to a fall in government export tax rebates from 13% to 5% from July 07 onwards (industry-wide adjustment as a result of government policy).
In addition, Sunsine experienced a shortage of internally-produced MBT, a rubber accelerator also commonly used as an intermediary product for the production of other rubber accelerators.
The shortage was caused by sales volume increasing, year-on-year, in the past two quarters by an average of 35% each in Q2 and Q3.
As a result of the shortage, Sunsine had to buy MBT from external sources at a higher price.
To address investors’ expectations, Sunsine negotiated with its overseas clients to increase average selling prices by 6% to compensate for the decrease in the export tax rebate.
Otherwise, the margin decline in 3Q would have been worse as about half of Sunsine's sales were from exports.
Then in December 07, Sunsine increased its MBT production by 7,000 tonnes per annum to reduce its purchase of MBT from external sources.
The in-house MBT could cost Rmb2,000/tonne less than external MBT. As a result, accelerator gross margins in FY08-09 could rise by 1-2 percentage points, by CIMB-GK estimates.
Going forward, Sunsine has indicated that it will continue to pursue global market share of accelerators, introduce new products to existing clients, and look for potential acquisitions that may have synergistic value.
-NextInsight 11 January 2008
China Sunsine – A Giant Lost Amongst The Chaos?
China Sunsine Chemical Holdings (CSCH), probably one of the largest rubber accelerator producers in both China and the world, garnered 8% of the global market share and 19% of the China market according to FY07 production. It manufactures a wide range of accelerators which are essentials to shorten the processing of raw rubber to cured rubber from hours to minutes. Cured rubber can then be made into tyres and other rubber related products. CSCH debuted on Mainboard on 5 July 2007 at $0.39 per share.
Its annual capacity of accelerators will be boosted to 50k tonnes by end of 2008, doubling its FY04’s annual capacity of 20.5k tonnes. With rising affluence of the Chinese, CSCH expects to ride on the growth of car population in China as car ownership per 100 people is only 5 compared to 75 cars per 100 Americans.
Results skewed by Beijing Olympics
For the 3 months ended 30 September 2008, revenue grew 67% y-o-y with earnings surging 406%. CSCH attributed this phenomenal growth in earnings to a big jump in average selling price of 82% from Rmb19,982 to Rmb36,274 even though sales volume fell 8%. The rise in price was due to the Beijing Olympics, which impacted some competitors’ production and resulted in CSCH’s products being in hot demand. The sales volume decreased because of affected raw materials supply arising from the various transportation restrictions imposed during the Olympics period. For the 9 months ended 30 September 2008, revenue grew 50% y-o-y with earnings soaring by 85%.
Total assets stood at Rmb672m with cash and cash equivalents amounting to Rmb181m. This cash alone was more than its total liabilities of Rmb133m which included short-term debt of Rmb41m. Of this short-term debt, Rmb37m came from an interest-free loan from a director. In its 3Q08 report, its finance costs for the 9 months was only a negligible Rmb0.1m.
As with all S-chips, CSCH’s share price has been halved since the onslaught of the financial crisis. Closing price as at 15 November 2008 was $0.195 (a 50% discount to its IPO price of $0.39), with 490.9m shares outstanding. Market capitalization was equal to $95.73m, equivalent to Rmb430m. The market capitalization was 0.8x its net assets (total assets minus total liabilities) of Rmb539.2m. It is currently trading at a historical PE ratio of 5.6x and PB ratio of 0.8x.
Earnings have been rising from FY04 till FY07. Though the outlook for 4Q08 is not rosy, company expects its 4Q08 revenue to return to normalcy, with lower sales volume and average selling prices compared to those of 3Q08.
Confident of profitability despite downturn
A large part of CSCH’s revenue depends on the tyre industry which has been mired by the global economic slowdown. With outlook still uncertain, CSCH is hopeful that the potential growth in markets like Brazil, China, India and Russia may offer some buffer.
With its strong financial position, unrivalled production capacity and diverse customer base numbering 600 which include all the top 10 global tyres manufacturers, CSCH remains confident of its profitability even in such trying times. Chairman Xu Cheng Qiu, a veteran with more than 30 years in the industry, believes “In a down cycle, customers are more likely to stick with you if your pricing is reasonable and you continue to provide stable and reliable supply.”
20 NOVEMBER 2008
http://www.sharesinv.com
Its annual capacity of accelerators will be boosted to 50k tonnes by end of 2008, doubling its FY04’s annual capacity of 20.5k tonnes. With rising affluence of the Chinese, CSCH expects to ride on the growth of car population in China as car ownership per 100 people is only 5 compared to 75 cars per 100 Americans.
Results skewed by Beijing Olympics
For the 3 months ended 30 September 2008, revenue grew 67% y-o-y with earnings surging 406%. CSCH attributed this phenomenal growth in earnings to a big jump in average selling price of 82% from Rmb19,982 to Rmb36,274 even though sales volume fell 8%. The rise in price was due to the Beijing Olympics, which impacted some competitors’ production and resulted in CSCH’s products being in hot demand. The sales volume decreased because of affected raw materials supply arising from the various transportation restrictions imposed during the Olympics period. For the 9 months ended 30 September 2008, revenue grew 50% y-o-y with earnings soaring by 85%.
Total assets stood at Rmb672m with cash and cash equivalents amounting to Rmb181m. This cash alone was more than its total liabilities of Rmb133m which included short-term debt of Rmb41m. Of this short-term debt, Rmb37m came from an interest-free loan from a director. In its 3Q08 report, its finance costs for the 9 months was only a negligible Rmb0.1m.
As with all S-chips, CSCH’s share price has been halved since the onslaught of the financial crisis. Closing price as at 15 November 2008 was $0.195 (a 50% discount to its IPO price of $0.39), with 490.9m shares outstanding. Market capitalization was equal to $95.73m, equivalent to Rmb430m. The market capitalization was 0.8x its net assets (total assets minus total liabilities) of Rmb539.2m. It is currently trading at a historical PE ratio of 5.6x and PB ratio of 0.8x.
Earnings have been rising from FY04 till FY07. Though the outlook for 4Q08 is not rosy, company expects its 4Q08 revenue to return to normalcy, with lower sales volume and average selling prices compared to those of 3Q08.
Confident of profitability despite downturn
A large part of CSCH’s revenue depends on the tyre industry which has been mired by the global economic slowdown. With outlook still uncertain, CSCH is hopeful that the potential growth in markets like Brazil, China, India and Russia may offer some buffer.
With its strong financial position, unrivalled production capacity and diverse customer base numbering 600 which include all the top 10 global tyres manufacturers, CSCH remains confident of its profitability even in such trying times. Chairman Xu Cheng Qiu, a veteran with more than 30 years in the industry, believes “In a down cycle, customers are more likely to stick with you if your pricing is reasonable and you continue to provide stable and reliable supply.”
20 NOVEMBER 2008
http://www.sharesinv.com
China Sunsine Revs Up
24 JULY 2009(http://www.sharesinv.com)-Spurred by the Automotive Revitalisation plan, Chinese auto sales have chalked up an impressive 36.5% growth y-o-y in June, hitting 1.14m vehicles. For 1Q09, China’s auto industry sold a total of 2.67m units outpacing that of America. Given the robust Chinese growth and faltering American market, experts and analysts expect vehicle sales in the Middle Kingdom to exceed the US in 2009.
In a year where good news comes rarely for car manufacturers, this data brought much-needed cheer to companies related to the automotive industry. On the Singapore Exchange, corporations such as China Kunda and China Sunsine Chemical Holdings (China Sunsine) are the beneficiaries of the upswing.
Listed on the Singapore Exchange on 5 July 2007 at $0.39 apiece or 14.4x FY06 earnings, China Sunsine offers a once-in-a-lifetime opportunity to embrace the Chinese’s growing love affair with automobiles.
The Chinese-owned, Singapore-listed company is engaged in the production of rubber chemicals such as rubber accelerators, anti-oxidant and insoluble sulphur. These rubber chemicals are essential additives in the curing process during the production of rubber products.
Margins Fell But Fundamentals Intact
Not too long ago, China Sunsine has reported 1Q09 results for the month ended 31 March 2009. Revenue and earnings took a dip, as the company reduced prices to maintain its competitive position and gain market share.
Gross profit margin (GPM) declined to 16.6% from 20% a year ago. According to Koh Choon Kong, chief financial officer of China Sunsine, “Margins are expected to come in the range of 15% to 20% in FY09. For the long term, we are targeting a 20% GPM.”
The company derives its revenue primarily from the tire industry, which accounted for 77% of total revenue in 2008. While earnings may have taken a knock in 1Q, domestic sales had more or less remain firm.
We expect China Sunsine, the largest rubber accelerators producer with a well-diversified customer base of more than 600 customers in China and overseas to weather the storm in relatively good shape. Counting 45 of the global top 75 tire makers, such as Michelin and Bridgestone among its clients as well as prominent local brands such as Giti Tire and Hangzhou Zhongce, the company is relatively insulated from bad debts and the danger of defaults.
Even this recession which proves so fatal to other rubber accelerators producers could be a boom to China Sunsine. According to Koh, “Smaller competitors are being weeded out and tire manufacturers are increasingly looking for a reliable supplier.”
Big Is Better
Equipped with modern machinery to handle intensive volume, China Sunsine’s two production facilities at Shanxian, Shandong Province are capable of producing 50k tons of rubber accelerators, making the company the largest manufacturer in the world.
To a producer of a common product, economies of scale is perhaps the most important factor for success, allowing the corporation to offer products at a competitive price. Further, MNCs will rather do business with a big company than a smaller one especially with regards to the supply of a crucial production ingredient.China Sunsine’s huge capacity also means that the company can ramp up production in times of robust demand hereby securing additional business when other competitors are busy coping with overwhelming demand.
From 26.3k tons of rubber accelerators in 2006, the company has recently increased its annual capacity to 50k, surpassing LANXESS, its closest rival. By the end of 2009, production capacity is expected to reach 55k tons.
Being pro-environment and prescient, China Sunsine is also upgrading its wastewater treatment plant at facility 2 amidst an ongoing tightening of environmental standards that will further handicap environmentally unfriendly domestic competitors.
Dancing With The ’Elephant’
Recession aside, China Sunsine has been busy sniffing out opportunities in other parts of the world. Setting the foundation for future growth in the South Asia, the company appointed Malaney Industries, a subsidiary of the Malaney Group, as its exclusive agent for the sales of rubber chemicals in India, Sri Lanka and Pakistan.
With the launch of the Nano car and expected 6-7% growth rate, the Indian market could well be the next big thing for the auto sector after China.
Nonetheless, as China Sunsine’s market share in India is still miniscule, the Middle Kingdom is expected to account for the lion share of sales in the near-future.
Going forward, projected car sales in China is expected to climb at a CAGR of 12% reaching 13m in 2011, which bodes well for the industry.
As for the challenges that China Sunsine faces, Koh thinks that understanding customers and becoming responsive to their needs will be increasingly important as the company looks towards increasing its global market share.
In a year where good news comes rarely for car manufacturers, this data brought much-needed cheer to companies related to the automotive industry. On the Singapore Exchange, corporations such as China Kunda and China Sunsine Chemical Holdings (China Sunsine) are the beneficiaries of the upswing.
Listed on the Singapore Exchange on 5 July 2007 at $0.39 apiece or 14.4x FY06 earnings, China Sunsine offers a once-in-a-lifetime opportunity to embrace the Chinese’s growing love affair with automobiles.
The Chinese-owned, Singapore-listed company is engaged in the production of rubber chemicals such as rubber accelerators, anti-oxidant and insoluble sulphur. These rubber chemicals are essential additives in the curing process during the production of rubber products.
Margins Fell But Fundamentals Intact
Not too long ago, China Sunsine has reported 1Q09 results for the month ended 31 March 2009. Revenue and earnings took a dip, as the company reduced prices to maintain its competitive position and gain market share.
Gross profit margin (GPM) declined to 16.6% from 20% a year ago. According to Koh Choon Kong, chief financial officer of China Sunsine, “Margins are expected to come in the range of 15% to 20% in FY09. For the long term, we are targeting a 20% GPM.”
The company derives its revenue primarily from the tire industry, which accounted for 77% of total revenue in 2008. While earnings may have taken a knock in 1Q, domestic sales had more or less remain firm.
We expect China Sunsine, the largest rubber accelerators producer with a well-diversified customer base of more than 600 customers in China and overseas to weather the storm in relatively good shape. Counting 45 of the global top 75 tire makers, such as Michelin and Bridgestone among its clients as well as prominent local brands such as Giti Tire and Hangzhou Zhongce, the company is relatively insulated from bad debts and the danger of defaults.
Even this recession which proves so fatal to other rubber accelerators producers could be a boom to China Sunsine. According to Koh, “Smaller competitors are being weeded out and tire manufacturers are increasingly looking for a reliable supplier.”
Big Is Better
Equipped with modern machinery to handle intensive volume, China Sunsine’s two production facilities at Shanxian, Shandong Province are capable of producing 50k tons of rubber accelerators, making the company the largest manufacturer in the world.
To a producer of a common product, economies of scale is perhaps the most important factor for success, allowing the corporation to offer products at a competitive price. Further, MNCs will rather do business with a big company than a smaller one especially with regards to the supply of a crucial production ingredient.China Sunsine’s huge capacity also means that the company can ramp up production in times of robust demand hereby securing additional business when other competitors are busy coping with overwhelming demand.
From 26.3k tons of rubber accelerators in 2006, the company has recently increased its annual capacity to 50k, surpassing LANXESS, its closest rival. By the end of 2009, production capacity is expected to reach 55k tons.
Being pro-environment and prescient, China Sunsine is also upgrading its wastewater treatment plant at facility 2 amidst an ongoing tightening of environmental standards that will further handicap environmentally unfriendly domestic competitors.
Dancing With The ’Elephant’
Recession aside, China Sunsine has been busy sniffing out opportunities in other parts of the world. Setting the foundation for future growth in the South Asia, the company appointed Malaney Industries, a subsidiary of the Malaney Group, as its exclusive agent for the sales of rubber chemicals in India, Sri Lanka and Pakistan.
With the launch of the Nano car and expected 6-7% growth rate, the Indian market could well be the next big thing for the auto sector after China.
Nonetheless, as China Sunsine’s market share in India is still miniscule, the Middle Kingdom is expected to account for the lion share of sales in the near-future.
Going forward, projected car sales in China is expected to climb at a CAGR of 12% reaching 13m in 2011, which bodes well for the industry.
As for the challenges that China Sunsine faces, Koh thinks that understanding customers and becoming responsive to their needs will be increasingly important as the company looks towards increasing its global market share.
2G Capital, which needs no introduction, has emerged as a shareholder of SGX-listed China Sunsine, which is probably the largest producer of rubber accelerators in PRC and the world.
2G, which has invested early in the likes of Hyflux, was named as a shareholder with 7 million shares in the 2008 annual report of China Sunsine
The latter serves all the global top 10 tyre manufacturers - Bridgestone, Michelin, Goodyear, Continental, Pirelli, Sumitomo, Yokohama, Hankook, Cooper, Kumho Tires - and more than 600 other customers in PRC and the world.
China Sunsine reported a 40% jump in net profit last year to RMB106.7 million.
Another interesting name appearing in the annual report is Ren Yuanlin, the chairman of Yangzijiang Shipbuilding and one of the richest men in China, according to Forbes magazine.
The biggest shareholder is Success More, the investment holding company of Xu Cheng Qiu, the chairman of China Sunsine.
2G, which has invested early in the likes of Hyflux, was named as a shareholder with 7 million shares in the 2008 annual report of China Sunsine
The latter serves all the global top 10 tyre manufacturers - Bridgestone, Michelin, Goodyear, Continental, Pirelli, Sumitomo, Yokohama, Hankook, Cooper, Kumho Tires - and more than 600 other customers in PRC and the world.
China Sunsine reported a 40% jump in net profit last year to RMB106.7 million.
Another interesting name appearing in the annual report is Ren Yuanlin, the chairman of Yangzijiang Shipbuilding and one of the richest men in China, according to Forbes magazine.
The biggest shareholder is Success More, the investment holding company of Xu Cheng Qiu, the chairman of China Sunsine.
Friday, September 10, 2010
Trekking on
The Thumbdrive is such a humble device, so wide spread and easy to use that you may not even give it a second thought about its origins.
Henn Tan, chairman and CEO of Trek 2000 International Ltd (Sesdaq listed in year 2000), was dead serious about this particular piece of gadget a decade ago.
Having come across the USB port, Tan envisioned the proliferation of small yet portable storage devices that would utilise the much faster transfer speeds of the USB port, thus giving birth to the USB Thumbdrive in the year 2000.
It was intended to be a cost effective replacement of the cumbersome and slow floppy disk that dominated the computing industry at that time. The invention of the Thumbdrive was supposed to catapult Trek 2000 forward to overtake its peers and into the big league.
"When I first came out with the Thumbdrive, I was so excited. I believed from day one that this was not a fortuitous attempt. I knew that I wanted to replace the floppy disk - that is why I filed for patent rights in 33 countries," he said.
However, things did not turn out the way Tan intended. Immediately after the birth of the Thumbdrive, the battle for its intellectual property rights would start.
"I was so ignorant, I thought I had the whole world in my hands. I was so proud to share everything, and I kept on saying patent granted," said Tan.
But what he didn't realise was that during the two years between filing the patent and getting it approved, anyone could steal those ideas and call it their own.
"The safest is to launch your product close to the patent grant date, and if possible, wait for it to be granted, then you will be real, real safe," he said.
Soon after announcing to the world the marvel that the company has created and amidst the initial euphoria, Tan received numerous enquiries from tech giants, all wanting a piece of the Thumbdrive.
I must have something I can call my own, that's why I turn to invention, so I can say that this is my own creation and this is my way of surviving.
The very first visit came from the business development president of a major tech companies that wanted to acquire the rights to the Thumbdrive. After setting foot into Tan's humble office he instead shelved the idea.
Although highly impressed by the technology presented by the small boutique technology firm, the foreign tech firm was at the same time unimpressed with size of Trek 2000 then.
At the end of the day, a commercial agreement was not signed with the major tech company, citing the reason that Trek 2000 was too small and untested. The concern was that in the event that something was to happen, the legal implications could run into hundreds of millions of dollars.
"That was the saddest moment … we were exceptionally down, and I had to coax and cajole my team to pick up and move forward," Tan said.
That incident was followed by a chain of events that would later plague the Thumbdrive for years to come.
A meeting was held with a foreign company that approached Trek 2000, with interest in being a distribution representative for Trek. Tan gave a comprehensive explanation of his product, and 10 months later found the company launching a similar product which was offered to another large tech company.
Cheap Taiwanese clones began to flood the market. Then came the rush of similar American devices. Amidst it all, Tan was powerless to stop the flow.
Later, other foreign companies approached Tan, representing the threat of large multi-national corporations with massive financial muscle.
One of the companies made a small financial offer for the rights to use the already patented Thumbdrive.
Trek 2000 had to consider carefully as a wrong move would mean a prolonged court battle, which could prove to be financially crippling and disastrous.
"It was then I learnt my lesson," said Tan, who discovered that in the cut-throat world of business, size really does matter. There was the realisation that in jostling by large companies for a piece of the same pie, any new player that would be perceived as a future threat.
Tan decided that a business model with no resources was detrimental to his company's growth, and decided to enforce change.
This time round, in preparation for Trek 2000's newest product, with a workking name, the Flucard, Tan decided that he would engage the help of a big tech company which he has close ties with and which is one of Trek 2000's major shareholders, Toshiba.
Having spent more than a third of his company's resources in the research and development of new products such as the Flucard, a proper plan has to be thought out to protect the intellectual property rights of such precious investments.
Tan decided that he could not do it single-handedly, like in the case of the Thumbdrive. A consortium for the Flucard was formed with Toshiba, and the policing responsibilities of the IP rights would fall on Toshiba's shoulders, with its massive financial muscle.
The Flucard is an invention which Tan is extremely proud of and foresees it taking the world by storm. And now, having learnt his lesson regarding the Thumbdrive, Tan is ready once again to take control of this invention.
The workings of the Flucard are simple - it is shaped exactly like a standard SD card, while providing an operating system (OS) which takes over the OS of a device (e.g. digital camera).
It is able to transfer data instantaneously from a device to another Flucard or any machine which is wi-fi enabled.
Another ability of the Flucard is to push data up and down a computing cloud, opening up new channels in terms of advertising as Trek 2000 also plans to provide the use of a free portal with any purchase of the Flucard.
"When I was travelling in China with my family, my daughter lost her digital camera on the third day! It was not the loss of the camera that made me upset, but it was the loss of the memories found in the card," he said. And that was when Tan decided to invent the Flucard.
Initially Tan had planned to market the product regionally. Then a close friend told him: "This is a product with a global function! Don't talk about restricting it into being regional!"
Tan gave further thought into the positioning of his company while struggling with the issue of cost and eventually decided to bring the Flucard to the global tech arena.
The anticipated impending success of the Flucard, however, does not signal Tan's willingness to take a back seat.
Tan isn't inclined to think of himself as a creative man, but rather a person who finds answers practical needs. "If someone approaches me today with an idea, I will hear them out. However, I expect them to take ownership. I will only take minor stake, as long as they are practical and realistic," he said.
Having grown up in an impoverished family, Tan has always had to rely on himself.
He started working for a Japanese technology firm, but thirteen years into the job, Tan wanted more - a stake in the company he was helping to build and not to retire early.
With savings of S$65,000, he decided to strike out on this own.
But then tragedy struck. Tan's youngest daughter was diagnosed with leukaemia, and he depleted his savings on the medical bills.
Desperate for an income, he decided to stay on with the Japanese technology firm.
A few years after his daughter's illness, he conceived of a plan.
Although he had 6 mouths to feed, he took one last gamble.
His former boss gave him S$1 million in credit, which helped him get started as a distributor of their products.
A few years after starting the distribution business, which earned a decent living for Tan, he felt it wasn't enough.
"I am a product man," he said.
"I must have something I can call my own, that's why I turn to invention, so I can say that this is my own creation and this is my way of surviving."
Posted : 28 June 2010
www.channelnewsasia.com
Henn Tan, chairman and CEO of Trek 2000 International Ltd (Sesdaq listed in year 2000), was dead serious about this particular piece of gadget a decade ago.
Having come across the USB port, Tan envisioned the proliferation of small yet portable storage devices that would utilise the much faster transfer speeds of the USB port, thus giving birth to the USB Thumbdrive in the year 2000.
It was intended to be a cost effective replacement of the cumbersome and slow floppy disk that dominated the computing industry at that time. The invention of the Thumbdrive was supposed to catapult Trek 2000 forward to overtake its peers and into the big league.
"When I first came out with the Thumbdrive, I was so excited. I believed from day one that this was not a fortuitous attempt. I knew that I wanted to replace the floppy disk - that is why I filed for patent rights in 33 countries," he said.
However, things did not turn out the way Tan intended. Immediately after the birth of the Thumbdrive, the battle for its intellectual property rights would start.
"I was so ignorant, I thought I had the whole world in my hands. I was so proud to share everything, and I kept on saying patent granted," said Tan.
But what he didn't realise was that during the two years between filing the patent and getting it approved, anyone could steal those ideas and call it their own.
"The safest is to launch your product close to the patent grant date, and if possible, wait for it to be granted, then you will be real, real safe," he said.
Soon after announcing to the world the marvel that the company has created and amidst the initial euphoria, Tan received numerous enquiries from tech giants, all wanting a piece of the Thumbdrive.
I must have something I can call my own, that's why I turn to invention, so I can say that this is my own creation and this is my way of surviving.
The very first visit came from the business development president of a major tech companies that wanted to acquire the rights to the Thumbdrive. After setting foot into Tan's humble office he instead shelved the idea.
Although highly impressed by the technology presented by the small boutique technology firm, the foreign tech firm was at the same time unimpressed with size of Trek 2000 then.
At the end of the day, a commercial agreement was not signed with the major tech company, citing the reason that Trek 2000 was too small and untested. The concern was that in the event that something was to happen, the legal implications could run into hundreds of millions of dollars.
"That was the saddest moment … we were exceptionally down, and I had to coax and cajole my team to pick up and move forward," Tan said.
That incident was followed by a chain of events that would later plague the Thumbdrive for years to come.
A meeting was held with a foreign company that approached Trek 2000, with interest in being a distribution representative for Trek. Tan gave a comprehensive explanation of his product, and 10 months later found the company launching a similar product which was offered to another large tech company.
Cheap Taiwanese clones began to flood the market. Then came the rush of similar American devices. Amidst it all, Tan was powerless to stop the flow.
Later, other foreign companies approached Tan, representing the threat of large multi-national corporations with massive financial muscle.
One of the companies made a small financial offer for the rights to use the already patented Thumbdrive.
Trek 2000 had to consider carefully as a wrong move would mean a prolonged court battle, which could prove to be financially crippling and disastrous.
"It was then I learnt my lesson," said Tan, who discovered that in the cut-throat world of business, size really does matter. There was the realisation that in jostling by large companies for a piece of the same pie, any new player that would be perceived as a future threat.
Tan decided that a business model with no resources was detrimental to his company's growth, and decided to enforce change.
This time round, in preparation for Trek 2000's newest product, with a workking name, the Flucard, Tan decided that he would engage the help of a big tech company which he has close ties with and which is one of Trek 2000's major shareholders, Toshiba.
Having spent more than a third of his company's resources in the research and development of new products such as the Flucard, a proper plan has to be thought out to protect the intellectual property rights of such precious investments.
Tan decided that he could not do it single-handedly, like in the case of the Thumbdrive. A consortium for the Flucard was formed with Toshiba, and the policing responsibilities of the IP rights would fall on Toshiba's shoulders, with its massive financial muscle.
The Flucard is an invention which Tan is extremely proud of and foresees it taking the world by storm. And now, having learnt his lesson regarding the Thumbdrive, Tan is ready once again to take control of this invention.
The workings of the Flucard are simple - it is shaped exactly like a standard SD card, while providing an operating system (OS) which takes over the OS of a device (e.g. digital camera).
It is able to transfer data instantaneously from a device to another Flucard or any machine which is wi-fi enabled.
Another ability of the Flucard is to push data up and down a computing cloud, opening up new channels in terms of advertising as Trek 2000 also plans to provide the use of a free portal with any purchase of the Flucard.
"When I was travelling in China with my family, my daughter lost her digital camera on the third day! It was not the loss of the camera that made me upset, but it was the loss of the memories found in the card," he said. And that was when Tan decided to invent the Flucard.
Initially Tan had planned to market the product regionally. Then a close friend told him: "This is a product with a global function! Don't talk about restricting it into being regional!"
Tan gave further thought into the positioning of his company while struggling with the issue of cost and eventually decided to bring the Flucard to the global tech arena.
The anticipated impending success of the Flucard, however, does not signal Tan's willingness to take a back seat.
Tan isn't inclined to think of himself as a creative man, but rather a person who finds answers practical needs. "If someone approaches me today with an idea, I will hear them out. However, I expect them to take ownership. I will only take minor stake, as long as they are practical and realistic," he said.
Having grown up in an impoverished family, Tan has always had to rely on himself.
He started working for a Japanese technology firm, but thirteen years into the job, Tan wanted more - a stake in the company he was helping to build and not to retire early.
With savings of S$65,000, he decided to strike out on this own.
But then tragedy struck. Tan's youngest daughter was diagnosed with leukaemia, and he depleted his savings on the medical bills.
Desperate for an income, he decided to stay on with the Japanese technology firm.
A few years after his daughter's illness, he conceived of a plan.
Although he had 6 mouths to feed, he took one last gamble.
His former boss gave him S$1 million in credit, which helped him get started as a distributor of their products.
A few years after starting the distribution business, which earned a decent living for Tan, he felt it wasn't enough.
"I am a product man," he said.
"I must have something I can call my own, that's why I turn to invention, so I can say that this is my own creation and this is my way of surviving."
Posted : 28 June 2010
www.channelnewsasia.com
Trek 2000 International Ltd
-shares issued 296m
-cash 21m
-FA 23M
-CA 44M
-CL 18M
-FL 2M
-NAV 16 USDcents
-Major Shareholders
Henn Tan 35.04%
Toshiba Finance 15.65%
Creative Technology 9.27%
-cash 21m
-FA 23M
-CA 44M
-CL 18M
-FL 2M
-NAV 16 USDcents
-Major Shareholders
Henn Tan 35.04%
Toshiba Finance 15.65%
Creative Technology 9.27%
Thursday, September 9, 2010
China's auto sales jump 39.02% in January-August
BEIJING - China's domestic manufacturers sales to auto dealers rebounded 6.29 percent month on month to 1.322 million units in August after a monthly decline in July, the China Association of Automobile Manufacturers (CAAM) said here Thursday.
The August auto sales at the wholesale level represented an increase of 16.14 percent year on year, according to the CAAM figures.
Domestically-made auto output dipped 0.64 percent from July to 1.277million units but still posted an increase of 12 percent from the same month last year, according to CAAM.
Manufacturers' sales to auto dealers was 1.244 million units in July,down 11.9 percent from June while output dropped 7.54 percent month on month to 1.286 million units, the CAAM data showed.
As for the January-August period, China's auto sales at wholesale level rose 39.02 percent year on year to 11.58 million units in the first eight months this year while the output reached 11.49 million units, up 39.27 percent from a year ago.
(Xinhua)
The August auto sales at the wholesale level represented an increase of 16.14 percent year on year, according to the CAAM figures.
Domestically-made auto output dipped 0.64 percent from July to 1.277million units but still posted an increase of 12 percent from the same month last year, according to CAAM.
Manufacturers' sales to auto dealers was 1.244 million units in July,down 11.9 percent from June while output dropped 7.54 percent month on month to 1.286 million units, the CAAM data showed.
As for the January-August period, China's auto sales at wholesale level rose 39.02 percent year on year to 11.58 million units in the first eight months this year while the output reached 11.49 million units, up 39.27 percent from a year ago.
(Xinhua)
Wednesday, September 8, 2010
CAAM says auto sales up to 25m by 2015
The China Association of Automobile Manufacturers (CAAM) predicted the output and sales of cars in China will increase to 25 million by 2015, which would account for 30 percent of global total car output, the 21st Century Business Herald reported Wednesday.
The association expected the scale of China's auto market to further expand during the 12th five-year plan period (2011-2015).
It also said China's auto industry would improve energy saving and emissions reductions over the period.
China overtook the United States to become the world's largest auto maker and auto market in 2009, with output and sales respectively hitting 13.79 million and 13.64 million units last year.
By Ren Jie (chinadaily.com.cn)
The association expected the scale of China's auto market to further expand during the 12th five-year plan period (2011-2015).
It also said China's auto industry would improve energy saving and emissions reductions over the period.
China overtook the United States to become the world's largest auto maker and auto market in 2009, with output and sales respectively hitting 13.79 million and 13.64 million units last year.
By Ren Jie (chinadaily.com.cn)
Chinese hunger for car ownership: survey
BEIJING -- A nation-wide survey run by China Youth Daily found over half of the respondents plan to buy cars, the newspaper reported Tuesday.
The survey polled 1,541 respondents, 40.3 percent of whom were from small and medium sized cities, and 43.3 percent were from provincial or municipal capital cities.
Of the 1,541 respondents, 60.2 percent said they were planning to buy a car in the next five years, while 16 percent already had one. Only 21.1 percent had ruled out buying a car.
Also according to the survey, the majority of respondents considered the "convenience" of having a car as the salient reason for wanting to own one.
Ma Liwei, a graduate student of Tsinghua University, bought a car one month ago. He said, "The outreach of buses and subways is still limited, but with a car, I can go everywhere. Besides, driving saves time and effort compared to catching public transport."
However, as China's car ownership skyrockets, traffic jams are becoming a huge headache in many cities. According to statistics, the number of cities with over one million vehicles has reached 15.
Beijing Transportation Research Center recently predicted that Beijing's average driving speed would drop to below 15 kilometers an hour by 2015.
The China Youth Daily survey also showed that one fourth of the respondents wanted to buy cars out of peer pressure and associated cars with their social status.
Sun Shijin, professor in psychology with Fudan University was quoted by newspaper as saying, "More and more people tend to use cars as show-off to satisfy their spiritual emptiness."
(Xinhua)
The survey polled 1,541 respondents, 40.3 percent of whom were from small and medium sized cities, and 43.3 percent were from provincial or municipal capital cities.
Of the 1,541 respondents, 60.2 percent said they were planning to buy a car in the next five years, while 16 percent already had one. Only 21.1 percent had ruled out buying a car.
Also according to the survey, the majority of respondents considered the "convenience" of having a car as the salient reason for wanting to own one.
Ma Liwei, a graduate student of Tsinghua University, bought a car one month ago. He said, "The outreach of buses and subways is still limited, but with a car, I can go everywhere. Besides, driving saves time and effort compared to catching public transport."
However, as China's car ownership skyrockets, traffic jams are becoming a huge headache in many cities. According to statistics, the number of cities with over one million vehicles has reached 15.
Beijing Transportation Research Center recently predicted that Beijing's average driving speed would drop to below 15 kilometers an hour by 2015.
The China Youth Daily survey also showed that one fourth of the respondents wanted to buy cars out of peer pressure and associated cars with their social status.
Sun Shijin, professor in psychology with Fudan University was quoted by newspaper as saying, "More and more people tend to use cars as show-off to satisfy their spiritual emptiness."
(Xinhua)
Monday, September 6, 2010
China's passenger car sales increase 59.26% in Aug
TIANJIN - China's passenger car sales in August increased 59.26 percent from one year earlier to 977,300 units, the China Automotive Technology and Research Center (CATRC) said Wednesday.
The growth rate was 43.83 percentage points higher compared with that in July, the Tianjin-based CATRC said.
China's auto sales, including those of passenger cars and commercial vehicles such as vans, lorries and tractors, totaled 9.46 million units in the first eight months of this year, up 31.53 percent year on year, it said.
Auto production in China, the world's largest auto market, rose 35.45 percent from a year earlier to 10.91 million units in the January-August period, it said.
The average time cars took to sell once off the production line fell to 57 days last month from 58 days in July, the center said.
CATRC director Zhao Hang attributed the strong sales in August to high consumer demand due to the introduction of new models and better sales promotions.
Zhao expected China's passenger car sales to maintain a good performance in September.
The growth rate was 43.83 percentage points higher compared with that in July, the Tianjin-based CATRC said.
China's auto sales, including those of passenger cars and commercial vehicles such as vans, lorries and tractors, totaled 9.46 million units in the first eight months of this year, up 31.53 percent year on year, it said.
Auto production in China, the world's largest auto market, rose 35.45 percent from a year earlier to 10.91 million units in the January-August period, it said.
The average time cars took to sell once off the production line fell to 57 days last month from 58 days in July, the center said.
CATRC director Zhao Hang attributed the strong sales in August to high consumer demand due to the introduction of new models and better sales promotions.
Zhao expected China's passenger car sales to maintain a good performance in September.
Ministries encourage new energy vehicles
China is drafting new policies and speeding up the implementation of existing policies on developing new energy vehicles, government officials said at the International Forum on Chinese Automobile Industry Development held in Tianjin over the weekend, the Shanghai Securities News reported Monday.
Promoting the development of electric vehicles industry has been a top priority, the report said.
The Ministry of Science and Technology has composed a draft for developing electric cars during the 12th Five-year plan (2011-2015) period, which comprised seven aspects, such as setting the direction for electric cars research and development, further developing products for demonstration and improving the application of government subsidies, the report said.
The National Development and Reform Commission, China's top economic planner, has included key parts of new energy cars as the encouraged products in the Guiding Catalogue for Structural Adjustment of Industry (2010).
Ministry of Industry and Information Technology is working with other departments to revise the Policy on Development of Automotive Industry (2004), and the development plan for energy-saving and new energy vehicles (2011-2020) will take shape in two months.
The Ministry of Commerce is also working on guiding the exports of Chinese cars and auto parts as well as encouraging automakers to introduce advanced facilities, technologies and auto parts.
Government officials said at the forum that China aims to become a leading power in the auto industry by 2020, with the export volume of China-manufactured cars and auto parts accounting for over 10 percent of the world's total and new energy vehicles ownership reaching 5 million, according to the report.
-chinadaily.com.cn
Promoting the development of electric vehicles industry has been a top priority, the report said.
The Ministry of Science and Technology has composed a draft for developing electric cars during the 12th Five-year plan (2011-2015) period, which comprised seven aspects, such as setting the direction for electric cars research and development, further developing products for demonstration and improving the application of government subsidies, the report said.
The National Development and Reform Commission, China's top economic planner, has included key parts of new energy cars as the encouraged products in the Guiding Catalogue for Structural Adjustment of Industry (2010).
Ministry of Industry and Information Technology is working with other departments to revise the Policy on Development of Automotive Industry (2004), and the development plan for energy-saving and new energy vehicles (2011-2020) will take shape in two months.
The Ministry of Commerce is also working on guiding the exports of Chinese cars and auto parts as well as encouraging automakers to introduce advanced facilities, technologies and auto parts.
Government officials said at the forum that China aims to become a leading power in the auto industry by 2020, with the export volume of China-manufactured cars and auto parts accounting for over 10 percent of the world's total and new energy vehicles ownership reaching 5 million, according to the report.
-chinadaily.com.cn
Shanghai's new energy vehicle output to reach 30b yuan
TIANJIN - The output of new energy vehicles in Shanghai will reach 30 billion yuan ($4.41 billion) by 2012, municipal authorities said Sunday.
Further, Shanghai will build 25,000 charging stations for battery or hybrid power new energy vehicles by 2012, said Wang Zhe, an official with Shanghai's new energy automobile promotion office at the International Forum on Chinese Automobile Industry Development in Tianjin.
With government support in purchasing, R&D and infrastructure, Shanghai will be able to produce 100,000 new energy vehicles every year, including 60,000 passenger vehicles by 2012. About 20,000 of them will be for private use," Wang said.
The city is also applying to the National Development and Reform Commission for additional subsidies for private buyers of new energy vehicles, he added without providing details.
By the end of 2009, more than 2.43 million vehicles have been licensed in Shanghai. The number of private vehicles in the city has been increasing by 20 percent annually since 2006.
Dubbed the economic capital of China, Shanghai, especially its Jiading District, is also a major automobile manufacturing hub.
Jiading is working to become a leader in developing and manufacturing new energy vehicles in China, Fei Xiaomei, deputy district head, said Sunday in Shanghai.
-Xinhua
Further, Shanghai will build 25,000 charging stations for battery or hybrid power new energy vehicles by 2012, said Wang Zhe, an official with Shanghai's new energy automobile promotion office at the International Forum on Chinese Automobile Industry Development in Tianjin.
With government support in purchasing, R&D and infrastructure, Shanghai will be able to produce 100,000 new energy vehicles every year, including 60,000 passenger vehicles by 2012. About 20,000 of them will be for private use," Wang said.
The city is also applying to the National Development and Reform Commission for additional subsidies for private buyers of new energy vehicles, he added without providing details.
By the end of 2009, more than 2.43 million vehicles have been licensed in Shanghai. The number of private vehicles in the city has been increasing by 20 percent annually since 2006.
Dubbed the economic capital of China, Shanghai, especially its Jiading District, is also a major automobile manufacturing hub.
Jiading is working to become a leader in developing and manufacturing new energy vehicles in China, Fei Xiaomei, deputy district head, said Sunday in Shanghai.
-Xinhua
Chery aims big for 2010 sales
China's largest indigenous automaker Chery Auto plans to outsell its home-grown rival BYD Auto this year, the China Business News (CBN) reported today, citing an unnamed source.
Ma Deji, Chery's deputy general manager, said its company has set the 2010 sales target at 700,000 units. But a company insider told the CBN that Chery will not loose ground to the Shenzhen-based BYD Auto, which has planned to sell 800,000 units this year.
The Anhui-based automaker just inaugurated a new plant in Wuhu, Anhui province on Jan 16. With a 10-billion-yuan investment, the plant will finally add up Chery's annual vehicle production capacity to 1 million units after it goes into production in 2012.
Chery had already built a 4.7 billion yuan ($688.3 million) plant in Dalian, Liaoning province last year. The Dalian plant, with an annual production capacity of 200,000 vehicles, is set to go into operation in June 2011.
As of 2009, the automaker was able to produce 600,000 units of vehicles annually. It sold more than 500,000 cars that year, ranking the first among China's home grown automakers...
2010-02-23
-chinadaily.com.cn
Ma Deji, Chery's deputy general manager, said its company has set the 2010 sales target at 700,000 units. But a company insider told the CBN that Chery will not loose ground to the Shenzhen-based BYD Auto, which has planned to sell 800,000 units this year.
The Anhui-based automaker just inaugurated a new plant in Wuhu, Anhui province on Jan 16. With a 10-billion-yuan investment, the plant will finally add up Chery's annual vehicle production capacity to 1 million units after it goes into production in 2012.
Chery had already built a 4.7 billion yuan ($688.3 million) plant in Dalian, Liaoning province last year. The Dalian plant, with an annual production capacity of 200,000 vehicles, is set to go into operation in June 2011.
As of 2009, the automaker was able to produce 600,000 units of vehicles annually. It sold more than 500,000 cars that year, ranking the first among China's home grown automakers...
2010-02-23
-chinadaily.com.cn
Ford China's August sales up 24%
Ford and its Chinese joint ventures reported sales of 44,047 units in August in China, a 24 percent increase year-on-year,according to data from Ford Motor Co.
From January to August this year, Ford has sold 368,103 vehicles, a 42 percent increase from the same period last year.
trong demand for Ford's new products in China and India, two of the world's fastest-growing automotive markets, led to sales of 51,972 vehicles in August in the two countries, a 37 percent increase year-on-year.
So far this year, Ford has sold 422,779 vehicles in the two countries combined, a 52 percent increase over the same period last year.
In the next 10 years, Ford expects 70 percent of its growth to come from its Asia Pacific and Africa region.
"We have big plans for India, China and the region," said Joe Hinrichs, president of Ford Asia Pacific and Africa. "China will remain the largest car market in the world for the foreseeable future, and we estimate India will be the third-largest market in the world in the next 10 years."
Ford is building two new plants in China: one in Chongqing with Changan Ford Mazda Automotive, and one in Nanchang with Jiangling Motors Corp (JMC).
The $300 million Nanchang plant is expected to have the capacity to produce up to 300,000 vehicles per year and will produce both Ford- and JMC-branded vehicles. JMC is a strategic partner of Ford in producing commercial vehicles, and 30 percent of the company is owned by Ford.
(Agencies)
From January to August this year, Ford has sold 368,103 vehicles, a 42 percent increase from the same period last year.
trong demand for Ford's new products in China and India, two of the world's fastest-growing automotive markets, led to sales of 51,972 vehicles in August in the two countries, a 37 percent increase year-on-year.
So far this year, Ford has sold 422,779 vehicles in the two countries combined, a 52 percent increase over the same period last year.
In the next 10 years, Ford expects 70 percent of its growth to come from its Asia Pacific and Africa region.
"We have big plans for India, China and the region," said Joe Hinrichs, president of Ford Asia Pacific and Africa. "China will remain the largest car market in the world for the foreseeable future, and we estimate India will be the third-largest market in the world in the next 10 years."
Ford is building two new plants in China: one in Chongqing with Changan Ford Mazda Automotive, and one in Nanchang with Jiangling Motors Corp (JMC).
The $300 million Nanchang plant is expected to have the capacity to produce up to 300,000 vehicles per year and will produce both Ford- and JMC-branded vehicles. JMC is a strategic partner of Ford in producing commercial vehicles, and 30 percent of the company is owned by Ford.
(Agencies)
GM China's auto sales up 19.2% in August
BEIJING - GM China, the Chinese subsidiary of US carmaker General Motors, said Thursday its auto sales in August in China rose 19.2 percent from a year earlier to 181,625 units.
The August figure brought sales in the first eight months of the year to about 1.57 million units, up 41 percent year on year, the company said.
Shanghai GM, GM's joint venture with Chinese automaker Shanghai Automotive Industry Corporation (SAIC), sold 81,063 units of vehicles in August, an increase of 28.1 percent over the same period last year.
SAIC-GM-Wuling, a joint venture between GM, SAIC Motor and Liuzhou Wuling Motors, sold 95,119 vehicles in August, up 7.15 percent from a year ago.
Among GM brands in China, Chevrolet reported 33.5 percent year-on-year growth in sales with 38,482 units sold in August.
Sales of the Buick brand totaled 45,684 units in the month, up 17.4 percent year on year.
The Cadillac brand's sales increased 177.6 percent to 1,624 units in August.
Auto sales in China grew rapidly after the government halved the sales taxes on cars with an engine displacement of 1.6 liters or less in January last year. The tax cut took the sales tax on the small cars to 5 percent. But the tax was raised to 7.5 percent this year.
Chinese auto sales totaled 9.46 million units in the first eight months of the year, up 31.53 percent year on year, the China Automotive Technology and Research Center said Wednesday.
-Xinhua
The August figure brought sales in the first eight months of the year to about 1.57 million units, up 41 percent year on year, the company said.
Shanghai GM, GM's joint venture with Chinese automaker Shanghai Automotive Industry Corporation (SAIC), sold 81,063 units of vehicles in August, an increase of 28.1 percent over the same period last year.
SAIC-GM-Wuling, a joint venture between GM, SAIC Motor and Liuzhou Wuling Motors, sold 95,119 vehicles in August, up 7.15 percent from a year ago.
Among GM brands in China, Chevrolet reported 33.5 percent year-on-year growth in sales with 38,482 units sold in August.
Sales of the Buick brand totaled 45,684 units in the month, up 17.4 percent year on year.
The Cadillac brand's sales increased 177.6 percent to 1,624 units in August.
Auto sales in China grew rapidly after the government halved the sales taxes on cars with an engine displacement of 1.6 liters or less in January last year. The tax cut took the sales tax on the small cars to 5 percent. But the tax was raised to 7.5 percent this year.
Chinese auto sales totaled 9.46 million units in the first eight months of the year, up 31.53 percent year on year, the China Automotive Technology and Research Center said Wednesday.
-Xinhua
Sunday, September 5, 2010
Auto sales outlook solid
BEIJING, July 8 (Xinhaunet) -- China's automobile sales will decline slightly in the second half due to market cooling, said analysts.
"It is not beyond expectations that second half sales figures will be a little less than the first half as the market returns from overheated to healthy development," said Rao Da, secretary-general of the China Passenger Car Association.
However, China's prolonged policy of subsidizing trade-ins and new stimulus providing 3,000 yuan ($442.58) subsidy per unit to 71 green vehicle models, which both came into effect on July 1, will drive the sales in the second half, to a certain extent, said Rao.
"Thus, optimistically we lift our expectations for the whole year's auto sales from the previous 17 million units three months ago to 17.5 million units."
China sold 985,815 units of cars, multi-purpose vehicles, sports-utility vehicles and minivans in June, with a year-on-year growth rate of 18.1 percent, the lowest since last February. The sales dipped 2.2 percent from May, the association released on Wednesday.
The total sales in the first half hit 6.31 million units, surged 41.3 percent over last year, said the association.
General Motors, whose sales in China for the first time surpassed those in the United States in the first half, said that it expected continued sales growth in the second half, as it has been the biggest beneficiary of the Chinese government's new supporting measure for fuel-efficient cars, with 18 of its models to be listed among the total 71 models made by 16 automakers.
The new measure mainly supports smaller-sized vehicles with an engine capacity of or below 1.6 liters, which reduces fuel consumption by about 20 percent in average compared with current industry standard.
According to a report released by consumer research company AC Nielsen on Wednesday, 32 percent of consumers surveyed said that they will still consider purchasing a car within the coming 12 months. Georgia Zhuang, head of auto research Nielsen China, estimated that stimulus measures on green vehicles will greatly drive sales in the segment, as 20 percent of the consumers it surveyed said the government subsidy will encourage car purchase.
"From a long-term perspective, China's automobile market will continue robust growth, as there is increasing demand for smaller-sized fuel efficient cars and huge potential in third-tier or fourth-tier cities," said Feng Fei, director of the Research Department of Industrial Economy under the Development Research Center of the State Council."The growth engine will move from the coastal cities to inland regions, from big cities to rural regions in the future."
He predicted in China's 2010 Blue Book of Automotive Industry launched this Monday that the demand for passenger vehicles in China will reach 25 million units in 2020 and 35 million units in 2030.
"The natural demand is huge. Although China will have 200 million passenger vehicles in 2025, which means that seven out of every 100 people own cars, that's a similar figure with the current global average," said Zhang Xiaoyu, executive vice-president of China Machinery Industry Federation.
(Source: China Daily)
"It is not beyond expectations that second half sales figures will be a little less than the first half as the market returns from overheated to healthy development," said Rao Da, secretary-general of the China Passenger Car Association.
However, China's prolonged policy of subsidizing trade-ins and new stimulus providing 3,000 yuan ($442.58) subsidy per unit to 71 green vehicle models, which both came into effect on July 1, will drive the sales in the second half, to a certain extent, said Rao.
"Thus, optimistically we lift our expectations for the whole year's auto sales from the previous 17 million units three months ago to 17.5 million units."
China sold 985,815 units of cars, multi-purpose vehicles, sports-utility vehicles and minivans in June, with a year-on-year growth rate of 18.1 percent, the lowest since last February. The sales dipped 2.2 percent from May, the association released on Wednesday.
The total sales in the first half hit 6.31 million units, surged 41.3 percent over last year, said the association.
General Motors, whose sales in China for the first time surpassed those in the United States in the first half, said that it expected continued sales growth in the second half, as it has been the biggest beneficiary of the Chinese government's new supporting measure for fuel-efficient cars, with 18 of its models to be listed among the total 71 models made by 16 automakers.
The new measure mainly supports smaller-sized vehicles with an engine capacity of or below 1.6 liters, which reduces fuel consumption by about 20 percent in average compared with current industry standard.
According to a report released by consumer research company AC Nielsen on Wednesday, 32 percent of consumers surveyed said that they will still consider purchasing a car within the coming 12 months. Georgia Zhuang, head of auto research Nielsen China, estimated that stimulus measures on green vehicles will greatly drive sales in the segment, as 20 percent of the consumers it surveyed said the government subsidy will encourage car purchase.
"From a long-term perspective, China's automobile market will continue robust growth, as there is increasing demand for smaller-sized fuel efficient cars and huge potential in third-tier or fourth-tier cities," said Feng Fei, director of the Research Department of Industrial Economy under the Development Research Center of the State Council."The growth engine will move from the coastal cities to inland regions, from big cities to rural regions in the future."
He predicted in China's 2010 Blue Book of Automotive Industry launched this Monday that the demand for passenger vehicles in China will reach 25 million units in 2020 and 35 million units in 2030.
"The natural demand is huge. Although China will have 200 million passenger vehicles in 2025, which means that seven out of every 100 people own cars, that's a similar figure with the current global average," said Zhang Xiaoyu, executive vice-president of China Machinery Industry Federation.
(Source: China Daily)
China reports about 48% increase in half-year auto sales
BEIJING, July 9 (Xinhua) -- Chinese auto sales rose 47.67 percent year on year to 9.02 million units in the first half of the year, the China Association of Automobile Manufacturers (CAAM) said Friday.
Auto output in the past 6 months exceeded 8.92 million units, a rise of 48.84 percent from a year earlier, according to the CAAM.
In June, auto output stood at 1.39 million units, up 20.43 percent year on year, but down 1.84 percent compared to May.
Sales in June reached 1.41 million units, up 23.48 percent compared to a year ago, but also down by 1.83 percent month on month, CAAM figures show.
"Both output and sales exceeded our expectations earlier this year when we projected output would be around 15 million units for 2010," said Xiong Chuanlin, CAAM chief.
Of the total, sales of China's home-made passengers vehicles hit more 3.18 million units during the first half, accounting for 47.35 percent of the market, up 2.04 percentage points compared to the same period last year.
Sales of domestically produced sedans were at 1.45 million units, accounting for 31.68 percent of the market, up 2.23 percentage points over the same period last year, according to CAAM figures.
Top five auto sellers in the first half were SAIC Motor, Dongfeng Motor, Changan Automobile, First Automobile Works, and Beijing Automobile Works.
Auto output in the past 6 months exceeded 8.92 million units, a rise of 48.84 percent from a year earlier, according to the CAAM.
In June, auto output stood at 1.39 million units, up 20.43 percent year on year, but down 1.84 percent compared to May.
Sales in June reached 1.41 million units, up 23.48 percent compared to a year ago, but also down by 1.83 percent month on month, CAAM figures show.
"Both output and sales exceeded our expectations earlier this year when we projected output would be around 15 million units for 2010," said Xiong Chuanlin, CAAM chief.
Of the total, sales of China's home-made passengers vehicles hit more 3.18 million units during the first half, accounting for 47.35 percent of the market, up 2.04 percentage points compared to the same period last year.
Sales of domestically produced sedans were at 1.45 million units, accounting for 31.68 percent of the market, up 2.23 percentage points over the same period last year, according to CAAM figures.
Top five auto sellers in the first half were SAIC Motor, Dongfeng Motor, Changan Automobile, First Automobile Works, and Beijing Automobile Works.
China's auto makers reject "excess capacity" warning
TIANJIN, Sept. 5 (Xinhua) -- Executives from China's auto makers Sunday rejected an official warning that unchecked growth in the industry was leading to excess capacity and could harm the wider economy.
Chen Bin, an official with the National Development and Reform Commission, China's top economic planner, Saturday said excess auto capacity threatened sustainable economic development and must be "resolutely" stopped.
But industry representatives and the China Association of Automobile Manufacturers (CAAM) Sunday argued car makers were only trying to meet expected demand in the world's largest auto market.
Dongfeng Automobile, a major Chinese auto manufacturer, had been running in top gear since last year, said Fan Zhong, a senior manager. "Our problem is not having enough capacity."
Most entrepreneurs at the International Forum on Chinese Automobile Industry Development in Tianjin had similar views.
Ford China was focusing on expanding capacity as demand kept rising, said CEO Robert Graziano.
The overall capacity of China's auto industry might seem excessive, but the market had huge potential for restructuring and growth, said Hu Xinmin, honorary chairman of the CAAM.
China overtook the United States to become the world's largest auto maker and auto market in 2009, with output and sales respectively hitting 13.79 million and 13.64 million units last year.
China's auto industry had been manufacturing at 120 percent of its capacity, and most manufacturers were operating more than 20 hours a day, said Xu Changming, head of information resource development at the State Information Center.
The sales was expected to grow by more than 15 percent annually in the next few years, Xu said. "There is no need to worry about excessive output."
However, Chen Bin warned that local governments had been making "blind" efforts to open new factories and expand capacity, as they were encouraged by the industry's healthy profits and economic benefits.
Twenty-seven of the Chinese mainland's 31 provinces, autonomous regions and municipalities have plants that are able to produce finished vehicles.
With the extension of the national auto replacement subsidy to the end of this year, domestic output and sales both exceeded 10 million units in the first seven months, according to data released by the Ministry of Industry and Information Technology last month.
Chen Bin, an official with the National Development and Reform Commission, China's top economic planner, Saturday said excess auto capacity threatened sustainable economic development and must be "resolutely" stopped.
But industry representatives and the China Association of Automobile Manufacturers (CAAM) Sunday argued car makers were only trying to meet expected demand in the world's largest auto market.
Dongfeng Automobile, a major Chinese auto manufacturer, had been running in top gear since last year, said Fan Zhong, a senior manager. "Our problem is not having enough capacity."
Most entrepreneurs at the International Forum on Chinese Automobile Industry Development in Tianjin had similar views.
Ford China was focusing on expanding capacity as demand kept rising, said CEO Robert Graziano.
The overall capacity of China's auto industry might seem excessive, but the market had huge potential for restructuring and growth, said Hu Xinmin, honorary chairman of the CAAM.
China overtook the United States to become the world's largest auto maker and auto market in 2009, with output and sales respectively hitting 13.79 million and 13.64 million units last year.
China's auto industry had been manufacturing at 120 percent of its capacity, and most manufacturers were operating more than 20 hours a day, said Xu Changming, head of information resource development at the State Information Center.
The sales was expected to grow by more than 15 percent annually in the next few years, Xu said. "There is no need to worry about excessive output."
However, Chen Bin warned that local governments had been making "blind" efforts to open new factories and expand capacity, as they were encouraged by the industry's healthy profits and economic benefits.
Twenty-seven of the Chinese mainland's 31 provinces, autonomous regions and municipalities have plants that are able to produce finished vehicles.
With the extension of the national auto replacement subsidy to the end of this year, domestic output and sales both exceeded 10 million units in the first seven months, according to data released by the Ministry of Industry and Information Technology last month.
Saturday, September 4, 2010
China car market may not sustain growth
TIANJIN - CHINA'S car market will continue to grow this year but may not sustain the breakneck pace of last year, the chief executive of Ford Motor's China car venture said on Saturday.
'Overall this year versus last year, there will still be growth. First quarter and second quarter were good and we see some slowdown in the third quarter,' Jeffrey Shen told Reuters on the sidelines of an industry event in the northern municipality of Tianjin.
'But that's nothing major. There is no market that can continue to have 40, 50 per cent growth.' China, which eclipsed the United States as the world's largest auto market last year, has been a major bright spot as the global industry struggles to recover from a steep downturn.
Car sales started to show signs of a slowdown beginning from the second quarter on economic worries, but bounced back strongly in August due largely to government subsidies on fuel-efficient cars.
The up-turn in demand could extend into September and October, the best auto sales season, and may continue into the winter months if automakers slash prices to drive sales, some industry observers have said.
But Mr Shen, also the president of Ford's three-way tie with Mazda Motor and Chongqing Changan Automobile, disagreed. -- REUTERS
'Overall this year versus last year, there will still be growth. First quarter and second quarter were good and we see some slowdown in the third quarter,' Jeffrey Shen told Reuters on the sidelines of an industry event in the northern municipality of Tianjin.
'But that's nothing major. There is no market that can continue to have 40, 50 per cent growth.' China, which eclipsed the United States as the world's largest auto market last year, has been a major bright spot as the global industry struggles to recover from a steep downturn.
Car sales started to show signs of a slowdown beginning from the second quarter on economic worries, but bounced back strongly in August due largely to government subsidies on fuel-efficient cars.
The up-turn in demand could extend into September and October, the best auto sales season, and may continue into the winter months if automakers slash prices to drive sales, some industry observers have said.
But Mr Shen, also the president of Ford's three-way tie with Mazda Motor and Chongqing Changan Automobile, disagreed. -- REUTERS
Subscribe to:
Posts (Atom)