Tuesday, June 16, 2009
UK scrappage scheme boost for new cars
Over 60,000 orders have now been taken by manufacturers since the subsidy of £2,000 was announced in the Budget to scrap vehicles of 10-years-old or more.
Money to run out?
So far, £60m of the £300m government allocation has been given out prompting speculation that the money will run before the scheme is due to end in February 2010.
Business Secretary Lord Mandelson said: "Consumers know a good deal when they see one.
"These figures speak for themselves. Car manufacturers continue to report on the success of the scheme with rising sales. It's the boost that the industry needs."
German market
No official information is available on the types of cars being sold although analysis of the top performing carmakers in Motor Trader this month shows the majority of sales are smaller cars.
In Germany, the scrappage scheme proved popular for among others, Polo, Panda, Corsa and Fiesta buyers.
Ford Fiesta continues to be the best selling car in the UK in May and for the year to date.
DATED: 16.06.09
FEED: MT
GM agrees Saab sale to Koenigsegg
General Motors has reached a tentative agreement to sell Saab to the Swedish sports car manufacturer Koenigsegg.
GM said that as part of the deal there would be $600m (£367m) of funding from the European Investment Bank (EIB), guaranteed by the Swedish government.
It is the latest part of GM's reorganisation, which is also set to see the Opel and Vauxhall brands going to Canada's Magna.
Saab filed for reorganisation under Swedish law on 20 February.
Koenigsegg produces 18 cars a year and employs 45 people, and there has been some doubt as to whether it has the expertise to run Saab, which sold 93,000 cars in 2008.
Saab employs about 3,400 people in Sweden and about 12,000 other jobs in the country are dependent on Saab and its suppliers.
But GM Europe's president Carl-Peter Forster said: "Koenigsegg Group's unique combination of innovation, entrepreneurial spirit and financial strength... made it the right choice for Saab as well as for General Motors".
GM revamp
The statement from GM did not say how much is being paid for the unit, but the sale is expected to be completed by the end of September.
GM said it would continue to provide technology to Saab "during a defined time period".
GM currently has bankruptcy protection in the US and is slimming down its range of brands as it tries to regain profitability.
The Swedish government has been keen to avoid bailing out its carmakers as long as they are owned by US parent companies.
Joran Hagglund, state secretary for Sweden's industry ministry, said the financing had not yet been finalised.
"We do not yet know if Koenigsegg Group will need loan guarantees or not," he said.
GM bought half of Saab in 1989 and the rest of it in 2000.
Koenigsegg was founded 16 years ago by Christian Koenigsegg, and its principal backer is the Norwegian industrial designer Baard Eker. Its cars sell for about £900,000 each.
Renault boss defends state help
In a BBC World Service interview, Carlos Ghosn denied that taxpayers were propping up weak carmakers who should be allowed to fail.
Banks had stopped giving the industry the funds it needed, he told the Business Daily programme.
Mr Ghosn insisted that government support was to help the industry's 12 million workers not its shareholders.
Difficult transition
In Europe, the motor industry is getting two types of government help; easier financing and money to encourage motorists to scrap their old cars and buy new ones instead.
Carlos Ghosn is president and chief executive of Renault in France and Nissan in Japan, which he famously shook up and turned around.
He is also head of the organisation which represents all the companies that make cars in Europe - from Audi to Volkswagen.
He maintained that most markets had reached the bottom of their decline, aided by scrappage schemes and other incentives which he supports.
"What is being done by most European governments today is being seen favourably by the industry," he said.
Mr Ghosn admitted however, that the financial support will eventually have to cease and wants to see the transition from a scrappage system be as smooth as possible.
Taxing dilemma
Some have argued that businesses who cannot sell their goods and services go under and carmakers should not be any different. Mr Ghosn disagreed.
"The motor industry in Europe represents 12 million workers - 6% of the active working population of Europe," Mr Ghosn asserted.
"Nobody can just sit on the side while this industry as a whole is struggling," he added.
Critics however, have said there are too many car companies and that taxpayers' money helps hold up the restructuring which needs to happen.
"What is being done today is not to support the weak members of the car industry. It's being done to support all the car industry," Mr Ghosn insisted.
He realises that he could face a politically difficult task. Peugeot, Fiat and BMW are led by rich families.
"This is not about protecting shareholders, but about protecting employment," he said.
At Nissan, Carlos Ghosn managed to improve its fortunes without asking the Japanese government for money. But he said that was not currently possible in Europe.
"Due to the financial turmoil we are not able to raise cash from the banks which usually provide liquidity to the industry," he said.
"So we have asked the governments to provide a substitute."
SMMT and Parker's in scrap over scrappage
In a report on its website entitled 'Buyers fail to save under the scrappage scheme due to increased finance offers' Parker's said it had "found a number of examples from different manufacturers where the buyer will end up paying more than the original list price by the time their finance agreement comes to an end." High APR rates Terse rebuttal "In some cases, where manufacturer profit margins are low, they are not able to offer additional incentives which may still be available on non-scrappage models and this may be reflected in the finance arrangements," he said. "The very nature of purchasing goods on credit means that any consumer will ultimately pay a higher price for that product." Lack of clarity "The Parker's report does not allow for an open and fair comparison of scrappage and non-scrappage purchases." Parker's response "Our aim is to highlight that the government has made it more difficult for manufacturers to make a success of the scheme by requiring match-funding," said Parker's editor Kieren Puffet. DATED: 16.06.09 FEED: MT |
Fiat closes Chrysler deal
Chrysler Group and Fiat Group have finalised the details of their global strategic alliance under Fiat boss Sergio Marchionne. Fiat has a 20 per cent stake in the new Chrysler operation, which will rise to 35 per cent once agreed milestones are achieved. Shareholders Other shareholders include the United Auto Workers Retiree Medical Benefits Trust (55 per cent) and the US (8 per cent) and Canadian (2 per cent) governments. "Significant day" "From the very beginning, we have been adamant that this alliance must be a constructive and an important step towards solving the problems impacting our industry. We now look forward to establishing a new paradigm for how automotive companies can operate profitably going forward," he said. Fine detail Chrysler will also have access to Fiat's international distribution network, with particular focus on Latin America and Russia. DATED: 16.06.09 FEED: MT |
60,000 take up car scrappage cash
More than 60,000 orders for cars under the UK's scrappage subsidy scheme have been placed since the initiative was announced, new government figures show.
Car buyers are given a £2,000 discount on a new car if they scrap one that is at least 10 years old.
Business Secretary Lord Mandelson said the scheme had given the carmaking industry the boost it needed.
The scrappage scheme was announced at the end of April and the latest figures cover orders from then until 7 June.
Lord Mandelson said: "Consumers know a good deal when they see one. These figures speak for themselves."
The scheme will run until March 2010 and to benefit from it, a buyer must have been the registered keeper, for at least 12 months, of the car that is due to be scrapped.
Half the scheme's cash will be paid for by the government, with manufacturers contributing the rest.
The government has set aside £300m to pay for the scheme, which could benefit up to 300,000 customers.
A similar scheme was introduced in Germany earlier this year.
UK Benefits?
There have been criticisms that the UK scheme is merely helping to bail out troubled car makers from Europe, the US and East Asia.
But the chief executive of the UK's Society of Motor Manufacturers and Traders (SMMT), Paul Everitt, said: "The benefits of this scheme go beyond imported vehicles, and help and sustain jobs in our sector."
He said the SMMT would be watching closely over the next few months to see how much of the government pool of money was being taken up by consumers.
Only then would the SMMT decide whether to ask for an extension of the scheme or not.
Fiat could still take the driving seat at GM
The deal to sell the European arm of General Motors faces the risk of collapse, thereby opening the door once again for Fiat.
Insiders have hinted at a 'cooling' towards GM's preferred bidder, Canadian car parts firm, Magna International.
It means weeks of more uncertainty for 5,000 British workers at Vauxhall, which is owned by GM.
Officials in Germany, where the bulk of GM's European operations are based, have revealed that the door remains open for Fiat, which was once thought to be in the driving seat to acquire GM Europe, and for Chinese companies.
German Economy Minister Karl-Theodor zu Guttenberg says his officials were still talking to potential investors in Vauxhall and Opel which have not yet been made public.
He said: "We are still in contact with other investors." It is understood that China's fifth largest carmaker, BAIC, is in the running alongside Fiat and another unnamed Chinese investor.
UK Government officials are due to meet Magna executives in London this week.
Former Phones4U chief interested in LDV
Former Phones4U chief John Cauldwell has said he has a "small amount of interest" in buying the troubled vanmaker LDV.
Cauldwell said he would only get involved if he thought the business case was commercially viable.
The Staffordshire businessman told the BBC: "We're looking for some basic information.
"If that basic information gives me a reason to believe that there is a business model there, or could be a business model there, then I may well get involved.
He added: "But I should really stress that at this stage most businesses that I look at... end up having no appeal to me at all."
Eight hundred and fifty LDV staff heard last Monday most would lose the jobs after the Russian owners said they could not save the van company. A staff of 40 have been kept on at LDV's Birmingham factory for the time being to maintain it.
DATED: 16.06.09
FEED: AM
GM agrees Saab sale to Koenigsegg
General Motors has reached a tentative agreement to sell Saab to the Swedish sports car manufacturer Koenigsegg.
GM said that as part of the deal there would be $600m (£367m) of funding from the European Investment Bank (EIB), guaranteed by the Swedish government.
It is the latest part of GM's reorganisation, which is also set to see the Opel and Vauxhall brands going to Canada's Magna.
Saab filed for reorganisation under Swedish law on 20 February.
Koenigsegg produces 18 cars a year and employs 45 people and there has been some doubt as to whether it has the expertise to run Saab, which sold 93,000 cars in 2008.
But GM Europe's president Carl-Peter Forster said: "Koenigsegg Group's unique combination of innovation, entrepreneurial spirit and financial strength... made it the right choice for Saab as well as for General Motors".
GM revamp
The statement from GM did not say how much is being paid for the unit. The sale is expected to be completed by the end of September.
 Koenigsegg specialises in the luxury end of the car market |
GM said it would continue to provide technology to Saab "during a defined time period".
GM currently has bankruptcy protection in the US and is slimming down its range of brands as it tries to regain profitability.
Saab employs about 3,400 people in Sweden and about 12,000 other jobs in the country are dependent on Saab and its suppliers.
The Swedish government has been keen to avoid bailing out its carmakers as long as they are owned by US parent companies.
DATED: 16.06.09
FEED: BBC
Monday, June 15, 2009
GM's Andersson to steer Russia's GAZ
