Honda volunteers to transfer hybrid vehicle technology to China

[cir]

Honda Hybrid Motor

In a dramatic display of China's market power, Honda has voluntarily agreed to transfer its hybrid vehicle technology to Chinese auto manufacturers. This is the expected result from a classic monopsony situation.

In effect, there is only one "buyer." China is the world's largest car market with 18.51 million units sold in 2011 (see Top 10 bestselling cars in China in 2011 - China.org.cn).

If Honda cannot gain a significant share of the Chinese car market then it will always be a minor car manufacturer. To ensure a significant presence in the Chinese car market, Honda has exchanged its hybrid vehicle technology for Chinese market share. This is a win-win for Honda and China.

Now, some of you may recall the ridiculous debate last year in the United States Senate about prohibiting the transfer of electric car technology to China. Guess what? China has no need for U.S. electric vehicle technology. Your silly fears are unwarranted. There are plenty of companies dying to transfer technology to China.

Honda Breaks Ranks to Secure China's Huge Potential Ecocar Market--Will Transfer Proprietary HV Technology - Forbes

"Honda Breaks Ranks to Secure China's Huge Potential Ecocar Market--Will Transfer Proprietary HV Technology

by Stephen Harner

4/22/2012

A key theme—and contention–of "Whither Japan" is that Japan's future is inevitably and also beneficially one of increasing economic, political, and even social integration within an Asian region dominated by China. Nothing illustrates this theme more tellingly than Japanese corporations' growing investments in manufacturing plants in neighboring Asian countries, particularly China, and, above all, transfers of strategically vital, leading-edge proprietary technologies to these operations.

For news of one such transfer we need only open today's Nihon Keizai Shimbun and read an article about Honda Motor Corporation (NYSE: HMC). The article, datelined Beijing, reports that Honda has decided to transfer its basic hybrid vehicle (HV) technology, not just to its joint-venture partner Dong Feng Motors, but also to other China auto manufacturers.

Honda is seeking to stake out a dominant position—ahead of U.S. and European competitors–in what it forecasts to be a huge future market, perhaps the world's largest market, for environmentally-friendly "ecocars."

This is a bold, probably unprecedented, move, certain to excite high anxiety and criticism within Japan. Hesitation and restraint by Japanese corporations toward investing in China, of promoting Chinese to senior management positions in Chinese subsidiaries—and even of hiring or training Chinese staff in Japan– has been due to fears of theft and copying of the corporation's key proprietary technologies. What Honda's move demonstrates is that what has become accepted as inevitable in other industries is no longer avoidable in the automobile industry, i.e., that a strictly defensive strategy in technology transfers is unlikely to succeed, and even if successful offers limited upside return potential.

In this judgment, and in its "must-win" assessment of the China market, Honda is not alone among Japanese auto majors. Toyota Motor (NYSE: TM) has plans to assemble hybrid vehicles and to make batteries and other critical HV components in China that will indigenize production.

Here we see two of the world's leading makers of ecocars making major, strategic commitments to the China market involving unprecedented leading edge technology transfer. Not to be missed is the assessment that China, rather than the U.S., Japan, or Europe is likely to become the largest and most dynamic ecocar market in the world, and to achieve this distinction faster than anywhere else.

All three Japanese auto makers are already major players in China as the cart to the left (from the April 22 Nikkei article) shows. In the top panel we see Nissan having pulled ahead of Toyota, selling almost one million units last year, while Honda's sales were flat YOY at about 600,000 units. The bottom panel show total world unit auto sales and the growing share of China. Domestic sales in China last year: 18,510,000 units, up 2.5 percent YOY.

Honda's proprietary HV technology, called IMA, packages an electric motor and battery that boost start up and acceleration of a gasoline engine. The motor and battery are easily retrofitted onto a gasoline engine car, and are being so installed in Civic and Accord sedans, as well as the Fit minicar. These HV models have sold an aggregate 800,000 units in the U.S. and Europe.

They were all manufactured in Japan. This year there will be a new Honda HV model emerging from China. And not just a new model of cars, but a new model of integrating business between Japan and China, this year and for the future."

[Note: Picture and caption source at How a Hybrid Motor and Transmission Works - 2CarPros]

 

[cir]

Honda to build third production line in China

ABR Staff Writer

Published 24 April 2012

Honda Motor's Chinese joint venture Guangqi Honda Automobile (GHAC) is planning to build a third production line at its ZengCheng plant in Guangzhou, Guangdong, China.

Construction of the third line which will start at the end of 2012 is expected to commence production in 2014 with capacity to produce 120,000 units per year and further double the capacity in future.

The company will also build a new engine plant for the third line, bringing its total investment in the dual construction work to RMB3.56bn ($564m).

With the new line the company aims to increase its output capacity in the country to 1.01 million units from the current 770,000 units.

In addition, Dongfeng Honda Automobile another Chinese JV of Honda is scheduled to start production at its newly built second plant in July 2012, increasing the company's annual production capacity to 360,000 units by next year.

Honda to build third production line in China - Automotive Business Review

 

[cir]

April 23, 2012, 1:09 p.m. ET

Renault to Build Cars in China With Dongfeng

By DAVID PEARSON

PARIS—Renault SA RNO.FR -5.06%said it signed a memorandum of understanding to make cars in China with Chinese partner Dongfeng Automobile Co. 600006.SH -1.96%

The French auto maker hopes to complete an agreement with Dongfeng this year and the partners envision starting operations between 2013 and 2016, a Renault spokeswoman said Monday.

Renault sold 24,100 cars in China last year. They represented a tiny fraction of the booming Chinese market but an increase of 60% from the year before. All were imported. Renault is one of the last global car makers to establish an industrial presence in China, although its partner Nissan Motor Co. 7201.TO -0.60%has been making cars with Dongfeng for several years.

Renault said it plans to more than double its 80 Chinese dealerships over the next two years.

Renault on Monday also took the wraps off a new upmarket sedan, the Talisman. Based on the SM7 sedan made by Renault's South Korean subsidiary Renault Samsung Motors, the Talisman will be exported to China starting midyear with a base price of 318,800 yuan or about $50,000.

The Talisman's introduction in China "underlines the importance Renault attaches to the Chinese market and our confidence in growth here," Renault Chief Executive Carlos Ghosn said.

Renault to Build Cars in China With Dongfeng - WSJ.com

 

[nitesh]

Companies are so afraid of theft, that better give away the tech and earn money from royalty, but don't know this will work. Chinese will simply make clones which they will claim don't use the same tech, not a good move.

 

[cir]

Apr 22, 2012

Nissan's Infiniti opening Chinese factory

Luxury-car maker Infiniti says it will make vehicles in China for the first time starting in 2014, joining a rush by global automakers to expand production in the world's biggest auto market even as sales growth fades, the Associated Press reports.

Says the AP:

Infiniti, owned by Nissan, said two of its models will be produced in factories run by Nissan and its Chinese joint-venture partner. It will be Infiniti's first production outside Japan.

"For the brand to reach its aggressive sales target of 500,000 units by 2016, local production in the world's largest automobile market is not an option but a necessity to our success," Andy Palmer, executive vice president of the Global Infiniti & Luxury Business Unit, said in a statement.

Growth in China's vehicle sales plunged from an eye-popping 35% in 2010 to just 2.5% last year as the economy slowed:

That is forecast to rebound to about 5% this year -- stronger than the U.S. or Europe but a challenge for automakers that added new assembly lines during the boom, leading to a glut of inventory.

Automakers expect to continue benefiting from Chinese preferences for foreign car brands. They also say the market will get much bigger in the years ahead as car ownership is still at low levels.

Infiniti's announcement came as automakers gear up for next week's Beijing auto show, a platform for Chinese and global brands.

Manufacturers plan a series of global premieres at the show and are bringing SUVs and luxury sedans designed for Chinese buyers.

Infiniti says it will unveil an M35hL sedan designed for Chinese businesspeople and government officials with an extended back seat and a gas-electric hybrid power.

Also this week, Ford announced it will build a $760 million auto assembly plant in the eastern city of Hangzhou, part of plans to double its Chinese production capacity to 1.2 million vehicles a year.

Nissan's Infiniti opening Chinese factory

 

[cir]

Ford says to build new, multi-million plant in China

23 Apr 2012 11:38

SHANGHAI: US auto giant Ford said on Thursday (19 April 2012) it would build a US$760-million plant in China's eastern city of Hangzhou, as foreign companies ramp up output in the world's biggest car market.

Ford and its Chinese joint venture will build the assembly plant in a bid to double annual production capacity in China to 1.2 million passenger cars after the factory opens in 2015, Ford said in a statement.

"The Chinese auto market remains one of the most vibrant in the world," Dave Schoch, chairman of Ford China, said in the statement. As the world's largest auto market, China has become increasingly important to foreign players. China's vehicle sales rose an annual 2.5 percent to 18.51 million units in 2011.

But growth in the market has been slowing after the government rolled back sales incentives and some cities imposed tough restrictions on car numbers to ease chronic traffic congestion and pollution. Ford has based most of its China operations in the southwestern megacity of Chongqing, where it has two assembly plants. The US company also has plant in the eastern city of Nanjing.

The US car maker had previously announced plans to bring 15 new vehicles to China by 2015. The new plant will bring Ford's total investment in China to $4.9 billion, the statement said.

The auto giant said the latest investment was part of its largest expansion in 50 years and would help the company boost global sales by about 50 percent from 2010 to eight million vehicles annually, the statement said.

The announcement comes ahead of the China auto show, a key industry event, which starts in Beijing next week.

Ford says to build new, multi-million plant in China

 

[cir]

The Associated Press

April 23, 2012, 08:03AM ET

VW to build new factory in China's far west

BERLIN

Automaker Volkswagen AG has signed an agreement to build a new factory in China's far west during a visit to its headquarters by Chinese Premier Wen Jiabao.

Volkswagen said the agreement signed Monday by chief executive Martin Winterkorn and representatives of China's SAIC Motor Corp. foresees total investment of about (EURO)170 million ($224 million).

It says the plant in Urumqi, the capital of the Xinjiang region, should produce up to 50,000 vehicles a year starting in 2015.

Volkswagen says it also signed a memorandum of understanding with its other Chinese joint-venture partner, China First Automobile Group, to extend their cooperation by 25 years.

Wen visited Volkswagen's Wolfsburg headquarters with German Chancellor Angela Merkel.

VW to build new factory in China's far west - BusinessWeek

 

[cir]

April 24, 2012

GM guages Chinese market's acceptance of electric cars; plans to open 600 dealerships

By Alisa Priddle

GM plans to open 600 dealerships in China this year and nearly double production capacity despite a slowdown in sales growth, chairman Dan Akerson said Monday at the Beijing Auto Show.

China is the world's biggest auto market by vehicles sold, but sales growth slowed from 35% in 2010 to just 2% in the latest quarter. Demand has been blunted by government credit and investment controls aimed at slowing an overheated economy.

"We fundamentally believe in the strength of the Chinese market," Akerson said today.

GM will expand its dealership network from 2,900 last year to 3,500 by the end of this year, Akerson told reporters.

GM also plans to boost its production capacity in China to 5 million cars a year by 2016, Akerson said. That would be nearly double the 2.55 million cars and trucks GM and its Chinese partners sold in China last year.

The company's luxury Cadillac unit plans to introduce one new model a year in China, said Joseph Liu, executive vice president of GM China. He said the unit hopes to raise annual sales from 30,000 last year to 100,000 by 2016.

For this year, it will be the all-new XTS sedan, and GM announced Monday it produce the model in China.

Asked by a reporter whether GM would set up a dedicated factory to produce Cadillacs in China instead of sharing production with other GM models, Akerson said, "yes," but gave no details.

GM expects to complete a deal to restructure its venture with its main Chinese partner and restore a 50-50 shareholding balance "in the near term," Akerson said.

The American auto giant sold Shanghai Automotive Industries Corp. 1 percent of their venture in 2009 before going through a restructuring in U.S. bankruptcy court. That gave SAIC a controlling 51 percent stake and the right to record the venture's revenues on its own books.

GM says the latest deal calls for the two sides to create an operating unit that will be owned 50-50. A separate sales unit will be created, with SAIC holding 51 percent, allowing it to continue recording sales revenue on its own books.

Akerson declined to say what GM was paying to recover equal ownership. The company said in 2009 the 1 percent stake sold then was valued at $85 million.

GM also showed it next vision of an electric pod on wheels at a dinner following the first press day of the auto show.


The picture of the Chevrolet EN-V 2.0 is the latest version of two-passenger concept that is many years from being a reality.

The original concept was shown at the Shanghai auto show in 2010.

Kevin Wale, president of the GM China Group, called the EN-V 2.0 "a more practical design" with climate control and some storage space.

He said the 2-passenger pod will be used in pilot projects in China to gauge reaction to the electric vehicle with full telematics and wireless internet connections.

EN-V stands for Electric Networked Vehicle. It has a modular architecture so its technology can be incorporated into future vehicles, Wale said.

On a more practical note, GM started selling the Chevrolet Volt in China last month and it is being used to gauge market acceptance of electric cars, said CEO Dan Akerson.

GM officials say they are still on track to sell 5 million vehicles annually in China by 2016. The automaker sold 2.55 million vehicles to Chinese buyers in 2011 and had a record first quarter to start this year.

GM guages Chinese market's acceptance of electric cars; plans to open 600 dealerships | Detroit Free Press | freep.com

 

[cir]

Ford hopes to gain ground in China with SUVs

9:41 AM, April 23, 2012

Ford's China strategy is based on four new SUVs, as that segment gains traction in the world's largest auto market, and it will build at least two of them locally.

The Dearborn-based automaker wants the growing middle class in China and millions of first-time buyers to think of Ford when they are buy their first utility vehicle.

Ford built its brand on trucks and SUVs in North America, but it has worked to rebuild its car lineup to get Americans to think of Ford as a passenger car manufacturer.

Ford plans to introduce 15 new vehicles for China by 2015. The heavy emphasis on utility vehicles aims to tap into a segment that Ford projects will grow by more than 10% annually. The vehicles accommodate families and are engineered to navigate poor roads outside China's major cities.

Ford hopes to gain ground in China with SUVs | Detroit Free Press | freep.com

 

[cir]

April 23, 2012 4:55 pm

Volvo to expand offering in China

By John Reed in Beijing


High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. Volvo to expand offering in China - FT.com


Volvo Cars will launch 10 models in China over the next five years as it seeks to make up for lost time in the world's largest car market, its chief executive said.

The Swedish carmaker, which is owned by Chinese carmaker Geely, today offers six models in China and will add the new ones after opening two car plants and an engine plant in the country.


High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. Volvo to expand offering in China - FT.com


"In the year 2017 we will offer 10 additional new models in the Chinese market," Stefan Jacoby, Volvo chief executive, said at the Beijing auto show.

Because some of the cars in Volvo's line-up would be retired by then, the number of models offered would be less than 16, he said. The new models would mostly come from the brand's global cars portfolio, but some would be tailored for the Chinese market, Volvo said.

The comments confirmed remarks made by Li Shufu, chairman of Geely and Volvo, at the weekend.

Despite its Chinese owners, Volvo trails behind most of its competitors in a market now viewed by the industry as indispensable.

The Swedish brand produces its S80L long wheelbase saloon car in China in a joint venture with local producer Chang'an and Ford Motor, its former owner.

Volvo now aims to open its first car plant in the second half of 2013 in the interior city of Chengdu, which will make small and midsize cars. The plant's first model will be an upper-midsize "C/D" segment car, he said.

A second plant making larger cars will be opened two years later in Daqing, north-west China, Mr Jacoby said. The company will build an engine plant in Zhangjiakou, near Beijing, he said.

Volvo to expand offering in China - FT.com

 

[Oracle]

Companies are so afraid of theft, that better give away the tech and earn money from royalty, but don't know this will work. Chinese will simply make clones which they will claim don't use the same tech, not a good move.