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End of the road for Chevrolet in Europe
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Lots of minicab drivers will miss Chevrolet
Loads buy ex Motabilty Chevrolets as they have a choice of estates with autoboxes for stupid money
You could see the Vauxhall dna in the interior of the Lacetti0 -
Deleted_User wrote: »RIP Chevy Matiz
Really? :eek: More like good riddance to the matiz. A family member had one of those and it was nothing but bother. They got it new and didn't even keep it for a year.0 -
Outsourcing isn't anything new, however, it is much cheaper now than a decade ago. You no longer have to pay a fortune for engineering work to some German company, you can have this work done for a fraction of £ in China/Taiwan, etc. 10 years ago there was no such option.How are the barriers to entry very low? Outsourcing work is not new, it's been going on for decades, but if you can go out and buy all the bits you need, then so can everyone else.
China has huge automotive supply chain. MK7 VW Golf is almost 15% Chinese (one of their joint venture partners is making 1.4TSi knock-offs and VW can't do anything about it). French build PSA are around 5-10% China (Dongfeng Peugeot-Citroën Automobile Limited).A factory is only the start, the automotive industry has a huge supply chain. Perhaps more complex than most.
Before eg. Ford can build any new factories in China, or any other cheap labour country, they have to shut their old under-utilised factories. And they just can't afford that. 2 years ago Ford decided to close their Belgium plant (assembling Mondeos) - their final redundancy package cost? $750 million, and that is for redundancy packages only and does not include the cost of demolishing and fixing the environmental damage.Ford had a plan at one time to become a 'virtual' manufacturer, outsourcing all production. That got shut down before anything became of it.
Most old school manufacturers are the same.
New startup don't have any of these costs.
Dealer network startup costs are relatively small. A manufacturer simply needs a product that is likely to sell in large numbers (like the Qoros above) - that's how Kia and Hyundai started selling in the US and Europe. Then all potential dealers sign up and commit to certain sales, service, spare parts targets, and they pay for all site branding, workshop equipment, furniture etc. The manufacturer commits to supply cars and to spend a certain % on marketing.I think you also underestimate the challenges of a brand and network. Look at Lexus. How long has it taken Toyota to establish that brand, which in Europe, still isn't where I expect they'd like it to be.
Lexus? Yes, they are struggling, but they are trying to compete with BMW and Merc.
On the other hand Kia and Hyundai didn't get the memo and are doing very well now. Same with Tesla (number 1 selling car in Norway, above VW Golf, almost no traditional marketing - almost all online marketing)."Retail is for suckers"
Cosmo Kramer0 -
What does this mean for UK owners of the Chevrolet cars? Will this impact on spare parts, repair prices, or second hand values?Emergency savings: 4600
0% Credit card: 1965.000 -
Vauxhall will continue distributing Chev parts."Retail is for suckers"
Cosmo Kramer0 -
It not really outsourcing, the likes of AVL, Ricardo, FEV are consultants, they're not cheap and just like tier 1 suppliers it's a small group of global players. Consultants aren't engaged for low cost, they're hired because either the manufacturer doesn't have the expertise themselves, they have it but resources are tied up in higher priority stuff, or for low-volume/specialist things. Similarly, you don't go buy what you need from suppliers, you work with them to develop what you want. If you don't you get the existing, old technology which leaves you with uncompetitive, non-differentiated products.Outsourcing isn't anything new, however, it is much cheaper now than a decade ago. You no longer have to pay a fortune for engineering work to some German company, you can have this work done for a fraction of £ in China/Taiwan, etc. 10 years ago there was no such option.
Ford didn't close the Belgium plant to open one in China instead. Mondeo buyers have migrated to smaller cars or to more premium brands. There has been overcapacity in Europe for a while, older plants have to shut, but investments are being made in Europe, further East.Before eg. Ford can build any new factories in China, or any other cheap labour country, they have to shut their old under-utilised factories. And they just can't afford that. 2 years ago Ford decided to close their Belgium plant (assembling Mondeos)
I still disagree. Many brands have come and gone. Existing dealerships and chains will not ditch their profitable franchises or invest in an unknown, unestablished brand. The dealers that take on new brands, tend to be minor independents and used cars dealers looking to go up. Look at say Proton, Perodua, etc. dealers. That leaves patchy coverage and lower profile locations. People will travel far for e.g. Lamborghini dealers, but not for budget brands. Only once a brand is more established will bigger players take them on with corresponding prime locations.Dealer network startup costs are relatively small. A manufacturer simply needs a product that is likely to sell in large numbers (like the Qoros above) - that's how Kia and Hyundai started selling in the US and Europe. Then all potential dealers sign up and commit to certain sales, service, spare parts targets, and they pay for all site branding, workshop equipment, furniture etc. The manufacturer commits to supply cars and to spend a certain % on marketing.
I don't see why you dismiss this. After around 23 years, Lexus hasn't comprehensively challenged BMW and Merc in Europe, even with the might of Toyota behind it. Why do you think the Chinese would be able to do better lower down the marketplace any quicker?Lexus? Yes, they are struggling, but they are trying to compete with BMW and Merc.
The memo wasn't sent via email, Telex maybe. Hyundai has been in the US since around 1986, Europe since around 1991. They have of course continually improved and are recently finding their own identity and brand, but they still aren't mainstream, mass market competitors yet. If the Chinese can swoop in so much quicker, then surely they themselves will be vulnerable by the next rising producers?On the other hand Kia and Hyundai didn't get the memo and are doing very well now.
Anything regarding Tesla warrants closer scrutiny - http://www.teslamotors.com/it_CH/forum/forums/tesla-model-s-bestselling-car-norway. Sure enough, it appears this is skewed by a) big subsidies and b) three years+ worth of orders being delivered at once. The former is not sustainable, the latter a one off event. Tesla is an interesting niche, whether it can manage to roll out to a larger customer base is yet to be demonstrated.Same with Tesla (number 1 selling car in Norway, above VW Golf, almost no traditional marketing - almost all online marketing).
The automotive industry is not fertile ground for start ups, it's a tough, mature industry. I think people's ideas of business and what's possible have been misled by Google, Facebook and co. But what's happening with the web is just the same as what happened with the burgeoning car, oil, etc. industries.New startup don't have any of these costs.
The Japanese entered Europe competing head on, arguably they haven't fully succeeded yet, recently they seem to have lost their way a bit. Europe isn't leaving the budget end undefended e.g. Dacia, a new budget brand from VW coming, etc.
In the US where the Japanese have done very well they entered in a different way, they took on the segments where US manufacturers didn't bother to compete, that then repeated to the next segment up and so on. The US makers have been fighting back, the Koreans are in that mix too, that's where the Chinese will have to compete too, but lessons will have been learnt by all.
The Japanese rose faster but have bumped into high costs, ageing population, etc. quicker, the Koreans quicker still, the Chinese will hit the same kinds of problems sooner too. There's been a lot of talk recently of China developing too late and it's ageing population limiting its ability to escape middle-income.
It's not plain sailing in China either, the industry is fragmented, the government is pushing for consolidation, there is likely overcapacity - http://online.wsj.com/news/articles/SB10001424127887323361804578388440921474834. Pollution is a big problem, that will have costs for industry (or society). What might happen there politically or economically over the next 5/10/15 years?
Just as Tesla has no doubt been helped by the Elon Musk/paypal/Silicon valley reputation, the Chinese may well be hindered by the perceptions of spying/hacking, toxic products (lead paints on toys, fake baby milk), bad crashworthiness of other cars, etc. Things which the Koreans and Japanese weren't burdened with.0 -
That's right. That's exactly why the likes of Getrag, Valeo, Schaeffler and ZF are in China now, and in fact majority of their products are now manufactured in China (a 3rd of of every VAG DSG transmission components come from there) - China is where the action and money are now.Similarly, you don't go buy what you need from suppliers, you work with them to develop what you want. If you don't you get the existing, old technology which leaves you with uncompetitive, non-differentiated products.
Ford doesn't need any more factories, they have huge over capacity. And besides, you can't just open an automotive factory in China without a local partner.Ford didn't close the Belgium plant to open one in China instead. Mondeo buyers have migrated to smaller cars or to more premium brands. There has been overcapacity in Europe for a while, older plants have to shut, but investments are being made in Europe, further East.
This is exactly what they used to say about Kia/Hyundai.I still disagree. Many brands have come and gone. Existing dealerships and chains will not ditch their profitable franchises or invest in an unknown, unestablished brand. The dealers that take on new brands, tend to be minor independents and used cars dealers looking to go up. Look at say Proton, Perodua, etc. dealers. That leaves patchy coverage and lower profile locations. People will travel far for e.g. Lamborghini dealers, but not for budget brands. Only once a brand is more established will bigger players take them on with corresponding prime locations.
Because this is the only market niche the Chinese can compete in, they are not even trying to compete with the established luxury brands. And budget cars is the fastest growing market segment. Luxury cars are doing fine, it is mainly the middle segment that is suffering the most at the moment.I don't see why you dismiss this. After around 23 years, Lexus hasn't comprehensively challenged BMW and Merc in Europe, even with the might of Toyota behind it. Why do you think the Chinese would be able to do better lower down the marketplace any quicker?
What is mainstream for you then? Is e.g.. Renault mainstream? Renault are now the 9th biggest automaker by production in the world, Hyundai M/G are the 5th.The memo wasn't sent via email, Telex maybe. Hyundai has been in the US since around 1986, Europe since around 1991. They have of course continually improved and are recently finding their own identity and brand, but they still aren't mainstream, mass market competitors yet. If the Chinese can swoop in so much quicker, then surely they themselves will be vulnerable by the next rising producers?
Well, at this stage Tesla is a niche. But electric is the future. In 20 years time most vehicles will be electric and that will simplify the car considerably - the barriers to entry will be even lower. You'll be able to get a "skateboard" drivetrain chassis (with electric motors, suspension and batteries) imported from China, or wherever, and then you put whatever body you want on top of that. Or maybe even 3D print it. A 2025 electric Citroen DS? No problem....Tesla is an interesting niche, whether it can manage to roll out to a larger customer base is yet to be demonstrated.
Electric powertrains and 3D printing are the 2 new disruptive technologies that will reshape the automotive industry very soon.It's not plain sailing in China either, the industry is fragmented, the government is pushing for consolidation, there is likely overcapacity
But at least they don't bleed red ink like the old established players. IMHO they will have it easier to expand than the likes of Kia/Hyundai.
The likes of Renault/Nissan/VW know this well and they are introducing their own budget brands: Dacia and Datsun. Not sure about VW: Trabant?
Just read about the Qoros car above: 5-star NCAP, German developed power train (so nobody can accuse them of spying), German Auto-Motor-und-Sport compares its refinement and driving dynamics to MK5/MK6 Golf.Just as Tesla has no doubt been helped by the Elon Musk/paypal/Silicon valley reputation, the Chinese may well be hindered by the perceptions of spying/hacking, toxic products (lead paints on toys, fake baby milk), bad crashworthiness of other cars, etc. Things which the Koreans and Japanese weren't burdened with.
This is just the beginning.
They already have access to all the latest technology - all major automotive suppliers, and their R&D centres, are already there in China to help them."Retail is for suckers"
Cosmo Kramer0 -
Just to lob another grenade into this debate, factories are difficult to shut down in Europe, the big players have too much capacity and want to shed it but unions and social contracts mean this is expensive and difficult. The far east with their communist overlords and shocking labour practices are currently (cheaply) filling an export niche and are now swinging over to create more products for their own, newly created, middle-classes.0
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I'm surprised. I thought they were selling well.0
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They're also in India, Brazil and anywhere else there is sufficient business.That's exactly why the likes of Getrag, Valeo, Schaeffler and ZF are in China now, and in fact majority of their products are now manufactured in China
Hyundai have done well, they are very profitable and they do have big production. But in terms of revenue and market cap they are quite a way down in 9th or so. Also as mentioned, they've been in Europe 20+ years, US almost 30. In that time, they haven't dominated either region or put anyone out of business. China doesn't have that long. They've developed very fast, but that also means they face the problems of that development sooner.This is exactly what they used to say about Kia/Hyundai. Because this is the only market niche the Chinese can compete in, they are not even trying to compete with the established luxury brands. And budget cars is the fastest growing market segment. Renault are now the 9th biggest automaker by production in the world, Hyundai M/G are the 5th.
That's a whole new discussion, but how will we charge them all? - http://www.telegraph.co.uk/finance/newsbysector/energy/10504464/Britain-faces-blackouts-next-winter-energy-boss-warns.htmlWell, at this stage Tesla is a niche. But electric is the future.
You've mentioned where China is, but you haven't addressed any of the issues they face. They have domestic industry challenges. Economic reforms are being introduced, at some point the currency will have to appreciate, global shipping rates are subdued, they'll likely rise with any upturn, pollution needs to be tackled, that needs investment. All of these things, and more, will add costs. Cheap, budget cars have small margins, how much cost increase can they sustain before they become loss-making or uncompetitive? Or do you expect them to invest in big factories abroad without a customer base?But at least they don't bleed red ink like the old established players. IMHO they will have it easier to expand than the likes of Kia/Hyundai.
The Koreans did not get where they are themselves either. They've produced a lot of vehicles under licence, they have and do extensively use consultants and suppliers. Farming out to different specialists does not guarantee good integration, quality, etc. and it certainly doesn't guarantee desirability or sales. A good product alone is not sufficient (maybe not even necessary, western manufacturers have produced enough junk).Just read about the Qoros car above: 5-star NCAP, German developed power train (so nobody can accuse them of spying), German Auto-Motor-und-Sport compares its refinement and driving dynamics to MK5/MK6 Golf. They already have access to all the latest technology - all major automotive suppliers, and their R&D centres, are already there in China to help them.
Trabant would be good! Bet it's too risky though. VW must own NSU and load of other dead brand names, or start up a new one.Not sure about VW: Trabant?0
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