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China's largest dealer body pushes back against foreign automakers over huge inventories

Do not think for a second that automakers forcing inventory on dealers in order to pad the numbers is a ruse known only in the US. Stories of individual brands have hinted at the trouble Chinese dealerships are having trying to move units as the country's economic growth remains hot but comes off the boil, like the one revealing that 95 percent of Toyota-FAW showrooms are losing money. Yet Toyota isn't the only culprit, and the issue has become so dire that the China Automobile Dealers Association (CADA), the largest dealer body in the country, has written to the government to complain. Chinese car sales are expected to close out the year with an annualized growth of six-percent, down from last year's 14 percent when targets were set, while in the background the pace of overall economic expansion is the slowest its been since the early nineties. Automakers, shipping cars on schedule to make their earlier targets, have blown up inventories such that they are an average of 1.8 times monthly sales, when the preferred multiplier is from 0.9 to 1.2. According to the CADA, the price wars and necessary incentives mean that only 30 percent of dealers are operating in the black. That number is down a whopping forty percent since 2010. In response, Toyota has already said it will not make its 2014 target of 1.1 million cars sold. We're a long way from 2012, when Toyota planned on selling 1.8 million cars in China in 2015, a target that's now as realistic as a manticore. BMW, Honda and Nissan have erased numbers on their spreadsheets, too; BMW growth dropped from 20 percent to 8 percent midyear after it began "reducing wholesale supplies," and Honda has been reworking its plans as sales have decreased each of the past six months. It's a big deal for Chinese dealers to begin protesting publicly, the CADA saying, "In the past, dealers were angry, but dared not speak out. But now, they have to shout because the situation is getting so unbearable." With six-percent growth forecast for next year and dealers unwilling to remain underwater, The Year of the Sheep coming in 2015 could portend meaning beyond the zodiac. News Source: ReutersImage Credit: AP Photo/Andy Wong BMW Honda Nissan Toyota Car Buying Car Dealers

Husqvarna sold to KTM CEO Stefan Pierer

A couple of days ago the UK's Motorcycle News reported that BMW was in the final stages of selling Husqvarna to KTM, with a deal potentially confirmed as soon as this week. Following that came reports that Husqvarna Motorcycles wasn't sold to KTM but to a Pierer Industries, the company owned by KTM CEO Stefan Pierer. Turns out the advance report was true, as was the follow-up: BMW has just announced a "strategic realignment" of its Motorrad division, explaining that it sold Husqvarna to Pierer Industries in order to focus on the urban and e-mobility segments. Husqvarna's off-road machines, obviously, don't fit into those categories.
BMW bought the Italian-based bike maker with centuries-old Swedish roots in 2007 - the rest of the Husqvarna company remains based in Sweden - and has invested huge sums to integrate the smaller company into the larger parent. Six years later, just when dividends should begin to truly pay off, the brand is sold.
Before BMW made its announcement, one of the theories that forum members put forward for Pierer's interest in purchasing Husqvarna was that he wants his own business to run his own way. The parent company of KTM, Cross Industries, is 47.27-percent owned by India's Bajaj Automotive, with Pierer the majority shareholder, and is on a quest for global growth, taking the fight to BMW in Europe and launching new bikes and technology into the Indian market. Compared to BMW's and KTM's 2012 sales of around 100,000 bikes each in 2012, Husqvarna sold 10,751 bikes, which was a 15.7-percent increase over the previous year. Pierer would have a lot more freedom in the running of a company of that size.

Hydrogen could deliver one fifth of world carbon cuts by 2050, industry says

BONN, Germany — Increasing the use of hydrogen in power, transport, heat and industry could deliver around one fifth of the total carbon emissions cuts needed to limit global warming to safe levels by mid-century, a report by the Hydrogen Council said on Monday. To encourage industries to use hydrogen, Toyota and Air Liquide helped set up the Hydrogen Council, a global lobby launched in January this year. Its 27 members include automakers Audi, BMW, Daimler, Honda and Hyundai, and energy firms such as Shell and Total. The council said using hydrogen for transport, energy generation, energy storage, industry, heat and power could cut annual carbon emissions by 6 billion tonnes by 2050. "This would ... contribute roughly 20 percent of the additional abatement required to limit global warming to two degrees Celsius," the council said in a report released on the sidelines of a U.N. climate conference in Bonn. To achieve a two-degree limit this century agreed by governments in Paris in 2015, the world must reduce energy-related carbon emissions by 60 percent by 2050. The report said one in 12 cars sold in California, Germany and Japan were expected to be powered by hydrogen by 2030. By 2050, hydrogen could power 400 million cars, 15 million to 20 million trucks, around 5 million buses, a quarter of passenger ships and a fifth of non-electrified train tracks, as well as some airplanes and freight ships. Achieving this shift in transport and other sectors would require investment of $280 billion by 2030, with about $110 billion to fund hydrogen output, $80 billion for storage, transport and distribution, and $70 billion to develop products. Fuel cell vehicles combine hydrogen and oxygen to produce electricity to power an electric motor, producing water as a byproduct. However, making hydrogen from fossil fuels, a common route, also produces some greenhouse gas emissions. So far the take-up of hydrogen vehicles is tiny and industry experts say their wider use is years away, with high purchase prices and a lack of refueling stations the major barriers. But some firms, such as miner Anglo American and carmaker Toyota, are pushing for fuel cell cars to play a role even with the rise of battery-powered electric vehicles (EVs). Woong-chul Yang, vice chairman of automotive research and development at Hyundai said EVs and hydrogen fuel cell cars were needed because EVs were better for city driving and fuel cell vehicles better for longer journeys.