Sunday, September 25, 2011

AFG Meeting - 23 September - Presentation Materials

The presentations for last Friday's AFG Meeting GREEN MANUFACTURING - PROFITABLE MANUFACTURING are ready for download:

Video (Laser Welding System for Differential Carrier / Ring Gear)

Thanks for your interest!

Uli Kaiser

Thursday, September 22, 2011

MMC, PTT to jointly test electric vehicles

Mitsubishi Motors Thailand (MMTh), MMC's subsidiary in Thailand, signed an agreement with PTT Public (PTT), a Thailand-based energy company, to jointly test the i-MiEV new-generation electric vehicle (EV).

Thursday, September 15, 2011

Proton and Mitsubishi Motors to Pursue Broad Ranging Strategic Collaboration

PROTON Holdings Berhad (PROTON) and Mitsubishi Motors Corporation (MMC) announced today that they are in serious discussion for strategic collaboration to further strengthen the competitiveness of both PROTON and MMC in the global marketplace.

The collaborative items being considered between the two parties are set to cover areas and activities such as:

1. Joint production of engines in Malaysia

2. Consignment production of MMC-brand vehicles at PROTON facilities

3. Sharing of major parts and components between MMC's "Global Small", which is to be launched next March starting in Thailand, and PROTON's upcoming "Global Small Car"

4. Provision of MMC's future technologies such as electric, plug-in hybrid and hybrid vehicle technology

The two companies had jointly proceeded with feasibility studies since late 2010 and have identified these areas of collaboration that could be expected to provide both parties with the right synergy in the pursuit of global competitiveness.

First-Time Car Buyers Tax Deduction not very Street wise

Thai Government believes that its first-car buyer program will contribute to the growth of the automotive industry, which has become a driving force for the Thai economy.

The Cabinet, during its meeting on September 13, approved guidelines to refund taxes for first-time car buyers. At the same meeting, it approved a central fund of 100 million baht from the 2012 national budget to carry out the program and another fund of 30 billion baht from the 2013 national budget for tax refunds.According to the scheme, car buyers eligible for tax refunds must be at least 21 years old.

Who cares about IPR, what about innovation in China?

The Wall Street Journal reports on a brief debate that took place yesterday between US Ambassador to China, Gary Locke and an advisor to the People's Bank of China, Li Daokui. The exchange took place during a panel discussion at the World Economic Forum meeting currently taking place in Dalian, China.

The apparently civil discussion surrounded a disagreement as to the repercussions of China's difficulties in enforcing intellectual property rights (IPR) protections. In short, Locke expressed his view that lack of IPR enforcement would stifle Chinese innovation. Li, on the other hand, merely expressed his disagreement and noted that China's policy focus instead needed to be on supporting entrepreneurs and removing barriers to their success. (Notice how Li cleverly took Locke's cue and changed the topic from IPR to innovation?)

So who is right about innovation? Where should China focus its policy in order to better support innovation? Should it beef up IPR enforcement, or should it focus on removing barriers to the private sector? Which would give it the biggest bang for its policy buck? (
Not that this is necessarily an either/or proposition -- China is big and rich enough now to do both -- but humor me on this.)

Some of my readers may be surprised to learn that I think Li Daokui was right. While Locke was certainly carrying out his duty as Ambassador by saying that China needs to improve IPR protection, the truth is that IPR protection has very little to do with innovation in a developing country like China. In fact, history tells us that, since the dawn of the Industrial Revolution, every subsequent country to jump on the development bandwagon has copied those who came before.
...every country that became economically great began by copying: the Germans copied the British; the Americans copied the British and the Germans, and the Japanese copied everybody.*
This is not to excuse the Chinese companies that blatantly copy foreign products and the government that often chooses to look the other way, but since Locke chose to introduce innovation into the discussion, the issue deserves a closer look.

My research on China's auto industry reveals that the most innovative among China's automakers are the private and independent automakers, not the massive state-owned enterprises (SOEs) with their foreign joint venture partners. While private players have yet to introduce any real breakthrough innovation, their progress in developing new energy vehicles and unique Chinese brands is ahead of the SOEs. The reason for this (and you'll have to take my word for it until my book comes out) is twofold.

First, leadership positions in SOEs are essentially political positions. The men who run these companies have their eyes on their next job, which will be a political appointment to run an association or a local government, or even to become a Vice Minister or Minister in the central government. In order to better assure themselves of a good position, they tend to be risk-averse in their decision making.

Second, because these guys have short-term investment horizons, "wasting" money on R&D is not high on their agendas. R&D spending only helps the next guy. It is much easier to rake in profits building and selling foreign branded cars. They simply lack the career incentives to take the kind of risks that result in significant innovation.

(Here is another story today about how "JV brands" have not resulted in the innovation that the central government had been hoping for. Why? Again, forcing foreign partners to hand over technology does not translate into innovation, especially when leadership incentives are not changed. I previously wrote about this "JV brands" or "sub brands" issue several months back.)

So while Li Daokui seemed to be changing the subject above, he was actually addressing Locke's point about innovation. And if China's auto industry is any kind of indication for China as a whole, the central government would do well to follow Li's advice and remove the barriers that continue to marginalize private business in China.

Of course, as an American, I would like to see the home team do well, so if China continues to insist on a preponderance of state control over all of its major industries, I believe that will ultimately be to the advantage of China's competitors. And they need every advantage they can get.

* William Kingston, “An Agenda for Radical Intellectual Property Reform,” in International Public Goods and Transfer of Technology Under a Globalized Intellectual Property Regime, ed. Keith E. Maskus and Jerome H. Reichman (New York: Cambridge University Press, 2005), 658.

Wednesday, September 14, 2011

Toyota to Boost Indonesian Output

JAKARTA—Toyota Motor Corp. said it would crank up production in Indonesia by more than 60% in a move to maintain its dominant position in Southeast Asia's largest economy.

Japan's largest auto maker said Tuesday that it will invest around $340 million to build a new factory which will lift its capacity to 180,000 vehicles a year in Indonesia by the middle of 2013, from about 110,000 vehicles

Thai Automakers slam plan

The government's first-car buyer scheme has drawn strong criticism from industry executives, who say not all automakers will enjoy the same benefits and the government might end up having to raise taxes in the long run to offset the revenue shortfall.

The Pheu Thai government's plan to allow tax deductions for first-car purchases will result in an uneven playing field for all manufacturers, said Piengjai Keawsuwan, president of the Thai Automotive Industry Association.

Tuesday, September 13, 2011

AAM expands its manufacturing presence in Asia with new facility in Thailand

Rayong, Thailand, September 9, 2011 - American Axle & Manufacturing Holdings, Inc., (AAM) which is traded as AXL on the NYSE, today announced the grand opening of its Rayong Manufacturing Facility, located in the Hemaraj Eastern Seaboard Industrial Estate in the Rayong Province of Thailand.

Joseph S. Tang, the plant manager of Rayong Manufacturing Facility, will oversee the facility's manufacture of highly engineered and proven driveline products for the region. Products manufactured at the facility include front axles, rear axles; and driveshafts.

BorgWarner Launches New Silent Chain for Hyundai and KIA GDI Engines

BorgWarner recently launched its new silent chain for the balance shaft drive on Hyundai's Theta II four-cylinder gas direct-injection (GDI) and turbo-GDI engines. These engines power the Hyundai Sonata and Kia Sorento, K5 and Sportage for the U.S. and South Korea. Designed to withstand the harsh environment and stresses of GDI engines, the new silent chain delivers lower noise, vibration and harshness (NVH) and greater durability compared with roller chain systems for balance drive applications.

Vietnam Auto sales jump 10% in August

New vehicle sales in Vietnam jumped by 9.8% to 9,518 units in August, from 8,671 units a year earlier, according to data released by the Vietnam Automotive Manufacturers Association.

Indonesia’s Stock Market Value to Lure Investors, Panin Says

Indonesian stocks have become more attractive to overseas investors after the world’s fourth-most populous nation overtook Malaysia as Southeast Asia’s second- largest equities market by value, PT Panin Sekuritas said.

Deutsche Bank believes that Valuation of the US Auto & Auto Parts Sectors Have Reached a Compelling Levels

Analysts at Deutsche Bank states that following up on several auto and auto parts companies in the US, it does not appear that any suppliers have noticed material changes to production forecasts in North America or Europe, but all management teams appear to be contemplating downside scenarios and contingency plans; particularly for Europe. They pick Lear Corp. (NYSE: LEA) as their Top Pick among auto parts suppliers. They maintain a Buy rating on the shares of Lear with a price target of $64.

Monday, September 12, 2011

Japan seeks luxury-car tariff cut

Lexus SUV

Japan has asked Thailand to speed up reducing tariffs on luxury cars under an agreement that has been stalled for four years.

The Japan-Thailand Economic Partnership Agreement (JTEPA) that took effect in 2007 calls for cutting the import tax on cars with engines above 3,000 cc by 5% annually until 2010.

The current rate stands at 80%.

GKN to acquire Getrag’s Driveline Products Business

In case you haven't heard:

GKN plc announced in July 2011 its agreement to acquire the all-wheel-drive (AWD) components businesses of Getrag KG, the privately held German company controlled by the Hagenmeyer family. The businesses being acquired, together referred to as “Getrag Driveline Products”, are Getrag Corporation, a joint venture with Dana Corporation based in the United States, and Getrag All Wheel Drive AB, a joint venture with Dana Holding Corporation and Volvo Car Corporation based in Sweden.

Click here to read more.

Monday, September 5, 2011

Asia Precision goes public

Asia Precision (APCS), a maker of metal parts, will launch an initial public offering of 87.25 million shares between late September and early October, likely the same period for its listing on the Stock Exchange of Thailand.

Click here to read the full story.

Friday, September 2, 2011

HUGE NAPA TOOL SALE September 2nd and 3rd!

Don't Miss Our Largest Tool Sale of the Year this Friday and Saturday (September 2nd and 3rd) at our Bentonville NAPA Parts Store just behind Tractor Supply on 28th Street in Bentonville. For more information call Shawn at our Bentonville NAPA Parts Store 479-273-1234. Don't Miss Out On These Once-A-Year Tool Savings!