Ford Motor Co. may have got off to a late start in China but Mullay and Company aren’t sitting around now! The Blue Oval is adding 100 dealerships this year alone in China with more to come at a brisk pace. This is where the growth is going to come from for the global automakers and the gloves are off to and the bank vaults opened up to grab as many new customers as possible!
From AutoNews.com:
BEIJING — Ford Motor Co. is adding 100 dealers in China this year, mostly in smaller cities in inland provinces where new car demand is surging, the company said today.
The move, more aggressive than a previously announced plan, will bring the number of Ford dealers in China to 340 by the end of the year, up from an original target of 310, said Joe Hinrichs, president of Ford’s Asia and Africa operations.
The company plans to introduce four new models in China over the next few years, including the Ford Edge crossover next month.
If you look at the number of unemployed people across the nation, it’s no wonder why there are so many auto loan refinance applications. Few states have seen the ugly underbelly of the uncertain economy like Oregon has. According to officials in the state, the unemployment rate is at 10.6 percent for July 2010. That’s more than one percentage point higher than the national average, which was at 9.5 percent. Unfortunately, it doesn’t look like Oregon’s job market is going to turn around any time soon. If you want to count the number of Oregon residents working part-time jobs until they can find full-time positions or those who have given up job hunting altogether, the unemployment rate skyrockets to 20.6 percent. That’s more than four percentage points higher than the national average. According to reports, Oregon lost more than 3,000 jobs in July.
Some officials say there could be hope for unemployed workers in Oregon, though. In June, initial reports showed the state lost 3,600 payroll jobs. However, the state actually gained 1,800 jobs in June when seasonally adjusted. That means there was a net increase of 5,400 jobs throughout the state. According to David Cooke, an Oregon state labor economist, the numbers often get skewed because many companies pay their employees once a month rather than once a week. As a result, they often miss the reporting deadlines for payroll, which means those jobs don’t show up in the monthly survey.
Some experts are putting their faith in the exports industry to bring the state of Oregon back to a decent level of unemployment. Mark McMullen who runs an economic website from Oregon, said the rate of unemployment throughout the state could get as high as 11 percent before it starts making improvements. However, he also said recovery could take about two years after that to see better numbers.
Many financial experts have been worried about China for quite a while. Specifically, many have been concerned that a real estate bubble has emerged in China, as local governments have spent like mad as they pushed for more economic development for their region.
Concerns are also growing in the Chinese government, and Bloomberg reports that Chinese banks will now be subjected to even more rigorous stress tests.
China’s stress tests of banks will assess the risk that a possible slump in property prices may strain developers’ finances and cause homebuyers to default, a person with knowledge of the matter said.
The banking regulator told lenders to include worst-case scenarios of prices dropping 50 percent to 60 percent in cities where they have risen excessively, the person said, declining to be identified because the regulator’s requirement hasn’t been publicly announced. Previous stress tests carried out in the past year assumed home-price declines of as much as 30 percent.
That’s a staggering assumption, but when you read about what’s been going on in China, this shouldn’t be a surprise.
I think it’s going to be that bad for the property market in China. Let’s be clear: What we’re talking about is a world-class—if not the world-class—property bubble.
What makes it a bubble?
What we define as a bubble is any kind of debt-fueled asset inflation where the cash flow generated by the asset itself—a rental property, office building, condo—does not cover the debt incurred to buy the asset. So you depend on a greater fool, if you will, to come in and buy at a higher price. We’re seeing behavior [we saw] in 2005 in Miami or ’06 or ’07 in Dubai.
You have said it’s a thousand times worse than Dubai.
Well, we said that [with tongue] firmly planted in cheek. But then again, according to a news report this week, there’s a developer that’s going to put in a new Times Square in suburban Beijing, replete with 32 Broadway theaters. You’re beginning to hear about these bizarre developments in China, indoor ski resorts similar to what we saw in Dubai.
There’s plenty more projects like that one. Let’s see if the government can create a soft landing here.
As the midterm elections draw near, President Obama’s focus remains on the downturn in the economy. However, more than a year after taking office in January of 2009, the economy has picked up less than many had hoped.
Since entering into office, Obama funneled millions of dollars into infrastructure and research through the American Recovery and Reinvestment Act of 2009. Many opposed to the act said the it was a waste of money spent on special interests.
The dirty economic word in Washington remains “bailout.” To many, that word signified the Government failing the American people and giving away their hard earned tax dollars to companies that had not bothered to take care of themselves.
In late July of 2010, however, Obama proclaimed the auto industry bailout a success as the auto companies added 55,000 new jobs. There was even some talk that the tax payers had a small chance of seeing profit on their bailout investment.
However, come August, even the President had to admit that the housing market was still a “big drag” on the economy.
As the economy fails to pick up at the speed many Americans – especially out of work Americans – would like to see, many are turning to less traditional methods of making money, like using information in sportsbook reviews to try their luck at betting.
Former President Bill Clinton is famous for saying in an election, “It’s the economy, stupid.” During times of economic downfall, the economy tends to overshadow every other political issue as Americans fight to find jobs and keep themselves afloat. It’s not surprising, then, that the Obama administration continues to place the economy as a top priority, and with the current economic trends, it can be expected that President Obama and his administration will do so for months to come.
Since the economy woes began over one year ago, the employment rates have remained high and people have modified their purchases accordingly. In order for the economy to grow, people need to spend money but since things are uncertain, many people are not spending as much money. People are making adjustments to spending habits because of the economic instability.
This reluctance in spending is evident in the quarterly results for both Wal-Mart and Home Depot. Both companies recorded second quarter profits that were better than expected; however, it appears that these increases were not due to increased sales but lower prices. This is indicative that people are still being very cautious with their money.
People are also deciding that items that were once considered a necessity like microwaves or high speed internet may be less of a necessity in these cash-strapped times. This depends on the age group being questioned — older people feel that landline phones are important while younger people find them unnecessary. Consumers are determining which things can be discarded to save money while keeping up quality of life in this economy.
The revenue crush applies to states as well; many states have increased cigarette taxes. In New York State, the excise tax for cigarettes is the highest in the country but people who smoke are now travelling to other states to purchase cigarettes. While the customers are out of state, they are also making other purchases which hurt the convenience stores that typically sell cigarettes. These taxes may not apply to smokeless cigarettes at this time so this phenomenon is not happening with the sale of these items. Cost consciousness is causing significant alterations in behavior to save money in this instance.
While the economy is in flux, people are evaluating current purchases and selecting the best way to get their money’s worth. Once the economy improves, people will change their behavior.
As the US auto market continues to resurge, Nissan is reporting higher profits in both the US and Chinese markets than anywhere else. Preliminary forecasts suggest that profits should more than triple over the coming year as demand finally starts to make a comeback. Nissan also has new products coming to both markets over the course of the year, which will no doubt boost brand sales across the board.
From AutoNews.com:
CEO expects Nissan’s sales in China to increase 14 percent this fiscal year, while North American deliveries may increase 13 percent to 1.2 million as the world’s second-largest auto market recovers from a recession.
While the American automobile industry continues to struggle, the Chinese market is proving to be fruitful ground for manufacturers to expand their business. Nissan recently announced plans to increase production for China to more than 900,000 units per year by 2012.
A big part of the Nissan plan is a new mid sized sedan named the Kizashi.
From theTruthAboutCars.com:
Did we say that Japanese brands have to do something to stop the erosion of market share in China? Nissan took the advice and said today that they started construction of their second factory in China’s southern Guangdong Province. According to The Nikkei [sub], the factory will open in 2012 with an annual capacity of 240,000 vehicles.
The plant is part of Dongfeng Nissan, a joint venture between Nissan and Dongfeng Motor Co. Together with their first plant, Nissan will have capacity for 600,000 units in China. By end of 2012, Nissan plans to increase their total annual capacity to 900,000 units, up 70 percent from the 2009 level.
One of the more stylish and funky cars I’ve seen in awhile. Would you believe it was a Citroen? Yeah, a Citroen. I’m not sure what more evidence the world needs that the Chinese market is the automotive frontier. The car was designed in Shanghai and you can bet it will turn heads when it debuts over there.
From theTruthAboutCars.com:
That’s right, it’s a Citroen. Inspired by the success of German brands in China’s luxury segment (and possibly problems with its taller offerings), this Metropolis Concept was designed in Shanghai as a vision for a French entry in that burgeoning market segment. It also seems more than a little inspired by Jaguar’s stunning new XJ, just as its sister brand’s recent Five By Peugeot Concept seemed to take some cues from Jaguar’s XF. Could Ian Callum be in danger of being wooed away by the French?
The world’s major auto manufacturers have been on a tear in China, pushing sales estimates to the millions over the next several years. But what of China’s own automakers? Could they be preparing to enter to the world market? Chinese automobile quality has risen significantly over the last several years. It could be enough to tip the scales in their favor should they choose to expand to other countries.
BEIJING (Reuters) — When Ric Hull first looked at launching Great Wall Motor pickup trucks in Australia last year, he considered rebranding them, worried their obvious Chinese origins would raise questions about their quality.
Ateco Group, Hull’s auto importing and dealership company, decided against marketing the low cost models under “GWM” label, instead embracing the trucks’ made in China credentials, and sales are booming.
“We initially thought: do we resolve the brand question, do we call them GWM? But then we thought that people would know anyway, and that seems to be working very well,” Hull said.
