China to Buy Ford or Holden!!!!!

[csv8]

Analyst: Cashed-up Chinese buyers waiting in the wings
Barry Park
July 7, 2011
Be the first to comment
CHINESE buyers would snap up the car-making assets of Ford Australia or Holden if their US parents abandoned their Australian operations, an automotive industry analyst says.

A Treasury Asia Asset Management investment analyst, Tan Eng Teck, said there were already cashed-up Chinese investors casting around the edges of the Australian car-making industry as the fast-moving industrial giant attempts to ramp up its domestic production.

''For car parts, they are looking at direct takeovers, but for other things they're generally looking for joint ventures. But if it is for internal parts, they will prefer a direct takeover,'' Mr Tan said.

Advertisement: Story continues below
Chinese money has already flowed into the Australian car components industry, with the car maker Geely picking up the assets of the struggling gearbox maker DSI in 2009. Since the takeover, Geely has started to build gearboxes in China using intellectual property acquired from DSI - a fact not lost on Mr Tan. ''The Chinese don't respect intellectual rights that well. The Chinese are more about practicalities - why spend five years developing it when you can just go out and get it?''

Mr Tan said Chinese investors would also cast around for more car makers showing signs of trouble - the formerly Ford-owned Volvo has already fallen into Chinese ownership, with the once GM-owned Swedish brand Saab now facing a reverse takeover by the Chinese car distribution business Pang Da.

''It's actually scary for a lot of [international car makers],'' Mr Tan said. ''A lot of governments actually impose rules that say [Chinese investors] can't take this technology outside the country when they acquire it - Sweden did it with Volvo. But the Chinese will take it anyway.''

Ford, Holden and Toyota have all warned they could abandon car-making operations in Australia after the federal government dumped its $1.3 billion Green Car Innovation Fund, designed to keep local car manufacturing competitive with imports, just over two years' into the fund's 10-year timeline.

The chief executive of Holden, Mike Devereux, warned that the government's move - designed to help pay for a string of natural disasters in Queensland and Victoria - threatened the future viability of the car maker.

[Tribal]

Here-say and speculation - hardly warrants a thread...

[csv8]

Originally Posted by Tribal

Here-say and speculation - hardly warrants a thread...

And no one thought Volvo, SAAB, ASTON MARTIN would go to the Chinese or Land Rover, Jaguar to India!!!
I can see it now..the new Great Wall Ranger..Chery Fiesta!!!!!!!!!!!!

[SteveJH]

Originally Posted by csv8

And no one thought Volvo, SAAB, ASTON MARTIN would go to the Chinese or Land Rover, Jaguar to India!!!
I can see it now..the new Great Wall Ranger..Chery Fiesta!!!!!!!!!!!!

Isnt the owner of Aston Martin a bunch of British Businessmen led by David Richards who owns prodrive? Hence why they run Aston Martin Racing....

And I wasn't aware that Saab had been sold yet?

From what I've heard, since their initial purchase Tata have not pulled a single cent out of Jaguar-Land Rover, and its still headquartered in the UK. Very different from the Ford days......

[vztrt]

Originally Posted by Tribal

Here-say and speculation - hardly warrants a thread...

More the thread tittle is a bit much.

[2011G6E]

Originally Posted by vztrt

More the thread tittle is a bit much.

Not if it had had a question mark after the title instead of excalmation marks. Then it would be pretty accurate and a worthy question to ponder, given what China is snapping up all over the place in Oz already.

[vztrt]

Originally Posted by 2011G6E

Not if it had had a question mark after the title instead of excalmation marks. Then it would be pretty accurate and a worthy question to ponder, given what China is snapping up all over the place in Oz already.

Correct but it wasn't. It would seem it was written intentionally to make it out that the plants were about to be sold off.

[ltd]

Won't happen any time soon. Holden most likely will falter simply because they've already threatened to walk away from Oz after 2016.

[Smoke Pursuit]

I dont think Holden will walk away in 2016... They are just playing with Julia...

Its about time they learnt how to survive without government handouts..

[LeadFoot81]

Originally Posted by DASH GT

Its about time they learnt how to survive without government handouts..

Amen to that!

[ltd]

Originally Posted by DASH GT

I dont think Holden will walk away in 2016... They are just playing with Julia...

Its about time they learnt how to survive without government handouts..

You mean someone would actually lie to the Prime Spinster?
That beacon of honesty and integrity being told porkies? Shameful.

[bmorris]

Originally Posted by DASH GT

I dont think Holden will walk away in 2016... They are just playing with Julia...

Its about time they learnt how to survive without government handouts..

Said as though no other car maker in the world gets government support...

[Gobes32]

Originally Posted by A Treasury Asia Asset Management investment analyst, Tan Eng Teck

''The Chinese don't respect intellectual rights that well. The Chinese are more about practicalities - why spend five years developing it when you can just go out and get it?''
.

Then how do manufacturers go about reversing this trend. Why spend years developing something if the Chinese will steal it anyway?

[aussie muscle]

Originally Posted by Gobes32

'The Chinese don't respect intellectual rights that well."
Then how do manufacturers go about reversing this trend. Why spend years developing something if the Chinese will steal it anyway?

I think the USA is working with the chinese govt. trading agreements in exchange for cracking down on it.

[kts350]

Originally Posted by Gobes32

Then how do manufacturers go about reversing this trend. Why spend years developing something if the Chinese will steal it anyway?

I have some first hand experience with that my mate invented and is making a a new style of door lock, because his business is only smaller the best place for him to get it made is in china. But because of the Chinese stealing intellectual rights to things, he has parts of it made in china then makes the rest here and assembles them himself.
Costs him more per lock to produce but he spent bulk dollars to get the rights protected in Australia and other countries and couldn't afford to have his designs ripped off by a place that wouldn't bat an eyelid in stealing his designs.

[2011G6E]

Yes, it's an old and well known problem. The "brand name" bits go out the front door of the factory, and our the side door go the "no name" parts in blank boxes for discount prices...same quality inside, but maybe lesser paint quality or cheaper packaging.

When we owned our Landcruiser, I wanted a snorkel for it. I was aghast at the $600 plus fitting price of them here, and someone suggested looking online. I mean come on...a moulded piece of plastic tube with some fittings? I found a Chinese mob based in Hong Kong that had a simply vast number of fourbie accessories, and there was the snorkel. Someone on a fourbie forum even said that, suspiciously, the part number they quoted on the website was identical to an ARB number for a 100 series snorkel...odd, that. The price was $200 landed at my door, and they offered that they could supply " as many as I liked, from individual ones to a container load" for special prices...no wonder some guys do it for a living on the side.

[Road_Warrior]

That was a Drive article wasn't it...

[Mad_Pom]

Why would the Chinese be able to produce vehicles in Australia more profitably than Ford or Holden?
Unfortunatley Australia is seen as a high manufacturing cost country and without import tariffs or local content rules, then what is the advantage of producing locally - very sad as that is. Especially when the Aussie dollar is so strong, it multiplies the cost of local manufacturing and makes export very hard to justify.
From what I have read it is very hard to make a profit from a manufacturing site, unless it is producing >80K units per year and ideally would be pumping out 150K units a year.
Also, ins't there a Mitsubushi plant siting idle somewhere? If they were that keen why not buy that?
Oh well, I suppose speculation like this creates discussion and stirs the pot a little.

[ray38l]

Originally Posted by Mad_Pom

Why would the Chinese be able to produce vehicles in Australia more profitably than Ford or Holden?
Unfortunatley Australia is seen as a high manufacturing cost country and without import tariffs or local content rules, then what is the advantage of producing locally - very sad as that is. Especially when the Aussie dollar is so strong, it multiplies the cost of local manufacturing and makes export very hard to justify.
From what I have read it is very hard to make a profit from a manufacturing site, unless it is producing >80K units per year and ideally would be pumping out 150K units a year.
Also, ins't there a Mitsubushi plant siting idle somewhere? If they were that keen why not buy that?
Oh well, I suppose speculation like this creates discussion and stirs the pot a little.

i don't think they actually want to buy the factory and keep production here. They would be more interested in taking the current models. So the falcon and commodore would be made in China or whatever cheap country. All the plant equipment would be sent to China as well.
It would be a change to what they normally do which is blatantly copy the design of another car.
They must now want a little more substance and actually have a car that is safe and acceptable to most car buyers

[Mad_Pom]

Originally Posted by ray38l

They would be more interested in taking the current models. So the falcon and commodore would be made in China or whatever cheap country. All the plant equipment would be sent to China as well.

I don't think you are allowed to import 2nd hand plant and machinery into China and why would you, when you can make it cheaper in China. As for the intellectual property, that is owned by Ford and GM corporate and would not be for sale. If they wanted to enter into negotiation for IP with GM or Ford, they would not have to worry about subsideries in Australia. Both Holden and Ford Australia are integral parts of the parent companies, working on global designs and some local product. They would have to make a hostile take-over on the NYSE to gain control and as the US government still own a huge slice of GM and Ford still has the Ford family controling the voting rights, then a hostile take-over of either company is highly unlikely. Crysler on the other hand... that would be available, or Saab for that matter.

Like I said previously. Speculation and pot stiring..nothing serious

[2011G6E]

Oh, I think it warrents a thread. No use turning our backs on the harsh reality of the big bad economic world.

There was a report on the emerging powerhouses of India and China on the ABC a while ago.
Regarding India, they gave a list of manufacturers who are setting up (or are planning on soon setting up) plants to make vehicles in India. Honestly, the list just went on and on and on...everyone you could think of...Ford, General Motors, Chrysler, Mitubishi, Toyota, Suzuki (our sons Alto has "Made in India" on the compliance plate), motorcycle manufacturers...hell, even Harley Davidson is looking at making thier bikes there, believe it or not.

One quick Wiki search shows the manufacturing numbers for various countries:http://en.wikipedia.org/wiki/Automot...try#By_country . In 2010, China tops everyone by a massive margin...18,264,667 vehicles to the next closest number two on the list, Japan, with 9,625,940. Australia made only about 330,000 cars and commercial vehicles. It's a drop in the bucket, and in a lot of graphs you can find online, Australia doesn't even show up on the figures.

Here's a list of Chinese manufacturers:
http://www.chinacarforums.com/chines...facturers.html
There's at least 45 car makers there.

They could, without flexing much muscle at all, stage a buyout of our manufacturing facilities quite easily. Hell, they wouldn't even face much government opposition. They already let any foreign mob who wants it to buy farms, mines, and land, when no Australian is allowed to go to thier country and even buy a house block...

Sad, but it wouldn't surprise me if it happened...too many people think Australia is a big powerful country with real push in the world. We're not...we're a sardine swimming with sharks.

[JC]

Originally Posted by 2011G6E

...too many people think Australia is a big powerful country with real push in the world. We're not...we're a sardine swimming with sharks.

Never a truer word spoken (or typed).

Whilever people will buy on features and price, the Oz built cars just don't make the grade - too expensive, fewer features etc. People like me (who don't buy new) rely on the second hand market to get the big Aussie cars at a reasonable price, and we're willing to forego a few features to buy the Falcon or Commodore we want for the right price.

Take away the Aussie new car market, and we'll have less supply, and we'll be forced into second hand indian, chinese or korean cars (the Jasp ones are too expensive in comparison).

[2011G6E]

True words from JC as well.
I used to be of the "buy a car a couple of years old" mob as well. Our current G6E is our first "brand new off the showroom floor" car, kind of breaking our own rules.
We used to be of the logic that said "buy a car two years old or older with a good service history and you'll get something that you could never have afforded new" because of the depreciation.

Ford and Holden (GM) wouldn't be ripe for a takeover attempt, but Chrysler and SAAB would be? Does the term "too big to fail" ring any bells?

I don't think a lot of people understand quite how large China is in economic terms. They have the willpower and capacity to simply build a massive industrial area whenever and whereveer the will takes them..."environmental concerns" are a vague term they might have heard of, but they are hardly factored in when the economic good of the country is at stake and the chance to give a few hundred thousand of thier people a job comes up. An example is the new ultra high speed mag-lev train network they are building in China...they saw the technology, went to Germany, backed the company building them to the hilt, and are now dropping around $20 billion on the system. They've alread got one up and running, and longer routes are in the development stage now. See an opportunity, sieze it, spend big, do whatever it takes to make it a success. Simple philosophy there.

China and India are truly examples of what Australia and other western countries used to be like...opportunities were seen and immediately siezed, big projects were viewed favourably and backed to the hilt by governments and the public at large...not dithered over for decades while they considered whether a rare species of endangered slug that no one has ever seen might be in the area.
A perfect example: Does anyone honesly think the Snowy Mountain Hydro scheme could be built today? Hell no...it wouldn't even get past the intitial planning stage before green groups were protesting in thier thousands in Canberra, massive ad campaigns were undertaken to undermine it, and huge resources were put into government think tanks and focus groups to see if it was "a good thing". Back then, they jus got on an built the damn thing.

China has a policy of eagerly saying to investors and customers "if you want it, we'll make it...even if we have to build a new factory, we'll supply it". I have freinds in the motorcycle trade who have been to the simply massive factories producing motorcycles for the big makers and also the Chinese makers themselves. They say that when you enquire about a certain kind of bike, and whether it could be made for the Australian market, they say that if you are serious about ordering a large quantity, they are willing to drop everything on the spot, change production lines around, make it to whatever spec you like for your home market to suit rules and regulations, and take on board any suggestions on colors and features you like. Flexibility like that wins repeat and new customers, and it's something that western makers have forgotten.

I worked for a factory that won a lot of orders because it was willing to change the production line at virtually a moments notice to suit a specific order for a customer, and once word got around that we were flexible like that, more and more orders flowed in, because "the big boys" weren't willing to do it. So it does still happen in Australia, just not on a large scale like it used to anymore.
China still does it on a large scale, and that's the difference.

[Gobes32]

Also, I would imagine it would be hard for Ford US to sell a subsiduary of their brand. If the Chinese were to buy Ford OZ, it would be the manufacturing capabilities, not the actual business. More chance of GM selling Holden to the highest bidder if they do not become profitable.

[ebxr8240]

Oh well our electricity wholesale section has been sold..
May as well buy the rest..

[CFOUR]

If china buys ford I won't. Aussie car makers don't over charge as much as some seem to think, we pay too much for the mondeo and the focus but falcons (atleast the g6 and r6) are bang on. You do get what you pay for.

[GOLDIE]

that sounds just like they are doing to all our farming land.They have purchased massive amounts of it all ready so they can send the produce home to china why not do it in other industries aswell.Theyy can get around the high labor costs by using there own countryy people out here.


Ian

[SEZ213]

I think this article is just another excuse for Devereaux to have a whinge that Julia's canned his GCIF...and create some more hype around it...

The article is NOT an interview with a chinese manufacturer who wants to take over Holden, Ford or Toyota...but an investment analyst...so it actually IS all hearsay, and projections of what ONE analyst is suggesting...

I don't see this happening any time soon...

[Ford17]

There are already plenty of car manufacturers falling over backwards to set up shop in China, from all over the world. Peugeot, VW, Mercedes Benz have been making waves recently.

Why on earth would China be eyeing off the Australian domestic manufacturing equipment and its related market?

That's something Mr Tan didn't seem to mention.

[MethodX]

Gm already has a partnership with a Chinese company.
Dont they send statesman's over there in CKD form?