South East Asian Automotive News

REGIONAL 

AB Volvo has invested US$80m in a Bangalore, India truck-manufacturing factory to be run by its subsidiary company, Volvo India Private Ltd.  The company is slated to manufacture FH-12 heavy cargo trucks priced at Rup2.2m (US$52,100), with a production capacity of about 4,000 units per year. (June 15^th 1998) 

Beijing Jeep, a US$300m JV between Chrysler Corp (42% stake) and Beijing Automotive Industry Corp (58% stake), is now one of Chrysler’s biggest operations in Asia.  The JV sold 11,342 Cherokee brand jeeps during H1 1998, a 52% decline from the same period last year.  Production dropped 62% to 12,336 vehicles this year.  (July 14^th 1998) 

Daewoo Motor Co Ltd, in South Korea, had a 17.2% drop in car sales from 96,485 units in May 1997 to 79,907 units in May 1998.  In the first five months of this year, Daewoo’s vehicle sales totaled 275,992 compared to 356,985 for the same period a year ago. While exports rose 3.9% to 61,336 units, domestic sales have declined 50.4% to 18,571 units. Exports rose due to sales in Europe and the first shipment of mid-sized sedans to the United States. (June 24^th 1998) 

Daewoo Motor Co Ltd and Hyundai Motor Co Ltd, South Korea’s two largest carmakers, have been forced to downsize due to the drop in sales.  Daewoo closed two of its factories for three days during which the company announced it would be letting go of 2,000 employees.  Hyundai also confirmed that it would be letting go of 2,678 employees.  The Korean Automobile Manufacturers Association reported that production is expected to fall 20% in 1998.  (July 21^st 1998) 

Dongfeng Industrial Development Co, a subsidiary of Dongfeng Automotive Co in central China, is seeking US$18m of foreign capital to produce the new Model AF mini-cars.  The company is renovating its car parts plant and mini-car plant to make a facility that can produce 30,000 cars annually.  (July 16^th 1998) 
 

Hyundai Motor Co has been unable to reopen its factories in Ulsan, South Korea because of protesting workers.  The eight day shutdown has put US$300m of exports in jeopardy. The company has been unable to continue production to meet export needs and has more than halved the number of vehicles in stock. Prior to the stoppage, Hyundai had been operating at a record low capacity of 40%. (July 29^th 1998) 

Jimbei GM Automotive Co Ltd, a US$230m JV between GM and First Auto Works (FAW) in China, will produce the four-door Chevrolet Blazer SUV and the Chevrolet S10 crew cab pickup truck in China beginning in 2000.  The plant, located in Shenyang, Liaoning province, will have a production capacity of 50,000 units per year.  GM increased its stake in the JV to 50% by raising its planned investment from US$132m to US$230m. (June 23^rd 1998) 

Kia Motors Corp, which declared bankruptcy in 1997, is currently for sale.  Three major South Korean carmakers, Hyundai, Daewoo and Samsung, are bidding for the company.  Ford Motor Co, which already owns 16.9% of Kia, and GM are also bidding.  Creditor banks have not announced how much of Kia’s US$6.7bn debt they will reduce but, they will reduce the value of Kia’s US$290m in outstanding shares by 90% and will issue new shares to bring total capitalization to US$1.1bn. The successful bidder will be announced in September. (July 27^th 1998) 

Volkswagen AG, reported that it expects six-month sales in China to rise 7.1% to 153,000 units, from 142,842 units for the same period last year.  In 1997, the company sold 1.3 million vehicles in China.  (June 23^rd 1998)