Morocco is allocating 600 million dirhams (54 million euros) to investment projects in the automotive industry, MAP reported on Wednesday (May 15th).

The contracts were signed between the ministry of industry, trade and new technologies, the Hassan II Fund and companies in the industry. The businesses include Delphi Packard Kénitra, Lear Automotive Morocco, Fujikura Automotive Morocco and Denso Thermal Morocco.

The projects aim to create 5,700 jobs.

Article source: http://magharebia.com/en_GB/articles/awi/newsbriefs/general/2013/05/16/newsbrief-03

Boston, MA — (SBWIRE) — 05/17/2013 — Company Mergers Acquisitions (MA), Partnerships Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organization to sustain its competitive advantage.

Project Description:

‘ Beijing Automotive Industry Holding Co., Ltd. Mergers Acquisitions (MA), Partnerships Alliances and Investments report includes business description, detailed reports on mergers and acquisitions (MA), divestments, capital raisings, venture capital investments, ownership and partnership transactions undertaken by Beijing Automotive Industry Holding Co., Ltd. since January 2007.

Scope:

– Provides intelligence on Beijing Automotive Industry Holding Co., Ltd.’s MA, strategic partnerships and alliances, capital raising and private equity transactions.
– Detailed reports of various financial transactions undertaken by Beijing Automotive Industry Holding Co., Ltd. and its subsidiaries since 2007.
– Information about key financial and legal advisors for Beijing Automotive Industry Holding Co., Ltd.’s financial deals transactions.
– Financial deals tables and charts covering deal value and volumes trend, deal types and geographybased deal activity.

View Full Report Details and Table of Contents

Highlights:

This report includes Beijing Automotive Industry Holding Co., Ltd.’s contact information and business summary, tables, graphs, a list of partners and targets, a breakdown of financial and legal advisors, deal types, top deals by deal value, detailed deal reports, and descriptions and contact details of the partner, target, investor, and vendor firms, where disclosed.

The profile also includes detailed deal reports for all MA, private equity, public offering, venture financing, partnership and divestment transactions undertaken by Beijing Automotive Industry Holding Co., Ltd.. These deal reports contain information about target company financials, sources of financing, method of payment, deal values, and advisors for various parties, where disclosed.

Reasons to Purchase:

– Access comprehensive financial deals data along with charts and graph covering MA, private equity, and partnerships and alliances.
– Form an independent opinion about Beijing Automotive Industry Holding Co., Ltd.’s growth strategies through the organic and inorganic activities undertaken since 2007.
– Track your competitors’ business structure and growth strategies.

About Fast Market Research
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Article source: http://www.sbwire.com/press-releases/beijing-automotive-industry-holding-co-ltd-mergers-acquisitions-ma-partnerships-alliances-and-investment-report-new-market-study-published-249499.htm

The Corporate Average Fuel Economy standards set forth by the Obama administration has been called the single most important aspect in shaping the future of the automotive industry. It is hard to argue with that. Given our current love of speed and need for large trucks in our infrastructure, we still have a healthy thirst for fuel, which makes the CAFE industry goals of 35.5 MPG by 2016 and 54.5 MPG by 2025 an incredibly daunting task.

Were it not difficult enough to reach these standards, the industry must also adhere to ever increasing safety standards. Be it increased tolerances for certain crash conditions or the market demands for inclusion of advanced safety tech, vehicles have gained weight over the last two decades.

This conflict of increased MPG expectations and the added weight of required safety equipment seems like an impossible one to reconcile, but it is one that every automaker must adopt if it wishes to play ball in the automobile industry of the future.

It was this very topic that was at the heart of a roundtable discussion held last week at the Massachusetts Institution of Technology. Hosted by MIT, and the New England Motor Press Association, the 2013 NEMPA-MIT Roundtable, titled Mass vs. Efficiency: Hitting the Automotive Sweet Spot featured a panel that included esteemed engineering professors and the top automotive engineers in the business. Panelists included:

-Mike Stanton: President and CEO of Global Automakers

-David Leone: Executive Chief Engineer, GM Global Performance Luxury Cars

-Heiko Schmidt: Dept. Manager, Compact Cars, Mercedes-Benz USA

-Anders Tylman-Mikiewicz: General Manager, Volvo Monitoring Concept Center

The discussion was emcee’d by our very own Craig Fitzgerald (top) . You know, this guy. While discussions like this may lend themselves to members of each automaker talking about how great their products are (which happened at points), there was an honest effort to discuss this issue without bias or slant. The inclusion of third-party entities such as Stanton and members of the educational realm like MIT helped reinforce this notion.

Mike Stanton (above) spent a good deal of his time essentially setting up the question for others to answer by shaping the problem. “The most confusing and fascinating issue,” said Stanton, “is to find out how to reach these goals. We believe you can reduce mass and still be safe.” Stanton went on to point out that the real goal here is to reduce greenhouse emissions, and doing so though regulating consumption fossil fuels.

Perhaps the most intriguing speaker of the day was professor Tomasz Wierzbicki (below). He has consulted in the past with BMW’s RD dept. as to how to take weight from a vehicle. He understands the ways that we can remove weight, through more than just carbon fiber.

As the professor explained, “There is always a tradeoff between ‘safe’ and ‘light.’ Be it new aluminum alloys or magnesium extrusions.” He cited the Volkswagen XL1 for its use of aluminum extrusions, contributing to its 200 MPG capability.

Next up was David Leone (below), speaking on the efforts that GM has made in reducing the weight of the new Cadillac CTS. He shared the mantra of other speakers that, “there is no silver bullet.” Leone pointed out that the new CTS is 7% lighter than the outgoing model, but is longer, and uses several different grades of steel depending on application in the vehicle.

Leone went on to highlight the use of carbon fiber in the Corvette Stingray, as well as the advanced powertrain in the new Cadillac ELR. But as we know, the ELR is a fancy Chevy Volt, with different performance figures. What about a truly different powertrain? Like the plug-in diesel-hybrid Volvo V60 Plugin. It is perhaps one of the most fascinating new powertrains being pursued and was discussed by Volvo’s Anders Tylman-Mikiewicz (below).

The plug-in Volvo achieves 125 MPG, with a 31-mile pure-electric range. That range is enough to satisfy the commuting needs of many drivers, and those numbers have resulted in surprising response from customers. Volvo estimated that it would sell 5,000 units throughout 2013, but has already sold out its inventory for this year, suggesting that buyers are ready to pay a premium for such technology. (It runs £48775 in the UK, translating in to a US price of nearly $75,000). Volvo has said that it will produce 10,000 units in 2014, which doubles the entire market for performance wagons.

Does it show a true adoption of a new technology? A market that is willing to accept a novel new drivetrain? Or is the acceptance that one vehicle will not be the world-beating fuel-mizer that many are searching for. There are no silver bullets, but it is the considered combination of many different technologies. Combining a diesel powertrain with plug-in capabilities and a hybrid powertrain, you create the thoughtful amalgam of varying tech that can help improve fuel economy. Oh and it just happens to be on one of the safest cars on the road today. How do you like them (green) apples?

Article source: http://news.boldride.com/2013/05/mit-roundtable-talks-future-of-auto-industry/29321/

High input costs, power tariffs spell doom for the sector

The country’s Rs 25,000-crore forging industry is under stress due to slowdown in the automotive sector and increasing input costs.

“The sector, which had grown by 18 per cent during 2011-12 over the previous financial year, is set to see a flat business during 2012-13, mainly impacted by the slowdown in the automotive industry,” said Babu Rao, President of Association of Forging Industry of India and Managing Director of GSB Forge.

Explaining the industry’s challenges, he said the sector is faced with increasing costs of steel and other raw materials and growing power tariffs, which gets accentuated in the Southern States.

In addition, the sector is dependant on the automotive business which contributes to about 70 per cent of total business.

For instance, in a State like Tamil Nadu or Andhra Pradesh, where industry is subjected to power cuts, they have to depend on costly power supplies or generate power using diesel gen-sets, which work out to Rs 12-15 per unit.

Such high input costs, make the forging industry unremunerative in the backdrop of growing global competition, he said.

The forging industry has installed capacity of 3.75 million tonnes a year and achieved 75 per cent capacity utilisation at 2.8 million tonnes. In fact, this could have gone up but for the overall slowdown, he said.

The industry players are caught between its suppliers, who are increasing costs and original equipment suppliers (including automotive sector players), who want to keep tight control on costs citing slowdown, he said.

DIVERSIFICATION

In order to diversify and reduce dependence on the automotive sector, the forging industry consciously took to some other sectors, including power and manufacturing. However, the overall economic slowdown has impacted them also.

In a fragmented forging industry, majority of the companies come under the small and medium industry category. They do not have the flexibility to adjust to such demanding environment.

While costs are going up, there are challenges in the power sector and increasing competition from Chinese companies. In fact, Chinese companies are supplying equipment and also providing relatively cheaper credit to power sector companies.

rishikumar.vundi@thehindu.co.in

Article source: http://www.thehindubusinessline.com/companies/forging-industry-hit-by-auto-sector-slowdown-to-diversify/article4721358.ece

NEW YORK, NY–(Marketwired – May 16, 2013) – The last several years have proven tumultuous for America’s automotive industry, but according to the pros at Xzilon, good news is beginning to pour in — leading members of the automotive industry to feel more optimistic than they have since before the recession. Xzilon points to a recent report from Bloomberg, which reveals that U.S. auto sales are better than they have been at any point since 2007. As the auto industry hovers near pre-recession levels, much of the credit is due to historically low interest rates. Xzilon has issued a new statement to the press, commenting on the Bloomberg article and celebrating the auto industry’s comeback.

Xzilon, a company that manufactures protective coating products for automobiles and for airplanes, has a vested interest in the auto trade — but in their new statement to the press, the company says that the auto industry’s rally is ultimately good news for all of us. “The auto manufacturing industry has long been the heart of America’s manufacturing, and, indeed, one of the true stalwarts of our economy,” says the new Xzilon press statement. “Thus, the news of a healthy, thriving auto industry is not just good for those of us who work to design or protect vehicles; it is reason enough for nationwide celebration!”

The Bloomberg report points to recent figures posted by General Motors and AutoNation Inc. — the largest auto manufacturer and auto dealership group in the country, respectively. Both companies have attributed their recent successes to the ample financing currently available for new cars and trucks. New care sales for the previous year surpassed 15 million — the highest rate since 2007.

“The fact that the auto industry is roaring back to life is only half the story here,” offers Xzilon. “The other part of the story is that there is once again financing available — meaning that lenders are lending again. For consumers and auto companies alike, this is a tremendous boon!”

In fact, the report from Bloomberg speculates that no industry has benefited more from the unfreezing of the credit markets than the automotive industry. The report notes that leasing has returned in a big way, with close to 25 percent of all new vehicle sales being leases.

In addition to the successes of GM, Bloomberg reports that other American auto companies are experiencing growth. In fact, the auto company to gain the most in the early months of 2013 is Ford.

Xzilon is a company that manufactures and sells protective automobile coating, in all 50 states. The company also makes products and services aimed at airplanes. Xzilon is passionate about cultivating growth within the automotive industry, and zealous for providing auto dealers and buyers alike with the best products for keeping vehicles safe and protected.

ABOUT:

Xzilon is a company that proudly manufactures protective coating products, designed to keep automobiles and airplanes safe, lustrous, and looking brand new. The company provides its products to dealers and auto retailers across the country. Additionally, Xzilon is pleased to lead its industry in the manufacturing of “green” products. Ultimately, Xzilon is zealous to provide auto owners with the most reliable vehicle protection products on the market.

Article source: http://www.marketwire.com/press-release/xzilon-celebrates-positive-news-from-automotive-industry-1791695.htm

FOR a first timer, who is visiting the venue of the eighth Lagos Motor Fair at the Eko Hotels and Suites, Victoria Island, he or she would think that what is going on there was a Lagos carnival festival because of the aerial of auto companies who turned up en masse to showcase their products.

During the opening day ceremony of the fair, it was greeted with colourful flags of many auto companies that operated in the country, including major oil marketers who came out en masse despite the heavy down pour to display their products to participants and customers.

In any case, the turn out of various auto companies at the fair has summed up the event as the citadel for harnessing the abundant potentials in the nation’s automotive sector.

The expo, which is eighth edition in succession, has became the front burner for auto companies as it has put Nigeria on the map of international auto shows.

Specifically, the auto show has become the avenue for testing the development of the nation’s automobile industry.

Speaking at the opening ceremony of the fair, Lagos State Governor, Babatunde Raji Fashola said that the motor fair had demonstrated that the state remained the hub for growth and development of the nation’s automobile industry.

According to Fashola, the role Lagos State play towards the growth of the nation’s economic development could not be overemphasised, adding that for Nigeria to be adjudged with a successful international auto show, Lagos must always be the citadel for the organisers.

“Lagos is so central to the development of the automotive sector that we cannot but do all we can to seeing that this important market enjoys the full benefits of having a befitting auto show. We have packaged a show that could effectively be used by the participants and visitors to maximise the benefits derivable in the Nigerian automotive sector.

He continued: “The Lagos Motor Fair remains the unparalleled gathering of established brands as well as new entrants and the range is wide. From passenger busses, cars, trucks, spare parts, accessories, lubricants, financials and many more.”

Chairman, Organising Committee and Managing Director, Ifeanyichukwu Agwu said that the importance of continuously staging the show could not be over-emphasised, adding that to be able to consistently host and take the auto show to world class standard required the support of stakeholders in the industry as well as the government.

“I therefore call on the government, especially the Lagos State government to support our efforts at hosting this annual auto show to the standard that befits the state’s status as the fastest growing mega city in the world. The opportunities and potentials of Lagos motor shows is one the state could leverage on to promote economic ‘tourism’ which will give a big boost to her economy,” Agwu said.

One unique lesson of the expo was the international affiliations, as there were many foreign companies that participated and took space to showcase their products.

One of the foreign exhibitors was the CC auto FTZ, the distributors of FAW buses and trucks in Nigeria- a first time participant from the City of Changchun Municipal Peoples Government of the Jilin Province of the People’s Republic of China, which was led by the Deputy Mayor of the Province, Gui Guangli to the fair.

Article source: http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=121880:lagos-motor-fair-avenues-for-harnessing-nigeria-potential-in-auto-industry&catid=100:auto-wheels&Itemid=605

NASHVILLE, TN — (Marketwired) — 05/15/13 — EPICOR INSIGHTS 2013 – Epicor Software Corporation, a global leader in business software solutions for manufacturing, distribution, retail and services organizations, today announced the general availability of version 6.0 of its Honda Approved Epicor® CMS enterprise resource planning (ERP) solution for the automotive industry, featuring new functionality and usability enhancements made across all product modules to drive improved business performance. Key highlights of Epicor CMS 6.0 include new quality control tools, manufacturing execution system (MES) touch screen capabilities now available with Production Manager, and enhancements to repetitive manufacturing capabilities.

“Epicor continues to expand the functionality of Epicor CMS to help address the increasingly complex needs of automotive manufacturers and businesses that supply to the automotive industry,” says Malcolm Fox, vice president, product marketing, Epicor. “With this new release, Epicor provides a complete ecosystem of industry-specific features and products for Epicor CMS that enables our customers to realize even more business value from the solution.”

New Quality Control Capabilities for Detail Inspections
New production and quality management features in Epicor CMS provide better control when dealing with detail inspections on the shop floor. Enhancements include the ability to specify whether or not certain inspection procedures should be mandatory, record those test results with lot or serial number, and use event-based utilities to allow the operator to report inspection results at the machine. Rather than creating an inspection request when the production threshold is reached, a notification screen will prompt the operator to begin inspection and then report the results and disposition. The employee tag is also entered to identify the person performing the inspection.

Touch Screen MES Capabilities Now Available with Production Manager
For those customers looking to collect real-time manufacturing data from the shop floor and/or error-proof production reporting and container label creation, the latest version of Epicor CMS adds Production Manager to deliver these MES capabilities. Operator touch screen solutions now provide a Microsoft Windows® 8 Metro Style UI (user interface) that supports machine PLC based automation of production reporting to ensure that the right part is in the right container with the right label, every time. An accurate understanding of the real sources of machine downtime enables well-targeted continuous process improvement activities to unlock hidden capacity within an organization’s plant. Available as an add-on module, Production Manager enables customers to further extend the value of their investment in Epicor CMS.

ZANINI AUTO GRUP, S.A. is one of the newest customers to adopt Epicor CMS. ZANINI specializes in the development and manufacturing of original equipment plastic components for the automotive industry and is a worldwide leader in the wheel trim market. “The unique functionality in Epicor CMS that is tailored specifically to the automotive industry was the key to implementing the solution across our production sites in North America,” says Rod Spain, plant manager, ZANINI. “We needed a comprehensive solution that ensures we are prepared to meet our customers’ needs now and in the future, as well as help us to gain new opportunities with companies such as Honda.”

About Epicor CMS
Epicor CMS is a powerful ERP software solution built for the automotive industry. Designed for intensive supply chains, Epicor CMS helps eliminate shipping errors, tighten inventory accuracy, and strengthen enterprise-wide control and supplier management. Customized for the automotive industry from quotations, financials, and inventory all the way to electronic data interchange (EDI) mapping, product configuration, production and shipping, Epicor CMS brings value with quick implementation and ease of use. Built-in features and functionality to support automotive organizations’ most important requirements include:

• Approved by Honda of North America, Inc. to meet their stringent EDI, shipping and labeling requirements. Used by many automotive manufacturers, Epicor CMS delivers a comprehensive solution to ensure compliance with Honda’s Star, Delta and GPCS systems in North America.
• Improved lead times and waste reduction through implementation of lean strategies for automotive manufacturers.
• Support for AIAG-compliant labels, MMOG/LE compliance, strong product lifecycle management (PLM) for product data and document management, and advanced quality management for handling PPM, APQP, PPAP, and TS 16949.
• Exceptional project management capabilities with automotive manufacturing software solutions.
• Complete visibility with a comprehensive end-to-end solution containing built-in dashboards.

For more information on Epicor CMS, or other software solutions available from Epicor, please call +1-800-999-6995 or email info@epicor.com.

About Epicor Software Corporation
Epicor Software Corporation is a global leader delivering inspired business software solutions to the manufacturing, distribution, retail and services industries. With over 40 years of experience serving small, midmarket and larger enterprises, Epicor has more than 20,000 customers in over 150 countries. Epicor enterprise resource planning (ERP), retail management software, supply chain management (SCM), and human capital management (HCM) enable companies to drive increased efficiency and improve profitability. With a history of innovation, industry expertise and passion for excellence, Epicor provides the single point of accountability that local, regional and global businesses demand. The Company’s headquarters are located in Dublin, California, with offices and affiliates worldwide. For more information, visit www.epicor.com.

Follow Epicor on Twitter @Epicor, @EpicorUK, @EpicorEMEA, @EpicorANZ, @EpicorLAC, @Epicor_Retail, @Epicor_DIST, @EpicorPrcsMFG and Facebook.

Epicor, Epicor CMS and the Epicor logo are trademarks of Epicor Software Corporation, registered in the United States and other countries. Other trademarks referenced are the property of their respective owners. The product and service offerings depicted in this document are produced by Epicor Software Corporation.

Contact:
Jessica Riggs
Senior Specialist, Public Relations
Epicor Software Corporation
+1 949 585 4160
jriggs@epicor.com

Article source: http://www.sys-con.com/node/2660768

The Automotive Industry

Details

Category: Asean Economic Community

Published on Wednesday, 15 May 2013 19:01

Written by Henry J. Schumacher / Asean-EU Perspective

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WITH the implementation of the Asean Economic Community (AEC) 2015, Asean will reach a prominent position to attract foreign investment. As Asean is set to become the world’s sixth-largest automotive market by 2018, it is expected that regional sales will double to nearly 4.7 million vehicles from 2.4 million last year.

Therefore, its 10 member-states continue to facilitate significant investments to flow into this region. A harmonization of standards and regulations has to be seen as essential step to the success of AEC 2015. Only with such a harmonization can the creation of a single manufacturing base as well as free movement of goods be secured.

According to the “CEO 360 Degree Perspective of the Automotive Industry in Asean,” Indonesia, Malaysia, Thailand and Vietnam are demonstrating a compound annual growth (CAGR) of 10.1 percent. Sales in Thailand and Indonesia have reached over 1 million vehicles each, and a significant increase in production is expected based on local demands, with Thai dominance of nearly 2.5 million vehicles produced last year alone.

In addition to serving the regional market, Asean has assumed a greater role as a global supplier of automotive, and is expected to grow in importance due to a competitive production base with strong competencies in certain product ranges. This will increase substantially not only in terms of economic growth, but also employment and technological advancement.

The Philippines is better getting its act together in becoming one of the automotive production centers in Asean. Henry Co, formerly with Ford in the Philippines, outlined in a recent talk that all countries that have strong industrial manufacturing base are involved in automotive production. In his view, the Philippines must decide to develop the automotive industry in a targeted incentives approach. Henry added that once the initial production step is made, the supply industry will naturally follow.

Key recommendations for Asean:

o   Alignment of automotive products with international United Nations Economic Commission for Europe (UNECE) standards;

o   Asean to adopt UNECE regulations for automotive products and to work closely with all member-countries in the region to align the 19 priority UNECE standards. Target is to achieve a single regulatory regime in Asean by 2015. Asean should implement identical testing procedures using the same metrology method, standards and application regulations.

o   Consolidation of approval and homologation processes;

o   Asean to create a single regulatory regime for approval and homologation processes to improve time and cost efficiency. The automotive industry in Asean strongly advocates relevant authorities to accept test reports by qualified foreign bodies and align their standards in order to facilitate exports based on UNECE-approved regulations. Implementing such a regime will assist in creating economies of scale in production countries like Thailand and Indonesia and hopefully soon in the Philippines.

o   Adoption of higher fuel quality and emission standards;

o   The introduction of higher fuel quality and emission standards is the pre-requisite for the introduction of environmental-friendly low emission technologies. In order to prepare for the AEC 2015 and to enable free movement of goods, Asean will have to implement more stringent fuel quality and emission standards and harmonize those standards across the region. A concrete road map of implementation is urged by automotive manufacturers and the oil companies.

o   Harmonization of the definition on local content requirements;

o   The automotive sector is recommending a harmonization of related implementation procedures for local content and Rules of Origin application as part of the approval and homologation processes in order to become a single manufacturing hub in 2015.

o   Technology-neutral vehicle taxation scheme;

o   Asean is urged to promote to member-countries the introduction of a technology-neutral emission based taxation scheme, such that vehicles with low CO2 emissions would receive a tax relief whereas high-fuel consumption and high CO2 emission vehicles would be taxed higher, independent of their power train technology. Availability and quality of skilled work force; and

o   Asean governments are encouraged to facilitate public-private partnerships in engineering and technology training to ensure that the work force meets industrial demand. In the Philippines dual education and apprenticeship need to be revived. The implementation of the Ramos-era legislation is over-bureaucratic; the Technical Education and Skills Development Authority is encouraged to create a public/private sector working group to make the implementation easier.

Article source: http://www.businessmirror.com.ph/index.php/business/asean-economic-community/13499-the-automotive-industry

“I don’t think there is need to be concerned with the industry right now. We are seeing slight increases in delinquency. However, they are still at historic lows,” said Melinda Zabritski with Experian Automotive. “Despite a slight increase in delinquency, the charge-offs when they do occur are lower today than they have been in years.”

Repos below Recession Levels

Four years ago, at the depths of the recession, the repo man was busy.There were plenty of reports of auto repo facilities packed with recently bought cars and sport utility vehicles the owners stopped paying for.

Visit most repo yards today and it’s a far different story. Overall, the repo rate for all auto loans is still one half of 1 percent.

(Read More: Chevy Enters Luxury Pickup Race With Silverado)

Dealers are noticing a difference in the people coming into showrooms.

“People are not upside down like they used to be. Unemployment of course is getting better, especially here in the Midwest after being stagnant for a while,” said Scott Adams, who owns Toyota, Chrysler, Dodge and Jeep dealerships outside of Kansas City.

“So you don’t see the upside down, awful credit that you used to. These people can buy a car and they are trying to buy something that they really need.”

(Read More: Bigger Is Better: SUVs and CUVs Rule the Road in China)

Adams said he’s also seeing fewer people stretching too far or trying to trade up to be something that will be tough to afford. Instead, SUV buyers are increasingly opting for lower cost crossover utility vehicles.

Subprime Credit Continuing to Grow

Meanwhile, lenders believe the subprime auto market will continue to grow for two reasons.

First, as the economy expands and more people get jobs, those with riskier credit records move into new jobs that give them the means to buy a car or truck. Second, auto lenders are feeling more comfortable writing loans for those with lower credit scores. After all, the paper is backed by a car and the charge-off for bad loans is below the five-year average. In the second quarter of 2010, the average charge-off for a busted loan topped $11,000.

(Read More: The ‘New DeLorean’—At Half Price)

“About 50 percent or so of people who are buying cars are subprime, a small percentage of those will go delinquent, but this is still a very strong market.” said Zabritski.

“Used vehicle values are very strong, so when some of those used vehicles do end up being repossessed the losses are not as significant with today’s strong market as they would have been several years ago.”

—By CNBC’s Phil LeBeau. Follow him on Twitter @LeBeauCarNews

Questions? Comments? BehindTheWheel@cnbc.com

Article source: http://www.cnbc.com/id/100736554

By Ben Klayman

SAN JOSE CHIAPA, Mexico |
Sat May 4, 2013 6:54pm EDT

SAN JOSE CHIAPA, Mexico (Reuters) – The automotive industry’s growing love affair with Mexico was celebrated here on Saturday as Audi executives laid the foundation stone for its first assembly plant in the Americas.

Volkswagen AG’s (VOWG_p.DE) premium brand is joining a parade of automakers who have announced plans to build cars in a country that is seen as a doorway not only to the rest of North and South America but to the world. Audi officials said the $1.3 billion plant will open in three years and eventually be the German brand’s only source globally for its Q5 SUVs after it opens in mid-2016.

“Mexico was chosen very deliberately,” Audi Chairman Rupert Stadler told more than 500 industry and government officials outside the town of San Jose Chiapa in central Mexico. “It is situated between North and South America, making it a linchpin between the two regions.” He added that Mexico was an “ideal export base.”

With numerous free trade agreements, a cheap, well-educated labor force, and proximity to the lucrative U.S. auto market, combined with growing demand in South America, automakers have been lining up for two years to set up shop in a country that could eventually overtake Brazil as Latin America’s biggest economy.

Audi’s ceremony came two days after Japanese automaker Honda Motor Co (7267.T) said it would build a $470 million transmission plant in the central state of Guanajuato, near an $800 million assembly plant that is expected to begin operations in February 2014.

Other automakers who have announced plans to open plants in Mexico include Mazda Motor Co (7261.T) and Nissan Motor Co(7201.T), while companies already there – General Motors Co (GM.N) and Ford Motor Co (F.N) – continue to pump hundreds of millions into their plants. The new plants also are attracting supplier factories and more could be on the way as Nissan’s Infiniti brand, BMW (BMWG.DE) and Hyundai (005380.KS) are weighing the possibility of building plants in North America.

When Nissan said in January 2012 that it would build a $2 billion plant in the central state of Aguascalientes to open in late 2013, CEO Carlos Ghosn called Mexico, where it has now two plants and is the market leader in sales, production and exports, a “key engine” to Nissan’s growth in the Americas. The Japanese automaker exports to 115 countries from Mexico.

Last year, Mexico attracted $3.7 billion in announced investments by automakers alone, matching the U.S. total, according to the Center for Automotive Research in Ann Arbor, Michigan. IHS Automotive estimated that investments by automakers in Mexico over the next few years could total $3 billion annually.

From 2000 to 2013, vehicle production in Mexico has risen almost 3 percent annually, compared with declines in the United States and Canada of 1.3 percent and 2.4 percent, respectively, according to Boston Consulting Group. That trend will hold through 2018 as Mexico’s production is forecast to grow 5 percent annually, compared with 3 percent growth in the United States and a 4 percent decline in Canada.

Mexico is the eighth largest producer of vehicles in the world.

Audi executives touted Mexico’s good infrastructure, competitive cost structures and existing free-trade agreements in picking the site for the new plant, which will cover an area the size of 400 soccer fields. They called the Mexian plant a “dream moment.” VW has a VW plant in nearby Puebla City and an engine plant in Silao.

VW has said it wants to boost sales in the United States, the world’s No. 2 auto market, to 1 million vehicles by 2018, including 200,000 from Audi. It is the same time frame in which VW has pledged to become the world’s largest automaker. Last year, VW’s U.S. sales totaled more than 577,000, including 139,310 for Audi.

The new plant in Mexico is also part of the automaker’s plan for Audi to reach annual global sales of more than 2 million by 2020 with the aim of snatching the luxury crown from BMW globally as well as challenging its luxury rival and Daimler’s (DAIGn.DE) Mercedes-Benz in the U.S. market. BMW and Mercedes have had production footprints in North America since the 1990s and each sell about twice as many cars in the United States as Audi.

Access to the lucrative U.S. market isn’t the only draw though as Mexico has 12 free trade agreements with 44 countries, while the United States’ 14 trade deals cover only 20 countries. Xavier Mosquet, leader of Boston Consulting Group’s automotive practice, said Mexico was the “better choice” over the United States for exporting to the rest of Latin America.

Also in Mexico’s favor are the rising labor costs in China, lower transportation costs and even Mexico’s own growing economy, industry officials and analysts said.

In 2010, Mexico’s total compensation per worker was $3.94 an hour, said Kristin Dziczek, director of labor and industry at the Center for Automotive Research, citing Bureau of Labor Statistics data. That compared with $3.45 in China, $34.59 in the United States and $52.60 in Germany.

And the Mexican work force is increasingly well educated. Audi officials say 2,500 applicants, many with degrees, have expressed interest in the 3,800 jobs they will have at the San Jose Chiapa plant and they haven’t even advertised the jobs yet.

Nomura said last August that Mexico could overtake Brazil as Latin America’s top economy as early as 2022. Mexico’s annual economic growth is projected to increase 4.5 percent in that period, up from 2.1 percent annual growth from 2002 to 2010.

Mexico also serves as a natural hedge for many foreign automakers against stronger currencies at home or disasters like the tsunami in 2011 that hurt the Japanese automakers, IHS analyst Guido Vildozo said.

“It’s probably one of the reasons why you’re hearing that some of the other automakers are also kicking the tires,” he said.

(Reporting by Ben Klayman in Puebla, Mexico; editing by Gunna Dickson)

Article source: http://www.reuters.com/article/2013/05/04/us-audi-mexico-idUSBRE9430D220130504