Chrysler raises funds to repay US loan

Detroit Free Press -After three weeks of negotiations with banks and bond investors, Chrysler said Thursday it has raised the money necessary to repay all of the $7.5 billion in debt it owes to the U.S. and Canadian governments less than two years after it emerged from Chapter 11 bankruptcy.

The Auburn Hills automaker said it sold $3.2 billion in bonds and obtained a $3.2-billion loan as well as a $1.3-billion credit facility from investors and commercial lenders.

Chrysler intends to use the proceeds of the bonds and the loan along with a $1.27-billion investment from Fiat to repay its government loans four years earlier than required under an agreement reached as it emerged from bankruptcy on June 10, 2009.

The refinancing is a testament to the rapid progress Chrysler has made under the management of Sergio Marchionne, CEO of Chrysler and Italian automaker Fiat, said Kim Korth, president of Grand Rapids consulting firm IRN.

Under Marchionne, Chrysler has upgraded or redesigned 16 cars and trucks in two years and reported a quarterly profit of $116 million for the January-March period.

"I think he is as much of a transformational leader for Chrysler as (Alan) Mulally has been for Ford," Korth said.

By replacing its government loans with a commercial loan and bonds, Chrysler aims to shed some of the stigma of being rescued by taxpayers and reduce its annual interest payments.

The interest rate on Chrysler's new commercial loans is 6% while the interest rate on its bonds is just more than 8%, compared with an effective interest rate on Chrysler's government loans of about 11%.

Last year, Chrysler's $1.2 billion in interest payments cut into the company's operating margins and contributed to quarterly losses.

"The company needed to address its balance sheet and it needed to repay the U.S. and Canadian governments -- that is the primary goal of this loan and bond offering," said Kip Penniman, a credit analyst with KDP Investment Advisors.

Despite a flurry of last-minute negotiations, analysts viewed the final package as a big win for the automaker.

"They kill two birds with one stone by paying back the government and having lower-cost debt," said Van Conway, a turnaround expert with Conway MacKenzie in Birmingham.

Chrysler said Thursday it expects all of the transactions to close on Tuesday, as previously reported by the Free Press.

Repayment of the loans and Fiat's investment allow Fiat to increase its ownership of Chrysler from 30% to 46%, according to the company's 2009 agreement with the U.S. Treasury.

Even with the repayment of the loans, the U.S. government will still own 6.6% of Chrysler, down from 8.6%, after the transactions close. That's because the government became a lender and a shareholder as part of the 2009 restructuring.

Canada's stake, meanwhile, will drop to 1.7% from 2.2% and the UAW's Retiree Medical Trust will own 45.7%.

Wilmer Stith, portfolio manager, MTB Intermediate-Term Bond Fund in Baltimore, said Chrysler sought to refinance its debt when investors were eager for deals.

Stith also said the refinancing should benefit Chrysler and Fiat as the companies work to leverage each other's product strengths and catch up with larger and stronger competitors, Stith said.

"This deal will further propel the Fiat ownership of Chrysler," Stith said."All of this hopefully will result in a quick consolidation execution on the part of Chrysler globally."

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Saab already restarted production, Pangda says

Gasgoo.com (Shanghai May 20) -Saab has already restarted production, sources from Pangda told theBeijing Timestoday. The news comes after Pangda's agreement with Saab's parent company Spyker to invest 30 million euros ($42.82m) in the ailing Swedish automobile maker.

Furthermore, Pangda will be looking to open 50 dealers in the country by next year. In coordination with Saab's preferred market base, the dealers will be located in first- and second-tier cities.

As for the question of domestic production, sources close to Pangda were confident that Saab would be able to use its mastery of advanced technology to its fullest potential.

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Turkish April auto sales up 47.3% in Turkey

World Bulletin -Turkey became the 6th in European auto sales ranking with this figure, stated Automotive Distributors Association on Tuesday.

Automobile sales in Turkey increased 47.3 percent to 53,835 in April 2011 when compared to April 2010.

Turkey became the 6th in European auto sales ranking with this figure, stated Automotive Distributors Association (ODD) on Tuesday.

While automobile sales in Europe in April 2011 dropped 3.8 percent to 1.1 million when compared to April 2010, Turkey reached the highest sales figure both in April and January-April period in 2011.

In January-April period of 2011, auto sales in Turkey increased 70.3 percent to 176,730 when compared to the same period of 2010. With this figure, Turkey became the 8th in European automobile market in 4-month period.

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Axeon appoints ex-Peugeot India boss Rajesh Nellore

The Economic Times (New Delhi) -European electric car battery maker Axeon today said it has appointed former Peugeot Citroen India Managing Director and CEO Rajesh Nellore on its advisory board.

"We are delighted to have Rajesh join our advisory board alongside Bob Dover, former Chairman and CEO of Jaguar Land Rover. Rajesh brings a wealth of international experience to help us expand our business internationally, especially in the fast growing Asian economies," Axeon Chief Executive Officer Lawrence Berns said in a statement.

Prior to this appointment, Nellore was working as the CEO and Managing Director (India) of PSA Peugeot Citroen, where he had led the European car maker on its India entry plans for the last three years.

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Audi's April sales exceed 23000

Gasgoo.com (Shanghai May 18) -In keeping up with its positive sales trend, luxury car manufacturer Audi's sales in China last month hit a new high of 23,355 vehicles,China Securities Newsreported today. The sales result is not only 20.4 percent higher than that from last April, but also places Audi ahead of its competitors in the upper level segment.

FAW Volkswagen was under tough supply limitations at the beginning of this year, which started to ease off last month. In one clean sweep, the joint venture was able to solidify its place in every segment in the market, with its A4L sedan (pictured above) and Q5 SUV becoming best sellers.

Audi's total sales from January to February exceeded 4.2 million vehicles, an increase of 17 percent from first quarter of 2010. CEO of Audi's sales and marketing operations Peter Schwarzenbauer was proud of his company's results, saying"Audi's strong performance across the world gives us a lot of confidence that we will meet our annual sales target of 1.2 million vehicles.

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Ford preparing for a jolt to the car market

The Globe and Mail -Ford Motor, says Executive Chairman Bill Ford, is on the cusp of launching an entire line of electric cars globally and by 2020 about one-quarter of Ford's global fleet will be electrified in one way or another.

Writing in Fortune magazine, Bill Ford, the great-grandson of company founder Henry Ford, argues that for the first time since the Model T,"some of the most fundamental and enduring elements of the automobile are being radically transformed." He means the movement to replace the gasoline engine with an electric motor and a battery pack is about to start in earnest.

Ford Motor, he writes, will start this year"with an all-electric Ford Focus, followed by a plug-in hybrid and an all-electric version of the company's new global C-MAX vehicle, a sporty five-seater.

"And we're not the only ones going electric. GM (General Motors with the Volt) and Nissan (with the LEAF) already have electric vehicles on the road. The other majors have plans to launch their own versions over the next couple of years too."

So what does"electrified" mean?

For Ford and other car companies, an electrified vehicle has some major portion of its power delivery based on electric drive. The company is"hedging its bets" by developing hybrid, plug-in hybrid and fully electric vehicles, Ford wrote, because he isn't sure which technology ultimately will prevail.

Bill Ford also plays the national security card in his article. Asian countries, he writes, lead the world in the development of the lithium-ion battery and will likely retain that lead if the U.S. Government does not aid the American battery industry.

"I think it's a matter of national security to have a competitive American battery industry," Ford wrote."Washington should increase r&d spending here unless they want to cede the development of batteries to other nations."

Perhaps the most interesting part here is how Bill Ford articulates a fairly comprehensive vision for a world where electric vehicles are commonplace. That is, he looks at the human element in all this and how other technologies can help to make EVs user-friendly.

Electric vehicles will have real-time information flowing through them," he writes."You'll be able to use your smart phone to check how much juice you have left in your car and to find an empty charging station.

"In the near future cars will also be able to talk to one another in real time using GPS and Wi-Fi. The system will warn you when another car runs through a red light in an intersection, giving you enough time to brake and avoid a collision."

The potential environmental benefit is huge, he adds."Smart" in-car systems will"route you away from traffic jams and even help you find free parking places– all of which cut down on the energy wasted while idling or looking for an empty spot."

The Ford Chairman predicts the gasoline and diesel fuels will only get more expensive in the future. Turmoil in the Middle East, he writes, along with China's growing energy demand and the increasing challenge to find more oil all suggest higher prices, which means"customers are going to care increasingly about fuel efficiency."

Finally, Ford says his company is"making money and has invested in significant amounts in electric car hardware, and it's ready to go, but the country is not ready to go right now."

So he's calling for a"smart" electrical grid and the creation of millions of car-charging stations in garages and in public spots across the U.S. To tie them all together, he wants governments and utility companies to create the information technology to tie the entire system together.

"The Chinese government predicts that 5 million electric vehicles will be on their roads by 2020, and they can almost ensure that those projections will be met. (Currently about 70 million cars ply its roads.)," he writes.

"Beijing and the regional governments are heavily subsidizing electric cars– cheap land, loans, and subsidies– and they have a huge number of government scientists involved in battery research at a scale no private company could match."

In short, government has a role. Without progressive-thinking government action, the alternative is for the United States and by extension other Western developed countries to fall behind developing nations such as China. His call to action is around the national security issue of energy independence combined with what he calls the"climate-change problem."

It feels odd to write this, but Bill Ford, the head of a car company, sees a role for government in his and his company's"green" agenda.

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Haima begins investment in Zhengzhou production site

Gasgoo.com (Shanghai May 16) -Haima Auto is to invest 3 billion yuan ($462.2m) in its new factory in Zhengzhou, Henan, officially commencing next year, theBeijing Newsreported today. In addition to its existing production sites in Zhengzhou and Haikou, Hainan province, the new factory will bring Haima's total number of sites to three.

According to Ou Yongfu, CEO of Haima's sales division, the new site's technology department and engine factory are already being constructed. The new site will boost Haima's total Zhengzhou output to over 200,000 vehicles."{Production for} Haima in Zhengzhou will expand to include subcompacts and some minivans in the future," Mr. Ou added.

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Spyker's Saab Auto, Hawtai drop Chinese carmaking plan as clearance fails

Bloomberg News -Saab Automobile, the Swedish carmaker that agreed last week to produce autos in China with Hawtai Motor Group, faces fresh uncertainty over its future after the plan failed win approval from authorities in the Asian nation.

The manufacturers will continue talks about cooperation on a non-exclusive basis after they were"forced to terminate the agreement" when it became clear that Hawtai couldn't get Chinese consent, Spyker Cars NV (SPYKR), the Dutch supercar maker that owns Saab, said in a statement. Spyker fell the most in six weeks.

The deal would have helped Trollhaettan-based Saab ease a cash shortage that forced it to halt output on March 29 and to stage a comeback in China, where it has been absent since 2008. The carmaker can still draw on a 30 million-euro ($43 million) loan arranged last week and is also seeking further funding from the European Investment Bank, while Russian banker Vladimir Antonov has said he'd like to take a stake.

"They have to look for another investor, it's as simple as that," Tom Muller, senior analyst at Theodoor Gilissen Bankiers NV in Amsterdam, said by telephone today."They need a stable long-term investor. Whether that's a financial investor or car- sector investor doesn't matter."

Spyker Cars dropped as much as 16 percent to 3.52 euros, the steepest intraday decline since March 30, and was trading at 3.70 euros as of 1:46 p.m. in Amsterdam. That pared the stock's gain this year to 5.8 percent.

Hawtai, based in Beijing, agreed on May 3 to invest 120 million euros ($171 million) and receive a stake of as much as 29.9 percent of Zeewolde, Netherlands-based Spyker. The Chinese company also agreed to lend Spyker 30 million euros.

Agreement Terms

The agreement would have let Hawtai produce Saab vehicles locally for the Chinese market, starting in 2013 with the Swedish carmaker's upgraded 9-3 model. The deal also required the approval of the EIB and the Swedish National Debt Office, which is guaranteeing a loan to Saab from the bank.

"Hawtai has nothing further to add at this stage beyond what was announced at the press conference on May 3," Xinyi Huo, the automaker's strategic planning director, said in a phone interview with Bloomberg News.

Spyker Chief Executive Officer Victor Muller said by telephone from China today that local authorities wouldn't clear the deal. He declined to comment further. Spyker's statement didn't specify any Chinese party that wasn't giving approval.

Muller had predicted on May 3 that the deal would be fully cleared within six to 12 weeks. Saab said today that it continues to work on securing short- and medium-term funding, including talking with"various" Chinese partners.

Cash Need

Saab probably needs between 50 million euros and 100 million euros to carry it over the next two or three quarters, Muller, the Theodoor Gilissen analyst, said. He isn't related to the Spyker CEO.

Saab aims to restart production after it has won clearance from the EIB, the European Union's lending institution, to draw another 29 million euros in loans, or after it secures funding in other ways, the carmaker said.

The Swedish manufacturer is also trying to bring in Russian banker Antonov. General Motors Co. (GM), Saab's former owner, tentatively agreed on April 28 to allow Antonov's investment.

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China imports 195000 vehicles in Q1

Gasgoo.com (Shanghai May 13) -According to recently revealed statistics, China imported 195,000 vehicles in the first quarter of this year,China Securities Newsreported today. The amount, which was 40.9 percent higher than last year, exceeded growth in domestic sales by a large margin.

SUVs were the fastest growing import segment, while growth in imports of minivans were much lower and sedans lower still. Regardless, small cars of 3.0 L or lower still made the majority of imports (over 80 percent). The most imported brand was Mercedes-Benz, with BMW and Lexus following behind.

Wang Cun, head of the China Automobile Trading's marketing and sales division, predicted the country to import a total of 800,000 vehicles this year, with 190,000 vehicles coming in next quarter. He said that the effects the Japanese earthquake had on domestic manufacturers may disappear by the third quarter, allowing for Chinese production to increase.

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Russian businessman Antonov still wants Saab stake

Reuters (Stockholm) -Russian businessman Vladimir Antonov still wants to invest in Saab despite the collapse of a funding deal with China's Hawtai Motor Group for the Spyker-owned (SPYKR.AS) Swedish carmaker, his representative said on Thursday.

"From Antonov's side and Converse Group, we are still very interested and eager to get into Saab, to invest in Saab." said Lars Carlstrom, Antonov's representative in Sweden.

"From the Converse side, we are optimistic about the China situation. The interest in China has been enormous about Saab."
 

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Renault named top Gulf automotive brand

TradeArabia News Service -Renault has been named the fastest-growing automotive brand in the GCC region at the end of the first quarter, according to the latest report by the Middle East Automobile Council (MEAC).

The positioning complements the car and commercial vehicle manufacturer’s 214 per cent sales growth in the first quarter of 2011, compared with the same period in 2010, the report added.

This growth led Renault to be the third highest selling European automotive brand in the GCC, after BMW and Mercedes, and the leading non-luxury European car maker in the region.

As a result, Renault entered the league table of 'Top 20 Brands' in the Gulf ranking 19th, up nine places compared to the same period last year.

In Saudi Arabia, within just nine months of its return to the market with Gulf Advantage Automobiles, Renault is the leading European brand in the first quarter of 2011, said a top official.

“We are now seeing the full benefits of our return to Saudi Arabia nine months ago. The first quarter figures confirm our excellent 2010 results. Our growth in this period is two and a half times higher than what we achieved throughout 2010," remarked Benoit Turibe, marketing director, Renault GCC.

"Our marketing strategy focusing on regular TV and digital media campaigns on television for our flagships models, the Safrane and Fluence, is meeting with a good market response from both fleet and retail customers and driving more traffic to our showrooms," said Turibe.

"With a complete line-up of cars and light commercial vehicles that meet all kinds of budgets and needs, Renault is now able to fully satisfy customers’ expectations," he added.

Renault, he said, has also confirmed its status as the number one European brand in Oman, a position it occupied at the end of 2010. Simultaneously, Renault has achieved 58 per cent growth in the UAE and 378 per cent growth in Qatar, making it the third European brand in Qatar.

Mustansir Lakdawala, managing director, Renault GCC, said:“Our approach is people-centric. Our regional office and our importers work hard on a daily basis and at every level to give the best possible Renault car ownership experience."

"This starts with product quality and our commitment to locally test all cars prior to their introduction. To enhance our customers’ experience, we plan to boost the number of regional showrooms by 45 per cent with in year end, noted Lakdawala.

"As a result, we are confident Renault will have an excellent sales year in the GCC in 2011," he added.

In addition to the continued growth in the GCC, Renault recently appointed United Trading Automobile Company (UTAC) as official distributors of Renault cars and light commercial vehicles in Iraq.

UTAC is a joint venture formed through a partnership between Iraqi conglomerate Al Bunnia Group, Middle East-based CET Holding Group and AW Rostamani, a respected commercial conglomerate operating in the Middle East and Asia.

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Great Wall most profitable independent manufacturer

Gasgoo.com (Shanghai May 10) -Great Wall Motor wasChina'smost profitable privately-owned independent automobile manufacturer to be listed on the stock exchange last year, theBeijing Postreported today.The Hebei-based manufacturer led rival private enterprises Geely,BYDand JAC Motor in arecently released list of top manufacturers.

Great Wall's total sales last year amountedto 22.18 billion yuan ($3.42b), growing 163 percent from 2009 and bringing the manufacturer a net profit of 2.7 billion yuan ($416m). Second and third place entriesBYDand Geely hadreported net profits of 2.52 billion yuan ($388.3m) and 1.37 billion yuan ($211.1m), respectively. The smaller JAC Motors, while not placing as high, experienced dramatic growth of over 240 percent. Chery Automobile was not listed on the listed since it is currently not open for public trade. 

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China's final ruling says US dumps subsidized cars on Chinese market

Xinhua (Beijing) -China's Ministry of Commerce (MOC) said Thursday in a final ruling that the United States has dumped subsidized sedans and sport utility vehicles with engine displacement of 2.5 liters or bigger on the Chinese market.

The move has harmed China's domestic auto manufacturing industries, the MOC said in a statement on its website.

However, the statement continued to say that China would not take anti-dumping and countervailing measures on these vehicles until further notice.

This came after an initial ruling the MOC announced on April 2, which said a preliminary investigation found the U.S. had dumped cars onto the Chinese market.

China launched the anti-dumping and anti-subsidy investigation into auto imports from the U.S. on November 6, 2009 at the request of the China Association of Automobile Manufacturers, which represents Chinese car-makers.
 

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BYD sales fall in April

Gasgoo.com (Shanghai May 7) -According to a company statement issued earlier this week, BYD's Chinese sales in April fell 12 percent from last year, caihuanet.com reported. BYD attributes the decrease to intensifying competition within the industry and the introduction of recent government policies.

BYD sold 40,000 vehicles in April of this year, compared with 45,400 units sold in April 2010. However, the figure represents a slight increase from its March sales of 40,027 vehicles.

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JAC sees fall in April sales

Gasgoo.com (Shanghai May 4) -JAC Motors has seen a large drop in sales last month, with total growth in sales only increasing marginally from last year, caijing.com.cn reported today. The total sales amount, only 44,500, only represented a 1.88 percent growth increase from earlier months. Outside of truck and sedan sales, JAC saw sales drop in all its other segments, with SUV sales dropping the most, 44.1 percent from last year.

This ends a relatively cold start to the year for JAC, which has sold a total of 194,000 vehicles from January (a 12.91 increase from January 2010 to April 2010). Additionally, JAC saw sales volume decreasing from last month.

Industry insiders attach the blame of JAC's subpar performance to rising fuel costs, the introduction of vehicle purchase restriction, the recent earthquake in Japan and government anti-inflation financial measures.

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GM China to enter Indian market, says president

Gasgoo.com (Shanghai May 5) -President and Managing Director of the General Motors China Group Kevin E. Wale revealed his attention to sell in the Indian automobile market, theBeijing Timesreported today. Mr. Wale said that the joint venture would use so-called 'low-priced vehicles' to enter the market, although any specific details will have to come through GM's Indian joint ventures. The New Sail and recently released Shanghai GM Wuling Baojun are speculated to be among the models to go across the Himalayas.

General Motors India, established at the end of 2009, currently has factories in both Halol, Gujarat and Talegaon, Maharastra with a combined production capability of 225,000 vehicles and 160,000 engines. GM India reportedly will release three commercial and two passenger vehicles (reportedly including the Chevrolet Spark, in reality a rebadged Daewoo Matiz, pictured) in the country next year.

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BMW Q1 profit rises to $1.79b

Associated Press (Frankfurt) -German luxury carmaker BMW says first-quarter net profit rose almost fourfold to euro1.21 billion ($1.79 billion) as sales climbed all around the world, but particularly in China.

Profits were up from last year's euro324 million. Revenues grew 29 percent to euro16.04 billion.

BMW, which includes the Mini and Rolls-Royce brands, saw especially big sales increases in Asia, where it sold 53 percent more cars, including a 72 percent jump in China.

Wednesday's results confirmed a strong quarter for Germany's export-oriented carmakers, whose luxury products are selling strongly in China's booming economy. First-quarter earnings for Daimler AG, maker of Mercedes-Benz cars, nearly doubled to euro1.18 billion and Volkswagen AG, maker of the Audi luxury brand, saw profits more than triple to euro1.7 billion.

For BMW, sales also grew significantly in Europe, despite an uneven recovery there, and in North America.

BMW sold 13 percent more cars in Europe, which remains its biggest market with 200,000 vehicles out of the company's overall sales of 383,000. The European luxury segment has held up better than the car market as a whole, which shrank slightly as scrapping incentives expired in some countries and several countries struggle with debt crises or weak growth.

A strong model mix helped earnings, as several high-margin vehicles such as its X3 SUV and 5-series sedan showed large unit sales increases. Two other high-margin products, the 7-series large luxury sedan and the X5 large SUV, showed more modest increases.

BMW's profit of euro1.84 per share beat analyst estimates of euro1.55, and the shares rose 1.7 percent to euro64.45 in morning trading German time.

Sanford C. Bernstein analyst Max Warburton called the earnings"a serious beat" and pointed to the 11.9 profit operating profit margin, measured as earnings before interest and taxes, saying it was"the highest for any quarter despite Q1 not normally being a seasonally strong quarter."

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Chinese auto player Beiqi Foton plans to invest 16.76b rupees in Maharashtra

WheelsUnplugged.com -There were reports of the impending entrance of the Chinese automobile players in the second fastest growing market in Asia as other global makers are already here. Now it has been reported that China's largest commercial vehicle maker Beiqi Foton plans to invest Rs 1,676 crore for a one-lakh units per annum plant in India and plans to launch its first product in the lucrative domestic market by 2013.

According to a report in Business Standard, the manufacturing facility, the company's first outside mainland China, will be located in Western Maharashtra and it has already zeroed in on three potential sites for the plant. The report quoted the company's executive vice-president for India operations R Shankar as saying"India is a big opportunity and we plan to start rolling- out vehicles by 2013 from the plant." Foton and the Maharashtra Government have inked an MoU to set up the facility. The USD 400-million investments by Foton, which produced seven lakh vehicles last year, will be the highest foreign direct investment by a Chinese company in India and the company is exploring options to sell light, medium and heavy trucks in India, Shankar said. 

It was mentioned in the report that the Beijing-based company exports to over 100 countries across the world and operates six manufacturing plants in China, apart from running KD (knock-down) operations in Russia, Iran, Pakistan, Vietnam, Indonesia and Kenya where vehicles are assembled. The company has snapped up Rakesh Kalra, who will head the operations in India as the managing director, from rival Mahindra Navistar.

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Shenzhen to install 5 new electric stations by end of year

Gasgoo.com (Shanghai May 3) -Shenzhen will install five new electric vehicle charging stations before next year, theSouthern Metropolis Dailyreported today. The stations will be built in the Binhai New Area, located in the east of the city, the report stated. According the Shenzhen Urban Planning Land and Resources Commission (SUPLRC), the district will be responsible for leading the city's jump into the EV age, with a further ten stations planned to be built there by 2020.

Shenzhen jumped on to the EV bandwagon last year, establishing plans to erect a city-wide charging network by the end of 2012. The city also hopes to have 24,000 new energy public buses, government vehicles and private automobile on its road by that time. In order to accomplish this goal, the SUPLRC started researching the feasibility of using Binhai as a starting point for its EV project by as early as last October.

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Vauxhall warns UK of potential car making future problems

FinanceNews.co.uk -The head of Vauxhall has revealed concerns over the future of car making in the UK, as he expressed dismay at the regions failure to develop a local supply chain.

Chairman of General Motors, Nick Reilly said that he felt a lack of home grown parts were slowly killing the car manufacturing industry in this country.

Speaking to the BBC he said,"Our biggest issue is lack of suppliers in the UK."

"In the 70s to 90s we gave up a lot of business. What it means is that at Luton {Vauxhall factory} we import a lot of components.

"If we don't have a decent amount of local suppliers it makes this place more difficult to be competitive."

He added,"Frankly, I think it's the most critical issue facing the automotive industry in the UK.

"It's not enough to have Nissan, Toyota, Vauxhall manufacturing the products because we'll never be able to compete with another country where the suppliers are surrounding the car plants."

The firm will continue manufacturing cars and vans in the UK in the medium term after announcing last month that they would manufacture their new van, the Vivaro, in the Luton plant.

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Craze for luxury cars in China, hope for automakers but consumption mentality called flawed

Xinhua (Shanghai) -The Shanghai Auto Show 2011 is set to conclude on Thursday with a"good harvest" for luxury brands, such as Rolls-Royce, Bentley, Ferrari, Lamborghini and Maybach.

The most eye-catching car was perhaps Aston Martin's One-77 from the United Kingdom. Five cars of this luxury model, which reportedly numbers only 77 worldwide, were provided especially for the Chinese market. All of the five were sold before the official opening of the Auto Show.

The car was priced at 47 million yuan (7.2 million U.S. dollars), the most expensive among the top 10 luxury cars at the eight-day event.

A widely spread story at the fair recounted how a Chinese man, aged more than 30 years old, came to the Aston Martin booth and had a glimpse at the exhibits. Only minutes later, he ordered a compact sports car valued at nearly 4 million yuan and then swaggered off.

According to HIS Automotive, a market research firm based in the United States, 727,227 high-end cars were in use in China last year. The figure is expected to reach 909,946 this year, and 1.6 million in 2015.

Media reports showed that more than 1,000 Ferrari cars are driven in China, which is expected to become the second largest market for the world's leading sports car supplier.

Last year also saw the sale of more than 120 Aston Martin cars in China, with an average annual sales growth of 50 percent in the country over the past few years.

Industry insiders believe that Chinese buyers of luxury cars at the Auto Show were probably private business owners and offspring from wealthy families.

According to research by the world's leading consulting firm, McKinsey& Company, luxury goods consumers in China are much younger than their counterparts in other countries. Such consumers are often between 18 and 34 years old in China, whereas their peers account for less than 30 percent of total luxury goods buyers in Britain.

Further, around 25 percent of luxury goods consumers are willing to buy without any discount, while the proportion was only 6 percent in Europe.

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US: Penske shares surge as profit beats estimates

Detroit Free Press -Penske Automotive Group rose the most in almost two years in New York trading after first-quarter profit beat analysts' estimates because of increased vehicle sales and a lower tax rate.

Penske climbed $2.52, or 12% to $23.06. The Bloomfield Hills-based company's shares are at their highest closing price since February 2007.

Net income climbed 67% to $33.9 million from $20.4 million a year earlier, Penske said Thursday in a statement. Excluding some items, profit was 39 cents a share, exceeding the 30-cent average estimate of nine analysts in a Bloomberg survey. Sales rose 15% to $2.86 billion.

The tax rate for Penske, the second-largest U.S. automotive retailer, fell to 30.1% in the quarter from 37.3% a year earlier, Anthony Pordon, a spokesman, said in an e-mail. Retail new-vehicle deliveries rose 11% to 40,030 units.

"Our first-quarter results exceeded my expectations," CEO Roger Penske said in the statement.

Last month's earthquake in Japan will affect the availability of new vehicles later this year, he said in the statement. Japanese manufacturers such as Toyota and Honda accounted for more than 34% of total revenues last year, according to a regulatory filing.

Penske said in February it would end a distribution agreement with Daimler's Smart brand after sales of its fuel-efficient Fortwo small car plunged.

Penske reiterated that it expects Daimler to take over the Smart distribution business by the end of the second quarter.

Penske had a loss of $15.9 million, or 17 cents a share, on the Smart business last year. A portion of the lower first-quarter tax rate was a result of net operating loss deductions related to the Smart unit, Pordon said.

Smart deliveries fell to 5,927 last year, a 76% drop from 2008, when the brand debuted in the U.S.

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