Auto Run 2008

It is a transition phase for the globe not only in the field of economy or finance but at the same time in many other sectors as well. Domination of West has been challenged and replaced by the East. Collapse of North American structure has shaken the foundation of European Union as well. Even Asia Pacific and other parts of globe are not immune with this one of the worst financial situation of the century but the effect has been modulated and we didn’t see any big setbacks apart from market slow down here.

OK…I wont go in much details of these huge and complicated area of economics. Even I am not an eligible candidate to comment on it right now. Here I will focus on the Automotive Sector in this turmoil period primarily.
As mentioned this transition phase has also been seen in the world of wheels. In fact it was most obvious in this sector. 2008 didn’t come as a big surprise package for auto experts. Because whatever came from the quarter results and number, only thing was unexpected that it was worse than the expected.

Toyota has outsold GM in number game of vehicle sold in 2008. 77 years of North American domination has been ended by one of the smallest but hardest working country. As per the company released reports, GM has sold around 8.3 million vehicle in the year 2008 approx 0.6million less than Toyota. GM has seen the decline of around 11% of sales compare to last year after crude oil has risen to record high. Again it was not a surprise as observing previous few years numbers it was clear that its only a matter of time that when Toyota out thrown GM from No.1. GM still has something to breathe as it retained the crown at its home turf, which is the biggest market of automobiles in the world. But considering the performance and decline of the auto major it wont come as a surprise if it looses at its home market as well eventually.
But certainly there are some surprises stored for auto pundits. First time in history, after 70 years Toyota has registered a loss. This was not welcomed by Japanese but the Big 3 should take a lesson from this. Toyota has responded after the loss one year, whereas Big 3 are so lazy to take any aggressive step even after registering losses year after years.

Ask for more surprise?
Here comes the biggie. China was never or I will say very few times came as a surprise in a technical field especially in innovation and never heard in automotive sector.
This year NAIAS is an exception. BYD(Build Your Dreams), 2nd largest manufacturer of Li ion battery in the world came up with production version of their electric vehicle fleet which has not only surprised auto pundits but also send a clear warning message to all Auto makers including invincible Japanese and Germans.
Whatever they claim about their Electric Vehicle e6 is really like a dream wish. Lets just see what these Chinese people has done and come up with.

Specification of the Vehicle (e6)

Range: 250mile(400km)
Charging time: 1Hr
50%charge: 10min
80%charge: 15min
Seating capacity: 5 persons
Battery type: Fe
Top Speed: 160km/hr
0-100km: <8Sec
Emission: Zero.(For more or detail specification and the vehicle check www.byd.com)

Can you ask for more?
Even if it is half true, it will give volt, the most ambitious plan of GM a run for money.

Compare to Volt’s range of 40miles it has 250miles. Charging time of Volt will take 5-6 times more than what BYD claims. Also, seeing their pace and claim that vehicle will be launch within an year compare to estimated launch of Volt in 2011-2012, I don’t understand where GM stand a chance against this new innovation.

GM has always boasted its continuous investments in RnD. But for last so many years it is still waiting for such breakthrough innovations and ideas to come. Whereas, approx 20 year old companies are coming with such ideas, which will not only change the way we drive but it claims to become No.1 in coming 10-15years.
BYD is not only a threat for GM but also for Toyota and others at the same time. It may lead another transition in auto industry. From NA to Japan and now from Japan to China. ICE was lead by NA, so Hybrid was lead by Japan and now here comes China, started to claim the EV segment.

After the President Mr Obama has taken charge of White House, it would be his Herculean task to revive Auto industry of NA and reclaim the supremacy of this sector again. Already cash starved and cramp auto industry in NA will how long survive such blows, nobody knows.

After GM stepped back to acquire Chrysler, Fiat has now bought approx 30% of the stakes of this dying company. Even Fiat is not in a good health but its long awaited wish to come in NA has come true. It has got a nice platform to penetrate in NA market. Only concern remains, like Cerberus, Fiat don’t burn its hand in this deal. By mid of 2009 Fiat is expected to acquire more than 50% of Chrysler stake to take the ownership of the company. After Japanese, here comes Italian Stallion in NA. anything else GM management wish for. In flood you are getting rain. God bless GM.

As per COO of GM, it will run out of cash by 31 March after paying its due bills. Hopefully they have another slot of bridge loan pending which was promised my ex Bush administration. But this is not at all a permanent solution to revive a company. Its like feeding an starving elephant from house grocery. Whatever you do, you cant full its appetite. Just by giving the money of taxpayer to some incapable management is not a wise idea.

2008 has shown the reality of so many things. It has removed mask and shown the real picture and face of the otherwise glamorous market and industry. But it made us to think that it’s a high time to go for a reality check.

But again it’s a new year and it will be a new start. Only thing which should remain with us is hope. It’s a world of survival of the fittest. But being the fittest, needs lots of effort and practice. Lost at one front doesn’t mean end of the battle. There will be lots of challenges coming and continue to come till you say quit. But that is the best part of the market. So many came, so many will come. Ideas, companies, products, changes, setbacks, technologies, people, management…will keep coming one after another but…the show must go on.