ECG – The Association of European Vehicle Logistics – … News 2011/ECG... · Renault CEO dismisses talk of Nissan merger 3 BMW, VW, Daimler set for ... short of the necessary

ECG - The Association of European Vehicle Logistics, Diamant Building, Bd. Reyers 80, 1030 Brussels, Tel: +32-(0)2-706- 8280, Fax: + 32-(0)2-706-8281, www.eurocartrans.org

CONTENTS NEWS FROM BRUSSELS 2

European Parliament backs new CO2 limits for vans 2 EU car registrations down in January 2

AUTOMOTIVE INDUSTRY 2

GAZ made $58M profit in first 9 months of 2010 2 Tata profit triples as China boosts Jaguar demand 2 Renault CEO dismisses talk of Nissan merger 3 BMW, VW, Daimler set for record profits 3 Dacia to launch two new models in 2012 3 Kia to join Europe's top 10 brands 3 Renault to boost capacity use 4 Fiat, Toyota, Ford hit hard 4 Land Rover debut of diesel hybrid concept 4 DB to handle BMW parts centre 5 MBUSA to take over Smart delivery 5

East looks West for logistics .. 6 Saab names Andersson new CFO 6

EUROPE 6

Nissan builds Portugal battery plant 6 Toyota to produce Corolla in Turkey 6 No need for Fiat-Chrysler merger before 2014 7 Federal Mogul strengthens aftermarket supply 7 UPS boosts freight service in Slovakia 7 Geodis brings security scanning in-house 7 Ro-Ro Line launches Euro-Far East service 7

REST OF THE WORLD 8

PSA China sales climb 13% in January 8 Ford China January sales rise 20% 8 Nissan resumes Egypt output 8 What's behind Russia's tariff proposal? 8

ECG – The Association of European Vehicle Logistics No. 07/ 14th

– 18th

February 2011

ECG MEMBERS

Save the date!

The Annual ECG General Assembly will be held in Warsaw on

5/6th May 2011!


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NEWS FROM BRUSSELS

European Parliament backs new CO2 limits for vans (Source: Euractiv, 16

th February 2011) In 2009, the European Commission

presented a proposal to reduce the average CO2 emissions of LCVs to 175g CO2/km by 2016, phasing in the target between 2014 and 2016. In December 2010, EU negotiators struck a deal that saw the 2020 target softened to 147g CO2/km. On 15

th February, the EP agreed new rules for limiting gas emissions from light vans.

From 2014, car manufacturers will have to reach a target of 175g of emissions per kilometre for 70% of their vehicles, rising to 100% of their fleet by 2017. This would represent a 14% emissions cut. By 2020, failure to reach a target of 147g emissions per kilometre will then be met with fines of up to €95 per vehicle for every gram over the limit. A tougher target of 135 grams per kilometre by 2020 had originally been proposed. The European Automobile Manufacturers Association, ACEA, has said that the deal sets "extremely challenging targets" for the industry, "in particular for the long term". According to ACEA, the objectives "will require the market introduction of breakthrough technologies that are far away from being a viable business option," saying that LCVs have "a substantially longer development phase as well as product cycle than passenger cars". Environmental groups have criticised the outcome, regretting that the initial proposal had been weakened under pressure from the industry and slamming the new legislation for being too weak to stimulate green innovation among carmakers and falling short of the necessary steps to prevent climate change. The agreement is expected to be formalised at the next Transport Council.

EU car registrations down in January (Source: Samar, 17

th February 2011) The EU registrations of new cars decreased by

1.4% in January 2011 compared to the same month last year, according to figures released by the European Automobile Manufacturers Association, ACEA. New registrations in the EU reached a total of 1,041,650 units in January. Markets showed different movements across the region in January 2011 compared to January 2010, with the French (+8.2%) and German (+16.5%) markets posting growth, while the UK (-11.5%), Italy (-20.7%) and Spain (-23.5%) recorded a double-digit downturn. In absolute figures, Germany registered the most vehicles (211,056), followed by France (185,521), Italy (164,356), the UK (128,811), the Netherlands (75,174) and Spain (53,632). The largest reduction was observed in Greece (-63.3%), while Latvia expanded the most (+126.4%), rebounding from very low levels.

AUTOMOTIVE INDUSTRY

GAZ made $58M profit in first 9 months of 2010 (Source: Automotive News Europe, 11

th February 2011) GAZ made a profit during

the first nine months of 2010 of 1.7 billion Roubles ($58 million). The company generated sales of 64 billion roubles in the same period. GM said it would assemble 30,000 of its Chevrolet Aveo cars at GAZ's plant in the Russian city of Nizhny Novgorod to help boost its local presence in the fast-growing market. Sales of the small-segment car will start in 2012. GAZ is also in talks with VW about a potential partnership to build 100,000 cars per year for VW at its factory. VW sales increased 40% in the region last year. In December, GAZ agreed plans with Daimler to produce Mercedes-Benz Sprinter vans for the automaker. Output may total about 25,000 units a year.

Tata profit triples as China boosts Jaguar demand (Source: Automotive News Europe, 11

th February 2011) Tata, the owner of Jaguar

Land Rover, said third-quarter profit more than tripled as a global economic recovery and rising wealth in emerging markets boosted demand for luxury vehicles. Net income rose to 24.2 billion rupees ($529 million) in the three months ended Dec. 31, from 6.5 billion rupees a year earlier. Sales gained 22% to 315 billion rupees.

The ECG Survey of Vehicle

Logistics 2010-2011 is available now!

• Unique scientific publication,

created by the sector to represent the reality of the industry in each single country across Europe, including Russia, Turkey and Ukraine.

• It combines global and European data and information on the automotive industry in general, and the finished vehicle logistics sector in particular.

• It contains external data from industry research experts including global forecasting company IHS Automotive, and internal data directly from the best source - our members!

• We added a brand new chapter (Industry Outlook) that includes an economic forecast and we have re-organised and improved the EU Affairs section. The Country-by-Country Analysis section contains also inward and outward flows.

You can order your copy contacting the ECG Secretariat at [email protected] or calling: +32 2 7068280


3

Latest version of ECG Operations Quality Manual Now available!

• Written in consultation and collaboration with the Quality Departments of leading car manufacturers

• Harmonised standard for handling cars from the moment they leave the factory till the moment of delivery to the dealership

• Contains chapters on road, rail, sea and barge transport as well as on vehicle handling in inland and port compounds

• Already endorsed by 11 car manufacturers, and others will follow

• Regularly updated by the Quality Standards Working Group composed of OEMs and LSPs

• The manual can be downloaded from the ECG website http://www.eurocartrans.org/papers/publications

• Also available in German, Italian and Polish, soon available in Spanish

For comments or inquiries please contact: [email protected] tel.: 0032 2 706 82 80

Jaguar Land Rover posted a profit after tax of 275 million pounds ($440 million) in the quarter as sales climbed in China where Tata plans to start building the British brands. The revival in luxury vehicle demand has spurred BMW and Daimler to expand production and target record sales this year.

Renault CEO dismisses talk of Nissan merger (Source: Automotive News Europe, 11

th February 2011) According to Renault CEO

Carlos Ghosn, merging with alliance partner Nissan was still “not feasible” after unveiling three-year goals that fell short of previous targets. Management integration with Nissan is not part of the mid-term strategy because of internal opposition at both companies. Any such move would backfire because of the companies' ingrained cultural differences and determination to remain independent. Renault announced its first medium-term plan since the 2008 financial crisis, when Ghosn scrapped 2009 targets for a 6% operating margin and 3.33 million deliveries. The CEO pledged 3 million in annual sales by 2013 and a margin of more than 5%. Renault is counting on the Duster pickup and other models in its no-frills “entry” range to power an emerging-market expansion as it adds capacity in Morocco, India, Russia and South America. Investment, research and development spending will be capped at 9% of company revenue, while more vehicle designs are pooled with Nissan. EV car sales will reach 100,000 a year by 2013, drawing on vehicle, battery and motor production lines in France. The automaker recorded a €3.13 billion net loss and 2.31 million vehicle sales in 2009. It last achieved a 5% margin in 2004.The company is predicting a European auto-market contraction of as much as 2%, with its home French market shrinking 8%. Markets outside the region will remain dynamic, said the company.

BMW, VW, Daimler set for record profits (Source: Automotive News Europe, 15

th February 2011) Germany's big three

carmakers, which have added about €67 billion in market value since the end of the 2009, are poised for 2011 profits exceeding pre-financial crisis highs amid U.S. and Chinese demand. BMW and VW will probably post earnings before interest and taxes for this year beating records set in 2007 and 2008, respectively, while Daimler's earnings are expected to rise to the highest level since 1999, when Chrysler was still part of the company. Daimler CEO Dieter Zetsche said that growth this year will be constrained by factory limits rather than customer demand. Daimler's Mercedes-Benz, BMW and VW all reported record deliveries last month. The three carmakers have a combined market value of €157 billion, up 75% from the end of 2009, buoyed by sales advances in China and the U.S. Toyota was almost unchanged in the period, while Ford was up about 61%.

Dacia to launch two new models in 2012 (Source: Samar, 16

th February 2011) Dacia is set to use 2012 to expand its product

line-up by adding two new models. These will be a family minivan and a light utility vehicle. Boosted by robust vehicle sales in 2010, which rose by 12% to some 348,000 units, Dacia is expanding its product line-up by adding two new models next year. The Romanian-based company is developing a family minivan and a light utility vehicle. The latter is expected to be slightly larger than the Renault Kangoo. Dacia’s 2010 sales got a big boost with the March arrival of the no-frills Duster SUV, which has generated considerable customer interest.

Kia to join Europe's top 10 brands (Source: Automotive News Europe, 16

th February 2011) Kia Motors, South Korea's

second-largest automaker, has set its sights on becoming Europe's 10th largest

mainstream brand by 2013. To get there, the company will have to leapfrog its parent, Hyundai, as well as VW's Skoda brand and Renault's Dacia. That means driving sales to about 450,000 units from 262,627 last year, an approximate 71% rise in volume over the next two years. Hyundai sold 358,284 units in Europe in 2010, up 4.7%, according to the European automakers' association, ACEA. Kia ranked 16

th in overall European sales last year with a market share of 1.9%, and

13th among mainstream brands. According to Kia Motors Europe COO, Paul


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AGENDA ►The ECG Land Transport Commission will meet on 1

st

March 2011 in Bonn, Germany ►The ECG Maritime Commission will meet in March 2011 week 10, Brussels, Belgium (exact date tbc) ►The ECG High & Heavy Group will meet on 9

th March

2011 in Brussels, Belgium. ►The ECG Event in the European Parliament on Transport Policy and Logistics will take place on 23

rd March

2011 in Brussels, Belgium ►The ECG East Regional Meeting will take place on 14-15

th April 2011 in Riga, Latvia

►The ECG Quality Group will meet in Brussels, Belgium (exact date tbc)

Philpott, their products are now better than their brand recognition. He expects Kia sales to rise almost 15% this year to 300,000 units, as well as he expects two redesigned models set to debut at the Geneva auto show – the Picanto minicar and Rio subcompact – to drive the gains. Picanto sales are expected to rise to about 60,000 units from 47,094 units in 2010, while Kia has targeted an ambitious four- to-fivefold sales increase for the new Rio in Europe, which would take it to about 100,000 units a year. Kia sold just 19,337 Rios in Europe last year, down 23%, accounting for less than 10% of the car's worldwide volume, according to data from JATO Dynamics. However, Kia expects fleet sales to rebound this year. Kia currently builds 60% of its European volume in Europe.

Renault to boost capacity use (Source: Automotive News Europe, 16

th February 2011) A key element in Renault's

new strategy will aim to boost capacity utilisation in its European plants to more than 84% in 2013 from 64% now. Renault CEO Carlos Ghosn has said that Renault will boost capacity utilisation worldwide from 83% in 2010 to 101% in 2013, adding that two-thirds of the capacity-utilisation improvements will come from “adjusting capacities” and the rest will come from increasing Renault's and its partners' production. According to IHS Global Insight analysts, Renault's ability to improve capacity utilisation is limited because the French government would oppose factory closures or large job losses, also adding that Renault is among the worst in terms of the flexibility it has to reduce capacity due to the French government's influence. The French government owns 15% of Renault.

Fiat, Toyota, Ford hit hard (Source: Automotive News Europe, 16

th February 2011) Fiat, Toyota and Ford were

hit hard by a 10th straight monthly decline in European car sales as consumers cut

spending following the end of government incentives. Registrations in the region fell 1.1% to 1.07 million vehicles in January, according to ACEA. Fiat's European sales dropped 20% last month, Toyota's declined 11% and Ford dropped 9%. Volume carmakers in Europe are under pressure to cut prices as overcapacity and falling sales have led to an oversupply of autos. Buyers are holding back following the end of government incentives used to encourage purchases during the worst of the recession. According to IHS Automotive analyst Ian Fletcher, vehicle markets are still coming under pressure for a variety of reasons: payback from scrapping schemes, doubts about economies, job security worries, adding that Ireland and Romania are the only European countries still offering incentives. Sales declined in three of the top five markets, dropping 24% in Spain, 21% in Italy and 12% in the U.K. Germany gained 17% and France rose 8.2%. Volkswagen recorded a 6% rise in January and its market share increased to 22.1% from 20.6%. All three German luxury carmakers also bucked the overall market decline in part because they benefited much less from the sales incentives. BMW jumped 20% to 56,165 cars. Daimler, including Mercedes-Benz and Smart, recorded a 14% rise to 46,769 registrations. VW's Audi rose 3.6% to 47,916. Sales for PSA/Peugeot-Citroen fell 3.6% in January to 145,472 cars, while registrations for Renault declined 4.8% to 110,132.

Land Rover debut of diesel hybrid concept (Source: Automotive News Europe, 10

th February 2011) Land Rover says that the

'Range_e' plug-in hybrid is one of several working prototypes currently being developed at its design and engineering center in the U.K. Land Rover will debut a diesel hybrid plug-in prototype at the Geneva auto show. The Range_e is the first four-wheel-drive model from Land Rover to achieve CO2 emissions of 89 g/km. The automaker will also present the new Range Rover Evoque in Geneva in both coupe and five-door derivatives and is expected to release details on European pricing and optional extras for the model.


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Upcoming events • Transport,

Telecommunications and Energy Council, 28

th

February, Brussels • Marketforce And The ASI's

6th Conference: The Future of Rail Freight in Europe, 15

th

March 2011, Brussels • CLEPA Annual reception on

22nd

March 2011 in Brussels, Belgium

• ECG Event in the European

Parliament on the future of transport and logistics on 23

rd

March 2011 • CLEPA General Assembly,

26/27th March, Istanbul

• Transport,

Telecommunications and Energy Council, 31

st March,

Brussels • IRU - Road Safety and

Professional Training Seminar Istanbul, 11

th-12

th May 2011

• Transport,

Telecommunications & Energy Council on 27

th May,

Brussels • 6th IRU Euro-Asian Road

Transport Conference & Ministerial Meeting Tbilisi, 16

th-17

th June 2011

DB to handle BMW parts centre (Source: Automotive Logistics News, 16 – 22

nd February 2011) Deutsche Bahn’s

logistics division, DB Schenker Logistics, is establishing a €33m logistics centre in Leipzig, Germany, to supply automotive components for ocean and rail shipment to BMW plants in China and South Africa. The centre is expected to be in operation by mid 2011, with a handover phase running between July and November. DB Schenker Logistics is working with integrated property developer Goodman Group for the development of the 63,000m

2 warehouse, which will be located near BMW’s

Leipzig production plant and is described by DB Schenker Logistics as “one of the largest logistics projects ever acquired.” Purpose-built for automotive logistics, it will collect around 8,000 different component lines for package and containerisation according to delivery requirements, with around 50 containers shipped out daily for ocean transport. These will move via the port of Antwerp for ocean transport to Rosslyn in South Africa and via Bremerhaven port for movement to Shenyang, China. In addition, a percentage of the containers prepared at DB’s new facility destined for Shenyang will be shipped there by rail across Russia. BMW is organising rail shipment directly but a DB Schenker spokesman outlined that this route would save transport time compared with ocean routes. By rail the containers will travel about 11,000km compared to 20,000km by ship. BMW is building a second production plant at Tiexi in the region which is due to go into operation at the beginning of 2012 and, subject to verification with local authorities, will start with production of the BMW X1, currently only built at Leipzig. Painted bodies and all in-house parts for the Chinese assembly of the X1 will be supplied from the Leipzig plant. BMW is also moving parts for its new engine plant in Shenyang through the new warehouse. The €560m Tiexi plant is being developed with its Chinese joint venture partner Brilliance and will join the partnership’s existing plant in Shenyang which produces the 3 and 5 Series. BMW’s Rosslyn plant in South Africa, builds the 3 Series sedan. The Leipzig warehouse will be fitted with 8,600m

2 of covered side loading areas and 18,000m

2 of outside storage space. It

will feature 35 loading docks with development space for a further 15. Goodman is also currently working with Seifert Logistics Group on the development of an automotive logistics centre near Karlsruhe in Germany that will store vehicle parts for supply to the Mercedes-Benz production plant in Rastatt. The €31m facility is due for completion in May this year.

MBUSA to take over Smart delivery (Source: Automotive Logistics News, 16 – 22

nd February 2011) Mercedes-Benz’s

US operation (MBUSA) has announced it will be taking over distribution rights, management and sales for smart US from Penske Automotive Group by the end of June this year. MBUSA is in the early stages of the transition phase and could not offer any substantive comment on what the move would mean for finished vehicle distribution patterns or the impact on carriers. The decision to integrate smart USA with MBUSA follows last year’s reorganisation of the Smart brand, which is now managed independently but is fully integrated into the Mercedes-Benz Cars division of Daimler. The parent company integrated Smart into the Mercedes-Benz unit in September 2010 and the US is the currently the only market in which Smart and Mercedes operate separately. Two-thirds of current Smart dealers also handle Mercedes-Benz and they will continue to sell Smart vehicles said a company spokesperson. MBUSA has invested $250m in its dealerships as part of the Autohaus initiative for facilities enhancement, on top of the $1.4 billion invested by the dealers themselves over the past two years despite the impact of the economic crisis. The remaining dealers have agreements with Penske and it remains to be seen what decision will be taken there. Smart distribution in the US involves the ForTwo microcar, and the ForTwo electric version. The Smart entered the US market in January 2008 when Daimler struck a deal with Penske. But sales have fallen badly recently, down nearly 60% last year to 5,927 cars.


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East looks West for logistics (Source: Automotive Logistics News, 16 – 22

nd February 2011) Further indications

that China’s automotive sector is seeking foreign expertise have come this week with confirmation of a high-level mission to Europe from Beijing Changjiu Logistics, China’s biggest private automotive logistics company and a provider of services to some of the country’s biggest OEMs, including First Auto Works (FAW). The chairman and several senior managers from Beijing Changjiu Logistics will be attending the Automotive Logistics Europe conference, to be held in Bonn, Germany on 1-3 March, in search of partnerships that will help developments in China. Bo Shijiu, board chairman, will be joined by vice general manager Dr Chen Gang and other executives from the Changjiu Industry Group. In the week when China’s economy was officially recognised the second biggest in the world, overtaking Japan, this is the second mission in recent months to use contacts made via Automotive Logistics to reach out to Western expertise. Last September, FAW along with Dongfeng and domestic LSPs such as Guangzhou Fengshen Logistics visited the offices of Automotive Logistics in London as part of a European mission organised by the automotive branch of the China Federation of Logistics & Purchasing (CFLP). At that time, FAW’s Sun Jing, manager of finished vehicle logistics, said that China’s government had committed to supporting the most important OEMs in raising standards. Ouyang Jie, Chairman of the automotive arm of the CFLP’s activities, and Vice President of Dongfeng Motor, has said that logistics costs would only continue to rise unless there was much greater effort to improve standards.

Saab names Andersson new CFO (Source: Automotive News Europe, 17

th February 2011) Saab Automobile has

named Nils-Johan Andersson as its new CFO. Spyker Cars NV, which owns Saab, plans to tell shareholders in May whether it intends to list the Swedish car manufacturer on the Swedish stock exchange, according to Spyker CEO Victor Muller. The Dutch car maker bought Saab from GM for $400 million. The Trollhattan-based manufacturer aims to sell 80,000 cars this year and 120,000 in 2012, which is when it wants to become profitable. Saab sold 31,696 cars globally last year, down from 39,800 in 2009. In the US, 2010 sales plummeted to 5,445 units from 8,680 the year before. European sales fell 19% to 21,490, according to market researcher JATO Dynamics.

EUROPE

Nissan builds Portugal battery plant (Source: Automotive News Europe, 11

th February 2011) Nissan has started

construction of a lithium-ion battery plant in Portugal to support the roll out of EVs from the Renault-Nissan alliance in Europe. The alliance has invested €156 million in the project. The factory will start operations in December 2012 and will have a total capacity of 50,000 units a year. About 200 jobs are expected to be created. Last April, Nissan began construction of a battery plant in Sunderland, England, which will start operations in early 2012 with an annual capacity of 60,000 units. Renault's battery plant in Flins, France, will have a capacity of 100,000 units a year. Renault-Nissan does not rule out selling batteries to other EV manufacturers. By 2015, the alliance aims to have the capacity to produce 500,000 EVs and batteries at its global plants. The partners have invested a combined €4 billion in EV technology. Carlos Ghosn has predicted that one-tenth of all new vehicles sold worldwide would be all-electric by 2020, and wants the alliance to take the biggest share, much as Toyota has done with gasoline-electric hybrids.

Toyota to produce Corolla in Turkey (Source: Automotive News Europe, 14

th February 2011) According to the Anatolian

News Agency, Toyota is to produce the Corolla sedan at its plant in Turkey. Anatolian said the plan was disclosed by the Chairman of one of Toyota's partners in Turkey, Abdul Latif Jameel (ALJ), during a meeting with Nihat Ergun, Turkey's Industry and Trade Minister.

ECG Office

Mike Sturgeon, Executive Director Tel: 0032 2 706 82 82 [email protected] Lola Uña Cárdenas EU Affairs Manager Tel: 0032 2 706 82 83 [email protected] Marta Mottini Research and Projects Manager Tel: 0032 2 706 82 84 [email protected] Tatiana Wilfart Office Manager & Events Coordinator Tel: 0032 2 706 82 80 [email protected]

Gianmaria Sisti Trainee Tel: 0032 2 706 82 80 [email protected]


7

ALJ had been pressing Toyota to increase production in Turkey with the aim of making it a regional production hub. Toyota currently produces the Auris and the Corolla Verso vehicles at its plant in Sakarya, east of Istanbul. Toyota in Turkey has a production capacity of 150,000 vehicles.

No need for Fiat-Chrysler merger before 2014 (Source: Automotive News Europe, 15

th February 2011) Sergio Marchionne, Fiat and Chrysler Group CEO,

has said he does not foresee “any necessity” of a merger between the two automakers before 2014, adding that Fiat will keep its headquarters in Italy after a potential combination with Chrysler “only if the investment conditions remain”. Marchionne confirmed that he is discussing with banks to refinance Chrysler's government loans and that Fiat aims to take a majority stake in the US automaker. The face value of Chrysler's debt to the US and the Canadian governments is about $7.46 billion. Fiat, which owns 25% of Chrysler, is trying to improve productivity and capacity utilisation to restore profitability in Italy. Fiat plans to invest €16 billion and Fiat Industrial will invest €4 billion in Italy, confirming the Italian automaker's pledge to spend €20 billion revamping its domestic plants. Fiat also aims to raise its annual production in Italy to 1.4 million vehicles by 2014 from 650,000 in 2009. Fiat can gain a further 10% stake in Chrysler in two steps if the US automaker reaches milestones including some sales goals outside of North America. Fiat has an option to raise its holding to 51%, a level Marchionne has said he aims to reach before the end of this year, after Chrysler repays US and Canadian government loans.

Federal Mogul strengthens aftermarket supply (Source: Automotive News Europe, 09

th February 2011) Power train, chassis and safety technology supplier,

Federal Mogul, has opened a new aftermarket distribution centre in Madrid to service the Spanish market, which accounts for 10% of the company’s European aftermarket business. The 8,000m

2 facility will stock

35,000 specialised replacement parts and is capable of processing more than 200,000 parts per month. Spain has the sixth largest vehicle fleet in Europe and the car park keeps growing, hence the opportunities in the replacement parts market are significantly increasing, according to José María Alapont, Federal-Mogul President and CEO. According to the company, the facility will utilise the latest state-of-the-art supply chain management, inventory control and order fulfilment technology, ensuring rapid and accurate order delivery to customers.

UPS boosts freight service in Slovakia (Source: Automotive News Europe, 09

th February 2011) UPS has expanded its Express Freight service for

automotive and industrial shipments in Slovakia, with guaranteed time-critical shipments by air over a one to three-day bracket door-to-door and the inclusion of customs clearance. UPS would not comment on specific contracts or market share but recognised that Slovakia was one of the largest producers of automobiles per capita in the world. The company reported that it is also expanding the Express Freight service in Israel for industries including high tech, automotive and aeronautical parts.

Geodis brings security scanning in-house (Source: Automotive News Europe, 09

th February 2011) Freight management provider Geodis Wilson has

announced it is now able to carry out airfreight shipment scanning on its own premises in Kelsterbach, Germany. The company has installed x-ray scanners in reaction to more stringent international security regulations following the discovery last October of a cargo shipment containing explosive material destined for the US from Yemen. The company said the investment provides clients with an enhanced service and will save them time because the technology is in-house and no longer requires an external service partner, still currently common practice for most forwarders. A radiation protection officer and a traffic assistant ensure safe operations and professional scanning of all shipments is carried out according to the latest security standards said the company.

Ro-Ro Line launches Euro-Far East service (Source: Automotive News Europe, 09

th February 2011) Ro Ro Line Pte, a subsidiary of Taiwan’s TMT

Group, has launched the first of four new ro-ro vessels to support its new service between the UK and northern Europe, and destinations in East Africa, the Middle East and the Far East. The first sailing will leave from Immingham port in the UK on 14 March. The first vessel to launch the service, called A Ladybug, is capable of carrying 7,600 passenger vehicles, putting it amongst the largest pure car and truck carriers (PCTC) in operation. As well as passenger vehicles it is equipped to carry a variety of freight, including construction and plant equipment, trucks, trailers and other mobile equipment. The company’s own Mafi trailers also equip it for project and static cargo according to the company. TMT group is involved in bulk carrier, oil tanker and marine development and launched its Ro Ro Line business in 2003. The company currently runs ro-ro vessels along sea routes linking Southeast Asia and the Middle East.


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REST OF THE WORLD

PSA China sales climb 13% in January (Source: Automotive News Europe, 11

th February 2011) Dongfeng Peugeot Citroen Automobile, the JV

between PSA/Peugeot-Citroen and Dongfeng sold 41,900 vehicles in January, up 12.9% year-on-year. Their revenue for the month increased 12% to 4.2 billion yuan ($636 million). In total, the venture sold 24,400 Citroen vehicles and 17,500 Peugeots in January. Dongfeng Peugeot builds the Peugeot 307, 207 and 408 cars, and also the Citroen C4 Quatre, Elysee, C5, C2 and C-Triomphe. To expand its presence in China, PSA established a second Chinese JV in the south China city of Shenzhen last July. Jointly owned by PSA and China Changan Automobile, the new partnership will start production in 2012. It will produce upscale passenger as well as light commercial vehicles for the Peugeot and Citroen brands.

Ford China January sales rise 20% (Source: Automotive News Europe, 14

th February 2011) Ford's two JVs in China sold 53,300 vehicles in

January, up 20% from the same period last year. Much of Ford's sales growth was generated by the Ford Focus compact car and the Ford Transit commercial van, made by the JV Jiangling Motors. Sales of the Focus rose 15% year-on-year to 38,400 units in January, while Transit sales surged 51% to 6,100 units. Aside from the Focus, Changan Ford Mazda also assembles the Ford Mondeo and Fiesta, plus the Mazda2 and Mazda3 models. Ford also imports the Ford Edge SUV into China. After a slow start, Ford is expanding its operations in China. Jiangling Motors is building a new $300 million assembly plant in Nanchang, while Changan Ford is constructing an engine plant and a second assembly plant in Chongqing.

Nissan resumes Egypt output (Source: Automotive News Europe, 14

th February 2011) Nissan has restarted production at its plant in Egypt

after shutting it following the outbreak of protests in Cairo. The automaker suspended operations on Jan. 30. Production resumed Sunday, the company added. Nissan produced 10,043 units at the Egypt plant in the business year that ended in March 2010. BMW resumed output at its Egypt factory last Sunday, ahead of competitors Daimler and GM, who have both still not restarted productions in the country. GB Auto, Egypt's biggest listed vehicle assembler, which makes Hyundai cars, had resumed operations nationwide for the first time since Jan. 27. It said that none of its staff, distribution outlets or facilities had been harmed during the anti-government protests that swept Egypt.

What's behind Russia's tariff proposal? (Source: Automotive Logistics News, 16–22

nd February 2011) The Russian government has said it will cut

import duties on new vehicles to 25% from the existing 30% following its proposed accession to the World Trade Organisation this year, but there is scepticism amongst private operators in the country about what the deal will actually mean for them, as well as recognition that many OEMs are well on the road to increased investment in domestic joint ventures and are encouraging their tier suppliers to follow suit. The country’s chief WTO negotiator, Maxim Medvedkov, has recently said that the duties could be cut to 15% within seven years of the initial reduction. Russia is the only global economic player that remains outside of the 153 Member States comprising the WTO. The move may be welcomed by LSPs who, last September, expressed concerns about a loss of business when Russia’s Prime Minister said that the government would further raise import tariffs on foreign-produced vehicles to 30%. Likewise, port operators may do better if the Russian government drops the duties and foreign imports receive a boost, but there is wide scepticism amongst logistics providers over how Russia will negotiate with the WTO and, more generally, its ability to play fair, with any dealings described as “opaque by design”. The increase in tariffs was designed to promote joint venture production between foreign carmakers and domestic OEMs, as well as encourage the transfer of technology skills and increase productivity. However, certain operators perceive that indigenous OEMs will always be protected as a priority. Higher tariffs will result in higher import vehicles prices which will weaken demand for new cars. This is why OEMs have set themselves on a road of increased investment in domestic joint venture activity within the country and are unlikely to revert to the level of foreign imports previously moved. Following the tariff increases last year, Renault increased its investment in its Avtoframos facility in the Samara region. Elsewhere, Hyundai has pushed ahead with the development of its facility near St Petersburg. The company said that sales of the Kia C1-segment city car, which has been especially designed for Russian consumers, would take up a large portion of its local portfolio as it is one of its fastest expanding segments in Russia. Foreign OEM ventures like this one, and the increasing joint ventures in the country, have been given five years to set up Russian sources for component supply and have their SKD- and CKD-derived vehicles qualified as of Russian origin.


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These OEMs are keen to maintain their zero-duty status on parts imports and, given that the proposed cuts will only reduce the tariffs to the already high level they were at prior to last September’s announced rise, the promise of cuts is negligible. Membership of the WTO would bring with it the promise of more investment, new technology and other benefits crucial for economic modernisation without making costly demands on foreign carmakers or their logistics providers moving products into the country, but many have already made investments to avoid this so the impact on finished vehicle carriers and logistics providers could be limited. The next meeting on Russia's bid is planned for the end of March.

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