One, Volkswagen is considering setting up a US only branch for automobile production. Adrian Hallmark,executive VP for U.S. said about VW, "as a German car maker, didn't always understand what U.S. customers want." US sales in October fell 21% from the same month last year. 2005 JD Power says Volkswagen experiences 45% more problems in the first 3 years than a Ford does.

Seems pretty obvious to me, they don't understand people don't want to buy crap that falls apart. What's so hard to understand about that?

Two, Mazda repots a net profit increase of 60%,a record in it's first fiscal half. The reason? Group sales rose 2.4%, with sales of the Mazda3 soaring 34% of in Europe and 22% in the U.S. Seems all well and good right? Well not exactly. The net profit rose to 31.09 billion yen, BUT was aided by a gain of 51.73 billion yen(!!!!) from the government taking back part of employee pension-fund obligations. Yes, they are doing well and they can't keep up with the demand for their cars but come on. Talk about a little boost from the japenese government, crap.

Three, Wilbur Ross wants to consolidate auto parts manufacturers into specific groups. Auto plastics together, auto steel, etc. He cites Delphi and Visteon's issues as a perfect indicator the time is now. Reportedly already putting up 4.5 billion dollars along with a joint venture already in place with Lear contributing it's 3.5 billion dollar auto-plastics business.


So what do you guys think about all this?

 

Nobody has anything for this? No insider thoughts or industry folks want to chime in?

 

I'm slightly confused as to why mazda would receive funding from the government when looking at its american ties with Ford, not sure of the portion of which Ford Owns... but its a portion none the less...

so why would the Japanese aid Mazda when the profits dont return?

 

1. Volkswagen has lost their way.

Their customer service has gone downhill just like Ford's did in the mid to late 1990s. My Sis-in-law is on her 2nd VW (99 Jetta now a 04 Passat) and she isn't going to get another. Not just because of the dealer service, but because even though this is a higher level model and a more expensive car, she has also had more "issues" with this car than the Jetta. It's not just her, it seems to be a common theme.

They commited a grave error by attempting to place themselves on the same level with BMW and Mercedes without having the goods to do it. This is much the same as GM's "Euro-facination" of the early 80s (remember the Celebrity Eurosport? :yuk: ). No one (at least here in the US) is going to pay $40K for a Passat no matter how loaded or how much chrome you put on the nose. Not when we can get loaded 300Cs, mid-level CTSs, or even a good entry level 3 series for the same price. And this makes you wonder where they got the drugs that convinced management that they could sell a Volkswagen here for $90,000.


As for Mazda, they are on a hot streak right now. $51 billion yen is only about $435 million dollars. The difference between what the government gave them & what they earned is only $20B yen, or $170mil dollar loss.

Mazdaspeed probally spent more than that developing their turbo setup for the Miata.

 

Is that feline supposed to be out of the bag yet?? Shame, shame...

 

Oops. Good news though.