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China's EV market is very competitive and price cuts by Tesla have led to falling prices. BYD sold 900,000 electric vehicles in the first 5 months of 2023, Tesla 200,000, and Li Motors 100,000. NIO is struggling and some companies have closed operations. Ford failed in this market and VW is still to make a dent in the market. Most of the top ten companies are local. With the slowing economy, consumers resisting purchases, price drops are needed to keep up sales of EV's.

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Ford's ability under Mullaly to shrink its losses to $45 million in North America in the first quarter compared to $613 million same quarter 2007, build best quality into its cars, and shift its product line dependence from SUV's and light trucks to cars, and shift to a globalized way of doing business in global markets that include the USA, at the same time as it brought an innovative approach to union participation by letting the union own part of Ford Motor, all in a relatively short period of time is certainly remarkable. To take a demoralized company and get it back on its feet with all the spunk and spirit it needs to compete takes a leader like Mulally.

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It is a landmark agreement and more innovative than the GM and Chrysler agreeements, with the UAW getting a significant stake in Ford, something that is a first. UAW supported money going into creating 5 flexible body shops so that investment to get Ford new models and manufacturing capability is put in place in this agreement- showing union management unanimity in understanding Ford's situation. The UAW Ford Agreement details: UAW gets about 18% ownership of Ford and becomes Ford's largest shareholder with about 4 times the shares of the Ford family. Ford will build 5 new flexible body shops in unionized assembly plants, invest separately $200 million in new technology and equipment in unionized stamping plants, and make substantial new investments in engine operations. All new hires will get a starting rate of $14.20 an hour and a full rate of $15.34 an hour, nearly half the curtrent level and its good till Ford reaches 20% of the Ford UAW workforce. When this is reached for entry level positions Ford must first move those hired at the lower wage upto the higher wage before filling in more positions at the lower rate. The VEBA health trust will work this way. Ford will only put in $6.5 billion in cash into the trust and $450 million each year in current dollars. The rest is done innovatively to conserve cash and give the union a stake in Ford that will be a first time in such a deal. It may change the labor vs. management atmopsphere in the long run as Ford recovers. A $3.3 billion convertible debenture note will be issued giving the union a stake of about 18% at current share prices, which terms are still not clear. Ford will also issue a $3 billion secured note. And to cover retiree health obligations until the trust makes payments Ford will pay $2.2 billion. The Jobs Bank is restricted to 2 years. After 2 new job offers are declined the worker goes off the payroll. Ford will also trim about 10,000 to 14,000 workers with buyout packages. ...

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Hyundai's residual values have increased from 40% a year ago to 43%, according to Automotive Lease Guide, surpassing Detroit automakers and catching up with Toyota and Honda; as a result of improving perception of its quality and value. Hyundai's profit is up, as it is able to charge better prices and cuts back on incentives. The Sonata's new model is selling quickly, and this has required using capacity at a Kia plant in the US to build more of this model. Incentives are down by one third compared with 2009. And Daiwa Capital Markets forecast is for profits to triple by the end of 2010, in only 2 years. Ten new product launches in 2010-2011 will add more traffic to its showrooms.

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GM says it will end traditional pension contributions and instead use a 401 (K) plan. GM's pension plan was underfunded by $8.7 billion as of Sept 30, 2011. GM will also freeze salaries for 26,000 salaried workers. Salaried workers will get an extra week of vacation. GM's 48,500 UAW union represented hourly workers will receive bonuses under a formula dependent on profitability and quality. Salaried employees will receive smaller bonuses because other metrics such as free cash flow and earnings before interest and taxes, and not just profit, are used to determine bonuses. GM's management sees GM as not having enough margins to reduce risk to the level it should be. The pension shortfall and the losses in Europe are also on their minds. Margins at GM lag behind compettitors. GM's margins are at about 6%, compared to Hyundai and BMW having margins of 10% in 2011. These changes come as GM plans to show a record profit of $8 billion in 2011. Management sees no room for complacency after the missteps in the last decade leading to the government bailout. A strategic decision made by GM in 2011 was to reduce the overhang of high inventory by reducing production, changing the way GM operates now compared to the years before bankruptcy....

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Suzuki is not going to give up its dominant position in the Indian market easily. It has about 25 years of experience in India and owns 54% of Maruti Udyog which makes about 750,000 cars a year and plans to make 1 million cars in India annually by 2010. In JD Powers surveys Suzuki ranks first then Hond and Hyundai and Toyota fourth. Tata Motors is ninth. Competitiion is sure to heat up and Hyundai also has considerable experience being the second foreign company after Suzuki to come into India earlyon. The newcomers from Euope USA and Japan like Toyota and GM don't have anywhere near the experience and distribution netwrks and years of experience of Suzuki and Hyundai. So Suzuki may lose market share but will continue to be one of the top companies in India for some time. This is made possible by Suzuki investments in India. Suzuki plans a one billion yen research center in India to develop cars for the Indian market and is building a new plant in India.In the nextfew years Suzuki plans to double the number of service centers and showrooms to 1000 to reach every part of India. Suzuki is seeing considerable demand for its Swift car and has higher end versions in the Grand Vitara and the SX4. The head of Suzuki, Mr. Suzuki, has run the company since 1977 and is determined to respond to competition from newcomers with moves of his own to keep Suzuki as one of the leaders in India. ...

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China's BYD started in electric batteries and expanded into electric cars. It has emerged as the dominant electric car company in the world as China now has half of the electric cars on the road in the world. 35% of exports of electric cars are from China. Keith Bradsher of NYT reports from Shenzen that its first car was made in 2007 of poor quality, similar to Toyota in the 1930's as it tried car manufacturing for the first time. It has surpassed Tesla in making electric cars. In each of the last 2 years it has increased electric car sales by one million to reach electric car sales on 3 million. EV sales in China were up in 2023 to 9.49 million cars giving BYD the largest share of 31%., by comparison US electric car sales were 1.2 million. New assembly lines are being built in Brazil, Hungary and Thailand. And new lines are planned for Mexico and Indonesia. This kind of growth was seen only by General Motors in 1946 after the end of the war. It also shows the progress China is making. In solar panels something like the addition of 900 million solar panels meeting the entire increase in electricity demand for each year, so that emissions targets can be met earlier than planned to tackle climate change.  The same changes are happening in electric cars. China now has 40% of electric cars or gasoline/electric plug in cars going up to 50%. For export China is building large carrier ships, the first that will take 5000 cars for export to the Netherlands. The lowest priced electric car model the Seagull was priced at $11,000. BYD's lowering of manufacturing costs have given it the ability to price the cars to attract new car buyers.  Wang Chuanfu who studied at Central Southern University in Changsha known for its battery research, was an engineer who started the company in the 1990's to make batteris for Motorola. Between 2003-2006 he experimented with making cars in the hope of making electric cars. Stalled efforts in 2009 and 2011 were met with arenewed effort in 2016 trying a new approach to cut costs by developing a battery where supplies of lithium or cobalt would not be a constraint. He developed a new battery using iron and phospate to replace lithium cobalt batteries. A big break came in 2020 with the Blade battery that increased range to the level of cobalt lithium batteries at a much smaller cost. BYD hired German Audi designers for new model design. This time BYD was in the right position to build a car company matching all others with costs lower by about 35% than VW for some models. This comes from- lower costs to make in China, making its own parts inside the company for 75% of parts compared to VW only about 35%, and by the savings from its battery research.  BYD has shown ability to shift with market needs and opportunities. In 2022 assisted driving was facing hurdles, BYD had second thoughts about the new technology, by 2023 as it was increasing in use BYD committed $14 billion in autonomous driving technology. Driving range is a problem for people in urban areas going back to their villages in China. BYD has an advantage here compared to Tesla- it makes hybrid plug ins that account for half its sales. Toyota has also had emphasis on hybrid plug ins where it missed the opportunity was that it moved very slowly on all electric cars not realizing how fast things were moving outside it's world. This is the situation America also faces in 2024 and beyond who can deliver on the infrastructure capabilities, new research ,and tap American potential to compete in this new world where one innovation will follow another. ...

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Tells the story of Cherry, a state owned company that is China's largest independent car maker. It started about 1995 with just an idea in the head of Zhan Xialai an assistant to the mayor of Wuhu, and some other local government officials, in a poor eastern province Anhui who saw this is a way to boost incomes and growth in the province. Zhan brought in Zhoua manager in a cityowned building supply company. They brought in Yin an Anhui native who worked at a VW joint venture. In 1996 Zhou went to England to buy engine assembly equipment discarded by a Ford plant there and in March 1997 started building its first factory. It hired a Taiwanese company to help design its first model the Fengyun or Wind Cloud which it cobbled together using parts from component makers that supplied the China operations of VW and GM. It was not till Dec 1999 that the first cars came off this makeshift assembly line. And then it ran into bureaucratic obstacles as the company did not have a government license to be in the auto business . To solve this it became a part of the Shanghai Automotive Industry Corporation a large state owned company that had partnerships with VW and GM. Then it wasn't till 2001 that this Fengyun made it to market with 28000 being sold that year. Cherry then began work on a 4 door hatchback minicar that was called the QQ when it went on sale 2 years later in 2003 and looked like the Chevy Spark, a GM model. GM sued Cherry in Chinese court in 2004 saying Cherry had copied its design for the Spark and the lawsuit was settled in 2005. The settlement was described by Cherry as "very friendly." GM may have secured other concessions for manufacture and assembly in China because the QQ was then manufactured with local partners at a plant in southwestern China. It is Cherry's No. 1 model and far outsells the Chevy Spark. About this time in 2003 a big shift was ocurring in China as the car market was being pushed up by continuing development of infrastructure and road expansion, new ventures from Europe and the US expanding car sales in China. Government planners and executives began thinking about how China could develop its own potential in this growing and about to explode market. They decided they had to move upscale and buy the best technologies from Europe and the United Staes and recruit Chinese engineers working in the automotive industries in these regions. This led to a new phase of massive new investments. One of the goals after Cherry's brush with GM over copying its designs, was to acquire and then develop the technology so that it would be Cherry's own technology. In 2003 Cherry hired Xu Min an engineer at Delphi who was an Anhui native and was a specialist in combustion and fuel injection. They turned to an engineering consulting firm in Austria that specializes in internal combustion engines, and this firm AVL List GmbH agreed to train Cherry engineers to design and build the sophisticated engines. The culture that has grown up around this company in Wuhu, Anhui province, is also what drives the company. It exhorts employees in posters hanging on factory walls, "Know plain living and hard struggle." And in some areas of the plant JD Powers charts showing where Cherry lags behind its western counterparts in quality control surveys are shown on bulletin boards. Zhou, Zhan and Yin are known around Anhui and in the rest of China as "the Eight Guardians", a reference to eight defendors of the faith in Buddhist legend. ...

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Lahart reminds readers that the Model 3 from Tesla at $35,000, half the price of $70,000 for a basic Model S in 2014, will not be out till 2017. Models for share price targets of over $200 for Tesla assume the car company will sell these models in large numbers, a Barclays model assuming 350,000 of these cars sold by 2020. It is hard to predict the future for gas prices. In the current environment sales of electric vehicles and popular hybrids such as the Toyota Prius are declining. Tesla faces real challenges considering that gas prices though unpredictable face continuing increases in the development of lower cost shale supplies with new technologies in the future.

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Skepticism about GM's share price and recovery because of management turnover, a cooling off in the Chinese market to 8% growth from 30% in fourth quarter 2010, and fears that the incentives at $3300 per vehicle will again become the norm. GM had its third CEO since coming out of bankruptcy in 2009.