7th June 2011 (Newsletter9)

Hi {name},

Out of the American Big Three auto companies, only Chrysler has failed to set up a substantial partnership in the Chinese market. Chrysler were among the first companies to enter the Chinese market when AMC entered into a joint venture agreement with Beijing Auto Industry Corporation in 1984 and became the first SUV producer in the Chinese market, a few months later SAIC signed up with VW to produce the first passenger car in China. Jeep grabbed the Chinese SUV market in a major way, the Cherokee went onto be produced from ’84 to now, giving it a 27 year market life. The Cherokee is now produced by BAIC under their own brand and is called the Qi Shi. Chrysler did later produce the 300C and also Sebring with BAIC, but the Chinese market were not too taken with either sedans and Chrysler stopped production in China. According to insiders, the original 300C had too much focus on the drivers comfort and neglected the rear passengers, which of course is a cardinal sin for mid size sedans in the Chinese market where the driver is usually a paid member of staff for the boss who sits in the rear. Chrysler also suffered due to its partnership with Daimler, who are also working with BAIC and wanted to push the Mercedes brand in China more than they wanted to push Chrysler’s offerings.

Chrysler are now offering a revamped line up in China, owing to the popularity of SUV ownership in China Jeep’s appear to be selling in strong numbers. Although Wranglers are priced high in China due to them being imported, it does not seem to be slowing them down sales wise, the same can be said for the recently launched Grand Cherokee and the new face lifted Compass has arrived in Chrysler dealerships and will no doubt have a big impact on the compact SUV segment in the next few months. The Jeep Patriot will also follow the Compass into dealers in the next few months.

Chrysler’s future in China is likely to be much brighter now that is free from bankruptcy in the USA and is currently courting Guangzhou Auto who recently signed with Fiat, sometimes it is better to start with a clean slate.

In other China news it looks like June was a mixed bag for automakers in China, the Japanese auto makers appear to be down with the Japanese earthquake being blamed as a major reason for the slow down. Toyota has sold just over 300,000 cars in the first six months of the year, and does have a goal of 900,000 for 2011. The official statistics body, CAAM, have yet to release the figures for June but individual automakers are slowly releasing their figures over the course of the week.

 Saab’s never ending “Saab Story” seems to be  finally drawing to a close, or at least act 5 in Saab’s on going quest to secure funding before its life is ended. Saab recently signed with Pangda and Youngman to develop three models together and to also produce cars in China with Youngman taking up the heavy producing work and Pangda working hard to sell them. On paper, it seems that it is a match made in heaven, in reality it appears to be too many cooks with too little broth to work with.  If Saab can get its production back online in the next few weeks and get its promised models to the Chinese market in time, then there is absolutely every opportunity that Saab can pull through this and became a better company.

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