Product Trends in Vietnam
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Product Trends in Vietnam
- In Vietnam, the automobile market is dominated by locally-assembled models due to strict tax measures on imported vehicles. Nearly all recently launched models are remodeled versions of existing products. One exception is the locally-assembled Ford EcoSport. Released in July 2014, the EcoSport isintended to take lead in the small SUV segment where there is little competition. Meanwhile, market-leader Toyota released the fully-remodeled Vios, Yaris and Corolla core passenger vehicles in 2014. In 2016, the Fortuner, is scheduled to be fully remodeled. Honda's City and Accord alsounderwent full-model change.
- Automobile market of the Vietnam is reaching the 200,000-unit level. Apart from growing market demand, tariffs on imported automobiles are scheduled to be abolished in January 2018 within ASEAN. As a result, product imports, primary from Thailand and Indonesia, are expected to expand and diversify in the future. The abolition of tariffs will certainly benefit Japanese, US and European automakers which have local factories in the region; however, it will possibly hamper operations of Korean manufacturers which lack large-scale production facilities in ASEAN.
- Currently, tariffs are imposed on all models regardless whether they are imported from Thailand or Korea, enabling Korean-made models to secure some competitiveness. However, their competitive edge will greatly decline once tariffs within ASEAN are abolished in 2018. For this reason, Kia is putting forth a plan to boost local assembly in Vietnam. Moreover, the Trans-Pacific Partnership free trade pact will abolish tariffs on Japan-made automobiles with an engine over 3.0L which is expected to improve competitiveness of the Lexus and other large engine models.
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Brazil and Argentina continue to decline in 2015
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Brazil and Argentina continue to decline in 2015
- Brazil and Argentina (the two biggest car markets in South America) continued to decline in 2015 after poor results in 2014, both in terms of production and registrations.
- In 2015, vehicle registrations (PC + LUV) in Brazil will fall to 2.5 million units, one million less than in 2014 (-28.6%). The fall in registrations reflects the recession period now seen in Brazil (and that should continue in 2016) but also an aftermath effect of lower taxation on the purchase of vehicles which was granted in 2012 and that "artificially" boosted the automobile market.
- Argentine registrations (PC + LUV) will fall by 600 000 units against 672 000 units, which is less than in 2014 (-11%). The weak economy in 2015 is the main cause. However and contrary to Brazil, Argentina begins to emerge from the aftermath effect of reduce taxation on the purchase of vehicles whose selling price was greater than 170 000 pesos (15 000 Euros).
- In terms of production, Brazil produced nearly 2.4 million vehicles (PC + UV), ie -21% compared to 2014. That of Argentina will amount to just over 500 000 units (15% compared to 2014). It is the poor economic situation in Mercosur which explains the fall of the automotive market and consequently production which has its main sales markets in this region.
- Auto production in Brazil and Argentina is largely elapsed on the South American continent and very few beyond the border. The nature of the products produced here (small cars, often old design, pickups from lower segments, cheap cars) requires this geographic restriction. While some models can even be exported to Mexico, almost none can be sold in the US or Canada.
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What a GM-FCA alliance could represent in terms of production?
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What a GM-FCA alliance could represent in terms of production?
- Would a GM-FCA alliance (desired by Sergio Marchionne, CEO of the FCA group) be relevant? If the strategy of FCA’s leader is mainly focused on scale economies (on the production and platforms development), it is interesting to see what is the current position of these two groups in the global market.
- In terms of sales volume, GM group has sold 9.92 million vehicles in 2014, placing it in third place worldwide behind Toyota and VW. The FCA group for its part sold 4.75 million vehicles in 2014 (two times less than the GM group), placing it in seventh place behind Ford.
- By adding up the sales of both groups, GM and FCA would hypothetically become the world leader. However competition between the brands of the two groups exist as they are placed on the same market segments, with a significant number of brands to manage. For example, in the US, the Pick-ups Chevrolet Silverado (GM) produced at 625 000 units in 2014, GMC Sierra (GM) produced at 275 000 units in 2014 and Dodge RAM (FCA) produced 565 000 units in 2014 are in strong competition.
- Geographically, the main markets for GM are the USA and China (2.9 million and 3.3 million vehicles in 2014, respectively) representing 62.5% of its sales. FCA's main markets are the USA and Europe (2.1 million and 1.1 million vehicles in 2014, respectively) representing 67.5% of sales. In South America, the two groups are equal. Except for Asia, the areas of influence of the two carmakers are fairly complementary.
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Product Trends in Philippines
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Product Trends in Philippines
- In the Philippines, the SUV segment, which is the country's volume-selling vehicle type, is seeing active launches of B segment passenger vehicle-based small models. Apart from small SUVs, new MPVs and pickup trucks are also attracting attention. As a separate development, carmakers are intensifying launches of new models which comply with the country's stricter emission regulation. The Philippines plans to raise emission regulation from the current Euro 2 level to Euro 4 in January 2016. Powertrain upgrades are carried out by the introduction of direct-injection engines and CVTs.
- Looking at the SUV segment, Ford released the fully-remodeled Escape andEverest in 2015. In 2016, additional full-model changes are expected which includes the Toyota Fortuner, the Mitsubishi ASX and Montero Sport, and the Hyundai Tucson. In addition, the Ford Eco Sport was released in January 2014, followed by the Honda HR-V in June 2015 and the Chevrolet Trax in October of the same year. In the pickup truck segment, Nissan released the fully-remodeled Frontier (called Navara in other markets) and renamed it to NP300 Navara in February 2015. As for other automakers, Mitsubishi launched the new Strada in March 2015 and Toyota released the fully-remodeled Hilux inJuly of the same year. In the MPV segment, small models with an engine displacement of 1.6L or smaller are actively released. Suzuki launched the Ertiga in July 2014, followed by the Honda Mobilio in April 2015.
- In the B segment, Honda released the fully-remodeled City and Jazz in April and June 2014 respectively, both fittedwith CVT. Mazda launched the fully-remodeled Mazda2 in July 2015. The model combines the 1.5L SkyActiv-G engine and a six-speed automatic transmission. Nissan released the Sylphy in 2014 and is available with five-speed manual and continuously variable transmission.
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Product Trends in Malaysia
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Product Trends in Malaysia
- In Malaysia, small passenger vehicle models of the A and B segments are launched primarily by the country's two national carmaker Perodua and Proton, drawing attention to new models which are scheduled to be released in 2016. Inaddition, foreign automakers are actively launching new SUVs, a trend which is expected to speed up in the coming years.
- Perodua is scheduled to launch a small sedan (codenamed D63D) in 2016. The model is based on the Axia which wasreleased in September 2014. The addition of this small sedan to its three-model lineup is intended to gain access to the Proton Saga segment which enjoys strong demand.
- Proton, which has been hastily revising its product competitiveness, plans to start CKD assembly of a Suzuki model, possibly the Celerio, by October 2016 and sell it under the Proton brand. According to information collected by our partner based in China, Proton is considering local assembly of a 1.0Lengine to set foot in the A segment which is Perodua's stronghold.
- Foreign carmakers are stepping up SUV launches. The Nissan X-Trail was released in December 2014, followed by the Honda HR-V in February 2015. In the coming months, the Mazda CX-3 is scheduled to be launched at the end of 2015 and the Honda BR-V is set to be released in 2016. Toyota may also launch a small SUV which is expected to further intensify competition in the SUV segment.
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