Friday, March 06, 2009

The gallows humor that permeated the Paris auto show in the fall has been replaced by a grudging acceptance that this will be how it is for a while. Except at Saab where the hope is that the Chinese will buy them and at Opel where there is still a feeling of suppressed panic. The admission by Opel’s management that they don’t have the cash to ride out the downturn didn’t help and the news late Thursday that GM’s auditors have cast doubt on the companies future added to the misery.

Trying to impress me, a manager from Mercedes told me that he had it on good authority that Chrysler won’t make it. But anyone who reads the business pages could make that guess. No one I’ve spoken with feels the plan that was given to the Treasury Dept is viable.

The attendance seems ok and the organizers said that they have sold as much display space as before and expect the same number of visitors as last year. The traffic through the booths that Kim & Co manages has been good, so no complaints here. Some attendees have commented that they were planning on buying a new car, but have decided to wait. We’re suggesting they show a little love to their old one.

My feet are tired and my legs are sore, I’m going to take a bath and go to bed early, tomorrow is going to be a long day.



Anonymous Anonymous said...

Saab is dreaming. Why exactly would the Chinese buy them? They've lost money for like 19 of 20 years and have little to offer in terms of plants, markets or technology. I expect some Swedish government backing for an investor group + lots of hope = their best shot at survival, at least as a car maker. Trucks are a different matter.

Chrysler = toast, burnt toast from stale bread. Some brands will survive.

1:24 AM  
Anonymous VJ said...

Yep, not too difficult to discern, especially if you were reading the financial press. What women are supposed to just giggle and nod expressively at these 'pronouncements'?

And of course we're trying to do this every day: 'We’re suggesting they show a little love to their old one.'

Cheers & Have fun! 'VJ'

4:57 AM  
Blogger Kim said...

Anon: For the brand, as damaged as it is. Selling a Saab in Europe or NA will be easier than Chery, Geely or SAIC, even if it one or two models assembled in Sweden of Chinese made components with the rest of the models filling the showroom being Chinese in everything but name.

The rumor I heard this morning and also in the press, is that Chery is close to closing a deal with Ford for Volvo.

5:39 PM  
Anonymous Anonymous said...

Since you're hearing actual talk, I can't contradict you but I don't think it will happen. The Chinese companies are denying interest in either and I can see why: do they really want to buy into Swedish plants that need capital with Swedish work rules, cultural expectations and pension requirements? I think it might be different if they could use existing plants to make their own cars, which they're not ready to do yet internationally, but I don't understand why they'd want to take on brands that are currently underwater and need investment. Saab is just plain a money loser.

Volvo is, I gather, in much better shape but I don't know the status of their facilities. I'd imagine a European buyer with state guarantees before the Chinese.

I forgot that GM doesn't own the truck business so it's just cars, which makes things worse.


9:35 PM  
Blogger Kim said...

M, good points. There are so many rumors and much idle speculation that is being passed as awaiting final approval of the press release.

Needless to say, those who are truly in the know aren't talking. My understanding is that Volvo is in significantly better condition than Saab, but it is not large enough to compete as a standalone auto maker.

Until recently Ford has steadfastly denied any intention to sell Volvo and the reason for the change of heart probably has more to do with Ford's need to raise cash.

7:06 PM  

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