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Recent Developments in the Automotive Word

Hyundai Motors to Build Automobile Factory in Indonesia

In a statement made by Hyundai Motors , it was reported that a preliminary agreement was signed with the authorities to establish a new car factory in Indonesia. Establishing its first factory in the Southeast Asian region, Hyundai Motors aims to compete with Japanese car brands that dominate market in the region.

In the statement made by the company, it was stated that they planned a total investment of 1.55 billion dollars for the factory to be established in Indonesia, including product development and operating costs by 2030.

The factory is planned to be founded in the city of Bekasi in the west of Jakarta and expected to start production in 2021. The factory initially will have an annual production capacity of 150 thousand units aiming to increase to 250 thousand/year over time. It was noted that the factory was planned to produce multi-purpose MPV and also SUV type vehicles, but also considered for the production of electric cars specific to the Southeast Asian market as well.

Hyundai Motors officials stated that in countries covered by the Association of Southeast Asian Nations (ASEAN), of which Indonesia is a member, import taxes can increase up to 80%, so it is more competitive in the medium and long term to move the production line to the region.

The factory will primarily produce for the Indonesian market, the largest market in the region, and with an increased capacity, will be exporting cars to other ASEAN countries.


BMW and Great Wall Motor to Build New Automobile Factory in China

Officials of BMW and Great Wall Motor, its Chinese partner, announced in a joint statement today that they reached an agreement to establish a new car factory near the city of Shanghai.

It is stated that the planned factory will have an annual capacity of 160 thousand/pcs and that the electric MINI model of BMW will be produced in the factory along with the electric car models within Great Wall Motors. The factory is to be completed with an investment of 650 million Euros, and scheduled to go into production in 2022.

Due to the requirements to comply with the new carbon emission legislation imposed by the Chinese administration and also to meet environmentally friendly electric and hybrid vehicle production quotas, the burden on automakers and dealers has increased considerably. According to the new legislation, sales of electric and hybrid cars to have reached at least one-fifth of total sales by 2025.

It is reported that Great Wall Motors company has completed the necessary permit procedures for the factory planned to be established at the beginning of last month and will employ approximately three thousand people in the new factory.

Great Wall Motor company is one of the largest automotive companies in China, producing in the SUV and pickup truck segment. Great Wall also produces an electric car model with moderate price called Ora at a factory in Baoding, where the company headquarters is located. 

Volkswagen company, which had previously took necessary steps to establish two electric car factories in China, will start production next year with a total capacity of 600 thousand units per year.

Tesla, another company that has completed the construction of the electric car factory in China, is expected to start production at the end of this year with a capacity of 500 thousand per year.


Toyota starts production at plant in Guanajuato State of Mexico

Toyota,  ranking fourth after Nissan, General Motors and Volkswagen with a 7.9% share in the new vehicle sales market in Mexico, announced that it will start production at the Apaseo el Grande factory in the province of Guanajuato in the coming days..

Over $ 700 million was invested in the production facility in question, and despite the decline in new vehicle sales in 2019, the company aims to sell 105,000 vehicles in 2020. In this way, it is aimed to maintain the sales figures of over 100 thousand vehicles annually in the last 5 years. In addition, new Tacoma model vans will be produced at the factory for US market demand.

In January-November period of 2019, Toyota's new vehicle sales were 94,342 units, while there was a 2% contraction compared to the same period of 2018. It is reported that 15.8% of Toyota brand vehicles sold in 2019 consisted of hybrid vehicles and the company is nearing its goal of selling vehicles using more than 5.5 million alternative energy sources by 2025.


Market share of Electric Cars in Norway reached 42.4% in 2019

In the statement made by the Norwegian Drivers Federation said that in 2019, electric car sales increased by 30.9%. In the statement, it was also asserted that Tesla's share dominated the market, but competition is expected to increase in 2020.

On the other hand, the share of automobiles powered by electricity rose to 42.4% in total sales in 2019, placing Norway first in the world ranking. The market share of electric cars in Norway was 5.5% in 2013, which rose to 31.2% in 2018.

Automotive Exports of Mexico Decreased

Automotive exports of Mexico decreased by 3.4% in 2019. In a statement made  by the Association of Automotive Manufacturers of Mexico, it was suggested that automotive exports have decreased for the first time since 2009 and the main reason for this is the contraction in demand in non-US markets.

The decrease in the automotive industry, which is the locomotive power of Mexico's manufacturing sector, has also caused concerns about the general course of the economy. Looking at the condition of the international market and other data, the hurdle experienced due to the contraction in demand is expected to extend to 2020.

In his statement at the press conference, Eduardo Solis, Union President said that there was no problem in factories' capacities and production volumes, but that they had difficulty in finding markets for manufactured cars, and that they observed a serious contraction of demand in the global level.

In other data announced by the Union, automotive exports to the USA increased by about 5% in the section until November of 2019. On the other hand, exports to Canada decreased by 12.5%, while sales to Latin America and Europe decreased by 28.6% and 20.1%, respectively. While automotive production decreased by 12.7% in December, exports decreased by 16.7% on a monthly basis compared to the previous year.


ACEA President Manley: “Mergers in the Automotive Sector Will Continue”

Mike Manley, President of the European Automobile Manufacturers Association (ACEA), said on January 22, that they expect the company marriages in the sector to continue in the future as a result of the imperatives generated by the current global economic conditions and changing environmental legislations, and that production is expected to shift towards countries with lower labor costs.

Manley pointed out that in order to comply with the carbon emission regulations, it is necessary to switch to new technologies and make big investments in the power transmission mechanisms of cars, and this necessity coincides with a phase in which the automobile market is having economically hard times. In addition, President Manley said that the sales of passenger cars in Europe are expected to decrease by 2% this year, and that the reduction in production costs has become one of the top priorities for automobile industrialists.

Emphasizing that the power transmission systems of electric or hybrid vehicles are much more costly compared to systems in conventional combustion engines, Manley said that manufacturers will unavoidably  prefer countries with lower labor costs in terms of balancing costs. Stating that consolidating costs is another method, Manley added that the company mergers for this purpose are expected to continue in the coming period.