Asian, European car makers look to 2011 growth

Paris/Seoul (Reuters): South Korean automakers predicted rising 2011 sales on U.S. and China growth, while France’s car market ended a negative 2010 on a high note, with drivers flocking to bag scrapping bonuses before they ran out.Carmakers are increasingly relying on growth in high-profile emerging markets like China, Brazil, Russia and India, while the U.S. market is gradually recovering.

In Spain, car sales fell for the sixth consecutive month in December, with a 23.9 percent drop. For the full-year, sales rose 3.1 percent.

A 0.7 percent slide in French car sales in December brought the year’s decline there to 2.2 percent, but the French car market saw 2010 out with a bang in terms of new orders, as the final scrapping bonuses spurred drivers to buy new cars.

Orders placed in the final weeks of 2010 mean the French car market will have a strong start to 2011, although beyond the first quarter, uncertainty reigns.

“We have good visibility for the first quarter of 2011,” said Flavien Neuvy, head of the automobile industry research department at French consumer credit organisation Cetelem.

“With the orders from the end of the year we know that the first three months of 2011 overall will be good ... afterwards, there is real uncertainty,” said Neuvy.

He added that the end of 2011 could be difficult, and that there would be a “payback” effect in the second half of the year when the benefits of scrapping ran out once and for all.

In the short term, Neuvy sounded a note of caution about margins, as carmakers offered hefty additional discounts to encourage buyers in the last weeks of the scrappage scheme.

“Certainly they made a lot of marketing efforts, so we can think that will have an effect on vehicle margins. They have focused on volumes -- in France what is really important for carmakers is defending their market share.”

French car sales fell 2.2 percent to 2.25 million units in 2010, carmakers’ association CCFA said on Monday.

“December orders were very good,” said a CCFA spokesman, “but that is not necessarily reflected in sales.”

Car sales or registration figures lag behind orders as customers register their cars when they are delivered a few weeks after the order is placed.

“The first quarter of 2011 should be rather good,” the CCFA spokesman added, as orders taken in the final months of 2010 would show up then.

France originally offered a scrapping bonus of 1,000 euros ($1,339), but it was gradually reduced to 500 euros before finally ending on New Year’s Eve.

“It was an absolutely phenomenal month: we had a market of orders for 370,000 cars, which allows us to start the year with a very comfortable order book,” Renault’s commercial director for France, Bernard Cambier, told BFM radio on Monday.

The French car market saw 370,000 orders registered in December, 30 percent more than the same month last year, he said, adding that Renault itself saw orders rise “almost 46 percent” year-on-year in December.

December car sales figures showed a 5.7 percent increase for the PSA Peugeot Citroen group, while Renault group sales fell 4.6 percent last month, CCFA data showed.

U.S. car sales figures are due out on Tuesday, and December is expected to be the third straight month that U.S. auto sales hold above 12 million vehicles on an annualized basis, capping a year of gradual recovery for the auto sector, analysts said.

The global auto industry rebounded strongly until the first half of 2010 from the industry’s worst ever downturn, but has started losing steam because of the euro zone debt crisis and as the U.S. economy struggles with weak consumer spending.

The market, however, is on track to report healthy growth this year, as the U.S. market gradually recovers and on robust growth from China, now the world’s biggest auto market. Indian automaker Tata Motors (TAMO.BO) said on Saturday its India sales rose 31 percent in December, while Mahindra & Mahindra Ltd (MAHM.BO) reported a 42 percent sales rise last month.

Japan’s new car sales mark first rise in seven years

TOKYO: New vehicle sales in Japan last year rose 10.6 per cent from 2009, the first annual gain in seven years, thanks to government subsidies for green cars, an industry group said on Wednesday.

However December sales tumbled almost a third as the subsidies, introduced by the government to boost the industry in the aftermath of the global downturn, came to an end.

The number of new cars, trucks and buses excluding mini vehicles sold in the country last year came to 3,229,716 units, up from 2,921,085 the previous year, according to the Japanese Automobile Dealers Association.

It said the gain was mainly due to the popular subsidy to encourage motorists to buy eco-friendly cars, which lifted demand and tempered the crippling effects of the financial crisis.

But last month new vehicle sales dropped 28.3 per cent from a year earlier to 179,666, the fourth straight month with a year-on-year drop as subsidies ended in early September, the association said.

The end of the scheme dealt a blow to automakers, which are already struggling to cope with the yen’s strength against other major currencies, forcing them to scale back production.

A strong yen erodes exporters’ incomes when repatriated while making their products more expensive and less competitive abroad.

Hyundai, Kia eye 10% 2011 sales rise after strong December

REUTERS: Hyundai Motor Group and its affiliate Kia Motors aim to boost vehicle sales by 10 percent this year after robust December sales, as the sector shows a gradual recovery, led by China and the United States.

Hyundai, the world’s No.5 auto maker along with Kia, is expected to outperform its peers and gain more market share, driven by new models and its strength in compact cars.

“Hyundai will post lower volume growth this year, but still outperform the market. Hyundai does not want to be another Toyota which was hit by quality issues following fast volume expansion,” Lee Sang-hyun, an analyst at NH Investment & Securities, said.

“Although the South Korean currency remains a major factor, Hyundai’s earnings are expected to improve this year on the back of new models, which will help increase selling prices.”

Hyundai said on Monday it would target sales of 6.33 million cars in 2011, up 10 percent from 5.75 million units sold in 2010. The auto giant did not give a breakdown of Hyundai and Kia sales target. In 2010, Hyundai Motor sold 3.6 million cars, up 16 percent, and Kia shipped 2.1 million vehicles, up 40 percent.

“Hyundai Motor Group’s 2011 target appears to be conservative and fully achievable,” Tong Yang Securities analyst Ahn Sang-jun said.

“Sales growth will be slowing because of a high base effect during the 2009 downturn, but Hyundai will still gain a share in the market, which is expected to grow 7 percent this year led by China and the United States.”