Hyundai sees European car demand shrinking in H2

July 30, 2010 By Leave a Comment

July 29 (Reuters) – Hyundai Motor Co (005380.KS), South Korea’s top automaker, expects car demand in Europe to shrink in the second half as government incentives for new cars are phased out, an executive said on Thursday.

Hyundai executive vice president Lee Won-hee said the world’s No.5 car maker along with its affiliate Kia Motors Corp (000270.KS) saw sales growth in China slowing down slightly in the second half, although it would still be strong.

Hyundai expects to maintain strong growth with new models and is likely to exceed its business targets, Lee told investors. (Reporting by Cheon Jong-woo; Editing by Jonathan Hopfner)

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Toyota expects to be able to build Prius in North America

July 28, 2010 By Leave a Comment

(Reuters) – A senior executive of Toyota Motor Corp (7203.T) said on Tuesday he expects the automaker to be able to build Prius gas-electric hybrid cars in North America from the next remodeling.

Atsushi Niimi, Toyota executive vice president in charge of production, also said he expects a slow recovery in the U.S. market.

(Reporting by Chang-Ran Kim)

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Toyota expects to be able to build Prius in N.America

July 28, 2010 By Leave a Comment

July 27 (Reuters) – A senior executive of Toyota Motor Corp (7203.T) said on Tuesday he expects the automaker to be able to build Prius gas-electric hybrid cars in North America from the next remodelling.

Atsushi Niimi, Toyota executive vice president in charge of production, also said he expects a slow recovery in the U.S. market. (Reporting by Chang-Ran Kim)

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Toyota to post Q1 operating profit of $1.1 billion: Nikkei

July 26, 2010 By Leave a Comment

(Reuters) – Toyota Motor Corp (7203.T) is likely to have secured a group operating profit of about 100 billion yen ($1.1 billion) in April-June, thanks to solid sales and a sharp recovery from the previous year’s loss, the Nikkei business daily said on Sunday.

But the automaker, which had a loss of 194.8 billion yen in the same period last year, is likely to keep its annual profit forecast unchanged due to uncertainty over the European and U.S. economies, the report also said, without citing sources.

Toyota, the world’s biggest automaker, has been plagued since last September by a crisis over safety and equipment that has led to the recall of more than 10 million vehicles globally.

Toyota and rival Honda Motor (7267.T) have also been hit by strikes in the past few months at Chinese plants providing parts. Both makers suspended production in China to varying degrees due to supply shortages caused by strikes.

But strong sales in emerging or resource-rich countries, such as in the Middle East, helped Toyota shake off negative factors, including a stronger yen.

Toyota, which competes with global peers such as General Motors GM.UL or Ford Motor (F.N), also saw strong sales of its Prius hybrid model in Japan, the Nikkei report said.

In the three months to June, the Toyota Group — including Hino Motors Ltd (7205.T) and Daihatsu Motor Co (7262.T) — sold between 1.8 million and 1.9 million vehicles, about 30 percent more than a year earlier, the report said.

Toyota’s sales are also picking up in North America after being hurt by the mass recalls, the paper said.

The automaker’s sales could lose some steam later in the year, however, as the Japanese government ends subsidies on purchasing so-called eco cars in September, the paper said.

Toyota officials were not immediately available for comment.

Toyota projects an operating profit of 280 billion yen for the current fiscal year to March, up 90 percent from the previous year.

(Reporting by Mariko Katsumura; Editing by Ron Popeski)

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Tofas to develop electric Doblo engine with Arcelik

July 26, 2010 By Leave a Comment

July 25 (Reuters) – Turkish automaker Tofas (TOASO.IS) will develop the engine for an electric version of Fiat’s Doblo vehicle with Arcelik (ARCLK.IS) and be ready for production by mid-2011 if demand rises, Tofas said.

Tofas, in which Fiat (FIA.MI) and Turkish conglomerate Koc Holding (KCHOL.IS) each own 38 percent, plans to sell the car to European markets and could export it to the United States in the future, Tofas’s chief executive, Ali Pandir, told reporters.

Turkey’s automotive sector, the heart of its export industry, was hit last year by the sharp slowdown in key export markets in Europe and also weak domestic demand.

“Because we are the base for light commercial vehicle production and research and development, Fiat assigned the electrification of these vehicles to us,” Pandir said.

The cost of the electric Fiat Doblo EV prototype is put at 20 million euros ($25.75 million) and an investment of 5-10 million euros could be required for the manufacture of some 500-1,000 vehicles a year depending on demand from Europe.

“We will develop the electric engine together with Arcelik. Arcelik have know-how on the subject of electric engines and we have vehicle technology,” he said.

Turkey’s Arcelik is a household appliances manufacturer and Europe’s third-largest white goods maker. Conglomerate Koc owns some 40 percent of the company.

“We target mid-2011 for production (of the electric car), but it depends on market conditions,” said Tofas research and development director Kemal Yazici.

Tofas has for now shelved plans to export the regular Doblo to the United States due to market conditions, but could export the electric version if the market grows, Pandir said.

Tofas posted a net profit of 118.3 million lira in the first quarter, more than three times higher than the previous year’s profit, as its markets recovered from last year’s sharp decline. ($1=.7766 euros) (Writing by Daren Butler; Editing by Greg Mahlich)

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Toyota to post Q1 operating profit Y100 bln-Nikkei

July 26, 2010 By Leave a Comment

July 25 (Reuters) – Toyota Motor Corp (7203.T) is likely to have secured a group operating profit of about 100 billion yen ($1.1 billion) in April-June, thanks to solid sales and a sharp recovery from the previous year’s loss, the Nikkei business daily said on Sunday.

But the automaker, which had a loss of 194.8 billion yen in the same period last year, is likely to keep its annual profit forecast unchanged due to uncertainty over the European and U.S. economies, the report also said, without citing sources.

Toyota, the world’s biggest automaker, has been plagued since last September by a crisis over safety and equipment that has led to the recall of more than 10 million vehicles globally.

Toyota and rival Honda Motor (7267.T) have also been hit by strikes in the past few months at Chinese plants providing parts. Both makers suspended production in China to varying degrees due to supply shortages caused by strikes.

But strong sales in emerging or resource-rich countries, such as in the Middle East, helped Toyota shake off negative factors, including a stronger yen.

Toyota, which competes with global peers such as General Motors [GM.UL] or Ford Motor (F.N), also saw strong sales of its Prius hybrid model in Japan, the Nikkei report said.

In the three months to June, the Toyota Group — including Hino Motors Ltd (7205.T) and Daihatsu Motor Co (7262.T) — sold between 1.8 million and 1.9 million vehicles, about 30 percent more than a year earlier, the report said.

Toyota’s sales are also picking up in North America after being hurt by the mass recalls, the paper said.

The automaker’s sales could lose some steam later in the year, however, as the Japanese government ends subsidies on purchasing so-called eco cars in September, the paper said.

Toyota officials were not immediately available for comment.

Toyota projects an operating profit of 280 billion yen for the current fiscal year to March, up 90 percent from the previous year. (Reporting by Mariko Katsumura; Editing by Ron Popeski)

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Lincoln Makes History With Pricing for America’s Most Fuel-Efficient Luxury Sedan – 2011 MKZ Hybrid

July 23, 2010 By Leave a Comment

Lincoln’s new MKZ Hybrid – the most fuel-efficient luxury car in America – will be a standout in the marketplace for another unique distinction when it goes on sale this fall: It will be priced the same as its conventional gas sibling.

“Lincoln is about delivering luxury standard,” said John Felice, general manager, Ford and Lincoln Marketing. “Whether it’s our new MKX with standard MyLincoln Touch™ technology or the no-cost choice of a gas or hybrid powertrain with the Lincoln MKZ, we want to give customers premium amenities with unexpected value.”

When the 2011 Lincoln MKZ Hybrid goes on sale this fall, it will have an MSRP starting at $35,180, including destination and delivery. The pricing is identical to the 2011 Lincoln MKZ gas model and below the 2010 Lexus HS 250h, the MKZ Hybrid’s nearest competitor.

Lincoln is the first automaker to offer luxury customers a premium hybrid vehicle with an MSRP that matches its conventional gas sibling.

The decision to offer the Lincoln MKZ Hybrid and gas models at the same price point is another example of the Lincoln brand’s philosophy of bringing luxury standard to customers. From standout product design, and class-leading technology and powertrains that deliver top performance and fuel efficiency, Lincoln is changing the game in the luxury market.

2011 Lincoln MKZ Hybrid redefines future of American luxury

The new 2011 Lincoln MKZ Hybrid is a game-changing vehicle that offers modern car buyers all the indulgence of a premium midsize sedan and all the environmental benefits of a hybrid vehicle at an amazing price.

Building on Ford’s reputation as a world leader in electrified technology, the 2011 Lincoln MKZ Hybrid uses the company’s second-generation hybrid technology – the 2.5-liter Atkinson-cycle I-4 hybrid engine – named one of Ward’s 2010 “10 Best Engines.” The system combines the best attributes of the gasoline engine and electric battery-driven motors to deliver optimal performance and fuel economy.

The Lincoln MKZ Hybrid delivers a 41 mpg fuel economy rating in the city, topping its only near competitor – the 2010 Lexus HS 250h – by 6 mpg. It also trumps the Lexus with more passenger space, more standard luxury and segment-exclusive safety features.

The following features come standard on the 2011 Lincoln MKZ Hybrid. They are either not offered at all on the Lexus HS 250h, or are available at an extra cost:

* SmartGauge™ with EcoGuide – Ford’s highly successful interactive technology provides real-time information to help drivers maximize fuel efficiency, and coaches drivers on how to optimize hybrid performance. Lincoln takes SmartGauge to the next level of engagement by giving drivers enhanced positive feedback on long-term fuel efficiency and driving performance through the “growth” of virtual small flowers on the system’s right-most screen. Lincoln’s white flowers, inspired by apple blossoms, remain permanently unless long-term fuel economy is reset.

* Genuine wood trim – In addition to their exquisite appearance, the Swirl Walnut and Olive Ash wood trims offered in the Lincoln MKZ Hybrid are eco-friendly as well. The veneers come from well-managed forests, as defined by strict environmental, social and economic standards, and from other rigorously controlled sources.

* Bridge of Weir leather-trimmed seats – The world-renowned luxury leather from Scotland is unembossed, allowing the natural beauty and character of the grain to shine through. The leather is milled for up to 12 hours to ensure a buttery, soft hand, and Bridge of Weir uses a chromium-free tanning process, which makes it easier to recycle.

* Lincoln SYNC® – The Lincoln-exclusive voice-activated communications and entertainment system provides an omnipresent link to contacts and information. In addition to Bluetooth® phone, audible text and MP3 player capabilities, Lincoln customers also can access Vehicle Health Report and 911 Assist™.

* 10-way power passenger seat – The seat is designed to accommodate a diverse group of passengers. Memory functions enable passengers to fine-tune and recall positions.

* Power driver memory seat settings – The driver seat memory feature helps ensure personal seating preferences anytime, with the touch of a button.

* Heated and cooled front seats – This uniquely engineered system delivers exceptional heating and cooling comfort.

* Reverse sensing system – This system senses what drivers might not see behind them and relays an audible alert if objects are near, which increases in frequency the closer a driver gets.

* Keyless entry keypad – This Lincoln-exclusive feature provides secure entry at a driver’s fingertips. A personal combination holds a memory for driver preferences. So if an owner is out for a run and doesn’t want to take the keys along, the vehicle can be opened with the touch of a few buttons.

* Easy Fuel® (capless fuel filler) – This Lincoln-exclusive feature uses an integrated spring-loaded flapper door to eliminate the need for a fuel tank screw cap. That means no more fumbling to remove and tighten the cap and less fuel odor on a driver’s hands.

* Personal Safety System™ – This Lincoln-exclusive suite of seven protection technologies work together as a system to help protect vehicle occupants. The system includes dual-stage front airbags and an occupant classification system to sense whether the passenger seat is occupied. It tailors – or suppresses – airbag deployment to help provide an appropriate level of protection. It also features the Ford Belt-Minder® system to remind front seat occupants to buckle up.

* MyKey™ – This Lincoln-exclusive feature allows parents to program a key to limit speed and audio volume to encourage teens to drive safer and improve fuel efficiency. It also encourages seat belt use, provides earlier low-fuel warnings, and can be programmed to sound chimes at 45, 55 and 65 mph.

* Integrated spotter mirrors – The traditional sideview mirrors are designed with a secondary convex spotter mirror in the top outer corner, which provides a view of the driver’s blind spot. When traffic enters the driver’s blind spot on either side of the vehicle, it is visible in the secondary convex mirror, alerting the driver of obstacles.

* Acoustic laminated windshield – This windshield features a layer of sound-absorbent vinyl sandwiched between two sheets of glass, which enhances interior quietness.

“Customers are very enthusiastic about the MKZ Hybrid and we think they will be even more excited to learn they sacrifice nothing to be able to go green in style,” said Felice. “We’re launching a world-class hybrid that beats all competitors, and at an introductory price that is sure to draw the interest of new customers to Lincoln.”

About Ford Motor Company

Ford Motor Company (NYSE: F), a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 176,000 employees and about 80 plants worldwide, the company’s automotive brands include Ford, Lincoln and Mercury, production of which has been announced by the company to be ending in the fourth quarter of 2010, and, until its sale, Volvo. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.ford.com.

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Honda to launch plug-in hybrid,electric car in 2012

July 21, 2010 By Leave a Comment

Japan, July 20 (Reuters) – Honda Motor Co (7267.T), Japan’s No. 2 automaker, said on Tuesday it would launch a plug-in hybrid car and a battery electric model in the United States and Japan in 2012. (Reporting by Chang-Ran Kim)

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Ford breaks ground on $300 million China plant

July 19, 2010 By Leave a Comment

(Reuters) – Ford Motor (F.N) and its partly-owned Jiangling Motors Corp (000550.SZ) broke ground on Sunday on a $300 million vehicle plant in central China as the partners speed expansion in the world’s largest auto market.

The facility, capable of producing up to 300,000 units annually, will start operation at the end of 2012, the U.S. automaker said in a statement.

Jiangling, 30 percent controlled by Ford, currently operates two plants, with combined capacity of 210,000 units, making JMC and Ford’s Transit models.

Models carrying Ford and JMC nameplates will be made at the new facility, it said.

(Reporting by Fang Yan and Jacqueline Wong; Editing by Ken Wills)

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Ford, Jiangling break ground on $300 mln China plant

July 19, 2010 By Leave a Comment

July 18 (Reuters) – Ford Motor (F.N) and its partly-owned Jiangling Motors Corp (000550.SZ) broke ground on Sunday on a $300 million vehicle plant in central China as the partners speed expansion in the world’s largest auto market.

The facility, capable of producing up to 300,000 units annually, will start operation at the end of 2012, the U.S. automaker said in a statement.

Jiangling, 30 percent controlled by Ford, currently operates two plants, with combined capacity of 210,000 units, making JMC and Ford’s Transit models.

Models carrying Ford and JMC nameplates will be made at the new facility, it said.

(Reporting by Fang Yan and Jacqueline Wong; Editing by Ken Wills)

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Honda: affiliated supplier’s China plant on strike

July 16, 2010 By Leave a Comment

(Reuters) – Honda Motor Co (7267.T) said workers at a Chinese factory owned by unlisted affiliate Atsumitec Co have been on strike since July 12, with no resolution reached as of Thursday.

Japan’s No.2 automaker, which has been plagued by supplier strikes since late May, said its four car plants in China were operating as usual with inventory. A spokeswoman in Tokyo said Atsumitec’s factory, in Foshan, Guangdong province, supplies shift levers to Honda’s local plants.

(Reporting by Chang-Ran Kim)

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Honda: affiliated supplier’s China plant on strike

July 16, 2010 By Leave a Comment

July 15 (Reuters) – Honda Motor Co (7267.T) said workers at a Chinese factory owned by unlisted affiliate Atsumitec Co have been on strike since July 12, with no resolution reached as of Thursday.

Japan’s No.2 automaker, which has been plagued by supplier strikes since late May, said its four car plants in China were operating as usual with inventory. A spokeswoman in Tokyo said Atsumitec’s factory, in Foshan, Guangdong province, supplies shift levers to Honda’s local plants. (Reporting by Chang-Ran Kim)

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UPDATE 1-Nissan says Hitachi delay may hit US, Mexico output

July 14, 2010 By Leave a Comment

YOKOHAMA, Japan, July 13 (Reuters) – Nissan Motor Co (7201.T) said on Tuesday a delay in the supply of electronic control units from Hitachi Ltd (6501.T) that is disrupting production in Japan could also affect its U.S. and Mexico factories.

Japan’s No.3 automaker said on Monday it would halt part of its domestic production for three days starting Wednesday after Hitachi said delivery of engine control units was running behind schedule. Production would return to normal next week, it said.

“We’re working around the clock to try and minimise any inconvenience to our customers,” Chief Operating Officer Toshiyuki Shiga said at the launch of the fourth-generation March in Japan.

“For now, we’re still gauging when and whether we would need to halt production in the United States.”

Shiga said the Hitachi-made component was used in most Nissan vehicles, but any impact would likely be at plants in Smyrna, Tennessee, and Mexico.

“If there is any impact it would first be on big-volume models like the Altima or Sentra (sedans),” he added.

Nissan’s shares ended down 1.5 percent at 645 yen on Tuesday, while the TOPIX index of first-section shares lost 0.4 percent. (Reporting by Chang-Ran Kim and Kentaro Sugiyama; Editing by Michael Watson)

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Tesla Opens Showroom in Copenhagen

July 1, 2010 By Leave a Comment

Automaker`s 13th Regional Sales and Service Center Will Serve Scandinavia
COPENHAGEN, Denmark–(Business Wire)–
Electric vehicle manufacturer Tesla Motors will open its newest showroom this
week in Denmark`s largest city.

Tesla`s 13th worldwide store is at Bredgade 35, in the heart of Copenhagen,
recognized internationally as one of the world`s most environmentally friendly
places. Copenhagen, which hosted the most recent UN Conference on Climate
Change, generates a growing percentage of its grid`s energy from the famous
offshore wind farm at Middelgrunden. The city is working to reduce CO2 emissions
by 20 percent by 2015.

“People in Denmark believe in social responsibility, and the Tesla Roadster is
the only electric vehicle that combines a world-class sports car with their
values of environmental stewardship,” said Cristiano Carlutti, Tesla`s Vice
President for European Sales and Operations. “We are thrilled that customers in
Denmark and throughout Scandinavia have embraced not only the Roadster but the
core business philosophy of Tesla Motors.”

The US Ambassador to Denmark, Laurie S. Fulton, will kick off festivities at 2
p.m. July 1. Tesla is hosting a media open house from 2 p.m. to 5 p.m.,
including test drives, executive interviews and surprise guests. An
invitation-only VIP gala will follow in the evening, and the store will be open
for prospective customers to test-drive the Roadster throughout the weekend.

The zero-emission Roadster does not pay traditional vehicle taxes in Denmark. By
contrast, people who buy conventional petroleum-burning cars pay up to 180
percent car tax on top of the manufacturers` sales price. Tax waivers combined
with expensive gasoline prices mean that the Tesla Roadster is a tremendous
value relative to comparable cars in Denmark.

Tesla`s founding goal is to produce energy-efficient cars for mass-market,
mainstream consumers. Tesla deliberately started with the Roadster, a premium
sports car aimed at affluent “thought leaders,” in order to establish a proof of
technology and shatter the prevailing stereotype that electric cars are
underpowered and unfashionable. Based in California`s Silicon Valley, Tesla has
already delivered more than 1,000 cars in at least 25 countries, and has forged
strategic alliances with Daimler and Toyota to produce zero-emission cars.

The Roadster accelerates faster than other sports car in its price class yet has
zero tailpipe emissions. It consumes no petroleum and plugs into conventional
sockets – at owners` garages or offices, hotels, parking decks or at a growing
number of charging stations throughout Scandinavia. It`s the only sports car
that can be fully or partially recharged by renewable energy – and several
regional customers charge on 100 percent solar power from their photovoltaic
panels or wind power from turbines.

About Tesla

Tesla has already delivered more than 1,000 zero-emission cars in at least 25
countries. With a relentless focus on customer service, Tesla sells cars
directly to clients, both online and at four showrooms in Europe: Zurich,
Munich, Monaco and London, and in Copenhagen starting July 1. Tesla has eight
additional showrooms in North America.

Tesla Motors
Media:
Rachel Konrad, +44 7872 543 250
rachel@teslamotors.com
Sales:
Esben Pedersen, +45 2010 5063
epedersen@teslamotors.com

Copyright Business Wire 2010

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Toyota chief apologises for recalls, vows growth

June 25, 2010 By Leave a Comment

June 24 (Reuters) – Toyota Motor Corp (7203.T) President Akio Toyoda apologised to shareholders for the car maker’s recall troubles and promised a fresh start with a growth strategy built on emerging markets and environmental leadership.

Chairing the annual shareholders’ meeting, Toyoda opened his remarks on Thursday with an apology for what has become the worst quality crisis in Toyota’s history involving recalls of more than 10 million cars since late last year, mostly for problems of unintended acceleration.

“I would like to apologise once again for all the worries we have caused our shareholders,” Toyoda, grandson of the automaker’s founder, told the more than 3,000 shareholders who made the trip to Toyota’s headquarters in Toyota City.

“But we’ve managed to post a profit after a year of losses and I feel like we are finally at the starting line this year,” he said.

In contrast to Toyoda’s own first year at the helm, the two-hour-long shareholders’ meeting ended with few ripples. Some shareholders voiced words of encouragement even as Toyota faces potential civil liability estimated at more than $10 billion from lawsuits in the United States. [ID:nN23230040]

And unlike at rival Nissan Motor Co’s (7201.T) annual general meeting the day before, no mention was made of executive compensation. Toyota’s 38 directors, all Japanese, made 37.5 million yen ($417,000) on average last year, a fraction of the 980 million yen Nissan CEO Carlos Ghosn took home. [ID:nTOE65K056]

The meeting had its moments of light humour, when one shareholder chided the 54-year-old Toyoda for crying in public, referring to his tearful, televised speech to a gathering of U.S. dealers after a grilling in Congress in late February.

“Mr. Toyoda, you’ve been all over the media this year and you’ve gone teary-eyed on several occasions,” the shareholder said. “For a man of your position, this is unacceptable. Please keep your chin up and try not to weep!” he pleaded.

An unfazed Toyoda quickly responded, with a hint of self-deprecating humour, that he would “try not to go teary-eyed” in public again, but justifying them as “tears of joy” when he perceived the dealers’ support at the end of a trying month of attacks from lawmakers and media.

Toyoda and other executives recapped the steps Toyota was taking to prevent a repeat of the recall debacle, including giving more autonomy to its regional operations to speed up the process of quality fixes.

As part of those efforts, Toyota on Thursday appointed several local managers to senior positions at its overseas affiliates.

It said in a statement Didier Leroy, executive vice president of Toyota Motor Europe, would be promoted on July 1 to become the first European, non-Japanese to head the unit. He will replace Tadashi Arashima, who will retire.

Toyota also appointed presidents for manufacturing companies in Texas and Kentucky, among others.

After a $2 billion hit to its earnings last year from the recall fallout, Toyota has forecast a much slower-than-expected recovery in earnings this year, held back as a stronger yen. It expects an operating profit of 280 billion yen for the year ending in March 2011, up from 147.5 billion yen posted last year. [ID:nTOE64902V] (Editing by Chris Gallagher)

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Ex-worker goes on rampage at Mazda plant, kills one

June 23, 2010 By Leave a Comment

June 22 (Reuters) – A former Mazda Motor (7261.T) employee driving a station wagon smashed into Madza workers as they changed shifts at one of the car maker’s plants in Japan, killing one and injuring 10, the automaker said.

Cyclical Consumer Goods

The driver, Toshiaki Hikiji, was arrested less than an hour later a few kilometres away on suspected murder and other charges, Hiroshima prefectural police spokeswoman Takae Shiozaki said.

National broadcasters reported that Hikiji, a 42-year-old temporary worker, told police he had been fired two months ago and wanting to cause harm to Mazda, drove a Mazda Familia through the factory grounds intending to kill.

Mazda said Hikiji had started on April 1 but resigned eight working days later citing personal reasons.

National broadcasters showed swarms of police at Mazda’s Ujina factory in Hiroshima, where workers had been coming in and out of the plant between the night and day shifts at the time of the crime.

The Ujina plant builds the popular Mazda2/Demio subcompact and other models. (Reporting by Chang-Ran Kim; Editing by Edwina Gibbs)

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UPDATE 4-Honda China parts plant restarts, walkout threatened

June 3, 2010 By Leave a Comment

FOSHAN, China, June 2 (Reuters) – Honda Motor (7267.T) said a key car parts factory in south China resumed full production on Wednesday, ending more than two weeks of disruption after workers downed tools to demand higher wages in a high-profile and sometimes violent strike.

But the resumption did not mark a clean end to the prolonged labour dispute, with part of the workforce agreeing to return only until Friday, when they expect the company to respond to a list of as-yet unmet demands.

Japan’s No. 2 automaker has had to suspend vehicle production in the world’s biggest and fastest-growing car market since last week after workers at the 1,900-strong wholly owned parts factory, in Foshan, Guangdong province, refused to work until their demands for more pay and other conditions were met.

Although not technically illegal, strikes in China are often seen as a threat to social order and are quickly stamped out. More disputes have been erupting lately between workers resentful of large income disparities and harsh working conditions, and employers trying to rein in rising costs.

On Wednesday, Taiwan’s Hon Hai Precision Industry (2317.TW) said it plans to raise workers’ salaries by 30 percent at its Foxconn (2038.HK) manufacturing hub in southern China, following a string of suicides there. [ID:nTOE65100X]

In the northern city of Shenyang, a trade union representing workers for U.S. fast food chain KFC said on Wednesday that the company had not responded to demands for a pay hike, according to local media. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ^ For ANALYSIS on why China labour unrest is good: [ID:nTOE61N071] For ANALYSIS on new generation of China workers: [ID:nTOE64U08D] For a GRAPHIC on China average yearly wages: here For Reuters Insider video on the need for higher wages as worker unrest rises: link.reuters.com/zer67k ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ >

FRIDAY DEADLINE

Honda said its four Chinese car factories, with combined annual output capacity of 650,000 units, would remain idled as planned at least through Thursday. The maker of the Accord and Civic models will decide on Thursday whether to restart production on Friday.

Honda has put the politically sensitive negotiations in the hands of local government experts and government-backed union members, some of whom clashed with factory workers on Monday.

Honda spokeswoman Akemi Ando said most of the workers at the parts factory had agreed to come back to work for the company’s offer for a 24 percent hike in starting salary. She added that some were still holding out but their numbers were decreasing.

A day earlier, Zeng Qinghong, a member of the National People’s Congress and vice chairman of a Honda joint venture partner, Guangzhou Automobile Group, visited the factory to negotiate with the workers on behalf of the company, Honda said. It declined to provide details.

But some workers have agreed only to a temporary return, said one 18-year-old intern from the southern city of Changsha.

“Management told us that they will respond to our demands by Friday. If they don’t, we’ll go back on strike,” said the intern, who added there was a 70 percent chance of another walkout.

About a third of the plant’s workforce are interns, who as vocational students typically receive lower wages and fewer benefits than regular employees. Many factories in southern China employ interns, who are required by their schools to complete a stint at manufacturing sites.

INTERNS

Interns at the plant are seeking, among other demands, an 800 yuan ($117.2) monthly salary hike, an annual salary increase of no less than 15 percent, year-end bonuses no less than the preceding year’s, salaries during the strike period, and a new chairman to lead a restructured union.

The intern told Reuters that the company had offered to raise wages from 900 yuan per month for interns to between 1,300 and 1,400 yuan. Regular workers will receive 1,900 yuan before deductions for insurance, the intern said. The legal minimum wage is 920 yuan.

Two guards standing outside the factory — a large complex of tidy, low-rise buildings — said employees had come back to work as usual on Wednesday morning. A woman working at one of the factory’s restaurants also said things had returned to normal inside the plant.

That was a sharp contrast to Monday, when a tussle between angry workers union representatives resulting in several injuries, according to factory employees.

Honda sold about 580,000 cars in China last year, about 17 percent of its global sales. Even as workers at the parts plant went on strike last week, the automaker announced expansion fresh plans to lift production capacity in China to 830,000 units a year as it aims to catch up with rivals including Toyota Motor Corp (7203.T) and Nissan Motor Co (7201.T). [ID:nTOE64O045]

Shares in Honda closed down 1.9 percent on Wednesday in a , broader market .N225 down 1.1 percent. ($1=6.827 Yuan) (Additional reporting by Chang-Ran Kim in TOKYO; Don Durfee and Doug Young in HONG KONG; Fang Yan in SHANGHAI; Writing by Chang-Ran Kim; Editing by Lincoln Feast)

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UPDATE 2-Honda China production still out after strike, clashes

June 2, 2010 By Leave a Comment

FOSHAN, China, June 1 (Reuters) – Honda Motor Co (7267.T) made little progress on Tuesday in resuming production at a parts factory in south China after a prolonged and high-profile strike that has highlighted growing labour unrest in the region.

Japan’s No.2 automaker said most of the 1,900 workers — including about 600 interns — at the wholly owned parts factory had agreed to management’s offer for a 24 percent wage hike, with less than 100 holdouts still refusing the terms after violent clashes on Monday.

As of late Tuesday afternoon, the majority of interns had gone back to work after an executive from Guangzhou Automobile, Honda’s Chinese partner, urged workers to give management three days to meet their demands, said a witness who had spoken with one of the interns.

Those demands included a wage hike, guaranteed bonuses, and a promise to not to fire any strikers returning to work. It was unclear how many regular employees had picked up their tools again.

The tussle between union members, striking workers and those trying to work within the factory was preventing a smooth transition to operations, Honda spokesman Yoshiyuki Kuroda said.

China has been hit with a string of labour disputes at foreign companies, whose migrant workers have begun to demand better pay and conditions.

Strikes are technically illegal in China, which fears any overt signs of social unrest, but have become more common as employers try to rein in rapidly rising costs, especially in southern China, dubbed “the world’s workshop”. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ^ For ANALYSIS on China labour issues: [ID:nTOE64U08D] For Reuters Insider video: link.reuters.com/sur37k ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ >

INCOME DISCREPANCY ANGERS

Honda has been unable to build cars in the country, the world’s fastest-growing car market, since last week after workers at the parts plant went on strike demanding higher pay. With few transmissions built and inventory running low, Honda said it would probably keep all four local assembly plants idle through Thursday.

The company said it would decide on Thursday what its plans were for June 4.

Analysts said Chinese workers were growing increasingly impatient with the difference between their own wages and those of their foreign co-workers.

“People get angry about the huge income discrepancy between Taiwanese or Japanese workers and local Chinese workers,” said Zhang Chenhao, a China equities analyst with JLM Pacific Epoch.

“This is the second generation of migrant workers, and they want similar jobs and lifestyle as regular employees. (This strike) will be an example for other workers in China. This is quite a significant trend.”

At a dormitory for workers in a nearby village, an 18-year-old intern told Reuters a company representative came by to tell workers not to go to work on Tuesday in case of a repeat of conflicts that flared up the previous day.

On Monday, some striking workers displayed scratches underneath their shirts, saying they were roughed up by union officials who tried to push them out of factory grounds as police and reporters watched. [ID:nTOE64U02X]

The Communist Party-backed All China Federation of Labour Unions discourages independent worker activism and generally sides with management.

On Tuesday morning, about 100-200 angry workers approached the factory gate from inside the compound to appeal to reporters, complaining about being beaten by union members the day before, according to a witness.

The intern at the dormitory, who asked not to be identified due to the sensitivity of the matter, said many workers were not signing the contract yet because they were still angry and wanted to see how the company responded to Monday’s violence.

FASTEST GROWING AUTO MARKET

Including a small exports-only factory producing the Jazz subcompact, Honda’s four China plants have the capacity to build 650,000 cars a year, some 15 percent of Honda’s global capacity.

The parts factory, which builds manual and automatic transmissions, offered to lift regular workers’ monthly starting salary by 366 yuan ($53.59) to 1,910 yuan ($279.6), far above the legal minimum wage is 920 yuan, Honda said.

Interns were offered an increase of 477 yuan per month, from a base ranging from 900 to 1,300 yuan per month, the intern said.

The interns are students who are required by their schools to get work experience, with internships lasting between six months to a year and a half, according to the intern.

Other foreign firms have also been raising wages following criticisms about pay and conditions.

Taiwan’s Hon Hai Precision Industry Co Ltd (2317.TW) said last week it plans to raise salaries by about a fifth at its Foxconn International (2038.HK) unit, maker of Apple Inc’s (AAPL.O) iPhone, as it struggles to stop a spate of suicides and quell public anger. [ID:nTOE64R02R]

Honda’s shares closed down 0.2 percent on Tuesday, in a broader Tokyo market .N225 down 0.6 percent. ($1=6.830 Yuan) (Reporting by Chang-Ran Kim in TOKYO; Don Durfee and Alison Leung in HONG KONG; Fang Yan in SHANGHAI, and Stefanie McIntyre; Writing by Chang-Ran Kim; Editing by Lincoln Feast and Bill Tarrant)

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Honda: China car plants seen suspended thru Thurs

June 2, 2010 By Leave a Comment

June 1 (Reuters) – Honda Motor Co (7267.T) said its four car plants in China would likely stay suspended at least through Thursday as negotiations to smooth over a labour dispute at a parts plant continue.

Stocks | Global Markets

Japan’s second-biggest automaker has decided to keep the joint venture factory operated by Dongfeng Honda suspended until June 3, a spokesman in Tokyo said. It expects the two factories run by Guangqi Honda and a separate export-only factory also to stay idle through Thursday, although a final decision was pending, he said.

Plans for June 4 and beyond will be decided on Thursday, a spokesman said.

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GM to invest $384.6 million more in Brazil factories

June 1, 2010 By Leave a Comment

(Reuters) – General Motors GM.UL will invest an additional 700 million reais ($384.62 million) to modernize and boost production at a plant in Brazil, one of the world’s largest auto markets, the company said on Monday.

The investment will be used to renew the current line of production at the Sao Caetano do Sul plant in Sao Paulo state that produces models including Classic, Corsa, and Vectra, the U.S. automaker said in a statement.

Brazil is GM’s third largest market after the United States and China. The company had sales of 206,600 cars in the first quarter of 2010, a 26 percent increase over the previous year.

Global automakers are expected to invest up to $11.2 billion in Brazil over the next two years to meet demand for vehicles in Latin America’s largest economy.

In late March, GM said it would invest 1.4 billion reais to modernize and expand its Sao Caetano do Sul and Mogi das Cruzes plants, both in Sao Paulo state.

The investment focuses on the renewal of the Chevrolet production line, including two new models to be produced for the Brazilian market and for export.

The new funds for the plant are part of a long-term strategy of investments of 5 billion reais between 2008 and 2012 to increase production capacity and renew the company’s portfolio of Chevrolet vehicles in the South American country.

Brazil is also a major market for Italy’s Fiat SpA (FIA.MI), Germany’s Volkswagen AG (VOWG.DE), and U.S.-based Ford Motor Co (F.N).

Automobile output in Brazil, the world’s fifth-biggest auto market, jumped 14.2 percent in April from a year earlier to 290,000 units as automakers pushed up production to meet a surge in demand in export and local markets.

($1=1.82 reais)

(Reporting by Luis Andres Henao; Editing by Derek Caney)

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