Auto

Peugeot China sales could outstrip France

French automaker Peugeot has said its sales in China could pass those in its home market in five years, a report said Monday, underlining the Asian nation's importance as the world's largest car market.

Peugeot, a unit of French group PSA Peugeot Citroen, is hoping to sell about 500,000 vehicles by 2015, China-based company executive Timothy Zimmerman told the Wall Street Journal in an interview.

That would exceed the company's performance in France where it posts annual sales of about 400,000 cars in 2015 or shortly thereafter, Zimmerman said.

China's auto sales for 2009 hit 13.64 million units as the nation took over the title of the world's top auto market from the United States.

In the first 11 months of 2010, total sales rose 34.1 percent on-year to a record 16.4 million units, the China Association of Automobile Manufacturers said this month. Total 2010 sales are expected to reach 18 million units.

Zimmerman said surpassing Peugeot's French sales volume in China was not a "strategic objective" but rather something the automaker "might eventually achieve as our sales in China expand".

The Peugeot executive forecast sales of about 150,000 vehicles this year, up from 112,000 in 2009. The company expects to have a total of 220 dealerships in China by year's end.

PSA Peugeot Citroen has a manufacturing joint venture with Chinese automaker Dongfeng Motor Group. It signed a separate agreement with Changan Automotive Group earlier this year to strengthen its foothold in China.

The French group is Europe's number two automaker in terms of sales behind Germany's Volkswagen. AFP

Hyundai Engineering creditors scrap deal

Creditors of South Korea's Hyundai Engineering and Construction said Monday they would scrap an agreement to sell their controlling stake in the firm to Hyundai Group for about US$ 4.8 billion.

In an acrimonious battle for control of Hyundai Engineering and Construction, Hyundai Group was in mid-November named preferred bidder for the 34.88 percent stake in the construction firm over its rival, Hyundai Motor.

It reportedly offered 5.51 trillion Won (US$ 4.9 billion) compared to cash-rich Hyundai Motor's offer of 5.1 trillion.

The creditors and Hyundai Motor have challenged Hyundai Group to prove it can finance the transaction without jeopardising the rest of its affiliates. Lead creditor Korea Exchange Bank said the creditors would now discuss whether to start negotiations with Hyundai Motor for the sale. It gave no specific timeframe for that process.

"The shareholders consider it unfortunate that Hyundai Group could not adequately dispel the market's doubts and the shareholders' concerns that were raised after it was named the preferred bidder," a statement from the creditors said. AFP

Toyota to pay US $ 32.4 m in extra fines over recalls

Toyota has agreed to pay US$ 32.4 million in fines over its handling of two auto recalls, bringing total penalties levied on the firm to 48.8 million this year, officials said Monday.

"Toyota will pay the maximum fines allowable under the law US$ 16.375 million in one case and 16.050 million in the other in response to the department's assertion that it failed to comply with the requirements of the National Traffic and Motor Vehicle Safety Act for reporting safety defects to the National Highway Traffic Safety Administration (NHTSA)," Transportation Secretary Ray LaHood said in a statement.

The two penalties come on top of Toyota's record US$ 16.4-million fine assessed in April to settle claims the automaker hid accelerator pedal defects blamed for dozens of deaths.

Toyota issued a series of mass recalls of around 10 million vehicles worldwide in late 2009 and early 2010 that undermined the company's once stellar reputation and triggered US congressional investigations.

"Safety is our top priority and we take our responsibility to protect consumers seriously. I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers' safety." said LaHood.

The US$ 16.375-million fine was tied to an investigation completed Monday over Toyota's recall of nearly five million vehicles with accelerator pedals that can become entrapped by floor mats, the Department of Transportation said. "NHTSA's investigation led the agency to believe that Toyota had not fulfilled its obligation to report a known safety defect within five days, as is required under the law," it added.

The US$ 16.05-million fine stems from an NHTSA probe into whether the automaker properly notified the agency of a safety defect in several Toyota models in 2004 and 2005 that could result in the loss of steering control. AFP

KIA recovers from crisis

South Korean car maker KIA said it has recovered from the industry 2009 slump, producing an estimated 228,000 vehicles at its Slovak plant this year.

Last year, production fell to 150,000 from 201,000 in 2008 as the global downturn curbed demand in key markets Germany, Britain and Russia, Spokesman Dusan Dvorak told AFP.

But KIA, which makes the Kia cee'd, Kia Sportage and Hyundai ix35 models at its the Slovak plant, said it expected production to rise to 240,000 next year on increasing SUV demand. The plant also produces engines for a plant run by its sister firm Hyundai in the neighbouring Czech Republic, about 60 kilometres (40 miles) from the Slovak factory.

Engine production between January and November rise by one third from the same period last year to 291,035 units.

KIA said it was building a new engine facility, expected to come on-stream in 2011 and reach its full annual production capacity of 150,000 the following year. The company will hire 100 employees next year, in addition to 2,900 people already working at the plant, Dvorak added.

Slovakia's auto industry, the driver for the former communist economy, has been recovering from the global downturn since the beginning of this year.

In October, combined car output at plants run by KIA, France's PSA Peugeot Citroen and Germany's Volkswagen grew by almost one third against the same month last year, according to Slovakia's statistics office. AFP

TD Bank to purchase of Chrysler Financial

Canada's Toronto-Dominion Bank is close to US$ 6.3 billion purchase of Chrysler Financial Corp., The Wall Street Journal reported citing "people close to the matter."

Cerberus Capital Management would retain about US$ one billion in assets as part of the deal which would help the private-equity group salvage nearly all of its US$ 7.4 billion investment in the US automaker, the Journal reported on its website. TD Bank spokesman contacted by AFP declined to comment on the report. A spokesman for Cerberus was not immediately available for comment.

Cerberus bought an 80-percent stake in Chrysler in 2007 following its failed marriage to Germany's Daimler.

The private equity group relinquished ownership of the automaker in 2009 as part of a Government-financed restructuring under bankruptcy protection which saw Italy's Fiat take control in exchange for sharing technology and its respected Chief Executive officer, Sergio Marchionne. AFP

Daimler struggles with customer demand

The Chief Executive of German luxury car maker Daimler says the company is struggling to make enough Mercedes cars to satisfy demand, causing delays for buyers, a report said.

Dieter Zetsche said the company was faced with the "luxury problem" of how to "get all the parts in time and in sufficient numbers," he said.

"Everywhere we are reaching our limits in terms of production capacity," he said according to extracts of the interview released on Saturday, adding that there could be delays of up to three months for a Mercedes-Benz Class C model. AFP