Automotive Purchasing News Review 4 August 2014 - page 19

28 April 2014
automotive purchasing
12 November 2014
Claridges, London
VWcloses inonToyotaforglobal domination
Jul 30, 2014
Volkswagen is narrowing the gap on
Toyota Motor Corp as the global leader in
vehicle sales, with a rapid expansion drive
in China - the world's biggest auto market
- while Toyota curbs growth to focus
on shoring up quality. As Automotive
Purchasing editor Drew Hillier reports,
while Toyota has reigned at the top spot
in the auto industry for two years in a
row, announced a record first-half result,
Volkswagen is growing faster and its half-
year total could pull even with or even
surpass the Japanese auto giant.
Toyota, which counted the Hino and
Daihatsu units in the results, had 5.1 million units
delivered in the first six months of the year,
over VW AG’s 4.97 million vehicles – but the
German automaker didn’t count in its heavy-
truck divisions. Nonetheless, Volkswagen
is now within reach of its goal – a few good
years ahead of the designated internal date –
as the April-to-June quarter saw the German
carmaker deliver around 2.57 million cars
(without Man and Scania numbers), exceeding
Toyota’s 2.51 million units.
Shifting tastes
Commenting about the six-month results,
Yoshiaki Kawano, a Tokyo-based analyst
for IHS automotive, said: “The result was
surprising. The negative effect from the
rising tax rate wasn’t as big as we assumed.
Their sales should be aided by the US,
where the economy is good and consumer’s
tastes are shifting from traditional sedans to
pickup trucks and SUVs.”
IHS Automotive forecast Volkswagen's
total first-half sales at 5.07 million vehicles
including the truckmakers. The Toyota
result, which the carmaker said reflected
strong sales in the United States, China and
Europe, exceeded the IHS forecast of 4.83
million. Even if Toyota manages to retain its
crown for the first half, its position looks less
secure for the full year.
"China is the driving force of the global
market, and the degree to which a company
is focused on that region is linked to the
global sales performance," said Kawano.
Volkswagen, which sold 3.27 million
vehicles in China last year, is planning
to invest 18.2 billion euros ($24.4 billion)
between 2014 and 2018 in new plants and
products there together with its Chinese
joint venture partners.
Toyota's China presence is much smaller
with annual sales of 1 million vehicles, and
while it plans eventually to double that it has
given no time frame. Toyota has put a freeze
on the building of new plants until about 2016
and President Akio Toyoda has stressed that
the company is focused on building better
cars rather than chasing sales volume.
Despite VW's expansion, profitability
remains an issue, with its namesake brand's
2013 profit margin at 2.9 percent while
Toyota's auto division achieved 8.8 percent
and Hyundai Motor Co stood at 9 percent.
Much of VW's production is in its home
market of Germany, where workers secured
a significant pay increase last year.
Chrysler in the frame for ignition switch
Jul 29, 2014
MLG Automotive Law – a US-based cutting-
edge litigation firm which represents the
legal interests of businesses and individuals
in the automotive industry – has filed a
lawsuit against Chrysler Group for defective
ignition switches in Jeep Grand Cherokee
and Commander vehicles. For Automotive
Purchasing, Alex Kreetzer reports.
According to US District Court, Central
District of California records, the lawsuit
entitled Latoya Lumpkin v. Chrysler Group
LLC was filed on July 28, 2014, after Chrysler
had previously (July 22) admitted to receiving
over 100 complaints that the ignition switches
found in their vehicles were unexpectedly
shutting down; this meant that drivers were left
stranded, along without power steering, power
brakes and airbags. Chrysler has indicated that
they will be recalling 792,000 vehicles – the
2005-07 Jeep Cherokees and 2006-07 Jeep
Due to National Highway traffic Safety
Administration regulations, Chrysler (like any
other manufacturer) would have had to report
a safety defect within five days, or receive a
fine of up to $35 million. Despite this, Chrysler
Group did not own-up till years after the first
issues – it is unknown of the number of
injuries and fatalities due to the defect.
"No one should be surprised"
Chrysler joined American car-giants
General Motors who have been hit hard in
their on-going law suit with their ignition
switches. Allegedly, GMhad known about the
defect for years but failed to inform officials,
which resulted in a number of fatalities.
"No one should be surprised," said
Jonathan Michaels, founding member of
MLG Automotive Law. "These manufacturers
have no interest in protecting the public,
or doing what is morally right. They are
unconcerned that people will die and
families will be crushed. They only care
about financial gain. We saw it with GM, and
we are now seeing it with Chrysler."
The class action lawsuit is designed to help
customers’ with their vehicle defects, through
repairs and diminished value. MLG Automotive
Law says it will also force Chrysler to notify its
that they should not drive any of these vehicles
until they are fully checked over and repaired.
Wrongful death
MLG Automotive Law are not shy of lawsuits
in the automotive industry, filing cases against
a long list of top OEMs, such as General
Motors, Nissan, Honda, AM General, Isuzu,
Toyota, Fisker, Mercedes, Kia, Chrysler, Land
Rover and Ford. This year, MLG Automotive
Law filed a wrongful death lawsuit against
GM for also concealing their ignition switch
defects, resulting in a number of the deaths –
including that of 20-year old Ben Hair.
In April 2014, GM chief executive Mary Barra
was held to testify, where it was uncovered
that GM had known of the ignition switch
failures since 2001; concealing the problems
for 13 years and did not install a new version of
the unit as it would cost $0.57 more per part.
What made matters worse is that once the Hair
family were informed by GM that the Pontiac
G5 their son was driving had issues with the
power steering, the American automakers
actually denied the claim after meeting with
their engineers and refused to show the
results to the family.
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