2010 Year in Review: Asia

Highlights of the year’s major events in the Asian auto industry.

• India’s Bureau of Energy Efficiency announces new-vehicle fuel-efficiency ratings in January. Ranging from one-to-five stars, the ratings, are optional for auto makers in 2010 and mandatory in 2011. However, auto makers argue the mileage-based system also should reflect a vehicle’s carbon-dioxide emissions.

• Ford in February threatens to relocate a planned $600 million Thai passenger-car manufacturing plant, to be constructed next to its existing AutoAlliance Co. Ltd. joint-venture facility with Mazda Motor Corp., due to concerns over the Rayong site’s environmental-review process.

But by June, the auto maker announces it will build the $450 million plant, with production of the new Focus to begin in 2012. The facility is said to replace an aging Ford Philippines operation.

• Indian auto makers close out their fiscal year in March with their best passenger-vehicle sales since 2004. Deliveries of 2.4 million units jump 26.9%, compared with prior-year, the largest annual increase since 29% in 2004, says the Society of Indian Automobile Manufacturers.

• The dissolution of India’s Mahindra Renault joint venture, maker of the Logan small car, is announced in March. Mahindra says it will buy Renault’s 49% share in the 3-year-old company and continue building the Logan under license through 2010, after which it will redesign and rename the car. While Renault looks to move away from low-cost cars, Mahindra believes the Logan is overpriced for the Indian market.

• Workers strike for higher wages at a Honda supplier in China. The May unrest sets off a chain of similar actions at other Chinese manufacturers. The labor action draws widespread media attention in the West, with many analysts predicting the end of low-cost production in the country.

• Ford Australia in June celebrates its 85th anniversary and its iconic Falcon’s 50 years on the market, making the car the country’s longest-running nameplate. With roughly 3.5 million units sold since 1960, the car is considered the industry’s most-successful marque. However, analysts say sales in recent years have been sliding and are poised for a near-record low in 2010.

• General Motors lays out a plan for growth in Southeast Asia, with a market-share goal of 10.4%. “We are only at the beginning of our journey to match this number, but are now laying the foundation to ultimately get our fair share,” GM Southeast Asia President Martin Apfel tells a Bangkok conference in July.

Apfel points to Thailand, Indonesia and Malaysia as regions with particular potential. Mature markets such as Japan and Singapore also are included, as well as small markets such as Guam, Vanuatu and Fiji islands; and challenging markets such as Mongolia, Pakistan and Afghanistan.

• Ford closes its sale of Volvo to China’s Zhejiang Geely Holding in August. Geely pays $1.8 billion for the Swedish brand, well under the $6.35 billion Ford paid in 1999. Geely lures Volkswagen of America CEO Stefan Jacoby to become Volvo’s new CEO.

Geely remains mum for much of the year on its plans for Volvo, but by September company-founder Li Shufu discloses a long-term goal of building three Volvo plants in China, with a total capacity of 300,000 annual units.

• Tony Devers-general manager for Suzuki Australia, raises eyebrows with his August comment that vehicle production in Australia no is longer worthwhile because of the considerable government subsidies needed to sustain the industry. “I'm all for a strong industry,” Devers tells Melbourne’s The Age newspaper. “I just don't believe we can afford to prop it up to the extent that we are.”

His remarks draw a sharp rebuke from Federal Chamber of Automotive Industry CEO Andrew McKellar, who tells Ward’s almost as many locally made cars are exported as sold domestically.

• After years of negotiations, Volkswagen settles on f DRB-Hicom as its Malaysian assembler. The German auto maker makes its decision after ending extended talks with Proton, one of two national car companies. DRB-Hicom will assemble VWs from complete-knocked-down kits at one of its plants in Pekan, where it already makes Mercedes, Suzuki and Isuzu models.

• Kia Motors Vice Chairman Chung Sung-eun resigns Sept. 3 after the auto maker recalls more than 100,000 vehicles worldwide for quality issues. Replacing Chung is Lee Hyoung-keun “Hank,” a 33-year Hyundai-Kia Automotive Group employee.

• Beijing Hyundai in October announces plans to build a third China assembly plant. The 400,000-unit facility will bring Hyundai’s total capacity in the country to 1 million units by the end of 2012.