Car Industry Picking Up Around The World

  There's a sudden bloom in the car industry around the world, so much so that you'd be mistaken for wondering if the good times were back.Sales are up, with or without Government help, some battered names like Ford are doing better, as is the sluggish Japanese giant, Toyota.Even General Motors, the reborn US mini-giant, has found the courage to call off the sale of its Opel operation in Germany, and other plants in the UK, Spain and Belgium.It now sees that it can get more from continuing to own Opel than sell it off, which has upset the German Government, plus the Russians who were to partner Magna, the Canadian buyer.Car sales in some of the world's major & #160;car economies; the US, Japan, Germany, Italy, South Korea did much better last month.But China has been the star with car sales up over 70% so far this year (over 80% in some months), over 11 million units sold in unofficial figures for the first 10 months, and single-handedly helping some big companies, like Nissan, Toyota, GM and others to report better than expected upturns in September quarter and half financial results.And this upturn in China (which will naturally slow as 2010 goes on) has seen & #160;big Japanese manufacturers upgrade their outlooks from what were quite depressed levels a quarter ago.Late yesterday Toyota surprised with a September quarter profit and a smaller loss estimate for 2009-10.Toyota now expects & #160;a net loss of 200 billion yen ( & #36;US2.2 billion) for & #160;the year to March 31, compared with an earlier forecast of a loss of & #160;450 billion yen loss.It posted & #160; an unexpected second-quarter profit of 21.8 billion yen.For that Toyota can thank the stimulus spending programs in China, Japan and the US.The US was mixed, but sales were mostly higher than in September, with Ford actually boosting its sales above those in October, 2008.As expected Australian car sales rose last month on & #160;the same month of the previous year, the first time that has happened in 16 months.Figures yesterday from the Federated Chamber of Automotive Industries & #160;were the most encouraging since June, 2008, and confirm that thanks to the tax benefits in the Federal stimulus package, car sales will finish & #160;2009 above the levels of a year ago.The falls in November and December of 2008 will help ensure that happens, but it will be a far better way to & #160;end 2009 than & #160;it started with falls of 20% or more in the first few months.New car sales were up 2% in October as & #160;strong sales of small cars, sports cars and luxury four-wheel-drives drove the market higher last month.The Chamber's CEO, & #160;Andrew McKellar, said the October sales figures reflected a car market - and a wider economy - in recovery. & quot;It is certainly a positive indication that the industry is now in recovery mode. It's very encouraging, & quot; he said. & quot;We would expect to see further growth over the next couple of months as business buyers take advantage of the last couple of months of the tax breaks, & quot; he said.But there was a catch in the comparison: October this year was compared with a very weak October 2008 when car sales fell 11% from September as the & #160;slump accelerated.Both Ford and Toyota recorded increases in sales of their locally-built vehicles, which is good news because both have struggled this year.Relatively stable fuel prices have sparked a revival in four-wheel-drive sales, which jumped by almost 10% against the 2% rise in the overall market in the month.In an analysis, Fusion Strategy of Sydney said the October figure continued the & quot;quite positive trend since July. & quot;And even though October 2008 was weak October & #160;was & quot;growth month regardless, and in all but Heavy & #160;Vehicles. & quot; & quot;Compared to September the trend is a near 6 point improvement, so if anything, picking up pace; SUVs were & #160;the strongest major sector up nearly 10%, & quot; Fusion said in a research note.Year-to-date 762,787 new vehicles have been sold, down 11.7% compared to the same period last year and almost half the rate in the first four or five months of the year.In Japan & #160;Nissan & #160;moved back & #160;into the black in the September & #160;quarter and forecast a smaller yearly loss thanks to the better than expected sales in China.Honda, Suzuki & #160;and Subaru's maker, Fuji Heavy Industries, & #160;have also upgraded their outlooks. & #160;Toyota's upgrade was also a surprise and perhaps a sign that the world's biggest car maker is over the worst.But the results confirm & #160;the growing importance of emerging markets like China, where massive government stimulus measures have lifted & #160;demand.But there is a downside.As good as the lift in sales has been in many markets (including Australia) it's the makers of small cars that have been really benefitting, especially in Europe and in the US.These are fuel efficient vehicles and US buyers in particular has sought out these smaller cars (especially the Toyota Corolla, the Honda range and the Ford Focus).(And that's a good thing).Companies without small, fuel efficient (and relatively cheap) models have been hit, such as BMW, the big German luxury maker.BMW saw a 9% fall in its deliveries in the September quarter, despite the solid increases in car sales in Germany (up 24% in October) and France, up 20% as well (two of its biggest markets).The downturn in Russia and the US isn't helping either. & #160;But come 2010 when the bloom wears off car sales and buyers seem exhausted, will the rebound (which hopefully becomes a recovery) see a rise in demand for cars like BMWs and Mercedes, which send a message, & quot;I survived. & quot; & #160;  

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