Outside of a Terry Gilliam film, where else can you see a used car blessing ceremony, a city of one million people with 535 different public bus routes, roadblocks set up by car mechanics, and kids dressed in zebra suits patrolling crosswalks? Bolivia, that's where. The South American nation, attempting to halt an explosion of automobile buying that's clogging their limited road network, has banned importing used cars more than five years old. The president of Bolivia issued the ban to halt the tide of right-hand-drive cars coming in from Japan. The cars are more reliable than what was on offer before, and so cheap that Bolivians have been buying them up, painting "Taxi" on the sides, only to sit on traffic-choked roads. Shutting down the import trade brings Bolivia more in line with its South American neighbors, and it could open the roads up a bit as well and curb air pollution issues. The mechanics who convert right-hand drive cars to left-hand drive have protested and blocked roads, arm-in-arm with the used car dealers who sell them.
Bolivians who wanted the used cars are losing out twice: Used cars less than five years old usually don't make it to Bolivia, and they will be denied "the road trip to bless a new used car at a popular Catholic shrine on Lake Titicaca -- where proud owners splash their new wheels with beer and tape flowers to the side mirrors -- has become a regular rite of passage." Oh, and the kids dressed up as zebras? They get paid by the city to to scold drivers that block crosswalks. It's probably not a bad gig unless you get run over on your first day and spend three days in hospital like one zebra in La Paz. Ah, Bolivia...
According to a report by Reuters, the Chinese government has suspended the importation of Hyundai and Kia products from South Korea. The importation ban allegedly stems from complaints filed by dealers that the automaker violated anti-trust laws in China by throwing more support behind its own dealers and thus limiting the support offered to independent retailers. A Hyundai spokesperson confirmed that the automaker has not received import permits since mid-September, but that the Chinese government and Hyundai are working to resolve the matter. While any ban imposed on Hyundai would temporarily hurt the company in China, only about 50,000 units are imported from South Korea each year, with the majority of Hyundai and Kia's combined 520,000 annual sales in China coming from vehicles produced locally in a joint venture between the automaker and Chinese companies.
American automotive companies have been doing rather well for themselves these last few years in China. Still, the majority of manufacturing those vehicles is done in China using locally sourced parts. For this reason, the Chinese government has been facing pressure to ink more deals with American companies for the export of goods there, which is apparently now beginning to take place. Ford, for instance, has announced that it will be sending 30,000 complete vehicles (no word on which ones) to China along with other various auto parts. General Motors has also signed on with about $1 billion in vehicles and parts for export to China. Chrysler too will get in on the trading, though its deals will likely be smaller than either Ford's or General Motors'. All in all, the automotive sector will make up about $2 billion of the recently announced deals, which total more than $8.3 billion in exports. And we're pretty sure they're all lead-free.
The Malaysian government has decided to end its protection of Malaysia's Proton Motors. In addition to the import duties and taxes levied against foreign carmakers, Proton was also the recipient of tax breaks and "other government incentives."
The decision could be seen as a blow to Proton, but Malaysian Prime Minister Abdullah Ahmad Badawi is confident that the carmaker can and is turning itself around. Even though it has lost half of its market share while it was being protected by the government, Badawi said recently "No question of a bailing out. Proton is doing well today... they have a good program, they have secured exports to India, China, Indonesia and the Middle East."
For it's part, Proton's efforts to link up with a foreign car company didn't end well last year. For the moment, it has proposed that the government take an official stake in the company.
While Canadians are hopping mad over the inequitable price of cars in their home state compared to the U.S., people in Afghanistan are happy to pick up our northern neighbor's leftovers. Apparently, the first cars to arrive in Afghanistan after the fall of the Taliban were from Canada, so now Volkswagens, Fords and Toyotas are all considered Canadian cars to the Afghan residents of Kabul. These Canadian automotive exports are so famous in the former Taliban stronghold that driving a "Canadian" Honda Accord or Ford Taurus is a status symbol. Canada isn't exporting its high-priced new cars to the front lines of the war on terror, but rather its not-so-gently-used vehicles that have been in an accident or sat on the dealer lot too long.
We wonder if the Afghans will give Canada credit for starting Rock & Roll and inventing the Salad Shooter next. Besides the many vehicles Canada knowingly ships to the Middle-East, the land of the Maple Leaf also loses 30,000 vehicles every year to thieves that swipe the cars and ship them overseas, many of which are sold in Afghanistan to up-and-coming status seekers.
"Do you need the Polo?" That's going to be Volkswagen chief Martin Winterkorn's query to US dealers when he meets with them this week. The answer could determine whether or not we see a sub-Golf sized VeeDub here in the United States. Rising fuel prices have made small cars big again, and VW's taking a hard look at capitalizing on that. The inrush of Volkswagen's competitors to smaller models also makes the segment hard to ignore. BMW's got the hotly anticipated 1-series, Daimler's trend-tastic Smart has been foisted upon us, Saturn's slick Astra is nearly here, and Ford's threatening to give us the Fiesta in a couple of years, too. If we were a VW dealer, our answer to Winterkorn would be a resounding "YES!"
