CONVERSA DE PISTA

Mercedes continua mostrando o caminho

Felipe Nasr é confirmado como piloto-reserva da Williams e a F-1 abre espaço para as mulheres

Nico Rosberg e seu Mercedes na pista do Bahrein (Foto Mercedes-Benz Media)

Magnussen: novamente mais rápido que Button (Foto McLaren Media Centre)

Terminada a segunda sessão de treinos de pré-temporada da F-1, os motores Mercedes continuam mostrando superioridade frente aos rivais Ferrari e Renault tanto em desempenho quanto em confiabilidade. Dos 24 pilotos que foram à pista do Bahrein, os motores alemães impulsionaram sete dos dez mais rápidos, incluindo Felipe Massa (oitavo) e a dupla da equipe de fábrica, com Nico Rosberg liderando Lewis Hamilton. Esta semana a categoria realiza a sua terceira e última fase de avaliações, entre os dias 27 de fevereiro e 2 de março, antes do início do campeonato, em 16 de março, na Austrália. Mais do que experimentar novas soluções de aerodinâmica e suspensão, esses testes vão definir a especificação dos motores para a toda a temporada, parâmetro que deve ser apresentado à Federação Internacional do Automóvel (FIA) até o último dia deste mês.

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Europe's Troubles: BMW postscript

...my quick analysis suggests no European OEM will weather the coming storm without taking on a fearful amount of water...

According to an August 16^th Bloomberg post on BMW, discounting is rampant in the German market, while sales are not responding. (According to a friend who has worked in Europe, this phenomenon of phantom sales goes back decades, rediscovered in each recession given that the careers of analysts and reporters of the industry seldom span multiple downturns.) Now I visited BMW's plant in Spartanburg, South Carolina in January 2012; it was running flat out and adding capacity, because the models produced there are global hits, with the majority of output exported. My back-of-the-envelope calculations suggest that plant is about 1/5^th of BMW's global output, given capacity additions in China.

Of course a big slice of those exports go to Europe, which is in recession; overall the region accounts for 30% of BMW's sales. The elimination of the "block exemption" in late 2003 removed restrictions that limited the ability of dealerships to sell cross-border; German stores now compete with those in Italy. As long as the euro lasts, troubles in one large market now spill over to the rest of Europe. [And if the euro doesn't last ... but that's my premise.] Meanwhile growth has slowed in the BRICs, which account for 25% of sales.

So while the European near-luxury makers are more diversified than Peugeot, Renault or Fiat, they too remain vulnerable.

And then there's the massive VW empire, 10 brands including a full range of trucks, and a solid sales base in most markets except the US and Japan -- and it is now targeting the US aggressively. However, with a market share of just over 4%, its footprint simply isn't large enough to generate sufficient profits to offset weaknesses elsewhere (and with a new plant, depreciation looms large, good for cashflow but not the bottom line). To analyze how the firm will weather the looming European meltdown would require piecing together these operations. Analysis is further hampered by the lack of geographic data in the stock analyst reports I've scanned. They may be the best immunized -- but I can't make a case one way or the other.

...Mike Smitka...

Addendum: Pending blog post I spent over an hour discussing the European industry with a retired senior Detroit 3 executive whose career included multiple postings to Europe. He helped point out variations across firms and markets, a level of detail beyond my experience or ability to quickly [this is a blog!] research. More once I hit a comfortable rhythm with my teaching overload this fall, and add nuance to my analysis of Europe.

Reverse Import Deja Vu?

...a strong yen should boost exports to Japan...

In 1992 I wrote a paper about Japanese car imports, later picked up by the Economist, in Japanese by Toyo Keizai (東洋経済) and by the MIT International Motor Vehicle Program about the growth of Japanese car imports. Ah, but what news was in that? Well, I was writing about "reverse" imports by Japanese of their cars from the US to Japan, alongside the sales of German firms, the only foreign companies to set up proper dealership networks and import processing infrastructure. The recent strength of the yen against the US dollar and particularly against the Euro, made me wonder if we will see a return to that era.

A headline in the May 24th Sankei Shinbun web site thus caught my eye: Mercedes-Benz will sell the "Smart for Two" for ¥1.59 million (US$19,992; €15,950), about a 14% reduction in price. Other forthcoming models of M-B and BMW will likewise carry lower sticker prices or add a lot of options without raising the price. Now the article doesn't make it clear whether the base is appropriate -- it uses year-on-year comparisons, and in general spring 2011 was not a normal time. Still, it cites rises of 37% for M-B and 27% for BMW.

I've only glanced quickly through recent data: given the volatility of the global economy in general, and the post-3/11 economy of Japan in particular, I was expecting to find the data too noisy to interpret. That's not the case.

First, overall imports are at the highest level in the years for which I have (FY1999 to present), even though at 4.0 million cars FY2011 sales are 10% below their mid-2000s level (and 20% below the 5.1 million unit sales peak at the top of Japan's bubble in 1990).

Second, while the German firms are doing OK, both BMW and Mercedes are down from 2007 and the onset of the global recession; only VW and Audi show signs of a sustained increase. What really is driving the increase is Nissan, which now accounts for about 17% of imports or 50,000 units. This is surely consequent to their moving the production of certain vehicles (such as the March) entirely out of Japan.

Still, total imports of 295,000 units remain rather short of the 393,000 level of 1996. While the Japanese media may be full of hand-wringing about the impact of the yen, the evidence so far is modest, when looked at through the lens of vehicle imports. Realistically, it's probably too soon to tell; vehicle sales strategies are penciled in a couple years in advance. We aren't seeing "reverse imports" of Japanese-brand cars from the US -- yet. So from that perspective we're also not back in 1996, when 85,000 Toyotas and Hondas went westward across the Pacific. But it is worth watching.

Source: 「１５９万円のベンツ 円高追い風、価格抑え輸入車加速」 which freely translated says "Fanned on by the strong yen, a Benz at ¥1.59 million will accelerate imports." From sankei.jp.msn.com of 25 May 2012.

...Mike Smitka...