AUTO MOBILE

The Japanese automaker had high hopes for the retooled Insight. Instead, all it has delivered is a flurry of bad reviews and four months of dismal sales.
Throughout the country, Americans bought 2,079 Insights in June, bringing total sales of the streamlined hatchback since March to 7,524, according to Autodata Corp. At that rate, Honda will sell less than a third of its goal of 90,000 in the first 12 months.

By comparison, the higher-priced Prius was snapped up by 12,998 drivers last month. Since March, Toyota has sold 40,398 of the gas-sippers.

The poor sales figures are all the more humbling because Honda was the first automaker to bring hybrids to the U.S. a decade ago, with an earlier version of the Insight. Yet although Honda products almost always score well with consumers and car enthusiasts, it just can't seem to get green right.

Weak sales forced the Japanese automaker to abandon an earlier two-seat Insight. Its powerful six-cylinder Accord hybrid had unimpressive gas mileage and was killed after three years. Combined, the two vehicles mustered scarcely 45,000 deliveries worldwide.

Meanwhile, the hybrid version of its popular Civic sedan, which Honda says it originally introduced to battle the Prius, has logged just a fifth as many sales as its rival.

"Honda just hasn't had a cogent hybrid strategy at all," said Eric Noble, president of Car Lab, a product planning and research firm.

Noble isn't sure why Honda has stumbled, but what is clear is that other automakers are gaining ever-larger footholds in the hybrid market. Ford Motor Co. is making huge strides thanks to its highly regarded new Fusion hybrid, which, despite a price tag nearly $10,000 more than the Insight's, had June sales on par with the Honda offering. General Motors Co. and Nissan Motor Co. both offer hybrids. Germany's Daimler, maker of Mercedes-Benz, and even South Korea's Hyundai Motor Co. are preparing to enter the hybrid race.

Toyota remains the king, with a fleet of six hybrids including Lexus models, and the hybrid-only Lexus HS sedan on the way. Honda's next hybrid offering, meanwhile, is a head scratcher: the CR-Z, a two-seat sports coupe aimed at one of the smallest-volume segments of the market.

Honda contends that it never intended for the Insight to compete with the Prius, which has logged more than 1.25 million sales worldwide since it first went on sale in Japan in 1997.

Instead, spokesman Chris Martin said, Honda specifically targeted the Insight at a lower price point -- it starts at $19,800 compared with $22,000 for the Prius -- in hopes of winning over a new segment of penny-pinching would-be hybrid buyers.

Honda's annual sales expectations of 90,000 units are half those of Toyota's for the Prius. But with gasoline prices low right now, Martin said that price-conscious buyers are waiting on the sidelines.

"Insight is the value hybrid, whereas the Prius is designed to be more whiz-bang," he said.

Martin contends that the two cars have little in common, and Consumer Reports appears to agree. It rated the Insight second to last among small hatchbacks in its August issue, behind the Chrysler PT Cruiser and the Scion Xd. The magazine critiqued the Insight's handling, lack of interior room and cargo space, calling it a "noisy car with a stiff ride and clumsy handling." The Prius, meanwhile, ranked third.

And while the Insight gets a respectable 41 mpg, the new Prius reaches 50 mpg -- thanks in part to its more advanced hybrid technology. The Prius has a powerful electric motor that by itself can propel the car at speeds of up to 34 mph. The Honda, on the other hand, uses the electric motor as an assist; its gas engine is always running when the car is in motion. The Prius also has more horsepower, seating room and trunk space, plus snazzy features like a solar-powered sunroof.

"Honda has learned from its mistakes in the hybrid market, but maybe it's learned the wrong lessons," said Jake Fisher, senior engineer at Consumer Union, which publishes Consumer Reports.

Last year was tough for global car manufacturers because of high oil prices and the economic turmoil. The road was still patchy for the auto sector in the first half of this year but there is light at the end of the tunnel in the mainland market.

Vehicle sales in China reached an all- time high last month as government incentives helped fuel demand. The China Association of Automobile Manufacturers said sales in June surged to 1.4 million units.

A number of incentives boosted the car sector. These included a tax cut for cars with an engine capacity of less than 1.6 liters and a rebate of up to 6,000 yuan (HK$6,806) for buying certain commercial vehicles.

Beijing is subsidizing farmers who buy environmentally friendly commercial vehicles.

Auto companies listed in Hong Kong have different niches. For example, Dongfeng (0489), through its joint ventures with Peugeot, Nissan and Honda focuses on sedans while Great Wall Motor (2333) has been moving into special utility vehicles and pick- up cars. Pick-ups are very popular in the countryside because of energy- efficiency and cost.

Geely Auto (0175) also produces such vehicles which sell from 80,000 yuan to 100,000 yuan. Great Wall's pick-ups sell for 55,000 yuan each.

Great Wall is the top brand in terms of sales volume and it has a 35 percent share of the pick-up market. Geely Auto has cornered 17 percent of the market.

The low-cost pick-up has become an income driver for Great Wall, which will benefit great

ly as farmers buy the vehicles in the wake of Beijing's incentive policy.

The new rural subsidies were announced in early June. Farmers purchasing a new light truck or a minivan can get a subsidy equivalent to 10 percent of the price, up to a maximum of 5,000 yuan.

I am not sure if Geely's pick-ups will be able to make further inroads in the market but one certainty is that Great Wall has successfully built a strong sales network with more than 1,000 outlets covering both urban and rural areas.

Comparatively speaking, Geely's pick-ups were developed recently and its sales network has just begun to develop. So I believe that Great Wall will be among the main beneficiaries of the recent auto incentives.

On the other hand, Geely has grabbed the opportunity in the midst of the financial crisis to acquire a great deal of steel to make vehicles.

It has been able to grant discounts to compete with other auto giants because of its storage of low-cost steel.

As for commercial vehicles, Geely produced 100p light trucks of Euro III emission standards in April at 86,000 yuan, which is 25 percent lower than the earlier Euro II emission light truck.

The competitive price proved to be effective as monthly sales rose 32 percent in April to 3,593 units, and 15 percent to 12,475 units in the first four months of this year.

This type of light truck used to be priced at over 100,000 yuan. Qingling (1122) sold 18,146 light trucks, a decrease of 10.5 percent year on year.

Sales revenue of light trucks recorded a 7.6 percent year on year drop.

With a price war on, I believe that other core market players like Dongfeng will begin to follow the price pattern.

Consumers will, of course, benefit from the discounts but I am sure that manufacturers' net profit margin will be squeezed to a new low.

I trust that keen competition in commercial vehicles is a major risk for investors buying auto stocks.

Apart from producing commercial cars, Dongfeng also successfully launched a wide range of new models in 2008 and 2009.

Last year, Dongfeng's revenue rose 19 percent year on year to 70.56 billion yuan. Its reported net profit increased slightly by 7.2 percent to 4.04 billion yuan.

Dongfeng's Nissan brand has grabbed a 5 percent share of the passenger car market and it is among the top five in terms of car sales in China.

It means that Dongfeng has consolidated its existing brand in the auto market but diversification of models can drive growth.

Dongfeng's Peugeot and Honda models, which will be launched in 2010, are expected to help the mainland firm grow.

If you prefer to buy a stock in this sector, I would think Dongfeng is a primary choice. With a price-earnings ratio of 15 times, I think it is still a good and stable pick.

If you put your faith in rural growth, then I trust that Great Wall will be your choice. With a price-earnings ratio of 14 times, I consider it slightly undervalued

Toray Industries Inc announced that it has started full-fledged mass production of its environment-friendly fiber materials based on polylactic acid (hereinafter referred to as “PLA”) and plant-derived polyesters for automobile applications. Toray has already been supplying the materials for the trunk and floor carpeting to Toyota Motor Corp. in its latest hybrid model of Lexus, the HS 250h, launched on July 14th this year.

At the same time, Toray is promoting the products to other automakers. Toray aims to have annual sales of 200 tons for the first year for products including ceiling upholstery and door trim materials, and expects them to grow to 5,000 tons per year by 2015.

Materials to be used in different automobile interior parts have to clear tough and varied physical property requirements. Generally, environment-friendly materials such as PLA used to be believed to lack in heat and wear resistance properties in comparison to regular polyester. Though various efforts were being made to address those weaknesses, the adoption of such materials in automobile applications had so far been limited to a few models due to a number of shortcomings.

This time Toray developed various technologies for compounding environment-friendly materials with petroleum-based products, including a proprietary hydrolysis control technology to modify polymer and techniques for compounding using polymer alloys and in the process of fiber spinning as well as mixed fiber compounding during higher processing. By making full use of these technologies, Toray succeeded in achieving the significantly high levels of durability sought by automobile interior applications, enabling actual adoption by mass-produced vehicles.

Having cleared the tough physical property benchmarks for automobile interiors, Toray will focus on further development of materials with higher plant-derived biomass percentage and expand the materials’ applications into wide-ranging applications such as general apparel and industrial materials.

In this age of growing importance for environment-consciousness, automobile manufacturers are striving to develop advanced technologies and aiming for a motorized society that can co-exist with the environment. The companies are actively considering a shift from the existing petroleum-based materials to products made from plant-derived materials for interior components which make up about 5 to 10% of a vehicle’s body weight. The use of plant-derived materials is expected to explode in the future, given the fact that it has low CO2 emissions in its lifecycle from production to disposal and it helps in curbing the use of the limited fossil fuel resources.

Under its Innovation by Chemistry slogan, Toray is actively pursuing the development of environment-friendly products and aims to contribute to the development of a sustainable, recycling-oriented society through its sales of environment-friendly automobile parts

Last week, Nokia announced a long-term relationship with Santa Clara, Calif.-based Intel to establish a new class of mobile computing devices. Could the Finnish OEM finally be warming up to U.S. shores?

Nokia for a long time has enjoyed a fantastic market share lead in the global handset arena, but its North American share has been dismal, at best. The company frequently has been criticized for what some see as an indifference to the North American market, particularly in the United States, often bringing its high-end devices to the United States sans subsidy or months after a global launch.

says Mark Louison, Nokia's head of North American operations, but adds that incompatible CDMA and GSM technologies in the United States have presented a challenge for Nokia’s business model. "Each of the major operators [in the United States] have unique technology road maps and to be successful, we need to align our approach to the market with theirs. In other parts of the world, a one-size-fits-all approach has worked very well,” he says.

Avi Greengart, research director for consumer devices at Current Analysis, echoes those sentiments. “Traditionally, [Nokia] tries to build one thing and sell as many as they can. They’ve sold tens of millions of the 1100 series, if not hundreds of millions. They have a massive supply chain that allows them to go head to head, even with Chinese companies, and win,” Greengart says.

But Louison notes that establishing a base camp on U.S. shores is already having a positive effect on Nokia’s ability to focus its resources on developing products specifically for the North American market. “Something new in our strategy is that you'll see products that are announced here first and built and launched here and go to market globally later,” Louison says, citing R&D and manufacturing facilities in Los Angeles and San Diego.

The Intrigue 7205 is one device that Louison notes as an example of a recent Nokia feature phone that was built first and foremost for Verizon Wireless at one of those facilities, adding that there will be more of that kind of cooperation with carriers in the future.

Greengart rejects the strategy of Nokia bringing more feature phones to the North American market, citing the reinforcement of a persistent stereotype. “In the U.S., a lot of consumers think that Nokia is a Japanese company that makes boring bar phones. [Nokia] isn’t doing themselves any favors by bringing exactly that to the U.S. market."

Stereotypes aside, Nokia’s technology is rarely viewed as anything but top-notch. However, the company, focused as it has been on feature phones and emerging markets, has taken some flack for being slow to react to the latest trends. Greengart notes Nokia’s slow reaction to the “RAZR threat” and implementation of touchscreen devices in the wake of the iPhone’s success.

“Nokia has been focusing on the existing S60 and adding touch to it and adding services to it, but their products don't necessarily meet the expectations that consumers have in an iPhone and Palm Pre world,” Greengart says.

“Tired Notion” About U.S.
While Greengart concedes that Nokia is doing just fine selling its devices to the rest of the world, he says the U.S. market is an incredibly important one for any OEM that wants to be seen as innovative. “The tired notion is that the U.S. is behind everyone else. You’ve heard it all before. The trends start in Asia, move to Europe and 18 months later, it comes to the United States. But that certainly has not been true in the last five years.”

Greengart notes that Motorola changed the face of the industry with the RAZR. “The whole fashion and thin trend started in the U.S. One-hundred million RAZRs sold can't be wrong. That was a huge trend that still drives phone design today. You just kind of expect your phone to be relatively thin and to look like a designer actually spent some time with it.”

He points to e-mail phones, which started in Canada with Research In Motion’s BlackBerry, and then, of course, the iPhone, which has revolutionized mobile Web browsing, not to mention application usage and mandatory data plans.

Nokia has released the final version of the N97 SDK. With what’s effectively the first device-specific SDK, the Finnish giant wants to emphasize its commitment towards its this year’s flagship device.

Among the new things the final SDK version brings are improved support of home screen features, updated SDK documentation, support for the Chinese keyboard, updated example applications and default emulator theme. In addition, the SDK provides developers with device specific APIs such as that one for accessing the compass feature. Finally, we’re reading that all known bugs have been fixed… You can download the Nokia N97 SDK from

t is testing a new mobile TV site to build on iPlayer success

The BBC is testing a new mobile TV site, as it announced mobile as its ‘fastest growing channel’.

The BBC has plans for a strong surge in its output on mobile phones following the success of the iPlayer on mobile devices.

The test service, Live TV, allows its content to be used on a mobile phone through a Wi-Fi connection. It can be accessed on handsets including the T-Mobile G1 and some Nokia Nseries devices and it will be available on more handsets in the coming months.

BBC controller of future media and technology Erik Huggers said that mobile is ‘a big part of our plans’. He added: ‘The BBC iPlayer has made our great content available through a wide range of devices. This has helped BBC mobile to become our fastest growing service.’

The BBC has appointed its former chief technology officer for on-demand TV service Project Kangaroo, Mark Kortekaas, as its new controller for audio and music, interactive and BBC mobile. He will replace Richard Titus, who has left to become CEO of the publishing arm of Associated Newspapers, Associated Northcliffe Digital. He will take on the role this week (14 April).