The future of China's automobile industry is unfolding on the packed elevated highways of this nation's commercial capital, as smaller cars from newcomers are nudging aside larger old stalwarts.
Though the boxy Volkswagen Santanas that fill Shanghai's taxi fleet still outnumber the Hyundai Elantras and perky Chery QQs, it's these later, smaller arrivals that are lifting profits while others' languish.
China's car market is in a slump so far this year, with overall vehicle sales in the first quarter down 7.7 percent from a year ago as the government tightened credit policies and companies reduced purchases amid spending cutbacks.
But smaller, cheaper models are selling well, thanks largely to restrictions on lending for auto purchases, part of a nationwide credit tightening, analysts say.
The top three models sold in March were all compacts or mini-cars, according to the China Automobile Manufacturers Association: South Korean carmaker Hyundai Motor Co's Elantra, Tianjin FAW Xiali Automobile Co's (
"They have pretty suitable small cars at reasonable prices," said Yale Zhang, an auto market specialist for consulting firm CSM Asia Corp.
The slowdown has hurt several major Chinese automakers, who reported lower first-quarter earnings this past week amid price cuts and slower sales that have taken some of the gloss off the world's fastest growing car market.
State-owned FAW Car Co (
FAW is the biggest shareholder in Tianjin FAW Xiali Automobile, which reported a first-quarter net loss of 32.1 million yuan, despite the popularity of its oddly-named TJ7101U, an angular hatchback. It blamed higher costs and pricing pressures.
Chongqing Changan Automobile Co (
In results reported earlier, Brilliance China Automotive Holdings Ltd (
Early bird Volkswagen AG, which launched a joint venture with Shanghai Automotive Industry Corp (
VW's profits in China fell to US$289 million last year from euro561 million a year earlier.
For the year, sales are forecast to rise 10 percent on-year, compared with 75 percent growth in 2003 and 15 percent last year.
Beijing Hyundai Motor Co (
Geely, which makes compact hatchbacks like the Merrie and Haoqing, reported first quarter sales of about 30,000 cars, in line with plans for 24 percent sales growth this year to 120,000 units.
The company, whose shares are traded in Hong Kong, said its net profit rose by 47 percent on-year to US$10.8 million last year, helped by fast sales of its Haoqing model cars.
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to