Archives – April 18, 2014

General Motors’ Investment in the Manufacture of Plants for Hybrid Cars

cadillac elrGeneral Motors gave an official statement this past week confirming its plan to manufacture plants for hybrid cars. The automaker will invest $450 million dollars in establishing two plants for the cars in Michigan. The first plant is the Hamtramck plant, which will specialize in car assembly. The second plant is the Township factory, which will focus in the production of batteries for hybrid cars manufactured by General Motors. As expected, the investment is likely to increase the employee headcount of GM by about 1,400. The investment will also result in key modifications of two hybrid cars of GM, the Cadillac ELR and the 2016 Chevrolet Volt.

Although the unit price of Volt was reduced in March by $5,000, there was no significant change in unit sales. In the 2014 first quarter, only 3,606 car models were sold by GM. This was a fifteen percent decrease from the previous years. The same issues were encountered by the Cadillac ELR. For instance, there was a recall of 656 units of the 2014 model requiring a need to repair the electric system. It is expected that Volt’s new model will have a battery that is not only more powerful, but that will run for longer before it needs to convert to fluid fuel. The current Volt model has battery packs that provide a battery power worth 40 miles.

GM’s intention to invest in affordable electric vehicles has a high likelihood of stirring immense competition with its competitors. For example, Tesla Motors Inc. has plans of revising its electric car prices in the coming years. The revision will begin with the company’s E car that will be sold for at least $35,000. This means that GM’s plans will create stiff competition between the two companies in the near future.

Based on the current state and times, it would be fundamental for GM to be ahead of other competitors, especially the hybrid car makers. The competitors in question include Toyota Prius. It is reported that 11% of Toyota Motor Company revenue in financial year 2013, was accounted for by the Toyota Prius sales. Through that fiscal year, more than 230,000 car units were sold. Toyota has announced of its plans to further modify the design of its Prius. This means that its sales are more likely to increase in the coming years. Analysts have asserted that the investment by GM to revive its hybrid vehicles could play a key role in increasing the company’s competitive edge.


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Plug-In Hybrid for Chinese Market Launched by Audi and FAW Group Partnership

The latest foreign auto maker whose aim is to assist China in achieving its clean-car ambitions is the Audi AG. This is following an announcement that the car maker had plans of building plug-in hybrid car in collaboration with its neighboring partner. A unit of Volkswagen AG, the German luxury car maker claimed that it would begin the production of a China-based plug in sedan. The car maker would work in collaboration with FAW Group, its Chinese partner. The new hybrid car model will be referred to as Audi A6 e-tron, whose basis will be the Audi A6 sedan’s long-wheel version.

China has, for a long time, pushed for pure electric cars as a means for the country to achieve its auto industry’s long-term vision. The country views electric cars as attractive and beneficial because they can play a major role in addressing environmental issues. Additionally, electric cars can help in reducing the extent at which the nation depends on imported gasoline.

Pure electric cars have been promoted by Chinese auto companies such as SAIC Motor Company and BYD Company. In recent months, a marketing drive in China was launched by a United States car maker, Tesla Motors Inc. in China. A major setback that has been reported by industry observers and auto makers is lack of essential charging infrastructure. For this reason, it has been challenging to attain large-scale electric car sales.

Several auto makers are of a different opinion or stance, in that, they are laying emphasis on plug-in hybrids. They are advocating for vehicles that allow users to plug into electric outlets. Such vehicles can operate on either electricity or gasoline. Plug-in hybrids slightly differ from complete hybrids. The most popular model is the Toyota Prius, which has batteries to support traditional engines.

According to the managing director of consulting firm Automotive Foresight, Yale Zhang, the popularity of plug-in hybrids is still low in China’s car market. Approximately 11, 410 electric and 1,500 plug-in hybrid cars were sold in China in 2013. The plans to roll out more models have been announced by other companies including Volkswagen. In November, Volkswagen made clear its intentions to launch 15 electric and plug-in hybrid car models by the year 2018 in China. The government of China hopes to have at least five hundred thousand electric and plug-in hybrid cars by next year on its road. The country aims at having five million of such car models by the year 2020.


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