Monday, August 15, 2016

Amsia Brazil & United States project mandates, and Valor Economica!


















After several formal video conferences with the State Government of Minas Gerais, and a formal invitation from Sete Lagoas Mayor Marcio Reinaldo, Amsia Motors was invited to conclude and sign a formal agreement for an automotive plant. On Dec. 18th, 2015, not only a car assembly plant but an Agro, power generators, and electronics plant have been signed for investments of over one billion US dollars. Amsia Motors Americas, LLC, an American company whose main Automotive Corporate Head office is located in Shenzhen, China, now confirms its strong commitment in executing this substantial project in the Brazilian market. The project has been in the works since Dec. 2015 with the State Government of Minas Gerais which confirmed their intention to build two factories; one in the City of SeteLagoas and another in Monte Alegre.

The company intends to assemble advanced innovative hybrid cars in Minas Gerais with enhanced engines on ethanol, gasoline, liquid natural gas, and bio-diesel. In an interview with Valor, Mr. Moeth Ahmed, the Global Sales and Marketing Director of the American Company who is in charge of the Brazilian venture, says the goal is also to install a research and development department in the country later to work towards the next step in electric car technology.

“We’re planning new and different technologies,” the executive says. One technology could be an alternative to the currently expensive lithium batteries being tested for cars throughout the world. “The focus is on offering environmentally friendly vehicles,” he said while avoiding disclosing further details.
Amsia Motors is a 100% independent organization founded in 1986, an OEM joint venture automotive manufacturer that is now successfully ready to launch its own brand under the name “Amsia Motors”. Mr. Ahmed, the Global Sales Director, says it has joint ventures with the largest Chinese carmakers such as DongFeng Motors, JinBei, which is partly owned by Auto Brilliance, and with Zhongtong Bus. The company operates in an independent capacity, developing innovative and efficient products, and collaborating with nine global technical partners such as AEC, MAN and Canada’s Cummins of Westport to name a few.
Ref: Valor Economica








Amsia OEM JV Partners runs an effective supply channel to market the vehicles. The Middle East, Asia, Africa, and a few South American countries are its main markets. Amsia is now betting on launching its own vehicle brand. Mr. Ahmed, who interviewed with Valor Economica newspaper in São Paulo, says that Brazil is a strategic market reach for Amsia and a potential export platform apart from the local region. “Brazil is a large market which experienced a strong economic challenge due to various aspects in several sectors recently, but it’s a resilient market for us, and very strategic,” the 43-year old executive, a Canadian citizen, says.
Amsia commenced its local start-up operations by registering the company in Brazil. A local (camp) office has been appointed to carry out its mandates, and the plan is to extend gradually from the import market to the production line and expand into other South American and Latin American countries.
The company could have picked China to begin producing its own vehicles, a move which certainly would be cost effective and offer greater sales potential. Unfortunately, there would be conflicts of interest. “We already are in the Chinese market with our partners through joint venture partnerships. The idea is to launch our brand independently and where we require a potential growth and a strategic reach into the future under such an investment,” Mr. Ahmed says.
Amsia Motors followed the departure of the Minas Secretary of State Mr. Altamir Rôso, by a visit to the new Secretary of State Mr. FábioCherem who presented strong efforts and dedicated support to assist in the successful steps for Amsia Motors project in Brazil.
Hon. Joedis Ferreira (Presidents liason) left, Mr. Moeth Ahmed (Amsia Global Sales Director (center), and Secretary Mr. Fabio Cherem.









The new Secretary of State, Mr. Fabio Cherem, is a passionate eye toward in the Minas Gerias State Government, says Amsia. Their initial steps to expedite the remaining taxation process have been tremendous and are expected to be concluded promptly. Company management also reported an inauguration date shortly after the taxation finalization for the two projects in Minas Gerias. The project presents a great opportunity in the current market challenges in Minas where 11 automotive projects were lost to other neighboring states due to greater incentives, competitive project facilitation, and benefits.
Company management expressed that it believes that the MG State Government shall carry out its due diligence by securing the environmental friendly project with over 3,700 employees. The company is quite concerned about its economic development in this market, and consider aggressive steps to success for its people of MG.
Amsia confirms that it believes the MG location has been a better decision than the previous state. Upon 18 proposals received by Amsia to date, the company also received newer proposals from other states but expects MG to be successful. In the previous location media speculation only encouraged state glamour without substantial execution of the project, but major misinterpretation of company information caused the loss of the project.
The company says the only remaining point is to conclude talks regarding federal tax issues, which it intends to do shortly. The industrial plant targets an implementation process of three years to complete its construction and conduct the first successful production runs.
The Amsia project master plan, design, production projection, forecast, team consultation and management process, supply chain map, including marketing planning and preliminary selection of local suppliers has been executed since Jan, 2016 until the present day where the project execution is now in the second phase, per Amsia’s plan.
The area allocated for Sete Lagoas in MG is a total of 7.5 million square meters, and the Monte Alegre site’s total area is 1.6 million square meters. The company expects to invest $560 million in Sete Lagoas and around $600 million in Monte Alegre, generating 2,500 and 1,200 jobs in each city, respectively. Amsia says it is absolutely capable of investing independently, skirting skepticism about Brazilian financing conditions due to its high interest rates.
Since 2016 Amsia has been meeting with City, State and Federal ministries addressing all concerns and challenges about the project and received a warm welcome to date. The Minas Gerais Development Bank and Caixa EconômicaFederal, as well as other banks, have already expressed strong interest in financing Amsia Motors in Brazil.
Management reserves full discretion to observe and study the local proposals, which have been received and the rest tentatively scheduled following the inauguration of the project.
The initial automotive product implementation shall be composed of light commercial vehicles and gradually introduce truck-heads, buses and new electric technology-based passenger vehicles. 
On the other hand, Amsia Global expands aggressively, engaging in a letter of intention and plans for execution shortly in Arizona, United States, for a compact electric vehicle and battery plant, which will assist strategically in North America. The official meeting is underway to meet the Governor of the state, the major, and other senior US officials. 

Monday, January 04, 2016

A New Year Commence With A New Page At Minas Gerais, Sete Lagoas & Monte Alegre; Amsia Assembly Plant, 2016!


















Amsia Motors Americas LLC, a registered American Company in the United States of America, signed the official 'MOU' document to plant deployment in Sete Lagoas, Monte Alegre for Automotive, Electronics, Agro vehicles and Power generators.

Sete Lagoas lives a historic moment for local development. Earlier on Friday (18th, 2015), the Mayor Marcio Reinaldo accompanied by the Global Sales & Marketing Director of the Canadian liaison office of the company Amsia Motors, held a news conference marked by the signing of the memorandum of understanding between the municipality and the multinational, in order to deploy in the city the main national company headquarters. The Sete Lagoas project, which will have a total investment of about US $ 500 million (nearly two billion reais) for the installation of an automotive assembly plant, aims to generate 2,500 jobs for the community.

Later the same day, in Monte Alegre Mayor Rodrigo signed the memorandum of understanding accompanied by the Amsia Motor's Global Sales & Marketing Director an investment of the same (US $500 Million) for Electronics, Agro & Power generating nearly 900 jobs, step by step.  



Presently managing operations from North America (Canada) directly under the executive Chairman's office and Board of Directors, South America and their OEM JV Automotive manufacturing Partners and facilities in Asia, Amsia Motors specializes in vehicles to clean energy for the Automotive, Agricultural vehicles and Power Generation - dedicated to a green ecosystem. For the fine City of Sete Lagoas & Monte Alegre factories, Amsia intends to meet the demands of all of South America, it aims to bring products from various segments, such as Automotives, Agro, Power, and Electronics. The brand 'Amsia Motors' industrial plant is to be installed in the vicinity of IVECO for Sete Lagoas and Monte Alegre location to be announced shortly, will feature a strategic production measure with an aggressive market penetration launch and a sustainable environment.

According to the Global Sales & Marketing Director of Amsia, Sete Lagoas & Monte Alegre is the ideal place to build its first 'Brazil Born National Brand' plant where it has all the necessary resources for the success of the enterprise: "It was a long journey since we set out to do this project embracing many challenges but with the help of the local team and the powerful Leadership of the Mayor Reinaldo Marcio and Mayor Rodrigo we are happy to move forward with Minas Gerais, Sete Lagoas & Monte Alegre. It is the right place that can support such a foreign investment and proper implementation of our project. Amsia Motors, who will become a National Brazil born company and a signature brand, is very happy with the warm reception and the opportunities found in Minas Gerais "he says.

Also according to the director, the company will seek to give first preference to the local businesses to buy goods, inputs, raw materials and hiring people in order to contribute to the region's economic growth and development: "Amsia Motors shall work directly with the Governor's & Mayor's office on from generation taxation and marketing in the territory to the preference in training and hiring of the professionals, these actions that will increase revenue and generate income in addition to our Corporate responsibility for the community, "he said.

Estimating an approximate period of 3 years following State approval, the project implementation shall undergo in three different phases. During the construction of the complete space, the company shall commence with the import market at its earliest with a highly cost effective measure, as a result, perform maximum production of the automobiles in the Country. To the Mayor Marcio Reinaldo & Mayor Rodrigo, the arrival of the company to the city is a milestone in the development of Sete Lagoas and Monte Alegre region: "This moment is unique in the progress of history of our city. Despite the challenges faced, Sete Lagoas & Monte Alegre is preparing to welcome a magnificent investment that will change the lives of the whole community and for this, the city has spared no effort in enabling all resources so that our people be contemplated. We now have the best conditions to receive outside companies, especially in the prepared manpower to run such important works as those who will be executed by Amsia "they said.


"Interested Companies for local Partnership are welcome to contact Amsia Motors management at info@amsiaglobal with Letter of Interest, Company profile and work scope, at their earliest. Senior Management shall select professional and dedicated Companies, based on project priority - who is currently engaged to do so and available in Sete Lagoas".

www.amsiamotors.com 

Wednesday, March 04, 2015

Chinese Billionaire Hires Infinity Executive !


Many worldwide automobile manufacturers are branching out into the realm of electric vehicles and electric automobile technologies. Companies including Leshi, Infiniti and Tesla are all converging on the Chinese market to take advantage of the burgeoning sales that occur in the country. Domestic Chinese automobile manufacturers like Leshi are working to increase their own knowledge of electric vehicles as well as bring in experts in the field to increase the chances of success in the electronic vehicle market.

               Jia Yueting is the founder of Leshi Internet Information and Technology Corporation based in Beijing. Recent additions to the Leshi Internet Information and Technology Corporation include Allen Lu, the former managing director of Infiniti China. He was brought on board to usher in a new era of electronic vehicle marketing and technology to Leshi, a traditional web and TV company.

               Allen Lu brings in extensive experience from Ferrari and Nissan’s own electronic vehicles groups and will certainly give Leshi a valuable resource when embarking upon this new business venture. His experience with other car companies will allow Leshi to gain experience in this market while they seek to create a functioning and efficient electric vehicle that appeals to Chinese drivers as well as drivers elsewhere in the world. Leshi hopes to someday manufacture electric cars around the world and are simply setting their sights on China for the time being.

               China is proving to be a ripe market for electric vehicles, or so hope the many billionaires who are choosing to invest in the country and this specific sort of technology. Recent attention to the massive pollution problems in China have led to laws about how many car licenses can be given out, how many cars can be sold and emissions regulations mean that the automobile market is opening wide for alternative energies and fuels to be used. Electric vehicle giants like Tesla are also looking to move into the fertile market that is China, building upon their reputation for stunningly brilliant electronic vehicles sold in other parts of the world.

               Electronic vehicles from other interested parties, would be manufactured in China to decrease the dependency China has on foreign automobile brands. This would not only benefit the domestic automobile market, but help pave the way for other non-automobile manufacturing companies like Leshi to invest in their own electric research and design experiments should they so desire.


               Leshi is breaking new ground into the automobile market as this is not the business they have been known for during their existence. The head of the company recognized the risk he is taking by branching out into this market but understands that while he might fail, the gains made for the future of the Chinese electronic vehicle market could make all the difference. He and others hope to create a suitable challenger to Tesla while creating a domestic, Chinese supercar that also works to solve some of China’s many fuel and pollution problems. 

Tuesday, March 03, 2015

Chinese Automotive Industries Sales of 2014 and 2015, Optimism!

2015 CAAM Market Annual Meeting and After-Market Development Summit Held in Henan.


               The Chinese auto market has long been known for creating a powerful domestic auto market internally while also maintaining strong connections to foreign brands around the world. Many international brands are represented in the Chinese automobile market and continue to vie for their place in one of the world’s biggest automobile markets.

               In total nearly 23.5 million cars were sold last year in China. This was an increase of nearly 7% from prior years and included trucks, passenger cars and busses. The sale of passenger cars was up with 19.7 million vehicles sold for an overall increase of roughly 10%. The China Association of Automobile Manufacturers released a report that further detailed the ups and downs of the domestic Chinese market from both the perspectives of foreign and local brands.

               The report noted that while domestic Chinese brands increased sales by 4.1%, the overall market share of those companies decreased by 2.1%. The total market share of domestic Chinese automobile companies is now 38.4%. The Chinese market is expanding to include foreign brands that are increasingly becoming popular in many locations around the world.

               Honda, for instance, has planned to invest nearly 220 million Euros into the Chinese car market by 2015. Their investments into this strong market are expected to continue through 2015. The China Association of Automobile Manufacturers estimates an increase in overall automobile sales in the country while delivering 25.1 million units throughout the world. Other automobile manufacturers including Ford, General Motors and Volkswagen had very productive years in Chinese automobile sales in 2014 and predictions seem hopeful for the coming year as well.

Mr. Shi Jianhua, keynote speech entitled on “Analysis and Prediction on Chinese Auto Market in 2015”.


               GM and Volkswagen have both seen their influence in the Chinese market climb, though GM is still on the heels of Volkswagen’s hold on the Chinese market. Volkswagen now exports over 3.5 million vehicles to China and Hong Kong while GM trails just slightly behind them.

               The general economic situation in China is constantly changing, as it is in many other parts of the world, and President Xi Jinping is doing his best to curb the racing economy to a more sustainable pace of growth. Part of this means a slowing of the automobile market, which may seem like a dire warning for some; however, a stabilization of the automobile market in China spells out a more predictable and successful future for the country’s domestic vehicles.

               The slowing of the total number of units sold in China doesn’t mean the companies aren’t making a profit. A Shanghai analyst named Lin Huaibin from the IHS Automotive group stated that the net increase of total vehicle sales will be between 1.5 million and 2 million units in 2015. Auto manufacturers will have the chance to absorb an increase in sales while still preparing for the potential slowdown of the Chinese market in the future.


               Sports Utility Vehicles, busses and transport vehicles also make up a significant portion of domestic and foreign automobile sales in China. 

Saturday, August 23, 2014

The Dongfeng Race Team; Amsia Motors JV Partner - One Design, Part II.


If you’re from the sailing world you will already know about the extra pressure the One Design nature of the Volvo Ocean 65 racing machines has put on the sailors of the Volvo Ocean Race. And even if you’re not from a sailing background all you need to know is:

Two years ago the Volvo Ocean Race introduced a One-Design boat.
All identical, all built to the same rule, no way to buy victory through technology.

Meaning the playing field is even in technology terms.

Meaning the pressure is all on the people.

Meaning there are no more excuses.

With the finish line approaching, Dongfeng Race Team, one of the Volvo Ocean 65s competing in the Round Britain and Ireland Race, are currently defending third position, holding off the attacks from Alvimedica and Team SCA overnight and throughout today as they head up the English Channel towards the finish in Cowes. For some the outcome of this race could provide a form guide for the Volvo Ocean Race itself, and naturally the predictions were that Abu Dhabi Ocean Racing would come out on top. As it turns out these predictions were spot on and with Ian Walker’s ‘Azzam’ just hours away from the finish line in a record breaking time (for monohulls), it’s time to truly dig into what it means to race ‘One Design’.



Although some are world class dinghy sailors in their own right, for the Chinese onboard ‘Dongfeng’ adapting to boats as big and powerful as the Volvo Ocean 65, and sailing out of sight of land, is where the challenge lies. Knowing that the design of the boat would no longer play a part in the outcome of the race it has been down to Team Director, Bruno Dubois and Skipper Charles Caudrelier to iron out the creases of communication and build a strong, solid team to compete in this edition of the Volvo Ocean Race. In a race where every tiny move or change of trim is the difference between keeping a place or losing it, racing is intense and the victors will be the team excelling in boat trim, seamanship, tactics, best interpretation of the weather data and pure physical and mental endurance. Small things will matter in this new breed of boats.

Abu Dhabi Ocean Racing are currently setting the bar very high for the rest of the Volvo Ocean Race teams. And its not surprising with 20 Volvo Ocean Races between the crew – a total of 13 years and 7 months at sea - something wouldn’t quite be right if they weren’t at the front of the fleet.

But for Dongfeng Race Team training continues - the learning curve remains very steep and what better way to go up it than racing against your competitors in this dress rehearsal. The team will get better, the people will grow stronger and the gap will close. ref: dongfengraceteam.cn

Thursday, August 14, 2014

The Challenge of Dongfeng Race Team; Amsia Motors JV Partner - Part I.

dongfengraceteam.cn

The Volvo Ocean Race is the world’s toughest sailing event, where the elite of the sailing profession battle it out on the most treacherous oceans. It is a nine-month marathon on the seas, passing through four oceans and five continents. The race is an exceptional test of sailing prowess and human endeavour where the athletes push themselves to the limit of endurance in what is commonly referred to as the ‘Everest of Sailing’.

Over the duration of the race, the crews experience life at the extreme: no fresh food is taken on board so they live off freeze-dried food; they experience temperature variations from -15 to +40 degrees Celsius and only take one change of clothes with them on board. They trust their lives to the skipper and each other and experience hunger and severe sleep deprivation.

dongfengraceteam.cn



















Dongfeng Race Team was the second of the Volvo Ocean 65’s to cross the Artemis Challenge finish line, 4 minutes behind Abu Dhabi Ocean Racing and ahead of Team SCA. Today’s Artemis Challenge, a 50-mile race around the Isle of Wight, has been the very first opportunity for ‘Dongfeng’ to line up against the Volvo Ocean Race competition.

Dongfeng Race Team completed the Artemis Challenge course in a time of 5 hours, 3 minutes and 46 seconds. This was the first time since the beginning of the Chinese campaign that Charles Caudrelier and his crew have found themselves within such close proximity to their competitors: “We’re not going to put too much pressure on ourselves but, for sure, it’s important to us,” explained Caudrelier. “The first time for us we’ve see the other teams and the first time we’ve performed in race mode as a team.”


Bruno Dubois, Dongfeng Race Team’s Director was out on the water when his team crossed the finish line. “We know we have a young team and we know that out of all the teams we have the least experience. I’m not expecting miracles but I’m confident we will see progress and eventually results. I am happy with the outcome from today’s challenge.”

A fleet of ocean going racing machines from the 70ft multihull Oman Sail Musandam to the 33ft Beneteau Figaro IIs took part in today’s Artemis Challenge. Dongfeng were part of the winning group A and a share of the £10,000 charity prize fund will be donated to Dongfeng Race Team’s nominated charity Race for Water. A charity dedicated to water preservation.

dongfengraceteam.cn


Today’s Artemis Challenge has been a nice, light airs, warm up. But with the Round Britain and Ireland Race start just days away, and the Volvo Ocean Race starting in less than two months, there is much more to come - and it won’t always be as tame, amicable or rewarding as today.

The RACE FOR WATER Foundation is a Charity dedicated to Water Preservation. Today, this vital resource is in serious danger. It has to be protected. To learn, share and act on our Water Footprint and Marine Plastic Pollution are the main issues the Foundation focuses on.

LEARN: Educate and raise public awareness
SHARE: Work together to make a difference
ACT: Implement practical solutions

The RACE FOR WATER Foundation has specifically developed a program based around four pillars:

AWARENESS: Raise understanding among general public and key opinion leaders about the urgency of water preservation through the “Water Guardian” program, exhibitions, our traveling Water pavilion and our ambassador boat: the MOD70.

BUSINESS: Engage businesses and scientists, develop the understanding of the impacts and propose tools for action in collaboration with the WWF and WBCSD.

EDUCATION: Inspire the next generation to act to preserve our water resources and engage them to make a difference with the help of the super hero ‘Titeuf’. The aim is to include the program in the school curriculum.

SCIENCE: Develop a better knowledge base and understanding of the impacts of plastics on the maritime environment, measure the real rate of waste dispersal and create a research center on plastic pollution in collaboration with governmental institutions.
Ref: dongfengraceteam.cn

Monday, August 04, 2014

The Big Auto Brands, profits, policies and platforms of Brasil.

Employees work on the assembly line at the Renault plant in Sao Jose dos Pinhais August 2, 2012.
CREDIT: REUTERS/RODOLFO BUHRER

Growth in Brazil's car market has screeched to a halt, but it is way too late for automakers to hit the brakes.

While domestic sales retreat and exports plunge, Brazilian factories are adding over a million vehicles of new capacity in just a few years, battering profitability in the world's fourth biggest auto market.

By 2017, global carmakers will be set up to build 6 million vehicles a year in Brazil even as local sales may struggle to pass 4 million, analysts say. They blame heavy-handed industrial policy and an excess of emerging-market euphoria.

"Everyone jumped on the bandwagon," said IHS Automotive analyst Guido Vildozo, citing oversized ambitions in Brazil after sales averaged 10 percent growth in the past decade. Carmakers are now investing about $5 billion a year in local assembly lines just as the market starts to shrink.

Profits have been the first casualty of the oncoming squeeze and labor relations could be the next, with the specter of layoffs looming in a presidential election year. A scramble for export markets also highlights the competitive gulf separating the industries in Brazil and regional rival Mexico.

"It's going to be a painful process, especially negotiating with the unions, but we're not expecting anyone to close shop," Vildozo said.

Long the darlings of Brazilian industrial policy, carmakers are in a bind precisely because of the protections they enjoy.

President Dilma Rousseff and predecessors have kept auto sales chugging along with tax breaks, cheap credit and import barriers, which encouraged a host of noncompetitive auto plants.

The result is a crowded and inefficient industry shackled to its domestic market, with few export options except a crisis-prone neighbor, Argentina.

Sales and output in Brazil have doubled since 2005 to around 3.8 million vehicles last year, but exports fell 40 percent to about half a million cars, trucks and buses.

When the going was good, automakers enjoyed fat profit margins on outdated platforms like a 56-year-old VW van that only went out of production last year. But the party is over for the biggest brands in Brazil, after years of depending on cash from local units to offset meager global growth.

Fiat SpA (FIA.MI), Volkswagen AG (VOWG_p.DE), General Motors Co (GM.N) and Ford Motor Co (F.N) saw profits plunge at their Brazilian units last quarter due to slipping market share, rising costs and a weaker currency.

Concerns spread through the industry in late 2013 over growing lines of new cars backed up at factory patios. Analysts reported that dealers were offering discounts of as much as 35 percent to clear expiring models.

Brazil's market may be in the middle of a three-year slump, according to Stephan Keese of auto consultancy Roland Berger in Brazil. He warns that the glut of new factories in a weak economy could lead to more than 30 percent excess capacity in the next few years, about double the industry's usual slack.

Rosy forecasts from the boom years are only partly to blame, he added, as Rousseff's policies forced many brands to build local plants in order to avoid steep taxes on imported content.

"The overcapacity was foreseeable because it was not supported by the market. It was largely about government intervention," said Keese.

WORLD CUP DISRUPTION

Rousseff has coaxed along the industry with both carrot and stick, but the tax breaks she unveiled in 2012 to prop up demand have provided diminishing returns. Last year sales fell 1 percent despite the costly stimulus, the first drop in a decade.

The tapering of those incentives, along with tighter credit, shaky consumer confidence and the disruptions of hosting the soccer World Cup starting in June, could cut sales in Brazil as much as 3.5 percent this year, according to Keese.

Another government rescue is unlikely, and not just because of a tight budget target as Rousseff seeks re-election.

Expanding access to new cars has long been an easy crowd pleaser for Brazil's ascendant middle class and the industrial unions at the heart of the ruling Workers' Party. However, that political calculus is starting to change.

Outrage over a lack of decent public transportation set off a wave of protests last year, drawing more than a million Brazilians into the streets. Awful traffic in major cities and a lack of public investments led many to question why the government was using tax breaks to put more cars on the road.

The auto industry argues that it provides more than 150,000 jobs and over a fifth of Brazil's industrial output. Carmakers have announced about $35 billion of capital spending from 2012 to 2018, helping to lift the country's dismal investment rate.

Yet even automaker association Anfavea concedes that sales in Brazil will not absorb more than three quarters of the country's capacity by 2017, when local plants should be able to produce over 6 million vehicles per year.

"This is a good problem to have," Luiz Moan, a senior GM executive currently in charge of Anfavea, told journalists this week. "We know we need to gain competitiveness so we can export at least a million units in 2017."

That process has started with policies requiring carmakers to update their Brazilian assembly lines along global standards rather than recycling outdated models. Anfavea is asking for more government measures to help it boost exports, including new tax benefits, trade deals and preferential financing.

Saturday, July 26, 2014

In China, Auto Boom Fuels Workers' Aspirations !

Ford engineer Johnny Wang says, 'The things that were totally impossible as a child are now within reach.' Tim Franco for The Wall Street Journal

Ford, GM and Foreign Car Makers Find it Harder to Attract and Retain Skilled Chinese.

NANJING, China— Johnny Wang grew up in a small town in the poor Anhui province in rural, eastern China, where even riding in a car, let alone owning one was a dream. Landing a job in China's booming auto industry changed all that.

Mr. Wang, 32, is a voice recognition engineer at Ford Motor Co. F -1.23% 's research and engineering lab in neighboring Nanjing. His wife, Xiang Jun, 32, works for Automobile Co. some 56 miles away in Wuhu, where the couple owns an apartment. Mr. Wang rents an apartment nearer to his workplace and drives to the couple's home in his Ford Focus at the weekend. Later this year they plan to take Mr. Wang's parents to Southeast Asia on their first overseas trip.

"All the things that were totally impossible as a child are now within reach," said Mr. Wang.

A century ago, when Henry Ford began paying his assembly-line workers $5 a day, the equivalent of $116 a day today and double the manufacturing norms of the time, he triggered a social revolution in America that transformed low-paid workers into middle-class consumers. Much the same has happened in China.

The explosive growth of China's auto industry during the past 20 years has helped to lift tens of thousands of Chinese like Mr. Wang into the middle class. Though below that of other major car-producing nations such as Germany, Japan and South Korea, wages for factory workers and engineers in China's auto sector are typically higher than average here.

Research by consultancy Mercer LLC, for example, shows wages for automotive engineers and factory workers in Shanghai in 2013 were between 15% and 17.6% higher than the average manufacturing wage in the area.

But now auto makers are confronting in China what U.S. auto makers discovered decades ago: Workers' aspirations rise with their pay. China is no longer a low-wage workshop for auto companies. It is increasingly a center for engineering, and research and development initiatives.

Foreign car companies are finding it increasingly difficult to attract and keep engineering talent, as more Chinese car companies offer better pay packages and at times broader professional experience. At the same time, all auto makers face competition for skilled Chinese workers from certain other industries where the pay and professional prospects are better.

Ford declined to reveal salary figures for its research and development engineers, but Chinese engineers with experience at foreign car firms command top pay in China.

Engineers with under 10 years' experience in research and development for foreign auto makers in China earn between 180,000 yuan ($29,200) and 300,000 yuan a year including bonuses, according to recruitment consultancy Robert WaltersRWA.LN -0.87% PLC.

Chinese auto companies usually offer around 30% more in salary to attract top talent from foreign brands, the consultancy said—more when employees are asked to relocate cross-country to newly emerging industry centers such as Wuhan, Changsha and Chongqing.

Vanessa Moriel, managing director of Human Capital Partners, a recruitment firm specializing in the auto industry, said engineers with specialized knowledge or leadership skills could earn as much as 500,000 yuan.

Chinese auto engineers typically want to fast track their careers and seek opportunities that allow them to expand their skills into high-tech, specialist areas, she said. Companies must pay market price salaries, she said, and interpersonal relations are key. "Chinese don't work for a company, they work for a leader," Ms. Moriel said.

Ford's Mr. Wang is content with his career advancement and has no plans to switch to another car company, Chinese or otherwise. "I have a long way to go in my career—and right now, I think I have a lot to learn at Ford," he said.

He also said he plans to stick with the auto industry. "I do desire an overseas experience to expand my horizons," said Mr. Wang. As to where that might be? "My first choice would be America—it's a country on wheels."

Keeping ambitious employees like Mr. Wang satisfied could still require some changes. He and colleague, Shawn Ma, aspire to greater roles in auto industry R&D.

Mr. Ma, a 27-year-old engine component engineer, said his team mostly modifies existing Ford technology to fit Chinese market requirements. But he is hopeful that will change in the next five to 10 years and allow the group to design new parts that will be used globally.

"They are starting to take some leads on global products but we haven't announced anything yet," said Scott Chang, a spokesman for Ford in China.

John Lawler, chief executive of Ford Motor China, recently described the expansion of the center in Nanjing as one of Ford's "top global product-development priorities." The company has invested more than $200 million there and plans to invest another $100 million. Ford would increase the number of employees at the Nanjing complex to around 2,000 people by 2018 from roughly 1,300 today. When the company moved into the current facility in 2007, the center had around 300 employees.

To maintain and grow their engineering workforces in China, foreign auto companies are finding themselves battling for talent with Chinese auto makers.

"Five years ago, a lot of Chinese wanted to work for multinationals, now that pendulum has swung," said Mary Thornton, formerly human resources director China for General Motors Co. GM -1.87% until the end of April. The attrition rate at GM in China is around 12% a year, she said. Some other companies in the industry have rates of around 20%, according to Human Capital Partners.

If Chinese car makers evolve into national or even international champions, more Chinese engineers working for foreign companies may switch allegiance to homegrown companies.

"The auto industry is almost 100 years old, but I think for China we're just at the start," says Mr. Ma. "At this time we're working for a foreign company. But in the future, more and more Chinese people are going to work in the industry and contribute to our own China automobile" industry.

Ms. Moriel said that trend could become more pronounced as ambitious Chinese employees realize that top jobs at foreign auto makers still go to foreigners. At Chinese companies, Chinese engineers have more chances to perform management roles beyond R&D and, she said, stand a greater chance of becoming chief executives one day.

Still, the auto industry remains a popular choice among engineering graduates. In a recent survey employer branding consultancy Universum Group AB said the car industry overtook heavy industry as the "most ideal" sector to work upon graduation for Chinese engineering students, something the consultancy said could be due to students' perception of the industry as creative and dynamic.

But when Universum looked at specific companies, auto makers in China trailed leading technology companies such as Huawei Technologies Co. and Google Inc.GOOGL -0.82% Only one, BMW AG BMW.XE -1.27% , appeared on the top 10, and GM's Shanghai GM joint venture ranked 20th.