A Way to Play Electric Vehicle Growth in China

Jason Raznick — Mon, 26 Jul 2010 16:40:00 EST

Filed under: Industry, Competitive Strategy

The Chinese automobile market has been rapidly growing, and the growth of the auto modified plastic space is growing at an even faster rate. Between 2005 and 2009, automobile production volume has gone from 5.7 million to 13.8 million, which implies a CAGR of 25%, and the growth of this sector's sales volume has an estimated CAGR of 27%. One company which benefits from these trends is China XD Plastics Co. (CXDC).

On July 21st, the company signed an exclusive product development agreement with Hafei Dongyang, which is one of the leading automotive parts suppliers in Northeast China, to deliver 3 tons of specialized plastic compounds. These compounds will be used in the battery casing during a pilot production for electric vehicles. According to the press release, China XD Plastics will have the opportunity to receive additional exclusive product development rights for a period of five years upon the successful design of new specialized plastic products to be used in HD's plastics parts in electric vehicles.

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A Way to Play Electric Vehicle Growth in China originally appeared on BloggingStocks on Mon, 26 Jul 2010 16:40:00 EST. Please see our terms for use of feeds.

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Chinese auto giants see little value in GM or Ford

Brian White — Fri, 18 Jul 2008 12:25:00 EST

Filed under: Ford Motor (F), General Motors (GM)

2008 will be the year that both General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F) went down in recent history as the complete sandbags those companies have really become. Both are losing money hand over fist (save for Ford's most recent profit surprise), and are struggling with trying to provide vehicles customers actually want to buy -- as distinct from vehicles they were projecting to produce.

GM CEO Rick Wagoner said recently that a GM bankruptcy won't be coming, although the automaker then announced it would be laying off even more workers as it digs and scratches its way to some type of profitability. A question then came up in the market again: would a foreign auto company be willing to take a stake in either American icon? How about those up-and-coming Chinese automakers who are cranking out fuel-efficient cars by the boatload and could be seen as very eager to enter the U.S. market?

Not so fast -- according to The New York Times, Chinese automakers are not interested. Not interested in equity stakes or even buying asset pieces from either American automaker. GM's recent sale notice for its struggling Hummer division and Ford's recent sale of Volvo didn't even register on the radars of Chinese auto companies, according to the report.

It's hard to see any company buying Hummer (except a military contractor) with global fuel prices where they are, but Volvo would be a neat catch for a company wanting to expand beyond a single global region. Ford doesn't have a buyer yet, but a deal could be announced any day now. Still, Chinese automakers may be smarter than to partner with or buy into two currently dead weights in the vehicle business. There are plenty of other global auto partners besides GM and Ford.

Chinese auto giants see little value in GM or Ford originally appeared on BloggingStocks on Fri, 18 Jul 2008 12:25:00 EST. Please see our terms for use of feeds.

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