Richard Branson (Virgin) to save Honda together with Adrian Reynard?

[Giuseppe F1]

Interesting rumour - especially the fact that Reynard still owns a lot of the Honda land which I wasnt aware of -

Also wasnt aware of how Branson and Reynard do/have worked together,

I think the Virgin brand would be great for F1 - I know Virgin Atlantic had a small sponsor deal with Super Aguri a while ago...

...Lets see how this one develops:

http://www.grandprix.com/ns/ns21187.html

FEBRUARY 16, 2009
Could it be Virgin?

There are rumours that the new bidder for Honda could be the Virgin Group, the venture capital firm that is headed by Sir Richard Branson. This specialises in travel, entertainment and lifestyle products. The company is estimated to be worth $8bn. The broad-ranging empire is not all doing well at the moment with the Virgin Atlantic airline announcing a reduction in its workforce by up to 600 jobs but other businesses doing very well. The lure of F1 is not obvious, apart from as a brand-building exercise, but it could be related to Virgin Fuel. Branson says he is investing $1bn in alternative fuels for cars and airliners. Using F1 would be a good way to promote the idea.

Virgin has been operating since the early 1970s when Richard Branson first launched the Virgin record label, shops, followed by a film company, games, the airline in 1984, holidays, airships, hotels, radio stations, books, cola, vodka, trains, cosmetics, mobile phones, internet access and space travel. Virgin announced its diversification into new fuels in 2006.

The most interesting element of any potential bid for Honda's F1 team is that Branson has expressed an interest in motor racing before. in 1997 he said that Virgin would fund the British Grand Prix if it was run without any tobacco sponsorships. In 2000 Branson appeared in Monaco as a guest of his friend, next door neighbour and business partner Adrian Reynard, as the Reynard company was at the time designing seats for Virgin Atlantic airliners. Two years later there was a small sponsorship deal from Virgin Mobile for Eddie Jordan.

The most intriguing idea is that Branson might be involved in a bid to put Reynard in charge of the team of which he was one of the founders and a shareholder in the early days. Reynard still owns the land on which the team's factories are built and is believede to own one of the two buildings as well, although these are leased to the team. Reynard and Branson have long been pals and he is one of the founding members of Virgin Galactic, Branson's companmy dedicated to taking normal (rich) people into space.

[N. Jones]

I don't know who it is going to be but I hope Honda resolves the issue soon as it would look kind of strange seeing just 18 cars on the grid.

[Bagwan]

This is exactly the kind of thing with which Branson likes to be involved .

He might be the only one that got the green image that Honda has been trying on . He'd be one of the only ones who could make it work .

He's got both the brass and the balls to play the game .
If this comes to be , I think he will be a serious player right out of the gate .

I do worry , though , whether Reynard is the man to front the battle . I think he's out of his depth with an ego too big to understand .

[trumperZ06]

;) Baggie,

I saw simular reports about Virgin's interest yesterday.

One report had David Richard's & Pro-Drive associated with the possibility of Virgin's taking over Honda.

:dozey: I think this is in the rummor stage... time will tell if anything comes about.

[Bagwan]

;) Baggie,

I saw simular reports about Virgin's interest yesterday.

One report had David Richard's & Pro-Drive associated with the possibility of Virgin's taking over Honda.

:dozey: I think this is in the rummor stage... time will tell if anything comes about.

It all fits nicely , though , Trump .

Reynard's ego wouldn't leave room for Fry .

I really hope this happens .

[jens]

Like has been said in another thread - so far all the companies, who have been engaged with Team Brackley's buyout, have denied the rumours and I expect Virgin to be another empty rumour.

Actually, Pitpass reports that it was Honda, who approached Virgin and not the other way around - an offer Virgin arguably rejected:
http://www.pitpass.com/fes_php/pitpass_news_item.php?fes_art_id=37058

[trumperZ06]

It all fits nicely , though , Trump .

Reynard's ego wouldn't leave room for Fry .

I really hope this happens .

:D Yep... that seems to make the most sense...

Divad Richard's & his "Pro-Drive" opperation is capable of running a Formula One team.

Richards is way too smart to risk his own money in F-1, but with OPM (other peoples money) it's logical for him to run the team.

[Bagwan]

:D Yep... that seems to make the most sense...

Divad Richard's & his "Pro-Drive" opperation is capable of running a Formula One team.

Richards is way too smart to risk his own money in F-1, but with OPM (other peoples money) it's logical for him to run the team.

You know I can't stand Richards .
Firing his a$$ was the best thing Honda ever did .

http://www.crash.net/formula+one/news/143119/1/richard_bransons_virgin_group_in_talks_with_honda_ f1.html

These guys have it that Virgin was there before the team announcement to sell .

[trumperZ06]

You know I can't stand Richards .
Firing his a$$ was the best thing Honda ever did .

http://www.crash.net/formula+one/news/143119/1/richard_bransons_virgin_group_in_talks_with_honda_ f1.html

These guys have it that Virgin was there before the team announcement to sell .

:D Yeah, I'm not a Richards (his character) fan either.


:( What he did to Villeneuve was terrible.

That said... he did improve their Formula One team and Pro-Drive's success has been outstanding. IMO... his managing Honda would be a good fit.

[BDunnell]

If any big project that might conceivably fit in with Virgin's brand image ever needs cash, Branson is always mentioned. He almost never ends up providing any backing. I would be amazed if this story will end up being any different.

[inimitablestoo]

Raises interesting possibilities for the car name. There probably isn't a racing driver out there who doesn't fancy getting inside a Virgin :D

[truefan72]

this is good news, the man is a capable business man, and will bring a kind of marketing and innovative approach as did Materschnitz with RBR.

I would make one clear stipulation though. He has to get rid of Nick Fry.
If he doesn't they are doomed.

[Daniel]

I always thought Richard and Dave looked a bit like each other. A joint Virgin-Prodrive effort would make sense purely based on looks I feel.
http://www.f1fanatic.co.uk/wp-content/uploads/2006/03/davidrichards_prodrive_1024.jpg


http://images.askmen.com/specials/2007_top_49/men/richard_branson.jpg

[Valve Bounce]

Well, we know where the money is coming from : http://www.theaustralian.news.com.au/story/0,25197,25071053-2702,00.html

[ioan]

I always thought Richard and Dave looked a bit like each other. A joint Virgin-Prodrive effort would make sense purely based on looks I feel.
http://www.f1fanatic.co.uk/wp-content/uploads/2006/03/davidrichards_prodrive_1024.jpg


http://images.askmen.com/specials/2007_top_49/men/richard_branson.jpg

Other than keeping their heads in the same position for that picture, having 2 eyes, 2 ears, 1 nose and 1 mouth, I fail to see the similarities.
I would even say that the difference in the quantity and quality of their hair is so obvious that I could hardly mistake one for the other! :p :

[Daniel]

Other than keeping their heads in the same position for that picture, having 2 eyes, 2 ears, 1 nose and 1 mouth, I fail to see the similarities.
I would even say that the difference in the quantity and quality of their hair is so obvious that I could hardly mistake one for the other! :p :
Yeah well you're a one eyed Ferrari fan so your eyesight isn't that good :p

[Knock-on]

I must admit, a Richards / Branson team has many, many things going for it. This rumour may not be as hair brained as it looks.

[ArrowsFA1]

Whatever the future of the former Honda team, I hope things are resolved for them soon. There's only just over a month until the start of the season :dozey:

[Mark]

I think it is safe to say that they won't be troubling the podium too much this season. Whatever name they run under.

[rob01]

i really hope this works out. yeah they are gonna be pretty far behind with development but F1 needs the grid numbers

[ArrowsFA1]

Honda has confirmed Richard Branson's Virgin Group have made a bid to purchase its Formula One team.
http://news.bbc.co.uk/sport1/hi/motorsport/formula_one/7896784.stm

[Ranger]

http://news.bbc.co.uk/sport1/hi/motorsport/formula_one/7896784.stm

I am genuinely surprised.

It will be interesting to see how that develops. :up:

[Knock-on]

So, great news but where does this leave Ross and Nick?

[ioan]

So, great news but where does this leave Ross and Nick?

I guess Ross will be OK as he is an excellent technical director, even the best I would say.
Fry?! Who cares?!

[Bagwan]

Button and Sato , together again .
Watch out , Jense !
You don't have Dave watching your back any more .

Go , Taku !

[Knock-on]

I guess Ross will be OK as he is an excellent technical director, even the best I would say.
Fry?! Who cares?!

I think I would like to see what Fry can do with a blank sheet before he's thrown to the wolves.

[Bagwan]

I think I would like to see what Fry can do with a blank sheet before he's thrown to the wolves.

It looks to me that Fry has been a wolf in sheep's clothing , as it appears he's been scuttling other efforts in favour of his own .

He's been vetting suitors for Honda , if true , in a very disingenuous way .

That doesn't do a lot positive for your reputation , and if I was in charge of Honda , I wouldn't touch him with a ten foot snail fork .

Wasn't it Fry who was reported to have met with Stepney and Coughlan ?
He seems a weasel to me .

[N. Jones]

I guess Ross will be OK as he is an excellent technical director, even the best I would say.
Fry?! Who cares?!
:laugh: :laugh:



IMO, I will be happy to see 20 cars on the grid, whomever buys HondaF1.

[Knock-on]

It looks to me that Fry has been a wolf in sheep's clothing , as it appears he's been scuttling other efforts in favour of his own .

He's been vetting suitors for Honda , if true , in a very disingenuous way .

That doesn't do a lot positive for your reputation , and if I was in charge of Honda , I wouldn't touch him with a ten foot snail fork .

Wasn't it Fry who was reported to have met with Stepney and Coughlan ?
He seems a weasel to me .

Sorry, but I really don't know where you're coming from there.

What evidence is there that he even could scuttle any bid, let alone has?

Also, because of his position, wouldn't he be the person to clear up matters of whether or not he had met with Messers Stepney and Couglan?

I may be missing something but I really fail to see where all this animosity and venom to Fry originated?

[jens]

I think I would like to see what Fry can do with a blank sheet before he's thrown to the wolves.

In my view he has been given more than enough opportunities to make a career in an F1 team.

[Bagwan]

Horses mouth ?
http://www.football.virginmedia.com/page/Motorsport/Headlines/0,,12555~1561686,00.html
The way Senna talks details sounds like it's a done deal .

[ioan]

I think I would like to see what Fry can do with a blank sheet before he's thrown to the wolves.

4 seasons were more than enough to prove he's a jerk.

[Malbec]

It looks to me that Fry has been a wolf in sheep's clothing , as it appears he's been scuttling other efforts in favour of his own .

He's been vetting suitors for Honda , if true , in a very disingenuous way .

That doesn't do a lot positive for your reputation , and if I was in charge of Honda , I wouldn't touch him with a ten foot snail fork .

Wasn't it Fry who was reported to have met with Stepney and Coughlan ?
He seems a weasel to me .

I think its the opposite. People seem to think that Honda is a lot more attractive than it really is. Whoever takes the team over immediately has to spend money decommissioning all the new toys Honda bought over the past two to three years that the new FOTA-agreed cost cutting regulations have made illegal. And thats before any car gets to turn a wheel.

Thats why no other significant name has entered the picture. If other blue chip companies were on the horizon their names would have been leaked by now. David Richards explained exactly why he didn't want to buy Honda and his logic was entirely sound.

If Virgin really are interested I suspect they've put in a very low offer to a desperate Honda. Either way I don't see how F1 fits into Branson's portofolio, he could end up losing a lot of money very quickly and thats just not his style.

[Malbec]

4 seasons were more than enough to prove he's a jerk.

How about the seasons before that when he turned BAR round from back of the grid to 2nd in the WCC in 2004? He was responsible for that too.

[BDunnell]

I think its the opposite. People seem to think that Honda is a lot more attractive than it really is. Whoever takes the team over immediately has to spend money decommissioning all the new toys Honda bought over the past two to three years that the new FOTA-agreed cost cutting regulations have made illegal. And thats before any car gets to turn a wheel.

Thats why no other significant name has entered the picture. If other blue chip companies were on the horizon their names would have been leaked by now. David Richards explained exactly why he didn't want to buy Honda and his logic was entirely sound.

If Virgin really are interested I suspect they've put in a very low offer to a desperate Honda. Either way I don't see how F1 fits into Branson's portofolio, he could end up losing a lot of money very quickly and thats just not his style.

All very good points. I will still be extremely surprised if a Virgin-sponsored 'Honda' (or whatever) team is on the 2009 grid.

[Oli_M]

This does indeed sound promising. Am I correct in thinking this is the first time Honda have actually announced/confirmed rumors of a name of a potential buyer? If so does that in itself say something?!?

[ioan]

How about the seasons before that when he turned BAR round from back of the grid to 2nd in the WCC in 2004? He was responsible for that too.

No he wasn't. Dave Richards was responsible for that one.

[Malbec]

No he wasn't. Dave Richards was responsible for that one.

Actually he was. Dave Richards was the figurehead but he was also running Prodrive proper and WRC's commercial rights at the same time. The hands on management was done by Nick Fry, he was merely promoted when Richards left and Prodrive withdrew.

[BDunnell]

No he wasn't. Dave Richards was responsible for that one.

How is it possible to say that one senior person amongst those running the team at the time was responsible for that success, while another wasn't? I would have thought it a team effort.

[Valve Bounce]

How is it possible to say that one senior person amongst those running the team at the time was responsible for that success, while another wasn't? I would have thought it a team effort.

You're all wrong - it was Bunsen whose magnificent driving was responsible. :p :

[Ranger]

You're all wrong - it was Bunsen whose magnificent driving was responsible. :p :

Ahem.. I think you will find Sato's aggressive driving style was much more responsible for their success than Button's smooth driving style. :p :

[jens]

I expect someone to pop in soon to say that Villeneuve's testing skills were responsible for the rise of BAR!

[ioan]

How is it possible to say that one senior person amongst those running the team at the time was responsible for that success, while another wasn't? I would have thought it a team effort.

OK, you're right, I should have formulated it otherwise.
IMO the one who did most for BAR Honda's success was Willis followed by Button.
But if we have to give credit to the management than I think it was Richards and prove for that is that as soon as he left the team started their downfall.

[I am evil Homer]

Agreed....Fry isn't cut out for team management and Richards love him or hate him knows how to run a team.

[Daniel]

Agreed....Fry isn't cut out for team management and Richards love him or hate him knows how to run a team.
Subaru might disagree with you.

[Oli_M]

Apparently this deal has to be done by the end of the month or Honda close the factory for good. So it looks to me like this could be the 'last chance'.

http://planetf1.com/story/0,18954,3213_4942791,00.html

[Malbec]

Agreed....Fry isn't cut out for team management and Richards love him or hate him knows how to run a team.

Of course the assumption there being that Richards did all the hands on management reshuffling work at BAR which he didn't, as anyone who knows his style would understand.

Richards gives his underlings a lot of freedom to do things their own way. Although he is the figurehead at BAR, Fry was left to do things the way he wanted from 2002 onwards, the same is true at Subaru. Richards merely turned up on weekends and for major decision making meetings or crises like Buttongate.

It may be inconvenient to give Fry credit for turning BAR around but I'm afraid the truth has a habit of not being so.

[I am evil Homer]

Subaru might disagree with you.

What because someone in Japan built a rubbish roadcar with the centre of gravity all off for rallying? You can't polish a turd.

[Knock-on]

I agree that Richards was a good principal for BAR and I think the team, directed by Richards with Fry driving development was very successful.

How much is down to individual people is a matter of opinion but similarly, the recent Honda years have not allowed Fry to really do his job.

I'm not saying he's the Mutts nuts but fair to say that there is no evidence he's not a good designer either.

All I am saying is that I would like to see what he can do without having a ex Motorcycle designer directing his efforts.

[Daniel]

What because someone in Japan built a rubbish roadcar with the centre of gravity all off for rallying? You can't polish a turd.

I'm not sure about that. The C4 as a roadcar is hardly fantastic. Plus the Impreza was successful in the past and suddenly now it isn't? Gimme a break!

[AndyL]

If Virgin really are interested I suspect they've put in a very low offer to a desperate Honda.

What, like 50p or something ;) If that's the case I'll top them with an offer of 75p, no way I'm paying the full quid though :D

[MJW]

I'm not sure about that. The C4 as a roadcar is hardly fantastic. Plus the Impreza was successful in the past and suddenly now it isn't? Gimme a break!
One major difference is that Citroen dont make a 4 wd / turbo engine version of the C4, so there is absolutely no constraints on Citroen engineers - they gave a clean sheet, basically C4 silhouette to work from. Subaru make a 4wd turbo engined roadcar, that the wrcar was based on. Slight difference.

[Daniel]

One major difference is that Citroen dont make a 4 wd / turbo engine version of the C4, so there is absolutely no constraints on Citroen engineers - they gave a clean sheet, basically C4 silhouette to work from. Subaru make a 4wd turbo engined roadcar, that the wrcar was based on. Slight difference.
Within the regulations of WRCars there is a lot of freedom for design and innovation. I somehow doubt the formula which was successful even back in 2003 is somehow not right now.

[speedsnake74]

I somehow doubt the formula which was successful even back in 2003 is somehow not right now.

are you serious, Of course its not.....

the impreza wrs s11,s12, s12b, s14 are all much quicker tha the 2003 car

just not as quick as the 04, 05, 06, 07 and 08 focus and Xsara/C4's

[MJW]

are you serious, Of course its not.....

the impreza wrs s11,s12, s12b, s14 are all much quicker tha the 2003 car

just not as quick as the 04, 05, 06, 07 and 08 focus and Xsara/C4's
Talk to people who have driven them

[truefan72]

4 seasons were more than enough to prove he's a jerk.

absolutely,

not only is he an unapologetic opportunist who was trying to steer the honda sale into his own benefit, but i will never forgive him for orchestrating Super Aguri's exit from F1. A team that was on a clear upward slope before Fry got jealous and vindictive.

He has no business in an F1 paddock any more and has no legitimacy in my book. And Richards should follow close behind him, He butchered the whole prodrive situation and now wants another bite of the apple. No thanks.

[ShiftingGears]

absolutely,

not only is he an unapologetic opportunist who was trying to steer the honda sale into his own benefit, but i will never forgive him for orchestrating Super Aguri's exit from F1. A team that was on a clear upward slope before Fry got jealous and vindictive.


How long would you want another team leeching off your resources without getting a return on it?

[ioan]

How long would you want another team leeching off your resources without getting a return on it?

Those were not Honda F1 Team's resources and certainly not Fry's resources!

Honda Japan was paying Super Aguri in order to give Sato a ride and thus have a Japanese F1 driver on the grid.

What Fry did is equivalent with destroying your little brother because he get's pocket money from your parents and he manages it better. (this was just an example and all characters involved are fictious! :D )

[Knock-on]

Those were not Honda F1 Team's resources and certainly not Fry's resources!

Honda Japan was paying Super Aguri in order to give Sato a ride and thus have a Japanese F1 driver on the grid.

What Fry did is equivalent with destroying your little brother because he get's pocket money from your parents and he manages it better. (this was just an example and all characters involved are fictious! :D )

Could you please back this up with any facts leading to your conclusions?

I don't have enough hard and fast data to base a conclusive opinion about Nick Fry on but there seems a lot of slander floating about based on peoples opinions and preferences and very little actual proof or facts.

According to some people here, he is akin to the anti-Christ who destroyed the work Reynard did and was a woefully ineffective manager hanging at the coat tails of Dave Richards.

Then in the same breath, he has the power and control to sabotage his Japaneese masters efforts in another semi-independant team!!

It makes no sense :confused:

[SGWilko]

Honda Japan was paying Super Aguri in order to give Sato a ride and thus have a Japanese F1 driver on the grid.


Errrrrrr, ummmmmmm, errrrrrr, was it not Honda that hung Sato out to dry in the first place? All of a sudden it is Fry that has done this. All he has done, in fact it seems to me all he has ever done, is look after the interests of HIS team.

Suppose there were rumours that Honda was thinking of running away a few seasons ago. Would you happily allow another team - haemmoraging all YOUR money and BEATING you, allow the nails be hammered into the coffin even quicker.

Sheesh, you lot would lay the fault of America's war in Iraq/Afganistan at Fry's door too. In fact, didn't Fry design, build and skipper the Titanic.......?

[Knock-on]

In fact, didn't Fry design, build and skipper the Titanic.......?

No, but he designed the Iceburg and lewis steered it into the Titanic :D

[Malbec]

Those were not Honda F1 Team's resources and certainly not Fry's resources!

Honda Japan was paying Super Aguri in order to give Sato a ride and thus have a Japanese F1 driver on the grid.

What Fry did is equivalent with destroying your little brother because he get's pocket money from your parents and he manages it better. (this was just an example and all characters involved are fictious! :D )

Woah, stop giving Fry superhero powers.

Super Aguri owed Honda $100 million on the promise that they would be repaid by sponsors that never materialised. Guess what? Honda lost patience and pulled the plug. Fry had nothing to do with it.

As for funding a team just to keep a Japanese driver on the grid, this is Honda, a company that finds it nice if there is one on the grid but has never given much of a toss if there wasn't either. Autosport which is the source of much of this nonsense about Sato, Super Aguri and Honda is showing its ignorance of the Japanese market I'm afraid, Sato never was that big over there outside the hardcore F1 fan market. Certainly not worth spending $100 million on to keep in F1. If Honda was that desperate to keep him they wouldn't have sacked him in the first place would they.

[SGWilko]

You can't polish a turd.

No, but if you eat enough yoghurt it puts a nice gloss on it....... :laugh:

[Knock-on]

Anyway, back to the thread :D

Bernie is now involved and seems to be pushing the Branson bid. No surprise there :rolleyes:

Look like the only 2 deals are a management buyout or the Virgin / Prodrive inititive.

Honda have mooted that disbanding the team is still an option which is worrying unless it's a strong arm tactic.

Hmmmmm

[SGWilko]

Anyway, back to the thread :D

Bernie is now involved and seems to be pushing the Branson bid. No surprise there :rolleyes:

Look like the only 2 deals are a management buyout or the Virgin / Prodrive inititive.

Honda have mooted that disbanding the team is still an option which is worrying unless it's a strong arm tactic.

Hmmmmm

I think we need to accept that Honda are potentially not the only team to 'pull the plug' and more will follow as the global crisis deepens.

Talking to one of my work colleagues who has explained to me how Lehman's got so in the sh!t, I can see how there is a lot more poopoo to come in terms of severe toxic debt.

[Knock-on]

I think we need to accept that Honda are potentially not the only team to 'pull the plug' and more will follow as the global crisis deepens.

Talking to one of my work colleagues who has explained to me how Lehman's got so in the sh!t, I can see how there is a lot more poopoo to come in terms of severe toxic debt.

Toxic debt is a nasty problem that will quickly get written off by the banks, underwritten by the government, allowing the banks to concentrate on nice profitable business while the tax payer picks up the bill.

We are already seeing banks bounce back after taking Billions of taxpayers money to put aside against toxic debt and then posting huge profits.

Exactly WHAt share have we got in the banks? I'll bet it composes of nice gilt edged bonds wrapped up in the stinking s**t they want to offload.

[Malbec]

Toxic debt is a nasty problem that will quickly get written off by the banks, underwritten by the government, allowing the banks to concentrate on nice profitable business while the tax payer picks up the bill.

We are already seeing banks bounce back after taking Billions of taxpayers money to put aside against toxic debt and then posting huge profits.

Exactly WHAt share have we got in the banks? I'll bet it composes of nice gilt edged bonds wrapped up in the stinking s**t they want to offload.

I think you'll find that the banks that have made large profits are the ones with the least toxic debt. Also, the banks still haven't gone halfway through the task of sorting out which of their debts are rubbish and which aren't so there's plenty of room left for nasty surprises.

It won't get quickly written off, and lets not forget that the car makers are getting in worse and worse trouble. If GM or Chrysler folds that will knock out a few suppliers in the US which will drag Honda, Toyota, Beemer and Merc and anyone else building cars there down with them.

We've still got a long way to fall...

I'm not sure about Bernie's comments, they add nothing new and may simply be adding pressure to Branson from whom we've heard nothing. I won't believe anything until we see the two ex-Hondas on the grid in Melbourne.

[ioan]

If GM or Chrysler folds that will knock out a few suppliers in the US which will drag Honda, Toyota, Beemer and Merc and anyone else building cars there down with them.

I'm not sure this is how it would be.
If GM and Chrysler folds than the others, who are producing cheaper and better cars will surely have a better market than before.
Sure suppliers will have to cut back or some of them will close, but as long as one car manufacturer stays also their suppliers will stay alive. And I doubt that people are suddenly thinking about walking hundreds of miles instead of uying a car.

IMO we should not exaggerate things.

Sure this crisis is nasty, but we still need plenty of products in order to live our lives, and those who produce the products with the best price/quality will survive, which is the right thing IMO.

[gloomyDAY]

Come on Branson! Make with the cash so we can get on with this season.


I'm not sure this is how it would be.
If GM and Chrysler folds than the others, who are producing cheaper and better cars will surely have a better market than before.
Sure suppliers will have to cut back or some of them will close, but as long as one car manufacturer stays also their suppliers will stay alive. And I doubt that people are suddenly thinking about walking hundreds of miles instead of uying a car.

IMO we should not exaggerate things.

Sure this crisis is nasty, but we still need plenty of products in order to live our lives, and those who produce the products with the best price/quality will survive, which is the right thing IMO. :?:


I'm assuming this thread has been derailed a bit.

[acescribe]

To get the thread back on track....

Sir Richard Branson was a studio guest on BBC News this morning, mainly to talk about 25 years of Virgin Atlantic Airways but he was asked about the Honda team and he said said very little, only that if "F1 were to use greener fuels and be more cost effective for the likes of the Virgin brand he might be interested".....?!

As ever, a businessman keeping his cards close to his chest but the clock is ticking surely..?

[I am evil Homer]

I'd guess it depends on the extra money....does anyone know if Branson's "green fuel" idea is being developed with anyone? After all, if Petrobras came in on that or were already the partner it would smooth the way for extra money and place Senna in a prime position for a seat.

[Malbec]

I'm not sure this is how it would be.
If GM and Chrysler folds than the others, who are producing cheaper and better cars will surely have a better market than before.
Sure suppliers will have to cut back or some of them will close, but as long as one car manufacturer stays also their suppliers will stay alive. And I doubt that people are suddenly thinking about walking hundreds of miles instead of uying a car.

IMO we should not exaggerate things.

Sure this crisis is nasty, but we still need plenty of products in order to live our lives, and those who produce the products with the best price/quality will survive, which is the right thing IMO.

Nothing is being exaggerated I'm afraid.

I accept your point about good products surviving, but that logic only applies in the long term once everything has died down.

Your point about a bigger market for the surviving car makers isn't quite valid as there are huge stocks of unsold cars from GM, Ford and Chrysler. If one of them goes bust the liquidators will release that stock onto the market at hugely discounted prices to get cash.

Thats why Honda and Toyota stocks plummeted through the floor when the big Three went to the US government for a bailout. If one of them folds, the Japanese stand to suffer. Why buy a Camry or Accord for 20% off if a GM or Chrysler is yours for 60% off?

Regarding the suppliers approximately 60% of the suppliers to Japanese and German makers in the US also rely on GM and Chrysler. How do you think those suppliers will do when they lose 40% of their custom, and thats after the already reduced demand there is for car parts?

The car makers haven't seen the worst of it yet, 80% of BMWs are sold in the US and UK on credit and a lot of them are returning to BMW worth a considerable lot less than promised. Thats a timebomb waiting to happen.

Don't get me wrong, the best will still be around after all the dust settles but there's a lot of pain on the way. Spending millions of F1 really isn't going to be a priority for anyone in the next few years.

And today I hear Branson comment that F1 as it is isn't quite right for him. Its probably posturing before his bid but I don't think we should assume he's that interested in Honda.

[DexDexter]

Nothing is being exaggerated I'm afraid.

I accept your point about good products surviving, but that logic only applies in the long term once everything has died down.

Your point about a bigger market for the surviving car makers isn't quite valid as there are huge stocks of unsold cars from GM, Ford and Chrysler. If one of them goes bust the liquidators will release that stock onto the market at hugely discounted prices to get cash.

Thats why Honda and Toyota stocks plummeted through the floor when the big Three went to the US government for a bailout. If one of them folds, the Japanese stand to suffer. Why buy a Camry or Accord for 20% off if a GM or Chrysler is yours for 60% off?

Regarding the suppliers approximately 60% of the suppliers to Japanese and German makers in the US also rely on GM and Chrysler. How do you think those suppliers will do when they lose 40% of their custom, and thats after the already reduced demand there is for car parts?

The car makers haven't seen the worst of it yet, 80% of BMWs are sold in the US and UK on credit and a lot of them are returning to BMW worth a considerable lot less than promised. Thats a timebomb waiting to happen.

Don't get me wrong, the best will still be around after all the dust settles but there's a lot of pain on the way. Spending millions of F1 really isn't going to be a priority for anyone in the next few years.

And today I hear Branson comment that F1 as it is isn't quite right for him. Its probably posturing before his bid but I don't think we should assume he's that interested in Honda.

Are you sure that people are willing to buy old-fashioned, gasoline-eating cars whose manufacturer has collapsed, no matter what the prices are? Spare parts and maintenance issues will come into picture here. Maybe Americans are different, but on a global scale a good example is Swedish Saab, part of GM. I read a story in a Swedish newspaper which suggested that Saab retailers haven't managed to sell ANY cars at all in the last weeks because the future of the brand is so uncertain.

[Bagwan]

To get the thread back on track....

Sir Richard Branson was a studio guest on BBC News this morning, mainly to talk about 25 years of Virgin Atlantic Airways but he was asked about the Honda team and he said said very little, only that if "F1 were to use greener fuels and be more cost effective for the likes of the Virgin brand he might be interested".....?!

As ever, a businessman keeping his cards close to his chest but the clock is ticking surely..?

The fuel is key to the bid , it seems .
Is Branson clever or what ?

He'll run his entry , and sell green fuel to the lot of them before long .

He's also a guy who could negotiate the FOTA money distribution issue , before even being a member , and that may be the "cost effective" aspect to which he was referring .

[truefan72]

Woah, stop giving Fry superhero powers.

Super Aguri owed Honda $100 million on the promise that they would be repaid by sponsors that never materialised. Guess what? Honda lost patience and pulled the plug. Fry had nothing to do with it.

Fry had everything to do with it, even before the "convenient" situation of owed money came up (which could have been remedied) Fry was instigating actions detrimental to the Super Aguri Team.
1. Limiting parts that were scheduled to come to them
2. Making overtures to the Honda bosses to drop SA
3. Undermining their in-season testing
4. severely limiting their options in resolving their debt

He effectively strangled the team, then turned around and made his case to Honda to dismiss them. As I recall, he was also in charge of making decisions regarding their future, potential sponsors and buyers, and if I remember well, he set up obstacles in each case to drive away sponsors and/or buyers.

The man is a class-A jerk who must have some photos of Honda execs somewhere to keep his employment. He has done absolutely nothing for them the last couple of years and will go down in history as bringing down 2 F1 teams in a span 1 calendar year, out of sheer incomptence, conniving and obtuse jealousy.


As for funding a team just to keep a Japanese driver on the grid, this is Honda, a company that finds it nice if there is one on the grid but has never given much of a toss if there wasn't either. Autosport which is the source of much of this nonsense about Sato, Super Aguri and Honda is showing its ignorance of the Japanese market I'm afraid, Sato never was that big over there outside the hardcore F1 fan market. Certainly not worth spending $100 million on to keep in F1. If Honda was that desperate to keep him they wouldn't have sacked him in the first place would they.

How about keeping a team with a winning formula, strong public support, cult like following, fan favorite, clear example of operating successfully on a budget, and popular drivers.

No, sounds too reasonable. Instead we will drop $300 million on a car and team that's a dud. With unmotivated drivers, shoddy management and lackluster performance.

Sounds reasonable to me. LOL

IMO funding super Aguri was the best F1 investment Honda made, and clearly going down the road they did has proven to be a monumental error. Most decisions like this indicate useless political machinations and have very little to do with achievement and common sense.

[Malbec]

Fry had everything to do with it, even before the "convenient" situation of owed money came up (which could have been remedied) Fry was instigating actions detrimental to the Super Aguri Team.
1. Limiting parts that were scheduled to come to them
2. Making overtures to the Honda bosses to drop SA
3. Undermining their in-season testing
4. severely limiting their options in resolving their debt

He effectively strangled the team, then turned around and made his case to Honda to dismiss them. As I recall, he was also in charge of making decisions regarding their future, potential sponsors and buyers, and if I remember well, he set up obstacles in each case to drive away sponsors and/or buyers.

The man is a class-A jerk who must have some photos of Honda execs somewhere to keep his employment. He has done absolutely nothing for them the last couple of years and will go down in history as bringing down 2 F1 teams in a span 1 calendar year, out of sheer incomptence, conniving and obtuse jealousy.

He must be one powerful capable man to keep Honda in his thrall for so long, manipulating their decisions regarding Super Aguri his way, filtering sponsors and potential buyers (Don't you think blue chip companies would simply contact Honda directly and blow the whistle if they thought Fry was doing something dodgy).

Why also disregard his earlier success turning BAR around, signing Rubens (ok debatable as to whether that was good) and Ross Brawn? Are they a little inconvenient to fit in?

If you also honestly believe he is behind Honda pulling out of F1 then really there's no helping you either.

Don't get me wrong, I don't think he's God's gift to F1 either but this simpleminded and one dimensional demonisation is something I find rather infantile.


How about keeping a team with a winning formula, strong public support, cult like following, fan favorite, clear example of operating successfully on a budget, and popular drivers.

No, sounds too reasonable. Instead we will drop $300 million on a car and team that's a dud. With unmotivated drivers, shoddy management and lackluster performance.

Sounds reasonable to me. LOL

IMO funding super Aguri was the best F1 investment Honda made, and clearly going down the road they did has proven to be a monumental error. Most decisions like this indicate useless political machinations and have very little to do with achievement and common sense.

Really? So where did the Super Aguri car come from? Did they design it themselves? No. Were they going to be able to carry on using copied cars? No. Were they paying their own way? No. Why carry on paying for a team with no future according to the regulations at the time?

Why fund a team that also takes the glory away from your named team? Why not restructure the team that actually designs the cars so it does a better job? Why not recruit someone like Ross Brawn and other designers and focus all the effort into one team?

[Malbec]

Are you sure that people are willing to buy old-fashioned, gasoline-eating cars whose manufacturer has collapsed, no matter what the prices are? Spare parts and maintenance issues will come into picture here. Maybe Americans are different, but on a global scale a good example is Swedish Saab, part of GM. I read a story in a Swedish newspaper which suggested that Saab retailers haven't managed to sell ANY cars at all in the last weeks because the future of the brand is so uncertain.

Sorry missed your post. I don't know to be honest, but I suspect any liquidator will do whatever it takes to convert the unsold stock into cash, even if it takes shipping the cars elsewhere (ie to Oz or the Middle East that like US cars) and dump them there.

In the UK I believe that all the MG-Rovers were finally sold when the company went bust and the suppliers are quite happy to keep making parts, after all they still get paid from the customers, probably a more reliable source of income than any soon-to-be-bankrupt maker.

[ioan]

I accept your point about good products surviving, but that logic only applies in the long term once everything has died down.

I don't agree, if everything died as you say than nothing would have survived.

I doubt everything will come to a full stop as no one would get anything out of that.
The system needs a heavy revision but it can continue to go forward.

[ioan]

Thats why Honda and Toyota stocks plummeted through the floor when the big Three went to the US government for a bailout. If one of them folds, the Japanese stand to suffer. Why buy a Camry or Accord for 20% off if a GM or Chrysler is yours for 60% off?

Regarding the suppliers approximately 60% of the suppliers to Japanese and German makers in the US also rely on GM and Chrysler. How do you think those suppliers will do when they lose 40% of their custom, and thats after the already reduced demand there is for car parts?

The European and Japanese constructors have a market of their own, free of any american counterparts and will survive just fine when the GM and Chrysler go down.



The car makers haven't seen the worst of it yet, 80% of BMWs are sold in the US and UK...

That seems to much to me. There are plenty of BMW's in Europe and Rusia too.
EU is half a billion people even without the UK, that is almost double of the USA, and if you count Russia it well over it.
If 20% of the BMW only are sold in EU and Rusia + Asia, and I still see plenty of them everywhere, than 80% in a much smaller market would mean that the density of BMW's in the US and UK is 10 times higher than in Europe, which I can't believe.

Maybe they sold in the US 70-80% of the Z8 or some other very expensive roadster that European's won't buy for practical reasons. But 80% of their production is difficult to believe.

[Malbec]

The European and Japanese constructors have a market of their own, free of any american counterparts and will survive just fine when the GM and Chrysler go down.

Try actually reading my original post. I've explained why the Japanese and European makers will be hit if GM or Chrysler go down. Its to do with suppliers falling and the market being awash with cheap GM/Chrysler stock being liquidated. I haven't read anything in your posts to explain why industry forecasters have got it wrong.


That seems to much to me. There are plenty of BMW's in Europe and Rusia too.
EU is half a billion people even without the UK, that is almost double of the USA, and if you count Russia it well over it.
If 20% of the BMW only are sold in EU and Rusia + Asia, and I still see plenty of them everywhere, than 80% in a much smaller market would mean that the density of BMW's in the US and UK is 10 times higher than in Europe, which I can't believe.

Maybe they sold in the US 70-80% of the Z8 or some other very expensive roadster that European's won't buy for practical reasons. But 80% of their production is difficult to believe.

No you misquoted me. 80% of BMWs sold in the UK and the US are sold on credit. I didn't say 80% of BMWs are sold to the UK and US. The rest of my post explains why that is a problem. I forgot to add that now credit is more expensive it means that far fewer people can afford to buy on credit too, further cutting sales.

[ioan]

Try actually reading my original post. I've explained why the Japanese and European makers will be hit if GM or Chrysler go down. Its to do with suppliers falling and the market being awash with cheap GM/Chrysler stock being liquidated. I haven't read anything in your posts to explain why industry forecasters have got it wrong.

I read it and I disagree.
The suppliers will cut back and live live with the contracts from the Europeans and Japanese and maybe Ford.
Just because GM and Chryslers go belly up it doesn't mean that manufacturers that produce way more than them will not be able to support at least partially the suppliers.



No you misquoted me. 80% of BMWs sold in the UK and the US are sold on credit.

My bad, sorry. :)

[driveace]

On the above thread you stated that 80% of BMW ,s sold in UK or USA were on credit..I think what is true is that in the UK85% of ALL cars are on credit,lease or not paid for by the person driving them.I was also told by a dutch dealer that it is just the same in his country,.Ask any body who works in a bank and they will tell you that 85% of all bank accouts in the UK if not the rest of Europe ,are in the RED

[Malbec]

I read it and I disagree.
The suppliers will cut back and live live with the contracts from the Europeans and Japanese and maybe Ford.
Just because GM and Chryslers go belly up it doesn't mean that manufacturers that produce way more than them will not be able to support at least partially the suppliers.

The suppliers will lose a significant chunk, we're talking up to 50-60% of their custom from GM/Chrysler going bust. Thats on top of the already reduced custom due to everyone cutting production anyway.

They won't simply cut back and live. The healthiest suppliers will survive but a large number won't. The suppliers that do go bust will affect all the companies they supply, not just GM and Chrysler.

Try cutting sales in any company by 50-60% and see how well they fare.

Anyway here's a link that explains things better.

http://www.reuters.com/article/companyNews/idUKTRE4BB7C520081213?symbol=TRW.N

[Nikki Katz]

According to Autosport, the News Of The World (ok, so they've made up a few stories in the past) interviewed Bernie, and he confirmed that the rumours about him offering to buy out Honda were true, but they turned him down! Last week I thought that Honda's survival looked quite good, but the sounds from Branson aren't positive, and this only really leaves the management buyout option.

[Malbec]

On the above thread you stated that 80% of BMW ,s sold in UK or USA were on credit..I think what is true is that in the UK85% of ALL cars are on credit,lease or not paid for by the person driving them.I was also told by a dutch dealer that it is just the same in his country,.Ask any body who works in a bank and they will tell you that 85% of all bank accouts in the UK if not the rest of Europe ,are in the RED

I just picked BMW as an example, its one of the worst affected by poor credit flows because much of its recent sales expansion has been credit fed. You're right of course that all makers are affected by this, and its interesting to see that in the first carmaker bailout in the US GM and Chrysler funnelled government cash partly directly into their credit wings to allow more credit funded purchases.

My understanding is that the level of credit funded car purchases is lower on the Continent, though how much so I don't know.

I disagree with the 85% figure about bank accounts though, you may not believe it but the majority of people in the UK are actually net savers, the problem is that a significant minority live on credit and a small number of those have totally overborrowed. Still, you only need a small decline in the number of people with money to spend to cause a recession as long as the perception of impending doom exists in the rest of the population with money.

[nigelred5]

The European and Japanese constructors have a market of their own, free of any american counterparts and will survive just fine when the GM and Chrysler go down.



That seems to much to me. There are plenty of BMW's in Europe and Rusia too.
EU is half a billion people even without the UK, that is almost double of the USA, and if you count Russia it well over it.
If 20% of the BMW only are sold in EU and Rusia + Asia, and I still see plenty of them everywhere, than 80% in a much smaller market would mean that the density of BMW's in the US and UK is 10 times higher than in Europe, which I can't believe.

Maybe they sold in the US 70-80% of the Z8 or some other very expensive roadster that European's won't buy for practical reasons. But 80% of their production is difficult to believe.

It may be difficult to believe, but it's true. The US has been BMW's largest market for years and last I saw, they sell more cars in the US than all other markets combined.

I suspect maybe you don't quite realize just how many cars there actually are in the US and just how many people directly rely on the automobile industry for employment. Hell, I worked for two different major suppliers to GM and Chrysler while in college. I know absolutely no one that doesn't own a car, and I can honestly say, I don't know a family that doesn't own at least Two. The EU may have have a billion people, but the percentage of car ownership in the US is VASTLY higher than the EU. It may sound a uppity or bragging, but I own 7 cars, all operational. Granted 3 are old VW beetles and one is a minivan we keep for travelling to football and soccer games and races, but we have them none the less.
I've honestly never seen a Z8, but 3 and 5 series are a dime a dozen and the Z3's are everywhere. The SUV's are also pretty common. Without trouble, I can come up with at least 2-3 dozen people I know personally that have at least 1 BMW in the garage and I dont' exactly live in an overly affluent area.

Their US sales numbers are pretty well published. BMW's are VERY common, At least in my area. To be honest, They aren't really seen as anything really special unless you have a 6 or 7 or things like an M5. I EASILY see more 3 series BMW's than any Mercedes model, and you can't shake a stick without hitting a MERC.

[Knock-on]

It may be difficult to believe, but it's true. The US has been BMW's largest market for years and last I saw, they sell more cars in the US than all other markets combined.


1,276,793 BMW brand cars were sold in 2007, surpassing the previous year's level (1,185,088 units) by 7.7%.

...............

The USA remained the largest single market for BMW and MINI cars in 2007. With a sales volume of 335,840 units (2006: 313,603 units /+7.1%), the BMW Group sold more vehicles there than ever before. On top of this, BMW was the most popular European premium brand among US customers in 2007. In total, 293,795 BMW brand cars (2006: 274,432 units, +7.1%) were sold in the United States, making it the most successful European car brand on the US market in 2007.

http://www.autospies.com/news/BMW-Sets-Worldwide-Sales-Record-26092/

So, they sell nearly 1/3 to the US. Still a major share of revenue!

[ioan]

It may be difficult to believe, but it's true. The US has been BMW's largest market for years and last I saw, they sell more cars in the US than all other markets combined.

My problem was with the 80%, but it turned out he was only talking about cars sold on credit.

I don't doubt that the US (as a country) is the biggest market for BMW given that it is the most populated country where people could afford to buy a BMW (US approx 300.000.000, Japan approx 100.000.000+ and next is Germany with 90.000.000+ inhabitants, the rest are all even smaller).

[Knock-on]

I don't doubt that the US (as a country) is the biggest market for BMW given that it is the most populated country where people could afford to buy a BMW (US approx 300.000.000, Japan approx 100.000.000+ and next is Germany with 90.000.000+ inhabitants, the rest are all even smaller).

I would say that China and India are the largest Markets for BMW, regardless of the number of cars they sell there.

[Cooper_S]

BACK ON TOPIC

The Virgin deal must be dead as it looks like it is a management buy out afterall...



Go look at Honda GP Ltd on Companies House Direct - the UK companies register

A whole load of forms 403a have been filed today, releasing the company's assets from various charges that the company's funders held.
This all suggests that the facilities have been paid off in full and means that the company would be free to sell those assets.

So In other words, something is definitely happening today and it looks like the rumour of the Management Buyout today could well be true.

http://wck2.companieshouse.gov.uk/3ae9f3d8...dorder?incexc=1 (http://wck2.companieshouse.gov.uk/3ae9f3d89c92e1352c317b45a00fabec/wcprodorder?incexc=1)

[Knock-on]

BACK ON TOPIC

:laugh:

Good try :D




The Virgin deal must be dead as it looks like it is a management buy out afterall...



Go look at Honda GP Ltd on Companies House Direct - the UK companies register

A whole load of forms 403a have been filed today, releasing the company's assets from various charges that the company's funders held.
This all suggests that the facilities have been paid off in full and means that the company would be free to sell those assets.

So In other words, something is definitely happening today and it looks like the rumour of the Management Buyout today could well be true.

http://wck2.companieshouse.gov.uk/3ae9f3d8...dorder?incexc=1 (http://wck2.companieshouse.gov.uk/3ae9f3d89c92e1352c317b45a00fabec/wcprodorder?incexc=1)

Something's happening for sure.

My hunch when Honda said recently that it could wind it up is that it was an attempt to railroad negiotiations with a prospective buyer.

I am sure there is a deal on the table but it needs a push. The deadline is TODAY for the engines.

Expect more by close of play with Honda, Mercedes and A. N. Other saying they are very pleased with the deal.

[Nikki Katz]

The CEO stated today that they may have trouble finding a buyer, might this reorganisation be part of making the assets free to sell before winding up the company/team? It does look like management buyout is the only remaining option, and nobody seems very hopeful about this.

[Tshbez]

If nothing happens, then this will be a pathetic waste of a ready-to-go Formula 1 team. They have staff, drivers, a car, an option for engine supply and good facilities. Honda are satisfied they can't keep the team because of it's finances, so why won't they just get off their high horse and let the team go for an expected non-financial gain. They turned down Ecclestone's rescue and a supposed management buyout, and for what? It just seems like they are greedily trying to get somesort of huge amount of money for it all, when that is clearly not going to happen. So it seems like we'll just lose the whole thing altogether and be left with 700 people out of a job, Button with no drive, Brawn with no job, a developed car which which never see the track and 2 less cars on the grid. It just seems like a totally annoying and needless waste. It's not so much that they can't find a buyer, more that they didn't get the seemingly impossible offer they wanted.

[Malbec]

BACK ON TOPIC
A whole load of forms 403a have been filed today, releasing the company's assets from various charges that the company's funders held.
This all suggests that the facilities have been paid off in full and means that the company would be free to sell those assets.

So In other words, something is definitely happening today and it looks like the rumour of the Management Buyout today could well be true.

So either the management buyout can take place or preparations are being made to liquidate the team...

Given all thats gone on there is nothing having precluded Virgin talking to the management buyout group to sponsor them. Bernie's being unhelpful as usual, I believe it was last week that he indicated that it would be illegal for him to take a stake in Honda F1, now he's suggesting they were mad not to take it up.

[ioan]

Someone will buy it at the last moment when the price will be the lowest possible and the conditions too.

[Knock-on]

Someone will buy it at the last moment when the price will be the lowest possible.

I think the price is for consideration; i.e. £1

The discussion will be centered around liability of debt and contracts.

Honda are NOT bankrupting their F1 team but are offloading the liability as I understand it.

[truefan72]

I would say that China and India are the largest Markets for BMW, regardless of the number of cars they sell there.

maybe in 25 years

popultaion numbers are not the key, purchasing power and discretionary income are the keys in this case.

That's why the US is 1, and Japan and Germany are close behind.

If it were simply a numbers game, you could throw in Inodnesia and Vietnam each with staggering populations as well. then Brazil, The Philippines and Nigeria to boot.

[Knock-on]

maybe in 25 years

popultaion numbers are not the key, purchasing power and discretionary income are the keys in this case.

That's why the US is 1, and Japan and Germany are close behind.

If it were simply a numbers game, you could throw in Inodnesia and Vietnam each with staggering populations as well. then Brazil, The Philippines and Nigeria to boot.

25? you're joking right.

5 Max! They are the fastest growing economies and set to explode.

As Markability says, follow the money. The US and Europe are leaking investment to the far East and Subcontinent.

How many people in America are buying New Beemers? About 0.1% of the population.

Then consider that Mercedes and BMW are seen as huge statements of wealth in China and you will understand that a very small shift in the wealth of the top 0.01% of the population there and you see why they are so important.

This and the cheap labour probably explains why they have stuck a few factories in China and India.

Sorry for going off topic again. Anything going on with Honda yet ;)

[nigelred5]

It takes a long time to sign 700 pink slips......

[ioan]

25? you're joking right.

5 Max! They are the fastest growing economies and set to explode.

You can't buy new BMW's with monthly paychecks between 100 and 200 Euros.
And I doubt that the salary will go up to almost 2000Euro in just 5 years!

[Knock-on]

You can't buy new BMW's with monthly paychecks between 100 and 200 Euros.
And I doubt that the salary will go up to almost 2000Euro in just 5 years!

ioan. I bow down to your superior knowledge.

Just one thing. Can you provide a link to where it says that the top 0.01% of the population of China earn €1-200?

I wonder what the really poor people in China earn :?:

To get you started, I dug up this.

http://www.ibtimes.com/articles/20071109/chinese-wage-increase.htm

Average urban earnings $250 showing year on year growth of 19%

Therefore, average annual earnings if using this model will be $10,140 by 2014

NOW that is average annual earnings.

As I said, I was using the top 0.01% for China as opposed to the 0.1% of Americans who purchased a new BMW last year.

Link Please

:D

(Just joking)

[ioan]

ioan. I bow down to your superior knowledge.

Just one thing. Can you provide a link to where it says that the top 0.01% of the population of China earn €1-200?

I wonder what the really poor people in China earn :?:

To get you started, I dug up this.

http://www.ibtimes.com/articles/20071109/chinese-wage-increase.htm

Average urban earnings $250 showing year on year growth of 19%

Therefore, average annual earnings if using this model will be $10,140 by 2014

NOW that is average annual earnings.

As I said, I was using the top 0.01% for China as opposed to the 0.1% of Americans who purchased a new BMW last year.

Link Please

:D

(Just joking)

What is the urban to rural ratio of Chinese population? I confess I don't know but I suppose the former ones are in the minority.

Also they can't have 19% earnings growth every year, not when the yearly economical growth seams to be already under 10%.

I come from a land where there was 9% growth last year, and many wages went up with some 25% every year in the last 4 years, still among those that are not children, disabled, jobless or retired 80% are living with wages of max 400 Euros, another 19% get close to 1000 and 1% earn more than 1000 Euros.

Even with 1000 Euros/ month you can hardly dream about buying a car that costs some 30000.

The ones who buy one are those that earn in excess of 2000 and even they will need to take up a 5-10 years credit to do so.

IMO China and India are for now the greatest markets for psuh pedal bikes and small bikes, and maybe for the new Tata mobile (can't call that a car).

They will need at least another 10-20 years of sustained economic growth to be able to claim that they can buy more BMW's than in the US.

;) :)

[Malbec]

IMO China and India are for now the greatest markets for psuh pedal bikes and small bikes, and maybe for the new Tata mobile (can't call that a car).

You're right, China isn't the largest car market in the world, its the second, and only the third largest car maker in the world just ahead of Germany but behind Japan and the USA.

Given the slump in car sales in America, it might already be the worlds largest:

http://www.ft.com/cms/s/0/fe07ae0c-f3ee-11dd-9c4b-0000779fd2ac.html?nclick_check=1

What is exciting companies like BMW about China is that 50% of all car sales are to private individuals, people who can be influenced strongly by brands.

Even if BMW has a tiny share of the market, the market itself is so large that it would make a big difference for them. They better get in quick though, the Japanese and VW have been there establishing market share for years.

[truefan72]

25? you're joking right.

5 Max! They are the fastest growing economies and set to explode.

As Markability says, follow the money. The US and Europe are leaking investment to the far East and Subcontinent.

How many people in America are buying New Beemers? About 0.1% of the population.

Then consider that Mercedes and BMW are seen as huge statements of wealth in China and you will understand that a very small shift in the wealth of the top 0.01% of the population there and you see why they are so important.

This and the cheap labor probably explains why they have stuck a few factories in China and India.

Sorry for going off topic again. Anything going on with Honda yet ;)

China may be the second largest car market in the world. but the products being sold there are mostly chines made vehicles and knockoffs of the BMW's and Audi's so much so that the German chancellor had to get involved and express dismay at the blatant copying of German cars.

It will be a long time before Chinese people will be buying BMW's at the rate that the US does. They are simply not at the point in their economy where purchasing a luxury car is seen as affordable to their "middle class"

Also their protectionism laws especially with regard to foreign cars makes it difficult to compete in that market. Only the really wealthy are able to afford a BMW, Mercedes, or Audi in that country.

China's economy has grown in a staggering amount, but the average consumer purchasing power has not matched that growth. The vast majority of their economic power is embedded in state industry, large conglomerates with heavy state influence and their ability to produce goods with a vast amount of "cheap labor". This in turn means the average Chinese is lagging far behind their economy in wealth growth as their mantra over there is sacrifice and hard work for the good of the nation.

A classic example would be the Olympic games. Where hundreds of thousands of people worked to produce incredible venues, clear up the air in Beijing, clean up the city, and build hotels, housing and infrastructure to accommodate the games. Most did not get paid, many were bused out of the capital once the job was done, there were sever penalties for not keeping on schedule resulting in many earning pennies for their work etc, etc,etc. The end result may strengthen the nation but not the individual.

The growth of an economy is not as closely correlated to the growth of individual purchasing power as you might think. The current Chinese regime will make it difficult for any foreign car manufacturer to do well in that nation.

India, while more democratic and capitalist, still levy's heavy protectionism on their car industry, with more and more Indian made cars hitting the market. It will be a long time there as well before BMW will see fit to call either of these countries a major market to which they would invest building a car plant there to satisfy the demands.

[Malbec]

China's economy has grown in a staggering amount, but the average consumer purchasing power has not matched that growth. The vast majority of their economic power is embedded in state industry, large conglomerates with heavy state influence and their ability to produce goods with a vast amount of "cheap labor". This in turn means the average Chinese is lagging far behind their economy in wealth growth as their mantra over there is sacrifice and hard work for the good of the nation.

This simply isn't true. 50% of car sales are to private individuals in China, this is a greater proportion than in the UK for example where the majority of sales are to either companies or the state. The massive rise in consumption over the past few years in China has been most marked with domestic goods, TVs, fridges etc etc. Look at the cars that are selling, most of them are passenger cars aimed at domestic users, not targeted at state industry. Again that is due to the rise of the middle class. The state is of declining importance in terms of influencing consumption.

Of course the majority of Chinese are not in a state to afford these goods let alone a car, but for China to be an important car market it only requires a small middle class.

[Knock-on]

What is the urban to rural ratio of Chinese population? I confess I don't know but I suppose the former ones are in the minority.

Also they can't have 19% earnings growth every year, not when the yearly economical growth seams to be already under 10%.

I come from a land where there was 9% growth last year, and many wages went up with some 25% every year in the last 4 years, still among those that are not children, disabled, jobless or retired 80% are living with wages of max 400 Euros, another 19% get close to 1000 and 1% earn more than 1000 Euros.

Even with 1000 Euros/ month you can hardly dream about buying a car that costs some 30000.

The ones who buy one are those that earn in excess of 2000 and even they will need to take up a 5-10 years credit to do so.

IMO China and India are for now the greatest markets for psuh pedal bikes and small bikes, and maybe for the new Tata mobile (can't call that a car).

They will need at least another 10-20 years of sustained economic growth to be able to claim that they can buy more BMW's than in the US.

;) :)

ioan

I really wish you will re-read my posts and the link provided.

I was talking about the top 0.01% of the population of China (and India for the sake of arguement)

This represents a market of 250,000 very wealthy individuals that aren't going to go hungry if they buy a new Merc or BMW.

Now, 250,000 potential customers is a significant market but shift that percentage up by a factor of 10 to 2.5m potential customers and it is compulsive. It is a fact that China, in the example I gave, is experiencing nearly 20% earnings growth up to 2007 and although there is a global slowdown, will still experience the best worldwide growth over the next 5 years IMHO.

THAT is why BMW are/has been building factories in China and India to capitalise on this opportunity.

Anyway, lesson in economics over as this really has very little to do with F1 as has been pointed out. It doesn't matter if you accept it or not.

[ioan]

It will be a long time before Chinese people will be buying BMW's at the rate that the US does. They are simply not at the point in their economy where purchasing a luxury car is seen as affordable to their "middle class"

Exactly.
I would add that they have a very long way to go until they will have a "middles class", meaning that at least 30% of the people should be part of a social class that can live a normal life by today's standards.

[ioan]

ioan

I really wish you will re-read my posts and the link provided.

I was talking about the top 0.01% of the population of China (and India for the sake of arguement)

This represents a market of 250,000 very wealthy individuals that aren't going to go hungry if they buy a new Merc or BMW.


I understand that, but what if those 250.000 people don't want a BMW but a Merc, a Porsche, a VW, and Audi, Peugeot, Citroen, Renault, Chrysler, Lexus or other high end model?!

You see, they need at least a few millions people in a wealthier middle class in order to sell the 300000+ BMW that were sold last year in the US as they will not buy only BMWs.

[555-04Q2]

I dont know about the current % of middle class Chinese, but I saw a hell of a lot of BMW's, Merc's and Audi's on my last trip to China last year.

[ioan]

I dont know about the current % of middle class Chinese, but I saw a hell of a lot of BMW's, Merc's and Audi's on my last trip to China last year.

I see plenty of them in Romania too, it doesn't mean too much though when you look to the actually sold BMW's numbers.

[K-Pu]

And I see them in Spain, and we are supposed to be knee-deep into the worst crisis ever seen... And people keep buying them because if someone has enough money, there´s no crisis which can stop you. Or at least you won´t have serious trouble.

[Knock-on]

http://news.bbc.co.uk/1/hi/business/7915443.stm

Those cheeky Chinease are getting above their station again.

I wonder what proportion of 2008 global Land Rover sales this represents ;)

[truefan72]

I dont know about the current % of middle class Chinese, but I saw a hell of a lot of BMW's, Merc's and Audi's on my last trip to China last year.

i see a ton of these cars in Nigeria and Cameroon too when I was there recently, along with Range Rovers, Hummers and the ever popular Pajero.

This does not mean that either market is prime to thes companies. It means that the few at the top have the means to buy multiple cars. And while they represent a very visible number, I very much doubt that they represent a significant percentage in total Global sales.

As a side note, did you "really" look at those cars or assumed they were BMW's and Audi's because they looked like them. China has a huge knock off problem with their domestic auto industry. Many of these cars being sold at a fraction of their original counterparts

http://www.wordplop.com/2008/05/07/chinese-knock-off-cars-maybe-you-should-just-walk-instead/

http://www.wordplop.com/wp-content/uploads/2008/05/chinacars.jpg

http://www.monsterauto.ca/chinese-cars.php
Shuanghuan CEO is a look a like to the BMW X5
http://www.monsterauto.ca/images/Picture-for-2.jpg

BYD f8 vs Mercedes Benz CLK
http://www.monsterauto.ca/images/Picture-for-5.jpg

[truefan72]

This simply isn't true. 50% of car sales are to private individuals in China, this is a greater proportion than in the UK for example where the majority of sales are to either companies or the state. The massive rise in consumption over the past few years in China has been most marked with domestic goods, TVs, fridges etc etc. Look at the cars that are selling, most of them are passenger cars aimed at domestic users, not targeted at state industry. Again that is due to the rise of the middle class. The state is of declining importance in terms of influencing consumption.

Of course the majority of Chinese are not in a state to afford these goods let alone a car, but for China to be an important car market it only requires a small middle class.

of that 50% I would guess that 90% were purchases of chinese made cars averaging around $5,000 per car, which is what a good Mercedes knock off is being valued for. As I said purchasing powers and brand purchase tells a better story than raw statistics.

[Malbec]

I understand that, but what if those 250.000 people don't want a BMW but a Merc, a Porsche, a VW, and Audi, Peugeot, Citroen, Renault, Chrysler, Lexus or other high end model?!

Exactly. Got to capture the market and establish your brand while its growing, otherwise it'll go to someone else. Thats why people like BMW have to put the effort in now. No point entering when its a mature market and fight an uphill battle, just look at the effort Lexus and Infiniti are making to capture only a tiny market share in one of the maturest markets of all, Europe.


You see, they need at least a few millions people in a wealthier middle class in order to sell the 300000+ BMW that were sold last year in the US as they will not buy only BMWs.

I'm a bit surprised by the lack of knowledge about China and its middle class. As a proportion of the population they are not large, say 10-20%, equal to the total population of the UK and France combined. They are affluent, purchasing LCD TVs, mobile phones, private education for their kids. Their purchasing power on an international standard is currently not high and in most cases unable to stretch to a BMW or Merc, but they are currently buying Civics and Camrys instead. It really wouldn't take much time before they can stretch to buying BMWs in significant numbers though, probably not even a decade.

I don't believe anyone is suggesting that China is currently a big BMW market, just that it is the biggest potential market and one that BMW is concentrating on very hard (along with other makers).

Think about it like this. What is the maximum feasible percentage increase in sales over the next two decades BMW can expect in the US or Europe? Now what is the probable increase in sales BMW can expect in China or India?

Anyway, looks like this thread is coming to a close now as Virgin doesn't look interested in Honda, Reynard is nowhere to be seen and it looks like Brawn is leading a management buyout.

[Malbec]

I understand that, but what if those 250.000 people don't want a BMW but a Merc, a Porsche, a VW, and Audi, Peugeot, Citroen, Renault, Chrysler, Lexus or other high end model?!

Exactly. Got to capture the market and establish your brand while its growing, otherwise it'll go to someone else. Thats why people like BMW have to put the effort in now. No point entering when its a mature market and fight an uphill battle, just look at the effort Lexus and Infiniti are making to capture only a tiny market share in one of the maturest markets of all, Europe.


You see, they need at least a few millions people in a wealthier middle class in order to sell the 300000+ BMW that were sold last year in the US as they will not buy only BMWs.

I'm a bit surprised by the lack of knowledge about China and its middle class. As a proportion of the population they are not large, say 10-20%, equal to the total population of the UK and France combined. They are affluent, purchasing LCD TVs, mobile phones, private education for their kids. Their purchasing power on an international standard is currently not high and in most cases unable to stretch to a BMW or Merc, but they are currently buying Civics and Camrys instead. It really wouldn't take much time before they can stretch to buying BMWs in significant numbers though, probably not even a decade. Imagine a middle class as numerous as two large European countries as a virgin market for BMW?

I don't believe anyone is suggesting that China is currently a big BMW market, just that it is the biggest potential market and one that BMW is concentrating on very hard (along with other makers).

Think about it like this. What is the maximum feasible percentage increase in sales over the next two decades BMW can expect in the US or Europe? Now what is the probable increase in sales BMW can expect in China or India?

Anyway, looks like this thread is coming to a close now as Virgin doesn't look interested in Honda, Reynard is nowhere to be seen and it looks like Brawn is leading a management buyout.

[truefan72]

Exactly. Got to capture the market and establish your brand while its growing, otherwise it'll go to someone else. Thats why people like BMW have to put the effort in now. No point entering when its a mature market and fight an uphill battle, just look at the effort Lexus and Infiniti are making to capture only a tiny market share in one of the maturest markets of all, Europe.



I'm a bit surprised by the lack of knowledge about China and its middle class. As a proportion of the population they are not large, say 10-20%, equal to the total population of the UK and France combined. They are affluent, purchasing LCD TVs, mobile phones, private education for their kids. Their purchasing power on an international standard is currently not high and in most cases unable to stretch to a BMW or Merc, but they are currently buying Civics and Camrys instead. It really wouldn't take much time before they can stretch to buying BMWs in significant numbers though, probably not even a decade. Imagine a middle class as numerous as two large European countries as a virgin market for BMW?

I don't believe anyone is suggesting that China is currently a big BMW market, just that it is the biggest potential market and one that BMW is concentrating on very hard (along with other makers).

Think about it like this. What is the maximum feasible percentage increase in sales over the next two decades BMW can expect in the US or Europe? Now what is the probable increase in sales BMW can expect in China or India?

Anyway, looks like this thread is coming to a close now as Virgin doesn't look interested in Honda, Reynard is nowhere to be seen and it looks like Brawn is leading a management buyout.

This just anwswers my point a while back to both yo and knock-on that China. and india as still 20-25 years away from becoming dominant luxury car markets. Just not today, and not in the next few years