The following press releases and media reports about Chinese companies were carried on July 17. To view a full article or story, click on the link next to the headline.
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Tesla (Nasdaq: TSLA) Unveils New Model X, to Go on Sale in China Next Year (Chinese article)
Bottom line: A negative tale from Chongqing spotlights the challenges Tesla faces in China due to lack of infrastructure, while a big taxi fleet order in Wuhan offers a possible new route for the company to jump-start its Chinese sales.
Tesla taxis hit road in Wuhan
Sputtering new energy car maker Tesla (Nasdaq: TSLA) is in a couple of new China headlines, scoring a big order in the central city of Wuhan and an embarrassing bit of negative publicity in the southwest city of Chongqing. Watchers of the company and its difficult road into China might recall it was exactly a year ago that Tesla’s charismatic founder Elon Musk made a high profile visit to the country to hand over the keys for its first official sale to a local customer.
That event happened on the sidelines of China’s largest annual auto show, which rotates between Beijing and Shanghai and has become a major global event due to the country’s status as the world’s largest auto market. But in a testimony to the challenges Tesla has faced since that hype-filled day, Musk failed to appear at any public events during this year’s show that has been happening all week in Shanghai. Read Full Post…
Bottom line: Tesla’s China reboot appears to be complete, paving the way for it to gain some traction in the market by year end if it can effectively target the nation’s wealthy, image-conscious trend setters.
Tesla finishes China reboot
Nearly a year after driving into China on a wave of fanfare and big hopes, electric vehicle (EV) superstar Tesla (Nasdaq: TSLA) is pressing the reset button on a market that has huge potential but also some major obstacles. This particular reset has been in the works for the last few months, but appears to be near completion with indications that the company has discarded its previous short-term aggressive sales targets for the market.
The reboot to Tesla’s China business is discussed in a series of interviews by Zhao Kuiming, its head of China sales, who was on a PR offensive following the recent overhaul. (Chinese article) It’s unclear from the reports if Zhao is new to Tesla, but he appears to be the company’s new public face after previous China President Veronica Wu resigned in December after just 9 months on the job. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 28-30. To view a full article or story, click on the link next to the headline.
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HP (NYSE: HPQ) To Sell 51 Pct Of H3C Unit To Tsinghua Unigroup, Seeks $5 Bln (Chinese article)
Geely (HKEx: 175) Invests 250 Mln Pounds On British New Energy Taxi Plant (Chinese article)
Gome (HKEx: 493) To Open 100,000 Microstores On WeChat (English article)
China Construction Bank (HKEx: 939) Announces Annual 2014 Results (HKEx announcement)
Telsa (Nasdaq: TSLA) To Localize Production In China In 3 Years: Elon Musk (English article)
The following press releases and media reports about Chinese companies were carried on March 27. To view a full article or story, click on the link next to the headline.
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US Questions China At WTO On Banking Technology Restrictions (English article)
Tesla (Nasdaq: TSLA) Completes China Overhaul, No Short-Term Sales Targets (Chinese article)
Bottom line: China job cuts at GSK and Tesla reflect broader adjustments that major multinationals are making as Beijing cleans up its business climate and fails to meet many of its aggressive targets for new sectors.
GSK, Tesla take tough medicine with job cuts
Two high-profile multinationals are slimming down in China, with word that British drug giant GlaxoSmithKline (London: GSK) and US electric car superstar Tesla (Nasdaq: TSLA) have both made major job cuts to their local operations. Both cases acknowledge the difficulties of navigating the tricky China market, which superficially looks quite large and full of potential but in reality is quite fraught with obstacles.
Despite their differences, these 2 cases actually share some fundamental similarities based on unrealistic expectations many foreign firms have when they come to China. GSK’s woes stem from a bribery scandal that dates back almost 2 years, in which Beijing exposed and later punished the company for systematically bribing doctors and other medical professionals to purchase its drugs. Such practice is common in China, but Beijing is trying to clean up the business landscape. Read Full Post…
Bottom line: Tesla’s weak China performance owes mostly to its lackluster marketing to wealthy, status-conscious Chinese car fanatics, but its situation could quickly improve if it finds a new marketing-savvy country head.
Tesla looks for China jump-start
After roaring into China last year on a wave of hugely positive publicity, electric car superstar Tesla (Nasdaq: TSLA) has rapidly lost momentum and now appears on the cusp of a major overhaul in a bid to jump-start its prospects. This kind of development isn’t hard to understand, as Tesla’s charismatic CEO Elon Musk set the bar incredibly high when he sold his company’s first electric vehicle (EV) in China last April.
One of Musk’s and Tesla’s obstacles has been Chinese consumer reluctance to buy EVs, despite Beijing’s strong desire to promote the clean technology. But Tesla’s target market was never really the mainstream consumer anyhow, and instead Musk was pursuing wealthy, status-conscious people who like to be first adopters of trendy new technologies. In that regard, Tesla’s marketing efforts have also sputtered despite Musk’s strong launch for his brand in China last year. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 11. To view a full article or story, click on the link next to the headline.
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Dalian Wanda To Buy Swiss Sports Firm For $1.2 Bln Amid Entertainment Push (English article)
Tesla (Nasdaq: TSLA) CEO Threatens Firings After Dismal China Sales – Sources (English article)
Bottom line: Emerging details are giving more credibility to LeTV’s new electric car initiative, while solar shares look oversold on plunging oil prices and should rebound later this year.
LeTV soars on new EV details
Mixed signals are coming from China’s green energy sector, where a newly turbocharged LeTV (Shenzhen: 300104) is getting a lift on details about its new electric car initiative that includes ties to a technology supplier of US superstar Tesla (Nasdaq: TSLA). But solar panel makers are moving in the opposite direction, with shares of several reaching or approaching all-time lows over concerns that demand will plummet due to low oi prices. I seldom give direct stock buying advice, but in this case I honestly don’t understand the reasons for this sudden plunge and would strongly consider buying some of these shares that seem quite undervalued right now. Read Full Post…
Bottom line: Traditional car makers will suffer from weak sales growth and plunging margins in China in 2015 and into 2016, while EV makers will start the new year slow but could see improvement by the end of 2015.
Toyota to miss 2014 target
A flurry of headlines this week are sending ominous signals for the car industry in the year ahead, with both traditional and new energy vehicle makers likely to face an uphill road as China’s economy slows. The problem could be compounded as big new capacity comes online from many major automakers that have invested billions of dollars on expansion over the last 3 years. Other headwinds could come as major cities take steps to ease traffic congestion, with the southern boomtown of Shenzhen becoming the latest to implement a new program to control the number of cars on the road. Read Full Post…
Bottom line: Tesla and other EV makers are likely to face an uphill road in China for the next year, but prospects could start to improve in mid 2015 as new initiatives gain momentum.
Tesla launches trade-in program
Reports on a new trade-in promotion from Tesla (Nasdaq: TSLA) are adding fuel to talk earlier this month that the high-flying electric vehicle (EV) maker isn’t doing as well as hoped in China, where sales have gotten off to a slow start. This kind of a sluggish start isn’t too unexpected, since EVs are rare in China and face many obstacles despite a strong push by Beijing to boost the sector. Tesla should be commended for its numerous efforts to promote EV development in China through a wide range of initiatives, but is also largely to blame for the building disappointment after it built up huge expectations for itself in the market. Read Full Post…
