xfdiw BLOOMBERG-TV-06
<Show: BLOOMBERG TV>
<Date: October 12, 2009>
<Time: 19:17:00>
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<Tran: 101206cb.550>
<Type: SHOW>
<Head: Klaus Paur, TNS Director, on Bloomberg TV>
<Sect: News; International>
<Byline: Bernie Lo>
<Guest: Klaus Paur>
<High: Klaus Paur, TNS Director, on Bloomberg TV talking about the
sale of Hummer to a Chinese company>
<Spec: Car Market, China, Hummer, GM>
KLAUS PAUR, TNS DIRECTOR, ON BLOOMBERG TVOCTOBER 12, 2009
SPEAKERS: KLAUS PAUR, DIRECTOR, TNS
BERNIE LO, BLOOMBERG NEWS
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
19:17
BERNIE LO, BLOOMBERG NEWS: Klaus, good morning to you. This deal, is it going to work? They have been talking about it for a long time. Is it the right thing, the right product and the right time for China?
KLAUS PAUR, DIRECTOR, TNS: Well, good morning. Yes, I think that it is, in any case, a very interesting deal, and I think it permits the Hummer brand to continue to live. I think it is a good time because there are a lot of challenges in the auto market, and for China, it is the opportunity to show that they are able to provide vehicles that are demanded in the market, and I think it is definitely a good thing for China to move forward in this direction.
LO: Is there a demand for these vehicles, though? They went to bring it beyond the American borders and basically internationalize the brands.
PAUR: Yes, because at the moment it is mainly in the U.S., you are right, and for the moment it will stay, certainly, in the U.S., because production will continue there until 2011 at least, but the plan is that they are internationalizing the brand, and ultimately they will certainly bring it also into the Chinese market. But in order to do so, there are still some hurdles to overcome. The vehicles have to be adapted for the Chinese market. We still need, obviously, the approval of the Chinese government. But in the long term, it could work out, and in the long term, it could be indeed an interesting activity that we see with (inaudible).
LO: The one thing that the China, that the health of the car market in China depends on is continued stimulus. When that ends what's going to happen? Will the market take on a life of its own? Or will we see sort of a Chinese repeat of the cash for clunkers in the U.S.?
PAUR: No, in the Chinese market, it roars at the moment, and the sales are surging, and this was triggered by the government incentives. But this was mainly due to the fact that we had some purchase tax cuts for the low displacement engines. You must not forget get Chinese, or the china car market is a first-time buyer market. So, 70 percent of people buying cars buy cars for the first time in their life. So what we have seen is this stimulus program has not only given cash advantage for the buyers, but also given back confidence to their behavior, andn this is what the market is picking up now, also in the higher displacement engine market. But the Hummer brand, in any case this is a niche market, we talked about vehicles with more than the four-liter engine displacement. And this will remain a niche market and not a mass market.
LO: Okay, vehicle sales were up over 100 percent in September. Does that mark the high point, or is there enough thrust in the momentum right now to keep this kind of sales rally going Klaus?
PAUR: Yes, what we have observed is from the beginning of the year when the stimulus program has been introduced, monthly sales and monthly growth have been really skyrocketing, certainly also compared to the fact that in the same time last year the sales went down. So again what we have at the moment is that the -
LO: Okay, Klaus, I think we had a little glitch, or gremlin in the system there. But Klaus Paur, TNS is joining us there from Shanghai.
11:20
END OF TRANSCRIPT
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