EoW July 2008

The survey, conducted in Spanish by the Washington-based bank from 9 th to 23 rd February, drew on information collected from 5,000 interviews. Of the immigrants responding, 47% said they did not have legal status; the others were US citizens and legal immigrants.

Automotive

Volkswagen AG has said it will make an announcement this summer on whether or ❈ ❈ not to build a new US production facility. If it does decide to go ahead, the German auto maker will site the plant in either Alabama, Michigan, or Tennessee. Production would start within the next two years, with initial output of 100,000 to 150,000 annually and expansion to a maximum of 250,000 vehicles. Company officials have said the first car would likely be a replacement for the Passat passenger sedan designed for the US market. Volkswagen is the world’s fourth-largest auto maker but commands only 2% of the US market. Earlier this year, Stefan Jacoby, the president and chief executive of Volkswagen Group of America, said the company hopes to more than triple its sales in the US to a million cars a year by 2018. Volkswagen recently moved its North American headquarters from suburban Detroit to Herndon, Virginia, outside Washington, to be closer to its East Coast customer base. Ford Motor Co plans to add 1,500 workers at a factory in Russia to increase its ❈ ❈ production in that country by almost 75%. A Ford spokeswoman in Moscow told Bloomberg News (22 nd April) that the US company will increase capacity at the Vsevolozhsk plant near St Petersburg to 125,000 vehicles next year. The factory produces the Ford Focus hatchback, Russia’s best-selling foreign-brand car in 2007, and will start making the midsize Mondeo this year, she said. General Motors Corp cited the slowdown in the US market for its 1% loss in ❈ ❈ first-quarter sales, a performance that placed the American auto giant behind its Japanese rival Toyota by about 160,000 vehicles. Toyota sold 2.41 million vehicles in the period – for a 2.7% increase over fourth-quarter 2007 – to GM’s 2.25 million. Toyota outsold GM in the first quarter of 2007, too, but its full-year sales trailed GM’s by about 3,100 vehicles. If, this year, GM retains its 76-year-old title as the world’s largest auto maker, it will have foreign auto buyers to thank. In the first quarter, 64% of GM’s total sales were made outside the US, the most ever. The company’s sales grew 78% in Russia and 58% in India. North America was the only region in which GM did not set a sales record.

The economy

Exports stave off contraction – barely – in a first quarter of anaemic economic growth

The Commerce Department on 30 th April reported that the US economy expanded at an annualised rate of only 0.6% over the first three months of the year, reflecting the increasingly pinchpenny ways of the average consumer in a period of sinking real estate values, tightening credit, and a deteriorating job market. Consumer spending grew at a miserable 1% annualised rate for the quarter, down from 2.9% the year before and 3.1% in 2006. The economy was kept from contraction only by growth in exports – helped by a weakening dollar – and a buildup of inventories by businesses. Excluding these positive factors, domestic sales of goods and services dropped at an annualised rate of 0.4% in inflation-adjusted terms, the first quarterly decline since the end of 1991. Economic growth was also retarded by the continuing shrinkage in construction and business investment. Even the good news about higher inventories came with a cautionary note. Business must improve quickly, and stockpiled goods move out of factories, if companies are not to lay off more workers and take even more discretionary income out of an economy already short of free-spenders.

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EuroWire – July 2008