GM’s Prototype Pick Up Truck

While browsing data on ShippingSpy.com I came across an interesting listing. A few months ago General Motors received a shipment of a prototype vehicle. What caught my attention were the vehicle details. The listing said in part:

• VEHICLE WITH CAMOUFLAGE
• PROTOTYPE PICK UP
• CREW CAB
• COLOR: BLACK
• 3.6L V6 GASOLINE ENGINE
• 4 WHEEL DRIVE
• AUTOMATIC TRANSMISSION
• AIR CONDITIONER
• LEATHER SEATS
• CRUISE CONTROL
• CD MP3 WMA PLAYER WITH BLUETOOTH

I was not familiar with a GM crew cab truck offering a 3.6L V6 and 4 wheel drive, although the powertrain sounds similar to the 2012 Cadillac SRX. The SRX’s 3.6L direct-injected V6 engine expected to deliver 300 horsepower and 260 lb/ft of torque. 

Perhaps this could be a concept test vehicle for the new Chevrolet Colorado. However, Chevrolet’s announced power plant for the 2012 Colorado does not include a 3.6L V6.  

 

The Dodge Dakota comes standard with a 3.7L Magnum V6 engine producing 210 horsepower and 235 lb/ft of torque. Meanwhile, the new Ford Ranger is powered by a new 3.2L, Ford Duratorq TDCi I5 diesel engine that produces 198 horsepower and 346 lb/ft of torque. If this is a concept vehicle of the Colorado the powertrain option would help Chevrolet stand out from the competition.

The Made in China label

The Federal Reserve Bank of San Francisco released a report earlier this month. A total of 88.5% of U.S. consumer spending is on items made in the United States. This means that only 11.5% of spending goes for goods and services produced abroad. What share does “Made in China” items make up? Surprisingly, only 2.7% of consumer spending is on items made in China.

Although goods labeled “Made in China” make up 2.7% of U.S. consumer spending; only 1.2% actually reflects the cost of the imported merchandise. For U.S. companies this represents higher retail and wholesale margins. For the consumer it means for every dollar spent 55 cents goes towards a service produced in the USA.

Trade Relations in a Changing Market

On August 6th 2011, ratings agency Standard & Poor’s cut the U.S. credit rating from AAA to AA+. This is the first time such a downgrade has ever happened for the United States. Will this affect trade relations with other countries?

Conflicting Data
 Zhou Dewen, president of the Wenzhou SME Development Association, told the 21st Century Business Herald “China’s small and medium-sized enterprises (SMEs) are facing order cancellations after the U.S. had its credit rating downgraded”. However, official and industry data paint a conflicting picture.

China’s National Bureau of Statistics (NBS) and China’s Ministry of Industry and Information Technology acknowledge that SMEs are facing some challenges in their operations, yet believe the overall business environment is still positive.

The China Federation of Logistics & Purchasing (CFLP) data shows that as of July 2011, the Purchasing Managers Index for SMEs has been below its critical point for 3 consecutive months. Conversely, the NBS reports second quarter 2011 showed the SME climate index rose.

Real World Account
According to data from ShippingSpy.com, Chinese based company Sungju Sound has increased exports to the United States. One year of history from July 2011 is up 24% over the same time a year prior.  Choi Yun Kil, president of Sungju Sound, said “We have been focusing not only on sales but also on developing new models according to a rapid market change and demand”.

There are many factors with international trade; the credit downgrade, sluggish economy, and U.S. dollar inflation all affect commerce. Perhaps only time will tell if the credit downgrade will impact individual companies.

Japans Imports/Exports Post Quake

Japan’s earthquake and subsequent tsunami March 11th 2011 transformed more than just the entire face of the landscape. Prior to the disaster shipments from Japan made up 15% of traffic in the port of Los Angeles. Now the country’s absence is obvious.

Exports to Japan have also have dropped. After the tragedy power outages and physical damage has dramatically reduced the refrigeration capacity at many northern ports. Fresh fruit had been a large export from the U.S. to Japan. Some of these shipments have been diverted to other ports while many perishable shipments have been canceled all together.

Other Asian nations have also been impacted from the lack of exports from Japan. Primarily the impacts are from the inability to get automotive and other digital components. Countries like Taiwan, South Korea, and Thailand use these automotive parts in their manufacturing services. All Asian nations can expect to experience the ripple effects from the Japanese trouble.