Mexican recovery surging At presstime, Mexico announced that its economy had grown by 8.8% in the second quarter over the same period last year. Reaching this milestone -- the highest quarterly jump since 1981 -- points to a broad recovery under way. Heartened by the news, many economists now predict the nation's economy for the year will surge by 6%. Mexico has been on the road to recovery since devaluation of the peso in late 1994 led to a severe currency crisis. The economic rebound was initially fueled by exports. However, the new figures indicate that Mexican consumers have become confident enough to begin spending again. Much of the credit for the gain in growth is being awarded to the Mexican government's attempts to increase foreign investment and decrease state control of the economy.
Hands across the border Only a few years after NAFTA was implemented, U.S. Customs has finally proposed to "liberalize" its cabotage rules affecting foreign-based equipment used to move freight across the U.S.-Canadian border. For the past three years, American and Canadian trucking associations have campaigned for the changes. Liberalization is expected to be accomplished by "reinterpreting" existing regulations. As a result, repositioning or movement of foreign-based equipment (without a payload) will not be considered a domestic move. Also, the nature of a shipment will be determined by its origin and destination -- not by the point-to-point movement of the vehicle. According to the American Trucking Assns., CanadaCustoms has indicated it would adopt similar interpretations to become effective once U.S. Customs takes final action on the proposed changes.
Money talks The recent name change to Volvo Trucks North America reflects increased investment in the Greensboro, N.C.-based OEM by its Swedish parent. However, terms of the agreement that shifted the final shares in the venture held by General Motors Corp. to Volvo Truck Corp. were not disclosed... On the other side of the pond, the European Union Commission is looking into millions of kroner worth of subsidies granted to Volvo Truck by the Swedish government between 1995 and 1997. The commission believes such aid should not be extended since it "constitutes an ongoing, undue operational advantage." If the commission rules it, Volvo will have to repay the funds to Sweden... Meanwhile, Volvo Trucks' chief executive, Karl-Erling Trogen, expects the European truck market to weaken this year, thanks to "hardening competition with increasing price pressure in Germany, France, and the U.K. He said Volvo will deliver 165,000 to 170,000 trucks on the continent this year and noted that "losses in our U.S. operations are still pressuring earnings."
GM launches Thai pickup According to General Motors Corp., sales of its first pickup truck in Thailand should reach 5,000 units this year alone. The truck, dubbed the Campo, will be built by Japan's Isuzu Motors Ltd., 37.5% of which is held by GM. It is estimated that the Campo will account for 75% of GM's automobile sales in Thailand, a market that has been hard hit by national economic woes.
Hankook expands overseas Seoul, Korea-based Hankook Tire Co. is increasing its presence in foreign markets, especially in Europe and South America, as it pursues its goal of becoming a "top-five industry leader." In addition to opening a new branch in Warsaw, the manufacturer has upgraded its Milan office to a subsidiary bearing the name Hankook Tire Italy S.R.L. The company said the change in status will raise its level of marketing activities, expand its customer services, and strengthen its distribution organization in Italy. The tire maker operates two other subsidiaries and three other branch offices on the continent, and plans to set up an R&D center in Germany sometime this year. On this side of the Atlantic, Hankook has established a new office in Mexico. Its South American activities also include operations based in Brazil and Panama.
All roads lead to... Japan's Hino Motors Ltd. and Sumitomo Corp. are planning a joint venture with Indonesia's Salim Group to build and sell commercial trucks in Indonesia. A plant, to be set up outside Jakarta, will start cranking out trucks next fall. The joint venture expects to produce about 5,000 vehicles a year... The People's Republic of China has given Eaton Corp. its blessing to make heavy-duty truck transmissions in Shanghai for the Asia-Pacific market. Eaton Truck and Bus Components (Shanghai) Co. Ltd. will produce Eaton Fuller 10-, 13, and 18-speed gearboxes for OEMs in Australia, China, Japan, Korea, and elsewhere. Production, to begin early next year, is projected to reach over 24,000 units by 2008... Japanese OEM Mazda Motor Corp. and its 33.4% partner, Ford Motor Co., are reportedly aiming to increase their joint development of trucks for the Asia-Pacific region, as well as to rework their cooperative pass-car efforts in North America... Detroit Diesel Corp. is expected to crank up a new diesel engine assembly operation in Brazil by January. Detroit Diesel Motores do Brasil will assemble 4-, 5-, and 6-cyl. diesels for South American and export markets, including Chrysler plants in Argentina, Brazil, and Toledo, Ohio... And reports indicate Paccar will invest some $10 million to build a Kenworth parts distribution facility in San Luis Potosi, Mexico.
The glue didn't stick Great Britain's Burmah Castrol oil company plans to sell its U.S.-based adhesives operation, Columbia Cement, to TACC International of Rockland, Mass. The agreement reflects the British firm's recent decision to exit the adhesives market.