Lexus to lose top spot in U.S. luxury car market

2011 Lexus RX 450h

CHICAGO, July 8, 2011 - Toyota Motor Corp's brand Lexus will end its streak of 11 years as the top luxury brand in the U.S. market due to lost sales in the aftermath of the Japan earthquake and tsunami, said Mark Templin, Lexus Division general manager.


Templin said Lexus U.S. sales will fall about 17 percent to around 190,000 vehicles in 2011.

The United States is the biggest market for Lexus.

All Lexus models, except the RX 350 crossover sport utility vehicle, are made in Japan.

Templin said the Cambridge, Ontario plant that makes the RX 350 will be back at full capacity in September.

Most Japanese plants assembling Lexus models have already returned to full strength.

However, the RX 450h hybrid SUV will not be at full production until October. The hybrid is typically 15 percent to 20 percent of RX sales in the U.S. market.

Lexus U.S. sales fell 38 percent in June as dealers ran out of key products. At the end of the month, dealers had about half their normal stock.

"June was the bottom of the trough, and we've turned the corner. We see the rest of the year being much better for us," Templin said, speaking to reporters at a Lexus media event in Chicago.

Lexus sales tumbled 18 percent in the first half of 2011 to 88,010, and German rivals BMW and Daimler AG's (DAIGn.DE) Mercedes-Benz sprinted by.

BMW's sales rose 13 percent to 113,705, and Mercedes-Benz climbed 7 percent to 110,926. If 2011 full year results end as expected, it would be the first time that BMW has outsold Lexus in the U.S. since 1997.

Templin shrugged off the significance of losing the luxury sales crown, and when asked if Lexus could reclaim the top spot in 2012, he said.

"Whether we're No. 1 or not, I don't care. We've never focused on that. We won't change our plan midyear because someone else is selling more cars than us."

BUICK SYNDROME?

Industry analyst Aaron Bragman of IHS Automotive Insight said on Friday the slump at Lexus goes deeper than a shortage of vehicles. He suggested that Lexus could suffer from the same stigma as did General Motors Co's Buick brand for the past several decades: old people's car.

Bragman said it would be "quite a challenge" for Lexus to reclaim No. 1 in luxury sales in 2012 even with full production because its lineup is not as alluring as it once was and it relies heavily on two models, the RX 350 and ES 350 sedan, a spinoff of the Toyota Camry.

The RX so far this year accounts for 45 percent of Lexus U.S. sales and the ES sedan 19 percent.

"Like Toyota, they've lost their momentum. They have an aging buyer base, and a lot of their dealers are afraid they will become the next Buick. Their new products haven't resonated with younger buyers."

The median buyer age for Lexus is in the mid-50s, and Templin said he is comfortable with that because it is a result of high loyalty.

Sportier models such as the IS sedan and CT hybrid sedan are attracting younger owners, said Templin.

[Source : RUETERS]

Chrysler prepares to build small car that may increase Fiat stake

DETROIT : June 24, 2011 - Chrysler Group LLC said it plans to begin test production in the second half of this year of the small car that will trigger U.S. government requirements to increase Fiat SpA (F)’s ownership stake.


Tooling for the small Dodge brand car goes into Chrysler’s Belvidere, Illinois, assembly plant in August, Fred Goedtel, head of Chrysler’s assembly operations, said in an interview this week in Sterling Heights, Michigan.

“We’ll start pilots in the fall” and official production begins “sometime” in the first quarter, he said.

Design work on the car, which is the vehicle Chrysler expects will trigger the final government ownership milestone, is done, Ralph Gilles, head of Chrysler design, said in an interview in Chelsea, Michigan, yesterday. “The company is really focused on it,” he said of the vehicle.

Turin, Italy-based Fiat is consolidating control over Chrysler. Fiat is buying the U.S. Treasury Department’s final stake in the U.S. automaker, acquired as part of Chrysler’s 2009 bankruptcy reorganization. That purchase will raise Fiat’s stake to 52 percent on a fully diluted basis. Chrysler must test and commit to building a vehicle in the U.S. that achieves 40 mpg to gain another 5 percent stake.

Its deal with the U.S. and Canada allowed Fiat to gain as much as 35 percent in Chrysler without paying cash in exchange for giving management experience and technology to Chrysler and achieving various performance milestones. The 40 mpg vehicle is the final such milestone.

Fiat also exercised an option to purchase 16 percent of the Auburn Hills, Michigan-based company after Chrysler repaid the U.S. and Canadian government loans in May.
Sergio Marchionne, chief executive officer of both automakers, has said he expects Fiat will get its final 5 percent tied to the 40 mpg car by year’s end. The small Dodge car is being based on Fiat’s Alfa Romeo Giulietta technology, Marchionne has said.

Gilles said the new Dodge model’s name was decided earlier this week. He declined to provide the name.

[Source : BLOOMBERG]

Mazda to jointly establish vehicle production facility in Mexico and Sales company in Brazil with Sumitomo

2011 Mazda 3 Facelifted with SkyActiv Engine

HIROSHIMA, Japan : June 17, 2011 — Mazda Motor Corporation today announced that it has signed formal agreements and begun preparations to establish a Mazda vehicle production facility in Mexico and a sales company in Brazil, in alliance with Sumitomo Corporation. Through the new joint ventures, Mazda and Sumitomo intend to combine their individual strengths in order to enhance both companies' business in the rapidly growing Central and South American markets.


The Mexico production facility will be established as a compact vehicle manufacturing hub mainly for Central and South America, and will include both vehicle and engine assembly plants. It will be constructed in Salamanca city, Guanajuato state, 250 kilometers northwest of Mexico City. Mazda and Sumitomo plan to commence operations in the fiscal year 2013 (April 2013 to March 2014) with an annual production capacity of 140,000 units. The facility will produce Mazda2 (Mazda Demio in Japan) and Mazda3 (Mazda Axela in Japan) models.

The Brazilian sales company will begin operations in the fiscal year 2012 (April 2012 to March 2013), before the production plant in Mexico is completed, and will initially sell vehicles imported from Japan. When the Mexico facility becomes operational, it will also sell vehicles shipped from Mexico.

Between 2005 and 2010, new car demand in Brazil doubled to approximately 3.5 million units. Currently, Brazil is the world's fourth largest automobile market following China, the United States and Japan.

Takashi Yamanouchi, Mazda's Representative Director, Chairman of the Board, President and CEO, said, "Since Mazda entered the Mexican market in October 2005, our sales results have steadily improved, and in 2010 we set a new record for both sales volume and market share. Building on this success, and by leveraging Sumitomo Corporation's extensive experience and knowledge of emerging markets, we will continue to strengthen our business in Mexico and throughout Central and South America, including the rapidly growing Brazilian market. These initiatives are part of Mazda's plans to achieve its mid- to long-term goals for emerging markets."

In accordance with the agreements, Sumitomo and Mazda plan to establish the local joint venture companies as follows:

Production company outline

• Company name : Mazda Motor Manufacturing de Mexico S.A. de C.V.
• Head office : Salamanca city, Guanajuato state, Mexico
• Investment : 500 million dollars
• Investment ratio : 70% Mazda, 30% Sumitomo
• Business outline : Manufacture and sale of Mazda vehicles and parts
• No. of employees (at full capacity) : approx. 3,000

Sales company outline

• Company name : Mazda Motor do Brasil Limitada
• Head office : Sao Paulo, Brazil
• Investment ratio : 70% Mazda, 30% Sumitomo
• Business outline : Import and sale of Mazda vehicles and parts

[Source : MAZDA]

Nissan and Mitsubishi Motors sign contract for establishment of joint venture for minicar business

YOKOHAMA/TOKYO : May 20, 2011 - Nissan Motor Co., Ltd. and Mitsubishi Motors Corporation today announced that the two companies signed a contract for the establishment of a joint venture related to their minicar business in the Japanese market. The establishment of the joint venture was part of an agreement signed in December 2010 to expand the scope of cooperation between the two companies. The two companies will strengthen their competitiveness in the minicar business through this joint venture.


[Outline of New Joint Venture]

• Date contract agreement : May 19, 2011
• Date of establishment : June 1, 2011 (Planned date)
• Capital : 10 million yen

Capital structure:

• Nissan Motor Co., Ltd. : 50%
• Mitsubishi Motors Corporation : 50%
• Business description : Product planning and engineering of minicars for the Japanese market

Main board members:

• CEO (Chief Executive Officer): Junichi Endo
• COO (Chief Operating Officer): Shinichi Kurihara

[Source : NISSAN, MITSUBISHI]

Spyker Pays $74 Million for Saab

SAAB plant in Trollhattan, Sweden

• Other new products in the pipeline are the 9-4X, which will be built by GM
• GM will also continue to produce powertrain components for other new Saab models
• Previous Chinese deal involves old technology/designs

AMSTERDAM - January 27, 2010 : Spyker reached a deal Tuesday night (GMT) with General Motors for the take over of Saab. Tuesday morning I spoke to Victor Muller, CEO of the Dutch sports car manufacturer, who by that time could only say that he was in Stockholm and that there was “no deal yet”. ”So much has happened after we last spoke each other at the LA Auto Show in December…”, Muller said


After the news broke, Muller later said in a telephone interview with a Dutch late night show that he was exhausted after five days negotiations and little sleep.

In a press release, Spyker says that the deal will probably be official next month. By that day, $50 million will be payable, the other $24 million will be paid by Spyker on July 15.

Part of the agreement is that Saab remains an independent car manufacturer and that the dismantling of Saab, that GM initiated in December, will be stopped immediately.

Spyker gets all shares of Saab Automobile A.B., as well as ownership of the Trollhättan plant. GM will get preferred shares for an amount of $326 million and provide technology to the new company. Nick Reilly, President of GM Europe said that GM always hoped to find a positive solution for the Swedish division: “GM will support Saab and SPyker Cars on their road ahead.”

The European Investment Bank EIB will provide a loan that is guaranteed by the Swedish government, who also agreed to this Monday afternoon. The European Committee has to approve the guarantee, and is expected to do so shortly.

Spyker intends to rename Spyker Cars N.V. into Saab Spyker Automobiles N.V.

We will talk to Muller in a later stage and get more background on this spectacular deal, so stay tuned.
[Source : Auto Channel]

GM reached agreement to sell Saab to Spyker

2010 SAAB 9-5

DETROIT : January 26, 2010 – General Motors and Spyker Cars NV confirmed that they have reached a binding agreement on the purchase of Saab Automobile AB.


"The announcement was great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM,” said John Smith, GM vice president for corporate planning and alliances.

“General Motors, Spyker Cars, and the Swedish government worked very hard and creatively for a deal that would secure a sustainable future for this unique and iconic brand, and we're all happy for the positive outcome,” Smith said.

As part of the agreement, Spyker intends to form a new company, Saab Spyker Automobiles, which will carry the Saab brand forward. The sale will be subject to customary closing conditions, including receipt of applicable regulatory, governmental and court approvals. Other terms and conditions specific to the sale will be disclosed in due time.

The Swedish government is at present reviewing the transaction and the related request for guarantees of a Saab Automobile loan that has been requested from the European Investment Bank. Assuming quick action, the transaction is expected to close in mid-February, and previously announced wind down activities at Saab will be immediately suspended, pending the close of the transaction.

“Throughout the negotiations, GM has always had the hope to find a solution for Saab that would avoid a wind down of the brand,” added Nick Reilly, president, GM Europe. “We’ve worked with many parties over the past year, including governments and investors, and I’m very pleased that we could come to such a good conclusion, one that preserves jobs in Sweden and elsewhere. GM will continue to support Saab and Spyker on their way forward.”

[Source : GM]

Opel intends to close Antwerp facility

Opel Antwerp Plant - Photo : REUTERS

BRUSSELS/RÜSSELSHEIM : January 21, 2010 - As Opel moves quickly on its way towards a viable future, the company announced today the intent to wind down its manufacturing plant in Antwerp, Belgium in the course of 2010.


Opel will continue to engage in the official information and consultation process with employee representatives regarding the envisaged restructuring.

“We fully understand the effect this announcement has on the Antwerp employees and their families and we sympathize with them,” said Opel CEO Nick Reilly. “Many have been dedicated to the plant over generations and have done an excellent job producing great quality cars. The decision to announce this today, was not taken lightly; instead, it is the unfortunate result of the current business reality. We must make this announcement now so that we can secure a viable future for the entire Opel and Vauxhall operations.”

The global economic crisis has led to a major downturn in the automotive industry. The Western European car market in 2010 is expected to be 1.5 million vehicles below 2009 levels and almost 4 million below its peak in 2007. It is not expected to return anytime soon – if ever – to these peak levels, resulting in significant overcapacity in general and at Opel in particular. To ensure long-term sustainability for the company, Opel needs to reduce capacity by approximately 20 percent.

In view of current capacity utilization at all European Opel and Vauxhall plants, planned future product portfolio, timing requirements and financial impact, winding down the Antwerp plant would be the most logical approach for the company. If confirmed, production would conclude in the next few months.

It is expected that the full restructuring plan, when completed, will affect all Opel and Vauxhall production sites and entities through such measures as capacity reductions, job redundancies and labor cost reductions. More details will be announced in due time.

[Source : GM-Opel]

Mitsubishi Weighs Manufacturing Future in U.S.; Considers Adding Asian Pickup

Mitsubishi Triton - Asian Edition

DETROIT : January 13, 2010 – Mitsubishi Motors Corp. continues to debate whether its sole U.S. plant in Normal, IL, has a future, a top executive tells Ward’s during the North American International Auto Show here.


“We cannot think about (production) just for Illinois,” Mitsubishi Motors North America CEO Shinichi Kurihara says.

The Japanese auto maker first must decide on the proper allocation of models for all its global manufacturing plants before it can make a move on the Normal facility, which has been producing well under capacity for years.

“We need more time to finalize that kind of long-range product plan,” Kurihara says. “At this moment, I can’t say a clear idea for the future (of Normal).”

Should Mitsubishi decide to maintain a U.S. manufacturing footprint, Normal likely would continue to be a source of larger vehicles, he says, noting it’s difficult to build smaller A- or B-segment cars in the U.S. and sell them at a low cost.

Kurihara says he is in favor of using Normal as a source of greater volumes, due to the current weak dollar/strong yen, which makes the U.S. a more compelling production base.

Mitsubishi also would be open to the idea of contract manufacturing at Normal, says John Koenig, executive vice president-MMNA. He notes the auto maker already does contract assembly at a plant in Japan for PSA Peugeot Citroen.

Ward’s data shows Mitsubishi built 18,501 vehicles at Normal in 2009. The plant’s website lists an annual capacity of 135,000 units under “current conditions.” Normal’s capacity was 240,000 units when Mitsubishi and former joint-venture partner Chrysler Corp. both manufactured at the facility.

In 2008, Mitsubishi and the United Auto Workers union ratified a new contract that keeps the plant open through 2012.

Koenig says building Mitsubishi’s Triton compact pickup truck, currently produced and sold in Southeast Asia, also is a possibility for the U.S. It’s a move he and Kurihara would welcome. But the decision rides on the profitability of such a move.

“We both like the truck,” Koenig says. “We both would love the chance to sell the truck. But in order to sell it (here), we’d probably have to build it here because of the 25% (import) tax.

“If we (produce) it here, we’ve got to build a volume of at least 50,000 or 60,000 units a year to make it profitable. And that’s our sticking point. Can we do that?”

Mitsubishi’s total U.S. sales last year across all vehicle lines were 53,986, a decline of 44.8% from 2008. However, Koenig says the auto maker plans to return to a 100,000-unit annual sales rate in a few years.

Chrysler had been building a version of the Dodge Dakota compact truck for Mitsubishi to sell in the U.S. However, the Raider was canceled last year due to lackluster sales.

A Mitsubishi spokesman says Raider production at Chrysler Group LLC’s Warren, MI, plant has ended. Ward's data shows nine units of the truck in inventory at the end of last year.

[Source : WARDsAUTO]