Gasoline Programs Could Be Next Wave of Incentives, Edmunds.com Predicts

SANTA MONICA, Calif. — As gas prices rise this summer, automakers may well turn to marketing programs that include free gasoline instead of or in addition to cash rebates and low-interest financing, Edmunds.com predicts.

“Gas prices are having a profound effect on the psychology of car-buyers, so we expect that automaker and dealer marketing tactics may include free gasoline programs this summer,” stated Jesse Toprak, executive director of Industry Analysis for Edmunds.com. "As indicated in Edmunds’ True Market Value Predictive Alerts, transaction prices of gas-guzzling large SUVs and trucks will likely continue to fall.”

Meantime, Edmunds.com estimated Thursday that the average automotive manufacturer incentive in the U.S. was $2,449 per vehicle sold in April 2008, up $13, or 0.5 percent, from March 2008, and up $39, or 1.6 percent, from April 2007.

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Chevrolet Malibu, Ford Fusion, Pontiac G6 Gain Traction in Crucial ‘C’ Segment

By Dale Buss

Chevrolet Malibu is helping put Detroit back on the map in the mid-size sedan segment. Even the three-year-old Pontiac G6 and Ford Fusion are helping out on that front as well.

Of course, the real Big Three of the so-called “C” segment of the market  remain solidly entrenched atop it: Honda Accord, Toyota Camry and Nissan Altima. Accord was the nation’s hottest-selling vehicle during the first quarter, according to Edmunds.com data, overcoming a sluggish start since the new model’s debut last fall to move 88,000 units from January through March. Camry, at 84,000 units, and Altima, with 76,000 sales, were right behind.

But domestic automakers nevertheless are encouraged by recent glimmers of hope in a crucial segment in which they haven’t been competitive for several years -- even though mid-size sedans used to be the Big Three’s bread and butter. At least the progress lately is a place to start.

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GM Partners With a Second Cellulosic Ethanol Maker

General Motors plans to announce Thursday a second partnership with a cellulosic ethanol maker. The automaker is providing no further details until GM President Fritz Henderson makes the announcement in Washington, D.C.

GM already has announced a partnership with an Illinois-based cellulosic ethanol maker, Coskata Inc., and last week said Coskata was establishing a pilot plant in Pennsylvania to demonstrate its innovative process of converting a variety of materials, from garbage to agricultural waste, into ethanol.

GM's partnerships for developing cellulosic ethanol come against a backdrop of increasing outcry for the industry to quit using corn-based ethanol, as food prices rise.

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GM Downgrades 2008 Industry Vehicle Sales Forecast

Previously more optimistic than other automakers, General Motors Wednesday announced it had downgraded its U.S. vehicle sales forecast for 2008. GM now expects industry sales to come at in the mid to high 15 million units range, instead of the low 16 million. GM had predicted some upturn in the second half.

GM President Fritz Henderson, in a conference call with analysts and media on first-quarter earnings Wednesday, said April sales, which will be reported Thursday, look like the weak sales throughout the first quarter.

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GM Loses $3.25 Billion in the First Quarter

General Motors Wednesday reported it lost $3.25 billion in the first quarter due slow U.S. vehicle sales, losses at its finance unit and plant shutdowns caused by a strike against one of its suppliers.

Analysts expected GM to post a loss, which was the automaker's third consecutive quarterly loss and compares with a profit of $62 million in the year-ago quarter. However, the loss was less than analysts had forecasted thanks to GM's rising sales in Asia and Latin America that helped offset the slump in the U.S.

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Rick Suzuki: Fall on Sword Justified?

By Michelle Krebs

It was puzzling and surprising when Rick Suzuki announced in late March that he would  step down as chairman of American Suzuki due to the company’s poor performance.

After all, American Suzuki sales haven’t appeared that bad on the surface. In fact, Suzuki sales have nearly doubled since 2003. In March this year, Suzuki sold 10,510 vehicles, its highest amount since June 2007 in an extremely tough sales environment when the industry as a whole and most automakers reported a sales decline.

But a closer look by Edmunds.com shows those sales came at a cost that led to the operating losses to which Rick Suzuki referred in his March letter to employees.

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Toyota Camry Hybrid Outselling V6 Models

By Bill Visnic

Yet another sign consumer interest is turning from horsepower to fuel economy: the hybrid-electric version of the Toyota Camry, one of the nation’s best-selling cars, is outselling V6-powered Camrys by a solid margin.

For March, Edmunds.com data indicate sales of the Camry Hybrid set a new record: 6,930 units, or a considerable 22 percent of Camry’s 31,310 sales last month. Camry Hybrid monthly sales eclipsed 6,000 units only once since the car’s launch, in May 2007, when the 6,853 sold represented slightly more than 17 percent of total Camry sales.

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GM Slashes Truck, SUV Production Due to Slow Sales

Continued slow sales prompted General Motors to announce Monday that it will cut  production of large pickup trucks and sport-utility vehicles this year.

In total, GM said it is slashing production by about 10 percent, or about 138,000 vehicles at four plants in the U.S. and Canada. About 3,550 workers will be out of jobs as a result.

The question being asked is will sales of those high-profit vehicles, in light of skyrocketing gasoline prices, ever bounce back?

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Ford’s Early Agreement with Canadian Union a Positive Sign

By Michelle Krebs

The news that Ford reached an early agreement with its Canadian union is being overshadowed by Las Vegas billionaire Kirk Kerkorian's purchase of the automaker’s stock, but the Canadian deal is every bit as significant -- maybe even more so.

Talks between Detroit’s three automakers and the Canadian Auto Workers union regarding a new contract to replace the current ones that expire in September appeared as if they could be extremely rancorous. A strike appeared to be a distinct possibility.

But Ford’s announcement Monday that it had reached an agreement with the Canadian union -- especially in an unheard of four months plus ahead of schedule decreases -- lessens the odds.

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Honda Accord Is the Best-Selling VEHICLE in March; Will a Car Win the Top Spot Again in April?

By Michelle Krebs

Will a car instead of a truck be America's best-selling vehicle again in April?

In March, the Honda Accord was not only the best-selling car in America it was also the best-selling vehicle. A car has ranked as the best-selling vehicle in monthly sales only five times in the last six years, according to Edmunds.com's analysis. Four of those times, the Accord was tops; the Toyota Corolla ranked No. 1 once, in May 2007.

But with pickup truck sales plummeting and consumers turning to more fuel-efficient cars, a car could take the top spot again for April when automakers post sales reports on Thursday.

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Dodge Ram: Spending Most for Incentives

By Michelle Krebs

Chrysler is spending more on incentives for the Dodge Ram than any manufacturer outside of the luxury market, according to Edmunds.com’s analysis.

The Total Cost of Incentives, Edmunds.com’s proprietary formula for measuring incentives, on the Dodge Ram was an average of $8,260 for every truck Chrysler sold.  The average transaction pice on a Ram is $31,900, according to Edmunds.com's calculations.

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April Auto Sales: Buyers Continue Shift to Smaller Cars and SUVs

SANTA MONICA, Calif. – As gas prices skyrocket, the biggest growth in April vehicle sales  are expected to be in small cars and small SUVS. In total, April vehicle sales likely will show a decline from April of last year but increase from this past March, according to a forecast by Edmunds.com.

Automakers are expected to report new vehicles sales, including fleet sales, of 1.3 million units for April, a 2.2 percent decrease from April 2007 and a 3.7 percent increase from March 2008, Edmunds.com predicts. April 2008 had 26 selling days, two more than last April 2007. When adjusted for this difference, sales decreased 9.7 percent from April 2007.

“It’s clear that gas prices are weighing heavily on car-buyers’ minds," observed Jesse Toprak, Edmunds.com’s executive director of Industry Analysis. “We predict that this month, the segments with the most year-over-year growth will be compact SUVs and compact cars at 52 percent and eight percent, respectively.”

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Porsche Charges Eavesdropping on CEO Via a Baby Monitor

The Porsche-Volkswagen saga is becoming more bizarre every day; the latest chapter includes charges of eavesdropping via a baby monitor.

Porsche confirmed Sunday night that it has filed a criminal complaint with authorities regarding a suspected attempt to eavesdrop on CEO Wendelin Wiedeking. A report by the German weekly Der Spiegel, picked up by the Wall Street Journal Monday, said the complaint came after the microphone of a baby monitoring device was discovered behind a sofa in a hotel suite a day before last year's meeting of the supervisory board of Volkswagen.

Porsche holds 31 percent of the shares of Volkswagen and is seeking a majority stake.

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Kerkorian's Tracinda Builds Stake in Ford

He’s back and Ford is the object of his affection this time.

Last Vegas billionaire Kirk Kerkorian, through his Tracinda Corp., has amassed 100 million shares for a 4.7 percent stake in Ford just this month. Further, Tracinda said it plans to buy up to 20 million more shares at a premium to last week’s closing price.

Kerkorian’s move on Ford is a vote of confidence for Ford management led by CEO Alan Mulally and the company’s turnaround prospects.

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Oil: Another Day, Another Record

Oil prices set yet-another record Monday of $120 a barrel. The record price was spurred on by a weekend refinery strike that closed a pipeline delivering a third of Britain's North Sea oil to refineries in the United Kingdom and supply outages in Nigeria.

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Chrysler Puts Axle Plants Up for Sale

Chrysler has quietly begun looking for buyers for two Michigan axle plants – one still under   construction, sources told the Wall Street Journal, which says the move reflects the automaker’s search for a leaner business model.

Over the past two months Chrysler has approached two axle suppliers, Dana Holding Corp., which recently emerged from bankruptcy, and American Axle & Manufacturing Holdings Inc., which has been struck by workers at five plants since late February, about buying the two plants for about $400 million. The offer has also been made to private-equity groups, the newspaper reported in Monday’s edition based on comments from anonymous sources.

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Toyota Prius: Next Chapter Opens in January

By Peter Nunn

Imagine a Toyota Prius, but faster, cleaner and greener. Such a car is coming soon and will launch at the Detroit auto show in January 2009.

America has fallen for the Prius in a big way, no doubt about that. Five years on, through an extraordinary combination of style, engineering and marketing, Toyota's fuel sipping hybrid remains the absolute gold standard for eco cars in the industry. 

The next generation, however, has all the makings of an even bigger hit. That's because it will be a touch bigger so offering more space. It will come with stronger 1.8-liter hybrid performance yet at the same time boast even better economy and class leading emissions, if early word is correct.

In other words, everything Americans like now about the Prius, including its unique design and crusading eco image, but in a 'smarter,' more high-grade package.

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Speeding – and Limping – Out of Showrooms

By Michelle Krebs

German-brand cars zoomed off dealer lots nearly as fast as they arrived while Suzuki- and Korean-brand models limped out of showrooms, according to Edmunds.com’s days-to-turn analysis for March.

The just-introduced smart fortwo had the lowest days to turn. BMW and Mercedes-Benz were low as well. In contrast, Suzuki, Hyundai and Kia had the highest days to turn.

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Ford-Toyota: A Race to Watch

By Michelle Krebs

While most eyes are on the global sales and production race between Toyota and General Motors, another interesting contest is developing in the U.S. – between the Ford and Toyota brands.

For the past two months, the Ford brand has outsold the Toyota brand. Ford’s recent gains narrowed the gap for the first quarter to less than 3,000 vehicles between it and Toyota. In 2007, Toyota closed the books 127,606 vehicle sales ahead of Ford. Throughout 2007, Toyota led Ford by about 10,000 plus vehicles a month.

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BMW Takes $370 Million Charge on Lower Prices, Rising Bad Debt

Falling prices and rising bad debt in the U.S. caused BMW to become the first major European industrial firm to fall victim to the credit crunch as the German automaker announced Thursday it was taking a $369-million charge, the Financial Times reported.

BMW, which announces first-quarter results on Tuesday, reaffirmed its full-year profit target of a slight increase over last year’s pre-tax level, the paper reported. But the automaker blamed the credit crunch for a sharp deterioration in used car prices, particularly in the U.S.

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GM Ethanol Partner Announces Pilot Plant

By Bill Visnic

PITTSBURGH – Coskata Inc., developer of a unique process that uses specialized bacteria to produce cellulosic ethanol – and with whom General Motors Corp. formed a partnership last January – announced Friday it will begin construction near here for the first production facility to demonstrate the process.

The demonstration plant, Coskata says, will start early next year and run 24 hours a day to produce about 40,000 gallons of cellulosic ethanol derived from almost any organic waste material, including agricultural waste and municipal garbage that might normally be placed in landfill.

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Ford Surprise: Turns Red Ink into Black

By Michelle Krebs

DEARBORN, Mich. -- Ford reported Thursday morning that it was in the black in the first quarter, compared with the red ink it reported in the year-ago quarter, thanks to aggressive cost cutting and strong international sales.

Analysts had predicted Ford would announce a loss. Instead, Ford surprised them by posting net income of $100 million in the first quarter this year, compared with a $282 million loss in the year-ago quarter.

Profitability will be short-lived, however. Ford executives said in a conference call with media and analysts that the automaker will post a loss for full-year 2008, albeit vastly improved from 2007. They added the company is still on target to be profitable for 2009.

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GM 1Q Global Sales Flat Thanks to North American Drop

By Bill Visnic

General Motors Corp. says its first-quarter 2008 global sales reached 2.25 million vehicles, a drop of less than one percent despite the drag of lagging North American sales.

GM sales of 947,000 units in North America was a roughly 10 percent drop compared with 2007’s first quarter. GM executive director of global market and industry analysis Mike DiGiovanni said the number “exceeded our internal forecasts,” but also says, counter to some industry analysts, GM does not expect U.S. sales to shore up in the second quarter. DiGiovanni said the company does not anticipate a firming U.S. market until at least the second half of the year.

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Done at BMW But Now At Rolls-Royce, CEO Tom Purves Says Luxury Market will be Challenging

By Kate McLeod

Editor's Note: Auto Observer interviewed Tom Purves, chairman and CEO, BMW U.S. Holding Corp., in late March, as he still was scheduled to retire from the company. But this week, BMW announced Purves will remain, becoming CEO of the company's Rolls-Royce Motor Cars Ltd. division in the United Kingdom, starting in July. He spoke with Kate McLeod about his decades with BMW and the company's future in a toughening U.S. market.

Tom Purves has worked for BMW either 23 or 24 years. He can’t remember exactly.

In November, at age 60, he was scheduled to retire - but now will take over as CEO of BMW's Rolls-Royce unit. Purves leaves BMW as the company is dramatically expanding its production capacity in the U.S., and creating more niche vehicles. One is a stunning modernization of the iconic 2002, the 1 Series, and another, the X6, is so new it has no category or market. 

That may sound idyllic but the current BMW management in Europe is in shuffle mode, which creates chaos. “It is not really, in a sense, for me to make a judgment whether it is unusual or not,” said Purves about all the management changes in Germany. “We in America are just passing the baton.”

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Strategies Changing Quickly in the Green Game

By Dale Buss

As Earth Day comes around once more, there are a few different scoreboards for tracking the relative progress of automakers in their attempt to win the green derby.

According to Toronto, Canada-based consumer-research firm BrandIntel’s recent survey of online discussion, for example, Toyota, Honda, Mercedes and Volkswagen have the most “green credibility” due to their hybrid and diesel vehicles. General Motors and Chrysler have been stuck among the least-credible because of their large fleets of trucks and SUVs and weaker lineups of hybrids and diesel options. Ford sits in the middle.

But several automakers are forging strategies for changing such scoreboards in their green credentials. A look at a few:

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Chrysler, Getrag Shift Into Drive for New Fuel-Saving Tranny

By Bill Visnic

Getrag Corporate Group and Chrysler LLC have signed the “definitive agreements” for the development, manufacturing and supply of Getrag’s high-tech Powershift automated-manual transmission earmarked for future Chrysler vehicles, Getrag announced earlier this month.

Getrag’s Powershift transmission incorporates the dual-clutch electrohydraulic components designed and developed by BorgWarner Automotive Inc. for its ground-breaking DuoTronic technology, first deployed in production vehicles by the Volkswagen Group, marketed as the Direct Shift Gearbox.

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For Automakers, Green Mantle Could Become a Golden Cloak

By Dale Buss

Toyota clearly donned it for awhile. Ford tried it on for size. American consumers seem to think it fits Honda pretty well these days. But no one covets it more now than General Motors.

We’ll call it the “green mantle:” a figurative decoration on the shoulders of automaker that tells the world, and competitors, that their company is the most environmentally renowned in the industry, both for their products and technologies and – perhaps even more important – in the public’s overall regard.

And taken particularly in the context of an annual worldwide recognition such as today’s Earth Day, it seems at least as important for any corporation to earn the perception of environmental responsibility as to actually be doing something tangible.

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Big ’07 Loss Drops GM in Fortune 500

It was bound to happen. General Motors Corp., once the granddaddy of the American corporate world, is gradually becoming a less-influential player on the nation’s business chessboard.

The Associated Press reports GM has dropped one place, to No. 4, on the Fortune 500 list of U.S. companies with the largest revenues. Last year, GM was No. 3 behind Wal-Mart Stores Inc. and Exxon-Mobil Corp. But thanks to a loss of $38.7 billion last year – dropping its revenues to $182.3 billion, GM slips behind oil giant ChevronTexaco Corp., which recorded $210.8 billion in revenue in 2007.

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Ford’s Drive One Could Be Right Campaign, Right Time

By Dale Buss

American consumers have had their long fling with raw power and size. They’re continuing to demonstrate that vehicle design is very important to them. And in a softening economy, there’s still nothing that speaks louder than price.

But Ford may be on to something with the new, omnibus Drive One marketing campaign that the company has been revealing in stages over the last few weeks – and plans to use for years. The effort is the first major manifestation of the marketing strategy that has been hatched at Ford over the last six months by Toyota émigré Jim Farley.

And in what it says both about Ford and about the state of the U.S. automotive market, Drive One may be able to create a fortunate synchronicity for the long-beleaguered OEM.

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Beijing Auto Show and China’s Auto Industry: Life in Fast-Forward

By Michelle Krebs

BEIJING – No more models dressed in cheesy mermaid costumes. Not a pink fur-covered Hello Kitty car in sight. Beijing’s auto show, like China’s auto industry and the country itself, has grown up and gained sophistication rivaling other global entities –almost.

And it has happened fast, as life does in China – life lived in fast-forward, as one expatriate auto company executive described it.

The Beijing auto show is an analogy to the China auto industry – and Chinese economy generally: spectacular progress and phenomenal growth in the blink of an eye, but still a tad off in the final bit of refinement necessary to be considered world-class – a level assured to be achieved at some point.

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GM to Introduce Buick LaCrosse Hybrid in China

By Michelle Krebs

BEIJING -- General Motors will begin selling the industry's first mainstream hybrid car by the time the 2008 Olympics opening ceremonies are held here. The hybrid system will go into the popular Buick LaCrosse sold in China.

Chinese production of the hybrid LaCrosse begins in June with sales following in July. Specifications on the car, which likely uses the same hybrid system as the U.S.-sold Chevrolet Malibu and Saturn Aura hybrids, will be disclosed at GM's auto show press conference Sunday. They did say the LaCrosse hybrid achieves fuel efficiency 15 percent better than the non-hybrid LaCrosse sold here with 15 percent lower emissins. Price has not been revealed though it will be higher than the non-hybrid model.

The hybrid LaCrosse is part of a grander GM scheme to go green in China, which if confronted with energy and environmental issues of monumental proportions.

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UAW Strikes GM, Dana Gets Ex-Toyota Exec

By Bill Visnic

The massive gears of the auto industry’s manufacturing sector continued to grind out a changing tune this week, reacting to larger, macroeconomic forces in the U.S. economy that are mandating interesting, if not wrenching, change, particularly for the domestic Big Three automakers.

On Thursday, union leaders for United Auto Workers Local 602, representing workers at General Motors Corp.’s Delta Township assembly plant near Lansing, MI, called a strike because the local has yet to sign a plant-level contract with GM, despite what it claims have been months of negotiation. The plant assembles GM’s new generation of crossover utility vehicles, the GMC Acadia, Saturn Outlook and Buick Enclave. The Enclave and Acadia have been selling briskly.

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Niche-vehicle Producers Face Uncertain Future

By Pal Negyesi

Magna Steyr will build the forthcoming new Aston Martin Rapide; Bertone skips the Geneva Motor Show for the first time in 50 years amid financial woes; Pininfarina fights for survival  just some of the recent headlines that reveal a mostly gloomy picture for contract manufacturers.

Long gone are the heydays of these companies. Back in the 1990s, major automobile manufacturers including Opel, Volkswagen and Mercedes-Benz were looking for cost-effective ways to produce relatively smaller runs of special versions of their models. Design and engineering companies, including Bertone and Karmann were competing with each other for new business. As an example, in the early 2000s Austria-based Magna Steyr — which developed Mercedes-Benz's acclaimed 4Matic all-wheel-drive system — was manufacturing the 4WD versions of the E-class; Karmann was making a little more than 10,000 CLK convertibles a year in Germany; Bertone was churning out the Opel Astra convertible; and Pininfarina was happy with a lot of different models, including the Peugeot 406 coupe and the Mitsubishi Pajero Pinin mini off-roader.

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VW Hopes ‘Max’ Advertising Builds on Sales Momentum

By Dale Buss

For Volkswagen Group of America executives, life is about as good as it can be right now -- given that U.S. car sales are at their lowest level in a decade, their dealers are starved for product, and the parent company still hasn’t figured out how to offset the growing currency-exchange disadvantage of producing in euros the vehicles that they sell in the United States.

Their good cheer results from the fact that VW has bucked the trend and posted a first-quarter increase in U.S. sales, including a 13% gain in March, and that a record five new and re-launched models will be streaming into dealerships as the year unfolds.

And one more thing: “Max” is now on the prowl. The personification of a black 1964 Beetle is the “mascot” of an ambitious new advertising and marketing campaign for Volkswagen called Das Auto, German for “the car.” The campaign “will build on Volkswagen’s unique place in pop culture through its message of ‘It’s What the People Want,’” Volkswagen Group said in a statement.

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General Motors Hires Ex-Nissan McNabb

General Motors has hired former Nissan executive Mark McNabb and reorganized its sales, service and marketing divisions.

GM will have four brand channels -- Chevrolet, Saturn, Buick-Pontiac-GMC, and Cadillac-Hummer-Saab. McNabb will head the "premium" channel of Cadillac-Hummer-Saab.

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Chinese Automakers Report Higher Profits

On the eve of the opening of the annual Beijing motor show this weekend, two of China’s major automakers, Geely Automobile Holdings Ltd. and Dongfeng Motor Group Co., reported strong 2007 profits, Bloomberg News reported Wednesday.

Geely, China’s largest maker of its own brand models and has no foreign partner, said it doubled profits in the second half of last year, pushing full-year income 51 percent higher. State-owned Dongfeng, which builds vehicles with Honda, Nissan and Peugeot, reported its 2007 net profit rose 81 percent.

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Chevrolet Malibu Production Safe Despite Supplier Strike

General Motors said the UAW strike against supplier American Axle & Manufacturing Inc.  will not stop production of the hot-selling Chevrolet Malibu, as had been feared.

Bo Andersson, GM's group vice president of global purchasing and supply chain, told reporters in Detroit that the company has “a good plan,” details of which he would not disclose, to keep up production of the Malibu. "We have been able to produce vehicles in all of our car plants, besides one. I don't see anything changing from where I sit," he told reporters.

Negotiations are continuing between American Axle and the union.

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Oil Prices: A Broken Record -- Literally

It’s beginning to sound like a broken record playing over and over again: oil struck a new high Wednesday – above $114 a barrel -- $114.41 to be exact. The price is more than three times the average price of 2002, when oil’s rally began, Reuters reported.

Another oft-repeated refrain: the U.S. dollar was headed toward a record low against the euro Wednesday on news of disappointing quarterly earnings announcements by major U.S. corporations.

Posted by at 6:03 AM under News | Comments (0) | digg this | del.icio.us

Automotive Supplier Woes Mount

After a brief respite last year, concern is again mounting about the financial health of hundreds – if not thousands – of component and services suppliers squeezed between falling orders from their carmaker customers, high raw material prices and tightening credit conditions, the Financial Times reported Wednesday.

J.P. Mortgan cut earnings estimates this week of several of the world's biggest Tier One automotive suppliers. They include American Axle -– against which workers have been striking for seven weeks now -- Lear, Magna International, TRW, Visteon and Tenneco. Lehman Brothers singles out American Axle, Lear and Tenneco as most vulnerable among General Motors' Tier One suppliers.

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Chery, Chrysler May Form China Venture

China’s Chery Automobile Co. reportedly is talking to Chrysler about forming a venture in China, and Chrysler will begin selling Chery-built Chryslers in Latin America late this year, a Chery executive said.

“Chrysler wants to deepen our current cooperation,”' Chery spokesman Jin Yibo told Bloomberg News in a phone interview Tuesday. “Our options include setting up a venture.''

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Toyota-Subaru Coziness Could Yield Retro-Corolla, Celica

By Bill Visnic and Peter Nunn

Normally stolid Toyota Motor Corp. hasn’t been shy in doubling of its stake in Fuji Heavy Industries Ltd. and openly admitting the two will jointly develop new vehicles – including an all-new rear-wheel drive sport coupe on a dedicated platform.

Whew. Quite un-Toyotalike. This is the company that rarely “buys” anything or anybody, preferring joint ventures, particularly when it comes to vehicle development and vital components. When it decided to build cars with General Motors, Toyota bought nothing; it established New United Motors Manufacturing Inc. (NUMMI) in California, which jointly makes vehicles for Toyota and GM.

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China's Chery: Moving Forward With Chrysler Despite Nissan Link

So now that Chrysler has cut a deal with Nissan to make its small cars, what’s up with China’s Chery Automobile Co., which was supposed to be providing Chrysler with a small vehicle platform by now?

There’s room for both, Chrysler Vice Chairman Thomas LaSorda said in a conference call Monday. In fact, he said, the deal with Chery is proceeding, but he gave no timeframe for introduction of Chery-built Chryslers.

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Cerberus’ Feinberg: “A Recluse Lifts the Veil a Little”

A rare interview with Stephen A. Feinberg, the founder of Cerberus Capital Management, which now owns most of Chrysler and much of General Motors Acceptance Corp., provides the ever-so-slightest glimpse of Feinberg the man, but provides not a morsel of what he’s got in mind for the much anticipated end game of Chrysler.

New York Times’ “Dealbook” columnist Andrew Ross Sorkin spent two hours interviewing the reclusive Feinberg -– “the money man some hope will save Detroit” as he describes him -- at his Manhattan office. It was Feinberg’s first interview in a couple of decades –- and he still refused a photograph. His yearbook picture is the one media outlets are forced to use.

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Oils Soars Past $113 a Barrel to New Record

Oil set new record highs above $113 a barrel Tuesday. Oil is up 18 percent from the start of the year when it was averaging about $100 a barrel.

Meantime, the dollar was at near record lows against the euro Tuesday. The weak dollar tends to cause the price of commodities like oil to rise as investors look for a hedge against inflation.

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GM Brazil Builds Second Plant

General Motors announced Monday it will build a $200 million engine and parts plant in Brazil, where sales are booming and GM is the market leader.

The plant will employ 500 workers and will start production in the fourth quarter of 2009. When it reaches full capacity, it will produce 120,000 engines and 50,000 cylinder heads a year.

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Chrysler, Nissan: Could More Product Swaps Be in Store?

By Michelle Krebs

When Chrysler and Nissan announced their latest model-sharing plans Monday, company executives hinted they were leaving open the door for further product discussions. The initial opening that led to the Chrysler-Nissan small-car-for-big-truck swap had been cracked in January when the two companies announced Nissan would supply Chrysler with a version of the Nissan Versa to sell in South America.

"We agreed to an open dialogue [in January] to continue to explore future product development and sharing opportunities," Dominique Thormann, Nissan's North American senior vice president for administration and finance, said in a conference call Monday. "And today is one milestone and a culmination of that intention."

One milestone? Could there be others? What could be next?

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Chrysler, Nissan Link To Share Models

By Michelle Krebs

DETROIT -- Chrysler and Nissan announced late Monday that they will link to supply each other with products. Nissan will make a small car in Japan for Chrysler; Chrysler will sell to Nissan full-size pickup trucks it makes in Mexico to replace Nissan's Titan.

The move was not completely unexpected. The two companies had left the door open for further cooperation when they announced in January that Nissan would supply Chrysler with a version of its small Versa car for the Detroit automaker to sell in South America.

Still, this most recent revelation adds fuel to the buzz that the two companies may ultimately form a full-blown alliance. Company spokesmen in separate conference calls Monday evening, however, insisted the newest announcement was merely “an OEM product exchange," not a more far-reaching business arrangement.

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Former UAW President Douglas Fraser Remembered

Hundreds of union members, political figures and corporate executives gathered with family members Saturday for a memorial service honoring former United Auto Workers President Douglas Fraser, who died Feb 23 at age 91.

Fraser led the union through its zenith in the 1970s and through the bleak times of the 1980s. He played a key role in saving Chrysler from bankruptcy. In exchange for workers agreeing to concessions to save Chrysler, Fraser gained a seat on Chrysler’s board, making him the first major union chief on the board of a large corporation.

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‘Cuda Designer John Herlitz Celebrated at Memorial Service

John Herlitz, the Chrysler designer who penned the legendary 1970 Plymouth Barracuda as well as the 1971 Plymouth Road Runner, numerous concept cars and important recent production cars, died last month at the age of 65. A memorial service was held Saturday.

Upon graduation from Pratt Institute, Herlitz began his career at Chrysler in 1965 as a manager of the Plymouth Intermediate Car Studio. He retired in 2000 as senior vice president of design.

Herlitz made his mark with the classic American muscle car, the 1970 Plymouth Barracuda. His Barracudas, especially those with powerful Hemi engines, currently fetch millions of dollars at auction from collectors.

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American Axle Strike Head into Seventh Week; More GM Plants Threatened

The strike by United Auto Workers union employees against Detroit parts supplier  American Axle & Manufacturing Inc. is headed its seventh week with no end in sight, and it is threatening to close General Motors' assembly plants that produce some of the automakers most popular vehicles, including the 2008 Chevrolet Malibu.

In the latest development, the UAW rejected the company’s request to bring in a federal mediator to settle the strike.

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Ford Dealers Get a Glimpse of 2010 Taurus

Ford CEO Alan Mulally showed dealers the next-generation Ford Taurus behind closed doors at a Las Vegas gathering. The Taurus is believed to be scheduled as a 2010 model and could be unveiled at the Detroit auto show in January.

Ford has given no official details about the new Taurus to the media yet. However, last week, the Taurus Car Club of America Web site posted a hazy photo showing a far more chiseled shape and European appearance than the current model, as reported by Edmunds' InsideLine.com.

Jim Farley, Ford's group vice president for marketing and communications, told the Detroit Free Press that dealers gave the Taurus a standing ovation.

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Volkswagen’s Global Sales Rise, Thanks to China, Brazil and New Models

Volkswagen AG reported its global sales rose and March as well as the first quarter on the  strength of China and Brazil and new models.

Volkswagen CEO Martin Winterkorn said in a statement that the German automaker's sales got a lift from the introduction of its VW Tiguan compact SUV and new-generation, best-selling Audi A4. Winterkorn said the automaker also is focusing on growth markets like China and Brazil to offset the slumping markets of the U.S. and Western Europe.

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Toyota, Isuzu Lead Japan Auto Shares Lower on U.S.

Shares of Toyota and Isuzu led Japanese car stocks lower in Tokyo Monday on concerns that a sales slump in the U.S. may cut into their profits, Bloomberg News reported.

Shares of Nissan, Yamaha and Fuji Heavy Industries, an affiliate of Toyota and the parent company of Subaru, also fell after it was revealed Friday that consumer confidence in the U.S. sank to a 26-year low in April, as gasoline prices rose and the labor market weakened.

Isuzu, Japan's largest truck maker, announced recently it would stop selling its sport-utility vehicles in the U.S. Last Friday, Toyota announced it was upping its stake in Fuji Heavy Industries and the two were developing a sports car together.

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Edmunds Wants You in the Driver's Seat

With all the recent talk about the economy and rising gas prices, Edmunds.com is offering readers a chance to participate in another consumer comparison tes. This time evaluating four 2008 economy sedans: Mitsubishi Lancer, Honda Civic, Mazda MAZDA3 and Toyota Corolla.

Go to the Edmunds.com web page and hit the apply button at the bottom of the page. Tell us why we should select you to test drive and compare these economy sedans. Six winners will travel to Willow Springs International Raceway in Southern California on May 14th for the evaluation drive and then write their comments for possible publication. To be eligible to enter, you must be at least 21 years old, have a clean driving record, and be able to travel to Los Angeles between May 13 and May 15.

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Peter Arnell Comes Back to Chrysler: Savior? Svengali? Or Both?

By Dale Buss

Two things are clear about Peter Arnell. He and his ideas are stepping on some mighty big toes at Chrysler. And he isn’t transgressing quietly.

But two other matters aren’t so certain – and, ultimately, they’re more important to the success of CEO Robert Nardelli’s recent move to bring in the controversial branding Svengali as the company’s “acting chief innovation officer.”

The first decisive question about Arnell: Can everyone get over the debacle that ended his first stint with Chrysler a few years ago? And the second is: Can Arnell really bring significant and quick improvements to the company now, with his broad edict to overhaul crucial areas including product design, passenger-facing technology, branding and dealerships?

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Adios, Amigo: Isuzu Riding Off into American Sunset

By Peter Nunn

Call it the classic long goodbye. Isuzu has announced it will call a halt to North American SUV sales in January 2009, but the news shouldn’t come as too much of a shock to anyone who’s been watching Isuzu of late.

Fact is, Isuzu’s fortunes have been on the wane for some while now as its long-term tie-up with General Motors has slowly unraveled and it’s been forced to rely on rebadged GM vehicles to keep sales alive.

It’s a sad finale for a Japanese company that once built a whole batch of cool-looking enthusiast cars, such as the early '80s Impulse coupe and later I-Mark and Stylus sedans. A company that turned its hand to some very well received show cars, the 1989 4200R, the 1993 VehiCROSS and 2001 GBX, to name but three. A company that later forged a successful business building SUVs such as the Trooper, Rodeo and Axiom until the economics of a harsh business environment dictated otherwise.

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Subaru Gets Sports Car to Sell in U.S. from Toyota Deal

Subaru of America will get and sell in the U.S. the compact rear-drive sports car that emerges from joining of forces with Toyota.

Subaru of America spokesperson Michael McHale confirmed the automaker would sell in the U.S. in 2011 a compact rear-drive sports car developed with Toyota. The car will be powered by the newest version of Subaru’s famous horizontally-opposed Boxer engine. Toyota also gets a version of the car but the company did not say if it will be sold in the States.

Speculation is the joining of Subaru-Toyota forces could also yield a jointly developed hybrid.

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Toyota, Daihatsu and Subaru Join Forces on Product Development, Vehicle Sharing

By Michelle Krebs

Japanese automakers Toyota, Daihatsu and Subaru parent, Fuji Heavy Industries, announced they have joined forces to develop new vehicles, including a small rear-drive sports car, and supply each other with cars. As expected, Toyota also doubled its stake in Fuji, a stake that could go even higher.

The agreement unveiled at a press briefing in Tokyo Thursday calls for the following product actions:
· Toyota and Fuji will jointly develop a compact rear-drive sports car to be marketed by both companies;
· Toyota will provide Fuji with a compact car;
· Daihatsu will supply Fuji with minivehicles and a version of the Daihatsu Coo compact car.

The trio's joining forces represents a sign of the times -- further consolidation of the global auto industry and increased cooperation among automakers to cut costs. The arrangement allows the companies to beef up their product portfolios, especially with slim-profit small cars, run assembly plants at full capacity and share development costs so no one company has to go solo on all such costs.

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In a Recession or Headed Toward One?

Is the U.S. headed for a recession or already in one?

The man on the street likely would say we're in one, but experts are debating it.

Former Federal Reserve Chairman Alan Greenspan said Tuesday the U.S. was in recession. On Wednesday, the International Monetary Fund's issued its latest World Economic Outlook that said the U.S. will slip into a recession that will spread globally.

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American Idoling With the Fords

By Michelle Krebs

Anyone who tuned into American Idol Tuesday night saw Ford Chairman Bill Ford and family sitting in the front row. The cameras focused in on Ford at the very start of the show, identifying him even before host Ryan Seacrest took center stage or the judges were introduced.

Ford is a major sponsor of the national talent show, and Tuesday night’s American Idol marked the premiere of  Ford’s new “Drive One” advertising campaign starring Ford employees.

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Chrysler Elbows in on Ford’s American Idol Action

Ford may own American Idol but Chrysler managed to uses the popular program to