Detroit Bureau on Twitter

Archive for June, 2010

Cadillac Changes Ad Agencies – Again

Musical chairs – but is Chrysler left without a seat?

by on Jun.29, 2010

It's now up to Fallon to help Cadillac move the metal as the GM division's new ad agency.

It’s a game of musical chairs in the automotive ad world, these days, and it’s hard to find many brands that haven’t changed their seats – or partners – in recent months, though some seem to be moving more often than others.

Like Cadillac, which has yet again switched agencies under the orders of General Motors’ new marketing czar, former Hyundai wiz kid Joel Ewanick (who is himself on his third job since the beginning of the year).

Free Subscription!

GM’s luxury arm will now be teaming up with the well-respected Fallon, part of mega-agency Publicis Groupe.  The decision to switch to Fallon was something of a lateral move, however, since Caddy had, not that many months ago, switched its multi-million dollar account to another Publicis agency, Bartle Bogle.


Milestones: Koç and Ford Motor 50th Anniversary

The Turkish joint venture now builds and exports Transits.

by on Jun.28, 2010

Ford's first pan-European product replaced two unrelated van models in Britain and Germany.

Ford Otosan, an automotive joint venture that traces its roots back to industrial pioneers Henry Ford and Vehbi Koç marked its 50th anniversary today with a celebration in Istanbul.

During the past five decades, Ford Otosan has been an integral part of Ford Motor Company’s international operations, most recently building successful vehicles such as the Ford Transit, Ford Transit Connect and Cargo commercial vehicles. Koç links to Ford go back eighty years to Henry I.

More than 500 guests joined the celebration, including Rahmi M. K Koç, honorary president and chairman of Ford Otosan, Bill Ford, Ford executive chairman, John Fleming, chairman and CEO, Ford of Europe and Lewis Booth, Ford chief financial officer. The celebration also included Turkish federal, state and local government officials and cultural leaders.

Ford Otosan is a fully integrated operation, including sales, marketing, engineering, manufacturing and parts distribution.

Ford Otosan is a fully integrated operation, including sales, marketing, engineering, manufacturing and parts distribution. Ford Motor Company and the Koç Group each hold a 41% stake in the joint venture with the remaining 18% held publicly on the Istanbul Stock Exchange. It employs about 7,600 employees at its manufacturing operations in Kocaeli and Inönü, its parts distribution center in Kartal and its engineering center in Gebze.

“The foundation of what became Ford Otosan grew out of the drive and vision of Henry Ford, and Vehbi Koç,” said Rahmi M. K Koç. “Their passion and commitment continues to drive the Ford Otosan business forward today. We’re proud that Turkish automotive industry started with Ford Otosan.”

Talking Turkey!

Otosan was founded in 1959, and in 1977, the company signed a license agreement with then-Ford Chairman Henry Ford II and the company’s name was changed to Ford Otosan. In 1997, Ford increased its share of ownership to 30% growing to 41% in 1997.


2011 Ford Explorer to Get “Curve Control”

Automaker emphasizing safety as truck-based ute switches to crossover platform.

by on Jun.28, 2010

A prototype of the 2011 Ford Explorer. Expect significant changes by the time the production model is revealed this summer.

Ford Motor Co. will introduce what it is billing as the next level in automotive safety with the launch of the 2011 Explorer, a system the maker has dubbed “Curve Control.”

The technology is designed to go a step further than today’s electronic stability control, the maker says, allowing the vehicle to sense whether it is turning as much as the driver intends.

Curve Control is just one of a number of new systems debuting on what will be a very different vehicle than the classic Ford Explorer, a product that, two decades ago helped kick off the boom in sport-utility vehicle sales.

New Model Analysis!

Curve Control is a sort of analog to stability control, according to Ford.  That earlier system is designed to detect when a vehicle enters oversteer – counteracting what the average motorist would call a skid.  The new system helps correct understeer, phenomenon most makers actually design into their products.  That’s fine under most circumstances, but under aggressive driving or slick road conditions it can lead to a loss of control, with the vehicle sliding off the road.


Toyota Begins Auris Hybrid Production in UK

Sales of 30,000 annually for first full hybrid made in Europe?

by on Jun.28, 2010

Auris HSD (Hybrid Synergy Drive) will be sold, eventually, in 32 countries.

The Toyota Plant in Burnaston, Derbyshire, is now making the new Auris hybrid, the first full-hybrid vehicle to be built in Europe, although some citizens of the UK might reject the “European” characterization.

Sales of 30,000 are targeted for the first year, with customer deliveries starting this July. Eventually, Auris HSD (Hybrid Synergy Drive) will be sold in 32 countries.

The Auris, not on sale in North America, comes in 3- and 5-door hatchback models derived from the Corolla platform. The hybrid will start it sales life as a 5-door hatch. (See Toyota Auris HSD Concept Appears at Frankfurt)

The design of Auris HSD has evolved from the Prius, the world’s first mass-produced hybrid vehicle. Prius  was launched in Japan in 1997 and in Europe and North America in 2000. Prius is now in its third generation. Auris is very close in size and performance to the Prius, creating a potential marketing problem. I assume Toyota will offer the Auris for fewer Euros, and keep the Prius the premium nameplate.

Auris is similar in size and performance to the Prius, creating a potential marketing problem.

Prius, of course, much to the astonishment of the European and American automotive establishments was a major technological breakthrough  – providing huge fuel economy benefits, as well as a “Green” marketing triumph for Toyota.

Toyota plans to introduce full hybrid drive technology across the company’s entire model range by the early 2020s.

“It is a proud day for Toyota Motor Manufacturing UK as we celebrate the official start of production of the Auris with Hybrid Synergy Drive, yet another premium quality model to be Built in Britain,” said Katsunori Kojima, Managing Director of TMUK.


Tesla IPO Set for Tuesday Launch

Will offering charge up the market?

by on Jun.28, 2010

Would you buy stock -- or a car -- from this man? Tesla CEO Elon Musk at the unveiling of the maker's Model S battery car prototype.

Investors will have the chance to plug into the nascent electric vehicle market tomorrow when Tesla Motors launches its much-anticipated Initial Public Offering.

How the company will fare with the market remains to be seen.  On the one hand, Tesla is an early entrant into a market segment most experts anticipate will grow rapidly over the coming decades.  On the other hand, the California-based maker has been losing money since it was founded and expects to continue to do so for at least several more years while it prepares its first mainstream battery car offering.

Stay Charged Up With a Free Subscription!

Tesla’s move to go public is the first IPO by a U.S. automaker in half a century, though observers say a string of additional electric vehicle manufacturers could make moves into the market if Tesla’s bid proves successful.


Auto Dealers Excluded from Wall Street Reform Bill

Dealers and lobbyists head off regulation. Senator Byrd’s death now threatens the entire bill, in face of Republican opposition.

by on Jun.28, 2010

NADA was unhappy that Wall Street reform legislation would “unfairly increase federal regulation over dealerships."

President Obama suffered a political defeat late last week from members of the National Automobile Dealers Association, who successfully had themselves excluded from the financial regulations that are proposed to stop the reckless practices of Wall Street that caused the ongoing Great Recession.

Dealers who provide their own funds for loans would have been treated just like banks, credit unions and other auto lenders under the bill.

NADA was unhappy that what started as Wall Street reform legislation would “unfairly increase federal regulation over dealerships and potentially eliminate dealer-assisted financing.” (See NADA Fighting Wall Street Financial Reform )

The White House, Pentagon, the Department of Treasury and other consumer interest groups fought strongly to regulate auto dealers.

Among other things, the bill would create a new Bureau of Consumer Financial Protection, and curb abusive practices such as ‘bait and switch” where one interest rate or down payment is advertised, but much higher ones substituted.

There are also rules governing other questionable ploys, such as the failure to pay off liens on trade-in vehicles, or conditional loan agreements. These are all reasonable propositions say consumer advocates.

Follow the $$$

However, the largely Republican members of the National Automobile Dealers Association, who have spent more than $3 million lobbying in “pay to play” Washington since last year, successfully defended their interests.   (more…)

Another Toyota Recall Coming on Lexus Hybrids

Fuel leaking after rear impact violates law. Stop sale ensues.

by on Jun.26, 2010

HS250h is based on the European Toyota Avensis. European rear crash standards are more lenient than U.S. ones.

Toyota Motor Sales (TMS), U.S.A., Inc., has told the National Highway Traffic Safety Administration (NHTSA), that it will recall 17,000 2010 model year Lexus HS 250h vehicles because they violate Federal Motor Vehicle Safety Standard (FMVSS) 301.

Sales of the Lexus have been halted.

NHTSA had previously informed Toyota the Lexus hybrid leaked dangerous amounts of fuel during a rear crash test that is part of NHTSA’s annual compliance testing program, which only tests some vehicles.

TMS does not have the authority to order a recall. The decision is made in Japan. Toyota recently paid a record $16.4 million fine to settle a complaint that it failed to tell regulators of potentially dangerous defects. Since NHTSA discovered this defect, it raises the question about another cover-up fine or whether vagaries in test results will end the matter after a recall is conducted.

NHTSA, of course, is under intense pressure to prove that it is not the “lapdog of the auto industry,” as it was called by many critics during Congressional hearings about Toyota  unintended acceleration deaths, an ongoing controversy.

The HS250h is based on the European Toyota Avensis. European rear crash standards are  more lenient than U.S. ones. European regulatory oversight of auto companies concerning defects is also less stringent than in the U.S. in the minds of some industry observers.


In a statement Toyota said, “During vehicle development, Lexus tested the HS 250h using the same protocol and found the vehicles to comply fully with the FMVSS 301. Lexus is currently working to identify the reason for the different test results and the cause of this noncompliance.”   (more…)

No More Crying, No More Sighing By Toyota’s CEO

Toyoda apologizes to shareholders for mistakes – and tears.

by on Jun.25, 2010

CEO Toyoda at confrontational hearings on Capitol Hill, last February. He's been criticized for crying during subsequent meetings with company employees.

There may be some sighing, but there’ll definitely be no more crying by Toyota’s embattled president and CEO Akio Toyoda.

Facing significant pressure in the wake of a worldwide safety crisis that has led to the recall of millions of vehicles – including more than 8 million in the U.S. alone – Toyoda offered his apologies to investors during the annual Toyota Motor Co. shareholders meeting.

Admitting he “might not come back” after a confrontational hearing with U.S. lawmakers, last February, the heir to the automaker’s founding family admitted it was a time of intense stress, during which he “wasn’t able to rest, not even for a minute.”

Toyota shareholders appeared willing to accept the executive’s apologies for the problems that have driven down the automaker’s stock price by more than 20% in recent months.

Free Subscription

But one matter seemed to raise the hackles of investors in a nation where the showing of “face” is all-important.  During a question-and-answer session, Toyoda was faulted for crying while meeting with Toyota employees after the hearings on Capitol Hill.

“I will try not to cry like that again,” Toyoda responded.


OSC Orders Magna to Disclose More on Stock Deal

Magna postpones a special meeting of shareholders to comply.

by on Jun.25, 2010

Magna founder Frank Stronach is ready to trim back his ties to the Canadian mega-supplier.

The Ontario Securities Commission (OSC) has issued an order requiring Magna International Inc. (TSX: MG.A, NYSE:MGA) to make additional disclosures in order to proceed with its proposed transaction to eliminate the company’s dual class share structure.

The deal would apparently end founder Frank Stronach’s control of the company, but at a steep price to shareholders of the common stock.

Stronach controls more than 54% of Magna shares while owning 1% of its equity.

OSC said the proxy “fails to provide sufficient information concerning the desirability or fairness of the Proposed Transaction and the board of directors of Magna has not made useful recommendations regarding the arrangement in the Circular.”

OSC also said, “it has been alleged that the Proposed Transaction is abusive of Shareholders and the capital markets for a number of reasons, including the estimated 1,800% premium being paid by Magna for the Class B Shares relative to the market price of the Subordinate Voting Shares.”

Then OSC went on to say, “It is clear that the Special Committee (of the Magna Board) was aware and concerned that the premium being paid to the Stronach Trust under the Proposed Transaction is considerably in excess of the premiums paid on other transactions collapsing multiple voting share structures.”


Under a Magna Board approved plan, the Stronach Trust would receive $300 million in cash and 9 million Class A shares for the Class B stock that currently gives the family roughly 66% of voting rights at the Canadian auto parts maker. The deal values Stronach’s payout at $927 million. In New York Class A is trading at about $70 a share.


Ford Planning Massive Asian, African Investments

Like GM, Dearborn maker sees growing global opportunities.

by on Jun.25, 2010

Ford will build a new plant in Thailand to produce the latest version of its Focus.

Hoping to make up for lost time in some of the world’s fastest-growing automotive markets, Ford Motor Co. will be making investments that could total near $1 billion in Asia and Africa.

The investments, which include $450 million for a new plant in Thailand, as well as a yet-to-be-detailed expansion in South Africa, will help Ford not only serve those strong national markets, but expand exports to surrounding markets.

Global Insight!

“Frankly, we’re maxed out,” said Joe Hinrichs, Ford’s president for Asia-Pacific and African operations.  “We have more potential than we can build,” he said during an announcement in Bangkok.