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September Car Sales Post Unexpected Surge

Surprisingly strong month suggests recovery in the offing.

by on Oct.01, 2010

Sales of the Ford Transit Connect nearly doubled in September, suggesting a recovery on the small business side of the economy, Ford Marketing Chief Jim Farley said.

What seemed likely to be, at best, a mediocre month has turned out to be an unexpectedly solid sign pointing to a recovery of the struggling U.S. auto market, industry experts and analysts say.

Detroit makers, in particular, reported significant gains for September – Ford sales up 46%, year-over-year, Chrysler up 61% — but, with rare exception, the entire industry seemed to have gained momentum during the final portion of the month, according to those who track dealer activity.

In fact, Audi’s record September volume helped it report an all-time record for the entire third quarter. Japanese maker Subaru also announced it had set an all-time September sales record, gaining 47% compared to the same period a year ago.

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In an exclusive interview at the Paris Motor Show, Ford Global Marketing Director Jim Farley told that he is “encouraged with our performance” in September.  All the more significant, he stressed, was what Ford saw on the light truck side of the business.  Its Transit Connect van, for example, nearly doubled sales, mostly to small businesses.  Echoed by similar numbers at other makers, the executive suggests “that is a sign small business is coming back.”


Ford Will Build a Second Engine Plant in China

Chinese industrial policy prompts $500 million JV reinvestment.

by on Sep.27, 2010

Reinvesting in China is mandated by an industrial policy that in practice requires it .

Ford Motor Company and its government dictated partners are building new engine plant in China that is due to open in 2013. With the additional capacity of 400,000 units at the new facility, Ford’s joint venture, Changan Ford Mazda Automobile Ltd (CFMA), is more than doubling its existing engine capacity of 350,000, to 750,000 engines annually.

Ford Motor Company CFO Lewis Booth joined Chongqing Mayor Huang Qifan, Chongqing New North Zone Administrative Committee Director Xiong Xue, Chongqing Changan Automobile Company chairman Xu Liuping, as well as Ford China chairman and CEO Robert J. Graziano in Chongqing at an official signing ceremony over the weekend.

China is now by far the world’s largest auto market, and Chinese industrial policy in effect requires that all profits earned there are reinvested in the country and its local partners. The U.S. remains alone among industrialized nations – with elected or totalitarian governments – without any such job and investment protecting policy.

The $500 million (RMB 3.4 billion) investment will be funded entirely by CFMA and will be located in Chongqing’s so called New North Zone.


Saab Electric Vehicle Debuts in Paris

Saab 9-3 ePower to be latest demo program in Sweden.

by on Sep.21, 2010

The question remains is there a mass market for EVs or just an endless series of demonstrations?

Saab Automobile is taking its first step toward developing an all-electric vehicle and plans to show off an experimental Saab 9-3 ePower at the Paris Auto Show at the end of the month.

While Saab has been independent for a short time, what’s scheduled to be unveiled in Paris is a prototype for a test fleet of 70 vehicles which will participate in extensive field trials in Sweden early next year, Saab officials said.

Jan Ake Jonsson, Saab Automobile’s CEO, said, “By 2015, annual global sales of electric vehicles are expected to reach 500,000 units and Saab is determined to be represented in this important, growing segment


“The 9-3 ePower program is our first step towards developing a potential production vehicle that will deliver the sort of advanced performance our customers expect,” Jonsson said. (more…)

Saturn Homecoming! Jobs Return to Spring Hill

Investment assumes successful “incentive negotiations” with local and state officials General Motors claims this morning.

by on Sep.17, 2010

Cost per taxpayer subsidized job will be controversial no doubt - the reason they weren't announced?

General Motors Company today promised to spend $483 million of taxpayer money and return 483 jobs of the 2,000 lost to its former Saturn plant complex in Spring Hill Tennessee.

There’s a catch though. This investment assumes successful “incentive negotiations” with local and state officials, according to Mark Reuss, GM North America President.

That these negotiations were not completed ahead of today’s press conference shows how leery elected officials are of a taxpayer revolt that is underway less than two months before the mid-term Congressional elections. Another – perhaps more plausible – theory is that the incentives are likely in place, but the politicians don’t want to admit to them before November.

As TDB previously reported, the jobs come from building current – and ultimately next-generation – Ecotec four-cylinder engines, as GM shifts its emphasis from larger and more fuel thirsty V6 and V8 engines. If the deal comes off,  GM would triple its North American production volume of four-cylinder engines with direct injection technology by 2012 when more stringent fuel economy rules start to take hold.  (See Unloved Ex Saturn Plant to Get New Ecotec Engine)

In a statement GM claimed that the additional work would bring to almost $2.9 billion the amount of new U.S. investment and 7,417 jobs that GM has created or retained in 20 U.S. plants since emerging from a controversial taxpayer financed – more than $50 billion –  bankruptcy in July 2009. (Hundreds of thousands of GM jobs were eliminated during the past two years, if you’re keeping score.) Employees filling these positions will be recalled in accordance with the United Auto Workers-GM National Labor agreement, which favors seniority not performance.


Hyundai to Build New Headquarters in California

Current Fountain Valley Site will be refurbished. Lucky land?

by on Sep.16, 2010

The fifth largest auto company in the world expands again.

Hyundai Motor America confirmed yesterday that it will invest $150 million in a new North American headquarters on the site of its current complex in Fountain Valley, California.

The announcement came after a meeting between California Governor Arnold Schwarzenegger and Hyundai Motor Company Chairman Mong-Koo Chung, who heads the fifth largest auto company in the world.

Orange County – where Fountain Valley is – has been Hyundai’s home since its arrival in the United States in 1985. Hyundai will invest about $150 million, the largest investment ever made by Hyundai in the state.

During the approximately two-year project, it is estimated that as many as 1,530 new construction jobs will be created with a $273 million total economic output, according to the Los Angeles County Economic Development Corporation.

It will also double the space of the current headquarters and provide room to double the growing  auto company’s corporate staff to about 1,400 employees, according to John Krafcik, chief executive of Hyundai Motor America.

“We think this is the best place to plan and design our vehicles. It is still a center of innovation for North America,” Krafcik said.


Unloved Ex Saturn Plant to Get New Ecotec Engine

GM North America President Mark Reuss and Tennessee Governor Phil Bredesen make announcement this Friday.

by on Sep.15, 2010

Some jobs returning to the under-used Spring Hill complex are better than none.

General Motors Company said today in a media invitation that it will make a powertrain investment announcement in its Spring Hill complex in Tennessee at 10 a.m. central time Friday.

The sprawling plant is only partially used since now defunct Saturn models were transferred to a now closed plant in Delaware and the Chevrolet Traverse model was moved out of state to Michigan.

Informed opinion from multiple sources has it that Spring Hill will make an upgraded version of the “Ecotec” four-cylinder engine in anticipation of increased need for more fuel efficient engines as more stringent emission and fuel economy regulations take hold starting in 2012.

The plant already makes four-cylinder engines for the popular Chevrolet Equinox and GMC Terrain midsize crossover vehicles, and the Buick LaCrosse full-size sedan. Industry observers have it that GM is about to phase out larger and more fuel thirsty V6 and V8 engines in many of its models.

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Mark Reuss, GM’s North America president; Joe Ashton, United Auto Workers vice president – GM Department and governor Phil Bredesen will be at the press conference. UAW members are privately saying that some 400 laid-off workers will return to work.


Chrysler Teases 2011 200 Sedan

Mid-size replacement for the unlamented Sebring on way.

by on Sep.14, 2010

The 2009 200C - concept - was billed as an electric vehicle, whose fate is unknown.

Chrysler Group LLC today released photos of the new 2011 Chrysler 200 mid-size sedan that will replace the Sebring when it goes on sale late this year.

The tightly cropped photos of the revised car show that it borrows some cues from the 200C EV Concept that appeared at the 2009 North American International Auto Show in Detroit as the company was on the verge of bankruptcy.

A companion Dodge model was also shown at that time, but no word on the fate of the Dodge or whether an electric version promised then will ultimately appear. It is a reasonable assumption that the Dodge car line is on its way to extinction.

It's a good assumption that the production 200 when revealed will use the rest of the concept's cues.

Chrysler says that virtually every system in the sedan is new or upgraded for 2011, giving the Chrysler 200 its own identity and space in the highly competitive mid-size sedan segment that Toyota, Honda and Nissan dominate.

Exterior and sheet metal upgrades include: front and rear fascias and fenders, a grille featuring the new Chrysler brand winged badge, hood, rear deckled and exterior mirrors, new projector headlamps and fog lamps, new LED taillamps and a LED center high-mounted stop light.

The Chrysler 200 also has  a revised powertrain lineup with a  2.4-liter I4 engine  mated to either a four- or six-speed automatic transaxle, or the new Pentastar V6 engine which produces 283 horsepower and 260 lb.-ft. of torque and is mated to a six-speed automatic transaxle.


First Drive: 2011 Honda Odyssey Minivan

Number one for good reasons and revised to stay there.

by on Sep.09, 2010

Like all automakers Honda is attempting emotional styling. The real rational story is on the inside.

The success of the minivan was likely the reason for the subsequent irrational success of sport utility vehicles. Minivans screamed “mom-mobiles,” sending the kids raised in them – as well as more fashion conscious suburbanites – into hard riding, gas guzzling trucks to avoid the perceived stigma. Then when “crossovers” appeared, the easier riding, more fuel-efficient van segment took a further hit. Sales dwindled, and mainstream makers such as General Motors and Ford Motor (given their badly outclassed products) abandoned minivans entirely. No surprise then that during the last six years, sales of minivans have plummeted from more than 1.1 million units annually to about 500,000 today.

Minivans are now largely a three, maybe four company contest, depending on your bias. Honda with its Odyssey has led in sales for most of the past decade, averaging 145,000 annually over the last five years, but tracking at 100,000 today in a depressed market. Still, this allows it to retain leadership, but it is down significantly from more than 170,000 Odysseys sold in 2006 and 2007. Chrysler, even though it invented the modern minivan back in the 1980s, lags Honda by roughly 10,000 units a year on its Town&Country and Dodge Caravan models taken separately, although if you add the two together, it leads. Then there are, arguably, the real competitors in many shopper’s minds, the Toyota Sienna, refreshed last year, but still lagging aging Odysseys sales, and the also old Nissan Quest, due to be replaced next year.

Honda is placing a couple of large bets with the 2011 Odyssey, a heavily revised version of  its third generation people hauler that appeared in 2005. I do mean large.

No other current minivan interior comes close for packaging efficiency and versatility.

The new Odyssey is wider and longer than its predecessor, in a calculated effort to take minivan utility even further. To be fair, it is also lower and more efficient in a powerful demonstration of incremental engineering changes compounding into a salubrious effect. Moreover unlike Detroit automaker engineering habits, Honda took weight out in the process.


GM’s Fired Fritz Henderson Surfaces at Sunoco

Henderson will become Chairman and CEO of SunCoke Energy.

by on Sep.07, 2010

Then GM CEO Fritz Henderson announces the Chevrolet Volt, the electric car designed to put oil companies out of business.

Sunoco, Inc. has announced that Frederick A. “Fritz” Henderson has joined the company as a senior vice president to help prepare for a previously announced separation of SunCoke Energy from parent Sunoco.

Coke is a key ingredient in steel, of course, a material that auto companies are large purchasers of during their often contentious relationships with suppliers.

Sunoco said last June that  it would separate SunCoke Energy from itself as part of a well-worn Wall Street strategy “designed to unlock shareholder value.” This type of financial engineering ploy clearly didn’t work in the now notorious auto industry captive  component maker spinoffs – GM’s Delphi and Ford Motor’s Visteon. Both transactions ultimately resulted in bankruptcies and costly shareholder losses.

SunCoke facilities in the U.S. have the capacity to manufacture approximately 3.67 million tons of metallurgical coke annually – roughly 25% of domestic production. Sunoco also has an equity interest in a 1.7 million tons-per-year coke-making facility in Vitoria, Brazil.


Tim Allen to be the New Voice of Chevrolet

TV celeb debuts next week in spots. Howie is, well, Long gone.

by on Sep.03, 2010

Cruze is a $17,000 to $25,000 offering that GM hopes will take some sales back from the Toyota Corolla and Honda Civic.

TV and movie celeb Tim Allen will be the voice of Chevrolet starting with advertising for the all-new 2011 Cruze starting next Tuesday.

Allen displaces Howie Long, who is currently running on regional 2010 model year clearance spots and has been a Chevrolet spokesperson since 2004.

The classic Friday afternoon release made no mention of Long.

However, Joel Ewanick, the new vice president, U.S. marketing at General Motors, who recently jumped from Nissan after a brief stint there – literally weeks – following a gig at Hyundai, said, “Tim Allen brings the right combination of a recognizable voice with the credibility, likeability and humor that will connect with viewers.”

The change is indicative of the ongoing turmoil at GM, which is struggling to prove that it can increase its share post bankruptcy with an impending Initial Purchase Offering of stock due in the fourth quarter.