Automotive News - January 14, 2008 - (Page 6) 6 • JANUARY 14, 2008 Ford: Dealer profits rose significantly in ’07 Amy Wilson awilson@crain.com DETROIT — After several years of sliding returns, net profits rebounded at many Ford and Lincoln-Mercury dealerships in 2007. Ford Motor marketing chief Jim Farley said average dealership profits rose last year. Although he declined to quantify the gains, Farley called the improvements significant. The biggest jump came at Lincoln-Mercury dealerships, he said. The number of money-losing Ford and Lincoln-Mercury dealerships also fell significantly in 2007, Farley said. Farley joined Ford Motor in October as group vice president of marketing and communications. Despite the improvements, average net profits at Ford and Lincoln-Mercury dealerships remain far below previous standards. The 2007 gains resulted largely from lower dealership inventory and reduced floorplan- Ford marketing chief Jim Farley: “Our days supply has been so disciplined throughout the year. That’s part of the virtuous circle we’re trying to create, with a virtuous production plan.” ning costs, Farley said. Ford began slashing vehicle production in late 2006. “Our days supply has been so disciplined throughout the year,” Farley told Automotive News. “That’s part of the virtuous circle we’re trying to create, with a virtuous production plan. And the dealers saw the benefit of that, with expense reductions that were significant.” Ford’s dealership consolidation strategy also contributed to higher profitability. In markets where dealership numbers have shrunk, Ford executives said, sales per dealership and profits are rising. c Lamborghini will create U.S. sales arm Mark Rechtin mrechtin@crain.com LOS ANGELES — Lamborghini will set up a separate sales company in the United States — the first such operation outside Italy for the exotic-car manufacturer. About 40 percent of Lamborghini’s global sales are in the United States, and demand here has been growing. U.S. sales went from 100 in 2001 to 900 last year. In that time, the dealer body expanded from 14 to 30. Automobili Lamborghini America LLC will be headed by Pietro Frigerio, who was regional sales manager for the western United States. The office location has not been decided — it will be either in California or on the East Coast. The new entity will have about 10 staff members. U.S. Lamborghini dealers have dealt directly with the factory in Sant’Agata Bolognese, Italy. Dealers sometimes waited weeks to hear from Italy on topics ranging from service bulletins to special requests for customers. The U.S. sales arm will offer product planning advice to Italy. “Having operations here allows us to be more flexible with our dealers,” Frigerio said. “Dealers are no longer on a one-to-one relationship with their customers. Now they need sales tools, they need an IT system.” For 2008, Lamborghini will extend its U.S. warranty from two years/24,000 miles to three years and unlimited miles. It also will consider a certified used-vehicle program and a captive finance arm. Lamborghini, which is owned by Volkswagen’s Audi unit, sells the Gallardo coupe, which starts at $184,250, and the V-12 Murcielago, which starts at $319,500. c Suppliers: Chrysler hasn’t talked with us Bradford Wernle bwernle@crain.com Ford says the MKT’s exterior shape and much of its content could show up on a production vehicle. Lincoln MKT concept points to a large crossover Amy Wilson awilson@crain.com Lambo’s U.S. growth SALES DEALERS 2001 2005 2007 100 634 900 14 20 30 Lamborghini Gallardo coupe Source: Lamborghini DETROIT — Ford Motor Co. is showcasing its intention to build a large luxury crossover with the Lincoln MKT concept debuting today, Jan. 14, at the Detroit auto show. The MKT concept comes with a highly stylized and richly appointed interior that probably wouldn’t be duplicated in a production vehicle. But the MKT’s exterior shape and much of its content could survive. “It’s as realistic as any,” says Peter Horbury, Ford’s North American design director. Ford executives aren’t talking about production plans for the MKT. But Ford leaders did confirm in January 2007 that the automaker would build a seven-passenger Lincoln crossover. The planned crossover uses the same platform that underpins the 2009 Ford Flex crossover, company sources, suppliers and industry analysts have said. The Flex goes on sale this summer. Timing on the Lincoln version is uncertain, al- Ford design director Peter Horbury: The design team thought of the MKT as “the Learjet of the road.” though it could go into production in 2009. While the Lincoln MKT concept has similar dimensions to the Flex, the MKT’s swoopy styling is a dramatic departure from the upright, boxy Flex. The design team thought of the project as creating “the Learjet of the road,” Horbury says. The concept seats four people and has a huge cargo bay. A production version could accommodate a third row of seating, Horbury says. The MKT boasts a 3.5-liter, flex-fuel V-6 engine with Ford’s EcoBoost technology. With twin turbocharging and direct injection, the engine produces 415 hp and 400 pounds-feet of torque. c DETROIT — Component suppliers say they have had little or no communication with Chrysler LLC since Cerberus Capital Management bought the automaker last summer, an e-mail supplier survey reveals. Only 22 percent of the 90 suppliers surveyed said Chrysler executives had communicated with them since Cerberus took over in May, reports supplierbusiness.com, a research firm in Stamford, England. Of the vendors surveyed, most were direct suppliers to Chrysler. Forty percent had annual sales exceeding $500 million. A number of suppliers said they believe Cerberus ownership will benefit Chrysler. But Chrysler remains too focused on short-term cost savings at the expense of other important issues, including quality, technology and long-term collaboration. “Their sense of desperation is causing them to do foolish things,” said one supplier. “They have few ‘heroes’ that will do the right thing for the product when cost-versus-product decisions need to be made.” The findings present a challenge for John Campi, Chrysler’s new supplier chief. Campi, former Home Depot purchasing chief, moved to Chrysler Jan. 3. A majority of the suppliers surveyed said changes in Chrysler’s purchasing strategy could make a big contribution to improving the automaker’s welfare. Chrysler declined to comment. c There’s a new No. 1 plant: Georgetown Toyota’s sprawling Georgetown factory in Kentucky horse country has taken over as the top-producing vehicle assembly plant in North America. For eight consecutive years, that honor went to General Motors’ Oshawa car plant in Ontario. Georgetown finished on top in 1998, the year a long GM strike knocked the Canadian operation out of first place. Oshawa No. 1 and No. 2 are in the same building so are counted as a single plant. GM’s Oshawa truck assembly is in a separate building and not included. In 2007, Georgetown turned out Oshawa was down mainly because production of the Chevrolet Monte Carlo car ended in June. But LaCrosse, Grand Prix and Impala production were all down, too. Nissan’s Smyrna, Tenn., plant took a tumble last year, slipping to sixth place from third in 2006 and 2005 and second place in 2004. Smyrna output was off 11.6 percent to 410,991 units. Production of the Smyrna-built Maxima, Frontier pickup and Xterra and Pathfinder SUVs all declined compared with 2006. Among Smyrna’s vehicles, only the Altima increased as production of the coupe version began this year. c Factory race Here are North America’s top-producing vehicle assembly plants in 2007. Georgetown moved ahead of GM’s Oshawa car plant into first place. ’07 PRODUCTION % CHANGE FROM ’06 Running the numbers 514,382 vehicles, up 2.1 percent from 2006. Oshawa produced 470,016 units, a decline of 13.5 percent from 2006. Georgetown builds the Toyota Camry, Camry Hybrid, Camry Solara and Avalon cars on two lines. At Oshawa, GM produces the Chevrolet Impala, Pontiac Grand Prix and Buick LaCrosse cars on two lines. 1. Toyota: Georgetown, Ky. 2. GM: Oshawa, Ontario (cars) 3. Honda: Marysville, Ohio 4. NUMMI: Fremont, Calif. 5. Volkswagen: Puebla, Mexico 6. Nissan: Smyrna, Tenn. 7. Honda: Alliston, Ontario 8. Chrysler: Belvidere, Ill. 9. Nissan: Aguascalientes, Mexico 10. GM: Oshawa, Ontario (trucks) *Estimate 514,382 470,016 458,843 407,881 409,566 410,991 390,580 333,077 322,357* 316,082 2.1 –13.5 2.3 -4.8 17.6 –11.6 1.1 68.7 17.5 38.6 Notes: Volkswagen in Puebla added a model, the Jetta wagon; Belvidere and Oshawa truck went through changeovers and ramp-ups.
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