Automotive News - September 1, 2008 - (Page 1) autonews.com ® SEPTEMBER 1, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Auto ad spending plummets More money shifts from TV and print to the Internet Mary Connelly mconnelly@crain.com Automotive advertising is headed for its lowest level in nine years, even as more money is shifting from TV and print media to the Internet. The downturn is the result of efforts by automakers and dealers to cut expenses in a soft market. This year, automakers and dealers will spend about $15 billion to advertise in U.S. media, the Wall Street research firm Sanford C. Bernstein & Co. estimates in a new report. That’s down 16 percent from 2007 and the lowest total since 1999, says Bernstein senior analyst Model Carmen Electra appeared at a GM fashion show during the 2006 Academy Awards. GM is cutting back on sponsorships of big events such as the Oscars. Michael Nathanson. Bernstein Research projects that auto advertisers will spend an average of $1,057 for every new vehicle sold in 2008,down 19 percent from the peak in 2004. “TV stations and local newspapers will lose the most advertising dollars, followed by broadcast networks,” Nathanson predicts. In the first three months of 2008, according to a separate study by TNS Media Intelligence, car companies and dealers spent about $3.63 billion on U.S. advertising. Automakers accounted for 54.7 percent of that spending, compared with 29.9 percent by dealerships and 15.4 percent by dealer associations. Compared with the year-ago quarter, TNS says, factory ad spending dropped 14.5 percent, while dealership spending declined 6.8 percent and dealer association spending fell 4.1 percent. see AUTO ADS, Page 27 Looking for a great deal on a Viper Who wants to buy the Dodge Viper sports car business? Chrysler CEO Bob Nardelli says he has heard from several potential suitors, but he’s not naming names. | PAGE 6 | American Axle to grow outside U.S. Robert Sherefkin and David Barkholz rsherefkin@crain.com This stylish sedan is a lightly camouflaged 2011 Kia Amanti prototype. Dems talk autos in Denver Staff Reporter Harry Stoffer followed auto people and tracked automotive issues at last week’s Democratic National Convention. Barack Obama and John McCain don’t see eye-to-eye on a proposed federal law that would make it easer for unions to organize workers. | PAGE 4 | DETROIT — American Axle & Manufacturing Holdings Inc. plans to slash its U.S. investment and pursue growth overseas as part of a recasting of the company, according to internal documents obtained by Automotive News. The Detroit driveline company plans to spend $73.0 million on its U.S. operations this year to support new products and contracts, but just $30.3 million next year. By contrast, its international investment is expected to reach $162.3 million this year and $189.7 million in 2009. BRENDA PRIDDY & CO. Korean cars with a U.S. touch Hyundai and Kia have refocused their product strategies to fit the changing times. Meanwhile, many of the plans by Chinese automakers to export cars to the United States are in disarray. A comprehensive review of future products from Korea, China and India starts on Page 17. After a series of upmarket models, the next batch of new Hyundais will be smaller, more fuelefficient and less expensive. Page 18 U.S. designers take charge of Kia’s next-generation vehicles. Page 17 Plans by Chinese automakers to enter the United States have largely fizzled. Page 19 Mahindra has delayed the introduction of its pickup. Page 19 Obama: ‘I’ll help our auto companies retool’ for fuelefficient cars. | PAGE 8 | Convention notebook | PAGE 25 | Foreign flip-flop Facing headwinds from weak truck sales here, American Axle forecasts international revenues will top U.S. revenues for the first time in 2010. By 2013, international revenues will total $2.64 billion — more than double projected U.S. revenues of $1.2 billion, the documents show. CEO Richard E. Dauch is placing his bets beyond U.S. borders. Between this year and 2013, the documents show, he plans to spend $1.04 billion outside the United States. That compares with $219.5 million for American Axle’s U.S. plants. “Our U.S. spending reflects the flat U.S. growth versus the rapidly growing international market,” said Renee Rogers, an American Axle spokeswoman. She said the figures obtained by Automotive News are part of a “livsee AXLE, Page 26 Hyundai’s 2010 Genesis coupe will draw heavily on this sporty concept. Comment: ‘Both sides package ideas with the harshest and most overblown rhetoric imaginable.’ | PAGE 30 | ‘Mr. Big Volume’ hit again Bill Heard loses GMAC credit, faces new allegations in Ga. April Wortham awortham@crain.com Tracking August sales on the Web This week at www.autonews.com: Tuesday: Sales forecasters say U.S. consumers stayed away from dealerships in droves last month. As automakers report their August numbers throughout the day, we’ll have up-to-the-minute coverage. Tuesday: We’ll report on the big-name speakers at The Elite Dealer Summit in New York. All week: We’re tracking all things automotive at the Republican National Convention in St. Paul, Minn. Bill Heard has taken a one-two hit from his largest creditor and a Georgia watchdog agency. The legal and financial troubles threaten “Mr. Big Volume,” a title he claims as the world’s top-selling Chevrolet dealer. On Aug. 21, GMAC Financial Services discontinued its floorplanning line of credit to Bill Heard Enterprises Inc. over what a Heard spokesman called a “financial matter.” GMAC finances new-vehicle inventory at some of Heard’s 14 dealerships in seven states. One day later, the Georgia Governor’s Office of Consumer Affairs filed an amended counterclaim to a lawsuit pending in an Atlanta court. The counterclaim accuses Bill Heard Enterprises and its dealerships of continuing their “long-standing pattern of attempting to deceive Georgia con- NEWSPAPER sumers in violation of the Fair Business Practices Act.” All 14 Bill Heard Enterprises stores sell General Motors vehicles, but some rely on independent lenders for floorplanning. The GMAC action covers all the stores the lender finances. Neither GMAC nor Bill Heard Enterprises would say how many stores are affected. GMAC declined to comment on Heard specifically. “We do regular reviews of credit risks related to the wholesale financing of our business, and we take appropriate measure to see HEARD, Page 26 http://autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - September 1, 2008 Automotive News - September 1, 2008 'Mr. Big Volume' hit again Auto ad spending plummets American Axle to grow outside U.S. Nissan, Renault aim to share more parts Steven Ribet joins Automotive News in Shanghai Salaried workers face the ax Asbury to challenge verdict Lutz wants loan guarantees VW passes Ford as No. 3 global seller in 1st half Suzuki in disguise Dodge hopes smooth ride of coil springs will distinguish Ram Candidates split on union organizing bill Check in the mail? Toyota, Ford can tell 10 CTS stays true to concept GM shifts some vehicle design work to U.S. Infiniti may add cars, big and small BMW slashes production of big engines Toyota cuts sales forecast Chrysler: Viper lures suitors Honda hybrid plan bets big on small cars Ford starts L-M consolidation meetings Obama renews aid offer — industry wants it now Honda taps rainwater to create wetlands U.S. loans could make sense, but can't be a bailout Wanna buy a car? Wanna buy a brand? PPG story recalls Exner's Imperial Toyota goofed on Scion; is Prius next? Editor grows up; import vet pleased Field reps blamed for GM's problems Honda Insight engine isn't noiseless Trucks, Vette fine; rest of GM, blah Reynolds to dealers: Replace aging servers by year end Saddle up! Dem delegates honor slain Arkansas dealer Kia makes a mark of its own Koreans step up; Indians step cautiously; Chinese step back The next batch of new Hyundais: Smaller, more fuel efficient To give fuel economy a boost, Hyundai spends big on r&d U.S. plans fizzle for most Chinese vehicles Mahindra delays U.S. retail launch until 4th quarter of '09 Dealers Personnel Despite tough times, Galpin profits by pimping rides Web service leads grow Uh, I didn't mean to say you should retire Remembering Phil Hill, racing's modest giant Mulally to speak at gadget show GM picks Volt battery supplier Split verdict in fraud case July auto output was up in Japan Bob Fisher Dems reopen the CAFE Hummer, king of the desert? MG remains a no-show in North America Mustang silly Protests could bring ta-ta from Tata The politicians (and I) need a new road map Welburn's design journey began in Philly Automotive News - September 1, 2008 Automotive News - September 1, 2008 - (Page Intro) Automotive News - September 1, 2008 - American Axle to grow outside U.S. (Page 1) Automotive News - September 1, 2008 - American Axle to grow outside U.S. (Page 2) Automotive News - September 1, 2008 - Suzuki in disguise (Page 3) Automotive News - September 1, 2008 - 10 CTS stays true to concept (Page 4) Automotive News - September 1, 2008 - 10 CTS stays true to concept (Page 5) Automotive News - September 1, 2008 - Chrysler: Viper lures suitors (Page 6) Automotive News - September 1, 2008 - Chrysler: Viper lures suitors (Page 7) Automotive News - September 1, 2008 - Obama renews aid offer — industry wants it now (Page 8) Automotive News - September 1, 2008 - Obama renews aid offer — industry wants it now (Page 9) Automotive News - September 1, 2008 - Honda taps rainwater to create wetlands (Page 10) Automotive News - September 1, 2008 - Honda taps rainwater to create wetlands (Page 11) Automotive News - September 1, 2008 - Field reps blamed for GM's problems (Page 12) Automotive News - September 1, 2008 - Field reps blamed for GM's problems (Page 13) Automotive News - September 1, 2008 - Trucks, Vette fine; rest of GM, blah (Page 14) Automotive News - September 1, 2008 - Saddle up! (Page 15) Automotive News - September 1, 2008 - Dem delegates honor slain Arkansas dealer (Page 16) Automotive News - September 1, 2008 - Koreans step up; Indians step cautiously; Chinese step back (Page 17) Automotive News - September 1, 2008 - To give fuel economy a boost, Hyundai spends big on r&d (Page 18) Automotive News - September 1, 2008 - Mahindra delays U.S. retail launch until 4th quarter of '09 (Page 19) Automotive News - September 1, 2008 - Personnel (Page 20) Automotive News - September 1, 2008 - Web service leads grow (Page 21) Automotive News - September 1, 2008 - Web service leads grow (Page 22) Automotive News - September 1, 2008 - Web service leads grow (Page 23) Automotive News - September 1, 2008 - Web service leads grow (Page 24) Automotive News - September 1, 2008 - Uh, I didn't mean to say you should retire (Page 25) Automotive News - September 1, 2008 - Uh, I didn't mean to say you should retire (Page 26) Automotive News - September 1, 2008 - July auto output was up in Japan (Page 27) Automotive News - September 1, 2008 - Bob Fisher (Page 28) Automotive News - September 1, 2008 - Bob Fisher (Page 29) Automotive News - September 1, 2008 - Welburn's design journey began in Philly (Page 30) Automotive News - September 1, 2008 - Welburn's design journey began in Philly (Page 31) Automotive News - September 1, 2008 - Welburn's design journey began in Philly (Page 32)
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