Automotive News - March 9, 2009 - (Page 1) autonews.com ® MARCH 9, 2009 Entire contents © 2009 Crain Communications Inc. All rights reserved. $159/YEAR; $5/COPY Sliding sales push makers to slash output Jesse Snyder jsnyder@crain.com What’s happening at the Geneva show? In Geneva, automakers showcased their electric cars, but high-wattage hype did not conceal the vehicles’ short range. Page 8 For more coverage: More sales stories, tables ➤ 41-43 PHILIP MEECH As February U.S. sales fell to the lowest annualized rate in 27 years, automakers are slashing production in a desperate effort to control inventories. Manufacturers will produce only 4.1 million vehicles in North America in the first six months of 2009, down 41 percent from a year earlier, according to a forecast by IHS Global Insight. February’s abysmal U.S. sales have given automakers a sense of urgency. Earlier, auto executives had hoped that sales had bottomed out at an annualized rate of 9.5 million units. But February sales plunged to 689,794 units, down 41.4 percent from a year earlier, for an annualized rate of 9.1 million. To control inventories, all automakers are slashing production, and some are offering big incentives. No relief Forecast for North American vehicle production for the first 6 months of 2009 vs. year-ago levels % CHANGE The controversial Lagonda: Love it? Hate it? Page 8 Show-car photos, Page 36 The iosis Max previews Ford’s global look, Page 37 View photo gallery at Kia’s No 3 minivan concept has a glass roof. autonews.com Defying the slump: A Great Plains boom Despite a nationwide sales collapse, Steve Henderson, above, and many other dealers in the Great Plains region are prospering. The reason: Robust crop prices, and farmers willing to spend some of their profits on new vehicles. | PAGE 4 | Chrysler LLC Ford Motor* GM American Honda Nissan N.A. Toyota Motor Sales – 48% – 41% – 32% – 36% – 35% – 18% * Includes AutoAlliance production Source: IHS Global Insight, Automotive News Discount king In February, Chrysler LLC emerged as the discount king, with incentives averaging $5,566 per vehicle. At the other extreme was Honda, which slammed the brakes on production while offering incentives of just $1,249 per vehicle. Here is a company-by-company summary of February sales: Toyota’s sales plummeted 39.8 percent last month compared with the same period a year earlier. Toyota piled on the incentives with little to show for the effort. The automaker’s trucks were terrible performers. Tundra sales plummeted 60.2 percent, see SALES, Page 43 See how they run The Detroit 3’s once-dominant finance companies have been overtaken by the import automakers’ captive lenders. Get the details in our Insight section on finance and insurance. | PAGE 18 | Amid storms, dealer group swiftly expands Arlena Sawyers asawyers@crain.com Hesterberg PHILIP MEECH Kurnick In the teeth of a recession that has forced hundreds of U.S. auto dealerships to close, a group of investors headed by entertainment magnate Robert Johnson is rapidly building a retail empire. With partners Thomas “Mack” McLarty III — a business executive and former White House chief of staff under President Bill Clinton — and Arkansas dealer Steve Landers, Johnson has assembled a group of 16 dealerships in seven states since the fall of 2007. RLJ-McLarty-Landers Automotive Partnership also plans to open four dealerships — two Nissan, two Chrysler-Dodge-Jeep — at new stores in Texas within 14 months. And just last week, the private partnership reopened a Chevrolet dealership in Huntsville, Ala., formerly Robert Johnson says he has the cash to buy stores at bargain prices. owned by bankrupt Bill Heard Enterprises Inc. The Little Rock, Ark., company seeks to buy other Detroit 3 and import-brand dealerships, says Johnson, the billionaire founder of the Black Entertainment Television cable network. “Unlike some other dealerships, and minority dealerships in particular, we are well-capitalized to take advantage of unique opportunities,” Johnson told Automotive News. “Some of these values you won’t see see JOHNSON, Page 43 The dealer speaks Two top executives of public dealership groups — Earl Hesterberg of Group 1 Automotive and Rob Kurnick of Penske Automotive — talk about cutting costs and jobs, selling online, boosting service and parts business and otherwise battling the industry recession. | PAGES 34-35 | Rolls-Royce’s 200EX concept previewed the “baby Rolls” scheduled for 2010. Beneath all the glitz, panic prevailed Nice cars, sure — but when will the buyers be back? Richard Johnson rjohnson@crain.com GENEVA — At first glance it looked like any other Geneva auto show — the industry’s annual feel-good festival and luxury-car cabaret. Rolls-Royce makes its big splashes here and did so again with the 200EX. Aston Martin revived the long-dormant Lagonda brand, and Infiniti uncorked a curvaceous luxury coupe. Yet hardly a conversation on the floor of the Palexpo last week strayed from the global sales collapse. Beneath the veneer, auto execu- tives were panicking. Talk centered on grand old companies being spun off, sold or killed. Even the bit of good news for European exporters — the euro’s easing against the dollar — wasn’t cheering anyone. Sure, there was brave talk of a recovery led by the great cars on display. But who will buy these cars, industry pros kept asking. It’s as though Geneva was out of focus. Cars that went into development in the placid days of two or three years ago seem wildly out of sync with the times. On the Web This week at autonews.com: NEWSPAPER Product delays In meeting rooms behind show stands, grimacing executives talked of pain and sacrifice. They spoke of desee GENEVA, Page 44 Monday: The U.S. auto task force, led by advisers Steven Rattner and Ron Bloom, meet auto and labor leaders in Detroit. http://www.autonews.com http://www.autonews.com http://www.autonews.com
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