Automotive News - June 9, 2008 - (Page 3)

JUNE 9, 2008 • 3 82nd year — No. 6311 Battery shortage hurts hybrid sales Richard Truett rtruett@crain.com CAW to consider strike against GM DETROIT — Canadian Auto Workers President Buzz Hargrove said Friday the union will decide as soon as this week whether it will strike General Motors, which upheld its decision to close a truck plant in Oshawa, Ontario. In a private meeting here earlier Friday, CEO Rick Wagoner told Hargrove that GM is standing by the plant closure, expected in September 2009. “We’re going to explore all avenues available and decide whether, what and if action is going to take place,” Hargrove told Automotive News. The Oshawa plant, which employs 2,600 workers, is one of four lighttruck plants GM said last week that it will close. GM declined to comment about a possible strike. — Craig Trudell Mazda extends warranty on RX-8 rotary engine LOS ANGELES — Mazda North American Operations will extend the warranty on the rotary engine for the RX-8 sports car to 8 years/100,000 miles. The warranty takes effect on the 2009 model and is retroactive for the 2004-08 model years. It covers the rotary engine core, rotary housing and internal parts, as well as the internal seals and gaskets, according to a letter sent to dealers that was obtained by RX8club.com. RX-8 owners who have repaired their engines in the period covered by the extended warranty can make a claim for reimbursement, the letter states. — Mark Rechtin With gasoline at $4 a gallon, the market is screaming for more hybrids. But sales of hybrids dropped significantly in May. Battery shortages are crimping supplies of the Ford Escape Hybrid and Toyota Prius, two of the top-selling hybrids. Prius sales dropped 37.5 percent in May to 15,011 compared with May 2007. Combined sales of the Escape Hybrid and its stablemate, the Mercury Mariner Hybrid, dropped 26.0 percent to 2,378 last month. General Motors’ big SUV hybrids are not selling well because of their high prices and limited fuel savings. For the Escape and Mariner hybrids, Ford Motor Co. can get about 25,000 battery packs a year from Sanyo Electric Co., its Japanese supplier. Ford is on track to produce about that many Escape and Mariner hybrids in 2008. “I think we have something like 700 of them in stock, and something like 400 of them are in California. Try to find one in Florida. I think there were nine in the whole state,” George Pipas, Ford’s sales analyst, told Automotive News. Ford can get about 25,000 battery packs a year for the Ford Escape Hybrid, shown, and its stablemate, the Mercury Mariner Hybrid. Needed: Hybrid batteries A battery shortage is crimping hybrid sales. MAY 2008 SALES % CHANGE FROM MAY 2007 tion plans. But GM expects to crank up hybrid production in the fall. GM’s hybrid cars have been in high demand in part because the option costs less than $2,000. They are mild hybrids; that means the electric motor assists propulsion, but the cars can’t run on battery power alone. The Chevrolet Tahoe Hybrid and GMC Yukon Hybrid are more efficient full hybrids; that means they can run on batteries alone. They have sold slowly in part because their stickers are high. The Tahoe Hybrid starts at $50,490, including shipping. Its fuel economy is 50 percent better than that of the standard Tahoe but still modest at 21 mpg city and 22 mpg highway. Only about 1,000 Tahoe Hybrids and Yukon Hybrids have been sold this year. Toyota Prius Toyota Camry Hybrid Ford Escape Hybrid Mercury Mariner Hybrid 15,011 5,999 2,139 239 –37.5 –12.5 –20.2 –55.2 supplier, Cobasys. (See story, Page 8.) A battery recall in December forced GM to replace about 9,000 faulty battery packs from Cobasys in 2007 model vehicles. GM used batteries destined for 2008 vehicles to repair the recalled models, causing a battery shortage this year. GM likely will be short of the Malibu and Saturn hybrids for the rest of the summer, according to a source familiar with GM’s hybrid produc- Needed: More batteries Toyota’s Carter denied a suggestion from a reporter that his company was deliberately holding down its Prius supply to encourage customers to buy other models with higher profit margins. The 15,011 Priuses sold in May compare with 24,009 in May 2007. The Camry Hybrid also was down in May with sales of 5,999, down 12.5 percent from a year ago. “We’re pushing for every bit of production we can get,” Carter said. “We’re working very closely with our suppliers to increase that capacity.” c Prius shortage Bob Carter, the head of Toyota’s U.S. operations, said limited supplies hobbled Prius sales. “A year ago, our supplies were at record level in Prius,” he said. “Now we’re in that catch-up mode.” Toyota couldn’t ramp up battery production fast enough to build enough Priuses to meet demand, Carter said. Hybrids use an internal combustion engine and one or more electric motors to power the wheels. GM has had trouble launching hybrid versions of the Saturn Vue and Aura and Chevrolet Malibu this year because of problems at its battery Toyota may add Camry to Indiana truck plant Toyota is considering adding production of its strong-selling Camry to its underused light-truck plant in Princeton, Ind., a supplier source says. Mike Goss, spokesman for Toyota Motor Engineering & Manufacturing North America, would not confirm the plan. But he said, “We are looking at a lot of things to balance production.” In May, 51,291 Camrys were sold. The car is assembled in Georgetown, Ky., and on a dedicated line at Subaru of Indiana Automotive Inc. in Lafayette, Ind. Falling sales of the Tundra full-sized pickup have resulted in lower production at Toyota’s two-shift Princeton plant. — Lindsay Chappell ■ Porsche’s new 911 Two days after the current 911 received J.D. Power and Associates’ 2008 initial quality crown, Porsche disclosed details on the updated 2009 model coming in September. Four new 911 Carrera versions will feature more powerful engines that for the first time get direct fuel injection. The 2009 911 also gets Porsche’s new seven-speed double-clutch gearbox. Porsche will boost the price of the new 911 by $2,100 for the entry Carrera Coupe, to $76,460, including shipping. The price of the costliest Carrera, the S Cabriolet, will be increased by $2,700 to $97,660. 2 key overseas staffers move to Automotive News in U.S. DETROIT — Two overseas staffers within the Automotive News Group have new assignments in the United States. Jesse Snyder, a longtime editor at Automotive News Europe, has moved to Detroit to become a senior writer at Automotive News. Snyder, 59, worked at Automotive News Europe for seven years, first in London and then in Germany after the publication moved its editorial offices to Oberpfaffenhofen, near Munich. He was executive editor of Automotive News Europe before reDetroit bureau chief for Advertising Age. From 1986 until 1990, he was Los Angeles bureau chief for Automotive News. Later, Snyder was director of product planning for AutoFacts, now the PricewaterhouseCoopers Automotive Institute, before joining Thomson Financial in 1995 as group managing editor and associate publisher for a group of financial services publications. He rejoined Crain in 2001. Alysha Webb, Automotive News’ China bureau chief since 2005, has moved from Shanghai to Los Angeles. In her new assignment, Webb will report on dealers and retail issues. She worked for Automotive News as a freelance writer from 2001 to 2005. Previously, she covered the region for BusinessWeek, The Asian Wall Street Journal and Bridge News. Webb, 45, is a Texas native who earned a bachelor’s degree in political science at Rice University, a master’s degree in international management studies at the University of Texas and a master’s in China studies at the University of Washington. c CORRECTIONS A story on Page 30N in some editions of the June 2 issue gave the wrong title for Armando Tamez. He is Nemak’s CEO for North America. A story on Page 54 of the June 2 issue gave the wrong first name for John Felice, general marketing manager of Ford division. Snyder: Senior writer in Detroit Webb: Staff reporter in L.A. turning to the United States recently. Snyder, a Michigan native, first joined Crain Communications in 1983 as a reporter and later was the http://RX8club.com

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Automotive News - June 9, 2008 Hummer Bummer: A death sentence? New F-150, Ram in peril as big pickups collapse Japanese can add small cars faster than Detroit 3 Battery shortage hurts hybrid sales 2 key overseas staffers move to Automotive News in the U.S. Toyota may add Camry to Indiana truck plant Mazda extends warranty on RX-8 rotary engine CAW to consider strike against GM Porsche's new 911 GM plans big ad push for its big hybrid SUVs Chrysler cuts fees to outside service firms 5% Toyota considering 'Made in U.S.A.' Prius Congress, Bush square off over rollover suits GM finance whiz changed the industry GM's big SUVs may get lighter Harbour Report: Chrysler, Toyota most efficient Spring intros can be dicey Ford spends big on MKS ad launch Media buyer for GM cuts 25 jobs Sources: GM poised to buy Cobasys GM dealer program rebounds Mazda updates the RX-8 New Maxima is a tad smaller — but more buff Congress must balance safety, mpg concerns Is the gas crisis real or just temporary? What about poor driving? There's no substitute for safe driving Lack of regulation foils safety laws Sticker law cleaned up a pricing mess Lithia to sell outlets, delay used-car stores Nielsen likes to step off the beaten path GM union local strives to pull parts jobs in-house JCI will open Ga. plant to supply Kia Dealers: Be open about credit problems Finance venture has $1 billion Picture this Personnel Dealers BMW purchasing chief 'looking for waste' Nissan Mexicana gets new chief Ford Flex output begins Hyundai Genesis: $33,000 Ford buys more from minorities Audi's U.S. chief: Brand can handle high gas prices May in Detroit: Scary, not merry Infiniti FX starts at $41,765 Lincoln: 8,600 MKS orders Plastics supplier sees growth Jenkins gets Aston Martin post Smith is CEO of Jaguar, Land Rover Kremlin watching, Chrysler style Toyota breathing down GM's neck on monthly U.S. sales PR chief Steve Harris: At GM through '08 Small-car surge is a replay of 1979 Auto execs would benefit from some store experience Mini's mixed results: Sales soar, quality stumbles Nice car — so what's the ppmpg? Volt's good PR got struck by lightning

Automotive News - June 9, 2008

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