Automotive News - July 14, 2008 - (Page 3)

JULY 14, 2008 • 3 82nd year — No. 6316 Glut of trucks pulls Prius to U.S. Toyota had sought to keep hybrid output in Japan Lindsay Chappell lchappell@crain.com Volvo will tighten U.S. dealer network Volvo plans to cut its U.S. dealer network 30 percent by the end of next year. “This measure will strengthen the remaining dealers,” a company spokesman in Sweden told Automobilwoche — which, like Automotive News, is published by Crain Communications Inc. Volvo blamed massive losses in its U.S. business for the move. Volvo has about 355 dealers in the United States. Doug Speck, president of Volvo Cars of North America, said in April that the company is making progress persuading some dealers to give up their franchises voluntarily. Over the past five years, Volvo reportedly lost 1.1 billion euros ($1.73 billion at current exchange rates) in the United States because of the weak dollar. — Michael Specht Wanted: More mpg Toyota plans to Assemble the Prius in Blue Springs, Miss., at a plant originally scheduled to build the Highlander SUV Consolidate Tundra pickup production next spring in San Antonio Stop Tundra and Sequoia production beginning Aug. 8 until November Plummeting truck sales last week forced Toyota Motor Corp.’s hand on a difficult decision — moving the hotselling Prius hybrid to a U.S. factory. Toyota had been reluctant to let its fast-rising hybrid star get away from its protective watch in Japan. But with consumers shunning pickup trucks and SUVs, Toyota said last week that it will move the Prius not just to America but to a greenfield site in Mississippi with untested workers. The Blue Springs, Miss., plant had been scheduled to assemble the Highlander SUV. Sources familiar with the plans said that only a week before the announcement, Toyota officials were still debating whether Prius production should move to the United States. Because suppliers of its hybrid powertrain parts are in Japan, Toyota had wanted to keep Prius production there. stead. With steel structural beams already standing over the massive building site, Toyota opted to convert the project into a Prius factory. Production will launch in late 2010. Toyota will restyle and re-engineer the car next year. Last week, Toyota dealt with another nagging problem: It will consolidate production of Tundra pickups at San Antonio, starting next spring, instead of having both San Antonio and a plant in Princeton, Ind., continue to build Tundras at rates below capacity. Toyota spent $1.3 billion to open San Antonio in 2006 with expectations that it eventually would sell 25,000 or more of the full-sized pickups a month. The market shift has left Toyota averaging closer to 13,000 a month this year. Toyota also said it will move the Highlander into the underused Princeton plant, starting in fall 2009. And beginning on Aug. 8, it will suspend production of Tundras and Sequoia SUVs until November.c Why not NUMMI? Toyota had kept Prius production in Japan because suppliers of hybrid powertrain parts are there. Also, industry observers say that Toyota had wanted to keep a watchful eye on the valuable technology, although it does Ford sues U.S. over taxes DETROIT — Ford Motor Co. has sued the U.S. government, alleging the Internal Revenue Service owes Ford $445.3 million in interest on tax overpayments. Ford said the interest owed stems from tax overpayments in 1994, 1992 and the period 1983-89. An IRS representative declined to comment on the lawsuit. — Reuters assemble a small number of Priuses in China. Hybrids use an internal combustion engine and one or more electric motors to power the wheels. On the highway, the Prius gets 45 mpg, while the standard Highlander gets 24 mpg and the Highlander Hybrid gets 25 mpg. One source said that Toyota has been leaning all year toward assembling the Prius at its 50-50 joint venture with General Motors, New United Motor Manufacturing Inc., in Fremont, Calif. NUMMI, they were assuring themselves, has an experienced work force and is in the middle of green-hungry California. But last week, the dire outlook for Toyota’s trucks in the United States moved the Prius to Mississippi in- Tundras in Texas Toyota must ask as many as seven key SUV suppliers around Blue Springs to alter their own factory plans to produce Prius parts instead of SUV parts. Annual volume is undetermined, the company said. Last year, Toyota sold 181,221 Priuses in the United States. Also not determined is whether a supplier will build propulsion batteries for the Prius in the United States, Toyota said. Hummer H3T: $31,495 DETROIT — General Motors said Friday that it will price its new Hummer H3T pickup truck at $31,495, including shipping. The H3T is scheduled to arrive in dealerships in September. The pickup, based on the architecture GM uses for the Hummer H3 SUV, has a five-passenger crew cab along with a 5-foot-long bed. The H3T has the same off-road capability of all Hummers but is expected to carve out a new segment for the brand: mid-sized pickups. GM executives have said they will aggressively market the new pickup even though GM is undertaking a “strategic review” of the brand. That review includes the possibility of selling part or all of Hummer. — Jamie LaReau ■ Restyled Ridgeline The Honda Ridgeline undergoes its first styling change since it debuted as a 2005 model. The 2009 Ridgeline, snapped during testing, features a new Pilotinspired grille, a reworked front fascia, and what appears to be the addition of fog lamps in the fascia. Rear-end changes are limited to new taillights and a restyled fascia. BRENDA PRIDDY & CO. VW may build next Passat in U.S. plant Diana T. Kurylko dkurylko@crain.com HOW TO REACH US Web site: www.autonews.com Editorial staff: 313-446-0361, e-mail autonews@crain.com or fax 313-446-0383 Advertising: 313-446-6050 or fax 313-446-8030 To locate information that has been published in Automotive News, call 313-446-1662. To start or renew a subscription or to report an address change or a delivery problem, e-mail subs@crain.com or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). A cheaper replacement for the Volkswagen Passat developed primarily for the United States will likely go into a U.S. plant that Volkswagen AG is expected to announce this week. Eventually, a Jetta replacement also could be assembled there. Making one or both cars in the dollar zone with U.S. components is crucial to VW’s plan to increase group U.S. sales to 1 million by 2018: 800,000 VW vehicles and 200,000 Audis. VW’s German management views the United States as a laggard market. Increasing sales here is crucial to the parent company’s goal of rivaling Toyota Motor Corp.’s global sales within 10 years. Last year in the United States, 230,572 VWs and 93,506 Audis were sold, for a total of 324,078 units. VW’s management board favors Huntsville, Ala., as the site for the new U.S. greenfield plant, reports Automobilwoche, a Crain publication that covers the German auto industry. Chattanooga, Tenn., less than 100 miles away, is the second choice. The VW management board, headed by CEO Martin Winterkorn, is scheduled to make its recommendation today, July 14. The supervisory board, headed by former VW group CEO Ferdinand Piech, will make its decision Tuesday, July 15. The plant would begin production in late 2010 with a capacity of 200,000 to 250,000 vehicles. VW is considering adding to the factory a new mid-sized SUV, also under development. The new SUV would slot between the compact Tiguan, which went on sale in the United States earlier this year, and the larger Touareg SUV, which has been foundering in the United States. The Passat replacement would cost about $20,000, considerably less than the nearly $25,000 with shipping for today’s model. The car would be bigger to compete with the Toyota Camry. The compact sedan is being designed to fit better in a segment dominated by imports such as the Honda Civic, VW executives say. Today’s Jetta straddles two segments and despite lower pricing has sold below target. Earlier this year, Winterkorn told Automotive News: “The Jetta and Passat are too expensive. We need models that fit the sweet spot.” c Visit our Web site this week for the latest news about VW’s U.S. plant location. autonews.com http://www.autonews.com http://autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - July 14, 2008

Small-car boom misses Chrysler Ford's large rwd car plan is iffy Suppliers: Inflation is looming Hummer H3T price: $31,495 VW may build next Passat in U.S. plant Glut of trucks pulls Prius to U.S. Ford sues U.S. over taxes Restyled Ridgeline Volvo will tighten U.S. dealer network As BMW's chief in N.A., Purves got biggest thrill out of Mini Despite pricey fuel, Jetta diesel in demand Everybody's a critic: How dealers cope with online reviews Hyundai goes big on Genesis lease The shift to automatic: A transmission transition Jaguar-Land Rover dealer: Stand-alone would bankrupt me Chevy christens compact Cruze Fiat, BMW will team up on platforms, parts Revision: Bosch still tops Auto News supplier list GM to build Volts in U.S. for Europe GM ads will push mpg for 90 days A missed opportunity 2008 sales forecast? 14,652,757 Suzuki cuts U.S. work force 8% CAFE standards: Stop whining and get to work Uncertainty is the name of the game Honda dealer rubs salt in a wound Careless driver was to blame for crash Unsafe driving wasn't Ford's fault For doomsayers, business is booming again Best ad slogans have staying power Bird Dog Club creator hunts dealer poachers Dealers How to design a Lamborghini? Passion for speed certainly helps Dressed to kill Check for children Delinquency rate on indirect loans skyrockets Group promotes payment assurance Ford has big plans for small vehicles in North America Mulally pushes Ford toward fuel efficiency Ford brand will draw on European lineup With no new vehicles planned, Mercury's future is bleak Engines promise power plus fuel economy Horbury: We'll keep our vehicle designs fresh Ford aims to move Lincoln upscale Toyota's Lentz: Don't panic over collapse; market will stabilize Personnel Chrysler's car sales sag in June — even more than trucks PG sells majority of auto glass business to private-equity firm Chrysler's Campi makes nice Suit against Ford is reinstated BMW reassesses Mini demand JCI plant cuts shift, work force CAW board endorses local president Purves: Thumbs-up for BMW innovations Current trend in Europe: Electric cars Solid reviews for Ford's new Flex Philosopher has insight for ailing U.S. auto industry The 'B' word brings media deathwatch at GM Chrysler to dealers: Don't panic

Automotive News - July 14, 2008

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