Automotive News - July 14, 2008 - (Page 6)

6 • JULY 14, 2008 Fiat, BMW will team up on platforms, parts Luca Ciferri lciferri@craincom.de TURIN, Italy — Fiat and BMW plan to cooperate on platforms and components. In a statement, the head of BMW brand development, Friedrich Eichiner, said the companies are examining “possibilities for the joint use of components and systems in Mini and Alfa Romeo vehicles.” The automakers have agreed not to divulge more details, a BMW statement said. Supplier sources told Automotive News Europe that the companies will develop a small-car platform that will underpin the next Fiat Grande Punto, BMW’s third-generation Mini and the next-generation Alfa Romeo MiTo. The two automakers also are considering developing a new family of gasoline and diesel engines, industry sources told Automotive News Europe. Today, Mini does not offer a diesel in the United States. A spokesman for BMW of North America said it is too early to determine what engines will come to the Sources say Fiat and BMW may develop a new family of gasoline and diesel engines. BMW’s Mini, left, doesn’t have a diesel in the U.S. United States. “All we’ve said is that we signed a memorandum of understanding,” the spokesman said. The BMW statement said Eichiner and Alfredo Altavilla, Fiat’s head of business development, have signed a memorandum of understanding to cooperate on architectures and components. BMW said cooperating with Fiat will help it achieve economies of scale and cost reductions as part of its Number One strategy. The company said the results of its discussions with Fiat will be known by year end.c Diana T. Kurylko contributed to this report Chevy christens compact Cruze Jamie LaReau jlareau@crain.com The shift to automatic: A transmission transition Contrary to popular belief, General Motors didn’t invent the automatic transmission. But GM made it an American institution. The principle goes back to 1904 and the Sturtevant brothers of Boston. The 1934 Reo had an automatic, but the company was on its last legs financially and had neither the time nor money to develop the market. GM had both, and an automatic transmission was a pet project long before the revolutionary gizmo appeared in the 1940 Oldsmobile. The quest for an automatic began in 1923, Alfred Sloan wrote in My Years with General Motors. In 1928, Cadillac got syncromesh — an easier, smoother type of manual shifting. All GM divisions had it by 1932. Buick and Oldsmobile offered a semiautomatic in 1938, and the clutchless automatic (HydraMatic) was a $57 option on the 1940 Oldsmobile. Cadillac got it the next year. Today the automatic transmission is clearly the king of the road. More than 90 percent of the cars and trucks sold in the United States have one. Some auto buffs consider the automatic transmission one of the two most important innovations in auto history. The other: Charles Kettering’s electric self-starter, which debuted on the 1912 Cadillac. For the rest of the story, read Automotive News’ GM 100th anniversary edition, How General Motors Changed the World, on Sept. 15. For information about the special edition, go to www.autonews.com/gm100. DETROIT — Chevrolet’s 2011 replacement for the Cobalt will be called the Cruze, General Motors confirmed last week. GM also released new details about the compact, which is expected to get more than 40 mpg on the highway. The production version will be revealed in October at the Paris auto show, GM spokeswoman Nancy Libby said. The car will be built at GM’s Lordstown, Ohio, plant beginning in 2010. In Europe, the car will go on sale next spring. The Cruze will be based on GM’s Delta compact-car architecture and will use a new 1.4-liter global engine that GM developed and recently announced in Europe. The turbocharged four-cylinder engine will be used in several GM vehicles worldwide. GM says the engine will be able to reach 120 to 140 hp. Sources say mileage could exceed 40 mpg. Libby said the engine will be built in Flint, Mich. Production of the Cruze in Lordstown is slated to start in the middle of 2010 as a 2011 model. Libby said she sees the Cruze’s main competitors as the Honda Civic, Volkswagen Jetta, Mazda3 and Ford Focus. The Cruze will be similar in size to the Cobalt, she said. The fivepassenger Cruze will be about 15 feet long. “We’re coming to market as a sedan,” Libby said. “There’s no news yet on any other variants that could be spun from that vehicle.” The Cobalt debuted in late 2004 as a 2005 model and has sold more than 200,000 vehicles annually. Through June, amid a spike in gasoline prices, Cobalt sales were up 18.5 percent to 114,250. In June alone, Cobalt sales rose 21.6 percent over June 2007. The demand for the Cobalt has prompted GM to add a third shift at the Lordstown plant starting Aug. 4. c For the Genesis with a V-6 engine, Hyundai offers a lease of $399 a month for 24 months with $2,199 due at signing. Hyundai goes big on Genesis lease Kathy Jackson kjackson@crain.com LOS ANGELES — Hyundai is doing its biggest lease deal ever in a bid to attract customers to the $33,000 Genesis sedan. Buyers can lease the V-6 model, which went on sale in June, for $399 per month for 24 months with $2,199 due at lease signing. Hyundai expects the V-6 to account for about 80 percent of the sales for the new luxury car. “We’re excited,” says Bill Wallace, owner of Wallace Hyundai in Stuart, Fla. “It’s the right message with the right car.” The deal is the first aggressive lease program offered by Hyundai Motor Finance Co., says John Krafcik, vice president of product planning at Hyundai’s John Krafcik expects leasing to represent half of Genesis sales. Hyundai Motor America. The Genesis is the first Hyundai aimed at upscale buyers, who tend to lease rather than buy. Krafcik says he expects leasing to represent about half of Genesis sales. He says Hyundai’s lease penetration has been 10 to 12 percent. A strong residual value from Automotive Lease Guide helped cut the cost of leasing. The Santa Barbara, Calif., compa- ny, which sets residual standards for the industry, estimates that a 2009 Genesis will be worth 50 percent of its original sticker price after 36 months. “That is definitely a big win for Hyundai,” says Jim Clark, editorial director at Automotive Lease Guide. Wallace, who also sells Cadillacs and Lincolns, says the Genesis lease deal is $100 to $150 less per month than Cadillac now offers on the CTS, which Hyundai says is a prime competitor. Adds Don Hicks, a Hyundai dealer in Aurora, Colo.: “If $399 gets them in the door and they don’t buy that car, something’s wrong.” The V-6 lease deal runs through July. The V-8 version goes on sale in about a month. c Jaguar-Land Rover dealer: Stand-alone would bankrupt me Mark Rechtin mrechtin@crain.com The Chevy Cruze will replace the Cobalt, above, at Lordstown. Jaguar Land Rover has sued a dealer in tony North Bethesda, Md., claiming it should not have to pay incentive money for a stand-alone store the dealer never built. The Jaguar-Land Rover dealer counters that he would go bankrupt if forced to move his Lincoln and Mercury franchises into another building as promised. He now sells all four brands under one roof. “If you are a Jaguar-Land Rover store, you are hanging on by your fingernails,” says John Jaffe, owner of Manhattan Imported Cars Inc. The lawsuit, filed in U.S. District Court in Maryland’s Southern District, alleges Jaguar Land Rover should not have to pay the renovation incentives. Manhattan has received a 6 percentage point cash bonus on every car sold as an incentive to move Lincoln and Mercury elsewhere. The incentive has been paid since May 2006. The suit claims Manhattan agreed at that time to move Lincoln Mercury out by July 1, 2008, but now “has indicated it will not do so.” Jaguar Land Rover is not seeking to recoup payments already made. “It is unfair to dealers who comply with the facility requirements,” the suit alleges. Jaffe says real estate in North Bethesda is so expensive that creating separate stores for the wounded Jaguar and Land Rover brands, which Ford recently sold to Indian company Tata Motors, and another for Lincoln and Mercury would bankrupt him. “A highline manufacturer can’t afford not to be here,” says Jaffe. “Since I own the dirt, I am subvening my own rent to give Jaguar and Land Rover a free ride. “If it weren’t for that, they wouldn’t be anywhere around here.”c http://www.autonews.com/gm100

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

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.