Automotive News - January 21, 2008 - (Page 3)

JANUARY 21, 2008 • 3 82nd year — No. 6291 BMW: We may need a ‘green’ brand Separate brand would preserve performance image Diana T. Kurylko dkurylko@crain.com Boag gets another new job DETROIT — Less than two weeks after being named to a new job, Chrysler LLC executive Simon Boag has been appointed to yet another. It’s the third job Boag has held since Christmas. Chrysler on Friday named Boag, 42, president of Mopar and global service and parts. He replaces 31year Chrysler veteran Chris Cortez, 53, who is retiring. Boag will report to Jim Press, Chrysler co-president. Replacing Boag as vice president for global alliance operations will be Scott Garberding, 44, who had been vice president of supplier quality. — Bradford Wernle Competition claims traditions DETROIT — It’s a cruel new world for BMW AG. The flow of profits from the United States has been dammed by the still-slumping dollar. No longer distracted by the woes of the Chrysler group or its own quality problems, Mercedes-Benz is back in full force. And Audi AG is armed with new, stylish performance vehicles that threaten to steal BMW’s crown as king of the European luxury brands. The BMW management team installed by CEO Norbert Reithofer in late 2006 not only developed a new strategy to stay on top. It slaughtered several sacred cows. “There are different issues on the table,” Stefan Krause, the BMW board member for sales and marketing, said at a meeting with Automotive News. Krause said traditions alive under former CEO Helmut Panke had to be sacrificed. Anxious to avoid labor strife, BMW never “touched the unions” but kept overpaying to keep them quiet. Harder times forced BMW to renegotiate and bring union pay in line with that of the competition. Technology and high performance still reign, but BMW has become “more customer-focused.” Dollar/euro pressures have ended BMW’s quest for increased volume. The emphasis is now on profitable growth. Engineering will stress speedy development of vehicles so BMW can quickly adjust to the market. Said Krause. “Reithofer has come from a factory environment, and he is an efficiency freak. He likes efficiency and sends that message through the organization.” Plus, Krause said, the boss makes decisions very quickly. — Diana T. Kurylko Sales and marketing chief Stefan Krause: “We cannot take the blue out of BMW and change it to green.” Saab and Volvo — but concluded that none of them meets its needs. 3. Reviving a British brand. BMW has shelved proposals to bring back one of the British brand names it owns, such as Riley or Triumph. Despite talk of starting a green brand, BMW executives are unsure how badly their customers want fuelsipping vehicles. “People go to cocktail parties and talk about being green and then drive home in their M6s,” Krause said. BMW went public with its deliberations last September, when CEO Norbert Reithofer unveiled his corporate strategy through 2020. Reithofer’s longterm plans included a possible fourth brand. At the Frankfurt auto show, Reithofer admitted that he and two other executives have been dubbed the “greenies” on the company’s sixmember management board. Since then, BMW has been mum on the subject — until last week, when Krause spoke with Automotive News.c Mercedes recalls diesels DETROIT — Mercedes-Benz USA is recalling 9,004 diesel-powered vehicles from the 2007 model year because of crankshaft sensors that could fail. Failure would cause the vehicle to lose power and the ability to restart, says the National Highway Traffic Safety Administration. The recall covers diesel-powered versions of the 2007 MercedesBenz E320, GL320, R320 and ML320. The company said it sold 12,580 vehicles with diesel engines in the United States in 2007. — Ryan Beene The new U.S. fuel economy standards are squeezing BMW so tightly that it might create a fourth brand to sell ecologically friendly cars. BMW must find a way to satisfy growing pressure for vehicles with lower emissions and better fuel economy, says Stefan Krause, BMW AG’s board member for sales and marketing. But it must do so without distorting the images of its existing three brands, BMW, Rolls-Royce and Mini. A new green brand could include front-drive cars and crossovers that would not easily mesh with the BMW brand’s rear-drive lineup. Despite its fuel cell research and lineup of sophisticated diesel engines, the company has concluded that the BMW brand should not be stretched too far. “We cannot take the blue out of BMW and change it to green,” said Krause. “Maybe we could add a fourth brand.” In an interview last week with Automotive News, Krause said his company has rejected three “green” options: 1. Transforming Mini. The brand’s lineup of small cars have good fuel economy, but BMW doesn’t want to risk diluting Mini’s quirky appeal by adding too many models. And although Mini offers a diesel engine in Europe, vehicles with that powerplant can’t be sold in the United States because they don’t meet California emission standards. 2. Buying another brand. BMW evaluated several brands — including N.Y. shops for new cabs DETROIT — The Ford Crown Victoria sedan, which has been the workhorse of New York’s taxicab fleet, could be history. The New York City Taxi and Limousine Commission is shopping for a new generation of cars to be phased in to its fleet of about 13,000 yellow cabs. Officials from New York’s taxi commission were at the Detroit auto show this week to discuss their Taxi of Tomorrow project. Commission Chairman Michael Daus told Automotive News that bid specifications will be sent to every major automaker in about a month. — Ryan Beene ■ German summit Among other things, the Detroit auto show is a meeting place where global executives can bump into each other for a casual chat. From left, Daimler CEO Dieter Zetsche, Volkswagen Chairman Ferdinand Piech and VW group CEO Martin Winterkorn hobnob on the show floor. RICK KRANZ Toyota: We have enough plants for now Mark Rechtin mrechtin@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: 313-446-6790 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). Coming on line Toyota last year added assembly capacity in San Antonio and at Subaru in Lafayette, Ind. Here’s what’s coming next. Plant: Blue Springs, Plant: Woodstock, Miss. Ontario Vehicle: Highlander Vehicle: RAV4 Job 1 target: 2010 Job 1 target: Fall ’08 Capacity: 150,000 Capacity: 150,000 models are built at more flexible plants in Japan. All large-volume vehicles in Toyota’s U.S. lineup are built in North America or are planned to be. The RAV4 crossover will be built in the Woodstock, Ontario, plant that begins operation this year. And the Highlander crossover will be produced in the Blue Springs, Miss., factory that comes online in 2010. Once those plants are operating, along with the converted Subaru plant in Lafayette, Ind., Toyota will have North American capacity of 2.2 million units, Lentz said. Toyota has said it wants at least 60 percent local CLARIFICATION A story on Page 17 of this issue includes an inaccurate claim by Chrysler LLC for the 2009 Dodge Ram. In 1960, General Motors used rear coil springs in its pickups. GM later changed back to leaf springs. DETROIT — Having added several assembly plants in North America in recent years, Toyota now says it has enough capacity to last well into the next decade. That’s a different story from a year ago, when all the talk at Toyota was about a capacity crunch. Coming off a 12.5 percent sales increase in 2006 and imports rising, executives at Toyota Motor Sales U.S.A. sounded worried about keeping up with rocketing growth. But top executives now say they have no plans to announce new greenfield plants — or even more assembly lines at existing factories — for several years. Most sales growth this decade has come from entering new segments. With the lineup mostly filled out, growth will be slower, said Jim Lentz, president of Toyota Motor Sales. The way that Toyota organizes plants is also a factor. Toyota says it won’t add an assembly line unless the main vehicle built on the line is assured of 150,000 sales annually. Other vehicles on the same line must be based on the same platform and generate at least 75,000 units. As a result, most niche production in North America. In recent years, that has slid to the 55 percent range. With the new plants, and if growth remains relatively slow, that ratio will be 70 to 75 percent local production. The only high-volume vehicle not built in North America is the Prius, with sales of 181,221 units last year. But because the hybrid vehicle’s supply base is almost entirely in Japan, the car is difficult to produce in North America, Lentz said. The only other possibility would be the subcompact Yaris, for which Toyota has studied a plant in Mexico. Last year Toyota sold 130,985 Yarises in North America. Also, Toyota Motor Sales is taking a more conservative approach to its sales goals, given the current economic climate. Lentz predicted a 1 percent increase for 2008. Dave Illingworth, Toyota senior vice president of planning and administration, said it would be “tough” for combined Toyota, Lexus and Scion sales in the United States to grow from last year’s 2.62 million units to 3 million by 2010. Said Illingworth: “We’re pretty well set with what we have now.”c http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - January 21, 2008

Campi will move fast to buy global Ford rolls out new F series — but will it stay No. 1? GM will push metro megastores BMW: We may need a 'green' brand Competition claims traditions German summit Toyota: We have enough plants for now Chinese pitch innovation, not just price Mercedes in, Cadillac out as sponsor of Masters golf tournament Auto show walkaround: Chasing the YIPS around Detroit New Acura TSX will get a diesel Toyota: We'll crack 35-mpg CAFE before 2020 Audi predicts 1 million global sales in 2008 Toyota crosses over into tricky segment LETTER TO THE EDITOR: Digital edition is a 'quantum leap' KEITH CRAIN: Here they come, ready or not EDITORIAL: Incentives war isn't the answer to sales downturn LETTER TO THE EDITOR: Toyota over Chevy? Don’t be too sure DIGITAL EDITION: You did your homework Chrysler concepts show brand tweaks Chrysler: 'Hemi is not powertrain of the future' Some of what we heard at the Detroit auto show Corvette has a future — but maybe a lighter, greener one Nissan exec: Cube is coming to America Subaru relies on new Forester Farley: Ford must groom the market Ford still funds Jag, Land Rover product development Ford will probably develop its new rwd cars in the U.S. Volvo considers North American production Good design: Solving problems, making a statement Horbury wants a more aerodynamic F-150 Hyundai upgrades next Sonata's interior M-B could build C class in U.S. VW hints at vehicles for new N.A. plant Customer demand for CTS sedans strains production capabilities at Cadillac GM to test ZR1 carbon fiber weight savings Honda Pilot has more room, power Indiana plant will boost Honda's flexibility Zetsche sees 20% diesel mix for Mercedes-Benz GM hopes to have E-Flex test vehicles ready by June GM to increase Enclave output Cadillac aims high with Provoq Pontiac to launch G8 marketing in March Big-truck sales fall 43.5% in Dec. Personnel Buckle up for a rocky '08, economists warn Canada sales up 2.4% in '07 Gioia: Ford hybrids will be profitable by year end American Honda opens workplace diversity office Dealers From CDs to Sync: Auto industry races to adapt in-car IT trends Microsoft exec sees a car as 'another room in the house' China's Geely plans plant in Mexico Chrysler exec: China exporters need time Murtaugh: Nissan deal won't affect Chrysler-Chery venture Strike by writers makes TV iffy for auto marketers Super Bowl auto advertisers get pre-game jitters Final Say GM bumps buyout total to 46,000 GM considers U.S.-made Astra Good Karma: Mean, green, fighting machine Purves confirms it: The end is near Rehab for designers: A change can do you good Tata's achievement: Redefining 'cheap' Fans remember auto commercials with sports themes Which brand is stronger — Scion or Prius? Engine advances bring cleaner emissions a step closer Suppliers to the 2008 Ford Focus Varable compression ratio makes a comeback Change the engine's stroke Integrate components to boost efficiency Reduce the size of the engine Eliminate the cams and count the savings ZF expects surge in new orders American Axle's rising son may be another Dauch Honda taps Web for workers Trelleborg unit adds tech center Kia restricts hiring at Ga. plant to Web applicants Magna pursues Ogihara Supplier personnel Age of intelligent transportation is getting closer Plastic spoiler saves weight Automotive News' cartoonist looks at 2007 8 will enter European Automotive Hall of Fame Pininfarina lifted family business to new heights Merciless cost cutter Calvet rescued PSA Opel boys turned bicycle venture into automaker Giacosa fathered the Fiat 500 JCI to supply batteries to Chinese automakers Automakers will spend more on digital ads Ford snares star role in return of 'Knight Rider' GM Certified markets online to Hispanics Writers' strike could benefit auto marketers

Automotive News - January 21, 2008

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