Automotive News - January 21, 2008 - (Page 4)

4 • JANUARY 21, 2008 Chinese pitch innovation, not just price Alysha Webb alyshawebb@yahoo.com DETROIT — Chinese automakers want to sell only budget cars in the United States, right? Not really. The first model that BYD Auto Co. aims to sell here is a hybrid with a battery it developed. “Our strategy is to present ourselves as a green company,” said BYD President Wang Chuanfu at the Detroit auto show. “We want our cars to be seen as offering new technology at a good price.” A few years ago, Chinese automakers aimed to market their cars on low price alone. Now they are taking a new approach. They also want to be seen as innovators, particularly with electrics and hybrids. The catch: The technical challenges are daunting, and no Chinese automaker has started mass production of an electric or hybrid vehicle. An innovation pitch makes sense for Chinese automakers, said Sun Jian, a vice president at consultant A.T. Kearney in Shanghai. If they can develop ideas, they can erase the huge lead that Western automakers have in standard engines and other technology. is to present ourselves as a green company. We want our cars to be seen as offering new technology at a good price. “ Our strategy WANG CHUANFU BYD Auto Co. ” ALYSHA WEBB “We are all at the starting line” with alternative-fuel vehicles is how Chinese automakers view it, Sun said. Geely hybrid, too Geely Holding Group Co. is at the Detroit show for the second time. Like BYD, Geely is showing several gasoline-powered cars. But the place of pride in its booth goes to the Hifun hybrid. Geely says it is developing electrics and hybrids. Geely also is touting a tire blowout monitoring and braking system it developed that helps prevent accidents if a tire explodes. Geely calls it “a breakthrough in automobile safety.” The hybrid car and blowout moni- toring system are both part of Geely’s new approach to the United States. In 2006, Geely’s first Detroit show, it pitched low sticker prices. Now, Geely wants consumers to buy its cars because of service and advanced features, said Chairman Li Shifu. “We have new technology,” said Li. “U.S. consumers don’t understand the Geely brand, so we need to make a good first impression.” A third Chinese automaker at the show, Changfeng Motor Co., did not show electrics or hybrids. But Changfeng does hope to succeed internationally by “introducing foreign advanced technology,” and “ceaselessly and independently making innovation to develop superior new products,” it said in a press release. Changfeng, BYD and Geely are all small automakers by global standards. Geely, the largest of the three, sold 197,203 light vehicles in the first 11 months of 2007. Electric car production BYD says it will begin small-scale production this year of electric cars using a ferrous battery it developed. BYD has been producing lithium ion batteries for cell phones since 1995 and is the world’s largest supplier of nickel-cadmium batteries for consumer products, said Wang. Geely says a new energy car will be on the road in China this year, without specifying the kind of energy. Geely has 1,400 engineers and devotes 6 percent of its revenue to research, says Li. “There is a lot of activity on the tech side in China and a lot of desire,” said Mary Ann Wright, general manager of hybrid systems for Johnson Controls Inc. But “a good consumer battery does not translate into a good car battery,” said Wright. Johnson Controls is supplying lithium ion batteries to Chinese automaker SAIC Motor Corp. for a fleet of demonstration hybrids due in China early this year. BYD figures it could be selling its green car, called the Dual Mode, in the United States within three years. Geely is more cautious. “All Chinese brands want to come to the U.S. market, but the time is not ripe,” Li said. “We need to do abundant research.” c Chrysler to upgrade interiors of 2 Jeeps Bradford Wernle bwernle@crain.com DETROIT — The Jeep Compass and Patriot, widely criticized for their interiors, will get new ones this fall, according to Ralph Gilles, Chrysler LLC designer. The interior redesign comes well ahead of what would be the normal schedule, he said at the Detroit auto show. The Dodge Caliber car, built on the same platGilles: “We’re form as its Jeep trying to put the siblings, will customer first.” get a new interior slightly later than the Jeeps, Gilles said. “Even before these products were launched, we did some soul searching,” Gilles said. That soul-searching included talks The interiors of the Jeep Patriot, shown, and Compass have been criticized. They are being redesigned after only about a year on the market. with dealers and employees about what was wrong and what could be done to fix the interiors, he said. As part of the redesign, Chrysler hired a consultant who helped develop grainy, European style textures for Jeep’s two smallest vehicles. Also, Gilles said, the “doors have been softened in the elbow contact area” and other places. Gilles said these rapid changes — within a year of introduction — would not have been possible had Chrysler not been privately owned by Cerberus Capital Management. “Think about it: The products are barely a year old,” he said. “We’re trying to put the customer first.” Gilles declined comment on whether interior changes are in the works for the Chrysler Sebring and Dodge Avenger cars. c Mercedes in, Cadillac out as sponsor of Masters golf tournament Diana T. Kurylko dkurylko@crain.com DETROIT — Mercedes-Benz has replaced Cadillac as the automotive sponsor of the Masters golf tournament. Mercedes said it won the prize by emphasizing the brand’s global presence. Cadillac says it did not compete for the sponsorship this year. In an interview at the Detroit auto show, Steven Cannon, Mercedes-Benz USA vice president of marketing, said organizers of the tournament in Augusta, Ga., sought an automotive sponsor with wider international appeal. “We bring them Mercedes-Benz, Japan and all the key markets,” Cannon said. The Masters, played each April, is one of the four grand-slam events of the Professional Golfers’ Association tour. Cannon declined to say how much Mercedes is paying for the Masters sponsorship, but he said it will be more than the $2 million-plus the company spends to sponsor a PGA tour event in Hawaii. Cannon also declined to say whether the Masters sponsorship extends beyond this year. Cadillac spokesman Kevin Smith said the General Motors brand “opted out” of competing for the Masters sponsorship this year. “We had to look across our marketing strategy for the year and what we have been getting over the years with our partnership for the Masters,” Smith said. “We had to ask ourselves if we were getting any benefit from it. It didn’t fit within our overall marketing strategy, so it fell off the page for us.” Smith said Cadillac’s sponsorship of the Masters “worked wonderfully for us over the years. It was not a big chunk of our marketing budget overall but big enough that you have to take a hard look at those items. It was a significant amount.” “This year the dollar sign was bigger than the justification for it.” Smith declined to say what Cadillac had paid for the sponsorship in past years. Cannon said Mercedes-Benz owners are avid golfers and tend to be more interested in the game than in motorsports. Cadillac has been reconsidering its marketing support of several major events. c Jamie LaReau contributed to this report

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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