Automotive News - December 8, 2008 - (Page 6) 6 • DECEMBER 8, 2008 Mercedes prices new GLK below $35,000 Diana T. Kurylko dkurylko@crain.com SANTA BARBARA, Calif. — With an entry price under $35,000, Mercedes-Benz expects its new compact GLK SUV to have a competitive edge over four new competitors due next year. In early January the 2010 GLK goes on sale as the fourth and smallest vehicle in Mercedes’ SUV/crossover line. Mercedes declined to give a sales forecast for the vehicle. But Ernst Lieb, CEO of Mercedes-Benz USA Inc., said at a press event here that it makes little sense to import a vehicle without sales of at least 15,000 to 20,000 annually because of the cost of maintaining spare parts. Lieb said the United States is expected to account for 35 to 40 percent of GLK’s worldwide sales. The GLK is entering a segment that Mercedes-Benz expects will grow to just under 140,000 units annually in the United States by 2010 — a 72 percent leap from 2007 sales, said Bernhard Glaser, general manager for product management. Next year, four GLK rivals will go on sale — the Audi Q5, Lexus RX 350 replacement, Volvo XC60 and Cadillac SRX. Mercedes’ pricing of $34,775 for the GLK undercuts the BMW X3, which has a base of $40,225. Both prices include shipping. “We priced based on what the market allows us to do,” said Lieb. “Yes, it’s aggressively priced, but we need the sales. We don’t want to have a higher price and then offer incentives.” Mercedes-Benz expects the GLK to attract customers from other automakers and be an entry point into the brand, said Glaser. With buyers shifting from larger to smaller vehicles, “we see plenty of potential for the GLK,” said Glaser. To draw a younger buyer, said Glaser, Mercedes-Benz designed the GLK with lines similar to the full-sized GL and the military-based G class, rather than the softer look of the bestselling ML. c The GLK was priced low so Mercedes wouldn’t offer incentives on it. It goes on sale next month. comment Panel to discuss innovation, Why GM must stay with Buick Rick Kranz General Motors had no choice: It had to keep Buick. If GM walked away from Buick in the United States, the brand’s biggest market likely would collapse. GM’s bailout plan released to Congress last week makes it clear that the days are numbered for Saab and Hummer, as well as Roger Smith’s fiasco, Saturn. Pontiac will survive, but GM said Pontiac eventually will shrink to a niche brand. The number of GM nameplates in the United States is expected to drop from 48 today to about 40 by 2012. Interestingly, excluding Hummer, GM’s lowest-selling North American brand is a survivor: Buick. The reason: It’s all about China, where Buick is a glamorous, must-have brand. Buick is popular with China’s senior government officials, as well as the rising middle class. Last year Buick sold 331,780 vehicles in China. By contrast, the U.S. total was 185,791. Combined, that’s 517,571 Buicks, which makes a solid Rick Kranz business case. By comparison, Volvo is product editor sold 458,323 vehicles globally in of Automotive 2007. News. Today, Buicks are co-developed by Chinese and U.S. teams. The two teams collaborated on the LaCrosse sedan replacement, which goes on sale here in May. Expect the Chinese to have a bigger voice in future Buick projects. If GM had killed the brand in the United States and maintained it in China, the move likely would have had a disastrous impact on Buick sales in China. The message would have been simple: To America, the birthplace of Buick, Buick is worthless. And, with GM on the ropes, the automaker can’t handle another punch to the gut. You may e-mail Rick Kranz at rkranz@crain.com sustainability Industry veterans Harold Krivan and Arupa Tesolin will join a roundtable discussion at the Automotive News World Congress in Detroit. The panelists will talk about the role of innovation in auto industry sustainability on Tuesday afternoon, Jan. 20. Krivan, 64, is one of the judges in the annual Automotive News PACE Awards competition, which honors supplier innovation. For 12 years, Krivan was executive vice president and senior partner at J.D. Power and Associates, where he helped expand the business into new industries and countries with emphasis on the automotive industry. He is now president of Sawgrass Solutions LLC, a management consulting company. Tesolin, 51, is the owner of Intuita, a training and consulting company. She is the author of Ting: A Surprising Way to Listen to Intuition & Do Business Better and Spark: Raise Your Mind to the Power of Infinity and Create Anything. Tesolin has more than 25 years of strategic management and organizational experience. She was regional manager of the Ontario Ministry of Labour’s health and safety branch. Later, she led Ontario’s Occupational Health and Safety Administration and initiated the automotive sector strategy. c Ford President Jac Nasser, left, and Volvo chief Leif Johansson celebrated the 1999 Ford acquisition. Pride of Sweden set to be Detroit castoffs Amy Wilson and John Revill awilson@crain.com Swedes once reveled in the independence of their two national carmakers — small but highly profitable luxury brands competing in a world of giants. Volvo Car Corp. and Saab are now moneylosing wards of Ford Motor Co. and General Motors, but they could be set free again or else find themselves with new owners. GM bought half of Saab in 1989 and later took 100 percent control. Ford acquired Volvo in 1999. The two Detroit companies hoped to get in on the worldwide growth of European prestige brands. That never happened. Ford said last week that it will consider selling Volvo as it explores “strategic options” for the Swedish brand. Meanwhile, GM announced a review of Saab. GM COO Fritz Henderson said that review includes a possible sale. GM is talking to potential investors who could take partial ownership in Saab. Jan-Ake Jonsson, Saab’s managing director, said GM and Saab are in discussions with several investors. He didn’t name them, but GM sources say other automakers and large engineering houses are among the interested parties. “We are looking for investors to get some external funding into some activities, such as accelerating product development, Jonsson told Automotive News Europe. Shutting down Saab completely “is totally off the map,” he said. Ford said its review of Volvo likely will take months. In the meantime, Ford will work with Volvo on a restructuring plan under Stephen Odell, who was named Volvo’s CEO in October. Part of that restructuring includes eliminating about 6,000 jobs at Volvo. c Toyota pushes breakup of seat suppliers to boost competition Lindsay Chappell lchappell@crain.com Three of Toyota’s largest seat suppliers are dissolving or restructuring their U.S. joint ventures. The reason: Toyota wants more competition among its North American suppliers. Toyota Boshoku America Inc., a Toyota affiliate, has bought out partner Lear Corp.’s share of Total Interior Systems-America. The Princeton, Ind., venture makes seats and components for the Sienna minivan. At the same time, Boshoku and Johnson Controls Inc. are phasing Boshoku adviser Dennis Cuneo: “Toyota wants more competition at the Tier 1 level.” out a long-standing partnership at Trim Masters Inc. in Harrodsburg, Ky. Trim Masters has operated 11 plants in the United States and Canada. Its estimated sales in 2007 were $1.12 billion. Boshoku and Johnson Controls aren’t splitting up entirely. A Boshoku spokesman says Trim Masters continues to operate. But in recent weeks, Boshoku has taken full ownership of five Trim Masters plants in the Midwest, and Johnson Controls has taken one plant in Texas. “Toyota wants more competition at the Tier 1 level,” says Dennis Cuneo, a former senior U.S. executive with Toyota who is advising Boshoku on the transactions. “Before, with seating, it wasn’t true competition.” Toyota, which owns 39.5 percent of Boshoku, created the supplier in 2004 by merging three keiretsu companies. Boshoku ranks No. 18 on Automotive News’ list of the top 100 global suppliers with sales to automakers of $9.17 billion in fiscal 2007. Lear sold its 39 percent stake in Total Interior Systems for $35 million. But Lear spokesman Mel Stephens says the deal wasn’t about money. “Toyota is realigning its supply base to be more like the way they want it,” Stephens says. “Lear will still supply components to Toyota but under a new arrangement.” c Krivan: 40 years of experience Tesolin: Business owner, author Key facts When: Jan. 19-22 Where: Detroit Marriott Renaissance Center Cost: $1,495; daily fee $750 Information: 313-446-0485 or autonews.com/worldcongress Exclusive lead sponsors: PricewaterhouseCoopers and IBM http://www.autonews.com/worldcongress http://www.autonews.com/worldcongress
Table of Contents Feed for the Digital Edition of Automotive News - December 8, 2008 Saturn: What's next? Feds tighten strings on Detroit 3 Ford stance: A cut above ailing rivals Summer sizzlers fizzle in fall Dealers back Detroit 3 aid, want spiffs Ford modifies pricing promo to equalize rebates High-fliers Toyota, Honda are struggling, too Chrysler: Bankruptcy counsel supports its stance Dealer Hecker hospitalized Ford to add a shift, OT for F-150 Koreatown dealer scrambles to hang on in L.A. Nissan bucks trend, will move to bigger trucks Why GM must stay with Buick Mercedes prices new GLK below $35,000 Diana T. Kurylko Pride of Sweden set to be Detroit castoffs Toyota pushes breakup of seat suppliers to boost competition Panel to discuss innovation, sustainability Capitol quandary: Can Chrysler survive? Steve Miller: Detroit 3 need 'pseudo-bankruptcy' Acura aims to deliver big-league luxury TL campaign is important for Acura's ad shop, too Appeals court upholds franchise termination GM loses bid to relocate Chevy store This is a very big week for America Obama must steer clear of state fuel standards Higher fuel taxes are not the answer A $15,000 rebate, not a blank check Chrysler retirees look for equality Isn't an auto show a place to sell? Are we turning our back on diversity? If only we'd had an energy policy Personnel GM sets Jan. 1 deadline for dealers to adopt Windows-based parts system Ford picks TRW steering system Ford cuts noise with windshields Dealers, factories battle over Fla. warranty law Online systems boost accessories sales Mercedes cuts output in Ala. Ford will kill Sable, Taurus X November sales suffer car wreck Honda, Audi pull out of racing series Saturn: A different kind of franchise agreement Fewer days sink Nov. output Detroit 3 road trip: Quiznos and humble pie LaNeve: Death talk keeps the showrooms empty Toyota cuts bonuses in bid to stay in the black Auto blowout sends Andrettis to the pits Saturn founder Neil DeKoker still believes And then there were . . . 6? Dealers Automotive News - December 8, 2008 Automotive News - December 8, 2008 - (Page Intro) Automotive News - December 8, 2008 - Ford stance: A cut above ailing rivals (Page 1) Automotive News - December 8, 2008 - Ford stance: A cut above ailing rivals (Page 2) Automotive News - December 8, 2008 - Chrysler: Bankruptcy counsel supports its stance Dealer Hecker hospitalized (Page 3) Automotive News - December 8, 2008 - Nissan bucks trend, will move to bigger trucks (Page 4) Automotive News - December 8, 2008 - Nissan bucks trend, will move to bigger trucks (Page 5) Automotive News - December 8, 2008 - Panel to discuss innovation, sustainability (Page 6) Automotive News - December 8, 2008 - Panel to discuss innovation, sustainability (Page 7) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8a) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8b) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8c) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8d) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8e) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8f) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8g) Automotive News - December 8, 2008 - Steve Miller: Detroit 3 need 'pseudo-bankruptcy' (Page 8h) Automotive News - December 8, 2008 - TL campaign is important for Acura's ad shop, too (Page 9) Automotive News - December 8, 2008 - GM loses bid to relocate Chevy store (Page 10) Automotive News - December 8, 2008 - GM loses bid to relocate Chevy store (Page 11) Automotive News - December 8, 2008 - Chrysler retirees look for equality (Page 12) Automotive News - December 8, 2008 - Chrysler retirees look for equality (Page 13) Automotive News - December 8, 2008 - If only we'd had an energy policy (Page 14) Automotive News - December 8, 2008 - If only we'd had an energy policy (Page 15) Automotive News - December 8, 2008 - Ford cuts noise with windshields (Page 16) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 17) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 18) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 19) Automotive News - December 8, 2008 - Online systems boost accessories sales (Page 20) Automotive News - December 8, 2008 - Ford will kill Sable, Taurus X (Page 21) Automotive News - December 8, 2008 - Ford will kill Sable, Taurus X (Page 22) Automotive News - December 8, 2008 - November sales suffer car wreck (Page 23) Automotive News - December 8, 2008 - Saturn: A different kind of franchise agreement (Page 24) Automotive News - December 8, 2008 - Fewer days sink Nov. output (Page 25) Automotive News - December 8, 2008 - And then there were . . . 6? (Page 26) Automotive News - December 8, 2008 - And then there were . . . 6? (Page 27) Automotive News - December 8, 2008 - And then there were . . . 6? (Page 28)
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