Automotive News - May 19, 2008 - (Page 4)

4 • MAY 19, 2008 American Axle plans to expand in Asia Robert Sherefkin rsherefkin@crain.com DETROIT — Even as Richard E. Dauch wrestles with the UAW over the future of his North American plants, the CEO of American Axle & Manufacturing Holdings Inc. is beefing up in Asia. American Axle is heavily dependent on the North American market. That has left the company sensitive to swings in volume here and to its 78 percent sales concentration with General Motors. So now it is aggressively building its global footprint and expanding production in lowcost areas. American Axle is expanding in high-growth countries such as Brazil, China, Mexico and Poland. But the main initiatives are in India and Thailand. In Thailand, the world’s secondlargest pickup truck producer after the United States, American Axle is following its top customer. GM builds the Chevrolet Colorado and an Isuzu compact pickup at its plant at Rayong, Thailand, using another supplier’s axles. In the United States, American Axle supplies the Colorado’s axles. Asked whether American Axle could snare the Thai business, spokeswoman Renee Rogers declined to comment. But the company © GM CORP. American Axle hopes to supply parts for the Thailand-built Chevrolet Colorado pickup truck. does not build foreign plants without the promise of future business. Thailand’s compact pickup pro- duction will jump more than 7 percent this year to 972,728 vehicles, predicts Tim Dunne, director of AsiaPacific Market Intelligence for J.D. Power and Associates. In India, the Detroit axle maker is in talks to build a second plant even as it prepares for its first joint venture there to launch production. Late last year, American Axle entered India via a joint venture with Sona Koyo Steering Systems of India. The new company, AAM Sona Axle Private Ltd., will manufacture and sell light-vehicle axle assemblies for the Indian market. Dauch is building a corporate headquarters for the joint venture in Pune, India. The venture will build a greenfield manufacturing plant in northern India to supply parts to Tata Motors. Dauch’s ambitious plan for Asia faces a familiar rival. Axle maker Dana Holding Corp. has been in Asia for more than a decade. In Thailand alone, Dana employs 530 people at two plants. Its Rayong light-axle plant built in 1994 supplies Ford Motor Co., Nissan Motor Co., Mazda Motor Corp., and Suzuki Motor Corp. Dana’s nearby prop shaft plant was built in 1998. It supplies Ford and Nissan. c ■ Cube of the future The re-engineered Nissan Cube was snapped during testing. The tall, boxy, five-door subcompact hatchback is expected to go on sale here around 2010. It is unclear whether the vehicle will be marketed as a pure electric vehicle with a lithium ion battery pack or with a three-cylinder gasoline engine. A pure electric vehicle would have a 100-mile range with a top speed of 75 mph. BRENDA PRIDDY & CO. GM studies the future of full-sized trucks Jamie LaReau jlareau@crain.com GM will keep cutting sales to fleets Arlena Sawyers asawyers@crain.com LAS VEGAS — Despite General Motors’ slumping U.S. retail sales, the company insists it is continuing to reduce its sales to rental companies. “We are not ramping up again,” said Brian McVeigh, GM’s general manager of fleet and commercial operations. GM held its annual meeting with its business customers, including rental companies, here this month. Rental and other fleet sales generally are less profitable than retail sales because fleet customers get volume discounts. When large numbers of retired rental vehicles return to the used-vehicle market, values of both new and used vehicles can suffer. Still, the Detroit 3 long have relied on fleet sales to maintain production, especially of slow-selling vehicles. McVeigh said those days are over at GM. sell an extra 5,000 Cobalts at my price, I will. BRIAN McVEIGH GM “ We are not ramping up again,” but “If I can ” Fleet retreat GM says it will continue to cut sales to U.S. rental companies. Here are approximate unit sales by model year. 2009: 500,000-550,000* 2008: 575,000* 2007: 700,000 *Projected Source: GM Fleet and Commercial Operations quite down where the imports are,” Fields said in an interview. Chrysler LLC launched a program last year to cut sales to daily rental companies, said company spokeswoman Beverly Thacker. She declined to give specific figures. Crowd pleasers Over the past five years, GM’s McVeigh said, the company has equipped more of the vehicles it sells to rental companies with features such as sunroofs, which appeal to retail customers. That decision has increased the resale values of rental cars and trucks when they go to auction, he said. In addition, McVeigh said, GM has cut the number of retired rental vehicles it sends to auction to about 400,000 a year, down from 500,000 to 550,000 in previous years. Said McVeigh: “Fewer going through, same number of guys bidding on them — better prices.” c Amy Wilson contributed to this report Seeking ‘equilibrium’ McVeigh told Automotive News that GM expects to sell 575,000 cars and trucks to rental companies in the 2008 model year, down from 700,000 in 2007. In the 2009 model year, GM plans to cut its rental sales to between 500,000 and 550,000 units, McVeigh said. Those projections aim at “equilibrium,” he said. GM has no plans to roll back the price increases it instituted last year on sales to rental companies, McVeigh said. But he added: “If I can sell an extra 5,000 (Chevrolet) Cobalts at my price, I will.” DETROIT — General Motors might be closer to becoming more of a car company and less of a truck company. The automaker is conducting a major study on fullsized trucks and SUVs. The internal study looks four years ahead to determine market conditions and how much GM should change its lineup, possibly by offering fewer trucks and SUVs. GM has asked its researchers to “give us a view as to what the long-term truck and full-size SUV demand might be and why you think it is that way,” Troy Clarke, GM’s president of North America, said in an interview with Automotive News. He said GM needs to understand whether the current shift in sales mix from big pickup trucks and SUVs to more fuel-efficient vehicles represents a long-term change —what Clarke calls a “structural impact.” The industry also has seen demand for the vehicles decline in an era of near-$4-per-gallon gasoline. Through April, sales of GM’s full-sized pickups were down 18.5 percent compared with April 2007. Over the same period, GM’s SUV sales were down 31.5 percent compared with last year.That is making GM consider adding more crossovers, says Mike DiGiovanni, executive director of global market and industry analysis. “We’re keeping a close eye on full-sized trucks and asking ourselves how much more aggressively we want to enter the crossover space, given where the world is going,” he says. DiGiovanni is leading the study. He is looking at all the factors that drive up oil prices and considering the impact on GM’s lineup if gasoline prices stay the same or go higher. “I will tell you that even with higher oil prices, there’ll still be a sizable market for full-sized pickups,” DiGiovanni says. “It’ll be down from where it is now, but it’ll still be there.” If oil prices stabilize, there would be modest declines in SUV demand, DiGiovanni says. But, he adds, “All bets are off if oil skyrockets.” c Through April 2008, GM’s U.S. new-vehicle sales were down 12.3 percent from the first four months of 2007. Ford Motor Co. also is curbing sales to daily rental companies, said Mark Fields, Ford’s president of the Americas. Ford Motor’s unit sales to rental companies fell 16 percent in the first quarter of 2008 from the year-ago quarter, Fields said. Ford’s fleet sales as a percentage of overall U.S. sales are “significantly lower than the rest of the domestic competition and not Tough times for trucks GM’s 1st-quarter sales of full-sized pickup trucks and SUVs THROUGH APRIL CHANGE FROM 2007 Full-sized pickups Full-sized SUVs* *includes Saab 217,413 151,851 –18.5% –31.5% Source: Automotive News Data Center

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Automotive News - May 19, 2008 Ford eyes smaller F-150 cousin Sonic: Mercedes tries to 'extort' store upgrades Chrysler seeks 25% slash in parts prices Dealership managers pushed Chrysler's latest incentive Crain names 4 new VPs Automotive News staffers win Wheel Awards GM will keep cutting sales to fleets GM studies the future of full-sized trucks American Axle plans to expand in Asia At Lexus, the sales laggards are cars VW positions Tiguan as 'GTI' of small SUVs Tata enters race for 100-mpg car Harley Earl was the daddy of auto design Focus will follow Fiesta as a global vehicle Lexus shows how it sweats details Industry slows tide of state CO2 rules Chevy tweaks Cobalt to add fuel economy Be careful; don't do anything dumb Looking ahead to different industry They thought they knew everything Cerberus doesn't belong in autos Dealers as scapegoats Smart, steady growth works best for suppliers Farley's smart to value Ford's heritage Absurd logic in the U.S., cowardice in Germany BMW, Daimler keep a wary eye on U.S. economy James Franey Dealers' approach can lessen pain of staff cuts GM plans to distinguish Opel with image makeover Make or buy? Software can estimate costs for company Honda, Toyota see robots in their futures Bosch aims to lead in hybrids technology King of hearts Clarke aims to get GM back on track in N.A. Fields navigates Ford through 'white water' LaSorda steers Chrysler's global ventures Toyota's Lentz: A crash course in hard times Truck sales fall 13% in April Modine sells Thermacore unit Alcoa to close Mexico plant Toyoda Gosei expands in Mexico Hayes Lemmerz plans to close Georgia factory Japan's sales slide 2% in 1st quarter; output climbs Dealers Hyundai let U.S. direct Sonata freshening After .com and .edu, is it time for .car? Panoramic sunroof of Lincoln MKS boosts Inalfa sales Chrysler hedged gas price bet Smart phones help dealerships retain customers CAW completes pacts with GM, Chrysler early GM, UAW resolve 2 disputes New media buyer for Chrysler Visteon names Stebbins CEO Convertible registrations drop Ferrari: From denial to debut Buildings Porsches in U.S.? Depends whom you ask Toyota will go slow in Tupelo Ghosn is glum on prices, U.S. sales prospects Pischetsrieder has earned a celebratory cigar NHTSA spins VINs, averts meltdown F_RD GU_S WI_ BUI-_KS 50 PEOPLE FOR 50 YEARS Yutaka Katayama Clarence Talley Jim Morton Pete Brock Marvin Runyon Yoshikazu Hanawa Bill Bruce Shin Maki Jack Collins Mitsuya "Scape" Goto Bob Link Soichi Kawazoe Jerry Hirshberg Takashi Ishihara Roy Rogers John Parker Bob Thomas Teruo Uchino Morrie Sage Bob Thomas Nobe Wakatsuki Earl Hesterberg Carlos Ghosn Lee Clow Jerry Benefield Yutaka Kume Doug Betts Tim McCarthy Jed Connelly Atsushi Nakatsuji Dave Hubbard Joe Opre Patrick Pelata Yoshiyuki Kimura Diane Allen Mad Mike Taylor Chuck King Larry Dominique Mark Igo Mitsuhiko Yamashita Shiro Nakamura Tom Mignanelli Dick Roberts William Cushing Emil Hassan Chester Luby Jane Nakagawa Louis Schweitzer MR. K Ray Lemke Richard McCutcheon

Automotive News - May 19, 2008

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