Automotive News - March 3, 2008 - (Page 1)

autonews.com ® MARCH 3, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Bob Nardelli’s new big-idea guy Chrysler consultant Arnell has power — and the boss’ ear Bradford Wernle bwernle@crain.com New day at Chrysler purchasing, too Peter Arnell has a history with Chrysler. New York branding and communications adman known for big splashy ideas. He’s a consultant, not a Chrysler employee, but he has a newNew Chrysler purchasing czar John Campi is pushing to source parts in low-cost countries, taking a hard line with troubled suppliers. | PAGE 8 | DETROIT — There’s a new power broker working in the 15th floor executive offices of Chrysler LLC’s global headquarters — a man who might give dealers a feeling of deja vu. He’s Peter Arnell, a flamboyant ly created title: “acting chief innovation officer.” And he’s got clout. Chrysler CEO Bob Nardelli has given Arnell broad influence over Chrysler’s brand strategy, product planning and dealership and customer merchandising. Arnell arrived at Chrysler last fall, but Chrysler has been quiet about his presence. And the extent of his influence is now emerging. Arnell’s consulting services bring him into areas of the company that already have bosses, raising the specter of possible turf wars and exsee ARNELL, Page 51 Likely GOP presidential nominee John McCain says NAFTA’s benefits are unambiguous. A do-over on NAFTA? Democrats Hillary Clinton and Barack Obama say the 14-yearold NAFTA pact needs revision — a view vigorously disputed by the auto industry and Republican John McCain. | PAGE 3 | ISTOCKPHOTO New Kia boss reaches out to restless dealers Kathy Jackson kjackson@crain.com Geneva eye candy European design houses strut their style in Geneva, as seen in these futuristic concepts. They’ll never make a huge impact on U.S. sales — but aren’t they pretty! Geneva auto show press days are Tuesday and Wednesday, March 4 and 5. Check autonews.com/geneva for show coverage. Roof-mounted solar panels generate electricity for the air conditioner and battery of this ItaldesignGiugiaro Quaranta prototype. The vehicle’s powertrain is a Toyota-built hybrid. LOS ANGELES — Kia dealers are seething over low profit margins, sliding sales, bloated inventories and the seventh CEO change since 1999 — and they want to know what the company’s Korean bosses plan to do about it. And Kia Motors America’s new CEO, Byung Mo Ahn, promises to put things right with dealers. But his first step was to saddle them with a sales goal that many dealers say is way, way out of reach. In a letter to dealers, obtained by Automotive News, Ahn said he will accompany dealer council members to Korea the week of March 9. The dealers will meet with top Kia Motors Corp. management, visit the r&d center and test drive Kia vehicles scheduled to launch through 2010. “That is supposed to help soothe the jangled nerves of the dealer body,” said one skeptical retailer. Said another: “Dealers are sitting on all of this inventory, and a lot of them are angry.” The inventory situation was cause for an emergency dealer council meeting at the National Automobile see KIA, Page 50 Turmoil at Lithia Retailer Lithia Motors reported its first quarterly loss since it went public in 1996 and said an investigation of “potential reporting irregularities” could alter the final figures. Lithia also said it fired Don Jones Jr., senior vice president of retail operations. | PAGE 3 | Bertone’s B.A.T. 11 concept, based on the Alfa Romeo 8C Competizione coupe, recalls 1950s-era designs by Nuccio Bertone. Bertone will display the car off-site in Geneva. Gillman Jackson Smith The Dealer Speaks Megadealers Ramsay Gillman, Mike Jackson and Scott Smith describe what their dealership groups are doing to ride out a tough sales year in 2008. | PAGES 34, 36, 38 | Scion hits a wall Mark Rechtin mrechtin@crain.com Toyota’s perky youth brand is adding dealers but losing sales as 2nd-generation models struggle Even with new vehicles including the xD hatchback, shown, and the redesigned xB, Scion’s sales are struggling. LOS ANGELES — Toyota’s cool, quirky Scion youth brand may still be hip but is no longer hot. Sales, year-on-year, have dropped for 16 straight months. Since August, monthly sales have declined from each previous month, even though dealers have had two redesigned models in their showrooms during that period. The first-generation Scions were hits right out of the box in 2003 and 2004. But generation two has struggled. All of which begs the question: Is this a brand built to last? The changeover of two of Scion’s three models — the boxy xB and the xD hatchback — dragged on for months and helped depress sales 24.8 percent in 2007 to 130,181 units. But even with new vehicles, Scion can’t seem to pull out of its slump. “We seem to be having more sales peaks and valleys than previously,” said Farlon see SCION, Page 50 On the Web This week at www.autonews.com: Monday: Automakers report February U.S. sales. Monday: Troubled supplier Plastech Engineered Products returns to U.S. Bankruptcy Court to help arrange crucial bank financing. All week: Breaking coverage of the UAW’s strike at American Axle and the impact on GM truck operations. NEWSPAPER http://autonews.com http://autonews.com/geneva http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - March 3, 2008

Bob Nardeli's new big-idea guy New Kia boss reaches out to restless dealers Scion hits a wall Lithia losses raise caution flag Detroit 3 shun talk of NAFTA do-over Lincoln names new marketing manager Mercedes to launch hybrid sedan in '09 Mazda has new top marketing exec M-B will hit the road with 50-state diesels Pontiac puts big ad bucks into traditional media for G8 Reynolds, ADP diverge on growth strategies Ford plans to cut fleet sales 10% in 2008 Mazda: New models, styling will boost its loyalty rate Run-up to axle strike adds to supplier woes Webasto's fast heater will debut by 2010 Russian plant wants to be world's biggest A Lancer is hatched Chrysler throws out purchasing rulebook Honda sets lofty hybrid goal, with Civic's help Honda: Use of ethanol limited, must be biomass Honda CEO Fukui: No recession in U.S., despite soft sales in spots 550 hp? 620 hp? Is GM crazy? Doug Fraser was a great leader How ironic: Lyons learns caution Well done, Doug Don't let Calif. impose fuel rules on the nation Blame the dealer, not the brand Cutting weight doesn't cut safety When Lutz dumps on global warming ... JM exec Czubay: A taste for hogs, pierogi Doug Fraser: A good man to have known Fraser led UAW with 'combination of substance, politics and charm' Autonet finds success at NADA with wi-fi for cars GM to sell medium-truck business, keep dealer network Web classified ad firms renew marketing to dealers, buyers Chery designs venture's vehicles China venture eyes 20,000 Fiesta hatchback sales Toyota plans crossovers in China Dongfeng, YuAn plan minicars BMW shakes up global marketing, sales ranks Delphi divestiture boosts forging supplier Is Blackhawk purchase bucking a trend? Repair company grows as Detroit 3 struggle BorgWarner unit expands German automakers seek more parts sourced in North America Hyundai picks ArvinMeritor Japan parts firm to build Miss. plant Nissan to increase spending on IT Purchase keeps Tenn. plant open Automakers hit with apartheid claims Mexico sales flat in January Ford prices '09 Flex atop crossover line Hamp rejoins Visteon board RV deliveries decline 3.4% in December Subaru lowers Forester price Personnel Bright future for LED headlight suppliers? Valeo's Morin to Pardus: Learn before you leap German automakers aren't worried about U.S. recession Porsche's Wiedeking: We must retool VW Europe's loud debate over quieter tires Noise level depends on the tires, the road Auto industry robotics spending jumps 43% in 2007 Electronic brakes struggle to get traction Big Texas dealer returns to some domestic brands AutoNation chief sees tough '08, better '09 In downturn, Sonic looks beyond new cars GM promotes service, parts leads for dealerships 10 cool dealership technologies found at NADA Dealers Kia will build transmissions at Georgia plant Gibson leaves DealerTrack board Akebono closing Kentucky plant Feds issue Ford fire warning Magna net income drops VW to use Siemens' software A tale of 2 exhaust systems EU wants CO2 in ads; battle looms Maize malaise stalls ethanol Tata to siesta during Ford's Fiesta Honda moves its American bike offshore Honda will recycle cycle plant Tom LaSorda's multimillion-dollar smile

Automotive News - March 3, 2008

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