Automotive News - March 3, 2008 - (Page 32b)

32B • MARCH 3, 2008 Valeo’s Morin to Pardus: Learn before you leap Anne-Elisabeth Moutet autonews@crain.com Although EU legislation is still to be approved, the Audi R8 is scheduled to get full LED headlamps later this year. Bright future for LED headlight suppliers? EU action would give companies a boost James Franey jfraney@craincom.de PARIS — Valeo CEO Thierry Morin was feeling feisty this month during a press conference after the release of the French supplier’s year-end results. Morin talked about the supplier’s 17.7 percent increase in annual operating profit to 319 million euros ($469.0 million at current exchange rates) on sales of 9.7 billion euros ($14.26 billion). But he also gave some unsolicited advice to one of the company’s major shareholders and criticized General Motors. Speculation remains strong that the major shareholder — New York City hedge fund Pardus Capital Management LP — wants more control at Valeo. The fund increased its stake in the supplier to 19.7 percent in January from 16.3 percent. Morin said he has heard “four different strategies from Pardus at different times. It depends on the day.” Then he added this suggestion: “To enter this business, you ought to know it very well before you start making hasty decisions.” Supporters are welcome Last summer, Pardus founder Karim Samii proposed eight candidates, including himself, to the Valeo board, but none was elected. Morin says he would welcome board representation from Pardus as long as the new board members support Valeo’s strategy and want to help. “But if they plan to come in and tell Valeo to buy Visteon, that would be completely inappropriate,” Morin said. Pardus also has a large stake in U.S. parts maker Visteon Corp. and in the past has campaigned for Valeo to launch a takeover bid of Visteon. Pardus has lost almost a quarter of its value — about $800 million — since November because of troubles with its investments in U.S. airlines, according to media reports. Lighting suppliers are poised to benefit if the European Commission approves the use of full LED headlamps by year end, as expected. High-beam LEDs still require approval to be used on cars in the European Union. “We are currently preparing legislation, and we expect it to be adopted before the end of the year,” says a commission spokeswoman. Supplier Automotive Lighting will target premium automakers for the costly but durable lighting, said Khalid Qalam, vice president of sales and marketing. “We see the most potential for LEDs in the luxury segment,” Qalam told Automotive News Europe. “At this end of the market, customers are less price-sensitive and will be prepared to pay for them.” He estimated that the market for full LED headlamps could be worth 180 million to 220 million euros (about $265.3 million to $324.3 million at current exchange rates) over the next four years. Automotive Lighting is a subsidiary of Fiatowned supplier Magneti Marelli. Analysts at Roland Berger expect up to 15 percent market share for full LED headlamps by 2010. More Ford business Turning to GM, Morin said he was happy to have fewer sales to the automaker. U.S. automakers have become less important in Valeo’s global sales. “We have significantly disengaged from our loss-making contracts with GM,” Morin said. “Conversely, we are doing more, and more profitable, business with Ford.” Last year, 21.8 percent of Valeo’s total volume was with the Detroit 3. In 2001 that percentage was 31.7 percent. Valeo replaced the U.S. volume with increased sales to Asian and German automakers. “Yes, we lost 10 percentage points in the U.S., but we’ve gained almost 10 percentage points in Japan,” Morin said. “That’s a better positioning.” c LEDs cost up to 20 times more than halogen bulbs, but they use less energy and last longer. Good times ahead? Leading suppliers of LED lights Automotive Lighting Hella Osram Philips Schefenacker Valeo Visteon equipped to make up to 10,000 modules a year, company officials said at a Detroit unveiling of the LED technology in January. Daniel Veitner, director of marketing for Hella’s lighting division, says that although LEDs are expensive — they cost up to 20 times more than halogen bulbs — they benefit customers because they use less energy and last much longer than halogen lamps. LED headlamp assemblies also could take less room and require fewer access points for wiring harness or bulb replacement. Mass-market potential These headlamps use light-emitting diodes — LEDs — as the sole lighting source. Until now, most headlamps have used xenon gas high-intensity discharge systems or halogen-filled incandescent bulbs. LEDs already are used for functions such as turn signals, rear lights or daytime running lights. Qalam said volume manufacturers also are investigating the feasibility of full LEDs, but these carmakers are only in the study phase because of the high cost of the technology. Until now, automakers have had to request special permission from the European Commission to use LED headlamps in their vehicles. Regulations in North America allow the use of LED headlamps. The Cadillac Escalade Platinum SUV will carry a system from Germany’s Hella KGaA Hueck & Co., using LEDs created by Osram Opto Semiconductor, when the Escalade is released in April. The system uses five LED emitters behind individually focused lenses to give a full headlight pattern. The color “temperature” of the light closely approximates daylight. Each headlamp module includes a small cooling fan to remove heat created by the LED electronics. Hella will manufacture the lamps in Germany on an assembly line Possible uses Although EU legislation is still to be approved, Audi has been developing its full LED technology for some time, says Stephan Berlitz, head of lighting development at the automaker. “We knew that this was going to happen, so we already started working on it on the basis the law would be passed,” Berlitz says. “The R8 will get full LED headlamps later this year.” Berlitz declined to identify which other Audi models would feature full LEDs, but company sources say the next A8 will have them when it launches in 2010. Mercedes sources also say the next CLS class will feature LED headlamps when it goes on sale in 2010.c Valeo CEO Thierry Morin: The supplier is doing less business with the Detroit 3 but more with Asian and German automakers.

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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