Automotive News - March 3, 2008 - (Page 6)

6 • MARCH 3, 2008 Ford plans to cut fleet sales 10% in 2008 Amy Wilson awilson@crain.com Ford fleet falls DAILY RENTAL SALES % OF TOTAL SALES DETROIT — After slashing U.S. sales of daily rental vehicles by nearly one-third in 2007, Ford Motor Co. plans to trim those sales by an additional 10 percent in 2008. “Last year we took a meat cleaver to it,” Ford sales analyst George Pipas told Automotive News. “We will be shaving some more sales in 2008.” The 2008 cuts will be concentrated in the first half of the year, Pipas said. Ford trimmed daily rental units by 5 2006 2007 2008* * Projected Source: Ford Motor Co. 447,000 units 304,000 units 270,000 to 275,000 units 16.3 12.8 12-13 percent in January and about 20 percent in February. More reductions are planned through June, with a small decline likely in April, he said. Ford is cutting daily rental sales as part of CEO Alan Mulally’s turnaround strategy to better match production levels with demand. Some daily rental sales can be healthy, but Ford had sold too many units of sev- eral vehicles to rental fleets to keep its factories running. That hurt profits and resale values. For example, the prior-generation Ford Taurus went almost exclusively to fleets by 2005 and 2006. So Ford closed the Atlanta plant that assembled the Taurus in late 2006 and discontinued the model. The end of that Taurus was the major contributor to last year’s fleet decline. The 2008 fleet reduction will be more spread among nameplates. By midyear, Ford will be at its long-term desirable level of daily rental sales, Pipas said. During the second half of 2008, some months are likely to show increases in daily rental sales. Although Ford is cutting daily rental sales, it still values the exposure that rental fleets can give to new vehicles. The 2009 Ford Flex crossover is a good candidate for putting into rental fleets when it goes on sale this summer. Said Pipas: “That might be something we’d like to have waiting at an airport for a family about to go on vacation.” c Webasto’s fast heater will debut by 2010 Richard Truett rtruett@crain.com Run-up to axle strike adds to supplier woes David Barkholz dbarkholz@crain.com Webasto AG says a new device that rapidly heats engine coolant in extreme cold will be available on at least one North American vehicle by 2010. The German supplier will demonstrate its Liquid Heat Generator at the Geneva auto show this week. Webasto says the device will save fuel, cut emissions and improve driver comfort. The belt-driven device mounts to the front of the engine and quickly heats the coolant by rapidly swirling it in a rotor and a stator. The quick heating of the coolant means that the vehicle’s interior heater and windshield defroster can be fully operational in about three minutes, down from about 10 minutes or more in a vehicle without such a device. The first uses likely would be dieselpowered vehicles because those engines take longer to warm up than gasoline engines, said John Thomas, Webasto Product North America Inc.’s general manager of car thermosystems. The device uses about 7 hp and turns off when the coolant is heated. No major re-engineering in the engine cooling system is needed. Thomas said the rapid heating of the coolant can reduce the time it takes for the catalytic converter to reach operating temperature. The cost to an automaker, he said, would be about $300. c Mazda expects interest in vehicles such as the redesigned 2009 Mazda6, shown in this spy photo, to boost buyer loyalty this year. BRIAN WILLIAMS/BRENDA PRIDDY & CO. Mazda: New models, styling will boost its loyalty rate Rick Kranz rkranz@crain.com DETROIT — Mazda expects its loyalty rate, which has been subpar, to rebound thanks to an expanded model line and styling that attracts buyers. Last year, Mazda’s loyalty rate stood at 22.5 percent, compared with 58.1 percent for Toyota and 53.7 percent for Honda, according to the Power Information Network. Jim O’Sullivan, CEO of Mazda North American Operations, expects Mazda’s loyalty rate to rise because of the addition last year of the CX-7 and CX-9 crossovers, expanded interest in the freshened 2008 Mazda5 mi- ni-minivan and the redesigned Mazda6 coming this fall. “When you look at Mazda6 and Mazda3, you will find that the owner loyalty on those newer-generation products” is higher, O’Sullivan said at a press event here. “People are coming out and buying another product.” Power defines loyalty as the percentage of owners who traded in a Mazda for another Mazda. Power’s data are for retail transactions only and do not include leases. O’Sullivan said Mazda’s loyalty rate today has been hurt because some owners who shopped rebate, not brand, eventually abandoned Mazda. “Five, six years ago, if you look at the number-one purchase reason for a lot of our customers, it was deal,” he said. When those Mazda owners decided to replace their cars and discovered that a $6,000 rebate was not offered again, either they “migrated to other brands, or they are still in their same vehicle,” O’Sullivan said. Today, the top purchase reasons “are styling and value,” he said. Tom Libby, an analyst for the Power Information Network, said Mazda’s limited model line has hurt owner loyalty. Brand loyalty, Libby said, “is related to the breadth of the product portfolio.” c General Motors’ suppliers are feeling the pain caused by last week’s UAW strike at American Axle & Manufacturing Holdings Inc. The axle shortage that shut production last week at GM’s Pontiac (Mich.) Truck assembly plant means GM’s seat and other parts suppliers lost business. The plant builds 433 Chevrolet Silverado and GMC Sierra pickups daily. But even the run-up to the strike affected other GM suppliers, said Erich Merkle, forecasting vice president for IRN Inc. in Grand Rapids, Mich. In the weeks leading up to the strike, which began Tuesday, Feb. 26, GM increased pickup and SUV production to build dealer inventory, Merkle said. In a soft market for trucks, that had suppliers working and paying overtime. Now those suppliers are looking at potentially lengthy down times either as a result of the strike or to allow GM to shrink its bloated inventories if the strike is a short one, Merkle said. “The American Axle situation adds a degree of production volatility that is expensive from a supplier perspective,” he said. GM has forecast an 8.4 percent cut in North American light-truck production in the first quarter, to 608,000 units from 664,000 in the year-earlier period. Yet GM increased truck production in January to 179,246 vehicles from 167,729 the previous January. c Russian plant wants to be world’s biggest Jesse Snyder jsnyder@craincom.de JESSE SNYDER The Lada Kalina assembly line in the Togliatti, Russia, plant has so many workers that some have no tasks for at least part of each 63-second cycle. TOGLIATTI, Russia — Russian automaker AvtoVAZ plans to have the world’s largest vehicle assembly plant here, with annual capacity of 1 million units or more. AvtoVAZ wants to use its alliance with Renault and Nissan to help its massive Togliatti complex surpass Volkswagen’s main plant in Wolfsburg, Germany. Last year, the PricewaterhouseCoopers Automotive Institute rated Wolfsburg’s capacity at 746,000 units and Togliatti’s at 725,000. “We plan to expand capacity to 1 million or 1.5 million units,” AvtoVAZ CEO Boris Aleshin told Automo- tive News Europe. Exactly how much capacity to add is still being discussed as AvtoVAZ and Renault negotiate the fine points of an agreement for Renault to buy 25 percent of AvtoVAZ equity, Aleshin said. The 1,480-acre industrial site along the Volga River 500 miles east of Moscow is massive. Togliatti is similar in concept to Ford Motor Co.’s Rouge complex southwest of Detroit. Iron ore, coal and other raw materials go in one end, and cars drive out the other. Three final-assembly lines run parallel to each other for slightly more than a mile in a straight line. Assembly lines make Lada Kalina sedans and Chevrolet Niva SUVs. But Togliatti’s work force of 104,000 is a legacy of an economic system that placed more value on creating jobs than making a profit. For example, the Kalina assembly line has so many workers — six or more are visible at some stations — that some have no tasks for at least part of each 63-second cycle. Aleshin is acutely aware of the conflict between efficiency and excess manpower, but instead of layoffs, he said excess workers should be given jobs at other businesses. Said Aleshin: “I believe we have a huge responsibility to the city, to the workers.” c Anna Smolchenko contributed to this report

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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