Automotive News - March 3, 2008 - (Page 8)

8 • MARCH 3, 2008 advertising OUR DEALERS ARE GROWING AND SO CAN YOU! Mitsubishi’s ‘Step Up’ plan is step down for U.S. Hans Greimel hgreimel@crain.com Campi’s way New Chrysler purchasing chief John Campi, left, Contracted for Jeep Wrangler seats from an Indian supplier Tried to pull tools from Plastech rather than work with GM and Ford on a workout of the supplier’s financial problems Outsourced a major chunk of Chrysler IT to Tata Consultancy Services of India Slipping U.S. sales Mitsubishi’s business plan is bullish overall but bearish for the U.S. FISCAL 2008* FISCAL 2011* “With Zimmerman as a partner we have grown to be the # 1 GM Dealer in Albany, NY.“ Kara DePaula DePaula Chevrolet RESULTS! • KEYES AUTO GROUP • IRA MOTOR GROUP • TOM WOOD AUTOMOTIVE • CHECKERED FLAG • AUTONATION • DIEHL MOTOR COMPANY • CORAL SPRINGS AUTOMALL • RUSTY ECK FORD • AUTOLAND • HENDRICK CARY AUTOMALL • PATRICK AUTO GROUP • HUBLER AUTOMOTIVE • PLEASANTON AUTOMALL • DEPAULA CHEVROLET • WALLACE NISSAN OF KINGSPORT • SUPERIOR CHEVROLET Dealers Prove Our Advertising Gets TOKYO — Mitsubishi’s long-awaited midterm business plan, dubbed “Step Up 2010,” is more of a step down for the beleaguered U.S. market. Sales there are expected to fall. The ambitious blueprint aims to more than double global net profits in three years. It also predicts a 6.4 percent increase in total sales thanks to booming emerging markets. Yet in the United States, sales are expected to slump. Mitsubishi expects to sell 106,000 vehicles in the fiscal year ending March 31, 2011. That is down from 121,000 expected in the current year. Osamu Masuko, president of Mitsubishi Motors Corp., unveiled Step Up 2010 here on Friday, Feb. 29. The targets, if achieved, would be great news for a company staging a steady comeback. But the revitalization plan highlights the difficulties Mitsubishi faces in the United States and other mature markets. In North America, the company says a key goal is simply “stability.” “The North American business, especially in the United States, will continue to be a very severe market situation, triggered by the subprime loan issue,” Masuko said. By contrast, Mitsubishi is giving top priority to Russia, Brazil, China, India and the Middle East as so-called Focus Markets. Sales there will largely be driving the company’s turnaround. In Russia, for example, volume is expected to rocket 67.3 percent to 169,000 vehicles annually in the next three years, outpacing planned sales of 106,000 in the United States. Worldwide, Mitsubishi is forecasting sales to climb to 1.42 million vehicles in the fiscal year ending March 31, 2011, from an expected 1.34 million in the current year. U.S. sales rose 8.8 percent in the 2007 calendar year to 128,993 vehicles. But in the face of the coming backslide, Global sales U.S. sales 1.34 million 121,000 1.42 million 106,000 *Fiscal year ends March 31 Source: Mitsubishi Motors Corp. Masuko says his company will push for profitability over volume. For the United States, that means the following strategy: Improve dealer loyalty. Reduce incentives. Focus on mid-sized passenger vehicles, not SUVs. Cut fixed costs. Increase export destinations. Mitsubishi also will boost its U.S. lineup by introducing a Lancer Turbo later this year and a Lancer Sport Hatchback sometime next year. The Eclipse sports car, Eclipse Spyder and Endeavor crossover also will be refreshed under the plan. Zoom out beyond the United States, and the picture quickly brightens. Over the next three years, Mitsubishi is aiming for global net income of ¥50 billion ($476.2 million), up from an expected $190.5 million in the current year. Revenue is seen advancing 3.3 percent to $26.3 billion. Mitsubishi is also planning to increase average r&d spending to $761.9 million a year, compared with $666.7 million in the past three years. Research on clean diesels, electric vehicles and weight reduction will be key investments.c Chrysler throws out purchasing rulebook David Barkholz and Bradford Wernle dbarkholz@crain.com ■ A Lancer is hatched GET A COMPLETE MARKETING PROGRAM! Guerrilla TV Marketing Radio Print Hispanic Direct Mail Web Design Mitsubishi’s Prototype-S concept, debuting this week at the Geneva auto show, previews the design of the Lancer five-door hatchback, which goes on sale in Europe this year. The concept’s aggressive front end and wide, low proportions show the Japanese carmaker’s new sportier design plan. Mitsubishi currently has no plans for U.S. sale of the hatchback. DETROIT — New Chrysler LLC purchasing czar John Campi is tossing out the rulebook for dealing with parts suppliers. He’s making good on his vow to source more work in India and other low-cost countries. For example, Chrysler says it will shift a big chunk of information technology work from local suppliers to Tata Consultancy Services in Mumbai, India. Nothing too unusual there; India is a hub for IT contracting. But another India gambit has suppliers shaking their heads. UAW officials in Toledo, Ohio, report that Chrysler will drop Johnson Controls Inc. as its Jeep Wrangler seat maker beginning in 2010, replacing JCI with a supplier in India. Seats traditionally are made near auto assembly plants so they can be delivered just in time to be bolted into vehicles. They’re bulky to ship long distances and need careful handling so they’re not scratched or damaged. India or … Indiana? No assembly plant in North America imports seats from overseas. And no Indian company makes automotive seats in North America. So the new supplier, which Chrysler did not see CHRYSLER, Page 51 Honda sets lofty hybrid goal, with Civic’s help Hans Greimel hgreimel@crain.com High on hybrids Honda is eyeing annual hybrid sales of about 400,000 worldwide by 2012. The breakdown MODEL PROJECTED ANNUAL SALES Internet Website Optimization In-Store CALL OR E-MAIL THE AGENCY THAT WILL WORK FOR YOU 24/7 (SERIOUSLY) 1-888-878-ZADV zauto@zadv.com or visit www.zadv.com TOKYO — Honda Motor Co. is banking on three hybrid models, including the next-generation Civic Hybrid, to reach an ambitious annual sales target of 400,000 hybrids worldwide in the next five years. Honda sold just 55,300 hybrids globally last year, and the Civic Hybrid is currently the only hybrid it offers. About half the future hybrid sales are expected from a new hybrid-only model debuting early next year. Slightly more than 100,000 are expected from a sporty hybrid model due thereafter. The rest will come from the next-generation Civic Hybrid, CEO Takeo Fukui said last week. After a lackluster reception for the Civic Hybrid and Accord Hybrid, New hybrid-only vehicle Sporty hybrid Redesigned Civic Hybrid Source: Honda Motor Co. 200,000 100,000 100,000 The Civic Hybrid currently is the only hybrid Honda sells. CEO Fukui says affordability is key. He says lower operating costs should pay for a hybrid’s higher sticker price in two years. up and sold 429,000 units last year. But even a decade after the Prius’ launch, Toyota had sold only 1.25 million in total. Still, Honda could get a big boost from what is expected to be exploding demand for hybrids. By 2012, the global market will more than triple to 2.19 million units a year from an estimated 619,000 in 2007, according to Japan’s Nomura Research Institute. c Honda wants the new lineup to challenge Toyota’s dominance in the field with such hits as the Prius. The goal: Make hybrids account for 10 percent of Honda’s total sales by 2012, compared with only 1.5 percent today. Hybrids use an internal combustion engine and one or more electric motors to power the wheels. Fukui said the key will be making new hybrids more affordable. He offered no specifics but said a hybrid’s higher sticker price should be offset by lower operating costs in two years. Honda hasn’t given a timeline for the launch of the next-generation Civic Hybrid. But the last full model change came in 2005, meaning that the current model still has some life. Toyota had eight hybrids in its line- http://www.zadv.com http://www.zadv.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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