Automotive News - May 26, 2008 - (Page 6)

6 • MAY 26, 2008 Surprise: Suzuki slides as fuel prices rise Kathy Jackson kjackson@crain.com LOS ANGELES — Small-car specialist Suzuki is missing out on the hot market for fuel-efficient vehicles this year, something it aims to correct for the 2009 model year. Suzuki says it will emphasize value and fuel economy in the new model year. Here are the plans: The Grand Vitara SUV, redesigned for the 2006 model year, will get a new four-cylinder engine. The current model debuted with a V-6 only, which gets 17 mpg in the city and 22 on the highway. Suzuki did not give specifi- cations for the new engine. The mid-sized XL7 SUV gets a sixspeed automatic transmission that will improve fuel economy by 2 mpg over the current five-speed. The XL7 with five-speed gets 16 mpg in the city and 22 on the highway. U.S. dealers will get about 83,000 units of the SX4 compact, up from 40,000 units for the 2008 model year. Suzuki’s sales were off 2.4 percent through April to 36,099. The automaker put 12,043 units into the rental fleets through April, almost all of them XL7s. That is a 57 percent increase in fleet volume over Fuel-efficiency fixes 3 ways Suzuki will emphasize fuel economy in the 2009 model year 1. Grand Vitara, right, gets a 4-cylinder. 2. XL7’s new 6-speed automatic improves fuel economy. 3. Supply of compact SX4 will be increased. the same period last year. Retail sales will get back on track with the increased SX4 volume and the more fuel-efficient engines, said Gary Akin, vice president of sales at American Suzuki Motor Co. Akin expects the four-cylinder Grand Vitara to represent 70 percent of the vehicle’s sales. “We recognized the market was softening for mid-sized SUVs, so the first trimester we were able to place a lot of inventory into the fleet,” Akin said. He said XL7 output at CAMI Automotive Inc., a General MotorsSuzuki joint venture in Ingersoll, Ontario, has fallen from 2,000 a month at the end of 2007 to 1,500. “The growth will be in the subcompact and compact vehicles,” Akin said. “We’re fortunate to be in those segments.” c GM scraps big rwd sedans for Chevrolet and Buick Jamie LaReau and Rick Kranz jlareau@crain.com The current Fiat 500 debuted as a three-door hatchback. For the United States, Fiat Group CEO Sergio Marchionne says, “I am convinced the 500 with a full range will be a smash if we do it right.” Fiat mulls 500 minicar for U.S. Luca Ciferri lciferri@craincom.de TURIN, Italy — Fiat is considering selling its new 500 minicar in the United States. But first it needs to complete its range of body styles and identify a North American manufacturing site. “I am convinced the 500 with a full range will be a smash (in the United States) if we do it right,” Fiat Group CEO Sergio Marchionne said last week on the sidelines of the Automotive News Europe Congress here. Marchionne also said selling the 500 in the United States will not mean the Fiat brand will return to the United States because the 500 is a brand in itself. Answering reporters’ questions, Marchionne said the 500 should be produced in North America to be cost competitive. In July 2007, 50 years after the introduction of the iconic 500, Fiat introduced its remake, the current 500. Marchionne said Fiat received 205,000 dealers’ orders since the 500 launch. The 500 debuted as a three-door hatchback. A softtop cabriolet version will follow in 2009. In 2010, Fiat will add a long-wheelbase, wagon-looking 500. Fiat also is considering an SUV-looking variant that could feature all-wheel drive. Production of the 500 for the United States could come from the North American plant that Fiat Group is scouting for Alfa Romeo. Alfa Romeo, a brand owned by Fiat, plans to return to the United States in late 2009. Said Marchionne: “We will be producing cars in North America by 2010.” c DETROIT — General Motors has killed plans to develop large reardrive sedans for Chevrolet and Buick. The result: The next-generation Chevrolet Impala will remain front drive. “Serious fuel economy issues” killed the rwd vehicles, which were expected to debut around 2011, says a GM source. No other large-car programs are expected to be scrapped, says another GM source familiar with the programs. The rwd Impala was about 3 inches longer than the fwd 2008 Impala and was styled with a long nose and short rear deck, according to industry sources. The Impala SS was expected to offer a 350-plus hp V-8 engine and be positioned head-to-head against the Hemi-powered Chrysler 300 and Dodge Charger. But the federal fuel economy rules, unveiled last month by the Bush administration, persuaded GM to cancel the Chevrolet and Buick programs. The law mandates a 40 percent increase in vehicle fuel economy by 2020, to an industry average of 35 mpg. Administration regulations anticipate a fast start, calling for 25 percent improvement in the 2011-2015 model years. The Chevrolet and Buick sedans were being developed on GM’s global rwd Zeta vehicle architecture by the automaker’s Holden subsidiary in Australia. U.S. models sharing that architecture are the 2008 Pontiac G8 sedan, 2010 Pontiac G8 pickup and the upcoming Chevrolet Camaro. The V-8 version of the G8 gets 15 mpg in the city and 24 on the highway. c GM paid Walter Chrysler a whopping $600,000 a year A few weeks ago, we told you how General Motors mastermind Billy Durant missed buying Ford Motor Co. in 1909 because he couldn’t raise a couple of million bucks. Durant didn’t have to think about buying Chrysler Corp.; there was no Chrysler Corp. And besides, Walter Percy Chrysler worked for GM. With a salary of $600,000, Chrysler was the highest-paid employee in the auto industry. In those days (1916-19), $600,000 was a staggering sum. It is about $12.3 million in 2008 dollars. Walter Chrysler had put Buick back on its feet, and, as a reward, Durant made him GM executive vice president in charge of manufacturing. But the two men didn’t get along, and Chrysler quit in 1919. The official version was that he retired. But Chrysler didn’t stay retired. After all, he was only 44 years old. He saved Willys-Overland and took over Maxwell-Chalmers, which became Chrysler Corp. Hyundai spends like never before to launch Genesis luxury sedan Kathy Jackson kjackson@crain.com Hyundai’s high cost of luxury ➤ 58 for the event, which is expected to reach 150,000 Hyundai and nonHyundai owners. “This car will allow us to reach new customers and talk up quality like we never have,” Ewanick said. “They’ve given us enough resources, and we will spend the money over a short period of time — over the summer. We have to make every cent count. We will be talking to a broad audience to use this as a brand lift.” He said about half of the budget will go toward TV. Internet and grassroots marketing will make up a big portion of the budget. Ewanick said dealers have presold 700 units of the Genesis, and have more than 20,000 consumers who have expressed interest in the car.c SEOUL — Hyundai will spend $80 million on a marketing campaign for its new Genesis luxury sedan — by far the most the automaker has spent to launch a vehicle in the United States. Hyundai expects to sell only about 30,000 units of the rear-drive Genesis annually in the United States. But executives think the car, which will be priced between $30,000 and $40,000 and offered with both V-8 and V-6 engines, will help draw customers to Hyundai dealerships. “Genesis will help sell all Hyundai vehicles,” said Joel Ewanick, vice president of marketing for Hyundai Motor America. The brand halo is needed, added Hyundai will launch the Genesis luxury sedan with an $80 million marketing campaign. Kim Dong-Jin, CEO of Hyundai Motor Co., in an interview this month. Kim said the Hyundai brand name remains weak in the United States. Ewanick said Hyundai spent $4 million on Genesis commercials during the 2008 Super Bowl. A 15-city ride and drive is planned for summer. The company will provide 100 cars For the rest of the story, read Automotive News’ GM 100th anniversary edition, How General Motors Changed the World, on Sept. 15. For information about the special edition, go to www.autonews.com/gm100. http://www.autonews.com/gm100

Table of Contents Feed for the Digital Edition of Automotive News - May 26, 2008

Automotive News - May 26, 2008 Bad times? Not for CEO paychecks GM seeks Volt tax break to avoid $40k sticker Ford's big cuts aim for a Honda-sized lineup Automotive News gets new marketing communications director Toyota pushes N.A. suppliers to match offshore prices VW predicts 5% U.S. sales gain Toyota plans 3 plants for hybrid batteries GM's American Axle strike tab: $2.82 billion Lawsuit in Florida targets congressman's dealership Orbiting the blogosphere Kia to build small cars in U.S. plant VW Mexico exec will run North American purchasing Fiat mulls 500 minicar for U.S. GM scraps big rwd sedans for Chevrolet and Buick Hyundai spends like never before to launch Genesis luxury sedan Surprise: Suzuki slides as fuel prices rise GM paid Walter Chrysler a whopping $600,000 a year Chrysler sends mystery shoppers to dealerships Toyota owes royalties on some hybrids GM, American Axle to resume output Ford predicts bigger demand for smaller engines in Escape This is Volvo? Ads sell chic, not just safety An overnight success in 50 years Obama's comments were out of line Japan does it; why shouldn't we? 25% is high, but Chrysler is wise to revisit SCORE Safety efforts must focus on the driver Blame the dealer for poor service Don't judge Ford quality by just one car Ford quality is best in many years Mitsubishi considers piggybacking with Caterpillar suppliers to cut costs Nissan to make lithium ion batteries 'Boss Ket,' Connery inspire Tim Jackson Germany leads rise in Europe sales Court: Buyers must act in good faith to win lemon law damages Nissan wants suppliers to reduce utility bills Bajaj: From scooters to autos The next $2,500 car? Infiniti will look different, add engine power in Europe Lamborghini boss wants to keep the big engines Lamborghini ups ante in 'entry' supercars Continental exec: We're done selling VDO assets Honda plans Fit hybrid Outgoing Visteon CEO to receive $2.5 million Audi production chief: Cooperation with Porsche will grow Picture this RV shipments fall in March M-B will buy Chrysler studio Supplier personnel VW expects to reap big share of U.S. diesel market Valeo CEO Morin: Pass rising costs to consumers Suppliers to the 2008 Nissan Altima Dealers Auction workshops demystify Web buying April used-vehicle prices: Light trucks fall and cars rise Volvo certified plan offers free satellite radio Mulally: Full speed toward smaller Toyota plans credit card Sanfilippo switches agencies International idles plant Honda Pilot starts at $28,230 Plastech plans assets auction What counts GM's 2-pronged strategy for Calif. rules: If you can't beat 'em . . . meet 'em New wheels for the cop shop The cost of luxury? For Hyundai, it would have been $2.5 billion New tools allow early design input from consumers Lexus in the sky with carbon: How ex-Beatle's PR effort tanked Buy an '08 . . . get a .44 $4 gasoline gives new cachet to aging econo-beaters Time tips its hat to Tata Car marketers: Magazines must widen ad reach Automakers seek 'one-to-one' approach to magazine ads Auto ads go to the movies Here's the next big thing: Ads tailored to you GMC courts women with Acadia

Automotive News - May 26, 2008

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