Automotive News - January 28, 2008 - (Page 1) autonews.com ® JANUARY 28, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY Q2 production will fall even faster Slow economy prompts Detroit 3 to cut deeper David Barkholz dbarkholz@crain.com Tough times North American vehicle production will decline in the second quarter, compared with the same period a year ago. GM Ford Chrysler Toyota Honda Nissan Other – 8.1% –16.3% –19.1% +3.1% +1.9% +11.0% +5.3% Source: CSM Worldwide production forecast, csmauto.com Rate cut helps dealers ➤ 55 But automakers won’t share the pain equally. In a bid to stave off a potentially ruinous price war, the Detroit 3 intend to slash production an average of 12.1 percent. General Motors, Ford Motor Co. and Chrysler LLC also are trying to limit sales to the daily rental fleets. Chrysler, which relies most heavily on sales to daily rental fleets, is expect- North American vehicle production will fall again in the second quarter, with even deeper cuts than in the first quarter. Translation: We’re in a recession. The auto forecasting firm CSM Worldwide predicts second-quarter production will drop 7.2 percent compared with the year-earlier period. First-quarter production is projected to fall 5.7 percent, the suburban Detroit firm reports. ed to cut second-quarter production 19.1 percent. Ford’s production is projected to decline 16.3 percent, and GM production will drop 8.1 percent. By contrast, the three biggest Japanese automakers expect to ride out a recession without serious pain. Toyota is expected to boost North American production 3.1 percent, Honda 1.9 percent and Nissan a see OUTPUT, Page 55 It’s official: Toyota is ’07 sales champ Ready for tough times? Automakers, dealers and suppliers are struggling with higher fuel prices, globalization and the mysteries of Web marketing. Now a looming recession will intensify those pressures like gasoline on a fire. The Automotive News World Congress tackled all those issues and more. Coverage starts on Page 34. After plowing through all the fine print and asterisks, the Automotive News Data Center has determined that Toyota outsold GM globally by nearly half a million vehicles in 2007. | PAGE 6 | World Congress highlights CEO Bob Nardelli says private ownership allows Chrysler to be more nimble ➤ 34 IAC’s Wilbur Ross sees falling North American sales leading to supplier consolidation ➤ 34 Green panel: U.S. industry can grab technology leadership — or punt ➤ 36 Marketing: Carmakers need to reach buyers personally ➤ 40 Selling Smart: Little car, big changes GLENN TRIEST Wall Street financier Wilbur Ross, left; Chrysler CEO Bob Nardelli, center; and Automotive News Publisher Keith Crain shared the spotlight at last week’s Automotive News World Congress. Yes, there are salespeople and a coffee pot. Other than that, Smart U.S.A. dealerships are little like those of the well established brands. For starters, there’s no inventory. | PAGE 54 | Execs favor Romney with campaign cash Harry Stoffer hstoffer@crain.com GM cars to get smaller engines with turbos Rick Kranz rkranz@crain.com Ford: We won’t buy share with spiffs Deciding that profits trump volume, Ford says it won’t prop up the falling market share of its domestic brands with costly incentives. | PAGE 8 | Looking at lists of presidential campaign donors is like clicking through MySpace or Facebook. You want to see who is hooking up with whom. Rick Wagoner and Bob Rossiter donated to Mitt Romney. Mike Jackson bankrolled Rudy Giuliani. Frank Ewasyshyn and Jo Cooper are McCainiacs. And Mark Hogan gave some cash to Hillary. These are the most prominent automotive names that turned up on presidential campaign contributor lists filed with the Federal Election Commission. The Center for Responsive Politics, a Mitt Romney: Helped by family ties to auto industry nonpartisan Washington research group, analyzed the lists. Romney leads presidential candidates in campaign donations that can be identified as coming from auto industry people. The automotive categosee MONEY, Page 53 DETROIT — Never mind fuel cells, plug-ins or diesels. To achieve quick improvements in fuel economy, General Motors is adopting an offthe-shelf technology: small engines with turbochargers. Next year GM will introduce a turbocharged 1.4-liter gasoline engine for small U.S. cars. The Chevrolet Cobalt and Saturn Astra are candidates for the engine, which is available without a turbocharger in the European Opel Astra. GM engineering chief Jim Queen confirmed the company’s plans to use the powertrain and said it could be used in mid-sized vehicles, too. “You’re going to see turbocharged four-cylinders in vehicles that no one could have ever imagined that they would be in,” he said. Queen did not indicate where the engines would be made or predict their fuel economy. The 2008 Cobalt with its 2.2-liter engine gets 33 mpg highway and 24 city. Automakers find turbochargers a cost-effective way to improve fuel economy. This month Ford Motor Co. announced its EcoBoost system, a turbocharged gasoline engine with direct injection. Next year EcoBoost will debut on the Lincoln MKS sedan. By 2012, Ford expects to have as many as 500,000 EcoBoost vehicles on the road in North America. The 1.4-liter turbocharged engine is small by U.S. standards. With its 1.6-liter powertrain, the Korean-built Chevrolet Aveo currently has the smallest GM engine sold in the United States. The Saturn Astra has a 1.8-liter engine. Turbochargers could cost GM $200 to $450 per vehicle depending on the system’s sophistication, said Jim Hall, director of industry analysis at 2953 Analytics in suburban Detroit. c On the Web This week at www.autonews.com: Tuesday: ArvinMeritor Inc. releases financial results for the quarter ending Dec. 31. Thursday: Lear Corp. releases results for the fourth quarter and 2007. Friday: American Axle & Manufacturing Holdings Inc. releases results for the fourth quarter and 2007. Friday: Get live breaking coverage of January U.S. sales results. NEWSPAPER http://autonews.com http://csmauto.com http://www.autonews.com
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