Automotive News - April 21, 2008 - (Page 32)

32 • APRIL 21, 2008 In China, GM looks to fresh vehicles in 2009 Alysha Webb alyshawebb@yahoo.com SHANGHAI — Shen Hui sells Chevrolets at Shanghai Taiping Shenjiang Auto Sales Co. He’s satisfied with the job except for one thing. “I wish Chevrolet would bring in more models,” he says. General Motors wishes it could bring in more models, too. A lack of new models has slowed its sales growth in China, but analysts aren’t worried. GM’s sales in China are still strong, and the arrival of new models on GM’s global small-car platform in 2009 will provide a sales boost, they say. The sales growth slowdown “is mainly a product cycle issue,” says John Zeng, an analyst with Global Insight in Shanghai. “When they fully replace their models, GM will be OK.” Sales at Shanghai GM, GM’s main car joint venture in China, were 128,649 units in January through March, up 13.6 percent compared with the same period in 2007, according to GM. That does not include sales of the Chevrolet Spark small car, which is produced in a different joint venture. First-quarter figures for the Spark were not available, but in January through February, GM sold 5,133 Sparks in China. ping, says Frank Chou, a consultant at PAC Group in Shanghai and a former GM China executive. “GM has exhausted all the high-volume products,” Chou says. No simple solution 20% growth The car market in January through March grew 20.4 percent to 1.85 million units, according to the China Association of Automobile Manufacturers. That includes SUVs, vans and crossovers. Market share figures for the first three months are unavailable. But in January through February, GM held 10.0 percent of China’s car market, according to Automotive Resources Asia, a division of J.D. Power and Associates. That was good enough for second place. Volkswagen AG was the leader with 18.0 percent. Both are looking over their shoulders at a fast-closing Toyota Motor Corp. Although it entered China much later than GM and VW, Toyota already holds 9.0 percent of the market. GM doesn’t have a silver bullet to solve the sales slowdown for this year. It has already introduced two variations of the Aveo small car. No other launches are planned, says Shen. Buick has only two vehicle launches planned for this year, says a salesman at a Buick dealership down the road from the Chevy store. Both are face-lifts of existing nameplates, the Excelle and LaCrosse sedans. New vehicles will have to wait for the launch of the global Epsilon midsized platform in China next year, say analysts. Says Zeng: “Until next year, when they launch their new Epsilon platform, they will have to rely on price” to remain competitive. c Yang Jian contributed to this report ALYSHA WEBB GM began selling the Chevrolet Aveo hatchback in China last month. “The foremost challenge comes from our competitors who have been consistently releasing new models,” says Shanghai GM Vice President Sun Xiaodong. “Most noticeably, the Japanese brands have quickly launched a strong lineup of products in the past few years.” It shouldn’t surprise anyone that GM’s market share in China is slip- SHAREHOLDER RETURN REPORT U.S. economic woes hurt shareholder values Lindsay Chappell lchappell@crain.com GLOBAL AUTOMAKERS Total shareholder return for largest global automakers; percentage change per period Q1 2008 26.1 5.6 2.4 –4.7 –6.0 –8.8 –10.5 –11.3 –11.4 –13.3 –15.0 –15.1 –21.9 –22.7 –22.7 One year 94.9 15.0 12.5 –18.8 –4.7 21.7 4.6 –7.8 –5.1 –14.0 –27.5 –5.0 –2.6 –17.5 –35.7 Three years 547.6 53.6 31.7 49.0 52.3 160.5 91.3 219.7 27.5 27.0 –46.1 –7.9 34.4 –5.6 –26.5 GLOBAL SUPPLIERS Total shareholder return for largest global suppliers; percentage change per period Q1 2008 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Akebono TRW Auto American Axle ArvinMeritor GKN Tenneco Toyoda Clarion Stanley Electric Showa Bridgestone Valeo Autoliv Johnson Controls Lear JTEKT Goodyear Tire Michelin Magna Cooper Tire Aisin Seiki BorgWarner TSR Index Rieter Visteon Tokai Rika Sanden Denso NHK Spring Continental Faurecia Plastic Omnium NSK Calsonic Delphi* 17.3 11.9 10.9 7.5 7.3 7.2 7.1 0.2 –1.1 –2.1 –3.7 –3.7 –4.0 –5.8 –6.3 –8.2 –8.6 –8.9 –9.1 –9.2 –9.4 –10.9 –11.2 –13.8 –14.3 –15.3 –19.4 –20.1 –21.9 –22.2 –23.2 –25.7 –26.2 –28.0 –69.6 One year –16.1 –31.9 –23.0 –29.4 –17.0 9.7 61.9 59.7 22.5 –36.7 –13.6 –30.6 –9.6 8.6 –29.0 –4.9 –17.3 –4.0 –1.6 –16.4 10.4 15.0 –8.6 –21.5 –56.0 13.5 –3.5 –11.1 –27.3 –19.6 –25.3 –17.8 –17.6 –22.2 –98.5 Three years 32.6 22.0 –8.5 –12.5 40.6 124.2 118.8 37.0 70.7 –31.5 –1.6 –2.0 14.1 90.1 –39.6 26.7 93.3 69.5 14.8 –11.6 75.4 81.5 32.3 29.8 –34.1 74.5 –8.9 37.8 7.7 37.4 –32.8 44.9 61.5 –37.0 –99.0 The troubled U.S. economy is punishing automakers, suppliers and dealership groups, and their investors are sharing the pain. Plunging consumer confidence, declining vehicle sales and the sagging U.S. dollar took their toll on shareholder return during the first three months of this year, according to the Automotive News/PricewaterhouseCoopers Total Shareholder Return Index. Only three of the world’s automakers increased in value during the quarter, and one just barely. All but eight of the 34 publicly traded global suppliers lost value during the three months. And just two of the seven publicly traded U.S. auto retailers delivered a positive return. Two factors caused most of the damage, says Paul McCarthy, automotive director of the PricewaterhouseCoopers Total Shareholder Strategy group: “U.S. recession and U.S. currency.” from Porsche AG’s quest for company control. The strong euro helped boost three-year returns for VW, Fiat, Porsche and Daimler. By contrast, returns for General Motors and Ford Motor Co. shareholders fell during all three periods tracked by the survey — the past three months, past 12 months and past 36 months. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Suppliers Suppliers took the biggest hit in shareholder value during the first quarter. Japan’s Akebono Brake Industry Co. was one of the few winners. Akebono’s 17.3 percent gain followed a reported surge in profits in late 2007, an announcement of plans to expand in emerging markets and consolidation in North America. TRW Automotive Inc., which suffered a nearly 32 percent decline in value for the 12-month period that ended March 31, perked up with an 11.9 percent gain in the first quarter of 2008. The increase followed strong sales and profits in foreign markets. VW Hyundai Peugeot Toyota TSR Index Porsche Daimler AG Fiat BMW Honda Ford Suzuki Renault Nissan GM U.S. RETAIL GROUPS Total shareholder return for U.S. retail groups; percentage change per period Q1 2008 1 PAG Sonic Automotive Group 1 Auto CarMax TSR Index 5 6 7 AutoNation Asbury Lithia Motors 12.0 6.8 –0.6 –1.5 –3.2 –6.5 –7.1 –25.2 2 3 4 One year –2.6 –26.4 –39.9 –20.6 –32.4 –39.5 –49.0 –61.8 Three years 45.8 –3.9 –7.8 23.7 –8.6 –32.2 –3.9 –58.0 Retailers Automakers Volkswagen’s relatively modest U.S. presence was a benefit instead of a disadvantage. The German automaker generated a 26.1 percent shareholder return for the quarter. That was due mostly to booming sales in China, where VW now sells at an annual rate of more than 1 million vehicles. VW shareholders also continue to benefit Non-U.S. business gave Penske Automotive Group a boost in shareholder value. Penske delivered a 12 percent gain for the quarter, thanks partly to foreign dealerships. Penske reports that 38 percent of its revenues now come from 145 franchises outside the United States. Sonic Automotive’s shareholder value rose 6.8 percent, thanks to greater emphasis on service operations and used-vehicle sales. c THE BIG PICTURE About shareholder return The data on this page represent the firstquarter update of the Automotive News/PricewaterhouseCoopers Total Shareholder Return Index. The Index is calculated separately for automakers, suppliers and retailers. Total shareholder return, considered the best indicator of shareholder value, shows the change in the value of an investment in a period. Each company on the Automotive News/PricewaterhouseCoopers Total Shareholder Return Index is measured using share price movement, stock splits or buybacks and reinvestment of any cash dividends. The calculation assumes all dividends are reinvested in additional stock. The index average is weighted by market capitalization — a company’s share price multiplied by shares outstanding — so the performance of companies with larger market caps has a greater impact on the index. Total shareholder return for automotive sectors; percentage change per period Q1 2008 –6.0 –3.2 –11.2 One year –4.7 –32.4 –8.6 Three years 52.3 –8.6 32.3 Global automakers U.S. retail groups Global suppliers See our Web site for past total shareholder return stories. autonews.com *Currently operating under bankruptcy protection http://autonews.com

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Automotive News - April 21, 2008 Reorganization plan gives more muscle to 4 sales-channel execs Hummer plummets, Saturn soars in sales per franchise Chrysler-Nissan: Loads of partnership potential LIFESTYLE PICKUPS Strike averted Friday at GM transmission plant Hyundai to phase out Tiburon Veteran lobbyist looks back on decades-long mpg battle Autonews.com offers news customization GM offers free digital marketing package to dealers Lithia extends vehicle repair warranty to 3 years/50,000 miles With new products, is there life in Saturn? Ford plans $100M-plus F-150 launch Ford broadens its diesel strategy GM pitches its management system to dealers Supplier to help Mahindra offer diesel hybrid Transplants top 40% of N.A. output in March Geely chief: 'We are still an ant' Honda could import cars from China GM redirects efforts to serve emerging markets Beijing showstoppers New Challenger is appetizer for full line in 2009 Last week, I got a glimpse of the future Service contracts: Federal oversight is needed Delphi mess drags on Can't we stop importing oil? Ryan revolutionized this business An editorial glass ceiling? Driving on hydrogen — pros and cons BMW should build even more here Not what New York ordered Magna exec: More suppliers will fail Canada sales off 0.4% in March Bosch pushes crash avoidance Chrysler plans hybrid Dodge Ram Honda engineer is honored by SAE for safety efforts Panel: Diesels may hit 20% of U.S. market by 2020 Automotive News PACE Awards: Night of black ties, trophies, praise PACE Awards honor innovation Truck sales drop 31% in March Honda's new Pilot is bigger, more upscale In China, GM looks to fresh vehicles in 2009 U.S. economic woes hurt shareholder values Judge refuses to toss GMC franchise-award case Dealers Farley: Ford's marketing team is ready to roll Landry: Chrysler's consolidation will spawn service-only stores Profits up at Johnson Controls Hyundai to fix airbag problem GM to build $200 million Brazil plant Convis is CEO of Dana Holding Denso names Katoh CEO Stephen Feinberg speaks! Hogan eyes CEO spot in startup Chrysler reviving its global dreams? How I saved Delphi: A work in progress Tesla Motors' lawsuit: Designer Fisker ripped us off Concert in the key of C-3PO

Automotive News - April 21, 2008

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