Automotive News - July 7, 2008 - (Page 31) JULY 7, 2008 • 31 Auto roof rule due by Oct. 1 WASHINGTON — The Bush administration has set Oct. 1 as its deadline for adopting a new standard for vehicle roof strength, replacing a rule written in 1971. A 2005 law mandated a new rule by July 1, 2008, but allowed regulators more time. After a congressional hearing last month on a proposal from the National Highway Traffic Safety Administration, some lawmakers encouraged regulators to take more time. regulations to light trucks. The National Highway Traffic Safety Administration rejected similar petitions in 1984 and 1991. But the institute says it has new information that shows safety would improve and the usefulness of trucks would not be seriously diminished. Mitsubishi dumps 9 ad associations LOS ANGELES — Mitsubishi has eliminated nine of the brand’s 24 dealer advertising associations and will use the savings to spend more on national ads. The remaining 15 regional associations represent half the company’s U.S. sales volume, says Dan Kuhnert, executive vice president of sales and marketing at Mitsubishi Motors North America Inc. The company seeks greater exposure on network cable and broadcast network sports programming. Some dealers like that idea. Armen Avanessian, general manager of Glendale Mitsubishi in Glendale, Calif., says he saw results when Mitsubishi began advertising the Lancer during the National Basketball Association finals this spring. Of the 21 cars the dealership sold recently, 15 were Lancers, Avanessian says. Mitsubishi dealers are assessed 2 percent of the wholesale cost of a car for advertising. Mitsubishi contributes 1 percent or more to regions with ad associations. Dealers not part of an association can get the 2 percent back if they show proof that they advertise on their own. Mitsubishi also increased its cash reward program this year. Dealers now earn $600 for each car they sell, in addition to gross, up from $500 last year. —Kathy Jackson Penske Auto buys into truck unit DETROIT — Penske Automotive Group Inc. last week paid GE Capital $219 million for a 9 percent stake in Penske Truck Leasing Co. LP, formerly a joint venture between GE and Penske Corp. Ford names U.S. sales chief DETROIT — Ford Motor Co. named Ken Czubay, president of Southeast Toyota Distributors LLC, its vice president of U.S. sales and marketing last week. Czubay (SHOO’-bay), 59, also heads the world’s top-selling Lexus dealership. He had worked closely with Jim Farley, a former head of Lexus who now is Ford’s group vice president for marketing. MITSUBISHI After flicker of hope, the comeback stalls continued from Page 1 NADA seeks title-wash law WASHINGTON — The National Automobile Dealers Association says federal legislation to combat title washing still is needed, even though the insurance industry now is identifying vehicles damaged in crashes or floods. The National Insurance Crime Bureau has an online database of damaged vehicles, at www.nicb.org. But it does not include vehicles from rental or self-insured fleets, or those insured by companies that don’t belong to the bureau, NADA says. Chrysler promotes Rae DETROIT — Chrysler LLC named Nancy Rae, 52, executive vice president of human resources and communications. She had been senior vice president of human resources and communications. Chrysler also said John Franciosi, 53, senior vice president of employee relations and a veteran labor negotiator, will retire Sept. 30 after 31 years with Chrysler. Al Iacobelli, 48, vice president of human resources, who formerly reported to Franciosi, now will report to Rae. Insurers: Improve bumpers WASHINGTON — Light trucks need bumpers like ones required for cars, insurers say. The Insurance Institute for Highway Safety petitioned the government last week for a rule that would extend federal bumper stock watch Manufacturers BMW-ADR Fiat S.p.A.-ADR Ford General Motors Honda-ADR Hyundai-ADR Nissan-ADR PSA-ADR Renault-ADR Suzuki-ADR Toyota-ADR Volkswagen-ADR Closing price July 3 Closing price June 26 Weekly percent change 52-week high 52-week low $46.70 25.50 4.42 10.12 33.57 15.80 16.10 51.60 81.18 21.50 92.00 56.15 Closing price July 3 $47.85 25.50 5.07 11.43 34.22 15.80 16.39 53.10 87.67 24.50 94.50 55.45 Closing price June 26 –2.4% – –12.8 –11.5 –1.9 – –1.8 –2.8 –7.4 –12.2 –2.7 1.3 Weekly percent change $68.80 34.85 9.36 43.20 37.80 23.16 23.75 92.50 165.75 33.25 127.78 60.85 $46.40 14.15 4.36 9.96 27.01 14.25 15.74 51.50 81.00 21.50 91.21 32.70 company also has eliminated many of the dealer ad associations (see story above). Dealers have received some hopeful news: Mitsubishi Credit is expected to get back into the retail financing business, opening the door to higher-risk customers. But some distressed dealers say Mitsubishi does not have the money to pique interest in the product. And when they get people in the door, there’s too little to choose from. Both the mid-sized Galant sedan and Endeavor crossover are long in the tooth. The Endeavor went on sale in March 2003 and got a minor nose job for 2006 model year. The Galant was last redesigned for the 2004 model year. The 2009 model went on sale in February with new front and rear sheet metal and restyled headlights and taillights. Dealers complained it looked too much like the old model. And the Raider pickup, which is based on the Dodge Dakota, has been a sales disaster, with only 1,128 units sold this year. “How can you sell more with so few cars?” asks Armen Avanessian, general manager at Glendale Mitsubishi in Glendale, Calif. In June, sales were down year-overyear for all six nameplates: the Galant, Lancer, Raider, Endeavor, the small Outlander crossover and the sporty Eclipse coupe. The 2009 Mitsubishi Galant got some new sheet metal and restyled headlights and taillights. But dealers say it looks too much like its predecessors. scheduled to receive only 1,000 units in September and 1,000 in October. “We don’t have an exact number, but dealers are being told that they won’t get an unlimited amount of Lancers,” says Dan Kuhnert, executive vice president of sales and marketing at Mitsubishi Motors North America. “They won’t see dramatic declines from three to four months ago. They just can’t get what they want.” through April 2008. That compares with 29 percent for Toyota, 26 percent for Nissan and 14 percent for Mazda. “Dealers really want (Mitsubishi Credit) bad,” says Joe Mitchell, owner of Biggers Mitsubishi in Elgin, Ill. “It will take the middleman out. With the manufacturer behind it, we can move more metal.” Empty pipeline But dealers worry that there is not enough in Mitsubishi’s pipeline. They say they have been told that an electric vehicle may come to the United States, plus diesel versions of existing models, but that no other allnew vehicles definitely are in the works. The company has hinted that the Concept-cX, a compact crossover shown at the Frankfurt auto show last fall, could replace the Endeavor. Kuhnert says the United States has a strong lineup of four-cylinder vehicles. A four-cylinder Outlander was added for the 2008 model year. Currently, third-row seating is available only on the six-cylinder version. But for 2009, the third-seat model will be available with a four-cylinder. Dealers get a sporty Ralliart Lancer trim line in September and a hatchback next spring. And Kuhnert says dealers “can get all of the four-cylinder Galants they need.” The Galant is built at Mitsubishi’s plant in Normal, Ill. The four-cylinder, which gets 20 mpg in the city and 27 on the highway, makes up 85 percent of Galant sales. Price problem There’s no shortage of Galants, but first-half sales were flat compared with last year. Avanessian, of Glendale Mitsubishi, says the sedan is priced too high. “They’ve priced the Galant out of the market,” he says. “Why would you buy a Galant when you can get a Camry or Accord at a better price?” The base 2009 Galant, with an automatic transmission, is priced at $21,774 including shipping. The 2008 Honda Accord, redesigned for 2008, is $21,830 with shipping. The 2009 Toyota Camry is $20,630. But dealers say they are encouraged that Mitsubishi Motors Credit of America Inc. is expected to finance retail loans again. The captive finance company curtailed retail lending after huge losses in 2003 and 2004. Mitsubishi Credit kept its wholesale dealer floorplanning business, but in July 2005, Merrill Lynch & Co. began funding 100 percent of the captive’s retail vehicle loans, sold as Mitsubishi Credit. Mitsubishi would not comment on the return of the credit company, but dealers expect it to happen. “I would be surprised if they didn’t make an announcement by early July,” Herring says. “That would be a huge plus for the dealers. Merrill Lynch, to me, has no incentive to loan money to sell a Mitsubishi unless it makes total economic sense. But the factory always has an incentive to sell one more car.” Herring says he believes Mitsubishi Credit will accept higher-risk customers. Dealers say a healthy captive finance company can help close more deals. According to Compete Inc., a Boston consulting firm, the average retail conversion rate for customers who walk into a Mitsubishi showroom was 9.6 percent from May 2007 Retail Groups Short of Lancers 52-week high 52-week low Asbury Automotive Group $11.01 AutoNation 8.98 Group 1 Automotive 18.08 CarMax 13.15 Lithia Motors 4.71 Penske Auto Group 14.19 Sonic Automotive 11.88 $13.24 10.71 21.10 14.93 5.69 15.20 13.56 –16.8% –16.2 –14.3 –11.9 –17.2 –6.6 –12.4 $25.24 22.68 42.96 27.42 25.36 22.92 30.60 $11.01 8.98 18.08 13.15 3.51 13.57 11.88 Suppliers Biggest weekly swings from among the Automotive News top 150 suppliers to North America whose stocks are traded in the United States Closing price July 3 Closing price June 26 Weekly percent change 52-week high 52-week low Winners Navistar Intl. Engine Group Illinois Tool Works Parker Hannifin Corp. Losers Visteon Corp. ArvinMeritor Shiloh Industries Timken Co. American Axle $66.50 47. http://www.nicb.org
Table of Contents Feed for the Digital Edition of Automotive News - July 7, 2008 Automotive News - July 7, 2008 Turnaround trouble: Mitsubishi back on the skids It's a panic — but don't panic CAUGHT FLAT-FOOTED Japan's new diet plan: Slim down, ounce by ounce Amid sale rumors, Volvo has upmarket plans Reynolds sues dealer over computer upgrade Chrysler and dealers to improve Internet marketing strategies Seat strategy: Lear aims to make more profits by producing more parts Nissan: Despite a truck glut, Titan gets no more incentives American Axle cuts staff; boosts India business, CEO bonus Bosch sees N.A. red ink this year Bill Mitchell's designs blew away the past Hyundai Santa Fe to get a 4-cylinder GM Europe exec: Curbing CO2 is 'around the clock' effort Supplier input varies in Nissan's tech plans Great Wall becomes Chrysler's 2nd Chinese partner Steel prices nudge up Nano's costs Analyst: GM could tap UAW benefits fund Automakers create opportunities for Mexican molders Chrysler pitches gas savings on hybrid SUVs Researchers test capturing CO2 before it leaves the car Some execs win even when their companies lose Tata's personal touch Show me the money Obituaries Study: Dealership service shops extend their hours New Web tool promotes GM service Fiat CEO Marchionne is Industry Leader of Year Jim O'Sullivan Johan de Nysschen Sergio Marchionne Ratan Tata Dick Colliver Fritz Henderson Martin Thall Jim Farley Jack Stavana Roger Penske Walter de' Silva Mike Stanton Tim Manganello David Friedman Jim Hallett Larry Jutte Kim Kosak Ron Gettelfinger Tom Stephens Bob Lutz Tom Shoupe Jay Amestoy June caps a dismal first half Personnel Auto roof rule due by Oct. 1 Mitsubishi dumps 9 ad associations Small-car transaction prices rise in June Turbo taboo may end for BMW M's The mpg fracas: Pick your favorite fairy tale Great news? Analysts shun the Kool-Aid at Chrysler And now, from Wall Street, a short tale of terror VW tells builders: Plan for Southeast plant Dodging a bullet: Half-off deal busts dealer's Ram jam To run the train, should you be an engineer? Automotive News - July 7, 2008 Automotive News - July 7, 2008 - CAUGHT FLAT-FOOTED (Page 1) Automotive News - July 7, 2008 - CAUGHT FLAT-FOOTED (Page 2) Automotive News - July 7, 2008 - Amid sale rumors, Volvo has upmarket plans (Page 3) Automotive News - July 7, 2008 - Seat strategy: Lear aims to make more profits by producing more parts (Page 4) Automotive News - July 7, 2008 - Seat strategy: Lear aims to make more profits by producing more parts (Page 5) Automotive News - July 7, 2008 - Hyundai Santa Fe to get a 4-cylinder (Page 6) Automotive News - July 7, 2008 - Hyundai Santa Fe to get a 4-cylinder (Page 7) Automotive News - July 7, 2008 - Analyst: GM could tap UAW benefits fund (Page 8) Automotive News - July 7, 2008 - Analyst: GM could tap UAW benefits fund (Page 9) Automotive News - July 7, 2008 - Chrysler pitches gas savings on hybrid SUVs (Page 10) Automotive News - July 7, 2008 - Chrysler pitches gas savings on hybrid SUVs (Page 11) Automotive News - July 7, 2008 - Show me the money (Page 12) Automotive News - July 7, 2008 - Show me the money (Page 13) Automotive News - July 7, 2008 - Show me the money (Page 14) Automotive News - July 7, 2008 - Show me the money (Page 15) Automotive News - July 7, 2008 - Obituaries (Page 16) Automotive News - July 7, 2008 - Obituaries (Page 17) Automotive News - July 7, 2008 - Obituaries (Page 18) Automotive News - July 7, 2008 - Obituaries (Page 18A) Automotive News - July 7, 2008 - Obituaries (Page 18B) Automotive News - July 7, 2008 - Obituaries (Page 18C) Automotive News - July 7, 2008 - Obituaries (Page 18D) Automotive News - July 7, 2008 - Obituaries (Page 18E) Automotive News - July 7, 2008 - Obituaries (Page 18F) Automotive News - July 7, 2008 - Obituaries (Page 18G) Automotive News - July 7, 2008 - Obituaries (Page 18H) Automotive News - July 7, 2008 - Obituaries (Page 18I) Automotive News - July 7, 2008 - Obituaries (Page 18J) Automotive News - July 7, 2008 - Obituaries (Page 18K) Automotive News - July 7, 2008 - Obituaries (Page 18L) Automotive News - July 7, 2008 - New Web tool promotes GM service (Page 19) Automotive News - July 7, 2008 - Dick Colliver (Page 20) Automotive News - July 7, 2008 - Walter de' Silva (Page 21) Automotive News - July 7, 2008 - Larry Jutte (Page 22) Automotive News - July 7, 2008 - Jay Amestoy (Page 23) Automotive News - July 7, 2008 - Jay Amestoy (Page 24) Automotive News - July 7, 2008 - Jay Amestoy (Page 25) Automotive News - July 7, 2008 - Jay Amestoy (Page 26) Automotive News - July 7, 2008 - Jay Amestoy (Page 27) Automotive News - July 7, 2008 - Jay Amestoy (Page 28) Automotive News - July 7, 2008 - June caps a dismal first half (Page 29) Automotive News - July 7, 2008 - Personnel (Page 30) Automotive News - July 7, 2008 - Mitsubishi dumps 9 ad associations (Page 31) Automotive News - July 7, 2008 - Small-car transaction prices rise in June (Page 32) Automotive News - July 7, 2008 - Small-car transaction prices rise in June (Page 33) Automotive News - July 7, 2008 - To run the train, should you be an engineer? (Page 34) Automotive News - July 7, 2008 - To run the train, should you be an engineer? (Page 35) Automotive News - July 7, 2008 - To run the train, should you be an engineer? (Page 36)
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