Automotive News - May 12, 2008 - (Page 37)

MAY 12, 2008 • 37 No pickup for Hyundai, Kia SEOUL — Rising oil prices have scuttled plans for mid-sized Hyundai and Kia pickups in the United States. Hyundai Motor Co. CEO Kim DongJin said last week: “Because of high oil prices, the lighttruck market is declining significantly, so now is not the right time to produce a pickup” at Kia’s plant in West Point, Ga. release, Ford’s Van Dyke transmission plant in suburban Detroit will double production of the 6F35 annually. eBay Motors courts automakers DETROIT — eBay Motors says it wants to build on an agreement with General Motors by adding other automakers’ certified usedvehicle programs to its online listings. In February, eBay and GM signed a deal that will enable about 3,900 GM dealers to list certified used vehicles on eBay’s Web site. Rob Chesney, eBay Motors vice president, said eBay is talking with other automakers about similar deals but gave no details. Toyota reports record profit but sees tough times ahead Hans Greimel hgreimel@crain.com Trouble ahead After a record-setting fiscal year, Toyota predicts that profits will decline for the first time in 9 years. FY ENDED 3/2008 OUTLOOK FY ENDING 3/’09 Toyota raises some prices LOS ANGELES — Toyota Motor Sales U.S.A. Inc. has raised prices on at least 11 Toyota and Lexus models for the 2008 model year. The average increase is 0.7 percent. The Prius hybrid rose 1.8 percent to $22,160, up $400. The biggest increase was on the FJ Cruiser SUV, up 2.1 percent to $23,730. Prices include shipping. Autobytel posts $2 million loss LOS ANGELES — Internet marketing services company Autobytel Inc. reported a firstquarter net loss of $2.0 million, compared with net income of $7.7 million in the first quarter of last year. Revenue fell slightly to $20.7 million, compared with $21.9 million in the same period last year. Ford touts 6-speed transmissions DETROIT — Ford Motor Co. plans to equip nearly all its vehicles with more fuel-efficient six-speed transmissions by 2012. Ford said it will more than double the number of North American vehicles with the transmissions, which boost fuel economy 4 to 6 percent. The automaker’s newest sixspeed, the 6F35, will replace the current four-speed in the 2009 Ford Escape and Mercury Mariner crossovers. According to a press Profits up at Superior Industries LOS ANGELES — Aluminum wheel supplier Superior Industries International Inc. said it turned a slightly higher profit in the first quarter despite feeling a pinch from the American Axle strike. For the quarter ending March 31, Superior said it had net income of $3.18 million on revenue of $222.2 million, compared with net income of $2.0 million on revenue of $244.9 million during the same period a year ago. TOKYO — Toyota Motor Corp. racked up record results for the fiscal year that ended March 31, but the good news ends there. The world’s biggest and most profitable car company is warning that earnings in the current year will fall for the first time in nine years. What’s more, Toyota backed off its optimistic outlook for a 2008 sales increase in North America. A top executive now says his company’s volume is likely to decline. That would be a dramatic reversal from the year that ended March 31. Sales, operating profit and net income set records, President Katsuaki Watanabe said last week. Revenues rose 9.8 percent to ¥26.29 trillion ($230.60 billion). Operating profit rose 1.4 percent to ¥2.27 trillion ($19.91 billion). And net income advanced 4.5 percent to ¥1.72 trillion ($15.07 billion). All those results were company records. But Toyota finds itself buffeted by a triple whammy of outside forces: an unraveling U.S. market, surging raw material prices and a Japanese yen that is rising against the dollar. “The business environment surrounding us has changed very rapidly to become tougher,” Watanabe said here. Toyota says operating profit will tumble 29.5 percent to ¥1.60 trillion ($16.00 billion) in the current fiscal year. That Operating profit Net income Source: Toyota $19.91 billion $15.07 billion $16.00 billion $12.50 billion would be the first decline in operating profit in nine years. Toyota missed its North America sales goal of 2.97 million units in the fiscal year just ended, selling 2.96 million. This year, it sees a 6.4 percent drop to 2.77 million. For the 2008 calendar year, Toyota had been predicting a 1 percent sales increase to 2.64 million light vehicles in the United States, despite the deteriorating market. But that, too, is under pressure, said Senior Managing Director Takeshi Suzuki. “We are thinking it’s going to decline a little,” Suzuki said after the financial results were released. “We are now examining the sales plan and will announce the figures soon.” Toyota is struggling with record inventory levels in the United States, largely because it misjudged how bad the U.S. market downturn would be. Suzuki said the company had predicted total volume in the high 15 millions but was now working with the low 15 millions. c EXPORTS Factories get tough, dealers play defense continued from Page 1 Keep ’em here Dealers are taking steps to protect themselves from factory penalties when they sell new vehicles that turn up on the global gray market. Dealers are Charging customers steep fees if they export vehicles Requiring vehicles to be titled, registered through dealership Investigating out-of-state buyers Warning on Web sites that exporters aren’t welcome Lobbying for state laws to limit automakers’ penalties charges dealers for unauthorized exports by 20 percent, to $300 per vehicle. Dealers say other automakers are stiffening export restrictions. Jack Fitzgerald owns 13 dealerships, most of them in the Washington, D.C. area, that sell 19 brands. Fitzgerald notes that Chrysler LLC now charges an export penalty of $3,000 a vehicle. Fitzgerald says his five dealerships that sell Chrysler brands have not had to pay penalties. Mike Charapp, a lawyer in suburban Washington who represents dealers, says several clients are appealing factory charges and other penalties — some amounting to hundreds of thousands of dollars. “It’s a big problem,” he says. “With the dollar weak, there is a lot of money to be made by these brokers.” One exporter, who asked not to be named because he fears factory retribution, says he provides a legal service. “A Mercedes-Benz in China sells for four times what it costs in the U.S.,” he says. “We have people from Europe buying European cars in the U.S. Because of the value of the euro vs. the dollar, it is like getting 50 percent off.” But because of the factory restrictions, he says, he expects to export no more than seven or eight new vehicles this year, down from as many as 100 in his best years. The exporter concedes that he sometimes resorts to “subterfuge” to buy vehicles from dealers because of factory prohibitions against exports. 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 May 9 Closing price May 2 Weekly percent change 52-week high 52-week low $57.65 25.50 8.08 20.28 31.09 16.80 18.23 69.80 108.75 25.50 101.35 58.05 Closing price May 9 $56.20 25.50 8.27 23.20 33.10 16.80 18.28 71.45 105.90 25.50 104.94 58.20 Closing price May 2 2.6% – –2.3 –12.6 –6.1 – –0.3 –2.3 2.7 – –3.4 –0.3 Weekly percent change $68.80 34.85 9.70 43.20 37.80 23.16 23.75 92.50 165.75 33.25 128.33 60.60 $48.60 14.15 4.95 17.47 27.01 4.90 15.88 66.15 98.10 23.60 91.21 27.85 Retail Groups 52-week high 52-week low Asbury Automotive Group $16.03 AutoNation 16.01 Group 1 Automotive 27.41 CarMax 20.53 Lithia Motors 7.60 Penske Auto Group 20.02 Sonic Automotive 18.88 $17.33 16.57 28.11 21.31 9.07 21.43 20.18 –7.5% –3.4 –2.5 –3.7 –16.2 –6.6 –6.4 $27.71 22.86 43.23 27.42 27.58 22.92 31.88 $11.71 11.72 19.81 15.81 7.59 13.57 15.82 ers. Exporters hired straw purchasers, he says. “Some customers said they wanted to register their car in California because their mother or sister lives there,” Schumacher says. “They looked like nice people, but they were lying through their teeth.” Schumacher says he now requires out-of-state buyers to register their vehicles through his dealership. Other dealers are protecting themselves from export penalties by demanding written agreements from buyers that they won’t resell vehicles outside the United States. Dealers also are lobbying for state laws to limit the factories’ ability to punish them. Exporters typically buy vehicles from a U.S. dealer, then ship them to foreign clients or to brokers. Those foreign consumers often can import new vehicles from the United States more cheaply than they can buy them at home. “What if all of the BMW dealers in Chicago decided it was OK to export new vehicles?” he says. “The factory couldn’t do anything about it.” The American Automotive Shippers Association Inc., a group of 37 exporters, is considering a trade-restraint lawsuit against automakers over export restrictions, says association President Max Ruefenacht, an exporter in Rockaway, N.J. Self-protection Dealers are taking steps to protect themselves against sales that could lead to export penalties. Joel Weinberger, an Audi dealer in suburban Chicago, just posted a notice on the dealership’s Web site: “Persons interested in purchasing vehicles for export are kindly asked to refrain from contacting us.” Says Weinberger: “We turn them all away. We don’t want to play that game.” Other dealers demand that customers pledge in writing not to export vehicles. A Chicago Mercedes dealership owned by megadealer Fletcher Jones requires buyers to sign an agreement to pay the dealership $10,000 for each vehicle they export. Last year, a Nevada exporter sued Mercedes-Benz of Laguna Niguel in Southern California over a similar contract with a $7,500 charge per export. Aaron Jacoby, a lawyer for the dealership, says an out-of-court settlement favored his client. Meanwhile, dealers in s

Table of Contents Feed for the Digital Edition of Automotive News - May 12, 2008

Automotive News - May 12, 2008 Factories Punish Rogue Exporters U.S. Firms Sink on Supplier List Clarke: Buyers Don't Know Saturn Brand Greer Takes Top Sales Post At Automotive News Sonic Sues Mercedes-Benz Fiat Ponders Mexico Plant Ford: Wait on Kerkorian Going Green: It's No Longer An Option LaSorda Reaffirms Axle Plant Plan Chrysler: Jeep Seats From India Make Sense Toyota Exec: Maybe It's Time to Raise a Prius Hybrid Gamily Chevy Traverse, Ford Flex Face Off This Year As U.S. Waits, Chrysler Sends Cars Made in China to Mexico Nissan Plans Wide Range of Electric Vehicles Honda: Sales are Flat, But Market Share Soars Kia to Bring Small Car to U.S. Changing Models Yearly Created Object of Desire Fla. Law: Automakers Can't Force Dealer Upgrades Partnership Seeks "Premier" Stores GM Payback for Axle Bailout: Lower Prices, Innovation UAW Vote May Be Nearing a Honda's Alabama Plant Suddenly, Small Was Big in April GM's Big Problem: Too Many Brands Irvin Was Smart, Friendly, Helpful Dealers Are Tuned in to Absorption Figures Dealers Should Sell Alternative Fuels Museum Funding is Bold Watch Your Car-Truck Inventory In Tough Times Dealers Must Coddle Customers Ford's Challenge: Long-term Reliability Nissan N.A. Unit Gets New Head of Communications Maserati North America Taps Luxury-Segment Veteran Eulberg as CEO Former GM PR Chief Joins BMW Nissan: N.A. Off the Hot Seat VW Uses Free Service to Improve Sales, Image Shops Cited For Labor Violations Survey: Consumers Like Indie Shops Report Cites Trends in Repair Costs Aftermarket Center Opens at Mich. College Dealers Mich. Stores Merge Under Project Genesis VW is Europe's Top Seller Honda Exec Red-Flags Detroit 3 Aid Court: Auction Not Liable for Truck Defect Retail Personnel Canada Sales Post 3.8 Percent Gain in April Chrysler Asks Dealers to Donate to Museum Obituaries Complaint Will Delay UAW Revote at JCI Plant Supplier Deals are Smaller, Fewer GM's Truck Inventories Up Despite Strike Profits Up at Superior Industries Autobytel Post $2 MIllion Loss eBay Motors Courts Automakers Ford Touts 6-Speed Transmissions Toyota Raises Some Prices No Pickup for Hyundai, Kia April Output Drops 7.8 Percent Trustee Must Untangle the Chamco Debacle Scientists Say Chysler's Gas Plan is Just a Dodge From Cookie Sales to Auto Dough? In Europe, Small SUVs Soar; GM's Snore Daimler Seems to Be Betting On Peace in Iraq When Soccer Booms, VW Will Be Ready Molder AMP is a Case Study in Auto-Suppliers' Travail Spinoff Dismatles ArvinMeritor Ambitions GKN Driveline to Grow in China Kia Supplier Builds Ga. Plant BorgWarner Adds Turbo Capacity Supplier Personnel Supplier IAC Consolidates Operations and Know-How Mann + Hummel Sees Growth

Automotive News - May 12, 2008

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