Automotive News - May 12, 2008 - (Page Cover1)

autonews.com • MAY 1 2, 2008 ve $155/YEAR ;$5/COPY Entire co nt ent s © 2008 Crain Communica tio ns Inc . All rights rese rved . Factories punish rogue exporters u. S. dealerships reap big gray-market profits Donna Harr is dharris@ crain.com Bill Kozyra's Continental jumped to No.7 among suppliers in North America. As the weak dollar continues to make U.S. goods a bargain, autom akers are crac king down on U.S. dealers who arc expo rting a growing numb er of new cars and tru cks to foreign custome rs on the gray market. In some cases, thou gh , dealers say th ey're unwitting and unwilling particip ants who have no idea the vehicles the y sell are going oversea s. Last month Mercedes-Benz warned its 344 U.S. dealers that it is raising financial penalti es and cutting allocations for dealers who sell more than 2 percent of their vehicles to exporters, sta tes a letter obtaine d by Automotive News. Th e punishm en ts app ly even if dealers did not kno w that bu yers planned to export the vehicles. Mercedes -Benz spokeswoman Tracy Dar chini said last wee k: "We are co nfide nt tha t ther e is a 'horne' here in the U.S. for every vehicle th at we are allocate d. " Post-minivan plan at Ford and Chevy Licking their wounds from minivan misadvent ures , Ford and Chevy Booming business Gray-market expo rts are a growth industry. According to the North American Auto mobile Trad e Association, 60,000 new gray- market veh icles were export ed from the United Sta tes last yea r, up 68 pe rcen t from 2006. Werne r Sch umacher, a ma jor Mercedes-Benz dealer in Phoenix, was pena lized $18,000 after his dealership sold a dozen ne w vehicles that lat er were export ed. Sch umacher, who chaired Mercedes ' de a ler co uncil last year, says he didn 't know the vehicles had gone to foreign bu ysee EXPORTS, Page 37 offer ne w 2009 cros s ove rs int rodu ct ions in one of t he few key segments showing signs of life. I PAGE 4 I Honda ~ stands still- ~ and picks up ground By trad it ional measures, Honda is having a so-so s a le s year, m argi nally ahea d of 2 0 0 7 . But in the conte xt of the industry's sales slump, it's a star performer with rising market share . I PAGE 61 Clarke: Buyers don't know Saturn brand Jamie laReau j lareau@c rain .com Auto retailing's new dynamic duo Comp uter tycoon M ich ael Dell . left, JOEWILSSENS DETROIT - Sat urn 's problem with potenti al bu yers? It's worse than a lack of cons idera tion. Buye rs are bar ely aware of Saturn . Th at mean s that Satu rn has to revam p its marketing to build awa re ne ss of the brand a nd its new veh icle lineup, sa ys Troy Clarke, pr esident of Genera l Motors Nor th America . Over th e pa st 15 months, Saturn has launched a comp lete line of vehicles including the Aura sedan, which won 2006 North American Car of the Year. Yet Saturn sales are do wn 15.4 per ce nt th rou gh April. "If you look at the purch ase funnel , you ask, 'Do we have a co nsideration prob lem on Saturn or a co nve rsion problem?' " Clarke to ld Automo tive News. "The fact of the matt er is we have a basic awar eness problem ." In GM research of coasta l mar ket s, con sumers who saw pictur es of Saturn vehicles co uld not Troy Clarke: Saturn has "a basic awareness problem. " iden tify th em , Clarke said . So Saturn 's advertising mu st sta rt over with something "a little more basic" than the cu rrent "Rethink" theme, he said. Sa turn will em phasize tradi tion al mass med ia a nd social med ia. "Just as if you 're int roducin g a new brand ," Clarke said. "We' ll prob abl y spend about the same am ount of money, but we 'll repurpose it so that it' s more focused on aware ness than co nsid e ration."m u.s. firms sink Foreigners h old 5 of top 10 spo ts in N.A. Robert Sherefkin rsherefki n@cr .com ain and vete ran auto retailer Jeffrey Rachor plan a whirlwind spending spree to acquire " premier" dealersh ips th at sell luxury and high-volume import brands . I PAGE 81 on supplier list Top 5 suppliers North America OEM sales inmillion s N.America pal1s sa les 2007 Percent cha nge 'D7vs. '(16 Nissan will ease reliance on N.A. After nine years of heavy reliance on North Ame rica , After a stormy decade of spinoffs, megamergers, acquisitions , grand expansions and occasional red -faced retreats, the pecking ord er for NorthAmerica's aut o suppliers has a d istinctly new look: Ame ricans no longer are runn ing the show. For the first time, a com pa ny based outside the Un ited States is the largest supplier of par ts to a utomakers an d othe r suppliers' North American factories. Canadian part s gian t Magna Intern ational Inc. has elbowed its way past perennial No. 1 Delphi Corp. as the largest supplier to North America, based on 2007 sales. And four othe r foreign based sup pliers have displaced U.S.-based rivals, giving foreign co m pa nies half of the top 10 spots. In 2006, foreign -based suppliers took just thr ee of th e top 10 spots. In 1997, on ly two for - 1 Ma gna $13,592 11,81 0 5.4 2 3 45 DelphiCorp. Johnson Controls Lear Corp. RobertBosch 14.8 7,58 I 5 11.6 7,19B~:6 6,460 Ie 45.1 r , fiscal Ie" fiscal estimate Source: AutomotiveNews Data Center Nissan says it' s enter ing an era in which profit s from ot her portions of the globe will play an eign- bascd comp anies made the top 10. An ana lysis of Au tomotive News' a nn ual list of th e top 150 North American ori gina l-equipment suppliers shows that th e leadi ng foreign -based suppliers ar e growing qu ickly through acquisitions, the sa me way U.S. com p anies grew dur ing th e 19905. Contine nta l AG's purch ase last year of Siem ens VDU ca tap ulted the German supp lier to No. 7, from No. 18 in 2006. Now, William Kozyra, Continental's North Amer ican CEO, mu st make th e ac see TOP 150, Page 35 increas ing role . I PAGE 161 New trustee faces abig job at Chamco A New Jersey court has named a tru st ee t o untangle t he snarl of accusations and ill will that has paralyzed Chamco Auto, which wants to import Chinese vehicles for sale in the United States . I PAGE 40 I o http://autonews.com http://autonews.com

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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