Automotive News Europe - February 16, 2009 - 1

Automotive News Europe e Volvo’s XC60 gets clever drive system 3 16 Currency swings add to carmakers’ woes 3 14 End of an era at BMW as Chris Bangle departs 39 February 16, 2009 · Vol. 14 · No. 4 © Crain Communications GmbH. All rights reserved crain News Fiat wants to start US sales next year Fiat Group Automobiles wants to start US sales of the Fiat 500 (shown) and an entry-premium Alfa Romeo next year, a source told Automotive News Europe. The company would export “some thousand units” of each car, the source said. The Alfa, code-named the 940 project, would be a replacement for the 147. A larger sales volume is expected by mid-2011 as a result of the proposed alliance between Fiat and US automaker Chrysler. 3 See full story, Page 4 Source: 3 GM plants at risk Cash-starved automaker needs to cut costs by up to €1.6bn in Europe John Revill Automotive News Europe MUNICH General Motors could close three or more European car plants this year as the cash-starved automaker desperately seeks to align its production with collapsing car sales. “There are at least three plants seriously in question,” a person familiar with the matter told Automotive News Europe. The factories most likely at risk are Antwerp, Belgium; Ellesmere Port, England; and at least one plant in Germany, industry insiders say. GM aims to reduce its annual costs by between $1 billion and $2 billion (about ¤778 million to ¤1.6 billion) in Europe this year to help the company survive the current recession. The struggling carmaker wants to cut production by a third to adapt operations to a shrinking western European car market. Investment bankers Goldman Sachs project a 2009 sales decline to 10.7 million units from 13.5 million in 2008. The three closures would be in addition to GM’s plan to free itself from Saab’s factory in Trollhättan, Sweden. GM plans to spin off Saab into a separate company later this month. Chris Preuss, GM Europe spokesman, declined to comment on whether GM is considering plant closures. “We are working through a very difficult situation. We are speaking with labor to come up with a solution. We have nothing to announce at present,” he said. Massive unused capacity With GM sales falling by 6.5 percent to 2.04 million cars in 2008 in its European markets, which include Turkey and Russia, GM’s factories have overcapacity issues. CSM Worldwide said GM could build 2.1 million cars and vans a year in Europe. Last year, it built only 1.5 million units. Rudi Kennes, GM’s European works council vice chairman, said car assembly plant closures would be “completely unacceptable.” GM has not yet reported its financial figures for 2008, but in the third quarter its European division had a pretax loss of $1 billion. GM Europe is attempting to become financially self-sufficient because it can expect no support from its ailing US parent. On February 17, GM must submit a plan to the US Treasury Department showing it has a viable future. If it fails to do so, it will have to pay back $13.4 billion in loans, which could send its US operations into bankruptcy. Plans to reduce European production could form part of the submission. GM is cutting 10,000 white-collar jobs globally this year. Between 3,000 and 4,000 cuts will be in Europe. ANE European production falls 39% in January Automakers made fewer vehicles in January as they tried to clear inventories that built up when new-car sales slumped badly in late 2008. Production fell 39.0 percent to 1.03 million units compared with the same period last year, according to estimates from J.D. Power Automotive Forecasting. The carmakers that reduced their production the most in January were Dacia, Renault, Toyota, Volvo and Opel/Vauxhall. Dacia production was down 74.0 percent, Renault 46.5 percent, Toyota 49.3 percent and Volvo 47.4 percent. 3 See table, Page 23 And the winners are Sales of the Volkswagen Golf were supposed to suffer last year ahead of the arrival of the new sixth-generation model last autumn. But aggressive marketing of the Golf V helped VW sell 470,399 Golfs last year, making the model Europe’s top seller for the second year in a row, according to JATO Dynamics. The Golf was the only car in the top 10 to have a sales increase as the late2008 sales slump hit a number of models hard. The Golf outsold more than 40 brands in Europe last year, including VW subsidiaries Skoda (469,000) and Seat (339,137). 3 See ’08 by-model sales, Page 22 Tops in 2008 Europe’s best sellers last year; % change vs. 2007 1. VW Golf 470,399 2. Peugeot 207 413,881 3. Ford Focus 384,619 4. Opel/Vxhll Corsa 374,355 5. Renault Clio 367,211 6. Ford Fiesta 342,027 7. Opel/Vxhll Astra 338,618 8. Fiat Grande Punto286,935 9. VW Polo 284,385 10. VW Passat 264,008 Source: JATO Dynamics 5.6 -7.4 -9.1 -10.0 -13.1 -8.3 -19.4 -26.1 -5.5 -15.7 Quote “To leave your mark on a brand, you have to put your guts into it.” Jean-Pierre Ploue, PSA design director VW, Peugeot and Ford finished 1-2-3 in the race to be Europe’s top seller in 2008. The VW Golf (center) was No. 1, the Peugeot 207(right) was No. 2, the Ford Focus third. 3 See Page 7 Wobbly suppliers seek €10bn in EU loans Officials fear that European Investment Bank could not cope with volume of requests Arjen Bongard Automotive News Europe BRUSSELS Suppliers are looking for more than ¤10 billion in loans from the European Investment Bank to help them cope with a growing cash shortage. Supplier executives have been discussing the establishment by the EIB of a new lending vehicle that will specifically aid small and mid-sized suppliers. The EIB is an independent bank owned and operated by the EU. It lends money in support of EU policy objectives. Lars Holmqvist, CEO of CLEPA, the European suppliers association, said suppliers urgently need help as orders have dried up and payments from automaker clients have been delayed. Suppliers also are hurting because banks are raising rates on loans, or cutting back on lending completely. come from compofunds can be distributed nents makers. where required. Carlos Ghosn, ReCarmakers have already nault and Nissan applied for more than ¤6 bilCEO, said these suplion in EIB loans. pliers are already “in a Ghosn, who holds the rocritical situation.” tating presidency of ACEA, The EIB has the the European automakers funds to provide loans association, said in a speech to the automotive suplast week that funds needed plier sector. But offithis year alone could apcials caution that it Renault CEO Ghosn: proach ¤15 billion. doesn’t have the infra- It’s a critical time for EIB officials say the talks structure in place to suppliers. with CLEPA about a special deal with requests that facility for suppliers are in are likely to come from thousands of the early stages. The supplier assocismall companies across Europe. ation has made a proposal, but an Arrangements will have to be made EIB official said, “Quite a lot of work with intermediaries and partner still needs to be done to structure ANE banks in each country to make sure such a vehicle.” Industry in crisis For the latest news on the uncertainty facing the automotive industry, log on to Also, coming this month: February 17 GM and Chrysler present viability plans to the US Treasury Register for ANE’s daily newsletter and news alerts Crisis within weeks Without assistance, he said, onethird of all European partsmakers could face a crisis within weeks. The health of the supply chain is crucial because 75 percent of the parts in an average European car Automotive News Europe, Postfach 1165, D-82230 Oberpfaffenhofen PVSt 64733 DPAG Entgelt bezahlt

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