Saturday, 3 May 2014
Fiat-Chrysler CEO Sergio Marchionne faces a tough task in turning around the automaker's operations in Europe, analysts say, after losing 2.15 billion euros in the region in the past three years.
Marchionne's revival plan for Fiat’s struggling European business, which includes the Fiat, Alfa and Lancia brands, will be part of his wider unveiling of a new strategy for all of Fiat Chrysler on May 6. The CEO aims to exploit the synergies of the fully combined auto group.
His plan is expected to include as much as 9 billion euros in investment on long-delayed model for Fiat and Alfa that are crucial to stemming European losses by 2016.
For the turn around to succeed, Marchionne needs to stop Alfa's chronic losses and improve capacity utilization at Fiat's underused Italian factories, analysts say.
"His main challenge to cut losses in Europe is to improve plant capacity utilization, and establishing credibility in terms of timing and viability of the Alfa Romeo pipeline," said Stuart Pearson at Exane BNP Paribas.
Fiat plans to make its stalled Italian plants profitable by: building more Maserati and Alfa Romeo models for export and adding output of Jeeps in the country.
Company executives also have hinted that the automaker will trim Fiat brand’s model range to focus on the strong-selling 500 and Panda minicars.
Unlike rivals Ford, PSA/Peugeot-Citroen and Opel, Fiat wants to avoid closing factories in Europe.
Fiat’s giant Mirafiori factory in its hometown of Turin once churned out almost 600,000 cars each year. Now it’s Europe’s least-used plant, according to figures from research group Inovev. Like other mass-market European carmakers, Fiat offsets its shrinking car sales in recession-plagued Europe with revenue from the healthy U.S. and Asian markets.
But unlike other volume carmakers, Marchionne has decided to cut back on investing in its core Fiat brand in order to conserve cash, starving dealers of product and shrinking European market share to 6.2 percent in 2013 from 9.3 percent in 2009.
The so-called “managed decline” of the Fiat brand’s European footprint is the right thing to do, analysts say. Fiat Group is also paring back its storied Lancia brand, reducing it to an Italy-only offering with just one model: the Ypsilon.
“On paper, that’s the right strategy,” said an analyst who asked not to be named because his bank works for Fiat. “The question for us is execution.”
Marchionne’s record is mixed on that front. Fiat Chrysler stumbled badly when it re-badged Lancia models as Chryslers in Europe.
The re-badged Chrysler 300 sold only 2,229 cars as the Lancia Thema in Europe last year, compared to an annual target of 10,000 to 12,000 units. The Chrysler Town & Country in its Lancia Voyager incarnation managed just 3,436 sales in Europe last year, down from 5,025 in 2012 and well below a target of 15,000. And then there’s the Lancia Flavia: this re-badged Chrysler 200 managed just 462 sales in 2013, down from 534 in 2012, according to figures from JATO Dynamics.
On the other hand, Marchionne’s relaunch of the group’s luxury Maserati brand is showing good results so far. Maserati is getting 3,500 orders a month, Harald Wester, who runs the brand, said in an interview with Bloomberg at the Geneva auto show in March. That would amount to sales of 42,000 cars this year, tripling the 15,400 sold in 2013.
Maserati could add a sleek new sports car to its lineup, the Alfieri coupe, within two years, shortly after the brand launches the Levante SUV in 2015, Automotive News Europe reported in March. The Alfieri would be a rival to the Porsche 911 Turbo and the Jaguar F-Type. Maserati’s recent success is expected to be a blueprint for what Fiat plans for Alfa.
'Feeling the heat'
Dealers, unsurprisingly, disagree with analysts that the Fiat brand should shrink. Milan dealer Gruppo Fassina has been able to make up for lost revenue from the Fiat brand model drought by selling other brands like Skoda and Hyundai, said owner Toni Fassina. But he says he can’t keep doing that forever.
“I really hope Marchionne announces some new Fiat models – we’re feeling the heat from their competitors on all sides now in terms of both pricing and technology,” he said. “I started my career with Fiat in the 1980s, and want to keep going with them.”
Fewer Fiat models simply means lower volumes and lower sales, said Piero Mocarelli of Mocauto, another big Milan dealership. The aging Punto subcompact – which seems to be being quietly euthanized – is still important for sales, he said.
“They are missing a car between the B- and C-segments,” he said. “But we’re looking forward to a few good years in front of us with Alfa and Jeep,” Mocarelli said.
Marchionne plans for Alfa also will be revealed on May 6. It will be the CEO’s fourth attempt to breathe life into the beloved brand. Fiat plans to develop a new line of rear-wheel-drive sedans and SUVs to bolster Alfa and take on premium carmakers such as BMW. The models will start to hit the market in 2016. High-end versions of the cars will be equipped with engines developed by Ferrari, Automotive News Europe has reported.
Analysts say they expect Marchionne to reveal some of the new Alfa models at the May 6 presentation in Auburn Hills, Michigan, to convince skeptics of the viability of the plan. They are also looking for details on how Marchionne will pay for all the changes.
“I am more interested in understanding how he will fund this thing, because I am still not quite clear what is going on in that sense,” said UBS’s Philippe Houchois, echoing a common sentiment.
After completing in January the acquisition of Chrysler Group, Fiat’s net industrial debt should have reached or surpassed 10 billion euros from 6.65 billion euros at the end of last year, analysts estimate.
“The question mark is how viable is the strategy of using Italy as a premium car manufacturing base in the longer term,” said Pearson of Exane BNP-Paribas. “After all, BMW builds cars in the U.S. and China. So their competitors are building locally.”
PSA/Peugeot-Citroen expects sales of its Peugeot brand in China to rise at more than twice the rate of the market this year, helped by models such as the 3008, 301 and 408. Because of the growth, PSA expects China to pass France as the Peugeot brand's largest single market in 2014.
Peugeot China Deputy General Manager Mathieu Vennin forecasts that Peugeot brand's local sales will increase 30 percent to 370,000 this year in a market that is predicted to rise about 13 percent. Last year 275,000 Peugeots were sold in China, 14,600 fewer than the 289,600 sold in France.
Vennin said Peugeot vehicles such as the 3008 SUV enjoy a strong reputation in China. The 3008 is selling well because Chinese buyers are “hungry for any size or form of SUV,” Vennin said in an interview at the auto show here on April 20.
Peugeot aims to sell 70,000 units of the 3008 in China this year despite capacity constraints. It sold 16,500 units of the 3008 in the first quarter. The 3008 is Peugeot's No. 3-selling model in China.
At No. 2 is the 308 compact sedan. Peugeot sold 20,000 308s in the first quarter with the full-year volume expected to reach 80,000.
Peugeot expects the 301 to be its best-seller in China this year after the automaker started local production of the model in November. A key advantage the 301 has is its price. The 301, which was developed by PSA for emerging markets, starts at 80,000 yuan (about 9,250 euros) compared with a base price of 92,000 yuan for the larger and more refined 308.
Peugeot expects to sell 90,000 units of the 301 in China this year after first-quarter sales were 17,900.
Later this year Peugeot will begin China production of the 408, its new local flagship. The 408 is a long-wheelbase sedan version of the 308 compact hatchback sold in Europe. Peugeot does not plan to sell the 408 in Europe.
PSA, together with joint venture partner Dongfeng Motor, plans to triple annual China sales to 1.5 million vehicles in 2020. Last year the partners sold 550,000 units – 270,000 Peugeots and 280,000 Citroens - and this year they aim to sell 650,000 vehicles. Last month, Dongfeng agreed to invest 800 million euros for a 14 percent stake in PSA to ease the French carmaker's financial troubles.
The UK is the only European market that will get a "greener" Porsche Macan SUV with a four-cylinder engine due to demand for the version from China.
Porsche unveiled the Macan with a 2.0-liter, four-cylinder gasoline engine at the Beijing auto show on April 20. The variant is expected to outsell V-6 versions in China because the smaller engine attracts a fuel consumption tax of 12 percent compared with 25 percent for the 3.0-liter V6.
The model is Porsche's first four-cylinder car in almost 20 years.
Markets such as Germany and France miss out on the version because left-hand-drive production of the model is earmarked for China, Porsche said.
"Demand will be strong in China, whereas in right-hand-drive Asian markets such as Japan, there is not such an issue of availability for the engine," a Porsche spokesman told Automotive News Europe. He said the Leipzig, Germany, factory where the Macan is built is working “flat out” to meet Chinese demand.
The downsized Macan has a 2.0-liter, four-cylinder engine also offered in the VW Golf GTI. It makes 237hp and has CO2 emissions of 168 grams per km, compared with 204g/km for the V6 and costs 40,276 pounds (48,980 euros) in the UK, compared with 43,300 pounds for the lowest priced gasoline V6.
Porsche said the 2.0-liter Macan is expected to sell in “very small numbers” in the UK.
The last time Porsche sold a four-cylinder car in Europe was in 1995, when production of the front-engined 968 sports car ended. European media has reported the automaker is working on a horizontally opposed four-cylinder engine to match the layout of the six-cylinder engines in its 911, Boxster and Cayman sports cars, but the company hasn’t confirmed that. Porsche’s new Le Mans race car is powered by a four-cylinder engine arranged in a V-shape, with assistance from battery power.
Earlier this year, Porsche CEO Matthias Muller said demand for the Macan could push the brand’s annual sales past 200,000 by 2015, three years earlier than targeted. Speaking at the start of production of the model in February, he said the company was prepared to expand annual capacity of Macan line at the Leipzig factory past 50,000 if demand warranted it.
It's the exact opposite of hush-hush corporate security: Jaguar Land Rover wants to share everything it knows about assembling aluminum-bodied cars.
And that has made Jaguar Land Rover's Solihull assembly plant in England a popular destination for manufacturing executives from Audi, Mercedes-Benz, Ford and others.
Why is the company so happy to share its patented procedures? Because it hopes that doing so will save the company money in the long run.
Jaguar Land Rover would like the industry to adopt standards for raw materials and tools to assemble aluminum vehicles. These standards would cut production costs, and the changes won't happen unless the big players get involved.
Mark White, Jaguar Land Rover's chief technical specialist for aluminum, says automakers producing vehicles with aluminum -- Audi, Mercedes-Benz, Porsche, and soon Ford -- each use a slightly different manufacturing system that includes various grades of aluminum and different rivets, glue, robots and measuring systems.
For example, Jaguar Land Rover will buy 353 million rivets this year to assemble all of its aluminum-bodied vehicles. When production of Ford's aluminum F-150 begins in the fall, Ford will be buying about 2 billion rivets per year, assuming each F-150 has roughly the same number of rivets as an aluminum-bodied Range Rover.
To push the idea of standards, White does a lot of entertaining.
"Mercedes-Benz was here [four] months ago, and we are going to see their S class on a return visit," said White. "They were very impressed with what they saw. And they took a lot of things we do away. Audi was here twice so far, and we are doing some work with them. I am going to see the A8 and I have an open invitation to see the Q7."
Ford's aluminum manufacturing executives visited too, White said.
"The only way we think we can drive the cost down in aluminum production technology is to get into mass production," White says. "If you patent everything, then everyone else is either going to find another way of doing it or they are just not going to do it at all."
Ford declined to comment about sharing with competitors the aluminum manufacturing technology it has developed for the redesigned 2015 F-150 with an aluminum body. But Ford does agree in principle with Jaguar Land Rover.
"Ford believes that certain industry standards can provide great benefits in terms of cost, quality, efficiency and innovation," said Ford spokeswoman Kristina Adamski. But, she added, "Each process specification would need to be evaluated on a case-by-case basis with respect to the customer and product benefits."
Industry analyst Emmanuel Rosner, of CLSA Americas, estimates that the aluminum F-150 will cost Ford at least $750 more per unit than the steel 2014 model. Based on that number, with production of around 650,000 F-150s per year, the added material cost to use aluminum would be more than $488 million.
General Motors Co. told a bankruptcy judge that car owners should agree “voluntarily” within 10 days to suspend 59 lawsuits over ignition-switch defects pending his decision on whether all their demands are allowable.
The lawsuits were already stopped last month by federal judges in Texas and California while GM sought a ruling from U.S. Bankruptcy Judge Robert Gerber in Manhattan on whether the claims were permitted under the terms of the carmaker’s 2009 reorganization. The car owners are seeking as much as $10 billion for the lost value of their vehicles.
Some have asked Gerber for a quick decision on whether they can keep suing on grounds that he won’t consider when he assesses the scope of his court orders in the bankruptcy, which shielded GM from some legal actions.
Customers who don’t agree to the halt that GM is seeking should be required to file papers in court by May 25 explaining why the judge shouldn’t force them to, the carmaker said in a Wednesday bankruptcy court filing.
The automaker asked Gerber to put the stay proposal at the top of the agenda for a conference Friday on how the case should proceed.
Some GM customers also want permission to immediately seek enough information from the company to ground the 2.59 million cars it has recalled over the faulty ignition switches, which have been linked to 13 deaths.
General Motors Co. is recalling about 56,400 model year 2013 Cadillac SRX crossover vehicles because of possible delays in acceleration linked to a computer program that controls the transmission, U.S. regulators said today.
"In certain driving situations, there may be a three to four second lag in acceleration due to the transmission control module programming," said a report from the National Highway Traffic Safety Administration.
NHTSA said the condition can increase the chances of a crash, but GM said it was not aware of any crashes related to this issue.
GM said that 50,591 of the recalled SRX crossovers are in the United States, 3,306 in Canada, 367 in Mexico and 2,123 in other markets.
The affected vehicles have 3.6-liter engines. Consumers are asked to bring their cars to GM dealerships to have the transmission control modules reprogrammed.
The affected Cadillac SRX crossovers were produced from May 29, 2012 to June 26, 2013
Friday, 2 May 2014
MG rated third best brand in annual Driver Power survey, yeah right, better than Lexus, Mercedes and more...... mmmmm....
|1.6 petrol||Visia||5 door||2WD Man||13,420|
|dCi 110||Visia||5 door||2WD Man + Stop/Start System||15,320|
|DIG-T 115||Acenta||5 door||2WD Man + Stop/Start System||15,320|
|1.6 petrol||Acenta||5 door||2WD CVT||16,320|
|dCi 110||Acenta||5 door||2WD Man + Stop/Start System||16,715|
|DIG-T 115||Acenta Premium||5 door||2WD Man + Stop/Start System||16,470|
|DIG-T 115||Acenta Premium||5 door||2WD Man + Stop/Start System||Open-air roof||17,220|
|DIG-T 115||Acenta Premium||5 door||2WD Man + Stop/Start System||Safety Shield||16,870|
|DIG-T 115||Acenta Premium||5 door||2WD Man + Stop/Start System||Open-air roof & Safety shield||17,620|
|1.6 petrol||Acenta Premium||5 door||2WD CVT||17,470|
|1.6 petrol||Acenta Premium||5 door||2WD CVT||Open-air roof||18,220|
|1.6 petrol||Acenta Premium||5 door||2WD CVT||Safety Shield||17,870|
|1.6 petrol||Acenta Premium||5 door||2WD CVT||Open-air roof & Safety shield||18,620|
|dCi 110||Acenta Premium||5 door||2WD Man + Stop/Start System||17,865|
|dCi 110||Acenta Premium||5 door||2WD Man + Stop/Start System||Open-air roof||18,615|
|dCi 110||Acenta Premium||5 door||2WD Man + Stop/Start System||Safety Shield||18,265|
|dCi 110||Acenta Premium||5 door||2WD Man + Stop/Start System||Open-air roof & Safety shield||19,015|
|DIG-T 190||Acenta Premium||5 door||2WD Man + Stop/Start System||18,020|
|DIG-T 190||Acenta Premium||5 door||2WD Man + Stop/Start System||Open-air roof||18,770|
|DIG-T 190||Acenta Premium||5 door||2WD Man + Stop/Start System||Safety Shield||18,420|
|DIG-T 190||Acenta Premium||5 door||2WD Man + Stop/Start System||Open-air roof & Safety shield||19,170|
|DIG-T 190||Acenta Premium||5 door||4WD X-tronic||20,220|
|DIG-T 190||Acenta Premium||5 door||4WD X-tronic||Open-air roof||20,970|
|DIG-T 190||Acenta Premium||5 door||4WD X-tronic||Safety Shield||20,620|
|DIG-T 190||Acenta Premium||5 door||4WD X-tronic||Open-air roof & Safety shield||21,370|
|DIG-T 115||Tekna||5 door||2WD Man + Stop/Start System||17,670|
|DIG-T 115||Tekna||5 door||2WD Man + Stop/Start System||Open-air roof||18,420|
|DIG-T 115||Tekna||5 door||2WD Man + Stop/Start System||Xenons||18,170|
|DIG-T 115||Tekna||5 door||2WD Man + Stop/Start System||Open-air roof & Xenons||18,920|
|1.6 petrol||Tekna||5 door||2WD CVT||18,670|
|1.6 petrol||Tekna||5 door||2WD CVT||Open-air roof||19,420|
|1.6 petrol||Tekna||5 door||2WD CVT||Xenons||19,170|
|1.6 petrol||Tekna||5 door||2WD CVT||Open-air roof & Xenons||19,920|
|dCi 110||Tekna||5 door||2WD Man + Stop/Start System||19,065|
|dCi 110||Tekna||5 door||2WD Man + Stop/Start System||Open-air roof||19,815|
|dCi 110||Tekna||5 door||2WD Man + Stop/Start System||Xenons||19,565|
|dCi 110||Tekna||5 door||2WD Man + Stop/Start System||Open-air roof & Xenons||20,315|
|DIG-T 190||Tekna||5 door||2WD Man||19,220|
|DIG-T 190||Tekna||5 door||2WD Man||Open-air roof||19,970|
|DIG-T 190||Tekna||5 door||2WD Man||Xenons||19,720|
|DIG-T 190||Tekna||5 door||2WD Man||Open-air roof & Xenons||20,470|
|DIG-T 190||Tekna||5 door||4WD CVT||21,420|
|DIG-T 190||Tekna||5 door||4WD CVT||Open-air roof||22,170|
|DIG-T 190||Tekna||5 door||4WD CVT||Xenons||21,920|
|DIG-T 190||Tekna||5 door||4WD CVT||Open-air roof & Xenons||22,670|