TCC's Daily Edition: 9/5/01

September 5, 2001

AUGUST SALES: A LONG, COLD SUMMER FOR DOMESTICS
General Motors, Ford and Chrysler each took a big hit in vehicle sales during August. The Chrysler Group felt the biggest slap of all, with a 24% overall drop in sales of cars and trucks versus August 2000. The General’s 8% decline in August sales compared to a year ago can be blamed on the car side of the balance sheet--car sales were down 20 percent compared to a year ago. Ford sales slipped somewhere between 7.5% and 8.4% (depending upon whose calculations you listen to) down from last year’s record-breaking August. Ford’s Jaguar and Volvo arms helped to buoy spirits somewhat with Jag posting a modest gain versus August 2000, and Volvo putting up its best August ever.
Yoostabees: Auto Sales ‘01 by Mike Davis (9/3/2001)

 

AUGUST SALES: SOUTH KOREANS SETTING RECORDS
If you were to go looking for good news in auto sales during August, you might try looking in South Korea. Amid U.S. sales reports ranging from ho-hum to flat-out disastrous for most automakers, both Hyundai and Kia experienced their sales month ever. Hyundai can credit improved quality throughout the line, the hot-selling Santa Fe SUV, and the marketing genius of a 10-year/100,000-mile warranty for its success. For Kia’s part, the same confidence-inspiring warranty, competitive pricing and the addition of the Sedona minivan and Optima sedan to the lineup deserve recognition for the hike in sales.
2001 Hyundai Santa Fe by Marc Stengel (5/14/2001)
2002 Kia Sedona by Sue Mead (7/30/2001)

THE OTHER SIDE OF THE KOREAN COIN: DAEWOO
It isn’t all good news on the South Korean peninsula: Daewoo Motors is bankrupt. Very bankrupt. General Motors and Fiat of Italy made an offer a few months ago, but the deal’s gone nowhere since. Now GM is making a $782 million offer to buy two Daewoo factories. These talks appear to be progressing, albeit slowly. Meanwhile, back in the States, Daewoo has cut its U.S. workforce by 21%, or about 50 people.
GM-Daewoo Deal Fading by Joseph Szczesny (8/27/2001)

HONDA FIELDS A HYBRID CIVIC
In Tokyo yesterday, Honda Motor Company introduced a hybrid-power Civic sedan. The new subcompact uses a small-displacement gasoline engine and an electric motor which work together to optimize fuel economy. Honda says that the hybrid Civic should get around 68 miles per gallon of gas. It is scheduled to go on sale in Japan later this year, followed by a spring introduction into the U.S. market. No price has yet been announced.

VOLKSWAGEN TO ANNOINT PISCHETSRIEDER
The board of supervisors of Volkswagen AG, the Number One carmaker in Europe, is poised to choose a replacement for retiring chief executive officer, Ferdinand Piech. The new CEO will be former BMW chief Bernd Pischetsrieder, who has been studying under Piech since he joined VW last year. In contrast to the controversial Piech, Pischetsrieder is a more outgoing and open leader. Industry analysts are split as to whether he is the optimum choice for the job, but all agree that the pool of qualified candidates is small. Those in Pischetsrieder’s favor cite the good times that he presided over during his tenure at BMW. Those against him blame him (quite rightly) for the fiasco of BMW’s purchase of Britain’s Rover, a major money loser for the German automaker and very nearly a career-ending flop for Pischetsrieder.
VW Stalks the Upper Class by TCC Team (8/27/2001)
Publisher’s Letter for May 2000 by TCC Team (5/1/2000)

GM MAKES A DEEPER COMMITMENT TO SATELLITE RADIO
Moving technology and profit potential forward on parallel paths, General Motors Corp. says that it will offer XM Satellite radio as an option on at least 20 of its 2003-model-year vehicles. GM, which owns 12% of XM Satellite Radio Holdings Inc., is already gearing up to put satellite radio in 2002 Cadillac Seville and DeVille models later this year. The idea behind satellite radio is that by subscribing to the service, you can "personalize" your radio programming and get clear reception anywhere you’re driving. XM Satellite plans to begin beaming 71 music channels (many commercial-free) and 29 news, talk, sports, comedy and children’s channels beginning on September 12. The subscription price will be $9.95 per month.
Auto Tech Talk: Satellite Radio by TCC Team (4/23/2001)

 

DELPHI’S MOBILE MULTIMEDIA BUSINESS IS BOOMING
Delphi Automotive Systems’ Mobile MultiMedia business unit (most notable as the hardware supplier for the OnStar in-car telematics system) is on a roll. Mobile MultiMedia is now working with nine automakers, including GM, Toyota, Honda and Subaru. "Our strategy is to maintain Delphi’s position as the world’s leading provider of wireless technologies," crowed Dr. Robert Schumacher, director of Mobile MultiMedia. Schumacher said that his division would be launching 18 new products in the 2001/2002 timeframe.

VISTEON EXPANDS INTO GERMANY
Visteon Corporation has contracted to help out with the big Mercedes trucks built in Germany. The Dearborn, Michigan-based automotive supplier has contracted with DaimlerChrysler AG to build audio systems, instrument panels and cockpits for the Mercedes-Benz truck division. This deal is an expansion of work that Visteon began doing for Mercedes-Benz in March of 2000. And the company hopes to open this new market even further. "We are very pleased with the growth of our business with DaimlerChrysler. They are driven by advanced technology and first class quality," said Jeremy Goddard, Visteon's Program Director for DaimlerChrysler. "Visteon provides them with a fine portfolio of leading technologies and the ability to supply these cost-effectively and on a global scale. It's a good fit."

 

FACTOIDS:

Suppliers vs. automakers vs. consumers: Who’s squeezing whom?
Think about the supply base when you hear Alan Greenspan talk about manufacturers lack of ability to pass along price increases. Research by the Center for Automotive Research in Ann Arbor, Michigan has found that only five times in the past 16 years have price increases by the supply base exceeded price increases by the vehicle manufacturers (who have been constrained as well). The data clearly shows that the vehicle manufacturers continue to exert price leverage over the suppliers.

 

FROM THE SOURCE:

From PR Newswire Toyota has announced a new Spanish-language Website: toyota.com/espanol . . . Michelin introduces Pilot Sport A/S, an all-season high-performance tire . . . Isuzu joins OEConnection, an Internet service portal that will electronically link Isuzu retailers with their wholesale parts customers . . . Dana Corporation has sold its industrial polymer bearings businesses to Goodrich Corporation

 

THE TICKER:

Autoliv (ALV), Closed 19.80, down 0.09

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ArvinMeritor (ARM), Closed 17.89, up 0.19

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American Axle (AXL), Closed 18.40, down 0.45

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Dana (DCN), Closed 20.38, up 0.78

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DaimlerChrysler (DCX), Closed 43.08, down 0.87

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Donnelly (DON), Closed 15.60, up 0.08

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Delphi Automotive (DPH), Closed 15.03, up 0.03

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Eaton (ETN), Closed 72.94, up 1.01

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Ford (F), Closed 20.25, up 0.38

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General Motors (GM), Closed 54.60, down 0.15

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Gentex (GNTX), Closed 30.40, up 0.50

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Goodyear (GT), Closed 29.94, up 0.44

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Johnson Controls (JCI), Closed 73.91, up 0.66

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Lear (LEA), Closed 37.07, up 0.83

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Magna International (MGA), Closed 60.85, down 0.25

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Nissan (NSANY), Closed 11.20, down 0.40

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Toyota (TM), Closed 61.75, up 0.65

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TRW (TRW), Closed 36.10, up 0.90

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Visteon (VC), Closed 17.52, up 0.42

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