Daily Edition: May. 4, 2004

May 3, 2004

Sales down at Ford; up at Chrysler, Toyota, Nissan

Incomplete sales numbers for the industry released on Monday provided a mixed bag of results, with Ford down, Chrysler up, and Toyota maintaining its ongoing sales surge. While GM held its numbers until today, due to a computer error that delayed some regional sales numbers, Ford reported that its sales were off by four percent, with cars down eight percent and trucks down two percent; the F-150, however, once again increased its sales as a critical component of Ford's financial revival. DaimlerChrysler's Chrysler Group turned in slightly higher sales — up one percent — while its Mercedes-Benz unit saw sales increase by three percent. Meanwhile, Toyota-brand sales were up 10.1 percent and Nissan's were up 14 percent, but Japan's now-third-largest car company Honda watched its sales slump by 2.4 percent, with Acura's strength offset by a drop in sales of Honda-brand vehicles. BMW's numbers increased by 10.7 percent, and VW mustered a slight increase.

Infineon Daily Edition

Daimler to sell stake back to Hyundai?

A Reuters report on Monday suggests DaimlerChrysler will sell its 10.5-percent stake in Hyundai Motor Co. back to the Korean carmaker. In the wake of its refusal of new investment at Mitsubishi, DaimlerChrysler has been reevaluating its troubled relationship with Hyundai, which includes a joint-venture project for new four-cylinder engines to begin production next year. The news agency reports that a Hyundai official confirms the upcoming sale, which could net DaimlerChrysler $1 billion. In the past week, DaimlerChrysler has declined to invest more in Japanese partner Mitsubishi's turnaround plan, has declined an offer from DC chairman Juergen Schrempp to step down, and has blocked the accession of former Chrysler executive Wolfgang Bernhard to the helm at Mercedes-Benz.

DCX Spins: Schrempp In, Bernhard Out by Jim Burt (5/3/2004)
Changes rumble on through German-American company.

Ernst & Young Daily Edition STD

DC to build Benzes in China

While DaimlerChrysler's Asian strategy is faltering in terms of alliances, it's making progress in what could be the largest market for vehicles on the planet. The German company says it's received permission from the Chinese government to build Mercedes-Benz vehicles in the country, in a joint venture with Beijing Automotive Industry Holding Co. The companies will build C-Class and E-Class sedans in a new plant in the capital of Beijing. The plant will be capable of building 25,000 vehicles a year, DaimlerChrysler said. Production will start by 2006.

China's Geely Takes On the World by Michael J. Dunne (3/29/2004)
A dark horse tries to win in the nascent Chinese car industry.

GM Ups Ad Spending

General Motors Corp. is planning to continue the communications offensive that has become one of the cornerstones of the company's corporate strategy ever since the "Keep America Rolling" campaign was launched back in the autumn of 2001 as the U.S. economy recovered from the aftershocks of 9/11. Roger Adams, General Motors' director of corporate advertising, says GM will spend more on advertising this year but it also is looking for more for its money. "Innovation, integration, and diversity, that what we're all about," he said. Thus GM's new push will include spending on network television, print ads, the Internet, as well as heavy doses of event marketing and product placements in films and on television, Adams told a group of reporters over dinner recently. "This is what people see. Some of it's traditional advertising; some of it's promotion; some is movies; some of it's public relations activity," said Adams. The campaigns will include more spending in minority communities that haven't always been addressed directly be GM advertising as well as advertising and promotions with a large entertainment value, Adams said.

GM Ups Ad Spending by Joseph Szczesny (5/3/2004)
GM juices up the airwaves for the latest wave of new products.

Runyon, former Ford and Nissan exec, dies

Marvin Runyon, a former auto executive with Ford and Nissan as well as a recent head of the U.S. Post Office, has died at 79. Reuters reports that Runyon died on Monday of cancer at home in Nashville. Runyon worked at Ford's Dallas plant in 1943 and worked for the company for 37 years before retiring in 1980. He un-retired in the same year to join Nissan at its new plant in Tennessee. Runyon also worked for the Tennessee Valley Authority before being named the U.S. Postmaster General during the presidency of George H.W. Bush.

Nissan adds Cube; Mazda nixes hybrid Tribute

On the product proliferation front, Nissan has said "yes" to its mini-compact Cube as a U.S. rival to the Scion xB, but Mazda has ruled out a hybrid engine edition of its Tribute SUV, which is a sibling of the Ford Escape.

Nissan Motor CEO Carlos Ghosn announced in Tokyo (Automotive News, May 3) that the next generation Cube would be a "global" vehicle aimed at the Scion now rolling out across the U.S. Ghosn indicated at a news conference that all Nissan dealers would handle the Cube line, which would become the entry-level vehicle as the next-generation Sentra increases in size. Scions are sold separately by Toyota dealers in special showrooms. Tokyo analyst Kunihiko Shiohara expects the Cube to be assembled at Nissan's Aguascalientes Mexico plant, where Renault Clio and Nissan Sentra cars are built, starting in mid-2006.

Mazda North America senior marketing vice-president Robert T. Davis disclosed (Ward's Automotive Reports, May 3) the decision to "pass" on a Tribute hybrid. The Tribute is a twin of the Ford Escape, which will join the hybrid-engine club this summer. David said the 701 Mazda dealers in the U.S. lack facilities to service hybrid cars, meaning an expensive investment would be needed to accommodate Tributes so equipped.

"We can tap in the hybrid market at any time if demand jumps off the map and we need to get in," Davis said, "but we'd rather hold off until the technology mates better on hybrids with our 'zoom-zoom' brand image. Hybrids are not anywhere close to 'zoom-zoom.' They're whuzz whuzz." Davis said Mazda in Japan has developed a rotary hydrogen engine that it is pursuing rather aggressively. —Mac Gordon

WORLD REPORT: Brazil

Ford is celebrating 85 years in Brazil with the prediction that it's close to operating at break-even. The company's South American operations managed to achieve a symbolic $1 million profit this first quarter, reverting chronic losses. Although the Brazilian subsidiary revenues represent over 70 percent of that of the continent, its annual financial report is not country-split. The company will kick in next August the third shift at its two-year old Camaçari, state of Bahia plant, thus creating over 2000 jobs in the process, direct and indirect. It is the only make today to make full use of a facility, although in S. Bernardo, state of São Paulo excess capacity is over 55 percent….Anfavea, the association that gathers 26 brands of light and heavy vehicles and tractors, had a troubled change of hands the week before last. Inside break-ups have always happened, but for the first time ever they have turned public. GM is seeking bigger tax slash incentives for ethanol-gasoline flex-engine models, which represent 16 percent of gross sales already. Besides, the company is not happy at all with the eventual government's industrial policy. The major part of the media has showed sympathy for GM's position on alternate fuel engines… The only one out of the big four in-country auto makers that has been profiting from the Brazilian operations since 1997 has displayed balance sheet loss for the first time. Fiat's red ink in 2003 was $90 million, the consequence of a price war against GM for the passenger car and light commercial command of the market. In that segment, Fiat ended up on top by barely 7000 units. This is one more worry for the indebted mother-Company in Italy. Its subsidiary here accounts for almost 20 percent of the group's production worldwide. — Fernando Calmon

FROM THE SOURCE headlines from the latest press releases

PRNewswire

SIRIUS Satellite Radio (Nasdaq: SIRI), known for delivering the very best in commercial-free music and premium broadcast entertainment to cars and homes across the country, today announced that the Chrysler Group's all-new 2005 Chrysler 300 and Dodge Magnum will feature SIRIUS Satellite Radio as a factory-installed option, with an included one-year subscription, for $195 Manufacturer's Suggested Retail Price (MSRP).

Spring is in the air and more motorcyclists are on the road than ever, yet highway crashes continue to claim the lives of thousands. That's why the month of May has been designated Motorcycle Safety Month, and an opportune time to educate both new and seasoned riders about safe riding skills. Harley-Davidson invites riders everywhere to hone their skills through courses offered in cities nationwide.

Lear Daily Edition

Name Symbol Last Change
Autobytel, Inc. ABTL 10.12 +0.87 (+9.41%)
Autoliv Inc. ALV 42.32 -0.21 (-0.49%)
AutoNation Inc. AN 17.02 unch (unch)
ArvinMeritor Inc. ARM 20.67 -0.02 (-0.10%)
American Axle & Mfr. Holdings Inc. AXL 38.34 -0.13 (-0.34%)
Ballard Power Systems Inc. BLDP 10.57 +0.20 (+1.93%)
BorgWarner Inc. BWA 82.80 +0.86 (+1.05%)
Collins & Aikman Corporation CKC 6.15 +0.01 (+0.16%)
Cummins Inc. CMI 61.19 +1.38 (+2.31%)
Dana Corporation DCN 20.31 +0.15 (+0.74%)
DaimlerChrysler AG (ADR) DCX 45.11 +0.71 (+1.60%)
Delphi Corporation DPH 10.45 +0.25 (+2.45%)
Dura Automotive Systems DRRA 12.49 -0.20 (-1.58%)
Eaton Corporation ETN 60.50 +1.12 (+1.89%)
Ford Motor Company F 15.27 -0.09 (-0.59%)
General Motors Corporation GM 48.29 +0.87 (+1.83%)
Gentex Corporation GNTX 39.75 +0.38 (+0.97%)
Goodyear Tire & Rubber GT 8.68 -0.03 (-0.34%)
Honda Motor Co. Ltd. (ADR) HMC 19.77 -0.38 (-1.89%)
Johnson Controls Inc. JCI 55.43 +0.57 (+1.04%)
Lear Corporation LEA 60.62 unch (unch)
Magna International Inc. MGA 78.60 -0.30 (-0.38%)
Motorola Inc. MOT 18.22 -0.03 (-0.16%)
Nissan Motor Co. Ltd. (ADR) NSANY 22.03 +0.12 (+0.55%)
Sonic Automotive Inc. SAH 24.88 -0.02 (-0.08%)
Sirius Satellite Radio SIRI 3.43 +0.13 (+3.94%)
Toyota Motor Corporation (ADR) TM 72.48 -0.73 (-1.00%)
Tower Automotive Inc. TWR 5.27 +0.15 (+2.93%)
United Auto Group Inc. UAG 30.77 -0.06 (-0.19%)
Visteon Corporation VC 10.76 -0.10 (-0.92%)
XM Satellite Radio Hold. XMSR 25.32 +1.36 (+5.68%)

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