Daily Edition: May. 5, 2004

May 4, 2004

Sales increase slightly, at GM and across the board

Industry-wide sales of new vehicles increased a mere 1.2 percent in April despite strong sales by several Japanese automakers. The overall pace of sales was a disappointing 16.8 million units, setting the stage for an increase in incentives.

Paul Ballew, general director of market analysis at GM — where sales increased a meager 1.2 percent — noted it wasn't unusual for incentives to increase in late spring and summer as manufacturers clear out older models ahead of the new model year. Nonetheless, GM expects sales to accelerate over the next few months as the economic recovery gains momentum, Ballew said.

"We see nothing that prompts us to revisit our expectations," said Ballew, who said GM still expects industry sales to top 17 million units this year. Sales through the first four months of 2004 are up 3.6 percent or about 200,000 units, he noted.

Meanwhile, Ford Motor Co. and Honda reported a drop in sales during April and DaimlerChrysler, Hyundai, and Volkswagen reported only small or negligible increases in sales. Nissan, Toyota, and BMW reported double-digit increases in sales; sales improved for Mitsubishi, Mazda, Suzuki, and Subaru.

Gary Dilts, Chrysler Group vice president of sales, said, "It's not a bad month, but it's not up to the optimistic levels we had seen." Dilts said Chrysler's sales increased one percent last month. The Mercedes-Benz Group's sales increased 2.6 percent. Two Japanese carmakers outpaced sales in April, with Nissan posting a 14-percent increase in sales and Toyota reporting a 10-percent increase in sales.

"The industry is benefiting from a healthy first-quarter economy," said Jim Press, TMS executive vice president and COO. "Despite rising fuel prices, economic indicators, such as gross domestic product, employment and consumer spending were all up, giving a boost to April automotive sales." The Toyota Division recorded its best-ever April sales of 143,574 vehicles. The Lexus Division also reported best-ever April sales of 23,555 units, up 10.7 percent, Press said.

Honda, though, reported its sales dropped four percent, and Ford also reported a four-percent drop in sales. "April wasn't up to par for us," said George Pipas, Ford sales analyst, who emphasized that a one-month drop in sales wasn't a cause for alarm. "The mix isn't as favorable as it was, but one month's sales results aren't going to knock the gyroscope off the table." Pipas also told analysts during the conference call that it is way too early to assume that rising fuel prices, which are hovering near $2 per gallon, are undermining sales of big sport-utility vehicles. Sales of the Ford Expedition, Lincoln Navigator, and Ford Excursion all dropped in April. Expedition sales dropped 33 percent, Navigator sales declined 25 percent and Excursion sales dropped 16 percent. Sales of all three vehicles had been exceptionally strong a year ago and all three came under significant competitive pressure during April, Pipas said.

Dilts and Ballew also said they saw no signs that fuel prices were beginning to hurt sales of big vehicles and engines. Pipas said Ford's inventory levels also are manageable. The company's inventory of unsold vehicles increased during April to nearly 1 million units. Analysts expressed some concern the inventories might be too high. "The inventories will decline," Pipas said. "One plant is down already and another plant will go down. We are able to manage our way through."

Meanwhile, Volkswagen, which had been in the midst of a sales slump for the last several months, reported that its sales increased slightly in April. The increase coincided with Volkswagen of America's decision to boost incentives. Overall, Audi sales were 7,137, down slightly from April 2003 sales of 7,209. — Joe Szczesny

Infineon Daily Edition

Zetsche disappointed at Bernhard's ouster

Chrysler Group CEO Dieter Zetsche — one of the outspoken critics of the DaimlerChrysler plan to bail out Mitsubishi last week, a bailout that was averted — isn't happy to see his friend Wolfgang Bernhard ousted from the corporation. Bernhard was blocked from acceeding to the spot to which he was named earlier this year — head of Mercedes-Benz. "The people at Chrysler and I are disappointed about this development," Zetsche told Reuters. "He's a very good friend of mine." Bernhard's ouster came after DaimlerChrysler's board refused to invest any more money in Mitsubishi, and speculation diverges over whether DaimlerChrysler chairman Juergen Schrempp or current Mercedes head Juergen Hubbert played the spoiler for Bernhard's career at the company.

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

Ernst & Young Daily Edition STD

Former Ford Europe boss steps in at Maserati

2005 Maserati Quattroporte

2005 Maserati Quattroporte

Martin Leach, the former head of Ford's European operations, is to become CEO of Maserati. In January, Leach had a judge overturn a non-compete clause in his Ford contract that Dearborn was holding him to. The judge ruled that the clause was unenforceable because Leach had been dismissed rather than resigning.

When Leach left Ford, he was in line to take over as head of Fiat Auto, but the non-compete clause, which prevented him working for another car manufacturer for two years, meant Fiat, which needed someone to step into the job immediately, was not able to employ him.

Leach took Ford to court, alleging the company wrongly announced he had resigned in August 2003 while he claimed he was constructively dismissed. Ford then prevented him from working for a competitor. Although the clause has been thrown out, Leach is thought to be still pursuing legal action against Ford for damages and loss of earnings.

The Italian company obviously still holds him in high regard, hence his new position in charge of the brand that has grown steadily since it came under the control of Ferrari and its President and CEO, Luca di Montezemolo.

Di Montezemolo will continue to head the Ferrari-Maserati Group as its President and CEO, but in another change at the executive level of Fiat's super-luxury brands, Jean Todt takes on the role of Ferrari Managing Director while maintaining his present responsibilities within the Gestione Sportiva racing operation.

Todt has made his name as the brains behind the resurgence of the Ferrari Formula 1 team, which he joined ten years ago. Born in Paris, he started in motorsport as a rally co-driver. After achieving success at the professional level of the sport he turned to team management with Peugeot. He oversaw its success at Le Mans in the early 1990s before joining Ferrari's F1 team, where he is credited with providing an organization worthy of the talents of six-time world champion driver Michael Schumacher.

Amedeo Felisa assumes the responsibilities of Ferrari Deputy Managing Director under Todt, while Antonello Perricone leaves Maserati to take on other responsibilities within the Fiat Group. — Ian Norris

Maserati Facing Moment of Truth by TCC Team (3/8/2004)
Italian automaker's success — or failure — also will impact Ferrari's future.

Spy shots: '06 Benz B-Class

2006 Mercedes-Benz B-Class

2006 Mercedes-Benz B-Class

Codenamed CST245, this crossover derivative of the upcoming A-Class will arrive in the States during the 2005 calendar year. Combining the styling of a small sport wagon and the upcoming R-Class (also referred to as the GST), the newest crossover from Mercedes will be offered with five engine options, as well as three roof styles.

Spy Shots: '06 Mercedes B-Class by Brenda Priddy (5/3/2004)
Crossover plans get smaller at Benz.

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Teams of young engineers will put their skills to the test in the 14th annual model car competition, Saturday, May 8, sponsored by Argonne National Laboratory, the U.S. Department of Energy, CNH, and the Society of Automotive Engineers. The competition for middle school students will take place at CNH, 7S600 County Line Road, Burr Ridge, beginning at 9 a.m. with team and vehicle registration. Vehicle inspection and design judging will follow, and the race portion of the contest will begin at 11 a.m. There will be two classes for the competition — a hydrogen fuel cell car and a solar car. Vehicles will race only within their own class.

Lear Daily Edition

Name Symbol Last Change
Autobytel, Inc. ABTL 10.29 +0.17 (+1.68%)
Autoliv Inc. ALV 42.22 +0.10 (+0.24%)
AutoNation Inc. AN 17.03 +0.01 (+0.06%)
ArvinMeritor Inc. ARM 20.76 +0.09 (+0.44%)
American Axle & Mfr. Holdings Inc. AXL 38.80 +0.46 (+1.20%)
Ballard Power Systems Inc. BLDP 10.72 +0.15 (+1.42%)
BorgWarner Inc. BWA 82.95 +0.15 (+0.18%)
Collins & Aikman Corporation CKC 5.88 -0.27 (-4.39%)
Cummins Inc. CMI 61.33 +0.14 (+0.23%)
Dana Corporation DCN 21.00 +0.69 (+3.40%)
DaimlerChrysler AG (ADR) DCX 45.67 +0.56 (+1.24%)
Delphi Corporation DPH 10.26 -0.19 (-1.82%)
Dura Automotive Systems DRRA 12.57 +0.08 (+0.64%)
Eaton Corporation ETN 61.16 +0.66 (+1.09%)
Ford Motor Company F 15.41 +0.14 (+0.92%)
General Motors Corporation GM 47.94 -0.35 (-0.72%)
Gentex Corporation GNTX 39.65 -0.10 (-0.25%)
Goodyear Tire & Rubber GT 8.61 -0.07 (-0.81%)
Honda Motor Co. Ltd. (ADR) HMC 20.09 +0.32 (+1.62%)
Johnson Controls Inc. JCI 55.17 -0.26 (-0.47%)
Lear Corporation LEA 60.55 -0.07 (-0.12%)
Magna International Inc. MGA 78.96 +0.36 (+0.46%)
Motorola Inc. MOT 18.65 +0.43 (+2.36%)
Nissan Motor Co. Ltd. (ADR) NSANY 22.11 +0.08 (+0.36%)
Sonic Automotive Inc. SAH 24.79 -0.09 (-0.36%)
Sirius Satellite Radio SIRI 3.43 unch (unch)
Toyota Motor Corporation (ADR) TM 73.77 +1.29 (+1.78%)
Tower Automotive Inc. TWR 4.96 -0.31 (-5.88%)
United Auto Group Inc. UAG 30.78 +0.01 (+0.03%)
Visteon Corporation VC 10.80 +0.04 (+0.37%)
XM Satellite Radio Hold. XMSR 25.39 +0.07 (+0.28%)

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