Porsche unveils 911 Turbo S
WEEKLY CAR GUIDE: May 14, 2004 by TCC Team (5/17/2004)
New Escape Hybrid, new Porsche 911, and tips on run-flats.
Saab leaving the ATL for Motown
Saab Cars USA is moving its
It is not a surprising move. The move enables GM to trim Saab's headcount from its current 80. And it makes it easier for Saab's operations and product development to integrate with GM.
"We save significantly on facility costs. We save significantly on structural costs, because we cut down on redundancies. It will give us the full ability to tap into more opportunities with GM North America," said a Saab representative.
Saab has posted an annual profit only twice since GM acquired a stake in 1990, and is in the midst of an aggressive product expansion in the United States, where it has only offered two models, the 9-3 sedan and bigger 9-5. Saab is launching the 9-2x, a small and sprite sport sedan built off the Subaru WRX, later this year and the 9-7 SUV, built off the Chevy Trailblazer, next year. GM owns a stake in Subaru parent Fuji Heavy Industries and is trying to share vehicle architectures across alliance partners and GM-owned brands.
Through April, Saab's
2005 Saab 9-2X by Marty Padgett (5/10/2004)
Saab gambles part of its future on a very strong hand.
Nissan has already announced it will introduce a gas-electric hybrid Altima in 2006, and company officials say more will be announced next month when Nissan hosts a product forum in
Sachs: rates will hurt sales or profits - or both
Goldman Sachs auto analyst Gary Lapidus said Thursday that a hike in interest rates would cool auto sales by 600,000 units on an annualized basis, and that automakers would have to raise discounts and lower prices to give consumers an additional $1100 per vehicle to keep the status quo.
Automakers are carrying nearly a 100-day supply of unsold vehicles heading into the summer sell-down. Lapidus says automakers would be better off cutting production than cutting pricing further when rates climb as they are expected to do. Much of Wall Street expects the Federal Reserve to increase short-term rates by 50 basis points or more before the year is out.
Low rates, the Bush tax cuts, and consumers opting for longer and longer loan terms, noted Lapidus, have driven demand and the average price of a vehicle as consumers opt for more gadgets and features and luxury cars - as long as they can have seven years to pay off the loan. It's worth noting that profits have not been rich at GM, Ford, or Chrysler during this period of low rates and high sales volume.
Lapidus said automakers are unlikely to cut production to offset falling demand because of their "prisoner's dilemma," or the fact that the Big Three have too much manufacturing capacity and must pay UAW workers whether they work the lines or not.
Lapidus advised clients Thursday to stay away from auto stocks in an environment of rising interest rates.
Ford, for example, impressed Wall Street in the first quarter by earning 96 cents a share, double what was expected But its guidance for the whole year is only $1.50-$1.60 per share because of the need, the automaker believes, to hike consumer incentives the rest of the year to keep the metal moving off dealer lots.
Prudential joined the auto bears, downgrading the auto parts sector to "unfavorable" from "neutral" citing a pending ascent in the Federal Funds rate. Prudential said "investors perceive that rising interest rates will choke off the demand for vehicles, which will have a negative impact on earnings for the automakers and suppliers." -Jim Burt
Detroit agencies tightening belts
BBDO Detroit is laying off 100 employees in a belt-tightening move. The agency handles all of Chrysler's national and dealer advertising. The automaker has been exacting cost cutting from all its suppliers and its ad agencies are no exception. BBDO is a unit of Omnicom.
Cuts could also be following at GM ad agency Chemistri, say sources. Chemistri CEO Pat Sherwood recently announced he is leaving. And top creative executive Gary Topolewski left for BBDO to work on Chrysler's business. Chemistri's clients include Cadillac,
DAILY IN DEPTH
PEMEX starts cleaning up its act
PEMEX, that is, Petróleos Mexicanos, is the Mexican government owned and operated Petroleum Company and traditionally has been considered unresponsive to ecological concerns.
However, the high levels of pollution in México have forced this petroleum company to start cleaning up its act.
With a population of 21 million people - and a heavy dependence on cars -
A few years ago, the México City government set up a program for older vehicles named "Hoy no circula" (Not driven today) in which according to the last digit on the license plate, such vehicles are required to stay parked for a day a week.
This program has helped somewhat to reduce the air pollution and has caused the automotive manufacturers to improve anti-pollution measures on newer vehicles, which by the way, comply with more stringent emissions standards and therefore are granted the permission to be driven everyday of the week.
Even though this measure has helped to reduce pollution, it has proved insufficient to solve the problem.
PEMEX announced a sulfur content level reduction in its Premium gasoline, which has an octane rating of 92.
The sulfur reduction on the PEMEX fuels will be an ongoing effort that will conclude in 2009. The new PEMEX fuels have the target of complying with the American Tier II standard.
This would also pave the way for the arrival of PZEV (Partial Zero Emission Vehicles) rated cars like the new Ford Focus and Dodge Stratus as well as direct-fuel-injection vehicles into the Mexican market
Previously, the sulfur content level of the Premium gasoline was of 500 parts per million (ppm). The new gasoline has a sulfur level of 300 ppm, and by the end of the year PEMEX has the target of lowering the sulfur level to 250 ppm. By 2009 PEMEX has the goal of achieving a sulfur content level between 50 and 30 ppm.
PEMEX also intends to lower the sulfur content in its diesel fuel from 500 ppm currently to 15 ppm by year 2009.
The new gasoline formula will yield a 40-percent reduction in the emission levels of sulfur dioxide, which according to PEMEX would represent 200 tons of sulfur every year.
In a four-year period, in order to achieve the sulfur reduction of its fuels, PEMEX will invest a total of $1.9 billion. -Francisco Pérez
Toyota Workers Rebuff UAW in
The United Auto Workers union has sustained a crushing rebuff in its latest bid to organize transplant assembly plants in the
The UAW's organizing vice-president, Bob King, had envisioned a
A former UAW president, Douglas Fraser, now a labor studies professor at
Family Spat: Kia Spurns Hyundai Plant
Hyundai and Kia sound more like the "odd couple" than a devoted father and son. Kia Motors America's president and CEO, Peter M. Butterfield, has declared in an interview (Ward's Automotive Reports, May 17) that Kia will refuse to use Hyundai's new plant in Montgomery, Ala., for a shared model unless it is a pickup truck.
For its part, Hyundai has balked at taking an edition of the popular Kia Sedona minivan, sounding a bit irked at Kia's aloofness towards
Dealers for both South Korean automakers applaud their strategies to have full model lineups as soon as possible, avoiding the niche limitations that have hampered such GM subsidiaries as Saab and Saturn. But emergence of hard feelings between the pair has been unusual for automakers with blood ties. Similarly, DaimlerChrysler has finally agreed to share Mercedes powertrains with Chrysler Group for the Crossfire,
"I've been pretty outspoken that it's the product we're asking for," says Kia's Butterfield, referring to a request for a pickup. Not wanted: editions of Montgomery-built Santa Fe SUVs or Sonata mid-size sedans. Rather, Kia prefers a body-on-frame truck, although as Ward's points out in a sidebar, Kia is reviving the Sportage compact SUV in the
Hyundai and Kia are stretching their lineups in speedy fashion from minicompacts Accent and
FROM THE SOURCE headlines from the latest press releases
When the nation turns it attention to
|American Axle & Mfr. Holdings Inc.||AXL||33.30|
|Ballard Power Systems Inc.||BLDP||9.05|
|Collins & Aikman Corporation||CKC||5.00|
|DaimlerChrysler AG (ADR)||DCX||41.52|
|Dura Automotive Systems||DRRA||9.66|
|Ford Motor Company||F||14.18|
|General Motors Corporation||GM||43.46|
|Goodyear Tire & Rubber||GT||8.26|
|Honda Motor Co. Ltd. (ADR)||HMC||20.50|
|Johnson Controls Inc.||JCI||52.07|
|Magna International Inc.||MGA||76.01|
|Nissan Motor Co. Ltd. (ADR)||NSANY||19.99|
|Sonic Automotive Inc.||SAH||21.18|
|Sirius Satellite Radio||SIRI||3.10|
|Toyota Motor Corporation (ADR)||TM||68.57|
|TRW Automotive Holdings||TRW||17.91|
|Tower Automotive Inc.||TWR||3.64|
|United Auto Group Inc.||UAG||28.00|
|XM Satellite Radio Hold.||XMSR||23.13|