Daily Edition: Jun. 21, 2004

June 21, 2004

L.A. auto show to shift seasons

In the long-running battle between Detroit and Los Angeles, the folks out West have finally blinked. Bowing to industry pressure, the Los Angeles Auto Show is shifting to November, and will no longer go head-to-head with the bigger North American International Automobile Show, in Detroit. "The change in date is to better serve the industry," the L.A. show's general manager, Andy Fuzesi, told TheCarConnection.com. But it likely also will save the event's status as one of the big four U.S. auto shows.

The West Coast's premier auto event traditionally was scheduled to open just before Detroit's NAIAS. But that meant Los Angeles press days landed either between the Christmas/New Year's holidays, or immediately afterwards. In recent years, frustrated industry officials began cutting back on the number of product previews scheduled for L.A., which in turn led to a sharp reduction in the number of reporters who covered the show. That only benefited Detroit which, in January 2004, scored more than 70 previews and a record number of automotive journalists.

Asked why it took so long to make the switch, Fuzesi blamed local politics. The auto show was traditionally low on the totem pole for city officials, who favored events that generated more business for Los Angeles hotels. Once authorities realized the need to shift the show, Fuzesi said a suitable date had to be found that didn't conflict with yet another big motoring event, such as the Frankfurt, Tokyo, Chicago, or New York auto shows. At the same time, L.A. planners wanted to head off efforts by other, smaller U.S. auto shows hoping to topple Los Angeles as the premier West Coast event. The L.A. auto show will still be held in its old January slot for the next two years, what would have been the 2007 auto show has been moved up to November 29 through December 10, 2006.

That's not soon enough for some industry planners, who suggest that Los Angeles will continue to get a reduced list of previews until the date change. Nonetheless, most automotive insiders were quick to praise L.A. for making the move, which creates a showcase for products early in the new model-year. "We are delighted for the move of the Los Angeles Auto Show," said General Motors' PR chief, Tom Kowaleski. "All of us have long thought the more space between Los Angeles and Detroit, the better it is for all of the manufacturers involved and all of the public that attend both shows. The time span will afford everyone with opportunity to have a wider variety of vehicles at both shows." –TCC Team

Beijing Motor Show Index by TCC Team (6/21/2004)
Big news from the world's fastest-growing auto market.

Lear Daily Edition

Benz releases first A-Class shots

In 1998, the first generation of the Mercedes-Benz A-Class did not have an easy debut, after it failed the so-called 'moose test' in Scandinavia. Mercedes quickly fitted an Electronic Stability Program and, as far as we know, the problem never arose again.

The second generation of the A-Class has been unveiled, and it will undoubtedly have a better time of things, as it will be delivered with standard ESP. The new model has a 5.5-inch longer wheelbase (at 101 inches) and is 9 inches longer (at 151 inches) than its predecessor. The new A-Class has a broader stance, growing nearly 2 inches in width (to 69 inches), and though it is practically about the same height (62.5 inches), it looks better balanced.

In Europe, the A-Class will be available with six engines that according to Mercedes, deliver 38 percent more power and 46 percent more torque, whereas fuel consumption is down ten percent. The versions are: the A150 with 95 DIN hp, the A170 with 115 hp, the A200 with 136 hp and the three CDI versions: the A160 CDI, A180 CDI and A200 CDI with 82 hp, 109 hp, and 140 hp respectively. The A200 Turbo with a new turbo engine with 193 hp will be available in a later stage.

The A-Class will sport standard air conditioning and head and thorax airbags. Mercedes has patented some 200 items on safety and comfort.

The marketing campaign will be titled 'Follow your own star' with which Mercedes wants to draw attention from younger clients. For use in the campaign, pop star Christina Aguilera has recorded a new song, Hello.

In Europe, the new car will be available in September. It is not know yet when the new A-Class will be introduced on the North American market. –Henny Hemmes

Spy Shots: '06 Mercedes M-Class (6/21/2004)
Naked for all the world to see - but for Alabama to build.

Spy Shots: '06 Mercedes S-Class (6/21/2004)
Airbags by the dozen - and more.

Ernst & Young Daily Edition STD

Hybrid ToyotaMR2 possible in 2005

Toyota is likely going to add a performance-oriented hybrid in its U.S. stable of vehicles the not-too distant future, a major Department of Energy research official tells TCC.

"We've heard that Toyota's going to come out with a next-generation MR2 that will have hybrid technology in it," the official says, adding that the DOE has been urging U.S. automakers to employ a performance-oriented strategy for some time and that Toyota, once again, plans to beat its Yankee competitors to the punch.

"I think a performance hybrid is absolutely logical, makes perfect sense and I'm surprised no one has done it yet," he says. "We've been advocating that within the industry for some time now. I think it makes sense because you can successfully combine very high performance and high efficiency and you're in the type of vehicle that can bear the price premium a little better. If you're clever about it you can just have stellar, stellar performance. We all know that electric motors are really good for launch."

In addition, the official says hybrids allow automakers to downsize engine size without sacrificing power, at the same time providing needed off-the-line boost.

The next-generation MR2 is scheduled for 2005 or 2006, according to recent speculation and the natural progression of Toyota's product cycles. The current generation roadster has been on roads since 2000.

The DOE official's comments come following Toyota's admission in 2002 that it is planning a full-hybrid lineup by 2012 and the company's announcement at the 2004 Detroit Auto Show that it seriously will consider building a hybrid V-8 version of its next full-size Tundra pickup truck in years to come.

A hybrid MR2 and Tundra would likely follow the Camry into Toyota's growing hybrid lineup, which will soon include the Toyota Highlander and Lexus RX sport-utes in addition to the Prius. Toyota, selling 17,564 Prius in 2004 through May, according to Automotive News, has already outsold last year's five-month tally by more than double and is on pace to outperform its initial hybrid sales estimate for the year.

Toyota says it does not comment on specific future product plans, but reveals it is planning to expand its hybrid push in the U.S. and the expansion mostly focuses on vehicles that get better performance than is typical of traditional hybrids. –Jack Gilbert

Flint: Scion and the Youth Market by Jerry Flint (6/21/2004)
First Genesis, then the exodus.

GM reorganizes European arm

Facing intense competition. General Motors Corp. has moved to integrate different elements of its European operations into one, tightly knit organization. Bob Lutz, GM vice chairman of product development, and former interim president of GM Europe, said the changes represented an effort to use the giant automaker's resources more effectively. Earlier this week, GM officials had said the company's European operations would lose money again this year. At the start of the year, the corporate goal for GME had been to reach profitability after losing money during the previous three years. GM of Europe's losses, however, actually widened in the first quarter.

In addition, GM also is facing new competition from Ford Motor Co.'s resurgent European operations and as well as Toyota and Citroen. The new reorganization will not result in any additional plant closing or any major reduction in head count. However, several functional departments, including marketing and sales across Europe and the European design staff will be placed firmly under the control of the new organization.

GM Reorganizes European Arm (6/21/2004)
Opel, Saab and Vauxhall move closer as GM hopes to improve profits.

Mitsu troubles deepen with recalls

Saddled with the heavy expense of new recalls, plummeting sales in its home market and a battered image, Mitsubishi Motors Corp. is already rewriting a revival plan it laid out only a month ago. The revised rescue plan includes more cost cutting and reductions in executive salaries. Since announcing the first revival plan, which included $4 billion in emergency aid from banks and the larger Mitsubishi consortium, Mitsubishi Motors has been rocked by a new recall scandal that has put a huge dent in the sales. The company's reputation never completely recovered from the first scandal that erupted four years ago when it was disclosed that the company had hidden defects in its vehicles from Japanese consumers. The defect scandal has now expanded to include Mitsubishi's Fuso Truck and Bus Corp., which was spun off in 2003 to DaimlerChrysler. The new wave of recalls scandals also is raising doubts about whether Mitsubishi, the fourth-largest Japanese brand, can win back the respect of buyers around Japan who have defected to Toyota, Nissan, and Honda. "It became necessary to take into account further risks (of a fall in domestic sales)," Chief Executive Yoichiro Okazaki acknowledged during a news conference. Mitsubishi sales in Japan dropped 56 percent in May from the year before.

Mitsu Troubles Deepen with Recalls (6/21/2004)
Another revival plan due for beleaguered Japanese carmaker.

Bill Ford in command at family company

CEO Bill Ford's strategy of making more profits on lower volume has worked like a charm this year, reviving Ford Motor Company's financial results and reinforcing the 47-year-old's grasp on the automaker's reins. Analysts wonder if the approach will work over the long haul, however, as the impact of family scion Bill Ford's reign is assessed in the June 14 edition of Fortune Magazine, which reports that the chairman and CEO believes "Ford Motor Company is on a roll." Interviewed by Fortune auto editor Alex Taylor III, Bill Ford admits he took over the CEO slot two and a half years ago with grave doubts. "It was panic station every day," he recalled.

But in the aftermath of a $5.5-billion loss year, Bill Ford began a recovery plan which brought Ford back from what some analysts feared was pre-bankruptcy. Last year, Ford amassed $164 billion in sales worldwide. In the first quarter of 2004, doubling estimates given Wall Street, Ford rang up a $1.9 billion profit, trumping archrival GM's $1.3 billion profit despite continuing erosion in its market share. In implanting a strategy of rebuilding the profits line on fewer vehicles, CEO Bill Ford is moving totally away from the mass-production-and-sales approach of his family elders – and GM, Toyota and almost every other large automaker these past 100 years.

That bothers some analysts, who see Ford being outsold in cars (not trucks) by Toyota this year and market share dropping from 20.9 percent in the U.S. last year to 20.1 percent so far this year, and as low as 15.5 percent in five years. To make the strategy work, Ford has eased back in customer rebates to an average in May of $3,515 per vehicles, versus GM's $4,325. Bill Ford appears unconcerned, predicting a sales upturn when the all-new Five Hundred sedan and Freestyle SUV crossover join the revamped Mustang in dealer showrooms.

With a chief operating officer in place, manufacturing specialist Jim Padilla, Bill Ford waxes optimism about Ford's future. "I'm more sure today than I was two and a half years ago," he tells Taylor. He won't say how long he plans to stay CEO, but his efforts on behalf of the company will keep his Ford family in control of the automaker well into the future. -Mac Gordon

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Visteon Corporation (NYSE: VC) will join the Detroit Institute of Ophthalmology in hosting an "Eyes On Design" industry panel discussion on interior and exterior design. The panel will consist of design experts from the College for Creative Studies, automakers, and suppliers. The focus will be on interior design and interior fits and finishes.

Name Symbol Last Change
Autobytel, Inc. ABTL 8.77 -0.10 (-1.13%)
Autoliv Inc. ALV 42.84 +0.61 (+1.44%)
AutoNation Inc. AN 17.06 -0.04 (-0.23%)
ArvinMeritor Inc. ARM 20.16 +0.34 (+1.72%)
American Axle & Mfr. Holdings Inc. AXL 37.10 +0.60 (+1.64%)
Ballard Power Systems Inc. BLDP 9.18 +0.02 (+0.22%)
BorgWarner Inc. BWA 44.44 +0.09 (+0.20%)
Collins & Aikman Corporation CKC 5.54 +0.12 (+2.21%)
Cummins Inc. CMI 61.56 +0.36 (+0.59%)
Dana Corporation DCN 20.65 +0.27 (+1.32%)
DaimlerChrysler AG (ADR) DCX 46.16 +0.14 (+0.30%)
Delphi Corporation DPH 10.80 -0.01 (-0.09%)
Dura Automotive Systems DRRA 9.19 -0.07 (-0.76%)
Eaton Corporation ETN 61.75 +0.80 (+1.31%)
Ford Motor Company F 15.89 +0.25 (+1.60%)
General Motors Corporation GM 47.77 -0.11 (-0.23%)
Gentex Corporation GNTX 38.20 +0.20 (+0.53%)
Goodyear Tire & Rubber GT 9.44 +0.46 (+5.12%)
Honda Motor Co. Ltd. (ADR) HMC 22.69 -0.05 (-0.22%)
Johnson Controls Inc. JCI 54.77 +0.77 (+1.43%)
Lear Corporation LEA 59.88 +0.25 (+0.42%)
Magna International Inc. MGA 83.23 +1.17 (+1.43%)
Motorola Inc. MOT 18.09 -0.53 (-2.85%)
Nissan Motor Co. Ltd. (ADR) NSANY 20.65 -0.10 (-0.48%)
Sonic Automotive Inc. SAH 22.00 -0.11 (-0.50%)
Sirius Satellite Radio SIRI 3.09 -0.05 (-1.59%)
Toyota Motor Corporation (ADR) TM 78.15 -0.39 (-0.50%)
TRW Automotive Holdings TRW 18.34 -0.16 (-0.86%)
Tower Automotive Inc. TWR 3.85 -0.01 (-0.26%)
United Auto Group Inc. UAG 32.26 +0.46 (+1.45%)
Visteon Corporation VC 11.30 +0.14 (+1.25%)
XM Satellite Radio Hold. XMSR 22.90 -0.14 (-0.61%)

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