Industry Report: Jan. 9, 2006

January 9, 2006

Chrysler-VW Minivan Deal A Go

Two erstwhile rivals will team up on the development of a new line of minivans. Confirming long-running rumors, Chrysler will provide Volkswagen with a version of its next-generation people carrier. "The logic is simple," VW's global brand czar, Wolfgang Bernhard, told The German automaker has wanted a competitive minivan for its U.S. product lineup, but determined it couldn't develop one on its own. "So why not got to the market leader…and do something together," he added. It helps, of course, that Bernhard was the number-two executive at DaimlerChrysler's U.S. subsidiary until two years ago. The program apparently also makes sense for Chrysler, which has watched the overall minivan market decline in recent years. As part of the deal, VW will now share in the development of the next minivan model, and absorb excess production capacity. Primary engineering will be handled by Chrysler, Bernhard explained, though Volkswagen will oversee design of what he describes as a completely unique exterior and interior. The VW version will be offered only as a long-wheelbase model, and precise sales targets are not yet being discussed. Production is set to begin late in 2007. Asked whether other joint ventures might be in the works, Bernhard hinted that "We are in constant discussions with our friends," but he said no other projects have been approved at this point.

GM Delays Financial Reports

General Motors has quietly pushed back the date for releasing its financial report for the fourth quarter. For the past few GM has released its fourth-quarter financial report during the third week in January but GM's Investor's Web site now says that the reports will be released on January 26. GM offered no explanation for the change. But the company's financial reports have drawn increased scrutiny from the Securities Exchange Commission. In addition, the delay will give GM's new chief financial officer, Fritz Henderson, some extra time to review the financial data the company will be releasing to an increasingly anxious investment community. Ford Motor Co. also has now confirmed it will release financial reports for the both the fourth quarter and the full year restructuring on Jan. 23, which is the same day the automaker will finally release its new, "Way Forward" turnaround plan, which the company has been promising to deliver since October. The new turnaround plan is the second the company has announced in the past four years in an effort to stem the company's continuing losses in its North American automotive business. -Joe Szczesny

Roger Penske: Big Three Overdealered

The U.S. Big Three are overloaded with dealers, says megadealer Roger Penske, because state franchise laws keep automakers from chuck "underperforming" stores. Racing legend and former dealer Penske, chairman and CEO of the 269-store UnitedAuto Group (UAG), said the cost of maintaining so many dealerships raises Big Three marketing costs to higher levels than foreign competitors in the U.S. "Some of the competitors come in and have fewer dealers with larger scale," Penske pointed out. "That gives them the ability to spend more money in the marketplace."

General Motors said it had 7384 U.S. stores as of December 1, 2005, compared to 4436 for Ford Motor Company; 3997 for Chrysler Group; 1422 for Toyota/Lexus/Scion; 1244 for Nissan/Infiniti; and 1274 for Honda/Acura. Penske, 68, predicted that the Big Three would rebound from its current malaise in sales and market share, adding that he expects the U.S. automakers will look to foreign markets to generate most of their future profits.

Penske - who took over a struggling UnitedAuto Group of dealerships in 1999 and has rebuilt it into the nation's second largest megadealership, trailing only AutoNation, Inc. - also owns a private group of foreign-brand dealerships in California. One of these is the nation's largest-volume store, Longo Toyota, El Monte, California. UAG is headquartered in Bloomfield Hills, Michigan. -Mac Gordon

Lincoln Goes Alphanumeric

2007 Lincoln Aviator

2007 Lincoln Aviator

2007 Lincoln AviatorWith the introduction of its new crossover vehicle at the Detroit auto show, the Lincoln brand appears ready to ditch names for some of its vehicles and join the alphanumeric likes of Cadillac and Acura. Ford says it will be changing the name of the Aviator crossover to the letters MKX, even before the vehicle is shown at the Detroit auto show next week. The MKX, based on mechanicals from the Mazda6 and sharing its platform with the new Ford Edge and Mazda CX-7 crossovers, succeeds the truck-based Aviator, which was a version of the Ford Explorer. Ford told Automotive News that it planned to keep the Zephyr nameplate for its new entry-level sedan, but a pair of full-size sedans coming to the luxury lineup are expected to wear letter names in concept and production form.

2006 Detroit Auto Show Preview (12/4/2005)
More sheetmetal than your average showroom.

Ford Concepts Bring Inflatable Belts, Beltminders

Ford's concepts for the upcoming Detroit auto show will feature a pair of new safety technologies to benefit backseat passengers. The first is an inflatable safety belt for the rear-seaters. The device is essentially a small tubular airbag that deploys along a shoulder seatbelt in an accident, using the same airbag technology as the rest of the vehicle. The inflated portion of the belt can limit head motion in an accident, and can mitigate the impact forces experienced during a crash. The second technology appearing on Ford vehicles is a seatbelt reminder for backseat passengers. The company's BeltMinder chime will emit a warning every 30 seconds for the first five minutes of a trip to remind backseat passengers to buckle up.

ASC Detroit Concepts Are "Sunvertibles"

ASC InfiniVu

ASC InfiniVu

ASC InfiniVuASC plans two concepts for the Detroit auto show next week, both with the intent of turning stock vehicles into demi-convertibles. The first concept, the Cosmos, sports a fabric top system that can be reconfigured to offer a covered cabin and an open cargo area, or opened all the way for sunny-side-up driving.

In the second concept, the TriLite, a three-paneled roof system uses Lexan panels to create a panoramic sunroof. Both systems are bi-directional. No production plans have been announced for either, which will be on display at the Detroit show, which opens to the media on Jan. 8.

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