Daily Edition: Mar. 13, 2006

March 12, 2006

Kia Picks Georgia for New U.S. Factory

The long bidding war for the new Kia plant is over - and Georgia is the winner. The South Korean automaker will spend $1.2 billion to construct a new assembly plant near the Georgia-Alabama border outside West Point, Ga., about 80 miles southwest of Atlanta.

Since last year, Kia Motors, an affiliate of South Korea's top automaker Hyundai, has been looking for a site in the U.S. to set up a production line. Georgia had been a frequent loser in the bidding for new automotive plants. Just last year, DaimlerChrysler officially quashed plans to build a Sprinter plant outside Savannah. Ford had identified a site in MeriwetherCounty where the company intended to build a new plant, only to later cancel plans; then Ford later announced the closing of its Atlanta plant. Last year, Kia officials were said to have chosen a site in eastern Mississippi for the plant, but that may have been done to encourage other states to sharpen their bids.

Kia and the state of Georgia will formally announce the project today at a ceremony in West Point. The factory will be Kia's first in the U.S., and it will start producing vehicles in 2009. Kia expects to build 300,000 vehicles each year at the plant, which will employ 2500 workers and will be built on a 2200-acre parcel.

Kia is planning to boost North American sales from 350,000 units this year to 800,000 units a year by 2010.

Daily Edition: Feb. 27, 2006 by TCC Team (2/27/2006)
Geneva opens, Georgia may get Kia nod, XM and Sirius hurting.

 

Toyota

To Announce Production at Subaru Factory

Meanwhile, Toyota is expected to announce today that it will begin producing Camry sedans at the Subaru plant in Lafayette, Ind. Since Toyota absorbed the former GM interest in Subaru parent Fuji Heavy Industries, analysts have speculated that Toyota would leverage its interest in Fuji to add its products to the plant, which now builds Subaru's Outback, B9 Tribeca, and Baja models. Toyota is expected to receive about $94 million in state and local incentives to retool the plant for its vehicles. The plant originally was a joint venture between Isuzu and Subaru and had been built with a 260,000-unit capacity in mind. Isuzu sold its interest in 2003.

2007 Subaru B9 Tribeca Noses Ahead by Marty Padgett (2/9/2006)

 

Honda Wants New JapanPlant

Meanwhile, Honda Motor Co. may also be looking to expand its production footprint. The Wall Street Journal reports that the company is beginning talks that could bring the construction of Honda's first new plant in Japan in 30 years. The plant would be used to build a new range of fuel-efficient engines, the paper adds.

 

CAW Approves Camaro Changes

Members of Canadian Auto Workers Local 222 in Oshawa, Ont., have approved a series of work rule changes that could lead to General Motors announcing soon that it plans to move ahead with plans to build a new Chevrolet Camaro.

The Camaro was one of the big favorites of journalists and car buffs at  the North American International Auto Show in Detroit in January. GM's executives have promised they will decide quickly if they will turn the concept Camaro into a production car before end of the decade.

With the feasibility study still in the works, GM negotiators recently settled in for eleven days of intense negotiations with CAW representatives from the Oshawa assembly complex where GM now has three assembly plants. CAW officials have said that the negotiations are a prelude to a decision on actually building the Camaro.

CAW Approves Camaro Changes (3/12/2006)
Plant rules will enable Canadian factories to build Zetas, including Camaro.

 

Suzuki Plots Future Without GM

For Suzuki, the decision by General Motors Corp. to reduce its stake in the Japanese automaker could help it reassert its independence without doing any damage to the company's operations in North America.

Last week GM announced plans to sell off most of its stake in the Japanese automaker. GM's equity stake in Suzuki Motor Corp. drops from 20.4 percent to 3 percent. GM expects to get $2 billion and net between $550 million and $750 million from the sale, GM officials said. GM has invested about $1 billion in Suzuki since 1981, said GM spokeswoman Gina Proia.

Suzuki is a bit player in the U.S. market. And until now, GM's help in reorganizing and rebuilding its dealer network in North America complemented the help from GM's Korean Daewoo subsidiary, which produces the Forenza for Suzuki, one of its most popular models. In addition, GMAC also provides financing for Suzuki dealerships and Suzuki reciprocates by selling GM's Chevrolet models through Suzuki dealers

Going forward, the GM-Suzuki CAMI joint venture based in Ingersoll, Ont., will produce the new XL7 crossover, which is scheduled to make its debut at the next month's New York Auto Show and arrive at the company's dealerships next fall.

Suzuki Plots Future Without GM (3/12/2006)
Tiny automaker plans on big expansion abroad.

 

GM Adds to Tailgate Recall

General Motors will recall another 900,000 vehicles for problems with tailgate cables. The latest recall, the AP reports, is distinct from the one that resulted in a recall of about four million 2000-04 GM trucks and SUVs because of the different material found in tailgate cables. In both instances, the cables can corrode and break, leading to injuries. The new recall involves the 1999-2000 models of the Chevrolet Silverado and GMC Sierra full-size pickups. Some 84 injuries have been linked to the problem, but no accidents or deaths.

 

DC Ready to Move On Without Kopper

Hilmar Kopper is preparing to step down from his position as the non-executive chairman of DaimlerChrysler's supervisory board. Over the years, Kopper, a former chairman of Deutsche Bank and a close ally and staunch defender of former DaimlerChrysler chief executive Juergen Schrempp, has wielded considerable authority behind the scenes. He protected Schrempp from the wrath of shareholders and stock analysts alike. However, his influence had begun to wane even before the announcement in July of Schrempp's year-end retirement and now he's been ensnared into an investigation by German prosecutors, looking into allegations of insider trading.

Kopper's ties to Schrempp are also weighing on his chances of remaining as chairman of DaimlerChrysler. Dieter Zetsche, DaimlerChrysler's new chief executive officer, has been eager to leave the Schrempp era behind. The only question now is whether Kopper will retire after next month's annual shareholders meeting or whether he will wait and leave when his contract expires next year. The odds-on favorite to succeed Kopper as supervisory board chairman, according to the German press, is Manfred Bischoff, a former DaimlerChrysler executive who headed the company's aerospace unit Dasa and became one of the principal architects of the European space and defense group EADS. Daimler officials confirmed last week that Bischoff, 62, will be proposed for a seat on the supervisory board now held by Robert Lanigan when the company holds its annual general meeting next month. -Joe Szczesny

 

BMW Earnings Go Flat

BMW AG, considered one of the world's most successful automakers over the past decade, reported that its net profits for 2005 were flat, as adverse exchange rates and the rising costs of energy and materials such as steel undercut the company's earnings, despite record sales. It was only the second time since 1998 that BMW has not managed to improve its margin.

The German luxury automaker, which boasts one of the highest profit margins per unit in the industry, said it earned $2.67 billion last year, which was essentially same as the company's profit in 2004 and slightly better than analysts' estimates. In addition, the eight-percent decline in pre-tax profits was accounted for by the reduction of its interest in Rolls-Royce's aircraft engine business, the company said. Full-year revenue rose 5.2 percent to a record $55.6 billion, from $52.7 billion.

Helmut Panke, BMW chairman, said booming sales of its BMW, MINI, and Rolls-Royce brands, as well as unspecified cost-cutting measures, had helped it meet its own full-year targets. The changes to BMW's 3-Series were particularly helpful, he said.

While the value of the dollar has stabilized in recent months, the decline in the dollar's value in late 2004 and early 2005 hurt BMW because it exports key models such as its revamped 3-Series to the United States from Europe. The drop in the value of the dollar, however, was offset by an increase in revenue from the company's financing operations and better returns from other countries around the world where BMW operates.

Panke also said BMW expects to remain to set another record in 2006. "The BMW Group is currently the premium manufacturer with the highest sales volume in the world and is also ahead of almost all of its direct competitors in terms of profitability," Panke said. Analysts, however, noted that over the next year BMW also is facing new competition from Mercedes-Benz, which is launching several new models as part of an ambitious turnaround effort, and Lexus, which is expanding into new markets this year. -Joe Szczesny




  

WORLD REPORT

Wagoner to Visit South Korea

General Motors Chief Executive Richard Wagoner is to visit South Korea, possibly sometime next week, an industry source said.

During his low-profile visit, Wagoner is to visit GM Daewoo's Bupyong plant near Seoul to encourage workers, the source at GM Daewoo said. Other details weren't immediately available.

Although he had met with reporters during his last visit in June 2004, Wagoner doesn't have plans to meet with the press this time in Seoul, the source said. During the 2004 visit, Wagoner met with South Korean President Roh Moo-hyun.

GM Daewoo, South Korea's third-largest automaker, was established after GM and its partners Suzuki and SAIC took over most of the assets of bankrupt Daewoo Motor in the wake of the 1997-98 Asian financial crisis. -Peter Chang

 

China

's New-Car Sales Top 3 Million - 3rd Highest in the World

The China car-sales market continues to sparkle, leaping 26 percent last year and off to a projected 12-percent increase this year. 

Sales in 2005 of 3.1 million vehicles (mostly cars) vaulted China into third place among the world's nations in sales of new cars and trailing only the U.S. and Japan. As the mainland market pyramids, the numbers break all kinds of records. Nearly seven buyers out of eight are first-time owners, compared to one percent in the U.S., according to J.D. Power & Associates. Not unlike the first decade of the 1900s in the U.S., as many as 100 domestic automakers are contending for the avid Chinese new-car shoppers, as well as ten foreign-based automakers.

This year, 25 new models will be introduced to the Chinese market, adding to just as many entry-level compacts already on sale. A Business Week report (March 20) comments that "with so many first-time buyers, there's little brand awareness and almost no brand loyalty. The Chinese often spend more than a year's income for even a low-end car, and 89 percent pay in cash." 

China's market has begun to escalate, from about a million sales in 2002 and only about 300,000 in 1996. The used-car market has joined in the upward thrust of sales, amounting to more than 1.25 million units last year.

GM became the top-selling automaker in China during 2005, displacing Volkswagen. The median age of Chinese car buyers is 35, compared to 50 in the U.S., and J.D. Power says Nissan dealers have been voted number one in customer service. With 1.3 billion citizens, China's growth opportunities appear boundless for automakers everywhere.  The U.S. Society of Automotive Analysts (SAA) will examine the China phenomenon at a breakfast session in Southfield, Mich., on March 15. -Mac Gordon




 

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Toyota Motor Sales (TMS), U.S.A., Inc., announced manufacturer's suggested retail prices (MSRP) today for the 2006 Darrell Waltrip Edition Tundra. The Darrell Waltrip Edition Tundra is based on Tundra 4x2 and 4x4 SR5 V8 Double Cab grades. All Darrell Waltrip Edition Tundras will feature unique exterior and interior enhancements and will be available in two exterior colors, Spectra Blue Mica and Silver Sky Metallic. NASCAR Winston Cup fans will enjoy this Tundra's unique 18-inch TRD alloy wheels, unique mesh grille with color-keyed surround, TRD dual exhaust system, and Darrell Waltrip Signature badging and body-side graphics. Inside, passengers will appreciate the light charcoal cloth interior and Darrell Waltrip Signature floormats. Only 2000 units of this Special Edition Tundra will be built. 4x2 models will carry a base MSRP of $29,615. The 4x4 model will begin at $32,950. Darrell Waltrip Edition Tundras are currently available at Toyota dealerships.




 

Name Symbol Last Change
Autobytel, Inc. ABTL 4.10 0.00 (0.00%)
Autoliv Inc. ALV 53.97 +0.85 (+1.60%)
AutoNation Inc. AN 21.82 -0.04 (-0.18%)
ArvinMeritor Inc. ARM 14.56 +0.07 (+0.48%)
American Axle & Mfr. Holdings Inc. AXL 16.34 +0.23 (+1.43%)
Ballard Power Systems Inc. BLDP 5.96 -0.05 (-0.83%)
BorgWarner Inc. BWA 56.24 +0.49 (+0.88%)
Cummins Inc. CMI 104.66 +1.24 (+1.20%)
Dana Corporation DCN 0.66 0.00 (0.00%)
DaimlerChrysler AG (ADR) DCX 56.25 +1.13 (+2.05%)
Dura Automotive Systems DRRA 2.04 0.00 (0.00%)
Eaton Corporation ETN 69.30 +1.05 (+1.54%)
Ford Motor Company F 7.84 +0.09 (+1.16%)
General Motors Corporation GM 21.67 +0.30 (+1.41%)
Gentex Corporation GNTX 16.86 +0.30 (+1.81%)
Goodyear Tire & Rubber GT 13.18 +0.04 (+0.30%)
Honda Motor Co. Ltd. (ADR) HMC 29.91 +0.47 (+1.60%)
Johnson Controls Inc. JCI 73.62 +1.44 (+2.00%)
Lear Corporation LEA 17.86 -0.43 (-2.35%)
Magna International Inc. MGA 73.50 +0.62 (+0.85%)
Motorola Inc. MOT 20.88 -0.40 (-1.88%)
Nissan Motor Co. Ltd. (ADR) NSANY 22.98 +0.13 (+0.57%)
Sonic Automotive Inc. SAH 27.00 +0.13 (+0.48%)
Siemens AG SI 91.06 +1.09 (+1.21%)
Sirius Satellite Radio SIRI 4.78 -0.11 (-2.25%)
Toyota Motor Corporation (ADR) TM 106.68 +0.68 (+0.64%)
TRW Automotive Holdings TRW 24.65 +0.30 (+1.23%)
Tower Automotive Inc. TWRAQ.PK 0.049 +0.005 (+11.36%)
United Auto Group Inc. UAG 43.00 +0.18 (+0.42%)
Visteon Corporation VC 4.40 -0.07 (-1.57%)
XM Satellite Radio Hold. XMSR 20.85 -0.20 (-0.95%)

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