A publication from June 2012 Volume 01 | Issue 04 global

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The Americanization of Fiat

Troubles in Europe have made Chrysler the dominant player in the alliance A publication from All rights reserved. Inc. Communications Crain © 2012 fotolia.com B, © NIcholas US flag: March 2012 Volume 01 | Issue 01 dAtA Ex-Saabglobal monthlyboss Infiniti makes JATO data shows Muller wants big movesbrought to youwww.jato.com courtesy of Europe winners months Unit Percent – months 9 2010 change change SUV for Spyker 9 +67,087 in Europe 2011 6,307 –20% in first 4 months 73,394 –27,600 –10% 135,284 WESTERN EUROPE SALES BY MODEL, 9 MONTHS 107,684 –13,065 8% months Unit Percent ...... 133,366 A1 ...... +4,062 – 9 months 9 2010 change change –15% 120,301 51,950 2011 –20,618 3% A3/S3/RS3 +14,255 137,093 ...... 56,012 220 26% +316 A4/S4/RS4 ...... +1,436 116,475 22% 14,475 7% ...... 12,340 +2,088 A6/S6/RS6/Allroad 5,549 +966 12,656 9,386 –9% 6,985 –9% Scenic/Grand Scenic ...... –2,466 A7 ...... 13,435 –5,538 11,474 27,159 15% ...... 14,401 –19% Espace/Grand Espace +1,085 A8/S8 59,925 –253 ...... 24,693 7,057 –45% 54,387 3% Koleos –483 TT ...... 1,318 ...... 8,142 1,075 –10% ...... 1,065 +1,618 23% Kangoo 592 –85,087 A5/S5/RS5 47,585 +1,852 ...... 832,216 –10% 49,203 68% Trafic –96,250 R8 ...... 8,004 +268 ...... 747,129 –4% 9,856 Other ...... 994,894 –48,508 ...... 395 10% 898,644 –1% Q5 663 +45,088 Total Renault brand 1,288,257 –76 ...... 1% ...... –6% Q7 463,338 +13 1,239,749 9,687 –189 ...... 508,426 981 RENAULT ...... 9,611 – Other –25% 3,150 ...... 994 –46 – RENAULT-NISSAN 2,961 –1,053 Total Audi ...... +179 ...... 1,055 –10% 184 14 –52% 9-3 2 –1,318 – Continental GT/GTC ...138 –28 9-5 ...... 13,892 –2 193 54 10% 12,574 2 –10% Continental Flying Spur +118 ...... 26 –36% Other – –1,320 Mulsanne 1,233 –5 ...... 13,894 –13% 1,351 – Total Saab ...... –876 ...... 14 12,574 6,814 –25% Other ...... 9 +22 Spyker brand –2,629 – –10% ...... 5,938 – Total Bentley –28 SPYKER 10,383 +2,048 ...... 22 293 –92% ...... 7,754 – –1% Bugatti –65 Impreza –50 ...... 265 71 33% ...... 2,048 –71% Aventador +1 9,879 ...... 6 Legacy/Outback 9,829 –2,205 3 –19% ...... 3,110 –12% Gallardo ...... 4 –70 Trezia 905 –3,712 367 2% ...... 30,186 –26% Murcielago +50 Forester –9,240 ...... 297 2,733 –5% ...... 26,474 35,751 –26% Other ...... –79 Other –3,870 2,783 1,574 –3% ...... 26,511 14,669 17% Total Lamborghini –312 SUBARU +6,546 ...... 1,495 9,301 –9% ...... 10,799 39,466 116% Boxster –436 Alto +669 ...... 8,989 5,072 48% ...... 46,012 577 –31% Cayman +4,052 Splash –4,011 4,636 309% ...... 1,246 –10% 911 ...... 8,384 +182 Swift 12,880 –2,253 ...... 12,436 13% ...... 8,869 59 Kizashi 23,070 Panamera 241 +3,457 20,817 5% ...... 27,123 –13% Jimny ...... +519 Cayenne –4,075 –77% ...... 30,580 31,083 121% SX4 ...... 10,600 –91 Other ...... +6,506 11,119 –9% 27,008 5,392 5% ...... 118 Total Porsche +5,985 Vitara/ 27 –11,731 ...... 11,898 –6% 137,131 –21% Altea 114,589 –3,234 Grand Vitara/XL-7 –3,250 ...... 120,574 –5% ...... 125,400 15,880 29% Alhambra 54,359 –986 Other +682 51,125 –88% ...... 12,630 2,389 –8% Ibiza ...... 18,124 –173 SUZUKI –189 2% 3,071 2,264 –91% ...... 17,138 196 XF ...... –747 Leon 23 +4,023 2,075 822 –16% ...... 9% XJ ...... –3,504 Exeo 223,743 +8,764 75 –67% ...... 227,766 93,051 3% XK ...... 21,355 –2,360 Other +3,066 ...... 17,851 –11% ...... 101,815 16% Other 3,504 –2,410 Total Seat 94,156 +4,731 ...... 1,144 –14% ...... 97,222 12% Total Jaguar 22,351 –1,482 Fabia 29,947 +1,845 ...... 19,941 – ...... 34,678 19% Defender 10,673 +2,426 Octavia 16,004 +5,624 ...... 9,191 – –10% ...... 17,849 –87% Freelander –1,484 Superb 29,215 –179 ...... 2,426 14,420 39% ...... 34,839 205 9% Discovery ...... +1,685 Roomster 26 +23,851 12,936 4,310 –60% ...... –56% Range Rover Evoque ...... –6 Yeti 262,578 –14,223 5,995 10 –7% ...... 286,429 25,336 0% Range Rover Sport...... 4 –3,631 Other +1,129 55,268 –32% ...... 11,113 –2% Range Rover –402 Total Skoda 261,899 –7,572 ...... 51,637 1,278 –17% ...... 263,028 4% Other ...... 876 –54 Fox 367,403 +2,414 318 –71% ...... 359,831 107% Total Land Rover –716 Polo 62,784 +6,991 ...... 264 1,015 –45% 65,198 40% Indica –1,172 Golf ...... 6,550 ...... 299 2,611 –11% ...... 13,541 +48,415 5% Xenon –8,307 Golf Plus 121,056 +809 ...... 1,439 79,234 –21% 169,471 42% Other ...... –590 Jetta ...... 16,010 +668 70,927 2,765 –40% ...... 16,819 –24% Total Tata brand...... –1,595 Passat 1,604 2,175 4,023 –59% ...... 2,272 –6,653 –1% TATA MOTORS ...... –614 Passat CC 27,677 –83 2,428 1,041 –48% ...... 21,024 32% Cuore/Charade 427 –3,200 Phaeton 10,432 ...... 6,655 –82% ...... 10,349 +21,789 343% Sirion –323 Scirocco 68,935 ...... 3,455 395 –43% 90,724 +26,300 7% Materia 72 –6,322 – Eos ...... 7,674 ...... +5,286 Terios 14,879 +11,058 ...... 33,974 74,469 60% ...... 8,557 – Touran +6,297 Other –37% ...... 79,755 29% ...... 11,058 –43% Sharan 10,580 +9,220 Total Daihatsu –1,897 –3,460 ...... 16,877 5,102 –59% Tiguan 32,148 CT ...... 3,205 8,071 –512 ...... 41,368 –2% 4,611 37% Touareg –705 ...... 870 ...... –44% IS 358 +5,189 Caddy 36,198 ...... 14,043 –46% 35,493 –3,598 9% RX –8,780 ..... 8,095 ...... 19,232 19,081 0% Transporter/Caravelle/ +96,484 Other –156 4,497 8% ...... 10,301 64,398 –15% Multivan/Shuttle/T5 1,138,850 +172,946 Total Lexus –17,304 8% ...... 1,235,334 25% ...... 64,242 113,795 Other ...... 2,117,246 +1,544 IQ +4,909 2,290,192 6,237 –29% ...... 96,491 58,156 –9% Total VW brand...... –171 Aygo –474 7,781 589 –1% ...... 63,065 5,137 –47% VOLKSWAGEN –94,999 Yaris –16,920 ...... 418 ...... 4,663 36,364 –15% OTHER .... 10,003,117 Auris –6,705 – (China automakers) 9,908,118 l are compiled ...... 19,444 OTHER Corolla 44,265 +13,297 ...... and, France, 37,560 – –2% GRAND TOTAL , Spain, Prius ...... –501 ...... 13,297 –53% Avensis 27,348 –6,009 Excludes models registered as commerical vehicles. Europe sales by mode ...... 26,847 –16% Note: Verso-S 11,376 –5,640 using sales data from the following countries: Austria, Belgium, Denmark, Finl ...... 5,367 –15% Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal Verso 35,679 –1,290 ...... 30,039 –52% Sweden and Switzerland. Urban Cruiser 8,445 –993 ...... 7,155 –11% RAV4 1,907 Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com) ...... 914 –46,566 –11% Land Cruiser 425,951 379,385 –47,699 Other ...... 454,873 407,174 this global monthly is property of John doe Total Toyota brand...... TOYOTA MOTOR

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Lead sponsor in partnership with platinum sponsor trophy design by June 2012 COVER STORY Volume 01 | Issue 04

The 'Americanization' of Fiat

How Chrysler's quick recovery has caused a power shift within the alliance

When Fiat took control of Chrysler many thought the U.S. automaker would be run from the Italian automaker's headquarters in Turin (shown). That has not been the case.

Luca Ciferri What's driving the power shift? Money. Fiat has been unable to make any profit in a recession-hit Europe, which Fears that Chrysler would be "Italianized" when Fiat took has left it severely weakened. control of the U.S. automaker once seemed reasonable. Three years later, a thriving Chrysler is propping up an In the first quarter, North America -- which is all Chrysler ailing Fiat and some outraged Italians complain about the with the exception of some Fiat 500 production in Mexico - "Americanization" of Fiat. - generated 670 million euros toward Fiat's total consolidated trading profit of 866 million euros. The 22 executives that run Fiat-Chrysler as a single entity on a global basis usually hold their monthly meeting at Europe, which is Fiat plus a small number of Chrysler Chrysler's base in Auburn Hills, near Detroit, and only rarely imports from Canada, the United States and Mexico, in Fiat's home city of Turin. In Auburn Hills, Italian is posted a 207 million euro trading loss in the quarter. The forbidden even between Italians. The official language of company also made money in Latin America (235 million the company's Group Executive Council is English. euros) and Asia-Pacific (77 million euros). Trading profit/loss is operating profit/loss before unusual items. The shift of balance between the doctor and the patient has been so massive than many now expect the United When it comes to net profit, Chrysler Group made 652 States to become the home of the merged Fiat-Chrysler. million euros and Fiat lost 273 million euros. Without Turin, for 133 years the capital of the Fiat empire, soon Chrysler, Fiat would have finished the first quarter with a could be reduced to a regional headquarters that covers big loss rather than a 379 million euro consolidated net Europe, Africa and the Middle East, despite Fiat owning profit. 58.5 percent of Chrysler.

europe.autonews.com/GlobalMonthly June 2012 COVER STORY Volume 01 | Issue 04

Chrysler's transformation into Fiat's financial savior has happened because of internal and external reasons. Internally, Chrysler completed the first part of an ambitious relaunch program ahead of schedule. The keys to the program included making Jeep the leading brand in the international expansion of Chrysler Group and becoming the first volume automaker to offer a fuel-saving eight- speed automatic transmission in North America.

Fiat announced a five-year plan in April 2010 and still has a lot of work to do to reach lofty targets such as relaunching its ailing Alfa Romeo brand in North America and Fiat's European sales have been hurt by the delayed expanding the company's overall presence in China, India replacement of models such as the Punto. and Russia.

In addition, Europe's long-awaited recovery was supposed to begin this year. That won't happen, which means Marchionne's decision also made sense at the time because Europe's new-car sales will decline for a fifth-consecutive launching new products into a crashing market seemed year. Putting even more pressure on Fiat is that new-car foolish. Fiat's product offensive was set to begin this year sales in Italy are forecast to reach a 33-year low of 1.37 to coincide a rise in European sales that Marchionne million, which would 22 percent below 2011. estimated would reach 14.6 million units, or about the same level as 2008. In United States, the new-car sales volumes -- and more importantly, margins -- have recovered faster than After four months, however, European sales are down 7 expected from big declines in 2008 and 2009. Better sales percent and are expected to fall to about 12.6 million for and margins from Chrysler, which is the third-largest U.S. the full year from 13.6 million in 2011. automaker, result in big financial gains for Fiat. Without new models, Fiat's European market share has Marchionne makeover shrunk to 6.4 percent after four months from 7.4 percent during the same period last year. Market share is unlikely Sergio Marchionne, who is CEO of Fiat and Chrysler as well to rise anytime soon because two crucial new Fiat models - as the chief operating officer of the alliance's North - the Punto subcompact and Bravo compact -- will not American region, gave Chrysler the same shock treatment debut until at least 2014. Both cars were supposed to he used to revive Fiat Auto after taking over in mid-2004. launch next year but were delayed due to the continued The big moves at Chrysler included streamlining economic weakness of the European market. management, purging extra inventory from sales channels, slashing incentives, launching new or improved products Fiat's near-premium subsidiary, Alfa Romeo, also must wait and limiting production to what the market demands. until 2014 for its model offensive to start. With global sales of 36,000 through four months, Alfa's 2012 volume could Fueled by the arrival of 16 new or refreshed models since dip below 100,000 for the first time since 1968. 2010, Chrysler reported a $183 million net profit in 2011 compared with a $652 million lost the year before. The falling numbers in Europe have not caused Marchionne to make big changes at Chrysler because the U.S. market Fiat's European operations, meanwhile, posted a 2011 remains hot. trading loss of more than 500 million euros. Because of Europe's poor performance, Fiat's global automotive "I continue to be somewhat concerned and somewhat operations swung to a 791 million euro net loss last year reluctant to engage in expansions in Europe, but I have not from a 369.6 million euro profit in 2010. slowed down one single dollar of spending in the U.S.," Marchionne said early this month when visiting a Fiat Unlike Chrysler, Fiat is starved for new product. This dealer in Austin, Texas, that is the first U.S. retailer to sell problem stems from Marchionne's decision to drastically more than 100 units of the 500 in a month. reduce spending on new models. The wise move protected Fiat's cash ahead of investment bank Lehman Brothers' What's next for the alliance? September 2008 collapse, which sparked the global A complete merger of Fiat and Chrysler is next major event financial crisis that essentially put a halt to all lending. on the schedule. "Fiat-Chrysler is clearly an unfinished

europe.autonews.com/GlobalMonthly June 2012 COVER STORY Volume 01 | Issue 04

project," said Max Warburton, an auto analyst at Bernstein work in progress. The same can be said for where Fiat- Research in London. He says Fiat will purchase the rest of Chrysler will establish its global headquarters. Chrysler "sooner rather than later" and estimates that it Marchionne has repeatedly said he is open-minded about will cost the Italian company about 3 billion euros. this topic. An indication that the location of Fiat-Chrysler's Another big move the alliance is mulling is strengthening headquarters could be anywhere came May 30 when it itself in Asia, where Fiat-Chrysler sold 25,000 cars in the was announced that Holland -- not Italy -- would be the first quarter compared with 519,000 units in North base for the merged operations of Fiat's heavy truck unit, America, 260,000 in Europe and 215,000 in Latin America. Fiat Industrial, and its farm and construction equipment arm, Case New Holland. Prior to the merger Fiat Industrial Last month Fiat signed a memorandum of understanding was based in Turin and CNH had its headquarters in Burr with Mazda to co-develop an Alfa variant on the same Ridge, Illinois, USA. platform used by the next Mazda MX-5/Miata roadster, but Fiat chairman John Elkann has said that no capital tie-up is Whether Fiat-Chrysler's base is in the United States, Italy or planned. anyplace else in the world seems irrelevant to its future success. This is a global business that requires companies Marchionne said he is not interested in partnership with and the people who run them to adapt quickly. Italians, Mitsubishi and Fiat-Chrysler can't deepen existing ties with however, may find it hard to accept that the final word in Suzuki until the Japanese automaker finds a way out of its the acronym Fiat -- Fabbrica Italiana Automobili Torino -- is failed partnership with Volkswagen Group. This means that becoming less significant every day. establishing an Asian third leg of the alliance remains as a

europe.autonews.com/GlobalMonthly June 2012 Volume 01 | Issue 04

Inside this issue: What's next for Fiat- Chrysler; Winterkorn shakes up VW

Welcome to the fourth issue of the delivered this exciting new product to Automotive News Europe Global readers around the world. We Monthly. designed the Automotive News Europe Global Monthly to meet your The June edition is full of exclusive needs and conform to your reading content from the Automotive News habits. Europe team and the global network of Automotive News writers. Here is how it works:

So, what's hot this month? 1. You can download our Editor's Picks -- stories that we have pre- -- If you go back to the cover you'll selected each month, including car see a photo illustration showing four cutaways, data and exclusive content. U.S. flags flying over Fiat's Turin On the Automotive News Europe headquarters. Of course, those flags Global Monthly landing page, the are not actually there. We did this to Editor's Picks appear on the left side emphasize that the balance of power of the screen. Click the blue Assemble within Fiat-Chrysler seems to have Douglas A. Bolduc is Automotive and Download Your Issue button and shifted to the United States from Italy. News Europe Managing Editor your PDF is automatically generated. Our cover story looks at how this happened and what to expect next accompany VW on its drive to become 2. Did you miss some big stories from Fiat-Chrysler. the world's largest automaker by during the month? Simply add them 2018. The personnel shuffle sent a to your Automotive News Europe -- One of the major benefits that Fiat message: No one in VW's upper Global Monthly by clicking on any of and Chrysler saw before they teamed management should feel too secure. the headlines in the Your Picks section up was the chance to share We look at why the changes were on the right side of the page. They technologies. The problem in most made. will be automatically added to your automotive marriages, however, is binder of Global Monthly stories. that the parties seldom want to -- Former Saab boss Victor Muller has Again, click the blue Assemble and collaborate with a partner who one a new challenge. We tell you what Download Your Issue button to day might become a rival again. Fiat that project is. download a larger issue. and Chrysler were quick to find a -- The Peugeot 208 is greener and common ground and already have a And come back during the month to roomier than its predecessor. Find out shared line of cars that will be sold see what stories have been added to which suppliers helped make this around the world. We look at what the Your Picks section. happen. has made this young automotive We hope you enjoy the Global relationship flourish. -- Learn which models were the big Monthly. winners based on European four- -- Volkswagen Group CEO Martin month sales from our partners at Winterkorn made it clear this month JATO Dynamics. that he will not accept failure. A Douglas A. Bolduc number of respected but under- Getting to know the product Managing Editor performing senior managers will not This is the fourth month that Automotive News Europe has

europe.autonews.com/GlobalMonthly June 2012 COVER STORY Volume 01 | Issue 04

Alfa Giulietta shows Fiat and Chrysler can listen, collaborate

The Alfa Romeo Giulietta (shown) platform was widened by Chrysler to underpin the Dodge Dart in the U.S. and the Fiat Viaggio in China.

Larry P. Vellequette automakers -- Mitsubishi, American The fuel-efficient 1.4-liter Motors and especially the prickly turbocharged four-cylinder engine When the Alfa Romeo Giulietta was relationship with Daimler -- engineers used in the Dart was designed by Fiat born, no one knew it would become at the U.S. automaker say they're but is assembled by Chrysler in the the first in a line of cars that would be finally in a marriage built to last. United States. sold around the world or that it would prove the vast potential of the Fiat- "I've been here since 1983, and I've The U.S. automaker is using a Fiat- Chrysler alliance. lived through quite a number" of sourced six-speed manual partnerships, says Mark Chernoby, transmission as standard equipment. The Giulietta is the basis for the Chrysler's head of engineering. "Right Dodge Dart, the first child of the 2009 In 2009, Fiat came to the Chrysler out of the chute, this was probably marriage between Fiat and Chrysler party with advanced technology and the first team we've worked with Group. The Dart is a compact sedan market-tested, flexible platforms that where we started right away listening for North America. With a few would allow the ailing U.S. automaker to each other and learning from each changes, the Dart became the Fiat to make money on compact and mid- other." Viaggio, which goes on sale later this sized vehicles that could be brought year in China and could be tweaked Joint platform to market in less than three years. again so it can be sold as a Fiat Chrysler, in turn, brought a global The Dart's skeletal structure comes hatchback in Europe starting next powerhouse in its Jeep brand and the from the Giulietta, which is only sold year. market experience to show Fiat how in Europe. The Dart, Chernoby says, to attract consumers in North After decades of questionable grew from collaboration among Fiat America. corporate and product-specific tie-ups and Chrysler engineers. between Chrysler and other

europe.autonews.com/GlobalMonthly June 2012 COVER STORY Volume 01 | Issue 04

From the start, Chrysler's experience that allowed engineers to cut several from bankruptcy, shows what with Fiat was strikingly different from kilograms from the Dart's front Chrysler and Fiat can do together. its previous tie-ups, especially the suspension. "The fact that they were able to bring failed "merger of equals" with Unlike the experience with Daimler, [the Dart] to market in the short Daimler. Chernoby said that after Chrysler amount of time that they did -- and I Under Daimler, Chrysler's use of its came out of bankruptcy in June 2009, thought that it was pretty good -- parent company's technology was Chrysler and Fiat immediately began shows the capability and advantages limited in part to protect the luster of melding the way the two develop that this alliance is able to create," the Mercedes-Benz brand. automobiles. Lindland said.

"You had such brand separation at "We knew one of the things we had She agreed with Chernoby that the start of the merger that we to do was to maximize speed of Chrysler's alliance with Fiat is proving couldn't share a lug nut with cooperation. We compared and to be a much more natural fit than its Mercedes for the first two years, so contrasted the ways we did business previous tie-up with Daimler. what's the point of merging?" on each side of the water," Chernoby Lindland said: "Daimler and Chrysler recalled Gary Dilts, who retired as said. Both sides shed some of their was like caviar and peanut butter, and Chrysler's head of U.S. sales in 2006. own practices and adopted others Fiat and Chrysler are like peanut "It was basically a merger of balance from across the Atlantic. butter and jelly." sheets and nothing else." Rebecca Lindland, an IHS Automotive -- Luca Ciferri contributed Working together analyst, said Chrysler's speed to market with the Dart, which will Fiat introduced to Chrysler a high- appear in showrooms before the third pressure aluminum casting process anniversary of Chrysler's emergence

europe.autonews.com/GlobalMonthly June 2012 COMMENTARY Volume 01 | Issue 04

VW's Winterkorn sends a tough message to his executive team

Volkswagen Group CEO Martin Audi sales chief Schwarzenbauer, 52, Winterkorn sent an unmistakable fell victim to a better candidate. Luca message this month when he De Meo, the marketing chief for the orchestrated a series of senior VW Group and the VW brand, will management changes. To reach the head Audi sales. Schwarzenbauer is pinnacle of the global auto industry -- leaving the company. VW's declared ambition -- you must Schwarzenbauer lacked a vision for be tough and sometimes even cruel. further development of the brand. De This is what VW China chief Karl- Guido Reinking is editor-in-chief of Meo has that in abundance. The Thomas Neumann, Audi development Automobilwoche. much-vaunted introduction campaign chief Michael Dick and Audi sales for the VW Up small car in Europe chief Peter Schwarzenbauer have Porsche's head of R&D from 2001 was his idea. Audi hasn't had learned. They are no longer part of through 2011. anything like it for a long time. Audi's Winterkorn's and Supervisory Board advertising was once highly praised Duerheimer, who felt unchallenged as Chairman Ferdinand Piech's plans. and won many awards. But it has Bentley chief, now can prove himself been boring for a long time. No one in VW's upper management as the Audi development chief and ranks should feel too secure. It can position himself for even greater The next career step is a challenge for happen to Dick, whom Piech has responsibilities. De Meo as well: The eloquent known for decades, or Neumann, marketing visionary must prove The situation was different for who always had a warm relationship whether he can haggle successfully Neumann. The former Continental with Winterkorn, if the results aren't with regional sales companies and CEO has been replaced as the right, mistakes pile up or a better dealers on volumes, margins and executive responsible for VW's most candidate becomes available. standards. important market, China. The 51-year- That's what happened with Audi's old with the youthful demeanor tried De Meo was Fiat's chief marketing development chief. Dick, 60, to introduce a new, looser officer before leaving in 2009 to join advanced the brand technologically. management style at VW and VW. He was a protege of Sergio The A4, A5 and A6 are benchmarks in apparently has failed. Marchionne and was credited with their segments in many respects -- for the successful launch of the Fiat 500 He also had to answer for quality example in lightweight construction, in Europe in 2007. problems in China. Without a power Piech's favorite topic. base in Wolfsburg, Neumann He is only 44 and appears to have a But Dick apparently lacked vision remained a foreign body in the VW bright future at VW. But as all VW beyond conventional vehicle Group. The company will look for executives must know by now, if their manufacturing. People say his another use for him, sources say. But performance falls short or a better replacement, Bentley CEO Wolfgang he also could leave VW. candidate emerges, their careers will Duerheimer, 53, has such a vision. He quickly end. Jochem Heizmann, 60, gets the new pushed the envelope of technical board post overseeing VW Group's feasibility and fuel consumption on China operations, moving from his the Porsche 918 concept while role as head of heavy trucks.

europe.autonews.com/GlobalMonthly June 2012 COMMENTARY Volume 01 | Issue 04

Infiniti gets serious; should the Germans worry?

Infiniti is starting to make the moves Europe including Turkey and Russia is that are needed to become a 15,000. By 2016, Infiniti aims to sell legitimate challenger to BMW, Audi 100,000 vehicles in Europe and and Mercedes-Benz in Europe. 500,000 globally. By comparison, Toyota's Lexus luxury brand last year The Nissan luxury subsidiary will increased its European sales by 49 launch a new premium compact car in percent to 27,427 units while Audi Europe in 2014 that it hopes will sold 692,979 units in Europe, ahead attract new customers to the brand, of BMW's 655,508 and Mercedes's especially young buyers in markets 605,843, according to JATO. such as Germany and the UK. Like Lexus, Infiniti has struggled in The Infiniti model will take design Europe because of limited model and cues from the Etherea, a sleek Audi Luca Ciferri is senior reporter for powertrain lineups. Infiniti only A3-sized car that was first shown at Automotive News Europe offered gasoline-powered SUVs when the 2011 Geneva auto show. it launched in Europe in 2008 but Based on the platform that underpins already have done in the United now also sells sedans and offers the Mercedes A- and B-class cars, the States. Neither German automaker diesels. Infiniti's other advantages model will be produced by Austrian would be enjoying its current success include the support and economies of contract manufacturer Magna Steyr, there without investing in local scale it gets from owner, Nissan, and which will build the car at the former production. from Nissan's alliances with Renault FSO factory in Warsaw, Poland's Today, Mercedes and BMW are in a and Mercedes parent Daimler. deputy economy minister was quoted tense battle for the No. 1 spot in U.S. Despite the challenges Infiniti faces, as saying recently. luxury car sales, leaving locals such as many companies have learned that Making a car for Europe in Europe in Cadillac and Lincoln struggling to underestimating the Japanese is not a country with a good supply of keep pace. wise. Fifty years ago world-renowned experienced low-cost labor is smart on Infiniti's other big move is the hiring German brands Contax, Leica and many levels. Poland has been losing of longtime Audi executive Johan De Rollei laughed when Canon, Nikon production and needs a boost to Nysschen as its first true global boss. and Pentax began building copycat remain a power player against Under De Nysschen, Audi's share of film cameras. The German camera growing central European rivals such the U.S. luxury market has climbed makers have not been laughing for a as Romania, Hungary and the Czech from 5.3 percent in 2004 to 9.5 long time. Contax is gone while Leica Republic. percent last year, and the Volkswagen and Rollei rely heavily on technological cooperation from their Japanese rivals. This means that Magna and Infiniti Group-owned brand is quickly gaining Whether Infiniti will ever be a real could get a generous package of on BMW and Mercedes. sales threat to the Germans remains incentives from Polish officials. Any Infiniti has a lot of work to do to to be seen, but it has made moves extras that are provided will just help become a winner in Europe. Sales rose that will force the Germans to pay make the car more competitive in 54 percent to 3,681, according to closer attention. Europe and around the world. JATO Dynamics, which includes the What Infiniti is starting in Europe EU countries, Iceland, Norway, mirrors what BMW and Mercedes Switzerland and Turkey. The company's 2012 sales target for

europe.autonews.com/GlobalMonthly June 2012 COMMENTARY Volume 01 | Issue 04

Why Japan's top automakers are feeling squeezed by German luxury brands

SHANGHAI -- China has become the One might expect Volkswagen's mid- largest market worldwide for Audi sized Passat and Magotan to suffer, and BMW, and it has become the but sales have actually surged this third largest market for Mercedes- year. That's because they are new Benz. products with powertrain technology that is popular with Chinese car Eager to catch up with its two buyers. German rivals, Mercedes cut prices steeply in February, igniting a price Weak response war in China's luxury market. The Japanese automakers are fighting This price war has produced an back, without much success. Honda unintended consequence: While the and Nissan have dropped prices more three German automakers battle each than 30,000 yuan this year, while other, they are also grabbing market Toyota launched a redesigned hybrid share from Toyota, Honda and Nissan Camry in China last month. in China's mid-sized market. Yang Jian is managing editor of Automotive News China But the Camry hybrid isn't winning After a series of price cuts averaging over many Chinese consumers, since 70,000 yuan, many Audi, BMW and its price tag is still 36,000 yuan higher and Mercedes C class have fallen to Mercedes models cost only 200,000 than the gasoline version. to 300,000 yuan, pressuring Japan's 250,000 yuan. Meanwhile, the German automakers mass-market brands. Now, sales of the mid-sized Japanese are not satisfied with their market models are starting to slide. In the first Japanese brands suffer share. They continue to expand four months, sales of the Camry slid 2 production capacity in China to avoid The Toyota Camry, Honda Accord and percent, while sales of the Accord and hefty custom duties. Nissan Teana have been hit hardest. Teana tumbled more than 20 percent. These three models have been Last month, BMW opened a new As a result, the Japanese models' traditional top sellers in China, thanks plant in Shenyang, doubling its combined share of the mid-sized car to their high fuel efficiency and finely Chinese production capacity. sales has declined to 24 percent, made interiors. Mercedes-Benz expanded its plant in down from 30 percent in 2011. Beijing, and Volkswagen's new plant With cumulative sales of 460,000 To be sure, the German luxury brands' in southern China will start producing units, these models accounted for battle for market share has affected the Audi A3 next year. roughly 30 percent of China's mid- the entire mid-sized segment, sized car sales last year, according to Keep your eye on the A3. Now that including mass-market brands such as LMC Automotive. Audi, BMW and Mercedes are Buick, Ford and Hyundai. introducing smaller, more modestly Supported by their high brand But the effect on the Japanese brands priced models, their Japanese rivals recognition, the three models sell for is much greater because the Camry, may be facing a full-scale war for 180,000 to 370,000 yuan. But now, Accord and Teana have long market share. prices of the Audi A4, BMW 5 series dominated the segment.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

After Saab, Muller seeks to revive Spyker with upscale SUV

Spyker CEO Victor Muller stands between a Saab 9-5 (left) and a Spyker C8 Laviolette after the deal for Spyker to buy Saab was announced in January 2010. Photo: Bloomberg

David Jolley brand he launched in 1999 that builds Saab. In April, the company said it had 200,000-euro supercars. converted almost its entire bank debts Victor Muller aims to revive his Spyker of 130 million euros into share capital sports car business after his failed Muller is seeking investors to build a for its lenders. attempt to turn Saab into a profitable, production version of the D8 SSUV independent niche automaker. Paris-Peking SUV concept unveiled at Muller reduced his majority stake in the 2006 Geneva auto show, a Spyker Spyker to 24.1 percent from 70.1 The Dutch businessman bought Saab spokeswoman told Automotive News percent to avoid being forced to make from General Motors in 2010, saving Europe. "Further development a bid for all outstanding shares in the the money-losing Swedish brand from depends on investment," she said. company. Muller has placed 145 being liquidated by its U.S. parent. million shares with two unrelated trust Saab, however, quickly ran into Media reports suggest that Muller is companies, Tenaci and Laviolette, in financial trouble as car sales fell well seeking about 32 million euros to Curacao, taking his voting rights in short of targets. Last December, begin production of the SUV. The the automaker below 30 percent, Muller was ousted when Saab was reports also say he wants to boost Spyker said in May. Despite losing his placed under the control of Spyker's annual production to 1,000 majority holding in the company, bankruptcy administrators. cars. The automaker currently sells the Muller, as CEO and sole management C8 Aileron model in several variants. Now Muller has turned his attention board member, is firmly in charge of back to Spyker, the small boutique Spyker production was hit by debts company policy, Spyker's related to the attempted rescue of spokeswoman said.

europe.autonews.com/GlobalMonthly June 2012 DIESEL DECLINE Volume 01 | Issue 04

Big gains are over for diesels in Europe, experts say

Nick Gibbs nitrogen (NOx) from 180mg per gasoline turbos because they are more kilometer to 80mg. profitable, cost less and they offer Two decades of diesel growth in closer and closer CO2 performance to Europe may be at an end. Tough new "As diesel emissions technology diesel," said IHS's Rinkel. emissions legislation and fuel-efficient becomes more expensive, the industry gasoline engines will make diesels less is concerned you won't be able to Filling up with diesel could become attractive in Europe, experts say. price for it," said Tim Winstanley, Ford more expensive than gasoline. The of Europe's powertrain manager. European Union is proposing to tax "There's much more interesting fuel by energy content rather than investment in petrol technology," said "That might cause a change in the volume. When the new rule takes Paul Willcox, head of sales and diesel/gasoline mix." effect in 2023, it would remove the marketing for Nissan in Europe. IHS estimates the cost per car for NOx tax advantage that diesel enjoys in Diesel sales in Europe are currently the reduction technology ranges from 100 many European countries. highest they've ever been, Marc euros ($125) for smarter combustion Another problem for diesel is a lack of Rinkel, a senior powertrain analyst at to 400 euros for exhaust treatment. refining capacity. Other sectors, such IHS told Automotive News Europe. "In terms of cost, it's less of a as shipping and agriculture, are Diesel's market share in western challenge to get a gasoline engine increasing consumption, according to Europe soared from 14 percent in through Euro 6," said Winstanley. IHS. "We don't see any coming 1990 to 52 percent in 2010, investment to increase the yield in Ford is betting heavily on its according to industry association diesel," Rinkel said. downsized turbocharged EcoBoost ACEA. But IHS expects the diesel gasoline engines. Last month, it As the price of diesel fuel rises, share to decline as Euro 6 emissions announced plans to sell more than 1.3 gasoline-electric hybrid powertrains legislation becomes law. million EcoBoost engines in Europe could grow more attractive. The biggest decline will be in the from 2012 through 2015. Of those, "If your diesel costs are getting higher subcompact segment, with diesel 800,000 engines will be the newly and higher, then the logical step to losing 7 percentage points of share to launched 1.0-liter gasoline direct- achieve the lowest fuel economy is to gasoline, Rinkel added. injection unit. electrify the cheaper gasoline Euro 6 emissions legislation becomes In April, sales of the Focus compact engines," said Ford's Winstanley. law for newly launched cars in with that engine accounted for 23 "We're certainly evaluating hybrids." September 2014 and extends to all percent of that model's total Nissan also is looking more closely, new cars a year later. The costliest European sales. says Willcox: "In the mid-term, that's requirement for automakers is to "There are clear incentives for a power choice that would become reduce harmful emissions of oxides of automakers to push direct-injection much more interesting in Europe."

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Renault wants battery leasing to remove EV fear, spark sales

Renault will lease the Zoe's battery for 80 to 100 euros a month. The electric-powered subcompact will have a starting price of 15,700 euros in Europe.

Bruce Gain & Nick Gibbs customers that they will never have to Selling the battery also is logistically worry about repairing the batteries, simpler than leasing it, but other Renault says it will lease the battery in but we also know that they are totally carmakers may take different the Zoe when the five-door reliable." approaches in the future. subcompact hatchback goes on sale later this year, and alliance partner Renault also leases the battery in the "Ultimately, we are still in an Nissan may change strategies and do Kangoo ZE, Fluence ZE and Twizy. emerging market," Fletcher said. the same. That policy contrasts with that of "There are many variables involved other carmakers in Europe, which sell and I expect that the manufacturers Renault will lease the battery for 80 to the battery along with their electric will offer different deals." 100 euros a month, while the car will cars. carry a starting price of 15,700 euros. Nissan may follow EVs sold along with their battery With a production capacity of Nissan sales and marketing chief Paul include the Mitsubishi i-MiEV, Nissan 150,000 units, the Zoe will be the Willcox told Automotive News Europe Leaf, Peugeot iOn and Citroen C-Zero. world's most ambitious electric vehicle that he will watch Renault's business The same is true for the Opel/Vauxhall launch to date, and Renault wants to model closely. "They lease batteries, Ampera and Chevrolet Volt plug-in ensure that customers are not worried we don't," Willcox said. "If it's seems hybrids. about the battery's durability. to be more acceptable we'd be foolish Those carmakers are bundling the cost not to adopt it." "The reason we lease is purely of the battery along with their EV psychological," a Renault Willcox wants to triple Leaf sales this models to simplify the total cost for spokeswoman told Automotive News year to 9,000 in Europe. the customer, said Ian Fletcher, an Europe. "We want to reassure analyst for IHS Global Insight.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

"We have a lot to do to build future, there will be fewer fears about business opportunities, provided that consumer awareness and make the battery longevity." the battery technology is reliable. product accessible," he said. "That Eliminate risk Renault has the potential to make means being more creative in the way money from battery leases if the we put the financial packages Renault says Zoe owners will need to batteries last six years or longer, he together." drive 12,000km a year to make the noted. model's ownership costs comparable Electric cars with a leased battery will to that of its similarly priced Clio fuel- "Renault also is taking a risk that the have a higher residual value, powered subcompact. other European carmakers have been according to consultancy unwilling to assume by being the first EurotaxGlass's, which tracks used-car The company is assuming the risk that to develop a high-volume EV car," prices. customers otherwise might not want Jullien said. "This means that they are to take by retaining ownership of the In May, the company estimated that at a considerable competitive battery, said Bernard Jullien, an the Nissan Leaf would retain 35 advantage." economist for the Paris-based percent of its value after three years automotive think tank Gerpisa. Renault obtains its batteries from LG and 36,000 miles (about 57,940km), Chem of South Korea and Automotive compared with 54 percent for a "Renault is essentially removing a Energy Supply Corporation, a joint comparable EV with a leased battery. roadblock to EVs' acceptance," Jullien venture between Nissan and NEC. said. "It is eliminating the risk for the As battery technology improves, customer that is associated with the Renault will start producing its own customer fears about durability should car's reliability and its resale value." batteries in Flins, France in 2014. subside, predicted Fletcher of IHS. "All of the different parts of the Jullien said Renault's battery technology should improve. In the development strategy also may create

europe.autonews.com/GlobalMonthly June 2012 DATA Volume 01 | Issue 04

Europe sales by model: VW Passat passes Peugeot 207

The VW Passat (shown) has benefited from declining sales of the Peugeot 207.

Douglas A. Bolduc with flat European sales during the Europe's 4-month 2012 top sellers; period. (See chart) The Volkswagen Passat rose one spot % change from 2011 to ninth on Europe's list of top 10 The No. 1 Volkswagen Golf extended units % sellers after four months. Through its sales lead over its closest sold change April, Volkswagen has sold 74,609 competitor, the Ford Fiesta, to more 1. VW Golf 161,753 -4 units of Europe's favorite mid-sized than 40,000 units from nearly 30,000 2. Ford Fiesta 121,335 -12 car, which passed the Peugeot 207, at the end of the first quarter. VW's according to data from UK-based Polo subcompact ranked third in 3. VW Polo 114,844 -11 market researchers JATO Dynamics. European sales. 4. Ford Focus 99,630 0 Demand for the French subcompact The tightest race among cars in the 5. Opel/ 97,117 -22 fell 24 percent to 71,319 after four top 10 is between the Ford Focus and Vauxhall Corsa months because it is being replaced the Opel/Vauxhall Corsa for the No. 4 6. Renault Clio 89,199 -22 this year by the 208. spot in the ranking. Through April, 7. Opel/ Ford's compact has outsold Opel's 88,859 -21 An 8 percent decline in Europe's total Vauxhall Astra subcompact by just 2,513 units. sales through April hit cars in the top 8. Nissan 79,263 0 10 hard. Six of the models in the top Full tables for European sales by Qashqai 10 suffered double-digit decreases in model for April and the first four 9. VW Passat 74,609 -6 four-month sales compared with the months are published in PDF form at same period last year. the back of this month's Automotive 10. Peugeot 207 71,319 -24 News Europe Global Monthly. The Ford Focus and Nissan Qashqai JATO Dynamics were the only winners in the group

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Lexus gets boost from move into key European segment

Strong demand for the hybrid-only CT 200h has helped Lexus pass Jaguar in European sales.

Luca Ciferri Lexus has led Jaguar in European sales on the platform that underpins the since the CT 200h's introduction in Mercedes A- and B-class cars, the Lexus is benefiting from its move into early 2011. Infiniti model will be produced by the fast-growing compact-premium Austrian contract manufacturer segment. The CT 200h, which is a The success of the CT 200h, which is Magna Steyr and will be the first rival to the Audi A3 and BMW 1 offered only as a gasoline-electric full Infiniti made in Europe. series, accounted for 67 percent of hybrid in Europe, is why Lexus' Lexus' 10,641 European sales in the Japanese rival, Infiniti, plans to join All Lexus models sold in Europe are first four months. the compact-premium segment by imported from Japan. 2014. With a volume of 7,142, the CT 200h The new Infiniti will take design cues also nearly outsold the entire Jaguar Infiniti will launch a new premium from the Etherea, a sleek Audi brand, which through April has 8,659 compact car that it hopes will attract A3-sized car that was first shown at sales in Europe, according to market new customers to the brand, the 2011 Geneva auto show. researcher JATO Dynamics. especially young buyers in markets such as Germany and the UK. Based

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Jaguar does not have any current compact-premium Mercedes models One thing that hurts the CT 200h in plans to enter the compact-premium in Hungary, Germany and China. Europe is that Lexus does not offer a segment. Mercedes will expand its lineup in the diesel variant, but the automaker has segment from two models -- the A no plans to invest to add the The British brand is still a couple years class and B class -- to five cars, leading powertrain in the compact-premium away from adding a rival in the lower- to significantly higher volumes. segment because it believes demand premium segment to compete against Mercedes says it has received more for diesels is headed for a decline. the BMW 3 series and Mercedes C than 100,000 orders for the B class class. "Euro 6 emission standards will have since its launch in Europe in repercussions on the price of diesel Ready for a boom November 2011. The new A class will models, making them more expensive go on sale in Europe in September. The A3 was Europe's best-selling than today. At Toyota, we see Mercedes also plans to add SUV and compact-premium model last year gasoline hybrids as the most-efficient shooting brake versions to the with a volume of 137,000, putting it solution from well to wheel," Toyota compact-premium range as well as a ahead of 1 series, according to JATO Europe CEO Didier Leroy told coupe-styled sedan called the CLA, data. Automotive News Europe. which will arrive in showrooms early Overall, the compact-premium next year, according to press reports. Lexus, which last year sold 43,637 segment declined 2 percent last year vehicles in Europe including Russia, Audi is adding a fourth body style -- a to 563,055 units, but the niche's plans a modest volume increase this sedan -- to the fourth generation of overall volume is expected to rebound year because of the launch of its new the A3 line. The sedan is due in late this year and next year because of the ES medium-premium model in Russia. 2013. Sales of the new A3 three-door addition of key models: hatchback begin in August followed Daimler has invested 1.4 billion euros next year by the wagon and cabriolet to build a new generation of variants of the car.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Mercedes tops German ownership satisfaction survey

The Mercedes A class was named best compact in a recent vehicle satisfaction study in Germany.

Nick Gibbs Rounding out the top five were In a similar J.D Power study for the Mazda (798) and BMW and UK, Jaguar took the top spot with a For the second time in the three years Volkswagen, which tied for fifth with score of 828 out of 1,000 points, Mercedes-Benz was tops in vehicle 791 points each. rising from No. 3 in 2011. Jaguar ownership satisfaction among pushed ahead of last year's No. 1, consumers in Germany, according to a Owners were asked to score their cars Lexus, which finished in a tie with J.D. Power and Associates study. on vehicle appeal, ownership costs, Skoda for second place with 801 quality and reliability and dealer Mercedes rose to No. 1 in 2010, but points. Jaguar did not feature in the service satisfaction. Cars rated were slipped to second place last year German study due to an insufficient on average two years old. According behind Volvo. It is the third sample size. to J.D. Power, Mercedes scored consecutive year that a European particularly well in vehicle appeal as Honda was fourth in the UK survey maker has been voted best in well as vehicle quality and reliability. with Mercedes rounding out the top ownership satisfaction in Germany five. Mercedes was the only following an eight-year run of With a score of 634, Chevrolet was automaker to finish in the top five in Japanese manufacturers at the top. the worst-performing automaker of both studies. Like in Germany, the 25 included in the study. Alfa Mercedes scored 841 out of a possible Chevrolet finished at the bottom of Romeo was next with 731 points. 1,000 points in the survey, followed the UK study, which rated 27 by Toyota with 808. Third was In the segment categories, the automakers. In UK segment Mitsubishi (799), posting the biggest Mercedes A class was voted best categories, the Skoda Octavia was improvement after rising from 26th in compact, and the Toyota Yaris best voted best compact and the Honda 2011. Volvo dropped from No. 1 to subcompact. Jazz best subcompact. ninth.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Reuss' long-haul goal for GM: Keep customers coming back

Mark Reuss, General Motors' North Tires aren't; that's a big one. But our America president, says he's not fazed suppliers, I think, are pretty ready. by a decline in GM's U.S. market We're sort of a different company, I share this year. He says GM is staying think, in this way, too: We don't disciplined with lower fleet sales and swing production forecasts. We were tame incentives despite a slipping doing some crazy things. We were market share, while awaiting a calling incentives on a bimonthly basis product surge over the next 18 in the old company, if you can months, including the launch of imagine that. redesigned pickups and SUVs. What that does to the supply base is Reuss, 48, is trying to change a GM you end up getting a break-even point culture that emphasized short-term that you never hit because you're sales volumes at the expense of constantly toggling it, which is a very residual values and brand image. He's destructive business practice. We also pressing dealers to raise their don't do it ourselves, and we don't do customer-service efforts. And he says it with our suppliers. I think whatever a stair-step incentive program that capacity we say we would like to run, Buick and Chevrolet are running our suppliers are pretty good with it through July 2 has been crafted to be Mark Reuss is General Motors' North and we stick with it. America president fair and effective. At the dealer level, selling smaller cars Reuss spoke with Automotive News has always been an issue. Are dealers Right before we go on and turn the Editor Jason Stein, Industry Editor profitable doing it? Do you help them brand-new products, is it really good James B. Treece and Staff Reporter to be profitable doing it? to destroy all of that to make some Mike Colias. monthly thing? No. We're in it for the Yeah, we help them to be profitable. Where do you think the year is going long haul, and we know what's [With] the stair-step stuff, you can say to shake out for GM and the industry? coming. we're crafting that so that people aren't disadvantaged selling other We upped our industry [forecast] a If the market could get to 15 or 15.5 things than pickup trucks. little bit [on May 1, to 14 to 14.5 million by the end of next year, are you million from 13.5 to 14 million ready for that? We want people to sell and make previously]. I don't like sitting in here money at cars. We also want them to Absolutely. We've got a whole new and making excuses. We're focused redo their stores. We want them to be plant that we're bringing on line with on launch and what we're going to No. 1 in customer satisfaction and Equinox excess capacity, and that car do over the next year and a half. service. In two years, I want to be No. plant can make a lot of units. It has at We're going to turn the portfolio in 1. We rang the bell with Cadillac, and one time. If we're at full rates in North America. Everything we do in now we want to ring the bell with all Spring Hill, we're going to probably preparation for that is really sort of a the brands. do 850,000-plus four-cylinders out of short-term strategy. that plant, full song. We're not there What one thing do you think Chevy If we want to go make market share yet, but we could. dealers can do to get there in two and sell a lot of cars, we know how to years? Are your suppliers ready? do that.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Using the tools that we have in place and buy our cars and trucks. That's a to be tied to both vehicle quality and effectively to satisfy a customer. big deal. That's how I changed it. customer satisfaction and retention. We've got a lot of tools, and there are So a zone manager would have money Yes. All of them, at any level. The mix people that don't know all the tools at stake based on the customer will be a bit different on the UAW they have in their toolbox to use to satisfaction of his dealerships as well as upside for the folks in our plants, but satisfy a customer. customer-retention figures? it's all in there. It was unheard of here. I don't think it's our dealers. I think it's All of it. We've got a dashboard that's People do what you reward them for. our district managers and our field pretty clear. staff. We're sort of on a journey to Exactly, exactly, exactly. If you look at make sure that everybody knows how And the big-picture reason you're the way we were set up on a siloed to do it. We spend a lot of time on doing that is because something basis, there was an incredible amount our field staff, getting them into the wasn't working the way you wanted it of business suboptimization because mind-set that it's the No. 1 priority. to before? everybody had their own metrics. That I'm going to pay you because of Somehow we're all green [indicating It was a very short-term business customer satisfaction and service. each division had met its goals], but model based on pushing cars and That's what I'm going to pay you for. weirdly when we added it up, it was sales. This is a long-term deal. I plan pretty red. We've turned the whole place to that. on being here for a while and so I We're no longer pushing cars and refuse to get whip-sawed by the What's your outlook for Volt sales? production on you. Your No. 1 job is short-term reporting of a month's Wow, I'm like the 30-day guy no longer getting allocation take-up result. I refuse. [focused on short-term sales] on that on cars. We don't do any of that That is a monumental shift. For years one. We've got trucks and everything anymore. Now what are you going to we talked about where your sales were going out to California to fill it with do? You're going to be a trusted going to end each month. HOV [high-occupancy vehicles] and adviser to these dealers. then good things will happen. I think That was the conversation. Everybody is assigned a dealer, it's really turning around, though. It including myself. We go to that dealer And you saw that focus on volume feels good. By June, July-ish, we'll see. once a month and we enable that filter throughout the culture. Is there anything about the psyche of dealer. That's what we're doing, and We've got to try and make numbers, the Cadillac buyer that seems so we've got to get that spread so I don't get off of that. We're going promising for the ELR electric vehicle? throughout the whole network. to have things that we go after. But I've had people just anecdotally say, Have the roles of zone managers and when we don't make it because we "If you ever made a Cadillac one of field reps changed? Have the incentives haven't prostituted, destroyed -- call it these, I'd be all over it." changed in the way they are whatever you want -- the brand, but compensated? we've done everything we could in How do you eventually see the mix our power to make it with the right between the Cadillac ELR and Chevy Yes, we did that this year in North tools, then no one's going to be crazy Volt? America, for this year's compensation. with it. I'm not going to be. As part of the metric on how we all I really have no idea. What I do know get paid, including myself -- and this is So you're saying now that it doesn't is that we've got a fair amount of competitive stuff -- there's X percent matter whether GM employees work in Chevrolet and Cadillac dealers that on quality. Inside of that is customer North America on your design staff, as are dualed, which is a good thing. So retention both in service and sales. plant managers or as zone reps. Part of we don't have maybe the learning their compensation -- if they're at a curve we had on Volt from a dealer That is the ultimate result if we're certain level of the company -- is going training, explain-how-the-car-works doing all this right. People come back standpoint.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Ito leads tough turnaround at Honda

Hans Greimel -- An overhaul of the company's entire drivetrain technology. TOKYO -- Takanobu Ito took the helm of a teetering Honda Motor Co. in -- Global restructuring of product June 2009 with a curious mixture of development. pride and angst. -- New blood in design. The global financial storm was bearing -- Streamlined management aimed at down hard. And his predecessor, faster decision making. Takeo Fukui, was ruthlessly slashing costs and gutting some of Honda's This autumn's high-stakes launch of most promising programs, including the redesigned Honda Accord sedan -- the V-8 Acura and NSX sports car, to marking the U.S. debut of the new keep the company in the black. powertrain -- will test Ito's efforts.

"Feeling honored was 47 percent of More changes will follow, including a my reaction," President Ito recalled of next-generation Honda Fit small car being tapped for the top job. arriving next year. The Fit will be "Thinking 'this is going to be very produced through the company's tough' was about 53 percent." radically new regionalized product development process. Also in the Indeed, for most of his tenure, Ito has Honda Motor Co. President Takanobu works is a new design language struggled to right the ship. Ito: Battling back against big-company aimed at spicing up traditionally staid But now, after three years in office, disease styling. the blunt-talking executive who joined Motorcycle commuter Honda because he wanted to work on and critics snubbed nameplates such motorcycles and airplanes is ready to as the Honda Insight and CR-Z -- even Ito took the helm at age 55, relatively put his recovery plan into action. the once-bulletproof Civic small car. young for a Japanese CEO. Sweeping revival plans that he has Signs of big-company disease crept in; He was tapped by Fukui, then 64, as a quietly been slipping into place are Honda was chasing numbers but had hard-charging, think-outside-the-box taking hold. a tin ear for the market -- something upstart from a fresh generation. even company leaders admit. The overhauls encompass everything When asked to describe Ito during a from product planning and design to Honda had lost its mojo, and Ito knew press conference at the handover, technology. Ito hopes they will not it. Fukui said, "In a word, I would say only recoup lost momentum but 'tough.'" deliver record growth. "I understand when people say that Honda had not been doing very much A hands-on type known to commute Little did he know in 2009 how tough for two-and-a-half, three years," Ito, to work on his Honda CB1100 the turnaround would be. The yen's 58, said in a recent interview. "When motorbike, Ito likes to be in charge. climb to record-high, profit-eating people looked at it from the outside, When becoming president, he exchange rates and then last year's they found it difficult to understand famously took on another role as double-punch of natural disasters what was happening." head of Honda's development hammered Honda hard. subsidiary, Honda R&D Co. He has Yet behind the public facade of since given up that duty, but it was his And, worse, a company long praised inaction, Ito was busy building a second time in that post, speaking to for fleet-footed innovation was flat- comeback strategy. his penchant for being in control. footed on new product. Customers Hallmarks of his handiwork:

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But Honda has a hard climb ahead. It "That's what took shape in those transmission, will be the redesigned will take several years for the changes criticisms from Consumers Reports," Accord. to appear in the entire lineup and he says, referring to the influential Ito compares the impact of Earth trickle through the whole company. U.S. magazine's decision last year to Dreams to that of the famed CVCC Meanwhile, rivals have capitalized on leave the Civic off its list of engine project from the 1970s that Honda's slump to steal U.S. sales and "recommended" vehicles for the first cemented Honda's image as an market share, leaving Honda in catch- time in more than a decade. engine company first and foremost. up mode. Tech quest "In talking about the impact on our 'Losing the brilliance' Yet despite tight purse strings, Ito re- business, it is as important as CVCC," "Honda was getting this reputation invested in new technology -- Ito said. "This is very, very big." that we were losing the brilliance we especially drivetrain technologies -- to R&D rethink used to have. And that's something compensate for Honda's lackluster we were starting to feel ourselves," hybrid system and to match the Yet Earth Dreams is only one piece of says Toshinobu Minami, the new cutting-edge fuel-injection engines the plan. global head of exterior design offered by rivals. Ito also blew up the company's appointed by Ito in September. "We had to improve the fuel traditional Japan-led product "The company has gotten so large, economy of our cars," Ito said. "I development strategy. The new we were only pursuing efficiency. And immediately began laying the approach empowers regional probably during that time, we came preparations necessary to achieve this. engineers to tailor cars to local tastes to lose the uniqueness that the We tried to innovate our engines and and local procurement. market came to expect from us," he transmissions while also coming out Global nameplates will be developed says. "We probably started just with a fuller lineup of hybrid models." in parallel at r&d centers in six thinking, 'Oh, this should do,' and What ensued was a suite of six new operational regions -- Japan, North stopped setting high targets or goals engines, three transmissions and two America, China, Asia-Pacific, South for ourselves." hybrid systems known collectively as America and Europe. The cars will Indeed, Honda's obsession with size Earth Dreams. The common thread is share certain main components such manifested itself in the company's the addition of fuel-injection as engines and bodies, but other parts monthly sales and production reports. technology and continuously variable will differ according to local They invariably were headlined: transmissions. A 1.6-liter diesel engine specifications and regional "Honda sets all-time record for auto is also part of the mix, though there procurement possibilities. production." are no plans to bring that to the The first car getting this treatment is United States. The goal: to achieve Chasing record output was a key the third-generation Fit due next year. industry-topping fuel efficiency in internal benchmark. So was every vehicle class in three years. To speed localization, Ito in February maintaining healthy profits despite named Erik Berkman head of Honda repeated financial blows. Honda CFO Fumihiko Ike recalled that R&D Americas, leading design and dropping Formula One racing was a Honda has never suffered a full-year product development. He is the first key move in developing the Earth loss, operating or net. But extreme non-Japanese executive in the post. Dreams powertrains: "Previously we cost-cutting was needed to stay in the allocated between 600 to 800 people Ito also entrusted the United States black. That led Honda to kill the NSX, for Formula One racing. All those with the production and some quit Formula One racing, cut jobs at people are now involved with regular development responsibilities for the home and abroad, drop plans for a r&d." Acura NSX sports car. Ito, who minicar factory in Japan and go no- worked on the original all-aluminum frills on interior design. Ito unveiled the technologies before NSX that went on sale in 1990, last year's Tokyo auto show. The first New global interior design chief resurrected the car to inject more U.S. car with the new powertrain, a Yoshinori Asahi linked the financial excitement into the brand. He picked direct-injection engine mated to a crisis to compromises in the "sense of Ohio as the production site because newly developed continuously variable quality or perceived quality" on North America is expected to be its Honda vehicles. biggest market.

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Design do-over NSX concept shown at January's global sales, far less than at Toyota, Detroit auto show and the sleek Nissan, Subaru, Mazda or Mitsubishi. Ito turned next to design, a nagging Honda AC-X hybrid sedan concept sore spot. The Acura brand had yet to As a pioneer in localization, Honda shown at last year's Tokyo show. latch on to an inspiring look, and the has a deep bench of overseas interior of the latest Civic was panned Less red tape, more sales? engineering talent from which to as plasticky. draw. And it is buoyed by solid Outside design, Ito has also tried to earnings in its motorcycle business Last September, Ito moved aside cut red tape. Nobuki Ebisawa, 58, after seven years Ito's revival plan was delayed by a In April 2011, he eliminated a as global design chief to inject year; Honda lost most of 2011 management layer between him and younger blood. rebuilding from the devastating the division chiefs. Now Ito himself is earthquake in Japan and the massive Enter Minami, 44, and new interior in direct control of Honda's flooding in Thailand. design chief Asahi, who quickly shook automobile division as its COO, with things up. direct reports from only three unit Now, Ito vows that 2012 is the heads, instead of five. turning point. Work that had previously been handled solely by Ebisawa was split in Ito's overhaul is still a work in Indeed, despite the unflattering three. Minami handles exterior design; progress. The first Earth Dreams reviews of the latest Civic, the car has Asahi, now 48, gets the interior -- and technologies reach the market this been selling well in the United States, both are freed from matters of year only in some models, and the racking up its best May sales since budgets, personnel and materials. An new design language will debut even 2008. It was the No. 2 selling U.S. car administrator now does that. later. in May and is the third-best seller for the first five months of 2012. "The idea is to have an emphasis on Despite the benefits of the Earth speed so we can make quick decisions Dreams drivetrains, the fuel injection What's more, Honda ranked No. 1 in and reactions," Minami says. and CVT systems are less a leapfrog perceived quality among volume ahead of the competition than a move brands in the spring quality survey by Another big change: No more design to keep pace. ALG, the TrueCar Inc. subsidiary that evaluation meetings. sets residual values for the auto It is also unclear how either will be The new design chiefs banned them. industry. It has held that spot since received. In the past, Honda Instead, Minami and Asahi patrol the 2010. trumpeted the integrated motor-assist studios and make executive decisions mild hybrid system used in the Insight, Insiders say Ito also may unveil a on the fly about which sketches CR-Z and Civic hybrids as a game- midterm business plan, Honda's first should be kicked upstairs to Ito. changer, only to lose the first round of since 2010. Confident that his fixes "We just said, 'OK, evaluation the hybrid battle to Toyota and its are taking hold, Ito is forecasting a meetings and report presentation Prius. return to sustainable growth with meetings are prohibited,'" Asahi record global sales of 4.3 million units But Honda has key strengths, too. recalls. "You have to prepare so much this fiscal year, which ends March 31, presentation materials. It was a waste It was the first Japanese automaker 2013. of time." producing cars in the United States -- "At Honda we need to grow and at its Marysville, Ohio, factory in 1982. The two are now working on more want to grow," Ito said. "Honda has Honda has relatively low exposure to expressive design language for Honda never recorded global automobile auto exports from Japan. Exports and Acura that will debut in full for sales exceeding 4 million units. But in account for only 9 percent of Honda's the 2016 model year. Hints of the the next fiscal year, we definitely want more edgy look can be seen in the to do that and expand from there."

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Designers aim to get Honda back in sync with the times

Now Minami and Asahi concede that Honda thought wrong.

The two are working on a new design language under the banner "Exciting H Design," which should debut in full for the 2016 model year. Elements are seen in the following concepts:

-- The Honda AC-X hybrid touring sedan

-- The Honda Micro Commuter electric city runabout

-- The Honda EV-ster open-cockpit roadster Honda split up design authority to make Yoshinori Asahi, left, head of interiors and Toshinobu Minami head of -- The Acura NSX sports car exteriors. Styling points will include a grille-headlight combination that runs together in what Minami, 44, calls the Solid Wing Hans Greimel Face.

WAKO, Japan -- In recent years, designers at Honda Motor Sheet-metal treatment also will get more sophisticated, Co. have zigged as the market zagged. Now it is the task with a richer blend of hidden and exposed surfaces, of two young stylists, abruptly promoted last September, to Minami said. get Honda in sync with the times. Toshinobu Minami, a Inside the cabin, Honda will prioritize eye-catching man- young up-and-comer who penned the latest NSX concept, machine interface, dials and displays and will pack its cars was tapped to lead global exterior design. Yoshinori Asahi, with more telecommunications connectivity and safety a stylist with a penchant for American muscle cars, got the features. Honda's designers are too reliant on computers job as worldwide head of interiors. and driven by number and calculations, Minami The duo agree on one thing: Honda overestimated the complained. Now they will depend more on their five impact of the global financial crisis and misjudged senses, climbing into mock cockpits to assess roominess consumer tastes. The company's top market forecasters instead of blindly adhering to preset dimensions in had bet that customers would put a new premium on fuel- computer models. "We don't want to lose the clean efficient, no-frills cars. Enthusiasm for fuel efficiency didn't dynamism that we always had. But we want to add more fade. But customers flocked instead to cars sporting flavor," Minami said. In recent years, younger stylists have upscale features and bold, emotional styling. Upstart grown frustrated with Honda's less-is-more look, the new brands such as Hyundai and Kia began offering high trim bosses said. But changing that mind-set will still take some and affordable prices. nudging.

"Against that, maybe our minimalist, efficiency-based "Designers tend to get more conservative as they work focus of style may have had a bit of a gap with what the from their initial ideas to the final drawing. They try to be times were dictating," Asahi, 48, said during a recent safe," Asahi noted. "It takes courage for them to show interview of the two stylists at Honda's global design what they think is their true design. We need to give them center just outside Tokyo. He added: "We thought people that courage." would go for more simple things after the financial crisis."

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Car cutaway: Faurecia, Bosch help make the new Peugeot 208 greener, roomier

James Clark which offers fuel economy as low as France; front and rear bumpers for the 3.2 liters per kilometer (73.5 U.S. version assembled in Slovakia; as well With help from Robert Bosch and mpg). By using Bosch's direct injection as various interior and seat Faurecia, Peugeot has cut weight and systems, 208s with Peugeot's 1.0-liter components that help to contribute improving engine efficiency in the gasoline engines have a top fuel significantly to the interior offering a new 208. The subcompact offers CO2 economy of 3.7 liters per kilometer 500mm increase in legroom for the emissions as low as 87 grams per (63.6 U.S. mpg) and CO2 emissions as rear passengers and 15 liters of extra kilometer in variants with its 1.4-liter low as 99g/km. trunk space compared with the 207. diesel compared with a low of 110g/ These gains come despite the overall km for versions with the 1.4-liter Faurecia supplies various emissions vehicle being 70mm shorter and diesel in the subcompact's control systems to the 208 including 10mm shorter than the 207. predecessor, the 207. Robert Bosch the diesel particulate filter. In addition, supplies the common-rail diesel- the French partsmaker sources the injection system for the 1.4-liter unit, front bumper for 208s assembled in

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Despite slowdown, suppliers bet on China

Charles Child Growth in China highlighted a good for the country's rapidly developing 2011 for suppliers. In the Automotive industry. Global suppliers, attracted by stunning News list of the top 100 global growth prospects, are shrugging off suppliers, 68 posted double-digit this year's slowdown in auto sales in gains from 2010, driven in part by China and investing heavily in the North America's rebound from the world's largest auto market. recession. The only troubled group in Continental AG, for instance, plans to the top 100 was Japanese suppliers, hire 5,000 workers in China by year who endured a slump caused by the end. It has 16,000 now. March 11 earthquake.

Magna International Inc., too, is all in. Growth projections in China are In 2014, the company plans to compelling. Analysts and industry The result was a joint venture signed operate 28 plants in China, eight executives expect light-vehicle sales to in 2009 between BorgWarner and 12 more than now. In 2001, Magna had reach 30 million by 2020, more than Chinese automakers called just one plant in the country. double the 14.5 million sold in 2011. BorgWarner United Transmission Systems Co. to produce BorgWarner In a global industry still recovering In other words, in eight years China's clutch modules and control modules from the Great Recession, China auto market is tracking to match the for dual-clutch transmissions. offers near-certain prospects for size of today's European and U.S. robust growth. markets combined. The joint venture plans to start production this year. Because a growing number of autos As they plan ahead, the suppliers are are built on global platforms, suppliers unmoved by the sales slowdown in BorgWarner, No. 27 on the list, can gear up swiftly in China by China. In the first four months of this produces turbochargers, clutch producing the same parts that they year, sales of passenger vehicles rose modules, variable-valve timing make elsewhere. just 2 percent, according to the China mechanisms, transfer cases and other Association of Automobile powertrain parts. But suppliers must be nimble, for Manufacturers. example, to work with powerful Meanwhile, BorgWarner's government officials in China and BorgWarner CEO Tim Manganello turbocharger rival Honeywell, No. 58 help domestic automakers fill gaps in expects his business in China, which on the list, plans a second turbo plant engineering expertise. accounts for about 6 percent of in China that will start production company sales, to grow an average of early next year. Total annual turbo China's central government decreed 30 percent per year over the next five capacity in China will be 2.5 million in the first quarter that government years. BorgWarner's global sales last units. officials must buy vehicles from year were $7.11 billion. domestic automakers. That's bad Honeywell's r&d center in Shanghai news for Audi, the brand of choice for The company devised a creative has about 1,000 engineers. officials, but possibly good news for strategy to produce transmission parts suppliers, such as Magna and Johnson in China that illustrates the Engineering cooperation Controls Inc., that can provide importance of central-government Johnson Controls Power Solutions, elaborate rear seating areas preferred policy-makers there. which produces lead-acid and lithium by chauffeur-driven officials. In 2008, the company advised the ion batteries, is investing more than government on the best transmissions $1 billion to boost manufacturing capacity in China.

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It expects to produce about 17 million Magna, No. 4 on the global list of top Toyota-affiliated Denso Corp., Japan's batteries this year and as many as 30 100 suppliers, expects its sales in biggest auto parts supplier, is beefing million in 2017 -- about 70 percent China to double from last year to up r&d in China to meet surging for the aftermarket and 30 percent for about $1.5 billion in 2014. Magna demand. automakers. None of the batteries will produces a vast range of parts, In April, Denso, No. 2 on the global be exported, the company says. including seats, body and chassis list, said it will spend andyen;7.2 parts, electronics, and electric systems. Kim Metcalf-Kupres, vice president of billion, or about $91.5 million, to global strategy for the unit of parent Chinese consumers are increasingly open a larger technical center in Johnson Controls, predicts China in aware of -- and want -- the advanced Shanghai in June 2013 and double 2020 will be the largest market for technology that automakers are the size of its local engineering team auto batteries, and thus her lavishing on autos sold in Europe and to 500 people by 2016. The new tech company's largest opportunity. North the United States, such as navigation, center will get a wind tunnel. America is the largest market now. clean diesels and stop-start The Japanese supplier is also field- technology. Parent Johnson Controls, No. 7 on the testing some of its more advanced global list, also produces seats, Denso's high-tech technology there. complete interiors, interior electronics approach In March, it began trials of its vehicle- and other parts. Continental, No. 3 on the global list, to-vehicle and vehicle-to-infrastructure Metcalf-Kupres says domestic says it is marshaling products and wireless communication system. The automakers typically need little services to address four important technology, already being tested in engineering assistance to adapt trends in China -- safety, the the United States and Japan, aims to standard lead-acid batteries to their environment, information and minimize congestion and accidents, vehicles. affordability -- that would be right at two big problems on China's roads. home in any fully developed market. But it's a different story for fuel-saving Denso has 22 production companies stop-start technology, in which But Chinese shoppers still have in China making such products as air- advanced lead-acid batteries, called preferences, and global suppliers conditioning systems, engine control absorbed glass-mat batteries, work operate many technical centers there components, fuel injection with sensors and other devices to stop to modify global autos for local tastes. components, alternators, starters and the engine, say, at stoplights. car navigation systems. It also has a For instance, Germans prefer hard and local software engineering unit. Johnson Controls engineers typically precise-feeling buttons and controls, work closely with engineers at while Chinese prefer soft buttons, Hans Greimel contributed Chinese domestic automakers in says Frank O'Brien, executive vice China to integrate the technology into president of Magna's Asia Pacific their cars, Metcalf-Kupres said. region.

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China light-vehicle sales jump 23% in May; inventories continue to swell

Automotive News China industry is becoming more stable," Dealers are less optimistic. Dealership Yao Jie, the association's deputy inventories bloated to more than a China's light-vehicle sales continued secretary general, said in Beijing. "For 60-day supply by the end of May, to pick up in May, with deliveries of the first time this year, accumulative compared with more than 45 days at cars, SUVs, microvans and sales and production have exceeded the end of April, Luo Lei, deputy multipurpose vehicles rising 23 that of a year earlier." secretary general of the state-backed percent year-on-year to nearly 1.3 China Automobile Dealers million units, according to the China Strong Japanese sales Association, said in an interview last Association of Automobile Toyota Motor Corp. and Honda Motor week. The glut at dealerships, which is Manufacturers. Co. led the sales surge as they leading to price cuts, is unsustainable, But analysts warn that vehicle recovered from the effects of last he said. inventories are building up at China's year's natural disasters. "The picture we have is very different dealerships, as automakers produce Toyota's China sales in May more than from what the automakers are cars and trucks faster than dealers can doubled to 78,700 units. Honda painting," Luo said. "The sales sell them. Distributors will be reported a 92 percent surge and increases they're reporting are pressured to sell vehicles at a loss to Nissan Motor Co.'s sales increased 20 achieved by loading dealers with meet automakers' sales targets. percent. stock." May's sales growth was led by the Last year, production at the Japanese China's cabinet agreed last month to SUV segment. Nationwide, sales of automakers was hurt by the revive financial incentives for SUVs last month surged 58 percent to earthquake and tsunami in Japan and consumers to trade in their cars to 162,600 units. floods in Thailand. The Japanese help increase demand, a government Other segments also did well. Sales of automakers' year-to-year sales official said last month. Separately, cars jumped 20 percent to 893,300 increase looked strong last month the finance ministry said on May 29 units; microvans, 16 percent to because sales in May 2011 were that the government will spend as 185,700 units; and MPVs, 11 percent weak. General Motors' sales rose 21 much as 2 billion yuan a year to to 40,300 units. percent in May, led by demand for its develop electric cars and plug-in Wuling minivan and Chevrolet vehicles to reduce fuel consumption. For the first five months, light-vehicle models. Ford Motor Co. had its sales in China increased 5 percent to But Dong Yang, deputy secretary passenger vehicle deliveries gain 23 6.3 million units, according to the general of the manufacturers' percent. manufacturers' association. association, said at the briefing he Kevin Wale, head of GM's China was unaware of stimulus policies for While May sales looked strong, operations, said in a May 31 interview the automotive industry "anytime automakers disclose only the number that he's "pretty optimistic it won't soon." One of the first steps may of vehicles sold to Chinese dealers, take much" to bring Chinese come as a government program to not consumers. Those sales figures consumers "back into buying mode." encourage sales of smaller, fuel- don't always offer a true picture of efficient cars, said Kevin Tynan, a consumer demand. "I can't see anything in the Chinese Bloomberg Industries analyst. Said environment that's leading to an Carmakers and the state-backed Tynan: "You will get some clear unusual decline in consumer manufacturers' association say they're signals, some yellow lights, before you confidence," he said. confident demand is picking up. get to production cuts." "There are clear signs indicating the

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Shanghai GM expands annual production capacity 32% to 1 million

Automotive News China on May 30, doubling its annual Shanghai GM is expanding the capacity to 480,000 units, according Shenyang factory. It also plans to Shanghai General Motors Co., to the company. build a new plant capable of making General Motors' passenger vehicle 300,000 vehicles a year in Wuhan in joint venture with SAIC Motor Corp., The Yantai plant produces the central China's Hubei province. raised its annual production capacity Chevrolet Epica, New Sail and Aveo as to 1 million units, up from 760,000 well as the Buick Excelle. In the first fourth months, Shanghai units, after completing an expansion GM sold 462,379 Buick, Chevrolet Shanghai GM has a second plant in at one of its three plants. and Cadillac models in China, up 6 Shanghai and a third plant in percent year-on-year, according to Shanghai GM's expanded Yantai Shenyang in northeast China's LMC Automotive. assembly plant in east China's Liaoning province. The two plants can Shandong province started production build 520,000 vehicles a year.

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Europe tech center part of Great Wall's additional $782 million r&d investment

Automotive News China By 2015, Great Wall expects to double In February, the company opened a its engineering payroll to more than plant in Bulgaria to assemble vehicles Great Wall Motor Co. will invest an 10,000 employees. It also plans to hire from semi-knockdown kits as well as additional 5 billion yuan ($782 million) 1,000 engineers from overseas to staff complete knockdown kits imported in r&d over the next five years, its technical centers. from China. Chairman Wei Jianjun said. Great Wall, which is based in Baoding Great Wall also has built 10 SKD and The company plans to build in north China's Hebei province, sold CKD plants in Southeast Asia, the technology centers in Europe, Japan more than 487,000 vehicles last year. Middle East and Africa. and the United States, Wei told Of those, 83,000 vehicles were journalists at a technology show exported, according to the organized by the company. automaker. Its main export markets He did not provide a time frame for include Russia, South Africa, Australia launching the new facilities. and Chile.

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VW extends warranty in China for vehicles with direct shift gearbox

Automotive News China The warranty has been extended to Volkswagen and Skoda vehicles 10 years or 160,000 km, up from four equipped with the gearbox have Volkswagen Group has introduced a years or 150,000 km, according to a generated a large number of 10-year warranty for vehicles sold in statement from Volkswagen and its complaints. Chinese consumers China to address numerous customer joint ventures. typically complain about abnormal complaints about malfunctioning noises and vibrations, as well as direct-shift gearboxes. The extension applies to all difficulty in shifting gears. Volkswagen and Skoda vehicles In China the automaker's Volkswagen equipped with a dual clutch Volkswagen has a transmission plant and Skoda brands use six-speed and transmission produced no later than in the northeast China port city of seven-speed versions of this gearbox, the end of this year, according to the Dalian that produces a seven-speed which also is known as a dual clutch statement. dual clutch transmission. transmission.

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SAIC board OKs sale of 1% JV stake to GM

Automotive News China

Shanghai Automotive Industry Corp. said it has approved selling back to General Motors Co. 1 percent ownership in their joint venture for $91.4 million (580 million yuan).

SAIC disclosed terms of the deal, which included yearly interest of 4.86 percent, Friday on the Shanghai Stock Exchange Website. SAIC's board approved the transfer on May 24, said GM spokeswoman Lori Arpin.

The deal, which still requires Chinese government approval, venture would be an "extremely important" development restores GM's ability to have equal say on operational to help GM roll out global platforms and coordinate decisions in China, three years after it ceded control of the product strategy. venture by selling a 1 percent stake for $85 million. The deal also would pave the way for the two partners to GM, which sold more vehicles worldwide than any other deepen ties and enhance GM management's credibility, carmaker last year, wants to double deliveries in China to 5 Jonas wrote in an April 19 report. million vehicles by 2015. GM, whose first-quarter profit slid 61 percent as losses at The two partners said in April they were close to a deal its European unit widened, increased deliveries in China 9.4 involving the split of Shanghai GM into two units. Both partners would hold equal stakes in the operations unit, percent to 972,369 vehicles during the first four months of while SAIC retains a 51 percent majority in the sales arm. the year.

That would allow the Chinese company to include the The partnership began with equal ownership between the venture's revenue in its financial statements, the companies two companies. In 2009, GM sold its stake in Shanghai said in April. GM as the Detroit-based parent underwent bankruptcy reorganization in the United States. Morgan Stanley analyst Adam Jonas said at the time that GM's ability to regain equal control of the joint

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Why Hyundai and Kia could catch China's market leaders

Hyundai and Kia will sell 1.3 million vehicles in China this year. (Photo: Reuters)

Michael Dunne Most remarkable of all: They have Before tying the knot with Hyundai in achieved record sales and market 2002, Beijing Auto had dragged two At last year's Shanghai auto show, share in China despite several earlier joint ventures with Chrysler and Volkswagen CEO Martin Winterkorn challenges that could have easily Isuzu through years of confrontation was captured on tape behind the sidelined them. and eventual failure. wheel of a Hyundai, impatiently asking his aides: "How come they So, what are the key ingredients in When a senior Korean executive [Hyundai] can do it?" this stunning Korean success? And recently was asked how Hyundai had can the Koreans continue to work managed to avoid the kind of rocky That's a question more and more around some lingering liabilities? relationship that doomed the earlier people are asking these days because joint ventures, he shook his head and the Koreans consistently do things Ironically, Hyundai and Kia have said: "No, no... we fight each other all that don't look possible. achieved remarkable heights in China of the time, too." despite some serious shortcomings. The latest example? Hyundai and Kia Kia management, for its part, has had will sell 1.3 million vehicles in China Difficult partners its hands full managing a tricky three- this year, making it their number one For starters, let's look at partner way alliance with Dongfeng and market worldwide. relations. Hyundai's partner is Beijing Yueda in which the Chinese partners The Korean duo has a larger market Automotive Industry Holding Corp., a occasionally refuse to speak to one share than Toyota, Nissan or Honda in state-owned enterprise notorious for another. the Middle Kingdom and is closing in its stubbornness and high-handed Beyond the complicated partnerships, on Shanghai General Motors. ways. there is the frailty of the Koreans'

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brand image. At last month's Beijing brand power, wobbly partnerships For the moment, market leaders Auto Show, a senior Hyundai and iffy customer service? Volkswagen and General Motors are executive from Seoul asked his China doing well. In the first quarter, By offering a vast array of products, staff a question loudly enough to be Shanghai GM sales rose 9 percent some fresh designs and very attractive heard by people standing nearby: year-on-year, while VW brand sales prices. "Why are there not more people increased 12.5 percent. coming to look at our cars?" Chinese customers can choose from But Hyundai is preparing another 19 different Hyundai models and 16 It was not a rhetorical question. For assault. In July, the company will open individual Kia models, the majority of Chinese customers, Hyundai and Kia a new assembly plant, adding which are produced in China. do not offer the same electric appeal 300,000 units of capacity this year associated with European and At Hyundai, the perennial best-selling and ramping up to 400,000 units in American brands. Elantra is getting some strong support 2013. That facility plant will produce in 2012 from the new Verna and the Elantra, which should trigger a In part, that's because the reliability of Sonata YF models. Meanwhile, Kia is fresh kick in sales. Korean vehicles are still seen as a enjoying a surge in demand for its K2 notch lower than the likes of Honda Taking the same approach that's and K5 models, both of which feature and Toyota, though their quality is worked in America and Europe - head-turning new designs. generally superior to U.S. and aggressively producing and selling European makes. The Koreans also have adopted a quality vehicles - the Koreans are on clever pricing strategy. track to set new China sales records in To make things worse, Korean 2012. executives are so concerned about Hyundai and Kia sell current- and last- poor service in their Chinese generation models in China at the And if Hyundai and Kia can find a way dealerships that Beijing Hyundai is same time, channeling the newest to lift their brand image and improve investing millions of dollars to improve offerings to affluent coastal residents service, VW and GM had better take the customer experience. and the older models to inland cover. markets. Fresh designs, low prices Michael Dunne is president of Dunne This helps reduce production costs and Co. and author of American So, how do Hyundai and Kia convince while permitting more aggressive Wheels, Chinese Roads: The Story of Chinese consumers to purchase so pricing. Combined sales through the General Motors in China. many cars despite their pedestrian first quarter reached 310,000 units, up 7 percent from a year earlier.

europe.autonews.com/GlobalMonthly June 2012 AUTOMAKERS Volume 01 | Issue 04

Chery plans venture with Jaguar Land Rover

Automotive News China Chery and Jaguar Land Rover signed If the ministry approves the project, an agreement in March to form the Chery and Jaguar Land Rover still Chery Automobile Co. has applied for joint venture. need permission from China's government permission to establish a National Development and Reform joint venture with Jaguar Land Rover The ministry will assess the plant's Commission, the central economic in China with an investment of 12.1 likely impact on Changshu's agency. billion yuan ($1.9 billion). environment. China requires environmental reviews before allowing Last year, Land Rover sales in China The new plant, to be constructed in automakers to build new assembly jumped 68 percent to 34,993 units, Changshu in east China's Jiangsu plants. while Jaguar sales soared 58 percent province, would produce up to to 3,897 units, according to LMC 130,000 vehicles a year, according to The ministry is expected to issue a Automotive. All of those vehicles were the Web site of China's Ministry of ruling later this month. imported. Environment Protection.

europe.autonews.com/GlobalMonthly June 2012 RETAIL Volume 01 | Issue 04

Pang Da, Lei Shing Hong to open 12 Mercedes stores in China

Automotive News China retailer, is China's fourth-largest Lei Shing Hong will hold a 55 percent dealership group. stake in the joint venture and Pang Da Two large dealership groups, Pang Da will hold 45 percent. Automobile Trade Co. and Lei Shing According to Pang Da, the companies Hong Ltd., signed a letter of intent will set up a joint venture to run new In 2011, Pang Da sold 430,000 this week to jointly open 12 dealerships that will open in 12 cities vehicles, generating sales of 55.5 Mercedes-Benz stores in north China. in Hebei, Shandong and Shanxi billion yuan ($8.8 billion). Lei Shing provinces and the Inner Mongolia Hong sold 81,233 vehicles with Pang Da is China's second-largest region. revenues of 47.4 billion yuan, dealership group by revenue while Lei according to the China Automobile Shing Hong, a major Mercedes Dealers Association.

europe.autonews.com/GlobalMonthly June 2012 RETAIL Volume 01 | Issue 04

Lamborghini to add 6 dealerships in China

Christina Rogers While the automaker's sales are off to In China, industry sales of SUVs have a slow start in China, he said he soared as automakers introduce new Lamborghini plans to add six stores in expects double-digit sales growth in models. China this year for a total of 20 Asia this year. dealerships -- a sign of its If Lamborghini receives approval from commitment to the market despite Lamborghini could receive another corporate parent Audi AG, the Urus flat sales this year. boost in China in a few years if it would go on sale late in 2015. The decides to build the Urus SUV Italian automaker believes the SUV In an interview with Automotive News concept, which it unveiled last month would help it double global sales to Europe, Lamborghini CEO Stephan at the Beijing auto show. 5,000 units a year. Winkelmann was optimistic about Lamborghini's prospects despite flat sales in China for the year to date.

europe.autonews.com/GlobalMonthly June 2012 RETAIL Volume 01 | Issue 04

europe.autonews.com/GlobalMonthly June 2012 GREEN CARS Volume 01 | Issue 04

BYD: Fatal car crash, fire won't affect EV program

Automotive News China citing a notice from the local traffic powered vehicles might burn," the police department. company said in its statement. BYD Co. says a deadly car crash last week that caused one of its e6 electric After the collision, the electric taxi The accident sent BYD's shares vehicles to catch fire won't affect its swerved, hit a tree and caught fire. tumbling on the Hong Kong and development of EVs and plug-in The taxi driver and his two passengers Shanghai exchanges Monday amid hybrids. died in the accident. fears about the EV's safety. But share prices largely recovered on Tuesday on "The company strongly believes that Local police are investigating the both markets. this incident will not have any cause of the fire. BYD stressed that negative impact on the development the EV and battery pack comply with BYD, of Shenzhen, is partly owned by of our new energy industry," BYD said regulatory requirements. U.S. billionaire Warren Buffett. As in a statement Tuesday. China's leading EV manufacturer, it "Any vehicles undergoing multiple makes the e6 electric car, the F3DM On May 26, an e6 taxi was hit from crashes and spinning like the one in plug-in hybrid and the K9 electric bus. behind by a Nissan GT-R sports car the May 26 traffic accident will result driving 180 km per hour in the south in great danger for the passengers China city of Shenzhen, BYD said, and driver, and even gasoline-

europe.autonews.com/GlobalMonthly June 2012 LEGISLATION Volume 01 | Issue 04

U.S. unveils blueprint to tackle driver distraction

WASHINGTON -- Transportation The funding builds upon the the agency's first-ever set of voluntary Secretary Ray LaHood said today the department's efforts to reduce driver guidelines on distracted driving. agency isn't looking at new distraction. Three years ago, LaHood The guidelines cover vehicle regulations to address distracted launched a campaign to raise equipment only -- not handheld driving, but rather is calling on awareness about the dangers of phones -- and recommend that automakers to step up voluntary distracted driving. He's even gone as automakers disable certain apps, such efforts to combat risks with new far to label it an "epidemic" and says as Facebook, Twitter and Internet technologies and education. that deaths attributed to driver browsers, unless a car is pulled over. distraction are "100 percent" LaHood, who's made distracted preventable. Voice operation of those features isn't driving a top automotive safety addressed but will be later. For now, priority of the Obama administration, His efforts have prompted 39 states NHTSA is still studying hands-free said he's met with the CEOs of and the District of Columbia to ban technology and is expected to release automakers and feels confident texting while driving and brought an analysis later this year. "they're committed to safety." awareness to a danger that some auto safety experts say is becoming more "The data is not very strong on hands- He even praised Subaru of America acute as in-car and portable free," said Ron Medford, the deputy for a TV ad that highlighted the technologies advance. NHTSA director. He said the agency is dangers of driver distraction. The now focusing on what it knows is a commercial featured a father talking In 2010, distracted driving deaths danger and that's texting or talking to his daughter about the risks of totaled 3,092, but NHTSA believes the on handheld devices while driving. using a cell phone while driving. total could be higher because drivers are often unwilling to admit to the Major automakers, have pushed back, "We're not considering a rule," behavior and many crashes lack arguing that the feds' guidelines are LaHood said. "We're looking at things witnesses. The proliferation of too restrictive and need to give more that have worked. We think good communications technology behind leeway to certain features, such as laws work. We think good the wheel has often left regulators images and moving maps. enforcement works." struggling to keep up. The Alliance of Automobile He also urged Congress to enact In December, National Transportation Manufacturers, which represents 12 stricter laws on distracted driving and Safety Board Chairman Deborah automakers, would like NHTSA to possibly a nationwide ban on cell Hersman, whose board operates better align its guidelines with the phone use, although when pressed he independently, called for a ban on all alliance's own recommendations didn't offer specifics, saying only it phone use while driving, even with developed in 2002-03. was his personal preference. hands-free devices. Responding to the Alliance's "I don't have a bill to hand to "We have got to dispel the myth of comments, LaHood said automakers Congress," he added. multitasking," Hersman said later in don't dispute that driver distraction is LaHood's comments came as his February. "We are still learning what a serious safety issue and have taken department unveiled a new the human brain can handle. What is initiatives to address it. He also "blueprint" to end distracted driving the price of our desire to be mobile stressed that the guidelines are and announced $2.4 million in federal and connected at the same time?" voluntary, not mandatory. funding for California and Delaware In February, the National Highway to help them step up enforcement. Traffic Safety Administration proposed

europe.autonews.com/GlobalMonthly June 2012 COMMENTARY Volume 01 | Issue 04

The profit windfall is over

Game on. Last May was the first month the production disruption from the March That's the real lesson from May auto Japan earthquake started to affect sales. Forget the huge percentage U.S. dealer supplies. gains from Toyota, Honda and Subaru. And all U.S. automakers saw those Forget the May market share swing bare Toyota and Honda dealer lots as from Detroit back to Japanese brands. a signal to throttle back on incentives. Forget Wall Street analysts shouting With supplies suddenly tight, dealers "Disappointing!" because industry stopped chasing low-margin deals. sales were merely steady and missed The margins on the remaining deals their frothy guestimates. got fat.

Forget that 26 percent May sales The pain from the quake was intense. jump. But in the U.S. marketplace, those big margins were welcome. Because they're not surprises. Jesse Snyder is senior writer for Automotive News Anybody really think Toyota and But May results confirm it: The market Honda wouldn't outsell last May, is restocked. Consumers have full when their cupboards were bare? The real news: The U.S. market is fully choice again. competitive again. And that means And it's back to normal competition. the high-profit interlude is over.

europe.autonews.com/GlobalMonthly June 2012 Volume 01 ❙ Issue 04

brought to you courtesy of EUROPE SALES BY MODEL, APRIL & 4 MONTHS www.jato.com

April April 4 mos. 4 mos. April April 4 mos. 4 mos. 2012 2011 2012 2011 2012 2011 2012 2011 V8/V12 Vantage ...... 62 89 301 340 458 Italia ...... 153 163 685 582 DBS ...... 20 35 91 157 California...... 85 119 229 369 Rapide...... 26 66 105 207 FF ...... 59 – 236 – Other...... 53 39 238 142 599 GTB Fiorano ...... 9 46 41 167 ASTON MARTIN ...... 161 229 735 846 Other...... 14 11 29 45 Niva/Taiga ...... 148 161 672 1,140 Total Ferrari...... 320 339 1,220 1,163 Other...... 24 41 87 215 500 ...... 12,457 14,262 50,922 57,993 AVTOVAZ...... 172 202 759 1,355 Panda ...... 17,353 16,822 65,660 72,514 1 series ...... 12,138 10,661 50,811 44,057 Punto ...... 14,724 18,483 54,396 85,064 3 series ...... 17,475 15,022 54,835 54,000 Albea...... 191 1,246 849 3,540 5 series ...... 10,193 12,506 42,163 52,278 Linea ...... 3,032 3,519 9,066 8,247 7 series ...... 483 741 2,867 3,404 Bravo...... 1,956 2,749 7,344 14,624 Z4 ...... 926 1,131 3,350 3,667 Sedici...... 668 1,618 2,654 5,333 6 series ...... 655 450 2,701 1,333 Freemont...... 1,885 – 8,383 – X1 ...... 5,274 6,540 22,113 26,994 Fiorino/Qubo ...... 1,551 1,848 6,081 7,218 X3 ...... 6,499 4,605 24,912 16,105 Doblo ...... 820 1,711 3,495 6,184 X5 ...... 1,751 2,189 7,456 8,606 Ducato ...... 3,278 3,630 8,325 7,526 X6 ...... 1,083 1,173 4,055 4,568 Idea...... 82 852 1,648 3,190 Other...... 86 64 258 213 Total BMW brand ...... 56,563 55,082 215,521 215,225 Other...... 289 586 948 2,627 Mini...... 8,518 9,078 34,732 35,900 Total Fiat brand ...... 58,286 67,326 219,771 274,060 Countryman ...... 4,398 3,995 17,487 15,706 Ypsilon ...... 5,554 4,099 22,340 18,052 Total Mini ...... 12,916 13,073 52,219 51,606 Musa...... 1,897 2,179 5,722 7,841 Phantom ...... 7 6 42 51 Delta ...... 1,151 1,833 4,993 8,012 Ghost ...... 25 29 114 140 Thema...... 114 – 594 – Other...... 1 2 2 2 Voyager...... 392 – 1,734 – Total Rolls-Royce ...... 33 37 158 193 Other...... 3 20 8 122 BMW AG ...... 69,512 68,192 267,898 267,024 Total Lancia ...... 9,111 8,131 35,391 34,027 Maybach ...... 1 6 13 16 GranTurismo ...... 44 88 206 339 A class...... 7,268 3,037 25,674 18,649 GranCabrio ...... 42 57 145 172 B class ...... 9,413 7,573 37,369 31,051 Quattroporte ...... 12 27 49 117 C class...... 12,996 13,758 56,334 47,735 Other...... 5 4 8 7 E class ...... 8,880 11,582 37,280 45,146 Total Maserati...... 103 176 408 635 S class ...... 817 932 2,867 3,682 Other ...... 74 88 230 238 CLS ...... 1,070 1,322 4,460 5,607 FIAT S.P.A...... 76,641 88,791 293,146 363,036 CLC...... 4 284 7 1,965 FIAT-CHYRSLER ...... 79,280 91,347 304,435 373,197 SLK ...... 2,062 1,829 7,010 4,138 Ka ...... 4,684 5,780 25,708 29,101 SL ...... 571 115 1,055 500 Fiesta...... 27,365 30,108 121,335 137,152 SLS AMG...... 135 209 569 859 Focus...... 21,149 23,649 99,630 99,810 R class ...... 186 351 882 1,420 Fusion ...... 996 1,248 4,839 6,608 GLK...... 2,151 2,812 9,205 10,517 Mondeo ...... 6,299 6,778 27,151 32,708 Vito/Viano ...... 2,457 2,601 8,931 9,351 C–Max/Grand C–Max ...... 10,036 11,178 42,559 45,641 Sprinter ...... 435 475 1,642 1,741 S–Max ...... 3,972 3,984 16,271 17,591 M class ...... 2,551 1,501 10,287 6,908 Galaxy ...... 2,369 2,306 9,250 9,431 G class...... 121 154 565 596 Kuga ...... 4,787 6,096 22,910 25,680 GL ...... 125 159 532 785 Transit/Tourneo ...... 1,192 1,627 5,370 5,371 Other...... 182 214 549 787 Other...... 204 268 610 1,131 Total Mercedes-Benz ...... 51,424 48,908 205,218 191,437 Total Ford brand...... 83,053 93,022 375,633 410,224 ForTwo ...... 6,937 7,242 25,647 27,967 Lincoln ...... – 1 2 5 Other...... – 12 1 26 Mercury ...... – – 1 3 Total Smart ...... 6,937 7,254 25,648 27,993 FORD MOTOR ...... 83,053 93,023 375,636 410,232 DAIMLER AG ...... 58,362 56,168 230,879 219,446 Geely ...... 81 56 299 198 DR1...... 4 156 27 1,187 C30...... 672 1,294 3,685 5,798 DR5...... 22 65 155 305 S40 ...... 942 980 4,019 3,988 Other...... 16 10 108 60 V50 ...... 4,197 3,627 15,326 15,979 DR MOTOR COMPANY ...... 42 231 290 1,552 S60 ...... 1,461 1,971 6,612 9,044 Ypsilon ...... 174 – 645 – V60 ...... 3,621 3,890 14,911 14,112 Delta ...... 31 – 195 – V70/XC70 ...... 3,785 4,223 16,693 16,408 300C...... 6 68 35 323 S80 ...... 405 459 1,817 1,936 Grand Voyager/Town & Country 28 458 247 1,878 Other...... 16 9 53 80 C70...... 311 607 1,179 1,531 Total Chrysler brand...... 255 535 1,175 2,281 XC60...... 4,511 4,322 17,733 18,629 Caliber...... 2 165 17 546 XC90...... 708 1,192 3,563 4,592 Journey ...... 6 85 23 602 Other...... 33 34 131 126 Other...... 89 34 263 156 Total Volvo ...... 20,646 22,599 85,669 92,143 Total Dodge ...... 97 284 303 1,304 GEELY GROUP ...... 20,727 22,655 85,968 92,341 Compass ...... 805 549 3,574 908 Buick ...... – – 2 2 Patriot ...... 3 321 70 1,715 Cadillac ...... 31 41 175 220 Wrangler ...... 610 521 2,631 2,218 Matiz/Spark ...... 4,766 5,765 19,570 24,249 Cherokee/Liberty ...... 48 186 267 802 Aveo ...... 5,794 3,320 20,998 15,030 Grand Cherokee ...... 816 155 3,253 913 Cruze ...... 3,660 3,125 13,478 11,927 Other...... 4 5 14 20 Captiva ...... 2,380 1,732 8,932 6,744 Total Jeep ...... 2,286 1,737 9,809 6,576 Orlando...... 2,558 2,368 9,276 6,133 Other ...... 1 – 2 – Other...... 234 209 756 1,870 CHRYSLER GROUP ...... 2,639 2,556 11,289 10,161 Total Chevrolet ...... 19,392 16,519 73,010 65,953 MiTo ...... 2,341 3,765 10,486 16,419 GMC ...... 1 – 6 2 Giulietta ...... 6,065 7,861 23,818 31,745 Hummer...... 1 4 9 26 159 ...... 332 916 1,736 3,725 Agila ...... 1,923 2,021 8,981 10,167 Other...... 9 189 86 1,024 Corsa...... 21,138 24,989 97,117 111,403 Total Alfa Romeo ...... 8,747 12,731 36,126 52,913 Astra/Astra Classic ...... 21,194 26,421 88,859 111,840 June 2012 Volume 01 ❙ Issue 04

brought to you courtesy of EUROPE SALES BY MODEL, APRIL & 4 MONTHS www.jato.com

April April 4 mos. 4 mos. April April 4 mos. 4 mos. 2012 2011 2012 2011 2012 2011 2012 2011 Insignia ...... 8,371 12,013 36,711 48,059 C-Zero...... 174 224 486 580 Meriva...... 6,831 12,389 28,601 51,334 C1...... 5,489 5,903 24,552 30,371 Zafira...... 8,207 5,641 32,958 26,793 C3...... 15,304 14,305 59,174 70,552 Antara...... 1,446 610 5,310 1,640 DS3 ...... 6,147 5,586 24,214 25,661 Vivaro ...... 575 616 2,466 2,161 C4...... 9,299 10,163 38,021 43,709 Ampera ...... 499 – 1,481 – DS4 ...... 3,065 206 11,927 496 Other...... 486 80 2,002 890 C5...... 3,733 5,534 15,784 23,237 Total Opel/Vauxhall ...... 70,670 84,780 304,486 364,287 DS5 ...... 1,975 – 7,004 – Other ...... – – – 5 C4 Aircross ...... 1,271 – 1,620 – GENERAL MOTORS ...... 90,095 101,344 377,688 430,495 C-Crosser ...... 247 451 821 1,543 Steed...... 35 42 191 190 Nemo ...... 346 639 1,457 3,266 Hover ...... 1 58 7 485 Other...... – – 2 1 Berlingo...... 3,697 3,100 16,329 16,559 GREAT WALL ...... 36 100 200 676 C3 Picasso ...... 4,524 4,702 20,058 25,506 Jazz ...... 3,966 3,607 18,285 21,990 Xsara Picasso ...... 2 582 18 3,743 Civic ...... 4,126 3,037 16,442 18,792 C4 Picasso/ Insight ...... 242 465 1,797 2,494 Grand C4 Picasso ...... 6,068 7,922 29,351 38,747 Accord...... 577 1,085 3,483 5,610 C8...... 320 437 1,311 1,919 CR-Z ...... 2,095 2,602 11,031 13,910 Other...... 603 536 2,170 2,381 CR-V ...... 144 274 1,114 1,474 Total Citroen ...... 62,264 60,290 254,297 288,270 Other...... 8 134 31 569 iOn ...... 146 202 539 464 HONDA MOTOR ...... 11,158 11,204 52,183 64,839 107 ...... 5,852 6,268 27,687 33,144 i10...... 4,928 5,616 24,735 26,183 206 ...... 3,643 6,567 16,917 41,374 i20...... 6,565 7,261 28,415 26,095 207 ...... 13,221 20,026 71,319 94,141 i30...... 9,200 10,746 33,041 37,750 208 ...... 7,714 – 12,387 – i40...... 2,857 4 10,741 9 308 ...... 11,851 12,561 49,478 56,937 H-1/Starex/Satellite ...... 372 243 1,026 931 407 ...... 37 413 141 4,048 Accent...... 1,533 2,237 4,529 7,438 508 ...... 8,181 7,970 32,362 18,921 Elantra...... 384 1 1,563 5 RCZ ...... 857 1,605 4,115 6,400 ix20...... 4,026 4,497 16,280 16,332 3008 ...... 9,608 9,815 36,943 41,489 ix35...... 8,182 7,159 34,114 27,689 4008 ...... 255 – 307 – Genesis ...... 191 202 519 621 Santa Fe ...... 757 839 3,972 4,162 5008 ...... 5,895 5,910 20,618 25,051 Veloster...... 587 4 2,474 13 807 ...... 456 534 1,758 2,241 Other...... 113 820 489 2,709 4007 ...... 116 345 694 1,337 Total Hyundai brand ...... 39,695 39,629 161,898 149,937 Bipper ...... 515 470 1,888 3,097 Picanto ...... 4,772 3,324 22,347 14,100 Partner/Ranch ...... 2,842 2,487 11,672 13,221 Rio...... 5,993 1,238 27,830 6,155 Expert ...... 507 391 1,614 1,721 Cee'd ...... 5,562 6,336 22,155 23,539 Other...... 153 142 469 640 Optima ...... 375 – 1,503 3 Total Peugeot ...... 71,849 75,706 290,908 344,226 Venga ...... 2,533 3,975 10,948 16,485 Other ...... – – – 1 Soul...... 450 951 2,590 4,611 PSA...... 134,113 135,996 545,205 632,497 Sportage ...... 7,211 5,082 29,117 21,212 M ...... 81 41 287 211 Sorento ...... 786 1,112 4,035 4,738 EX ...... 36 56 150 232 Other...... 123 335 531 1,585 FX ...... 339 244 821 874 Total Kia ...... 27,805 22,353 121,056 92,428 Other...... 37 48 107 148 HYUNDAI-KIA ...... 67,500 61,982 282,954 242,365 Total Infiniti ...... 493 389 1,365 1,465 Mahindra...... 9 39 65 203 Pixo ...... 561 875 3,617 5,990 Korando ...... 425 317 1,708 1,254 Micra...... 3,746 5,337 24,355 26,872 Actyon...... 3 26 5 126 Juke...... 7,423 8,379 37,769 36,500 Kyron ...... 28 81 157 449 Rexton...... 35 29 143 203 Leaf...... 345 180 1,586 361 Rodius/Stavic ...... 55 68 191 293 Qashqai...... 15,112 19,335 79,263 79,177 Other...... – – 1 – 370Z ...... 87 134 440 671 Total Ssangyong ...... 546 521 2,205 2,325 Note ...... 2,210 1,951 11,210 12,509 MAHINDRA & MAHINDRA .. 555 560 2,270 2,528 X-Trail ...... 683 651 3,453 3,520 MX-5...... 668 895 2,664 3,134 Pathfinder ...... 234 347 1,060 1,632 Mazda2...... 2,008 2,851 13,323 14,512 Murano ...... 133 294 726 1,351 Mazda3...... 1,766 2,533 11,604 13,296 NV200/Evalia ...... 537 311 2,199 1,266 Mazda6...... 1,003 1,323 5,867 8,051 Other...... 270 501 1,186 2,480 Mazda5...... 1,064 2,165 7,242 11,769 Total Nissan...... 31,341 38,295 166,864 172,329 CX-5 ...... 2,299 – 5,538 – NISSAN ...... 31,834 38,684 168,229 173,794 CX-7 ...... 418 926 2,201 4,537 Duster ...... 10,153 12,465 40,700 49,518 Other...... 10 70 72 560 Sandero...... 6,772 5,068 26,924 26,129 MAZDA ...... 9,236 10,763 48,511 55,859 Logan ...... 3,517 3,080 13,903 12,214 i...... 182 292 520 1,444 Lodgy ...... 675 – 798 – Colt...... 1,556 2,294 6,825 10,546 Other...... – 3 2 8 Lancer ...... 581 1,438 2,520 5,934 Total Dacia ...... 21,117 20,616 82,327 87,869 ASX...... 2,916 4,947 14,260 17,818 Twingo ...... 8,755 9,577 38,068 51,401 Outlander ...... 923 1,534 4,734 6,548 Clio ...... 21,229 23,160 89,199 113,853 Pajero/Montero/Shogun...... 387 558 1,763 2,628 Other...... 44 133 249 713 Symbol/Thalia ...... 2,845 4,131 10,058 14,525 MITSUBISHI ...... 6,589 11,196 30,871 45,631 Megane...... 15,886 21,299 68,211 88,830 Elise...... 16 34 50 134 Fluence ...... 3,827 3,856 12,992 14,312 Evora...... 12 37 63 145 Laguna ...... 2,899 4,853 11,815 18,930 Other...... 2 7 6 67 Latitude...... 543 977 2,067 4,098 Total Lotus ...... 30 78 119 346 Wind ...... 212 666 855 2,982 Proton ...... 242 138 679 489 Modus/Grand Modus ...... 2,834 4,196 12,243 18,618 PROTON...... 272 216 798 835 Scenic/Grand Scenic ...... 11,234 13,958 46,024 55,020 June 2012 Volume 01 ❙ Issue 04

brought to you courtesy of EUROPE SALES BY MODEL, APRIL & 4 MONTHS www.jato.com

April April 4 mos. 4 mos. April April 4 mos. 4 mos. 2012 2011 2012 2011 2012 2011 2012 2011 Espace/Grand Espace...... 1,156 1,386 4,611 5,340 A1...... 8,505 8,046 32,696 35,980 Koleos ...... 1,369 1,018 5,430 5,572 A3/S3/RS3 ...... 11,997 13,922 46,962 49,726 Kangoo ...... 2,704 2,485 11,412 13,160 A4/S4/RS4 ...... 11,657 13,499 42,833 54,555 Trafic...... 997 1,002 3,862 3,695 A6/S6/RS6/allroad ...... 8,543 6,354 38,512 23,943 A7/S7 ...... 1,128 1,960 4,560 6,789 Other...... 169 112 680 237 A8/S8 ...... 514 854 2,446 3,702 Total Renault brand ...... 76,659 92,676 317,527 410,573 TT ...... 1,415 1,794 4,809 6,855 RENAULT SA...... 97,776 113,292 399,854 498,442 A5/S5/RS5 ...... 6,732 6,663 25,032 24,795 RENAULT-NISSAN ...... 129,610 151,976 568,083 672,236 R8 ...... 128 130 405 504 Impreza ...... 203 733 1,181 3,550 Q3...... 6,416 43 23,090 62 XV...... 678 – 3,327 – Q5...... 4,485 5,751 19,173 23,006 Legacy/Outback...... 637 1,186 3,791 5,125 Q7...... 1,048 1,208 3,596 4,925 Trezia ...... 199 199 750 965 Other...... 47 32 185 109 Forester ...... 894 1,506 5,175 6,339 Total Audi ...... 62,615 60,256 244,299 234,951 Other...... 18 125 109 699 Continental GT/GTC ...... 141 139 587 402 SUBARU ...... 2,629 3,749 14,333 16,678 Continental Flying Spur ...... 16 24 78 54 Mulsanne ...... 17 14 64 91 Alto...... 1,784 3,079 8,585 15,164 Other...... 6 – 9 9 Splash ...... 1,347 1,247 6,064 5,877 Total Bentley...... 180 177 738 556 Swift ...... 4,938 5,449 21,492 22,077 Bugatti...... – 2 4 4 Kizashi...... 109 230 551 741 Gallardo ...... 22 51 96 126 Jimny...... 1,013 1,220 4,893 5,332 Aventador ...... 27 1 96 3 SX4 ...... 2,605 2,918 10,800 13,019 Murcielago ...... 2 2 7 3 Vitara/Grand Vitara/XL-7 .... 973 1,338 4,656 6,138 Other...... 2 – 2 1 Other...... 5 4 20 35 Total Lamborghini ...... 53 54 201 133 SUZUKI...... 12,774 15,485 57,061 68,383 Boxster ...... 171 380 539 1,114 9-3 ...... 175 1,496 493 6,979 Cayman...... 125 232 529 695 9-5 ...... 23 431 150 2,331 911 ...... 1,494 1,226 5,121 4,037 Panamera ...... 739 530 3,201 1,853 Other...... – – 1 2 Cayenne ...... 1,771 1,486 6,876 5,512 Total Saab ...... 198 1,927 644 9,312 Other...... 20 23 73 83 SWEDISH AUTOMOBILE ...... 198 1,927 644 9,312 Total Porsche...... 4,320 3,877 16,339 13,294 XF ...... 1,355 737 7,096 5,146 Altea ...... 2,577 3,780 10,365 13,377 XJ ...... 186 257 855 1,607 Alhambra ...... 1,689 1,339 6,517 5,187 XK...... 106 145 659 869 Mii...... 450 – 809 – Other...... 10 3 49 31 Ibiza ...... 10,349 13,934 48,105 59,231 Total Jaguar ...... 1,657 1,142 8,659 7,653 Leon ...... 4,779 6,110 19,936 23,411 Defender ...... 58 106 364 527 Exeo ...... 1,041 2,134 5,038 8,437 Freelander ...... 1,121 1,648 6,845 11,556 Other...... 2 10 11 21 Discovery...... 896 923 5,081 5,161 Total Seat ...... 20,887 27,307 90,781 109,664 Citigo ...... 322 – 1,121 – Range Rover Evoque ...... 3,647 – 18,868 – Fabia ...... 13,454 13,212 55,942 58,663 Range Rover Sport...... 1,064 1,493 6,255 6,902 Octavia ...... 15,749 14,739 66,704 61,543 Range Rover ...... 369 425 2,495 3,196 Superb...... 4,803 4,870 19,446 19,744 Other...... 10 14 50 43 Roomster...... 2,687 2,101 10,731 9,415 Total Land Rover...... 7,165 4,609 39,958 27,385 Yeti ...... 5,516 4,442 21,740 17,727 Indica ...... 86 177 227 684 Other...... 48 45 176 222 Xenon ...... 19 33 76 138 Total Skoda ...... 42,579 39,409 175,860 167,314 Other...... 4 50 19 277 Up...... 8,977 6 26,384 9 Total Tata brand ...... 109 260 322 1,099 Fox ...... 28 853 510 5,295 TATA MOTORS ...... 8,931 6,011 48,939 36,137 Polo...... 24,559 32,955 114,844 128,809 Cuore/Charade ...... 97 286 474 1,107 Golf...... 37,743 43,106 161,753 168,156 Golf Plus ...... 6,389 7,973 24,699 30,128 Sirion...... 74 364 294 1,265 Jetta ...... 3,095 2,443 12,016 10,122 Materia ...... 5 40 13 227 Passat ...... 17,526 23,465 74,609 79,711 Terios ...... 146 549 866 2,073 CC...... 2,270 2,147 7,132 8,476 Other...... 1 15 4 39 Phaeton...... 204 303 846 1,110 Total Daihatsu...... 323 1,254 1,651 4,711 Beetle ...... 1,344 – 4,854 – CT ...... 1,339 2,252 7,142 4,950 Scirocco...... 1,592 2,541 6,157 9,805 IS...... 186 403 1,082 1,837 Eos ...... 908 1,571 2,694 5,302 RX ...... 489 594 2,323 2,725 Touran...... 9,411 11,068 37,976 44,249 Other...... 19 56 94 264 Sharan...... 3,320 3,792 13,239 15,807 Total Lexus ...... 2,033 3,305 10,641 9,776 Tiguan...... 14,078 11,135 55,425 43,190 iQ ...... 872 1,186 3,837 6,090 Touareg...... 2,015 2,091 7,053 7,742 Caddy ...... 5,208 4,729 17,144 16,908 Aygo ...... 5,577 5,845 24,695 30,561 Transporter/Caravelle/ Yaris ...... 13,239 10,565 62,437 55,027 Multivan/Shuttle/T5 ...... 4,238 4,628 17,656 16,816 Auris ...... 5,967 8,434 27,722 37,955 Other...... 271 400 1,243 2,016 Corolla ...... 1,378 2,736 5,945 10,931 Total VW brand...... 143,176 155,206 586,234 593,651 Prius ...... 1,933 2,347 7,396 10,854 Other ...... 11 6 22 19 Avensis ...... 4,981 4,577 23,928 21,869 VOLKSWAGEN...... 273,821 286,294 1,114,478 1,119,586 Verso-S ...... 1,545 2,418 8,542 6,060 OTHER ...... 1,325 1,137 4,227 3,419 Verso...... 2,683 3,702 12,196 13,878 OTHER (China automakers) ...... 108 158 933 988 Urban Cruiser ...... 247 670 1,416 2,976 GRAND TOTAL ...... 1,104,403 1,184,768 4,624,168 5,002,850 RAV4...... 2,585 4,363 14,024 18,417 Land Cruiser ...... 688 1,098 3,467 4,717 Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech GT 86 ...... 1 – 1 – Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Other...... 92 123 292 571 Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Total Toyota brand...... 41,788 48,064 195,898 219,906 Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and Turkey. TOYOTA MOTOR ...... 44,144 52,623 208,190 234,393 Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)