A publication from March 2012 Volume 01 | Issue 01 global

Your source for europe.autonews.com/globalmonthly monthly everything automotive.

United! But stronger?

Why PSA and GM think their alliance will revive their struggling European operations

A publication from © 2012 crain communications inc. all rights reserved inc. communications crain © 2012 Hands: © Joachim Wendler - Fotolia.com - Fotolia.com Wendler Hands: © Joachim Balazh - Fotolia.com Globus: © Anton March 2012 Volume 01 | Issue 01 VW production dAtA head Macht Peugeot looks January 2012 global monthly brought to you courtesy of pushes factories for sales lift www.jato.com European sales months Unit Percent – months 9 2010 change change 9 +67,087 to new limits from 308 2011 6,307 –20% data from JATO 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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News analysis Risks and rewards

The PSA-GM alliance offers potential for big savings - or big trouble

GM CEO Dan Akerson (left) and PSA CEO Philippe Varin believe that their new alliance will save each automaker billions while increasing their competitiveness in Europe.

Luca Ciferri and materials with GM, the world's features common to failed alliances largest automaker. from the auto industry's past, but at TURIN -- PSA/Peugeot-Citroen and least PSA and GM Europe now have a General Motors believe they will boost The partners say that the deal will plan of some sort and a direction," the size and the scope of their result in combined savings of about said Max Warburton, an auto analyst product lineups, save billions on $2 billion annually starting in five at Bernstein Research in London. purchasing and revive their struggling years. European operations as a result of Others also praised the alliance. Most of the savings will come from their alliance. Europe, home market to PSA's "We see very clearly that the chances PSA, Europe's second-largest Peugeot and Citroen brands, as well outweigh the risks," Continental CEO automaker after Volkswagen Group as GM's Opel/Vauxhall unit. Elmar Degenhart told reporters March and No. 8 globally, will share vehicle 1. "It's easy to be cynical about the PSA- platforms and jointly purchase parts GM plan, as it has many of the

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THE BASICS The problem is that PSA and Opel/ flow improvements for GM's loss- Vauxhall need help now and analysts making Opel division in Europe, the -- Partners will share cost of r&d are not sure how this deal will help in proposed alliance offers no help with and development for vehicle the short term. Credit ratings agency respect to the fundamental problem platforms, components, modules Moody's cut PSA's debt rating to junk of overcapacity in the European auto -- Partners will form global status after the GM alliance was market," rating agency Fitch said in a purchasing JV with $125 billion announced. Moody's made the cut note. budget because it fears the alliance won't -- Automakers maintain PSA plants in Aulnay-sous-Bois, near bring the cost savings that the independence Paris, Valenciennes, northern France, automakers promise and because of -- GM to form cooperation with and Madrid, Spain, are at risk of PSA's poor performance in 2011. PSA logistics arm Gefco in closure, according to a PSA internal PSA's automotive business lost 497 Europe and Russia document leaked to the press by billion euros in the second half of last -- PSA to raise 1 billion euros French union CGT. year. As a result, PSA wants to cut through a capital increase, 6,800 jobs and trim costs by 1 billion Varin told reporters last month that no including an investment from euros this year. new vehicle has been planned for Peugeot Family Group, to fund Aulnay, which is scheduled to produce strategic investments Troubles at Opel/Vauxhall caused the Citroen C3 until 2016. -- GM to acquire 7% stake in GM's European business to abandon PSA plans to reach break-even in 2011. It The Valenciennes plant, also known as -- Initial product focus is ended 2011 with a $747 million Sevel Nord, is a 50:50 joint plant with subcompact and mid-sized cars, operating loss. GM has lost more than Fiat that is at risk because of shrinking minivans and crossovers $13 billion in Europe since the late demand for minivans in the French -- First joint product due in 2016 1990s. market and because Fiat last year -- 8-person steering committee (4 started selling minivans made by its "Peugeot's struggling; Opel's from each automaker) will lead alliance partner, Chrysler Group. The struggling. You can't just put two alliance French factory produces the Citroen struggling entities together and -- Deal expected to be completed C8 and Peugeot 807 minivans as well expect magic," Mirko Mikelic, an in second half of 2012 as commercial vans for Citroen, advisor with Fifth Third Asset Peugeot and Fiat. French Industry Minister Eric Besson Management, told Reuters. said: "This agreement is good news The Madrid plant makes the Citroen Said Morgan Stanley auto analyst for our automobile industry and for its C3 and C3 Pluriel as well as the Adam Jonas: "The realization of workers." Peugeot 207 and 207 CC. synergies would take a whole product Besson told reporters he is bullish on cycle [or more] and that doesn't mean Media reports have raised doubts on the alliance because PSA CEO Philippe it's the wrong thing to do of course, the future of Opel's factories in Varin pledged that the pact would be but other automakers may be able to Bochum, Germany, and Ellesmere favorable for jobs and the company's exploit the chaos and make progress Port, England. presence in France. while PSA and GM executives toil." Analyst Warburton said that PSA and The automakers initially plan to work In addition, PSA is projected to use GM - either together or as allies - are on small and mid-size cars, crossovers just 62 percent of its European going to have to address capacity. and minivans. They may also develop capacity this year, compared with 74 "Since French car companies can't cut a new platform for low-emission percent at Opel, according to LMC capacity in France and German car vehicles. The first jointly developed Automotive in Oxford, England. An companies can't cut in Germany, then model is due in 2016. automaker typically needs at least 80 surely attention is going to turn to percent utilization for a plant to be "Most of the purchasing synergies will countries without national champions. profitable, therefore analysts foresee begin occurring with the launch of the That means the UK and Spain," he both automakers will have to shut jointly developed new models," GM said. plants in Europe. Vice Chairman Stephen Girsky said in In his view, Spain appears to be the a conference call Feb. 29. "While expanded cooperation with most likely place to make cuts, PSA could eventually help drive cash

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especially since new labor laws purchasing joint venture with Fiat According to Ackerson, the PSA deal introduced in February may potentially "worked quite well. So we do have is better than the Fiat pact for three make such staff reductions less costly some positive experiences coming out reasons: "It is a more balanced than before. of Fiat." relationship. There are known concrete synergies. And, I think Opel has a plant in Zaragoza, Spain. POTENTIAL RISKS, REWARDS lessons were learned organizationally PSA has factories in Madrid and Vigo. RISKS from past experiences." Partnership flop -- Overcapacity in Europe not Really balanced? addressed by pact Another concern about the alliance is -- Political battles in France and While Akerson and PSA CEO Varin whether GM will suffer a repeat of its Germany over efforts to cut jobs/ both have repeatedly stressed that the failed 2000-2005 partnership with close plants could tear apart alliance is balanced, some analysts are Fiat, which ended with GM paying the alliance skeptical. Italian company $2 billion to end their -- Purchasing savings likely to be relationship. "It's clear that Peugeot is the real unequal because of size benefactor of this alliance while GM That deal had one unusual aspect, difference of the automakers reaps a disproportionately smaller called the "put" option. It allowed -- Tough decisions by steering reward," Dave Whiston at Fiat S.p.A. to force GM, which had a committee could deadlock Morningstar wrote in a note to 20 percent stake in Fiat Auto, to buy because of each company has 4 investors. He noted that the alliance the remaining 80 percent of the members on steering committee partners claim that the total $2 billion Italian automaker. -- Highly profitable light in cost savings will be split evenly, commercial vehicles are not part As former GM CEO Rick Wagoner which seems unlikely since more than of the initial pact explained the unusual provision in a 70 percent of the partners' $125 December 2002 interview, Fiat S.p.A. billion combined purchasing budget REWARDS was concerned that GM's stake would will come from GM. -- Scale gained, particularly in prevent Fiat S.p.A. from selling the car Europe, that allows partners to "We see the fact that Peugeot is not company to another automaker. expand product offering at purchasing a stake in GM, unlike most "We didn't like the idea of a put," optimized costs other alliances, as support for our Wagoner said. "The deal wouldn't -- Purchasing power gained from opinion that Peugeot needs GM more have happened without it." combined volumes and shared than GM needs Peugeot," Whiston platforms wrote. During a conference call following the -- Estimated combined annual PSA alliance announcement, GM CEO Matthew Stover of Guggenheim cost saving of $2 billion within 5 Dan Akerson likened the put option to Securities agrees. "PSA needs GM, years "a loaded gun at the head of General but GM doesn't need PSA," he said in -- PSA gets access to GM's plug- Motors." a note. "It's hard for me to figure out in gasoline hybrid technology how this deal helps GM within Akerson said the alliance with PSA is -- GM gets access to PSA's Europe." much different because it does not HYbrid4 diesel hybrid 4wd have a put option in place that would technology Douglas A. Bolduc, Bruce Gain, require GM to take control of the -- GM gets chance to reduce Bertrand Gay, Dave Guilford, wire French automaker. He added that the logistic costs in Europe, Russia reports contributed

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PSA's product push includes low-cost car and lightweight large car

Peugeot will launch a crossover variant of the 208 next year based on the HR1 concept (shown).

Bertrand Gay built at PSA's factory in Mulhouse, KEY PEUGEOT AND CITROEN France, which also produces the 208. PARIS -- Both Peugeot and Citroen will LAUNCHES The crossover will closely resemble the renew key parts of their product 2012: Peugeot 208, Citroen C3 HR1 unveiled at the 2010 Paris auto ranges in the next three years, while face-lift show and rival models such as the also launching a low-cost car for 2013: Peugeot 301, Peugeot Nissan Juke. emerging markets. 2008, low-cost compact car Next year, Peugeot will replace the 2014: Citroen C5 This year, the 208 is the main 308 compact, its No. 2 seller in 2015: Citroen C4 Picasso, introduction for Peugeot. The Europe. Code-named the T9, the new Peugeot 3008, Peugeot 5008 subcompact will go on sale in April, compact is likely to be called the 301. Source: ANE research replacing the 207, the brand's best- The 309 name will not be used selling model with European sales of because Peugeot already sold a model The Peugeot brand is currently rushing 245,649 units last year, according to called the 309 in the 1980s. the development of their so-called market researcher JATO Dynamics. Coeur de gamme low-cost car, code- The 301 will be offered as a five-door Peugeot will unveil a crossover named Project M3. The model is being hatchback, sporty three-door and version, likely to be called the 2008, at developed for emerging countries station wagon. Production is the Paris auto show in September. where the Logan, built by Renault's scheduled to begin by spring 2013 at Code-named the A94, the car will be Dacia brand, has been a success. PSA's plant in Sochaux, France.

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PSA's no-frills car will be more upscale Europe last year with sales of The Peugeot 208 and Citroen C3 will than the Logan, but it will be 181,868, according to JATO. be the first PSA cars to offer the mechanically simpler and easier to automaker's new three-cylinder The brand will continue expanding its maintain than similar PSA models sold gasoline engine, which has upscale DS range with the unveiling of in Europe. displacements of 1.0 and 1.2 liters the DS3 convertible at the upcoming and power ranging from 68 hp to A Citroen version is also under Paris show. The car will use an nearly 120 hp in a turbocharged development as Project M4. Both cars innovative folding soft-top that PSA direct-injection version. will be built in Vigo, Spain, starting patented about two years ago. early 2013. Next year, PSA will introduce a dual- In 2014, Citroen will update the C5 clutch transmission as part of its effort In April, Citroen will give the C3 large car. The new generation will be to expand its fuel-saving technologies. subcompact a light restyling. The C3 slightly longer than the current model was the brand's best-selling model in and up to 100kg lighter. It will be sold in sedan and wagon variants.

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Opel has its strongest-ever product lineup, CEO Stracke says

Brand plans 6 launches this year, including first small SUV

Opel CEO Karl-Friedrich Stracke says the Ampera plug-in hybrid showcases the brand's ability to innovate.

Harald Hamprecht year alone, we will launch six new showrooms at the end of the year. models." The Mokka will compete against FRANKFURT -- Opel/Vauxhall plans to vehicles such as the Dacia Duster, refresh 80 percent of its product By 2014, the average age of the Suzuki SX4 and Fiat Sedici. lineup by 2014 through investments brand's model portfolio will be only of 11 billion euros. three years, Stracke said. Opel says the Mokka reinforces the brand's strategy to offer technology "Our current portfolio is the strongest Opel's new cars include the Mokka, found in premium cars at affordable ever," CEO Karl-Friedrich Stracke told the brand's first entry in Europe's prices. It will be sold with segment- employees in a recent letter obtained growing small SUV segment. The car leading technologies such as the by Automotive News Europe. "This shares its platform with the U.S.- driver assistance systems based on the market Buick Encore and arrives in

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Opel Eye front-camera system, which derived van. Both will go on sale by Junior that will be built in Eisenach, has functions including lane-departure the end of the March. In the summer, Germany, as well as a new convertible warning and traffic sign recognition, three versions of the Astra compact based on an extended Astra platform as well as a rearview camera. arrive -- an Astra sedan, the high- to be built in Gliwice, Poland. performance Astra OPC and a face-lift In the long term, parent GM aims to KEY OPEL LAUNCHES for the five-door Astra hatchback. improve and expand Opel's lineup 2012: Mokka, Zafira Sports Opel will also use the Ampera plug-in through its alliance with PSA/Peugeot- Tourer, Combo, Astra sedan, hybrid to showcase its green Citroen. The two companies will pool Astra OPC, Astra face-lift technologies. The Ampera, a sister research and development, vehicle 2013: Junior, new convertible, model to the Chevrolet Volt, went on platforms and technologies with the Vivaro, Insignia face-lift sale in Europe in February. "Within first jointly produced vehicles - mostly 2014: Corsa, Antara, Agila GM we have access to top small and mid-sized cars - arriving in 2015-16: Insignia technology," Stracke said. 2016. Source: ANE research Next year, other gaps in Opel's model Other launches are the Zafira Sports portfolio will be filled with the Tourer minivan and Combo car- introduction of a minicar code-named

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PSA-GM mull Insignia-based large car; also will cooperate on mid-sized sedans, small cars

The Opel Insignia (shown) could become the basis for new Peugeot and Citroen models.

Luca Ciferri GM and PSA also believe that their subcompact segment, includes the new alliance will give them a big Citroen C3 and DS3; Peugeot 206, PSA/Peugeot-Citroen and General boost in the subcompact and mid- 207 and 208; Opel/Vauxhall Corsa; Motors may use the Opel/Vauxhall sized vehicle segments. and Chevrolet Aveo. Insignia's underpinnings to create new large cars to give PSA a boost in a "Initial focus of the alliance will be on PSA and GM aim to sell a combined segment where it has been weak, the B and D segments, which would 2.3 million subcompacts a year German media reported. result in global segment leadership, as worldwide. well as strong positions in Europe and "The platform can be extended. It was The partners' cars in the D-segment, Latin America," PSA Chief Financial supposed to underpin a large Saab car also known as the mid-sized segment, Officer Jean Baptiste de Chatillon said that will no longer go into include the Citroen C5, Peugeot 508, during a Feb. 29 conference call. production," German newspaper Die Opel/Vauxhall Insignia and its sister Welt quoted an Opel manager as For the alliance partners the B model, the Buick Regal, which is built saying. segment, which is also known as the by GM in the United States and

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China. The companies plan to sell a Said Bernstein Research analyst Max The Peugeot 807 and Citroen C8 are combined 1.6 million mid-sized cars. Warburton: "I find it very interesting middle-of-the-pack competitors in the the way PSA and GM are emphasising large minivan niche while Opel Due to the two automakers' current collaboration on the D segment and abandoned the segment years ago. product cycles, industry observers the B segment, while not mentioning expect their first joint product, due in Crossovers anything about C-segment." 2016, to be the replacement for the PSA and GM have great potential to Insignia, which debuted in 2008, and He believes that if the partners create synergies and launch joint the Peugeot 508, which was launched combined their work on the C and D products in the SUV/crossover in late 2010. segments they could achieve big cost segments. So far, Peugeot and reductions. Compacts, subcompacts Citroen offer four SUVs. All of them "Automakers such as Volkswagen are based on Mitsubishi models. PSA and GM's joint efforts on Group, Renault-Nissan and Fiat- subcompacts are expected to take Opel/Vauxhall gets its Antara compact Chrysler seem to be merging their C- longer to develop because the SUV and Mokka small SUV from and D-segment platforms," he said. Peugeot 208 debuts this month at the South Korea. Geneva auto show and the next Opel/ Minivans Joint product development would Vauxhall Corsa arrives in 2013. Another area of cooperation would be help PSA and GM broaden their SUV PSA CEO Philippe Varin said that minivans and crossovers, the two lineups while reducing costs by compact models are not part of the automakers said. consolidating randd investments and partners' initial joint product plans. sharing plant-retooling costs. GM and PSA dominate the small The likely reason is because most of minivan segment in Europe. "We see this alliance as more typical the work on the next Peugeot 308 Combined, the top-selling Opel/ of the focused collaborations GM and compact, which is expected to be Vauxhall Meriva and No. 2 and PSA are already pursuing with a wide called the 301, is done because it will Citroen C3 Picasso account for 43 variety of partners," Brian A. Johnson, debut in 2013. Opel/Vauxhall plans to percent of sales in the segment, which an auto analyst at Barclays Capital, replace the Astra compact in 2016, so grew by 10 percent last year to wrote in a note to investors. there could be enough time for a 455,040 units, according to data from convergence of the companies' Johnson estimates that randd JATO Dynamics. platforms. expenses in 2011 at GM were about The alliance's medium minivans rank $1,280 per vehicle (excluding "Nevertheless, GM needs an fourth (Citroen C4 Picasso/Grand production at GM's Chinese joint architecture that meets U.S. standards Picasso), fifth (Peugeot 5008) and ventures). The amount at PSA was for the next Chevrolet Cruze compact sixth (Opel/Vauxhall Zafira) in the about $1,040. and the PSA's platform does not do segment, which is dominated by the that," an industry source told Renault Scenic and Grand Scenic. Automotive News Europe.

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

How to cuddle with your competitor

Harald Hamprecht • Make sure it is a real win- win situation. It is no secret that few megamergers • Don't underestimate cultural and takeovers have been mega- differences. successful. A prime example is • Reduce complexity. Daimler's so-called "marriage in heaven" with Chrysler, which ended Following up on the last point: Don't in a messy and expensive divorce. get tangled up in too many small alliances - a problem that PSA faces. Even small partnerships can be Too many projects with too many troublesome. In 2010, Volkswagen partners results in too much took a 20 percent stake in Suzuki to complexity. cooperate on small cars, but now the partners are no longer talking so all The PSA- GM agreement is quite joint projects are stalled. similar to the deal between Daimler and Renault-Nissan agreed on in April Perhaps that is why we are seeing a 2010. PSA and GM have an fresh new approach to alliances: the advantage in that it is probably easier creation of more focused and for volume players to share parts, intelligent pacts between automakers. materials and purchasing than a The latest example of Partnerships 2.0 premium manufacturer and a mass- is the PSA-General Motors tie-up to Harald Hamprecht is Editor-in-Chief at Automotive News Europe market player. share platforms and create a joint purchasing unit. Time will tell whether There are other, lesser known, Many questions the PSA-GM deal will succeed. alliances that have succeeded. Suzuki Still, there are lots of question marks and Opel work together on the Suzuki The failure of so many alliances makes hanging over PSA and GM. How is Wagon R, which is also sold as the one wonder whether automakers Opel/Vauxhall supposed to work Opel/Vauxhall Agila. Suzuki also incapable of cuddling with their together with Peugeot and Citroen? supplies Fiat with the Sedici, which is competitors. Is it because there The details will be revealed in the a sibling model to the Japanese executives' egos are too big and second half of the year. automaker's SX4. Toyota and PSA because the companies' engineers are make minicars together in the Czech If PSA CEO Philippe Varin and GM too proud - or scared - to share? Republic while Renault supplies CEO Dan Akerson are clever, they The shining example of how to make commercial vans to Opel. won't wait for synergies due from a partnership work comes from Make it work using joint platforms - which will take Renault-Nissan. Their alliance is more until 2016. They need to speed up than a decade old and only seems to So what are the key factors to their plan to start working together be getting stronger. success? on purchasing and logistics as soon as possible. And they should consider • Clear responsibilities. forming a joint finance arm for their • Clear focus: It makes more dealer networks. sense to concentrate on certain areas, such as On top of that, PSA urgently needs a platform sharing, instead of rival to Renault's low-cost Dacia trying to combine entire brand. Maybe the Korean arm of companies. GM's Chevrolet operation could provide such a model. Scale still

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

matters - even for the world's biggest demands or be forced to seek other Working closer with partsmakers automaker, which does not need PSA business. would be much easier and probably as much as the French need GM. more successful than organizing The bottom line is that there is no megamergers. By the way, I totally disagree with guarantee that the PSA-GM deal will French Industry Minister Eric Besson, be a success. We know, however, that Finally, what I am really curious to see who recently said that the strategic cost sharing is crucial, especially given is how Fiat-Chrysler CEO Sergio PSA-GM alliance would not include all the technological and Marchionne will respond to the PSA- production activities, adding that both environmental challenges automakers GM tie-up. The year started with carmakers would remain operationally face in a western European market rumors that PSA was going to be the independent. Is he serious? Point one: where new-car sales are likely to fall third automaker in the Fiat-Chrysler Why is he commenting? Is the French for the fifth straight year. alliance. Marchionne has said he is government a stakeholder? Nope. open to making the alliance bigger. It is execution that counts. Also Point two: Joint production is a great The list of potential partners is getting important the ability to be able to way to cut costs and save jobs. thin. Maybe it will be Suzuki or former form positive and productive working Ford alliance partner Mazda. Also, it Besson also said the relationship relationships with people who were will be interesting to see whether between PSA and its local suppliers your bitter rivals just a second ago. stand-alone OEMs - such as Hyundai- would not be changed by the deal. Don't forget suppliers Kia and Honda will seek partners. So Excuse me? These companies are stay tuned, we might be at the start about to create a purchasing An area of untapped potential when it of a new wave of alliances. Nobody department with a $125 billion comes to Partnerships 2.0 is creating can afford to work alone in Europe in budget. The partners are going to deeper relationships with suppliers. the future. demand the best product for the best Robert Bosch, Continental, Magna price. With mega-volumes at stake, and others should be allowed to play suppliers will either meet the price a bigger role in the automotive future.

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

GM should follow Ford, not tie up with PSA to fix Europe problems

Luca Ciferri 3. Adding PSA into the GM Europe equation would add volume - the General Motors' main weakness in French automaker built 3.5 million Europe is its money-losing Opel/ vehicles last year - but would Vauxhall unit, which needs a quick drastically increase complexity and and radical restructuring. To make the reduce decision-making speed at a fix, GM CEO Daniel Akerson should company that is not considered to be borrow from Ford boss Alan Mulally's a global leader at acting fast. One Ford strategy rather than joining forces in a loose tie-up with equally 4. GM has had little success making struggling PSA/Peugeot-Citroen. the right deals with automakers in Europe. After 20 years of trying to fix By doing this, GM would use its Saab, GM basically gave away the massive size to its advantage rather company in early 2010. In 2005, GM's than embark on a complex, time- five-year partnership with Fiat ended consuming cross-cultural alliance that with the U.S. automaker being forced initially appears more beneficial to to pay Fiat $2 billion to avoid having PSA than to the world's largest to purchase 80 percent of the Italian automaker. company's automotive operations. In Luca Ciferri is Chief Correspondent at Let's consider some key facts. total, GM invested $4.4 billion in Fiat, Automotive News Europe which is much less than it got from 1. Although Europe accounted for 87 A key to One Ford is that the same the five years of synergies. percent of Opel/Vauxhall's 1.13 product is built with just minor tweaks million global sales last year, it is not Different road all over the world. The new Fiesta an isolated regional carmaker. Opel/ subcompact was the first One Ford When Ford restructured in the last Vauxhall is part of GM's global vehicle, followed by the new Focus decade it got small rather than bigger. network of platforms and powertrains last year. The Fusion/Mondeo CEO Alan Mulally sold Aston Martin, so its products can be build and sold replacements will get the same Jaguar, Land Rover and Volvo, shut anywhere in the GM empire. GM treatment next. By doing this, Ford down the Mercury brand and could do a better job taking leverages the volume of truly global concentrated globally on the Ford advantage of this as Opel/Vauxhall's architectures, reaching adequate scale brand as part of the One Ford current product range is stronger than and it does so without having to strategy. Despite a radical ever. discuss every move with a partner. restructuring, GM still focuses on GM uses global architectures but Opel/Vauxhall already shares 2. multiple brands, with Opel/Vauxhall produces slightly different products engineering costs with other GM being the least profitable and most for different brands around the world, brands and gets economy-of-scale vulnerable. which adds complexity and reduces benefits from Chevrolet and Buick standardization. models built around the world. Additional synergies with PSA would GM is the world's largest automaker definitely help, but with the first joint and should use this advantage more product coming in 2016 at the than ever as it restructures in Europe. earliest, the help won't come fast PSA, which is not present in the enough. United States and is behind rivals in China and Russia, needs GM's scale

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and the global reach more than the just 67 percent of its installed capacity printing money. Despite an escalating other way around. and PSA did marginally better at 77 price war last year, Ford's European percent. An automaker needs to use unit lost $27 million while selling 1.6 GM also has to ask itself whether PSA at least 80 percent of installed million vehicles. is the right partner, especially since it capacity to break even. Since the already has a vast array of agreements GM Europe - which includes Opel/ European market is not expected to with automakers such as Fiat, Toyota Vauxhall and Chevrolet - sold a similar rebound until 2015 at the earliest, and BMW. It will take years for GM number of vehicles, 1.73 million, but closing plants is the only way for PSA and PSA to developed a true, lost $747 million last year. and Opel/Vauxhall to achieve better 360-degree cooperation. utilization. Sweeping plant closures in GM has successfully restructured its Too much capacity Germany, France and Spain, however, North American manufacturing would spark a firestorm with the footprint to cope with a smaller car In addition, Opel/Vauxhall and PSA unions and politicians. market there. GM will need to make have the same problems in Europe: deep cuts - including plant closures - huge investment and production costs In the 2000s, Ford took bold steps to at Opel/Vauxhall to make it profitable. as well as too much capacity. While a reduce its production capacity in tie-up might save the automakers Europe. The move was crucial to the Adding PSA as a partner won't solve money, each would still have to cut company because as Ford's U.S. Opel/Vauxhall's problems, it will only capacity. According to Morgan operations were bleeding cash in the make them worse. Stanley, last year Opel/Vauxhall used past decade, its European unit was

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

europe.autonews.com/GlobalMonthly March 2012 Manufacturing Volume 01 | Issue 01

'Herculean task'

VW Group pushes production system to new limits in pursuit of being No. 1 global automaker

Volkswagen Group is demanding by systematically developing synergies worldwide. This makes it possible to more from its 62 assembly plants among the 10 group brands and as assemble various models efficiently on around the world as it seeks to many standards as possible. one line. That means we achieve increase annual vehicle sales of the highly flexible, multiple-brand plants company's 10 brands to 10 million by in the process. 2018 or sooner, up from 8 million last Will it be possible to build year. VW Group production boss Michael Macht talked about how the any VW Group brand automaker is overcoming production model at any VW plant in challenges during an interview the future? withandnbsp;Automotive News We always prefer to assign our Europe Editor-in-Chief Harald factories to one brand. If it makes Hamprecht. sense economically, we produce other How many vehicles will brands in a factory. This is now VW Group launch in 2012 successfully taking place in Bratislava and how do you manage and at Seat's factory in Martorell, the complexity of a Spain, for example. company with more than Does this protect VW 200 models worldwide? Michael Macht, VW Group production Group from market head volatility? We undertook 42 new launches in 2011. It will be 49 new launches in What are the key points? We are preparing for changing market 2012, not counting [truckmakers] conditions and are adjusting our We're harmonizing our production MAN and Scania. We have a globally capacity in real time and programs groupwide and we are networked, highly professional team. synchronously - that is, we are relying on a clear, process-oriented We will shoulder this Herculean task reacting very flexibly. Our up-to-date organization. At the same time, we with our drive toward standardization, wage system with appropriate time are stabilizing the quality of our global our group production strategy and credits is especially helpful in this area. vehicle launches and optimizing our absolute discipline in our modular We ran 38 additional shifts last year in production system. But one of our strategy. our Wolfsburg factory alone due to most important tasks is to the high demand, building 50,000 VW Group is growing fast. systematically translate our modular more cars than originally planned. What production changes platform strategy into production. What is being done to are being made to cope What does that mean? with this? prevent problems like That means that we will build up to those that caused the We formulated our Production 40 models across the group globally recent recalls at Toyota? Strategy 2018 to deal with the based on the standard principles for challenges on our path to global the modular transverse platform, or Errors can happen, but we have built growth. The goal of this cross-group MQB. Standard structures for capital up our expertise for recognizing, program is to organize the highest equipment, facilities and assembly analyzing and solving them. We performance and most advanced areas are carried over to our factories define our quality claim precisely and automobile production in the world we're bringing our global partners

europe.autonews.com/GlobalMonthly March 2012 Manufacturing Volume 01 | Issue 01

along with us. This is especially Germany. Isn't your China to Europe in the foreseeable important for our projects abroad. We manufacturing footprint future. cannot expect our suppliers to meet in Germany much too Since VW Group's our expectations from a standing large? start. cooperation with Suzuki Our strategy is to meet global has flopped, how do you How many VW Group customer preferences with regional plan to produce low-cost- employees work in models from local production. For this models for markets such production? reason, we've built new factories in as India? Russia, India and the United States in Out of our roughly 500,000 We know how to do low-cost recent years. We also did this because employees, about two-thirds work in vehicles, too. We're demonstrating we are confronted with the extremely production. that with the Volkswagen Up family. varied trade barriers and tariff The Up comes in under the VW Group has 62 factories restrictions around the world. These 10,000-euro threshold. for production of limitations result in cost structures passenger cars and that make it impossible to easily send Will there be Up variants components worldwide, vehicles around the world. built in India or China? not including truckmaker Do you need all your There hasn't been a decision on that MAN. The number is German and other yet. The Up is primarily a car for expected to be about 70 western European plants Europe right now. by 2018. What comes after when the market is How many Ups can you that? declining? Will you have produced at your to close factories as Opel The VW Group is growing globally. In Bratislava factory? the coming years, we will go online and Fiat recently have with a number of additional facilities. done? The total installed capacity of the In China alone, we are working on plant is 400,000 units. We have No, on the contrary, the group's projects involving new facilities in scheduled a substantial portion of it German and European locations Foshan, Yizheng and Ningbo. In for the Up. remain the backbone of our success. addition, we need component plants That's why we are deliberately Will you increase in this region. We are also looking investing in new technology and production capacity at more closely at the ASEAN (Southeast capacity there. The total is about 28 Asia) region, especially to Malaysia. your U.S. plant in billion euros by 2016 in Germany And, as everyone knows, we're Chattanooga, Tennessee? alone. This makes it more than clear looking at North America. That's that Germany, as a Volkswagen After we pulled out of manufacturing where we're building a component manufacturing center, is at the in the U.S. in 1988, we gave careful factory in Mexico and investigating forefront compared with other consideration to our Chattanooga another vehicle factory under Audi's countries. move and we don't want to jump the leadership. If the global market gun in the future. We have achieved a develops as expected, we won't stop When will you begin using radical localization of 85 percent for there. We'll accelerate. We sold nearly China as a base for the new U.S. Passat, which was 8.2 million vehicles last year and want exports? successfully launched in mid-2011. to be at more than 10 million in 2018 That is an important key to its success At the moment, the Chinese market at the latest. If you include the 31 and for future models as well. The literally soaks up every car that we MAN locations, we don't talk about local sourcing simultaneously makes build there. Our production almost 70 factory locations any more, but planning more complex. As we move cannot keep up. The capacity of our about more than 100 significantly forward, Audi will need a factory in two planned factories in Foshan und earlier than 2018. North America, and Volkswagen could Yizheng, which will start up in 2013, use an SUV above the Tiguan, which - Some 39 of these 62 is already completely targeted for the like the U.S. Passat - would be tailored factories are in Europe, Chinese market. From this standpoint, to the needs of the North American with 13 of them in I see no possibility of exporting from

europe.autonews.com/GlobalMonthly March 2012 Manufacturing Volume 01 | Issue 01

customer. The two decisions are consideration for the auto industry in have preferred to sell off closely related, and we expect to terms of climate and infrastructure. VW's many component make them by summer. Afterwards it Every manufacturer and supplier is factories. Today, they are will take about two and half years already there, crowding around five or considered a major before the factory begins production. six locations and competing for competitive advantage. qualified workers. In the last 12 In what direction are you How are things months, Japanese manufacturers have progressing in this field? leaning for the location? chosen Mexico for three new car We have no clear preference in one factories. On the other hand, that is Our components business area has direction or another on this, especially an argument for the country's operated very successfully for years since we have not yet determined attractiveness. and is profitable. It goes up against what model we will assemble there. external competition financially and in What is the strongest innovation, in every make-or-buy Wouldn't the Audi A4 or argument in favor of decision. Today we have 14 Q5 be the best candidates putting the factory in the components factories with a total of to be made in North United States? 32,000 employees, and we are America? Made in U.S.A. is a true sales planning other factories outside of Europe. There is still no decision. Mexico's statement for us in this extremely existing duty exemption is an important market and we can expand How many suppliers work argument in its favor: a 10 percent the capacity of our factory in for the VW Group? import duty is levied on cars built in Chattanooga. Another advantage is the United States when they are the strong existing supplier structure. In all, the Volkswagen Group works imported into the EU. The exchange with nearly 30,000 suppliers globally. Chattanooga is your More than 6,000 of them are series of goods is duty-free from Mexico to newest factory. How is its the EU and Mercosur - that is, to production suppliers. operational model? Brazil, Argentina, Uruguay and Will this number increase Paraguay. Moreover, we already have Our facility in Chattanooga is an or decrease? our manufacturing facility in Puebla, absolute milestone when it comes to Mexico. As of 2013, we will have a environmentally compatible It won't increase substantially, if only new engine plant in Silao, Mexico. It production. It is the only auto plant in to reduce our expenses in auditing will produce about 300,000 engines the world to receive the platinum and quality assurance. But there won't annually for North America. LEED certification for sustainable, be any drastic cuts either. In 2011, we generally saw that the catastrophes in Then what is the ecologically friendly construction. It is an absolutely energy-efficient factory. Japan and Thailand hit our rivals argument against Mexico? harder than they hit us, when the Ex-VW brand chief Although Mexico is a large country, companies leaned toward single Wolfgang Bernhard would only its highlands really come under sourcing.

europe.autonews.com/GlobalMonthly March 2012 Sales Volume 01 | Issue 01

Despite economy, Rolls-Royce sees record growth

CEO Mueller-Oetvoes outlines future plans for new markets, fresh products

Rolls-Royce expects another year of grow to 125,000. That fact alone Bentley largely occupies another price record sales despite a potential global makes me optimistic about our segment. The Mulsanne is the only economic downturn. The British prospects. overlap with our portfolio but our ultraluxury brand increased 2011 sales customers don't see their cars as by 31 percent to a record 3,538 units competition. They buy models from last year and has a full order book. both brands. Their garages are like CEO Torsten Mueller-Oetvoes clothes closets, equipped for all of discussed the BMW-owned brand's life's occasions. Rolls-Royce competes future plans, including potential fresh with other luxury goods such as real models and new markets, estate, yachts, fine art or jewelry. withandnbsp;Automotive News Will the product lineup be Europe Editor-in-Chief Harald Hamprecht. expanded? Is Rolls-Royce being hit by We presented the Ghost Extended the economic downturn? Wheelbase at the 2011 Frankfurt auto show to European audiences for the No, our order books are full and we first time. I think the Ghost lends itself are running a three-shift operation. to further derivatives. The Rolls-Royce brand holds its value. Will you launch a Ghost We represent a valuable long-term coupe? asset, particularly in times of uncertain Mueller-Oetvoes says Rolls-Royce has investment opportunities. Some 70 a growing customer base. We have many ideas, but we are in no percent of the Rolls-Royces ever built What are your largest hurry. It might be a coupe. It might be are still on the road. markets? a convertible or something else But if the economy entirely. In general, however, we have Last year, China was the largest worsens, will the no plans to sell a car positioned below market for us followed by the United the Ghost's current price of 250,000 ultraluxury segment see States. euros. And I don't think the sale of weaker sales? Where do you see the cars for more than a million euros will I think it is proving to be more robust greatest potential for be considered. than other segments in the auto growth? Do you have any new industry. We're dealing with people strategies to gain or who are unusually prosperous and China is, of course, an important regain customers? never need to ask, Can I still afford market for Rolls-Royce, but there is this or not? The ultraluxury segment is still great potential in our most I think we have some way to go to still increasing with the proportion of significant market, the United States. realize the full potential of the Ghost ultra-high net worth individuals Germany is currently the fastest and Ghost Extended Wheelbase, forecast to grow by 10 percent each growing market in Europe. We see models we launched over the last two year. There are currently about 90,000 untapped potential there, too. years. Some 80 percent of Ghost ultra-high net worth individuals Is Bentley a growing clients are new to Rolls-Royce. whereas in 10 years, we expect this to competitor for you?

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How will your sales Do you hope to find new San Francisco. We're planning other develop? customers with social facilities for China and Southeast Asia. media? In Europe, Berlin and Hamburg are We expect 2012 to be another record potential locations for new dealers. year but profitability is key and we are Not necessarily. But our presence in a profitable company. We will social media ensures we talk to a What are a dealer's continue to grow steadily, but ours is wider audience through a investments for a new not a volume strategy. For example, contemporary communications Rolls-Royce operation? we have no long-term plans for sales platform. The investment in a showroom is up in five figures. Do you plan new to $350,000 without the real estate. You became CEO in 2010. marketing activities? Are you worried that large What was your biggest Rolls-Royce is the perfect combination ultraluxury cars will challenge so far? of cutting-edge precision engineering become unpopular as The brand has been well run, so I and traditional skills. I think our society becomes more didn't feel the need for radical marketing activities could be thought green? change. Last year, we increased sales of in a similar way, a combination of by 31 percent to 3,538 units and a the modern and traditional. Besides I don't think so. Our engines are trend like that doesn't happen our iPad and iPhone apps and a highly efficient and our 102EX electric automatically. We have been in the growing presence in social media, we Phantom project is the first step in market for more than 100 years, so also continue traditional themes that exploring the potential for alternative perhaps my biggest challenge has our clients value so highly. These powertrains in the long term, but at been in presenting Rolls-Royce in a include one-to-one contact at key this point there is no customer contemporary way. events, such as motor and boat shows demand. Few clients who have driven and luxury briefings. And, of course, 102EX are prepared to charge a How is Rolls-Royce being encouraging clients to visit the home battery for eight hours for a range of given a modern image? of Rolls-Royce in Goodwood, England, just 200km. Marketing initiatives have helped, to experience the unique Rolls-Royce Why aren't you offering such as iPad apps and collaborations ambiance for themselves. diesels? with contemporary icons such as the How is your dealer Partly because, from a global collection of Spirit of Ecstasy-inspired network positioned? portraits taken by celebrity standpoint, diesels are only successful photographer John Rankin Waddel. We work with 87 partners worldwide in Europe. Most importantly though, So, too, has the launch of the Ghost, and opened five new locations in our customers are very clear: however which is reaching a whole new target 2011. Now, we are carefully exploring refined, a diesel could never deliver a group of younger, modern customers. further opportunities such as in true Rolls-Royce experience, effortless America where we still need to make performance and, of course, silence. in-roads in population hubs such as

europe.autonews.com/GlobalMonthly March 2012 Car Cutaway Volume 01 | Issue 01

ZF speeds shifts in new Porsche 911

The latest-generation Porsche 911 flow interruption. In addition, when supplies the 911 with various offers ZF Friedrichshafen AG's fast- paired with the 3.8-liter engine in the electronic and chassis components as shifting dual-clutch transmission as an Carrera S, the dual clutch helps well as the clutch for the seven-speed option. The system helps improve the achieve a 14 percent reduction in fuel manual transmission. -- James Clark sport car's acceleration by enabling consumption compared with the smooth gear changes with no power previous-generation 911. ZF also

europe.autonews.com/GlobalMonthly March 2012 Car Cutaway Volume 01 | Issue 01

Brembo helps reduce weight in new Aston Martin One-77

Italian brake specialist Brembo helped The discs are made from a lightweight The brake rotors are mounted on to Aston Martin reduce weight in its new carbon fiber compound that is disc bells using a so-called "floating One-77 supercar. Brembo fits the impregnated with silicon then baked disc" system. According to Aston One-77 with its so-called "CCM" in a mold at 1,700 degrees Celsius. Martin, this allows the discs to flex discs and brake calipers, which are Brembo says the carbon fiber discs are relative to their mountings, making about 12.5kg lighter than a much tougher than conventional cast them less likely to vibrate. -- James conventional system, the Italian iron discs and that they can dissipate Clark supplier says. heat much more rapidly, which reduces brake fade.

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

China's newest automaker takes aim at VW

Former Mini design boss is styling 'elegant, upscale' Chinese brand

Former VW of America executive VP Volker Steinwascher with Qoros' prototype sedan. Photo credit: Reuters

Stefan Grundhoff sized sedan," Hildebrand told of paper and create a new car from Automotive News Europe during a scratch?" MUNICH - China's newest automaker, visit to Munich, where he has a team Qoros Auto Co., will target Hildebrand is tasked with helping working on designs for cars that will established brands such as Qoros develop an upscale brand of be built in China and exported to Volkswagen and Toyota when it starts vehicles for China and Europe with Europe. sales in Europe, said the brand's elegant appeal that will also earn five- design boss, Gert Hildebrand. "It's an unbelievably exciting project," star crash test ratings from safety said Hildebrand, who oversaw the organization EuroNCAP. The German native led design for expansion of the iconic Mini brand BMW's Mini brand for 10 years until He said Qoros's first model, a sedan, into new variants such as the January 2011 when he joined Qoros will aim to compete with cars such as Countryman, Clubman and Coupe Auto, formerly called Chery Quantum. the Volkswagen Jetta and Toyota models. "When else do you get a Avensis. "We will offer the same "We aim to compete against strong chance to take an almost blank sheet European brands with our new mid-

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

comfort and safety levels but will be Hildebrand aims to give the Qoros failed because of poor build quality significantly less expensive," he said. brand a distinctive design face, with a and poor results in safety tests. Qoros large Q logo positioned in the middle is relying on Western expertise to Hildebrand has design teams in of a black grille. The Q stands for avoid this problem. Besides Munich and in Graz, Austria, where quality. Hildebrand, Qoros has recruited a Magna International Inc. subsidiary team of experienced Western auto Magna Steyr is engineering a range of Qoros is a joint venture between executives. Its vice chairman is Volker Qoros cars that will include a China's Chery Automobile and Steinwascher, former executive vice hatchback and a SUV within its first investment firm Israel Corp., which is president of Volkswagen of America. two years of production, with an a leading investor in Better Place, a electric vehicle coming soon after. U.S.-based EV infrastructure The brand is sourcing components developer. from Western suppliers such as Robert Bosch, Continental and ZF Qoros unveiled a sedan prototype in Friedrichshafen. Austria's AVL is November. A production variant is adapting Chery's gasoline and diesel scheduled to launch in Europe and engines for the brand. China by late 2013. The car will be built at a new factory in Changshu, Qoros plans to sell its cars in key near Shanghai, with an initial European markets. Hildebrand said a Hildebrand: 'Unbelievably exciting 150,000-unit capacity rising to decision on which markets the project.' 300,000, with half the production company will enter has not yet been targeted for export. made, but he said Germany, Europe's Q for quality biggest market, could be one of them. Previous efforts by Chinese automakers to sell cars in Europe have

europe.autonews.com/GlobalMonthly March 2012 Sales Volume 01 | Issue 01

Skoda plans to keep setting sales records

Czech brand has key role in helping parent VW Group reach global No. 1

If Volkswagen Group achieves its goal Skoda's new compact sedan debuts in potential for Skoda. Our goal is clear: of becoming the world's No. 1 Europe. We don't merely want to grow in automaker by 2018 or before, the emerging markets but in our core group's Czech-based Skoda brand will markets as well. have played a big role. Once little Are there are already signs known outside central and eastern Europe, Skoda is becoming a force of an intensified price war farther afield. China is now its biggest in Europe? single market and the brand recently We've been accustomed to tough successfully launched in Australia. competition for years. Skoda has been Juergen Stackmann, head of sales and able to grow tremendously with good marketing, talked about Skoda's vehicle designs, quality and reliability. ambitions with Automotive News For us, this has always involved a solid Europe Editor-in-Chief Harald price-value proposition for our Hamprecht. customers, so we continue forward. Will Skoda stick to its goal Will you launch the Citigo, of annual global sales of Skoda's version of the VW 1.5 million units in 2018? Up, in China and India?

Yes, we intend to sell at least that No, the concept is too costly for that. many in 2018. Last year, we sold Juergen Stackmann Small cars must, above all, be low-cost 879,200 units worldwide, an increase in emerging markets. That criterion of 15.3 percent over the previous How critical is the euro alone doesn't fit in with our quality year. And we plan to continue to debt crisis? and safety standards. We are still grow in 2012. Southern European markets are still looking into a version for emerging Why are you so confident difficult. Portugal, Spain, Italy and markets. As a three- and five-door in such difficult economic Greece are not likely to recover very version, the car was primarily built for times? quickly. Growth in central and eastern Europe. Europe will probably slow significantly Last year showed us that our growth When will your new this year. That said, I am confident strategy is taking hold and Skoda is sedan, to be positioned Skoda will gain ground overall in catching on in our markets. We are between the Fabia and Europe, as well as in global market just launching our current model Octavia, arrive in share due to its growth strategy and offensive. Over the next few years, we European showrooms? model offensive. will deliver a new product to our Our seventh model line will reach the dealers every six months on average. Will Skoda's sales in market in the second half of 2012. That will give us an additional push. western Europe be hit by Two models, the Rapid sedan in India the economic downturn? Will this rival to the and the Citigo minicar, are arriving at Renault Fluence and Our market share is currently just dealerships. This year, the five-door similar models be called under 3 percent in western Europe. version of the Citigo gets rolling and the Rapid? Whatever happens, I see more

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We haven't named it yet, but based The Octavia was our best seller, and are boosting capacity for the on its dimensions, we are positioning making up about 42 percent of total Octavia from 800 to 1,200 units a the car exactly where we positioned sales, followed by the Fabia with day. We are sharply ramping up Yeti the first Octavia generation. In the about 30 percent. The Superb was production in Kvasiny and gearing up coming years, we expect rising global next with a 13 percent share. The Yeti for the production of DQ200 demand in the compact, family- and the Roomster came in fourth and transmissions in Vrchlabi. Expansions oriented sedan segment. fifth. in capacity have also been announced for Russia and China. You recently presented the What movement do you MissionL concept at the expect here? What changes are planned Qatar auto show. How for your dealer network? We intend to grow in each model line. important is this region The rankings will likely remain roughly Over the last year, we have turned to for you? the same. a new brand image to represent the It was the first time that we presented What gaps you see in your company with a fresh green and white in a new three-dimensional the concept outside Europe. In 2011, model portfolio? we sold a little more than 4,000 logo. The Gandouml;thling and vehicles in all of the Middle East. In I can well imagine a larger sibling to Kaufmann dealership in Hofheim, Qatar, the figure was 5,000 vehicles the Yeti in the SUV area and another near Frankfurt, is the first exclusive over the past 10 years. Naturally, derivative of the compact sedan that Skoda partner with the new corporate those are still small numbers on the we are bringing out in the second half design. In the next two to three years, global stage. Still, these markets of the year. we plan to gradually convert our present interesting opportunities. 4,500 dealers around the world to the When might these models new design. Will Skoda launch in be launched? markets such as North Will the number of your This year belongs to the Citigo and dealers also grow? America and South our compact sedan. Then everything America? moves along in quick succession. We We are already well positioned in We have no plans to enter North are executing the largest model western and central Europe. We don't America, Brazil or Argentina. We are offensive in the brand's history. see major growth here, but we naturally want to close any gaps. We focusing on exploiting the potential of What is the capacity our existing regions. We quite recently have also decided not to cancel utilization at your contracts in light of the new block entered Australia. In 2011, we European factories? doubled our sales there to 3,500. exemption that starts in Europe in We have three factories in the Czech 2013. Some dealer relocations will be What are your five Republic. Our main factory is Mlada necessary in individual cases. We are strongest markets in Boleslav and we have plants in Kvasiny now discussing this with our partners. Europe? and Vrchlabi. Among other locations, The same applies to the improvements that are needed in sales and service as In Germany, we are by far the we are manufacturing in a joint well as investments that are due in strongest import brand with more operation with Volkswagen in Pune, existing facilities. than a 4 percent market share in India. Skodas are also built in joint 2011. Our other strong European ventures in Kaluga, Russia, and Will you open new dealers Shanghai, China. All the factories are markets include our home market, the in growth markets? We operating in two- and sometimes Czech Republic, and then the UK and mainly plan to expand our dealer three-shift operations with very high Poland, and then when we look network in China, India and Russia. At use of capacity. somewhat further to the east, Ukraine the end of last year, we already had and Russia. Are you expanding more than 300 dealers in China; What were your most production capacity? about 100 more will be added annually. successful models in 2011? We are now expanding our main factory extensively. We are preparing China, with a volume of for the production of a third model 220,000 vehicles, already

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accounted for one-quarter absolute sales numbers for Europe will million euros. How do the of your global sales last continue to rise. We will simply grow figures look for 2011? year. Will this figure more quickly in Russia, India and We will announce financial data for China. increase? fiscal year 2011 at our annual press We want to continue to grow. How VW Group CEO Martin conference in March. Winterkorn was recently much depends largely on the dynamic What companies are your annoyed that Skoda cars of the market. toughest rivals? such as the Octavia were What other models do you competing too closely Our competitors include Opel, Ford, plan to introduce in with models from the core PSA and Renault, as well as our China? VW brand. Is that still a Korean and Japanese rivals. Given China is already our largest single problem? their growth dynamic, the South market, and that is just five years after Koreans are our toughest rivals. Skoda The overlaps between Skoda and entering it. We are now focused on stands for spaciousness, practicality, Volkswagen are much smaller than three models, the Fabia, Octavia and functionality, good tried-and-tested what people say. We are the Superb, which are manufactured in technology, everyday solutions and company's strategic spearhead in China. The Yeti and the new compact affordability. All our brand values are affordable, spacious vehicles with sedan will follow. reflected in our brand promise: Simply substantial practical benefits. clever. Your China business Winterkorn also criticized sounds very profitable. Skoda's share of VW Skoda for badly handling Group's 2011 unit sales I wouldn't contradict that, especially central and east European was nearly 10 percent. since China is already the largest markets. Will this increase? market for our flagship, the Superb. Today, we're selling more Superbs in There are regional differences. For We want to build good cars and do China than in the rest of the world. example, we are the market leader in our job in the markets. The rest will Poland with more than a 12 percent take care of itself. How dependent are you share. today on Europe? Will you increase you In 2010, Skoda increased work force as part of your Our business is well distributed its sales revenue by 22.4 growth strategy? worldwide. Today 60 percent of our percent to 8.7 billion euros sales are within Europe and 40 and more than doubled Today we have about 28,000 percent are outside of it. By 2018, this operating profit to 447 employees. About 1,600 jobs were ratio will likely be completely reversed. added last year. We will continue to At the same time, I assume that the hire this year.

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

Chinese automakers use UK as testing ground in Europe

Geely, Great Wall see chance for low-cost cars as austerity measures bite

Geely will launch the Emgrand EC7 in the UK this year.

Nick Gibbs Past attempts by Chinese automakers prices will start at 10,000 pounds such as Brilliance and Landwind to (about 11,800 euros) compared with LONDON - Two Chinese automakers gain a foothold in Europe failed when 13,780 pounds for the i30. will use the UK as a testing ground in their vehicles received poor ratings in a new push into Europe. Geely Great Wall will launch its Steed safety tests. Automobile and Great Wall Motor will double-cab pickup in the UK this launch inexpensive cars in the UK this This time, the newcomers are making month (March) through a network of year because the companies believe sure their cars meet Western safety 35 dealers. The Steed will cost 13,998 they can benefit from growing standards. Geely's Emgrand EC7 pounds for the standard model, demand for low-cost models during compact model recently earned four compared with 16,049 pounds for the tough economic times. The Chinese out of five stars in a crash test by entry version of the market leader, the brands also want to take advantage of safety organization EuroNCAP. Mitsubishi L200 double-cab. a move upscale by South Korea's The Emgrand EC7 will go on sale in Value for money Hyundai and Kia. the UK by the end of the year. It is similar in size to the Hyundai i30 but

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"People are looking for a value-for- drives at the potential buyer's home Hegarty said he will "definitely" money brand, a lower cost option. In or workplace. import the H6 Hover medium SUV. the UK automotive market, there's no Cheyne said Geely will be looking to A similar customer-friendly approach one occupying that area anymore," introduce a subcompact car and SUVs. is planned by Geely, which has a link Matthew Cheyne, Geely Auto UK to the UK market through its 20 Both automakers are following MG market development director, told percent ownership of London black Motor, which launched its first China- Automotive News Europe. cab company Manganese Bronze. developed car, the MG6 compact, in Paul Hegarty, managing director of the UK last year. The MG6 is built in "We hope to deliver a slightly Great Wall UK, said a move upscale by Longbridge, England. different customer proposition," the Hyundai and Kia had created a Cheyne said. "Dealers will generally MG parent SAIC is investing heavily to gap. He said the UK is "quite a be small independently owned give MG a wide product lineup receptive market" for new brands. businesses that are on first name targeted at Europe, including the Great Wall has been importing terms with their customers." MG3 small hatchback, MG5 compact vehicles into Italy since 2006 and and an SUV-style crossover to rival the Geely is looking to establish a UK started production in February in a Nissan Qashqai. network of 30 to 40 dealers. It says its new Bulgarian factory that will have UK sales operations will be separate Shanghai-based SAIC inherited the an annual capacity of 50,000 units by from those of Volvo Car Corp., which Longbridge plant through its 2007 2013. Geely bought from Ford in 2010. merger with Nanjing Automobile, Hegarty said Great Wall is focusing on which had bought the site after MG Expanding lineup customer experience instead of high Rover, Britain's biggest domestic showroom standards for its UK Great Wall and Geely both plan to carmaker, collapsed. dealers. One innovation is to offer test expand their UK lineups.

europe.autonews.com/GlobalMonthly March 2012 Latin America Volume 01 | Issue 01

Hurt at home, Peugeot pins hopes on Latin America

7% market share targeted, but brand faces stiff competition

Peugeot will add an ethanol version of the 308 in Brazil.

Bruce Gain But Drouin said Peugeot would face Brazil, the car will be offered with an challenges expanding its market share ethanol-burning engine. PARIS - Peugeot is counting on the in Brazil, South America's biggest 308 to lead the brand's product Along with China and Russia, South market, where industry growth is offensive South America. America is one of the regions where higher than in Europe. This is due to PSA is counting on growth to reduce "[It] is one of the major strategic very tight competition in the region. its dependence on a weak European zones where we want to have growth "There are 58 brands in Brazil and market. PSA expects overall new-car this year," Frederic Drouin, who heads there will be 40 to 50 major product sales in South America to grow 6 Peugeot's operations in the region, launches this year," Drouin said. percent this year compare with a 5 told Automotive News Europe. "The percent decline in the EU. 308 launch is a big part of our The 308 launched in South America investment to increase our volumes in last month (February) replacing the 7% share target Brazil." 307. It is built in parent PSA/Peugeot- The company targets a market share Citroen's plant in Argentina. For in South America of 7 percent by

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2015, up from 5.5 percent last year. Peugeot hopes its car sales in Brazil PSA produces the Peugeot 206, 207 Combined South American sales of will grow to 100,000 in 2012 from Compact, 307, 408, and Partner as the Peugeot and Citroen brands grew 86,000 last year. well as the 308 and the Citroen C4, 10 percent to 325,773 in 2011, with C4 Sedan and Berlingo in Palomar, Production of the 308 is part of PSA's the Peugeot brand accounting for where it manufactured a total of 1.49 billion euro investment in the 190,088 (up 9 percent) of those sales 129,373 vehicles last year.andnbsp; region that began in 2010. Peugeot and Citroen 135,685 (up 13 percent). spent 122 million euros to begin 308 PSA's Porto Real plant in Brazil has a Peugeot will also introduce its 508 production in Palomar, 20km total capacity of 160,000 units a year mid-sized car in the region this year northeast of Buenos Aires, where the and produces the Peugeot 207 and after launching the 408, 3008, and automaker plans to produce 30,000 the Citroen C3 and Xsara Picasso. RCZ models there in 2010. PSA plans units of the model in 2012. Peugeot PSA's work force in South America to launch the Citroen DS upscale car said the plant's 308 output will mainly totals 11,000, with 4,200 employees line in South America in the spring. serve Brazil, PSA's largest market in in Brazil and 5,000 in Argentina. South America, as well as Argentina.

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3 reasons why Volvo will suffer for its foreign status in China

Yang Jian every effort to keep the two brands apart for fear that Volvo's association SHANGHAI -- Despite Volvo Car with Geely, which makes inexpensive Corp.'s Chinese ownership, the cars, will tarnish the Swedish brand. central government views the automaker as a foreign entity, Volvo But now his effort to protect the Chairman Li Shufu admitted last Volvo brand is doomed. To produce month. Volvo cars in China, he must comply with government regulations by That's very bad news for Li and for setting up a joint venture between Volvo, which was acquired 19 months Volvo and Geely. ago by Zhejiang Geely Holding Group Co. Li also is Geely's chairman. Vehicles to be built by the joint venture would carry a Geely Volvo Volvo will suffer for its foreign status badge, which is not something Li for three reasons. wants to see. First, China's government spends The Volvo acquisition established billions of dollars each year on vehicle Geely as a global player. Proud of this procurement. After acquiring Volvo, Li achievement, Li must have lobbied the lobbied Beijing to include Volvo in the Yang Jian is managing editor of Chinese government hard to let the government's procurement program. Automotive News China. brand produce in China on its own. But with Volvo considered a foreign Volvo -- like any foreign automaker -- But obviously, he failed. In a global automaker, government agencies are will have to form a joint venture with age, insular Chinese government less likely to procure their vehicles a Chinese company, create a separate officials insist that an international from the company. brand for the partnership and produce electric vehicles in China. brand owned by a domestic company Second, if Volvo is treated as a foreign is still foreign. company, government permission to Volvo intends to form a joint venture What an irony! But Li must grin and produce vehicles in China will be with Geely. But this takes time, and it bear it. delayed. will delay Volvo's plans to build vehicles in China. All Li can do is hope for quick Li wants to sell a lot of Volvo cars in government approval of a Geely-Volvo China to help revive the brand. But Third, with Volvo considered a foreign joint venture so that he can produce the cars must be built in China to company, the automaker's image will Volvo cars in China as soon as avoid hefty import duties. suffer. possible. Li sees Volvo as a luxury brand. Since Geely acquired Volvo, he has made

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

China carmakers may face backlash overseas with new government-fleet rules

Bloomberg News Dayna Hart, a Shanghai-based Assessing effect spokeswoman for GM, didn't SHANGHAI -- China's exclusion of The European Chamber will work with immediately respond when contacted. foreign automakers from a proposed its members to assess the effect of the Daimler AG and Guangzhou list of fleet suppliers may prompt proposal and may formally approach Automobile Group Co. also didn't other countries to make it harder for the government to contest it, Moens immediately respond when reached. the nation's carmakers to expand, the said. European Union Chamber of Nissan "respects the government's The suggested procurement rules Commerce in China said. laws and regulations," Shen Li, a come less than two months after Beijing-based spokeswoman for the "As an industry you cannot expect to Premier Wen Jiabao's government company, said in a mobile text be warmly welcomed outside of your took conventional automaking off the message. Liu Peng, a Beijing-based country, if at the same time you start "encouraged" foreign direct spokesman for Toyota, said the closing the industry in your country," investment list. company doesn't comment on Dirk Moens, secretary general of the government policies. The move ended preferential chamber, whose members include treatment from the government for Volkswagen AG and Daimler AG, said Overseas brands have accounted for foreign automakers that build Monday. about 80 percent of the official factories in the country. vehicle pool in China, with China issued a preliminary list on Feb. Volkswagen's Audi making up about Great Wall, China's biggest SUV 25 of vehicles that could be purchased one-third of government and state- maker, is investing as much as $120 by some official fleets and foreign linked enterprise fleets, according to million on a car assembly plant in carmakers including Volkswagen, Guotai Junan Securities Co. Bulgaria which opened last week, General Motors and Toyota Motor Xinhua reported Feb. 22. Corp. were not on it. The preliminary list is open for public consultation until March 9, according A Chinese-led investment group If approved, the list would give to the Ministry of Industry and including Geely bought Volvo from domestic automakers an advantage in Information Technology. Ford Motor Co. for $1.8 billion in a fleet market worth about 80 billion August 2010, completing the biggest yuan ($12.7 billion), China The openness of European countries overseas acquisition by a Chinese International Capital Corp., a Beijing- that enabled Great Wall Motor Co. carmaker. based investment bank, said in a and Zhejiang Geely Holding Group report today. Co. to make European investments may not be repeated, Moens said. Red flag

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Europe sales by model, January

Jan. 2012 Jan. 2011 Unit change % change V8/V12 Vantage 77 65 +12 +19% DBS 21 34 -13 -38% Rapide 13 29 -16 -55% Other 68 27 +41 +152% ASTON MARTIN 179 155 +24 +16% Niva/Taiga 155 272 -117 -43% Other 17 82 -65 -79% AVTOVAZ 172 354 -182 -51% 1 series 10,706 8,198 +2,508 +31% 3 series 8,947 10,083 -1,136 -11% 5 series 9,301 13,133 -3,832 -29% 7 series 1,017 1,074 -57 -5% Z4 587 434 +153 +35% 6 series 630 118 +512 +434% X1 4,517 6,643 -2,126 -32% X3 5,681 3,825 +1,856 +49% X5 1,626 2,224 -598 -27% X6 982 1,314 -332 -25% Other 54 46 +8 +17% Total BMW brand 44,048 47,092 -3,044 -7% Mini 6,313 6,034 +279 +5% Countryman 3,621 3,358 +263 +8% Total Mini 9,934 9,392 +542 +6% Ghost 33 32 +1 +3% Phantom 13 18 -5 -28% Other 1 - +1 - Total Rolls-Royce 47 50 -3 -6% BMW AG 54,029 56,534 -2,505 -4% Maybach 4 3 +1 +33% A class 5,170 5,533 -363 -7% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

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Jan. 2012 Jan. 2011 Unit change % change B class 7,034 5,145 +1,889 +37% C class 13,131 10,945 +2,186 +20% E class 8,155 9,311 -1,156 -12% S class 680 544 +136 +25% CLS 1,098 751 +347 +46% CLC 1 403 -402 -100% SLK 1,123 311 +812 +261% SL 67 93 -26 -28% SLS AMG 150 197 -47 -24% R class 272 392 -120 -31% GLK 2,092 2,847 -755 -27% Vito/Viano 1,838 1,771 +67 +4% Sprinter 387 421 -34 -8% M class 2,846 2,002 +844 +42% G class 190 183 +7 +4% GL 137 244 -107 -44% Other 123 187 -64 -34% Total Mercedes-Benz 44,494 41,280 +3,214 +8% ForTwo 5,646 6,377 -731 -12% Other - 4 -4 -100% Total Smart 5,646 6,381 -735 -12% DAIMLER AG 50,144 47,664 +2,480 +5% DR1 9 432 -423 -98% DR5 48 110 -62 -56% Other 40 12 +28 +233% DR MOTOR COMPANY 97 554 -457 -83% Ypsilon 67 - +67 - Delta 21 - +21 - 300C 18 95 -77 -81% Grand Voyager/Town & Country 43 431 -388 -90% Other 9 33 -24 -73% Total Chrysler brand 158 559 -401 -72% Caliber 14 113 -99 -88% Journey 2 199 -197 -99% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

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Jan. 2012 Jan. 2011 Unit change % change Other 53 56 -3 -5% Total Dodge 69 368 -299 -81% Compass 868 53 +815 +1538% Patriot 30 419 -389 -93% Wrangler 557 468 +89 +19% Cherokee/Liberty 87 200 -113 -57% Grand Cherokee 763 329 +434 +132% Other 4 8 -4 -50% Total Jeep 2,309 1,477 +832 +56% Total Other 1 - +1 - CHRYSLER GROUP 2,537 2,404 +133 +6% 2,605 3,622 -1,017 -28% Giulietta 5,938 7,371 -1,433 -19% 159 418 934 -516 -55% Other 22 342 -320 -94% Total Alfa Romeo 8,983 12,269 -3,286 -27% 458 Italia 158 173 -15 -9% California 37 68 -31 -46% FF 89 - +89 - 599 GTB Fiorano 7 37 -30 -81% Other 3 17 -14 -82% Total Ferrari 294 295 -1 -0% 500 11,536 12,437 -901 -7% Panda 15,176 16,466 -1,290 -8% Punto 13,966 21,204 -7,238 -34% Albea 151 627 -476 -76% Linea 975 752 +223 +30% Bravo 1,666 3,517 -1,851 -53% Idea 572 733 -161 -22% Sedici 654 1,409 -755 -54% Freemont 2,101 - +2,101 - Fiorino/Qubo 1,415 1,764 -349 -20% Doblo 905 1,354 -449 -33% Ducato 721 585 +136 +23% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

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Jan. 2012 Jan. 2011 Unit change % change Other 215 868 -653 -75% Total Fiat brand 50,053 61,716 -11,663 -19% Ypsilon 6,255 4,177 +2,078 +50% Musa 823 1,616 -793 -49% Delta 1,173 1,936 -763 -39% Thema 165 - +165 - Voyager 450 - +450 - Other 1 46 -45 -98% Total Lancia 8,867 7,775 +1,092 +14% GranTurismo 56 78 -22 -28% GranCabrio 36 31 +5 +16% Quattroporte 14 39 -25 -64% Total Maserati 106 148 -42 -28% Other 39 36 +3 +8% FIAT S.P.A. 68,342 82,239 -13,897 -17% FIAT-CHYRSLER 70,879 84,643 -13,764 -16% Ka 7,108 6,964 +144 +2% Fiesta 24,297 28,647 -4,350 -15% Focus 23,154 21,922 +1,232 +6% Mondeo 6,956 7,489 -533 -7% Fusion 1,139 1,675 -536 -32% C-Max/Grand C-Max 9,825 9,893 -68 -1% S-Max 4,127 4,143 -16 -0% Galaxy 2,041 2,318 -277 -12% Kuga 5,440 5,546 -106 -2% Transit/Tourneo 1,195 1,095 +100 +9% Other 113 259 -146 -56% Total Ford brand 85,395 89,951 -4,556 -5% Lincoln 1 2 -1 -50% Mercury 1 1 +0 +0% FORD MOTOR 85,397 89,954 -4,557 -5% Geely 66 35 +31 +89% C30 1,066 1,319 -253 -19% S40 1,032 861 +171 +20% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

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Jan. 2012 Jan. 2011 Unit change % change V50 3,577 3,463 +114 +3% S60 1,636 2,432 -796 -33% V60 3,207 2,841 +366 +13% V70/XC70 4,228 3,630 +598 +17% S80 403 434 -31 -7% C70 182 264 -82 -31% XC60 4,785 5,144 -359 -7% XC90 925 994 -69 -7% Other 29 36 -7 -19% Total Volvo 21,070 21,418 -348 -2% GEELY GROUP 21,136 21,453 -317 -2% Cadillac 70 52 +18 +35% Matiz/Spark 5,142 5,971 -829 -14% Aveo 4,632 3,405 +1,227 +36% Cruze 2,734 1,767 +967 +55% Captiva 2,229 1,580 +649 +41% Orlando 2,069 188 +1,881 +1001% Other 113 604 -491 -81% Total Chevrolet 16,919 13,515 +3,404 +25% GMC 2 1 +1 +100% Hummer 3 8 -5 -63% Astra/Astra Classic 17,710 21,934 -4,224 -19% Insignia 8,786 9,410 -624 -7% Meriva 5,548 11,277 -5,729 -51% Zafira 6,635 4,576 +2,059 +45% Antara 1,143 424 +719 +170% Agila 1,991 2,467 -476 -19% Corsa 15,864 23,140 -7,276 -31% Vivaro 479 414 +65 +16% Ampera 192 - +192 - Other 297 446 -149 -33% Total Opel/Vauxhall 58,645 74,088 -15,443 -21% Other - 2 -2 -100% GENERAL MOTORS 75,639 87,666 -12,027 -14% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

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Jan. 2012 Jan. 2011 Unit change % change Hover 2 86 -84 -98% Steed 40 55 -15 -27% Other 2 - +2 - GREAT WALL 44 141 -97 -69% Jazz 3,909 3,258 +651 +20% Civic 2,610 3,234 -624 -19% Insight 442 610 -168 -28% Accord 917 1,074 -157 -15% CR-Z 269 290 -21 -7% CR-V 2,257 3,495 -1,238 -35% Other 7 104 -97 -93% HONDA MOTOR 10,411 12,065 -1,654 -14% i10 6,408 5,301 +1,107 +21% i20 5,375 4,659 +716 +15% i30 5,652 7,490 -1,838 -25% i40 2,226 1 +2,225 +222500% ix20 3,940 3,102 +838 +27% ix35 8,494 6,400 +2,094 +33% Genesis 126 115 +11 +10% Santa Fe 1,066 1,199 -133 -11% H-1/Starex/Satellite 158 177 -19 -11% Accent 830 1,685 -855 -51% Elantra 320 1 +319 +31900% Veloster 467 2 +465 +23250% Other 142 487 -345 -71% Total Hyundai brand 35,204 30,619 +4,585 +15% Picanto 5,404 3,203 +2,201 +69% Rio 6,425 1,127 +5,298 +470% Cee'd 5,326 5,271 +55 +1% Venga 2,536 3,676 -1,140 -31% Soul 696 1,194 -498 -42% Sportage 6,287 4,995 +1,292 +26% Sorento 1,025 1,200 -175 -15% Other 401 358 +43 +12% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change Total Kia 28,100 21,024 +7,076 +34% HYUNDAI-KIA 63,304 51,643 +11,661 +23% Mahindra 13 56 -43 -77% Korando 377 241 +136 +56% Actyon 1 34 -33 -97% Rexton 41 66 -25 -38% Rodius/Stavic 45 55 -10 -18% Kyron 76 148 -72 -49% Total Ssangyong 540 544 -4 -1% MAHINDRA & MAHINDRA 553 600 -47 -8% MX-5 356 343 +13 +4% Mazda2 2,671 3,088 -417 -14% Mazda3 2,343 3,085 -742 -24% Mazda6 1,655 2,974 -1,319 -44% Mazda5 1,184 2,550 -1,366 -54% CX-7 646 1,074 -428 -40% Other 40 244 -204 -84% MAZDA 8,895 13,358 -4,463 -33% Lancer 644 1,244 -600 -48% ASX 3,861 4,012 -151 -4% i 70 253 -183 -72% Colt 1,522 2,041 -519 -25% Outlander 1,359 1,549 -190 -12% Pajero/Montero/Shogun 443 533 -90 -17% Other 92 243 -151 -62% MITSUBISHI 7,991 9,875 -1,884 -19% Elise 10 21 -11 -52% Evora 24 25 -1 -4% Other 3 12 -9 -75% Total Lotus 37 58 -21 -36% Proton 154 99 +55 +56% PROTON 191 157 +34 +22% C-Zero 80 42 +38 +91% C1 5,322 7,188 -1,866 -26% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change C3 13,466 16,022 -2,556 -16% DS3 5,610 5,902 -292 -5% C4 8,490 8,675 -185 -2% DS4 2,825 45 +2,780 +6178% C4 Aircross 3 - +3 - C-Crosser 240 366 -126 -34% Nemo 362 619 -257 -42% C5 3,739 6,306 -2,567 -41% C3 Picasso 4,711 5,764 -1,053 -18% Xsara Picasso 3 1,142 -1,139 -100% C4 Picasso/Grand C4 Picasso 6,785 8,851 -2,066 -23% C8 306 418 -112 -27% Berlingo 3,788 4,171 -383 -9% Other 1,564 574 +990 +173% Total Citroen 57,294 66,085 -8,791 -13% iOn 146 58 +88 +152% 107 6,955 8,536 -1,581 -19% 206 3,865 10,090 -6,225 -62% 207 18,340 21,056 -2,716 -13% 308 11,697 13,408 -1,711 -13% 407 41 2,011 -1,970 -98% 508 8,203 1,986 +6,217 +313% RCZ 936 1,552 -616 -40% 3008 8,440 9,617 -1,177 -12% 4008 7 - +7 - 5008 4,646 5,899 -1,253 -21% 807 355 443 -88 -20% 4007 235 390 -155 -40% Bipper 495 852 -357 -42% Partner/Ranch 2,580 3,303 -723 -22% Expert 349 294 +55 +19% Other 503 170 +333 +196% Total Peugeot 67,793 79,665 -11,872 -15% PSA 125,087 145,750 -20,663 -14% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change M 113 27 +86 +319% EX 31 35 -4 -11% FX 141 174 -33 -19% Other 12 32 -20 -63% Total Infiniti 297 268 +29 +11% Pixo 882 1,464 -582 -40% Micra 5,646 3,117 +2,529 +81% Juke 9,109 8,997 +112 +1% Leaf 323 3 +320 +10667% Qashqai 17,374 17,302 +72 +0% 370Z 47 86 -39 -45% Note 1,866 2,716 -850 -31% X-Trail 804 922 -118 -13% Pathfinder 220 315 -95 -30% Murano 233 259 -26 -10% NV200 359 227 +132 +58% Other 267 515 -248 -48% Total Nissan 37,130 35,923 +1,207 +3% NISSAN 37,427 36,191 +1,236 +3% Sandero 7,069 7,305 -236 -3% Logan 3,605 2,458 +1,147 +47% Duster 9,715 10,944 -1,229 -11% Other - 1 -1 -100% Total Dacia 20,389 20,708 -319 -2% Twingo 8,527 14,668 -6,141 -42% Clio 18,683 26,175 -7,492 -29% Symbol/Thalia 1,751 3,458 -1,707 -49% Megane 14,509 19,706 -5,197 -26% Fluence 2,562 2,962 -400 -14% Laguna 2,775 2,994 -219 -7% Latitude 363 1,099 -736 -67% Wind 136 583 -447 -77% Modus/Grand Modus 2,097 3,710 -1,613 -44% Scenic/Grand Scenic 10,499 12,025 -1,526 -13% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change Espace/Grand Espace 972 941 +31 +3% Koleos 1,184 1,396 -212 -15% Kangoo 2,522 3,563 -1,041 -29% Trafic 805 814 -9 -1% Other 126 38 +88 +232% Total Renault brand 67,511 94,132 -26,621 -28% RENAULT 87,900 114,840 -26,940 -24% RENAULT-NISSAN 125,327 151,031 -25,704 -17% 9-3 67 1,298 -1,231 -95% 9-5 45 589 -544 -92% Total Saab 112 1,887 -1,775 -94% SWEDISH AUTOMOBILE 112 1,887 -1,775 -94% Impreza 652 740 -88 -12% Legacy/Outback 662 1,140 -478 -42% Trezia 162 39 +123 +315% Forester 1,279 1,293 -14 -1% Other 28 289 -261 -90% SUBARU 2,783 3,501 -718 -21% Alto 1,615 3,555 -1,940 -55% Splash 1,286 1,432 -146 -10% Swift 4,873 4,936 -63 -1% Kizashi 212 193 +19 +10% Jimny 1,417 1,304 +113 +9% SX4 2,645 3,127 -482 -15% Vitara/Grand Vitara/XL-7 1,163 1,473 -310 -21% Other 7 4 +3 +75% SUZUKI 13,218 16,024 -2,806 -18% ` XF 1,448 1,098 +350 +32% XJ 183 351 -168 -48% XK 123 140 -17 -12% Other 16 22 -6 -27% Total Jaguar 1,770 1,611 +159 +10% Defender 117 135 -18 -13% Freelander 1,421 2,444 -1,023 -42% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change Discovery 1,033 1,073 -40 -4% Range Rover Evoque 4,425 - +4,425 - Range Rover Sport 1,489 1,551 -62 -4% Range Rover 513 774 -261 -34% Other 19 14 +5 +36% Total Land Rover 9,017 5,991 +3,026 +51% Indica 53 177 -124 -70% Xenon 21 37 -16 -43% Other 5 88 -83 -94% Total Tata brand 79 302 -223 -74% TATA MOTORS 10,866 7,904 +2,962 +38% Cuore/Charade 113 222 -109 -49% Sirion 70 254 -184 -72% Materia 3 54 -51 -94% Terios 237 599 -362 -60% Other 3 2 +1 +50% Total Daihatsu 426 1,131 -705 -62% CT 2,357 25 +2,332 +9328% IS 303 472 -169 -36% RX 606 833 -227 -27% Other 31 66 -35 -53% Total Lexus 3,297 1,396 +1,901 +136% iQ 859 1,584 -725 -46% Aygo 5,390 7,739 -2,349 -30% Yaris 14,068 12,773 +1,295 +10% Auris 6,045 9,678 -3,633 -38% Corolla 1,519 2,889 -1,370 -47% Prius 1,618 2,525 -907 -36% Avensis 6,082 6,390 -308 -5% Verso-S 2,548 327 +2,221 +679% Verso 3,002 3,051 -49 -2% Urban Cruiser 451 812 -361 -45% RAV4 3,265 4,419 -1,154 -26% Land Cruiser 891 1,168 -277 -24% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change Other 63 163 -100 -61% Total Toyota brand 45,801 53,518 -7,717 -14% TOYOTA MOTOR 49,524 56,045 -6,521 -12% A1 6,655 8,784 -2,129 -24% A3/S3/RS3 9,840 7,506 +2,334 +31% A4/S4/RS4 8,483 11,889 -3,406 -29% A6/S6/RS6/allroad 9,563 5,045 +4,518 +90% A7 957 1,498 -541 -36% A8/S8 605 1,017 -412 -41% TT 654 1,228 -574 -47% A5/S5/RS5 4,782 4,891 -109 -2% R8 53 113 -60 -53% Q3 4,727 - +4,727 - Q5 4,628 5,321 -693 -13% Q7 664 1,068 -404 -38% Other 31 19 +12 +63% Total Audi 51,642 48,379 +3,263 +7% Continental GT/GTC 171 60 +111 +185% Continental Flying Spur 17 22 -5 -23% Mulsanne 10 34 -24 -71% Other 1 4 -3 -75% Total Bentley 199 120 +79 +66% Bugatti 1 1 +0 +0% Aventador 18 - +18 - Gallardo 18 19 -1 -5% Total Lamborghini 36 19 +17 +90% Boxster 77 178 -101 -57% Cayman 128 138 -10 -7% 911 969 785 +184 +23% Panamera 891 425 +466 +110% Cayenne 1,426 1,510 -84 -6% Other 23 27 -4 -15% Total Porsche 3,514 3,063 +451 +15% Altea 2,515 2,645 -130 -5% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Data Volume 01 | Issue 01

Jan. 2012 Jan. 2011 Unit change % change Alhambra 1,582 1,320 +262 +20% Mii 121 - +121 - Ibiza 9,789 13,476 -3,687 -27% Leon 4,345 4,645 -300 -7% Exeo 1,274 2,020 -746 -37% Other 3 3 +0 +0% Total Seat 19,629 24,109 -4,480 -19% Citigo 192 - +192 - Fabia 11,825 12,077 -252 -2% Octavia 16,693 13,326 +3,367 +25% Superb 4,276 4,545 -269 -6% Roomster 2,250 1,876 +374 +20% Yeti 5,403 3,963 +1,440 +36% Other 37 78 -41 -53% Total Skoda 40,676 35,865 +4,811 +13% Up 3,334 - +3,334 - Fox 226 1,414 -1,188 -84% Polo 26,629 29,455 -2,826 -10% Golf 37,165 37,391 -226 -1% Golf Plus 5,085 6,334 -1,249 -20% Jetta 3,043 3,472 -429 -12% Passat 18,062 15,809 +2,253 +14% CC 1,048 2,284 -1,236 -54% Phaeton 192 212 -20 -9% Scirocco 1,466 2,117 -651 -31% Eos 382 1,014 -632 -62% Touran 8,191 9,825 -1,634 -17% Sharan 2,978 4,177 -1,199 -29% Tiguan 12,875 9,509 +3,366 +35% Touareg 1,687 1,471 +216 +15% Caddy 3,335 3,442 -107 -3% Transporter/Caravelle/Multivan/Shuttle/T5 4,237 3,451 +786 +23% Other 1,671 658 +1,013 +154% Total VW brand 131,606 132,035 -429 -0% Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

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Jan. 2012 Jan. 2011 Unit change % change Other 2 3 -1 -33% VOLKSWAGEN 247,305 243,594 +3,711 +2% OTHER 712 514 +198 +39% OTHER (China automakers) 234 288 -54 -19% GRAND TOTAL 1,024,229 1,103,354 -79,125 -7%

Note: Excludes models registered as commercial vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

europe.autonews.com/GlobalMonthly March 2012 Hyundai Volume 01 | Issue 01

Hyundai's Chung builds automaker's clout, profits

John Lippert and Alan Ohnsman about management, governance and investor relations -- and evolving a SEOUL (Blooomberg) -- Hyundai model of capitalism that straddles East Motor Co. Chairman Chung Mong and West. Koo crosses the stage for his New Year's address, his heels clicking as "Chung is working night and day to 600 employees wait in silence. prove the Koreans are as good as anybody," says Kishore Mahbubani, Wearing a blue pinstriped suit, blue dean of the Lee Kuan Yew School of sweater and red tie, the 73-year-old "We have the unyielding will to make Public Policy at the National University son of Hyundai's founder praises challenges into opportunities," says of Singapore. "This is drive and workers for building the world's fifth- Chung Mong Koo. determination of the first order. It's largest automaker. Then he considers Most profitable helping shift the weight of history the year ahead. Hyundai and its Kia Motors Corp. back to Asia." Europe's debt crisis will trim global affiliate are the most profitable of the Building from last place growth, Chung says, yet he sees a world's top six automakers, with a bright side: Hyundai will have time to combined operating margin of 9.21 Dead last in J.D. Power and Associates improve quality to take on the likes of percent. Chung has dashed quality surveys in 1994, Hyundai BMW and Mercedes -- making a full- preconceptions -- and jokes -- about Motor spent years as fodder for late- speed run at becoming what he calls quality as customers kept factories night comedians. Chung, whose an ilryu giup, a global top player, that make Hyundais humming at 104 father built postwar Korea's bridges Bloomberg Markets magazine reports percent of planned capacity last year. and expressways, took over in 1998. in its April issue. He bought Kia from creditors during a Once known as the builder of bankruptcy auction that year and "We have the unyielding will to make utilitarian cars like the $4,995 Excel insisted his cars would match the challenges into opportunities," he subcompact, Hyundai has emerged as quality of Toyota Motor Corp. He says. The throng assembled at an industry contender. Its 2012 lineup backed that claim with a 10-year Hyundai's Seoul headquarters includes the $12,545 Accent and the engine warranty. applauds. $59,000 Equus premium sedan. Its In 2004, he scrapped the boxy look of With unbridled ambition, clout Elantra compact was named North a prototype for the Genesis luxury unmatched in most executive suites American Car of the Year in January. sedan in favor of a crouching, athletic and workers who labor more hours At the Namyang research center 30 style -- later luring Bavarian-born Peter than almost any on earth, Chung has miles (48 kilometers) southwest of Schreyer, the designer of Audi AG's fashioned Hyundai Motor Group into Seoul, Hyundai is looking toward TT Coupe, to overhaul Kia's lineup. South Korea's second-biggest chaebol luxury models and green technologies. and elevated the motor company to Some 250 engineers dedicated to fuel In 2005, as Korea's won strengthened its centerpiece. cells hold hundreds of patents on the against the U.S. dollar, Chung ordered battery-like devices that combine cost cutting to ensure the automaker hydrogen and oxygen to make would earn money even if the won electricity and leave behind only heat surged. The company opened its first and water. U.S. assembly plant that year.

As Hyundai's momentum grows, it's By 2011, Hyundai Motor had become challenging conventional wisdom the jewel among the 63 companies in

europe.autonews.com/GlobalMonthly March 2012 Hyundai Volume 01 | Issue 01

the chaebol, the family-controlled "We're concerned about Hyundai to comment for this story, Ahrens conglomerate that reported 129.6 buying companies that really don't says. trillion won ($115.7 billion) in revenue affect its core motor business, Eui Sun's performance? in the year ended that April. The because we don't know what they're carmaker's profit increased 35 percent going to buy next," says Kim Byung Another future issue facing the to 8.1 trillion won in the 2011 Kwan, an analyst at Mirae Asset company is that no one can assess calendar year; revenue climbed 16 Securities Co. in Seoul,. Affiliates of how Eui Sun will perform when he percent to 77.8 trillion won. Kim's company, including Mirae Asset becomes chairman because his father Operating profit margin was triple MAPS Investment Management Co., keeps him on a tight leash. Toyota's 3.08 percent, according to owned 595,428 Hyundai Motor Ultimately, Chung may do in cars data compiled by Bloomberg. shares on Sept. 30. what Korea's No. 1 chaebol, Samsung Investors are taking note. Hyundai As presidential politics heat up before Group, has accomplished in Motor shares more than tripled since the December election, Koreans are televisions: push Japanese rivals into Lehman Brothers Holdings Inc.'s questioning whether chaebols have decline, says Kei Nihonyanagi, a September 2008 bankruptcy, trading too much clout and whether their ties Barclays Capital analyst in Tokyo. "The at 216,000 won on Feb. 29. Chung is to government are too strong. key management issue for Japanese riding the surge. The value of his automakers is to again surpass At Hyundai, a Seoul court in 2007 public stockholdings in five companies Hyundai in cost and quality," he says. convicted Chung of selling chaebol in the Hyundai chaebol was $6.01 securities to his son at below-market In his January address, Chung warned billion on Feb. 29. The shares of his prices. First, the elder Chung received of tougher competition. GM sold 9.03 only son and heir apparent, Chung Eui a three-year suspended sentence. million vehicles last year, enough to Sun, 41, totaled $2.4 billion, Then in 2008, Korean President Lee reclaim its top global sales ranking. Bloomberg data show. Myung Bak, a former Hyundai Net income soared to $9.19 billion, Investor concerns executive, pardoned him. the most in its 103-year history. Toyota expects a 21 percent sales Hyundai has stirred up some investor Last year, a company for which increase during 2012. concerns. Standard and Poor's Chung's eldest daughter, Chung Sung complained in August that Chung's Yi, acts as an adviser set up coffee By the time Eui Sun takes over, Chung crossholdings in chaebol companies shops in Hyundai headquarters and at may have completed a 100-story let him handpick directors. a company-owned resort. Some chaebol headquarters and Hyundai Shareholders question whether last Koreans blasted Hyundai for nepotism may have gained recognition as a year's $4.4 billion purchase of and crowding out entrepreneurs. fuel-cell leader. What would remain Hyundai Engineering and for Eui Sun is to harness Korea's President Lee in January asked all Construction Co., which builds capitalism even with Toyota and GM large conglomerates to respond to subways in the Philippines and power poised to roar back. such grievances. Hyundai will run the plants in Iraq, was a stroke of business shops as nonprofits, spokesman Frank Rose Kim contributed to this report. acumen or a ploy to win a family Ahrens says. Chung was unavailable feud.

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

Why PSA link-up is just the start of GM's European fix

Mike Colias not a replacement" for more- to more than 90 percent capacity at immediate European restructuring, GM's North American plants. DETROIT -- General Motors' freshly said GM Vice Chairman Steve Girsky, inked alliance with PSA/Peugeot- "It is not clear that a tie-up between GM's point man for fixing Europe as Citroen raises a lot of questions that GM and PSA would do anything to head of Opel's supervisory board. we won't be able to answer for years. address this situation," Jonas concluded in a research note written But there's one thing we know with last week as reports of the alliance certainty now: The pact is only the swirled. first big move by GM to fix its money- losing European operations. The capacity problem is the primary reason for the red ink that GM That's because none of the $2 billion continues to spill in Europe: $747 in annual savings that the automakers million last year, and some $13 billion project they eventually will split evenly since the late 1990s. from joint purchasing and sharing platforms and capital expenditures will Even before the pact announced show up any time soon. Wednesday, naysayers were questioning the merits of the deal for The first jointly produced vehicles -- GM: mostly small and mid-sized cars -- won't arrive until 2016. Sure, there • How does combining the might be some capital savings leading efforts of two weak players up to that date. But any savings from in Europe help both? the greater purchasing heft must wait • If a big chunk of the savings until then. should come from purchasing power, won't (It's also too early to know what it Mike Colias covers General Motors for Automotive News that disproportionately means for GM's product lineup. Given benefit the much-smaller that it's billed as a "global" pact, "We look at this as adding additional PSA? vehicles built on GM-PSA joint tools to the tool kit," he says. • What about GM's spotty platforms could show up in U.S. Translation: GM needs to stop the track record with past showrooms as Chevys or Buicks, GM bleeding in Europe now, and closing alliances, such as a acknowledged.) plants and laying off workers are the 2000-2005 tie-up with Fiat But it's clear that overcapacity is the likely next steps (if GM can push it that included a similar biggest thorn in the side of Opel, through its European unions and purchasing arrangement? GM's European unit. Leaders from public officials). GM executives will have plenty time to both automakers made plain in Opel's assembly plants operated at answer those and prove the skeptics comments to analysts and reporters about 70 percent capacity last year, a wrong. They have far less time to fix Wednesday that their pact won't do figure that likely will fall to 65 percent the more-pressing issue of GM's anything to pare those costs. this year, Morgan Stanley analyst bloated cost structure in Europe. "The most critical message we want Adam Jonas estimates. That compares to address here is that this alliance is

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

Nissan-Dongfeng truck exit may yield Infiniti, Renault cars

Reuters The tieup with Volvo is intended to vehicles in China. Instead it relies on shore up Dongfeng's heavy truck exports, but high tariffs have made its BEIJING -- Nissan Motor Co. and business, the report said. model lineup uncompetitive in the Dongfeng Motor Group will spin off world's largest auto market. the heavy truck segment of their joint To get Nissan's consent, Dongfeng's venture to Dongfeng's state parent, joint venture with Nissan would Under the Dongfeng-Nissan deal, paving the way for local production of support production of Nissan's Infiniti Dongfeng Motor Corp., will take over Renault and Infiniti cars. luxury brand vehicles as well as the venture's heavy truck unit on July Renault cars. 1, the report said. Nissan's passenger car business in the joint venture will remain intact, as will Dongfeng's spokesman could not be However it did not give a timetable its light commercial truck production reached for comment. A Nissan for any Dongfeng-Volvo truck with Shanghai-listed Dongfeng representative said the firm had no partnership or local production of Automobile Co, reported the Chinese information on the deal. Infiniti and Renault cars. Web site sina.com, citing unspecified Renault SA, part of the Nissan-Renault sources. alliance, does not produce any

europe.autonews.com/GlobalMonthly March 2012 Marketing Volume 01 | Issue 01

Volvo scores global endorsement deal with Jeremy Lin

NEW YORK -- Volvo Cars has signed fame amid a eruption of "Linsanity," New York Knicks point guard Jeremy blogs in both Mandarin and English. Lin to a global endorsement deal and His Twitter feed has more than will announce details today in New 664,000 followers. York City. Volvo, which had been owned by Ford Volvo is owned by China's Zhejiang Motor Co. before it was bought in Geely Holding Group Co. Volvo says Lin "is expected to help in 2010 by Geely, has long been known According to a statement from Volvo, the marketing efforts of Volvo in in the United States for safety and Lin "is expected to help in the several international markets and help reliability, and its station wagons marketing efforts of Volvo in several establish the brand with younger and became a symbol of suburban performance-oriented customers." international markets and help affluence in the 1980s. establish the brand with younger and In an interview in Germany in In the United States, Volvo's sales rose performance-oriented customers." September, Volvo's head of global 214 percent last year to 67,240 units. marketing, Richard Monturo, said the Lin, 23, was born in the United States U.S. deliveries have advanced 7 company is focusing on social media of Taiwanese immigrant parents. He is percent this year to 9,724 through and digital. expected to become the focus of an February. ad campaign for the brand's "We think the primary device in auto Lin was signed by the Knicks late last important, and expanding, Chinese marketing is the internet," Monturo year after appearing in 29 games with automotive market. said. "We have teams focusing on Golden State. how we can upgrade the user Volvo hopes to double its global sales experiences in all our social presences. In his 12 starts before the All-Star to 800,000 by 2020; it sold about We're using the 'designed around break, Lin averaged 22.5 points and 47,000 cars in China last year. you' idea but trans-creating around 8.7 assists, and New York had a the world." 9andndash;3 record.

Lin may fit with that strategy. The 6-foot-3-inch guard ascended to NBA

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

Consumers' car complaints rise 21% in 2011, China regulators say

Automotive News China Administration of Quality Supervision, old. One-third involved vehicles that Inspection and Quarantine. were one to two years old, and 15 China regulators say 8,840 consumers percent involved vehicles that were filed complaints about their vehicles The state production quality regulator two to three years old. last year, up nearly 21 percent from said nearly 25 percent of the 2010. complaints were about brakes and China's auto sales rose 2 percent last wheels, 22 percent were about year after an increase of 32 percent in Of those complaints, 96 percent engines, and nearly 18 percent were 2010, according to the China targeted passenger vehicles, 2 percent about drivetrains. Association of Automobile were about trucks, 2 percent about Manufacturers. buses and 1 percent about tires, About 17 percent of the complaints according to China's General were about vehicles less than a year

europe.autonews.com/GlobalMonthly March Honda Volume 01 | Issue 01

Honda Europe aims to be profitable in 2013/14

FRANKFURT -- Honda, hit by a "In Japan we will focus on the 26 million engines dramatic appreciation in the yen, does production of small and mini vehicles Nishimae brushed off concerns over not expect to be profitable in Europe for the Japanese market," he said. whether Honda could continue to until 2013/2014 when 80 percent of Nishimae said he wants to reduce stem by itself the ever-growing cars sold will be sourced from its imports to 20 percent or less as soon funding costs for new fuel-saving British plant. as the company doubles annual technology over car volumes Despite two straight years of losses output in its plant in Swindon, forecasted at 4 million vehicles in the and a market share of just over 1 England, to nearly 180,000 vehicle upcoming 2012/13 fiscal year. percent, Honda Europe President this year. "I would not say we will never enter Manabu Nishimae said the carmaker Honda also is considering whether to into an alliance. If we could gain had no plans to exit what is regarded import Accords from the United States access to technology we don't have, as a fiercely competitive market in the future, which could potentially then we're flexible, but for now we crowded by competitors offering cut down shipping times to about have no specific plans," he said, margin-eroding incentives to chase seven days from over four weeks. adding that a key gap in its declining volumes. powertrain portfolio will be filled with Nishimae additionally plans to hire "The European car market is all about the addition of a new, light 1.6-liter more engineers to help inspect and high technology and beautiful design, diesel engine. certify the quality of European both for the exterior and interior. So suppliers, from which Honda could He said Honda's cash needs should our reputation among European then procure components. Only about not rise on a relative basis anyway, customers affects demand in other 60 percent of the auto parts Swindon since it would continue spending regions," Nishimae said on Monday. currently sources are from Europe. roughly 5 percent of annual group To better weatherproof the brand in revenue on research and development "We are trying to increase local Europe, Nishimae said he was looking and maintain investment levels that content month by month, even day by every day for ways to cut its exposure simply replace its depreciating capital day. That's why we would like to to the yen, which finished off 2011 at goods. increase our RandD employees - a 10-year high to the euro. without doing so it's going to be One of Honda's major advantages Imports into Europe presently make difficult to expand local over competitors is that randd up 40 percent of Honda's sales in the procurement," he said. spending on improving combustion region, including all Honda Accords, engine efficiency can be spread across After missing out on sales of an extra rendering many of the vehicles the more than 6 million industrial 22,000 cars in 2011 because natural uncompetitive at current yen rates. motors sold in addition to its annual disasters in Japan and Thailand tore a car volumes as well as another 16 hole in its supply chain, Nishimae million motorcycles that Honda also expects sales this year to jump by builds. around 25 percent to 198,000 vehicles in a market estimated to No to Ducati shrink. When asked whether Honda might be By 2014 or 2015, Honda will be back interested in acquiring Italian premium to selling over 300,000 vehicles in brand Ducati, which sells only about Europe - a level it last reached five 40,000 motorbikes a year, Nishimae years ago. ruled out any interest.

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March Honda Volume 01 | Issue 01

"We can't see any technological Italian private equity firm Source: Reuters benefit if we were to purchase Ducati. Investindustrial has said it hopes to And we want to focus on the Honda get about 1 billion euros ($1.33 brand, not on the Ducati brand," he billion) for the maker of the 1199 said. Panigale superbike.

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March Sales Volume 01 | Issue 01

Carmakers' sales targets outpace forecasts for industry

Mark Rechtin The consensus is that sales will be Only Ford Motor Co. and Hyundai 13.6 million to 13.8 million this year, appear to be limiting their projections. LAS VEGAS -- In more buoyant times up from 12.8 million in 2011. But the the wisecrack went something like Ford has not given a precise volume combined internal targets of 15 this: "Add up all the automakers' target, but executives told dealers automakers comes to 14.3 million. sales projections for the year and they expect retail share to grow from And that does not account for all the you're looking at a market of 20 13.4 to 13.9 percent this year. That small brands, which should push the million units." would represent about 165,000 units total to 14.4 million or higher. of incremental retail volume, an 11 Toting up all of the 2012 forecasts percent gain, barely keeping pace won't get you to 20 million, but you'd with the growing market. But Ford be well north of 14 million -- or way also wants to dial back its fleet sales, more than any company or analyst meaning its volumes could basically be says total industry sales actually will be flat. in 2012. Hyundai is seeking more production Is irrational exuberance making a to boost sales, but its Montgomery, comeback? Outpacing the industry Ala., assembly plant is tapped out. Kia American Honda is aiming for a 25 has no such problem and is percent increase this year; Nissan The sales goals set by each automaker forecasting a 20 percent gain. North America, 18 percent; and aren't wishful thinking; they're hard The danger is that production plans General Motors, Toyota Motor Sales targets. are derived from sales goals, which and Chrysler Group all believe their "You have to keep the pressure on, or means a half million or so units could brands can gain around 15 percent. people forget where they started," go begging at auto dealerships this All those internal targets easily says Chrysler CEO Sergio Marchionne, summer and fall. outpace overall industry growth who expects Chrysler sales to grow estimated to be 8 percent. Deirdre Borrego, vice president at J.D. 14.7 percent this year, more than Power and Associates, says many Of course, such brand-level keeping pace with the surging U.S. automakers have been too aggressive confidence can be costly for the market. with their brands' forecasts. industry at large. Volume targets drive Toyota and Honda say they want to production plans, and if things don't "There are painful decisions to be do much more than just recover last pan out the result could be an made," Borrego said. "Companies year's earthquake-related slippage. oversupply of vehicles and an ugly need to maintain discipline with And the sales goals are more than just incentives war. realistic forecasts. The recovery is a request for top management. taking longer than expected. Getting "The exuberance likely underestimates "We are much more ambitious for the too aggressive can lead to bad the power of Honda and Toyota when future," said American Honda Motor practices like pushing inventory." they are at full strength," said Group Co. CEO Tetsuo Iwamura, who laid 1 Automotive CEO Earl Hesterberg. J.D. Power projects a 13.8 million out a target at the Detroit auto show market in 2012, followed by 15.4 But those bold predictions also could for his brands to leap 25 percent. million in 2013 and 16.2 million in suggest that industrywide forecasts "Last year we struggled a lot with 2014. are too conservative. production, but this year we can go full speed."

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March Sales Volume 01 | Issue 01

Hesterberg of Group 1 says some earthquake. And, of course, Lexus "I don't care where it comes from," brands are overestimating their power expects to get those customers back, said Al Castignetti, Nissan Division's in the marketplace. and then some. vice president of sales. "I just want our unfair share." "The combination of 10 percent Other executives aren't naming their market growth, strong OEM profits, conquest targets. Indeed, no one expects to come out and many big market share gains by on the losing end of this potential many manufacturers in 2011 can't Thinking big oversupply situation. help but lead to some overconfidence 2012 sales projections for 15 Bob Carter, Toyota Division's general and overproduction," he said. automakers manager, says some brands are too 2011 Joe Herman, COO of multifranchise 2012 ambitious with their forecasts, but he Kuni Automotive in suburban actual insists Toyota is not. Portland, Ore., expects an incentives General 2,823,200 2,503,797 "In 2011, we lost 200,000 units due war this summer. Motors to the earthquake and tsunami," "Somebody at every company is going Ford Motor 2,200,000 2,143,101 Carter said. to say, 'This is an opportunity; let's Toyota 1,900,000 1,644,660 "We're going to get that back and step it up; let's subvent finance rates; Motor Sales grow our business with the market. let's put money in the trunk,'" he Chrysler We are going to increase our said. 1,570,000 1,369,114 Group performance in a couple of segments New products coming American with new products." 1,430,000 1,147,285 Honda Still, there are reasons for the Plant capacity is the limiting factor for optimism besides the improving Nissan/ many automakers. For example, the 1,230,000 1,042,534 economy. For one thing, nearly every Infiniti Aguascalientes, Mexico, factory that automaker is getting a raft of new Hyundai builds the Nissan Sentra can't increase 700,000 645,691 products in high-volume segments. Motor production. Last year, Hyundai cranked up its already stressed Also, consumer research shows that Kia Motors 585,000 485,492 Alabama plant by an additional 10 many loyal Japanese customers are VW Group 500,000 443,840 percent. Executives said such an postponing buying decisions until BMW/Mini 330,000 305,766 increase likely can't be repeated this quake-ravaged inventories return to year. normal. But much of that has been Subaru 320,000 266,989 accounted for in the forecasts for a Mercedes- John Krafcik, CEO of Hyundai Motor 288,000 261,769 13.6 million to 13.8 million-unit Benz America, said: "Toyota and Honda are market this year. going to have great rebound years, Mazda 270,000 250,426 but we're going to sell every car we Where is the extra volume coming Volvo 71,000 67,240 can make." from? BMW, Mercedes-Benz and Audi Jaguar/Land officials expect to continue taking 60,000 50,375 Lindsay Chappell, Larry P. Vellequette, Rover sales from Lexus -- even though most Diana T. Kurylko, Mike Colias, Ryan Lexus defections in 2011 came from a Other 150,000 150,806 Beene, Christina Rogers and Bradford lack of inventory caused by the TOTAL 14,427,000 12,778,885 Wernle contributed to this report

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March 2012 China Volume 01 | Issue 01

China's light-vehicle sales forecast to nearly double by 2020

Automotive News China expects U.S. light-vehicle sales will The density of vehicles in the western reach 16.8 million units in 2020, up region of China is especially low, but China's annual light-vehicle sales will from 12.8 million in 2011. incomes there will rise due to the nearly double from 17.7 million units government's investment initiatives, in 2011 to nearly 31 million units by This year, China's light-vehicles said IHS Automotive Consulting 2020 thanks to sustainable economic market will overtake Europe, Director James Chao. growth, predicts IHS Automotive. according to LMC. It expects China to sell 19.2 million light vehicles, "Simultaneously, automakers are China's light-vehicle sales, which compared with Europe's 18.2 million already betting on an increase in the include passenger vehicles and light units. number of first-time car buyers and trucks, will be almost double those of are setting up new manufacturing the United States by 2020, according Despite robust auto sales in recent plants to cope with the anticipated to the forecast, which was released years, China's car ownership rate still demand," Chao said in a statement. last week. lags far behind mature markets such as Japan, the United States and IHS Automotive, a research firm Western Europe. headquartered in suburban Detroit,

europe.autonews.com/GlobalMonthly March 2012 Middle East Volume 01 | Issue 01

VW, GM and Ford eye growing Iraqi automotive market

A view of Kahramana square in Baghdad. Rising car sales and interest in Iraq by major automakers are signs of optimism amid continuing violence and political strains. (REUTERS/Mohammed Ameen)

Bloomberg Now rising incomes and declining continuing violence and political violence are fueling demand for a strains. BAGHDAD -- Backed by the world's middle-class lifestyle that includes fifth-largest oil reserves and a The country's economy, boosted by oil autos after years of conflict following population bigger than Saudi Arabia's, revenues and foreign investment, will the U.S.-led invasion that ousted Iraq is attracting the attention of probably grow faster than 10 percent Hussein's regime. global automakers including General this year, outpacing all other countries Motors Co., Ford Motor Co. and One of the popular models is Chrysler in the Middle East and North Africa, Volkswagen Group. Group's Dodge Charger, nicknamed said Philippe Dauba-Pantanacce, a "Obama" after the U.S. president by Dubai-based economist at Standard Western cars were shut out of the Iraqis. Chartered Bank. Iraqi market by sanctions during the Saddam Hussein era. The lack of Upwardly mobile Higher incomes are generally modern vehicles is evident in the accompanied by greater spending on Cars have always been powerful survival of many VW Passats that were durable goods such as automobiles, emblems of a society. A small rush of shipped to Iraq from Brazil between he said. international automakers into Iraq and 1983 and 1990 in exchange for oil. rising sales are signs of optimism amid The growth is underpinned by safer streets. Around 1,500 Iraqi civilians

europe.autonews.com/GlobalMonthly March 2012 Middle East Volume 01 | Issue 01

were killed by bombs, sniper VW, Ford, GM optimism Mohammad Fuad Alanaswah, the ambushes and other attacks last year, dealer's chief. "It's a tough market to With a population of more than 30 according to the Brookings Institute's be in, but it is growing," said million people and a growing Iraq index. While that's a high loss of Alanaswah. "We believe in our economy, Iraq's auto market has life, it's the lowest figure since the fall market. That's why we are "huge potential," said Stefan Mecha, of Saddam Hussein in 2003, when expanding." VW's managing director for the deaths totaled 7,300. Civilian fatalities Middle East, projecting industrywide GM plans to invest in new showrooms peaked at 34,500 in 2006. sales to rise by a third this year to and service centers in Iraq after The economic benefits of Iraq's revival 120,000 vehicles. Demand could get initially entering the market in 2003 are palpable for people like Sarmad much bigger. by selling to the government, U.S. Khalid. Buoyed by the access to new forces and aid organizations, said In neighboring Saudi Arabia, which vehicles and a minimum wage that's John Stadwick, head of GM's Middle has a population slightly smaller than risen to around $400 a month from East operations. Iraq's, there are about 6.5 million the equivalent of $2.60 in Hussein's registered cars, according to IHS Last year, GM's sales surged 68 era, the 54-year-old got a chance at a Automotive. That's about five times percent to 32,000 cars, making Iraq new start. the 1.35 million vehicles in Iraq, its second- largest market in the Popular models according to Hamid Algharbawi, region after Saudi Arabia. owner of a high-end car dealership in The former government worker Still, poverty and security remain Baghdad. Official data aren't bought a Samand, a sedan hurdles to further expansion. Iraq's available. manufactured by Iran Khodro Co. economy will probably grow to the that's popular among Iraqis. He now Iraq holds "a lot of promise," said equivalent of $3,528 per person this works as a taxi driver after scraping Larry Prein, Ford's managing director year, according to the International together an existence with work at a for the Middle East. Ford expects sales Monetary Fund. That compares with relative's grocery store and as a teller to double this year after tripling to $20,214 in Saudi Arabia. Joblessness in a currency exchange since 2003. "I 2,000 in 2011. is also probably close to 40 percent, can now make a living and feed my according to the World Bank, more Niva Car Ltd., Ford's dealer in Iraq, family of three kids and a wife, after than three times the official plans to invest $200 million over the losing my job following the invasion," unemployment rate of 11 percent. next three years to open new outlets said Khalid. to tap the rising demand, said

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

Why banning foreign fleet purchases won't rescue China's automakers

Yang Jian Co. and BYD Co. are less likely to be chosen by the central government, SHANGHAI -- China's proposed ban although they do have local on government fleet purchases from government connections. foreign companies would boost sales for a handful of big state-owned Weak brands automakers. But there's no guarantee The rules, if strictly implemented, that China's domestic automakers would enable China's four state- would get much long-term benefit. owned giants to sell a lot more cars. China has urged officials to buy But the new policy alone wouldn't domestic brands before. In 2009, make these domestic brands more Beijing decreed that domestic brands competitive. should account for at least 50 percent That's because gains from of government fleet purchases. government fleet sales will be largely Few paid attention to the requirement wiped out by losses suffered because and to date, vehicles bought by of brand weakness. government officials are mainly those In January, for example, the domestic built by global automakers in Chinese Yang Jian is managing editor of brands' share of China's total sales plants. Automotive News China. shrank to 42 percent, down 4 The stretched Audi A6 has been a John Zeng, Asia forecasting director of percentage points from a year earlier. favorite of China's bureaucrats. LMC Automotive, cites two examples. Supported by advanced technology Government purchases account for China FAW Group's Besturn models and strong brands, foreign one-third of A6 sales, making it are built on the Mazda6 platform, and automakers such as Volkswagen AG China's top-selling luxury car. SAIC Motor Corp.'s new Roewe 750 and General Motors are penetrating sedan shares technology with the But let's assume, for the sake of small coastal cities and China's vast Buick LaCrosse. argument, that Beijing is serious about inland regions with inexpensive the proposed rule. Which Chinese There's a second factor to consider: compact cars. automakers will benefit? government connections. State- These markets have long been owned automakers with close There is a lot at stake. According to dominated by domestic Chinese government ties are more likely to the China Automobile Dealers brands. But consumers, who account secure fleet contracts. Association, government fleet for more than 90 percent of China's purchases totaled 900,000 vehicles This offers a big advantage to four light-vehicle sales, are embracing last year. companies: FAW, SAIC, Dongfeng global nameplates. Motor Corp. and Chongqing Changan Who will get those sales? Unless Chinese brands can quickly Automobile Co. Each has strong ties improve their technology and brand Borrowed technology to the central government and to the recognition, Beijing's proposed provincial and municipal governments If government officials are barred from protectionist rules wouldn't be where they are headquartered. buying global brands, they will opt for enough to tilt the overall market in the next-best choice: domestic models By contrast, privately held companies favor of domestic automakers. built on foreign platforms. such as Zhejiang Geely Holding Group

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

Beijing cracks down on cars that pollute too much

(Bloomberg) -- The city of Beijing has newspaper. Beijing authorities also PM2.5, which is a major cause of haze fined about 1,000 drivers as part of a "banished" about 12,500 vehicles that is harmful to the health of local campaign that started last month to from other regions of China from residents, the newspaper reported. reduce vehicle emissions, the China entering the capital because they Automobile emissions account for Daily newspaper reported Wednesday, were deemed to have excessive about one-fifth of Beijing's PM2.5 citing the Chinese capital's emissions, according to the report. pollution, the report cited Yao Hui, an environmental protection bureau. The campaign is part of the city's official with the Beijing Municipal The city began 24-hour inspections of effort to reduce the concentration of Environmental Protection Bureau, as exhaust emissions as part of the particulate air pollution that is smaller saying. campaign, according to the than 2.5 micrometers in diameter, or

europe.autonews.com/GlobalMonthly March China Volume 01 | Issue 01

China's Great Wall opens first EU car plant

SOFIA -- Chinese automaker Great economic uncertainty bite into Wall Motor Co. has opened its first consumer spending. European factory as part of its But China's top manufacturer of sport strategy to lift sales in the region. utility vehicles and pick-up trucks will The plant in Bulgaria will assemble aim to sell 600,000 vehicles in 2012, 50,000 units of Great Wall's Hover up 23 percent, with an export target SUV, Steed pick-up and Voleex city car of 100,000 vehicles. models and employ 2,000 people Mechanics work in Great Wall's new Great Wall exported 83,000 units when at full capacity in 2013. factory in the Bulgarian town of from China last year to 120 countries The factory is in Lovech, 150km Lovech. (Reuters) and regions, including Europe. northeast of Sofia. Great Wall currently exports vehicles Great Wall Motor went public in to Italy and Bulgaria. The company The plant will build cars initially for the September 2011 and raised $619 has said it will launch sales of the Bulgarian market and later for other million from its Shanghai initial public Steed in the UK next month. European countries, Roger Gao, a offering. manager at Great Wall's international Investment in the Lovech plant by The cars produced in Lovech will be division, told Automotive News Litex Motors, a joint venture in which the first made in the Balkan country Europe in November. Great Wall holds a minority stake, is since 1996 when production of the targeted to reach 100 million euros. At Tuesday's opening of the factory, Rover Maestro ended. Litex Motors Executive Director Ilia Growth in China's once-sizzling auto Source: Reuters; Ilia Seliktar Terziev said he is confident that the market fell back last year and contributed cars built in Lovech will meet the European sales are expected to expectations of European consumers. contract this year as austerity and

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March 2012 Volume 01 | Issue 01

Continental expects more growth for car markets

HANOVER, Germany (Reuters) - "Continental will keep growing Degenhart also said the newly formed German auto parts and tire maker disproportionally and profitably," CEO global alliance between General Continental AG sees sales rising by Elmar Degenhart said at a news Motors Co. and PSA/Peugeot Citroen more that 5 percent this year to over conference in Hanover on Thursday, may enable Continental to win more 32 billion euros ($43 billion) as the adding that he expected first-quarter business as it counts PSA among its global car market keeps on growing. sales to rise to more than 7.9 billion top 10 global customers. euros. Continental expects global car "We see very clearly that the chances production to rise 1 percent to 77 French tiremaker Michelin raised its outweigh the risks," he said. million vehicles this year as demand 2015 profit goal last month, Source: Reuters from Asia and North America offsets encouraged by demand from declining output in Europe. European and U.S. truckmakers and a andnbsp; strong market for the outsized tyres The supplier also aims to maintain its Continental ranks No. 3 on used in the mining industry. "high" operating profit margin of Automotive News Europe's list of the 10.1 percent. GM-PSA business top 100 global suppliers, with sales to automakers of $24.8 billion in 2010.

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

Despite economic woes, Europe isn't yet a cheap car market

Is the eurozone crisis creating a increased its European share by 1 market where only cheap models win percentage point to 12.9 percent buyers? The French market declined by 20.2 Not exactly. Sales at Renault's percent, affecting sales of Renault's Romanian subsidiary Dacia, which sells namesake core brand, which fell 27.3 low-cost, no-frills cars were down by percent to 68,718. PSA/Peugeot- 5.4 percent to 17,684 in February. Citroen's European volume was down 16.5 percent to 118,381. Moreover, the three brands which showed biggest sales gains last month • Sales of Fiat brand cars fell were not low-cost marques. 18.3 percent to 46,671, a drop that almost perfectly • Lexus increased sales by 72 Luca Ciferri is Automotive News mirrored Italy's 18.9 sales percent to 1,627, thanks to Europe's chief correspondent slump the CT 200h entry-premium • Opel/Vauxhall sales slid 19 New-car sales in Europe are expected hybrid car, which starts at percent to 58,573, much to decline about 5 percent to 7 about 30,000 euros. more than the overall percent this year, but they are off to • Land Rover's volume rise of declines in its two biggest an even worse start in the first two 69.8 percent to 6,111 was markets, the UK, where months. fueled by booming sales of industry volume fell 2.5 the Evoque medium- In February, sales fell 9.2 percent to percent, and in the flat premium SUV, which starts 923,381 in the EU plus Switzerland, German market. at 38,000 euros. Norway and Iceland compared with • Japanese volume brands lost • Jeep sales grew 58.1 percent the same month in 2011, according to volume and share in to 2,257, pushed by its most industry association ACEA. February. Nissan sales were expensive model, the down 9.4 percent to 31,097 The February decline was steeper than 45,000-euro Grand compared to a 9.2 percent January's 6.6 percent drop. In the first Cherokee large-premium market decline. Mitsubishi two months, European sales are down SUV, which tripled sales in was the worst performer by 7.8 percent to 1.93 million units, the month. equivalent to 164,000 customers lost with a 35.2 percent decline in the period. All European volume brands lost to 6,248. ground in February, mostly mirroring Among the German premium brands, Kia and Chevrolet were the only two the performance of their domestic only Mercedes-Benz had reason to be mass-market brands that showed market. strong growth last month. Kia's pleased. Mercedes' sales rose 6.8 volume rose 31.4 percent to 22,610. Volkswagen brand fell by 1.2 percent percent to 39,620. Audi sales were Chevrolet sales were up 17.3 percent to 119,130. The flat German market down 2.7 percent to 45,187. BMW to 15,248. Both brands sell low-priced helped limit the decline. As sales brand sales fell 3.2 percent to 39,905. cars largely built in South Korea. dropped in the rest of Europe, VW

europe.autonews.com/GlobalMonthly March 2012 Commentary Volume 01 | Issue 01

Finally, a Chinese company forges a real partnership with a foreign brand

Yang Jian electric cars, conventional hybrids and plug-in hybrids. SHANGHAI -- For a long time, the word "partner" has been abused by So Geely will get cutting-edge automakers operating in China. technology. What does Volvo get from this deal? When foreign automakers refer to their Chinese joint-venture The Swedish automaker will purchase "partners," we know they are not parts together with Geely -- allowing using the word in its real sense. both companies a discount. The partners can share production lines, But when Volvo Car Corp. and and they can even share platforms. Zhejiang Geely Holding Group Co. announced a technology partnership All this will enable Volvo to reduce earlier this month, we had good production costs in China. reason to believe they truly meant it. Will the alliance with Geely cheapen Yang Jian is managing editor of Why? Let's start off by considering Volvo's brand image? It won't, as long Automotive News China rival partnerships. as the two brands are kept separate in marketing and sales. Li Shufu is a wise But Changan-Mazda will need a new Global automakers are required by man and I believe he knows how to license. And that's where things get law to form a joint venture with a do this. sticky. Chinese company, so it's not In a bid to prevent excess production something of their own choosing. On balance, the deal's main capacity, Beijing recently announced it Since both companies make cars, they beneficiary will be Geely, which will would not allow foreign automakers are in fact potential rivals. That move upscale as it adopts Volvo's to form new joint ventures. explains why foreign automakers technology. Geely's domestic typically withhold their technology competitors should be jealous; they To circumvent the restriction, from their Chinese partners. will never get this much help from Changan decided to merge Changhe their foreign partners. Suzuki with Changan Suzuki, then Global automakers typically view their transfer the extra license to its joint ventures as little more than Unintended consequences planned joint venture with Mazda. corporate shells to set up assembly How does all this affect Ford Motor plants in China. There is barely any But after the strike at Changhe, Co. and Mazda Motor Corp.? technology transfer. Beijing blocked Changan's attempt to Changan wants to break its three-way transfer the license. But it's different with Volvo and joint venture, Changan Ford Mazda Geely. Both companies are owned by That means that Ford and Mazda will Automobile Co., into separate, two- the same person, a Chinese have to stick, at least for a while, with party joint ventures -- one with Ford entrepreneur named Li Shufu. This their inefficient three-way partnership and the other with Mazda. allows them to align their interests. with Changan. The breakup will lead to the creation Under the deal signed last week, the Ford and Mazda have ambitious plans of an extra joint venture. Under two parties will jointly develop small to expand in the world's largest auto existing regulations, the Changan- engines, a small-car platform, and market. But the complexities of the Ford partnership can inherit the alternative energy vehicles such as new rules are holding them back. former three-party venture's license.

europe.autonews.com/GlobalMonthly March 2012 Volume 01 | Issue 01

Ford CEO candidate Fields tangled with former CFO Leclair, book reveals

DETROIT (Bloomberg) -- Mark Fields, Fields leapt out of his chair screaming, Ford would not comment directly on Ford Motor Co. president of the "I'm tired of this bulls---!" anecdotes in the book, said Karen Americas and a leading candidate to Hampton, a company spokeswoman. succeed CEO Alan Mulally, nearly had "As with any retelling of history, a physical altercation with another top memories and accuracy differ from executive in 2006, according to person to person -- and this account is American Icon, a new book on the no different," Hampton said in an e- automaker's turnaround. mailed statement. "We will let the In July 2006, as collapsing truck and book speak for itself." sport-utility vehicle sales were making Outsider hired Ford unprofitable, Fields and other top executives met at the Henry Ford Ford's top executives appear at a press Around the time of this anecdote, Bill museum in Dearborn, Mich., to conference in January 2005 when Ford, great-grandson of founder accelerate restructuring plans, wrote storm clouds were gathering at the Henry Ford, was being pressured by author Bryce Hoffman, a reporter for company. Pictured here are Ford some Ford board members to step President of the Americas Mark Fields, The Detroit News, who said the aside, Hoffman wrote. Director Irv far left, then-CEO Bill Ford, then-COO automaker cooperated on the book, Jim Padilla, and then-CFO Don Leclair, Hockaday, former head of Hallmark which goes on sale March 13. far right. (Brett Mountain/Bloomberg Cards Inc., advised Bill Ford to find a News.) new CEO, Hoffman writes. Shortly Don Leclair, then Ford's chief financial after that, at a July board meeting, officer, insisted Fields cut the Bill Ford intervenes Ford asked the directors to replace advertising budget for the "Bold Fields was "halfway across the table" him as CEO. Moves" campaign aimed at reversing when Bill Ford, then the automaker's the sales slide. Leclair had previously "This company means a lot to me. I CEO, grabbed him, according to blocked attempts by Fields to offer have a lot tied up in it," Ford told the Hoffman. "Cut it out," Ford said, lifetime warranties and carbon offsets board, according to Hoffman. "But according to Hoffman's book. for Ford vehicles as part of the ad the one thing I don't is my ego." campaign, deeming the moves too Leclair, 60, retired from Ford in Two months later, Ford hired Mulally costly, Hoffman wrote. November 2008. He declined to from Boeing Co. He engineered a comment through Ray Day, a At the museum meeting, Leclair said turnaround at the automaker by company spokesman. there was "no other alternative" to focusing on the Ford brand, improving even deeper cuts for the ad campaign Hoffman said he could not reveal quality, globalizing operations and because of Ford's widening financial specific sources for the anecdote expanding the company's lineup with crisis, which would lead to a loss of because he agreed not to indentify fuel-efficient models like the Fiesta $12.6 billion in 2006. the people who shared the details, subcompact. many of whom still work for Ford. "When you run the f--king business, Ford reported its 11th consecutive When he uses direct quotations, as he you can do it," Fields responded to profitable quarter Jan. 27, with net did in this case, "the wording comes Leclair, Hoffman wrote. "But you income of $13.6 billion, or $3.40 a from the speaker, from another don't run it. You're the CFO. So, I'll share, boosted by a one-time tax gain participant in that conversation, from take your counsel, but that's it." of $12.4 billion. For all of 2011, Ford's contemporaneous notes or from a pretax operating profit was $8.8 Leclair then shouted, "You're going to transcript," Hoffman wrote in an do this," Hoffman wrote, adding: author's note in his book.

europe.autonews.com/GlobalMonthly March 2012 Volume 01 | Issue 01

billion, or $1.51 a share, up $463 leading candidate to succeed Mulally, Derrick Kuzak, the company's million from the previous year. people familiar with the deliberations product-development chief. "Our plan have said. at Ford is to have a very strong Mulally, 66, has not said when he will succession plan for every position, retire and recently denied speculation "I have no plans to retire," Mulally including my own." that he would leave at the end of next said Feb. 9, while announcing the year. Fields, 51, is viewed as the retirements of CFO Lewis Booth and

europe.autonews.com/GlobalMonthly March 2012 Cadillac Volume 01 | Issue 01

GM readies Cadillac product blitz to catch Lexus

Tim Higgins the world behind Volvo and possibly Land Rover. DETROIT -- General Motors Co., having regained global sales The world leader is BMW followed by leadership from Toyota Motor Corp., Audi, which overtook Daimler last is planning new Cadillac models to year, when each brand sold more more than double sales and surpass than 1 million units. the Japanese automaker's Lexus brand Lexus finished with an estimated as the No. 4 luxury line. GM is developing a plug-in hybrid Cadillac called the ELR, using 408,000 sales, more than double Chief Executive Officer Dan Akerson is technology similar to the Chevrolet Cadillac's 2011 sales, IHS said. pushing the automaker to turn Volt. The automaker hasn't said when it will go on sale. (GM) Cadillac's best year was 1978, when it Cadillac into a global player with the sold 350,000 cars. scale to better compete with German The automaker is weighing several leaders BMW, Volkswagen AG's Audi vehicle options for Cadillac, Mark Pre-Manning peak and Daimler AG's Mercedes- Benz. Reuss, president of GM North That peak preceded the birth of Eli America, said in a recent interview. Within 10 years, GM wants to be Manning, the pro football quarterback solidly in the fourth spot currently Executives are considering a sedan who received a Cadillac Escalade held by Lexus, said a person familiar larger than the XTS, a sport-utility hybrid as a prize for being the most with plan. vehicle smaller than the SRX and a valuable player in the 2008 Super new Escalade on the same vehicle Bowl championship game. Cadillac, which peaked more than architecture as the popular Buick three decades ago, must choose the Manning, 31, received a Chevrolet Enclave, Reuss said. right new models to meet Akerson's Corvette last month when he won the goal, said the person, who asked not Product decisions award again. to be identified because the plans are "It's a question of what products Akerson met with his senior private. they're offering," said Alan Baum, an leadership team at GM's design dome The U.S. luxury brand must find a way independent auto-industry analyst in Warren, Mich., outside Detroit in to reach younger buyers than Mitt based in West Bloomfield, Mich. the middle of last year about the Romney's wife, who drives two SRX "When they were offering the future of Cadillac and that's when the sport-utility vehicles. Escalades, they were unique products, 10-year vision for the brand was certainly, but they were also products outlined, a person familiar with the The median Cadillac customer last that had relatively modest demand." meeting said. year was 63 years old -- the age Ann Romney turns in April -- according to David Caldwell, a GM spokesman, The CTS sedan and SRX have helped J.D. Power and Associates. declined to comment on Cadillac's improve Cadillac sales and image in sales goals. recent years. "We are working on more new Cadillacs than at any point in the GM sold 199,000 Cadillac cars and GM will begin selling a large sedan, brand's history," Don Butler, GM vice SUVs last year, including 152,000 in the XTS, and a small sedan, the ATS, president for Cadillac marketing, said the United States, the company said. this year to help broaden its lineup. last month in an interview in Chicago. The ATS will be sold in the IHS Automotive estimated that "We're constantly talking about competitive segment that includes the Cadillac finished 2011 as the sixth or what's the best way to become this BMW 3-Series and Mercedes C-Class. seventh best-selling luxury brand in global player."

europe.autonews.com/GlobalMonthly March 2012 Cadillac Volume 01 | Issue 01

The automaker has also said it will Escalade, and could be used for the said. "Some crossovers might do make a plug-in hybrid Cadillac called Cadillac model. that." the ELR, using technology similar to U.S. fuel-economy requirements for While Cadillac will need aggressive the Chevrolet Volt. The company those SUVs and other light trucks start growth to make fourth-place globally, hasn't said when it will go on sale. increasing in 2016. the brand has an opportunity reach While considering a broader lineup, more customers as Baby Boomers are "If we were to do that, it would be GM's Reuss said the company needs replaced in showrooms by a younger something not like a Lambda today, to make wise choices and doesn't generation that may be open to a but rather something that makes a want to add too many models to the different take on luxury, said Rebecca different statement," Reuss said. "It brand. Lindland, an industry analyst with IHS could look bigger than that." Automotive. Bad movie The debate also involves whether "The market is also changing in the "We've seen that movie; it's a bad Cadillac should make a smaller SUV to next 10 years quite dramatically," she one," Reuss said of over-expanding compete against BMW's X3, which said. "We'll have the top of Gen Y the Cadillac range. "Capital is not an helped drive the German-brand's 13 coming into peak earning years while endless bucket that we have access percent sales increase in the U.S. to Gen X is in peak earning years." to." overtake Lexus as the nation's top- selling luxury brand last year. Another key to growing globally will Part of the discussion has involved be establishing Cadillac as a legitimate changing the Escalade, which has 'International' appeal luxury brand beyond North America, been designed as a body-on-frame The SRX is too big for most global she said. vehicle like a pickup, into a crossover markets, as is the Buick Enclave that model with a unibody structure to "Cadillac will have to get love from could serve as a basis for the next improve the mileage, Reuss said. China," Lindland said. "They have a Escalade, said Baum, the analyst. significantly harder road to go in GM's Lambda platform is the basis of "They have to make products that are Europe, and they know that." the Buick Enclave, which gets about more compatible with what 19 percent better mileage than an international drivers want," Baum

europe.autonews.com/GlobalMonthly March Manufacturing Volume 01 | Issue 01

India's Mahindra in talks to set up assembly line in Russia

NEW DELHI -- Indian automaker Mahindra and Mahindra is the biggest SUV model to 5,000 per month from Mahindra and Mahindra is in talks shareholder of SUV-specialist 3,000 per month. with South Korea's Ssangyong Ssangyong. Mahindra reported a bigger-than- distributor in Russia to set up an expected 9.9 percent fall in profit assembly line. during the quarter to end-December, The company may take two years to as rising commodity costs squeezed begin the assembly line in Russia, margins, and a prolonged slowdown Pawan Goenka, president of in tractor sales continued to dampen Mahindra's automotive and farm sales growth. equipment sectors, said on Tuesday. Goenka also said the Indian company Sources: Reuters and Automotive is considering raising the capacity for News Europe its newly launched XUV 500 medium

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March China Volume 01 | Issue 01

Lamborghini says slowing China economy may hurt supercar demand

SHANGHAI -- Lamborghini said produce enough of the $1 million industry sales of ultra-luxury sports Aventador LP 700-4 to meet the 18- cars may slowandnbsp; as signs that month waiting list, Mastro said. The China's economy is weakening puts company also sells the Gallardo in off some buyers. China.

"If you look at the economy right Lamborghini plans to make 900 now, there may be some uncertainty Aventadors globally this year and has to make people wait a little," sold out all 80 it allocated to China Christian Mastro, Lamborghini's Asia this year, Mastro said. Pacific general manager, said in an The company has no immediate plan interview on Friday. to raise the quota so as to ensure "The number of people able to spend supply for other regions, he added. this kind of money is limited, it's not Makers of supercars have come to a unlimited." Lamborghini joins Rolls-Royce in consensus that the segment will grow forecasting more muted demand for The comments come as growth in the about 25 percent in China to about ultra-luxury cars in China, which has world's second-largest economy 2,000 cars this year, versus a doubling grown to become the largest market cooled to the slowest pace in more in 2011, Mastro said. for automakers from Audi to General than two years in the fourth quarter Motors. Marketing drive and the trade ministry described the export outlook as "grim" last week. Rolls-Royce Chief Executive Officer Lamborghini plans to spend 20 Torsten Mueller-Oetvoes predicted last percent more on marketing this year Lamborghini's sales jumped about 70 month that China's growth will be and will hold more events such as percent in the country last year as less "explosive" this year. track drives to spur sales, Mastro said. rising incomes pushed up the number of Chinese millionaires and stoked Total auto sales slowed last year after The Italy-based company will also demand for luxury goods. The the end of stimulus measures and the expand the number of dealers this sportscar maker sold a total of 342 economic expansion showed signs of year by six to 20, opening in smaller units in China last year, up from 206 easing. cities outside Shanghai and Beijing units in 2010, overtaking the U.S. as such as Xi'an, Nanjing, Changsha and Lamborghini aims to boost deliveries its largest market. Shenyang, he added. in China by 20 percent to 30 percent, less than half the pace of last year. Source: Bloomberg

Despite a slowdown in supercar sales in the region, Lamborghini still can't

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March 2012 Nissan Volume 01 | Issue 01

Nissan bets on Datsun for sales push

YOKOHAMA, Japan -- Nissan Motor Young buyers targeted Co. is counting on its Datsun brand to Nissan Vice President Vincent Cobee, attract a vast pool of first-time car head of the Datsun business unit, said buyers in emerging markets. the brand aimed to appeal to a Nissan is reviving the 80-year-old growing population of young, up- Datsun nameplate for entry-level cars and-coming customers looking for in Russia, India and Indonesia starting something new, whether it is types of Datsun will offer 'quality and in 2014 and will add two Datsun sales financing or vehicle accessories modernity,' Ghosn says. models every year in those markets, offered. the carmaker said on Wednesday. "I'm not convinced," UBS auto analyst Ghosn said: "Datsun was known for a Tatsuo Yoshida said. "They haven't Datsun will eventually expand to other product that was robust, reliable and even achieved a solid brand identity high-growth markets and become a affordable. These are good attributes for Nissan yet. It's going to be a global brand that offers products to start with, [and] we're going to add bumpy road." tailored to the regulations and good quality and modernity." consumer needs for each market, Nissan's third global marque after its In India, Datsun's target price would Nissan CEO Carlos Ghosn told core brand and Infiniti will help the be below 400,000 rupees ($8,000), reporters. company compete against rivals such where the bulk of demand lies, Ghosn as Maruti Suzuki in India and Toyota in But Datsuns will not be offered in said, possibly, but not limited to an Indonesia, according to Ammar mature markets such as Japan, ultra-low-cost car being developed in Master, an analyst at LMC Automotive western Europe and the United States, a joint project with French alliance in Bangkok. Ghosn said. partner Renault and India's Bajaj Auto "Datsun could bring in volumes at the Ltd. "Every country has its own specific lower end of the market while the incentives to encourage people that For Nissan, selling cheaper cars under Nissan brand will continue to move are riding motorcycles or riding used an independent brand removes the upmarket," Master said. cars to move to a new car," he said. risk of hurting its core brand -- a Nissan last year said the carmaker "We don't want to have a product conundrum that rivals such as Toyota aims to increase its share of the global that fits all needs." Motor Corp. and Honda Motor Co. car market to 8 percent by the year faced as they push the limits of low- Datsun will account for one-third to ending March 2017, from 5.8 percent cost offerings in India and other half of Nissan's sales in Russia, India in the year ended March 31, 2011. markets. and Indonesia and Russia by the business year ending in March 2017, 'Bumpy road' The company had said at that time it the company said. will introduce 51 new models, capture Analysts said building a successful a larger share of the luxury-car market Two Datsun models will launch in the brand was no small feat, requiring and increase sales in emerging first year and the lineup will be years of dedication, allocation of economies. enhanced within three years in each sufficient resources and the right Sources: Reuters and Bloomberg of the initial markets. products.

europe.autonews.com/GlobalMonthly March 2012 Russia Volume 01 | Issue 01

Nissan to revive Datsun brand for Russia, emerging markets, report says

Hans Greimel 60 percent of its global sales by 2016, boost global V-platform sales to 1 from 40 percent in 2007. million units, from 130,000 in 2010. TOKYO -- The Datsun nameplate may soon be revived by Nissan Motor It also has ambitious goals for Co. as a low-cost sub-brand for expanding market share in emerging emerging markets such as Russia and markets. India. Many of the upcoming Datsuns are The Japanese carmaker plans to expected to ride on Nissan's global V- relaunch Datsun in 2014 and initially platform for low-cost small cars and start selling the cars in Russia, India source most of their parts locally, the and Indonesia, Japan's Nikkei business Nikkei said in its report on Thursday. daily reported. The vehicles will be But in Russia, Nissan will use platforms In the United States, the Datsun name priced around 500,000 yen ($6,100), supplied by its local partner AvtoVaz. was dumped in favor of Nissan in it said. Nissan targets global volume of 1983. The move was meant to Nissan declined to comment on the 300,000 units a year for Datsun, the strengthen Nissan's global corporate report. Nikkei said. image.

A focus on expanding sales in While announcing its mid-year Dealers initially rebelled against the emerging markets is a key pillar of business pan in June 2011, Nissan said idea of dropping Datsun. But three Nissan's mid-term business plan. It that by 2016, it will increase the decades later, a whole generation of aims to make countries such as India, number of models using its V-platform Americans has grown up never Brazil, China and Russia account for to three from two now. It also aims to knowing the brand.

europe.autonews.com/GlobalMonthly March 2012 Porsche Volume 01 | Issue 01

Porsche targets rich Nigerians' love for luxury

Reuters "We're quite confident the numbers will be strong," Wills told Reuters in LAGOS -- Nigeria's super rich are no front of the new 911 sports car, after strangers to conspicuous a Porsche official revved its engine for consumption, and there's no better flashing cameras. It's difficult to put a way to flaunt your wealth than by finite number on it, but certainly buying a brand new sports car. enough to give a return on this Porsche officially opened a new car investment," he said. dealership on Friday in the heart of Porsche Nigeria general manager Lagos' wealthiest district, Victoria Julian Hardy estimates 200 Nigerians Island, a place with one of the world's own Porsches - the dealership had highest concentrations of millionaires. been running prior to the official There are already dealerships launch since July and sold an "It's a nice car," said employee specializing in Aston Martin and undisclosed number, and rich Mohammed Ibrahim, as he hosed Lamborghini models, but Porsche Nigerians have been importing them down a chrome colored Cayenne and hopes to capitalize on a promise of for decades. shined it to a sparkle with a cloth. On providing sturdier vehicles that can "You can drive around Lagos, then his 20,000 naira a month salary it cope with Nigeria's rough roads. take your car to the race track and would take him 125 years to afford Porsche also plans to set up an become a beast and go wild," said one if he didn't buy anything else. operation in Abuja, Nigeria's capital Emmanuel Ngala, an IT consultant "God might give me a car like this city, where roads are newly built - a who owns a Cayenne SUV and is one day. He can do that, if he wants better market for the 911 sports buying a 911. to. He can do anything," he said, model - and where politicians are Porsche's sales target for 2012 is 100 grinning. amongst the world's most highly paid. cars, and it hopes to hit a stable sales Big men and motors "The African continent, and in rate of around 300 a year, compared particular Nigeria, is of growing with 800 in South Africa. Average Sandwiched between the lagoon that importance to us at Porsche," the prices currently range between 21 led Portuguese sailors to name this company's Middle East and Africa million naira ($133,000) to 30 million city 'Lagos' and the Atlantic, Victoria head George Wills said, unveiling the naira ($190,000). The oil wealth of Island is a place of fund managers in new 911 model. Africa's biggest producer has made fine woollen suits and oil oligarchs. multi-millionaires of its elite in the High-end goods producers are The faces of glamorous women smile past decades, even as absolute increasingly targeting sub-Saharan from billboards advertising mobile poverty has increased to 60 percent. Africa, as its economic growth starts phones. Luxury SUVs are everywhere. to dwarf other continents and rich Lagos embraces some of Africa's most But it has scant electricity, most roads Western countries face a slowdown. expensive real estate alongside some are sandy, potholed and patrolled by Nigeria, Africa's second biggest of its most crowded slums. On one beggars in rags. Poor drainage means economy, grew 7.68 percent in the street, a Hummer drives past a tramp they flood - in the rainy season, last quarter of 2011, one of the sifting through a dustbin. The car park fishermen sometimes traverse them by fastest in the world. Two of Africa's at the Porsche show rooms has several canoe, raising doubts about the top five richest men are Nigerian. models. practicality of sports cars like a 911.

europe.autonews.com/GlobalMonthly March Manufacturing Volume 01 | Issue 01

PSA, Renault say they can't build small cars profitably in France

Luca Ciferri The cost gap between French plants and those of low-cost countries is TURIN -- France's manufacturing costs insurmountable, PSA believes. are so high that a subcompact car costs 1,300 euros more per unit than The two French automakers have the same vehicle built in Turkey, a been unable to cut costs in part senior Renault executive told a French because of government intervention. parliamentary commission. In 2009, France pledged loans worth 6 billion euros to PSA and Renault in Carlos Tavares, Renault's chief return for guarantees to safeguard operating officer, detailed the nation's Tavares said that a Clio made at jobs and keep factories open. The two high manufacturing costs in a Feb. 7 Renault's plant in Flins, France, costs automakers repaid those loans last hearing in front of the French Senate's 1,300 euros more than the same car year. economic commission, according to a built in Bursa, Turkey. The cost gap is report by Natixis Equity Research in even more painful at a time when the PSA and Renault are being asked to Paris. price war on small cars is escalating in demonstrate economic patriotism, but Europe as automakers use margin- the government has not recognized In a separate appearance before the eating incentives to maintain sales their need to remain competitive, Senate that same day, Denis Martin, volumes. Natixis' Georges Dieng said in a phone PSA's executive vice president for interview. industrial operations, said the Renault remains profitable only company's French assembly plants because its Dacia subsidiary has "French carmakers are not asking for were uncompetitive, Natixis added. performed well, Tavares said. a new round of financial help," he Renault and PSA confirmed the Likewise, Martin said the subcompact said, "but the freedom to properly comments. segment is not profitable for PSA in restructure their domestic manufacturing footprint in order to The two executives said they were western Europe, and in France in maintain long-term viability." struggling to compete with key particular. models like the Peugeot 208 and andnbsp; Renault Clio.

europe.autonews.com/GlobalMonthly This global monthly is property of John Doe March 2012 Russia Volume 01 | Issue 01

Russia car sales predicted to rise 6 percent to 2.8 million

Reuters, Automotive News Europe The top of that range would see the market surpass the pre-crisis year of MOSCOW andndash; Russian car sales 2008, when Russian was poised to are seen rising by 6 percent from last overtake Germany to become year to 2.8 million units in 2012, Europe's biggest market. Last year, Deputy Industry and Trade Minister 3.17 million cars were sold in Alexei Rakhmanov said. Germany. The forecast indicates a sharp Russian sales halved in 2008 as the slowdown from the 23 percent economic downturn destroyed increase seen in the January-February inexpensive local brands such as Lada consumer confidence and dried up period. cease to benefit. access to credit. Lada-owner AvtoVAZ, Western carmakers are targeting The scheme, which offered drivers a 25 percent owned by Renault, had to Russia as one of the most important 50,000 ruble (1,295 euro, $1,700) be bailed out by the state to prevent growth areas for the industry as cash incentive to trade in locally made its collapse. slowing sales and overcapacity issues vehicles aged 10 years or older, ended Rakhmanov said he thought Russia dog more mature markets. in 2011 after contributing 600,000 new sales to the overall market. could eventually become Europe's No. "We believe in 2012 we'll see 6 1 market, but not in 2012. percent growth compared to 2011," The Moscow-based Association of "Are we happy that Russia is still the Rakhmanov told the annual Russian European Business (AEB), which number two market? Yes. Can we be Automotive Forum on Tuesday. compiles independent Russian car sales, has forecast new sales in the number one? Probably not this year," He said the end of a government range of 2.6 million to 3 million for he said. sponsored scrappage scheme would 2012. contribute to the slower growth, as

europe.autonews.com/GlobalMonthly March 2012 Volume 01 | Issue 01

U.S. firm to help Wanxiang produce EVs in China

Automotive News China finalize their agreement and seek vehicle designs. They will be marketed regulatory approval. under the Smith brand. Chinese supplier Wanxiang Group plans to form a joint venture with U.S. Under the agreement, Wanxiang will "Smith's market leadership in the U.S. electric commercial vehicle producer make a $25 million (157 million yuan) and Europe bring valuable experience Smith Electric Vehicles Corp. to build equity investment in Smith, a privately and technology to address the electric school buses and commercial held company based in Kansas City, significant opportunity for all-electric vehicles in China. Mo., and the companies will establish commercial vehicles in China," said a 472 million yuan joint venture. Pingyi Li, executive director of The companies signed a letter of Wanxiang EV Co., a unit of Wanxiang intent this month, Smith said in a The vehicles will be built with Group. statement. The companies must Wanxiang's components and Smith's

europe.autonews.com/GlobalMonthly March 2012 Volkswagen Volume 01 | Issue 01

Volkswagen plans low-cost car brand, report says

Reuters & Automotive News Europe Sport in an interview published on Wednesday. FRANKFURT -- Volkswagen is planning a low-cost car brand for emerging "There is a market segment between markets, Ulrich Hackenberg, VW's 5,000 and 7,000 euros, which is a real head of research and development, challenge," he said. told a German magazine. The car will The trick is finding the right amount sell for about 5,000 euros, of content to take out of the car to Hackenberg said. make it affordable, he said. "In India we build the Vento and a "Here you really have to closely look local version of the Polo that only Hackenberg said no decision had been at what can be done away with, but costs around 7,000 euros ($9,300). In made whether such a car, most likely those cars would not be sold under China we're planning a more a roomy sedan that could also be built the name Volkswagen, more as their affordably priced car in the size of a in a van body style, would be own brand." Seat Toledo," he told Auto Motor und manufactured with a Chinese partner.

europe.autonews.com/GlobalMonthly March 2012 China Volume 01 | Issue 01

Volvo recalls more than 12,000 cars in China

Reuters The carmaker is also recalling 1,679 S60 and XC60 cars to inspect the BEIJING - Volvo Car Corp. is recalling underbody coating which may 12,798 of its 2012 model year penetrate the fuel lines and cause fuel vehicles imported into China, the top leakage, it added. Chinese quality regulator said, in order to prevent potential fuel leaks No casualties or deaths have been and to fix faulty wiring that could linked with the potential defects, the cause airbag failure. watchdog said. Zhejiang Geely Holding, parent company of Geely Volvo is recalling 11,119 S60 and Automobile, took over Ford Motor XC60 cars to fix a wire harness under Co.'s Volvo car unit in August 2010. It the front seats which might interfere was not immediately available for with the car's airbags, China's General comment. Administration of Quality Supervision, Inspection and Quarantine said on Friday.

europe.autonews.com/GlobalMonthly April 24-26, 2012 • Beijing, China

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