Automobile Industry Updates

India Automobile Industry Updates

In this issue: Automobile Industry Updates Effect of Recession GM Files For Bankruptcy Issue No 3 Shifts reduced at Bridgestone factory. May 2009 Press Release Effects of Recession Car Exports Up 42% in May

Nashik strike a setback for GM Files for Bankruptcy Mahindra's Xylo It was once an icon for industry. Monday, General Motors became the largest Nashik strike causes production losses of Rs manufacturing company in U.S. history and fourth largest company ever to file for 150 crore to Mahindra's bankruptcy protection. vendors Senior administration officials said the government will provide $30 billion in financing Tata, M&M, Maruti join hands for hybrid models to help the automaker through bankruptcy. Those same officials said the Canadian government would provide $9.5 billion. Global car cos to take Maruti's route

JLR to get 'conditional' More support only: UK Govt Shifts reduced at Bridgestone factory Audi aims 55 pc growth this fiscal from India Bridgestone has cut three production shifts at its Salisbury factory as demand slumps

Ashok Leyland, Nissan for its truck and trailer tyres. The company told workers this week it needed to reduce venture delayed 6 months inventory levels to match sales, which have fallen during the economic downturn. UK Govt-JLR talks back on Workers will be given other duties during the seven-week hiatus, which will cut truck track and bus tyre production by 20 hours a week. TVS can make, sell original Flame: HC More Tata Motors plans Rs 4,200 cr debenture issue: Crisil Press Release

Ford to Make India Export Hub for Small Cars Car Exports Up 42% in May Exports of passenger cars from the country soared 41.64 per cent in May, mainly on Natural rubber imports might double the back of robust performance by Maruti Suzuki, although domestic sales increased by a meager 2.48 per cent. High futures leave rubber users high and dry According to the data by the Society of India Automobile Manufacturers (SIAM),

Apollo Tyres Completes passenger car exports from the country stood at 29,619 units in May this year as Buy of Vredestein against 20,911 units during the corresponding month of 2008.

More MRF lifts lockout; workers continue strike Nashik strike a setback for Mahindra's Xylo Silver lining for Michelin’s radial tyre project in TN Barely four months after Mahindra & Mahindra (M&M) rolled out the Xylo; a multi-

3 Ruia Group firms under seater utility vehicle that got a good market reception, the model has run into a lens in sales tax case production hurdle. The company‘s Nashik plant, where the Xylo is made, has been

M&M Net jumps 89%, to paralysed for the past five working days due to an intense labour strike. invest Rs 5,000 cr in 4 yrs More GM impact minimal: Sundram Fasteners Nashik strike causes production losses of Rs 150 crore to Mahindra's vendors Tata Motors net halves to Rs 1k cr Ongoing ‗tool down‘ strike, waged by the Nashik plant workers of the automotive major Mahindra & Mahindra (M&M) for the past nine working days, have now started GM India not included in US bankruptcy filing affecting around 350 vendors of M&M across the country. The total production losses to Mahindra vendors alone are estimated at Rs. 150 crore during the last seven days. New Product

Logan Edge Connect in- More roads of Bhopal

Toyota group co to launch Global car cos to take Maruti's route trucks Global carmakers looking to the booming Indian car market to salvage their fortunes

Skoda's Yeti gets going! are planning to imitate Maruti Suzuki‘s strategy of launching hatchback and sedan variants of the same model, as they explore ways to cut costs. Now companies like Bajaj Pulsar New Model the world‘s largest carmaker Toyota, Europe‘s largest car maker Volkswagen, Tata Motors Rolls Out Japan‘s Honda and America‘s Ford Motor plan to use the same technology to make World Truck both hatchbacks and sedans for their future launches in India. Honda launches new version of 'CBF STUNNER' More

Industry Competition JLR to get 'conditional' support only: UK Govt M&M set to challenge Tata, Leyland in heavy vehicle In a signal that government support may not come easy for Tata-controlled Jaguar segment and Land Rover (JLR), the British Government said that it was ready to provide only Honda to Bring Products "conditional" help to the two brands as it had to "protect the interest of taxpayers". with India-Specific Engines The UK government's insistence on "conditions" for lending support is creating Goodyear to add 15% problems in a successful loan negotiation for JLR. It is believed to be seeking capacity "unprecedented terms" for the help, including a position on the board of the brands. Growth from only two More models is a concern: Maruti Suzuki Audi aims 55 pc growth this fiscal from India Bajaj to move Supreme Court against TVS German luxury car manufacturer Audi on Friday said it expected a 55 per cent growth

Ashok Leyland stays in this fiscal from the Indian market and was targeting a sale of 1,500 cars. profit track through slew of combating measures Though luxury car sales in various countries was showing a dip following the global International Updates meltdown, the Indian market was buoyant, Audi India Managing Director Benoit Tiers Ford Truck Plant to Build told reporters here. Electric Cars More Bridgestone 1Q Group Net Loss Y34.88 Billion Vs Y22.96 Billion Profit Year Ashok Leyland, Nissan venture delayed 6 months Earlier Commercial vehicles maker Ashok Leyland Ltd said on Friday its joint venture with

Michellin agrees to Japan's Nissan for light trucks has been delayed by 6 months, due to the economic settlement over tyre ads. slowdown and delay in land acquisition.

Continental cuts Production from the venture is expected to start in 2011, the company said in a production at Stoecken statement while announcing its results for the fourth quarter. plant More

UK Govt-JLR talks back on track The British government has said that it is in discussions with the Tata Group-owned luxury carmaker Jaguar Land Rover (JLR) on guaranteeing loans. While making it clear that the primary financial responsibility of the cash-strapped JLR rests with Tata Motors, the British government continues to hold confidential discussions with the company over both short- and long-term financing and business plans, an official at the department of business, enterprise and regulatory reform (BEER) said

TVS can make, sell original Flame: HC Clearing the decks for TVS Motor to manufacture and market its 125 CC ‗Flame‘ motorcycle, in its original form, the Madras High Court on Monday lifted an order of injunction which restrained the company from using internal combustion engine with three valves and two spark plugs. TVS now sells, Flame under a completely different technology as against the originally planned one.

Tata Motors plans Rs 4,200 Cr debenture issue: Crisil India's leading automaker Tata Motors, which needs to refinance early next month a bridge loan worth $2 billion taken for purchase of Jaguar and Land Rover, is planning to raise Rs 4,200 crore (about $884 million) worth of fresh debt. The fresh debt would be raised through sale of non-convertible debentures in four tranches, credit rating agency Crisil has said, while assigning its top-grade credit rating for the debenture programme backed with a SBI guarantee. More

Ford to Make India Export Hub for Small Cars Ford will start exporting the small car, due for launch in early 2010, by the end of that year, said Ford India MD Michael Boneham. The company will also export petrol and diesel engines from its new engine plant near Chennai. We will export our small car to regional markets and there is significant opportunity in the Asia Pacific region and Africa. Those markets will be our focus to begin with, Mr Boneham said. More

Natural rubber imports might double As the gap between domestic and overseas price tags of natural rubber (NR) isis widening on a day by day basis, a strong pressure is building for heavy import of the commodity. Currently, comparing today‘s quote of bench mark grade RSS 4, the overseas market, especially Bangkok, is cheaper by Rs 22 a kg. More

High futures leave rubber users high and dry As the rubber production was hit due to unusually hot temperature, the prices seemed to be hovering at higher end leaving rubber users high and dry while rubber makers go booming on the bourses today. More

Apollo Tyres Completes Buy of Vredestein Apollo Tyres Ltd. said Monday it has acquired the entire stake in Dutch tire-maker Vredestein Banden BV, giving the Indian company its first manufacturing base in Europe. "We completed the entire process on Friday night," Sunam Sarkar, Apollo's chief financial officer, told Dow Jones Newswires by phone. Mr. Sarkar declined to disclose the cost of the acquisition. More

MRF lifts lockout; workers continue strike Tyre-maker MRF has lifted the 10-day lockout at its Arakkonam factory near Chennai, the company announced on Wednesday. However, representatives of the MRF United Workers‘ Union, which has been demanding management recognition, said that they would not to resume work and continue to fight for their demands. The strike at MRF‘s Puducherry unit is still on. More

Silver lining for Michelin’s radial tyre project in TN The country might still feel the pangs of the economic downturn, but Tamil Nadu is on track to receive its first major investment post elections. French tyre giant Michelin‘s Rs 4,000-crore project is on the take-off stage, with government machinery swinging into action to ensure that legal issues don‘t hamper investments. It is tying up all loose ends to allot 1,127 acres for the prestigious radial tyre project in Thervoy Kandigai village, near Gummidipoondi, in Tiruvallur district of TN. More

3 Ruia Group firms under lens in sales tax case Dunlop India, Falcon Tyres and Monotona Tyres are under probe over a tax liability of Rs 23 cr, which may rise. The Maharashtra sales tax department is probing at least three firms owned by Kolkata-based businessman Pawan Kumar Ruia for allegedly running a hawala racket to reduce sales tax liability, according to a media release. More

M&M Net jumps 89%, to invest Rs 5,000 cr in 4 yrs Discarding the impact of global financial meltdown, auto major Mahindra & Mahindra on Thursday posted an impressive an 89.09 per cent jump in its net profit at Rs 418.07 crore for the quarter ended March 31, 2009 and announced investment of Rs 5,000 crore in the next four years. More

GM impact minimal: Sundram Fasteners When reports of General Motors filing for bankruptcy trickled in, it deepened the worries of Indian auto-component makers, who were already coping with low demand in the domestic market. But TVS group company Sundram Fasteners, which has been supplying radiator, caps to GM for the last fifteen years is not worried as it has gradually reduced exposure to the carmaker over the years, a top official said. More

Tata Motors net halves to Rs 1k cr About four years ago, Prakash M Telang, a 37-year veteran of Tata Motors, led a team that engineered and designed a mini-truck that would make it easier for businesses and shops to ship goods within the city. Called Ace, the product quickly went on to become one of the biggest successes of the 64-year-old company. It has sold over 3, 00,000 vehicles since launch, created an entirely new category and spurred competitors to launch me-too products. More

GM India not included in US bankruptcy filing GM India has announced that it continues all its normal operations and is not included in the court reinvention process of GM‘s US operations. ―We believe this step, which was taken with the support of the US government, is the most efficient and effective means for GM to quickly achieve a competitive and profitable future,‖ said Mr Nick Reilly, GM Group Vice President and President of GM Asia Pacific in Shanghai. More

New Product

Logan Edge Connect in-roads of Bhopal Mahindra Renault Private Limited (MRPL) today launched the Logan Edge Connect, a smart variant of the highly successful Logan Edge, which made its debut in 2008, at a glittering function in the City. The Logan Edge Connect features a high-end music system with hands-free telephony integrated. An in-built Bluetooth device provides the driver with hands-free option for his bluetooth enabled mobile set. A special remote control device allows you to conveniently operate your mobile from anywhere within the car. More

Toyota group co to launch trucks Japanese truck maker Hino Motors, part of the Toyota group, is launching its premium range of trucks in the country, joining a growing list of firms, including Volvo, Tata Motors and MAN, who have recently launched their truck range in the fast growing Indian market.

More Skoda's Yeti gets going! The Yeti which was unveiled to the world media at the Geneva Motor Show this March, is Skoda's fifth model in its portfolio and the first production models began rolling off the assembly line at Skoda's Kvasiny plant in the Czech Republic. The Yeti is a butch lil' number and will be offered in both front wheel drive and all wheel drive versions when it goes on sale in India.

Tata Motors Rolls Out World Truck India‘s largest automobile company by size Tata Motors, on Thursday, launched a new range of premium trucks called the World Truck, which is expected to give its commercial vehicles business a much-needed push. At present, Mercedes and Volvo are in the higher end truck segment. The product has been jointly developed by Tata Motors and its two subsidiaries Tata Daewoo Commercial Vehicle Company in South Korea and the Tata Motors European Technical Centre in the UK.

Honda launches new version of 'CBF STUNNER'

Honda Motorcycles and Scooter India (HMSI) on Tuesday launched a new version of its 125 cc sports bike - CBF Stunner priced at Rs 64,630 (ex-showroom, Delhi). The launch is part of the company's strategy to increase its sales in the Indian two- wheeler market.

Industry Competition

M&M set to challenge Tata, Leyland in heavy vehicle segment

For years, Ashok Leyland and Tata Motors have ruled the 16.6 tonne-plus medium and heavy commercial vehicle (CV) market. With a market share of over 90 per cent, they sold over 78,000 vehicles last year.

But Mahindra & Mahindra, the country‘s second-largest CV company by sales, is set to challenge their domination by offering trucks with capacities ranging from 16 tonnes to 44 tonnes by the end of this year.

Honda to Bring Products with India-Specific Engines

Japanese car giant Honda will explore possibilities to bring in products powered by India-specific engines like it has planned with the small car -- Jazz, which will be launched in the country in June.

The Japanese firm, which is present in India through a joint venture with the Siel Group, has already launched the Jazz in the UK with the same India-specific 1.2 litre petrol engine, generating 90 PS power, he added.

Goodyear to add 15% capacity

Goodyear Tyres will enhance the production capacity of its Aurangabad plant by 15% to 40 lakh tyres per annum, a top company executive said without disclosing the investments for the project.

Growth from only two models is a concern: Maruti Suzuki

Concerned over sales growth coming mainly from two of its models -- Dzire and Swift - country's largest carmaker Maruti Suzuki India said unless its other products contribute equally the company could face problems in the long-term.

Bajaj to move Supreme Court against TVS

In a setback to Bajaj Auto, the Madras High Court on Tuesday has dismissed the company‘s appeal seeking a stay on a recent order that allowed its arch-rival TVS Motor to manufacture and market the controversial bike Flame, in its original form. But, Bajaj Auto is not backing down and plans to slug it out by taking TVS to the Supreme Court.

Ashok Leyland stays in profit track through slew of combating measures

When the last fiscal was a turbulent year for the economy and commercial vehicle industry, hit by the global financial meltdown, Hinduja flagship, Ashok Leyland managed to retain its unbroken profit record of 60 years even as it reported a 59.48% drop in net profit at Rs 189.99 crore during 2008-09 against Rs 469.31 crore in the previous year.

International updates

Ford Truck Plant to Build Electric Cars

Amidst one of the auto industry‘s largest wholesale shifts in modern history, the Ford Motor Company is investing $550 million to turn a factory that was dedicated to making large and fuel-hungry sport utility vehicles into a modern and scalable small- car plant that will eventually produce an all-electric version of the Focus. More

Bridgestone 1Q Group Net Loss Y34.88 Billion Vs Y22.96 Billion Profit Year Earlier Auto analysts tracking the Indian market said that as competition intensifies in India, manufacturers will find ways to cut costs and multi-product platforms will be used to remain competitive. ―Dzire is just the beginning and we will see many more companies rolling out two or more cars from a single platform,‖ says Mohit Arora, senior director, JD Power Asia Pacific.

Honda Siel Cars India has gone a step ahead to launch two different cars from a single platform. Its soon-to-be- launched premium small car, Jazz, will be based on the Honda City platform.

In a signal that government support may not come easy for Tata-controlled Jaguar and Land Rover (JLR), the British government said that it was ready to provide only "conditional" help to the two brands as it had to "protect the interest of taxpayers".

"We are prepared to help, but not on any terms. It will be a conditional support and there will have to be some conditions as we have to protect the taxpayers' interest," the official spokesperson for UK's Department of Business, Enterprise and Regulatory Reform (BERR) — which is dealing with the matter — told TOI on phone from London.

The official spokesperson for Tata Motors said, "All we can tell you is that we are in discussions with BERR. The content and progress of these discussions cannot be disclosed. We hope you will appreciate our position."

The UK government's insistence on "conditions" for lending support is creating problems in a successful loan negotiation for JLR. It is believed to be seeking "unprecedented terms" for the help, including a position on the board of the brands. Reacting to this tough stand, Tata group chairman Ratan Tata told UK media a few days back that British government "does not appear to care about the manufacturing sector."

The spokesperson refused to agree with Tata's statement and said the government was fully aware of the importance, of the manufacturing sector. "It (Tata's statement) is incorrect. It is not fair to assume that. UK is the world's sixth largest manufacturer and the manufacturing segment is very important to our economy as it is worth £150 billion and contributes 13% to our GDP," the spokesperson said.

The BERR also dismissed reports that suggested that the government was reluctant to provide loan guarantees to the two brands as they were controlled by a foreign company, Indian in this case. Clarifying on the position of talks with JLR, the spokesperson said they were still on and had not collapsed, as was being speculated in certain sections.

German luxury car manufacturer Audi on Friday said it expected a 55 per cent growth this fiscal from the Indian market and was targeting a sale of 1,500 cars. Though luxury car sales in various countries was showing a dip following the global meltdown, the Indian market was buoyant, Audi India Managing Director Benoit Tiers told reporters here.

While in Europe, the US, Japan and Spain, about 25-50 per cent market had declined, Indian market was growing, he said. The company saw growth of 200 per cent in 2008. Already in the first four months of this fiscal there was 55 per cent growth and the same was expected for the rest of the months, he said.

Despite recession, Audi delivered over one million cars worldwide and this year was targeting sale of nine lakh units. From the Kerala market, it expects to sell 80 cars till December and 25 had already been sold.

About 1,000 cars are being manufactured at Audi's Aurangabad plant, where it has invested about 30 million euros. The production capacity can be extended to 3,000 cars here, he said.

With Kerala showing a growing luxury car market potential, Audi today opened the country's first terminal showroom in the city, exemplifying the latest and exclusive terminal architecture of Audi.

The aim of such a terminal is to increase the visibility of the brand through a design that is instantly recognizable in the metropolises around the world. Such terminals are located presently at Tokyo, Geneva, Sydney and Munich. By end of 2012, more than 350 Audi terminals are to be created worldwide, Tiers said.

Audi has nine dealerships in India and three at Ludhiana, Chennai and Delhi -- would be added by the year end.

Commercial vehicles maker Ashok Leyland Ltd said on Friday its joint venture with Japan's Nissan for light trucks has been delayed by 6 months, due to the economic slowdown and delay in land acquisition.

Production from the venture is expected to start in 2011, the company said in a statement while announcing its results for the fourth quarter.

The two companies were also debating optimal use of investments by making use of their existing facilities.

"The two partners are also evaluating the possibility of enlarging the product range in the manufacturing plan, including some additional products from Nissan's global portfolio of light commercial vehicles," it said.

These were initially slated to be produced outside India. The investment in the project is still being decided, Chief Financial Officer K. Sridharan told Reuters from Chennai.

For the quarter to March the company's net profit fell about 70 per cent to 533.2 million rupees ($10.8 million), while sales fell 52.5 per cent to 12.2 billion rupees.

During the quarter the company's profitability was helped by gains made due to new accounting norms for foreign exchange currency translations and accounting for cash flow hedges. The slowdown in economic activity led to a shift away from heavy trucks and higher capacity vehicles, in which Ashok Leyland has a significant presence.

"We are still not seeing a revival happening...but I think it has bottomed out now," Sridharan said. "For our country, the worst seems over. For the industry, demand for medium and heavy commercial vehicles can swing in single digits in the current year - the upward swing predicated upon a stable, progressive and responsive government at the Centre", Managing Director R. Seshasayee said in the statement.

Industry data shows that sales of trucks and buses have been harder hit by the downturn, falling 26 per cent in 2008/09.

The company has scaled down its capital expenditure plan for 2009/12 to 20 billion rupees from its original 30 billion rupees.

Shares in Ashok Leyland, valued at $572.5 million, rose 2.8 per cent to 21.95 rupees ahead of the results, while the main Mumbai index rose 2.5 per cent. Its shares have risen 46 per cent so far this year.

The British government has said that it is in discussions with the Tata Group-owned luxury carmaker Jaguar Land Rover (JLR) on guaranteeing loans.

While making it clear that the primary financial responsibility of the cash-strapped JLR rests with Tata Motors, the British government continues to hold confidential discussions with the company over both short- and long-term financing and business plans, an official at the department of business, enterprise and regulatory reform (BEER) said.

Hit by financial crunch amid the global slowdown, Tata Motors had sought assistance from the British government to put the ailing JLR back on track. Tata Motors acquired JLR for £1.15 billion ($2.3 billion) in April last year from US auto major Ford. JLR, which employs around 15,000 workers, axed 450 jobs in January due to falling demand. ―The (British) government wants to see JLR safely through difficult trading times and provide stability for the company and its employees. We regard JLR as a visible company with good long-term prospects. That‘s why the government is having confidential discussions with JLR and its parent company over both short and long-term financing and business plans. These negotiations are continuing,‖ the BEER spokesperson said.

The British government, which has appointed financial advisors to assist Tata Motors, is prepared to guarantee loans from the European Investment Bank (EIB) on the right terms, the official said. The EIB has already given its approval to a £340 million loan several weeks ago, but cannot dispense the cash until the British government agrees to repay it if JLR goes bankrupt.

Any government financial assistance must, of course, protect taxpayers‘ money, BEER said, adding the government was prepared to help, although not on any terms. 15 May 2009 The Economic Times

When the last fiscal was a turbulent year for the economy and commercial vehicle industry, hit by the global financial meltdown, Hinduja‘s flagship, Ashok Leyland managed to retain its unbroken profit record of 60 years even as it reported a 59.48% drop in net profit at Rs 189.99 crore during 2008-09 against Rs 469.31 crore in the previous year.

On the back of 34.7% drop in sales volume to 54,431 vehicles (Rs 83,307 vehicles, last year, net sales too took a beating with a 22.74% drop at Rs 5981 crore (Rs 7742.58 crore).

The board has trimmed dividend to Rs 1 per share (100%) from Rs 1.50 (150% paid in the last two years. On a paid up capital of Rs 133 crore, the company had reserves and surplus of Rs 1976 crore at the end of March 31, 2009 (Rs 1993.57 crore).

Financial expenses rose to Rs 118.71 crore (Rs 49.74 crore) due to borrowings for capex and working capital requirements at higher interest. Provisions for income tax dropped to Rs 12.45 crore (Rs 161.84 crore) and fringe benefit tax Rs 6 crore (Rs 7 crore).

ALL MD, R Seshasayee said in Chennai on Friday, ―It was one of the traumatic years in the 61 year old history of the company. When the global economic tsunami hit the market, the medium and heavy commercial vehicle industry was hurt the most. There was lack of cash, confidence and capital".

Further he said, " During the very turbulent and the most challenging year, the company had retained its unbroken profitable and dividend paying record of 60 years. Also, financially it remained robust (with debt: equity ration of less than 1:1) as it had the ability and resilience to take on the shock".

Last year, the company focused on non-cyclical businesses like buses, genset engines and power solutions business. Their share increased to 50% of the turnover from 34% in 2007-08. In buses, ALL regained its market leadership with a share of 46% while in trucks it lost 1.87% mainly due the steep in south, its traditional strong hold.

He expects the market and company to stage recovery in the second half of this year with new Government expected to support investments on infrastructure. With the interest rates softening, savings are expected to decline, a consumption driven pick up is expected to aid the recovery.

Last year, the company unveiled a slew of combative measures to manage the situation. These included reducing working days, effecting a 20% cut in wages and salaries for all, reducing operating cost by Rs 90 crore, containing employee costs to Rs 566 crore ( Rs 616 crore) and benefiting from the lower raw material cost.

It scaled down the investment plan for 2009-12 from Rs 3000 crore to Rs 2000 crore but protected the outlay for product development. Uttrakahnd unit is slated to go on stream by this fiscal end with an initial capacity of 50,000 vehicles. Trial production has begun at the bus plant in al Khaimah.

Mr Seshasayee said the joint ventures with Nissan and John Deere are intact and they are progressing. FIPB has cleared the JV with JD for the manufacture of construction equipment; he said referring to reports of objections from Tata Motors. He expected the captive financing arm to take off in two months after getting RBI approval. Last year, exports to Sri Lanka and Middle East suffered but he expected it to pick up this year.

International Updates

Ford Truck Plant to Build Electric Cars 6 May 2009 The New York Times

Amidst one of the auto industry‘s largest wholesale shifts in modern history, the Ford Motor Company is investing $550 million to turn a factory that was dedicated to making large and fuel-hungry sport utility vehicles into a modern and scalable small-car plant that will eventually produce an all-electric version of the Focus.

The Michigan Assembly Plant, known as one of the world‘s most profitable manuf acturing sites during the S.U.V. boom of the 1990s, was once the hub for the Ford Expedition and Lincoln Navigator. The plant is expected to begin building the new Ford Focus next year, followed by production of the all-electric Focus in 2011.

The electric Focus will be Ford‘s first all-electric passenger car for the mass market. In addition to the electric Focus, the company plans to sell an electric version of its Transit Connect commercial vehicle in 2010.

Ford has previously promised that they will deliver four new electric vehicles to the American market by 2012.

―The transformation of the Michigan Assembly Plant embodies the larger transformation under way at Ford,‖ said Ford‘s president and chief executive, Alan Mulally, in a statement. ―This is about investing in modern, efficient and flexible American manufacturing. It is about fuel economy and the electrification of vehicles.‖

The electric Focus is part of a larger strategy announced by Ford in January to develop electric vehicles for North America quickly using its global reach and capability to keep the cars affordable.

In addition to the Michigan Assembly Plant, Ford is retooling two other factories to build new cars in the face of global market changes. The company‘s Cuautitlán Assembly plant in Mexico is slated to begin building the new Fiesta subcompact early next year, and its Louisville Assembly plant in Kentucky is also expected to begin producing small vehicles based on the Focus platform beginning in 2011.

―We‘re changing from a company focused mainly on trucks and SUVs to a company with a balanced product lineup that includes even more high-quality, fuel-efficient small cars, hybrids and all-electric vehicles,‖ said Mark Fields, Ford‘s president of the Americas. ―As customers move to more fuel-efficient vehicles, we‘ll be there with more of the products they really want.‖

Back to Top Bridgestone 1Q Group Net Loss Y34.88 Billion Vs Y22.96 Billion Profit Year Earlier 8 May 2009 Easybourse.com Bridgestone Corp. on Friday reported a net loss of Y34.88 billion for the January-March quarter, as the global economic slump, strong yen and dwindling auto sales weighed on tire demand. The Japanese tire maker posted a net loss of Y34.88 billion in the three months ended March 31, down 124.5% from a net profit of Y22.96 billion a year earlier.

Bridgestone, which competes neck-to-neck with France's Michelin for the top spot in global tire sales, swung to an operating loss of Y12.35 billion from an operating profit of Y39.8 billion a year earlier.

Sales sagged 28.8% to Y567.67 billion in the quarter ended March from Y797.84 billion. The tire maker further lowered its earnings forecast for the first half ending July 30, expecting a group net loss of Y62 billion from a Y21 billion net loss forecast in February, and an operating loss of Y40 from an initial forecast of Y12 billion. The company reports earnings under Japanese accounting standards.

Michelin North America has agreed to a settlement in an investigation led by the Tennessee attorney general into the tire maker's advertising claims of fuel efficiency. The settlement reached Thursday will require the Greenville, S.C.,- based company to have reliable scientific evidence supporting any claims used in advertising and to pay the 17 states involved a total of $375,000.

Michelin officials said they provided test data demonstrating that its tires were the most fuel efficient in most of the 37 categories of tires and will make only minor changes to its advertising claims. Scott Clark, chief operating officer of Michelin Americas Small Tires, said the only complaint they received regarding the ads came from a competitor - Nashville, Tenn.-based Bridgestone Americas Tire Operations.

German tire maker Continental AG said Tuesday about 425 workers would lose their jobs due to production cuts at the Hannover Stoecken plant, although the company committed to keeping the site open at least until the end of 2010.

Hannover-based Continental said it would cut back its heavy vehicle tire production at the plant, but would maintain a work force of about 300 employees and a yearly capacity of 500,000 tires there to the end of 2010. The company will decide in June 2010 whether to continue production at the site in 2011.

Continental, like many companies, saw demand for its products fall sharply as the global recession took hold. If the decision is taken to not continue production at Stoecken, then the 300 workers will be cut from the work force through the end of 2010, Continental said in a statement. Continental said the plant's management and the workers' council would currently agree on a socially acceptable severance plan "To allow around 200 employees to leave the plant in 2009. A further group of approximately 225 employees will be phased out of the plant work force over the first three quarters of 2010," the statement said.

Continental said it had reached the decision with trade unions and employee representatives, while the state government of Lower Saxony also played a positive role. Continental has also seen protests over job cuts turn violent in France in recent weeks. Earlier this month, workers burned tires outside the Sarreguemines plant near the French- Luxembourg border and in April workers destroyed furniture and windows at the Clairoix factory north of Paris.

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