Chevrolet Hosts Jonas Brothers at RenCen
Hollywood Records' Band supports Chevy's Green
Vehicle Line-up
DETROIT, MI - Chevrolet is pleased to welcome
Hollywood Records' Jonas
Brothers to the GM Renaissance Center for an
informal concert for RenCen
employees. The boys will be in Detroit as part of
their sold out arena
tour with Disney Channel star Hannah Montana.
"We are just so pleased to have these great boys at
Chevy headquarters,"
says Chevrolet General Manager Ed Peper. "The Jonas
Brothers represent
clean, family entertainment and it's through our
partnership with Disney
and the Equinox Electric Fuel Cell Vehicle program
that we have been
able to get to know them."
Kevin, Joe and Nick Jonas have been building a
relationship with Chevy
since they learned of the division's "Gas-Friendly
to Gas-Free" efforts.
The Jonas Brothers recently had a chance to drive
the Equinox Fuel Cell
Electric Vehicle and became enamored with
Chevrolet's green lineup.
"The car was fun to drive and had zero emissions,"
said Kevin Jonas.
Added Nick Jonas, "I'm going to start driving soon,
and green is
definitely the way to go." Nick Jonas added, "Being
eco-friendly is
important to us. We worked with our record label to
come up with the
first ever CD-VU+ format, a 100% recyclable
package."
The Jonas Brothers are currently touring with the
Hannah Montana "Best
of Both Worlds" tour, which stops at the Palace of
Auburn Hills on
Wednesday, December 5 at 7 p.m.
ABOUT JONAS BROTHERS
Jonas Brothers are signed to Hollywood Records, a
label within the
Disney Music Group. They are managed exclusively by
Philip McIntyre for
Philymack, Inc., Kevin Jonas, Sr. for Jonas
Enterprises, and Johnny
Wright for Wright Entertainment Group. Creative
Artists Agency is the
exclusive talent agency representing the group.
General Motors Corp. is bidding for a "significant
stake" in Russian
automaker OAO Avtovaz, setting up a high-stakes race
with rivals to
capitalize on booming demand in one of the world's
fastest-growing car
markets.
GM spokesman Marc Kempe declined to specify the size
of the stake that
GM is seeking or how much the Detroit company has
offered to pay, though
he described the offer as "competitive." He said the
move is part of a
broader effort by GM to "extend our presence" in
Russia, where sales of
foreign-brand cars have risen more than 60 percent
this year, thanks to
an increasingly affluent middle class and an
oil-fueled consumer boom.
Avtovaz officials couldn't be reached for comment.
Avtovaz, whose market
capitalization is roughly $4.9 billion at current
market prices, is
controlled by Rosoboronexport, the Russian
arms-export agency. In recent
weeks, Avtovaz executives have told Russian news
organizations of plans
to offer a stake of just under 25 percent to a
strategic Russian
investor, possibly in the metals industry, and a
similarly sized stake
to a potential suitor in the auto industry.
The company, which is Russia 's largest automaker by
vehicles sold, has
sought help to modernize its aging production lines
and models and
stanch a falloff in domestic market share. The
company's Lada brand has
long been Russia 's best-selling car brand, but its
share of the
domestic market has fallen from 51.8 percent in 2005
to 37.5 percent
last year. This year, Lada is expected to finish
with just 26 percent of
the Russian market, according to projections by
Global Insight, an
industry forecaster.
GM's announcement that it is bidding for a stake in
Avtovaz comes just a
week after Germany 's Volkswagen AG opened a new
factory in Russia , and
highlights the way Western automakers are under
pressure to shift money
away from their own saturated markets and into the
fast-growing
economies of Brazil , Russia , India and China .
Demand for new cars
there has been stoked by a rapidly growing middle
class and, in Russia
's case, an oil-fed consumer boom. The strong growth
in the big,
developing economies contrasts with the stagnant
sales in auto
companies' traditional major markets - the U.S. ,
Western Europe and
Japan .
Some industry analysts expect Russia to become
Europe's second-biggest
car market by number of new cars sold, behind
Germany , as early as the
end of this year. GM has benefited especially from
that trend, with its
sales in Russia expected to top 250,000 vehicles
this year, compared
with 132,000 last year. The company's Chevrolet
brand is Russia 's
best-selling foreign brand, while its Opel unit is
the fastest-growing
brand in the country.
GM already operates a joint venture with Avtovaz.
The partnership was
thrown into uncertainty in late 2005, after Avtovaz
was effectively
taken over by Rosoboronexport, in what some industry
observers
interpreted as an attempt by Russia 's government to
reassert control
over the country's auto industry. One of the first
moves by the new
management at Avtovaz was to stop delivering parts
to the joint venture
over a pricing dispute, causing it to halt
production briefly. The two
sides have since resolved their differences.
GM is seeking to counter a potential competitive
threat from rivals like
Italy 's Fiat SpA, which has also expressed interest
recently in
investing in Avtovaz. In October, Fiat signed a
memorandum of
understanding with Avtovaz to explore ways in which
the two companies
could share technology, parts and platforms. Fiat's
chief executive,
Sergio Marchionne, has been aggressive in forging
alliances with other
international players such as the auto arm of Tata
Group in India .
In a recent conference call, Mr. Marchionne said
that "a deal with
Avtovaz would open up an enormous market" for his
company, but also
described Avtovaz as "a company that needs bringing
back to health."
Another potential threat looms from France 's
Renault SA, which
assembles cars in Russia through a joint venture
with the Moscow
government. A spokeswoman for Renault said yesterday
that the French
company was in discussions with Avtovaz over a
partnership, but declined
to elaborate.
"All of these automakers are building their sales
and production
networks [in Russia ] organically, but it's not
going quickly enough to
meet the targets they've set" for Russia , said Ivan
Bonchev, an
auto-industry analyst with Ernst & Young in Moscow .
ABOUT JONAS BROTHERS
Jonas Brothers are signed to Hollywood Records, a
label within the
Disney Music Group. They are managed exclusively by
Philip McIntyre for
Philymack, Inc., Kevin Jonas, Sr. for Jonas
Enterprises, and Johnny
Wright for Wright Entertainment Group. Creative
Artists Agency is the
exclusive talent agency representing the group.
General Motors Corp. is bidding for a "significant stake" in Russian
automaker OAO Avtovaz, setting up a high-stakes race with rivals to
capitalize on booming demand in one of the world's fastest-growing car
markets.
GM spokesman Marc Kempe declined to specify the size of the stake that
GM is seeking or how much the Detroit company has offered to pay, though
he described the offer as "competitive." He said the move is part of a
broader effort by GM to "extend our presence" in Russia, where sales of
foreign-brand cars have risen more than 60 percent this year, thanks to
an increasingly affluent middle class and an oil-fueled consumer boom.
Avtovaz officials couldn't be reached for comment. Avtovaz, whose market
capitalization is roughly $4.9 billion at current market prices, is
controlled by Rosoboronexport, the Russian arms-export agency. In recent
weeks, Avtovaz executives have told Russian news organizations of plans
to offer a stake of just under 25 percent to a strategic Russian
investor, possibly in the metals industry, and a similarly sized stake
to a potential suitor in the auto industry.
The company, which is Russia 's largest automaker by
vehicles sold, has sought help to modernize its aging production lines
and models and stanch a falloff in domestic market share. The
company's Lada brand has long been Russia 's best-selling car brand, but its
share of the domestic market has fallen from 51.8 percent in 2005
to 37.5 percent last year. This year, Lada is expected to finish
with just 26 percent of the Russian market, according to projections by
Global Insight, an industry forecaster.
GM's announcement that it is bidding for a stake in
Avtovaz comes just a week after Germany 's Volkswagen AG opened a new
factory in Russia , and highlights the way Western automakers are under
pressure to shift money away from their own saturated markets and into the
fast-growing economies of Brazil , Russia , India and China .
Demand for new cars there has been stoked by a rapidly growing middle
class and, in Russia 's case, an oil-fed consumer boom. The strong growth
in the big, developing economies contrasts with the stagnant
sales in auto companies' traditional major markets - the U.S. ,
Western Europe and Japan .
Some industry analysts expect Russia to become
Europe's second-biggest car market by number of new cars sold, behind
Germany , as early as the end of this year. GM has benefited especially from
that trend, with its sales in Russia expected to top 250,000 vehicles
this year, compared with 132,000 last year. The company's Chevrolet
brand is Russia 's best-selling foreign brand, while its Opel unit is
the fastest-growing brand in the country.
GM already operates a joint venture with Avtovaz.
The partnership was thrown into uncertainty in late 2005, after Avtovaz
was effectively taken over by Rosoboronexport, in what some industry
observers interpreted as an attempt by Russia 's government to
reassert control over the country's auto industry. One of the first
moves by the new management at Avtovaz was to stop delivering parts
to the joint venture over a pricing dispute, causing it to halt
production briefly. The two sides have since resolved their differences.
GM is seeking to counter a potential competitive
threat from rivals like Italy 's Fiat SpA, which has also expressed interest
recently in investing in Avtovaz. In October, Fiat signed a
memorandum of understanding with Avtovaz to explore ways in which
the two companies could share technology, parts and platforms. Fiat's
chief executive, Sergio Marchionne, has been aggressive in forging
alliances with other international players such as the auto arm of Tata
Group in India .
In a recent conference call, Mr. Marchionne said that "a deal with Avtovaz
would open up an enormous market" for his company, but also
described Avtovaz as "a company that needs bringing back to health."
Another potential threat looms from France 's
Renault SA, which assembles cars in Russia through a joint venture
with the Moscow government. A spokeswoman for Renault said yesterday
that the French company was in discussions with Avtovaz over a
partnership, but declined to elaborate.
"All of these automakers are building their sales and production
networks [in Russia ] organically, but it's not going quickly enough to
meet the targets they've set" for Russia , said Ivan Bonchev, an
auto-industry analyst with Ernst & Young in Moscow .
First Responder community, it will be developed
and posted to this
Web site for first responders," said Hershel Burson,
manager, GM Service
Technical College. "At the Web site, there is a
'Contact Us' button the
first responder can click on to provide feedback to
the GM STC with
suggestions of more or different types of
information they would like to
see on this site."
Currently, the Web site contains information for
first responders on the
BAS Hybrid, the 2-Mode Hybrid and the Fuel Cell
Equinox vehicles. There
are informational courses as well as quick reference
guides. All of this
material can be downloaded to a first responder's
laptop to carry in
their emergency vehicles with them or the quick
reference guides can be
printed in color, laminated and kept in the
emergency vehicles for ready
reference to the first responders in an emergency
situation.
HUNGER TAKES NO HOLIDAY . . . The General Motors
Men's Club
(http://www.gmmensclub.org), a 501(c) non-profit
charitable
organization, is conducting a "Buy a Card, Give a
Meal" program over the
holidays. Buy a $5 greeting card at the Warren Tech
Center in Warren ,
Mich. , and the card and a complete meal will be
sent to a homebound
elderly person in the community. The deadline for
Chr¢
o-seater
with a 1-liter engine
that gets as much as 45 mpg -- will be more than a
fad. More consumers
will want a fun, safe car that is economical to
drive, has low
greenhouse gas emissions and is easy to park, he
said.
"The only vehicle I privately own is a Smart,"
Zetsche said. He said
Daimler wants to partner with a U.S. city for a test
of all-electric
Smart cars, just as it has done with London and will
do with a city in
France . He also hinted that a diesel-powered Smart
will come to the
United States , but he said Daimler will move
cautiously before trying
other body types.
STUDY SHOWS WHITE IS NEW FAVORITE COLOR FOR CARS
.... The Detroit News
reported that according to the DuPont 2007 Global
Automotive Color
Popularity Report, released Tuesday, white/white
pearl ended silver's
streak of seven years as the world's most popular
color for automobiles.
In North America , as well, white is the most
popular color, holding 19
percent of the vehicle market. Silver cars make up
18 percent of the
market, and black/black effect (a metallic, sparkly
finish) 16 percent.
Last year, white and silver were tied for most
popular in North America
. Silver's seven-year hold on the top spot was the
longest consecutive
streak in the 55-year history of the survey.
DuPont, a top supplier of automotive coatings, said
other styles gaining
interest are niche colors and effects, including
matte finishes. Red is
also growing in popularity -- increasing its share 2
percentage points
in North America and surpassing gray and blue to
become the fourth most
popular color in the market.
News Releases
\
General Motors' Flint Tool and Die Plant Recycles
and Reuses all Plant
Wastes
*\tab Plant is one of ten GM facilities worldwide that
have achieved
landfill free status
*\tab "Zero waste" includes recycling an amount of
polystyrene equal
to that of 42 million coffee cups annually
*\tab GM's North American facilities recycle nearly 88
percent of waste
FLINT, Mich. - General Motors' Flint Tool and Die
Plant will recycle an
amount of polystyrene equal to that of 42 million
coffee cups this year,
an achievement that makes the plant "landfill free,"
recycling or
reusing all normal plant wastes.
The facility makes polystyrene patterns that are
used to create cast
iron dies that stamp out body parts for virtually
every General Motors
vehicle sold in North America . Workers at the plant
construct the
precision patterns from big, 12-foot rectangular
blocks of polystyrene.
The patterns are used to mold the dies, which then
return to the plant
to be machined and finished. In a typical year, the
plant will recycle
180,000 lbs of polystyrene.
Flint Tool and Die joins Flint Engine South as two
of General Motors'
ten plants worldwide that have achieved landfill
free status. Other
plants are located throughout the United States ,
Korea and Germany .
GM's North American facilities currently recycle
nearly 88 percent of
the waste they generate.
Holden Still in Neutral on Hybrid Local Car
The Age ( Melbourne , Australia )
By Ian Porter Dec. 5, 2007
MELBOURNE – GM Holden's reliance on the Middle East for Commodore export markets may block GMH developing a hybrid version of the car, even though it is the world design centre for GM's rear-wheel-drive cars.
The company was waiting to see the exact form of the Labor Government's policy on helping the development of alternative drive trains, GMH chief Chris Gubbey said this week.
"We are waiting for statements on what exactly that is going to involve," Mr. Gubbey said when asked about the possibility of a hybrid Commodore. Hybrid cars have two forms of propulsion, with the most common a combination of petrol engine and electric motors.
"I think it will be particularly difficult because it will depend not just on the local market, but on the export market as well," he said.
The local market absorbs about 57 percent of the Commodores made but this will drop to about 50 percent next year now that GMH has started to build Pontiac G8 sedans for export to the US .
The G8 contract will raise GMH's output at its Elizabeth plant in South Australia to about 140,000 cars a year, with about 30,000 going to the US , 40,000 to the Middle East and the rest sold in Australia and New Zealand .
GMH would need strong demand from its export markets to justify the investment required to make a hybrid Commodore but the oil-rich countries in the Middle East have shown no interest in hybrids of any kind.
Another negative factor is that, when customers are presented with two similar cars, one with a petrol engine and one with a more expensive hybrid drive train, they overwhelmingly choose the cheaper model.
"Fifty-seven per cent of our production is built solely for the local market. Even with that (a hybrid Commodore) it would be difficult to justify in the short term . . . on a Commodore," Mr. Gubbey said.
"We are looking at it right the way across the (vehicle) range and what we need to be doing in terms of improving fuel economy."
Another GMH director said the company would be interested in participating in a Federal Government program but it was more likely GMH would look at specialising in the design and/or manufacture of specific parts of an alternative drive train.
The director, who asked not to be named, said the matter was complicated by the fact that General Motors was running a series of research programs in the US into the most suitable forms of alternative drive trains, including diesel, ethanol, bio-diesel, hybrids, hydrogen fuel cells and electric cars.
GMAC Will Name Chief Risk Officer After Mortgage Loss
The Wall Street Journal
By John D. Stoll Dec. 5, 2007
GMAC Financial Services, the lender owned by Cerberus Capital Management LP and General Motors Corp., is expected to announce the appointment of a chief risk officer as early as today as it continues to realign its executive ranks following steep losses at its mortgage arm.
Sam Ramsey, a 48-year-old former Bank of America Corp. executive who joined GMAC as treasurer in September, will run the company's newly created risk-management department. David Walker, GMAC's head of global borrowings, will succeed Mr. Ramsey as treasurer, and he will become part of the new unit.
While GMAC has had risk-management operations in the past, the company is centralizing these activities because they are "fundamentally important for a financial-services enterprise, especially in this current market environment," GMAC spokeswoman Gina Proia said.
Mr. Ramsey's appointment follows moves last month by other financial-services companies, including J.P. Morgan Chase & Co. and Citigroup Inc., to beef up their risk management.
Since early this year, GMAC, which has large insurance and auto-financing businesses, has been working to fix its unprofitable Residential Capital mortgage arm. ResCap, which was a prized asset as recently as April 2006 when Cerberus bought 51 percent of GMAC from GM, had a third-quarter loss of $2.3 billion, pushing GMAC to a quarterly loss of $1.6 billion, the largest in its 88-year history.
Mr. Ramsey, along with newly appointed Chief Financial Officer Robert Hull, will report to GMAC Chief Operating Officer Al de Molina. Like Mr. Ramsey, Messrs. de Molina and Hull joined GMAC this year from Bank of America.
Delphi to Raise Stock Payout
Detroit Free Press
By Jewel Gopwani Dec. 5, 2007
In an effort to bring two key stakeholders back on board in its Chapter 11 reorganization, Delphi Corp. plans to boost its stock payout to unsecured creditors and shareholders.
The changes are the third revisions Delphi has made to its three-month-old plan as the company tries to win an exit loan in a tight credit market and, at the same time, balance the interests of creditors and shareholders who would vote on the plan.
Previous changes drew objections from those groups as the company scaled back payouts to creditors and shareholders to lower its debt.
Delphi said it now has the support of those groups. But the revisions would mean that other parties would see their recovery or their claims against Delphi decline.
Here is how some key stakeholders would fare under the revised plan:
Current shareholders: Would receive 469,720 shares of common stock and three sets of rights – expiring in six months, seven years and 10 years – to buy shares at $59.61 and at 9 percent and 21 percent premiums.
Unsecured creditors: Would see 77.3 percent of their claims in the form of new stock, instead of 75 percent. The rest would be in the form of rights to buy Delphi shares at $38.39, a 35.6 percent discount. In September, unsecured creditors were slated to receive 80 percent of their claim in stock and 20 percent in cash.
Bondholders: Certain bondholders who in previous versions expected to be paid in full, would see 90 percent of their claims.
Investors: A group of investment banks and private-equity groups willing to invest up to $2.55 billion in the company through purchases of preferred and common stock, would buy that stock at lower discounts than the previous proposed plan.
Class-action plaintiffs: Shareholders involved in a class-action suit accusing Delphi of misleading investors would see their claim against the company fall from $204 million to $179 million.
Despite the changes, the plan could face objections. In court papers filed late Monday, the company said there are still disputes over the value of the company and the treatment of certain creditors.
Meanwhile, more amendments to the plan could be filed before a hearing Thursday in U.S. Bankruptcy Court to consider whether the plan should go before creditors for a vote
Delphi , which filed for Chapter 11 more than two years ago, said it still intends to leave bankruptcy protection during the first three months of 2008.
Before the credit crunch, Delphi expected to leave Chapter 11 bankruptcy by the end of this year.
The company says it must leave bankruptcy by March 31, or it risks losing its $2.55-billion investment deal.
Delphi in Fresh Change to Restructuring Plan
Financial Times
By Chris Nuttall and Bernard Simon Dec. 5, 2007
Delphi, the bankrupt U.S. automotive parts supplier, has made further adjustments to its restructuring plan to win the support of creditors and shareholders.
Details of the changes are expected to be filed with a New York bankruptcy court prior to a hearing on Thursday.
Nonetheless, Delphi said it had reached agreements in principle with key constituencies, including unsecured creditors, shareholders, General Motors and an investor group, led by Appaloosa Management.
Delphi defended a provision that would allocate shares in the reorganized company to plaintiffs in a class-action lawsuit alleging securities law violations.
It said in a court filing that “the resolution of this litigation is critical to [the] reorganization to eliminate the significant risks and costs associated with litigating complex actions under federal securities laws and the Employee Retirement Income Security Act”.
GM spun off Delphi in 1999 and remains its biggest customer. According to the latest filing, the carmaker will receive about $2.6 billion in cash, a second lien and junior convertible shares. It will also be released from various claims against Delphi .
In return, it has agreed to provide labor subsidies, future-order commitments and “other consideration”.
Delphi emphasized that the settlement with GM “provides significant consideration to Delphi , which allows [it] to provide distributions to other stakeholders that would be impossible to deliver without the settlement”.
A group of banks, led by JPMorgan, has been trying to put together an exit package for Delphi . But turmoil in credit markets has complicated this effort, forcing the parts maker to rejig the restructuring plan several times since it was first filed three months ago.
Delphi said on Tuesday that it still aimed to emerge from court protection in the first quarter of 2008. It had planned to complete the restructuring, one of the biggest and most complex by any U.S. industrial company, by mid-2007.
Delphi has shed several businesses and sharply reduced its North American workforce. Over 24,000 employees have retired, accepted buy-outs or returned to GM. All but eight of its 33 U.S. plants are being closed or sold.
One Existing Model + A Few New Touches = $pecial Edition
USA Today
By Chris Woodyard Dec. 5, 2007
LOS ANGELES – Never mind that the current version of the Ford Mustang is pushing three years on sales floors. There's a new pony car in town.
Well, not exactly new. The Bullitt Mustang starts with the same old vehicle, then infuses it with a hopped-up engine, tighter suspension, a black or dark green paint job and a heavy dose of attitude.
The model, which pays homage to the 1968 action flick Bullitt starring the late Steve McQueen, held a prominent place in Ford's display at the Los Angeles Auto Show last month.
Bullitt, a new version of an aging car, sheds insight into how the auto industry juices sales with one of its oldest stunts – the special edition.
When a model hits three or four years without a major revamp or if sales dip or when executives just feel like it, along comes a special edition. Often, it's little more than a few new parts, some new paint, decals and a fresh press release.
"It's a relatively low-cost proposition to breathe new life into a vehicle that's been around for a number of years," says Michael Robinet, vice president of auto consultants CSM Worldwide. Automakers can often command a healthy price premium for their relatively meager effort, or at least prop up skidding sales.
Some became such hits that a particular special edition can stick around for years. Or an automaker might crank out a steady stream of short bursts around a model: There are at least seven for the current-generation Mustang.
But the strategy has its risks. Some brands throw on so many special editions that they're no longer special, a risk that Ford could be running with Mustang. Or the variants become too wild or ridiculous, alienating hard-core enthusiasts.
Automotive history is littered with relics such as the Frank Sinatra edition of the 1982 Chrysler Imperial luxury car; the Adolfo Gucci edition of the 1973 AMC Hornet Sportabout wagon; or the Levi's Jeep of the 1970s, its seats covered in tight-fitting blue denim.
The gold – or in this case, pink – standard for bad judgment in special editions remains the 1955 Dodge La Femme, touted in ads as "the first and only car designed for Your Majesty, the modern American woman." Either blatantly sexist or strangely liberating, depending on how you look at it, La Femme came with its own rose-hued shoulder bag and umbrella to match the seats.
La Femme, a special edition of a Dodge Custom Royal Lancer, lasted only two years because 1950s husbands wouldn't be caught dead in it, thus limiting its appeal. "That was a car only a woman would drive," says Leslie Kendall, curator of the Petersen Automotive Museum here.
Special editions succeed when consumers perceive extra value and performance, not just extra decals and fancy paint, Kendall says. "Properly packaged and promoted, they can capture interest."
Ford's Harley-Davidson edition F-150 pickup was introduced in 2001 and shows no sign of going away.
Likewise, Ford's tan and forest-green Eddie Bauer version of the Explorer SUV became a potent status symbol for kid-toting yuppies in the 1990s. The Bauer label stuck and has spread over the years to the bigger Expedition and new Taurus X crossover model, as well.
Looks and image aren't enough. Features count. "Eddie Bauer worked because it had content," says Ian Beavis, marketing chief for South Korean brand Kia. "It absolutely fit like a glove."
Automakers have taken other distinct tactics with special editions:
Nostalgia. Whether new versions of famous old muscle cars or decked-out highway barges, automakers are always trying to cash in on big-name versions of yesteryear.
Chrysler, for instance, is offering a "Super Bee" version of its Dodge Charger SRT8, just as it did in 1968. Like the original, it comes in a bright "detonator yellow" with black decals denoting its heritage.
Chrysler also has offered a PT Cruiser variant each year, always just in time for Detroit 's famous Woodward Avenue Dream Cruise in August. This year's Sunset Boulevard Edition, a nod to Hollywood glamour, had custom paint and extra chrome accents.
They "drum up emotion," says Chrysler Vice President Steve Bartoli. Usually, few special-edition models are left over. "They move very well," he says.
Value extras.When Japanese or South Korean models are about due for a change, along come some extra accessories and the designation as a special edition.
Hyundai created a 20th-anniversary Sonata – if anyone wants to commemorate the problem-plagued original – that had unique body-side molding, a rear spoiler, black interior and silver exterior.
"Putting a special edition together where you throw in some extra equipment at no extra cost helps you avoid putting in so much (extra sales) incentive … which can hurt the residual (value) of the new car you are trying to launch," says John Krafcik, a Hyundai Motor America vice president.
Likewise, Honda added leather seats and other extras to create an Accord Special Edition before the current model went on sale this year. "It's been a nice way in the third year of a four-year product cycle to give an extra kick in the pants," says spokesman Kurt Antonius.
General Motors has a "chrome edition" Silverado pickup that can be customized at dealerships.
Regional. Automakers try to play to local tastes, dressing up special editions for one market that they know will have little appeal elsewhere.
Ford, for instance, rolled out special editions of F-150 pickups and Ford Bronco SUVs a few years ago that were aimed at NFL fans in various cities. Al Giombetti, executive director of Ford's Customer Service Division, says he had a blue-and-white pickup that celebrated the late, great Houston Oilers.
Nowhere has the regional special-edition shootout played heavier than in pickup-loving Texas . Dodge offers a Lone Star edition of its Ram pickup. Ford's King Ranch F-150 pickup, with saddle-type leather in the cab, is a longstanding winner.
And Toyota offers a 2007 Tundra Lucchese edition in collaboration with one of Texas ' top bootmakers. It has lots of leather in the interior, even ostrich skin.
Sold in five states, the Lucchese edition barely raises eyebrows outside the Southwest. "I didn't find one person in L.A. who knew what the Lucchese brand was," says Tundra marketing chief Brian Smith.
When it has come to all these special-edition ploys, few models can match Mustang. Since its inception as a 1965 model, Ford has rolled out everything from the Calgary Stampeders' Limited Edition for 1966 to the Mustang II Silver Ghia for 1974.
For the latest generation, Ford brass challenged the Mustang team to produce at least one new special edition a year. That has resulted in at least six iterations in the past three years, depending on how you count them. Some are performance-oriented, such as the new $75,000 race car FR500S, or the GT-H, made as a hot-rod rental car for Hertz, which in turn sold it to eager buyers.
Others are styling exercises, such as the $29,660 GT/California Special or the $22,770 "Warriors in Pink" special edition for 2008. It has a pink racing stripe and pink breast-cancer awareness ribbon decal. And every purchase results in a $250 donation to the Susan G. Komen for the Cure charity fund.
Yet another special-edition Mustang is in the wings, the Shelby GT500 KR, a powerful muscle-car version. KR stands for King of the Road.
Overkill? "Sometimes it's overdone. They take a good idea and beat the drum a little too hard," says curator Kendall. Mustang, he adds, risks falling into that category.
But special editions are good business. A base-level Mustang sells for as little as $19,250 with a V-6 engine. But the Shelby GT500 version was priced at $42,675. Bullitt will cost $31,075 when it goes on sale early next year.
The latest Bullitt Mustang is meant to draw interest from those who remember the chase scene of the now fairly obscure movie in which McQueen repeatedly jumped a Mustang off hills in San Francisco . Like the movie version, the Bullitt Mustang won't show off with scoops, a spoiler or big emblems. Rather, it will depend on a big engine – a V-8 that delivers 315 horsepower, 15 more than stock versions.
Ford made its original heritage Bullitt in 2001, turning out 5,400. This time, it plans 7,700.
That pleases enthusiasts such as Greg Autry, who organizes the Bullitt Nationals every year, a function of the International Mustang Bullitt Owners Club.
The owner of the older Bullitt, Autry, 46, a security manager in Houston , says he was drawn to the car by its looks and heritage. "It's very understated," he says
But if Mustang hadn't starre
d in the car-chase movie, he's not sure he would have bought one. Not everyone feels that way. "Some like the car and find out about the movie later," he says.
Giombetti says he sees the appeal.
Special editions "allow people to buy something that really speaks about themselves. It's unique," he says. "In a mass-produced world, it gives them something that's a little more individual."
Even if it's pink.
Daimler's Smart Car Set to Go on Sale Next Month
The Detroit News
By David Shepardson Dec. 5, 2007
WASHINGTON – Daimler AG's Smart car will go on sale in the United States next month with orders for more of the gas-sipping minicars than Daimler can build next year.
Daimler Chairman and CEO Dieter Zetsche said Tuesday that more than 30,000 Americans have paid a $99 deposit to buy one of the 1,800-pound two-seat vehicles that get 40 miles per gallon on the highway. The automaker expects to convert 90 percent of those deposits to sales.
"We were totally amazed by the kind of reaction we got," Zetsche said at a breakfast with reporters. "We will not be able to meet the demands here next year."
Smart, a unit of Daimler's Mercedes-Benz Cars division, is targeting the three-cylinder, 70-horsepower vehicle at consumers weary of rising gasoline prices, as well as environmentally minded motorists and urban dwellers. The car's top speed is 90 mph, and it is electronically limited by an on-board computer.
Smart USA will be headquartered in Bloomfield Hills and attached to the only Michigan Smart dealership on Telegraph Road, north of Square Lake . The flagship dealership and eight others will be owned by Roger Penske's Penske Automotive Group, Smart's sole U.S. distributor.
Smart USA President David Schembri said the company has seen strong interest in Michigan . More than 1,000 Michiganians have paid deposits, making the state one of the top 10 for Smart.
Smart will have 74 dealerships nationwide by the end of the year, including 33 attached to existing Mercedes-Benz dealerships.
Schembri said the reason for driving a small car alone around town is simple. "If I go out to dinner by myself, I don't order enough food for five people," he said.
A person ordering a vehicle now might be able to get one in late 2008 or 2009, but customers should check with dealerships to see if there are cancellations, Schembri said.
The Smart fortwo starts at $11,590 for a very basic model – one without a radio, power steering or air conditioning. The top-of-the-line convertible model with options is $17,440.
David Healy, an auto analyst at Burnham Securities predicted there will be some initial demand for the Smart, but questioned how much sales would grow in the next few years, as other small cars enter the market – including a potential Chinese-made small car.
"It's not going to be a financial disaster, but the exchange rate is an issue," Healy said.
Zetsche acknowledged that the expensive euro makes it harder to make a profit on the Smart, which is built in France , but he said the company would make money on the car in the States.
Since the Smart brand debuted in Europe in 1998, the company has sold about 850,000 vehicles. In Canada , the company sold more than 10,000 in the first 2 1/2 years; it expected to sell only 3,000.
Zetsche joked that at just 8-feet-10 inches, the Smart is only a foot longer than NBA basketball star Yao Ming is tall.
"When you just want to go from to A to B with a lot of fun and don't want to carry three persons, Smart gives you everything you can ask for," Zetsche said.
Zetsche said the only car he personally owns in Europe is a Smart that he uses to go shopping and downtown.
Daimler also announced Tuesday it is seeking to work with an American city to locate 100 plug-in electric Smart vehicles, similar to a test it is doing in London and is considering in France . British officials have waived the $17 congestion surcharge for drivers of the plug-in vehicles and have given them parking and access to recharging stations.
Adrian Lund, president of the Insurance Institute for Highway Safety, who test drove the Smart car Tuesday, said his group was looking forward to putting the car through its crash tests. Daimler expects the car to receive four star-crash ratings.
Several members of Congress and regulators also drove the car Tuesday.
Daimler is preparing for the first Smart sales here as a bill is moving through Congress that would hike fuel economy mandates to an industry average of 35 mpg. Zetsche said that Daimler supports the legislation.
He said Mercedes-Benz is working to cut the weight of all its models by 5 percent and will eventually produce hybrid versions of all models. "We are part of the problem," Zetsche said, noting that passenger cars account globally for 12 percent of man-made greenhouse gas emissions.
Auto Production Cuts Likelier Than Incentives
Detroit Free Press
By Tim Higgins and Jewel Gopwani Dec. 5, 2007
If the United States slips into a recession next year, it could unfold very differently in Detroit than it did in 2001.
That time, automakers offered generous incentives to buyers in the wake of 9/11, rather than let demand fall and plants go idle. GM kicked off the no-interest loan craze with its Keep America Rolling campaign.
Incentives won't go away, but this time it appears that automakers are more likely to accept fewer sales at higher prices. Automakers are already choosing to cut production to meet reduced demand.
To be clear: No Detroit automaker is talking recession publicly, but on Monday, GM and Ford both announced lower production plans for the first quarter of 2008 – the lowest since at least the recession of 1991.
Analysts such as Brian Johnson of Lehman Brothers say the automakers appear to be going to a more traditional game plan to deal with the possibility of tough times.
"We believe that participants in the automotive economic cycle are likely to go back to the older recession playbook," Johnson said in a note to investors. Automakers "may not step up with incentives in 2008 and let demand and production fall – while ideally using the opportunity to further reduce structural costs."
With production on the downswing, Johnson cut his ratings of the stock of three top suppliers – American Axle, Johnson Controls and Tenneco – from "buy" to "hold" on Monday, and their share prices fell significantly.
As a new economic downturn appears to be on the horizon, the Detroit automakers are also dealing with the aftermaths of how they addressed the previous one.
In 2001, the average spent on incentives for a Detroit brand car or truck was $1,873 per vehicle, according to Autodata. So far this year, the average incentive spending is $3,482 per vehicle.
Incentives just can't go any higher, many feel.
"Incentives from domestic automakers, particularly in the truck category, are coming off a substantially higher base today than they were into the last economic downturn," analyst Peter Nesvold of Bear Stearns said in a note to investors.
"Not only does this leave less headroom to further raise incentives," he added, "the domestics have promised to scale back such incentives due to the detrimental impact they appear to have had on residual values and brand perception."
In addition, Nesvold said: "The historic restructurings that Ford, GM and Chrysler have been pursuing in the last two years arguably may mean that the automakers will now feel less urgency to bail out auto sales as they did in 2002-2004."
Promotions such as GM's Keep America Rolling zero-percent financing program after the 9/11 terrorist attacks not only encouraged people to buy vehicles, it helped stabilize production for suppliers.
That strategy made sense then, Lehman Brothers' Johnson said, quoting GM Chief Financial Officer Fritz Henderson, because the automaker used the incentives to boost sales of large SUVs, which offer higher profit margins than the cars and crossovers that are currently in high demand.
"In prior recessions, automakers generally chose to maintain price discipline and let auto sales settle to underlying demand – making the recovery phase more profitable in terms of both volume and pricing," Johnson said in a note.
But that scenario will result in lower sales and lower production. Johnson lowered his 2008 U.S. sales forecast from 16.2 million to 15.5 million vehicles.
He also reduced his 2008 North American production estimates by 550,000 vehicles to 14.3 million, which he said is a bearish forecast.
Johnson said he expects the economic headwinds to persist. "Home prices are due to fall through 2008. We think that's providing a fairly substantial headwind through 2008," Johnson said in an interview. "We're less confident than some might be of a second-half 2008 rebound."
Ford has announced plans to make 685,000 vehicles in North America during the first three months of next year – the company's lowest first-quarter output in North America since 1991, when Ford made 615,000.
George Pipas, Ford's sales analysis manager, says the automaker is not planning for a recession.
It is expecting slow growth in the overall U.S. economy and declining U.S. sales over the next 6 to 9 months.
The company is trying to determine the "real consumer demand and plan production accordingly."
Ford's 7 percent production cut reflects its expectation that U.S. sales will decline by about 7 percent in the first quarter of next year.
GM, too, has announced plans to reduce its North American production, saying it will build 950,000 vehicles next quarter.
The company has quarterly production records back to 1988, and in only one first quarter was North American production below 1 million: 1991, when GM made 989,000 cars and trucks, according to spokeswoman Pam Reese.
Coincidentally, that was the same number produced in the third quarter of 1998, when GM lost weeks of production to a UAW strike that idled plants throughout the continent.
As part of GM's first-quarter production cuts, the automaker plans to idle truck plants in Pontiac ; Oshawa , Ontario , and Ft. Wayne , Ind. , during the first two weeks of next year.
GM aims to avoid overproducing the Chevrolet Silverado and GMC Sierra and the need to raise incentives that ultimately cut into profits, said spokesman Tom Wickham.
"If a segment such as the full-size truck segment is shrinking, it doesn't make sense to overproduce because at some point you will be forced to ... heavily discount," he said.
Chrysler, a newly private company, doesn't release its production plans, but spokesman Jason Vines said the company can react quickly to what is expected to be a "very tough" year.
"We'll be adjusting our schedules on a weekly basis, not three months in advance. The flexibility of our plants allows us to do that on a daily and weekly basis," Vines said
Tom Libby, senior director of industry analysis at the Power Information Network, a subsidiary of J.D. Power and Associates, called Detroit automakers' plans to reduce production wise.
"The only way they are going to get out of their problem with residuals is to basically take the heat in the short-term by cutting production and that's going to result in lower sales and some negative publicity in the short-term, but you've got to do it ... to get the residuals up," Libby said.
But he cautions, "I don't think they are going to do away with incentives... It will just be different types of incentives by different manufacturers depending upon their difference situations," Libby said.
"I don't think we'll see them building and building the way we have in the last few years."
Ôt will also be released from various claims against Delphi.
In return, it has agreed to provide labor subsidies, future-order commitments and “other consideration”.
Delphi emphasized that the settlement with GM “provides significant consideration to Delphi , which allows [it] to provide distributions to other stakeholders that would be impossible to deliver without the settlement”.
A group of banks, led by JPMorgan, has been trying to put together an exit package for Delphi . But turmoil in credit markets has complicated this effort, forcing the parts maker to rejig the restructuring plan several times since it was first filed three months ago.
Delphi said on Tuesday that it still aimed to emerge from court protection in the first quarter of 2008. It had planned to complete the restructuring, one of the biggest and most complex by any U.S. industrial company, by mid-2007.
Delphi has shed several businesses and sharply reduced its North American workforce. Over 24,000 employees have retired, accepted buy-outs or returned to GM. All but eight of its 33 U.S. plants are being closed or sold.
One Existing Model + A Few New Touches = $pecial Edition
USA Today
By Chris Woodyard Dec. 5, 2007
LOS ANGELES – Never mind that the current version of the Ford Mustang is pushing three years on sales floors. There's a new pony car in town.
Well, not exactly new. The Bullitt Mustang starts with the same old vehicle, then infuses it with a hopped-up engine, tighter suspension, a black or dark green paint job and a heavy dose of attitude.
The model, which pays homage to the 1968 action flick Bullitt starring the late Steve McQueen, held a prominent place in Ford's display at the Los Angeles Auto Show last month.
Bullitt, a new version of an aging car, sheds insight into how the auto industry juices sales with one of its oldest stunts – the special edition.
When a model hits three or four years without a major revamp or if sales dip or when executives just feel like it, along comes a special edition. Often, it's little more than a few new parts, some new paint, decals and a fresh press release.
"It's a relatively low-cost proposition to breathe new life into a vehicle that's been around for a number of years," says Michael Robinet, vice president of auto consultants CSM Worldwide. Automakers can often command a healthy price premium for their relatively meager effort, or at least prop up skidding sales.
Some became such hits that a particular special edition can stick around for years. Or an automaker might crank out a steady stream of short bursts around a model: There are at least seven for the current-generation Mustang.
But the strategy has its risks. Some brands throw on so many special editions that they're no longer special, a risk that Ford could be running with Mustang. Or the variants become too wild or ridiculous, alienating hard-core enthusiasts.
Automotive history is littered with relics such as the Frank Sinatra edition of the 1982 Chrysler Imperial luxury car; the Adolfo Gucci edition of the 1973 AMC Hornet Sportabout wagon; or the Levi's Jeep of the 1970s, its seats covered in tight-fitting blue denim.
The gold – or in this case, pink – standard for bad judgment in special editions remains the 1955 Dodge La Femme, touted in ads as "the first and only car designed for Your Majesty, the modern American woman." Either blatantly sexist or strangely liberating, depending on how you look at it, La Femme came with its own rose-hued shoulder bag and umbrella to match the seats.
La Femme, a special edition of a Dodge Custom Royal Lancer, lasted only two years because 1950s husbands wouldn't be caught dead in it, thus limiting its appeal. "That was a car only a woman would drive," says Leslie Kendall, curator of the Petersen Automotive Museum here.
Special editions succeed when consumers perceive extra value and performance, not just extra decals and fancy paint, Kendall says. "Properly packaged and promoted, they can capture interest."
Ford's Harley-Davidson edition F-150 pickup was introduced in 2001 and shows no sign of going away.
Likewise, Ford's tan and forest-green Eddie Bauer version of the Explorer SUV became a potent status symbol for kid-toting yuppies in the 1990s. The Bauer label stuck and has spread over the years to the bigger Expedition and new Taurus X crossover model, as well.
Looks and image aren't enough. Features count. "Eddie Bauer worked because it had content," says Ian Beavis, marketing chief for South Korean brand Kia. "It absolutely fit like a glove."
Automakers have taken other distinct tactics with special editions:
Whether new versions of famous old muscle cars or decked-out highway barges, automakers are always trying to cash in on big-name versions of yesteryear.
Chrysler, for instance, is offering a "Super Bee" version of its Dodge Charger SRT8, just as it did in 1968. Like the original,
Big 3 Get It Right with New Vehicles
The Detroit News
By John McCormick (Commentary) Dec. 5, 2007
With economic pundits declaring that Michigan is in the grip of a single-state recession, you could be excused for feeling glum.
But as we come to the end of the year, Detroit 's Big Three automakers are giving us reason to cheer going into 2008.
The reason is simple. The cars and trucks introduced in the last year and those about to enter showrooms are the best we've seen in a long time. Though Motown's Big Three have given us a few false starts in recent years – remember Ford's ill-founded "Year of the Car" proclamation back in 2004 – this time around the companies' product line-ups contain some real gems.
The right stuff is to be found not just in a fresh breed of smaller trucks and crossovers, but also in the new cars, a side of the business Detroit had all but ceded to the Asian brands a few years ago.
In terms of trucks or crossovers, I would highlight the following models among the Big Three's current or forthcoming contenders: the Ford Edge, Lincoln MKX, Saturn Vue, Saturn Outlook, GMC Acadia and Buick Enclave. All of these are excellent vehicles, fully the measure of their rivals.
Two special mentions should go to Chrysler's new minivan, which raises the bar in a still-important market sector, and the four-door Jeep Wrangler, which with good reason has been a runway success for that brand.
And for those who want larger trucks with notably better fuel economy than previously offered, advanced hybrid full-size trucks – a segment the Japanese automakers have yet to tackle – are also on the way from General Motors (Cadillac Escalade, Chevrolet Tahoe and Silverado, plus GMC siblings) and Chrysler (Aspen and Dodge Durango) in 2008
.
How frugal can these trucks be? GM says that the hybrid Silverado returns up to 21 miles per gallon, on par with a Toyota Camry sedan.
For car fans, there are several new models that promise to put Detroit back on the map. Cadillac's outstanding new CTS sedan is already in showrooms and justifiably winning widespread acclaim. Even more important from a production volume point of view for GM is the new Chevrolet Malibu, which shares mechanicals with the well-received Saturn Aura but comes with its own distinctive look. The Malibu's driving qualities, fit and finish, equipment levels and pricing make it Detroit's first truly competitive and serious contender in the midsize sedan market since the original Ford Taurus (although Ford's current Fusion sedan has much to recommend it).
The Motown product wave continues through 2008 calendar year with a host of other potentially promising newcomers, such as the Ford Flex and F-series, the Pontiac G8 and Vibe, Saturn's Astra, the Chevrolet Traverse and Corvette ZR1, the Dodge Ram, Journey and Charger. And the list goes on.
So assuming you still have a job, and your house is not being repossessed, there are still reasons to believe in the future of Michigan . After years of floundering, Detroit 's automakers are finally scoring some real hits and that can only be good news for the state's economy.
In Cars, White's the New Silver,
The Detroit News
By Eric Morath Dec. 5, 2007
Car buyers everywhere are waving the white flag.
White/white pearl ended silver's streak of seven years as the world's most popular color for automobiles, according to the DuPont 2007 Global Automotive Color Popularity Report, released Tuesday.
In North America , as well, white is the most popular color, holding 19 percent of the vehicle market. Silver cars make up 18 percent of the market, and black/black effect (a metallic, sparkly finish) 16 percent.
Last year, white and silver were tied for most popular in North America .
Silver's seven-year hold on the top spot was the longest consecutive streak in the 55-year history of the survey.
The preference for white indicates that consumers are poised to shift in a new direction when it comes to vehicle color, said Karen Surcina, DuPont color marketing and technology manager.
"White is a trend-shifting color," she said. "Things are up for grabs customers are looking to personalize their vehicle with different shades and specialty finishes."
That personalization trend is demonstrated in the popularity of white pearl (an iridescent hue that reflects many colors) and black effect.
DuPont, a top supplier of automotive coatings, said other styles gaining interest are niche colors and effects, including matte finishes.
Red is also growing in popularity – increasing its share 2 percentage points in North America and surpassing gray and blue to become the fourth most popular color in the market. Red's popularity shows that North Americans are becoming more accepting of color, Surcina said.
"Bright and bold offers of colors are important," she said. "Automakers are using those to gain attention for newly introduced vehicles, a sort of 'notice me' factor."
For example, Chrysler's Charger Daytona model, which was re-introduced recently, was offered in Top Banana yellow and Go ManGo orange, then in subsequent years Sub-lime green and Plumb Crazy purple.
But tradition still rules. North American tastes fall in line with those in Japan , where buyers also prefer white cars, but differed from Brazil , China and South Korea , where silver still leads; and Europe , which favors black.
In North America , white is the most popular color for trucks and SUVs, and ties with black in the luxury vehicle segment. Silver remained the leader in the intermediate/crossover and the compact/sport segments, but declined in popularity compared to the 2006 report.
The DuPont report findings reflect the growing popularity of white globally – in home furnishings, fashion, consumer products and industrial design, said Leatrice Eiseman, executive director of the New Jersey-based Pantone Color Institute, which works with graphic artists, fashion and home designer, among others.
"White also is considered a fashion statement," she said. "The car you drive is a fashion statement."
China's Auto-Parts Makers See Gains
The Wall Street Journal
By Gordon Fairclough Dec. 5, 2007
SHANGHAI- The engines of global outsourcing, mergers and acquisitions are likely to power a further increase in the shares of China 's biggest publicly traded makers of auto parts, analysts say.
"Outsourcing is accelerating," says Charles Cheung, an analyst at Citigroup in Hong Kong . U.S. and European automakers are hunting for lower-cost production, he says, while Chinese companies are "looking for overseas acquisition targets." The trend is starting to fuel some listed parts makers, such as Minth Group and Fuyao Group Glass Industries.
In a sign of the growing demand for Chinese-made components, a senior General Motors purchasing executive said during a visit to Beijing last week that the giant car maker would sharply increase the volume of parts it buys from Fuyao and other Chinese suppliers.
Bo Andersson, vice president for global purchasing, said he expects GM's parts purchases in China to rise by an average of 25 percent annually until 2010. On average, GM now ships about 20 million components a month from China to plants in other countries, he said.
GM isn't alone. Ford Motor has opened a research-and-development center in Nanjing that is focused, initially, on helping expand the company's use of parts from lower-cost Chinese suppliers and working with local firms to improve quality and reliability. Other global automakers from the U.S. , Europe and elsewhere in Asia are also stepping up purchases of Chinese-made components.
As Chinese component manufacturers grow in size and ambition, they are seeking acquisitions to speed expansion and give them access to better technology. Companies such as Wanxiang Group have acquired U.S. companies, and others say they are looking to do the same.
Of course, there are risks. The prices of steel, petroleum products and other raw materials have risen sharply, putting pressure on parts makers' profit margins. The strengthening of the yuan, which makes Chinese products more expensive in U.S. dollars, is another possible difficulty.
The flip side of the stronger yuan is that it could bolster the ability of Chinese companies to purchase overseas assets, especially in the troubled U.S. auto-parts industry. Still, any potential bids would face competition from the private-equity and vulture investors now circling wounded U.S. companies.
Citigroup's Mr. Cheung and other analysts say the better component manufacturers will thrive despite unfavorable shifts in exchange rates and input prices. Mr. Cheung says a weaker U.S. economy also could benefit Chinese parts suppliers, as American automakers will be under greater pressure to find lower-cost producers than those at home.
" China has an advantage in these labor-intensive businesses like auto parts," says Han Yinhua, an analyst at Industrial Securities in Shanghai . "We could see many suppliers with overseas orders benefit."
One of the companies most likely to gain from the rising tide of sourcing is Fuyao Glass. Based in the southern city of Fuzhou , the company lists yuan-denominated A shares, primarily for domestic investors, on the Shanghai Stock Exchange. The company is a supplier for GM, Ford and Volkswagen's Audi brand.
GM's Mr. Andersson singled out Fuyao to reporters as a company that could see more business from the U.S. automaker. He said the company has the potential to become one of GM's five biggest glass suppliers within five years.
"Fuyao will absolutely benefit more" from rising sales to international car makers, predicts Zhu Xuedong, another Industrial Securities auto analyst.
Yesterday, shares of Fuyao closed at 27.99 yuan ($3.78) each, or 90 percent above their level at the start of 2007. For the same period, the Shanghai Composite Index is up 84 percent.
One of Mr. Cheung's favorites is Minth, which is listed in Hong Kong . It makes interior fittings and structural components for GM, Ford, Toyota Motor, Volkswagen and Hyundai Motor among others.
In late August, Mr. Cheung reiterated his "buy" recommendation on Minth after seeing the company's profit margins widen in the first half of the year. Minth's sales are primarily domestic – it supplies the China operations of international manufacturers – but it also exports. In the first half of the year, 16 percent of sales went abroad, according to Citigroup.
Mr. Cheung says increased outsourcing will help drive Minth's growth in coming years.
Shares of Minth slipped eight Hong Kong cents yesterday to HK$11.68 (US$1.50), though they are up 83 percent this year. Their peak close was HK$13.50 on July 5.
House May Get Fuel Bill Today
Detroit Free Press
By Justin Hyde Dec. 5, 2007
WASHINGTON – House Speaker Nancy Pelosi prepared Tuesday to bring a massive energy bill, with several provisions that the White House has warned could draw a veto from President George W. Bush, to the House floor as early as today.
Pelosi's office said Tuesday that the bill would include $21 billion in repeals of tax breaks for oil and gas companies, as well as standards requiring public power utilities to generate 15 percent of their energy from renewable sources by 2020. Republicans and several business groups oppose both clauses and could block the bill in the Senate. Democrats are expected to pass the bill in the House, thanks to the deal on fuel economy standards setting a new target of 35 m.p.g. by 2020.
But Democratic aides say that if the bills pass, Bush would face a political firestorm for vetoing energy legislation while Americans wrestle with sharply higher prices for gasoline and heat, and as oil prices flutter near $100 a barrel.
The bill "repeals tax breaks for profit-rich oil companies, and invests that money in clean renewable energy and new American technologies," Pelosi's office said in a news release. "Not only would this reduce our dependence on foreign oil, the measure would also save consumers billions of dollars."
Aides were still busy Tuesday afternoon negotiating final details of what would likely be more than 1,000 pages of legislation in the energy bill. Pelosi and House Democrats were scheduled to walk through the bill Tuesday night.
Bush's chief economic adviser warned Monday that Democrats "may intend to produce a bill the president cannot sign." The White House had said it would oppose any increase in taxes as well as the standards for renewable energy.
The $21 billion includes about $13 billion from eliminating a tax rate decrease on oil and gas producers from 2004 and 2005, as well as higher royalty payments from offshore drilling. The remainder of the money would come from a variety of sources.
The American Petroleum Institute, the trade group for the oil industry, said the increase would be "counterproductive in that it takes capital away from expanding domestic oil and natural gas production and refining capacity."
New Touches = $pecial Edition
USA Today
By Chris Woodyard Dec. 5, 2007
LOS ANGELES – Never mind that the current version of the Ford Mustang is pushing three years on sales floors. There's a new pony car in town.
Well, not exactly new. The Bullitt Mustang starts with the same old vehicle, then infuses it with a hopped-up engine, tighter suspension, a black or dark green paint job and a heavy dose of attitude.
The model, which pays homage to the 1968 action flick Bullitt starring the late Steve McQueen, held a prominent place in Ford's display at the Los Angeles Auto Show last month.
Bullitt, a new version of an aging car, sheds insight into how the auto industry juices sales with one of its oldest stunts – the special edition.
When a model hits three or four years without a major revamp or if sales dip or when executives just feel like it, along comes a special edition. Often, it's little more than a few new parts, some new paint, decals and a fresh press release.
"It's a relatively low-cost proposition to breathe new life into a vehicle that's been around for a number of years," says Michael Robinet, vice president of auto consultants CSM Worldwide. Automakers can often command a healthy price premium for their relatively meager effort, or at least prop up skidding sales.
Some became such hits that a particular special edition can stick around for years. Or an automaker might crank out a steady stream of short bursts around a model: There are at least seven for the current-generation Mustang.
But the strategy has its risks. Some brands throw on so many special editions that they're no longer special, a risk that Ford could be running with Mustang. Or the variants become too wild or ridiculous, alienating hard-core enthusiasts.
Automotive history is littered with relics such as the Frank Sinatra edition of the 1982 Chrysler Imperial luxury car; the Adolfo Gucci edition of the 1973 AMC Hornet Sportabout wagon; or the Levi's Jeep of the 1970s, its seats covered in tight-fitting blue denim.
The gold – or in this case, pink – standard for bad judgment in special editions remains the 1955 Dodge La Femme, touted in ads as "the first and only car designed for Your Majesty, the modern American woman." Either blatantly sexist or strangely liberating, depending on how you look at it, La Femme came with its own rose-hued shoulder bag and umbrella to match the seats.
La Femme, a special edition of a Dodge Custom Royal Lancer, lasted only two years because 1950s husbands wouldn't be caught dead in it, thus limiting its appeal. "That was a car only a woman would drive," says Leslie Kendall, curator of the Petersen Automotive Museum here.
Special editions succeed when consumers perceive extra value and performance, not just extra decals and fancy paint, Kendall says. "Properly packaged and promoted, they can capture interest."
Ford's Harley-Davidson edition F-150 pickup was introduced in 2001 and shows no sign of going away.
Likewise, Ford's tan and forest-green Eddie Bauer version of the Explorer SUV became a potent status symbol for kid-toting yuppies in the 1990s. The Bauer label stuck and has spread over the years to the bigger Expedition and new Taurus X crossover model, as well.
Looks and image aren't enough. Features count. "Eddie Bauer worked because it had content," says Ian Beavis, marketing chief for South Korean brand Kia. "It absolutely fit like a glove."
Automakers have taken other distinct tactics with special editions:
Whether new versions of famous old muscle cars or decked-out highway barges, automakers are always trying to cash in on big-name versions of yesteryear.
Chrysler, for instance, is offering a "Super Bee" version of its Dodge Charger SRT8, just as it did in 1968. Like the original, it c¿.\fs28
Adrian Lund, president of the Insurance Institute for Highway Safety, who test drove the Smart car Tuesday, said his group was looking forward to putting the car through its crash tests. Daimler expects the car to receive four star-crash ratings.
Several members of Congress and regulators also drove the car Tuesday.
Daimler is preparing for the first Smart sales here as a bill is moving through Congress that would hike fuel economy mandates to an industry average of 35 mpg. Zetsche said that Daimler supports the legislation.
He said Mercedes-Benz is working to cut the weight of all its models by 5 percent and will eventually produce hybrid versions of all models. "We are part of the problem," Zetsche said, noting that passenger cars account globally for 12 percent of man-made greenhouse gas emissions.
\line Auto Production Cuts Likelier Than Incentives
Detroit Free Press\b0
By Tim Higgins and Jewel Gopwani Dec. 5, 2007
If the United States slips into a recession next year, it could unfold very differently in Detroit than it did in 2001.
That time, automakers offered generous incentives to buyers in the wake of 9/11, rather than let demand fall and plants go idle. GM kicked off the no-interest loan craze with its Keep America Rolling campaign.
Incentives won't go away, but this time it appears that automakers are more likely to accept fewer sales at higher prices. Automakers are already choosing to cut production to meet reduced demand.
To be clear: No Detroit automaker is talking recession publicly, but on Monday, GM and Ford both announced lower production plans for ..ng production and that's going to result in lower sales and some negative publicity in the short-term, but you've got to do it ... to get the residuals up," Libby said.
But he cautions, "I don't think they are going to do away with incentives... It will just be different types of incentives by different manufacturers depending upon their difference situations," Libby said.
"I don't think we'll see them building and building the way we have in the last few years."
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re coming off a substantially higher base today than they were into the last economic downturn," analyst Peter Nesvold of Bear Stearns said in a note to investors.
"Not only does this leave less headroom to further raise incentives," he added, "the domestics have promised to scale back such incentives due to the detrimental impact they appear to have had on residual values and brand perception."
In addition, Nesvold said: "The historic restructurings that Ford, GM and Chrysler have been pursuing in the last two years arguably may mean that the automakers will now feel less urgency to bail out auto sales as they did in 2002-2004."
Promotions such as GM's Keep America Rolling zero-percent financing program after the 9/11 terrorist attacks not only encouraged people to buy vehicles, it helped stabilize production for suppliers.
That strategy made sense then, Lehman Brothers' Johnson said, quoting GM Chief Financial Officer Fritz Henderson, because the automaker used the incentives to boost sales of large SUVs, which offer higher profit margins than the cars and crossovers that are currently in high demand.
"In prior recessions, automakers generally chose to maintain price discipline and let auto sales settle to underlying demand '96 making the recovery phase more profitable in terms of both volume and pricing," Johnson said in a note.
But that scenario will result in lower sales and lower production. Johnson lowered his 2008 U.S. sales forecast from 16.2 million to 15.5 million vehicles.
He also reduced his 2008 North American production estimates by 550,000 vehicles to 14.3 million, which he said is a bearish forecast.
Johnson said he expects the economic headwinds to persist. "Home prices are due to fall through 2008. We think that's providing a fairly substantial headwind through 2008," Johnson said in an interview. "We're less confident than some might be of a second-half 2008 rebound."
Ford has announced plans to make 685,000 vehicles in North America during the first three months of next year '96 the company's lowest first-quarter output in North America since 1991, when Ford made 615,000.
George Pipas, Ford's sales analysis manager, says the automaker is not planning for a recession.
It is expecting slow growth in the overall U.S. economy and declining U.S. sales over the next 6 to 9 months.
The company is trying to determine the "real consumer demand and plan production accordingly."
Ford's 7 percent production cut reflects its expectation that U.S. sales will decline by about 7 percent in the first quarter of next year.
GM, too, has announced plans to reduce its North American production, saying it will build 950,000 vehicles next quarter.
The company has quarterly production records back to 1988, and in only one first quarter was North American production below 1 million: 1991, when GM made 989,000 cars and trucks, according to spokeswoman Pam Reese.
Coincidentally, that was the same number produced in the third quarter of 1998, when GM lost weeks of production to a UAW strike that idled plants throughout the continent.
As part of GM's first-quarter production cuts, the automaker plans to idle truck plants in Pontiac ; Oshawa , Ontario , and Ft. Wayne , Ind. , during the first two weeks of next year.
GM aims to avoid overproducing the Chevrolet Silverado and GMC Sierra and the need to raise incentives that ultimately cut into profits, said spokesman Tom Wickham.
"If a segment such as the full-size truck segment is shrinking, it doesn't make sense to overproduce because at some point you will be forced to ... heavily discount," he said.
Chrysler, a newly private company, doesn't release its production plans, but spokesman Jason Vines said the company can react quickly to what is expected to be a "very tough" year.
"We'll be adjusting our schedules on a weekly basis, not three months in advance. The flexibility of our plants allows us to do that on a daily and weekly basis," Vines said
Tom Libby, senior director of industry analysis at the Power Information Network, a subsidiary of J.D. Power and Associates, called Detroit automakers' plans to reduce production wise.
"The only way they are going to get out of their problem with residuals is to basically take the heat in the short-term by cutting production and that's going to result in lower sales and some negative publicity in the short-term, but you've got to do it ... to get the residuals up," Libby said.
But he cautions, "I don't think they are going to do away with incentives... It will just be different types of incentives by different manufacturers depending upon their difference situations," Libby said.
"I don't think we'll see them building and building the way we have in the last few years."
oned how much sales would grow in the next few years, as other small cars enter the market '96 including a potential Chinese-made small car.
"It's not going to be a financial disaster, but the exchange rate is an issue," Healy said.
Zetsche acknowledged that the expensive euro makes it harder to make a profit on the Smart, which is built in France , but he said the company would make money on the car in the States.
Since the Smart brand debuted in Europe in 1998, the company has sold about 850,000 vehicles. In Canada , the company sold more than 10,000 in the first 2 1/2 years; it expected to sell only 3,000.
Zetsche joked that at just 8-feet-10 inches, the Smart is only a foot longer than NBA basketball star Yao Ming is tall.
"When you just want to go from to A to B with a lot of fun and don't want to carry three persons, Smart gives you everything you can ask for," Zetsche said.
Zetsche said the only car he personally owns in Europe is a Smart that he uses to go shopping and downtown.
Daimler also announced Tuesday it is seeking to work with an American city to locate 100 plug-in electric Smart vehicles, similar to a test it is doing in London and is considering in France . British officials have waived the $17 congestion surcharge for drivers of the plug-in vehicles and have given them parking and access to recharging stations.
Adrian Lund, president of the Insurance Institute for Highway Safety, who test drove the Smart car Tuesday, said his group was looking forward to putting the car through its crash tests. Daimler expects the car to receive four star-crash ratings.
Several members of Congress and regulators also drove the car Tuesday.
Daimler is preparing for the first Smart sales here as a bill is moving through Congress that would hike fuel economy mandates to an industry average of 35 mpg. Zetsche said that Daimler supports the legislation.
He said Mercedes-Benz is working to cut the weight of all its models by 5 percent and will eventually produce hybrid versions of all models. "We are part of the problem," Zetsche said, noting that passenger cars account globally for 12 percent of man-made greenhouse gas emissions.
\line Auto Production Cuts Likelier Than Incentives
Detroit Free Press\b0
By Tim Higgins and Jewel Gopwani Dec. 5, 2007
If the United States slips into a recession next year, it could unfold very differently in Detroit than it did in 2001.
That time, automakers offered generous incentives to buyers in the wake of 9/11, rather than let demand fall and plants go idle. GM kicked off the no-interest loan craze with its Keep America Rolling campaign.
Incentives won't go away, but this time it appears that automakers are more likely to accept fewer sales at higher prices. Automakers are already choosing to cut production to meet reduced demand.
To be clear: No Detroit automaker is talking recession publicly, but on Monday, GM and Ford both announced lower production plans for the first quarter of 2008 '96 the lowest since at least the recession of 1991.
Analysts such as Brian Johnson of Lehman Brothers say the automakers appear to be going to a more traditional game plan to deal with the possibility of tough times.
"We believe that participants in the automotive economic cycle are likely to go back to the older recession playbook," Johnson said in a note to investors. Automakers "may not step up with incentives in 2008 and let demand and production fall '96 while ideally using the opportunity to further reduce structural costs."
With production on the downswing, Johnson cut his ratings of the stock of three top suppliers '96 American Axle, Johnson Controls and Tenneco '96 from "buy" to "hold" on Monday, and their share prices fell significantly.
As a new economic downturn appears to be on the horizon, the Detroit automakers are also dealing with the aftermaths of how they addressed the previous one.
In 2001, the average spent on incentives for a Detroit brand car or truck was $1,873 per vehicle, according to Autodata. So far this year, the average incentive spending is $3,482 per vehicle.
Incentives just can't go any higher, many feel.
