+++ FIAT will not buy a stake in Mazda and will move forward soon with plans to up its stake in U.S. automaker Chrysler to over 60 percent. "We have no plan to buy a stake in Mazda", Fiat Chairman John Elkann said on the sidelines of the annual shareholder meeting of Exor, the Agnelli family's investment company through which it controls Fiat and Chrysler. Alliances allow carmakers to share the costs of developing new vehicles and keep pricing competitive as well as helping them gain a foothold in new regions, although they can be fraught with difficulties. Mazda and Fiat announced last week they would join forces to make new versions of their most famous sports cars, the MX-5 and the Alfa Romeo Spider. The move sparked speculation the partnership could be expanded over time, although both played down the possibility of an equity alliance. Fiat, which owns 58.5 percent in Chrysler, and plans to buy a further 3 percent starting in July, is expected to complete its global turnaround by adding an Asian partner, despite a troubled history with former Chinese partners. Fiat eventually wants to increase its Chrysler stake to 100 percent, and Elkann on Tuesday declined to provide details about the timing of the move. Asked whether Exor was making contingency plans for a future exit of Greece from the euro zone, Elkann said that the holding company had not changed its strategy. Exor holds 30.4 percent of capital goods group Fiat Industrial, 15 percent of certification company SGS , 30.5 percent of carmaker Fiat (which controls Chrysler) and 69.5 percent of Cushman & Wakefield, a real estate company. "We are continuing with our strategy of simplifying our investment portfolio and extending our geographical reach", Elkann told journalists after Exor's annual shareholder meeting, adding he had not taken any special measures in the light of the eurozone crisis. The company said on May 4 it had appointed Shahriar Tadjbakhsh as chief operating officer to take charge of its efforts to streamline its investment portfolio and concentrate on companies with a global reach. +++ GENERAL MOTORS said that by next year, it will double the size of its global design studio in Incheon, Korea. The Detroit-based automaker said the expansion includes new modeling studios, display and creative work areas. The company expects the new space will benefit more than 200 employees who work on GM global vehicle programs and advanced designs, which in the past has included work on the Chevrolet Spark, Aveo and Cruze production vehicles and the Miray concept vehicle. General Motors has invested an average of more than $850 million annually in Korea in the past 10 years and plans to invest an additional $1.27 billion in vehicle engineering facilities this year. +++ Just months after finalising its joint venture with Chinese auto major Chery Automobile, Tata Motors-owned JAGUAR LAND ROVER (JLR) has begun a feasibility study to manufacture its vehicles in India. JLR is considering setting up a plant either in Pune (Maharashtra) or Sanand (Gujarat) to produce the next generation Defender. The factory is also likely to house an engine plant. This site will be a separate facility from the existing assembly plant that JLR has at Chikhale near Pune, where it currently assembles Freelander SUV. It is same premises that were earlier used by Mercedes Benz. The outcome of the feasibility study is expected by the second half of 2012. People close to the company say, the study is "at a very initial stage". However, if the result is positive, the plant is likely to come up by the middle of 2015. Three people close to the development told the plant is likely to have a capacity of 30,000 to 40,000 units per annum. "JLR is very keen to set up a base. Different teams of the project L660 (the next generation Defender) have visited India several times. They are keen to use this as an export hub with almost 60-80 per cent (of the output) to be shipped to overseas market", said one of the people. The next generation Defender is likely to be powered by I4D (inline turbocharged 4 cylinders) 2-litre diesel engine codenamed AJ200 that is likely to deliver 170-250 of horse power. This engine is also likely to be manufactured at the proposed engine plant, which JLR has announced in the past. Another person close to the development said the thought process within the company is to have an engine plant that will have a capacity to manufacture 50,000 units per annum, with a bulk of the vehicles manufactured in India being earmarked for exports. India, being home to its owners, could well be JLR's third manufacturing base after the UK and China. The company is also exploring South America (Brazil) for a base. VG Ramakrishnan, senior director, automotive practice, Frost & Sullivan, say it is not a surprise. It is a natural progression for JLR to move in that direction with its parent Tata Motors having a strong base in India. "Demand is growing in the emerging markets and it makes sense for even premium carmakers to look at India as a base. They can definitely leverage from Tata Motors' strength in the country, but the challenge will lie in getting the vendor base to the quality standards of the UK and international markets, for which it will have to invest money", said Ramakrishnan. JLR sales rose 29 per cent to 3,14,433 units in FY12 and with the battery of over 40 products in the next 5 years planned with an investment of 6-7 billion pounds, JLR is expected to maintain strong growth going ahead. JLR today constitutes over 70 per cent of the revenues of consolidated Tata Motors entity. China and India are expected to be the key pillars for growth going ahead. JLR recently committed over $540 million in a joint venture in China, with Cherry Automobiles, which today is one of its biggest and the fastest growing markets for the company. JLR sold 42,000 units in China in 2011 versus 1,500 to 2,000 in India. But unlike China, JLR sees India as an exports hub with the domestic premium and luxury car market standing at just 23,000 to 24,000 units in 2011. While the base will still remain small for the next five years in India, the country will start playing a much bigger role post 2015. Till that time, JLR will continue to build volumes from its existing facility at Chikhale and add more products for assembly. JLR is considering assembly of Jaguar XF and Range Rover Evoque in 2012-13 in India. JLR sold 2,289 cars during FY12 posting a growth of 157 per cent with plans of assembling more models in the country. JLR is aiming at a market share of 20 per cent in the next three-five years in India. It plans to have 100 dealers by 2015-16. India's luxury car market, which accounts for 0.5 per cent in the 2.5 million-unit car market, expanded 24,000 units in the year to December 2011 and is expected to expand to 33,000 units by the end of 2012. Assembled cars attract a lower import duty of 10-30 per cent versus over 100 per cent duty on imported cars. This will help the company to price its product more aggressively. +++ More problems for British sports car maker LOTUS as the company's chief executive office Dany Bahar was suspended from his role today pending an investigation of a complaint against him by DRB-HICOM Berhad, which acquired Lotus back in January. DRB-HICOM Berhad, which is owned by Malaysian billionaire Syed Mokhtar Al-Bukhary, issued this statement on the matter: "As a result of a number of media inquiries, Group Lotus can today confirm that, following an operational review, chief executive Dany Bahar has been temporarily suspended from his role to facilitate an investigation into a complaint about his conduct made by Lotus’ penultimate parent company, DRB-HICOM Berhad". A spokesperson for the Malaysian company told Norwich Evening News that despite the move, "it is business as usual at Lotus" and that DRB-HICOM Berhad "will continue to support Lotus in its business endeavours and development". Bahar joined Lotus in 2009 and oversaw the development and presentation of a dozen production-intent Lotus concepts at the 2010 Paris Motor Show, including the successors to the Esprit and Elan. +++ PSA (Peugeot, Citroen) has asked workers at its Sevelnord plant to agree to a pay freeze, hundreds of job cuts and other concessions or face possible closure, officials at two unions said. The company is opening talks on plans to reduce the threatened plant's 2,700-strong workforce, freeze salaries for at least three years, reduce leave and impose more flexible hours, CGT and CGC union representatives told Reuters. Peugeot declined to comment on plans for Sevelnord. Its ultimatum, if confirmed, echoes tactics successfully employed to wring concessions from workers at Fiat's Pomigliano factory near Naples and General Motors' Opel/Vauxhall plant in Ellesmere Port, England. "This amounts to industrial blackmail", said Ludovic Bouvier of the CGT, Peugeot's biggest union. "They want us to set an example that workers in the rest of the group's factories will eventually have to follow". Peugeot managers outlined their demands on May 25, ahead of formal negotiations to begin on Friday, said Bouvier and Pascal Lucas, his counterpart with the smaller CGC. Without the concessions, the next generation of Peugeot Expert and Citroen Jumpy delivery vans would be produced in Vigo, Spain, both officials said they were told by plant chief Patrick Labilloy. Besides the salary freeze, the plan would lead to "several hundred" job cuts, both union officials said. Some of the laid-off workers could eventually be re-hired to produce the new vehicles. It would also give managers more leeway to impose overtime or the use of vacation days at short notice, in step with production demands, they said. The Sevelnord plant in northern France, currently shared with Fiat, faces an uncertain future as the Italian automaker prepares to withdraw production of its Scudo van from the joint venture. Peugeot is in talks with Fiat to unwind the venture before its expiry in 2017 and has said it is seeking a new partner for the factory. Even with both of those steps completed, "we would still need to ensure that Sevelnord is competitive by comparison to alternative sites", company spokesman Pierre-Olivier Salmon said on Wednesday. +++ A group led by a Chinese energy company and a Japanese venture-capital firm has placed a bid for SAAB. The group wants to buy Saab and build cars, a spokesman said. The group has formed a company called National Electric Vehicle Sweden AB "with the only purpose of buying Saab's assets". +++ Chinese demand for its luxury Jaguar Land Rover (JLR) models propelled fourth-quarter net profit at TATA Motors, capping a bumper year for the Indian automaker. China's boost to JLR's bottom line comes as global automakers, hit by sluggish sales in established markets such as Europe, shift their focus towards developing economies to drive future growth. A one-off tax gain also contributed to Tata's 139 per cent quarterly profit leap, which came in spite of a lacklustre performance at its core domestic business. It also reported a rise in net profit to 135 billion rupees (2.5 billion dollar) for the year to March 31, from 92.7 billion rupees the previous year. JLR's growth in overseas markets (it sells imports in India and recently began assembling some Land Rover models there) has helped insulate Tata from a sluggish domestic car market which grew just 2.2 per cent in the last financial year. The British luxury brands, which Tata bought for 2.3 billion dollar in 2008, brought in more than 95 per cent of its profit in the quarter to March 31, as sales grew by 48 per cent. Tata is focusing on markets such as Russia and China, as its domestic arm struggles with high costs and sluggish sales growth. "We see very strong growth in China. The demand for our vehicles, especially the Range Rover and Range Rover Sport, is very high. If the dynamic continues, China will be our number two market this financial year", JLR chief executive officer (CEO) Ralf Speth said. Tata will invest 2 billion pounds in JLR this financial year, up from 1.5 billion pounds last year. In March it finalised a joint venture with China's Chery Automobile to make JLR vehicles in the world's largest car market. China accounted for 17.3 per cent of JLR sales in the year to end-March, its fourth-largest market. The United Kingdom (UK) - JLR's home market - brought in 19.7 per cent of sales while North America accounted for 18.5 per cent. Europe was its largest market at 22.8 per cent. Part of the software-to-hotels Tata Group, India's largest business by revenue, Tata Motors said net profit for the fourth quarter to end-March was 62.5 billion rupees, up from 26.2 billion rupees. The figure was boosted by 217 million pounds in deferred tax assets. Consolidated net profit, after accounting for minority interest and share of associates, was 62.3 billion rupees. Consolidated revenue rose 44 per cent to 509 billion rupees, from 353 billion rupees a year ago. India's biggest truck manufacturer and the maker of the Nano, dubbed the world's cheapest car, Tata sparked fears it had bitten off more than it could chew when it bought the loss-making JLR brands from Ford, given its minimal experience in international manufacturing and luxury products. Yet the acquisition has fast overshadowed its parent. Boosted by runaway demand for the Range Rover Evoque launched last year, JLR's revenue grew 51.5 per cent to 4.14 billion pounds in the quarter to March. +++ TOYOTA said it would roll out eight compact car models tailored for emerging markets by 2015 in an attempt to catch up to front-runners such as Volkswagen and General Motors. Toyota is looking to reduce its dependence on the mature North American, European and Japanese markets. The relative maturity of the North American, European and Japanese markets are forcing Toyota to look elsewhere for growth and in particular, emerging markets such as Brazil, China and India. For this reason, the Japanese automaker said on Friday it plans to introduce eight new compact size models designed specifically for developing markets by 2015. "In emerging markets, there are four or five automakers vying to take the lead in sales volumes", Toyota Executive Vice President Yukitoshi Funo told Reuters. "Particularly in the Southeast Asian region, Volkswagen and others are looking to challenge our lead so we can\'t be resting on our laurels", he added. Toyota said that the upcoming compact models will carry a base sticker of around 1 million yen (about US$12,500 / €10,000) or higher, with production to be localized in markets such as India, Brazil and China. Asked about rumors concerning the development of a lower cost model priced around 500,000 yen (roughly US$6300 / €5,000) for India, Funo told reporters that the company has no such plans. "We won't go to the 500,000 yen segment, it's not our category", he said. "We want to beef up our presence in segments where we can be competitive. There are many other options for customers looking in that price range, including used cars". At last month's Auto China 2012 in Beijing, Toyota showed three compact concept models that may preview some of the vehicles it is preparing for emerging markets. +++