01-06-2012 06:00
+++ New details are starting to emerge about the new AUDI A4 which will debut in 2014. In an interview with Auto Motor and Sport, Audi design chief Wolfgang Egger said the next-generation model will have muscular styling and improved aerodynamics. He also revealed the car will feature an upright "three-dimensional" grille as well as better defined wheel arches. Engine options remain unconfirmed, but choices could include a 122 hp 1.4 TFSI, a 180 hp) 1.8 TFSI and a 2.0 TDI with 150 hp. Additionally, we can expect a plug-in hybrid variant with an electric-only range of approximately 50 km. +++ There once was a time when BMW only produced a handful of its models in high-performance M guise. There was the M3, the M5, and that was pretty much it. Now, however, it offers M models based on the 1 Series, 3 Series, 5 Series, 6 Series, X5 and X6. And that's only expected to grow. The first on the docket, says BMW North America CEO (and former M chief) Ludwig Willisch, will be an M7. The Bavarian automaker has long resisted going down the same road as the Mercedes-Benz S63 AMG and Audi S8, but that's slated to change in the near future. But while the X5 M and X6 M have been hot sellers, Willisch rules out the possibility of M versions of the smaller X1 and X3. Of course, BMW could opt to apply a similar sub-M formula to the 7 Series like it's doing with the M135i. Either way, BMW is counting on the reduced cost and labor involved in manufacturing carbon fiber components for the viability of both its performance vehicles and its environmentally friendly i range. The engineers at McLaren needed some 3,000 hours of labor to produce the carbon fiber components for the McLaren F1 over a decade ago. By the time it started building the SLR for Mercedes-Benz, it had cut that down to 400 hours. And with the new MP4-12C, it takes them less than 6 hours. As a result, costs have come down too, resulting in a lower street price for each successive model: $1 million, $400,000 and $250,000, respectively. And that's a model on which other automakers (like BMW) can seek to capitalize. +++ JAPAN ’s auto sector on Thursday reported huge increases in production for April from a year earlier, reflecting a steep recovery after last year’s quake-tsunami disaster crippled output and demand. Production of cars, trucks and buses reached 799,474 vehicles, up 173.8% from April 2011 and the seventh consecutive monthly increase, according to the Japan Automobile Manufacturers Association (JAMA). The industry data come after heavyweights Toyota, Nissan, and Honda said Monday that they saw huge jumps in April output from a year ago when they slashed production and shuttered plants due to power shortages and a parts supply crunch owing to the March 2011 disaster. Domestic vehicle sales, meanwhile, climbed 93.7% to 359,631 vehicles while exports surged 219.2% to 402,389 vehicles, JAMA said. Japan’s auto sector suffered one of its worst months on record in April 2011, while flooding in Thailand later in the year added to the pain as Japanese manufacturers with plants in the country saw major supply disruption. Most automakers returned production to pre-quake levels by the end of 2011. The yen also hit record highs against the dollar last year and remains strong, denting exporters’ profits overseas. The latest production figures come after data showed Toyota, Japan’s biggest automaker, regained its position as the world’s number one automaker in the first quarter of 2012, stealing back the lead from U.S. giant General Motors. On Monday, Toyota said output at its factories in Japan surged about four-fold to 352,973 vehicles last month, while rival Honda Motor’s domestic output skyrocketed 514.4% to 87,049 vehicles. Nissan’s production jumped 94% to 85,734 at home, after the automaker earlier this month posted record sales and a profit of 341.43 billion yen in the fiscal year through March as it shrugged off the disaster. The company, part-owned by France’s Renault, said sales rose to their highest-ever 9.41 trillion yen with 4.85 million vehicles sold globally, despite the natural disasters and high yen. Nissan’s results bucked a nationwide trend of falling profits in the auto sector in the last fiscal year, with Toyota saying its full-year net profit was 283.56 billion yen, a 30.5% on-year fall. Honda’s earnings for the period were down 60% to 211.5 billion yen. +++ JEEP is one of the most famous brands in the world, and that recognition helps fuel sales and make the marque one of the shiniest gems in the Chrysler crown of brands. The world's most voracious car market, China, knows and loves Jeep vehicles well enough to fuel a sales boom that's got the company looking to add dealers and re-fire local production. Chinese buyers snap up Jeep branded merchandise wherever they can find it, but the actual Jeep dealer network in China is only 120 strong. Still, sales were up 63 percent last year, and Jeep CEO Mike Manley is sure that could rise even further with better availability. "Our brand awareness and consideration is running way ahead of where our actual volumes are", Manley said. Jeep was actually one of the first western automakers to make a foray into China when AMC set up Beijing Jeep in the 1980s. Since that time, Jeep has gone through ownership and cashflow tumult, stopping Chinese production in 2006. Now, Chrysler is looking for a partner to work with so that more Jeeps can be available to buyers that are starving for the vehicles they perceive so fondly. If production within China isn't re-started, Jeep may become just a memory. Right now, the Jeep models that are available in China are imported, and carry hefty price tags because of duties. Popularity of SUVs is high in China, and other manufacturers may not have the same image as Jeep, but with local production and lower prices, not to mention more dealers, availability may trump the Jeep mystique. +++ Fuji Heavy Industries Ltd. President Yasuyuki Yoshinaga said the maker of SUBARU cars is preparing to begin talks to renew its contract to build Camry sedans, the best-selling car in the U.S., for Toyota. While the company has orders to build the Camry until the model is overhauled in about 4 years, Fuji Heavy doesn't know whether Toyota will retain its services for the next generation of the midsize sedan, Yoshinaga said this week. Fuji Heavy, which uses about a third of its U.S. manufacturing capacity for the Camry, needs to know soon to determine its own expansion plans, he said. "My hope is that we can have a decision about the future direction within this year", Yoshinaga said. "We would like to maintain Camry production". Renewing the deal would extend Subaru's reliance on Toyota as the European crisis, slowing Chinese economy and the strength of the yen threaten earnings growth. For Fuji Heavy, dropping Camry manufacturing would give the company room to expand production of its more profitable Subaru Outback and Legacy models in the U.S. without having to build another factory. "They may want to focus on producing their own vehicles if they think of the short-term benefits", said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management. "But it's more important to lay a solid foundation for the business in the longer term". Toyota spokesman Joichi Tachikawa said he couldn't immediately comment on Fuji Heavy's future production of the Camry. Yoshinaga, 58, also said Fuji Heavy will propose developing more automobiles with Toyota to build on the success of their latest sports car (called the BRZ for Subaru and GT 86 for Toyota). The move would deepen a partnership that began in 2005 when Toyota bought 8.7 percent of Fuji Heavy. It raised the stake to 16 percent 3 years later. This year, they started selling a codeveloped sports car and Subaru plans to begin offering its first hybrid vehicle (based on Toyota technology) in 2013. Fuji Heavy has been devoting some of its capacity, 37 percent of its total in the U.S. last fiscal year, to make the Camry for Toyota since 2007. Still, Fuji Heavy is allocating some of its factory space to Toyota at the expense of its Subaru-brand cars. Because of the shortage of capacity in the U.S., Fuji Heavy is cranking up production in Japan, making itself more vulnerable to the yen. The Camry generates operating profit margins of about 2 percent to 3 percent for Fuji Heavy, while the Subaru Legacy and Outback yield margins exceeding 10 percent, according to estimates by Koichi Sugimoto, a Tokyo-based analyst at BNP Paribas SA. Fuji Heavy plans to increase Japanese production this fiscal year to account for 78 percent of total output, the highest proportion in the industry. The company is doing this at a time when companies from Toyota to Nissan and Mazda are expanding overseas to escape the yen. Fuji Heavy also plans to pursue cooperation with Toyota by proposing to expand the lineup of their jointly developed sports car, Yoshinaga said. Subaru sold 3,551 BRZs in Japan in the first 2 months, almost quadruple the company's initial target, and is starting sales of the two-door coupe in the U.S. this year. People placing an order now will have to wait until next March to get the car, he said. "Since the BRZ/GT86 is so popular, it's natural to consider expanding the lineup", he said. "For example, adding a BRZ sedan". Fuji Heavy hasn't always benefited from its ties with Toyota. In May it revised its midterm plans after it failed to win Chinese government approval to build a plant in the country, which would allow the company to avoid a 25 percent import tax. China didn't approve Fuji Heavy's application to form a venture with Chery because the government views such a move as tantamount to giving Toyota a third partnership in China, exceeding regulatory limits, 3 sources said last year. Toyota has ventures with Guangzhou and FAW. +++ Japan's domestic sales of new cars, trucks and buses rose 66.3% from a year earlier in May, increasing for the ninth-straight month as government subsidies boosted sales of fuel-efficient vehicles, the Japan Automobile Dealers Association said Friday. Sales totaled 236,366 vehicles in May, up from 142,154 in the year-earlier month when sales tanked 37.8% as firms' parts supply chains were hit by the March earthquake, the association said. The figures don't include sales of mini cars and mini trucks. TOYOTA lifted sales 127.2% to 110,714 vehicles in May with its Lexus upscale brand posting 77.6% sales growth to 3,177 vehicles. Nissan sold 32,927 vehicles, up 17.4%, while Honda's sales jumped 48.3% to 31,576. Auto sales, as measured by registrations of vehicles with the government, are monitored by economists since they are the first consumer spending numbers released each month. +++ Auto sales in the UNITED STATES will hover around 14.5 million vehicles in May, spurred by demand for cars and cross-overs as Japanese automakers bounce back from last year’s earthquake-related shortages, analysts said. The projected sales are roughly in line with the 14.4 million rate seen in March and April. A year ago at this time, the industry reported lower-than-expected sales, hurt by a shrinking supply of cars and vehicle prices that were too high for consumers trapped in a tepid economic recovery. But now, the auto industry has recovered from the shortages, particularly Japan-based automakers. Incentives, which reduce the price of a vehicle for consumers, also have risen slightly. Industry research firm TrueCar.com expects light vehicle sales to be up 32% in May to the highest level in five years. Automakers report their May sales figures on June 1. Volkswagen’s U.S. chief, Jonathan Browning, offered a more tempered forecast, saying sales in May would likely rise between 20% and 30%. The industry is now on the mend after its near-collapse in 2009, when General Motors and Chrysler filed for bankruptcy and sales fell to 10.4 million vehicles. By contrast, vehicle sales in the United States averaged around 16.7 million a year between 1998 and 2007. Volkswagen expects industry sales of about 13.9 million vehicles, while J.D. Power and LMC Automotive expect sales of 14.5 million, an increase of about 13% from 2011. Of all the major automakers, Toyota is expected to see the biggest bounce, with a 90% sales increase. Honda is expected to post a 50% sales gain, according to research firm Edmunds. Both of these companies sell far more cars than trucks. The Toyota Camry and Honda Accord were the second- and third-best selling cars last month, respectively. “We expect that mid-size sedans will post the largest year-over-year share gains as key Japanese models had limited availability in May 2011”, RBC Capital Markets analyst Joseph Spak wrote in a research note. No. 1 U.S. automaker GM will post an 11% gain, while Ford’s sales will jump 16 percent, according to Edmunds projections. Chrysler Group LLC is expected to jump 42%. Auto sales have been one of the bright spots in the economy for several months. Vehicle purchases by consumers accounted for 30% of U.S. GDP growth in the fourth quarter of 2011 and the first quarter of 2012, according to Credit Suisse. Sales have shot up despite cooling consumer confidence and mixed economic data that illustrates how shaky the recovery has been over the last 3 years. “At this point, it is almost as if the tail is wagging the dog”, said Kelley Blue Book analyst Alec Gutierrez. “During a typical post-recession recovery, we would expect to see auto sector gains being driven by broad economic growth. In the first quarter, the opposite was true”. One factor fueling the sales growth has been the increasing need to replace aging cars and trucks, which are now a record 10.8 years old on average. Higher fuel prices in the first quarter prompted some consumers to swap those older, less fuel-efficient models to lock in fuel savings. According to UBS, 63% of dealers said higher gasoline prices increased demand in the first quarter. As a result, the pace of sales may “moderate” in the second and third quarters, but the underlying consumer appetite for new cars and trucks as a result of pent-up demand remains strong, UBS analyst Colin Langan said. Since early April, the average price for a gallon of regular gasoline has fallen about 7%, U.S. government data shows. This has gradually pushed sales of trucks higher. Barclays Capital expects an 18% gain in truck sales in May and a 24% increase in cars. +++ VOLKSWAGEN 's SUV line-up has successfully managed the last few years with its full-size Touareg and its compact Tiguan but the company has confirmed plans are afoot to produce a mid-size version as well. The news stems from Jonathan Browning, CEO of Volkswagen of American during a visit to Detroit on Wednesday. He also added, "it's a great opportunity, if you could give it to me tomorrow, I would take it". There is no time frame of when the vehicle could arrive in dealerships but the confident admission that the company has it under consideration suggests the possibility of production is strong. Volkswagen's facility in Tennessee is penciled in to conduct the production phase of the model. The plant's capacity is currently set at 150,000 annual units which will be boosted by a further 30,000 in 2013 with the addition of 1,000 new workers. But, with an additional facility at the location, Tennessee could produce as many as 500,000 units per year. +++
