Crunch watch August 09: the auto industry

Published: 31 August 2009

Welcome to CAR's news aggregator as we round up the seismic change in the auto industry. Top tip: news summaries are added from the top hour-by-hour 

Monday 31 August 2009
Bank holiday today in UK; staff on a well earned break from Crunchwatch!

Friday 28 August 2009

Toyota will stop producing vehicles at the New United Moor Manufacturing plant in California next March. Company officials and California governor Arnold Schwarzenegger announced the decision, which comes in the wake of factory partner GM’s announced that it would abandon the venture back in June (Detroit News)
Tengzhong may finalise its deal to buy Hummer from GM next week, well placed sources told AN (Automotive News, subscription required)
German economics minister Karl-Theodor zu Guttenberg says it is 'hardly realistic' for GM to keep hold of its European outfit Opel and Vauxhall (Automotive News Europe, subscription required)
Ford's US cop car favourite, the Crown Victoria, is going to cease production in 2011 (Detroit News)

Thursday 27 August 2009

Nissan and Chrysler have abandoned plans to build cars for each other in the wake of Chrysler’s alliance with Fiat. Chrysler was set to produce a pick-up for Nissan, which would build two superminis for the Americans in return. However, Fiat will now provide small car underpinnings to Chrysler instead (Detroit News)
The German government yesterday approved plans to put one million electric cars on its roads by 2020 and pledged to invest almost €500 million in the project. Today only 1452 of Germany’s 41 million cars are battery powered (Detroit News)
Ford and the European Automobile Manufacturers Association are urging European governments either to extend their scrappage scheme initiatives or phase them out slowly. They fear abrupt ends will make the market slump again (Detroit News)
Petrol prices are the highest for 10 months, reaching a 105.02p average for the first time since October 2008. Fuel duty will increase by 2.3p from next week and the RAC predicts prices will rise as high as £1.20 per litre by the end of the year if VAT reverts to 17.5% (Daily Telegraph)

Wednesday 26 August 2009
Yesterday's meeting between GM and a German government task force failed to resolve the ongoing Opel/Vauxhall sale saga. GM negotiator John Smith had travelled to Berlin to push the government to raise loan guarantees bolstering RHJ International’s purchase bid (Financial Times)
Toyota is to halt one of its Japanese production lines for over a year, a move that will cut output by 220,000 vehicles as part of an effort to reduce total capacity by upwards of 700,000 vehicles annually. The line will be suspended from spring 2010 until the second half of 2011 (BBC News)
Daimler is being sued by Chrysler for failing to honour contractual obligations to supply parts necessary for the production of some 2010 models. Chrysler is also seeking legal means of preventing Daimler from halting its supply of diesel engines, torque converters and steering columns (Detroit News)
An increasing number of bankrupt automotive companies are seeking the right to pay executives millions of dollars in bonuses, whilst cutting staff numbers and costs. The US bankruptcy code was amended in 2005 to prevent such actions, but on Tuesday parts supplier Lear Corporation gained approval to hand out $20.6m to 29 suits in the midst of a $350m cost-cutting drive (Detroit News)
The US government and the Institute for Highway Safety are to make crash tests more stringent from 2010 onwards, so that only the very safest vehicles receive the ‘top safety pick’ award. The National Highway Traffic Safety Administration plans to do the same for 2011 model cars (Wall Street Journal)

Tuesday 25 August 2009
GM is considering raising $4 billion so it can keep Opel and Vauxhall, rather than sell to Magna or RHJ. Word is that the newly emboldened management at GM is backing away from selling its European arm. An update is expected within 24 hours, say unions (Automotive News Europe, subscription required)
The US government extended the deadline for ‘cash for clunkers’ rebate applications by 18 hours – after a surge in last-minute interest caused the computer system managing the deals to crash (Financial Times)
Business experts and US government officials reckon it may be months before the full impact of the ‘cash for clunkers’ scheme, which ended on Monday, can be assessed (The Detroit News)

Monday 24 August 2009
German chancellor Angela Merkel expresses regret that GM has failed to choose a buyer for its European unit. 'We urgently need a decision,' she tells TV channel ZDF (Automotive News Europe, subscription required)
General Motors has postponed its decision on who should buy its Opel-Vauxhall division. The decision had been due at a board meeting on Friday (BBC News)
Volkswagen is interested in the idea of partnering with Suzuki; chief exec Martin Winterkorn said: 'Suzuki would be an interesting partner because of its competency with small cars' (Automotive News Europe, subscription required)
Fiat is targeting inefficiencies at Chrysler's US plants – right down to every movement a worker must make in their daily duties (Detroit News)
Toyota has recalled 690,000 cars made in China because of faulty electric window switches. It's the company's biggest recall in China and the affected cars were built by Guangzhou Auto and Tianjin FAW (BBC News)

Friday 21 August 2009
UK car production was still down 18% in July on the year before – but the rate of decline has slowed, reports the Society of Motor Manufacturers and Traders (BBC News)
America's cash-for-clunkers scheme has become a victim of its own success – and will end on Monday, the government announced. Just $3 billion was allocated by Congress and the pot has been emptied in just a month (Financial Times)
Scottish-based dealer group Arnold Clark is to create 700 new jobs across the UK by early 2010. It said the car market was stabilising, letting it appoint 500 new sales positions, 120 apprentice posts and 80 jobs in support roles (BBC News)
GM directors are on a conference call today to discuss preferred bidders for its Opel and Vauxhall divisions (Bloomberg)
Ford has announced plans to design and build an in-car technology that will sap electricity from America’s national grid power system when rates are cheapest (Wall Street Journal)

Thursday 20 August 2009
Porsche was today raided by German authorities over its alleged stock market manipulation (Porsche)
Germany says it will give a €4.5 billion (£3.9bn) loan to car maker Opel if its preferred bidder is chosen to run GM Europe. Berlin wants Canadian components giant Magna to run Opel rather than RHJ. A decision on the bid is due on Friday (BBC News)
Qatar paid Porsche less than half the market price for its shares in Volkswagen AG – just €80 per ordinary share, sources close to the deal have revealed (Automotive News Europe, subscription required)
General Motors has pulled the plug on a new Buick compact crossover; the car was only shown to journalists last week, but has been canned after negative feedback. Analysts say it's encouraging that the new GM can move so swiftly (Detroit News)
German chancellor Angela Merkel vows that Germany will have 1 million electric vehicles on the road by 2020, making Germany the world's top market for EVs (Autotmotive News Europe, subscription required)

Wednesday 19 August 2009
Two thirds of American dealers have yet to receive any payment from the US government under the cash-for-clunkers incentive scheme (Automotive News, subscription required)
UK dealer group Lookers is pressing the Government to extend its scrappage scheme – warning that the UK market will seize up once the £2000 incentives stop. The retailer announced half yearly profits of £8.6 million, down from £13m (BBC News)

Tuesday 18 August 2009
Ex-BMW boss Bernd Pischetsrieder is being linked to the top job as chairman of components giant Continental (Auto Motor und Sport via Autoblog)
Koenigsegg inks the deal to buy 100% of Saab's shares – but the deal is still 'a few months away' from completion. The delay hinges around funding from the Swedish government, European banks and GM (CAR Online)
Saab's bankruptcy reorganisation process comes to an end on 20 August 2009; they're written down their debts by 75% (Saab)
GM will write off the money it used to support Saab earlier this year, and machinery and production equipment will be transferred to Koenigsegg free of charge. The sale price is effectively zero (Wall Street Journal)
Toy firm Lego – the cause of many children's obsession with cars – has posted a 60% rise in net profits (BBC News)
Cadillac has joined Lexus at the top of a US customer satisfaction index. Is it coincidence though, that three of the top five firms in the local University of Michigan survey were from Detroit? (Automotive News, subscription required)
Chrysler Group LLC has decided to build the Fiat 500 in Mexico for local market sales – and has been welcomed by unions and workers (Detroit News)

Monday 17 August 2009
Qatar Holding LLC is now a major stakeholder in Porsche SE. The prime minister of the Emirate of Qatar personally signed the deal to acquire 10% of the ordinary shares in Porsche's holding company (Porsche)
Two new car makers – believed to be Volkswagen and Fiat – are on the cusp of signing up to the World Rally Championship, according to its chief executive. VW (Golf R) and Fiat (Abarth 500 and Grande Punto) both have hot models to promote... (Financial Times)

Friday 14 August 2009
Volkswagen is to pay approximately $4.7 billion to obtain 42% of Porsche's automotive unit, it emerged today. This is part of a long-term plan to merge the two companies. 'Together, Volkswagen and Porsche can carve up the world’s car markets,' commented the boss at the Center for Automotive Research Institute (The New York Times)
Automotive component supplier Tomkins has seen shares jump 7%, taking its stock price to a 15-month high. It follows improved trading over June and July (The Times)
As tipped yesterday, Martin Winterkorn has been appointed CEO of Porsche SE, Porsche's holding company. Hans Dieter Pötsch is CFO of the company. Both appointments take effect 15 September (Porsche)
The appointment is indicative of VW's creeping control at Porsche. However, recently appointed Michael Macht remains chief exec of Porsche AG, the car making division (Porsche)

Thursday 13 August 2009
Volkswagen chief exec Martin Winterkorn is set to become Porsche's new CEO, two people familiar with the negotiations have revealed (Automotive News Europe, subscription required)
Russia is to introduce a 'cash for clunkers' scheme similar to that of Europe and the USA, after noting the increase in car sales as a result. Cars over 10 years old will qualify for a £942 incentive when traded for newer vehicles (BBC News)
The Serious Fraud Office might have decided not to bring charges over the collapse of MG Rover, but accountancy firm Deloitte – auditor to MG Rover before the collapse – is now undergoing an Accountancy and Actuarial Discipline Board probe. It received £1.9 million between 2000 and 2003 from MG Rover (The Guardian)
Analysts at JD Power forecast that US new car sales could rise by nearly 15% in 2010, reaching 11.5 million. If accurate, it would signal the end of a four-year period of decline (Automotive News, subscription required)
Meanwhile, analysts at CSM Worldwide predict that VW is on track to become the world's second biggest car maker after Toyota – possibly as early as this year (Detroit News)

Wednesday 12 August 2009
Shares in Tata Motors jumped by 7% yesterday on the Bombay Stock Exchange when it announced it had secured private funding for Jaguar Land Rover. The company had been pursuing the UK government for financial help (Financial Times)
Mark Bishop, a north American investor in Koenigsegg, has reportedly dumped his 22% stake in the Swedish company, according to Scandinavian business newspaper Dagens Industri. Koenigsegg is hoping to close a deal to buy Saab in the third quarter (Automotive News Europe, subscription required)

Tuesday 11 August 2009
Hyundai-Kia Automotive Group, the parent company of Kia and Hyundai, has pushed Ford from the top four automotive manufacturers. Hyundai-Kia has produced 8000 more vehicles than Ford in the first half of 2009, according to Automotive News figures
Jaguar Land Rover today announced their discussions with banks over future funding are nearly over; it hopes to secure a £340 million long-term loan from the European Investment Bank in the next few weeks – and says it can survive without help from the UK Government (Tata Motors announcement)
Electric car specialist Tesla Motors has made a profit for the first time of $1 million. 'We achieved a bottom-line profitability thanks to a tremendous amount of hard work by the Tesla team,' says Elon Musk, Tesla chief executive (The Times)
The UK's Serious Fraud Office won't bring charges over the collapse of MG Rover, it announced today. The government had been under pressure to make public information about the four-year inquiry (The Guardian)

Monday 10 August 2009
The Swedish government is investigating news that some investors have pulled out of the luxury group Koenigsegg's deal to buy Saab. 'We have received some information saying that,' said Joran Hagglund, Swedish industry minister. 'We haven't managed to confirm it ourselves with Koenigsegg' (Automotive News Europe, subscription required)
The UK's Serious Fraud Office will this announce whether or not it will launch a criminal investigation over the collapse of MG Rover (The Guardian)
Ferrari chief executive Amedeo Felisa tells the FT revenues slipped 8% in the first half of 2009 to €891 million compared with the same record period in 2008. 'The world economy is not in good shape, and for sure we are losing customers because the crisis is affecting their business,' Felisa said (Financial Times)
Toyota plans to raise its global output by 3% in the tax year ending March 2010. That'd make 6.5 million vehicles, according to a report in the Yomiuri newspaper (Automotive News, subscription required)
Land Rover has raised £75 million by mortgaging its spare parts business. Although Jaguar Land Rover is struggling to win government support to refinance its debts, the Bank of Ireland's finance division, Burdale Financial, has granted a three-year debt facility secured on LR's parts and accessories in the UK and US (The Times)

Friday 7 August 2009
Volkswagen announces prices for the new Polo, starting at £10,035 for the 59bhp 1.2-litre S and rising to £14,910 for the SEL 1.6 TDI (Volkswagen)
Struggling Korean manufacturer Ssangyong is set to get more funding from the state-run Korea Development Bank (Financial Times)
Hyundai has revealed that its sales have increased by 203% thanks to the UK scrappage scheme (The Independent)
The US government has agreed to pump an extra two billion dollars into the ‘cash for clunkers’ scrappage scheme (Reuters)

Thursday 6 August 2009
Fiat wins the green light from Italian trade authorities to buy Carrozzeria Bertone. It's paying €150 million over three years. Fiat chief exec Sergio Marchionne says he's interested in Bertone's ability to produce niche vehicles (Automotive News Europe, subscription required)
Britain's scrappage scheme bears fruit: new-car registrations have gone up by 2.4% – the first increase for 15 months, as 157,149 cars were sold. However, the market is still down by 550,000 over the past 12 months (Society of Motor Manufacturers and Traders)
Toyota plans to make more exciting cars in a bid to combat the $820 million loss recorded earlier this week. Cars will be more stylish and fun to drive, bosses claim (Financial Times)
GM believes it must finalise a buyer for Opel/Vauxhall in the next few days, or risk having to wait until after the German elections in late September 2009 (The Guardian)
Ford is monitoring the sale of Opel/Vauxhall – it has close relations with supplier Magna International which is bidding for GM's European operations. But CFO Lewis Booth says it will continue to work with Magna even if it wins the deal (Automotive News Europe, subscription required)

Wednesday 5 August 2009
BMW chief executive Norbert Reithofer announces plans to launch an electric car sub-brand – similar to its M brand for high-performance cars. The new brand could include a two-wheeler and will be aimed at commuters in large cities (Automotive News Europe, subscription required)
General Motors and the German government could decide on Opel's future by the weekend, the country's deputy economics minister said (Automotive News Europe, subscription required)
BMW is considering sharing the Mini platform with PSA Peugeot Citroën (Financial Times)
Korean police have managed to secure a paint shop at the Ssangyong factory which was being held by sacked employees; police will now try  to storm the rest of the factory (Bloomberg)
Honda will raise production due to growing demand in emerging markets (Bloomberg)
The US Senate looks likely to approve a $2 billion extension to the 'cash for clunkers' scheme before it breaks up for the August recess (Financial Times)

Tuesday 4 August 2009
General Motors' new board has made no recommendation in favour of either of the bidders for Opel. Talks continue with Magna International and RHJ International (Automotive News Europe, subscription required)
Mercedes-Benz is set to team up with Renault to develop a new four-seater for its Smart brand. The new Smart is due in 2013 and could use the Twingo's architecture (Automotive News Europe, subscription required)
Tata Motors says July car and CV sales rose 18% year on year to 48,054 vehicles. Year to date, though, sales are 1% lower than the same period in 2008 (Tata)
Toyota records a net loss of £483 million in its first quarter. It remains upbeat however, predicting a smaller net loss for the rest of the year than before (Financial Times)
BMW record a 60% drop in operating profit for Q2, taking £144 million (Financial Times)
Ford announces a 2.3% rise in American car sales in July, thanks to the US ‘cash for clunkers’ initiative. It is the first car maker to have increased sales in 2009 (The Times)
Monday 3 August 2009
Nissan has announced plans to make pure-electric vehicles account for 10% of all sales by 2020 – spearheaded by the Leaf, unveiled at the weekend (Nissan)
The Leaf will eventually be built in the Sunderland plant, although initial production starts in Japan and the US (Financial Times)
Four Opel board members meet to discuss the future of Vauxhall for the first time (Daily Telegraph)
The German government says that both Magna and RHJ international will have to up the bids for GM Europe to win government support (The Independent)