Wednesday, February 27, 2008

Selling Jaguar won’t end Ford's ties to luxury brands

Technology agreement will tie Ford to brands for several years

DealersEdge Daily Headlines

Ford is widely expected to sell its Jaguar and Land Rover brands to India's Tata Group, but the terms under discussion could keep the U.S. automaker linked to the brands for years to come, according to an analysis in the Wall Street Journal.

The deal between Ford and Tata could come as soon as next week, according to a United Kingdom labor official at a union representing Jaguar and Land Rover workers. People familiar with the matter said the timing was likely but cautioned the talks remain fluid. Tata is expected to pay more than $2 billion for the luxury brands and related facilities and technology.

Ford plans to sell its entire stake in the brands. But Tata signaled to British labor leaders last week that, under the deal, it intends to continue using engines and other parts currently built in Ford-owned plants in the U.K. Tata could continue to get the engines from Ford for the next five years, and perhaps longer, one person familiar with the negotiations said.

Tata faces challenges as it seeks to become a player in the global auto industry, particularly in the luxury arena. Purchasing Jaguar and Land Rover will give the company technological know-how and luxury-car expertise. But it can't afford to stumble over technical issues, making relationships with Ford and existing suppliers important.

A Ford spokesman declined to comment beyond saying executives "expect to have a deal early this year."

A Tata Motors spokesman said that only leather from non-holy cows would be used in the Jaguar and Land Rover vehicles.

"Nobody foresees any major problems now; everything is pretty much done," said Roger Maddison, a national officer for the British union Unite, which represents about 16,000 workers at Jaguar and Land Rover. He said a memorandum of understanding between Tata and Ford could be signed as soon as March 5 or 6.

Ford acquired Jaguar for $2.5 billion in 1989 and Land Rover for $2.75 billion in 2000.

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Monday, February 25, 2008

Jaguar, Land Rover sold to India's Tata Motors

Tata Motors will announce its purchase of Jaguar Land Rover on March 5 or 6.

The dates have been agreed between Tata and Ford, which is selling the two luxury brands, following talks with trade union leaders last week.

We are big machine - Trust us.

Roger Maddison, national officer of Unite, the largest union in the UK auto industry, told Automotive News Europe Tata had agreed to meet guarantees sought by workers' leaders.

He said, " Everything seems fine as far as we are concerned; it's just the lawyers working on it now."

Union leaders spoke with Ford and Tata to resolve final details before the drawing up of a memorandum of understanding for the sale.

In earlier talks with the two companies, unions had been seeking assurances that Tata would continue to source engines, stampings and other systems from Ford's plants in Bridgend in Wales and Dagenham, near London.

All Jaguar and Land Rover engines come from Ford plants, as do many of Land Rover's stampings.

We may or may not buy your engines Ha.

While Ford would not comment officially on the planned announcement date, insiders confirmed to ANE that March 5 or 6 were " not too far off track."

A Ford source ruled out any kind of announcement at next week's Geneva auto show, where the first press day is on Tuesday, March 4.

At Geneva, Ford is launching a new version of its second-biggest seller, the Fiesta small car.

We plan to overshadow the Fiesta with this beautiful, powerful and impresive machine.

The source said an announcement of a deal with Tata would be held back to avoid overshadowing the debut of this key new model.

" The sooner everything goes through, the better," said Maddison. " The workforces are beginning to get anxious."

Why again did we buy Land Rover?
We already have a blatant copy?

Source to original article.

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Tuesday, February 19, 2008

Electric cars face battery of hurdles

by: Sharon Terlep / The Detroit News

In the rush to deliver an electric car to the masses, General Motors Corp. is finding that the all-important battery might not be the only major hurdle.

The heating and cooling systems, for example, are a challenge because they typically are built to run off a traditional fuel combustion engine. That means new types of air conditioning and heating systems must be built.

GM, in a high-stakes race with Toyota Motor Corp. to turn out an affordable, effective battery-powered car, has found that while the lithium-ion batteries themselves are hitting all the marks on early road tests, a host of other issues are beginning to crop up.

Chevrolet Volt concept

"People tend to believe that if the battery question is solved, everything is solved and the vehicle will work," said Frank Weber, GM's vehicle line executive in charge of the electric car program. "But beyond the battery, the electric vehicle presents challenges that are significant."

A typical modern stereo system, for example, drains too much juice from the battery life. At the same time, there still isn't a supplier base to provide parts for the mass production of electric vehicles.

The quandaries underscore the complexity of what GM and other automakers are trying to achieve in creating an electric car, a feat that involves far more than simply swapping an engine for a high-powered battery cell.

GM executives say, despite the challenges, they still hope to meet a 2010 production goal for their first battery-powered offering: the much-hyped Chevrolet Volt.

The Volt is a variation of a plug-in hybrid vehicle, which Toyota also is racing to bring to market. Nissan Motor Co. and Ford Motor Co., too, are working on developing lithium-ion batteries that are more powerful and durable yet smaller than the nickel-metal hydride batteries in current hybrids.

Durable battery is first task

In the case of the Volt, the battery would drive the powertrain, and an onboard fueling system would recharge the battery on the road. GM is working on that fueling system, known as E-Flex, which would run on gasoline, diesel fuel and hydrogen fuel cells.

Unlike gas-electric hybrids on the road today, everything in the Volt would run solely on battery power. The engine's only job would be to recharge the battery.

GM's first task is to produce a lithium-ion battery that is long-lasting, durable and affordable.

Then, the legions of engineers working on the battery face the challenge of putting together all the components -- from tail lights to heaters -- so that they drain significantly less power from the battery. Once those pieces are in place, GM must build a base of suppliers to provide parts on a mass scale.

"The battery is important, but all the other components are electrified as well," Weber said. "There is not an established supplier community for this. It's a very complicated system with known technological solutions. But they've never been integrated in these forms."

Toyota, which also has set a 2010 goal for producing a plug-in version of its Prius sedan, has the same issue. But the Japanese automaker also has the advantage of having pioneered gas-electric hybrid technology and being the world's leading seller of hybrids.

"The accessories can be a huge draw on the battery, and those have to be managed as well," said Jaycie Chitwood, a strategic planner for Toyota's advanced technologies group.

"But in terms of getting the technology in place, it's a secondary issue."

Because of the limitations of a battery, both automakers are likely to find it virtually impossible to deliver a plug-in vehicle that operates identically to a similar size gas-powered car, said analyst Jim Hall, president of 2953 Analytics LLP in Birmingham.

Efficiency needs to improve.

"An automobile with a gasoline engine as the power plant has a lot of energy on board -- so much energy there are things that we never paid attention to," Hall said. "When you're relying on the battery, all these problems stack up and you realize you have to do all these other things to optimize for range."

In many cases, he said, the suppliers will be better equipped than the automakers to improve on the efficiency of vehicle components.

"This is not so much a matter of invention," he said, "as much as it's an application of technology they wouldn't normally do."

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Friday, February 15, 2008

Swiss create the ‘sQuba’ underwater car

Swiss create Bond-like underwater car
‘sQuba’ concept set to make a splash at Geneva Auto Show
Rinspeed says the ‘sQuba’ is the first real submersible car.

GENEVA - OK, so the Swiss have invented a car that runs on land and underwater. But did they REALLY have to make it a convertible?

It’s called the “sQuba,” and conjures up memories of James Bond’s amphibious Lotus Esprit from “The Spy Who Loved Me.” That fictional vehicle traveled on land and, when chased by bad guys in a helicopter, plunged into the water and became an airtight submarine — complete with “torpedoes” and “depth charges.”

But “Q” isn’t responsible for this one.

The concept car — which unlike Bond’s is not armed — was developed by Swiss designer Rinspeed Inc. and is set to make a splash at the Geneva Auto Show next month.

Company CEO Frank Rinderknecht, a self-professed Bond fan, said he has been waiting 30 years to recreate the car he saw Roger Moore use to drive off of a dock.

The sQuba can plow through the water at a depth of 30 feet and has electrical motors to turn the underwater screw.

You’ll have to break out the wetsuit, however.

The car has an open top, meaning that the two passengers are exposed to the elements.

“For safety reasons, we have built the vehicle as an open car so that the occupants can get out quickly in an emergency,” said Rinderknecht, 52.

Passengers will be able to keep breathing underwater through an integrated tank of compressed air similar to what is used in scuba diving.

The sQuba’s top speed on land is about 77 mph, but it slows down to 3 mph on the surface of the water, and 1.8 mph underwater.

Working with engineering specialists, Rinspeed removed the combustion engine from a sports car and replaced it with several electrical motors. Three are located in the rear — er, aft — with one providing propulsion on land and the other two driving the screw for underwater driving.

“We always want to do cars that are outrageous, which nobody has done before. So we thought, ’Let’s make a car dive,”’ said Rinderknecht, whose innovative company has made transparent, flying and voice-activated cars in previous attention-grabbing displays at the Geneva Auto Show.

The company calls the sQuba the first real submersible car. Unlike military amphibious vehicles, which can only drive slowly on a lakebed, the sQuba travels like a submarine — either on the surface or submerged.

The interior is resistant to salt water, allowing the skipper to drive into a lake or the sea.

“Many concept cars introduce important new technology,” said John Cabaniss at the Association of International Automobile Manufacturers in Washington. “Anything to improve the efficiency of a vehicle, streamlining or reducing the weight of materials, while maintaining strength ... is put into concept cars first.”

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Thursday, February 14, 2008

The Great Dealership Downturn

From Now

To Then?

Cliff Banks
Ward's Dealer Business

Prediction time — Sometime, probably in early 2010, when Ward's run its annual number of roof tops and sales per brand, the automotive industry may be in for a shock because the number of existing dealerships very likely could be much less than it is today.

The total numbers for 2007 aren't in yet (check back next month) but 2006 finished with just under 22,000 dealerships.

By the end of 2009, that number could very well be between 19,000 and 20,000 rooftops.

We know the domestics are trying to reduce their dealership ranks. Till now, the “Big Three” officially have allowed the market to drive much of that process.
There are indications, though, that General Motors is about to become more aggressive in that arena. GM sales and marketing executive Mark LaNeve downplayed recent media reports of GM's aggressive stance, but the situation bears watching.

Ford appears to be on track with its plan, however, with approximately 400 of its dealers exiting the market in the last two years. One problem, though, we hear many of those stores are minority dealers.

The good news is, Ford dealers' profitability was up in 2007 — mostly at Lincoln Mercury stores. Still improvements fall far short what it was in the heady years at the end of the last decade.

It's anybody's guess as to what happens with Chrysler this year. For now, it appears there is no money set aside to facilitate dealers getting out of the game. A lot of you seem to be hanging on to see what happens but from here in Detroit, it looks like Chrysler is in for a couple of rough years yet.

Another brand working on a dealer reduction plan is Volvo, which has said it will eliminate about 20% of its 350 dealers.

When you start adding the numbers up, losing 2,000 dealerships isn't such a stretch.
And, if sales do drop to the 15.5-15.6 million level this year as many analysts are predicting, we can expect more dealers to get out.

It will be interesting to see at this year's National Automobile Dealers Assn.

convention in San Francisco, how Dale Willey and Annette Sykora handle their message to auto makers to leave dealers alone and let the market run its course.

There probably will be some tough meetings behind closed doors this year.

Another trend we'll see is privately owned dealer groups will get larger. One large group in Texas tells me it plans to acquire as many 50-60 stores in the next couple of years.

A director at another group in the Southeast says his company loves downturn years. “Those are years we capture a lot of share,” he says. They also are reworking some of their framework agreements with certain OEMs to allow for more flexibility in how many rooftops they can own.

For those of you who can hang on, the struggle might be worth it — some analysts are predicting the market to rebound to the 17 million-unit level by the end of the decade.

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John Kerry's SUV Hybrid Sitting On Used Car Lot

According to Kerry’s Chief of Staff, the senator is helping the fight against global warming and reduction of greenhouse gases by giving shorter speeches. that dubs itself “the latest in green gossip” headlined the news that Kerry’s used Hybrid is sitting on the used car lot at Koons Ford in Falls Church after having been traded for a 2008 Tahoe Hybrid.

Those interested in owning the used hybrid of a famous senator and past-Democratic nominee for President are urged to act quickly. There is no word on how many miles are on the vehicle, but a companion article found at notes that the vehicle has a price tag of about $26,000.

The Washington asks the question, “But what is Kerry, Mr. Saving the Planet Jr. (Al Gore is Senior) doing getting rid of his hybrid? Is he going back to a gas-guzzling ozone-destroying emissions way of the past?”

Apparently they contacted the senator’s office with that question and were assured that this was not the case and that Kerry replaced his 2-year old Escape with a new Tahoe Hybrid, which they quickly pointed out was the 2008 Green Car of the Year. According to Kerry’s chief of staff, David Wade, it is a 40 percent increase in fuel efficiency.

As usual, when politicians use percentages you have to look for a little deception. In the version of the story, they are quick to point out that the senator traded a hybrid that gets 30 miles per gallon for one that only gets 22 mpg. Again, quoting - “Tsk, tsk.”

You might recall that during the 2004 election Kerry was questioned about his family’s use of a gas-guzzling Chevy Suburban at their ski-country mansion - one of their many. Husband of super-wealthy heiress to the Heinz fortune, Kerry countered that this was not his vehicle, but was owned by “the family.” Apparently he has found a way to keep is big SUV and environmental conscience too.

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Wednesday, February 13, 2008

Lentz to Dealers - No Magic Dust for Success

By Marty Bernstein
AIADA Contributing Editor

Jim Lentz, president and CEO of Toyota Motor Sales, USA, told the 500+ audience at the American International Automobile Dealers Association’s 38th annual luncheon meeting in San Francisco, “There’s no Toyota magic dust I can sprinkle to make things better. It won’t happen, but I can tell you this… we will get through this year, the challenge will make us stronger and the long term outlook is very good.”

Lentz was responding to the industry events and days leading up to the luncheon in San Francisco. The general tone of conversations during NADA’s annual convention was cautious, careful and to some degree concerned as the slowing of the economy impacts the retail automobile business. Optimism was not rampant.

Yet from Toyota’s industry perspective all was not doom and gloom. Their projection for the U.S. market at the close of the year remains around 16 million vehicles, slightly down from 2007, but as Lentz noted, “Instead of seeing 2007 as the worst year in the last nine, we think it will be one of the best eleven years in automotive history.”

Continuing, “It wasn’t all that long ago when 16 million cars were seen as an incredible year.” Supporting this approach, he commented on the auto needs of an aging population, the growing younger demographic entering car buying years, low inflation combined with low interest rates, the Fed’s quick responses and Congress’ move to pass a near term stimulus plan. Toyota, he said, “Is optimistic about the future because people love cars!”

To make things better and brighter the automobile industry needs to understand and know how to help consumers through these turbulent times. Findings from the Scan Study by DYG, a research firm specializing in trends and motivations which his company uses, Lentz discussed how America is becoming a Super Saturated Society.

“Today’s consumers are super stressed and overwhelmed by too much information and too many choices. It’s the result of too much information, too many choices, multi-tasking, technological speed, non-stop media coverage and endless choices.”

Responding to the societal changes will require adapting to these changes proactively by eliminating the “hassle” out of car buying by providing low or no maintenance products, offering valet ownership plans, creating a faster, less complicated F&I process and generally, “reducing the time customers spend in dealerships.”

Another area which needs modification and change to meet customers’ needs the actual process of buying and servicing a car and making the time they do spend in a dealership more enjoyable. Both Toyota and Lexus the past year have urged their dealers to upgrade and improve facilities which add to the ambiance, comfort and convenience of a visit to a dealer’s store.

Next, Toyota’s president hit on improving the service department, “We were able to prove a direct link between a good service department experience and future car sales. To do this, each service call should be viewed as an opportunity to solve a problem by evidencing initiative and expertise that will be remembered.”

Lentz also chided his company for “causing needless confusion among dealers and customers by assigning different names to the same set of specs on a vehicle.” He said, “The goal is to weed-out and eliminate these inconsistencies and create a simple, common language everyone can understand.”

Alluding to the magic dust, Lentz cited the feeling that Toyota dealers are the company’s closest business partners. As such, “We try to get their feedback before making any major moves. All that give and take played out over 50 years has created a priceless trust that is the foundation of our success.”

Lentz ended his remarks by encouraging the audience to stay active in the AIADA and say involved with the legislative process in Washington. “Congress is always working on issues that can affect our business and we need your help to make sure our voice is heard. This made a huge difference last year before the crucial vote on the CAFE bill.”

The year ahead, he emphasized, is critical to the automobile industry on issues regarding vehicle safety, free trade, climate change, and the state-by-state movement to further regulate greenhouse gases. The importance of the election of a new president and new Congress will have major ramifications on our future.

“So, this is no time to be timid, lose focus or get complacent. We all need to stay informed, stay active, and stay united to protect our business. There is no magic dust; it’s about hard work and working together.”

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Tuesday, February 12, 2008

Jury finds Florida car dealer guilty in “out-of-trust” case

Former Pontiac-Buick-GMC dealer faces up to five years as a guest of federal taxpayers.

The former owner of Big Oaks Buick Pontiac GMC Inc. in Bartow, Florida, was found guilty by a federal jury in Tampa on 11 counts of wire fraud, 11 counts of bank fraud and one count of conspiracy to commit both, reports the Lakeland Ledger.

John Giovanetti, was charged with the theft of $2.5 million by having employees file fake documents to receive financing from SunTrust bank.

Mr. Giovanetti now faces up to five years in prison for conspiracy and up to 30 years for each count of the wire and bank fraud counts. He also faces a fine of $2.25 million.

The former dealer was convicted of conspiring with two former employees, the dealership controller and the general manager, to obtain funding from SunTrust to purchase vehicle inventory in 2004, according to the indictment.

During several months in 2004, at least 12 fraudulent documents were submitted by the dealership to SunTrust, listing at least 44 vehicles for purchase that had already been sold.

The money obtained from the bank was used in "the day-to-day operations of the dealership and to support the owner's lifestyle," the indictment read.

Before the trial, the dealership controller and the general manager both agreed to plead guilty to one count of conspiracy to commit bank fraud and testified against their boss.

Their plea agreements stipulated that the controller would forfeit $56,500 and the general manager $85,000, their respective total salaries for 2004 which represent "the minimum amount of proceeds obtained by the defendant as a result of the offense."

The Pontiac-Buick-GMC store was eventually bought at auction by Michael Holley.

Mr. Holley paid $3.6 million for the GM franchise and its assets.

Friday, February 8, 2008

Dealership employees “borrow” an Infiniti G35 to video street racing stunts

Bellevue Washington dealership employees “borrow” an Infiniti G35 to video street racing stunts - wanted video to post on YouTube

But bright, they are not. “Drifting”, the art of sliding the rear wheels sideways while burning rubber was the trick. A parking lot right next to the State Patrol’s regional office was the location. The outcome obvious - or should have been.

Late last Sunday night, two 21-year-old Bellevue Washington dealership employees got a great idea. An Infiniti G35 had just been traded in, and one can guess that their discussion somehow gravitated to street racing. So, who would know - they decided to take the car for a joy ride, apparently to demonstrate their “drifting” skills for the video camera. The video was intended for posting on YouTube.

“Borrowing” the car was not a bright idea to start with, but these two geniuses decided to compound the error with a series of bad decisions.

First bad idea: The chose a parking lot right next door to the regional office of the Washington State Patrol. A trooper returning to the Patrol’s office heard the wheels screeching and saw the car as it “drifted” through the turns in the neighboring parking lot. Both were arrested at the scene.

Second bad idea: videotaping the entire scene. Some of the video was shot by either Dumb or Dumber from the curb as the other drove. When the trooper spotted the video camera he confiscated it and was rewarded with video tape evidence of the entire episode.

Their voices were obviously recorded throughout the adventure. The final few seconds of the recording show the police cruiser approaching, while one says, “I’m going sh**, cop up here!” and then the recording ends.

Both were charged with felony malicious mischief and the driver with reckless driving. The charges sound serious enough but given the growing number of innocent victims killed each year by reckless “street racers,” it seems that this type of behavior should draw a more serious penalty.

Dealers Edge.

Toyota dealership employees will take it all off for charity

Employees at an Illinois dealership plan to raise money for charity with an unusual gambit.

The employees at Belleville Toyota in Belleville, Illinois, like to consider themselves one big family. And as a family, they do things in bunches. The dealership's employees have all agreed to do something outrageous in support of four local charities, according to a report in the Belleville Intelligencer.

Sixteen employees - both male and female - will say goodbye to their hair in a ceremony at the dealership. Even the dealership owner said he decided to shave his head after two close relatives died of cancer.

"I was adamant I was going to do it to show my support for people with cancer who lose their hair to chemotherapy. And I was taken aback when everyone here decided to join me," dealer/owner George Farlow said.

The group hopes to raise more than $10,000 for the local cancer society, a hospice, the lung association and the diabetes foundation.

Members of the public will drop into the dealership and make a financial pledge to the charity of their choice before the cut-a-thon.

Saturday, February 2, 2008

Isuzu to exit U.S. car market

Isuzu exec: Competition hurt us

Financial problems in the early part of this decade and the intensely competitive U.S. automobile market led to the downfall of Isuzu's passenger vehicle business in North America, according to an Associated Press report.

Isuzu Motors, famous for developing one of the first midsize sport utility vehicles and an ad campaign that featured a salesman telling lies, announced that it will stop selling new pickups and SUVs in North America on Jan. 31, 2009.

The Japanese company had financial problems and restructured to become profitable again earlier this decade, but in doing so had to reduce investments and expenses, said Terry Maloney, president and chief operating officer of Isuzu Motors America Inc.

Isuzu's U.S. sales peaked in 1986 at 123,000 vehicles, mainly on sales of the Trooper SUV, but the company sold only 7,098 pickups and SUVs in 2007.

Isuzu said in a statement that it will back its products and dealers for years to come, honoring all product warranties and roadside assistance programs. Purchase an extended warranty for Isuzu through

Mr. Maloney said Isuzu will remain in the U.S. with its commercial vehicles and diesel engine technology.

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