Industry News

• Council Opposition to Prodrive Plan

• Unep report urges caution on hydrogen as primary fuel
• Interior Motives Design Conference: London Docklands, 6-8 June
• Proposed U-turn on EU transport policies bad for jobs and growth, says T&E
• 2nd Byte launches service to monitor dealer advertising effectiveness
• Gentex announces senior management changes
• CSM Automotive Production Barometer shows US car production picked up in March
• Bekaert launches ‘Quantum Mega Performance Films’ for car interior heat reduction

• Magna Steyr tests Service-Oriented Architecture
• GM to sell stake in Isuzu Motors Ltd but continue partnership
• Toyota cuts production costs by $1.2 billion
• Bentley to launch Continental GTC at this month’s New York show
• Lookers warns shareholders of manufacturer notifications on Pendragon bid
• Lear Corporation provides 2006 financial guidance
• Hayes Lemmerz reports 2005 results in line with forecast
• Hella sets growth goals
• 2005 vehicle export rankings published
• New MD for Carland supermarket
• AA British Insurance Premium Index shows competition pressuring car policy prices
• Dieter Zetsche tells DaimlerChrysler AGM profits will rise
• Dollar Thrifty UK acquired by Scot Group
• Honda Jazz is Auto Express-Glass’s Guide Used Car of the Year
• Accenture consumer survey shows appetite for telematics

• EU transport biofuel standards expected to rise above 5% concentration
• ECJ confirms EC fine on Opel
• Record March demand helps keep first quarter CV registrations buoyant
• Spain’s OE supply sector raised sales by 3.1% last year
• MAN Nutzfahrzeuge to use India as base for global developing markets
• GAZ in talks with DaimlerChrysler on LCV engine supply
• Rolls-Royce extended wheelbase Phantom now available in Europe
• Depreciation abated in first quarter 2006 – EurotaxGlass’s Used Car Market Index
• PwC study suggests Asian and CEE automotive production will account for a third of the global total by 2010
• European Commission publishes study on national enforcement of state aid rules
• Used car imports taxation: EC starts infringement procedure against Cyprus
• 550 exhibitors for Dubai's Automechanika Gulf show on 28-30 May
• Meridian Automotive Systems to sell interiors business for $50m
• AdBlue storage system launch at CV Show

• Japanese firms to produce over 50% of 2006 UK car production volume
• SAIC subsidiary plans own-brand European car exports from next year
• Ford Dagenham designs and builds new V8 diesel engine
• New regulations on workplace noise come into force
• JD Power-LMC reports on March European new car market
• Hayes Lemmerz initiates US restructuring plan
• Ford board directors take pay cuts; COO Padilla to retire
• Nanjing to ask for Government aid in May plan for Longbridge - report
• China agrees to talks with EU and US over automotive components tariffs
• Judge refuses GM’s application for dismissal of pensioners’ class action suit
• GM agrees to co-operate with unsecured Delphi creditors - report
• MIA to organise global sourcing conference
• New head of operations at SEAT UK
• SMMT reports bus and coach registrations up 37.4% in March
• Hyundai Automotive diversifies rapidly
• European Parliament approves mobile air conditioning directive
• Collins & Aikman to exit North American automotive fabrics business
• Fuel Parts launches aftermarket information campaign on catalytic converter legislation
• Honda opens new Swindon Logistics Centre
• Tower Automotive sets deadline for completing labour negotiations

Plans by the Banbury, UK based motorsport and automotive development company Prodrive to establish a Formula One-standard factory on a former RAF airfield site in Warwickshire have now met with opposition from a local council in addition to the concerns raised by residents about the impact of the new development on the environment.

A spokeswoman for Solihull Metropolitan Borough Council, which has registered its opposition to the plans as the neighbouring authority, said, "We have objected because we feel it is an inappropriate development on green belt land. Developments on green belt land need to meet special circumstances and we do not believe this meets that criteria. We also believe it will encourage car travel. This conflicts with policies for less reliance on cars."

Prodrive's corporate PR manager Ben Sayer said, "There will be more traffic created because there will be hundreds more jobs created. It is one of those clouds with a silver lining. But certainly we have looked at minimising the impact of traffic. It is a shame that we have these objections, especially as a lot of the new jobs will go to people from Solihull."

T & E Bulletin reports this week that the UN Environment Programme (Unep) has published a report, The Hydrogen Economy, commissioned from a Paris-based consultancy, Menecon, which urges caution about the potential of hydrogen to be a primary fuel of the global economy.

The Unep report’s author, Trevor Morgan told T& E Bulletin, which reported the publication this week: “There are widespread misunderstandings about the role hydrogen could play in the global energy system ... Those who talk up the potential of hydrogen seem to be missing a number of technical obstacles that have to be overcome, which could set the hydrogen economy back by a couple of decades, or even make it not happen at all.”

The report is available at: www.unep.fr/energy/publications/files/Hydrogen_Publication.htm

- A research advisory council working for the Commission says the EU could realistically source a quarter its transport energy needs from biomass by 2030. The Biofuels Research Advisory Council (known as Biofrac), says biofuels would have to come from a mixture of EU-production and imports.

Public documents related to the work of BIOFRAC are available at: www.forum.europa.eu.int/Public/irc/rtd/biofrac/library?l=/public_1/documentation&vm=detailed&sb=Title

(Source: T & E Bulletin:

www.transportenvironment.org/Downloads-index-req-getit-lid-425.html)

Gentex Corporation, the Michigan-based manufacturer of automatic-dimming rear view mirrors, has announced that the company's Executive Vice President Garth Deur is leaving to pursue other opportunities. The company's Vice President - Finance and CFO Enoch Jen has been promoted to Senior Vice President and retains the role of Chief Financial Officer. The company also announced the appointment of Steve Dykman as its Vice President - Finance and Chief Financial Officer, upon Jen's previously announced plan to retire next January.

Deur’s departure evidently had to do with pay: Gentex Chairman and CEO Fred Bauer said, "We wish him well, but we were, unfortunately, unable to reach a mutually agreeable solution to Garth's short- and long-term compensation requirements, as an integral part of our culture mandates that all team members share in the financial opportunities and sacrifices alike at the company - just as our shareholders and other employees do."

The second Interior Motives Design Conference for automotive designers is to be held at the Museum in Docklands from 6-8 June 2006.

The Interior Motives Team is in the process of finalising the speaker programme. Sessions will include:

- Real world: informing the world of car design

- Human centred design

- Design identity: brand design and cultural requirements

- Advancing design in the face of change

- Breaking out: changing the model and car design

- Trend design

- Project futures: forecasting tomorrow, advancing design today

The list of confirmed speakers thus far includes:

Laurent Boulay, Research & Development Exterior Designer, Volkswagen; Han Hendricks Vice President, Industrial Design, Marketing, Communications and Advanced Sales, Johnson Controls; Anthony Lo, Advanced Design Director, GM Europe; Adriana Monk, Chief Designer, Jaguar/Land Rover; Don Norman Nielson Norman Group, professor at Northwestern University, and author of Emotional Design; Robin Page, Head of Interior Design, Bentley Motors; Hartmut Esslinger, Founder, Frog Design; Martin Smith, Executive Design Director, Ford of Europe; Frank Stephenson, Vice President of Design for Fiat, Lancia and Fiat Light Commercial Vehicles; David Wilkie, Design Director, Stile Bertone.

The conference is supported by Alcantara SpA, ARPRO, ICEM Ltd., Melba Industries, MGX Madge Group Associates LLC and Technicon Design as Gold sponsors and Stockvis Tapes as Silver sponsor.

Delegates can register online at www.interiormotivesconference.com

The European Commission is planning “a major U-turn” on two of the central environmental elements of the EU Common Transport Policy, according to the Brussels-based European Federation for Transport and Environment (T&E).

EU transport policy is governed by the 2001 Common Transport Policy white paper, which is due to run until 2010 but a mid-term review is currently being prepared and is due out next month. T&E’s latest bulletin says the organisation has seen a draft copy of the review, which it says proposes to reverse two major commitments: “decoupling” transport growth from economic growth, and efforts to shift traffic from road to rail.

The proposed changes are said by T&E to be causing controversy within EC ranks, with officials from the environment directorate reported to be seriously opposed. T&E director Jos Dings said: “The proposed reversal of the decoupling commitment is very alarming. Decoupling transport growth from economic growth is not just a nice idea to reduce environmental damage, it’s central to sound business. We need to think about transport the same way we think about energy, and strive to do more with less.

“Dropping the commitment to decoupling is even more serious because of the lack of progress made on charging for use of infrastructure. Smart charging systems – such as those introduced in

Germany, Switzerland, London and Stockholm – have proved to trigger the development

of advanced logistical planning systems and services, and boost sales of new, cleaner vehicles. It

shows that smart infrastructure charging is in fact beneficial for high-quality growth and jobs, as well as for the environment.”

T&E has sent a letter to the transport commissioner Jacques Barrot explaining why the draft mid-term review will take Europe’s transport in the wrong direction. It admits that attempting to shift freight transport from road to rail has caused problems, but says more targeted and smarter spending was needed to solve real transport bottlenecks. The proposal to drop the shift from road to rail follows, says T&E, a major campaign by road interests to discredit the legitimacy of the modal shift from road to rail freight.

- Last month’s TERM report from the European Environment Agency on transport and the environment said Europe’s growing transport sector is threatening the EU’s efforts to meet its commitments under the Kyoto protocol. The head of the European Environment Agency,, Jacqueline McGlade, said: “Transport, especially road transport, is becoming cleaner because of increasingly strict emission standards and improved technology, but increases in demand continue to outstrip positive innovations. Long-term policy initiatives are needed to encourage people to change their habits.”

(Transport and Environment: facing a dilemma, TERM report, EEA, www.reports.eea.eu.int/eea_report_2006_3/

Source: (www.transportenvironment.org/Downloads-index-req-getit-lid-425.html)

Calls 2 Account, a new web-based product from automotive retail web software developer 2nd Byte, is designed to track which advertisement or other marketing activity produces telephone sales leads, enabling dealers to measure the effectiveness of their advertising expenditure.

Calls 2 Account is an automated call tracking system which works by automatically substituting a dealer’s usual ‘phone number with a range of unique local rate numbers. Potential customers calling these numbers won’t notice the difference, and will actually pay less if calling nationally, but the system will immediately reveal to dealers which advertisements have generated responses. For dealers already using 2nd Byte to feed their used car stock to online portals, their Calls 2 Account numbers will automatically be substituted.

Calls 2 Account will also tell dealers how long it took for calls to be answered; whether the caller got an engaged tone; or whether the call was simply ignored. (2nd Byte’s research suggests that at least 7 per cent of calls to dealerships are not answered.) And if callers cannot get through, their ‘phone numbers are provided instantly online so that they can be followed-up. The system can analyse calls to specified departments by time and day of week, and calls from landlines can be identified geographically.

Calls 2 Account costs £125 a month (excluding VAT). There is a dedicated web site at www.calls2account.com .

2nd Byte provides used car marketing services to Honda, Jaguar, Land Rover, Mazda, Nissan, Renault, Suzuki, Volvo and Vauxhall Network Q. The Godalming-based company is appointed to provide services to over 2,000 dealers.

(www.2ndbyte.com)

The CSM Automotive Production Barometer for April 2006 is now available via www.csmauto.com/auto-production-barometer. It shows light vehicle production in the USA picked up in March, increasing to a seasonally adjusted 11.41m units compared to a year ago. US car production in March increased 1.5% over last year, though light truck output was down 3.8% y-o-y in March and down 6.0% year-to-date on a seasonally adjusted basis.

Actual unit production in the United States totalled 1.13m units in March, up 7.5% from 2005 levels with year-to-date output up 0.1%. North American production rose 10.9% over March 2005 at a seasonally adjusted 16.58m units. Year-to-date production continues to outpace last year at 16.19m units, an increase of 4.7%.

All the "New Six" North American auto manufacturers posted increased output compared to last year with the exception of Nissan, down 0.2%. General Motors Corp. and DaimlerChrysler recorded significant increases of 12.7% and 12.2% year-on-year, though last year's exceptionally weak results overstate these gains. New product launches at both GM and DaimlerChrysler, particularly the redesigned full-size SUVs for GM, are the primary drivers of the increase. Toyota, Ford Motor Co. and Honda recorded solid increases of 5.5%, 5.2% and 4.8% respectively during March 2006, though Ford is still weak considering last year's poor results.

CSM Worldwide says the trend of increased localization of vehicle production by expatriate auto manufacturers like Toyota, Nissan, Honda and Hyundai-Kia among others will become more prevalent over the next few years. Several factors are behind this increasing trend, but two key dynamics are at play in particular: overseas-based manufacturers moving toward building what they sell in the same region, and using North American assembly as a currency hedge.

Perhaps surprisingly given the general migration of automotive production to low-cost regions, these manufacturers are also looking to North America as an export base to serve other markets. Honda will begin exporting the Ohio-built Acura TL saloon to Chinam and Nissan will export the Mexican-made Versa/Tiida small car to several export markets.

GM and DaimlerChrysler are said to be evaluating plans to exploit their North American operations more fully as an export base, for products such as the Dodge and Jeep brands in Europe and locally-built Opel vehicles for export.

CSM Worldwide (http://www.csmauto.com/ )

Unlike earlier films incorporating metal particles to reflect UV rays, Bekaert says the new Quantum films have none, so maintain radio frequency signals and do not interfere with car tuner reception or GPS.

The new film rejects almost 100 percent of ultraviolet light, is said to help to significantly reduce premature fading and disintegration of the car's interior and offers scratch-resistant coating for normal cleaning, and dye-free composition for optical clarity.

Bekaert developed the Quantum Mega Performance products at its facilities in the USA and Belgium. The company is headquartered in Belgium, employs 16 400 people and has a presence in 120 countries, generating sales of €2.7 billion.

(http://www.bekaert.com/)

Magna Steyr, the contract vehicle assembly part of Magna International, has announced the creation of new processes for the exchange of automotive design information between customers and suppliers. The processes, based on a mix of three industry standards, as well as the use of Service-Oriented Architecture (SOA) and technology from systems firms PROSTEP and IBM, are said to have already demonstrated their abilities to lower costs.

Until the development of the new processes, Magna Steyr’s data exchange methodologies had to be tailored for each OEM client. The plurality of data formats and applications involved in such exchanges prevented the automation of data-exchange processes, forcing the use of error-prone manual practices.

"We had a huge challenge, since working with the world's leading automakers means we must rely upon vast amounts of data that historically has been exchanged using proprietary interfaces and partly manual processes," said Helmut Ritter, Magna Steyr’s chief engineer for information management engineering. "The dramatic reduction in development times throughout the automotive industry now makes it essential for the development partner to connect quickly and efficiently to any needed PLM system landscape."

The solution pioneered by Magna Steyr in collaboration with PROSTEP and IBM is based on the adoption of three industry standards: STEP (Standard for Exchange of Product Model Data), PLM Services (Product Lifecycle Management Services) and WS-BPEL (Business Process Execution Language for Web Services).

Recognized by the International Standards Organisation (ISO), STEP facilitates the exchange of design information from multiple and diverse sources.

To define universal access interfaces to data represented in the STEP formats, Magna Steyr called upon interfaces recently defined by the ProSTEP iViP association, whose members include automotive OEMs and software suppliers. The ProSTEP iViP association played a key role in defining the PLM Services interfaces, leading to a new standard now released in its version 1.0 by the Object Management Group (OMG). The PLM Services interfaces are now available in a new product called OpenPDM and offered by PROSTEP AG, a PLM integration specialist owned by German car manufacturers and suppliers.

"The OpenPDM software provides a universal access interface to design data stored in any brand of Product Data Management (PDM) system," said Bernd Paetzold, CEO of PROSTEP. "It acts as a universal translator that transforms the many proprietary protocols currently in use around the world into a standard-based universal interface, thus enabling a direct PDM integration. This integration can support internal data exchange processes as well as OEM-supplier collaboration processes."

In addition to providing this interface, the OpenPDM product has the advantage of providing Web services interface support. The OpenPDM software can be deployed in an SOA and is compatible with IBM’s business process integration software, IBM WebSphere Process Server.

SOA is a way of viewing business processes as a set of linked, reusable services; an approach that uses open standards to make a company's business operations more efficient, effective and collaborative.

WebSphere Process Server, a core product in IBM's SOA offering, is a single, integrated platform that combines application server and integration capabilities and supports the latest generation of the Business Process Execution Language for Web Services, WS-BPEL. WS-BPEL, which is recognized by OASIS, is the third of the open standards involved in Magna Steyr’s new exchange processes.

Magna Steyr recently tested its new solution to combine these three standards. Using the OpenPDM product and the IBM WebSphere Process Server platform, it succeeded in completely automating a design data exchange process with an OEM customer.

(www.gridtoday.com, 10 April)

Having previously stated its concerns about the “high level of commercial risk for Pendragon in relation to manufacturer relationships that could lead to a loss of value for Lookers shareholders if they were to exchange their shares in Lookers for shares in Pendragon, the Board of Lookers has just announced that in total, franchises generating £326 million of revenues in the year ended 31 December 2005, representing 26.5% of Lookers' total revenues, are considered to be at risk.

In the event of a change of control of Lookers, the manufacturers represented by these franchises have the right under the existing franchise orother agreements to terminate their agreements, or to require the franchise business to be transferred back to the manufacturer.

Lookers says it has already received written notifications from three of its vehicle manufacturer partners stating their intention to discontinue in whole or in part their relationships with Lookers in the event of Lookers being acquired by Pendragon. These operations generated £224 million of revenues in the year ended 31 December 2005, representing 18.2% of Lookers' total revenues.

The Board of Lookers will be writing to shareholders next week to explain its reasons for recommending rejection of this all share offer from Pendragon. Shareholders are urged to take no action before receiving the document to be sent to Lookers shareholders which will be posted by no later than 20 April 2006.

General Motors has confirmed that it will sell its 7.9 percent equity stake in Isuzu Motors Ltd. The commercial partnership between GM and Isuzu will continue. The Isuzu shares held by GM will be sold to Isuzu’s strategic business partners and major shareholders, Mitsubishi Corp., Itochu Corp. and Mizuho Corporate Bank.

GM currently holds a total of 90.09 million Isuzu shares. Based on a selling price of JPY 397 per share, GM expects to realize cash proceeds of about US$300 million, which will be used to support its North American turnaround plan, finance future growth initiatives, strengthen the balance sheet and fund other corporate priorities.

“GM’s 35-year relationship with Isuzu has been strong, and we look forward to our continued partnership,” said Rick Wagoner, GM chairman and chief executive officer. “We will maintain our strategic relationships with Isuzu in the many different areas of cooperation we have established over the years. At the same time, GM will take another step to enhance our liquidity position.”

GM has held an equity stake in Isuzu since 1971, when it purchased approximately 34 percent of the Isuzu shares outstanding. Between 1971 and 1998, GM increased its stake to 49 percent from 34 percent. In 2002 as part of the Isuzu restructuring, GM cancelled shares related to its 49 percent stake and invested fresh capital of $500 million primarily for the purchase of certain strategic commercial assets and for a new equity stake of 12 percent in Isuzu. Between 2002 and 2005 GM's stake in Isuzu was diluted from 12 percent to the current 7.9 percent, due to conversion of Isuzu's convertible bonds.

Over the last 35 years, the companies have been involved in various joint projects in product development, technology, global purchasing and supply chain management, and product distribution. Among the collaborations that will continue are the following:

- Midsize pickup truck assembly and distribution in Asia Pacific, Latin America, Africa, and the Middle East

- Development and manufacturing of diesel engines for passenger cars in Europe

- Development and manufacturing of diesel engines for full-size pickups in the United States

- Commercial vehicle design, engineering and manufacturing.

The sale will be recorded in the second quarter. GM expects a pre-tax gain on the sale of approximately $300 million from the transaction.

"GM has helped us, a domestic truck maker, turn our eyes to the global stage," Isuzu President Yoshinori Ida said. "We're now an international truck maker - that is our biggest asset and we owe that to GM."

The transfer of the Isuzu stake to the three companies of Isuzu’s choice is seen as positive, given their close and long-standing business relationships. Mitsubishi Corp. sells Isuzu trucks in Thailand and Itochu sells them in North America. They both also own preferred shares in the company.

After the transaction, the stakes of Mitsubishi Corp. and Mizuho in Isuzu will each rise to 3.7 percent, while Itochu will own 4.2 percent.

All three of Japan's other major truck manufacturers are now allied with a partner, after Nissan Diesel's link-up with Volvo AB last month. Hino Motors Ltd., part of the Toyota Motor group and which was spun off from Isuzu in 1942, has a broad, non-equity alliance with Scania AB. Mitsubishi Fuso Truck & Bus Corp. is majority-owned by DaimlerChrysler.

The sale of its remaining Isuzu stake follows GM sale last year of its entire 20 percent stake in Subaru parent Fuji Heavy, and its sale of 17 percent of Suzuki’s equity. GM still retains a 3 percent stake in the latter.

US tier one supplier Lear Corporation provided 2006 financial guidance in a presentation at the Morgan Stanley Global Automotive Conference in New York yesterday, saying record worldwide net sales in 2006 of approximately $17.7 billion will reflect primarily the addition of new business globally, offset in part by unfavourable platform mix and the adverse impact of foreign exchange.

Lear anticipates 2006 income before interest, other expense, income taxes, impairments, restructuring costs and other special items (core operating earnings) to be in the range of $400 to $440 million. This compares with $325 million a year ago. Restructuring costs for 2006 are estimated to be in the $120 to $150 million range. Pre-tax income before impairments, restructuring costs and other special items is estimated in the $120 to $160 million range, compared with $97 million last year.

Free cash flow is expected to be positive for the year, in the range of $50 to $100 million, compared with a negative $419 million a year ago. This reflects improved earnings, lower capital spending, reduced tooling and engineering costs and improved net working capital, offset in part by higher cash costs for restructuring. Capital spending in 2006 is estimated at approximately $400 million, down from last year's peak level due primarily to lower launch activity.

Key assumptions underlying Lear's financial outlook include expectations for industry vehicle production of approximately 15.7 million units in North America and 18.8 million units in Europe, both down slightly from 2005. Lear continues to see its top fifteen platforms in North America being down more than the industry average. In addition, Lear is assuming an exchange rate of $1.20/Euro, slightly weaker than a year ago.

Hayes Lemmerz International, Inc.’s financial results for its fiscal year ended January 31, 2006 were in line with guidance the company provided to investors in December 2005; the wheels and components maker reported sales of $2.28 billion, up 6.6% from sales of $2.14 billion in the prior fiscal year. The loss from operations, excluding one-time impairment charges, was $14.9 million, compared to earnings from operations, also excluding one-time impairment charges, of $22.0 million a year earlier.

Adjusted EBITDA for fiscal 2005 was $185.4 million, down from $223.9 million a year earlier. Capital expenditures for the fiscal year were $123.5 million, down from $156.2 million a year earlier.

Hayes Lemmerz reported a net loss of $461.9 million for fiscal 2005, compared to a net loss of $62.3 million for fiscal 2004. The company also reported non-cash charges of approximately $185.5 million for the impairment of goodwill and $195.0 million for the impairment of other long-lived assets. Excluding the one-time impairment charges, the net loss was $81.4 million compared to a $60.1 million net loss a year earlier.

As reported earlier this month, the company has combined its North American Wheel and International Wheel business units, creating a Global Wheel Group, and has consolidated its Suspension Components business unit and its Automotive Brake and Powertrain Components business unit, creating an Automotive Components Group.

The company will close its Huntington, Indiana, aluminium wheel plant in 2006 and reduce employee wage and benefit costs, primarily for its U.S. locations. The company estimates annual savings from these actions will total approximately $35 million.

Approximately 54% of Hayes Lemmerz’s sales are now generated outside North America, with expansions in plants located in the Czech Republic, Brazil, Mexico, Turkey and Thailand. The company secured over $325 million in new and continuing business during fiscal 2005.

Hayes claims to have retained global leadership in steel wheels, and its global aluminium wheel business was up 11% in unit volume in 2005. The U.S. market for aluminium wheels is showing strong demand for large wheels, but flat demand and overcapacity for small wheels, so Hayes Lemmerz has reduced capacity in the U.S. for small wheel production and expanded production of large specialty wheels at its Georgia plant.

The company maintained liquidity at year-end of $124 million through the sale of non-core assets, reducing capital expenditures, reducing inventory and the completion of an accounts receivable financing programme in Germany. The company also recently announced that that it has amended its $625 million senior secured credit facility.

This year Hayes Lemmerz plans to continue its focus on improving free cash flow and reducing capital expenditures, which are targeted at less than $100 million. It expects sales for 2006 to be approximately $2 billion, primarily due to reductions in North American volumes, but expects adjusted EBITDA and free cash flow to improve over 2005.

German tier one supplier Hella KGaA Hueck & Co. says it aims to double its global sales of automotive lighting, electronics and aftermarket products to more than $7 billion and significantly increase its American and Asian business in the next six years. Hella has organized its global business into three divisions: Lighting, Electronics and Aftermarket and Special Equipment. Each of the divisions contributes about one-third of the company's annual sales, currently more than $3.7 billion. Hella's 65 plants all over the world employ 24,000 people, including 2,900 working in research and development.

Jean-Francois Tarabbia, CEO of Hella's Electronics Division, said, "Product innovations, a further push to internationalization of the business, and new areas of management responsibility are key contents of Hella's 'Vision 2012' plan for the future," Tarabbia said. "One of its goals is to achieve a quality standard of only two defects per million parts as well."

Tarabbia added, "Since almost all European automakers are already on Hella's books, we will be focusing our sales efforts in North America, Korea, Japan and China."

Today, almost 85 percent of the German-based company's sales are in Europe. North America contributes about 10 percent and the Asia-Pacific region 5.5 percent.

Tarabbia recently joined the Hella management board and took over management of Hella's electronics division last month. Previously he was COO and head of the body-and-chassis electronics division of Siemens VDO Automotive.

Two new Hella products which will be launched in North America this year are adaptive cruise control and a rear-view camera. Hella also is introducing the industry's first capacitive rain sensor, which can be integrated almost invisibly into the windshield. It combines functions of rain, light, humidity and solar measurement in one device for the first time, thus replacing up to three individual sensors.

In addition, Hella has developed the first ultrasonic-based sensor for measuring oil levels, which can be supplemented by a special chip, referred to as a "tuning fork," which also measures oil condition.

Hella's plans include development networks tied to a central development department in Germany and complemented by regional development centers to support individual target markets. The company also announced a reorganization of its North American operations: Dr. Raymund Heinen has been named president of Hella Lighting and Steve Hubble has been appointed president of Hella Electronics. Both are based in Michigan. Wolfgang Benz continues to head Hella Inc., which is responsible for aftermarket and special equipment business in North America and is based in Atlanta, Georgia.

In an annual automotive report, the Spanish consultancy Gaxa has reported that South Korea overtook Spain last year to take fourth place in the rankings of the world’s vehicle exporting countries. Exporting 2.59m vehicles, South Korea came just behind Germany (3.79m), France (3.84m), and Japan (4.86m). Spain’s 2005 total was 2.25m units, substantially fewer than the 3m approx. achieved in 2003 and 2004. About 80% of Spain’s annual vehicle production is exported, so the impact of falling demand for its output in the rest of Europe is particularly marked – the more so since most models produced in Spain are relatively low-priced, low-margin vehicles.

The Gaxa consultancy suggests that to survive, the Spanish automotive assembly industry will have to produce higher value added vehicles, and participate more in the development of the vehicles it produces.

(El Mundo, 11 April)

Toyota reportedly estimates it achieved a $1.2bn reduction in its global production costs in the financial year ended 31 March, thanks in particular to a new method of developing major component sets such as motors and braking systems. Further cost reductions are expected this year and thereafter, as the same methodology is applied to future model development.

(Wall Street Journal, 10 April)

The used car supermarket Carland has appointed as managing director Ian Allen, formerly rival group Motorhouse 2000’s MD, succeeding Garry Hobson, who has departed to become a regional director for GMAC subsidiary Masterlease. According to Motor Trader, Mr Allen’s initial focus initial focus will be on consolidating Carland’s current used car business, “with a view to moving into the nearly new and new car sales market places in the future.”

The AA British Insurance Premium Index shows that in the last three months competitive pressure has kept car insurance premiums down while home insurance has become more expensive. The average cost of comprehensive car insurance fell by 0.5 per cent, with the average quote for third party, fire and theft car insurance rose by around 1.74 per cent. Comprehensive policies now cost an average of £758.38 a year and third party, fire and theft policies an average £956.88.

The AA also compiles a "shoparound index" of the cheapest policies on the market, which shows that comprehensive car insurance can be purchased for £463.66 a year, with third party fire and theft available from £546.30.

"Competition for comprehensive car insurance remains strong. New channels and insurers are forcing existing providers to increase spending on advertising to maintain market share and this almost exclusively focuses on premiums," said to Kevin Sinclair, managing director of AA Insurance, adding, "I still believe present premiums will prove to be unsustainable and will have to start rising before long.”

(www.myfinances.co.uk)

- Employees of UKI Partnerships, the affinity arm of RBS Insurance, face the threat of redundancy in a review of the company's operations. UKI has not confirmed the number of likely redundancies but confirms it had decided to "review a small number of operational roles." UKI currently employs around 4,000 staff. Its partner portfolio includes Lloyds TSB, Tesco Personal Finance, Help the Aged, Prudential and Nationwide.

DaimlerChrysler expects an improvement in profitability in fiscal year 2006, with continuing increases in operating profit in following years, says Dr. Dieter Zetsche, Chairman of the Board of Management in his speech to shareholders at today’s AGM in Berlin. A detailed earnings forecast for the full year will be presented to coincide with the publication of the company's financial results for the first quarter on April 27, 2006.

The Board of Management initiated the New Management Model at the end of January, presented as a key factor in increasing efficiency. As a result of the implementation of the New Management Model, some 6,000 administrative positions will be cut worldwide. Executives in Germany will be offered severance agreements and early retirement. All of the steps taken regarding employees covered by collective bargaining agreements will be based on the "Safeguarding the Future 2012" agreement that was signed in July 2004.

Zetsche is confident that thanks to current measures to boost productivity and efficiency, the Mercedes Car Group will achieve the planned 7 percent return on sales in 2007. In terms of results, the division achieved the turnaround in the second quarter of 2005. Altogether, the Mercedes Car Group plans to cut 8,500 jobs by the end of September. To date, around 7,800 employees have taken advantage of voluntary severance agreements and early retirement packages.

This year ten new Chrysler Group products will be introduced -- more than ever before in a single calendar year.

In fiscal year 2005, the Commercial Vehicles division launched a new programme in order to translate its size and market position into economies of scale and to substantially increase its profitability.

In January 2006, a new distribution of business operations was confirmed as part of the New Management Model. The division now known as the Truck Group will focus on the truck business. The Vans unit will report to the head of the Mercedes Car Group, and the Bus unit will report to the head of the Truck Group. These measures will help the division come much closer to its goal of posting profits that better reflect its position as Number 1 in terms of sales.

At the Group level, DaimlerChrysler also continued to focus on its automotive core business. As already announced in early April, the company has decided to reduce its 30 percent share in EADS, the European Aeronautic Defence and Space Company, to 22.5 percent. Dieter Zetsche said DaimlerChryslers intended to remain a major shareholder with a stake of at least 15 percent.

As reported earlier this year, DaimlerChrysler’s fiscal 2005 operating profit was €5.2 billion. Excluding the €1.1 billion charges due to restructuring of the business model at smart, the operating profit would have been higher than the previous year's figure of €5.8 billion. Consolidated revenues increased by 5 percent to approximately €150 billion, and the Group's net income also topped the previous year's figure, increasing from €2.5 to €2.8 billion.

However, "we are not satisfied with last year's results level," declares Zetsche. The return on net assets failed to cover the company's capital costs. And DaimlerChrysler is still far from its target of achieving a return on net assets (RoNA) of 10 percent.

DaimlerChrysler is proposing to pay a dividend of €1.50 per share for fiscal year 2005, as it did the previous year. This corresponds to a total dividend sum of €1.5 billion.

- Steven Landry, the CEO of DaimlerChrysler Canada, the country’s second-biggest vehicle manufacturer after GM, expressed concern yesterday over the Canadian government’s negotiations with South Korea on a free trade agreement, saying that federal trade negotiators were ignoring the automotive industry’s concerns and racing to a deal with Korea that could eventually lead to "repercussions" for Canada’s automotive sector.

(Toronto Star, 12 April)

Scot Group Ltd, the Exeter-based independent car rental business, last week acquired Flightform Ltd, the UK master franchise holder for both the Dollar and Thrifty rental brands, for an undisclosed sum, to coincide with the end of their franchise arrangements with Hertz.

Over the last 30 years, Scot Group Ltd has grown from one site in Exeter to 29 sites today across the south of England and East Anglia. As part of the deal, Scot Group Ltd will also be acquiring nine Dollar Thrifty franchised locations. As a result of the acquisition, the Dollar Thrifty network has increased from 70 locations to 90, comprising 40 wholly-owned and 50 franchised outlets, making Dollar Thrifty one of the UK’s largest daily rental networks with a fleet of 16,000 vehicles.

The current board of directors of Thrifty will all be staying on to work with the Scot Group and will now be reporting to Roger Hancock of the Scot Group, who will assume the role of Managing Director, Dollar Thrifty UK.

The Honda Jazz has won the Used Car Of The Year award in the Auto Express Glass's Guide Used Car Honours 2006. Honda picked up five awards; Audi, Kia and Nissan claimed two awards each.

The Honda Jazz has won the Used Car Of The Year award in the Auto Express Glass's Guide Used Car Honours 2006. Honda picked up five awards; Audi, Kia and Nissan claimed two awards each.

After three years and 36,000 miles a Honda Jazz currently has a trade value 61 per cent of its initial purchase price, well ahead of any other rival in the supermini segment.

Honda won in four other categories: Hot Hatch (Civic Type R), Estate (Accord), Compact Family Car (Civic) and Supermini (Jazz). In addition to the awards given to individual vehicles, there was an award for Used Car Scheme of the year, won for the second year running by MINI for its ‘Cherished’ used car programme.

Auto Express Glass’s Guide Used Car Honours evaluation criteria include: depreciation, whole life costs, practicality, reliability, market sentiment, road test reports and owner feedback. EurotaxGlass’s provided data on more than 3,000 cars, from which the judging panel drew up a shortlist.

Full list of winners:

SMALL CAR – Kia Picanto

SUPERMINI – Honda Jazz

COMPACT FAMILY CAR – Honda Civic

FAMILY CAR – Ford Mondeo

COMPACT EXECUTIVE CAR – BMW 3 Series

EXECUTIVE CAR – Audi A6

LARGE EXECUTIVE CAR – Jaguar XJ

ESTATE CAR – Honda Accord

COMPACT MPV – Volkswagen Touran

LARGE MPV – Kia Sedona

SUV – Nissan X-Trail

4x4 OFF-ROADER – Volvo XC90

COUPE – Nissan 350Z

ROADSTER – Mazda MX-5

CABRIOLET – Audi A4 Cabriolet

HOT HATCH – Honda Civic Type R

SPORTING CAR – Porsche 911

USED CAR OF THE YEAR – Honda Jazz

USED CAR SCHEME – MINI Cherished

(www.glass.co.uk)

The Continental GTC, Bentley Motors’ new luxury 2+2 convertible, will be unveiled at the New York International Automobile Show in April 2006. When the convertible goes on sale later this year it will complete the Bentley Continental model range, following the introduction of the Continental GT in 2003 and four-door Continental Flying Spur in 2005. The Continental GTC becomes the second convertible to grace the current Bentley range. It follows the recently announced return of the Azure name for Bentley’s Arnage-derived flagship four-seater convertible.

A survey released this week by Accenture of 500 US motorists found that 84% want their cars outfitted with in-vehicle technologies, including telematics functions such as stolen vehicle tracking and vehicle diagnostics, and that 69% rank safety and security technologies as the most important.

Seven out of 10 respondents (71%) said that they would pay a factory installation fee for safety and security features, and 41% said they are willing to pay more than $50 for factory installation of these features. Almost half (47%) said they are willing to pay a monthly fee for such in-vehicle technologies.

Overall, the survey found a sizeable gap between the technologies that respondents want in their cars and those that they have. For example, while 57% of respondents said they want stolen vehicle tracking, only 9% currently have it. Similarly, while 55% said they want remote door unlock and the same number said they want vehicle diagnostics, only 31% and 23% of respondents, respectively, currently have these technologies. Fifty per cent of respondents said they do not have the in-vehicle technologies they want due to high cost, and 47% said the technology was not available when they purchased their cars.

After safety and security, respondents selected information services, communications and entertainment as the most important features (cited by 15%, 6% and 5%, respectively).

Accenture conducted an online and telephone survey in February 2006 of 500 U.S. consumers between 21 and 70 years of age, all of whom own or lease a car.

(www.accenture.com)

The Spanish automotive supplier sector increased its aggregate turnover by 3.1% in 2005, to €29.7bn, of which €16bn (up 8% y-o-y) was accounted for by exports. Component sales to OEMs established in Spain totalled €10.2bn, down 1.6% y-o-y. Investments by automotive component suppliers last year totalled €1.6bn, and their collective R&D expenditure was €9.6 million. The sector employed 251,035 people at the end of last year.

(El Mundo, 7 April)

MAN Nutzfahrzeuge will use its Indian manufacturing base to address markets outside Europe and North America, Anton Weinmann, chairman of the executive board, MAN Nutzfahrzeuge, has told the Indian Economic Times. Besides manufacturing >16 tonne trucks, MAN’s Force Motors 70:30 trucks JV will house much of MAN’s procurement, worth €3bn in Germany, of which 5% may be sourced from India in the near future.

“We will follow a two-brand strategy,” Abhay N Firodia, the head of Force Motors, said. Full specification trucks will be badged as MAN, while those which do not have the full specs will be badged as Force. The JV will produce fully built-up trucks, initially using MAN’s 7-litre, 330 bhp Euro III-compliant engine before migrating to Euro-1V.

While this engine family is being phased out of Europe, the rest of MAN’s world markets where emission norms match India’s will be supplied from Pithampur, near the Force Motors Indore plant, where the other MAN Indian JV, for buses, will also be located.

The Indian JV targets both the Indian market and export markets including Turkey, North Africa, the Middle East, South East Asia and South Africa, where MAN Nutzfahrzeuge already has a manufacturing presence.

MAN plans to start supplying the same global markets with Indian-manufactured buses, adding Latin America, a low cost market, which according to MAN cannot be supplied even from South Africa, which it describes as a high cost market.

(Economic Times, 11 April)

The Russian GAZ Group is in talks with unnamed CV manufacturers to licence designs to produce light trucks to replace its own GAZel model, according to a senior executive of the company reported by the Russian news agency Novosti on 10 April.

GAZ Group Managing Company General Director Maksim Avdeyev said the group intended to launch the production of a new vehicle starting in 2009, and added that his firm was holding talks with DaimlerChrysler, focusing on engines, as GAZ intended to assemble 12,000 of 55,000 Volga saloons in 2006 using DaimlerChrysler engines.

Vyacheslav Shmatov, director of the Nizhny Novgorod branch of managing company RusPromAvto, which holds a majority stake in GAZ Group, said GAZ intended to raise production, largely of LCVs and medium weight trucks, from 197,000 to 240,000 units a year by 2010.

GAZ is reportedly to invest about 2 billion rubles (about $72 million) in the development of its production facilities. GAZ currently supplies about 200,000 commercial vehicles in Russia and to 29 countries in the former Soviet Union, Eastern Europe, South East Asia, Africa, Latin America, and the Middle East. GAZ

(Novosti news agency, 10 April)

Rolls-Royce Motor Cars has announced that the new extended wheelbase Phantom will be launched in Europe. The car was first seen at the Geneva motor show in 2005, initially available for the Middle and Far Eastern markets. In 2005, just under 800 Phantoms were sold. An extra 250mm has been added to the standard Phantom, behind the B-pillar, to create a long-wheelbase car.

The average three-year-old (’03-plate) used car is now worth £6,750 in the UK, according to Glass’s Used Car Market Index, reporting a further modest improvement in the residual values of three-year-old cars during the first three months of 2006. This was the third successive quarter in which rates of depreciation have eased. Despite the improvement, this figure is still around £275 lower than at the same point last year.

EurotaxGlass’s, the publishers of the report, says values fell by 1.7 per cent, or £125, during the first three months of the year, and predicts a further drop of 1.5 per cent by the end of April, to an average of £6,650.

Alan Cole, Editor at Glass’s Market Intelligence Service, says, “Trade demand has been largely matched by retail demand, with most customers focusing on used cars that they perceive as representing good value for money.” Cole adds that the used car market has been spurred on by a discernable increase in confidence amongst retailers, which was lacking at the end of last year.

The full Glass’s Used Car Market Index full report is free from marketing@eurotaxglass.co.uk.

According to a PricewaterhouseCoopers study quoted in the French daily Les Echos, China, India, Russia and Central and Eastern Europe, which currently account for about 10% of global automotive production capacity, will account for more like a third in four years’ time. Over the coming eight years, the Asia Pacific region should account for 53% of global assembly capacity growth; for 31% in China’s case and 8% in India’s. Including commercial vehicles and minibuses, China’s capacity will reach 10m units by the end of the present decade.

(Les Echos, 7 April)

EU governments are preparing to endorse the European Commission’s transport biofuels plan proposed in February this year, reported Environment Daily last week. The EU energy council is expected to adopt a formal position on the European Commission’s biomass policy plans at a meeting on 8th June. The plan proposes measures to increase use of biomass energy in heating and cooling, electricity production and transport; the European Commission may put forward legislation on transport biofuels, along with renewable heating and cooling fuels, by the end of this year, to complement existing EU rules. Among the conclusions is likely to be an endorsement of changes to EU road fuel standards to enable biofuels to be blended at concentrations of over 5%.

(Source: Environment Daily)

After over five years of legal proceedings, the European Court of Justice has upheld the European Commission’s fine of €35 million against GM Europe subsidiary Opel Netherlands, which it levied after investigation of attempts by the firm to prevent its dealers in The Netherlands from exporting cars to other EU Member States.

(Various Netherlands and US media reports, of 6 April)

- An article in last week’s Automotive News Europe described how franchised car dealers in Europe represented by CECRA described the present block exemption regulation, currently under review by the European Commission, as having failed to move the balance of power from supplier to retailer in the automotive sector.

Dealer gross margins on car sales have declined since the regulation came into force, while training and other overheads have increased, following manufacturers’ demand for higher standards and sales targets from their dealers.

Manufacturers raised franchise standards to close out independent garages from authorised repairer networks – although few independents wished to join their networks.

(Automotive News Europe, 3 April)

The European Commission has published the findings of a study reviewing the enforcement of EU state aid rules at national level – aid rules which often affect automotive manufacturing sector investment.

On the one hand, the study confirms that companies increasingly rely on state aid law to defend themselves before national courts against financial burdens imposed on them by the state. On the other hand, companies rarely use state aid rules as an instrument to challenge the distortion of competition caused by unlawful subsidies granted to competitors.

The study also concludes that Member States should speed up the implementation of the Commission’s recovery decisions. All too often, says the study, excessively long administrative and judicial procedures at national level result in unacceptable delays in the recovery of illegal aid.

(comp-state-aid-enews@cec.eu.int)

The European Commission has decided to send Cyprus a formal request for information concerning the taxation rules applied on the registration of used cars brought into Cyprus from other EU Member States. The rules are applied in a way that may breach the EC Treaty provisions on equal treatment of domestic products and those of other Member States.

The request to Cyprus is in the form of a "letter of formal notice", the first stage of the infringement procedure laid down in Article 226 of the EC Treaty. Cyprus is requested to reply within two months. If the Commission does not receive satisfactory response, it may proceed with the second stage of the said procedure and ultimately bring the case before the Court of Justice.

The European Court of Justice (ECJ) has consistently held that a Member State is not prohibited from levying a vehicle tax such as one on the first registration of a vehicle in that Member State but provided that the tax is in conformity with Article 90 of the EC Treaty. This means that a Member State must not impose any internal tax, directly or indirectly, on the products of other Member States of a kind in excess of that imposed directly or indirectly on similar domestic products.

The ECJ has declared that Article 90 requires a Member State to take an imported second-hand vehicle's actual depreciation into account when calculating registration tax. Otherwise the tax imposed would exceed the residual tax incorporated in the value of similar used vehicles already registered in the national territory.

Under Cypriot law, a tax is due on the first registration of a vehicle in Cyprus. In practice, it concerns all new vehicles and used vehicles, the latter almost exclusively coming from outside Cyprus. The registration tax has not to be paid for second-hand cars already registered in Cyprus. The amount of the tax varies according to the C02 emissions and the age of vehicles.

In order to benefit of the reduction based on C02 emissions, owners have to provide a certificate of conformity that is hardly possible to be obtained for second-hand vehicles. The Commission has considered that a requirement which contributes to determine the amount of tax but which, for the application of the more favourable tax treatment, cannot be met in most of the cases by goods coming from other Member States, is incompatible with Article 90 of the EC Treaty, since it would result in a higher taxation to the detriment of mainly foreign used cars.

Secondly, the standard way of calculating the amount of the tax according to the age of the vehicle does not allow taking into consideration the real loss of value of the vehicle at the moment of the registration. The consequence is that the tax applied on second hand vehicles coming from another Member State will not reflect, in the majority of the cases, the amount of tax incorporated in similar second hand vehicles already registered in Cyprus.

Finally, the Commission has also found that Cyprus lacks a system which allows the taxpayer to challenge the correctness of the tax due before a national court.

According to the Cypriot legislation, the amount of the tax based on the C02 emissions is calculated as follows: decrease by 15% up to 150 g/km, no reduction between 150 g/km and 275 g/km and an increase for emissions exceeding 275 g/km.

With regard to the amount of the tax based on vehicle age, Cyprus allows a 15% decrease of the amount of tax (for vehicles up to one year old), a decrease by 20% (for vehicles between one and three years old), no decrease in the amount of tax (for vehicles between three and five years old) and an increase of 25% for vehicles over 5 years old.

For information on other EU activities in the field of car taxation see

www.europa.eu.int/comm/taxation_customs/taxation/other_taxes/passenger_car/index_en.htm

Automechanika Gulf, part of the group of automotive aftermarket trade fairs organised by Messe Frankfurt, is set for the Dubai International Exhibition Centre between 28 - 30 May. This year the event will present at least 550 exhibitors, up from over 450 in 2005, attending from more than 40 countries. More than 1,000 product categories will be on show, covering spare parts and garage and body repair equipment.

Figures issued by authorities in Abu Dhabi and Dubai indicate that vehicle and component re-exports now represent one of the Emirates' top three re-export sectors, and that re-exports growth is running at up to 50% p.a. Automotive sales in the Gulf are predicted to be around seven percent higher last year than in 2004, although the exact numbers of cars sold in 2004 is difficult to judge; Auto Strategies International reports that 690,270 CBU units were shipped into the GCC last year.

(www.ameinfo.com, 6 April)

The bankrupt US tier one supplier Meridian Automotive Systems Inc. is in the process of selling its interiors business for $50 million, the company's investment banker Lazard Freres & Co. said yesterday. A letter of intent is in hand from a buyer for the interiors division, which is being sold as Meridian Auto attempts to reorganize in bankruptcy. Collins & Aikman, also in Chapter 11, is also selling its automotive interior fabrics business.

An executive from the bank spoke yesterday at a court hearing where bank creditors were attempting to wrest control of the company, in Chapter 11 protection since a year ago, from its management. Meridian's major banks, who are owed $310 million, object to the company's bid for a third extension of the period during which it alone has the right to propose a Chapter 11 restructuring plan. They content the firm is worth much less than its management’s estimate; Lazard calculates it will be worth $375m after the sale of its interiors business. Meridian has $660 million in debt to reorganize, in addition to its debtor-in-possession borrowing

If Meridian loses its exclusive right to control the course of its bankruptcy case, the outcome for its major customers, GM and Ford, would be uncertain.

(MarketWatch USA, 10 April)

March commercial vehicle registrations of all segments combined were up 6.9% y-o-y to 58,732. YTD CV sales are now up 2.0%, though the rolling year total is down 1.0% to 387,929 units.

“March was a record month for CV registrations, with heavy CVs performing particularly well,” said Christopher Macgowan, SMMT chief executive. 'March's figures meant that total volumes in 2006 have now beaten last year’s record. With many important new models due for launch at the CV show later this month (including Ford’s new Transit and VW’s LT 35 replacement, the Crafter), and big changes to the operating environment imminent, we expect that April figures will be good too.”

Registrations of LCVs to 3.5t were up 1.8% to 87,384 units in the first quarter, and in March itself, up 6.4% or 3,083 units, to 51,467 vehicles. Rolling year registrations were down 2.1% for the 12 months to March at 324,437.

Light van registrations were down 9.4% YTD to 20,769, compared to the same first quarter last year, and down 9.6% to 11,432 units in March alone, from 12,646. The rolling year light van registrations total at 76,838 units has continued to slow since mid-2005.

Medium van registrations were down 3.3% YTD to 8,033 units, but up 14 units in March on last March’s total of 4,309. Rolling year registrations stood at 31,327 in March, up 0.4% on last year.

Heavy vans registrations in the first quarter rose 8.0% to 52,536 units, up 8.0% over the same period in 2005, and for the month increased 12.4% to 31,553 units. The rolling year total for heavy vans increased y-o-y by a modest 0.8% to 197,709.

Truck registrations were up 2.8% YTD, by 379 units to 13,872 compared to 2005. Truck registrations in March itself were at 6,632, up 9.0% y-o-y. Trucks under 15 tonnes GVW were up 1.6% and trucks 15 tonnes and above were up 21.1% in March. Total rigid trucks were up 9.3% YTD at 9,905 units, up 841 units compared to the March 2005 figure. March rigid registrations were up 17.1% or 688 units on the same period last year.

Two-axle 12-15t and four-axle rigids remain strong performers so far in 2006. Conversely, artics were down 10.4% YTD, by 462 units to 3,967. Artic registrations for the month of March were down 6.7% y-o-y. Two- and three-axle artics were down 30.1% and 2.5% respectively for the year to date.

(www.smmt.co.uk)

AES Solutions is to use the forthcoming CV Show to launch a self-contained storage, monitoring, and automated replenishment system for AdBlue, the exhaust treatment additive required for many trucks compliant with Euro 4 emissions standards from this autumn. The firm says its offices and premises are now accredited CarbonNeutral.

(www.advancedemissionsolutions.co.uk)

US wheel manufacturer Hayes Lemmerz International, Inc. has announced a series of actions including the consolidation of its components operations into an Automotive Components Group, and the reduction of its wage and benefit costs

The company had previously announced the strategic realignment of its wheel business into a Global Wheel Group, the rationalization of its aluminium wheel manufacturing capacity in the US, and the amendment of its $625 million secured credit facility.

The company is consolidating its Suspension Components business unit and its Automotive Brake and Powertrain Components business unit, creating an Automotive Components Group, thus losing approximately 45 employees and reducing related costs. Hayes Lemmerz has appointed Daniel M. Sandberg to the new position of President of the Automotive Components Group; he had been President of the Automotive Brake and Powertrain Components business unit.

The company is reducing base pay up to 7.5% for its U.S. employees, 10% for the company's president and CEO and 20% for the directors; temporarily suspending company contributions to employee benefits, and restructuring the company's short term incentive compensation plans for hourly and salaried employees.

Hayes Lemmerz expects the combined cost savings from all of the restructuring, including the wage and benefit reductions, to generate annual cost savings of at least $35 million.

Ford Motor Company’s latest proxy statement to the SEC outlines compensation for selected executives, including William Clay Ford, Jr., chairman and chief executive officer. Compensation of Ford executives for 2005 generally consisted of salary and stock-based awards. No bonuses were paid for 2005 under Ford's Annual Incentive Compensation Plan.

Compensation details found in the 2006 proxy statement include:

William Clay Ford, Jr., chairman and chief executive officer, received no cash salary or bonus for 2005. The value of his 2005 compensation totalled $13,298,279. For the third year, Mr. Ford has committed to donate shares representing his performance award to charities of his choice on the date the restrictions lapse in 2007. Mr. Ford also received other compensation totaling $466,755, which included $297,201 in value for required use of the company’s aircraft.

Jim Padilla, president and chief operating officer, who is to retire from the Ford board, earned $1,458,333 in salary. The value of his total 2005 compensation totalled $6,752,248.

Mark Fields, executive vice president and president, The Americas, earned $972,500 in salary. The value of his 2005 compensation totalled $3,209,832.

Don Leclair, executive vice president and chief financial officer, earned $916,667 in salary. The value of his 2005 compensation totalled $1,580,122.

Greg Smith, former vice chairman, earned $880,000 in salary. The value of his 2005 compensation totalled $1,596,949.

Carl E. Reichardt, 74, a board member since 1986, and Marie-Josee Kravis, 56, a board member since 1995, have decided to not stand for re-election at the company's Annual Meeting on May 11. James J. Padilla, 59, has announced his intention to retire from the company effective from July 1, 2006.

Ford’s Board of Directors is accordingly expected from 15 to 12 members.

Japanese manufacturers are expected to produce over half of Britain's cars for the first time this year, going from figures collected by Kyodo News. Nissan, Toyota and Honda will produce around 800,000 of the 1,530,000 cars that the Society of Motor Manufacturers and Traders Ltd forecasts will be assembled in the UK in 2006. According to SMMT, Nissan, Toyota and Honda together produced 48 per cent (766,560) of all Britain's 1,595,697 cars in 2005.

Keith Lewis, media manager for the SMMT, said it was difficult to predict future output levels but, "there's every expectation they could well breach the 50 per cent mark."

All three Japanese producers have confirmed that they will be increasing production this year. Of the other four big producers in Britain, two said they are reducing output in 2006, while one hopes to match 2005 levels and another declined to give forecasts.

Rover's absence from the ranks of Britain's biggest car producers since a year ago - in 2004 it made 106,000 cars - means that it is now more likely that the Japanese companies will make more that half of Britain's cars in 2006.

This year, Nissan expects to continue to be the biggest producer with 320,000 cars. The Sunderland plant will also be making the new small car, Note, and four-wheel drive Qashqai model, which could see output rise to 400,000 by the end of 2007.

Toyota said production capacity at its Burnaston plant is 285,000 cars and it "expects to reach capacity" in 2006. Honda expects to produce around 195,000 cars.

BMW, which produces the Mini at Oxford, was in third place last year. Production there will dip slightly to 180,000 from 200,000 in 2005, due to plant developments designed to increased production in the long term. Vauxhall, part of General Motors Corp, said it couldn't give any forecasts.

A spokesman for Land Rover, which came sixth in 2005, said his company will "probably be producing not less than last year (176,000)."

And a spokesman for PSA Peugeot Citroen, which produces the 206 hatchback in Coventry, said production is expected to be 109,000 cars in 2006, down 18,000 on 2005.

(Kyodo News agency, 10 April)

It is understood by The Independent newspaper that Nanjing Automotive Corporation (NAC) will ask the British Government for between £10m and £50m in state aid when it submits its final business plan for the West Midlands site next month.

Wang Yaoping, the legal and commercial director for NAC in the UK, confirmed to the paper that car production would re-start next year as promised, regardless of any government assistance, but at a scaled back volume of output and employment subject to government funding.

NAC, which bought the failed car maker MG Rover for £53m last July, reportedly needs £50m to re-start MG TF roadster production at Longbridge at a rate of around 1,000 units a year, and Mr Wang admitted for the first time in talking to the Independent that this business plan assumed the Government will provide a significant amount of financial support.

(The Independent, 10 April)

SAIC subsidiary Shanghai Motor Manufacturing, China’s largest car manufacturer, will export vehicles to Europe under its own brand next year, some of them incorporating the designs of MG Rover cars, the FT has reported.

SAIC Motor has announced a plan to produce 120,000 of its own vehicles and 170,000 engine sets per year initially, with capacity expected to reach 300,000 vehicles by 2010. It aims to launch more than 30 models by 2010 and expects its passenger cars to sell for Rmb65,000-Rmb300,000.

Europe appeared to be the most likely export market for now but future sales to South America were also being considered, company representatives said.

The company, founded with an initial capital of around Rmb3.7bn in February, is building manufacturing bases in Shanghai and Yizheng. It will receive an additional Rmb10bn from its state-owned parent Shanghai Automotive Industry Corporation (SAIC) within the next four years.

SAIC has yet to settle a dispute with its smaller rival Nanjing Automobile Corp., the buyer of MG Rover assets and the MG brand, over the two firms’ respective patent rights to MG Rover technology. Nanjing is reportedly to begin production of the MG ZT saloon in China next year, while SAIC, won Chinese government permission to start building the almost-identical Rover 75 saloon later this year. SAIC officials said on Monday they were still unsure what exact assets and rights Nanjing Auto acquired last year, says the FT.

(www.ft.com, 10 April)

The US and EU delegations to the World Trade Organisation, which both recently filed formal complaints to the WTO accusing China of imposing illegal tariffs on imports of vehicle components for use in Chinese car assembly plants, have now heard from China's ambassador to the World Trade Organization that Beijing has accepted their requests for a meeting.

On Friday 7 April a U.S. District Court judge refused General Motors’ motion to dismiss a lawsuit which claimed that the company and its pension fund administrators had failed in their responsibility to manage its retirement funds prudently by holding too much of them in GM stock.

The case involves two General Motors ERISA Plans -- the Personal Savings Plan for Hourly Employees, and the Savings-Stock Purchased Program for Salaried Employees -- both holding large amounts of GM stock. The suit claims the defendants put the interests of GM ahead of the interests of the plan participants by continuing to offer GM stock as an investment option, matching employee contributions in GM stock and failing to diversify the stock fund when it was clear GM stock was not a prudent investment.

According to the suit, the members of the investment fund committee were also responsible for overseeing the company’s ‘horribly under-funded’ defined-benefit pension and healthcare plans.

(www.hagens-berman.com/)

General Motors Corp. has agreed to cooperate with unsecured creditors of Delphi Corp. that are “looking to challenge GM if the automaker attempts to seize big payouts from a restructured Delphi”, lawyers involved are reported to have said on 7 April.

Delphi's unsecured creditors committee, which includes representatives from companies including EDS and GE, wants GM to provide it with various documents so that creditors can examine any claims GM has made or makes on Delphi's assets. GM and the committee have reportedly reached an agreement in which GM will cooperate with the committee so long as the parties can agree to the scope and other terms of the creditors' inquiry.

Among other concerns, Delphi creditors were said to be worried that GM’s agreement to fund labour cost reduction plans to aid Delphi would allow GM to claim some reimbursement at the expense of other creditors.

Meanwhile, the Detroit News reported on 8 April that the judge in charge of Delphi’s Chapter 11 bankruptcy case had given permission for Delphi to offer as many as 13,000 productive workers early retirement incentives of $35,000, these sums being funded by GM.

(Detroit News, 8 April)

A new V8 diesel engine at Ford's Dagenham Diesel Centre that entered series production on 7 April was exclusively engineered and produced at the plant. Applications for the twin-turbo 3.6-litre V8 power unit will be announced later this year, together with further technical details.

More than £12.2 million has been invested in the development and manufacture of the V8, bringing the total spent at Dagenham to £644.2 million since it became Ford's diesel centre.

Phil Lake, Ford's chief diesel engineer, said: "This new V8 engine underlines Ford Motor Company's commitment to engineering and manufacturing in the UK. It is a credit to Dagenham where employees have embraced their role as diesel specialists – engineering and producing advanced quality engines."

The V8 will be built on the same production line which has turned out 110,000 examples of Dagenham's 2.7-litre V6 diesel engines for Jaguar, Land Rover and PSA Peugeot Citroën. Both V6 and V8 engine blocks are loaded onto cradles prior to assembly, which enable operators and the line itself to switch between the different units seamlessly.

The new V8 boasts a power output of over 270PS and develops up to 640Nm of torque. Dagenham Diesel Centre is gearing up to production volumes of up to 25,000 units a year. The cylinder heads for the V8 will be machined in Dagenham's adjacent original engine plant, where V6 machining already takes place. Both engines are made from compacted graphite iron.

2,350 engineers and production operators are employed at Dagenham, where 700,000 engines will be produced this year. Further new business for Dagenham assembling 1.4 and 1.6 diesel engines will take the site’s output beyond a million units per annum from early next year. Dagenham is now the source for half of Ford Motor Company's diesel engine requirements globally. Around one in four engines in Ford Motor Company vehicles worldwide were built in Britain – assembled either at Dagenham or at the Bridgend engine plant in South Wales.

- Ford’s Genk plant in Belgium begins production of the new Galaxy seven-seater MPV today, 10 April. Also assembling the new S-Max derivative of the same platform, Genk is expected to build up to output of over 500 units a day by the summer of this year. Next year, the addition of the revised Mondeo model is planned to raise Genk output to around 1,170 units a day.

(De Standaard, 6 April)

Honda Logistics Centre (UK) Ltd opened a new £24 million logistics operation in Swindon on 7 April, to supply parts to Honda’s UK car, motorcycle and power equipment networks.

Employing 106 people, the centre is adjacent to Honda’s UK and European car manufacturing facility where Honda manufactures Civic and CR-V models. The new building employs 106 and its partners and houses a Honda European Engine Centre sales and training facility.

The new centre was designed and built by ProLogis, the largest warehouse developer in Europe, with support from Norwest Holst.

The Motorsport Industry Association says it has agreed to organise a conference on sourcing and supply in a global marketplace in the sector. Among other things, it will address:

- The supply of components to emerging markets such as China and India

- The sourcing of added value products from innovative countries such as Russia, South Africa, South America, Israel

- Engaging with the required technology

- Embracing today’s ‘just in time’ culture

- Exchanging knowledge and experience

The conference will be held later this year at a date yet to be confirmed. For further details, contact Olivia Harper at olivia.harper@the-mia.com or by ringing 02476 692600.

SEAT UK has announced that Mark McKenna, formerly head of marketing, is to become its new Head of Operations with effect from today, 10th April. McKenna takes over from Iain Carmichael who is moving to fellow VW group brand Audi to head up its UK fleet sales department. As head of operations, Mark McKenna will be responsible for the management and development of the 117-strong SEAT UK Dealer network, as well as the brand’s supply and logistics.

The rolling year bus and coach registrations total of 13,021 at the end of March was down 0.8 per cent on the same period last year, while registrations for the month at 2,037 were up 37.4 per cent y-o-y. Coach registrations fell 14.3 per cent to 191 units; all bus segments saw strong growth.

“The good start to 2006 continues, with strong growth in March registration figures, boosting industry expectations of stable result for the year as whole,” said Christopher Macgowan, SMMT chief executive. “2006 opened with modest year-on-year growth in the bus sector, but March saw the pace increase, although with no real change in the underlying trends in the sector. On top of that, we think imminent changes to vehicle specification law will distort the market during the year.”

Light minibus registrations, of vehicles under 3.5 tonnes have picked up well over the last three and six months; up 19.6 and 8.8 per cent respectively. Double-deck bus registrations increased 7.1 and 19.1 per cent for the previous three and six month’s totals.

The rolling year total for double deck buses was down 9.4 per cent to 958 units. Rolling year coach registrations were at 1,061 in March, down 6.3 per cent on the same period last year. The rolling year totals for coaches 3.5 to 16t, and coaches above 16t, were down 11.5 and 4.8 per cent respectively.

(www.smmt.co.uk)

As South Korean prosecutors pursue an investigation into Hyundai Automotive Group's alleged use of slush funds, government data has revealed that the company expanded its reach dramatically over the past year. South Korean government data yesterday showed that 12 new companies came under the Hyundai Automotive group's control, including Hyundai Autonet Co. and Innocean Corp. as it expands into leisure, advertising and medicine.

- Hyundai’s chairman returned to Korean from the US at the weekend; media reported investigators would be likely to seek to interview him over bribery allegations that prompted them to ban his son and other Hyundai executives from foreign travel last week.

(Korea Herald, 10 April)

The Health and Safety Executive (HSE) has been reminding employers that the Control of Noise at Work Regulations 2005 came into force on April 6 replacing the existing Noise at Work Regulations 1989. A communications campaign has been launched to remind people of the simple rules of thumb to see whether the new regulations may apply. If they do – for example, in automotive manufacturing plants or repair shops, employers can get help tackling noise at work through HSE's noise web pages at www.hse.gov.uk/noise.

The Regulations put the emphasis on identifying measures to eliminate or reduce risks from exposure to noise at work rather than simply relying on hearing protection, although this may also be needed in the short term. Employees newly covered by the Regulations are at relatively lower risk, and the employer will need to put in place proportionate noise reduction measures and provide hearing protection on request. The simple rules of thumb that may indicate an employer has a noise problem are:

- You're surrounded by intrusive noise for most of the working day

- You have to raise your voice to be heard by someone just 2 meters away, for at least part of the day

- You use noisy powered tools or machinery for more than 30 minutes a day

- You work in a noisy industry such as construction, road repair, engineering or manufacturing

- Your work causes impacts such as hammering, drop forging, pneumatic impact tools, etc.

HSE has produced a guide to the Regulations and advice for employers to reduce exposure. This can be downloaded from www.hse.gov.uk/pubns/indg362.pdfFor more information about the Regulations and simple steps that can be taken to reduce employee noise exposure visit: www.hse.gov.uk/noise

The European Parliament has voted for the Commission’s directive on mobile air conditioning gases, which will outlaw the use of the current industry-standard cfc from 2011 in vehicles built after that date, and in all vehicles from 2017.

(El Mundo, 7 April)

US tier one supplier Tower Automotive Inc’s CEO Kathleen Ligocki last week that her company, in Chapter 11 bankruptcy protection since February 2005, was setting a deadline of 1 May to conclude negotiations on labour cost reductions with unions that have so far lasted four months without result. Following Delphi’s example of a couple of months ago, Tower may seek court approval to have its existing labour contracts declared void.

Tower has been seeking wage cuts of up to 23% to establish its North American operations on a commercial sustainable footing, but the UAW, the International Union of Electrical Workers-Communications Workers of America and the United Steelworkers of America have all threatened industrial action if Tower does petition the court as threatened.

(Chicago Tribune, 6 April)

Collins & Aikman Corp. will exit the automotive fabrics business, affecting about 1,200 employees at three US plants, in North Carolina and Texas. During the exit process, the company will continue to evaluate the potential sale of certain elements of its fabrics business to interested parties.

Fuel Parts, a UK aftermarket supplier of fuel and exhaust systems, has launched a series of new initiatives to assist motor factors and garages with the new legislation surrounding the sale and installation of catalytic converters.

The new legislation – known as R103 – stipulates that from 1 June 2006, all catalysts sold must adhere to one of three requirements. Vehicles registered after 1 January 2001 must be fitted with ‘type approved’ cats, meaning that they have been tested and certified to meet OE standards. Vehicles registered before 1 Jan 2001 do not need a type-approved catalyst, but any other type must feature a label stating they are illegal for use on vehicles registered after this date.

It is only permissible to sell and fit non type-approved cats to vehicles registered after 1 January 2001 provided that the catalyst was developed before 31 October 2002.

To help assist understanding of the new legislation at garage and motor factor level, Fuel Parts UK has introduced a ‘traffic light’ labelling system, and set up an independent non-branded website – www.r103.info - allowing customers to find out more about the new legislation and, key in any part number to view its type approval certificate.

Fuel Parts offers more than 620 type-approved cats, and says all future development at the company will be focused on this area.

The seasonally adjusted annualised selling rate for March stood at 14.8m units a year, the incentive spike seen a year earlier not so evident one year on, reported analyst and forecaster J.D. Power-LMC today. The selling rate in Germany picked up, though the company's analyst says it could still be considered artificially low, given short-term factors holding back registrations.

While registrations in Western Europe for March were up well year-on-year, the picture is slightly different when accounting for the extra working days in the most recent month (Easter falling later this year). In the face of strikes and bad weather, the German market might be considered as performing relatively well. French sales appear less incentive-driven so far this year than last with this, and the Spanish market, posting reasonable performances.

In the UK, March, an important month owing to it being one of the two months of the year in which there is a registration plate change, registered a selling rate of 2.44m units/year. Year-on-year, the monthly registration total was lower even before adjusting for the extra working days, with business (as opposed to private) the reason for this year-on-year March fall. Manufacturers were keen to stimulate the market through incentives in a key month in the UK, but with the market unable to break the 2.45mn units/year selling rate, this is somewhat a concern. JD Power-LMC is maintaining its expectation of 4-5% contraction in the market this year.

Source: Jonathon Poskitt (jposkitt@lmc.co.uk , Tel. +44-1865-207052)