Industry News
Week Commencing 12th December 2005
16th December 2005
15th December 2005
14th December 2005
13th December 2005
12th December 2005
LDV expected to go into administration today
A statement is awaited later today from Sun Capital Partners, the potential investors in British LCV manufacturer LDV, whose chief executive Allan Amey, and his advisers spent yesterday in talks in London with the American private equity group. The future of the firm and its creditors this morning awaited a mid-day court hearing, with administration reported to be a likely outcome.
Reports of financial problems had been raised when LDV suspended production earlier this month to ‘rebalance’ inventory levels; output had not been restarted since.
LDV - the former van subsidiary of British Leyland, then Leyland DAF - has been owned by its management, its 1,200-strong workforce and investors since 1993. Refinancing was provided two years ago by European Acquisitions Capital, Barings England Growth Fund and its original MBO backer, 3i, when LDV acquired the assembly equipment for its Maxus van from Poland, where the company had been the vehicle’s development partner with the now defunct Daewoo Motor.
LDV produces some 12,000 vans and minibuses per annum, and in November announced its expectations of expanding production with two new derivatives of its Maxus large van range towards the end of 2006. It was reported at the beginning of this week that LDV was seeking a fresh source of finance.
European new car registrations down 2.8 per cent in November
Total new passenger car registrations in Europe (EU-23 + EFTA) in November 2005 amounted to 1,168,628 units, a year-on-year fall of 2.8%. The number of working days was substantially the same as a year earlier (only Poland had one extra trading day).
Cumulative figures for the first 11 months of the year show a marginal decline for total Europe (-0.5%) and a slight increase of +0.1% in the EU-15. With regard to national situations, Italy (+3.1%) was the only country among the main five to post increases, while France (-2.1%), Germany (-3.4%), Spain (-4%) and the United Kingdom (-7.9%) ended the month with a loss.
Another five countries of the EU-15 posted losses, ranging from –3.8% in Ireland to –13% in Greece, while another five countries experienced growth, with increases ranging from +7.4% in Denmark to +1.3% in Luxembourg. EFTA countries showed a decrease of –5.4%, while new EU Member States ended the month with a loss of –4.5%, with only the three Baltic countries showing growth.
Cumulative figures for the EU-23 see 14 countries posting growth, ranging from +48.4% in Latvia to +0.9% in Spain, while the remaining 9 report losses, ranging from –0.1% in Belgium to –26.3% in Poland. While the EU- 15 (+0.1%) remain on a slightly positive trend, EFTA countries (-1.7%) and new Member States (-10.5%) continue to post year-to-date losses.
Full-year European 2004 registrations data by manufacturer and market and January-October data are posted on www.acea.be.
Sergio Marchionne elected as ACEA’s 2006 President
Sergio Marchionne, CEO of FIAT S.p.A., has been elected President of the European Automobile Manufacturers Association for the year 2006. The appointment was made at the last ACEA Board of Directors meeting, held in Brussels on 2nd December 2005, and will be effective on 1st January 2006, when Mr. Marchionne will take over from the current ACEA President, Bernd Pischetsrieder (Volkswagen AG).
Mr. Marchionne said, “The next few years will be crucial for the European automotive industry. There are a number of issues facing our industry, but the real overarching challenge is the competitiveness of the European automotive sector. We will work hard to implement the outcome of the CARS 21 initiative, which has the ambitious but necessary objective to build a competitive automotive regulatory system for the 21st century.”
A dual Italian and Canadian citizen, Mr Marchionne, aged 53, is a barrister and a solicitor by background. He started his professional career in Canada in 1983, as a chartered accountant and tax specialist for Deloitte & Touche. In February 2002 he became CEO of the Fiat quality assurance subsidiary SGS, joined the board of FIAT S.p.A. in May 2003 and was appointed CEO in June 2004. Since February 2005 he has also served as CEO of Fiat Auto. He is currently a board member of Serono SA and Vice Chairman of SGS Group.
- ACEA represents the thirteen major European car, truck and bus manufacturers. All ACEA member companies are have integrated automobile operations (research, design, development, production and sales) in the EU, where they produce around 17 million vehicles per year and provide direct employment to 1.2 million people. ACEA members are: BMW Group, DAF Trucks, DaimlerChrysler, FIAT, Ford of Europe, General Motors Europe, MAN Nutzfahrzeuge, Porsche, PSA Peugeot Citroën, Renault, Scania, Volkswagen, Volvo Trucks.
Margaret Beckett welcomes EU CARS 21 report
Environment Secretary Margaret Beckett has welcomed the outcome of the final High-Level meeting of the CARS 21 group (Competitive Automotive Regulatory Systems for the 21st century), on which she represented the British Government, as another positive step in the process of improving the regulatory environment in the EU.
The group has published a report and roadmap containing a series of recommendations on improving the competitiveness of the automotive sector in the EU.
Mrs Beckett said: "The UK Presidency fully supports this initiative by the Commission, which demonstrates that better regulation and competitiveness principles can be fully compatible with environmental and social objectives. We look forward to working with the Commission and other stakeholders in taking these actions forward.
“Next year the European Commission will publish a communication, setting out how they intend to take forward the actions from the report and roadmap. There will also be a streamlined annual monitoring process and a major review of the roadmap in 2009. This will help ensure that the work of CARS 21 is translated into real action.”
Closure of Yes Car Credit will cost Universal Salvage plc £350,000
Following the announcement on 14 December of the immediate closure of its Yes Car Credit division by Provident Financial plc, the salvage and auction group Universal Salvage plc said it expected the decision to reduce its profit base by approximately £350,000 in the year to 29 April 2006. In the light of this, Universal “will be immediately reviewing its cost base to minimise the impact of this change”.
Universal’s preliminary results for the year to 30 April 2005 showed turnover of £49.7m, and a reduced operating lost before exceptional items of £1.1m. After exceptional charges and profits on fixed asset disposals, Universal recorded a pre-tax profit of £1.5m.
Ford caught in cross-fire from US conservative and gay lobbies
This week, the leadership of the National Gay & Lesbian Chamber of Commerce sent a scathing letter to Ford CEO Bill Ford, Jr. in reponse to statements that the company was withdrawing all advertising from gay-oriented media. "After years of cultivating relationships, advertising and taking money from LGBT families that supported your company through the purchase of Ford family vehicles, your recent actions are nothing short of shameful," wrote NGLCC co-founders Chance Mitchell and Justin Nelson.
Ford responded by writing to gay and lesbian groups saying it would resume buying corporate ads in gay media, featuring all eight of the company's brands. (Previously only Jaguar, Land Rover and Volvo ran ads in US gay publications).
In turn, the conservative American Family Association said yesterday that it will consider reinstating the boycott against Ford Motor Co. it announced earlier this year.
Jaguar shows armoured XJ LWB at Middle East International Motor Show
Jaguar Cars has chosen the Middle East International Motor Show for the worldwide launch of its armoured XJ Long Wheelbase, the company's first ever armoured passenger vehicle. From the exterior the car is virtually identical to the standard XJ, but is armoured to European standard EN1063 levels BR5 & BR6, featuring modifications such as bullet-resistant laminated glazing, underbody protection, steel-armouring and run flat tyres.
Its chassis has been extensively adapted to compensate for additional weight and a potentially more aggressive driving style with reinforced springs and dampers. A re-tuned variable assisted steering system (VAPS) with an increased pressure flow power steering pump re-aligns the increased mass of the armoured vehicle to the steering effort inputs of the driver.
The car is also fitted with opposed 6 piston alcon mono-block brake callipers to the front of the vehicle and 4 piston alcon mono-block callipers to the rear, along with the performance friction material brake pads and larger ventilated brake discs to substantially increase braking performance. Original air suspension has been replaced with passive suspension to account for the additional mass. The vehicle is equipped with specially strengthened and tuned Bilstein B46 dampers and bespoke.
Bullet resistant glazing is designed to withstand a comprehensive range of hand guns and assault rifles. The armoured body shell is reinforced with ballistic resistant steel and underfloor protection is provided by high-tech Kevlar fibre material.
The Armoured XJ LWB offers protection against high velocity assault rifle rounds and also side blast with the overall design preventing any penetration of the passenger cell by shrapnel or blast fragments.
Development work on the Armoured XJ LWB was carried out by Jaguar Special Vehicle Operations working with Centigon, an Armor Holdings group company.
Swedish Govt authorises off-road Volvo Truck tests with drunk drivers
Volvo Trucks has received a special dispensation from Sweden’s Road Traffic Act to test new technology using tired drivers and drivers under the influence of alcohol at Volvo's proving ground in Hällered, outside Borås in Sweden.
The trials, which are scheduled to take place during the first half of 2006, will encompass a total of a dozen drivers, in different scenarios involving alcohol influence and tiredness. Recently Volvo Trucks also participated in an EU seminar in Brussels that studied the fitting of alco-locks in vehicles, initiated by Swedish Infrastructure Minister Ulrica Messing.
Swedish sales of the alco-lock system rose sharply this year; more than 5,000 buses and trucks in Sweden are now equipped with an alco-lock.
‘zaZen’ Rinspeed-BayerMaterialScience prototype will show plastics innovations at Geneva
Swiss automotive design company Rinspeed and Bayer MaterialScience have been working together on a new concept car which as its name hints, “will point the way to enlightenment for future generations of automobiles”.
Visitors looking at the car at next February’s Geneva Salon de l’Automobile will see that a conspicuously large third brake light shines out of what looks like a floating, transparent teardrop roof. The technical distinction of the car's design is that the rear window has been turned into a luminous holographic area.
The Geneva world premiere of the "zaZen", with its holographic brake light and single-section roof dome made of Makrolon polycarbonate, will “mark the beginning of a new era in lighting technology in vehicle design”, according to Ian Paterson, the Bayer MaterialScience director responsible.
The material can be made non-transparent at the press of a button to protect the occupants from curious gazes. Because the transparency can simply be switched on and off, it means that any superfluous knobs and displays on the dashboard can be faded out so that the driver can concentrate on what is most important, the speedometer, instead of being bombarded with unnecessary information. Instead of conventional interior upholstery, the za –Zen’s occupants sit in "glass-like" bright orange plastic seat shells.
The car’s mineral-white body colour is achieved through the use of ‘millions’ of Swarovski crystals protected by a self-healing polyurethane clear coat.
The partners besides Rinspeed and Bayer involved in building and designing the "zaZen" are Esoro AG, CW Fahrzeugtechnik, Strähle + Hess GmbH & Co.KG, Recaro GmbH, KW automotive GmbH, Protoscar SA and Sharp Electronics.
(euronext.com)
Automotive sector forecast to drive online advertising growth
JupiterResearch forecasts that spending on online advertising - display and search - in the US will grow at an average annual rate of 10 percent from 2005 to 2010, and will be driven by the automotive, media and entertainment, and financial services industries. The most impressive growth, according to the Jupiter report titled "U.S. Category Advertising Forecast, 2005 to 2010," is expected to come from automotive advertising (at a yearly average of 24 per cent).
Telecoms, media and entertainment, and finance are the current leading online advertising categories and make up nearly 50 per cent of all online display and search advertising spending, according to Jupiter.
(marketingvox.com)
US Collision Industry Conference meeting examines rise in insurance write-offs
The percentage of vehicles being declared a “total loss” is increasing in the US as in the UK – but the causes of this trend are not what always first come to mind, according to a committee of the Collision Industry Conference (CIC) meeting last week.
About 20 per cent of vehicles involved in insurance claimsin the USA are declared total losses each year. Declining used car values – in part because of discounts and incentives being used to sell new cars – are resulting in vehicles more easily reaching total loss thresholds.
The high cost of airbag replacement (and the damage caused by their deployment) is often cited as a leading cause for the rise in total losses, although CCC panelists pointed out that “smarter” airbags now in use should lessen the impact by reducing unnecessary deployments.
Rising returns on salvage are becoming a growing factor in total loss trends; bidding on salvage via the internet has broadened salvage auctions from local markets to national and even international buyers.
Eric Burr, vice president of industry relations for Mitchell International, told the CCC meeting insurers are increasingly relying on “predictive modelling” that may result in repairable vehicles being written off.
“Some of the best and brightest in this industry say we’re moving so fast toward throw-away vehicles that it isn’t even funny,” Lee Petersen, manager of insurance and automotive industry affairs for Chief Automotive Systems, said at the CIC meeting.Las Vegas. “I think this panel was a really good start. But if this trend continues, I’m of the opinion that the problem of the escalating number of totals should be top priority for all of us.”
(Source: Collision Week)
Le Mans Winning Audi Awarded Ecology Prize
The 2005 Le Mans 24 Hour race winning Champion Racing team, based in Pompano Beach, FL has become the recipient of the first Automobile Club de France Ecology Trophy presented by the Automobile Club de l’Ouest (ACO) and the ACF.
The award was created to recognise the Le Mans competitor whose car was deemed to have best preserved the environment based on thermal efficiency and reduced noise level.
Daniel Poissenot, Sports Manager of the Le Mans race organiser the ACO said, “Being the organizer of an international sporting event was not incompatible with the desire to preserve the environment. As these values and preoccupations are shared with the Automobile Club de France, these two bodies decided to collaborate to create the Automobile Club de France Ecology Trophy.”
(Source: ACO)
US suppliers welcome Senate passage of Stop Counterfeiting in Manufactured Goods Act
The “Stop Counterfeiting in Manufactured Goods Act,” S. 1699 which passed the US Senate on November 10 will strengthen US federal laws against product counterfeiting, according to the Motor & Equipment Manufacturers Association (MEMA).
The bill, which would make it illegal to traffic labels or packaging with a counterfeit mark that is likely to deceive or cause confusion in the marketplace, is the companion bill to H.R. 32, also called the “Stop Counterfeiting in Manufactured Goods Act,” which was passed in a unanimous vote by the House of Representatives on May 23.
“MEMA spearheaded this effort from the beginning, supporting both the Senate and House versions from introduction through passage,” said Paul Foley, president of MEMA’s Automotive Aftermarket Suppliers Association and executive director of its Brand Protection Council.
The two bills now go to conference committee for resolution, and then will be passed to the US President for his signature.
KGP reports on 4th International Innovative Transmissions Symposium
Management and technology consultants Knibb Gormezano and Partners have reported on the KGP-sponsored Berlin CTI symposium on future transmissions trends held on 5-7 December, which attracted around 750 delegates. KGP’s powertrain expert, Michael Smith confirms that the messages from speakers and delegates alike almost exactly mirrored the scenarios the firm is depicting to support the case for its new group-sponsored project, due to commence in early 2006, with launch discounts still available for participating companies.
Symposium speakers and delegates expected that growth in the share of automatic transmissions in Europe will accelerate over the next five years.
- For the vehicle manufacturers, CO2 is the dominant driver with massive pressure to avoid or minimise increase in fuel consumption as automatic systems gain market share
- For the consumer, the arrival of DCTs has changed the nature of automatics, offering a sporting image and increased fun for the first time
- Both ATs and CVTs are reacting aggressively to compete with improved responsiveness and performance
- CVTs have an image problem in Europe, but continue to improve and the best are competitive in European conditions
- The development of responsive and sporty automatics will be very effective in persuading European drivers to abandon MTs in favour of automatics
- All the major transmission technologies – ATs, DCTs, CVTs – have considerable potential for improvement. ATs and DCTs are likely to take the largest shares from the MT market, but CVTs will continue to find applications.
- The small car market (B and C Segments) is up for grabs with dry clutch DCTs competing with CVTs and ATs, while 3rd generation AMTs are being developed.
- In the developing Far East markets, there is great potential for DCT and CVT growth, as new manufacturing capacity will be required to meet increasing demand. ATs are likely to take a smaller share of the automatics market than in Europe or North America.
For information on the KGP transmissions project, Tel: 44 (0)1332 856301, or email: consult@kgpauto.com
(www.kgpauto.com)
ITW reports quarterly operating revenues up 9 per cent
Illinois Tool Works Inc. has reported an operating revenue increase of 9 per cent for the three months ended November 30, 2005. Operating revenues for the three month period consisted of 5 per cent growth from base revenues and a 4 per cent increase from acquisitions.
The revenue contribution from currency translation was flat in the period. North American base revenues grew 6 per cent for the three-month period, primarily due to strong end market demand for the company's longer-cycle Specialty Systems products.
International base revenues increased 2 per cent, mainly as a result of ongoing weakness in European end markets. On a manufacturing segment basis, the company's three-month moving average percentage change for operating revenues, comprised of base revenues and acquisitions, is as follows (year-on-year % change for 3 months ended November 30, 2005):
- Engineered Products/North America:+10%
- Engineered Products/International:+6%
- Specialty Systems/North America:+9%
- Specialty Systems/International:+6%
ZF reports 2005 sales up seven per cent
ZF Friedrichshafen AG reports it achieved a worldwide sales increase of 7 percent during 2005 to €10.7 billion, an increase attributed to new developments in driveline and chassis technology, and an improvement in the commercial vehicle and construction machinery markets.
More than 885,000 ZF six-speed automatic transmissions were sold to OEMs, along with 1.35 million units of a new electronic steering system for the Volkswagen Golf and Passat, and more than 1.2 million axle systems were produced for passenger cars.
Personnel changes in Dana Corp’s CV & Off-Highway operations
Dana Corporation has announced two personnel changes in its global commercial vehicle and off-highway businesses. Bernard N. "Nick" Cole, president of Dana's Heavy Vehicle Technologies and Systems Group, has elected to retire at the end of this year. In conjunction with Mr. Cole's retirement, Nick Stanage has been named president, Heavy Vehicle Products. He will continue to lead Dana's commercial vehicle business and will assume overall responsibility for coordination of the company's global off-highway operations.
Mr. Stanage joined Dana in August 2005 as vice president and general manager, Commercial Vehicle Group, after nearly 20 years at Honeywell, Inc., where he most recently served as vice president and general manager of the Engine Systems and Accessories division.
Renault-Nissan Alliance pursues top-three OEM quality ranking
The Renault-Nissan Alliance has set itself the objective of a top-three ranking for quality among its global competitors, as a strategic priority. New standard processes and methods have seen set up under the ‘Renault Production Way’ (SPR), placing a strong
emphasis on personnel responsibility at Renault production plants.
Renault says a number of concrete measures have been taken to enthrone deep-rooted quality as the centrepiece of the Renault manufacturing system: attentive supplier management, fine-tuned operator training, responsive quality leadership at production plants, and systematic application of certain static and dynamic tests on completion of the production process.
Then final vehicle quality is validated by an Alliance-wide scoring system (known as AVES, for Alliance Vehicle Evaluation Standard), examining over 500 criteria. At the same time, Renault says quality improvement at production plants is being driven by customer feedback, input via the dealer network in real time.
- Renault alliance partner Nissan has selected US software supplier UGS to be the provider of the new PLM (product lifecycle management) system that Nissan will deploy to design and build its next generation of vehicles. UGS expects the selection to represent its largest win in 2005. Nissan will use UGS' NX CAD software to digitally design its vehicles on a global basis and UGS' Teamcenter collaborative Product Development Management (cPDM) software to digitally manage product data and enable digital prototyping for all Nissan vehicles.
Lombard Vehicle Management launches fleet insurance scheme
Lombard Vehicle Management is launching a dedicated fleet insurance scheme, Lombard Fleet Insurance, developed in partnership with parent Royal Bank of Scotland's RBS Insurance and providing cover for cars, car-derived vans, and vans and pick-ups up to 3.5 tonnes. As part of the RBS Group Lombard has access to products from fellow RBS subsidiaries Direct Line, Privilege and Churchill.
Gates mounts technical seminar programme for motor factors
Drive belt and tensioner manufacturer Gates’ technical seminar programme for 2006 will focus on changes in drive system technology, improvements in belt design and performance, good engineering practice and inspection procedures, basic diagnostic techniques, the importance of accurate tension, as well as which specialist tools to use and how best to use them. It will also emphasise the need to update information about different system layouts and individual replacement procedures from the various vehicle manufacturers.
Gates believes that garage mechanics should replace all metal parts at every belt change (scheduled or otherwise) as part of good engineering practice.
AMI Semiconductor launches two new sensorless stall detection controller ICs
The Belgian company AMI Semiconductor (AMIS) has expanded its range of single-chip stepper motor driver and controller ICs with two new devices that incorporate sensorless stall detection. The firm says its new ICs will improve reliability and reduce component count, board space, cost, and development time in a wide variety of automotive and industrial motion control applications.
The new AMIS-30623 and AMIS-30624 ICs are designed for remote and multiple axes positioning applications and offer LIN and serial (I2C) interface connectivity, respectively.
Sensorless stall detection functionality allows designers to implement silent yet accurate position calibration and semi-closed loop operation when approaching mechanical end stops.
The integrated 'motion qualification mode' helps application developers to select a robust set of motion parameters such as torque and acceleration-deceleration profile. As a result, noise and vibration at end-stops can be eliminated and motion control accuracy and reliability improved without the need for optical encoders, position sensors or software algorithms.
Target applications for the new devices will include headlamp levelling and swivelling, automotive HVAC designs, surveillance camera control, professional lighting equipment, industrial x-y-z tables, and manufacturing robots.
“The trend for automotive and industrial motion control applications is towards reduced component counts, smaller board space requirements and lower cost,” according to Bart De Cock, product manager of AMI Semiconductor's motor control product line.
(www.electronicstalk.com)
Kolbenschmidt Pierburg to buy Mexican pistons business
The Mexican group DESC, S.A. de C.V. announced on 13 December it had signed an agreement to sell the assets of the OE division of Pistones Moresa, S.A. de C.V., its piston business, to Kolbenschmidt Pierburg AG. The transaction is expected to close during the first quarter of 2006, and does not include Moresa’s pin and piston aftermarket equipment segments.
Also yesterday, DESC announced the formation of a joint venture between its Automotriz subsidiary and the Basque group CIE Automotive S.A., to produce components and sub-assemblies in the stamping, mechanical, aluminium injection and painting segments for the NAFTA and Central American markets.
DESC is one of the largest industrial groups in Mexico, with 2004 sales of approximately US$ 2 billon and nearly 14,000 employees, active in the automotive, chemicals, food and construction sectors.
Honda shows evolved version of ASIMO robot
A new version of Honda’s ASIMO humanoid robot was revealed yesterday, which can pursue key tasks in a real-life environment and features an advanced level of physical capabilities. The new ASIMO can act in harmony with people – for example, walking with a person while holding hands. It can also give and receive objects, and walk while using a trolley or cart. The development of a ‘total control system’ enables ASIMO to automatically perform a series of everyday human tasks, such as those of an information guide.
ASIMO can now run at a speed of 6km/h and can also run in a circular pattern. The stated goal of Honda’s Research and Development team is to create a truly useful humanoid robot which possesses both intelligence and physical capabilities at a high level. Honda will now continue in its R&D efforts by shifting focus on ASIMIO development to the area of intelligence, ‘which will further enable ASIMO to make comprehensive judgements based on various situations’.
Honda contracts with Autogreen network for ELV processing
Honda (UK) has reached an agreement with Autogreen for the latter to provide End of Life Vehicle (ELV) processing and dismantling services for Honda vehicles under ‘producer pays’ regime introduced with the European End of Life Vehicle Directive.
End of Life vehicles returned to the Autogreen network will be de-polluted in line with DEFRA and DTI Guidelines. Parts and other components will then be removed for recycling and reuse. Honda and Autogreen will work together to recycle, reuse and recover 85 per cent of vehicle weight, leaving only 15 per cent to go to landfill.
Autogreen will also be offering its services to Honda’s production plant at Swindon to ensure the maximum reduction in waste sent to landfill. The Autogreen vehicle treatment network will be in place from 1 January, 2006, as will the commitment to 85 per cent recovery and recycling of the vehicle. The free take-back service will be available at any of Autogreen’s authorised treatment centres from 1 January, 2007.
Britax boasts 77% penetration of Euro NCAP's OE child seat tests
Twelve out of 15 Euro NCAP phase 17 tests of child seats nominated by the vehicle manufacturer in conjunction with the vehicle used Britax car seats, the company has announced. All 12 seats achieved a three out of five star rating or above. Of the 60 cars tested since child protection tests began in November 2003, 77% of car manufacturers have chosen to use a Britax seat.
Investors speculate on Autobacs Seven's interest in Halfords
Accessory chain Halfords’ shares reached a 9-month high yesterday on speculation that the Japanese accessory retailer Autobacs Seven may seek to increase its stake, having bought
11.4m shares, 5% of Halfords’ equity, from CVC Capital Partners earlier this week.
Halfords interim results for the 26 weeks to 30 September 2005 showed revenue up 4.7% to £337.7m, like-for-like sales up 2.6%, and pre-tax profit up 20.6% to £40.4m. Halfords’ stores now number 402, with further expansion planned in the Republic of Ireland.
Founded in 1948, Autobacs Seven now operates over 500 stores, including 11 in Taiwan, Singapore, Thailand, USA, China and France, where the company began a short-lived joint venture with Renault. In 1998, Autobacs began selling used cars, and one month later it announced that it had aligned itself with Tomita Yumekojyo Co., a Kyotobased custom car manufacturer that modifies the exteriors and interiors of 10 different mass-produced cars.
(Autowired, Halfords, Autobacs Seven)
Carcraft Group to launch new car leasing business
Carcraft, the six-outlet used car supermarket chain, is to launch a contract hire and leasing subsidiary in the New Year, reports Motor Trader online. The new business, ‘All-in-One Leasing’, will seek to supply new cars on lease to small- to medium-sized fleet operators and then retail them through its own outlets at the end of the leases.
“We have seen leasing companies set up used car outlets as a means of disposing of end-of-contract cars, but no one has done it in reverse,” said executive director Tony Williams. Carcraft stocks over 8,000 new and used cars at its outlets in Rochdale, Leeds, West Midlands, Newport, Merseyside and Sheffield.
820 jobs lost as Provident Financial closes Yes Car Credit
Provident Financial's loss-making Yes Car Credit business, the UK’s largest used car retailer in terms of outlet numbers, has closed, with the company blaming its failure on "increased competition from motor dealers for sub-prime finance customers, together with regulatory changes that have reduced sales of insurance products”. Both factors have, says Provident, resulted in operating conditions very different from those that prevailed when it acquired the business.
The Yes Car Credit business, which provided used cars and point-of-sale finance to a core customer base of buyers with poor credit histories, has been up for sale for the past three months, but negotiations with a prospective buyer ended unsuccessfully on 9 December, reports Provident. Each of the business’s branches closed as trading in used cars and finance ceased yesterday. Yes Car Credit’s customer receivables, valued at approximately £240 million, will be collected out as they fall due.
Approximately 820 employees, from both branches and head office, will be made redundant. Yes Car Credit is offering employees a redundancy package going beyond normal statutory entitlements, and Chris Johnstone, managing director of Provident’s UK consumer credit division will be leaving the group by mutual agreement when the closure of Yes Car Credit is complete.
Yes Car Credit is expected to post a pre-tax trading loss of about £24m for the current financial year. In 2005, goodwill arising on the acquisition of the business of £91m will be written off by Provident. In addition, exceptional pre-tax cash closure costs of about £30m together with asset write downs of about £20m will be incurred, giving a total exceptional pre-tax loss of approximately £141m.
Provident Financial’s statement added that its insurance division, Provident Insurance, will deliver profits this year of approximately £40m.
New Automotive Academy programme for auto industry managers
In its first week, over 200 executives have signed up to the Automotive Academy's new Business Executive Support Programme for motor industry managers. The distance-learning programme, which is free of charge, uses the 'EduCare' process designed to refresh knowledge of business essentials, boost personal development and help every participating company stay competitive, sustainable and profitable.
The programme has three phases. The first contains six refresher modules, which can be undertaken at home or in the office, often in less than half an hour. The modules – Planning in Business, Leadership, Motivation, Principles of Marketing, Sales Essentials and Customer Service – provide guidance on the '10 most important things you need to know about….' each topic. One module is delivered each month.
This refresher programme is followed by a second phase of self-selected topics taken from a menu of Academy courses covering workplace organisation, statutory regulations, continuous improvement techniques and problem solving. The final 'Business Engine' phase will be a dedicated forum for like-minded executives to discuss best practice and learn from a range of seminars and workshops.
For more information or to register for the Business Executive Support Programme, telephone 01926 436204 or e-mail registrations@debrus.co.uk
Vehicle styling can offset quality deficiencies - A.T. Kearney study
As new vehicle quality rankings converge, styling is emerging as a key differentiator for consumers, according to a recent study management consulting firm A.T. Kearney.
"A clear trend indicates that sales generally increase for vehicles with new or freshened styling. In case after case, this has held true even when quality ratings for these vehicles are less than stellar," said Paul Carrannanto, co-author of the study and a principal at A.T. Kearney. Carrannanto notes that increased sales for vehicles with new styling continue for about two years. After that time period, sales fall off to previous levels and, in some cases, decline even further.
"To maximize consumer interest and subsequent sales, exterior styling should be new or freshened every two to three years," says Carrannanto.
According to Carrannanto, over the past five years, brands with high styling scores have tended to be sales growth leaders in the US market. These included BMW, Lexus, Acura, Nissan, Volvo, Cadillac and Chrysler.
The styling research also revealed that interior design is often more important than exterior styling and may be, in many instances, the key factor in the purchase decision.
The A.T. Kearney study compared information contained in the 2004 J.D. Power Appeal Survey, 2000-2005 J.D. Power Initial Quality Study and the 2000-2004 Ward's North American Vehicle Sales Summary.
(www.atkearney.com/)
Delphi Technologies registers two new Design Methodologies CAD/CAM Patents
Delphi Technologies, Inc., a subsidiary of Delphi Corp., has patented two more standardised 3D CAD software patents, for its horizontal structured manufacturing process model and vertical-to-horizontal conversion process respectively.
R. L. Polk Europe announces management changes
The US-owned automotive information services provider R. L. Polk & Co. has named four new European management appointments: Kendra Rawls is appointed managing director, R. L. Polk Europe; Dominic Clare, director, product strategy, R. L. Polk Europe; Todd Fleischhauer, country director, UK; and Markus Fromgen, country director, Germany.
Rawls joined Polk as general manager, Polk Canada, Inc. (PCI) in 2003. Based in Toronto, she was responsible for all of the operations at PCI including sales, data acquisition and business growth. Previous assignments at Polk include managing director, U.K. Companies and managing director, Germany. Before joining Polk, Rawls spent 13 years in sales and marketing positions with Ford Motor Company, traditionally Polk’s biggest North American customer.
Clare has been with Polk for 16 years holding positions as consultant, general manager at PCI and operations director, R. L. Polk Europe.
Fleischhauer was previously sales director, United Kingdom and general manager, PCI. Prior to joining Polk, he spent 12 years in the Canadian automotive industry working for Ford Motor Company of Canada and DaimlerChrysler Canada.
Fromgen has been with Marketing Systems and Polk for 12 years and has extensive experience in statistics, market research and marketing. He held positions as area manager for Polk Marketing Systems GmbH's automotive aftermarket group and most recently, director of strategic planning for Polk in Germany.
UAW National Ford Council endorses tentative agreement with Ford on health care
The UAW National Ford Council has endorsed the union's tentative agreement with Ford Motor Co. on health care, which remains subject to ratification by active UAW-Ford members and approval by a federal US district court.
UAW President Ron Gettelfinger and Vice President Gerald Bantom, who directs the UAW National Ford Department said the tentative agreement "will play an important role in improving Ford's competitiveness by: reducing Ford's OPEB liabilities; reducing Ford's yearly health care spending, and committing Ford to invest $900 million in product innovation and new technology."
Dana closes three North American Thermal Products plants
Dana Corporation announced this week that it will consolidate the North American operations of its Thermal Products group by mid-2006 to reduce operating and overhead costs. Dana facilities in Danville, Ind.; Sheffield, Pa.; and Burlington, Ont. with a total of 200 people will be closed.
Production from these locations will be moved to Dana plants in St. Clair, Mich., and Cambridge, Ont. The restructuring charges related to these closures are expected to be immaterial. Some staff from Danville, Sheffield, and Burlington will be placed at other Dana facilities.
DaimlerChrysler-Lear price dispute hearing delayed pending efforts to settle
DaimlerChrysler and Lear Corp. were due in court yesterday for a hearing on the former’s lawsuit against Lear, but it was adjourned to 1 February 2006 after both companies requested more time to work out a settlement, report US media.
A temporary restraining order that requires Lear to continue supplying seats and interior trim to DaimlerChrysler will remain in effect. DaimlerChrysler sued Lear earlier this month after Lear had threatened to stop component deliveries unless DaimlerChrysler agreed to price increases to cover higher oil prices affecting its own supplies.
DaimlerChrysler said it would have needed to close 12 North American plants within two days if Lear suspended shipments, resulting in losses of $54 million per day. Two of Lear's Tier 2 suppliers had told the company that they were raising their own prices, and Lear had warned DaimlerChrysler it would pass these increases on after absorbing them for one month.
The supply contract at issue extends through DaimlerChrysler’s 2006 model year production.
DfT wins safety award for motorcycle policies
The Department for Transport (DfT) has been honoured with a Prince Michael Road Safety Award sponsored by the Motorcycle Industry Association (MCI), in recognition of the DfT's measures creating a safer environment for motorcyclists and scooter riders.
The DfT campaign has contributed towards a greater understanding of motorcycle safety in a number of areas, including traffic management, and has contributed towards an encouraging climate of casualty reduction in the UK during 2004 by using a package of initiatives which include:
The Government Advisory Group on Motorcycles’ National Motorcycle Strategy, TV ads, support for The IHIE Motorcycle Guidelines, PTW activity in the Think! Road safety campaign, sponsorship of British Superbikes and support for research into infrastructure traffic management measures.
(Source: Motorcycle Industries Association)
DfT announces more funding and flexibility for local authorities’ road safety plans
More money and more flexibility for local authorities to deliver safety on the roads have been announced by Transport Secretary Alistair Darling. Safety cameras will be looked at as part of overall local road safety plans and the current system of funding them through fines will be ended, to be replaced by a new central fund for road safety of £110m a year, exceeding the £93m currently spent by safety camera partnerships.
This will be in addition to road safety funding allocated through the local transport settlement.
The changes come as an independent four year report show cameras continue to have an important part to play with around 1,745 fewer people killed or seriously injured each year.
Alistair Darling announced:
- The results of the independent 4 year report on cameras which shows a significant reduction in accidents and casualties at camera sites, even when the statistical issue of 'regression to the mean' is included;
- An end to the current system of funding cameras through the fines they issue;
- Increased funding for road safety, with £110 million a year available to local authorities in England;
- New requirements to improve the signposting of cameras;
- A requirement for all local authorities to review the speed limits on their A and B roads by 2011.
A four-year study, prepared by PA Consulting and University College London, has examined over 4,000 camera sites in 38 safety camera partnership areas, covering virtually the whole of Great Britain. The report finds that safety cameras continue to be highly effective in reducing speeding, accidents and casualties at camera sites:
- The number of vehicles exceeding the speed limit fell by 70% at fixed camera sites;
- After allowing for the general trend of improving road safety, there was a 22% reduction in personal injury collisions (PICs) - around 4,230 fewer per annum; and
- Again after allowing for the general trend, there was a 42% reduction in the number of people killed or seriously injured (KSIs) - around 1,745 fewer per annum; this includes over 100 fewer people killed a year;
- On average, the number of killed and seriously injured fell by around 50% at fixed sites, and by around 35% at mobile sites.
The report also considers the "regression-to-mean" effect. This effect arises because the number of injury collisions (PIC) and killed and seriously injured (KSI) in the period before installation of a camera may be higher than the long-term average for that location, and that the number would therefore fall anyway, but concludes that, even after allowing for this finding, safety cameras are achieving substantial and valuable reductions in collisions and casualties.
Audi Unveils Diesel Le Mans Car
Audi AG unveiled its new R10 sports prototype racecar in Paris on Tuesday with which it will attempt to become the first manufacturer to win the Le Mans 24 Hour race with a diesel engined car.
The R10?s new twin turbocharged 5.5-litre V12 TDI engine produces over 650 hp and is claimed to be the world?s most powerful diesel engine on a racetrack.
Dr Martin Winterkorn, Chairman of the Board of Management of Audi AG said, ?With the A8 4.2 TDI quattro, Audi already builds one of the most powerful diesel cars in the world
?The Le Mans project will help our technicians to extract even more from TDI technology. Nowadays, every second Audi is delivered with a TDI engine. We expect that the percentage of diesel engines will be even larger in the future.?
Dr Wolfgang Ullrich, Head of Audi Motorsport said, ?The R10 project is the biggest challenge ever to have been handed to Audi Sport. TDI technology has not been pushed to its limits in motorsport yet. We are the first to confront the challenge. The demands of such a project are accordingly high. Long-term technology partners such as Bosch, Michelin and Shell support us in our quest. Together we have the chance to write new chapters in the history books of motorsport and diesel technology.?
(Source: Audi AG)
Audi to enter V12 diesel car at Le Mans
Audi will become the world’s first car manufacturer to fight for overall victory with its R10 diesel-engined sportscar in the Le Mans 24 Hours race next year. The all-new Audi R10 is powered by a new 5.5-litre, V12 twin-turbo TDI engine, which produces over 650 hp and 1,100 Newton metres of torque.
Equipped with two diesel particulate filters, the engine is said to be so smooth running as to be hardly recognisable as a diesel. The injection pressure exceeds the 1,600 bar achieved in production cars. The usable power band lies between 3,000 and 5,000 rpm - an unusually low rev range for a racing engine. The driver can change gear in the R10 far less often than in the R8 because of the TDI engine’s favourable torque curve.
The car is scheduled to make its race début in the Sebring 12 Hours (USA) next March before contesting the Le Mans race in France on 17-18 June. Audi first raced at Le Mans in 1999 and has won the race five times in the last six years with its Audi R8.
SMMT reports more stability in bus and coach markets
Total bus and coach registrations in Britain were up 21.8 per cent to 1,012 units in November. The total for the rolling year was 12,652 units, up 1.3 per cent on the previous year. Although there has been limited growth in registrations in 2005, volumes have picked up in the second half of the year.
Despite an encouraging month, mini bus registrations to 3.5t are down 18.1 per cent for the rolling year, which stands at 5,508 units and down 18.7 per cent for the year to November.
Single deck buses above 13.0t have been a source of strength in 2005, up 53.3 per cent for the year to November to 115 units. By contrast, double-deck buses have seen a downward trend in registration volumes, although these recovered during the three months to November, up 35.9 per cent.
Coach registrations have been stable for the rolling year, at around 1,100 units and up one per cent.
“It was more of the same for bus and coach registrations in November. After a slow start to the year, registration volumes have been stable recently and should match 2004 volumes,’ said Christopher Macgowan, SMMT chief executive. “But growth in both bus and coach sectors is limited and this trend is expected to continue throughout 2006.”
Delphi names Ernst & Young as auditor for 2006
Delphi Corp. announced yesterday that the audit committee of its Board of Directors had selected Ernst & Young LLP as the company's independent auditors for 2006, effective from,1 January, 2006.
The selection followed a competitive bid process, which included proposals by the four largest accounting firms. Delphi’s audit committee selected Ernst & Young “because of their depth and breadth of experience with Tier 1 automotive suppliers as well as their experience with companies involved in reorganization proceedings”.
Delphi filed a motion on the appointment of Deloitte & Touche for 2005 and plans to file one on the appointment of Ernst & Young for 2006 - both of which are subject to the bankruptcy court approval.
Ward's 10 Best Engines Awards for 2006
The winners of Ward's 10 Best Engines awards for 2006 are (engine and tested vehicle) are:
- Audi AG: 2L FSI turbocharged DOHC I-4 (Audi A3)
- Audi AG: 4.2L DOHC V-8 (Audi S4)
- BMW AG: 3L DOHC I-6 (330i)
- DaimlerChrysler AG: 5.7L Hemi Magnum OHV V-8 (Charger R/T)
- Ford Motor Co.: 4.6L SOHC V-8 (Mustang GT)
- General Motors Corp.: 2L supercharged DOHC I-4 (Chevrolet Cobalt SS)
- General Motors Corp.: 2.8L turbocharged DOHC V-6 (Saab 9-3 Aero)
- Mazda Motor Corp.: 2.3L DISI turbocharged DOHC I-4 (Mazdaspeed 6)
- Nissan Motor Co. Ltd.: 3.5L DOHC V-6 (Infiniti G35 6MT)
- Toyota Motor Corp.: 3.5L DOHC V-6 (Lexus IS 350)
The automotive publisher Ward’s says two important engineering developments are ‘front and center’ for several engines on this year's 10 Best Engines list: direct injection gasoline (DIG) technology and forced induction – systems that allow engineers to develop engines that generate ‘startling power yet return acceptable fuel economy’.
Details of the Ward's 10 Best Engines will be featured in Ward's AutoWorld magazine, Ward's Engine & Vehicle Technology Update newsletter, and the website http://www.wardsauto.com/ in January 2006.
Honda Civic among finalists for 2006 North American Car of the Year
An international group of automotive journalists has selected the Swindon-built Honda Civic, Ford Fusion, and Pontiac Solstice as the finalists for the 2006 North American Car of the Year. The Ford Explorer, Honda Ridgeline and Nissan Xterra were selected as finalists for the 2006 North American Truck of the Year.
Collins & Aikman to close Michigan injection mould tooling facility
Collins & Aikman Corporation plans to close its Premier Tooling operation in Sterling Heights, Michigan by March 31, 2006. The facility currently has approximately 140 employees who fabricate tooling for moulded plastic products.
"Following careful and in-depth evaluation, we have elected to exit the injection mold tooling fabrication portion of the business, which will alleviate difficult capital requirements on our balance sheet and improve our cash flow," said Frank Macher, Collins & Aikman's President and CEO.
Collins & Aikman will transfer equipment to its facilities in New Hampshire and North Carolina where it will continue to fabricate tooling to support its proprietary manufacturing processes in plastics skins, soft trim and flooring. Company officials met on 12 December with employees and customers to announce the planned closure.
Collins & Aikman is a Michigan-based specialist in cockpit modules and automotive floor and acoustic systems and supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. Its UK and other European subsidiary operatins were recently bought out of the group.
(www.collinsaikman.com/)
Bharat Forge acquires majority stake in China FAW Forging
Bharat Forge Limited (BFL) of India has signed a joint venture (JV) contract with China FAW Group to acquire its forging business. The transaction was the largest-ever acquisition in China by an Indian company.
Bharat Forge is the flagship company of the US$1.5 billion Kalyani Group, which has a significant presence in several sectors of the Indian economy and operates manufacturing facilities in nine locations, including Scotland - two in India, three in Germany and one each in Sweden, Scotland, and North America. BFL is now the second largest auto forging company in the world. By joining hands with FAW, BFL instantly becomes the largest auto forging company in China.
UK Presidency reaches political agreement on ‘REACH’ chemicals regulation
At the European Competitiveness Council yesterday, Member States achieved political agreement on REACH, the new chemicals regulation, paving the way for the Council and the European Parliament to deliver a final joint agreement next year.
Lord Sainsbury, who chaired the Council, and Lord Bach, who represented the UK, said in a statement: "REACH will provide the tools necessary to provide detailed information on some 30,000 substances used in the EU, while strengthening the controls covering the substances of most concern. This will allow for a huge leap forward in our awareness of the impact of chemicals and other substances and so ensuring the highest level of protection for European citizens.
"At the same time, the changes made by the Council significantly reduce the burden on SMEs and put further measures in place to encourage data sharing and minimise testing."
The key changes agreed by the Council to the Commission's original REACH proposal are:
Registration:
- Reduced information requirements on 1-10 tonne substances, except for substances presenting clear risks (e.g. classified as dangerous and having a wide dispersive use in consumer applications)
- Increased scope for waiving of tests for 10-100 tonne substances on grounds of minimal exposure
- Requirement for registrants of same substance to share core data, allowing costs to be spread and duplicate testing avoided.
Evaluation:
- New EU chemicals Agency given responsibility for co-ordinating and driving forward dossier and substance evaluation.
Authorisation:
- All authorisations to be subject to review
- Greater encouragement for companies to seek safer alternatives.
Scope:
- Waste exempted entirely from REACH
- Minerals, ores, concentrates and several other substances and categories of substance exempted from registration and evaluation
- Commission to review scope of registration and evaluation within 12 months of REACH implementation.
Downstream chemicals users:
- Potential requirement to produce a chemical safety report limited to substances used by a downstream user above 1 tonne per year.
The only significant difference between the Council and the Parliament at this stage is over authorisation. Both the Council and Parliament have voted to strengthen authorisation, but the Parliament has gone further than the Council by requiring 5 year reviews for all authorisations (the Council proposes that reviews be set on a case-by-case basis), and by providing greater restrictions on the possibility of substances being authorised on the basis of adequate control.
The Council and the European Parliament will now undertake a Second Reading of REACH in 2006, in consultation with the Commission, through which all three institutions will seek to agree a final package.
(DTI, DEFRA)
Inchcape appoints new non-exec; trading conditions ‘in line with expectations’
Inchcape plc, the international automotive services group, will enter a close period on 5 January 2006 ahead of its preliminary results announcement, for the year ending 31 December 2005, on 6 March 2006. Since the board’s last update, issued on 1 August 2005, trading conditions overall have been in line with expectations. Profit before tax and exceptional items are anticipated to be around the current market consensus of £188.5m*, which is itself 11.9% above the equivalent figure for 2004.
- Inchcape has appointed of Karen Guerra, president and chief executive of Colgate Palmolive France S.A as a non-executive director, effective from 1 January 2006.
RMIF-VOSA working group to examine CV distribution and aftersales issues
A new working group to examine issues relevant to commercial vehicle distribution and servicing is to be set up by the Retail Motor Industry Federation (RMIF) and the Vehicle & Operator Services Agency (VOSA). Alistair Manson, head of the RMIF's commercial vehicle division, said: “The RMIF's National Truck Council and VOSA will be joining forces to debate issues and objectives specific to the retail commercial vehicle industry that fall outside the remit of VOSA's existing industry liaison groups.” Topics to be discussed include trade plate usage, annual testing and safety inspection processes.
ReMIT trains a second wave of Ferrari apprentices
A second wave of Retail Motor Industry Training (ReMIT) apprentices are joining the Ferrari Modern Apprenticeship scheme. They will follow a programme of 'on the job' and classroom training delivered by the training arm of the Retail Motor Industry Federation (RMIF) at its training centre in Croydon.
Irish online accessory retailer MicksGarage.ie enters UK market
MicksGarage.ie, Ireland’s only car parts and accessory website, has launched into the UK market. The company, which started trading in Ireland in February 2004, has built up an online listing of over 40,000 products. Product will be dispatched direct to UK customers from six supply depots in Britain.
The company plans significant brand-building activity in the UK during 2006. Ciaran Crean, managing director of MicksGarage said: “The UK represents a logical step for our business. We can deliver our parts to any location in the UK within 48 hours and having researched the existing online car parts market over there, we can offer a greater level of value and service than the existing UK online retailers. All customer interaction will be managed through our telesales centre based here in Ireland.”
Honda plans to launch Acura brand in Japan
Honda Motor is reported to be planning to launch its high-end Acura car brand, deployed so far only in the US, in Japan in 2008. The move follows Toyota’s recent decision to roll out its own Lexus high-end brand in its home market of Japan. Honda is also reported to be planning to review its domestic marketing strategy and consolidate its existing separate dealership networks into a single Honda-branded channel in March 2006.
Verheugen voices EU objection to Chinese JV rules
Speaking at the launch of the CARS 21 High Level Group’s ‘roadmap’ report this week, EU Industry Commissioner Günter Verheugen said he objected to China's requirements that EU manufacturers take part in joint ventures without guarantees that they can control them. He also objected to new Chinese legislation that applies the same import tariffs to automotive parts as to built-up vehicles.
"They want to force European producers to use the local market in China," Verheugen told a news conference. "We have a long list of complaints from the European car manufacturers (about) how in reality market access and fair treatment in China is often neglected."
The European Commission says it will continue its close monitoring of Chinese business and regulatory developments with a view to assessing the possibility of success at an eventual WTO dispute settlement panel if the existing situation does not improve.
(Source: Planet Ark)
Iran’s automotive exports up 60% in April-December
Iran’s vehicle and automotive parts exports from April to December this year were worth US$179 million dollars, 60% more than in the same period last year, a local news agency report reported on 13 December. The country is currently one of the fastest-growing automotive producers outside China and India.
Vehicles and passenger cars worth US$85,833,000 were exported during the period, up 76 per cent compared to the same period of 2004.
Iran’s earnings from built-up car sales to specific national markets, predominantly to neighbouring Syria, are reported to be as follows: Syria, US$55,252,000, Sudan, about US$3 million, Saudi Arabia, US$2,7407,000, Ukraine, US$2,617,000 and Russia, US$2,476,000.
Exports of other vehicles reached US$44,420,000, up 21 percent year on year.
Component exports worth some US$39,704,000 represented 53% growth year on year, mostly to France (PSA has a strong presence in Iran), the Emirates, Saudi Ariabia, Iraq and Turkey.
(www.mehrnews.com, 13 December)
Basque supplier group announces fourth Brazilian acquisition
The CIE Automotive group has acquired the Brazilian lightweight-stamping specialist Jardim Sistemas for €10m, reports the Basque news agency EITB. With a 280-strong workforce, Jardim has sales of around €23.5 million a year.
Apart from lightweight stamping, CIE’s new Jardim Systemas subsidiary specialises in welding, painting and assembly, with clients including Ford, GM and Volkswagen do Brasil. CIE's Brazilian existing Brazilian subsidiaries included Autometal Diadema, Autometal Bahía, Autometal Taubate and Autometal San Bernardo.
Controlled by INSSEC, a sector-based business promotion agency, CIE Automotive recently invested €3 million in a new Chinese factory, scheduled to be operating in the first half of next year. The group is also set to invest €34 million in the Czech Republic, €14 million more than the original allocation, as a result of a recent new contract with Opel for the production of 600,000 rear axles for the Astra, Zafira and Meriva models.
With 30 factories in Europe, Brazil, Mexico and China, CIE is one of the leading multi-technology automotive component supplier groups in Europe today.
(www.eitb24.com,13 December)
S&P cuts GM ratings to 'B/B-3', outlook negative
Standard & Poor's Ratings Services lowered its corporate credit rating on General Motors on 12 December to 'B' from 'BB-' and its short-term rating to 'B-3' from 'B-2' and removed them from CreditWatch, where they were placed on Oct. 3, 2005, with negative implications. The S&P outlook is negative.
(The 'BB/B-1' ratings on General Motors Acceptance Corp. and the 'BBB-/A-3' ratings on Residential Capital Corp. remain on CreditWatch with developing implications, reflecting the potential that GM could sell a controlling interest in GMAC to a highly rated financial institution.) Consolidated debt outstanding totalled $285 billion at 30 September, 2005.
"The downgrade reflects our increased scepticism about GM's ability to turn around the performance of its North American automotive operations," said Standard & Poor's credit analyst Robert Schulz. S&P’s view is that if recent trends persist, GM could ultimately need to restructure its obligations (including its debt and contractual obligations), despite its currently substantial liquidity and management's statements that it has no intention of filing for bankruptcy.
Standard & Poor’s analysis of GM’s North American automotive operations continues:
“GM has suffered meaningful market share erosion in the U.S. this year, despite prior concerted efforts to improve the appeal of its product offerings. At the same time, the company has experienced marked deterioration of its product mix, given precipitous weakening of sales of its midsize and large SUVs, products that had been highly disproportionate contributors to GM's earnings. This product mix deterioration has partly reflected the aging of GM's SUV models, but with SUV demand having plummeted industrywide, particularly during the second half of 2005, it is now dubious whether GM's new models, set to be introduced over the next year, can be counted on to help restore the company's North American operations to profitability.
“In addition, GM is paring the product scope of its brands. The company has also announced recently that it will be undertaking yet another significant round of production capacity cuts and workforce rationalization. But the benefits of such measures could be undermined unless its market share stabilizes without the company's resorting again to ruinous price discounting.
“One recent positive development for GM has been the negotiation of an agreement with the United Auto Workers providing for reduced health care costs. Yet, this agreement (which is pending court approval) will only partly address the competitive disadvantage posed by GM's health care burden. Moreover, cash savings would only be realized beginning in 2008 because GM has agreed to make $2 billion of contributions to a newly formed VEBA trust during 2006 and 2007. It remains to be seen whether GM will be able to garner further meaningful concessions in its 2007 labor negotiations.
“This year has witnessed a stunning collapse of GM's financial performance compared with 2004 and initial expectations for 2005. In light of results through the first nine months of 2005, we believe the full-year net loss of GM's North American operations could approach a massive $5 billion-–before substantial impairment and restructuring charges and that the company's consolidated net loss could total about $3 billion (again before special items). With nine-month 2005 cash outflow from automotive operations a negative $6.6 billion (after capital expenditures, but excluding GMAC), we expect full-year 2005 negative cash flow from automotive operations to be substantial. GMAC's cash generation has only partly mitigated the effect of these losses on GM's liquidity.
“Prospects for GM's automotive operations are clouded. The ratings could be lowered further if we came to expect that GM's substantial cash outflow would continue beyond the next few quarters due to further setbacks, whether GM-specific or stemming from market conditions. Even though the concern over the situation at GM's bankrupt lead supplier, Delphi Corp., was the primary factor behind the rating downgrade of Oct. 10, 2005, events at Delphi could precipitate a further review if GM were to experience severe Delphi-related operational disruptions or if GM agreed to fund a substantial portion of Delphi's restructuring costs. GM's rating could also be jeopardized if the company were to distribute to shareholders a meaningful portion of proceeds generated from the sale of a controlling interest in GMAC.
“GM would need to reverse its current financial and operational trends, and sustain such a reversal, before we would revise its outlook to stable.”
November US production down 1.5% year on year, 14.9% down on October
CSM Worldwide’s December 2005 CSM Automotive Production Barometer covering US light vehicle production is currently available via the CSM Worldwide website: www.csmauto.com/auto-production-barometer.
CSM says the effects from the strong sales pull ahead from this summer's employee discount programmes continues to be felt as sales in November were off 3.00% over last year's results. Strong US production in recent months has finally given way as output slipped -1.40% over last year to a seasonally adjusted rate of 11.37m units in November. Total US light vehicle production recorded 0.90m units for the month, falling -14.90% over last month and down -1.50% over last year's results. U.S. production continues to lag last year's pace, with output down -0.70% at a seasonally adjusted rate of 11.64m units to date.
North American production including Canada and Mexico increased 4.90% year-on-year to a seasonally adjusted 16.45m units in November. Year-to-date, production is at 15.76m units on a seasonally adjusted rate. In view of fears of a potential UAW strike at Delphi, production at GM has been at the highest levels of the year, with November totalling 4.98m units on a seasonally adjusted basis.
Following these strong production months, GM has sufficient inventory - over three month's supply according to Autodata, to weather a possible strike. The production pull-ahead caused by the inventory-depleting employee pricing programmes of the summer and the desire to book revenue will affect 1Q 2006 output as the Traditional Big 3 plan downtime at numerous facilities in North America.
According to Joseph Langley, CSM Worldwide market analyst, commenting on GM’s and Ford’s current troubles, "The U.S. auto industry is far from dead as the Big 3 evolves into the 'New 6' that includes Toyota, Honda and Nissan in addition to General Motors, Ford and DaimlerChrysler. There is simply a shift in the manufacturing landscape in North America that offers numerous growth opportunities in the region, but requires a paradigm shift in the industry. It is this transition over the short-term that will be difficult across many facets of the industry."
As expected, renewed incentive activity among the Traditional Big 3 was implemented in November for the remainder of the year. These new incentive programmes are expected to have a positive impact in December; though not at the levels evidenced by the employee pricing programmes used this summer.
Total North American production for the year is expected to total 15.8m units with the production environment in December exhibiting some weakness as build rates slow and several manufacturers retool in preparation to launch several high volume redesigned models.
CARS 21 High Level Group adopts 10-year-roadmap for a competitive EU car sector
The EU’s CARS 21 High Level Group formally adopted a 10-year roadmap for a competitive car industry yesterday, agreeing on a number of recommendations to make cars cleaner, safer and to simplify the legal environment for EU car makers.
The recommendations aim to enhance the automotive industry’s global competitiveness and employment while sustaining further progress in safety and environmental performance at a price affordable to the consumer. In line with the better regulation principles, this roadmap will provide industry with a predictable regulatory framework for the near future, while it is recognised that it should not stifle discussions on new developments.
In 2006 the European Commission will come forward with proposals on the follow-up to the CARS 21 recommendations. There will be a mid-term review in 2009 in view of the progress made and the technological developments.
The Group has agreed the following recommendations:
1. Simplification and better regulation
The Group has agreed to recommend the replacement of 38 EU directives by UNECE[1] regulations, such as Directive 71/320/EEC on braking, Directive 92/23/EC on tyres and Directive 2001/85/EC on buses and coaches. In addition it has suggested the introduction of self- or virtual testing in areas covered by 25 directives instead of tests performed by a designated technical authority or tests performed on actual vehicles or components.
This substantial simplification effort will contribute to the improvement of the existing regulatory framework while maintaining high standards in the field of environmental protection and road safety.
The group has also proposed a set of better regulation principles. Particular attention was given to the quality of impact assessments for legislative proposals.
2. Promoting the environment
The Group recommends that the Commission brings forward proposals to reduce pollutant emissions from light and heavy duty vehicles. Regarding the reduction of CO2 emissions from cars, CARS 21 agrees that the responsibility for CO2 reductions from the road transport sector cannot rest with the automotive industry alone.
The Group therefore endorses an integrated approach to reach the EU’s target of 120 g/km involving all relevant stakeholders and measures. The Group welcomes the impact assessment which is being carried out to examine how it can be achieved in the most cost-efficient way.
The Group has identified a number of concrete actions, which could contribute to CO2 reductions, such as vehicle technology, alternative fuels, eco-driving and gear-shift indicators, taxation, consumer information and labelling or congestion avoidance. It recommends that specific attention should be given to second generation biofuels (biofuels which can be sourced from a wider variety of feedstocks and offer significant environmental benefits). Furthermore, hydrogen has been identified as being a promising option as an energy carrier for the longer-term, which needs a major research and development effort.
3. Improving road safety
An integrated approach involving vehicle technology, infrastructure and the road user is recommended for improving road safety.
As to vehicle technology, the Commission will propose the compulsory introduction of new safety features, such as: Electronic Stability Control, seatbelt reminders, brake assist systems, improvement of heavy duty vehicles’ blind spots and conspicuity, Isofix child seats and daytime running lights.
Concerning the behaviour of road-users, the Group recommends improved cross-border co-operation in pursuing drivers breaking traffic rules, with an appropriate Commission proposal in 2006, as well as further efforts towards the adoption of the directive on driving licenses.
4. Better market access in third countries
In the area of trade, the group believes that the opportunity presented by the Doha Development Agenda should be taken to increase the competitiveness of EU industry and market access to third countries. The group recommends that the EU multilateral trade approach is complemented by parallel bilateral approaches.
The EU car industry encounters several obstacles on the Chinese market, such as favouritism towards domestic producers, investment restrictions, local content constraints and weak enforcement of intellectual property rights. The Commission will continue its close monitoring of Chinese business and regulatory developments with a view to assessing the possibility of success at an eventual WTO dispute settlement panel if the existing situation does not improve.
Among British members of the CARS 21 Group of industry, Commission, Government and institutional members were Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs, and Malcolm Harbour, MEP and Joint Chairman of the European Parliament’s Forum for the Automobile and Society.
The full text of the roadmap and the CARS 21 report is available at:
http://europa.eu.int/comm/enterprise/automotive/index_en.htm
Mahindra & Mahindra buys controlling stake in Plexion Technologies
The latest in a series of acquisitions by Indian utility vehicle manufacturer Mahindra & Mahindra’s is a Bangalore-based privately-owned computer-aided automotive, aerospace and general engineering services company called Plexion Technologies, reports The India Times. M&M is acquiring JP Morgan’s 77.6% stake in the aerospace and automotive design and fabrication company for around US$10m.
Plexion, whose automotive clients include Bentley, Honda and DaimlerChrysler, will be integrated into the group’s Mahindra Engineering Services. Mahindra & Mahindra have made a series of recent component supplier acquisitions and also recently acquired the Romanian agricultural machinery manufacturer Tractorul.
(India Times, 10 December)
Polimoon buys Czech automotive supplier
The Norwegian plastics group Polimoon has acquired a Czech plastics components supplier, Rim Tech, for €5.8m. Rim Tech primarily manufactures automotive components and forecast 2005 sales of €9m, with an operating profit margin of 9%, following annual growth of about 20% in the last few years.
Rim Tech employs approximately 200 people, and serves primarily the truck and construction industry. Its customers include some of Polimoon’s existing CV manufacturer customers for injection moulded components.
The enlarged Polimoon Group will have combined revenues of €340 million, employing 2,450 employees, and will operate in 13 countries throughout Europe.
Polimoon notes that the average plastic weight per car was 45 kg in 1970, compared to 105 kg in 2000, and that the growth of plastics usage in the truck market has been stronger than in the car market.
Toyota’s 9.9m 2006 group production target could overtake GM
The Asahi Shimbun paper in Tokyo reported yesterday that Toyota plans to manufacture 8.9 million vehicles in 2006 including some 0.9m units from its affiliates Daihatsu and Hino Motors - a total which could make Toyota the world's largest vehicle manufacturer in terms of production. An announcement on 2006 production is expected from Toyota itself on 20 December.
Since Toyota has always been conservative when drawing up its annual production plan, some Japanese observiers suggest its actual output next year could be closer to 9 million units. The company’s 2005 group production total is expected to be 8.28 million units, including an estimated 7.39m Toyota vehicles.
Proton Cars UK set to run £1.5 million TV campaign
The Malaysian state-controlled manufacturer Proton’s UK importer is to mount a marketing campaign including television, outdoor poster sites and regional press in February 2006, to promote its first five door city car, the Savvy and the GEN-2 hatchback. Four agencies are in the process of pitching for the business, with media planning being undertaken by The Coltman Media Company.
Hyundai appoints new UK sales director
Hyundai has appointed a new UK sales director, Guy Pigounakis, who joins recently appointed Managing Director Tony Whitehorn, as well as Marketing Director Jim Campbell, Aftersales Director Graham Lightfoot and Finance Director Ray Pope as an executive board member of Hyundai Motor UK Ltd (HMUK).
Pigounakis, who took up his new post on 12 December, has held a number of positions in the UK automotive industry, chiefly with Rover Cars and latterly MG Rover.
Pricing pressure leads to Brose profit warning
The ongoing pricing and cost pressure in the international supplier industry is leaving its mark in the German Brose Group, the company reports. Although the group's turnover rose in 2005 by 10% to €2.2 billion due to increased system business, Brose anticipates a decrease in profits due to a drop in product price and the advance payments required for expanding worldwide production capacities.
Brose’s biggest growth during the past year was in door systems, which grew sales by 29% to €800 million. The company’s seat adjuster business increased 19% to €405 million. In window regulators, turnover dropped 2% to €805 million due to substitution by door systems. The closure system business also declined, as anticipated, to €190 million. Beginning in 2007, however, Brose expects a fresh increase in turnover in this area.
Turnover generated outside Brose’s domestic German market rose in 2005 by 24% to €1.2 billion, while in Germany itself, turnover dropped by 3% to around €1 billion.
"We want to be able to offer an optimal price- performance ratio on a permanent basis and not just to be the cheapest in the short run. That's why we would rather turn down an order than renounce our corporate principles of quality, innovative capability and long-term economic stability," said Jurgen Otto, who will become Brose’s CEO on 1 January 2006, during a 9 December Munich press conference to announce these results.
The company said it aimed to retain the capacities achieved in German production and administration areas through permanent improvements of cost pools as long as possible. "Together with our works councils, we want to fight to keep the jobs in our German plants. To do this, however, we also need our customers' support," said Brose executive Michael Stoschek.
Brose invested almost 9% of its 2005 turnover in the development of new products and processes, IT and personnel development. Around €160 million were invested in new products and the establishment of new locations in Europe, Canada and China. At Herrenberg in Germany, a just-in-sequence plant began manufacturing door systems for DaimlerChrysler and in London, Ontario, a new factory will launch production of door systems and seat adjusters for Chrysler and Ford. In China, Brose’s a new production facility, Brose’s third in the country, will soon start up the manufacture of seat adjusters, window regulators and door systems.
Employees in the Brose Group increased by 690 (+8.5%) in 2005 to 8,840. The headcount within Germany of about 4,630 remained constant, but with a declining number of employees in production areas.
Source: Brose
Nissan Europe announces executive appointments
Paul Willcox has been appointed by Nissan Europe as its new vice president for marketing, replacing Volker Brien, with responsibility for marketing and advertising activities in over 30 countries across Europe. Willcox will report directly to Brian Carolin, senior vice president, sales and marketing. He joins the company from Nissan Motor GB Ltd where he was marketing director for two years. Before joining Nissan Willcox worked at Peugeot, having joined as a graduate trainee.
Nick Noda has been appointed as Nissan Europe's new vice president, human resources and general affairs, based in Trappes, France. He replaces Marie-Francoise Damesin, who left to become senior vice president of communications at Renault last month, and reports directly to Dominique Thormann, Nissan Europe’s senior vice president of administration and finance.
Noda has over 20 years experience within Nissan, mostly at Nissan Motor Company Ltd in Japan.
OESA announces 2005-2006 board of directors
George Perry, president and chief executive officer, Yazaki N.A. Inc., has been named chairman of the US Original Equipment Suppliers Association (OESA) for 2005-2006. Jim McElya, chief executive officer, Cooper Standard Automotive and Jim Orchard, president, Faurecia, North America will serve as vice chairmen.
In full the OESA board of directors for 2005-2006 comprises:
Joseph B. Anderson, Jr., Chairman & CEO, TAG Holdings, LLC
Dr. David E. Cole, Chairman, Center for Automotive Research
John Corey, President and Chief Executive Officer, Safety Components International, Inc.
Jim Davis, President and Chief Executive Officer, Guardian Automotive
Jacqui A. Dedo, President -Automotive, The Timken Company
Neil De Koker, President, OESA
Claude Z. Demby, President and Chief Operating Officer, L&L Products, Inc.
Larry A. Denton, Chairman, President and Chief Executive Officer, DURA Automotive Systems, Inc.
Mark Frissora, Chairman and Chief Executive Officer, Tenneco Inc.
Linda Hasenfratz, President and Chief Executive Officer, Linamar Corporation
Mark Hogan, President, Magna International, Inc.
Kim Korth, President and Chief Executive Officer, IRN. Inc.
William L. Kozyra, President and Chief Executive Officer, Continental Teves, N.A., Inc.
Kathleen Ligocki, President and Chief Executive Officer, Tower Automotive, Inc.
Roy Link, President and Chief Executive Officer, Link Engineering Co.
Matt Matsushita, President and Chief Executive Officer, DENSO International America, Inc.
Robert E. McKenna, President and Chief Executive Officer, MEMA
Alfred H. Peterson III, Chairman, Peterson American Corporation
John Sanderson, President and Chief Executive Officer, Siemens VDO Automotive Corp. USA
Dr. Mohsen Sohi, President and Chief Executive Officer, Freudenberg-NOK
Wallace K. Tsuha, Jr., Chairman, Chief Executive Officer and President, Saturn Electronics & Engineering, Inc.
Jane L. Warner, Group President, Worldwide Finishing Systems, Illinois Tool Works Inc.
Paul Wilbur, President & CEO, ASC, Inc.
(www.oesa.org)
LDV expected to announce private equity refinancing deal
LDV is understood by the Guardian newspaper to have secured a fresh source of investment, having been in discussions with an unnamed US private equity group.
The company, which employs 1,200 staff in Birmingham, had suspended production of its vans 10 days ago, raising concerns that the company was facing a cash crisis.
However, spokesman Steve Miller told the Guardian on Sunday that the company had taken the decision in order to "rebalance stocks," and confirmed production would restart later this week. "We said earlier this year when we launched the Maxus that we would need to raise more money to develop the business, launch new models and develop an export strategy. The money is in place and we will be announcing how much by the middle of next week," Mr Miller said. The Maxus was launched this year after LDV bought the tooling it had co-developed with the now-defunct Daewoo Motors’ van operation in Poland.
(The Guardian, 12 September)
DaimlerChrysler tops EC’s second annual R&D scoreboard
Daimler-Chrysler currently invests more in research and development than any company in the world. This is one of the findings of the Second EU Industrial R&D Investment Scoreboard, compiled and presented by the European Commission. The Scoreboard, an analysis of industrial R&D investment trends based on corporate figures, shows that R&D investment among the top 700 EU companies grew slightly in the year to 1 August 2005 contrasting with the previous year, when spending went down.
Nonetheless a wide and growing investment gap remains in comparison with the top 700 companies outside the EU. The 0.7% growth rate by EU companies compares poorly with an annual growth in R&D investment of about 7% by non-EU companies.
One factor that can explain this is difference in industrial activities – EU companies have a strong presence in sectors characterised by a medium sales-to-R&D investment ratio (such as automobiles & parts). There are relatively fewer scoreboard companies active in sectors where a much higher proportion of sales is invested in R&D, such as biotechnology, health and information technology.
At the same time, a survey of EU companies in last year’s Scoreboard shows that they are positive about future R&D investment, expecting growth of about 6% per year and they have a clear preference for carrying out their research within Europe, in their home countries. Outside the EU, companies target the US, China and India as R&D investment locations.
Together, the 1,400 companies featuring in this year’s edition, 700 registered in the EU and 700 outside, invest €315 billion in R&D. Based on corporate information available up to 1 August of this year, the Scoreboard shows a turnaround in the R&D investment growth rate for EU companies, from a decline last year of 2% to an increase this year of 0.7%.
It also shows that top EU companies are as ready to invest in R&D as their competitors from outside the EU: 9 of the top 25 worldwide investors are based in the EU, and 45% of the top 700 companies in the EU increased their R&D investment by more than 5% this year.
GKN trading update confirms full-year 2005 results forecast
After eleven months trading, GKN plc reports it is on track to achieve the expected trading outcome for 2005. It has found automotive demand in the second half somewhat lower than expected although Driveline’s customer and model mix has limited its exposure to the sharp volume declines seen on some large North American SUVs. Aerospace demand has remained strong. After a strong start to the year, OffHighway markets have weakened slightly in the second half.
High raw material and energy prices continue to impact performance and steel surcharges, which had fallen in the first half, increased slightly thereafter.
The restructuring programmes continue to run to plan with charges for the year expected to fall within the range previously indicated. Powder Metallurgy has continued to improve productivity, enabling GKN to extend the previously announced plant consolidation programme to further accelerate recovery. This will result in asset write-downs of around £25m in 2005 and a similar level of additional restructuring costs being charged in 2006. A move of production to low cost regions is also expected to lead to further asset write-downs and impairment charges of some £20m in 2005 in other automotive businesses.
The Group’s preliminary results announcement will be on 28th February, 2006.
EU type approval and HGV emissions directives set to be in force by year-end
New EU environmental directives are due for publication in the EU official journal and will enter into force before the end of the year, reports ENDS. One requires manufacturers seeking type approval for new passenger cars and light vans to demonstrate that components are reusable and materials are recyclable and recoverable to levels required by the end-of-life vehicles (ELV) directive.
The standards to be achieved under the directive are minimum 85 per cent and maximum 95 per cent reusability/recyclability. The ELV directive requires actual reuse, recycling and recovery rates to reach these levels from January 2015.
The directive on heavy goods vehicle emissions will be required to be transposed into national legislations by 8 November next year, requiring that vehicles are fitted with on-board diagnostic and exhaust after-treatment systems.
BMW tests ‘Turbosteamer’ exhaust heat conversion system
BMW is testing a two-stage device called the Turbosteamer on a stationary conventional 1.8-litre BMW engine that converts more than 80 per cent of the heat in the engine’s exhaust into usable power, reports Automotive News Europe, quoting Raymond Freymann, head of advanced research and development for BMW.
BMW could start building production vehicles with the system by the first half of the next decade, Burkhard Gošschel, BMW board member for R&D and purchasing, told the paper. In trials on a test rig, the system reduced fuel consumption figures by 15 per cent and generated an extra 13hp and 20Nm of torque. The concept is not new, but until BMW’s development, the size of the equipment has defeated implementation.
SMMT forecast 2.5% drop in 2006 UK vehicle market
Current headline trends reported by the SMMT show that:
- Total sales volumes fell in 19 of the past 20 months to November 2005
- Retail sales, the core of the contraction in demand, were down in all 20 months
- Business sales have been more resilient, but only tempered the pace of the fall.
Data for the 12 months to November 2005 compared with the same period in 2004 show:
- Total volume down 5.9 per cent to 2.427mn units
- Retail volume down 10.1 per cent to 1.084mn units
- All business down 1.4 per cent at 1.348mn units.
The loss of 166,000 retail sales since June 2004 is a big blow to the UK market. Another drop in retail demand is expected over the course of 2006, but at about 40,000, it is expected to be more modest. It is clear that consumers are feeling very vulnerable and reluctant to commit to buying a new car.
2005’s crop of weaker economic statistics and surveys continue to confirm that demand is well below par. But GDP growth remains positive, and both the Treasury and the Bank of England expect a smart rebound in consumer spending over the medium term.
The SMMT hopes the market will stabilise over the next 12 to 18 months, but sees potential risks from rising unemployment, higher inflation and slower growth in household spending. Its current view of car registrations in 2006 is a total of 2.375m, a drop of 2.5 per cent on 2005’s total. More detail is given below.
Recent trends suggest the total for 2005 may be 0.5 per cent down on the SMMT’s expectations as at October, at 2.435m, while its forecast for 2006 is 2.375m. The latest three months to November recorded year on year falls of 5.9 per cent for all cars, 9.9 per cent for private buyers and 1.2 per cent for business buyers.
The SMMT’s latest full-year 2005 forecasts estimates 1.085m private new car sales and 1.350m to businesses and fleet buyers. The respective forecasts for 2006 are 1.50m and 1.325m.
Deloitte report suggests decline in company car fleets could be reversed
In a report launched today, 'Goodbye Company Car?', business advisor Deloitte argues that far from abandoning the company car (with the current trend moving towards cash-based alternatives), businesses need to use a combination of funding solutions to ensure cost efficiency for both themselves and their employees.
The report argues that while the latest HM Revenue & Customs’ figures highlight a decline in the number of company cars since the 2002 reforms in company car tax, this trend could be reversed as the impact of health and safety legislation relating to at-work driving begins to take effect.
Alison Chapman, head of automotive tax at Deloitte, said: “In the future, the company car will not be confined to the scrap yard. The Government has made it clear that it wants the company car to remain a key part of the corporate landscape as it steers businesses and drivers towards choosing the most environmentally-friendly vehicles available.”
The report outlines the fiscal and legal measures already introduced and those in the pipeline from both the UK Government and the European Commission that will impact on the £20 billion UK fleet industry.
Ms Chapman adds, “ Flexibility in the provision of corporate transport solutions has become crucial to both companies and their employees, but both parties have frequently failed to analyse in detail the full implications of opting out or staying loyal to the company car. This is because the issue is far from a straightforward ‘in’ or ‘out’ decision. Too many companies have tried to treat the choice as an either or option, and as a consequence have paid the price in terms of rocketing costs, administration overload and disgruntled employees.”
The report includes analysis of issues that impinge on the decision-making of boards of directors when discussing company cars and contains comment from a range of automotive and fleet industry professionals and independent commentators as well as the views of organisations such as the CBI, Department for Transport, the Conservative Party and the Liberal Democrats.
Copies of the report are available at £225 from www.cartax.co.uk/
Honda UK HQ shows off recycling potential
An initiative to reduce office waste was launched in September by members of the Honda (UK) Green Forum – a group of staff formed to promote, educate and raise awareness of environmental issues. The Forum recognised that the Langley-based office was producing the equivalent weight of nearly 60 Accord Tourers in annual contributions to landfill, so it kick-started an internal recycling system using colour-coded bins.
The Green Forum removed each associate’s individual wastepaper bin – an inconvenience for staff at first – they now have to walk on average an extra 15 miles per year to reach the recycling bins on each floor, but the result has been that in November 2005, the Langley office recycled 6.4 tonnes of rubbish, reducing the building’s contribution to landfill by 35 per cent.
If the UK reduced its yearly total waste to landfill – 435 million tonnes – by the same percentage, Honda calculates that could mean a reduction in waste of around 150 million tonnes, the same weight as 450 Empire State Buildings.
This week The Green Forum offered a free lunch to Honda staff travelling to work by bicycle, motorbike, train or bus, and those involved in a car share. In conjunction with the Energy Saving Trust, it also gave out energy efficient light bulbs.
UAW and Ford reach tentative agreement on health care
United Auto Workers Union President Ron Gettelfinger and Vice President Gerald Bantom, who directs the UAW National Ford Department, announced on 9 December that the UAW and Ford Motor Company had reached a tentative agreement on health care, subject to ratification by UAW-Ford active members and court approval.
"Our goal in these discussions with Ford was to provide the best possible health care coverage and the strongest possible long-term protections for all UAW-Ford active workers, retirees and surviving spouses. We believe this tentative agreement achieves that goal," Gettelfinger and Bantom said.
"Like the UAW-GM health care agreement, this tentative agreement asks every UAW member, active and retired, to make sacrifices so that everyone can continue to receive excellent health care coverage today and in the future. UAW-Ford workers and retirees have long enjoyed some of the best health care coverage of any industrial workers in America, and they will continue to do so under this agreement," the UAW leaders said.
Details of the tentative agreement are being withheld pending a meeting of the UAW-Ford Council, which is being scheduled for next week in Detroit.
(Source: UAW)
Delphi names two new board members
Delphi Corp. has elected two new directors, Raymond J. Milchovich, 56, the current president, chief executive officer and chairman of the board of directors of Foster Wheeler Ltd., and John H. Walker, 48, president and c
