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AUTOMOTIVE NEWS EUROPE

LETTER FROM THE EDITOR

Harald Hamprecht

Fire fighters
T
he hottest fires make the hardest steel, or so the saying goes. In real life, the economic crisis blazing through southern Europe is turning profits into ashes. It is estimated that nearly every European volume manufacturer had an operating loss in Europe last year. Peugeot, Citroen, Renault, Opel/Vauxhall and Fiat are doing all they can to try to defy the downturn (page 12) because no one wants to end up like Saab. To avoid getting into deeper trouble, those volume brands will need to address four key weaknesses. 1. Europe-centric: The five brands mentioned above are too dependent on Europe, where sales are expected to decline for the fifth consecutive year in 2012 (see chart). 2. Stuck in the middle: The Asian automakers, especially the Koreans, are attacking from below while premium manufacturers are pushing more and more product into the subcompact and compact segments. 3. Overcapacity: Automakers such as Renault, Peugeot, Fiat and Opel have either delayed needed restructuring of their manufacturing footprints or did not cut deep enough in the past. 4. Weak brand portfolio: European automakers must accept that one can only stretch an existing brand so far. For example, sister brands Citroen and Peugeot compete for the same customers and neither has a budget brand, like Renaults Dacia, nor a premium brand, like Volkswagens Audi, to generate profits. 2. Ford 4. Peugeot 5. Renault 6. Citroen 7. Audi 8. BMW 9. Fiat 10. Mercedes Total market

is Editor-in-Chief at Automotive News Europe. He can be reached at hhamprecht@crain.com

EUROPES TOP 10
Western European passenger-car sales for top 10 brands

2012* 1. Volkswagen 1,415,041 975,356 971,257 859,356 810,403 675,714 647,652 643,652 628,181 586,298 12,482,075

2011 1,607,582 1,068,282 969,026 899,373 1,019,140 763,110 658,746 619,522 670,199 567,886 13,201,216

% CHG

-12 -9 0 -4 -20 -11 -2 4 -6 3 -5

3. Opel/Vauxhall

SOURCE: IHS AUTOMOTIVE; *FORECAST

THE EXCEPTION
There is one volume automaker on the European battlefield that is an exception: Volkswagen. Last year, the longtime No. 1 automaker in Europe rose to No. 2 from third in global sales. Its impressive, but dont forget that the company was in rough waters when Bernd Pischetsrieder took over as group CEO from Ferdinand Piech in 2002. The companys profits plummeted in 2003 while the fifth-generation Golf disappointed and the Phaeton flagship flopped in 2004. In 2005, VW was shaken by a sleazy corruption affair. That same year, Wolfgang Bernhard joined VWs management board and helped end a dark period when production efficiency was a foreign concept at the company. By 2007, Martin Winterkorn took over and now VWs billions in operating profits make it the envy of the auto industry. But it wont be easy to maintain the momentum in a declining market, especially with the Golf, Europes top-selling car for the last four years, undergoing a model changeover. Another challenge is that the Up minicar is likely to steal sales away from the Polo subcompact.

pany quickly tumble back to the brink of failure. Besides, Marchionne has often over-promised and under-delivered. I am still waiting for the year when Lancia and Alfa Romeo will do as Marchionne predicted and each sell 300,000 cars a year. Marchionne is Mr. Big Picture. He says he is searching for a new partner to join the Fiat-Chrysler alliance so it can better compete against VW. Marchionne should get his business straightened out before he tries to create an even bigger conglomerate of struggling volume manufacturers. Coming back to hot fires and hard steel, my advice to European volume manufacturers is simple: Use the crisis. Develop a clear strategy and execute it to perfection. Improve quality and offer designs that make car buyers wallets jump out of their pockets. Speed up efforts to improve your cost-competitiveness. If your plants cannot become more efficient then fight through the political battles and shut them. Otherwise, massive structural costs will continue to devour your profits. Cooperate more! This would be much easier and more successful than organizing megamergers. In a nutshell, stand out or stand aside. Transform into the leanest, most innovative manufacturers in the world. Europes automotive brands have the heritage and people needed to achieve greatness. Of course, I am well aware that all of this it is easier said than done. But it is not impossible, as the revival of British luxury and premium brands shows (page 32). I hope you enjoy this issue.

FUMBLING FIAT
At the other end of the spectrum is Fiat the biggest loser in 2011 among the major automakers with a European sales decrease of 17 percent. Fiat is getting stung by Italys sales slump. Its also hurt by an aging lineup that resulted from CEO Sergio Marchionnes decision to delay product launches during the Great Recession. In addition, Fiat is in the middle of the Chrysler merger, which Marchionne says is only about 20 percent finished. I am reluctant to praise the CEO too much. The man definitely revived Fiat. He also saved Chrysler from extinction, but there are others who once made the same claim Bob Lutz, Dieter Zetsche, Wolfgang Bernhard only to see the com-

MARCH 2012

AUTOMOTIVE NEWS EUROPE

AUTOMOTIVE NEWS EUROPE

INSIDE THIS ISSUE

www.autonewseurope.com
JASON STEIN Publisher and Editorial Director +1 313 446 0376 jstein@crain.com NINA SAUER Associate Publisher +49 89 381 517 400 nsauer@crain.com KEITH CRAIN Publishing Director PETER BROWN Group Publisher

contents
MARCH 2012 EDITION

22

3 Letter from the Editor

42 Surging Skoda

MARKETS
6 Focus on France
Sales will slump, but no need to panic

Czech brand remains on record-breaking course

44 Module-mania
VW Group pushes production network to new heights

EDITORIAL
HARALD HAMPRECHT Editor-in-Chief +49 (0) 173 257 86 88 hhamprecht@crain.com DOUGLAS A. BOLDUC Managing Editor +49 (0) 171 424 6373 dbolduc@crain.com PAUL McVEIGH Managing Editor +49 (0) 176 7835 3951 pmcveigh@crain.com LUCA CIFERRI Chief Correspondent +39 01196 91970 lciferri@crain.com STEVE MASSIE Design Director smassie@crain.com Bruce Gain (France), Bertrand Gay (France), Nick Gibbs (UK), Stefan Grundhoff (Germany), Lois Hoyal (Germany), Yang Jian (China), David Jolley (Germany), Joaquim Oliveira (Portugal), David Sedgwick (U.S.), Sebastian Viehmann (Germany) Correspondents

8 Europeans gain in China


Germans lead; French, Fiat need to move faster

SUPPLIERS
46 Inside action
Suppliers do more with less to create cutting-edge interiors

COVER STORY
12 Defying the downturn
How Europeans plan to overcome tough times at home

48 Mobility 3.0
New solutions for getting from A to B

50 Brave new world


Hollywood fantasy comes closer to reality at CeBIT

NEW CARS
21 Auto arrivals
See which new models will debut in 2012

52 Car cutaways
Who has parts in the Citroen C4 and Toyota Yaris?

54 New frontier
Brembo wins big by moving beyond supercars

ADVERTISING
EUROPE
NINA SAUER Director of Sales, Marketing and Events +49 (0) 89 381 517 400 nsauer@crain.com STEFANO DAMIANO Sales Manager + 31 (0) 299 769 110 sdamiano@crain.com GEORGIA CHAPMAN Marketing and Events +49 (0) 176 2076 9139 gchapman@crain.com

USA
RICK GREER Sales Director +1 313 446 6050 rgreer@crain.com

A-Z of Geneva auto show debuts 22 Audi to Bertone A3 loses weight; car legend revived 23 BMW to Ferrari Swoopy 6-series sedan; 599 successor powers up 24 Ford to Mercedes Electrifying sports car; a cool A class 26 Mini to Peugeot Quirky subcompact; 208 pocket rocket 28 Geneva floor plan 30 Pininfarina to Skoda Zoe sparks EV market; Toledo lives again 31 Smart to Volvo An affordable hybrid; downsized Swedish luxury

DATA
56 European sales figures
Market analysis by model for 2011

RETAIL
62 Second chance
Used-car sales rescue automakers, dealers in hard times

HUMAN RESOURCES
64 People on the move
New faces in key management positions

KOREA
JUNG-WON SUH Sinsegi Media Inc. +82 2 785 8222 sinsegi-2@sinsegimedia.info

OEM
32 The British are back
JLR, Mini, Rolls-Royce ready for another strong year

FINAL WORD
66 Diversity Inc.
Fiat-Chrysler has deep talent pool of future CEO candidates

CIRCULATION
LAUREN CIALELLA Circulation Manager +1 313 446 0490 lcialella@crain.com

34 Bentley charges ahead


VW unit wants to more than double sales by 2017

SUBSCRIPTION SERVICES
Vertriebsunion Meynen GmbH & Co. KG +49 6123 9238 249 automotivenewseurope@vuservice.de Printed in Hanover, Germany, by BWH GmbH
Published by Crain Communications Inc. 1155 Gratiot Ave. Detroit MI 48207 USA All contents Copyright 2012. No part of this puiblication may be reproduced, stored in a retrieval system of transmitted in any form or by any means, electronic or mechanical, photocopying, recording or otherwise without the permission of the publisher. All rights reserved. Additional copies For additional copies +1 313 446 0490 lcialella@crain.com

36 Maximizing Mini
BMW subsidiary will add models, dealers, output

37 Rolls keeps rolling


CEO predicts strong year for ultraluxury brand

38 Ready to pounce
Jaguar Land Rover drives toward big sales gain

32
iStockphoto.com MARCH 2012

39 Looking for a partner


Aston Martin needs help to add SUV to lineup

40 Guide to assembly plants


Who makes what in Europe and Russia?

Cover image: iStockphoto.com/lucaciferri

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MARKETS

No Gallic panic
French sales outlook poor for 2012 but not a crisis
BERTRAND GAY
autonewseurope@crain.com

RENAULT, PEUGEOT SLIP


VW and Nissan gained ground in 2011 while domestic brands slipped. Frances top 10 based on passenger-car sales; % change vs. 2010; % market share 1. Renault 2. Peugeot 3. Citroen 4. VW brand 5. Ford 6. Opel 7. Dacia 8. Nissan 9. Toyota 10. Audi 455,718 369,721 323,068 -9 20.7 -8 16.8 -2 14.7 7.4 5.2 4.3 4.0 3.3 3.1 2.7 100

Peugeot 508 and Renault Laguna account for just 30 percent of the segment. Most automakers expect slower sales to private buyers this year, so they are increasing their focus on the company car market. In 2011, private sales accounted for 61 percent of new-car volume. Company car sales were 19 percent while manufacturer/demonstration cars were 11 percent and short-term rental cars 9 percent. In the mid-sized segment French cars lose out on fleet sales because of their low residual values, which lead to a high monthly leasing rate. Companies can lease German luxury models for the same cost as an executive sedan from a French brand. For example, the residual values of the Renault Laguna and the Citroen C5 are 6 to 8 points lower than an Audi A4. Audi estimates that the total market for premium-car sales will grow by 4,000 units to 207,000 this year. Last year, Audis sales in France grew 16 percent to 58,960, a volume higher than Fiat brands sales, which declined 21 percent to 57,323, according to the industry association CCFA. BMW brand sales rose 1 percent to 46,305 while Mercedes-Benz brand fell 5 percent to 43,547. As a whole, the French market will continue to suffer this year from the aftereffect of the 2010 scrappage program, which encouraged private buyers to renew their cars earlier than planned. The euro zone debt crisis is also causing a lot of uncertainly. What really worries us is France, as were very sensitive to the French market, Renault CEO Carlos Ghosn told a French radio station in January when asked about Europes debt crisis.

he French auto market is forecast to drop by up to 8 percent in 2012. Industry executives are worried about this, but they are not panicking. Most automakers expect French new-car sales to be about 2 million passenger cars and 400,000 light commercial vehicles in 2012. This number does not show a crisis on the market, says Bernard Cambier, Renaults sales chief for France. We foresee a French passenger-car market 8 percent lower than last year, but we expect that the first quarter will be 17 percent down, he says. The market ended last year with sales of 2.2 million, a 2 percent decline from the year before but still an impressive figure because in 2010 buyers rushed to the dealerships to take advantage of government-funded scrappage incentives. Industry watchers say France is a typical mature market without any growth prospects and its true level without incentives or rebates is 2 million units. Two significant changes are reshaping the market. 1. Renault and PSA/Peugeot-Citroen are losing sales to ambitious foreign rivals. 2. The product mix is moving downward. Volkswagen Group, including its VW, Audi, Skoda and Seat brands, plans to nearly double French sales to 400,000 by 2018, says Marie-Christine Caubet, head of VW Group in France. Last year, VW Group sold 294,000 cars and light commercial vehicles in France with all its brands except Seat posting double-digit increases. The group will launch 30 new or updated vehicles in the next 15 months in France. The VW brand aims for a market share of 8 percent this year, up from 7.4 percent in 2011. Hyundai also has ambitious goals in the French market. The Korean brand wants to more than double its annual sales to 50,000 by 2015 from about 20,000 last year and to increase its market share to 5 percent in the long term from nearly 1 percent in 2011. We want to be the leading brand in customer satisfaction, adds Patrick Gourvennec, Hyundai Motor France managing director. Last year, Renault and PSA accounted for a little more than 56 percent of all cars sold in France, down 5 percent on the year

163,566 12 115,339 94,080 1 -1

88,979 -15 71,763 33 67,305 3

58,960 16 -2

Total market 2,204,065


SOURCE: CCFA

before. Renault's market share, excluding Dacia, declined by 1.4 percentage points to a historic low of 20.7 percent. Sales were negatively affected because its bestselling model, the Clio subcompact, is nearing the end of its life cycle. The fourthgeneration Clio launches next year. PSA has a 31.4 percent market share for its two brands compared with 24.7 percent for Renault and Dacia. But the market share for PSAs top-selling brand, Peugeot, fell 1 percentage point in 2011 to 16.8 percent, mainly because its best seller, the 207 subcompact, is due to be replaced. The 208 launches in April.

SMALL IS THE NEW BIG


Sales of minicars (A segment) and subcompacts (B segment) are growing in France with the two segments now accounting for just over 50 percent of French new-car sales, up from 38 percent eight years ago. French brands still dominate minicar and subcompact sales, but they face a tougher challenges in the dynamic compact segment (C segment), where cars such as the VW Golf and Ford Focus are catching up fast on models such as the Renault Megane and Citroen C4. Compact sales now account for 40 percent of the market, compared with 35 percent eight years ago. Buyers have deserted French brands in the mid-sized segment (D segment). Aggregated sales of the Citroen C5,

Carlos Ghosn: Worried about sales in France.

AUTOMOTIVE NEWS EUROPE

MARCH 2012

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MARKETS

French brands, Fiat need to move faster to grow in the worlds biggest market

Germans to keep China edge


DAVID SEDGWICK & YANG JIAN
autonewseurope@crain.com

CHINAS LEADERS
2011 passenger-car sales by brand; % change vs. 2010; market share (includes JV sales) 1. VW 2. Toyota 3. Nissan 4. Hyundai 5. Buick 6. Honda 7. Chevrolet 8. Chery 9. BYD 10. Kia 1,720,000 883,000 835,217 770,705 645,537 617,764 595,068 556,235 448,500 432,518 +14 +4 +23 +4 +17 -5 +9 +3 -14 +29 13.2 6.8 6.4 5.9 4.9 4.7 4.6 4.3 3.4 3.3
REUTERS

n China, there was a time when automakers could boost sales simply by introducing rebadged versions of their obsolescent platforms. In a market with so much pent-up demand, anything would sell. Those days are gone.

With sales of 14.5 million cars and light commercial vehicles up 5.1 percent over the previous year China remained the worlds largest automotive market in 2011, but the growth rate has slowed. Auto executives no longer are counting on the crazy gains of earlier years, which culminated with a 33 percent sales increase in 2010. LMC Automotive forecasts Chinas vehicle sales will rise about 9 percent this year, but the disparity between the strong and the weak brands is widening fast. Fiat and Renault will have to spend heavily to catch up to the German brands. But Volkswagen, BMW, Mercedes and Audi also are investing, and most industry analysts expect theyll stay on top. Heres a company-by-company overview of the European automakers prospects in China.

OTHER EUROPEANS
Audi BMW* Citroen Skoda Mercedes Peugeot Volvo Land Rover Porsche Renault Jaguar Opel Bentley Fiat Maserati 313,000 232,586 230,634 220,100 193,339 173,803 47,140 36,087 24,340 24,275 5,976 4,864 1,780 1,354 780 +37 +38 +10 +16 +31 +12 +54 +54 +65 +65 +123 +51 NA +200 +100 2.4 1.8 1.8 1.7 1.5 1.3 0.4 0.3 0.2 0.2

THE KINGPIN
Volkswagen Group China CEO Karl-Thomas Neumann recently described VWs plan to build a new assembly plant in the city of Foshan in south Chinas Guangdong province its first in that region. Honda and Toyota dominate Chinas prosperous southeast, and Neumann is determined to break their grip. The new plant is part of VWs plan to spend 14 billion euros to boost production in China to 3 million units a year by 2014, up from 2.2 million units in 2011. VW is determined to keep growing in China, and the company is moving into new markets to do so not only in the south, but in Chinas less developed western region. Volkswagens joint ventures with Shanghai Automotive Industry Corp. and China FAW Group currently operate nine assembly plants. In addition to Foshan, VW will build a plant in the east China city of Yizheng. And VW has gotten government permission to build two additional plants in the east China city

**

Growth by VW, Mercedes, Audi and BMW is expected to maintain Germany as tops in China among Europes automakers.

In China, there are more than 120 billionaires and about 670,000 millionaires. Until they are all driving the S class, we still have things to do.
Dieter Zetsche Daimler CEO

Total passenger vehicles: 13,074,298 * Includes Mini, Rolls-Royce ** Less than 0.1%
SOURCES: COMPANIES, LMC AUTOMOTIVE

of Ningbo and in northwest Chinas Xinjiang province. With all those plants, VW will have established itself in Chinas southeast, southwest, east, northeast and northwest regions. Only Toyota has a comparable geographical footprint. VW CEO Martin Winterkorn refers to China as the automakers second home market. The VW Group, which includes the Audi, Skoda, Seat, Bentley, Lamborghini and VW brands, sold 2.25 million vehicles in China

last year almost double its 1.15 million volume in Germany, which is now its second-largest market. Volkswagen also is expanding its product lineup. The companys Skoda brand enjoyed a successful launch in China in 2007, and last year Seat opened 15 dealerships in China. We will concentrate on the 10 to 15 most important metro areas, Seat CEO James Muir told Automotive News Europe. Volkswagens luxury brand, Audi, began
CHINA CONTINUED ON PAGE 10

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MARCH 2012

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MARKETS

CHINA CONTINUED FROM PAGE 8

building models in China in 1996, years before BMW and Mercedes-Benz did so. Audi was Chinas top luxury brand last year with sales of 313,000 units, up 37 percent over the previous year. The company wants to expand its product lineup by adding the Audi A3 and Q3. As Audi expands its lineup, it plans to double its production capacity in China to 700,000 units by 2015. To sell all those cars, it is expanding its network of 175 Chinese dealerships by 50 stores a year. We are currently opening a new dealership every week. So in three years, we could be at about 500 dealerships, Audi CEO Rupert Stadler said. Stadler predicted that Chinas luxury segment will continue to outgrow the rest of the market, but will not maintain the explosive growth rate of recent years. LMC Automotive has predicted that Chinas luxury market will expand about 16 percent this year, down from roughly 40 percent in 2011.

ly. This year, the plant will start producing the X1 crossover. The company also will expand production of its Da Dong assembly plant, also in Shenyang, to more than 100,000 units a year.

ufacturing plant in Chengdu in the third quarter of 2013 with a capacity of 150,000 units, and is considering a second Chinese assembly plant in the north China city of Daqing.

NO MORE TAXIS
In China, PSA/Peugeot-Citroen is trying to reinvent itself. Two decades ago, the French automaker was known mostly for the red Citroen Fukang taxis that plied Beijings streets. PSA has updated its lineup, but the automaker sold only 404,437 units last year, according to LMC Automotive. PSAs market share of 3.1 percent was a fraction of Volkswagen brands 13.2 percent share. Now, PSA is counting on Citroens DS model lineup to upgrade its image and expand sales. In 2010, PSA formed a 5050 joint venture with Chongqing Changan Automobile to sell the DS line in China. This year, the partners will introduce the DS3, DS4 and DS5, which will be sold separately from other PSA models in a network of premium showrooms. At first, the vehicles will be imported into China. In 2013, the partners will produce the DS5 in the Shenzhen plant, which will have an initial capacity of 200,000 units. On top of [the DS5], we want to develop and build a flagship inspired by the Metropolis concept after 2013, PSA CEO Philippe Varin told Automotive News Europe. He added that PSA may also team with Changan to launch a brand focused on entry-level buyers. Theres more. PSA and its other Chinese joint venture partner, Dongfeng Motor Group, plan to spend 1.3 billion euros over the next five years to introduce 12 new models and build a third assembly plant in Wuhan. Varin said PSA wants to increase its annual capacity in Wuhan to 750,000 units. PSA is counting on its two joint ventures to generate a combined market share of 8 percent in China by 2020, which would be enough to vault it into the countrys top five automakers based on sales.

STARTING OVER
In China, Fiat Group still is recovering from the mistakes of the past. Its former joint venture partner, Nanjing Automobile, got into financial trouble and was acquired in 2007 by the Shanghai Automotive. Left without a Chinese partner, Fiat was forced to rely on imports, which drove up the price of its vehicles, hurting sales. In 2009, Fiat formed a 50-50 joint venture, Guanqi Fiat, with Guangzhou Automobile Industry Group. The partners are investing 600 million euros in their joint venture to build an assembly plant in the southern China city of Changsha. Initially it will produce 140,000 units annually, rising to 300,000 units annually by 2014. In July, the new plant will start producing the Dodge Dart, which will be rebadged as a Fiat sedan. Automotive News Europe has reported that the partnership will export the Chinese-built vehicles back to Europe. To re-establish the brand, Fiat also is importing a small number of 500s to China. But Lin Huaibin, a Shanghai-based analyst for IHS Automotive, is not optimistic about Fiats prospects. Fiat is a weak brand in the eyes of Chinese consumers, he said. Also, Fiats locally built compact car will encounter strong competition, since that segment is very crowded in China. GMs Germany subsidiary, Opel, also is weak in China, but there are no plans to change that. Opel sold about 5,000 vehicles in China in 2011 and expects to sell about 5,500 this year, Kevin Wale, head of GM China operations told Automotive News Europe. He added that GM has no plans to build Opels in China in the foreseeable future. The bottom line? Of the European automakers, only Volkswagen has the financial resources to battle GM for dominance of Chinas mass market. Likewise, Audi, BMW and Mercedes are likely to dominate Chinas luxury market for years to come. While PSA and Fiat are introducing new models and building new plants, its not clear that either has the financial resources to mount a serious challenge especially at a time when their European operations are under siege. For now, at least, the German automakers have a firm grip on Chinas fast-growing market.

THE CONTENDERS
Daimler and BMW are challenging Audis grip on Chinas luxury market. Last year, Daimlers China sales jumped nearly 31 percent to 193,339 units. Daimler enjoyed strong demand for its locally built Mercedes C-class sedan and its stretched Mercedes E-class sedan. Now, Daimler is expanding its lineup. Its joint venture, Beijing Benz Automotive, launched production of the GLK crossover in December, part of an ambitious 2 billion euro expansion project. Daimler also plans to produce three compact car models in China starting in 2013, build four-cylinder engines and expand production of its C- and E-class sedans. Over the last few years, we have been catching up very quickly in China, Daimler CEO Dieter Zetsche said. In 2015, we expect sales of more than 300,000 units in China, of which two-thirds, or 200,000, will be produced locally. Zetsche added: We are continually in growth mode. In China, there are more than 120 billionaires and about 670,000 millionaires. Until they are all driving the S class, we still have things to do. Last year, overall China sales of the BMW and Mini brands jumped nearly 38 percent to 232,586 units. China has become BMWs third-largest market, and the company is investing 1 billion euros to expand production of its assembly plant in Shenyang to 200,000 units annual-

VOLVO GOES UPSCALE


Like PSA, Volvo is going upscale. After some gentle prodding from its new owner, Zhejiang Geely Holding Group, Volvo will upgrade its model lineup to compete with the German luxury brands. The company also hopes to sell 200,000 units annually in China by 2020 up from an expected 48,000 to 49,000 this year. China is key to Volvos plan to sell 800,000 units globally by 2020, up from 449,255 last year. To do so, it will open a new man-

Harald Hamprecht contributed

10

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MARCH 2012

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COVER STORY

iStockphoto.com/lucaciferri

BY LUCA CIFERRI

Defying the downturn


How European automakers are bracing themselves for a tough 2012

uropes volume brands know they will face a tough 2012 and many are already taking action.

PSA/Peugeot Citroen will cut thousands of jobs to reduce costs by nearly 1 billion euros, Renault will slash dealers in the UK, Opel will undergo its second cost restructuring in two years, Fiat will again delay new product launches and Ford will cut production days at its Belgian car factory. Car manufacturers are making the moves to protect themselves from a looming recession that will make reaching European sales and overall profit goals very difficult. The brands most at risk from the downturn include Renault, Citroen and Opel, all of which relied on Europe for 52 percent or more of their total sales last year. The consensus is that European car sales will fall in 2012. The magnitude of the decline ranges from 7 percent to 2 percent

No one made money in Europe last year.


Fiat-Chrysler CEO Sergio Marchionne

January. We are seeing some countries back in recession and others hovering around but not quite in recession. Said former General Motors Europe President Nick Reilly: Peugeot Citroen have said theyre going to have to lay off a lot of people and just about everyone is talking about overcapacity and difficulties. Four of Europes five major markets Italy, France, Spain and the UK are expected to be hit hard this year. They collectively represented 49 percent of European car sales in 2011. Carmakers have dealt with downturns before and they usually bounce back quite fast, Reilly told Automotive News Europe, but I dont think theyll bounce back very fast this time.

The industry also is keeping a close eye on Brussels as European Union leaders seek to stabilize the euro (see box, page 16). The future of the currency has been questioned because the financial markets have lost confidence in the ability of some key EU member states to fix their debt problems. European new-car sales also are being affected by falling consumer confidence, rising unemployment and tightening bank lending. Europe is a very challenging business environment at the moment and may stay challenging for some time, Ford Chief Financial Officer Lewis Booth told reporters in late

NO CASH FOR INCENTIVES


As seen during the last global economic downturn, drastic times require quick and
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EUROPE-CENTRIC
With Europe at risk of a recession in 2012, automakers heavily reliant on the region could be in store for tough year (2011 passenger-car sales below)
EUROPE WORLD EUR. % SHARE

decisive actions, including production stoppages or slowdowns, staff cuts, retail network restructuring and new-product freezes. In 2009 and 2010, many European countries protected their struggling national automakers by offering billions of euros in cash incentives to get people to trade in their old cars for newer, smaller, more environmentally friendly models. Volume brands were the biggest beneficiaries of government-funded subsidies of up to 5,000 euros. The incentives were a blessing to automakers that did not move fast enough to balance their factories' output with demand, leaving them stuck with a huge inventory of vehicles, many of which they needed to deeply discount to move out of the showrooms. Today, however, many of the governments that offered incentives in 2009 and 2010 are in financial trouble. Austerity means the capacity to help the industry will be greatly diminished. Government funding for carmakers effectively bailed out the industry in 2009, Michael Tyndall, an auto analyst at Barclays Capital in London, said in a report. Said Jason Wakelam, leader of Pricewaterhouse-Coopers' UK Automotive Transaction Services: The key question for 2012 is to what extent the calls for consolidation in the sector will be realized.

Opel/Vauxhall Citroen Renault brand Peugeot Fiat brand VW brand Ford

989,261 770,726 1,004,920 911,703 682,140 1,684,150 1,077,759

1,132,000 1,243,000 1,918,212 1,888,200 1,485,000 5,090,000 *

87 62 52 48 46 33 *

* Ford declined to provide a breakdown of global car sales


SOURCES: ACEA, COMPANIES

ing, with little improvement in 2013, Tyndall said in a report. The analyst said that VWs capacity usage rate is about 85 percent to 90 percent while Renault and Opel are closer to 60 percent and Fiat Auto is below 50 percent. Adam Jonas, an auto analyst at Morgan Stanley, said that Fiat, Opel, PSA and Renault would have to cut a combined 1.5 million units in capacity in the next two years to become profitable.

HOW DID WE GET HERE?


Industry watchers say that one reason Europe-centric automakers are at risk is because most did not adapt their production footprint to the lower demand during the last downturn. Analysts estimate that Europe has 2 million to 5 million units of overcapacity. In 2007, about 16 million cars were sold in Europe while the 2012 total is likely to be below 13 million. The capacity issue [in Europe] was not addressed during the past recession, Ford of Europe CEO Stephen Odell told Automotive News Europe. I cant change other peoples capacity. I can only make sure I build the vehicles I have demand for. Since 2009, only two automaker plants have closed (Opels Antwerp, Belgium, factory and Fiats plant in Termini Imerese, Italy) while another is dormant (Saabs plant in Trollhaetten, Sweden) and two are set to stop production soon (Volvos plant in Uddevalla, Sweden in 2013; Mitsubishis factory in Born, Netherlands in 2012). Europe continues to have more capacity than demand, and the problem is expected to worsen. PwC figures show that by 2015 Europes 112 plants will have an installed capacity of 22.8 million units, up from 21.1 million from 113 plants in 2009 and almost half a million units more than the 22.4 million capacity from 117 plants in 2007. The utilization rate in 2015 is expected to be 82.4 percent compared with 80.9 percent in 2009 and 84 percent in 2007, according to PwC. An automaker typically needs at least 80 percent utilization for a plant to be profitable. Barclays Tyndall doesnt expect the average utilization rate at Europes car plants to come close to that number this year or next. At a 70 percent utilization rate on average in 2012, we expect the mass EU market to remain loss-mak-

OLD PROBLEM
Fiat-Chrysler CEO Sergio Marchionne has warned about the dangers of overcapacity for years. He spent much of 2010 and 2011 fighting Italian unions to create a more profitable system for making cars. A key move was the November closure of Fiats plant in Termini Imerese, where the company says it costs an additional 1,000 euros per unit to produce cars because of the high logistics cost associated with manufacturing on the island of Sicily. Opel, Fiat and PSA are considering more tough measures to cut capacity, including factory closures. Other European car plants at risk of closure include PSA's factories in Aulnay, near Paris, and Valenciennes, northern France; Fiat's Mirafiori plant in Turin; Opels German factory in Bochum and Ellesmere Port, England; and Mitsubishi's Dutch plant. Said Barclays Tyndall: For the likes of Fiat and Peugeot the misery in Europe continues to mount up. The solution as we see it is to reduce labor costs and capacity, but the social and political resistance to this has been substantial. Italy is scheduled to hold its general election in March 2013, but voting could be pushed forward to this summer because of the countrys political instability. Its unlikely that any restructuring announcements affecting France will come until after the countrys general election this spring. Its also unlikely the French state will sit back quietly if Renault or PSA attempt to close factories in France, despite French auto plants having the auto sectors third-highest labor costs after
EUROPE CONTINUED ON PAGE 14

REUTERS

Despite Opels closure of its plant in Antwerp, Belgium, analysts estimate that carmakers still have up to 5 million units of overcapacity in Europe.

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Germany and Belgium, according to data from the German auto industry association (VDA). A condition the French government placed on PSA and Renault when it gave each a 3 billion euro loan in 2009 was that they keep their local plants open. European governments and automakers maintain close ties because the industry is such a major employer. In Germany, one out of every five jobs is connected to the auto industry, in France, its one in 10. About 12 million families depend on automotive employment, with 2.3 million direct jobs, according to industry association ACEA.

How bad will it be?


Estimates vary on how bad European car sales will be in 2012, but what is not being debated is that overall volume will decline for the fifth consecutive year. Europes car dealers association (CECRA) sees passenger-car sales falling 7 percent to about 12.6 million. PricewaterhouseCoopers predicts a 5 percent drop, taking Europes new-car volume to a little less than 12.9 million units. Barclays Capital sees sales falling to 12.75 million. RenaultNissan CEO Carlos Ghosn is more optimistic. He expects European volume down only 2 percent to 3 percent due to aggressive pricing on new cars. Regardless of the depth of the drop, Europe is at risk of being down by more than 3 million units compared with a peak of 16 million units sold in 2007.

GLOOMY OUTLOOKS
A number of those jobs are at risk as companies try to cope with lower sales volumes. We anticipate that the steepest declines will be in France, Italy and the UK, said Falk Frey, a senior vice president at Moody's rating agency. Automakers in these countries will suffer most from the austerity measures initiated by their governments, as well as a continued challenging economic environment and the subsequent expected fall in consumer spending. The French auto market is forecast to drop by up to 8 percent to about 2 million passenger cars and 400,000 light commercial vehicles in 2012. Its a decline that many expected because scrapping incentives pulled forward car sales in the first quarter of 2011. This number does not show a crisis on the market, Bernard Cambier, Renaults sales chief for France, said in an interview. Cambier also expects first-quarter French sales to be down 17 percent (see story, page 6). Renault CEO Carlos Ghosn told French radio in January that the decline in France would be tough for everyone, not just for his brand, which has a 24.7 percent market share. Italian new-car sales are forecast to decline 9 percent to 1.6 million in 2012, according to the foreign automakers association, UNRAE. The last time Italian sales were below 1.65 million was 1984. The gloomy 2012 forecast follows an 11 percent decline last year to 1.75 million, which is a dramatic change from the peak of 2.5 million new cars sold in Italy in 2007. With its nearly 30 percent market share in Italy, Fiat stands to be hit the hardest by the countrys sales slump. In the UK, where 2012 sales are forecast to slip 6 percent to 1.83 million, automakers already are trying to protect themselves. Renault, Peugeot, Nissan, Mitsubishi and Subaru are cutting unprofitable model lines. Peugeot has stopped UK sales of the 4007 medium SUV; Nissan dropped the Murano large SUV; Mitusbishi halted sales of the Lancer compact; and Subaru stopped selling the Impreza compact. Renault will stop taking orders for five models the Espace large minivan, Modus small minivan, Laguna mid-sized car, Wind roadster and Kangoo van and cut its UK dealer network from 200 to 140 by 2013 to try to help its money-losing UK operations become profitable.

the quality and reliability of today's cars is superior to past models. In 2010, the average age of a car in Germany and France was 8.5 years, up from 7 years in 2000, according to Morgan Stanley. Unlike in the U.S., the average of the car park in most European countries is not old enough for pent-up replacement demand to offset the potential drop in sales caused by declining consumer confidence, Morgan Stanley analyst Laura Lembke said. She said that the average age of U.S. cars 9.5 years at the end of 2010 contributed to the countrys 10 percent increase in 2011 new-car sales to 12.8 million units. Another challenge facing volume brands is that premium automakers are entering their turf. BMWs Mini range and the 1 series, Audis A1 and A3 and Mercedes-Benz's new B class and forthcoming A class are targeting buyers who might have picked an Opel, Peugeot or Renault model in the past. The numbers speak for themselves. In 2011, premium and nearpremium brands increased European new-car sales 6.5 percent compared with a 2.8 percent decline for volume brands, according to ACEA. As a whole, the market declined 1.4 percent to about 13.6 million units. Volkswagen Group was able to buck this trend. Its three volume brands VW, Skoda and Seat all increased European sales last year. Much of the reason for this is that 2011 sales in Germany rose 8.8 percent to 3.2 million. The VW brand alone has a 21.6 percent share in Germany.

VW PROFITABLE OR NOT?
While VW Groups volume brands reported increased European sales in 2011, some question whether this resulted in a profit. No one made money in Europe last year, Fiat-Chysler CEO Sergio Marchionne said during an interview in January, adding that if someone said its brand did make a profit, he is just lying. Marchionne was so blunt because he feels that sales incentives offered last year were so high that it would have been impossible for any volume brand to have made money in Europe, but more on that later. When it comes to Marchionnes assessment about profitability, some disagree. VW is the only volume brand that
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BETTER QUALITY, NEW RIVALS


While many macroeconomic factors are affecting car sales, there is another reason why Europeans are not buying as often as they used to:
Renault will stop sales of the Wind (shown) and four other models in the UK.

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COVER STORY

Euro scenarios
Despite questions about the future of the euro, Audi CEO Rupert Stadler believes strongly that the 10-year-old currency must survive. We need a strong European economic region if we are to be competitive from a global perspective. There is no alternative to the euro, the CEO said in a statement recently. Others are not so sure whether the euro will be around to celebrate its 15th birthday. I think short term the euro will survive, Ford of Europe CEO Stephen Odell said, but, honestly, I do not know what could happen in 5 to 10 years. How much of an effect could Europes sovereign debt crisis and the possible collapse of the euro have on new-car sales? Analysts at PricewaterhouseCoopers see four possible scenarios. 1. Monetary expansion 13.5 million sales The European Central Bank gets approval to inject significant liquidity into vulnerable economies and banks. Recession is avoided; interest rates are kept low in the short term; inflation rises while the euro depreciates. 2. Greek exit 12.7 million sales Greece leaves the euro. The 16 remaining eurozone members seek to protect the currency through tough fiscal discipline and other measure to boost investor confidence, but the area still suffers a recession that lasts up to two years. 3. New currency bloc 12.4 million sales A Franco-German acknowledgement that the existing eurozone is unsustainable leads to the creation of a new, smaller and more tightly regulated currency bloc. The new bloc benefits from a boom in domestic demand. Economies that are excluded suffer a sharp currency depreciation and severe economic contraction. 4. Defaults 11.9 million sales A program of voluntary defaults is agreed on for the most indebted countries, which triggers a contractionary debt spiral and a prolonged recession, lasting between two and three years, and which results in a cumulative loss in gross domestic product of about 5 percent.

Ford will cut production days at its factory in Genk, Belgium, where it builds the Mondeo (shown), S-Max and Galaxy.
EUROPE CONTINUED FROM PAGE 14

makes meaningful profits in Europe, a result which is a function of scale, a modest price premium and a sales mix that favors Germany, arguably the strongest economy in Europe, and the compact segment with the Golf and mid-sized cars with the Passat, Barclays Tyndall said in a report. Whether Tyndall or Marchionne is correct cant be proved because VW, like most automakers, does not provide detailed financial results for Europe or any of its sales regions. Another advantage that VW has is that it depended least of all the European automakers on Europe just a third of its global sales come from the region (see box, page 13). Arguably, the risks at VW are diminished by its diversification. It is Europes largest carmaker, but relies on Europe the least for sales, Tyndall said. This diversity helped VW's rise to No. 2 in global sales. The result has been huge profits, which are reinvested into product. Ford is the only automaker to report detailed financial results for Europe. In its Europe region, which includes Russia and Turkey, Ford increased 2011 unit sales 1.8 percent to 1.6 million units, but it swung into a $27 million pre-tax operating loss from a $182 million profit the year before. Ford is cutting production days at its plant in Genk, Belgium, because of anticipated lower new-car sales in Europe. The factory makes the Galaxy and S-Max large minivans and the midsized Mondeo. While GM does not provide detailed financial results per brand, it is estimated that Opel/Vauxhall has lost more than $13 billion since 1999. Fiat executives, meanwhile, admit that the automaker has been losing money in Europe for years, but the company had declined to provide detailed figures until recently. Fiats European auto unit lost 500 million euros in 2011, Marchionne said during a conference call in January.

There is no alternative to the euro."


Audi CEO Rupert Stadler

UNSOLVED ISSUES
Europes volume automakers must take on some blame for the struggles they face now. Here is a breakdown of some of the problems. PSA has been slow to expand its presence outside Europe and now faces high investments costs in places such as China and Russia at the same time its core European market is declining. To cope with this, the automaker said in late 2011 it would need to cut 6,000 jobs in Europe, which would help reduce costs by 800 million euros. PSA blames the Europes difficult economic environment for its decision in

January to pull Peugeot brand from the Le Mans endurance racing series. The automaker said it wants to concentrate resources on sales performance in 2012. Morgan Stanley analyst Stuart Pearson thinks the move makes sense. Product momentum is slowing at PSA, with the Peugeot 208 the only major launch in 2012, whereas competitors are accelerating in the Band C-segments, Pearson said. Fiat is still trying to rebound from a big lack of new product. To cope with the last downturn, Fiat delayed a number of key models,
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leaving it vulnerable as its aging models were forced to compete with all-new cars from rivals. Fiat will continue to suffering from the decision as the debuts of the next-generation Punto subcompact and Bravo compact have been pushed back to early 2014 from mid-2013. As production rates fall, Fiat will need to focus on cash preservation rather than investment, Pearson said. He thinks that Fiat has the liquidity and flexibility to survive another EU recession, but at the cost of a weaker product and technology portfolio. Fiat also has been hit hard by its late entry into fast-growing markets such as China, Russia and India. Opel spent years producing poor products and GMs decision to sell and then to retain the company dented the brands image, particularly in its home German market. It also has not expanded outside of Europe. Opel hopes that its new restructuring program will boost sales, cut costs and end its chronic financial losses. Opel, which cut 5,800 jobs in Europe last year, plans to axe several hundred product engineering posts at its headquarters in Ruesselsheim. In addition, Opel has halted plans to debut a new coupe in 2013. The automaker also is negotiating to have production of Chevrolets moved to it European plants from South Korea and aims to increase sales outside of Europe to 100,000 from 20,000 last year. For years, Renault models were criticized for their poor quality and reliability. New Renault Chief Operating Officer Carlos Tavares says that while quality has improved in the last seven years, it is likely to take a longer to change customer perception. One way he wants to improve Renaults financial performance is by closing the price gap it has with key competitors. He said that Renaults are currently priced 2 percent below Citroens, 5 percent less than Peugeots and 10 percent less than VW brand models. Renault also is hurt by its heavy reliance on Europe, which accounts for 52 percent of its sales, and its failure to set up manufacturing in China.

Analysts estimate that net pricing the vehicle transaction price after incentives are deducted decreased 1 percent last year and could decrease even more this year. Said Ford CFO Booth: Incentive spending is increasing in Europe and this is not healthy for the business. There were already signs in January that the price war was escalating. To lure minicar buyers in France, Chevrolet reduced the price of the Spark minicar by 3,000 euros to 5,900 euros. Citroen responded by slashing 2,360 euros from the C1s price, pushing it down to 6,990 euros. To stay competitive, VW had to offer a 1,400 euro discount on its new Up minicar, pushing the price down to 7,990 euros. In Italy, Chevrolets decision to reduce the Sparks price by 2,225 euros to 6,950 euros caused a chain reaction that resulted in Citroen slashing the C1s price by 2,300 euros and Fiat cutting the price of the previous-generation Panda by 2,600 euros. Not everyone is complaining about the price war. We believe the difficult situation will offer us an opportunity to expand our market share in Europe, Hyundai Chief Financial Officer Lee Won-hee said during an recent earnings conference. Hyundai outperformed the European market last year, with its sales up 12 percent to 398,129 units, and plans the brand to grow another 15 percent in 2012 to 465,000 vehicles.

TIGHTENING CREDIT
The price of a new car becomes irrelevant if the buyer cant find a way to pay for it and getting a loan will be tougher this year. Morgan Stanley expects EU banks to cut lending by up to 2.5 trillion euros over the next 12-18 months. It is part of the fallout from recapitalizations resulting from the sovereign debt crisis. Morgan Stanley estimates that about 75 percent of all car sales in Europe involve some form of financing. Morgan Stanleys Lembke estimates that up to 35 percent of sales are handled by automakers finance arms and that third parties, mostly banks, take on 35 percent to 40 percent of the business. She said that the automaker that want to expand their finance divisions now will need a strong balance sheet, lots of liquidity and good access to credit markets. Only German automakers have enough liquidity to expand their financial arms, she said. This expansion is already happening. BMWs recently acquired Dutch lender INGs leasing business and VW announced recently it
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PRICE WAR
Winning the new-car pricing battle is never easy and it became harder in Europe last year. Declining sales forced automakers to use profit-diminishing incentives to lure buyers. Profitability on making cars has gone from poor to utterly dismal, with vicious pricing, said Max Warburton, an auto analyst at Bernstein Research in London.

ROUGH ROAD AHEAD


Europes passenger-car sales are forecast to rebound starting in 2014; sales in thousands (000) 2007 France Germany Italy Spain UK Other 2,065 3,147 2,493 1,615 2,404 3,075 2008 2,050 3,090 2,162 1,161 2,132 2,966 13,561 1,179 14,717 2009 2,302 3,807 2,157 953 1,995 2,454 13,667 858 14,526 2010 2,252 2,916 1,960 982 2,031 2,836 12,982 804 13,786 2011 2,204 3,174 1,748 808 1,941 2,938 12,813 761 13,574 2012E 2,028 3,078 1,654 760 1,825 2,738 12,083 669 12,753 2013E 1,987 3,125 1,696 767 1,770 2,793 12,138 649 12,787 2014E 2,033 3,274 1,755 800 1,923 2,919 12,704 682 13,385 2015E 2,070 3,378 1,834 838 2,076 3,042 13,240 716 13,955

W. Europe 14,798 New EU Total 1,162 15,960

SOURCE: BARCLAYS CAPITAL

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Peugeot hopes the arrival of the new 208 will give it a sales boost in Europe.

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will increase financial backing for its vehicles in Europe by a third. The automaker will finance or lease 40 percent of new VW Group models sold in Europe within four years compared with 30 percent in 2011, Frank Witter, the head of the manufacturer's financial unit, told Bloomberg in January. We can increase the penetration in the European markets, Witter said. In Germany, 54 percent of all Volkswagen group cars are financed or leased through us.

segments where profits are razor thin. Bernstein Research analyst Warburton likes with the idea, but sees obstacles. There are so many obstacles to full-blown mergers that the only way to save capital may be to share platforms, products and plants, he said. However, it doesn't really solve the capacity issue and OEM executives will be scared that it will jeopardize brands. Warburton believes automakers are most likely to continue cooperating on minicars successful examples of this trend include the PSA/ Toyota joint venture in Kolin, Czech Republic, to make the Citroen C1, Peugeot 107 and Toyota Aygo and Fiats deal to use its 500 platform as the basis to produce the Ford Ka. The question is whether the downturn will force automakers to deepen their relationships will rivals.

WILL THINGS GET BETTER?


Forecasts show that it will take years before automakers will see rising demand within Europe. Barclays does not see a year-on-year increase until 2014, when new-car sales are expected to rise to 13.38 million. That total, however would be about 220,000 units below 2011s volume and 2.6 million under the 2007 peak. With demand muted, governmentfunded incentives unlikely and shutting plants probably out of the question, volume automakers will need to look at other options.

Rumors about a possible alliance between Fiat and PSA have been floating around since late 2008. Marchionne said his company was not Ford of Europe CEO Stephen Odell talking to PSA, but he did say it is open to add a third partner to the alliance to share investments and increase scale. PSA said it would be open to a tie-up with another large One possibility is to export more from Europe to increase plant utiEuropean carmaker, but that conditions were not yet right for such lization. German premium brands Audi, BMW and Mercedes have an alliance. PSAs new brand boss, Frederic Saint-Geours, was been so successful at this that each had to ask employees to quoted in media reports in January as saying that the French shorten their Christmas holiday breaks to meet rising global automaker was completely open to an alliance that boosts perdemand. What keeps volume brands from doing this are import formance while preserving its independence, but added that PSA duties ranging from 25 percent to 35 percent, which would make would need to find the right partner. their cars too expensive to compete against domestic brands. For mass OEMs, shipping cars from Europe to emerging markets is not, in general, a profitable solution, Barclays Tyndall said. Another way volume brands can boost capacity at European plants is to take on work from factories outside of Europe. Opel wants sister brand Chevrolet to transfer some production from South Korea to Europe. Some industry watchers dont like that idea. Making Chevrolets in Germany is not the way to go, Morgan Stanleys Jonas said. Such an arrangement appears to skirt the issue of excess capacity in the region and is a climb-down from what we had believed GM was prepared to do to achieve sustainable profitability for GM Europe. Another option is to set up new joint ventures to build passenger cars, which would reduce product investment costs and increase economies of scale. Fiats Marchionne is not only looking for ways to leverage brands within his alliance. He also has called for more cooperation between volume automakers on minicars and subcompacts, two

The capacity issue [in Europe] was not addressed during the past recession.

PRODUCT STILL KING?


If product is still king, many European volume brands may defy the market downturn this year by launching new generations of their core models. In late January, Fiat began selling the new Panda. Fiat hopes the Panda will remain Europes best-selling minicar, a title the car has held since 2004. At the upcoming Geneva auto show, Peugeot will unveil its new 208 subcompact, which replaces the companys best seller, the 207, which in 2007 was also Europes No. 1 seller overall. At the Paris auto show in September, VW will unveil the seventh generation of its Golf compact. The Golf has been Europes No. 1 selling model for four consecutive years and seven times since 2000, according to data from JATO Dynamics. Said Fords Odell: At the end of the day, people with the best product are the ones to win in the market.

Bertrand Gay and Nick Gibbs contributed

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NEW CARS

Class of 2012
Automakers line up exciting new products
Key launches in segments from luxury cars to minicars make 2012 an exciting year for new products. Below we list whats coming to showrooms throughout the year. Launch dates are for Germany unless stated otherwise.

April:
Porsche Boxster

MARCH
BMW X6 face-lift Fiat Panda Hyundai i30 5 door Kia Optima Lexus GS Mercedes SL Porsche 911 Cabrio Seat Ibiza face-lift Subaru XV

AUGUST
Audi A3 Hyundai Santa Fe replacement Mercedes G class face-lift VW Beetle Cabrio

SEPTEMBER
BMW 1-series 3 door BMW 3-series wagon BMW M6 Coupe Ford B-Max Ford Focus Electric Kia Ceed wagon Kia Sorento face-lift Kia Optima hybrid Mercedes CLS Shooting Brake Opel Astra 5 door face-lift Opel Astra sedan

APRIL
Citroen C4 Aircross Hyundai Genesis Coupe face-lift Mazda CX-5 Opel Combo Peugeot 208 Peugeot 4008 Porsche Boxster

COMPUTER-RENDERING: CHRISTIAN SCHULTE

Key battles
The seventh-generation Volkswagen Golf (shown) arrives with a sportier look later this year, but Europes best-selling car faces increased competition from a fresh Hyundai i30 and a new Kia Ceed. The latest Audi A3 goes on sale in June but its lead in the entrypremium segment will be challenged by a new-look Mercedes A class with coupe styling and a fresh BMW 1 series. Among subcompacts, 2012 is the year of the French with the debut of the Peugeot 208. Toyota expands its hybrid offerings while Renault and Ford launch EVs.

MAY
Audi A6 Allroad Audi A6 hybrid Dacia Lodgy Hyundai i20 face-lift Porsche Boxster Seat Mii Toyota Prius Plus Toyota Yaris hybrid VW Up 5 door

OCTOBER
BMW 3-series hybrid Fiat 500L 5-seat (Italy) Honda CR-V Mercedes A class Mercedes GL Mitsubishi Colt replacement Renault Zoe Skoda Rapid Subaru BRZ Toyota GT-86 Volvo V60 plug-in hybrid

JUNE
Audi A8 hybrid BMW 6-series Gran Coupe BMW 7-series face-lift Kia Cee'd 5 door Mercedes E300 Bluetec hybrid Mercedes GLK face-lift Renault Megane face-lift Skoda Citigo

NOVEMBER
Audi R8 E-tron Honda CR-V Mazda6 Opel Mokka Renault Clio

DECEMBER
Fiat 500L seven-seat (Italy) Hyundai i30 3 door Opel Junior Seat Leon Skoda Rapid VW Golf

June:
BMW 6-Series Gran Coupe

JULY
BMW 5-series hybrid Chevrolet Malibu Ford Kuga Hyundai i30 station wagon Lancia Flavia convertible Opel Astra OPC Toyota Prius plug-in hybrid Volvo V40

November:
Opel Mokka

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>

MORE ON THE WEB: For the latest show news, go to our Geneva page at www.autonewseurope.com

Downsized dynamic
Geneva show debuts showcase how automakers are using downsizing to their advantage

&

olume automakers and luxury brands will use the Geneva auto show to debut downsized cars that in many cases are lighter and use less fuel but still pack power and emotional appeal. This corresponds with a trend in which car buyers are opting for less expensive, more fuel-efficient models as economic hard times hit consumer spending. In the entry-premium segment, the new Audi A3 will meet a tougher challenge from a

Mercedes A class that ditches its boxy design for a sporty look. Both cars debut in Geneva and both will battle the BMW 1 series, which gets refreshed later this year. In Europes biggest segment subcompacts Peugeot will unveil the 208, a car that weighs less and is shorter than the 207 it replaces. Ford and Fiat will debut their latest entries in Europe's expanding small minivan segment. The two automakers take different

approaches to win customers. The Ford BMax has a pillarless design and rear sliding doors to make access to the cars cabin much easier for the target group of young families while Fiat hopes to harness the appeal of the 500 minicar with a larger fiveand seven-seat version of the retro-styled city car called the 500L. VW Group accelerates its aim of boosting its presence in the minicar segment, an area where the company has not yet been successful. Three of its brands, VW, Skoda and Seat, debut five-door versions of the groups new entry-level family.

Audi
Lighter A3 gets high-tech to fend off Mercedes A class
Audi's key launch is the A3 but the A6 Allroad and A1 Quattro will also make their public debuts in Geneva. The new A3 is sleeker and lighter than the previous-generation model and it is the first Audi to have the brands new infotainment platform. Features include a plug-in module that enables hardware to be easily updated, a new MMI control panel with a handwriting recognition system that allows users to enter characters by finger movement and an optional 7-inch screen with 3-D graphics. Audi counts on the high-tech features, along with a better quality interior and a more fuel-efficient engine range, to help the A3 keep its lead in Europes entry-premium segment against the new Mercedes A class, which also debuts in Geneva, and a redesigned BMW 1 series that arrives later this year. The A3 will be offered in three-, five-door, sedan and convertible variants. The U.S. market only gets the sedan. The A3 is the first of about 40 vehicles to use parent VW Groups new MQB modular platform that will also underpin the new VW Golf. The third-generation A6 Allroad that debuts in Geneva has fuel economy improvements of up to 20 percent and is also 70kg lighter than the current model. The A1 Quattro adds a high-performance variant to the three-door hatchback and fivedoor Sportback in Audis entry-level range, which is aimed at younger buyers. Audi will also show a convertible version of the RS5, a high-performance version of the A5 with the same 4.2-liter V-8 engine as the RS5 coupe.

Bertone
One of Stile Bertones most famous cars, the legendary 1970 Lancia Stratos Zero, inspired a concept for a high-performance coupe that will be unveiled in Geneva to mark the Italian design houses centenary. The midengine concept is called Nuccio after Giuseppe Nuccio Bertone, who transformed the little-known family business into an Italian design icon during his 60-year leadership of the company. He died in 1997 at 83. Bertone design director Mike Robinson took inspiration from the Lancia Stratos Zero concept to create the Nuccio, which has innovations such as a tensile steel roof that offers high structural resistance at a low weight.

Bertone Nuccio

Legendary Lancia Stratos Zero inspires futuristic concept


The rakish, 42-year-old Stratos Zero is still modern today in terms of design, but its only 830mm tall, making it almost impossible for a big man like Robinson to drive it. The Nuccio has a height of 1220mm. We decided to take one of the most spectacular concept cars in the history of the company and in the history of the automobile for that matter and create a futuristic interpretation of it, Robinson said. Previous attempts to make a modern interpretation of the Stratos Zero fell short of auto enthusiasts expectations. Robinson said. The problem with reinterpreting masterpieces is simple: If you come too close to the original, you've created zero added value, Robinson said. If you stray too far from the original, it ends up having nothing to do with the masterpiece.

Audi A6 Allroad

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BMW
Sleek but practical sedan targets Mercedes CLS
With the 6-series Gran Coupe, BMW enters the fast-growing niche for coupestyled four-door sedans. The Gran Coupe will rival the Mercedes-Benz CLS, Audi A7, Porsche Panamera and Aston Martin Rapide. BMW hopes the Gran Coupes sporty styling combined with practicality will win buyers. The car is 113mm longer than the 6-series coupe and has 4+1 seating with fold-down rear seats that boost cargo space to 1,265 liters from 460 liters. The

BMW 6-series Gran Coupe


6-series Gran Coupe will start at almost 80,000 euros in Germany when it goes on sale shortly after its Geneva debut. The car will have the same engines and driver assistance systems and mobility services offered on the 6-series coupe and convertible versions and will be built alongside them as well as the 5- and 7-series models in BMW's factory in Dingolfing, Germany. BMW will also debut a 381-hp, 3.0-liter, sixcylinder super diesel with triple turbocharging that will be offered in the 5 series, X5 and X6 under the new M Performance label. The X6 also gets exterior styling changes and optional adaptive LED headlamps, which BMW says are a first in its segment.

Chevrolet
Chevrolet will unveil a Cruze station wagon, a variant that the automaker hopes will boost the brands fleet sales in Europe, where wagons are popular company cars. The wagon will also get a 1.7-liter diesel engine with CO2 emissions below 119g/km. The powerplant also will be offered in the Cruze hatchback and sedan models in Europe. The wagon features a redesigned front end that will be rolled out across Cruze range. With sales of 48,564, the Cruze was Chevrolets No. 3 seller in Europe last year after the Spark and Aveo, according to JATO Dynamics.

Citroen
The C4 Aircross will give Citroen a compact SUV rival to the VW Tiguan, Hyundai ix35 and Ford Kuga. Like its sibling, the Peugeot 4008, the five-seat C4 Aircross is based on the Mitsubishi ASX. The C4 Aircross will be available with two- or four-wheel drive in some markets when it goes on sale in Europe this summer.

Citroen C4 Aircross

Dacia

Ferrari
The Geneva debut of the 599 GTB Fiorano replacement will complete Ferrari's frenetic product renewal that helped the supercar brand to sell a record 7,195 cars last year. The twoseat coupe will have a 6.3-liter gasoline direct-injection V-12 engine with performance upgraded to 700 hp from 620 hp in the 599 it replaces. The supercar also gets a seven-speed dualclutch transmission to replace the 599s six-speed automated manual gearbox. The new model will be lighter to improve acceleration and reduce fuel consumption. It will cost slightly more than the 599 GTB F1, which in Italy starts at 260,000 euros. European deliveries begin in June and U.S. shipments by year end.

Dacias first minivan, the Lodgy, will be a low-priced competitor in Europes medium minivan segment, which is led by parent Renaults Scenic and Grand Scenic models. The Lodgy will be available as a five- or seven-seat vehicle when it goes on sale later this year, joining the Logan sedan,

Sandero hatchback and Duster SUV in Dacias expanding range. The name Lodgy is based on the English word lodge to convey the minivans ability to comfortably accommodate a family and its luggage. Dacia hopes the Lodgys low price and three-year warranty will attract budgetconscious families.

Fiat

The high-roofed 500L expands the retro-styled 500 range to four models. It will replace the Idea and Multipla models in Fiats lineup and will rival cars such as the Ford B-Max and Mini Countryman. Fiat said the 500L will be a distinctive alternative to cars with traditional designs in the minicar and subcompact segments. It has front-end styling inspired by the 500 hatchback but is taller, wider and longer and sits on a widened version of Fiats small vehicle architecture used by the Punto subcompact. Engines include Fiat's TwinAir turbocharged two-cylinder, 85-hp, 900cc gasoline unit, a 1.4liter gasoline engine with either 77 hp or 105 hp, and a 1-3-liter diesel with 75 hp or 95 hp. The 500L will be offered as a fiveand seven-seat model in Europe but as a five-seater only in the United States. European sales begin in the fourth quarter. U.S. exports begin early next year. Fiat relaunched the retro-styled 500 in 2007 with the 500 hatchback. A year later, the automaker added the Abarth performance version, followed by the 500C convertible in 2009.

Fiat 500L

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Ford
B-Max targets young families with fresh pillarless design
Ford is replacing its slow-selling Fusion small minivan in Europe with the innovative B-Max, which has a pillarless design combined with rear sliding doors to make access to the cars cabin much easier for the target group of young families. The design may help Ford win new customers in a hard-fought segment led in Europe by the Opel/Vauxhall Meriva, which was the first model to bring rear-hinged doors to the segment. The B-Max is the first car to be built at Fords new Craiova plant in southwestern Romania. European sales start in September. Ford will not sell the model in the United States, where it says the minivan would be too expensive for its target buyers. The BMax will be offered with Fords new frugal three-cylinder 1.0-liter Ecoboost turbocharged gasoline engine, which debuted in the new Focus. Prices, specification and the full engine lineup will be announced at the Geneva show. Ford will also show the new Kuga medium

Ford B-Max
SUV. The model is similar to the U.S.-market Escape and improvements compared with the current Kuga include increased cargo space and more high-tech equipment, including remote trunk opening achieved by the driver making a kicking motion under the rear bumper.

Honda
Honda will show a near-production concept of the European CR-V, which is due to arrive in dealerships toward the end of the year. The SUV is largely similar to the new CR-V that went on sale in the United States in December but Honda says it has changed the models ride and handling, and given it a better quality interior to cater to European tastes. The CR-V will be offered in Europe with Honda's new 1.6-liter diesel that also will be sold with the Civic compact and Jazz subcompact. Currently, Honda offers Europeans only a 2.2-liter diesel that is too large in a segment where most buyers want smaller diesels.

Kia Ceed

Kia

Hyundai
Hyundai will preview the next phase of its fluidic sculpture styling with the i-oniq concept car designed at the companys European r&d center in Ruesselsheim, Germany.

Kia has given the Ceed compact hatchback a new look and better-quality interior designed to take the car upscale. The secondgeneration Cee'd combines the styling typically found on a sporty coupe with the space and functionality of a five-door hatchback, Kia says. The five-door Ceed will go on sale in Europe in June as a rival to cars such as the Volkswagen Golf, Opel/Vauxhall Astra and Ford Focus. A Ceed station wagon will arrive in showrooms in September followed by a three-door hatchback early in 2013. A higher performance version is also being planned. The new Ceed family will continue to be built at the automakers Zilina, Slovakia, factory alongside the Sportage SUV and Venga compact minivan.

Infiniti
Infiniti will unveil the Emerg-E concept for a lightweight plug-in hybrid sports car powered by an electric motor and a range-extending gasoline engine mounted in the middle of the vehicle to optimize handling and weight distribution. The concept will also reveal the brands new styling direction.

Mercedes-Benz
Mercedes-Benz has given the new A class a sporty styling to win more young buyers to the brand, ditching the boxy shape of the previous-generation car. The automakers design boss, Gorden Wagener, calls the redesigned car the coolest Mercedes in a long time and the company hopes the A class will be a stronger rival to the Audi A3 and BMW 1 series in the entry-premium segment. Because European buyers are downsizing in increasing numbers, even in the premium segment, the new A class will be a key car for Mercedes in its bid to retake the luxury car lead from BMW. It is based on the new Mercedes Frontwheel Architecture (MFA) that also underpins the new B class, which was unveiled at the 2011 Frankfurt auto show and retains its minivan-like design. Mercedes will launch other small cars on the platform including the CLC sedan and GLC SUV. The A class will launch in Europe in October as a five-door model. A three-door variant arrives in 2013.

Jaguar
Jaguar will unveil a station wagon version of the XF called the XF Sportbrake. The car will compete against models such as the Audi A6 Avant, BMW 5 series Touring and Mercedes E-class wagon.

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TURNING HEADS

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Mini

Mini will unveil the Clubvan concept, which previews a delivery van that may join the BMW brands expanding lineup. The Clubvan is based on the Clubman station wagon. A production version would be aimed at companies such as courier and home delivery services looking for a trendy van to improve their image. Mini boss Kay Segler has said he wants to expand the brand's lineup by the end of the decade to 10 by adding four variants (see story, page 36). Mini Clubvan

Mitsubishi
Mitsubishi will unveil the new Outlander with a design that reflects the automaker's shift to a friendlier look. The SUV will also highlight the brands increasing emphasis on more environmentally friendly technologies. The new Outlander is set to launch in Europe in November. The SUV will be available as a plug-in hybrid in Europe in 2013. Mitsubishi has said it wants electric and plug-in hybrid vehicles to account for 20 percent of its sales by 2020.

Nissan

Concept previews fresh approach for subcompacts


With the Qashqai and Juke, Nissan introduced quirky design to SUV-styled crossovers. Now the automaker plans to do the same with the replacement for its dulllooking Note minivan. The Invitation concept previews the Notes successor and brings fresh style, innovation and excitement to the mainstream market, Nissan said. The production version of the Invitation will launch in Europe next year. Nissan said the new car will be more of a rival

to traditional hatchbacks in the subcompact segment. The Invitation is designed to achieve high fuel economy along with dynamic performance, as well as provide plenty of interior room. The concept also showcases Nissans latest thinking in terms of lightweight construction and advanced engine design. The Invitation is one of two global concept debuts for Nissan at the Geneva show. Details of the second concept will be disclosed at the show, Nissan said. Reports say the second concept could preview the next Qashqai.

Nissan Invitation

Opel
With the Mokka, Opel will be the first German automaker to launch a contender in the growing small SUV segment. The Mokka will go on sale in Europe at the end of the year and compete against vehicles such as the Dacia Duster, Suzuki SX4 and Fiat Sedici. Opel says the Mokka will introduce class-leading technologies to the segment. The car will be offered with driver assistance systems based on the Opel Eye front-camera system, which has functions including lane-departure warning and traffic sign recognition, as well as a rearview camera. The five-seat, 4280mm long Mokka shares its platform with the U.S.-market Buick Encore. The Mokka will be offered with front- or all-wheel drive, a choice of two gasoline engines or a diesel. Also debuting is the Astra OPC, the most powerful Astra variant with a 280hp, 2.0-liter gasoline engine and a top speed of 250kph. Vauxhalls version is called the Astra VXR. Opel will also show the RAD e study for an electric bicycle designed to tap into a growing niche and also serve as a reminder of the brands early history as a cycle manufacturer during its 150th anniversary year.

Peugeot

Peugeot says it carried out its most ambitious specification overhaul ever to develop the 208, which replaces the brands best seller, the 207. The new subcompact is 110kg lighter on average compared with the 207. It is also 70mm shorter and 10mm lower to the ground but has 50mm more legroom for rear passengers and 15 liters more trunk space at 285 liters. The interior is also upgraded with an instrument panel and large touchscreen display positioned around a small steering wheel. The changes are designed to make the car more driver-focused. The 208 will be offered with new 1.0and 1.2-liter three-cylinder gasoline engines. The 1.0-liter unit has CO2 emissions of 99g/km and fuel economy of 4.3l/100km. There are five diesel engines options, including four with stop-start technology, offerPeugeot 208 ing CO2 emissions ranging from 87g/km (3.4 l/100 km) to 99g/km. On average, the 208 range has CO2 emissions 34g/km lower than the 207. The 208 will have three- and five-door versions and will be launched in Europe starting in April. Two concepts based on the 208 will also be shown: The 208 XY Concept showcases a car for urban professionals looking for refinement and distinctive values while the 208 GTI Concept aims to revive the sporty performance of the 205 GTI from the 1980s. Peugeot will also show the 4008 compact SUV. The car is a sister model to the Citroen C4 Aircross that also debuts in Geneva.

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GENEVA 2012
Finding your way around the show

GRAPHIC: GENEVA PALEXPO

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Pininfarina
Pininfarina will unveil the Cambiano, a four-seat plug-in hybrid with a diesel-powered range-extender. The 5000mm-long coupe concept has an electric motor for each wheel, each delivering 60kW (80 hp) with peak power of 150kW (201 hp) for short periods. A small turbine fueled by diesel recharges the batteries or drives the wheels. The drivetrain offers supercar performance with CO2 emissions of just 45g/km. The Cambiano has a top speed of 250kph with short-time peaks at 275kph, acceleration from 0 to 100kph in 4.2 seconds. Pininfarina says the car has an 800km range including 205km in pure electric mode. The Cambiano has a single long door on the drivers side and two doors on the passenger side, including a rear-hinged rear door. It has no B-pillar.

Pininfarina Cambiano

Porsche
The third-generation Boxster is lighter and more fuel efficient than the car it replaces. It also has a more cab-forward stance with the windscreen shifting forward, as well as heavily sculptured flanks, which now feature longer doors and larger wheelarches. The mid-engine roadster gets a lightweight aluminum body and two heavily upgraded versions of the carmakers horizontally opposed six-cylinder engines, which now have direct injection, slight gains in power and new fuel-saving features. A longer wheelbase and wider tracks provide the basis for a roomier interior that takes its cues from that of the new 911. The Boxster will go on sale April 14. Prices in Germany start at 48,291 euros.

Renault Megane

Renault
Zoe accelerates EV ambitions
Renault is betting heavily that electric cars will take off in a big way and the Geneva debuts of the Zoe subcompact and Twizy two-seater production models mark the latest phase in the automakers ambitious plans for battery-powered mobility. The five-seat Zoe will become Renault's volume EV with

Skoda
After launching the three-door Citigo in the Czech Republic late last year, Skoda will debut the five-door version in Geneva ahead of its market launch in May. The Citigo is Skodas sixth model and its first minicar. Its priced below the VW Up, its sister model, but offers the same three-cylinder, 1.0-liter gasoline engine, along with optional high-tech features such as a removable navigation and infotainment system and VWs low-speed collision avoidance system. In keeping with its Simply Clever marketing slogan, Skoda has given the Citigo some small but useful features such as a bag hook on the glove compartment, a photo and document holder and a range of net holders. The car is the first Skoda to have a side airbag that protects the heads of the driver and the front seat passenger. It's also the brand's first production car to have Skodas new logo on the front.

annual sales expected to be about 150,000. The Zoe joins the electric versions of the Fluence sedan and Kangoo car-derived van that are already on sale. The scooter-style Twizy aims to fill a niche for a small vehicle that will provide mobility in crowded cities. Renault will also show a face-lifted Megane compact with more fuel-efficient engines. Renault says the Megane's updated 1.5-liter diesel is 15 percent more efficient with fuel-consumption of 3.5l/100km and CO2 emissions of 90g/km.

Seat
A Toledo concept, the Mii five-door minicar and a facelifted Ibiza are Seats Geneva debuts. The models are part of the brand's product offensive to increase annual sales to 800,000 by 2018 from 350,000 in 2011. The Toledo will be Seat Ibiza shown as a five-door sedan concept previewing a production version that will three-door on the market. Seat says revive a model that Seat stopped sellthe Miis angular front end gives it a ing in 2009. Reports say the Toledo sporty look that distinguishes the car was jointly developed with Skoda from its siblings, the VW Up and Skoda and is Seats version of the Skoda Citigo. The Ibiza gets a mid-life face-lift MissionL concept sedan, which aimed at further boosting the car's was unveiled at the 2011 popularity with young buyers. It has a Frankfurt auto show. fresh front end that has a larger trapezoidal grille as its centerpiece. Seat The Mii will be shown in Geneva as says the styling will appear on future a five-door model that will join the models.

Skoda Citigo

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By Paul McVeigh with contributions from Douglas A. Bolduc, Luca Ciferri, Bertrand Gay, Bruce Gain, Nick Gibbs, Harald Hamprecht and David Jolley

Smart

Toyota

Smart will unveil a slight facelift to the ForTwo microcar to give it a more dynamic appearance. The ForTwo has a larger front grille with a more prominent, integrated Smart logo, new front aprons, muscular side skirts and modified rear aprons. Interior revisions include higher quality leather and a fresh leather/fabric mix. Smart ForTwo

Suzuki
The G70 concept previews a compact car that uses weight reduction and aerodynamics to reduce fuel use. The concept is named for the CO2 emissions of 70g/km the company says is achievable if the 730kg car is built. The concept was first seen as the Regina at the 2011 Tokyo auto show. Suzuki will also show a Swift hybrid range-extended model powered by a battery charged from a 660cc engine. The concepts full-electric range has been doubled to 30km compared with a version first shown in 2010.

Yaris range gets an affordable hybrid


With the Yaris hybrid, Toyota brings the first full hybrid to the subcompact segment. The car will go on sale in the summer. It has the same 1.5-liter gasoline engine as the larger Auris but it is 20 percent lighter thanks to a more compact electric motor and battery pack. The Yaris hybrid offers the same occupant space and 286-liter luggage capacity as conventional gasoline and diesel Yaris models thanks to the smaller drivetrain and the location of battery pack and fuel tank under the rear seat. The Yaris is the second European-built hybrid after the Auris compact. The Yaris hybrid is built at the company's factory in France alongside the standard Yaris, which is the company's best-selling model in Europe. The Auris hybrid is built in Burnaston, England. Toyota says the Yaris hybrid will be the most affordable full hybrid in Europe. The automaker hasnt disclosed pricing but the French press speculates that the Yaris hybrid will cost about 17,000 euros. Annual production is expected to be 40,000 to 60,000 units.

Suzuki G70

Volkswagen
Volkswagen expects half of the buyers of the Up minicar will choose the five-door variant that debuts in Geneva. The Up three-door was shown at the 2011 Frankfurt auto show. The five-door Up is almost identical to the three-door version with only a few side profile design tweaks. It will launch in Germany during the Geneva show and prices will start at 10,325 euros, 475 euros more than the three-door variant. VW says all European markets will have the Up five-door by early summer. The car has the same 1.0-liter, three-cylinder gasoline engine as the three-door and the same technology such as an optional low-speed collision avoidance system and a removable touchscreen navigation and infotainment system. The Up joins its sister models the Skoda Citigo and Seat Mii, whose five-door versions also debut in Geneva.

Volvo

Volvo will expand its lineup with the V40, an entrypremium rival to cars such as the Audi A3 Sportback. The V40 will become the brands smallest model, replacing the S40 and V50. Volvo doesn't plan to replace the slow-selling C30 coupe, its current entry-level car.

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The empire strikes back


British brands Bentley, Mini, Land Rover & Co. prosper by entering new markets while nurturing local roots
HARALD HAMPRECHT
hhamprecht@crain.com

he UK is the birthplace of some of most prestigious car brands in the world. It also has been where some of the industrys greatest failures have taken place, such as the demise of Austin, DeLorean, Healey, Riley, MG Rover and Triumph. After some difficult years, and despite a looming recession, the UK auto industry is on the rise. The companies leading the way Aston Martin, Bentley, Jaguar Land Rover, Mini and Rolls-Royce are no longer in British hands, but they still produce nearly 100 percent of their vehicles in the country. Car buyers dont seem to mind that the brands owners are headquartered in places such as Germany, Kuwait and India. Five of the six brands have achieved record sales since 2007 (see chart, page 33). Meanwhile, Mini and Rolls-Royce reported all-time highs in 2011. By 2015, Jaguar Land Rover wants to increase its yearly deliveries to 300,000 units from 232,000 in 2010. Bentley aims to double its sales to 15,000 vehicles with its current model line. The British car industry is experiencing a real renaissance because of a focus on British automotive culture, design, sportiness and a premium/luxury positioning, said former Porsche sales boss Klaus Berning. In London, one might believe British cars rule the high-end auto world. That is not the case. The UKs six main premium players accounted for combined sales of a little more than 574,000 vehicles last year. By comparison, Mercedes-Benz sold 1.2 million vehicles in 2011. But still, the British brands revival is remarkable, said Berning, who is now an independent consultant.

lion pounds (422 million euros) on a new UK engine plant. BMW Group plans to invest 500 million pounds by 2014 to upgrade its UK facilities, bringing its total local investment to more than 1.5 billion pounds since 2000. Former Rolls-Royce CEO Tom Purves said the benefits can be seen. Things in the British car industry look very good with very high levels of inward investment over recent years paying off in big numbers and great exports, Purves told Automotive News Europe. The infrastructure is in excellent condition with hardly an old building left. Japanese and German processes have brought rigor and constructive orientation to a work force once known as tough to manage. Management is ahead of the game with leadership skill previously lacking. Despite macroeconomic concerns, all of the British premium brands aim to boost sales in 2012 with Aston Martin and Bentley planning to achieve double-digit growth. While many automakers are seeing sales declines, especially in Europe, Bentley CEO Wolfgang Duerheimer said his brand is

experiencing the opposite. Our dealers are reporting significantly more customers in their showrooms, he said. The former Porsche r&d boss said that Bentley customers had been reluctant to buy in the last three years because they did not want to appear showy when so many people were suffering during the global economic downturn. Many entrepreneurs and successful business people finally want to be a bit self-indulgent again, he said. All six brands also are hiring. Jaguar Land Rover, bought by Tata Motors from Ford in 2008, recently recruited enough people to consider having three production shifts at its Solihull plant for the first time in 60 years.

GOING GLOBAL
All of the premium brands are following a similar success strategy. They are expanding into new markets to reduce their dependency on the UK and the rest of western Europe. They also are enhancing their ability to meet individual customer needs by offering more limited-edition models, as well as more opportunities for buyers to personalize their purchases. The most important change, however, is that the six brands are expanding their product portfolios. Rolls-Royces sales have surged since it added the Ghost. Minis sales have risen steadily as it has gone from offering one model to a family of six variants. Aston Martin CEO Ulrich Bez has driven his automaker into the premium minicar segment with the introduction of the Cygnet, a high-end version of the Toyota iQ. Some industry watchers have questioned whether Aston Martin would hurt its brand image by offering the Cygnet. PricewaterhouseCoopers consultant Felix Kuhnert doesnt think so. Just have a look at the three German premium brands. Some people doubted that an Audi A1, a Mercedes A class or a Mini could be a success. They were wrong, he said. If a brand and product is strong enough, there is enough volume.
EMPIRE CONTINUED ON PAGE 33

BIG PLANS
A key reason for the rebound is that the premium brands have been willing to invest to improve their plants and products. Jaguar Land Rover plans to spend 355 mil-

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The worlds most diverse auto nation

EMPIRE CONTINUED FROM PAGE 32

he UK is the most diverse auto making nation. The country has small, independent niche carmakers such as Morgan and Caterham. It has British-born but now foreignowned brands such as Lotus, Bentley, Aston Martin, RollsRoyce, Mini and Jaguar Land Rover. Then there are the highvolume, also foreign-owned, mainstream carmakers Vauxhall, Honda, Toyota and Nissan. These companies, with their suppliers and retailers, account for 700,000 UK jobs, according to the Society of Motor Manufacturers and Traders. In 2011, UK auto production rose 6 percent to 1.34 million cars, ranking it fourth in Europe after Germany, France and Spain. The UKs output is estimated to reach 1.45 million vehicles this year, according to data from PricewaterhouseCoopers. If that happens, UK production would be more than double Italys forecast output in 2012. By 2018, PwC sees UK production rising to 1.78 million vehicles, which would still be well below the peak of 1.9 million vehicles in 1972. While production is rising, Britains slumping economy and rising unemployment is expected to cause new-car sales to dip 3 percent to 1.88 million, according to PwC. Japanese carmakers, which started to choose Britain as their European base in the 1980s, account for 52 percent of the UKs annual auto production. A strong historical investment by a number of Japanese OEMs has helped improve quality, efficiency and productivity, said Rick Hanna, PwCs global automotive leader. Nissans plant in Sunderland has consistently ranked as one of the worlds most productive factories. In 2011, the plant set a new UK record by churning out 480,485 vehicles, accounting for 36 percent of the countrys total output.

The next key segment for three of the six British premium brands is SUVs. Jaguar, Bentley and Aston Martin are preparing to join the niche. Aston Martin would do so by reviving the Lagonda subbrand. Said Berning: An SUV is a must for any premium brand that wants to establish a dense and profitable worldwide dealer network and to benefit from global growth.

include the countrys racing heritage, which gives the UK a deep pool of talented designers and engineers, and the flexibility of the labor force compared with other European countries. The UKs downsides include high labor costs, strict and costly environmental regulations, the volatility of the pound and a lack of Tier 1 and Tier 2 supplier factories in the country. A higher level of component import is necessary compared with some other major producing countries, said Rick Hanna, PwCs global automotive leader. The six brands also face the risk that top-level bosses at the companys headquarters might lose touch with what makes their British subsidiaries special.

BIG BENEFITS FROM SUVs


He said this is particularly true in markets such as Brazil, Russia, India and China. The SUV segment is one of the most stable and prosperous despite all discussion about CO2 emissions and consumption, Berning said. He knows what an SUV can do for a brand because he was at Porsche when it launched the Cayenne SUV, which quickly became the German brands top-selling model. Berning says Jaguar and Aston Martin would benefit most from having SUVs. Jaguar needs an annual sales volume that is at least double what it had last year to operate a sustainable global dealer network, Berning said. Aston Martin offers wonderfully designed sport cars, but sport cars are not enough to survive. Analysts see some other reasons why the British premium brands are doing well. Those

MANAGE THE BRAND


The mother group needs to understand how to manage the brand. VW and BMW seem to be exceptionally good at this, said Purves, who now works as a consultant to Lotus. Another concern is whether brands such as Jaguar and Land Rover will need to open factories abroad. Said PwC analyst Kuhnert: They have to be very careful with shifting production to other countries. The success of Porsche shows how important the production footprint is.

BRITISH BRANDS BY THE NUMBERS


ASTON MARTIN
2011 global unit sales Sales record (year achieved) 4,200

BENTLEY
7,003

JAGUAR
LAND ROVER

MINI
285,060

ROLLSROYCE
3,538

274,460

7,400 (2007)

10,014 (2007)

Jaguar: 130,332 (2002); Land Rover 226,395 (2007) 1 billion*

285,060 (2011)

3,538 (2011)

2010 profit or loss Global dealers UK car assembly location(s)

93 million

-245 million

N/A

N/A

136 Gaydon

161 Crewe

2,305 Castle Bromwich, Solihull, Halewood 21,000 Tata Motors

1,500 Oxford

87 Goodwood

Total employees Owner

1,500 Investment Dar & Adeem Investment

4,000 VW Group

5,000 BMW Group

1,000+** BMW Group

CEO

Ulrich Bez

Wolfgang Durheimer

Ralf Speth

Kay Segler

Torsten MuellerOetvoes
SOURCE: COMPANIES

-- Harald Hamprecht

* 2010-2011 fiscal year ** includes contractors

MARCH 2012

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33

Q A
&
V

AUTOMOTIVE NEWS EUROPE

WOLFGANG DUERHEIMER

Aiming high
olkswagen Groups Bentley brand is set for significant changes in the near future, including the likely introduction of an SUV. The model will help the ultraluxury carmaker reduce its heavy dependence on the Continental range. CEO Wolfgang Duerheimer also wants to conquer new markets including China and Russia and more than double annual sales to 15,000 units by 2017. He spoke with Automotive News Europe Editor-in-Chief Harald Hamprecht.

Bentley CEO Duerheimer wants to more than double the brands volume, add an SUV

What are your long-term sales goals? Within the next five years, I am aiming for annual sales of 15,000 units and thats with our current model portfolio. Will China or the United States be your strongest market? North America was Bentleys strongest market in 2011, with 2,021 vehicles sold and a 32 percent growth rate. We are currently experiencing a full-fledged boom for vehicles in China, where sales have almost doubled to 1,839 vehicles. That made China Bentleys second-largest single market. It will likely advance into the No. 1 spot this year. And Europe? I am calling on our sales organization to exploit the undeniable potential in continental Europe to a much greater degree. We sold 1,187 units, or about 17 percent of our sales in this region, not counting the UK. I expect two-figure growth in mainland Europe. At 1,031 vehicles, we sold almost as many Bentleys in the UK as we did in the rest of Europe in 2011. In Europe, we have to sound the attack. How will you expand your portfolio? The cornerstone of our strategy is the broadening of our product portfolio with an SUV. When do you want the SUV to debut? In three years at the latest. The final decision on this is due sometime this year. In any case, we must position the timing of the model expansion counter-cyclically to our Continental line, which makes up nearly 90 percent of our sales. Will the new SUV use the platform that underpins the Porsche Cayenne, VW Touareg and Audi Q7? Our connection to VW Group offers us many opportunities to use platforms from all the company's brands. However, a Bentley SUV will incorporate unique ideas. What sales potential do you see in this segment, which Lamborghini, Maserati and Aston Martin also want to enter?

OEM

A Bentley SUV will incorporate unique ideas.

Meet the Boss


Wolfgang Duerheimer, 53 Bentley CEO BASED: Crewe, England NATIONALITY: German MAIN CHALLENGES: Develop an SUV; boost unit sales to 15,000 by 2017 from 7,000 last year with existing model portfolio. CAREER HIGHLIGHTS: Started as Bentley CEO last February, moving from Porsche where he was head of r&d. Joined Porsche as product line manager in 1999. Began his automotive career at BMW in 1986.
NAME: TITLE:

What is your vision for Bentley? We want to become the most important and most profitable British manufacturer of ultraluxury performance vehicles. We will continue to systematically develop our core market values. Our slogan is Driving Luxury Performance. This will soon be emblazoned on employees work clothes. What are your greatest challenges? We have to reduce our dependency on the life cycles of our existing Continental and Mulsanne model lines and improve the robustness of our business model. We must develop still more potential for Bentley in sales and conquer new markets such as Russia. Thats why we are working on a sales and marketing offensive that goes hand-in-hand with the expansion of our product portfolio. In 2011, Bentley increased global unit sales to 7,003. Will you top that in 2012? It was actually an uncommonly good year for Bentley. The rapid rise in the sales figures reflects the global strength of the brand. I foresee a robust, two-digit growth for 2012. Bentleys peak sales were 10,014 units. Will you attain that again? Before the financial crisis in 2007, we demonstrated that it was feasible to break through the 10,000-unit barrier with two model lines. We are trying to approach fivefigure sales again with the help of the many new variants, which we are showing at the Geneva show, for example. It is still too early in the year for a binding prediction.

Competition breathes life into the business. We conservatively expect 3,500 to 5,000 units a year, that is, at least 25,000 units over the life cycle. If we decide to build this vehicle, we want to offer a plug-in hybrid for the first time.

Bentley lost 245 million euros in 2010. How does 2011 look? In the first nine months of 2011, we cut our operating loss to 6 million euros and I expect a return to profitability for the entire year. Well announce 2011 financials in March. Will staff grow as sales rise? Bentley currently employs about 4,000 employees in Crewe, including about 500 temporary workers. That makes us one of the most important employers in the UK, which now has 9 percent unemployment. The figure is 20 percent among young people. If we manage to boost sales to 15,000 units with just the existing model portfolio, then we will certainly invest in a second shift in Crewe and hire 300 more employees.

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Q A
&
KAY SEGLER

AUTOMOTIVE NEWS EUROPE

Maximum success with Mini

How brand boss plans to expand BMW subsidiarys model portfolio, dealer network and production

OEM

I could foresee a plug-in hybrid Mini.

aunched in 1959, revived and reinvented by BMW Group in 2001, Mini has quickly evolved from a one-model niche player into a brand with diverse portfolio that includes an SUV, roadster, coupe and cabriolet. Four additional model variants are on the way, Mini boss Kay Segler told Automotive News Europe Editor-inChief Harald Hamprecht in an interview.

But we remain optimistic, even in these countries.

How are you bracing yourself for any downward trends in the market? We are prepared for all eventualities. Also in terms of production? We have two factories we can operate flexibly. At our plant in Oxford, we produce all hatchback derivatives, including the Clubman, which account for two-thirds of our total sales. That gives us a capacity of about 250,000 units. Over the next three years, we will be investing a further 500 million pounds in our Oxford-Hams HallSwindon production triangle. The Countryman and its coupe variant [due in late 2012/early 2013] come from our partner, Magna Steyr, in Graz, Austria. With Magna Steyr, you have a total capacity of about 400,000 units, right? That is a rough estimate the Graz plant is highly flexible. The important fact is that we will not need an additional production location in the medium term. When will you reach annual sales of 400,000? We aim to maintain our steady growth. We wont be pushing units on to the market. For us, it is more important to maintain the stable value of our used cars. How are you expanding your model lineup? The Roadster went on sale on Feb. 25. Toward the end of 2012, we will be bringing our seventh variant, the Coupe Countryman, to market. Our Paceman concept already provided a glimpse of it. Over the medium term, we aim to expand our family from six models to 10. Which ones? We have plenty of ideas, but we will only be bringing them to market gradually. When can we expect to see a Baby Mini, a Mini Bus or a Mini Buggy? Like I said, we are in the fortunate position

Meet the Boss


Kay Segler, 57 Mini Senior Vice President BASED: Munich NATIONALITY: German MAIN CHALLENGES: Manage growth without diluting brand image or hurting residual values CAREER HIGHLIGHTS: Named Minis boss for a second time last May after serving as president of BMW tuning specialist M GmbH for more than two years. He was BMWs senior vice president of importer markets from 2008 to 2009 and prior to that led Mini for four years. He started his automotive career with BMWs strategic planning department in 1988.
NAME: TITLE:

Last year Mini sold a record 285,060 cars worldwide. Can you top that in 2012? We plan to further increase sales. By how much? We aim to grow at a steady, sustainable rate. What are your three largest single markets? The U.S. was our largest market in 2011 with the sale of 57,511 vehicles. This was followed by the UK with 50,428 units and Germany with 40,351 units. Will that order change? No. U.S. sales will continue to grow in 2012 it will remain our No. 1 market for now and in the medium term especially since we will be expanding our U.S. dealer network from 110 to 125 locations. What about China? We sold 17,650 vehicles in China, including Taiwan and Hong Kong, in 2011 an increase of about 51 percent, which makes China our sixth-largest market. This trend is expected to continue. Will Italy or Spain be a problem? Italy is traditionally one of our most important markets. In 2011, it was our No. 5 market with growth of 20 percent. We saw a very slight decline in sales in Spain. Will you expand your retail network? We currently have about 1,500 dealerships, and will be expanding our retail network in China, Korea and the United States. We will be reducing the number in markets such as Spain and Italy, since some dealers are running out of steam.

to have more ideas than we can realize.

The successor to the Mini hatchback will be released in 2013 and will share a platform with BMW models. How much will that save? A common vehicle architecture shared by several models and brands offers many advantages for purchasing, development and production. This makes it easier to bring products and derivatives to market faster. Using standardized modules allows us to cut costs throughout the entire process chain. Before the BMW i brand was created, Mini was considered the BMW Groups green spearhead. What is happening on that front? We still have one of the best carbon footprints in the world with average CO2 emissions of 128 grams per kilometer. We aim to reinforce our strong commitment to sustainability. I could foresee a plug-in hybrid Mini although I cant say when just yet.

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OEM

Beat the recession, buy a Rolls


CEO Mueller-Oetvoes says ultraluxury niche is robust and growing
HARALD HAMPRECHT
hhamprecht@crain.com

ealthy buyers are investing in Rolls-Royce luxury cars despite fears of a global recession, the brands CEO, Torsten Mueller-Oetvoes, said. The 108-year-old British ultraluxury brand has a full order book and is operating three shifts at its factory in Goodwood, England, to meet demand, Mueller-Oetvoes told Automotive News Europe. We expect 2012 to be another record year, he said. We represent a valuable long-term asset, particularly in times of uncertain investment opportunities. About 70 percent of the Rolls-Royces ever built are still on the road, he added. Last year, Rolls-Royce sold a record 3,538 vehicles. Said Mueller-Oetvoes: We will continue to grow steadily but we do not have a volume strategy. For example, we have no long-term plans for five-figure sales. The CEO said Rolls-Royce is confident about its future despite the trend among consumers to buy smaller, more fuel-efficient cars. The global ultraluxury segment is proving to be more robust than other segments in the auto industry, MuellerOetvoes said. The number of super-rich in the world is growing. There are currently about 90,000 ultra-high-net worth individuals. In 10 years, we expect this to grow to 125,000. That fact alone makes me optimistic about our prospects, MuellerOetvoes said. BMW-owned Rolls-Royce will expand its model portfolio, possibly with a coupe variant of its Ghost sedan. There are no plans to add models that cost less than the base price for the Ghost, 250,000 euros, or more than 1 million euros, he said.
Torsten Mueller-Oetvoes led Rolls-Royce to a new sales record in 2011.

Conquer the powers of darkness.

MARCH 2012

Q A
&
RALF SPETH

AUTOMOTIVE NEWS EUROPE

Ready to pounce
CEO Ralf Speth is looking to boost Jaguar Land Rover sales by more than a quarter by 2015

ince Jaguar Land Rover (JLR) was sold to Tata Motors by Ford in June 2008 for about $2.3 billion, the company has undergone a deep restructuring. Production was cut by more than 100,000 units, staff was reduced by 2,500 people, costs were cut and a new growth strategy was established. In its last fiscal year, JLR reported a pre-tax profit of more than $1 billion pounds (1.2 billion euros). JLR CEO Ralf Speth told Automotive News Europe Editor-in-Chief Harald Hamprecht about JLRs next steps.

What are your plans for China? China is now Jaguar Land Rover's thirdlargest market. Sales have grown by more than 1,000 percent in the last five years. Tailored model programs that satisfy the demands of the discerning Chinese consumer are establishing JLR as a leading luxury manufacturer. When will you start production in China and will you partner with Chery or Great Wall? We would like to manufacture vehicles in China for Chinese customers. We have spoken to a number of parties but we have no news to give at this time. What are your plans for India? We opened an assembly plant in Pune in May 2011 to assemble the Freelander 2 for the Indian market. JLR has invested in its dealer network since its introduction to the market in 2009. It now has 13 operational dealerships in 11 cities. Why did you decide not to close one of your three British plants? The decision to maintain three plants in the UK was based upon JLRs ambitious growth plans, which will see us introduce 40 significant product actions over the next five years. We are investing in infrastructure and people. We recently announced 1,000 new jobs at our plant in Solihull and brought 1,500 new people in to support the launch of Evoque in Halewood. We also announced our plans to open an advanced engine manufacturing facility in the West Midlands, which will see the company produce a range of new lowemission engines. Last year JLR hired more than 3,000 people, including 1,000 engineers. Our current headcount stands at 20,000 people in the UK with an additional 1,000 overseas. Do you need to open a plant in the United States or Brazil? JLR has ambitious plans for growth and we are studying opportunities to support this plan. We have no news to share now.

OEM

We will launch an all-new Defender in 2015-2016.

Meet the Boss


Ralf Speth, 56 Jaguar Land Rover CEO BASED: Gaydon, England NATIONALITY: German MAIN CHALLENGES: Manage global expansion of the brands and broaden their product portfolios. CAREER HIGHLIGHTS: Named Jaguar Land Rover CEO in February 2010 and appointed non-executive director on the Tata Motors board in November 2010. From 2002 to 2010, Speth was head of global operations at German industrial group Linde. Prior to that, he spent two years at Fords Premier Automotive Group as director of production, quality and product planning. He also worked for BMW for 20 years.
NAME: TITLE:

What are your greatest challenges? On a macroeconomic level, we see different markets doing different things: growth, no growth, shifts in segments. But we are still cautiously optimistic; we have a solid order bank. Last year in Europe, Jaguar sales declined by 15 percent to 23,100 while Land Rovers volume grew by 12 percent to 74,700. How do plan to defy the current downturn? Continued economic uncertainty in Europe has resulted in a softening in demand. We see a lot of tactical initiatives in Europe, which tends to be a first signal for increasing competition. We expect the market will remain tough, particularly in southern Europe. A lack of smaller engines has affected us, though we have now addressed this with the introduction of the 2.2-liter diesel engine. JLR also is expanding its global footprint and is responding to this expansion with a range of ambitious product actions including new models, new derivatives and new engines. Are you still targeting 300,000 global sales for both brands by 2015, up from 232,000 in 2010? Yes. We are embarking on an ambitious growth plan. The U.S. is showing signs of improvement and sales growth in BRIC markets continues to be positive. We do however recognize that the automotive business, like any other, will inevitably be affected by instability in the geopolitical environment.

You will invest 1.8 billion euros on a product offensive in the next five years. What are the key models? The new Evoque went on sale in September 2011 and the XKR-S made its global debut at the Los Angeles auto show in November 2011. Last year, we showcased concepts for both Land Rover, the D100, and Jaguar, the CX16. We have also confirmed the ongoing development and testing of a new XF derivative, the Sportbrake, which will make its official global debut at the Geneva auto show. When will you bring the C-X16 to market and the new Jaguar SUV? While we make no secret of our desire to broaden the Jaguar portfolio, we cannot make any specific comments on future products. But the decision on the Land Rover DC100 is made? Land Rover has confirmed its intention to launch an all-new Defender in 2015-2016.

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OEM

Power, beauty, soul and some challenges


Aston Martin CEO Bez mulls Lagonda revival
HARALD HAMPRECHT
hhamprecht@crain.com

ston Martin is making plans that could turn next years 100th birthday into something to remember. The British luxury brand is considering reviving the 106-year-old Lagonda brand by offering an SUV and sedan with the badge. If we manage to breathe life back into the Lagonda brand, we could have a presence in 100 countries, Aston Martin CEO Ulrich Bez says. The automaker is present in 42 countries, where it sold 4,200 cars in 2011 and expects an increase this year because of the brands official launch in China in January. Said Bez: With the 10 dealers in China, I expect additional sales of roughly 700 cars with the other markets remaining constant. Bez, who has been Aston Martin CEO since 2000, says he is talking to several potential partners about the Lagonda project because he wants to protect the small independent companys liquidity. Aston Martin was sold by Ford to a group of private investors including Kuwait's Investment Dar Co. in 2007. Daimler is one of the companies Bez is talking to because the Mercedes GL SUV was used to help create the Aston Martin SUV displayed at the 2009 Geneva auto show. We consider the GL platform to be an appropriate basis for the Lagonda, Bez says. We are planning to bring out a small family of cars under this brand, not just a single model. I assume that we will be able to present the first vehicle concepts in the coming year.
CEO Bez is not worried about diluting the Aston Martin brand.

But using peaceful means.


Our new lighting system Active Night Vision with Marker Light. Unexpected obstructions, pedestrians or animals on the road are identied by the infrared light in less than a second and shown on the display. Pedestrians in rural areas are automatically ashed multiple times with the spot light function, pointing out potential risk to the driver. See just about everything: www.al-lighting.com

MARCH 2012

Identify pedestrians and other hazards in time

A Magneti Marelli Company

AUTOMOTIVE NEWS EUROPE

OEM

Guide to assembly plants in Europe

KEY
BMW GROUP
(See also 2 , 20 ) 1 Dingolfing, Germany BMW 5-series sedan, station wagon, M5 station wagon, 5-series Gran Turismo, 6-series coupe, convertible, M6 coupe, convertible, 7-series sedan 2 Leipzig, Germany BMW 1-series (3 door), coupe, convertible, i3 (2013), i8 (2014), X1 3 Munich, Germany BMW 3-series sedan, station wagon 4 Regensburg, Germany BMW 1-series (5 door), 3-series sedan, coupe, convertible, all-wheel drive, M3 sedan, coupe, convertible, Z4 5 Oxford, UK Mini hatchback, convertible, Mini Clubman, Mini Paceman (SOP to be determined) 6 Goodwood, UK Rolls-Royce Ghost, Phantom, Phantom Drophead Coupe, Phantom Coupe

5 6 7 8

station wagon, S-class sedan and hybrid, CL, CLS, SLS AMG; Maybach (ends 2013) Ludwigsfelde, Germany Mercedes Sprinter Hambach, France Smart ForTwo; ForTwo Electric Vitoria, Spain Mercedes Viano, Vito Kecskemet, Hungary Next Mercedes A and B class

B Lieu Saint-Amand, France (Sevel Nord: Fiat 50%, PSA 50%) Citroen C8, Jumpy/Dispatch; Fiat Scudo, Scudo Panorama; Peugeot 807, Expert

FORD
1 2 3 (See also 7 ) Southampton, UK Ford Transit Cologne, Germany Ford Fiesta, Fusion Saarlouis, Germany Ford Focus, Focus ST, Focus Electric (2012) first-generation Kuga Genk, Belgium Ford Mondeo, Galaxy, S-Max Valencia, Spain C-Max, C-Max hybrid (2013) second-generation Kuga (date not announced), next-generation Transit Connect (date not announced) Kocaeli, Turkey (Ford Otosan: Ford 41%, Koc Holding 41%, public 18%) Ford Transit, Transit Connect, new light commercial vehicle (date not announced) St. Petersburg, Russia Ford Focus, Mondeo Craiova, Romania B-Max subcompact car (date not announced)

FIAT GROUP AUTOMOBILES


(See also 33 , 34 , 35 , 45 ) 1 Cassino, Italy Alfa Romeo Giulietta; Fiat Bravo; Lancia Delta 2 Maranello, Italy Ferrari 599 GTB Fiorano, FF; 458 Italia; F430 spider; California 3 Melfi, Italy Fiat Punto 4 Mirafiori, Italy Fiat Punto; Alfa Romeo MiTo; Lancia Musa 5 Modena, Italy Maserati GranTurismo, GranCabrio, Quattroporte 6 Pomigliano dArco, Italy Fiat new Panda 7 Tychy, Poland Fiat 500, Panda; Lancia new Ypsilon; Ford Ka 8 Bursa, Turkey (Tofas: Fiat 37.86%, Koc Holding 37.59%, public 24.28%) Fiat Albea, Linea, Doblo, Fiorino, Citroen Nemo; Peugeot Bipper; Opel/Vauxhall Combo A San Benedetto Val di Sangro, Italy (Sevel Sud: Fiat 50%, PSA 50%) Citroen Jumper/Relay; Fiat Ducato; Peugeot Boxer

4 5

3 Ruesselsheim, Germany Opel/Vauxhall Insignia, Opel/Vauxhall Astra 4 Luton, UK Opel/Vauxhall Vivaro; Renault Trafic II; Nissan Primastar 5 Ellesmere Port, UK Opel/Vauxhall Astra, AstraVan 6 Zaragoza, Spain Opel/Vauxhall Corsa, CorsaVan, Meriva, Combo 7 Gliwice, Poland Opel/Vauxhall Astra Classic and Notchback, Zafira 8 St. Petersburg, Russia Chevrolet Captiva, Cruze; Opel Antara, Astra A Togliatti, Russia (GM and AvtoVAZ joint venture) Chevrolet Niva, Viva

PSA/PEUGEOT-CITROEN
(See also 8 17 , 20 ) 1 Aulnay-sous-Bois, France Citroen C3 2 Mulhouse, France Citroen C4 hatchback, coupe, DS4; Peugeot 206, 308 3 Poissy, France Citroen C3, DS3; Peugeot 207 hatchback, station wagon 4 Rennes-la-Jannais, France Citroen C5 sedan, station wagon, C6; Peugeot 407 sedan, station wagon, coupe, 508 5 Sochaux, France Peugeot 308 hatchback, station wagon, 308 CC, 3008, 5008 6 Madrid-Villaverde, Spain Citroen C3, C3 Pluriel; Peugeot 207, 207 CC 7 Vigo, Spain Citroen Berlingo, C4 Picasso; Peugeot Partner 8

7 8

DAIMLER
1 (See also 20 ) Bremen, Germany Mercedes C-class sedan, station wagon, coupe, E-class coupe, cabriolet, SL, GLK, SLK Dusseldorf, Germany Mercedes Sprinter; Volkswagen Crafter Rastatt, Germany Mercedes A class, B class Sindelfingen, Germany Mercedes C-class sedan, E-class sedan,

GENERAL MOTORS
(See also 8 , 1 , 2 , 4 , 9 , 24 , 35 , 41 , 42 ) 1 Bochum, Germany Opel/Vauxhall Astra Classic, Zafira 2 Eisenach, Germany Opel/Vauxhall Corsa

2 3 4

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8 Mangualde, Portugal Citroen Berlingo, Berlingo First; Peugeot Partner, Partner Origin 9 Trnava, Slovakia Citroen C3 Picasso; Peugeot 207 A San Benedetto Val di Sangro, Italy (Sevel Sud: Fiat 50%, PSA 50%) Citroen Jumper/Relay; Fiat Ducato; Peugeot Boxer B Lieu Saint-Amand, France (Sevel Nord: Fiat 50%, PSA 50%) Citroen C8, Jumpy/Dispatch; Fiat Scudo, Scudo Panorama; Peugeot 807, Expert C Kaluga, Russia (PCMA Rus: PSA: 70% - MMC: 30%) Citroen C4, CCrosser; Peugeot 308, 4007; Mitsubishi Outlander D Kolin, Czech Republic (Toyota Peugeot Citroen Automobile: Toyota 50%, PSA 50%) Citroen C1; Peugeot 107; Toyota Aygo

RENAULT
(See also 4 , 24 ) 1 Batilly, France - Renault Master and New Master; Opel/Vauxhall Movano 2 Dieppe, France - Renault Clio III RS, Gordini RS, GPL, Megane II RS 3 Douai, France - Renault Megane III coupe-cabriolet, Scenic III/Grand Scenic III 4 Flins, France - Renault Clio III 5 Maubeuge, France - Kangoo, Kangoo II, Kangoo Express, Kangoo II Express, Kangoo Be Bop 6 Sandouville, France - Renault Espace IV/Grand Espace IV, Laguna III sedan, wagon, coupe 7 Palencia, Spain - Renault Megane III hatchback, coupe station wagon, RS 8 Valladolid, Spain - Renault Clio III, Modus/Grand Modus 9 Moscow, Russia - (Avtoframos Renault 94.1%, Moscow city council 5.9%) - Dacia Duster Logan, Sandero 10 Novo Mesto, Slovenia - Renault Clio II, Twingo II, Wind 11 Pitesti, Romania - Dacia Duster, Logan, Logan MCV, Logan van, Logan pickup, Sandero 12 Bursa, Turkey (Oyak-Renault: Renault 51%, Oyak 49%) - Renault Clio III, Clio II Symbol/Thalia, Megane II hatchback, sedan

Passat sedan 9 Martorell, Spain Seat Altea hatchback, station wagon, Altea Freetrack, Exeo sedan, station wagon, Ibiza hatchback, station wagon, Leon 10 Pamplona, Spain VW Polo 11 Setubal, Portugal Seat Alhambra; VW Eos, Scirocco, Sharan 12 Brussels, Belgium Audi A1 13 Molsheim, France Bugatti Veyron 16.4, Grand Sport, Super Sport 14 SantAgata Bolognese, Italy Lamborghini Aventador, Gallardo coupe, spyder, Murcielago coupe, roadster 15 Crewe, UK Bentley Continental Flying Spur, Continental GT, Continental GTC convertible, Mulsanne 16 Kvasiny, Czech Republic Skoda Roomster/Praktik, Superb sedan, station wagon, Yeti 17 Mlada Boleslav, Czech Republic Skoda Fabia hatchback, station wagon, Octavia sedan, station wagon 18 Vrchlabi, Czech Republic Skoda Octavia sedan, station wagon 19 Poznan, Poland VW Caddy, Transporter T5 20 Bratislava, Slovakia Audi Q7; Porsche Cayenne; VW Touareg 21 Gyor, Hungary Audi A3 cabriolet, TT coupe, roadster 22 Kaluga, Russia Skoda Fabia, Octavia; VW Tiguan, Polo 23 Sarajevo, Bosnia (from kits) EcoCarrier

DERWAYS
7 Cherkessk, Russia (from kits) FAW Besturn B50 (2012), Vita (2012); Geely MK; Haima 3; Lifan 320, 520, 620

PORSCHE
(See also 3 , 20 ) 28 Leipzig, Germany Porsche Cayenne gasoline, diesel, hybrid (final assembly), Panamera gasoline, diesel, hybrid (final assembly), Cajun (2013) paint shop, body shop 29 Stuttgart-Zuffenhausen, Germany Porsche 911, Boxster, Cayman

EVROCAR
8 Solomonovo, Ukraine (from kits) Skoda Fabia, Octavia, Roomster, Superb, Yeti

GAZ
9 Nizhny Novgorod, Russia - GAZelle and Sobol light commercial vehicles; Chevrolet Aveo (2012); VW Jetta (2013); Skoda Octavia (2013), Yeti (2012)

PROTON (GROUP LOTUS PLC)


30 Hethel, Norfolk, UK Lotus 2Eleven, Elise, Evora, Exige; Tesla Roadster (ends 2012)

HONDA
10 Gebze, Turkey Honda Civic 4 door (except hybrid) 11 Swindon, UK Honda Civic, CR-V, Jazz

SAIC MOTOR CORP. (MG MOTOR UK)


31 Longbridge, UK MG6 GT, MG6 Magnette

HYUNDAI/KIA
(See also 2 , 6 , 16 , 37 , 42 ) 12 Nosovice, Czech Republic Hyundai i30 hatchback, station wagon, ix20, ix35 13 Zilina, Slovakia Kia Ceed hatchback, station wagon, coupe, Sportage, Venga 14 St. Petersburg, Russia Hyundai Accent/Solaris sedan 15 Izmit, Turkey (joint venture of Hyundai and Kibar Holding) Hyundai Accent sedan, i20, Matrix

SOLLERS (formerly SEVERSTAL AVTO)


32 UAZ: Ulianovsk, Russia UAZ 2206-3900 series, 3151, 3164, Cargo, Hunter, Patriot 33 ZMA: Naberezhnye Chelny, Russia (from kits) Fiat Albea, Palio, Doblo; SsangYong Actyon, Kyron, Rexton 34 Yelabuga, Russia Fiat Ducato, Linea

SUZUKI
35 Esztergom, Hungary Suzuki Swift, SX4, Splash; Fiat Sedici; Opel/Vauxhall Agila

1 Ghent, Belgium Volvo C30, S40, S60, V50, XC60 2 Gothenburg, Sweden Volvo S80, V60, V70, XC70, XC90 3 Uddevalla, Sweden (Pininfarina Sverige: Pininfarina 60%, Volvo 40% - Volvo to take full ownership and stop production in 2013) Volvo C70

ZHEJIANG GEELY (VOLVO CAR CORP.)

IZHAVTO
16 Izhevsk, Russia (from kits) Izh 27175; Kia Sorento, Spectra; Lada 2104-2107

SWEDISH AUTOMOBILE
36 Trollhaettan, Sweden Saab 9-3, 9-5 (production stopped in 2011)

KARSAN OTOMOTIV
17 Bursa, Turkey Citroen Berlingo First; Peugeot Partner Origin

TAGAZ
37 Taganrog, Russia (from kits) BYD F3; Hyundai Accent, Porter, Sante Fe; Tagaz C10, Road Partner, Tager, Vega; Vortex Corda, Estina, Tingo

KREMENCHUG AVTO
18 Kremenchug, Ukraine (from kits) Geely CK, King Kong; SsangYong Actyon, Korando, Kyron, Rexton

ASTON MARTIN
(See also 20 ) 1 Gaydon, UK Aston Martin Cygnet, DB9 Coupe, DB9 Volante, DBS coupe, DBS Volante, Rapide (summer 2012), V8 Vantage coupe, V8 Vantage Roadster, V12 Vantage coupe, Virage coupe, Virage Volante

OTHERS

LTI VEHICLES
19 Coventry, UK TX4 black taxi cab

TOYOTA
1 Burnaston, UK Toyota Auris, Auris Hybrid, Avensis, 2 Valenciennes, France Toyota Yaris, Yaris Hybrid (2012) 3 Adapazari, Turkey Toyota Auris, Verso 4 St. Petersburg, Russia Toyota Camry 5 Ovar, Portugal (Toyota Caetano Portugal: Toyota 27%, other 73%) Toyota Dyna, Hiace, Optimo D Kolin, Czech Republic (Toyota Peugeot Citroen Automobile: Toyota 50%, PSA 50%) Toyota Aygo; Citroen C1; Peugeot 107

MAGNA STEYR
20 Graz, Austria Aston Martin Rapide (ends summer 2012); Mercedes G class, SLS AMG (chassis and aluminum bodyshell); Mini Countryman; Peugeot RCZ

(See also 27 ) 38 Castle Bromwich, UK Jaguar XF, XJ, XK 39 Halewood, UK Land Rover Freelander 2, Range Rover Evoque 40 Solihull, UK Land Rover Defender, Discovery 4, Range Rover, Range Rover Sport

TATA MOTORS (JAGUAR LAND ROVER)

AVTOTOR
2 Kaliningrad, Russia (from kits) BMW 3 series, 5 series, X3; Cadillac CTS, Escalade; Chevrolet Lacetti; Kia Ceed, Carens, Mohave, last-generation Rio, Soul, Sportage; Opel Astra, Insignia, Meriva, Zafira

McLAREN AUTOMOTIVE
21 Woking, UK McLaren MP4-12C

UKRAVTO
41 ZAZ: Zaporozhye, Ukraine (from kits) Chevrolet Lanos; Lada Samara/2108-2109; ZAZ Chance, Forza, Lanos, Sens, Slavuta, Tavria 42 ZAZ: Illychevsk, Ukraine (from kits) Chevrolet Aveo; Kia Mohave, Sorento

MITSUBISHI
22 Born, Netherlands (NedCar: MMC 100%) Mitsubishi Colt, Outlander C Kaluga, Russia (PCMA Rus: PSA: 70% - MMC: 30%) Citroen C4, C-Crosser; Peugeot 308, 4007; Mitsubishi Outlander

AVTOVAZ
(See also 4 , 6 , 16 , 41 ) 3 Togliatti, Samara, Russia Lada 4x4 (formerly Niva), Granta, Kalina, Samara, Priora A Togliatti, Samara, Russia (joint venture: AvtoVAZ 50%, General Motors 50%) Chevrolet Niva

UNISON
43 Minsk, Belarus (from kits) Iran Khodro Samand

VOLKSWAGEN
(See also 8 , 9 ) 1 Dresden, Germany VW Phaeton 2 Emden, Germany VW Passat CC, sedan, station wagon 3 Hanover, Germany VW Transporter T5, Porsche Panamera (painted bodies) 4 Ingolstadt, Germany Audi A3 hatchback, A3 Sportback, A4 sedan, station wagon, allroad, A5 coupe, A5 Sportback, Q5 5 Neckarsulm, Germany Audi A4 sedan, A5 cabriolet, A6 sedan, station wagon, allroad, A7 Sportback, A8, R8 coupe, spyder 6 Osnabrueck, Germany VW Golf cabriolet 7 Wolfsburg, Germany VW Golf, Golf Plus, Tiguan, Touran 8 Zwickau, Germany VW Golf,

MORGAN MOTOR
23 Malvern, UK Morgan 4/4, Plus 4, Roadster, Aero Supersport, ThreeWheeler

VALMET AUTOMOTIVE
44 Uusikaupunki, Finland Fisker Karma

AZIA AVTO
4 Ust-Kamenogorsk, Kazakhstan (from kits) Chevrolet Captiva, Epica, Lacetti; Lada Niva

NISSAN
(See also 4 , 1 ) 24 Barcelona, Spain Nissan Navara, Pathfinder, Primastar; Opel/Vauxhall Vivaro; Renault Trafic 25 Sunderland, UK Nissan Juke, Note, Qashqai, Qashqai+2 26 St. Petersburg: Nissan Murano, Teana, X-Trail

ZASTAVA
45 Kragujevac, Serbia (from kits) Fiat Punto; Opel/Vauxhall Astra Sources: Automotive News Europe research, companies, IHS Automotive

CATERHAM CARS LTD


5 Dartford, UK Caterham Academy, Classic, CSR, Roadsport, Superlight, Supersport, SP/300.R

BOGDAN
6 Cherkasy, Ukraine (from kits) Bogdan 2310; Hyundai Elantra, Tucson; Lada Classik/2104-2107, 2110

OTOKAR
27 Arifiye, Turkey (from kits) Land Rover Defender

>

For a PDF copy of this map go to: europe.autonews.com/ assemblymap2012

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OEM

Surging Skoda
Ambitious Czech brand plans to keep setting new sales records, help parent VW Group reach global No. 1
HARALD HAMPRECHT
hhamprecht@crain.com

1.5m

CLIMBING FAST
Skoda aims to increase sales to 1.5 million by 2018
SOURCE: COMPANY

koda recently celebrated a big milestone. Its 14 millionth car rolled off the Volkswagen Group subsidiarys assembly line in Kvasiny, Czech Republic. The Laurin & Klement special edition of the brands Superb flagship model was named after the two entrepreneurs who founded the company 117 years ago. But while Vaclav Laurin and Vaclav Klement got Skoda started, VW Group is responsible for turning the Czech brand into a winner. Almost two-thirds of the 14 million cars that Skoda has built have come off the assembly lines since VW Group took over the automaker in 1991. Last year, Skoda reported record global sales of 879,200 vehicles. After nine months of 2011, the automakers operating profit was 575 million euros, which exceeded its full-year profit in 2010. The brand is going all out and we aren't letting up on the accelerator, Juergen Stackmann, head of sales and marketing, told Automotive News Europe. Despite the economic downturn in parts of Europe, the automaker has a clear objective. We plan to continue to grow in 2012, Stackmann said, without revealing the companys target. Skodas long-term goal is to sell 1.5 million vehicles by 2018, helping VW Group reach the 10-million-unit-sales plateau. Stackmann says that Skoda is the VW Groups strategic spearhead in affordable, spacious vehicles with substantial practical benefits. This is a spot where the VW brand used to dominate, before it moved upscale.

1991

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2018

focus more on its styling. A weakness going forward could become the missing emotion in their design and brand, Lehne says. He believes Skoda is missing an emotional vehicle in its portfolio such as a convertible or roadster as well as an affordable pickup for emerging markets. Currently, the Octavia compact is Skodas best seller, making up about 42 percent of total sales, followed by the Fabia subcompact, which accounts for about 30 percent of global volume. Rounding out the lineup are the Superb, Yeti small SUV and Roomster small minivan.

up from 10 percent in 2011. Skoda also aims to grow twice as fast as the group as a whole. To do both, Skoda plans to get stronger in China and Russia and to add more dealers to its current network of 4,500 outlets worldwide. In China, Skoda will add 100 more dealers to its current network of 300 outlets.

GROWTH OUTSIDE EUROPE


Stackmann says that by 2018 Skoda wants to generate 60 percent of its unit sales from outside Europe and 40 percent from Europe, which is the exact opposite of now. In 2011, China became Skodas largest single market based on unit sales, surpassing Germany to reach No. 1 just five years after the automaker debuted there. The three models that Skoda sells in China, the Fabia subcompact, Octavia compact and Superb mid-sized car, are all produced at a VW Group plant in Shanghai. While Skoda also has production operations with VW in Kaluga, Russia, and Pune, India, Stackmann says that is enough of the world for now. We have no plans to enter North America, Brazil or Argentina, Stackmann said. We are focusing on exploiting the potential of our existing regions.
Skoda sales boss Stackmann: We aren't letting up on the accelerator.

PRODUCT OFFENSIVE
Although an open-top car is not in the immediate future, Stackmann says that Skoda will have plenty to offer as it continues the biggest model offensive in the brands history. Over the next few years, we will deliver a new product to our dealers every six months on average, he said. Skoda recently launched the Rapid subcompact, which is on sale in India, and the Citigo minicar which is based on the VW Up. The company also is working on a compact, family-oriented sedan based on the Mission L concept that could be named Rapid as well. This new model will compete against cars such as the Renault Fluence when it debuts in Europe in the second half of 2012. In addition, a larger sibling to the Yeti SUV is being discussed. By expanding its lineup and increasing its global sales, Skoda aims to account for 15 percent of VW Groups total sales by 2018,

THE CHALLENGES AHEAD


Skodas challenges are to win customers in emerging markets where VW brand models have become too expensive and to protect the VW brand from rivals such as Ford and Opel, as well as rising brands such as Kia and Hyundai. Stackmann says that Skoda doesnt consider entry-brand Dacia as much of a rival as its big brother, Renault, and that the automaker is more concerned about Opel than its less-expensive sister brand, Chevrolet. To keep winning customers, Henner Lehne, director of light vehicle forecasting at IHS Automotive, says that Skoda will need to

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Q A
&
MICHAEL MACHT

AUTOMOTIVE NEWS EUROPE

Herculean task
VW Group pushes production system to new limits in pursuit of being No. 1 global automaker

olkswagen Groups 10 brands produced more than 8 million passenger cars last year. VW aims to surpass 10 million units by 2018 or sooner to become the worlds largest automaker. To reach that goal, the German automaker is demanding more and more from its 62 car and parts plants around the world. VW Group production boss Michael Macht talked about how the automaker is overcoming these challenges in an interview with Automotive News Europe Editor-inChief Harald Hamprecht.

What does that mean? We will build up to 40 models across the group globally based on the standard principles for the modular transverse platform, or MQB. Standard structures for equipment, facilities and assembly areas are carried over to our factories worldwide. This makes it possible to assemble various models efficiently on one line. That means we will achieve highly flexible, multiple-brand plants in the process. Will it be possible to assemble any model from any VW Group brand at any plant in the future? We always prefer being able to assign our factories to one brand. If it makes sense economically, we want to produce other brands in a factory. This is now successfully taking place in Bratislava and at Seats factory in Martorell, Spain, for example. VW Group has 62 car and component factories worldwide. The number is expected to be about 70 by 2018. What comes after that? The VW Group is growing globally. In the coming years, we will go start production at a number of additional facilities. In China alone, we are working on projects involving new facilities in Foshan, Yizheng and Ningbo. In addition, we need component plants here. We also are looking more closely at the ASEAN (Southeast Asia) region, especially Malaysia. And, as everyone knows, we're looking at North America. Thats where we are already building a component factory in Mexico and are investigating another vehicle factory under Audis leadership. And if the global market develops as expected, we won't stop there. Well accelerate. We sold nearly 8.2 million vehicles last year and want to be at more than 10 million in 2018 at the latest. If you include the 31 location for MAN, we are no longer talking about 70 global factories but more than 100 which will come online long before 2018. Of your 39 factories in Europe, 13 are in Germany. Is your manufactur-

OEM

The groups German and European locations remain the backbone of our success.

Meet VWs production boss


Michael Macht, 51 VW Group head of production BASED: Wolfsburg NATIONALITY: German MAIN CHALLENGE: Boost global output 25% by 2018 without sacrificing quality. CAREER HIGHLIGHTS: Named VW Group head of production in October 2010 after serving as Porsche CEO for a year. He was Porsches head of production and logistics from 1998 until 2009 and prior to that spent four years as managing director of Porsche Consulting. He started his automotive career as an engine planner at Porsche in 1990.
NAME: TITLE:

How many vehicles will the Volkswagen Group launch in 2012 and how do you manage the complexity of a company with more than 200 models worldwide? We undertook 42 new launches in 2011. It will be 49 new launches in 2012, not counting [truckmakers] MAN and Scania. We have a globally networked, highly professional team. We will shoulder this Herculean task with our drive toward standardization, our group production strategy and absolute discipline in our modular strategy. The group is growing fast. What changes are being made in the production network cope with this? We formulated our Production Strategy 2018 to deal with the challenges on our path to global growth. The goal of this cross-group program is to organize the highest performance and most advanced automobile production in the world by systematically developing synergies and as many standards as possible. What are the key points? Were harmonizing our production programs groupwide and we are relying on a clear, process-oriented organization. At the same time, we are stabilizing the quality of our global vehicle launches and optimizing our production system. But one of our most important tasks is to systematically translate our modular platform strategy into production.

ing footprint in Germany too large? Our strategy is to meet global customer preferences with regional models from local production. For this reason, we've built new factories in Russia, India and the U.S. in recent years. We also did this because we are confronted with the extremely varied trade barriers and tariff restrictions around the world. These limitations result in cost structures that make it impossible to easily send vehicles around the world. Do you need all our your German and west European plants when the market is declining? Will you have to close factories as Opel and Fiat recently have done? No. The group's German and European locations remain the backbone of our success. Thats why we are deliberately investing in new technology and capacity there. The total is about 28 billion euros by 2016 in Germany alone. This makes it more than clear that Germany, as a Volkswagen manufacturing center, is at the forefront compared with other countries.

>> For the complete Michael Macht interview check out the ANE Global Monthly on March 5

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Inside action
Suppliers are doing more with less to create tomorrows vehicle interiors
DAVID SEDGWICK
autonewseurope@crain.com

vehicle like the Mini or the Fiat 500.

nder heavy pressure to reduce carbon emissions, Europes automakers are working to provide small cars with the features and comfort of large cars without adding weight or cost.

SIMPLER CONTROLS
Automakers are simplifying their instrument panels, which will be smaller and sleeker, with fewer knobs and buttons. Voice-activated controls are well suited for adjusting the radio, climate control and infotainment screen. Now, designers are simplifying the vehicles hand-operated controls. For example, the Audi A8s MMI infotainment system allows motorists to enter navigation destinations and phone numbers by tracing letters on a touchpad mounted on the center console. That idea is catching on. Visteon features a multi-function touchpad in its C-Beyond cockpit, a concept interior that envisions a vehicle interior in 2015. The company also is marketing interior cabin lights activated by hand gestures. If the passenger gestures toward a storage bin, a motion sensor turns on the light. People want to reduce the [control] package and increase the simplicity, says Bertrand Stelandre, Visteons design and innovation manager based in Cologne, Germany. We dont want a complex system like a Boeing cockpit.

It seems like an impossible task, but a design aesthetic is starting to emerge. The car of the future will have thin-profile seats, a minimalist instrument panel and downsized components such as speakers, air ducts and infotainment displays. Last September, a number of concept cars at the Frankfurt auto show such as the Ford Evos, Audi A2, Volkswagen Up, BMW i3 and Mercedes-Benz B class offered a tentative glimpse of this approach. The Evos, for example, featured thin-profile seats, a knob-free instrument panel and stylish center console, making the car's interior look more spacious. The new design approach helps us to get a cleaner look for the interior and a roomier feel, said Ernst Reim, chief of interior design for Ford of Europe. That is very, very important especially in small cars. The Evos offered useful feedback to Ford's interior suppliers. Its seats, for example, are a summary of what suppliers have shown us over the last two years, Reim said. Less is more? Yes, and suppliers have gotten the message.

Automakers are simplifying their instrument panels by reducing the number of knobs and buttons. For example, the Audi A8s infotainment system allows motorists to enter navigation destinations by tracing letters on a touchpad.

rear-seat passengers more legroom. At the Frankfurt show, Faurecia introduced its thin-profile so-called Performance Seat. The seat substitutes a composite material for steel and uses a hard exterior surface, or shell, as its frame. The Performance Seat is 30 percent thinner than a conventional seat and weighs 20 percent less. The shell shields the occupant in an accident, and the seat dispenses with thick foam cushions. Instead, the seatback flexes to accommodate the passenger's weight and posture. Executives at Magna, JCI and Faurecia say their consumer research indicates that thinprofile seats are comfortable. However, automakers arent quite ready to adopt them because they look uncomfortable. Still, consumers are starting to appreciate the aesthetics of economical design, says Andreas Wlasak, Faurecias vice president of industrial design. The beauty of a motorbike is in its frame, which is not covered, Wlasak says. You wont see these seats in a mainstream car in the next three to five years. But you may see it in a sports car, or a fashionable city

MORE SPACE
Suppliers are shrinking componentry to create more interior space for passengers and luggage. Johnson Controls, for example, has showcased a concept dubbed ie:3. Among other things, the ie:3 features an audio system that dispenses with speakers in the door panels. Instead, the vehicle's roof acts as a speaker with the aid of transducers that vibrate the headliner. Tom Gould, Johnson Controls' director of industrial design for North America, says the technology is practical. We are really trying to produce concepts that can go into production very soon, he says. These are near-term solutions. To shrink the instrument panel, Visteon has designed a climate control unit that can be stored under the floor. The system requires no ducts in the instrument panel for hot or cold air. Instead, air flows out of vents in
INTERIORS CONTINUED ON PAGE 47

THINNER SEATS
Faurecia, Johnson Controls and Magna International all have developed light, thinprofile seats that have fewer parts and give

Faurecias Performance Seat is 30 percent thinner than a conventional seat and weighs 20 percent less.

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INTERIORS CONTINUED FROM PAGE 46

INTERIOR LEADERS

the headliner around the heads of the occupants. Without climate control hardware or air ducts, the instrument panel can be shrunk considerably. We want to give the automaker more design freedom, says Visteons Stelandre. It is something we will see in vehicles. Everyone is interested in this.

Whos on top?
Which suppliers will dominate Europes market for seats, door trim, headliners and instrument panels? Two mega-suppliers Johnson Controls and Faurecia dominate the interiors market. Johnson Controls is Europes largest producer of seats and its secondbiggest supplier of door trim and headliners, according to consultancy IHS Automotive. Faurecia is Europes top supplier of door trim, and its No. 2 producer of seats and instrument panels. Other major players include Visteon Corp. (door trim, instrument panels) Grupo Antolin (headliners, door trim) and IAC Europe (door trim, instrument panels, flooring).

Suppliers western European market share by product segment for 2011


SEATS

1. Johnson Controls 2. Faurecia 3. Lear 4. Sitech 5. Other


DOOR TRIM

30% 23% 18% 9% 20% 27% 14% 11% 9% 8% 47% 24% 16% 9% 3% 24% 13% 13% 8% 8%

GOING GLOBAL
Automakers prefer suppliers that can produce parts for global platforms in Europe, North America and Asia, says Dietmar Ostermann, leader of PricewaterhouseCooperss global automotive advisory practice. That is certainly not something that a medium-sized supplier can do anymore, Osterman said. Global suppliers dominate seats, consoles and instrument panels. Thats why smaller regional suppliers especially German companies are ripe for consolidation, Ostermann says. In 2010, Johnson Controls acquired two regional companies premium seatmaker Keiper Recaro Group and the C. Rob. Hammerstein Group, a maker of metal seat frames. Now, Chinese suppliers are expanding into Europe. In late 2011, Visteon disclosed a tentative deal to consolidate its interiors business into its joint venture, Yanfeng Visteon Automotive Trim Systems Co. Visteons partner in that venture is Huayu Automotive Systems Co., a subsidiary of China's largest automaker, Shanghai Automotive Industry Corp. J.P. Morgan & Co. speculates that Visteon

1. Faurecia 2. Johnson Controls 3. Visteon 4. Grupo Antolin 5. Magna


HEADLINERS

1. Grupo Antolin 2. Johnson Controls 3. IAC 4. Tramico 5. Rieter


INSTRUMENT PANELS

will consolidate its electronics business into Yanfeng this year in a move to sell its 50 percent stake to SAIC. If so, the Chinese automaker is poised to become one of Europes major interior suppliers. Osterman believes European suppliers especially mid-sized German companies are ripe for mergers. In Europe, there are a lot of medium-sized and smaller suppliers that have advanced technology, but are too small to serve automakers on a global scale, he said. But theres a limit to the industrys consolidation. Automakers are reluctant to allow one company to supply all major interior components, Osterman notes.

1. SAS 2. Faurecia 3. Visteon 4. Johnson Controls 5. Magna


SOURCE: IHS AUTOMOTIVE

Cockpit concepts like Johnson Controls ie:3 or Visteons C-Beyond are visions of the future. But automakers wont adopt them in their entirety. Automotive interiors will continue to be group efforts.

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Automakers deliver array of new solutions for getting from A to B

Mobility 3.0

REUTERS

LOIS HOYAL
autonewseurope@crain.com

MEGACITIES
Projected population of the world's largest cities (in millions)
2025 2010

ore than 125 years since its invention, use of the car is facing radical change, particularly among young city residents. An expanding world population is demanding new solutions to mobility amid dwindling resources, rising oil prices and escalating discussions about the environment and sustainability. To move with the times, automakers are developing and debuting new mobility concepts and innovative technology, such as electric vehicles and car-sharing programs. About 2.7 million e-vehicles are expected to be on the road in China by 2020, and the total in Germany is targeted at 1 million, according to global management consulting firm Oliver Wyman. Possibly the biggest change taking place is in individuals attitude toward mobility. Were currently witnessing a huge shift from everyone driving his own car from A to B and moving into multimodal solutions. It will be a gradual process, taking place over the next five to 10 years, with the biggest changes coming in megacities, Oliver Wyman analyst Matthias Bentenrieder said. As a result, the cars position as a status symbol is eroding; owning a vehicle is no longer seen as a necessity. Already in cities such as London only about 30 percent of the population owns a car, Bentenrieder said. Young people, in particular, are opting not to buy cars and spend

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Toyko Delhi Mumbai Sao Paulo Dhaka Mexico City New York Calcutta Shanghai Karachi

37.1 28.6 25.8 21.7 20.9 20.7 20.6 20.1 20.0 18.7

36.7 22.2 20.0 20.1 14.7 19.5 19.4 15.6 16.6 13.1

Traffic-choked Paris will need smart mobility solutions as its population is forecast to grow 4% to 11 million people by 2025, making it one of 29 global megacities those with populations of 10 million people or more. There were 21 megacities in 2010.

inner city trips, Bentenrieder said. They will enjoy a cool image with the younger crowd as the programs offer good cars for use. Here is a look at what automakers are doing in the areas of two-, three- and fourwheel low-CO2 vehicles as well as their carsharing programs.

Ready for 2-wheeler boom


Electric two-wheelers are small and most offer removable battery packs so that they dont need a dedicated outdoor charging infrastructure. They represent a huge global market that will continue to overshadow electric passenger vehicles for the foreseeable future, according to Pike Research. The clean technology consulting firm predicts that more than 466 million e-bikes, emotorcycles, and e-scooters will be sold worldwide between 2010 and 2016. Consultancy Frost & Sullivan forecasts the European electric two-wheeler market to reach 220,000 units by 2016. According to the German two-wheeler industry association (ZIV), about 700,000 e-bikes were sold in Europe in 2010, up from about 200,000 in 2007.
MOBILITY CONTINUED ON PAGE 49

SOURCE: UNITED NATIONS, DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS

their money elsewhere. In 2009, just 7 percent of those buying new cars in Germany were between 18 and 29 years old. Meanwhile, constantly improving technology enables people to use their smartphones and online services to find the next available car for use and book their journey, as car sharing becomes increasingly popular. Bentenrieder predicts that along with innovative technology, car sharing will be the most important new mode driving the mobility revolution. I expect car-sharing programs to be very popular. They are simple to use also, they are far less pricey than taking a taxi for short-range

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MOBILITY CONTINUED FROM PAGE 48

Automakers are busy developing two-wheeler concepts to meet this potential demand. Peugeot Motocycles dubs its e-Vivacity the ultimate eco-citizen scooter, offering power close to the maximum 4 kW (5 hp) authorized by European law for the category, allowing trips of up to 100km without needing a recharge. Honda started leasing its EV-neo batteryelectric scooter in Japan in April 2011. The EV-neo gets its power from a 2.8kw (4 hp) electric motor combined with a lithium-ion battery pack. We are introducing the escooter in China this spring and we currently have 18 e-scooters being tested in Barcelona, Honda Germany spokesman Alexander Heintzel said. Katrin Herold, of BMWs corporate and governmental affairs team, sees potential for scooters with electric drive in the coming years first of all in the mid-sized and maxiscooter segment. For BMW, however, its still too early to provide a concrete date for the market introduction of BMW escooters. We wont start market introduction before the official start of the BMW i products, which will be in 2013, spokesman Rudi Probst said. BMW subsidiary Mini showed an e-scooter at the 2010 Paris auto show as did Daimlers Smart brand. Neither Mini nor Smart have announced whether they will launch their scooters. Smart, however, will debut its ebike in Europe and North America this summer. Riders chose how much power-assisted mobility they want from the e-bikes 250-watt electric motor.

Twizy will start at 6,990 euros after tax and before government incentives. Opel has come up with the Opel RAK-e, a four-wheel electric concept that combines radical looks with affordability it is estimated to start at about 12,000 euros and have running costs of about 1 euro per 100km. Opel has not committed to making the RAK-e. Were still investigating different potential introduction scenarios, Opel spokesman Uwe Deller said. From Honda comes the Honda Micro Commuter Concept, with powerplant components, including the battery, concentrated in the rear and four wheels positioned at the outside corners of the vehicle. Most people travel solo and the concept has them in mind, Honda Germany spokesman Alexander Heintzel said. We dont know when it will be introduced, but I should expect in the next three to four years, depending on customer demand. BMWs i3, the companys first series-produced full-electric car, will offer emissionsfree mobility when it debuts next year. Then theres the BMW i8 plug-in hybrid sports car, which can go 0 to 100kph in five seconds while using less than 3.0 liters of fuel per 100km. The i8 is due in 2014. According to Volkswagen, 90 percent of German commuters travel solo, so the company devised the Nils single-seat electric car concept with them in mind. Produced in partnership with the German ministry for urban development, the Nils weighs just 460kg. VW also is working on the XL1 two-seat plug-in hybrid, which has an advanced powertrain that offers 313 mpg while emitting 24 grams of CO2 per kilometer. Speaking about the XL1, VW Group CEO Martin Winterkorn recently told Automotive News Europe: We will start small series production by 2013 in Germany.

The battery-powered Peugeot e-Vivacity has a range of 100km.

tify having a personal car in a city for environmental, space or financial reasons yet dont want to forego individual mobility. Many major automakers already have launched programs to capitalize on the trend. Car-rental firm Sixt and the BMW Group operate a premium car sharing service under the DriveNow joint venture. Launched in Munich last June, Berlin last September and in Dusseldorf in January, the program had 15,000 registered users in late January. By 2020, the aim is for DriveNow to have 1 million members worldwide. Daimler, meanwhile, offers Smarts for immediate hire, as part of Car2Go, which allows customers to get in, drive as long as they want and leave the car somewhere in the city, following a one-time registration. Car2Go started in Amsterdam last November with 300 Smart ForTwo electric cars. Car2Go debuted in Ulm, Germany in 2009 and now offers fleets of fuel-powered and electric ForTwos. Other Car2Go markets in Europe include Hamburg and Dusseldorf, Germany; Vienna, Austria; and Lyon, France. Car2Go is scheduled to be launched in Stuttgart later this year as Daimler, together with car-rental agency Europcar, works to expand the program to 50 European cities. Deutsche Bahn, Germanys national railway company, also confirms it is in talks with PSA/Peugeot-Citroen to offer cars for hire at 100 stations in Germany, as part of the Mu car-hire concept that PSA rolled out across Germany last year. Mu customers use a pre-paid card that can be topped up over the Internet to rent a bicycle, scooter, a utility vehicle, two- or four-wheel car or an accessory, such as a roof box. Volkswagens Quicar comprises a fleet of 200 Golf Blue Motion vehicles. Since its launch last November in Hanover, about 5,000 people have registered as Quicar users, said spokesman Eric Felber, who declined to give an estimate on the number of customers Quicar will have in five years. European cities also are launching car-sharing programs. Autolib, Paris first public rental service for electric cars, was launched in late 2011 with 250 stations and 250 cars.

New ideas on 3 and 4 wheels


The auto industry may be facing a revolution in mobility, but theres still demand for the three- or four-wheel car. Three- and four-wheelers will have their place in the market as part of the solution for urban city centers there is a need for cars with a smaller footprint, said Oliver Wymans Bentenrieder. They will co-exist alongside public transport. I expect them to be slowly introduced in cities in the next five to 10 years, especially once new regulations for city centers regarding emissions and car sizes become more restrictive. With city motoring in mind, Renault will put the full-electric Twizy on sale in Europe this spring. Maximum production will be 30,000 units per year, company spokeswoman Raluca Barb said. Renault will offer a Twizy variant with a top speed of 45kph, which means it can be driven without a license in some countries. The low-power

Car-sharing programs blossom


Car sharing will undoubtedly play a key role in future mobility. According to consultancy Frost & Sullivan, the number of people using car-sharing services is expected to grow from nothing a few years ago to 14 million in Europe and 32 million worldwide by 2020. Car sharing is a popular choice for an increasing number of people who cant jus-

Douglas A. Bolduc, Bruce Gain, Harald Hamprecht contributed

MARCH 2012

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Tomorrows world
Hollywood fantasy comes closer to reality at CeBIT
STEFAN GRUNDHOFF & SEBASTIAN VIEHMANN
autonewseurope@crain.com

n the movie Mission: Impossible-Ghost Protocol, actor Tom Cruise and co-star Paula Patton race through the congested streets of Bombay in a BMW i8 car guided by a head-up display that fills the entire windshield. Futuristic cars packed with technology are no longer just a Hollywood fantasy. Automakers are increasingly showcasing innovations at digital industry trade fairs such as Germanys CeBIT. This years CeBIT, which runs from March 6 -10 in Hanover, highlights where automotive IT is headed over the next few years. A car's human-machine-interface (HMI) is changing because users of iPhones, BlackBerries and Androids also want amenities of their digital daily life when they drive a car. CeBITs theme this year Managing Trust highlights security. For the auto industry, that means companies must incorporate their customers' digital lifestyles into the vehicles HMI and do it safely, comfortably and vividly. The vivid head-up display controlled by gestures that is used by the Mission: Impossible team won't be appearing in a production car anytime soon, but engineers at Daimler, BMW and other automakers are working on the technology. Research is being done on gesture controls. The operators movements must be short and incisive, said Henning Diederichs, a BMW marketing manager who advised the Mission: Impossible filmmakers on BMWs Connected Drive technology. A big growth area is the use of apps with a cars infotainment system. In 2010, BMWs Mini brand launched the Mini Connected app, which allows users to turn their iPhones into a central interface for infotainment inside the car and link up with Web features such as Facebook and Twitter. To coincide with CeBIT, BMW will announce a third-party app that will be available in Europe to users of Mini Connected and BMW Connected. Automakers can benefit from the integration of the digital lifestyle into the vehicle, said Krishna Jayaraman, an analyst with Frost & Sullivan. Customers don't want to spend money on apps, but they are ready to pay

Above: Automakers such as Daimler are working on head-up displays controlled by gestures. Left: Mini Connected turns an iPhone into a central interface.

personal data from a server outside the vehicle via mobile telephony, WiFI or the mobile data turbo LTE. The tasks of keeping pace and keeping costs affordable are just as difficult for Tier 1 and Tier 2 suppliers as they are for automakers. Helmut Matschi, head of Continentals interior division, considers harmonization to be the greatest challenge. In the vehicle of tomorrow, the standards must operate in the background, he said. We can only manage to implement more functions economically and achieve greater individuality if we have a high degree of harmonization. The exploding populations of so-called megacities also means that safety on crowded roads is becoming more important. CeBIT has a so-called "Urban Solutions" display that shows how the flow of traffic can be guided more intelligently in the digital world. One emphasis is on proactive traffic control, including the intelligent linkage of various means of transportation, as well as car-to-infrastructure communication known as Car-to-X. The fields of activity here are inexhaustible and the market demand is assured for decades. As early as 2015, there will be more than 20 megacities with more than 10 million inhabitants.

for the human-machine-interface that can be used with smartphone applications in the car, Jayaraman said. The Gartner IT research institute estimates that smartphone and tablet users will load about 70 billion apps on their devices in 2014, nearly four times the number in 2011. More automakers are jumping onto the bandwagon, hoping to win more young buyers for cars, but systems with upgradable and updatable modules are essential because infotainment architectures age rapidly while product cycles for cars are about six to eight years. To keep pace, we have to up the ante every two years, said Christian Leberfinger, a developer at the Audi subsidiary E.Solutions. Audi's latest infotainment system, which debuts in the new A3, has a modular layout that makes it possible to easily update hardware. Like other manufacturers, Daimler is banking on a Cloud-based system. At the Consumer Electronics Show in Las Vegas in January, Daimler CEO Dieter Zetsche presented a system where a driver accesses

50

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MARCH 2012

Rieter Automotive is now Autoneum. Well-known strengths under a new name.

As of May 2011, Rieter Automotive operates under the name of Autoneum. An independent listed company, Autoneum is and will remain the leading manufacturer of lightweight components and systems for acoustic comfort and heat protection in motor vehicles.

Autoneum designs, develops, tests and produces solutions for all major car manufacturers worldwide. Success in the future will be based on the tried and tested strengths of Rieter Automotive and the innovative power of Autoneum.

www.autoneum.com

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Not just seeing the big picture. Insight to change it.


From knowledge comes informed decisions. Thats why business leaders are looking for insight on todays complex issues. And why we provide perspective on issues such as corporate governance, doing business in China, financial regulation, talent, operations, strategy and growth. To gain additional insight on these and other issues of importance to your automotive business, visit www.pwc.com/auto

2011 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member rms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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Italian brake supplier Brembo predicts revenue rise for 2012


LUCA CIFERRI
lciferri@crain.com

BREMBO
HEADQUARTERS: Stezzano (Bergamo), Italy OWNERS: Bombassei family (56.5%), public (43.5%) CHAIRMAN: Alberto Bombassei PORTFOLIO: High-performance brake systems for cars, commercial vehicles and motorbikes; clutches, seats, seat belts CUSTOMERS: BMW Group, Daimler, Fiat Group, Ford, GM, Mitsubishi, Porsche, PSA, RenaultNissan, VW Group, Volvo COMPETITORS: Continental, TRW, Akebono, Nissin, Tokiko HEADCOUNT: 6,726 (Sept. 30, 2011) PLANTS: 26 REVENUE 2010: 1.1 billion euros (829 million euros, 2009) OPERATING PROFIT 2010: 56.4 million euros (22.6 million euros, 2009)

talian brake specialist Brembo predicts that its revenue will rise 8 percent this year to 1.34 billion euros as its transformation into a volume supplier gains traction. The family controlled, publicly listed partsmaker decided in 2010 to expand beyond supplying high-performance brakes to supercars and racecars. Having reached a leading position in highperformance braking systems had become a bit of constraint to the future development of the company, Brembo Chairman Alberto Bombassei told Automotive News Europe. Since making the change, revenue has gone from 829 million euros in 2009 to about 1.1 billion in 2010 and an estimated 1.24 billion last year. The company also is growing in Asia, South America and central Europe. Brembo recently bought a foundry in Nanjing, China, so that it can handle all aspects of production of brake discs and calipers for locally made passenger cars and light commercial

vehicles. The supplier will invest an additional 50 million euros in China to triple output there to fill local orders from clients such as BMW, Daimler, Mitsubishi, Volkswagen Group, Volvo and Fiat commercial vehicle maker Iveco.

Bombassei

To gain entry into the volume-braking sector in fast-growing South America, Brembo bought 75 percent of Argentina-based brake manufacturer Perdriel last year. This year, Brembo will open a new 35 million euro factory in Ostrava, Czech Republic. At full capacity, the company expects to supply 1.5 million brake calipers a year to midsized vehicles made by Audi, BMW, General Motors and Land Rover. Bombassei said that Brembos pursuit of volume business does not mean it will abandon its racing business or that it will stop making high-end brakes for ultraluxury brands. The suppliers carbon-ceramic disc technology first moved from Formula One to a pro-

duction model in 2002 when it debuted on the limited-edition Ferrari Enzo. In 2009, Brembo joined forces with German supplier SGL Carbon to increase volume and reduce costs of carbon-ceramic brakes.

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The 15th annual Automotive News Europe Congress will be held in beautiful Monte Carlo, Monaco from June 20 21, 2012. Packed with keynote addresses from the industrys top executives and regularly attended by up to 350 industry leaders from 25 countries, the Congress is the only pan-European networking forum you need to attend. Look forward to getting a comprehensive perspective of the industrys big issues, answers to critical questions from the best in the business and personally discussing points of interest with other high-level executives. Make it a date, share in the knowledge and sharpen your competitive edge. Visit www.ane-congress.com for updates on 2012 and to see the highlights of the 2011 Congress: videos, photos, speaker presentations and more statements.

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DATA

EUROPE SALES BY MODEL 2011 vs. 2010


2011 2010 Unit change Percent change 2011 2010 Unit change Percent change

V8/V12 Vantage ........ DBS............................ Rapide ...................... Other.......................... ASTON MARTIN ............ Niva/Taiga.................. Other.......................... AVTOVAZ ...................... 1 series ...................... 3 series ...................... 5 series ...................... 6 series ...................... 7 series ...................... Z4 .............................. X1 .............................. X3 .............................. X5 .............................. X6 .............................. Other.......................... Total BMW brand ........ Mini ............................ Countryman .............. Total Mini .................... Ghost ........................ Phantom .................... Other.......................... Total Rolls-Royce ........ BMW AG ........................ Maybach ...................... A class ...................... B class ...................... C class ...................... E class ...................... S class ...................... CLS ............................ CLC............................ SLK ............................ SL .............................. SLS AMG .................. R class ...................... GLK............................ Vito/Viano .................. Sprinter ...................... M class ...................... G class ...................... GL .............................. Other.......................... Total Mercedes-Benz .. ForTwo ...................... Other.......................... Total Smart .................. Total Other .................. DAIMLER AG ................ DR1............................ DR5............................ Other.......................... DR MOTOR COMPANY Ypsilon ...................... Delta .......................... 300C .......................... Grand Voyager/ Town & Country ...... Other.......................... Total Chrysler brand .... Caliber ...................... Journey ...................... Other.......................... Total Dodge ................ Compass .................. Patriot ........................ Wrangler .................... Cherokee/Liberty ...... Grand Cherokee ........ Other.......................... Total Jeep .................... Total Other .................. CHRYSLER GROUP ....

859 319 472 711 2,361 2,662 458 3,120 135,087 166,860 143,804 9,469 4,496 9,491 83,063 60,697 26,819 14,889 833 655,508 116,666 53,784 170,450 328 140 4 472 826,430 46 87,981 64,156 178,345 130,209 9,867 17,390 2,186 17,773 1,154 1,676 4,421 30,519 28,829 5,226 19,607 1,792 2,498 2,214 605,843 78,868 36 78,904 1 684,794 1,886 708 350 2,944 342 236 510 3,406 201 4,695 837 905 469 2,211 6,672 2,486 6,823 1,785 6,598 44 24,408 1 31,315

975 451 468 421 2,315 3,256 653 3,909 147,623 188,247 110,267 9,827 2,160 13,206 77,706 22,452 29,224 17,162 971 618,845 130,020 12,361 142,381 354 134 14 502 761,728 32 106,983 82,844 152,004 141,889 10,736 3,975 9,980 8,779 1,996 1,607 3,507 27,184 18,455 5,767 21,059 1,500 2,249 2,300 602,814 83,246 33 83,279 686,125 3,154 1,728 177 5,059 3,507 5,665 1,334 10,506 3,444 6,254 2,234 11,932 1,121 3,439 3,747 2,262 4,085 297 14,951 2 37,391

116 132 +4 +290 +46 594 195 789 12,536 21,387 +33,537 358 +2,336 3,715 +5,357 +38,245 2,405 2,273 138 +36,663 13,354 +41,423 +28,069 26 +6 10 30 +64,702 +14 19,002 18,688 +26,341 11,680 869 +13,415 7,794 +8,994 842 +69 +914 +3,335 +10,374 541 1,452 +292 +249 86 +3,029 4,378 +3 4,375 +1 1,331 1,268 1,020 +173 2,115 +342 +236 2,997 2,259 1,133 5,811 2,607 5,349 1,765 9,721 +5,551 953 +3,076 477 +2,513 253 +9,457 1 6,076

12% 29% 1% 69% 2% 18% 30% 20% 9% 11% 30% 4% 108% 28% 7% 170% 8% 13% 14% 6% 10% 335% 20% 7% 5% 71% 6% 9% 44% 18% 23% 17% 8% 8% 338% 78% 102% 42% 4% 26% 12% 56% 9% 7% 20% 11% 4% 1% 5% 9% 5% 0% 40% 59% 98% 42% 86% 40% 85% 55% 76% 86% 79% 82% 495% 28% 82% 21% 62% 85% 63% 50% 16%

MiTo .......................... 40,417 Giulietta...................... 78,819 159 ............................ 10,430 Other.......................... 1,616 Total Alfa Romeo ........ 131,282 458 Italia .................... 1,348 California.................... 879 FF .............................. 245 599 GTB Fiorano ...... 320 Other.......................... 103 Total Ferrari ................ 2,895 156,301 500 ............................ Panda ........................ 189,527 Punto.......................... 220,343 Albea ........................ 8,951 Linea .......................... 35,499 Bravo ........................ 31,673 Idea............................ 5,982 Sedici ........................ 14,777 Freemont.................... 13,651 Fiorino/Qubo .............. 20,049 Doblo ........................ 16,588 Ducato ...................... 19,013 Other.......................... 6,515 Total Fiat brand .......... 738,869 Ypsilon ...................... 61,455 Musa .......................... 16,431 Delta .......................... 18,690 Thema........................ 685 Voyager .................... 1,196 Other.......................... 175 Total Lancia ................ 98,632 GranTurismo .............. 873 GranCabrio ................ 474 Quattroporte .............. 277 Other.......................... 29 Total Maserati .............. 1,653 Other ............................ 668 FIAT S.P.A. .................. 973,999 FIAT-CHYRSLER ............ 1,005,314 Ka .............................. 73,821 Fiesta ........................ 372,977 Focus ........................ 308,747 Mondeo...................... 86,433 Fusion ........................ 18,479 C-Max/Grand C-Max 127,092 S-Max ........................ 47,575 Galaxy........................ 27,371 Kuga .......................... 68,564 Transit/Tourneo.......... 16,087 Other.......................... 2,767 Total Ford brand .......... 1,149,913 Lincoln ........................ 10 Mercury ........................ 3 FORD MOTOR .............. 1,149,926 Geely .......................... 1,409 C30 ............................ 15,442 S40 ............................ 10,272 V50 ............................ 41,199 S60 ............................ 24,078 V60 ............................ 45,633 V70/XC70 .................. 49,566 S80 ............................ 5,261 C70 ............................ 4,138 XC60 .......................... 51,298 XC90 .......................... 13,217 Other.......................... 462 Total Volvo .................. 260,566 GEELY GROUP ............ 261,975 Buick ............................ 6 Cadillac ........................ 585 Matiz/Spark................ 65,338 Aveo .......................... 48,564 Cruze ........................ 37,494 Captiva ...................... 23,746 Orlando...................... 19,856 Other.......................... 3,066 Total Chevrolet ............ 198,064

51,994 33,168 15,034 10,458 110,654 947 1,395 354 291 2,987 172,205 235,163 267,248 14,816 18,976 43,844 6,128 16,381 24,785 19,685 12,988 35,588 867,807 49,393 25,041 23,426 1,811 99,671 900 549 473 42 1,964 1,057 1,084,140 1,121,531 93,890 425,331 286,376 96,898 35,800 66,510 45,773 24,146 72,878 15,288 5,781 1,168,671 19 7 1,168,697 2,000 24,259 13,988 49,417 11,026 4,338 57,583 7,178 4,701 44,995 14,691 612 232,788 234,788 13 1,210 74,231 47,881 37,355 25,466 42 11,193 196,168

11,577 +45,651 4,604 8,842 +20,628 +401 516 +245 34 188 92 15,904 45,636 46,905 5,865 +16,523 12,171 146 1,604 +13,651 4,736 3,097 +6,025 29,073 128,938 +12,062 8,610 4,736 +685 +1,196 1,636 1,039 27 75 196 13 311 389 110,141 116,217 20,069 52,354 +22,371 10,465 17,321 +60,582 +1,802 +3,225 4,314 +799 3,014 18,758 9 4 18,771 591 8,817 3,716 8,218 +13,052 +41,295 8,017 1,917 563 +6,303 1,474 150 +27,778 +27,187 7 625 8,893 +683 +139 1,720 +19,814 8,127 +1,896

22% 138% 31% 85% 19% 42% 37% 10% 65% 3% 9% 19% 18% 40% 87% 28% 2% 10% 19% 16% 46% 82% 15% 24% 34% 20% 90% 1% 3% 14% 41% 31% 16% 37% 10% 10% 21% 12% 8% 11% 48% 91% 4% 13% 6% 5% 52% 2% 47% 57% 2% 30% 36% 27% 17% 118% 14% 27% 12% 14% 10% 25% 12% 12% 54% 52% 12% 1% 0% 7% 73% 1%

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AUTOMOTIVE NEWS EUROPE

DATA

EUROPE SALES BY MODEL 2011 vs. 2010


2011 2010 Unit change Percent change 2011 2010 Unit change Percent change

GMC ............................ 23 Hummer ...................... 58 Astra/Astra Classic .... 327,458 Insignia ...................... 138,755 Meriva ........................ 127,439 Zafira.......................... 72,604 Antara ........................ 8,728 Agila .......................... 28,429 Corsa ........................ 327,717 Vivaro ........................ 7,425 Ampera ...................... 304 Other.......................... 1,679 Total Opel/Vauxhall .... 1,040,538 Other ............................ 9 GENERAL MOTORS ...... 1,239,283 Hover ........................ 1,744 663 Steed ........................ Other.......................... 4 GREAT WALL ................ 2,411 Jazz .......................... 57,414 Civic .......................... 47,268 Insight ........................ 5,586 Accord ...................... 12,304 CR-Z .......................... 4,391 CR-V .......................... 36,080 Other.......................... 912 HONDA MOTOR ............ 163,955 i10 .............................. 72,669 80,853 i20 .............................. i30 .............................. 101,328 i40 .............................. 9,159 ix20 ............................ 47,149 ix35 ............................ 74,421 Genesis...................... 1,707 Santa Fe .................... 13,549 H-1/Starex/Satellite .... 2,714 Accent ...................... 23,172 Elantra........................ 4,649 Veloster...................... 3,015 Other.......................... 4,311 Total Hyundai brand .... 438,696 Picanto ...................... 51,418 Rio.............................. 30,649 Cee'd ........................ 71,930 Venga ........................ 41,236 Soul............................ 11,485 Sportage .................... 67,484 Sorento ...................... 13,606 Other.......................... 4,816 Total Kia ...................... 292,624 HYUNDAI-KIA ................ 731,320 Mahindra ...................... 521 Korando .................... 4,867 Actyon........................ 309 Rexton........................ 596 Rodius/Stavic ............ 820 Kyron ........................ 1,095 Other.......................... 3 Total Ssangyong .......... 7,690 MAHINDRA & MAHINDRA 8,211 MX-5 .......................... 8,079 38,239 Mazda2...................... Mazda3...................... 34,935 Mazda6...................... 28,193 Mazda5...................... 18,177 CX-7 .......................... 10,232 Other.......................... 912 MAZDA .......................... 138,767 Lancer........................ 13,767 ASX ............................ 48,418 i .................................. 2,608 Colt ............................ 26,012 Outlander .................. 17,815 Pajero/Montero/Shogun 7,091 Other.......................... 1,687 MITSUBISHI .................. 117,398

33 291 318,768 136,033 104,258 90,333 9,148 33,810 332,636 5,766 8,718 1,039,470 30 1,237,215 672 1,005 1 1,678 59,291 66,941 11,731 16,338 5,704 38,781 3,043 201,829 89,813 68,087 114,849 3 4,029 47,578 159 13,742 2,567 29,358 9 1 24,621 394,816 46,839 19,335 92,643 34,496 15,286 29,219 14,304 9,233 261,355 656,171 505 328 1,323 1,478 1,259 2,574 11 6,973 7,478 10,244 52,838 49,175 38,702 18,165 13,237 1,581 183,942 21,805 20,935 97 30,209 21,740 6,891 3,657 105,334

10 233 +8,690 +2,722 +23,181 17,729 420 5,381 4,919 +1,659 +304 7,039 +1,068 21 +2,068 +1,072 342 +3 +733 1,877 19,673 6,145 4,034 1,313 2,701 2,131 37,874 17,144 +12,766 13,521 +9,156 +43,120 +26,843 +1,548 193 +147 6,186 +4,640 +3,014 20,310 +43,880 +4,579 +11,314 20,713 +6,740 3,801 +38,265 698 4,417 +31,269 +75,149 +16 +4,539 1,014 882 439 1,479 8 +717 +733 2,165 14,599 14,240 10,509 +12 3,005 669 45,175 8,038 +27,483 +2,511 4,197 3,925 +200 1,970 +12,064

30% 80% 3% 2% 22% 20% 5% 16% 2% 29% 81% 0% 70% 0% 160% 34% 300% 44% 3% 29% 52% 25% 23% 7% 70% 19% 19% 19% 12% 56% 1% 6% 21% 83% 11% 10% 59% 22% 20% 25% 131% 5% 48% 12% 12% 3% 77% 60% 35% 58% 73% 10% 10% 21% 28% 29% 27% 0% 23% 42% 25% 37% 131% 14% 18% 3% 54% 12%

Elise .......................... 321 Evora.......................... 370 Other.......................... 109 Total Lotus .................. 800 Proton .......................... 1,581 PROTON ........................ 2,381 C-Zero........................ 1,830 C1 .............................. 82,965 C3 .............................. 181,868 DS3 ............................ 72,870 C4 .............................. 113,379 DS4 ............................ 22,989 C-Crosser .................. 4,322 Nemo ........................ 7,739 C5 .............................. 61,686 C3 Picasso ................ 65,095 Xsara Picasso ............ 5,026 C4 Picasso/ Grand C4 Picasso .. 104,628 C8 .............................. 5,437 Berlingo .................... 46,735 Other.......................... 8,062 Total Citroen ................ 784,631 iOn ............................ 1,926 107 ............................ 85,893 206 ............................ 84,057 207 ............................ 245,649 308 ............................ 155,227 407 ............................ 4,886 508 ............................ 85,699 RCZ............................ 15,742 3008 .......................... 115,896 5008 .......................... 69,954 807 ............................ 6,198 4007 .......................... 3,566 Bipper ........................ 7,661 Partner/Ranch............ 35,496 Expert ........................ 5,283 Other.......................... 1,772 Total Peugeot .............. 924,905 Other ............................ 4 PSA ................................ 1,709,540 M................................ 622 EX .............................. 488 FX .............................. 2,209 Other.......................... 362 Total Infiniti .................. 3,681 Pixo ............................ 14,997 Micra.......................... 75,614 Juke .......................... 106,461 Leaf............................ 1,728 Qashqai .................... 216,970 370Z .......................... 1,459 Note .......................... 35,425 X-Trail ........................ 9,235 Pathfinder .................. 4,253 Murano ...................... 3,100 NV200 ........................ 4,452 Other.......................... 5,594 Total Nissan ................ 479,288 NISSAN ........................ 482,969 Sandero .................... 71,646 Logan ........................ 48,553 Duster ........................ 141,961 Other.......................... 20 Total Dacia .................. 262,180 Twingo ...................... 134,061 Clio ............................ 304,106 Symbol/Thalia ............ 45,740 Megane...................... 251,487 Fluence ...................... 44,064 Laguna ...................... 49,738 Latitude...................... 10,719 Wind .......................... 6,773 Modus/Grand Modus 48,383 Scenic/Grand Scenic 161,379 Espace/Grand Espace 15,307

567 342 346 1,255 1,937 3,192 35 102,023 230,093 53,223 71,519 113 6,972 11,949 74,679 76,501 25,639 119,141 5,435 53,847 12,429 843,598 33 106,749 121,695 310,098 180,575 29,044 727 11,909 117,422 71,672 5,562 5,455 10,827 40,108 4,335 2,919 1,019,130 2 1,862,730 150 356 1,458 429 2,393 35,080 70,857 22,228 36 214,129 2,211 45,412 7,430 2,788 1,943 2,265 11,364 415,743 418,136 138,014 72,944 60,420 19 271,397 150,178 348,405 36,630 270,381 40,461 50,249 268 4,072 50,408 186,392 16,132

246 +28 237 455 356 811 +1,795 19,058 48,225 +19,647 +41,860 +22,876 2,650 4,210 12,993 11,406 20,613 14,513 +2 7,112 4,367 58,967 +1,893 20,856 37,638 64,449 25,348 24,158 +84,972 +3,833 1,526 1,718 +636 1,889 3,166 4,612 +948 1,147 94,225 +2 153,190 +472 +132 +751 67 +1,288 20,083 +4,757 +84,233 +1,692 +2,841 752 9,987 +1,805 +1,465 +1,157 +2,187 5,770 +63,545 +64,833 66,368 24,391 +81,541 +1 9,217 16,117 44,299 +9,110 18,894 +3,603 511 +10,451 +2,701 2,025 25,013 825

43% 8% 69% 36% 18% 25% 19% 21% 37% 59% 38% 35% 17% 15% 80% 12% 0% 13% 35% 7% 20% 31% 21% 14% 83% 32% 1% 2% 11% 35% 29% 12% 22% 39% 9% 100% 8% 315% 37% 52% 16% 54% 57% 7% 379% 1% 34% 22% 24% 53% 60% 97% 51% 15% 16% 48% 33% 135% 5% 3% 11% 13% 25% 7% 9% 1% 66% 4% 13% 5%

MARCH 2012

AUTOMOTIVE NEWS EUROPE

57

AUTOMOTIVE NEWS EUROPE

DATA

EUROPE SALES BY MODEL 2011 vs. 2010


2011 2010 Unit change Percent change 2011 2010 Unit change Percent change

Koleos........................ 16,871 Kangoo ...................... 35,720 Trafic.......................... 12,432 Other.......................... 1,143 Total Renault brand .... 1,137,923 RENAULT .................... 1,400,103 RENAULT-NISSAN ........ 1,883,072 9-3.............................. 10,152 9-5.............................. 3,255 Other.......................... 4 Total Saab .................. 13,411 Spyker brand .............. SWEDISH AUTOMOBILE 13,411 Impreza...................... 7,719 Legacy/Outback ........ 11,778 Trezia ........................ 2,802 Forester...................... 14,802 Other.......................... 1,266 SUBARU ........................ 38,367 Alto ............................ 32,750 Splash........................ 15,968 Swift .......................... 64,316 Kizashi ...................... 1,695 Jimny ........................ 12,968 SX4 ............................ 35,499 Vitara/Grand Vitara/XL-7 16,282 Other.......................... 73 SUZUKI .......................... 179,551 XF .............................. 16,700 XJ .............................. 3,707 XK .............................. 2,445 Other.......................... 102 Total Jaguar ................ 22,954 Defender.................... 1,436 Freelander ................ 24,138 Discovery .................. 12,374 Range Rover Evoque 12,068 Range Rover Sport .... 17,523 Range Rover.............. 7,698 Other.......................... 112 Total Land Rover ........ 75,349 Indica ........................ 2,540 Xenon ........................ 327 Other.......................... 652 Total Tata brand .......... 3,519 TATA MOTORS .............. 101,822 Cuore/Charade .......... 2,776 Sirion.......................... 3,230 Materia ...................... 634 Terios ........................ 4,886 Other.......................... 88 Total Daihatsu .............. 11,614 CT .............................. 16,076 IS................................ 4,043 RX .............................. 6,754 Other.......................... 554 Total Lexus .................. 27,427 iQ .............................. 12,956 Aygo .......................... 88,458 Yaris .......................... 141,327 Auris .......................... 95,265 Corolla ...................... 26,641 Prius .......................... 24,718 Avensis ...................... 56,281 VersoS...................... 20,647 Verso.......................... 39,183 Urban Cruiser ............ 6,938 RAV4.......................... 43,613 Land Cruiser .............. 10,913 Other.......................... 1,321 Total Toyota brand ...... 568,261 TOYOTA MOTOR .......... 607,302 A1 .............................. 97,903 A3/S3/RS3.................. 148,382 A4/S4/RS4.................. 162,085 A6/S6/RS6/allroad...... 84,824 A7 .............................. 18,382

13,828 39,216 10,650 1,609 1,218,879 1,490,276 1,908,412 14,857 5,537 1,095 21,489 3 21,492 10,256 15,585 16,479 4,562 46,882 45,025 19,693 58,431 1,025 17,473 36,931 16,589 234 195,401 20,308 3,627 2,728 886 27,549 4,117 29,350 13,346 18,710 6,373 155 72,051 2,352 427 2,117 4,896 104,496 3,626 5,214 1,495 9,175 508 20,018 6,584 10,443 1,326 18,353 23,313 83,063 162,534 94,827 31,566 42,959 63,426 38,990 14,067 50,930 12,334 2,575 620,584 658,955 25,190 178,650 172,799 70,052 3,184

+3,043 3,496 +1,782 466 80,956 90,173 25,340 4,705 2,282 1,091 8,078 3 8,081 2,537 3,807 +2,802 1,677 3,296 8,515 12,275 3,725 +5,885 +670 4,505 1,432 307 161 15,850 3,608 +80 283 784 4,595 2,681 5,212 972 +12,068 1,187 +1,325 43 +3,298 +188 100 1,465 1,377 2,674 850 1,984 861 4,289 420 8,404 +16,076 2,541 3,689 772 +9,074 10,357 +5,395 21,207 +438 4,925 18,241 7,145 +20,647 +193 7,129 7,317 1,421 1,254 52,323 51,653 +72,713 30,268 10,714 +14,772 +15,198

22% 9% 17% 29% 7% 6% 1% 32% 41% 38% 38% 25% 24% 10% 72% 18% 27% 19% 10% 65% 26% 4% 2% 69% 8% 18% 2% 10% 89% 17% 65% 18% 7% 6% 21% 28% 5% 8% 23% 69% 28% 3% 23% 38% 58% 47% 83% 42% 39% 35% 58% 49% 44% 7% 13% 1% 16% 43% 11% 1% 51% 14% 12% 49% 8% 8% 289% 17% 6% 21% 477%

A8/S8 ........................ 9,130 TT .............................. 17,014 A5/S5/RS5.................. 67,487 R8 .............................. 1,279 Q3 .............................. 7,603 Q5 .............................. 65,618 Q7 .............................. 12,862 Other.......................... 410 Total Audi .................... 692,979 Continental GT/GTC .. 1,302 Continental Flying Spur 191 Mulsanne .................. 243 Other.......................... 36 Total Bentley ................ 1,772 Bugatti ........................ 10 63 Aventador .................. Gallardo .................... 319 Murcielago ................ 7 Other.......................... 2 Total Lamborghini ........ 391 Boxster ...................... 3,154 Cayman .................... 1,986 911 ............................ 11,572 Panamera .................. 7,478 Cayenne .................... 18,017 Other.......................... 167 Total Porsche .............. 42,374 38,086 Altea .......................... Alhambra .................. 17,159 Mii .............................. 371 Ibiza .......................... 162,631 Leon .......................... 71,387 Exeo .......................... 21,518 Other.......................... 65 Total Seat .................... 311,217 Citigo ........................ 417 Fabia.......................... 165,259 Octavia ...................... 186,440 Superb ...................... 55,981 Roomster .................. 30,011 Yeti ............................ 55,443 Other.......................... 671 494,222 Total Skoda .................. 4,582 Up .............................. Fox ............................ 13,132 Polo............................ 371,454 Golf ............................ 493,855 Golf Plus .................... 84,264 Jetta .......................... 37,108 Passat ........................ 245,110 Passat CC.................. 23,530 Phaeton...................... 2,953 Scirocco .................... 26,916 Eos ............................ 11,897 Touran........................ 118,867 Sharan ...................... 46,194 Tiguan........................ 118,091 Touareg .................... 23,980 Caddy ........................ 57,298 Transporter/Caravelle/ Multivan/Shuttle/T5 .. 48,534 Other.......................... 8,319 Total VW brand ............ 1,736,084 Total Other .................... 66 VOLKSWAGEN .............. 3,279,115 OTHER .......................... 10,334 2,631 OTHER (China automakers) GRAND TOTAL .............. 14,165,735

8,239 17,548 76,337 1,632 66,025 12,455 645 632,756 1,185 244 71 78 1,578 15 357 82 14 453 3,387 2,028 12,013 6,641 13,504 246 37,819 42,074 8,408 157,117 73,263 24,516 388 305,766 157,000 177,336 49,218 26,224 45,749 765 456,292 31,252 360,937 497,051 83,838 19,466 168,266 23,666 2,159 35,766 11,363 94,505 16,142 108,257 15,922 42,371 50,689 10,481 1,572,131 94 3,006,904 8,302 3,303 14,197,868

+891 534 8,850 353 +7,603 407 +407 235 +60,223 +117 53 +172 42 +194 5 +63 38 75 12 62 233 42 441 +837 +4,513 79 +4,555 3,988 +8,751 +371 +5,514 1,876 2,998 323 +5,451 +417 +8,259 +9,104 +6,763 +3,787 +9,694 94 +37,930 +4,582 18,120 +10,517 3,196 +426 +17,642 +76,844 136 +794 8,850 +534 +24,362 +30,052 +9,834 +8,058 +14,927 2,155 2,162 +163,953 28 +272,211 +2,032 672 32,133

11% 3% 12% 22% 1% 3% 36% 10% 10% 22% 242% 54% 12% 33% 11% 92% 86% 14% 7% 2% 4% 13% 33% 32% 12% 10% 104% 4% 3% 12% 83% 2% 5% 5% 14% 14% 21% 12% 8% 58% 3% 1% 1% 91% 46% 1% 37% 25% 5% 26% 186% 9% 51% 35% 4% 21% 10% 30% 9% 25% 20% 0%

Note: Excludes models registered as commerical vehicles. Europe sales by model are compiled using sales data from the following countries: Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, The Netherlands and Turkey. Source: JATO Dynamics +44(0) 20 8423 7100 (www.jato.com)

58

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RETAIL

Second chance
NICK GIBBS
autonewseurope@crain.com

Used car sales rescue automakers and their dealers in hard times
Automakers are launching Europewide used-car programs such as VWs Das WeltAuto.

sed cars are increasingly becoming the savior of dealers across Europe as automakers seek to boost sales of second-hand models to replace falling new-car volumes. Dealers are fighting for survival and used cars are a lifeline right now, particularly in southern Europe, says Hyundai Europe Chief Operating Officer Allan Rushforth. To attract buyers, automakers -- through their franchised dealers -- offer extras previously found only on the new-car option list, including extended warranties. Volkswagens DasWeltAuto used-car program offers a standard 12-month warranty and customers also can choose a free extra from a list that includes accessories and discounted maintenance. Until recently, most used-car programs were specific to one country, but now automakers are applying a single standard across Europe. Fords A1 program in Germany, the Netherlands and Belgium includes in the price of a used-car a minimum 12-month warranty valid throughout Europe. Opel operates G2 in European countries including Germany and Spain. Opels UK sister brand, Vauxhall, sells used cars through its Network Q program. After launching in Germany in 2010, Das WeltAuto has expanded to France, the UK, Italy and Russia. Used-car programs typically focus on a cars quality but Das WeltAuto takes into consideration the complete buying experience, says Dave Wilding, VW Retails UK used-car manager. Hyundais iBest scheme was launched across Europe in 2010. Its a massive opportunity to boost our loyalty and track the second owner, Rushforth says. Theres a finance opportunity as well. The opportunity to finance used cars is arguably bigger than for new cars."

customers dont drift off to independent dealers and also helps to maintain a dialog between owners and dealers now that service intervals are longer. This new shift in thinking among automakers appears permanent. Its a long-term commitment to make the usedcar buying experience as close to the newcar experience as possible, says VWs Wilding. For example, a second-hand Golf buyer can choose from up to 17 pages of options.

BIG MARKETS
In major European markets, used-car volumes are much higher than newcar sales (figures in millions)
NEW USED

UK Germany France Italy Spain

2.0 3.9 2.3 2.0 1.0

6.6 6.4 5.5 2.8 1.7

GOOD AS NEW FACTORY


Meanwhile, refurbishment of second-hand cars to become like new is growing. In Corby, England, Vauxhall operates what has been dubbed a used-car factory running 24-hours during the week. This year 40,000 cars will be refurbished there, up from 32,500 cars in 2011. Most are former daily rental vehicles that are cleaned up to feed Network Q with good quality cars. That in turn feeds back to the newcar market. Its our mission to underpin residual values. That way you underpin new-car prices, says Nick Woodcock, operations manager at Corby. Hyundais iBest program is also improving residual values. In Spain, weve improved used-car sales by 17 percent and used-car values by 5 percent, Rushforth says. Higher used-car values improve residual values for new cars, which Hyundai hopes will draw more new-car customers to the brand. VW also has one eye on the new-car market with its used-car program. By encouraging more people to come into dealerships, we believe that it will have a positive impact on new-car sales, Wilding says. The secondhand car market will continue to grow in importance. The used market is chugging along a lot more consistently than the newcar market, says Jeff Paterson, new-car editor at consultancy Eurotax-Glasss. Adds Cooke: In Europe, the used-car sector has been a savior for dealerships over the last couple of years.

SOURCE: BCA EUROPEAN USED CAR MARKET REPORT

euros) in 2010. Automakers previously viewed used cars as a nuisance, but thats changing rapidly, says the reports author, Peter Cooke, professor of automotive management at the University of Buckingham in England. With more competition for good used cars, profit margins are tight but automakers are getting more clever in generating money from each sale. In the big European markets, the used-car sector is much larger than the new-car business (see chart). Among smaller countries, the Netherlands has a big used-car market with sales of 1.9 million in 2010 compared with new-car sales of 500,000. The expansion in extended warranties is an example of how automakers offer incentives on used cars once only available to new-car buyers. It also provides an income boost to dealers whose new-car business may be dropping during the economic downturn. Protected by the warranty, used-car customers return to the dealer for repairs and maintenance. This is important not only for the bottom line but also brand loyalty. Says Hyundais Rushforth: The warranty means

UK TOP MARKET
The UK is Europes biggest used-car market. In 2010, the latest year for which figures are available, 6.6 million used cars were sold in the UK, topping Germany's 6.4 million and Frances 5.5 million, according to the BCA European Used Car Market Report. The UKs used-car business was worth 35 billion pounds (41.8 billion

62

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AUTOMOTIVE NEWS EUROPE

HUMAN RESOURCES

People on the move H


it by falling sales in Europe, PSA/Peugeot-Citroen has made big changes to its top management. In other important personnel changes, GM marketing expert Susan Docherty has succeeded Wayne Brannon as head of Chevrolet Europe, while Ford of Europe and Opel have new manufacturing chiefs. and Citroen brands upmarket. He reports to CEO Philippe Varin.

GMs Docherty is new Chevrolet Europe boss

Dale Wishnousky succeeds Flewitt as Ford of Europes head of vehicle operations. Previously Wishnousky was plant manager at Ford's Kansas City factory in Missouri in the United States.

Weak market, loss of No. 2 prompts shake-up at PSA


PSA/Peugeot-Citroen has made major changes among its top management as seeks to counter falling sales in Europe during the economic downturn.
Saint-Geours

General Motors Co. executive Susan Docherty is the new head of Chevrolet Europe, succeeding Wayne Brannon, who has retired after 38 years with GM. Docherty, 49, will oversee the growth of Chevrolet and Cadillac in western and central Europe, GM said. Previously she was head of GMs international sales and marketing Docherty operations. Docherty has held various sales and marketing roles with GM, including head of U.S. marketing, general manager of Hummer and marketing director for Cadillac. A native of Canada, she has also had marketing roles at GMs offices in Zurich, Switzerland, and Ruesselsheim, Germany. Detroit-born Brannon, 56, began his career with GM at Cadillac in 1973. Under his fiveyear leadership, Chevrolet boosted its European sales and market presence. Chevrolet Europes sales account for about 11 percent of global Chevrolet sales.

Audi design head Sielaff takes key VW Group role


Audi brand design chief Stefan Sielaff has moved to a new post at parent Volkswagen Group. Sielaff is VW Groups new interior design boss, as well as head of VWs design center in Potsdam, Germany. Sielaff, 49, who took up his new role on Feb. 1, replaced Thomas Ingenlath, who has left VW. Sielaff was a key architect of Audis evolving brand identity. He developed the characteristic Sielaff face of Audi cars, and designed Audis distinctive LED exterior lights. He also oversaw development of production models such as the Audi A1, A6, A8 and Q3. Wolfgang Egger, head of Audi Group design, which includes overall design responsibility for Audi and Lamborghini, now also takes charge of Audi brand design on an operational level.

Gales

The automakers former second-in-command Jean-Marc Gales has left the company to head the European suppliers association CLEPA. Company veteran Frederic Saint-Geours replaces Gales. PSA has also recruited a new strategy director and promoted Xavier Peugeot, a member of the carmakers controlling shareholder family, to head sales at the Peugeot brand.

Flewitt named Ford of Europe manufacturing chief


Mike Flewitt has replaced Ken Macfarlane as Ford of Europes manufacturing head. Flewitt, 49, was previously vehicle operations chief at Fords European operations. He started his working life as a trainee at Fords factory in Halewood, England, in 1983. Macfarlane, 61, has retired after three years as head of Ford of Flewitt Europes manufacturing. During a 39-year Ford career, Macfarlane directed truck manufacturing operations in North America. He also held posts in engineering and quality. Flewitt worked for Ford for most of his career apart from spells as production director at Rolls-Royce Cars and with AutoNova AB/Volvo Sweden and TWR Group. He rejoined Ford in 2003 as production quality director for European manufacturing operations.

Opel recruits two new management board members


Opel CEO Karl-Friedrich Stracke is shaking up the brands senior leadership with the management board appointments of Thomas Sedran and Johan Willems. Sedran, 47 will join Opel on April 1 from AlixPartners as head of operations, business development and corporate strategy. He is Sedran tasked with developing and implementing strategies to ensure longterm profitable growth at the money-losing General Motors brand. Willems, 51, joined Opels management board as head of communications in January, succeeding Susanne Wegerhoff who left the company. Willems was previously head of GMs international communications in Shanghai, China. In another change, Peter Thom starts as Opels manufacturing chief on March 1. Thom, 48, succeeds Reinald Hoben, 59, who has retired.

Saint-Geours steps in to Peugeot replace Gales as PSAs head of brands. Gales takes up a new post as CEO of CLEPA on April 2. Saint-Geours, 61, previously was PSAs Chief Financial Officer. During a 25-year career at PSA, he has held key positions, including Peugeot brand chief. Jean-Baptiste de Chatillon, who was previously the group's financial controller, is new CFO. Gales, 49, succeeds Lars Holmqvist at CLEPA. Holmqvist is retiring after eight years as the associations CEO. Xavier Peugeot moves to the newly created position of product director for the Peugeot brand. Guillaume Couzy will assume his previous role as Peugeots director of marketing and communication. Both executives report to Peugeot CEO Vincent Rambaud. PSA has hired Yves Bonnefont as strategy director. Bonnefont, who ran the McKinsey consulting firms global automotive practice, will speed up PSAs strategy to globalize its operations and move the Peugeot

64

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MARCH 2012

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FINAL WORD

Luca Ciferri

Diversity Inc.
G
erman engineer Harald Wester leads Italian icons Alfa Romeo and Maserati. French marketing whiz Olivier Francois is the man driving Italys quintessential brand, Fiat. Lebanon-born architect Saab Chehab heads Chrysler; Canadian Reid Bigland guides Dodge; and Englishman Michael Manley is steering Jeep. Brazilian Vilmar Fistarol is global purchasing chief, Italian Pietro Gorlier heads global parts operations at Mopar, while Richard Palmer, another Englishman, heads finance. What do these men have in common besides their diverse countries of origin? Each holds a top job at Fiat-Chrysler and each has a shot at becoming the next COO of one of the companys four key regions and, ultimately, the automakers future CEO. Fiat-Chrysler may be an Italian-American firm, but its 22-member leadership team, the so-called Group Executive Council (GEC), features executives from all over the world. Eight countries are represented on the GEC, which since Sept. 1, 2011, has run Fiat-Chrysler as a single, global organization. If you take a look at just about any other automaker in the world, the leadership team is predominately represented by people from the companys home country. The GEC has eight Italians and five U.S. natives, which equals a combined 60 percent of the board. demand from the people he still calls kids although most are in their mid-40s is flexibility and tireless dedication. They have to be able to travel. Marchionne refers to GEC members as nomads because of their ability to easily move from place to place. The GEC meets monthly, usually from Friday evening until Sunday afternoon, either at Fiats headquarters in Turin or at Chryslers base in Auburn Hills, Michigan. The nomads also commuted to Brazil for a meeting last November and will gather this spring in Beijing prior to the auto show there.

is Chief Correspondent at Automotive News Europe. He can be reached at lciferri@crain.com

Fiat-Chrysler has deep talent pool of future CEO candidates


America, Europe and Latin America accounted for 95 percent of Fiat-Chryslers roughly 4 million combined unit sales last year. One might think Europe is Fiat-Chryslers largest market. Nope. North America was tops, accounting for about 1.8 million sales last year. Europe was No. 2 with about 1.3 million vehicle sales. When only passengercar sales are counted, Fiat-Chryslers 2011 European volume was 948,000 units, a decline of 12 percent, according to industry group ACEA. Essentially, Fiat has evolved from an Italian small-car producer to a U.S. manufacturer with production capacity in Europe, said Stefan Burgstaller, an auto analyst at Goldman Sachs in London.

ALWAYS ON CALL
They also have to give the same unwavering attention to the company that has become a Marchionne trademark. You are on call 24/7, the CEO says. You get a message [from me], and if you dont answer back in an hour, theres something wrong, unless I know youre flying, he says. And it does not matter if it is Sunday, because Marchionne always works on what many people consider a day of rest. The reason that Marchionne drives his executives so hard and demands so much is because he knows that whoever succeeds him had better be battle-tested and proved. The CEO says he will be around until at least 2015 maybe longer and that his successor probably already sits on the GEC. I think there is a better than 90 percent chance that my successor would come from this bunch of kids, he says, declining to give any hints on who is the most likely successor. Whoever succeeds Marchionne probably will have to fix a flaw that the CEO has been trying to address since he arrived at Fiat in 2004: the companys heavy dependence on a limited number of markets. North

SLIPPING IN EUROPE
In Europe, Fiat-Chrysler ranks sixth in unit sales behind Volkswagen Group, PSA/Peugeot-Citroen, Renault, General Motors and Ford. Fiat-Chrysler also could slip below BMW Group, which outsold the automaker last December. The bright spot for the alliance is Brazil, where Fiat was No. 1 for the 10th consecutive year. The weak spots are China and India. Fiat-Chrysler generates less than 3 percent of its unit sales from Asia. The reality is that if Fiat-Chryslers sales and manufacturing networks were as international as its top executive team, it would be the worlds most globally diverse automaker. That is not the case. Marchionne probably wont be CEO long enough to see Fiat-Chrysler become a truly global powerhouse, but there is a very good chance that one of the kids he is mentoring will have the worldwide view, work ethic, open-mindedness, brains and experience to make it happen.

TALENT TRUMPS NATIONALITY


When asked what he looked for when choosing the GEC members, Fiat-Chrysler CEO Sergio Marchionne said the persons home country was irrelevant. I value talent over nationality, said Marchionne, who is dual citizen of Italy and Canada. What the 59-year-old executive does

United Nations: Marchionne has one of the industrys most multinational management teams

Harald Wester
Chief Technical Officer; Alfa and Maserati CEO

Olivier Francois
Chief Marketing Officer; Fiat brand head

Richard Palmer
Chief Financial Officer

Alfredo Altavilla
Head of Business Development

Alessandro Baldi
Head of Services & Holdings, GEC coordinator

Doug Betts
Head of Quality

Reid Bigland
Dodge brand head

Vilmar Fistarol
Head of Purchasing

66

AUTOMOTIVE NEWS EUROPE

MARCH 2012

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