Automotive Business News
Fiat denies Alfa Romeo sale to Volkswagen
We all know that Volkswagen Group is very firm with it’s plans to become the world’s No. 1 auto maker. The German auto giant already has Audi, Seat, Skoda, Lamborghini, Bentley, Bugatti as well as Porsche under it’s belt. It also owns Italdesign, Karmann, Volkswagen’s Light Commercial Vehicles (LCV) arm as well as having a 19.9% stake in Suzuki, among others.
According to Autonews, Volkswagen has set it’s eyes on Fiat’s Alfa Romeo, despite Volkswagen CEO Martin Winterkorn saying earlier that “Our appetite for buying in Italy is fully satisfied.” The automotive news site claims that two executives at Volkswagen have confirmed that the company is “seriously interested” in acquiring the Italian brand. An unidentified high-ranking manager at Volkswagen also revealed to Automobilwoche, an Autonews sister publication, “Alfa is a globally recognized brand with sporty genes and a great tradition. If such a treasure could be had, we must not hesitate… too long.”
However despite Volkswagen’s deep interest in Alfa Romeo, a high ranking Fiat executive revealed to Autonews that the company is not interested in selling the brand. “We have no intention at all of selling the brand to Volkswagen,” he specifically said. It was also revealed that Fiat intends to stick with the turnaround plan set for Alfa Romeo, which was announced by Fiat CEO Sergio Marchionne in April.
Marchionne aims to sell up to 500,000 Alfa Romeos a year, an ambitious goal according analysts. Arndt Ellinghorst, global head of automotive research at Credit Suisse told Autonews in June, ”Maybe Alfa could get to a half million unit sales a year, but only after the brand is sold to Volkswagen.” ”Alfa plans to sell 85,000 units in the United States in 2014, therefore Fiat’s plan really means it wants to boost sales in Europe from 100,000 units to more than 400,000. I do not see how they will be able to steal so many buyers from their German competitors,” said Massimo Vecchio, head of industry research at Mediobanca in Milan.
It was also said that Alfa Romeo has been reporting losses of between 200 million Euro to 400 million Euros a year for the past ten years. Definitely a huge ambition by Marchionne if you ask me. Looks like Volkswagen may have to knock on Fiat’s door later in the future.
VW seals 90.1% stake in Giugiaro, names top management
We have previously revealed that the Volkswagen Group has acquired a 90.1% stake in automobile design house Italdesign Giugiaro through one of the company’s subsidiaries: Lamborghini. The company has reiterated it’s takeover and said that the 90.1% acquisition covers the name rights and patents. At the same time Volkswagen has also named the top management of it’s new design arm.
Gerhard Willner, 49 and Salvatore Cieri, 53 have been appointed to the Executive Committee of the Board of Directors of Itadesign Giugiaro. Willner currently heads concept development at Volkswagen Passenger Cars, after holding the same position in Audi previously. Cieri who is a member of the Board of Directors responsible for Administration, Finance and Controlling in Lamborghini now serves as the Managing Director in Giugiaro. Giorgetto Giugiaro, co-founder of the design house is the Chairman of the Executive Committee while his son Fabrizio Giugiaro is the Vice President. Enzo Pacella maintains his position as Managing Director.
With so many automotive brands under Volkswagen Group’s umbrella, the acquisition of the Italdesign Giugiaro is viewed as a strategic decision made at the right time. The German automotive giant will fully utilize the design house in designing vehicles for at least some it’s brands. The company was established in 1968 and it has given it’s touch to vehicles such as the 1974 Volkswagen Scirocco, 1974 Volkswagen Golf, 1973 Volkswagen Passat, Alfa Romeo 159 and much more. One of it’s most recent projects is the Proton EMAS concept and it has also been contracted to come up with the Proton Persona replacement.
Maruti Suzuki may manufacture vehicles for VW
According to several newspapers, Maruti Suzuki’s managing director cum chief executive Shinzo Nakanishi has revealed that the company he represents may manufacture vehicles for German auto giant Volkswagen. He told the Hindu Business Line “The talks with Volkswagen are going on at a global level and there is still no clear picture. There is a possibility of an OEM (original equipment manufacturing) supply contract with them, like we have with Nissan.”
Maruti Suzuki already has a three-year deal to manufacture and export the European-bound Pixo hatchback for Nissan. At the same time it was confirmed that there was no possibility for platform sharing since Volkswagen’s production and product development costs are substantially larger and that it would negatively affect Maruti Suzuki’s viability. For the record Volkswagen recently acquired a 19.9% stake in Suzuki for US2.5 billion.
Volvo plans to produce 7-Series/S-Class fighter
Volvo’s newly-crowned owner Geely has announced plans to build a luxury sedan that will go against other vehicles from the segment including the BMW 7-Series, the Mercedes-Benz S-Class and the Audi A8. The chairman of Zhejiang Geely Holding Group, Li Shufu said in an interview with news agency Reuters, “We want to make more high-level cars that compete with the S-Class of Mercedes Benz and the 7-Series of BMW. We need products to compete in that segment.”
Volvo’s current largest sedan is the S80 which is a D Segment vehicle, competing with the BMW 5-Series and the Mercedes-Benz E-Class. Unfortunately that is all we have regarding the plan for now as Li did not reveal information about possible production or release dates. He did mention that Volvo has to increase it’s overall sales to about 380,000 units per annum, up from 335,000 units sold last year. The increase will help Volvo become profitable. Li also added that the company has to sell more than 380,000 units for it to become competitive.
Geely has just officially taken over the Swedish brand from previous owner Ford for an amount of US$1.8 billion. Geely previously paid US$200 million and recently a further US$1.3 billion to Ford with the remaining to be finalized by end of the year. The arrangement also includes a continuous supply of technology and parts such as powertrains and other components for a specified period of time.
At the same time Stefan Jacoby has been appointed as the President and Chief Executive of Volvo Cars. Jacoby previously served as Volkswagen’s Chief Executive for the US. It remains to be seen whether Geely can turn Volvo into a success story, only time will tell!
Toyota’s sudden acceleration issue due to driver error?
This just in. Remember all that noise and fiasco about sudden acceleration of Toyota cars that linked to 75 fatal crashes? Guess what, The Wall Street Journal has published an article stating that driver error or misapplication of the accelerator pedal was the cause of the sudden acceleration problem.
The report said that the U.S. Department of Transportation made the conclusion after receiving over 3,000 complaints. The investigation found that the throttles were wide open and the brakes were not depressed which leads them to believe that the drivers were mistakenly accelerating instead of hitting the brakes.
It was also stated that they have yet to find any electronic glitches in Toyota cars that could have led to the crashes. However the report did say that a Toyota vehicle was at fault in one case. It involved a Lexus ES350 which caused the fatality of a highway patrolman in California and three passengers last year.
Thus far the only defects that Toyota can be blamed entirely for are the floor mat and sticky accelerator issues. Toyota has definitely suffered a lot from the sudden acceleration fiasco and I wouldn’t be surprised if a law suit is in the works. More details and confirmations coming soon.
Geely to build an R&D centre for Volvo in Shanghai
Geely, the current owner of Volvo has announced that it will setup a research and development facility in Shanghai, China. The company said that the centre will be located at the Shanghai International Automobile City (SIAC) which is situated about 25 kilometers from downtown Shanghai.
This is the same place where the Shanghai Volkswagen Automotive Co. and Shanghai Automotive Industry Corp call home. “We have reached a deal and the R&D center will be built in our automobile city,” said Xu Ming, vice general manager of SIAC at an automobile electronics forum held last month.
He also added the centre will be called the Geely-Volvo Research and Development Center. Unfortunately we don’t have more information to share with you including a possible launch date. There are also rumors circulating that Geely is scouting possible sites in the country for a Volvo assemble plant.
Chrysler models to be rebadged as Lancias in Europe
The Fiat and Chrysler alliance will lead to Chrysler models being rebadged as Lancias in Europe, a report by Automotive News revealed. Models that will carry the Fiat-owned brand include a new compact sedan and a mid-sized sedan that will be replacing the PT Cruiser and Sebring models.
The 300C sedan and the new Voyager minivan will be sold under the brand as well. At the end of the day the Chrysler name will disappear from mainland Europe. The Chrysler name will only be maintained in the UK and Ireland.
Fiat which owns 20% of Chrysler plans to consolidate and shrink Lancia and Chrysler dealers from the current 1,200 in Europe to about 350. The company also plans to sell up to 300,000 Lancia/Chrysler vehicles per year by 2014.
The Dodge brand which is owned by Chrysler would become a niche player in the region selling cars like the Charger, Challenger and Viper. Current Chrysler dealers that sell Jeep models will be given new dedicated franchise contracts for the 4×4 brand.
Daimler being investigated for bribery in Nigeria
If you think that the bribery fiasco involving Daimler has ended, think again. After making a settlement worth US$185 million in April following law suit that was brought forward by US Justice Department and the Securities and Exchange Commission and after being charged for the same crime in Egypt, Daimler now faces the same scenario in Nigeria.
Just like its previous cases, the one launched by Nigeria’s anti-corruption agency centers around bribes given out to certain Nigerian officials to seal business deals. The investigation also involves Anammco, a Nigerian company that assembles Mercedes trucks and buses. The bribes are said to be worth up to US$15 million.
Nigeria’s head of Economic and Financial Crimes Commission said, “We opened investigations into the Daimler/Anammco scam recently following a judgment in the U.S. where some Nigerians were convicted in relation to the Daimler bribery scam. So far we have interviewed about four officials and representatives of Daimler and Anammco in Nigeria.”
The above mentioned Anommco was established in 1970 and it was a joint venture between Daimler, the Nigerian government and local investors. Daimler sold its Anommco stake in 2007 following a company policy that recommended Daimler not to invest in companies that are partly government-owned. This “company policy” reason was given out by Anammco.
Source.
