Automotive Business News
BREAKING – Mahindra to purchase 70% of Ssangyong for US$378 million
A report by Autonews has indicated that Mahindra & Mahindra Ltd. is set to purchase a 70% stake in the troubled Ssangyong Motor Co., which would give the Indian giant a controlling stake. The report stated that the 70% stake is valued at US$378 million which is about 427.1 billion won. Ssangyong which went into court receivership early last year was formerly owned by China’s SAIC.
The stake purchase would need approval from Ssangyong’s creditors and Mahindra also revealed its intention of purchasing US$84 million (95.4 billion won ) worth of new bonds from Ssangyong. This news comes after Mahindra was named preferred bidder of the Korean auto company in August. The report also stated that Mahindra aims to complete the acquisition by March 2011.
A report by The Hindustan Times stated that both companies have officially signed a deal on the acquisition. Pictured above is the Italdesign Giugiaro-designed Ssangyong Korando which has been approved for production.
Volkswagen Group shows interest in Ferrari
Looks like Volkswagen is ready for a shopping spree. Autoweek has reported that the German giant is interested in acquiring Ferrari, which sits under Fiat’s umbrella. Unfortunately we don’t have an official word from Volkswagen just yet. However Volkswagen’s interest may grind to a halt as Ferrari is Fiat’s most profitable brand and it wouldn’t let it go easily.
However there are also rumors that Fiat is looking to sell 49% of Ferrari while retaining the other 51%. Ferrari is said to be worth approximately US$4 billion and it may join rivals such as Lamborghini, Bugatti and Porsche under Volkswagen if everything goes the giant’s way. Earlier in August, rumors were also going around regarding Volkswagen’s interest in Alfa Romeo.
Volvo’s new extended management team and head of China operations announced
Volvo, which is now owned by Chinese company Geely has announced a new extended management team. The company’s senior vice presidents for Product Development, Manufacturing, Purchasing and Quality will all report directly to the CEO, Stefan Jacoby. The head of Special Vehicles will also report directly to Jacoby. The positions of operative heads for the company’s industrial operations have been eliminated.
Volvo also announced that Freeman Shen (pictured above) will be the company’s senior vice president for the its operations in China. Shen is a Zhejiang Geely executive who acted as a close advisor to the Mr. Li Shufu, who is now the chairman of Volvo Cars.
He was also the former CEO of Fiat Powertrain Technologies China between 2007 and 2009. The company also announced that chief operating officer Steven Armstrong will head back to Ford Europe in Cologne, Germany.
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!
