Automotive News Europe - February 16, 2009 - 4

PAGE 4 · www.autonewseurope.com Commentary February 16 , 2009 Bitter fight looms for battery lead Bettina Mayer Automotive News Europe MUNICH The battle among suppliers to develop the batteries that will power tomorrow’s cars has just begun. And the current leaders won’t be the winners at the end. So believes Wolf-Henning Scheider, Robert Bosch’s president of gasoline systems. Scheider, who also leads Bosch’s hybrid and electric vehicle technology unit, said that battery development for vehicles is still in the early stage. “The battery race will be decided in the next decade,” Scheider told Automotive News Europe. He feels that way because he sees great potential to make batteries that provide more power and cost less. Bosch, Continental, Magna Steyr and Johnson Controls are newcomers to the field. They are all focusing on lithium-ion batteries. Said Continental CEO KarlThomas Neumann: “European and Asian suppliers will fight a head-to-head battle in lithium-ion technology.” Analysts expect the lithium-ion battery market to be about a ¤10 billion-a-year industry by the end of the decade and grow 10 percent a year. But not everyone is bullish. The current leaders in mating batteries, electric motors and combustion engines are Toyota and Honda. Both are reluctant to switch from nickel-metal hydride batteries to lithium-ion batteries because of safety and cost concerns. Launched in 1955, Citroen’s first DS (left, 1972 version) is a 20th century icon. The 21st century DS concept is a small, stylish box designed to compete with the Mini. Citroen bets on DS mystique Revival of name without rebirth of the loved car left many feeling down Lawrence J. Speer Automotive News Europe PARIS Citroen disappointed a lot of people earlier this month. Rumors were running wild that the French carmaker was bringing back its legendary DS line. Car fans wanted to believe that Citroen’s longtime design chief, Jean-Pierre Ploue, was finally going to put a 21st century spin on the original DS. Naturally, the faithful were unhappy when the French carmaker revealed its DS Inside concept, a small, stylish box clearly designed to compete with the Mini. The planetary buzz and subsequent letdown could have been avoided had fans paid closer attention to the initial Automotive News Europe report, which clearly stated that Citroen was reviving the DS badge for a new range of near-premium models. Not a new DS. Citroen’s first DS, which launched in 1955, is a 20th century icon. Its futuristic design and technological advances set Italian designer Flaminio Bertoni’s masterpiece apart from just about every other executive sedan on the road for the next 20 years. The DS, as Citroen product boss Vincent Besson explains, is “irreplaceable” and “impossible to copy.” Asking a car company to build a new DS in 2009 is akin to ordering an architectural firm to replace the Eiffel Tower. It’s just not going to happen. Some purists think the DS moratorium should extend to the famous initials, which Citroen will bring back starting in 2010 across its new DS range. Marketing executives disagree. They say design and performance standards will set the new, near-premium cars apart from the rest of the Citroen range, earning the right to the DS comparison. Citroen will show the DS Inside concept during next month’s Geneva auto show. The production DS3 – based on the existing small C3 – goes on sale in 2010. A lower-medium DS4, based on the existing C4, and an upper-medium DS5, based on the existing C5, will follow in 2011. Citroen wants to squeeze extra revenue and higher margins out of its near-premium line. Production costs only will be slightly above those for cars in the C-labeled range. Prices, on the other hand, are expected to hover slightly below those for cars from premium-sector competitors such as Audi, BMW and Mercedes-Benz. The desire to convert dormant goodwill into bottom line added-value is the real reason behind Citroen’s decision to dust off the DS badge. Customers will soon decide if the ANE bet pays off. Fiat ponders US return in 2010 Luca Ciferri Automotive News Europe TURIN Fiat is considering whether to export some Europe-built products to the US prior to starting local production there in mid-2011. “We are currently working on a plan to begin shipping the Fiat 500 minicar and the Alfa Romeo 940-project [the code-name of the 147 entry-premium replacement] to the US in about a year from now,” a person familiar with the matter told Automotive News Europe under condition of anonymity. According to the source, the numbers of these two models shipped from Europe would be just “some thousand units each.” They would simply be a precursor to building a larger volume of cars starting in mid-2011 under a proposed alliance with Chrysler. If the proposed alliance with Chrysler is finalized, the US automaker will begin building the Fiat 500 at its plant in Toluca, Mexico, and the Alfa 940 at an as-yet unspecified US location. Selected US Chrysler-Dodge-Jeep dealers would distribute the Fiat and Alfa models, the source said. The proposed alliance would give Chrysler access to four Fiat platforms for production in North America. The cars range in size from minicars to upper-medium models with gasoline engines ranging from 1.4 to 1.8 liters. At the same time, Fiat is considering whether to base its oft-delayed Alfa 169 upper-premium model on a Chrysler platform. The Italian automaker is looking at the LX platform that underpins the Chrysler 300 and Dodge Charger as the basis for the Alfa 169. This possible Chrysler-based Alfa would also use a beefed-up version of the Chrysler Phoenix engine, a new, allalloy V-6 gasoline unit due next year. The 169 will eventually replace the Alfa 166, a model that Fiat discontinued in Europe in spring 2007. ANE Pairing with Samsung Bosch became a competitor last summer when it teamed up with Samsung SDI. The partners will invest $300 million to $400 million (about ¤233 million to ¤311 million currently) in SB LiMotive, their 50:50 battery joint venture. The new company aims to start production of lithium-ion battery systems in South Korea by 2011. SB LiMotives is focused on the chemistry, battery packs, electronics and system optimization, Scheider said. Samsung has long experience in lithium-ion battery technology. Scheider said Bosch is targeting a 12-year battery life. “With the cost of this component, it is impossible that its lifetime can be shorter, because it would downgrade the value of the car,” he said. Late to the party Bosch’s push into battery technology came too late to bid to supply GM’s Volt plug-in hybrid. GM chose South Korea’s LG Chem as its partner to make lithium-ion battery packs for the Volt. The battery is to last for 10 years or 241,000km. VW recently partnered with Japanese electronics giant Toshiba to develop electric drive units, power electronics and battery systems for its Up minicar. Starting in 2010, Toshiba aims to make 3 million lithium-ion battery cells a month. Scheider feels Bosch’s task is “to catch up with Japanese suppliers,” who were the first hybrid players. He claims Bosch’s parallel-hybrid system will have better energy efficiency and cost efficiency compared with first-generation Japanese systems. Bosch also is seeking to standardize components like the electronics and motors, to offer its cusANE tomers cost advantages. The Alfa Romeo 169 (inset) will replace the 166, which stopped production in 2007. Scrappage bonus for the UK? John Revill Automotive News Europe Ford of Europe has joined calls for the British government to introduce scrappage incentives to boost newcar sales during the recession. Ford’s head of European sales and marketing Ingvar Sviggum said schemes in France, Italy and Germany, which give money to consumers changing old cars for new models, have reduced the impact of the economic downturn. “I went to see five German dealers this week and there were a lot of customers coming in to take advantage of the scrappage incentives,” Sviggum said on a conference call. Most were buying new cars for the first time. “Many of the people I spoke to were used-car buyers before,” he said. “I really hope we will see more of the same programs in other major markets like the UK.” In the UK, new-car sales were down 30.9 percent to 112,087 last month, according to the European automakers association, ACEA. The British government is currently considering whether to introduce a scrappage bonus. Sviggum said the French and German sales declines in January were less than the European average. ANE ‘Financial challenges’ keep Mitsubishi out of IAA Felix E. Bauer & Finn Rütten Automotive News Europe Mitsubishi is pulling out of Europe’s biggest auto show, the IAA in Frankfurt in September. It cited “extraordinary business and financial challenges” as the reason. The Japanese carmaker also will not participate in the Leipzig auto show in eastern Germany next month. Mitsubishi says it will focus on just one auto show per region this year. In Europe, the carmaker will only appear at the Geneva show next month. Martin van Vugt, head of Mitsubishi Germany, said the company will focus on organizing local marketing activities with its sales partners, arranging “our own auto shows in car dealerships.” At the Geneva show in March, Mitsubishi will unveil a sporty version of its i MiEV all-electric concept car called the i MiEV Sport Air. ANE

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Automotive News Europe - February 16, 2009

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