Automotive News Europe - March 2, 2009 - 3

March 2, 2009 www.autonewseurope.com · PAGE 3 Industry update Carmakers must save cash or suffer Launch delays, layoffs, less travel are ways automakers are cutting back during slump As the automotive industry gathers in Geneva for the annual auto show, all of the major manufacturers foresee a challenging year ahead. Cash conservation is a theme that reoccurs in their presentations to analysts and discussions with journalists. Some carmakers have already taken drastic action to reduce their cash burn. In a presentation to analysts in January, Fiat CEO Sergio Marchionne’s called his talk “The paradigm shift for 2009: from industrial development to running it for cash.” He said the main decisions had already been taken. Several 2009 new-car launches have been delayed to 2010 and there will be massive cuts to all types of spending, from r&d to capital expenditure to travel. Below is a snapshot of where Europe’s major carmakers are positioned financially, and how each plans to survive the financial storm. ANE Photo: Reuters Daimler CEO Dieter Zetsche has called 2009 a “Darwinian year” for the auto industry. The automaker hopes to get a lift this year from the launch of the new E class. BMW BMW group’s automotive revenues fell 9.4% to €48.78 billion in 2008. Unit sales fell 4.3% during the year, but the decline accelerated in January 2009 to a rate of 24%. To save cash, BMW introduced shorttime working at four of its German plants and eliminated 850 jobs at its Mini factory in Oxford, England. Fiat The Fiat Group’s net result last year declined to €1.72 billion from €2.05 billion in 2007. Despite a massive cash burn (a €3.3 billion net debt on September 31 that grew to €5.9 billion by December 31). Fiat Group and Fiat Auto were profitable (at trading and operating levels). Fiat Group forecasts a €1 billion trading profit this year. GM Europe General Motors Europe is facing a critical year. The owner of Opel, Vauxhall and Saab has been ordered by ailing parent GM to save about €942 million this year and said it would take “unconventional and aggressive steps” to do it. The successful introduction of the new Astra this year coupled with the reduction of its overall costs will be crucial to GM’s survival in Europe. PSA PSA/Peugeot-Citroen had a €343 million net loss in 2008. CEO Christian Streiff says more losses will come in 2009 before a return to profitability in 2010. Declining sales forced PSA to burn through €3.8 billion of cash last year, pushing its net debt to €2.9 billion, but PSA remains Europe’s leastindebted automaker. (See related story, Page 5) Toyota Motor Europe In its fiscal third quarter, Toyota Motor Europe posted a ¥43.4 billion (about €346 million) operating loss, swinging from a ¥34 billion profit in the same period the year before. To conserve cash, Toyota Europe has cut budgets for travel, sponsorship and advertising. The parent company said it has also frozen plans for a second plant in Russia. Daimler CEO Dieter Zetsche has called 2009 a “Darwinian year” for the auto industry. The allusion to natural selection comes in the context of a global economic downturn, which may kill off some weaker automakers and suppliers. While Daimler hopes the new, eighthgeneration E class will give it a lift, observers say it is likely to see sales and earnings drop significantly in 2009. Ford of Europe The successful launch of new models such as the Fiesta small car helped Ford of Europe report a 2008 pretax profit of $1.06 billion (about € 832 million), up from $997 million in 2007. But Ford of Europe is facing a slowdown in 2009. In response to the downturn Ford is cutting its European production by 214,000 in the first quarter to 325,000 units. Porsche Porsche expects its first-half operating profit to decline sharply in 20082009. For its 2008 fiscal year, which ended July 31, Porsche had posted a 115% operating margin. To counteract the slump in demand in global car markets, the company will cut costs in 2009 by far more than €100 million and will reduce production. Layoffs are not expected. Renault Renault CEO Carlos Ghosn sees the global economic situation getting worse this year, so much so that he hasn’t made any projections for 2009. A projected inflow of up to €4 billion in French government financing relieves some of the pressure on Renault. But another problems is that Japanese alliance partner Nissan is also in trouble. Volkswagen Europe’s largest automobile manufacturer is doing well despite the global car sales slump. Volkswagen group sold 6.23 million cars in 2008, an increase of 0.6% from 2007. Operating profit in the first 9 months of 2008 improved by 15 percent to €4.9 billion. VW CEO Martin Winterkorn believes that VW will become even stronger through the financial crisis. Michelotti helped define an era Luca Ciferri Automotive News Europe A pencil soloist who spread the allure of Italian design well ahead of today’s globalization, Giovanni Michelotti was one of the most prolific automotive stylists of the 20th century. During his 44-year professional career, more than 1,200 of Michelotti’s designs were turned into cars in which at least one unit was built, according to his son, Edgardo. The quantity, quality and international reach of his creativity are the reasons why Giovanni Michelotti has earned a spot in the European Automotive Hall of Fame. This week he will join three other Class of 2009 inductees in the Hall: sports car and tractor maker Ferruccio Lamborghini; DAF founder and transmission innovator Hub van Doorne; and the father of the Baby Benz, former Mercedes CEO Werner Breitschwerdt. Giorgetto Giugiaro, chairman of Italdesign Giugiaro, remembers meeting Michelotti as a young designer. “I looked to his work with the same admiration that I had for the Italian design greats of the time, such as Bertone, Pininfarina and Ghia,” Giugaro said. Hall of Fame induction event Date: Tuesday, March 3, 2009 Where: Hotel InterContinental, Geneva, Switzerland Dress Code: Business attire Tickets: €185 each; €1,750 table of 10 7:00pm: Cocktail Reception 7:45pm: Dinner and 2009 member inductions For more information go to: www.autohalloffame.org was the first of 192 Ferraris he penned. The most famous Michelotti designs include the 1962 Alpine A110, 1962 Triumph Spitfire and 1966 GT6; 1961 BMW 1500 and 1968 2800 CS coupe. Other customers included Abarth, Cisitalia, DAF, Fiat, Ford, Lancia and Maserati. Michelotti declined numerous offers to join coachbuilders and automakers in Italy and abroad, because he was content to remain in Turin and keep his independence as a freelancer. Born in Turin in 1921, Michelotti attended the best car-design school existing in the 1930s: Stabilimenti Farina. He died in 1980 after a short battle with cancer. He was 59. Carrozzeria ANE Michelotti closed in 1993. Theys joins ANE as new sales exec Filip Theys has joined Automotive News Europe as a sales manager. Theys, 37, has taken over responsibility for the UK, France, Scandinavia, northern Germany and the Benelux. He is based in Cologne, Germany. A Belgian national who speaks German, Dutch, English, French, Italian and Spanish, Theys most recently worked as vice president global brand management, marketing and Theys communications at consultancy MSX International. Theys holds a master’s degree in corporate communications, marketing and economics. He joins ANE as the publication is launching a strong push to grow its online operations. ANE’s recently redesigned Web site, autonewseurope.com, will, in coming months broaden and deepen its reporting of developments in the ANE European auto industry. Michelotti is considered the father of freelance car design. For Giugiaro, Michelotti – together with Alfredo Vignale – had a special talent for the one-off units, or the very limited runs of especially tailored models. “Michelotti was the prime example of an individual prevailing over an organization,” said Leonardo Fioravanti, owner of Fioravanti S.r.l. design and engineering consulting, and president of the Italian association of coachbuilders. Although Fioravanti considers many of Michelotti’s cars a bit overdecorated from a styling perspective, he admits that the Turin-born designer was a true forerunner when it comes to globalization. “Michelotti went to Hino of Japan to design the Contessa in the 1950s when almost no one here in Europe even knew what Hino was,” Fioravanti said. Fiercely independent Michelotti is considered the father of freelance car design. He essentially created the field when he opened his own studio, Carrozzeria Michelotti, in 1949. His first job as an independent contractor was to design the body for a variant of the Ferrari 166 Inter. This

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Automotive News Europe - March 2, 2009

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