Automotive News Europe - January 5, 2009 - 10

PAGE 10 · www.autonewseurope.com January 5, 2009 Opinion Fasten your seat belts! 10 predictions for 2009 Saab and Volvo on the brink Saab and Volvo have been poorly served by their American owners. At its peak in 1987, two years before General Motors took control, Saab sold nearly 50,000 cars in the US. Last year it sold 32,711. And Volvo, in terms of profit-to-revenue ratio, was the most profitable auto manufacturer in the world 20 years ago. Now, like Saab, it’s losing money and its owner, Ford Motor, is trying to sell it. Saab and Volvo have given more to their owners than they’ve gotten in return. Volvo’s well-engineered platform architectures have been put to good use by Ford. Both companies have been a source of fresh talent. Saab delivered Bo AndersRichard Johnson son to GM. Andersson is a product of Sweden’s armed forces, and his militarylike cost-cutting regimen as head of global purchasing is one reason GM has held on for so long. GM’s troubles with Saab might be traced back to the January 1990 press conference at which the American company was introduced as Saab’s 50 percent shareholder. David Herman, an American GM executive installed as CEO, was stumped when a Swedish journalist asked him what the Saab brand stood for. GM, which later took 100 percent control, never did figure that out. Maybe the Swedes wouldn’t have known what to do with the quirky brand either, but they had done pretty well until then. Volvo is better off than Saab — maybe because it had 10 more years of independence. Ford bought Volvo in 1999. Volvo seemed to have a decent start as the pride of Jac Nasser’s short-lived luxury division, the Premier Automotive Group. But the brand has lost its way. Who would buy Volvo and Saab today? Maybe Renault and Nissan CEO Carlos Ghosn? Renault all but merged with Volvo 15 years ago, but Volvo’s board of directors didn’t go through with the plan. Truth be told, I’d like to see Saab and Volvo once again become smart, independent Swedish companies, finding their way in a world of giants as they had done for so long. After two decades of consolidation and brandhoarding in the auto industry, there is still scant evidence that size matters all that much. E-mail Richard Johnson, founding editor of Automotive News Europe, at rjohnson@crain.com. From the Publisher September seems a very long time ago It was a gorgeous autumn Sunday ter unless we change the way we think. in New York City last September Fiat CEO Sergio Marchionne told us when the world stood still. in December that consolidation is inWalking through Times Square evitable. But it goes beyond that. I noticed workers at Lehman carIn the coming year some fundamenrying their belongings in cardtal changes have to be considered. board boxes out the front door. The Financial Times was clear-headed when it delivered its own call for A day later, the failure of the fiJason Stein EU fiscal prudence last year. Here are nancial giant sent tremors around a few more ingredients. the world. We haven’t stopped Environmental technology has to shaking since. continue to be at the forefront of Credit, the lifeline of the auto industry, everyone’s plans, even if the price per evaporated. Consumer confidence plunged. liter continues to tumble. Sales tanked. Dealers closed. Nothing was Excess capacity must be trimmed. Cheap certain anymore – for anyone. credit created an environment that was We are at a defining point in the industry unrealistic. Some automakers (Ford) took this newspaper has spent 13 years covering. the necessary steps to keep production in Where we end up by the end of this year may line with true demand and that must be be a world away from where we start 2009. sustained. But one thing is clear: Things won’t get betEU politicians should immediately help companies cope with the credit squeeze, freeing up lines of credit. Without credit, many dealers and partsmakers will die. Mergers must be an option. Protecting jobs to keep national industries alive will only distort car-sector consolidation. Business as usual is hardly usual anymore. These days, uncertainty casts a shadow everytime we believe something is certain. Bankruptcies are expected. Anything is possible. Don’t believe it? There is talk of renewed interest from Gulf investors in European automakers. Indian companies are broadening their European footprint. The Chinese are on the doorstep. Upside down is right side up. And I remember that sunny day in September. It seems long ago. E-mail Jason Stein at jstein@craincom.de. Automotive News Europe www.autonewseurope.com Jason Stein: Publisher and Editorial Director Tel: (49) 8153 907522 e-mail: jstein@craincom.de Arjen Bongard: Editor-in-Chief Tel: (49) 8153 907501 e-mail: abongard@craincom.de Keith E. Crain: Publishing Director Peter Brown: Group Publisher EDITORIAL GERMANY: Argelsrieder Feld 13 82234 Oberpfaffenhofen Tel: (49) 8153 907509 / Fax: (49) 8153 907510 e-mail: aneletters@crain.com Paul McVeigh, Managing Editor Tel: (49) 8153 907503 e-mail: pmcveigh@craincom.de Douglas A. Bolduc, News Editor Tel: (49) 8153 907504 e-mail: dbolduc@craincom.de Mark Appleton, Copy Editor Tel: (49) 8153 907502 e-mail: mappleton@craincom.de Georgia Chapman, Production Editor Tel: (49) 8153 907511 e-mail: gchapman@craincom.de Tom Freiwah, Layout Tel: (49) 8153 907512 e-mail: tfreiwah@craincom.de Anita Fograscher, Editorial Assistant Tel: (49) 8153 907509 e-mail: afograscher@craincom.de ONLINE Mark Stevens, Online Editor Tel: (49) 8153 907524 e-mail: mstevens@craincom.de REPORTERS GERMANY: Bettina Mayer, Industry Reporter Tel: (49) 8153 907526; e-mail: bmayer@craincom.de John Revill, Staff Reporter Tel: (49) 8153 907527; e-mail: jrevill@craincom.de “ There are few reliable forecasts for 2009. The depth of the economic downturn is difficult to gauge. But even in today’s uncertain environment, executives must make assumptions so they can plan ahead. Here’s what Automotive News Europe expects will happen in 2009. 1. Slow sales. Sales will fall across Europe. Western Europe will see sales drop to 12 million from 13.6 million in 2008. But individual brands will post gains. Some, like Volkswagen and Audi, because of new products. Others such as Skoda, Dacia and Chevrolet, because they offer the lowcost cars that today’s market demands. 2. Quiet factories. As a result of the sales slowdown, capacity use will drop in many of Europe’s car plants. There will be more temporary production 5. Changes at the top. None of Europe’s shutdowns, in partictop carmaker bosses is likely to be deThere will be ular during the sumposed. However, the expected consolionly two mer. dation will mean that some will go or American car 3. Hit by the BRICs. change their roles. (Who is on the hot Brazil, Russia, India seat? See Page 14) companies left and China, the so6. Suppliers suffer. When car companies by the end called BRIC councut production, partsmakers suffer. tries, will post But the industry’s reliance on suppliof 2009. growth, but not ers will, if anything, increase. There enough to offset the will be some bankruptcies and some declines in Europe and North America. further consolidation in the supplier 4. Consolidation. Sergio Marchionne predicts sector in 2009. But many will survive. that in two years there will only be five or 7. Detroit downturn. There will be only two six big volume carmakers. Expect the first American car companies left by the end of mergers of major auto companies to take 2009. Ford has the best odds to remain inplace in the course of the year. dependent. “ 8. Porsche wins battle, VW wins war. Sports car maker Porsche will assume full control of Europe’s largest car group. But a prediction by Credit Suisse analyst Arndt Ellinghorst, will start to come true: VW – and VW executives – will dominate in the new merged entity. 9. Premium guys take a hit. There will be a major downward shift in the mix of models offered by Mercedes, BMW and Audi. Private consumers and fleet buyers will look for smaller, more fuel-efficient and cheaper models. 10. The shows must go on. Look for less extravagance at the big auto shows this year. Carmakers will scale back their presence in Geneva and Frankfurt. But the shows will continue to be the premier product forums for the industry. Hurtej Kaur, Staff Reporter Tel: (49) 8153 907525; e-mail: hkaur@craincom.de ITALY: Viale Cavaglià 8, 10029 Villastellone (TO) Luca Ciferri, Chief Correspondent Tel: (39) 01196-91970 Fax: (39) 01196-10113 e-mail: lciferri@craincom.de FRANCE: 28, rue des petites ecuries 75010 Paris Lawrence J. Speer, Staff Reporter Tel: (33) 147-709420 Fax: (33) 147-709421 e-mail: lspeer@craincom.de NETHERLANDS: Pimpernel 3, 8131 GH Wijhe Wim Oude Weernink, Reporter Tel/Fax: (31) 570-521093 e-mail: woweernink@craincom.de UNITED KINGDOM: Tony Lewin, Reporter Tel: (44) 1342 822479 Fax: (44) 1342 825462 e-mail: tony@tonylewin.com CZECH REPUBLIC: Lyle Frink, Correspondent Tel: (420) 606-486729 e-mail: lfrink@craincom.de IRELAND: Olive Keogh, Correspondent Tel: (353) 1-833-5473 Fax: (353) 1-8330467 e-mail: okeogh@iol.ie JAPAN: 1-7-1 Yura Kucho, Chiyoda-ku, Tokyo 100 Hans Greimel, Asia Editor, Automotive News Tel: (81) 423-60-8767 Fax: (81) 423-60-8768 e-mail: hgreimel@crain.com CHINA: Yang Jian, Managing Editor, Automotive News China Tel: (86) 10-8453-0390 e-mail: yangjian@autonewschina.com

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Automotive News Europe - January 5, 2009

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