Automotive News Europe - January 5, 2009 - 3

January 5, 2009 www.autonewseurope.com · PAGE 3 Mercedes considers end to clone suit Chinese Smart look-alike to go on sale in Europe later this year Luca Ciferri Automotive News Europe TURIN A Chinese car that looks similar to Mercedes-Benz’s Smart ForTwo could be cleared for European sales as early as mid-January, people familiar with the matter told Automotive News Europe. Lawyers from Mercedes and Italian importer Martin Motors are close to settling legal actions that have blocked European sales of the Shuanghuan Bubble minicar for more than a year. Despite having four seats, the car’s exterior strongly resembles the two-seat Smart minicar. Shuanghuan Automobile sells the Bubble as the Noble in China but uses the Bubble name in Europe to avoid a legal dispute with British sports car maker Noble Automotive. The legal battle between Mercedes and Milan-based Martin Motors, which is Shuanghuan’s European distributor, began just before the opening of the IAA in Frankfurt in September 2007. At that time, Mercedes obtained a German court order banning sales of the Bubble in Germany. Mercedes claimed the car infringed its copyright for the Smart ForTwo. A month later, Martin Motors counter-sued Mercedes. It sought damages of more than ¤100 million as compensation for lost Bubble sales. Mercedes is now ready to allow the Bubble to go on sale in Europe because it fears it could lose the court case and be forced to pay damages, Italian legal sources told ANE. “We expect the entire matter to be resolved in an amicable way,” a lawyer familiar with the case said. Mercedes declined comment. German customs officials are still holding the first Bubble unit that was shipped to Germany from China to appear at the 2007 IAA. Customs officers confiscated the cars before they reached Frankfurt. Italian authorities are holding six Bubbles in a logistics center near Milan. The cars were imported for sale in Europe. In December 2007, Martin Motors tried to show the Bubble at the Bologna auto show, but Italian police seized the show car while it was being unloaded from a truck that was transporting it from Romania. Last month, a court in Milan rejected BMW’s claims that the Shuanghuan CEO, which also is distributed by Martin Motors, is a clone of the first-generation BMW X5 premium SUV. A legal source said that the Milan court ruling against BMW’s claims has pushed Mercedes’ lawyers to be more cautious. The Milan court ruling against BMW said “consumers could not get confused” when similar vehicles are offered “with a significant price difference.” Martin Motor is preparing to launch European sales of the BubANE ble after the summer. German and Italian authorities have confiscated Shuanghuan Bubbles. Suppliers fear long slowdown Arjen Bongard Automotive News Europe Suppliers expect at least two to three years of pain in western Europe, as the economic downturn cuts output by as much as 20 percent. According to a survey conducted by researchers SupplierBusiness and Roland Berger Strategy Consultants, suppliers’ main worry for 2009 is declining production volumes in North America. Concern over European production is a close second. The survey, which polled 152 suppliers in the final months of 2008, also shows that downward price pressure and exchange rate volatility are expected to play big roles in 2009. Many expect North American car production, at its lowest point, to be down as much as 30 percent from current levels. European production will not be hit as hard, but is still expected to be down 16 percent to 20 percent by most suppliers interviewed. While suppliers expect the sharp production downturn to last two to three years both in Europe and in North America, they are slightly Supplier worries Top supplier concerns for 2009 1. 2. 3. 4. 5. N. American production W. European production Downward price pressure Asian production Exchange rate pressures When it goes on sale in March, the Mercedes E class (shown during testing) will offer a lane-departure warning system. Edgy styling for new E class Mercedes-Benz will unveil its new E class next week ahead of the sedan’s March launch at the Geneva auto show. The next generation of the mediumpremium car will arrive during difficult economic times, when even wealthy consumers are buying fewer cars. Mercedes hopes an edgier styling along with more technology will attract buyers. The E class adds lane-departure warning and sign recognition as safety features. The car will go on sale in Europe in March. Global sales of the E class fell 23 percent to 163,300 in the first 11 months, compared with the same period in 2007. Western European sales dropped 29.9 percent to 82,200 units. Hurtej Kaur more optimistic that there will be a return to normality in Europe after that time. “The downturn is still expected to be extremely or very important in three years,” said Edmund Chew, managing editor of SupplierBusiness. “The industry is clearly expecting a prolonged period of weakness.” The most important policy issue for suppliers in 2009 will be overhead cost reduction, they said in the survey. They also expressed concern over their ability to keep financing r&d. Chew said this might affect suppliers’ ability to take a leading role in developing new green technologies. But he also said suppliers’ hesitancy may reflect a lack of clarity about what technologies will prevail in the ANE medium to long term. Photo: Brenda Priddy New positions at ANE New sales executive and reporter are based in Munich MUNICH Bettina Schmidt is a new sales manager at Automotive News Europe while Hurtej Kaur joins the newspaper as a staff reporter. Schmidt and Kaur are both based at ANE headquarters in Oberpfaffenhofen, just outside Munich. Schmidt, a German citizen born in Sindelfingen, near Stuttgart, has taken on responsibility for sales in southern Germany, Austria, central and eastern Europe and Turkey. She succeeds Stephan Saremba, who has left the company. Schmidt, 43, joined ANE in March 2005 as director marketing communications, a position she also held for ANE’s sister publication Automobilwoche. She was responsible for all marketing communications at both publications and also events management. Previously, Schmidt, who has a business degree from the Uni- PSA wants more parts from low-cost countries Lawrence J. Speer Automotive News Europe PARIS PSA/Peugeot-Citroen will boost its purchasing from low-cost countries during 2009 to cut costs. “We are moving toward another dimension in the process,” PSA Purchasing Director Jean-Christophe Quemard told Automotive News Europe. “Before we concentrated on local sourcing. Now we are doing global purchasing from low-cost countries,” Quemard said. Quemard took over PSA’s ¤30 billion purchasing department in January 2008 with a mandate from CEO Christian Streiff to increase the level of low-cost country sourcing. One year later, Quemard says the French carmaker is on track to source at least 40 percent of all car components in low-cost countries in 2010. “On the projects that are being approved and launched today, we are going to grow the importance of competitive sourcing and we are going to meet this objective,” he said. More for less How PSA has boosted sourcing from low-cost countries Tripled overseas purchasing officers to nearly 100 Expanded purchasing from 40-member office in Turkey Opened procurement offices in India and Mexico Quemard declined to detail PSA’s current low-cost sourcing ratio or the percentage of the carmaker’s ¤24 billion parts purchasing budget that is sourced from developing countries. In 2006, the last year such information was published, PSA spent about 13 percent of its total purchasing budget with suppliers based outside western Europe. The move toward PSA’s 40 percent goal has been partly delegated to purchasing agents outside France. Quemard has more than tripled the Schmidt Kaur versity of Mannheim, worked in various roles in the German publishing industry. Kaur, 27, joins ANE from England’s Nottingham Evening Post, where she was a senior reporter for the past five years. At ANE, she will cover premium carmakers BMW, Mercedes-Benz and Audi as well as distribution and regulatory issues. A British citizen, Kaur, has a bachelor’s degree in media studies from Sheffield Hallam University in ANE Sheffield, England. number of overseas purchasing officers to nearly 100 from 30 in 2007. A 40-member purchasing office in Turkey was responsible for more than ¤2 billion of global sourcing for PSA manufacturing operations in 2008 and the amount is rising. “There has been a major delegation of responsibility to Turkey, where global sourcing for major product families is carried out,” Quemard said. Purchasing teams in Brazil, China, and the Slovak Republic are also making major contributions, while new procurement offices have been established this year in both India and Mexico. Manufacturing operations outside western Europe are well above the 40 percent target. The new C3 Picasso has reached an 80 percent low-cost sourcing rate. The small minivan will launch early this year and will be built at PSA’s factory in Trnava, Slovakia. In China, the low-cost sourcing rate for cars that PSA makes with its joint venture partner Dongfeng Motors can be close to 90 percent. ANE

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