Lexus to lose top spot in U.S. luxury car market

2011 Lexus RX 450h

CHICAGO, July 8, 2011 - Toyota Motor Corp's brand Lexus will end its streak of 11 years as the top luxury brand in the U.S. market due to lost sales in the aftermath of the Japan earthquake and tsunami, said Mark Templin, Lexus Division general manager.


Templin said Lexus U.S. sales will fall about 17 percent to around 190,000 vehicles in 2011.

The United States is the biggest market for Lexus.

All Lexus models, except the RX 350 crossover sport utility vehicle, are made in Japan.

Templin said the Cambridge, Ontario plant that makes the RX 350 will be back at full capacity in September.

Most Japanese plants assembling Lexus models have already returned to full strength.

However, the RX 450h hybrid SUV will not be at full production until October. The hybrid is typically 15 percent to 20 percent of RX sales in the U.S. market.

Lexus U.S. sales fell 38 percent in June as dealers ran out of key products. At the end of the month, dealers had about half their normal stock.

"June was the bottom of the trough, and we've turned the corner. We see the rest of the year being much better for us," Templin said, speaking to reporters at a Lexus media event in Chicago.

Lexus sales tumbled 18 percent in the first half of 2011 to 88,010, and German rivals BMW and Daimler AG's (DAIGn.DE) Mercedes-Benz sprinted by.

BMW's sales rose 13 percent to 113,705, and Mercedes-Benz climbed 7 percent to 110,926. If 2011 full year results end as expected, it would be the first time that BMW has outsold Lexus in the U.S. since 1997.

Templin shrugged off the significance of losing the luxury sales crown, and when asked if Lexus could reclaim the top spot in 2012, he said.

"Whether we're No. 1 or not, I don't care. We've never focused on that. We won't change our plan midyear because someone else is selling more cars than us."

BUICK SYNDROME?

Industry analyst Aaron Bragman of IHS Automotive Insight said on Friday the slump at Lexus goes deeper than a shortage of vehicles. He suggested that Lexus could suffer from the same stigma as did General Motors Co's Buick brand for the past several decades: old people's car.

Bragman said it would be "quite a challenge" for Lexus to reclaim No. 1 in luxury sales in 2012 even with full production because its lineup is not as alluring as it once was and it relies heavily on two models, the RX 350 and ES 350 sedan, a spinoff of the Toyota Camry.

The RX so far this year accounts for 45 percent of Lexus U.S. sales and the ES sedan 19 percent.

"Like Toyota, they've lost their momentum. They have an aging buyer base, and a lot of their dealers are afraid they will become the next Buick. Their new products haven't resonated with younger buyers."

The median buyer age for Lexus is in the mid-50s, and Templin said he is comfortable with that because it is a result of high loyalty.

Sportier models such as the IS sedan and CT hybrid sedan are attracting younger owners, said Templin.

[Source : RUETERS]

Read More

Chrysler prepares to build small car that may increase Fiat stake

DETROIT : June 24, 2011 - Chrysler Group LLC said it plans to begin test production in the second half of this year of the small car that will trigger U.S. government requirements to increase Fiat SpA (F)’s ownership stake.


Tooling for the small Dodge brand car goes into Chrysler’s Belvidere, Illinois, assembly plant in August, Fred Goedtel, head of Chrysler’s assembly operations, said in an interview this week in Sterling Heights, Michigan.

“We’ll start pilots in the fall” and official production begins “sometime” in the first quarter, he said.

Design work on the car, which is the vehicle Chrysler expects will trigger the final government ownership milestone, is done, Ralph Gilles, head of Chrysler design, said in an interview in Chelsea, Michigan, yesterday. “The company is really focused on it,” he said of the vehicle.

Turin, Italy-based Fiat is consolidating control over Chrysler. Fiat is buying the U.S. Treasury Department’s final stake in the U.S. automaker, acquired as part of Chrysler’s 2009 bankruptcy reorganization. That purchase will raise Fiat’s stake to 52 percent on a fully diluted basis. Chrysler must test and commit to building a vehicle in the U.S. that achieves 40 mpg to gain another 5 percent stake.

Its deal with the U.S. and Canada allowed Fiat to gain as much as 35 percent in Chrysler without paying cash in exchange for giving management experience and technology to Chrysler and achieving various performance milestones. The 40 mpg vehicle is the final such milestone.

Fiat also exercised an option to purchase 16 percent of the Auburn Hills, Michigan-based company after Chrysler repaid the U.S. and Canadian government loans in May.
Sergio Marchionne, chief executive officer of both automakers, has said he expects Fiat will get its final 5 percent tied to the 40 mpg car by year’s end. The small Dodge car is being based on Fiat’s Alfa Romeo Giulietta technology, Marchionne has said.

Gilles said the new Dodge model’s name was decided earlier this week. He declined to provide the name.

[Source : BLOOMBERG]

Read More

Mazda to jointly establish vehicle production facility in Mexico and Sales company in Brazil with Sumitomo

2011 Mazda 3 Facelifted with SkyActiv Engine

HIROSHIMA, Japan : June 17, 2011 — Mazda Motor Corporation today announced that it has signed formal agreements and begun preparations to establish a Mazda vehicle production facility in Mexico and a sales company in Brazil, in alliance with Sumitomo Corporation. Through the new joint ventures, Mazda and Sumitomo intend to combine their individual strengths in order to enhance both companies' business in the rapidly growing Central and South American markets.


The Mexico production facility will be established as a compact vehicle manufacturing hub mainly for Central and South America, and will include both vehicle and engine assembly plants. It will be constructed in Salamanca city, Guanajuato state, 250 kilometers northwest of Mexico City. Mazda and Sumitomo plan to commence operations in the fiscal year 2013 (April 2013 to March 2014) with an annual production capacity of 140,000 units. The facility will produce Mazda2 (Mazda Demio in Japan) and Mazda3 (Mazda Axela in Japan) models.

The Brazilian sales company will begin operations in the fiscal year 2012 (April 2012 to March 2013), before the production plant in Mexico is completed, and will initially sell vehicles imported from Japan. When the Mexico facility becomes operational, it will also sell vehicles shipped from Mexico.

Between 2005 and 2010, new car demand in Brazil doubled to approximately 3.5 million units. Currently, Brazil is the world's fourth largest automobile market following China, the United States and Japan.

Takashi Yamanouchi, Mazda's Representative Director, Chairman of the Board, President and CEO, said, "Since Mazda entered the Mexican market in October 2005, our sales results have steadily improved, and in 2010 we set a new record for both sales volume and market share. Building on this success, and by leveraging Sumitomo Corporation's extensive experience and knowledge of emerging markets, we will continue to strengthen our business in Mexico and throughout Central and South America, including the rapidly growing Brazilian market. These initiatives are part of Mazda's plans to achieve its mid- to long-term goals for emerging markets."

In accordance with the agreements, Sumitomo and Mazda plan to establish the local joint venture companies as follows:

Production company outline

• Company name : Mazda Motor Manufacturing de Mexico S.A. de C.V.
• Head office : Salamanca city, Guanajuato state, Mexico
• Investment : 500 million dollars
• Investment ratio : 70% Mazda, 30% Sumitomo
• Business outline : Manufacture and sale of Mazda vehicles and parts
• No. of employees (at full capacity) : approx. 3,000

Sales company outline

• Company name : Mazda Motor do Brasil Limitada
• Head office : Sao Paulo, Brazil
• Investment ratio : 70% Mazda, 30% Sumitomo
• Business outline : Import and sale of Mazda vehicles and parts

[Source : MAZDA]

Read More

Nissan and Mitsubishi Motors sign contract for establishment of joint venture for minicar business

YOKOHAMA/TOKYO : May 20, 2011 - Nissan Motor Co., Ltd. and Mitsubishi Motors Corporation today announced that the two companies signed a contract for the establishment of a joint venture related to their minicar business in the Japanese market. The establishment of the joint venture was part of an agreement signed in December 2010 to expand the scope of cooperation between the two companies. The two companies will strengthen their competitiveness in the minicar business through this joint venture.


[Outline of New Joint Venture]

• Date contract agreement : May 19, 2011
• Date of establishment : June 1, 2011 (Planned date)
• Capital : 10 million yen

Capital structure:

• Nissan Motor Co., Ltd. : 50%
• Mitsubishi Motors Corporation : 50%
• Business description : Product planning and engineering of minicars for the Japanese market

Main board members:

• CEO (Chief Executive Officer): Junichi Endo
• COO (Chief Operating Officer): Shinichi Kurihara

[Source : NISSAN, MITSUBISHI]

Read More