European car makers seek 3-yr delay in EU's CO2 emissions cuts

TURIN (Thomson Financial) - The European association of vehicle manufacturers, ACEA, is seeking a three year delay in the introduction of cuts in carbon dioxide emissions proposed by the European Commission, said ACEA president Sergio Marchionne.

Speaking at a model launch by Fiat (nyse: FIA - news - people ), where he is CEO, Marchionne said ACEA is proposing to reach the EU's demand for a cut in car motor emissions to 130 grams of carbon dioxide per kilometre in 2015, rather than 2012 as proposed by the commission.

'The ACEA response to Brussels is that the auto industry is incapable of reaching the target by 2012 and needs until 2015,' he said at the news conference.

Reaching 130 gm/km in 2015 is 'do-able' he said, adding that the ACEA response is 'a blended view' of the auto manufacturers that make up the association's membership.

Fiat is in a stronger position to meet the targets because of it occupies the smaller car end of the market, and because its engines have 'less propensity to issue CO2', he said.

The weighted average CO2 emissions of Fiat cars are Europe's lowest he said, declining to give a figure.

In addition, Fiat's recent setting up of its specialist power train subsidiary for motors and gearboxes is supporting the development of engines that emit less CO2, he said.

On quality, Marchionne said Fiat is working 'plank by plank' on achieving significant improvements in this area, matching Japanese producers, and would like to have already achieved 2010 targets by 2008.

source : www.forbes.com

Chrysler to help bring China's Chery cars to American showrooms

Chery Automobile, a feisty newcomer to global carmaking, is on the verge of becoming the first Chinese company to crack the U.S. auto market.

On Tuesday, DaimlerChrysler said it finalized a deal with Chery and the Chinese government to export small cars made by Chery to United States and Western Europe. The deal, a broad framework for strategic cooperation, was signed Wednesday at a ceremony in Beijing. Chery cars will be sold under the Chrysler, Jeep or Dodge brand and are expected to go on sale in the next few years.

Essentially a state-owned enterprise with strong backing from local and central government, Chery was created in 1997 to help the economy of Wuhu, a city about 150 miles west of Shanghai. The company is viewed as a rebel in the Chinese auto industry. Chery constructed its first assembly line in secret, violating Chinese law. Its biggest competitive advantage is that it excels at manufacturing small, fuel-efficient vehicles at low cost.

Chery sold a little more than 300,000 cars last year - roughly the output of one large U.S. assembly plant. But like other Chinese automakers, Chery has long dreamed of a big presence in the United States, the world's largest and most lucrative car market.

At the same time, the Chinese government has aggressively supported the expansion of its automakers. Its goal is for Chinese cars to make up 10 percent of the world's auto trade in the next decade.

Chery's efforts to break into the United States have proven troublesome. Two years ago, it announced that it had teamed with Malcolm Bricklin, a veteran auto entrepreneur, to sell 250,000 cars here by this year. The deal fell apart.

Chery's move to break into the U.S. market follows the successful efforts of a number of Japanese and South Korean automakers over the past three decades. After years of exporting cars for sale in the United States, those pioneers built auto plants throughout the country. From that base, their U.S. sales expanded sharply.

Chery will still manufacture its cars in China, but by tying itself to a partner with thousands of outlets in the United States, it might be taking a shortcut.

"There are lessons to be learned here for Chery," said Michael Robinet, an industry analyst at CSM Worldwide. "Rather than go it alone, they have a partner with thousands of dealers that would allow them to sell small vehicles very quickly."

Robinet said the partnership with Chrysler will give Chery a deeper understanding of North American manufacturing, experience dealing with U.S. suppliers and a greater understanding of fuel-efficiency technology. Down the road, as it plots a strategy for growth, Chery could launch its own brands or even buy manufacturing assets from Chrysler.

But how will cars exported from China rate with finicky American car buyers?

There was a time when Japan was synonymous with junk, said Maryanne Keller, a longtime industry analyst. Though that's no longer the case, it took 30 years for Japanese companies to become established as quality brands, she said. Hyundai cars, arriving in the 1980s from South Korea, also had trouble gaining traction because of problems with quality.

"This is a very interesting time to talk about China," Keller said. "Poisonous fish. Tainted toothpaste. Tires that explode. Made in China' carries with it today a liability in the minds of consumers."

Keller, noting the tough emissions and safety standards in Western countries, said she doubted that Chinese automakers were "prepared for prime time." She said the only way the partnership will work is if Chrysler plants a large team of engineers in Wuhu and exerts quality control over every part that goes into the cars.

"I would say maybe," Keller said. "They are going to get the benefit of cheap labor. Whether they actually get a salable, desirable car remains to be seen. ... There's a lot of stupidity and naivete when it comes to what will engender success in the U.S. car market when it comes to China."

The Chery deal comes at a time when governments around the world are moving toward forcing tighter rules on vehicle fuel efficiency to fight climate change and confront energy woes. Automakers in the United States have struggled to come up with small-car strategies, arguing that the paper-thin profit margins on small cars make their production in the United States nearly impossible.

"None of us have figured out, including Toyota, how to build in the United States with the higher wage rates, high legacy costs and higher material costs," said Mike Aberlich, a Chrysler spokesman.

In contrast, manufacturing workers in China make about 57 cents a day, said Thea Lee, policy director of the AFL-CIO, which is affiliated with the United Auto Workers union. She said Chinese workers can't form unions because they don't have freedom of association.

"We think Chrysler should be ashamed to take advantage of workers who can't bargain collectively and stand up for their own rights at the workplace," she said.

Lee said she would rather see Chrysler work with American unions to influence the policies that make it hard to produce cars profitably in the United States than see it "abandon ship" by moving production to China.

source : news.cincypost.com

Car sales continue at record pace

It can cost about $100 to fill the petrol tank of the average family car, registration and insurance premiums continue to rise and there's fears of interest rate hikes on the horizon.

All up, the cost of running a car today is higher than ever.

But buyers appear unperturbed and continue to push Australia's new vehicle market towards record territory.

Sales of new cars and trucks for the first six months of 2007 are up 8.5 per cent, the market buoyed by the general strength of the Australian economy and falling prices for imported models thanks to the strong Aussie dollar.

Since 2001 the automotive sector has been riding a wave of success that shows little sign of slowing.

Sales have jumped about 30 per cent in that time from 772,681 vehicles to a projected and elusive 1,000,000 or more this year.

In fact, the local market passed the seven-figure milestone for the first time in a 12-month period to the end of June.

In its latest VFACTS sales bulletin this week the Federal Chamber of Automotive Industries (FCAI) said sales for the past financial year reached 1,004,097.

That figure included a record sales result in June and a record result for a single company, with Toyota selling 225,751 vehicles, more than any other company in the period.

But the industry is doing better across almost every sector and every brand, with only Ford and Hyundai of the leading companies suffering a sales decline to the end of June.

Light and sports car sales have enjoyed the biggest increases with demand up 12 and 15 per cent while sales of small cars rose 7.8 per cent and medium cars 7.5 per cent.

Even large cars did better in the first half of 2007 with sales up 5.1 per cent.

It was no surprise then when FCAI chief executive Andrew McKellar declared the success of the vehicle industry broadly based.

"Australians have now been buying new motor vehicles in record numbers for most of the last six years and that reflects the great value and choice which consumers now enjoy," Mr McKellar said.

"New models from local car makers continue to sell encouragingly well, underpinning overall domestic manufacturing volumes."

But while the volumes continue to increase, that doesn't mean the industry hasn't undergone some fundamental changes.

No longer do the traditional six-cylinder, Australian-made cars dominate.

To the end of June sales of imported cars, mostly smaller capacity models, exceeded 420,000 while demand for locally-made cars barely topped 100,000.

That shift has been dramatic, fuelled by high petrol prices and falling tariffs on imported models which dipped to just 10 per cent in 2005 and could go lower.

The continued strength of the Australian dollar has also played a big part, prompting a rise in the range of imported vehicles on offer.

In turn, import companies have benefited from a shift in fleet sales as more people driving company or leased cars are given the right to pick the ones they want rather than just being handed the keys to the usual base model Holden Commodore or Ford Falcon.

Then there's prices. That's been the really good news for consumers over the past 10 years.

Intense competition at the retail level has kept a tight lid on the up-front cost of buying a new car.

In many cases new models have come to the market with little or no price increase over the superseded version but with enhanced levels of safety and other features including extra airbags and stability control programs.

It's made a new vehicle purchase good value for money, not withstanding the losses associated with depreciation.

And it looks set to continue for some time.

The FCAI isn't worried about the upcoming federal election, which sometimes puts the brakes on new cars sales and doesn't appear concerned about the threat of interest rate increases.

Mr McKellar said the FCAI expected the second half of 2007 to be as strong as the first.

"Given the current strong level of vehicle affordability, continuing high employment, rising incomes and asset values, we believe that vehicle sales will continue at this accelerated pace through the remainder of 2007," he said.

source : www.theage.com.au

2008 Mercedes Benz C63: First Shots!

2008 Mercedes Benz C63: First Shots!

New AMG Benz gets more than 450 hp.
Mercedes has taken the wraps of the ultimate version of its all-new C-Class sedan - the C63 AMG with 457 hp and 443 pound-feet of torque.

Under the hood is the same 6.3-litre V-8 that's in AMG versions of the M-Class and CL. In the C-Class it gives a 0-60 mph time of 4.5 seconds and an electronically limited top speed of 155 mph.


Mated to the engine is AMG's Speedshift Plus 7G-TRONIC transmission. Steering wheel shift paddles and three driving modes - Sport, Comfort and Manual - are standard. The newcomer will be the first AMG car to feature an automatic throttle-blipping function during downshifts. Mercedes say this enhances the driver's emotional experience, but also gives almost completely jolt-free downshifting.


It's also the first AMG to feature a three-stage stability control system, which allows the driver to pre-set the vehicle's dynamic thresholds. Put simply, this means he can predetermine at which point during an extreme maneuver he or she wants the stability control to activate.


A sports suspension and 18-inch AMG alloys (or optional 19-inch rims) will offer an outstanding driving experience, according to the German firm.


This is the fifth generation of the AMG C-Class, the heritage of which dates back to the C36 AMG (1993). It was the very first vehicle developed as a joint venture between Daimler-Benz and AMG.


The new model will go on sale across Europe during next year.

source : www.thecarconnection.com

BMW, DaimlerChrysler in talks to cooperate on compact car - report

FRANKFURT (Thomson Financial) - Bayerische Motoren Werke AG and DaimlerChrysler AG's Mercedes division are in talks to cooperate on making a compact car based on BMW's Mini model, Auto Bild magazine reported, without saying where it got the information.

A decision is expected at the end of this month, it said.

A spokesman for DaimlerChrysler (nyse: DCX - news - people ) declined to comment on the matter, but added that the company does not rule out cooperation with peers.

DaimlerChrysler yesterday denied a report saying the company plans to expand its existing hybrid engine cooperation with BMW.

source : www.forbes.com