News : 12 September 2008

News digest

Compiled by Clive Goldthorp

1) Aston Martin

Aston will revive Lagonda luxury brand
Tony Lewin, Automotive News Europe 1st September, 2008

The last production Lagonda was the William Towns-styled saloon from 1976.

Aston Martin today said it will relaunch its Lagonda brand to help it expand into new markets. “The Lagonda brand would allow us to develop cars which can have a different character than a sports car,” said CEO Ulrich Bez in a statement. “Lagonda will have its own niche with luxurious and truly versatile products suitable for both existing and emerging markets.”

Lagonda models would be vehicles that could be used all year round in markets such as Russia where specialized sports cars such as Aston Martins could only be used for three or four months each year, spokeswoman Janette Green told Automotive News Europe. Currently, Aston Martin’s luxury sports cars are sold in 32 markets. The company aims to expand into more than 100 markets.

Lagonda would have a unique design language incorporating some elements from the past, but also very future-oriented, Green said. Green said Lagonda would not be building SUVs. In its heyday in the 1920s and 1930s, Lagonda was associated with sumptuous luxury cars. Aston Martin will unveil a concept for a Lagonda car at next year’s Geneva motor show. Lagonda models could go on sale by 2012.

The most recent Lagonda model, the V8 of 1976, was a sleek, dramatically styled four-door sedan that was a poorly timed launch amid the European oil crisis. It was a big success with wealthy Middle Eastern buyers. In 1993, Aston Martin, then owned by Ford, showed an elegant Lagonda concept styled by Vignale in Italy.

Lagonda could have even greater worldwide potential than Aston Martin and would represent incremental volume for the company. “We will clearly have to find a manufacturing solution, like we have done for the Rapide,” said Green. In March, Aston Martin announced that its new Rapide sedan will be assembled by Magna in Austria. Ford Motor sold Aston Martin to a consortium of investors, including Prodrive owner David Richards, in 2007.

2) Jaguar and Land Rover

Land Rover cuts to avoid “stockpiling” 29th August, 2008

Land Rover on Friday said it would cut night shift Range Rover production from the beginning of October and operate some lines at its Solihull, Birmingham assembly plant on a four-day week from the start of next month but, as at Toyota’s UK plant in Derbyshire, no workers are being laid off at present. Minor cuts may also be made at the separate Freelander plant near Liverpool.

“We won’t be turning anybody [workers] away,” a spokeswoman insisted today. She said there would be some “non-production days on Fridays” on the Discovery and Range Rover Sport trim and final lines at Solihull because the company wanted to avoid “stockpiling”. Workers would still come in and perform other non-production tasks instead.

Fridays already were a traditional half day on the Range Rover Sport and Discovery 3 line. Corporate affairs manager Mark Foster said that, from the beginning of September, workers would be required to attend on Fridays though “there won’t be any production”. He said Defender production was increasing and some of the workers transferring to that model “was a possibility if deemed necessary”.

He said the company was moving from a paper-based work process monitoring system to a computerised one for greater efficiency. “Obviously that will entail some training,” he said. There would also be health and safety and WIP (Work in Progress) training plus maintenance. “They won’t be idle.” As part of a wage settlement deal agreed last year, Land Rover has already transferred about 300 workers to sister firm Jaguar’s plant across the city at Castle Bromwich, where demand for the new XF sedan exceeds supply. Foster said it was possible a few more – probably no more than 100 – would go.

Foster said Land Rover “would take a little bit of volume out of” Freelander production, built with the Jaguar X-type at the former Ford Escort plant in Halewood on Merseyside. He noted as an aside, that the X-type [though now withdrawn from the US], had seen a boost this side of the Atlantic since a diesel automatic option had been added.

The company would “slow the Freelander line a little bit and, next month, there could be some non-production days” but only two or three and “only in September.” “Freelander has not been affected to the same extent,” he added. He said the premium sector had been hit harder than most in the recent downturn and was more labour-intensive.

“We’re fortunate, we sell into over 160 countries and, although some of our key markets are definitely being affected, we are seeing growth in Russia of 100% year to date, China 150% up, Brazil and Middle East, North Africa, Australia, they’re all making very significant progress. To put it into context, Russia will be our third biggest market this year.”

Local newspaper the Birmingham Mail reported earlier this month that Land Rover workers were told to work shortened weeks after returning from their summer break – but the company insisted then it was for two weeks only. Land Rover has insisted that its total sales for 2008 will still be the second highest in the company’s 60-year history after a strong first half. But its UK sales were off a massive 38.39 per cent to 1764 units last month and down 14.08% to 23,629 year to date, according to SMMT data.

Reports today suggested that the share price of new Jaguar Land Rover owner Tata was not doing too well, either, as clouds were gathering over its US$2.4bn acquisitions of Jaguar and Land Rover from Ford last June. Rising fuel prices have reduced the attraction of fuel-hogging Land Rover/Range Rover SUVs and global economic woes are also eroding the prospects for upmarket vehicles.

Tata investors are said to be voting with their feet, driving the Tata Motors share price down by more than 37% this year, compared with a 31% drop in the benchmark BSE Sensex 30 index.

CityRover to go electric in Norway
Birmingham Post 3rd September, 2008

The Indica is better known in the UK as the former CityRover, although an updated version of the old MG Rover hatchback was launched in India earlier this year and it is this car that will be used for the project. Tata said its intention was to have the electric vehicle running within a year with a view to bringing it to the local market at a later stage.

Speaking at an industry conference in India, Tata managing director Ravi Kant said: ‘This is one of the technologies that we are looking at, as you know that electric cars are almost zero emission.” Rival manufacturers including Nissan and Mitsubishi are preparing to roll out electric vehicles of their own in the coming years to try and counter soaring fuel prices and stricter emission rules. US giant General Motors meanwhile, is looking to beat Toyota to the punch with its all-electric Volt. GM expects to have a showroom-ready version of the car before the year is out.

Last week, Toyota said it would speed up the development of vehicles that run only on electricity with the aim of mass producing them in the early part of the next decade. Tata Motors’ electric car, which would be left-hand drive, has been developed in collaboration with a Norwegian firm, said Mr Kant. “Right now we want to test it out in Norway with the Norwegian party. A lot of infrastructure is required for electric vehicles and … in Norway, they are making arrangements for electric cars,” he added.

The company said it would bring the electric car to its native market year at “an appropriate time”. The car will have the capacity to run for around 110 miles when it is fully charged although the mileage will vary depending on the size of the battery and how it is driven, said the firm.

Meanwhile, violent clashes broke out in eastern India between supporters and opponents of Tata Motors after the firm suspended work of its new Nano factory because of a continuing land row. The high-profile project to build the world’s cheapest car became embroiled in controversy after the local opposition party in West Bengal state backed protests by some farmers against land seizures for the £175 million plant.

After weeks of protests and threats against workers, Tata Motors announced it was suspending work at the site and would be looking at alternative locations for the project. The decision has sparked anger among supporters of the project, many of them members of the state’s ruling communist party or farmers who had got compensation or jobs at the factory. Police said Nano supporters blocked traffic on a road leading to the factory in Singur, an hour’s drive from the capital Kolkata, and beat up activists of the opposition Trinamool Congress who had been protesting near the plant since last week.

Mamata Banerjee, chief of Trinamool Congress, had offered talks to resolve the dispute just before Tata announced its decision. There is anger too among those who see the Trinamool protests as counterproductive to the state’s efforts to industrialise. Hundreds of IT workers and engineers marched in Kolkata, covering their mouths with black cloth and holding placards that read ‘Yes to Tata, No to Mamata”.

The Nano project has been billed as key to the rejuvenation of industries in West Bengal, where the world’s longest-serving democratically elected communist government has changed tack after decades of focus on helping agriculture and poor farmers. But many farmers say they were forced off their land and offered paltry compensation to make way for the factory.

3) SAIC Motor/MG and Roewe

Supply firms delighted as production resumes at Longbridge
Birmingham Post 3rd September, 2008

The resumption of car production at Longbridge has provided a major boost to tooling companies like Makita. The Buckinghamshire business is supplying a series of its tools to the MG production line for work on the revamped TF roadster. Makita’s torque sensitive production tools are being used for some of the sports car’s critical fittings such as seat mountings, where the microprocessor controlled accuracy is vital to ensure build quality and safety.

In addition, Makita production tools are being evaluated for trim installation, under bonnet component fixing and chassis joints. Calibration manager Jeff Ali is one of those assessing the new tooling applications. ‘Seat mountings simply have to be spot on every time, tightened to the exact torque setting and that’s where the accuracy of the Makita BFL400FZ helps us. Fitting a black Torex fixing into a black runner on top of black carpet effectively under a seat is not an easy job but has to be 100 per cent right. Unless the tool hits the required torque setting the operator knows he must do it again to receive the ‘job-complete’ indicator.”

‘The LED ‘job complete’ indicator is a real bonus in that dark application,” he added. He said the accuracy of the new tools was proving vital in helping to improve the quality levels of the new car. The MG production line is also using 9.6 volt angle screwdrivers which can deliver pre-set torque for trim installations and 12volt pistol grip screwdrivers for under bonnet mountings. The tools also have anti-tamper adjustment controls, which prevents the line operators from accidentally altering the torque settings. Any adjustment can only be carried out by the tool room specialists.

The highly accurate tools also have an in-built microprocessor that constantly monitors the tool operation making certain that the set torque is reached every time, monitoring battery power to produce enough torque to complete the joint correctly. If there is insufficient power left in the battery cell to do the job the tool is switched off to avoid joints being tightened inadequately. ‘The accuracy of Makita production tools will ensure that the build quality puts the MG at the top of the reliability tables for customer value and enjoyment,” said a spokesman for the company.

4) China Watch

Costs Drive down Earnings at SAIC
Shanghai Daily 30th August, 2008

SAIC Motor Corp, China’s biggest auto maker, said first-half profit fell 28 percent on higher raw material costs and lower-than-expected demand. Net income rose to 2 billion yuan (US$292 million), or 0.305 yuan a share, from 2.7 billion yuan, or 0.415 yuan a year earlier, the Shanghai-based auto maker said in a statement to the city’s stock exchange yesterday. Sales rose to 58 billion yuan from 51 billion yuan.

Higher prices for steel and other materials outweighed gains from SAIC’s vehicle sales. Profit growth at Chinese auto makers slowed to 30 percent in the first half from 66 per cent a year earlier, as costs rose and car makers slashed prices to win market share, according to the China Association of Automobile Manufacturers.

“Rising inflation and fuel prices are undermining overall car demand, and SAIC will face bigger challenges in the second half,” Lu Lei, an analyst at Great Wall Securities Co in Beijing, told Bloomberg News. “Still, its venture with Volkswagen has turned the corner, and sales are picking up.” SAIC Motor’s overall vehicle sales climbed 18 percent in the first half to more than 990,000, the company said. China’s industry-wide vehicle sales rose 19 percent in the first half to 5.18 million, according to the association.

China sales growth at General Motors, which builds vehicles in the country through ventures, including SAIC, rose 13 percent in the first half as a lack of new models stymied demand. Volkswagen’s sales gained 23 percent. The German auto maker has ventures with SAIC and China FAW Group Corp, the country’s No. 2 car maker.

SAIC’s sales of Roewe sedans rose 8 per cent in the first six months to 8,244. The car maker also plans to resume full output of MG cars at a plant in England by the end of the year.

China’s year-on-year August car sales down
Automotive News Europe 8th September, 2008

China’s passenger car sales fell in August from a year earlier, the first monthly decline in more than two years as a slowing economy and the Beijing Olympics kept would-be car buyers from showrooms. The world’s second-largest auto market sold 451,300 cars last month, down 6.24 percent from year ago, the China Association of Automobile Manufacturers, the country’s official industry association, said on Monday.

A few more monthly declines may be in store this year as high fuel prices and a falling stock market dent consumer demand, Rao Da, secretary-general of the China Passenger Car Association, a leading industry group, said in a research report. Rao also predicted an end to China’s era of 20 percent-plus annual growth in passenger cars sales, with 2008 growth falling sharply to 6 to 8 percent, followed by more moderate growth rates of 10 to 15 percent from 2009 to 2015.

China raised gasoline and diesel prices in late June by nearly 20 percent, the first rise in seven months and the steepest one-off hike ever. That increase and expectations of more in the near future have delayed car purchases, according to a recent online survey by J.D. Power and Internet portal A slump in the stock market, where the benchmark Shanghai Composite Index has plunged 65 percent from last October’s record peak, has also weakened consumers’ buying power.

But Rao noted that the slowdown had simply brought the car market’s growth rate into line with the overall economy. “In the global auto industry, 10 to 15 percent annual sales growth is still very fast,” he said. In the first eight months of the year, 4.55 million sedans, sport utility vehicles and multipurpose vehicles were sold in China, up 13 percent from a year earlier, the country’s official auto association said in its monthly report.

Joint ventures of Volkswagen and General Motors are the top three car sellers in the country.

5) India Watch

Protests halt work on Nano car plant in east India
Automotive News Europe 29th August, 2008

Work at a plant in eastern India that will make the Nano, billed as the world’s cheapest car, stopped on Friday after thousands of employees failed to turn up for work following protests by farmers, officials said. Tata Motors, which is setting up the plant to launch the 100,000-rupees ($2300) car, has faced violent protests and political opposition over the acquisition of farmland in Singur, an hour’s drive from the state capital Kolkata. More than 3600 employees were escorted by the police out of the Singur factory on Thursday after political activists and farmers threatened to assault them if they returned, officials said.

“Our workers are not working today,” a spokesperson for Tata Motors said. “We are assessing the situation as of now.” Last week, Tata Motors Chairman Ratan Tata said he was prepared to move the plant from Singur if violence continued, despite having invested $350 million in the project. Workers were being intimidated on their way to the factory, some officials said.

Trouble began after the government took over 1000 acres of farmland for the factory. The government offered compensation but some farmers refused it, demanding that at least 400 acres of land be given back to them. The protests reflect a larger standoff between industry in India and farmers unwilling to part with land in a country where two-thirds of the billion-plus population depend on agriculture.

Mamata Banerjee, leader of the opposition Trinamool Congress, which is spearheading the protests, has threatened to carry out road blockades on Friday to protest against the factory. West Bengal Chief Minister Buddhadeb Bhattacharjee said he was ready for talks with farmers but could not return 400 acres of land, earmarked for ancillary units, as it would make the project unviable. Tata Motors has since been flooded with offers from other states for the Nano plant.

Shares in the company were trading 3.91 percent up at 434 rupees in the Mumbai market.

Keith Adams

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