Topic: General Industry / Supplier Tidbits

[sirAQUAMAN64]

GM improves supplier ties; Ford falls
Toyota and Honda top annual survey

Robert Sherefkin
Automotive News
June 4, 2007 - 1:00 am   

DETROIT -- Ford Motor Co. has replaced General Motors as the North American automaker with the worst vendor relations, according to a respected annual supplier survey being released today, June 4.

Toyota Motor Corp. and Honda Motor Co. retained their spots at the top of the heap, while Nissan Motor Co. and the Chrysler group declined. The survey, by Planning Perspectives Inc., ranks North America's six largest automakers based on suppliers' responses to questions about their relationships. The study is important for automakers because good supplier relations can cut costs, boost efficiency and increase access to supplier innovations.

Planning Perspectives' results were similar to those of the Automotive News 2007 OEM Supplier Innovation Study by J.D. Power and Associates announced last month. The studies concluded that GM's supplier relations had improved significantly.

"Suppliers are telling us that (GM purchasing chief) Bo Andersson's program for improved relations with suppliers is definitely working," says John Henke, president of Planning Perspectives, of suburban Detroit.

Toyota and Honda still rank well ahead of the Detroit 3. Toyota remains No. 1 for the fourth straight year, with its supplier ratings virtually unchanged. Suppliers who rank Honda as the best customer increased by almost 30 percent from last year.

Nissan's and Chrysler's rankings declined slightly this year, but both remained above GM and Ford. Chrysler's ranking fell for the first time in five years.

Said Chrysler spokesman Kevin Frazier: "We hesitate to use this survey to direct our strategy as it relates to our relationships with our suppliers because they are unique relationships."
 


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How they ranked
Here’s how a survey of 308 Tier 1 suppliers ranked relations with North America’s 6 largest automakers, based on a 500-point index.
  2007 2006 CHANGE
Toyota 415 407 8
Honda 380 368 12
Nissan 289 300 -11
Chrysler 199 218 -19
GM 174 131 43
Ford 162 174 -12
Source: Planning Perspectives Inc. 


 

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The study surveyed 308 Tier 1 suppliers from March 15 to April 15. It included 35 of North America's 50 largest suppliers, according to Automotive News statistics.

GM and Ford launched efforts to improve supplier relations in late 2005.

Andersson, GM's purchasing chief, told hundreds of supplier leaders at an industry event that year to contact him if they thought GM shortchanged them on price or volume, or left important issues unsettled.

He said last week: "I challenged them (suppliers) that 'if you have open issues with GM, I will give you three days to come back with data.' "

At Ford, relations with large suppliers are worse today than they were two years ago when purchasing chief Tony Brown launched his Aligned Business Framework initiative, according to the study. The survey said 48 percent of Ford's largest suppliers prefer not doing business with the automaker, compared with 34 percent in last year's study.

Henke says Brown should scrap the program because of supplier cynicism. Brown declined comment. Ford spokeswoman Becky Sanch says the company has not yet seen Henke's study and cannot comment. She added: "Ford does value relations with suppliers and strives to work with the supply base to achieve common goals."

[sirAQUAMAN64]

Magna eyes more vehicle assembly
Hogan: N. America has potential

Robert Sherefkin
Automotive News
June 4, 2007 - 1:00 am   

Despite word that Magna International Inc. would lose production of the BMW X3 SUV in Europe, Magna President Mark Hogan wants to pursue a vehicle assembly site in North America.

"Do we see potential for a North American assembly plant for (subsidiary) Magna Steyr? Absolutely," Hogan told Automotive News last week. "Will it come in the next 12 months? Perhaps."

Magna, which last month lost out on an ambitious bid for a minority stake in the Chrysler group, is betting that more automakers are willing to hand off vehicle assembly work.

Magna needs to replace the X3 when the last unit rolls off the line at Magna Steyr's Graz, Austria, plant in late 2009. The plant had record production of 248,000 units last year, 110,000 from the X3 alone. BMW was Magna's third-largest customer in 2006.

Contract production kaput?

But contract vehicle manufacturing is a tough proposition in North America.

Manufacturing expert Ron Harbour questions whether niche manufacturing plants are necessary in an era of growing factory productivity. Harbour, president of Harbour Consulting in suburban Detroit, said last week that assembly plants now are so flexible that they can accommodate low-volume production.

"You don't have to outsource those low-volume cars anymore," he said.

But Hogan contended that the reason BMW is planning to move X3 production from Graz to Spartanburg, S.C., is the same reason there could be opportunities in North America for contract vehicle assembly. The weak U.S. dollar makes it cheaper for European companies to make cars here rather than import them.

"I think that the equation that drove BMW to think about not exporting from Europe is going to drive others to do the same thing," Hogan said. He declined to identify potential North American partners.

Magna Steyr, which runs the Jeep paint shop in Toledo, Ohio, has no preference where to build vehicles in North America, Hogan said.
 




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President Mark Hogan says Magna International
Could still do vehicle assembly in North America
Is looking for new vehicle assembly work for its plant in Graz, Austria
Won't sell its troubled interiors business
Is poised for major expansion in Russia with a major new investor

 

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Russian expansion

Magna also is eyeing major expansions of its parts business in Russia. Russian Machines, controlled by Russian businessman Oleg Deripaska, plans to buy a 17 percent stake in Magna. Deripaska's automotive business is represented by the GAZ Group.

Hogan declined to forecast Magna's planned content in future Russian vehicles.

But BMO Capital Markets Research reports that Magna could achieve about the same average content per vehicle in Russia as in North America. That suggests $1,000 of content on 2 million vehicles for $2 billion of annual revenue.The BMO report says Magna thinks production revenues could commence as early as 2009 or 2010.

Separately, Hogan denied reports that Magna plans to unload its money-losing interiors business. "Our plan for the future is to get them back in the black," he said.

Hogan said Magna's interiors business has suffered because of automaker demands that suppliers shoulder huge upfront engineering and development costs and because Magna cannot recover escalating raw material costs from customers.

In March, KeyBanc auto analyst Brett Hoselton said the company was open to divesting its interiors business if it cannot be improved quickly and if long-term profitability cannot be assured.

Hogan says Magna is "still working hard to get our interiors business here in North America back on its feet."

[sirAQUAMAN64]

Quality cuts profit
No joke: Better cars mean less warranty revenue for dealerships

Donna Harris
Automotive News
June 11, 2007 - 1:00 am   
 
For auto dealers, it's like a good-news, bad-news joke.

The good news is that the quality of new cars and trucks is better than ever. The bad news is that quality improvements are causing dealership income from warranty repairs to plummet. Dealers are scrambling to cover the loss.

Dealerships' revenue from warranty labor and parts sales dropped more than 10 percent last year, according to the National Automobile Dealers Association. That's the largest annual decline in at least a decade. NADA does not have figures for 2007.

In previous years, extended factory warranties and price increases for parts and labor helped mask the impact of better-built vehicles. But dealers say vehicle quality is eroding their warranty business.

Bill Keith, who owns Ford, Chrysler-Dodge-Jeep and Acura dealerships in New Jersey, says he and his colleagues "have to change the whole culture. We can't rely on people having to come back to us for service."

To make up for lost warranty revenue, Keith says he has started selling tires. He is promoting customer-paid work by posting price comparisons with local independent repair shops, and his dealerships are sending more service reminders to customers.

On the plus side, rising quality improves vehicles' residual values and creates an effective sales pitch to new-car buyers.
 
So far, the import dealerships seem to be the chief beneficiaries. For example, Toyota dealers are emphasizing customer-paid service and parts as warranty repairs decline on a per-vehicle basis, says Sona Iliffe-Moon, a spokeswoman for Toyota Motor Sales U.S.A. Inc.

But since Toyota sales continue to rise, Toyota dealerships' overall warranty repair revenues are fairly stable.

Detroit 3 brands hurt most

By contrast, the drop in warranty service revenue is steepest at dealerships that sell Detroit 3 brands. General Motors' volume of warranty repairs is down 40 percent since 1998, says Tom Henderson, a spokesman for GM's Service and Parts Operations.

GM has lengthened powertrain coverage on new and certified-used vehicles, Henderson says. The powertrain warranty on new 2007-model GM vehicles is five years or 100,000 miles; the previous warranty was good for three years or 36,000 miles.

Such extensions could help curtail the decline in dealerships' warranty work, Henderson says.

Bob Baker Auto Group reports a 30 percent drop in the number of warranty repairs at its Ford dealership in San Diego over the past four years. The company's import dealerships have shown smaller declines.

"Car sales have dropped by double-digit" percentages, says Dave Pugh, service manager of Bob Baker Ford. "Our warranty numbers are going to drop in direct relationship to the reduction in car sales."

Taking all comers

Pugh says his service department was built and staffed to handle more business. To keep technicians busy, the shop now repairs cars and trucks of all brands. Previously it fixed only Ford, Lincoln and Mercury vehicles.

Dealer Keith says the number of warranty repairs at his three domestic-brand dealerships has plunged 20 to 30 percent annually for the past three years. Warranty labor and parts sales once accounted for 65 percent of service business at his two Ford dealerships, he estimates. Now it's about 30 percent, he says.

"The quality of cars is incredible nowadays," Keith says. "Over the long term, it's fantastic for the auto industry and for the domestic auto industry particularly. But over the short term, a lot of dealers are losing business."

[Scaerio]

How many experts did it take to come up with that?  Isn't it a fairly well-known fact that the dealers make their highest profits on after-sales parts and service?

[MKII]

Quality cuts profit
No joke: Better cars mean less warranty revenue for dealerships

Donna Harris
Automotive News
June 11, 2007 - 1:00 am   
 
For auto dealers, it's like a good-news, bad-news joke.

The good news is that the quality of new cars and trucks is better than ever. The bad news is that quality improvements are causing dealership income from warranty repairs to plummet. Dealers are scrambling to cover the loss.

Dealerships' revenue from warranty labor and parts sales dropped more than 10 percent last year, according to the National Automobile Dealers Association. That's the largest annual decline in at least a decade. NADA does not have figures for 2007.

In previous years, extended factory warranties and price increases for parts and labor helped mask the impact of better-built vehicles. But dealers say vehicle quality is eroding their warranty business.

Bill Keith, who owns Ford, Chrysler-Dodge-Jeep and Acura dealerships in New Jersey, says he and his colleagues "have to change the whole culture. We can't rely on people having to come back to us for service."

To make up for lost warranty revenue, Keith says he has started selling tires. He is promoting customer-paid work by posting price comparisons with local independent repair shops, and his dealerships are sending more service reminders to customers.

On the plus side, rising quality improves vehicles' residual values and creates an effective sales pitch to new-car buyers.
 
So far, the import dealerships seem to be the chief beneficiaries. For example, Toyota dealers are emphasizing customer-paid service and parts as warranty repairs decline on a per-vehicle basis, says Sona Iliffe-Moon, a spokeswoman for Toyota Motor Sales U.S.A. Inc.

But since Toyota sales continue to rise, Toyota dealerships' overall warranty repair revenues are fairly stable.

Detroit 3 brands hurt most

By contrast, the drop in warranty service revenue is steepest at dealerships that sell Detroit 3 brands. General Motors' volume of warranty repairs is down 40 percent since 1998, says Tom Henderson, a spokesman for GM's Service and Parts Operations.

GM has lengthened powertrain coverage on new and certified-used vehicles, Henderson says. The powertrain warranty on new 2007-model GM vehicles is five years or 100,000 miles; the previous warranty was good for three years or 36,000 miles.

Such extensions could help curtail the decline in dealerships' warranty work, Henderson says.

Bob Baker Auto Group reports a 30 percent drop in the number of warranty repairs at its Ford dealership in San Diego over the past four years. The company's import dealerships have shown smaller declines.

"Car sales have dropped by double-digit" percentages, says Dave Pugh, service manager of Bob Baker Ford. "Our warranty numbers are going to drop in direct relationship to the reduction in car sales."

Taking all comers

Pugh says his service department was built and staffed to handle more business. To keep technicians busy, the shop now repairs cars and trucks of all brands. Previously it fixed only Ford, Lincoln and Mercury vehicles.

Dealer Keith says the number of warranty repairs at his three domestic-brand dealerships has plunged 20 to 30 percent annually for the past three years. Warranty labor and parts sales once accounted for 65 percent of service business at his two Ford dealerships, he estimates. Now it's about 30 percent, he says.

"The quality of cars is incredible nowadays," Keith says. "Over the long term, it's fantastic for the auto industry and for the domestic auto industry particularly. But over the short term, a lot of dealers are losing business."

Dealerships are missing out on a very lucrative side of the business, Accessories!!!

Consumers spend an average of (US$) $1,000 - and often up to as $3,500 - per vehicle annually on accessories after the sale. Consumer spending on truck and auto accessories accounts for more than $15 billion a year in retail sales. But dealers capture a mere 16% of that.

Advice - Build partnerships with restyling professionals who, in all regions of the country, have the facilities, equipment, inventory, expertise and marketing savvy to create appealing, high-profit accessory packages.
Accessories are worth the trouble.

[claudster]

Interesting insights. When I was a Tool maker for Magna, Ford was rated as the worst and most difficult client to deal with. The other domestics were not too far behind. Toyota/Honda were exceedingly stringent on their requirements, but were always fair.

On the warrenty front, some very interesting comments. First dealers complain that warrenty work nets them half of what non warrenty work nets. This would explain many posters complaining about getting stonewalled by the dealer trying to get warrenty work done. Now dealers are complaining that they don't get enough warrenty work. I rememeber hearing some stats that 70% of GM customers abandon the dealers when the warrenty expires. Dealers should be looking at these stats and wonder why this is so before they whine and complain about losing warrenty work.

[Snowman]

Quality cuts profit
No joke: Better cars mean less warranty revenue for dealerships

Donna Harris
Automotive News
June 11, 2007 - 1:00 am   
 
For auto dealers, it's like a good-news, bad-news joke.

The good news is that the quality of new cars and trucks is better than ever. The bad news is that quality improvements are causing dealership income from warranty repairs to plummet. Dealers are scrambling to cover the loss.

Dealerships' revenue from warranty labor and parts sales dropped more than 10 percent last year, according to the National Automobile Dealers Association. That's the largest annual decline in at least a decade. NADA does not have figures for 2007.

In previous years, extended factory warranties and price increases for parts and labor helped mask the impact of better-built vehicles. But dealers say vehicle quality is eroding their warranty business.

Bill Keith, who owns Ford, Chrysler-Dodge-Jeep and Acura dealerships in New Jersey, says he and his colleagues "have to change the whole culture. We can't rely on people having to come back to us for service."

To make up for lost warranty revenue, Keith says he has started selling tires. He is promoting customer-paid work by posting price comparisons with local independent repair shops, and his dealerships are sending more service reminders to customers.

On the plus side, rising quality improves vehicles' residual values and creates an effective sales pitch to new-car buyers.
 
So far, the import dealerships seem to be the chief beneficiaries. For example, Toyota dealers are emphasizing customer-paid service and parts as warranty repairs decline on a per-vehicle basis, says Sona Iliffe-Moon, a spokeswoman for Toyota Motor Sales U.S.A. Inc.

But since Toyota sales continue to rise, Toyota dealerships' overall warranty repair revenues are fairly stable.

Detroit 3 brands hurt most

By contrast, the drop in warranty service revenue is steepest at dealerships that sell Detroit 3 brands. General Motors' volume of warranty repairs is down 40 percent since 1998, says Tom Henderson, a spokesman for GM's Service and Parts Operations.

GM has lengthened powertrain coverage on new and certified-used vehicles, Henderson says. The powertrain warranty on new 2007-model GM vehicles is five years or 100,000 miles; the previous warranty was good for three years or 36,000 miles.

Such extensions could help curtail the decline in dealerships' warranty work, Henderson says.

Bob Baker Auto Group reports a 30 percent drop in the number of warranty repairs at its Ford dealership in San Diego over the past four years. The company's import dealerships have shown smaller declines.

"Car sales have dropped by double-digit" percentages, says Dave Pugh, service manager of Bob Baker Ford. "Our warranty numbers are going to drop in direct relationship to the reduction in car sales."

Taking all comers

Pugh says his service department was built and staffed to handle more business. To keep technicians busy, the shop now repairs cars and trucks of all brands. Previously it fixed only Ford, Lincoln and Mercury vehicles.

Dealer Keith says the number of warranty repairs at his three domestic-brand dealerships has plunged 20 to 30 percent annually for the past three years. Warranty labor and parts sales once accounted for 65 percent of service business at his two Ford dealerships, he estimates. Now it's about 30 percent, he says.

"The quality of cars is incredible nowadays," Keith says. "Over the long term, it's fantastic for the auto industry and for the domestic auto industry particularly. But over the short term, a lot of dealers are losing business."

Dealerships are missing out on a very lucrative side of the business, Accessories!!!

Consumers spend an average of (US$) $1,000 - and often up to as $3,500 - per vehicle annually on accessories after the sale. Consumer spending on truck and auto accessories accounts for more than $15 billion a year in retail sales. But dealers capture a mere 16% of that.

Advice - Build partnerships with restyling professionals who, in all regions of the country, have the facilities, equipment, inventory, expertise and marketing savvy to create appealing, high-profit accessory packages.
Accessories are worth the trouble.

Exactly, some proactive dealers have started this already. My Subaru dealer for my WRX wagon is an authorized dealer for COBB and installed all my aftermarket goodness………..and will honour my warranty.

[articsteve]

Toyota and Scion has been very successful with TRD products. 

[sirAQUAMAN64]

Bosch makes new fuel injector for diesels

April Wortham
Automotive News
June 18, 2007 - 1:00 am   

 
 
BOXBERG, Germany -- Robert Bosch GmbH says it has developed a solenoid valve injector for diesel engines that offers the same performance as its piezo injector but at a lower cost.

The solenoid injector, designed to handle pressures of more than 29,000 pounds per square inch, will launch this year, said Rolf Leonhard, Bosch executive vice president of engineering for diesel systems.

"This pump is designed for the very highest hydraulic efficiency. It supports combustion processes with extremely high injection pressures at medium engine speeds and loads," Leonhard said last week at a press briefing here.

Bosch and Siemens VDO Automotive were the first suppliers of piezo injectors in the United States.

Bosch introduced the technology in the diesel versions of the 2007 Jeep Grand Cherokee and Mercedes-Benz E320. Siemens VDO's injectors appeared in 2006 in the BMW 335i, and in January in the 2008 Ford Super Duty pickup.

Early on, Piezo injectors were touted as a way for automakers to meet tightening emissions standards in the United States and Europe.

The higher pressures let diesel fuel injectors use multiple jets and multiple injections per cycle to reduce in-cylinder emissions, boost performance and reduce noise.

But Bosch's new solenoid injector can handle the same pressure as its piezo injector, Leonhard said.

"These solenoid valve systems, as far as performance goes, will be very close to the performance of piezo systems, and they have a cost advantage," he said.

"So, in the long run, both technologies will be on the market."

Christopher Qualters, Bosch's director of sales and marketing for diesel systems in North America, said he was unsure of the price difference between the two systems but said it was significant.

The piezo injector gets its name from a piezo crystal, which is expensive to produce. Premium manufacturers likely would still use piezo injectors, but solenoid injectors should be attractive to midrange customers.

Bosch has about a 25 percent market share for car and light-truck diesel fuel injection systems.

Leonhard said that share will rise initially as tougher U.S. emissions standards go in effect and that piezo technology still has the highest potential for improving engine performance and can be used in a wider range of vehicles.

He said the new solenoid injector will allow diesel passenger cars to comply with stricter European emissions standards that go into effect in 2014 without treating the nitrous oxide exhaust.

Leonhard added that NOx treatment still will be needed for heavier vehicles in Europe and for all vehicles in the United States where the emissions standards are even stricter.

[sirAQUAMAN64]

Magna's Wolf: Deal with Russian could lead to big raw material cost savings
Supplier may build vehicles for European makers in the United States

Reuters |
June 19, 2007 - 10:40 am   

FRANKFURT (Reuters) -- Canadian car parts maker Magna International could reduce its purchasing costs for raw materials by 10 percent over the next two to three years, German magazine Auto Motor und Sport reported.

In an interview to be published in its upcoming edition on Wednesday, Co-Chief Executive Siegfried Wolf said the recent $1.54 investment from Russian billionaire Oleg Deripaska could lead to dramatic savings.

Wolf added that the group may also seek contracts to build vehicles in the United States for European carmakers like Volkswagen's luxury unit Audi or Fiat's Alfa Romeo that do not have their own local manufacturing plant.

"If companies decide to go to the USA, we would be willing to support them and perhaps to also get two competing brands under one roof," Wolf said.

The Magna executive also said that he expected to build a production site in eastern Europe within the next two years to manufacture low-priced cars that could be built for one or more carmakers.

[sirAQUAMAN64]

Study: Auto industry will attract more private equity
27% of North American suppliers face bankruptcy in two years
Brent Snavely

Automotive News
June 20, 2007 - 11:51 am   
 
DETROIT -- The unhealthy state of the North American auto industry will continue to attract attention from private equity firms, according to an industry study released today.

Because North American auto suppliers are struggling, they are cheaper to purchase, in relation to their earning potential, than companies in other industries, according to the study by AlixPartners LLC and the Original Equipment Suppliers Association.

"It just stands to reason that the auto industry's below-average multiples, coupled with its significant cash flows, will make it a magnet for private equity for as long as money for deals remains as free-flowing as it is today," John Hoffecker, a managing director of AlixPartners, said in a press release.

The AlixPartners study evaluated the financial performance of 51 automakers, 25 heavy-vehicle producers and 297 auto suppliers worldwide.

The study also found that North American suppliers are being outperformed consistently by European and Asian competitors, and 27 percent of North American suppliers face the danger of bankruptcy or liquidation within 24 months.

Factors contributing to the poor performance include labor costs and reliance on light-truck and SUV sales.

According to Hoffecker, a 5 percent drop in light-truck and SUV sales would have to be accompanied by a 3 percent to 4 percent increase in total sales for the Detroit 3 to maintain current profit levels.

"With the domestics currently having more than 60 percent of their mix in light trucks, they're going to have to run incredibly fast just to stay in the same place," he said in a statement.

Both AlixPartners and the Original Equipment Suppliers Association are in suburban Detroit.

[sirAQUAMAN64]

Detroit 3 business triggers Denso expansion
Lindsay Chappell
Automotive News
June 21, 2007 - 11:24 am   

Sparked by increasing sales to the Detroit 3, Denso International America Inc. plans to more than double its investment in Canada to produce vehicle air conditioners and radiators.

Denso, an affiliate of Toyota Motor Corp., will invest $24.5 million in its plant in Guelph, Ontario, to keep pace with sales growth.

In a statement released Wednesday, Hikaru Sugi, managing officer for Denso's Thermal Systems Business Group, said that as a result of the expansion the unit's annual sales will grow to $240 million in fiscal 2010, up from $128 million in fiscal 2006.

Denso will add production of condensers and electric fans to the plant to begin assembling engine cooling modules. The company declined to identify the vehicle programs that will be supplied by the expansion.

In addition to supplying the Chrysler group and Ford Motor Co., the operation also supplies Toyota in Canada. Toyota is itself stepping up its investment in Ontario with a new $800 million assembly plant in Woodstock that will build 200,000 RAV4s a year. That plant will come on line later this year.

But a Denso spokeswoman said the Guelph expansion was triggered by growing sales to other customers.

The 290-employee plant will employ 590 people by the end of 2010, and nearly triple its size to 326,000 square feet. 

[safristi]

"Denso" in Guelph....how did they get wind of Tpl's arrival.......

[tpl]

I noticed the plant just the other day.   It provides those well paid manufacturing jobs that the NDP is so keen on.  Good for them. Plenty of land around them to grow into as well.

[safristi]

Hey "ignorance" of POSTS  is "BLISS".........  must be tha MAGIC "PITH" helmut...

[airbalancer]

I have a friend who owns a plastic company in Windsor, a supplier to GM & Ford
He is now looking at doing a JV in South America building parts for GM and Renault in the Andean Region
I did not think Renault was a big player in SA

[sirAQUAMAN64]

Japanese suppliers score big gains in '06
David Barkholz
Automotive News
June 25, 2007 - 1:00 am

Japanese parts suppliers made big global sales gains last year, propelled by two engines of growth: Toyota and Asia.

The three parts makers that generated the greatest revenue growth last year were all Japanese. Each is a Toyota supplier, and each owes a lot of its growth to the automaker's worldwide success.

Toyota Boshoku Corp., a manufacturer of interiors, powertrain parts and exterior components, rose two spots to 17th on Automotive News' annual ranking of the top 100 global suppliers of original equipment. Last year its global sales totaled $9.04 billion, up 21.8 percent from 2005.

Sumitomo Electric Industries Ltd., ranked 18th, had the second-largest total sales gain on the global 100 list. Aisin Seiki Co. Ltd., ranked sixth, had the third-largest gain.

Most of the high-growth suppliers benefited from the rapidly expanding Asian markets. Toyota Boshoku generated 74 percent of its sales in Asia, while Aisin recorded 73 percent of its sales there.

Overall, the top 100 suppliers posted $533 billion in combined original-equipment sales, up 5 percent from 2005. Among the 10 largest suppliers, nine generated at least small gains in sales.

Asian suppliers accounted for 28.0 percent of the top 100 suppliers' combined revenue total last year, up from 26.5 percent in 2005.

North American suppliers lost global market share. They accounted for 35.6 percent of cumulative global revenue, down from 37.8 percent the previous year.

Only one North American supplier, Canada's Magna International Inc., appeared among the 10 fastest-growing suppliers. Magna ranked seventh in sales growth with a gain of $1.08 billion gain or 4.8 percent, posting total original-equipment revenue of $23.88 billion.

And in another oddity for a top supplier, Magna generated almost none of its sales in Asia.

Toyota's partners

Last year, Toyota ended General Motors' 76-year reign as the world's largest automaker. Toyota sold 8.8 million vehicles worldwide, while GM sold 8.7 million.

Toyota's suppliers have grown with it around the world. A prime example is Yazaki Corp., ranked 14th in global sales. Yazaki makes wire harnesses and electrical distribution systems for half of Toyota's vehicles worldwide, while Sumitomo builds the other half, says George Perry, CEO of Yazaki North America Inc. in suburban Detroit. Yazaki also makes instrumentation.

Yazaki's global sales jumped 7.1 percent last year, to $10.58 billion. Toyota accounts for 20 percent of Yazaki's sales, Perry says.

Electronics parts makers also are seeing growth as the demand for more electronic components, such as information and entertainment products, permeates the industry. But some of the major players in that segment are experiencing upheaval.

Delphi Corp., ranked No. 2, has yet to emerge from Chapter 11 reorganization. And it is trying to focus more tightly on its electronics business by unloading its brake, steering component and interiors operations.

Delphi already has several deals pending to sell businesses such as its $2.6 billion-a-year steering unit, so it will shrink considerably next year. Delphi hopes to emerge from reorganization as an electronics supplier with most of its factories overseas.

Hot property?

Meanwhile, Siemens VDO Automotive Corp., ranked 11th in overall sales, is a potential acquisition target. The company plans an initial public offering in September that will separate the $12.01 billion unit from its German electronics parent, Siemens AG.

But Continental AG executives, like other potential investors, have trumpeted their interest in buying Siemens VDO before it can go public. A merger would create a behemoth among suppliers. Combined the companies would generate about $23 billion in global automotive sales and rank No. 5 on the list, just behind Magna.

Nearly every Siemens product has an electrical or electromechanical component. That's what has fueled its North American growth, says Dave Royce, Siemens VDO director of group strategy and technology for the Americas. Siemens makes products such as airbag controls, occupant sensors, tire pressure gauges and fuel and emission control products.

This year the company sold its only nonelectrical operation - plastic air-induction systems - because it did not fit with its electronics emphasis.

As Delphi and Siemens VDO sort out their future, electronics supplier Robert Bosch GmbH maintained its iron grip on the top spot. Last year, Bosch's worldwide automotive revenue totaled $29.69 billion, up 4.5 percent.

[sirAQUAMAN64]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070625/UPDATE/706250391/1148/AUTO01
Most Asian car makers post gains in May

Associated Press

TOKYO -- Honda reported a double-digit increase in global automotive production in May, and Toyota, Nissan and Mitsubishi Motors also posted output gains. But Mazda's worldwide output fell 2.1 percent.

Honda Motor Co., Japan's second-largest car maker, said global production climbed 10.9 percent to 329,507 vehicles in May, the 22nd straight monthly gain.

Its output in Japan rose 11.8 percent to 105,188 vehicles while overseas production rose 10.4 percent to 224,319 units on higher production in North America, Europe and the rest of Asia.

Toyota Motor Corp., zeroing in on General Motors Corp.'s spot as the world's largest automaker, said its global production surged 9.8 percent to 702,382 vehicles in May from the previous year on robust demand for its Camry, Lexus and hybrid cars, such as the Prius.

Toyota's domestic production totaled 322,841 units, up 7.9 percent, while overseas output climbed 11.5 percent to 379,541 vehicles.

Nissan Motor Co. said its worldwide production rose 6.9 percent to 262,572 vehicles, with an increase in overseas output offsetting a decline in the smaller domestic market. Domestic production by Nissan, which is 44 percent owned by Renault SA of France, fell 12.3 percent to 71,489 vehicles, but its overseas output surged 16.4 percent to 191,083 units.

At Mitsubishi Motors Corp., global production totaled 108,426 vehicles, up 6.5 percent. Domestic production increased 14.1 percent to 57,532 units, for an eighth straight month of growth on year. Its overseas production fell 0.9 percent to 50,894 vehicles, with production in Europe dropping 33.5 percent while output in North America rose 1.5 percent.

Mazda Motor Corp., an affiliate of Ford Motor Co., said global production fell 2.1 percent to 92,416 vehicles. Domestic production rose 8.0 percent to 73,175 units due to healthy output of the Mazda3 and Mazda5 models.

But Mazda's overseas production fell 27.9 percent to 19,241 vehicles because of lower production of models such as the Mazda6, the Hiroshima-based company said.

[sirAQUAMAN64]

Import fleet sales on the rise
Donna Harris
Automotive News
July 23, 2007 - 12:01 am   
 
Fleet sales by major import automakers have risen substantially this year, as General Motors and Ford Motor Co. reduce their fleet business.

Toyota, Nissan, Mazda and Kia have generated significant sales of cars and trucks to corporate customers, although their sales do not match those of the Detroit 3 automakers.

Through May, fleet customers account for roughly 11 percent of the import brands' total U.S. sales, according to an estimate by the Automotive News Data Center. That's up from less than 8 percent a year earlier.

By contrast, fleet customers account for about 31 percent of the Detroit 3's total sales, down slightly from 32 percent a year earlier. The Detroit 3 still dominate U.S. fleet sales. But as Ford and General Motors cut back, some import brands are stepping up.

That strategy "speaks to the pressure (imports) are under to meet sales targets in a competitive market," says Jeremy Anwyl, CEO of automotive consumer Web site www.Edmunds.com.

The fleet sales data are estimates derived from a comparison of overall sales for the period to retail registration data obtained from R.L. Polk & Co. of suburban Detroit. Fleet sales are defined as transactions in which the buyer purchases 10 or more vehicles at a time.

Sales to corporate fleets such as Wal-Mart or the post office can be profitable. But vehicles sold to daily rental fleets such as Hertz or Avis are sometimes discounted heavily - especially if an automaker is trying to unload vehicles that it can't sell to retail customers.

'They need cars'

Kia is selling more vehicles to daily rental fleets, says Ian Beavis, marketing vice president of Kia Motors America Inc. Overall fleet sales accounted for nearly one-fourth of Kia's U.S. sales in the first five months of 2007, up from less than one-fifth a year earlier.
 
 
Kia's Ian Beavis: "The daily rental fleet business has been good and they need cars. The rental companies are approaching us."
 
 
A service loaner program Kia launched last year with Enterprise Rent-A-Car has boosted fleet sales, Beavis says.

But he adds that Kia is not offering huge discounts. "The daily rental fleet business has been good and they need cars," he says. "The rental companies are approaching us."

Kia's fleet sales will represent 17 percent of its total U.S. sales this year, Beavis predicts.

Several other import brands say they filled unusually large fleet orders early this year. For example, fleet sales accounted for 24 percent of Mazda's total sales through May, according to the Automotive News Data Center. That's up from 18 percent a year ago.

Mazda spokesman Jeremy Barnes predicts fleet sales will level off. "Fleets were a little over 12 percent of our volume for our last fiscal year," Barnes says. "We expect to come in that way for this year."

Toyota takes off

Among Japanese automakers, Honda has taken a just-say-no attitude. Honda does not sell directly to fleet customers, company spokesman Chris Martin says, but some of its dealers have fleet customers.

Toyota and Nissan have been more willing to cultivate fleet customers. According to Automotive News Data Center estimates, Toyota division's fleet sales were about 11 percent of the brand's total U.S. sales, up from 7 percent a year earlier.

Last week, Toyota spokesman Xavier Dominicis confirmed that Toyota's fleet sales have increased. But he says those sales remain less than 10 percent of total sales.

Rising fleet sales are in line with Toyota's overall sales growth, Dominicis says. But he insists that fleet business "is not and has never been a way for Toyota to meet sales targets."

Nissan division's estimated fleet sales rose from 9 percent in the first five months of last year to 15 percent in the same period of this year.

According to Nissan, the introduction of Nissan's redesigned Altima sedan last fall triggered large fleet orders early this year. The company has said fleet sales will decline over the next six months or so.

Last week, company spokeswoman Jeannine Ginivan said fleet sales will stabilize at 10 percent of Nissan's total volume. "We are not looking to increase fleet sales to supplement retail sales," Ginivan said.

Damage control

Ford Motor sales analyst George Pipas says he believes import automakers are increasing their daily rental fleet business because the U.S. economy has softened.

The import-brand automakers contacted by Automotive News say they don't intend to prop up overall sales by relying on the fleets. But Anwyl of Edmunds.com remains skeptical. Heavy sales to rental fleets can harm a brand's image and depress the resale value of its vehicles, he warns.

"That damage takes years," Anwyl says. "Whether this will be a long-term trend for the imports that damages those brands remains to be seen."

[sirAQUAMAN64]

Talk about a WHACK of cash!

Continental buys Siemens VDO for $15.66 billion
Dale Jewett
Automotive News
July 25, 2007 - 8:50 am
UPDATED: 7/25/2007 1:00 P.M.
 
In the largest acquisition in the history of auto suppliers, Siemens AG said today it will sell its Siemens VDO Automotive parts unit to German rival Continental AG for $15.66 billion, or 11.4 billion euros.

The decision ends long-discussed plans for a stock sale of the VDO unit.

Continental said it will pay cash for Siemens VDO, raised by taking on new debt. Continental's offer is higher than Siemens VDO's revenue of $13.4 billion in 2006. Both companies expect the deal to close by year end, pending approvals by regulators.

By choosing Continental, the Siemens supervisory board spurned a reported competing offer from TRW Automotive Inc. and its largest shareholder, the Blackstone Group, a private equity firm. TRW and Blackstone today both declined to comment on the deal.

Big win for Wennemer

The deal is a big win for Continental Chairman Manfred Wennemer, who wants to expand the auto parts and tire maker into a big auto supplier to rival Germany's Robert Bosch GmbH. Last year, Continental bought Motorola Inc.'s automotive electronics business.

"This looks like an excellent opportunity for Continental," said Neil De Koker, president of the Original Equipment Suppliers Association in suburban Detroit. "They've been expanding into the electronic and control side of the business rapidly."

Bosch is the world's biggest auto supplier. Continental specializes in chassis controls, brakes, tires and stability control. Siemens VDO's focus is on powertrain controllers, engine and chassis electronics and navigation systems.

As soon as Siemens announced plans in January for the stock sale, Wennemer and his top executives said Continental wanted to buy the unit. But late last month, Wennemer told the Automotive News Europe Congress that Siemens still favored a stock sale for VDO.

At that time, Wennemer said Continental would keep the VDO name if its bid was accepted.

"By joining forces, pooling our innovative prowess and allying our leading positions worldwide in key market segments like safety, chassis, powertrain systems and telematics … we are extremely well placed to take on the global competition," Wennemer said today in a statement.

Will be fifth biggest

A combined Continental/Siemens VDO would rank No. 5 on the Automotive News list of top 100 global original equipment suppliers, with combined original equipment sales of $23.48 billion in 2006. Separately, Siemens VDO ranks No. 11 and Continental ranks No. 12.

The combined units would leapfrog over Johnson Controls Inc., Aisin Seiki Co. Ltd., Lear Corp., Faurecia, Valeo SA and TRW on the list. It would rank just behind Denso Corp. and Magna International Inc.

Siemens VDO and Continental have North American divisions based in suburban Detroit. Continental employs more than 800 workers in Michigan. Siemens employs about 830 workers in southeast Michigan.