Lamborghini predicts return to growth after H2 revenues fall 2.6%

Lamborghini, the Italian luxury sports car brand, remained cautious about 2010 when it posted a 2.6 percent fall in first-half revenues despite continued growth in Asia.

Lamborghini, a unit of Volkswagen's Audi brand, was severely hit by the recession last year, when sales fell 41 percent.

"2010 is a transition year for Lamborghini," CEO Stephan Winkelmann said in a statement on Tuesday, adding that market recovery and brand repositioning would help it return to growth.

The maker of supercars said revenues fell to 152.9 million euros ($199.9 million) in the first half when it sold 674 cars, down 18 percent.

Lamborghini cars range in price from 180,000 euros to 400,000 euros.

Car sales more than tripled in China, its second-biggest market after the United States, to 86 in the period. Lamborghini has said it expects to sell more than 100 cars in China in 2010.

First-half sales in Australia, Singapore, Hong Kong and Taiwan more than doubled.

The carmaker said it was heavily investing in the carbon fiber technology, which boosts power efficiency and helps reduce weight and car emissions.

Lamborghini competes head-on with Ferrari, owned by Italian carmaker Fiat.

Fiat approved to buy Bertone coachbuilding business

Fiat S.p.A.'s bid for Carrozzeria Bertone S.p.A. was approved by Italian Industry Minister Claudio Scajola Thursday.

Fiat will invest 150 million euros ($215.9 million) over three years in the struggling contract manufacturer that has produced models ranging from the Lamborghini Miura to the Volkswagen Polo during its 96 years in business.

The other bidders for the coachbuilder included Italian entrepreneurs Gianmario Rossignolo and Domenico Reviglio.

Fiat CEO Sergio Marchionne says that the automaker is interested in Bertone's Turin plant for niche vehicle production.

Fiat declined to say which niche model or models it would make at Bertone's Turin factory. The only detail the company gave was that the vehicles would be sold in Europe and North America.

Fiat has a controlling stake in Chrysler Group and plans to relaunch the Fiat brand in the United States in early 2011. The U.S. relaunch of Fiat-owned subsidiary Alfa Romeo is planned for the end of 2011.

The Italian press has speculated that starting in the second half of 2011 Fiat could use the Bertone plant make everything from convertibles to large sedans.

Rossignolo planned to use the plant to produce up to 10,000 units a year of a luxury sedan and SUV.

Finally got it

The Bertone family lost control of the coachbuilding business when bankruptcy administrators took control in February 2008. The Bertone design business, which remains in the hands of the Bertone family, was not affected by the collapse of the contract manufacturing unit.

This was Fiat's second attempt this decade to take control of Bertone's coachbuilding business. In 2006, Fiat started negotiations to buy a controlling stake in the company. It planned to make a coupe cabriolet for the Lancia brand at the plant.

For undisclosed reasons, the talks between Fiat and Bertone collapsed in spring 2007. Shortly after that, Fiat scrapped plans to make the coupe cabriolet, which was known as the Fulvia.

Bertone, founded in November 1912, is Italy's oldest contract manufacturer. The company stopped volume production in December 2005.

Bertone still employs about 1,140 people, down from the 1,450-person work force it had at the end of 2007.

MINI Spirit returns

British legend's big plans for new small car are exclusively revealed

It’s MINI’s biggest ever secret – and autoexpress.co.uk has all the details.

We’ve uncovered a bold plan by the British car maker to develop a new family of city cars, including a zero emission flagship powered by an advanced electric engine.

Though exact details remain scarce, it’s believed that the ultra efficient model line up will also offer drivers fuel sipping petrol engines as MINI owner BMW seeks to build an army of green machines aimed at beating tough legislation on CO2 and other gas emissions due in 2012.

Set to hit the road as early as 2011, it’s been confirmed to Auto Express that the top-secret machine is being developed alongside two new models from a joint venture between Fiat and BMW that’s tipped to mark the return of the famous BMW Isetta and Topolino nameplates

Aimed at a fast growing family of soon to be launched rivals – including Volkswagen’s Up! and a new family of small electric cars from French maker Reanult, MINI is promising to return to its roots with a lightweight model the promises to be every bit as innovative as the 1959 original.

It’s said to be no accident that MINI has chosen its 50th year to begin to develop such a ground breaking new model.

With its engine in back, petrol models will offer four seats and easy to access four door cabin. Individual chairs for driver and passenger will ensure safety is first rate, while the car’s wheel at each corner stance promises to ensure the car feels secure and stable on the road.

Plenty of effort is being poured in to ensuring that visibility is as good as it can possibly be with a large glass area set to ensure that the car is as easy as possible to drive on congested city roads.

Also under consideration is lightweight, tough plastic bodywork, like that fitted to the Mercedes Smart, while the car’s chassis will mix aluminium and composite materials like carbon fibre to deliver enormous strength and light weight.

Electric models could further improve the car’s interior space by locating the batteries in a thin sandwich under the car, and placing electric motors in all four wheels.

Technology to propel this version of the machine is reportedly already well advanced, and has already been publicly trialled in a prototype MINI called the E. This machine, which uses a battery and engine set up similar to that developed by American sportscar firm Tesla is set to be made available in small numbers in both the USA and Germany.

There’s no word on pricing for the newcomer, but given the advanced technology it’s expected to offer, it’s likely that flagship models will cost at least £20,000. A concept paving the way to full production is tipped to make an appearance at this year’s Frankfurt Motor Show.

Fiat plans to acquire 35% stake in Chrysler

Both Fiat S.p.A. and Chrysler LLC would fill significant gaps in their global businesses with the proposed alliance announced today.

The deal would give Fiat Auto, which sells virtually no vehicles in the United States, manufacturing capacity and a U.S. sales network. It also would give Fiat Auto the global automotive volume that Fiat Group CEO Sergio Marchionne says the company needs to survive.

Chrysler, meanwhile, could expand its product portfolio to include Fiat's small, less-polluting cars and gain distribution in Europe and Latin America. Chrysler could add volume to its U.S. plants by building Fiat vehicles for sale here.

One thing Chrysler doesn't get is money. The deal, which would give Fiat an initial 35 percent stake in Chrysler, involves no cash investment.

A joint statement by Chrysler, Fiat and Chrysler's majority owner, Cerberus Capital Management LP, said "the alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future."

The nonbinding agreement is subject to due diligence and regulatory approval.

It appears that Fiat's stake would come entirely from Chrysler's majority owner, Cerberus, and not from Daimler AG, which has been trying to sell its remaining 19.9 percent stake in Chrysler.

The UAW supports the deal.

Fiat Vice Chairman John Elkann told reporters today that the Italian group could increase its Chrysler stake from the initial 35 percent. According to press reports, Fiat will have an option to take as much as 55 percent.

"We can raise that" initial share, Elkann said, without being specific. "It's a good deal. ... We have already said that it's important to have consolidation in the auto sector."

The pact "would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrains and components to be produced at Chrysler manufacturing sites," the companies said.

Under the terms of the deal, Fiat would make available its distribution network in key growth markets. "Substantial cost savings opportunities" would be available to the alliance, the companies said.

Optimize global supplier base

The carmakers said a tie-up would allow them to take advantage of each other's distribution networks. They also said there would be opportunities "to optimize fully their respective manufacturing footprint and global supplier base."

Fiat Group CEO Sergio Marchionne said the alliance "confirms Fiat and Chrysler commitment and determination to continue to play a significant role" in the global auto industry.

That is consistent with Marchionne's view that the current economic crisis will reduce the number of global automakers.

In an interview published last month in Automotive News Europe, Marchionne said that within two years there could be only six global automakers.

"The only way for companies to survive is if they make more than 5.5 million cars per year," Marchionne told the publication, an affiliate of Automotive News.

In 2007, the most recent year for which global data are available, the two companies produced a combined 5,386,073 vehicles worldwide, which would have ranked them fifth globally. Fiat Auto produced 2,813,870 vehicles, and Chrysler produced 2,572,203.

Chrysler CEO Bob Nardelli says the alliance "creates the potential for a powerful, new global competitor." He said in a statement that Chrysler will benefit from "access to products that complement our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing."

Although Chrysler has expanded global sales in recent years, its limited presence outside the U.S. has been a longstanding weakness -- one that the acquisition by DaimlerChrysler, which unraveled in 2007, was meant to solve.

Nardelli also said the partnership would help solidify the future of Chrysler, which has received a $4 billion federal bailout loan, as well as a $1.5 billion federal loan to Chrysler Financial.

The Fiat alliance would "provide a return on investment for the American taxpayer by securing the long-term viability of Chrysler brands in the marketplace, sustaining future product and technology development for our country and building renewed consumer confidence, while preserving American jobs," Nardelli said.

Ron Gettelfinger, president of the UAW, said: "This is great news for the UAW Chrysler team, and we look forward to supporting and working with them to ensure Chrysler's long-term viability."

A Daimler spokesman declined to comment on prospects for a combination of Fiat and Chrysler other than to say: "We welcome any initiative that serves to stabilize the situation at Chrysler and preserve jobs at the company."

Reuters contributed to this report

PRESS RELEASE: Fiat Group, Chrysler and Cerberus Announce Plans for a Global Strategic Alliance

Fiat S.p.A., Chrysler LLC (Chrysler) and Cerberus Capital Management L.P., the private investment majority owner of Chrysler LLC, announced today they have signed a non-binding term sheet to establish a global strategic alliance.

The alliance, to be a key element of Chrysler's viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities. In addition, Fiat would provide management services supporting Chrysler's submission of a viability plan to the U.S. Treasury as required. Fiat has been very successful in executing its own restructuring over the past several years. The alliance would also allow Fiat Group and Chrysler to take advantage of each other's distribution networks and to optimize fully their respective manufacturing footprint and global supplier base.

The proposed alliance would be consistent with the terms and conditions of the U.S. Treasury financing to Chrysler. Per the U.S. Treasury loan agreement, each constituent will be asked to contribute to Chrysler's restructuring effort including: lenders, employees, the UAW, dealers, suppliers and Chrysler Financial. Such steps would greatly contribute to Chrysler's long term viability plan. Completion of the alliance is subject to due diligence and regulatory approvals, including the U.S. Treasury.

As a consideration for Fiat Group's contribution to the alliance of strategic assets, to include: product and platform sharing, including city and compact segment vehicles, to expand Chrysler's current product portfolio; technology sharing, including fuel efficient and environmentally friendly powertrain technologies; and access to additional markets, including distribution for Chrysler vehicles in markets outside of North America, Fiat would receive an initial 35 percent equity interest in Chrysler. The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future.

"This initiative represents a key milestone in the rapidly changing landscape of the automotive sector and confirms Fiat and Chrysler commitment and determination to continue to play a significant role in this global process. The agreement will offer both companies opportunities to gain access to most relevant automotive markets with innovative and environmentally friendly product offering, a field in which Fiat is a recognized world leader while benefitting from additional cost synergies. The deal follows a number of targeted alliances and partnerships signed by the Fiat Group with leading carmakers and automotive suppliers over the last five years aimed at supporting the growth and volume aspirations of the partners involved," the CEO of Fiat Group, Sergio Marchionne said.

"A Chrysler/Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that compliment our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing," said Bob Nardelli, Chairman and CEO of Chrysler LLC. "This transaction will enable Chrysler to offer a broader competitive line-up of vehicles for our dealers and customers that meet emissions and fuel efficiency standards, while adhering to conditions of the Government Loan. The partnership would also provide a return on investment for the American taxpayer by securing the long-term viability of Chrysler brands in the marketplace, sustaining future product and technology development for our country and building renewed consumer confidence, while preserving American jobs."

"This is great news for the UAW Chrysler team and we look forward to supporting and working with them to ensure Chrysler's long term viability," said Ron Gettelfinger, President United Auto Workers (UAW).

"We're on board with this important strategic initiative as it will help preserve the long-term viability of our great company, its brands and of course UAW-Chrysler jobs," said General Holiefield, Vice President, United Auto Workers (UAW).

Merger facts Italy's Fiat, which needs a partner to survive the auto crisis, has agreed to take a 35 percent stake in Chrysler LLC. Here are some key statistics about the two groups: FIAT • Key car brands are Fiat, Lancia and Alfa Romeo. • Also owns luxury sports car makers Ferrari and Maserati. • Has a market capitalization of about $7.5 billion. • Trading profit for the entire group including Iveco trucks and CNH tractors was 802 million euros ($1.04 billion) in the third quarter on sales of 14.3 billion euros, up from 13.9 billion a year earlier. • Main markets are Europe and Brazil. Nearly all of the profit for Fiat Auto comes from Brazil. • Founded in 1899 and steered from 1902 by Giovanni Agnelli whose grandson Gianni, chairman from 1966, was a legend of Italy's corporate scene, known as much for his society lifestyle as his business acumen. • Has struck a series of alliances with other manufacturers, including India's Tata and China's Chery. • In 2000, in the midst of a debt crisis, Fiat struck a deal with General Motors in which the U.S. car maker took a stake. The agreement was dissolved in 2005. • Current CEO Sergio Marchionne took over in 2004 and put in place a plan to turn the car maker around which was successful, but the company has suffered like others in the current global crisis. CHRYSLER • Founded in 1925. • Best-known models include Dodge, Plymouth and Jeep. • Bought by Germany's Daimler in 1998 in a $36 billion deal. • Daimler sold 80.1 percent of Chrysler in 2007 to Cerberus Capital Management LP for $7.4 billion. • Daimler retains a 19.9 percent stake which it said on Tuesday it still wanted to sell. It has been in talks with Cerberus about the stake. • In October, Chrysler held merger talks with GM. • Chrysler has taken $4 billion from the U.S. government as a loan to help it cope with the current global crisis and has also received $1.5 billion for its finance arm. Source: Reuters research, company Web sites

Pininfarina eyes year-end debt deal

After months of talks that have forced it to postpone a crucial capital increase, Italy's Pininfarina said today it still expected to reach a deal with its creditors to reschedule its debt by year-end.

Like other suppliers and service providers in the car industry, the small designer and niche manufacturer has been struggling to pay off its debt.

Its business has been suffering since clients such as Ford Motor and Fiat's Alfa Romeo have seen their sales tumble in the worst crisis to hit the industry in decades.

One client, Swedish luxury brand Volvo, has had such a hard time that its owner, Ford, has put it up for sale.

Best known for designing Ferraris, Pininfarina was supposed to have reached an agreement with its creditors to reschedule 600 million euros of debt by Sept. 30.

But the talks stretched beyond the deadline.

Since a deal had been a prerequisite for a capital increase of 100 million euros, Pininfarina was forced to abandon its plans to raise the money in November. It was to use it for a joint venture with French financier Vincent Bollore to develop an electric car, a project pivotal to Pininfarina's revival.

The talks eventually led to Pininfarina proposing the banks convert 180 million euros of debt into shares representing up to 30 percent of the company.

The founding family had been ready to cut its stake to about 30 percent from more than 50 percent with the capital increase to a select group of investors including Bollore. But this latest proposal to the banks, announced on Nov. 12, was seen substituting that idea.

Other select investors had included Ratan Tata. But the Indian business leader has had his own money problems, with his Tata Motors finding it hard raising money to pay the $3 billion bridge loan obtained to buy Jaguar and Land Rover.

In light of plunging sales, Pininfarina has been cutting costs by halting production at its three plants on a rotating basis for one week a month in November and December. It plans to do the same thing for all of 2009.

Its creditors include Italian banks Intesa Sanpaolo and UniCredit.

Ford says it might sell Volvo

Ford Motor is exploring the possible sale of Volvo Cars, the company said Monday.

The US automaker said it would "re-evaluate strategic options" for the Swedish brand.

It said its decision had been forced by the decline in the global auto industry and economic downturn.

"Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo," said Ford President and CEO Alan Mulally in a statement.

One of the options includes the sale of Volvo, which is based in Gothenburg, Sweden.

Ford said the review likely will take several months to complete.

Until then, Ford will continue working closely with Volvo as it implements its restructuring plan under CEO Stephen Odell, who was appointed to lead Volvo in September.

"Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results," said Mulally.

He added: "As we conduct this review, we are committed to making the best decision for both Ford and Volvo going forward."

Mulally said the strategic review was part of Ford's plans to make sure it has enough money to survive the current downturn.

Ford and Volvo will continue to put in place processes that allow Volvo to operate on a more stand-alone basis, Ford said.

Ford bought Volvo for 50 billion kronor ($6.45bn) in 1999 following a bidding war with Volkswagen and Fiat.

The brand was profitable at first, but, more recently, it has been in the red.

Sales slipped 13.5 percent to 295,634 units in the first nine months of 2008.

In the third quarter, Volvo's pretax losses widened to $458 million from $167 million a year ago.

In response, Volvo cut 6,000 jobs this year.

Despite this, Odell was positive about the brand's future. "Outstanding safety, an increased focus on environmentally friendly vehicles and contemporary Scandinavian design will continue to be the foundation upon which we will build a strong Volvo business for the future." he said in a statement.

He said Volvo has a strong presence in Europe, North America and the Asia Pacific region.

Said Odell: "We are growing in key markets such as China and Russia, where we are the leading premium brand."

The 100mpg fuel busters!

BMW and Fiat are joining forces to bring a revolution in the market – with a pair of ‘bubble’ cars which promise world-beating economy and ultra-low CO2 emissions...

Two of the most important new cars ever are about to ‘bubble’ to the surface – and in a world exclusive head-to-head, Auto Express has brought them together for the first time!

These are the clearest illustrations yet of BMW’s new Isetta and its sister, the Fiat Topolino. They are the result of a new deal between the two firms, which will also be extended to include next-generation versions of the MINI and Alfa Romeo MiTo.

The Isetta and Topolino are crucial to BMW and Fiat’s attempts to reduce the overall CO2 emissions of their ranges – but they will also offer buyers 100mpg fuel returns! Reviving a name not seen since the bubble car of the Fifties, the Isetta will take BMW into a new sector of the motoring market.

It will be joined by the Fiat Topolino – which we featured in Issue 1,013. Both machines will offer incredible fuel consumption and low emissions, as well as tiny dimensions, and rival the imminent VW up! and Toyota iQ.

The Isetta will be hugely important, because it will help BMW comply with the European Commission’s plans to impose an average 120g/km limit on the model ranges of all firms selling cars across the Continent by 2012. And, as there are plans for an electric version, it would also enable the manufacturer to meet California’s upcoming zero-emissions vehicle legislation.

As you can see from our artist’s impression, the Isetta harks back to the original bubble car shape. But it has been given a modern reworking by the design team, with the addition of some BMW-style chunkiness. The body is made up of simple panels, likely to be fashioned from plastic to save weight and help resist parking dings.

Meanwhile, the Topolino gets a retro look inspired by the 500, with a cheeky front end featuring a smooth nose and large headlights. Under the skin
of both models lies an all-new platform that places the engine in the rear and sends drive to the back wheels.

With an electric-only Isetta some way off, small-capacity petrol and diesel engines will feature initially. And as Fiat is using a new 900cc two-cylinder petrol motor in the Topolino, the Isetta could benefit from the same unit.

The new powerplant was previewed in Fiat’s Panda Aria concept at last September’s Frankfurt Motor Show, and it arrives in dealers under the bonnet of the 500 later this year. While two outputs will be offered in this car – a 105bhp turbo and a normally aspirated 65bhp unit – it will be the latter that powers the Topolino.

Twin-clutch semi-automatic gearboxes are likely to be used by both models, as is a stop-start set-up which switches off the engine when the car
is stationary in heavy traffic. Combine this technology with a lightweight body, and the newcomers will be incredibly efficient. Expect combined fuel economy of 100mpg and CO2 emissions of less than 90g/km.

The interior layout is still up for debate, but there is likely to be enough room for three occupants with an occasional fourth seat, allowing owners
to juggle luggage capacity with passenger space.

It will be interesting to see if BMW and Fiat can make the rear-engined, rear-wheel-drive layout work efficiently. An insider at VW recently told Auto Express that a similar mechanical layout in the up! is being ditched in favour of a front-engined, front-wheel drive format, after it was found that the layout was too costly to develop and made the car unstable in cross winds.

Although official production dates have yet to be decided, the Isetta and Topolino are set to arrive some time in 2010.

Minis’ safety slammed

Car makers are letting safety slide when it comes to superminis, crash test experts claim.

Despite the growing popularity of the fuel-efficient small models, only 17 per cent of those on sale in the UK are fitted with Electronic Stability Control (ESC) as standard.

The vital safety kit detects a skid and uses electronics to brake individual wheels and keep the vehicle under control. It is “the most effective safety device since the seatbelt”, according to Michiel van Ratingen, secretary general of Euro NCAP which surveyed the kit’s availability Europe-wide.

A comparison of cars revealed that Proton and Lotus were the worst culprits, with neither offering the set-up on any of their models – even as an option. Chevrolet was next on the league table, with ESC standard on none of its European cars and optional on only one-third of its range. Fiat, Suzuki and Daihatsu followed, with less than 30 per cent of theirmodels having the device fitted.

Fiat, BMW plan small-car alliance

Fiat and BMW will cooperate to develop a new platform for small cars, supplier sources said.

The platform will underpin the next Fiat Grande Punto and BMW's third-generation Mini. Both cars are due early in the next decade.

The two companies are also considering developing a new family of gasoline and diesel engines, sources told Automotive News Europe.

Fiat Group CEO Sergio Marchionne said today that the carmaker will announce a cooperation agreement with another automaker tomorrow.

"Most likely it will be in the car business," Marchionne said on the sidelines of the press introduction of the 500 Abarth model here.

Marchionne did not give any more details on the cooperation.

But supplier sources familiar with the matter told ANE that Fiat and BMW will cooperate on a new small-car platform.

Fiat already has industrial alliances with other carmakers including PSA/Peugeot-Citroen, Suzuki and Tata.

BMW cooperates in Europe with PSA on engine production and the company has a joint venture in China with Brilliance.

Automakers increasingly are cooperating with competitors to reduce investments costs for new models.

Maserati Updates Quattroporte

With a new-from-the-ground-up Maserati Quattroporte not due until 2012, Maserati has facelifted the car for 2009.

The Quattroporte has Maserati's familiar 400-hp, 4.2-liter V8, while the S uses the new 4.7-liter, 425-hp V8 recently introduced on the GranTurismo S. A six-speed ZF automatic is standard with either engine.

Styling changes include a new front fascia with vertical slots � la the GranTurismo, new front and rear lights, new side mirrors and a revised interior with a new navigation system.

The '09 Quattroporte goes on sale late this year.