Magna mulls Pininfarina takeover

Canadian-Austrian parts supplier Magna International Inc. is weighing a proposal to buy Italian design specialist Pininfarina S.p.A., three sources with direct knowledge of the matter told Automotive News Europe.

Earlier this month, Pininfarina's quarterly earnings report disclosed that the company could be sold as soon as Dec. 31. But Magna and Pininfarina declined to comment on the likelihood of a sale.

Magna wants to strengthen its position as a global supplier of design, engineering and contract manufacturing, one source said. Pininfarina's design expertise and engineering know-how would augment the range of services offered by Magna subsidiary Magna Steyr, which engineers complete vehicles and builds cars for several automakers at its assembly plant in Graz, Austria.

Magna has bid to take over an automaker, without success. It failed to gain control of Aston Martin from Ford Motor Co. and last year a consortium led by Magna was poised to acquire Opel/Vauxhall from General Motors Co., but the Detroit automaker backed out.

After the Opel defeat, Magna decided to stop pursuing automakers and instead focus on its core business of being a global supplier of parts and services, including contract manufacturing.

Financial struggles

Pininfarina is known for building legendary sport cars such as the 1966 Alfa Romeo Spider and the 1984 Ferrari Testarossa. But the company has struggled financially for years, losing a combined 358 million euros from 2007 to 2009.

In August 2009, Pininfarina hired Banca Leonardo, a Milan-based merchant bank, to sell a 50.7 percent stake held by Pincar, the Pininfarina family holding company. The sale is part of a debt agreement made at the end of 2008 with creditor banks, which canceled 180 million euros in loans as part of the agreement. The banks will get the proceeds from the sale of the stake, which grew to 76.1 percent late last year after the banks canceled another 70 million euros in loans.

Banca Leonardo officials declined to comment on the possible Magna takeover of Pininfarina.

The Pininfarina family's share of the company has shrunk from 55 percent to just 1.2 percent.

Pininfarina, which is listed on the Milan stock exchange, was founded 80 years ago by Battista Pininfarina, the grandfather of current chairman Paolo Pininfarina.

Less debt

Pininfarina has reduced its net debt from 157 million euros in 2007 to 58 million euros (about $78 million) as of Sept. 30. But the company is still losing money. 

For the first nine months of 2010, Pininfarina reported a net loss of 34 million euros, compared with 18 million euros a year earlier. For the full year, Pininfarina expects flat sales, more debt and a larger net loss.

If Pininfarina is sold, the buyer will get a company that is focused on design and engineering, rather than vehicle assembly.

The company still has two Italian assembly plants in Bairo and San Giorgio Canavese, both north of Turin. But Pininfarina will stop production at those factories when it completes the last Alfa Romeo Brera coupe and Spider models this month.

Pininfarina also makes cars in a joint venture with Volvo Car Corp. in Sweden. But the company has an option to sell its stake if Volvo fails to submit a plan this year for its C70 replacement.

Fiat may sell Ferrari stake ahead of Chrysler merger, Marchionne tells analysts

Fiat S.p.A. may sell auto-parts division Magneti Marelli S.p.A. and a stake in supercar maker Ferrari S.p.A. before consolidating Chrysler Group LLC, CEO Sergio Marchionne told analysts. 

“We left Turin with the clear message that Fiat and Chrysler will become one company,” Morgan Stanley analyst Stuart Pearson wrote in a note to clients Monday, after attending a Nov. 12 analysts meeting with Marchionne. “A Ferrari initial public offering and potential Marelli disposal may need to come first, according to management,” said Pearson, who has an “overweight” rating on the stock. Morgan Stanley added Fiat to its “best ideas” list Monday. 

Credit Suisse analyst Eric Hauser was quoted Monday as saying that “Marchionne identified a Ferrari initial public offering and Magneti Marelli disposal as potential sources of cash, without giving a timeframe. 

“Fiat may value Ferrari at 2.4 billion euros ($3.3 billion), Magneti Marelli will be a much tougher asset to dispose of as 50 percent of sales are to Fiat,” said Hauser, who has a “neutral” rating on the stock. “I guess they'll float Chrysler first and then work out how to finance the exercise of options to get to over 50 percent in Chrysler, between 2013 and 2016.” 

Pending stock listing

Marchionne also took the opportunity to explain the advantages of spinning off Fiat's industrial businesses, including Iveco S.p.A. and CNH Global NV. Italy's biggest manufacturer plans to list Fiat Industrial S.p.A. shares on the Milan exchange on Jan. 3, allowing it to focus on reviving carmaking operations. 

Fiat declined to comment on the analyst reports from the meeting, but confirmed the meeting took place in Turin on Nov. 12. 

Writing in a note to investors, USB analyst Philippe Houchois claimed that Alfa Romeo clearly is not for sale because its will play a key role in Marchionne's five-year plan for Fiat Group. Meanwhile, Morgan Stanley's report said that Marchionne confirmed VW's interest in buying Alfa Romeo, but added that the brand would only be sold for a very high price. 

Fiat, which acquired a 20 percent stake in Auburn Hills, Michigan,-based Chrysler last year, has said it will raise the holding to 25 percent by the first quarter and to 35 percent by the end of next year. 

Marchionne plans to take the U.S. automaker public in the second half of 2011.

Alfa 159 a mistake

According to the Morgan Stanley report, Marchionne also admitted that launching the Alfa 159 was a mistake, but he said he is confident that a U.S. built Giulia will be a "true Alfa."

A Fiat spokesman said the company has not decided yet whether to build the Alfa Giulia in Italy or in the United States. According to a Fiat strategic plan unveiled in April, the Giulia would replace the 159 sedan and wagon at the end of 2012.

Lamborghini sees sales dip before new supercar launch

Lamborghini ceased production of its high-performance Murcielago six months ago and will not see sales pick up again before the second half of 2011 with the launch of a successor supercar, its CEO said on Friday.

Lamborghini, a unit of Volkswagen AG's Audi, ended production of the $400,000 Murcielago in May in a move that is bound to hit full-year revenues, Stephan Winkelmann said in an e-mail to Reuters.

"This will surely have an impact on our sales performance. Compared with 2009, we will pay for the absence of the Murcielago this year," he said.

Founded in 1963 by Ferruccio Lamborghini, the company has been hit hard by the global economic crisis.

First-half sales fell 2.6 percent to 152.9 million euros ($216 million), despite continued growth in Asia, after dropping 41 percent to 281 million euros in 2009.

"In general terms, a return to the record levels seen in 2007-2008 will not be immediate, considering the slow demand from markets like Europe and the United States," Winkelmann said. "We see a recovery starting from the second half of next year." Lamborghini sold a record 2,430 cars in 2008.

The Murcielago, which is named after a fighting bull like its famous predecessor, the Diablo, and its cheaper sibling, the Gallardo, is Lamborghini's top-selling 12-cylinder car, with more than 4,000 delivered in nine years, of which 409 were sold in 2009. The last Murcielago left the company's base in Sant'Agata Bolognese, Italy, in May, for a Swiss customer.

Selling for up to 300,000 euros ($424,300) apiece, the Murcielago costs almost twice that of the Gallardo, now the company's only product on offer until the next supercar model is unveiled in Geneva in March 2011.

Looking ahead, Winkelmann said Lamborghini aimed to launch a new model every year and boost investments in new technologies.

A new initiative will be announced in Los Angeles in a couple of weeks, he said.

Lamborghini rival Ferrari, which reported third-quarter revenues of 446 million euros, up 12.6 percent from a year ago, is looking to post near record results for this year, the Fiat unit's chairman, Luca Cordero di Montezemolo, said in September.

Citroen DS9 gets greenlit for China

The ‘French S-Class’ based on the Metropolis Concept is on its way, with petrol hybrid engines and a wheelbase longer than Audi A8.

French giant Citroen is taking its luxury DS range to the next level! The company is set to launch a new flagship saloon to compete head-on with Mercedes’ S-Class, as well as the Audi A8 and JaguarXJ. And Auto Express has learned it will be badged DS9. 

Designed to show just what the upmarket DS sub-brand is capable of, the newcomer will take its lead from the Metropolis concept, which was revealed at the Shanghai Expo back in May. And it will also be built in China. 

Speaking to Automotive News China, Citroen’s head of Asian operations, Gregoire Olivier, said: “The Metropolis will happen, it will become a real car."

“The styling elements will be used for a high-level Citroen to be developed in China. We want to build up the premier line in the country, and this concept is central to this approach.”

The Metropolis uses the C6 executive saloon’s platform, and is 5.3 metres in length – that’s longer than an A8 LWB. It has a 2.0-litre petrol V6 mated to an electric motor, which delivers 460bhp and CO2 emissions of 70g/km. 

A similar powertrain is expected in the DS9, although details have yet to be finalised. Scheduled to enter production in late 2012, the DS9 will be built as part of Citroen’s joint venture with the Changan Automotive Group in Guangdong province. 

Small Cadillac will take aim at Mercedes C class, BMW 3 series

The new Cadillac model that General Motors announced today will be aimed at the smaller models produced by BMW, Mercedes-Benz and other luxury brands.

The rear-drive Cadillac is expected to be called the ATS and arrive in showrooms in 2012 or early 2013, according to industry sources. 

GM CEO Dan Akerson described the car as “a rear-wheel drive performance car [that] will compete against the C class Mercedes. They call it C class because it is very average.” 

The car also will compete against the BMW 3 series, he said. 

Akerson made the announcement at the automaker's Lansing Grand River assembly plant in Lansing, Mich. GM plans to spend $190 million to modify the plant to build the ATS. A second shift and 600 jobs will be added. The timing for the second shift and the additional employees was not announced.

GM also did not identify the name for the car or give the time frame for production.

Union help

Joe Ashton, UAW vice president of the union's GM department, said “the UAW recognizes the paramount importance of innovation, flexibility and partnership with management to respond to global economic pressures. 

“We are proud to play our part in the turnaround at GM. Our mission is to make the highest quality products for the best value,” Ashton said in the news release. 

The plant currently assembles the Cadillac CTS and STS.

Since emerging from bankruptcy in July 2009, GM has announced investments totaling more than $3.1 billion in 21 U.S. plants.

“The 3 series is BMW's biggest seller,” said Jim Hall, director of industry analysis at 2953 Analytics. Cadillac has “to go with the core of the market.”

Last year, BMW sold 90,960 3-series models in the United States, a 19 percent drop from the previous year. But for the nine-month period this year, BMW sold 73,395 3-series models, a 9 percent increase over the same period in 2009. 

Full-line luxury brand

The ATS and the upcoming XTS sedan are part of Cadillac's plan to position the brand as a full-line luxury brand. The XTS will share a front-drive platform with the Buick LaCrosse and other GM models. It will debut in 2011. 

A larger, rear-drive Cadillac that would rival the Mercedes-Benz S class and BMW 7 series in pricing is planned later in the decade.

Cadillac sold 105,013 vehicles during the January through September period, a 44 percent increase over the same period in 2009. The automaker sold 109,092vehicles in 2009, a 32 percent decrease over the previous year.

The ATS will be developed on GM's new rear-drive Alpha vehicle platform. The platform will be used for a range of ATS models -- a sedan, coupe, convertible and possibly a wagon, Hall said. 

GM also expects this smaller Cadillac to be more acceptable as an export model, he said.

Stretching the Alpha

The Alpha platform also will be stretched to develop the next-generation CTS. That car is expected to debut in 2013 or 2014.

The platform will not be unique to Cadillac. The next-generation Chevrolet Camaro will share the platform in 2014 as well as a possible sporty, high-performance Chevrolet sedan that is under consideration. 

Prior to GM's bankruptcy and the elimination of brands, a Pontiac model also had been slated to share the platform.

PRESS RELEASE: GM to Invest $190 Million, Add 600 Jobs at Lansing Grand River

LANSING, Mich. – General Motors today announced a $190 million investment in its Lansing Grand River assembly plant for the production of a new Cadillac model. The investment will create 600 jobs and result in the addition of a second shift.

“America's fastest-growing luxury brand this year is about to get even more competitive with the addition of an all-new small luxury car,” said GM Chief Executive Officer Dan Akerson. “This investment demonstrates GM's commitment to Cadillac and to a strong U.S. manufacturing base.”

The announcement brings the total of new U.S. investment to more than $3.1 billion and more than 7,900 jobs that GM has created or retained in 21 U.S. plants since emerging from bankruptcy in July 2009.

Built in 2001, Lansing Grand River is GM's second-newest U.S. assembly plant and the manufacturing home of the Cadillac CTS and STS as well as their V-series performance versions. Earlier this year Lansing Grand River received the J.D. Power and Associates Bronze Plant Award for initial quality.

Joe Ashton, UAW vice president of the GM Department, said, “Today's announcement is further proof of what UAW President Bob King said earlier this summer, ‘The UAW recognizes the paramount importance of innovation, flexibility and partnership with management to respond to global economic pressures. We are proud to play our part in the turnaround at GM. Our mission is to make the highest quality products for the best value.' 

“The members of UAW Local 652 have consistently demonstrated that they can compete with any labor force on the globe,” Ashton added. “The commitment, dedication, and hard work of GM's UAW members provide the foundation for the positive news coming from the company.”

This year, the Lansing Grand River team launched the CTS Coupe, lauded by the automotive press for groundbreaking design and outstanding performance. The Coupe extends the CTS line, which has been named to Car and Driver's 10 Best list for three straight years. It shares design cues with the CTS Sport Sedan, but the Coupe has a wider track, lower roofline and shorter length, giving it an aggressive stance and sleek, athletic profile

The timing of the new Cadillac and the new jobs as well as the start of the second shift will be announced later.

Chrysler to roll out new Pentastar V-6 engine on 13 models

Chrysler Group said today it plans to make its Pentastar V-6 engine available on 13 models, a move that will result in improved fuel efficiency, more horsepower, weight savings and reduced emissions and manufacturing complexity.

The 3.6-liter Pentastar V-6 -- the most advanced six-cylinder engine ever produced by Chrysler -- will become the automaker's workhorse engine and will replace seven V-6 engines over the next three years.

It is expected to account for more than a third of the powertrains offered by Chrysler by 2014, and improve the automaker's average corporate fuel economy by more than 25 percent.

“The Pentastar engine is suited to meet the requirements for a full range of vehicle applications in terms of power and fuel efficiency, including passenger cars, minivans and sport utilities,” Bob Lee, vice president of engine engineering for Chrysler, said in a statement. “It has been designed for today and many years to come. Already, we are looking forward to adapting future technologies as they become available to the Pentastar V-6 for even more fuel efficiency and performance.”

The Pentastar V-6 was designed to be compact and lightweight, and can be used in front-, rear- and all-wheel-drive models, Chrysler said.

It was introduced on the 2011 Jeep Grand Cherokee. A 3.6-liter version tuned to get 305 hp will debut on the 2011 Dodge Challenger. Chrysler said the Challenger version will provide a 55-hp boost over an outgoing V-6 and enhance fuel economy to 18 miles per gallon in city driving and 26 mpg on the highway. 

The boost in horsepower for 2011 will put the Challenger on par with the Ford Mustang. 

As the Pentastar V-6 is introduced on more models, Chrysler plans to phase out seven V-6 “legacy engines' that range in size from 2.7 to 4-liters. Some of those V-6 engines were developed jointly with former parent Daimler AG.

Chrysler said the engine will run on regular 87-octane unleaded fuel, as well as on E85 blended gasoline.

It will also allow Chrysler to reduce major engine components from 189 parts to 32. It is 94 pounds lighter than the 3.7-liter engine it replaced on the Jeep Grand Cherokee and 42 pound lighter than the 3.5-liter it replaces in the Chrysler 300 sedan.

On minivan models that were equipped with a 4-liter engine, horsepower has been increased by 32, to 283. And the new Dodge Charger will feature a Pentastar V-6 with 292 hp -- 42 more than the current model.

The engine is assembled in a new $364 million plant in Trenton, Mich., as part of the $730 million Chrysler invested in the Pentastar program. Chrysler says the Trenton site will be able to produce more than 400,000 Pentastar engines a year.

A second factory in Saltillo, Mexico, also is scheduled to assemble the new engines.

Next Beetle takes evolutionary design step

The redesigned 2012 Volkswagen New Beetle will undergo an evolutionary styling change when production begins next year.


The redesigned 2012 New Beetle shares a vehicle platform with the Volkswagen Golf. The New Beetle will continue to be assembled in Puebla, Mexico.

In an interview last October, Stefan Jacoby, who at that time was the president and CEO of Volkswagen Group of America, said the next generation New Beetle would have more space for rear-seat passengers and better packaging. However, the overall dimensions of the vehicle would not significantly change.

Jacoby said the major complaint about the current car — aside from its age — is the cramped rear seat. Few changes have been made to the current New Beetle since it debuted in 1998. 

New Beetle sales peaked at 83,434 units in 1999 and have plunged considerably since then. VW sold 14,085 New Beetles last year in the United States, a 47 percent drop from 2008. Through September, sales are up 27 percent from last year, to14,747.