VW makes ‘last attempt' to save Seat

Seat, Volkswagen AG's most unprofitable unit, aims to stem losses within five years and halt a flight of customers to rivals by expanding its model range and growing outside its Spanish home market.

“This is the last attempt for Seat as a brand, it would not be sensible to view things differently,” CEO James Muir said Wednesday in Hamburg. “If one would want to get rid of Seat, one would have to give the other party money to take it.”

VW named Muir, Mazda Motor Corp.'s former European chief, as Seat CEO last September after predecessor Erich Schmitt failed in his three-year effort to turn around the automaker. Concern about Spain's economy as a result of Greece's fiscal crisis may further hamper efforts to boost revenue from the unit.

Martorell, Spain,-based Seat's first-quarter operating loss of 110 million euros ($139 million) was more than double VW's two other unprofitable units, Bentley and commercial vehicles. Without a turnaround, Seat may endanger the German automaker's plan to become the largest automaker by 2018, analysts say.

“It will be difficult to turn Seat around,” said Marc- Rene Tonn, an analyst at M.M. Warburg in Hamburg. “Most of their sales stem from southern Europe where the crisis has hit small-car makers particularly hard.”

Falling new-car sales

Deliveries of Seat vehicles such as the Ibiza compact and Alhambra minivan fell 8.5 percent to 337,000 units last year. Spanish car sales slumped 21 percent in 2009, according to the Brussels-based European automakers association ACEA.

Spain's once-booming economy started contracting in the second quarter of 2008 and has taken six months longer than the 16-nation euro area as a whole to return to growth as households pay down debt. First-quarter economic expansion was 0.1 percent. Spain has the eurozone's highest jobless rate at 20.1 percent.

Standard & Poor's cut the country's credit rating on April 28, saying the government was underestimating its fiscal woes and overestimating growth prospects. Prime Minister Luis Rodriguez Zapatero said yesterday he will cut public wages this year amid pressure to rein in Spain's budget deficit.

“Seat is the undisputed trouble-spot in VW's brand portfolio,” said Stefan Bratzel, director of the Center of Automotive at the University of Applied Sciences in Bergisch Gladbach, Germany. “Solving the problems there may take years and a clear-cut remedy isn't in sight.”

Surpassing Toyota

Seat, which gets 56 percent of its sales from the Ibiza model, must expand its range of offerings for models such as the Leon compact and reduce its reliance on Spain, Muir told journalists during a roundtable discussion.

Fixing Seat will be key to plans by VW, which also makes Skoda, Audi and the namesake VW brand cars, to surpass Toyota Motor Corp. in profitability and deliveries in 2018.

As part of that target, Muir yesterday reiterated VW's goal of more than doubling Seat's sales to 800,000 vehicles. Wolfsburg-based VW posted record sales last year of 6.3 million units.

“It seems to me that VW hasn't fully committed itself yet to the brand image of Seat,” said Mike Tyndall, an automotive analyst at Nomura Securities in London. “At some point they wanted Seat to be the sporty brand within the VW family, but some of the model decisions don't add up.”

VW Chief Financial Officer Hans Dieter Poetsch said March 11 that a “comprehensive program” of cost cuts was under way to return Seat to profit after the unit's operating loss in 2009 quadrupled to 339 million euros. The goal is to trim fixed outlays by raising capacity utilization, he said.

Martorell plant gets Audi SUV

To that end, VW will build Audi's new Q3 compact SUV at Seat's main plant in Martorell, near Barcelona, beginning next year, with a goal of making 80,000 vehicles a year. The factory, which can produce 500,0000 vehicles per year, has a capacity utilization of 60 percent currently, Muir said, adding that he needs to reach 90 percent to hit the breakeven point.

“Our clear focus over the next three years will be to improve utilization,” Muir said. “One cannot solely rely on cost reductions to make Seat profitable.”

Muir has made his own missteps since taking over Seat, running into resistance from the German carmaker's labor leaders after announcing plans to lay off about 300 workers. He later backed away from that plan after works council chief Bernd Osterloh criticized his efforts, saying cost reductions weren't enough to save Seat. VW has owned Seat since 1986.

Worker representatives hold half the seats on VW's supervisory board and have played a crucial role in the past in ousting executives that tried to cut jobs, including former VW CEO Bernd Pischetsrieder.

“I'm coming from outside the company straight into the CEO position,” Muir said. “That's a sign that there is a certain frustration about Seat at VW.”

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Fiat to debut Europe's only 2-cylinder engine

500 minicar's TwinAir takes downsizing to a new level

Fiat S.p.A. is taking engine downsizing to a new level with the introduction of its new 900cc, two-cylinder TwinAir unit.

When it goes on sale in the Fiat 500 minicar this summer, the 85-hp turbocharged engine will be the only two-cylinder engine available in a car in Europe.

Fiat will debut the engine at the Geneva auto show on March 2.

Globally, Tata Motors is the only other carmaker currently offering a two-cylinder engine. The Nano minicar, which debuted in India last summer, has a 33-hp 623cc engine.

Automakers are removing cylinders and lowering the displacement of their engines to meet tougher CO2 emissions rules that take effect in Europe in 2012.

Fiat has not released the TwinAir's official CO2 performance information, only saying that the 500 minicars sold with the engine will produce less than 100 grams per kilometer of the greenhouse gas.

The greenest version of the 500, the PUR-02 equipped with a standard stop-start system, currently emits 113g/km.

The TwinAir engine is a key part of Fiat brand's aim to remain Europe's leader when it comes to fleet CO2 emissions in Europe.

Fiat brand had average CO2 emissions of 129g/km in the first half of 2009, according to UK-based market researcher JATO Consult. That places it ahead of Toyota, which had fleet emissions of 132.9g/km during the same period.

Tiny engines

Internally called SGE, for Small Gasoline Engine, the TwinAir has Fiat's fuel-saving MultiAir technology. MultiAir improves power and cuts fuel consumption by 10 percent with electrohydraulic variable valve timing.

Fiat chose the TwinAir name to because this is the first application of MultiAir technology on a two-cylinder engine.

In terms of capacity, Fiat's TwinAir is the smallest gasoline engine available in Europe. Mercedes Benz unit Smart's ForTwo minicar offers Europe's lowest-displacement engine, a 45-hp 799cc three-cylinder diesel.

Rivals such has Volkswagen AG started developing a two-cylinder unit for its new Up family of minicars, but decided to continue using the group's gasoline and diesel three-cylinder engines.

Chevrolet, Citroen, Daihatsu, Mitsubishi, Opel/Vauxhall, Peugeot, Subaru, Suzuki and Toyota also offer three-cylinder engines in Europe.

Fiat has a long tradition of two-cylinder engines. Its first debuted as a 13-hp 569cc unit in the 1936 Topolino. A 13-hp 479cc unit was used in the 500 that arrived in 1957. The last two-cylinder engine built by Fiat was the 31-hp 704cc unit offered on the Cinquecento minicar from 1991 to 1996.

Quick expansion

In addition to the 85-hp TwinAir that debuts in Geneva, there will be a turbocharged 105-hp version and a 65-hp normally aspirated variant of the engine.

Fiat will add the TwinAir engine to other minicars and subcompacts, beginning with the successors to the Fiat Panda and Lancia Ypsilon minicars. Both replacements are due in the second half of 2011.

The TwinAir, which is designed to run on gasoline or compressed natural gas, will be built at Fiat Powertrain Technologies' plant of Bielsko Biala, Poland.

Fiat has not yet announced production volumes for the engine.

Office 2010 prices: the good, the bad and the costly

Microsoft has announced UK pricing for Office 2010 and once again there's bad news for British customers.

UPDATE: MICROSOFT COCK-UP ADDS £30 TO OFFICE 2010 PRICE

Buyers of Office Home and Business are being asked to pay £240 (all UK prices include VAT) for the full boxed version of the software, over £60 more than the US price of £178 ($280) on a straight dollar conversion. Office Professional, which includes every app in the Office portfolio, will cost £430* in Britain, but only £318 ($500) in the US.

"There are a number of different things that play a role [in British Office pricing]," explained Microsoft's Office product manager, Chris Adams, when PC Pro asked him to explain the discrepancies. "There's not one specific thing that leads to differences between us and the US," he said, citing factors such as foreign exchange rates, the cost of localisation and varying production costs from country-to-country.

There's not one specific thing that leads to differences between us and the US

The good news is that the price differences aren't too steep on the entry-level suite, Office Home and Student, which includes Word, Excel, PowerPoint and OneNote. The price of the full boxed version in the UK is £110, compared to a US price of £95 ($120).

All prices are only Microsoft's suggested figures, and retailers will undoubtedly sell the software at below ticket price.

Product Key Cards

Microsoft is introducing a new Product Key Card scheme with Office 2010. This will see trial versions of the Office software pre-installed on new PCs, which users will be able to unlock with a code purchased from retailers or Microsoft itself.

There is, however, a catch with this new system. Although the Key Card codes are cheaper, they only include one licence rather than the three that come with the boxed versions of the software.

That means buyers will pay £90 to unlock Office Home and Student on a single PC, but only £20 more to get a licence for three PCs and, of course, the full back-up disc media that comes inside the box.

Adams says that Microsoft hopes retailers will make this distinction clear to buyers when they purchase a new PC, although as PC Pro's own investigations have shown, High Street retailers aren't exactly renowned for their technical competence.

Retailers will be able to set their own prices for the physical key cards, but at launch only Microsoft will be able to deliver Office unlock codes over the internet. Adams confirmed that Microsoft will be charging full retail prices for these codes.

The Office 2010 price list

Office Home and Student 2010 - £110 (£90 for Product Key Card)

Word, Excel, PowerPoint, OneNote, Web Apps

Office Home and Business 2010 - £240 (£190)

Word, Excel, PowerPoint, OneNote, Outlook, Office Web Apps

Office Professional 2010 - £430* (£300)

Word, Excel, PowerPoint, OneNote, Outlook, Publisher, Access, Office Web Apps, premium technical support

(Revised price, was originally stated as £400)

3 Tesla employees killed in California plane crash

Three employees of Tesla Motors were killed in a small airplane crash in northern California today, the electric car maker's chief executive said.

A Cessna 310 struck an electrical tower after taking off this morning and crashed into a residential neighborhood, killing all three people on board, according to local police. Tesla confirmed all had worked at the company.

Tesla is withholding the employees' names while it works with authorities to notify their families, CEO Elon Musk said.

"Tesla is a small, tightly-knit company, and this is a tragic day for us," Musk said.

Tesla is one of the best-known companies in an emerging electric car industry that is growing as more people seek clean-energy alternatives in their daily lives.

Tesla filed for an initial public offering of up to $100 million last month. The company was co-founded by and is currently run by Musk, an entrepreneur who made his fortune as co-founder of online payments service provider PayPal.

The three employees were mid-level engineers, said a person familiar with the matter, who was not authorized to give out details about the fatalities.

The plane was registered to Air Unique Inc. in Santa Clara, Calif. Air Unique was registered with Tesla engineer Doug Bourn. It was not known whether Bourn was on board.

The plane left the Palo Alto Airport at about 7 a.m. PST bound for Hawthorne Municipal Airport in Southern California. It lost power before striking the tower, breaking off a wing, East Palo Alto Police Department Captain John Chalmers said.

The wing hit a house, causing a fire. The rest of the aircraft struck parked vehicles, Chalmers said. There were no reports of injuries on the ground, Chalmers said.

According to FAA spokesman Ian Gregor, the plane crashed about one mile northeast of the airport.

The FAA does not know if the foggy weather was a factor. Three FAA safety investigators were on the scene, and a National Transportation Safety Board investigator was scheduled to arrive today.

Wired.com said it had confirmed that J.B. Straubel, Tesla's chief technology officer, wasn't aboard.

Peugeot's high 5 set for Geneva debut

French firm release first official picture and details on its Geneva bound 5 concept.

15th February 2010

Say hello to Peugeot's new 5! TheGeneva Motor Showstar is aiming high - with a dramatic new take on the luxury car market.

Essentially a replacement for the unloved 607 saloon, the 5 aims to put right previous wrongs in this sector with a bold new look and a daring design.

The newcomer also promises the very latest environmental technology, with a 200bhp diesel-electric hybrid engine that offers four-wheel drive and CO2 emissions of 99 g/km or zero in battery only mode.

Like the recent SR 1 concept car from new Peugeot design boos Gilles Vidal, the contours of the 5's bodywork flow smoothly and without interruption, from the end of the bonnet to the top of the boot lid.

At the front, new LED equipped lights are highlighted by the use of illuminated surrounds that blend perfectly with the overall exterior body styling.

The headlamps frame a unique front grille design, also influenced by the SR1.

The streamlined sides of the car are enhanced further by the bevelled, brushed-aluminium window surrounds and door handles, combined with sculpted 19’’ wheel trims.

Under the bonnet, the 2.0 litre HDi FAP163 bhp diesel engine is mounted at the front of the vehicle, and combined with a 37 bhp electric motor at the rear.

This arrangement provides an overall maximum power of 200 bhp, an electric only mode for low speed operation, four-wheel drive when required, and low fuel consumption and emissions of 74.3 mpg and 99 g/km of CO2 or zero in electric mode.

Details of the car's interior are stil to be revealed, however, Auto Express understands the cabin focuses on delivering an upmarket blend of space and luxury.

Full details are expected on March 2nd 2010.

JLR helps parent Tata nearly double Jan. sales

India's largest vehicles maker, said its global vehicle sales for January nearly doubled to 85,714 units from a year earlier.

The sales include UK-based luxury brands Jaguar and Land Rover, whose sales nearly tripled in the month to 16,269 units from a year ago, the company said in a statement on Monday. Part of the increase is due to a comparison with weak unit sales in January 2009 due to the worsening of the global economic downturn.

Tata had earlier said domestic sales, including trucks, buses and cars, jumped an annual 77 percent in January

Porsche 911 GT3 R hybrid

Porsche to unveil hybrid 911 GT3 racing supercar at the Geneva motor show

Porsche is taking a hybrid version of its 911 supercar to the 2010 Geneva motor show. It’s no ordinary 911, either – it’s the GT3 R racing car, perhaps the last place you’d expect to find a green-pleasing powertrain.

Not that this one’s particularly green, of course. A 473bhp 4-litre flat-six engine powers the rear wheels, while two electric motors (each developing around 80bhp) power the front axle, effectively making this a four-wheel-drive GT3.

Those motors are powered by an electric flywheel generator, which is charged up by regenerative braking each time the driver slows. And rather than cutting in automatically during the drive (or indeed race) cycle, the electric power is made available KERS-style, as the racing driver requires it for a six to eight second boost.

The 911’s hybrid system is also intended to increase fuel efficiency. Ideal, really, as the car’s first big race with be May’s Nurburgring 24-hour race. And for Porsche, it really is about the taking part rather than the winning: racing the hybrid GT3 R will be ‘a ‘racing laboratory’ that will provide invaluable knowledge and insight on the subsequent use of hybrid technology in road-going Porsche sports car’.

A road-going hybrid version of the next 911, then? Certainly sounds like it…

Citroen DS High Rider concept (2010): first news

Here's the big Citroën news at the 2010 Geneva motor show: the new DS High Rider concept car, a thinly veiled version of the forthcoming DS4 due in early 2011.

It will be the second addition to the fledgling DS sub-brand of near-premium cars, following in the footsteps of the DS3. A three-door coupé, it's our first look at what is likely to replace the C4 hatchback range next year.

Citroën DS High Rider concept car: more details

This is a four-seater coupé that looks distinctly achievable for production. Even its panoramic windscreen is do-able – it's little different from the huge glasshouse on the latest C3 supermini.

The High Rider sits on appropriately chunky alloy wheels of 19in in diameter and stretches to 4260mm long. That golden paintwork contrasts with the unusual coated textile roof covering; don't expect any woolly threads on the production version due in 2011, however.

What drives the High Rider?

Surprise, surprise: the new Citroën concept car is yet another look at the PSA full diesel hybrid system. It mixes an HDI derv engine up front with an electrically powered rear axle – and means the High Rider can drive on full electric mode for short distances around town.

It also means that the PSA hybrids will be four-wheel drive. The first road cars will launch with this system in 2011.

Spyker shareholders approve Saab deal

Shareholders in Spyker Cars NV have approved the $74 million purchase of Swedish automaker Saab from General Motors Co., Chief Executive Victor Muller said on Friday.

The meeting, which was closed to the public, was convened to approve the deal forged two weeks ago.

Muller told reporters on a conference call that the combined company would seek listings on the London Stock Exchange and the Stockholm Stock Exchange, and delist from the Euronext Amsterdam exchange. He also vowed to reach profitability in 2012, although neither Saab or Spyker have made any money in the past decade.

Spyker's Muller has already secured the $50 million needed to close the deal with GM, with the remaining $24 million due in July.

In addition to the cash part of the deal, the new company will also have $326 million in redeemable preference shares issued to GM, $200 million in cash and a 400 million euro ($547 million) European Investment Bank (EIB) loan.

Saab produced just 20,791 cars last year as sales slumped to 39,903 from 94,751 in 2008, but aims to raise production to pre-crisis levels of about 100,000 to 125,000 within two years with the help of a new sales and distribution strategy.

EIB OKs 400 million euro loan to Saab

The European Investment Bank said on Friday it had authorized a 400 million euro ($546.9 million) loan to Saab, which is being bought by Dutch sports car maker Spyker Cars NV from U.S. parent General Motors Co.

"The EIB has confirmed the authorization to conclude the 400 million euro loan to SAAB Automobile AB ... and to conclude the guarantee agreement with the Swedish National Debt Office," the EIB said in a press release.