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short on prestige. In his view,
overcoming that is a top task for both
auto makers. (“Ford, GM Lack Prestige in Crucial European Market,”
3 April)
Executives of the two American car companies acknowledge their
European image problem. Recently, Ford’s sales and profits in the
US have improved substantially, thanks to appealing new features
and what Mr Phelan termed “startlingly good scores” in quality
reports. The next step is to replicate that performance across the
Atlantic. Jim Farley, Ford’s global sales and marketing chief, told Mr
Phelan, “That’s my main priority now.”
Mr Farley, who led Toyota’s European growth strategy in the 1990s,
said he looks to new technologies like automatic parking, road-sign
recognition, and Sync (enabling cell phones and MP3 players to
connect to the car with the touch of a button), to commend Ford
models to European buyers.
For his part, Alain Visser, sales and marketing chief at Opel, GM’s
main European brand, said, “The reality of our products is better
than the public perception.”
Just how do Opel and Ford go about convincing Europeans to
reconsider their classier latter-day offerings? Marc Beckers, a former
GM executive and managing partner of Experts 4 U, a Brussels-
based consulting firm, indicates that they will be doing battle with
ghosts.
“In the past, both companies built vehicles that were not up to
European par,” Mr Beckers told the
Free Press
. “That’s no longer
true. Today they both have their best lineups ever. They’re clearly
competitive. It’s purely a brand issue. Customers have the lingering
view that their vehicles are not among the leaders. That means
people do not aspire to owning them.”
›
Mark Phelan pointed out that GM and Ford have built cars in
Europe for more than a hundred years. They employ tens of
thousands of workers and build more than three million cars a year
there. Yet Europe was GM’s only unprofitable global region in 2010,
handing the company a $1.8bn operating loss. If the Detroit giant
breaks even in Europe this year, as it hopes to do, it will break an
11-year European streak in the red.
Ford unexpectedly lost money in Europe in the fourth quarter of last
year. It made only a small ($182mn) profit on European operations
for all of 2010, when it posted a companywide profit of $6.6bn.
According to the Detroit-based Mr Phelan, to the European sensibility
Ford is bland and generic; Opel is the gang that can’t shoot straight.
He wrote, “Regardless of how good their vehicles, design, and
technology are – and some are very good indeed – Ford of Europe
and GM’s Opel will struggle to sell cars and make money until they
change perceptions.”
Elsewhere in automotive . . .
›
Daimler, the German maker of Mercedes cars and Freightliner
trucks, said that its $1.75bn first-quarter profit was nearly double
that in the first quarter of 2010 as sales in China continued to show
big gains and the market for heavy trucks picked up. Like rivals
BMW and the Audi division of Volkswagen, Daimler’s Mercedes
car division is profiting from the enthusiasm for luxury cars among
Chinese buyers. Unit sales in China rose 82% to almost 50,000
vehicles in the quarter, the company said.
Daimler, based in Stuttgart, is an example of the success of
Germany’s export economy, which has driven unemployment to a
nearly 20-year low of 7.1%. The company said on 29 April that it had
added almost 2,700 employees in Germany since the end of March
2010, bringing the total inside the country to 164,000.
›
The Italian auto maker Fiat said on 21 April that it would spend
$1.3bn to raise its stake in Chrysler Group, of the US, to 46%.
The Turin-based company, which earlier in the month had increased
its stake to 30%, was exercising its right to acquire the additional
16% once Chrysler paid off the roughly $7bn it owes the American
and Canadian governments.
As reported in the
New York Times
, Sergio Marchionne, the chief
executive of both companies, said in a conference call with analysts
that Fiat expects to obtain an additional 5% of Chrysler this year,
raising its total to 51% and giving it “effective legal control.” Fiat
gained management control of Chrysler in 2009, when a deal with
the Obama administration gave it a 20% stake in the foundering US
company in exchange for technology and financial aid.
Steel
›
Reporting from the SteelOrbis/IREPAS 2011 conference
in Hong Kong for
Platts
, the provider of global energy and
metals information, Annalisa Jeffries quoted an executive of a
Turkish steel maker as saying that local demand for steel billet
in Turkey, Russia and Ukraine is limiting its availability for export
from the Black Sea region. Relaying information from a billet
suppliers’ committee meeting at the conference, Ugur Dalbeler
of the steel producer Colakoglu Metalurjl said on 12 April that
Ukrainian billet supplies had dropped from 550,000 to 450,000
metric tons per month, with a similar drop recorded in Russia.
Yusuf Guven, with Helveco Intertrade, reported from the raw
materials committee meeting that Russian scrap supplies had
also gone down.
›
Ford Motor Co has urged the US International Trade
Commission to lift antidumping duties on hot-rolled steel from
Brazil, Japan and Russia. The agency imposed the tariffs in 1999
and renewed them in 2005. As reported by the
Detroit News
, Paul
Vandevert, international trade counsel for Ford, said the company’s
partnership with US steel producers is critical to its future. He told an
ITC panel in Washington (7 April), “If we are going to succeed, our
suppliers, including our steel suppliers, must provide us with the best
in materials and parts.”
Other metals . . .
›
Brazil’s installed aluminium capacity has dropped 10% since
2005 due to the high cost of electric power in the country. As
a result, according to the trade group Associação Brasileira do
Alumínio, primary aluminium production fell 4.8% to 234,100 tons
in January and February compared with the same two-month period
of 2010. Companies operating in other energy-intensive sectors are
shutting down, according to ABAL’s energy coordinator, Eduardo
Spalding.