Honda trips in China with 'mistake' Accord

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Honda's sales in China rose 11 percent in the first five months of the year, about in line with overall auto-sales growth in the country, powered largely by less-expensive models.

Ma Jie

Yuki Hagiwara

Bloomberg

June 28, 2014 - 12:01 am ET

TOKYO -- Honda Motor Co. was so confident the new Accord would be a superstar in China last year that it released an exclusive 3-liter version with a flashy grille and a price tag to rival Volkswagen AG's Audi A4 luxury sedan.

The results weren't so stellar.

Deliveries of the vehicle that Honda predicted would drive its revival in the world's largest automobile market fell 37 percent in the first five months of this year.

The Accord -- which until three years ago was the top-selling midsized sedan in China -- dropped to as low as No. 9, in April, as VW's Passat and Magotan models took the top slots.

In late February, Honda pushed out a stripped-down Accord that started at about 180,000 yuan ($29,000), compared with more than 200,000 for earlier versions. Sales still sagged. \

"We've already lost faith in it," said Liu Yefei, who runs a Honda dealership in Shanghai. "Honda tried to focus on the higher-end version from the beginning, but they underestimated people's desire for German cars."

The Accord's struggles illustrate the challenges Japanese automakers face nearly two years after Chinese protesters torched Honda and Toyota Motor Corp. dealerships and damaged Japanese-branded cars amid a territorial dispute.

While sales have rebounded among lower-priced Japanese cars, German brands have strengthened their position among high-end models.

Rows of Audis

German cars enjoy a unique cachet in China, where it's common to see rows of black Audis -- China's top-selling premium brand -- parked outside government agencies or state-run enterprises' offices.

As German brands have introduced more affordable models, the sales of mid-sized Japanese sedans have slid further, dealing a blow to Japanese makers that have counted on mid-sized sedans to be big moneymakers in China.

"Accord is having a tough time being sandwiched by premium brands and the lower-end brands," said Koji Endo, a Tokyo-based analyst with Advanced Research Japan.

Because the Accord is one of the most profitable models in China, he said, its slump could affect Honda's earnings.

"To make money, they have to sell more Accords," he said.

Honda spokeswoman Akemi Ando said the Accord models recently introduced in China were "a bit expensive" at first. "With the launch of the cheaper 2-liter version, you will see our sales rebounding in the next one or two months," she said by telephone.



The Accord's struggles illustrate the challenges Japanese automakers face nearly two years after Chinese protesters torched Honda and Toyota dealerships and damaged Japanese-branded cars amid a territorial dispute.

Misjudging customers

Seiji Kuraishi, the managing officer for Honda's China business, said in April that the company had sought to compete with European and U.S. carmakers.

"We realized it was a mistake that we didn't understand customer needs well and didn't have anything below 200,000 yuan," Kuraishi said.



Overall, Honda's sales in China rose 11 percent in the first five months of the year, about in line with overall auto-sales growth in the country, powered largely by less-expensive models.

Honda's growth pace trailed that of Toyota and Nissan, and lagged Honda's own 19 percent full-year growth target. China sales are expected to make up 19 percent of Honda's global sales this year.

Five-year fall

Five years ago, the Accord, Toyota Camry and Nissan Motor Co.'s Altima -- called the Teana in China -- represented four of every 10 midsized sedans sold there, according to LMC Automotive.

By last year, as rivals like the Volkswagen Passat came on strong, the combined share fell to about two in 10. The Accord's market share fell to 6 percent last year, from 18 percent in 2008. Over the same period, the Camry's share declined to 9 percent from 16 percent. Nissan's Teana has a 6 percent share, down from 10 percent in 2010 and 2011.

"For people with a budget of 200,000 yuan, why would they stick with the Japanese when there are so many other options?" said Zhu Bin, a Shanghai-based analyst for LMC.

This year, Audi began selling its basic A3 for just below 200,000 yuan. Previously, only Audi's smaller A1 had been priced there. Zheng Fangbing, a 28-year-old Beijing resident who works for a securities brokerage, said price wasn't a factor when she chose a 260,000-yuan A4 over an Accord in February.

Beyond flash

"We chose Audi because the brand appears more 'gao da shang'," said Zheng, using slang that implies high quality rather than just a flashy brand name. "Also, we were afraid that if we buy Japanese, it would be smashed if anti-Japan protests broke out again."

When Honda brought the ninth-generation Accord to China last year, the company expressed confidence it could compete with the A4 and the VW Passat.

The new Accord would be a "blockbuster," Yu Liang, Guangqi Honda's deputy general manager, said at the time of the September rollout.

"It will become a superstar and a source to power Guangqi Honda's strong revival," Yu said, according to a news release.

The initial 2-liter version Honda introduced started at 206,800 yuan, exceeding the Camry's 180,000 yuan starting price and the Teana's 190,000 yuan. The 3-liter variant Honda unveiled for the China market went for as much as 298,000 yuan.

Honda put most of its focus on marketing an Accord with a 2.4-liter engine that WardsAuto selected as one of the best 10 last year.

Growth goals

In late February, Honda introduced a 2-liter Accord priced more in line with its Japanese peers. As of April, the latest month for which comparisons are available, 20,600 Accords had sold, compared with 53,200 Camrys and 40,900 Audi A4s. VW's Passat and Magotan had deliveries of 99,300 and 74,900, respectively.

Honda maintains its goal of selling 900,000 cars this year and doubling annual sales in China to 1.3 million units in the three years through 2015. It plans to introduce 12 new models during that time. Much of that will depend on the success of more affordable models such as the new Crider compact sedan and the Fit, introduced in late May.

Honda is seeking to regroup against the backdrop of a two-year diplomatic freeze that began after the Japanese government purchased three of the five disputed Senkaku, or Diaoyu, islands in the East China Sea. The dispute still colors consumers' attitudes about Japanese brands, said Liu, the Shanghai Honda dealer.

"This is not reflected on the surface anymore," Liu said. "But it affects people's decision when they choose a brand and this impact won't go away easily."

Contact Automotive News

http://www.autonews.com/article/20140628/GLOBAL03/306289998/honda-trips-in-china-with-mistake-accord

Honda recalls nearly 2m cars in airbag scare

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Honda to recall 2m cars globally over airbags. Photograph: Money Sharma/EPA

Honda has recalled 1.8m cars around the world after a scare over an airbag in another manufacturer's vehicle but made by its supplier Takata.

The Japanese company said the recall covered five models made between 2001 and 2003 in the UK: the Accord, Civic, CR-V, Jazz and Stream. In Europe, 154,000 cars are affected and 45,000 of those are in the UK.

A spokeswoman said: "We have been advised by our airbag supplier that there had been an incident with an airbag in another manufacturer's vehicle."

If the airbag is inflated, excessive pressure could cause "small amounts of metal fragments" to hit the windscreen or the footwell, Honda said. The potential problem was not covered by two previous recalls in 2010 and 2013.

Nissan, Honda's Japanese rival, was also reported to have recalled 755,000 cars globally on Monday. Toyota announced a recall earlier this month.

Japan's three biggest carmakers have recalled more than 5m vehicles this month as scrutiny of potential safety flaws rises in the industry. Honda, Takata's biggest customer, has called back a total of 6m vehicles for problems with Takata air bags in nine recalls since 2008, according to the business news site Bloomberg.



http://www.theguardian.com/business/2014/jun/23/honda-recalls-2m-cars-airbag-scare

China's GAC set to export Trumpchi line to U.S., exec says

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GAC, which operates manufacturing joint ventures in China with Toyota and Fiat, started the Trumpchi brand in 2010.

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June 26, 2014 - 12:34 pm ET

BEIJING (Bloomberg) -- The China-made SUV shown in the latest Transformers movie may hit U.S. showrooms as early as next year, testing demand by American consumers for Chinese autos.

Guangzhou Automobile Group Co. plans to start exporting models including the Trumpchi GS5 featured in "Transformers: Age of Extinction" to the United States, according to Wu Song, head of the Trumpchi brand.



The carmaker, which operates manufacturing joint ventures with Toyota Motor Corp. and Fiat SpA, started the marque in 2010.

"Our sponsorship of Transformers 4 will help more overseas dealers and consumers know about our cars and over the long run it will greatly contribute to our branding," Wu said in an interview Thursday. "We want to start exporting to the U.S. as quickly as possible and I am confident that they will find our Trumpchi cars competitive."

Guangzhou Auto joins BYD Co., Geely Automobile Holdings and Great Wall Motor Co. among Chinese automakers with ambitions to crack the U.S. market.



The Trumpchi E-jet, a plug-in electric hybrid developed by state-owned GAC.

They're seeking to challenge General Motors and Ford Motor Co. to burnish their own standing back home in China, where local Chinese brands are losing market share to foreign nameplates.

The film, which features Mark Wahlberg, is predicted to rank among the biggest-grossing of the year with U.S. ticket revenue projected at $265 million by BoxOffice.com.

The automaker was approached to participate in the fourth installment of the Transformers movie franchise after director Michael Bay saw the Trumpchi E-Jet electric car at an auto show, Wu said.

Guangzhou Auto currently exports its Trumpchi vehicles to the Middle East, South America and Russia.

Demand for the brand has exceeded expectations, with total sales projected to reach 135,000 units this year versus an earlier target of 115,000 vehicles, Wu said.

"Transformers: Age of Extinction" will be shown in China theaters starting Friday.

Contact Automotive News

http://www.autonews.com/article/20140626/GLOBAL03/306269949/chinas-gac-set-to-export-trumpchi-line-to-u-s-exec-says

GM boss grilled by Congress as panel chairman claims cover-up at auto giant

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General Motors boss Mary Barra was grilled again by Congress on Wednesday as the chairman of the House committee investigating its fatal ignition switch scandal said he continued to believe there had been a cover-up at the car giant.

Members of the House energy and commerce subcommittee said there was evidence that whistleblowers were afraid to speak up in the company, and that the warnings of those who did speak out were ignored.



Chairman Tim Murphy, Republican from Pennsylvania, said: “I remain unconvinced there wasn't an effort to cover up bad decisions to avoid liability.”

He said GM’s own report into the scandal had identified “the GM nod and the GM salute â€" people look to others to do something, but no one accepts responsibility.”

GM has fired 15 people over the issue, which took a decade to be resolved and is linked to 13 deaths. But “99.999% of the people are the same,” said Murphy.

“A culture that allowed safety problems to fester for years will be hard to change,” he said. “The system failed and people died and it could have been prevented.”

Attorney Anton Valukas, who compiled GM’s report, also testified at the hearing. He said his report had uncovered serious cultural issues within the company that had led to the ignition issues. He said it had taken a lawyer representing a victim of the ignition issue to do a “simple thing” like compare two switches to find that GM had changed a faulty part without notifying anyone.

“No one goes back to review previous decisions,” he said.

GM has recalled 20m cars so far this year. The committee is investigating the recall of millions of Cobalts and other smaller cars where a fault with the ignition switch led to car engines switching off while in motion, a fault that also disabled airbags.



The company had operated in silos, information was not shared, Valukas said. There were circumstances where employees showed “sensitivity to the word ‘stalls’ and would stay away from using words that would force people to ask hard questions.”

But Valukas said his investigation had found no specific evidence of a cover-up. He said his firm, Jenner & Block, had been given “unfettered access” to GM employees and files, had conducted 350 interviews and reviewed 41m documents. Investigators had looked at whether people took steps to conceal what they knew from other individuals.

“Does a corporate culture of carelessness where life-saving information sits in boxes … is that not a cover-up?” asked Murphy.

“We did not find that,” Valuskas said.

Barra once again apologised for the fiasco, and said “the men and women of GM, the vast majority, come to work every day and want to do a good job … they want to do the right thing.”

But committee members seemed unconvinced. Diana DeGette, the top Democrat on the subcommittee, said Valukas’s report "does not answer the key questions".

“The report singles out many individuals at GM who made poor decisions or failed to act, but it doesn't identify one individual in positions of high leadership who was responsible for these systemic failures," she said.

http://www.theguardian.com/business/2014/jun/18/gm-boss-mary-barra-congress-ignition-switch-scandal

Chrysler investigated for faulty ignition switches alongside GM inquiry

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Problems with vehicle ignition switches have drawn US safety regulators to investigate a second Detroit automaker, Chrysler Group, even as General Motors' chief executive Mary Barra was providing US lawmakers on Wednesday with more details on GM's ongoing switch issues.

Chrysler is the subject of two investigations involving possible nondeployment of airbags because of potentially defective switches that can be turned off in more than 1.2m older Jeep, Dodge and Chrysler models, according to the National Highway Traffic Safety Administration (NHTSA). No deaths or injuries have been reported, NHTSA said.

NHTSA, which administers safety recalls, continues to investigate similar issues at GM, which this year has recalled more than 20m vehicles worldwide, including 6.5m for switch-related issues that could disable airbags in crashes.

The new Chrysler investigations suggest that issues with faulty ignition switches that could cause airbags to fail may be more widespread than once believed and eventually could touch other vehicle manufacturers besides GM and Chrysler.

The safety agency on Wednesday said the Chrysler probes resulted from NHTSA's recent "communication with automotive manufacturers and suppliers regarding airbag design and performance related to the position of the vehicle ignition switch".

It added: "As part of NHTSA's broader efforts to evaluate this issue, the agency examined all major manufacturers' airbag deployment strategies as they relate to switch position."



NHTSA's acting administrator, David Friedman, earlier this year told lawmakers that, prior to GM's recall of the Chevrolet Cobalt and Saturn Ion, the agency did not fully understand the link between the cars' ignition switch and the ability of the air bags to deploy in a crash.

The agency said it had received complaints of engine stalling in the Chrysler models, but was not aware of any incidents where the air bags did not deploy.

Chrysler, a unit of Fiat Chrysler Automobiles, said it was "awaiting additional information" from NHTSA and would cooperate fully with the investigations.

A chassis assembly line supervisor on the assembly line at the Chrysler Jefferson North Assembly plant in Detroit. Photograph: Paul Sancya/AP

German automaker Daimler AG, Chrysler's previous owner, said on Wednesday it was not affected by the NHTSA investigations of Chrysler switches.

One of the NHTSA investigations of Chrysler, involving about 525,000 Jeep SUVs made between 2005 and 2007, focuses on complaints about switches that can be bumped by a driver's knee to the "off" or accessory position, turning off the engine and potentially disabling air bags in a frontal crash.

GM cited similar issues in several of its switch-related recalls, including 2.6m Cobalts, Ions and other cars linked to at least 13 deaths.

NHTSA also is investigating about 700,000 Chrysler Town & Country and Dodge Grand Caravan minivans and Dodge Journey crossovers from model years 2008-2010 for complaints about switches that can be turned off when driving on rough roads, which could prevent airbags from deploying in a crash.

In March 2011, Chrysler recalled 2010 Grand Caravan, Town & Country and Journey models for "inadvertent ignition key rotation".

NHTSA said it opened the latest recall query "to assess the scope and effectiveness" of the previous recall, and determine whether the recall should be extended to 2008-2009 models.

Owners of even earlier models have complained of similar problems.

In a complaint filed in March with NHTSA, the driver of a 2006 Chrysler Town & Country wrote: "Ignition switch shuts off while driving and engine stops running. Possible from bumps in road or bumping key ring with driver's knee. Has happened more than three times."

GM on Monday recalled 3.4m older mid-size and full-size sedans, including the Chevrolet Impala and the Cadillac DeVille, saying the switches on those cars could be bumped out of the run position by a combination of heavy key chains and rough roads.

In addition, GM last Friday recalled 511,528 Chevrolet Camaros from 2010-2014 because a driver's knee could bump the key fob out of the run position and turn off the engine.

GM's Barra returned before a House Energy and Commerce subcommittee on Wednesday to face harsh questions about why the No1 US automaker waited more than a decade to recall millions of vehicles with the defect linked to at least 13 deaths. Barra, who became CEO only in January but is a GM veteran of more than 30 years, has said she did not become aware of the problem until December 2013.

http://www.theguardian.com/business/2014/jun/18/chrysler-gm-faulty-ignition-switch-investigation-recall

Honda recalls nearly 2m cars in airbag scare

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Honda to recall 2m cars globally over airbags. Photograph: Money Sharma/EPA

Honda has recalled 1.8m cars around the world after a scare over an airbag in another manufacturer's vehicle but made by its supplier Takata.

The Japanese company said the recall covered five models made between 2001 and 2003 in the UK: the Accord, Civic, CR-V, Jazz and Stream. In Europe, 154,000 cars are affected and 45,000 of those are in the UK.



A spokeswoman said: "We have been advised by our airbag supplier that there had been an incident with an airbag in another manufacturer's vehicle."

If the airbag is inflated, excessive pressure could cause "small amounts of metal fragments" to hit the windscreen or the footwell, Honda said. The potential problem was not covered by two previous recalls in 2010 and 2013.

Nissan, Honda's Japanese rival, was also reported to have recalled 755,000 cars globally on Monday. Toyota announced a recall earlier this month.

Japan's three biggest carmakers have recalled more than 5m vehicles this month as scrutiny of potential safety flaws rises in the industry. Honda, Takata's biggest customer, has called back a total of 6m vehicles for problems with Takata air bags in nine recalls since 2008, according to the business news site Bloomberg.



http://www.theguardian.com/business/2014/jun/23/honda-recalls-2m-cars-airbag-scare

Chrysler investigated for faulty ignition switches alongside GM inquiry

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Problems with vehicle ignition switches have drawn US safety regulators to investigate a second Detroit automaker, Chrysler Group, even as General Motors' chief executive Mary Barra was providing US lawmakers on Wednesday with more details on GM's ongoing switch issues.

Chrysler is the subject of two investigations involving possible nondeployment of airbags because of potentially defective switches that can be turned off in more than 1.2m older Jeep, Dodge and Chrysler models, according to the National Highway Traffic Safety Administration (NHTSA). No deaths or injuries have been reported, NHTSA said.



NHTSA, which administers safety recalls, continues to investigate similar issues at GM, which this year has recalled more than 20m vehicles worldwide, including 6.5m for switch-related issues that could disable airbags in crashes.

The new Chrysler investigations suggest that issues with faulty ignition switches that could cause airbags to fail may be more widespread than once believed and eventually could touch other vehicle manufacturers besides GM and Chrysler.

The safety agency on Wednesday said the Chrysler probes resulted from NHTSA's recent "communication with automotive manufacturers and suppliers regarding airbag design and performance related to the position of the vehicle ignition switch".

It added: "As part of NHTSA's broader efforts to evaluate this issue, the agency examined all major manufacturers' airbag deployment strategies as they relate to switch position."

NHTSA's acting administrator, David Friedman, earlier this year told lawmakers that, prior to GM's recall of the Chevrolet Cobalt and Saturn Ion, the agency did not fully understand the link between the cars' ignition switch and the ability of the air bags to deploy in a crash.

The agency said it had received complaints of engine stalling in the Chrysler models, but was not aware of any incidents where the air bags did not deploy.

Chrysler, a unit of Fiat Chrysler Automobiles, said it was "awaiting additional information" from NHTSA and would cooperate fully with the investigations.

A chassis assembly line supervisor on the assembly line at the Chrysler Jefferson North Assembly plant in Detroit. Photograph: Paul Sancya/AP

German automaker Daimler AG, Chrysler's previous owner, said on Wednesday it was not affected by the NHTSA investigations of Chrysler switches.

One of the NHTSA investigations of Chrysler, involving about 525,000 Jeep SUVs made between 2005 and 2007, focuses on complaints about switches that can be bumped by a driver's knee to the "off" or accessory position, turning off the engine and potentially disabling air bags in a frontal crash.

GM cited similar issues in several of its switch-related recalls, including 2.6m Cobalts, Ions and other cars linked to at least 13 deaths.

NHTSA also is investigating about 700,000 Chrysler Town & Country and Dodge Grand Caravan minivans and Dodge Journey crossovers from model years 2008-2010 for complaints about switches that can be turned off when driving on rough roads, which could prevent airbags from deploying in a crash.

In March 2011, Chrysler recalled 2010 Grand Caravan, Town & Country and Journey models for "inadvertent ignition key rotation".

NHTSA said it opened the latest recall query "to assess the scope and effectiveness" of the previous recall, and determine whether the recall should be extended to 2008-2009 models.

Owners of even earlier models have complained of similar problems.

In a complaint filed in March with NHTSA, the driver of a 2006 Chrysler Town & Country wrote: "Ignition switch shuts off while driving and engine stops running. Possible from bumps in road or bumping key ring with driver's knee. Has happened more than three times."

GM on Monday recalled 3.4m older mid-size and full-size sedans, including the Chevrolet Impala and the Cadillac DeVille, saying the switches on those cars could be bumped out of the run position by a combination of heavy key chains and rough roads.

In addition, GM last Friday recalled 511,528 Chevrolet Camaros from 2010-2014 because a driver's knee could bump the key fob out of the run position and turn off the engine.

GM's Barra returned before a House Energy and Commerce subcommittee on Wednesday to face harsh questions about why the No1 US automaker waited more than a decade to recall millions of vehicles with the defect linked to at least 13 deaths. Barra, who became CEO only in January but is a GM veteran of more than 30 years, has said she did not become aware of the problem until December 2013.

http://www.theguardian.com/business/2014/jun/18/chrysler-gm-faulty-ignition-switch-investigation-recall

Chrysler investigated for faulty ignition switches alongside GM inquiry

Prepared for some even more vehicle information? We have an excellent article today that you ought to really review. Stay up to this day with all vehicle related info and car transport news right here.



Problems with vehicle ignition switches have drawn US safety regulators to investigate a second Detroit automaker, Chrysler Group, even as General Motors' chief executive Mary Barra was providing US lawmakers on Wednesday with more details on GM's ongoing switch issues.

Chrysler is the subject of two investigations involving possible nondeployment of airbags because of potentially defective switches that can be turned off in more than 1.2m older Jeep, Dodge and Chrysler models, according to the National Highway Traffic Safety Administration (NHTSA). No deaths or injuries have been reported, NHTSA said.

NHTSA, which administers safety recalls, continues to investigate similar issues at GM, which this year has recalled more than 20m vehicles worldwide, including 6.5m for switch-related issues that could disable airbags in crashes.

The new Chrysler investigations suggest that issues with faulty ignition switches that could cause airbags to fail may be more widespread than once believed and eventually could touch other vehicle manufacturers besides GM and Chrysler.

The safety agency on Wednesday said the Chrysler probes resulted from NHTSA's recent "communication with automotive manufacturers and suppliers regarding airbag design and performance related to the position of the vehicle ignition switch".

It added: "As part of NHTSA's broader efforts to evaluate this issue, the agency examined all major manufacturers' airbag deployment strategies as they relate to switch position."

NHTSA's acting administrator, David Friedman, earlier this year told lawmakers that, prior to GM's recall of the Chevrolet Cobalt and Saturn Ion, the agency did not fully understand the link between the cars' ignition switch and the ability of the air bags to deploy in a crash.

The agency said it had received complaints of engine stalling in the Chrysler models, but was not aware of any incidents where the air bags did not deploy.

Chrysler, a unit of Fiat Chrysler Automobiles, said it was "awaiting additional information" from NHTSA and would cooperate fully with the investigations.

A chassis assembly line supervisor on the assembly line at the Chrysler Jefferson North Assembly plant in Detroit. Photograph: Paul Sancya/AP

German automaker Daimler AG, Chrysler's previous owner, said on Wednesday it was not affected by the NHTSA investigations of Chrysler switches.

One of the NHTSA investigations of Chrysler, involving about 525,000 Jeep SUVs made between 2005 and 2007, focuses on complaints about switches that can be bumped by a driver's knee to the "off" or accessory position, turning off the engine and potentially disabling air bags in a frontal crash.

GM cited similar issues in several of its switch-related recalls, including 2.6m Cobalts, Ions and other cars linked to at least 13 deaths.

NHTSA also is investigating about 700,000 Chrysler Town & Country and Dodge Grand Caravan minivans and Dodge Journey crossovers from model years 2008-2010 for complaints about switches that can be turned off when driving on rough roads, which could prevent airbags from deploying in a crash.

In March 2011, Chrysler recalled 2010 Grand Caravan, Town & Country and Journey models for "inadvertent ignition key rotation".

NHTSA said it opened the latest recall query "to assess the scope and effectiveness" of the previous recall, and determine whether the recall should be extended to 2008-2009 models.

Owners of even earlier models have complained of similar problems.

In a complaint filed in March with NHTSA, the driver of a 2006 Chrysler Town & Country wrote: "Ignition switch shuts off while driving and engine stops running. Possible from bumps in road or bumping key ring with driver's knee. Has happened more than three times."

GM on Monday recalled 3.4m older mid-size and full-size sedans, including the Chevrolet Impala and the Cadillac DeVille, saying the switches on those cars could be bumped out of the run position by a combination of heavy key chains and rough roads.

In addition, GM last Friday recalled 511,528 Chevrolet Camaros from 2010-2014 because a driver's knee could bump the key fob out of the run position and turn off the engine.

GM's Barra returned before a House Energy and Commerce subcommittee on Wednesday to face harsh questions about why the No1 US automaker waited more than a decade to recall millions of vehicles with the defect linked to at least 13 deaths. Barra, who became CEO only in January but is a GM veteran of more than 30 years, has said she did not become aware of the problem until December 2013.

http://www.theguardian.com/business/2014/jun/18/chrysler-gm-faulty-ignition-switch-investigation-recall

Audi has blueprints for range of high-performance electric cars

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Production of the electric Audi R8 will be strictly tailored to demand. But the firm has also drawn up blueprints for several high-performance vehicles. Photograph: Martyn Goddard/Corbis

Audi has drawn up blueprints for a range of high-performance electric cars to take on US firm Tesla Motors, according to sources at the German carmaker.



Consumers have largely shunned battery-powered vehicles because of their high price tags and limited driving range as well as the scarcity of charging stations. But many analysts predict sales will rise sharply by the end of the decade.

Tesla has managed to stay ahead of the pack with new technology that has extended driving range and reduced costs. Its success and the excitement about BMW's new "i" electric series have caught the attention of Audi, which some analysts have said risks looking like a laggard in an industry where innovation is a big draw for customers.

Audi, a unit of Volkswagen, is about to launch its first purely electric car, a battery-powered version of its R8 supercar, which is due to hit European dealerships in 2015 and will offer a range of 280 miles. This is close to the 312-mile range of Tesla's top-selling Model S luxury saloon.

Production of the electric R8 will be strictly tailored to demand. However, Audi has also drawn up blueprints for several high-performance electric saloons and sport-utility vehicles, two company sources told Reuters, asking not to be identified because the matter is confidential.

http://www.theguardian.com/business/2014/jun/19/audi-high-performance-electric-cars-tesla-r8-supercar

Denso makes changes in North American executive management

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DETROIT -- Toyota-affiliated supplier Denso Corp. said Sadahiro “Sam” Usui is the new chairman and CEO of its North American unit based in suburban Detroit. 



Usui replaces Hikaru "Howard" Sugi in the position. Sugi is retiring after heading Denso International America Inc. for the past three years.

Usui will also continue to serve as an executive director of the Japanese parent. He previously served as the Denso Corp.’s managing officer for its engine electrical systems planning department and nonexecutive director of Denso India Ltd.

Kazumasa Kimura, Denson International’s COO, has also been promoted to president and will oversee the firm’s automaker customers in the Americas.

Doug Patton, chief technology officer for Denso International, has been promoted to executive vice president and CTO and will oversee the company’s research and development operations. Effective July 1, Patton will also become a senior director of Denso Corp.

Denso ranks No. 2 on the Automotive News list of the top 100 global suppliers with estimated worldwide sales to automakers of $35.85 billion during its 2013 fiscal year.

You can reach Dustin Walsh at dwalsh@crain.com.

http://www.autonews.com/article/20140619/OEM10/140619837/denso-makes-changes-in-north-american-executive-management

Lawsuit says GM owners owed around $10 billion in lost value after recalls

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June 18, 2014 - 2:39 pm ET

RIVERSIDE, Calif. (Reuters) -- A new lawsuit says General Motors should compensate millions of car and truck owners for lost resale value, potentially exceeding $10 billion, because a slew of recalls and a deadly delay in recalling cars with defective ignition switches has damaged its brand.

According to a complaint filed today with a federal court in Riverside, Calif., GM hurt customers by concealing known defects and valuing cost-cutting over safety, leading to roughly 40 recalls covering more than 20 million vehicles this year alone.

It said this has caused a variety of late-model vehicles to lose roughly $500 to $2,600 in resale value.

Hagens Berman Sobol Shapiro, which filed the lawsuit, said the case could be worth more than $10 billion, and is the first seeking to force GM to pay a potential 15 million car and truck owners, not just those whose vehicles were recalled, for damage to its brand and reputation.

A GM spokesman, Greg Martin, declined to comment on the lawsuit. He said that many customers and analysts recognized the strength of the GM brand and that the market recognition has resulted in increased sales, transaction prices and residual values.

The lawsuit painted a "disturbing picture" of GM's approach to safety, including how "in truly Orwellian fashion" the largest U.S. automaker would encourage employees to avoid words such as "bad" and "failed," and use euphemisms such as "issue" or "condition" rather than "problem" when discussing defects.

"GM's egregious and widely publicized conduct and the never-ending and piecemeal nature of GM's recalls has so tarnished the affected vehicles that no reasonable consumer would have paid the price they did when the GM brand meant safety and success," the complaint said.

The plaintiff is Anna Andrews, a resident of La Quinta, Calif. She said she would not have bought her used 2010 Buick LaCrosse, or would have paid less for it, had GM done a better job of disclosing vehicle defects.

Her lawsuit seeks class-action status for people who owned or leased GM vehicles sold between July 10, 2009, and April 1, 2014, or who later sold such vehicles at cut-rate prices.

Vehicles affected by the earlier ignition-switch recalls are not included in the lawsuit. Thirteen deaths have been linked to those vehicles.

Contact Automotive News

http://www.autonews.com/article/20140618/OEM11/140619854/lawsuit-says-gm-owners-owed-around-10-billion-in-lost-value-after

Volvo to export China-made cars to U.S., Russia next year, report says

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A sedan under assembly at Volvo's new plant in Chengdu, China in June 2013.

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June 17, 2014 - 5:26 am ET -- UPDATED: 6/17/14 12:13 pm ET -- adds background

BEIJING (Reuters) -- Volvo, with help from its Chinese owner Zhejiang Geely Holding Group, plans to start exporting Chinese-made cars to the United States and Russia as early as next year, said a Volvo executive, who requested anonymity because he is not authorized to speak with the media.

The senior executive said the automaker would start exporting a long-wheel-based version of the S60 called the S60L, to the United States and the XC90 SUV to Russia as early as the end of next year. Volvo will eventually export about 10,000 S60Ls and a few thousand XC90s each year, the executive said.

Volvo felt it could minimize foreign exchange risks by adding China as a production base, despite consumer concerns about the quality of made-in-China products, the executive said.

"The dollar and the yuan have the best relationship, a more stable relationship than the euro and the dollar," he said.

Volvo's global head of media relations David Ibison confirmed that the company would start exporting from China although he said the timing and target markets had yet to be decided.

Volvo CEO Hakan Samuelsson told the Automotive News World Congress in January that Volvos produced in China will be exported to the United States "fairly quickly."

Volvo aims to use two assembly plants in China to export to the United States, Russia and possibly other markets such as Southeast Asia. One plant in the southwestern city of Chengdu began producing the S60L sedan late last year, and the second is ramping up production of the XC90 in the northeastern city of Daqing.



Volvo would become the first major automaker to sell a Chinese-built light vehicle in the United States.

Honda Motor Co. sold Chinese-built Fit subcompacts in Canada for several years before the recent opening of an assembly plant in Mexico to build a redesigned Fit.

Geely’s Volvo strategy

Geely's strategy for Volvo is being closely watched as a possible model for other Chinese companies that have had limited success digesting and managing major consumer brands, following multi-billion-dollar foreign acquisitions in recent years. Geely's purchase of Volvo from Ford Motor Co. four years ago surprised many in the auto industry, who doubted that a relative newcomer could turn around the money-losing 87-year-old Swedish business while protecting its famous brand.

Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight, said Volvo's outlook under the ownership of Geely and its founding chairman Li Shufu now looked "impressive," as Chinese demand for entry-level luxury cars soared. "Chairman Li has been so patient with Volvo and it's finally paying off," he said.

Investors in other Chinese firms that are struggling to manage foreign consumer brands are intensely interested in how Li, dubbed the Henry Ford of China, handles Volvo. Lenovo Group Ltd., for example, had trouble maintaining market share for years after its 2005 purchase of IBM's personal computer business. Another Chinese carmaker, SAIC Motor Corp, which bought roughly half of South Korea's Ssangyong Motor Co. in 2004 was forced to sell its stake after Ssangyong's business slumped in the wake of the financial crisis of 2008.

China sales boost

The executive said Volvo sales in China were likely to jump by almost 50 percent on-year to more than 90,000 vehicles in 2014, making the country its biggest market ahead of the United States. That is well above the 80,000 cars Volvo initially projected to sell this year.

Ibison said that although Volvo's China sales had grown 35 percent year-on-year so far this year, selling 90,000 cars in 2014 could be "a step too far." The carmaker's focus is to make sure "our growth is profitable and sustainable," he said.

The company sold a total of 61,146 vehicles in China last year, up 46 percent from 2012. This was just 77 vehicles behind deliveries in the United States, which dropped 10 percent to 61,223.

"We are satisfied with the progress we've made so far in China," the executive said. Volvo's two plants in China should be able to achieve full capacity of about 250,000 vehicles a year by about 2018, helping to drive domestic sales, he added.

Contact Automotive News

http://www.autonews.com/article/20140617/COPY01/306179978/volvo-to-export-china-made-cars-to-u-s-russia-next-year-report-says

GM to announce more recalls as CEO ends firings over scandal

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General Motors plans no more employee dismissals relating to the company's handling of a defective ignition switch linked to at least 13 deaths, chief executive Mary Barra said on Tuesday.

"We feel we've taken the appropriate actions as it relates to the ignition switch recall," Barra told reporters ahead of an annual shareholders meeting, when asked whether GM would dismiss or discipline any more staff for the company's poor handling of the faulty part.



Since early this year, the Detroit automaker has been enveloped in a scandal over why it took more than a decade to begin recalling low-cost Chevrolet Cobalts, Saturn Ions and other cars with ignition-switch problems that were causing them to stall during operation.

When those engines stalled, air bags failed to deploy during crashes â€" some of them fatal â€" and drivers struggled to control their vehicles as power steering and brake systems malfunctioned.



GM fired 15 employees last week and another five were disciplined due to their handling of the switch recall. The company announced the departures along with the results of an internal probe.

Speaking to just 29 shareholders at the company's headquarters on Tuesday, Barra reiterated that GM would announce "a few more recalls" in the near term.

Chairman Tim Solso said Tuesday the board of directors had complete confidence in Barra and her team to lead the company.

No shareholder brought up the recall during the meeting, which lasted about 20 minutes.

The company has said all recalls so far this year would cost it $1.7bn. GM previously said an immaterial amount of additional costs would be accounted for in the second quarter.

Barra said the report on the internal investigation would be a fulcrum for change.

"It's not about putting behind us, it's about using the learnings and the failing that we had, to make sure that we improve the whole development process and the culture, which we're continuing to work on," she said.

The company has said it will set up a fund to compensate victims and the families of victims of crashes that were linked to the faulty switches. Fund administrator Kenneth Feinberg will determine the number of deaths linked to the switches and the amount of compensation.

Barra said last week that of the 15 dismissed, "some were removed because of what we consider misconduct or incompetence. Others have been relieved because they simply didn't do enough: They didn't take responsibility [and] didn't act with any sense of urgency" to investigate the causes of fatal crashes and to inform senior management.

On 16 May, GM was slapped with a $35m fine for its delayed response to the defect, the maximum amount that can be imposed by the US Department of Transportation.

GM still faces probes by the US Congress, Department of Justice and other federal and state agencies into why it did not announce vehicle recalls to fix the problem until this past February.

http://www.theguardian.com/business/2014/jun/10/gm-recall-fired-employees-mary-barra

Move over Golf, how about a VW home power plant?

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Volkswagen car engines purr in the basement of German green power company Lichtblick’s test site in a church across the street from Berlin’s Jewish Museum.

The VW motors sit inside metal boxes adorned with meters, including one reading “how much CO2 you’ve not released by using this unit.”

It’s not the VW engines that are special â€" but the software that manipulates them from afar.

Lichtblick controls each of its 1,500 Volkswagen “home power plants” from its Hamburg headquarters. The utility â€" which says it wants to become "the Google of electricity" â€" has created an algorithm that automatically starts and stops each VW engine connected to the network based on the usage data it collects.

The system has the backing of the German government, which is pushing Lichtblick’s model â€" and a similar venture between Honda and meter maker Valliant â€" because it thinks switching to decentralised power units will make it possible to shut down its nuclear reactors by 2022.

“We are building an IT platform that connects every kind of decentralised power station â€" be it solar, wind, or these VW combined heat and power units (CHPs) â€" with every kind of market,” Nick Schalock of Lichtblick said on a recent tour.

Lichtblick’s adoption of CHP generators is not unique â€" CHP units have long been used in industry and niche operations like university campuses. But Lichtblick’s idea to partner with Germany’s most popular carmaker, and then heavily market the boilers’ green credentials at organic farmers markets nationwide, has made it the most recognisable mini-CHP option in the country.

Like much larger CHP systems, Lichtblick’s engines burn natural gas to create electricity. The waste heat from the engines is captured and used to warm water. By capturing excess heat â€" rather than simply releasing it through smokestacks into the environment, as do nuclear, coal, or natural gas plants â€" the system achieves 90% efficiency (as opposed to about 30-40% efficiency for large-scale power plants).

Lichtblick installed the first 1,000 VW units free of charge in commercial and residential dwellings in 2010. When gifting sceptical Germans new boilers wasn’t enough, the company sweetened the deal by giving users a small cut of any electricity generated in their basements.

Four years later, the business has matured to the point where Lichtblick says it can now charge users for the new systems. A three-engine system â€" suitable for a medium-sized hotel â€" costs around €50,000 (£40,000) with installation, and can be paid off in three years.

The German utility’s smart grid technology allows it to anticipate demand on the network and generate power when the price for gas is low relative to the price of electricity. One common usage scenario: your neighbour turns on their Xbox and runs their microwave every Monday, Wednesday, and Friday at 7pm. Lichtblick’s algorithm will pick up on this trend and automatically turn on the nearest micro-CHP at 6:59 pm so it can sell power to the gamer â€" if, that is, the algorithm thinks Lichtblick can make a profit doing this.

But can this model work outside Germany? It is working in markets where energy prices are high, like Japan, the world’s largest micro-CHP market with some 100,000 units. But in markets like the US, where fracking and wind energy have driven down the price of power, the case for adoption is harder (though states like California are pushing micro-CHP through a subsidies programme).

The idea might make sense in the UK, though, said Ilias Vazaios, who authored a study about the potential of micro-CHP units in the UK at the UK-based energy consulting company Ecuity. Vazaios said 1.6m boilers are changed every year in the UK. As a result, the business case for micro-CHP boilers is becoming more attractive.



“In the UK, there’s interest, including from German players,” Vazaios said. “But so far, the deployment in the UK hasn’t been significant.”

But this could soon change. One solution tailored to the UK market is the FlowBoiler made by Ipswich-based Flow Energy. Flow units capture their own waste heat and generate electricity for the home. Some 100 of the Scottish-made units have been installed in a pilot programme near Chester. Flow says it plans to begin selling its innovative boilers to the public by end of the year.

Unlike Lichtblick’s units, however, Flow units and similar systems in the UK don’t sell power back to the grid â€" yet.

“There’s a discussion about commercialising micro-CHP in the UK to aggregate these units like Lichtblick is doing in Germany,” Vazaios said. “National Grid’s short term operating reserve programme is an example. So, there may eventually be an opportunity for aggregators in the UK to generate electricity in basements the way some German providers are now doing.”

http://www.theguardian.com/environment/2014/jun/13/golf-vw-car-power-plant-germany

US auto giants pledge $26m to save Detroit's art treasures

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General Motors, Ford and Chrysler are driving into Detroit's bankruptcy reorganization by pledging $26 million to help support retiree pensions while keeping the city's art treasures off the auction block, officials announced Monday.

The money will go to the Detroit Institute of Arts as part of its $100 million commitment to what what's being called a "grand bargain" to resolve the largest public bankruptcy in US history. It's helping keep city-owned pieces in the museum off the auction block as some creditors demand they be sold to pay off some of Detroit'sbillions of dollars in debt.

Of the $26 million, $10 million will come from Ford, $6 million from Chrysler, $5 million from General Motors and $5 million from the General Motors Foundation.

"The city needs more and specifically the city needs cash," Reid Bigland, head of US sales for Chrysler, said during the announcement at the museum.

Last week, the Michigan Legislature approved sending $195 million for Detroit's two retirement systems, and Governor Rick Snyder has said he will sign the bill. A dozen foundations also have committed about $360 million toward state-appointed emergency manager Kevyn Orr's plan of adjustment, which is Detroit's roadmap through and beyond bankruptcy.



As part of the deal, the city's art museum and its assets would be transferred to a private nonprofit.

Snyder called the corporate and foundation support the "fundamental core" of Detroit's comeback, which he described as going on for a while.

"It's a fragile comeback," he said. "Our work is not done. We need to follow through."

About 2,800 city-owned artworks have been valued at between $454 million and $867 million.

Orr has said the city's debt is $18 billion or more with $5.7 billion in unfunded retiree health care and $3.5 billion in unfunded pension liabilities.

The city already has reached a deal â€" brokered by mediators â€" that would protect the art forever and limit pension cuts for approximately 30,000 retirees and city workers to no more than 4.5 percent instead of as much as 34 percent. If the retirees and employees do not support it, the money from the state, foundations and DIA pledge would be made moot and deeper pension cuts could become inevitable.

Retirees have until July 11 to vote on the city's plan. The trial on the city's case will be held this summer.

http://www.theguardian.com/world/2014/jun/09/us-auto-giants-detroit-art

GM to announce more recalls as CEO ends firings over scandal

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General Motors plans no more employee dismissals relating to the company's handling of a defective ignition switch linked to at least 13 deaths, chief executive Mary Barra said on Tuesday.

"We feel we've taken the appropriate actions as it relates to the ignition switch recall," Barra told reporters ahead of an annual shareholders meeting, when asked whether GM would dismiss or discipline any more staff for the company's poor handling of the faulty part.

Since early this year, the Detroit automaker has been enveloped in a scandal over why it took more than a decade to begin recalling low-cost Chevrolet Cobalts, Saturn Ions and other cars with ignition-switch problems that were causing them to stall during operation.

When those engines stalled, air bags failed to deploy during crashes â€" some of them fatal â€" and drivers struggled to control their vehicles as power steering and brake systems malfunctioned.

GM fired 15 employees last week and another five were disciplined due to their handling of the switch recall. The company announced the departures along with the results of an internal probe.

Speaking to just 29 shareholders at the company's headquarters on Tuesday, Barra reiterated that GM would announce "a few more recalls" in the near term.

Chairman Tim Solso said Tuesday the board of directors had complete confidence in Barra and her team to lead the company.

No shareholder brought up the recall during the meeting, which lasted about 20 minutes.



The company has said all recalls so far this year would cost it $1.7bn. GM previously said an immaterial amount of additional costs would be accounted for in the second quarter.

Barra said the report on the internal investigation would be a fulcrum for change.

"It's not about putting behind us, it's about using the learnings and the failing that we had, to make sure that we improve the whole development process and the culture, which we're continuing to work on," she said.

The company has said it will set up a fund to compensate victims and the families of victims of crashes that were linked to the faulty switches. Fund administrator Kenneth Feinberg will determine the number of deaths linked to the switches and the amount of compensation.

Barra said last week that of the 15 dismissed, "some were removed because of what we consider misconduct or incompetence. Others have been relieved because they simply didn't do enough: They didn't take responsibility [and] didn't act with any sense of urgency" to investigate the causes of fatal crashes and to inform senior management.

On 16 May, GM was slapped with a $35m fine for its delayed response to the defect, the maximum amount that can be imposed by the US Department of Transportation.

GM still faces probes by the US Congress, Department of Justice and other federal and state agencies into why it did not announce vehicle recalls to fix the problem until this past February.

http://www.theguardian.com/business/2014/jun/10/gm-recall-fired-employees-mary-barra

GM ignition-switch defect response probed by 9 states

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PRIMER

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June 12, 2014 - 10:03 am ET -- UPDATED: 6/12/14 4:22 pm ET - adds 9th state

NEW YORK (Bloomberg) -- General Motors Co.’s delayed decision to recall almost 2.6 million cars for ignition-switch defects is being investigated by attorneys general in Florida, Connecticut and at least seven more states.

GM has acknowledged 13 deaths tied to the defect, which can cut power to a vehicle’s steering and brakes and prevent air bags from deploying in a crash. Company executives were aware of the defect for at least a decade before the recall.

“We are a member of a multistate group that is looking into complaints about General Motors,” Whitney Ray, a spokesman for Florida Attorney General Pam Bondi, said Wednesday.

Attorneys general in Connecticut, Indiana, Arkansas, Illinois, Iowa, Kentucky, Louisiana and Utah are also investigating, representatives from their offices confirmed.

Federal prosecutors in Manhattan and other agencies also have been conducting a probe for the last several weeks, GM said in an April 24 report. 

The company this month fired 15 people it said played a role in the recall delay. It announced the firings immediately after releasing the results of an internal investigation led by former Chicago U.S. Attorney Anton Valukas, now chairman of the law firm Jenner & Block LLC.

GM faces about 85 federal lawsuits filed by car owners claiming their vehicles lost value as a result of the recall and more claims over injuries and deaths attributed to crashes.

Cases moved

Federal judges this week transferred the economic-loss cases filed across the nation to U.S. District Judge Jesse Furman in New York. He will preside over pretrial litigation and disclosure of evidence.

James Cain, a spokesman for GM, declined on Wednesday to comment on the state investigations, deferring to company filings and the Valukas report.

In its April filing with the U.S. Securities and Exchange Commission, GM said it was the subject of “various inquiries, investigations, subpoenas and requests for information” from the office of U.S. Attorney Preet Bharara in New York, the U.S. Congress, the National Highway Traffic Safety Administration, the SEC and one state’s attorney general.

The company said that it was cooperating fully in those probes and that they might “result in the imposition of damages, fines or civil and criminal penalties.”

Contact Automotive News

http://www.autonews.com/article/20140612/OEM11/140619951/gm-ignition-switch-defect-response-probed-by-9-states

UK car industry enjoys longest period of sales growth since 1959

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The new car market has now grown in every month since March 2012. Photograph: Gareth Fuller/PA

Britain's car industry smashed records going back to 1959 in May after another increase in sales marked the longest ever period of growth for the new car market.

The number of new cars registered in the UK rose 7.7% to 194,032 last month, which was the strongest May in a decade.

A combination of growing consumer confidence amid economic recovery, cheap finance deals, and payouts over PPI mis-selling have driven the new car market to 27 consecutive months of growth, breaking a previous record set in the late 1980s.

"The new car market has now grown in every month since March 2012 â€" the longest period of growth on record and a reflection of the UK's ever-improving economic conditions," said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), which published the figures.

UK registrations have already passed the 1m mark in 2014, rising 11.6% to 1.059m compared with the same period last year.

The bestseller in May was the Ford Fiesta, followed by the Volkswagen Golf and Vauxhall Corsa.



Hawes said new technologies and improved fuel economy, as well as competitive finance deals, were making a new car more affordable for many. However, he warned the rate of growth was likely to slow in the coming months as demand stabilises. The SMMT is forecasting a 6% rise in new car registrations in 2014 overall.

http://www.theguardian.com/business/2014/jun/05/uk-car-industry-longest-period-sale-growth-1959

GM's chief information security exec going to Target

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Brad Maiorino will be in charge of IT security at Target.

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Target Corp. said today that it hired General Motors executive Brad Maiorino as chief information security officer, a new position at the company, effective June 16.

Maiorino was the chief information security and information technology risk officer at GM. In his two years with the company, he retooled the GM’s global information system and IT risk organization.



Rich Armour, GM’s current chief planning officer for information technology, will take over for Maiorino when he leaves, the company said.

Maiorino independently chose to leave GM to take his new position at Target, a GM spokesman said.

“I am looking forward to joining the Target team and helping them continue the progress they have made to be a retail leader in information security and protection,” Maiorino said in a statement.

Target was the victim of a cyber attack late last year, in which at least 40 million credit and debit card numbers were compromised along with 70 million other pieces of customer data.

You can reach Nora Naughton at nnaughton@crain.com.

http://www.autonews.com/article/20140610/OEM02/140619979/gms-chief-information-security-exec-going-to-target

Automakers pledge $26 million to save Detroit art

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Chrysler U.S. Sales head Reid Bigland, GM product development chief Mark Reuss, and Ford Executive Vice President Joe Hinrichs pictured today in front of The Detroit Industry fresco by Mexican muralist Diego Rivera.

Photo credit: REUTERS

June 9, 2014 - 12:49 pm ET



DETROIT (Bloomberg) -- The Detroit 3 automakers said they will contribute $26 million to help save Detroit’s art masterworks from the auction block.

General Motors Co., Ford Motor Co. and Chrysler Group LLC said they will put the funds toward the settlement of the city’s record $18 billion bankruptcy. The contributions were announced at a news conference today at the Detroit Institute of Arts.

The DIA said the $26 million consists of $10 million from Ford, $5 million from GM, $5 million from the General Motors Foundation and $6 million from Chrysler.

 



“Two words describe what’s been happening in the last few months: comeback and partnership,” said Republican Gov. Rick Snyder. “This is something that’s never been done before at this scale.”

The announcement, at which the governor was joined by museum and company officials, follows a $195 million state contribution lawmakers approved last week to help the city regain its footing and shield the institute by converting it to a nonprofit museum. Protection of the collection is a key component in a $661 million aid package to reduce cuts to pensioners as part of the city’s settlement plan before a federal bankruptcy judge.

The plan originally called for $816 million from the state, foundations and the museum. Lawmakers rejected Snyder’s proposal to give the city $350 million spread over 20 years, authorizing the one-time payment of $195 million instead.

In return, the city-owned museum building, grounds and collection would be converted into a nonprofit organization. The institute’s daily operations are already in the hands of a nonprofit.

The museum’s potential value became the focus of a battle over selling assets to satisfy creditors. Christie’s Inc. appraised about 2,800 pieces at between $454 million and $867 million. Some creditors have clamored to appraise the entire 66,000-piece collection.

Not included in the Christie’s appraisal was the museum’s signature work, “Detroit Industry,” a 1933 series of frescoes by Mexican artist Diego Rivera in an indoor court. The largest mural is 75 feet long and 17 feet high.

Contact Automotive News

http://www.autonews.com/article/20140609/RETAIL03/140609828/automakers-pledge-26-million-to-save-detroit-art

A push to adjust backup cameras

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Auto lobby seeks to tweak U.S. rule to free up design

Auto lobby seeks to tweak U.S. rule to free up design

Federal regulators have effectively mandated rearview camera systems, such as this one in a 2015 GMC Acadia, in most new light vehicles sold, starting in 2018. Now auto industry lobbyists are pushing for more changes.

Photo credit: GM

WASHINGTON -- The long-awaited final federal rule mandating backup cameras may not be so final after all.

This spring, after a yearslong campaign to stop drivers from backing their cars over children, U.S. auto-safety regulators changed federal standards to effectively mandate backup cameras in most new light vehicles sold, starting in 2018.



Now, the Alliance of Automobile Manufacturers, the industry's main lobbying force in Washington, is making one more push for changes -- such as permission to stitch together multiple camera angles, rather than using just one. Without the changes, the group says in a petition to regulators, it could be hard for manufacturers to use certain designs, such as mounting the spare tire above the bumper of an SUV.



Automakers want to "deliver our customers the best system we can achieve," says the petition, filed in late May with the National Highway Traffic Safety Administration. "As the technology for these systems is rapidly advancing, we do not want to limit the safety benefits by restricting the amount of cameras that may be utilized."

The conflict is another example of a persistent gap between the pace of regulatory change and technological innovation. Automakers are increasingly frustrated by federal safety standards that take years or decades to modernize, slowing the introduction of new technology and design ideas.

NHTSA set standards for headlights decades ago with an eye to safety. But those rules now are stopping Audi and Toyota from offering computer-controlled headlights that are being offered in Europe and Japan as a safety feature.

Tesla Motors and the alliance are also challenging federal rules that require cars to have side mirrors by arguing that cameras could provide greater visibility. The absence of side mirrors would make cars more aerodynamic and thus reduce their energy use, they say.

The backup camera petition includes several other requests, including an extension of the deadlines to Sept. 1 in 2016 and 2017, rather than May 1 in each of those years, to accommodate a Sept. 1 model-year changeover. If the phase-in is not well-timed, it will present a "significant cost burden" to the manufacturers, the petition says.

NHTSA will decide whether to reconsider its rules. If it does not, the rules will go into effect as written, barring any intervention by the courts.

You can reach Gabe Nelson at gnelson@crain.com.

http://www.autonews.com/article/20140607/OEM11/306099999/a-push-to-adjust-backup-cameras

Robertson: BMW's i subbrand will lift margins

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Q&A

There's a nice pricing advantage to be had for early entrants in new segments, says Ian Robertson, BMW Group board member in charge of BMW brand sales and marketing and group retail operations.

Robertson, 56, says that's what happened with BMW's X models, and he predicted it will happen again with its i subbrand models: the i3 battery-powered compact and i8 plug-in hybrid.

Robertson spoke with Automotive News Europe Editor Luca Ciferri about the company's i strategy and provided some early insights into who has been placing orders.

Q: Are prices for premium cars influenced by market trends or by product cycles?

A: There is always a competitive model in the marketplace, and all manufacturers are on different cycles. At the same time, being first to market with new segments, as we did with our X models, helps to grow margins. In this regard, the i3 and i8 are off to a strong start. In the run-out phases at BMW, we normally increase specifications. This way of motivating a customer to buy a car at the end of its product cycle is far better than any normal incentive could ever be.

How do the major markets differ for luxury carmakers?

In Europe, the picture is skewed because the economic situation in individual countries varies so much. But if you look at a more normalized environment -- such as Asia or, in recent times, the U.S. -- you will find incentives for the luxury market are significantly lower.

How is China's premium market evolving?

It is clearly maturing. We have sold more than a million cars in the last four years. This means a replacement cycle is starting now. It also means that as well as a huge new-car market a significant market in used cars is starting to appear in China.

So China is normalizing?

Not exactly, because there are other factors there. In Beijing, for example, last year only 240,000 new registration plates were allowed.

This is a city with a far higher volume potential than that, which leads to a situation where thousands of existing cars have to be sold out of Beijing so that people can take their registration plate off in order to buy a new car. This means many used cars originally registered in Beijing are re-sold outside the city, which significantly distorts the market.

Is the i3 off to a strong start?

We have sold more than 3,000 i3s since the car went on sale in Europe last November. Sales are expected to rise as the car becomes increasingly available over the coming months. Customer deliveries in the U.S., a major market for the i3, only started at the end of April.

What is the current production rate?

In preparation for the U.S. launch, we increased production [in Leipzig, Germany] in April by more than 40 percent -- from about 70 to 100 units a day.

How would you characterize the i3 customer base?

Very broad. The i3 sets out to appeal to new groups of customers who lead cosmopolitan, socially responsible and sustainable lifestyles.

These buyers place great importance on design quality, innovation and durability. Clearly, we have a lot of new technology early adopters.

Apart from this, when it comes to a purchase decision for an electric vehicle, government incentives also play a big role. In Norway, for example, the government offers a very comprehensive program to promote electric mobility, including removal of all toll fees, dedicated lanes on highways, the right to use bus lanes in the cities, free parking, free charging and a number of other purchase incentives. So it's not surprising we have more orders in Norway than we do in most other European countries.

Is Norway your No. 1 European market in sales volume?

In unit terms it is currently a close run between the U.K., Germany and Norway. But allowing for the obvious discrepancies in population and market size, Norway is where we have the greatest i3 penetration at the moment.

How many i3 buyers are new to BMW?

About 80 percent, although their provenance is mixed. Some are coming from premium brands, but a significant portion are from volume segments. Interestingly, some of them never owned a car before but decided to buy a zero-emission vehicle with the i3. So it's clearly providing them with something they have never found in a car before.

Are there similarities between the i3 and i8 order books?

Just like the i3, the i8 is already proving a success. Although deliveries are only just about to start, demand for the BMW i8 is already exceeding the planned production volume during ramp-up. But the makeup of the order book is different, with lots of existing BMW customers looking to also add an i8 to their garages.

Some i8 early adopters are similar to Rolls-Royce customers, with multiple cars in multiple garages.

Have any ultrawealthy customers already fallen for the i8?



Yes, one has ordered three of them, one per continent.

You can reach Luca Ciferri at lciferri@crain.com.

http://www.autonews.com/article/20140607/OEM02/306099997/robertson-bmws-i-subbrand-will-lift-margins

GM car defects may have led to dozens more deaths, report suggests

Prepared for some more vehicle news? We have an excellent short article today that you need to really read. Stay up to date with all automobile related details and auto transport news right here.



At least 74 people have died in General Motors cars in accidents with some key similarities to those that GM has linked to 13 deaths involving defective ignition switches, a Reuters analysis of government fatal-crash data has determined. Such accidents also occurred at a higher rate in the GM cars than in top competitors' models, the analysis showed.

Reuters searched the Fatality Analysis Reporting System (FARS), a national database of crash information submitted by local law-enforcement agencies, for single-car frontal collisions where no front air bags deployed and the driver or front-seat passenger was killed.

The news agency compared the incidence of this kind of deadly accident in the Chevrolet Cobalt and the Saturn Ion, the highest-profile cars in GM's recall of 2.6 million cars with defective switches, against the records of three popular small-car competitors: Ford Focus, Honda Civic and Toyota Corolla. The analysis found that the frequency of such accidents in the Ion was nearly six times that of the Corolla and twice that of the Focus. The Ion had 5.9 such fatal crashes per 100,000 cars sold, followed by the Cobalt, with 4.1, the Ford Focus with 2.9, the Civic with 1.6, and the Corolla with 1.0.

It is not clear how many of the deadly accidents identified by Reuters involved defective ignition switches, because crash reports typically do not include that data. That leaves open the possibility that air bags may have failed to deploy in some of the GM crashes for reasons other than faulty switches.

GM, which has offered few details of the fatal crashes related to faulty switches, told Reuters it derived the tally of 13 deaths from claims and lawsuits filed against the automaker. GM checked those claims and lawsuits against other sources available to it, including vehicle data recorders recovered from some crashes.

The Reuters analysis relied on the FARS database, which encompasses a much wider universe of accidents. GM declined to say whether it had used information from the federal database.

Reuters disclosed its findings in detail to GM and federal regulators at the National Highway Traffic Safety Administration (NHTSA). GM declined to comment on Reuters' findings or methodology, responding only that: "Our focus is on doing the right thing for customers - fixing the recalled vehicles as quickly as possible, addressing our civic and legal responsibilities and setting a new industry standard for safety."

NHTSA Acting Administrator David Friedman told Reuters: "The final death toll associated with this safety defect is not known to NHTSA, but we believe it's likely that more than 13 lives were lost."

Toyota and Honda declined to comment. Ford said it took issue with the Reuters findings concerning the Focus, but didn't specify its reasons.

GM engineers first encountered problems with the switches in 2001, a year before the first Ion went into production. The faulty GM ignition switches could cause engines to shut off while driving, leading to a sudden loss of power steering and power brakes, and the failure of air bags to deploy in a crash.

Managers subsequently considered, then rejected several proposals to repair or replace the switches because of the extra cost, GM told NHTSA and congressional investigators. The automaker did not begin recalling the cars until February 2014, after a two-and-a-half-year internal investigation. Eventually, GM recalled every Ion and Cobalt built from model years 2003 to 2010. Reuters used those model years for its analysis.

Using the FARS database of crashes reported to U.S. safety regulators between 2003 and 2012, Reuters identified 45 front-seat fatalities in the Cobalt and 29 in the Ion. In similar crashes, there were 44 fatalities in the Ford Focus, 41 in the Honda Civic and 24 in the Toyota Corolla.

Reuters found the Focus had 43 fatal accidents, the Cobalt had 42, the Civic had 39, the Ion had 28 and the Corolla had 24. While the raw crash numbers appear comparable, the rate of deadly crashes was higher in the two GM models, as the Ford, Honda and Toyota models sold in substantially greater numbers.

The Insurance Institute for Highway Safety, a non-profit safety research group connected with the U.S. insurance industry, reviewed the Reuters analysis. David Zuby, executive vice president and chief research officer, said: "Your crash rates suggest that Cobalt and Ion are less crashworthy than the other models for which you've computed similar statistics," and are similar to those in a 2011 IIHS analysis.

Zuby added that there were several limitations to the analysis, noting that "while your analysis does focus on circumstances that are similar to the cases involving GM air bags that failed to deploy because of the ignition switch problem, it cannot be said definitively that the ignition switch problem" caused 74 deaths.

It is possible, Zuby said, that limitations in the data examined by Reuters may overstate the number of deaths attributable to air bag non-deployment in the car models examined.

Those limitations include the fact that there are other reasons why air bags may not deploy in a frontal crash, such as a car sliding under a truck. Air bag defects unrelated to the ignition switch could cause a failure to deploy, he said, and air bags are designed not to deploy in some situations, such as where the passenger is a child. Zuby also noted that an Insurance Institute study showed the FARS database overstated the problem of air bag non-deployments.

That means the number of fatalities from the Reuters analysis is probably inflated, he said. However, the problems would not affect one model more than another, he added.

At the same time, there are other ways in which the Reuters tally may undercount switch-related fatalities in the GM models. The FARS crash data runs only through 2012, and Reuters did not include two fatalities of backseat passengers.

The fatalities entered in the FARS database and reviewed by Reuters do not include at least five of the 13 deaths acknowledged by GM. One died in 2013, past the range of the current FARS data, and two died in a multi-car accident.

Another, Amber Marie Rose, was killed in the July 2005 single-car crash of her 2005 Cobalt in Maryland. GM has confirmed that Rose is among the 13 victims, and investigators hired by NHTSA said her air bag did not deploy. But the FARS data indicates that the air bag did deploy and her death isn't included in the Reuters count.

http://www.theguardian.com/business/2014/jun/03/gm-car-defects-deaths-faults

Cobalt Offers Car Shipping To Alabama

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https://www.youtube.com/watch?v=pmksnakKnUA

Within GM, a clash of cultures

All set for some more automotive news? We have an excellent post today that you should actually review. Stay up to this day with all automobile related details and automobile transport information right here.

Safety, cost-containment and impenetrable decision-making

Safety, cost-containment and impenetrable decision-making



"We cannot conclude," the Valukas report reads, "that the atmosphere of cost-cutting had no impact on the failure of GM to resolve these issues earlier."

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DETROIT -- Page 248 of Anton Valukas' report on what went wrong with General Motors' deadly ignition switch defect outlines how GM's safety efforts run smack into its cost-conscious culture.

Under the heading "Tone at the Top," the report tries to peg how much GM's culture -- in full-blown cost-cutting mode at the time the bad switches were installed in Chevrolet Cobalts and other small cars -- had to do with its handling of the defect.



The report, which relied in part on interviews of 230 employees, describes a troubling mixed message subtly conveyed by senior leadership: that safety is paramount, yet so is keeping a lid on costs.

"Repeated throughout the interview process we heard from GM personnel two somewhat different directives," the report reads. "When safety is an issue, cost is irrelevant" and "cost is everything."

The report provides a harsh rebuke of GM's infamous committee culture, too, one that on the ignition-switch issue rendered "determining the identity of an actual decision maker … impenetrable."

Some GM employees told investigators that they didn't take any notes during "critical safety meetings" because they didn't think lawyers wanted them to.

Investigators never found evidence of an edict banning note-taking. But "the no-notes direction … reached the status of an urban myth that was followed, an instruction passed from GM employee to GM employee over the years," the report reads.

One of the most colorful descriptions of the cultural morass came from CEO Mary Barra herself. She described for investigators a phenomenon known as the "GM nod."

"The GM nod, Barra described, is when everyone nods in agreement to a proposed plan of action, but then leaves the room with no intention of follow through," the report reads. "It is an idiomatic recognition of a culture that does not move issues forward quickly, as the story of the Cobalt demonstrates."

There was also the "GM salute," described by another interviewee as "a crossing of the arms and pointing outward toward others, indicating that the responsibility belongs to someone else, not me."

Ultimately, Valukas' report says it uncovered no evidence of any employee making "an explicit trade-off between safety and cost" related to the ignition switch. It notes that, because engineers early on failed to grasp a link between the ignition switch slipping out of the "run" position and airbags not deploying, the problem was treated as a customer-satisfaction issue, not a safety problem.

Still, "we cannot conclude," the report reads, "that the atmosphere of cost-cutting had no impact on the failure of GM to resolve these issues earlier."

You can reach Mike Colias at mcolias@crain.com.

http://www.autonews.com/article/20140605/OEM11/140609883/within-gm-a-clash-of-cultures

US auto workers face first hike in union dues since 1967

Prepared for some more vehicle information? We have a good short article today that you should actually read. Stay up to date with all car related information and auto transport news right here.

The United Auto Workers union raised its membership dues for the first time since 1967 on Tuesday, hiking them 25% to replenish a depleted fund to support workers who go out on strike.



Union members will pay dues equal to two-and-a-half hours of regular monthly pay, up from two hours a month.

In a rare divisive debate at the UAW convention, where most resolutions are passed by near-unanimity, 20 delegates spoke for and 20 against the measure.

After a voice vote was declared by UAW president Bob King to be too close to call, a show of hands in the downtown Detroit convention hall showed support for the union. It appeared that nearly a third voted against the dues increase.

Tuesday's vote came as the auto industry reported an annual US sales rate in May that was the strongest since before the 2008 recession. Nearly half of the UAW's 400,000 members are in the automotive industry, including workers at the largest three US-based automakers.



A veteran UAW-represented worker at either General Motors Co, Ford Motor Co, or Fiat Chrysler Automobiles making about $28 per hour will pay union dues of about $70.32 per month, up from about $56 currently. A recently hired worker making $15.78 per hour will pay $39.45 per month, up from the current $31.56.

King, whose four-year term as head of the union ends later this week, campaigned for the dues increase for more than six months. He said the hike was needed because the union's strike fund had shrunk to around $600m from more than $1bn a decade ago.

The UAW says the dues increase will raise about $49m a year.

Gary Walkowicz, from a Ford plant in Dearborn, Michigan, called for the vote to be forestalled to allow to allow a referendum of the union's full membership. But King said one of the reasons a full referendum was not being held was that anti-UAW "outside influences" would affect the vote.

While the UAW's membership has increased 10% during King's four-year term, it is down 40% from about 655,000 a decade ago. The union had nearly 1.5 million members at its peak in 1979.

Dennis Williams, the UAW's secretary-treasurer, is expected to be voted in as the union's new president by delegates at the convention on Wednesday. He is opposed by Walkowicz, who is not expected to get much support.

The dues increase goes into effect in August.

"A strong strike fund is the best defense against being run over by the companies," said Bill Lucas, who works at an auto parts distribution plant in Ohio, echoing a view shared by many delegates.

But others, like Edd McNulty, from a GM plant in Ohio, said delegates were voting against the majority of the UAW's membership.

"The leadership [of the UAW] has lost touch with the people who work on the shop floor," said McNulty.

http://www.theguardian.com/world/2014/jun/03/us-auto-workers-uaw-union-dues-increase