REPORT: Opel to cut prices 40% in order to save jobs?

Sometimes deals get made, and then the dealmakers have to employ some pretty creative tactics to get the terms to work. Magna's deal for Opel included taking €1.5 billion in short term loans from the German government, the string attached being that Magna had to guarantee German jobs.

Saving jobs means selling more cars to maintain production levels, and outside observers are suggesting that Opel would need to cut prices by 40% to move enough metal to keep people on the lines. Of course, a 40% drop in prices makes profit almost impossible, and some are saying Magna doesn't care about profits right now. One analyst said Magna and GM might want to increase costs, since Magna would sell more parts and GM would get more royalties. That, however, seem like the wilder side of speculation.

Magna has said the 40% discount hypothesis is absurd. Magna's mandate was to save German jobs -- that doesn't mean other Opel or Vauxhall factories in other countries can't be shuttered. Such a discount would also bring competing automakers into the debate; they would need to fight battles both on the dealer lot and with their government lobbyists, who would question Opel's right to sell cheap cars with government assistance.



[ Bloomberg ]
[ Tag: discount, europe, factories, magna, opel, plants, sberbank, unions, vauxhall ]

British Bailout: UK gives ?2.3B to domestic auto industry

When the U.S. domestic auto industry asked its government for billions of dollars in loans, it made world-wide news. Many other foreign nations have pitched in with funding for their own industries, as well. The UK has just gotten in on the act by promising ?2.3 billion for the cause, with ?1 billion in direct government loans and another ?1.3 billion from the European Investment Bank. The UK government is promising its citizens that the loans are "no blank check" for the ailing industry. Hmm.. where have we heard that before? The British government deemed its auto industry worth saving, mentioning that up to one million citizens count on auto jobs for income. Similar to the U.S. loan deal, the British government is looking to develop a national strategy for greener, cleaner motoring.
?2.3 billion sounds like a lot of cash (about $3.2 billion USD), but some industry insiders don't think the loans go far enough. Union leader Tony Woodley claims that nearly half of the money will need to go to Vauxhall, a subsidiary of General Motors, and Jaguar Land Rover, which is owned by India-based Tata, and that the cash infusion will do little to aid the hundreds of suppliers that are hurting just as badly.
[ Times Online ]
[ Tag: Auto industry, AutoIndustry, Bailout, great britain, GreatBritain, UK ]

Opinion: What should happen to Saturn, Vauxhall and Opel during GM's reorganization?

Amidst all the recent bailout talk, one question being asked is what role GM's Opel division will serve in a new-and-hopefully-improved General Motors. More succinctly, will Vauxhall and Saturn soldier on unchanged or will they simply fade into automotive landscape? Automotive News seems to think the question of Opel and how it relates to Vauxhall and Saturn is so important that it's worth devoting three separate editorials to the issue, with varying levels of clarity.
Richard Truett maintains that shuttering Saturn would be a "monumental mistake that would alienate many of the most loyal buyers GM has," but thinks that "Saturn fans would be cool with a transition to Opel." We think that the cars might be well-received by Saturn buyers, but that the prices need to be more budget-minded and that the overall focus of the brand needs a thorough work-over. Some Autobloggers believe that shutting down Saturn altogether would be a mistake, while some are in favor of doing away with the brand as soon as possible. Regardless of where on that fence our staffers sit, we all expressed doubt that changing the name to Opel in the U.S. would serve any constructive purpose. Clearly, if it is going to keep Saturn, GM needs to show more support for the brand, as evidenced by the Malibu/Aura situation.
So what about killing off Vauxhall, which is essentially a UK-only rebadge of Opel? Well, here we see some dissent as well. Wim Oude Weernink says that the nameplate is superfluous and thinks GM should be reduced to just Cadillac, Opel and Chevrolet worldwide. That would leave GM with premium, near-premium, and mainstream lineups, placing it in line with other successful automakers like Toyota and Ford.
Colleague Mark Appleton, on the other hand, thinks it would be stupid to kill off Vauxhall. He argues that the General should keep the storied British marque, pointing out that there is no competition between Vauxhall and Opel and that the existing line-up would be very costly to replace with a brand that has never been successful in the UK. It's much like the Saturn/Opel equation except Saturn isn't as old, by a long shot.
This author thinks that Saturn could survive and possibly thrive as a rebadged Opel line, but recent history proves otherwise. The success of Vauxhall shows that the formula can work in other markets and now that smaller, more fuel-efficient Euro cars are gaining a foothold in the States, Saturn would be an ideal brand to market Opel's wares to American buyers who want to feel like they are ahead of the curve. And the same philosophy could be applied to Ford, with Mercury getting an infusion of the Blue Oval's Euro models.
It's expensive to shut down dealerships and to change brands, and the added cost of marketing a new or unfamiliar marque is considerably more expensive than manufacturing extra badges. So keeping Vauxhall and Saturn but streamlining the offerings and manufacturing some of the cars here could help bring jobs to America and stabilize prices when the dollar and euro (or pound) are going in opposite directions. Of course there are still some who think Saturn should just die already, but Alex is always cranky after a Knight Rider liveblog, and we don't know what to make of Paukert just yet. What say you?
[ Automotive News ]
[ Tag: bailout, gm bailout, gm bankruptcy, GmBailout, GmBankruptcy, opel, reorganization, restructuring, vauxhall ]

Opel corsa super 1600

2010 Audi S4

Right car, wrong timing? At a glance, it would seem that way. The new Audi S4 arrives in the midst of a global economic slump. It was unveiled in October at the Paris show, where hybrids and electric vehicles stole the limelight, and it unashamedly advertises the motto Vorsprung durch Technik (Advancement through Technology) when everybody is talking low emissions and high mileage. Look closer, though, and the new S4 emerges as a surprisingly sensible proposition. It is expected to cost about the same as the car it replaces and it bristles with torque, yet it should deliver about 24 mpg overall (EPA figures haven't yet been released). At the same time, it's a tour de force that employs trick steering, chassis, and driveline setups to beam you from point A to point B quicker than some of its rivals.But who, exactly, are these rivals? Audi identifies them as the BMW M3 and the Mercedes-Benz C63 AMG, but the 333-hp S4 falls between BMW's 300-hp 335i and the 414-hp M3. It also falls between the 268-hp Mercedes C350 and the 451-hp C63. The upcoming RS4 sedan and RS5 coupe, which both should get about 450 hp and 330 lb-ft of torque from Audi's 4.2-liter V-8, likely will arrive in 2010. For now, though, the highest-performance version of the new A4 is the S4. It won't go on sale in America until fall 2009 as a 2010 model and then only in sedan form: farewell, ultra-low-volume S4 wagon and convertible.A comparison of the basic engine specs of the old S4 and the new car does not bode well: only six cylinders instead of eight, 3.0 liters of displacement instead of 4.2 liters, 333 hp instead of 340 hp. Are we getting shortchanged here? We are not. Maximum torque, that crucial parameter for drivability, increases from 302 to 325 lb-ft, and it is now available between 2900 and 5300 rpm rather than peaking at 3500 rpm. And although the curb weight is about the same, Audi claims that the new S4 surges from 0 to 60 mph in 5.1 seconds, outsprinting the old S4 by about half a second.While most supercharged engines develop their sweet spot between 3500 and 5000 rpm, the direct-injected 3.0-liter V-6 shoots fireworks all the way to its 7000-rpm redline. It thus combines the low-end torque of a force-fed engine with the top-end energy of a high-revving, normally aspirated one. The result? Enough power to rocket the S4 from 50 to 75 mph in only about 4.5 seconds in fourth gear, says Audi.The seven-speed version of Audi's dual-clutch S tronic transmission, which makes its U.S. debut in the S4, is definitely the gearbox to go for, although a six-speed manual is standard. The main advantage of the dual-clutch arrangement is, of course, the totally seamless torque delivery, which helps maintain momentum during gearchanges. In auto mode, the system can be outfoxed by certain borderline situations, such as aborted overtaking maneuvers or a sudden shift of driving style, but the chips learn fast, and the fluency of the S tronic never ceases to amaze.

GM UK takes two Top Gear awards

As much as Jeremy Clarkson complains about fat, uncool Americans and their crudely-made, overweight cars, General Motors managed to come out on top in two categories in Top Gear's annual awards.
If you said the Corvette ZR1 was a winner, you'd be totally correct. The 638-hp supercar was a shoo-in to win over the Top Gear team, just as we guessed when they were caught driving at at the Bonneville Salt Flats earlier this year. Chevrolet's baddest Vette ever sped off with top honors in Top Gear's Performance Car of the Year category.
The second award winner won't be quite as easy to guess, mostly because it's not sold in the U.S. Top Gear's Executive Car of the Year is the Vauxhall Insignia which is based on GM's Epsilon II platform. The magazine likes the car's looks and technology. We won't bother predicting whether we'll see it here eventually. For that to happen, Saturn will need to be around, and right now, we'll have to wait and see what happens on that front.

[ Tag: corvette, corvette zr1, CorvetteZr1, insignia, jeremy clarkson, JeremyClarkson, top gear, top gear magazine, TopGear, TopGearMagazine, vauxhall insignia, VauxhallInsignia, zr1 ]

Opel/Vauxhall Insignia wins European Car of the Year by single point

Looks like there won't be much of a fiesta for Ford this year, as the Opel/Vauxhall Insignia has captured the 2009 European Car of the Year award by just one point over the hot little hatch with the big blue oval on its snout. Scoring 321 points to the Fiesta's 320, the Insignia claimed the victory with the bronze going to the Volkswagen Golf (223 points). It's the first win for Opel in 22 years, although the European branch of GM has scored four runner-up spots in the past. You might even say this is payback for Ford, which snatched the top prize from Opel in 2007 when the Ford S-Max nipped the Corsa by two points in the balloting. According to the jurors, the Insignia won this year based on its "artistry with German precision" good looks, active and passive safety features, comfort and a wide array of efficient engines including that 280-hp turbo V6. Options such as the Opel Eye that reads road signals, FlexRide suspension and nine-mode Adaptive Forward Lighting were also cited. Hopefully this car will eventually show up Stateside as the next Saturn Aura. Thanks for the tip, everyone!


[ Tag: car of the year, CarOfTheYear, coty, european car of the year, EuropeanCarOfTheYear, ford fiesta, FordFiesta, opel insignia, OpelInsignia ]