03.26.2008

Like the birth of an elephant, it took a long time to happen, but the deal for Tata to buy Jaguar and Land Rover from Ford is finally done.

The terms of the purchase call for Tata to pay $2.3 billion USD, but since Ford is obligated to pick up $600 million in pension obligations on the new owner’s behalf, the effective price is $1.7 billion. Ford has retained no ownership position in either company.

Since we have said just about everything there is to say about this deal already as it has moved towards completion at snail-like speed, we will simply leave you with the official press release after the jump.

PRESS RELEASE: FORD MOTOR COMPANY ANNOUNCES AGREEMENT TO SELL JAGUAR LAND ROVER TO TATA MOTORS

DEARBORN, Mich., March 26, 2008 – Ford Motor Company [NYSE: F] announced today that it has entered into a definitive agreement to sell its Jaguar Land Rover operations to Tata Motors.

The transaction is the culmination of Ford’s decision last August to explore strategic options for the Jaguar Land Rover business, as the company accelerates its focus on its core Ford brand and “One Ford” global transformation.

The sale is expected to close by the end of the next quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals.

The total amount to be paid in cash by Tata Motors for Jaguar Land Rover upon closing will be approximately US $2.3 billion. At closing, Ford will then contribute up to approximately US $600 million to the Jaguar Land Rover pension plans.

“Jaguar and Land Rover are terrific brands,” said Alan Mulally, president and CEO, Ford Motor Company. “We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata’s stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all.”

“This is a good agreement. It provides the Jaguar Land Rover management team and employees with the assurances needed to maintain their focus on delivering the best results for the business,” said Lewis Booth, executive vice president, Ford Motor Company, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover. “I am confident that, under its new owner, Jaguar Land Rover will continue to build upon the significant improvements and product successes it has achieved in recent years.”

As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services.

In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.

The parties believe these arrangements will support Jaguar Land Rover’s current product plans, while providing Jaguar Land Rover freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements.

The parties do not anticipate any significant changes to Jaguar Land Rover employees’ terms of employment on completion.

Speaking about today’s agreement, Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, commented: “We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business.”

Jaguar Land Rover’s employees, trade unions and the UK Government have been kept informed of developments as the sale process progressed and have indicated their support for the agreement.

Speaking on behalf of Jaguar Land Rover, Geoff Polites, chief executive officer, said: “Jaguar Land Rover’s management team is very pleased that Ford and Tata Motors have come to an agreement today. Our team has been consulted extensively on the deal content and feels confident that it provides for the business needs of both our brands going forward.

“We have also had the opportunity to meet senior executives from Tata Motors and the Tata group,” Polites continued. “They have expressed confidence in the team that has delivered significant improvements in Jaguar Land Rover’s business performance. We feel confident that we can forge a strong working relationship with our new parent company, and we look forward to a bright and successful future for Jaguar Land Rover.”

By Mike Mello

03.25.2008

When Hyundai introduced the 2010 Genesis Coupe at the New York International Auto Show, they brought some serious talent into the Javits Center. The two Genesis Coupes that tore through a little burnout demo looked like terrific new cars, but they benefitted from being driven by two professional stunt drivers. When the music ended and the last shot of pyrotechnics fired off, two female stunt drivers stepped out from the drivers’ seats and helped seal the memory of the Genesis Coupe’s introduction in my mind.

After a few minutes sipping a soda, I came up with a few questions which stunt driver Melissa Stubbs (on the left in the above pic) was kind enough to answer:

Me (MM): Do you prefer all-wheel drive, four-wheel drive, or rear-wheel drive when stunt driving? And, how’s this plastic floor for driving?

Melissa Stubbs (MS): Rear-wheel. It’s best for sliding…the plastic floor is real easy to slide on and you can see where we melted the floor a bit here and there.

MM: Are these two cars modified for this event?

MS: No.

MM: When did you arrive in New York for the event?

MS: One day before the show.

MM: How did you practice to become a stunt driver?

MS: I used to rent cars, bring them to parking lots and bring them back with the front wheels wobbling.

MM: What’s a good way to get into stunt driving? What stunts have you been filming lately?

MS: I went to the Rick Seaman Stunt Driving School. I just got done driving a 1950s Russian Army truck in the latest Indiana Jones movie.

MM: Do you race also or strictly stunt drive?

MS: I race some supermoto, motocross and road racing.

Below is a video of the Genesis Coupe introduction in New York. The cars enter the scene at 1:50:

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By Alex Ricciuti

03.25.2008

Can you see a difference?

Dan Neil at the LA Times thinks the BMW 1 series is ugly.

I have to say I agree with his judgment on its looks, even if I’ve only once sat in the car and had to be placed in treatment for a bout of claustrophobia – so, I can’t say anything about the way it drives.

Now, I envy Neil. He has my number-two dream job (I won’t reveal my first, which involves…ah, forget it). Meaning, I would be doing exactly what I’m doing right now, except getting paid enough to purchase consumer goods and services such as food, shelter and clothing. And I’m a huge admirer of Dan Neil’s talents, which I’ve written about before. Although, reading that post now, it kinda verges on the sycophantically creepy. Rest assured, though, I’m not the type to go all Glenn Close and boil anyone’s bunny.

But I do feel the need to advise Neil on something he wrote in his review of the 1-series.

“I search the stars in vain for a reason the designers gave this car a notch-back design — so that there is a discernible trunk in the back — when it so plainly aches for a fastback.“

The answer is simple, Dan. There is a fastback version in Europe. But when you say fastback in the United States of America, someone will inevitably provide its bastardized translation: hatchback. Subsequently, as soon as American consumers hear the word hatchback they, each and every one of 300 million people, immediately think of their uncle Lou’s 1984 Dodge Omni and flee accordingly in the opposite direction, howling madly and flailing their arms in the air in hysteria.

There.

And since when can’t the LA Times afford to spring for a photographer instead of lifting its photos of the car from the BMW press site (the German plates sort of give it away) like some second-rate car blog (not this one!) too afraid to break copyright rules? This does not bode well for my career in automotive criticism (gotta get back to that novel) if a huge paper like the Times is that cost-conscious with its auto section even with a story by a Pulitzer-Prize winning writer.

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By Kevin Miller

03.25.2008

The Financial Times has reported that Fiat has approached domestic US carmakers about production of Alfa Romeos in US factories, as part of the iconic Italian brand’s return to the US vehicle market. Fiat is also contemplating a return by its Iveco trucks division to the US, as well as offering the popular new Fiat 500 here.

In an interview with Financial Times, Sergio Marchionne, Fiat chief executive said “I’ve always had the view that we had to produce in America.” Marchionne hopes to start production of Alfa Romeo vehicles in the US by 2011 or 2012. He also noted that it is the weakness of the US Dollar that is causing this investigation of producing vehicles in the US. “Nobody making anything in Europe is going to make profits in the US,” he told Financial Times. “You can’t. So we need to localize.”

No domestic automakers have been identified, but the Detroit Three carmakers are scaling back production, and production facilities have been idled. Fiat brands could take advantage of the idled plants by having their own vehicles produced in them.

Mr Marchionne said Alfa would distribute and sell cars in the US from next year, selling vehicles at a loss until US production begins. “I can suffer the loss initially, as long as I know I’m going to be producing enough.”

It will be interesting to see how this proposition of Fiat partnering with a domestic US automaker unfolds into production of Alfa Romeos. Such an agreement could be beneficial to both parties, with Fiat being able to produce vehicles for a lower cost, while their US partner is able to use their idled labor force and plants for vehicle production.

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By Chris Haak

03.25.2008

Yesterday, the Department of Justice (DOJ) approved the merger of XM Satellite Radio and Sirius Satellite Radio, Inc. The two companies announced their intention to merge in February 2007 in a deal that many observers considered to be unlikely to be approved. There is still one major regulatory hurdle to clear, however – the FCC also has to approve the merger. Their action is expected in the coming weeks, and it is possible, though unlikely at this point, that the FCC could still scuttle the combination.

In spite of facing long odds initially (including an explicit rule from the FCC at the time the companies’ broadcast licenses were initially granted that stated that they may not combine), XM and Sirius successfully convinced the DOJ that they are not only competing with one another, but with other entertainment media, including regular broadcast radio, HD radio, iPods and other MP3 players.

Interestingly, the Justice Department actually ruled that the two companies did not really compete with one another. Their rationale, according to Thomas Barnett, the assistant attorney general for antitrust investigation, was twofold. First, a large number of customers come directly from car manufacturers, who are mostly locked into long-term contracts with each provider. GM, Honda, and Hyundai are in the XM camp, while BMW, Chrysler, and Ford are in the Sirius camp, so from the standpoint of making a choice when buying a new vehicle, the companies aren’t really competing. Investigators were also unable to determine whether satellite radio buyers at Circuit City and Best Buy were only choosing between the two satellite radio companies, or also considering alternative in-vehicle entertainment choices as noted above.

For its part, the FCC was believed to have been initially opposed to the merger, as was I, but apparently Chairman Kevin Martin has become more inclined to agree to it after the companies agreed to introduce less-comprehensive a la carte channel choices at a lower price than the normal $12.95 per month.

With the FCC’s approval, the companies will have to prove to customers and shareholders that they are actually improving their service offerings – giving them more programming options and better customer service. They also have to give something totheir long-suffering shareholders that has heretofore been elusive in the satellite radio business: profits. The companies face some formidable technical hurdles in getting more than a few of the other service’s channels into their lineups, as Sirius radios are not currently able to receive XM, and vice-versa.

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By Brendan Moore

03.25.2008

The Financial Times said yesterday that Ford Motor Co. will announce on Wednesday the sale of Jaguar and Land Rover to Tata, the Indian auto manufacturer.

The sale is around $2 billion USD, but the deal was not just about the money.

Ford will continue to contribute to the workers pension funds at Jaguar and Land Rover, and Tata will buy Ford engines and transmissions as part of the deal. Tata has also agreed to retain the three British manufacturing facilities at Solihull, Castle Bromwich and Halewood where Ford employs 13,500 people. They have also assured the unions that there will be no job cuts at these plants.

Tata is borrowing $3 billion to find the deal. A consortium of banks including JP Morgan Chase, Citigroup, BNP Paribas, State Bank of India and Standard Chartered helped Tata get the $3 billion it needed for the deal.

Why the higher amount? Although a good part of this money ($2 billion) would go towards funding the deal itself, the remainder will be used to meet working capital requirements, a good sign for the immediate future of the two iconic brands.

The parting has to be bittersweet for Ford. The company lost $2.7 billion in 2007 and a staggering $12.6 billion in 2006, and is jettisoning Jaguar and Land Rover to focus on turning around its failing core operations in North America.

Ford acquired Land Rover from German carmaker BMW in 2000 as part of BMW’s divesture of it’s own failing British brand acquisitions. It bought Jaguar in 1989. The two brands were part of the Premier Automotive Group (PAG) at Ford, which warranted its own headquarters away from Detroit in Irvine, CA and which also had Aston Martin, Jaguar, Land Rover and Volvo as members. The PAG was supposed to be Ford’s luxury segment behemoth that they would use to conquer markets worldwide. Volvo will now be the only marque left in PAG, since Aston Martin was sold last year.

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By Brendan Moore

03.24.2008

Two wealthy Texan businessmen have apparently decided that Chinese auto companies are a good investment. Specifically, Brilliance China Automotive Holdings, and that is where they’re placing a sizable bet.

According to an article in the Houston Business Journal, Les Alexander, owner of the Houston Rockets, the NBA pro basketball franchise, and Billy Joe “Red” McCombs, a San Antonio billionaire who made his first fortune in auto retailing, have formed a joint venture that will spend $100 million USD to purchase between 10% and 15% of Brilliance Auto. The purchase will be made through a new share offering by Brilliance.

Part of the investment strategy is for McCombs to use his auto retailing experience to assist Brilliance in building sales in their home country of China, establishing a sales network in the important European market, and, launching sales in the North America (U.S. and Canada), the most important market of all, in 2009 or 2010.

The Brilliance strategy is to provide a higher-quality car than the Korean manufacturers (and by default, then, some of the Japanese manufacturers) at prices below the prices of those Korean auto makers like Kia, who sell at the low end of the pricing segment.

From the Houston Business Journal article: “McCombs brings 50 years of auto expertise into the Chinese market with the Brilliance Auto deal. The new funding will help the company develop dealership networks, auto financing, used car operations and Internet auto sales. The capital infusion also will allow Shenyang-based Brilliance Auto to expand production of Brilliance-BMW vehicles, manufactured in partnership with German automaker BMW Group.
Wu Xiao An, chairman of Brilliance Auto, outlined the company’s strategy in a statement: “The industry expertise, global network, brand-building expertise and synergies created from the partnership will give Brilliance new momentum to firmly establish ourselves as a key player in the automotive industry in China and beyond.”

Brilliance has taken some lumps in the media as of late as a result of the spectacular failure of their BS6 sedan in the German crash tests in June 2007. The car has since been redesigned and has passed the similar Spanish crash test in September 2007. The Brilliance BS6 luxury saloon, the top vehicle in the Brilliance lineup, sells for approximately $33,000 USD.

HSO Motors Europe has inked a deal to bring in almost 160,000 BS6 sedans a year into Europe over the next 60 months, and a page of their website is actively seeking new retail dealers for Brilliance.

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By Kevin Miller

03.24.2008

Last summer, my eighty-seven year old grandmother asked me to help her find a car to replace her 14-year-old Ford Taurus wagon. After determining that she still had the necessary skills and mental acuity to be on the road, I started researching which vehicles are appropriate for older drivers. Despite my knowledge about cars, and my internet-searching prowess, I could not find any good resources to tell me what older drivers should be looking for in a car. The AAA has now announced a program to do just that- help older drivers know what to look for when shopping for a new car.

In partnership with the University of Florida’s National Older Driver Research and Training Center (NODRTC), AAA released its Smart Features for Mature Drivers at the New York International Auto Show. The program identifies vehicle features that can assist drivers with visual, physical and mental changes that are frequently encountered as they age. Muscle strength, reaction times, range of motion and visual acuity tend to diminish as part of the natural aging process. Also, the increased prevalence of health issues such as arthritis, hip and knee joint pain or osteoporosis can reduce the ability to safely execute the complex task of driving. My grandmother’s knee pain, as well as arthritis in her hands, were two concerns when we were shopping for her car.

According to the National Highway Traffic Safety Administration, there were 29 million licensed drivers age 65 and older in the United States in 2005. It is estimated that by 2020 there will be more than 40 million licensed drivers age 65 and older. “When looking for ways to help maintain an older person’s safety, it’s important to address the vehicle they are driving. Today, specific vehicle features can help improve driver comfort and safety.” says Dennis P. McCarthy, co-director of the University of Florida’s NODRTC.

Some of the recommendations included in the AAA program include:

· Vehicles with six-way adjustable power seats and seat heights that come between the driver’s mid-thigh and lower buttocks. These features can make it easier for drivers and passengers to enter and exit a vehicle.

· Vehicles with four-doors, thick steering wheels, keyless entry and ignition, power mirrors and seats and larger dashboard controls with buttons. These features can make it easier for those with arthritic joints to enter vehicles and operate controls

· Vehicles with extendable sun visors, large audio and climate controls and displays with contrasting text. These features can help drivers with reduced visual acuity better see vehicle controls and displays.

AAA’s Smart Features for Mature Drivers also includes recommended vehicle safety features, which would benefit any vehicle buyer: Proven crashworthiness, crash test and rollover ratings, side and dual-stage/threshold airbags, adjustable head restraints, antilock brakes, and stability control.

Without this guide from AAA last summer, I started by asking my grandmother what she liked about her Taurus, and what she didn’t like, as well as what she’d like her new car to have that the Taurus didn’t. That helped me come up with criteria for her new car:
-Easy to get in and out of
-Easy to see out of
-Easy/understandable to operate
-Small and maneuverable enough to park easily

Additionally, I wanted to make sure her new vehicle was a safe one. Because it can be more difficult for older people to heal after injury, I wanted to be sure that if she was ever in an accident, she would be as safe as possible. I made a list of suitable cars, and we went out to test drive several models. She test drove a Volvo S40, Subaru Forester, Honda Fit, and Honda Civic. She ended up buying the S40, and she loves it. I was glad to get her in to a car that is safe, and one in which she feels comfortable behind the wheel.

With the AAA’s new Smart Features for Mature Drivers program, more senior-aged drivers should be able to identify vehicles which will be easier and safer for them to use, which in turn can lead to safer roads for all drivers. With an estimated 11 million more drivers reaching 65 years of age in the next 12 years, anything that can be done to keep those drivers safe will help. To check out all of the Smart Features for Mature Drivers, you can check out the program’s website at AAA.com/seniors.

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By Mike Mello

03.23.2008

At the New York International Auto Show, Hyundai took advantage of the well-lit, expansive, Galleria at the Javits Center when it introduced the 2010 Genesis Coupe. The only thing left to be desired was better ventilation on the show floor…

In fact, Hyundai launched two new models of the Genesis Coupe onto a barricaded, plastic floor that was maybe about as large as a pro NBA court. While a rock and roll cover band blasted “You really go me” (done David Lee Roth style) a red Genesis Coupe burst onto the show floor from one corner and proceeded to perform some very convincing figure-8s and donuts. Just a few seconds later, a silver Genesis Coupe took to the floor from the opposite corner – in reverse – and made good use of the e-brake and rear-wheel drive architecture. When the two coupes came to rest, it wasn’t a pair of full-face-masked stunt drivers who just disappeared behind the scenes, but two female stunt drivers who stepped out from behind the wheel. Due to the pyrotechnics, the Galleria filled with a bit of smoke which hung around through most of the press conference.

Clearly, the Genesis Coupe was presented as an attainable rear-wheel drive performance car that will offer competitive performance with the 212 horsepower, 2.0L, turbocharged, intercooled four cylinder, or even higher performance with the choice of a 306-horsepower, 3.8L V6. (Both horsepower figures were estimated.) Transmission choices include a standard six-speed manual for both engines. The 2.0t can be shifted by an optional five-speed automatic and the 3.8L V6 can be backed up by an optional six-speed automatic. Both automatics feature SHIFTRONIC, which the driver can use to shift the transmission up or down after moving the gearshift into a dedicated gate.

Where as some production cars come to the scene bearing little resemblance to their conceptual predecessors, the Genesis Coupe was unmistakable in its likeness to the 2007 Concept Genesis Coupe. Certain scoops and louvers didn’t make the transition to production, but the front end, window opening, and formidable rear quarters looked fabulous in the production metal. 18-inch alloy wheels will be standard, and the optional alloys will be 19 inches. I’m not sure which ones were on the Genesis Coupes in New York, but the five-spoked wheels looked sharp, both during the burnout display and at rest.

At the Genesis Coupe press conference, Hyundai used rock and roll to deliver the message that the Genesis Coupe was all about fun and serious performance. It’s also important to note the safety features that started with the brakes and went all the up to Electronic Stability Control (ESC) which is standard on all Genesis Coupes. Standard brakes begin with 12.6 inch front rotors followed by 12.4 inch rotors in the rear, stopped by single piston calipers. Optional braking is handled by fixed monobloc four-piston Brembo calipers and 13.4 inch front rotors with 13 inch rotors out back. Behind all the rotating and clamping hardware is standard ABS that works with an Electronic Brake-force Distribution (EBD) system to deliver the best brake performance under all driving conditions. The Brake Assist feature is also present, in case a sudden stop demands the most out of the ABS.

In case anything had gone wrong at the indoor driving session at the Javits Center, the Genesis Coupe would have drawn upon the following technology to protect its occupants: Front and rear crumple zones, a hood which includes “buckling creases and safety stops,” airbags in front of the seats plus airbags mounted within the seats, along with side air curtains and “active front head restraints.”

After the rousing introduction of the Genesis Coupe in New York, one can only imagine that the TV commercials that bring the car into peoples’ living rooms have a lot to live up to. This new Genesis Coupe from Hyundai is super attractive when performing right in front of you and the choice of engines should make it a major player on anyone’s sports car shopping list when it arrives this spring.

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By Andy Bannister

03.23.2008

One of the longest-running vehicles manufactured on the African continent, the Nissan Bakkie, is heading towards retirement, bringing to an end a 37-year career which has seen it become beloved in its native South Africa.

Given the relentlessly short product cycles of Japanese companies it seems remarkable that this derivative of the original rear-drive Datsun 1200 should still be on sale so long after its passenger car counterpart was laid to rest.

Time has, however, finally caught up with the little Nissan. After 285,000 units since its 1971 South African launch, the 1400cc half-ton pick-up has ceased production at the company’s Rosslyn plant, a victim of new homologation regulations.

Sufficient stocks were built up for the vehicle to remain on sale – marketed locally as “The Champion of Africa” – throughout 2008, Nissan South Africa says.

Bakkie is a word derived from the Dutch-based Afrikaans-language spoken by many South Africans. It is apparently a corruption of the word for carrier, or tray. Bakkies are big business on the South African market, with Ford and GM, among others, competing in the small pick-up market.

Nissan’s 1400 is sold in Standard and Champ versions costing between $9,540 and $10,150. While the Standard is pretty much a stripped-out workhorse, the Champ has a sportier feel with tinted windscreen, spot lamps, decals, cloth trim and rev counter.

The Bakkie’s success has been built on an indestructible reputation. Its simple four-cylinder, carburettor-fed engine requires no special skills to maintain and has proved its reliability on some of the toughest terrain on the planet.

Back in 1970, Datsun (as Nissan then called its products for export) launched the 1200 as one of its earlier attempts to market a car with global appeal. It had neat, square styling in saloon, station wagon and coupé variants, but was gone in the blink of an eye, replaced by later Datsuns with more extravagant styling.

In South Africa, the Bakkie version gradually evolved, in a market cut off for years from the outside world by the political isolation of the country as a result of its controversial apartheid policy. Nissan occasional instituted miniscule styling and trim improvements. The most radical change was in 1980, when the 1400cc engine replaced its 1200cc predecessor.

The Bakkie’s eventual replacement is likely to be locally-built pick-up version of the Romanian Dacia Logan, a front-wheel drive economy car designed by Nissan’s partner, Renault. The Logan will have to be a pretty special vehicle to capture the heart of South African drivers in quite the same way.

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