Cerberus Capital Management, one of the two leading contenders to buy the Chrysler Group, has hired former Chrysler COO Wolfgang Bernhard as a consultant. Cerberus and private equity firm Blackstone Group have emerged as front runners in the bids for Chrysler.

As a former executive at Chrysler, Bernhard was one of the primary architects of Chrysler’s short-lived rebound earlier this decade. He could be an asset to Cerberus’ potential bid with his knowledge of Chrysler’s strengths and weaknesses.

Bernhard was most recently at Volkswagen before leaving during the automaker’s management shake-up. Bernhard joined VW after he was dropped at DaimlerChrysler in 2004 just before he was about to take over the Mercedes Car Group. Don’t be surprised to see Bernhard running the Chrysler Group if Cerberus ends up as the next owner of the automaker.

## Source: Automotive News ##

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Toyota is the dominate player in hybrids, but it’s not Toyota’s way to rest on its laurels and let others catch up. That’s why it is working on developing a plug-in hybrid vehicle, said Toyota North America President Jim Press. Toyota hasn’t announced plans for a production plug-in hybrid, but it is in product development and it is open to joining with other automakers in battery development

Press said the biggest challenge for plug-in hybrids is the battery technology, which echoes what others in Toyota and other automakers are saying. Toyota is working on the next-generation battery, but would be willing to cooperate with other automakers its development.

## Source: Reuters ##

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Sales numbers are in for February 2007. As expected Ford Motor and Chrysler Group had bad months, with sales off 13.5% and 8%, respectively. Part of Ford’s drop was a 30% cut in fleet sales, but Ford retail was still down 8% and that’s not good news. In a shocker, General Motors sales were up 3.4% despite an 18% reduction in fleet sales. The best news for GM was retail sales climbed by 11.0%. As as been the case for a while, Toyota was up once again with sales climbing 12.2%.

For the automakers, General Motors lead the pack (311,763), with Ford (211,150), Toyota (187,330) and Chrysler Group (174,506) following behind.

BY AUTOMAKER
BMW Group: 11.9%
Chrysler Group: -8.0%
Ford Motor: -13.5% (Retail down 8.0%, Fleet off 30.0%)
General Motors: 3.4% (Retail up 11.0%, Fleet off 18.0%)
Honda America: 3.2%
Nissan North America: 1.2%
Toyota Motor: 12.2%

BY BRAND
Acura -3.4%
Audi 37.5%
BMW 15.2%
Buick -29.5%
Cadillac -13.0%
Chevrolet 5.3%
Chrysler -16%
Dodge -5.0%
Ford -15.2% (Cars down 25.7%, Trucks off 10.0%)
GMC 22.3%
Honda 4.2%
HUMMER -26.0%
Hyundai 1.4%
Infiniti 5.0% (G35 Sedan up 50.3%)
Isuzu 15.4%
Jaguar -28.3% (XK up 128.8%)
Jeep -5.0%
Kia 13.5%
Land Rover -10.0%
Lexus 6.6% (Cars up 27.0%)
Lincoln 10.8% (Trucks up 38.0%)
Mazda -6.4% (Tribute off 87.1%)
Mercedes -0.3%
Mercury -13.2%
MINI -12%
Mitsubishi 22.0%
Nissan 0.7%
Pontiac -15.6%
Porsche -27.1% (Cayenne down 61%)
Saab -20.3%
Saturn 59.4% (Cars up 60.1%, Trucks up 58.8%)
Subaru -5.6%
Suzuki 1.0%
Toyota 13.0% (Cars up 21.1%, Prius up 87.0%)
Volkswagen 0.2%
Volvo 0.7%

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Consumer Reports has released its automotive Top Picks for 2007. The list was announced yesterday and is published in the magazine’s April issue. The Top Picks for 2007 sees an overall domination by Japanese automakers, with all of the picks coming from Japanese nameplates for the second time in 10 years. The 2007 list includes five new models: the Toyota RAV4, Infiniti G35, Toyota Sienna, Mazda MX-5 Miata and the Honda Fit.

Top Picks 2007

• Fun to drive - Mazda MX-5 Miata
• Small SUV - Toyota RAV4
• Small sedan - Honda Civic
• Family sedan - Honda Accord
• Minivan - Toyota Sienna
• Luxury sedan - Infiniti M35
• Midsized SUV - Toyota Highlander Hybrid
• Budget cars - Honda Fit
• Green car - Toyota Prius
• Upscale sedan - Infiniti G35

Consumer Reports’ Top Picks list features recommended vehicles that have performed well in its own tests, and have at least average predicted reliability and adequate performance in government and insurance industry crash tests.

## Source: Consumer Reports ##

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While sales of the new Ford Edge are off to a strong start, the launch of what Ford had called 2006’s most important product, has had a few glitches. First, Ford delayed the launch over some last-minute quality issues. Then there was the weather, heavy snow on the Plains states, and ice storms in Texas and other parts of the southwest, delayed shipments to some states.

According to Ford, about 10 percent of its dealers are still waiting for their first Edges, particularly those dealers in rural areas. However, Ford said that all of its dealers will receive their initial allotment of Edges by the end of this month. Since Ford is focusing on stocking high-volume Lincoln dealers in major metropolitan areas first, smaller dealers will have to wait longer for their MKXs.

Adding to the other issues, Ford has seen a higher than expected demand for premium Edge models with 18-inch rims, which has kept premium models in short supply and forced Ford to offer cash on the entry-level model. Now a rail strike in Canada, is slowing Edge shipments. While high sales of higher-profit, premium models is a good thing, without bad luck, Ford would have no luck at all.

## Source: The Detroit News ##

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General Motors and Ford today said their U.S. sales declined in February as they continued to back away from sales to daily rental fleets. While GM said its February U.S. sales would likely be off 6 to 7 percent from February 2006, the automaker expects its retail sales to be flat for the month.

Ford said its February U.S. sales would likely decline by 10 to 15 percent, with its planned reduction in fleet sales accounting for the majority of the decline. Ford expects its sales to commercial and government fleets to be down 20 percent in February, including a 30 percent drop to daily rental companies. Ford F-Series look to be continuing their free fall with sales likely to drop by a double-digit percentage, according to George Pipas, Ford’s chief sales analyst.

Both GM and Ford have planned huges reductions in low-margin fleet sales. While the fleet sales allowed the automakers to keep assembly plants running, they reduced resale values, and eroded the value of the brands.

Final sales results will be released on Thursday, March 1.

## Source: Reuters ##

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Toyota today announced it would invest $1.3 billion to build its eighth North American assembly plant — and fifth in the U.S. — in northeastern Mississippi. The new plant will be built in Blue Springs, Miss., just outside of Tupelo.

Toyota’s new assembly plant is scheduled to begin production in 2010, and will build the Toyota Highlander crossover. The plant will have an annual capacity of 150,000 vehicles. It will employ approximately 2,000 workers at full production, and indirectly create work for many more.

The 1,700-acre site in Mississippi was chosen over sites in Arkansas and Tennessee. Mississippi is the seventh state where Toyota has a vehicle or engine factory. The new Toyota plant is the second big auto plant in the state, and follows Nissan’s Canton assembly plant, which opened in 2003.

Full press release after the jump.

## Source: Toyota ##

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Despite exploring an alliance with General Motors last year, Nissan-Renault is not interested in acquiring DaimlerChrysler’s Chrysler division, said a Nissan official. While Nissan-Renault is open to new partnerships, it is not looking at a new partnership right now because it is focused on its own financial woes, said a Nissan spokeswoman.

Carlos Ghosn, CEO of both Nissan and Renault has said a North American ally would be a good balance for the company. But after Nissan reported a 22 percent drop in earnings for its October-December quarter, the company has changed its priorities. Ghosn said Nissan faced a “performance crisis” that must be fixed as “soon as possible.”

“As Mr. Ghosn has said, the company right now is as it is today because it has its own problems inside and we’re not going outside to look for the solutions,” said Nissan spokeswoman Madoka Soma. “We’re not in a rush for a partner.”

With Hyundai and Nissan-Renault saying they are not interested, the list of potential buyers gets even shorter.

## Source: Forbes ##

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David Richards, founder of Prodrive, is leading a consortium to buy Aston Martin, according to the Financial Times. Citing inside sources, Richards’ Prodrive consortium is one of three bidders left in the running for Aston Martin after the bidding process for Aston closed last month.

The Prodrive consortium’s bid is said to be about £450 million, which put it in the final round for Aston. The other remaining suitors are  Doughty Hanson & Co., and Syrian-born property magnate Simon Halabi.

Prodrive currently runs Aston Martin’s racing team,  and the two companies combined to produce the Aston Martin Rally GT (shown). Prodrive is also setting up a Formula One team that will begin racing in 2008. If Prodrive wins the bidding process for Aston Martin, it’ll be interesting to see if its F1 team becomes the Aston Martin racing team.

## Source: MarketWatch ##

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Talks between General Motors and DaimlerChrysler about the future of the Chrysler Group are serious and have been going on for two months, according to the Detroit News. GM has been in discussions with DCX about acquiring all of the American arm and folding it into the greater GM.

The high-level talks started back in December, with GM Chairman Rick Wagoner and DaimlerChrysler CEO Dieter Zetsche meeting in Detroit to discuss the sale of Chrysler. While talks are still at a high-level, there have been at least four meetings between Wagoner, Zetsche, and CFOs from both companies. Discussions are said to be continuing, primarily between the CFOs. As usual, both companies declined to comment.

If GM purchased Chrysler, it would no longer exist as a unique company or a subsidiary. Instead all of its brands and factories would become part of the larger GM organization.

Auto industry experts say a deal would be extremely risky for GM, which is in the middle of its own turnaround. Analysts believe GM already has too many brands, and too much cannibalization of its products, adding three more would just make it worse. If GM’s cutting of more than 30,000 jobs and Chrysler’s recent announcement of 13,000 job cuts are painful, the combination of GM and Chrysler would result in even more cuts — massive cuts. And how is the UAW going to react to that.

## Source: Detroit News ##

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Korean automaker Hyundai may also be interested in purchasing Chrysler from DaimlerChrysler, if DCX decides to dump its American arm, according to new reports. Last week, most of the speculation was on a General Motors purchase of Chrysler Group, but now rumors are spreading of a pack of international suitors. Last week, DaimlerChrysler chairman Dieter Zetsche said JP Morgan had been brought in to review Chrysler’s future, saying “all options are on the table.”

Despite its pension deficit, incresing healthcare costs, aging factories and poor product mix, the main draw for Hyundai and other potential foreign buyers is Chrysler’s dealer network. With Hyundai’s big push in the U.S., the expanded dealer network will be a great asset for Hyundai’s growth.

Chrylser has more value than just its dealer network, but it would take a lot of work to reap the rewards. Hyundai has long wanted a full-size truck and the Dodge would be just the ticket. Chrysler’s minivans have been redesigned, and while Hyundai has its own minivan, the Chrysler van’s are the segment leaders.

While a Hyundai purchase of Chrysler makes more sense than a GM bid, it still may not make as much sense as some of the other potential international bidders, like China’s Chery and SAIC.

## Source: TimesOnline ##

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Automotive News continues to insist that General Motors is in talks with DaimlerChrysler about the possible buyout of the Chrysler Group. Inside sources in both the U.S. and Germany claim that GM is interested, and that high-level talks are taking place between executives.

GM spokesman Tony Cervone wouldn’t comment, but said, “We have always said that conversations (between GM and many other parties) have happened all the time, and many times they don’t come to fruition.”

When asked about the deal, Klaus Franz, a top GM executive in Europe, said acquiring Chrysler would be a “disaster”. “This is only a step to remain the number-one automaker,” added Franz.

All of this speculation was launched by DaimlerChrysler CEO Dieter Zetsche stating that the company was open to all options for the Chrysler group, including a sale.

## Source: Automotive News ##

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In a turnaround from his statements last fall, DaimlerChrysler CEO Dieter Zetsche would not rule out a sale of the Chrysler Group. According to a report by Reuters, Zetsche said all options are on the table.

“In this regard, we do not exclude any option in order to find the best solution for both the Chrysler group and DaimlerChrysler,” said Zetsche.

Following Chrysler Group’s $1.48 billion third-quarter loss, DCX CFO Bodo Uebber refused to rule out selling Chrysler. However, DaimlerChrysler issued a statement the next day saying Chrysler wasn’t for sale.

Zetsche refused to comment on a report that DCX has begun talks with General Motors for the Chrysler Group. Sources say that talks are in full swing but at an early stage.

Reports also indicate the Zetsche has hired investment bankers to review strategic options for the Chrysler Group.

## Source: Automotive News ##

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While facing the same automobile weight challenge as other automakers, DaimlerChrysler is looking to address the overall weight gain in its vehicles.

According to Thomas Weber, DaimlerChrysler’s board member in charge of group research and development, vehicle weight has grown between one-half of 1 percent and 1 percent per year. And said that DCX wants to stop the trend, which will also help to reduce fuel consumption. DCX has begun to use more ultrahigh-performance steels and aluminum. While the new C-Class weighs the same as the outgoing model, due to new technolgies, electronics, etc, the body shell is about 18 pounds lighter.

Weber also said that while Chrysler and Mercedes will continue to increase component sharing, there will not be platform sharing.

## Source: AutoWeek ##

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The Chrysler Group today announced a three-year plan that will cut 13,000 jobs and close its Newark, Del., assembly plant, which builds the Dodge Durango and Chrysler Aspen SUVs. The Recovery and Transformation Plan seeks to return the automaker to profitability by 2008.

The 13,000 job cuts will complete by the end of 2009, and will consist of 11,000 hourly workers and 2000 salary employees. 9,000 of the juob cuts will be in the U.S. and 2,000 in Canada.

The plan will eliminate a shift at the Newark Assembly Plant this year, before idling the plant in 2009. Chrysler will also cut a shift at the the Warren, Mich. Truck Plant, this year. In 2008, it will eliminate a shift at the St. Louis South Assembly Plant that builds minivans. Chrysler will also close it parts distribution center in Cleveland this December. The cuts will reduce total production capacity by 400,000 units per year.

Chrysler CEO Tom LaSorda said the automaker will have to learn to do more with less, and has set a goal of reducing its product platforms from 12 to seven by 2012. While Mercedes is trying to prevent platform sharing with Chrysler, DCX CEO Dieter Zietche is likely to be behind plans to share architectures between Chrysler and Mercedes.

Full press release after the jump.

## Source: DaimlerChrysler ##

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