Analysts MorganStanley have downgraded Volkswagen from “Equal weight” to “Underweight”, expecting the company to underperform the industry in the near future. Reduced earnings, exchange rate fluctuations, development costs and launch/marketing costs are all factors influencing this decision.
The economic situation in the Chinese market needs to be evaluated carefully, Continental’s President Manfred Wennemer told the German Press Agency (dpa). Volkswagen as a client is currently more valuable than the entire Chinese market. To supply Volkswagen does not entail building a tyre factory or buying a tyre manufacturer. On the other hand, Continental is interested becoming involved with its brakes technology in this potentially lucrative market and will work together with partners in this area.
Continental Automotive Systems and Volkswagen have developed the Phaeton – with a chassis system with all-round semi-active variable control pneumatic suspension. The Electronic Air Suspension (EAS) resolves the differences between optimal handling and comfort by calculating and establishing the correct suspension force required every 10 – 15 milliseconds. The system is an integral element of a chassis solution incorporating engine management, brake control and stability control.
The oe alloy wheel suppliers get a lot of orders from car manufacturers these days. Even Volkswagen – in urgent need of a large quantity of alloy wheels – is looking for a qualified supplier in Turkey. But for a lot of companies this has bred complacency. So take care, alloy wheel manufacturers, because the steel wheel producers have not been sleeping in the meantime. Several new car models are being fitted with the latest in steel wheel designs. Concerning the weight of the wheel, the light steel version can be favourably compared with the level of the average alloy wheel. As far as price is concerned, steel is more economic and, in the field of design, a lot of developments have taken place.
Two weeks ago William “Bill” Ford (44) played his part in the fall of Jacques Nasser and took on the responsibility for the company himself. Since then he has taken every opportunity to emphasise that he is very interested in repairing the ruined relationship between Ford and Firestone. Many newspapers stressed that his two great grandfathers were the founders of Ford and Firestone and his mother was born a Firestone. But sentimentality alone is not sufficient motivation. Almost single-handedly the now-resigned Ford boss Nasser ordered the additional recall of 12 million Firestone tyres that will burden the company’s balance sheet with a figure in excess of two billion US-Dollars. This has been regarded as completely unnecessary by Firestone and the tyre manufacturer has rejected any responsibility for this act. After the US safety administration (NHTSA) and Firestone had agreed on a voluntary recall of some hundred thousand tyres, costing the tyre manufacturer a two-figure million Dollar amount of money, Firestone regards its attitude as justified. Ford wanted to present the bill to Bridgestone/Firestone at the right time. This may not be possible, in legal terms, the car producer might have no grounds against Firestone. It is possible that a voluntary agreement could provide a way not to lose the face in front of the shareholders. If Bridgestone/Firestone were to resume its old position as a key supplier, settlements to accounts could be presented in a plausible way, as has already happened for example in the case of General Motors and Volkswagen in the “Lopez Affair”.
The turnover of car manufacturer Audi increased last year to 39 billion DM (1999: 29.6 bn DM). The Italian importer Autogerma S.p.A., which distributes Volkswagen cars in Italy, is included in this figure for the first time. Worldwide, Audi sold 653,404 cars in 2000; a 2.9 per cent increase over 1999.
The European End of Life Vehicle directive (ELVD), due to come into force in 2007, has threatened to be expensive for car manufacturers. Just how expensive is shown by press reports that Volkswagen has announced that it will be setting aside DM 1 bn in order to comply. BMW has already set aside half this figure and Daimler/Chrysler up to DM 400 m. Other manufacturers are expected to wait until next year
Lear Corporation (Southfield, Michigan/USA) and Beru (Ludwigsburg/Germany) have signed a Memorandum of Understanding to jointly design and develop Tyre Pressure Monitoring systems for the global automotive market. Under this strategic partnership, the two companies will develop Tyre Pressure Monitoring Systems that will relay information to drivers through the electronic architecture used for the Remote Keyless Entry System. The joint venture will combine Lear’s capabilities as the North American leader in Remote Keyless Entry Systems with that of Beru, the market leader in Tyre Pressure Monitoring Systems in Europe.
Continental Teves plans a joint venture with the Shanghai Automotive Brake Company (SABC) – subject to the approval of the Chinese authorities. The aim is to provide the market with a complete brake systems package from one source. SABC already manufactures Continental Teves brake components under license, and produces components for both Volkswagen and General Motors.
Jose Ignacio Lopez, who joined Volkswagen from General Motors in 1993 and was forced to leave three years later, is facing charges in the USA of industrial espionage. Lopez was involved in a car accident in 1998 in which he sustained serious head and brain damage. It is unlikely that Spain will agree to his extradition to the USA to stand trial.
Goodyear, Toyo and Cooper were the losers in mid May, although Toyo shares – like those of Pirelli – had increased in the beginning of the month. In the automotive industry, BMW, Mitsubishi and Volkswagen were the heaviest losers. But the shares of DaimlerChrysler, General Motors, Honda and Toyota lost as well. DaimlerChrysler, Fiat and Volvo even fell to an all year low.
In the first week of July Goodyear shares were down, while Bridgestone, Michelin and Toyo Tires were all winners. Only a short time before, at the end of June Goodyear and Michelin shares had gone down as well as car manufacturers Mazda, General Motors, Volkswagen and BMW lost drastically. Mid June almost the same situation: Goodyear going down (this time Bridgestone and Cooper too) leaving only Yokohama as a winner.
Light alloy wheel supplier Ronal has been honoured by the Volkswagen Group with the Corporate Supplier Award “The Leading Edge”. Ronal is a supplier of the car brands VW, Audi, Seat and Skoda and has also received new development orders for the prestigious Bentley brand.
In a list of the 100 largest German industrial and trading companies, published in the newspaper Süddeutschen Zeitung, Continental was ranked in 34th place, with a 1999 turnover of 9.132 bn. Euros. This is a rise of eight places from the previous year’s list. The leading trio remains unchanged; undisputed leader is still DaimlerChrysler, followed by Volkswagen and Siemens.
This year alloy wheel producer BBS celebrates its 30th birthday. BBS is not one of the biggest producers of aluminium wheels but intends to grow significantly: from 2003 BBS plans to build up capacities of more than 4 million pieces a year at its headquarters in Germany’s Black Forest town Schiltach, at Italy’s Ruina factory near Ferrara and at a new plant in Herbolzheim near Freiburg. BBS is an oe supplier for car brands like BMW, Mercedes (AMG), Porsche, Ferrari, Jaguar, Saab, Volvo, Peugeot and Volkswagen and specialises in highly sophisticated wheels which means that the wheels are in extreme sizes or modular or have additional other special features. The history of BBS includes a lot of success in motorsport. BBS has been producing wheels for motorsport since 1974, and in 1991 the cooperation with Ferrari began. High-end products are the forged magnesium wheels for Formula 1 which are also flow-formed. Not only Ferrari with top driver Michael Schumacher, but also Benetton, Jaguar, Arrows, Prost, and hundreds of racing teams in other series all over the world trust in racing wheels by BBS – one of the main reasons that BBS is also the image leader in the alloy wheel aftermarkets of the world. Learn more about BBS in NEUE REIFENZEITUNG’s October issue.
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