Capital concern by xumiaomaio


									  John Mellor's                               Australia’s Number One Automotive Industry Journal

                                GoAuto News
  November 19, 2008                60,000 READERS WEEKLY                                            No. 460

   Credit crunch? Financial crisis?
   Australian orders commence for Aston Martin’s
   $4 million car - page 12

 Capital concern
Leading financier defends $10,000 application fee amid criticism from FCAI, dealers
            By DAVID HASSALL                      and therefore be refunded the $10,000 fee.          proceed with us,” said Mr Abbott.
ONE of Australia’s leading motor dealer              However, a number of dealers have                   “It certainly makes them think whether
financiers has defended introducing a              expressed their concern about the fee, and          or not they’re serious with us and I guess
$10,000 application fee in the face of            Federal Chamber of Automotive Industries            everybody who has come to the table has
stinging criticism from the industry.             (FCAI) chief executive Andrew McKellar              been willing to pay it because they know
   Capital Finance Australia Ltd claims that      has described the charge as “repugnant”.            they’re going to settle with us.
it introduced the fee – which is refundable          “In the current market, we have something           “I’m not profiteering because I’m doing
if finance is approved but not refunded if         that’s verging on an emergency situation            a whole lot of work and if they settle with
the dealer is unsuccessful – to discourage        facing many businesses and, while I                 us I’m not getting any money at all. If they
unnecessary and time-consuming applications       appreciate that there’s an increased demand         don’t settle with us, it means that they’ve
during the current credit crisis, with hundreds   now on the other financiers, I think to present      gone and shopped several other financiers at
of new requests having to be processed to         that sort of charge … it doesn’t represent          the same point in time.
cover for the withdrawal from Australia of        the cost of processing the application,” Mr            “We don’t have enough time to get all
GMAC and GE Money by December 31.                 McKellar told GoAuto.                               these applications done in the next 60 days.
   At the same time, the federal government          “It’s a practice that I find repugnant.”          There’s 600 dealers looking for finance, so if
is believed to be on the verge of announcing         Mr Abbott agreed that the $10,000 fee            they all go to two financiers to see if they can
a state-backed scheme to resolve the massive      was not normal practice in the industry, but        get an approval, that’s 1200 applications that
credit shortfall for dealers – estimated at       said it was necessary to avoid wasting time         we’re doing. We don’t have the resources to
between $2.7 billion and $3.0 billion – left      processing applications from dealers who            do all that in 60 days.”
by the imminent departure of the two US           had also applied to other finance companies             Capital Finance is one of the three major
finance giants.                                    and may not ultimately settle with Capital.         car industry financiers left in Australia,
   The assistant general manager of Capital          He estimated the time required to assess         alongside ANZ subsidiary Esanda and
Finance’s motor division, Simon Abbott, told      an application at 40 to 50 hours, and the total     Westpac takeover target St George.
GoAuto this week that the company was not         number of dealers needing new so-called                The company has processed about half of
profiteering from the current crisis because of    ‘bailment’ finance for its stock at around 600.      the 50 applications it has received in the six
the amount of work involved in processing            “We’re just making certain that the people       weeks since the crisis began and Mr Abbot
an application and because he expects the         (who apply) are serious and we’re not going         said it had the capacity and finance available
approximately 50 dealers who have so far          through a process of getting an application         to handle more, but not for all dealers.
applied will ultimately settle with his company   approved for them and then have them not                        Continued next page

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                       GoAuto News                                                                                          November 19, 2008 Page 2

           Continued from previous page                  Meanwhile, to address the overall                contracting car market and the credit crisis
   “I suspect that there isn’t going to be            shortfall in bailment finance the government         would inevitably see some dealerships
enough credit to go around,” said Mr                  asked Future Fund chairman and former               fail, he said that they were “fundamentally
Abbott. “That’s one reason why I put the              Commonwealth Bank boss David Murray to              very sound, well-managed businesses” and
fee in place, to say, ‘Hey, if we’re going to         help create a special dealer financing fund          “the actual risk is likely to be extremely
go through this process of evaluating you, I          that would prevent healthy dealerships from         minimal”.
want to know that you’re serious.’                    closing simply through lack of credit.                 He said it was an urgent problem that
   “I think that everybody that we’ve                    The Australian newspaper revealed that           requires attention within days, not weeks.
evaluated will end up settling with us, so all        Mr Murray would present his plans to the               “It is something that needs to be addressed
I’ve done is make myself feel comfortable             prime minister on his return from the United        as a matter of urgency, otherwise there is a
that the work we’re doing will lead to a              States yesterday (Tuesday), as well as to           risk that the situation will begin to spiral
conclusion.                                           treasurer Wayne Swan.                               and the consequences of that could be
   “The worst thing that could happen is that            The Murray Plan is understood to include         catastrophic,” said Mr McKellar.
I go and do that work and they don’t settle,          enticements and guarantees (similar to those           “We’ve had good discussions with treasury
and then someone else misses out because              now applied to bank deposits) for the major         officials, and David Murray has made an
I’ve wasted the resources credit-assessing            banks to provide an estimated $2 billion to         evaluation of the situation and he appreciates
someone that had no intention of moving.”             the finance companies that deal directly with        the nature and the urgency of the problem.
                                                      the industry.                                          “Notwithstanding all the other problems
 John Mellor's                                           Mr McKellar told GoAuto that the FCAI            that are clamouring for attention at
                                                      was keen to stabilise the dealer credit situation   the moment, this is something that the
                   GoAuto News                        and that if the Murray Plan was accepted it         government is looking to reach a decision
 PUBLISHER: John Mellor                               would “really help to fundamentally address         on as a matter of urgency.
 EDITOR: Terry Martin                                 the immediate challenges”.                             “It’s a ‘this week’ issue in my view.
 MANAGING EDITOR: Marton Pettendy                        “We don’t want to see a situation emerge         There’s further work to be done to get this
 JOURNALISTS: David Hassall, Byron Mathioudakis,
                Philip Lord, James Stanford
                                                      where there’s a risk that any other players in      in place so we need a decision to press the
 PRODUCTION AND GRAPHICS: Chris Harris, Luc Britten   the market will be forced to withdraw out of        button and then we need to get on with
 SUB-EDITOR: Katrina Webb                             necessity,” said Mr McKellar.                       putting an appropriate mechanism in place.
 NEW MODEL DIARY: Lou Paolino                            “That’s the motivation behind trying to             “We want to ensure that well-managed,
 Produced by GoAutoMedia: Ph: (03) 9598 6477          put together some fund package. Our first            viable businesses are not sent to the wall
                                                      preference has been to try and attract the          because of a lack of funds through no fault
         ADVERTISE: Steve Butcher                     interest of the banks and I think that’s why        of their own.”
         Ph: 0419 562 110              David Murray was approached, given his
                                                      extensive network in the banking sector.”               Ford Credit ‘above water’ – page 6
     SUBSCRIBE FREE:                      Although Mr Kellar said that the                   Read more: Dealer credit crisis continues

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                    GoAuto News                                                                                        November 19, 2008 Page 3

‘Holding its own’
Ford Australia chief has
no plans for more job cuts,
but future is in US hands
             By MARTON PETTENDY
FORD Australia president Marin Burela
insisted last week that he had no plans for
further job cuts, claiming his company was
in better shape than its rivals following
widespread local and global “divestiture”.
   Ford’s new Australian chief also said
the nation’s number-three car-maker will
                                                                                                                                   Marin Burela
“benefit on multiple fronts” from the federal
government’s new car industry plan, but            the way that we’ve actually handled it – the      and one of the very first things he did was to
admitted the local subsidiary, which made an       dignity, the sympathy, the understanding.         go out to the markets and secured a level of
$87.2 million loss in the 2007 fiscal year, was        “Just so that you understand, I have           funding that, when one looks back now, would
inextricably linked with the success or failure    written personally to every single employee       say that was an absolute stroke of genius. The
of its parent company, which earlier this month    thanking them and wishing them and their          divestiture that took place once again under
posted a $US2.98 billion third-quarter loss.       families well. I think this is the first time      his leadership was also a stroke of genius.
   Mr Burela took over the top job at              this has ever been done in the history of            “I think we’re probably better positioned
Campbellfield on October 1 and within two           the automotive industry here in Australia,        in terms of where we are versus any of our
weeks called for a further 450 redundancies        because I wanted to personally communicate        competitors. Alan has come out publicly
– in addition to the 350 announced in              with them for what they’ve done and the           and said that as well. Nevertheless, he
August, bringing the total number to 800           feedback from just that as an initiative has      and the team are continuing to work with
before Christmas.                                  been overwhelming.”                               the authorities and the government in
   Last week, he said Ford Australia was              Asked if Ford’s local operation had a          North America in terms of arranging the
“holding its own” in challenging times.            commitment from Detroit that secures              appropriate level of industry support.
   “I have no plans for further job cuts,” said    its short-term future, Mr Burela said his            “I think based on where we sit, although
Mr Burela in a media phone conference on           company was fundamentally linked to its           things are challenging and very tough, we’re
November 13, one day before newly redundant        parent company’s success.                         holding our own.”
Ford workers began leaving Ford’s Geelong             “Clearly we’re very, very much linked             Mr Burela said the Rudd government’s
and Broadmeadows plants for good.                  and tuned into our parent company,” he said.      $6.2 billion automotive industry package – ‘A
   It is understood Ford received more than its    “Nevertheless, our focus here in Australia is     New Car Plan for a Greener Future’ – was not
required number of voluntary redundancies          to ensure that we’re generating the right level   a “bailout” but a blueprint for sustainability
from both blue- and white-collar employees,        of cash to in fact be able to sustain ourselves   for Australian car-makers by encouraging
following the offer of financial packages           and the reality is it’s been challenging and      them to invest in the latest technology.
comprising 3.1 weeks pay for every year of         tough, but we’re holding our own.                    “My view is there is enough there for
service (capped at 75 weeks), plus $1000 for          “But we are obviously very, very linked to     us to work with. We’ve just got to go and
every year of service, sick leave and long-        the parent company’s fortunes and the way         work at it. This package quite frankly isn’t
service leave.                                     it moves forward.”                                a bailout of the industry because what the
   “We’ve taken tough decisions, ones that I          Mr Burela said Ford Motor Company              government has done is said, ‘We’ll invest
certainly didn’t take lightly. We’ve worked        CEO Alan Mulally’s foresight in securing          in you if you invest in yourself’.
very, very closely with our unions and our         capital and selling off Aston Martin, Jaguar         “That’s the clear message. ‘What we’re
people, the process that we’ve gone through        and Land Rover over the past 18 months            going to do is invest in you to make smart
has been extremely professional and                had made the Blue Oval financially stronger        decisions by bringing forward sustainability
sensitive, and I’ve received an enormous           than its rivals.                                  as the clear framework for what the industry
amount of feedback across the plants and              “Alan Mulally, when he came to Ford            should be in Australia.’
across Ford of Australia, acknowledging            Motor Company, saw the cloud on the horizon                   Continued next page

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                     GoAuto News                                                                                    November 19, 2008 Page 4

‘Holding its own’
          Continued from previous page
   “The onus is now back on us as
manufacturers to say, ‘How do our cycle
plans and product plans fit into that and do we
need to go out there and do some rethinking
about the things we thought before versus the
things we need to do for the future?’”
   While he said it was too early to detail
how, Mr Burela said Ford Australia would
                                                                                                                                 Alan Mulally
benefit from the new car plan in a number of
different ways.                                  need to do is go back and look at the plan and   we stand in terms of emissions. From an
   “I think we’ll benefit on multiple fronts.     say are there things that we should add to the   emissions standpoint we’re neither worse nor
The green car fund is going to stimulate the     C-car plan that will then help make the C-car    better than anyone else – we’re about on par.
manufacturers to look at how does it move        plan even more viable than what we believed         “The real core strength that we have is that
forward from 2009 and beyond,” he said.          it to be at the time we made the decision to     we’ve been working very hard on sustainability
“Have we looked at that and what are the         build it in Australia. So, can we complement     issues in other parts of the company, and I’m
things we’re going to do? Too early to say.      the current plan that we have?”                  going to make sure we use that as an enabler
What we need to do is now dissect the plan          It is not known whether the development       for the plans we have in Australia so that as
in terms of its detail to look at number one     of new direct-injection LPG versions of the      we move forward that our product line-up
where is the market going and how does           Duratec V6 due to power the Falcon by mid-       absolutely plays to the strengths of the plan
the plan support the market growth over          2010 or a diesel version of the facelifted       and society. The world has changed rapidly
time and how do we then ensure that we are       Territory on sale next year will qualify for     over the last five or six years.
investing in technologies and products that      funding under the expanded Green Car                “When I was announced (as new Ford
actually fit the market and that also plays to    Innovation Fund, which has been brought          Australia president), Kim Carr (and I) had
the strengths of the plan.                       forward to commence next year and more           our first conversation within about five
   “That’s what my team and I are doing at       than doubled to $1.3 billion until 2020.         days and since then we’ve had continuous
the moment, quite frankly.”                         Asked if the new funding package would        dialogue about how we make manufacturing
   Asked if Ford’s plan to manufacture the       change the future direction of Australian        a sustainable industry from an automotive
next-generation Focus small (C-segment)          car-makers and, if so, why it took financial      perspective.
car in Australia from 2011 would qualify for     incentives from government for them to do           “I am convinced, based on what I’ve
the new federal co-investment funding, Mr        so, Mr Burela said: “I think it will make the    seen from the PM and his team, that they
Burela said the plan would be revisited to       industry go back and reflect. It will seriously   are absolutely determined to have a viable
ensure it attracts maximum leverage.             start looking at environmental issues.           automotive industry in Australia.”
   “To be honest, I don’t know where the            “I’m pretty pleased with where we are.
qualification would be, but what we would         We’re holding our own in terms of where               Falcon to feast on LPG – next page

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                        GoAuto News                                                                                                          November 19, 2008 Page 5

Falcon to feast on LPG
Spearheaded by LPG,
Ford aims to reclaim 35%
of the large-car segment
             By MARTON PETTENDY
FORD has blamed “the perfect storm”
of economic conditions for the new FG
Falcon’s lacklustre initial sales performance,
but claims its volume-seller’s increased
popularity in October is evidence of a
turnaround that will not be complete until it
reclaims its rightful 35 per cent of the large-
car market segment.                                         get the message out that the Falcon’s such                 benefit from lower fuel prices, which are
   In his first monthly media briefing since                  a fantastic car. Usually we would expect                   expected to return to as low as $1 per litre
assuming the presidency of Ford Australia on                to see more following a major new model.                   just six months after some industry experts
October 1, Marin Burela said last week that                 Unfortunately, we had a bit of a slow start,               had predicted prices as high as $2 per litre,
lower fuel prices and interest rates will improve           but we’re now slowly starting to build some                Mr Burela said: “I think it will.
the fortunes of Australia’s sagging large-car               momentum again. Falcon is now starting to                     “The LPG thing I think is a great thing for us
segment, and in particular the new Falcon,                  get its fair share.                                        and we’re going to work hard on that … We’re
which he believes will be the biggest winner                   “I don’t think that I’ll be satisfied in terms           going to work very hard in communicating to
to emerge from the federal government’s                     of its fair share until we get somewhere                   the market that we’re the only ones that have
increased LPG vehicle subsidy.                              around the 35 per cent plus. Once we get                   got a factory-fitted dedicated LPG Falcon …
   Falcon sales were 12.6 per cent up month-                into that category then I think it’s going to              particularly now with the new government
on-month in October, while its nearest                      start to put a different perspective on the                incentive that doubles the retail buyers’
rivals in Holden’s Commodore and Toyota’s                   things we’re doing,” he said.                              incentive to go and buy one.
Aurion were down a respective 14.2 and                         Ford’s Falcon achieved its largest ever                    “The (Falcon LPG) option price is about
31.7 per cent on the same month last year.                  share of the large-car segment (35.6 per                   $1400, the incentive to get one is $2000,
   Honda’s Accord was the only other sub-                   cent) in 2003, but as a proportion of overall              and when you go to Western Australia the
$70,000 large car to be up (by 5.5 per cent)                new-car sales the category has been in                     state government offers another incentive
in the segment during October, when the                     freefall since it comprised 43.4 per cent of               on top of that. So we see that as a huge
Commodore claimed a dominant 44.3 per                       all new passenger cars sold in 1996.                       opportunity for us and I’m moving my team
cent of the category, compared to the Falcon’s                 Australia’s once-dominant large-car                     very strongly … to really focus on that over
31.9 and the Aurion’s 14.5 per cent.                        segment slipped 19.1 per cent overall in                   the next few months.
   The Commodore remains both Australia’s                   October to remain down by 15 per cent so                      “I feel quietly confident that what we may
favourite model and the top-selling large car               far in 2008, when 95,485 sub-$70,000 car                   be looking at is a pivot point. Previously with
with 41,315 sales to October (down from                     sales represented just 11.1 per cent of the                the $1000 incentive it was still costing people
49,081 during the same period last year)                    total new-car market.                                      money to go to LPG in terms of the option.
versus 26,802 Falcons (down from 28,021                        The Accord is the only shining light in                 Now it actually benefits the consumer by about
in 2007).                                                   the segment in year-to-date terms (up 12 per               $600 and then on top of that your running costs
   “Falcon is now starting to gain some                     cent), with Falcon sales down 4.3 per cent                 are actually going to be lower.”
traction,” said Mr Burela. “(It gained) a 32                this year, Aurion down 11.6 per cent and the
per cent share last month and we’re building                Commodore 15.8 per cent.                                              FULL STORY: CLICK HERE
on that. I think we’re now slowly starting to                  Asked if he thought the Falcon would                         Ford Credit ‘above water’ – next page

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                      GoAuto News                                                                                       November 19, 2008 Page 6

Ford Credit ‘above water’
Ford’s finance arm remains
in the game as dealer
credit woes continue
             By MARTON PETTENDY
FORD has emphasised that it remains
committed to its financing subsidiary in
Australia for the time being, despite heavy
losses in the US and continued industry
speculation that Ford Credit will follow
recent moves by fellow wholesale and retail
automotive trade financiers GMAC and GE
Money to withdraw from the local market
on December 31.                                    we’ve taken the right steps to keep ourselves     say in the future once our discussions are
   “The good news is we haven’t stopped            above water and I’ve got to tell you it’s very,   concluded with the finance company sector”.
financing,” said Ford Australia president           very challenging, but at the same time we’ve         It is believed the government and industry
Marin Burela last week. “We’re in the game,        not decided one way or the other.                 bodies including the Federal Chamber of
we’re still there. It is very tough, there’s          “We’re just holding the line, working          Automotive Industries (FCAI), the Victorian
no question about that. We’re feeling the          with our dealers and managing the business,       Automotive Chamber of Commerce (VACC)
same pressures that GE and GMAC have               and let’s just continue to focus on that and      and the Motor Trades Association of Australia
felt, but we’re still writing paper and we’re      that’s exactly what I’ve said to them (Ford       (MTAA) are continuing to explore possibilities
supporting our dealers.                            dealers),” he said.                               including legislation to extend the December
   “We’re obviously looking at this on a              Ford Credit is one of a number of brand-       31 deadline set by GMAC and GE.
day-by-day, week-by-week basis but we are          affiliated financing companies that operate            “Where we would like to see government
still here and we’re doing the right thing by      in Australia but the exodus of GMAC               become active is in relation to the deadlines
our dealers.”                                      and GE Money leaves just three major              imposed on the dealers,” said VACC
   Mr Burela said he met with the                  automotive financiers – and many smaller,          executive director David Purchase. “Those
metropolitan Ford dealer body in Melbourne         non-metropolitan and/or heavily leveraged         who have been advised their funding will
last week. When asked by journalists whether       dealerships and other automotive businesses       cease have been given 60 days’ notice to
the wind-up in Australia of GMAC and GE            at risk of being unable to secure the finance      find an alternative provider. This period of
Money – which together are believed to             to continue trading.                              notice is too short and unreasonable.”
have financed the “floor plan” showroom                 Its somewhat non-committal reassurance            According to a News Limited report this
vehicles of half of all new- and used-car          to Ford dealers comes in the same week            week, the VACC has requested an extension
dealers in NSW and up to 40 per cent of            prime minister Kevin Rudd said his                to six months and has sought federal and
Australia’s new-car retailers, potentially         government was “acutely aware” of the             state government assistance in convincing
affecting an estimated 20,000 jobs – would         situation and industry minister Kim Carr          financiers to agree to these terms.
result in Ford Credit expanding or sitting         said he expected developments to occur in            “The irony is that there is no better time to
tight in Australia, Mr Burela said: “We’re         the “very near future”.                           buy a car because of the deals being offered,
very much sitting tight.                              As reported last week, Mr Rudd said            but people are losing confidence all over the
   “I think what you need to do is provide         that federal treasury was in “continued           place,” Mr Purchase said.
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                        GoAuto News                                                                                November 19, 2008 Page 7

GM still ‘Holden’ on
Carr insists Holden is safe
as GM sells Suzuki stake
and seeks bailout funds
                 By DAVID HASSALL
SOUTH Australian treasurer Kevin Foley
admitted last week that he had failed to get
an audience with General Motors executives
in Detroit to discuss Holden’s future when
in the US earlier this month.
   However, federal industry minister Kim                                                                         Holden Ute production at
Carr said he had been given assurances that                                                                      Elizabeth, South Australia
the troubled US car giant would retain its          “He has made the point very, very clear to      Asked if he would like the current ‘lame
Australian production operation.                  me how important it is that we not only keep   duck’ congress to act before president-elect
   GM is strapped for cash as it fights to plants of this quality within the GM family            Barack Obama is inaugurated on January 20,
stave off bankruptcy, and this week moved but also that we have a very strong supply             Mr Wagoner said “that would be terrific”.
to raise $US232 million ($A355 million) by base to ensure the ongoing prosperity of the             “Action this year is critical and, given the
selling back its three per cent stake in Suzuki company here in Australia,” Senator Carr         change-over, the (Bush) administration’s
Motor Co while continuing to co-operate in told reporters on Thursday.                           lame duck session would seem like the
emerging markets and in developing new              Speaking to Automotive News in the US,       right time and the important time to address
automotive technology.                            the GM chief said that Hummer was the          this.”
   It has also sought unspecified bailout only brand GM was looking to sell and that                 GM expects to reduce its $2 billion-a-
funds – that is, “a protective umbrella of there has been some interest.                         month “burn rate” by slashing costs and
available liquidity in the worst case” – from       “We’ve got some other assets we’re           selling assets, but it will still run out of
the German government for its                             looking at selling as well – but not   cash by the middle of next year unless the
European branch Opel.                                     brands,” said Mr Wagoner.              government provides funding.
   Nonetheless, GM chief executive                           He also said there was no thought      The company has also delayed a number
Rick Wagoner said last week that the                      of selling GM China or Opel in         of model programs, including the much-
company had no plans at this stage                        Europe because those operations        needed new Saab 9-5 (which is now
to sell off any overseas subsidiaries                     were too important for the future      scheduled for 2010) and the Cadillac CTS
or brands – other than Hummer.                            health and development of the          Coupe (which was to have been launched at
   Mr Foley told the South Australian                      company globally.                     the Los Angeles auto show later this week).
                                           Kevin Foley
parliament last Wednesday that he                            Mr Wagoner defended the US             In an interesting twist, the European
had sought talks with Mr Wagoner while car-makers, saying that the industry was                  Union has threatened to complain to the
in the US the previous week but had not on its knees because the market had fallen               World Trade Organisation over unfair trade
been successful because senior management to 11 million units due to the credit system           support if the government backs a rescue
“have been somewhat preoccupied with failing, not because the manufacturers were                 plan for any of the US car-makers.
matters of survival”.                             suddenly building poor products.                  Back in Australia, Mr Foley told the SA
   “I will be back in the United States in          “Under these extraordinary circumstances     parliament that, despite being stonewalled in
January and the intention is to meet with we do need funding support and we need to              Detroit, he remains confident that Holden’s
senior management at that time,” Mr Foley move now,” he said, again calling on the               Elizabeth plant will survive.
said.                                             government to take immediate action. “I           “It is clear that the Bush administration,
   But Senator Carr, who was in Adelaide just don’t see what’s gained by waiting to              the Congress and the Obama administration
selling the benefits of his new $6.2 billion address that. It seems like we ought to be           will not see the American car industry fail,
car plan, said that Mr Wagoner had told him addressing that right away to minimise the           just as the Rudd government here will not
that GM remained positive about the future damage that we would sustain that might be            see the car industry fail – and for South
of its plant in Elizabeth, South Australia.       longer-term in nature.”                        Australia that is good news,” he said.

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                      GoAuto News                                                                                    November 19, 2008 Page 8

FuelWatch defeat
FuelWatch plan defeated
in Senate as petrol heads
back towards $1 per litre
                 By DAVID HASSALL
THE federal government appears to have
abandoned its controversial FuelWatch
program after the Senate last week rejected
the proposed legislation.
   At the same time, industry experts suggest
that the bowser price of petrol will fall to as
low as $1 per litre by mid-December as a
result of plummeting world crude oil prices.
   Independent senator Nick Xenophon last
week sided with the Opposition to defeat
the national petrol price monitoring scheme       is finished,” said Victorian Automobile              “Just a month ago, thoughts of petrol at $1
legislation, which the government claimed         Chamber of Commerce (VACC) executive             a litre would have been pure fantasy, but no
would save motorists at the pump but was          director David Purchase.                         longer,” said Mr James.
opposed by motoring groups around the                “This is a victory for common sense. The         “The wholesale price has been falling
country.                                          national FuelWatch scheme was flawed from         over the past fortnight quite significantly.
   Senator Xenophon said that FuelWatch           the outset. It would not have saved motorists    The national average (wholesale) price is
– which would have required every service         money. In fact, it would have resulted in        down around $1.15, so if it stays there, or
station to post its prices for the following      higher petrol prices.                            falls even further, we’ll see pump prices
day – would not achieve the desired result           “FuelWatch was flawed because it               anywhere between $1 and $1.10 at the low
of saving motorists money.                        targeted retail fuel prices. The only way        end of the cycle. It’s a big change in a very
   “It was like one of those plastic dogs         to ensure cheaper fuel prices is to allow        short period of time for consumers.”
that sits on the dashboard bobbing its head       independent service station operators fair          Motorists in northern NSW will not be quite
up and down – it provides a distraction,          and equitable access to competitive fuel         so well off from July 1 next year, however,
but it doesn’t really do anything,” Senator       supply at the terminal gate. The wholesale       following the removal of a petrol subsidy
Xenophon told reporters.                          market is all but wholly in the hands of the     to allow northern NSW service stations to
   He then called on the government to            big oil companies.                               compete with those across the border in
instead tackle the arrangements between              “VACC recommends the ACCC and                 Queensland, where state taxes are lower.
buyers and sellers in the wholesale fuel          the new petrol commissioner turn their              In last week’s state mini-budget, the NSW
market if it was serious about fuel prices.       attention to the operation of the wholesale      Government said it would save $44 million
   Motoring organisations welcomed the            fuel market, the buy/sell arrangements and       by removing the subsidy of eight cents per
news, having been almost universally              the relationship between the oil majors and      litre.
opposed to FuelWatch and arguing that a           their supermarket partners.”                        To prevent NSW motorists and truck
similar scheme in Western Australia had not          With crude oil prices dropping to their       operators from filling up over the border,
resulted in lower prices.                         lowest level in almost two years, CommSec        the Queensland government is taking steps
   “While the government may decide to            economist Craig James said in a weekly           to ensure that its fuel subsidy will only be
reintroduce the proposed scheme at a later        market briefing last week that the bowser price   available to vehicles registered in that state
date, for now the message is clear: FuelWatch     would soon fall to as low as $1 per litre.       from Easter next year.

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                         GoAuto News                                                                                  November 19, 2008 Page 9

Clarkson Inc cashes in
Top Gear Live show
sells up a storm as car
brands rethink events
                 By JAMES STANFORD
THE Top Gear Live show appears immune
to the financial troubles affecting the
automotive sector, with customers snapping
up around 35,000 tickets for the Sydney
motor show event in less than a month.
   Organisers told GoAuto this week that they
had sold roughly half their target six weeks       attend the Australian International Motor       represented in Australia will be present at
out from the 75-minute stage show, which           Show in Sydney, they have both confirmed         the show,” Mr Tyrie said.
will held at the Acer Arena and features two       their attendance at the Brisbane event.            He admitted that the economic climate
stars of the British series, Jeremy Clarkson          Mr Nixon said show organisers were           could affect crowd numbers, but said that
and Richard Hammond, as well as a full             anticipating some members of the public         would be unclear until the show was held.
suite of automotive stunts, special effects, a     may react negatively to the absence of some        While Audi is yet to make an
prestige and performance gallery and a more        key prestige brands.                            announcement, GoAuto has learned it will
general “motoring showcase”.                          “We are predicting that there might be       host a stand at the Melbourne show next
   The popularity of the Top Gear event comes      some negative reaction; we anticipate that,”    year but will not go to Sydney. Company
after a slump in attendances at October’s          he said. “That’s why we are working on          insiders suggest the move does not represent
Australian International Motor Show in             some other strategies to offset the negatives   any bias, but that the German marque has
Sydney, which appeared to be hurt by the           that not every brand will be there.” These      made the decision to attend one Melbourne
worsening economic climate and the decision        strategies include sourcing a V8 Supercar       or Sydney show in a year but not both.
by several prestige brands to stay away.           and possibly some high-performance low-            BMW and Mercedes-Benz officials
   Top Gear Live has also attracted the            volume vehicles to brighten the show.           are yet to announce whether they will be
support of manufacturers including Audi,              Mr Nixon said the Brisbane show              attending the Melbourne show. Mercedes,
Land Rover and Lotus, which have all               organisers had not been invited to take part    however, has confirmed it will dramatically
agreed to major involvement with the show.         in discussions taking place between the         increase its investment in the Australian
   Ford and Holden are also believed to have       organisers of the Sydney and Melbourne          Formula One Grand Prix next March and
a presence, but GoAuto understands that both       events about setting up one single major        stage an even more exclusive customer and
have recently decided to downgrade their           show per year that will alternate between       media event than the multi-million-dollar
involvement given the current economic             those two cities.                               AMG extravaganza held at the Bathurst race
conditions.                                           He said the Brisbane show was strong         circuit earlier this year.
   The news that the Top Gear Live show            enough to remain relevant and independent.         The Melbourne F1 event will expand from
is tracking well comes as traditional motor           “The Brisbane show has a proven track        a traditional marque and private grandstand to
shows battle to retain manufacturer support.       record of producing a lot of strong sales       an on-track driving experience in which invited
   GoAuto has learned that Lexus has               leads,” he said. “And the fact that our floor    guests will be allowed to drive Mercedes
decided not to attend next February’s              space rates are far lower than the other        vehicles on the Albert Park street circuit on the
Brisbane International Motor Show, joining         shows definitely helps us.”                      Wednesday of the Grand Prix week.
other prestige brands including BMW,                  Melbourne International Motor Show              Mercedes-Benz Australia spokesman
Mercedes-Benz and Lamborghini. Chrysler            organiser Russ Tyrie was unable to confirm       David McCarthy said the track access would
has also decided not to attend.                    the final attendance rollcall for next year’s    give customers a unique experience. “We
   Event spokesman Chris Nixon said the            event, which starts on February 27, but told    believe that this is a world first,” he said, but
final list of manufacturers was not yet locked      GoAuto this week that the initial indications   declined to confirm whether the Grand Prix
in, but he did confirm some car-makers              were that it would get a lot of support from    test drive would cost more than the Bathurst
would be absent.                                   manufacturers.                                  spectacular.
   While Audi and Land Rover did not                  “At this stage the majority of brands                     Continued next page

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                     GoAuto News                                                                                  November 19, 2008 Page 10

Subaru downsizes
Subaru retrenches staff
in Australia as Inchcape
sees a bleak period ahead
                 By PHILIP LORD
                                                                                                                          Subaru Docklands
SUBARU Australia has retrenched an
unspecified number of staff across several       but Inchcape Australia Limited, Inchcape            Inchcape explained in its media statement
departments, including retail operations, as    Automotive Retail and AutoNexus.                 that the retrenchments were a direct result of
a result of the global downturn affecting its      Among the retail outlets Inchcape owns and    market conditions.
UK-based parent Inchcape plc.                   operates is the flagship Docklands dealership        “With the events in financial markets
   GoAuto understands that 1000 jobs are        in Melbourne, the largest Subaru dealership      across the world in recent weeks, consumer
being cut worldwide.                            in the world when it opened in 2002.             confidence has reduced substantially. As
   However, Subaru Australia would not             Like many car companies, Subaru               a consequence, trading conditions have
comment on the announced retrenchments          Australia suffered a significant sales decline    deteriorated significantly in the UK and
beyond a prepared statement issued to           last month. It was down 19 per cent for the      are weakening in a number of our other
GoAuto this week that said: “In light of        month of October, although for the first 10       markets,” it said. “We expect current
slowing economic conditions in Australia,       months of the year remains 1.5 per cent          trading conditions to remain difficult for
Inchcape Australia Limited has confirmed a       ahead of 2007 year-to-date.                      the rest of 2008 and throughout 2009. As
number of retrenchments across all business        The staff cutbacks have been applied to all   a consequence we expect our underlying
units but will not be publicly releasing        of Inchcape’s concerns in its major markets,     results for 2008 to be below consensus
specific numbers.”                               with the main reductions involving the           and for 2009 to be significantly below our
   Inchcape plc has dictated retrenchments      UK businesses, where the new-car market          previous expectations.”
across all Inchcape companies in Australia,     witnessed a decline of 18.8 per cent in the
which includes not only Subaru Australia        three months to September 30.                              Turbo trouble – page 18

                 Top Gear Live sells up a storm as car brands rethink their marketing activities
           Continued from previous page         has been fruitful even through there are still   have been busy taking care of other issues in
  Mercedes did not attend either the Sydney     some fine details to resolve before contracts     the last few weeks, including the difficulty
or Melbourne motor shows last year.             can be signed. Mr Tyrie told GoAuto that         to find finance and the Rudd government’s
  GoAuto understands the discussions            both the Victorian Automotive Chamber of         master plan for the car industry.
between the Sydney and Melbourne show           Commerce, which runs the Melbourne show,           “A lot of the focus of both organisations
organisers in order to come up with one major   and the Federal Chamber of Automotive            has been on the issues involving dealers and
show that alternates between the two cities     Industries, which organises the Sydney event,    the car plan,” Mr Tyrie said.

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                      GoAuto News                                                                                     November 19, 2008 Page 12

                  ‘The $4 million car’

 Aston Martin confirms first Australian order for the world’s most expensive car
                 By DAVID HASSALL                  his car will be delivered in early 2010.            “It is an expression of all the beauty we
ONE wealthy Australian has placed an order            The first of the 77 ‘production’ One-          could bring to a car, it’s an expression of all
for the most expensive car in the world – the      77s will emerge from Aston Martin’s              the emotions we can bring in the car, and
Aston Martin One-77 – which could cost $4          headquarters in Gaydon, Warwickshire, in         by this it is the expression of what Aston
million by the time it arrives here in 2010.       the fourth quarter of 2009.                      Martin stands for. So what you are getting
   It will be one of only 77 examples being           The newly independent company – which         here is what we understand is perfection.”
built by the British company, which last           was sold by Ford almost two years ago –             Each body is sculpted by hand from a flat
week finally revealed official photographs           wants to get the exclusive model into as         sheet of aluminium and is about 125mm
of the car it describes as “perfection”.           many countries as possible to act as halo        longer than a DB9, the carbon-fibre chassis
   Aston Martin regional manager for Asia-         cars, so fewer than 10 per cent have been        is made by an outside supplier, and the
Pacific, Marcel Fabris, told GoAuto that at         earmarked for the big UK and US markets.         interior and even some of the technical
least one of the hand-built supercars will            Aston Martin first revealed the One-77         aspects of the car will be tailored for each of
come to Australia and that there is “the           through an obscure teaser photo three months     the 77 owners.
potential of one or two more”.                     ago and taunted enthusiasts further with            British reports suggest that the lightweight
   Unlike the Bugatti Veyron – the only car        a mostly covered car at last month’s Paris       (1500kg) One-77 will be able to accelerate
that comes close to the Aston on price – the       motor show, so these are the first unbridled      to 100km/h in about 3.5 seconds and have a
One-77 will have full local certification           images seen of the hand-built supercar.          top speed approaching 220 miles per hour
and will therefore be able to be registered           Although it will fall short of the Veyron,    (354km/h), depending on gearing.
and driven on Australian roads. As part of         Aston Martin CEO Ulrich Bez said that he            “It is going to have some fantastic
Aston Martin’s global certification program,        was not concerned about comparisons or           performance,” admitted One-77 program
the One-77 will be crash-tested at Volvo’s         his car’s performance figures. Dr Bez has         manager Chris Porritt. “It will put a
test lab, including specific aspects that are       revealed that the car’s 7.0-litre V12 engine –   real smile on your face when it’s doing
unique to the Australian Design Rules.             a development of the 6.0-litre unit in the DB9   something. The noise that will come through
   The official price of the One-77 is              and DBS – will produce 700 horsepower            the exhaust when it starts up will be fantastic
£1,050,000 – which is $A2,340,000 at the           (522kW) and about 700Nm of torque.               – it will sound like nothing that you’ve ever
current exchange rate – plus local taxes.             “It will have seven litres and 700            imagined before.
   For Australia, that means an extra 10 per       horsepower and it’s called One-77 – there           “The big thing on this particular car is
cent import duty ($234,000), 33 per cent           are a lot of sevens in this – but Aston Martin   effortless ability to be able to get to speed, so
luxury car tax ($849,000), 10 per cent GST         is not about figures,” said Dr Bez. “I do not     you can imagine being able to accelerate in any
($342,000) and stamp duty of about five             care if the car has three point something        gear faster than anything else on the road. It is
per cent ($188,000), for a grand total of          seconds from zero to 100 or the maximum          beyond feeling fast; it’s almost to the point of
$3,953,000.                                        speed is 200 miles per hour or whatever,         feeling a little bit, ‘Should I be doing this?’”
   Mr Fabris said that the first Australian buyer   this is not so important for us – it’s more
has paid a $200,000 deposit and has been told      important what is beyond the figures.                       FULL STORY: CLICK HERE

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                     GoAuto News                                                                                 November 19, 2008 Page 13

                                                                            Azure lure
                                                                                to a T
                                                                                      Bentley creates the world’s
                                                                            quickest convertible with the Azure T
             By MARTON PETTENDY                  from 5.9 seconds for the garden-variety         the first of only a handful of examples due
FOR those in the market for a top-end            Azure) and on to a top speed of 288km/h –       to touch down in Australia from October
convertible with a little more luxury than the   up from 274km/h.                                2009. It is expected to attract mostly
Ferrari Spider Scuderia revealed last week,         For what it’s worth, the Azure T officially   “existing Azure customers and Arnage range
but who don’t quite want to stretch to Rolls-    consumes 98 RON premium unleaded fuel           loyalists”.
Royce’s $1.19 million Phantom Drophead           at the rate of 14.1L/100km on the highway          Key exterior features unique to the Azure
Coupe, then Bentley’s Azure T could be           and 28.8L/100km in the city, for a combined     T include 20-inch five-spoke ‘Bright Finish’
right on the money.                              EU consumption figure of 19.5L/100km.            alloy wheels, a retractable ‘Flying B’ bonnet
   Due to make its world debut at the Los        The average EU CO2 figure is 465 grams           mascot, dark-tint matrix upper and lower
Angeles motor show this week, the Azure          per kilometre.                                  grilles, ‘Le Mans’ lower front wing air-
T is billed as the world’s quickest and             Of course, a host of interior and exterior   vents, a Bentley ‘Jewel’ fuel filler cap, twin
torquiest luxury convertible and features an     changes further differentiate the T from        exhaust outlets and the choice of 42 exterior
even more powerful version of the standard       its lesser Azure sibling to justify its price   paint colours.
($684,100) Azure convertible’s 6.8-litre         premium, which is expected to be similar           Inside, the soft-topped T offers diamond
twin-turbocharged 90-degree V8.                  to the $42,500 that buyers of the Arnage        quilting on its seats and door panels, drilled
   With 11 per cent more power (373kW at         T ($574,000) pay over the Arnage R              alloy brake and accelerator pedals, ‘Engine-
4200rpm – up from 336kW at 4100rpm)              ($531,500).                                     turned’ aluminium fascia finish, black
and 14 per cent more torque (1000Nm at              So expect a pricetag of around $720,000,     instrument faces, embroidered ‘Bentley’
3200rpm versus 875Nm at 1800rpm), the            making the Azure T even more expensive          seat emblems, an iPod/USB interface, the
Azure T offers the same positively bruising      than Bentley’s current range-topper, the        choice of eight unbleached veneers and
performance as the Arnage T sedan released       $695,700 Brooklands Coupe.                      25 leather trims, a knurled and chromed
in 2002.                                            Mind you, while that is at least $100,000    gearshifter and knurled finishes for the organ
   Indeed, it is enough to heave the 2695kg      more than Ferrari’s fastest convertible, 10     stops, mirror adjusters, knurled interior and
drop-top to 100km/h in 5.5 seconds (down         of which have been earmarked for Australia      exterior door-handles, a hide-covered boot
                                                        and New Zealand, it is also $470,000     rail, a large-display audio head unit with SD
                                                        less than BMW’s convertible Rolls-       memory card slot, and light switch and seat
                                                        Royce, for which no fewer than 13        lumbar controls.
                                                        Australians had placed orders by the        Exclusive Azure T options include dark-
                                                        time it went on sale here in September   tint 20-inch five-spoke Sport aluminium alloy
                                                        last year.                               wheels, dark-tint engine-turned aluminium
                                                           The Azure T, which Bentley            fascia finish, carbon/silicon carbide cross-
                                                        describes as the world’s most elegant    drilled disc brakes, and a ‘Naim for Bentley’
                                                        four-seat convertible and which is       premium audio system featuring 10 speakers,
                                                        aimed primarily at the US market,        a dual-channel sub-woofer and 1100-Watt
                                                        will therefore be significantly more      amplifier, plus eight individual Digital Signal
                                                        exclusive than both convertibles, with   Processor (DSP) modes.

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                        GoAuto News                                                                                    November 19, 2008 Page 14

             Maserati aims lower

                                                                                                                               GranSport Spyder
                                                                                                                               GranSp t pyde
                                                                                                                                   Sp       d
                                                                                                                               GranSport Spyd

 Italian luxo marque to enlist a more affordable new model in its bid to increase sales
                 By JACQUI MADELIN               under the Fiat umbrella.                              enough sales volume to ensure designing,
LAST year, Fiat chief executive Sergio              The obvious choice to underpin the new             building and engineering a new model is
Marchionne gave Maserati a target of 15,000      car is Alfa’s premium platform that already           profitable. Fortunately, though the world’s
cars per year – an ambitious figure for a         anchors the 159, Brera and Spider. In                 economy might feel shaky, men with money
luxury brand with two models, operating in       Cadillac form it is designed for rear-wheel           still want to play.
a sinking world economy.                         drive. The price, the layout and the ability             They have got the updated Quattroporte
   But perhaps not for this one, which has       are all there. As is the engine. The 4.7-litre        S and GranTurismo S, and the coming
seen astonishing growth. At 9000 cars this       V8 already re-engineered for Maserati is a            GranTurismo Spyder, to choose from, with
year, the trident marque is still on track for   beauty in the GranTurismo, but could be               the new model the year after. Not to mention
12,000 by 2011. In theory, the limiter is its    sublime in a lighter car.                             the GranTurismo MC Concept, a racing
restricted model range.                             Speaking to GoAuto at this month’s                 version of the GranTurismo that is likely to
   It might top 10,000 with two cars, but        GranTurismo and Quattroporte launch in                replace the outgoing coupe-based cars for
not more, even with the variants tipped for      Italy, Maserati’s vehicle integration manager         Maserati’s one-make racing series.
limited production. To reach 15,000 it needs     Benedetto Orvietani talked about careful                 If it does become that race-car
another model – a distinctly different beast     licensing of Maserati-related product to              replacement, expect it to spin off a small-
to tackle a separate market sector.              build brand awareness, equally careful                volume, high-performance version of the
   An SUV has been ruled out; what is            segmentation of the market with Ferrari, and          GranTurismo. Followed, perhaps, by a
needed is something to fit the brand’s            the fact that, in current climates, a sporting        performance version of the Quattroporte
hooligan persona and racy tradition. In other    car you really can use every day has value.           using the same engine, gearbox and, most
words, Maserati needs a replacement for             Mr Orvietani is working on Maseratis four          importantly, exhaust as the GranTurismo – a
the (discontinued) GranSport – a two-seat        or five years down the track, and while he             luxury sedan with middle-aged sensibilities
spyder or two-plus-two coupe that is smaller     refused to comment on the speculation that a          and a teenager’s persona.
and more affordable than the current cars.       small car is in development, his body language           Meanwhile, Mr Orvietani and his team
   Pipe dreams? Not for a company that took      indicated that we were on the right track.            are working on cutting weight from future
the GranTurismo from clean sheet to initial         Likely variants of current models include          models to improve fuel and emissions
production in 18 months, particularly given      a GranTurismo Spyder next year, possibly              figures, or improving engine efficiency – a
the assistance available from other brands       with the clever Ferrari California lid.               turbo-supercharged combo not ruled out.
                                                    Where will Maserati build these extra                 Maserati has got conservative targets
                                                 models? It takes two shifts to produce the            Down Under for the coming year, at 210
                                                 10,000 current capacity at the Modena                 for Australia and 40 for New Zealand, with
                                                 assembly plant in Italy, but there is space on        the Quattroporte 4.2 as the major seller once
                                                 site to expand. The line is quite flexible – for       initial GranTurismo S sales die down. It
                                                 years it built two quite different platforms,         is taking a careful approach, but with the
                                                 and expanding it could allow a further 5000           support of a new regional office in China,
                                                 cars per year.                                        the door is open to sell more if economic
                    GranTurismo MC Concept
                                                    The hot issue for Maserati is getting              conditions improve.

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                     GoAuto News                                                                               November 19, 2008 Page 15

M3 sedan below $150K
It can’t match the IS F but
BMW’s M3 sedan still stuns
with a $145K asking price
             By MARTON PETTENDY
BMW Australia has cut straight to the chase
– between its first M3 sedan and the first
high-performance Lexus sedan in the IS F,
as well as the Mercedes-Benz C63 AMG
sedan – by revealing a $145,000 pricetag
for its four-door M3 ahead of its official     $36,000 cheaper than the recently released      transmission (M-DCT) with Drivelogic, but
November 22 on-sale date.                     M3 convertible ($176,142).                      the M3 is the only car in this class to offer
   Precisely as predicted, the M3 sedan’s        Mercedes-Benz raised eyebrows in             a conventional manual transmission option,
price sets a new entry-level mark for what    January this year when it announced a           which in this case is both 0.2 seconds slower
is now a formidable M3 model range, by        bargain $139,500 sticker price for the          to 100km/h and 0.5L/100km less efficient.
being almost $18,000 more affordable          336kW/600Nm 6.2-litre V8-powered C63               Like its fellow M3 stablemates, the sedan
than the E92-series M3 coupe ($162,901),      AMG, which went on sale in March but now        comes with unique features like an adjustable
around 500 of which have been delivered       costs $146,271 following the July 1 luxury      electronic suspension damping system, the
in its 12 months on sale – and more than      car tax increase.                               MDrive ‘loud button’ and special M 18-inch
                                                 However, Lexus set a new low water           alloy wheels with 245/40 front and 265/40
                                              mark for the rarefied premium compact            ZR18 tyres (19s are optional).
                                              performance sedan class when the                   Similarly, standard equipment includes
                                              311kW/505Nm 5.0-litre V8-equipped IS F          Professional Navigation with an 8.8-inch
                                              went on sale last week priced at a surprising   colour monitor, TV, voice recognition,
                                              $129,000, or just $126,500 without a            Bluetooth connectivity, the Logic HiFi
                                              sunroof.                                        system, adaptive bi-Xenon headlights,
                                                 Of course, the first M3 sedan produced        Novillo leather upholstery and metallic
                                              since the E36 3 Series comes with the same      paint, plus powered and heated M Sport
                                              309kW/400Nm 4.0-litre V8 – which redlines       seats with memory functions and backrest
                                              at an unrivalled 8400rpm – as its two-door      width and lumbar adjustment.
                                              M3 siblings, but weighs in somewhere               Specific to the M3 and now available in
                                              between the (E92) fixed-roof coupe and the       Australia on the sedan is BMW’s Brake
                                              (E93) folding hard-top convertible.             Energy Regeneration system, which
                                                 Naturally then, the V8 E90 sedan is not      redirects energy on engine overrun or under
                                              quite as quick as the V8 coupe, but with a      braking to recharge the car’s battery.
                                              claimed 0-100km/h acceleration time of just        “The arrival of the BMW M3 Sedan
                                              4.7 seconds, the five-seater four-door is only   in Australia is a win for drivers who have
                                              one-tenth slower than the four-seater two-      longed for the practicality of a four-door/
                                              door M3, which itself is one-tenth off the      five-seat sedan that delivers the punch and
                                              C63’s 0-100 pace.                               excitement of the M3 Coupe,” said BMW
                                                 The M3 Convertible is relatively slow        Australia marketing chief Tom Noble. “The
                                              but still rapid at 5.1 seconds, as well as      M3 Sedan is truly the car that answers the
                                              thirsty at 12.3L/100km on average, while        call of the heart and the considerations of the
                                              the M3 sedan’s official fuel consumption is      head. With its mighty engine and drivetrain
                                              11.9L/100km – the same as the M3 coupe.         package borrowed from the award-winning
                                                 All figures quoted here are for M3s fitted     M3 Coupe we are certain the BMW M3
                                              with Getrag’s seven-speed M double-clutch       sedan is a classic in the making.”

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                      GoAuto News                                                                                            November 19, 2008 Page 16

Lexus looks ahead
Lexus to combat a flat
market in 2009 with fresh
models and less stock
STUNG by diving sales and a bleak
economic outlook for the next few months,
Lexus Australia is working through clearing
current stocks and reducing supply in the
coming year to match much weaker demand.
   This is despite the arrival early next year of       what we have achieved this year in terms of            Bolstering Lexus’ 2009 efforts will be a
a new version of the Toyota luxury marque’s             volume, I think we would be doing well.             host of new-model activity.
traditionally strong-selling RX mid-sized                  “I think the advantage we will have is that         “The (next-generation) RX will be a big
luxury SUV – previewed by the 2007 LF-Xh                we are learning the lessons from this year,         seller for us, representing around 40 to 45 per
concept – as well as a much broader variety             and we will have the supply management              cent of our volumes,” Mr Roca said. “We’ll
of its IS small/medium range, which is the              right in terms of dealer network and from a         launch late February/early March from a
company’s second-most-popular line.                     profitability base.                                  retail point of view with the RX350, and
   October’s VFACTS industry results saw                   “We are small enough and agile enough to         follow that three months down the track with
Lexus sales decimated by 62.2 per cent                  turn that around during this period of time.        the launch of the hybrid vehicle as well.
against the same month in 2007.                            “It’s a buyer’s market at the moment, and           “So next year is looking good for us as
   To the end of October, Lexus had sold                we need it to be (in a way) because we need         we’ve had a fairly dry spell in terms of
5904 units compared to 7090 units for the               to sell all the cars we have in stock at the        product. We’ve had the LX this year but
same period last year.                                  moment that we have ordered, but in a period        that’s low volume and the IS F is low volume
   While all luxury vehicle brands have                 of six months we will turn that around.             and that’s supply restricted – so we haven’t
suffered large sales losses since the luxury               “Being overstocked is not the ideal situation,   had anything major and our current RX was
car tax (LCT) threshold increased to 33                 so what we’re trying to find is what the natural     launched in 2003 so we’re due for a change.
per cent on July 1, Lexus’ losses have been             level is that is required by the marketplace           “And that will make a hell of a difference
more profound.                                          … with a supply-chain ratio where we can            to our dealers, too.
   According to Lexus Australia chief                   make money … and, at the same time, keep               “At the moment it is your bread-and-
executive John Roca, the goal is to make a              customers happy – they go hand-in-hand.             butter that really matter – cars like the IS,
profit despite reduced sales and to cut a swathe            “It takes months to do that, and we’re           3 Series and C-class, as well as your mid-
through stockpiles while providing the same             ordering three months ahead of plan, so             sized SUV like the RX.
level of after-sales customer service upon              we don’t quite have it aligned quite as we             “Particularly with the RX, we find that
which the brand has built its reputation.               should have it aligned.                             we have a lot of loyal customers, and our
   Protecting resale values for current                    “But that’s only a matter of getting to what     retention rate is very strong.”
customers is another priority.                          we feel the natural level of the market is.            “So while we’ve fallen back from number
   “Frankly, the best-case scenario is for a               “And once we have pulled back and                three to number four luxury car brand in
flat new-car market (in 2009),” Mr Roca                  cleared the stock that we have currently, then      Australia (behind Audi), if you look at the
told GoAuto last week. “If we can achieve               we can (get to) a sufficient level of ordering,      retention based on our minimal car park
                                                        and if we need to top up, then that is the          that we begun with, for a brand that offers
                                                        approach – rather than what we have at the          (vehicles) in just six segments out of the 15,
                                                            moment of having too much stock.                to be number four and number three in the
                                                                  “And we’re trying to protect the          market means we must be doing something
                                                                resale value for current owners as          right.”
                                                                well, so we have to get that right.
                                                                   And everybody’s in the same boat                  FULL STORY: CLICK HERE
                                                                    I think.”                                       Baby hybrid bid – next page

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                  GoAuto Green                                     Green issues in the auto world                    November 19, 2008 Page 17

                                   Custom Fleet
                                   Part of GE Commercial Finance
                                                                   GoAuto Green is brought
                                                                   to you by Custom Fleet

Baby hybrid bid
Lexus looks set to offer
a hybrid version of its
forthcoming compact car
LEXUS is planning to introduce a petrol-
electric hybrid version of its forthcoming
prestige compact car, which will be sold
alongside conventional-engine versions
next decade.
                                                                                                                                      Current IS
   Dubbed the ‘BS’ by some pundits, but
known as the C-Premium within Lexus, the            conclusion that a hybrid IS might also see      counteract what our competitors are doing,
compact car will be markedly different to the       the light of day when the all-new version       particularly with the German marques, and
dedicated hybrid concept that the Toyota-           arrives.                                        we really do need a sub-IS car.
owned marque is expected to display at the             The ‘BS’ hybrid will be built primarily         “And frankly it will come. But as to when
North American International Auto Show in           for markets that traditionally eschew diesel    is what we are trying to determine at the
Detroit in January.                                 power, meaning that Japan and North             moment.”
   That vehicle, rumoured to be called the          America would be first in line to receive the       Mr Roca is confident the small car will
HS250 Concept, is believed to be a four-            vehicle. A ‘BS’ diesel will also be offered     arrive in Australia within the next three
door sedan derived from a modified version           mainly to please European buyers, who           years.
of the next-generation Toyota Prius’ front-         tend to prefer diesel power to petrol.             “There are several (overseas) articles that
wheel drive platform and powered by a                  However, as is the case with the current     quote 2011 (as a possible launch date) and I
2.5-litre petrol/electric powerplant similar        diesel-powered IS220d sold overseas, a          am hoping that this will be the timeframe,”
to that found in the existing US-market             diesel BS will probably not be imported to      he said. “That would be really good for us,
Toyota Camry Hybrid.                                Australia.                                      (and) in terms of the model cycle for IS, it’s
   Not coincidentally, the production-ready            The sub-IS model is priority number one      probably ideal.
version of the next-generation Prius will           at Lexus at the moment as it seeks to weather      “If we introduce a sub-IS vehicle, and
also make its world debut at the Detroit            the economic storm, lure more younger           then a new IS a year or two after that, then
show.                                               buyers and move in the general downsizing       we will really start cooking with gas, and
   Meanwhile, the ‘BS’ will have unique             direction of the luxury car market.             that’s what we need.
styling across sedan and/or hatchback                  In fact, Lexus has put a sub-RX luxury          “And the good thing about that segment
bodystyles and could emulate the BMW 1              SUV on hold as it focuses on bringing the       for us is, because we are not your traditional
Series with a rear-wheel drive configuration.        BS to market.                                   luxury marque, for somebody entering the
   Devised to take on the premium European             “At one stage we were discussing the         luxury car market for the first time, they will
small cars exemplified by the BMW as well            option of a vehicle below the RX, but at the    think that Lexus is a very viable proposition
as the Audi A3, the forthcoming compact is          time we felt that the priority would be for     because of its heritage with Toyota.
understood to be in co-development with             a car below the IS and not the RX,” Lexus          “(They know that) they will be stepping
the next-generation IS due about 2012.              Australia chief executive John Roca told        into a car of that size that is going to have
   This method mirrors BMW’s current ‘C’            GoAuto last week.                               quality, because the Lexus badge will
and ‘D’ segment strategy, which has seen               “Toyota Motor Corporation haven’t            convince them … and that it will be better
the E87 1 Series spun off the larger E90 3          confirmed that car actually exists. But the      than a Toyota, and that’s not bad either.”
Series architecture. The fact that there will       feedback that Lexus is getting from every
be a hybrid version of the ‘BS’ leads to the        market around the world is that we have to               FULL STORY: CLICK HERE

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                      GoAuto News                                                                                                   November 19, 2008 Page 18

        Turbo trouble
 Subaru recalls turbo models to check engine oil line
                 By PHILIP LORD                         the potential outcome of the leak in much
IN ANOTHER embarrassing incident for a                  stronger terms: “If leaking oil contacts
company that has thrived on a reputation for            components operating at high temperatures,
good quality, Subaru Australia has initiated            an engine compartment fire could result.”
                                                                                                                                                      Impreza WRX
a voluntary safety recall for turbocharged                 Subaru Australia spokesman David
Forester, Liberty and Impreza models –                  Rowley told GoAuto this week that of the                  modified replacement pipe is installed. This
except the WRX STi – to check an engine                 3115 cars affected by the oil line recall,                pipe is strengthened and does not require a
oil line that could split and cause a fire.              1889 are 2007-2008 Liberty GT variants,                   bracket.” The latter takes about three hours.
   The current recall concerns an oil feed              1216 are 2008 Impreza WRX (not STi) and                      The WRX STi is the only model of the
pipe to the turbocharger, which according               11 are the 2009 Forester XT.                              turbocharged Subarus not affected by the
to Subaru may have become “misaligned”                     Only a small number of Forester XTs                    safety recall. According to Mr Rowley, it
during production. This problem has affected            are affected because only an early batch of               has a unique turbocharger and oil supply
the Japanese marque’s turbocharged cars                 MY09 production was involved.                             line that cannot be misaligned.
worldwide.                                                 Mr Rowley said Subaru Australia was                       In an unrelated field service campaign in
   In Australia, the federal government’s               in the process of writing to all potentially              April, Subaru halted production and sales
recalls website ( said:              affected customers but acknowledged                       of all turbocharged 2.5-litre engine models
“The vehicles may have been produced with               that around 60 vehicles had so far been                   due to a potential failure of engine conrod
the turbocharger oil supply pipe deformed               discovered to have a faulty oil supply line.              bearings.
due to misalignment during the assembly                    “To date, around 60 vehicles in Australia                 Subaru Australia said the problem had
process. If the pipe is deformed, vibration             have been identified as needing oil supply                 been identified as abnormal wear on conrod
experienced during normal driving could                 pipe replacement,” he said.                               big end bearings potentially affecting up
result in a crack developing in the pipe over              “If the pipes on potentially affected cars             to 1233 vehicles in Australia built between
time, causing an engine oil leak.”                      are not misaligned, a support bracket is fitted            January and April this year.
   However, in the US the safety recall notice          as a precaution. This takes approximately 30
for the turbo oil line problem described                minutes. If the pipe is misaligned, an entire                       FULL STORY: CLICK HERE

                               UP CLOSE ON PERSONNEL
                               Brought to you by Motor Staff – the Motor Industry’s No.1 Recruitment Specialist

GENERAL Motors has appointed Crystal                    delayed or cancelled, which in turn has                   will look to what I
Windham as the director of passenger                    freed up US designers for other projects.                 have done and be
car design for the US auto giant’s North                   Ms Windham has worked for GM since                     inspired to consider
American vehicles, heading the interior                 1994. She was appointed design manager                    automotive design.
design of global mid-size car, global compact           (interiors) in 2002 and played a lead role                   “As an interior
car and global small car programs.                      on the latest Chevrolet Malibu and Saturn                 designer, I create
  Ms Windham becomes GM’s first                          Aura. She later became design manager                     solutions and appealing
African-American female design director.                (advanced exteriors) for full-size trucks                 spaces for customers.
Her appointment to this newly created                   and in May 2007 moved to the position of                  As a leader it’s my job
position also reflects the manufacturer’s                design manager (exteriors).                               to foster creativity and
moves to bring a number of significant new                  “Without guidance and support from                     ensure that creativity
global designs into the US. As GoAuto                   family and co-workers, I wouldn’t be where                is represented in the Crystal Windham
reported in September, design work for                  I am today,” she said. “I truly love my job –             final product. Our design vision, intent and
a number of GM brands outside North                     it’s creative, expressive – but it is not easy.           integrity led us to create the best interiors
America is being transferred to Detroit in              Enjoying what you do, however, makes it                   in GM’s history. I am excited to show our
response to US vehicle programs being                   all worthwhile. I hope other young women                  newest interiors to the world.”

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                                                   Australia’s No.1                                                                 oto

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          Even if your company is not looking to employ more staff at this time                                              1300 666 562
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                    GoAuto News                                                                                                 November 19, 2008 Page 19

GoAuto’s latest car review                                                                                        

                                                                              Jaguar XKR Coupe
                                           WHILE Jaguar’s volume-selling XF large sedan deservedly earns the kudos for turning Jaguar’s
                                           stuffy old image (as well as sales) around, it was the XK coupe from 2006 onwards that really
                                             started the British marque’s design renaissance, with progressive styling and an aluminium body
                                                     underpinned by a thoroughly modern rear-wheel drive chassis. But only the supercharged
                                                        XKR version realises the Jaguar coupe’s full performance and driveability potential,
                                                        especially in the face of ever-improving competition like Porsche’s sensational 997
                                                        Series II. And, as we eventually found out, there is more to a sports grand tourer than
                                                        mere styling and barnstorming abilities.                  CAR REVIEW: CLICK HERE

AEC IN TATA DEAL                                                                           brought to you by   EUROPE’S BEST: INSIGNIA
AUSTRALIAN automotive natural gas                     Launch Pad                                               OPEL’S Insignia has edged out the favoured
                                                                             Australia’s No.1 Auto Website
specialist Advanced Engine Components                                                                          Ford Fiesta by the narrowest of margins to
Limited (AEC) has entered into an agreement
                                                   NOVEMBER:                                                   win the 2009 European Car of the Year.
                                                   Audi A5 3.0 TDI quattro tiptronic
to design, develop, test and certify a number                                                                    Only one point separated the two, with the
                                                   Audi RS6 Avant
of engines for number-one Indian auto-                                                                         59 motoring journalists from 23 European
                                                   Audi S3 Sportback                           S
                                                                                            S3 Sportback
maker – and the owner of Jaguar and Land                                                                       countries awarding General Motors’ Vectra
                                                   Bentley Continental Flying Spur facelift
Rover – Tata Motors Limited.                                                                                   replacement – which is under consideration
                                                   Lexus IS F
   The 10-year purchase agreement involves         Rolls-Royce Phantom Coupe
                                                                                                               for sale in Australia – a total of 321 points.
supplying natural gas vehicle systems for Tata     Volkswagen Tiguan TSI variants       Phant
                                                                                        Ph tom
                                                                                        Phantom Coupe
                                                                                        Phantom Coupe
                                                                                                                 The Volkswagen Golf came in third place
naturally aspirated and turbocharged four-                                                                     with 223 points, followed by the Citroen
                                                    New model diary: CLICK HERE
and six-cylinder engines, and is expected to                                                                   C5 (198), Alfa Romeo MiTo (148), Skoda
generate in excess of $A30 million for AEC                                                                     Superb (144) and Renault Megane III (121).
in the first three years of production, which is                                                                           FULL STORY: CLICK HERE
slated to commence in the first quarter of 2010.
AEC is required to complete development as                                                                     JAPAN’S BEST: TOYOTA iQ
well as Euro IV certification by November                                                                       SIZE means something it seems, with the
2009 to coincide with India’s regulatory                                                                       world’s smallest four-seater passenger car
requirement that all new trucks and buses,                                                                     winning the 2008 Japan Car of the Year
in 11 major centres, meet Euro IV by April        BRABUS TAKES TO TESLA                                        award – even though it has yet to officially
1, 2010. Tata Motors is the fourth-largest        GERMAN tuning house Brabus has formed                        go on sale over there.
truck and second-largest bus manufacturer in      an alliance with US electric sportscar                          Released at last month’s Paris motor
the world, and has sold natural gas-powered       manufacturer Tesla Motors and last week                      show and on sale in Japan from tomorrow
buses in India since 2000.                        unveiled a customised version of the Lotus                   (November 20), Toyota’s three-metre-long
           FULL STORY: CLICK HERE                 Elise-based Tesla Roadster ahead of the                      iQ scooped the number-one gong with 39
                                                  forthcoming Essen motor show in Germany.                     out of the 66 jurors on the COTY committee
JEEP NOT WANTED: HMC                                 Brabus has not tinkered with the two-seater               to record a convincing 526 votes. Citroen’s
HYUNDAI Motor Co (HMC) has denied                 sportscar’s electric motor – a three-phase four-             C5 came in at a surprising second place (223
that it has been in talks with Chrysler           pole AC unit able to generate a maximum                      votes), eclipsing Nissan’s GT-R (201), as well
owner Cerberus Capital Management about           185kW and 271Nm – or its two-speed electric-                 as Audi’s A4 (180) and Jaguar’s XF (115).
acquiring the Jeep brand.                         actuated manual shift transmission.
   A spokesperson for the South Korean               Instead, its electronics engineers have                   SUMMER TOURING PACK
auto giant said the speculation, which            moved to bring the driving experience back                   PEUGEOT Automobiles Australia has
stemmed from unnamed sources cited in             to a more traditional one with a “space                      boosted the value of its 308 Touring station
a Reuters news wire report last week, said        sound generator” that allows the occupants                   wagon by adding a “Flex Pack” – claimed
HMC was not planning to buy Jeep or other         to choose between several simulated engine                   to be worth up to $1320 – to models sold
Chrysler assets and that it was continuing        sounds, including a V8 combustion engine, a                  before January 31, 2009, for no additional
its investment in new plants and facilities in    racecar engine and futuristic ‘sound-scapes’.                cost to the recommended retail price.
Europe and other overseas countries.                        FULL STORY: CLICK HERE                                       FULL STORY: CLICK HERE

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