BMW's Next Generation EfficientDynamics Being Developed with NASA

Only outer space is the limit for BMW it seems. The Bavarian automaker has begun working with the National Aeronautics and Space Administration (NASA) on its next-generation EfficientDynamics fuel and eco-saving technologies.

Speaking to the UK's CAR Online magazine, head of development Klaus Draeger said the tie-up would result in a saving of up to 5% in economy which is a larger saving than current EfficientDynamics technologies combined. These currently include features like brake energy regeneration and stop-start. EfficientDynamics meets 2012 and 2015 EU regulations.

Basically how the NASA system works is that thermoelectric generators or TEGs similar in principle to those that power satellites convert heat differences between radioactive metals to generate electricity. BMW has fitted a TEG to a prototype's exhaust system to make about 200kW of power. What that means is that some of the heat which is generated by combustion is converted to electric energy. This energy is then fed into the car's power supply for systems like climate control which swallow up good heaps of power.

Prototype equipment is already being out to the test. Series production cars will have the necessary equipment fitted within the next five years. To make the systems work even better BMW is including a new 8-speed automatic gearbox to volume cars instead of the new 7-speed double-clutch gearbox.

Ford to Unveil TriFuel Capable Mondeo

Ford has announced plans to introduce a new tri-fuel version of the Mondeo at this month's Leipzig Motor Show in Germany. Available in sedan, hatchback, and wagon form, the new Mondeo is capable of running on gasoline, bio-ethanol, and LPG.

Under the hood resides a tweaked version of Ford's 2.0-liter Duratec engine that receives fuel from two independent gas tanks, one for petrol and bio-ethanol while the other is reserved for LPG. When running on gasoline or bio-ethanol, the engine has an output of 145hp compared to 141hp when the driver decides to use LPG instead.

Thanks to the use of LPG, the sedan and hatchback can travel up to 460 km (286 miles) while the wagon has an estimated range of 380 km (236 miles). However should a driver decided to forgo the use LPG for more traditional petrol or bio-ethanol, they can expect a range of about 850 km (529 miles) in all three versions. Perhaps the greatest benefit of the twin tank system is the fact that when both tanks are filled with their respective fuels, a driver can travel over an astounding 1,200 km (746 miles).

The new tri-fuel Mondeo will go on sale in select European markets starting in April, with German pricing starting at €27,500.

Volkswagen, BMW Profits Plunge on Weak Car Demand

Volkswagen AG, Europe’s largest automaker, predicted a first-quarter loss and German rival BMW said earnings fell after it set aside money for potential defaults by car buyers as the global recession erodes sales.

Bayerische Motoren Werke AG, the world’s biggest luxury-car manufacturer, said annual profit slumped as the company booked charges for bad debts and slowing sales of used BMWs. Volkswagen Chief Executive Officer Martin Winterkorn said 2009 “will be one of the most difficult years in the company’s history.”

Carmakers in Europe are likely to build 25 percent fewer vehicles this year as sales fall 20 percent because of the recession, the European Automobile Manufacturers Association estimated on March 5. Volkswagen is cutting 16,500 temporary jobs and restraining production. BMW eliminated 4,000 jobs last year and will trim a further 1,000 in 2009.

“No one can escape the crisis, not even VW,” said Sven Diermeier, an analyst at Independent Research GmbH in Frankfurt. “The first quarter is grim for everyone, especially BMW and other luxury carmakers.”

BMW said net income plunged 89 percent to 330 million euros ($422.2 million) last year. Analysts polled by Bloomberg had estimated profit of 1.02 billion euros. Revenue declined 5 percent to 53.2 billion euros.

Volkswagen Predicts Declines

With deliveries projected to drop 10 percent from 2008’s record of 6.23 million, Volkswagen’s earnings “will not reach the high level of previous years,” the Wolfsburg, Germany-based company said today in a statement. At the same time, VW is targeting a larger market share as sales fall less steeply than the industry’s. It predicts a profit for the full year.

BMW rose 46 cents, or 2 percent, to 23.40 euros in Frankfurt trading. The stock has risen 8.3 percent this year. Volkswagen gained 2.40 euros, or 1.1 percent, to 213 euros, paring the decline this year to 15 percent.

“Over the course of the year, VW should perform noticeably better than its rivals,” Independent’s Diermeier said. “They have the broadest model mix and a balanced global presence, key assets that will make the difference in this bleak environment.”

BMW took 1.97 billion euros in provisions in 2008 for bad customer debt and declining values of vehicles returned on lease, incurring costs of 931 million euros in the fourth quarter alone. Cash on hand increased 86 percent to 8.11 billion euros.

‘Severe’ Market

“We prepared ourselves early on and swiftly for severe business conditions,” Chief Executive Officer Norbert Reithofer said in a statement.

The Bloomberg Europe Auto Manufacturers Index of seven automakers, including both of the German automakers, has declined 15 percent this year and 36 percent in 12 months.

“There’s no denying that this crisis will leave its mark on us,” Volkswagen Chief Executive Officer Martin Winterkorn said at a news conference today in Wolfsburg.

Net income dropped to 955 million euros from 1.22 billion euros a year ago, Volkswagen said today, with the fourth-quarter decline slightly outpacing the year’s drop. Full-year operating profit fell 24 percent to 1.4 billion euros. Deliveries in the first two months of 2009 slumped 15 percent to 809,200 vehicles.

As sales drop, group investment may be trimmed by 2 billion euros this year, Chief Financial Officer Hans Dieter Poetsch said, without giving specifics.


Industrywide car sales in Europe plunged 27 percent to the lowest in two decades in January and contracted 37 percent to a 28-year low in the U.S. Europe’s car market shrank 7.8 percent in 2008, while U.S. sales contracted 18 percent to a 16-year low.

“Economic turmoil for the automotive industry, especially in the second half of the year,” hurt VW earnings, Poetsch said.

BMW said it will shave 500 million euros from labor costs this year after spending 455 million euros in 2008 to eliminate jobs. The 1,000 job cuts this year will be achieved by not replacing people who retire or quit.

The Munich-based automaker recorded a fourth-quarter loss of 718 million euros before interest and taxes.

“The headline numbers look awful,” said Max Warburton, an analyst at Sanford C. Bernstein Ltd. At the same time, “it looks excellent on cash flow,” said the London-based analyst, who recommends buying BMW shares.

The auto industry is pressing European governments and regulators for emergency help as the recession and tighter credit hurt demand. The euro-area economy will contract in 2009 for the first time since the single currency was introduced a decade ago, according to the European Commission.

Government Aid

EU countries are offering billions of euros in aid to carmakers and the European Investment Bank, the 27-nation bloc’s lending arm, is stepping up loans for auto research. On March 1, EU heads of government ruled out a centralized rescue program for the car industry while pledging more coordination of national initiatives such as fleet-renewal programs and a possible increase in EIB research loans.

The EIB approved 3 billion euros in loans today for car and truck manufacturers. BMW, Daimler AG, Fiat SpA, PSA Peugeot- Citroën, Renault SA and Ford Motor Co.’s Volvo Cars unit, as well as truckmakers Volvo AB and Scania AB, will benefit.

Carlos Ghosn, chief executive officer of Renault and president of the European carmaker trade group, has asked that more be done at the European level. The French government is giving loans to Renault and rival Peugeot Citroen, the continent’s second-largest carmaker.

Cooperation, Mergers

The automakers’ woes are increasing pressure to merge or at least cooperate, according to analysts and auto executives including Fiat CEO Sergio Marchionne. Fiat is planning to take a 35 percent stake in Chrysler LLC and share technology and models.

German automakers have eschewed interest in the assets of U.S. automakers in Europe. General Motors Corp., which like Chrysler has received billions of dollars in U.S. aid and wants more, is seeking European government help for its German Opel unit. GM’s Saab division in Sweden seeks bankruptcy protection.

Porsche SE, maker of the 911 sports car, is increasing control of Volkswagen as it seeks to build a 75 percent stake and bring VW’s cash flow into its books.

VW said today it has no plans at present to merge Swedish truckmaking unit Scania AB with MAN AG. Synergies between the two should be used “in other ways,” Poetsch said.

Reducing Inventories

Volkswagen aims to cut inventories across its nine-brand group to about 100,000 vehicles by the end of March. The company said it intends to avoid reducing weekly working hours in the second quarter.

Volkswagen resumed production at five of its nine German factories on March 1 after shuttering the plants for a week, a move that affected two-thirds of its 92,000-strong German workforce. The closures came on top of a three-day shutdown at the main plant in Wolfsburg, following an extension of Christmas holidays.

Group deliveries rose 0.6 percent last year to a record 6.23 million vehicles as the Audi and Skoda divisions added models. The carmaker aims to sell 6.6 million Volkswagen-brand vehicles by 2018, versus 3.67 million last year. The brand’s operating profit in 2008 rose 40 percent to 2.7 billion euros, the biggest gain of any of Volkswagen’s divisions.

VW raised the 2008 dividend on its common stock to 1.93 euros a share from 1.80 euros in 2007. BMW said today it plans a dividend of 30 cents a share for the full year, down from 1.06 euros for 2007.

“We want to pay a dividend even in difficult economic times, demonstrating both the confidence we have in our operating strength and the interest in our shareholders,” CEO Reithofer said.

Saab, Volvo Cars Lay Plans to Cut Costs as EU Approves Loans to Auto Industry

Sweden's two struggling car makers Thursday announced new measures to cut costs in an attempt to reverse spiraling losses, with Saab Automobile AB saying it will lay off nearly one-fifth of its work force and Volvo Cars freezing salaries and scaling back production.

Separately, the European Investment Bank, the European Union's long-term lending arm, approved €3 billion ($3.85 billion) in new loans for the bloc's troubled auto industry. The EIB also said it planned to submit a further €2.8 billion in loans to its board of directors in April and May.
The EIB said it lent €400 million each to Swedish truck makers Volvo AB and Scania AB and €200 million to Volvo Cars, owned by Ford Motor Co. France's PSA Peugeot-Citroën SA and Renault SA, Italy's Fiat SpA and German auto makers BMW AG and Daimler AG will each receive €400 million. Most of the loans will go to projects that aim to increase fuel efficiency and cut carbon-dioxide emissions.

France, meanwhile, agreed to give €250 million in emergency funds to Renault Trucks, a subsidiary of Volvo AB, on the condition it won't cut French jobs or plants.

Saab, which owner General Motors Corp. wants to offload by 2010, said it is giving notice to 750 staff at its Trollhattan plant in western Sweden. The car maker, which currently employs 4,100 people, filed for bankruptcy protection last month. In its struggle to survive, Saab is trying to gain the interest of investors so that it can continue operations after GM severs its ties
The job cuts may also be necessary to get its own EIB loan, which the company applied for last month.

In a move to avoid more layoffs, rival Volvo Cars, which owner Ford is trying to sell, said it has signed a deal with unions to lower personnel costs. The measures, which include freezing salaries for all employees until January 2010, should save close to 500 million Swedish kronor ($57 million), the car maker said.

New Version Accord from Honda Siel

Honda Siel Cars India on Thursday launched the advanced version of its premium sedan Accord. Powered by 3.5-liter i-VTEC engine, the eighth-generation Accord V6 will come in two variants priced at Rs. 24.80 lakh and Rs. 25.35 lakh (ex-showroom, Delhi).

Equipped with advanced safety and luxury features, Accord V6 features an advanced variable cylinder management (VCM) delivering the maximum power of 275 PS during six cylinder operation and also impressive fuel economy.

The engine meets Euro-IV emission levels and is E-10 (10 per cent ethanol and 90 per cent unleaded petrol) compatible.

“We have introduced the Accord V6 which promises an ultimate performance packed driving for our customers who seek more thrill and power. The inclusion of VCM technology in this super performance car is a testimony to our commitment of providing fuel efficient cars in each segment where we are present.

“The ARAI fuel economy figure of 10 km. per litre is very promising for this high performance car,” said Honda Siel Cars India President and CEO Masahiro Takedagawa.

The seventh-generation Accord, with 2.4-litre engine and price starting at around Rs.17-lakh, will also be available in the market.

On the company’s future plans, Mr. Takedagawa said they would launch their premium hatchback Jazz in the Indian market in June-July this year. “The trail production of the car has begun,” he said.

Honda has deferred the completion of Phase II of its Rajasthan plant for two years. “The assembly line was scheduled for completion by the end of 2009, now it would be completed by end of 2011,” Mr. Takedagawa added.