Thursday, August 20, 2009
Prosecutors raid Porsche offices
The offices of German luxury carmaker Porsche have been raided by federal prosecutors probing the alleged market manipulation of Volkswagen shares.
The investigation centres on former chief executive Wendelin Wiedeking and finance chief Holger Haerter, who both resigned last month.
The carmaker had built up a stake of 51% in VW in an attempt to launch a takeover of Europe's biggest carmaker.
Porsche denied the accusations and said it would co-operate with prosecutors.
The two carmakers have subsequently agreed to a merger, ending months of bitter feuding, which will take place in 2011.
Failed takeover
 | PORCHE & VW TIMELINE March 2008: Porsche says it will take a controlling stake in VW, - upping its holding from 31% to above 50%. October 2008: VW briefly becomes world's biggest company by market value as its shares surge. It follows Porsche buying VW shares, leaving fewer for hedge funds who needed to buy them to close their positions. January 2009: Porsche says it plans to lift VW stake to 75%. However this never materialises because of the financial crisis and the slump in the global automotive sector. May 2009: Porsche and VW agree a merger after weeks of talks. VW later suspends talks - saying constructive negotiations are not possible and that Porsche must reduce its debt. June 2009: Porsche has request for a 1.75bn euro loan turned - as it struggles to finance the debt it took on as part of its attempts to gain full control of VW. July 2009: VW says it plans to buy Porsche. The failure of Porsche to takeover VW prompts Porsche chief executive Wendelin Wiedeking and financial director Holger Haerter to resign. August 2009: VW and Porsche agreed details under which VW will initially buy a 42% stake in Porsche - ending months of acrimony between the two firms. Final nail in coffin for Porsche's efforts to buy VW. August 2009: Porsche offices are raided by federal prosecutors. |
"On Thursday morning, officers from Stuttgart prosecutors entered the company's offices with search warrants.
"The prosecutors suspect a breach of public disclosure requirements and market manipulation," Porsche said.
Under Mr Wiedeking, Porsche built up a majority stake in the much larger VW, but failed in its attempt to force a full takeover.
Porsche made huge profits on its VW shares, leading some commentators to describe the firm as a hedge fund with a carmaker tacked on the side.
In fact, the share price rises contributed 6.84bn euros to the company's pre-tax profit of 7.34bn euros in the first three months of this year.
However, the onset of the global economic crisis put paid to the company's attempts to push its shareholding in VW to 75%.
As a result of its failed takeover, Porsche was saddled with huge debts.
Family ties
In order to shore up its finances, the carmaker announced last week that the state of Qatar would take a major stake in the company.
Qatar will eventually become the carmaker's third biggest shareholder, behind the Porsche and Piech families and the German state of Lower Saxony.
Under the terms of the merger with VW finally agreed last week, VW will initially buy a 42% stake in Porsche by the end of this year for 3.3bn euros ($4.7bn; £2.8bn).
The deal means that Porsche will now in effect become the 10th brand in the VW family, joining the likes of Audi, Seat and Skoda.
DATED: 20.08.09
FEED: BBC
Lookers wants scrappage extension
UK car dealer Lookers has said it wants to see the government's car scrappage scheme extended into next year.
Under the scheme, which was launched in May this year, a £2,000 incentive is paid to motorists who hand over their old cars and buy new models instead.
The dealer called for the extension as it announced first half-yearly profits of £8.6m, down from £13m last year.
Lookers said the scheme had helped performance, but it remained cautious on its outlook for the new car market.
"The scrappage scheme has helped, and we would like it to continue into next year," said Lookers' chief executive Ken Sturgenor.
"We have had around 3,500 orders from it so far, 55% of which have been delivered."
Sales up
Revenue at the dealer for the first six months of the year came in at £870.4m, compared with £1bn for the same period last year.
Demand for new cars fell, but "used cars, parts and after-sales are going really well," Mr Sturgenor said.
On Monday, car dealer Pendragon also called for an extension to the scrappage scheme.
It is currently due to end in February, or when the £300m the government has allocated towards the scheme runs out - whichever happens first.
Last week, official figures showed that more than half of the funds had been used up.
The scheme is credited with boosting UK car sales by 2.4% in July compared with the same month a year earlier, the first rise in car sales since April last year.
General Manager of Honda (UK) moves on
In the short term, Tom Gardner, Head of Marketing - Cars, has agreed to assume responsibility for the company's car operation while continuing to perform his current duties. An announcement on a permanent successor will be made in due course.
"Leaving Honda has been an extremely difficult decision to make," said Bradley. "I've enjoyed the challenge of strengthening Honda's relationship with its dealer network and the opportunity to work with a number of very talented people inside the company.
"I'll miss everyone's exceptional drive to achieve and wish Honda and the dealer network every success for the future."
Car scrappage scheme greener than expected
WhatGreenCar has supported the Government's Car Scrappage Scheme from its launch in April 2009 and now, at the halfway stage, it seems the UK Scheme has been a green success.
With orders reaching close to 155,000 since its introduction, the latest official data shows buyers are choosing cars that are significantly more eco friendly, with tailpipe CO2 emissions 25 per cent lower than emissions from the scrapped cars.
The figures show the average tailpipe CO2 figure for a scrapped car, is at least 179g/km, compared to a much lower 134g/km average for cars bought through the scheme. This means a reduction of 45g/km, which amounts to almost 70g/km when fuel and vehicle production emissions are taken into account.*
WhatGreenCar is delighted with the results as the figures exceed its own prediction, considered optimistic by some. In April, at the start of the scheme, WhatGreenCar predicted tailpipe emissions would fall by around 30g/km, leading to a lifecycle CO2 reduction of 50g/km.
This measurable, environmental reduction adds to the economic benefits of the scheme which has played a crucial role in preserving jobs in the UK auto industry, particularly in this time of recession. WhatGreenCar therefore continues to support the car scrappage scheme, although it maintains that further emissions reductions would be achieved by setting limits on the CO2 emissions of new cars purchased through the scheme, as is the case in some other EU schemes.
Dr Ben Lane commented: "While, it was obvious to us at the start that the UK scrappage scheme was first and foremost a job-saving measure, WhatGreenCar realised at the outset that the scheme also had the potential to promote greener cars. Following the fuel hikes of 2008 and the ensuing 'credit crunch', UK car buyers were already looking for smaller, more fuel-efficient models. The scrappage scheme has helped to continue this trend, at a time when UK car sales were at an all time low."
GM completes Saab deal with Koenigsegg
General Motors has finalised an agreement to sell its Saab unit to Koenigsegg Automotive, the Swedish producer of high-performance supercars. The deal, which cements a provisional accord struck in June, will mark another step forward in efforts to restructure GM as the loss-making US carmaker narrows its range of brands.
The memorandum of understanding agreed in June was conditional on $600m of funding from the European Investment Bank, underwritten by Sweden. Recent reports in the Swedish press claimed the consortium behind the bid was showing signs of fracturing but Koenigsegg said the deal was not threatened.
GM is chasing a target to close the sale by the end of the third quarter as part of a broader disposal of loss-making assets. Provisional deals have also been struck to sell its Hummer and Saturn brands. The Saab deal would bring an end to an unsuccessful 19-year relationship between GM and the Swedish carmaker.
GM has never made a profit from the investment and Saab's worldwide sales dipped to just 98,000 cars last year. Privately owned Koenigsegg, founded in 1994 by entrepreneur and car enthusiast Christian von Koenigsegg, makes bespoke cars at a former air base in Sweden that are priced at about ?1m each.
The consortium investing with Koenigsegg includes Norwegian entrepreneur Bard Eker, who owns about half of the Swedish company's shares.
Under the provisional pact signed in June, GM agreed to invest more into Saab after its spin-off than it would receive from the buyers. The Koenigsegg consortium pledged a relatively small sum up front backed by contingent financing, to be repaid to GM if they were to succeed in making Saab viable.
Wednesday, August 19, 2009
GM finalises Saab sale
General Motors has finalised a deal to sell Saab to supercar maker Koenigsegg.
Both companies signed a memorandum of understanding back in June, but the deal had stalled over concerns with Koenigsegg's lack of financial backing. However, GM confirmed it has now signed a stock purchase agreement with Koenigsegg Group AB regarding the sale of 100% of the shares.
Sweden's Koenigsegg will now ask the Swedish government for a loan from the European Investment Bank (EIB).
A spokesperson for Koenigsegg has said the firm expects the handover to be completed by the end of the year.
Koenigsegg Group, founded in 1994 by Swedish businessman Christian von Koenigsegg, has 45 employees and produces 18 high-end sports cars a year at more than a million euros each.
Saab employs 3,400 people in Sweden alone and sold just over 93,000 cars worldwide in 2008.
Von Koenigsegg said in the statement that his company wanted "to transform Saab into a stand-alone, vibrant, entrepreneurial company and make it "sustainable by making it profitable".
DATED: 19.08.09
FEED: AM
Sub-prime dealer opens new Walsall site
Sub-prime car dealer ACF Car Finance has opened a Walsall-based showroom on an unoccupied half-acre site.
The business was formerly based on a site in another area of Walsall.
Sales and marketing director Norman Beaumont said: “Due to the current financial climate and the fact that some of our main competitors aren’t around any longer, we have seen a greater increase in people looking for our specialist services. Our new showroom will help us meet that increase in demand and offer even better facilities for prospective customers.”
He added: “Not only have we employed local traders throughout the build and increased our staff intake, this showroom will also give people from across the region even greater choice for their motor buying needs.
DATED: 19.08.09
FEED: AM
RMIF to rebrand and grow membership
The Retail Motor Industry (RMI) has appointed a design agency to rebrand the organisation, including a new corporate identity and web design.
The Foundry has been selected to “bring a new level of modernity and relevance to the 100-year-old brand”.
As part of the rebrand, which begins in September, The Foundry will be developing a campaign to raise awareness of the RMI and drive new membership.
Rob Foulston, RMIF chief executive, said: “We want every retailer in the motor trade to become a member of the RMI and every customer to demand RMI accreditation.”
DATED: 19.08.09
FEED: AM
Pendragon urges scrappage renewal
UK car dealer Pendragon has said it wants the government's car scrappage scheme to be extended into next year.
Under the scheme, a £2,000 incentive is paid to motorists who scrap cars registered before 31 August 1999 to buy a new car.
Pendragon chief executive Trevor Finn told the BBC the scheme had led to a "positive effect" on car sales.
His comments came as Pendragon reported half-year pre-tax profits of £11.4m, down from £21.1m last year.
"The first half of 2009 has seen a very challenging car market," Pendragon said.
But the company added: "The new car market has risen for the first time year on year in July which gives us reason for some guarded optimism in this area."
'Successful' scheme
The UK car scrappage scheme is currently due to end in February, or when the £300m the government has allocated towards the scheme runs out - whichever happens first.
"It may be continued into the spring, and we'll be pushing for that," Mr Finn told the BBC.
"I think there's a probability that it will be renewed," he added. "It's been very successful from the government's perspective."
The scheme - which came into effect in May - is credited with boosting UK car sales by 2.4% in July compared with the same month last year, the first rise since April last year.
Consortium plans Volvo Cars bid
A Swedish business consortium, keen to return Ford's Volvo unit to Swedish ownership and keep it out of Chinese hands, has intensified its efforts to raise enough money to make an offer for Volvo, according to weekend media reports.
Dagens Industri said the group, Konsortium Jakob AB, had been approached by Volvo trade unions after reports that Ford was getting ready to intensify talks with Chinese automaker Geely Holding, which is among the suitors for Volvo.
Ford put its money-losing Volvo unit up for sale in December last year as it looked to cut costs and raise cash amid industry-wide record low vehicle sales. The firm said in July it was in discussions with a number of parties on the carmaker.
Representatives for Konsortium Jakob met with Ford's management last week, according to the reports.
Pendragon latest to call for renewal of scrappage
Renewal of scheme
Chief executive Trevor Finn said there was a probability that the scrappage scheme would be renewed as it had proved successful for the government.
Finn has become the latest leader in the car business to back a call for the renewal of the scrappage scheme.
Earlier this year, Ford of Britain managing director Nigel Sharp told Motor Trader the UK's number one carmaker wanted the scheme to be extended and that it was good for business.
The current scheme, announced in the April Budget and launched mid-May, has boosted new car sales and given a stimulus to dealers' aftersales business.
RMIF polls members
Retail Motor Industry Federation director Sue Robinson said the scheme had given "a vital boost" to the UK automotive sector during a critical period.
A poll carried out by Motor Trader last month found the majority of dealers want the scheme to be continued in some form.
But independent garages say they have lost business because of scrappage. Older cars are being scrapped instead of going through MoTs and being serviced.
DATED: 19.08.09
FEED: MT
RMIF consults with members on scrappage
Motor Trader research
Recent research carried out by Motor Trader found most motor dealers want the scheme to be extended.
The current scheme, announced in the April Budget and launched mid-May, has boosted new car sales and given a stimulus to dealers' aftersale business.
Retail motor Industry Federation director Sue Robinson said the scheme has given "a vital boost" to the UK automotive sector during a critical period.
Boosted footfall
"It has boosted footfall into new car showrooms, enabled many consumers to buy a new car who would have otherwise been unable to do so, and has provided a halo effect to the overall car sales market, " said Robinson.
So far, 154,927 vehicle orders have been made under the scrappage scheme which is due to in February 2010, or when the Government £300m funding is exhausted.
"We are in the process of consulting the RMIF's members on whether we should lobby Government for the scheme to be continued in or beyond 2010, and we will be making an announcement shortly, " said Robinson.
DATED: 19.08.09
FEED: MT
VW to take 42 per cent stake in Porsche
Volkswagen is to take a 42 per cent stake in sports carmaker Porsche for Euro 3.3bn (£2.8bn) by the end of 2009.The plans will culminate in the merger of Porsche with Volkswagen which is expected to be completed in 2011 and will require the approval of both companies' shareholders.
Remain independent
Porsche is to remain an independent company headquartered in Zuffenhausen.
Negotiations are also ongoing with the Emirate of Qatar to acquire options on Volkswagen shares
Professor Martin Winterkorn, chairman of Volkswagen board of management, said:
"Volkswagen and Porsche today took a decisive step towards a joint future.
"As a group with now ten strong, independent brands we will further expand our unique global position."
Protracted battle
The merger, with Volkswagen taking the lead role, comes after a protracted battle between the two companies, which led to the departure of Porsche's chief executive Wendelin Wiedeking with the largest pay-off in German corporate history.
Earlier Porsche had tried to take control of Volkswagen, borrowing heavily, but it was forced to back track with the financial downturn and the burden of servicing heavy debts.
The combination of Volkswagen and Porsche will see the emergence of a car group with sales of 6.4 million vehicles and more than 400,000 employees.
DATED: 19.08.09
FEED: MT
Remain independent
Large Groups renew with Accident Exchange
Inchcape Retail Group, Jardine Motors and JCT600 extended their partnerships with the company, a total of 198 dealerships representing 33 brands.
"All three groups have been long term partners with us, so we're naturally delighted to continue to build on those relationships and the cultural understanding we have established with each," said Steve Evans, chief executive of Accident Exchange.
"Accident management is an integral function of their customer retention and business growth strategy.
£55.4m loss
Accident Exchange reported a £55.4m loss for the year-ended 30 April on adjusted revenues of £167m.
It said it was hit hard by the economic downturn which has seen a reduction in the number of cars off the road for repairs as mileages have reduced during the recession.
Last year it reported a £9.9m profit on turnover of £161.9m.
DATED: 19.08.09
FEED: MT
Pendragon half year profits take a hit
At its prestige division, Stratstone, turnover was down 37.4 per cent year on year while turnover at its 130-outlet volume division Evans Halshaw fell 35.5 per cent.
Used car market
In the used car market, demand continued to exceed supply with wholesale prices rising during 2009. The company plans to invest more in used stock in the second half of the year.
Pendragon closed 14 franchised outlets in the first half of 2009 and it currently has almost £40m of property on the market. The company also reduced its borrowings by £39.6m to £317.7m and cut its new car stock by £235.9m.
Pendragon chief executive Trevor Finn (pictured) said: "The first half of 2009 has seen a very challenging car market.
Significant turnaround
"Despite this, a significant turnaround from the loss incurred in the second half of 2008 has been achieved as a result of the decisive actions taken by management to reduce costs and close non viable dealerships.
"In addition to negotiating a new three year borrowing facility we have reduced debt levels in the first half of the year, which underlines the financial stability of the group in what remain challenging trading conditions."
Looking to the rest of 2009, Finn said the scrappage scheme would help the new car market and used car prices would remain strong.
DATED: 19.08.09
FEED: MT
General Motors Europe deal edges closer
General Motors Europe has reached a draft agreement with two bidders to sell of Vauxhall and Opel.
Magna International and RHJ International have both agreed terms and it is now up to General Motors in the US, as well as the German, British and US governments.
The already protracted negotiations over the future of the Vauxhall and Opel are likely to take another two weeks.
Magna is considered the favourite to buy GM Europe, but it was forced to sweeten its offer yesterday before a draft agreement could be reached.
Magna, which is backed by Sberbank, the Russian state bank, wanted access to GM’s intellectual property rights for the designs to all of its models worldwide, but has since dropped this demand after it was deemed an unacceptable request.
If Magna does end up being the winner bidder, Sberbank will get a 35% stake in the company, Magna will get 20%, GM will keep 35% and Opel workers will get 10%.
DATED: 19.08.09
FEED: AM
VW agrees Porsche merger details
Volkswagen (VW) and Porsche have agreed the details under which VW will merge with its German compatriot by 2011.
Under the deal, VW will initially buy a 42% stake in Porsche by the end of this year for 3.3bn euros ($4.7bn; £2.8bn).
The deal ends months of acrimony between the two firms, and concludes Porsche's failed efforts to buy VW.
Over the past year Porsche built up major debts to get a 51% stake in VW, only to fall short of the required 75% when it could not raise more funds.
Funding failure
Porsche's failure to buy VW saw the firm's former chief executive Wendelin Wiedeking and financial director Holger Haerter resign "with immediate effect" last month.
It failed to raise the funds to increase its shareholding in VW above 51% due to the impact of both the global credit crunch and the slump in global car sales.
Porsche will now effectively become the 10th brand in the VW family, joining the likes of Audi, Seat and Skoda.
However, VW has pledged to maintain Porsche's "independence".
It added that VW would "preserve" its own "solid financial base".
The deal values Porsche at 12.4bn euros.
'New era'
VW chief executive Martin Winterkorn said the announcement marked "a new era" for the two firms.
"Porsche is a real enrichment for our company's portfolio," he said.
Mr Winterkorn added that the Porsche and Piech families will be the largest shareholders in the merged firm.
Meanwhile, VW's home state of Lower Saxony, which owns a 20% stake in the firm, will retain the right to block important decisions.
Scrappage scheme lifts Ford sales
Ford is to boost production in the US to meet increased demand for its cars sparked by the government's "cash for clunkers" scrappage scheme.
It said it would build another 6,000 units of its Focus small car between now and the end of September, and a further 3,500 of its Escape model.
The move will contribute to Ford's third quarter production being 18% higher than the same time last year.
The $3bn (£1.8bn) scrappage scheme is subsiding people trading in old cars.
Launched at the start of last month, the Car Allowance Rebate System allows owners of old cars and trucks gain up to $4,500 towards a new vehicle in exchange for their old model.
Add overtime
"I think we were surprised by the speed and the urgency with which consumers went to dealers," said Ford sales analyst George Pipas.
To meet the increased production, Ford said it would add overtime and a Saturday shift at its Wayne, Michigan assembly plant, which makes the Focus.
It has also reversed plans to shut its Kansas City plant for two days this month, the facility that makes the Escape, a small sports utility vehicle.
Ford also said on Thursday that it intended to boost US production in the October to December fourth quarter by 33% compared with a year earlier.
Official figures from the Commerce Department showed that the scrappage scheme helped lift US car sales by 2.4% in July, the biggest rise in six months.
LDV in 'exclusive' sale talks
LDV and Birmingham Pressing Limited, in which LDV has a stake, are talking to one party exclusively hoping to sell the business, said the administrators.
Pricewaterhouse Coopers said the party has indicated it was studying options for "recommencing some production, at the Washwood Heath site".
LDV went into administration in June with the loss of more than 800 jobs at its Washwood Heath plant.
Administrators declined to give any other details of the talks.
"It would not be appropriate to comment further on the identity of the proposed purchaser at this time, given the confidentiality agreements in place," said the administrators.
In June, the administrators said at least six organisations were considering whether to invest in the company.
The plant has been at a near-standstill since before the end of 2008 during the search for a new owner.
The company has been owned by Russia's Gaz Group since 2006.
German group develops new Trabant
A German consortium is developing a slick, updated version of the Trabant, communist East Germany's famously unreliable mass-produced car.
The new model is electric with solar panels on the roof - in stark contrast to the fume-belching original.
Makers plan to unveil a prototype of the car at Frankfurt's international motor show in September.
The Trabant was first produced in 1957. Discontinued in 1991, the old cars have since developed a cult following.
The original idea for the new car began with with Herpa Miniaturmodelle, a producer of miniature cars and aeroplanes that made a popular model version of a new Trabant.
'Ecological and economical'
The prototype of the full-sized car has been developed by specialist auto company IndiKar, which is based in eastern Germany.
It joined a consortium with Herpa and German engineering company IAV, and the firms are now hoping to raise funds to produce the new car for the market.
Herpa's Daniel Stiegler said the prototype would be a simple model with no unnecessary frills, but otherwise quite unlike the communist-era version.
"The original Trabant was a small, stinky car," he told the BBC. "Now we have an e-Trabant which is ecological and economical."
The car will be similar in form to the miniature produced by Herpa, but not identical.
Solar panels on the roof will be used to provide air conditioning.
The consortium is either hoping to attract interest from a major car maker who could help produce the new Trabant on a mass scale, or smaller investors who could allow the model to be made as a more specialist product.
