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 |  Aug 23 2011, 11:45 AM

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In defiance of a largely stagnant economy, Audi is ramping up production of its A8 flagship sedan in anticipation of steady demand for luxury cars, particularly in China.

Albrect Reimold, who runs Audi’s second largest assembly plant in Nerkarsulm, in Southwestern Germany, which builds the car, along with A7 Sportback and R8 recently stated “we’re extremely busy and have reason to believe this trend will continue for some time.”

The plant has been hiring staff and Reimold expects output to jump by some 21 percent during 2011, which would result in a record production total of some 260,000 cars for the year.

In similar moves, Audi’s chief rivals, BMW and Mercedes-Benz are also increasing production and are even building new factories, despite the debt crisis and economic uncertainty that continues to plague much of Europe. BMW says it predicts global vehicle sales of some 1.6 million for 2011 (up from original estimates of some 1.5 million), while Mercedes says demand for M-B and Smart models should outstrip 2010 totals, which were some 1.35 million units.

Nevertheless, despite bucking the current economic trends, there are some industry analysts who feel that this apparent growth from the big three German luxury car makers probably won’t sustain itself over the longer term.

Marcus Kappler, deputy head of economic analysis at the ZEW Center for Economic Research in Manheim, Germany, believes that the automakers won’t be able to ‘de-couple’ themselves from an economy that’s clearly normalizing.

His sentiments are echoed by Henner Lehne, a Frankfurt based analyst with research firm IHS Automotive, who believes that economic realities will probably hit the likes of Audi, BMW and Mercedes next year. “Customers are becoming more cautious,” he says. “Big-ticket items sell less well in difficult times.”  However, he did say that even in such circumstances, luxury buyers still tend to have more money to spend, therefore an economic slowdown might not hit high-end carmakers as hard as those catering to the mass market.

It’ll be interesting to see how things pan out.

GALLERY: 2011 Audi A8

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[Source: Automotive News]

 |  Apr 25 2011, 5:18 PM

It’s no secret that Saab has been struggling since becoming ‘independent.’ The company, purchased from GM by Spyker last year has continued to face financial and supply problems, which has stunted production and resulted in sales falling far short of projected targets.

As a result, the company, in order to help pay for parts and get production rolling again, has been selling off company assets and or/ re-leasing them in some cases.

However, another issue concerns the  outstanding loan given to Saab by the Swedish Government through the European Investment Bank. With the company facing a sizable number of obstacles, there are those who feel the chances of repaying back that money are questionable at best and some assurance is needed.

As a result, perhaps not surprisingly, the Swedish media  has been circulating rumors that the government had been encouraging Volvo (now owned by China’s Geely Automotive) to acquire Saab in a possible takeover.

However, Volvo has now gone on the record, stating that no such talks have taken place and nor have any been planned for the future. In the meantime, Saab CEO Victor Mueller, is continuing to look for other sources to tap into for capital, including a number of Chinese automakers.

Back before the Spyker deal went through, Saab had been in talks with China’s BAIC, which had expressed interest in buying the Swedish automaker, lock, stock and barrel from GM.  In the end BAIC simply acquired ‘old’ Saab assets, including all the production tooling for the outgoing 9-3. However, given the current situation at Saab itself, there might be a strong possibility that BAIC could get its hands on more than just former assets of the Swedish automaker.

[Source: Reuters]