BMW is pushing forward in the face of what many economists are fervently discussing in the business world: the possible collapse of the euro.

Such a catastrophic event is unlikely, BMW CEO Norbert Reithofer told Automotive News. He reaffirmed that strong belief in another interview saying ”I don’t even want to imagine that at all, and I don’t believe it will happen.” In fact, BMW is planning significant expansion.

The company is intends to increase sales by 25 percent despite the fact that research group IHS Automotive forecasts as much as a 41 percent overcapacity for vehicles in Europe. Regardless of softening sales in the European market, BMW remained the top luxury car manufacturer this year and is planning to expand on their 1.6 million unit sales for 2011 to a whopping 2 million by 2020.

They plan to achieve that goal by further expanding into the international market. Part of that plan involves setting up a factory in Brazil, but more significantly, BMW is eyeing the growing Chinese market.

Proportionally, Chinese consumers drive about the same number of economy cars as Europeans, but the difference is that Reithofer says 75 percent of Chinese economy car owners want to upgrade for their next purchase.

“In 2012, the BMW brand will have the youngest model range of all of our core competitors by far,” Chief Executive Norbert Reithofer told reporters on Thursday evening at an event in Munich. It’s something he hopes will entice the young and increasingly wealthy Chinese market segment.

If it turns out that BMW is being too aggressive in their expansion, they can scale back produciton by 20 to 30 percent according to Frank-Peter Arndt, BMW’s production chief.

[Source: Automotive News]

It seems Ford‘s financial health is improving after an announcement that they will reinstate a cash dividend on their stocks at 5 cents a share.

Ford originally abandoned the dividend in 2006 as part of an effort to preserve cash after posting a total of $9 billion in losses the previous five years. They hadn’t planned to make such a move until their credit rating climbed back to investment status, but the board felt differently in light of the company’s success.

“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” Bill Ford, executive chairman of Ford, said in a statement. “The board believes it is important to share the benefits of our improved financial performance with our shareholders.”

The $9 billion Ford lost leading up to the recession paled in comparison to the $30.1 billion they lost between 2006 and 2008, but it looks like the number crunchers feel good about the last 10 quarters where they posted consistant profits. As it stands, the dividend is payable on March 1, 2012, to Class B and common shareholders of record on Jan. 31, 2012.

S&P and Moody’s both downgraded Ford’s credit rating in 2005, before the bulk of their losses took place. Though neither returned Ford to the rating originally aligned with reinstating the cash dividend, they bumped the automaker up to just below investment grade. The upgrade came because of improved finances, but also after a renewed agreement with the United Auto Workers.

Lewis Booth, Ford’s CFO expects the company’s strong financial growth to support the dividend nonetheless.

“We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles,” Booth said in a statement.

S&P said today that the move to reinstate the dividend will not affect Ford’s credit rating because it is less than the $2 billion they expect Ford to generate in automotive operating cash flow before the dividends are paid out.

Despite that, they also said that global industry prospects are weakening, pointing to economic uncertainty in Europe and a softening market in Brazil.

While it isn’t clear how much of an effect that will have on Ford, a blow to international sales may be a concern for the company on some level considering their growing international success with cars like the Fiesta.

[Source: Automotive News]

Ford announced that they are investing $446 million into their Sao Bernardo do Campo plant near Sao Paulo, Brazil towards the production of a new global vehicle.

Unfortunately Ford didn’t announce any more details in regards to the new model, but it will likely be something geared toward’s Brazil’s emerging middle class.

The Sao Benardo do Campo plant currently produces the Ka, Courier and F-250 models and has an annual capacity of of 160,000 cars and light vehicles in addition to 40,000 trucks.

Brazil has become an emerging market for many vehicle manufacturers. Nissan also announced previously that they’ll be building a $1.5 billion factory in Brazil to supply some of the brand new models

[Source: Automotive News]

Holland hippie community rejoice! As of last month, Volkswagen‘s Dutch operations has debuted the 2012 model Volkswagen Bus. No, it isn’t the Bulli concept we saw earlier at Geneva, but the original Volkswagen Type 2, commonly known as the Bus or Combi.

The popularity and desirability of the classic van isn’t surprising. Current asking prices for the Bus have risen up to ten times the price of its original MSRP 30 years ago. But what’s more surprising is that new Volkswagen Buses are still being manufactured in Brazil. Overall, little has changed since the Type 2 was first introduced in the early 1970s. The exterior panels are identical, and even the door handles and headlights are left unchanged. Its gearbox is an outdated 4-speed transaxle and the Bus still uses drum brakes in the rear.

However, a crucial modification from the original is a 1.4 liter water-cooled inline-4 engine replacing the Type 2′s original air-cooled boxer 4. What’s more, the spare tire mount out in front is actually a radiator in disguise. Also, thanks to demands in the Brazilian market, the new 1.4 liter engine is capable of taking both ethanol and gasoline.

Sold as a camper, the Bus comes fully equipped with a gas stove, a water pump, a mini fridge, and a built-in oven. Seats will be identical to the original but the dashboard receives a modern makeover featuring an updated instrument panel. Additional options that are available include flatscreen TV with a DVD player, but don’t get too crazy. Prices for the 2012 Bus will start at a precious 44,995€ to 55,995€ ($61,000 to $76,000).

Available only in the Netherlands, the 2012 Bus can be registered anywhere in the European Union.

GALLERY: 2012 Volkwagen Bus

[Sources: Left Lane News]

Sorry to get your hopes up, but it looks like the 2013 Chevrolet TrailBlazer won’t be coming here after all. Despite teasing us with a preview of the upcoming mid-size SUV, Chevrolet representatives said that there are no immediate plans to bring the TrailBlazer to our market.

The TrailBlazer’s platform-mate, the Colorado pickup, will be coming here, so there’s no reason why GM couldn’t change its mind. Nevertheless, Asia and South America will get first dibs on the truck, with Thailand serving as the TrailBlazer’s first market. GM noted that the TrailBlazer was developed by their Brazilian arm, which means the TrailBlazer will likely be a more compact, fuel-efficient SUV, although it will ride on a traditional truck platform, rather than a car-based frame.

[Source: Inside Line]

A report by Roland Berger Strategy Consultants claims that by 2015, Brazil will be the world’s third largest auto market, with China and the United States occupying the first and second slots respectively.

Brazil will displace Japan as the third largest market, as sales are expected to double to 6.6 million vehicles by 2020. The report also claims that Chinese and Indian auto makers will export vehicles to Brazil en masse and could grab 10 percent of the market by 2020. Volkswagen, Ford and Fiat have long enjoyed market dominance in Brazil, but a flood of cheap cars from China and India could radically alter the balance of market share in an economy where merely having a car is seen as a major step-up from two-wheeled transportation.

[Source: The Truth About Cars]

Toyota is eager to regain its “world’s largest automaker” title back. So by 2012, if things go according to plan, expect to see a lot more Toyota products on the roads: 8 million, to be specific.

This target is 1 million more than what Toyota will build this year. The company is gunning for this lofty production target in emerging markets like China and India, where sales are booming. To reach this goal, Toyota plans to build new factories in China and Brazil with the capacity to build 170,000 compact cars. It also plans to expand production in India by 50,000 vehicles, as well as expanding at other plants in China and Thailand.

America will get involved, too: a plant in Mississippi will open up in the fall, with a capacity of 150,000 vehicles. And back home in Japan, Toyota will increase daily production by 2-3,000 vehicles, to 15,000 per day. A new compact hybrid will comprise part of that production.

[Source: Nikkei via Morningstar]

Well, there’s good indication that it will at least be heading for ‘South’ America, where automotive tastes tend to run more closely to those across the Atlantic.

The B-Max adopts much of the current Fiesta’s styling, albeit in a taller package. It’s also the first to receive Ford‘s new three-cylinder EcoBoost engine. And with Ford recently announcing the EcoBoost 3 will be offered in North America, it’s not hard to speculate that this is the package it could come wrapped in.

Both engine and B-Max will be assembled at Ford’s plant in Craiova, Romania, though with Ford expected to wind down Fiesta production at its Brazilian plant in Cuantitalan (relying instead on models built in Mexico for that market), there’s a good chance B-Max production might be added there. That would make the idea of a B-Max ending up in our showrooms more feasible.

Further indications that this pint-size MPV could make it here, include the fact that Ford has trademarked the B-Max name with the U.S. Patent Office, along with ‘Easy Access Door System,’ marketing speak for a sliding door setup which, incidentily, was previewed on the B-MAX concept at the Geneva Motor Show back in March. All we can say for now is, watch this space.

[Source: Ford Inside News]

From the Adventures in Advertising files come a series of ads for Kia that are evidently too racy for their cars (that themselves aren’t).

The ads hail from Brazil, where you think they would have an eye for this sort of thing. But Kia, a family-friendly carmaker with a full line of family-friendly toddler schleppers, is distancing itself from these cartoons that depict two things: a safe, innocent fairy tale on the left, and a hotter version on the right that leads into the back page of Oui. The ads are supposed to tout Kia’s dual-zone climate controls, which may require a stretch of the imagination that advertising bloggers possess in spades.

Kia Motors America has made it painstakingly clear (through a press release) that they don’t want or have anything to do with all of this sexy sex business, and that their cars do not represent the sort of sexy sexiness that these highly sexual, sex-laden ads are sexily promoting.

“Kia Motors America (KMA) has become aware of an offensive piece of advertising material that was created by an ad agency in Brazil that KMA has no business relationship with and has never worked with,” reads the release. “This ad was not created in the U.S. by Kia Motors America or any of its marketing partners and does not reflect the opinions or values of KMA or Kia Motors Corporation. The ad is undoubtedly inappropriate, and on behalf of Kia Motors we apologize to those who have been offended by it. We can guarantee this advertisement has never and will never be used in any form in the United States, and our global headquarters in Seoul, South Korea is addressing the issue with the independent Brazilian distributor.”

For Kia, it’s back to hamsters—possibly the least sexy of animals—and the fact that these cartoons would break down into cognitive dissonance against the wholesomeness of Yo Gabba Gabba, a children’s show that does not feature sultry schoolgirls with exposed belly buttons. Yet.

Click the jump to get a peek at the titillating ads. But no touching.

Continue Reading…

Along with other Japanese automakers, Mazda is predicting a drop in operating profit for 2011, due to a strengthening yen and supply disruptions, which continue to affect production output, following the March 11 earthquake and Tsunami in Japan.

However, the projected forecast in operating profit through March 2012 is slightly better than originally hoped, estimates place it at around some 20 billion yen ($248 million), versus original estimates of 5.6 billion yen predicted by industry analysts. Mazda has also forecast a net operating profit of 1 billion yen for this year, versus a net loss of some 60 billion yen in 2010.

Nevertheless, the Hiroshima based company is looking to diversify its manufacturing base to further increase profitability, with an eye on emerging markets as major centers for potential growth, including Central and South America.

To cater to market needs in this region, the company has announced that, in conjunction with Sumitomo Corporation, it will begin construction of a new assembly plant in the Mexican state of Guanajuato. The plant will produce the Mazda2 and Mazda3 as well as a range of engines.

Once up and running, the plant will have a production capacity of some 140,000 cars annually and will employ approzimately 3,000 people; Mazda will own 70 percent of the venture, Sumitomo the remaining 30 percent.

In addition, both companies will also set up a joint sales venture in Brazil, in an effort to capitalize on that country’s fast growing auto market.

Mazda currently has two thirds of its total vehicle production based in Japan and the rising yen is making its products increasingly uncompetitive overseas (currently 80 percent of total production is exported) as well as eating into profits.

It is hoped that an additional assembly plant outside Japan will help reduce the problem (currently Mazda has three other production facilities outside the home country, in the US, China and  Thailand, though all of those were set up as joint ventures with Ford Motor Company).

Upon announcement of the new Mexico factory, Mazda’s shares on the Nikkei (the Tokyo Stock Exchange), spiked some 1.6 percent, out performing the benchmark average, reaching 195 yen per share.

[Source: Reuters]