Issue: Oct 2004


Europe Report



Diesel, Parisian-style

by Anthony Lewis

Diesel-powered news from the Paris Auto Show

Nissan will delay introducing its Infiniti brand to the U.K. until it has a suitable V-6 diesel engine, according to Patrick P?lata, executive vice president and the man in charge of Nissan in Europe.

His boss, Carlos Ghosn, soon to take up a dual role running Renault and Nissan, fuelled the diesel debate further when he said that Europe would not need fuel-cell powered vehicles for some years after their introduction, the U.S. and Japan because Europe has dieselengined cars. Thats the big difference.







 
The Nissan Tone will be built in the U.K. with diesel engines and transmissions sourced from alliance-partner Renault.
These two comments came against a number of reports coinciding with the Paris Motor Show indicating that the Japanese Big 3 Toyota, Nissan and Honda plan to sharply increase sales of diesel-engine cars and trucks in Europe.

The reports out of Japan from CBS Marketwatch said that the Japanese car makers are looking to increase their sales of dieselengine vehicles to about 40 percent to 50 percent of overall car sales in the market by 2006. Diesel cars are expected to account for 55 percent of new car sales in the market by 2008.

Toyota also plans to boost the number of diesel models among its Lexus brand luxury cars to more than half, the report added.

The demand for diesels is having other unexpected benefits. Colin Dodge, senior vice president Manufacturing, Nissan Europe, said at the show that the demand for diesel versions of its Micra city car was going a long way toward addressing the problems created by manufacturing outside the Euro currency zone.

This is because the diesel engine and transmissions are supplied by Nissans Alliance partner Renault and are built and sourced within the Euro-zone, whereas Nissans U.K. factory in Sunderland is stuck in the land of the Sterling.

When the new Tone, unveiled at Paris as a show car, goes into production at Sunderland in time for launch in early 2006, it will be currency neutral, says Dodge. In other words, it doesnt matter what the exchange rate is between Sterling and the Euro, Nissan will be able to make money out of every 100,000 Tones that Dodge says will be built each year.

This contrasts with the fortunes of Ford and GM in Europe, both of whom are struggling to make money. Fritz Henderson, the new boss of GM Europe, has given himself 60 days to develop a rescue plan for the companys Opel and Saab subsidiaries. Further factory closures must be high on his priority list Saab produces only 120,000 cars a year in Sweden yet maintains full design and engineering facilities. The sums just dont add up.
 
Pile onto that the woes of Ford, which announced its decision to stop making Jaguars at the historic Brown Lanes factory in Coventry, England, just before the show, and you can understand why most interest at Paris focussed on Renault and French rival PSA Peugeot-Citro?n.

There was also good news from suppliers. Valeos belt-driven start-stop system was featured on Hyundais concept car ECO Getz, a low-emissions vehicle powered by a 1.1L diesel engine. It is the first time that the system, called ISG or Idle Stop & Go by Hyundai, has been featured on a diesel engine. It stops and restarts the engine automatically when stationary and before moving off.
 
Overall, it was perhaps fitting at the Paris Show that it was the French manufacturers that seemed to be on a roll. The Renault Modus and Peugeot 1007 city car with its Delphi-produced sliding door were stars of the show, while Citro?ns C4 model looks as pretty as anything the company has done in recent years.

A couple of days before the show, Renault unveiled the Logan, the $5,000 car it has been developing with its Romanian subsidiary Dacia. A car for emerging markets, Renaults manufacturing chief Georges Douin revealed that the sedan would also be available in western European markets.

Although the base model is $5,000, top specification vehicles will range up to $8,500, and as everyone knows the best margins come with the most expensive models.

Douin said that as well as Romania, the Logan sedan will also be built at Renaults joint venture factory with the city of Moscow beginning next spring, while there will also be CKD operations in Colombia, South America and Morocco in North Africa.

Renault also has an agreement with two Iranian manufacturers to build up to 300,000 Logans a year in the Middle East starting with 56 percent local supply.

Iran is a very interesting market, said Douin. It already has sales of 700,000 a year and the country is very keen to boost its automotive industry.

This article was provided exclusively to Automotive Industries by Interchange, a U.K.-based automotive business agency and consultancy servicing media and corporate clients. Anthony Lewis is a partner in Interchange and can be contacted via e-mail at interchangenews@aol.com.

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