Highlights of the year’s major events in the European auto industry:
• European auto makers began the year cautiously, predicting 2011 sales would remain flat with 2010’s 13.4 million-unit tally. The industry had wrapped up 2010 with nine straight months of year-over-year sales declines, but December’s 3.2% dip was the year’s smallest, sparking hope the market had bottomed out.
Germany was expected to help carry the ball in 2011, after a dismal 2010 that saw sales slip 23%. Expectations were exceeded through the year’s halfway mark, with European light-vehicle sales up 5.2%.
• Renault enters the year mired in a criminal investigation involving the potential sale of inside information about the auto maker’s electric-vehicle technology and marketing plans to competitors.
Three executives were dismissed in 2010 for the alleged espionage, but by early 2011 were absolved of any wrongdoing when it was determined Renault management had been victimized by an elaborate hoax.
In April, the company’s board of directors dismisses six high-ranking executives for having botched the company’s internal investigation. CEO Carlos Ghosn was docked some bonus money and forfeits some stock options, and Chief Operating Officer Patrick Pelata, considered in line to succeed Ghosn, resigns his post.
In October, Renault beefed up its internal protection systems and announced plans to create an ethics department.
• Automobiles Peugeot enters the electric-vehicle foray in January with a slow rollout of its iOn model, based on thei-MiEV and imported from Japan. First customers include a car-sharing project in Nice, France, which signs up for 40 of the EVs. The iOn is available for lease at E500 ($680) per month, including the cost of the battery.
• Competitorsand PSA Peugeot Citroen announce in February that they will create a new joint venture, BMW Peugeot Citroen Electrification, to develop hybrid versions of their cars beginning in 2014. The JV will develop hybrid systems for both front- and rear-wheel-drive vehicles and could supply engineering services and components to other auto makers, as well.
Later in the month,confirms it will launch a new sub-brand called BMW i for its electrified vehicles. The first two models on tap are the i3 battery-electric city car and i8 plug-in hybrid sports car. Both take their official bows at the Frankfurt auto show in September.
• Jaguar Land Rover hangs a help-wanted sign in the window and draws more than 6,500 applications for 280 open positions for new graduates in engineering, manufacturing, finance, human resources, marketing, purchasing and information technology. The auto maker employed 18,000 people globally as of early 2011 and expects that to increase to more than 20,000 by 2012.
•inks a late-February deal with GAZ to build more than 100,000 vehicles annually in Russia. Full-scale production is planned, including body shop, paint and final assembly operations at a GAZ facility in Nizhyn Novgorod.
VW is just one of many auto makers looking to solidify a manufacturing base in Russia following that country’s new Decree 166 incentive program that requires auto makers to increase local content. Among other manufacturers announcing plans for new plants or expansion of existing operations in 2011 are-Kia, Renault, and .
• After declaring it would not enter the market for low-cost cars, PSA Peugeot Citroen reverses its stance in March, revealing it has three such projects in the works. Included is a car under development in Spain and earmarked for markets including North Africa, South America and India.
A joint venture in China with Chang’an is tapped to produce inexpensive light-commercial vehicles under a new brand. The Citroen C-Cactus concept, first unveiled in 2007 as a potential back-to-basics car, is resurrected as the Essentielle concept earmarked for production in France.
•’s quality scandal leads to more autonomy for its European operation, which gains control of plants in St. Petersburg, Russia, and Kolin, Czech Republic, in March as part of a worldwide reorganization. Europe also is given increased design responsibility for cars in the A-, B- and C-segments.
• Among production milestones in 2011:Poland builds the 1.5 millionth car at its Gliwice facility in March; Kia Slovakia produces it 1 millionth engine in Zilina in May; BMW assembles its 2 millionth Mini at the Oxford, U.K., facility in September; ’s Sunderland, U.K., plant turns 25, also in September.
• In April, BMW goes trolling for 40 engineers with carbon-fiber expertise to help develop its i3 electric and i8 hybrid vehicles. BMW is to make extensive use of the material for those models in an effort to limit weight and extend driving range. Later in August, BMW notes its worldwide employment would top 100,000 people in the near future, up from 96,000.
• Adam Opel CEO Karl Stracke holds fast to a promise his company will regain profitability in 2011. “Our footprint and structured costs are significantly improved in the company right now,” he says in April. “We are optimizing the pricing in the marketplace, as well. In this context, breakeven has already been achieved and we are about to make money this year.”
• Eight French cities begin following through on plans to ban some high-polluting vehicles in 2013, publishing new rules in April that would prohibit entry by gasoline-fueled cars that do not comply with Euro 2 emissions standards (built before Sept. 30, 1997). Additional rules would restrict diesel cars and some commercial vehicles.
• Production of the new-generation Lancia Ypsilon gets under way in May at’s plant in Tychy, Poland. Plans call for output of 50,000-60,000 Lancias at the factory in 2011 and 100,000-120,000 in 2012.
• Russia’s AvtoVAZ unveils a new low-cost Lada Granta sedan in May. The car is slated to hit the market in December. The Granta is based on the Lada Kalina platform, but uses a higher percentage of local parts to keep costs down. It is designed to be Lada’s least-expensive model, at RR219,000 ($7,882).
• Sales of Ukrainian-assembled Chery vehicles get under way in Russia. A Chinese model built in Ukraine with at least 50% local content can avoid Russian tariffs. Chery’s A13 sedan is the first to make the trip from Ukraine to Russia, but a hatchback version also is planned for export later in the year. Chery forecasts sales of Ukraine-assembled cars in 2011 at 5,000 units.
• Challenge Bibendum, a major annual sustainable mobility event, has a surprise winner: Renault’s Fluence Z.E. electric vehicle. The Fluence goes faster than a Tesla Roadster around a winding course and spews the least amount of carbon dioxide well-to-wheel than any car in the competition.
Swapping out its battery – a task that takes just 6.5 minutes – helps it complete the 186-mile (300-km) road course faster than its recharging competitors. And its CO2 output is rated at just 57 g/km, well below the 91 g/km average rating for prototype vehicles in the competition.
• Yo-Avto, a joint venture owned 51% by Russian billionaire Mikhail Prokhorov’s Onexim Group and 49% by Yarovit Motors, breaks ground in June for a new factory to build hybrid-electric vehicles. Production is slated to begin in late 2012, with capacity for about 45,000 vehicles.
The first model to come is a cross/utility coupe called the Yo CrossCoupe. Also on tap are a 5-door hatchback dubbed the Yo Microvan and a delivery van known as the Yo Furgon.
• Plans to produce electric-vehicle batteries in France are put on hold by Renault in late June, a decision blamed on “technical constraints.” The facility was slated to open in 2012, but now reportedly is being eyed for 2014 or 2015.
A more pessimistic outlook for EV sales may have something to do with the delay, however. Other battery makers, including the Johnson Controls-Saft joint venture that in May filed for dissolution in a Delaware court, were backing away from some EV battery plans due to more bearish sales forecasts.
• Europe appears on its way to achieving its carbon-dioxide emissions goal of 130 g/km in 2015 after the European Environmental Agency reports in July that an average of 140.3 g/km was recorded for 2010. Denmark leads with 126.6 g/km.
• Renault blames a lack of diesel engines for curbing production and limiting first-half sales to 1.4 million units. Although a record volume, the tally is up only 1.9% from like-2010. The auto maker says it could have sold another 50,000 vehicles in the period had it been able to build them.
• In August, Adam Opel reveals it will expand its Eisenach, Germany, plant for production of a new small car below the Corsa in size and price. Codenamed Junior, the new model will be launched in January 2013. Output is planned at about 100,000 units annually. Investment at Eisenach totals E190 million ($271 million) for construction, production equipment and tooling.
• Saab finds itself back in reorganization in September after it fails to secure anticipated funding from a Chinese partner and fails to pay its employees and suppliers. Although a Swedish court initially rejects the auto maker’s appeal for reorganization, the decision is overturned on appeal.
Executives predict it will take about three months to restructure the company and secure some E245 million ($350.6) in funding from its Chinese partners, dealership conglomerate Pang da and auto maker ZhejiangYoungman Lotus Automobile.
• Vauxhall reports in September its plan to increase U.K. parts sourcing by £200 million ($273 million) by the end of the year is ahead of schedule.
• Rolls-Royce says it will spend £10 million ($15.8 million) to expand its Goodwood, U.K., plant amid record sales volumes. The expansion is to be completed in late 2012.
• Jaguar Land Rover earmarks £355 million ($555.6 million) in September for a new U.K. plant to produce advanced-technology 4-cyl. gasoline and diesel engines.
• Continued sluggish sales in Spain take their toll on local manufacturing operations, with Adam Opel the latest to scale back production. Plans announced in late September call for 7,200 workers at its Zaragoza plant to be idled for 16 work days in 2011 and 46 days in 2012. Supplier Lear announces it will close its factory in La Rioja and Visteon confirms it will end production at its Cadiz Electronica facility.
• Concerns about market manipulation in Germany scuttle’s plan to absorb Porsche by the end of the year. Once legal hurdles are resolved, VW says, it will resume efforts to add the sports-car maker to its stable of brands. The Porsche takeover isn’t the only tie-up to face hurdles in September, as VW’s relationship with Suzuki hits the rocks.
The Japanese auto maker complains VW isn’t treating it like a full-fledged partner and says it wants out of the tie-up. VW contends Suzuki violated its partnership agreement by signing a deal to buy engines from, but says it still wants to maintain a relationship.
In October, Suzuki delivers an ultimatum demanding VW come across with promised hybrid-vehicle technology within weeks or sell back its stake in the Japanese auto maker.
• Fiat Auto Poland cuts 435 contract workers from employment rolls at its Tychy plant Oct. 1, amid declining production. The plant, which built its 2 millionth Fiat Panda in July, is expected to produce 470,000-480,000 cars this year, down from 533,000 in 2010. Its record year was 2009, when it produced 605,797 vehicles.
•records its highest single-month market share in September, delivering 73,713 vehicles across Europe for a 4.2% market share, surpassing the previous 4.1% high recorded in August 1995. The Qashqai (23,000 units) and Juke (14,000-plus) cross/utility vehicles account for more than half Nissan’s volume in the month.
• With the Brazilian market continuing to show growth and the strengthening euro making it tougher to export, both Renault and BMW take steps toward new capacity in that market in October.
Renault reveals it will boost its investment in Brazil by BR500 million ($266 million) to boost annual production capacity by 100,000 vehicles to a total of 380,000. That comes on top of the BR1 billion ($532 million) already planned through 2015.
BMW, which said in March it would like to improve its manufacturing footprint in Latin America, reportedly has its sights set on Sao Paulo as the location for its first assembly plant in the region.
•agrees to guarantee 130,000 permanent employees their jobs through 2016 in exchange for continued flexibility to hire temporary workers in a deal cut in October. The pact extends an agreement between the auto maker and its union that dates back to 2004.