2010 Year in Review: Europe

Highlights of the year’s major events in the European auto industry:

Next Smart Fortwo to share platform with Renault Twingo (current version above).

• General Motors sells Saab to Netherlands-based Spyker Cars in February. GM receives $74 million in cash and $326 million in preferred shares. Spyker founder Victor Muller becomes chairman of the Swedish auto maker while Jan Ake Jonsson is named CEO. GM promises near-term access to its technologies. Eight months later, Saab signs a deal to buy engines from BMW. Further discussions surround possible platform-sharing to accommodate production of an entry-level Saab, reports say.

• Daimler ends months of speculation in April by taking 3.1% stakes in Renault and Nissan, while Renault and Nissan each claim 1.55% of Daimler. Announced projects include development of a common platform for the Smart Fortwo and Renault Twingo, and cooperation on light-commercial-vehicle production. The move promises to save each auto maker €2 billion ($2.7 billion) over five years.

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State of Industry: International

• April brings more partnership news as Fiat details its 5-year plan, which reveals U.S.-based Chrysler will supply a bevy of products to Fiat for sale in Europe. The collaboration is critical to Fiat’s goal of achieving €7 billion ($9.4 billion) in annual profits by 2014. “Without Chrysler, Fiat would continue to be marginal player for the rest of its life,” says Sergio Marchionne, CEO of both auto makers.

• Fiat heralds a positive first-quarter earnings swing of €481 million ($665 million) by confirming plans to spin off its industrial operations. John Elkann, great-great grandson of Fiat co-founder Giovanni Agnelli, is installed as chairman of Fiat SpA. He replaces Luca Cordero di Montezemolo, who steps aside but remains chairman of the auto maker’s Ferrari brand.

Plant in Kaluga, Russia, to assemble Mitsubishi Outlander from semi-knocked-down kits.

• In April, the European Union accepts a common standard for hydrogen-powered vehicles, a move expected to enable auto makers to more easily sell such vehicles across the continent. The standard is meant to ensure hydrogen components and systems function correctly and safely throughout their duty cycles.

• Two years of talks end as the European Union joins nine nations, including the U.S. and Japan, endorsing the proposed Anti-Counterfeiting Trade Agreement. Measures contained in the legislation, delivered as the second quarter gets under way, include the criminalization of counterfeiting, which would make individual offenders subject to jail time and fines for their companies’ actions.

• PSA and Mitsubishi mark the end of spring by cutting the ribbon on a new plant in Kaluga, Russia. The plant, which represents a total investment of €470 million ($629 million), is tagged to build the Mitsubishi Outlander and two models each from Peugeot and Citroen from semi-knocked-down kits.

• Opel in June withdraws all requests for state aid in Europe, ending a turbulent 12 months that saw GM hang a for-sale sign on its Germany-based subsidiary, only to later kill a deal with mega-supplier Magna.

Special Report

2010 Year in Review

The move comes after Germany rejects Opel’s request for €1.1 billion ($1.5 billion) in loan guarantees. It also seals the fate of Opel’s assembly plant in Antwerp, Belgium. The closure, expected to cost €400 million ($557 million) in termination benefits for the 2,600 affected workers, is set for year’s end.

• European auto makers agree in June on a common specification to connect electric vehicles to the power grid. The auto manufacturers’ group, the ACEA, also recommends a transition period allowing consumers to use various plugs already on the market. A uniform plug will become standard for all new vehicles by 2017.

• China-based Geely acquires Sweden’s Volvo Cars in August in a $1.5 billion deal with Ford. Stefan Jacoby leaves his post as Volkswagen of America president to become Volvo’s CEO.

Stephen Odell, Volvo’s boss under the Ford regime, becomes group vice president and chairman and CEO of Ford Europe.

• Chevrolet Spark production begins in August at GM Uzbekistan.

• Russian Prime Minister Vladimir Putin says in August his country will “gradually” increase import duties on foreign cars to encourage investment in domestic manufacturing plants and boost Russia’s industry. In the previous 18 months, Russia’s import duties increased 5% to 25%.

• A controversial free-trade agreement between the European Union and South Korea receives conditional approval in September, triggering vigorous objections from auto makers who fear dumping.

Says Fiat CEO Sergio Marchionne: “We, in effect, are throwing the doors open to a competitor that is not giving us the same opportunity to compete on its home turf.”

• Ford and PSA announce in September the extension of a decade-long deal that has produced more than 6.5 million diesel engines for the European market. Price tag: €300 million ($408 million). The new engines are scheduled for production in 2013.

• Hyundai reveals serial production at its new assembly site in St. Petersburg, Russia, will begin in four months, January 2011.

• Magna co-CEO Siegfried Wolf bolts to become chairman of Russian auto maker GAZ.

• Matthias Mueller, product strategy chief at Volkswagen Group, literally takes the helm at Porsche.

Outgoing Porsche CEO Michael Macht hands Mueller a steering wheel during a light-hearted ceremony at the Paris auto show. Macht is named to oversee VW’s manufacturing operations.

• Volkswagen Group’s global sales hit 5 million through September, its highest total for the first nine months of any year.