Small Car, Small Profits By RICK KRANZ | AUTOMOTIVE NEWS AutoWeek | Updated: 02/14/07, 2:03 pm et CHICAGO - It seems crazy at a time when the dollar is so weak against the euro. Yet General Motors will go ahead with a plan to sell Europe-built Opel Astras as Saturns starting later this year. In the past, GM would have never considered such a thing. The business case would have been unjustifiable for GM Europe, the supplier of the vehicles. Those weak dollars earned in America would not have amounted to much when converted into European currency. But that was GM old think. "In the old days of running the corporation regionally, we probably would not have done the program," said GM Vice Chairman Bob Lutz, at the Chicago Auto Show. Lutz says GM now thinks globally. So GM looked at the plan - rebadging the Opel Astra as a 2008 Saturn Astra - from a global standpoint and approved it. The Astra arrives at Saturn dealers late this year and will be positioned at Saturn's lowest priced car, starting $2,000 to $3,000 above the 2007 Ion, which starts at $13,480, including shipping. Ion production ends in March. "We just had to tell ourselves this (car) avoids a ton of investment," Lutz said. "It gets us a highly competitive car into the Saturn showroom with minimal delays for the easy federalization that we had to do. "The profitability isn't great," he admitted, "but profitability is there, which is a tough trick to do on a small car. The reason it is profitable even at a low margin is because of the investment avoidance." ----- Ford’s best midsizer isn’t sold here—yet By JULIAN RENDELL AutoWeek | Published 02/13/07, 3:08 pm et Ford Taurus and Ford Mondeo are two names rarely written in the same sentence. So it must be an accident of fate that Ford’s most significant sedan nameplates on opposite sides of the Atlantic are being revitalized in the space of a week. While the Taurus was the car that saved Ford Division in the mid 1980s, the sharp-handling Mondeo did the same for struggling Ford Europe a decade later. Ford has provided this preview of its third-generation Mondeo ahead of the car’s public premiere at the Geneva show in March. And though Ford’s position in Europe is much stronger than it was in 1993, the Mondeo still has to make a big impact in keeping with its role as the company’s third best-seller in Europe, behind the Focus and Fiesta. The main challenge for the new Mondeo is to claw back sales in a market segment shrinking as Europeans shift allegiance to upmarket models like the Audi A4, BMW 3 Series and Mercedes-Benz C-Class. As an illustration of this fundamental shift in European tastes, just look at the comparative sales figures: Last year (admittedly the last year of production for the second-gen model), Mondeo sold 142,800 cars in Europe; the 3 Series 287,704. In its heyday in the mid-1990s the Mondeo outsold the 3 Series three to two on average. Acknowledging this new competition, Ford has put a stronger emphasis on design with the new Mondeo, the new model clothed in “kinetic design” body panels, as seen on the Iosis concept, Galaxy minivan and S-Max crossover, Europe’s Car of the Year. Under the skin is an all-new platform, called EU-CD, that’s also the basis for the minivan and crossover, but more significantly shares technology with the Volvo S80/V70 and Land Rover Freelander to cut costs. Bigger, wider and higher than the outgoing Mondeo, Ford’s midsize sedan fights back with a combination of more space allied to a sharp-driving, yet compliant-riding chassis, previously the Mondeo’s main competitive edge. A 2.5-liter 220-hp turbocharged five-cylinder borrowed from Volvo is the performance flagship in a seven-engine range featuring three diesel and four gasoline engines. If the car ever ventured into the U.S., the 2.5-cylinder, along with the 2.3-liter 161-hp four mated to a six-speed auto transaxle, would be the likely choices. At this moment, though, a Mondeo for the U.S. is only a pipe dream. Although new Ford CEO Alan Mulally has made encouraging noises, there are practical difficulties: Meeting U.S. crash and exhaust emission regulations; fitting the Mondeo into the range alongside the similar-sized Fusion/Milan; and making a profit in America on a car built in Europe when the exchange rate makes $1 worth only 0.77 Euros. The smart money is on the next-generation Fusion to merge with the Mondeo program, forming a common platform that can be built and sold worldwide.