+++ AUDI may reach its goal of selling 1.5 million cars a year earlier than planned because of demand from China, Germany and the United States. The Volkswagen Group premium brand had expected to reach its target in 2015. "The way things look at the moment, we may be able to reach this target earlier", CEO Rupert Stadler told Audi's annual shareholder meeting in Ingolstadt, Germany, on Thursday. Audi is vying with Mercedes-Benz, which it surpassed last year, to grab the luxury-sales lead from BMW by the end of the decade. Audi boosted four-month deliveries 12 percent to 471,300. BMW sales rose 10 percent to 478,030, while the Mercedes brand's volume increased 10 percent to 418,246. Audi may match last year's record operating profit of 5.35 billion euros this year if economies don't slump, Chief Financial Officer Axel Strotbek said in a separate speech on Thursday, reiterating comments made previously. Audi's operating profit in the first quarter climbed 27 percent to a record 1.4 billion euros. Stadler said Audi is targeting double-digit growth in auto sales in China and the United States this year and expects European deliveries to at least match year-ago levels despite slowing economic growth in the home region. Audi intends to grow faster than the overall auto industry by introducing 18 new or refreshed models this year, including a new-generation A3 and a hybrid version of the A6. In April, Audi announced plans to open its first North American plant in Mexico, which will begin production of the Q5 in 2016. The plant is crucial to Audi's aggressive expansion plans in the United States and worldwide. Last year, Audi sold 1.3 million vehicles. BMW brand sold 1.38 million while Mercedes sold 1.26 million. +++ Sales of FERRARI, the high-end Italian sports car, rose more than 13 percent to 556.1 million euro in the first quarter of this year, helped by strong sales in the US, Britain and Germany, which offset a 34 percent fall in crisis-hit Italy. Italians spooked by rising car taxes and highly publicised tax fraud spot checks cut back their purchases of high-end sports car brands Ferrari and Maserati in the first quarter of 2012, an industry body said last month. However, in the US, Ferrari's biggest market, the company's sales increased by 16 percent compared with the same period last year. In Britain the company recorded a 31 percent increase in sales in the first three months of the year, with 177 cars delivered in the same quarter the country entered a double-dip recession. Sales rose 24 percent in Germany. Ferrari, which is owned by Italy's biggest carmaker Fiat , reported on Thursday that first-quarter net profit rose 17.2 percent to 42.1 million euro. "After an extraordinary 2011, starting the year with all the economic indicators on the rise is very satisfying indeed", Ferrari Chairman Luca di Montezemolo said in a statement. Ferrari now has 50 stores in the world, including its newest outpost in Madrid, which is due to officially open at the end of the month. +++ LOTUS ’s new owner “is not thinking about a sale” according to sources close to the Norfolk sports car maker. The managing director of Proton’s new owner, DRB-HICOM, Dato’ Sri Haji Mohd Khamil Bin Jamil, made the comment last week during a visit to Lotus’s Hethel HQ, near Norwich, intended to reassure management and staff. Dato’ Jamil said he could “never say never” about a sale, but insisted that selling was not DRB-HICOM’s priority. He said his management would “take time” to understand the Hethel business, but would support it financially in the meantime. Formulating a plan for Lotus could take months, he said, because the situation was complex and a careful decision was needed. Malaysian-based car-maker Proton, formerly owned by interests close to the Malaysian government, acquired Lotus in 1996 and always insisted that Lotus was one of its key assets. But Proton was itself sold to automotive giant DRB-HICOM three months ago. The deal introduced uncertainties at Lotus, especially when a spokesman said DRB was “willing to talk” about selling Hethel. Matters were complicated by 60 days of financial stringency (required under Malaysian corporate law) which starved Lotus of cash at a critical stage of its ambitious expansion programme. Car production has now resumed following the 60-day financial hiatus, and development continues on the existing models, Elise, Exige and Evora. Lotus expects to present several new derivatives of these at its celebrations at the Goodwood Festival at the end of June. The company is also continuing to develop its new Esprit supercar, due next year. But whether and when work will resume on the other new models proposed in MD Dany Bahar’s original 5-year plan remain open questions. While partly reassured by Dato’ Jamil’s statement, Lotus-watchers believe the company continues in a kind of limbo, damaging to business, which will only be truly resolved when the DRB-HICOM reaches its long-term decision. +++ General Motors is planning a far more radical shake up of its European operations than previously expected, according to a report published today by Germany’s Der Spiegel magazine. Quoting informed sources at OPEL, Der Spiegel says senior General Motors managers in North America have reached a decision to shift production of the Astra from Opel’s main Rüsselsheim plant in Germany to both its Polish-based Gelwice factory and Vauxhall’s Ellesmere Port operations in the UK. The report has angered Opel worker’s union representatives who suggest production of the Astra costs 220 euro more at Ellesmere Port than in Russelsheim. The loss of the Astra would leave Rüsselsheim with the production of just one model, the Insignia. Job cuts of up to 200 are mooted for Opel’s development centre in Rüsselsheim. More significant is the news that General Motors is close to announcing the closure of Opel’s Bochum plant, which currently produces the Zafira and Astra. Der Spiegel has also reported that General Motors is studying a plan that would see the next generation Zafira be conceived and developed by PSA (Peugeot, Citroen), with which it holds a 7 percent shareholding. +++ Demand for PREMIUM cars in the UK is boosting sales for car dealers despite the economic uncertainty. On Thursday Inchcape reported a 4.9 percent increase in like-for-like sales for the first quarter of 2012 in the UK, while Lookers reported a 6 percent rise in new car sales. Inchcape is the biggest listed car dealer in the UK and has 117 retail centres in the country as well as dealerships in 25 other countries. Andre Lacroix, chief executive, said the UK performance was "strong", adding: "We have had a good start to the year. The demand for premium and luxury vehicles was ahead of expectations in the UK, which included the important month of March, and in the Russia and emerging markets segment". Premium car makers such as Jaguar Land Rover and BMW are enjoying record sales around the world, with new models such as the Range Rover Evoque proving popular in Europe as well as the Far East. UK car sales have been rising throughout 2012, according to industry data, as consumer confidence has returned after a challenging 2011 and financing costs for new vehicles remains relatively low. For April, new car sales rose 3.3 percent, the biggest increase in 8 months. Mr Lacroix said Inchcape's global like-for-like sales rose 1.4 percent in the 3 months to March 31. For the rest of the year he warned of "challenging trading" in Europe but said Inchcape should benefit from "solid growth" for luxury vehicles. +++ TESLA reported a first-quarter net loss of $89.9 million, worse than its $48.9 million loss last year, as the cost of bringing the Model S electric sedan to market mounted. The electric vehicle maker raised its 2012 revenue target by $10 million because it expects to deliver the new Model S earlier than planned. Tesla has described 2012 as a "year of two halves" with the Model S launch as the dividing line. 90 percent of the company's revenue this year will come from the sedan. Tesla expects full-year revenue of between $560 million and $600 million. Earlier, it expected at least $550 million in revenue. Tesla CEO Elon Musk said he is confident Tesla will generate a 25 percent gross margin in 2013 as revenue from Model S sales pour in. Musk also expects economies of scale to result in declining costs per kilowatt-hour for the battery pack. "Scaling up by a factor of 10 should result in a drop in costs by half", Musk said Wednesday in a conference call with analysts. First quarter revenue was $30.2 million, down from $49 million last year, reflecting the end of Roadster sales in North America. Despite the long wait to receive a reserved car, Tesla is "not seeing any significant falloff from people … who are not sure they want the car. We have an extremely high rate of people wanting to put down the remainder of the money", Musk said. Despite some reports of multiple orders from consumers looking to "flip" the vehicles, Musk said those numbers are "infinitesimally small". Tesla reported 416,000 walk-in visitors to its six "new design" dealerships during the first quarter, despite having, "no advertising and no test drives", Musk said. "No Model S in the store adds to the sales challenge. We will see acceleration of reservations once people have a car they can actually (test) drive", Musk said. Added Deepak Ahuja, Tesla chief financial officer: "We are very efficient in our selling compared to the traditional dealership model". Although Tesla hopes to begin deliveries in June, the Model S still has no NHTSA crash safety rating. Once Tesla finishes crash tests required by U.S. safety regulators, Tesla can begin delivering the sedan. However, Musk said that NHTSA cannot test a car until it acquires one from Tesla, and he did not know when that will happen. "I do not know where we are in the NHTSA testing queue. We are very confident that it will be a five-star safety rating, the safest car on the road. We have certain architectural advantages, like a much longer crumple zone in the front because we don't have to make room for an engine", Musk said. Another manufacturing snarl: Some stamping dies are still to be delivered. That means some early-delivery vehicles will be assembled using prototype tooling. But Musk is confident that all tooling will arrive in time for larger-scale production. "We plan to continue making customer deliveries on a slow, methodical ramp, and remain confident in our target of 5,000 vehicle deliveries by year end", he said, adding he expects the Fremont plant to be building cars at a 20,000-unit-per-year run rate at year's end. +++ Akio Toyoda, the chief executive of TOYOTA, says he is hoping for a "calm year" and cited Charlie Chaplin to describe his hopes for the Japanese car maker as it posted a sharp fall in profits. Toyota's net profits fell 30 percent to 283.6 billion yen (2.6 billion euro) in the year to March 31 after manufacturing was disrupted by the Japanese earthquake and floods in Thailand, and the company's performance was hampered by the yen's strength. The fall in profits follows a difficult 2009 and 2010 for Toyota, when the company was forced to recall 10 million cars because of brake and accelerator problems and faced intense scrutiny in the US. The problems that have befallen the company have allowed General Motors to reclaim its position as the world's biggest car maker. However, Mr Toyoda, the chief executive and grandson of the company's founder, said: "In recent years we have suffered periods of hardship. This year, I am determined to show tangible results of all our internal efforts in order to reward our stakeholders who supported us during these difficult times". He said he expects to unveil "significant changes" to some Toyota models this year, adding: "Charlie Chaplin, the greatest comedian, was said to reply 'the next one' when asked which of his films he thought was the best. I find his mindset similar to Toyota's 'Kaizen' mentality, to always strive to create something better. Please do look forward to the 'next one' from Toyota and Lexus". The company delivered a boost to investors by reporting its fourth-quarter profits more than quadrupled to 121 billion yen. This growth was primarily because of the earthquake in Japan last March, which sparked weeks of lost production because of damage to factories and suppliers. Toyota expects the recovery in profits to continue throughout the year, forecasting sales will increase from 7.4 million vehicles to 8.7 million in the year to March 2013 and that net income will grow to 760 billion yen. +++