Nissan made quite a stir in EV-watcher circles by announcing that its UK-produced Leaf battery packs would cost under $400/kWh, but as we noted at the time, those numbers are being supported by various government incentives. Now, with a new government taking over number 10 Downing Street, Nissan’s UK Leaf production incentive might be on its way out. With the UK’s new Conservative-led government facing profound budget challenges (try a $240b deficit on for size), The Telegraph reports that a $30.5m grant approved by the outgoing government could fall victim to an overarching review of new expenditures by the incoming government. And that’s just the beginning…
As non-executive vice-chairman of the Swiss bank UBS, Chrysler CEO Sergio Marchionne has deep connections with the European banking community. Now, under threat of losing its primary lender Ally Financial to GM’s dreams of a return to in-house, subprime lending, Marchionne has leveraged that experience into a non-prime lending deal with a US division of Spain’s Banco Santander. Automotive News [sub] reports that Santander and Chrysler have reached a deal to provide loans to Chrysler customers with sub-650 credit scores that ChryCo reckons could result in an additional 2,000 sales each month. (Read More…)
GM’s OnStar division is preparing for a big push into new info-tainment and connectivity services, and it’s launching the effort at Google’s I/O conference starting tomorrow. First up is a new Google-maps-based navigation feature for Android phones running the Chevy Volt mobile app, featured in the video above [presser here]. Though this new navigation system won’t be available at launch, but will emerge in a 2.0 version of the Volt mobile app, it hints at a new direction for OnStar, which traditionally markets itself as a safety feature. A senior (anonymous, sorry) source at GM took a moment to explain where this is all heading…. (Read More…)
Honda’s decision to delay a redesign of its Civic piqued some curiosity amongst our Best & Brightest, particularly Mark MacInnis who requested a five-year sales chart on the Civic and a few competitors. We’ve gone one better and worked up a 15-year graph of sales volume for some of the more popular compact sedans in the US. Of course a significant number of those pre-2001 Civics were hatchbacks, and Toyota counts its Matrix hatch as a Corolla, so the numbers are just a little skewed. Still, it gives a fairly good sense of where the major players stand in this important segment.
Sadly, my internet came crashing around my ears just as GM’s Q1 results conference call was getting interesting. Typical Monday. I’ll rock myself to sleep tonight with a recording of the call and report back tomorrow, but at this point the big news is plainly visible on this single slide. Yes, GM finally got control of its incentives and wrestled them below the industry average… for a month. That month (March) also just happened to be the worst month this year for GM market-share wise. The next month (April), the incentives went back over the industry average, and market share increased once again. The lesson seems obvious: GM won’t gain market share on promises of high-quality cars and taxpayer payback alone.
Honda hasn’t always replaced its bread-and-butter compact, the Civic, every five years. The Mk.1 Civic soldiered from 1972 until 1979. The second through fifth generations were replaced on a regular four-year schedule, before Honda settled into a five-year product cadence with the sixth generation (1996-2000). If it were to keep with that cadence, we’d be seeing a ninth-generation Civic sometime this year, replacing the Mk.VIII, which debuted in late 2005. According to Automotive News [sub], however, Honda is holding off on releasing a new Civic until 2011. What gives?
What, you want more context from a headline? It’s not like we’ve lied to you or anything. Technically, every word of it is true. OK, OK, here’s the fine print: CGI Holding, owners of “Old Chrysler” and Chrysler Financial paid $1.9b of a $4b pre-bankruptcy TARP loan, according to Automotive News [sub]. Though far less than face value, that payback “is significantly more” than what Treasury was expecting in return. In other words, this is great news if you thought the bailout would be a complete loss. Otherwise, it means that the various remains of Chrysler have repaid $3.9b of the $14.3 invested by taxpayers into the company pre-bankruptcy… and unless Chrysler’s IPO brings in about $100b, Treasury will still take a bath on the rescue.
When we first heard that GM was eying a return to in-house financing, our first reaction was to worry that
the potential for falling back into old bad habits can’t be ignored.
Clearly our concern wasn’t wasted, as the AP [via Google] reports that The General’s major motivation for considering re-creating a captive lender is to chase subprime business its current major lender won’t touch. And considering that that lender is GM’s bailed-out former captive finance lender GMAC (now Ally Financial), which was badly burned by subprime mortgages, it’s not surprising that GM is frustrated by GMAC’s tentative approach. But should The General charge into the low-standard lending sectors where Ally fears to tread?
TTAC Headquarters is experiencing a tiny internet outage thanks to our good friends at the cable company, so our content cadence will be a bit off today. We’ll be back with Monday’s news, review and analysis as soon as the local outage is fixed (I’m assured that top men are on the case), but in the meantime we’d like to take this moment to solicit your burning technical and car-buying advice questions. Struggling to identify that smell/sound coming out of your family truckster? TTAC’s in-house advice guru, Sajeev Mehta is standing by to answer your car-related technical questions in his Piston Slap column. And if the problem’s too big for even Sajeev to solve, he and Steve Lang will get your search for its replacement started right, with their car-buying advice column New Or Used?Begin your voyage of automotive discovery with an email describing your technical problem or car buying conundrum to mehta@ttac.com
Automotive News [sub] highlights a new trend in the car sales game: the luxury dealership destination. This picture was taken at Lexus of North Miami, which its owner describes thusly:
The new state-of-the-art dealership not only provides the ultimate in automotive service but also provides unrivaled personalized service, catering to all of your needs with luxury amenities via the Club Lexus Lifestyle and Fitness Center. The innovative, resort-like center is designed to accommodate and enhance your everyday lifestyle by allowing access to the finest facilities for consultation and first class amenities.
Ford’s Fiesta subcompact has earned a top EPA rating of 40 mpg on the highway, and 29 mpg in the city, reports Automotive News [sub]. Those numbers are for Fiestas equipped with an optional six-speed autobox; manual transmission models get a 37/28 mpg rating. By comparison, auto-equipped versions of competitors like the Honda Fit (35/28) and Toyota Yaris (35/29) come up short on highway mileage in particular. But this isn’t the first time Ford has claimed 40+ mpg for one of its cars: the Fusion hybrid carries an EPA city rating of 41 mpg, despite coming up short of its government-endorsed rating in several real-world tests (although not as shockingly as Chevy’s Equinox, for example). But the EPA testing regime is hardly perfect anyway, so let’s just wait and see what the test drives yield before we start stringing up the piñata.
Whereas Chrysler’s surprise operating profit in the first quarter of this year was achieved mainly through cost-cutting, GM’s just-announced Q1 profit comes on the strength of sales increases in most of its global markets. Though The General’s sales numbers are still lower than they need to be, momentum is headed in the right direction… albeit somewhat more slowly than had been hoped.
Well, the suspense is over. General Motors announced its Q1 earnings this morning, and for the first time since 2007 the quarterly numbers are positive. GM’s net revenue jumped to nearly $31.5b on strong performances from its North American and GM International Operations (GMIO), and across-the-board sales improvement for the Chevy brand. General Motors Europe was The General’s sole unprofitable division for the quarter, losing half a billion dollars while it waits for a deal on financial assistance to clear. Operating cash flow was $1.75b, with about $755m of that going towards capital expenditures. That left just under a billion dollars in free cash flow, as GM finished the quarter with $35.7b in cash on hand. Net income attributable to shareholders was $1.068b, less $203m for cumulative dividends, for a total net profit of $865m [Full financial highlights in .doc format available here].
So much for seeing a Hyundai-branded Ram anytime soon. The company has clarified in a statement [via Reuters] that:
Hyundai Motor Co. denies that there are any current plans to bring a pickup truck of any type into the U.S. now or in the foreseeable future. Hyundai is not in discussion with Chrysler in regard to a selling a rebadged Chrysler Corp pickup truck, or any other vehicle, in the U.S
Which means that Ram will have to overcome a 20-25 percent sales slump over the last year on its own. And Hyundai will have to stick with cars, where it’s killing the competition anyway. Unless it hooks up with the other former Ram-rebadge-wannabe, Nissan. The Japanese brand is reportedly developing both full-size and compact pickups despite having had minimal success moving pickups in volume… a partnership there might benefit both.
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