A study by Booz & Co, that calls itself “one of the leading management consultancies in the world,” predicts that India will be the world’s 4th largest car market by 2015 and will surpass the European Nations by 2015. I don’t doubt that India is a very important market with great growth potential. But Booz & Co must have consumed too much of its namesake. Read More >
Most foreign-based automakers see the United States as a market first and a production center second: If sales are good enough, production will follow. Mitsubishi, on the other hand, seems to be taking the opposite approach. The Japanese automaker has announced [via Automotive News [sub]] that it will replace production its weak-selling midsized offerings (Galant, Endeavor, Eclipse) at its Normal, Il factory with one model: the Outlander Sport compact crossover. The Outlander Sport (known elsewhere as RVR and ASX) is Mitsu’s newest vehicle, but the firm still envisions only abput half of Normal’s planned 50k units of production to be sold in North American markets (a safe estimate considering it’s still not outselling the Lancer). The other half will be exported to Russia, Latin America and the Middle East. That’s right, Mitsubishi is keeping its only UAW-represented workforce in order to build compact crossovers for export.
General Motors may have sold its heritage, but Ford has a better idea: sell copies of archived photos, keep the originals, and profit.
Germans bought 211,056 cars in January. It could have been more than twice as many – if automakers would make enough autos. According to a study by PricewaterhouseCoopers, published in the German Newspaper Die Welt, Germans are waiting for 264,000 cars which they had ordered, but which the car companies are unable to deliver. And who do Germans blame? The Automakers?
No, they blame the Americans and Chinese who snap up the cars before the Germans can lay their hands on them. Read More >
While some analysts (who might be sitting on large quantities of GM and Ford stock) already dream of a sales rate between 15 and 16 million cars by year’s end in the U.S., CEOs of European carmakers are less gung ho. Read More >
As any sales-watcher knows, volume isn’t everything. Fleet-retail mixes, incentive spending and transaction prices are all important considerations for putting volume numbers into context. As usual, we’ve assembled Edmunds’ True Cost Of Incentives index as well as TrueCar’s Transaction Pricing and Incentive Spending forecasts, for a complete picture of these important metrics… and after the jump, we’ve added a few notes on the discrepancies between the two firms’ numbers.
Remember Oleg Deripaska? The Russian oligarch that had been under suspicion of money laundering and organized crime activities? The very same Deripaska GM did not want to have close to Opel for fear of losing their precious intellectual property ? Yes, him. GM just handed him the blueprints and the tooling for the Chevy Aveo. Read More >
Most automakers are suspending operations in Egypt while riots continue. Here is a list of current closures: Read More >
Well, the global car business is not as trusted as the technology business, according to Edelman’s 2011 Trust Barometer study, but it’s now doing better than any other industry out there. Yes, really. Cars may have taken some lumps over the last several years, but thanks to improvements in auto industry trust in the US and China, it’s now beating everything from telecom to pharmaceuticals to food. Does the auto business deserve that trust? That’s a question for you to answer…
Ever since it beat back expectations of bankruptcy, Ford’s stock has been on fire, pushing the Blue Oval to the highest market capitalization of the Detroit automakers. Then, on Friday, when Ford announced its best financial results in over a decade, investors mysteriously sent the stock tumbling, pushing GM’s market cap higher than Ford’s for the first time since its government-ordered restructuring. How did that happen? Even with the one-time expenses Ford blamed for its Q4 drop in earnings, analysts expected Ford was expected to earn $2.05 per share… and analysts punished the automaker for making only $1.91 per share before special items and $1.66 after same. Since markets re-opened today, Ford’s market cap has gone on to $55.39b while GM has dropped back down to $54.73b, suggesting that GM’s stock price has been corrected downwards relative to Ford’s disappointing financial performance. Still, despite greater European-market problems, GM’s strong Chinese-market position will keep The General hanging just behind Ford waiting for the upstart automaker to stumble again.
Poor Ray LaHood. Having endured considerable embarrassment over his department’s handling of the Toyota Unintended Acceleration recall, all the Secretary of Transportation seems to want to do is talk about the “epidemic” of distracted driving. But, as TTAC has continually reminded, changing driver behaviors is a notoriously tricky task. The government’s choice: mandate intrusive measures like in-car cell phone blocking or continual surveillance of all vehicles, or go for voluntary “cures” that don’t even begin to address the underlying problem of increased driver distraction. And despite repeatedly referring to distracted driving in epidemiological terms, LaHood seems to prefer the “it’s actually your problem” approach, telling automakers [via AN [sub]]that NHTSA will
issue voluntary standards to handle the dangers of the connected car… in the third quarter of 2011.
Which means that nothing meaningful will ever actually be done about distracted driving. After all, the automakers contend that drivers will use cell phones in cars “no matter what,” and that in-car connectivity systems simply make the inevitable sin less dangerous. Of course, the evidence doesn’t seem to back up that position, as an IIHS survey shows no significant difference in safety after a hands-free cell phone ban. But, because the industry is under intense pressure to deliver profits from new connectivity systems, the logic that more systems will make drivers more likely to unsafely use phones in their cars is simply being ignored. And though the voluntary approach is better than intrusive government-mandated workarounds, is still nowhere close to living up to LaHood’s overblown rhetoric.
How did Chrysler do last year? It all depends on how you slice the numbers, isn’t it? As warned, Chrysler’s Q4 was a bit of a letdown, as net revenues dropped from $11.018b in Q3 to $10.763b, resulting in a $199m Q4 net loss. Interest expenses continue to be a major drag on Chrysler’s performance, costing $329m in Q3 and a whopping $1.228b over the course of the year. Cash dropped by nearly a billion dollars from Q3 to Q4, ending the year at $7.347b (not counting $2.3b in undrawn government facilities). Chrysler nearly hit the 1.6m worldwide sales number touted in its Five Year restructuring plan, as well as the 1.1m US-market target (although fleet mixes appear to have been higher than anticipated). Chrysler also hit its goal of $40b+ in net revenues and exceeded Operating Profit and EBITDA projections, but as the slide from Chrysler’s Q4 financial presentation [PDF here] shows, Both debt (which will likely be restructured this year to reduce costs) and depreciation/amortization have killed Chrysler this year… which is why EBITDA and Modified Operating Profit take the top billing in Chrysler’s financial reporting.
Our not-quite-colleagues at AutoWeek are between a rock and a hard place nowadays. Back in the dinosaur days of the biz, subscribing to AW made sense. The writing was usually auto-weak, and there wasn’t much insight to be found in the reviews, but it was far more timely than the rest of the color rags. If you wanted up-to-date news on the auto shows, the press-preview events, and European rallies, there was only one magazine with the goods.
Needless to say, the Mandel clan’s rather cozy little empire ran into an Outside Context Problem when the World Wide Web arrived on their shores, chock-full of Jalopniks, Autoblogs, and TTACs. I can’t think of any reason to subscribe to AutoWeek, and judging by the increasing desperation with which they are soliciting me as a subscriber, neither can anyone else.
How, then, can Dutch and company keep the lights on at AW headquarters? I dunno… how about renting press cars?
Today, none of the 50,000 workers employed at Volkswagen’s Wolfsburg plant have to punch in at work. The factory is waiting for parts. You may think that is their good or tough luck.
Not so, says Dan Sharkey, a Detroit lawyer who counts many auto suppliers as his clients. The shortages affect us all. Parts shortages are “”beyond a trend; it’s an epidemic,” Sharkey told Automotive News [sub]. These shortages are stopping assembly lines around the world, just when demand is beginning to pick up.
Here is a current snapshot, taken by Automotive News: Read More >
According to data published today by Ford, the company sold 5,313,000 units worldwide “to wholesale” (i.e. out of the door.), up 447,000 units or 9.19 percent. With Volvo eliminated, the growth was 771,000 units. Record sales in the U.S.A. and Asia were partially offset by lower sales in Europe. Ford is not strong enough in China to profit like its competitors that are strong in China. One of these competitors is Hyundai. Read More >
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