Ford’s Q2 results [Presentation in PDF here] were mixed, as deliveries and revenue improved (7% and 13% respectively, compared to Q2 2010) but profitability slipped, but the automaker still ended the quarter with $2.4b in profit and $2.3b in operating cash flow. Debt was reduced by $2.6 from the first quarter of this year, and total Automotive debt landed at $14b, while gross Automotive cash landed at $22b. So, what happened to Ford’s operating profit margin?
Despite a $370m loss, Chrysler’s Q2 and first-half results [presentation in PDF here] were presented in a relatively upbeat tone, as a number of key metrics showed signs of improving. Chrysler’s revenue was up by over $3b in the second quarter compared to last year, EBITDA hit $1.3b, and “modified operating profit” was $507m, or about 3.7% of net revenues. Depreciation and Amortization costs were up slightly, as were income tax and net interest expenses, but the big loss that pushed Chrysler into the red was a $551m one-time charge associated with Chrysler’s payback of government bailout loans. Gross debt was up by about a billion dollars, to $12.287b, but net debt was down by over a billion to $2.1b, and Chrysler sees greatly reduced interest costs going forward, eliminating $2.6b in planned debt payments this year. And though free cash flow slowed considerably compared to Q2 2010 ($174m compared to $491m), Chrysler finished the half with $10.2b, up from $9.9b at the end of the first quarter.
Over the weekend Bertel reported on some depressing economic news, noting
Suddenly, automakers aren’t so sure anymore about all that pent-up demand that will bring back U.S. car sales back to their old glory… The big recovery has been postponed for a year or more.
But how much pent-up demand is there, really? According to Edmunds’ analysis of 12 Factors To Watch In The Industry’s Second Half, only about half of the sales lost between 2008 and 2010 were not lost forever to used cars, the inability to get credit and the “new austerity.” As a result, they calculate about 4.3m units of demand is “pent up.” But there’s a question of how accurate that estimate is, and beyond that there’s another question: what happens once the pent-up demand has been blown through?
14 millions Americans are out of work. The government is facing default. U.S. home prices are at their lowest level since 2003, and Robert Shiller, the economist who co- founded the S&P/Case-Shiller index of U.S. home prices, said a decline in property values up to 25 percent in the next five years “wouldn’t surprise me at all.” From Bernanke on down, everybody is scaling back the rhetoric that economic growth is just around the corner. Suddenly, automakers aren’t so sure anymore about all that pent-up demand that will bring back U.S. car sales back to their old glory. Reuters asked around and didn’t come back with good news. (Read More…)
Porsche and Volkswagen are the typical German couple: Not married, with children. Formally, the two want to say “Ja” once the pending lawsuits are taken care of. In the meantime, the couple cohabitates happily. CEO Matthias Müller is made from Audi-DNA. He is a confidant of Martin Winterkorn, who is Piech’s man. Müller runs Porsche like a full-fledged Volkswagen division, down to doing his share to fulfilling Winterkorn’s grand “Strategie 2018,” the plan for world domination by Volkswagen. Under Müller, Porsche doesn’t chase Nordschleife lap times. Porsche chases volume. (Read More…)
The internet has been a boon for car buyers in a million ways, but for new car marketers it’s been a decidedly mixed bag. GM’s California-only experiment selling new cars over eBay was quickly abandoned, after generating more embarrassment than sales. Now, another high-ish profile online new car marketing gag has flopped, as Autoweek reports that Groupon’s car debut is going nowhere:
Only four consumers agreed to pay $200 for a $500 discount voucher on a new-vehicle purchase at LaFontaine Buick-GMC-Cadillac in Highland, Mich. Groupon and LaFontaine had set 10 as the minimum required for the vouchers to be issued.
For companies like Tesla, who hope to do without traditional franchised dealers altogether (Chrysler may harbor similar desires), the internet is next great frontier in new car sales… but the eBay and Groupon failures are troubling signs for that dream.
The word “truth” in our title has long been a cudgel for our critics, who, finding fault with our analysis, condemn us for failing to publish their version of the truth. But, as I’ve steadfastly maintained since taking up TTAC’s editorial reins, we do not hold ourselves up as the sole source of truth. Rather, by provoking an engaging discussion, we hope that our readers will use our posts as a jumping-off point to debate the issue at hand with vigor. The truth, as I find myself saying again and again, is a journey, not a destination.
Accordingly, I’m always thrilled when manufacturers read our pieces and offer up their own counterpoint to the discussion, broadening our understanding of the issue at hand and moving the conversation forward. One of my posts from yesterday, which examined GM’s decision to invest in full-sized truck production in the midst of CAFE negotiations and an inventory backlog, has drawn just such a thoughtful response from GM’s Tom Wilkinson, which is published after the jump. It provides some inside perspective on GM’s decision to move forward with the next generation of full-sized pickups, and is a great example of the kind of conversations that TTAC hopes to start every day.
(Read More…)
[UPDATE: GM responds to this piece here]
With environmentalist groups on the warpath over forthcoming 2017-2025 CAFE standards, trucks sitting on lots, and the Flint HD Pickup plant idled for much of the month, this is probably not exactly the moment GM might have chosen to put $328m into tooling for new full-sized pickups to be built at Flint. But time and the market wait for no company, and because the Silverado is GM’s single best-selling product, the investment isn’t tough to justify:
“Truck sales play an important role in the success of General Motors,” said Joe Ashton, UAW-GM Vice President. “We are confident that the next-generation of trucks will continue to be an important source of revenue for the company and jobs for our members
In case there’s any confusion though, GM is making perfectly sure nobody thinks they’re making any product choices because of union demands. At the investment announcement ceremony at Flint, Cathy Clegg, GM vice president of labor relations told Reuters [via Automotive News [sub]]
We certainly aren’t going to make a decision and make a commitment solely as a way of getting an agreement. If the market doesn’t drive it, we can’t do that
So, how is that truck market?
Toyota may not be making pure EVs widely available next year as some outlets are reporting, but it will start offering a different kind of plug-in car in 2012. We’ve already heard about Toyota’s experiments with a bi-directional charger that could serve as a backup power source for your home in an emergency, but Toyota is taking the car-as-powerplant theme a bit farther next year, as Automotive News [sub] reports
Next year, Toyota Motor Corp. will start offering AC electric outlets as an option on its popular Prius hybrid so drivers can plug in household appliances — from computers to refrigerators.
The idea was born from watching victims of Japan’s March 11 earthquake using the Toyota Estima hybrid van as a source of emergency electricity when the power was knocked out.
It is the only Toyota model currently offering a standard AC outlet.
But Toyota wants to add them to the Prius next year and eventually across the hybrid lineup. One hitch: It will be offered only in Japan initially. Concerns about different voltages and safety regulations are keeping the technology off export models at least at the start.
Toyota may be only offering the system in Japan at first, but this step offers a fascinating insight: clearly Toyota believes consumers would rather take electricity out of their cars than put it back in. It’s a new interpretation of the plug-in concept and one that, as a blogger who’s always looking for on-the-go laptop power, I can certainly appreciate.
UPDATE: Toyota confirms:
Recent reports have incorrectly stated that the 2012 RAV4 EV will only be marketed to fleet and car sharing programs. We’d like to set the record straight. The 2012 RAV4 EV will definitely be sold to the general public. We anticipate robust public interest in the RAV4 EV and are keen to inform consumers that their future vehicle options include a battery electric Toyota.
Toyota is the only manufacturer bringing two battery electric vehicles to the market in 2012 – the RAV4 EV and the Scion iQ EV. While the RAV4 EV will be available to the public, the Scion iQ EV will be marketed to fleet and car sharing programs only.
A number of major auto outlets got clowned yesterday when a Pike Research blog item seemed to quote Toyota Business Planning Manager of Advanced Vehicle Marketing Geri Yoza as saying the Tesla-developed RAV4 EV would not be sold to private customers, but would distributed to fleets and car sharing services. Not so, it turns out, as Toyota has corrected the Yoza quote by confirming that only the electric version of the iQ city car will definitely not be offered for public sale. But by the time Pike Research got its facts straight, the misinformation had ben regurgitated by the biggest names in car blogging, and had even made its way over to the other side of the Atlantic. The worst part: the real issue brought up in the Pike Research piece was largely lost in the autoblogosphere’s rush to prove Mark Twain’s adage that “a lie can travel halfway around the world while the truth is putting on its shoes.” And, as usual, the slow-dressing truth is a lot more interesting than the globe-trotting lie…
European car sales statistics are a little bit like financial news from The Old Country: Up one day, down the next. This is one of those next days. In June, new passenger car registrations dropped by 8.1 percent in the EU to 1,233,298 units. Over the first six months of 2011, a total of 7,120,499 new cars was registered, or 2.1 percent less than in the first half of last year. This according to data provided by the European Manufacturers organization ACEA. (Read More…)
A year ago I put together a chart comparing the first-half performance of America’s “big six” most popular midsized sedans. Then, the graph seemed to show promising growth and a tightening segment. Now we seem to be looking at an up-and-down but ultimately more stagnant market… and a segment that is still battling it out in some of the closest competition in recent memory. But this chart alone doesn’t tell the whole story… hit the jump for the same chart, only with sales plotted cumulatively by month.
Timing isn’t everything, but it is pretty damn important when buying high dollar assets.
Back in April 2009 I told folks that now would be an ideal time to buy a new car. Demand had slacked off over 40% from the record highs. Dead and dying brands were still in the glut of recessionary despair. The credit markets, the only financial source for a lot of car buyers, were a shadow of their former selves. Plus Uncle Sam was all too willing to subsidize the gluttons amongst us with Cash for Clunkers in about a month or two. It was the perfect storm for those of us who needed cheap new wheels for the long run. But today…
The US car market contracted by 23 percent between the 2006 and 2010 model-years according to WardsAuto data [via the Detroit News], but over the same period the total number of hatchbacks sold per year has increased some 63%, from 291,853 to 475,048. That’s right hatchback fans, after decades of underachievement in the US market, your favorite bodystyle is back in a big way.
Our patent-pending China sales oracle has spoken, and it says. The only bubbles in China are in the heads of some self-styled experts.
Looking at the June and half year results of GM China, one can only conclude that all is well in the Middle Kingdom. What’s good for GM China is good for America: China is GM’s largest market. GM’s sales in China are up 9.9 percent in June and 5.3 percent for the half year. But there is a much more important lesson: (Read More…)
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