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Tesla Gains New Ally in Fight to Sell Its Vehicles

FTC directors suggest maker should be able sell direct to buyers.

by on Apr.24, 2014

Tesla CEO Elon Musk has been working to change franchise laws to allow Tesla to sell its vehicles directly to the customer.

Tesla’s long-standing fight with dealers to sell its cars at it’s own retail locations just got some support from an unexpected source: the Federal Trade Commission.

Three FTC directors in a blog on the commission’s webpage said the laws preventing new vehicles from being sold outside of the dealer franchise system were antiquated. Such laws are currently in place in Arizona, Maryland, New Jersey, Texas and Virginia.

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“We believe this is bad policy for a number of reasons,” the trio of Andrew Gavil, director of the FTC’s Office of Policy Planning; Deborah Feinstein, director of the Bureau of Competition; and Martin Gaynor, director of the Bureau of Economics, wrote in the blog. Read the rest of this entry »

SEC Launches GM Probe

GM facing expanding list of lawsuits, investigations over handling of defective ignition switch recall.

by on Apr.24, 2014

A replacement GM ignition switch. The maker has notified 1.4 million owners to start scheduling repairs.

The U.S. Securities and Exchange Commission is the latest government agency to be probing the way General Motors handled the recall of 2.6 million vehicles due to an ignition switch defect linked to the deaths of at least 13 people.

The SEC probe came to light through the automaker’s quarterly SEC filing accompanying its annual earnings report. Neither GM nor the SEC would subsequently comment on the investigation.

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The SEC investigation comes on top of separate probes by the U.S. Justice Department, the National Highway Traffic Safety Administration, and committees of both houses of Congress. General Motors is conducting its own internal probe, meanwhile, spearheaded by the former U.S. Attorney who oversaw the government’s scrutiny of the collapse of financial firm Lehman Brothers.

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GM CEO Barra Makes “Time 100” List of World’s Most Influential People

“A trying first 100 days.”

by on Apr.24, 2014

A portrait of GM CEO Mary Barra from Time.

It was “a trying first 100 days” for General Motors CEO Mary Barra, writes one influential automotive analyst, but perhaps it’s paying off. The daughter of a GM “shop rat” who worked her way up to the top from a starting job as a co-op student has been named to the annual “Time 100” list of the world’s most influential people.

The first woman to run a major automaker, Barra was appointed to her post late last year following the unexpectedly early retirement of her predecessor, Dan Akerson.  The appointment generated a wave of positive headlines, even a tweet from the likes of celebrity singer Bette Midler.


But while Barra got off to a seemingly strong start – two GM models sweeping the North American Car and Truck of the Year awards in early January – she was quickly caught up in one of the worst scandals GM has suffered in years, the inexplicably delayed recall of 2.6 million vehicles equipped with faulty ignition switches.

Yet, unlike some top executives who try to stay out of the spotlight, Barra quickly put herself directly under it, repeatedly apologizing for GM’s mistakes and making it clear the buck stopped at her desk on the top floor of the maker’s Renaissance Center headquarters along the Detroit River.

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New Boss Aims to Transform Acura into Luxury Leader

New products, new technologies needed to get "butts in seats."

by on Apr.24, 2014

Mike Accavitti with a prototype Acura TLX.

Considering the cost of bringing a car to market, every new vehicle is important, but few more so than the 2014 Acura TLX making its first public appearance at the New York Auto Show this week.

Acura has scored a pair of solid hits with its two SUV models, the RDX and bigger MDX, but as the third sedan in the Acura line-up, the TLX is meant to fill a critical gap between the Japanese maker’s entry-level ILX and its recently added flagship, the RLX.  It’s no easy challenge, going up against a range of major competitors such as the Mercedes-Benz E-Class, BMW 5-Series and Lexus GS lines.

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The TLX is “critically important,” suggests Mike Accavitti, the long-time Chrysler executive who was recently named head of the Acura division. “We have to start somewhere,” he adds.”

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Hammered by Recalls, GM in the Black – Just Barely

Maker suffers 85% drop in January - March earnings.

by on Apr.24, 2014

GM managed to keep itself in the black for the first quarter, after covering hefty recall-related expenses.

After writing down more than $1.3 billion to cover the cost of a burst of embarrassing recalls, General Motors saw its earnings for the first quarter of 2014 fall by more than 85%, it reported today, though it was still able to squeak out a modest profit.

The $125 million net earnings, at 6 cents per share, came in under the 9 cents consensus among top industry analysts. Some were even more bearish, Brian Johnson, of Barclays Plc, forecasting a one cent loss for the January to March quarter. But the crisis that began with the recall of 800,000 vehicles due to a faulty ignition switch in mid-February – and which ultimately saw GM call back nearly 7 million vehicles by the end of March – is likely to take its toll for some time to come.

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“The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market,” said GM CEO Mary Barra, in a statement aimed at putting a positive spin on the results. “Our focus remains on creating the world’s best vehicles with the highest levels of safety, quality and customer service, while aggressively addressing our business opportunities and challenges globally.”

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Baojun Scoring Major Gains for GM in China

by on Apr.24, 2014

Introduced at this years Beijing Auto Show, the Baojun 610 is the brand's newest model.

A new brand General Motors launched only three years ago is poised to double its sales this year as GM continues to move ahead with its rapid expansion in China.

Baojun, the brand that belongs to the Shanghai-GM-Wuling joint venture sold 100,000 cars last year and sales are expect to climb to 200,000 units for all of 2014, according to Ray Biezrynski, executive vice president of SGM-W, one of the cornerstones of GM’s ongoing expansion in what is now the world’s largest automotive market.

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The growth of the Baojun brand could be particularly critical considering GM last year slipped behind long-time rival Volkswagen AG, now the Chinese market sales leader. But the impact isn’t limited to China.  The booming Asian nation now accounts for more than one third of GM’s global sales. Read the rest of this entry »

Karma Making a Comeback

Fisker’s stunning plug-in hybrid may return in 2015.

by on Apr.23, 2014

The Karma plug-in hybrid is taking a second run in the U.S. starting sometime in 2015.

Karma is back! The Fisker Karma, that is.

Fisker Automotive’s electric vehicle boasted cutting edge design, but couldn’t overcome production and quality issues that sucked up millions of dollars and led to its demise. Enter Chinese auto supplier Wanxiang, which bought the company out of bankruptcy a few months ago and is looking to resurrect the plug-in hybrid similar to the Chevy Volt by the middle of next year.

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According to Fisker’s interim president, Tim Brown, the Karma will back next year with two siblings not far behind: the Surf, a $100,000 station wagon-like version of the Karma and the Atlantic, a smaller sedan that was originally stated to be the follow up to the Karma at about $50,000. Read the rest of this entry »

Both GM, Ford Expected to See Sharp Drop in Q1 Earnings

GM likely to take major hit as it pays for nearly 7 million recalls.

by on Apr.23, 2014

GM CEO Mary Barra will see a sharp decline in earnings for her first full quarter as CEO.

The numbers aren’t likely to look very good when General Motors and Ford Motor Co. release their first-quarter earnings results this week, both makers expected to post sharp declines from year-ago levels.

Ford had signaled a likely slide late last year as a result of the numerous new product launches it will have in 2014. But GM’s anticipated downturn is likely to be significantly greater than first forecast as a result of its on-going recall problems – an issue expected to continue to haunt new CEO Mary Barra for some time to come.

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A consensus of industry analysts forecasts GM will deliver a meager 9 cents per share in earnings for the first three months of 2014, and Brian Johnson, an automotive analyst with Barclays Plc is even more bearish, predicting the U.S. giant will go a penny into the red. Prior to the announcement of GM’s initial ignition switch recall in mid-February, Johnson was looking at a profit of 20 cents, which would still have been down sharply from the 67 cents per share it earnings during the first quarter of 2013.

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J.D. Power Gains More Insight into Buyer Behavior

Company acquires online consumer analytics firm.

by on Apr.23, 2014

J.D. Power will combine the information from the newly acquired Korrelate with data from the Power Information Network.

J.D. Power acquired an analytics firm to enhance Power’s ability to measure and track online shopping behaviors and trends of consumers. The move was announced today.

Korrelate provides the information about online shopping to advertising agencies, advertisers, media partners, data syndicators and publishers. Now the information will be combined with the Power Information Network (PIN) new- and used-vehicle retail sales data to improve the timeliness and depth in measuring the effectiveness of digital marketing.

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“Consumer behavior is changing dramatically in today’s Internet-powered world,” said Finbarr O’Neill, president of J.D. Power. “The auto industry spends billions of dollars annually on digital marketing. Measuring online activity and linking it to actual vehicle sales will enable marketers to measure and optimize their digital strategy.” Read the rest of this entry »

Lincoln Looks East – But Can China Save American Icon?

Luxury maker betting China could become its largest market.

by on Apr.23, 2014

Lincoln is betting it can gain ground in China by focusing on its dealer experience.

It once vied with rival Cadillac for dominance in the huge U.S. luxury car market, but the last two decades have been tough for Lincoln. Sales have steadily slid to the point that some anticipate parent Ford Motor Co. might eventually abandon the once-grand marque.

Lincoln has rolled out several new products over the last two years, and it plans to add at least two more by 2016, but that’s a fraction of what rival Mercedes-Benz has in store – at least one all-new or completely updated product every three months through the end of the decade.

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While Lincoln officials acknowledge they can’t keep up with that product blitz, they’re far from ready to admit defeat. But while they continue to struggle to find ways to lure more American buyers back to the brand, they’re looking East, towards China, to gain some much needed momentum.

“It’s strategically important for us to go to China,” said Matt Vandyke, Lincoln’s global director, a few days before the Ford luxury brand made its official debut at the 2014 Beijing Auto Show.

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