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Archive for April, 2011

Daimler Earnings Double

German maker forecasts record Mercedes sales.

by on Apr.29, 2011

Daimler CEO Dieter Zetsche forecasts big increases in demand for Mercedes-Benz, especially in China.

Daimler AG’s first-quarter net profit nearly doubled to $1.65 billion, revenue increasing by 17% on stronger sales across the company’s business lines – which, in turn, prompted a prediction of record sales for Mercedes-Benz passenger cars this year.

“We achieved excellent earnings in the first quarter. This puts us well ahead of our planning and confirms our positive outlook for the year 2011,” Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars, said in a statement Friday.

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Insisting the company is “on the right track,” Zetsche said Daimler is counting on delighting customers w with new product, “continuous innovation and new technologies” in order to “continue our profitable growth.”

Revenues climbed to $34.7 billion, largely reflecting a 12% increase in unit sales in the first quarter to 310,700 vehicles.

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Feds Investigate Stalling Problems with Nearly 900,000 GM SUVs

Faulty fuel gauges blamed.

by on Apr.29, 2011

A 2007 Chevrolet TrailBlazer, one of the GM SUVs targeted by the new NHTSA investigation.

Federal safety regulators have launched a preliminary investigation into reports that nearly 900,000 General Motors sport-utility vehicles could be subject to unexpectedly running out of fuel and stalling because of potentially faulty gas gauges.

Though the problem involves vehicles produced mid-decade, the National Highway Traffic Safety Administration says there has been an apparent increase in the number of reports linked to the problem during the last year.

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The investigation centers around 2005 through 2007 SUVs sold under the Chevrolet TrailBlazer, GMC Envoy, Buick Rainier and Saab 9-7 nameplates.  All share a common platform and many of their components, including gas gauges.

The NHTSA has so far received 668 complaints alleging that the gauges may provide random and inaccurate readings, possibly indicating there is gas in a tank that has actually run dry.  The result is that “the vehicle (may run) out of fuel …causing vehicle stall with no restart,” the agency said.

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Paying Off Government Should Boost Chrysler Profits, Says Marchionne

White House wants GM and Chrysler back in private hands, says Geithner.

by on Apr.29, 2011

Chrysler's Marchionne still has no date set for an IPO.

Paying off Chrysler government loans will permit Fiat to gain a majority stake in the U.S. maker, but it will also help Chrysler shore up its bottom line, says Sergio Marchionne, the man managing both of the automakers.

Meanwhile, Treasury Sec. Timothy Geithner says the Obama Administration wants to see both Chrysler and General Motors back in private hands as soon as possible, though he says the fast-improving fortunes of the two makers can be seen as a victory for the White House, which successfully battled to keep the carmakers alive.

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Chrysler/Fiat Chairman Marchionne announced yesterday plans to pay off the remaining $7.5 billion owed to the U.S. and Canadian treasuries.  According to the executive, there has been plenty of interest among private lenders to provide the necessary funds.

“There isn’t any doubt there is interest in the capital markets,” he said. “Since we outlined them in November (2009), we haven’t missed any of our commitments or forecasts,” Marchionne told reporters after touring the Jefferson North Assembly plant in Detroit with Treasury Secretary Timothy Geithner.

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Cadillac Developing New Convertible

Will slot in under next-gen CTS.

by on Apr.29, 2011

Caddy will develop an all-new soft-top convertible, rather than going the folding hard-top route or modifying the current CTS Coupe.

Cadillac is looking to go topless.  Years after abandoning its last drop-top, the domestic luxury maker is reportedly developing a new convertible that will be part of a wave of new products coming to market by mid-decade.

The Detroit maker is apparently opting for a soft-top, rather than the more heavy, complicated – and expensive – folding metal roof that a number of makers, including BMW and Volkswagen, have been adopting.

As TheDetroitBureau.com reported earlier this week, convertible sales have plunged precipitously in recent years, from 247,519 in 2005 to 112,914 just four years later.  Ford has seen demand for the  Mustang ragtop drop from 25% of the pony car’s overall sales to just 13% lately.  But there are signs of a ragtop renaissance.

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Convertible sales rose 9% last year, to 122,949 – though that was below the overall U.S. market recovery – and a forecast by consulting firm IHS anticipates the segment’s volume will reach 223,224 by 2015, about the time Caddy goes al fresco.

There had been some talk of stripping the roof off the striking CTS Coupe, but that approach was apparently abandoned in favor of a more ground-up design that doesn’t need extensive shoring up to maintain the convertible’s body dynamics.

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Are Chrysler and Fiat Pulling Back on Battery Power?

Maker selling its GEM battery vehicle division.

by on Apr.28, 2011

The GEM Peapod neighborhood-electrict vehicle.

Chrysler Group LLC is selling its neighborhood battery car unit, Global Electric Motorcars, LLC to Polaris Industries Inc.

Chrysler spokesman Gualberto Ranieri said GEM, which is based in Fargo, North Dakota, didn’t fit into Chryusler’s portfolio. However, the sales of GEM does not mean Chrysler was giving up on electric vehicles entirely, he said. A battery-powered version of the Fiat 500 is still an approved program, Ranieri said.

But the trans-Atlantic partnership has otherwise taken a relatively low-visibility approach to battery cars, Fiat scrubbing several electric vehicle projects that Chrysler had previewed after the American maker emerged from bankruptcy in 2009.

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GEM, which builds low-speed EVs used in gated communities and golf courses, is considered something of a leader within the low-speed vehicle market, with a well-respected brand and approximately $30 million in sales during the 2010 calendar year. Since the company was established in 1998, they have placed more than 45,000 electric-powered vehicles on the road worldwide.

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Hyundai Earnings Surge 46%

Korean maker's sales surge past Honda.

by on Apr.28, 2011

Coming at you. New products, like the big Equus sedan, are helping Hyundai drive up earnings.

It was a great first quarter for Hyundai, the upstart Korean carmaker that has been much of the auto industry’s established order a scare.  The maker reports it earned $1.75 billion for the January to March period, a 46% jump.

With demand up everywhere from Berlin to Beijing – and Boston in- between — Hyundai also recorded global sales of 922,000 for the quarter pushing it in front of Japan’s number three maker, Honda.  Considering the huge losses in production Honda and the rest of the Japanese have suffered in the wake of that nation’s March 11 disaster, Hyundai is likely to maintain that lead, analysts suggest, for at least another quarter, if not longer.

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Hyundai’s net, 1.88 trillion in Korean won, was up from 1.28 trillion won a year ago.  First-quarter sales and revenues totaled 18.23 trillion won, a 21% increase.

The Korean company has been on an aggressive growth curve fueled by the expansion of its line-up into a variety of new segments, and from the addition of overseas assembly plants, such as the facility it opened in Alabama, two years ago.

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First Look: 2011 Porsche 911 GT3 RS 4.0

The “ultimate” non-turbo 911?

by on Apr.28, 2011

The new GT3 RS 4.0 is the most powerful naturally-aspirated 911 Porsche has ever produced.

Faster than most folks can get “2011 Porsche 911 GT3 RS 4.0” out of their mouths, the Schwabian automaker’s “ultimate” normally-aspirated sports car will hit 60 – on the way to a top speed of 193 mph.

The appropriately named GT3 packs a new 4.0-liter flat-six in its rear engine compartment, the powerplant derived from 911 GT3 RSR race car, and borrowing such niceties as the forged pistons and titanium connecting rods.  A six-speed manual is the only gearbox offered.

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The new Porsche also borrows a variety of race-derived parts designed to shed weight, such as carbon fiber seat frames, front fenders and luggage compartment lid.  Even the carpeting is “weight-optimized,” Porsche proclaims, trimming the 911 GT3 4.0’s total mass to just 2,998 pounds – with a full fuel tank.

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The Worst Cars on the Road?

Mercedes, Smart and Nissan cited, but Detroit offerings dominate Forbes’ list.

by on Apr.28, 2011

The worst car on the road? The Mercedes-Benz S550 takes its lumps in a new study.

By just about any metric you choose – from fuel economy to long-term reliability – today’s automotive offerings continue to get better and better.  But there are still a few clunkers.

And Forbes magazine has come up with a list of what it claims are the worst cars on the road, using data from six key studies – covering matters such as safety and cost-of-ownership.

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The list includes a few surprises, such as the vaunted Mercedes-Benz S-Class, as well as some poorly-reviewed offerings, notably the Smart fortwo.  But Forbes reserves the brunt of its wrath for Detroit, which overwhelmingly dominates the list with models like the Cadillac Escalade.

The significant exception is Ford, which didn’t place a single model on the list of dubious honor.

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Treasury Sec. to Tour Chrysler Plant as Marchionne Announces Bailout Repayment

Fiat expected to boost stake in Chrysler to 51% by year-end.

by on Apr.28, 2011

U.S. Treasury Sec. Tim Geithner will be on hand when CEO Sergio Marchionne is expected to announce plans to pay off Chrysler's government loans.

This story has been updated to reflect Chrysler’s official confirmation it will pay off its federal loans.

Treasury Sec. Timothy Geithner will take a tour of Chrysler’s Jefferson North Plant today, but it will be more than just a friendly visit, the automaker today announcing it plans to pay back its remaining federal bailout loans by the end of June.

Sergio Marchionne, CEO of both Chrysler and its Italian ally Fiat, has been lining up alternative – and less expensive funding – in recent weeks.  With Geithner at his side during the visit to the Detroit plant, Marchionne is expected to provide further details about the plan to repay $5.8 billion to the U.S. Treasury and another $1.7 billion to the Canadian government.

The move will permit the Italian side of the alliance to increase its stake in Chrysler to 46%.  Marchionne has already indicated he expected to meet a final hurdle set under the bailout that would permit Fiat to bump its holdings to a majority 51% by the end of this year.

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It’s likely Geithner will at least touch on the early payoff of Chrysler’s bailout during a Thursday afternoon speech to the Detroit Economic Club – though the overall economy was planned to be his primary topic.  The improving fortunes of Detroit’s Big Three has helped the Obama Administration quell early criticism of the costly bailouts of Chrysler and General Motors.

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Electric Vehicles Present New Challenge for Insurers

Companies said they need experience to determine rates and they have little right now.

by on Apr.28, 2011

Insurers don't have any experience insuring electric vehicles such as the Chevrolet Volt, so they are classifying them neutrally.

When it comes to insurance, it’s all about experience. And right now, insurers have virtually no experience insuring the new breed of electric vehicles.

With electric vehicles starting to trickle into the marketplace, insurance companies are trying to figure out how to price coverage for them.

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Real experience will take a while as claims start to come in for electric cars involved in accidents, theft and other insurable incidents. With so few of them on the road, that could take a while.

“We do not yet have enough claims data from electric vehicles to make any such conclusions about them. Until we do, we will rate them neutrally,” said Angie Rinock, spokeswoman for State Farm Insurance.

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