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Archive for January, 2012

Ford’s Earnings: A Closer Look

Gains in North America run headlong into problems abroad, higher commodity prices.

by on Jan.27, 2012

Ford officials won't predict whether they can continue gaining share -- and raising prices -- even with the launch of key new products like the 2013 Ford Fusion.

Sometimes it can be difficult to please Wall Street.  As trading for the week neared its close the automaker’s shares were on track to drop about a half dollar as trader’s lamented the sort of figures that they might have only fantasized about during the depths of the Great Recession.  The maker reported a full-year pre-tax operating profit of $8.8 billion, or $1.51 a share, an increase of $463 million over 2010.

But what didn’t sit so well is that Ford still fell about a nickel a share short of early estimates, and more worrisome, total automotive pre-tax operating profits for the fourth quarter dipped to $586 million, a decrease of $155 million from the fourth quarter of 2010.

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What’s behind it all?  Analysts and company officials seem to agree on key factors including

  • Losses in both Europe and Asia Pacific;
  • Declining profits in the otherwise strong South American market;
  • Flooding in Thailand, in particular, hurt the maker in a number of regions; and
  • Commodity prices soared by about $100 million more than Ford initially planned for.

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New California Rules Could Push Millions More “Clean” Cars on the Road

Industry officials largely supporting new plan.

by on Jan.27, 2012

New California rules would put millions of plug-ins, like this Ford C-Max Energi, battery and hydrogen cars on the state's roads by 2025.

California’s environmental regulators have announced plans to tighten already strict emissions rules that were previously aimed at putting at least 1.4 million plug-in hybrids and battery cars on the state’s roads by 2025 – a move that could add millions more “clean cars” to the total.

Though industry officials have expressed concerns for the technical and cost implications, a wide range of companies, including General Motors, Ford, Chrysler and Nissan, told the California Air Resources Board, or CARB, that they’ll support the latest mandates.

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The new rules would require that by 2025 at least one of every seven vehicles sold in California would have to be a plug-in hybrid, extended-range electric vehicle or pure battery-electric vehicle, or BEV.

“We can’t afford to wait. We have to act on these issues now,” said CARB Chairman Mary Nichols during hearings on the proposed new rules. “Our projections show continued growth in population and vehicle miles traveled, which will affect air quality for years to come.”

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Marty’s Marketing Minutia – Hype and Hoopla Edition

Autos in Sports, History and Entertainment.

by on Jan.27, 2012

In an unusual twist, a few Super Bowl advertisers are already showing their game spots.

Super Bowl XLVI Hype 3.0

Contrary to popular belief, less is not more, more is more when it comes to carvertisers on the Super Bowl broadcast. Just nine days and counting til kick-off but you’d think it’s already the big game.  Enuf is enfuf already, as the teasers, hype and embellishment continues unabated.  Here’s this week’s update:

Apple and General Motors Ads Dominate NFL Playoff Games

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It’s crunch time. The big, really big winners in NFL Playoffs advertising, according to data from Ace Metrix were: Apple, General Motors (Cadillac), Applebee’s, Nissan, and Google were the most effective advertisers during the past three weekends of playoff football.  As noted in a special MMM this past Monday the three weekends of playoffs are often an interesting test run for advertising during the Super Bowl.

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Ener1 in Chapter 11 Despite Federal Energy Grant

Both Democrats and GOP could face political fall-out.

by on Jan.27, 2012

Ener1's finances took a serious turn for the worse when major client Think went broke last year - the Think City battery car shown here.

Ener1 Inc., the ambitious New York-based maker of lithium-ion batteries for electric vehicles and energy storage, has filed for bankruptcy despite receiving $118 million in grants from the U.S. Department of Energy — and lavish-support from the Republican-controlled state of Indiana, home to one of the company’s principal factories.

The “pre-packaged” bankruptcy was filed after the company reached agreement with its primary investors and lenders on a restructuring plan “that will significantly reduce its debt and provide up to $81 million to recapitalize the company,” Ener1 officials said in a statement released after the filing.

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Though Ener1 expects to continue operating and still hopes to eventually profit as battery car demand grows its bankruptcy filing could turn into a political football with both Democrats and Republicans pointing fingers.

The company’s statement said Ener1 expected to maintain its current employment level of approximately 700 and eventually repay creditors.  It has 275 employees in Indiana.

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Ford Earnings Hint at Loss of Momentum

Net income up but operating profit fell for the fourth quarter.

by on Jan.27, 2012

Ford CEO Alan Mulally and Chairman Bill Ford.

Ford Motor Co.’s comeback slowed in the fourth quarter as a 21% decline in core automotive business drove down operating profits at a time when the overall U.S. auto industry was showing signs of renewed strength.

For the full year, the second largest of the Detroit automakers reported a pre-tax operating profit of $8.8 billion, an increase of $463 million from a year ago, as strong performances in North America and Ford Credit offset challenges in other parts of the world, the company said.  This marks the company’s third year in a row of improving annual operating profits.

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“We delivered strong results for the full year as we continued to serve our customers around the world with best-in-class vehicles and made progress toward our mid-decade goals,” said Alan Mulally, Ford president and CEO. “Despite the continued uncertainty in the external environment, the strength of our North American and Ford Credit operations allows us to continue to invest for future growth and develop outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value,” he said.

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Opinion: Don’t Be Afraid to Drive Your Volt

GM’s groundbreaking E-REV is no less safe than any other car on the road.

by on Jan.27, 2012

GM wants to salvage the image of the Chevy Volt.

Let’s cut to the chase: The Chevy Volt is as safe as any other vehicle on the road. And if something in the vehicle is going to cause a fire, it’s more likely to be its gasoline engine and associated plumbing than the groundbreaking car’s lithium-ion battery.

Still, General Motors finds itself having to defend the world’s first extended-range electric vehicle.

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The controversy stems from a crash test of the Volt conducted by the National Highway Traffic Safety Administration last June. Two weeks after the test, a fire started when the battery’s coolant leaked onto a circuit board. The coolant was able to reach the circuit board on top of the battery when the agency did what it calls a rotisserie test, which simulates what might happen in a rollover crash.

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Growing Number of Buyers Steer Clear of Imports

“Conventional wisdom,” rather than latest quality data, often a factor in brand selection, says new J.D. Power study.

by on Jan.26, 2012

Makers like Ford -- its new 2013 Fusion shown here -- and Hyundai have to overcome negative quality perceptions that lag reality, according to a new study.

Word-of-mouth is typically a critical factor in the choice a car buyer makes, yet “conventional wisdom” about which brands have the best quality may be sorely out of date, notes a new study by J.D. Power and Associates. Nonetheless, 40% of buyers say they steered clear of one brand or another because of what they’ve heard about quality, rather than actually checking for the latest data.

Meanwhile, though Detroit automakers have long abandoned their “Buy American” campaigns, the public’s interest in bringing more manufacturing jobs back to the U.S. seems to be paying off.  Power’s latest annual “Avoider Study” finds that that nearly one in seven buyers has steered clear of a foreign-badged product precisely because of where it was made.

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The 2012 Avoider Study also found that fuel economy is now the most influential factor in choosing – or avoiding – a product, though factors like price and styling are also strongly influential.

“The fact that so many new-vehicle buyers may be basing their opinions about quality and reliability on pre-conceived notions, rather than concrete information or data, demonstrates how important it is for automakers to promote the quality and reliability of their models,” said Jon Osborn, research director at J.D. Power and Associates.

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Top 10 Future Collector Cars Under $100,000

Surprisingly, domestic cars dominate.

by on Jan.26, 2012

"Not your granfather's Buick," the Regal GS joins the "Hot List" of current collectibles including the likes of the Porsch 911 and Nissan GT-R Black Edition.

Those of us who’ve driving long enough will likely recall “the one that got away,” the Jaguar E-Type or split-window Chevrolet Corvette that we coulda-shoulda hung onto because today it’s a hot ticket on the collector car circuit.

But what about the cars on the road today?  Are there some models that are more likely to become collectible than others a couple decades from now?  Absolutely, says our friend McKeel Hagerty, the head of collector car insurance specialists Hagerty Insurance and a go-to guy when it comes to spotting classic car trends in the making.

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The fact is that those trends are rapidly evolving, and what one generation considers hot the next generation might not.  The trend in recent years has been favoring muscle cars and other ‘60s classics, but, as we recently reported on TheDetroitBureau.com, three new segments to watch are classic pickups, early Japanese imports, like the original Honda S800, and classic motorcycles.

But what are the cars you can buy today and count on being collectible tomorrow? The Hot List may surprise you.

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BMW Reveals New High-Performance Diesel Line

New M550d matches M5 off the line with 50% better mileage.

by on Jan.26, 2012

The new BMW M550d diesel will all but match the performance of the vaunted M5 gas model - but yield 50% better mileage.

Confirming a report first posted by TheDetroitBureau.com last summer, BMW will introduce an all-new line-up of high-performance diesel cars, including the new triple-turbo M550d that will all but match the off-the-line performance of the Bavarian maker’s celebrated, gas-powered M5.

The new diesel performance cars will debut later this year for sale through the company’s new M Performance brand.

The M-badged diesels will be officially introduced at the upcoming Geneva Motor Show and underscore the significant transformation of diesel power in recent years.

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As BMW highlights in a recent series of commercials, diesel technology is no longer something buyers must suffer through as a trade-off for good mileage. But the fact that the new models could be some of the highest performers in the BMW line-up may nonetheless take potential customers by surprise.

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First Look: 2013 BMW X6

Subtle changes to a game-changer.

by on Jan.26, 2012

BMW's X6 gets some small but noticeable updates.

BMW’s updated X6 Sport Activity Vehicle was one of those proverbial game-changers that comes along only every so often but then has a significant influence on automotive design.  In this case, any number of competitors has raced to match the Bavarian maker’s quirky blend of sporty coupe and crossover/utility features.

Though decidedly controversial – generating both picks and pans among industry critics, the first-generation BMW X6 has clicked with consumers, selling more than 150,000 copies worldwide, including 20,000 here in the U.S., which the German maker insists “has far exceeded the original expectations.”

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So, the spotlight is on the update that will be rolling into showrooms this spring.  Not surprisingly, especially for a mid-cycle update, goes through some evolutionary, rather than revolutionary, changes. But they should nonetheless enhance the appeal of the sport-activity coupe.

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