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Archive for April, 2012

Ford Q1 Earnings Tumble

Maker blames higher taxes, lower European, Chinese sales.

by on Apr.27, 2012

Ford earnings tumbled sharply, driven in large part by declining demand in Europe. The Ford Evos concept is shown here during its Frankfurt Motor Show preview.

Ford Motor Co. saw its first quarter net income plunged 45% compared to a year ago to $1.4 billion, or 35 cents a share, the maker blaming higher taxes and lower European and Chinese sales for the sharp slide. But North American results were their best in over a decade.

The maker meanwhile announced plans to offer lump-sum buyouts to as many as 90,000 of its former employees, especially white-collar workers, in a bid to reduce its pension costs.

It’s unclear whether the weak first quarter will impact Ford’s efforts to improve its credit rating.  The maker received a significant boost from Fitch Ratings, earlier this week, which returned the maker to investment grade.  But other agencies, including Standard and Poor’s and Moody’s have yet to weigh in.

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“Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment,” said Ford President and CEO Alan Mulally. “We remain focused on investing for future growth and developing outstanding products with segment-leading quality, fuel efficiency, safety, smart design and value.”

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Luxury Buyers Like the Idea of Autonomous Driving

JD Power Study finds motorists willing to spend for advanced technology features.

by on Apr.26, 2012

They're still the stuff of science fiction but development work on autonomous vehicles is proceeding fast.

After a late evening that included a few too many drinks the last thing you’re looking for is driving to work on a Monday morning.  No problem.  Just plug in your destination, close your eyes and let your autonomous vehicle drive to the office for you.

What has long been a science fiction fantasy is rapidly coming closer to reality – and a new study by J.D. Power and Associates finds many motorists – especially luxury buyers – intrigued by the prospect of buying an autonomous vehicle.

Perhaps that’s no surprise.  In general, American car buyers are more and more interested in investing in the latest automotive technologies, according to a new study by J.D. Power and Associates.

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While vehicle owners remain very interested in technologies that make their vehicle safer, they are turning their attention more and more toward features and technologies that allow them to be productive, connected and entertained while in their vehicles,” said Mike VanNieuwkuyk, Power’s executive director of global automotive.

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Enter the Dragons

Automakers are betting big on China's symbol for luck with special Dragon editions.

by on Apr.26, 2012

One of Aston Martin's special "Dragon 88" models.

According to the Chinese zodiac, this is the year of the dragon.  But you likely wouldn’t need a calendar to figure that out at this year’s Beijing Motor Show.  The dragon, the classic symbol of luck can be found on any number of models on display at the event, officially known as Auto China 2012, including those from Aston Martin, Smart and Chrysler.

The U.S. maker can certainly use a little luck.  Its Jeep was the first foreign brand to start building cars in China, through a joint venture launched in 1984 – when the SUV maker was still owned by the old American Motors.  But Jeep and the rest of Chrysler lost their presence in China when the U.S. maker was spun off by German partner Daimler. Its Mercedes-Benz brand took over the joint venture originally known as Beijing Jeep.

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Now Chrysler hopes to re-enter the booming Chinese market and one of the striking models on its display in Beijing, this week, is the Jeep Wrangler Dragon concept.  It’s adorned with the image, a dragon even to be found painted onto the insulation mat on the underside of the SUV’s hood.

One might see the dragon as especially appropriate for use on a Jeep, as the mythical creature is also a symbol for the natural world.  But there are dragons to be found everywhere at the Beijing convention center.

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European Crisis Fails to Slow VW Earnings Growth

“A very good start,” as profits exceed optimistic forecasts.

by on Apr.26, 2012

VW plans to introduce as many as 40 new models across its various brands this year. The Golf R is shown here.

The European economy may be teetering towards disaster but it was full steam ahead for Volkswagen AG, the German automaker handily exceeding analysts’ already optimistic expectations with a first-quarter profit of $4.2 billion.

The 87% jump reflected VW’s steady sales gains around the world, especially in the United States, along with China, Russia and other emerging markets.

“With the first quarter we have had a clearly good start to the year,” said Volkswagen Chief Executive Martin Winterkorn in a prepared statement.

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In Euros, VW’s net profit rose to 3.17 billion, with pretax profits up 93%, to 4.3 billion Euros.  Revenues jumped to 47.3 billion Euros, a 26% gain driven by an 11% increase in worldwide vehicle deliveries. The maker sold 2.21 million vehicles during the quarter, which could put it in a position – if it continues that trend – to take on U.S. rival General Motors for the global automotive sales lead this year.

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Car Sales On Track for Solid April

Preliminary numbers suggest momentum keeps building.

by on Apr.26, 2012

Japanese makers, in particular, appear to be having a very good month. But incentives for products like the Toyota Camry have also ramped up.

Final sales figures for April aren’t due out until next week but expectations are building for another month of automotive market momentum.

Light vehicle sales in the U.S., including fleet, are expected to reach 1.2 million units for the month, up 3.4% from April 2011, according to a forecast from True Car.com, an online data information center.  That would work out to another month in which the Seasonally Adjusted Annualized Rate or SAAR will exceed 14 million units – notably ahead of most forecasts going into 2012.

With other indicators providing mixed signals, analysts see the steady growth of the U.S. automotive market as a critical to the nation’s economic recovery.

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While forecasts for April vary, TrueCar – which relies on data provided by a national network of dealers – expects the SAAR to reach 14.6 million for the month, up from 13.2 million in April 2011 and 14.4 million in March 2012. Fleet and rental sales are expected to make up 18% of total industry sales in April 2012, TrueCar estimated in its forecast.

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Chrysler Delivers Best Earnings in 13 Years

Q1 profit beats all of 2011.

by on Apr.26, 2012

Chrysler is "maintaining its focus," says CEO Sergio Marchionne, after announcing $473 million in profits.

Barely three years after it plunged into bankruptcy, the Chrysler Group is reporting its biggest quarterly profit in 13 years, its $473 million in earnings more than the automaker made for all of last year.

The uptick in earnings reflects the maker’s strong sales for January – March period when demand for Chrysler products rose 39%, handily outpacing the U.S. auto industry as a whole.  But Chrysler also benefited from significant interest savings after having paid off its remaining federal bailout loans.

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“Another positive quarter…is affirmation that the Chrysler team is maintaining its focus,” said Sergio Marchionne, CEO of both Chrysler and Fiat, the Italian automaker that assumed control after the American maker emerged from Chapter 11 protection.

Chrysler’s first-quarter earnings were more than four times the $116 profit posted during the first quarter of 2011 – and the biggest figure since the maker reported a $682 million profit during the third quarter of 1998.

But there are some significant differences between then and now.  In 1998, Chrysler’s product portfolio was largely focused on pickups, SUVs and minivans.  While light trucks are still important to the maker, it is now increasingly focused on passenger cars, such as the full-size Chrysler 300C and midsize 200 sedan, as well as the new Dodge Dart it is preparing to launch.

The introduction of the Dart, which is largely based on the platform of the European Alfa Romeo Giulietta, is a “true melding of Chrysler’s and Fiat’s engineering and styling strengths,” said Marchionne. It is likely to become a major test of the alliance between the makers, Fiat now controlling 58.1% of Chrysler stock and planning to push that to more than 70% in the near to mid-term.

Chrysler’s first-quarter performance was buoyed not only by strong sales but a jump in its average transaction price, or ATP, consumers spending about 5% more per vehicle, at $29,234, according to the data tracking service TrueCar.com.

“Chrysler gained 2 full percentage points of US market share compared to a year ago, while increasing their transaction prices and lowering inventory turn times significantly –all resulting in a much improved bottom line,” said Jesse Toprak, Vice President of Industry Trends and Insights at TrueCar.com, who added that Chrysler should get, “full credit for having the most desirable line up of vehicles that they have ever had in their showrooms.”

For the quarter, Chrysler Group revenues rose 25% to $16.4 billion.

There is significant competition in today’s automotive market but the market also continues on an upswing that, barring another economic meltdown should see overall new vehicle sales reach 14 million for 2012, at least 1 million above 2011’s numbers.  Chrysler is expected to maintain its sales and revenue growth, especially if it can hold onto its current market share, 11.5% compared to 9.4% for all of 2011, analysts forecast.

Also assisting its earnings surge, Chrysler is now paying less to borrow money after getting out from under the terms of its federal bailout.  Having paid off its remaining government loans last May it saved $71 million in interest charges during the first quarter, it revealed.

Chrysler received $12.5 billion in assistance from the government before, during and after its emergence from Chapter 11.  The U.S. Treasury has recouped $11.2 billion of that and has written off the remaining $1.3 billion.

The maker does have a number of challenges ahead.  It has to successfully launch the new Dodge Dart, which not only goes up against traditional compact segment leaders like the Toyota Corolla and Honda Civic, but also new domestic challengers such as the Ford Focus and Chevrolet Cruze.

The first-quarter surge in fuel prices – now near record levels in most U.S. markets – could further weaken demand for the pickups and SUVs that remain a core part of the Chrysler line-up. The automaker has been hoping to offset that with updated designs and advanced powertrains, such as the more fuel-efficient V-6 it will offer in the 2013 Ram 1500 truck.

One of the biggest challenges remains the need to build Chrysler’s presence overseas.  It can no longer count on the North American market, Marchionne readily acknowledges.  The maker is now supplying a number of models to European dealers – though they are being sold there through various Fiat brands.

Meanwhile, Chrysler has a number of offerings on display in Beijing this week at the huge Auto China 2012 auto show.  It marks the return to what is now the world’s biggest automotive market.

Fiat 500: Is America Ready to Embrace Micro?

Making the case to buy Cinquecento revolves around the cuteness factor.

by on Apr.25, 2012

Fiat has returned to the U.S. market with the 500, a tiny, four-seat two-door hatchback.

There’s two ways to tell the story of the Fiat 500.

Story no. 1:

It seemed like a relatively simple trip. Two people, two duffel bags, one box of Easter flowers, a computer bag, one dog. But crammed inside the Fiat 500, no one was happy about the space allotted to them, the dog especially. Geez, there weren’t even kids tagging along for this trip.

Or, story no. 2

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There’s this woman I know who loves tiny cars. She sees this little Fiat 500 and declares “This is a Rhonda car. Can I drive it?”

Look, there’s no denying the 500 is as cute as a teacup Italian greyhound. For many, that’s the appeal. And when it’s time to pack for a weekend up north? Well, pack light and bring gift cards to the local greenhouse.

Fiat has been gone from the U.S. market for 29 years. But when the company took control of Chrysler, it saw an opportunity to make its often-delayed return to the U.S. market. The car it decided to bring here first is the tiny 500, or Cinquecento in Italian.

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Audi Unveils A6 e-tron Plug-In Hybrid

Study could lead to production model – for China.

by on Apr.25, 2012

Audi uses a stretched wheelbase A6 platform for the e-tron concept.

Audi’s late-to-the-party commitment to battery power is getting charged up fast.  The maker has already announced several upcoming products using its advanced electric drive technology – collectively dubbed e-tron – including a plug-in hybrid version of the 2-seat Audi R8.

Now, the German luxury brand is shifting focus to a more mainstream model, a plug-in version of the A6 sedan on display this week at the Beijing Motor Show – and, Audi hints, possibly in line for the jump from concept to customer.

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The prototype A6 e-tron features a turbocharged 211-horsepower, 2.0-liter 4-cylinder engine that’s paired with a 95-horsepower electric motor that gets its juice from a liquid-cooled lithium-ion battery pack.  While Audi isn’t saying how big that is, we’re estimating it’s somewhere between 16 and 20 kilowatt-hours, enough to get a maximum 50 miles in electric mode.  And for longer drives, that gas engine then kicks in to keep the A6 e-tron concept going indefinitely.

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Teens Don’t Think They’re Personally at Risk of Distracted Driving

New survey finds girls far more likely to text, engage in other distractions while driving.

by on Apr.25, 2012

Texting by a young driver was blamed for this August 2010 crash that killed two.

It’s always the other guy.  The other driver who we expect to run the light or engage in some other risky behavior while behind the wheel.  And that’s especially true, apparently, when it comes to the nation’s youngest motorists.  While they’re aware of the dangers of distracted driving, a new survey says teens continue to engage in risky behaviors because they’re convinced they’re personally not at risk.

The study, sponsored by Bridgestone tires finds that teens are in complete denial when it comes to highway safety.  More than half of the 2,000 drivers, aged 15 to 21 said they were aware that distracted driving poses risk, yet a large number continue to engage in risky behaviors, such as texting while driving or using handheld phones.

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Notably girls are more likely than young male drivers to engage in behaviors that can cause distractions while behind the wheel.  But teens and young adults are quick to point fingers and accuse their parents of taking even more risks.

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A Tasty Rolls-Royce?

Ghost Six Senses Rolls into Beijing.

by on Apr.25, 2012

The Rolls-Royce Ghost Six Senses concept.

Rolls-Royce is offering up a tasty treat for Beijing Motor Show-goers, a concept that appeals not just to your five basic senses of touch, sight, sound, smell and taste, but also what it describes as your spirit of ecstasy – a pun alluding to the maker’s classic hood ornament.

The Rolls-Royce Ghost Six Senses concept is intended to bring potential buyers to “a new level of sensory indulgence” – if not full sensory overload.

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“The Ghost Six Senses concept is a luxurious environment designed for the most discerning of individuals,” proclaims Rolls-Royce CEO Torsten Müller-Ötvös, who suggests the show car’s cabin “transcends” the traditional automotive interior.  “It can be likened to an aura, a sense that the stunning hand-made interior embodies something of the heart and soul of each proud craftsperson involved in its creation. That’s a uniquely Rolls-Royce sixth sense that this car presents so elegantly.”

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