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Archive for July, 2016

VW Q2 Earnings Hammered by Emissions Scandal

Subterfuge slams sales, as well as reputation; more hits to come.

by on Jul.28, 2016

Volkswagen AG saw its Q2 profits drop 86% compared with year-ago results.

After reporting a rosy picture for the first half of 2016, a different reality has set in for Volkswagen AG, the embattled automaker reported today that second-quarter profits fell by more than half year-over-year, largely the result of its ongoing emissions cheating scandal.

The news came just days after a federal judge in California approved a $14.7 billion settlement to resolve the rigging of 475,000 vehicles with 2.0-liter turbodiesels to illegally pass U.S. emissions tests. That expense was largely covered by money set aside against 2015 earnings. But VW still has to settle a number of other lawsuits and solve problems involving its higher-end 3.0-liter diesel.

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After taxes, VW said it earned $1.2 billion euros, or $1.32 billion between April and June, down from 2.7 billion euros the year before. On an operating basis, the figure many analysts prefer to focus on, the impact was less severe, though down 12%, nonetheless, at 808 million euros, or $895.5 million, compared with 914 million euros during the period a year ago. (more…)

Musk Flings Open Doors of Tesla’s Gigafactory

Musk believes Model 3s coming in 2018.

by on Jul.27, 2016

Tesla's Elon Musk said recently that if the automaker reaches its production goal of 500,000 units, it would absorb all of the world's current lithium production. Credit: Tesla

Tesla flung open the doors of its still-in-progress Gigafactory to show the world what kind of progress it’s making on what will likely be the birthplace of every battery stuffed into every Tesla EV sold for years to come.

The company’s founder and CEO, Elon Musk, took the media on a tour of the plant, which is only 14% complete, and announced the facility would begin producing batteries at the end of this year. The first automotive power sources weren’t due to roll off the line, so to speak, until sometime in 2017. Tesla shareholders and owners will get a private tour later this week.

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The plant is already producing Tesla’s Powerwall and Powerpack energy storage units, using cells from Panasonic Corp. The Japanese company is a partner, investing $1.6 billion into the site, which is expected to cost $5 billion once it’s completed in 2020. (more…)

Model S Speeding at Time of Fatal Crash, NTSB Says

Tesla parting ways with Mobileye in wake of accident.

by on Jul.27, 2016

The NTSB determined that Joshua Brown's Model S was traveling at 74 mph in Autopilot mode when it struck a truck. Photo credit: NTSB

The Tesla Model S that crashed into a semi-truck while operating in Autopilot mode was driving over the posted speed limit for the road, according to a newly released report from the National Transportation Safety Board.

The agency said Joshua Brown’s Model S was traveling 74 mph with the Autopilot engaged when he collided with the truck, which was in the middle of turning on to the roadway. The speed limit for the road was 65 mph.

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“Tesla system performance data downloaded from the car indicated that vehicle speed just prior to impact was 74 mph,” the NTSB said in a preliminary report on its investigation of the crash. (more…)

FCA Earnings Increase Overwhelmed by Sales Reporting Scandal

Maker says profit rose 25% for second quarter.

by on Jul.27, 2016

FCA CEO Sergio Marchionne has reason to celebrate Q2 - albeit cautiously.

Fiat Chrysler Automobiles reported a 25% year-over-year increase in profits for the second quarter, despite hefty recall costs, thanks to strong demand in North America and Europe. That has led the maker to up its guidance for all of 2016.

But recalls aren’t the only problems the maker is dealing with. The trans-Atlantic automaker yesterday acknowledged misreporting its sales numbers in recent years, a problem that has reportedly led to a grand jury investigation. The problem could lead to closer scrutiny by industry analysts and investors.

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“Overall we had a good quarter,” Fiat Chrysler Chief Financial Officer Richard Palmer said during a conference call with analysts and reporters.

FCA earned 321 million euros, or $352 million, for the second quarter, a 25% jump from last year’s 257 million euros, or $282 million.

(more…)

High-Tech Safety Features “APEAL” to Consumers, Finds New JD Power Study

European luxury makers overwhelmingly dominate 2016 APEAL study.

by on Jul.27, 2016

BMW's new 750i is expected to bolster the company's sales, but it's also improving its image with buyers.

New vehicle buyers have come to expect – and appreciate – the latest in high-tech safety systems. And those manufacturers who offer such technologies as blind-spot detection and forward collision warning scored especially well in the latest J.D. Power APEAL study.

Designed to go beyond traditional quality and reliability numbers, APEAL probes buyers about what features they find most exciting – and which are likely to get them back into showrooms to buy the same model or brand in the future. The results of the 2016 study show European brands such as Porsche, BMW and Jaguar, that offers the broadest suites of safety gear coming out on top.

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“Technology-enabled safety features help drivers feel more comfortable and confident while driving their vehicles,” said Renee Stephens, vice president of U.S. automotive quality at J.D. Power. (more…)

Mercedes Readies Metris for Major Market Push

Maker offering van for less than $30,000.

by on Jul.27, 2016

Mercedes-Benz is looking to expand its spot in the newly hot midsize van market with a sub-$30k Metris.

Mercedes-Benz is planning to bring out an additional version of the midsized Metris van as its expands its portfolio of vans that can be used to carry passengers, cargo or tools for under $30,000.

The Mercedes-Benz Van line-up in the U.S. now include the Metris Worker, said Mathias Geisen, the head of MBUSA’s van marketing effort, said during a presentation at the Daimler AG van plant in Charleston, S.C., which is now used to re-assemble vans built in Germany.

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Daimler announced last year it intended to build a $500 million assembly plant to make Sprinter vans in the U.S. to take advantage of the expansion of the market for “Euro” vans in the U.S. (more…)

Grand Jury Looking into FCA Sales Reporting Scandal

Maker acknowledges fudging numbers.

by on Jul.27, 2016

The FCA scandal could prove a new headache for CEO Marchionne' search for a merger partner.

A federal grand jury is issuing subpoenas as government investigators expand their investigation into potentially illegal Fiat Chrysler Automobiles sales reporting practices, according to published reports.

The news comes a day after the automaker acknowledged that it has misstated its sales figures for a number of years and that rather than having six straight years of sales records, its upward climb actually came to an end in September 2013.

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But several sources who have spoken to TheDetroitBureau.com caution that any probe of sales policies could eventually spread beyond Fiat Chrysler and look at broader industry practices that can misrepresent the numbers. Such practices, said a senior executive at one of the nation’s largest automotive retailers, can negatively impact investors, dealers and consumers alike.

(more…)

UAW Secures Promise from Clinton to Re-Work NAFTA

Democratic nominee pledges to tackle trade agreement.

by on Jul.27, 2016

UAW President Dennis Williams says he's convinced Democratic Presidential nominee Hillary Clinton to amend NAFTA, if elected.

The United Auto Workers have a commitment from Democratic Presidential nominee Hillary Clinton to review provisions of the North American Free Trade Agreement, UAW President Dennis Williams said during a conference call with reporters.

Trade and trade agreements have been at the center of Republican Presidential candidate Donald Trump’s campaign, with him vowing to rip up NAFTA and other trade agreements he believes have been unfair to Americans.

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One of the byproducts of the NAFTA agreement was a broad expansion of car and truck production in Mexico. (more…)

Judge Approves $15 Bil VW Diesel Deal

But more legal problems await.

by on Jul.26, 2016

Judge Charles Breyer gives the deal a tentative go.

The $15 billion settlement last month in the Volkswagen diesel cheating scandal has won the tentative approval of U.S. District Judge Charles Breyer — but despite the record price tag, it doesn’t end the automakers legal problems.

The deal includes $10 billion to buy back or repair about 475,000 VW vehicles equipped with diesel engines that were rigged to illegally pass emissions tests. The rest of the settlement will go to various programs meant to compensate for the excess pollution those vehicles produced.

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“Volkswagen appreciates the constructive engagement of all the parties,” the maker said in a statement that followed Breyer’s ruling, “as the settlement approval process moves forward. The parties believe that the proposed settlement program will provide a fair, reasonable and adequate resolution for affected Volkswagen and Audi customers.”

The ruling brought an equally positive response from those on the other side of the courtroom.

(more…)

Fiat Chrysler Putting $1.48B into Detroit-Area Plant

Upgrades part of plan to convert U.S. plants to truck, utility production.

by on Jul.26, 2016

Chrysler is plowing $1.48 billion into the Sterling Heights Assembly plant to ready it for Ram 1500 production early next year.

The transformation of Fiat Chrysler’s North American production footprint continued forward today with the announcement of $1.48 billion in upgrades to one of its suburban Detroit plants.

FCA is moving all of its car production out of the country and concentrating its U.S. manufacturing resources on its highly profitable truck and utility line-ups. The Sterling Heights (Mich.) Assembly Plant currently builds the Chrysler 200 sedan, but after the changes, it will make the Ram 1500 pickup truck.

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Chrysler 200 production will end in December, at which point, the company will begin work on the changeover. The announcement follows the company’s first step: a $1 billion overhaul of plants in Toledo, Ohio, and Belvidere, Illinois. (more…)