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Honda Earnings Hammered By Recalls, Weak Japan Sales

Maker also cuts forecast for full fiscal year.

by on Jan.30, 2015

A 2002 Honda Civic. One of millions of Hondas equipped with suspect Takata airbags.

Honda earnings took a sharp tumble during the most recent quarter, hammered by a variety of problems including the maker’s airbag recalls, as well as sluggish sales in its home Japanese market.

The maker announced the 15% decrease in net income a day after it said it received reports of two more drivers, including one in Houston, who may have been killed by flying debris caused by the explosive malfunction of its airbags.

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Honda has been forced to recall millions of vehicles using the supplemental restraint systems produced by supplier Takata. It also had to fix problems with its new Fit subcompact. Analysts have estimated the recalls have cost Honda about $255 million, or 30 billion yen – though the maker did not break out details.

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Is Cuba A Hidden Trove of Classic Cars?

Collectors developing barn fever as US-Cuba relations thaw.

by on Jan.30, 2015

The rusted hulk of a Mercedes-Benz 300SL Gullwing Coupe found in a Cuban yard.

Anywhere you wander in Cuba you might feel like you’re caught in a time warp, if for no other reason than the steady stream of half century-old Chevrolets and Fords that dominate the communist country’s roads.

They’re the automotive equivalent of “zombies,” suggests Ken Gross, one of America’s foremost experts on classic cars. “They’ve gone on far longer than they were designed to,” patched together with baling wire and anything else that cash-strapped Cuban owners can find.

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While most Cuban cars are old American hulks, there have been several recent reports of vehicles far more exclusive and desirable, including a pair of rusted Mercedes 300SL Gullwing coupes – vehicles that, in good condition, can command upwards of $500,000. So, with Cuba and the U.S. talking about finally ending the diplomatic standoff that followed the communist takeover, there’s been a bit of so-called “barn find fever” incubating among classic car collectors.

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Millennials’ Purchasing Power Reshaping Auto Industry

Gen-Y auto purchasing power reaches $135 billion.

by on Jan.29, 2015

Millennials are starting to buy more new cars, after all, and have increased purchasing power.

It’s often said that Millennials have a very different view of the automobile – and a new study suggests they are gaining the purchasing power to reshape the auto industry into their own image.

Americans born between 1980 and the late 1990s are expected to account for about 25% of the new vehicle market this year. That means they will generate sales of 4.24 million vehicles, according to data tracking service TrueCar — the equivalent of $135 billion in purchasing power.

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Talking About The New Generation!

“Improving economic conditions are shifting the rhetoric around Millennials and car buying,” said TrueCar President John Krafcik. “They are the largest growing cohort in the market and saying they don’t like cars simply isn’t true anymore. We know having a car means the same thing to Millennials that it does to other generations: independence and identity.”

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New Vehicle Designs Make Zero Highway Deaths a Real Possibility

Nine models reach that goal, finds new study.

by on Jan.29, 2015

The 2011 Honda Odyssey was one of nine models to experience no fatalities during the study period.

(This story has been updated to include the list of the nine safest vehicles, and additional comments by IIHS.)

The highway death toll has been plunging rapidly in recent years, and safety experts are crediting a number of factors, including improved roadways and a crackdown on drunk driving. But a new study puts the spotlight on vehicle design and improved technology for both preventing crashes and keeping motorists alive when they do occur.

A record total of nine models sold during the 2011 model-year have had a death rate of zero, meaning no one was killed in a crash involving those vehicles during the period studied by the Insurance Institute of Highway Safety. Significantly, these are not ultra-exotic products. They include mainstream models like the Honda Odyssey minivan and Subaru Legacy sedan, as well as the big Mercedes-Benz GL SUV. (See the complete list, below.)

A Safe Bet!

“We know from our vehicle ratings program that crash test performance has been getting steadily better. These latest death rates provide new confirmation that real-world outcomes are improving, too,” said IIHS vice president and chief research officer David Zuby.

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Chrysler Acquisition Hammers FCA Earnings

But U.S. operations also drove revenue growth.

by on Jan.28, 2015

FCA Chief Executive Sergio Marchionne's acquisition of Chrysler carried a high cost last year.

When it comes to the American half of its newly merged company, investors will have to decide whether the glass is half empty for Fiat Chrysler Automobiles.

That’s because the cost of completing the acquisition of suburban Detroit-based Chrysler bludgeoned the trans-Atlantic maker’s earnings. But the Chrysler side also delivered a healthy 11% increase in FCA’s overall revenues.

By the Numbers!

Legally headquartered in the Netherlands, Fiat Chrysler is reporting that its 2014 net profit fell by two-thirds, to 632 million Euros, or $718 million. For 2013, the maker had a restated net of 1.9 billion Euros. For the final quarter of 2014, the maker earned 420 million Euros, down from 1.2 billion during the same period in 2013.

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Aston Martin Gets Cash Infusion

New crossover among possible benefits.

by on Jan.28, 2015

Aston offered a hint of its future design direction with the DB10 concept it created for the new 007 film.

With a new management team already in place, Aston Martin is getting gotten a fresh cash commitment from a big Italian investment firm that should help it move ahead with what is being billed as the most aggressive product program in the British marque’s history.

Among other things, the pledge by Investindustrial SpA could permit Aston Martin lagonda Ltd. To add its first crossover-utility vehicle to the line-up of products it plans to introduce in the next half-decade. Aston has laid out plans to double sales to 8,000 vehicles annually as its line-up expands.

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“Aston has an industrial plan which is growing in its ambitions and we have always planned to participate in all funding needs that Aston has,” said Investindustrial Chairman Andrea Bonomi speaking to reporters in Milan. “If Aston needs capital, we’re there.”

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Toyota Could Lose Sales Lead to VW This Year

Japanese giant plagued by problems in China.

by on Jan.26, 2015

A Toyota dealership in China was burned in 2012. Weak demand there could let VW pass the Japanese giant.

Toyota’s worldwide sales surged 3% last year, once again positioning the Japanese giant as the world’s top-selling automotive manufacturer. But with Toyota officials glumly anticipating a modest decline in 2015, the Japanese maker could cede leadership to its ambitious German rival Volkswagen AG.

Assign credit – or blame, if you prefer – to China. VW continues to dominate the world’s largest automotive market even while Toyota struggles to gain traction there. Japanese makers, in general, have had serious problems making headway in China, especially after tempers flared due a dispute between the two Asian nations over ownership of a chain of strategically placed islands.

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At one point, rioters burned a Toyota dealership and damaged 100s of Japanese vehicles. Sales have only slowly begun to recover, but Toyota’s sales in China are still barely a third of those of the market’s top two manufacturers, Volkswagen and General Motors.

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Millennials Wants Wheels After All

MTV study finds Gen-Y would give up texting before their cars.

by on Jan.26, 2015

Millennials may be more interested in buying cars than the auto industry has realized.

It’s become conventional wisdom that Millennials would rather text their friends than drive over to visit, but a new study by youth-oriented MTV suggests that, as is often the case, conventional wisdom has things upside down.

A survey of 3,600 Millennials reveals that three out of four would give up their social media for a day, and texting for a week, rather than hand over the keys to their cars. One reason more teens aren’t rushing out to drive, the study suggests, is that new licensing rules make it harder for them to get behind the wheel.

Consumer Insight!

“Millennials, like other generations, see car ownership as a way to establish independence,” Berj Kazanjian, Senior Vice President of MTV’s Ad Sales Research, said at a presentation of the new finding during the annual National Automobile Dealers Association convention in San Francisco. “Millennials,” he added, “also see car ownership as a way to craft their unique adult identity.”

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Scion Aims to Regain Youthful Allure

Flood of new products promised.

by on Jan.23, 2015

The Scion tC Release Series 9.

Scion is turning to an old idea in its bid for young drivers, giving its tC Coupe a two-tone paint job based on a popular custom car show concept.

Originally aimed at youthful “influencers” who would draw buyers into showrooms for parent Toyota’s products, Scion has lost a lot of its early momentum in recent years, recent models like the micro-sized iQ and second-generation xB falling flat in the marketplace. Despite speculation Toyota might give up on the Scion brand-within-a-brand, the Japanese maker has no intention of pulling the plug and is, instead, promising to roll out an assortment of edgy new models that it hopes will recapture Scion’s original energy.

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“We’re committed to Scion,” declared Bob Carter, head of Toyota’s U.S. auto operations, during a speech at an industry confab in San Francisco this week. The sub-brand remains “a test bed for Millennials,” and a significant part of Toyota’s broader strategy.

It sees Scion as a critical bridge to help it gain new buyers for the Toyota brand which has long been dependent on now-aging Baby Boomers.

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Ford Opens Silicon Valley Research Center

The lines blur between tech and auto worlds.

by on Jan.23, 2015

Ford expects to employ 125 at its new Research and Innovation Center in Palo Alto.

As modern cars become increasingly dependent on digital technology, whether for safety, emissions or infotainment systems, the lines have been blurring between the rust belt and Silicon Valley. The latest example is a dun-colored office building in Palo Alto not far from such high-tech giants as Apple and Google. But this one will soon be staffed by 125 employees reporting to Ford Motor Co.

Ford was an early pioneer in the world of telematics with its Sync infotainment system. But as the maker – like its competitors – has come to learn, the pace of development in the electronics world operates far faster than in the auto industry. So, Ford’s new Research and Innovation Center will act as an outpost, tapping into the talent and technologies that have made Silicon Valley one of the world’s most important high-tech centers.

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“The valley here is a marketplace of ideas,” said Ford CEO Mark Fields, who was on hand for this week’s dedication of the Research and Innovation Center. “It’s about being in the right neighborhood because of all the collection of companies. Our folks going to the coffee shops will run into folks from other companies and strike up conversation.”

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