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U.S. Auto Sales Gained in Double Digits in August

September 4, 2013 by

General Motors on Wednesday said its sales rose 15 percent, its strongest month since September 2008. Ford Motor and the Chrysler Group each posted 12 percent increases last month, fueled by a mix of small and midsize cars and trucks.

Leasing is helping in the gains. In the second quarter, leasing accounted for more than 27 percent of new-vehicle purchases, compared with about 24 percent in the same quarter last year, according to Experian Automotive, which collects and analyzes automotive data. During the recession, the pace of leasing slipped after dealers made too many subprime, or low-quality, loans.

“Attractive low lease payments have proven very effective at getting new-car buyers back into the market,” said Jessica Caldwell, a senior analyst at Edmunds.com, an industry researcher. “In many cases, leasees are paying less than they did prerecession while getting a more expensive car.”

All four of G.M.’s brands showed double-digit increases in August sales. Cadillac posted the largest growth, with sales rising 38 percent; it was the best monthly showing for the brand since 1989. Buick’s sales jumped 37 percent, the strongest results in a decade. Sales of the automaker’s GMC brand jumped 14 percent, and its Chevrolet brand rose 10 percent.

“Our transformed lineup of cars, trucks and crossovers is performing very, very well,” said Kurt McNeil, G.M.’s vice president of United States sales operations.

Ford reported its best month for retail sales since August 2006. The midsize Fusion had good gains after Ford increased production at its Flat Rock Assembly Plant. Sales of its small cars, like the Fiesta subcompact and C-Max, rose 30 percent, while sales of the F-Series increased 22 percent.

“At August’s pace, we are selling one F-Series pickup every 42 seconds, 24/7,” Ken Czubay, Ford’s vice president of marketing, sales and service in the United States, said in a conference call.

Chrysler said six of its vehicles set sales records for August: the Dodge Journey midsize crossover, Challenger muscle car and Dart compact, as well as the Jeep Wrangler, Compass and Patriot. All five Chrysler Group brands reported sales gains in August, led by a 29 percent increase for Ram trucks.

Toyota’s sales rose more than 22 percent last month, to nearly 232,000 vehicles. Nissan’s sales were also up 22 percent.

Volkswagen continued its steady sales decline, falling 1.6 percent last month after declining 3.3 percent in July. The company’s growth has stalled as its lineup ages and competition intensifies.

“Volkswagen is unfortunately caught between product cycles on its volume models just as industry sales are taking off,” Karl Brauer, a senior analyst at Kelley Blue Book, said in a statement. “This has the brand struggling to make headway against fresher designs in a highly competitive market.”

Article source: http://www.nytimes.com/2013/09/05/business/us-auto-sales-gained-in-double-digits-in-august.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Chrysler and Fiat Merger Shows Fruits of Teamwork

January 10, 2012 by Leave a Comment

Industry analysts have been skeptical of the combined potential of the two automakers since Fiat took control of Chrysler after it emerged from its government-sponsored bankruptcy in 2009. Memories are strong of another overseas partnership — the German automaker Daimler-Benz’s merger with Chrysler — that ended unhappily in 2007.

But the integration of Fiat and Chrysler is nearly complete and some analysts now say it could become a model for trans-Atlantic cooperation in the auto industry. Sergio Marchionne, the chief executive of both Fiat and Chrysler, spoke enthusiastically of the combined company at the auto show in Detroit on Monday.

“We are making all the decisions together as one management team,” Mr. Marchionne said at a media briefing. “There is no question about who runs what. I run one company.”

The first fruits of the integration are on display here, and promise to help Mr. Marchionne achieve his long-term goal of increasing global sales of the two companies to six million vehicles by 2014. Together, Fiat and Chrysler sold about 4.2 million cars and trucks last year.

On Monday, Chrysler took the wraps off the new Dodge Dart, a compact car derived from the chassis and technology of an Alfa Romeo, one of Fiat’s European car brands.

But the bigger introduction comes Tuesday, when Mr. Marchionne will show the Maserati Kubang, an upscale sport utility vehicle based on Chrysler’s popular Jeep Grand Cherokee.

The Kubang is expected to be built alongside the Grand Cherokee in an assembly plant on Detroit’s east side.

The marriage of an all-American Jeep with the Italian luxury heritage of a Maserati is the best evidence yet that Chrysler and Fiat can create products together that they could not afford to make independently, auto analysts said.

“This merger is the closest thing to a truly symbiotic relationship that the industry has ever seen,” said Jim Hall, managing director of the automotive consulting firm 2953 Analytics.

Ever since Fiat took control of Chrysler, Mr. Marchionne has said he planned to leverage the strengths of both companies and operate them as co-equals.

But that goal was questioned by industry analysts who saw how Daimler-Benz dominated Chrysler during their nine-year merger.

“Daimler could never figure out what to do with Chrysler because they had no interest in integrating it into their business,” Mr. Hall said. “But Fiat actually believes it needs Chrysler for mass purchasing of parts.”

In Mr. Marchionne, Fiat and Chrysler have a strong leader who divides his time equally between the two companies. He has also promoted executives from both sides and assigned responsibilities that cut across geographic and corporate lines.

“This management team spends their time traveling and making decisions in the operating regions,” Mr. Marchionne said. “But this thing runs as one house.”

The final step in the integration process will be to increase Fiat’s ownership of Chrysler from 58 percent to 100 percent. That will require either a public stock offering to cash out the remaining stake held by the United Automobile Workers’ health care trust, or a direct purchase of the trust’s stake by Fiat.

“We need to find a way to bring these two businesses together completely,” he said.

Once Fiat takes full ownership, Mr. Marchionne will be faced with the delicate decision of whether to locate its corporate headquarters in Italy, the United States or possibly a neutral location.

The possibility that Fiat might move its corporate offices out of Italy has churned emotions there about the potential loss of an industrial icon. But Mr. Marchionne was coy on Monday on where the combined companies would be headquartered. “All options are open,” he said.

The corporate issues, however, have not slowed down his prime task of bringing profitable new products to market.

The Dart gives Chrysler a competitive product in the important small-car segment of the American market, where the company has had little success.

Production of the car at an assembly plant in Illinois also allowed Fiat to gain another 5 percent stake in Chrysler as part of the overall rescue plan Mr. Marchionne agreed to with the Obama administration in 2009.

The Dart will be Chrysler’s most fuel-efficient model, getting an estimated 40 miles per gallon, and will sell at a base price of about $16,000.

From a marketing standpoint, the Dart should be a big boost to Chrysler’s dealers, who have been hard-pressed to attract younger, first-time car buyers.

“We weren’t competing in this segment,” said Reid Bigland, head of the Dodge brand.

The Maserati S.U.V. is the first of several vehicles with Fiat brands that could be produced in the United States. Mr. Marchionne said that three Chrysler assembly plants could potentially build Alfa Romeo vehicles in the future.

Article source: http://feeds.nytimes.com/click.phdo?i=1bd863f457705b70d7d0590dbbb2cf1a

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Greentech: At Risk, the Core of a Car’s Identity

January 7, 2012 by Leave a Comment

Berlin

WITH so much of a car’s production having moved beyond the walls of the automaker’s final assembly plant, the engine has become one of the few distinguishing items left in a brand’s portfolio. But even this core asset seems to be slipping away, especially among European makers who are rushing to meet stringent carbon dioxide targets and to gain footholds in the electric vehicle market.

Volvo and Daimler are among the European carmakers developing partnerships with outside suppliers for basic powertrain elements — and investing billions to secure a place in a market that today barely exists.

Such ventures go well beyond the arrangements made in recent years — an alliance formed by Daimler, Renault and Nissan, for example — to build fleets of small cars with cleaner diesel and gas engines. Similarly, BMW and PSA Peugeot-Citroën have joined forces to develop hybrid components.

Daimler went a step further, concluding a 50-50 joint venture with Bosch, the giant components supplier, to develop, produce and sell electric motors for a new generation of e-cars.

Volvo reached out to Siemens, the German industrial heavyweight. The two companies agreed to team up on power electronics and technology for electric-drive and charging systems; their work has been integrated into a test fleet of Volvo C30 Electric hatchbacks.

While all automakers typically do business with a host of parts suppliers, the design and construction of the combustion engine has largely been the exclusive — and jealously guarded — responsibility of the carmaker.

This is changing with e-mobility.

“With electric vehicles coming onto the market, carmakers are confronted with the question of whether to make or buy electric motors,” said Christoph Hammerschmidt of Electronic Engineering Times Europe, a print and online automotive publication. “Companies such as Daimler, BMW or Porsche are very reluctant to place this competency into the hands of external partners.

“But it’s this or start from scratch,” he added. “Companies like Siemens and Bosch already have them. So why reinvent the wheel?”

However, these partnerships, and the Daimler-Bosch joint venture in particular, may foretell the advent of another way of doing business, should electric motors actually become the dominant powertrain of the future. It is a future in which the carmaker is just part of the equation and not necessarily the most important part.

For example, Daimler owns half of a new company, EM-motive, and in a significant departure from long-time industry practice, the motors go on the market under this name. Two directors of equal rank, one from each parent company, will run the company. The motors, designed to fit a wide range of vehicles, including cars, vans and delivery vehicles, will be sold primarily in Europe — even to rival automakers.

First in line are Daimler’s Mercedes-Benz and Smart brands. The newest generation of the Smart Fortwo Electric Drive, a two-seat city car, is expected to go on sale this spring with the new motor.

The carmakers take pains to put a positive shine on the new alliances; Daimler characterizes the ventures as “pooling competencies and exploiting synergies” rather than a loss of brand identity.

“A company like Bosch has a lot of know-how and problem-solving capacity when it comes to electronics and electric motors,” said Matthias Brock, a spokesman for Daimler in Germany. “But motors for cars are something different, and this is where Daimler’s expertise comes in.”

The partnership will enable the companies to get more motors to market and do it more quickly than either could have on its own. The different forms of partnership also enable manufacturers to share the considerable cost burden and high risk of e-car development.

The goals are ambitious and the timelines are short. Later this year, Volvo will deliver a fleet of C30 Electric test vehicles to Siemens. Those cars will then be evaluated in real-world driving. As for Daimler and Bosch’s EM-motive, the new company plans to produce more than one million electric motors by 2020.

These are grand visions for a market that is still in its infancy. But the new configurations in the industry reflect the seriousness with which carmakers and the electronics branch are taking e-mobility — and the bottom line on carbon emissions.

“Now there’s all kinds of innovation happening,” said Roland Edel, vice president and chief technical officer for innovative mobility solutions at Siemens. “By 2020, either there’ll be a booming mass market for e-mobility or it will have flopped entirely.”

Article source: http://www.nytimes.com/2012/01/08/automobiles/at-risk-the-core-of-a-cars-identity.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Chrysler Favors Stock Sale by U.A.W. Retiree Trust

June 4, 2011 by Leave a Comment

Chrysler’s Italian partner Fiat has the option to buy the trust’s shares, which account for a 45.7 percent stake in the company, and forgo a public offering. But while the executive, Sergio Marchionne, acknowledged the possibility of a direct purchase, he said a stock offering appeared to be the most prudent exit strategy for the retirees.

“I still look at the I.P.O. as the easiest way to monetize it,” Mr. Marchionne said of the stake owned by the United Automobile Workers’ voluntary employee beneficiary association, or VEBA.

Speaking after President Obama’s visit to Chrysler’s Jeep assembly plant in this northern Ohio city, Mr. Marchionne also said that a Chrysler stock offering would probably not be done until 2012.

“I think we need an additional track record of performance,” he said.

The president’s visit came a day after Fiat agreed to pay $500 million to the Treasury Department to acquire the 6 percent ownership stake that American taxpayers have held in Chrysler since it emerged from bankruptcy two years ago.

In addition, Fiat paid $75 million to the United States and Canadian governments for the right to buy the big ownership stake held by VEBA.

Fiat’s deal to buy the Treasury shares will give the Italian company a 52 percent stake in Chrysler, and accelerate the integration of the two automakers. It also concluded the American government’s stewardship of Chrysler, the smallest of Detroit’s Big Three car makers. Mr. Marchionne is the head of both Fiat and Chrysler.

Chrysler and General Motors were rescued from financial collapse by the Bush and Obama administrations after the two companies ran out of operating funds in late 2008.

After the sale of its shares to Fiat, the government will have recouped about $11.2 billion of the $12.5 billion that it invested in Chrysler. The remaining $1.3 billion — which went to the corporate shell of “old Chrysler” — will most likely be written off.

The Canadian government also lent money to Chrysler and continues to hold a 1.7 percent stake in the company. Mr. Marchionne said that Fiat was currently in talks to acquire those shares.

Once that is completed, Fiat will essentially own all the Chrysler stock that is not held by the VEBA.

But while Fiat has the resources to acquire the shares of the health care trust, Mr. Marchionne said such a transaction could be prohibitively expensive.

Article source: http://feeds.nytimes.com/click.phdo?i=5fc5498d5ba2b070b34fb0534d18216f

Filed Under: Business News Tagged With: , ,