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TCC'S DAILY EDITION: Feb. 3, 2004
Auto Stocks Down on Ratings, Softening Earnings
subscribeShares of Ford, General Motors, and DaimlerChrysler have been drifting lower on signals pointing to rising interest rates and softening earnings outlooks. On Monday, Ford fell 59 cents, or 4.1 percent, to $13.95 while General Motors gave up 98 cents, or two percent, to $48.70. The broader market was up. DaimlerChrysler escaped the selling and rose three cents to $47.56. Ford traded above $17.00 a month ago. GM traded above $54.00 as recently as Jan. 22. On Monday, Deutsche Bank analyst Rod
Lache downgraded Ford from hold to sell and lowered Ford’s price target to $12.00 based on the bank’s uncertainty about Ford hitting its mid-decade earnings goal. Signals from the Federal Reserve that higher interest rates are looming spells trouble for automakers who have been leaning on zero-percent loans and extremely low rates that allow consumers with negative equity trade-ins to roll the money they owe into a new auto loan. Higher rates will make that less appealing to consumers. On Friday, Goldman Sachs downgraded GM stock while holding Ford’s rating. —Jim Burt
Kerry: U.S. Needs More Efficient Vehicles by Joseph Szczesny (2/2/2004)
Democratic candidate will need Detroit against Bush.
Chevy, Caddy Score Big in Super Bowl Ads
Ads for Chevrolet and Cadillac didn’t finish in the top ten most popular Super Bowl commercials, according to USA Today’s annual Ad Meter. But they scored very high and beat the usually much hipper Mitsubishi advertising. A Chevy ad showing kids eating soap after presumably uttering expletives while reacting the Chevy SSR scored highest among car ads with a 7.73 rating, good enough for no. 12. The top ad scored 9.04 out of a possible 10.0, and the worst scored 4.08. The Ad Meter is based on the reactions of 136 adults. An ad showing large athletes getting into the Chevy Aveo scored 7.04, and finished 22nd out of 60 ads tracked. The punchline was that the athletes shown inside the car looked like Liliputians in the “roomy” Aveo. A spot for the Dodge Magnum scored 6.87 for 27th place. A Cadillac SRX ad scored 6.63 for 33rd. The Caddy ad showed a cool special effect of Cadillacs speeding like torpedoes through water, capturing the turbulence of the fluid displacement. “Power. Style. Luxury.” “As predicted in the space long ago: Cadillac is back, Jack,” opined Advertising Age critic Bob Garfield. Garfield and Adweek columnist Barbara Lippert both praised the Chevy ad, and felt it was better than some of the top-ten winners. A cliffhanger spot for the Mitsubishi Galant scored relatively poorly, at 6.40 and 39th. The ad showed crash avoidance technology, with the Galant up against the Toyota Camry and Honda Accord. The ad stopped short of showing how a potential accident ended up, and directed viewers to the company’s Web site. A Honda ad, part of ongoing series about a Pilot owner raised by wolves is very funny, but didn’t tickle too many game viewers. It scored a relatively poor 6.35 for 42nd. A car ad has never won best ad in the newspaper’s Ad Meter, with Anheuser-Busch and Pepsi dominating the winner’s circle every year. It’s a pity given the emotional appeal of automobiles over soft drinks and beer. A Bud Light ad finished number-one in Sunday’s game. —Jim Burt
Cadillac Reveals 2005 STS by TCC Team (1/19/2004)
New full-size, rear-drive sedan to take on Germany's best.
Chrysler Prices New Minivans
2005 Chrysler minivansEnlarge Photo