Porsche unveils 911 Turbo S
WEEKLY CAR GUIDE: May 14, 2004 by TCC Team (5/17/2004)
New Escape Hybrid, new Porsche 911, and tips on run-flats.
Saab leaving the ATL for Motown
Saab Cars USA is moving its
It is not a surprising move. The move enables GM to trim Saab's headcount from its current 80. And it makes it easier for Saab's operations and product development to integrate with GM.
"We save significantly on facility costs. We save significantly on structural costs, because we cut down on redundancies. It will give us the full ability to tap into more opportunities with GM North America," said a Saab representative.
Saab has posted an annual profit only twice since GM acquired a stake in 1990, and is in the midst of an aggressive product expansion in the United States, where it has only offered two models, the 9-3 sedan and bigger 9-5. Saab is launching the 9-2x, a small and sprite sport sedan built off the Subaru WRX, later this year and the 9-7 SUV, built off the Chevy Trailblazer, next year. GM owns a stake in Subaru parent Fuji Heavy Industries and is trying to share vehicle architectures across alliance partners and GM-owned brands.
Through April, Saab's
2005 Saab 9-2X by Marty Padgett (5/10/2004)
Saab gambles part of its future on a very strong hand.
Nissan has already announced it will introduce a gas-electric hybrid Altima in 2006, and company officials say more will be announced next month when Nissan hosts a product forum in
Sachs: rates will hurt sales or profits - or both
Goldman Sachs auto analyst Gary Lapidus said Thursday that a hike in interest rates would cool auto sales by 600,000 units on an annualized basis, and that automakers would have to raise discounts and lower prices to give consumers an additional $1100 per vehicle to keep the status quo.
Automakers are carrying nearly a 100-day supply of unsold vehicles heading into the summer sell-down. Lapidus says automakers would be better off cutting production than cutting pricing further when rates climb as they are expected to do. Much of Wall Street expects the Federal Reserve to increase short-term rates by 50 basis points or more before the year is out.
Low rates, the Bush tax cuts, and consumers opting for longer and longer loan terms, noted Lapidus, have driven demand and the average price of a vehicle as consumers opt for more gadgets and features and luxury cars - as long as they can have seven years to pay off the loan. It's worth noting that profits have not been rich at GM, Ford, or Chrysler during this period of low rates and high sales volume.
Lapidus said automakers are unlikely to cut production to offset falling demand because of their "prisoner's dilemma," or the fact that the Big Three have too much manufacturing capacity and must pay UAW workers whether they work the lines or not.
Lapidus advised clients Thursday to stay away from auto stocks in an environment of rising interest rates.
Ford, for example, impressed Wall Street in the first quarter by earning 96 cents a share, double what was expected But its guidance for the whole year is only $1.50-$1.60 per share because of the need, the automaker believes, to hike consumer incentives the rest of the year to keep the metal moving off dealer lots.
Prudential joined the auto bears, downgrading the auto parts sector to "unfavorable" from "neutral" citing a pending ascent in the Federal Funds rate. Prudential said "investors perceive that rising interest rates will choke off the demand for vehicles, which will have a negative impact on earnings for the automakers and suppliers." -Jim Burt