Freep: Q2 Profits Should Be Good inDetroit
Despite increasing inventories and rising interest rates, Detroit's automakers could report stronger second-quarter profits when the numbers come in next week. The Detroit Free Press reports that the April-June financial period could show Big Three earnings up as much as eight percent from last year's tallies, based on the predictions of analysts from investment banks such as Credit Suisse and Prudential. The good financial results in the second quarter, however, might be negated in the third quarter, as pricing pressure for the 2005 model year takes hold and as U.S. brands continue to lose market share. The Free Press says Detroit's brands this year have taken 59 percent of the U.S. vehicle market, down from 60.6 percent in 2003.
June Sales Shocker at Ford, GM by TCC Team (7/5/2004)
The wheels come off the incentive-and-rebate game.
VW: No Plans for Bernhard
Volkswagen officials are denying reports that DaimlerChrysler board member Wolfgang Bernhard will report for duty at the VW car brand group. Bernhard, axed at the last minute from the top job at Mercedes before he took office, has been rumored as the next leader of various car brands since his Waterloo. Companies named have included GM, VW, Ford, and even the Chrysler Group once more. But with Eckhard Cordes set to be named the next head of the Mercedes-Benz group, Bernhard's chances of resurfacing in Auburn Hills are minuscule. For their part, VW's top execs say they haven't contacted Bernhard about taking charge of the group that includes the VW, Bentley, Bugatti, and Skoda brands. "I have at no point had negotiations with Mr. Bernhard," VW chairman Bernd Pischetsrieder told Reuters.
DCX Spins: Schrempp In, Bernhard Out by Jim Burt (5/3/2004)
Changes rumble on through German-American company.
U.K. Mag Names Kia Franchise of the Year.
The U.K. newspaper Motor Trader has named Kia Motors Corp. "Car Franchise of the Year." Kia follows in the footsteps of Mazda and Kia in winning the award in the past two years respectively. Motor Trader credits Kia's British franchise operation, established in 2002, with fast growth and sales momentum, including a 73-percent spike in the U.K. in 2003 vs. 2002 sales. The automaker expects a 54-percent increase in 2004 over 2003. —Jack Gilbert
VW Fights Back in China
Volkswagen China will step up its partnership with its Changchun-based partner First Automotive Works (FAW) in an effort to strengthen its dwindling market share, which is currently under fire thanks to General Motors' highly-publicized surge and a collection of other automakers slowly getting more involved in the high-volume sales fray. Volkswagen's says it will build light commercial vehicles — the Multivan and Caravelle — in cooperation with FAW in Jilinnear Changchununder. The automaker says the new vehicles are part of its already-announced plan to spend 5.3 billion euro ($6.5 billion) in China investment by 2008.
In addition, under a newly-established 150 million euro ($185 million) joint venture between the two companies, VW and FAW will operate Volkswagen FAW Platform Co. Ltd., of which VW holds a 60 percent share. The company will produce components starting later next year, including front and rear axles for forthcoming VWs to debut in the Chinese market. The pair will also begin building low-emission engines starting in 2006 in Dalian. —Jack Gilbert
Suppliers: China Currency Undervalued by Joseph Szczesny (6/27/2004)
But the industry is compelled to spend with the Asian giant, the same suppliers say.