Daily Edition: Jul. 16, 2004

July 15, 2004

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.

Ernst & Young Daily Edition STD

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.

Lear Daily Edition

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

Meadow Brook Concours

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.

Microsoft, Fiat in Alliancefor In-Car Software

Microsoft and Fiat will join to put the software giant's technology in all Fiat cars in coming years, the companies said this week. The Fiat Group cars will run Windows Automotive software, which will eventually control the onboard information and communications systems, including voice-recognition and global-positioning technology, for the company's cars. Standardization across the Fiat lineup will reduce the cost of the system, which won't have a video display but will have a USB port that will enable users to plug in their audio players (presumably, made by Microsoft) and play their own music in vehicles. Launching next year, the plan is for the system to appear on all Fiats, Lancias, and Alfa Romeos for an undisclosed price in the next few years.

FROM THE SOURCE headlines from the latest press releases

PRNewswire

Despite mixed results in June, sales of new cars and light trucks are likely to gain strength during the second half of 2004, according to National Automobile Dealers Association's (NADA) Chief Economist Paul Taylor. He projects that year-end sales will reach 16.8 million vehicles, which is consistent with NADA projections throughout the year. It would make 2004 the fourth-best annual new vehicle sales total in automotive retailing history.

Name Symbol Last Change
Autobytel, Inc. ABTL 7.14 +0.14 (+2.00%)
Autoliv Inc. ALV 41.03 +0.08 (+0.20%)
AutoNation Inc. AN 15.64 unch (unch)
ArvinMeritor Inc. ARM 19.80 +0.10 (+0.51%)
American Axle & Mfr. Holdings Inc. AXL 33.89 -0.29 (-0.85%)
Ballard Power Systems Inc. BLDP 6.90 -0.15 (-2.13%)
BorgWarner Inc. BWA 43.86 +0.32 (+0.73%)
Collins & Aikman Corporation CKC 5.63 -0.09 (-1.57%)
Cummins Inc. CMI 64.28 +2.18 (+3.51%)
Dana Corporation DCN 18.62 -0.12 (-0.64%)
DaimlerChrysler AG (ADR) DCX 44.10 -0.64 (-1.43%)
Delphi Corporation DPH 9.71 -0.13 (-1.32%)
Dura Automotive Systems DRRA 8.75 +0.07 (+0.81%)
Eaton Corporation ETN 62.43 -0.18 (-0.29%)
Ford Motor Company F 15.03 -0.07 (-0.46%)
General Motors Corporation GM 43.94 -0.20 (-0.45%)
Gentex Corporation GNTX 35.66 +0.10 (+0.28%)
Goodyear Tire & Rubber GT 9.67 +0.04 (+0.42%)
Honda Motor Co. Ltd. (ADR) HMC 22.85 -0.05 (-0.22%)
Johnson Controls Inc. JCI 53.75 +0.41 (+0.77%)
Lear Corporation LEA 57.46 -0.32 (-0.55%)
Magna International Inc. MGA 81.53 -1.35 (-1.63%)
Motorola Inc. MOT 16.58 -0.17 (-1.01%)
Nissan Motor Co. Ltd. (ADR) NSANY 21.49 -0.07 (-0.32%)
Sonic Automotive Inc. SAH 19.11 -0.06 (-0.31%)
Sirius Satellite Radio SIRI 2.61 -0.02 (-0.76%)
Toyota Motor Corporation (ADR) TM 79.62 -0.02 (-0.03%)
TRW Automotive Holdings TRW 19.90 -0.10 (-0.50%)
Tower Automotive Inc. TWR 3.53 +0.13 (+3.82%)
United Auto Group Inc. UAG 27.03 -0.88 (-3.15%)
Visteon Corporation VC 11.43 +0.21 (+1.87%)
XM Satellite Radio Hold. XMSR 26.03 -0.39 (-1.48%)

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