Daily Edition: Jul. 16, 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.

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.

Microsoft, Fiat in Alliance for 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%)