While the Big Three spend, spend, spend, most of their counterparts are doing their job to keep incentive levels moderate. Korean automakers Kia and Hyundai are the only firms able to actually deflate spending, despite July being a traditionally competitive month when most automakers are moving out 2004 models to make room for 2005. The Koreans reduced incentives $35 to $1833, while Europeans boosted spending $228 to $2562. The Japanese remain the most frugal, spending just a shade above $1000 in incentives per vehicles, Edmunds says. Luxury nameplates Cadillac ($7878),
July Sales Rebound; Ford, GM Down by Joseph Szczesny (8/3/2004)
Chrysler Issues Pair of Recalls
A power steering problem has driven Chrysler to call back 681,000 V-6 minivans sold between the 2002 and 2004 model years. Power steering hoses potentially could leak in chilly weather, leading to fires. In addition, 2000 Dodge Ram pickups are recalled for wiring problems.
C6 Ads to Invade OlympicsTelevision commercials for the Chevy's C6 'Vette debut during the Summer Olympics. GM turned to Guy Ritchie, best known for his highly-publicize fling with Madonna, but also known for his short movie-directing talent — including BMW commercials staring The Material Girl — to call the shots on the new TV spots. Created by longtime Chevrolet ad shop Campbell-Ewald in
2005 Chevrolet Corvette by TCC Team (8/2/2004)
With the "C6," the little changes make a big difference
Like crosstown rival Ford, General Motors now has permission to finance vehicles in
SPECIAL REPORT: Management Briefing Seminars
2004 Traverse City Coverage (8/3/2004)
Automakers face "the perfect storm."
2004 Traverse City Coverage, Part II by TCC Team (8/4/2004)
Saturn VUE in Big Recall
2002 Saturn VUE
Daily Edition: Jul. 27, 2004 by TCC Team (7/26/2004)
Chrysler working on a Scion-alike, GM kills CVT.
GM Cashing Out on CoCos
Facing the threat that new federal accounting rules would damage its stock price, General Motors expects to use cash, rather than stock, to cover the roughly $8 billion debt it has mounted in the form of contingent convertible bonds. "Frankly, we would have gone a different direction," had GM known in advance that it would be penalized for using convertible bonds, acknowledged GM CFO John Devine. The terms of the bonds allow the automaker to pay them off with cash, stock, or a combination of the two. But under new rules being considered by the Financial Accounting Standards Board, or FASB, so-called CoCos would have to be considered when calculating the earnings per share of a company. And in the case of GM, Devine said, that would have a potential impact of something under a dollar a share. Even though that would have little real meaning, the write-down would hurt the image of GM's stock with investors, the company fears. So to avoid that, he said, "This means that we would use cash rather than stock and significantly limit any diluted effect. The $8.1 billion in CoCos GM has outstanding don't come due until 2032 and 2033.
The competition will be keeping a close eye on the new Jeep plant in
Chrysler Builds New Jeeps with Suppliers by Joseph Szczesny (8/3/2004)
New Toledo plant subs out more work than ever for Jeep.
Global Auto Sales to Hit Record
These days, it's easy to take a gloom-and-doom view of the auto industry, but there are some positive trends to stay focused on, declared General Motors CFO John Devine during a speech at the Management Briefing Seminars. Global sales have grown more than ten percent since 1997, and will top a record 60 million this year, Devine forecast, adding that a "reasonably conservative estimate" for 2009 moves the figure up above the 70 million mark. The biggest share of that growth, about 29 percent will come from
Full Steam Ahead on
Despite a sudden and unexpected downturn in Chinese car sales, Western auto and partsmakers remain determined to invest in the populous Asian nation. "We're in it for the long-term," General Motors CFO John Devine told TheCarConnection, and will continue with the $3 billion expansion announced in June. That confirmation came despite the fact that Chinese car sales were nearly flat last month, and have been steadily declining from a growth rate that has topped 100 percent in recent years. Meanwhile, the Detroit-based supplier, Metaldyne, will also proceed with plans to set up as many as five joint ventures and wholly-owned operations in
Casesa: Good News, Bad News
"I do think the worst is over for pricing," said MBS regular John Casesa, the lead auto analyst at Merrill Lynch. The
If you want to see which manufacturer is likely to do well, check the age of its average vehicle, suggested Casesa. "Those companies with older products, like General Motors, have tended to lose volume. Those with newer-than-average products, like the Koreans, tended to gain share." That message hasn't been lost on automakers, who are flooding the market with new cars and trucks. Until recently, Casesa pointed out, about one in seven vehicles were new in any given year. Now it's approaching one in five. "So it will be even harder for those who "are having a tough time catching up with the mean." The Merrill Lynch analyst specifically pointed to Ford, which despite several new products, now has the oldest fleet among major automakers, and will likely face problems with market share as a result.
One For the Sopranos?
As it prepares to launch its new Five Hundred sedan, Ford is heavily promoting the car's roomy interior, as well as its massive cargo capacity. "The trunk can fit eight golf bags," noted Ford President Jim Padilla, "or, if you are from
FROM THE SOURCE headlines from the latest press releases
Car enthusiasts, collectors, and race fans can look forward to spending this Labor Day weekend with some of the most significant racing and classic cars in the world. This world-class collection of historic cars, including Robert Rauschenberg's BMW "Art Car" will be the center of attention at the Rolex Vintage Festival Presented by BMW, which takes place at
|American Axle & Mfr. Holdings Inc.||AXL||34.35|
|Ballard Power Systems Inc.||BLDP||7.07|
|Collins & Aikman Corporation||CKC||5.10|
|DaimlerChrysler AG (ADR)||DCX||44.89|
|Dura Automotive Systems||DRRA||9.15|
|Ford Motor Company||F||14.72|
|General Motors Corporation||GM||43.14|
|Goodyear Tire & Rubber||GT||10.95|
|Honda Motor Co. Ltd. (ADR)||HMC||24.27|
|Johnson Controls Inc.||JCI||56.45|
|Magna International Inc.||MGA||80.50|
|Nissan Motor Co. Ltd. (ADR)||NSANY||21.44|
|Sonic Automotive Inc.||SAH||22.35|
|Sirius Satellite Radio||SIRI||2.51|
|Toyota Motor Corporation (ADR)||TM||80.00|
|TRW Automotive Holdings||TRW||20.80|
|Tower Automotive Inc.||TWR||3.15|
|United Auto Group Inc.||UAG||27.44|
|XM Satellite Radio Hold.||XMSR||26.37|