Tag Archives: General Motors Co

License Fee Threatens China Car Sales

By 24/7 Wall St.

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Most large global car companies still believe that China will not only remain the world’s largest car market, but also will be one of the fastest growing. But growth there has been unimpressive recently, and taxes imposed by the government on auto licenses may make that problem worse, damaging efforts by manufacturers who have increased investment in the People’s Republic.

March is usually a good month for car sales in China. However, sales rose only 11% to 2.01 million. That is down from a rate of 20% improvement in the first two months, according to The Wall Street Journal. And these low double-digit percentage numbers come after an anemic 2012.

The investments in China made by large car companies must be relying on the 20% number more than on 2012 growth rates, because they are so large in dollar terms. This is particularly true of America manufacturers. A year ago, Ford Motor Co. (NYSE: F) said it would invest $760 million in its operations in the People’s Republic. The money will go into a new plant in Hangzhou, set with its joint venture Changan Ford Mazda Automobile. And Bloomberg said of the investment in China by General Motors Co. (NYSE: GM):

GM‘s announcement at the Shanghai auto show this month that it is spending $11 billion by 2016 on new plants, products and people in China demonstrates a change in priorities. GM is investing $1.5 billion in North America this year, where it has a more modest factory footprint.

For the past two years, the primary concern about the growth of car sales in China has been based on whether its economy would slow, and its large middle class would move to its traditional habit of saving instead of consumer spending. As it turns out, that is not the most significant threat. Pollution is. And the People’s Republic has decided to attack the problem in part by high car license fees, most analysts believe. BusinessWeek reports on the cost of license plates in China:

Shanghai is one of four Chinese cities that limit car purchases by imposing quotas on registrations. The prices paid at Shanghai’s license auctions in recent months — 90,000 yuan ($14,530) — have exceeded the cost of many entry-level cars, the stronghold of Chinese brands such as Chery, Geely, and Great Wall. While residents with modest incomes may be able to afford an inexpensive car, the registration cost is often beyond their reach.

It is too early to know exactly what effect these license fees will have on sales, or whether they will be imposed more broadly. No matter what the reason, these new, high fees could scuttle the hopes that car sales in China will make it the Holy Grail for the industry.

Filed under: 24/7 Wall St. Wire, Autos, China Tagged: F, featured, GM

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Source: FULL ARTICLE at DailyFinance

Even Tesla Is Outselling the Chevy Volt

By John Rosevear, The Motley Fool

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The Chevy Volt has been on the market for more than two years now, but sales still have yet to live up to expectations. Photo credit: General Motors Co.

It’s true: Punchy start-up Tesla Motors is already outselling the much-hyped Chevy Volt.

Earlier this month, Tesla said it had exceeded its own first-quarter sales target, delivering “at least 4,750” examples of its all-electric Model S luxury sedan to customers.

Contrast that with General Motors , which sold 4,421 of its plug-in hybrid Volts in North America during the first quarter, according to a Bloomberg report. Nissan‘s electric Leaf took third place in the plug-in rankings with 3,695 sales.

That’s a great story for Tesla, which is succeeding with its sleek and powerful (and expensive) electric coupe against considerable odds. But what does it say about GM? Is it time for the Volt to be grounded?

A green-car darling that hasn’t found a big market
The Volt was supposed to be the new face of post-bailout GM. One of the few major product-development programs that GM kept funding through its own financial crisis in 2008 and 2009, the Volt was the high-tech green darling that, in some minds, was supposed to justify the Obama administration’s decision to bail out Detroit’s largest automaker.

The Volt’s sluggish sales have led to a lot of politically charged hot air since. But beyond the squabbling, the Volt — which is essentially an electric car with an onboard gas-powered generator to keep it charged — is a pretty nice product that works as advertised. Every Volt owner I’ve ever talked to says he or she loves the car, without hesitation. It’s well built and lives up to GM‘s claims.

But it has never sold in the numbers that GM hoped for when it launched the innovative plug-in hybrid late in 2010. GM hoped to sell 10,000 Volts in 2011, its first full year on sale — but managed to move only 7,671.

At the time, GM officials said they weren’t disappointed, that they were still building “awareness” of the Volt’s virtues — and announced a plan to make 45,000 Volts for the U.S. in 2012.

That didn’t happen, either. Not even close. In fact, it only took until March for GM to halt the Volt’s production line, saying that it was “matching supply to demand.” Last year’s U.S. Volt sales totaled 23,461 — a great increase over 2011, but not anywhere near enough to live up to CEO Dan Akerson’s hopes for the model.

Volt sales so far are running a bit ahead of last year’s pace in the U.S., up 8.4%. That’s a decent increase, a little ahead of the overall U.S. market‘s 6.4% gain through March, but it’s not setting the world on fire.

Is it time for GM to pull the Volt’s plug?

GM is about to double down on the Volt idea
GM certainly doesn’t seem to think so.

Source: FULL ARTICLE at DailyFinance

Europe Car Sales Drop 10.2%: GM Must Exit

By 24/7 Wall St.

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Car sales in Europe dropped 10.2% in March, according to the European Automotive Manufacturers’ Association (ACEA). The news not only shows how unlikely it is local car companies can rebound during the European recession, it also signals that revenue and profits from the region will cripple global earnings at General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F). GM continues to say it will keep operations in the region, though that becomes less practical by the month.

The specifics of the report on car sales in Europe showed a market falling relentlessly:

In March, demand for new passenger cars was on the decline for the 18th consecutive month, totaling 1,307,107 units. Over the first quarter of 2013, new car registrations amounted to 2,989,486 units, or 9.8% less than in the first three months of 2012.

The shocking news from the release was the slide in German car sales, which reached 17.1% in Germany, the region’s largest area market, which produced 281.184 unit sales last month. Germany is not only the home market for BWM, Mercedes and Volkswagen. It is also the core market for the largest and second largest U.S. car markers. The largest country in Europe by gross domestic product was supposed to dodge the EU recession. Car sales in Europe show that has not happened entirely.

GM and Ford’s European sales dropped more rapidly than the overall market. Sales of GM owned brands – particularly Vauxhaul and Opel – were down 12.6% to 110,800. Ford sales fell 15.8% to 107,954.

GM has lost money in Europe since 1999, a period over which red ink has totaled $18 billion. Last year, its pretax loss in the region was $1.8 billion, which sharply eroded global results. Ford’s European loss was $1.73 billion last year.

The industry’s focus about Europe continues to be on GM. Its management still insists that the market can be turned around. All the while, the company suffers double-digit sales losses. Worse, theses losses – both financially and in market share – are in a region in which the total industry is shrinking.

GM management believes that it cannot be a global company without significant presence in China, the United States and Europe. However, the plan breaks down badly where Europe is concerned. GM cannot offer any evidence that losses will not continue for years, or even longer. The idea of a three-legged global approach does not work when one leg is irreversibly broken.

GM needs to do what seemed inevitable a very few years ago. It needs to leave the European market to European car companies, many of which also lose money. They do, however, control the region, based on market share.

One method used by car companies to stem losses is the same as in most other industries – cut costs. However, powerful labor unions and local governments have leverage to prevent or slow such actions by GM. An orderly exit from Europe might convince these parties to change their stances. Nothing short of that will cause

From: http://www.dailyfinance.com/2013/04/17/europe-car-sales-drop-10-2-gm-must-exit/

Cars Powered by Cheap, Safe Batteries Likely Years Away

By Reuters

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By Deepa Seetharaman

TROY, Michigan — For nearly two years, a team of former Chevrolet Volt and Toyota Prius engineers has been working on the next big thing in electric cars: the latest version of the 154-year-old lead-acid battery.

Their aim is to build a battery strong enough to power a wider range of vehicles, something they think the current cutting-edge technology — lithium ion — can’t do cheaply, particularly given recent safety scares.

The focus of Energy Power Systems on a technology older than the automobile itself illustrates the difficulty with lithium-ion batteries. While widely used in everything from laptops to electric cars and satellites, a number of high-profile incidents involving smoke and fire have been a reminder of the risks and given them an image problem.

The overheating of the batteries on two of Boeing’s high-tech 787 Dreamliners, which prompted regulators to ground the aircraft, served to underline the concerns and forced the plane maker to redesign the battery system. Indeed, a growing number of engineers now say the lithium-ion battery revolution has stalled, undercut by high costs, technical complexity and safety concerns.

“Smart people have been working on this for 10 years already and no one is close to a new kind of battery,” said Fred Schlachter, a lithium-ion battery expert and retired physicist from the U.S.-funded Lawrence Berkeley National Laboratory.

Many experts now believe it will take at least another decade for lithium-ion technology to be ready for widespread adoption in transportation. Others, including Toyota Motor Corp. (TM), believe the solution lies beyond lithium-ion.

Interviews with two dozen battery executives, experts and researchers, including the founder of Securaplane, which made Boeing’s battery charger, reveal an industry in which some are having second thoughts about using lithium-ion, and are instead looking to enhance previous technologies or to leap ahead.

These people say expectations were set too high, too fast. People projected that “clean technology” batteries would shrink in size and weight at the speed of the microchip revolution. That hasn’t happened, and Schlachter says it won’t any time soon. “We’re not going to see a different chemistry, unless we’re very lucky, for decades.”

Just as recent developments in technology have allowed cars to improve their mileage using traditional engines, the lead-acid battery research is aiming for improved power in a smaller package.

Beyond Lithium-Ion

Lithium-ion supporters, including Boeing Co. (BA), Tesla Motors Co. (TSLA) and General Motors Co. (GM), maker of the Volt, say they can make the batteries safe, and problems with new technologies are to be expected.

GM overcame an early problem when a Volt caught fire during tests run by the U.S. National Highway Transportation Safety Administration, for instance, and after all,

From: http://www.dailyfinance.com/2013/04/16/cheap-safe-battery-power-cars-years-away/

Media Digest (4/15/2013) Reuters, WSJ, NYT, FT, Bloomberg

By 24/7 Wall St.

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Wells Fargo & Co. (NYSE: WFC) cuts the number of outside investment managers that its brokers can offer to clients. (Reuters)

Thermo Fisher Scientific Inc. (NYSE: TMO) is likely to pay $13 billion to buy Life Technologies Corp. (NASDAQ: LIFE). (Reuters)

Foxconn adds workers in preparation for production of the new Apple Inc. (NASDAQ: AAPL) iPhone. (WSJ)

The FAA orders inspections of about 1,000 Boeing Co. (NYSE: BA) 737s. (WSJ)

Microsoft Corp. (NASDAQ: MSFT) probably produces a new touch smartphone type watch. (WSJ)

Verizon Wireless pushes out the number of months subscribers need to wait for phone upgrades from 20 months to 24. (WSJ)

McDonald’s Corp. (NYSE: MCD) presses value of its products to customers to help same-store sales. (WSJ)

Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) will produce new transmissions together. (WSJ)

Google Inc. (NASDAQ: GOOG) agrees to search restrictions to settle antitrust claims by the European Commission. (NYT)

The ability of big companies to save money on manufacturing overseas helps offset a weak U.S. economy. (NYT)

A study by Brookings and the Financial Times shows the global economy is not improving. (FT)

India’s inflation drops to a 40-month low at 5.96% in March. (Bloomberg)

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, BA, F, GM, GOOG, LIFE, MCD, MSFT, TMO, WFC

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From: http://www.dailyfinance.com/2013/04/15/media-digest-4152013-reuters-wsj-nyt-ft-bloomberg/

Why GM Re-Friended Facebook

By John Rosevear, The Motley Fool

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A 2013 Chevrolet Sonic. GM is testing ads for the Sonic on Facebook. Photo credit: General Motors Co.

Did General Motors just re-friend Facebook ?

Yes, it did. Almost a year after GM dumped Facebook in a move that rocked the advertising world, the social media firm has won back the Detroit auto giant as an advertiser.

GM said this week that it is running test ads for its Chevrolet Sonic small car on Facebook, and Facebook confirmed that GM had returned as an advertiser on the giant social-media service.

Clearly this is a plum for Facebook. But what does it mean for GM?

The Facebook break-up was just one strange move in a series
GM was spending $10 million a year on Facebook ads when its former chief marketing officer, Joel Ewanick, pulled the account last May. That was just one of several controversial moves the colorful Ewanick made during his tenure at General Motors, which ended when he was abruptly fired (on a Sunday, no less) by CEO Dan Akerson last July.

Ewanick had seemingly done a lot of good for the General, making moves to consolidate GM‘s global marketing efforts that were expected to save the company $2 billion over five years. But he had also rubbed a lot of people the wrong way, both inside and outside the company.

Strange moves, like his decision to punt on GM’s traditional Super Bowl ad effort, and the Facebook break-up, didn’t help his cause. While officially, Ewanick was fired for mis-handling the financial details of a sponsorship deal with a European soccer team, there was a sense at the time that frustration with GM’s lackluster U.S. sales was a big driver of Akerson’s decision.

And since his departure, slowly but surely, many of the changes he made have been unwound. GM ran ads in the most recent Super Bowl, it has reversed some of Ewanick’s changes to its longtime ad agency structure, and now it’s going back to Facebook.

So is this a big deal?

GM needs to be on Facebook
The decision to go back to advertising on Facebook is unlikely to be a big deal for GM, financially speaking. GM is one of the world’s largest buyers of advertising, with an annual budget that runs well over $4 billion. The $10 million that GM was spending annually with Facebook before Ewanick dumped the social-media firm was a relative drop in GM‘s global advertising bucket.

GM‘s return is clearly a big deal for Facebook, which wants badly to be taken seriously by consumer marketing heavyweights like GM. Facebook says that had been trying to win back GM as an advertiser ever since the breakup. But is it a big deal for GM in terms of marketing impact?

It’s not on the scale of a great Super Bowl ad, but it might

From: http://www.dailyfinance.com/2013/04/11/why-gm-re-friended-facebook/

Is GM Pouring Good Money After Bad in Europe?

By John Rosevear, The Motley Fool

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General Motors CEO Dan Akerson speaks to reporters at Opel headquarters in Germany on Wednesday. Photo source: General Motors Co.

Yes, General Motors is serious about Europe.

That was the message that CEO Dan Akerson sought to convey on Wednesday, when he told reporters in Germany that GM would invest 4 billion euros ($5.2 billion) in its European operations through 2016.

Much of that money will be spent on GM‘s long-troubled German subsidiary, Opel, which has lost billions in recent years. Is this a case of GM throwing good money after bad?

A massive money pit for GM
Ever since GM‘s board called off the sale of Opel in 2010, the Detroit giant has been trying to get its German unit back to profitability. But it has been a challenge: GM‘s European operation, which is mostly Opel, has lost $18 billion since 1999 – and will likely lose another $2 billion or so in 2013.

For much of that time, Opel’s problems have looked familiar to longtime Detroit-watchers: Too many factories, too-rich labor deals, too-clueless management, and not enough cars being sold to support the business. Those problems were greatly exacerbated when Europe‘s auto sales declined greatly after the economic crisis.

But at the same time, Opel is a key part of GM‘s global operation. It doesn’t just deliver critical economies of scale, it also serves as a center of engineering talent. Several of GM‘s recent models were engineered all or in part in Europe.

That meant that Opel needed to be saved. Late in 2011, Akerson got series about overhauling GM Europe. He made a series of sweeping changes, including putting his top lieutenants on Opel’s board and putting his right-hand man, GM Vice Chairman Steve Girsky, in charge of returning GM Europe to profitability.

Are those efforts bearing fruit? Not yet. But there are some promising signs.

A back-and-forth march making slow progress in the right direction
Girsky’s effort has been marked by some seemingly strange decisions and stop-start actions, leading to much skepticism among analysts and industry observers (including your humble Fool). But it has become clear recently that GM really has made some progress in getting its European act together.

Opel has a new CEO, Karl-Thomas Neumann, who used to run Volkswagen‘s successful (and huge) China business. Its management ranks have been overhauled and streamlined. A deal has been cut with Opel’s contentious German union that should lead to a much-needed factory closing next year.

And now Opel will be getting a big vote of confidence from its corporate parent. Akerson said on Wednesday that GM would spend those 4 billion euros on a bunch of new products for Europe – 23 new vehicles and 16 new engines. By overhauling and expanding Opel’s product line, and the Chevy and Cadillac models it sells in the region, GM hopes to capture a greater

From: http://www.dailyfinance.com/2013/04/11/is-gm-pouring-good-money-after-bad-in-europe/

Will the Impala Be the Hit That GM Needs?

By John Rosevear, The Motley Fool

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2014 Chevrolet Impala LTZ. Photo credit: General Motors Co.

General Motors is in the midst of a push to introduce a slew of new products in the U.S. over the next couple of years. The latest entry: an all-new Chevrolet Impala sedan.

It’s a critical moment for GM. This batch of new cars and trucks are the first fruits of its new product development system, which was overhauled in the wake of the company’s 2009 bankruptcy and restructuring.

Some of the first to emerge have been really good, like the Cadillac ATS sedan that was launched last year to strong reviews. But what the new improved GM hasn’t really had – yet – is a bona-fide mass-market hit product.

Is the new Chevy Impala the car that will change that?

A sharp replacement for a very tired old model
Monday marked the official beginning of production of the all-new 2014 Impala, which will begin appearing at dealers later this spring. With sharp, assertive styling and an elegant interior, it looks to be a huge improvement over its predecessor.

It had better be. That predecessor is one of GM‘s oldest models, a car that has sold mostly to rental-car fleets in recent years. About 70% of the outgoing Impala’s sales were to fleets, GM officials have said, with just 30% to retail buyers.

GM is hoping that the new Impala will reverse that trend, because retail sales are far more profitable than sales to rental-car companies. Certainly the new Impala looks like a strong entry – but GM‘s recent track record with mainstream sedans is a mixed one.

The Malibu didn’t impress, but the Impala must
The Impala’s smaller sibling, the midsized Chevy Malibu sedan introduced last year, hasn’t exactly set the sales charts on fire. While it looked like a solid contender on paper, reviews have been mixed – and its sales numbers haven’t been close to those of the cars that lead its segment.

In truth, the Malibu looks like something of a halfhearted effort when compared with rivals like Ford‘s striking new Fusion, not to mention Toyota‘s class-leading Camry, which is selling at about twice the Malibu’s pace.

The Impala has to do better than that. For years, GM got along with models that were just “good enough”, and paid the price when its profits were eroded by the heavy discounts it needed to keep sales going. If post-bailout GM is really going to realize its potential, its new products – all of them – have to be at least as good as the best in their classes.

For the Impala, that’s a tall order. The two cars that dominate the full-sized sedan segment, the Ford Taurus and Toyota Avalon, are both polished, popular entries. The Impala will have to be very good to draw buyers.

For GM, the good news is that early reviews on its …read more

Source: FULL ARTICLE at DailyFinance

GM Plans to Invest $332 Million in 4 U.S. Factories

By The Associated Press

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DETROIT — General Motors plans to invest $332 million into four factories in three Great Lakes states to build new, more efficient engines and transmissions.

The spending at plants in Toledo, Ohio; Bedford, Ind.; and Flint and Bay City, Mich., will allow the company to build a new V-6 engine, a new small motor and new eight-speed automatic transmissions, GM said Thursday. The company also added $46 million to a prior investment at plants in Romulus and Saginaw, Mich., to build the new V-6.

No jobs will be added, but General Motors Co. (GM) said the investments preserve 1,650 jobs at the six factories.

The investment also will help GM build more six-speed automatic transmissions as auto sales continue to rise in the U.S. Sales this year are expected to climb as high as 15.5 million cars and trucks, 1 million more than last year. Through March, GM sales are up just over 9 percent.

GM wouldn’t give details about the new engines and transmissions, nor would it say what cars and trucks would get the new powertrains. It also wouldn’t say exactly when they would be available, for fear of tipping competitors to its product plans.

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The company did say that the money will help start a new family of three- and four-cylinder engines that range from 1 liter to 1.5 liters. Presently the smallest motor GM makes in the U.S. is a turbocharged 1.4-liter four-cylinder that goes into the Chevrolet Cruze and Sonic, as well as other models.

Last summer CEO Dan Akerson told employees that the company was behind its competitors in engines and transmissions, saying that GM has six-speed transmissions when competitors have up to 10 gears. Transmissions with more gears allow engines to do less work and save fuel.

The investments announced Thursday should improve GM‘s technology in relation to its competitors, said Arvin Jones, GM North America manufacturing manager. “We think the investments we’re making will give us a competitive advantage and position us very well,” he told reporters.

The investments are part of $1.5 billion that GM plans to spend on its North American factories this year. So far the company has announced projects totaling $1.2 billion in the U.S. Another $250 million was announced for a GM assembly plant in Ingersoll, Canada.

The investments announced Thursday include:

  • $215 million for the Flint Engine Operations in Flint, Mich., where the new three- and four-cylinder engines will be built. The plant also will get upgraded machinery for a V-6 engine that it currently builds.
  • $55.7 million for Toledo Transmission Operations in Toledo, Ohio, to build a new eight-speed transmission and expand capacity to build an existing six-speed transmission. The new transmission will be used in “numerous” GM vehicles by the end of 2016, the company said in a statement.
  • $31.7 …read more

    Source: FULL ARTICLE at DailyFinance

Housing Recovery Helps Boost March Auto Sales

By Reuters

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Nati Harnik/AP

By Ben Klayman and Deepa Seetharaman

DETROIT — U.S. sales of sport-utility vehicles and pickup trucks jumped in March, spurred by rising home prices and an increase in housing construction, major automakers said on Tuesday.

The performance of SUVs and trucks outpaced gains in the broader U.S. auto market, but March is still expected to be the fifth straight month that the auto industry’s annual sales pace will be above 15 million vehicles.

General Motors Co. (GM) said the stronger housing market helped its sales to small businesses climb by nearly a third. The largest U.S. automaker also posted a 31 percent sales gain in crossovers vehicles, such as the Chevrolet Traverse, while its overall sales were up 6.4 percent.

Ford Motor Co. (F), the No. 2 U.S. automaker, posted a 16.3 percent rise in sales of its F-Series pickup trucks and a 15.4 percent spike in sales of SUVs, such as the Escape.

“The housing sector recovery is in full swing,” Ford economist Jenny Lin told reporters and analysts.

The U.S. housing sector is starting to contribute to growth after years of dragging down the broader economy. Rising home values are helping U.S. consumers feel more confident about buying a new vehicle, GM and Ford executives said.

Home prices in 20 metropolitan areas rose 8.1 percent in January from a year earlier, the biggest 12-month rise since June 2006. Meanwhile, U.S. home builders are breaking ground on more new houses this year, boosting sales of pickup trucks.

In about a month, GM will launch two new truck models, the 2014 Chevrolet Silverado and GMC Sierra. Ford is planning an overhaul of its F-150 next year.

Executives said pent-up demand also continued to fuel sales gains in March. The average age of vehicles on U.S. roads is more than 11 years, an all-time high, and many consumers can no longer put off buying a replacement.

“The economic picture looks pretty similar to the last couple of months, which helps explain why the industry has stayed in a relatively healthy range,” Kurt McNeil, head of GM‘s U.S. sales operations, said during a conference call.

“Business spending has picked up and pent-up demand for vehicles is offsetting any drag from tax or federal spending issues,” he added.

Ford Beats, GM Misses

Auto sales each month are an early indicator of economic health. The auto industry is in the midst of its fourth year of recovery from an economic downturn that pushed GM and Chrysler into bankruptcy in 2009.

Analysts polled by Thomson Reuters were expecting an annual sales rate of 15.3 million vehicles in March. GM estimated the rate would come in around 15.2 million.

GM‘s results fell short of the estimates of at least three …read more
Source: FULL ARTICLE at DailyFinance

Automakers Expected to Report Highest U.S. Sales Since 2007

By The Associated Press

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Stan Honda/AFP/Getty Images General Motors’ 2014 Chevrolet Corvette Stingray convertible on display at the New York auto show, which runs through April 7. Consumer interest in new cars has grown as the economy has slowly improved, fueling expectations of higher sales in March.


DETROIT — U.S. car and truck sales are expected to hit their highest level in nearly six years in March, as buyers armed with tax refund checks were lured by flashy new vehicles and low interest rates.

Auto companies release U.S. sales figures Tuesday.

Analysts predict total sales of nearly 1.5 million cars and trucks, a number not seen since May 2007. That’s almost double the 855,000 vehicles sold in March 2009, the low point for sales during the economic downturn, according to Ward’s AutoInfoBank. Sales are expected to be up 3 to 5 percent over last March.

Alec Gutierrez, a senior market analyst with the car pricing company Kelley Blue Book, said the improving job market is boosting sales. The number of Americans seeking unemployment benefits fell to a five-year low during March. Low interest rates are also making new-car purchases more appealing, Gutierrez said. The average rate for a 60-month new-car loan is now 4.12 percent, down from 4.52 percent at this time last year, according to Bankrate.com.

And Gutierrez says tax refunds can also spur purchases. The average federal tax refund this year is nearly $3,000, or enough to cover the down payment on a three-year lease of a Toyota Camry hybrid or a BMW 3-Series sedan.

Full-size pickup truck sales are expected to rise nearly 15 percent in March, following big gains in February, Kelley Blue Book said. Construction companies are rapidly replacing their truck fleets as the economy improves and they win more business.

Gutierrez said incentive deals — such as the $7,500 cash back now offered for the Chevrolet Silverado pickup — are helping truck sales, and should continue for a while. General Motors Co. (Ford Motor Co. (GM wants to clear out older models before introducing its new Chevrolet Silverado in a few months.

"Consumers looking for a new pickup truck should not hesitate to pull the trigger," he said.

Crossovers are also gaining, thanks to redesigned models like the Ford Escape and Toyota RAV4. Small cars are down slightly, in part because gas prices are relatively low. Gas averaged $3.64 per gallon at the end of March, down from $3.78 at the end of February and $3.91 in March of 2012, according to AAA.

Honda Motor Co.'s (HMC) sales gain should be among the best for March. Sales rose nearly 9 percent, according ...read more
Source: FULL ARTICLE at DailyFinance

GM Recalls 34,000 Vehicles for Transmission Problems

By The Associated Press

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Andrew Burton/Getty Images The 2013 Cadillac SRX on display at the New York auto show last year. The SRX is among two vehicles General Motors recalled Wednesday for transmission problems.

DETROIT — General Motors is recalling nearly 34,000 Buicks and Cadillacs in the U.S., Canada and elsewhere to fix a problem with the automatic transmissions.

The recall affects Buick LaCrosse full-size cars and Cadillac SRX crossover SUVs from the 2013 model year. The company says a software problem can cause transmissions to unexpectedly shift into sport mode. That can override any slowing effect from the transmission, increasing the risk of a crash.

General Motors Co. (GM) says no crashes or injuries have been reported. GM will reprogram the transmission at no cost to the owners. The recall is expected to start March 28.

The Buicks were built from April 25, 2012 through March 6, 2013. The Cadillacs were built from May 29, 2012 through Feb. 18, 2013.

Most of the cars and SUVs, about 27,000, were sold in the U.S., with another 1,300 sold in Canada. The rest were sold in Mexico and exported to other parts of the world, GM said.

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Source: FULL ARTICLE at DailyFinance

What Does a Car Recall in China Mean for VW?

By 24/7 Wall St.


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Volkswagen has recalled 384,181 cars in China, including Golf, Magotan, Sagitar and Audi A3 models. Bloomberg reports that the cost of this action to VW will be more than $600 million. The more important issue is whether recalls in China harm car manufacturer reputations as much as they can in more established markets like the United States. If so, VW has a problem much larger than a financial one.

Volkswagen and General Motors Co. (NYSE: GM) have held on as the top car makers in China by sales. Those positions are under assault by other large multinational manufacturers, particularly Ford Motor Co. (NYSE: F), Toyota Motor Corp. (NYSE: TM) and Nissan. The strength and breadth of this competition may allow the newcomers to rattle VW sales, if each company can trumpet its quality compared to VW. That only works until one or more of these car companies has a product recall of its own.

The likelihood of product recalls in any market and of any model may be what helps VW in China in the long term. For now, the recall of nearly 400,000 vehicles is unmistakably a blow to the German company. But the moment GM or Toyota have recall problems, VW‘s will be pushed further back in the memories of buyers.

The slew of other large companies that sell cars in China, which has been swelled by local firms as well as those from outside the People’s Republic, will have recalls. Based on the past four decades of recalls in the United States, every manufacturer will be hit eventually. The probable quality problems with all of these means VW‘s recall will be all but forgotten fairly soon.

Filed under: 24/7 Wall St. Wire, Autos, China Tagged: F, featured, GM, TM

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Source: FULL ARTICLE at DailyFinance

Europe Car Sales Spell Doom for GM

By 24/7 Wall St.


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New car sales research from Europe shows that General Motors Co.’s (NYSE: GM) fortunes in the region have gotten much worse. Its decade-old string of losses is guaranteed to continue. Whatever car analysts believed in the past (and many believed GM‘s efforts in the region have been shattered for some time), the largest U.S. car company has reached the point where it is impossible to recover.

The February data for Europe car sales show a drop of 10.5%, compared with the same period a year ago. This is the lowest level since the European Automobile Manufacturers Association (ACEA) began to keep figures. February sales of cars and light trucks in the European Union dropped to 795,482.

GM‘s numbers were much worse when put against the regional average, which means it also has fallen further behind the market leaders. GM‘s total sales dropped 20.6% year-over-year to 57,410 in February. Its market share dropped from 8.1% to 7.2% for the same period.

The major nemesis to all manufacturers that do business in Europe is Volkswagen — not only the largest company in the region by sales, but one that continues to gain market share. VW‘s sales dropped 7.4% in February over the same month a year ago to 195,608, but its market share rose from 23.8% to 24.6%. VW remains more dominant in its home market than GM is in the United States.

A number of other modest-sized companies in the market also outpaced GM. Among these were BMW, which has 5.8% of the market, Daimler, which has 5.3%, Toyota Motor Corp. (NYSE: TM), which has 4.1%, and Hyundai, which has 3.9%. All of these are above their market share in February 2012. The Asia manufacturers have successfully pushed into the market, while the local luxury car companies continue to add to their edges.

In Europe, GM is boxed in among a larger competitor, Asian firms and the luxury end of the market. There is no reason to believe that these trends will end.

If GM was at a tipping point in Europe, as management tries to turn the operation around, that operation is now officially doomed.

Filed under: 24/7 Wall St. Wire, Autos, International Markets Tagged: GM, TM

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Source: FULL ARTICLE at DailyFinance

Volkswagen to Increase Production in China by 60%

By 24/7 Wall St.


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Volkswagen is already at the top of the auto sales food chain in China, tied most months with General Motors Co. (NYSE: GM). But despite a flattening in growth in Chinese car sales, as well as a threat the government will curtail car use because of inflation, Volkswagen says it will increase production in the People’s Republic. Volkswagen must also think its can increase or at least hold its market share as competition from other multinational manufacturers and local companies rises.

According to Bloomberg:

Volkswagen AG (VOW), Europe‘s largest automaker, plans to increase production 60 percent by 2018 in China, where the German company’s earnings last year surged by almost half.

A new plant in China approved by the supervisory board will build as many as 300,000 vehicles yearly and will start operating in early 2016, Chief Executive Officer Martin Winterkorn said today. Capacity in China will rise to 4 million vehicles a year by 2018 from about 2.5 million currently.

Filed under: 24/7 Wall St. Wire, Autos, China Tagged: GM

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Source: FULL ARTICLE at DailyFinance

What's Important in the Financial World (3/14/2013)

By 24/7 Wall St.


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Apple on the Defensive

Today is the day. Samsung will release its so-called iPhone killer, the Galaxy S IV. Many experts believe that the product’s new features will make it a challenge to Apple Inc. (NASDAQ: AAPL). Some even believe it could outsell the iPhone this year. Oddly, one of Apple’s top executives decided the day of the launch was a good time to deride Samsung. In an interview with The Wall Street Journal:

Apple marketing chief Phil Schiller on Wednesday played down the expected competition from the device. He also discussed how he believes products that run Google Inc.’s Android software, such as Samsung’s phone, are inferior to Apple’s iPhone.

Mr. Schiller shared data on the iPhone’s popularity and said Apple’s own research shows that four times as many iPhone users switched from an Android phone than to an Android phone in the fourth quarter.

To show some guts, Schiller should have held his fire until the release of the next generation iPhone.

Modern Parenthood

American fathers have been saddled with additional domestic chores, according to Pew Research. This compares to five decades ago when they could come home from work, have a martini, read the paper and tell their children to shut up. Pew reports:

The way mothers and fathers spend their time has changed dramatically in the past half century. Dads are doing more housework and child care; moms more paid work outside the home. Neither has overtaken the other in their “traditional” realms, but their roles are converging, according to a new Pew Research Center analysis of long-term data on time use.

At the same time, roughly equal shares of working mothers and fathers report in a new Pew Research Center survey feeling stressed about juggling work and family life: 56% of working moms and 50% of working dads say they find it very or somewhat difficult to balance these responsibilities.

The martini cocktail hour was never that stressful.

Volkswagen Clings to China

Volkswagen is already at the top of the auto sales food chain in China, tied most months with General Motors Co. (NYSE: GM). Despite a flattening in growth in Chinese car sales and a threat the government will curtail car use because of inflation, Volkswagen will increase production in the People’s Republic. Volkswagen must also think its can increase or at least hold its market share as competition from other multinational manufacturers and local companies rises. According to Bloomberg:

Volkswagen AG (VOW), Europe‘s largest automaker, plans to increase production 60 percent by 2018 in China, where the German company’s earnings last year surged by almost half.

A new plant in China approved by the supervisory board will build as many as 300,000 vehicles yearly and will start operating in early 2016, Chief Executive Officer Martin Winterkorn said today. Capacity in China will rise to 4 million vehicles a year by 2018 from about 2.5 million currently.

Filed under: 24/7 Wall St. Wire, Market Open Tagged: AAPL, GM

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Source: FULL ARTICLE at DailyFinance

What's Important in the Financial World (3/12/2013)

By 24/7 Wall St.

Sports Equipment

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The U.K. Probes HP

The never-ending battle over the Hewlett-Packard Co. (NYSE: HPQ) buyout of Autonomy continues. HP took a $5 billion write-off less than a year after the deal. It seems that the big company was duped by Autonomy’s financial claims, or so it says. Now, the United Kingdom has decided that it should weigh in. According to the BBC:

The UK‘s Serious Fraud Office (SFO) is investigating the sale of technology firm Autonomy to Hewlett Packard, according to a filing from HP.

It joins the US Department of Justice and the UK accounting regulator in questioning the firm.

A number of investors and due diligence experts believe that some fault sits with HP management and its board. The company engaged investment banks and auditors to review the numbers. Certainly, with so much money involved, it would be prudent to make a meticulous evaluation. HP clearly did not. Now it has to rely on regulators, and probably the court system, to clean up the mess.

Treasury Sells GM Shares

The Treasury Department continues to dump massive numbers of shares in General Motors Co. (NYSE: GM), either because it wants to show it can get some taxpayer money back from its bailout of the largest American car maker, or its does not like the firm’s future prospects. Certainly GM‘s years of losses in Europe may be a trigger for Treasury’s concerns. In its monthly TARP Report to Congress, the Treasury Department reported:

In February, Treasury’s brokers for GM stock sales informed Treasury that they had engaged six smaller broker dealers, including minority and women owned broker dealers, assist with Treasury’s sales of its GM common stock.

In February 2013, Treasury received total net proceeds of approximately $489.9 million from the sales of GM common stock To date, Treasury has recovered approximately $ 29.8 billion of its investment in GM through repayments, sales of stock, dividends, interest, and other income

Lenovo Sniffs Around BlackBerry

Lenovo, the Chinese PC maker, is once again hinting it might like to own BlackBerry. Given the battered Canadian company’s results, it is hard to see the appeal. But Lenovo has no real spot in the smartphone market, which is a vulnerability as it ponders the shift of consumer buying activity from personal computers to handheld devices. Lenovo may believe it needs to take a long shot. According to EWeek:

Lenovo, which offers Android-based smartphones, may be in the market for the troubled device maker, according to Lenovo’s CEO. Lenovo executives, less than two months after disavowing rumors that they were interested in buying struggling smartphone maker BlackBerry, reportedly are again raising that possibility.

Lenovo CEO Yang Yuanqing told a French financial newspaper in an interview that was published March 11 that a deal for BlackBerry “could possibility make sense,” though he would first have to assess the market and BlackBerry’s standing in it.

Filed under: 24/7 Wall St. Wire, Market Open Tagged: HPQ

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Source: FULL ARTICLE at DailyFinance

The Hyundai Car Brands Wither

By 24/7 Wall St.


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Market penetration and bad PR have taken down Hyundai and stablemate Kia, which until recently were the hottest brands in the U.S. market. As sales of competitors rise, the two manufactures will find it nearly impossible to keep pace. Their reigns as the darlings of the American car industry are over.

Hyundai sales rose only 2.3% to 96,024 in the first two months of this year, compared to an overall industry increase of 8.4%. Kia sales dropped 3.4% to 77,807 in the same period.

By contrast, sales of the industry leaders — General Motors Co. (NYSE: GM), Toyota Motor Corp. (NYSE: TM) and Ford Motor Co. (NYSE: F) — all rose in the double digits. Chrysler’s sales were up 9.4% for the period.

One reason for the stagnation of Hyundai and Kia sales is likely the scandal over gas mileage claims. Car research firm Edmunds wrote in November:

  • Hyundai and Kia said they overstated the estimated fuel economy on about 900,000 2011-’13 vehicles, including the 2012 Hyundai Accent and 2012 Kia Soul.
  • The Korean companies will compensate owners for the inaccurate claims.
  • The EPA announced that its investigation into “inflated mileage claims” prompted the action by Hyundai and Kia.

Some models that the two companies sell face more competition from low- and mid-priced cars and light trucks. In the first two months of the year, Honda Motor Co. Ltd.’s (NYSE: HMC) Accord sales rose 51%. Ford Fusion sales rose 42%. Sales of the Ford Fusion and Toyota Corolla each rose 22%. All of these vehicles are in the top 20 in terms of U.S. sales. Hyundai has two cars in the group. Sales of one of those — the Sonata — dropped 8% for the period. Sales of its Elantra rose 15%. Hyundai is losing market share to several other companies in the battle among the most popular cars and light trucks.

The U.S. car market is the hottest large car market in the world. If global manufacturers want to take advantage of that, they need to make progress in 2013. Hyundai and Kia have not articulated much of a plan to regain their growth rates. That is because they have none.

Filed under: 24/7 Wall St. Wire, Autos Tagged: F, GM, HMC, TM

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Source: FULL ARTICLE at DailyFinance

Media Digest (3/5/2013) Reuters, WSJ, NYT, FT, Bloomberg

By 24/7 Wall St.


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China will lean on consumer spending to expand its economy. (Reuters)

Facebook Inc. (NASDAQ: FB) faces more lawsuits over its initial public offering. (Reuters)

The White House says it believes people should be able to unlock their cell phone for use on more than one network. (Reuters)

Pew reports that debt among young people has dropped to a multiyear low. (WSJ)

The Chinese government drops annual GDP growth goals to 7.5%. (WSJ)

Citigroup Inc.’s (NYSE: C) new CEO, Michael Corbat, is more likely to track the performance of individual senior executives. (WSJ)

Fannie Mae and Freddie Mac will combine some operations. (WSJ)

A senior General Motors Co. (NYSE: GM) executive says the company will keep its Opel operations in Europe. (WSJ)

The CEO of H.J. Heinz Co. (NYSE: HNZ) could make $200 million if he leaves the company after a buyout. (WSJ)

Theft of oil from Nigerian pipelines starts to sharply cut production. (WSJ)

Royal Dutch Shell PLC (NYSE: RDS-A) will build LNG plants in Louisiana and Canada. (WSJ)

The chief of Boeing Co. (NYSE: BA) says the return to service of the 787 will depend on how fast the FAA approves a potential fix. (WSJ)

Bond yields on Spanish and Italian debt narrow because of stability in Spain and instability in Italy. (WSJ)

Facebook creates an ad system that could take business from Google Inc. (NASDAQ: GOOG). (WSJ)

Congress accuses key J.P. Morgan Chase & Co. (NYSE: JPM) executives of roles in the bank’s $6 billion loss. (NYT)

Hess Corp. (NYSE: HES) will sell its gas stations as investors pressure it to restructure the company. (NYT)

Apple Inc.’s (NASDAQ: AAPL) shares reach a 52-week low as Google’s reach an all-time high. (FT)

Boeing defends its decision to keep the battery used in its 787 Dreamliner. (FT)

European Union finance ministers may ease budget restraints to cure the fallout from austerity. (Bloomberg)

Pearson PLC (NYSE: PSO) executives tell the Financial Times that a number of positions will be cut. (Bloomberg)

Filed under: 24/7 Wall St. Wire, Press Digest Tagged: AAPL, BA, C, FB, GM, GOOG, HES, HNZ, JPM, PSO, RDS-A

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Source: FULL ARTICLE at DailyFinance

Notable ETF Inflow Detected – VXF, GM, LVS, FB

By ETFChannel.com

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Vanguard Extended Market ETF (AMEX: VXF) where we have detected an approximate $79.0 million dollar inflow — that’s a 4.6% increase week over week in outstanding units (from 26,244,385 to 27,447,224). Among the largest underlying components of VXF, in trading today General Motors Co. (NYSE: GM) is up about 0.5%, Las Vegas Sands Corp (NYSE: LVS) is up about 1.2%, and Facebook, Inc. (NASD: FB) is higher by about 1.5%. For a complete list of holdings, visit the VXF Holdings page » …read more
Source: FULL ARTICLE at Forbes Markets