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Business, Finance, Occupation & Industry

Luxury Cars Are a Booming Business

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By John Rosevear, The Motley Fool

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The U.S. economy may still be struggling in some ways, but you wouldn’t know it from looking at luxury-car sales.

Global luxury-car heavyweights Mercedes-Benz and BMW , the reigning champ, are locked in a fierce battle to lead the U.S. luxury-car market in 2013. Both reported strong sales here in the first quarter — and several of their rivals posted big gains of their own.

A small market that generates big bucks
The sales volumes are relatively small. In some months, Ford‘s sales of F-Series pickups alone are greater than the total U.S. sales of these two put together. But thanks to impressive margins, luxury cars are big business here and around the world, and BMW and Mercedes, along with Volkswagen‘s Audi brand, are the Big Three that seem to dominate it just about everywhere.

BMW posted a 13% gain in U.S. sales in March to 27,078 vehicles, marking BMW‘s best March in the U.S. ever. That increase was powered in large part by gains for its SUVs — the X3, X5, and X6 in particular, which were together up 40% over year-ago totals.

That’s a strong showing, and the company is optimistic about its chances for further gains in the coming months. BMW‘s North American chief, Ludwig Willisch, said in a statement that he expects the new entry-level 320i model to “accelerate our momentum in the months ahead.”

Meanwhile, arch-rival Mercedes-Benz posted a 6.5% year-over-year sales increase for March, with 24,646 sold — enough for its own record March and first-quarter totals. Strong points were the 34% gains for the company’s C-Class sedans, which compete directly with BMW‘s 3-Series, and a nice result for the company’s M-Class SUV.

Mercedes, which is owned by Germany’s Daimler , made much of the fact that it posted record sales without launching any new models in the first quarter. The company’s U.S. sales chief, Steve Cannon, noted in a statement that coming launches of redesigned E-Class and S-Class models could lead to Mercedes’ “strongest year on record” as 2013 continues to unfold.

Other luxury makers are looking strong
Meanwhile, German rival Audi merely posted its 27th straight month of record sales in the U.S., with a 14% gain over good year-ago totals. Continuing the theme, small sedans and SUVs were strong for Audi as well, with a 20% gain for its A4 and a 39% increase for the Q5 SUV. Those gains were achieved with minimal discounting, Audi officials noted, as VW continues to try to maximize its profits outside its troubled European home base.

Toyota‘s Lexus brand posted a 16% gain for the month and a 15% gain for the quarter behind strong sales of its ES midsized sedan. And General Motors‘ Cadillac brand continued its slow resurgence, as its ATS sedan — a surprisingly strong competitor to BMW‘s 3-Series — led the way to a 49% year-over-year gain.

Keep watching the auto market in 2013 to see whether luxury vehicles …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Brad Pitt Helps Cadillac Catch On in China

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By John Rosevear, The Motley Fool

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After a holiday-induced dip in February, General Motors resumed its sales growth in China during March. Sales by GM and its Chinese joint ventures rose 12.6% in March from a year ago, the automaker said on Wednesday.

With 290,538 vehicles sold, March had GM‘s second-highest monthly sales total ever in China. It caps a quarter that saw GM‘s sales rise 9.6% from the year-ago period, to 816,373 vehicles – GM‘s best-ever quarterly showing in China.

It was a good showing in several areas, including a bright start for one of GM‘s most important global projects: the elevation of Cadillac — with some help from Brad Pitt.

A promising start for Cadillac’s big car in China
GM said that Chinese Cadillac sales grew 32.2% in March from a year ago. Much of that growth was driven by the new-to-China XTS, Cadillac’s biggest sedan, which sold 2,006 units in its first full month in the Middle Kingdom.

That may not sound like a lot, but it’s a nice showing by luxury-car standards – for comparison, the XTS sold “just” 3,061 units last month here in the U.S., where Cadillac is much more established. The XTS is GM‘s current take on the big cushy old-school Cadillac concept, but loaded with advanced technology like a sophisticated all-wheel-drive system and sensor-driven electronic safety features.

That technology has been a big point of emphasis in Cadillac’s marketing both here and in China, where GM officials at the February launch of the XTS in Guangzhou called it the most technically advanced Cadillac to date – and where television commercials starring actor Brad Pitt (yes, really) in a white XTS have played up the car’s high-tech features.

That’s a game that GM will have to continue to raise in China if it wants to meet its ambitious goals for its luxury brand.

A long-range plan facing daunting competition
Technology, along with Cadillac’s ever more sophisticated styling, may be GM‘s best route for expanding Cadillac’s appeal in China. The Chinese market for luxury cars has boomed in recent years, but so far it has largely been controlled by the big three German luxury brands.

Volkswagen‘s Audi brand, the favored brand of powerful government officials and Chinese bigwigs, led the market with a 29.6% share in 2012. Its German rivals BMW at 23.6% and Daimler‘s Mercedes-Benz at 20.6% were the second- and third-place finishers. The high margins typical in the luxury-car market mean that all three are booking outsized profits from their success in the Middle Kingdom.

Cadillac has been just a bit player in China‘s luxury market so far, but GM would dearly like a piece of that action. Much of the work being done to refurbish and elevate the Cadillac brand is being done with China in mind. GM outsells VW in China, but its profits from the region trail its German rival’s by a wide margin, and the success of Audi is a big reason why. The project to turn …read more

Source: FULL ARTICLE at DailyFinance

Automobiles

Volkswagen to use CO2 as future refrigerant for air conditioning systems

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By Jon LeSage

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Another German automaker has rejected the air conditioning refrigerant that’s scheduled to be adopted by global automakers in 2017. Earlier this month, Volkswagen lined up with Daimler and BMW to support Daimler’s findings from last year that the new refrigerant, called HFO-1234yf, can become flammable.

Volkswagen says it will be rolling out its own carbon-dioxide-based air conditioning systems. The European Union wants to have HFO-1234yf, which was designed by Honeywell and DuPont, replace the coolant currently in use, HFC-134a to significantly reduce CO2 emissions and its global warming potential. Daimler engineers discovered HFO-1234yf could spark a fire under the hood, with the potential to destroy the car and emit highly toxic gas while burning.

An automotive working group – the Cooperative Research Program – was formed last year to study the matter. Daimler conducted its own flammability tests and became concerned enough about vehicle safety to leave the working group, along with BMW. Volkswagen’s Audi division also expressed concern and is now part of Volkswagen’s decision to join ranks with its German allies and dismiss adoption of HFO-1234yf as the new refrigerant.

European Union Industry Commissioner Antonio Tajani appears unwilling to accept the decision by Germany‘s “Big 3” automakers or a written request from German ministers asking for a temporary suspension of the new EU law. While Tajani said he would listen, he also said that he would begin infringement proceedings against any member state that did not comply with the new rules. “Since there was some information from Germany there was a problem, I am obliged to ask for information, but it’s not giving them time. I am not weak,” Tajani told Reuters.

There’s no word yet what other agencies such as the US Environmental Protection Agency may do about it. Honeywell and Dupont would be holding a billion-dollar monopoly starting in 2017 if HFO-1234yf goes through. They’re bound to support Industry Commissioner Tajani‘s decision.

Continue reading Volkswagen to use CO2 as future refrigerant for air conditioning systems

Volkswagen to use CO2 as future refrigerant for air conditioning systems originally appeared on Autoblog Green on Mon, 25 Mar 2013 09:30:00 EST. Please see our terms for use of feeds.

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Source: FULL ARTICLE at Autoblog