Budget buyers to boost China car sales -Ford exec
, May 8 (Reuters) – Automakers will race to appeal to budget-conscious Chinese car buyers as the industry expands beyond the wealthy coastal cities in the east, Ford Motor Co’s Asia chief said on Tuesday.
As they expand more heavily into central and western China, automakers can appeal to price-sensitive consumers by offering multiple vehicles within the same size segment at varying prices, Jo e Hinrichs said.
“The growth expected the rest of this decade in China is largely to come from the central and western parts of the country which is more value-oriented,” he told reporters at Ford’s headquarters in Dearborn, Michigan.
“You’ll need to serve those customers differently,” he added.
Ford’s plan to introduce 15 new vehicles in China by 2015 began with last month’s launch of the new Focus. Hinrichs said last month in Beijing that Ford plans to sell cars priced below the Fiesta, currently their cheapest model in Asia with a price ranging from $12,300 to $17,500.
Ford sales in China rose 24 percent in April to 54,881 vehicles, spurred by strong demand for the Focus.
Ford makes the Fiesta, Focus, Mondeo and other vehicles in China in a three-way tie-up with Chongqing Automobile Co Ltd and Japan’s Mazda Motor Corp.
Toyota posts April US gains, GM lifts sales outlook
DETROIT, May 2 (Reuters) – U.S. auto sales rose 2.3 percent in April, helped by strong gains at Toyota Motor Corp and Chrysler Group LLC, as American shoppers looked to replace their aging cars and trucks and the broader U.S. economy showed signs of strength.
The annual sales rate in April was 14.4 million, in line with the pace projected by economists polled by Thomson Reuters. This was in line with the March rate, but down slightly from the 14.6 million pace reported in the first quarter.
Auto sales are one of the earliest snapshots of American consumer demand and the metric has proven to be a bright spot in the U.S. economy. Despite signs that the overall U.S. economy might lose steam, automakers said they remained optimistic.
“There continue to be a lot of mixed signals out there,” said Toyota brand sales chief Bob Carter. But he said consumers’ pent-up demand for new vehicles coupled with Toyota’s upcoming models would drive sales this year.
“We’re watching consumer confidence and consumer sentiment very closely,” he said.” As both of those indices improve, we’re starting to see more showroom traffic.”
Chrysler and Toyota were the biggest gainers in U.S. market share in April, while General Motors Co, Ford Motor Co , Honda Motor Co Ltd and Nissan Motor Co Ltd all lost share in the month, according to Autodata Corp.
Toyota sales shot up 11.6 percent, spurred by passenger cars led by the Camry sedan and the Prius hybrid. Chrysler sales leapt 20 percent on the strength of models like the 300 sedan.
GM, Ford sales dip; GM lifts sales outlook
DETROIT (Reuters) – General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz) and Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) reported slight dips in U.S. new vehicle sales for April, but GM lifted its outlook for U.S. sales this year based on encouraging signs that the broader economy will grow.
GM now projects the U.S. auto industry will sell between 14 million and 14.5 million cars and trucks this year, up from its previous outlook of 13.5 million to 14 million.
“Over time, strength in the manufacturing sector and strong retail sales will lead to more job creation,” GM sales executive Don Johnson said in a statement. “That will help more consumers put the recession behind them.”
The sales declines at GM and Ford were due partly to a quirk in the calendar. April has three fewer selling days than last year, which can skew results.
Including medium and heavy trucks, Ford expects the overall industry to post an annual sales rate in the “mid-14 million” range. Chrysler Group LLC, the No. 3 U.S. automaker, forecast an April sales rate for the industry of 14.6 million vehicles.
That would be stronger than the 14.4 million rate projected by economists, according to Thomson Reuters, and would also top the March rate of 14.4 million.
GM reported an 8 percent decline in sales, due a 25 percent drop in fleet sales, to 213,387.
Chrysler CEO warns of tough talks with CAW
DETROIT (Reuters) – Negotiations between Chrysler Group LLC and the Canadian Auto Workers union this summer may be difficult, said Chrysler CEO Sergio Marchionne, pointing to a short-lived strike at an auto-parts supplier that caused Chrysler’s minivan plant in Windsor, Ontario, to close for a few hours.
Marchionne told reporters on Monday morning in Detroit, that he had “zero empathy” for the striking CAW workers, at a Dakkota Integrated Systems plant near the Windsor assembly plant.
“This is not the way to get things done,” Marchionne said, adding “if this is an indication” of the relationship between the CAW and Chrysler, “then we’re in for a very difficult round of negotiations.”
A few hours later, the half-day strike was over after the 190 Dakkota workers from CAW Local 444 in Windsor voted 3-to-1 in favor of a new pact, and the minivan assembly plant reopened. On Sunday, the same workers had rejected the same contract, which called for a 9 percent increase over three years from the current $17.50 per hour wage.
Local 444 represents Chrysler workers at the Windsor plant as well as workers of four supplier plants that feed it, said Local 444 President Rick Laporte.
Ken Lewenza, president of the CAW, said he was surprised by the aggressive tone taken by Marchionne.
“I’m disappointed in his aggressive tone,” said Lewenza, who said CAW leaders worked overnight and into Monday and by the time Marchionne spoke were well on their way to getting Dakkota and their workers to mend fences.
Ford Motor says resin shortage won’t cut production
DETROIT, April 27 (Reuters) – Ford does not expect any production disruptions due to a shortage of a rare nylon resin used in auto manufacturing, its chief financial officer said on Friday.
“We think we are going to get through this without having any issues,” Ford CFO Bob Shanks said during Ford’s first-quarter earnings conference call.
When Ford Motor Co announced its first-quarter net profit of $1.40 billion [ID: L2E8FR1KB] on Friday, it said in a statement, “The company has not had and does not expect any production disruptions” due to the lack of the nylon resin PA-12.
Shanks said Ford has been in daily contact with its suppliers about the shortage of an obscure nylon resin called PA-12 that is used in making most cars and trucks worldwide.
The global supply of PA-12, used in several industries including auto manufacturing, was already stretched thin before the explosion at an Evonik Industries AG plant in Marl, Germany on March 31. That blast killed two Evonik workers.
Evonik is a major producer of PA-12, which is used as a coating for tubes, fuel lines and braking systems.
The world’s three other major producers of PA-do not have spare material on hand or enough output capacity to make up for Evonik’s loss.
Fiat-Chrysler Q1 beats forecasts as Europe weighs
DETROIT/MILAN (Reuters) – Italian carmaker Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz) beat analysts’ forecasts for first quarter earnings as its U.S. unit Chrysler Group LLC posted its best quarterly profit since its 2009 bankruptcy, once again compensating for declining sales in Europe.
Without profits from Chrysler, Fiat would be just breaking even in the first quarter because of volume declines in Europe, compared with a trading profit of 251 million euros in the first quarter of 2011, it said in a statement.
Despite revenue in Europe falling by 13.1 percent to 4.5 billion euros, Fiat said it is on track with its business plan and confirmed all of its targets for 2012.
Fiat’s shares were down 4.8 percent at 3.74 euros at 10:54 a.m. EDT (1454 GMT).
Chrysler’s auto sales increased 33 percent to 523,000 vehicles in the quarter, led by its home U.S. market where it gained market share on a first-quarter sales jump of 36 percent versus the industry-wide gain of 13 percent.
“Another positive quarter – built on sales gains that have surpassed the industry average – is affirmation that the Chrysler team is maintaining its focus,” said Sergio Marchionne, chief executive of both Chrysler and Italy’s Fiat.
The first quarter results show Fiat-Chrysler continues to be a “two speed” company.
Fuel-efficient vehicles boost U.S. dealership profits
By Deepa Seetharaman and Bernie Woodall
(Reuters) – U.S. dealership groups reported higher-than-expected first-quarter profits, helped by Americans’ need to replace older cars and trucks with more fuel-efficient models as prices at the pump approached record highs.
Rising fuel prices typically hurt vehicle demand, but dealers sold more vehicles at higher prices during the quarter in contrast with previous times when gas prices spiked, AutoNation Inc (AN.N: Quote, Profile, Research, Stock Buzz), Penske Automotive Group (PAG.N: Quote, Profile, Research, Stock Buzz) and Lithia Motors Inc (LAD.N: Quote, Profile, Research, Stock Buzz) told analysts during conference calls on Wednesday.
Consumers were willing to pay a premium for fuel-efficient cars and trucks if it meant saving money on gasoline down the line, executives and analysts said.
The new models available in showrooms are, on average, 20 percent more fuel-efficient than vehicles introduced five years ago, AutoNation Chief Executive Mike Jackson said. The average age of U.S. vehicles is nearly 11 years old.
“We had an alignment between what the industry was producing and what consumers wanted,” Jackson said. “So $4 a gallon gasoline was, paradoxically, supporting sales rather than having a negative impact.”
U.S. auto sales in the first quarter were up 13 percent from a year ago while the national economy is growing at a rate of about 2.5 percent, Jackson said.
Strong U.S. auto sales boost dealer groups
DETROIT, April 25 (Reuters) – U.S. dealership groups reported higher-than-expected first-quarter profits on Wednesday, helped by the need for Americans to replace their aging cars and trucks with more fuel-efficient vehicles as prices at the pump neared record highs.
AutoNation Inc, Penske Automotive Group and Lithia Motors Inc all reported an increase in retail sales and new vehicle prices for the quarter.
“We are a bright spot in what is overall a very fragile and tepid economic recovery in the U.S.,” AutoNation Chief Executive Mike Jackson said of auto sales.
U.S. auto sales in the first quarter were up more than 10 percent from a year ago while the national economy is growing at a rate of about 2.5 percent, Jackson said.
The average age of U.S. vehicles is a record 10.8 years and analysts say those cars and trucks are much less fuel-efficient than newer models today. As fuel approached $4 a gallon, it prompted Americans to trade in their older cars.
“We had an alignment between what the industry was producing and what consumers wanted,” Jackson said. “So $4 a gallon gasoline was, paradoxically, supporting sales rather than having a negative impact.”
AutoNation President Mike Maroone said he expects manufacturers to maintain discipline on incentives for the rest of 2012.
AutoNation beats expectations on strong sales
(Reuters) – AutoNation Inc (AN.N: Quote, Profile, Research, Stock Buzz), the No. 1 U.S. auto retail group, posted better-than-expected earnings on Wednesday driven by a 10 percent increase in revenue due to strong new-vehicle sales, the company said.
AutoNation is the beneficiary of industry-wide strong auto sales and its Chief Executive Mike Jackson said he expects the strong sales to continue through 2012.
“The overall economy remains a question mark” while the auto industry experiences a strong recovery from a sales downturn in the recent recession, Jackson told Reuters from company headquarters in Ft Lauderdale, Florida.
“We are a bright spot in what is overall a very fragile and tepid recovery,” he said.
U.S. average gasoline prices flirted with $4 per gallon in the first quarter but have retreated, which is generally encouraging for auto sales, Jackson said. But he added that more fuel-efficient cars and trucks that do not sacrifice size and comfort “paradoxically” boosted first-quarter auto sales.
Jackson said the auto industry was showing more solid strength than the overall U.S. economy, which was a key reason why AutoNation increased its forecast for 2012 U.S. auto sales to 14.5 million from the 14 million he forecast in January.
Dupont, Dow to help global automakers avoid output crunch
DETROIT (Reuters) – Dupont (DD.N: Quote, Profile, Research, Stock Buzz) and Dow Chemical (DOW.N: Quote, Profile, Research, Stock Buzz) are among chemical firms working with global automakers who are bracing for a crunch in production, after a German chemical plant explosion cut a chunk of supply of a nylon resin used in brake and fuel systems.
The risk of production cuts is greater for car markers in the United States and France, and less in Japan and Germany, UBS said in a research note.
“We see high risk of production stoppages in the second quarter,” UBS analysts said in the research note issued on Thursday. But they also saw an “equally high probability” that alternatives would be found within the same quarter.
The global supply of PA-12, used in several industries including auto manufacturing, was already stretched thin before the explosion at an Evonik Industries AG RAGES.UL plant in Marl, Germany on March 31, that led to the nylon resin shortage.
Auto experts and analysts are not clear how the shortfall would affect China, which has overtaken the United States as the world’s largest auto market.
Florian Schattenmann, research director for Dow Automotive Systems, said Dow “has allocated essential resources to find alternative solutions” to the use of the nylon resin PA-12, also known as Nylon-12.
DuPont CEO Ellen Kullman, in an earnings conference call with reporters on Thursday, said the company has three polymers that could be a replacement in some automotive applications.