USMotor Industry struggling to keep their head above water?

[peter]

Hi

I don't often have stuff about business news.

However, this could have impact on all of us. The big US players are close to bankruptcy.

Obviously brands like Ford, GM, Buick (currently undergoing significantly downsizing ) Chevrolet, Cadillac (trying to market Saabs with a different badge in Europe), Saturn (dead on its feet), Lincoln (who?), Pontiac, Mercury (who ?), Oldsmobile (oops - sorry - already killed), Hummer (obscene ?), Dodge, Subaru, Mitsubishi, Chrysler, Saab, Daewoo, Aston Martin, Volvo, Jaguar, Opel, Vauxhall, Holden, GM Trucks all face a very shakey future.

Still, no problem - some of these brands have a value. They will be snapped up by Chinese, Korean and Indian manufacturers. Others are worthless.

This is the Ford position :

DETROIT -- Ford Motor Co. expects to go through $17 billion in cash during the next three calendar years, with more than half of that occurring in 2007.

In the meantime Toyota has outsold the GM in the US for some months this year.

In addition to being global NO1 for market capitalisation (more than GM, Ford, Daimler-Chrysler put together), profitability, customer satisfaction - they will achieve No1 global position for car sale volumes this year.

The world is changing ?

Peter

[graham34]

Hi

However, this could have impact on all of us. The big US players are close to bankruptcy.

Peter

US companies don't go bankrupt. They enter Chapter 11, write off loads of debt, restructure and return with a lower cost base - at least that's what happens to airlines e.g. United.

[peter]

More details :

http://driving.timesonline.co.uk/article/0,,22749-2475012,00.html

http://www.freep.com/apps/pbcs.dll/article?AID=/20061130/BUSINESS01/611300339

Peter

[peter]

Something from today :

FRANKFURT (Reuters) -- DaimlerChrysler dropped its long-standing commitment to the Chrysler group today and said it was prepared to review all its options, including finding new partners for its loss-making U.S. arm.
The announcement by the world's fifth-biggest carmaker just ahead of a news conference in Detroit to outline its turnaround strategy for the Chrysler group sent the group's stock up more than 5 percent to its highest level since June 2002.
"The market clearly wants something radical. That might be hard to do given the size of the pension liabilities and the linkages between Daimler and Chrysler," one London trader said. "They'll close some plants and take costs out."
Still, the statement was a departure from the group's clear statement as recently as October ...

and later today :

The Chrysler group said today that it will cut 13,000 jobs; close its Newark, Del., assembly plant, cut 400,000 units of annual production capacity and spend $3 billion on new powertrains.
The 13,000 job cuts will occur through 2009. Of that total, 11,000 jobs will be hourly workers, with 9,000 jobs cut in the United States and 2,000 in Canada. The Chrysler group also plans to cut 2,000 salaried jobs -- 1,000 each this year and in 2008.
In addition to closing the Delaware plant in 2009 that builds the Dodge Durango and Chrysler Aspen SUVs, the automaker also will cut a shift at the Warren, Mich., plant this year that builds pickups. Next year, it will cut a shift at the St. Louis South assembly plant that builds minivans. It also will close a parts distribution center in Cleveland ...

[peter]

Seems that Daimler Benz were serious about dumping Chrysler ........

Canadian supplier Magna International Inc. has joined with a private equity group to make an offer to buy the Chrysler group from DaimlerChrysler.
Magna and its partner have made an offer to buy Chrysler for $4.6 billion to $4.7 billion, according to Brett Hoselton, an analyst for KeyBanc Capital Markets. In his March 23 report, Hoselton cites sources at Magna but does not name the private equity partner.
According to Hoselton, Magna's stake would be worth 20 to 25 percent of the Chrysler group.
"While MGA views its offer as low and unlikely to prevail, the company also views it as an opportunity to purchase an inexpensive stake in the automaker should the other buyers retreat," Hoselton wrote.
Magna also is undertaking a strategic review of its interiors business, which ...

Source Automotive Management

[L`Outcast]

Come on peter leave the eyebrow stuff that most folk have no control over and get off the frence and say something controversial,ie my post about brits getting free advice at the french tax payers expence would be a good start.
Could it be that you and Kate of anglo what ever it is called are singing from the same hymn sheet?

[peter]

Come on peter leave the eyebrow stuff that most folk have no control over and get off the frence and say something controversial,ie my post about brits getting free advice at the french tax payers expence would be a good start.
Could it be that you and Kate of anglo what ever it is called are singing from the same hymn sheet?

As you know, I don't live down there. So, I don't really know what is going on down your way, do you want to tell us some more ?

Around 60 people have read that post, and they haven't replied either ?

Peter

[L`Outcast]

"Around 60 people have read that post, and they haven't replied either ?...."
Not that surprising

But as regards what going on down here please see my post under the topic of "advantage over the french"in which amongst other things I try to spell out what is going on within a merry band of brit self seekers who are mainly out to enrich themselves via the expense of local council,in my opinion.Maybe you could ask Kate of anglo-direct,(I know she posts on here) for her opinion.

[peter]

Well,

Toyota is now No1 worldwide in volume car sales. Gives me a warm feeling as I have a contract with them !

However, the fallout amongst the alsu rans has started. An email I received today :

MUNICH -- Private equity group Cerberus Capital Management will take control of the Chrysler group in a transaction valued at $7.45 billion (5.5 billion euros).
DaimlerChrysler AG announced the Cerberus deal this morning. An affiliate of Cerberus will acquire 80.1 percent of Chrysler, while DaimlerChrysler will retain 19.9 percent.
A press conference is scheduled for 2 p.m in Stuttgart, 8 a.m. Detroit time.

A snip at only 5.5 billion Euros ? Actually they should look upon it as a small deposit, perhaps.

Peter

[peter]

An interesting article :

"The other differentiator is profitability. Toyota and Honda each earned a pre-tax margin of more than $1,200 on every vehicle they sold in North America. In contrast, Chrysler Group lost $1,072, while General Motors lost $1,436 and Ford lost $5,234 on each vehicle sold in 2006."

Full report here : http://biz.yahoo.com/prnews/070531/clth008.html?.v=100

[peter]

Fortune magazine overview :

As the restructuring of the auto industry continues at a breakneck pace, fabled car brands are going on sale like so many grapefruits in a grocery store.

First Chrysler went on the block with its Dodge, Chrysler and Jeep lines and was whisked away at a bargain price by Cerberus Capital Management.

Now, after months of vacillating, Ford has officially put Jaguar and Land Rover up for bid. At this early point in the process, it is difficult to see what the outcome will be. But it is clear that the auto industry is going through a once-in-a-generation rethinking of the principles that form the foundation of its business. With the exception of Toyota, nobody is immune.

In the 1990s, luxury brands were seen as the ideal complement to volume manufacturers like Ford. They provided an upward migration path for customers and higher profit margins than were available at the popular-priced end of the business.

So while Ford was buying Jaguar, and later Land Rover, General Motors went after Saab, and Chrysler dallied briefly with Maserati and Lamborghini. Toyota and Nissan seemed to endorse the American moves by starting their own luxury brands, Lexus and Infiniti.

But just as they mismanaged their own businesses, the Detroit Three failed to make a success of their luxury ventures. Land Rover has traveled a rocky road while Jaguar has been nothing less than a money pit for Ford, consuming upwards of $10 billion.

Perhaps there is a lesson here that has been absorbed by other automakers; they haven't been stampeding to make an offer. Fiat was rumored to be interested, but it has its own underperforming luxury brands in Lancia and Alfa-Romeo. BMW was said to be sniffing around, but having owned Land Rover once before, it isn't likely to want to go down that path again.

More likely buyers would be France's Renault, which doesn't have its own luxury brand, and Peugeot, which has a quasi-one in Citroen. But Renault's Carlos Ghosn has his hands full trying to get the automaker pointed in a new direction, and Peugeot seems more interested in exploring the lower reaches of the market than the upper ones.

Asian automakers would have a strong incentive to acquire a global brand like Jag or Land Rover with a U.S. distribution system. Ever-ambitious Hyundai is one possibility. Another is a Chinese automaker. It was the Chinese after all who snapped up the remains of MG Rover and started building cars carrying those fabled nameplates in China.

If no traditional automakers step up to the plate, how about private equity? Despite increasing interest rates, they seem to have no trouble getting access to capital. And a buyer like Blackstone, which lost out in the bidding for Chrysler, might welcome another opportunity to get into the auto business.

Anybody who does get in, though, will have some tough slogging ahead. Land Rover is making money at the moment but it is at the sweet spot in its product cycle. To stay successful, its antique manufacturing system will have to be rationalized. Plus it will have to find some way to modernize its vehicles without compromising the brand heritage that makes them so appealing to their upscale buyers.

Jaguar is at a different stage in its life, probably close to its nadir. Ford's ill-fated attempt to boost volumes by expanding into the entry-lux segment with the Jaguar X-type failed miserably and the line will probably be discontinued. For the time being, Jag will soldier on with the S-type, a striking redesign of which is due in a few years, the smashing XK coupe and convertible, and the unimpressive XJ sedan.

That is hardly a robust lineup with which to compete against the likes of Mercedes, BMW and a resurgent Audi. Jaguar will need continued infusions of capital to refresh its current model lineup and expand into new segments.

Pumping cash into a money-losing operation is hardly a familiar proposition for disciplined private equity investors. Rescuing Jaguar will be a difficult equation for them to master. Nostalgic feelings about Jaguar's storied past will likely have little influence, either. Ford may have to wind up pricing Jag the same way Daimler priced Chrysler - giving the company away in exchange for the promise of significant investment.

Whatever happens to Jag and Land Rover, they will probably not be the last assets to be shuffled. The second century of the automobile industry is promising to be a lot more tumultuous than the first.

[peter]

Well, time to update this.

The US unions still believe that the current crisis is a sham, and are fighting changes to health benefits, closing factories, etc. The truth is that survival is a real problem.

Chrysler has been sold by Daimler Benz - effective 1/11/07. It is undergoing a massive restructure reducing models, factories, etc. The UK operation is suffering from poor sales, and the previous MD is now "exploring opportunities within the retail motor industry".

Ford has sold Aston Martin, and is now considering final offers for Landrover and Jaguar.

GM continues on its rollercoaster. Latest report :

DETROIT, Nov 7 (Reuters) - General Motors Corp posted its largest quarterly net loss on Wednesday, reflecting a $39-billion charge related to unclaimed tax credits and a deeper-than-expected loss at former finance subsidiary GMAC.

The massive charge and a cautious outlook from the largest U.S. automaker underscored the risks GM faces three years into a restructuring plan, suffering from stalling U.S. auto sales, a slumping housing market and rising oil prices.

GM's $39-billion charge ranked as the second-largest in U.S. corporate history, trailing only the $45.5 billion write-down AOL took in 2002 in the wake of its troubled merger with Time Warner, according to Standard & Poor's.

GM's third-quarter net loss ballooned to $39 billion, or $68.85 per share, compared with a loss of $147 million, or 26 cents per share a year earlier.

On the adjusted basis tracked by most analysts, GM's loss of $1.6 billion, or $2.80 per share excluding one-time items, was about eight times larger than the average forecast by Wall Street analysts.

GM Chief Financial Officer Fritz Henderson attributed that shortfall to losses in the United States, Canada and Europe and the previously reported loss at GMAC.

GM shares lost ground in reaction and were down more than 5 percent in afternoon trading on the New York Stock Exchange.


This story will run and run - for a while !

BTW "losses in the United States, Canada and Europe" means they may have made a little in their small markets, but took a pasting in their major markets.

Peter

[66to11]

Eco tip: Oil will soon hit 100 USD the barrel! Get wise now and invest in
http://www.dkimages.com/discover/previe ... 003819.JPG
You can make a killing in a few years' time... oh and better get some smithies trained up as well!!

[peter]

3 December 2007 | Source: just-auto.com editorial team

Chrysler's new bosses are already running into problems, and according to latest reports, costs this year are expect to come in a billion dollars higher than sales.

In 2007, Chrysler is expected to generate a turnover of around US$64bn, but costs are around US$65bn, according to Chrysler sales director, Steve Laundry, speaking to US media.

The loss is attributed to massive costs for separating the company from the DaimlerChrysler group and for job cuts.

Chrysler does not have to publish its figures now that it is a private company.

Private equity firm, Cerberus, acquired Chrysler at the end of this summer. Daimler retained a 20% stake in the company.

Chrysler has since cut tens of thousands of jobs, but Cerberus is now struggling with the US credit crisis and is seeking to refinance some of Chrysler's debts.

One of Chrysler's major challenges is to reduce its dependence on the North American car market. Only eight percent of group sales are outside North America.

[peter]

The weak dollar is hitting the big 3 :

19 December 2007 | Source: just-auto.com editorial team

General Motors began charging higher prices on Wednesday for most of its 2008 model year vehicles to partially recover increasing steel and commodity costs.

The price increases average about 1.5%.

"This targeted price increase is designed to partially recover ever-increasing commodity costs," said GM North America sales chief Mark LaNeve. Price hikes are mostly around $100 to $500 depending on model but the new Chevrolet Malibu and the Saturn Aura in "competitive" segements are unaffected. The Cadillac ZLR went up $1,500.

GM said the price increase would not affect vehicles already in dealer inventory.


Note that imports will escape this.

Peter

[peter]

24 January 2008 | Source: just-auto.com editorial team


Ford Motor Company on Thursday reported a 2007 full-year net loss of $2.7bn ($1.35 per share), a significant improvement compared with the 2006 full-year net loss of $12.6 bn ($6.72 per share).

Revenue, excluding special items, rose to $173.9bn from $160.1bn a year ago. The increase was due primarily to changes in exchange rates, higher net pricing and improved product mix, the automaker said.

Including taxes, Ford's full-year loss from continuing operations was $366m, (19 cents per share) compared with a 2006 loss of $2.7bn ($1.44 per share).

Excluding special items, full-year pre-tax profit from continuing operations was $126m, up $3.3bn from a year ago.

Ford said that all automotive operations outside North America were profitable for the full-year, at least before special items, and all automotive operations "achieved significant improvements when compared with 2006".

Special items, primarily non-cash charges associated with a Premier Automotive Group (PAG) asset impairment (related to Volvo) and a change in business practice for providing retail incentives to dealers throughout the year, reduced full-year pre-tax results by $3.9bn ($1.18 per share), which included a reduction in revenue of $1.4bn.

"Each of our automotive operations is improving, and we are encouraged by the progress, which validates our strategy and plan," said Ford president and CEO Alan Mulally.

[peter]

The question of who is the world's biggest automaker now hangs in the balance after General Motors on Wednesday announced preliminary sales figures that showed it had sold 9,369,524 vehicles world-wide in 2007, up 3%.

Toyota earlier this month announced preliminary sales of 9.37m, up 6%.

More detail is expected from the automaker later this month though it has long insisted that being the world's number one for sales is not its top priority.

GM said it sold 2,305,752 vehicles in the fourth quarter of 2007, a year on year increase of 4.8%.

"We set a record in China with more than 1m vehicles sold. We nearly doubled our sales in Russia to an all-time record of more than 258,000 vehicles delivered. And we set a record in Brazil with nearly a half-million vehicles sold," global sales head John Middlebrook said in a statement. "This is the kind of emerging market growth that fuels our global performance."

GM said the 2007 global tally was the second largest in its history and the third consecutive year it sold more than 9m vehicles in a calendar year.

Chevrolet brand sales - which included a substantial number of GM-Daewoo-built cars sold mainly outside North America - grew over 4% to 4.49m units. The brand boosted sales in all three regions outside North America and posted almost a 34% rise in Europe.

Chevy sales also grew 23% to 208,000 in the Latin America, Africa and Middle East region while Asia Pacific region sales were up 22%.

Truck sales grew 1% to 3.8m truck sales globally, led by the Chevrolet brand with around 1.96m. GMC grew nearly 6% in 2007 to 613,000 while Chinese-made Wuling truck, mini-truck, and mini-van sales in the Asia Pacific region grew 24% to 516,000 units.

Cadillac sales rose 45% in Europe 42% in the Latin America, Africa and Middle East region and 106% in Asia Pacific.

At 5.50m, 2007 sales outside the United States accounted for about 59% of GM's total global sales. Its top three brands were Chevrolet (4.49m, up 4%), Opel/Vauxhall (1.69m vehicles, up 4%) and GMC (613,000, up 6%).

Latin America, Africa and Middle East region sales reached a record 1.23m, up 19%. Record European sales of 2.18m vehicles were up about 9%. Russia sales rose 95% to a record 250,000 units.

[peter]

GM still struggling ?


General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.

The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens.

But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.

Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.

GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour.

Ford Motor Co. and Chrysler LLC already have announced similar buyout offers.

GM shares rose 24 cents to $27.36 in morning trading.

GM's annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.

The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.

Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.

For the fourth quarter, GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with a net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GM's former parts division, for its restructuring efforts.

GM reported $181 billion in revenues for the year, down from $206 billion in 2006. Its automotive business saw record automotive revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favorable exchange rates.

GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, up 140 percent from 2006. GM's Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.

But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.

Wagoner said the weak U.S. economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected U.S. sales.

"We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner said in a statement.

GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.

GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.

[peter]

Imagine the struggle in a relatively buoyant market. What will happen if the economy has a downturn ?

NEW YORK (AP) -- If the economy continues to worsen and U.S. auto sales nosedive, the top executives of General Motors Corp., Ford Motor Co. and Chrysler LLC say they are prepared to weather the downturn.


Speaking at separate events in New York on Wednesday, Ford CEO Alan Mulally, Chrysler Chairman and CEO Bob Nardelli said their restructuring plans have cut factory capacity and other costs so they can make it through a deeper slowdown.

"We also stress-tested our business plan ... to be able to go if everything gets much, much worse, to go down lower and still be able to keep implementing our plan," Mulally said at the Morgan Stanley Global Automotive Conference. "So we have the cash, we have the liquidity. We just need to absolutely stay on our plan now."

Nardelli said at the New York International Auto Show that Chrysler prepared for a downturn in U.S. sales this year with layoffs and cuts in manufacturing and inventory. Chrysler announced in November it plans to cut 12,000 jobs, including 2,000 salaried jobs, by the end of this year.

Chrysler Vice Chairman and President Tom LaSorda said Wednesday that the automaker is making good progress persuading its hourly workers to take buyouts despite the faltering economy.

"We've never missed a manpower reduction target," he said. GM and Ford are also offering buyouts to almost all of their U.S. hourly workers.

Nardelli said that in its planning, Chrysler did not assume the economy will recover in the second half of this year as many automakers have. He said he expects total U.S. sales of 15.5 million in 2008, which would be the lowest level in a decade.

On Tuesday, automotive information company J.D. Power and Associates lowered its 2008 forecast for U.S. new light vehicle sales from 15.7 million to 14.95 million, the lowest level since 1994.

Westlake Village, Calif.-based J.D. Power said lower consumer confidence and spending, financial market turmoil and the industry's slow performance in January and February prompted it to update the forecast it released late last year.

GM Vice Chairman Bob Lutz said the company continues to believe sales will rise in the second half of the year and will end up similar to last year's total of 16.1 million. But if sales continue to slide, GM will take steps to cut costs, he said.

"Obviously, like any corporation, we will react to changing conditions," Lutz said. "If the stock market rebounds upward, it should ease the credit situation somewhat and bring back some consumer confidence."

Nardelli also said Chrysler will make further cuts if the market demands it.

"If we have to adjust, I would submit to you we probably have to adjust less than some of the other manufacturers because we already adjusted significantly," he said, pointing to the job cuts as well as cuts in the vehicle lineup and sales of some non-automotive assets.

Mulally told industry analysts that Ford, too, is ready even if U.S. auto sales drop to the low-15 million vehicle range this year.

He told the group Ford planned for overall U.S. market sales of 15.7 million for the full year, but during the first two months it's running around 15.3 million.

That's at the low end of what Ford predicted for the first part of the year, but Mulally said the company's restructuring efforts are on or ahead of plan, preparing it for trouble.

"As hard as it is, as many people and facilities that it affected, it's really going well," he said of the plan.

Jim Press, vice chairman and president at Chrysler, said one bright spot in the slow economy is that it affects all automakers equally. Of all major automakers, only Honda Motor Co. saw a substantial sales increase in February.

"It rains on all sides of the street," Press said.

GM shares fell 38 cents, or 2 percent, to close at $19.03 Wednesday while Ford shares rose 16 cents, or 3 percent, to $5.45.

[ringlefield]

Along the same lines:-

A Japanese company ( Toyota ) and an American company
(General Motors) decided to have a canoe race on the
Missouri River Both teams practiced long and hard to
reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided
to investigate the reason for the crushing defeat. A
management team made up of senior management was
formed to investigate and recommend appropriate
action.

Their conclusion was the Japanese had 8 people rowing
and 1 person steering, while the American team had 8
people steering and 1 person rowing.

Feeling a deeper study was in order, American
management hired a consulting company and paid them a
large amount of money for a second opinion.

They advised, of course, that too many people were
steering the boat, while not enough people were
rowing.

Not sure of how to utilize that information, but
wanting to prevent another loss to the Japanese, the
rowing team's management structure was totally
reorganized to 4 steering supervisors, 3 area steering
superintendents and 1 assistant superintendent
steering manager.

They also implemented a new performance system that
would give the 1 person rowing the boat greater
incentive to work harder. It was called the 'Rowing
Team Quality First Program,' with meetings, dinners
and free pens for the rower. There was discussion of
getting new paddles, canoes and other equipment, extra
vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower
for poor performance, halted development of a new
canoe, sold the paddles, and canceled all capital
investments for new equipment. The money saved was
distributed to the Senior Executives as bonuses and
the next year's racing team was out-sourced to India .


Sadly, The End.

Here's something else to think about: Ford has spent
the last thirty years moving all its factories out of
the US , claiming they can't make money paying
American wages.

TOYOTA has spent the last thirty years building more
than a dozen plants inside the US . The last quarter's
results:

TOYOTA makes 4 billion in profits while Ford racked up
9 billion in losses.

Ford folks are still scratching their heads.

IF THIS WEREN'T SO TRUE IT MIGHT BE FUNNY

[peter]

I can confirm that it is all true. The Japanese actually bought the GM canoe, and are still succesfully campaigning it in Europe.

As US goes into recession, the (not so) Big 3 are discovering that the market is contracting, and customers are looking at the fuel efficient economy vehicles offered by importers. So, the (increasingly not so) Big 3 will have to offer discounts and deals to sell their products.

Importers will grow their total sales and market share. When the upturn comes few customers will want to go back to the Big 3 products.

Strangely, this cycle is not unique. The first wave launched the original VW beetle, the 73 energy crisis launched the Japanese.

It won't get better for the (smallish ?) Big 3 very soon. GM & Ford are offering some of their European derived products in US but these products are losing out to the Japanese in Europe, too.

Expect more bad news with 2008Q1 early results due tomorrow.


Peter

[ringlefield]

It has been like that for as long as I can remember.

In the 1960's, the US car industry complained, vociferously, about trade imbalances with Japan, whist steadfastly refusing to produce RH Drive, compact, vehicles to suit the road conditions in japan.

Their whole car industry is based on mass-produced cars built down to a price rather than real quality, based on engineering excellence and this reflected the undemanding standards of the majority of their customers.Unfortunately for them, the world had moved on since the 1960's whilst, by and large, their car industry has not.They are still producing huge gas-guzzling 4x4's with primitive engines and suspensions, whilst countries like India, with its huge potential market has to develop its own cheap and cheerful small cars.

[peter]

News & Features April 1, 2008, 3:42PM EST

Automakers could only wish that the March sales numbers reported on Apr. 1 were a joke, but no one was laughing.

U.S. light-vehicle sales for the month of March fell 12% from the year-ago month, to 1,356,868. That was the worst result so far this year, based on monthly year-over-year comparisons. For the first quarter of 2008, U.S. sales were down 8% from the year-ago quarter, to 3,577,293.

Each of the Big Three had large double-digit sales decreases in March: General Motors (GM) fell 18.9%, to 277,751. Ford Motor's (F) sales dropped 14.2%, to 212,379. And Chrysler's fell 19.4%, to 166,386.

The news wasn't much better for imports. Sales also fell 10.3%, to 217,330, for Toyota Motor (TM). Honda Motor's (HMC) dropped 3.2%, to 138,734, and Nissan's (NSANY) fell 3.8%, to 106,921.

Full article :

http://www.businessweek.com/lifestyle/content/apr2008/bw2008041_036455.htm

[peter]

Toyota takes Q1 world sales lead from General Motors after overtaking it in production in 2007

DETROIT (AP) -- Toyota took the global sales lead from General Motors in the first quarter, capitalizing on growth in China and Europe as GM saw its North American sales drag down gains in other markets.

Toyota Motor Corp. said Wednesday it sold 2.41 million vehicles in the January-March period, compared with General Motors Corp.'s 2.25 million, prompting one industry analyst to predict that 2008 would be the year Toyota unseats GM in global sales.

Toyota reported steady demand in Asia and strong demand in Europe, while GM said it had record sales in its regions outside of North America.

GM barely won the global sales race with Toyota last year, but Toyota overtook it as the world's top automaker as measured by global vehicle production in 2007.

The sales numbers didn't surprise GM. Mike DiGiovanni, the company's executive director of global markets and industry analysis, said GM expected to be outsold in the first quarter, pointing out that the same thing happened from January through March last year.

He said the company is more focused on turning around its North American operations and becoming profitable worldwide than it is on beating Toyota.

"We obviously want to win, and we'd like to be No. 1 in sales at the end of the year," he said. "But really our focus right now is on profitable, sustainable growth across the world."

GM said it posted record sales in three of its four regions, but a 10 percent drop in North America pulled down the overall numbers. Sales were up 8 percent outside of North America, the Detroit automaker said.

A record 64 percent of GM's sales in the latest quarter came from outside the United States, with the company reporting nearly 20 percent growth in the Latin America, Africa and Middle East region, 6 percent growth for Asia Pacific operations and 3 percent growth in Europe.

GM sold roughly 2.27 million vehicles worldwide in the first quarter of 2007.

The figures show that it's likely Toyota will outsell GM worldwide this year, even if the U.S. economy recovers in the second half, said Jesse Toprak, chief industry analyst for the auto information site Edmunds.com.

"GM is probably going to have some recovery in the second half of '08 in the U.S. market," Toprak said. "That's not going to be significant enough to make up the difference, and also Toyota will recover as well if the whole market recovers here."

Toyota's U.S. sales weren't hurt as badly by the economic downturn as GM's were, dropping only 5.6 percent for the quarter compared with GM's 10.9 percent decline, according to Autodata Corp.

GM on Wednesday issued a more pessimistic forecast in the U.S. than it had previously, predicting that record high gas prices could drive second-quarter sales below first-quarter levels.

"This is clearly a headwind that we didn't anticipate to be at this level, so that's factored into our thinking as well," DiGiovanni told reporters and industry analysts on a conference call.

But he said the fundamentals are in place for a recovery in the second half of the year with the federal government's economic stimulus checks and interest rate cuts taking full effect.

DiGiovanni said gasoline prices can't be predicted, but GM is preparing for increases.

"It's affected by so many factors, both political, societal, tangible in terms of what the actual physical reserves in the ground are and the cost to get at them. It's affected by refineries. It's affected by pipelines. It's affected by anything that can go wrong in the whole chain. And now it's affected by speculation, which is driving part of it. So I do not think this is something you can forecast," he said.

But DiGiovanni said GM has raised its internal forecast for gasoline prices aggressively.

With new cars and crossover vehicles already out or coming this year, DiGiovanni said the company is well positioned to capture the market as it continues to shift away from trucks and sport utility vehicles.

"Our portfolio is moving in the direction the market is moving," he said. "Part of that's luck and part of that's planning."

Toyota, meanwhile, said its worldwide production expanded 7 percent from a year earlier to 2.54 million vehicles.

Toyota, which built its business in the decades after World War II by imitating American automakers, said output of popular, fuel-efficient small cars such as the Corolla model grew strongly in China, while production of pickup trucks rose steadily in Thailand during the quarter.

GM shares rose 42 cents, or 2 percent, to $20.93, in afternoon trading Wednesday while Toyota fell 95 cents, or 0.94 percent, to $99.61.

In the Japanese fiscal year through March 2008, Toyota's global output rose 6.4 percent from a year earlier to 9.66 million vehicles.

Honda Motor Co., Japan's No. 2 automaker, said its global production rose 4.5 percent from a year ago to 1.02 million vehicles in the January-March quarter.

Nissan Motor Co. said its global output rose 9.4 percent from a year ago to 950,878 vehicles during the quarter.

[peter]

Leaving the small and economy car market to importers has, of course, put US manufacturers in a very difficult position in these high fuel cost times. They don't have US product for their customers, and it will take time to either bring them on stream or modify Euro models from Opel.

Auto stocks slide with poor US sales results ahead
Tuesday, July 01, 2008 7:51:00 AM


Shares of General Motors Corp. dropped to their lowest level in more than half a century, and Ford Motor Co. stock tumbled to a new low yesterday, a day before U.S. automakers announce what's expected to be a bleak monthly report today on auto sales.

GM shares hit $10.57 shortly after the market opened yesterday, falling below the previous 52-week low of $11.21, which was also their lowest level in more than 53 years. But the shares later rebounded to $11.50, down 5 cents, or 0.4 percent, from Friday's close of $11.55. They have traded as high as $43.20 in the past year.

The last time GM shares dropped below $10.57 was on Sept. 22, 1954, when they hit $10.47, according to the Center for Research in Security Prices at the University of Chicago. The price is adjusted for splits and other changes.

Ford shares on Monday fell to $4.46, below the previous 52-week low of $4.90, before recovering to close at $4.81. That was still down 17 cents, or 3.4 percent, from Friday's close of $4.98. The shares have traded as high as $9.70 over the past year.

Ford, GM and privately held Chrysler LLC have seen huge sales declines ever since gas prices started to rise dramatically in February and the U.S. market shifted away from trucks and sport utility vehicles to smaller, more fuel efficient cars and crossovers.

All have cut production of pickups and announced plans for additional new small vehicles, but those won't reach showrooms until sometime in 2010.

June sales figures are due out on Tuesday.