Episode 445 – More OEM Profits, Hydraulic Hybrids, Kia Sportage Styling Tour

July 29th, 2010 at 12:10pm

Runtime 7:46

More OEMs are pulling in very impressive profits, but analysts we could still face a downturn. Eaton’s hydraulic hybrids will go into practical use in recycling trucks. Hyundai’s aggressive sales goals could be in jeopardy as U.S.-Korea trade relations get tense. All that and more, plus we get a personal styling walkaround of the new Kia Sportage from the vehicle’s designer.

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Transcript and Story Links after the jump . . .

This is Autoline Daily for July 29, 2010. And now, the news!

More and more automakers are reporting profits, and the numbers are really impressive. Analysts warn that earnings could fall in the second half of the year, but for now a lot of automakers are popping the champagne corks. Volkswagen posted a second quarter net profit of €1.2 billion, which is about $1.6 billion. That’s four times bigger than the profit it reported a year ago. However, Bloomberg reports that two of VW’s brands, Seat and Bentley, both lost money.

Now we swing over to Japan, where Nissan reported a quarterly net profit of $1.2 billion. That’s nearly double what analysts had expected and was way up from a loss that the company posted a year ago, and puts the company way ahead of its own forecast for the year.

And in South Korea, Hyundai’s profit shot up by more than 70%. It too earned a net profit of $1.2 billion, which was slightly better than analysts expected. The company also raised its sales goal for the year, which had been set at nearly 3.5 million vehicles, but it did not reveal what the new sales goal is.

But that sales goal could cause trade problems between the US and Korea. Ron Kirk, the US Trade Representative, said yesterday that it is unacceptable that Korea sells so many cars in the United States, while so few American cars are sold in Korea. Bloomberg reports that last year, Korean automakers sold 750,000 vehicles in the US, while barely 6,000 American cars were sold in South Korea. Of course, Hyundai and Kia manufacture some vehicles in the US, and General Motors imports the Chevrolet Aveo. So it’s not as black and white as it’s sometimes portrayed. The US and Korea, as well as the European Union and Korea, are currently negotiating free trade agreements, and automobiles are playing a central role in those negotiations.

EXPLORER GOES GLOBAL (Subscription required)
And speaking of exports, Ford says the new Explorer will become the most exported vehicle coming out of North America. Ward’s reports that Ford will export the vehicle to 90 different countries, including to Japan, even though there will not be a model with right-hand steering. No word yet on what kind of sales volume all these exports might represent. And by the way, we’ll have the marketing manager of the Explorer, Amy Marentic, on Autoline After Hours tonight.

Uh-oh here we go again, Toyota’s issued another recall, and it’s a dangerous one. According to the AP, the company is recalling over 400,000 vehicles due to a steering problem. 373,000 Avalons are being recalled because of improper casting on the steering lock bar which can cause cracks to develop. Also nearly 40,000 Lexus LX 470s are being recalled because of a steering shaft problem. Let me tell you, when the steering breaks, you’re in trouble.

Eaton announced that Ann Arbor, Michigan will use recycling trucks equipped with its hydraulic hybrid system. Four Peterbilt trucks will be equipped with the system, which is expected to improve fuel economy and emissions by 30%. Unlike an electric hybrid system that stores power in a battery, the hydraulic system stores energy as pressurized hydraulic fluid. Every time you put on the brakes, that energy is converted into hydraulic pressure. The fluid is stored in a container until the driver hits the gas pedal which then helps to launch the truck. Not only does the system reduce fuel consumption it also doesn’t wear out the brakes as fast, which helps to save on maintenance costs.

Coming up next, we’ll have the guy who styled the new Kia Sportage take you on a styling tour of his latest creation.

Kia is really changing the looks of its cars, going from amorphous blobs to crisp, well-proportioned vehicles. Massimo Frascella is the designer of the new Kia Sportage. Autoline Daily just caught up with him outside of the hotel in San Francisco where Kia held the launch of the Sportage, and we asked him to give us his own styling tour of the vehicle that he styled.

Again, that was Massimo Frascella, the designer of the Kia Sportage.

Hey, don’t forget to tune in to Autoline After Hours tonight with me, the Autoextremist, Peter De Lorenzo, and David Welch from Bloomberg BusinessWeek. Joining us tonight will be Amy Marentic, the marketing manager on the new Ford Explorer. If you’ve got questions for Amy, make sure you get them in.

And that is it for the top news in today’s global auto industry. Thanks for watching, we’ll see you tonight, and tomorrow.

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15 Comments to “Episode 445 – More OEM Profits, Hydraulic Hybrids, Kia Sportage Styling Tour”

  1. dcars Says:

    Toyota is making some major mistakes with their cars. Sticking gas Petals, rotting frames, locking steering wheels and cover ups seams like pretty serious issues.

  2. Chuck Grenci Says:

    The hydraulic hybrids make sense for the big stop and go trucks (as would electric); these are the most beneficial vehicles that hybrids should be making head-way in. And also of course smaller stop and go vehicles, i.e. mail trucks, short hop delivery vehicles, etc.

  3. tj Martin Says:

    Oh this is just getting too funny . Once again Herr Shreyer is claiming responsibility for a design he didn’t do .

    Over at CAR UK there’s been a firestorm of debate as a bit of product placement advertising was attempted ( by CAR or KIA no one is admitting to ) and Shreyer gave away a copy of ” His ” design for the new Sportage .

    So much like Shreyer claiming he designed the Audi TT when we all know Freeman Thomas did , now he’s claiming on the UK sites to have designed the Sportage which John in is inestimable way has now revealed Frascella did .

    John you might want to give Signor Frascella the heads up on this before Shreyer , as he tried with Freeman Thomas , attempts to relegate Signor Frascella to the Also Ran bin .

  4. pedro fernandez Says:

    I see H/K moving more plants over here in order to avoid import quotas, the new Explorer is obviously designed to attract more women buyers and the fact that they put a woman in charge of sales is no coincidence. With VW profits way up , they really have no incentive to improve their reliability.

  5. Gary King Says:

    John, I love your show and try to see it over lunch everyday. Sorry, but one small criticism. On today’s Kia spot; does your cameraman use his cell phone to take the video? I have noticed several times in spots like this one you only get a very narrow view of parts of the vehicle. You don’t see, ever, the whole car or atleast the whole side/front or side/rear of the a to know what it really likes like. This drives me crazy! Help this guy get a real camera or some training.

    Thank you.

  6. Salvador G. Says:

    VW is making money, but from where JohnMc.??, because – I’m assuming most of that money comes from it Chinese sales if not all, like all othere Germans manufacturers.
    Nissan is cutting plants in Japan, so some of that money comes from that, snd since no new Nissan (other than the Leaf) has been announce – I wonder how much comes from Renault/Nissan EU. sales and it Chines sales.

    And -I am not kin on FreeTrade, rather than fight for more free trade, Why not input the Exact Same Tariff and other discriminating trade laws that the Asians have on U.S products – Againts their products.. and see how they like it… ‘ OH! You don’t like, We don’t like”.

  7. Kit Gerhart Says:

    Salvador G. Says:

    “Why not input the Exact Same Tariff and other discriminating trade laws that the Asians have on U.S products – Againts their products.. and see how they like it…”

    It seems to me that Japan is pretty accomodating regarding U.S. products, if they are going to allow left hand drive Explorers to be sold in their country. We don’t let the Japanese companies sell their right hand drive home market vehicles here for use on public roads, except maybe for use by the postal service.

  8. Brett Cammack Says:

    I have a hard time imagining driving a large, left-hand drive American vehicle in Tokyo… and enjoying it. If a left-hand drive vehicle is to do well in its category, it better be something that is chauffeur driven so that driving enjoyment isn’t a factor in the purchasing decision.

  9. Kit Gerhart Says:

    Brett Cammack Says:
    July 29th, 2010 at 1:42 pm

    “I have a hard time imagining driving a large, left-hand drive American vehicle in Tokyo… and enjoying it.”

    The Explorer, or any other big, left-hand drive cars sold in Japan, or the UK, would be strictly “niche” products for those who really want something different. I’ve heard that early, short wheelbase GM Astro/Safari vans have kind of a cult following in Japan. Go figure. I guess it is people who like the Scion xB, only want it bigger.

  10. John V Says:

    I read an article on hydraulic hybrid garbage trucks tested by EPA and a partner (possibly Eaton) in San Francisco, CA a few years ago. If my memory is correct, the article said they saved about 40% on fuel and over $12,000 annually on brake repairs.
    As other readers have pointed out, it is an extremely beneficial application of energy recovery technology in a vehicle.
    The technology will fit in well with Ann Arbor’s hybrid transit busses and other efforts to reduce the impact of consumption. It is important to the city’s image as well.

  11. John V Says:

    Addendum: That was $12,000 saved on each truck for brake repairs.

  12. Alex Kovnat Says:

    >Eaton announced that Ann Arbor,
    >Michigan will use recycling trucks
    >equipped with its hydraulic hybrid

    I’m curious as to how that system is arranged.

    A problem with rear wheel drive vehicles (you wouldn’t want pure front wheel drive for anything really big) is, if your hybrid drive system with regenerative braking only works the rear axle (or rear tandem axles), you’re limited as to how much regenerative braking you can have. The reason is, most braking occurs on the front wheels. The faster a vehicle slows down, the higher the percentage of braking that happens up front.

    So with a hydraulic-hybrid garbage truck (or any other truck or bus for that matter), you should have a hydraulic pump-motor on the front axle not so much for whatever benefits you could get from all wheel drive, as for improved regenerative braking.

  13. Kit Gerhart Says:

    In a garbage truck, or almost any other kind of real truck, well over half of the weight is on the rear axle(s), especially when loaded. I’m sure these garbage trucks would have their regenerative braking on the rear axle(s), and would not even come close to sliding tires when the regen braking is used to full effect.

    While most, or all of the production hybrid cars are front drive, they could probably get all their regenerative braking from the rear wheels without traction problems. The maximum regen braking you get in a Prius, Civic hybrid, etc. is way below what would slide even the lightly loaded rear tires.

  14. Nick Stevens Says:

    Just finished watching AAH. The attractive, young-looking (maybe she IS young as well) woman from FOrd did a good cheerleading job for the Explorer, but did not convince me. I noted how she did not even dare bet it will sell a measly 120,000 units a year, down from the 400,000++ units the old, dinosaur Explorer sold in 2001-2. She did not even dare confirm there will be a Lincoln clone of the Explorer. Pathetic.

    As for the decision to offer no V8s in Lincoln except in the aging dinosaur obese Navigator, they must be kidding. FOrd’s only Luuxry car division is in really bad shape, Mercedes, BMW Audi and LExus are eating their lunch, because they offer V8s NOT ONLY in their top Luxury Sedans (S class, 7 Series, A8, LS460, all four of which have NO Domestic rivals!!!!), BUT ACROSS THEIR RANGE TOO, even in the tiny C-class, IS, A4 and the M3!!

  15. Kit Gerhart Says:

    Lincoln is moving their cars down-market to replace Mercury, with the MKZ and MKS being fancier versions of Fusion and Taurus. It’s too bad the prices don’t reflect the badge engineered origins of these cars.