July 29th, 2010 at 12:10pm
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.
Transcript and Story Links after the jump . . .
This is Autoline Daily for July 29, 2010. And now, the news!
VOLKSWAGEN QUADRUPLES EARNINGS
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.
NISSAN STUNS THE ANALYSTS
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.
HYUNDAI PILES ON THE PROFITS
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.
US-KOREA TRADE FRICTIONS
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.
TOYOTA STEERING FAILURES
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.