Episode 529 – GM IPO Largest in History, Mahindra in Dispute, Volt Fuel-Economy Numbers

November 29th, 2010 at 11:33am

Runtime 8:59

General Motors’ IPO was the largest one in history and the U.S. government’s ownership in the company is now down to 33 percent. Indian automaker Mahindra is in a dispute with its U.S. distributor about shipping its small diesel pickup to America. The EPA releases its official fuel-economy numbers for the Chevy Volt. All that and more, plus a look at the new Chrysler 200.


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

Well, it’s official. GM’s IPO was the largest one in history. Underwriters sold an additional 71.7 million common shares and 13 million preferred shares, GM reports. Add that to the shares that were sold earlier and the total came to $23.1 billion. Interestingly, while the common stock went for about $33 a share, the preferred stock went for $50. About 90 percent of all shares were bought by investors in the U.S., and about one-fifth of them were individuals, not institutions. The Detroit News reports that the government’s ownership in GM is now down to 33 percent.

Now to Europe. Fiat’s CEO Sergio Marchionne is trying to get unions in Italy to agree to boost productivity. If they do, he promises to invest over $26 billion in factories in Italy. Specifically, Marchionne wants to form a joint venture with Chrysler to build SUVs at the company’s Mirafiori plant that will wear the Jeep and Alfa Romeo brands. He wants to make 280,000 vehicles a year at the plant, and export a lot of them to North America. Here’s my Autoline Insight. Fiat has to deal with four different unions in Italy on a national level. Some of their plants can have half a dozen different unions in them locally. You think the UAW is a problem? They’re pussy cats compared to Italy’s unions. So Sergio wants a joint venture with Chrysler to force them to match Chrysler’s level of productivity, which right now is quite good. He’s going to use Chrysler’s plants as benchmarks that he’s going to force the Italian plants to match.

MAHINDRA IN DISPUTE (subscription required)
Over to India where Mahindra is in a dispute with its U.S. distributor about shipping its vehicles to nearly 350 dealers in America. According to Ward’s, Mahindra claims its contract with Global Vehicles to be its sole distributor in the U.S. expired. The trucks were supposed to arrive nearly two years ago but shipments were delayed because they needed to pass emissions tests. But Global Vehicles contends Mahindra, which had to pass the tests by a specific date, deliberately delayed certification to end the contract. Ten days after the contract expired Mahindra applied for and received its certification. Global Vehicles contends Mahindra did this in order to sell vehicles on its own and has filed a lawsuit to determine if Mahindra violated the contract. Also at stake is $35 million Global Vehicles paid to be the exclusive dealer of Mahindra pickups.

Now to China, where the new car market continues to grow and shows no signs of slowing down. That’s why Ford opened100 new dealerships in the country this year, the AP reports. That raises its number of dealers in the country to 340. Through October Ford sales are up 40 percent to nearly 470,000 vehicles.

But Ford has a long way to go to catch Hyundai in China. According to Bloomberg, Hyundai increased its sales forecast this year to nearly 700,000 units from 670,000. It’s also putting in the capacity for another 400,000 units.

And speaking of car sales in China, Bloomberg reports they’re expected to go up another 20 percent next year.

Last week the EPA announced the “fuel-economy” numbers for the Nissan LEAF EV, which, if you remember, stickers at 106 in the city, 92 on the highway. Well, now it’s Chevy’s turn. The Volt will deliver an equivalent of 93 miles per gallon in pure-electric mode with a range of 35 miles. The EPA calculates that number at 36 kilowatt-hours per 100 miles. After that, it estimates the gasoline engine will deliver 37 miles per gallon. In small print towards the bottom of the sticker, the Volt’s efficiency is compared to other cars in the compact class. Its “combined composite” score . . . whatever that means, is 60 miles-per-gallon equivalent. It must be some sort of average between the pure-electric and range-extended modes. Since EVs like the Volt are so different from regular cars, GM worked with the EPA to design this window sticker.

Every year there’s a design challenge at the L.A. Auto Show. Carmakers are invited to deliver a concept that best matches a set of predetermined parameters. Cadillac and smart won this year’s competition, but Nissan’s unusual-looking entry is worth mentioning. Called the iV, it’s the company’s take on a fun-to-drive, environmentally friendly, 1,000-pound vehicle. It’s wild looking for sure, but some of the would-be materials it’s made of are even crazier. They include a type of fast-growing ivy, and spider silk! According to Autoblog, it features something called a “bio battery,” plus it uses a supercapacitor to store regenerative energy. You know, a lot of times designers will put a car in their studio to inspire them. With the iV, it sure looks like Nissan had a Plymouth Prowler in there.

Coming up next, a look at the new Chrysler 200. Back in a moment.

I recently got the chance to drive all the-new vehicles Chrysler and Dodge are about to come out with. He’s my quick look at the car that replaces the Chrysler Sebring. As you know, they now call it the Chrysler 200.

Amazingly, Chrysler will be replacing the 200 and its equivalent at Dodge, the Avenger, in a little over two year’s time. Those new ones will be built off a platform provided by Fiat.

Don’t forget to tune in tonight for Open Line, the biggest party line in the world, where you can sit back and listen, or join in the conversation yourself. Call in at 218-936-6581. The PIN: 3051. Join host Michelle Naranjo tonight starting at 8:00 p.m. Eastern time, on Open Line.

And that’s today’s report on the top news in the global automotive industry, thanks for watching, we’ll see you tomorrow.

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30 Comments to “Episode 529 – GM IPO Largest in History, Mahindra in Dispute, Volt Fuel-Economy Numbers”

  1. Mark Hillman Says:

    GM’s share price today is below it’s IPO share price.

  2. tj Martin Says:

    One thing no one seems to mention when talking about sales numbers in China is ” What is the actual profit margin ? ”

    MSNBC today is reporting that GM’s profits from it Chinese sales is negligible , if any , because of the low prices they must charge to make their cars Affordable to the Chinese .

  3. tj Martin Says:

    The Marchionne Nightmare Grows Worse ;

    So now he wants to sell us an already unreliable Jeep , owned by Chrysler and FIAT . MADE IN ITALY !

    Brilliant . Next he’ll be selling us the already unreliable FIAT 500 . MADE IN MEXICO . Ooops . that ones already on deck . OK a Pathetically unreliable Maserati made in China .

    When Macaroni tells us he’s bringing over the FIAT Multipla thats when we’ll all know for a fact ;


  4. Zieke Says:

    Given the economy, the real unemployment, and the competition, you hotshot GM investors better not hold onto that stock very long unless you need a loss to balance out your tax bill. After all, who is going to be able to afford a new car? And why, at that price, would anyone want a Volt?

  5. Gerry Senal Says:

    Just a question John! While Chrysler/Fiat is replaceing the Sebring with the “200″ , will they be using this platform to replace the Sebring convertable or are they just going to drop it from their line up? Thanks!

  6. G.A.Branigan Says:

    Hey John….I posted the link to your mahindra story several months ago.What’s up? Slow news day?In fact every time there is an update on that story,I post the link here.I’ve been doing that most of the year,LOL.

    So why didn’t you report the rest? Like m&m are trying to establish a relationship with the very dealers that GV put together? Excluding some that they don’t consider to be exceptable,or the fact that GV recently tried to pay m&m 35 million dollars for the first shipment of tr20′s and tr40′s but was turned down by m&m.

  7. Phoenix Mark Says:

    Chryler 200 er Sebring, their they go again bringing out a “new” half baked model. Better to leave it a Sebring and on the full redesign go with the 200 name. How many years will the 200 be taited with the warmed over Sebring?

    Zieke, your right no one should be paying that much for the Volt even with the tax rebate it is expensive.

  8. pedro fernandez Says:

    Yesterday at the movies I had to sit through several Chevy ads, yes freaking $11 movie ticket and had to watch Chevy ads, anyways everything was Volt Volt Volt all this for a questionable vehicle, if it falls flat so will GM and their propaganda machine. ps not one word about the Cruze or upcoming Spark.

  9. Chuck Grenci Says:

    The “200″ looks like quite an improvement over the old Sebring; still not for me (but they’ll probably sell a bunch). Have seen quite a few new Chryslers on our trip to Florida last week; not dead yet.

  10. pedro fernandez Says:

    Chuck: I live in Fl and see a lot of Chrysler rental cars. If you see an Avenger, Sebring or Dodge minivan around these parts it is most likely a rental or as we locals refer to an “oh, no” car.

  11. HtG Says:

    I don’t know about everyone else, but seeing un-decontented cars is just so much easier on the eyes. John likes to remind us about how cheap the interiors of Chrysler cars have been, and I still get down about having sat in recent Dodges. Let’s hold our breath for a new general trend.

  12. pedro fernandez Says:

    Saw a review of the new Edge, now you got 2 screens to mess with. One where the odometer usually goes the other one in the center stack. why don’t they just blindfold the driver and have him use the “force” to avoid objects,

  13. Phil in Burlington Says:

    ahhh window stickers. Makes you wonder how the rest of the car buying public is supposed to understand all the numbers when even an automotive expert like John is left scratching his head at how they arrived at various figures.

  14. pedro fernandez Says:

    Th macarroni news is laughable, one question, will the italian line workers be allowed to get drunk at lunchtime with vino or do they need to import Colt 45 and Thunderbird?

  15. pedro fernandez Says:

    Hey what on earth happened to the Volt 230 mpg claim? Wow, that is quite a drop, I’m telling you, things looks worse and worse all the time for this car. A Sebring by any other name, or number, is still a Sebring.

  16. T. Bejma Says:

    “1.Mark Hillman Says:
    November 29th, 2010 at 11:54 am
    GM’s share price today is below it’s IPO share price.”

    Mr. Hillman needs to get the facts straight:

    As of 3:15PM, the low today is 33.07 (still above IPO) and is trading at 33.57. That’s all with the DOW 50-100 points low today and a 100 point hit last Friday…

  17. T. Bejma Says:

    “pedro fernandez Says:
    November 29th, 2010 at 2:37 pm
    Hey what on earth happened to the Volt 230 mpg claim? Wow, that is quite a drop, I’m telling you, things looks worse and worse all the time for this car.”

    It’s not the Volt that changed (it still does what it claimed from day 1) it’s original estimate was based on a draft version of the EPA calculation.


    MotorTrend Car of the Year and 10 Best, glowing reviews from anyone that has ever driven it (I’m going to tomorrow) including the media. Looks like things are actually not getting better and better, not worse and worse…

  18. HtG Says:

    Hi T Bejma, how about doing us typhoids a favor and giving the VOLT you drive tomorrow a bit of a kick? Tell us what it’s like breaking hard and changing direction. How quick does the software figure out how to respond to the throttle?

  19. tj Martin Says:

    @ T. Bejma

    What planet you been living on there ?

    “(the VOLT ) it still does what it claimed from day one ”

    Really . From DAY 1 the VOLT was promoted as a Hydrogen Cell Vehicle . Which ahhhh went by the wayside . Along with having an instantly adaptable platform . Errrr that ones gone the way of the DoDo as well . Then GM CLAIMED the VOLT was an extended range E/V . Only for the press and pundits to reveal it as an over priced Hybrid . And now the OUTRAGEOUS MPG claims from GM that one by one are falling by the wayside as well . From three different sources

    EVERY one who’s driven the car loves it ? Really ? Seems to me the NYTimes had nothing good to say about the car . The UK press thats driven it hate the thing along with its Ampera stable mate . Etc etc etc.

    Nope T Bejma . Time to get out of GM Land and touch base with reality .

    We’ve ( the American Tax Payer ) have been screwed by GM . Oh and the IPO started out at just over $35 . I’m not sure who’s math rules you live by but here in the good ole USA $33.07 is definitely less than just over $35 .

  20. tj Martin Says:

    T Bejma ;

    In case you haven’t heard as well . the Motor Trend COTY is bought and paid for by the manufactures and has had about zero credibility amongst serious car buyers/enthusiasts/pundits for years .

    And actually the first part of your mistype was the correct one . ” things are not getting better and better “

  21. tj Martin Says:

    I read a great quote that fits now even better than when it was written especially when it comes to those who’ve bought hook line and sinker into cars such as the VOLT etc .

    ” They’re Washing the Streets With the Blood of Your Kind ”

    Think about it

  22. pedro fernandez Says:

    So we bail out Chrysler and Mr M. wants to move plants to Italia, mama mia! what a fangul job have the feds and Fiat pulled on us taxpayers. Too bad it has cost so much tax money because an Italian-built Sebring or 200 whatever built off a Fiat platform is pretty hilarious crap.

  23. pedro fernandez Says:

    It’s no wonder the Korean midget with the Members only jacket is taking pot shots at his southern neighbors, he figures that with the bonehead moves this administration is making, they’ll screw up the response to his bullying also. Maybe Sergio Macarroni can come up with a solution for this too.

  24. dcars Says:

    It seams odd, I looked at a Dodge Avenger over the week end and the roof line looks drastically different from the Sebring. Aren’t they basically the same car? I hope Fiat can get Chrysler going again, lots of folks are depending on them for a paycheck.

  25. Joe Black Says:

    I have to totally agree with with you Pedro that a Sebring by any other name is still a Sebring. What most people fail to mention –or even see– is that these new and “improved” products from GM, Ford, and especially Chrysler are as a result of their bankruptcies. In other words, they couldn’t care less what they were selling to the public (crappy, unreliable products) until they all went bankrupt and HAD TO (meaning: NEEDED TO) build better products so that they would start making the big bucks again. I just don’t understand the mentality of the board members and CEOs of these companies who have the character –or lack of it– to offer us, the people, absolutely worst products and force us to buy them just because they are American brands. Shame on them! All people with any sense left who are still working for these criminals (the big three losers) should find new jobs and the the losers (the companies) should be left to die a miserable death. If you disagree with any of my points, hopefully the change in the market (the failure of Chrysler to sell its crappy products) will help you see the light. The Chrysler 200, like most Chrysler cars of past and present, is a complete joke. It offers absolutely nothing more than the competition, while being one of the ugliest cars ever made. What on earth will make me wanna buy it over a sedan from a different manufacturer? Will it be its style? Its price? Its reliability and safety? No. No. And hell NO. I’ll never pay for crap and if you have any sense left, neither should you.

  26. FrankCanada Says:

    Hey Pedro Fajitas, back off Marchionne, & Fiat. If you look at the historical Marshall plan, or 1940′s style bailouts. Japan & Germany got much more money, and help from the USA, then Italy did. Fiats have all ways been innovative, since hmmm… 1899! They set the standard for small fuel efficent cars, Italy in general, have been the bench mark for car crafters, since cars were invented! Marchionne is trying to break the back of the socialists in Italy. I bet that makes you bunch of red china lovers nervous. Or what ever wormed over appliance from germany & japan you cherish.

  27. pedro fernandez Says:

    By the way, it’s not fajitas, it’s Pedro Mojitos, thank you very much, and did you forget that innovative, wonderful Fiat had to haul ass from the US market because their crappy cars could not compete with the recently arrived Japanese brands, even though they still weren’t as good as they became, and as far I can read from European surveys, Fiat still lacks way in behind in reliability studies over there. But you may be right, a cinquecento built in the land of fajitas and tequila may just come here and put all these other cars to shame.

  28. pedro fernandez Says:

    Funny those small Japanese appliances are #1 and #2 in yearly sales in the US (John’s answer to my viewer mail) So I guess Americans still have little passion for Mexican built, passionate Italian brands.

  29. pedro fernandez Says:

    CNN -Money just put out a list of the 10 best cheap cars sold in US and the #1 seller Corolla is not listed, does this mean that Americans just don’t know how to pick cars or is there a disconnect between media and what the public really likes?

  30. Sarah Says:

    Looks nice. You can see the evolution for sure, kinda ridenms me of an Audi for some reason. I love chrysler for this fact alone: Domestic Luxury.Screw caddy, they’re grasping at straws when they try to go head to head with the germans. Ain’t no one cross shopiing a CTS with a 3 series. The ATS is promising but I suspect it has a major short fall (maybe the tranny and weight to power, like the CTS) The 300 was amazing and a game changer in my opinion and the 200, regardless of its faults, is a nice, strong looking domestic. Chrysler could have a winner if it keeps down this path.If the total package rivalled the koreans and japanese they would be taking their cookie every month. Once Fiat gets some of their small engine tech in there to boost fuel efficiency while increasing horses and low end torque, reduce engine weight, and so forth, chrysler could come storming back with this design language.Hugh Jorgan, I’m still waiting.