Episode 629 – Ford’s Impressive Profits, India Rising, Volt and LEAF Ace IIHS Crash Tests

April 26th, 2011 at 12:00pm

Runtime 9:03

Ford is back on track.  It just posted impressive profits for the first quarter of 2011.  Analysts are predicting the automotive industry in India will surpass those in Brazil, Russia and Europe by 2015.  The Chevy Volt and Nissan LEAF just aced the Insurance Institute for Highway Safety’s rigorous crash tests.  All that and more, plus a look at a safer way to refuel racecars.


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This is Autoline Daily for April 26, 2011. And now, the news.

For the first three quarters of last year, Ford Motor Company posted impressive profits.  But in the fourth quarter Ford’s earnings dropped off dramatically.  It’s like the wheels fell off the car.  And so Wall Street has been waiting with bated breath to see if Ford’s first-quarter earnings would show that the company is back on track. Well, the results are in, and they’re back to being impressive.  Ford sold 150,000 more vehicles in the first quarter of this year compared to last, but what a difference those sales made.  Revenue was over $33 billion for the first three months, $5 billion more than a year ago.  Net profits hit $2.6 billion, an increase of $466 million.  The company also paid down another $2.5 billion in debt. North America and the United States in particular, is where the company made most of its money, $1.8 billion in pretax profits.  In Europe the company posted a $293 million profit, twice as much as a year before, which vindicates its strategy of going after profits in Europe instead of market share.  In South America Ford posted a profit of $210 million and in the Asia-Pacific region it earned $33 million, both more than before. The Asia-Pacific region, of course, includes China.  As I’ve pointed out before not many automakers are making big bucks by selling cars in China. However, Ford’s revenue jumped by nearly half a billion dollars and it’s that kind of growth that has automakers dreaming of making a fortune there some day. All in all this is an impressive performance from Ford. Bravo Alan Mulally! Now we’ll have to wait for Volkswagen’s results to see which automaker is the most profitable in the world.

INDIA RISING (subscription required)
The automotive industry in India is projected to pass Brazil, Russia and the rest of Europe by 2015. That would make India the fourth-largest car market in the world behind China, the U.S. and Japan. This is from a report from global consulting firm Booz & Co., which says that over the next eight to 12 years automakers will invest $35 billion in India and predicts there will be much more competition, especially from VW and Toyota. Last year total sales in India were 2.7 million units.  The report predicts that by the end of the decade sales could be as high as 6 million units. The reason they’re so bullish on India is due to strong economic growth. The country’s GDP has increased nearly 8 percent every year since 2004. And there is a growing middle class in the country estimated between 100 and 150 million people.

And speaking of changes in the ranks, Toyota could slip to third place in the automotive race due to the disaster in Japan. GM may take back the top spot with VW moving into second.

Back to China for a moment.  GM stopped building minivans for the U.S. market in 2008 but over in China they’re still selling well, but as a luxury model. The Buick GL8 minivan is mainly sold as a chauffeured ride for executives. The GL8 sells for $35,000 to nearly $60,000. The company makes a huge profit on it because it’s based on the old platform.

Good news for EV owners.  The Chevy Volt and Nissan LEAF just aced the Insurance Institute for Highway Safety’s rigorous crash tests.  The two electrics earned TOP SAFETY PICK honors from the organization.  This is the IIHS’ first-ever test of mainstream electric cars.  Look at that sheet metal bend!  You can almost feel the impact. Protecting those batteries is hyper critical.  Here’s what happens to a lithium-ion battery when it’s punctured or crushed. In just a matter of seconds temperatures soar to nearly 100 degrees Celsius which is over 200 degrees Fahrenheit. And once they start burning they’re very difficult to put out.

Last year Lincoln began offering customers in the American market the chance to buy a hybrid version of the MKZ for no extra cost over the regular powertrain in the car. So far, the results seem to be mixed. Sales of the hybrid are hovering a little above 20 percent of the mix. Lincoln says that in Southern California that take rate is more like 60 percent. Even so, I find it amazing that three out of four buyers do not want a hybrid, even if they do not have to pay more to get it. Now, maybe these numbers will change somewhat with the recent rise in gasoline prices, but this suggests to me that the public is not very enamored of hybrids, and calls into question how enthusiastic they’ll be for electric cars.

And maybe here’s the reason why Americans don’t like hybrids.  Ram just introduced a new concept pickup called the “Long Hauler.” Built off a Ram 5500 commercial chassis this thing features a wheelbase that stretches nearly 198 inches!  Included in that span is a four-door MegaCab body and an eight-foot bed.  Perhaps even more eye-opening than its sheer size is how much fuel it holds.  It’s got room for 162 gallons of diesel! Let’s see, at today’s prices it would cost about $700 to fill the tank. That should be enough dinosaur juice to cross the continental United States with just two pit stops.  No word on if or when this beast will get built, but there shouldn’t be anything stopping Chrysler from putting it into production, except of course demand.  There probably aren’t too many people out there that need to tow over 19,000 pounds.

The Indy 500 is coming up next month and they’ve just introduced some new technology on the cars to prevent them from catching on fire.  More on that, after this.

One of the most dangerous times in a race is during a pit stop.  The fuel is forced into a red-hot car making fires a constant danger.  So the IndyCar series just came up with some clever technology that addresses this problem.

Just some housekeeping here: if you tried to download the most-recent podcast of Autoline After Hours — number 99 with Barb Samardzich — and got the wrong show, the problem has been fixed. You can re-download the show from iTunes or the John’s Journal page of AutolineDetroit.tv. Thanks to everyone who helped us track down this error.

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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44 Comments to “Episode 629 – Ford’s Impressive Profits, India Rising, Volt and LEAF Ace IIHS Crash Tests”

  1. tj Martin Says:

    Discerning buyers , with a modicum of engineering understanding and even the slightest amount of common sense see Hybrids for what they really are .

    A Feel Good About Yourself (even though your Hybrid is an Ecological disaster ) overly complicated , under performing , difficult to repair ( ask a mechanic ) Pretentious bit of Fluff guaranteed in the long run to cost you more than owning an ICE no matter what the initial cost , or the price of gas .

  2. Ralph Kercheval Says:

    With all the negative information available on Hybrid’s and EV’s and the fact that they are not selling at anywhere near the rate expected why is it that the administration keeps trying to force feed us (the average consumer) the Hybrid and EV Kool-Aid??

    Just remeber you can vote with your pocket book as easily as the voting booth. TELL THEM TO MIND THEIR OWN BUSINESS!!

  3. Phoenix Mark Says:

    The government just keeps trying to push on a rope. Isn’t the definition of insanity doing the same thing over and over expecting a different result?

  4. dcars Says:

    I think were getting the kool aid because of the volatility in the oil producing countries. These countries are not stable and diversity in our energy needs is needed to protect our economies.

  5. Brett Says:

    Darned right! Let’s all keep our hands in our pockets and a-hold of our wallets until the perfect replacement for the internal combustion engine springs forth complete and perfect in all the dealer showrooms. The wonder of the free market’s gonna make that happen any second now!

    Just like the transcontinental railroad, the Interstate Highway system, the network of airports (heck, aviation itself), and stuff.

    No doubt that as long as people keep buying IC powered cars and trucks the manufacturers will keep working day and night for a suitable replacement, I’m sure of it!

    What color is the sky where you people live? I can’t quite make it out from here on Earth where I live.

  6. pedro fernandez Says:

    Now the govt wants to tax EV buyers because they’re not contributing to the gasoline tax. At the same time they’re giving incentives to buy these same EV’s. What a freaking joke is this.

  7. Brett Says:

    Mark, you mean like proclaiming “government doesn’t work!” over and over and over, despite facts to the contrary?

  8. Phoenix Mark Says:

    MB is advertising special financing rates on certified used cars here in Phoenix.

  9. Kit Gerhart Says:

    Come on, tj. A hybrid Fusion (same as MKZ) gets 70% better city gas mileage and 29% better highway gas mileage than the V-6 conterpart, and the hybrid does 0-60 quicker than our Minis in CR’s tests. Also, reliability is not much of an issue with these cars, and most people who buy the Lincolns probably trade them as soon as they are off warranty.

    People who pay $8K extra for the Lincoln name plate are not concerned about gas mileage, or at least they weren’t until recently when gas prices started increasing.

  10. Phoenix Mark Says:

    Brett, Government works, just not a efficiently as a semi-free market system.

  11. pedro fernandez Says:

    As regular cars reach 40 mpg hwy, I think Hybrids and especially electrics are going to become even a harder sell as gas passes $4 a gallon and govt incentives to buy them end.

  12. David Sprowl Says:

    It is NO SUPRISE that hybrids will not sell. Economics dictates what sells and what does not. The cost or owning and operating a car also include replacement and depreciation. With battery cost looming between 3500-9000+ few will want the depreciation hit. For those that keep cars to the 150-200K range, that cost is killer. The volt is great, but until that battery can be replaced for no more than the price of a set of tires and the up front cost are no more than a 10% premium the idea will not catch on mo matter how much the government throws at it.

  13. shan Says:

    The whole pricing system of refined petroleum is totally rigged!! As soon as cars (ICE) start achieving 40 mpg and soon plug-in hybrid will get over 50+ mpg, guess what…….price of gas creeps up higher. All the so called analysts and talking pundits will spew nonsense about supply and demand and the current middle east crisis. It’s pure greed via oil companies and the Saudi Royal families. Electric cars are a joke and hybrids are even a bigger joke. The silver bullet is the fuel!

  14. dcars Says:

    I was wondering if most foreign car companies operating in China will ever make significant profits their. It seams to me that the Chinese government will keep putting more and more restrictions on them until they have squeezed all the technology out of these companies.

  15. Lex Says:

    I was at the NY Auto Show this weekend and took a ride in the Chevy Volt. What I liked the most was the silent operation and the informative display screen on the center stack. My only issue was that the Federal Rebate for EV’s is $7,500.00, and the Chevy Volt Representative said the New Jersey residents get an additional NJ Rebate of $5,000.00. Why is NJ able to give an additional $5,000.00 Rebate to EV buyers (Bravo Gov. Chris Christie) and New York does not? Gov. Andrew Cuomo needs to promote EV’s or at least match NJ’s Rebate for those counties in the NYC, Long Island and the Lower Hudson Valley, where most of the states tax revenue comes from.

    My Family of four paid $48.00 for admission to the NY Auto Show (Website price) and $53.00 for parking. There were not freebie’s except for tote bags. What a ripe-off!

  16. pedro fernandez Says:

    Lex, no wonder NJ is going bankrupt, then to top it off, there’s decreased gas tax coming in due to the high mpg’s these cars get. This is why they want to implement the tax by driving system nationally.

  17. RS Says:

    What about CNG – the most plentiful fuel in North America? The technology is already here, existing vehicles can be converted if necessary.
    Use our own home produced oil for lubrication instead of burning it in the tank.
    This gets us off the OPEC udder for good!

  18. Kit Gerhart Says:

    The problem with CNG as a fuel for a “do everything” car is limited range, and no refueling infrastructure. As a commuter vehicle for someone who has gas plumbed to their home for heating, it could work well. A car that could use either CNG or gasoline sounds like a good idea, at least on paper.

  19. Sean T Says:

    I agree Kit, the ‘low’ take rate of MKZ hybrids reflects only on luxury car buyers (not nearly as concerned about fuel prices). Plus, the V6 gets 263 hp versus a hybrid at 191 hp (gas + electric motor) and there is still a technology acceptance hurdle for the vast majority of the public who have never owned a hybrid.

  20. Kate McLeod Says:

    Fuel Safety Interlock. Isn’t that Honda’s technology? To prevent fires during refueling in the pit?

  21. Mike G Says:

    Holy Cow Batman. If that Dodge were a hybrid or electric, it would require 1.21 jigawatts just to get it up to 60 mph. Forget about taking it into the future. Way to “read the times” Dodge. Next time just take a school bus and put a box at the back end.

  22. RS Says:

    There are only two existing infrastructures for motive power: gasoline and electricity. The next closest realistic alternative is CNG. Is there any urban area on this continent that does not have a natural gas pipeline? I would venture to guess that the most of the gas stations in any urban area have a natural gas connection right now.
    Our electric grid is becoming stressed right now – before adding in all the high voltage charging systems that would be required for home and public recharging. The Japanese disaster has brought a frightening preview of the dangers of nuclear power.
    Of course there would be modification needed for wide spread use of CNG. But this is not as far-fetched as any of the other alternatives. Kit, if memory serves, I think there have been a couple of engines developed that can use CNG and gasoline.

  23. Chuck Grenci Says:

    CNG could be good, however, problems arise with safe storage (very high pressure and robust containment tanks are required), and while certainly not exclusionary, you’re probably talking a higher priced vehicle. CNG vehicles, like the newer hydraulic driven hybrids, seem at this time, to be more suitable for heavy trucks and fleets (with central refueling being a more feasible system for maintaining these fleets). And as far as the “OPEC udder”, less than half our imported oil currently comes from OPEC (though I see what the OP is referring to; getting off foreign oil).

  24. dcars Says:

    I’m looking into cng trucks for my place of business and met with the Natural gas rep. He notes that the many big users are converting and his company is installing retail stations at their sites for anyone to use.
    T-Boone Pickins is getting richer.

  25. Kit Gerhart Says:

    Honda sells a CNG Civic, or at least I think they still sell it. It is slower than a regular Civic, has less range, and the gas tank takes up a lot of trunk space.

  26. pedro fernandez Says:

    Well, the IMF just announced the US economy will play second fiddle to China’s by 2016. Thank you Mr Nixon and all your successors for bringing us into the downward spiral towards third world economy status.

  27. tj Martin Says:

    So lets see here .

    If I buy an E/V ( which I wouldn’t ) the Government will then give me a Tax Rebate . Except ……. now that some smart acre has finally figured out that with said E/V I won’t be contributing to Roads Maintenance ……… So the Government is going to charge me a Penalty for buying said E/V .

    Any bets said Smart Acre will also figure out Hybrid owners aren’t paying their Fair Share either and start penalizing them as well ?


    Damned if I do . Damned if I don’t . Might as well DON’T , stick with ICE and enjoy driving for awhile longer

  28. tj Martin Says:

    FYI ;

    Bllomberg CNBC and MSNBC today announced there is an over supply of Oil , so the high prices are not being driven by Demand

    Well unless you consider the Demand of the Oil Companies to rape us of each and every dollar they can , as long as there seems to be a viable excuse to do so .

  29. pedro fernandez Says:

    The demand is coming from merging economies (China). so even if we cut back here, the demand will still continue to increase. Just like 2 yrs ago., I am seeing drivers with their windows open, even though it’s like 90 degrees and humid around here.

  30. XA351GT Says:

    Well one thing to consider why Lincoln Hybrid sales are not better is the average age of the buyers. Which is what 65-70 YO.? These people are set in their ways and NOT going to take a risk on something they probably don’t understand. My dad is 80 and there isn’t a snowball’s chance in hell he’d ever buy a hybrid . Want hybrids and E/Vs to work properly? Get he U.N. to set a mandate that China and India can ONLY buy hybrid and E/Vs . Since their governments don’t follow the EPA standards that the West does . It’ll improve the air there and leave more oil for us :-) .

  31. cwolf Says:

    All this global automotive and related news has become disheartening to me.Big guys are trying feverishly to get a bigger piece of the pie, while others struggle to stay alive.But, what I see are American companies sacrificing the foundations of our country for more dollars,yet convienently forgetful of the taxpayers who saved them from their oun demise. No boubt Ford is doing wonderful things,it is their moment,yet how can we enjoyce when only 35%(avg.)of their vehicles are actually American, while up to 70% of the components are U.S.of several Asian brands!If it seems backwards,it is; and I believe unfair trade policy and a states need to create jobs made it so. And one can’t blame the state in these desperate times.
    But beware! we are now between a rock and a hard place. The US productivity/man is up,but many are doing esentially two or more jobs and are getting tired. Soon companies will have to hire as the economy moves forward. As a result,the stock market will peak and interest rates will move upward.Add increased fuel & food prices,then ask who can afford to buy the things we produce! Lowering labor rates to those of other nations,to create more jobs, seem the answer,yet it’s the wages driven by unions that promote purchases. We, as Americans, need to keep wages high(within reason),buy less foreign(even Ford stuff from Mexico) and demand more stringent trade policies. And since I am a UAW worker,let me be first to require that I earn my blessed wage and to encourage both sides to work together to either re-train or fire those who unqualified.
    In short: Invest in AMERICA

  32. cwolf Says:

    Since a kid, I always dreamed of owning a Linc. or Caddy,but now that I have a few extra bucks I’m not that eager to waste the money. My wife still hs an eye for the MKZ. It does not include the hybred,for sure! For her its about everything but the want for extra mpg. If mpg is a leading factor,buy the Fusion and save the difference. Ford just doesn’t get it! Lincoln is history if they don’t take what may be their last chance.

  33. pedro fernandez Says:

    Fusion is made in Mexico, cwolf, perhaps an American-made Malibu might be more appealing to you and the Missus. I think the upcoming Focus is also made here and from the initial reports I have read, it will take sales away from Fusion

  34. cwolf Says:

    @pedro: Your responces,past and present, have been very kind and thoughtful; Thank you.
    Your alternative is well taken,but perhaps my disappointment in the Lincoln brand,itself,was not evident and clear to the point.

    I test drove a Focus yesterday and own a Milan. As nice as the Focus is and pleasant the ride, it is in no way in the same league as the Milan/Fusion. The difference in ride comfort is in the wheelbase of the two. I am torn between sacrificing the ride I have enjoyed for better milage. At this time,my emotions are at a draw,but may become swayed to a smaller car once I drive the Cruze later in the week.

  35. HyundaiSmoke Says:

    Yawn Toe Jam, get over it dude. In 10 years all ICEs will be a Hybrid of some sort- OR WE WONT BE DRIVING CARS, PERIOD!!

    The day of the non-Hybrid ICE is numbered.

    The day of the Rare Earth ICE is numbered.

    Besides, this whole rare Earth thing, just like oil is nothing more than “scarcity by design.”

    There’s plenty of oil and rare earths, but we also live in a world where Globalist consortiums work to get the common man out of cars by 2050.

    So they create this propaganda, which is nothing more than “Scarcity by Design.” Oil does pollute, Rare Earth Extraction is environmentally destructive.

    However, that doesnt hid the fact that US has 8 times more oil than Saudi Arabia in the Rockies. It will not be extracted by the Masters until WTI gets to $200 a barrel.

    Cars would be better as 1000 Mile range EVs with 5-10 minute fast charging, powered by Cold Fusion Nuclear plants anyway.

  36. HyundaiSmoke Says:

    It’s all about control, and Automobiles out of anything on the planet provides the most freedom.

    The Automobile is the ultimate universal Democracy. Even in Saudi Arabia, once you get behind that wheel you’re free.

    The Masters loathe that idea.

    Continue to watch your corporate news, though.

    A shame.

  37. HyundaiSmoke Says:

    Cars, Guns, and God= Universal Democracy for all.

    The masters are in the process of getting rid of all 3 for the common man.

  38. cwolf Says:

    Smoke, GO AWAY! You have no clue how to make a logical argument. Your country needs and wants you–please go to your homeland and never return. And happy trails.

  39. HyundaiSmoke Says:

    Well, if you think I’m trying to make an argument. Then you have no clue how to determine what is a logical argument.

    It’s not an argument, it’s fact.

    I dont argue. I state reseachable, verifiable fact. Want to find out? That’s what your computer is for.

    BTW, the TATA Manza looks better than a Corolla.

  40. dcars Says:

    I disagree the Tata Manza looks like a Yaris sedan and thats a pretty ugly car.

  41. pedro fernandez Says:

    Yeah, specially in “Flaming Red”. (fire extinguisher optional as part of the safety package.)

  42. Kit Gerhart Says:

    There is about one year’s worth US consumption of oil in those western deposits. Check it out. Try snopes.com as an easy place to begin your research.

  43. shan Says:

    Just give in……and get a really refined car, the Toyota Avalon

  44. HyundaiSmoke Says:

    Kit, Snopes is a propaganda tool for the elite to debunk many dangerous to the machine’s facts.