April 26th, 2011 at 12:00pm
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.
This is Autoline Daily for April 26, 2011. And now, the news.
FORD’S Q1 EARNINGS
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.
BUICK GL8 MINIVAN LOOKS GR8
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.
VOLT AND LEAF ACE IIHS TESTS
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.
MKZ HYBRID NOT SELLING
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.