October 26th, 2011 at 12:05pm
Ford has a good quarter but slips a bit in Europe and elsewhere. Meanwhile, the company takes it on the chin in quality ratings, but are these surveys worth taking seriously? John Mendel from American Honda says the company is about to rebound from losses suffered earlier in the year. All that and more, plus John McElroy answers your comments and questions in You Said It!
This is Autoline Daily for October 26, 2011. And here’s what’s happening.
FORD, YOUR SLIP IS SHOWING
Ford reported that its profits dropped slightly in the third quarter. The company brought in $4 billion more in revenue, thanks to selling 93,000 more cars than a year ago, but its pre-tax profits fell by $111 million. While Ford was solidly profitable in North and South America, its losses widened by over $100 million in Europe and by $13 million in Asia. Even so, overall profitability of the company’s automotive operations improved slightly. Ford Credit, the finance arm of the company, while solidly profitable, saw its profits fall by $185 million. The company also spent nearly $100 million to retire older line workers, in shutting down Mercury, and buying out dealers. Overall, not a bad quarter, but analysts will bore in on what is going wrong in Europe and why Ford Credit’s profit dropped so much.
VOO-DOO QUALITY SURVEYS
This one’s all over the news. Consumer Reports’ influential new-car reliability survey just came out. And the big story is that Ford plummeted 10 spaces in the study, putting it in 20th place out of 28 makes. Survey takers didn’t take kindly to the company’s new technologies including its PowerShift transmission and MyFord Touch infotainment system. But across town, Chrysler and Dodge both climbed the quality ladder, and Jeep was ranked the most reliable American brand. Of course the Japanese dominated the competition, taking the top nine spots. Audi, Jaguar and Porsche are all at the bottom. But you know what? I don’t put any credibility in Consumer Reports’ quality rankings. Its methodology is not statistically sound. When it comes to how it tests new cars, I’d say that Consumer Reports is the best, but when it comes to surveying subscribers on quality, I’d say the process is bogus.
PIECH THE IMPALER SIGNS UP FOR 5 MORE
Who needs term limits? Bloomberg reports Ferdinand Piech will get a third term as chairman of Volkswagen. A majority of the company’s 20-member supervisory board is backing him for another five-year stint at the top. His current term is set to expire in April, just two days before his 75th birthday.
A new study indicates that female drivers are 47 percent more likely to get injured or killed in an automobile accident than men. The report, published by the American Journal of Public Health, cites a number of reasons for this disparity. On average, women are shorter and lighter, plus they sit in different positions than men. Add it all up, and safety systems can’t protect them as well. Another reason is because seatbelts and airbags are tailored to fit men, who are three times more likely to be involved in a serious or fatal crash than women.
HONDA READY FOR A COMEBACK
Honda, like the other Japanese automakers, has been in recovery mode since March. And though time might not heal all wounds, it did allow Honda’s plants to normalize production so that they’re finally all up and running. In fact, even some of the sales numbers during the lull might not be as bad as first thought. Autoline Daily caught up with American Honda’s John Mendel yesterday who says excess inventory played a big role in helping the company soften the sales impact. John Mendel also says that it looks like American Honda will see its first year-over-year sales gain since last March.
John also says that it looks like American Honda will see its first year over year sales gain since last March.
Coming up next, it’s time for You Said It!
And now it’s time for some of your feedback.
Ron Paris saw our report on the fuel economy of the new BMW Z4 and says, “I wonder if Seamus verified that 29 MPG claim on the Z4 or just accepted the car’s computer display reading. I’m always amazed how much faith people put in these electronic calculations. My admittedly limited experience with them leads me to doubt their accuracy.”
Ron, you’re right. Those readouts are not the most accurate. Sometimes they’re spot on, or they can be off by as much as 10 percent. The best way is to average out several fill-ups and do all the math yourself based on the miles you drive. But if you only have several hours to evaluate a car, you’ve got to go with the readout on the dash.
Undeadkillers wants to know, “How come Buick is ‘popular’ in China?”
Great story, undeadkillers: GM was very careful in picking the brand to lead its charge into the Chinese market. Its market research showed that the last emperor of China, who is remembered fondly, was frequently pictured in his Buick. As a result, the brand was well-regarded by the Chinese people. Plus, GM has done a good job of meeting the needs of Chinese consumers and in marketing its cars throughout the country.
2Kriss2Kross saw our report yesterday on the new Z-Spec subcompact cars from Chevrolet and rolls his eyes. “Chevy, please leave the “Z” name to Nissan.”
Peter Smith writes in to us looking for help. “I have a good friend who’s son (age 15) is a passionate mechanical engineer. Although a good high school student, this young man is very unenthusiastic about the normal course offerings and the lack of anything approaching hands on mechanical work. Have you ever heard of boarding high schools or summer internship programs that give high school age kids a program geared to engineering?”
Peter, I don’t know of any such place. But how about you folks out there? Does anyone know of a high school or internship program that you can recommend?
And finally, I love this one. Sean Sweeney decided he couldn’t wait for Ford to unveil the next Mustang, so he decided to design one of his own, basing it on two Ford concept cars, the Evos and Mad Max. I love this drawing, and it makes me believe he’s really close to what the next Mustang could look like.
Thanks for all your letters and comments; we love to get them. And that wraps up today’s show, thanks for watching, we’ll see you tomorrow.