Episode 48 – Toyota to Lose Money, Canadian Bridge Loan, Insight to Miss Target

December 22nd, 2008 at 11:44am

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Toyota expects to lose money for the first time ever due to a large drop in sales and a stronger Yen. The Canadian government will provide another $3.3 Billion to GM and Chrysler. Honda says it will not meet sales targets with the new Insight hybrid due to a lack of demand for hybrids. All that and more, plus a look at the new Ford Fusion hybrid.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Toyota expects to lose money for the first time ever. Canada kicks in to the bailout kitty. And Honda says it will not meet sales targets with the new Insight hybrid.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Monday, December 22, 2008. And now, the news.

The global automotive market is going from bad to worse. Toyota announced today that it expects to lose $1.7 billion for the current fiscal year and expects to lose money next year as well. Reuters reports that Toyota blames a big drop off in sales and a surge in the value of the yen. Toyota President Katsuaki Watanabe says this is the kind of crisis that only comes around every 100 years.

On the heels of the White House announcing it will bailout GM and Chrysler, the Canadian government says it will provide another $3.3 Billion in American dollars to the Canadian operations of those two companies. The auto industry in Canada directly employs over 150,000 people and represents 14 percent of the country’s manufacturing output.

What’s up for GM and Chrysler now that they’ve got part of their bridge loan? Well now the hard bargaining starts. Creditors will be forced to take pennies on the dollar, bond holders could see interest payments delayed. Dealers will be asked to break their franchise agreements. The UAW will have to make more concessions. And shareholders are going to see the value of their shares get diluted.

China says it will scrap fees for highway tolls to offset an upcoming fuel tax. Beginning next year China will raise taxes on fuel but by scrapping highway tolls China hopes to ease the financial burden of the gas tax for its drivers.

The recent drop in gas prices has caused sales of trucks and SUVs to grow and hybrids to drop. In fact, purchases of fuel-sipping hybrids tumbled more than 50 percent last month, and that has Honda worried. In a report from WardsAuto.com the company admits that hitting its global sales goal 200,000 per year for its redesigned Insight might be difficult (subscription required). The new model launches in North America, Europe and Japan next April.

Chevrolet has unveiled its redesigned 2010 Equinox crossover ahead of the Detroit Auto Show in January. It features a host of new features like a backup camera and a “smart” remote starting system that activates the HVAC system and seat heaters based on the temperature outside. Under the hood two different engines are offered, both with direct fuel injection. A 2.4-liter four cylinder is standard and a 3.0-liter V6 is optional. Both engines are paired with a six-speed automatic transmission. The 2010 Equinox should go on sale by the middle of next year.

Coming up next, in our feature story we’ll take a look at the new Ford Fusion hybrid. We’ll be back right after this.

Much of the bailout talk in Washington centered on the need for the Big Three to make more hybrids. Well, Ford hopes to turn that spotlight on its showrooms with the introduction this spring of its Fusion Hybrid.

This mid-size car may provide Ford and consumers what both are looking for. With a spacious interior and trunk, there’s plenty of room for everything from family to food while still achieving best-in-class miles per gallon over the Toyota Camry Hybrid. The Fusion’s 39 City, 37 Highway is six MPGs better than Camry thanks to the improvements made from Ford’s ’09 Escape Hybrid to the 2010 Fusion.

The car also offers Silent Key Start and Electric AC as well as Ford’s SmartGauge with EcoGuide – a new instrument cluster that helps maximize fuel efficiency, a feature that we’ll take a closer look at in an upcoming show.

Look for the 2010 Fusion and its Mercury cousin, the Milan Hybrid, to be in dealer showrooms sometime in the first quarter of 2009.

And that’s it for today’s top news in the global automotive industry. But don’t forget, you can get podcasts, transcripts and a whole lot more on our website, AutolineDaily.com. Thanks for watching, we’ll see you tomorrow.

One Comment to “Episode 48 – Toyota to Lose Money, Canadian Bridge Loan, Insight to Miss Target”

  1. William R. Walling Says:

    “Any news regarding ‘per charge’ vehicle range and battery longevity inside FORD’S Fusion Hybrid?”
    Reasoning, higher speeds EV mode operation with a smaller battery denotes something ‘interesting’.
    An advertised 3,700+ lbs. curb weight with sensational ‘demo’ road trials reported suggests checking your footwear for a correct count.
    (Hint: Awaiting the other shoe to drop!)