Episode 941 – GM Reports Weak Earnings, July Car Sales Lukewarm, Manuals Make Comeback
August 2nd, 2012 at 11:45am
Runtime: 9:18
General Motors reported its second-quarter earnings, and it was a fairly weak performance. Car sales in the U.S. were up slightly last month, but they show the market is slowing down. Vehicles equipped with manual transmissions have accounted for 7 percent of sales so far this year, up from around 4 percent last year. All that and more, plus a look at the 2013 Chevy Camaro ZL1 Convertible.
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Hello and welcome to Autoline Daily for August 2nd. I’m John McElroy and here’s the news.
GM REPORTS WEAK EARNINGS
General Motors reported its second-quarter earnings, and it was a fairly weak performance. Global vehicle sales rose 3 percent to nearly 2.4 million cars and trucks. But revenue fell by more than 4 percent to about $37 billion. Net profit fell 41 percent to just under $1.5 billion. Worse, GM’s North American operations, which are the real engine of growth and profits, showed a marked decline. Sales in North America fell 4.6 percent and profits dropped by more than 12 percent. We expected weak earnings because of the slump in Europe and the slow down in South America, but we were taken by surprise to see GM getting weaker in North America, which stands in direct contrast to Ford and Chrysler.
JULY CAR SALES LUKEWARM
Speaking of sales, the numbers for last month in the American market are decent, but they show the market is slowing down. Total sales hit 1.1 million units, up nearly 18 percent from a year ago. But that’s when Japanese automakers were still reeling from the impact of the earthquake, so that skews the numbers. Sales were up 1 percent compared to a month ago, and the SAAR came in at 14 million units, down from 14.3 million last month. The fastest growing car companies were Honda, the Volkswagen Group, Toyota, Nissan, Subaru and Jaguar-Land Rover, with Land Rover getting most of the credit.
MKT TOWN CAR GETS I-4 ECOBOOST
Ford will offer a 2.0-liter four-cylinder EcoBoost engine in the gigantic Lincoln MKT Town Car. But the engine combination is only for the livery market that provides limousine services. According to Motor Trend, with front-wheel drive it delivers 20 MPG city and 28 on the highway. That’s 3 to 4 more miles per gallon than when it comes with a 3.7-liter V-6. Pricing for the 2.0-liter is just under $50,000. The V-6 is a grand more.
NEW LEXUS LS REVEALED
Lexus just revealed the updated version of its high-brow LS. Changes to this luxury flagship seem pretty minor on the surface. Its received the brand’s new face, the so-called “spindle” grille, plus engineers have supposedly focused on dynamics to make it a lot more fun to drive. For the first time ever a sport version will be offered. The redesigned LS also gets a truckload of new technology plus a stiffer body structure. As before, it will be available in rear- or all-wheel drive configurations. Other than that no other specifications were revealed so stay tuned . . .
MANUALS MAKE COMEBACK
Hooray! Auto enthusiasts are finally stemming the tide of the automatic transmission. In North America the manual gearbox is clawing its way back from oblivion. According to Edmunds.com vehicles equipped with shift-it-yourself trannies have accounted for 7 percent of sales so far this year. That compares to just 3.9 percent for ALL of 2011.
LADA TO OFFER 1ST AUTOMATIC TRANSMISSION
In related and somewhat unbelievable news, Russian automaker Lada will offer its first vehicle ever equipped with an automatic transmission. WardsAuto reports the Granta low-cost sedan will go on sale in the country later this year. It gets a four-speed auto from JATCO. Interestingly, Lada has only been building cars since 1970. Today it’s owned by Renault-Nissan, and together these three brands control about 40 percent of the Russian market!
COME FLY WITH ME
Here’s one of the more bizarre things you’ll ever see. French artist Natacha Mercier covered an old Mercedes-Benz with flies! According to Autoblog, she coated the car with fly-paper, parked it in a greenhouse and then released 100,000 flies into the building. After that she drove the vehicle around the streets of Toulouse, France, much to the surprise of the many onlookers. Does this FLY with you or does it just BUG you? Sorry I couldn’t resist.
2013 CAMARO ZL1 CONVERTIBLE
(The Camaro ZL1 review is only available in the video version of today’s show.)
Chevy needs the ZL1 to help bring more customers into the showroom. For the last two months in a row, the Camaro was outsold by the Ford Mustang.
Tonight is a historical one for Autoline After Hours. Ed Welburn, the head of design for GM is going to take us into the inner sanctum. He’ll be giving me and the Autoextremist, Peter De Lorenzo, a personal tour inside the Design Center. We’re going to be bringing our cameras into areas that have never been shown before. Now they’re not going to give away any design secrets, but we are going to get into top secret areas. Be sure to tune in tonight starting at 6 p.m. Eastern Time. And remember, you can always catch all the action after that because we’ll be rerunning that show at Autoline.tv.
And that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.
Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com
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Comments (39)
August 2nd, 2012 at 12:02 pm
We’re looking forward to tonight’s show. It will be a rare glimpse in to one of the most significant historical places in the entire automobile industry. The history just oozes out of the famed GM Design building, or “Styling” as it was once called during the late Harley Earl and Bill Mitchell reigns. We hope you can join us, it will be worth the effort.
Peter D.
August 2nd, 2012 at 12:23 pm
Maybe somone will enter the fly-coverd Benz in the Chump Car Series if it is cheap enough??
August 2nd, 2012 at 12:28 pm
hello to all.
i am looking forward to this evening’s show as well. i missed last weeks show with robert lutz. i will have to try to watch it before this show if possible.
oh, i am glad that cars equipped with manual transmissions are on the increase in north america.
see you on the chat.
regards,
vrmchris
August 2nd, 2012 at 12:48 pm
Why is anyone surprised that GM sales are down? I don’t plan on giving my hard earned dollars to a company that owes me $40+ billion dollars!
August 2nd, 2012 at 12:58 pm
The other day, we were all talking about the new matte car finishes…Someone mentioned that it might be hard to clean and polish…SOoo, how do you clean and polish the “fly” ‘Benz?!?!
August 2nd, 2012 at 1:03 pm
I’m still interested to see how the SAAR moves from September thru December. I don’t know historically how the last four months of the year affect it, but with more redesigned and updated 2013 models coming, I’ll be curious to see if it will telling of pent-up demand holding out for 2013s. As for me, it now all comes down to what dealership calls me back. I’ve written off three so far for such poor basic customer service.
August 2nd, 2012 at 1:08 pm
I’m surprised manual transmission cars make up 7%, considering that only a handful of cars are even offered in the U.S. with manuals. I guess some of them, like MINI, have a very high take rate of manuals which gets the number that high.
August 2nd, 2012 at 1:13 pm
As far as that fly covered car goes, I’d say: “it’s for the birds”.
What wasn’t reported (in the GM rundown of sales) that Cadillac was markedly up for the month (from the previous July’s reporting.
And, oh yeah, I’ll be watching/chatting at tonight’s AAH; should be a great one.
August 2nd, 2012 at 1:16 pm
I’m probably not the 1st to predict this but expect the SAAR to be under 14 million vehicles as we go into the 4th qtr.
MKT Town Car? What is Lincoln doing? It will be interesting to see how many takers there will be in that market. I learned from one smart used car dealer he is buying and repairing every old Town Car he can get because there is a demand for them by the independent limo / executive car services.
What next for Lada? Power steering and power brakes?
I’d prefer the satin paint on a Benz than the fly cover. Less maintenence.
August 2nd, 2012 at 1:23 pm
answer me this, so more people are buying manuals, so how on earth are you supposed to fiddle with all these controls that are on the right side, just above the shifter, as far as I know, most humans have only one right arm and hand! Shift, radio, shift, a/c, shift, answer phone, shift, adjust volume, shift, skip a song or two……
August 2nd, 2012 at 1:30 pm
I’d think Ford would have a hard time convincing people that the ugly, MKT SUV thing is a “Town Car.”
August 2nd, 2012 at 1:31 pm
#10,
You can text two or three letters between shifts, or so I hear.
August 2nd, 2012 at 1:41 pm
@ #10
Pedro, as a DRIVER yourself, I know you and the other 7% (well maybe 6%) won’t be fiddling with those other controls. We pop in our fav CD (or plug in the ipod/mp3 player), set the a/c were we want it, adjust the seat and mirrors, then DRIVE. There is a reason manuals are less than 10%.
August 2nd, 2012 at 1:43 pm
John – It is no surprize to me that the Mustange outsold the Camaro for the last 2 months. Even though I’ve been a Chevy fan, I like the Mustang styling and engine note better than the Chevy. There are too many blink spots while driving the Camaro, also. Give me a Mustang GT and a Ford Super Duty pickup, while you’re at it.
August 2nd, 2012 at 2:00 pm
shift, sip of coffee, shift, bite of the donut, shift, another phone call, shift, an incoming text. I’m out of breath just writing about it! Or the hell with everybody and just DRIVE!
August 2nd, 2012 at 2:13 pm
Town Car? really? to call that a Town car is sacrilegious, Panther fans weep and mourn.
August 2nd, 2012 at 2:17 pm
Shifty. Here’s the quote from on manuals…
A combination of factors — from the growing age of vehicle trade-ins bringing more manual drivers back to market, to a greater proportion of smaller cars on the road — is creating a small spike for stick shifts,” said Ivan Drury, an Edmunds.com analyst. “But even though manual cars are on the rise now, they’re on track to be virtually extinct in the next 15 to 20 years.”
From The Detroit News: http://www.detroitnews.com/article/20120802/AUTO01/208020346#ixzz22PiKqOiw
August 2nd, 2012 at 2:21 pm
HtG how about the fact that these new-fangled autos have gotten so damn expensive and complicated, some of them add like $1200 or more to the price of the car. It makes sense sometimes to go up one class to get standard auto. Focus and Fiesta come to mind, even the Fiat 500 auto is expensive, and that is one car that was made for a manual.
August 2nd, 2012 at 2:49 pm
For a long time, those of us who get manual trasmissions do so just because we like them. For years,, most automatics have matched manuals in mpg, and will beat a manual not being driven properly. Also, today’s automatics are reliable, and you get your money back when sell an automatic, at least a late model one. I like manuals. I have a manual minivan, after all, but I would not recommend a manual to most drivers.
August 2nd, 2012 at 2:50 pm
Even Europe is getting away from manuals, new UPS delivery trucks come with automatics, so this is a temporary thing I believe.
August 2nd, 2012 at 2:51 pm
Kit where is your shifter in the manual minivan?
August 2nd, 2012 at 2:52 pm
Beats me, Pedro. I’m driving a relic with 5sp, no ABS or traction control, and wind up windows.
August 2nd, 2012 at 2:57 pm
It only barely bothers me when I see a sports car with auto trans. Ferrari has no manuals,ffs!
When the driver gives up control, I increasingly see only an appliance.
August 2nd, 2012 at 3:13 pm
John,
What was the profitabilty breakdown by GM Division? Does GM still need Four Divisions in North America (Chevy, Cadillac, Buick & GMC)?
I believe GM can fold GMC into Chevy, and Buick into Cadillac.
August 2nd, 2012 at 3:52 pm
It would certainly appear the only way GM can sell cars is when Toyota, Honda and Nissan have nothing to sell. Last year’s sales increases at GM were artificially boosted by the earthquake and tsunami in Japan, and the flooding in Thailand which wrecked havoc with inventories for the Japanese brands.
August 2nd, 2012 at 4:13 pm
That Lada looks like the junk the Big 3 used to make….
The front end of the ZL1 looks so bland and screams “GM”.
August 2nd, 2012 at 4:16 pm
The problem is the manual is crippled with a sporty top end gear ratio so at hiway cruse speed the engine is 1000 rpm higher than the automatic with resulting noise and low efficiency.
MANUALS MAKE COMEBACK
Hooray! Auto enthusiasts are finally stemming the tide of the automatic transmission. In North America the manual gearbox is clawing its way back from oblivion. According to Edmunds.com vehicles equipped with shift-it-yourself trannies have accounted for 7 percent of sales so far this year. That compares to just 3.9 percent for ALL of 2011.
August 2nd, 2012 at 4:39 pm
congested traffic & stick shifts are incompatible , but some buyers choose to learn the hard way.
August 2nd, 2012 at 4:46 pm
Re; Japanese car sales— When US car builders wouldn’t listen to Ed Deming on how cars should be
built,he was invited to Japan—they listened
August 2nd, 2012 at 4:59 pm
I guess the French Artist with the “Fly Covered Benz” was looking to attract “A Few Good Frogs!”
August 2nd, 2012 at 5:05 pm
Maybe someone will get the idea to do a “bird droppings” version of a Smart (Dumb) car.
August 2nd, 2012 at 5:19 pm
“Mommy! Mommy! Joey ate all the raisins off the sticky paper!”
Sorry, old joke. Couldn’t resist.
August 2nd, 2012 at 6:08 pm
The GM Public Relations guys took so much fun of out that Camaro Convertible during their presentation. Does GM hire retired librarian or something. I was so excited about the segment but that guy ruined it for me. “it’s a Cavern Carving convertible machine” “we designed this so you can take this out on hilly, cavern roads, back streets of america to really tear it up” If GM if full of these types of PR fail, I’m going to imagine it’s also failing in the board room as well as business operations.
BTW, try this. “We wanted to build a true sports car with great handling and dynamics. Everyday driving or canyon carving can be enjoyed in this convertible and you’ll find yourself going the long way home because this car is so great and fun to drive. If you enjoy G-forces, the rush of air in your hair and the rubbling sound of HP, we’be built this for you.” And I write this with no communications classes or PR experience. The same crap happened when I watched the PR guy introducing the Equinox. I wanted to shout, talk to me about the car, don’t read your bullet points you bean counter.
August 2nd, 2012 at 7:53 pm
What the hell is cavern carving? What are you supposed to drive this in caves? I’ve heard of Canyon carving. I know I’m just busting b@ll$ here, but you wonder why GM is in a funk. Get people that know what they are talking about to speak on camera promoting product.
August 2nd, 2012 at 8:00 pm
Maybe that is what got Ewanick fired, dumb idea, did they ever heard of Laguna Seca or some other mild track, how about some nice hilly, curvy road, we’ve got so many to choose from.
August 3rd, 2012 at 1:40 am
A Little Birdie once told me a few years back that Manuals would be scrapped in cars by 2014.
So much for progress, I see…
August 3rd, 2012 at 8:58 am
There used to be a number of manuals sold in big pickups, but they are no longer available.
August 3rd, 2012 at 11:29 am
With all the jesting comments about the fly-covered Benz, I cannot believe you moderated my jesting post. That was short, genteel, and amusing.
With regards to seeing cars as appliances, well, 99% of the world’s drivers see them as appliances. They may also consider them a statement of their economic standing and a projection of their personality, but they are still first and foremost an appliance to them. That is why autonomous vehicles will be adopted quickly in the marketplace.
August 3rd, 2012 at 12:22 pm
#21,
The shifter in my van is between the front seats, in front of a “mini console” on the floor.