Episode 176 – June Sales Rebound?, Toyota’s Credit Rating Cut, Porsche Denied Loan

July 1st, 2009 at 12:00pm

Runtime 6:11

June sales in the U.S. market come out later today, and they’re expected to show modest improvements. Toyota’s credit rating was cut and could face another downgrade if its performance doesn’t improve. Porsche’s loan request from a German state bank has been denied. All that and more, plus John answers viewer questions in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. June sales in the American market look promising. Toyota’s credit rating gets cut. And Germany turns down Porsche’s request to borrow money.

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

This is Autoline Daily for Wednesday, July 1, 2009. And now, the news.

June sales in the U.S. market come out later today, and they’re expected to show modest improvements. Sales will likely be down around 30 percent compared to a year ago, but should be above sales in May. The annualized sales rate could top 10 million units, which is still a disaster level, but will be considered a turning point if it happens. Two things to look for: sales at Pontiac and Chrysler could be up significantly, but that’s because of blow out sales at dealerships that are closing and have to clean out their inventory.

Bloomberg reports that Toyota’s credit rating was cut two levels by Fitch Ratings. Toyota expects to lose $5.7 billion this year. Bloomberg quotes a Fitch analyst who says Toyota is reacting slower to the crisis than its rivals and could face another downgrade if its performance doesn’t improve.

OK, we finally have a date for the cash for clunkers program in the U.S. It starts July 23. Consumers are able to qualify for credits now but have to wait until July 23rd because not all the details are hammered out yet. Meanwhile, Reuters reports that French auto sales were up more than 7 percent last month thanks to a similar program.

In an interview with Bloomberg, Fiat’s and Chrysler’s CEO, Sergio Marchionne, says Chrysler’s cash burn has slowed since emerging from bankruptcy. Marchionne declined to say how much Chrysler has gone through since emerging, but he is working with the U.S. Treasury to decide what and when to make financial information public. Last year Chrysler burned through nearly $10 billion.

Autoblog reports that Porsche’s loan request from the German state bank Ka Eff Vay (KFW) for 1.75 billion euro, or about $2.45 billion, has been denied. The company has 9 billion euros in debt, and seems to be running short of cash. Porsche is also looking for money from the Arab Emirate of Qatar.

Ward’s reports that Kia will introduce a version of Microsoft’s in-car infotainment system (subscription required) next year. It’s expected to be very similar to Ford’s SYNC. The company has not identified what models will get the technology, nor what specific functionality it will offer. Data shows that Ford vehicles equipped with SYNC move twice as fast as vehicles without it. This represents a big step-up in technology for Kia, and Hyundai who will share the system, since many of their models lack even optional navigation systems.

Coming up next, it’s time for You Said It!

And now it’s time for some of your feedback.

This is “You Said It!” where I get to respond to some of your questions and comments.

Jim Sawyer writes about Nissan getting $1.6 billion from the U.S. government to retool a plant to make electric cars in Tennessee. He asks, “How much help has any U.S. automaker received from the Japanese government?”

Jim, you know that I know that you know that the Japanese government has never given a nickel to American automakers and never will. But it’s not just the Americans. The Japanese don’t let any foreign automakers build cars in the country.

Jim also says, “Tesla gets nearly half a billion? Yet, Daimler just bought 10 percent of Tesla for $50 million. That means Tesla has, in effect, doubled its market capitalization thanks to the U.S. taxpayer.”

Clearly Tesla has very good political connections to get that much money for a company that has barely built any cars.

Salvador G. wrote in to ask, “Do you think it’s possible that the new Renault Scenic could be sold here in the U.S. as a Nissan?”

Salvador, great question, or is that a suggestion? I think it is possible, though we haven’t seen any rebadged Renaults show up as Nissans. At least not yet.

And finally Kit Gerhart saw our report on the Cadillac CTS wagon and asks, “Does GM have access to any good diesels of the right size for the CTS? For reasons only marketing people know, Mercedes-Benz doesn’t put diesels in E-Class wagons bound for North America, so Cadillac could have an opening in what might be a good market.”

Kit, except for the German automakers selling cars in the U.S. market, everyone else is backing off diesels for now. GM, Ford, Toyota, Honda and Nissan have all canceled plans for diesels in the American market. The biggest culprit is the cost of meeting diesel emission standards in the U.S.

Join us Thursday night for Autoline After Hours, the only live webcast that discusses everything and anything about cars and the industry that makes them. Join me, Peter De Lorenzo and Jason Vines tomorrow night, live at 7 p.m. Eastern, or 2300 GMT.

And, that is it for today’s broadcast.

6 Comments to “Episode 176 – June Sales Rebound?, Toyota’s Credit Rating Cut, Porsche Denied Loan”

  1. Alex Kovnat Says:

    We note that:

    >Bloomberg reports that Toyota’s credit
    >rating was cut two levels by Fitch Ratings.
    >Toyota expects to lose $5.7 billion this
    >year.

    One hopes that people like Michael Moore, who are sotted with hatred of American automakers (especially General Motors) are aware that part of GM’s and Chrysler’s problem is, market conditions are poor and this is affecting Toyota too.

  2. DC Says:

    Alex, I think that people like Moore don’t necessarily hate on GM because their sales are poor, they do so because they have produced crap products and implemented planned obsolescence unlike their Japanese counterparts. If you check out Autoline After Hours, you would have had some insight as to how GM really did their product development in the past when it came to producing new models to “compete” with the Asian brands.

    John, I do find it interesting that Toyota’s credit rating has been cut, it brings to question the status of GM’s credit rating now that it is in bankruptcy. Does a credit rating still apply, and where does GM stand compared to the rest of the market?

  3. pedro Fernandez Says:

    This clunker plan is going to be adjusted because few people will qualify and those who do, are no where close enough financially to afford new cars, not even with $4k in their pockets. When is anybody gonna do a study to see how distracting all these in-car electronics are to drivers and how many accidents they cause

  4. Len Simpson Says:

    Clunker plan is just as stupid as everything else going down nowadays.

  5. Dave E. Says:

    I qualify for the clunker deal, I have a 98 blazer that needs to go. If the deal wasn’t available I wouldn’t buy a new car. Does Nissan rebadged the Renault Clio? I just saw one in France and it looks similar to the Versa.

  6. Kit Gerhart Says:

    John,

    Since VW and Mercedes-Benz are selling diesels in Ameraca, and I think the current ones are even 50-state legal, I figured all the other companies had dropped plans for diesels because diesel fuel was so expensive relative to gas that the savings in fuel cost would be small, reducing the appeal of diesels to car buyers. Maybe I’m wrong, though.

    Anway, do you know how much more it costs to make a diesel Jetta than the same car with the standard 5 cyl. gas engine? I think they charge only about $1100 extra, but maybe they are “losing” money on the diesels, relative to the gas cars.