AD #2154 – U.S. Looking Into German Collusion, Mazda Introduces New 3-Row SUV, GM’s Q2 Earnings Not Spectacular
July 25th, 2017 at 11:57am
Runtime: 6:28
To watch this episode on YouTube click here.
- U.S. DoJ Looking Into German Collusion
- VW CEO Criticizes Porsche Labor Chief
- 2018 Mustang Gets Power Boost
- Mazda Introduces CX-8 in Japan
- Some FCA Dealers Fight Demon MSRP
- GM’s Q2 Earnings Not Spectacular
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On today’s show… uh-oh now the U.S. Justice Department is looking into German automaker collusion… sneaky Dodge dealers figure out a new way to gouge customers buying Demons… and GM reports its second quarter earnings. We think Wall Street is going to yawn. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
U.S. LOOKING INTO GERMAN COLLUSION
Yesterday we reported that the EU is looking into possible collusion between German automakers in the development of various car components. And now Bloomberg reports that the U.S. Justice Department is looking into those allegations but it’s not a formal investigation at this point. Der Spiegel, the German newspaper that broke the story, said this could become the largest business scandal in German history and now with the U.S. getting involved, it looks like it’s heading that way.
TENSION BREWING IN VW LAND
And speaking of German automakers, there’s tension brewing in the VW Group. Reuters reports that the company’s CEO, Matthias Mueller heavily criticized Porsche’s labor chief, for publicly stating that Audi managers should be let go over statements made about its diesel engines. Mueller responded by saying “The comments of Uwe Hueck are anything but helpful. The supervisory board certainly needs no lecturing on how it has to do its job.”
Still to come, Ford pumps more muscle into the Mustang.
2018 MUSTANG GETS MORE MUSCLE
Mustang fans eat your heart out. The 2018 pony car has more power and more bragging rights. The V8 now pumps out 460-horsepower and 420 lb-ft of torque. That’s 25 more HP and 20 more LB FT. With the new 10-speed automatic transmission and Performance Package it hits 60 miles-per-hour in under 4-seconds. So, it now has more power than a Camaro SS and is faster than both it and a Porsche 911 Carrera. Well, at least in a straight line. The 4-cylinder EcoBoost Mustang also sees a significant torque boost of 30 lb-ft to 350. With the same 10-speed trans and Performance Package, hits 60 from 0 in under 5-seconds. Look for the 2018 Mustang to hit dealers this fall.
MAZDA INTRODUCES NEW 3-ROW SUV
Mazda is bringing a new flagship SUV to its home market of Japan. The 3-row CX-8 will go on sale in the country before the end of the year and as you can see, it has a very similar look to other Mazda utility vehicles. There’s been no word if the CX-8 will be sold outside of Japan, but 3-row SUVs don’t sell in big numbers in the country. So, we find it hard to believe that Mazda would spend the money to tool up the CX-8 for it to sell in low numbers. The automaker could also consider dropping a sedan in favor of the new SUV.
SOME FCA DEALERS FIGHT DEMON MSRP
Every new car comes with an MSRP, the Manufacturer’s Suggested Retail Price. The key word there is “suggested.” Legally, car dealers can charge whatever they want for a car. Dodge knew that some dealers would act like ticket scalpers at a rock concert when it came to selling the Demon. It made clear that dealers who stuck to the $86,000 MSRP would get them first, and those trying to sell them above MSRP would get them last. Dealers, unsurprisingly, found a loophole as quickly as possible. Automotive News found some dealers auctioning off the right to buy a Demon at MSRP through “representatives” on eBay at $10,000 to $20,000. The highest bid was $75,000. FCA says it is aware of this loophole, but can’t do anything about it.
Coming up next, General Motors posted its 2nd quarter earnings. And while there’s some good news behind the numbers, Wall Street will probably yawn.
GM’S Q2 EARNINGS NOT SPECTACULAR
General Motors reported its second quarter earnings this morning and the results are not spectacular, but there’s some good news behind the numbers. GM sold 2.1 million vehicles worldwide, about the same as a year ago. But GM cut its fleet sales in the U.S. by 25,000 vehicles and it claims it has the lowest percentage of fleet sales of any major automaker, only 6%. But even though sales remained the same, GM’s revenue of $37 billion dropped 1.1%. And its earnings before interest and taxes was $3.7 billion, a drop of 4.3%. GM reported a net profit of $2.4 billion, which is more than 11% lower than a year ago. But the bottom line was impacted by a $400 million charge for restructuring its International operations, like pulling out of South Africa and India. The ongoing legal action involving defective ignition switch cost the company another $100 million, and it wrote off yet another $100 million closing down its operations in Venezuela. The stock market will welcome GM’s moves to back out of unprofitable operations, but with revenue declining and its earnings per share dropping by 8%, don’t expect to see a bump in the price of the stock. Not based on these earnings, anyway.
And that brings us to the end of today’s report. Thanks for watching and please join us again tomorrow.
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Comments (17)
July 25th, 2017 at 12:19 pm
Auctioning off the right to buy at MSRP… This also seems like a loophole to avoid paying sales tax on the extra dollars above MSRP. I’m sure some state Dept of Revenues will be interested in investigating this too.
July 25th, 2017 at 12:22 pm
The new Mustangs look great. I am not a pony car fan, but for the first time in my life I can say that.
It would be interesting if the walls could talk at Ford. As nearly 20 years ago the 4.6liter engine replaced the 5.0liter. EPA regulations was stated back then as the reason. Now Ford is apparently meeting stricter regulations and producing even more power out of their V8s. Is this simply reflective of the industry across the board? Or is this evidence Ford is a very different company than 20 years ago?
July 25th, 2017 at 12:24 pm
Mueller responded by saying “The comments of Uwe Hueck are anything but helpful. The supervisory board certainly needs no lecturing on how it has to do its job.”
And why is that? Because it has done such and exemplary job? Where the hell is fiduciary duty?
July 25th, 2017 at 12:27 pm
if Mueller was correct that the board knew what they were doing an argument could be made – then why are they balls deep in trouble?
July 25th, 2017 at 12:28 pm
@ Bradley: I would say it’s reflective across the board.Look at the power of V6′s that are NA. Back in the late 50′s and 60′s,these are muscle car numbers.And for the most part,done on reg pump gas.Whoda thunk it…
July 25th, 2017 at 12:41 pm
#2. Power is increasing everywhere. Chevy pushrod V8′s have steadily increased in power over the years too, along with other engine configurations. Manufacturers continue to improve fuel systems, head design, etc., increasing power and efficiency, even as the engines get cleaner.
July 25th, 2017 at 12:42 pm
It looked like Ford’s 302 or (5.0) reached their epoch in 1969-70 with the Boss 302. 290hp was the quoted gross hp number, achieved with tunnel port heads, a huge carb, and nearly straight exhaust. While the stated hp number was nowhere the actual power peak, it would be the highest for a quite while. 1976 witnessed the worst Ford had to offer, with only 129hp on tap.
Today’s 5.0L engines are incredible, full of exotic features that used to be reserved for the Italian exotics and race cars. They can idle in traffic all day and wake up instantly. I know power has been creeping up over the years but with 460 net hp on tap, the 2018 5.0L is nothing but amazing.
July 25th, 2017 at 12:46 pm
Will Ford start putting N/A V6′s in Mustangs again? They should. That would probably be the best engine for most people, as the V6 is in the Camaro.
July 25th, 2017 at 1:30 pm
There is a big difference between collusion and cooperation. I wonder, specifically, who was harmed, helped or trod upon. If involving diesels, the automakers side-stepped environmental protocol and hid it, then I can see collusion. If the automakers got together to collaborate on an item, beneficial to all participants, eliminating redundancies and maybe getting the best product for the best price and best environmental outcome and making it more timely, then that is cooperation……….and should be lauded. The ‘piling-on’, of the regulating agencies, makes them look like they are looking for the cash (fines).
July 25th, 2017 at 2:21 pm
The fact that Opel and Ford of Germany were excluded from these meetings shows that it was collusion. They weren’t part of the “club.”
Mueller should have never been given the top job at VW. Remember, he’s the guy who told reporters at NAIAS that VW never broke any law or did anything wrong with its diesel emissions. He’s $22 billion wrong so far, with the total sure to go higher.
July 25th, 2017 at 2:32 pm
So some manufacturers cheated on emissions. So each country they ever sold to gets to fine them, then jail the executives, then sue them corporately and personally in civil court, then figure out if they ever talked to each other and charge them with collusion. What’s next?
This is an enormous overreaction. If we do this about emission cheating, why haven’t we hung and quartered the Takata boys? Surely safety ranks higher than pollution. And if 1/4 of the effort spent to find fault with the diesel scandal was spent on airbags, I bet we’d have a long list of executives who knew stuff but kept quiet except amongst themselves.
July 25th, 2017 at 2:49 pm
Did anyone else notice the historical references in the dash “capture” of the new Mustang?
1964.5 mls – first year of production
289 mls – E – size of first v8s…
July 25th, 2017 at 4:34 pm
@ # 12: I won’t swear to it,but I think the first V8′s offered in the 64 1/5 Mustang were 260′s.I had a 65 1/5 K model with a 289 hipo.That was rated at 271 hp if I remember it right.In reality,I think it was more like 310,or 315 at the crank.
July 25th, 2017 at 4:35 pm
Make that 64 1/2 and 65 1/2.Duhhhh.It’s one of those days I reckon ;{>
July 25th, 2017 at 8:57 pm
11 The number of premature deaths from the NOx emissions are hard to quantify, but they exist. Thousands of people have had non-lethal health issues from the NOx. The Takata airbags have been linked to 11 deaths in the U.S., but I haven’t seen global numbers. Still, the emissions cheating has likely caused a lot more harm than the airbags.
July 26th, 2017 at 10:01 am
I looked this up at Rockauto (cause I thought that the first Mustangs only had the 6 and 260-8); turns out they offered four engines, two six’s, 2.8 (170), 3.3 (200) and two eight’s, 4.3 (260), 4.7 (289).
July 26th, 2017 at 10:02 am
adding a post script to #16: for the 1964 model Mustang.