Episode 196 – VW Posts a Profit, Not Enough Cash for Clunkers, Thank the Jerks

July 30th, 2009 at 12:00pm

Runtime 6:32

Volkswagen reports an after tax profit of 251 million euros. The Cash for Clunkers program is off to such a strong start that many car dealers are worried the program will run out of cash. Scientists find that people who drive like jerks might actually reduce traffic jams. All that and more, plus a look at how Ford plans on marketing the new Ford Taurus.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Volkswagen reports a profit. Cash for Clunkers could run out of cash mighty quick. And people who drive like jerks might actually reduce traffic jams.

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

This is Autoline Daily for Thursday, July 30, 2009. And now, the news.

Volkswagen is the latest automaker to report its financial performance for the second quarter, and it’s not half-bad considering the global financial collapse. Revenue was down only 7.7 percent for the quarter. And even though profits were down by more than 82 percent, Volkswagen still managed to post an after-tax profit of 251 million euros. That makes VW the healthiest of all the major automakers from a financial standpoint, and it is my candidate to surpass Toyota to emerge as the No. 1 car company in the world in the next few years.

The Cash for Clunkers program in the American market is off to such a strong start that many car dealers are worried the program will run out of cash by the end of August. The Wall Street Journal reports that showroom traffic is up strong. In just a matter of days the program sold nearly 23,000 vehicles involving close to $100 million in government incentives. Chrysler said its showroom traffic is the highest in two years but only 1 out of 3 people have vehicles that qualify for the clunkers program.

The Science and Technology Committee in the U.S. House voted to increase spending on research on advanced vehicle technologies, like hybrids and hydrogen vehicles. According to the Detroit Free Press, the bill increases spending to $550 million, up from the $334 million requested by the Obama administration. The bill increases spending on hydrogen vehicles which the administration sought to cut out because it doesn’t see any near-term future for hydrogen.

Ssangyong Motor’s creditors threatened to liquidate the company (subscription required) if workers don’t peacefully end a strike. According to Wards, workers have until Friday to leave the factory they have taken hostage. The creditors also plan to seek compensation for the money they lost during the dispute. Workers have occupied the plant for nearly 70 days.

Autoblog reports that BMW may debut an eco-friendly supercar at the Frankfurt Motor Show. With styling based off the company’s M1 Homage concept, the sleek two-door is all about sustainability, and should have things like regenerative braking, stop/start functionality and electric power steering. Rumor has it the company could launch the car by 2012, and I just love the idea of a super exotic sports car designed to keep the tree huggers happy.

This story comes from a blog about physics via the LA Times. Scientists at a college in Sweden ran a computer simulation that models how crowds of people move through confined spaces. They found that things flowed best when only about 60 percent of pedestrians were obeying the “rules.” The physicists inferred that drivers that speed, pass on the wrong side and accelerate quickly actually help smooth the flow of traffic. So, the next time some jerk cuts you off don’t flip ‘em the bird, thank them for keeping things moving.

Coming up next, another feature about the new Ford Taurus – this time about marketing – we’ll be back right after this.

So far in our exhaustive coverage of the twenty-ten Ford Taurus we’ve taken a detailed look at the car’s exterior design as well as its brand new interior. Now, let’s find out how the company is planning on marketing this stylish new product.

There’s nothing special about how Ford’s planning to push the new Taurus. It’s putting the high-performance SHO at the heart of its campaign, to put a halo on the car and the rest of the brand.

And that’s it for today’s top news in the global automotive industry. But don’t forget to tune in tonight for Autoline After Hours at 7 p.m. Eastern or 2300 hours GMT. Our guest will be analyst Jim Hall from 2953 analytics. Thanks for watching, we’ll see you tonight.

16 Comments to “Episode 196 – VW Posts a Profit, Not Enough Cash for Clunkers, Thank the Jerks”

  1. Ivan Sears Says:

    John, if two people bump into each other in a crowded room, typically they do not leave carnage in their wake! The ‘jerk’ that cuts through in heavy traffic, is a strong potential cause of a multiple vehicle incident that would leave destruction and carnage in its wake. This would typically be worse than the inconsiderate line jumpers in a crowded room.

    I suggest the Swedish scientists run a real life test, maybe on a crowed big city freeway at rush hour, or on a L.A. freeway nearly anytime, but they have to include the “incidents” in their analysis as well. Talk about extrapolation! The news has shown when everyone in a room runs for the limited exits in an emergency – people get trampoled to death. I feel their study was incomplete and short sighted at best.

  2. Richard Swanson Says:

    Interested in your comments about VW. From my experience, German cars in general and VW/Audi in particular always put a smile on your face. But I have found two Achiles heels 1)reliability is average at best (and often MUCH worse) and 2) their dealer body needs to take lessons in customer relations. One Audi owner was less courteous, saying “…they treat you like crap.” I would be interested to hear if anyone else has had similar experience.

  3. Art Greenberg Says:

    So, Ford is going to feature the car and its attributes in its advertisements for the 2010 Taurus. Wow, what a concept!

    They finally get it. You mean those ads showing a woman paying for the guy’s laundered shirts in line behind her didn’t hit their mark?

  4. Rolf Prindl Says:

    My wife owns an Audi A4 we bought new in 2002. I sent her back to the Audi dealership to test drive an A6 last May. The showroom was beautiful and she received a warm reception from the girl at the counter. Then the salesman treated her like crap and she came home saying “I will never buy an Audi from him”. I was heartbroken as I love the larger A6 and was sure that she would fall in love with the car during a test drive. The salesman allowed her to sit in the car, it was outside in the parking lot, but couldn’t be bothered to get the keys and show her the navigation system. He just kept badgering her with “are you going to buy the car today” and was downright rude.
    Sounds like a similar experience to me! LOL

  5. Andy S Says:

    I find the Swedish study intriguing and hope it opens the minds of traffic planners. For too long, traffic planners have held to a principle of controlling speed. But this principle does not take into account the need for increased traffic “flow” (as a result of more vehicles, but no meaningful increase in roads). We should consider a new traffic planning model – if a given stretch of road has a fixed capacity of vehicles on it at any given instant, then faster speeds will increase the daily capacity of the road. I recognize safety zealots will scream, but a well-maintained road with clear markings and signs can be safe at higher speeds. And “higher speeds” do not necessarily mean higher speed limits, but may include better syncronization of traffic lights in improve the average speed.

  6. Chuck Grenci Says:

    Even though styling is highly subjective, I believe the new eco-friendly, let’s call it an M1-E(for environmental), is just a little bit too ‘snarky’ in my minds eye. A bit too chiseled for my tastes and kind of looks about tens years too old of a design. But, kudos for the idea of the eco-friendly supercar though.

  7. Salvador G. Says:

    John McElroy, “Show them the car” thats kind of obvious for any car company, What I would like to know is… What Ford is going to do- to get people to buy the new Taurus, above and beyond any other car company tv ad. or marketing plan there is or atleast I like to hear from Ford that their planning a whole NEW exciting series of tv ads different than what other car companies are doing.

  8. pedro Fernandez Says:

    Unless VW gets their reliability problems fixed(I dont see it happening) They will have a hard time going ahead of Toyota in sales volume. As far as the Taurus, anyone willing to start a pool as to when Ford will start with the rebates to move the car out of the showroom. I give it 6 months.

  9. David B. Fishburn Says:

    Mac- it is nearly 1700, and i can’t get the daily podcast downloaded, perhaps someone forgot to flip the switch? That computer simulation is just that- a simulation of “ideal” conditions. They need to study in the real world, and in a city known for horrible traffic problems. How can those driving recklessly and dangerously be considered to “help the flow” when it is them who cause the accidents?They also help create backups and other traffic problems. A good example would be the morons who see the signs a mile ahead of a lane closure, yet drive all the way to where the lane is closed. They’re the ones who create backups, and endanger others when they jam themselves into the lane they were supposed to be in a mile ago. The laws and regulations were written with safety for everybody in mind. Granted, some of them need to be updated for today’s world, since many of them were written back in the late 30′s and early 40′s, when the auto technology was’nt as good as it is now. Those “researchers” need to get out of the cubicles and do their studies in the real world.

  10. David B. Fishburn Says:

    Btw, Mac, i access the podcasts thru itunes.

  11. G.A.Branigan Says:

    The computer simulation that the swedes did up is very much out of touch with the real world and I seriously doubt if it can be taken with anything more then a grain of salt.Pedestrians are one thing,a volvo doing 65 is another.Don’t they have anything better to study?

  12. pedro Fernandez Says:

    In my daily drives I have come to the conclusion that the reason traffic backs up many times is due to slow moving vehicles (trucks, old people, women with the makeup) that dont keep up with the rest of traffic and don’t follow the right lane / left lane rules.

  13. G.A.branigan Says:

    I know what you mean Pedro.I believe the simulations they did were with 60% obeying the law,for cars that would be posted speed limit,with the other 40% not obeying the rules.In the example cited,passing on the wrong side etc.Maybe inferring speeding too.I’m kinda glad I don’t live there,LOL.

  14. Donan Iacovone Says:

    Nice job as always John. Love the variety of car stories presented on Autoline Detroit. I would like to add that those fuel conscious folks driving a bit below the speed limit may also serve as traffic flow catalysts.

  15. Steve S Says:

    John….just a suggestion when you do the field reports. I’m not sure where you are filming these each time, but the abandon looking building take away from the segments. Really enjoy you and the show, but automotive news does not need to show anymore reminders of empty buildings!!

  16. Willi Says:

    60 percent of pedestrians ? that’s like comparing apples and concrete … i’ve found much to relate to here, and agree first with the need for good road construction engineers – Michigan had bad roads because all the engineers worked at the big 3 – that should change – and Texas found that traffic flows much better above the speed limit, and people that drive under the speed limit impead traffic but we know that … merging is another thing, depends on if it is incoming to the freeway or lane ending ahead – incoming needs to match speed with the flow – lane ending means: fill all lanes and zip as required … the driver trying to block the merging lane from passing is simply delaying the inevitable – once the merging lane is full, the system works perfectly