January 28th, 2010 at 12:00pm
Ford was able to post a net profit of $2.7 billion last year. Toyota’s recall spreads to China and Europe. Renault launches its own television channel in France. All that and more, plus a look at a unique business model from an upstart Korean company, called CT&T, that’s getting into the EV market.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Ford makes a pile of profit. Toyota’s recall spreads ’round the world. And Renault launches its own television channel.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Thursday, January 28, 2010. And now, the news.
Ford Motor Company put in a spectacular financial performance last year. Despite a collapse in the global economy that especially hit the auto industry hard, Ford was able to post a net profit of $2.7 billion for the year. Even more impressive, Ford’s sales dropped by 590,000 vehicles last year. It’s revenue dropped by nearly $20 billion. And yet, it’s net profit represented a more than $17 billion improvement on the bottom line. The company ended the year with $25.5 billion in cash, an improvement of $12 billion. And even its UAW employees will get a profit sharing check of $450.
And Ford is not the only one reporting strong earnings. According to Bloomberg, Hyundai saw its fourth-quarter net income nearly quadruple to $822 million, which easily exceeded analysts’ expectations.
Either Toyota is being overly cautious and trying to protect its reputation for safety, or it has a HUGE problem on its hands. According to the Associated Press, the company is recalling another 1.1 million vehicles in the U.S. for accelerator pedal-related problems and it’s extending the recall to China and Europe.
And could this recall cost Akio Toyoda his job? According to Bloomberg, there are rumors he could step down. When he took over, Toyoda pledged to make better cars, and even though he inherited these problems, Japanese protocol and culture could lead him to accept the blame.
And here’s something we’ve never seen before. The Detroit Free Press is reporting that GM is offering lease pull-aheads, 0 percent financing, and $1000 down payments to Toyota customers, while Ford is offering $1,000 more on trade-ins of Toyotas and Lexuses. It is extremely rare to see one automaker deliberately go after another one that’s having problems with recalls. But GM and Ford are being kind of chicken about it. You will not see any official press release or mention of this on their websites about these incentives.
And here’s something else we’ve never seen before. Renault is launching its own TV channel today in France. It’s a showcase for the brand that that includes news about the latest models, motor sports updates, and historical perspectives of the brand. If you don’t happen to live in France you can watch it on the internet as well at www.Renault.tv. Programming is available in both English and French. Renault says it has the potential to reach about 30 million people with both the TV channel and its website.
A 1925 Bugatti Brescia Type-22 roadster recently sold at a Paris Auction for $368,000. Ok, big deal, except that it had just been pulled out of a Swiss lake where it sat for more than 70 years! According to the Detroit Free Press, it was pushed into Lake Maggiore by Swiss customs officials after its owner abandoned it in 1936. Now why would you push a Bugatti into a lake? Well, apparently it was registered in France and had accrued import duties that would have exceeded its value which required that it be destroyed. Despite being completely rusted-out, it’s estimated that about 20 percent of the car’s parts are reusable.
Coming up next, a look at a unique business model from an upstart Korean company that’s getting into the EV market.
One of the more interesting exhibitors at the Detroit auto show was a Korean company called CT&T. Started by a former Hyundai executive, the company makes a wide range of neighborhood electric vehicles.
The price CT&T charges for an enclosed neighborhood electric with lead-acid batteries is $13,000. But knock off $6,000 in federal tax credits and another $1,000 that most states offer, and the price drops to only six grand. CT&T claims the operating cost for its neighborhood electrics is only $10 a month, based on driving 50 miles a day.
“So what?” you might ask, makes them so special? Well, CT&T has a business model unlike any other EV manufacturer. It wants to do regional assembly and sales. Rather than import vehicles from Korea, it wants to assemble them in 40 different states in the United States with components sourced from the U.S. as well. The idea is to cut manufacturing and distribution costs, create jobs, and most importantly, take advantage of EV incentives in those states.
It is also lobbying the states to allow Neighborhood Electric Vehicles to run on roads with posted speeds of 40 miles an hour. Currently they’re limited to roads with posted speeds of 25 miles an hour. The company claims its NEV meets all federal crash standards. So far, no state has raised the speed limit for NEVs. Put it all together and CT&T has an interesting business model that makes this company worth watching.
Don’t forget to tune into Autoline After Hours tonight at 7 p.m. Eastern time. With the Toyota recall, Ford’s profits and Ed Whitacre keeping the GM CEO job, we have got a lot to talk about.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you next week.