April 21st, 2010 at 12:08pm
Fiat saved Chrysler but the Pentastar brand may be bailing out its new partner in the future. Car dealers say Audi is the best brand to have. Sales of Harley-Davidson motorcycles have fallen through the floor. 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. Chrysler could be bailing out Fiat before too long. Car dealers say Audi is the best brand to have. And sales at Harley-Davidson fall through the floor.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Wednesday, April 21, 2010. And now, the news.
FIAT AND CHRYSLER NUMBERS
Fiat and Chrysler reported their first-quarter earnings and the numbers tell an interesting story when you compare the two. First off, both companies took in about the same amount of revenue. Fiat Autos took in $9 billion, Chrysler took in $9.7 billion. Fiat posted a trading profit of $203 million; Chrysler posted an operating profit of $143 million. Fiat sold 532,000 cars and light commercial vehicles; Chrysler sold 334,000.
McELROY’S AUTOLINE INSIGHT
Here’s my Autoline Insight. Fiat sold a lot more vehicles than Chrysler, but Chrysler earned more revenue than Fiat. And while Fiat made more operating profit than Chrysler, it wasn’t by much. In fact, by the end of this year, Chrysler will likely be far ahead of Fiat in revenue and profit. One very telling fact, if you divide total sales into total revenue, Chrysler gets about $29,000 for every vehicle it sells, while Fiat gets less than $17,000. No wonder Marchionne wanted to get his hands on Chrysler. Yes, Fiat saved Chrysler, but within a year or so, it’s going to be the other way around.
HARLEY-DAVIDSON SALES PLUMMET
In a sign that people are still holding off on big purchases because of the economy, Harley-Davidson’s first-quarter earnings dropped like a rock. According to The Wall Street Journal, the company earned $33 million in the first quarter compared to $117 million a year ago, down 72 percent. Sales were fell 28 percent and the company expects sales to be down the whole year. In order to boost earnings the company is looking to expand in international markets and is selling off the sport-bike brands it bought earlier this decade.
GM FALLS FROM TOP-10 LIST
MLive reports that for the first time in over a century GM is not in the Top 10 of the Fortune 500 list. The company fell from number 6 to 15, the first time in 101 years it wasn’t in the Top 10. On the other hand, Ford remained in the Top 10 but fell from number 7 to number 8.
GM INVESTS IN POLETOWN PLANT
According to The Detroit News, General Motors will invest $120 million in its Detroit-Hamtramck plant to build the upcoming 2012 Chevy Malibu. The site is already home to the Volt, but assembly of this extended-range electric is not going to take up much space at the plant, which is GIGANTIC at 3.6 million square feet! GM needs a high-volume car to help boost its capacity utilization. Building the Malibu at both its Fairfax, Kansas, and Detroit-Hamtramck plants will give the company more flexibility.
AUDI NO. 1 BRAND FOR DEALERS (login required)
Audi is the luxury brand with the best prospects for the future – so says the National Automobile Dealers Association which just published a semiannual study on the issue. The NADA’s findings indicate that U.S. car dealers observed the greatest increase of value in the Audi franchise compared with all other premium brands. This should come as no surprise. The company has been shooting up the charts, surpassing Mercedes-Benz in global sales and nipping at BMW’s heels. It’s on track to become the world’s best-selling luxury carmaker.
Coming up next, it’s time for You Said It!
And now it’s time for some of your feedback.
Miradart wrote in to say,
“Even on the small car platforms out there, why is there almost no wagons from the USA? No Cobalt wagon. No Stratus/Avenger wagon. I don’t think the Focus wagon is even still made. I don’t get it.”
Miradart, even though enthusiasts love wagons, the general public just doesn’t buy them, the sales numbers are abysmal. People will tell you how cool and practical they look, but they will turn around and buy something else. Crossovers are actually station wagons designed to look a little bit more like SUVs and that’s where the station wagon market has gone. Crossovers are the hottest segment right now.
Bajabusta has a question about how car companies count their sales.
“I have been curious about when vehicle sales are calculated. Are they considered from plant to dealer, or dealer to customer?”
Good question, bajabusta. The industry uses two ways to count sales. First is factory sales, which is just what it sounds like – sales that go from the factory to dealers and distributors. Those numbers are usually just quoted in the annual reports. Then there’s customer sales, from dealer to customer. Whenever you hear about sales, that’s the latter number they’re using, sales to customers, both fleet and retail.
Afghanakk wants to know,
“I’ve heard Toyota’s problem over and over again through the news. Is it a problem which only the U.S. versions have? I live in Europe here we don’t hear anything about those electric problems.”
Afghanakk, there are two reasons why you don’t hear about this problem of unintended acceleration outside of the United States. First, in America, everyone needs to be able to drive a car. We don’t have much public transportation and going by car is the way most people get to work. So we have to let just about anyone drive, even if they’re not a very good driver. I have said all along there are no electronic ghosts that are mysteriously making Toyotas accelerate out of control. It is driver error. The second reason you don’t hear about this outside of the USA is that no other country in the world has the army of plaintiff attorneys that we do. And no other country allows lawyers to earn contingency fees, where they get paid based on part of the money from the settlement, which incentivizes them to sue for massive amounts of money.
Don’t forget, tomorrow night on Autoline After Hours we have Doug Fehan. He’s the GM Racing Program Manager for the American Le Mans Series. But remember, when the official show ends, the broadcast goes on. Michelle Naranjo of MissMotorMouth.com will take over our airwaves and make you the star. Anyone can call in to continue the automotive discussion or to talk about new issues we weren’t able to get to in the show. Anything goes when we open the phone lines so be sure to stick around for that!
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.