April 29th, 2010 at 12:11pm
GM is getting ready to drop the Daewoo brand. A group of German environmentalists has come out against electric cars. And what in the world is going on with Ford’s stock? All that and more, plus an interview with Ernst Lieb, the President and CEO of Mercedes-Benz USA.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. GM gets ready to drop the Daewoo brand. German environmentalists come out against electric cars. And what in the world is going on with Ford’s stock?
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Thursday, April 29, 2010. And now, the news.
GOODBYE DAEWOO, HELLO CHEVROLET
Next year the Chevrolet brand will be introduced in Korea. GM Daewoo President and CEO Mike Arcamone made the announcement yesterday. But any of you who watched our live webcast from the Detroit Auto Show waaaaaaay back in January, already knew that. You can check out my interview with Mike Arcamone on the John’s Journal page of our website – AutolineDetroit.tv – or just follow the link in today’s transcript. The reason the Chevy brand will be used in Korea is that something like 90 percent of Daewoo’s production is exported and those cars are already branded as Chevys, plus the Daewoo brand is pretty much only used in South Korea and it’s not very well regarded there. According to GM’s market research, half of all Koreans are familiar with Chevy, more than 80 percent of them recognize the bow-tie logo and they see it as more prestigious than the Daewoo brand.
PHOOEY ON EVs!
Here’s a seemingly paradoxical story, courtesy of Bloomberg. Most American environmentalists are gung-ho for electric vehicles, but a group of greenies in Germany are opposed to them. The Berlin-based eco-organization Deutsche Umwelthilfe says that government incentives for electric vehicles will “plunder” government treasuries and that EVs do little to curb pollution since so much power is generated by burning coal and natural gas. The group says automakers should focus on improving fuel efficiency and lowering carbon emissions for conventional internal-combustion engines instead of building electrics. The group also advocates using taxpayer money to fund public transport instead of EVs.
WHY DID FORD’S STOCK DROP?
What in the world is going on with Ford’s stock? On Tuesday the company announced its financial earnings, blowing through Wall Street’s expectations. Usually an upside surprise drives up the price of the stock, and yet the price of Ford’s stock went down. According to the Detroit News some analysts believe that Ford’s earnings did not meet expectations, while others believe that Ford’s performance is not sustainable. I say those analysts don’t know what they’re talking about. Here’s my Autoline Insight. I believe the UAW’s VEBA trust fund took advantage of Ford’s earning report to dump a bunch of shares. Ford gave the UAW stock warrants instead of cash to pay for retiree health care. So the union needs to sell those stock warrants, and I believe that’s exactly what it’s doing. In the period leading up to Ford’s announcement the volume of trading was roughly 100 million shares a day. Then on the day of the announcement it suddenly skyrocketed to almost 300 million shares. With so many shares being dumped, the price went down despite the fact that Ford surprised everyone with its financial performance. Full disclosure here, I own a modest amount of Ford stock.
IS IT REAL?
An effort is under way to have stricter penalties for companies that counterfeit auto parts. According to Ward’s, the U.S., European Union and Japan are negotiating rules that would better police counterfeiting around the globe. This is a huge problem for the industry; the global market for counterfeit parts is estimated at $16 billion and will grow around 10 percent every year. China is the worst offender by far. The country is responsible for about $9 billion of the $12 billion in estimated losses due to counterfeiting. And it’s estimated over half of the vehicles in China have counterfeit parts.
RENEWABLE BIODIESEL FROM FINLAND
Finnish biofuel producer Neste Oil is set to begin trials of its diesel fuel produced from 100 percent renewable raw materials with no fossil fuels. Employees of the company and a few select individuals will test the fuel, in Finland, from now until the end of summer. Greenhouse gas emissions with its renewable diesel are 40 percent to 80 percent lower than conventional diesel. Neste produces its diesel from vegetable oil and waste animal fat using proprietary hydrogenization technology.
When the car market collapsed last year, automakers slashed their production. Maybe they cut too much. BMW is complaining that it could sell more cars if it could get them right now. So what does Mercedes say? That’s coming up next.
Mercedes is running with twice as much car inventory right now as BMW. It’s not that Mercedes has too much; it’s that BMW has too little. Chip Drake from Autoline Daily just caught up with Ernst Lieb, the head of Mercedes-Benz USA, and asked him about their inventory level and if they could use that as a competitive advantage.
That was Ernst Lieb, the head of Mercedes-Benz USA.
Don’t forget to tune in to Autoline After Hours tonight when our guest will be Nina Beckhardt, who is an expert in naming products, including coming up with the names of new cars. Join me, the Autoextremist Peter DeLorenzo, and Bloomberg’s David Welch tonight at 7 p.m. Eastern.
And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.