August 9th, 2010 at 12:00pm
Chrysler posted its second-quarter earnings and the results continue to be encouraging. Detroit automakers dominated the sales charts in Canada last month while their Asian and European competitors suffered losses. Volkswagen announced it will bring the Skoda brand to the Chinese market. All that and more, plus Victor Muller talks about the hero’s welcome he’s received in Sweden since he swooped in to save Saab.
Transcript and Story Links after the jump . . .
This is Autoline Daily for August 9, 2010. And now, the news.
CHRYSLER GROWS STRONGER
Chrysler posted its second-quarter earnings today and the results continue to be encouraging. Even though the company had a net loss of $172 million, it posted an operating profit of $183 million. It also boosted its revenues to $10.5 billion, which is $800 million more than it brought in during the first-quarter. Chrysler says that the increase in revenue came from selling more vehicles, and this is where it gets interesting. Chrysler’s worldwide sales were up 22 percent, which means it’s now growing faster outside of the American market. The company ended the quarter with $7.8 billion in cash, about a half-billion more than at the end of the first-quarter. Things are looking so good that Chrysler says it will probably upgrade its guidance for the year when it reports its results for the third quarter.
CANADIANS BUY AMERICAN (subscription required)
Detroit automakers dominated the sales charts in Canada last month. Ward’s reports that combined, the “Big Three” posted an 18 percent gain compared to 2009. Overall, their Asian and European competitors suffered single-digit losses. Total light-vehicle deliveries were up 2.1 percent compared to July of last year, totaling nearly 150,000 units. On a percentage basis Chrysler was the biggest winner posting a 35 percent increase. GM was second in total volume, right behind Ford. For the first seven months of the year Canadian light-vehicle sales are up 8.6 percent from the same period in 2009.
TOYOTA HIT BY STRONG YEN
First we heard Honda complain of the high value of the yen, now it’s Toyota’s turn. Bloomberg reports that Toyota says it’s not feasible to make cars like the Yaris and Corolla in Japan and export them and still make a profit. The company is trying to figure out ways to cut manufacturing costs on those cars, and looking at moving production out of Japan to low-cost countries like Thailand and Mexico. The Japanese yen is currently running at 85 to the dollar, but many economists believe the yen will strengthen even more, perhaps reaching 80 or even 75 yen to the dollar.
TOYOTA STRETCHES OUT DESIGN CYCLE (subscription required)
And that ties into this next story. Scion redesigned its tC coupe for the 2011 model year, the car’s first update since 2004. And according to Ward’s, the company is going to stretch the product cycle for another six years. This is a longer-than-usual update schedule. Most manufacturers refresh their products every four years and completely redesign them every eight. Dragging out the lifecycle for half-a-dozen years suggests the company is not able to recoup its investment in four years. And the strong yen is undoubtedly affecting this.
VW BRINGS SKODA TO CHINA
Now we move on to China. Volkswagen, which is already the largest automaker in China, announced it will bring the Skoda brand to the Chinese market, where, according to Gasgoo, the company will introduce the Skoda Yeti next year along with its partner SAIC. It will be positioned below the VW Tiguan and is expected to compete with the Hyundai Tucson, Kia Sportage, and Nissan Qashqai.
SALES BOOM IN INDIA
While car sales are starting to slow down in China, they’re booming in India. According to Gasgoo, sales were up nearly 40 percent in July compared to a year ago, to just about 160,000 units. Those are pretty puny numbers, but that’s the highest total ever recorded by the Society of Indian Automobile Manufacturers. Automakers are expanding fast in the country due to strong economic growth and demand for cars. Car sales are expected to pass 1.7 million units for the fiscal year ending in March.
What does it feel like saving a car company? Why, it turns you into a hero, that’s what it does. We’ll let you hear what one top car-company executive experienced after he swooped in to save an icon.
Victor Muller is a Dutchman, but he’s a hero in Sweden, especially in Trollhättan, because he saved Saab. Recently we asked Muller how the people of Sweden have received him since he swooped in to rescue the company.
Of course Saab hasn’t been saved, not just yet. The company has an enormous amount of work to do, and most analysts believe it can only survive in the long-run if it gets bought-out by another automaker.
And that is it for the top news in today’s global automotive industry. Thanks for watching, we’ll see you tomorrow.