Episode 507 – Ford’s Impressive Financials, Nissan’s Hybrid Fuga, Chevy Volt vs. Nissan LEAF

October 26th, 2010 at 12:00pm

Runtime 9:37

Ford reported its third-quarter earnings today and the numbers are downright impressive.  Nissan just introduced its own hybrid in Japan, the Fuga, which is known as the Infiniti M elsewhere in the world. The U.S. Department of Transportation and the Environmental Protection Agency issued fuel-economy standards for heavy-duty trucks . . . for the first time ever. All that and more, plus a comparison of the Chevy Volt and the Nissan LEAF.

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This is Autoline Daily for October 26, 2010. And now the news.

FORD’S FINANCIALS
Ford reported its third-quarter earnings today and the numbers are downright impressive. The company made a net profit of nearly $1.7 billion, which is $690 million higher than a year ago. It also made a profit in every region of the world, except Europe where it posted a loss of nearly $200 million. Ford also paid-down its debt by another $2 billion and says it will end the year with the same amount of cash and debt, which would represent at least a $9 billion improvement since the beginning of the year. But here’s what makes all these numbers so impressive. Ford’s revenue, all the money it brought in over the last three months, actually declined by $1.7 billion. The fact that it brought in so much less money, but made so much more profit shows just how productive and efficient the company has become.

BMW 2 SERIES
Our colleagues over at Car and Driver dug up some inside information on BMW’s future product plans, including a 2 Series model. What evidence do they have? Well, BMW just filed a U.S. trademark application for the monikers “220,” “230,” “235” and “M2.” Could these be the front-wheel-drive cars it’s allegedly developing? Possibly, but the notion of a high-performance M model using this powertrain layout just doesn’t seem right. Here’s a possible scenario, though. In the coming years, the 1 Series could shrink and go front-wheel drive while the 2 Series picks up the leftover rear-wheel-drive platform from the current 1 Series. Does that make sense? It seems to, since the “230” and “235” names imply six-cylinder engines, and it’s mighty hard to fit a long, inline powerplant in a transverse, front-wheel drive engine bay. What do you think BMW is up to? Post your response in the comments below.

NISSAN’S HYBRID FUGA
Nissan just introduced its own hybrid in Japan, the Fuga, which is known as the Infiniti M in the U.S. A lithium-ion battery helps power the car, along with a 3.5-liter V-6 engine that’s mated to an electric motor and a seven-speed transmission. The Fuga hybrid gets 19.0 km/l which translates to about 45 MPG on the Japanese driving cycle. Nissan says it’s able to travel up to 100 kilometers an hour or 62 miles an hour on a level highway driving on electric power only. The Nissan Fuga goes on sale at the beginning of November in Japan.  Pricing starts at $71,000, about twenty-grand more than the non-hybrid version.

RARE-EARTH ANXIETY
While Nissan is pushing its latest hybrid and electric cars, it is definitely worried about getting the raw materials it needs to make them. As we’ve been reporting on Autoline Daily for weeks, China has cut off Japan from getting its rare-earth metals, and you can’t make hybrids or electric cars without these materials. As a result, prices have more than doubled. Now, Bloomberg reports that Nissan is seeking alternative sources for those metals. But reports out of Germany say it could take a decade to build up mines in other countries to replace China, which has 90 percent of the global market.

PUTTING THE “F-U” IN FUEL ECONOMY
The U.S. Department of Transportation and the Environmental Protection Agency issued fuel economy standards for heavy-duty trucks for the first time ever. This affects tractor-trailers, heavy-duty pickups, vans, and vocational vehicles. The standards require a 7 to 20 percent reduction in both fuel consumption and CO2 emissions depending on the category of vehicle. The new rules start in 2014 and run through 2018. It’s projected this will save 500 million barrels of oil and cut greenhouse-gas emissions by 250 million metric tons over the lives of the vehicles produced within the program’s first five years.

BENTLEY SUES AXL ROSE
It sure is expensive being rich! Autoblog reports via celebrity gossip site TMZ that rock star Axl Rose is being sued by Bentley for close to $74,000! Seems he was less than kind to the 2006 Continental Flying Spur he leased from the fine folks at Crewe. He apparently returned the car several months past its due date with body damage including a cracked windshield and a broken taillight, plus a few dents in the doors and a busted bumper. But here’s the kicker, it was 42,000 miles over the lease limit! 42,000 miles! What? He was using it as a taxicab? How do you go so many miles over your lease?

How do the Chevy Volt and Nissan LEAF compare to each other? We’ll take a look, right after this.

CHEVY VOLT VS. NISSAN LEAF
There’s a lot of controversy comparing the Nissan LEAF to the Chevy Volt, but it all has to do with whether or not the Volt is truly an electric car, or whether it’s a hybrid. But let’s set their powertrains aside for the moment. I just got a chance to test drive both cars, back to back, and here’s my impression of what the they’re like.

This whole LEAF versus Volt argument is really going to come down to two things. Which car do you think looks better, and do you think you can live with a LEAF, which only has a 100-mile range, or do you need a partial electric that can go further than that, which is what the Volt offers.

And that is it for today’s report on the top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

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37 Comments to “Episode 507 – Ford’s Impressive Financials, Nissan’s Hybrid Fuga, Chevy Volt vs. Nissan LEAF”

  1. tj Martin Says:

    On Fords profits . Two thumbs up but Ford better keep its eye on the ball and get some better engines ( 4 + 6 cylinder ) if they want to keep those numbers on the correct side of the ledger .

    On the 1 and 2 series BMW speculation . I’d guess the second scenario of the 1 going FWD and the 2 being the RWD small premium car .

    Bentley suing Axel Rose . Well any slap in the face dealt out to that idiot Axel is a good slap indeed . Considering he cost the music industry well over $75 million in the last decade its about time somebody started recouping some of that money .

  2. Kit Gerhart Says:

    “Could these be the front-wheel-drive cars it’s allegedly developing?”

    I just read, I think on C & D’s site, that the 2-series will basically replace the 1-series, and the 1 will go to FWD. Also, there will be a couple FWD BMW’s smaller than the 1-series. Minis in BMW dress, perhaps?

  3. dcars Says:

    Range anxiety is real. With the Leaf your going to have to plan your trips. When I had an electric car, it was a constant nagging thought. At the present time if you loose your charge, you’ll have to put it on the back of flat bed and bring it home.

  4. pedro fernandez Says:

    John, you should have named your comparison report: “Dumb and dumber part 3″. BMW will join the rest of the party and go FWD. From yesterday’s entry by Nick re: the Fiesta and the excessive price people are paying for a subcompact, PT Barnum was a genius. Regarding Ford and their profits, Thanks Mexico and their low wages.

  5. Chuck Grenci Says:

    John, I think I’d have to agree with your evaluation of the new BMW’s 2 series (with the reassigning of the 1 series to fwd.

    I think the Fuga should maybe be called the ‘Fugly’ (as its styling que is similar to all the Nissan/Infiniti direction of late).

    And I guess I’m showing my age (as I prefer the Volt’s styling; more reserved and traditional) to the Leaf’s bug-eyed bubble mobile look. As far as the rear seat, well, although something to have to be dealt with (from the back seat passenger) in the Volt, rear seats just don’t get enough use to make too much difference (at least adult usuage generally).

    I don’t know why Bentley needs to sue Axle Rose; don’t all leases have clauses to recoupe excess miles and excess damages. It must be a breach of contract necessitating the lawsuit.

  6. Dave Says:

    I like the Volt and could live with it ..but not for 42 grand, up to 20 grand dealer mark up, and 2 grand for the charger…OH wait the goverment is going to give me back 7500..now its deal!!!

  7. Buzzerd Says:

    Whoa whoa whoa Ford made a quaterly profint of 1.7 billion in a less than stellar car market? But we are CONSTANTLY told that the US auto workers have to make $15/hr for the manufacturers to make money, how is it at all possible for Ford to do this? Maybe, just maybe it’s not so much about the hourly people and more about less management and good product?

  8. TomL Says:

    John.
    Is BMW developing a 4 cylinder engine for SAAB?
    If so,this engine could be used in FWD BMW’s

  9. Dan Clemons Says:

    For a grocery getter, I’ll take the Nissan Leaf. For long trips, I’ll stay with our Toyota Prius.

    I’m still trying to get over our American cars being built by a bunch of drunks. Our 2003 Corvette will likely be our last UAW built car.

  10. DRII Says:

    I work for the D.O.D. and youtube does not work on our computers.

    Great on Ford.

    The Volt looks so much better than the Leaf!

  11. GPL Says:

    “I like the Volt and could live with it ..but not for 42 grand…”

    There are a lot of vehicles that I like and could live with but can’t justify for the price. What is the monetary justification of any performance or luxury vehicle or all of the infotainment electronics that are proliferating in new vehicles? Some are willing to pay extra for more power or a brand. Others will pay extra for “green cred” or to have the latest tech.

    Until they can get the price of the Volt down, the target demographic will be the somewhat affluent status-seeking environmentalists or iConsumers. There are probably enough of those alone to sustain the first year or so of production, but GM is going to have to work hard to get the price down asap unless the price of gas jumps significanltly and stays up for a while.

  12. Don Edmunds Says:

    Hope that Prius doesn’t kill you on those long trips.

    Would much rather have a car built by “drunks” than support a bunch of liars that don’t care how many customers they kill.

  13. Mike D Says:

    John,

    I never have been one to add fuel to the fire; but this rare earth thing is way bigger than just electric and hybrid vehicles. The Neodymium magnets are also widely used in ignition coils, ABS sensors, computer hard drives and the like. Materials like lanthanam (another of the rare earths) is responsible for a 10% yield increase when it comes to converting crude oil to gasoline (it is part of the catalytic cracking process). The rare earth phosphors are responsible for the green and red colors on your GPS,computer and television monitors. There are some 17 different rare earths that simply cannot be replaced in the products and industrial processes that use them. There should have been a “Strategic reserve” concept applied to these materials. I’m betting someone thrifted that idea out.
    Mike

  14. Buzzerd Says:

    @ Clemons- you are so right, UAW workers are the only with a drug abuse problem, it certainly doesn’t happen anywhere else like Amtrak, airline pilots, construction, trucking, right wing talk show hosts…..

  15. Andrew Charles Says:

    Y’all are panicking over nothin’. Use yer heads. What does BMW use even-number model designations for? The Z4, X6, and 6-series—what BMW calls coupe’s even if they aren’t. That’s what the future 2-series will be—a more expensive version of the 1-series with sportier bodywork, something along the lines of the Audi A5, Mercedes CLS or BMW 6-Series but in a compact size.

    BMW is giving its fwd models whole new model designations, just as it has the roadsters ‘Z’ and “SAVs” ‘X’.

  16. Mike D Says:

    Dan,

    I see your comment about the UAW. To call them drunks is a scosh on the harsh side. I’ve worked with alot of very good UAW folks who were doing their best to manage a difficult situation (Working 7 days at 12 hours per for months or years on end is real tough. My personal experience with low volume products such as the Corvette that the designers never really do get all the bugs out, the volumes are never really enough to justify building the assembly aids, jigs and fixtures that are needed, and then there is the issue of being constantly on the learning curve because the product never matures. That said, you paid a lot for that car and deserved to get what you paid for regardless of the “true root cause”. I just doubt it was alcohol related.
    Mike

  17. Andrew Charles Says:

    Mike D, the US used to be the world’s biggest supplier of rare earth metals—until the Chinese supply drove the price down to uneconomic levels. If the demand in China or elsewhere rises, Us production becomes profitable again—the remaining hurdles being the complete lack of credit in the US to restart production, and NIMBY environmental protests.

  18. Steve Says:

    I don’t know if anybody has ever really counted, but I’d bet for every drunk UAW worker, there are a dozen who come to work and do their jobs. Sure the union has had it’s warts, so do you.

  19. cwolf Says:

    John
    While driving both EV’s,it would have been informative to test each on the highway with lights,heater or air on to compare longevity of Leafs battery and Cruse at the lowerspeeds.
    Getting in/out of the rear seat of the cruse shouldn’t be that big of an issue. There are scads of bigger cars having the same issue. Its a style vs comfort thing.
    You can bet the union will capitalize on Fords profits come contract time. But IMO the union will have to make consessions to reflect the economy as a whole and moreso to keep in line with other auto union contracts. This UAW guy surely wants the best wage, but my first consideration is to have a job to retire from!

  20. tj Martin Says:

    Chuck Grenci

    ” I don’t know why Bentley is suing …….. ”

    Most likely because Axel Rose is living up to his usual M/O and not living up to his responsibilities as well as ducking out on payments etc. etc etc .

    e.g The Man is a low life slime and has been a pariah in the Industry since he went ( urp) solo

  21. Stephen Kutney Says:

    I’m still not clear about the Volt. When the Volt hits about 70 MPH does the engine kick in to provide more electricity for the drive motors at the wheel or does it have a separate drive system like the Prius and avery other car so far.

  22. tj Martin Says:

    TomL ;

    Yes BMW is working with SAAB on the upcoming 9-2 /9-2 (depending on who you talk to )engine and there is more than a fair amount of speculation that the SAAB ( which ever number they use ) will also be based on the MINI Countryman platform . Is any of this fact ? Who knows . But thats what’s slipping out of the SAAB rumor mill . But the BMW engine is a done deal . That was announced last week in fact in the UK press .

  23. cwolf Says:

    Mistakenly called the Cruz an EV and not a Volt. Don’t matter because Stevens opinion of EV’s reflects mine. Not buying one of these potentially problematic and costly pieces of wasted good metal only buys another bowl of rice for those rare earty digging bastards!

  24. pedro fernandez Says:

    Saab already failed with all the rebadging that went on with GM at the helm, and now they’re on the way to do the same crap, just because it’s BMW won’t change a thing. The UAW can’t be playing hardball with Ford, remember “South of the border, down Mexico way” Where labor is US circa 1960′s. Cheap and only too willing to work.

  25. HyundaiSmoke Says:

    Mexican Labor is cheap, but produces an inferior quality product.

    Fareed Zakaria’s as well as my advice to American Auto brands=Stop making Toyotas and start Making BMWs. Be like the Germans. Have apprenticeship programs to get inner city and rural youth into the Middle Class like Germany.

    No, you guys will continue to flounder.

    Speaking about Floundering this leaf is like theFirst Honda Insight. It’s Out there experimental tech that sounds like a pipe dream, but in 10 years Malibus will be available as EV with 500 Mile charges.

    GM did do the same with Hybrids.

  26. Joe Black Says:

    Don Edmunds:
    “Hope that Prius doesn’t kill you on those long trips.
    Would much rather have a car built by “drunks” than support a bunch of liars that don’t care how many customers they kill.”

    Really, Don? While Toyota is one of my least favorite automakers (for making boring cars), I’d never make a statement such as “they don’t care if they kill their customers.” How can you prove that it was the cars and not the drivers killing themselves. The 5 or so people who were killed didn’t even know how stall the engine in their cars or to put the car into neutral. They, like most drivers today, were lazy in that they didn’t care to learn how to drive before getting into the cars. Not a single one of the cars involved in the “unintended acceleration” cases were equipped with a manual transmission. The fact that 95% of licensed US drivers don’t know how to drive a manual should be a clue as to how badly-educated most drivers are these days. I wish we’d all take responsibility for our actions and stop blaming others for all of our problems.

  27. Rob Says:

    @ Buzzerd #7 Your point is flawed because Ford builds their products with labor sensitive cost structures (Fiesta, Fusion) in Mexico where labor is much cheaper than even $15/hour. Hence… profits $$$$$$$. GM is trying to keep that production here which requires some amount of tier 2 pay structure… a commendable effort IMO.

    @ Stephen Kutney #21 The Volt is a pure EV when the battery is charged. The engine will NEVER come on all the way up to its top speed of 100 mph in EV mode. Once the battery is depleted THEN the engine comes on to continue the drive. These are the only two modes that are transparent to the driver.

  28. Nick Stevens Says:

    As a very satisfied BMW owner for more than 5 years now, I am fortunate to own a GOOD looking, pre-Bangled BMW, and the first thing BMW needs to do is to ELIMINATE all Bangle reminders from its currently blunt and boring models and get them to look DISTINCTIVE again.

    I am skeptical about going to FWD models, it will make them Audis, and we already have Audis, and they cost less and have nicer styling and interiors!

  29. Nick Stevens Says:

    Re the STUPID Volt and the Short-ranged ugly LEAF:

    If you live in CA, the Leaf will cost you just $20k vs $25k in the rest of the US.

    If you live in a particular county in CA, it’s $3k less, and if you work for SONY, it is another $5k off, so you can get it for less than $13,000!!!!!!!

    What new car can you get for $13k? Some dingy POS Kia or Hyundai Accent?

  30. Nick Stevens Says:

    (The above also explains why CA is bankrupt and why Japan has been in a virtual economic COMA for 21 years!

  31. pedro fernandez Says:

    From reading CR’s latest reliability study, the more things change the more they stay the same, Honda and Toyota along with Subaru still are tops, but look out GM just about ALL their new products are now doing really well, even though Ford has been getting all the press and accolades the former US giant is making big strides in their new offerings, even though they have this big bump on the road called the Volt.

  32. Nick Stevens Says:

    There are some surprises in the CR survey.

    I am surprised that junky Nissans are still in the same league with Hondas and Toyotas,

    but the most surprising of all is that the flimsy Sports car the PORSCHE BOXSTER (!!!) is the second most reliable model of all 1,000 or so models of all makers!

    That contradicts with the widely held beliefs that lightrweight sports car engineers are paid to take weight off these little cars and reliability is often sacrificed to these flimsy components.

    I will follow this for a while and if it remains true, the Boxster could be a very attractive second car.

  33. pedro fernandez Says:

    Re: the Boxer, it could be its simplicity and almost old fashioned way it is built without all the electronic gizmos that plagues all other cars.

  34. dcars Says:

    The Volt has received so much press and if ended up being unreliable, it will be front page news.

  35. pedro fernandez Says:

    With its possible tiny payoff for GM, they have taken too big of a gamble on the Volt, if it turns out to be a dud, it may undo all the advances GM has made product wise in the last 2 years.

  36. Nick Stevens Says:

    Even if it IS reliable, the VOlt is a stupid vehicle nobody needs, makes no econ sense to any driver (I still have to see a convincing counter-example) EVEN with the $7,500 taxpayer fed credit and other local ones. It is still a $41,000 cobalt, basically.

    The only good thing about it is it may be good in corners due to its low center of gravity due to the 400 lbs of batteries or whatever.

  37. HtG Says:

    Nick, re Boxster, one only need type ‘Boxster sucks’ into their browser, and the wailing of owners comes tumbling out. There is such a mismatch between the CR reliability scores and the stories of the engines going BLAMMO! or leaking oil, that I wonder how the CR test was conducted. The Boxster problems seem to occur around 50K miles, but I don’t know much about the CR tests. I’d love an old used Boxster, but the horror stories of needing to buy new crate engine for 15K just make me wince.