July 16th, 2012 at 12:21pm
France’s president derides PSA’s cuts as too harsh and urges management to renegotiate. Also in the Old Country Ford and other automakers are reporting slumping sales in the first six months of 2012. Hyundai is hurting for vehicles to sell. With only 27-days’ supply in the U.S. and a corporate cap on production at 7 million vehicles. All that and more, plus a look at the Audi S5 coupe!
Hello again and welcome to Autoline Daily. It’s Monday, the 16th of July, 2012. I’m John McElroy coming at you from the Land of Enchantment, New Mexico. Here’s the day’s top news.
FRENCH PRESIDENT SLAMS PSA CUTS
Last week we reported French automaker PSA is slashing some 8,000 jobs and shuttering a factory near Paris. The move is painful but necessary, although some analysts say the cuts don’t go deep enough, and they’re right. According to The Wall Street Journal, the closure will save the company between 100 million and 200 million Euros per year. But PSA’s automotive business just lost 700 million Euros in the first half of 2012! The move won’t slow the bleeding, much less get the company on the road to recovery. The job cuts and factory closing prompted French President François Hollande to scold Peugeot’s management team and urge them to renegotiate. He called the plan unacceptable. Hourly labor costs in France are 14 percent higher than in neighboring Germany and about 20 percent higher than the Euro-zone average.
EURO CAR SALES
More European trouble. Ford’s sales fell 10 percent in the first half of the year, helped by a 16 percent fall in June sales. The Dearborn automaker expects to lose money on its European operations this year, despite profits for the company as a whole. Overall demand for cars in the old world fell to their lowest levels since 1994, with predictions that sales for all cars could fall to 12.5 million. Ford’s results mirrored other brands’ sales, with Volkswagen off nearly six percent and Fiat down over 16 percent. GM bucked the trend, reporting sales up nearly 11 percent.
FROM THE OBVIOUS FACTS DEPT.
Where have we heard this one before? Reuters reports a study published by McKinsey & Company estimates the cost of lithium-ion batteries could plummet 70 percent by 2025. Today, automotive battery packs cost between $500 and $600 per kilowatt hour, but that could tumble to just 160 bucks by the middle of the next decade. Rising oil prices, stricter emissions standards and technological advancements are cited for the cost reduction. Really? No duh!
Hyundai’s sales in the U.S. keep growing but production restraints are holding sales back. According to the Detroit Free Press, Hyundai dealers only have a 27-day supply of vehicles, less than half of the industry average. John Krafcik, the CEO of the Hyundai’s U.S. operations says he’s trying to get more vehicles exported from South Korea to the U.S. but the priority is to ship to faster growing emerging markets. Hyundai has also capped global production at 7 million vehicles to focus on quality. In the meantime, to boost U.S. sales, Hyundai will add a shift at its Alabama plant and will sell fewer cars to rental companies and fleets. Hyundai expects to sell over 700,000 cars in the U.S. this year.
MINI SUED OVER CVTs
It seems like automakers attract lawsuits more than honey attracts flies. Honda and Hyundai have been sued recently over fuel economy claims and now the Wall Street Journal reports MINI is being sued over its transmissions. The lawsuit, filed by attorneys in Florida, alleges a “manufacturing defect” in its CVT’s can cause premature failure. The suit says the problem affects 2002-2006 MINI Coopers and convertible versions built between 2005 and 2008. BMW, MINI’s parent company, had no comment.
Hey, in happier news after the break we’ll take a look at arguably one of the most beautiful cars on the road today.
2012 AUDI S5
(The Audi S5 review is only available in the video version of today’s program.)
And Craig’s not the only one that thinks the Audi A5 is beautiful. Walter de’Silva, the head of group design at Volkswagen agrees. In fact, of all the cars he’s been involved with it is his favorite. We interviewed him a couple years ago on “Autoline This Week,” show number 1534. If you want to hear the whole story you can check it out on our website, Autoline.tv. Again that’s show number 1534.
And that’ll do it for today’s report, comin’ at you from Santa Fe, New Mexico. I’m John McElroy, thanks for watching, and I’ll see you tomorrow.