Episode 1001 – Profit Jump for Hyundai, What the Frack?! Audi E-Tron De-Powered

October 26th, 2012 at 12:05pm

Runtime: 6:26

While one manufacturer fails to meet profit expectations, Hyundai reports a 3rd quarter profit jump. Although somewhat controversial, could fracking be the answer to lower fuel costs? A vehicle meant to compete with the likes of the Tesla Roadster gets put on the back burner. All that and more, plus on Autoline This Week John sits down to talk with Mary Barra, the head of General Motors Global Product Development.


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Hello and welcome to a brand spanking new episode of Autoline Daily. It’s Friday, Friday, Friday the 26th of October. I’m Jim Hall of 2953 Analytics filling in for John today. Anyways, onward and upward, it’s time for the news… shall we get started?

There’s more earnings to report today. Not surprisingly with slumping sales in Europe, Renault reported that its third quarter revenue dropped 13 percent compared to last year, to eleven billion dollars. And the company expects that its full-year revenue will be below last year.

But it’s a different story over at Hyundai. Bloomberg reports that the company’s third quarter net profit jumped to two billion dollars, a 13 percent gain compared to last year. Anti-Japanese sentiment in China helped boost sales in the PRC and unlike most automakers, Hyundai was able to grow market share in Europe thanks to demand for the Tuscon and its new mini-car the i10. But the news wasn’t quite as good at Kia. Even though the company’s net profit in the third quarter rose to 750 million dollars, it missed analyst’s expectations. Strikes in Korea over the summer stopped the production of nearly 63,000 vehicles.

Hydraulic fracturing, or fracking, is somewhat controversial but it could lead to lower fuel prices. According to Bloomberg, a number of companies are taking advantage of the excess of natural gas from shale rock, to turn it into gasoline, diesel and jet fuel. Oxford Catalysts says it costs $2.95 a gallon to make premium diesel from oil. But the price drops to a $1.57 a gallon with gas at a small plant.

Plans to build the Audi R8 E-Tron seem to have been placed on the back burner pending a project review. With a range of 150 miles and a 0 to 60 time under 5 seconds, the E-Tron was set to take on the likes of the Tesla Roadster and the upcoming Mercedes-Benz SLS AMG Electric Drive. The hold-up was ordered due to a lack of advanced and inexpensive batteries to power the car along with generally poor EV sales.

In related electric news, battery supplier LG Chem has halted production at a battery plant in Holland, Michigan. The plant was supposed to make batteries for the Chevy Volt but still hasn’t produced any. However, if demand increases the plant is ready to be fully operational.

And speaking of electric vehicles, that’s the subject of this week’s Autoline Poll. What sort of electrified vehicle would you consider buying when it’s time for a new car? Hybrid, plug-in hybrid, pure EV or none of the above? Click the link below today’s show on Autoline.tv to make your voice heard. John McElroy will be back on Monday with the results of the survey.

Coming up next, GM’s head of global product development explains how the company is able to manage the complexity of all of its product centers around the globe.

On Autoline This Week, John sits down to talk with Mary Barra, the head of General Motors Global Product Development. GM has more product development centers than any car company around the world and in the following clip Mary explains how the company is able to manage the complexity of so many programs being developed at the same time.

Also joining John for that show is Michelle Krebs from Edmunds.com and Jeff Bennett of the Wall Street Journal. And you can watch the whole episode right now at Autoline.tv.

But that brings us to the end of this week’s episodes. I’m Jim Hall from 2953 Analytics, thanks for watching and have a great weekend.

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27 Comments to “Episode 1001 – Profit Jump for Hyundai, What the Frack?! Audi E-Tron De-Powered”

  1. Charlie McMillen Says:

    I will not buy any electric until I can travel from here in KY to my hometown in Michigan with-out worrying about getting stranded 60 miles from home with no power.
    There is still to much that can be developed in ICE. (Ecobost)

  2. G.A.Branigan Says:

    Audi is right in putting their ev back on the shelf.When the ev market ignites then they have a product that will kick tesla’s ass right from the get go.

    As far as fracking goes,no matter what,it won’t lower the price for fuel.Greed will always win out in that dept.

  3. Kit Gerhart Says:

    Unlike the Tesla, the electric R8 should be a fully developed car if it goes into production, but until and unless the large battery it would need gets cheaper, I suspect Audi is making the right decision. Even the regular R8 is a very expensive toy, and the EV version would be even more expensive, and more of a toy.

  4. C-Tech Says:

    It is sadly amusing that with all the technical advances in “energy” production, particularly with gasoline, the price just does not go down, and seems to be more sensitive to weather and plant maintenence issues today.

  5. pedro fernandez Says:

    I would gladly get a Prius C with its 1.5 Atkinson cycle engine, the best engine for the Prius line for optimum gas mileage and just about the same size as the original Prius. #3 I thinks we’re much better off than Europe and Latin America, for example in the Dominican Republic, most people have given up their cars and gotten mopeds instead, the price of gas does not match their income.

  6. Kit Gerhart Says:

    They may be making a Scion iQ with a V12. See:


  7. Kit Gerhart Says:

    Pedro, did Sandy visit you? I’m now getting heavy rain in the “space coast” area, but not a lot of wind.

  8. pedro fernandez Says:

    Just felt some wind and light rain, but if you watch the local TV channels, you’d think the world was coming to an end and we will all drown or be blown away into the Bermuda triangle, BTW thenks for asking, I guess you have now become a snow bird for the winter?

  9. pedro fernandez Says:

    #5 Are they moving the driver’s seat to the back and extending the steering shaft? How ridiculous to do this!What is the whole point of that stupid car? And we thought the Smart was “dumb” this one is ‘dumber”

  10. Kit Gerhart Says:

    They are greatly exagerating the storm here too. I got back to FL Monday.

    Yeah, the Aston iQ is a pretty silly idea, but I guess not silly enough for some people

  11. harold rogers Says:

    what is a take rate? haold rogers

  12. Lex Says:

    John McElroy,

    Your question of Mary Barra, the head of General Motors Global Product Development was great, “Does GM have too many design Studios”?

    This points to the heart of the problem with GM.
    There is too much waste and inefficieny in it’s management and organizational structure to really leverage there massive production capacity and purchasing power. GM should centralize design to North America with input from Europe, Asia and South America. I seem to remember that GM has 11 design studio’s around the world. This should be reduced to five North & South America, Europe, China and Austrailia (Holden). This would allow them to keep a pulse on consumer preferences in each of those markets.

    I dislike that Chevy is attempting to offer a Daewoo inspired vehicle for North America in the Spark. GM North America will hopefully under Mary Barra leadership begin designing products suitable for North American market and around the world.

    I also hope Mary Barra is not so in love with Muscle Cars as is Ed Welburn. Chevy is a “Value Brand” which should appeal to consumers around the world as a brand that produces reliable, sensible and affordable vehicles. Good Luck to Mary Barra!!!

  13. pedro fernandez Says:

    How long before GM tries to dump Chinese death traps as Chevys under the “GM of China” badge?

  14. HtG Says:

    Longing for RoAb were you?

    How about a weekend film about the Porsche factory. A 5 part doc on how Porsche was making the 356. By hand. Really.


  15. Dave Says:

    I currently own a hybrid (2007 Camry) and would definitely buy another one (thinking seriously about the 2013 Fusion). The plug-in hybrid option interests me as well, but only if it’s a reasonable amount of money and doesn’t make too many other sacrifices (fuel tank size, cargo space, etc). Full electric is the way to go when they get all the bugs sorted out, have a longer range, and are priced better, but until then I don’t see it working for many people.

  16. Earl Says:

    Too many design centres involving lots of employees and soon the end result is decisions made by committees. Doesn’t that ring familiar with GM in the past. I’ll bet a lot of people at Ford will shake their heads and say we went down that road too,once upon a time and then Mulally gave them a wake up call.
    Got to hand it to Mulally and Company,they bit the bullet this week in Europe,the first to do so. Watch the rest of them do the same except GM,they crawled into bed with the Frenchmen.

  17. Kit Gerhart Says:

    GM has too many design centers. Ford has too many idiotic driver distraction systems in the dash. Only Toyota is doing everything right. Just kidding.

  18. Steve Ashley Says:

    All of those environmentalist jerkwads need to buy a motorcycle instead. Far fewer parts (a lesser hole in the environment to build), Half as many tire/brake assembly’s spewing microbits into the air, more vehicles within the same current density, and most importantly a much brighter gene pool within 6 months to a year. I have ridden a bike for 42 years and still get that RUSH.

  19. Jimbo Says:

    I will strongly consider testing & purchasing a Ford Fusion Hybrid. It seems to possess a great blend of looks, performance, handling, power and economy. I don’t know it’s price point yet. Need more info and a test drive to be sure.

  20. Gary Paul Says:

    Wow! Mary Barra did a great job of saying nothing and keeping the window of clarity about GM a huge foggy mass. According to Barra, virtually everything at GM is an endless process to determine the clarity by which we definitely determine the multiplicity of the complexities surrounding the development of a complex weave. It would have been better if she just said that she could not comment on anything about GM except perhaps clarifying data which has already been released by the company through GM’s official channels, and just sat there and smiled. I mean can anyone give me something meaningful that this voice of nothingness stated. Perhaps that is her job to talk and say nothing, but why come on a program to say nothing? What did she clarify? What did we learn? Anybody??! I mean John and and his comrades were trying to get some nuggets about the need for the present number of engineering centers, and the impact of lower gas prices on Volt sales, and the cutback on endless gaggles of middle executives, and pricing concerns over the Volt but all for naught… Heck I could have answered the questions better than this representative of GM.

  21. pedro fernandez Says:

    As the Who’s anthem goes: “Meet the new GM, same as the old GM” This lady would fit in very well with the Pres candidates during the debates, don’t answer anything directly.

  22. HtG Says:

    Come on guys, you’re spoiling it for me.

  23. pedro fernandez Says:

    Kit I would add Hyunda/Kia to your statement.

  24. cwolf Says:

    What I have noticed was that the number of recalls placed upon any manufacturer was usually due to small electronic components in such things as air bags windows. I wonder which country is making them!

    I, too, think there are a couple too many GM design centers. I picked up on M. Barras point of having GM’s warren Mich. center keeping a pulse over the others.

    Also in the news, Mexico wants to adopt clean air regulations that of the US to reduce their polution. A no brainer for Mexico, since 85% of cars made there are exported. To my bewilderment and Mexico’s, only Toyota is fighting this adoption in the courts. Sure it’s all about money… and a willingness to not follow the standards placed upon most others.

  25. pedro fernandez Says:

    Toyota and Honda are greedy cheapskates, but they make good cars and used to make great ones.

  26. john Says:

    I would consider a hybrid if it “pencils out”. Otherwise, a highly fuel-efficient straight gasoline-powered. I do wish natural gas power was more available to non-fleet users. I don’t see plug-in electric or natural gas going very far until there is a big expansion in the number and location of “fueling” points. Look, most Americans now live in rental housing. Very few landlords are going to invest in the infastructure anytime in the near future, nor are most workplaces.

  27. Ray Says:

    I was hoping to see a diesel option. ( I know its not electric but the fuel economy of modern diesels are sometimes better than hybrids)