November 5th, 2012 at 12:59pm
Even amid an earthquake and flooding Toyota posts spectacular financial earnings. Nissan says by fixing of one type of wasted energy it could reduce consumption by 25 percent in its plants. Honda continues its man maximum, machine minimum concept with the N-ONE. All that and more, plus VW AG is the 8th largest employer in the world, but has done so in a unconventional way.
Thank you for joining us for a brand-new week of Autoline Daily, we’re glad you’re here! Later on we’ll have the results of our poll regarding the presidential election, but now the news.
THE BANK OF TOYOTA
Toyota posted its latest financial earnings and the numbers are nothing short of spectacular. It sold 2.2 million vehicles worldwide in the last three months an increase of almost 20 percent. This is before the big impact of the drop-off in sales in China. Total revenue came to a jaw-dropping $68 billion, an 18 percent increase. The company posted a $4.3 billion operating profit up 351 percent, while its net profit was $3.2 billion an increase of 220 percent. While Toyota continues to face challenges this is a very impressive comeback after the earthquake in Japan and the flooding in Thailand.
TOYOTA PONDERS PRIUS
Toyota is also reportedly trying to figure out how it should change the styling of the Prius to make it more popular. It’s trying to decide if it should just sort of evolve the design, or really change it. How about you? Which way would you go? Post your comments, we would love to know.
RENAULT REVIVES ALPINE
Renault announced it’s reviving the iconic Alpine sports car brand. It’s teaming up with Caterham to design, develop and build sports cars. Caterham gets a 50 percent stake in Alpine which Renault currently owns 100 percent. Both companies will sell vehicles under their own brands and say the models will be distinct from each other. The cars will be built at Alpine’s plant in France, with the first vehicles on sale within the next 3 to 4 years.
Automakers aren’t just looking to make their cars more efficient, they’re making their plants more efficient too. Nissan created an air-leak detection squad at its factories in North America, to find and fix wasted compressed air. Believe it or not this one of the most wasted of forms of energy at car plants, even more than electricity. There are miles of hose in a plant that provide compressed air for thousands of devices. The company says this can reduce energy consumption by 25 percent within the next ten years.
HONDA’S NEWEST KEI-CAR
Honda continues its man maximum, machine minimum concept with the newest vehicle in the Kei-car lineup, the N-ONE. It features a 660cc engine, that can be turbocharged, mated to a CVT trans in either front-wheel-drive or all-wheel- drive configurations. The N-ONE expands on Honda’s N-line and joins the N-BOX and the N-BOX+.
NISSAN’S BRAZILIAN CONCEPT CAR
Nissan says it has been inspired by Brazilian culture. It shows in the concept released at this years Sao Paulo auto show, the Extrem. The paint color called solar cortex draws from the sunrise and sunsets to the profile that embodies the vitality, the energy and the personality of Brazil. Nissan expects continued growth in Brazil with plans for eight new models by 2016.
Okay, now for our latest poll. We said: Pres. Obama claims he saved the auto industry. Mitt Romney said GM and Chrysler should’ve gone bankrupt. Who do you think is right? And the results show that 51 percent of you agree with Mitt Romney while 49 percent agree with Pres. Obama. That tracks with other polls, and shows just how closely this presidential election is running.
Coming up next, a look at why Volkswagen is the most amazing car company in the industry.
Any efficiency expert studying Volkswagen would have a fit. On paper the company looks like a productivity basket case.
Get this. VW AG employs 550,000 people globally. That’s a staggering number. Fortune magazine lists it as the 8th biggest employer in the world, behind giants such as Wall Mart and the Chinese post office. VW has almost as many full-time employees as General Motors, Ford and Fiat-Chrysler put together.
On an employee-per-vehicle basis, or a revenue-per-employee basis, Volkswagen looks hopelessly inefficient. And yet VW’s revenue of $200 billion dwarfs everyone else. Last year’s operating profit of $14 billion is the kind of bottom line performance you expect from Big Oil companies. While VW’s stated goal is to become the world’s largest car company by 2018, it’s already there if you measure it by revenue and profits.
So how can VW look so uncompetitive from a productivity standpoint, yet be so profitable?
That’s because today’s business schools have got it all wrong. They teach MBA’s that centralized operations eliminate overlap and duplication. Yet VW maintains strongly decentralized operations with lots of overlap. Business schools preach the benefits of outsourcing to cut cost. Yet VW is very vertically integrated.
All of VW’s brands from Audi to Skoda are treated as stand-alone companies. They have their own boards of directors, their own annual report, their own separate design, engineering and manufacturing. Yes, they do share some platforms and powertrains and purchasing, but that’s it. In other words, they have lots of overlap and duplication.
Guess what? That’s how GM used to run. In the 1960’s GM had over 700,000 employees, was very vertically integrated, and was the most profitable corporation in the world. Then the MBA’s ruined it all.
VW has an enormous competitive advantage that no amount of rationalization, cost-cutting, outsourcing or strategic partnerships is going to overcome. This is a direct threat to every car company in the world, but I wonder how many automotive executives are even aware of what they’re up against.
Anyway that’s how I see it. And that wraps up today’s show please join us again here tomorrow.