Runtime: 6:32
0:27 Honda Everus EV Concept
0:54 Nissan Sylphy EV for China
1:18 Dongfeng Venucia Debuts The X Concept
1:29 Jeep Reveals Chinese Grand Commander
2:33 GM Takes a Big Hit in Q1
3:09 FCA’s Q1 Earnings Beat Expectations
4:01 Ford Prunes U.S. Car Lineup…
4:44 … It Could Do the Same in Europe
5:07 Ford Earnings Show Cost Cutting Needs
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On today’s show… Ford takes an axe to its passenger car lineup… we’ve got more cool cars unveiled at the Beijing auto show… and FCA makes more money than anyone expected. All that and more coming right up on Autoline Daily.
This is Autoline Daily the show for enthusiasts of the automotive industry.
HONDA SHOWS EVERUS EV CONCEPT
China is making a big push for new energy vehicles and that’s what this year’s Beijing auto show is all about. Honda introduced the Everus EV Concept. It didn’t reveal many details, but did say the CUV is a concept for the first mass-produced Honda EV for China. It goes on sale before the year is out. And you know Honda. While they call this a concept, the production version to will look almost exactly the same.
NISSAN MAKES SEDAN VERSION OF LEAF FOR CHINA
Nissan introduced the Sylphy, its first electric car made in China for Chinese consumers. It’s based on the the Leaf, which isn’t a big surprise because it looks just like a sedan version of a Leaf. The EV will have a range of 338-kilometers or 210-miles based on China’s test standards and will go on sale later this year.
THE X MARKS THE SPOT
Nissan’s Chinese partner Dongfeng Venucia debuted “The X” SUV, which is said to reflect a new design language for the brand.
JEEP DEBUTS NEW CHINESE 3-ROW SUV
And Jeep unveiled this 3-row SUV, called the Grand Commander. You’ll notice styling cues from the Jeep Yuntu Concept as well as a few other bits and pieces from its current lineup. The SUV is powered by a 230-horsepower 2.0L turbocharged 4-cylinder engine, which is mated to a 9-speed automatic. If you’re wondering if the Grand Commander will make its way to North America, we don’t expect it to. It’s roughly the same size as the Grand Cherokee and as we reported previously, Jeep will introduce the Grand Wagoneer, a 3-row SUV for the U.S. market.
General Motors and FCA counted up all the money they made over the last three months and we’ll tell you what they found right after this.
GM TAKES A BIG HIT IN Q1
GM’s first quarter earnings took a big hit. The company sold a little over 2 million vehicles in the first three months of the year, which is a 10% drop. But that’s due to GM selling Opel and Vauxhall to PSA, which pretty much wiped out all of its sales in Europe. Its revenue hit $36 billion, a 3% decline. And Its operating income plunged 80%, while its net income plummeted 60%. But the bottom line was impacted by restructuring costs in South Korea.
| GM Q1, 2018 | ||
|---|---|---|
| Sales | 2.096 Million | -10.6% |
| Revenue | $36.1 Billion | -3.1% |
| Operating Income | $529 Million | -79.5% |
| Net Income | $1.04 Billion | -60.3% |
FCA BEATS EXPECTATIONS
FCA also reported its first quarter earnings. The company sold over 1.1 million vehicles, up 7% from the year before. However, its revenue fell 2%, which the company blames on foreign exchange rates. Its EBIT of 1.6 billion euros is a 5% gain. And its net profit soared nearly 60%.
| FCA Q1, 2018 | ||
|---|---|---|
| Sales | 1.15 Million | +7.0% |
| Revenue | €27 Billion | -2.0% |
| EBIT | €1.6 Billion | +5.0% |
| Net Profit | €1.02 Billion | +59% |
Ford is taking an axe to its passenger cars and coming up next we’ll tell you which ones are going to disappear from the showrooms.
FORD PRUNES U.S. CAR LINEUP…
A month ago we predicted that Ford would drop almost all its passenger cars in the U.S. market and yesterday the company made it official. It’s going to drop the Fiesta, C-Max, Fusion, and Taurus. The only cars Ford will keep are the Mustang and the Focus that it’s going to import from China. They didn’t say anything about Lincoln but that’s pretty easy to predict. They’ll get rid of the MKZ at the same time they drop the Fusion since those cars are made in the same plant in Mexico. And with sales of the Continental limping along at less than 1,000 units a month, it’s easy to predict that car will be dropped at the end of its product cycle.
… IT COULD DO THE SAME IN EUROPE
Ford did not announce any cuts outside of the U.S. market, but we think there are other models that could be on the chopping block. Four slow sellers that Ford has in Europe are the B-Max, the S-Max, the Mondeo and the Galaxy. Chopping them out of the lineup could save the company $3 to $4 billion in replacement costs.
FORD NEEDED TO CUT COST
And here’s why the company needs to drastically prune its model lineup. It’s financial performance isn’t that good. Ford sold 1.6 million vehicles worldwide in the last three months. That’s 41,000 fewer than a year ago. But it brought in $42 billion in revenues, up nearly $3 billion from before. But even though it’s revenue is up nicely, it posted a lower EBIT of $2.2 billion and its net profit barely rose, even though the company’s tax bill fell by nearly half a billion dollars. If not for Trump’s tax cut, profits would have been down 21%. Here’s the problem in a nutshell. Even though Ford’s revenue went up by 7%, its costs were up by 8%. And the fastest way to cut cost is to cut models.
| Ford Q1, 2018 | ||
|---|---|---|
| Sales | 1.6 Million | -41,000 |
| Revenue | $42 Billion | +$2.9 Billion |
| EBIT | $2.2 Billion | -$0.3 Billion |
| Net Profit | $1.7 Billion | +$0.1 Billion |
Don’t forget to join us for Autoline After Hours later this afternoon. We’ll have the Mahindra Roxor in the studio so we all can learn what this off-road vehicle is all about.
But that’s a wrap. Hope you see you again tomorrow.
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John McElroy is an influential thought leader in the automotive industry. He is a journalist, lecturer, commentator and entrepreneur. He created “Autoline Daily,” the first industry webcast of industry news and analysis.
