The Truth About Cars » Consolidation http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 02 Jul 2015 13:02:02 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » Consolidation http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/consolidation/ Jeep Points to Map of India, Says Let’s Print More Money Here http://www.thetruthaboutcars.com/2015/07/jeep-points-to-map-of-india-says-lets-print-more-money-here/ http://www.thetruthaboutcars.com/2015/07/jeep-points-to-map-of-india-says-lets-print-more-money-here/#comments Wed, 01 Jul 2015 19:00:11 +0000 http://www.thetruthaboutcars.com/?p=1104881 More and more automakers are looking at exotic locales to produce their wares (us Canadians can consider Mexico exotic thanks to its ice-free beaches) as they expand their brands and explore in-roads to untapped markets. For Jeep, that means investing in a shared money-printing press with an unlikely partner: Tata, the parent company of Land Rover. FCA […]

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2015 Jeep Renegade

More and more automakers are looking at exotic locales to produce their wares (us Canadians can consider Mexico exotic thanks to its ice-free beaches) as they expand their brands and explore in-roads to untapped markets.

For Jeep, that means investing in a shared money-printing press with an unlikely partner: Tata, the parent company of Land Rover. FCA will put $280 million USD into joint venture Fiat India Automobiles Private Limited which, since 2007, has solely produced Fiat models.

The investment will “support the production of a new Jeep vehicle and is expected to begin production in the second quarter of 2017,” according to statement released today by FCA. Jeep did not give further details on the new model.

With Sergio Marchionne’s hunger for consolidation, this could be seen as a sign of interest in a more formal arrangement between FCA and India’s Tata, especially when you consider the FCA executive’s desire for a Range Rover-esque model.

“We are pleased that this investment will strengthen FCA presence in India and are confident in the ability of the joint venture to produce world class products like those carrying the legendary Jeep nameplate,” Marchionne said.

This announcement is part of a wider expansion by Jeep into new markets. From The Detroit News:

FCA plans to produce 1.9 million Jeeps by 2018 at 10 plants in six countries: the U.S., Italy, China, Brazil, India and one other yet-to-be-announced country. Two years ago, only 798,000 rolled out of four plants in the United States.

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Marchionne Not Yet Ready For GM, Fields Not Interested In Any Merger http://www.thetruthaboutcars.com/2015/06/marchionne-not-yet-ready-for-gm-fields-not-interested-in-any-merger/ http://www.thetruthaboutcars.com/2015/06/marchionne-not-yet-ready-for-gm-fields-not-interested-in-any-merger/#comments Fri, 26 Jun 2015 20:00:09 +0000 http://www.thetruthaboutcars.com/?p=1100777 FCA CEO Sergio Marchionne says he’s not ready to court General Motors’ shareholders for a merger, while Ford’s Mark Fields prefers no mergers at all. Though Marchionne was said to be gathering allies in the finance field to help persuade GM’s investors to consider consolidation — having been rebuffed already by CEO Mary Barra — […]

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Fiat 500 At Tuscany Wedding Circa April 2014

FCA CEO Sergio Marchionne says he’s not ready to court General Motors’ shareholders for a merger, while Ford’s Mark Fields prefers no mergers at all.

Though Marchionne was said to be gathering allies in the finance field to help persuade GM’s investors to consider consolidation — having been rebuffed already by CEO Mary BarraReuters says he stated the following while on the sidelines at Wednesday’s unveiling of the Alfa Romeo Guilia:

We are very far removed from any of those scenarios today. None of my staff has spoken to them, I haven’t spoken to them, nobody is under instruction to speak to them.

When asked about the possibility of going hostile in his ongoing need for industry consolidation, Marchionne’s reply was to proclaim those who “kept wasting capital” were the ones meting out the hostility.

One such individual would likely be Fields. Per The Detroit Bureau, the Ford CEO told reporters attending the annual Further With Ford conference mergers with any automaker, let alone FCA, were out of the question:

We have no interest or plan other than accelerating the One Ford Plan; delivering product excellence and driving innovation in every part of our business. We are never going to take our eye off of being a great developer of cars, trucks and utility vehicles.

Fields added he would consider ways to improve his company’s overall business model, stating it was important for Ford “to open up that lens” in order to lead the industry towards betterment.

(Photo credit: Monica Arellano-Ongpin/Flickr/CC BY 2.0)

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General Motors, FCA Recruit Advisors Amid Merger Standoff http://www.thetruthaboutcars.com/2015/06/general-motors-fca-recruit-advisors-amid-merger-standoff/ http://www.thetruthaboutcars.com/2015/06/general-motors-fca-recruit-advisors-amid-merger-standoff/#comments Thu, 18 Jun 2015 15:00:22 +0000 http://www.thetruthaboutcars.com/?p=1095169 The Lifetime movie starring FCA has reached the “dangerous stalker” phase, as the automaker and General Motors recruit advisors amid a merger standoff. Despite GM and CEO Mary Barra both rebuffing FCA’s and CEO Sergio Marchionne’s attempts to consolidate the two automakers and their respective resources, the former has brought aboard Goldman Sachs and Morgan […]

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Abarth 500

The Lifetime movie starring FCA has reached the “dangerous stalker” phase, as the automaker and General Motors recruit advisors amid a merger standoff.

Despite GM and CEO Mary Barra both rebuffing FCA’s and CEO Sergio Marchionne’s attempts to consolidate the two automakers and their respective resources, the former has brought aboard Goldman Sachs and Morgan Stanley for advice in handling the latter’s attempts to force the issue, Reuters reports. FCA is being advised by UBS, with help from Lazard via the automaker’s founding Agnelli family.

For months, Marchionne has been beating the drum of consolidation, going as far as to recruit GM investors to force the automaker’s board to meet FCA at the negotiation table. His reasoning amounts to reducing costs involved in developing platforms and technologies for new vehicles by spreading those costs throughout two or more merged parties.

However, for FCA to make GM theirs forever and always, sources close to the matter claim the automaker would need to pay $77 billion in an all-stock transaction, based on GM’s shareholders demanding a 35 percent premium regarding market capitalization, as well as a significant payout on their shares.

The hostile takeover would put FCA under financial strain, as well. Its market value — most of which is linked to Ferrari, which is set to strike out on its own later this year — is around $57 billion, while capitalization is $20 billion, much smaller than GM’s respective figures of $84 billion and $57 billion.

(Photo credit: Shane Hayes/Flickr/CC BY-ND 2.0)

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Toyota, Ford Show No Interest In Heading Down The Aisle With FCA http://www.thetruthaboutcars.com/2015/06/toyota-ford-show-no-interest-in-heading-down-the-aisle-with-fca/ http://www.thetruthaboutcars.com/2015/06/toyota-ford-show-no-interest-in-heading-down-the-aisle-with-fca/#comments Fri, 12 Jun 2015 16:00:51 +0000 http://www.thetruthaboutcars.com/?p=1091505 When General Motors ultimately rebuffs FCA’s attempts to put a ring on it, Toyota or Ford could be the one true love, right? Not so fast. Toyota North America CEO Jim Lentz told those attending a groundbreaking ceremony at the Toyota Technical Center in York Township, Mich. his employer had not been contacted by FCA […]

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Toyota North America Groundbreaking Ceremony

When General Motors ultimately rebuffs FCA’s attempts to put a ring on it, Toyota or Ford could be the one true love, right? Not so fast.

Toyota North America CEO Jim Lentz told those attending a groundbreaking ceremony at the Toyota Technical Center in York Township, Mich. his employer had not been contacted by FCA CEO Sergio Marchionne about consolidation between the two, The Detroit News reports.

Had the suggestion been made, however, Lentz says it wouldn’t happen, as there would be “no advantage” for Toyota to consider such a move, citing Ford’s decision to avoid bankruptcy by selling off brands like Volvo and Land Rover to focus on a simpler portfolio:

To me, a large OEM today taking on Chrysler is contrary to what was very successful for Ford. FCA has a very strong Jeep brand, and especially today with fuel prices, it’s a great brand to have… but it really isn’t a fit for what we need at Toyota.

Speaking of Ford, CFO Bob Shanks said consolidation could occur at the supplier level, as well as partnerships with other automakers to share powertrain and transmission technology. As for Ford marrying FCA, however:

We’re not a suitor for FCA. We don’t see that type of opportunity as one that applies to us.

We have a lot of experience with mergers… We’re not babes in the woods. Based on that experience, for us that doesn’t seem to be where we’d want to go. We want to have a more forward-looking perspective in terms of what’s happening in the industry… It doesn’t seem to be that it would be doubling down on the past.

Kelley Blue Book senior analyst Karl Brauer had some encouraging news for Marchionne, stating FCA would its true love eventually, just not among the larger automakers, whom Brauer believes already have enough on their minds as it is without seeing a Ram 1500 in the parking lot blasting “Every Breath You Take” and “Wrapped Around Your Finger” from its custom bed with embedded nine-speaker audio system:

Poor Sergio; always a bridesmaid, never a bride.

[Photo credit: Toyota]

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Marchionne Planning Shotgun Wedding For FCA With General Motors http://www.thetruthaboutcars.com/2015/06/marchionne-planning-shotgun-wedding-for-fca-with-general-motors/ http://www.thetruthaboutcars.com/2015/06/marchionne-planning-shotgun-wedding-for-fca-with-general-motors/#comments Tue, 09 Jun 2015 18:00:22 +0000 http://www.thetruthaboutcars.com/?p=1088273 How desperate has FCA CEO Sergio Marchionne become about marrying off his company? He’s asking activist investors to prod General Motors to the chapel. Marchionne recently began reaching out to hedge funds and other activist investors to help bring FCA and GM (or a European automaker) together to consolidate resources, Wall Street Journal reports. The […]

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Fiat Coupe Getting Ready To Be Married

How desperate has FCA CEO Sergio Marchionne become about marrying off his company? He’s asking activist investors to prod General Motors to the chapel.

Marchionne recently began reaching out to hedge funds and other activist investors to help bring FCA and GM (or a European automaker) together to consolidate resources, Wall Street Journal reports.

The search, which is coming up blank thus far, is the latest in the CEO’s attempt to find a happy ending for his increasingly desperate romantic tragicomedy film, fearing excess production and duplicate costs in engineering, R&D et al threaten future profitability of the overall industry.

For now, though, FCA’s low profit margins do not make for a good partner with stronger players, while Marchionne’s dealings with GM leave much to be desired. In 2005, he convinced the Detroit automaker to pay $2 billion to not buy Fiat — in hospice care by then — a move which also dissolved a five-year-old partnership to produce engines and transmissions together.

More recently, Marchionne attempted to woo GM back with an email to CEO Mary Barra suggesting as much. The automaker is transitioning its lineup to global architectures and can build said lineup on a broader scale than FCA. GM is also undergoing an internal consolidation to further boost profits, a plan Barra and others in management won’t allow to be derailed by outside distractions like Marchionne holding up a boombox in front of the RenCen playing Peter Gabriel, hoping GM will say anything but no.

However, Barra’s recent dealings with activist investors over a share buyback of $8 billion — resulting in a $5 billion buyback with no further issues regarding board seats — has given Marchionne hope for his own cause, which could become more aggressive with every breath GM takes.

[Photo credit: hamster!/Flickr/CC BY-ND 2.0]

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Bloomberg: Subaru “has to decide what kind of company it wants to be” http://www.thetruthaboutcars.com/2015/06/bloomberg-subaru-has-to-decide-what-kind-of-company-it-wants-to-be/ http://www.thetruthaboutcars.com/2015/06/bloomberg-subaru-has-to-decide-what-kind-of-company-it-wants-to-be/#comments Mon, 08 Jun 2015 16:47:59 +0000 http://www.thetruthaboutcars.com/?p=1087729 Subaru has a problem, though it’s a problem many other automakers would love to have. The small Japanese automaker is growing at a rapid rate and it’s fully expected to run out of capacity to fulfill demand sooner rather than later. Most automakers would simply expand and flood the market with more units to feed the […]

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2015-Subaru-Outback-01

Subaru has a problem, though it’s a problem many other automakers would love to have. The small Japanese automaker is growing at a rapid rate and it’s fully expected to run out of capacity to fulfill demand sooner rather than later. Most automakers would simply expand and flood the market with more units to feed the sales rush, but for Subaru it might mean becoming the opposite of the market position and perception they’ve taken years to cultivate.

As Bloomberg‘s Kyle Stock puts it, “Being small, though, is the reason Subaru has become such a big deal. With manufacturing capacity maxed out, it now has to decide what kind of company it wants to be.”

The article, published today, paints Subaru between a rock and a hard place with two options: stay small and negate future growth or expand and possibly alienate all those customers who bought into the brand under the promise “Love. It’s what makes a Subaru, a Subaru.”

Subaru’s recent growth isn’t driven purely by marketing, but also because the small manufacturer was positioned in the right place at the right time with the Outback and Forester, both of which sit squarely in the currently hot crossover segment. In fact, even the lowest selling crossover in Subaru’s lineup, the Impreza-based XV Crosstrek, outsold their top selling passenger car, the Impreza, by over 14,000 units in 2014.

That makes what Subaru doesn’t do right now of particular interest. From Bloomberg:

It doesn’t have a luxury brand like Honda’s Acura or Toyota’s Lexus. It still doesn’t make a giant SUV, or a truck, or a super-expensive “halo car” designed to drum up interest from teenagers and the Top Gear crowd. Its sedans aren’t particularly popular and the company doesn’t make much of an effort to sell cars in Europe, the Middle East, or South America, like Nissan or Ford does. Kansas is the closest thing it has to an emerging market. Subaru still can’t meet demand. By the end of next year, Subaru’s factories in the U.S. and Japan won’t be able to produce more vehicles.

Currently, Subaru is enjoying a sky high 9 percent profit. However, if it does choose to expand and the crossover boom goes bust, it could leave Subaru vulnerable as it will need to discount their way into driveways to keep operations afloat. With incentives comes lower resale values, in turn driving consumers to competitors – the same customers that appreciate Subaru’s smallness.

What will Subaru do? We’ll see. But, mass market is not what has made Subaru a successful Subaru to date.

 

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FCA Delaying Dozen Model Introductions, Redesigns Across Product Range http://www.thetruthaboutcars.com/2015/06/fca-delaying-dozen-model-introductions-redesigns-across-product-range/ http://www.thetruthaboutcars.com/2015/06/fca-delaying-dozen-model-introductions-redesigns-across-product-range/#comments Tue, 02 Jun 2015 16:00:27 +0000 http://www.thetruthaboutcars.com/?p=1082089 Suppliers close to FCA and its plans say production for a dozen new and redesigned models have been delayed, including key Jeep and Ram offerings. While high-margin products like the Jeep Wrangler, Grand Cherokee, and Ram 1500 wait for their redesigns, Alfa Romeo may be the only brand in FCA’s portfolio to receive its awaited […]

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2015 Jeep Wrangler Willys Wheeler Edition

Suppliers close to FCA and its plans say production for a dozen new and redesigned models have been delayed, including key Jeep and Ram offerings.

While high-margin products like the Jeep Wrangler, Grand Cherokee, and Ram 1500 wait for their redesigns, Alfa Romeo may be the only brand in FCA’s portfolio to receive its awaited models much sooner than planned, Reuters reports.

The suppliers stated a number of reasons behind the delays, including last-minute design and engineering changes, especially those whose changes could reduce the automaker’s overall investment in its products in the short-term as CEO Sergio Marchionne continues seeking a partner for consolidation. FCA held a net debt of €8.6 billion ($9.6 billion USD) at the end of Q1 2015, while cash and marketable securities fell €1.1 billion ($1.2 billion) over the same period.

Despite the automaker’s focus on updating its most profitable models, redesigns of said models are being pushed back. The redesigned Ram 1500 was to hit production by the middle of 2017, but the suppliers say the pickup will begin its trip down the line in November 2017. Meanwhile, the Jeep Wrangler is set for a July 2017 introduction instead of earlier in the year, the Grand Cherokee may be delayed by as much as a year from its autumn 2017 launch, and the Grand Wagoneer — which is expected to share its underpinnings with the Grand Cherokee — may not make its autumn 2018 production date.

Other models to see delays in introduction or redesign include: a Jeep compact crossover to replace the Patriot/Compass siblings (pushed back six months from spring 2016); Dodge Dart and Journey (full redesign set for 2019-2020); Chrysler 300, Dodge Charger and Challenger (new designs to now come in 2019 or later); and Chrysler full-size and mid-size crossovers (postponed/shelved from 2017 and 2018 introductions).

[Photo credit: Jeep]

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Elkann: Marchionne Emailed Barra, Others About Consolidation http://www.thetruthaboutcars.com/2015/05/elkann-marchionne-emailed-barra-others-about-consolidation/ http://www.thetruthaboutcars.com/2015/05/elkann-marchionne-emailed-barra-others-about-consolidation/#comments Fri, 29 May 2015 18:00:25 +0000 http://www.thetruthaboutcars.com/?p=1078122 FCA Chairman John Elkann confirmed CEO Sergio Marchionne did email General Motors CEO Mary Barra about consolidation, though GM wasn’t the only one. Elkann informed reporters the email wasn’t the only one sent by Marchionne, though the chairman didn’t specify who else Marchionne contacted about marriage, Reuters reports. He adds FCA could consider a hostile […]

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Fiat 500 Backside Badging

FCA Chairman John Elkann confirmed CEO Sergio Marchionne did email General Motors CEO Mary Barra about consolidation, though GM wasn’t the only one.

Elkann informed reporters the email wasn’t the only one sent by Marchionne, though the chairman didn’t specify who else Marchionne contacted about marriage, Reuters reports. He adds FCA could consider a hostile bid for GM or another automaker “if there are the prerequisites to do something that makes sense,” again opting to remain vague on details.

As far as marriage in general is concerned, Elkann supports Marchionne’s campaign for overall industry consolidation, hoping the action would spark debate. He also believes consolidation will happen, but declined to say who he thought would make the ideal partner to take FCA’s hand, adding his company had “very good prospects” for the future.

[Source: Fiat]

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Marchionne Hearing Wedding Bells By 2018, No Marriage With Opel http://www.thetruthaboutcars.com/2015/05/marchionne-hearing-wedding-bells-by-2018-no-marriage-with-opel/ http://www.thetruthaboutcars.com/2015/05/marchionne-hearing-wedding-bells-by-2018-no-marriage-with-opel/#comments Thu, 28 May 2015 16:00:31 +0000 http://www.thetruthaboutcars.com/?p=1077282 FCA CEO Sergio Marchionne believes consolidation will occur as early as 2018. Meanwhile, Opel won’t be taking FCA’s hand in marriage. Opel CEO Karl-Thomas Neumann stated a merger between his company and FCA was not going to happen, though he agreed with Marchionne in principle regarding such mergers, Reuters reports, especially in regards to volume, […]

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Fiat Cinquecento Ready For The Wedding Circa July 2011

FCA CEO Sergio Marchionne believes consolidation will occur as early as 2018. Meanwhile, Opel won’t be taking FCA’s hand in marriage.

Opel CEO Karl-Thomas Neumann stated a merger between his company and FCA was not going to happen, though he agreed with Marchionne in principle regarding such mergers, Reuters reports, especially in regards to volume, scale and utilisation.

Opel’s decision to remain within the General Motors family follows a similar rebuff by GM CEO Mary Barra, who received an email from Marchionne in March suggesting the two combine forces. When asked about the email on a recent visit to FCA’s factory in Melfi, Italy, Marchionne said he writes “lots of emails,” adding he doesn’t talk about such major decisions as consolidation via email.

Meanwhile, Marchionne is holding onto the idea of consolidation overall, believing the industry will see the first occurrence as early as 2018. He didn’t specify his company would be the one heading down the aisle in said consolidation, however.

[Source: neekoh.fl/Flickr/CC BY 2.0]

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Marchionne May Marry FCA To Apple, Google If No Automaker Will http://www.thetruthaboutcars.com/2015/04/marchionne-may-marry-fca-apple-google-no-automaker-will/ http://www.thetruthaboutcars.com/2015/04/marchionne-may-marry-fca-apple-google-no-automaker-will/#comments Thu, 30 Apr 2015 16:00:11 +0000 http://www.thetruthaboutcars.com/?p=1056962 FCA CEO Sergio Marchionne’s search for a consolidation partner may take him to Silicon Valley if the automakers won’t give him the time of day. While making his pitch for consolidation during Wednesday’s Q1 2015 earnings call, Marchionne said dialogue about a possible partnership with Apple or Google if he couldn’t pair FCA off with […]

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Apple Logo Circa 2005

FCA CEO Sergio Marchionne’s search for a consolidation partner may take him to Silicon Valley if the automakers won’t give him the time of day.

While making his pitch for consolidation during Wednesday’s Q1 2015 earnings call, Marchionne said dialogue about a possible partnership with Apple or Google if he couldn’t pair FCA off with another automaker should be encouraged, Bloomberg reports.

His reasoning?

I’ve always been intrigued by the notion of having technology disruptors show up in the marketplace and change the paradigm. If they show up and they are truly successful, with their cash piles and know-how, they could fundamentally hurt this industry.

At present, FCA already has an established relationship with Apple, with the tech giant’s Internet software and services boss Eddy Cue having a seat on Ferrari’s board, and CFO Luca Maestri having several years of experience in the automotive industry, including helming General Motors’ relationship with Fiat between 2000 and 2005.

On the other end, Apple is hard at work on an EV, with production set for 2020 unless the execs aren’t happy with progress. The company’s shareholders also would like Apple to pair-off with Tesla — the most recent urging occurring last month — though CEO Tim Cook only stated that the Californian automaker would use his company’s CarPlay connected-vehicle system.

As far as FCA and Apple heading down to the chapel is concerned, no one at the latter offered any comment to Marchionne’s proposal. With the company having just purchased Beats for $3 billion last year and divesting itself of in-house production of its physical offerings, a deal between it and any automaker, let alone FCA, isn’t likely at this time.

[Photo credit: Christopher Aloi/Flickr/CC BY-SA 2.0]

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Marchionne Makes Case For Consolidation With 25-Page PowerPoint http://www.thetruthaboutcars.com/2015/04/marchionne-makes-case-consolidation-powerpoint-presentation/ http://www.thetruthaboutcars.com/2015/04/marchionne-makes-case-consolidation-powerpoint-presentation/#comments Wed, 29 Apr 2015 17:00:31 +0000 http://www.thetruthaboutcars.com/?p=1056346 Not one to give up on corporate marriage, FCA CEO Sergio Marchionne posted a merger thesis on his company’s website prior to FCA’s Q1 2015 earnings call. The 25-page PowerPoint presentation – titled “Confessions of a capital junkie” – makes the case for consolidation by outlining several key issues all automakers are facing, and the savings that […]

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Sergio Marchionne at the Italian Embassy in DC Circa February 2012

Not one to give up on corporate marriage, FCA CEO Sergio Marchionne posted a merger thesis on his company’s website prior to FCA’s Q1 2015 earnings call.

The 25-page PowerPoint presentation – titled “Confessions of a capital junkie” – makes the case for consolidation by outlining several key issues all automakers are facing, and the savings that could be garnered only through consolidation, Detroit Free Press reports.

Despite being blown off by General Motors, Ford, Peugeot and a handful of others over the past few weeks, Marchionne states the presentation doesn’t let his company off the hook as far as its current position “in the automotive food chain” goes, nor is it an attempt to sell FCA, a revision of his five-year plan, or his “final big deal.” Instead, he goes into the need to consolidate companies to better handle increasing capital investment costs as far as rapid technological development, climbing regulatory costs, and tightening emissions standards go.

According to Marchionne, consolidation would not only reduce the aforementioned costs, but better optimization of industrial allocations and “an exceptional value creation opportunity for shareholders” while leaving jobs, distribution and brands untouched.

[Photo credit: Italian Embassy/Flickr/CC BY-ND 2.0]

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German Automakers Rally In Support of US-EU Trade Agreement http://www.thetruthaboutcars.com/2015/01/german-automakers-rally-support-us-eu-trade-agreement/ http://www.thetruthaboutcars.com/2015/01/german-automakers-rally-support-us-eu-trade-agreement/#comments Wed, 28 Jan 2015 15:00:17 +0000 http://www.thetruthaboutcars.com/?p=989578 Leaders from Germany’s automotive sector held a rally Wednesday in Berlin to lend support to a transatlantic trade agreement heavily facing opposition. Automotive News reports the agreement between the European Union and the United States, which is supported by the likes of Daimler AG’s Dieter Zetsche, Volkswagen AG’s Martin Winterkorn, and even Germany’s chancellor Angela […]

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Leaders from Germany’s automotive sector held a rally Wednesday in Berlin to lend support to a transatlantic trade agreement heavily facing opposition.

Automotive News reports the agreement between the European Union and the United States, which is supported by the likes of Daimler AG’s Dieter Zetsche, Volkswagen AG’s Martin Winterkorn, and even Germany’s chancellor Angela Merkel, would be the largest such agreement put into play when signed. The deal would deliver a gain of €119 billion ($135 billion USD) for the EU and $131 billion for the U.S. by 2027, which equals an average of €545 ($620) and $910 for a family of four in their respective locations. Eighty percent of the gains would be the result of eliminating duplication costs linked to maintenance of two different bureaucracies and regulations.

However, German union IG Metall and various consumer groups take issue with key parts of the agreement, if not the entire agreement itself. For the union, the investor-to-state dispute settlement mechanism — which grants corporations the right to sue the government if revenue is lost due to government policy — is unacceptable, as are the threats of softening environmental and consumer protections, and hollowed workers’ rights. Other groups fear U.S. companies could force European legislators to draft policies in the former’s favor, and “harmonize safety or product standards downward.”

As for why the German automakers are rallying, the aforementioned harmonization would allow all automakers to focus on one set of safety and emission standards, thus allowing for the possibility of buying a new car from a different market without waiting 25 years first. That said, the agreement could collapse without majority support from all 28 members of the European Parliament.

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Marchionne: New No. 1 Manufacturer Could Arise From Mergers http://www.thetruthaboutcars.com/2014/10/marchionne-new-1-manufacturer-arise-mergers/ http://www.thetruthaboutcars.com/2014/10/marchionne-new-1-manufacturer-arise-mergers/#comments Thu, 09 Oct 2014 14:00:34 +0000 http://www.thetruthaboutcars.com/?p=928018 Fiat Chrysler Automobiles CEO Sergio Marchionne — who will be retiring from the company after the next five-year plan runs its course after 2018 — believes mergers between automakers will one day result in a new No. 1 automaker. According to Bloomberg, the driving factor in creating an automaker above Toyota on the global manufacturer […]

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Sergio Marchionne - FCA

Fiat Chrysler Automobiles CEO Sergio Marchionne — who will be retiring from the company after the next five-year plan runs its course after 2018 — believes mergers between automakers will one day result in a new No. 1 automaker.

According to Bloomberg, the driving factor in creating an automaker above Toyota on the global manufacturer podium will come down to money and competition, as automakers will likely need more of the former to develop and produce new vehicles while also fending off all comers, merging with potential partners as needed.

As far as FCA is concerned, chair John Elkann says the company would be ready to consolidate resources with another within the next five to 10 years “if it makes sense” to do so. The company would look outside of Europe for a partner if and when the time comes.

For now, FCA plans to take sixth place by expanding sales on the strength of new models, such as the upcoming Jeep Renegade and the reintroduction of Alfa Romeo to the United States market. The automaker aims to deliver 7 million units in 2018, compared with 4.4 million in 2013.

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Buffett Enters Dealership Business With Van Tuyl Group Purchase http://www.thetruthaboutcars.com/2014/10/buffett-enters-dealership-business-van-tuyl-group-purchase/ http://www.thetruthaboutcars.com/2014/10/buffett-enters-dealership-business-van-tuyl-group-purchase/#comments Mon, 06 Oct 2014 12:00:46 +0000 http://www.thetruthaboutcars.com/?p=926441 Warren Buffett — no relation to Jimmy — is a lot of things: investor extraordinaire, railroad magnate, newspaper mogul, hip-hop enthusiast et al. As of last Thursday, however, he picked up a new title: master auto dealer. Bloomberg reports Buffett’s Berkshire Hathaway purchased Arizona-based Van Tuyl Group, the largest privately owned auto dealership group in […]

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Grand Re-Opening Of Jay-Z's 40/40 Club - Inside

Warren Buffett — no relation to Jimmy — is a lot of things: investor extraordinaire, railroad magnate, newspaper mogul, hip-hop enthusiast et al. As of last Thursday, however, he picked up a new title: master auto dealer.

Bloomberg reports Buffett’s Berkshire Hathaway purchased Arizona-based Van Tuyl Group, the largest privately owned auto dealership group in the United States, for an undisclosed sum. Namesake Larry Van Tuyl will continue to run the show, especially with Buffett’s plans to scale operations significantly.

The purchase is a bet on the consolidation of the dealership industry overall, as a handful of groups — like AutoNation, Group 1 and Penske — come into more dealerships; Van Tuyl operates 78 in 10 states, including Arizona, Texas and Nebraska.

Once the paperwork is sorted in Q1 2015, the group will be renamed Berkshire Hathaway Automotive. The group has over $8 billion in revenue.

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Volvo Restructuring To Three Families, Configurations By 2019 http://www.thetruthaboutcars.com/2014/08/volvo-restructuring-three-families-configurations-2019/ http://www.thetruthaboutcars.com/2014/08/volvo-restructuring-three-families-configurations-2019/#comments Fri, 29 Aug 2014 10:00:44 +0000 http://www.thetruthaboutcars.com/?p=903194 By 2019, the face of Volvo will change as the Sino-Swedish automaker begins restructuring its offerings, with the new XC90 leading the way. Autoblog reports Volvo will align its lineup portfolio around three families (40, 60, 90) and three designations/configurations (S sedan, V wagon, XC crossover). In turn, the 40 family will share a platform […]

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Volvo-XC90-2015-119

By 2019, the face of Volvo will change as the Sino-Swedish automaker begins restructuring its offerings, with the new XC90 leading the way.

Autoblog reports Volvo will align its lineup portfolio around three families (40, 60, 90) and three designations/configurations (S sedan, V wagon, XC crossover). In turn, the 40 family will share a platform with parent company Geely’s offerings, while the 60 and 90 families will use Volvo’s SPA modular platform.

Additionally, the V40/V60/V90 wagons will have a Cross Country variant, matching up with Audi’s and Subaru’s offroad formula for their respective non-rugged base offerings. Meanwhile, R-Design and Polestar will apply their magic performance touches to a few of the new vehicles, going up against similar efforts from BMW, Mercedes and Audi.

All of the above are expected to come online within the next four years, but no coupes or convertibles are in the plans, citing a lack of a case for either at this time. Volvo will instead focus on boosting its volume, with a goal of 800,000 units for 2014 alone.

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Fiat Sets Date Of Shareholder Meeting For August 1 http://www.thetruthaboutcars.com/2014/07/fiat-sets-date-of-shareholder-meeting-for-august-1/ http://www.thetruthaboutcars.com/2014/07/fiat-sets-date-of-shareholder-meeting-for-august-1/#comments Fri, 04 Jul 2014 13:00:38 +0000 http://www.thetruthaboutcars.com/?p=858633 Own any shares in Fiat S.p.A.? The automaker just announced it will hold its next general assembly of all shareholders August 1, where the topic of discussion will be the approval of the merger of Fiat with Chrysler Group to become Fiat Chrysler Automobiles N.V. Reuters reports shareholders will also be asked to approve the […]

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A new Fiat Chrysler Automobiles sign is pictured after being unveiled at Chrysler Group World Headquarters in Auburn Hills, Michigan

Own any shares in Fiat S.p.A.? The automaker just announced it will hold its next general assembly of all shareholders August 1, where the topic of discussion will be the approval of the merger of Fiat with Chrysler Group to become Fiat Chrysler Automobiles N.V.

Reuters reports shareholders will also be asked to approve the merger of Fiat with its wholly owned subsidiary Netherlands Fiat Investments N.V. prior to the FCA vote. The meeting would allow CEO Sergio Marchionne to list FCA on the New York Stock Exchange by October at the earliest.

Those who approve FCA’s existence will receive one FCA common share for every Fiat share they hold, while those against will have the right of withdrawal for the next 15 days, with the redemption price set to €7.727 ($10.51 USD) per Fiat share.

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Endless GM Recall Parade Sign Of Industry-Wide Action To Come http://www.thetruthaboutcars.com/2014/05/endless-gm-recall-parade-sign-of-industry-wide-action-to-come/ http://www.thetruthaboutcars.com/2014/05/endless-gm-recall-parade-sign-of-industry-wide-action-to-come/#comments Thu, 22 May 2014 10:00:56 +0000 http://www.thetruthaboutcars.com/?p=828562 Detroit Free Press posits the endless recall parade General Motors has been leading since late February 2014 may be doing more harm than good for public perception or its bottom line. Though spokesman Greg Martin claimed the recalls were an effort to make his employer “a first-class safety organization” by focusing hard upon the consumer, […]

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GM RenCen Storm Clouds

Detroit Free Press posits the endless recall parade General Motors has been leading since late February 2014 may be doing more harm than good for public perception or its bottom line. Though spokesman Greg Martin claimed the recalls were an effort to make his employer “a first-class safety organization” by focusing hard upon the consumer, a survey by AutoTrader found 51 percent of auto consumers were less confident in the industry’s overall safety record as a result of the actions by GM, up from 44 percent who thought the same five days’ earlier. In addition, the automaker will take a $400 million charge in Q2 2014 for the recalls since April 1 as of this writing, while its current stock price of $33.07 per share is a few cents above its IPO price from November 2010.

Autoblog continues on this thread, proclaiming what GM is doing is the beginning of an industry-wide shift toward issuing full recalls for any flaw in a given product, all under heightened scrutiny from the public and government regulators. For the first months of this year alone, all automakers have recalled a total of 22.4 million vehicles, the bulk of which belong to GM. Kelly Blue Book analyst Akshay Anand says the parade is a double-edge sword, particularly for the General; while such recalls are a sign automakers are being proactive in ensuring their products are as safe as they can be, consumers may perceive the effort as a sign automakers are failing to do their job well in the first place.

Automotive News follows with Fiat Chrysler Automobiles CEO Sergio Marchionne, who stated in a panel discussion at the Brookings Institute this week what else might occur when the GM-led parade becomes a permanent fixture in the industry:

If effectively this frequency of recalls becomes a norm, if everybody starts doing this, then I think you will see this cost being shifted to the consumer. It will transfer itself over onto the selling price of the vehicle.

Marchionne adds automakers, in turn, will act more sensibly in handling potential defects in product, noting punitive actions — such as paying $35 million in fines to the National Highway Traffic Safety Administration — will have little in the way of such handling when reputation is the bigger issue for the industry as a whole.

Speaking of the main parade itself, Autoblog reports 218,000 2004 through 2008 Chevrolet Aveos have been recalled due to the daytime running light module in the instrument panel possibly overheating, melting and setting the vehicle ablaze. According to spokesman Alan Adler, the automaker is “aware of some fires” so far, and is working on a fix for the module. Adler adds that while he doesn’t know when the fix will come, GM will send a second notice to owners when the time comes to schedule repair work.

Detroit Free Press concludes by explaining why GM continues to issue recalls as it combs through its records to avoid another decade-long delay in taking such action:

  • The government has ordered the automaker to meet with the NHTSA monthly on investigations and recalls as part of the former’s $35 million settlement with the latter
  • GM CEO Mary Barra’s appointment of Jeff Boyer to global quality chief — with the mandate to report directly to her if necessary — means anything deemed dangerous or otherwise unknown, including previously unreported defects — are up for attention
  • The automaker’s investors prefer to get the bad news out of the way and accept whatever potential pain awaits in as few quarters as possible, even if no one is happy about swallowing such medicine in the first place

The Freep also provided a list of every recall from January through this week, minus the latest recall issued Wednesday; total recall to date is 18,666,842.

GM

On the sales front, Automotive News reports dealers won’t be able to sell any of the 2009 through 2014 Chevrolet Traverse, Buick Enclave and GMC Acadia crossovers thanks to a stop-sale order issued in a recall involving the front seat belt cable in the vehicles. The order comes during one of the biggest sales weekends of the year, putting a damper on potential Memorial Day promotions. Though dealers could still close on sales without actually allowing the vehicle to leave the lot, no test drives can be carried out in affected demonstrators, making such sales more difficult. GM is offering an end-of-month incentive to maintain May sales momentum, but that may not be enough to offset the extra floorplanning costs if few vehicles can be sold until the affected units are repaired.

Back in the Beltway, Barra met with U.S. Senator Claire McCaskill of Missouri and other members of Congress to discuss recent findings in the February 2014 ignition switch recall. Though spokesman Greg Martin confirmed the meetings did take place, he did not give details on all that was said between Congress and the CEO.

Meanwhile, members of the Obama administration who helped assemble the rescue packages for both Chrysler and GM said they knew nothing about the out-of-spec switch at the heart of the recall maelstrom when said packages were crafted between them and the automaker’s senior execs. One member, Harry Wilson, stated that even if the task force asked GM point-blank about the switch, he doubted they would ever get a straight answer. Lead adviser Steven Rattner added that as far as he knew, the execs before him then didn’t know about the problem; therefore, neither could his task force.

Over in Texas, Bloomberg both GM and supplier Delphi have asked the Texas Supreme Court to combine four suits linked to the switch into one state case. The claim is fighting each one separately would cost the duo time and money, while combining the four and rolling subsequent cases going forward into a single case would “eliminate duplicative discovery, void conflicting pretrial rulings, conserve judicial resources, be more convenient for the parties and witnesses and otherwise promote a more just and efficient conduct of this litigation.” The cases mention involve wrongful injury and death.

With GM’s cadre of lawyers coming under the gun now, Detroit Free Press reports the automaker’s general counsel Michael Millikin has named attorney Lucy Clark Doughtery to advise Boyer and product development chief Mark Reuss. Millikin is also working with independent lawyer Anton Valukas on the internal investigation into why GM handled the recall the way it had. The general counsel’s own future with the company has been called into question, though GM claims Millikin has no “current plans to retire” at this time.

In financial news, Automotive News says GM Financial is preparing to go under its own test of scrutiny of loans originated by its dealership network in an effort to avoid punitive action by the Consumer Financial Protection Bureau based on allegations of discrimination in lending rates among minority consumers. The lender’s chief compliance officer, Dan Bickmore, says his role is to help reorganize the company into compliance with the CFPB, going as far as to establish a new compliance department and boosting the lender’s complaint management process and fair lending areas. He also aims to help educate dealerships on appropriate lending policies to prevent discrimination of protected classes when drafting a loan or lease contract.

On the design front, global design chief Ed Welburn says that with GM’s line of vehicles sharing the same technology and functionality with each other, styling will be needed to help differentiate each unit. He goes on to say the automaker has committed a few design sins in the past, favoring functionality over style and charm, as well as decontenting interiors when a product was overbudget. Welburn concludes that the new guard leading GM “really cares about interiors now, and it shows,” such as the interiors in the 2014 Chevrolet Corvette and Cadillac ELR.

Finally, The Detroit News says the 2015 GMC Sierra All Terrain HD will go on sale this summer. The pickup will be available in 2500 and 3500 weight classes with double and crew cab options, with trim lines to include SLE, SLT and Z71. Power is expected to come from a standard 6-liter gasoline engine, with a twin-turbo Duramax diesel on the options list.

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Fiat Chrysler Automobiles’ London Headquarters To Focus On Corporate Finance http://www.thetruthaboutcars.com/2014/05/fiat-chrysler-automobiles-london-headquarters-to-focus-on-corporate-finance/ http://www.thetruthaboutcars.com/2014/05/fiat-chrysler-automobiles-london-headquarters-to-focus-on-corporate-finance/#comments Wed, 21 May 2014 11:00:08 +0000 http://www.thetruthaboutcars.com/?p=827618 Fiat Chrysler Automobiles’ new headquarters in London, England will be as small as many Silicon Valley startups, with a staff of 50 mostly focused on finance. Automotive News Europe reports FCA CEO Sergio Marchionne and Fiat Group chairman John Elkann will have a home in London, with FCA COO Richard Palmer possibly having a place […]

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Fiat 500 in London

Fiat Chrysler Automobiles’ new headquarters in London, England will be as small as many Silicon Valley startups, with a staff of 50 mostly focused on finance.

Automotive News Europe reports FCA CEO Sergio Marchionne and Fiat Group chairman John Elkann will have a home in London, with FCA COO Richard Palmer possibly having a place there as well. Though no new hiring is planned, the automaker hopes to pull more finance employees from its Asia Pacific and Latin American regions to its headquarters, where most of the work will involve treasury operations.

The move to London also means tax savings for FCA; whereas Fiat paid 31.4 percent in corporate taxes to Italy while Chrysler paid 35 percent to the United States, the Italo-American company will pay only 20 percent for its part of filling the Queen’s coffers. This strategy has come under fire from both sides of the Atlantic, with feelings of betrayal on the part of Italians due to history, and on Americans due to tax dollars used to rescue Chrysler in 2009.

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Japanese Automakers Form Alliance To Develop Next-Gen Fuel-Efficient Engines http://www.thetruthaboutcars.com/2014/05/japanese-automakers-form-alliance-to-develop-next-gen-fuel-efficient-engines/ http://www.thetruthaboutcars.com/2014/05/japanese-automakers-form-alliance-to-develop-next-gen-fuel-efficient-engines/#comments Tue, 20 May 2014 12:00:38 +0000 http://www.thetruthaboutcars.com/?p=826666 Japan’s cadre of automakers have formed an alliance to research and develop a new generation of diesel and gasoline internal combustion engines, with the goal of delivering a 30 percent improvement in fuel efficiency by 2020. Automotive News reports the Research Association of Automotive Internal Combustion Engines (AICE) will provide half of the 1 billion […]

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AICE

Japan’s cadre of automakers have formed an alliance to research and develop a new generation of diesel and gasoline internal combustion engines, with the goal of delivering a 30 percent improvement in fuel efficiency by 2020.

Automotive News reports the Research Association of Automotive Internal Combustion Engines (AICE) will provide half of the 1 billion yen ($9.9 million) budget for the research and development of the new engines, with the Japanese government contributing the rest. The group structure follows similar paths outlined by their European competitors, where automakers cooperate with academia and government to bring new and improved technologies to market while cutting costs in R&D.

AICE has outlined a 10-year plan for improving efficiency in the combustion engine, targeting a thermal efficiency rate of 50 percent for both gasoline and diesel engines. Diesel R&D will focus on EGR and particulate filtration systems, while R&D for gasoline aims for more complete combustion cycles and improved ignition with knock reduction.

Honda R&D managing officer Keiji Ohtsu will be the first president of the new R&D body.

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Analysis: Toyota Could Bring $7.2 Billion To Texas Over Next Decade http://www.thetruthaboutcars.com/2014/05/analysis-toyota-could-bring-7-2-billion-to-texas-over-next-decade/ http://www.thetruthaboutcars.com/2014/05/analysis-toyota-could-bring-7-2-billion-to-texas-over-next-decade/#comments Fri, 16 May 2014 10:00:26 +0000 http://www.thetruthaboutcars.com/?p=821306 Toyota’s big move from California to Texas may also bring a big return for Plano, Texas over the next decade, to the tune of $7.2 billion of economic activity. Bloomberg reports an analysis by Chicago-based Grant Thornton LLP claims the $7.2 billion includes $4.2 billion from payroll taxes, as well as direct and indirect payments, […]

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Toyota Texas

Toyota’s big move from California to Texas may also bring a big return for Plano, Texas over the next decade, to the tune of $7.2 billion of economic activity.

Bloomberg reports an analysis by Chicago-based Grant Thornton LLP claims the $7.2 billion includes $4.2 billion from payroll taxes, as well as direct and indirect payments, and revenues from sales and property taxes. The analysis was issued on the same day Plano approved a large incentive deal for Toyota, including $6.75 billion in grants and property tax discounts. The state government also approved an incentive package, totaling $40 million.

The report also notes the move and consolidation of Toyota’s operations in the United States to Plano from California, Kentucky and New York, announced last month, is expected to bring as many as 3,650 full-time employees with an average salary of $104,000 by 2018.

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Walmart Unveils Online One-Stop Auto Insurance Venture http://www.thetruthaboutcars.com/2014/05/walmart-unveils-online-one-stop-auto-insurance-venture/ http://www.thetruthaboutcars.com/2014/05/walmart-unveils-online-one-stop-auto-insurance-venture/#comments Thu, 01 May 2014 12:00:24 +0000 http://www.thetruthaboutcars.com/?p=813473 Walmart is the home of low prices on many, many things, from clothes and groceries, to televisions and tires. The retailer also offers a number of financial services, such as prepaid debit cards and money transfers. And of course, they’re even experimenting with heavy-duty truck design for better fuel economy. As of this week, though, […]

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Walmart Storefront at Night

Walmart is the home of low prices on many, many things, from clothes and groceries, to televisions and tires. The retailer also offers a number of financial services, such as prepaid debit cards and money transfers. And of course, they’re even experimenting with heavy-duty truck design for better fuel economy.

As of this week, though, Walmart shoppers can add one more item to their list: Auto insurance.

Detroit Free Press reports Walmart is partnering with price-comparison and shopping website AutoInsurance.com, the latter born out of talks with parent company Tranzutary Insurance Solutions to provide the former’s customer base with a one-stop solution for comparing and purchasing policies online. The service is just now exiting the pilot phase in Pennsylvania, entering additional markets in Louisiana, Mississippi, Missouri, Oklahoma, Texas, Tennessee and Walmart’s home state of Arkansas this week prior to a full nationwide rollout later this year.

Though Walmart doesn’t operate AutoInsurance.com, the retailer will heavily market its newest financial offering at the front of the store, selected aisles and online through its own website. Plans offered include those from Progressive, Esurance, Travelers and Safeco.

As for the average annual savings Walmart shoppers would gain from buying their auto policies with their new laptops and Monsters High dolls, Pennsylvania shoppers surveyed claimed to have saved $1,100 annually by going through Walmart’s latest financial venture.

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AutoNation Parts Ways With Third-Party Lead Providers, Pursues Own Online Project http://www.thetruthaboutcars.com/2014/04/autonation-part-ways-with-third-party-lead-providers-pursues-own-online-project/ http://www.thetruthaboutcars.com/2014/04/autonation-part-ways-with-third-party-lead-providers-pursues-own-online-project/#comments Mon, 21 Apr 2014 13:00:41 +0000 http://www.thetruthaboutcars.com/?p=806306 In its pursuit of establishing an online store where shoppers can do (almost) everything related to the car-buying experience, AutoNation Inc. announced last week it would no longer use third-party lead providers, focusing instead on its own online plans. Automotive News reports the move is related partly to rising costs, whose savings will be invested […]

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autonation-inc-logo

In its pursuit of establishing an online store where shoppers can do (almost) everything related to the car-buying experience, AutoNation Inc. announced last week it would no longer use third-party lead providers, focusing instead on its own online plans.

Automotive News reports the move is related partly to rising costs, whose savings will be invested toward AutoNation’s online storefront as laid out in the announcement by CEO Mike Jackson:

We’re really looking at the whole spectrum of how we interact with our customers. We’re also going to be looking to broaden the brand attributes of AutoNation and move into different business fields with branded products from AutoNation, whether that’s service contracts, warranty contracts. We’re full of ideas.

The project, launched in 2012, aims to make shopping for a new car at any of its 229 branded dealerships as seamless as possible, from making the purchase at home, to finalizing financing et al the next day. $100 million will be invested into the project over the next several years, with the bare-bones version of AutoNation’s storefront opening for business in December 2014.

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Cadillac Flagship, Redesigned LaCrosse To Be Made In Detroit By 2016 http://www.thetruthaboutcars.com/2014/04/cadillac-flagship-redesigned-lacrosse-to-be-made-in-detroit-by-2016/ http://www.thetruthaboutcars.com/2014/04/cadillac-flagship-redesigned-lacrosse-to-be-made-in-detroit-by-2016/#comments Tue, 15 Apr 2014 11:30:16 +0000 http://www.thetruthaboutcars.com/?p=798938 In light of General Motors’ recent announcement of a $384 million investment in its Detroit-Hamtramck Assembly Plant, two vehicles from Cadillac and Buick could wind up being produced alongside the next-generation Volt. Edmunds reports IHS Automotive senior analyst Stephanie Brinley expects Cadillac’s all-new flagship to be produced in late 2015, with the Buick LaCrosse — […]

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2013 Cadillac Elmiraj Concept

In light of General Motors’ recent announcement of a $384 million investment in its Detroit-Hamtramck Assembly Plant, two vehicles from Cadillac and Buick could wind up being produced alongside the next-generation Volt.

Edmunds reports IHS Automotive senior analyst Stephanie Brinley expects Cadillac’s all-new flagship to be produced in late 2015, with the Buick LaCrosse — currently assembled in Fairfax, Kan. — joining the flagship in 2016 for the latter’s next redesign.

Though GM hasn’t said much about the flagship, industry insiders claim the vehicle will be aimed at the Audi A8, BMW 7 Series, Lexus LS and Mercedes S-Class, and may be priced as much as $100,000.

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Barra Testifies Before US Senate Subcommittee http://www.thetruthaboutcars.com/2014/04/barra-testifies-before-us-senate-subcommittee/ http://www.thetruthaboutcars.com/2014/04/barra-testifies-before-us-senate-subcommittee/#comments Thu, 03 Apr 2014 11:55:13 +0000 http://www.thetruthaboutcars.com/?p=786625 On the second and final day of testimony before Congress, The Detroit Press reports the U.S. Senate Commerce, Science and Transportation subcommittee fired several volleys at General Motors CEO Mary Barra over her lack of answers or greater action during the ongoing GM ignition recall crisis. Finding no allies from either side of the aisle, […]

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U.S. senator accuses GM of 'culture of cover-up'

On the second and final day of testimony before Congress, The Detroit Press reports the U.S. Senate Commerce, Science and Transportation subcommittee fired several volleys at General Motors CEO Mary Barra over her lack of answers or greater action during the ongoing GM ignition recall crisis.

Finding no allies from either side of the aisle, Barra faced tough questions and criticisms from the members of the subcommittee, with the toughest attacks drawn from subcommittee head Senator Claire McCaskill of Missouri. The senator proclaimed former engineer Ray DeGiorgio “repeatedly lied” about knowledge of the April 2006 fix of the out-of-spec ignition switch, citing GM’s “culture of cover-up” as encouragement for egregious violations of the public trust.

Barra’s alleged lack of knowledge of the issues surrounding the switch recall came back to haunt her when Senator Barbara Boxer of California declared the CEO “didn’t know anything about anything,” and wondered why someone with the resume Barra has could not know anything during the 33 years she had been a part of General Motors.

Other highlights from the Senate hearing include:

  • Barra not committing to when GM’s own investigator, Anton Valukas, could be made available for questioning by the Senate, saying the decision was his to make
  • Barra not knowing how many lawsuits have been filed in relation to the out-of-spec switch, nor having been counseled by GM’s general counsel
  • Barra stating no one involved with the recall still under GM’s employ had been fired, would take action if internal investigation determined as such
  • Senator Dean Heller of Nevada wanting supplier Delphi to testify
  • Barra clarifying her comment to the House about sharing information from the internal investigation
  • GM agreeing to share documents provided by the National Highway Traffic Safety Administration with the subcommittee

Moving over to The White House, the Obama administration aims to do all they can to get a handle on the case before them, as Deputy Press Secretary Josh Earnest informed reporters aboard Air Force One during the President’s visit to Ypsilanti, Mich.:

The National Highway Traffic Safety Administration — or NHTSA — has opened a formal investigation to whether GM shared the information they had about this issue as quickly as they should. Secretary Foxx has also asked the inspector general of the Department of Transportation to conduct an audit to provide a single, comprehensive review of NHTSA’s work in this case.

Finally, The Detroit News posits that Barra’s legacy — and that of General Motors — would long be haunted by nine words uttered by an unknown GM engineer in 2005 over fixing the out-of-spec switch: “None of the solutions represents an acceptable business case.”

On the lawsuit front, attorney Dana Taschner — one of the lawyers involved in the 15 lawsuits filed in federal court on behalf of affected Chevrolet Cobalt owners — wants the cases consolidated and sent before U.S. District Judge James Selina in Santa Ana, Calif., according to Bloomberg. Tascher’s reasoning is that Selina, who is presiding over the cases linked to Toyota’s unintentional acceleration debacle, is the right judge for the job of taking GM to task:

The scope of the expanding recall and number of cars and consumers involved will result in a high volume of lawsuits filed in multiple jurisdictions warranting coordinated or consolidated proceeding.

Detroit Free Press reports safety advocate and chairman emeritus of consumer advocacy group Public Citizen Joan Claybrook is calling for reform from both GM and the NHTSA. Regarding the former, Claybrook believes Barra “has more power than any GM executive probably ever had,” and could lead the reform path toward a focus on safety over costs.

As for the latter, Claybrook — who led the agency between 1977 and 1981 — wants the NHTSA to have more resources available to do its duty to the public, change the complaint-filing process for ease-of-use by consumers, and be granted the authority to purse criminal charges against automakers who fail to recall dangerous products.

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Marchionne’s FCA Looks To Sell 6 Million Units http://www.thetruthaboutcars.com/2014/04/marchionnes-fca-looks-to-sell-6-million-units/ http://www.thetruthaboutcars.com/2014/04/marchionnes-fca-looks-to-sell-6-million-units/#comments Wed, 02 Apr 2014 14:00:40 +0000 http://www.thetruthaboutcars.com/?p=786433 Should Sergio Marchionne’s Fiat Chrysler Automobiles be able to deliver on his expectations, the merged automaker will be able to move 6 million units annually, enabling FCA to become a player on the global stage. The Detroit News reports Marchionne met before Fiat’s shareholders in the final meeting at the automaker’s Turin, Italy headquarters before […]

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Should Sergio Marchionne’s Fiat Chrysler Automobiles be able to deliver on his expectations, the merged automaker will be able to move 6 million units annually, enabling FCA to become a player on the global stage.

The Detroit News reports Marchionne met before Fiat’s shareholders in the final meeting at the automaker’s Turin, Italy headquarters before FCA relocates to the Netherlands, stating what he expects out of FCA in the post-merger years to come:

By 2018, Fiat will be able to make more than 6 million cars. I don’t want to give any details of the plan, but we are going in that direction.

For 2014, Marchionne stated FCA aims to sell between 4.5 million and 4.6 million units on the strength of United States and Asia markets, collecting some $128 billion in revenues, and between $828.6 million and $1.1 billion in net profit. The goal of selling 6 million units has been an oft-mentioned one by Marchionne, who believes that the volumes necessary to achieve scale will only increase in the future.

Until then, his current goal is to have Chrysler and Fiat completely merged by the end of 2014, with a multi-year business plan to be presented in Detroit by May. Marchionne believes the new plan can be run “by purely financing on debt.”

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