The Truth About Cars » High Finance http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 03 Mar 2015 19:34:09 +0000 en-US hourly 1 http://wordpress.org/?v=4.0.1 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 is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » High Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/high-finance/ Buffett, Soros Boost Stakes In General Motors In Q4 2014 http://www.thetruthaboutcars.com/2015/02/buffett-soros-boost-stakes-general-motors-q4-2014/ http://www.thetruthaboutcars.com/2015/02/buffett-soros-boost-stakes-general-motors-q4-2014/#comments Thu, 19 Feb 2015 14:00:11 +0000 http://www.thetruthaboutcars.com/?p=1004058 While Harry J. Wilson wants General Motors to buy-back $8 billion in shares, Warren Buffett and George Soros have boosted their stakes in the company. The Wall Street Journal reports Buffett’s Berkshire Hathaway increased its stake in GM 1 million shares to a total of 41 million during Q4 2014. Meanwhile, Soros Fund Management added […]

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GM First Day as a Public Company Celebration

While Harry J. Wilson wants General Motors to buy-back $8 billion in shares, Warren Buffett and George Soros have boosted their stakes in the company.

The Wall Street Journal reports Buffett’s Berkshire Hathaway increased its stake in GM 1 million shares to a total of 41 million during Q4 2014. Meanwhile, Soros Fund Management added 728,938 shares in the same period, boosting overall holdings to 4.9 million.

Both purchases were made prior to Wilson’s announcement that he would not only call for the buyback — citing concerns about how the automaker isn’t spending its $25-billion “fortress balance sheet” — but to also push for a seat on its board to help further the cause. Wilson was hired by President Barack Obama to help GM in its bankruptcy proceedings in 2009.

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WSJ To Tesla: Cast Aside Corporate Welfare To Improve Image http://www.thetruthaboutcars.com/2015/02/wsj-tesla-cast-aside-corporate-welfare-improve-image/ http://www.thetruthaboutcars.com/2015/02/wsj-tesla-cast-aside-corporate-welfare-improve-image/#comments Tue, 17 Feb 2015 14:00:51 +0000 http://www.thetruthaboutcars.com/?p=1002850 Despite its visions of having a valuation on par with Apple within a decade, Tesla’s subsistence on subsidies may be hard for some to swallow. The Wall Street Journal said as much in an opinion piece following Tesla CEO Elon Musk’s proclamation to grow his company 50 percent annually, with a stock valuation of $700 […]

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Despite its visions of having a valuation on par with Apple within a decade, Tesla’s subsistence on subsidies may be hard for some to swallow.

The Wall Street Journal said as much in an opinion piece following Tesla CEO Elon Musk’s proclamation to grow his company 50 percent annually, with a stock valuation of $700 billion to come in 10 years’ time; the company is currently valued at $27 billion. The publication points out that its $108 million loss in Q4 2014 — thought to be linked to delivery issues, a strong dollar and manufacturing issues — would have been much worse had it not taken $86 million from selling federal carbon credits that quarter.

Continuing with the train of thought, WSJ noted those credits were the result of Tesla’s lineup falling in line with federal and state fuel-efficiency and ZEV mandates, the surplus of said credits being sold to other automakers whose own lineups may be lacking in the green department. In 2014 alone, Tesla sold $216 million in credits, matching 7 percent of what the company sold in EVs.

Other points noted include the $1.5 billion in tax breaks bestowed upon the automaker in its native California and in Nevada, where its Gigafactory battery-pack production facility, as well as the $7,500 federal tax rebate consumers receive upon purchasing a Model S. The publication concluded by urging Musk to “turn off the taxpayer tap,” on the premise that by so doing, he and his company would gain more friends “for the long haul,” whomever they may be.

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Tesla’s Q4 2014 Sees $108M Loss Despite Strong Demand For S, X http://www.thetruthaboutcars.com/2015/02/teslas-q4-2014-sees-108m-loss-despite-strong-demand-s-x/ http://www.thetruthaboutcars.com/2015/02/teslas-q4-2014-sees-108m-loss-despite-strong-demand-s-x/#comments Thu, 12 Feb 2015 00:05:04 +0000 http://www.thetruthaboutcars.com/?p=997306 Tesla’s Q4 2014 didn’t go so well despite strong demand for its Model S, losing $108 million in earnings over the quarter. The Wall Street Journal reports the automaker has 10,000 booked orders for the premium EV sedan, as well as 20,000 for the Model X crossover now expected to hit the showrooms in Q3 […]

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Tesla’s Q4 2014 didn’t go so well despite strong demand for its Model S, losing $108 million in earnings over the quarter.

The Wall Street Journal reports the automaker has 10,000 booked orders for the premium EV sedan, as well as 20,000 for the Model X crossover now expected to hit the showrooms in Q3 2015. However, the loss is attributed to both a lag between production and fulfillment of the Model S P85D, and a strong dollar.

Sales in Q4 2014 fared better than in Q4 2013, with 9,834 units sold over 6,892. The sales figure also bests Q3 2014’s results, when 7,785 vehicles left the showroom. Overall deliveries for the outgoing fiscal year amounted to 32,733 — short of the 33,000 Tesla hoped to move that year — with 55,000 global sales projected for the upcoming year.

Q4 2014 revenue jumped to $956.6 million over the previous year’s $615 million, while operating expenses almost doubled over the same period, hitting $336.5 million. Capital spending for the upcoming year is expected to hit $1.5 billion, divided between Gigafactory investments, production increases, readying the Model X for production, and sales and service. Cash supply dropped from $2.4 billion in Q3 2014 to $1.9 billion in Q4.

As for the stock price, Tesla shares closed at $212.80 Wednesday, having recovered from CEO Elon Musk’s comments in January about Chinese sales and when his company would become profitable; the stock price then fell to $177.22. That said, it’s still lower than the peak of $291.42 achieved last September.

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Wilson: $8B Stock Buyback Would Boost General Motors’ Value http://www.thetruthaboutcars.com/2015/02/wilson-8b-stock-buyback-boost-general-motors-value/ http://www.thetruthaboutcars.com/2015/02/wilson-8b-stock-buyback-boost-general-motors-value/#comments Wed, 11 Feb 2015 15:00:48 +0000 http://www.thetruthaboutcars.com/?p=996682 The man who helped General Motors restructure in 2009 now wants the automaker to buy back $8 billion in shares to help boost its value. Bloomberg reports Harry J. Wilson is asking to not only for a seat on GM’s board, but for the automaker to also agree to said buyback in June, with execution […]

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Maeva Advisors LLC Founder and CEO Harry Wilson Interview

The man who helped General Motors restructure in 2009 now wants the automaker to buy back $8 billion in shares to help boost its value.

Bloomberg reports Harry J. Wilson is asking to not only for a seat on GM’s board, but for the automaker to also agree to said buyback in June, with execution to take place the following year. The move is meant to provide more value for its shareholders, who are frustrated with the automaker’s reluctance to spend some of the $25 billion it has to withstand another recession if necessary.

Wilson believes the automaker could part with $8 billion and still withstand an economic blow like the one that landed it in bankruptcy court six years prior, and is working with four investment funds that hold a total of 34.4 million shares to help make it so. Wilson was tapped by President Barack Obama to help with GM’s restructuring during said bankruptcy.

That said, GM may still be reluctant to spend that much money. Per Morningstar senior equity analyst David Whiston, the company has to be careful amid a weak industry outside of North America. GM also faces the spectre of a large fine paid to the U.S. Department of Justice due to the former’s handling of the February 2014 ignition switch recall, as well as building up its lending arm GM Financial to boost the automaker’s credit rating.

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Lenders: Subprime Auto Lending Increase Not A New Bubble http://www.thetruthaboutcars.com/2015/02/lenders-subprime-auto-lending-increase-not-new-bubble/ http://www.thetruthaboutcars.com/2015/02/lenders-subprime-auto-lending-increase-not-new-bubble/#comments Wed, 11 Feb 2015 11:00:41 +0000 http://www.thetruthaboutcars.com/?p=996522 Though subprime auto lending is growing, lenders believe a new credit bubble isn’t on the horizon as it was in the runup to the Great Recession. Bloomberg reports 20 percent of all auto-loan originations are in the subprime category, compared to the peak of 30 percent prior to the financial collapse seven years ago. Originations […]

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Subpime Lending MS Powerpoint Style

Though subprime auto lending is growing, lenders believe a new credit bubble isn’t on the horizon as it was in the runup to the Great Recession.

Bloomberg reports 20 percent of all auto-loan originations are in the subprime category, compared to the peak of 30 percent prior to the financial collapse seven years ago. Originations climbed to $97.2 billion in 2014, compared to $86.7 billion in 2013 and $41.3 billion in 2008. Of those, $30 billion to $40 billion subprime loans were packaged into asset-backed securities; $203 billion of those loans are outstanding.

That said, Wells Fargo securities managing director Chris Pink claims those figures aren’t a sign that “the ABS market is driving a resurgence of subprime.” Ford director of long-term funding and securitization Sam Smith adds those securities differ from the ones in the mortgage industry, stating that auto lenders aren’t “originating contracts just so [they] can securitize them.”

The move to temper those concerns comes as the U.S. Justice Department began investigating the market for subprime securities, with a focus on preventing a repeat of the housing bubble that led to the Great Recession.

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Credit Suisse Picks Tesla As One Of Its Favorites For 2015 http://www.thetruthaboutcars.com/2015/02/credit-suisse-picks-tesla-one-favorites-2015/ http://www.thetruthaboutcars.com/2015/02/credit-suisse-picks-tesla-one-favorites-2015/#comments Mon, 09 Feb 2015 13:00:07 +0000 http://www.thetruthaboutcars.com/?p=994858 Looking for new stock to add to your portfolio in 2015? Credit Suisse has one for your consideration: Tesla. Bidness Etc reports the investment firm’s analyst picked the Californian EV automaker as its one of its favorites in the Auto and Auto Parts Industry category. Dan Galves, who led the investment research on Tesla, says […]

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2013 Tesla Model S P85 Fishing boat

Looking for new stock to add to your portfolio in 2015? Credit Suisse has one for your consideration: Tesla.

Bidness Etc reports the investment firm’s analyst picked the Californian EV automaker as its one of its favorites in the Auto and Auto Parts Industry category. Dan Galves, who led the investment research on Tesla, says the automaker’s biggest selling point for the medium term is its Gigafactory and lithium-battery pack technology. He and his fellow analysts believe the main goal of the factory — to reduce production costs — is probable, with parity compared to coventionally powered vehicles to come by 2017.

Credit Suisse also projects the Model X — when it finally does arrive — “will be a potential positive catalyst in the process of slowly shifting the industry toward EVs.” Increased production volume visibility during H2 2015 is also expected to provide a view of the automaker’s EBIT margin potential, with the firm bestowing an Outperform rating and a $325 price target on the stock.

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Tesla Share Price Plummets After Musk’s NAIAS 2015 Visit http://www.thetruthaboutcars.com/2015/01/tesla-share-price-plummets-musks-naias-2015-visit/ http://www.thetruthaboutcars.com/2015/01/tesla-share-price-plummets-musks-naias-2015-visit/#comments Fri, 16 Jan 2015 11:00:44 +0000 http://www.thetruthaboutcars.com/?p=984225 Tesla shareholders felt lighter Wednesday after the automaker’s stock price fell from just over $200/share to $186.09/share after CEO Elon Musk’s announcement at the 2015 Automotive News World Congress in Detroit — held during the 2015 Detroit Auto Show — that his company wouldn’t be profitable until the start of the 2020s. Business Insider adds […]

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Elon Musk

Tesla shareholders felt lighter Wednesday after the automaker’s stock price fell from just over $200/share to $186.09/share after CEO Elon Musk’s announcement at the 2015 Automotive News World Congress in Detroit — held during the 2015 Detroit Auto Show — that his company wouldn’t be profitable until the start of the 2020s.

Business Insider adds that another bombshell dropped at the start of his presentation likely helped to take the wind out of the sails: sales of the automaker’s Model S in China were down in Q4 2014. Musk put the blame on perception among Chinese consumers regarding the charging infrastructure for Tesla’s sole model, explaining that not only had the issue been handled, but that the Supercharger network was expanding; the rate of said expansion, however, is slower than that of Europe or the United States.

Further into the presentation, Musk proclaimed that Tesla would sell “a few million” vehicles by 2025 by going for volume over being a niche luxury player, likely built on the back of the upcoming Model 3. Meanwhile, the Model X due sometime this year is already sold out for the entire year despite the company’s best efforts to manage demand, such as steering would-be X owners into the driver’s seat of the S.

Finally, Musk urged the majors in the audience to continue their investments into electrification, stating that they all need to do more to change the public’s perceptions on EVs and hybrids.

Since the plunge, Tesla shares have recovered some of their lost value, closing $191.87/share Thursday afternoon.

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Honda Investing $340M For Increased Fuel-Efficient Engine Production http://www.thetruthaboutcars.com/2015/01/honda-investing-340m-increased-fuel-efficient-engine-production/ http://www.thetruthaboutcars.com/2015/01/honda-investing-340m-increased-fuel-efficient-engine-production/#comments Thu, 15 Jan 2015 14:00:55 +0000 http://www.thetruthaboutcars.com/?p=983825 Honda announced Tuesday it would invest $340 million into its Anna, Ohio engine plant to help increase production of its family of fuel-efficient engines. Bloomberg reports the automaker added a new assembly line at the plant for production of its new VTEC turbo-four engine family. The engines, which increase efficiency with variable valve technology, are […]

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1995 Acura Integra VTEC engine

Honda announced Tuesday it would invest $340 million into its Anna, Ohio engine plant to help increase production of its family of fuel-efficient engines.

Bloomberg reports the automaker added a new assembly line at the plant for production of its new VTEC turbo-four engine family. The engines, which increase efficiency with variable valve technology, are set to arrive in vehicles later this year.

Other clean-vehicle projects in the works by Honda include the production version of the FCV Concept seen at this year’s Detroit Auto Show for 2016, the Acura NSX hybrid exotic car due later in 2015, and both a PHEV and an EV by 2018.

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US Treasury: Over $9B Lost In Auto Industry Bailout http://www.thetruthaboutcars.com/2014/12/us-treasury-9b-lost-auto-industry-bailout/ http://www.thetruthaboutcars.com/2014/12/us-treasury-9b-lost-auto-industry-bailout/#comments Tue, 30 Dec 2014 15:00:28 +0000 http://www.thetruthaboutcars.com/?p=969969 The final tally is in: American taxpayers lost $9.26 billion from the Bush II/Obama-led rescue of the U.S. auto industry. The Detroit News reports the loss comes out of a total investment by the U.S. Treasury of $79.69 billion used to bail-out General Motors, Chrysler Group, Ally Financial and Chrysler Financial. The department recovered $70.43 […]

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The final tally is in: American taxpayers lost $9.26 billion from the Bush II/Obama-led rescue of the U.S. auto industry.

The Detroit News reports the loss comes out of a total investment by the U.S. Treasury of $79.69 billion used to bail-out General Motors, Chrysler Group, Ally Financial and Chrysler Financial. The department recovered $70.43 billion in profit through share sales, loan repayments, dividends and interest.

The reported final figure comes on the heels of the Treasury’s sale of its last 11.4 percent stake in Ally, the automotive lender and bank-holding company formerly known as GMAC Financial. Accounting rules, however, state the government — and thus, the taxpayers — lost $16.56 billion on the bailout, as interest and dividends paid by those rescued were not applied to the principal owed.

The $9.26 billion lost was much lower than the $44 billion projected early in 2009, as well as the $30 billion predicted later that year. Per the Center for Automotive Research and others who supported the bailout, the loss was much preferable over the total collapse of GM and Chrysler, with the former stripping the industry of 1.2 million U.S. jobs, $17 billion lost in Social Security and income taxes for 2009, and $79.5 billion in personal income tossed into the fireplace.

While the government is now out of the automotive business, it still has a small presence in the finance industry: out of 700 institutions who were accepted into the $700 billion Troubled Asset Relief Program in the early days of the Great Recession, 35 are still in the program today. $426.4 billion was invested overall, with the government recovering $441.7 billion; accounting rules, however, state the Treasury has taken $35 billion in losses.

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Ally Leaves Government Ownership, US Treasury Exits Auto Industry http://www.thetruthaboutcars.com/2014/12/ally-leaves-government-ownership-us-treasury-exits-auto-industry/ http://www.thetruthaboutcars.com/2014/12/ally-leaves-government-ownership-us-treasury-exits-auto-industry/#comments Mon, 22 Dec 2014 11:00:27 +0000 http://www.thetruthaboutcars.com/?p=963794 With its GMAC Financial leather jacket burning in the closet while a supermodel lip-syncs in the tub, Ally Financial is at last free from government ownership. The Detroit News reports the U.S. Treasury sold its remaining 11.4 percent stake in the lender Friday, six years to the day the Bush II administration made the decision […]

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With its GMAC Financial leather jacket burning in the closet while a supermodel lip-syncs in the tub, Ally Financial is at last free from government ownership.

The Detroit News reports the U.S. Treasury sold its remaining 11.4 percent stake in the lender Friday, six years to the day the Bush II administration made the decision to rescue the automotive industry from certain doom; the Treasury held 74 percent to start. The sale — 54.9 million shares at $23.25 per share — brought in $1.3 billion, adding to the $19.6 billion recovered from three separate investments totalling $17.2 billion.

Overall, the bailout recovered the $60 billion invested under the Obama administration, though said administration didn’t include the $10 billion lost in that time, nor the initial $25 billion pumped into the ailing industry in the final days of the Bush II era.

The stake sale also follows a similar action a year earlier, when the department sold its last shares in General Motors. The sale drew a loss of the aforementioned $10 billion from a total investment of $49.5 billion.

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Trucks, SUVs Best Premium Sedans In Over $50K US Segment http://www.thetruthaboutcars.com/2014/12/trucks-suvs-best-premium-sedans-50k-us-segment/ http://www.thetruthaboutcars.com/2014/12/trucks-suvs-best-premium-sedans-50k-us-segment/#comments Mon, 15 Dec 2014 14:00:03 +0000 http://www.thetruthaboutcars.com/?p=961313 Keep those Benzes, BMWs and Audis in the garage, son: $50,000-plus trucks and SUVs are where it’s at for the ballers and players these days. TrueCar says trucks and SUVs account for six of the top 10 best-selling vehicles in the United States market, specifically the segment where transaction prices of $50,000-plus are the norm. […]

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Keep those Benzes, BMWs and Audis in the garage, son: $50,000-plus trucks and SUVs are where it’s at for the ballers and players these days.

TrueCar says trucks and SUVs account for six of the top 10 best-selling vehicles in the United States market, specifically the segment where transaction prices of $50,000-plus are the norm.

The biggest of them all? The Ford F-150, whose projected 2014 volume of 189,776 “will likely surpass total U.S. volume of luxury car benchmarks including BMW’s combined 3, 5 and 7 Series sales or total deliveries for the Audi brand this year.” The Blue Oval will see revenue of $10.8 billion from those high transactions, making up a third of an estimated $33.2 billion for the overall F-Series portfolio.

The demand for looking California and feeling Minnesota is helped in part by a recovering U.S. economy, improved vehicle quality, and a growing supply of cheap gasoline, which is helping the $50,000-plus transaction segment, as well: approximately 8.1 percent of total 2014 sales will transact at that level, up from 6.6 percent in 2013.

Finishing out the podium per TrueCar is Fiat Chrysler Automobiles’ Ram truck lineup, with sales of 76,266 at the $50,000 transaction level, Mercedes taking third with its E-Class at 67,006.

TrueCar 2014 50K USD Transaction Table

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Richardville: Michigan Doesn’t Allow ‘Predatory Lending’ http://www.thetruthaboutcars.com/2014/12/richardville-michigan-doesnt-allow-predatory-lending/ http://www.thetruthaboutcars.com/2014/12/richardville-michigan-doesnt-allow-predatory-lending/#comments Mon, 15 Dec 2014 12:00:40 +0000 http://www.thetruthaboutcars.com/?p=961257 Michigan Senate Majority Leader Randy Richardville of Monroe, the senator behind the bill that would allow auto title loan companies to do an end-run around the state’s title loan ban by posing as pawnbrokers, proclaimed the 276-percent interest loans the title companies would provide consumers weren’t predatory. The Detroit News reports the outgoing senator said […]

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Randy Richardville, King of Financial Slavery in Michigan Since 2014

Michigan Senate Majority Leader Randy Richardville of Monroe, the senator behind the bill that would allow auto title loan companies to do an end-run around the state’s title loan ban by posing as pawnbrokers, proclaimed the 276-percent interest loans the title companies would provide consumers weren’t predatory.

The Detroit News reports the outgoing senator said as much before reporters last week during the state legislature’s lame-duck session, adding that he isn’t trying to “ram the bill” through said session, despite introducing it the day after Election Day, and making sure it could bypass committee on the way to the floor for vote.

Richardville also said bank and credit union representatives were meeting with those in the pawn industry to reach a compromise on the bill, which was news to one of the bill’s opponents, Michigan Pawnbrokers Association president Mark Aubrey:

The Michigan Pawnbrokers Association has not been contacted by any agency for compromise. There is no middle ground here. Title lending has no place in the Pawnbroker Act and no place in the pockets of Michigan’s consumers.

Should the bill — No. 1138 in the Senate, No. 5954 in the House — pass, a loan of $1,000 that adds $360 of interest in 12 months — based on a cap of 3 percent per month — would pull in $2,760 within the same period at an interest rate of 276 percent annually, thanks to a 20 percent so-called “usage fee” charged monthly.

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Aston Martin Plans To Raise Financing For Portfolio Expansion http://www.thetruthaboutcars.com/2014/12/aston-martin-plans-raise-financing-portfolio-expansion/ http://www.thetruthaboutcars.com/2014/12/aston-martin-plans-raise-financing-portfolio-expansion/#comments Mon, 15 Dec 2014 11:00:10 +0000 http://www.thetruthaboutcars.com/?p=961225 Aston Martin is preparing to crowdfund the old-fashioned way — shares and bonds — its portfolio expansion, per sources close to the automaker. Reuters reports the funds will be used to expand the Aston portfolio to include crossovers, hybrids and premium sedans, as well as add three years to the company’s ongoing recovery plan, with […]

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Aston Martin is preparing to crowdfund the old-fashioned way — shares and bonds — its portfolio expansion, per sources close to the automaker.

Reuters reports the funds will be used to expand the Aston portfolio to include crossovers, hybrids and premium sedans, as well as add three years to the company’s ongoing recovery plan, with the planned deadline to come in 2020. The fundraising plan — based on debt- or equity-raising options made to current investors — would bring in £100 million – £150 million ($156 million – $234 million USD).

The news comes as Aston Martin bids farewell to 2014, which began with a recall of 17,590 units over counterfeit accelerator pedals from a Chinese supplier. Last month, the automaker was granted an exemption from United States safety regs for the DB9 and Vantage. It also gained a new CEO this year, when Andy Palmer left Renault-Nissan to take up where Ulrich Bez left off upon retirement in 2013.

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GM Investing $5B To Modernize, Double Mexican Production http://www.thetruthaboutcars.com/2014/12/gm-investing-5b-modernize-double-mexican-production/ http://www.thetruthaboutcars.com/2014/12/gm-investing-5b-modernize-double-mexican-production/#comments Fri, 12 Dec 2014 14:00:04 +0000 http://www.thetruthaboutcars.com/?p=959265 General Motors will invest $5 billion through 2018 into its Mexican facilities to help double production capacity. Reuters reports $1.4 billion of the $5 billion has spent, according to GM Mexico president Ernesto Hernandez, with the rest coming over the remaining three years. The investment will add 5,600 jobs, and help modernize the subsidiary’s facilities […]

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General Motors will invest $5 billion through 2018 into its Mexican facilities to help double production capacity.

Reuters reports $1.4 billion of the $5 billion has spent, according to GM Mexico president Ernesto Hernandez, with the rest coming over the remaining three years. The investment will add 5,600 jobs, and help modernize the subsidiary’s facilities in Coahuila, San Luis Potosi, Mexico State and Guanajuato.

The investment raises the total figure invested into the nation’s booming auto industry in the first two years of Pena Nieto’s presidency, now at $19 billion. Mexico is currently the seventh largest producer in the world, up from eighth place in 2013.

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Ferrari May Follow FCA Out Of Italy For Fiscal Reasons http://www.thetruthaboutcars.com/2014/12/ferrari-may-follow-fca-italy-fiscal-reasons/ http://www.thetruthaboutcars.com/2014/12/ferrari-may-follow-fca-italy-fiscal-reasons/#comments Thu, 11 Dec 2014 14:00:50 +0000 http://www.thetruthaboutcars.com/?p=958433 Just as Fiat Chrysler Automobiles left Italy to escape the tax man, Ferrari is considering the same as it moves closer to leaving the nest by next October. Bloomberg reports the automaker is also considering remaining in Maranello, though a change in its fiscal address wouldn’t affect manufacturing and engineering operations. A final decision either […]

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Just as Fiat Chrysler Automobiles left Italy to escape the tax man, Ferrari is considering the same as it moves closer to leaving the nest by next October.

Bloomberg reports the automaker is also considering remaining in Maranello, though a change in its fiscal address wouldn’t affect manufacturing and engineering operations. A final decision either way could come in the next few months, per the publication’s anonymous sources.

Such a move would prove devastating to Italy beyond the nation’s economy, as Ferrari is considered a national treasure. Milan Bicocca University professor of public finance Ugo Arrigo said the move would show investors and companies alike that the country and its fiscal system as uncompetitive; Italy’s corporate rate is 31.4 percent, whereas the United Kingdom — where FCA calls its fiscal home — has a rate of 21 percent, soon to be 20 percent.

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Trade Group: CFPB Non-Bank Oversight Threshold ‘Too Low’ http://www.thetruthaboutcars.com/2014/12/trade-group-cfpb-non-bank-oversight-threshold-low/ http://www.thetruthaboutcars.com/2014/12/trade-group-cfpb-non-bank-oversight-threshold-low/#comments Thu, 11 Dec 2014 13:00:03 +0000 http://www.thetruthaboutcars.com/?p=958417 A trade group representing lenders is finding the Consumer Financial Protection Bureau’s proposal to regulate non-bank auto lenders too much to bear. According to Automotive News, the American Financial Services Association says “the threshold the CFPB proposes for larger participants in the automobile finance market is too low,” and could disproportionately drive up compliance costs, […]

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CFPB - Consumer Financial Protection Bureau Sign

A trade group representing lenders is finding the Consumer Financial Protection Bureau’s proposal to regulate non-bank auto lenders too much to bear.

According to Automotive News, the American Financial Services Association says “the threshold the CFPB proposes for larger participants in the automobile finance market is too low,” and could disproportionately drive up compliance costs, push out smaller lenders from the auto finance game, and make things more difficult for the consumer as far as credit goes.

The threshold in question defines said participants as those originating 10,000 or more auto loans and leases in a given year, a definition that could fit 38 lenders representing 91 percent of all non-bank institutions. The AFSA suggests a threshold of 50,000 loans and leases in a given year, excluding smaller players while putting the oversight upon 17 lenders, or 86 percent of the non-bank market.

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Michigan Bills Could Open Door To Auto Title Lenders http://www.thetruthaboutcars.com/2014/12/michigan-bills-open-door-auto-title-lenders/ http://www.thetruthaboutcars.com/2014/12/michigan-bills-open-door-auto-title-lenders/#comments Wed, 10 Dec 2014 14:00:09 +0000 http://www.thetruthaboutcars.com/?p=957929 Auto title lenders, whose practices are aligned with those dealing in payday loans, furniture leases, and cheaply made wheel-and-tire rentals, may soon be able to profit off of Michigan consumers should a bill in the state senate be passed. The Detroit News reports a bill sponsored by Senate Majority Leader Randy Richardville of Monroe, Mich. […]

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Dirtbag America Auto Title Lending Store and Krispy Kreme 2012

Auto title lenders, whose practices are aligned with those dealing in payday loans, furniture leases, and cheaply made wheel-and-tire rentals, may soon be able to profit off of Michigan consumers should a bill in the state senate be passed.

The Detroit News reports a bill sponsored by Senate Majority Leader Randy Richardville of Monroe, Mich. — with an identical bill led by Rep. John Walsh of Livonia in the state House — would add a loophole to a century-old pawnbroker law to allow those affected to charge a 20 percent monthly “usage fee” to consumers, instead of the 3 percent charged now.

The state’s pawnbrokers are among those opposed to the bill, stating that such an increase would only lead to more defaults, affecting consumers “in an adverse way,” according to American Jewelry and Loan vice president Seth Gold.

As for who is in favor, two opposing lobbyists have found Georgia-based Select Management Resources to be the primary backer of Michigan Senate Bill No. 1138/House Bill No. 5954.

Should the bill go through, auto title lenders could act as pawnbrokers in Michigan, going around a ban of their usual business model in so doing. Further, a loan of $1,000 would go from accumulating a manageable $360 in interest over 12 months, to an insane $2,760 over the same period.

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Explosive Growth For Long Term Auto Loans In Q3 2014 http://www.thetruthaboutcars.com/2014/12/explosive-growth-long-term-auto-loans-q3-2014/ http://www.thetruthaboutcars.com/2014/12/explosive-growth-long-term-auto-loans-q3-2014/#comments Mon, 08 Dec 2014 22:21:25 +0000 http://www.thetruthaboutcars.com/?p=957042 Red-hot auto sales and increasingly pricey cars are generally seen as a sign of a resurgent economy and a consumer base that is finally prospering after years of stagnant wages and poor prospects. But according to data from Experian, much of the growth may come from practices generally regarded as financially unhealthy. In particular, major […]

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Silverado

Red-hot auto sales and increasingly pricey cars are generally seen as a sign of a resurgent economy and a consumer base that is finally prospering after years of stagnant wages and poor prospects. But according to data from Experian, much of the growth may come from practices generally regarded as financially unhealthy.

In particular, major growth in loans lasting 73-84 months occurred in Q3 of 2014. These long term loans were once unheard of in the United States, but are now seen as a way to lower monthly payments on vehicles that may not be affordable for consumers on a more traditional 36, 48 or 60 month loan.

New vehicle loans lasting between 6 and 7 years grew an astonishing 23.7 percent year over year, with used vehicle loans for the same term growing 18 percent in that same period. The average amount financed was up nearly 4 percent to $27,799 for a new vehicle, and roughly 3.5 percent for pre-owned  vehicles, to $18,656. Leasing, another way for consumers to manage lower payments on a pricier vehicle, grew 7.1 percent year over year, to account for nearly 30 percent of all vehicle financing.

With the average age of vehicles pushing 11 years, many consumers are finally replacing their old car now that the economy appears more stable. While the lower payments may be easier to manage, the downside is that the consumer may very well be underwater on their loan before the vehicle is paid off, and trading it in well only lead to a further debt burden as they must pay off the “negative equity” on their old car, as well as a loan on a new one. But the unprecedentedly long loan terms point to a subset of buyers who are likely stretching themselves beyond what many would consider financially prudent.

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Aluminum Mainstreaming May Mean More Dent & Ding Policies http://www.thetruthaboutcars.com/2014/12/aluminum-mainstreaming-may-mean-dent-ding-policies/ http://www.thetruthaboutcars.com/2014/12/aluminum-mainstreaming-may-mean-dent-ding-policies/#comments Thu, 04 Dec 2014 14:00:30 +0000 http://www.thetruthaboutcars.com/?p=955409 Planning to buy a new 2015 Ford F-150 soon? You might be purchasing a dent-and-ding policy for your ride, too. Automotive News reports the aluminum pickup has created an opportunity for F&I departments to sell dent-and-ding polices, playing on the notion that the metal isn’t as tough as steel when it comes to such things. […]

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Planning to buy a new 2015 Ford F-150 soon? You might be purchasing a dent-and-ding policy for your ride, too.

Automotive News reports the aluminum pickup has created an opportunity for F&I departments to sell dent-and-ding polices, playing on the notion that the metal isn’t as tough as steel when it comes to such things. Ford begs to differ, as the F-150’s “high-strength, military-grade, aluminum-alloy body is more dent and ding resistant” than the outgoing steel-paneled model, per representative Mike Levine.

However, the increased use of aluminum would mean those polices would cost a pretty penny. EFG Cos. executive vice president Cliff Eller says repairing the panels with paintless dent removal would be more labor-intensive and time-consuming than doing the same for steel panels, with the aforementioned increase likely to push the cost of an average claim upward.

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Lyft, Uber Et Al Impact US Medallion Market http://www.thetruthaboutcars.com/2014/12/lyft-uber-et-al-impact-us-medallion-market/ http://www.thetruthaboutcars.com/2014/12/lyft-uber-et-al-impact-us-medallion-market/#comments Thu, 04 Dec 2014 11:00:51 +0000 http://www.thetruthaboutcars.com/?p=955337 Transportation network companies like Lyft and Uber are making an impact on the United States livery market, particularly in cities where medallions are sold. The New York Times reports the price of medallions in cities such as New York, Chicago, Boston and Philadelphia are falling as more people opt to use TNCs to get around, […]

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Transportation network companies like Lyft and Uber are making an impact on the United States livery market, particularly in cities where medallions are sold.

The New York Times reports the price of medallions in cities such as New York, Chicago, Boston and Philadelphia are falling as more people opt to use TNCs to get around, leading drivers to wonder why they should bother purchasing or leasing a medallion at all. In New York, the price for one of the 13,437 medallions available fell 17 percent between the spring of 2013 and October of this year, landing at $872,000. Philadelphia, meanwhile, can’t sell a single medallion for its asking price of $475,000, and aims to try again at $350,000.

Nailing down how things are proves to be difficult, due to the low number of sales/leases, or posting inaccurate numbers by omitting most sales. For New York, it’s the latter; they omit sales that go for $10,000-plus below the previous month’s average. Over in Chicago, weekly lease rates for medallion taxis are falling alongside the number of medallion sales in the Windy City, while others jump-ship to Uber or Lyft.

Drivers in New York also face a challenge from the new green “boro taxis” that serve fares in northern Manhattan and the boroughs surrounding Manhattan, with medallion owners having gone as far as the courtroom to rein in the green taxis, only for the ruling to fall in favor of the defendant.

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Mahindra Buys Majority Stake In NEVS http://www.thetruthaboutcars.com/2014/12/mahindra-buys-majority-stake-nevs/ http://www.thetruthaboutcars.com/2014/12/mahindra-buys-majority-stake-nevs/#comments Tue, 02 Dec 2014 15:00:55 +0000 http://www.thetruthaboutcars.com/?p=954745 Ever wondered what Indian curry and Swedish meatballs tasted like together? You will soon enough, thanks to a new deal between National Electric Vehicle Sweden and Mahindra. SaabsUnited reports Mahindra & Mahindra purchased a majority stake in NEVS in an agreement that keeps Mahindra’s identity secret until the agreement is made final. Though NEVS’ administrator […]

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Ever wondered what Indian curry and Swedish meatballs tasted like together? You will soon enough, thanks to a new deal between National Electric Vehicle Sweden and Mahindra.

SaabsUnited reports Mahindra & Mahindra purchased a majority stake in NEVS in an agreement that keeps Mahindra’s identity secret until the agreement is made final.

Though NEVS’ administrator Lars Eric Gustafsson wouldn’t confirm Mahindra as the party purchasing the stake, he said the deal would finance operating costs — to the tune of €5 million ($6.2 million USD) per month until the agreement is finalized, which is expected to occur February of 2015. Gustafsson added that NEVS was in talks with another Asian manufacturer about the possibility of a joint venture.

Meanwhile, the company is still undergoing reorganization, granted by the Vänersborg District Court in Vänersborg, Sweden late August of this year. NEVS petitioned for an three-month extension Monday.

As for the Saab name, NEVS plans to renegotiate the brand agreement with owner SAAB AB once its finances are more stable. The company lost the name after filing for creditor protection.

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GM Victim Compensation Program Deadline Extended http://www.thetruthaboutcars.com/2014/11/gm-victim-compensation-program-deadline-extended/ http://www.thetruthaboutcars.com/2014/11/gm-victim-compensation-program-deadline-extended/#comments Tue, 18 Nov 2014 13:00:24 +0000 http://www.thetruthaboutcars.com/?p=946618 The victims and families affected by the February 2014 General Motors ignition switch recall can breathe a little easier, as the deadline to file a claim with the victim compensation program administered by attorney Kenneth Feinberg has been extended. Autoblog reports the deadline is now January 31, 2015, per a recommendation to GM by Feinberg. […]

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The victims and families affected by the February 2014 General Motors ignition switch recall can breathe a little easier, as the deadline to file a claim with the victim compensation program administered by attorney Kenneth Feinberg has been extended.

Autoblog reports the deadline is now January 31, 2015, per a recommendation to GM by Feinberg. The move would allow both parties to be able to reach “every eligible person impacted” by the switch at the center of the February 2014 recall.

Since the window for accepting claims opened in August, a total of 2,105 were filed through last Friday, including 217 fatality, 128 severe injury and 1,760 less-severe injury claims. Among them, 72 claims were found eligible for compensation (33 fatality, 5 severe injury, 34 less-severe), while 292 claims (27 fatality, 30 severe injury, 235 less-severe) were under review.

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Report: US Median Income Could Soon Outpace Falling Car Prices http://www.thetruthaboutcars.com/2014/11/report-us-median-income-soon-outpace-falling-car-prices/ http://www.thetruthaboutcars.com/2014/11/report-us-median-income-soon-outpace-falling-car-prices/#comments Mon, 17 Nov 2014 15:00:18 +0000 http://www.thetruthaboutcars.com/?p=946258 Consumers looking for a new car may not need to take their wallets to the hospital afterwards should prices continue to fall and incomes continue to rise. According to Edmunds, the Auto Buyer’s Affordability Index found that a consumer whose income matched the U.S. household median of $54,457 could afford 54.1 percent — $16,448 — […]

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Woman Receiving Car Keys For Her Death Ride 1969 Extravaganza

Consumers looking for a new car may not need to take their wallets to the hospital afterwards should prices continue to fall and incomes continue to rise.

According to Edmunds, the Auto Buyer’s Affordability Index found that a consumer whose income matched the U.S. household median of $54,457 could afford 54.1 percent — $16,448 — of a new vehicle with an average transaction price of $30,382, as recorded in October 2014.

ABAI publisher Requisite Press stated that while the current percentage was still high, “transaction prices have recently begun to weaken under ideal conditions for strength,” such as the rise in income among consumers. There, the ABAI found said income had climbed 3.8 percent above the 52.1 percent value reported in April of this year, corresponding to an extra $653 in spending ability.

The publisher adds that should the center hold, the U.S. median household income would continue to outpace automotive pricing, a status not seen since 1980. President Phil Kelton explains:

New-car affordability is likely to improve in the coming days if we can avoid an income slowdown. The selection of affordable models is best increased by competition, but a sustained improvement in affordability will certainly give it a boost.

As for taking advantage of this burgeoning reality, Requisite Press suggests consumers “maximize their buying power” along every step of the car-buying process, with a suggestion to follow the 20-4-10 rule: 20 percent down, four-year loan term max, 10 percent of income spent on car payments.

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Ferrari To Pay $2.8B For Its Freedom From FCA http://www.thetruthaboutcars.com/2014/11/ferrari-pay-2-8b-freedom-fca/ http://www.thetruthaboutcars.com/2014/11/ferrari-pay-2-8b-freedom-fca/#comments Fri, 14 Nov 2014 14:00:08 +0000 http://www.thetruthaboutcars.com/?p=945081 Set to be its own master within a year’s time, Ferrari must first pay its dues before freedom calls, all to the tune of €2.25 billion ($2.8 billion USD). Automotive News Europe reports the payment will come from a sorting of affairs between the brand and parent company Fiat Chrysler Automobiles, consisting of “distributions and […]

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Set to be its own master within a year’s time, Ferrari must first pay its dues before freedom calls, all to the tune of €2.25 billion ($2.8 billion USD).

Automotive News Europe reports the payment will come from a sorting of affairs between the brand and parent company Fiat Chrysler Automobiles, consisting of “distributions and transfers of cash from Ferrari” among other transactions prior to the October 2015 separation.

CEO and Ferrari chairman Sergio Marchionne says 10 percent of the sports car brand will be made to the public between Q2 and Q3 of 2015, while 80 percent will be given to FCA’s investors; brand vice chairman Piero Ferrari will hold onto the remaining 10 percent.

The spinoff is part of an overall capital raising plan, which includes a $2.5 billion convertible bond set to mature in 2016, and underwritten by JPMorgan Chase, Goldman Sachs, Barclays and UBS. The plan will net FCA approximately €4 billion ($5 billion).

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Takata Issues Newer, Wider Annual Loss Forecast For FY 2014 http://www.thetruthaboutcars.com/2014/11/takata-issues-newer-wider-annual-loss-forecast-fy-2014/ http://www.thetruthaboutcars.com/2014/11/takata-issues-newer-wider-annual-loss-forecast-fy-2014/#comments Fri, 07 Nov 2014 13:00:16 +0000 http://www.thetruthaboutcars.com/?p=942449 The hits keep coming for Takata as its airbag debacle moves forward, this time with announcement that its annual loss forecast will grow wider than previously stated. Automotive News reports the new forecast calls for a loss of ¥25 billion ($218 million USD) during FY 2014, a ¥1 billion ($8.7 million) difference compared to the […]

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A sign board of Japanese auto parts maker Takata Corp's Annual General Meeting is seen on a street near the venue in Tokyo

The hits keep coming for Takata as its airbag debacle moves forward, this time with announcement that its annual loss forecast will grow wider than previously stated.

Automotive News reports the new forecast calls for a loss of ¥25 billion ($218 million USD) during FY 2014, a ¥1 billion ($8.7 million) difference compared to the forecast made in August; both figures are record losses for the automotive supplier.

Additionally, Takata will skip a dividend this year, the first time in eight years it has done so. The company took a ¥45 billion ($390 million) charge in Q1 2014 as a result of the airbag recalls, and has said future charges would be limited.

CFO Yoichiro Nomura apologized before the Tokyo Stock Exchange, saying his company hadn’t meant to worry its customers, automakers and investors who were all affected by its products. Takata shares declined 1.4 percent in trading, falling from ¥1,579 ($13.69) to ¥1,527 ($13.23) by the closing bell Thursday afternoon.

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