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. Sat, 29 Aug 2015 15:27:23 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.4 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 » High Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/high-finance/ Sub-prime Borrowers May Get Bounced Out of the Club Next Year http://www.thetruthaboutcars.com/2015/08/subprime-borrowers-may-get-bounced-club-next-year/ http://www.thetruthaboutcars.com/2015/08/subprime-borrowers-may-get-bounced-club-next-year/#comments Thu, 27 Aug 2015 19:00:55 +0000 http://www.thetruthaboutcars.com/?p=1154137 Next year may not be as kind to new car buyers with bad credit. If you’ve been paying attention to the market recently, it’s been an up-and-down ride for the past few days. Market volatility is just one of the indicators that the Federal Reserve may be considering a hike to the federal funds rate (probably […]

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Signing his life and wallet away for the next six or so years with a long-term auto loan agreement

Next year may not be as kind to new car buyers with bad credit.

If you’ve been paying attention to the market recently, it’s been an up-and-down ride for the past few days. Market volatility is just one of the indicators that the Federal Reserve may be considering a hike to the federal funds rate (probably not this year, though), which would impact borrowing rates in a record-setting year for the auto-loan business. 

“It has the potential to impact auto loans, any rate increase certainly can,” said Melinda Zabritski, senior director for Automotive Finance for Experian. “The rate depends on so many other factors in the market … (A rate increase is) at some point, likely. But there’s not a strong chance that it will go up this year.”

Rates for loans have largely stayed the same since 2008, when interest rates were lowered to spur lending after the recession. Many of the low-rates today haven’t changed and automakers such as Subaru have offered interest-free loans on some of their cars.

“If you’re not a high-scoring consumer, the likelihood of obtaining those (good) rates and programs is more of a risk. There’s not a lot of chance of getting them if your score is under 600,” Zabritski said. “The new vehicle market is a very prime market.”

But that may all change by next year.

According to Experian, sub-prime borrowers (with credit scores between 500-600) and deep sub-prime borrowers (with credit scores lower than 500) comprise 34 percent of used car loans. Non-prime borrowers (between 600-700) are roughly 20 percent of that market, with prime and super-prime buyers comprising the rest.

Non-prime buyers may be considered sub-prime depending on market conditions and the lender.

Any rate hike would likely impact lower-tier borrowers, either making the loan unaffordable or by lenders tightening up their availability to reduce risk.

“The lenders are out there now, they have money to lend. If you were someone trying to buy a car in 2009, money was hard to come by. If you’re getting a loan today, certainly you have a lot of financial options,” she said.

Deep sub-prime and sub-prime borrowing were the second and third-fastest growing loan segments behind super-prime borrowers. Interestingly, super-prime borrowers received less money from lending companies than many other categories.

Zabritski said the federal funds rate is dependent on many factors including GDP and market conditions, so it’s hard to predict any swing in the rates.

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Just How Bad Are the Automakers Taking a Beating in the Stock Market? http://www.thetruthaboutcars.com/2015/08/just-bad-automakers-taking-beating-market/ http://www.thetruthaboutcars.com/2015/08/just-bad-automakers-taking-beating-market/#comments Mon, 24 Aug 2015 17:00:47 +0000 http://www.thetruthaboutcars.com/?p=1151441 Markets around the world are down, down, down, down and down. At the time of this writing, the Dow Jones Industrial Average is down roughly 650 points on Monday, which is more than 1,500 points off of where we were at the beginning of August. A lot of the run is fueled by fears that China […]

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Come on Carlos, let’s hit up the Limeys for some money. Picture courtesy of motortrend.com

Markets around the world are down, down, down, down and down.

At the time of this writing, the Dow Jones Industrial Average is down roughly 650 points on Monday, which is more than 1,500 points off of where we were at the beginning of August. A lot of the run is fueled by fears that China is tapering off its growth (or they’ve been making it up for a while) and that Europe is tinkering on the brink of sinking into another recession.

There are plenty of financial sectors that are taking a beating. Automotive companies are no different. Here’s a rundown of publicly traded automakers and how much they’ve lost from their July 31 close to mid-day trading today.

Unsurprisingly, the biggest droppers are those with more exposure to China (Especially Toyota, whose production has been hampered by a blast in Tianjinand Tesla, whose second stock offering could be diluting shares in addition to the larger, global shock.

Tata Motors (TTM) — 29.66-23.01, -22.4 percent
Tesla Motors (TSLA) — 266.15-219.46, -17.5 percent
Toyota Motor Corp (TM) — 133.71-110.87, -17 percent
BMW (BMW.DE) — 91.30-77.88, -13.5 percent
Daimler (DDAIF) — 89.19-77.59, -13 percent
Nissan Motor Company (NSANY) — 19.34-16.90, -12.6 percent
Honda Motor Company (HMC) — 33.96-29.70, -12.5 percent
Ford Motor Company (F) — 15.18-13.21, -12.9 percent
General Motors (GM) — 32.08-28.22, -12 percent
Fiat Chrysler Automobiles (FCAU) — 15.80-14.02, -11.2 percent
Volkswagen AG (VLKAY) — 40.35-36.56, -9.3 percent

Earlier this month, General Motors issued a statement before the massive stock sell off to ensure investors that it would endure a devalued Chinese currency. It’s “natural hedge,” or locally sourced suppliers, would help insulate it from massive market fluctuations, but not entirely. Last month, GM announced it would invest $5 billion in a joint venture with SAIC motors in China to locally build smaller cars.

On Monday, Daimler said it would press on further in China, despite worries that the market for luxury vehicles could be drying up, according to Automotive News.

Losing this much steam in China will undoubtedly have a ripple effect in the rest of the automotive world, that much is clear. The size of the wave has yet to be determined.

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Who’s Ready to Party Like It’s 2008? http://www.thetruthaboutcars.com/2015/08/whos-ready-party-like-2008/ http://www.thetruthaboutcars.com/2015/08/whos-ready-party-like-2008/#comments Fri, 21 Aug 2015 18:00:10 +0000 http://www.thetruthaboutcars.com/?p=1149793 Break out the champagne and 7-liter engines. Have one on us, alright? The Wall Street Journal and Reuters are reporting that despite a mild increase in crude, oil is hovering around $40 a barrel and it’s expected to further dip in coming months to a six-year low on a global glut of oil. The national average […]

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Ford Mustang Receiving Gas Circa April 2015

Break out the champagne and 7-liter engines. Have one on us, alright?

The Wall Street Journal and Reuters are reporting that despite a mild increase in crude, oil is hovering around $40 a barrel and it’s expected to further dip in coming months to a six-year low on a global glut of oil.

The national average for a gallon of gas could drop to as low as $2, Green Car Reports says, which would be the cheapest its been since January, and could approach historical lows from 2008.

Brent crude (light, sweet oil that serves as a trading standard) dropped on worries that a slumping Chinese economy would further slide and European uncertainty about Greek’s flailing economy.

American crude reserves will likely increase in the short-term as refineries prepare for off-season maintenance, which would reduce demand for crude and drive prices down further.

In crude’s corner, worries about hurricane season — and that’s about it — kept the bottom from falling out.

Although stone-cold cheap gas seems like a good deal for drivers, it may not be the best for the economy and energy-sector jobs. This year, the Wall Street Journal excellently reported how super-cheap gas wasn’t exactly great in the 1980s either.

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Tesla’s Second Stock Sale Nets $738M for Automaker http://www.thetruthaboutcars.com/2015/08/teslas-second-stock-sale-nets-738m-automaker/ http://www.thetruthaboutcars.com/2015/08/teslas-second-stock-sale-nets-738m-automaker/#comments Thu, 20 Aug 2015 20:00:10 +0000 http://www.thetruthaboutcars.com/?p=1148929 Tesla’s second stock offering netted the automaker $738 million in cash for its Gigafactory, Model 3 development, and dealer and service upgrades, Bloomberg is reporting. Banks exercised their options to buy more stock than the initial $500 million estimate, with underwriters Morgan Stanley and Goldman Sachs buying more than 2 million of the available 3.1 […]

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Tesla Model S Center Stage

Tesla’s second stock offering netted the automaker $738 million in cash for its Gigafactory, Model 3 development, and dealer and service upgrades, Bloomberg is reporting.

Banks exercised their options to buy more stock than the initial $500 million estimate, with underwriters Morgan Stanley and Goldman Sachs buying more than 2 million of the available 3.1 million shares. Tesla CEO Elon Musk said he would be interested in buying $20 million worth of shares in the offering.

(Before the stock offering, the banking arms of Morgan Stanley and Goldman Sachs loaned Musk a combined $475 million, to which Musk pays market rate and is separate from their investment divisions, according to the offering.)

Shares of Tesla were down more than 3 percent in Thursday trading to $245.

The second offering is aimed at helping the company invest in capital projects that have sapped the company of cash. Its massive battery factory in Nevada, dubbed Gigafactory, and development costs for its lower-priced sedan, the Model 3, have cost the company money, Musk said.

After the company reported substantial losses in the second quarter of 2015, analysts calculated that Tesla lost around $4,000 on each car it sold.

Despite that, a Morgan Stanley analyst said Tesla stock could be massively undervalued, in part, because the company could develop an autonomous ride-sharing business with its electric cars.

Tesla is preparing to ship to dealers its Model X, which is the company’s third vehicle.

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Saab is the Automotive Kiss of Death, Apparently http://www.thetruthaboutcars.com/2015/08/saab-automotive-kiss-death-apparently/ http://www.thetruthaboutcars.com/2015/08/saab-automotive-kiss-death-apparently/#comments Tue, 18 Aug 2015 19:00:13 +0000 http://www.thetruthaboutcars.com/?p=1145401 The resurrected Swedish automaker producing electric 9-3s with a Saab badge signed an agreement with Dongfeng Motor Corporation to help stay afloat, GoAuto in Australia is reporting. National Electric Vehicle Sweden, the Chinese company that purchased the remains of Saab after its parent company Spyker went bankrupt, announced that it would distribute electric cars in China […]

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The resurrected Swedish automaker producing electric 9-3s with a Saab badge signed an agreement with Dongfeng Motor Corporation to help stay afloat, GoAuto in Australia is reporting.

National Electric Vehicle Sweden, the Chinese company that purchased the remains of Saab after its parent company Spyker went bankrupt, announced that it would distribute electric cars in China with automotive giant Dongfeng and add a production facility there, the report details.

In return, NEVS will supply Dongfeng with engineering standards to help it meet safety standards in Europe and North America.

It certainly has been a bumpy road for Saab.

State-owned Dongfeng has a slew of joint ventures with other automakers, including Nissan, Honda and PSA in China.

According to the report, Dongfeng will open a production facility in Tianjin, China to build the Swedish electric cars. Production of the electric 9-3s halted last year when Saab couldn’t pay suppliers.

Dongfeng is apparently unfazed by Saab’s record since the turn of the 21st century.

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Analyst: Tesla Could Surge with Autonomous Ride Sharing Biz http://www.thetruthaboutcars.com/2015/08/analyst-tesla-surge-autonomous-ride-sharing-biz/ http://www.thetruthaboutcars.com/2015/08/analyst-tesla-surge-autonomous-ride-sharing-biz/#comments Tue, 18 Aug 2015 17:00:59 +0000 http://www.thetruthaboutcars.com/?p=1144945 Tesla’s ride-sharing business could be worth hundreds of millions to the company in the future, an analyst for Morgan Stanley said Monday. Adam Jonas increased his price target for Tesla from $280 to $465 — but said the stock could go even higher to $611 — based on his forecast that Tesla could introduce an autonomous ride-sharing […]

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2012 Tesla Model S

Tesla’s ride-sharing business could be worth hundreds of millions to the company in the future, an analyst for Morgan Stanley said Monday.

Adam Jonas increased his price target for Tesla from $280 to $465 — but said the stock could go even higher to $611 — based on his forecast that Tesla could introduce an autonomous ride-sharing service by as early as 2018, Bloomberg reported.

It’s at least the third time that Jonas has publicly pumped Tesla’s stock.

Jonas says that Tesla’s future could be in part-time car ownership or autonomous sharing, which could position the carmaker with the likes of Apple or Google who may be building cars for those purposes.

Jonas dubbed the prospective venture “Tesla Mobility” although the automaker hasn’t publicly shared plans for that kind of service. Jonas said the automaker could make public plans for a ride-sharing program in 12 to 18 months, with a launch shortly after the mid-size Model 3 in 2017. He predicted that Tesla could launch a fully autonomous, ride sharing program in roughly 10 years.

Before people could split payments for robot cars, Jonas says that there would be two phases: a semi-autonomous phase and then a nearly completely autonomous phase before launching a fully driver-less car in 2025.

Jonas asked Tesla CEO Elon Musk about the program earlier this month during an earnings call and Musk was predictably tight-lipped:

Jonas: First question: Steve Jurvetson was recently quoted saying that Uber CEO Travis Kalanick told him that if by 2020 Tesla’s cars are autonomous, that he’d want to buy all of them. Is this a real, I mean, forget the 2020 for a moment, but is this a real business opportunity for Tesla? Supplying cars to ridesharing firms, or does Tesla just cut out the middleman and sell on-demand, electric mobility services directly from the company on its own platform?

Musk: That’s an insightful question.

Jonas: You don’t have to answer it.

Musk: I don’t think I should answer it.

Jonas: Sometimes you can tell more from the non-answer than from the answer.

Shares of Tesla were up 1.5 percent in early trading Tuesday to $259.05.

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Elon Musk’s $500 Million Moonshot, and it’s Not About Cars http://www.thetruthaboutcars.com/2015/08/elon-musks-500-million-moonshot-not-cars/ http://www.thetruthaboutcars.com/2015/08/elon-musks-500-million-moonshot-not-cars/#comments Thu, 13 Aug 2015 16:03:57 +0000 http://www.thetruthaboutcars.com/?p=1141258 Tesla filed Thursday to sell nearly $500 million in shares of its company to raise capital and cover investments the electric carmaker plans to make in the future. According to the filing with the U.S. Securities and Exchange Commission, the proceeds will go toward the company’s planned investments in the Model 3, Supercharger network and […]

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tesladeal

Tesla filed Thursday to sell nearly $500 million in shares of its company to raise capital and cover investments the electric carmaker plans to make in the future.

According to the filing with the U.S. Securities and Exchange Commission, the proceeds will go toward the company’s planned investments in the Model 3, Supercharger network and its Gigafactory battery plant in Nevada.

By the book, the stock sale is a short-term pain for long-term gain. Exposing Tesla further to the market carries certain risk, especially considering Tesla’s price growth and relative upside-down balance sheet, but if historical stock prices are any indication, it’ll be a cash cow. Elon Musk asking to buy $20 million in his own stock has pumped up the prices too beyond any distillation worries.

But don’t be mistaken: the second stock sale isn’t really about the cars.

Tesla’s long-term plans certainly aren’t to sell cars at a $4,000 loss per vehicle. And if you had asked Ford or General Motors 120 years ago if they’d rather be in the consumer vehicle business or the consumer energy business, Exxon and Chevron consistently rank in Forbes most profitable businesses — Ford and GM do not.

A spokesman for Tesla said their only comment on the stock sale is what is included in the prospectus. Specifically outlined in the prospectus is capital expenditures for Tesla including the Model 3, Supercharger network, service, stores — and its Gigafactory. So it’s clear that cars factor into the short-term future for Tesla.

But churning a profit by 2020 may include more than just selling cars at a loss and so far, Tesla has been run like an idea factory and marketing agencynot a car business.

If Musk can convince the world that harvesting and storing your own power is a good idea, would Tesla get out of the car business entirely? Or is this an automotive dream Elon is willing to captain to the bottom of the sea should Tesla cars continue to anchor the company with thousands of dollars in losses per unit for the foreseeable future?

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Automakers Are Taking a Beating Over China http://www.thetruthaboutcars.com/2015/08/automakers-taking-beating-china/ http://www.thetruthaboutcars.com/2015/08/automakers-taking-beating-china/#comments Wed, 12 Aug 2015 16:00:17 +0000 http://www.thetruthaboutcars.com/?p=1139322 Stocks for automakers such as General Motors, Fiat Chrysler Automobiles and Ford took a pounding Tuesday after China devalued its currency in an effort to boost exports from the country, stemming the economic slowdown already underway. In a statement released Tuesday, GM said it had enough of a local supply chain within China to offset its […]

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Stocks for automakers such as General Motors, Fiat Chrysler Automobiles and Ford took a pounding Tuesday after China devalued its currency in an effort to boost exports from the country, stemming the economic slowdown already underway.

In a statement released Tuesday, GM said it had enough of a local supply chain within China to offset its exposure to international currency fluctuations.

“We believe that our exposure is limited and manageable, and do not expect that the devaluation will have a material impact on the company’s financial performance,” the company wrote.

According to the New York Times, China’s currency swing of nearly 2 percent yesterday is historic for the country. Typically the Yuan would fluctuate hundredths of a percent against the dollar. The largest move up until yesterday was 0.16 percent.

Still, the 2 percent dip isn’t considered a big enough swing to warrant a huge reaction. By comparison, the Euro and Yen have fallen 18 and 22 percent against the dollar in the last year, and China’s economy is ranging out of double-digit growth — but still growing.

Nonetheless, automakers with heavy ties to China — notably GM and FCA — took a shot in the pocketbooks yesterday on expectations of what could be around the corner for China.

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Auto Loans Top $1T; Sub-prime Loans Grow 10 Percent Over 2014 http://www.thetruthaboutcars.com/2015/08/auto-loans-top-1t-sub-prime-loans-grow-10-percent-2014/ http://www.thetruthaboutcars.com/2015/08/auto-loans-top-1t-sub-prime-loans-grow-10-percent-2014/#comments Tue, 11 Aug 2015 21:00:59 +0000 http://www.thetruthaboutcars.com/?p=1138674 Credit-reporting agency Equifax says that as of June 2015 more than $1 trillion has been loaned or leased in the United States. The total dollar amount is 10.5 percent higher than last year. The average loan amount is $20,800, which is a 3.65 percent increase over last year, and the average sub-prime loan is $18,200. Sub-prime […]

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GUARANTEED APPROVAL 2

Credit-reporting agency Equifax says that as of June 2015 more than $1 trillion has been loaned or leased in the United States. The total dollar amount is 10.5 percent higher than last year.

The average loan amount is $20,800, which is a 3.65 percent increase over last year, and the average sub-prime loan is $18,200. Sub-prime loans comprised 23.5 percent of newly originated auto loans.

More than 9 million new loans were made up to April 2015, which is a 5.8-percent increase over last year. Overall, more than 73.7 million cars are financed through loans in the U.S.

Now that the average car loan is six years or longer, buyers may be able to afford taking longer, more expensive loans, and rising consumer confidence may spur more people into buying.

“Strong sales numbers in both the new-car and used-car markets, coupled with the availability of quality financing for consumers are a few of the main reasons the industry has reached the one trillion dollar mark,” Dennis Carlson, Deputy Chief Economist at Equinox, said in a statement. “It clearly reflects that the improving economy has provided the impetus for consumers to replace their aging vehicles and begin to satisfy their pent-up auto demand.”

For context, the current student debt burden in the U.S. is around $1.2 trillion, which some have said is an “epidemic,” (although college debt usually doesn’t have any collateral). And if the sub-prime figure raises an alarm, David Ruggles has a fairly cogent argument why that may not be a bad thing.

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Report: Tesla Losing $4,000 on Each Car, and is Burning Cash Faster http://www.thetruthaboutcars.com/2015/08/report-tesla-losing-4000-on-each-car-and-is-burning-cash-faster/ http://www.thetruthaboutcars.com/2015/08/report-tesla-losing-4000-on-each-car-and-is-burning-cash-faster/#comments Sun, 09 Aug 2015 15:00:48 +0000 http://www.thetruthaboutcars.com/?p=1136986 After Tesla Motors announced last week that it had lost $184 million in the second quarter of this year on lower vehicle deliveries and higher spending on its factory ahead of a new model, analysts say the company could have a bumpier road ahead if it can’t raise cash soon. According to a Reuters report, Tesla […]

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After Tesla Motors announced last week that it had lost $184 million in the second quarter of this year on lower vehicle deliveries and higher spending on its factory ahead of a new model, analysts say the company could have a bumpier road ahead if it can’t raise cash soon.

According to a Reuters report, Tesla is losing $4,000 on each car it sells, and the company’s ability to raise capital could be severely hampered by its spending now and its inability to create positive cash flow in a luxury market that is extremely favorable.

“A capital raise, given the way they’re burning cash today, given the fact that they have future investment needs, seems very likely at some point,” UBS Securities analyst Colin Langan told Reuters.

Despite favorable press and an extremely effective marketing plan, Tesla has only one profitable quarter in its history and the automaker doesn’t project a cash-positive year until 2020.

Tesla’s stock tumbled more than 10 percent Thursday after the announcement and closed Friday still down around 10 percent from its one-week high.

The story points out that Tesla has had tough times before. In 2012, Tesla CEO Elon Musk steered the company out of a cash crunch and renegotiated a federal loan and sold shares of the company to raise money ahead of the Model S launch.

Musk faces a similar quandary now, ahead of the Model X launch, but with a challenged budget sheet, significantly higher investments in production and more competition in the market.

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Suzuki May Finally Climb Out From Under VW http://www.thetruthaboutcars.com/2015/08/suzuki-may-finally-climb-vw/ http://www.thetruthaboutcars.com/2015/08/suzuki-may-finally-climb-vw/#comments Tue, 04 Aug 2015 18:00:18 +0000 http://www.thetruthaboutcars.com/?p=1133577 Hedge fund investor Daniel Loeb has purchased a minority stake in Suzuki Motor Corp., which may mean the automaker could have a ruling on its nearly 5-year arbitration with Volkswagen, Bloomberg Business is reporting. The unspecified investment in Suzuki by the billionaire Loeb, who is one of Japan’s wealthy business elite, could be a sign […]

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2003 Suzuki Wagon R

Hedge fund investor Daniel Loeb has purchased a minority stake in Suzuki Motor Corp., which may mean the automaker could have a ruling on its nearly 5-year arbitration with Volkswagen, Bloomberg Business is reporting.

The unspecified investment in Suzuki by the billionaire Loeb, who is one of Japan’s wealthy business elite, could be a sign that a ruling following June’s completion of arbitration is imminent. For years, Suzuki remained “paralyzed” as the procedure slogged on.

Suzuki has a significant automotive presence in emerging markets and India.

Shares of Suzuki jumped in Tokyo trading on the news.

In 2009, when the alliance between Volkswagen and Suzuki was announced, both automakers stood to gain from each other — on paper. Volkswagen would benefit from Suzuki’s growth in emerging markets, including its relationship and distribution in India with Maruti Suzuki. The Japanese automaker could benefit from VW’s vast resources and technology. The relationship soured quickly after.

The remaining issue between VW and Suzuki could be the nearly 20-percent ownership stake the German automaker has in the Japanese automaker. According to Bloomberg, Suzuki may have enough cash on hand to buy back the remaining shares if a London-based arbitration court allows it, according to the Wall Street Journal.

Either way, we could be seeing a lot more of Suzuki — which is still Japan’s fourth-largest automaker, by the way — real soon.

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Canada, Ontario Governments Kick in Millions for Toyota Plant Upgrades http://www.thetruthaboutcars.com/2015/07/canada-kicks-millions-toyota-plant-upgrades/ http://www.thetruthaboutcars.com/2015/07/canada-kicks-millions-toyota-plant-upgrades/#comments Fri, 31 Jul 2015 19:00:12 +0000 http://www.thetruthaboutcars.com/?p=1130465 Federal and provincial governments in Canada have offered more than $100 million (USD $77 million) for improvements to the Cambridge and Woodstock plants, CTV news is reporting. The incentives are part of a $421 million (USD $323 million) investment that will be used for light metal stamping in Woodstock, which makes the RAV4, and plant improvements […]

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2013 Toyota RAV4

Federal and provincial governments in Canada have offered more than $100 million (USD $77 million) for improvements to the Cambridge and Woodstock plants, CTV news is reporting.

The incentives are part of a $421 million (USD $323 million) investment that will be used for light metal stamping in Woodstock, which makes the RAV4, and plant improvements in Cambridge, which produces the soon-to-be-gone Toyota Corolla and Lexus RX vehicles. Toyota has said it will move the Corolla to Mexico, but hasn’t announced what would replace it at the Cambridge plant.

The Canadian government tipped in $34 million in 2013 for improvements to the Cambridge plant to produce the RX 450h.

Toyota’s announcement may be welcome news for Ontario’s car-building complex. Fiat Chrysler Automobiles CEO Sergio Marchionne recently told media in Toronto that building cars in Canada is becoming more expensive, and former Oshawa mayor John Gray calling for a GM boycott if the automaker doesn’t replace the Camaro when production ends in November.

Both Volvo and Land Rover have opted to build plants in Southern U.S. states that could potentially offer more in incentives than Canada’s most populous province, which is heaping more public debt on itself through public infrastructure projects.

The announcement could also signal a better working relationship between the governments and automakers. FCA may be looking for incentives as it prepares to make a $1 billion decision on its Brampton plant, which produces the Dodge Challenger, Charger and Chrysler 300.

Marchionne asked federal and provincial governments in 2014 for incentives to retool the company’s Windsor plant that produces minivans. After a contentious public debate over the size of the financial package requested, FCA decided to go it alone. The future of the Brampton plant, which will also require funding to finance retooling for the next-generation rear-wheel drive sedans, is uncertain.

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Senate Committee Approves Bill to Help Detroit Make Hybrids http://www.thetruthaboutcars.com/2015/07/senate-committee-approves-bill-help-detroit-make-hybrids/ http://www.thetruthaboutcars.com/2015/07/senate-committee-approves-bill-help-detroit-make-hybrids/#comments Thu, 30 Jul 2015 21:00:58 +0000 http://www.thetruthaboutcars.com/?p=1129497 A U.S. Senate committee for transportation passed along a bill Thursday that included provisions to help domestic automakers develop and build cleaner vehicles, the Detroit News is reporting. The proposal, dubbed the Vehicle Innovation Act, was included in a larger clean energy bill taken up by the committee. The Vehicle Innovation Act would set aside […]

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A U.S. Senate committee for transportation passed along a bill Thursday that included provisions to help domestic automakers develop and build cleaner vehicles, the Detroit News is reporting.

The proposal, dubbed the Vehicle Innovation Act, was included in a larger clean energy bill taken up by the committee. The Vehicle Innovation Act would set aside $313.6 million next year for research and development of hybrid technology, battery development and alternative fuels such as natural gas. Funding would increase by 4 percent every year up to 2020.

Nearly all major U.S. automotive lobbies representing manufacturers supported the proposal.

The proposal, which will now head to the Senate, faces an extremely difficult future. The bipartisan bill, which was sponsored by Lamar Alexander (R-Tenn.), and Michigan Democrat Sens. Gary Peters and Debbie Stabenow, may be a long shot in the Republican-controlled House — if it makes it that far.

Separately, a bill that Peters introduced that would allow states to use highway funding to help advance road-to-vehicle communications, passed the Senate as part of a larger transportation package. The bill, called the Vehicle-to-Infrastructure Safety Technology Investment Flexibility Act of 2015 says what it does and does what it says will be part of the Senate’s larger 6-year highway funding package.

Along with the Vehicle Innovation Act, the “smart road” provision and larger funding bill won’t be taken up by the House anytime soon. Congress is working toward a 3-month stopgap measure and will take up the larger spending packages after its August recess.

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Jeep Posts Biggest Ever Quarterly Sales Total in US http://www.thetruthaboutcars.com/2015/07/jeep-posts-biggest-ever-quarter-us/ http://www.thetruthaboutcars.com/2015/07/jeep-posts-biggest-ever-quarter-us/#comments Thu, 30 Jul 2015 18:00:42 +0000 http://www.thetruthaboutcars.com/?p=1129401 Fiat Chrysler Automobiles said strong North American sales and brisk worldwide Jeep sales propelled the company to a $364 million profit in the second quarter of 2015, despite record fines from the federal government. Overall, the company earned a pre-tax profit of $1.4 billion, which is double the $650 million it made in the same quarter […]

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Jeep Wrangler American flag

Fiat Chrysler Automobiles said strong North American sales and brisk worldwide Jeep sales propelled the company to a $364 million profit in the second quarter of 2015, despite record fines from the federal government.

Overall, the company earned a pre-tax profit of $1.4 billion, which is double the $650 million it made in the same quarter last year, the Detroit Free Press reported.

The earnings beat expectations for the company, whose profit margins are still below the other domestic automakers. FCA reports its margin was 7.7 percent in the second quarter, up from 4.9 percent last year, but well behind the double-digit margins of Ford and General Motors.

FCA chief Sergio Marchionne delivered the results in London on Thursday. Wall Street responded at 11:30 a.m. ET by boosting the automaker’s shares by nearly 5 percent.

Executives said the Jeep brand was up 19 percent in the U.S. over the quarter, buoyed by record sales of the Wrangler and other models, which was the brand’s best-ever showing, according to Business Insider.

In Europe, FCA posted a $62 million profit, compared to no profit from the same time a year ago. The global automaker said it expects to ship 4.8 million cars by the end of the year.

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Fiat Chrysler’s Product Pipeline Drier than California for 2016 http://www.thetruthaboutcars.com/2015/07/fiat-chryslers-new-us-cars-far-2016/ http://www.thetruthaboutcars.com/2015/07/fiat-chryslers-new-us-cars-far-2016/#comments Thu, 30 Jul 2015 17:00:21 +0000 http://www.thetruthaboutcars.com/?p=1129321 Fiat Chrysler Automobiles may have only one new model built in North America over the next 18 months after executives pushed back development of others due to brisk sales of current models, Reuters is reporting. The redesigned Chrysler Town and Country minivan may be the only new car built stateside that FCA plans to launch in […]

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2015 Chrysler Town & Country

Fiat Chrysler Automobiles may have only one new model built in North America over the next 18 months after executives pushed back development of others due to brisk sales of current models, Reuters is reporting.

The redesigned Chrysler Town and Country minivan may be the only new car built stateside that FCA plans to launch in the next 18 months, sources told Reuters. The company is planning to bring to the United States three Italian cars — the Fiat Spider, Maserati’s crossover and the Alfa Romeo Giulia — in the same timeframe.

This is the part where we would like to mention that a new Jeep Grand Cherokee and Wrangler are seriously overdue.

The reason for the delay in U.S.-built cars also could be the application of the time-tested Georgia farmer theory: “If it ain’t broke, don’t fix it.”

Wrangler sales are booming this year, Grand Cherokee’s numbers don’t suck either and Jeep is doing pretty well with just the Renegade as its new product this year. According to the story, the Wrangler redesign is now slated for 2017 and the Grand Cherokee overhaul should arrive in 2019.

Earlier this year, FCA CEO Sergio Marchionne said he was hesitant to shut down the Toledo Wrangler factory for retooling when the company needed the plant to produce so many cars.

“If I shut it down for 60 days, I’d lose more money than I’d make in a year,” Marchionne said.

Comparatively, General Motors will launch six new North American vehicles in the next 18 months, according to the report.

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Ford Posts $1.9B Second Quarter Profit, Largest Since 2000 http://www.thetruthaboutcars.com/2015/07/ford-posts-1-9b-second-quarter-profit-largest-since-2000/ http://www.thetruthaboutcars.com/2015/07/ford-posts-1-9b-second-quarter-profit-largest-since-2000/#comments Tue, 28 Jul 2015 17:00:07 +0000 http://www.thetruthaboutcars.com/?p=1126521 Ford announced that it made a $1.9 billion net-adjusted profit in the second quarter of 2015, marking the largest gain for the automaker since 2000, according to Automotive News. The profit represents a 44-percent gain over last year despite dipping global sales and a stronger U.S. dollar hampering exports. Ford said it was selling cars for […]

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2015 Ford F-150

Ford announced that it made a $1.9 billion net-adjusted profit in the second quarter of 2015, marking the largest gain for the automaker since 2000, according to Automotive News.

The profit represents a 44-percent gain over last year despite dipping global sales and a stronger U.S. dollar hampering exports. Ford said it was selling cars for more money and offering fewer incentives, despite recent reports of F-150 incentives topping nearly $11,000 in some places.

Ford said revenues in North America surged 10 percent, which helped the company beat Wall Street’s expectations.

The 10-percent gain in revenue in North America is despite Ford’s slower-than-average sales compared to the overall industry average. Automotive News reported that the automaker achieved a 1.7-percent increase in sales for the second quarter compared to the industry average of 3.3 percent.

A slowdown in production of the F-150 is partially to blame for the sales shortfall. Building the redesigned F-150 at both of Ford’s plants has gone slower than normal, the automaker said, and inventory levels should return to normal in September.

The automaker said it increased its global market share one-tenth of a percent to 7.6 percent. Twelve of its 16 planned global launches have happened already this year, and Ford said the rest were on track. The company said it was still on track for an end-of-year, pre-tax profit of between $8.5 billion and $9.5 billion.

Ford posted a net loss in South American, European, Middle Eastern and African markets, but posted a $33 million gain in the Asia Pacific region, a 20-percent improvement over last year.

Ford Credit posed a $506 million pre-tax profit for the second quarter, a 17-percent gain.

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No, Fiat Chrysler Probably Won’t Go Broke Buying Back Used Cars http://www.thetruthaboutcars.com/2015/07/no-fiat-chrysler-probably-wont-go-broke-buying-back-used-cars/ http://www.thetruthaboutcars.com/2015/07/no-fiat-chrysler-probably-wont-go-broke-buying-back-used-cars/#comments Mon, 27 Jul 2015 22:00:49 +0000 http://www.thetruthaboutcars.com/?p=1126033 After this morning’s announcement that Fiat Chrysler Automobiles would be subject to one of the largest civil penalties for an automaker, reports that the automaker could be on the hook for $2.5 billion in cars aren’t true, the automaker said today. “While such amounts may exceed the $20 million, contrary to certain reports, FCA US does […]

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After this morning’s announcement that Fiat Chrysler Automobiles would be subject to one of the largest civil penalties for an automaker, reports that the automaker could be on the hook for $2.5 billion in cars aren’t true, the automaker said today.

“While such amounts may exceed the $20 million, contrary to certain reports, FCA US does not expect that the net cost of providing these additional alternatives will be material to its financial position, liquidity or results of operations,” the automaker said in a statement.

In other words, expect to find some screaming deals on Ram trucks in the next few months.

The automaker announced on its website that not all customers would participate in the buyback plan and that 60 percent of the affected vehicles had been repaired already. That leaves roughly 200,000 cars that could be eligible for free repairs or to be purchased by FCA.

Those vehicles would be purchased at “a price equal to the original purchase price less a reasonable allowance for depreciation plus ten percent,” according to the automaker.

The manufacturer said under the guidelines of the penalty, it would be allowed to resell the recalled trucks to the public.

The vehicles that may be eligible for repurchase are:

• 2009-2012 Ram 1500s

• 2008-2012 Ram 1500 Mega Cab 4×4, Ram 2500 4×4, 3500 4×4, 4500 4×4, 4500 4×4

• 2009 Chrysler Aspen and Dodge Durango

• 2009-2011 Dodge Dakota

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Car Building in Ontario Could Die, and They Probably Can’t Save It http://www.thetruthaboutcars.com/2015/07/car-building-ontario-die-probably-cant-save/ http://www.thetruthaboutcars.com/2015/07/car-building-ontario-die-probably-cant-save/#comments Mon, 27 Jul 2015 21:00:15 +0000 http://www.thetruthaboutcars.com/?p=1125985 Ontario’s debt is swelling and as home to eight manufacturing plants — the largest complex in North America — automakers may have a tough time keeping plants open in Canada’s most-populous province. According to a story by the Financial Post, Ontario is moving forward with an ambitious plan to revamp roads and mass transit systems despite its debt being downgraded […]

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Chrysler Brampton Assembly Plant

Ontario’s debt is swelling and as home to eight manufacturing plants — the largest complex in North America — automakers may have a tough time keeping plants open in Canada’s most-populous province.

According to a story by the Financial Post, Ontario is moving forward with an ambitious plan to revamp roads and mass transit systems despite its debt being downgraded by Standard & Poor’s bond index. The broad public spending plan also extends to other sectors, despite high unemployment numbers and slumping manufacturing jobs.

Automakers such as Fiat Chrysler Automobiles have called on the provincial government to cut back on public programs and reduce costs on utilities in an effort to keep car building in the province profitable. This year, Chevrolet will shift production of its Camaro to Michigan. On the whole, Oshawa GM production has a dark cloud lingering overhead until the company decides what to do with the facility in 2016.

Ontario’s debt is twice that of California’s with only half the population, the Financial Post reported.

Last month the province reported that 5,200 manufacturing jobs left the region, which prompted local business leaders to sign a petition asking the government to reconsider its proposed pension plan that FCA CEO Sergio Marchionne said this month could hamper growth.

“We’re fully aware of the fact that this proposal on pensions and cap and trade and all this stuff … these are all things that add cost to the running of operations, they don’t come for free,” Marchionne said, according to the Toronto Sun.

Already, automakers such as Volvo and Land Rover have turned down Ontario in favor of operations in the United States and it’s unclear if swelling debt and rising costs of operation will cost the province more jobs in the future.

Other automakers that already have facilities in Ontario are making changes. Honda and Ford are both positioning their plants to manufacture vehicles for export markets. Toyota, on the other hand, will end Corolla production in Ontario in favor of Mexico. The company stated it will “switch from producing Corollas to mid-sized, higher-value vehicles” at their Canadian plant. The replacement product has not yet been announced.

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TrueCar Shares Plunge on Missed Earnings Call http://www.thetruthaboutcars.com/2015/07/truecar-shares-plunge-on-missed-earnings-call/ http://www.thetruthaboutcars.com/2015/07/truecar-shares-plunge-on-missed-earnings-call/#comments Sat, 25 Jul 2015 17:00:47 +0000 http://www.thetruthaboutcars.com/?p=1125137 TrueCar CEO Scott Painter said his company will miss expected earnings for the second quarter, and said the company needed a “wake-up” in his call, Automotive News is reporting. The news sent shares of TrueCar plummeting more than 35 percent. TrueCar closed Friday down 3.81 down to $6.87 per share. Painter said a lack of […]

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TrueCar CEO Scott Painter said his company will miss expected earnings for the second quarter, and said the company needed a “wake-up” in his call, Automotive News is reporting.

The news sent shares of TrueCar plummeting more than 35 percent. TrueCar closed Friday down 3.81 down to $6.87 per share.

Painter said a lack of marketing was to blame for the company’s struggles in the second quarter, not the recent highly publicized split with AutoNation.

Painter said the revised earnings would lower their overall revenue for the year around $20 million to $30 million this year.

In addition to fewer consumers buying fewer cars through TrueCar, the company said spending on its mobile platform and weak marketing. True car said it lost $15 million in the second quarter of this year.

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Fiat Chrysler Files IPO to Spin-off Ferrari http://www.thetruthaboutcars.com/2015/07/fiat-chrysler-files-ipo-spin-off-ferrari/ http://www.thetruthaboutcars.com/2015/07/fiat-chrysler-files-ipo-spin-off-ferrari/#comments Thu, 23 Jul 2015 19:00:47 +0000 http://www.thetruthaboutcars.com/?p=1124177 Fiat Chrysler Automobiles formally filed its initial public offering on Thursday to spin off Ferrari into its own separate company. The filing doesn’t specify price or number of shares to be offered when the shares are publicly available sometime after Oct. 13. Roughly 10 percent of the company will be publicly traded, with the rest of the […]

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Fiat Chrysler Automobiles formally filed its initial public offering on Thursday to spin off Ferrari into its own separate company.

The filing doesn’t specify price or number of shares to be offered when the shares are publicly available sometime after Oct. 13.

Roughly 10 percent of the company will be publicly traded, with the rest of the company remaining under control of existing FCA shareholders and Piero Lardi Ferrari, Enzo Ferrari’s son and current vice chairman.

The IPO documents offers an exhaustive glimpse at the supercar maker’s finances and income. The Maranello-based manufacturer said they made €2.7 billion ($2.96 billion) in revenue in 2014 with profits of €265 million ($295 million). About 70 percent of the company’s revenues came from cars they produced, 11 percent came from engine sales to Maserati and the rest came from sponsorships and commercial revenue.

Sergio Marchionne, who is CEO of FCA, will stay on as chairman of the new company to be based in the Netherlands. The company will keep its Maranello factory and Formula One team based in Italy.

Ferrari’s F1 team and consumer-facing business — aside from cars — figures heavily into the future company’s success. In the IPO, the company mentions that its F1 program and sponsorships would factor into the viability of the future business. The company also mentions that its low-volume production strategy would remain, keeping its cars exclusive to well-heeled buyers.

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Magna Completes $1.9B Acquisition of Transmission-maker Getrag http://www.thetruthaboutcars.com/2015/07/magna-completes-1-9b-acquisition-transmission-maker-getrag/ http://www.thetruthaboutcars.com/2015/07/magna-completes-1-9b-acquisition-transmission-maker-getrag/#comments Fri, 17 Jul 2015 17:05:01 +0000 http://www.thetruthaboutcars.com/?p=1118633 Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting. The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year. “The trend among the […]

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Getrag

Supplier and sometimes-assembler Magna International will buy German transmission-maker Getrag for roughly $1.9 billion, the Detroit News is reporting.

The deal would firmly plant Canadian-based Magna International as the world’s second-largest parts supplier behind Robert Bosch GmbH and ahead of ZF, which recently purchased TRW Automotive for $12.4 billion earlier this year.

“The trend among the suppliers is that we now have to be bigger as the auto makers go to us to do more for them,” Magna Chief Executive Don Walker told the Wall Street Journal on Thursday.

Magna is well-known for their Austrian subsidiary, Manga Steyr, which assembles cars for BMW including X5 and 5-Series, and will produce vehicles for Jaguar Land Rover.

Getrag produces transmissions for Ford, BMW, Renault, Volvo and Daimler. In addition to its significant contracts with those automakers, Getrag has a substantial business footprint in China that Magna needed, according to the Detroit News. In addition to being the largest automotive market in the world, China is the fastest growing market for dual-clutch transmissions, which Getrag produces.

The acquisition is the latest in a flurry of auto-supplier mergers and purchases. It’s the sixth major deal this year for auto parts suppliers.

Getrag produces about 4 million transmissions annually and employs about 13,500 people in Europe, Asia and North America. Magna generated about $36.3 billion in sales last year and employs around 133,000 people in 29 countries.

Walker told the Detroit News that the company would consider more acquisitions in the near future.

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Volvo Buys Polestar, Maybe Won’t Be Unicorn After All http://www.thetruthaboutcars.com/2015/07/volvo-buys-polestar-maybe-wont-unicorn/ http://www.thetruthaboutcars.com/2015/07/volvo-buys-polestar-maybe-wont-unicorn/#comments Tue, 14 Jul 2015 15:00:26 +0000 http://www.thetruthaboutcars.com/?p=1115105 Volvo has purchased Swedish high-performance tuner Polestar, the automaker announced Tuesday. The company will own and operate Polestar as an in-house performance division much like Ford’s SVT division or Subaru’s STI group (anything other than another Mercedes-AMG or BMW M Division reference). You could be forgiven for thinking Volvo owned Polestar already — the Swedish […]

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Volvo has purchased Swedish high-performance tuner Polestar, the automaker announced Tuesday. The company will own and operate Polestar as an in-house performance division much like Ford’s SVT division or Subaru’s STI group (anything other than another Mercedes-AMG or BMW M Division reference).

You could be forgiven for thinking Volvo owned Polestar already — the Swedish automaker already exclusively contracted with the Swedish tuner in 2013 to produce the V60 and S60 Polestar editions and the two have worked together since the 1990s.

Volvo said in the medium-term it would double output of Polestar branded cars — which could mean more than 80 sedans and 40 wagons a year coming to the United States.

Polestar’s racing team, which races in the Scandinavian Touring Car Championship, won’t be included in the deal. This shouldn’t come as a surprise. Volvo Global Marketing Vice-President, Alain Visser, stated last year, “Motorsport does not conform with our brand, where we stand for smaller engines and safety. We are therefore pulling out of STCC, for example, as soon as the contracts permits.”

Christian Dahl, now former-CEO of Polestar, will remain as the team’s principal and the touring car team will be renamed.

“We are extremely satisfied with the way the performance business with Volvo has developed. But we are a racing team first and foremost. This is an opportunity to return our full attention to our core business – to develop and race Volvo cars,” Dahl said in a statement announcing the deal.

Volvo said Polestar would be involved with the automaker’s plug-in hybrid cars in the future.

Financial details of the deal were not disclosed by Volvo.

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Ferrari Filing ‘Days Away’ Says FCA Boss Marchionne http://www.thetruthaboutcars.com/2015/07/ferrari-filing-days-away-says-fiat-chrysler-boss-marchionne/ http://www.thetruthaboutcars.com/2015/07/ferrari-filing-days-away-says-fiat-chrysler-boss-marchionne/#comments Sat, 11 Jul 2015 15:00:42 +0000 http://www.thetruthaboutcars.com/?p=1113401 Speaking to reporters in Toronto on Friday, Fiat Chrysler Automobile chief Sergio Marchionne said the official filing to spin off Ferrari could happen within the next few days. “We are days away from filing the prospectus,” Marchionne said, according to the Detroit News. The future standalone supercar maker will make available 10 percent of the company through […]

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Speaking to reporters in Toronto on Friday, Fiat Chrysler Automobile chief Sergio Marchionne said the official filing to spin off Ferrari could happen within the next few days.

“We are days away from filing the prospectus,” Marchionne said, according to the Detroit News.

The future standalone supercar maker will make available 10 percent of the company through its initial public offering, which is widely expected in October. The remainder of the company will be held by Fiat investors and Enzo Ferrari’s son, Piero Lardi Ferrari, who is vice chairman of the company.

The move to spin off Ferrari is part of a larger plan to reinvest $61 billion back into FCA to fund future development for its range of vehicles.

Last week, Marchionne said Ferrari could be worth about $11 billion, or around 60 percent of FCA’s current market cap value. Analysts predicted the Maranello-based car maker would be worth roughly half Marchionne’s estimate. Despite building around 7,000 cars a year, Ferrari generates considerable profits for parent-company FCA.

Marchionne also denied that FCA would make a hostile bid to takeover General Motors in an effort to consolidate costs and boost profits. Marchionne has been looking for a partner — particularly GM — to offset rising investment costs.

“There are other, less optimal combinations,” he said.

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Ferrari Worth Over $11 Billion, Says FCA Boss Sergio Marchionne http://www.thetruthaboutcars.com/2015/07/ferrari-worth-11-billion-says-fca-boss-sergio-marchionne/ http://www.thetruthaboutcars.com/2015/07/ferrari-worth-11-billion-says-fca-boss-sergio-marchionne/#comments Mon, 06 Jul 2015 16:00:50 +0000 http://www.thetruthaboutcars.com/?p=1108185 Speaking at an unrelated Fiat 500 reveal last week, Fiat-Chrysler chief Sergio Marchionne said Ferrari is worth about $11 billion and he expects the prancing horse’s IPO to garner about $1.1 billion went it goes up for sale in October. “There are clear expectations from ourselves as Ferrari brand is unique,” Marchionne said, according to […]

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Picture courtesy blogs.reuters.com

Speaking at an unrelated Fiat 500 reveal last week, Fiat-Chrysler chief Sergio Marchionne said Ferrari is worth about $11 billion and he expects the prancing horse’s IPO to garner about $1.1 billion went it goes up for sale in October.

“There are clear expectations from ourselves as Ferrari brand is unique,” Marchionne said, according to Bloomberg News. “There is also a scarcity value as we are just selling a 10 percent stake.”

Marchionne’s estimate is roughly double what brokers said the Maranello-based manufacturer could be worth almost a year ago.

The $11 billion valuation before its October IPO may be ambitious, but so is Marchionne’s overall plan for FCA. He announced the move to spin off Ferrari last year as part of a larger plan to invest $61 billion back into FCA. The sale is made up of a 10-percent offer of Ferrari on the NYSE and a redistribution of FCA’s remaining 80-percent share to the Agnelli family, who also own about 30 percent of Fiat. The non-FCA owned 10 percent of Ferrari will stay with Enzo Ferrari’s son, current Ferrari vice chairman Piero Lardi Ferrari.

When it goes to sale in October, the IPO may raise about $1.1 billion for Ferrari. The company has said it won’t build any more than 7,000 cars per year, wouldn’t change its current business model nor would it be likely that anyone could takeover controlling interest.

That doesn’t mean it’s a bad investment. As a company, Ferrari is wildly profitable and will still sell you a $50 T-shirt if you can’t afford a share in October.

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Mahindra-Pininfarina Deal Rejected By Creditors http://www.thetruthaboutcars.com/2015/06/mahindra-pininfarina-deal-rejected-by-creditors/ http://www.thetruthaboutcars.com/2015/06/mahindra-pininfarina-deal-rejected-by-creditors/#comments Tue, 30 Jun 2015 17:00:07 +0000 http://www.thetruthaboutcars.com/?p=1102857 Mahindra’s attempt to buy Italian design firm Pininfarina collapsed over the weekend due to opposition by the latter’s creditors. According to Italian newspaper Il Messaggero, three or four banks holding Pininfarina’s €87 million ($97 million USD) debt rejected a deal by the Indian company to buy the design house with the idea of writing off […]

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Mahindra XUV 500 W6 2013

Mahindra’s attempt to buy Italian design firm Pininfarina collapsed over the weekend due to opposition by the latter’s creditors.

According to Italian newspaper Il Messaggero, three or four banks holding Pininfarina’s €87 million ($97 million USD) debt rejected a deal by the Indian company to buy the design house with the idea of writing off half of said debt, Reuters reports; Mahindra and Pininfarina had worked on SUVs and concepts in the past. Pininfarina will now seek a new debt restructuring agreement.

Had Mahindra’s deal been approved, the company would be the latest to acquire ownership of an Italian company in a series of foreign takeovers, such as ChemChina’s purchase of tire manufacturer Pirelli earlier this year, amid Italy sorting itself and its economy out.

(Photo credit: RL GNZLZ/Flickr/CC BY-SA 2.0)

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