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, 04 Jul 2015 15:51:01 +0000 en-US hourly 1 http://wordpress.org/?v=4.2.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars » High Finance http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/high-finance/ 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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Mass Transit In Greece Free This Week Due To Economic Crisis http://www.thetruthaboutcars.com/2015/06/mass-transit-in-greece-free-this-week-due-to-economic-crisis/ http://www.thetruthaboutcars.com/2015/06/mass-transit-in-greece-free-this-week-due-to-economic-crisis/#comments Mon, 29 Jun 2015 17:00:30 +0000 http://www.thetruthaboutcars.com/?p=1102009 Some transit authorities offer free service to encourage ridership. Greece is offering free service this week because no one has money. As a result of Greece’s banks shutting their doors and ATMs for the entire week in order to prevent potential bank runs at the expense of their customers — in turn the result of […]

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Electric Bus In Athens, Greece

Some transit authorities offer free service to encourage ridership. Greece is offering free service this week because no one has money.

As a result of Greece’s banks shutting their doors and ATMs for the entire week in order to prevent potential bank runs at the expense of their customers — in turn the result of the failing bailout of the nation’s economy — transportation minister Christos Spirtzis declared transit service in Athens would be free to all until next week, Business Insider says.

The move would affect only those in the greater Athens metro area, where 40 percent of the nation’s population call home; the next-largest city, Thessaloniki, can’t waive its fares because its system isn’t fully run by the Grecian government. Meanwhile, Greece stands to lose €4 million ($4.44 million USD) as a result of the declaration; typical fares are around €1.20 ($1.33).

(Photo credit: hans-johnson/Flickr/CC BY-ND 2.0)

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Toyota’s Akio Toyoda Banked $2.84M In 2014 http://www.thetruthaboutcars.com/2015/06/toyotas-akio-toyoda-banked-2-84m-in-2014/ http://www.thetruthaboutcars.com/2015/06/toyotas-akio-toyoda-banked-2-84m-in-2014/#comments Wed, 24 Jun 2015 18:00:11 +0000 http://www.thetruthaboutcars.com/?p=1099217 In a regulatory filing made Wednesday, Toyota President Akio Toyoda made ¥352 million ($2.84 million USD) in total 2014 compensation. Toyoda’s 2014 payout is split between his standard ¥103 million ($830,000) salary and a bonus of ¥249 million ($2 million), Reuters reports. The 2014 bonus is nearly double the ¥127 million ($1.02 million) paid in […]

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2013_Toyota_NDM_Akio_Toyoda_002

In a regulatory filing made Wednesday, Toyota President Akio Toyoda made ¥352 million ($2.84 million USD) in total 2014 compensation.

Toyoda’s 2014 payout is split between his standard ¥103 million ($830,000) salary and a bonus of ¥249 million ($2 million), Reuters reports. The 2014 bonus is nearly double the ¥127 million ($1.02 million) paid in 2013.

Though Toyoda’s compensation still bests Honda’s Takanobu Ito’s ¥150 million ($1.21 million) thus far, Renault-Nissan’s Carlos Ghosn dominates the Tohosan Zaibatsu on the Nissan side alone, having banked ¥1.035 billion ($8.39 million) in 2014; Renault added €7.2 million ($8.17 million) for his part of the Tricolore Français.

Toyota’s fortunes rose in 2014, as well. The automaker reported a 19 percent boost in net profit for the year ending this March, pulling in a total of ¥2.17 trillion ($17.5 billion), a new record for the third consecutive year.

(Photo credit: Toyota)

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Renault-Nissan’s Carlos Ghosn Banks $16M In 2014 http://www.thetruthaboutcars.com/2015/06/renault-nissans-carlos-ghosn-banks-16m-in-2014/ http://www.thetruthaboutcars.com/2015/06/renault-nissans-carlos-ghosn-banks-16m-in-2014/#comments Tue, 23 Jun 2015 16:00:52 +0000 http://www.thetruthaboutcars.com/?p=1097801 Renault-Nissan CEO Carlos Ghosn did well for himself in 2014, banking around $16 million in compensation compared to the salaries of other automotive CEOs. Breaking down the numbers, Nissan paid Ghosn ¥1.035 billion ($8.39 million USD) during 2014, Reuters says, up 4 percent from what he made in 2013. On the Renault side, Ghosn took […]

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Carlos Ghosn

Renault-Nissan CEO Carlos Ghosn did well for himself in 2014, banking around $16 million in compensation compared to the salaries of other automotive CEOs.

Breaking down the numbers, Nissan paid Ghosn ¥1.035 billion ($8.39 million USD) during 2014, Reuters says, up 4 percent from what he made in 2013. On the Renault side, Ghosn took home €7.2 million ($8.17 million), bringing total compensation to $16.56 million.

Ghosn’s combined paycheck is in line with compensation paid to two of the Detroit Three’s CEOs, where both Ford CEO Mark Fields and General Motors CEO Mary Barra made $16.8 million and $16.2 million respectively at the end of their first year helming their companies. Meanwhile, FCA CEO Sergio Marchionne’s compensation paints a complex portrait, with figures ranging between $8 million and $72 million depending on the source.

Among the rest of the ToHoSan Zaibatsu, Toyota’s Akio Toyoda made ¥229 million ($1.84 million) in 2014, while Honda’s Takanobu Ito brought home ¥150 million ($1.21 million).

In Germany, the Teutonic Trinity’s CEOs took home €6.57 million ($7.35 million – Audi’s Rupert Stadler), €7.25 million ($8.11 million – BMW’s Norbert Reithofer) and €9.35 ($10.5 million – Mercedes’ Dieter Zetsche).

Finally, under the remaining stripes of the Tricolore Français, PSA Peugeot Citroën CEO Carlos Tavares received €2.75 million ($3.07 million).

(Photo credit: Nissan)

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

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Abarth 500

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

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

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

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

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

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

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Billionaire Investor Kirk Kerkorian Dead At 98 http://www.thetruthaboutcars.com/2015/06/billionaire-investor-kirk-kerkorian-dead-at-98/ http://www.thetruthaboutcars.com/2015/06/billionaire-investor-kirk-kerkorian-dead-at-98/#comments Tue, 16 Jun 2015 19:00:31 +0000 http://www.thetruthaboutcars.com/?p=1093817 Billionaire investor Kirk Kerkorian died Tuesday at the age of 98, leaving behind a legacy which included the automotive industry in his twilight years. Aside from his numerous holdings in Las Vegas casinos — including MGM Resorts International — air charter businesses, and movie studios, Kerkorian held shares among all of the Detroit Three, Bloomberg […]

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1989 Chrysler TC
Billionaire investor Kirk Kerkorian died Tuesday at the age of 98, leaving behind a legacy which included the automotive industry in his twilight years.

Aside from his numerous holdings in Las Vegas casinos — including MGM Resorts International — air charter businesses, and movie studios, Kerkorian held shares among all of the Detroit Three, Bloomberg reports.

Though he once sold one of his businesses to Studebaker — only to buy it back two years later — Kerkorian’s dealings in Detroit began in 1990, when he acquired nearly 10 percent of Chrysler’s stock after being impressed by then-chairman Lee Iacocca. Five years after, he and Iacocca were rebuffed by the automaker and its then-new chairman, Bob Eaton, when the duo sought to buy the remaining 90 percent of the automaker for $22.8 billion; Daimler AG would buy Chrysler three years later.

Though he initially supported the so-called “merger of equals” — his outside analysis helped lead the two companies down the aisle, Automotive News says — he sued DaimlerChrysler for $3 billion in damages in 2000 for misleading him with said merger. Kerkorian would ultimately lose his suit in 2005, his appeal of the federal trial verdict also proving unsuccessful.

Two years later, Kerkorian sought to buy Chrysler once more, offering $4.6 billion to Daimler before being outbid by Cerberus.

Around the same time of the Cerberus bid, he bought nearly 10 percent of General Motors shares, selling them back a year later after his patience ran out with the automaker’s management when he failed to convince then-CEO Rick Wagoner to join forces with Renault-Nissan. He also lost $600 million in 2008 selling his 6.5 percent stake in Ford — citing a lack of confidence the Blue Oval could turn its fortunes around — which he had purchased for over $1 billion in the same year.

[Photo credit: Greg Gjerdingen/Flickr/CC BY 2.0]

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Mexico, Southeastern US Besting Canada, Detroit In Auto Manufacturing http://www.thetruthaboutcars.com/2015/06/mexico-southeastern-us-besting-canada-detroit-in-auto-manufacturing/ http://www.thetruthaboutcars.com/2015/06/mexico-southeastern-us-besting-canada-detroit-in-auto-manufacturing/#comments Tue, 16 Jun 2015 18:00:30 +0000 http://www.thetruthaboutcars.com/?p=1093441 Despite being unified on the trading front, Mexico and the Southeastern United States are besting Canada and Detroit in the automotive industry game. Presently, Mexico’s contribution to overall North American annual production came to 18.8 percent in 2014, Detroit Free Press says, double the percentage of vehicles the country’s burgeoning industry made back in 2004. […]

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National Flag of Mexico

Despite being unified on the trading front, Mexico and the Southeastern United States are besting Canada and Detroit in the automotive industry game.

Presently, Mexico’s contribution to overall North American annual production came to 18.8 percent in 2014, Detroit Free Press says, double the percentage of vehicles the country’s burgeoning industry made back in 2004. Conversely, Canada’s percentage fell from 16.9 percent a decade earlier, to 14.1 percent last year. The U.S. also lost production volume over the years, rebounding to 67.1 percent in 2014 after its seven-year-decline from a peak of 73.6 percent ended in 2011.

While the U.S. still makes the most vehicles per year, more production is heading south of the Mason-Dixon when not crossing the border entirely. DesRosiers Automotive Consultants president Dennis DesRosiers says “over half the capacity and 80 percent to 90 percent of investment dollars are going to the U.S. South or Mexico,” leaving Detroit and the Canadian auto industry out in the cold.

DesRosiers adds Canada’s industry could downsize to five automakers with a single factory each over the next 10 to 20 years, while Mexico could grow volume to an additional 1 million or 2 million units per year, thanks to heavy investments — $7 billion alone in 2014 — from North American and foreign automakers alike.

Meanwhile, IHS Automotive Consulting managing director Michael Robinet expects production volume in the Southeastern U.S. to grow to 5 million units, while volume in the Midwest will remain around 6 million units/year. Said growth is fueled by a combination of lower labor costs compared to Detroit, a nonunionized workforce at the ready, and state and local financial incentives meant to lure transplants to bring jobs to the region.

As for Canada, the nation’s industry has dwindled from 20 assembly plants — all established under the 1965 Auto Pact trade agreement between the U.S. and Canada — to just 10 in 2014 under the North American Free Trade Agreement. As a result, 2.1 million units of volume were lost since 1992, and is expected to jump to 2.6 million when General Motors ends some production at its plants in Oshawa, Ontario next year. More could be lost if FCA decides to move production of its full-size vehicles out of Canada, as well, a move which some believe will decide the ultimate fate of Canada’s industry.

No matter the projections, all three parties to the trade agreement will continue to fluctuate as far as investment is concerned. GM North America president Alan Batey said as much, stating the automaker wants to maintain a “balanced presence” in all three nations to better handle currency fluctuations and shipping costs, a view held among the manufacturers investing their resources into North America’s overall auto industry.

[Photo credit: iivangm/Flickr/CC BY 2.0]

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Straubel: Tesla Model 3 Hitting Showrooms In Sedan, Crossover Variants http://www.thetruthaboutcars.com/2015/06/straubel-tesla-model-3-hitting-showrooms-in-sedan-crossover-variants/ http://www.thetruthaboutcars.com/2015/06/straubel-tesla-model-3-hitting-showrooms-in-sedan-crossover-variants/#comments Tue, 16 Jun 2015 14:00:10 +0000 http://www.thetruthaboutcars.com/?p=1093257 Tesla dropped a bombshell at a conference in Washington Monday, when Chief Technical Officer J.B. Straubel said the Model 3 would be two separate models. Per Straubel, not only would there be a sedan to take home, but a crossover Model 3, as well, Wall Street Journal reports, complimenting the Model S and upcoming X […]

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Tesla Model S Center Stage

Tesla dropped a bombshell at a conference in Washington Monday, when Chief Technical Officer J.B. Straubel said the Model 3 would be two separate models.

Per Straubel, not only would there be a sedan to take home, but a crossover Model 3, as well, Wall Street Journal reports, complimenting the Model S and upcoming X at the entry-level starting price of $35,000. Both models are due in 2017, and will give owners 200 miles to enjoy the silence with every charge. No other details were given at this time.

Meanwhile, Straubel says Tesla is working on new models set to come after the Model 3 — no details were given here, either — and reiterated CEO Elon Musk’s statement of selling 500,000 units annually by 2020, adding there would be 1 million Teslas on the road around the world by then, as well.

The announcement comes on the heels of the automaker receiving a secured revolving credit line of up to $750 million in an agreement with Bank of America, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Wells Fargo. The line of credit is meant to give Tesla some breathing space as it prepares to launch the long-awaited Model X, expected to hit showrooms this fall barring (yet) another delay.

[Photo credit: Tesla/Facebook]

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Survival Of Canadian Auto Industry Hinging On FCA Brampton Reinvestment http://www.thetruthaboutcars.com/2015/06/survival-of-canadian-auto-industry-hinging-on-fca-brampton-reinvestment/ http://www.thetruthaboutcars.com/2015/06/survival-of-canadian-auto-industry-hinging-on-fca-brampton-reinvestment/#comments Mon, 15 Jun 2015 19:00:08 +0000 http://www.thetruthaboutcars.com/?p=1092793 The fate of Canada’s auto industry is linked to whether or not the nation’s leaders can convince FCA to reinvest into its Brampton, Ontario facility. The Brampton Assembly plant is home to three of FCA’s biggest draws, the Chrysler 300, Dodge Charger, and Dodge Challenger. Yet, the high rate of production and quality found there […]

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2015 Chrysler 300S

The fate of Canada’s auto industry is linked to whether or not the nation’s leaders can convince FCA to reinvest into its Brampton, Ontario facility.

The Brampton Assembly plant is home to three of FCA’s biggest draws, the Chrysler 300, Dodge Charger, and Dodge Challenger. Yet, the high rate of production and quality found there clashes against the oldest paint shop the automaker has in North America, an aging line of assembly robots, and the trio themselves looking for a major makeover, Automotive News reports.

There’s also the fact FCA is already investing $2 billion into the Windsor Assembly facility in Windsor, Ontario, where a new generation of minivans are expected to begin production in 2016. The Brampton facility needs $1 billion to modernize, something CEO Sergio Marchionne may be wary of doing.

According to the Windsor Star, Marchionne approached the Canadian and Ontario governments last year with a request for a financial incentive package totalling $700 million to augment the $3.6 billion he planned to put into Windsor and Brampton. He explained his reasoning before reporters during the 2015 Detroit Auto Show:

This commitment that we’re making is a multibillion dollar commitment. We have to resolve the issue about the competitiveness of this investment in Windsor. So, I have to make sure the environment and the conditions that support the investment are adequate to ensure a proper return on our capital. That means labour costs, that means everything.

Months later, Marchionne backed down from moving forward with the proposal, choosing to invest in Windsor on his own while Brampton remains left out in the cold.

Unfortunately for those holding onto hope Brampton will remain, the business case may not be there to continue. Despite exchange rates between Canada and the United States providing a level playing field regarding unionized labor costs for now, nonunion factories in the Southeastern U.S. and Mexico offer both competitive incentive packages and labor-cost advantages.

Finally, Marchionne’s preference toward running factories flat-out through three shifts may prompt a reallocation of production if another model couldn’t be added to Brampton’s schedule. Thus, FCA could send the three full-sizers to either Toluca or Saltillo, Mexico, with the latter more likely than the former as a result of supplying engines like the 3.6-liter Pentastar V6 and 6.4-liter HEMI V8 to Brampton.

The only issues with either location amount to retooling Toluca and sending Fiat 500 production elsewhere — the Dodge Journey will move to Windsor to join the new-gen minivans next year — or adding a new line to assemble the cars in Saltillo.

[Photo credit: Chrysler]

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Attractive Leases Mean Lower Mileage Caps In Exchange For Low Payments http://www.thetruthaboutcars.com/2015/06/attractive-leases-mean-lower-mileage-caps-in-exchange-for-low-payments/ http://www.thetruthaboutcars.com/2015/06/attractive-leases-mean-lower-mileage-caps-in-exchange-for-low-payments/#comments Thu, 11 Jun 2015 19:00:52 +0000 http://www.thetruthaboutcars.com/?p=1090729 Leases are red-hot these days, but those signing up for temporary ownership of their rides will be facing lower mileage caps in exchange for low payments. According to Experian Automotive, 31 percent of all U.S. new-car sales during Q1 2015 were leases, CarsDirect writes, with monthly payments entering the sub-$150 range for small cars after […]

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Sunset Chevrolet Circa June 2014

Leases are red-hot these days, but those signing up for temporary ownership of their rides will be facing lower mileage caps in exchange for low payments.

According to Experian Automotive, 31 percent of all U.S. new-car sales during Q1 2015 were leases, CarsDirect writes, with monthly payments entering the sub-$150 range for small cars after paying $1,999 at signing, $199/mo. for midsize models upon cutting a check for the same amount at the dealership.

However, those deals are coming with a price: in order to keep residual values healthy, annual mileage caps are being trimmed.

The publication looked over the mileage caps of 300 leases, finding the average cap figure came to 10,900 miles per year; Edmunds adds caps have fallen below 11,000 miles/year for the first time ever in Q1 2015. One lease advertised by General Motors dropped the cap from 12,000 miles/year in 2014, to 10,000 miles this year, with the now-extra 2,000 miles amounting to $1,500 for a three-year agreement plus an overage fee of 25 cents/mile.

CarsDirect says concerns over caps aren’t a new thing, akin to data caps on smartphone plans, but adds consumers should keep the new lower caps in mind, lest they end up spending more money than originally thought.

[Photo credit: Sunset Chevrolet/Facebook]

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Kitsap Transit Eyeing Liquor Advertising To Improve Bottom Line http://www.thetruthaboutcars.com/2015/05/kitsap-transit-eyeing-liquor-advertising-to-improve-bottom-line/ http://www.thetruthaboutcars.com/2015/05/kitsap-transit-eyeing-liquor-advertising-to-improve-bottom-line/#comments Tue, 19 May 2015 20:00:22 +0000 http://www.thetruthaboutcars.com/?p=1070978 Faced with a potential budget shortfall in the coming years, Kitsap Co., Wash.-based Kitsap Transit is eyeing liquor adverts to help with the bottom line. The move to place said adverts on its fleet came as a suggestion from the authority’s advertising partner, Titan Outdoor, KOMO-TV reports. The ad agency takes half of all revenue […]

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Kitsap_Transit_2004_Gillig_Low_Floor_774-a

Faced with a potential budget shortfall in the coming years, Kitsap Co., Wash.-based Kitsap Transit is eyeing liquor adverts to help with the bottom line.

The move to place said adverts on its fleet came as a suggestion from the authority’s advertising partner, Titan Outdoor, KOMO-TV reports. The ad agency takes half of all revenue made on ad sales related to Kitsap Transit, and is also in charge of the authority’s mobile ad program.

Executive Director John Clauson admits it would be hard to estimate how much additional revenue adding liquor advertising to the buses — adverts are only part of its budget, alongside local taxes and fare collection — but adds if doing so “adds an extra $20,000 a year, it’s tough to just walk away from it and say no.”

While the proposal would mandate “tasteful” advertising of liquor products and include responsible-drinking disclaimers, critics warn said adverts could encourage teenagers to drink. However, most riders are welcome to the idea, with reasons ranging from keeping fares low as a result of the increase in revenue, to freedom of speech for all advertisers.

The decision to go forward with the proposal may come as soon as the authority’s next board meeting June 2. If approved, Kitsap Transit would be the first transit authority in Washington state to allow liquor advertising on its fleet.

[Photo credit: Zargoman/Wikimedia Commons/CC BY-SA 3.0]

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Takata Close To Installment Agreement With Automakers Over Airbag Recalls http://www.thetruthaboutcars.com/2015/05/takata-close-to-installment-agreement-with-automakers-over-airbag-recalls/ http://www.thetruthaboutcars.com/2015/05/takata-close-to-installment-agreement-with-automakers-over-airbag-recalls/#comments Thu, 14 May 2015 19:00:43 +0000 http://www.thetruthaboutcars.com/?p=1068634 Like consumers making payments over several months for their purchases, Takata is asking automakers to pay its part of the airbag recall in installments. The automakers are reportedly close to sealing the deal that would grant the beleaguered supplier the ability to spread its financial responsibility for the recalls instead of paying everything all at […]

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Takata TTAC Style

Like consumers making payments over several months for their purchases, Takata is asking automakers to pay its part of the airbag recall in installments.

The automakers are reportedly close to sealing the deal that would grant the beleaguered supplier the ability to spread its financial responsibility for the recalls instead of paying everything all at once, Bloomberg reports.

Takata is also meeting with its bankers to ensure it has the cash flow needed to make good on those payments, with an anonymous source stating the supplier hasn’t created the conditions that would merit a call-back of its loans by the banks during FY 2014.

The deal follows an ongoing recall action of Takata’s airbags, affecting over 28 million vehicles from 10 different automakers around the globe, with Honda bearing the brunt of the crisis as the supplier’s biggest customer.

[Photo credit: Takata]

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General Motors Investing $1B Into Warren Tech Center, Adding 2,600 Jobs http://www.thetruthaboutcars.com/2015/05/general-motors-investing-1b-into-warren-tech-center-adding-2600-jobs/ http://www.thetruthaboutcars.com/2015/05/general-motors-investing-1b-into-warren-tech-center-adding-2600-jobs/#comments Thu, 14 May 2015 18:00:15 +0000 http://www.thetruthaboutcars.com/?p=1068602 General Motors announced Thursday it will invest $1 billion into its Warren Tech Center in Warren, Mich., adding 2,600 jobs through 2018. The investment will see renovations, expansions and new additions to the tech center, with work set to start this month, The Detroit News reports. Included in the investment are new design studios, an […]

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Renaissance Center Circa May 2009

General Motors announced Thursday it will invest $1 billion into its Warren Tech Center in Warren, Mich., adding 2,600 jobs through 2018.

The investment will see renovations, expansions and new additions to the tech center, with work set to start this month, The Detroit News reports.

Included in the investment are new design studios, an IT building, additional parking and testing facilities, and revamped R&D buildings, as well as “extensive office upgrades” and other interior remodeling through most of the buildings at the center.

The 2,600 new jobs coming into the campus are expected to be salaried positions in engineering, IT and design, though GM didn’t state whether any of the jobs were transfers from other locations, as well as when those jobs would begin appearing.

The announcement follows one made last month involving a $139.5-million investment into the Tech Center’s Pre-Production Operations facility, a part of GM’s overall $5.4-billion investment plan to modernize its plants through 2017.

[Photo credit: Robert Emperley/Flickr/CC BY-SA 2.0]

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Oil Bull Market Rally Could Soon Falter Without China http://www.thetruthaboutcars.com/2015/05/oil-bull-market-rally-could-soon-falter-without-china/ http://www.thetruthaboutcars.com/2015/05/oil-bull-market-rally-could-soon-falter-without-china/#comments Wed, 13 May 2015 19:00:09 +0000 http://www.thetruthaboutcars.com/?p=1067698 Those hoping to make it big on oil commodities would do well to bet against the bulls on parade, as China won’t be around to keep prices afloat this time. During the early days of the Great Recession, oil prices quickly regained footing thanks to China’s then-booming economic standing, Bloomberg reports. However, fuel use in […]

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PetroChina-Station

Those hoping to make it big on oil commodities would do well to bet against the bulls on parade, as China won’t be around to keep prices afloat this time.

During the early days of the Great Recession, oil prices quickly regained footing thanks to China’s then-booming economic standing, Bloomberg reports. However, fuel use in the nation has slowed by half of what it was in the previous decade, following global trends of decreased consumption.

Global demand is expected to grow 1.3 million barrels/day to 94.58 million in 2016 according to the Energy Information Administration, with China taking 11.34 million barrels/day; the U.S. will use 19.44 million/day, lower than what was used in 2008. The figure is an increase of 3.1 percent over this year, yet pales when compared to the 11-percent jump in 2010. The spike delivered a boost to oil prices of 15 percent.

Combined with rising oil production pushing toward a glut in supply — to the tune of 1.8 million barrels/day in inventory currently, and 900,000/day during H2 2015 — China’s economic power faltering despite the government’s best efforts, and technological advancements reducing overall oil consumption, the global demand for oil will remain low for some time to come.

[Photo credit: Otebig/Wikimedia Commons/CC PD 1.0]

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General Motors Set To Announce Major Investment For Warren Tech Center http://www.thetruthaboutcars.com/2015/05/general-motors-set-to-announce-major-investment-for-warren-tech-center/ http://www.thetruthaboutcars.com/2015/05/general-motors-set-to-announce-major-investment-for-warren-tech-center/#comments Wed, 13 May 2015 16:00:23 +0000 http://www.thetruthaboutcars.com/?p=1067370 General Motors is expected to announce Thursday its plans for the Warren Tech Center, including its proposed $1-billion investment into the facility. Both Warren, Mich. city officials and inside sources have stated GM could invest up to $1 billion throughout the entire campus, The Detroit News reports. The proposed investment would follow the $139.5-million investment […]

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GMTechCenter

General Motors is expected to announce Thursday its plans for the Warren Tech Center, including its proposed $1-billion investment into the facility.

Both Warren, Mich. city officials and inside sources have stated GM could invest up to $1 billion throughout the entire campus, The Detroit News reports. The proposed investment would follow the $139.5-million investment made to the Tech Center last month for a new body shop and improvements to the stamping plant at the facility’s Pre-Production Operations wing, part of the automaker’s overall $5.4-billion investment plan for its plants in the United States.

According to GM’s tax abatement application to the Warren City Council, the automaker is considering putting $419.4 million into expansion and renovation of the Tech Center, including $180 million for the design studio, a total of $117.7 million for a yet-to-be-determined building and unidentified parking, and $20 million for renovation and expansion of the center’s Advanced Engineering Center lab. The overall project would retain 3,800 employees and add 2,600 more in engineering, IT, R&D and other categories over the years.

Though details surrounding the announcement are scant, representatives have stated the 50-percent tax abatement approval — meant to save GM $97 million in property taxes over the next decade and beyond — was key to getting the project off the ground.

[Photo credit: Local hero/Wikimedia Commons/CC BY-SA 3.0]

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Riviera Tool’s Old Penny Stock Erupts After Tesla Purchase Announcement http://www.thetruthaboutcars.com/2015/05/riviera-tools-old-penny-stock-erupts-tesla-purchase-announcement/ http://www.thetruthaboutcars.com/2015/05/riviera-tools-old-penny-stock-erupts-tesla-purchase-announcement/#comments Fri, 08 May 2015 18:00:47 +0000 http://www.thetruthaboutcars.com/?p=1064322 Tesla’s announcement Thursday of its purchase of Riviera Tool LLC sent shares of the supplier’s old penny stock soaring, but it may have been for nothing. In over-the-counter “pink-sheet” trading, the penny stock for Riviera Tool Co. — the former name of the Grand Rapids, Mich.-based supplier — jumped 10,000 percent from less than a […]

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Perepetual Penny Calendar

Tesla’s announcement Thursday of its purchase of Riviera Tool LLC sent shares of the supplier’s old penny stock soaring, but it may have been for nothing.

In over-the-counter “pink-sheet” trading, the penny stock for Riviera Tool Co. — the former name of the Grand Rapids, Mich.-based supplier — jumped 10,000 percent from less than a penny to a peak of 60 cents a share, Detroit Free Press reports. The old stock would later close at 22 cents, an increase of 4,400 percent when compared to its worth hours earlier. The OTC trading saw 16 million shares exchange hands after a lull in activity lasting over a month.

However, the shares may not hold much value at all. In 2007, an investment into the supplier by Laurus Master Fund, Ltd. took Riviera Tool off the American Stock Exchange trading floor, though a number of public shares landed in the pink sheet market, where traders buy and sell low-value stocks. Riviera became an LLC once taken off the market, rendering the old shares as little more than keepsakes.

Riviera Tool is responsible for producing stamping parts for Tesla, and will be renamed Tesla Tool & Die by its new owner.

[Photo credit: Windell Oskay/Flickr/CC BY 2.0]

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Fitch: Marginal Losses Projected For Subprime Auto Loans In 2015 http://www.thetruthaboutcars.com/2015/05/fitch-marginal-losses-projected-subprime-auto-loans-2015/ http://www.thetruthaboutcars.com/2015/05/fitch-marginal-losses-projected-subprime-auto-loans-2015/#comments Wed, 06 May 2015 20:00:22 +0000 http://www.thetruthaboutcars.com/?p=1063010 Despite the risks subprime auto loans carry, the market is likely to experience only marginal losses through 2015 according to a recent analyst forecast. Analysts at Fitch Ratings found in Q1 2015 subprime delinquencies of 60 days and above ticked up 3.56 percent, compared to 2.8 percent in 2014, Automotive News reports. Net losses on […]

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Buy Here Pay Here Subprime Financing Extravaganza Circa September 2014

Despite the risks subprime auto loans carry, the market is likely to experience only marginal losses through 2015 according to a recent analyst forecast.

Analysts at Fitch Ratings found in Q1 2015 subprime delinquencies of 60 days and above ticked up 3.56 percent, compared to 2.8 percent in 2014, Automotive News reports. Net losses on an annualized basis also went up in the quarter, from 4.96 percent last year, to 6.58 percent now.

Though those increases have given cause for alarm among analysts and the federal government alike, as well as the ever-increasing volume for subprime loans, Fitch claims the loans are performing as they should. However, the rating agency expects the performance to deteriorate over the course of the year, citing factors including easier lending approvals and lower wholesale prices as potential problems.

[Photo credit: Daniel Oines/Flickr/CC BY 2.0]

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Luxury Brands Doing Well On The Back Of Lower-End Models http://www.thetruthaboutcars.com/2015/05/luxury-brands-well-back-lower-end-models/ http://www.thetruthaboutcars.com/2015/05/luxury-brands-well-back-lower-end-models/#comments Mon, 04 May 2015 19:00:17 +0000 http://www.thetruthaboutcars.com/?p=1061074 Want to know why Mercedes, Audi, Lexus and all of the other luxury players are doing so well these days? Because of less-costly, lower-end luxury models. The low-end models, whose starting base prices are between $31,000 and $35,000, are pulling in new customers who desire the status a given badge conveys, USA Today reports. Edmunds.com […]

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2014-CLA-CLASS-COUPE-GALLERY-023-WR-D

Want to know why Mercedes, Audi, Lexus and all of the other luxury players are doing so well these days? Because of less-costly, lower-end luxury models.

The low-end models, whose starting base prices are between $31,000 and $35,000, are pulling in new customers who desire the status a given badge conveys, USA Today reports. Edmunds.com senior analyst Jessica Caldwell explains:

Luxury sales have increased as products have become affordable to a wider audience. Of late, luxury car brands have focused on the lower end of the price spectrum, introducing models such as the Lexus NX, Mercedes-Benz GLA, BMW X1 and Porsche Macan, which are slotted below existing popular SUVs on the price spectrum.

Caldwell adds leasing is also helping bolster the luxury brands’ high status, as most of their offerings are leased. Those who’d rather own their low-end luxury ride opt for long-term financing with low interest rates, with payments spread out over several years.

The brands’ consumer base is also varied. Kelley Blue Book analyst Akshay Anand said buyers were coming from every corner, “especially as Millennials start to create more wealth for themselves and continue to be as aspirational as ever,” helped by an improving economy.

[Photo credit: Mercedes-Benz]

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GM Gives Away 2016 Chevrolet Malibu, Invests $174 Million In Kansas http://www.thetruthaboutcars.com/2015/05/gm-gives-away-2016-chevrolet-malibu-invests-174-million-kansas/ http://www.thetruthaboutcars.com/2015/05/gm-gives-away-2016-chevrolet-malibu-invests-174-million-kansas/#comments Mon, 04 May 2015 18:00:32 +0000 http://www.thetruthaboutcars.com/?p=1060954 In celebration of a key milestone, General Motors CEO Mary Barra gave away a 2016 Chevrolet Malibu Monday, a feat that could never happen with the old Malibu, even with Oprah’s help. The Malibu was given to retired U.S. Army corporal and Purple Heart recipient Trent Brining, who received his medal when a rocket-propelled grenade […]

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2016-Chevrolet-Malibu-007

In celebration of a key milestone, General Motors CEO Mary Barra gave away a 2016 Chevrolet Malibu Monday, a feat that could never happen with the old Malibu, even with Oprah’s help.

The Malibu was given to retired U.S. Army corporal and Purple Heart recipient Trent Brining, who received his medal when a rocket-propelled grenade delivered severe injuries to his arms and legs while on patrol in Baghdad in 2005. Brining is currently a financial advisor for a local credit union near Overland Park, Kansas, 30 minutes south of where his new Malibu will be assembled later this year in nearby Fairfax.

Over the next two days, GM will select four other individuals to receive a new vehicle built in the region where they reside. The giveaways are in celebration of the automaker’s 500-millionth vehicle to leave the assembly line. Barra added her company expects to sell “more than 1,000 new vehicles per hour, 24 hours per day” during 2015, a figure that would deliver an estimated 10 million units in volume by the end of the year.

Speaking of Fairfax Assembly, Chevrolet global president Alan Batey announced the plant would receive a $174-million investment for new equipment and technology to help assemble the 2016 Malibu. The investment is part of GM’s overall $5.4-billion investment scheme to help improve its standing for years to come. Monday’s announcement follows the first one made last week in Michigan, where three facilities will split $783.5 million for similar improvements.

[Image credit: Chevrolet]

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Gales: Lotus Will Show Profit By End Of FY 2016 http://www.thetruthaboutcars.com/2015/05/gales-lotus-will-show-profit-end-fy-2016/ http://www.thetruthaboutcars.com/2015/05/gales-lotus-will-show-profit-end-fy-2016/#comments Fri, 01 May 2015 16:00:57 +0000 http://www.thetruthaboutcars.com/?p=1058418 After going broke for so long, Lotus Cars CEO Jean-Marc Gales says his company will be back in the black by March 2017, when FY 2016 ends. To do this, Gales implemented cost-cutting measures while improving the current lineup to help increase sales and profits, Automotive News Europe reports. In the short term, this meant […]

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Lotus Evora S Circa August 2013

After going broke for so long, Lotus Cars CEO Jean-Marc Gales says his company will be back in the black by March 2017, when FY 2016 ends.

To do this, Gales implemented cost-cutting measures while improving the current lineup to help increase sales and profits, Automotive News Europe reports. In the short term, this meant making some changes to the automaker’s offerings, such as adding an automatic transmission to the Exige, and refocusing the facelifted U.S.-bound Evora to better compete against the Porsche 911 and Audi R8. Gales said the U.S. would be the Evora’s biggest market as it leads the charge back to these shores after federal crash standards kept the model out for 2015.

At home in Hethel, England, 260 were cut from the workforce of 1,250, less than the 325 Gales had planned to cut in September 2014. The CEO also cut back consulting and engineering work conducted by Lotus Engineering, focusing the engineering arm on developing the automaker’s lineup, as well as combing through the supply chain to replace larger suppliers with smaller ones.

On the sales front, 2,015 cars left the showroom floor during FY 2014, an increase of 55 percent compared to the previous year’s 1,403; Gales is aiming for 3,500 sold by 2016. The increase is helped by an expansion of its dealerships, which stood at 174 at the end of March. He said his goal is to have 200 by the end of 2015.

As for profits, Gales said that losses were “massively reduced” compared to FY 2014’s £65.6 million ($100 million USD), and FY 2013’s £159.4 million ($242.2 million). He adds that he expects to see a profit for Lotus by the end of FY 2016, an experience the company hasn’t had “from the car side in over 20 years.”

[Photo credit: Vetatur Fumare/Flickr/CC BY-SA 2.0]

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AAA: Average Annual Driving Costs Fall 2 Percent In 2015 http://www.thetruthaboutcars.com/2015/04/aaa-average-annual-driving-costs-fall-2-percent-2015/ http://www.thetruthaboutcars.com/2015/04/aaa-average-annual-driving-costs-fall-2-percent-2015/#comments Tue, 28 Apr 2015 19:00:48 +0000 http://www.thetruthaboutcars.com/?p=1055737 According to AAA’s 2015 Your Driving Costs study, annual driving costs costs fell 2 percent to an average of $8,698 in 2015. The annual study, which looks at the associated costs in owning and maintaining a typical sedan driven 15,000 miles a year, found that fuel costs fell nearly 14 percent to 11.2 cents per […]

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AAA Your Driving Costs 2015 Infographic

According to AAA’s 2015 Your Driving Costs study, annual driving costs costs fell 2 percent to an average of $8,698 in 2015.

The annual study, which looks at the associated costs in owning and maintaining a typical sedan driven 15,000 miles a year, found that fuel costs fell nearly 14 percent to 11.2 cents per mile, while finance charges came down 21 percent to just $669 per year. The former is due to a combination of falling gas prices at the pump and improved fuel economy, the latter due to low finance rates amid rising sales and heavy dealer competition.

However, vehicle depreciation climbed 4.1 percent to $3,654 as new-car sales help push used and off-lease models back onto the lot. Insurance trickled up nearly 9 percent to $1,115/year for an average policy, mainly because of higher-cost modern features linked to safety, use of lightweight materials, and newer connected-vehicle systems.

Maintenance costs barely rose to just over 5 cents/mile in 2015 – though owners are behind on routine maintenance – while licensing, registration and taxes totaled $665 a year on average, thanks to slightly higher prices on the showroom floor. Tires held their ground as a result of the dynamics and competitiveness of the market, with costs rising to just 0.98 cents/mile.

Among the vehicle types factored into the annual average, owners of minivans and SUVs will continue to fare well at the pump and in financing their vehicles, as those vehicles average 0.625 cents and 0.708 cents per mile in 2015. Owners of large sedans face the highest average cost at 0.710 cents/mile, while midsize and small sedan owners pay 0.581 cents and 0.449 cents for every mile driven, respectively.

[Image credit: AAA]

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City Officials Ready To Approve Incentives For Arlington Assembly Expansion Plan http://www.thetruthaboutcars.com/2015/04/city-officials-ready-approve-incentives-arlington-assembly-expansion-plan/ http://www.thetruthaboutcars.com/2015/04/city-officials-ready-approve-incentives-arlington-assembly-expansion-plan/#comments Tue, 28 Apr 2015 17:00:01 +0000 http://www.thetruthaboutcars.com/?p=1055641 City officials in Arlington, Texas will vote Tuesday evening to approve incentives for General Motors’ $1.2-billion expansion of Arlington Assembly. Mayor Robert Cluck says the incentive package – including a reduction of real estate and business taxes by 80 percent over 10 years and waived construction and development permits – is in exchange for an […]

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2015 Chevrolet Suburban LTZ

City officials in Arlington, Texas will vote Tuesday evening to approve incentives for General Motors’ $1.2-billion expansion of Arlington Assembly.

Mayor Robert Cluck says the incentive package – including a reduction of real estate and business taxes by 80 percent over 10 years and waived construction and development permits – is in exchange for an expansion that would add 589 jobs to the factory, Detroit Free Press reports. Cluck added that his city “had a beautiful relationship with General Motors,” and sees no issue with the package being passed.

In addition to the new jobs, the plan would add 1.2 million square feet and approximately $1 billion in equipment to the factory floor, with $300 million going toward building improvements for the 60-year-old facility that assembles Chevrolet’s Tahoe and Suburban SUVs, as well as GMC’s Yukon and Yukon XL models, and Cadillac’s Escalade. A spokeswoman for GM declined to offer anything more specific about the plans, claiming that the automaker had “nothing to announce at this time.”

The expansion comes as demand for the aforementioned SUVs have climbed 51 percent in Q1 2015 when compared to the same period in 2014. The demand has the 4.4 million-square-foot factory operating on three shifts six to seven days per week just to keep pace.

[Photo credit: Chevrolet]

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Norway Set To Review EV Incentives Amid Soaring Sales http://www.thetruthaboutcars.com/2015/04/norway-set-review-ev-incentives-amid-soaring-sales/ http://www.thetruthaboutcars.com/2015/04/norway-set-review-ev-incentives-amid-soaring-sales/#comments Tue, 21 Apr 2015 16:00:50 +0000 http://www.thetruthaboutcars.com/?p=1049953 The law of unintended consequences has found another victim in Norway as the nation re-assesses its electric vehicle incentives amid soaring sales. Monday marked the 50,000th EV sold in Norway since the nation implemented incentives in 2012 meant to encourage electric-vehicle adoption among its citizens. The incentive includes toll and parking fee exemptions, free use […]

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Tesla Model S delivery to Høyres Nikolai Astrup in Norway

The law of unintended consequences has found another victim in Norway as the nation re-assesses its electric vehicle incentives amid soaring sales.

Monday marked the 50,000th EV sold in Norway since the nation implemented incentives in 2012 meant to encourage electric-vehicle adoption among its citizens. The incentive includes toll and parking fee exemptions, free use of charging stations, and bus-lane usage in addition to the usual tax credit scheme, Reuters reports. The milestone arrived three years earlier than expected by the government, whose official data shows that one-fifth of 2015 new-car sales in Norway are of electric models. Norway, a nation of 5.1 million, now accounts for one-third of all battery-powered vehicle sales in Europe based on 2014 sales figures.

As such, the nation’s finance ministry is looking to revise those incentives, especially in light of losing kr3 billion to kr4 billion ($380 million to $510 million USD) in revenue, as well as complaints about increased sales of the Tesla Model S, which made up 3 percent of overall EV sales last year. The latter issue has led to calls from critics to remove the incentives for wealthy consumers.

The finance ministry will present the outcome of its review when the revised budget is presented May 1.

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Ford To Announce $2.5B Investment In Mexico On 90th Anniversary http://www.thetruthaboutcars.com/2015/04/ford-announce-2-5b-investment-mexico-90th-anniversary/ http://www.thetruthaboutcars.com/2015/04/ford-announce-2-5b-investment-mexico-90th-anniversary/#comments Wed, 15 Apr 2015 14:00:15 +0000 http://www.thetruthaboutcars.com/?p=1044762 This Friday, Ford will announce a $2.5-billion investment plan for two of its factories in Mexico. According to Reuters, Ford will spend $1.3 billion to expand its engine production facility in northern Chihuahua for two new diesels, with the remaining $1.2 billion to go a transmission plant in Guanajuato. A government representative said the Chihuahua […]

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Ford Chihuahua Plant in Mexico

This Friday, Ford will announce a $2.5-billion investment plan for two of its factories in Mexico.

According to Reuters, Ford will spend $1.3 billion to expand its engine production facility in northern Chihuahua for two new diesels, with the remaining $1.2 billion to go a transmission plant in Guanajuato. A government representative said the Chihuahua investment would create 4,000 jobs as a result.

The announcement will be made in Mexico City in celebration of Ford’s 90th anniversary in Mexico, with Mexico president Enrique Peña Nieto set to attend. Ford’s previous major investment occurred in 2008, when the automaker spent $3 billion to update the Cuautitlan plant for production of the Fiesta.

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Reedy: CarMax Lending Arm Won’t Fully Play In Subprime Market http://www.thetruthaboutcars.com/2015/04/reedy-carmax-lending-arm-wont-fully-play-subprime-market/ http://www.thetruthaboutcars.com/2015/04/reedy-carmax-lending-arm-wont-fully-play-subprime-market/#comments Thu, 09 Apr 2015 12:00:40 +0000 http://www.thetruthaboutcars.com/?p=1041145 Though CarMax’s lending arm will press forward with its subprime lending test program, it won’t be a major player in the subprime game. According to Automotive News, CarMax CFO Tom Reedy said as much during an earnings call with the media and analysts this month, stating that the company has three partners already doing well […]

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Carmax

Though CarMax’s lending arm will press forward with its subprime lending test program, it won’t be a major player in the subprime game.

According to Automotive News, CarMax CFO Tom Reedy said as much during an earnings call with the media and analysts this month, stating that the company has three partners already doing well for CarMax in the subprime market; thus, no reason for CarMax Auto Finance to take a greater role in said market like it does in the prime lending market.

For now, the lending arm will continue loan originations at 5 percent of subprime vehicle sales for the duration of the testing period, which began January 2014. The arm originated $72.2 million of receivables under the program through the end of February 2015.

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