The Truth About Cars » q2 2013 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 28 Jul 2014 12:01:32 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » q2 2013 Chrysler Profit For Q2 Up 16% to $507 Million, Full Year Forecast Reduced Wed, 31 Jul 2013 14:07:13 +0000 2013-07-30T160847Z_1_CBRE96T18UU00_RTROPTP_2_AUTOS-CHRYSLER-TOLEDO

Chrysler Group reported net income of $507 million in the second quarter, with strong sales of SUVs and pickup trucks helping the car company make a profit for the eighth consecutive quarter. Earnings were up 16% from the same period a year earlier when $436 million was made. However, the company reduced its projected full year profit. Second-quarter revenues grew 7 percent to $18 billion, up from $16.8 billion in 2012.

U.S. sales were up almost 10%, bettering the industry average of  8 percent, to 479,980. All the company’s brands but Chrysler had improved sales.

“I think the (U.S.) market is holding up well and Chrysler is holding up well in that market,” CEO Sergio Marchionne told analysts Tueday morning, according to a report by Automotive News.

Sales will be reported on Thursday and Chrysler is expected to post its 40th straight month of year to year sales gains.

The company lowered forecast of net income for the full year from $2.2 billion to somewhere between $1.7 and $2.2 billion. Modified operating profit projections were also lowered from $3.8 billion to between $3.3 and $3.8 billion.

A charge of $151 million to cover the voluntary recall of Jeep models to settle a dispute over rear end collision safety with the U.S. National Highway Traffic and Safety Administration.

For the first half of the year, U.S. sales were up 9 percent, to 908,332, gaining Chrysler 0.1% of market share to 11.6%.

CFO Richard Palmer said Chrysler was reducing its earnings expectations for the year due to the cost of the NHTSA campaign and issues with suppliers that have affected production.

“We’ve had issues at most of our plants trying to keep up with demand,” Marchionne said. “We’ve lost volumes on a steady basis,” from supply issues.

The new Jeep Cherokee’s success is considered critical by Marchionne. Several thousand assembled Cherokees have been held back from dealers as the company fine tunes the powertrain software. A second shift of Cherokee production at the  Toledo North plant will begin August 19th. Jeep has also postponed the media launch of the Cherokee due to this matter, an unprecedented move by an automaker.

“The second half is not doable without a proper launch of the Cherokee. We’ve been without a car in that segment for about a year, and we’re paying a huge price for not having the Liberty,” Marchionne said.

Marchionne also said that CAFE standards will force Chrysler to develop new powertrains for its Jeep brand, hinting at diesel engines and 8 speed transmissions for Jeeps. He also reassured UAW workers that Jeeps will continue to be imported from Toledo.

“But the last thing I want to do is to ever ever stop the Toledo plant from making Wranglers,” Marchionne said, “We need to find a way to introduce the changes without stopping production in that plant.”

]]> 12
Fiat turns higher profit as spending cuts narrow European losses Wed, 31 Jul 2013 10:00:26 +0000 Fiat-Group-Logo-400x243

The Fiat Group reported its profits for the second quarter of 2013 and they were better than expected, attributed to strong pickup truck sales at Chrysler’s Ram brand and spending cuts in Europe.


Earnings before interest, taxes and one time items increased by 9% to 1.03 billion euros ($1.37 billion). Revenue was up 4% to 22.3 billion euros. Losses in Europe were down 40 million euros to 98 million. The company says that it expects to be in the black in Europe by 2016. The European losses were more than offset by U.S. sales and profits.

Net income for Fiat went up to 142 million euros, an improvement of 110 million from 2012. Without Chrysler, that net income would have been a loss of 247 million euros for Q2 2013.

Fiat’s car sales were down 10% in the first half, performing poorer than the industry average of -7%.

Fiat’s own projections say it is on pace to have a 2013 trading profit of between 4 and 4.5 billion euros, up from 3.81 billion last year. That projection exceeds those of industry analysts, who say that the company will report 3.83 billion euros profit for the entire year.

Fiat Second Quarter 2013 Results

]]> 2
Despite Inventory Issues in Korea and U.S., Hyundai Reports Near Record Earnings As China Sales Surge Sat, 27 Jul 2013 12:49:37 +0000 hyundai-logo

Despite low inventory levels that affected sales in North America and their home market of Korea, Hyundai Motor Co. announced near record profits for the second quarter of 2013, powered by good results in China. Hyundai reported net profits of  2.52 trillion Korean won ($2.26 billion), down just slightly from last year but beating analysts expectations. Operating profit was 2.41 trillion won ($2.16 billion) on revenues of 23.18 trillion won ($208.39 billion).

Bucking a slowing Chinese market, Hyundai sales there were up 36% in the first half of 2013 following the start of production at the company’s third Chinese assembly plant, the launch of a local version of the Elantra, and decreased sales of Japanese brands due to the dispute between China and Japan over the Senkaku/Diaoyu islands.

Sales in its home market of South Korea fell 0.7% while U.S. sales were up slightly 1.2%. Hyundai sales in both of those markets were hampered by a labor dispute over wages and overtime affecting their Korean operations, reducing supply. Also, competitors in the critical compact and midsize segments have introduced many new models, while Hyundai’s bread and butter Elantra and Sonata are among the oldest in that segment. To move the metal, Hyundai has cut prices and increased incentives. The relatively flat results in North America means that the company has been losing market share.

In Europe, where sales are at the lowest point they’ve been in 20 years, Hyundai’s sales were off 9 percent.

]]> 11
Kia’s Q2 Profits Up To $1.06 Billion On Strong Chinese Performance, Sales Lukewarm Elsewhere Fri, 26 Jul 2013 14:57:41 +0000 Kia_Motors

Spurred by increased sales in China, Kia’s second quarter profits were up 7.7% from last year, to 1.18 trillion won ($1.06 billion), exceeding analysts expectations slightly. Revenue was up 4.4% to 13.1 trillion won ($1.168 billion).

Sales in China, affected by the territorial island dispute between China and Japan, were up 22% driven by demand for the K3 sedan. Sales in Europe bucked the general trend in the moribund market and were also up slightly, 1.5%, lifted by sales of the Sportage SUV and the Cee’d hatchback. The strengthened South Korean currency, which rose 2.4% against the yen in the quarter, hurt sales in the United States, Kia’s biggest market. Sales in the States fell just barely, 0.2%, compared to an industry average of +8.5%, and that was even after Kia increased spending on incentives by 19% in the quarter.

Sales for the domestic Korean market were down 4% from the same period last year, and were down 3.7% in Latin America at a time when industry sales were up 7.9%. Excluding South Korea and China, sales in Kia’s Asia-Pacific region were down 9.1%.

]]> 18
GM Q2 Profits: $1.2 Billion, Down Due To New Pickup Launch Costs Thu, 25 Jul 2013 16:55:16 +0000 gm-logo-1024x1024

General Motors said that costs associated with the launch of their redesigned pickup trucks and weaker results in Asia (except for China) lowered net income for the second fiscal quarter of 2013 by 19% from last year, to $1.2 billion.


Overall revenue was up 4% to just over 39 billion dollars. Income before taxes, interest and non-recurring items like GM’s purchase of $200 million worth of preferred shares in GM’s Korean subsidiary, was up 7% to $2.3 billion. Even with the rollout costs for the new Chevy Silverado and GMC Sierra, pretax profits in North America were up 4.5% to $2.0 billion. As with Ford, GM’s loses in Europe shrunk, though by a much larger figure, dropping to $110 million from $394 million in Q2 2012. Since coming out of bankruptcy in 2009, GM has made over $19 billion in 14 straight quarterly profits.

Though dealers were selling off remaining stock of the old 2013 pickup truck models, which usually means more cash incentives to move them out to make place for the revised trucks, strong U.S. demand for pickup trucks offset the downward price pressure. Transaction prices for GM’s full-size pickup trucks were up 5% to $36,641. Analysts says that GM makes an average of about $10,000 for every pickup truck they sell.  Silverado and Sierra U.S. sales combined rose 23 percent through June, to 330,219. GM expects the second half of 2013 to be even better than the first, with the all new C7 Corvette Sting Ray and the new, larger Cadillac CTS arriving at dealers.

For GM International Operations, which includes Asia, Australia, and Russia, overall pretax profit was down 64%, to $228 million, though pretax profit in China was up. The weak Japanese yen is creating price pressure in many of those markets.

GM South America made a pretax profit of $54 million, up from only $16 million in this quarter last year.

GM Financial’s profits were up 17% to $254 million.

During the quarter, the price for GM shares went up 20%, surpassing the $33 IPO price for the first time in over two years. The share price got a boost from news that the U.S. Treasury was selling off more of its equity in the automaker, the result of the 2009 bailout, and from GM’s relisting on the Standard & Poor 500 in June. At Wednesday’s close, GM common stock was $37.14.

]]> 52
Nissan Profits Buoyed By Strong U.S. Sales, Weaker Yen Thu, 25 Jul 2013 16:35:47 +0000 Nissan_3

Buoyed by stronger U.S. sales driven in part by cheaper prices allowed by the weaker yen, Nissan reported a quarterly profit of ¥82.02 ($818.9 million), beating estimates by about $50 million, up ~$100 million from last year’s quarter (In Nissan’s fiscal year, the second quarter).


After the company cut the retail price of seven models, May sales were up 25%, and the company says that it has resolved supply problems that affected sales in 2012. Pathfinder sales were up more than 300% and Altima sales were up 23% in June. The battery powered Leaf had its second best month in the EV’s history, with 2,235 cars sold. After lowering the price on the Leaf, offering a less expensive entry level version, and increasing the rated range, first half 2013 sales, 9,839, have already exceeded results for all of 2012, and June sales were 4X sales from the same period a year ago.

Analysts say that Nissan’s aggressive pricing strategy has caught the industry’s attention and time will tell if other automakers hold the line of pricing or if we’ll see a price war. While the weak yen primarily affects imports from Japan, it can also affect the cost of cars assembled in the United States because they still use Japanese components. Nissan projects that a weaker yen will increase operating income by $2.25 billion this year.

]]> 5
Ford Posts Record Q2 Profits, Up Almost 19%, Surpasses Expectations, All Regions Profitable Except Europe Wed, 24 Jul 2013 23:15:09 +0000 'Good job, Al", "Thanks Bill"

‘Good job, Al’, ‘Thanks Bill’

For the 16th consecutive quarter, Ford Motor Co. profits have risen, with the Dearborn automaker reporting a 2nd quarter 2013 profit of $1.23 billion, up 18.6% from 2012, working out to 45¢ per share, exceeding analysts’ projections of 37 cents a share. Pretax profit for the quarter was up 40% to $2.56 billion. The company said that it set records for pre-tax profits in both the 2nd quarter and 1st half of 2013, making $4.8 billion in the first six months of the year.

Ford CEO Alan Mulally attributed the company’s success to his One Ford plan. “Our strong second quarter results in every region around the world is another proof point that our One Ford plan is continuing to deliver and is building momentum.”

After losing over $30 billion from 2006 to 2008 as the American car industry melted down, Ford will have its fifth profitable year in a row.

Revenue was also up, 14.4% to $38.1 billion. The good quarterly results caused Ford to raise predictions for the full year. FoMoCo expects now to make more than the $8 billion it made last year and anticipates that the U.S. car and light truck market will surpass 15.5 million units, perhaps even reaching 16 million. Sales were also good in the 2nd quarter, up 15%, gaining Ford nearly 1% additional market share in the U.S. Average transaction prices were also up, ~$1,400 a vehicle, and Ford’s profit margin in the North American market of 10.4% leads all major manufacturers. The only negative part of Ford’s report was that incentives were up by $500 a vehicle, more than the industry average.

North America still remains the engine driving Ford’s profits, with the company reporting a $2.3 billion profit in that region. Europe, where car sales are the lowest they’ve been in two decades, dragged down global profits, but Ford CFO Bob Shanks said that the region is improving earlier than expected. Ford lost $348 million in Europe during the 2nd quarter, an improvement of over $50 million, and it also revised its 2013 projections for Europe, expecting loses to match last year’s $1.8 billion of red ink, instead of the $2 billion previously projected. Ford is restructuring its European operations and reducing overcapacity with three plants slated to close by early 2014.

News was better from the combined Asia Pacific Africa operations which reported record quarterly profits for the region of $177 million, a turnaround from a $66 million loss last year. South America also did well for Ford, posting $151 million in profits.

]]> 37