The ongoing coronavirus pandemic only reared its spiky head at the tail end of the fiscal year, but the disruption to automakers was strongly felt. In a new vehicle market that was largely cooling off, the impact of fewer sales and idled plants was immediate.
That said, the virus didn’t spread the damage evenly.
Toyota, the automaker that regularly jousts with Volkswagen for the title of World’s Largest Automaker, expects its finances to take a major hit this year. A solid blow, but not a knockdown punch.
With sales down severely and production depressed across the globe, Toyota envisions an 80-percent profit drop for the current fiscal year.
Mercedes-Benz sold a record 2,385,400 passenger vehicles around the globe in 2019, topping the previous year’s tally by some 3,400 units, and subsequently brought in more money while doing it. Revenue rose 3 percent, the automaker said in its end-of-year earnings report, but that intake didn’t translate into more profit.
Far from it.
As the automaker embarks on a cost-cutting campaign aimed at freeing up cash for electric vehicle development, among other things, the German manufacturer announced its net profit dropped to $2.95 billion from $8.29 billion in 2018. As a result, shareholders can expect a paltry dividend payout.
Despite a year-over-year sales drop in the fourth quarter of 2018, a higher average transaction price spurred by growth in high-margin vehicle sales in North America returned better than expected Q4 earnings for General Motors.
The company’s strong showing comes as its overseas ventures sank and headwinds gathered at home and abroad; mainly, predictions of a slower 2019. That’s GM’s outlook, too, which explains why CEO Mary Barra isn’t backpedaling on her plan to shutter five North American plants.
Nissan is closing in on its goal of owning 10 percent of the North American market, but it opened itself up to plenty of risk along the way.
The surging automaker beat rival Honda in sales during the first half of this year, but only because of boosted incentives and increased fleet sales, Bloomberg reports. Big volume doesn’t always mean big profits.
If I’ve seen it once in the comments on this site, I’ve seen it a hundred times.
Never once in the history of the Internet has anyone, anywhere admitted that they paid more than invoice for a new car.
Everybody gets the best deal possible. We all “ stick it to the man.” However, despite the well-known and understood tendencies of most people to lie on forums, in comments, or even when writing about their own business practices on the Internet, this might be one of the few times when the braggadocio matches reality.
The truth is that virtually everyone gets a “good deal” on a new car.
General Motors announced Wednesday that third quarter, adjusted profit for the company was $3.1 billion, led by truck sales in North America and car sales in China. The net revenue was down $500 million from the same period last year, which GM says is due to currency fluctuations, but the automaker’s profits were decidedly higher.
Automotive News reported that the profit margin was the largest for GM since its 2009 bankruptcy, even after its $1.5 billion charge to settle claims related to its defective ignition switch that resulted in 124 deaths.
The automaker posted an 11.8 percent profit margin — also its largest since 2009 — and said it would end the year above 10 percent.
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.
I always get a little dismayed whenever I hear a car company talking about sales volume targets.
Yes, sure, reasonable sales targets are OK. Acceptable sales targets. If Toyota wants to say they’re going to sell one billion Camry units this year because they sold 997 million last year, that’s fine with me. If Honda wants to say they’re going to sell 950 million Accords this year because they’re contractually obligated by a higher power to slightly undersell the Camry, that’s fine too. And if Dodge wants to say they’ll sell 100,000 Grand Caravans this year, of which 99,000 are going to Enterprise, and the remaining 1,000 are going to people who don’t know any better, I guess I can accept that.
But I’ve never really understood why automakers set insane volume targets that keep them desperately reaching for sales for the next few decades.
I have acquired two VM Motori RA 428 engines that were pulled from new Chrysler minivans in 2009. The van were converted to electric drivetrain in LA. I want to install them in a pickup but because they were never installed in a truck from the factory, it will have to be a custom job.
Just ahead of their Q1 2013 earnings called, Tesla announced that they were profitable in the first quarter of the year, with deliveries exceeding their own targets. In addition, Tesla has also decided to discontinue the base trim of the Model S due to a lack of demand.
Optimism sure ain’t what it used to be. Introducing its latest survey of auto industry executives [ PDF], Booz & Co. proclaims that “optimism is skyrocketing,” and that “a new wave of optimism is overtaking the U.S. auto industry.” They’re not wrong, but for those used to the pre-bailout days of unabashed optimism dressed up as analysis, the “new optimism” is remarkably guarded. And it’s all relative to the pessimism that was beginning to set in when the industry began to realize that the “old optimism” was wildly at odds with the slow-motion market recovery.
So, just how optimistic is the “new optimism”? Which companies have the most reason for optimism? What do industry executives worry about most? When do they expect a Chinese invasion? The answers to these questions and more after the jump.
Once upon a time, GM’s North American operations spewed red ink across the firm’s balance sheet, with the whole mess kept afloat by relatively strong overseas operations. Now GM makes most of its money at home while its international divisions limp along. No, really: in its just-released Q1 financial report, GM reveals that some $1.7b of its $2.2b global EBIT came from its once-troubled home markets. What a difference a bailout makes!
What matters in the world of cars? It’s a question we’re always asking here at TTAC, and depending on your perspective, the answer could be almost anything. But for all of their cultural significance, cars are ultimately a business, and if you had to boil down the value of a vehicle to one single attribute, it would have to be profitability. But that’s a tough measure to make, considering automakers don’t typically break out profits by vehicle, let alone by model line. Which is why I was so excited to see a list of the 12 most profitable vehicles since 1990 compiled by Max Warburton of Bernstein Research, and published in Automotive News Europe [sub]. So, what’s the most profitable vehicle in modern automotive history? The answer can be found just after the jump…
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- Namesakeone Please ask the Mazda representative this: Will Mazda ever make cars (besides the 3 and the MX-5) again? I know SUVs and crossovers are all the rage and sell so well and are so profitable, but Mazda made its reputation on sports cars and sedans and coupes that were interesting to drive. Not everything has to be a vehicle that looks like what every other manufacturer is selling. Mazda has enough SUVs in its lineup. Give the enthusiasts something.
- Ollie Read closer, I wrote $0.15 every 4 miles. I dare say a Dodge Challenger Hellcat will challenge a Model 3 in only one aspect that has any interest to me — raw acceleration. Although I have not ever been in one, I imagine a pretty miserable experience would await in comparison to my quite, smooth & comfortable M3. If I wanted that kind of raw power and the comforts mentioned, there is always the Tesla Plaid.
- Jesse The math doesn't check out on their claims. The closest I could come to making their numbers work was by comparing a Hummer EV pickup that was unloaded that was charged in Hawaii at double the national average price of electricity to a Toyota Camry at the national average price of gasoline. Hardly an apples to apples comparison. I have ran the numbers here in washington state at my price of 8 cents a kwHr and I can drive a 2022 model s almost 500 miles for the price of driving a Toyota Camry with a 4 cylinder 100 miles.
- Laine Callahan I own a 1978 dlx with 41000. Orig paint, zero rust , in my garage since 05 lolgoing thru her now, valve gasket, tank reline, fuel pump , such a kick to driveneed driver seat bottom cushion replaced or redone. Any suggestions?
- Ollicat VAGhost - It must be difficult to come up with some of the boneheaded things you say. Very few people have $50 grand to put up huge solar array at their house. The medium income in this country is under $60K. Not all of us are as financially gifted as you. Secondly, if you only use your privileged solar system to fuel up, then you never travel more than 150 miles from your home. 3rd, this is not 1970. North America has all the petrol reserves we need to provide for ourselves. Only the Biden crowd is standing in the way that becoming a reality. Under Trump, we were a net exporter of oil. Lastly, your EV is enslaving 40,000 children in Congo as they mine cobalt to make you feel good about yourself.