Pandemic Muscles Into Honda and Mazda's 2019 Profits

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.

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Massive Anticipated Corona Hit Aside, Toyota's Sitting Pretty

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.

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Record Sales, Lackluster Earnings As Mercedes-Benz Shoves Cash Into Evs

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.

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Despite Big North American Earnings, Barra Says GM Plants Have to Go

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.

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Nissan's Push for Greater Market Share Comes With a Big Cost

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.

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Piston Slap: Traversing the Echo of The Epic Windfall?

Long-time TTAC Commentator psarhjinian writes:

I need some communal wisdom.

I have two vehicles: a 2005 Pontiac Montana and a 2005 Toyota Echo.

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Bark's Bites: How Do New Car Dealers Make Money?

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.

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General Motors Posts Largest Quarterly Profit Since Bankruptcy

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.

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Ford Posts $1.9B Second Quarter Profit, Largest Since 2000

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.

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QOTD: Why Do Automakers Care So Much About Sales?

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.

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Piston Slap: To Love an Italian…Turbo Diesel?

Don writes:

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.

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Tesla Reports Q1 Profit, Cancels 40 KWh Model

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.

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Industry: Optimism Is Back, But Only A Little At A Time

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.

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GM Reports $1b Q1 Profit, Still Seeking "Competitive Levels Of Profitability"

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!

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The 12 Most Profitable Vehicles Since 1990

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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  • Mia Hey there!I recently stumbled upon the Crack Eraser DIY Windshield Repair Kit (check it out here: https://crackeraser.com/collections/diy-windshield-repair-kits) and decided to give it a shot on a small chip in my windshield. I have to say, it worked like a charm! Super easy to use, and it saved me a trip to the professionals. If you're dealing with a similar issue, this kit is definitely worth considering. 😊
  • Rust-MyEnemy Whoa, what the hell is wrong with Jalop1991 and his condescension? It's as if he's employed by Big Plug-In or something."I've seen plenty of your types on the forums....."Dunno what that means, but I'm not dead keen on being regarded as "A type" by a complete stranger"" I'm guessing you've never actually calculated by hand the miles you've driven against the quantity of gas used--which is your actual miles per gallon."Guess again. Why the hell would you even say that? Yes, I worked it out. Fill-to-fill, based on gas station receipts. And it showed me that a Vauxhall Astra PHEV, starting out with a fully charged PHEV battery, in Hybrid mode, on my long (234-mile) daily motorway daily commute, never, over several months, ever matched or beat the economy of the regular hybrid Honda Civic that I ran for a similar amount of time (circa 5000 miles)."You don't use gasoline at all for 30-40 miles as you use exclusively battery power, then your vehicle is a pure hybrid. Over 234 miles, you will have used whatever gas the engine used for 200 of those miles."At least you're right on that. In hybrid mode, though, the Astra was using battery power when it wasn't at all appropriate. The petrol engine very rarely chimed in when battery power was on tap, and as a result, the EV-mode range quickly disappeared. The regular hybrid Civic, though, deployed its very small electric reserves (which are used up quickly but restore themselves promptly), much more wisely. Such as when on a trailing throttle or on a downward grade, or when in stop-start traffic. As a result, at the end of my 234 miles, the Civic had used less gas than the Astra. Moreover, I hadn't had to pay for the electricity in its battery.I look forward to you arguing that what actually happened isn't what actually happened, but I was there and you were not."Regardless, that you don't understand it appears not to have stopped you from pontificating on it. Please, do us all a favor--don't vote."You really are quite unpleasant, aren't you. But thanks for the advice.
  • Tassos Jong-iL Electric vehicles are mandated by 2020 in One Korea. We are ahead of the time.
  • 1995_SC Can you still get some of the tax credits under the new program?
  • Analoggrotto HyundaiGenesisKia saw this coming a long time ago and are poised for hybrid and plug-in hybrid segment leadership:[list=1][*] The most extensive range of hybrids[/*][*]Highest hybrid sales proportion over any other model [/*][*]Best YouTube reviews [/*][*]Highest number of consumer reports best picks [/*][*]Class leading ATPs among all hybrid vehicles and PHEVs enjoy segment bearing eATPs[/*][/list=1]While some brands like Toyota have invested and wasted untold fortunes into full range electric lineups HyundaiKiaGenesis has taken the right approach here.