Dan O’Brien Kia Hit With $1.25m Judgement for Deceptive Practices

“There is no choice but for them to improve. They have to find a way to meet customer expectations.” Those are the words uttered by Steve Center, Chief Operating Officer of Kia America, at this year’s L.A. Auto Show in response to questions about the brand scoring dead last in a sales satisfaction survey about its dealerships. 


Well, it seems Dan O’Brien Kia of New Hampshire either didn’t get the memo or is hell-bent on becoming the poster child for Center’s ire. After all, being told to pay $1.25 million in a deceptive practices settlement are unlikely to ingratiate the place to their brand’s COO.

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What's in Your Wallet? If Ford Has Its Way, It'll Be a Blue Oval

Ford has teamed up with the payment company Stripe in a five-year deal to leverage what they’re calling “automotive e-commerce and payments”. According to marketers in the Glass House, this arrangement will help facilitate transactions for vehicle services and products such as EV charging.

And if you think it couldn’t lead to subscription services for features we currently take for granted in vehicles today, we have some seaside property in Montana to sell you.

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Right On the Money: Stellantis Acquires Auto Finance Company

A captive lending arm can be a major source of profit for automakers. After all, keeping that paper in-house instead of farming it out to a third party permits some of that sweet interest-driven revenue rolling on a monthly recurring basis. Why else did most of us, for many years during GMAC’s heyday, refer to General Motors as a finance company which just happened to sell cars?

Following several years of shacking up with Santander in order to offer financing for their customers, Stellantis has bought F1 Holdings Corp., an outfit that is the parent of Texas-based First Investors Financial Services Group. Now they’ve spent $285 million in this all-cash transaction, Stellantis is no longer the only major automaker in America without a captive finance arm.

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Report: Ford Leaving Indian Market, Ending EcoSport Production

Ford appears to be pulling out of India, with the automaker confirming plans to end production there by next year. While a sizable automotive market — fifth just behind Japan, with about 2.5 million sales annually — the region never felt like a good fit for Blue Oval. Ford’s cash cows have long been upsized SUVs and pickup trucks, whereas India has an obvious penchant for small automobiles prioritizing value above all else. This left the automaker with a paltry market share estimated below two percent and likely explains why it’s no longer interested in manufacturing vehicles there.

In Thursday’s announcement, the company confessed to having accumulated operating losses of more than $2 billion over the last decade — hence the need for restructuring. But it won’t be cutting ties with India entirely, as it wants the region to handle Ford Business Solutions and help with customer support services via the relevant information centers.

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Senate Finance Committee Approves $12,500 EV Tax Credit Bill

On Wednesday, the Senate Finance Committee advanced the Clean Energy for America Act making a few tweaks from earlier proposals. Changes include raising the federal EV tax rebate ceiling to $12,500 and opening the door for automakers who already exhausted their production quotas.

It’s good news for General Motors, which recently begged the government for just such a handout. But any manufacturer participating in the sale of electric vehicles will find themselves similarly blessed by the updated rules — assuming they make it through the halls of Capitol Hill with the necessary support.

Let’s take a peek behind the curtain to see what the updated proposal entails.

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Nissan Posts Predictable Quarterly Loss, Says Annual Losses Won't Be Too Bad

Despite predicting a rough year for itself long before the pandemic kicked the whole industry in the shins, Nissan is reporting a sunnier financial forecast. Thanks to its vast restructuring efforts and better-than-anticipated sales, the Japanese automaker has trimmed estimated annual operating losses by 28 percent.

According to Nissan, that should place the 2020 cash bleed (which doesn’t officially wrap until March 31st, 2021) somewhere around $3.2 billion instead of the original $4.5 billion. Considering it’s coming off an already bad year, this is actually good news. But it doesn’t mean there aren’t more hard times ahead, as Nissan has decided to evolve its restructuring plan to make sure it doesn’t lose more money than absolutely necessary.

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Report: Automotive Industry Borrows $132 Billion Through Pandemic

The automotive industry has borrowed an estimated $132 billion since the world started taking the coronavirus more seriously, according to a recent analysis by Bloomberg.

Despite migrating around the planet months before anyone thought to close down a single airport or suggest masks were necessary, March is broadly viewed as the start of the pandemic in the Western World, as that’s when most governments started taking direct action and businesses started looking for handouts. Still, it’s exceptionally difficult to follow the money if you didn’t devote yourself entirely to the task of tracking payments while under shelter-in-place orders.

We do know that a lot of money was being thrown around, however. Car dealerships were among the largest recipients of Paycheck Protection Program (PPP) funds in the United States, garnering anywhere from $7.5 billion to $12 billion in government aid to maintain staff. Plenty of criticism over exactly where that money went arose as the press questioned which businesses were more deserving and who was just taking advantage of the system.

But it’s only the tip of the iceberg. PPP funds don’t need to repaid unless they weren’t earmarked entirely for payroll purposes; the government also used the program to send over $600 billion to support banks in extending low-interest loans to companies during the pandemic. The automotive industry was one of the largest beneficiaries of that arrangement.

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McLaren May Sell Stake in F1 Team to Improve Chances of Survival

With McLaren scrounging for cash and cutting 1,200 positions from its ranks in the hopes of prolonging its own existence, it would be an understatement to claim 2020 has been unkind to the automaker. Most nameplates are having a rough year. And almost all are seeking ways to turn things around before the situation becomes untenable and their fate becomes sealed.

The plan for McLaren involved a £150 million loan from the National Bank of Bahrain and more than a few empty seats.

Autocar now claims the brand has even considered selling part or all of McLaren Applied and Automotive. While the outlet admits this likely hinges on its evolving financial situation, a company insider confirmed advanced discussions are focused on selling a minority stake in the Racing division.

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GM Pads Wallet to Weather Coronavirus Storm

Following in the footsteps of rival Ford, General Motors is drawing on credit to bolster its cash reserves. The company, which announced a temporary shutdown of its U.S. assembly plants last week, is in the same basket as pretty much any other automaker operating in the country.

As well, GM — again, like Ford — sees no value in its now-outdated guidance issued for 2020. That bit of predictive analysis, like a lot of things, fell victim to the sudden and disruptive appearance of the coronavirus.

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The Cost of Ownership: Financing a Car Hasn't Gotten Any Cheaper, Says AAA

The American Automobile Association (AAA) suggests that long-term loans are encouraging ownership costs of new vehicles to climb. In some instances, the group suggests customers could be on the hook for well over $10,000 per year. While this only applies to larger and more expensive automobiles, AAA says the trend is all-encompassing — spurred largely by changing finance conditions.

According to AAA’s latest research, finance costs on new vehicle purchases have jumped 24 percent in 2019, elevating the average annual cost of car ownership to $9,282 ($773.50 per month).

“Finance costs accounted for more than 40 [percent] of the total increase in average vehicle ownership costs,” elaborated John Nielsen, AAA’s managing director for Automotive Engineering & Repair. “AAA found finance charges rose more sharply in the last 12 months than any major expense associated with owning a vehicle.”

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Ford and GM Prep for Economic Hardship

With another global recession looming on the horizon, executives at General Motors and Ford are busy touting the merits of being prepared. On Tuesday, the financial heads of both automakers were present at a J.P. Morgan Conference in New York to explain the steps being taking to mitigate economic disaster.

While financial hardship is not yet a guarantee for the United States, the ongoing trade war with China has impacted the cost of doing global business. Likewise, most sizable automotive markets are either underperforming or have surpassed peak growth levels. Depending upon the severity of the anticipated recession, GM claims its “downturn planning” could include postponing non-essential capital expenditures and shifting toward lower-priced automobiles.

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QOTD: How Do You Solve a Problem Like Nissan?

The news of Nissan’s recent financial trouble brought attention right where it needs to be: on lackluster product. In our most recent reporting regarding Nissan’s sales woes, I was asked in the comments whether I had any ideas for improvement. Well that got me thinking (and worked up), and it turns out I do have ideas, and they fall into three major categories.

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Doing the Math Yields More Bad News for China's Auto Industry

Over the past several years, the Chinese government embarked on an aggressive electric vehicle push, hoping to mitigate the nation’s severe air pollution, reduce its reliance on oil imports, and foster a high-tech manufacturing sector that could put the rest of the world to shame. The result of these efforts? Hundreds of new EV companies, propped up by Chinese subsidies and investors, with no real future.

While it was known that most of these startups would never make it to the finish line, estimates of their survivability rate has grown increasingly bleak. For a time, it was assumed that most would die out — leaving anywhere between 5 and 10 percent to reach the assembly phase. However, NIO Capital’s Ian Zhu posited that the number was likely closer to 1 percent last August.

China is now pulling back its support, with many believing the industrial bubble is about to pop. And they have the math to back it up.

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Video: Elon Musk Admits Tesla Almost Died Over the Summer

According to Tesla CEO Elon Musk, the automaker was teetering on the edge of disaster earlier this year. “Tesla faced a really severe threat of death due to the Model 3 production ramp,” Musk told Axios during a video interview on HBO. “Essentially the company was bleeding money like crazy and just if we didn’t solve these problems in a very short period of time, we would die. And it was extremely difficult to solve them.”

Musk said Tesla was within “single-digit weeks” of an unrecoverable catastrophe. While we appreciate his present candor, the assertion doesn’t mesh with comments made earlier.

In fact, Elon was down on the automotive firm needing more funds every since it posted its 2011 financial results. “Tesla does not need to ever raise another funding round,” he said in response to a question on the company’s cash position back in February of 2012. “We may want to do so, but we are in a strong cash position, and we don’t need to.”

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Dealerships Shuttered In Wake of Legal Action

Remember this saga? Earlier this year we told you about All Pro Nissan, yet another entrant into the “Dealers Behaving Badly” file. At the time, the stores – owned by a couple of ex-NFL linebackers and a veteran of the auto industry – were being examined for all kinds of financial chicanery ranging from floorplan irregularities to missing cars.

At the time, it was reported that All Pro Nissan was open but unable to sell or lease vehicles due to “restructuring.” Now, it appears the lights have been turned off for good.

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  • AZFelix Hilux technical, preferably with a swivel mount.
  • ToolGuy This is the kind of thing you get when you give people faster internet.
  • ToolGuy North America is already the greatest country on the planet, and I have learned to be careful about what I wish for in terms of making changes. I mean, if Greenland wants to buy JDM vehicles, isn't that for the Danes to decide?
  • ToolGuy Once again my home did not catch on fire and my fire extinguisher(s) stayed in the closet, unused. I guess I threw my money away on fire extinguishers.(And by fire extinguishers I mean nuclear missiles.)
  • Carson D The UAW has succeeded in organizing a US VW plant before. There's a reason they don't teach history in the schools any longer. People wouldn't make the same mistakes.