AutoIndustry posts
FeedPosted Aug 25th 2009 3:00PM by Zac Bissonnette (RSS feed)
Filed under: Industry, General Motors (GM)
Now that Cash For Clunkers is over, the auto industry has a problem: Where will car sales come from now?
Everyone who had an old car and wanted a new one took advantage of the Cash For Clunkers plan -- who is going to go buy a new car the day after the government stopped paying people $4,500 to buy cars?
J.D. Power and Associates reduced its 2010 sales forecast to 11.5 million units from 11.6 million -- citing the impact of Cash For Clunkers. In other words, a big part of what Cash For Clunkers did was borrow sales from the future and front-load them, and now there's nowhere to go for car sales now.
Continue reading With Cash for Clunkers gone, where does the auto industry go now?
Posted Jul 29th 2009 3:40PM by Zac Bissonnette (RSS feed)
Back in August of 2008, General Motors pulled out of car leasing altogether, citing slumping demand, declining resale values, and financing problems. Now the company, in partnership with GMAC, is planning to reenter the leasing market on August 1st of this year.
The Wall Street Journal reports that the final plan is still being worked out, but the Cadillac CTS, "which competes in a luxury market that is heavily dependent on the availability of lease deals," is likely to be among the models included in the leasing line-up.
Continue reading General Motors goes back to car leasing: A sad day for consumers
Posted Jun 18th 2009 10:10AM by Mark Fightmaster (RSS feed)
Filed under: Analyst reports, Analyst upgrades and downgrades
This morning, Goldman Sachs felt it prudent to up its view of the
U.S. auto sector to Attractive from Neutral. The brokerage stated that it would use any current weakness as an opportunity to build positions. If, like me, you are questioning Goldman's strategy, the firm explained, "Despite the significant rally in auto shares since the February lows, we think we are still in the middle phase of a cyclical rebound in the auto sector."
In its note to clients, Goldman Sachs predicted, "improved affordability, improving confidence and significant pent-up demand as likely to offset the impact from gas prices and deliver significantly more upside in the space as auto sales gain momentum."
Continue reading Surprisingly, Goldman Sachs raised the auto sector to Attractive
Posted Jun 11th 2009 3:30PM by Zac Bissonnette (RSS feed)
Filed under: General Motors (GM)
The average American family of four has, against its will, invested over $900 in the Detroit auto industry so it's fair to ask: Will we be getting our money back?
President Obama's auto task force told lawmakers yesterday that there is a "reasonable probability" that the federal government will be paid back. I don't buy that and here's why:
Liquidation analysis of GM suggests that there would be just $10 billion in net proceeds from a liquidation. Given that the government has $80 billion invested in the industry with little collateral, long-time money losers like GM and Chrysler will need to earn spectacular returns on equity to pay back their loans. I just don't see it happening. Do you?
Continue reading Obama says 'reasonable probability' of getting paid back on auto loans
Posted May 26th 2009 5:00PM by Michael Fowlkes (RSS feed)
Filed under: Forecasts, Bad news, Consumer experience, Employees, Market matters, Money and Finance Today, Economic data, Housing, Recession, Financial Crisis
The employment data is in for April, and it is not a pretty picture, as all but 6 states in the country saw
increases in the number of jobless claims.
We all hope that Federal Reserve Chairman Ben Bernanke is right, and the economy is going to start to turn around in the latter part of this year, but even the most optimistic forecasters agree that unemployment is going to continue to rise, possibly above 10% before the worst is over.
Continue reading Unemployment continues its rise in April
Posted Apr 15th 2009 8:40AM by Mark Fightmaster (RSS feed)
Filed under: Deals, Bad news
Reports have surfaced in London that Italian automaker Fiat is
ready to walk away from the Chrysler deal. The bone of contention is high labor costs. The Italian firm has given the U.S. auto firm and Canadian and American labor unions until the end of the month to "significantly reduce labor costs." This revelation was made in an interview of Fiat's CEO Sergio Marchionne in the Canadian newspaper the
Globe and Mail. Fiat wants Chrysler to lower the labor costs to Japanese and German plants levels.
The problem facing Chrysler is that the deal with Fiat is its last chance to stay out of bankruptcy. With Fiat ready to walk away from the deal, the North American unions had better agree to the demands or face some job losses. Let's not forget that Chrysler was given 30 days to complete the merger with Fiat or the American firm would be cut off from the government funding it is currently existing on.
Continue reading Will labor costs kill the Chrysler-Fiat partnership?
Posted Apr 14th 2009 2:00PM by Michael Fowlkes (RSS feed)
Filed under: International markets, Products and services, Management, Consumer experience, Conventions and conferences, Ford Motor (F), General Motors (GM)
The last year has definitely been a rocky one for the auto industry, with American icons
General Motors (NYSE:
GM) and Chrysler both receiving billions of dollars from Washington in hopes of avoiding bankruptcy. While a lot of the country feels as though it is important to try to save the auto companies, not everyone is so happy with the recent events, and have been
taking out their frustrations at recent auto shows.
The first sign that things are not quite the same as before can be noticed on the auto show floors. Typically in the past, the major auto makers spared no expense at setting up elaborate displays to lure in people to check out their most recent designs. This is not the case anymore for some of the industry's major players.
Continue reading Consumers take out their frustrations at auto shows
Posted Mar 4th 2009 8:40AM by Peter Cohan (RSS feed)
Filed under: Ford Motor (F), General Motors (GM), Amer Intl Group (AIG)
So far the auto industry -- General Motors Corp. (NYSE: GM) and Chrysler -- have received $17.4 billion in U.S. funds after much gnashing of congressional teeth. Meanwhile, American International Group (NYSE: AIG) snapped its fingers and over the weekend some Treasury officials gave it another $30 billion -- bringing its total to $180 billion. But thanks to the worst February in 27 years, the auto industry is going to catch up fast.
February's auto sales plunge is a result of the realization among Americans that they can keep their current cars running longer -- and even if their cars are broken, they can't get the financing to buy a new one and they certainly can't pay cash for a car -- too expensive. GM's sales fell 53%, Ford Motor Co.'s (NYSE: F) sales declined 43% and Chrysler suffered a 44% drop. Incentives are not working -- the average incentive per vehicle sold is up 8% to $2,914. Only Hyundai -- which lets buyers give back their car if they lose their jobs -- bucked the trend -- its sales fell only 2%.
Continue reading How long before auto bailout costs $100 billion?
Posted Mar 3rd 2009 3:40PM by Steven Mallas (RSS feed)
Filed under: Earnings reports, AutoZone Inc (AZO)
Well, is there any stock working out there? Here's one that isn't doing too badly. In fact, it's closer to a 52-week high than a 52-week low (and that's saying something). I'm talking about
AutoZone (NYSE:
AZO). It's actually up at the time of this writing by almost 8% on
second-quarter earnings.
Sales increased 8%, and the bottom line expanded over 20% to $2.03 per share. What was the call? According to this source, $1.84 per share was the expected number. Great job, AutoZone. Now, the thesis here isn't too difficult to divine. No one wants to buy a new car from General Motors (NYSE: GM) or Ford (NYSE: F). Not only is a recession happening, but some consumers are probably scared to make a major purchase from companies that are doing so poorly. Ergo, car maintenance is all the rage. AutoZone repurchased stock during the quarter and kept its gross margin relatively stable. Domestic comps revved higher by 6%. Those are positive points.
Continue reading AutoZone has great Q2, but be careful about buying the stock
Posted Feb 25th 2009 1:52PM by Zac Bissonnette (RSS feed)
Filed under: General Motors (GM)
Bad news for
General Motors (NYSE:
GM) and Chrysler: If ordinary Americans had their way, both companies would be out of business.
A new
USA Today/Gallup poll shows that just one-fourth of Americans believe that the government should continue lending money to Detroit automakers -- a huge drop from the 61% that supported government aid back in December. There were 1,013 Americans surveyed from Friday through Sunday, and 51% thought that Detroit's auto industry would survive. That's a drop from 57% in December.
Continue reading Most Americans oppose more automaker aid
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The Pep Boys -- Manny, Moe & Jack (NYSE: PBY) issued Q2 earnings on Tuesday after the bell. The aftermarket service business for automobiles, whose related companies include AutoZone (NYSE: AZO) and AutoNation (NYSE: AN), said net sales fell about 2%, and earnings per share increased 50% to 15 cents. The earnings growth was actually better than that since there were a couple of items in the previous year's quarter that benefited the bottom line. 
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