Fiat Profits Drop 55% Because Making Cars Is Hard

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1st Gear: Gotta Spend Money To Make Money... Right?

Here's hoping the old maxim is true and that the outflow of capital will, in time, result in the multiplied inflow of capital. I mean, here's hoping if you're human sweater stand Sergio Marchionne of Fiat, which just reported a second quarter drop of 55% ($264 million compared to $583 million a year prior).


Total revenue was slightly up, but according to Brent Snavely they're blaming a drop in sales in Latin America and a bunch of spending related to launching the Chrysler 200 as well as stuffing cash down some throats to get people to buy their cars.

Net income in the U.S. was also down, but by not as much and sales were up so... investment!

2nd Gear: Canadians Aren't Buying As Many GM Products


While there's been almost no backlash we've been able to detect against GM in the United States, Canadians have actually drawn down their purchases of Chevys and GMs even as the market was growing.



Bloomberg has an appropriately hilarious Canadian anecdote:

Self-proclaimed "car-heads," the brothers from Brampton, Ontario, bought a Transformers-inspired, yellow and black Camaro in 2007. After the massive recalls by General Motors Co. (GM:US) this year, the brothers sold it and bought a Nissan Altima.

"We never really had issues with it," Derrick Sharma, 27, said in a phone interview this month. "But once the recalls started happening and we found out how GM wasn't really faithful as to being up front about things as they happened, that's taken us aback a bit."


So you bought a fucking Altima even though nothing ever happened to your Camaro? Also, you're two brothers who own a car together?


3rd Gear: Toyota Beating Volkswagen, Because SUVs


GM sold 4.92 vehicles through the first six months, behind Volkswagen at 5.07 million and Toyota at 5.1 million vehicles.

How is Toyota edging out Volkswagen? SUVs, which Americans are buying tons of and Volkswagen is selling very few of.

"They've gotten so good at building products that really hit with customers," said Jim Press, a former U.S. sales chief and 37-year Toyota veteran who now consults for the Renault-Nissan alliance. "Contrast that to Volkswagen: they don't have this market figured out. They've failed to succeed in North America because they don't really understand it."



4th Gear: One Reason To Like The Four-Door Mini Cooper


The IIHS rankings of small cars are out (and their definition of a small car includes an array of vehicles that cover the Ford C-Max, Chevy Volt, Subaru BRZ and Mazda5 wagon...) and only the Mini Cooper Countryman got a "good" score in the small overlap front crash test.

To earn a "good" rating, a car must keep the cabin around the occupants largely intact and protect them with a combination of seat belts and air bags, the institute said. When a car's cabin collapses, as it did in the crash tests of the Juke, Leaf, 500L and Mazda5, it can move the seats and air bags out of place, increasing the risk of injuries.


Yeah, but that's the price you pay for driving a Subaru BRZ instead of a Mini Cooper Countryman.

5th Gear: Another Day, Another GM Lawsuit


Another lawsuit was filed in Manhattan federal court today against GM, representing about 650 people killed or injured in recalled cars, reports Reuters.

Tuesday's lawsuit covers claims that would not be eligible for the program, according to Robert Hilliard, the lawyer who filed the suit. These include accidents involving cars not among the 2.6 million initially recalled for switch issues and accidents in which the car's airbags deployed, which are ineligible for the program.


This will be a test of whether or not New GM can be sued.

Reverse: End Of An Era

On this day in 2003, the last of 21,529,464 Volkswagen Beetles built since World War II rolls off the production line at Volkswagen's plant in Puebla, Mexico. One of a 3,000-unit final edition, the baby-blue vehicle was sent to a museum in Wolfsburg, Germany, where Volkswagen is headquartered.


Neutral: Is Fiat At The Beginning Or The End?

Are we starting to see Fiat begin its growth phase, or is it about to start struggling again?


Photo Credit: Getty Images

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