Good Morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories you need to know.
1st Gear: Suck It, Analysts
Second quarter financial results are in and General Motors is the big winner this time. The company’s $1.1 billion net income easily beat analysts’ predictions, according to Bloomberg. The company doubled its North American profit thanks to the current surging demand for pickup trucks. (Maybe those anti-aluminum ads are working?)
And guess what, analysts who predicted they’d be among the hardest hit by the Chinese meltdown? The General actually did really well in that market:
GM said equity income from the China joint venture rose to $502 million from $476 million a year ago. Even as auto sales have struggled in the market, GM is selling more SUVs and Cadillac luxury cars. It’s also cut costs. In the first half, GM’s market share in China rose slightly to 14.6 percent.
2nd Gear: Hyundai In A Slump
Hyundai, however, has been having a bit of a rough go of things lately, struggling in the U.S. over its small crossover lineup and nonexistent pickup truck lineup. They don’t really have what buyers are after these days, plus their sales in China have been relatively weak. Here’s Bloomberg again:
The firm, which with affiliate Kia Motors ranks fifth in global auto sales, said net profit slumped 24 percent in the quarter to 1.7 trillion won ($1.46 billion), matching estimates. Sales were also weak in the United States and the won’s strength compared to the currencies of Japanese and European rivals continued to hurt Hyundai on exports.
The automaker said shipments to China in the quarter dropped by around 14 percent from a year earlier as competition intensified and growth in the world’s second-largest economy slowed. While discounting will hurt profit margins, Hyundai is counting on higher sales volumes to make up the shortfall.
3rd Gear: The Fight Over The Focus
As negotiations between the Big 2.5 automakers and the United Auto Workers union get underway, we can expect one of the thorniest issues to revolve around the Fords Focus and C-Max. Specifically, where they’re made. Contract negotiations are starting two weeks after Ford announced they’d move small car production from Michigan to Mexico.
Ford historically has had the best relationship with the UAW, but that could change this round. Here’s The Detroit Free Press quoting UAW president Dennis Williams:
“I will save my comments for Ford when we open up Ford,” negotiations, Williams said last week during the GM event. “I will say it’s always concerning to me when any corporation invests outside of the U.S....there are a variety of reasons to do it…we will address Ford at the right time.”
They’re not happy about it for sure.
4th Gear: Ferrari Files For U.S. IPO
Fiat Chrysler is preparing to spin off Ferrari and sell a stake to its shareholders, and they just submitted a request to regulators in the U.S. to do that later this year. From Reuters:
UBS, BofA Merrill Lynch and Santander are underwriting the initial public offering (IPO), the company said in a filing with the U.S. Securities and Exchange Commission on Thursday.
The filing did not say how many shares the company planned to sell or their expected price, specifying only that it would not list more than 10 percent of the business. The IPO is expected after mid-October.
It’s more of a paperwork thing, but it gives us an idea when this will happen.
5th Gear: 24 Hour Buick Test Drives
How much can you really learn about a car in a brief test drive? Probably not much. To that end Buick is starting to let customers keep them for 24 hours before making a decision. From The Detroit Free Press:
Other brands have done versions of overnight test drives in the past. Buick also has done an extended, overnight test drive as part of a GM promotion across all brands in 2003 and 2004. That test drive featured a financial incentive to participants if they purchased a rival automaker’s vehicle after testing a GM vehicle overnight; this promotion does not have any financial incentives.
Buick sales through the first half of the year are down 6.3 percent to 106,314. Encore subcompact crossover sales are up 29.1 percent, but Buick has struggled with sales of passenger cars including the LaCrosse, Regal and Verano.
They could use the help.
Reverse: But How Many Of Them Had VTEC, Yo?
Neutral: How Does Hyundai Bounce Back?
More crossovers would help. I think the Santa Cruz pickup truck would too, but that’s just me...
Contact the author at email@example.com.