Archive for July, 2013

A “Merger of Equals”? Where’ve We Heard That Before?

Will Publicis -Omnicom ad agencies merger also go down in flames?

by on Jul.31, 2013

The new super-agency will handle a wide range of brands and products, including the new 2014 Toyota Tundra

“A merger of equals!” Seems there’s a certain familiarity to that corporate-speak-cliché, isn’t there? Based on the news coverage, analysis and punditry of the proposed merger between Publicis and Omnicon — already two of the world’s largest – ad agency groups — it’s going to work to the advantage of the involved corporations, its c-suite executives, their stockholders, stock option holders, platinum parachute beneficiaries  and others who believe bigger is better.

But what about the agencies’ clients? Especially the automotive clients.

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The individual holding companies can count among themselves is a blue chip list of big spending automotive customers. Toyota’s agency, Saatchi & Saatchi, is owned by Publicis, as is Leo Burnett which works for both Buick and GMC. Omnicom owns TBWA Chait Day, the shop that handles the Nissan account in the U.S. and internationally, while another Omnicom shop, Merkley+Partners, is the AOR – that’s agency-of-record for civilians — for Mercedes-Benz. Oh, and then there’s Volkswagen which, outside the U.S. is at the DDB shop which is also owned by Omnicom.  That’s a total of five of the top ten most prestigious auto brands in the world.

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VW Posts Solid Second Quarter Despite Net Profit Decline

Rival Peugeot slides deeper into a hole - yet investors cheer.

by on Jul.31, 2013

VW's net fell sharply - but that was largely due to its takeover of Porsche.

At first glance, it might have seemed a tough quarter for Volkswagen AG. After all, the maker’s net profit tumbled by half compared to year-ago levels. But the 2% jump in operating earnings is what analysts and investors are focusing on.

VW’s net was hammered largely by the anticipated, one-time costs associated with its takeover of German sports car manufacturer Porsche. The operating income, up 1.8% year-over-year, tells how the maker was able to hold its own in what it called a “difficult market environment.”

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In fact, an even clearer picture of that environment emerged from the earnings report posted by VW’s French rival PSA Peugeot Citroen which saw its losses climb to 426 million euros for the first half of the year due to declining European car sales and a strike by workers protesting its plans to close factories, reduce capacity and eliminate 8,000 jobs.

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Ford Gases Up with New CNG Models

Maker to offer first light-duty CNG option.

by on Jul.31, 2013

Ford expects to see a surge in demand for cheaper CNG-fueled F-Series trucks.

While the U.S. is literally flowing with new sources of relatively clean and cheap natural gas, the fuel has largely been ignored by the auto industry – but that could soon change as Ford Motor Co. and other manufacturers become increasingly fired up about CNG.

Until now, Ford had relied on aftermarket convertors to service the relatively few customers who have wanted to run their vehicles on compressed natural gas. But the automaker will offer a CNG option on its half-ton, or light-duty, pickup later this year.

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Buyers will be able to order the F-150 truck with either a natural gas or LPG option. The options won’t come cheap, with the total costs running as high as about $10,000. But for fleet customers who clock significant mileage each year, the savings should quickly add up since CNG costs barely half as much as regular-grade gasoline.

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Honda Earnings Slide Despite Global Sales Increase

Mazda, meanwhile, surges back into the black.

by on Jul.31, 2013

Despite strong U.S. sales of models like the new Accord, Honda's bottom line results disappointed analysts and investors.

Honda’s bottom line took an unexpected hit during the latest quarter, the third-largest Japanese maker reporting that earnings slid 7% compared to the year before despite increased sales outside its home market and the boost Japanese makers, in general, have been getting from a weaker yen.

Honda reported a net profit of 122.4 billion yen, or $1.25 billion during the April-June period – the first quarter in the Japanese fiscal year. A survey of industry analysts by FactSet showed a consensus forecast of 146 billion yen, or $1.5 billion.

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“The figures were lower” than expected, Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc., told the Bloomberg news service. “The global economy is slowing down, and just because the yen is weaker doesn’t mean Japanese carmakers can sell cars.”

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Jeep Cherokee Delay A Potential Setback for Chrysler

Maker again looking at IPO options.

by on Jul.30, 2013

Stuck in the mud? Chrysler desperately needs to get the new Jeep Cherokee into showrooms.

Chrysler has confirmed that it will delay the media preview for the new Jeep Cherokee while it works out the kinks with the new and desperately needed crossover-utility vehicle .

For the moment, the sales launch of the new Cherokee remains on schedule, but even if that doesn’t slip, as well, it is the latest chapter in a long-running automotive soap opera that goes by the name Chrysler.

Meanwhile, in an unexpected turn, the maker’s CEO let slip that a long-discussed initial public stock offering that it seemed to have abandoned a couple of years ago is apparently back in Chrysler’s plans.

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“We will introduce the vehicle to media and consumers as soon as that process is complete,” Chrysler said in a statement after advising journalists expecting to drive the next Jeep Cherokee next week that the program was being delayed by a month. “While the media drive timing has changed, production continues and the vehicles will be in showrooms in September,” Chrysler said.

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Happy Birthday, Dear Henry

Ford founder would be 150 today – but other big anniversaries are a year away.

by on Jul.30, 2013

The man and machine that changed the world. Henry Ford and the Model T.

He died much as he was born, by lamplight on the Fairlane Estate near the farm where he was raised. But much changed during his 83 years, and Henry Ford had a hand in much of that transformation.

His name can still be found on millions of automobiles produced in plants around the world, from Beijing to Britain and, of course, Detroit.  And while the assembly line concept he pioneered has gone through major updates it remains the heart of modern manufacturing. He was a global visionary and an advocate for peace who also helped supply the American military machine through two world wars.

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Henry Ford might have helped put America on wheels and helped make modern consumerism possible, but he also tinkered with social engineering during an era when millions of Americans moved from farms to factories. Henry Ford’s grand goals were tarnished, in the eyes of many by his naiveté and anti-Semitism.

“Henry Ford was a very complex man and someone who was very contradictory in many ways,” says Bill Chapin, head of the Automotive Hall of Fame which is located near Ford Motor Co. headquarters in Dearborn, Michigan and on the campus of the Henry Ford, a museum devoted to Americana and American ingenuity.

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Mercedes Top Luxury Brand for Car Thieves

California accounts for a quarter of all stolen luxury models.

by on Jul.30, 2013

Mercedes had three models on the Top 10 list of stolen luxury vehicles, according to the NICB.

Car theft has begun to rise again, according to recent reports, and while thieves often target mainstream vehicles that can readily be resold or stripped down for parts, luxury cars are far from immune.

And a new study suggests that Mercedes-Benz is the brand car thieves seem to be targeting the most, with three models – the C-Class, E-Class and S-Class – among the Top 10 most frequently stolen luxury vehicles, according to a new report from the National Insurance Crime Bureau.

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German vehicles, in general, were among the most frequently stolen high-line products, perhaps no surprise considering brands like Mercedes-Benz and BMW – which had two models in the Top 10 – are also the luxury segment sales leaders. Each of Japan’s three upscale brands had a single model on the list, as did Detroit’s Lincoln and Cadillac.

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Chrysler Earnings Jump 16% – Give Boost to Italian Partner Fiat

But production issues, recalls, were costly problems

by on Jul.30, 2013

Fiat/Chrysler CEO Sergio Marchionne.

Despite paying a heavy price for a string of recent recalls, Chrysler Group LLC reported a 16% increase in earnings during the second quarter of 2013 and the company’s chief executive said he expects even stronger numbers during the second half of the year – though earnings are still expected to fall short of earlier expectations..

But Chrysler earnings would have been even stronger were it not for a major recall to address a Jeep safety issue as well as production shortfalls. Even so, the Detroit maker’s results were enough to provide a much-needed boost to its Italian partner Fiat which quadrupled its own net income for the second quarter despite ongoing problems in its home European market.

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The automaker posted net income of $507 million, compared to $436 million during the same quarter a year earlier. The second quarter marked Chrysler’s eighth consecutive quarter of positive net income. Net revenue increased 7% to $18 billion and Chrysler’s operating profit also increased 7% to $808 million from $755 million a year ago.

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First Drive: 2014 Toyota Tundra

If at first you don’t succeed…

by on Jul.30, 2013

The 2014 Toyota Tundra family.

It’s been a big year for Detroit’s Big Three automakers, and while the overall upturn of the U.S. market has helped them score gains in everything from hybrid to compacts to midsize sedans, nothing has buoyed their market share and bottom line more than the revival of pickup truck demand.

No surprise, Toyota is eying that market with envious ambition. The Japanese maker has long dominated the compact truck market with its Tacoma model, but despite repeated attempts, Toyota has failed to crack the code on the bigger – and traditionally more domestic-loyal full-size pickup segment.

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It seemed to have a winner in hand when the Toyota Tundra went through a major redesign six years ago, but after an initial burst of growth sales collapsed.  To be fair, the entire full-size truck market collapsed, declining by roughly half during the depths of the Great Recession, but Toyota is now lagging the pickup rebound and is anxious to regain momentum with the Tundra redesign it’s bringing to market for the 2014 model-year.

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BMW Uses Cutting Edge Technologies on New i3

Lightweight materials and Volt-like extending engine doubles range.

by on Jul.29, 2013

BMW is using the latest technology in its new i3.

BMW has made a point of incorporating a great deal of new technology, such as the wide use of lightweight carbon fiber, into its vehicles. But it has borrowed a concept from General Motors so the i3 will also be available in an “extended range” version similar to the Chevrolet Volt.

If desired, the BMW i3 is also available with a range-extender engine, which maintains the charge of the lithium-ion battery at a constant level while on the move as soon as it dips below a certain value. Performing this role is a 650cc two-cylinder, 34-horsepower engine, which is mounted immediately adjacent to the electric motor above the rear axle, BMW said.

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Maximum range stands at approximately 186 miles, which is more than double the range of battery electric version of the i3. (more…)