Tag Archive | "Fiat-Chrysler"

KBB: Average Transaction Price Climbs to Record High in December

IRVINE, Calif. — The estimated average transaction price for light vehicles in the United States reached an all-time record high of $35,309 in December, according to Kelley Blue Book (KBB). This increase, the auto firm added, amounted to a 1.5% increase over the same time last year.

Virtually all vehicle OEM recorded increases in average transaction prices, with Fiat Chrysler, Ford Motor Co. and Nissan North America leading the way. However, KBB noted that just as new prices have grown, so have incentives.

“Even though transaction prices are at an all-time high, incentives have grown similarly to counterbalance the increased prices,” said Tim Fleming, analyst for Kelley Blue Book.  “Higher average transaction prices are reflective of the rapid shift in consumer demand away from cars and into trucks and utility vehicles, which are more expensive. Should the sales mix of cars to SUVs reach a stable point in the near future, actual transaction price growth could match or fall just short of inflation.”

For Fiat Chrysler, average vehicle transaction prices rose 3.3%, driven primarily by the automaker’s Chrysler, Dodge and Jeep brands. The strength of the Pacifica minivan propelled average transaction prices for the Chrysler brand up 10%, as did fewer sales of the brand’s 200 Sedan. The Dodge brand was up 5% on a lower mix of its compact car, the Dart, and strong performance from the Charger. The average for the Jeep brand was up 2% thanks to a strong month from the refreshed Grand Cherokee.

“December was an interesting month for FCA. Though the Jeep and Ram brands are up, incentives are high, and vehicles such as the Cherokee saw big drops. Jeep has to hope its 2017 redesigns can stem some of the bleeding and help reduce incentives,” said KBB analyst Akshay Anand. “Alfa Romeo and Fiat continue to be drags on FCA, with Alfa’s volume still next to nothing and Fiat continuing to decline in sales. The Pacifica was a great story for Chrysler, but the brand still needs more models in order to become a player.”

Essentially matching Fiat Chrysler’s growth rate, Ford Motor Co. realized a 3% rise in its average transaction price for December. The main drivers were the automaker’s Explorer, Escape and Fusion, which saw their transaction prices climb by 11%, 3%, and 4%, respectively. The Lincoln brand’s average transaction price rose 3% increase due to the Continental $57,156 average transaction price.

Nissan North America realized the biggest year-over-year increase among all the OEMs, with its average transaction price rising 5.9% over the same time last year, according to KBB. Michelle Krebs, senior analyst for AutoTrader, noted that the brand’s growth was driven in large part by the success of its Nissan Rogue sport utility, which benefited from the advertising tie-in with Rogue One: A Star Wars Story.

“Appealing products, incentives, and financing likely drove the industry to another record year in 2016. A three-peat is possible (if not probable) if Wall Street, consumer confidence, and the economy continue to respond favorably to the incoming administration. There are a lot of old cars on the road still and a lot of new technology awaiting shoppers in today’s showrooms,” said Rebecca Lindland, senior analyst for Kelley Blue Book.

Posted in Auto Industry NewsComments (0)

Exclusive: U.S., Major Automakers to Announce Safety Accord Friday

The U.S. government and a group of global automakers are set to unveil a voluntary agreement at the Detroit auto show on Friday aimed at improving auto industry safety and spurring culture changes, according to company and government officials.

The accord could set the framework for further discussions on safety reforms and mark a new era of cooperation between automakers and regulators after a record-setting year of safety fines, recalls and investigations into malfunctioning vehicles made by General Motors Co, Fiat Chrysler Automobiles NV, Honda Motor Co and others.

But it stops short of what many safety advocates have urged Congress and the National Highway Traffic Safety Administration (NHTSA) to adopt: new binding legal requirements to toughen safety rules. And automakers may be able to raise the voluntary agreement to argue against future proposed regulations, saying the accord makes legally binding rules unnecessary.

 The agreement, under discussion for several weeks, would also attempt to improve vehicle cyber security and the use of early warning data to detect potential defects that might lead to safety problems or large-scale recalls, sources said. It would also create new government-industry task forces to work to improve auto safety.

Despite the voluntary agreement, NHTSA Administrator Mark Rosekind said the agency will not hesitate to fine automakers that fail to follow the rules and will not give up its aggressive enforcement of auto safety rules.

Automakers recalled a record-setting 63.95 million vehicles in the United States in 2014, incurring large fines from NHTSA.

Companies in the talks leading up to the agreement include GM, Toyota Motor Corp, Ford Motor Co, Daimler AG, Fiat Chrysler, BMW AG, Honda, Nissan Motor Co and Hyundai Motor Co.

The agreement is to be announced at the auto show in the U.S. auto capital of Detroit by U.S. Transportation Secretary Anthony Foxx and top auto executives, sources told Reuters.

In a letter last week to the NHTSA seen by Reuters, the group of 16 automakers said industry support of an agreement “reaffirms our shared commitment to safety, and signals to the public the areas in which government and industry intend to collaborate to further improve automotive safety.”

Automakers met with the NHTSA in Chicago on Dec. 16 and since then exchanged proposed “Principles for Working Collaboratively to Enhance Motor Vehicle and Traffic Safety.”

In recent days, NHTSA and automakers have continued to propose revisions, including discussions about government-industry working groups, according to auto industry officials who spoke to Reuters at the Detroit show.

The talks come after NHTSA came under intense criticism in 2014 for failing to detect ignition switch defects in 2.6 million older GM cars linked to at least 124 deaths. Since then, NHTSA has been more aggressive in handing out fines and demanding outside monitors oversee automaker safety compliance.

NHTSA Administrator Mark Rosekind said on Monday in an interview on the sidelines of the Detroit show that the agency cannot make vehicles safe simply by imposing new regulations and handing down fines. He said he hoped a deal would be announced Friday.

“We’re going to have to find new tools – that means new collaborations, new partnerships,” Rosekind said.

But the voluntary agreement will not be enforceable – and is not as tough as what some safety advocates have called for. With only a year remaining in the Obama administration, there is a shrinking window to complete new legally binding auto safety rules.

Sean Kane, president of Massachusetts-based Safety Research & Strategies Inc and an auto safety advocate, praised NHTSA “for having a dialogue” with automakers and prodding them to do more on safety “and be strong on enforcement.”

Kane raised concerns about a voluntary agreement that is not legally enforceable. “It also eliminates input from outside parties” like safety advocates and consumers, Kane said, “and that is a little troubling.”

Foxx met with top executives from major automakers on Dec. 1 in Washington. A spokeswoman for Foxx said there have since then been “productive discussions with auto manufacturers toward agreement on steps to bolster safety.”

Foxx “is hopeful that they will soon result in concrete commitments that lead to significant safety improvements that will strengthen public confidence,” said his spokeswoman.

Fiat Chrysler CEO Sergio Marchionne said on Monday he agreed with the NHTSA that the auto industry needs more collaboration with regulators. He said he wanted the industry to “get to a stage where safety is no longer a competitive edge used by one automaker against another.”

Posted in Auto Industry NewsComments (0)

2015 Auto Sales Set To Break Record

It looks like 2015 will go down as a year of record car sales in the U.S.A.

The year’s sales are expected to shatter the previous annual record of 17.4 million vehicles, made in 2000. Automakers have continued to benefit from an improving economy, lower gas prices and easy auto financing. Holiday promotions have also drawn shoppers to the car lot.

The final tally will be made once automakers finish reporting their December sales figures on Tuesday, according to Forbes.

The strong year is a far cry from where the auto industry was just a few years ago. ”It’s truly remarkable that the auto industry is finishing off its best year ever just six years after the depths of the Great Recession,” says Jessica Caldwell, director of industry analysis at Edmunds.com.

On Tuesday, the big three automakers — Fiat Chrysler, Ford and General Motors — all posted robust, rising December sales figures. Still, results for both Fiat Chrysler and Ford came in shy of high expectations from analysts.

In the last month of the year, Fiat Chrysler said sales rose 13% to 217,527 vehicles, making the month its best December in its 90-year history. Still, the results came in shy of the 229,517 vehicle sales predicted by Edmunds.com.

Robust demand for Jeeps continued to bolster Fiat Chrysler’s results, with sales surging 42 percent during the month. Dodge sales also rose 6% and Ram sales increased 4 percent, while Chrysler sales dropped 21 percent.

Ford sales jumped 8 percent to 239,242 vehicles in December, helping bring home its best annual sales results in nine years. Edmunds.com analysts were looking for 243,590 vehicles to be sold.

Trucks and utilities continued to drive Ford’s results, rising 13%, while car sales fell 4 percent. The automaker said it sold 85,000 of its popular F-Series during the month, which was a 15 percent rise year-over-year.

General Motors sales rose 6 percent to 290,230 vehicles, above the 287,203 vehicles Edmunds.com analysts had projected. Chevrolet , which is GM’s biggest brand, enjoyed particularly strong sales. Chevy crossover sales jumped 30% and truck sales rose 10 percent.

The industry’s sales growth is expected to continue in 2016, for its seventh consecutive year, as shoppers continue to shop for new rides.

“The U.S. economy continues to expand and the most important factors that drive demand for new vehicles are in place,” said Mustafa Mohatarem, GM’s chief economist. “The single most important pieces are the ongoing gains in employment and the growth in personal income. When you add in lower energy prices, it’s easy to see why consumer spending is strong.”

Shares of all three automakers were in the red Tuesday despite the rising sales figures. Fiat Chrysler edged down 0.1%, Ford slid 1.6 percent and GM fell 2.6 percent. The automakers had mixed results in the stock market last year, too, with shares of Fiat Chrysler soaring 20 percent while GM slid 2 percent and Ford lost 8 percent.

Posted in Auto Industry NewsComments (0)

Chrysler Posts a 3% Drop in Profit After $90 Million Fine

DETROIT —  Fiat Chrysler Automobiles said on Wednesday that profits at its American subsidiary fell 3 percent in the second quarter, primarily because of a record civil penalty against the company for violating federal safety laws, reports the New York Times.

The subsidiary, which encompasses operations of the former Detroit automaker Chrysler, reported net income of $598 million for the quarter compared with $619 million in the same period a year ago.

The decrease was attributed to a charge of $90 million for fines agreed to with federal regulators, as well as a $71 million charge to extinguish debt.

Last week, Fiat Chrysler signed a consent order with the National Highway Traffic Safety Administration to resolve the government’s wide-ranging investigation of 23 vehicle recalls covering more than 11 million vehicles.

The order called for a cash fine of $70 million and a commitment by the company to spend $20 million to satisfy safety performance requirements, including buying back defective vehicles.

Fiat Chrysler could be assessed another $15 million in penalties if further safety violations are discovered by an independent monitor, according to the order.

Last week, the company’s chief executive, Sergio Marchionne, said the Chrysler subsidiary had committed to overhaul its safety practices and recall procedures. “We need to comply 100 percent of the time,” he said.

While its results dropped from a year ago, Chrysler remains the Italian-American automaker’s most profitable business unit.

Revenue for the subsidiary, which include Chrysler’s North American and international operations, rose 11 percent during the quarter, to $22.6 billion.

Its worldwide vehicle sales increased 5 percent, to 780,000, in the quarter, from a year earlier. The subsidiary ended the quarter with a United States market share of 12.4 percent, which represented a slight increase from the second quarter in 2014.

The subsidiary also improved its cash position during the period, ending the quarter with net cash — excluding financial liabilities — of $2.1 billion. At the end of the first quarter, it had about $1.2 billion

Posted in Auto Industry NewsComments (0)

Fiat Chrysler Profit Increases 69%, Most of It From North America

DETROIT —  Fiat Chrysler Automobiles on Thursday reported a big gain in second-quarter profits and assured investors that its recent record-setting penalty for safety violations would not slow its earnings momentum, reports the New York Times.

The Italian-American automaker said that its net income climbed 69 percent in the quarter to 333 million euros — about $363 million — compared with the period a year ago.

The company’s chief executive, Sergio Marchionne, attributed the gains to healthier profit margins in the North American market and surging sales of Jeep sport utility vehicles.

Mr. Marchionne told analysts that he did not expect any long-term financial impact from the company’s consent order on safety violations reached with the National Highway Traffic Safety Administration.

On Sunday, the agency imposed civil penalties of up to $105 million on Fiat Chrysler for failing to complete recalls in a timely manner and to provide proper notification to consumers, dealers and regulators.

The consent order followed an investigation by regulators into 23 recalls covering more than 11 million vehicles.

Mr. Marchionne said the company was committed to improving its safety practices, particularly in its communications with consumers. “There are no excuses,” he said in a conference call with analysts.

He added that the penalties imposed by the safety agency should not hinder the automaker’s performance.

Fiat Chrysler will pay a $70 million cash fine and is obligated to spend $20 million on a variety of performance issues, including repurchasing Ram pickups with faulty suspensions that can cause drivers to lose control of the vehicles.

Fiat Chrysler could be assessed an additional $15 million in penalties if more safety violations are found by an independent monitor. “Neither us nor N.H.T.S.A. want to see that amount paid,” Mr. Marchionne said.

With its safety issues resolved for now, the company can focus on its growth plans, which include expanding global Jeep sales and revitalizing its Alfa Romeo luxury brand.

Fiat Chrysler revenue in the second quarter rose 25 percent from a year ago to €29.2 billion, or about $31.8 billion. In North America, its profit margins more than doubled, to nearly 8 percent.

General Motors and Ford Motor reported even higher profit margins in North America, where new vehicle sales are reaching their highest levels in several years.

“We are still far away from where our other two competitors are,” Mr. Marchionne said. “It is an indication of the amount of work that needs to be done by F.C.A. in the United States.”

The second-quarter results impressed investors, as Fiat Chrysler’s stock gained 7.3 percent to close at $15.58 in trading on Thursday on the New York Stock Exchange.

The company has several big tasks, including a public stock offering for its Ferrari luxury sports car division.

But on a possible merger between Fiat Chrysler and another automaker, Mr. Marchionne was somewhat circumspect.

In his previous conference call with analysts after first-quarter earnings, Mr. Marchionne created a stir by calling for carmakers to find merger partners to contain costs for new products and technology.

It was later revealed that he had tried to start merger talks with G.M. in March, but his overture was rejected.

On Thursday, he said he still believed mergers made sense for the overall industry. But he did not tip his hand on whether Fiat Chrysler was engaging in such talks with other car companies.

“You need to let us work on this, and I’m sure we will come up with the right answer,” he said.

Posted in Auto Industry NewsComments (0)

Detroit Three, UAW Will Square Off Over Wages, U.S. Jobs

The Big Three U.S. automakers and the United Auto Workers union will kick off bargaining Monday for new contracts that would set how much more robust, post-recession profits the industry shares with workers, and determine union costs to win more U.S. jobs, reports Reuters.

UAW leaders said they will insist on raises for 139,000 blue-collar workers at U.S. plants run by Ford Motor Co, General Motors Co. and Fiat Chrysler Automobiles after rounds of bargaining in 2007 and 2011 that led to substantial concessions. Union leaders and chief executives of the Detroit Three are scheduled to stage public handshakes next week, starting Monday. Their current contracts expire Sept. 14.

Union President Dennis Williams has said he wants to narrow the gap between veteran workers, who make about $28 an hour, and employees hired since 2011 with a “second tier” hourly wage of $16 to $19.

Labor accounts for a declining share of a vehicle’s cost, said Sean McAlinden, chief economist at the Center for Automotive Research, noting that the three automakers’ costs for UAW members fell to 5.7 percent last year from 11.5 percent in 2007.

But executives at the Detroit Three said their ability to add more UAW jobs depends on offsetting increases in wages or benefits with gains in productivity. Health care costs promise to be a central issue, as the automakers face paying a so-called “Cadillac tax” of 40 percent on rich UAW medical plans starting in 2018.

John Fleming, head of Ford manufacturing, said the company expects to boost productivity by 6 to 7 percent in all its factories. “Every dollar that we don’t take out is a dollar that your competitor can spend on making their vehicles more competitive,” he said.

The automakers’ leverage is strengthened by the union’s failure to organize auto plants in the southern United States operated by Asian and European manufacturers, and by the growing capability of Mexican auto workers and suppliers to build cars for the U.S. market.

Ford jolted the union on Thursday by announcing plans to move production of its small Focus and C-max hybrid cars out of a factory in suburban Detroit by 2018. The company said the Wayne, Michigan, factory’s future would be a subject of bargaining in this round of talks.

Posted in Auto Industry NewsComments (0)

Page 1 of 812345...Last »