Autoblog

GM currently owns about 13% of the small car market. With demand for small vehicles increasing with the price of black gold, GM is out to increase that market share. Nevertheless, even if it doesn't increase its share, it plans to make more money off of each small car sold. How? By raising the price, naturally.

The plan is simple: make better small cars, charge more for them. The upcoming Cruze could run you a few thousand more than the outgoing Cobalt, for instance. The test is to see whether cars like the Cruze will be worth the premium. GM Global Design Chief Ed Welburn said, "In North America, we never did a good small car." The General plans to bury that piece of its history... but it's going to charge you, the consumer, for the funeral.

The idea that GM can lasso the small car market while charging a premium, at the same time as slashes its marketing budget by $1.5 billion, takes some effort to swallow. One analyst said that demand for small cars will outstrip supply, so GM could get away with it. However, until we see proof of small GM cars that take bats to the established competition, we'll have to give this plan a "Hmmm."

[Source: Automotive News, subs. req'd]

Sluggish market conditions in the United States are the reason Toyota Motor Corp. is slowing down the launch of its new Highlander crossover plant in Tupelo, Mississippi. Originally scheduled to open in late 2009 with production at 150,000 vehicles per year, Toyota will instead begin production in May 2010 with an expected reduced annual output of 120,000 units a year. Of course, that number will increase if U.S. market conditions improve.

While the slowing economy is a leading reason for the delay, Toyota officials also confirmed that they are facing difficulty hiring skilled labor for the Tupelo project. They are now recruiting from around the country to fill positions in maintenance, along with tool and die engineers. Toyota expects to employ 2,000 workers at Tupelo. This isn't the first time Toyota has faced recruiting issues. When they opened San Antonio in 2004 and 2005, they found themselves challenged to staff the Tundra pickup plant. The Texas plant recently made headlines when Toyota slowed production of the Tundra. For the fiscal year, Toyota is forecasting operating profits to decline by 29-percent.

[Source: Automotive News, subs. req'd]

Isn't this a scary time in the auto business? When most of the big players report only on their ability to cut losses instead of make profits? Or how many workers they have successfully "reduced their workforce by" (read: let go)? That's the good news! Will we ever see a consistent return to profitability in the business of selling cars?

And so, we bring you yet another announcement about reduced losses. Aided by a weaker yen and increased sales in Japan and North America, Japan's troubled Mitsubishi Motors on Monday reported a narrower net loss of 16.1 billion yen ($137 million) for fiscal first-half of '06 compared to a loss of 63.8 billion yen ($544 million) during the same period in '05. Sticking to its forecast to return to profitability for the full fiscal year in 2007, the company also said on Monday that it would reduce its unit sales volume target down 86,000 vehicles to 1,322,000, reflecting expectations of fewer sales in parts of Asia, while sales are expected to increase in North American and Europe.

Can Mitsubishi return to profitability in 2007? They do have some decent new products in the market with more on the way. Only time will tell.

[Source: Detroit News]

When speaking on behalf of a group, it's in everyone's best interest to have a common 'message' agreed upon before addressing others. This didn't seem to be the case yesterday, when rumors of DaimlerChrysler selling their latter, less profitable, half began circulating.

DaimlerChrysler's CFO, Bobo Uebber was quoted during a conference call saying that, "We need to safeguard sustainable profitability for the Chrysler Group and for Daimler-Chrysler. We don't exclude anything here."

As the day wore on, media speculation grew along with the automaker's stock price, prompting a statement from Hartmut Schick, Senior VP of Corporate Communications, which said in no uncertain terms that Chrysler is "not for sale."

The Auburn-Hills, MI-based group expressed its dissatisfaction with the results as well, but not quite as drastically as the comments made from Germany. Chrysler's CEO, Tom LaSorda made it clear that, although the third-quarter results were unacceptable, changes will be made to address inventory gluts and to lower costs.

[Source: Detroit News]

Read the press release after the jump.

The good news for auto insurance companies is that claims have dropped 15% in the last four years, with the result of a similarly healthy bump in profit. The bad news, at least for an industry that depends on the reliable statistical prediction of trends, is that there is no clear reason for the reduction in payouts for dented sheetmetal and bodily injury.

While modern technology can help prevent collisions, it likely doesn't account for the drop in this particular five-year period (but, check back in another half-decade). More likely is that drivers in the 45-64 age group are the safest on the road, and the average driver continues to get older as the Baby Boomers age. Additionally, it's thought that many drivers opt not to report accidents that don't involve any injuries, and contemporary safety technology may account for an increased number of people who walk away from an accident without so much as a scratch.

One thing seems certain - insurance companies may be making more money from this trend, but it's not being reflected in the average insurance premium. What a surprise, eh?

[Source: Chicago Business via Instapundit]

Presumably, the fact that "target letters" have been sent to seven ex-Delphi executives by the Securities and Exchange Commission is not a welcome sign for those on the receiving end of that particular communiqué. It's likely that the letters are a step towards civil charges being filed against the individuals for their roles in the accounting scandal that led Delphi to dramatically restate several years of earnings, with an adjustment of over $300M being made to the company's profits prior to its October bankruptcy filing. At this time, it's not clear exactly who is being targeted by the SEC.

The Justice Department may soon be joining the case to toss in some criminal penalties, and several shareholders and retirees have filed their own civil lawsuits against Delphi.

[Source: Detroit News]