Autoblog

More car dealers capping finance and insurance products amidst ethics concerns

Zach Bowman — Fri, 28 Dec 2012 11:01:00 EST

Automotive News reports a larger number of dealers are scaling back the markup on their finance and insurance products as well as aftermarket service plans in an effort to avoid the ire of regulators. There are no industry numbers on how many dealers use self-imposed caps on how much they can charge their customers for these services, but Automotive News polled dealers in an independent survey. Of those who responded, around two-thirds say they use caps, with two-thirds of those who do attributing the restrictions to ethical concerns. Gouging a customer invariably has a negative impact on store reputation, and dealers aren't keen to encourage an increase in government oversight.

Some dealers can mark up financing and insurance products by 100 percent, but most prefer to use sales volume to boost their bottom line. Doing so builds consistency and credibility among new buyers by eschewing large discounts or markups. Even so, several of the respondents in the AN survey reported record finance and insurance revenue through the third quarter of 2012, with dealers seeing over $1,200 per vehicle.

More car dealers capping finance and insurance products amidst ethics concerns originally appeared on Autoblog on Fri, 28 Dec 2012 11:01:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Opel board approves new turnaround plan

Chris Tutor — Sun, 01 Jul 2012 12:03:00 EST

Filed under: Europe, Marketing/Advertising, Earnings/Financials, Opel, Peugeot

's supervisory board has approved changes in the company it hopes revitalizes the brand.

The most important element is "massive" investments in new products over a four year period. The division also plans to increase exports and cut materials and development costs. The Opel board said it expects to also see savings from GM's partnership with Peugeot-Cetroen.

The board's press release was short on details about how the plan would work or how it would be implemented.

Stephen Girsky, Vice-Chairman, General Motors and Chairman, Opel Supervisory Board, said in the statement, "The plan we approved today paves the way for Opel's strong future. GM stands behind Opel, and encourages both its management and employee representatives to continue working together to better satisfy customers and return quickly to profitability."

Read the full (though very short) press release below.

Continue reading Opel board approves new turnaround plan

Opel board approves new turnaround plan originally appeared on Autoblog on Sun, 01 Jul 2012 12:03:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

More Americans paying their car loans on time

Scott Burgess — Thu, 24 May 2012 14:31:00 EST

Filed under: Car Buying, Earnings/Financials

Nearly everyone in America with a car loan is making the payment on time, the Detroit Free Press is reporting.

A scant .36 percent of people with a car loan are 60 or more days behind on making their payment, according to a TransUnion report looking at the January through March quarter of auto loan payments. That means more than 99-percent of customers borrowing cash for cars are on time.

The tiny percentage, which represents a drop of about 27 percent year-over-year is the lowest since TransUnion started tracking it in 1999.

The fall in loan delinquency, however, may not be great news for banks overall. TransUnion attributes some of the on-time payments to recession weary consumers placing a priority on their car payment while foregoing payments on credit cards and underwater homes.

More Americans paying their car loans on time originally appeared on Autoblog on Thu, 24 May 2012 14:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Union takes hard stance against German automakers

Scott Burgess — Tue, 22 May 2012 18:02:00 EST

Filed under: Europe, BMW, GM, Mercedes-Benz, Porsche, Opel, UAW/Unions

Anyone considering a German-built car might want to buy it now. It could be a long summer.

Europe's largest industrial union, IG Metall, is taking a tough stance against some job rules German carmakers want to enforce, potentially creating the possibility of a strike, according to TheDetroitBureau.com.

"Talks are resuming, but so far five rounds of negotiations have produced little movement and a round of warning strikes earlier this month at several companies, including Porsche, BMW and Daimler, suggest that the powerful union is gearing up for a confrontation," the Bureau reported earlier this week.

The union wants a 6.5-percent pay raise for its workers and a limit in how many temporary workers the carmakers can use. Around the world, carmakers use temporary workers as way to increase production without increasing union membership and save money.

The union was offered a 3-percent pay raise, but that offer was rejected. Currently, German auto workers are some of the highest paid in the automotive world. And while parts of Europe remain in economic turmoil, Germany has shown signs of slow growth, which might be one reason some government officials are backing IG Metall.

All of this doesn't bode well for General Motors' German-based Opel. GM was hoping to get some concessions from the unions representing its workers as part of its restructuring. But if other carmakers are paying more for its workers, it's unlikely the troubled Opel would be able to squeeze much of its people.

Union takes hard stance against German automakers originally appeared on Autoblog on Tue, 22 May 2012 18:02:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

GM's Liquidation Motors stock reportedly still worth $370M, can't be sold short

Jonathon Ramsey — Wed, 04 Nov 2009 08:40:00 EST

Filed under: Government/Legal, GM, Earnings/Financials

When General Motors entered into Chapter 11 bankruptcy over the summer, its bad assets were moved into a firm called Motors Liquidation Company (MLC). That company was capitalized with more than 600 million shares that were meant to be worthless; however, quite the opposite has happened: with its shares priced at $0.60 per, MLC now has a market cap of $370 million. How did that happen?

Investors engaged in "naked short-selling" is how it happened. Short sellers usually procure an actual 'tangible' stock from a broker or investment house - 'tangible' meaning a share unit comprising the finite number of a company's total shares - as collateral when they take a short position. The naked short seller doesn't borrow any shares, taking a position before it can be determined if there are any shares available. This allows them to essentially create a position that isn't beholden to the ideal of a "structured" market.

Earlier this year the SEC put the kibosh on naked short selling, and required investors who had done it to get the tangible shares they need to hold their position. Since there are fewer shares to be had, and those naked traders are trying to absorb anything available to cover their positions, the price has yet to decline. Quite simply, no one can make money off of it.

Well, except for the holders of new GM shares. The SEC regulations also called on naked short sellers to close out their positions if they couldn't get the tangible stocks to cover. The investors who can't get actual shares to borrow are having to buy stock from "new" GM shareholders - at much higher prices. Eventually MLC shares will be worth zilch. Until then, the wacky world of finance reigns...

[Source: New York Times]

GM's Liquidation Motors stock reportedly still worth $370M, can't be sold short originally appeared on Autoblog on Wed, 04 Nov 2009 08:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

REPORT: Major obstacle cleared as Swedish government to guarantee $615M EIB loan for Saab

Jonathon Ramsey — Tue, 06 Oct 2009 10:58:00 EST

Filed under: Europe, Government/Legal, Saab

2010 Saab 9-5 - Click above for high-res image gallery

A major hurdle in Saab's transfer to the homegrown hands of Sweden's Koenigsegg has been surmounted: the Swedish government has agreed to guarantee a 4.3 billion kroner ($615M U.S.) loan from the European Investment Bank to the Koenigsegg consortium. That represents the final funding the maker of the CCX needs in order to compete the financing of the deal.

The next hurdle is for the European Investment Bank to consent to give Koenigsegg the money. A Swedish government representative said he hoped the EIB would decide before the end of the month. If that happens and things goes favorably, Koenigsegg may still get the deal done on its original timeline, the end of the year.

Gallery: 2010 Saab 9-5

[Source: Reuters]

REPORT: Major obstacle cleared as Swedish government to guarantee $615M EIB loan for Saab originally appeared on Autoblog on Tue, 06 Oct 2009 10:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Chrysler Financial scores $24B line of credit

Jonathon Ramsey — Mon, 04 Aug 2008 10:32:00 EST

Filed under: Chrysler, Earnings/Financials

It's up and down, but nowhere near out for Chrysler, LLC. The Big Three's smallest sibling says that it's ahead of internal estimates and has posted earnings in excess of one billion for the first half of '08. True, the company also posted a $510 million loss in Q1 according to minority shareholder Daimler. And since Chrysler is privately held, it doesn't need to tell anyone whether these earnings put it in the red or black.

But whatever's on the books was good enough to convince lenders to grant Chrysler's financial arm a $24 billion line of credit. Said a Chrysler spokesman, the money will be used to "support our dealers and their retail customers." The pentastar just got out of the leasing business, so the influx of credit will keep the financial arm doing what it needs to do as all those remaining lease vehicles come back with empty tanks and bottomed-out residuals. And believe it or not, those are all good things.

[Source: Detroit News]

Chrysler Financial scores $24B line of credit originally appeared on Autoblog on Mon, 04 Aug 2008 10:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Way Forward 2.0 today?

Erin Mays — Wed, 13 Sep 2006 08:08:00 EST

Filed under: Hirings/Firings/Layoffs, Plants/Manufacturing, Ford, Earnings/Financials

Now that Ford's got a new captain at the helm, it's full steam ahead for the "Way Forward." According to Reuters, Ford's board of directors will be instituting the second stage of its plan and is expected to release an overview of the strategy later today. Some of the proposals to be announced include a 30 percent reduction in white collar workers and a new pricing strategy, with more details to follow over the course of the month.

The proposals come on the heels of the first wave of "Way Forward" transformations, including plans to reduce the company's hourly workforce by 30,000 jobs and close 12 plants by 2012. The Way Forward plan so far has yet to produce the results Ford was hoping for, according to critics and analysts.

[Source: Reuters]

Way Forward 2.0 today? originally appeared on Autoblog on Wed, 13 Sep 2006 08:08:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Bad credit? No credit? Ford doesn't care with new 0-72 loans

Frank Filipponio — Wed, 23 Aug 2006 14:24:00 EST

Filed under: Car Buying, Ford, Lincoln, Mercury, Earnings/Financials

Facing the ignominy of huge dealer inventory and falling behind Toyota for 2nd place in July sales, Ford has decided to let anybody with a pulse finance one of its cars. Well, you do have to have some credit, but Ford is lowering the bar in this new incentive drive to include buyers with sub-prime credit ratings. By allowing customers the option of 0% financing for up to 72 months on every Ford, Lincoln, and Mercury (except the Ford GT and certain F-Series pickups), Ford hopes to jump start a stagnant summer and reclaim 2nd place. Incentives have already started and will continue through Labor Day.

[Source: Automotive News - sub required]

Bad credit? No credit? Ford doesn't care with new 0-72 loans originally appeared on Autoblog on Wed, 23 Aug 2006 14:24:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Yen rate gives Japanese automakers unfair advantage, Chrysler's LaSorda says

Erin Mays — Sat, 03 Jun 2006 15:04:00 EST

Filed under: Trends, Government/Legal, Japan, Chrysler, Earnings/Financials

At the Mackinac Policy Conference in Michigan on Thursday, Chrysler president and CEO Tom LaSorda said he plans to call on George W. Bush to confront Japan about an artificially low yen rate that he maintains unfairly allows Japanese automakers up to a $3,000 advantage per vehicle over their American counterparts. LaSorda said that he, Rick Wagoner and Bill Ford plan to raise this topic, along with health care and energy policy, with President Bush in a meeting scheduled for later this month.

LaSorda drew attention to the 1.8 million Japanese vehicles that are still being imported into the United States, and although this number has decreased since years past, parts imported from Japan continue to exacerbate the issue.

[Source: Reuters]

Yen rate gives Japanese automakers unfair advantage, Chrysler's LaSorda says originally appeared on Autoblog on Sat, 03 Jun 2006 15:04:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments