1972 Vw Beetle Power Stick on 2040-cars

Auto blog

Rising aluminum costs cut into Ford's profit

When Ford reports fourth-quarter results on Wednesday afternoon, it is expected to fret that rising metals costs have cut into profits, even as rivals say they have the problem under control. Aluminum prices have risen 20 percent in the last year and nearly 11 percent since Dec. 11. Steel prices have risen just over 9 percent in the last year. Ford uses more aluminum in its vehicles than its rivals. Aluminum is lighter but far more expensive than steel, closing at $2,229 per tonne on Tuesday. U.S. steel futures closed at $677 per ton (0.91 metric tonnes). Republican U.S. President Donald Trump's administration is weighing whether to impose tariffs on imported steel and aluminum, which could push prices even higher. Ford gave a disappointing earnings estimate for 2017 and 2018 last week, saying the higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Ford shares took a dive after the announcement. Ford Chief Financial Officer Bob Shanks told analysts at a conference in Detroit last week that while the company benefited from low commodity prices in 2016, rising steel prices were now the main cause of higher costs, followed by aluminum. Shanks said the automaker at times relies on foreign currencies as a "natural hedge" for some commodities but those are now going in the opposite direction, so they are not working. A Ford spokesman added that the automaker also uses a mix of contracts, hedges and indexed buying. Industry analysts point to the spike in aluminum versus steel prices as a plausible reason for Ford's problems, especially since it uses far more of the expensive metal than other major automakers. "When you look at Ford in the context of the other automakers, aluminum drives a lot of their volume and I think that is the cause" of their rising costs, said Jeff Schuster, senior vice president of forecasting at auto consultancy LMC Automotive. Other major automakers say rising commodity costs are not much of a problem. At last week's Detroit auto show, Fiat Chrysler Automobiles NV's Chief Executive Officer Sergio Marchionne reiterated its earnings guidance for 2018 and held forth on a number of topics, but did not mention metals prices. General Motors Co gave a well-received profit outlook last week and did not mention the subject. "We view changes in raw material costs as something that is manageable," a GM spokesman said in an email.

Volkswagen CrossBlue Coupe is a green fun-machine we want to drive

Think back to January's Detroit Auto Show. Those of you that are fans of the Volkswagen brand, impressed with green technology or simply fall into the "diesel geek" category, will almost certainly remember VW's CrossBlue concept with its diesel/electric hybrid powertrain, seating for seven, and somewhat awkward crossover styling. It was an impressive piece of future tech, to be sure, though it left something to be desired in the, well, desirability department.
Here in Shanghai, VW has brought along a CrossBlue Coupe concept that would seem to include most of the goodness of the original, but flavored with more sport and style this time around.
The CrossBlue Coupe makes use of the same electric drive components as the larger three-row concept: two electric motors (front and rear) powered by a 9.8-kWh lithium-ion battery. However, where the original concept made use of a TDI four-cylinder, the Coupe substitutes a 295-horsepower, direct-injection, gasoline-burning V6.

Volkswagen could outsell GM in China for the first time in nine years

As of the end of November, Volkswagen had sold 70,000 more cars than General Motors in China in 2013, making it appear inevitable that VW will outsell GM there. The feat would return the German brand to the top of chart in China for the first time in nine years, but even the second-place getter won't be complaining too loudly: both automakers sold more than three million vehicles in a market pegged to hit 16 million sales this year.
Volkswagen said it could have sold more cars if it had had more production capacity in China. The arrival of a new-to-China Audi A4, a China-built A3 sedan, the VW Bora and Skoda Octavia, as well as an $18.2-billion-euro investment in the country to construct new factories, means VW should see its numbers grow in 2014. GM's lineup is expanding next year, too, adding four Chevrolet nameplates and two vehicles to its Baojun brand as it tries to get to five million in sales by 2015.
Among other automakers, Ford benefited from good product and woes for Japanese automakers over a territorial dispute with China, outselling Toyota by almost 32,000 units through the end of November. The Ford Focus is China's best-selling vehicle so far this year.