2007 Volkswagen Beetle Convertible No Reserve 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.

Did Lexus make a BMW? Or did BMW make a Lexus? This and other 2017 surprises

It's that time of year again. The calendar is about to reach its end, Star Trek Cats 2018 is about to take its place, and I'm reflecting about all the cars that graced my driveway this year or summoned me to exotic places. You know, like Stuttgart or Phoenix. In 2017, I drove at least 57, and as I perused the list of them, I started to notice a common refrain: "This car surprised me." Most were pleasant surprises, but there were a few head scratchers and facepalms for good measure. In both cases, it was generally the result of car companies seemingly trying to break out of an existing mold. Nowhere was that more apparent than the pair of Lexuses slathered in Infrared paint: The LS 500 that left me this week and the LC 500 that was my favorite car of 2017. Though Lexus has been trying to shake its crusty, gold-packaged reputation for some time now, its efforts always seemed like an old man choosing Hollister to redo his wardrobe after realizing it hasn't been updated since 1987. I fell in love with the LC, genuinely floored by its near-perfect take on the GT. It's characterful in sound, appearance and tactility. It was at home in the city, in the mountain and on the open road. It was both comfortable and thrilling, and after driving the mechanically related LS 500, I can report that the LC's talents aren't an outlier. The LS 500's turbo V6 may make different noises than the LC's naturally aspirated V8, but it nevertheless invigorates the cabin when the car is placed in Sport+ mode. The steering is truly communicative, body motions are kept in miraculous check, and I absolutely forgot I was in an enormous luxury limo ... and a Lexus one at that. It was everything that the BMW 530e was not. I drove that on the exact same roads and was utterly bored the entire time. Generally doughy, lifeless steering, more distant than Planet 9. And no, the plug-in hybrid powertrain had nothing to do with that. At least it shouldn't. The Porsche Panamera S e-Hybrid I also drove this year proves that, as do the Hyundai Ioniqs, which are surprisingly adept and fun little cars regardless of what powers their wheels (Hyundai + hybrid = fun really blew me away). I would drive that Lexus LS F Sport over the BMW 5 Series any day of the week, which seems like a shocking thing to say in relation to either car. While Lexus is seemingly breaking out of its old crusty mold, BMW seems to be climbing into one.

Volkswagen Golf Wagon caught completely uncovered

Without a lot of information to go with them, our camera-toting spies have captured some new images of a Volkswagen Golf wagon variant that is almost completely undisguised. In fact, the one piece of camouflage on the tidy wagon would probably have gone unnoticed to most casual viewers. Look closely at the rear three-quarter view of the car and you'll notice that the apparent taillight clusters are actually fakes - the outline of the real units is faintly visible behind the blue bodywork and the sticker-like fake taillights.
It's a good guess then, that this Golf wagon (called a Golf Kombi by our spy photographer) is a prototype that's pretty far along in the development cycle for Volkswagen. We can't be sure what impact this will have on the company's small wagon offering here in the US, but we'd be pretty surprised if something very like this didn't end up as the next Jetta SportWagen. We might well have more information on that front, after we visit Geneva next week.