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Automakers tussle over owners of 'orphan' makes

When General Motors put down several of its brands in recent years, it also let loose thousands of brand-loyal customers who will eventually need another car.
R.L. Polk Associates estimates there are more than 18 million cars from 16 discontinued makes on the road today. Those "orphan owners" have sales-hungry competitors seeing dollar signs. GM is offering Saturn owners $1,000 cash toward a Chevy Cruze, Cadillac CTS or a GMC Acadia. Ford is giving its Mercury lease customers a chance to get out of their contracts with no early-termination penalty and offering to waive six remaining payments if they drive off in a Ford or Lincoln.
Edmunds.com research shows the efforts are paying off somewhat for GM, with 39 percent of Pontiac owners, 37 percent of Hummer owners and 31 percent of Saturn owners taking delivery of another GM-branded vehicle. But that leaves as much as 69 percent of owners going elsewhere. Ford, Honda and Toyota seem to be attracting many former GM owners.

Army's first surplus Humvee auction brings in $744,000

The first public auction of surplus US Army Humvees has came and went, and to call it a rousing success would be a major understatement. Auctioneers IronPlanet Inc., unloaded 25 trucks on behalf of the Department of Defense's Defense Logistics Agency. Bidding started at a meager $10,000 for the privilege of driving home in America's most iconic military vehicle. With $744,000 changing hands, the average Humvee crossed the block for just under $30,000, while the highest winning bid was $41,000, for a 1994 vintage, and the lowest winning price was $21,500, Military.com reports. If those prices seem a smidge low, it's because they are. A quick check of AutoTrader revealed that, nationwide, the cheapest Hummer H1 was up for grabs for $31,300, while the most expensive, a 2006 H1 Alpha, was going for $149,995. Of course, there's a good reason you might want to consider the civilian model, as Military.com explains it. AM General, the Humvee's manufacturer, is pretty unequivocal on its website, saying, "The Humvee was designed for a military mission and was not designed to meet civilian safety standards." It gets worse, though. "AM General does not endorse nor support the sale of these military vehicles to the general public or private entities. AM General further opposes any use of these military vehicles by individuals or entities outside of the military context for which the vehicles are designed. AM General does not sell the military vehicle or service parts for the military vehicle to the general public." Somehow, though, we doubt that will stop those that are truly interested in the brutish military vehicle. The 25 Humvees sold in this first auction had simply been gathering dust at Utah's Hill Air Force Base, according to Military.com. Considering this auction's success, and the fact that there are apparently 4,000 more surplus Humvees sitting about, we doubt this will be the last time the military turns to auction houses to unload inventory. News Source: Military.comImage Credit: SFC Michel Sauret / US Army Hummer Auctions SUV Military Off-Road Vehicles humvee

GM raises 2023 guidance on strong sales, higher profits

General Motors beat first-quarter profit estimates and raised its full-year earnings and cash-flow guidance after vehicle demand at the start of the year surpassed expectations. Its shares rose in premarket trading. GM made $2.21 a share in adjusted profit in the first quarter, compared to a consensus forecast of $1.72 a share. Revenue rose 11% to $39.99 billion, it said Tuesday, which was more than the $39.24 billion analysts expected. The stronger results stem from rising sales in the US, even in the face of higher interest rates and inflation. GM executives said demand was strong enough to revise 2023 guidance upward, boosting profit estimates for the year by $500 million to between $11 billion and $13 billion. “We did it with strong production and inventory discipline and consistent pricing,” GM Chief Financial Officer Paul Jacobson said on a call with journalists. “All in all, weÂ’re feeling confident about 2023.” The Detroit automaker raised per-share full-year guidance to between $6.35 and $7.35, up from $6 to $7 a share, and said free cash flow would also increase by $500 million to a range of $5.5 billion to $7.5 billion.  GMÂ’s shares pared a gain of as much as 4.4% before the start of regular trading Tuesday, rising 3.5% to $35.50 as of 6:55 a.m. in New York. The stock was up 1.9% for the year as of the close on Monday.  North American Strength The automakerÂ’s sales were particularly strong in North America, where first-quarter earnings rose before interest and taxes rose to $3.6 billion. Vehicle sales rose 18% to 707,000 in the region. Jacobson said the company originally expected to sell 15 million vehicles in the US this year, slightly less than the 15.5 million annualized rate automakers foresaw in the first quarter. North American demand was enough to offset a weak performance in China, GMÂ’s second-largest market. The automaker continues to struggle in the country, where its vehicle sales fell 25% to 462,000 vehicles in the quarter. Profits from its joint ventures in the market slumped 65% to $83 million.  The market has struggled overall in the wake of Covid-19 restrictions and foreign automakers have had to overcome a growing preference for Chinese brands by competing on price, squeezing profit margins. The situation in China probably wonÂ’t significantly improve until the second half of the year, according to Jacobson. GM remains on target to sell 150,000 electric vehicles this year, the CFO said.