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Auto execs surveyed say VW, BMW most likely to grow

A new survey of top global automotive executives indicates both Volkswagen and BMW are the most likely to grow their market share over the next five years.
Tax advisory firm KPMG LLP has released its 14th annual Global Automotive Executive Survey, which includes responses from over 200 executives. A total of 81 percent of respondents said they expect to see Volkswagen make gains, compared to 70 percent last year. BMW, meanwhile, saw 70 percent of those surveyed say they believe the company will increase its market share. That's a jump of 7 percentage points over last year. This is the first time in the history of the survey that BMW has claimed the second-place spot.
Meanwhile, Hyundai has seen its perceived market share potential slacken for the third year in a row. Around 61 percent of those surveyed predicted gains for Hyundai, down from 63 in 2012. Toyota also has a surprising year, but for just the opposite reason. While the manufacturer had slipped in ranking since 2011, it enjoyed the largest increase of any company in the 2013 survey, jumping to 68 percent from 44 percent last year.

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.

VW recognizes second union at Chattanooga plant

The ongoing story of organizing workers at Volkswagen's factory in Chattanooga, TN, continues to get more complicated. Following an independent audit, the automaker has now recognized a second union at the plant called the American Council of Employees. The group was founded there last year to offer an alternative to the United Auto Workers. "I'm not anti-union. I understand that a properly run union can benefit people. We will be that union," Sean Moss, president of the ACE, said to Reuters, according to Automotive News. The group claims to represent at least 15 percent of the workers at the plant. Acceptance of the ACE has led to an interesting situation in Chattanooga because VW also recognized the UAW at the factory in December 2014, and the group has claimed to represent at least 45 percent of workers there. According to Automotive News, each union has access to management, but the UAW has more because of its larger contingent of supporters. However, neither organization has a collective bargaining agreement with the automaker. Moss may have a rough time increasing support among employees at the factory. According to Automotive News, many anti-UAW workers there are completely against unions in general. Getting these folks to join his group isn't an easy task. The UAW has been working to fully represent the VW factory for years. However, the group lost a vote to do so in 2014. It eventually created a union local there to try to build support. All of the effort comes ahead of a $900 million plant expansion to add about 2,000 jobs and build a new crossover in Tennessee. News Source: Automotive News - sub. req.Image Credit: Erik Schelzig / AP Photo Plants/Manufacturing UAW/Unions Volkswagen chattanooga vw chattanooga chattanooga tennessee ace