28-07-2010 22:00
+++ Nissan and HYUNDAI's forecast-beating quarterly profits may prove tough to match in the second half as robust sales in China and elsewhere start to slow. A patchy recovery in the U.S. market has become one of the biggest concerns for the auto industry, especially Japanese automakers, which rely heavily on the region for its profits. Nissan, Japan's No.3 automaker, reported its strongest quarterly operating profit in more than two years as sales surged, but it left its cautious guidance unchanged amid an increasingly murky outlook for demand. Hyundai, the world's No.5 car maker with affiliate Kia, beat forecasts with a record quarterly profit, helped by strong sales of models such as the Sonata sedan and Santa Fe sports utility, as well as weakness in the Korean won. South Korea's top automaker plans to launch a revamped version of its best-selling compact car Elantra in August and the Azera sedan later this year. "The launch of new models will only have a limited effect in the short term, and we cannot see it as a solution for worsening demand," said Jung Sangjin, an asset manager at Dongbu Securities in Seoul. Nissan, held 43 percent by Renault, has outperformed the industry's growth especially in China, the world's biggest market, so far this year thanks to a model line-up more suited to local tastes. Nissan is also aiming to boost its global market share this year with sales growth of about 8 percent to 3.8 million units, driven by the revamped Micra/March, the Juke and other new models including the much-hyped Leaf. "First-quarter results for Nissan are good and our recovery is vigorous and ahead of schedule," CEO Carlos Ghosn said in a statement. "Despite uncertainty surrounding the ongoing global economic recovery, raw material costs and exchange rate volatility, we are confident to achieve our 2010/11 forecast". Under Chief Executive and Chairman Chung Mong-Koo, Hyundai was one of the rare winners in the global financial crisis, winning market share with its lineup of cheap, cleverly marketed cars and SUVs. Both Nissan and Hyundai have done well in China, but the economy there is slowing and industry sales growth is falling. Other big markets are also struggling. "Global car sales in the second half are seen slowing slightly from the first half due to fiscal crises in some European countries, the end of governments' incentives on new car purchases and higher interest rates," Hyundai executive Vice President Lee Won-hee told investors. Hyundai reported a 71 percent rise in net profit to 1.39 trillion won ($1.17 billion) in the second quarter, compared with a consensus estimate of 1.1 trillion won. Quarterly operating profit was a record 863.3 billion won, beating forecasts. Nissan confirmed it expects operating profit to grow 12 percent to 350 billion yen ($4 billion) in the year to March, lower than the consensus forecast of 401 billion yen in a survey of 22 analysts by Thomson Reuters. April-June operating profit rose to 167.9 billion yen from 11.6 billion yen a year ago and beating the average 124.7 billion yen estimated by six analysts surveyed by Reuters. +++ The NISSAN Cube seems to be facing a similar problem with the Lexus HS250h that was recalled last month because of excess fuel leakage during government rear-impact crash tests. In documents filed on the National Highway Traffic Safety Administration's (NHTSA) website, the safety agency noted: "When the vehicle was rotated following a rear moving barrier crash test as required, the amount of fuel leakage exceeded the allowable limits". The Japanese automaker said its own tests had not result in any fuel leakage, but it will issue a voluntary recall of 46,000 U.S. market Cube vehicles built from January 30, 2009 through July 30, 2010. Nissan says its earlier tests did not show any fuel leakage, but it will issue a voluntary recall of 5,400 vehicles in Canada and 45,700 in the U.S. "Dealers will develop a special protector and attach it to the gasoline recirculation tube at the location of the filler neck connector. This service will be performed free of charge," Nissan said in a statement to the NHTSA's website. The safety recall is expected to begin on or before August 30, 2010. +++ General Motors has launched the production of a new OPEL Astra, the fourth model it is producing in Russia, at its St. Petersburg plant. Among the notable features are a heated steering wheel and a three-mode suspension system. It will be positioned in the middle-price segment. Hans-Jürgen Michel, CEO of GM's Russia unit, has declined to comment about volume projections, saying that it will depend on market conditions. He also has not ruled out the possibility of launching a second stage of production at the plant in the near future, which should help the company reach one of its strategic goals in Russia and to increase the capacity of its St. Petersburg plant to as many as 60,000 units per year. Russian analysts believe the new Astra will be in great demand among local consumers. A source at Opel Russia said that the company has already received a large number of orders for the new model. Established in November 2008, the factory started production at the beginning of 2009. Currently, GM produces three models in Russia: the Chevrolet Captiva and Cruze and the Opel Antara. +++ PORSCHE's supervisory board approved production of the 918 Spyder hybrid sports car, a model that soars to 100 kilometers an hour in 3.2 seconds and may top the Carrera GT as the manufacturer's costliest vehicle. Porsche plans to develop the vehicle at a research facility near Stuttgart, Germany, where the carmaker is based, the company said today. The car will be built at the main plant in Zuffenhausen. The 918 Spyder, one of three hybrid models Porsche presented at the Geneva Motor Show in March, has attracted at least 2,000 non-binding submissions of interest, people familiar with the matter said. Porsche needs at least 1,000 sales pledges to sign off on building the car, development chief Wolfgang Duerheimer said in April. +++ Finally, after years and years of stagnation and painfully slow sales, small cars are starting to take a foothold in the United States. Or are they? While conventional wisdom makes us believe that Americans are ready to take the downsizing plunge in the face of (or at least the threat of) high fuel prices and environmental concerns (we're all still watching the Gulf Coast, right?), it seems that reality may once again set us straight. Automotive sales watchdog Autodata has found that the gas-swilling large SUV segment is growing at a faster pace than the America's small car segment. Like statistics? Here we go: With a 19-percent jump over the first six months of 2010, large SUV sales have outpaced small cars (14 percent). Critically, they've also outpaced the overall market (17 percent). Now, before we get our feathers riled up too much, realize that sales of large SUVs still lag way behind small cars: 974,000 to 121,000 through the first half of the year. Further, large crossovers like the Buick Enclave, GMC Acadia and Lincoln MKT are included in those figures right alongside traditional behemoths like the Ford Expedition, and Infiniti QX56. We also expect that small car sales will continue to climb with new models coming to market, such as the upcoming Ford Fiesta, Mazda2 and Hyundai's new Elantra. That said, there's always going to be a demand for large and powerful SUVs that can haul people and stuff while towing a boat or camper in cool, air-conditioned comfort, and automakers will be only too happy to provide the thick-margined vehicles for their consumption. For better or for worse. +++ TOYOTA will likely be able to build the popular Prius hybrid car in the United States when it is remodeled next, a top executive said on Tuesday. Toyota had been planning to produce the world's best-selling gasoline-electric car at its new Mississippi plant, but instead decided to build the Corolla sedan after local production of that model ended with the closure of a California factory formerly co-owned with General Motors. "The main components for the Prius (such as the motor and battery) are not mature enough for local production," Executive Vice President Atsushi Niimi said. "We expect that they'll be ready with the next remodeling". Niimi, who oversees production as well as regional operations in North America and China for Toyota, said the company would decide in due course where in the United States it would make the fourth-generation Prius, expected around 2016. A more near-term concern was the pace of recovery in the U.S. market, which he said would likely be slow. "If you look at unemployment, housing, and other economic indicators there's not much good news. I think it will take time for the market to recover," he said, adding he did not share views that the U.S. market could recover to above 12 million units next year or to 14-15 million in 2012. +++ VOLVO may finally part ways with Ford by the end of next week. The Blue Oval is aiming to close its $1.8 billion sale of the Swedish automaker to Geely in as little as 10 days, though Ford has merely said that its goal is to hand over the Volvo reigns by the end of the third quarter of this year. The move to send Volvo packing is part of Ford CEO Alan Mulally's strategy to slim the company down to focus on its core brands; a scheme that seems to be working so far. In the meantime, Volvo managed to turn a profit of $53 million before taxes in the second quarter of this year. The news is a big leap from the same time last year (in the second quarter of 2009, the brand lost a heady $237 million). Ford's sale of Volvo seems to have been on glacial pace, partly due to the number of government agencies in the U.S., Europe and China that were needed to sign off on the deal. By the time the ink dries on the last document, Geely will have secured the largest overseas acquisition of any Chinese automaker so far. +++
