CARFCO

Ford has surprised Wall Street after reporting a $2.6 billion profit in the second-quarter of the year, earning shareholders 61 cents per share, which beats the forecast 40 cents.  Ford’s American sales climbed 28 per cent since the beginning of the year, almost doubling that of its competitors. However, Ford has forecast a decline in sales to go hand-in-hand with the predicted weak economy as well as the rising cost of aluminium, along with its seasonal plant closures.

Ford President and Chief Executive Officer Alan Mulally,said in a conference call with analysts and media, “Overall, our performance this year gives us great confidence going forward.”

Ford is convinced that the company is making more money due to the global auto-structure where vehicles from around the world share parts. Even though sales in western Europe were down, sales were up significantly in other parts of the world such as Brazil, India, the United States and China.

Mulally also notes, “The global business environment remains challenging, but we expect global growth to continue.” U.S. sales remain low due to economic uncertainty, which is why Ford has lowered its total forecast sales for the year by half a million cars and trucks. They are predicting sales of 11.5 to 12 million for the year. However, shares have remained in good standing, getting a recent boost of 41 cents, up to $12.50 during the early morning of July 23, from fast-paced sales of their F-150 pickup truck and the Ford Fusion Sedan.

Ford has closed the second quarter owning 17.2 per cent of the U.S. market, which is an increase from 16.9 per cent they were at during the end of the first quarter. The second quarter also saw them pay of $7 billion in debt and earn $2.6 billion, increasing shares by 61 cents each. Ford continues to work hard to pay down its debt.

Some automakers are struggling to make a comeback and understand that the slow recovery of the economy plays a large factor in their success, however, as a consumer, it can be a difficult decision whether to buy new or fix the used vehicle you currently drive. If you car or truck is in need of repairs and it is costing a little more than you counted on, perhaps a car repair loan can help. When traditional banks are not an option, private lenders can be. Many cater specifically to clients who have bad credit and even no credit, and offer many types of loans, including car repair loans.

As consumer demands for electric cars increase, so will jobs in green technology. The last five years have seen the auto industry handing out more pink slips than applications and even though it is agreed that the auto industry will most likely never return to its pre-recession employee numbers, the increasing popularity of environmentally friendly vehicles will see some jobs return.

According to information from Des Rosiers Automotive Consultants, in 2001, it there were 199,218 Canadians working in the auto industry. In 2009, a 7 per cent drop to 133,375 was noted and in April of 2010, there were an estimated 123,829 Canadians employed by the industry.

The Electrovaya Mississauga, Ontario plant is currently hiring engineers to help produce the lithium-ion batteries that run these green, eco-machines. Gitanjali DasGupta, manager of Electrovaya’s electric vehicle division says, “Every auto company is looking to green their fleets, to electrify their fleets. (The industry) is truly making a very structural shift. Electrovaya is an enabler of that and one of the key beneficiaries of that.”

Due to high expectations in the demand for green cars, Linamar Corp, which is Canada’s second largest manufacturer of auto parts in Guelph, intends to hire as many as 1,300 people by the end of 2011. Linda Hasenfratz noted in a recent interview that these numbers are the result of the consumer’s demand for the manufacturing of solar energy parts as well as to build more fuel-efficient cars.

Carlos Gomes, automotive economist at Scotiabank feels, “The next generation of jobs in the Canadian auto industry won’t come from the big automakers’ assembly plants, but from suppliers that develop innovative new technologies. I think that is one of the key trends going forward, especially because we now have legislation in place that requires the automakers to improve their overall fuel efficiency,” Gomes said.

The employment boost from the demand in green technologies won’t be felt until around 2015. “Certainly there will be an advantage from green (technology), but that’s not going to be instantaneous. We don’t expect to see massive impacts from green for some time,” says Bill Pochiluk, president of industry research firm AutomotiveCompass.

In April 2010, the Canadian and U.S. governments made a joint announcement regarding the new auto standards which include an increase of 40 per cent on fuel-efficiency and a 25 per cent reduction of greenhouse emissions within the next six years. These new compliances will put a strain on older cars that are still on the road, but putting in some environmentally friendly repairs in an attempt to upkeep is cheaper than altogether replacing your car.

Where would people be without their cars? Environment Canada has begun the promotion of its green cars, which are to be the majority of the selection of new cars, by 2016.

The government-mandated green cars will be about 30 per cent more fuel-efficient while Environment Canada claims they will cost consumers 5 per cent more to purchase at an average $25,000 vehicle. They also add that what a consumer loses at the dealership, they will gain at the pump within a year or two, depending of course, on the price of fuel.

Auto analyst Dennis DesRosiers, of DesRosiers Automotive Consultants, says “the government estimates do not factor in the cost of any subsidies offered to buyers of green vehicles. On top of that, the technologies required meet CAFE (corporate average fuel economy) come with big price tags. Direct fuel injection, lightweight materials, advanced transmissions, cylinder deactivation systems, gas engines that generate combustion like diesels and all the rest cost more than $1,200 per car to develop and produce for the marketplace.

Many auto experts wonder who is going to pay for all this infrastructure of an electric vehicle fleet and if the government has really included all the costs of producing advanced ‘green’ technologies into cars. Technologies such as plug-in hybrids, pure electric cars, gasoline and diesel-electric hybrids as well as cars that run ultra-clean diesel are some of the fleet-wide fuel economy cars we can expect.

Over the next six years, Canada and the United States are expected to set the new fuel economy standards for the new vehicles. By 2016, the new stanadars will see consumers driving vehicles that get a combined average of 6.6 liters / 100 km or 35.5 miles to the US gallon.

“Let me say what everyone refuses to acknowledge: These standards are impossible to meet,” notes DesRosiers. Think about this: In Canada, we have witnessed a 1.0 litre per 100 km improvement in the last 25 years, moving from 11 litres per 100 km to 10 litres per 100 km. Roughly 10 per cent. And this was an era of unprecedented technological improvement. Does anyone truly believe that we can now move to below 7.0 litres per 100 km in the next six years? I fully understand the potential for hybrids, electrics and other advanced power trains, but this level of improvement is just not achievable.”

FUEL EFFICIENCY OF CANADIAN CARS BY SEGMENT (LITRES/100 KM) (1982 / 2007)
Subcompact
6.65 / 6.75

Compact
7.79 / 7.65

Intermediate
10.93 / 9.11

Sport
10.66 / 9.63

Luxury
10.95 / 9.88

FUEL EFFICIENCY OF CANADIAN LIGHT TRUCKS BY SEGMENT (LITRES/100 KM) (1982 / 2007)
Small
11.02 / 10.07

SUV
13.44 / 11.93

Intermediate SUV
12.99 / 13.78

Large SUV
16.39 (year 2000) / 12.30

Luxury SUV
12.14 / 11.95
Large Pickup

[Source: DesRosiers Automotive Consultants]

It is certain that the cost of vehicles will only increase as the years pass, and buying more fuel efficient cars will cost more as well.

Hyundai announced it sold 12,620 vehicles in May, which is up 12.6 percent from the previous year. This increase in sales saw Hyundai outsell Honda by a little more than 1,000 units, placing them in the top-five position for the first time in the auto-maker’s history, seeing them claim 8.6 per cent of the Canadian market. This also marked Hyundai’s second consecutive month of record-breaking sales. Steve Kelleher, president and CEO of Hyundai Canada says, “Hyundai products are clearly resonating with Canadian customers”.

Aside from Hyundai, Canadian vehicle sales laid quite low during the month of May. Overall, sales increased by 0.2 percent, showing 154,285 total units being sold across the country.

Toyota Canada, the maker of the luxurious Lexus brand, reported a loss of 16.1 percent in sales, selling only 17,879 vehicles in May. The Japanese auto maker has done well in Canada despite its massive global recall on millions of its vehicles with issues ranging from instability in the Lexus sport utility vehicles to sticky accelerator pedals in other brands of its cars.

Ford saw growth in May due in most part to the strong sales of its Ford Edge, Lincoln MKX crossover and Ford Taurus sedan while Ford truck sales were also up 29 percent. The sales of 26,110 units added to a strong 19.4 percent increase, allowing them to claim a top spot with a whopping 16 percent of the market.

Chrysler also saw a large gain with sales climbing an incredibly steep 53.5 percent, selling 20,861 autos in May. This is a great leap forward from one year ago when Chrysler saw their sales drop by 50 percent. Chrysler has been quoted as saying “the strength of a solid product offering and soaring confidence in the company”, combined with new selling incentives for its employees are some of the key reasons for such growth. Sales of their minivans were almost doubled, selling 5,773 while sales of their Jeep brand rose sharply by 74 percent and car sales saw a climb of 57 percent.

GM’s sales were down 17.6 percent throughout Canada as they discontinued a few of their brands during the company’s restructuring last year. However, the company did well with a few of their main brand, Chevrolet, GMC, Cadillac and Buick, seeing these particular sales up 15.4 percent, showing total sales of 25,995 for May.

A few other automakers such as Nissan sold 7,487, down 2.4 percent, Mercedes Benz sales rose 22.2 percent with the sale of 2,865 cars, while BMW’s sales fell 11.8 percent with the sale of only 2,361 autos.

An Ontario man has filed a potential class-action lawsuit against GM Canada for rolling back their benefits. This lawsuit against the automaker has been made on behalf of himself and 3,500 additional retired white-collar employees of the company. Just as GM Canada had reconstructed itself from the impact of the recession, this lawsuit has been filed with claims the company violated its contractual obligations to the retired workers by cutting their benefits with their approval.

During GM Canada’s reconstruction process, the company said it would have to reduce or eliminate several of its post-retirement benefits it had earlier promised to its workers. GM Canada was forced to eliminate the semi-private hospital coverage its employees enjoyed, as well as reduce the annual maximum coverage for things such as orthodontic and dental benefits. It also increased the amount members would have to pay for their prescription drugs and it eliminate the life insurance coverage.

However, many of the retirees are upset because they rely on their prescription drug plans and extended health care benefits as well as the life insurance that GM had promised. These retired workers admit they cannot go back and demand more money for their work over the years, but at the same time, they do not feel it’s fair that the company take away benefits they feel they have already earned. They were not in a position to negotiate with GM when the company reconstruction was taking place and feel that taking away those benefits has breached the contracts GM Canada had with its retired employees. The are also claiming these benefits to be ‘an integral and fundamental part’ of the compensation they earned throughout the course of their employment.

According to the statement of claim. “GM Canada’s actions have had a serious impact on the class members as many of the class members live on modest non-indexed fixed incomes and they are particularly vulnerable as a result of their advanced age, susceptibility to health problems and limited capacity to assume increased financial burdens or to seek additional employment income.”

The claim also adds that employees did not purchase additional life insurance or benefits when they were available at much lower rates and are now left with less coverage than they assumed they would have. This leaves the many claimants unable to pay for medications and treatments they previously could afford with their post-retirement benefits and struggling to continue treatment for ongoing or new health issues.

Dozens of car makers lined up their newest products at a recent luxury car show in Beijing that has brought out China’s curious and most wealthy. The Chinese are a hard working culture and enjoy personal rewards such as high-end cars. Luxury car sales in China have soared in recent years, becoming one of the fastest growing segments of the market, even outselling the United States. Automakers sold 13.4 million vehicles last year, a vast majority of these going to Chinese consumers, making them the world’s largest auto consumer.

In the first few hours of the Beijing Auto Show, where nearly 1,000 vehicles have gone on display, two Rolls Royce cars were sold, each fetching prices of around $1.3 million dollars or nine million yuan. Ferrari also showed off a new limited edition 599 GTO model. The Italian sports car maker has made only 599 of these cars, which can reach 335 kilometers per hour or 220 miles per hour, making it Ferrari’s fastest consumer car. For those who have a Ferrari fetish, you may be disappointed to know that all of the cars have already been sold, including 20 in China. Ferrari would not publicly divulge the price of their new 599 GTO.

China has the second highest number of billionaires in the world after the United States. The Chinese are getting very rich, very quickly and they are willing to spend their hard earned money on the most luxurious goods. The Chinese are auto enthusiasts who love to drive and they love their chosen brands. Successful entrepreneurs like to purchase items to show their wealth.

The Chinese market has been the savior for foreign automakers, as sales remained strong during the North American recession. Car makers are expecting strong sales growth in the Chinese market in the following years ahead. Aston Martin, a British sports car maker, entered the Chinese market in 2007 and had record sales, making it their top market over an 18-month period, while Ferrari sold more than 200 cars in China last year. Rolls Royce has developed an extra long car for the chauffeur driven Chinese market and expects sales to more than triple to 300 and 400 cars, which would make it the number two market in the world.

The auto show also featured 65 concept cars and 95 alternative energy vehicles. You may or may not be in the market for a new luxury car, but if you are in need of some money and you own your vehicle, car title loans are easy to obtain and are available through private financers.

GM announced it’s re-hiring more than 700 laid off workers in Ontario, bouncing back from the worst crisis in its history. All this right around the same time Toyota is slapped with a record $16.4 million US fine. GM is responding to growing consumer demand for their Chevrolet Equinox and GMC Terrain, both popular crossover utility vehicles.

GM had to shut down most of its North American operations last year due to low consumer demand and the near-collapse of its parent company. GM will be using their excess capacity at Oshawa, adding a third shift in October, which will see about 600 employees recalled with an additional 110 laid off workers at CAMI being recalled. GM is also expecting to add another 70 jobs by August, which will be the first time they have added new jobs in Canada since 2002. GM is hoping to meet the high US demand for their Equinox. Their new production strategy should result in an additional 60,000 to 75,000 units a year.

The recent recession forced GM to scale back production to their core brands of Chevrolet, Buick, GMC and Cadillac. The company has decided to wind down their additional options such as Pontiac, Saturn, Saab and Hummer. The outlook of the company began to improve in late 2009 as consumer demand began to grow once again. Additional overtime shifts have been added to keep up with the high demand for the company’s Chevrolet Camaro and the previously announced addition of the Buck Regal to the Canadian production line-up. This will see GM add another shift to their Ontario plant in 2011.

General Motors and its Canadian subsidiary were almost wiped out last year during the economic downturn. The demand for larger, gas-guzzling vehicles has declined considerably as more economic, fuel-efficient vehicles are what consumes are looking to buy. This domino affect caused GM to shed about 2,600 jobs and one plant closure affecting an additional 1,000 workers. US government intervention kept the US-based company afloat throughout 2009, however, GM eventually filed for bankruptcy protection in June, mere days after receiving a multi-billion bailout package from the US, Canadian and Ontario governments.

This re-hiring news by GM is key timing for the company’s previous workers who were brought to their knees last year over the collapse of the North American auto industry. Most of these people have exhausted their employment insurance and other social benefits. If you are still rebounding from a job layoff or too much debt and are in need or financial advice or a consolidation, there are many private loan companies that can help. Bad credit is not a problem as some private lenders specialize in bad credit loan. These financial institutions can easily be found on-line. Some even offer 24 hour, no obligation applications.