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Big Three See Gains in June 2012

Posted by admin On July - 5 - 2012

Big Three AutomakersDetroit’s Big Three automakers showed higher domestic auto sales for the month of June. Both General Motors and Chrysler saw double-digit increases. Ford’s gains weren’t as impressive, but they were still respectable at 7 percent. Even some foreign automakers got in on the action.

In fact, Toyota may very well have experienced the most dramatic jump in sales. While June was 12 percent off from May, the Japanese company saw a massive 60 percent increase. Considering the fact that Toyota has many domestic construction resources, these numbers are also good for US economists.

New auto sales among American buyers in the month of June were essentially expected to jump 21 percent from the past year. Nevertheless, some market analysts expected those same figures to fall by 4.7 percent over the previous month. Automakers have been seemingly pretty pleased with the gains, though, and many of them are posting figures that should make investors rather happy.

Ford sold 207,759 vehicles during June in the United States. They only sold 194,114 in June 2011. While that’s 3.9 percent below the May 2012 total of 216,267, it’s still rather impressive. Motor vehicles that carry the Ford marquee saw sales increases of 7.2 percent. Lincoln increased 2.5 percent.

GMC sales in general were up 15 percent. Chevy saw a 15 percent jump of its own. Buick’s 27 percent gains were extremely impressive, though Cadillac sales were only up by 12 percent. Dealer inventory in the United States was at 700,927 motor vehicles, which actually marks a 1 percent increase over the previous month.

Strangely enough, all this good news from various automakers doesn’t seem to be quite good enough for Ford. That firm actually expects to lose around $570 million in overseas sales. This has a great deal to do with the poor economic conditions in Europe.

The European debt crisis is everywhere in the news today, and sadly it reared its ugly head in Ford’s figures. Fortunately, the strong results in North America should help them stay afloat. Ford is still expected to make a profit this quarter, and their Ford Credit auto-lending unit should also keep the company above water.

Chrysler

The United Auto Workers recently announced there are certain indications that Chrysler may be looking to add new jobs to their Michigan and Illinois plants. Chrysler is looking forward to bolstering sales on some of their top models by boosting production at a number of facilities. The demand for additional vehicles in the currently released models is surpassing actual production. Chrysler could end up adding as many as 3,000 new jobs over the course of the next year.

If demand and volume hold and continue to grow, the UAW predicts that Chrysler may add a 3rd shift to their factories to help accommodate it. The Chrysler plants currently employ approximately 7,000 people across two shifts.

Chrysler posted a first quarter net profit of $116 million which is the first profitable quarter since coming out of bankruptcy in 2009. Global sales rose to a peak of 18% up through April. CEO Sergio Marchionne is looking to refinance bailout loans from the Canadian and United States governments to the private sector. The refinancing will save the company millions and open the door for Fiat S.p.A. to increase its stake in Chrysler from 30% to 46%.

An overarching goal for Chrysler is to rebuild that which they once had while expanding and adding new jobs. One of the paths in current consideration is to produce their own parts rather than employing third party suppliers either domestic or international. This could potentially signal the addition of more facilities and employees being added to the Chrysler name once that path is fully explored.

The direction CEO Sergio Marchionne is taking Chrysler is seen by many to be a very positive step in the re-emergence of the brand as Fiat helps to bolster the company.

One of the most popular models for Chrysler is the Jeep Grand Cherokee. The Grand Cherokee has increased its United States sales by upwards of 86% through April. Models such as the Chrysler Compass have enjoyed increased sales by approximately 80%. The hopes of the UAW are for the addition of the new jobs and shifts before the summer to take further advantage of these growing sales trends. Embracing them at the right time could be a greater path to an increase in growth and prosperity for Chrysler.

Chrysler Set to Repay $7.5B of Bailout Money

Posted by admin On May - 2 - 2011
Chrysler

The signal that Chrysler would repay $7.5B of its government bailout signified a rebound from the difficulties it experienced during the economic downturn. Analysts saw Chrysler on the verge of collapse two years ago when they were bailed out of bankruptcy with loans from the American and Canadian government.

Chrysler is currently negotiating with such financial entities as Bank of America, Citigroup, Morgan Stanley, and Goldman Sachs to refinance that chunk of its bailout. This refinancing will be supplemented with bond sales. The push to refinance has come harder in the last six months after it was revealed Chrysler paid out $1.2B in interest charges on the bailout loan in the course of the year. It is their feeling they can get a better rate on the open market.

Since the 2009 downturn for Chrysler they have managed to cut many expenses and are enjoying a resurgence in popularity on newer models. The new Jeep Grand Cherokee SUV is an especially popular vehicle that is helping to bolster the recovering company.

The company has not turned a profit since it left bankruptcy protection in June of 2009. Chrysler posted a loss of $652 million for the last year. Refinancing and paying the government back a large chunk of the bailout loan should put the company back into the green.

Treasury Secretary Timothy Geithner stated the government is looking forward to severing its ties with Chrysler as soon as possible. Though the government is looking to get the maximum return that it can for taxpayers on their investment, this want is offset by the fact that the bailout was not to turn a profit. The government bailout was posted to help save the jobs of American workers.

Chrysler received a total of $10.5B in aid from the United States government approximately two years ago. In that time, they have been able to make payments with regularity. Refinancing is expected to pay off an additional $5.9B from the balance of the loan. The final sum on the balance will be approximately $2B.

More of that repayment to the government could come when it sells the 8.6% ownership stake it currently has in a Chrysler IPO. The United Auto Workers are planning to sell their 59.2% stake in Chrysler to help pay for retiree health bills. Fiat SpA is expected to buy a $1.3B stake in Chrysler and receive an additional 16% stake which brings its total to 46%.

Once Fiat begins production of a 40mpg vehicle in the United States, it will receive another 5% share of Chrysler which will make Fiat a majority stockholder.

Fiat Franchises Awarded To Dealerships This Week

Posted by admin On October - 22 - 2010
Fiat-500

Franchise opportunities are abound in the United States, where the American dream is often obtained by franchising an already successful business or product. For many automobile dealers across the United States, an opportunity to continue living the American dream was handed out this week in the form of a Fiat franchise.

Fiat is an Italian automobile company founded in 1899. The name Fiat is actually an acronym that when translated from Italian means Italian Automobile Factory of Turin. Fiat is a successful company throughout the world, with many assembly factories in countries such as Brazil, India, and Poland. Fiats have not been actively sold and marketed by United States dealerships in more than two decades, so the opportunity to have a Fiat franchise is full of promise.

Many existing dealerships submitted proposals to Chrysler asking for permission to sell Fiats several months ago and the Fiat 500, a compact car, will begin hitting showroom floors in early March 2011. Chrysler received thousands of applications from dealership owners hoping to become Fiat distributors, many who are not currently associated with Chrysler or its subsidiaries. Of the more than 2,000 Chrysler dealerships across the United States, only a little more than 600 received formal invitations from Chrysler Corporation to submit franchise proposals.

For the time being, the Fiat 500 will be the only car model produced for sale in the states from the Italian based car company. Early reports state that there will be up to four different cuts or versions of the 500. A convertible, a sport edition, a petite four door, as well as a “High Roof” style. All of the cars will have a luxurious and unique Italian style that Fiat has been known for for many decades.

There are more than 115 markets that Chrysler has chosen to give franchises in. These areas have been thoroughly researched and show great potential to be big sellers in the area of compact cars. Fiat is often compared to the Mini-Cooper, but the 500 will actually be shorter, slimmer, and more streamlined than the Mini.

Anyone looking for smooth driving, gas saving compact car will have another choice on their car buying plate just in time for spring.

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