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Saturday, June 05, 2010
Friday, June 04, 2010
Jeep Liberty rear end trouble
Have you heard of blowing your rear end due to driving with a different tire. I had put my spare tire on 3 days earlier due to a flat that could not be repaired, the spare was an all season, other 3 are mud and snow. The wheel base was the same, just 1.5 inches difference to wear and tare on tires and different type. (I was waiting for a replacement tire that was on order.) The mechanic at chrysler is telling me this is the reason the back end went. (Too top it off, my mileage is at 102,000 and the warranty was to 100,000.)
Now that i have my new tire, the mechanic says it is still 1/2 larger and the other tires should be replaced . Is it possible to blow the rear end again?…or is the mechanic covering his warranty by telling me this is the cause of the rear diff major damage…r/r complete assembly Replaced.
Now that i have my new tire, the mechanic says it is still 1/2 larger and the other tires should be replaced . Is it possible to blow the rear end again?…or is the mechanic covering his warranty by telling me this is the cause of the rear diff major damage…r/r complete assembly Replaced.
Thursday, June 03, 2010
Mercury production to end in Q4
Ford Motor Co. will discontinue its 71-year-old Mercury brand and end vehicle production in the fourth quarter, Mark Fields, Ford's president of the Americas, said today.
Fields also announced plans to expand the Lincoln lineup with seven new or refreshed vehicles in the next four years.
Ford product development chief Derrick Kuzak said a new compact car will be developed for Lincoln. The car will be based on the same platform that the 2011 Ford Focus sits on, but it will be designed and engineered specifically for Lincoln, he said.
The final decision to kill Mercury was made this week and approved by Ford's board today, Fields said.
A total of 1,712 dealerships sell the Mercury brand in the United States, but there are no stand-alone Mercury stores. Among the Mercury stores, 511 also have Ford franchises, 276 are combined with Lincoln franchises, and 925 are dualed with both Ford and Lincoln franchises.
Some of the 276 Lincoln-Mercury dealerships are in markets that cannot support a stand-alone Lincoln store, Fields said. He said Ford Motor will work with those stores, helping them to either get a Ford franchise or consolidate their Lincoln franchise with a Ford store.
“We do foresee in some markets there could be some stand-alone Lincoln dealerships,” Fields said.
More information to come
Mercury dealers will all receive packets tomorrow morning outlining Ford's transition plan for the brand and outlining monetary compensation for their stores based on a formula Ford has developed, Fields said.
Fields said Ford decided to close Mercury during its annual spring business and product review. Ford division's improved market share -- up 2.2 percentage points through April compared with last year -- combined with the fact that most Mercury customers cross-shop the Ford brand, made it sensible to cut Mercury, Fields said.
“And it allows us to put 100 percent of our resources into Ford and Lincoln,” he said.
Dealer Bob Tasca Jr., who heads the Lincoln Mercury brands of the dealer council, calls this an emotional decision because it will affect dealers' lives.
“Some of the dealers have their homes mortgaged to their business,” said Tasca, who has two Ford-Lincoln/Mercury stores, one in Rhode Island and one in Massachusetts. “Some are going to make it, and some won't. But I really expect Ford will be fair.”
Ed Tonkin, chairman of the National Automobile Dealers Association, called it “a sad day.”
“NADA's concern is that Ford treats each of its Mercury dealers fairly and equitably,” he said, “especially the 276 of whom sell Lincoln and Mercury exclusively.
“Ford also needs to move quickly to take into account the millions of dollars that dealers have invested in facilities, equipment, personnel and training. They deserve fair compensation.”
Fields said Ford will offer special incentives to move Mercury vehicles this summer. He said he expects most of the Mercury inventory to be sold off by the end of this year.
There will be no job cuts that result from the demise of Mercury. Ford will redeploy any Mercury personnel to the Lincoln brand.
Besides an expanded lineup, Lincoln also gets an expanded marketing team, Fields said.
Ford declined to reveal how much it will cost the company to discontinue Mercury but said Ford's recent profitability has made it possible to make the move now. Ford reported a second quarter net profit of $2.1 billion.
Good thing in the long run
Peter Gervais, general manager of Gervais Lincoln-Mercury in Lowell, Mass., said in the long run the move “will probably be a good thing.”
"Lincoln has a little more brand status than Mercury," he added. “I think it was overdue and it should have happened beforehand.”
Ed Witt of Witt Lincoln-Mercury in San Diego, Calif., said he was optimistic about the switch.
“We love our Mercury brand. On the other hand, we are excited to take on a brand like Lincoln and making it a luxury brand. They're going to take the Lincoln brand to where it's never been before.”
He said he though Ford's leadership would take care of the Mercury dealers.
“Look at what they've been doing,” he said. “They've done it through leadership and focus and that's what we're going to do with Lincoln. This Mercury question has been around forever, a thorn in my saddle.
“We have definition, we have structure, and we have focus and direction. What else could I want? I think it's a big opportunity.”
Dealers reached by Automotive News said they weren't surprised.
“All I can say is this: I hate it,” said Robert Hammett, general manager of Hammett Motor Co. in Durant, Miss. “But they really don't need to make two of the same vehicles and put two different names on them. Mercury should have been a totally different outfit. Everybody has been expecting it.”
Glenn Mahoney, sales manager at Dana Ford Lincoln Mercury in Staten Island, N.Y., said some customers have been concerned.
“The dealers will still be here to warrant the cars, we're a dual point,” he said. “I think it is going be great, if we actually expand the Lincoln brand. It's kind of an overkill (with Lincoln and Mercury). The product lines are practically on top of each other.
“So, from that standpoint it was an interchangeable part. From being a dual store, it was nice to have both sides for us. It was kind of nice to have that area to move. I think Mercury sales will do pretty well throughout the end of the year.”
Fields also announced plans to expand the Lincoln lineup with seven new or refreshed vehicles in the next four years.
Ford product development chief Derrick Kuzak said a new compact car will be developed for Lincoln. The car will be based on the same platform that the 2011 Ford Focus sits on, but it will be designed and engineered specifically for Lincoln, he said.
The final decision to kill Mercury was made this week and approved by Ford's board today, Fields said.
A total of 1,712 dealerships sell the Mercury brand in the United States, but there are no stand-alone Mercury stores. Among the Mercury stores, 511 also have Ford franchises, 276 are combined with Lincoln franchises, and 925 are dualed with both Ford and Lincoln franchises.
Some of the 276 Lincoln-Mercury dealerships are in markets that cannot support a stand-alone Lincoln store, Fields said. He said Ford Motor will work with those stores, helping them to either get a Ford franchise or consolidate their Lincoln franchise with a Ford store.
“We do foresee in some markets there could be some stand-alone Lincoln dealerships,” Fields said.
More information to come
Mercury dealers will all receive packets tomorrow morning outlining Ford's transition plan for the brand and outlining monetary compensation for their stores based on a formula Ford has developed, Fields said.
Fields said Ford decided to close Mercury during its annual spring business and product review. Ford division's improved market share -- up 2.2 percentage points through April compared with last year -- combined with the fact that most Mercury customers cross-shop the Ford brand, made it sensible to cut Mercury, Fields said.
“And it allows us to put 100 percent of our resources into Ford and Lincoln,” he said.
Dealer Bob Tasca Jr., who heads the Lincoln Mercury brands of the dealer council, calls this an emotional decision because it will affect dealers' lives.
“Some of the dealers have their homes mortgaged to their business,” said Tasca, who has two Ford-Lincoln/Mercury stores, one in Rhode Island and one in Massachusetts. “Some are going to make it, and some won't. But I really expect Ford will be fair.”
Ed Tonkin, chairman of the National Automobile Dealers Association, called it “a sad day.”
“NADA's concern is that Ford treats each of its Mercury dealers fairly and equitably,” he said, “especially the 276 of whom sell Lincoln and Mercury exclusively.
“Ford also needs to move quickly to take into account the millions of dollars that dealers have invested in facilities, equipment, personnel and training. They deserve fair compensation.”
Fields said Ford will offer special incentives to move Mercury vehicles this summer. He said he expects most of the Mercury inventory to be sold off by the end of this year.
There will be no job cuts that result from the demise of Mercury. Ford will redeploy any Mercury personnel to the Lincoln brand.
Besides an expanded lineup, Lincoln also gets an expanded marketing team, Fields said.
Ford declined to reveal how much it will cost the company to discontinue Mercury but said Ford's recent profitability has made it possible to make the move now. Ford reported a second quarter net profit of $2.1 billion.
Good thing in the long run
Peter Gervais, general manager of Gervais Lincoln-Mercury in Lowell, Mass., said in the long run the move “will probably be a good thing.”
"Lincoln has a little more brand status than Mercury," he added. “I think it was overdue and it should have happened beforehand.”
Ed Witt of Witt Lincoln-Mercury in San Diego, Calif., said he was optimistic about the switch.
“We love our Mercury brand. On the other hand, we are excited to take on a brand like Lincoln and making it a luxury brand. They're going to take the Lincoln brand to where it's never been before.”
He said he though Ford's leadership would take care of the Mercury dealers.
“Look at what they've been doing,” he said. “They've done it through leadership and focus and that's what we're going to do with Lincoln. This Mercury question has been around forever, a thorn in my saddle.
“We have definition, we have structure, and we have focus and direction. What else could I want? I think it's a big opportunity.”
Dealers reached by Automotive News said they weren't surprised.
“All I can say is this: I hate it,” said Robert Hammett, general manager of Hammett Motor Co. in Durant, Miss. “But they really don't need to make two of the same vehicles and put two different names on them. Mercury should have been a totally different outfit. Everybody has been expecting it.”
Glenn Mahoney, sales manager at Dana Ford Lincoln Mercury in Staten Island, N.Y., said some customers have been concerned.
“The dealers will still be here to warrant the cars, we're a dual point,” he said. “I think it is going be great, if we actually expand the Lincoln brand. It's kind of an overkill (with Lincoln and Mercury). The product lines are practically on top of each other.
“So, from that standpoint it was an interchangeable part. From being a dual store, it was nice to have both sides for us. It was kind of nice to have that area to move. I think Mercury sales will do pretty well throughout the end of the year.”
Tuesday, June 01, 2010
Air Conditioning 2002 Dodge Durango nothing coming out of dash vents
Air worked fine when it first got hot out this year. Now it only works in the back and the defrost part of dash. Nothing comes out of other dash vents. Any ideas what problem is?
Response:
1) Got Kids? If so, they more than likely dropped something in 1 of the side vents.
2)in some cases if the system is low on refrigerant, the system will ice up blocking some of the vents. try topping off the system with a little more refrigerant
3) Most likely a failed vent/mode door actuator has failed. The Air Conditioning System itself is fine or it wouldn't blow cold at all. The Blower motor is fine or it wouldn't blow air. So the only thing left is the door is jammed or the electrical actuator that moves the "mode" door from vent/dash/floor.
Response:
1) Got Kids? If so, they more than likely dropped something in 1 of the side vents.
2)in some cases if the system is low on refrigerant, the system will ice up blocking some of the vents. try topping off the system with a little more refrigerant
3) Most likely a failed vent/mode door actuator has failed. The Air Conditioning System itself is fine or it wouldn't blow cold at all. The Blower motor is fine or it wouldn't blow air. So the only thing left is the door is jammed or the electrical actuator that moves the "mode" door from vent/dash/floor.
Sunday, May 30, 2010
Ask Free Auto Mechanic Experts Car Questions Online - Great Auto Repair Help
- My 92′ Olds with a 3.1 v-6 starts and runs fine for a few seconds, then it hesitates, misses, gets worse then dies.
- Dies when Im driving it and wont start until a few hours. Will be ok for a few days and then does the same thing again.
- 2007 mini cooper overheating
- camaro rear end , it has a 10 bolt rear end and i was wondering how to fix a howl sound.
- 1997 Toyota Celica GT With 2.2 Engine
- 2003 Buick Rendezvous I turned on the air conditioner and drove 7 miles.
- can someone tell me how to fix my car
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Thursday, May 27, 2010
2005 Toyota Tundra SR5 Estimate for Repairs
rack and pinion assembly, Rack Mount Bushings, Left & Right outer tie rod, and Left & Right upper control arm bushings. I need an estimate please.
I would definitely like to know how long each should take and if any of the time gets cut out because of another part of the repair. Just wanting to know if I'm getting hosed. (we are in the military and are over seas and we are told to be careful of the locals over charging us Thanks!)
Response:
rack and pinion assembly, Rack Mount Bushings, Left & Right outer tie rod, and Left & Right upper control arm bushings
I would definitely like to know how long each should take and if any of the time gets cut out because of another part of the repair.
The cost of replacing the Steering Rack is aout $1200.00 including both outer tie rod ends. Tie rod ends by them selves would be about $250- $300. The control arm bushings run about $145.00 per side so about $290 for both. So the entire service would run about $1490.00 Plus (shop add ons) plus tax. Some shops do not have ad ons, but most do... like shop supplies, etc. Be sure to ask up front so you are not supprised.
Reply:
Thanks! Actually, come to find out they were trying to screw us. Went to another shop and it was only the tie rod bushing (i think that's what he called it). It was a thick gasket looking thing in the center of the tie rods and it was just starting to get a little worn so there was very slight play. Cost us $132 for the repair, part, and an alignment. Thanks for the info anyways, but I'm Glad I didn't need it!
V/R
Gena
I would definitely like to know how long each should take and if any of the time gets cut out because of another part of the repair. Just wanting to know if I'm getting hosed. (we are in the military and are over seas and we are told to be careful of the locals over charging us Thanks!)
Response:
rack and pinion assembly, Rack Mount Bushings, Left & Right outer tie rod, and Left & Right upper control arm bushings
I would definitely like to know how long each should take and if any of the time gets cut out because of another part of the repair.
The cost of replacing the Steering Rack is aout $1200.00 including both outer tie rod ends. Tie rod ends by them selves would be about $250- $300. The control arm bushings run about $145.00 per side so about $290 for both. So the entire service would run about $1490.00 Plus (shop add ons) plus tax. Some shops do not have ad ons, but most do... like shop supplies, etc. Be sure to ask up front so you are not supprised.
Reply:
Thanks! Actually, come to find out they were trying to screw us. Went to another shop and it was only the tie rod bushing (i think that's what he called it). It was a thick gasket looking thing in the center of the tie rods and it was just starting to get a little worn so there was very slight play. Cost us $132 for the repair, part, and an alignment. Thanks for the info anyways, but I'm Glad I didn't need it!
V/R
Gena
Monday, May 24, 2010
Nissan says cheaper U.S. Leaf price due to tax, incentive gaps
Nissan said this week its battery-powered Leaf will cost about $37,000 in Europe after incentives. That compares with $32,780 in the U.S. before incentives and a base price in Japan of more than $40,000. Variations in import fees, taxes and incentives account for the disparities, said Tom Smith, Nissan's chief marketing manager for European electric auto sales.
“If you just translate the U.S. price into euros, you seem to get a significant difference,” Smith said in a phone interview from Nissan's headquarters in Yokohama, Japan. Excluding Europe's higher tax on the vehicle and an import duty that's four times that in the U.S., “we are priced at exactly the same level in both markets,” he said.
The Leaf, powered by a lithium-ion battery pack, will go on sale in Japan and the U.S. this year and in Europe next year. Nissan's CEOCarlos Ghosn has set a goal of leading sales of rechargeable vehicles, which he estimates may make up 10 percent of global auto demand by 2020.
While competitors Toyota Motor Corp., General Motors Co. and Ford Motor Co. are preparing to sell battery-powered and plug-in hybrid models, none has announced plans matching Nissan's goal of being able to sell as many as 500,000 electric cars by 2012.
Too low?
Nissan aims for the Leaf to compete in price with Toyota's gasoline-electric Prius and Honda Motor Co.'s Civic Hybrid in the U.S. The vehicle qualifies for a $7,500 federal tax credit and may get an added $5,000 rebate in California, where large automakers are required to sell electric vehicles.
Based on cost estimates for Leaf's battery pack, electronic components and production, the U.S. price seems too low, at least initially, said John Kluza, a battery analyst at Lux Research in Boston.
The current cost of the 24-kilowatt-hour battery pack, capable of propelling the Leaf as far as 100 miles (160 kilometers), may be about $20,000, Kluza said. Nissan has declined to provide cost details.
“It seems the goal was to price Leaf to get sales volume even if there's some initial loss,” Kluza said. “In the first year or so, perhaps they'll take a hit of $2,000 on each car, maybe more. Over time, as battery production scales up, that price will start to look more appropriate.”
‘All the information'
The U.S. price excludes local sales taxes, which vary across the country, and a destination and handling charge of about $800, according to Jung.
Takeshi Miyao, a Tokyo-based analyst for consulting company Carnorama, estimates battery-pack and component costs for the Leaf are about 2.45 million yen ($26,900), excluding labor and other expenses.
Analysts such as Kluza and Miyao “don't have all the information,” said Nissan's Trisha Jung, chief marketing manager for U.S. electric vehicle sales, who oversaw local pricing for the model. “We are the first affordable, mass- market electric vehicle. We're pricing appropriately to ensure that.”
Nissan is factoring into the price the longer-term impact of state and U.S. federal incentives it won to produce the Leaf at its Smyrna, Tennessee, plant and build a lithium-ion battery factory next to it, said KG Duleep, who researches advanced auto technologies for consultant ICF International. Those incentives included a $1.6 billion low-cost federal loan won in 2009.
Advance orders
“When automakers price, they build in all aspects of capital costs over a multi-year period, and Nissan is getting a substantial amount of assistance,” said Duleep, who is based in Washington. “There's probably some loss on the first few thousand cars, but perhaps by 2013 or so their costs might be at or below $30,000 a vehicle.”
It took Toyota at least 10 years to make a profit on its Prius, which was introduced in 1997, when research, development and capital costs are included, said Koji Endo, managing director at Advanced Research Japan in Tokyo. It may take Nissan about the same amount of time, he estimated.
For a new car powered by a conventional gasoline engine, it usually takes about four years to make a profit, he said.
Nissan has a goal of 20,000 advance orders for the Leaf, which is set to begin arriving in the U.S. late this year. The company will mark the start of construction of its U.S. battery plant in Smyrna on May 26. The facility, to open in 2012, will have capacity to make lithium-ion battery packs for as many as 200,000 vehicles annually.
Thursday, May 20, 2010
Tesla to make EVs with Toyota, buy NUMMI
Toyota Motor Corp. and Tesla Motors Inc. will become partners to produce electric vehicles at New United Motor Manufacturing Inc. in Fremont, Calif., a plant that Toyota last year ruled too inefficient to keep open.
Tesla will acquire the now-closed NUMMI property and employ 1,000 people building unspecified electric vehicles in a partnership with the world's largest automaker, the companies announced today in Palo Alto, Calif.
Toyota will invest $50 million in the small California-based electric sports maker in exchange for Tesla's common stock when the EV company completes its planned initial public offering.
Speaking at the announcement, Toyota President Akio Toyoda said he admired the entrepreneurial spirit at Tesla and hoped the venture will teach Toyota about quick decision-making and flexibility.
“Decades ago,” Toyoda said, “Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that venture business spirit, and take on the challenges of the future.”
Tesla CEO Elon Musk said his company would spend “a couple of hundred million dollars” preparing NUMMI for the project.
NUMMI, a former joint venture between Toyota and General Motors, closed earlier this year amid a storm of criticism from the plant's UAW work force.
Musk said the negotiations to acquire the closed plant concluded yesterday.
He said that Tesla's next model, a Model S that will debut in 2012, will only account for about 20,000 units a year, but said other models will follow off of the Model S platform.
“We're going to be occupying a little corner,” Musk said.
He said that eventually the project would account for 10,000 jobs, including supplier jobs.
Tesla's Model S is being made possible thanks to a $465 million low-interest loan from the U.S. Department of Energy. Until that product appears, Tesla is marketing a two-seat electric sports car that retails for more than $100,000.
Tesla has said that the Model S will sell for closer to $40,000.
Until now, Toyota has expressed little interest in electric cars. The Japanese automaker has staked considerable research and marketing investment on its popular hybrid-drive vehicles, including the Prius and hybrid Camry
Tesla will acquire the now-closed NUMMI property and employ 1,000 people building unspecified electric vehicles in a partnership with the world's largest automaker, the companies announced today in Palo Alto, Calif.
Toyota will invest $50 million in the small California-based electric sports maker in exchange for Tesla's common stock when the EV company completes its planned initial public offering.
Speaking at the announcement, Toyota President Akio Toyoda said he admired the entrepreneurial spirit at Tesla and hoped the venture will teach Toyota about quick decision-making and flexibility.
“Decades ago,” Toyoda said, “Toyota was also born as a venture business. By partnering with Tesla, my hope is that all Toyota employees will recall that venture business spirit, and take on the challenges of the future.”
Tesla CEO Elon Musk said his company would spend “a couple of hundred million dollars” preparing NUMMI for the project.
NUMMI, a former joint venture between Toyota and General Motors, closed earlier this year amid a storm of criticism from the plant's UAW work force.
Musk said the negotiations to acquire the closed plant concluded yesterday.
He said that Tesla's next model, a Model S that will debut in 2012, will only account for about 20,000 units a year, but said other models will follow off of the Model S platform.
“We're going to be occupying a little corner,” Musk said.
He said that eventually the project would account for 10,000 jobs, including supplier jobs.
Tesla's Model S is being made possible thanks to a $465 million low-interest loan from the U.S. Department of Energy. Until that product appears, Tesla is marketing a two-seat electric sports car that retails for more than $100,000.
Tesla has said that the Model S will sell for closer to $40,000.
Until now, Toyota has expressed little interest in electric cars. The Japanese automaker has staked considerable research and marketing investment on its popular hybrid-drive vehicles, including the Prius and hybrid Camry
Tuesday, May 18, 2010
GM posts $865 million Q1 profit
General Motors Co. posted a first-quarter profit as production snapped back and said it was making progress on a turnaround expected to put it on track toward its first full-year profit since 2004.
Analysts said the results underscored the progress GM made by slashing costs in a bankruptcy funded by the Obama administration and kept open the prospect of the automaker launching an initial public offering as soon as this year.
GM recorded a net profit of $865 million, compared with a loss of $5.98 billion a year before, as it ramped up production by nearly 57 percent from year-earlier levels to meet steadier demand in the United States and a sales boom in China.
"Now that we have achieved profitability, the next step is to achieve sustainable profitability," CFO Chris Liddell told reporters.
Liddell said GM had a "good chance" of making a profit for all of 2010, although gains from ramping up production would fade after the first quarter.
He declined to offer a forecast for the rest of 2010. He also put some conditions on the timing of a possible initial public offering.
GM will make an IPO only “when the markets and the company are ready,” he said. “What's out of our control are the readiness of the markets and the status of the global auto industry.”
In addition, GM Controller Nick Cyprus cautioned that GM must further refine its internal financial controls before company managers have a clear view of financial performance. He expressed optimism that would be accomplished before an IPO.
GM received $50 billion of U.S. government financing for its restructuring in bankruptcy. It has been aiming to launch an IPO that would allow the U.S. government to reduce its stake of nearly 61 percent in the automaker.
“The unfortunate process of bankruptcy is yielding positive results,” Rebecca Lindland, an analyst at IHS Global Insight, said in an interview. “It certainly keeps them on track for an IPO.”
Revenue soars
First-quarter revenue was $31.48 billion, a 40 percent advance from a year earlier, when GM was on the brink of bankruptcy after collapsing U.S. demand sent the industry into a tailspin. The automaker generated $1 billion in free cash flow during the quarter and said it ended the period with $35.7 billion in cash.
GM's first-quarter global sales rose 23 percent to nearly 2 million vehicles, including sales of GM's affiliate brands in China: Wuling and FAW-GM.
GM used bankruptcy to drop brands, cull U.S. dealerships and reduce debt. At the end of the first quarter, GM had debt and preferred stock of just over $20 billion, down from $54 billion a year earlier with government creditors taking the place of bondholders.
"The promise of the bankruptcy was to reduce costs, and it worked. That bodes well for the future," said John Wolkonowicz, an analyst with IHS Global Insight.
GM posted a $4.3 billion loss in 2009, from the time it emerged from bankruptcy in early July until the end of the year. The automaker fell into bankruptcy after losses of about $88 billion from 2005 through the first quarter of 2009.
Analysts have said GM still faces steep challenges in repairing the reputation of its brands led by Chevrolet in its home market. Another area of weakness is Europe, where GM posted a first-quarter loss of $506 million and sales for its Opel and Vauxhall brands were down almost 1 percent.
"They're headed in the right direction, but one quarter is not going to turn the ship around," said Mirko Mikelic, a portfolio manager for Fifth Third Asset Management.
GM's market share was stable at 11 percent of global sales and at about 18 percent of North American sales.
U.S. rivals
IHS Global Insight's Wolkonowicz said the results showed GM was in a stronger position than its smaller rival, Chrysler, while still lagging Ford Motor Co. Ford posted a $2.1 billion first-quarter profit and has forecast that it will be solidly profitable for 2010.
In a step aimed at strengthening its ability to compete with rivals, GM has been looking at options to re-establish a captive auto financing arm, people with knowledge of the plans said last week.
Such a move would mark a nearly complete reversal of the process that started in late 2006 when GM sold off a controlling stake in GMAC to raise cash.
Detroit-based GMAC, now known as Ally Financial, is 56 percent owned by the U.S. Treasury after the government injected $17 billion as part of a restructuring that also saw the finance company become a commercial bank.
Liddell said it was "incredibly important" for GM to have a strong financing partner but said it was "debatable" whether that needed to be a captive finance firm as GMAC once was.
Analysts said the results underscored the progress GM made by slashing costs in a bankruptcy funded by the Obama administration and kept open the prospect of the automaker launching an initial public offering as soon as this year.
GM recorded a net profit of $865 million, compared with a loss of $5.98 billion a year before, as it ramped up production by nearly 57 percent from year-earlier levels to meet steadier demand in the United States and a sales boom in China.
"Now that we have achieved profitability, the next step is to achieve sustainable profitability," CFO Chris Liddell told reporters.
Liddell said GM had a "good chance" of making a profit for all of 2010, although gains from ramping up production would fade after the first quarter.
He declined to offer a forecast for the rest of 2010. He also put some conditions on the timing of a possible initial public offering.
GM will make an IPO only “when the markets and the company are ready,” he said. “What's out of our control are the readiness of the markets and the status of the global auto industry.”
In addition, GM Controller Nick Cyprus cautioned that GM must further refine its internal financial controls before company managers have a clear view of financial performance. He expressed optimism that would be accomplished before an IPO.
GM received $50 billion of U.S. government financing for its restructuring in bankruptcy. It has been aiming to launch an IPO that would allow the U.S. government to reduce its stake of nearly 61 percent in the automaker.
“The unfortunate process of bankruptcy is yielding positive results,” Rebecca Lindland, an analyst at IHS Global Insight, said in an interview. “It certainly keeps them on track for an IPO.”
Revenue soars
First-quarter revenue was $31.48 billion, a 40 percent advance from a year earlier, when GM was on the brink of bankruptcy after collapsing U.S. demand sent the industry into a tailspin. The automaker generated $1 billion in free cash flow during the quarter and said it ended the period with $35.7 billion in cash.
GM's first-quarter global sales rose 23 percent to nearly 2 million vehicles, including sales of GM's affiliate brands in China: Wuling and FAW-GM.
GM used bankruptcy to drop brands, cull U.S. dealerships and reduce debt. At the end of the first quarter, GM had debt and preferred stock of just over $20 billion, down from $54 billion a year earlier with government creditors taking the place of bondholders.
"The promise of the bankruptcy was to reduce costs, and it worked. That bodes well for the future," said John Wolkonowicz, an analyst with IHS Global Insight.
GM posted a $4.3 billion loss in 2009, from the time it emerged from bankruptcy in early July until the end of the year. The automaker fell into bankruptcy after losses of about $88 billion from 2005 through the first quarter of 2009.
Analysts have said GM still faces steep challenges in repairing the reputation of its brands led by Chevrolet in its home market. Another area of weakness is Europe, where GM posted a first-quarter loss of $506 million and sales for its Opel and Vauxhall brands were down almost 1 percent.
"They're headed in the right direction, but one quarter is not going to turn the ship around," said Mirko Mikelic, a portfolio manager for Fifth Third Asset Management.
GM's market share was stable at 11 percent of global sales and at about 18 percent of North American sales.
U.S. rivals
IHS Global Insight's Wolkonowicz said the results showed GM was in a stronger position than its smaller rival, Chrysler, while still lagging Ford Motor Co. Ford posted a $2.1 billion first-quarter profit and has forecast that it will be solidly profitable for 2010.
In a step aimed at strengthening its ability to compete with rivals, GM has been looking at options to re-establish a captive auto financing arm, people with knowledge of the plans said last week.
Such a move would mark a nearly complete reversal of the process that started in late 2006 when GM sold off a controlling stake in GMAC to raise cash.
Detroit-based GMAC, now known as Ally Financial, is 56 percent owned by the U.S. Treasury after the government injected $17 billion as part of a restructuring that also saw the finance company become a commercial bank.
Liddell said it was "incredibly important" for GM to have a strong financing partner but said it was "debatable" whether that needed to be a captive finance firm as GMAC once was.
Sunday, May 16, 2010
Five Common Car-Buying Mistakes
Despite Toyota's nine-million-plus recalls and gas prices' continued rise, analysts say things in the auto industry are looking up this spring. Total domestic car sales rose 20% in April over last year, and Detroit's Big Three each reported solid gains.
Cash-back incentives from domestic automakers and 0% financing offers from Toyota ( TM - news - people ) played a role. The Chevy Cobalt coupe, for example, offers $3,000 cash on a $14,990 MSRP--a whopping 20% cash-to-price ratio.
But if now seems like a good time to buy a car, there are a few things to keep in mind: Some of those cash-back offers apply only if you accept the dealer's financing, solid research is crucial to getting a good deal, and the end of the month, rather than the beginning, is the best time to buy a car.
Set Realistic Goals
There are several car-buying mistakes commonly known in the auto industry. To identify them, we asked for advice from experts at Edmunds.com, AutoPacific, J.D. Power and Associates and AAA. They gave us their best advice for navigating through what can be a confusing path. They also told us that most dealers are honest, reliable and hardworking local businessmen and women--but there are some precautions consumers should take before they purchase a car.
One frequent mistake: buying the car you think you'll need, rather than buying the one that suits your current needs.
That's why couples with kids buy two-ton trucks and huge SUVs, says John O'Dell, the senior editor of Edmunds' Green Car Advisor.
"We think someday … I'm going to have a boat and I'm going to need to tow it," O'Dell says. "I'm buying for what I perceive will be the heaviest and the most intense use I can put that vehicle to."
Instead, most families could drive a small crossover SUV. If they purchase a larger car they end up spending a lot more money on the purchase price and on the subsequent gas bills than they should have to spend.
Another common error is buying a car at the beginning of the year. This mistake especially applies to luxury cars, which charge a premium for being the very latest and the very best in their class. In January, February and March, dealers have all year long to meet sales goals and sell inventory, but by the end of the year they'll be anxious to clear their lots for new stock. What's more, the minute the calendar changes to Jan. 1 and a newer model year becomes current, anything older than that immediately loses desirability.
"December is a very, very good month to buy a luxury car," says Ivan Drury, an analyst for Edmunds.com. "Anything that is not current, that one from last month, is going to be heavily incentivized."
Know the Market
"Due diligence can remedy a host of errors", says J.D. Power spokesman John Tews. Buyers who enter a showroom unarmed with a list of must-haves make them vulnerable to an impulsive purchase, one they can't afford or ultimately won't want.
Consider keeping a journal of your driving habits in order to keep yourself realistic about what you need. Also, determine the market value of the car you'd like to buy before hitting the lot, since that will help you know where to begin negotiations on the starting price of the vehicle.
Use Kelley Blue Book, NADA Guides, Cars.com, AutoTrader.com and Edmunds.com to find the true market value and the expected residual value of the car you want. EBay.com and Craigslist.com are also good resources for determining the street value of a car you're considering.
Five Common Car-Buying Mistakes
1) Talking too much
Three things to never say on the lot: "I need this car now" (desperation breeds price inflation); "I love this car" (don't let emotions control the buying process--it only makes you vulnerable); and "This is how much I can afford to pay per month" (once dealers know how much you want to pay per month, they'll find other ways--fees, warranties, financing--to make up the difference between that and how much they must make on a sale. Talk about the absolute price of a car, not the monthly payment.)
2)Not doing your research
Walking into a dealership open to any ideas the salesperson has is a bad idea--it makes you vulnerable to impulsively buying something you don't need, can't afford or ultimately won't want. Determining the market value of your car will help you know where to begin negotiations on the starting price of the vehicle. Use Kelley Blue Book, NADA Guides, Cars.com, AutoTrader.com, and Edmunds.com to find the true market value and the expected residual value of the car you want.
3)Not being realistic about what you need
Before you hit the showroom floor, take a hard look at the kind of driving you do. Don't assume you need a brand-new car, and consider keeping a driving journal for a week, or even a month, to chart exactly when, where and how far you drive each day. Then buy a vehicle according to those needs--not aspirational needs, like thinking "maybe someday we'll need to tow a boat, so I need a truck with three-ton towing capacity."
4)Leasing a car because you can't afford the down payment
Lease payments, especially for luxury cars, don't require a down payment and are often cheaper per month than what it costs to buy the car outright. But they don't always pay off. You've got to determine if having a new car every two or three years and with no down payment--but no ownership and no stake in the residual value--is more important than long-term cost savings and ownership of a vehicle you will eventually pay off.
5)Assuming you'll use the dealer's financing
Dealers often set monthly payment amounts assuming they'll make up the difference with the financing agreement. Instead, arrange for your own financing at your own bank or credit union, and choose the shortest-term car loan you can: Long-term loans coax people into buying cars they can't really afford by stretching the payments out over such a long period of time that the car is almost fully depreciated by the time it's paid for.
Source: Yahoo Autos
Cash-back incentives from domestic automakers and 0% financing offers from Toyota ( TM - news - people ) played a role. The Chevy Cobalt coupe, for example, offers $3,000 cash on a $14,990 MSRP--a whopping 20% cash-to-price ratio.
But if now seems like a good time to buy a car, there are a few things to keep in mind: Some of those cash-back offers apply only if you accept the dealer's financing, solid research is crucial to getting a good deal, and the end of the month, rather than the beginning, is the best time to buy a car.
Set Realistic Goals
There are several car-buying mistakes commonly known in the auto industry. To identify them, we asked for advice from experts at Edmunds.com, AutoPacific, J.D. Power and Associates and AAA. They gave us their best advice for navigating through what can be a confusing path. They also told us that most dealers are honest, reliable and hardworking local businessmen and women--but there are some precautions consumers should take before they purchase a car.
One frequent mistake: buying the car you think you'll need, rather than buying the one that suits your current needs.
That's why couples with kids buy two-ton trucks and huge SUVs, says John O'Dell, the senior editor of Edmunds' Green Car Advisor.
"We think someday … I'm going to have a boat and I'm going to need to tow it," O'Dell says. "I'm buying for what I perceive will be the heaviest and the most intense use I can put that vehicle to."
Instead, most families could drive a small crossover SUV. If they purchase a larger car they end up spending a lot more money on the purchase price and on the subsequent gas bills than they should have to spend.
Another common error is buying a car at the beginning of the year. This mistake especially applies to luxury cars, which charge a premium for being the very latest and the very best in their class. In January, February and March, dealers have all year long to meet sales goals and sell inventory, but by the end of the year they'll be anxious to clear their lots for new stock. What's more, the minute the calendar changes to Jan. 1 and a newer model year becomes current, anything older than that immediately loses desirability.
"December is a very, very good month to buy a luxury car," says Ivan Drury, an analyst for Edmunds.com. "Anything that is not current, that one from last month, is going to be heavily incentivized."
Know the Market
"Due diligence can remedy a host of errors", says J.D. Power spokesman John Tews. Buyers who enter a showroom unarmed with a list of must-haves make them vulnerable to an impulsive purchase, one they can't afford or ultimately won't want.
Consider keeping a journal of your driving habits in order to keep yourself realistic about what you need. Also, determine the market value of the car you'd like to buy before hitting the lot, since that will help you know where to begin negotiations on the starting price of the vehicle.
Use Kelley Blue Book, NADA Guides, Cars.com, AutoTrader.com and Edmunds.com to find the true market value and the expected residual value of the car you want. EBay.com and Craigslist.com are also good resources for determining the street value of a car you're considering.
Five Common Car-Buying Mistakes
1) Talking too much
Three things to never say on the lot: "I need this car now" (desperation breeds price inflation); "I love this car" (don't let emotions control the buying process--it only makes you vulnerable); and "This is how much I can afford to pay per month" (once dealers know how much you want to pay per month, they'll find other ways--fees, warranties, financing--to make up the difference between that and how much they must make on a sale. Talk about the absolute price of a car, not the monthly payment.)
2)Not doing your research
Walking into a dealership open to any ideas the salesperson has is a bad idea--it makes you vulnerable to impulsively buying something you don't need, can't afford or ultimately won't want. Determining the market value of your car will help you know where to begin negotiations on the starting price of the vehicle. Use Kelley Blue Book, NADA Guides, Cars.com, AutoTrader.com, and Edmunds.com to find the true market value and the expected residual value of the car you want.
3)Not being realistic about what you need
Before you hit the showroom floor, take a hard look at the kind of driving you do. Don't assume you need a brand-new car, and consider keeping a driving journal for a week, or even a month, to chart exactly when, where and how far you drive each day. Then buy a vehicle according to those needs--not aspirational needs, like thinking "maybe someday we'll need to tow a boat, so I need a truck with three-ton towing capacity."
4)Leasing a car because you can't afford the down payment
Lease payments, especially for luxury cars, don't require a down payment and are often cheaper per month than what it costs to buy the car outright. But they don't always pay off. You've got to determine if having a new car every two or three years and with no down payment--but no ownership and no stake in the residual value--is more important than long-term cost savings and ownership of a vehicle you will eventually pay off.
5)Assuming you'll use the dealer's financing
Dealers often set monthly payment amounts assuming they'll make up the difference with the financing agreement. Instead, arrange for your own financing at your own bank or credit union, and choose the shortest-term car loan you can: Long-term loans coax people into buying cars they can't really afford by stretching the payments out over such a long period of time that the car is almost fully depreciated by the time it's paid for.
Source: Yahoo Autos
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