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AutoLine: Episode 266 – Europe Upset At GM, Toyota Posts Profit, Tata May Outsource Nano

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Runtime 6:56

Germany is in an uproar over GM’s decision to keep Opel, however Spain and the UK are more optimistic. Yesterday Toyota posted a surprise profit of $240 million for the quarter. Tata may allow local automakers to assemble the Nano and sell them under their own brands. All that and more, plus a preview of this week’s Autoline Detroit where John talks to three analysts about Chrysler’s 5-year plan and whether the company can really turn around.

Transcript and Story Links after the jump . . .


Here are today’s top headlines. Europe is in an uproar over GM keeping Opel. Toyota posts a profit. And Tata may let other car companies build the Nano.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Friday, November 6, 2009. And now, the news.

Germany is in an uproar over GM’s decision to keep Opel. Union leaders are promising trouble. German chancellor Angela Merkel called US President Barack Obama to complain, according to Reuters, but he told her he had nothing to do with the decision. The AFP says Russian Prime Minister Vladimir Putin called the decision disdainful. And now, Carl Peter-Forster, the head of Opel has quit in disgust over GM’s decision. However, unions in Spain are said to be optimistic about the deal, and unions in the UK are said to be delighted.

Bloomberg reports that it was GM’s new Wall Street board members who played hardball on the deal. It points out three of those board members, Steve Girsky, David Bonderman, and Daniel Akerson, all have private equity experience, and really know how to do deals. They felt Magna was paying too little to buy Opel, and that a resurgent GM could restructure Opel on its own.

Yesterday Toyota posted a surprise profit for the quarter. According to the AP, the company made over $240 million. Because of the gain Toyota cut its predicted losses for the year in half from $5 billion to $2.2 billion. Government stimulus programs and strong demand in growing markets like China helped improve results.

The Obama Administration is negotiating with South Korea to remove tariffs on U.S. automakers. According to Bloomberg, the top negotiator in the deal says South Korea should level the playing field since there are no restrictions for Korean automakers in the U.S. The two countries are working on a free trade agreement but it’s getting held up by South Korea’s reluctance to agree to lift barriers to American automakers. Last year U.S. automakers sold fewer than 7,000 vehicles in South Korea while Hyundai and Kia sold over 500,000 Korean-made vehicles in the U.S.

Reuters reports that Tata may allow local automakers to assemble the Nano and sell them under their own brands. The company’s Vice Chairman, Ravi Kant, said these micro manufacturers can even name the car whatever they want. Since the Nano launched in July, Tata has only sold about 7,500 units. It’s waiting to complete a dedicated assembly plant which should have an annual capacity of 250,000 units. Interesting trivia tidbit here. Tata’s chairman Ratan Tata is also on Fiat’s board of directors.

Suzuki just announced pricing on its brand-new Kizashi sedan and it claims the bargain-basement model starts at “less than $19,000.” It comes standard with power windows, locks and mirrors, a nine-speaker sound system and all the safety features you’d expect, but not so fast. Like other automakers the company is trying to pull a fast one. It’s not including the destination and shipping charge in the MSRP, which adds another $735 onto the price tag! For me, automakers that do not include the destination charge when they announce the price of a vehicle are being deceptive. It borders on fraud. It’s a cheap trick to try and make it look like a car costs less than it really does.

Coming up next, I ask three analysts to analyze Chrysler’s five-year plan and tell me whether the company can really turn around.

On this week’s Autoline Detroit I sit down with three analysts, Erich Merkle of Autoconomy, Aaron Bragman of IHS Global Insight, and Michael Robinet of CSM Worldwide to talk about Chrysler’s five-year plan. In the following clip they call into question Chrysler’s projections of the kind of market share it expects to get.

You can find that entire interview later today on our website at AutolineDetroit.tv. If you really want to learn a lot about Chrysler’s five-year plan, there’s a lot of info in that show.

Ok, it’s the end of the week and that means it’s time to announce the winner of our trivia contest. We asked you to tell us what Saab stands for. As most of you correctly responded it’s Swedish Aircraft AB or Svenska Aeroplan AB. And today’s lucky winner is Ron Epple of Owensboro, Kentucky. Congratulations Ron, you’ve just won a Honda baseball hat.

And that’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you next week.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, vLane, WardsAuto.com and WWJ Newsradio 950

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