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Despite strong underlying performance, recall-related costs continued to rip cash away from General Motors in the second quarter.
Every year the Fortune 500 rankings are announced, and it’s usually no surprise to see the big three on the list. This year, however, you’ll find only two of the domestic automakers, though both have moved up the list.
The Tesla Roadster (right) has impressive acceleration and handling, you also never have to buy gas for it, but at more than $100,000 it’s pretty expensive.
Their current one-car offering and the big price tag didn’t help the company. They posted a $65.1 million net loss in the past quarter, up from the $34.9 million they posted last year.
Past failures aside, it is still be early to write Tesla off. Despite losing money, they struck a deal with Daimler AG to supply them with a powertrain for their electric vehicles.
“Even though they’re losing money, the fact that their batteries are attractive to other automakers gives them some revenue and some credibility,” said Alan Baum, an industry consultant at Baum & Associates in Michigan in an interview with Automotive News. “They are catching a few breaks in the sense that people want to do business with them.”
In addition to selling parts to other manufacturers, Tesla’s own Model S sedan, new for next year, is already sold out. The more practical iteration of their take on electric transportation also costs about half as much at $50,000 as the performance-oriented Roadster.
CEO Elon Musk said in an October 28 interview on Bloomberg TV that the company actually expects to earn a profit in 2013.
Musk remains optimistic that the company is gaining from experience in the market that will help when the Model S is released.
Their third-quarter revenue exceeded analyst expectations, reaching $57.4 million instead of $46.4 million.
GALLERY: Tesla Model S
[Source: Automotive News]
Five consecutive quarters of being “in the black” has paid off for Jaguar Land Rover. The luxury automaker is set to make over a billion pounds in profit ($1.6 billion) after strong sales around the world, especially in Asia.
In the last three months of 2010, the company netted a record profit of $440 million. Just a year ago, in the same quarter, Jaguar Land Rover made “only” $88 million. In America the company announced a 48% and 16% increase in growth for Jaguar and Land Rover, respectively. It’s also been a long time since 2009, when JLR was nearly forced to seek a bailout from the U.K. government. This impressive increase reflects the turnaround that the company has made since it was sold off by Ford to Tata Motors; think Alan Mulally is kicking himself over in Dearborn?
To reflect this growth and keep its momentum, JLR will increase production from 232,000 vehicles a year to over 300,000, as well as hire new engineers around the world.
[Source: The Telegraph]
Despite record recalls and public humiliation over quality control scandals, Toyota announced that it expects to see a profit of $3.35 billion by the end of their fiscal year in March, a 48% increase.
Toyota sales rose 24 percent in April, as strong incentives helped Toyota move cars like the Corolla and Prius. Despite the strong performance, Toyota Senior Managing Director Takahiko Ijichi said that the recall of 8 million vehicles for unintended acceleration issues cost the company 50,000 sales and $1.94 billion.
Despite the setbacks, analysts are optimistic about Toyota’s prospects, especially in the crucial North American market. “Based on the recent sales numbers, the recalls aren’t posing a problem,” said Gentoku Kiyokawa, a fund manager at Fortis Investments in Tokyo, in an interview with Automotive News.
Still, Toyota faces tough competition from renewed competitors like Hyundai and Ford. Hyundai in particular poses a threat to Toyota’s dominance, as the Sonata sedan has seen sales skyrocket by 57 percent in April, while the Camry has only increased by 10 percent.
[Source: Automotive News]
BMW announced today that it is on track to save about $5.2 billion by 2012, by spending less on components and through a strategic partnership with Mercedes-Benz. A report by Bloomberg said that BMW will surpass its goal of cutting $5.2 billion.
“We can say that from today’s perspective we will certainly and easily reach the 4 billion-euro savings goal, and even significantly surpass it,” said Herbert Diess, a board member responsible for overseeing the cost-cutting. BMW is already beating earnings forecasts, posting a $417 million net income for the first quarter of 2010. Analysts expected the number to be $340 million. Diess credited the partnership with Mercedes-Benz for an expected savings of $129 million per year.
[Source: Left Lane News]