Toyota: new King in town

It is real. It is a milestone. It is something that seems like a new age:

• Toyota Motor Corp. became the world's top auto seller in the first three months of the year, passing rival General Motors Corp. for the first time, the Japanese automaker said Tuesday.

It is bad news for GM? Possibly, no. Wagoner was cutting fleet contracts, which contribute mainly to poor margins. But Toyota is telling to the world, that its long term strategy is paying off. Toyota long term strategy focus on quality and efficiency is paying off.

Let's see, if automakers will learn the same way Boeing did in the past. Boeing faced EADS (Airbus), and is again on top of the hill.

Again, automakers need new corporate leadership like Sloan or Iacocca.

Another accounting problem

This is a nightmare to the shareholders. We do not understand the systematic accounting problems facing Corporate America, after Enron, Adelphia, and among others, Worldcom.

This time is the GM juggernaut: General Motors warned investors Thursday that its internal controls over financial reporting are ineffective and could make it difficult for automaker to execute its business plan.

One word: unacceptable. SELL.

Auto industry: too much capacity and players

The auto industry is like a volcano, exploding large amounts of mud. The reason for this explosion is simple: too many players in auto industry, in US.

Probably, US is becoming the "world arena" for automakers: GM (with brands like Chevrolet, Saab, Daewoo or Opel), Ford (with Ford, Mazda, Land Rover or Jaguar), Daimler-Chrysler (with Mercedes, Dodge or Smart), Toyota (with Toyota, Lexus), Honda, Hyunday, Nissan, VW (VW, Audi, or Rools-Royce), etc.

DaimlerChrysler today said fourth-quarter net income fell 40 percent to 577 million euros ($757 million) from 966 million euros. Revenue dropped 1.9 percent to 40.7 billion euros. Analysts surveyed by Bloomberg expected net income of 726 million euros in the quarter.

No matter Zetsche will argue, Daimler will regain its previous name, Daimler-Benz.

Automakers restructuring

General Motors Corp., the world's largest automaker, is in discussions with DaimlerChrysler AG's Chrysler unit on an alliance to share the costs of designing and developing cars, people with knowledge of the talks said.

Smells like a merger! Three automakers will be two....

We don't believe in an engagement.

GM and Ford: The corporate America challenged

If you look to the figures, they develop a similar pattern. Why? Because, they are facing same challenges. Industrial America is facing a tremendous challenge, in the era of globalisation: to be an active member in the major industry, or not....

We believe the inheritors of Sloan and Henry Ford will make the necessary turnaround. Otherwise, "corporate America" will be devastated in coming years. The Lou Gerstner story will fit like a glove in the American auto industry.

Finally, remember GM market value is only 21 billion and Ford is less than 16 billion.

Detroit on track?

We believe that GM and Ford will survive, in long term. Deutsche Bank made a contribution, in short term: General Motors and Ford led stocks higher on Friday. Both got a lift from a ratings upgrade from Deutsche Bank.

General Motors (up $2.06 to $35.86, Charts) and Ford Motor (up $0.29 to $8.84, Charts).

Last of the Mohicans's strategy of GM and Ford

These are the titles today for the car industry about January, 2007 sales:

"Car sales shocker: Ford tumbles to No. 4
GM sales down 16.6%; Ford down 19%; DaimlerChrysler's up 3.2%"

Apparently there is no near recovery for Ford or GM. Simultaneously, Toyota rose to US's n.º 2 automaker. Even DaimlerChrysler is from mixed foreign origin (Germany). The Last of the Mohicans's strategy of american automakers of insisting on big cars, big power, big oil spenders, may, if the course isn't changed, lead to their death, alone and miserable.

Sorry, but maybe plain and words are necessary: "It's the ecology, stupids!".

Automakers: winners and losers

After the turmoil of US automakers, specially Ford and GM, we see the headlines on Nissan: Japanese automaker Nissan Motor Co. said Friday that profit tumbled 22.6 percent in the October-December quarter amid rising commodity costs, tougher competition and softening sales.

At the other side, the winners are: Toyota and Honda (Nissan, which was recently surpassed by Honda as Japan's third-largest automaker in terms of vehicle production).

The major problems for the losers are: US market (Nissan was "certain" to miss its global sales target of 3.73 million units for the business year ending on March 31 as it underperformed in the United States and Japan), energy and innovativeness (In the first half of the fiscal year, Nissan launched just one of 10 new products scheduled for introduction).

Finally this: Combined U.S. sales for January by Toyota, Honda, Nissan, and South Korea's Hyundai Motor Co. and Kia Motors Corp. outstripped those by GM and Ford combined.

GM's Volt

"GM goes electric with concept car" got the news today at Reuters and MSNBC.

We read further and see that GM's (NYSE: GM) Volt proposition will be and autonomy of 40 miles and the possibility of recharge included in the vehicle, that will provide a combustion engine solely for that purpose. The battery technology is said to be lithium-ion.

Which will be the suppliers of the batteries, the critical part of this hybrid vehicle? Reuters explains:

"GM awarded lithium-ion battery development contracts for its Saturn Vue Green Line hybrid to Johnson Controls Inc. affiliate Johnson Controls-Saft Advanced Power Solutions and Cobasys, a venture of Chevron Corp. and Energy Conversion Devices Inc. . Cobasys will work with privately held A123Systems to develop the technology."

When?

"Lauckner said the Volt should be ready for production around the same time the lithium-ion batteries will be, which GM expects to be in two to three years."

So, now we know that GM has made the announced move and chose, ADVFN tell us, Johnson Controls (Nyse: JCI) and ultimately A123Systems technology and the batteries will be provided in "two to three years".

Now, another question: who's with Alcoa (NYSE: AA) and Altair Nanotechnologies (NASDAQ: ALTI)? Altair has already announced a complete product...


Disclaimer: I own shares of Altair Nanotechnologies.

No news

To read this: Toyota said to overtake Ford in January 2007; it is like to say this: in 2007, USA will not leave Iraq.

And Ford will be third in cars, in USA. Because, globally, Ford is now third.

The picture for America's automakers are not good, even in USA:

• GM enjoyed 28% market share in 2001. Today they have 24%.
• Ford had 21% in 2001. Today they have 15%.
• Daimler-Chrysler came from near 15% market share to a 13% level, now.

Probably, Asians do it better!

Detroit: a chaos

Ford is in turmoil. GM is trying to survive. Daimler-Chrysler is in trouble, too:

• DaimlerChrysler AG could lay off up to 4,000 at Freightliner, its North American truck operations next year, Andreas Renschler, a member of the automaker's board of management who heads its truck operations.

Is it a reason to think that Henry Ford, Alfred P. Sloan and Lee Iacoca, did not have any successors?

GM announces hybrid SUV with lithium ion batteries

Rick Wagoner, GM Chairman and CEO, has said on November, 29:

"GM Announces Intention to Produce Plug-in Hybrid SUV
Saturn Vue Green Line Will Use Modified 2-mode Hybrid System, Lithium Ion Battery
LOS ANGELES – General Motors Corp. intends to produce a Saturn Vue Green Line plug-in hybrid that has the potential to achieve double the fuel efficiency of any current SUV, the automaker announced at the Greater Los Angeles Auto Show.
This hybrid SUV will use a modified version of GM’s 2-mode hybrid system and plug-in technology, a Lithium Ion battery pack when ready, highly efficient electronics and powerful electric motors to achieve significant increases in fuel economy.
“GM has begun work on a Saturn Vue plug-in hybrid production vehicle,” said Rick Wagoner, GM Chairman and CEO. “The technological hurdles are real, but we believe they are also surmountable. I can’t give you a production date for our plug-in hybrid today. But I can tell you that this is a top priority program for GM, given the huge potential it offers for fuel-economy improvement.”
A plug-in hybrid-electric vehicle differs from non-plug-in hybrid-electric vehicles by offering extended electric-only propulsion, additional battery capacity and the ability to be recharged from an external electrical outlet.
The Saturn Vue Green Line plug-in hybrid is expected to offer electric-only propulsion for more than 10 miles."

So, GM doesn't have the lithium ion battery technology yet. Which will be the supplier?

Detroit: a chaos?

Read this: "Joe Eberhardt becomes the latest departure from the U.S. division of DaimlerChrysler".

Another victim of the chaotic situation of Detroit. GM is trying to survive. Ford is in deep hole. Chrysler is a black hole. What the Germans of Daimler - Chrysler will do about this?

• a year of lower sales at the automaker, which has seen a decline of more than 7 percent so far in 2006.
• Chrysler is also trying to recover from a $1.5 billion loss in the third quarter.
• Chrysler also has about 50,000 vehicles in its "sales bank" - previously undisclosed parking lots full of vehicles unassigned to any dealers.
• Gary Dilts, who reported to Eberhardt as senior vice president of U.S. sales, and Raymond Fisher, former vice president of sales, service and parts, announced their retirements in June. Marketing executives Jeff Bell and Julie Roehm also resigned earlier this year.

The Asia, especially the Japanese and Koreans guys are the winners, for now!

Ford: turmoil on the mirror?

Ford Motor Company is struggling everyday. Great-Grandson of Henry Ford is out. Sales are down. Image is down. Reliability is down. Energy problem is not solved. Visteon still is a problem.

But, Ford is not the only looser. GM is scratching and Daimler - Chrysler is down-up-down.

But, Wilbur Ross, the billionaire, is trying to get the whole picture: 1) But auto sales remained relatively strong at around 17 million units. 2) half of the 50 largest suppliers in North America lost money in 2005. 3) very few earned more than 3 percent on revenues.

It is time to look for a bargain stock like Ford, with a market value of less than 14 billion. This is a small amount for a big auto. We do not even think of a Ford failure....

GM and electric batteries

As a comentator suggests here, I also think that the electric batteries will gain the race over the fuel cells.

The comment, albeit anonymous, stresses that GM has made a recent move to the development of electric batteries over its previous choice - the fuel cells. As a matter of fact, Bob Lutz, GM vice-president, has said so in June, 2006 in an interview to Automative News: "Tom Stephens (group vice president of GM Powertrain), Rick Wagoner and I believe in the ultimate electrification of the automobile". Furthermore, Bob Lutz said that "(A) series hybrid could run primarily on electricity from lithium ion batteries, with an engine as backup to replenish the batteries". And recently, as Horse Power Sports notices, has mantained that "executives think electric vehicles are the future".

It seems that the future is knocking GM's door (and the other majors). And its name seems to be lithium ion batteries. Now, let's us see if they open the door. And which will be the supplier of the lithium ion batteries.