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Inside this issue
GM's Q4 Operating Profit Rises 14% to $1.25 Billion
Was GM Deal to Buy Back Shares Money Well Spent?
Lexus, Porsche Top Quality Survey
Are Diesels Ready to Go Mainstream in U.S.?
EPA Looks to Audit More MPG Claims
America's Love Affair with Autos
Economy Better, But We Still Drive Less
Auto Makers Go High-Tech: Five Features to Make Driving Easier
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
GM's Q4 Operating Profit Rises 14% to $1.25 Billion

General Motors' fourth-quarter operating profit -- excluding a raft of one-time items -- rose 14 percent as $1.4 billion in North American earnings were partially offset by wider losses in Europe. GM posted a net profit of $892 million for the October-December period. That includes several one-time charges and gains that added about $100 million to GM's bottom line. Excluding those items, GM's operating profit, which the company believes is the best reflection of its underlying performance, was $1.25 billion. For the full year, GM's net income was $4.86 billion, vs. a record $7.59 billion in 2011. Operating income in 2012, before any one-time items, was $7.86 billion, down from $8.30 billion in 2011. In a statement, GM CEO Dan Akerson called 2012 "another solid year," noting that it was the company's third straight annual profit since its 2009 bankruptcy.
Source: Automotive News

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Was GM Deal to Buy Back Shares Money Well Spent?

General Motors Co., the latest auto maker to offer "no haggle prices," may have taken the concept a bit too far. Investors cheered when the company said in December that it would pay $27.50 each for 200 million shares held by the U.S. Treasury, an 8% premium to the market price. With the stock now trading 4% above what it paid, the deal seems like a win-win. But should GM have waited? The company's Thursday earnings call will shed more light on whether that was the best use of $5.5 billion. The auto maker is expected to report earnings per share of $3.10 for the year, down from $4.58 in 2011, although the drop is less extreme excluding some one-time items. What's more, forecasts for 2013 are now 5% lower than before the deal. And the stock purchase masks a greater decline in underlying profit, as the lower share count helped boost per-share forecasts by at least 5%.
Source: The Wall Street Journal

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Lexus, Porsche Top Quality Survey

The 2013 Vehicle Dependability Study, released [Wednesday] by J.D. Power & Associates, contains some surprises as well as things that should come as no surprise. The study, in its 24th year, measures problems experienced by the original owners of three-year-old vehicles over the last 12 months. This year's study was based on responses of more than 37,000 original owners of 2010 model-year vehicles. What should come as no surprise is that Lexus is the top brand for reliability or that the long-term dependability of three-year-old models over all continues to improve, since it has been improving steadily year over year. After Lexus, the brands rounding out the top 10 are Porsche, Lincoln, Toyota, Mercedes-Benz, Buick, Honda, Acura, Ram and Suzuki.
Source: The New York Times

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Are Diesels Ready to Go Mainstream in U.S.?

Chrysler's dramatic and unexpected move to offer a diesel in its standard-duty Ram pickup is the latest sign that diesel engines are on the verge of explosive growth in the U.S. in both trucks and cars. It's been a long time coming. While diesels are common worldwide, the U.S. hasn't warmed to them, even though the engines get 25% to 40% better fuel economy than gasoline engines, enjoy higher resale values and can last longer. There are rational arguments against diesel: expensive, foul-smelling fuel; higher vehicle prices; different driving characteristics; noise. But a simple generation gap could wipe out those concerns, some of which were formed when diesel engines for light cars and trucks were much less sophisticated.
Source: USA Today

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EPA Looks to Audit More MPG Claims

A senior EPA engineer says he expects the government to more closely monitor automakers' fuel economy ratings after Hyundai and Kia overstated mileage claims on some nameplates. Speaking at a University of Michigan conference [Wednesday] about the government's 2025 fuel economy standards, Jeff Alson said the agency has always performed “routine audits” of the tests, which automakers conduct themselves. But higher gasoline prices have highlighted discrepancies between the ratings and the fuel economy that drivers achieve. “We'll probably do more of that in the future than we did in the past,” Alson said.
Source: Automotive News

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America's Love Affair with Autos

For Valentine's Day, the Auto Index delved deeper into the kinds of relationships Americans have with their cars, yielding some interesting findings about what gets Americans' engines revving. Click here for the results.
Source: Alliance of Automobile Manufacturers

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Economy Better, But We Still Drive Less

A national report released last week adds to a growing body of evidence of something nearly inconceivable to car-bound Atlantans. Not only has driving failed to increase with the economy's recovery; it's falling more. No one knows for sure what's going on. The suspects are legion: high gas prices; teleworking; a recession so bad it left psychic scars, or a recovery just weak on jobs. Or, some go so far to believe, a shift in culture away from cars. The big question: Is the trend permanent? Or if some invisible glitch gets unstuck, will traffic come flooding back? An Oregon economist, Joe Cortright, suggests a fundamental cultural shift is under way. He believes Americans and even Atlantans, initially prompted by high gas prices, are reconsidering the car. “The decline that we're seeing in driving has nothing to do with the recession,” Cortright maintains. “In fact, the recession is over and driving is continuing to decline.” Not everyone is sure there's big permanent change afoot, especially in Atlanta. “I don't think there's any evidence at all that America's lost its love of the automobile,” said David Hyatt, vice president of public affairs for the National Automobile Dealers Association. A more important measure, he says, is car sales.
Source: The Atlanta Journal-Constitution

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Auto Makers Go High-Tech: Five Features to Make Driving Easier

There's a technology revolution in the auto business, and it involves more than streaming radio apps and voice-activated Facebook updates. Consumers who haven't shopped for a new car for five or more years—and that's a lot of people, since the average U.S. vehicle has been on the road for just over a decade—may encounter some exotic new advances. To attract safety-conscious drivers, some car makers are revisiting the question, “Is there anywhere else we can stash an air bag?” Night-vision systems not unlike what the military uses to spot enemies in the dark are appearing at the upper reaches of the luxury market. And to meet tougher fuel-economy standards, car makers are installing transmissions with up to nine speeds. Click here for a sample of new technology hitting showrooms this year.
Source: The Wall Street Journal

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Quotable
"This year our priorities will be executing flawless new vehicle launches, controlling costs and delivering more vehicles to our customers at outstanding value."

   
-- GM CEO Dan Akerson, discussing the automaker's priorities for 2013, Automotive News, Feb. 14
 

  

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