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Inside this issue
Pricing Pressure in U.S., China Raises Fears about Future Profits
GM CEO Dismisses Talk of Merger With Fiat Chrysler
Audi Prepares Electric SUV to Fight Tesla but Bets on Plug-in Hybrids
Ford to Lay Off 700 Workers at Plant Making Small Cars, Hybrids
Volvo Prepares to Send 'Made in China' Cars to US
Car Maker Honda Unveils First Business Jet
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Top Stories
Pricing Pressure in U.S., China Raises Fears about Future Profits

The strength of the U.S. and China economies has helped companies like General Motors Co. offset weakness in others parts of the world, but growing pricing pressure in those lucrative markets could be a warning sign for future profits. GM Chief Financial Officer Chuck Stevens said on Thursday during the company's earnings conference call that the largest U.S. automaker sees flat retail pricing in North America this year. The company also will see continued competitive pricing in China, especially for older-model vehicles that could see prices decline 3 percent or more, Stevens said. The stronger dollar could allow overseas rivals to cut prices or offer more features in their products, and that has Wall Street concerned. If the U.S. and China markets see competition intensify further, that could lead to discounting, price cuts and other profit-harming strategies, analysts said.
Source: Reuters

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GM CEO Dismisses Talk of Merger With Fiat Chrysler

General Motors CEO Mary Barra is dismissing any talk of a possible merger with Fiat Chrysler Automobiles. Barra tells analysts on a conference call that the company is focused on making its business more efficient and taking full advantage of its global size. She says GM won't consider anything that would distract from those efforts. Fiat Chrysler CEO Sergio Marchionne recently floated the idea of merging with GM or another global automaker. He is a proponent of industry consolidation and says only the biggest automakers will survive.
Source: The Associated Press

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Audi Prepares Electric SUV to Fight Tesla but Bets on Plug-in Hybrids

Audi is set to launch a full-electric SUV with a 310-mile range that will challenge Tesla's Model X crossover, but CEO Rupert Stadler remains cautious about EVs. For the next 10 to 15 years plug-in hybrids will be the preferred choice for customers looking for a vehicle with some form of electrification, he said. Plug-in hybrids are the right answer to balance urban journeys under electric power with an internal combustion engine for longer trips, Stadler told Automotive News at the auto show [in Shanghai] this week. Plug-in hybrids combine a gasoline or diesel engine with an electric motor.
Source: Automotive News

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Ford to Lay Off 700 Workers at Plant Making Small Cars, Hybrids

Ford Motor Co. said it’s laying off a shift of 700 workers at a Michigan factory that builds small cars, hybrids and electric vehicles that are attracting fewer buyers. The plant in Wayne, a Detroit suburb, produces the Focus small car and C-Max hybrid, which had U.S. sales declines last month of 15 percent and 23 percent, respectively. Ford expects to redeploy the workers to other Michigan facilities during the next year, said Kristina Adamski, a spokeswoman.
Source: Bloomberg

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Volvo Prepares to Send 'Made in China' Cars to US

On the verge of exporting the first "Made in China" cars to the United States, Volvo is determined to show they are as good as vehicles it produces in Europe. In contrast to its European factories that check a few completed cars from each batch, every vehicle that rolls off Volvo's 3-year-old assembly line in [Chengdu, China] goes through a five-hour battery of tests on a driving track. The effort to persuade Americans to buy a premium car from China is a new step up in Volvo Car Corp.'s campaign to establish itself as a global luxury brand following its 2010 acquisition by Chinese automaker Geely.
Source: The Associated Press

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Car Maker Honda Unveils First Business Jet

Honda on Thursday unveiled its first private jet before it hits the market this summer, as the Japanese giant, better known for making cars, targets deep-pocketed business flyers. Nearly 20 years in the making, the red and white seven-seater HondaJet, about 42 feet long, is designed to face less air resistance because its engines sit atop the wings instead of the rear of the fuselage. HondaJet, developed by the automaker's US-based subsidiary Honda Aircraft Company, has a $4.5 million price tag and is aimed at wealthy individuals looking to criss-cross continents in privacy.
Source: AFP

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Quotable

"The competitive dark side of a strong U.S. dollar (which hasn't started yet) should keep U.S. auto CEOs up at night."

    -- Morgan Stanley analyst Adam Jonas, commenting on the warning signs for weaker automaker profits, adding that Japanese automakers over the past two years have garnered a $4,000 per vehicle advantage due to the weaker yen, and German automakers have enjoyed similar favorable exchange rates, Reuters, April 23

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