Tag Archive | "2014"

FCA US Profits Drop in 2014 on One-Time Expenses

DETROIT – FCA US, formerly Chrysler Group, reported Wednesday a drop in net income to $1.2 billion for 2014, compared to a net profit of $2.8 billion in 2013, reported MLive.

That came despite a rise of 15 percent in revenue to $83.1 billion.

The Auburn Hills-based subsidiary of Fiat Chrysler Automobiles NV said the drop in profit was the result of special, one-time charges. Adjusted items included a $504 million loss stemming from debt repayment on a note held by the UAW Retiree Medical Benefits Trust, and from a $672 million charge for commitments associated with the January 2014 memorandum of understanding signed with the UAW.

The company said on an adjusted basis, net income was up 31 percent to $2.4 billion.

The company’s operating margin was 4.2 percent for 2014, with operating profits of $3.5 billion. FCA US’ operating margin in 2013 was 4.4 percent.

Market share in the U.S. grew 100 basis points to 12.4 percent.

Last week, FCA NV, the parent company of FCA US, reported net profit of 632 million euros, or about $717.4 million, for 2014, driven in part by strong sales of the Jeep brand. The company’s full-year revenues grew 11 percent to 96 billion euros, or about $109 billion.

FCA US’ global vehicle sales 15 percent to 2.8 million units in 2014. Sales in the U.S. were up 16 percent.

Also on Tuesday, FCA US also released a 14 percent rise for the month of January to 145,007 units.

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RouteOne Doubled Procesed eContracts in 2014

SAN FRANCISCO — At the NADA Convention and Expo, RouteOne announced that it more than doubled the amount of econtracts processed in 2014 to 1.55 million contracts. The technology firm attributed the growth to widespread adoption by more than 4,600 dealers and increased finance source participation.

“Early last year we announced a 2014 goal to double our prior annual volume of 700,000 [contracts processed],” said Mike Jurecki, RouteOne CEO. “We hit the goal and the vast majority of the credit goes to our customers, including very strong support from Toyota Financial and Ford Motor Credit. Last year the right tipping point occurred between supporting dealers and finance sources, and econtracting really took off as a result.”

In addition to overall volume, the number of econtracting finance sources available through RouteOne also doubled from six to twelve. Participation grew and continues to do so because of the benefits it provides, such as faster funding and reduced errors, officials said.

Another growth driver was the launch of DiscountOne, a solution for finance sources that want to econtract but are not ready to make the full integration investment.

Company officials said they expect to double the number of econtracting finance sources in 2015, with the company expecting to bring the total count to approximately 20 in the coming months.

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U.S. New Auto Sales at Highest Level Since 2006

DETROIT – Sales of new vehicles in the U.S. last year grew by 6 percent to 16,522,000 units, according to AutoData Corp., marking the highest rate since 2006, reported MLive.

For the Detroit Three, sales rose for both General Motors, which sold more vehicles in the U.S. than any other automaker in 2014, and for FCA US, formerly Chrysler Group, which has had 57 straight months of sales growth.

Ford’s sales were flat, although the Dearborn automaker expected a slower pace as it completely retooled some of its facilities for an unprecedented roll-out of a revamped F-150, its best-selling vehicle.

Here’s how the top eight automakers’ sales fared in 2014 vs. 2013, per AutoData Corp.:

  • GM – Up 5.3 % to 2,935,008 vehicles sold
  • Ford – Down 0.6 % to 2,471,315
  • FCA/Chrysler – Up 16.1 % to 2,090,639
  • Toyota – Up 6.2 % to 2,373,771
  • Honda – Up. 1.0 % to 1,540,872
  • Nissan – Up 11.1 % to 1,386,895
  • Hyundai – Up 0.7 % to 725,718
  • Volkswagen – Down 2.9 % to 552,720

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Jeep Meets Goal of 1 Million in 2014 Sales

Jeep, the SUV brand that is key to Fiat Chrysler Automobiles’ global expansion plans, narrowly met its goal of selling one million vehicles in 2014, the Jeep brand chief said on Tuesday, reported Reuters.

Jeep’s worldwide sales were 1,017,019 last year, up 39 percent from 2013 and a record for the brand.

Sales rose 41 percent in Jeep’s biggest market, the United States, to 692,348.

Mike Manley, chief executive of the Jeep brand, in a phone interview with Reuters did not venture a specific sales forecast for 2015 sales. He said, Jeep plans to “continue the growth.”

Sergio Marchionne, CEO of FCA, said last May that global production of Jeep will rise to 1.9 million vehicles by 2018. Of that, one million is to be produced in North America, 500,000 in Asia, 200,000 in South America and 200,000 in Europe.

Marchionne and Manley made selling one million Jeep vehicles in 2014 a stretch target last January.

Manley said 2015 Jeep sales will helped by the start of production of the Cherokee in China in the third quarter of the year and in Brazil in the second quarter.

Jeep sales in China, the world’s biggest automobile market, rose 49 percent in 2014 from a relatively low base, to 88,000. Manley said 132,000 Jeeps were sold in Asia.

South American sales represented only about 2 percent of the global sales total last year. The region’s biggest markets, Brazil and Argentina, continue to suffer from economic woes, but South American Jeep sales should rise in 2015 thanks to local production, Manley said.

Jeep sales gained 40 percent in Europe, where the small SUV Renegade began sales in November in 28 countries. Manley said the start of sales was “very encouraging” for the vehicle he said is a better fit for European consumers than the larger Grand Cherokee and Cherokee.

Renegade sales launch in the U.S. market in the first quarter.

Aaron Bragman, analyst with Cars.com, said the Renegade will sell well in the United States, particularly to young drivers.

“You will see one of these in every high school parking lot in the country,” said Bragman of the Renegade.

Top-selling models globally for the brand were the Grand Cherokee at 279,567, followed by Cherokee at 236,289, Wrangler at 234,579, Compass at 134,629 and Patriot at 122,387.

Manley said FCA’s plans are to “start the replacement of” Compass and Patriot in 2016.

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Loan Amounts Reach Record Highs in Q3

SCHAUMBURG, Ill. — The average dollar amount for both new and used vehicle loans reached all-time highs in the third quarter of 2014, according to Experian Automotive’s latest State of the Automotive Finance Market report. The average loan amount for a new vehicle was $27,799 in the third quarter of 2014, up $1,080 from the previous year. Used vehicle loans increased $676, reaching $18,576 over the same time period.

With the continued growth in loan amounts, the quarterly findings also showed consumers leasing at a higher rate, as well as taking out longer loans. The report found that leasing accounted for 29.1% of all new vehicle financing in third quarter 2014, up 7.1% from a year ago. New vehicle loans in the 73- to 84-month range grew by 23.7% in third quarter 2014 compared with the previous year, while used loans in the same range grew by 18% from a year ago.

“Car buyers tend to shop with a monthly payment in mind. As a result, we are continuing to see them turn to leasing and longer loan lengths as strategies to keep payments down and make vehicles more affordable,” said Melinda Zabritski, senior director of automotive finance for Experian. “As car values continue to reach new heights, these insights will help dealers, lenders and consumers become more aware of the options available to them to keep people buying cars, all while staying within their budgets.”

Furthermore, the report found that the average monthly payment for new and used vehicle loans increased from the previous year. The monthly payment for a new loan reached $470, up $12 from a year ago, while the monthly payment for a used loan reached an all-time high of $358, an increase of $8 over the same time period.

Additional findings from the report showed that interest rates for new vehicle loans increased slightly in the third quarter, climbing 4.7% from a year ago. However, despite the growth, these rates have decreased each quarter in 2014. Interest rates for used vehicle loans decreased to 8.5% in the quarter.

“As consumers explore the different options available to them to keep their monthly payments low, they have to remember interest rates often can play a factor. Making timely payments and becoming a low credit risk are the easiest ways to ensure a low interest rate,” continued Zabritski. “For example, the average interest rate for super-prime consumers on a new loan was 2.6%, compared with 12.7% for deep-subprime consumers. Understanding how on-time payments influence credit scores, can help consumers improve their financing experience.”

The report also noted that the average credit score for a new vehicle loan was 713 in the third quarter of 2014, down 3 points from a year ago, while the average credit score for a used vehicle loan rose 2 points to 650.

Captives were the only lender type to see an increase in market share year over year, up 28.9%. Meanwhile, a record-high 54.1% of all used vehicle transactions were financed, up from 52.6% in third quarter 2014. For new vehicles, 84.8% of all transactions were financed in third quarter 2014, which was unchanged from the previous year.

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U.S. November Auto Sales Pace Best Since 2003

The top six automakers sold more cars and trucks in November than analysts expected, with a healthy economy, generous discounts and low fuel prices luring consumers into U.S. showrooms, reported Reuters.

The industry’s annualized sales rate in November was about 17.2 million vehicles, according to industry consultant Autodata Corp. That is the best pace for that month since 2003 and well ahead of the estimated 16.7 million in a Thomson Reuters survey of 41 industry economists and analysts.

November sales totaled 1.3 million, up 4.6 percent from a year ago and higher than analysts’ expectations of 1.27 million.

“This sustained demand for new vehicles was building for years during the recession, and it should continue unless a major shift in economic stability occurs,” said analyst Karl Brauer of Kelley Blue Book.

General Motors Co, Chrysler Group, Toyota Motor Corp and Honda Motor Co all reported year-to-year sales gains in November, while Ford Motor Co and Nissan Motor Co Ltd had modest declines. All six topped forecasts from analysts surveyed by Reuters.

Early buzz and promotions tied to the post-Thanksgiving “Black Friday” retail blitz helped spur car sales, according to John Krafcik, president of online shopping service TrueCar.com. Krafcik said average transaction prices on full-size pickups in November topped $40,000 for the first time.

GM on Tuesday said November sales rose 6.5 percent to 225,818 vehicles. Sales of GM’s Chevrolet Silverado and GMC Sierra full-size pickups climbed 34 percent to 65,343.

“Lower gasoline prices are helping the entire market, not just SUVs and trucks,” said GM spokesman Jim Cain, who also cited improving consumer confidence, higher wages and lower unemployment.

Chrysler Group sales rose 20.1 percent to 170,839 vehicles on strong showings by its Jeep utility vehicles and Ram trucks. Ram pickup sales were up 21 percent, while Jeep SUV sales jumped 27 percent.

Ford reported a slight decline in sales to 186,334 vehicles, about what analysts had expected. Sales of the best-selling F-150 pickup were down 10 percent to 59,049 as the automaker began a changeover to the redesigned 2015 model.

Ford chief economist Emily Kolinski Morris said plunging fuel prices have provided a “financial windfall” for buyers, bolstered by still-low interest rates.

“By any measure, households are reaping significant disposable income gains each week at current gas prices,” she said.

Toyota said sales rose 3 percent to 183,343, while Honda reported an increase of nearly 9 percent to 121,814. Nissan said sales were down 3 percent to 103,188. All three companies beat analysts’ expectations.

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