Mechanics Hate Us

The North American automotive industry is experiencing a turnaround, and GM is no exception. Two billion dollars in third-quarter earnings (and a $ 1.20 earnings per share increase) back this up for GM. Thanks to this success, General Motors is optimistic that following week’s original public offering of stock will even trend well.

GM $2 billion 3Q profit largest since bankruptcy

$2 billion in profits reported by GM is great. It is the best quarter since the bankruptcy in July 2009 that GM has seen. The profit margin has gone up since sales incentives were taken away and operating costs were lowered. The upcoming $13 billion IPO is more likely to go via with the results looking so great. The company predicts that 2010 as a whole could be profitable, the very first time it has produced such results since 2004, writes Reuters. This is the 3rd consecutive quarter in 2010 where cash earnings in North The US have increased. This is within the third quarter of 2010 of course. There aren’t many sales internationally though. General Motors CEO Dan Akerson has seemed concerned since General Motors is losing so much to Europe.

“We still have to fix Europe,” he said in a statement. “We continue to be vigilant in reducing cost in the enterprise, and we have just started doing a better job in marketing our brands to consumers.”

Beginning with investors

The automakers IPO has caused GM to cut costs and get Europe ready for a future growth market as part of a sales pitch. Common and preferred shares could be offered, which will enable the U.S. Treasury to cut its stake within the business from 61 percent down to 43 percent.

There’s still a fourth quarter ahead

GM’s fourth quarter should prove to be productive, as the Chevrolet Cruze compact will be introduced to compete against the Honda Civic and Toyota Corolla. The Cruze is expected to help General Motors considerably. Reuters writes the automaker will stay at the top within the U.S. as a result of this. There had been a $1.7 billion profit made by Ford within the 3rd quarter getting them into second place. Chrysler on the other hand had an $84 million net loss putting it at the end of the line.

Don’t worry about auto car loans rates

Articles cited

ABC News

abcnews.go.com/Business/wireStory?id=12106358

FOX Business coverage of GM 3Q profit

youtube.com/watch?v=GcEekJp6490

Lots of of us are speculating about GM’s future. In case you take all the press stories at coronary heart, you would think that Normal Motors is on life support. Fairly frankly, the other is true particularly if you take a look at the global picture. In 2005, “the General” offered greater than 9 million vehicles worldwide, the first time the automaker reached that determine since 1978. Yes, U.S. auto sales are down and a few are calling for GM to cut back its many brands, at the moment numbering 8. Who ought to GM let go? Or, ought to General Motors stick to the game plan and preserve all eight brands?

For the file, GM’s eight manufacturers are: Cadillac, Buick, Pontiac, Chevrolet, Saturn, GMC, Hummer, and Saab. You could take Saab out of that pack as the Swedish automaker (although totally owned by GM) builds few cars in North America. Still, GM consists of Saab in its advertising schema so we’ll keep them in for argument’s sake.

Clearly, Cadillac is GM’s luxurious division; Chevrolet is it’s budget or “All American” division; whereas GMC is the truck division. Beyond that, there may be a lot muddling of divisions, however Buick is a maker of “close to luxurious” vehicles (Cadillac lite) while Hummer is GM’s specialty truck division. The Saab line is a bit complicated because it as soon as was a true European division. Now, the make is chiefly that includes rebadged GM and Subaru autos with little authentic models to show for it. Lastly, Pontiac and Saturn duplicate a lot of what the other divisions do, though the Saturn mystique of “no haggle pricing” provides the make a sure aura to it. That leaves Pontiac.

Pontiac, just like the lately killed off Oldsmobile title, might be some of the weak of the true “American” makes. Saturn will survive as a result of its seller network is tops and shopper satisfaction ranks up there with Lexus.

Finally, the Saab identify will probably die first. Outside of the U.S., significantly in Europe, Opel is a known identify and an essential GM make. Word has it that a few of Saab’s manufacturing will shift to Germany and sure rebadged Opels will start to sport the Saab name.  Let’s simply say once that happens, there may be little reason to proceed making Saabs. Let the Saab identify die with dignity. Why spoil it by promoting rebadged Opels as Saabs?

Personally, I think GM should go away properly enough alone with its remaining American brands. I wasn’t in favor of Oldsmobile’s demise and I’m not in favor of killing off trusted brands. GM is retooling its operation as old fashions are killed off and as new or revived models step in. Look for the Chevy Camaro, Pontiac Firebird, Saturn Sky, and the Buick Enclave to assist spark their respective divisions to renewed glory. Am I residing a pipe dream? Perhaps, but no less than my imagination goes in a constructive direction.

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General Motors is going through a cataclysmic change, one which will certainly pull the company out of its current monetary predicament or result in bankruptcy, even the probable dissolution of the company. In a quest to right the listing ship, the company is divesting itself of several brands including its share of Isuzu, Fuji Heavy Industries [Subaru], and others. as its wholly owned brands, speculation has been rife that one, 2, maybe even three brands could be discontinued or sold. Two of the most discussed makes for possible divestment are Hummer – the niche military-style SUV brand – and Saab – the Swedish automaker. Though both brands are currently fairly weak, GM has maintained that the two makes will not only survive, but receive fresh product and backing. Let’s take a look at two of GM’s most exposed brands and what the company could have in store for each one.

Saab — Saab fans have been highly disappointed ever since General Motors snapped up the Swedish automaker back in the early 1990s. Admirer’s hopes that the brand would receive some deep pocket support haven’t quite worked out the way many would have wanted it to. Instead, the Saab brand is just a shell of its former self with many models based on other automaker’s platforms including the Subaru provoked 9-2x and the GMC impressed 9-7x.

Saab’s future more than likely rests with Opel, GM’s large EU brand based in Germany. Future production of some Saab automobiles is probably going to go to Germany with rebadged Opels being sold as Saabs. For the long term, look for each single Saab model to based on someone else’s technology, effectively ending what was once a a novel Swedish brand.

Hummer — Desert Typhoon gave rise to the Humvee and shortly after the war ended, the AM General company began to produce civilian versions of its military vehicle to fulfill consumer demand. By the late 1990s, General Motors bought the rights to the Hummer name, but GM still depends on AM General to provide the two largest models, while building the H3 itself.

Despite purposely low sales, the Hummer name has managed to prosper. Celebs , monetary moguls, and common-or-garden voters have been interested in the brand which has given GM a bit of a “halo” effect. With gas prices soaring, demand will actually drop for the larger Hummers, but GM may counter that with stronger emphasis on the H3 and the development of the H4, a vehicle allegedly very similar to the compact Jeep Wrangler.

Of course, not most are satisfied with GM’s plans with the 2 brands, but then again these are not ordinary times for the struggling automaker. In time, GM’s plans might be refined and Saab could still be sold, especially if Swedish interests step forward. In all, GM is trying to right its listing ship without peeling off too many brands. Will it work? That is difficult to say, but if you are a fan of the GM you actually hope that it will.

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Auto makers trim their line-ups

The auto sector is experiencing continuing tough economic conditions. The auto industry will have to come out the other side with a new look, and a new approach to doing business. How cars are made and sold isn’t going to revert to older habits. GM, Honda, and other auto manufacturers are discontinuing models or brands that don’t perform. GM has killed the Pontiac line, for example. Honda stopped making the S2000 roadster, and other automakers are following suit with similar models.

Clearance Sales are not always Deals when it comes to Cars

Normally, retail clearance sales of discontinued items can be great buys. The discounts are good enough to justify the purchase. That said, cars are more complex in how they fit in the sales model. Automobiles need to retain a residual value, how much they are worth for later resale, to be considered good investments. Discontinued car lines have a difficult time holding their residual market value because of a lack of demand and a lack of replacement parts and available service and warranty options. Once the particular discontinued model is out of the mainstream, very few people are interested in buying an old model. Combined with difficulties in parts and service and you get very little market value.

Separating the Good Deals from the Bad

The key to determining which discontinued models are the best deals is good solid research. There are plenty of resources where one can find out what analysts think the car’s future value might be. KBB.com, U.S. News’ car ranking site and Edmunds.com are a few good places to find out valuable information on how much the car is worth. These sites have valuable information about cars, such as quality and reliability, that affects resale value. Residual value only matters if you intend to trade or sell the car at some point. If a person is planning on keeping the car for a long time, residual value might not be a factor. The car won’t be worth a significant percentage of it’s sale value, anyway.

To Re-sell or not to Re-sell

The buyer has to have a plan in place before making the decision to buy a discontinued car model. If the plan is to keep the auto for 8 or 10 years or more, then residual value isn’t a consideration, but warranty and service are. Ask the dealer if the warranty will be honored after the model is discontinued. Also, ask if the warranty can be extended afterward. Many parts are universal on a lot of models, but an important question to ask is whether or not replacement parts will be available 5, 8, or 10 years down the road. If the buyer’s plan is to get a bargain price and then re-sell or trade in the vehicle, residual value comes back into play. No matter what the plan, research plays a key role in providing reliable information the buyer can use to get the best deal possible.