THE WEEK THAT WAS: Financial results: the good, the bad and the ugly
There were more financial results out this week and it was another mixed bag. General Motors' latest black ink was, overall, good. It's still making big profits, mainly based on healthy North American business and continued progress in Asia (especially China where it sold, with its JVs, over 300,000 units in January). Europe's a problem for GM, but that's been the case for a while now, no easy solutions. Also in the good pile was Jaguar Land Rover.
The bad? Well, Renault wasn't looking too clever, especially in Europe. It got a boost on its bottom line from its Nissan shareholding and the disposal of Volvo shares. Renault profit was down, but at least Renault was in profit. And it is part of a strategic alliance that is absolutely vital to its future. Renault's net debt has gone now, also (for the first time since alliance with Nissan formed in 1999). Alliance partner Nissan is probably in the 'bad' club also, as it feels the adverse effects of lower sales in China.
The ugly? Well that prize has to go to Renault's cross-town rival, PSA, for posting an eye-watering EUR5bn loss for 2012. To be fair, it's not quite as bad as it at first looks. A lot of that loss is made up of asset write-downs and the company says it is getting leaner and meaner. "Not as bad [figures] or as catastrophic as I thought," Metzler Bank automotive analyst, Juergen Pieper, told just-auto from Germany. "It is a little bit better than expected on the liquidity side, on the cash flow side.” In ten years' time, will we be talking about how well the GM-PSA alliance is looking? I wonder.
A bootload of company financial results are gathered here.
The situation in France remains quite tense, sensitive negotiations taking place on cost-cutting. Here's a good summary of the latest position.
It's all very different in China isn't it? They may be choking on the polluted air in some of China's cities, but the appetite for cars remains very strong. In fact, January turned in a record level of seasonally adjusted annualised sales: 24m. Talking of air quality in cities, the London Congestion Charge is approaching its tenth birthday (doesn't time fly?). It was controversial when it came in, but there seems to be a general consensus that it has been – overall - a good thing. London's mayor, the irrepressibly exuberant Boris Johnson, has suggested taking things a whole lot further in 2020. The suggestion that only ZEVs and ULEVs would be allowed in central London will certainly trigger a lively debate (which keeps him in the news, maybe what he wants...).
Still on the environmental theme, there's a dispute in Europe over standards for the refrigerant in car air-con systems. This week the SAE gave its seal of approval to a new low-CO2 refrigerant developed by Honeywell that the EU wants to make mandatory. Daimler isn't happy. What is HFO-1234yf? The background is here.
There was also a bit of discussion over turbochargers and downsizing, prompted by an article in a US consumer mag suggesting that the efficiency benefits are exaggerated. Something to watch, but I think I agree with BorgWarner's assessment on the implications of one article. Ah, the vagaries of real-world testing - which reminds me of the NYT/Tesla spat. Musk is not happy and I have heard that he may well be on solid ground (deja vu with this one; Top Gear and a Nissan Leaf).
We have also learned a little more about the new Chinese luxury car brand coming to Europe, Qoros. Breaking into Western Europe's premium brand car segment is no walk in the park – just ask Lexus or anyone who was at Saab, or has tried to market Cadillacs to 'people who want to be different'. There aren't enough of them. European consumers are very attached to the German premium trinity – BMW, Mercedes and Audi. Qoros won't find it easy, but it will be interesting to see how the cars are pitched. An array of talented people – many recruited from European OEMs - are running the Qoros show. The Qoros 3 Sedan certainly looks nicely styled. That said, I'd rather have one of these. We can all dream can't we?
Have a good weekend.
Dave Leggett, Editor, just-auto
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