ROME (Reuters) - The Italian government will approve a major aid package for the auto industry on Friday, Claudio Scajola, Italy's development minister, said on a talk show on Tuesday.
The debt-laden government had promised a package of aid for the first part of February, but had given no details.
Media reports said the government led by Silvio Berlusconi could be looking at incentives for buyers of around 300 million euros ($386 million). Others added that fiscal breaks and financing could be added in a way to bring the total amount above 1 billion euros.
Scajola added that the Cabinet would approve measures to support not just automakers but also other sectors of the industry. He said the measure will be "innovative" but did not elaborate.
Italy's car sales could fall 17 percent in 2009, after a 13 percent drop in 2008. Fiat (FIA.MI) Chief Executive Sergio Marchionne warned in January that 60,000 jobs could be at risk.
2009年2月3日星期二
Auto sales worst in 26 years
NEW YORK (CNNMoney.com) -- Auto sales tumbled 38% in January, plunging even more than expected to their worst levels since 1982 as a pullback in purchases by rental car companies became the latest problem for the troubled industry.
General Motors (GM, Fortune 500) reported that its sales plunged 49% from a year ago. Ford Motor (F, Fortune 500) said sales fell 39% at its Ford, Lincoln and Mercury brands, and 40% overall when including sales at Volvo, which Ford is trying to sell. Chrysler LLC reported a 55% drop in sales.
But it wasn't just the U.S. automakers reporting sharply lower sales. Toyota Motor (TM) reported a 32% decrease in its U.S. sales, while sales at Honda Motor (HMC) tumbled 28%. Nissan (NSANY) sales fell 30%.
"We are facing unprecedented times in the industry, and no auto company is immune from current market conditions," said Dick Colliver, executive vice president of sales for American Honda, in a statement.
The sales results were all worse than forecasts from sales tracker Edmunds.com, which had predicted that GM's sales would tumble 38%, along with a 30% drop at Ford and a 48% plunge at Chrysler. It had also forecast a 25% decline at Toyota, a 23% drop at Honda and a 28% decrease at Nissan.
Overall, Edmunds.com was expecting a 30% decline in year-over-year sales for the industry
Sales tracker Autodata said the seasonally-adjusted annual sales rate, or SAAR, fell to 9.6 million from 15.4 million a year earlier. That is the first time it has been below the 10 million mark in more than 26 years. GM's director of sales analysis Mike DiGiovanni said that January will mark the first month on record that auto sales in the United States trailed sales in China.
The dismal January sales, which were down 27% from December, are an indication that the problems that almost drove GM and Chrysler into bankruptcy last month show little signs of letting up.
Big drop in rental car salesExecutives at all three U.S. automakers said the decline was due primarily to significantly lower fleet sales to large business customers, such as rental car companies.
The plunge in demand for travel and rental cars caused leading companies such as Enterprise and former Ford unit Hertz (HTZ, Fortune 500) to pull back on their purchases last month.
As recently as December, fleet sales made up 22% of total industry sales, said George Pipas, Ford's director of sales analysis. But he added that industrywide fleet sales plunged 65% to 70% in January from year-ago levels, and that they would account for no more than 12% of total industry sales in January.
GM said its fleet sales fell 80% in the month, and that only 1,000 cars out of 12,000 total fleet sales went to rental companies. Chrysler reported a 81% drop in fleet sales, and Ford's fleet sales were off 65% in January.
Chrysler Vice Chairman Jim Press said during a conference call that Chrysler deliberately moved away from fleet sales to concentrate on sales to consumers, which is more profitable. He said it is better to shut plant capacity than keep them running to supply the rental industry.
"It's much healthier to have good, retail sales," he said.
But Mark LaNeve, vice president of sales for GM North America, said that while GM has also been backing away from fleet sales in recent years, it is looking for any sales in this environment.
"We'll take all the [fleet] volume we can get," said LaNeve. "We're aggressively going after it."
Sales to consumers fell sharply as wellThe pain wasn't just in fleet sales though. GM reported a 38% drop in retail sales, while Chrysler retail sales fell 35%. Ford reported that retail sales were down 27% from a year earlier. GM's sales' woes were widespread; out of nearly 100 models, virtually all posted double-digit percentage declines in sales.
GM said that its former finance arm, GMAC, started making more car loans during January after it was granted bank holding company status and received $6 billion in federal funds directed to helping the nation's banks. GMAC provided little financing for GM buyers during the fourth quarter.
"We did get GMAC back in the game," LaNeve said. "We think that bodes well for February and beyond."
But LaNeve said GMAC still provided financing on only about 5,000 vehicles during the month, or less than 5% of its sales, well off of the more than 50% of GM sales it used to finance.
Beyond the credit squeeze, weak consumer confidence also hit sales in the month, according to Jesse Toprak, executive director of industry analysis for Edmunds.com.
He said he doesn't expect sales in the coming months to improve significantly as long as there are so many worries about job losses and the overall economy. People are likely to hang on to their older cars instead of buying new ones.
"A lot of consumers are realizing what they have now is good enough until the dust settles," he said.
Still, Korean automaker Hyundai, which is offering buyers a chance to return a car to the automaker should they lose their jobs, bucked the trend in January. Hyundai sales were up 14% from year ago levels.
"They may have hit a chord," Toprak said. "That may be the new creative way to go for automakers in terms of promotion."
General Motors (GM, Fortune 500) reported that its sales plunged 49% from a year ago. Ford Motor (F, Fortune 500) said sales fell 39% at its Ford, Lincoln and Mercury brands, and 40% overall when including sales at Volvo, which Ford is trying to sell. Chrysler LLC reported a 55% drop in sales.
But it wasn't just the U.S. automakers reporting sharply lower sales. Toyota Motor (TM) reported a 32% decrease in its U.S. sales, while sales at Honda Motor (HMC) tumbled 28%. Nissan (NSANY) sales fell 30%.
"We are facing unprecedented times in the industry, and no auto company is immune from current market conditions," said Dick Colliver, executive vice president of sales for American Honda, in a statement.
The sales results were all worse than forecasts from sales tracker Edmunds.com, which had predicted that GM's sales would tumble 38%, along with a 30% drop at Ford and a 48% plunge at Chrysler. It had also forecast a 25% decline at Toyota, a 23% drop at Honda and a 28% decrease at Nissan.
Overall, Edmunds.com was expecting a 30% decline in year-over-year sales for the industry
Sales tracker Autodata said the seasonally-adjusted annual sales rate, or SAAR, fell to 9.6 million from 15.4 million a year earlier. That is the first time it has been below the 10 million mark in more than 26 years. GM's director of sales analysis Mike DiGiovanni said that January will mark the first month on record that auto sales in the United States trailed sales in China.
The dismal January sales, which were down 27% from December, are an indication that the problems that almost drove GM and Chrysler into bankruptcy last month show little signs of letting up.
Big drop in rental car salesExecutives at all three U.S. automakers said the decline was due primarily to significantly lower fleet sales to large business customers, such as rental car companies.
The plunge in demand for travel and rental cars caused leading companies such as Enterprise and former Ford unit Hertz (HTZ, Fortune 500) to pull back on their purchases last month.
As recently as December, fleet sales made up 22% of total industry sales, said George Pipas, Ford's director of sales analysis. But he added that industrywide fleet sales plunged 65% to 70% in January from year-ago levels, and that they would account for no more than 12% of total industry sales in January.
GM said its fleet sales fell 80% in the month, and that only 1,000 cars out of 12,000 total fleet sales went to rental companies. Chrysler reported a 81% drop in fleet sales, and Ford's fleet sales were off 65% in January.
Chrysler Vice Chairman Jim Press said during a conference call that Chrysler deliberately moved away from fleet sales to concentrate on sales to consumers, which is more profitable. He said it is better to shut plant capacity than keep them running to supply the rental industry.
"It's much healthier to have good, retail sales," he said.
But Mark LaNeve, vice president of sales for GM North America, said that while GM has also been backing away from fleet sales in recent years, it is looking for any sales in this environment.
"We'll take all the [fleet] volume we can get," said LaNeve. "We're aggressively going after it."
Sales to consumers fell sharply as wellThe pain wasn't just in fleet sales though. GM reported a 38% drop in retail sales, while Chrysler retail sales fell 35%. Ford reported that retail sales were down 27% from a year earlier. GM's sales' woes were widespread; out of nearly 100 models, virtually all posted double-digit percentage declines in sales.
GM said that its former finance arm, GMAC, started making more car loans during January after it was granted bank holding company status and received $6 billion in federal funds directed to helping the nation's banks. GMAC provided little financing for GM buyers during the fourth quarter.
"We did get GMAC back in the game," LaNeve said. "We think that bodes well for February and beyond."
But LaNeve said GMAC still provided financing on only about 5,000 vehicles during the month, or less than 5% of its sales, well off of the more than 50% of GM sales it used to finance.
Beyond the credit squeeze, weak consumer confidence also hit sales in the month, according to Jesse Toprak, executive director of industry analysis for Edmunds.com.
He said he doesn't expect sales in the coming months to improve significantly as long as there are so many worries about job losses and the overall economy. People are likely to hang on to their older cars instead of buying new ones.
"A lot of consumers are realizing what they have now is good enough until the dust settles," he said.
Still, Korean automaker Hyundai, which is offering buyers a chance to return a car to the automaker should they lose their jobs, bucked the trend in January. Hyundai sales were up 14% from year ago levels.
"They may have hit a chord," Toprak said. "That may be the new creative way to go for automakers in terms of promotion."
January Auto Sales: Hyundai
Hyundai Motor America was among a few automakers to report growth in January vehicle sales Tuesday, helped by big sales increases for its Sonata and Santa Fe vehicles and attention from its much-touted vehicle return program.
The South Korean automaker said its U.S. sales rose 14.3 percent to 24,512 units from 21,452 units last year. Sales of its top-selling Sonata sedan surged more than 85 percent to 8,508 units, while its Santa Fe sport utility vehicle saw volumes jump by more than a third.
Last month, Hyundai announced that it would cover the depreciation on any returned leased or financed car in a bid to woo consumers nervous about making big-ticket purchases. The automaker said its Hyundai Assurance Program "struck a chord with American consumers during these uncertain times," said Dave Zuchowski, Hyundai Motor America vice president of national sales, in a statement.
Also in January, the Hyundai Genesis won North American Car of the Year at the North American International Auto Show in Detroit. Hyundai said it sold 1,056 Genesis cars in January.
The South Korean automaker said its U.S. sales rose 14.3 percent to 24,512 units from 21,452 units last year. Sales of its top-selling Sonata sedan surged more than 85 percent to 8,508 units, while its Santa Fe sport utility vehicle saw volumes jump by more than a third.
Last month, Hyundai announced that it would cover the depreciation on any returned leased or financed car in a bid to woo consumers nervous about making big-ticket purchases. The automaker said its Hyundai Assurance Program "struck a chord with American consumers during these uncertain times," said Dave Zuchowski, Hyundai Motor America vice president of national sales, in a statement.
Also in January, the Hyundai Genesis won North American Car of the Year at the North American International Auto Show in Detroit. Hyundai said it sold 1,056 Genesis cars in January.
2009年2月2日星期一
Nippon Steel: closely watching auto output plans
TOKYO, Feb 2 (Reuters) - Nippon Steel Corp (5401.T) said on Monday the company would look at revising its production outlook after seeing Toyota Motor Corp (7203.T) and Honda Motor Co's (7267.T) first-quarter output plans due later this month.
"We are closely watching Toyota and Honda's production plans and we will review our plans then," Kiichiroh Masuda, Nippon Steel executive vice president, told Reuters in an interview.
"Depending on their plans, we may further reduce output after April, although we think the chance is small," Masuda said.
Nippon Steel, the world's second-biggest steelmaker, on Friday cut its profit outlook for the year to March by a bigger-than-expected 36 percent and said it would tumble to a loss in the January-March quarter as demand from cars to excavators falls amid the global recession.
"We are closely watching Toyota and Honda's production plans and we will review our plans then," Kiichiroh Masuda, Nippon Steel executive vice president, told Reuters in an interview.
"Depending on their plans, we may further reduce output after April, although we think the chance is small," Masuda said.
Nippon Steel, the world's second-biggest steelmaker, on Friday cut its profit outlook for the year to March by a bigger-than-expected 36 percent and said it would tumble to a loss in the January-March quarter as demand from cars to excavators falls amid the global recession.
Steel tycoon Mittal loses £35bn in eight months
Lakshmi Mittal, who holds a controlling interest in steel manufacturing giant Arcelor Mittal, has seen the value of his stake plummet by £35bn in the past eight months.
Mittal, who is Britain's wealthiest man, has enjoyed huge growth in his business over the past decade, driven by the worldwide construction boom, and particularly the emerging economies of China and India.
His stake in Arcelor Mittal was worth £45bn in June 2008, but with demand for steel falling sharply since then, its value is now barely £10bn
Mittal, who is Britain's wealthiest man, has enjoyed huge growth in his business over the past decade, driven by the worldwide construction boom, and particularly the emerging economies of China and India.
His stake in Arcelor Mittal was worth £45bn in June 2008, but with demand for steel falling sharply since then, its value is now barely £10bn
RPT-POLL-Iron ore price seen falling 30 pct in 2009
LONDON/SEOUL, Jan 28 (Reuters) - Iron ore prices are set to fall in 2009 after six years of price hikes as deteriorating demand triggers severe production cuts in the steel industry, a Reuters poll shows.
The fall will mark an end to a bullish run for miners BHP Billiton (BLT.L), Rio Tinto (RIO.L) and Vale (VALE5.SA) which last year secured hefty prices hikes, some of almost 100 percent.
The trio control about three quarters of the 800 million tonne annual market in seaborne iron ore.
A Reuters survey of 15 analysts conducted in the last week showed Australian iron ore prices are expected to fall by 30 percent in 2009 annual contract talks. As recently as October analysts were forecasting no change from 2008 prices. [ID:nLN671246]
"After six consecutive yearly rises totalling almost 400 percent, iron ore prices are certain to fall due to major collapse in demand," Macquarie analyst Christina Lee said in a research note.
Negotiations between miners and steelmakers to set a benchmark price for 2009/2010 iron ore supply contracts are expected to be fierce, acrimonious and lengthy, as is often the case.
"Even with a 40 percent correction in contract price it will be second highest iron ore price in history and this is one of the worst recessions we've witnessed in 40 years," said Daniel Brebner, global head of commodities at UBS.
Analysts said miners are expected to try to limit a steep fall in the contract price by cutting iron ore output to help balance the market.
But with demand hit so hard in key steel consuming industries such as construction and automotive, steelmakers are likely to have the upper hand.
Analysts said iron ore miners have slashed production to match weakening demand, but not enough to prevent a glut of material.
"You have not seen enough cutbacks on the iron ore supply side," said UBS' Brebner. "We have seen significant cutbacks on steel...that should create a significant surplus on iron ore and thus pressure on price."
Yet Macquarie estimates that prices will not roll back to 2007/2008 levels as at current levels, already down to $80 per tonne from a high of around $200 last year, they remain quite attractive following output cuts by major miners in China.
MORE FLEXIBILITY？
The freight differential between Brazilian and Australian iron ore led to a rare divergence in the 2008 benchmark price and escalated discussions on alternative pricing mechanisms.
Miners have been keen to dump the traditional benchmark system and move towards a more flexible pricing mechanism to better align the dynamics of the steel and iron ore markets.
Several analysts believe steelmakers will want to stick to the existing benchmark system as it brings a certain amount of stability amid volatile prices -- the same reason why some analysts think steelmakers could sign up for more flexibility.
"Our view is that it leaves the way open for Australian iron ore producers to push for more hybrid contracts with linkages to benchmarks, indices and spot trades," said analysts at Royal Bank of Scotland.
"From a consumers perspective, this may not be a bad thing because it would enable them to reduce the cost of iron ore if demand falls further, as well as capture some of the benefit of low freight," it said.
In September, Rio Tinto said it was planning to sell more to the spot market in 2009 while BHP Billiton was in favour of moving away from the traditional benchmark towards index-based pricing mechanisms.
The world's top steel producer, ArcelorMittal (ISPA.AS), said in September that it supported the benchmark system as it provided a certain amount of stability.
Rio Tinto, BHP Billiton and ArcelorMittal were all recently contacted by Reuters but declined to comment.
The $800 billion steel industry was hit it mid-2008, when the price went into free-fall, forcing steelmakers to cut back production sharply, lay off jobs and shelve investment plans.
Global crude steel production slumped by more than 24 percent in the last quarter of 2008. Rio Tinto's and Vale's iron ore output were down by 18 percent and 21 percent respectively.
Collapsing steel prices and demand have knocked down spot iron ore prices around 60 percent since last March -- making it impossible for miners' to come anywhere close to the near-doubling price hikes they have achieved last year.
Asian steelmills including Japan's JFE (5411.T) and major Chinese mills have said they want prices to fall at least to 2007/2008 levels, meaning Australian iron ore should fall by around 45 percent.
The fall will mark an end to a bullish run for miners BHP Billiton (BLT.L), Rio Tinto (RIO.L) and Vale (VALE5.SA) which last year secured hefty prices hikes, some of almost 100 percent.
The trio control about three quarters of the 800 million tonne annual market in seaborne iron ore.
A Reuters survey of 15 analysts conducted in the last week showed Australian iron ore prices are expected to fall by 30 percent in 2009 annual contract talks. As recently as October analysts were forecasting no change from 2008 prices. [ID:nLN671246]
"After six consecutive yearly rises totalling almost 400 percent, iron ore prices are certain to fall due to major collapse in demand," Macquarie analyst Christina Lee said in a research note.
Negotiations between miners and steelmakers to set a benchmark price for 2009/2010 iron ore supply contracts are expected to be fierce, acrimonious and lengthy, as is often the case.
"Even with a 40 percent correction in contract price it will be second highest iron ore price in history and this is one of the worst recessions we've witnessed in 40 years," said Daniel Brebner, global head of commodities at UBS.
Analysts said miners are expected to try to limit a steep fall in the contract price by cutting iron ore output to help balance the market.
But with demand hit so hard in key steel consuming industries such as construction and automotive, steelmakers are likely to have the upper hand.
Analysts said iron ore miners have slashed production to match weakening demand, but not enough to prevent a glut of material.
"You have not seen enough cutbacks on the iron ore supply side," said UBS' Brebner. "We have seen significant cutbacks on steel...that should create a significant surplus on iron ore and thus pressure on price."
Yet Macquarie estimates that prices will not roll back to 2007/2008 levels as at current levels, already down to $80 per tonne from a high of around $200 last year, they remain quite attractive following output cuts by major miners in China.
MORE FLEXIBILITY？
The freight differential between Brazilian and Australian iron ore led to a rare divergence in the 2008 benchmark price and escalated discussions on alternative pricing mechanisms.
Miners have been keen to dump the traditional benchmark system and move towards a more flexible pricing mechanism to better align the dynamics of the steel and iron ore markets.
Several analysts believe steelmakers will want to stick to the existing benchmark system as it brings a certain amount of stability amid volatile prices -- the same reason why some analysts think steelmakers could sign up for more flexibility.
"Our view is that it leaves the way open for Australian iron ore producers to push for more hybrid contracts with linkages to benchmarks, indices and spot trades," said analysts at Royal Bank of Scotland.
"From a consumers perspective, this may not be a bad thing because it would enable them to reduce the cost of iron ore if demand falls further, as well as capture some of the benefit of low freight," it said.
In September, Rio Tinto said it was planning to sell more to the spot market in 2009 while BHP Billiton was in favour of moving away from the traditional benchmark towards index-based pricing mechanisms.
The world's top steel producer, ArcelorMittal (ISPA.AS), said in September that it supported the benchmark system as it provided a certain amount of stability.
Rio Tinto, BHP Billiton and ArcelorMittal were all recently contacted by Reuters but declined to comment.
The $800 billion steel industry was hit it mid-2008, when the price went into free-fall, forcing steelmakers to cut back production sharply, lay off jobs and shelve investment plans.
Global crude steel production slumped by more than 24 percent in the last quarter of 2008. Rio Tinto's and Vale's iron ore output were down by 18 percent and 21 percent respectively.
Collapsing steel prices and demand have knocked down spot iron ore prices around 60 percent since last March -- making it impossible for miners' to come anywhere close to the near-doubling price hikes they have achieved last year.
Asian steelmills including Japan's JFE (5411.T) and major Chinese mills have said they want prices to fall at least to 2007/2008 levels, meaning Australian iron ore should fall by around 45 percent.
2009年2月1日星期日
Senate GOP leader criticizes auto provision in stimulus bill
WASHINGTON -- The Senate's top Republican criticized a key provision for automakers in an $819 billion House stimulus bill.
Sen. Minority Leader Mitch McConnell, R-Kentucky., criticized a provision to give the federal government $600 million to buy more fuel efficient vehicles, calling it "wasteful spending."
He told CBS's "Face the Nation" Sunday that the provision shouldn't be in the stimulus bill, and ridiculed it as "$600 million to buy new cars for government workers."
In the Republican weekly address, McConnell said the provision wouldn't stimulate the economy.
"Turning aside Republican ideas, Democratic lawmakers in the House of Representatives produced a massive bill that many analysts say is unlikely to create new jobs or boost the economy anytime soon. Most of the infrastructure projects it includes won't impact the economy for at least another year. Permanent spending would be expanded by about $240 billion, an increase that would lock in bigger and bigger deficits every year. And the bill is loaded with wasteful spending," McConnell said Saturday.
McConnell didn't mention a separate $400 million provision to help state and local governments buy more efficient and alternative-fuel vehicles.
The House passed the stimulus bill last week 244-178 -- with no Republicans voting in favor of the bill. The Senate takes up the bill on Monday.
Auto sales fell 18 percent in 2009 and collapsed in the last three months of the year. The provision could boost auto sales by about 30,000 vehicles -- though the bill requires the government not to increase the total size of the fleet -- but to scrap older less efficient vehicles in exchange for newer more efficient models.
In total, there's more than $3.5 billion in auto industry programs in the stimulus bills, including $2 billion in battery research funds. Democrats have also called for $300 million to replace and retrofit older, dirtier, diesel engines
Sen. Minority Leader Mitch McConnell, R-Kentucky., criticized a provision to give the federal government $600 million to buy more fuel efficient vehicles, calling it "wasteful spending."
He told CBS's "Face the Nation" Sunday that the provision shouldn't be in the stimulus bill, and ridiculed it as "$600 million to buy new cars for government workers."
In the Republican weekly address, McConnell said the provision wouldn't stimulate the economy.
"Turning aside Republican ideas, Democratic lawmakers in the House of Representatives produced a massive bill that many analysts say is unlikely to create new jobs or boost the economy anytime soon. Most of the infrastructure projects it includes won't impact the economy for at least another year. Permanent spending would be expanded by about $240 billion, an increase that would lock in bigger and bigger deficits every year. And the bill is loaded with wasteful spending," McConnell said Saturday.
McConnell didn't mention a separate $400 million provision to help state and local governments buy more efficient and alternative-fuel vehicles.
The House passed the stimulus bill last week 244-178 -- with no Republicans voting in favor of the bill. The Senate takes up the bill on Monday.
Auto sales fell 18 percent in 2009 and collapsed in the last three months of the year. The provision could boost auto sales by about 30,000 vehicles -- though the bill requires the government not to increase the total size of the fleet -- but to scrap older less efficient vehicles in exchange for newer more efficient models.
In total, there's more than $3.5 billion in auto industry programs in the stimulus bills, including $2 billion in battery research funds. Democrats have also called for $300 million to replace and retrofit older, dirtier, diesel engines
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