Trade News

PSA Peugeot Citroen’s joint venture with Dongfeng Motor Group reduced first-half losses by 49 percent after downsizing and streamlining operations. 

The partnership -- Dongfeng Peugeot Citroen Automobile – lost 1.3 billion yuan ($187.3 million) in the first six months, according to information Hong Kong-listed Dongfeng disclosed this week. 

A prolonged sales slump at the joint venture, which produces and markets Peugeot and Citroen passenger vehicles, has resulted in steady annual losses. 

In the first half, sales at Dongfeng Peugeot Citroen plunged 63 percent to 23,237. Revenue fell 57 percent to roughly 30 billion yuan during the period. 

With a lack of new or redesigned products, the joint venture’s annual sales have shrunk from around 700,000 in 2015 to some 113,600 in 2019.

The company closed one of three assembly plants in the central China city of Wuhan and trimmed its work force in late 2019. 

Dongfen…

Roughly 55 percent of dealerships across China believe the new-vehicle market will shrink 10 percent or more in 2020 because of the impact of the coronavirus outbreak, according to a survey by the China Automobile Dealers Association. 

Just 29 percent of the 29,773 dealerships polled across the country expect the market to grow this year, the survey released this week shows.

In the first six months, just 21.5 percent of dealerships recorded sales increases, of which 60 percent were stores marketing luxury brands. 

More than 30 percent of dealerships reported sales declines of more than 30 percent. 

As a result, while 29 percent of dealerships were profitable in the first half, 38 percent reported losses. The remaining 33 percent managed to break even, according to the survey.

Hit hard by the virus outbreak, sales of new light vehicles in China, including sedans, crossovers, SUVs, multipurpose vehicles and minibuses,…

Join Automotive News Publisher Jason Stein for a daily podcast series about the coronavirus crisis. He’ll speak with industry experts, insiders and Automotive News reporters about how the virus is impacting and reshaping the automotive industry.

Mitsubishi's North America CMO Kimberley Gardiner discusses marketing strategies amid the pandemic, the automaker's new headquarters in Nashville, and recruiting industry outsiders as the brand looks to reemerge as a contender in the U.S.

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Editor's note: An earlier version of this story did not correctly attribute a statement made by CFO Mark Jenkins. The attribution is now correct.

Used-car retailer Carvana Co. posted a relatively sharp recovery in the second quarter after getting hit by the coronavirus pandemic, but now it faces constraints similar to those of its traditional peers.

Carvana on Thursday said revenue grew 13 percent to $1.12 billion in the second quarter. Retail sales rose 25 percent to 55,098. And the company's net loss increased 66 percent to $106 million.

Carvana said in a letter to investors that its sales rebounded in late April, with a growth rate of about 40 percent later in the quarter after recovering from low activity resulting from the pandemic.

One silver lining of the outbreak for Carvana: It has moved more consumers to shop for cars and trucks online. It also led more traditional retailers to more swiftly adopt an online retail platform.

"Sudden…

DETROIT -- After emerging from bankruptcy in late May, longtime supplier Dura Automotive once again has new owners.

Lexington, Ky.-based private equity firm MiddleGround Capital acquired a majority stake in the body systems supplier from Bardin Hill Investment Partners.

Terms of the deal were not disclosed, but according to MiddleGround's website, the firm's investments range from $75 million to $250 million. According to a press release, two of Middleground's partners are Toyota Motor Corp. veterans.

“We have been searching for an opportunity to invest in a business as well-positioned as Dura to capitalize on the most disruptive trends in the automotive industry," partner John Stewart said in a statement. Stewart spent 18 years at Toyota. "From today’s focus on electrification of the powertrain and vehicle lightweighting to some of the longer-term shifts toward autonomous driving and connected car, Dura is and will continue to be a driving force in an …

Advanced driver assistance technology that automates steering and braking in a growing number of vehicles is not providing reliable safety benefits, a new study by the American Automobile Association showed on Thursday.

Researchers at AAA, a federation of North American motor clubs, found that the systems recorded disruptions and disengaged roughly every eight miles, encountering situations they were not equipped to handle.

That creates dangerous situations if drivers rely too much on the technology and stop paying attention to the road, the AAA researchers said, adding that the systems are "far from 100% reliable."

"AAA has repeatedly found that active driving assistance systems do not perform consistently, especially in real-word scenarios," Greg Brannon, AAA's director of automotive engineering and industry relations, said in a statement.

Automakers are accelerating the automation of routine driving tasks such as cruising on a highway and stop-…

BorgWarner Inc. swung to a net loss of $98 million compared with a gain of $172 million in the year-earlier period as the ongoing COVID-19 pandemic disrupted its global production levels, the company said Wednesday.

BorgWarner joins several auto suppliers, including Adient and Tenneco, expected to release second-quarter reports this week.

The supplier of turbochargers and electric motors said revenue for the quarter fell 44 percent to $1.43 billion as a result of production slowdowns and shutdowns brought on by the pandemic. BorgWarner's engine-segment sales tumbled 47 percent to $826 million, while drivetrain-segment net sales dropped about 39 percent to $607 million, the company said in a statement.

Shares of BorgWarner rose 4.6 percent to $38.85 in midday trading on Wall Street. The company's results exceeded Wall Street forecasts.

"We met the challenges of managing costs and cash during the production shutdown while ensuring the ability to su…

CEO Jim Hallett had braced for the second quarter to be far worse. "We started the quarter with all of our businesses shut down," Hallett said in an earnings call Wednesday.

KAR Global reported a net loss of $32.3 million for the second quarter, vs. a net income of $27.4 million in the year-earlier period, on revenue that fell 42 percent to $419 million. Its adjusted earnings before taxes and depreciation fell 41 percent to $80 million.

The company's business was brought to a halt March 20, when it suspended all auction sales in North America because of the coronavirus pandemic. It began doing simulcast-only sales in select markets April 6.

Its auction volume was minimal at the beginning of April, and the company prepared for a gradual recovery over the rest of the year.

"What actually happened was volumes picked up week over week, consistently, beginning in mid-April," Hallett said.

Business further rebou…

Join Automotive News Publisher Jason Stein for a daily podcast series about the coronavirus crisis. He’ll speak with industry experts, insiders and Automotive News reporters about how the virus is impacting and reshaping the automotive industry.

Ford's chief marketing officer and president of the Lincoln brand discusses how dealers are influencing Ford's and Lincoln's marketing efforts. She also shares the planning details that went into the 2021 Bronco SUV reveal.

How do I subscribe?

Can't wait to hear the next episode of "Daily Drive"? Subscribe through a podcast app to receive episodes days in advance. If you don't have a podcast app already, here are some options. 

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Ford Credit posted a $500 million profit for the second quarter, down 38 percent from $800 million in the second quarter of 2019, the lender said last week, thanks in part to lower value projections for active leases. Ford Motor Co.'s finance arm, at the same time, says it is encouraged by positive developments in consumer finances and spending habits.

The result marks a departure from a plunge in first-quarter profits, which the company attributed to efforts to bolster credit-loss reserves — funds set aside for auto loans it doesn't expect will be repaid — during the coronavirus pandemic.

Ford CFO Tim Stone told investors last week that the captive lender provided payment extensions to an unprecedented 361,000 customers, representing11 percent of its customer base, through May. As of July 28, 84 percent made their scheduled payment by the due date, 12 percent made payments and opted to extend the relief period, and 1 percent received an addi…

Finance-and-insurance profit per vehicle rose for all six publicly traded dealership groups in the second quarter as the industry absorbed the continuing impact of the coronavirus pandemic on operations.

Earnings at the public dealership groups took a hit from the pandemic, though many reported better-than-expected figures for the quarter thanks in large part to early adoption of digital tools. After a swift transition in a challenging environment, retailers say hurdles remain in digitizing the F&I component in particular.

AutoNation Inc., the retailer with the highest same-store F&I profit per vehicle, said its digital F&I product penetration is not yet on par with in-store metrics.

"We have it, I would say, perfected in the stores," AutoNation CEO Mike Jackson said on a call with investors last month. "There is still work to do in the digital world on those products."

Jackson said last quarter that the ret…

Big incentives from General Motors helped GM Financial increase auto loan originations by double digits in the second quarter, even as many dealerships had to temporarily close or limit operations because of the coronavirus pandemic.

GM's captive finance arm said in a statement last week that auto loan originations rose 22 percent from the same period of 2019 to $8.7 billion. Generous incentive programs geared toward prime credit buyers, including 0 percent financing for 84 months and 120-day payment deferrals, drove much of the growth.

"That attracted very strong traffic into the showroom," CEO Dan Berce told Automotive News. Many customers who didn't qualify for the 0-for-84 offer took advantage of other promotions through GM Financial, he said.

GM Financial provided floorplan financing for 30 percent of GM dealers in the quarter, up from 27 percent a year earlier. Floorplan dealers are more likely to finance auto loans through G…