Trade News

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.

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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…

FRANKFURT – Daimler says it is deepening an alliance with the Chinese battery maker CATL to deliver battery packs capable of giving Mercedes-Benz cars 430 miles of range at higher recharging speeds.

Daimler already has battery cell supply deals with Korea's SK Innovation, LG Chem and Farasis in addition to Contemporary Amperex Technology, which is known as CATL, as it plans to ramp up production of electric and hybrid vehicles.

Mercedes will launch the EQS luxury electric sedan with CATL cell modules in 2021, with a range of more than 430 miles on the Worldwide harmonized Light vehicle Test Procedure (WLTP) scale.

Wednesday's agreement with CATL said the partnership will include supplying cells and entire battery systems as well as combining research.

"We intend to lead in battery technologies, so we are now combining our own research and development expertise with bold partners," Daimler said in a statement.

"The agreement covers the full …

Amid economic uncertainty from COVID-19, American consumers are more hesitant to buy or lease a vehicle since the outbreak began. Used-vehicle consideration remains down compared with pre-pandemic levels, but it is stabilizing, while new-vehicle intent is decreasing, according to a study by McKinsey & Co.

The consulting firm's COVID-19 Auto & Mobility Consumer Insights study, conducted in seven global markets including theU.S., surveyed approximately 1,200 consumers in the U.S. four times in May through July, of which approximately 400 respondents had intent to purchase or lease a vehicle. It asked them:

1. Before COVID-19, whether they were "not likely, likely or very likely" to buy/lease a new or used vehicle in the next 12 months.

2. Given the current COVID-19 situation, whether they were "not likely, likely or very likely" to buy/lease a new or used vehicle in the next 12 months.

In the latest survey, conducted July 15-17, 70 percent o…

BEIJING -- China sales at Japan's three biggest automakers grew by more than 12 percent in July as the world's biggest auto market continued to recover from the coronavirus outbreak.

Nissan Motor Co. said on Wednesday sales in China rose 12 percent last month from a year earlier to 120,945.

China is a market that Nissan is focusing on as the embattled carmaker struggles to fix problems from ousted leader Carlos Ghosn's aggressive expansion drive.

Toyota Motor Corp. sold around 165,600 cars and light trucks under the Toyota and Lexus brands last month in China, up 19 percent year-on-year. Toyota said deliveries at Lexus rose 38 percent to 22,300 in July.

Honda Motor Co said on Wednesday it sold 136,646 vehicles in China in July, up 18 percent.

The first earnings report for electric-truck maker Nikola was a bumpy one, with executives and analysts trading barbs and investors sending the company’s shares plunging.

The stock fell 18 percent in late trading on Tuesday after Nikola, which is developing big rigs that run on batteries and fuel cells, said it lost $86.64 million in the second quarter, compared with $17.2 million in the same period last year.

Within minutes of Nikola releasing its statement, its founder Trevor Milton posted on Twitter that the Phoenix, Ariz.-based company had provided analysts with figures on its share count. He wrote that taking those figures into account, Nikola beat expectations, contrary to some who said it fell short.

“We actually beat our earnings by 20 percent,” he wrote. “They had the share count wrong. I have zero control as we can’t give out info prior to earnings.”

Analysts responded by pressing CEO Mark Russell on Nikola’s earnings call for more infor…

The outlook for auto sector imports and exports remains uncertain as the industry sorts out the rules of the new North American trade deal, analyzes looming tariff threats and copes with disruption from the coronavirus pandemic, industry experts said Tuesday during a virtual version of the annual CAR Management Briefing Seminars.

Automakers are working closely with the Trump administration to comply with the United States-Mexico-Canada Agreement, but the COVID-19 pandemic has introduced additional timing challenges. The industry was just starting to ramp up production when the deal entered into force July 1.

"The administration has provided us with a 12-month transition period in order for us to fully comply with the new rules of origin, which are significantly different for autos," said Jennifer Safavian, CEO of Autos Drive America, a trade association representing major international automakers. The group, formerly known as Here For America, r…