News

OSHAWA, ON - General Motors is slashing the Canadian sticker price of the Chevrolet Volt as electric cars continue to lag behind their gas-guzzling peers.

The 2014 model of the Volt will start at $36,895, plus more than $1,600 in taxes and fees.

That's about $5,000 off the price of the previous model, which cost $42,000 before fees.

Earlier this month, General Motors knocked 13 per cent off the Volt's U.S. sticker price in a bid to keep pace with rivals in the market for plug-in vehicles. That brought the cost of the U.S. Volt to $34,995 including shipping.

Electric cars were once billed as the answer to high gas prices and dependence on foreign oil, but U.S. oil production has risen while pump prices have remained relatively stable over the past few years.

Plus, gas-powered cars have gotten more efficient, making consumers reluctant to give them up.

All of this has made it difficult for the popularity of electric cars to gain ground. Although sales of electric vehicles are rising, they still make up a small piece of the overall industry.

Automakers have been cutting prices in order to move the vehicles off dealer lots. Sales soared when Nissan reduced the price of its Leaf electric car in the U.S., something which one analyst said Chevrolet must have noticed.

The 2014 model of the Volt will make its debut in Canadian showrooms late this summer and will be available in two new colours, the company said.

"The lower price and cost savings offers Canadians the opportunity to own a Volt with an unmatched balance of technology, capability and cost of ownership," said John Roth, vice-president of sales and marketing for Chevrolet Canada in a statement.

"Since its launch in 2010, the Volt has seen an increase in battery range and the addition of creature comforts, such as standard heated seats and a leather-wrapped steering wheel."

TORONTO - Auto parts maker Magna International Inc. is looking for acquisitions in Asia or Eastern Europe, after facing challenges at its South American operations.

Magna (TSX:MG) said it's interested in snatching up a company with innovative technology that would allow it to grow in markets such as China, Russia and other parts of Asia and Eastern Europe.

"Certainly we will be and have looked at acquisitions to supplement our growth," chief financial officer Vince Galifi told analysts Friday.

"A big focus is technology — what technologies are out there that could supplement what we have, complement what we have, advance what we have. We are also looking at acquisitions that could assist us to grow faster in markets that are a priority to us."

The auto parts manufacturer is taking a more cautious approach to growth in India and South America.

The company said it lost "tens of millions" of dollars on its operations in South America, partly due to high inflation.

Magna, which owns seating companies in Argentina and Brazil, is having issues getting parts in and out of the country, paying for rising labour costs and convincing customers to pay for the inflation-related price increases.

"It is an uphill battle so I don't see us being aggressive in growing our business in a big way in Brazil and Argentina until we have got a good handle on what we are doing down there," Walker said.

"But we are certainly making headway, especially in the operational issues."

Canaccord Genuity analyst David Tyerman said many of the issues, such as problems importing parts, are outside of Magna's control.

"It's not going to derail Magna," Tyerman said.

"But it sounds like it's going to be this little irritant on the sidelines for a while. What they've concluded is that South America isn't as attractive an emerging market as Asia."

Magna is having a tough time finding ways to spend all of the excess cash on its balance sheet, Tyerman said.

"We've all heard our old Bank of Canada governor slamming companies for keeping too much cash around and not investing," Tyerman said. "Well Magna's exhibit A."

The company's first priority has been to build new plants, but that hasn't been enough to use up all of the cash, Tyerman said. They have also upped their dividend in the past and used the money to buy back stock.

A large acquisition could eat up a lot of cash, but the company has had a tough time finding one that suits their needs, bringing together new technologies while expanding their footprint in emerging markets in Asia.

The company, based in Aurora, Ont., beat analyst expectations in the second quarter as it managed to repair some of the operational issues at its European facilities and outperform the market there and raised its sales outlook for the year.

Magna said Friday it currently expects between $33.3 billion and $34.7 billion of sales in 2013 compared with its expectations in May for sales between $32.6 billion and $34 billion.

During the three months ended June 30, Magna's sales rose to US$8.96 billion, up from $7.72 billion a year earlier and a Magna record for the second quarter.

Profit also grew, rising to US$415 million $1.78 per diluted share from $349 million or $1.48 per share a year ago.

The average analyst estimates according to Thomson Reuters had been for sales of $8.795 billion, $1.70 per share of net income and $1.63 per share of adjusted earnings.

Magna, which reports in U.S. currency, said its production sales in Europe were up 14 per cent from the same quarter last year, even though overall European vehicle production was down by one per cent.

The profitability of Magna's European operations tumbled a few years ago, as the company inaccurately estimated the cost of new projects and struggled with issues at some of its plants, Tyerman said.

"Part of the story for Magna going forward is to fix those problems," Tyerman said. "In the quarter they made some decent progress on that."

North America accounted for $4.59 billion of sales during the quarter, while Europe contributed $3.76 billion. The rest of the world accounted for $609 million.

Complete vehicle assembly sales increased 23 per cent to $796 million in the quarter while complete vehicle assembly volumes increased 17 per cent to approximately 39,000 units.

Magna shares closed up $2.15, or 2.68 per cent, to $82.30 on the Toronto Stock Exchange on Friday.

For the 2013 Frankfurt Motor Show, Toyota announced last week that they will be featuring the Hybrid-R Concept. The concept vehicle will carry the Toyota Hybrid System-Racing (THS-R) technology that currently is in the TS030 Hybrid racing in the FIA World Endurance Championship.

The Hybrid-R will be the first street car that has the THS-R system. There is no other information released ahead of Frankfurt except for the logo that Toyota offered up, but it looks like Toyota is a making a little push in the sports car world. 

The TS030 Hybrid has a 3.4-litre V-8 with 530 hp and an additional 300 hp from the electric motor. We will hopefully find out what’s inside the Hybrid-R concept when it will be unveiled at the Frankfurt Motor Show starting September 10th.

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UPDATE

TRAVERSE CITY, MI - Chrysler's manufacturing chief said Monday that a new midsize car should hit dealerships on time next year, following costly delays with recent product launches.

Vice-President Mauro Pino said the new model, a sorely needed replacement for the aging Chrysler 200, should reach showrooms as scheduled in the first quarter. The new car is scheduled to reach dealerships sometime in the first quarter of 2014.

Pino said Chrysler has learned from problems with other product launches. The company recently held up distribution of the new Jeep Cherokee midsize SUV to reprogram the nine-speed automatic transmission to make it smoother. Pino said the software changes are similar to updating a home computer. The Cherokee should reach dealers sometime in September.

"Every time we find an opportunity to do something better, we want to do it," Pino said in an interview at an auto industry conference outside of Traverse City, Mich.

Earlier this year, Chrysler CEO Sergio Marchionne, who also runs Chrysler's parent Fiat SpA, said that delays in new versions of the Ram pickup and Jeep Grand Cherokee contributed to a 65 per cent profit drop in the first quarter.

Pino said Chrysler's huge growth also has parts makers scrambling to ramp up production to match demand. Some of the delays, such as with the Grand Cherokee, happened because the company ran short of parts.

"Sometimes we go too fast for the supply base," he said. "We need to slow down a little bit."

He still expects Chrysler to grow, but not as quickly as it has since its emerged from bankruptcy protection in 2009. Its U.S. sales have grown from a 2009 low of 931,000 to 1.6 million last year. International sales also are growing, with help from Fiat.

Pino, a veteran Fiat manufacturing executive, said Chrysler has adopted Fiat's "World Class Manufacturing" system that trains workers uniformly so they all do jobs correctly and in the same way.

Chrysler has said that because of the delays, a slowdown in Europe and other problems, it doesn't expect to meet the targets it set at the beginning of this year. The Auburn Hills, Michigan-based company now expects to ship 2.6 million vehicles worldwide in 2013, at the low end of its goal of between 2.6 million and 2.7 million. It expects to earn between $1.7 billion and $2.2 billion, down from its previous target of around $2.2 billion.

Chrysler said its net income rose 16 per cent to $507 million in the April-June period from $436 million a year ago. It was Chrysler's eighth straight quarterly profit.

Pino conceded that Marchionne has been unhappy with the previous manufacturing delays.

"It's correct the boss is upset every time there is a delay," Pino said. "He has to be upset because every delay, every plant, is going against your financial plan."