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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

[UPDATE] Cadillac Blackwing gets ticket to Italy, to go to work in a supercar

UPDATE: It seems MAT's belief it had secured a supply of Cadillac's 4.2-liter Blackwing V8 was premature, and based on a handshake deal before GM sold its Turin engine center to Italy's Punch Group. Shortly after Hagerty ran the story, GM sent a statement to the outlet reading, in part, "We do not have an agreement in place with Manifattura Automobili Torino (MAT) to provide or sell the Blackwing engine. ... Our team is following up with MAT president Paolo Garella to discuss the misunderstanding." MAT also submitted a statement to Hagerty, saying, in part, "We thank GM for the clarification. Although a signed agreement was not finalized between the parties, we were under the impression that our counterpart was committing to making this engine available to MAT at conditions yet to be defined. ... We hope that this misunderstanding will not compromise our relations with GM and possible future collaborations." The original article follows: Some necessary cost-cutting at Cadillac led to switching the new CT4, CT5, and Escalade to older platforms. The revised architecture plan meant Cadillac's newest top-tier products couldn't fit Cadillac's newest top-tier engine, the 4.2-liter twin-turbo DOHC V8 known as Blackwing. That engine would serve limited duty at full power in the now-dead CT6-V, and at reduced output in the CT6 Platinum V8 trim before ending its bright, brief domestic life. But the story isn't over, the rebirth of Blackwing coming from a most surprising locale: Turin, Italy. Before the canceled Geneva Motor Show, Hagerty spoke to Paolo Garella, CEO of Manifattura Automobili Torino; that's the company better known as MAT, makers of the New Stratos and contract engineering house for boutique screamers like the Aspark Owl electric hypercar, Apollo Intensa Emozione, and SCG003C. Garella told the outlet, "We have an agreement with General Motors" for a supply of Blackwings, which would be developed and built at the General Motors Propulsion Engineering Center (PEC) in Turin. Since 2005, the PEC has been used to develop GM's global diesel engines and electronics. MAT's plan is to put the V8 into a new limited-run car MAT is creating from its own design. Then another surprising turn: Belgium-based global auto supplier Punch Group bought the PEC, with plans to work with GM on projects in progress until at least the end of 2021. Nothing changes as far as MAT is concerned, except perhaps a chance for an even closer collaboration with Punch Turin.

Mark Reuss: GM can't afford product 'misses,' has 'thought about' CT6 V-Series

Mark Reuss is a busy man. He oversees General Motors' global product portfolio, an all-encompassing task for a company that sold more than 9.9 million cars and trucks last year. When GM launches a well-received product, like the road-going rocket ship that is the Chevrolet Corvette Z06 – he gets credit. When the company stumbles with the slow-selling Chevy Malibu or grapples with fallout from the decade-old Saturn Ion and its flawed ignition switch, he gets blamed. GM owners, the press and sometimes the federal government, demand answers. Bob Lutz famously held the job before Reuss. So did Mary Barra, who's now GM's chief executive. There's a New GM, but the lineage is connected to a long history. When he's not thinking product, Reuss, an executive vice president, also runs the purchasing and supply chain for the company, which is still one of the largest industrial empires in the world. We caught up with Reuss on the floor of the New York Auto Show, where GM had just rolled out two crucial new products: the 2016 Cadillac CT6 and the 2016 Chevrolet Malibu. Speaking with a small group of reporters, Reuss delved into a variety of subjects, including the new Malibu, Cadillac's future (he thinks the ATS-V is going to "flame the M3 and M4"), and other topics. On fixing the Malibu: "We can't miss. We can't have those kinds of misses [like the previous generation] on our cars and crossovers and trucks. We can't do that. If we do that, we give a reason for someone to go buy something else. It's that simple. "On a car like the Malibu we have a chance to really fix all of that, which we have, and then lead. Then you've got a real opportunity there. So that's what we've really been focused on here – to fix those things." He later added: "We need that car here to transform Chevrolet desperately because it's the heart of the market. And when you think of Chevrolet, people will come back and think about what we did with the [new] Malibu and the Cruze... It's hugely important to us." On Cadillac: "If we go out and try and out-German the Germans, it's probably not going to work. We've got an opportunity here generationally where there's a lot of people younger than me that have parents that drove BMWs and Mercedes, and I think there's an opportunity there for those people to drive something different than what their parents did, and I think that's always been an opportunity in the auto industry if you look at the history of it.