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Rising aluminum costs cut into Ford's profit

When Ford reports fourth-quarter results on Wednesday afternoon, it is expected to fret that rising metals costs have cut into profits, even as rivals say they have the problem under control. Aluminum prices have risen 20 percent in the last year and nearly 11 percent since Dec. 11. Steel prices have risen just over 9 percent in the last year. Ford uses more aluminum in its vehicles than its rivals. Aluminum is lighter but far more expensive than steel, closing at $2,229 per tonne on Tuesday. U.S. steel futures closed at $677 per ton (0.91 metric tonnes). Republican U.S. President Donald Trump's administration is weighing whether to impose tariffs on imported steel and aluminum, which could push prices even higher. Ford gave a disappointing earnings estimate for 2017 and 2018 last week, saying the higher costs for steel, aluminum and other metals, as well as currency volatility, could cost the company $1.6 billion in 2018. Ford shares took a dive after the announcement. Ford Chief Financial Officer Bob Shanks told analysts at a conference in Detroit last week that while the company benefited from low commodity prices in 2016, rising steel prices were now the main cause of higher costs, followed by aluminum. Shanks said the automaker at times relies on foreign currencies as a "natural hedge" for some commodities but those are now going in the opposite direction, so they are not working. A Ford spokesman added that the automaker also uses a mix of contracts, hedges and indexed buying. Industry analysts point to the spike in aluminum versus steel prices as a plausible reason for Ford's problems, especially since it uses far more of the expensive metal than other major automakers. "When you look at Ford in the context of the other automakers, aluminum drives a lot of their volume and I think that is the cause" of their rising costs, said Jeff Schuster, senior vice president of forecasting at auto consultancy LMC Automotive. Other major automakers say rising commodity costs are not much of a problem. At last week's Detroit auto show, Fiat Chrysler Automobiles NV's Chief Executive Officer Sergio Marchionne reiterated its earnings guidance for 2018 and held forth on a number of topics, but did not mention metals prices. General Motors Co gave a well-received profit outlook last week and did not mention the subject. "We view changes in raw material costs as something that is manageable," a GM spokesman said in an email.

Jaguar laying groundwork for a reborn XK

There have been rumors about plans to replace the Jaguar XK since before the gentleman's coupe ended production in 2014. Depending on which rumor you read, a reborn XK could remain compact and offer a 3.0-liter turbodiesel, grow a bit and move upmarket to challenge the Mercedes S-Class Coupe, or grow even more and challenge the Bentley Continental GT as "an elegant four-seater coupe." About the only three consistent details have been that the new XK would ride on a reworked F-Type platform, that the XK would become Jaguar's new flagship, and brand design director Ian Callum providing all the quotes about a potential resurrection. Now Hanno Kirner, the head of product strategy at Jaguar Land Rover, has added quotes that could portend the return of the big two-door cat. Kirner told Autocar that Jaguar "will continue to invest in sports cars," and that "I use the plural quite deliberately." That is, the F-Type won't be left to carry the sports car mantle by itself. Questions remain about the definition of the term "sports car," and whether that really means a return of the XK. Kirner suggested it's possible that a future offering could be "a body variant" of the F-Type. Callum's been fighting for the XK's return ever since Jaguar made the decision to kill it. The designer said the two-seat F-Type wasn't intended to kill the bigger 2+2, and at one point his team had already finished design work on the third-generation XK. However, the F-Type sold so well that the company marketers decided the automaker didn't need both cars. A number of things needs to happen before any XK gets the green light, though. The next-gen F-Type is in the works and could come as soon as next year, and Jaguar will want to make sure the two-seater continues its run of steady sales. The XK spirit lives on in the current F-Type, since the F-Type sits on a reworked version of the XK's aluminum architecture, and the second-generation F-Type will evolve that aluminum platform again. It's said that the platform could morph back into a 2+2 without undue hassle, but any new XK wouldn't likely arrive before 2021 even if approved. Callum remains on the case, saying in October 2017, "I want a two-seater [the F-Type] and a 2+2. We're working on something now." Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

SVR plans to tune electrified Jaguar-Land Rover models, but not the I-Pace

Jaguar-Land Rover's SVR division has only put its name on high-horsepower gasoline-burning cars, like the XE Project 8 built in strictly limited numbers. It's open to the idea of tuning electrified models, whether they're electric or hybrid, but it confirmed it's not currently planning on making a spicier evolution of the I-Pace. "We will be developing electrified versions of our cars, be that fully electrified or plug-in hybrids," affirmed Michael van der Sande, the division's managing director, in an interview with Auto Express. But although the electric I-Pace (pictured) raced in a one-make race series held on the sidelines of Formula E events for two seasons, and SVR could credibly claim to inject track DNA into a street car, it stressed the I-Pace doesn't appear in its product plans for reasons that remain a little bit murky. Jaguar announced the end of the eTrophy series in May 2020, which might explain why it's reluctant to exploit racing's marketing power. "There are other various things we are working on which we can't talk about, but we're very interested in electrification. That's why we got involved in eTrophy," van der Sande clarified. "The technology transfer, the learning applies to that car and other cars but we're not planning an SVR I-Pace at the moment." His comments confirm we'll need to be patient to see what SVR's take on an electric or hybrid car looks like. One of the first electrified models to receive the go-fast treatment might be the next-generation XJ tentatively scheduled to make its debut before the end of 2020. It will be exclusively electric, though it won't look as radical as the I-Pace, so Jaguar will need to find a way to replace the hot-rodded XJR 575 model it positioned at the top of the last-generation model's line-up. It's not too far-fetched to speculate the next Range Rover also due out in the coming months will receive some degree of electrification, and it could spawn an SVR-tuned model, too. Related Video: