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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.

Weekly Recap: Hyundai scores NFL sponsorship after GM exits

Hyundai replaced General Motors as the official automotive sponsor of the NFL with a four-season deal that was announced this week. Hyundai gets exclusive sponsorship rights for mainstream and luxury cars, though not for pickups – as it doesn't have one in its current portfolio. "There may be another automotive truck sponsor, but not one that competes with our vehicle lineup," a Hyundai spokesman said in an email. That leaves the door open for another truckmaker to enter the fray. GM used the NFL to promote its GMC division, which makes pickups and sport-utility vehicles. The Detroit automaker decided to quit the sponsorship, which it had held since 2001, a GM spokesman said. Financials were not released, but ESPN said the sponsorship will cost Hyundai $50 million a year, double what GM paid. It gives Hyundai access to NFL trademarks for use in its marketing and advertising, and Hyundai will provide promotional vehicles to the league for the Super Bowl and other events. Hyundai celebrated the agreement by lighting up its Fountain Valley, CA, headquarters this week with a football field and the NFL logo. Hyundai's sister company, Kia, is the official automotive sponsor of the NBA. "We are huge football fans at Hyundai and feel there is no better venue to reach consumers, increase consideration, and tell the Hyundai brand story," Hyundai Motor America CEO Dave Zuchowski said in a statement. Hyundai will officially kick off its sponsorship when the NFL season begins on Sept. 10 with a primetime game featuring the Pittsburgh Steelers and the Super Bowl champion New England Patriots. OTHER NEWS & NOTES Toyota Mirai rated at 67 mpge, 312-mile range The Environmental Protection Agency gave the Toyota Mirai hydrogen fuel cell electric car a 67-miles-per-gallon-equivalent rating. The figure is for city, highway, and combined driving. The EPA also said the Mirai will have a 312-mile range. The sedan will arrive in dealerships in California this fall and will cost $57,500, though incentives can drop the price significantly. The Mirai will also be offered as a $499-per-month lease. Both come with three years or $15,000 worth of free fuel. Toyota plans to expand sales to the Northeast United States later. Toyota's top female exec resigns in wake of arrest Meanwhile, in other Toyota news, the automaker's communications chief and top female executive, Julie Hamp, resigned.

Jaguar I-Pace electric crossover sales are taking off

Earlier this month, it was reported that Jaguar Land Rover is due for a turnaround plan to cut costs and improve cash flow. The owner of JLR, Tata Motors, is scheduling a 18-month plan called "Project Change," worth $3.2 billion. But it seems a step in the right direction has already been taken with the introduction of Jaguar's electric I-Pace: InsideEVs is reporting that Jaguar sold 1,200 I-Pace models in October, which represents strong growth for the brand and the new model. 8.7 percent of Jaguar's total October sales consisted of the I-Pace, meaning that the total October sales volume of 13,764 units was largely boosted by the new electric crossover. Total sales were up 11.6 percent, and it was overall the best October ever for JLR. Some 2,500 I-Pace crossovers have been sold so far. The October sales figure is a noticeable rise from September's 710 cars, which itself is a strong pickup from just 140 cars sold in August. These are signs of both production and sales perking up, and it wouldn't be surprising to see monthly I-Pace sales hit 2,000 units sometime soon. It helps that the I-Pace is priced competitively with Tesla Models S and X, starting at $70,495 including destination charge, with Jaguar-like performance and looks. Last month, we reported of Jaguar possibly going electric-only in the next decade, with a portfolio consisting of an electric XJ, a full-sized EV crossover and an electric sports car in addition to the I-Pace. Brexit uncertainty and China-market woes mean Jaguar is on unstable ground, but as its owner is about to run an even tighter ship, and it first full-electric model is visibly picking up the pace, the coming decade could turn out to be a positive for Jaguar. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. News Source: InsideEVs Green Jaguar Crossover Electric Luxury jaguar i-pace i-pace