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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.

Automakers face reality of EVs' cost — to jobs, and their bottom line

Related: We obsessively covered the Frankfurt Motor Show — here's our complete coverage FRANKFURT, Germany — European car bosses gathering for the Frankfurt auto show are beginning to address the realities of mass vehicle electrification, and its consequences for jobs and profit, their minds focused by government pledges to outlaw the combustion engine. As the latest such announcement by China added momentum to a push for zero-emissions motoring, Daimler, Volkswagen and PSA Group gave details about their electric programs that could give policymakers some pause. Planned electric Mercedes models will initially be just half as profitable as conventional alternatives, Daimler warned — forcing the group to find savings by outsourcing more component manufacturing, which may in turn threaten German jobs. "In-house production is almost irrelevant to the consumer," Daimler boss Dieter Zetsche told reporters on the eve of the Frankfurt Motor Show, in the midst of a German election campaign in which automotive jobs have loomed large. The company set a target of saving 4 billion euros ($4.8 billion) by 2025 to help fund the cost of its electric cars. "Daimler is the first company to state explicitly how much electric vehicles are going to hurt margins," said Bernstein analyst Max Warburton. "It was brave to go first — but of course it won't be the last." Volkswagen, for its part, said it was seeking new global supplier contracts to source 50 billion euros ($60 billion) of electric car content including batteries, which are not yet manufactured competitively in Europe. "A company like Volkswagen must lead, not follow," Chief Executive Matthias Mueller told reporters. VW diesel emissions-cheating exposed by U.S. regulators in 2015 triggered global public outrage, dozens more investigations into test-rigging by the wider industry and a push by some lawmakers to ban diesel and eventually all engines. TIGHTENING NOOSE Tesla shares jumped nearly 6 percent on Monday after a Chinese minister said it was a question of when, not if, Beijing bans fossil-fuel cars, tightening the noose around the combustion engine. France and Britain have promised its outright abolition by 2040. But PSA, the maker of Peugeots and Citroens, said it was concerned about the risks if consumers were left behind in the rush, and a new generation of battery cars does not sell.

VW reaches out to diesel consumers with new website

Volkswagen is starting to get details out to the public about its diesel emissions evasions in the US, and the automaker now has a dedicated website for consumers. The first thing that visitors see is an apology video from Volkswagen Group of America CEO Michael Horn. The site also details all of the VW TDI's currently known to be affected here, including the 2009-2015 Jetta, 2009-2014 Jetta SportWagen, 2010-2015 Golf, 2015 Golf SportWagen, 2012-2015 Beetle and Beetle convertible, and 2012-2015 Passat. Although, the Audi A3 should be on there, too. The company repeatedly reassures owners that these vehicles are safe to drive and promises it's developing a fix as quickly as possible to make them emissions compliant. On the site's FAQ, VW also clarifies that there's still a stop-sale on all of these models with the 2.0-liter TDI, including certified pre-owned ones. That could change soon because the automaker believes that the 2016 model year examples are legal, but the Environmental Protection Agency needs to sign off before they could go to dealers. Until the diesels can be sold, there also won't be any TDI advertising by VW. "We are working at full speed on a technical solution that we will present to partners, to our customers and to the public as swiftly as possible," Herbert Diess, CEO of Volkswagen passenger car division, says in a statement. He also offers an improved accounting of the number of vehicles affected. VW had previously said that there were 11 million with the emissions evading software worldwide. According to Diess, around five million of these came from the VW brand. Audi has said there about 2.1 million of its models affected globally with between 13,000 and 14,000 in America. DR. HERBERT DIESS, CEO OF THE VOLKSWAGEN PASSENGER CARS BRAND, EXPLAINS: "WE ARE WORKING AT FULL SPEED ON A SOLUTION." Wolfsburg, September 25, 2015 – In the press release dated September 22, 2015, the Volkswagen Group announced that Volkswagen Group vehicles worldwide are affected by the current issues regarding emissions. The internal evaluation revealed that approximately five million Volkswagen Passenger Cars brand vehicles are affected worldwide. Certain models and model years of these vehicles (such as the sixth generation Volkswagen Golf, the seventh generation Volkswagen Passat and the first generation Volkswagen Tiguan) are equipped exclusively with type EA 189 diesel engines.