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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.

Road & Track names its 2013 Performance Car of the Year

Road & Track recently staged its first annual Performance Car of the Year test, pitting 13 new and updated performance cars against each other on track, then graduating the top six to a road test before picking a winner. Additionally, the magazine staff picked the best automobiles of the year in eight categories.
But first, let's cover the PCotY segment. Here's the list of cars brought to the comparison test: Audi R8 V10 Plus; BMW 435i; BMW M6 Competition Package; Chevrolet Corvette Stingray Z51; Ferrari F12 Berlinetta; Ford Fiesta ST; Jaguar F-Type V8 S; Jaguar XFR-S; Mercedes-Benz E63 AMG S-Model Wagon; Mercedes-Benz SLS AMG Black Series; Mini John Cooper Works GP; Nissan GT-R Track Edition; and Porsche Cayman S.
To find out the results of the comparison, head over to Road & Track's website or check the press release below, where you'll also find the magazine's top-rated vehicles in eight categories. Want more? Head over to the 2013 PCotY hub. But before you do that, take a stab at guessing the winner of PCotY (we'll give you one hint: it isn't a Porsche).

Jaguar I-Pace makes transition to production with hardly any changes

It looks like Jaguar designer Ian Callum wasn't kidding when he said the I-Pace concept was "a preview of a five-seat production car that will be on the road in 2018." Based on these spy photos, the production I-Pace will look darn near identical to the concept. The prototype seen above, in a unique and rather groovy green camouflage wrap, retains the swoopy cab-forward design of its concept predecessor. The headlights have the same shape and still sweep back nearly to the front wheel wells, and the door handles are still flush mounted ovals placed low on the doors. At the back, the crisp crease marking the trailing edge of the hatch is intact, as well as the triangular points on the rear spoiler. There have been a few minor changes here and there. At the front, the grille doesn't have quite as much depth as the concept, and the base of the front bumper doesn't have as aggressive an air dam. The big heat extractor vent in the hood is also gone. The rear bumper has also been rounded off a bit more with a simpler rear diffuser. The side glass is in production form, so now there are seams that show where the glass rolls down. It appears the rear doors will have quite a small glass opening, as the seam is roughly at the half-way point of the window. If the mechanicals of the concept end up as unchanged as this prototype's exterior, expect the production I-Pace to have a pair of electric motors that will produce 400 horsepower and 516 lb-ft of torque. Jaguar estimates these will propel the car to 60 mph in about 4 seconds. The motors will be supplied with power from a 90 kWh lithium-ion battery, which Jaguar says will provide a range of 220 miles. With a target date of 2018, we would expect to see the production model revealed at the end of 2017 or early in 2018. Related Video: