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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 Vision Gran Turismo SV ups the performance of the virtual sports car

Last year, Jaguar created its very first concept car made specifically for the Gran Turismo video game series, and this year it's following it up with an even faster racing variant. It's called the Jaguar Vision Gran Turismo SV, and it has some pretty wild specifications. This virtual racing machine no longer uses three motors, but four, with the extra motor being fitted to the front and allowing torque vectoring at all four wheels. Output has increased substantially to 1,877 horsepower and 2,478 pound-feet of torque. The regular Jaguar Vision Gran Turismo "only" made 1,005 horsepower and 885 pound-feet of torque. Jaguar claims a 0-60 mph time for the SV of 1.65 seconds and a top speed of 255 mph. That top speed might be higher if it weren't for the various aerodynamic aids adding downforce. It has a huge splitter, diffuser and long adaptive rear wing. The car can create up to 1,000 pounds of downforce at 200 mph. One other wild performance feature is the cooling system for the lithium-ion battery pack. It has a coolant circuit with liquid nitrogen that ensures the battery doesn't overheat when discharging the massive amount of electricity to run the powerful motors. Though Jaguar will likely never actually produce a functional version of this car in real life, the company did at least create a full-size model of it. It should be impressive in person given its extraordinarily low, wide and long shape. We're hoping it shows up at car shows when the pandemic subsides. The virtual car is due to be available in 2021. Jaguar didn't specifically say which version of Gran Turismo is will be featured in. The regular car can be driven in "Gran Turismo Sport." The racing version could be added to "Gran Turismo Sport," but the launch date of 2021 has us wondering if it will instead show up in "Gran Turismo 7" for PlayStation 5. Related Video:

Strong JLR sales in China boost Tata Motors' quarterly profit

BENGALURU, India — Tata Motors Ltd on Friday posted a 67.2% surge in quarterly profit. Sales at its luxury car unit, Jaguar Land Rover (JLR), improved in key market China as the country led a recovery in the global automobile industry from the pandemic. The Indian carmaker had logged losses for three straight quarters as the COVID-19 pandemic dented business in several of its key markets even as it was already dealing with uncertainties around Brexit, weak demand and rising costs. The Brexit trade deal agreed upon in December has avoided the risk of tariffs on automotive parts and finished vehicles, Tata Motors said, adding that JLR remains encouraged by the Brexit trade deal. JLR sales in China jumped 20.2% on-quarter and were 19.1% higher from the year-ago period. Retail sales at the unit, which accounts for most of the company's revenue, were up 13.1% from a quarter ago, but still 9% lower than pre-pandemic levels. The company said it had saved 400 million pounds ($548.96 million) during the December quarter at JLR under Project Charge, taking the total savings to 2.2 billion pounds so far. Tata Motors has set a full-year target of saving 2.5 billion pounds. Consolidated net profit came in at 29.06 billion rupees ($398.52 million) for the third quarter, compared with a profit of 17.38 billion rupees a year earlier. It had reported a loss of 3.14 billion rupees in the previous quarter. The festive season in mid-November, during which Indians typically make big-ticket purchases, also helped overall sales. "Due to a strong festive season and a clear preference for personal mobility, the PV business posted its highest sales in last 33 quarters," Tata Motors Chief Executive Officer and Managing Director Guenter Butschek said. Total revenue from operations rose 5.5% to 756.54 billion rupees.