Average price of new car hits record

The average transaction price for a new vehicle set a record of $31,252 in August, according to TrueCar.com, up 3.2% from a year ago.

The new high is up 0.5%, or $164, from July, the auto data research and shopping site reports.

The record was powered by five car companies that each had record prices in the month: Chrysler, Ford, Honda, Nissan and Volkswagen.

TrueCar's transaction price is meant to include everything – price of the vehicle, discounts, add-ons, taxes and license fees – all the amounts that total to the out-the-door price. Read more >>

US automakers fall further behind foreign brands

For the first time since 2010, Americans are less satisfied with the cars and trucks they're driving, according to the 2013 American Consumer Satisfaction Index.

The latest (ACSI) also finds the satisfaction gap between the Big 3—Ford, General Motors, and Chrysler—and foreign automakers has widened with domestic brands falling further behind import brands.

David VanAmburg, Director of the ACSI said the drop in scores should be a concern for the Big 3, "This could become problematic once demand slackens, making further sales growth more challenging unless customer satisfaction improves."

Overall, satisfaction with 20 different auto brands fell 1.2 percent to a score of 83 on a 0 to 100 scale. ACSI researchers believe customer satisfaction is slipping in part because vehicle reliability may be suffering as automakers ramp up production. Read more >>

Auto Incentives Jump To 8% Of Car Value

Zero Hedge 
We showed yesterday the truly dreadful state of this economic recovery had one odd bright (green) spot, US auto production (and sales). While cash-for-clunkers started it, and easy money from the Fed expanded it (via credit for an ever-growing cohort of subprime borrowers), the car companies have now reached back into the bag of old tricks that blew them up before - incentives in May jumped to 8% of market value - or almost $2,500 per vehicle - the highest in over 2 years.

If things are going so well in this 'recovery' why are the car makers forced to squeeze margin for volume... The problem, as BusinessWeek reports, is that increasingly rich incentives aren't moving the needle much on sales.

Via BusinessWeek,

The economy may be having a car sales party, but automakers are spiking the punch. U.S. auto incentives in May jumped to 8 percent of market value—or almost $2,500 per vehicle - marking the highest level in about two years, according to data released Tuesday by Edmunds.com.

Car companies are squeezing margin for volume... During the dark days of the recession when consumer confidence was running on fumes, carmakers were offering about 10 percent of vehicle value to get buyers onto lots.

The problem is that increasingly rich incentives aren’t moving the needle much on sales. The pace of car-buying, while brisk, hasn’t changed much since November when the country was on an annual pace of 15.46 million light-vehicle sales. That figure had trickled down to 15.24 million in May, even as incentive deals have been getting sweeter all the while. Read more >>

The electric car is Dead

Recent moves by Japan's two largest automakers suggest that the electric car, after more than 100 years of development and several brief revivals, still is not ready for prime time - and may never be.

In the meantime, the attention of automotive executives in Asia, Europe and North America is beginning to swing toward an unusual but promising new alternate power source: hydrogen.

The reality is that consumers continue to show little interest in electric vehicles, or EVs, which dominated U.S. streets in the first decade of the 20th century before being displaced by gasoline-powered cars.

Despite the promise of "green" transportation - and despite billions of dollars in investment, most recently by Nissan Motor Co - EVs continue to be plagued by many of the problems that eventually scuttled electrics in the 1910s and more recently in the 1990s. Those include high cost, short driving range and lack of charging stations.

The public's lack of appetite for battery-powered cars persuaded the Obama administration last week to back away from its aggressive goal to put 1 million electric cars on U.S. roads by 2015. Read more >>

Americans buying fewer new cars over a lifetime

Chalk another one up for the recession and how it has altered life in America. New analysis by the automotive research firm Polk shows Americans can now expect to buy fewer new cars during their lifetime. On average, we’ll buy almost four fewer new cars by the time each of us hits 76 years old, the age when Polk believes most people are done buying new vehicles.

“The days when you bought a vehicle for 4 or 5 years are likely over,” said Anthony Pratt, Polk director of forecasting.

We’ve talked for some time about Americans holding on to their new cars longer and the reasons have been well-documented. Cars last longer, and as their prices have gone up, people are less inclined to take on a monthly payment. Since the recession they have stretched out the length of time to pay off a new loan. In other words, people now expect to be in their car six, seven or eight years after they buy it. Read more >>

Japan carmakers to cut China production by half

Sales have plunged at Japanese car makers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over the Japanese government's purchase of a group of disputed islands in the East China Sea from their private owner.

Nissan will suspend the night shift at its passenger car factories in China and operate only during the day, the business daily said. Nissan has two passenger car factories in China, in Huadu and Zhengzhou, with two lines each. A Nissan spokesman declined to confirm the report.

Toyota and Honda plan to cut China production to about half normal levels by shortening working hours and slowing down the speed of production lines, the Nikkei said without citing a source. A Honda spokeswoman said she was checking the report. Read more >>

Govt to lose $14B of auto bailout funds

Image via WikipediaThe Obama administration said Wednesday that the government will lose about $14 billion in taxpayer funds from the bailout of the U.S. auto industry.

In a report from the president's National Economic Council, officials said that figure is down from the 60 percent the Treasury Department originally estimated the government would lose following its $80 billion bailout of Chrysler and General Motors in 2009.

The report's release coincides with the administration's efforts to tout the bailout's role in the revitalization of the U.S. auto industry after last week's announcement that Chrysler is repaying $5.9 billion in U.S. loans and a $1.7 billion loan from the Canadian government. Those payments cover most of the federal bailout money that saved the company after it nearly ran out of cash in and went through a government-led bankruptcy. More...

GM sales down 30 percent for the year

Image via Wikipedia

pacific.bizjournals.com
Toyota sales in December rose to 187,860 from 141,949 a year earlier. For all of 2009, sales fell to 1.8 million from 2.2 million in 2008. Lexus sales were down 17 percent for the year.

Honda sold 1.15 million vehicles in 2009, down from 1.42 in 2008.

For Detroit, the numbers were worse. General Motors sales were down 30 percent for the year. Ford was off 15 percent. Chrysler sales plunged 36 percent and the company sold fewer than 1 million vehicles for the first time since 1962.

Subaru, Kia and Hyundai were the only automakers to report sales gains in 2009. Each set new sales records.

After taking on Fox and the Chamber, the WH takes on Edmunds.com

CSM
Edmunds.com CEO Jeremy Anwyl is defending his company’s claim that the Cash for Clunkers program was basically a lemon, saying a recent report simply reiterated what’s well known in the car industry: Incentive programs are “eyewateringly expensive.”

After taking on Fox News and the US Chamber of Commerce as part of a new media strategy aimed at perceived political opponents, the White House turned its blog on Edmunds’ critical report of the $3 billion Cash for Clunkers program. In a post titled “Busy covering car sales on Mars, Edmunds.com gets it wrong (again) on Cash for Clunkers,” the White House charged the firm with “trying to grab headlines and get on cable TV” while the analysis doesn’t withstand “basic scrutiny.”

So what did Edmunds do to warrant a snarl from the White House? For one thing, its report did grab headlines, including a well-read Monitor report.

According to Edmunds, only 125,000 of the 690,000 cars sold during the taxpayer-funded promotion were sales inspired by the program as opposed to those that would have happened anyway. Edmunds then divided that number by the total price tag and voilà: Each car purchased cost the American taxpayer $24,000.

Besides the no-nonsense price tag (an Edmunds’ specialty) there’s nothing new about the premise of the report, Anwyl contends. (The White House used dealer reports to highlight the program’s success while Edmunds used comparative historical sales figures to get its numbers.)

“We got real math behind this for the first time,” says Mr. Anwyl in a phone interview, before landing a friendly jab referencing this summer’s “Beer Summit” at the White House. “We need to send an invitation to the President to come out, we’ll have a beer and a photo opportunity, and walk him through the data. He might find it eye-opening.”

More seriously, Anwyl says: “It’s shocking and somewhat troubling that this is something the White House would pick up. This administration more than any other administration is invested heavily in the auto industry, so you would hope that they would had done a little more homework than their response suggests.”

Toyota ‘grasping for salvation'

HANS GREIMEL, AUTOMOTIVE NEWS
Toyota Motor Corp. President Akio Toyoda said his money-losing automaker is “grasping for salvation” as it struggles to return to profit.

The world's largest car company was once targeting annual sales of 10 million vehicles but now expects sales of 7.3 million this year, down from 8.97 million in 2008, Toyoda said today at a news conference.

Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall, the Toyota chief warned that his company has slumped to stage four, which Collins calls “grasping for salvation.”

“We are grasping for salvation,” Toyoda said, adding that the company already has spiraled through the first three stages: (1) hubris born of success, (2) undisciplined pursuit of more and (3) denial of risk and peril. His self-admonitions echoed the apologies commonly made by Japanese executives who take responsibility for financial turmoil or corporate scandal.

Grim assessment

While Toyota is far from entering the fifth stage--capitulation to irrelevance or death--Toyoda's grim assessment was clearly meant to underscore the challenges he faces after only three months as president. They also seemed aimed at ensuring customers that he grasped the severity of the situation and was committed to reversing Toyota's malaise.

“Toyota has become too big and distant from its customers,” the grandson of the automaker's founder said as he prepares for a second-straight year of substantial financial and unit-sale decreases.

In the United States, Toyota's sales fell 13 percent in September from a year earlier as the market suffered a sharp letdown after the government-funded cash-for-clunkers program ran out. Total U.S. sales tumbled 23 percent. Toyota is down 28 percent for the year.

Separately, Toyoda called the current dollar-yen rate "very tough," saying the weak U.S. currency made it difficult to return to profit on an unconsolidated level.

"When you get to this level, it makes it difficult to return to profit on sales growth alone," he said.

Toyoda repeated Toyota's aim to return to profit at the parent level "as soon as possible," even as it expects global sales to fall 18 percent from 2008 to 7.34 million vehicles this year. That would leave about 30 percent of the company's production capacity unused.

Toyoda took the helm in June as the world's biggest automaker faced one of its biggest crises in history amid a global credit crunch and an industrywide sales slump that forced General Motors and Chrysler into bankruptcy.

For the financial year to March, Toyota has projected a consolidated operating loss of ¥750 billion ($8.4 billion), assuming a dollar rate of ¥92. It has forecast a parent-only operating loss of ¥600 billion.

French Workers Threaten to Blow Up Factory Unless Paid

GOING OUT WITH A BANG? Fake graves outside the bankrupt New Fabris factory show the number of years that people have been with the company. Ex-employees are threatening to blow up the plant if their requests for lost-job compensation and indemnity from prosecution are not met by July 31, 2009. Image: AFP

As media talking heads and government officials continue deceiving the public with "green shoot" lies, the anger-wrought masses are beginning to take things into their own hands. Employees of New Fabris in central-eastern Chatellerault -- a bankrupt French car-parts supplier -- are threatening to blow up their factory unless Renault and Peugeot pay them compensation. AFP reports a union official said on Sunday that the 366 employees of New Fabris were occupying the plant and demanding that the automakers, which accounted for 90 percent of their business, pay €30 000 - nearly R350 000 - to each worker.

"The gas bottles are in the factory. Everything has been planned for it to blow up unless there is an accord by July 31," Guy Eyermann, CGT union official and secretary of the company works council, told AFP. The Chatellerault factory is believed to have car parts worth some two million euros, as well as a new Renault machine estimated at another two million.

"We are not going to let Peugeot and Renault [ both of which received public funds] wait until August or September to recover the spare parts and machines still in the factory," a union leader warned. "If we get nothing, they get nothing at all."

Commercial banks have frozen lending to hundreds of Europe's auto suppliers -- which are on the brink of bankruptcy -- because of the perceived high risk. Sales for European auto suppliers have fallen between 25% and 35% from a year ago, according to WSJ.

"Of Europe's 5,000 or so auto suppliers, 200 have filed for bankruptcy since December and 700 to 800 suppliers are now facing 'acute liquidity problems,'"said Lars Holmqvist, Chief Executive of European Association of Automotive Suppliers. "The summer vacation period, which most car makers are extending because of weak sales, will exacerbate the problem for suppliers."

As GM emerges from bankruptcy eight major suppliers have filed for their own bankruptcy, including Lear Corp -- one of GM's biggest automotive seat and interiors providers. "Supplier health will be the wild card for the next 90 days, not only for GM but all of the auto makers," said Mike Robinet, vice president of global vehicle forecasts for CSM Worldwide.

The French workers' militant tactics including "bossnappings" where managers have been held hostage in their offices, may become viral around the globe.