Autoblog

REPORT: Honda to supplant Chrysler as America's 4th largest auto retailer

Chris Shunk — Mon, 07 Dec 2009 08:58:00 EST

Filed under: Car Buying, Chrysler, Honda

Throughout most of the history of the US auto industry, the Detroit Three sat atop of the sales charts with General Motors claiming first, Ford in second and Chrysler placing third. In the past few years Toyota has clawed its way past Chrysler and then Ford, and now it appears that Honda too has now passed the Pentastar. Barring some miraculous (and we mean truly outstanding) development, Honda will officially overcome Chrysler to become the fourth largest automaker in the States. Honda holds a rather insurmountable 200,000 unit cushion against its competition from Auburn Hills, MI -- more vehicles than any automaker sold during the month of November. Speaking of November, Chrysler was the only major automaker to see a sales decline, down 18.5 percent with a mere 65,000 units sold. Honda fared better with over 74,000 products sold.

While Honda's victory on the sales charts is indisputable, neither automaker is making a big deal about it. A Honda exec reportedly told Automotive News that it only worries about it internal sales numbers and doesn't focus on ranks. Chrysler spokeswoman Kathy Graham told AN that the company is on the right track to improve its standing, adding, "We are taking the steps that are necessary to have a good foundation and to build consumer confidence." Graham also said that the company is expecting better results in the future on account of its increased advertising spending. If Chrysler doesn't reverse its sales slide, the next automaker to pass team Pentastar could be Nissan -- the Japanese automaker finished only 7,000 units behind Chrysler in November.

[Source: Automotive News - sub. req'd]

REPORT: Honda to supplant Chrysler as America's 4th largest auto retailer originally appeared on Autoblog on Mon, 07 Dec 2009 08:58:00 EST. Please see our terms for use of feeds.

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Automakers limiting options to reduce costs

Frank Filipponio — Mon, 16 Feb 2009 18:34:00 EST

Filed under: Car Buying, Trends, Earnings/Financials

With sales at a 26-year low, the Detroit 3 are trying almost anything to reduce costs and make more money from the cars they are selling. One of the biggest changes coming apes what some of the more successful Japanese makers have done all along: offering fewer configurations of their models. If you want leather, you option up for the higher-spec model and get the sunroof, two-zone climate control, larger wheels, and steering-wheel-controlled MP3 stereo system too. Soon, you'll see a similarly simplified menu in domestic showrooms.

According to the Detroit Free Press, offering fewer combinations allows automakers to cut engineering, design and marketing costs, which are frequently larger than even the manufacturing costs for a vehicle. One example is the 2010 Ford Fusion. The 2008 Fusion offered no fewer than 2,600 combinations between the different trim levels, option packages and stand-alone options. That number will be slashed to just 104 for someone shopping the 2010 model. To put that in perspective, someone looking at a 2009 Honda Accord can pick from about 20 versions. It's basically coupe or sedan, automatic or stick, LX or EX trim levels, with the EX available with leather and/or navigation, and either the four-cylinder or the 3.5L V6. That's it. Compared to a typical Chrysler, which might have had as many as 10,000 combinations in the past, the new system will keep things simple in an attempt to streamline the domestics' offerings.

[Source: The Detroit News]

Automakers limiting options to reduce costs originally appeared on Autoblog on Mon, 16 Feb 2009 18:34:00 EST. Please see our terms for use of feeds.

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REPORT: Obama dropping "car czar" in favor of task force

Chris Paukert — Mon, 16 Feb 2009 07:58:00 EST

Filed under: Government/Legal, Chrysler, GM, Earnings/Financials, UAW/Unions

While there have been rumors and suggested candidates floated for the so-called federal "car czar" post, it now no longer looks like that position will be filled. That's because President Barack Obama has apparently gone cold on the idea. Instead, new reports suggest that he will look to a select group of senior economic advisers for guidance.

In lieu of appointing a single authority to help guide the restructuring of the Detroit Three, a senior adviser is suggesting that Obama instead plans to look to Treasury Secretary, Timothy F. Geithner; National Economic Council chairman Lawrence H. Summers, and Ron Bloom, a labor union and corporate restructuring expert. The three men will work with a presidential auto industry oversight panel, with Obama "reserving for himself any decision on the viability of GM and Chrysler."

The aforementioned panel will be known as the Presidential Task Force on Autos, and will incorporate officials from various government agencies, including commerce, energy, labor, transportation, and Treasury. A number of panel members are already embedded in the project, helping to develop viability plan proposals with the automakers themselves,

Both General Motors and Chrysler are scheduled to file restructuring plans with the Treasury in time to meet a Tuesday deadline, at which point Obama and his newly-assembled team are expected to review the plans for one-to-two weeks before issuing a public statement. More details at the link below. Thanks for the tip, Mike!

[Source: The New York Times | Image: AFP/Getty]

REPORT: Obama dropping "car czar" in favor of task force originally appeared on Autoblog on Mon, 16 Feb 2009 07:58:00 EST. Please see our terms for use of feeds.

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REPORT: Dealers say bailout hasn't made for more GMAC loans

Frank Filipponio — Tue, 20 Jan 2009 07:28:00 EST

Filed under: Car Buying, Government/Legal, GM, Earnings/Financials

Show me the money. With apologies to Cuba Gooding Jr., that is exactly what many General Motors dealers are saying to GMAC Financial Services.

Despite being given $5 billion from the U.S. Government last month, GMAC apparently hasn't loosened its purse strings enough for dealers' likings. Some, in fact, are reporting that GMAC keeps rejecting their credit applications. This is somewhat surprising because GMAC previously agreed to lower the necessary minimum credit score ratings from 700 to 621 for new vehicle loans, so presumably more requests should be going through. Dealers are frustrated and although some preferred dealers have seen loan rate reductions, others are saying that GMAC is still as much as 1.5 percent higher than the competition.

In response to this problem, dealers have come up with a wish list of sorts. They are asking that GMAC return to leasing, approve some sub-prime loans and cut interest rates for loans to dealers to help finance their inventory. Also of concern is the fact that customers are increasingly upside down on their trade-ins. As a direct result, these consumers are having trouble getting approved because GMAC requires bigger down payments than it once did.

[Source: Automotive News, sub. req.]

REPORT: Dealers say bailout hasn't made for more GMAC loans originally appeared on Autoblog on Tue, 20 Jan 2009 07:28:00 EST. Please see our terms for use of feeds.

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Oil may hit $35/barrel in wake of auto bailout bust

Frank Filipponio — Fri, 12 Dec 2008 18:58:00 EST

Filed under: Trends, Government/Legal, Earnings/Financials

With the U.S. Senate denying the Detroit 3 relief plan, it looks like oil prices might continue to tumble. Our sibling site BloggingStocks is predicting barrel prices might drop as low as $35 as a result. This comes on the heels of predictions of higher prices in the near future.

It had been thought that OPEC and possibly Russia would be curtailing production, which might have led to higher prices, but if the U.S. auto industry collapses, demand for oil could plummet. That would result in even lower oil and gas prices.

In fact, oil prices started dropping Thursday night as soon as traders heard that Senate Republicans had blocked the bill, with barrel prices checking in at $44.76 as of Friday morning. We just saw regular unleaded for $1.59/gal at a station down the street this morning and thought we had woken up in 2000. Can sub-$1 gas be far away?

[Source: BloggingStocks]

Oil may hit $35/barrel in wake of auto bailout bust originally appeared on Autoblog on Fri, 12 Dec 2008 18:58:00 EST. Please see our terms for use of feeds.

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GM has spent $750 million developing the Volt

Frank Filipponio — Wed, 10 Dec 2008 17:58:00 EST

Filed under: Hybrid, Etc., Green, Technology, Chevrolet, GM, Earnings/Financials

Click above for high-res gallery of the 2010 Chevy Volt

Although they're a big part of the Congressional pitch to get some federal funds, green cars aren't going to make the Detroit 3 profitable on their own any time soon. Take the Chevrolet Volt for example. When GM CEO Rick Wagoner testified that the Volt is being pushed into production for 2011, he added that, "It will not be at that point fully cost competitive." That statement might seem like the understatement of the century to some.

According to this CNN Money piece, GM has actually spent about $750 million to develop the Volt, much of that in battery research. Apparently GM recognizes the need to stay ahead of (or at least alongside) the competition in developing new technology and is willing to take the risk of spending that kind of money even in desperate times. Of course, some of that money will eventually be spread across the range when the Volt's powertrain and battery advances get shared with other GM models. Still, it's unlikely the Volt will add to rather than bring down the bottom line until a second generation model is introduced, which may not be until 2014-2016.

Gallery: 2011 Chevy Volt - Live Reveal

[Source: CNN Money]

GM has spent $750 million developing the Volt originally appeared on Autoblog on Wed, 10 Dec 2008 17:58:00 EST. Please see our terms for use of feeds.

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UAW wants executive pay to be limited

Michael Harley — Mon, 01 Dec 2008 12:32:00 EST

Filed under: Plants/Manufacturing, Chrysler, Ford, GM, Earnings/Financials, UAW/Unions

The president of the United Auto Workers union, Ron Gettelfinger, said in a recent CNN interview that U.S. automakers need to tell Congress they will limit corporate pay, bonuses and severance packages in return for more government loans. Gettelfinger also said that the Detroit Three only need the loans to hold them over during these tough times. While the first statement from the union's top player seems like basic common sense, the second seems highly optimistic... especially when one considers the size of the industry and the depth of its issues. While no single event (or loan, for that matter) will likely turn around the downslide, all of those affected by the auto industry's potential demise will be interested in tomorrow's events. That's because Dec. 2 is the day House and Senate leaders told the automakers that they need to submit a "credible restructuring plan" that's convincing enough to get Congress to open its wallet when it reconvenes next week.

[Source: Reuters]

UAW wants executive pay to be limited originally appeared on Autoblog on Mon, 01 Dec 2008 12:32:00 EST. Please see our terms for use of feeds.

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