NADA Headlines (March 11, 2010)
Chrysler's Marchionne to Keynote Automotive Forum in NYC on March 30
Register today for the NADA/IHS Global Insight forum bringing 26 leaders together to discuss the economy and future of auto industry
NEW YORK -- Chrysler Group chief executive Sergio Marchionne is scheduled to kick off a day-long automotive forum with a keynote address at the New York Marriott Marquis in Manhattan on March 30. “The forum is a rare opportunity for automakers, dealers and suppliers to come together in one location and share insights on where the auto industry is headed after nearly two years of turmoil,” says NADA Chairman Ed Tonkin. Mike Jackson, AutoNation’s chief executive, will moderate an automaker panel, which includes: Toyota's James Lentz; Ford's Jim Farley; Volkwagen's Stefan Jacoby; American Honda's John Mendel; and BMW's Jim O’Donnell. “With the perspectives from 26 industry leaders and panel sessions led by top auto executives, the forum will be highly informative and establish a strong dialogue among all of the attendees,” says Tonkin. For more information or to register, visit http://www.autoforumny.com. Read more
Payday lenders, pawnbrokers, car dealers and other companies that make loans but do not hold bank charters would be shielded from the scrutiny of a proposed federal consumer protection regulator under the terms of a tentative compromise between senators who are attempting to craft a bipartisan bill. Even the Defense Department has chimed in, sending a letter to the Treasury Department urging oversight of auto lenders because of a pattern of abusive lending to military personnel. But opponents of increased regulation have pressed their case effectively. Ed Tonkin, chairman of the National Automobile Dealers Association, said the practices cited by the Defense Department are already illegal. "Creating new regulatory mandates on top of the numerous federal and state requirements that already govern auto financing will only drive up costs, limit vehicle financing options and, for many consumers, effectively eliminate their ability to obtain financing to meet their vehicle needs," Tonkin said. Read more from The Washington Post.
CEO says GM U.S. share stabilizing, wants to see growth
SAN ANTONIO -- General Motors Co. will pay back roughly $8 billion in debt to the United States and Canada before June, CEO Ed Whitacre said (Wednesday). Whitacre said in December that GM would pay back government loans extended to finance its restructuring in bankruptcy by June. "I believe we're going to beat that date," Whitacre said in remarks to the Rotary club in San Antonio, Texas, where he lives. "We have restructured and the progress that we've made, I believe, is sustainable," he said. "We're not being crushed under a mountain of debt. We have a cost structure that works." Read more from Reuters.
Toyota's massive recalls are bringing new scrutiny to the government's auto safety agency, prompting Congress to look at how federal safety officials have lived up to their mission of protecting motorists. A House panel on Thursday planned to examine the National Highway Traffic Safety Administration's oversight of the auto industry in the latest congressional hearing linked to Toyota's recall of more than 8 million vehicles worldwide. Congress is considering new auto industry reforms following Toyota's recalls to fix problems with accelerator pedals and brakes. Sen. Jay Rockefeller, D-W.Va., who leads a Senate committee with oversight of the industry, has expressed interest in "strong legislative action," including requiring brake override system on all vehicles. Other potential reforms include raising penalties on automakers who fail to recall defective vehicles in a timely manner, requiring car executives to certify the information they provide to NHTSA and mandating car makers provide hardware that dealers need to read electronic data recorders. Read more from The Associated Press.
Zero percent financing, free maintenance, other incentives are drawing buyers in, dealers say
Toyota Motor Corp.'s sales are picking up after the Japanese automaker boosted incentives to contain the damage from two big recalls and continuous reports of Toyota vehicles with problems. "Right now, it would appear we're tracking substantially over last month, and substantially over a year ago," said Don Esmond, senior vice president of Toyota Motor Sales USA. Esmond is likely to get a positive reception from dealers now that Toyota has turned on the spigot and is offering incentives such as zero percent financing for five years and attractive lease rates. Rosario Criscuolo, owner of Toyota and Lexus stores in Lansing and Ann Arbor, said business picked up sharply after Toyota posted the incentives last week. "We're trying to hire sales people to handle the customers," Criscuolo said. "It's like cash-for-clunkers for us right now." Read more from The Detroit News.
NEW YORK -- Industry experts say that even though Chrysler's overall sales are down only 3% during the first two months of the year, estimates show more than half of Chrysler's sales have been to fleet customers, such as rental car companies. Chrysler's sales to consumers have plunged more than 44% so far this year, according to estimates by industry tracker Edmunds.com. Fleet sales may be masking bigger problems at Chrysler right now, but experts say they are not a very secure lifeboat for an automaker whose customer demand is sinking fast. "You can not viably survive with fleet and rental sales over 50%," said Jesse Toprak, vice president of industry trends for TrueCar, a car pricing and sales service. "The math just doesn't work." Chrysler's weakness in mid-size sedans, compacts and so-called crossover utility vehicles means that it is gaining the least of any major automaker from the problems at Toyota. Jessica Caldwell, director of industry analysis at Edmunds.com, said traffic on its site for almost all the other major manufacturers moved up in the wake of Toyota's recall woes. "But nothing happened at Chrysler," she said. Read more at CNNMoney.com.
Volkswagen AG plans a second consecutive record year for deliveries and BMW, helped by the new 5-Series sedan, aims for an increase in sales as China, Brazil and the U.S. propel a recovery in the global car market. Volkswagen’s car, sport-utility vehicle and commercial-van sales rose 27 percent in the first two months of 2010, outpacing industry growth of 20 percent, Chief Executive Officer Martin Winterkornsaid in Wolfsburg, Germany-based today. Munich-based Bayerische Motoren Werke AG said it intends to defend its position as luxury-car market leader as deliveries increase. BMW, the world’s largest luxury-vehicle manufacturer, is targeting at least 1.3 million vehicle deliveries this year. “All signs are suggesting that we have seen the worst of the global crisis,” [Volkswagen] Chief Financial Officer Hans Dieter Poetsch said today at a news conference in Wolfsburg. “The world economy has brightened up a bit and we’re looking at this development with certain optimism.” Read more from Bloomberg.
A Chevrolet marketing revamp is well under way, a top executive at the automaker indicated Wednesday. The new advertising campaign will include the cars and use the phrase "excellence for everyone," Mark Reuss, president of GM North America, said during a Web chat. "You will really like it," he said of the campaign. Reuss also indicated that GM will be turning more to Corvette and Camaro muscle cars in marketing efforts to improve Chevrolet's image. The Detroit automaker doesn't do a good enough job leveraging those iconic names to help the Chevrolet brand, according to Reuss. "When have you ever seen 'Vettes and Camaros in ads for Equinox and Malibu?" he wrote. "This will change." Read more from the Detroit Free Press.
FRANKFURT—BMW AG reported a 36% slump in 2009 net profit in a year that saw a steep downturn for luxury car makers, but said Thursday it is cautiously optimistic for 2010. The Munich-based auto maker said net profit in 2009 fell to €210 million from €330 million a year earlier. Revenue fell 4.7% to €50.68 billion, but the company reached its target of posting a full-year pretax profit at a time when many auto makers are bleeding red ink. "We performed well in 2009 despite difficult market conditions world-wide," the company said in a statement, citing cost management. Read more at The Wall Street Journal.
NEW YORK -- In the 1950s, a Toyota engineer named Taiichi Ohno, just back from visiting the United States, where he was wowed by its supermarkets, began to think about how he could use what he saw as a way to run a factory. He obsessed over the idea of eliminating waste, of avoiding inventory buildup, of empowering workers to follow instructions meticulously and of aiming to continually improve. Over time, his ways became enshrined as the Toyota Way and spawned a way of doing business. But now, with Toyota facing intense scrutiny following massive recalls of its vehicles, the preachers of improvement are scrambling for an improved message. Their new mantra: It's not the Toyota Way that's the issue, it's Toyota. Read more from Fortune.