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May 24, 2013
International Automakers Say Summer Car-Selling Season Will 'Be Bloody'
Several large international automakers said they expect U.S. auto sales in 2013 will top 15.1 million vehicles, but, reports The Detroit News, one warned the summer buying season may be “bloody” as brands fight for sales and hit the gas on incentives. Hyundai Motor America’s executive vice president of sales Dave Zuchowski says he expects sales will end at 15.1 million to 15.2 million. “Profitability from the dealer perspective, from the (automaker) perspective, from the supplier perspective may be squeezed just because of this intensified level of competition,” Zuchowski said during a panel discussion during AIADA’s Auto Summit on Wednesday ahead of a lobbying day by dealers on Capitol Hill. “Summer’s going to be bloody. Everybody’s got inventory . . . I think it’s going to be very, very competitive.” Bill Fay, group vice president and general manager at Toyota Motor Sales USA, said he expects industry auto sales will end the year at around 15.3 million vehicles sold—about the rate it has been for the first four months of the year. Toyota is introducing several new models in the second half of the year. For further coverage of the summer car-selling season, click here.
Auto industry Predicts Huge Memorial Day Sales
Memorial Day weekend could be a smashing three days for the auto industry, which is pushing for the highest level of sales this year since 2002, forecasters predict. The Detroit Free Press reports that so far, new-vehicle sales to individual customers are keeping the industry on track for sales above 15 million this year. When all new-vehicle sales are counted in, the total could top 16 million for the first time this decade, LMC Automotive forecasts. Sales this month could be the strongest since January. It's being driven by sales of pickup trucks, which are back in favor as the construction industry and homebuilding rebound. Because they are big, heavy vehicles that often command big prices, the auto industry is seeing customers paying more for vehicles on average at $28,921. It's the highest ever for May and 3 percent higher than the same month last year. Kelley Blue Book says pickup sales are contributing to a 6 percent gain in sales this month. Click here for more on expected auto sales this Memorial Day weekend.
Mitsubishi Motors Plans to Reduce Capital to Offset Losses
Mitsubishi Motors Corp. plans to reorganize its capital to help unload the worst accumulated losses in the automotive industry, reports Automotive News. The carmaker will decrease its capital by 75 percent to 165.7 billion yen ($1.6 billion) and cancel all of its 433.2 billion yen in capital reserves, it said in a statement today. The Tokyo-based company also plans to ease restrictions on its ability to issue shares, among proposals subject to approval from shareholders at next month's annual general meeting. The move is designed to help Mitsubishi Motors, which stopped paying dividends in 1998, shore up its balance sheet and resume returning cash to shareholders. Mitsubishi group companies—Mitsubishi UFJ Financial Group Inc., Mitsubishi Corp. and Mitsubishi Heavy Industries Ltd.—now own 36 percent of the automaker's outstanding shares, according to data compiled by Bloomberg, after they bailed out the company, partly by purchasing preferred stock convertible into common shares. Like most Japanese exporters, Mitsubishi Motors is benefiting from a weaker yen that increases the value of overseas sales. The company is forecasting net income will rise 32 percent to a record 50 billion yen in the fiscal year ending March 2014. For more on Mitsubishi’s financial plans, click here.
The Best SUVs Under $25,000
Small SUVs in particular are in demand these days as amenable alternatives to compact—even midsize—sedans, offering generous passenger and cargo room at still-affordable prices. “Small SUVs are being sought after by those that are downsizing from midsize sport utilities such as the previous generation Ford Explorer, Chevrolet Trailblazer, and Dodge Durango, as well as young families and retiring baby boomers,” says Alec Gutierrez, senior market analyst for Kelley Blue Book (KBB). “Small SUVs also are cross-shopped by those considering mid-size sedans due to their similar price point and added utility.” According to motorintelligence.com, five out of the top 20 selling vehicles are currently compact SUVs. The experts at KBB recently compiled a list of what they feel are the best SUVs priced under $25,000, based on a variety of tangible and intangible factors including affordability, versatility, quality, long-term operating costs, and overall likability. Forbes is featuring the 10 top-rated models in the accompanying slide show, along with both KBB’s rationale for selection and our own expert commentary. Most of KBB’s picks – including the top-rated Honda CR-V – are technically considered crossover vehicles. Check out photos of the best SUVs under $25K here. To read more, click here.
Automotive Industry Continues to Rally Behind Oklahoma Tornado Victims
As relief efforts for victims of the tornadoes that ripped through Oklahoma earlier this week ramp up, companies in the auto space continue to lend a hand. Auto Remarketing reports that among those joining the fight and helping out are Cox Enterprises (parent company to Manheim), Ford, Mazda, and Toyota. For example, Cox, in partnership with The James M. Cox Foundation, announced $1 million in support for Oklahoma’s tornado victims, a contribution which includes a $500,000 cash donation and $500,000 of in-kind support. Meanwhile, Toyota announced Thursday a $250,000 donation to support relief and rebuilding efforts for victims of the recent Oklahoma tornadoes. Funds will be allocated to immediate response and for mid-to-long term needs in the areas of food, small business revitalization and home rebuilding, the company shared. Mazda North American Operations said Thursday it was giving $25,000 to the American Red Cross for the relief efforts. What’s more, the board of trustees at The Mazda Foundation (USA), Inc. gave the green light for a matching donation of $25,000 to the Red Cross. Click here to read more about how the auto industry is participating in Oklahoma tornado relief efforts.
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