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Today’s FirstUp

September 19, 2014 

Honda, GM, Crack Down on Certified-Used Rule Benders

According to Automotive News, American Honda Motor Co. and General Motors are among the auto companies closely monitoring dealerships' compliance with their certified used-vehicle programs – and sometimes cracking down on those who bend the rules. Brian Butts, manager of auto remarketing at American Honda, and Larry Pryg, national manager of GM Certified used operations, said most of their dealerships administer their programs properly. But those that don't get temporarily suspended from the programs. It's all about maintaining the programs' integrity, Butts and Pryg said. "I think every OEM is concerned with ensuring that the dealerships are properly certifying the vehicles, doing what's necessary both pre- and post-sale," Butts said. The suspensions are one reason American Honda's certified used sales are down this year, Butts said. Another reason is because the company's off-lease volumes – the bread and butter of certified used programs – are down this year, the result of production cuts in 2011 after the earthquake and tsunami in Japan. That supply shortage has affected certified-used sales, Butts said. American Honda is restructuring the certified-used programs for Honda Division and its luxury sibling Acura and expects to introduce improved programs this year, Butts said. For more on Honda and GM’s strategies to address CPO violations among dealers, click here

Falling Used-Car Prices Roil the Auto Market
Used-car prices are sliding, a boon to penny-pinchers, but troubling for new-car sales, reports USA Today. The auto industry sales recovery in recent years means millions of used cars, many coming off lease, are starting to flood the market. The result is a decline in used-car prices that zoomed sky-high after the recession. And the decline is leading to talk that new-car auto sales growth may be peaking. Wholesale prices were down 0.4 percent in August vs. a year ago, down 1.6 percent from July and "prices should continue to trend down as supply outpaces demand," writes Tom Kontos of Adesa Analytical Services, which tracks wholesale prices for used cars, in a note to the industry. At retail, the average used car sold at a franchised auto dealership went for $10,883 last month, down 1.6 percent from a year ago and 2.4 percent from July, says CNW Research. Lower used-car prices are a delayed response to the new-car market's revival from the recession: From a bottom at 10.4 million in 2009, new-car auto sales are on track to break 16 million this year. For more on how falling used-car prices are impacting the overall auto market, click here

Watch Out, Google: This Company Just Lapped You with Its Driverless Car
If you happen to see an Audi cruising on the highway without a driver, don't panic – as long as you're in California—reports The Motley Fool. Audi announced on Tuesday that it has become the first automaker to receive a permit from the state government to test its self-driving cars on California's public roads. Does this mean the German luxury brand has blown past California's own Google in the race to build a car that can drive itself? Yes and no – but Audi and Google aren't really playing the same game. For one thing, being first to get a permit to test a self-driving car isn't the same as being the first company to bring one to market. Audi was also the "first" automaker to sign up in two other states that have passed laws allowing testing of self-driving cars: Nevada and Florida. It was a minor PR coup for Audi to beat Google to the licensing office in the tech juggernaut's home state. But Audi's self-driving sedans might also well beat the Great Googly One's cars to market. Google's self-driving experiments are a fascinating side venture for a famously smart company, but Audi's efforts are grimly serious. For more on Audi’s driverless car efforts, click here

Toyota's Big Leap to Aluminum
According to Automotive News, Toyota Motor Corp. is set to become the next global automaker to begin making the expensive shift from steel to aluminum for a high-volume vehicle. The U.S.-built Camry, the country's best-selling car, is slated to get an aluminum hood in 2018, according to a source familiar with the plans. Toyota's first foray into aluminum closures in North America will come next year when the 2016 Lexus RX 350 crossover, which is made in Cambridge, Ontario, gets an aluminum hood and liftgate, the source said. The aluminum sheet for the Camry hood likely will come from a joint venture between Toyota Tsusho Corp., a trading company affiliated with Toyota Motor Corp., and Kobe Steel to produce more aluminum sheet metal in the U.S. Toyota will be among the venture's first customers, several sources confirmed. Production is expected to begin in 2017 and ramp up to full output at the beginning of 2018. Toyota uses aluminum in the hood and trunk of certain vehicles made in Japan, including the Prius, as well as the hoods of most Lexus sedans and the Scion FR-S sports car. Click here to learn more about Toyota’s leap to aluminum for some of its vehicles

Ferrari Upheaval Likely to Mean Sales Increase, More Models
Recent shenanigans at Ferrari mean this exotic Italian sports car maker could soon be raising its output, extending its range, or both, reports Forbes. Fiat Chrysler Automobiles (FAC) CEO Sergio Marchionne replaced chairman Luca Cordero di Montezemolo with himself, and this also led to speculation Ferrari, and its slightly humbler sibling Maserati, might be sold to pay off some of FAC’s debt mountain. Marchionne denied he planned an imminent sale of Ferrari, which is owned 90 per cent by FAC, but added the decision was with the board, not him. Ferrari’s lack of success on the F1 circuit was said to be one of the reasons for Montezemolo’s demise, but the lack of a world title since 2007 doesn’t seem to have hurt sales, which reached about 7,000 last year from 3,700 in 2001. According to Ian Fletcher, analyst with IHS Automotive, Montezemolo wanted to keep output close to current levels and retain exclusivity. Marchionne wants to raise sales and make more money. Fletcher said there was a possibility of increasing Ferrari sales by moving a bit downmarket, without impinging on the territory of Fiat’s other sports car brand, the less exotic Maserati. For more on a potential new strategy for Ferrari, click here
FirstUp Question of the Week: Readers Respond 

Around the Web
Gold-Plated Aston Martin DB5 Model Sells for $90K [Autoblog]
2014 Best Driver's Car Contenders: Part 1 [Motor Trend]
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The Marketing Balance Your Dealership Needs [CBT News]

 

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