January 4, 2010

Late Surge in Car Sales Raises Hopes for 2010
A December recovery in car sales is starting to ease fears that the historic plunge in the U.S. auto market in 2009 would repeat itself this year. According to the Wall Street Journal, in recent days, sales have been brisk as auto makers stepped up incentive programs and took advantage of customers willing to buy without the aid of government rebates that spiked sales last summer. "We are seeing an increase across the board," said Michelle Krebs, a senior analyst at Edmunds.com, a car-buying Web site. She cited higher-than-expected gains at BMW AG, Ford Motor Co., Honda Motor Co., Toyota Motor Co.'s Lexus, and General Motor Co.'s soon-to-be-shuttered Saturn and Pontiac brands. Auto makers are set to release December sales data on Tuesday. Many industry analysts now expect the seasonally adjusted annualized selling rate in December to be more than 11 million cars and trucks. Such a figure would mark the second-best month of 2009 after August, which received a major jolt from the "Cash for Clunkers" government rebate program. Click here for a chart comparing U.S. light-vehicle retail sales in recent years. According to an analysis of the car industry last week by Credit Suisse, a bright spot is that good products can still break through. For full coverage on projected gains in the U.S. auto market, click here.

Detroit Show: An Electric Cavalcade
With federal mileage standards rising, automakers next week will show a fresh group of fuel-efficient vehicles at the North American International Auto Show in Detroit. According to Automotive News, Ford will unveil the redesigned production Focus, and Honda will show the production version of the CR-Z hybrid hatchback. Toyota and Volkswagen will roll out hybrid concepts; Audi, BMW, and Fiat will display electric concepts. Show organizers are arranging various electric cars, including one from China's BYD Auto, in a space on the show floor called Electric Avenue. But high performance will get its due. Judging by vehicles at the show, performance cars and econoboxes will coexist happily in the 2016 model year, when automakers must reach fleet averages of 35.5 mpg. But Chrysler and partner Fiat are showing some concepts that explore their product planners' ideas for the next few years. They will show a concept version of the Lancia Delta mid-sized hatchback with a Chrysler grille. They also will show an electric concept of the Fiat 500 minicar. For more on what to expect at next week's Detroit Auto Show, click here.

Touring the Temples of German Auto Making
In the last five years, four leading German automakers - Audi, BMW, Mercedes-Benz, and Porsche - have opened or reworked the museums dedicated to each brand's heritage and history. Stephen Williams at the New York Times traveled across southern Germany in a triangle from Munich (BMW) to Stuttgart (Porsche and Mercedes) to Ingolstadt (Audi) and back to Munich to visit each museum. The total distance was a bit more than 300 miles. He writes that the huge wedge of the Porsche Museum, created by a small Austrian architecture firm, Delugan Meissl Associated, seems to levitate above rail tracks and access roads. Click here for a photo. The "double helix" Mercedes-Benz Museum, done by a Dutch firm called UN Studio, would have delighted Frank Lloyd Wright with its nine stories of spiraling ramps and terrific views of Stuttgart from the top floors. Click here to view a slideshow of the museums of German auto makers. BMW's museum in Munich, immerses visitors in its corporate culture. At Audi's museum, visitors stroll top to bottom, down four floors, following a timeline of the company through the four brands that formed it: Horch, DKW, Wanderer, and Audi - initially called Auto Union - in 1932. Click here to read more about the museums of German auto makers.

Tight Credit, Sales Slump Threaten Auto Suppliers
Automobile sales may be rebounding, but according to the Detroit News, 2010 will be another tough year for American automotive suppliers. The supply base collapse that many feared last fall may have been averted, but there is still too much capacity to meet the dramatically reduced demand for cars and trucks. Although American auto makers that faced bankruptcy have resumed production, many suppliers ran out of money during the downtime. With credit markets still frozen, industry observers wondered how they would come up with the cash necessary to get their lines running again. The crisis was largely averted when GM and Chrysler got permission from the federal government to accelerate payments to key suppliers and use money they had received from American taxpayers to do so. At the same time, Ford, which did not file for bankruptcy, also accelerated payments to some of its suppliers using its own money. Even with that aid, many suppliers still failed. Original Equipment Suppliers Association President Neil De Koker said that the Obama administration has made it clear that such losses are not only acceptable, but part of a broader strategy to consolidate the U.S. supply base. Click here for more on the threats to U.S. auto suppliers.

Most Expensive 2010 Cars
According to Forbes, while it's tough to sell top-end luxury cars in a time of high unemployment and an uncertain economy, there are exceptions to the rule. Buyers will still flock to special cars with a lot of cachet and the price tags to match. Audi, in particular, is faring better than most brands in the segment. To determine its list of the most expensive cars of 2010, Forbes used data from Vincentric, an auto-industry analysis firm in Bloomfield Hills, Mich., to evaluate the following costs over a five-year term: manufacturer suggested retail price, projected depreciation, fuel costs, repairs, interest, opportunity costs, fees and taxes, insurance, and maintenance. The data assume an annual rate of 15,000 miles driven per vehicle and a price of $2.60 for regular fuel, $2.86 for premium and $2.75 for diesel. It also applies an inflation rate for fuel prices, since the calculations predict costs over five years. The 10 cars with the highest totals made the list. Forbes did not evaluate models from exotic brands like Lamborghini and Ferrari, automakers with extremely low production levels, like Spyker and Koenigsegg, or models from ultra-luxe automakers like Bentley, Maybach and Rolls-Royce. Click here to view a slideshow containing photos and facts of the vehicles that made the list. Click here for full analysis and coverage of the most expensive cars of 2010.