January 6, 2010

AIADA's Market Watch: International Brands Finish Strong
Despite a tumultuous 2009, U.S. auto sales finished the year on a positive note. According to AIADA's Market Watch sales report, December marked the fourth month in the past two years that demonstrated neutral or improved sales. Overall sales, including domestic brands and unadjusted for business days, were up just over 15 percent over December 2008, but down 21.2 percent for the year overall. International brands sold 558,680 units in December, up from 414,848 in November and 463,984 units in October. Asian brands accounted for 45.7 percent of the market, down from 46.3 percent in November 2009. European nameplates held an 8.5 percent share, down from 9.3 percent in November. Domestic brands finished the month with 45.8 percent of the market, up from 44.5 percent in November. International brands gained market share in the year overall. During all of 2009, international brands accounted for 55.8 percent of all vehicles sold in the United States, up from 52.4 percent in 2008. During each month of 2009, international brands led domestic brands in market share by an average of 11.2 percent, with the highest lead of 18.4 percent in August during the federal Cash for Clunkers program. Click here to read AIADA's entire report on December 2009 auto sales numbers.

More Cars Junked than New Ones Bought in '09
The United States scrapped 14 million autos while buying only 10 million last year, shrinking the country's car and light duty truck fleet to 246 million from a record high of 250 million, according to the report to be released on today by nonprofit group the Earth Policy Institute. While many cities like New York have had to cut mass transit services and raise fares during the recession, Phoenix, Seattle, Houston, Nashville, and other cities have expanded or improved mass transit systems. According to MSNBC, President Barack Obama's Cash for Clunkers program, which last summer gave consumers a rebate of up to $4,500 for trading in older cars and light trucks, led to the scrapping of more than 700,000 vehicles. But since the incentive was only available to consumers who bought new fuel-sipping vehicles, it did not affect the ratio of scrapped vehicles to new sales. Market saturation of autos, urbanization, high oil prices that reached a record $147 a barrel in 2008, and the uncertain economy have helped cut car sales. Because more people live in cities than a few decades ago, young people, particularly those burdened with student loans, are foregoing car purchases, the report said. Click here for the full report on vehicles bought versus those junked in 2009.

Hyundai Smokes the Competition
On the second floor of the 21-story Hyundai Motor headquarters in the south of Seoul is a 24-hour operations hub, the Global Command and Control Center (GCCC). According to Fortune Magazine, modeled after the CNN newsroom in Atlanta with dozens of computer screens relaying video and data, it keeps watch on Hyundai operations around the world. Almost no outsiders, and certainly no visitors from Fortune, are allowed inside the GCCC to view the operation firsthand, but its existence says volumes about how Hyundai views itself and the rest of the world. By monitoring operations in real time, Hyundai can identify problems in an instant and react quickly. Powered by a weak Korean won and a revitalized product line, it is ramping up volumes in major markets around the world. To take advantage of its momentum, Hyundai is pushing new models out of its factories faster and faster. For example, American customers got to see the slick new 2011 Sonata in December, two months ahead of schedule, because, in an unusual move, Hyundai sped up the start of production. Click here for a video of Hyundai's success story. For the full report from Fortune Magazine on what makes Hyundai tick, click here.

Senator Seeks Review of 'Clunkers' Spending
A Republican senator asked the U.S. Transportation Department for an accounting of the administrative costs for the $3 billion Cash for Clunkers program. According to The Detroit News, Sen. Charles Grassley of Iowa, who is the ranking member of the Senate Finance Committee, wants the inquiry in part to determine that there wasn't waste, fraud, or abuse in the program that helped consumers buy nearly 700,000 new cars. The Transportation Department has spent $77 million to date on administrative costs, and does not expect to exceed $100 million, which amounts to about 3 percent of the total program. Officials said there was no time to competitively bid contracts because they were required to implement the program in 30 days. "It seems taxpayers deserve a full report for the money that was spent on this program in the event that a similar program, maybe for a different purpose, is set up in the future," Grassley said. He sent a letter to Transportation Secretary Ray LaHood noting that the agency had little time to set up the program. Click here to read more about Sen. Charles Grassley's request that DOT provide a report of its spending during the Cash for Clunkers program.

Microsoft, Kia Plan Phone, Music for Cars
Kia Motors America and Microsoft Corp. are partnering to provide a new system that will allow drivers and passengers to make phone calls and control a car's audio system through voice commands. Called UVO, the hands-free system will be offered in several Kia vehicles by the end of the year, according to the auto maker, the first being the 2011 Kia Sorento crossover, likely to be out around July. Accordingo to the Wall Street Journal, UVO will also be the first direct competition to Ford Motor Co.'s Sync system, which is also based on Microsoft technology. Kia and Microsoft will announce the partnership Tuesday at the 2010 International Consumer Electronics Show in Las Vegas. Hands-free technologies allow drivers and passengers to answer and place phone calls, send and receive text messages, and access music and other media, primarily by using voice-recognition programs. "For us, it's a breakthrough interface," said Michael Sprague, vice president of U.S. marketing for Kia. Sprague declined to say what the product would cost, but said it would be consistent with Kia's value message. "We've always made sure that we continue to offer the consumer the best value," said Mr. Sprague. "So we'll make sure we do the same with UVO." For more on Kia's plans to offer UVO in its vehicles, click here.

Federated Insurance Chairman Named 2010 Horatio Alger Award Recipient
AIADA is pleased to congratulate Albert T. Annexstad, chairman of AIADA's Affinity Partner, Federated Insurance, on receiving the 2010 Horatio Alger Award in recognition of his success. Mr. Annexstad, who will formally accept the award on April 9 in Washington, D.C., has had an uninterrupted 45-year career with Federated. During this time, he has positioned Federated as one of the nation's largest and most financially secure mutual, multiple-line insurance companies. Click here to read more about Mr. Annexstad. He will be honored among ten other remarkable individuals to receive the 2010 award, including former Secretary of State, Condoleezza Rice. Recipients of the award have overcome great adversity to achieve admirable accomplishments, to serve as examples of achieving the American Dream, and to offer their time and resources to help others in need. To see the full list of recipients, click here.