January 7, 2010

Absence of U.S. Cars from Japanese 'Clunker' Program Irks Lawmaker
When U.S. Rep. Betty Sutton (D-Ohio) proposed the "Cash for Clunkers" program to bolster the U.S. auto industry last year, the attempted exclusion of international nameplates soon aroused complaints from overseas automakers and free-trade advocates, and she relented. According to the Washington Post, now the trouble is, as Sutton sees it, that the Japanese government has not returned the favor. Under that country's own incentive program, no U.S. nameplate is eligible. But the rules for the Japanese incentive program are complex, and Japanese officials argue that it is open to imports but that American automakers have opted not to apply. "We think our program is fair and nondiscriminatory," said Satoshi Miura, an official at the Japanese Embassy in Washington. U.S. automakers typically bring cars into Japan under a program known as "Preferred Handling Procedure," which is cheaper than other importation methods but makes those cars ineligible under the Japanese incentive program, Miura said. But Korean and European automakers have taken the necessary steps to become eligible. "Toyota has no objection to inclusion of any foreign auto manufacturer in the Japanese program," Ed Lewis, a Toyota spokesman, told the Washington Post. "We understand the U.S. government and the government of Japan are working on this issue and trust that they will work cooperatively toward a solution." Click here for more on lawmakers' issues with the Japanese Cash for Clunkers program.

New Technology is No. 1 Auto Issue This Year, Execs Say
Forget all that talk about cost-cutting and quality improvements - it's the race for new technology that is motivating auto industry leaders around the world this year. An executive survey released on Thursday by management consultants KPMG LLC finds that new vehicle technologies will be the most important industry issue of 2010. The annual survey of 200 senior automotive executives around the world reports that technology issues will affect market share, investment and mergers, and acquisition activity. According to Automotive News, at the heart of that new technology discussion is alternative power systems. The survey, conducted last fall, is not necessarily an indicator of what will happen. But it does clearly indicate what occupies the minds of global decision-makers as the industry tries to shake off the recession. KPMG found that 85 percent of those surveyed think new technologies will be the most important issue facing the global auto industry for the next 12 months. The No. 2 issue facing the industry: developing new products to go with the technologies. The heightened technology buzz is noteworthy because it eclipses two of the industry's great management obsessions of the past two decades: cutting costs and improving quality. Click here for more on technology's role in the future of automobiles.

Cars Shrink Under Pressure from Government, Consumers
It's a small world after all. That is one message automakers are sending, loud and clear, to consumers and politicians judging by the vehicles that will be on display at this year's North American International Auto Show in Detroit. According to The Detroit News, unlike past years when big trucks, muscle cars, or outrageous concepts have drawn the spotlight, small cars will show their might in numbers. Among international nameplates there are the new Mazda2, Honda CR-Z, and small Toyota and Lexus hybrid concepts. Want to go even smaller? Check out an electric version of the tiny Fiat 500. Among the concepts are an all-wheel-drive version of a Mini, an electric Volvo C30, BMW 1-Series, and a curious-looking Hyundai hybrid. Click here for a design preview of what to expect at the Detroit Auto Show, courtesy of the New York Times Wheels Blog. The prominence of smaller vehicles at this year's show reflects a number of industry forces. One is the aftermath of 2009 that saw smaller versions of General Motors Co. and Chrysler Group LLC emerge from bankruptcy in a year that left most automakers bruised by the worst sales year since 1970. Another factor is the regulatory push to meet stricter corporate average fuel efficiency standards that take effect in 2016. Click here for more on the emergence of small cars as a driving force at the Detroit Auto Show.

GM: Hundreds of Dealerships Could be Restored
Hundreds of the 1,350 General Motors Co. dealers who lost their franchises last year could see them restored in a congressionally mandated arbitration process that begins later this month, the company's interim CEO said Wednesday. According to MSNBC, GM had planned to close the 1,350 dealerships this year in an effort to dump poor performers and better align its dealer base with much lower consumer demand for autos. In many cases, GM had dealerships too close to one another and competing too much on price, the company said. Congress passed legislation late last year that forces GM and Chrysler Group LLC, which shed 789 dealers last year, to give dealers a chance to appeal closure decisions. Both companies went through bankruptcy protection earlier this year and are receiving government aid. Restoring some dealerships could be good for the company because they would sell more cars for GM. But it also could be bad if a "lousy dealer" with a poor storefront got a franchise back, he said. Click here for more on Whitacre's take on what federal arbitration legislation could mean for GM dealers looking to avoid closure.

Ultra-Luxurious New-Car Options
Forbes has revealed its list of the best luxurious new-car options. The publication configured new vehicles from 10 luxury automakers: Audi, BMW, Cadillac, Hummer, Infiniti, Jaguar, Land Rover, Lexus, Mercedes-Benz, and Porsche. For each automaker, Forbes listed the vehicle with the most expensive package or option available. Contrary to popular belief, it's generally the base models of luxury cars that boast the most-expensive upgrades, not the high-performance or limited editions, which are already filled to the gills with toys. At BMW, the $87,355 7-Series Li XDrive sedan offers the $7,700 "Individual Composition" package, which includes a rear badge, 20" alloy V-spoke wheels with performance tires, alcantara headliner, shadowline exterior trim, a leather instrument panel, platinum full merino leather highlights, and dark red sycamore wood trim. That's roughly $5,000 more than any package offered in the high-performance M line. Lexus' $71,100 LS460 L sedan gives buyers the option of going a bit up-market: The LS's $16,490 "Rear-Seat Upgrade Package with Additional Options" offers a leather-trimmed interior with Alcantaraý headliner; power rear seats with power-adjustable butterfly headrests; power lumbar massage; four-zone automatic climate control with air filter; a smog sensor; a rear-seat air purifier and cool box; rear-seat audio controls, sunshades and side airbags; adaptive air suspension; a navigation system; a Mark Levinson Surround Sound; parking guidance; and pre-collision warning. Click here to view the list of ultra-luxurious vehicle options. To read Forbes' full analysis of its list, click here.

Hyundai, Mercedes-Benz Team up with Carfax
Millions of used car buyers and sellers rely on AIADA's Affinity Partner, Carfax, the most trusted provider of vehicle history information. Two new OEMs have recently teamed up with Carfax. Hyundai Motor America named Carfax as the official vehicle history report provider for its CPO program and Mercedes-Benz USA was added to the Carfax Service Link program. Hyundai, along with 29 other manufacturers, has chosen Carfax to build consumer confidence. All Hyundai dealers selling CPO vehicles are required to run a Carfax Vehicle History Report as part of the certification process, along with ensuring the vehicles meet other criteria/inspections. Mercedes-Benz is also taking advantage of Carfax's strength in vehicle-history information. Vehicles serviced and maintained by participating Mercedes-Benz franchises will be reported to Carfax and will appear on Carfax Vehicle History Reports. Carfax Service Link is a free, value-added feature that puts a dealership's name and website on the Carfax Report of each vehicle they service - a powerful tool for boosting consumer confidence. Click here to join the nearly 7,500 dealerships already participating in the Carfax Service Link program or call (800) 561-5496. Click here to have someone from Carfax contact you directly.