October 31, 2011

Honda Hurries to Redo Civic
Because of the chilly reception this year for its redesigned Civic, Automotive News reports that Honda is moving more quickly than planned on some mid-cycle changes. "We take feedback seriously, regardless of who it's from, and we will act accordingly quickly," John Mendel, American Honda executive vice president, said in an interview. The mid-cycle update normally would occur in spring 2014. But Mendel said the change could occur sometime in 2013. Honda was in the midst of redesigning the Civic when the global economy imploded in 2009. Honda Motor Co. CEO Takanobu Ito stopped the redesign in its tracks, approved shortening the wheelbase and reducing content to appeal to budget-conscious consumers. The launch was severely disrupted by the Japan earthquake on March 11. Although Honda's supply base was battered by the March earthquake, Mendel said Honda is cranking up North American production, building one plant and expanding others, in anticipation of a big growth spurt beginning next year. "You are seeing us building capacity back in, then remixing [production] based on the market," said Mendel. "We're not increasing production of any vehicle per se, but a multitude of different vehicles, then letting the market decide." For more on Honda’s plans for its Civic compact, click here.

BMW Factories Work Over Time on Strong Demand for X3, X1 Models
According to Business Week, BMW, the world’s biggest maker of luxury cars, is operating factories at more than 110 percent of capacity on record demand for models like the X3 and X1 sport-utility vehicles. The automaker plans to make a decision to add new production facilities in growing markets, including Brazil, as it aims to lift sales to 2 million vehicles a year by 2020 from a target of 1.6 million this year, Frank-Peter Arndt, the carmaker’s production chief, said Friday in Munich. The company aims to increase output further next year with the introduction of the revamped 3-Series sedan. BMW is hoping that the sixth generation of its best seller will preserve its lead over Volkswagen AG’s Audi and Daimler AG’s Mercedes-Benz, which have both set their sights on the overtaking the manufacturer. BMW is investing more than 1 billion euros ($1.42 billion) in factories in Germany and South Africa to produce the vehicle. BMW is scheduled to report earnings for the third quarter on Nov. 3. The manufacturer is expected to report a 32 percent increase in earnings before interest and taxes of 1.57 billion euros, based on the average of 14 analyst estimates compiled by Bloomberg. Read more about BMW’s factory pace here.

Which Brand Has Best-Perceived Alternative-Fuel Offering?
Auto Remarketing reports that the top Perceived Quality Study (PQS) score among alternative-fuel brands went to Lexus, which also garnered the highest PQS among overall brands. According to ALG’s Fall 2011 PQS, Lexus’ alternative-fuel PQS score was 89.8 out of 100. Next on the list was Mercedes-Benz, which scored an 88.8. Porsche came in third (86.7), BMW was fourth (86.7), and Honda was fifth (85.6). “We see there’s a very high correlation between the ranking in the alternative-fuel category relative to that mainstream category,” Eric Lyman, director of residual value solutions at ALG, told Auto Remarketing. “I think it really just comes down to the long-term reputation of Lexus building quality products and having high actual quality.” He went on: “There are a few brands where there is a variance in that actual quality and the perception of quality, but the idea is that as customers get more exposure to those products and become more familiar, that perception should align itself more closely with what actual quality is in the market.” His explanation points to why all but one of the bottom 12 spots in the PQS rankings went to alternative-fuel brands. For more on consumer alternative fuel perceptions, click here.

Japan-Brand Shortages Will Linger Into '12
Floods in Thailand and lingering parts shortages in Japan ensure that shortages of Japanese-brand vehicles will linger into next year, reports Automotive News. On Friday, Honda – which originally hoped to be back at full production by now – told U.S. dealers that output will remain stalled at 70 percent of capacity through December. Also last week, Toyota canceled overtime shifts scheduled this week in the United States and elsewhere, citing parts shortages. The lingering shortages in the wake of the March earthquake virtually ensure that the retail incentive showdown that had been expected during the final months of 2011 will not happen this year. Despite the problems, retailers said shipments from Honda and Toyota have risen sharply so far in the fourth quarter. AutoNation Inc. CEO Mike Jackson said his company, the nation's largest dealership group, expects to get more than 30,000 vehicles from Japanese automakers during the final three months of the year, up from a typical quarterly shipment of 25,000. Though shipments are on the rise, demand for Toyota's and Honda's best sellers is strong enough that many are selling soon after arriving on the lots, according to retailers. Click here for more on shortages that are expected to continue for Japanese brands.

Auto Loyalty Down As Buyers Seek Gadgets
Technology is trumping brand loyalty as younger buyers increase their presence in the U.S. new-car market, according to Edmunds Auto Observer. Prospective U.S. car buyers are less likely now than a decade ago to replace their vehicles with one from the same make as enhancements such as vehicle connectivity have them brand-hopping, found market research firm GfK Custom Research North America. One exception has been Ford Motor Co., whose Ford brand managed to buck the trend of declining loyalty because it has been adding small cars to its lineup and boosting the fuel efficiency of all of its cars and trucks. About 49 percent of the nearly 700,000 car shoppers surveyed for GfK's Automotive Intentions and Purchases study this year said they intended their next vehicle to be of the same make as their current one. That’s down from about 54 percent in early 2001. Less than 40 percent of post-Baby Boomers – consumers born after 1964 – planned on staying with their present brand, according to GfK. The so-called Generation X and Generation Y contingent makes up 46 percent of the U.S. car-buying public, up from 34 percent a decade ago. For details on falling brand loyalty among car buyers, click here.

Around the Web 
Women More Likely to be Injured in Traffic Accidents [DriveOn]
The 100 Greatest Movie and TV Cars of All Time [Edmunds Inside Line]
Mercedes-Benz Working on Carbon Fiber E-Class? [Autoblog]
Ferrari Introduces FF Car in India [WSJ]