November 7, 2011

Mazda Seeks to Break Out of Second Tier
Mazda is racing to boost its U.S. market share to 2.5 percent and sales to 400,000 vehicles by 2014. The ambitious goal – a 74 percent gain over 2010 U.S. sales of 229,566 units – would be a milestone for the company. Mazda has never sold 400,000 vehicles in its nearly 40 years in this country. Whether it will assemble vehicles in the United States to offset the yen's pressure is unclear, reports Automotive News. Mazda said in June that it will cease production of the Mazda6 at the AutoAlliance International assembly plant in Flat Rock, Mich., when the car's life cycle ends, probably around 2012. Also, Mazda is moving away from sharing high-volume platforms with Ford. That means that Mazda has to shoulder the full cost of vehicle development. But Robert Davis, Mazda’s senior vice president of U.S. operations, says the company is ready to boost sales. Jim O'Sullivan, CEO of Mazda North American Operations, says Mazda needs to increase consumer awareness. And next spring's launch of the CX-5 compact crossover kicks off a wave of major updates to some of Mazda's highest volume vehicles. For more on Mazda’s strategy to grow its share of the U.S. market, click here.

BMW Rides Luxury Demand
BMW AG's third-quarter earnings rose 24 percent last week, and the auto maker confirmed a goal of selling more than 1.6 million vehicles this year despite economic worries in Europe and the U.S. According to The Wall Street Journal, profit rose to €1.08 billion ($1.48 billion) in the third quarter from €871 million a year earlier. Earnings before interest and tax rose 44 percent to €1.72 billion from €1.19 billion. Revenue increased 3.8 percent to €16.5 billion from €15.9 billion, reflecting a 9 percent sales rise to 399,218 vehicles. "We achieved new records for sales volume, revenues and earnings," Chief Executive Norbert Reithofer said in a statement, the latest sign that demand for luxury cars appears to be unaffected so far by wider economic concerns. Mr. Reithofer said he expects markets to remain volatile until at least 2015 and that economic growth is poised to slow in 2012, but he doesn't expect a recession. The world's best-selling luxury auto maker said it is well placed for further growth as it has one of the market's youngest product line-ups, following several model changeovers including the new-generation 5-series, a key model both in terms of sales volume and revenue per vehicle. For more on BMW’s success, click here.

Strong Yen Jolts Japan's Plant Plans
Just a year ago, Mitsubishi's beleaguered assembly plant in Illinois – its only manufacturing outpost in North America – seemed on the verge of closure. But with the Japanese yen soaring to all-time highs against the dollar, a factory once branded as a loss-making albatross is suddenly featuring prominently in Mitsubishi's plans, reports Automotive News. Mitsubishi Motors Corp. President Osamu Masuko intends to boost its annual output to 70,000 units, from the planned 50,000, after production of the Outlander Sport small crossover begins there next July. And half of the product will be for export. Read more about the plant at www.whatisanamericancar.com. The stunning reversal of fortunes for the plant in Normal, Ill., underscores a sea change in Japan's auto industry being caused by the strength of the profit-eating yen. As the government gets behind its exporters, Japan's carmakers are taking evasive action of their own. Their tools: cost cutting, offshore production, sourcing parts from low-cost countries, and playing with pricing. The shift is an opportunity for U.S. manufacturing. Like Mitsubishi, which is positioning its U.S. plant as an export base, Toyota will start exporting U.S.-made Sienna minivans to South Korea. Click here for more on manufacturing shifts for Japanese automakers which could impact their U.S. facilities.

Toyota Extends Production Adjustments Another Week Due to Thai Floods
As the flooding in Thailand continues to cause production troubles for its suppliers, Toyota announced late last week that it has been forced to extend the time frame for adjusted production hours at its plants in Japan, while also slowing production rates in North America, South Africa, and multiple Asian markets. Auto Remarketing reports the company has extended its adjusted production hours through Nov. 12. Company officials noted that production for this week will be adjusted “based on an ongoing assessment of the parts supply situation at each individual production line.” As for production outside Japan, the automaker’s sales and production company in Thailand – Toyota Motor Thailand Co. – will also prolong its production halt at its Samrong, Gateway, and Ban Pho plants through Nov. 12. The production halt has been in place since Oct. 10. That said, the automaker assured the public that the floods still have had no direct physical impact on the plants. And as for North American production for Toyota, the outlook has not changed; they will suspend overtime and Saturday production through the end of this week. Click here for details of Toyota’s production adjustments due to flooding in Thailand.

R.I.P. to 14 Cars and Trucks for 2012
As 2011 runs out, so does the life of several cars and trucks. According to Yahoo Autos, they are victims of changing tastes and corporate indifference. While a few never had much of a following, several were popular in their peak, and a couple were movie stars and mainstays of American freeways for decades. But with more than 300 models of new vehicles available to American car buyers, not even the favorite of the fast and furious crowd can just coast. The list includes the Honda Element. It drew a loyal following with its rubberized interior and fold-away seats. After moving nearly 70,000 copies in 2003, Honda sold just 16,000 Elements last year despite a freshening. The Mazda RX-8 – the last rotary-engine car for sale in America – is also being discontinued. The free-revving advantages of the RX-8 only lured 664 buyers this year through September, and Mazda only sold 1,134 last year. Finally, Volvo has put its S40 and V50 on the chopping block. Both models are station wagons and both are suffering slow sales. Volvo says it wants to focus on its SUV range. For the rest of Yahoo Autos’ list of 14 cars and trucks being at the end of their road after this year, click here.

Outsourcing Loaners Yields Benefits for Dealerships from Coast to Coast
Mercedes-Benz of Beverly Hills, Lindsay Honda in Columbus, Ohio, BMW of Sarasota, and Ancira Nissan of San Antonio have more in common than one might think. Like a growing number of dealerships nationwide, they have discovered how outsourcing service loaners through Enterprise Rent-A-Car, instead of using cars from their own inventory, saves money and increases efficiency. Besides providing clean, well-maintained vehicles to customers, dealerships can reduce liability exposure, lower inventory expenses, and give service advisors more time to take care of customers instead of administering loaner cars. To manage loaners efficiently, dealerships use the Automated Rental Management System (ARMS®) application from Enterprise Rent-A-Car, the largest rental car brand in North America. ARMS® creates seamless electronic communications between the dealership’s service advisors and Enterprise to track rental days, reduce errors, avoid delays and control costs. According to Enterprise, eliminating 30 to 50 loaners from a dealership’s own inventory can free up $600,000 to $1 million in inventory expense. In today’s economic environment, that’s a great deal for dealerships. For a free Enterprise Loaner Program Analysis click here or email dealercontact@enterprise.com for more information.

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