November 16, 2011

White House to Reveal Proposed 2017-25 Fuel Economy Rules
According to The Detroit News, the Obama administration today will unveil proposed new rules to hike fuel economy regulations for the 2017-25 model years that nearly double requirements to 54.5 mpg. The proposal is expected to match the outlines of a preliminary deal reached with most major automakers in July. The biggest issue in the proposed rules will be the government's cost-benefit analysis – how much the government estimates it will add to the cost of new vehicles and the impact on future auto sales and jobs. Under some government estimates, the regulation's cost to the auto industry will likely be tens of billions of dollars. The new rules are on top of the 2012-16 fuel economy increases approved in 2009, regulations that will cost the industry $51.5 billion and add $950 to the cost of a new vehicle in 2016, the Obama administration has said. Automakers, environmentalists, and the public will have months to make comments and urge changes to the proposal before it becomes final. Under the terms of a deal, California will agree not to seek to impose its own state standards. Click here for the full report on new fuel rules expected to be unveiled by the White House today.

Steeled by 3 Years of Crises, Toyoda Steers Toward Growth
There has been no normal for Akio Toyoda,55, in the three years since he took the helm of the car company founded by his grandfather in 1937. He became president in 2009, just as Toyota Motor Corp. was grappling with its first operating loss in 70 years. The next year his company's sterling reputation for quality was damaged by the global recall crisis. Then on March 11, Japan's earthquake, tsunami, and nuclear crisis hammered the company's global supply chain, forcing Toyota to slash production worldwide. Meanwhile, the Japanese yen has soared to all-time highs against the dollar, putting unprecedented strain on the automaker's export-dependent domestic operations. Toyoda recently spoke with Automotive News about revitalizing the company, pursuing sustainable growth, and the burden of being a Toyoda. When asked about his outlook for the U.S. auto industry in the coming years, he said, “I am personally very interested in growth. But in achieving that growth, you can either drive the outcome by setting yourself numerical targets or you can try to drive the company based upon vision. At this time, I'd rather focus on vision to drive the company.” Read the rest of his interview with Automotive News here.

Revenge of the Internal Combustion Engine
Major automakers and the Obama administration have bet heavily on hybrids and pure electric vehicles. But new and more efficient gas engines are winning on the showroom floor, which could slow the acceptance of electric cars, reports MSNBC. New cars with traditional engines are showing striking fuel efficiency gains thanks to technologies such as turbochargers, direct injection, and engines that shut down when the vehicle stops, then spring back to life when the driver presses the accelerator. The average fuel economy for new vehicles is now 2.5 more miles per gallon than four years ago. And emissions of greenhouse gases per new car are down 14 percent since late 2007, according to the University of Michigan Transportation Research Institute. At the same time, the number of gas-powered models in U.S. dealer showrooms boasting 40 miles per gallon or better in highway driving has tripled in the last five years. Estimates vary on how fast consumers will accept electric vehicles. Nissan Motor Co Ltd. is forecasting that EVs will make up 10 percent of global sales by 2020, compared with virtually nothing now. Click here for more on how fuel efficient gas-powered cars are giving electric car sales a run for their money.

North American Saab Dealers Wait for Payments
Manufacturer payments – including for warranty repair – to Saab dealers in North America are on hold while Saab Automobile AB awaits bridge loan funding. According to Automotive News, dealers were notified about the delayed payments last Thursday in a conference call with manufacturer representatives and in a memo from Saab Cars North America COO Tim Colbeck. The payments affected are for warranty work, dealer holdback, and dealer incentives. The notification came after General Motors, former owner of Saab, announced it would not approve a rescue deal between current Saab owner Swedish Automobile NV and the two Chinese companies trying to acquire the brand. Payments to dealers were delayed as of last Thursday, Saab spokeswoman Michele Tinson said. Saab Cars North America currently has 182 dealers, down from 200 at the time of the brand's sale a year and a half ago, Tinson said. Nov. 15, was the expiration date for the memo of understanding between Swedish Automobile and the Chinese companies, Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. Read more on how dealers are being impacted by Saab’s financial issues here.

Japanese Brands Top Charts in ALG Residual Awards
Japanese brands once again led the way in ALG’s 13th Annual Residual Value Awards, thanks largely to a mixture of strong consumer perception and loyalty, as well as low incentive spending and rental penetration, reports Auto Remarketing. The awards were released today and claiming the top spot on the mainstream side for the third straight year was Subaru. Meanwhile, the luxury side saw a new winner, as Lexus grabbed top honors for the first time in four years. The awards also spotlighted winners in 19 individual segments, and Japanese models took almost half of the categories. Toyota claimed the most with three winners (Toyota Tacoma, Toyota Tundra and Lexus CT 200h), while Subaru and Honda each had two winners. Nissan and Mazda were each represented in one category. Even through the ups and downs in used-vehicle values over the course of the past few years in the midst of a topsy-turvy industry, Japanese brands have been very stable when it comes to residuals and haven’t shown the same volatility as other automakers. Click here to see ALG’s full report on vehicle residual value winners. For more from Auto Remarketing on the awards, click here.

Around the Web 
Subaru Already Planning Race-Spec BRZ Coupe [Automobile Magazine]
Nightmare Roads Identified [MSNBC]
Nissan Aims to be Favorite of Food Truck Chefs [DriveOn]
LA Auto Show Sneak Preview [Forbes]