December 13, 2011

Proposed CAFE Changes Could Lead to Bigger, Not Smaller, Vehicles, Study Says
Proposed changes to corporate average fuel economy standards may cause vehicles to get bigger instead of smaller by the 2014 model year, a study by the University of Michigan says. According to Automotive News, researchers said “a loophole” exists in the new formula for calculating miles per gallon. Should automakers choose to use act upon that incentive, it would be more difficult to achieve the policy’s goal of reducing fuel consumption. Steven Skerlos, an associate professor in the U-M Department of Mechanical Engineering, said he believes automakers will indeed try to take advantage of the unintended consequence of the new policy. “For just about all the scenarios, the car got bigger,” Skerlos said. “What you can model in a computer is different from reality, but based on this research we expect it to happen.” The study, released last week, used simulations to mimic real-life choices automakers must make in redesigning vehicles to meet changing standards. In July, the Obama administration said it plans to increase the U.S. fuel-economy standard for cars and light trucks to 54.5 mpg in the 2025 model year from 35.5 mpg in 2016. Read more about the potential impact of new CAFE rules on vehicle size here.

Growing Competition Challenges Camry, Toyota
Toyota Motor Corp. was already counting on the revamped Camry to spark a U.S. sales rally. But, according to Bloomberg, the carmaker’s flagship model is now under additional pressure as a stronger currency and Thailand’s floods cut into profit. While Toyota is set to lose its ranking as the world’s largest automaker this year to General Motors Co., the automaker has said it’s determined to keep Camry the best-selling car in the U.S., a spot held for 13 of the past 14 years. Rebounding from parts shortages and assembly disruptions may prove easier than overcoming rivals. “Camry bears the lion’s share of whether they succeed in recovering both market share and profitability” in the U.S., said Larry Dominique, executive vice president of TrueCar.com and former head of Nissan Motor Co.’s North American product planning. “The reality is the best way to gain market share and profitability is new product, and Camry is their biggest.” U.S. drivers bought 23,440 Camrys in November, 15,668 Sonatas, and 9,533 Optimas. While Camry remains the best-selling car in 2011, even after production delays helped cut sales 7.3 percent so far this year, Sonata volume is up 15 percent, and Optima deliveries more than tripled from last year. For more on the Camry’s role in Toyota’s success in the U.S., click here.

BMW, GM Discuss Technology Venture
BMW AG and General Motors Co. are seeking to co-operate on fuel-cell technology, reports The Wall Street Journal. BMW will in the future receive access to GM's fuel-cell technology and the German auto maker will contribute to the costs of development in return. Talks between GM and BMW are at an advanced stage and the partnership will be announced after the motor show in Detroit in January. "We are in talks with GM on different topics on next-generation technologies," a BMW spokesman said. In a strategy key to the auto maker's post-bankruptcy turnaround, GM is seeking tie-ups with auto makers and other companies as a way to develop new technologies more quickly and will less financial risk. Last week, GM said it would jointly develop carbon fiber components with a Japan-based maker of carbon fiber. It has partnerships with other companies on projects from battery-powered busses to wireless phone chargers for vehicles. BMW co-operates with Toyota Motor Corp. on battery research, and a report said BMW is on the lookout for cooperation with companies that aren't direct competitors in order to control the high costs of the research and development. For the latest on a potential venture between BMW and GM, click here.

The Hardest to Find Cars for 2012
The market for compact cars has been heating up lately, with lots of new entrants, many of them offering luxury car features in a smaller, less expensive package. But no compact has been as hot as the 2012 Hyundai Elantra, which has been flying off dealer lots faster than any car in America. If you’re looking for one, you’ll have to move fast. The Elantra spends an average of just 10 days in inventory before it’s snapped up, according to automotive researcher Edmunds.com. Forbes looked at Edmunds’ data from the past three months to see which 2012 cars, on average, are selling the fastest. While most cars sit around at dealerships for 50 days or more before they’re sold, these hot sellers are typically gone in just 10 or 12 days. The publication spotted three trends: Small cars are hot, especially newly introduced models; many Japanese cars are still in short supply, after various supply chain problems; and luxury SUVs are in high demand at the end of the year. Click here to see a slideshow of the hardest to find cars for this year. For more on the list, click here.

Honda Will Build New Acura ILX Sedan at Indiana Plant
Honda Motor Co. said on Monday it will build the Acura ILX, a new, entry-level luxury sedan, in Greensburg, Ind., starting in the spring. The ILX sedan will debut as a concept at the 2012 Detroit auto show next month, Honda said earlier Monday. According to Automotive News, it will replace the TSX and be marketed as the gateway to Acura's U.S. lineup. The ILX will be offered with gasoline and gasoline-electric hybrid powertrain options -- making it the first Acura hybrid vehicle and first hybrid to be made in America at a Honda Motor plant. It will join the RL and TL sedans, ZDX crossover vehicle, and the MDX and RDX SUVs in Acura's U.S. lineup. The $550 million Greensburg plant opened in 2008. Honda recently hired nearly 1,000 workers to support a second production shift for the Civic compact sedan and double annual output to 200,000 vehicles. Read about it at www.whatisanamericancar.com. The plant added output of the natural gas-powered Civic sedan in May 2009 and began building Civic sedans for export outside North America in September 2009. For the latest on Honda’s plans for its Greensburg, Ind. plant, click here.

J.D. Power Intl. Automotive Roundtable & NADA Welcome Reception
Get to Las Vegas early to hear the latest insights and analysis on the global automotive industry and for an opportunity to network with NADA attendees the evening before NADA’s opening ceremony. The J.D. Power and Associates International Automotive Roundtable and NADA Welcome Reception will be hosted on Friday, February 3 at the Wynn Hotel. The event, titled “Capitalizing on Market Momentum,” provides a single day packed with valuable information, including J.D. Power’s exclusive Annual Franchise Assessment and Global Automotive Outlook. To view the complete agenda, click here. An elite group of speakers will provide attendees with new insights into emerging automotive trends, marketplace actions, and successes in customer satisfaction in the face of rapid industry changes. CLICK HERE to register and fax your form to 805-418-8566. For more information, contact Stephanie Haina at (805) 418-8607 or Stephanie.Haina@Jdpa.com.

Around the Web 
Audi Investing in Battery Research for EVs [MotorAuthority]
10 Things You Don't Know About the Scion FR-S [Edmunds Inside Line]
Please Check for Snakes When Exiting the Cab [NY Times]
Cars.com's "Best of 2012" Nominees [Auto Remarketing]