January 4, 2012

Forecasters: 5% Bump in Q1 Output
North American light-vehicle production will rise 5 percent during the first quarter of 2012, forecasters say, on strengthening sales and a continued recovery from natural disasters in Asia. According to Automotive News, output increases are expected to continue for much of the year. Tracy Handler, an analyst with IHS Automotive, puts industrywide first-quarter North American production at 3.6 million units; that would be up 5 percent from 3,392,532 a year earlier. "We're looking at the sales rate growing in 2012, so you need a little more product in the system," Handler said. The increased production "is definitely to catch product up in the pipeline." IHS predicts Honda Motor Co.'s North American factories' output will climb 11 percent in the first quarter. North American output also will rise at a double-digit clip at Toyota Motor Corp. and at Hyundai/Kia, which has struggled to keep up with strong demand for its vehicles. Joe Langley, an analyst with LMC Automotive, said the largest year-over-year production increases in North America are likely to be experienced by European automakers. "We have them up 19.4 percent largely because we'll have a full quarter of production from Volkswagen in Chattanooga," he said. Click here for the complete coverage of first quarter output predictions.

Automakers Vying for Top Honors at Detroit Auto Show
Few automotive awards carry the heft and credibility of the one that will be handed out following the opening ceremony of next week’s 2012 Detroit auto show. Unlike most automotive awards, MSNBC reports that the winners of the North American Car and Truck of the Year (“NACTOY”) are decided by a panel of 50 U.S. and Canadian journalists. The methodology is designed to make sure that no single media outlet’s editorial – or advertising – policies influence the verdict. The car-of-the-year finalists – the Ford Focus, the Hyundai Elantra, and the Volkswagen Passat – are an international bunch. The choice of an American, Korean, and a German car “reflects the fact that every manufacturer is getting better these days,” suggested Joe Phillippi, chief analyst with AutoTrends Consulting. As for the truck side of the NACTOY balloting, there is not a single American offering in the mix; The CR-V crossover, BMW X3, and Land Rover’s first-ever car-based crossover, the Range Rover Evoq, make the cut. The winners of the North American Car and Truck of the Year will be announced following the ribbon cutting at Detroit’s Cobo Center next Monday. Read more about the NACTOY finalists here.

Dealer Holds a Fire Sale to Clear Out Saab Stockpile
According to Automotive News’ Rick Kranz, dealer Bernie Moreno and his team sold 55 new Saabs between Christmas and New Year's Day. Moreno had 122 cars on Dec. 20 valued at about $5 million. How did he do it? He chopped prices, offered buyers peace of mind, and spent a bundle on advertising. Moreno is president of the Collection Auto Group, an assortment of dealerships in the Cleveland area. His plan included chopping sticker prices from 25 to 45 percent. The new cars were sold "as is," meaning there was no warranty because Saab filed for liquidation. "For new buyers, we are offering them the opportunity to purchase a service contract that basically mirrors what would have been the Saab warranty, but for five years and 60,000 miles. The cost to the customer is $1,995," he said. The customer was to pay a $100 deductible. $100,000 was spent on TV and print advertising that began Dec. 26. "We wanted to be absolutely transparent as possible and not make it a hokey sale. It really is exactly what it is advertised as, which is a liquidation," he said. Read more about Cleveland area dealer Bernie Moreno’s strategy to sell the Saab’s on his lot by clicking here.

Revving Up: Electric Vehicles in 2012 and Beyond
Electric vehicle manufacturers had a rough December. But don’t expect a few potholes to halt progress toward vehicle electrification, reports Forbes. According to new reports from Next10 and Pike Research, the electric vehicle industry is alive, particularly in California, and growing. In 2012, carmakers will introduce a variety of models – from Toyota’s Prius Plug-in Hybrid to Tesla’s Model S and Ford’s Focus EV – that will make electric vehicles more accessible and affordable, which is expected to increase sales. In “EVs: Ten Predictions for 2012,” Pike Research forecasts that new models and increased sales will put an end to the “are EVs for real” speculation. Pike Research predicts that more than a quarter-million plug-in electric vehicles will be sold in 2012 – but at “prices that will continue to disappoint (and exclude) many consumers.” Pike Research expects that many urban residents will first drive an electric vehicle through car sharing services such as ZipCar, RelayRides, or City Car Share. But consumers who do purchase electric vehicles will increasingly take advantage of workplace charging, as employers begin purchasing charging stations in large numbers to attract young professionals. Read more at Forbes on the future of EVs here.

Bentley May Build Ultra-Luxury SUV
According to The Wall Street Journal, Volkswagen AG’s Bentley brand is likely to introduce a high-end sport-utility vehicle that would cost more than $140,000, after strong demand for ultraluxury cars helped Bentley return to a profit last year. “If we bring this [SUV] to the market it will be positioned significantly above the vehicles that are currently available in this segment,” Bentley brand chief Wolfgang Duerheimer said Tuesday. Bentley also is considering new versions of its Continental model, he said. U.K.-based Bentley said it swung to a profit in 2011 after two years of losses, helped by a 37 percent rise in sales to 7,003 vehicles, though it declined to disclose detailed full-year profit figures. In the January-to-September period last year, Bentley narrowed its operating loss to €6 million ($7.8 million) from €145 million in the same period in 2010. Volkswagen, due to post full-year earnings for all its brands in early March, is set to make a final decision on Bentley’s SUV project “in the first quarter” of 2012. The U.S. continued to be Bentley’s largest market last year, with 2,021 cars sold – up 32 percent from 2010. Click here for more on Bentley’s plans for an ultra-luxury SUV.

AIADA’s 42nd Annual Meeting and Luncheon is Around the Corner. Register Today!
Time is running out to join AIADA, fellow dealers, and industry leaders at our 42nd Annual Meeting and Luncheon on February 6 in Las Vegas. Together, we’ll consider the Legacy of Leadership that is inspiring the international dealer community and what it means for the future of our industry. This year's meeting will include keynote remarks from Mark Templin, Group Vice President and General Manager at Lexus. “Lexus has proven itself a leader in the U.S. auto market, and Mark Templin has played a central role in making it one of today’s most popular luxury brands,” said AIADA President Cody Lusk. “His remarks will provide invaluable perspective for dealers considering how our industry can continue to lead in the U.S.” Read more about Templin and AIADA’s 42nd Annual Meeting and Luncheon here. In addition to Templin’s remarks, the event will include the presentation of the David F. Mungenast Lifetime Achievement Award and the passing of AIADA’s chairman’s gavel from the current chairman, Jim Smail of Pennsylvania to Chairman-Elect Ray Mungenast of Missouri. Don’t miss your chance; register today by clicking here or call 1-800-GO-AIADA.

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