January 27, 2012

Honda's Ito Sees Profit Surge in Year of 'Complete Rebound'
Honda Motor Co. President Takanobu Ito forecast that earnings at Japan's third-biggest carmaker will climb to the highest in at least five years, led by sales of Accord sedans and Civic compacts in North America. Operating income in the year ending March 2013 will recover to levels achieved before the failure of Lehman Brothers Holdings Inc. roiled global markets, as sales climb above 4 million vehicles for the first time, Ito said in an interview this week. "It will be the year of the complete rebound," Ito said at the company's Tokyo headquarters. "Sales in North America will lead the recovery. We'll introduce a fully revamped Accord in the fall, and that will be a big plus to our sales." According to Automotive News, Toyota Motor Corp., Asia's largest carmaker, said this week that annual sales will be 100,000 units higher than it anticipated last month. Honda joins Toyota and Nissan in reorganizing operations as the yen, which has gained against the world's 16 most-traded currencies for two straight years, erodes the value of exports. Honda plans to boost the portion of vehicles sold in the same region they're built to as high as 80 percent. Read more on Honda’s projected rebound here.

J.D. Power: 'Pre-Conceived Notions' Highly Influential in Brand Avoidance
"Pre-conceived notions” can often be heavy influencers when shoppers form a certain perception about a brand’s quality/reliability, according to J.D. Power and Associates. During its 2012 Avoider Study, in which it surveyed consumers about why they avoid certain models, the research firm found that 43 percent of consumers who cited quality/reliability concerns as the reason for steering clear of a model said their rationale was that “the brand’s vehicles, in general, are known to have poor quality/reliability.” Comparatively, 38 percent cited ratings and reviews as the reason for having quality/reliability concerns about a vehicle. Meanwhile, reports Auto Remarketing, just 14 percent said prior ownership led them to their viewpoint. Looking at some other reasons cited for brand avoidance, 14 percent of those staying away from international models said it was the brand’s origin that led them to the decision. That proportion is the highest it has ever been during the 10 years of the study, officials noted. As for buyers who steered clear of domestic vehicles, only 6 percent did so because of them being U.S. cars. This marks an all-time low. Click here to check out J.D. Power’s entire study. For more on the issue at Auto Remarketing, click here.

Auto Makers' New Math Drives Net
In the retooled U.S. auto industry, less is more. The Wall Street Journal reports that carmakers and dealers are now selling significantly fewer vehicles than they did four or five years ago, yet the industry is brimming with profits. In 2011, auto makers sold fewer than 13 million cars and light trucks in the U.S., and this year's sales are expected to approach 14 million. Without the need to drive up sales volumes, auto makers and dealers can command higher prices from consumers. In the fourth quarter, the average price paid at AutoNation stores for a new vehicle was $34,650, $1,185 more than in the year-ago period. AutoNation's earnings provide a glimpse at the auto-industry's new math. In the fourth quarter, the retailer sold 60,191 new cars and trucks, a 13 percent rise from the year-ago period. But was well down from the 82,672 it sold in the fourth quarter of 2006. Nevertheless, AutoNation made an average gross profit of $2,451 on each new vehicle sold, $267 more than a year ago, and $212 more than in the final quarter of 2006. Click here for more on how the U.S. auto industry has learned to generate profit in a new economic climate.

California to Consider Major Revision to Zero-Emission Mandate
The California Air Resources Board, commonly known as CARB, will vote this week on a staff recommendation to require a significant increase of zero- and near-zero-emission cars to be on state roads in 2025. If the program is adopted, The New York Times reports that it would effectively require the addition of 1.4 million advanced-powertrain vehicles in 2025. They would include 500,000 battery-electric or fuel-cell cars and about 900,000 plug-in hybrids, called transitional zero-emission vehicles, or TZEVs, by CARB. The zero-emission requirements would be phased in beginning with the 2018 model year, and all but the smallest automakers would be required to take part. California’s fuel-economy regulations tend to become de facto standards for other states. The zero-emission car requirements are part of a larger package that also includes smog and greenhouse gas reductions. Also included is a mandate to build more hydrogen fueling stations in the state for the fuel-cell cars that Daimler, Honda, Toyota, and Hyundai plan to introduce around 2015. The scarcity of these stations in California and nationwide is a point of concern for automakers. Click here for the full report on California’s plans to revise its emission mandate.

The Best Cars for Commuters
Commuters looking for a good ride should consider the Toyota Prius, Chevrolet Volt, or Ford Fusion for weekday jaunts. Along with six others, they made Forbes’ list of the year’s best cars for commuting. To determine its list, it started with new vehicles listed as Consumer Reports “Recommended Picks” for this year. Recommended Picks are models that have average or better predicted reliability and that meet Consumer Reports’ safety standards; they also had to have performed well in accelerating, braking, handling, comfort, and other user-oriented tests. Then the publication selected from that group those vehicles that earned the “Most Reliable” distinction for this year – and crosschecked them with CR’s “Most Fuel-Efficient” winners as well. Nine vehicles, including hybrids, sedans, and even a couple SUVs, made the final cut. Forbes says it didn’t put a price limit on the contenders, since there are cars at any MSRP that will facilitate a decent drive to work. Each finalist cost well under $40,000. And if you remove the hybrids, which carry a hefty premium for their advanced technology, they all cost less than $23,000. Click here to read more about the list. Click here to check out a slideshow.

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