April 27, 2012

Rising Gas Prices Shift from Bane to Boon for Recovering Auto Industry
Rising gasoline prices have gone from bane to boon for the recovering U.S. auto industry, reports Automotive News. In 2008, U.S. gas prices hit a record of $4.11 a gallon and contributed to Detroit's downfall, as truck and sport-utility vehicle sales collapsed. With gasoline again approaching $4, buyers are returning to showrooms to replace old guzzlers with new, fuel-efficient models. "It's really astounding that you've gone from $4-a-gallon gasoline devastating sales to $4-a-gallon gasoline supporting sales today," Mike Jackson, chief executive officer of AutoNation Inc., the largest U.S. car dealer, said in an interview. "This is a real change in consumer behavior that puts us in a much better place than where we were in 2008." U.S. gasoline averaged $3.90 a gallon April 17, according to AAA. Prices will reach $4.01 in May, the U.S. Energy Department said on April 11. "The impact of $4-a-gallon gas on the sales rate is neutral to a slight positive," said Brian Johnson, Chicago- based auto analyst with Barclays Capital. "It certainly doesn't seem to be paralyzing the consumer this time." Click here for coverage of how rising gas prices are impacting the auto industry. 
 
Honda Quarterly Profit Jumps on Improved Sales
Honda's January-March profit jumped 61 percent as the Japanese automaker sold more cars and motorcycles in a turnaround from a disaster-battered 2011. It forecast record global sales of 4.3 million vehicles for this fiscal year. According to The Detroit News, the results underline the recovery at all Japanese automakers from the sales plunge that hit last year after the March 11 earthquake and tsunami disrupted the supply of auto parts from northeastern Japan. Honda's quarterly sales improved 8.7 percent to 2.41 trillion yen ($29.7 billion), mainly because of rising sales in Japan and North America. Demand for its auto models was strong, including the Odyssey minivan, the remodeled CR-V sport-utility vehicle, as well as hybrid models. For the fiscal year ended March 31, Honda's profit fell 60 percent to 211.4 billion yen due to the disruptions to production from the tsunami disaster in Japan and last year's flooding in Thailand where Honda has assembly lines. But the automaker is confident of a rebound, forecasting record global vehicle sales and an annual net profit of 470 billion yen. Click here for the latest on Honda’s profit.

How Crossovers Pushed Minivans Out of the Driveway
Throughout the 1990s and into the early part of this decade, the minivan was the unquestioned king of family cars. Like station wagons before them, when you said minivan, you thought kids and parents. No more, reports Forbes. Now, the crossover has pushed the minivan out of the driveway. Crossovers – sport utility vehicles built on a car chassis – are now so popular that all five of the top-selling crossovers outsell the best-selling minivan, according to figures compiled for Forbes by Autodata, Inc. The No. 1 selling crossover, the Honda CR-V, outsells the No. 1 minivan, the Dodge caravan, by more than two to one. Their ascendance to family dominance was reinforced this week, when TrueCar.com revealed that crossovers dominate the 10 most popular vehicles with woman buyers, with nary a minivan among them. “I don’t think it’s any real mystery. Moms want a vehicle they can be seen in, just like anybody else,” says Scott Oldham, editor in chief of Edmunds.com, which provides car shopping advice. “There are many crossovers out there that are very close to the usefulness and convenience of a minivan, but people don’t have to say they own a minivan.” For more from Forbes on the rise of crossovers, click here.

Scion FR-S Sports Coupe Cheaper, Subaru BRZ Arrives Sooner
Scion says its FR-S sports coupe arrives in June, priced $1,335 less than the mechanically similar Subaru BRZ. The FR-S starts at $24,930 for the manual transmission model, $26,030 for the automatic. BRZ: $26,265 and $27,365. According to USA Today, the main equipment differences appear to be navigation system and headlights. Subaru lists navi and high-intensity discharge (HID) headlights as standard in the base-level BRZ. Scion's list of features doesn't include navi or HID lights. Subaru also offers a deluxe model, called Limited, with more features. Scion lists only a single model. Key hardware – engine, transmissions, tires – is the same, because the two cars are the products of a joint venture between Subaru and Scion's parent, Toyota. The cars are made in Japan by Subaru's corporate parent, Fuji Heavy Industries. Subaru expects its West Coast dealers to start getting cars this month, and forecasts that all dealers will have them by late next month. Scion says the FR-S won't be on sale until June. The BRZ/FR-S is a buzz-mobile, attracting lots of pre-sale interest and positive critical commentary. They are triggering the same kind of excitement that the original Mazda Miata did. Click here for the latest details on both vehicles.

Car Dealers Press Case Against U.S. Over Bailout
U.S. government bailouts of General Motors and Chrysler became a constitutional battleground when they were pushed through bankruptcy court in 2009. The battle isn't over just yet, according to The Wall Street Journal. More than 220 former car dealers are pressing their case that the Obama administration violated the U.S. Constitution when the car makers terminated franchise agreements while in bankruptcy restructuring. They are seeking compensatory damages ranging from $500,000 to more than $5 million apiece. Two claims, initially filed in October 2010 and February 2011, cleared the government's motions to dismiss in February and are now heading into the pre-trial discovery phase. The cases are believed to be the first to test the constitutionality of the federal government's $80 billion bailout of the auto industry under the Bush and Obama administrations. The plaintiffs say that the Obama administration violated what's known as the "takings" clause of the Fifth Amendment. Originally written to protect citizens from uncompensated government seizure, the takings clause has long been invoked to resist government seizure of private property for large infrastructure projects. Read the latest on pending cases involving dealers affected by 2009’s auto bailouts here.

Private Sector Employment Discrimination Charges Hit an All-Time High in 2011
Earlier this year, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it had received a record number of employment discrimination charges in Fiscal Year 2011: 99,947. Filing 300 lawsuits and 261 “merits,” the EEOC obtained a record $455.6 million in relief for private sector, state, and local employees and applicants – a more than $51 million increase from the past fiscal year. The full 2011 enforcement and litigation statistics are available on the EEOC’s website here. The agency’s enforcement of Americans with Disabilities Act (ADA) produced the highest increase in monetary relief among all of the statutes. Back impairments were the most frequently cited impairment under the ADA, followed by other orthopedic impairments, depression, anxiety disorder, and diabetes. To read the full press release, click here or you can visit www.eeoc.gov for more information. With the recent trend in employment law issues, make sure you’re protecting your dealership from costly court settlements, legal fees, and lost productivity. AIADA’s Affinity Partner, Federated Insurance, offers a superior employment-related practices liability (ERPL) policy to provide a measure of financial protection to your dealership. Plus, they’ve teamed up with in2vate^®, a national leader in training and loss prevention, to give policyholders access to a web-based employment practices resource. Click here to find out more. Contact your local representative or click here to have someone contact you directly.

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