October 17, 2012
Auto Bailout, Energy Hot Topics in Presidential Debate
President Barack Obama and Republican challenger Mitt Romney for several months have been separately discussing the benefits and liabilities of the auto bailout, but on Tuesday night they got to argue about it face-to-face. Automotive News reports tha it took about a minute into the town hall debate for President Obama to go on the attack when asked by a college student about unemployment. "No. 1, I want to build manufacturing jobs in this country again. Now when Gov. Romney said we should let Detroit go bankrupt, I said we're going to bet on American workers and the American auto industry and it's come surging back," Obama said. In his response on the bailout question, Romney said the president actually took his advice to let Detroit go bankrupt. "He said that I said we should take Detroit bankrupt. And that's right," Romney said. "My plan was to have the company go through bankruptcy . . . and come out stronger. And I know he keeps saying, you want to take Detroit bankrupt. Well, the president took Detroit bankrupt. You took General Motors bankrupt. You took Chrysler bankrupt.” Click here for more on how the 2009 auto bailout played a role in last night’s presidential debate.
Battery Maker Files for Bankruptcy
The Wall Street Journal reports that electric-car-battery manufacturer A123 Systems Inc. filed for Chapter 11 bankruptcy protection Tuesday with a plan to sell its auto-business assets to an American rival, Johnson Controls Inc., scrapping a proposed rescue by a Chinese company. The filing by the recipient of nearly $250 million in federal-government grants and $358 million in start-up funding scuttled a previously announced plan to sell an 80 percent stake to Chinese auto-parts maker Wanxiang Group Corp. That deal had encountered opposition from lawmakers concerned about the transfer of American taxpayer dollars and technology to China. A123's bankruptcy also represents a setback for the Obama administration's efforts to foster a market for electric vehicles and develop a homegrown supply of advanced batteries. It provides fodder for Republican presidential challenger Mitt Romney to continue attacking the president for his financial support of renewable-energy firms. A123 Systems isn't shutting down nor is it selling its business to a Chinese competitor. Instead, the Waltham, Mass., company is selling its auto business to Milwaukee-based Johnson Controls in a deal valued at $125 million that is subject to higher offers at a bankruptcy auction. Click here for more on the bankruptcy of A123 Systems.
Audi Adds Power, Fuel Economy to Its Performance Cars
Audi is betting that a lot of wealthy car buyers still embrace foot-to-the-floor performance as long as they can claim a little better fuel economy. Germany's Audi brought its premium cars to this upscale enclave northwest of Los Angeles to show off three revised models for 2013, the S6 midsize sedan, S7 swoopy coupe, and S8 large luxury sedan. These performance versions of mainstream models represent a move to more efficient, sometimes smaller, engines. The Audi S6 and S7 are powered by a 420-horsepower 4-liter V-8 engine with a seven-speed transmission. The S8 has a 520-horsepower 4-liter V-8 engine with an eight-speed transmission. The new S models aren't just about powerful engines. The cars are dressed up outside to look racier and to differentiate them from the mainstream versions. USA Today reports that the 2009 version of the powerful new S8 was powered by a 450-horsepower 10-cylinder engine that ran from zero to 60 miles per hour in 4.9 seconds. It got 15 miles a gallon in combined city and highway driving. The new one shaves a second off the zero-to-60 time and gets 19 mpg combined, a 26.7 percent improvement. Click here to read more about Audi’s new performance cars.
Edmunds: Dealer-Financed Sales Poised to Eclipse Pre-Recession Levels
Edmunds.com said Tuesday that dealer financing is back to pre-recession levels after bottoming out in 2009. Analysts contend a key driver of this resurgence is the revival of the subprime market, which accounted for a quarter of all new auto loans in the second quarter of 2012, up from a second-quarter low of 17.6 percent in 2009. And, reports Auto Remarketing, Edmunds.com chief economist Lacey Plache thinks there is even more good news: the market holds even more room to grow. “Pent-up demand from consumers unable to obtain financing during the recession has not been fully released and will continue to contribute to auto sales growth as these consumers get access to credit,” Plache surmised. “As a result, the auto industry can continue to count on expanding credit – a key driver of auto sales growth during the recovery to date – to boost sales for the foreseeable future,” she went on to say. Edmunds pointed out the loan rebound comes after new-vehicle sales funded by dealer financing fell 22 percent from 2007 to 2009, which in turn cut off potential buyers from credit and left the industry reeling. Read coverage of a resurgence in dealer financing here.
5 New Electric Vehicles Worth a Look
Two years ago, the Nissan Leaf and the Chevrolet Volt debuted to much hype – and lots of skepticism. Buyers are warming up to them, and sales are steady, reports MSN Autos. But consumer acceptance isn't the only factor that is revving up EV production. California regulations requiring large carmakers to have zero-emission vehicles in their fleets kick in this year. So Toyota, Ford, Honda, and GM are introducing new all-electric options for those looking to plug in to fuel up. Prices are significantly higher than for gas-engine vehicles, even when you add in standard fare on plug-ins, such as navigation systems. Plug-ins won't be more widely accepted until prices come closer to comparable gas-engine cars, says John Voelcker, editor of GreenCarReports.com. "The cost has to be close enough that buyers can sense how the vast savings in 'fuel' will offset the price difference." The 2013 Honda Fit EV, which hit dealers' lots this summer in California and Oregon and will expand to the East Coast early next year, fares better. Likewise, the 2012 Toyota RAV4 EV went on sale in California in late summer. Read about these and the other vehicles on MSN Autos’ list of EVs worth a look here.
Nominate a Dealer for AIADA’s Lifetime Achievement Award
Every year, during our Annual Meeting and Luncheon, AIADA honors a highly respected member of the international nameplate auto industry with our David F. Mungenast Sr. Lifetime Achievement Award. The award was created to honor the legacy of Dave Mungenast and recognize some of the truly outstanding leaders in our industry who possess an unparalleled work ethic and a commitment to their families and communities. Recognizing members of our industry who reflect the values and commitment that Dave exemplified is the best way we have to honor his memory. If you know someone in the international auto industry like Dave, AIADA wants to know! Please take the time to read more about the award and nominate a distinguished member of our industry by clicking here. Nominations are due by October 31. The 2013 recipient of the David F. Mungenast Lifetime Achievement Award will be honored at AIADA’s 43rd Annual Meeting and Luncheon on February 11, 2013 in Orlando, Florida. If you’re not already registered, click here to do so.
Around the Web
CAR FOX at 90K Feet: Sets Record for Highest Near-Space Jump for a Fox [YouTube]
Porsche 960 Mid-Engine Supercar Rumors Surface Again [MotorAuthority]
2014 Acura MDX Goes for a Camouflaged Cruise [Autoblog]
Hershey and Caffeine and Carburetors: A Tale of 2 Car Shows [Wheels]