November 6, 2012
American Suzuki to End U.S. Auto Sales, Files Chapter 11 Bankruptcy
According to Automotive News, American Suzuki Motor Corp., whose U.S. demand plunged while the industry climbed back from recession, said it will end U.S. auto sales and filed for Chapter 11 bankruptcy protection. The company, in a statement Monday , said it will continue its motorcycle and marine engine business units and will continue to honor auto customers' warranties. In its filing, American Suzuki said it "has exhausted all available means to reduce the cost of operating the Automotive Division for it to operate profitably." Among the listed challenges were "unfavorable foreign exchange rates, disproportionally high and increasing costs associated with meeting more stringent state and federal automotive regulatory requirements unique to the continental U.S. market, low sales volumes, a limited number of models in its line-up, and existing and potential litigation costs.'' The automaker joins Daihatsu, Isuzu, and Daewoo as smaller Asian brands to drop out of the U.S. market while bigger rivals grew. As industry demand sagged to 27-year lows in 2009, Suzuki volume fell to 38,695. Last year, 26,618 Suzukis were sold, and this year's volume through October is off 5 percent from a year earlier. Click here for more on Suzuki’s plans to exit the U.S. auto market.
Romney Leads in States with Most Domestic Cars
The presidential election may come down to the wire, but it's no contest when it comes to which candidate is most favored in states where Detroit cars and trucks are most or least popular. Eight of the top 10 states for registrations in the past year of new vehicles from General Motors, Ford Motor, and Chrysler Group show up in current election polling as leaning toward or fully likely to vote Republican. According to USA Today, the two others, Michigan and Iowa, show as swing states. Meanwhile, President Obama has solid support from nine of the 10 states with the most registrations of international makers' vehicles. The only one not in his column is another swing state, Florida. In fact, when it comes to Romney's lead among states with domestic vehicle registrations, you get to 15th before you find a state clearly in Obama's column, Minnesota. And on the Obama side with international registrations, you get to 17th to find a sure Romney state, Utah. It's an interesting divide, given the role the auto industry has played in the campaigns, reports USA Today. To read the rest of its coverage of the breakdown in voters according to the vehicles they drive, click here.
Mileage Inflation Sparks EPA Scrutiny of Carmaker Claims
If you watch TV for more than an hour in prime time, the odds are you’re bombarded with ads pitching the latest fuel economy numbers from one manufacturer or another. But are those numbers valid? According to NBCNews.com, in the wake of the revelation last week that Korean automakers Hyundai and Kia had inflated their own mileage figures by as much as 6 mpg on 13 separate models. The Environmental Protection Agency is apparently getting ready to review other makers’ mileage claims. Meanwhile, even numbers that meet government scrutiny are coming under question because of the way the industry is promoting mileage in advertising. But has the industry generally lived up to the rules – or have regulators simply been lax in enforcement of guidelines that allow automakers to influence the final figures shown on their so-called Munroney window stickers and used in prime time advertising? That’s apparently a question the EPA is now asking itself. The agency noted that the audit that snared Hyundai and Kia is part of “an ongoing investigation,” hinting that the figures used by other makers will now face close scrutiny. Read more about EPA scrutiny of automaker mileage claims here.
Nine Cars Americans Keep the Longest
Owning a car for many years can be considered a sign of brand loyalty. The car is well made, or perhaps it retains its value better than other vehicles. Each of those factors should help the reputation of the carmaker. On the other hand, the longer a customer owns a car, the longer before he or she trades it in for a new one – whichis what makes the manufacturer money. Based on data provided by Edmunds.com, 24/7 Wall St. examined the 30 largest brands sold in the United States measured by unit volume to find the average length of car ownership for each make. The brands people hold for long periods have several characteristics in common. Most sell very few units and therefore have a small market share. Jaguar owners hold their cars for seven years, but in a good month the brand sells just 1,000 units. Similarly, Volvo and Mitsubishi – also high on the list for years of ownership – sell around 4,000 units per month. Another common factor among these brands is the relatively older age of the car owners. Click here to see which cars Americans keep the longest.
Hurricane Sandy's Lost October Car Sales Will Return
Hurricane Sandy took its toll on October car sales, but like the resilient residents of the storm-ravaged East Coast, they’ll bounce back and then some, reports Forbes. Car-shopping website Edmunds.com estimates Hurricane Sandy cost 30,000 vehicle sales in October, reducing the closely-monitored Seasonally Adjusted Annual Rate (SAAR) of car sales to 14.3 million vehicles from the pre-storm forecasted 14.8 million vehicles. However, those sales weren’t lost for good but merely deferred. Edmunds.com expects the sales will be made up in coming months, and additional sales could result as storm victims replace their vehicles damaged or destroyed by the hurricane. “We don’t have a handle yet on how many vehicles were destroyed or damaged in the storm, so we don’t know what the incremental volume will be in the next few months,” said Edmunds.com Senior Analyst Jessica Caldwell. “But we know there will be increased interest in both new and used vehicles as people replace vehicles damaged in the storm.” Automakers are offering incentives on vehicle purchases to storm victims. Nissan is providing employee pricing to them. Toyota announced a 90-day deferred first payment program to assist consumers in the region. Click here for more on the expected bounce-back in post-Sandy vehicle sales.
Risk Management and Self Insurance Help Save on Insurance Costs
Business owners invest much time and effort to avoid costly insurance losses. Insuring with Federated Insurance may allow them to do just that through a Self-Insured Retention (SIR) program. This plan allows the business to retain more of the insurance risks while offering the opportunity to receive significant up-front premium savings. Self-insurance includes a variety of strategies—from assuming larger deductibles to choosing not to insure a particular risk or peril at all. The financial circumstances of each business will dictate whether a $20,000 loss, for example, will be classified catastrophic, a setback, or merely a nuisance. Business owners should not assume more risk than they’re comfortable with; however, self-insuring certain types of risks may make sense. In addition to up-front premium savings, additional savings could result from the positive impact of improved claims experience on the company’s overall insurance premiums. Dealers are not left on their own to manage the risks included under the SIR Plan. A Risk Consultant assists with identification of risk management needs, helps the marketer determine the most appropriate techniques, helps with implementation of programs and procedures, and monitors results. Federated is ready to help you get started on your own Self-Insured Retention Plan. To find your local representative, visit www.federatedinsurance.com or call 1-800-533-0472.
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