November 7, 2012
Obama Wins a Second Term
President Barack Obama won re-election Tuesday in a closely fought race, overcoming the doubts of a nation ravaged by a prolonged economic downturn and setting up a test of whether he can forge a productive second term in a divided political system. The Wall Street Journal reports that Mr. Obama's victory in the bruising campaign marks a landmark in modern election history. No sitting president since Franklin D. Roosevelt in 1940 has won re-election with a higher unemployment rate, which stands at 7.9 percent. It is also the first time since 1816 the U.S. has had three consecutive two-term presidents. Greeting Mr. Obama will be a divided Congress. After the election, Washington remained aligned exactly as it was Tuesday morning, despite $6 billion in spending and 1.2 million political ads in the presidential race alone. Americans handed Mr. Obama the job of navigating conflicting impulses in both Washington and the nation, a partisan divide the president has previously struggled to master. Mr. Obama sealed his victory with wins in swing states including Ohio, Colorado, and Virginia. He was running neck and neck in Florida. Click here to compare the 2012 electorate. Read more about President Obama’s victory here.
AIADA Responds to Suzuki Bankruptcy Filing
American Suzuki Motor Corp. on Monday filed for Chapter 11 bankruptcy protection and said it will cease selling automobiles in the U.S. as part of a plan to restructure its business. According to NBCNews.com, the company, based in Brea, Calif., is the sole distributor of Suzuki Motor Co. vehicles in the continental U.S. In documents filed with the U.S. Bankruptcy Court in the Central District of California, the company estimated that its debts and liabilities range from at least $100 million to as much as $500 million. “I am deeply sorry to learn that American Suzuki is withdrawing from the United States auto market. Over the next months, AIADA will work with Suzuki’s more than 200 American franchises to ensure that they have the information and tools they need to move forward while continuing to service their customers," said AIADA President Cody Lusk. Click here to read AIADA’s statement on Suzuki’s automotive bankruptcy. Once it exits bankruptcy protection, American Suzuki Motor said it will focus on selling Suzuki motorcycles, all-terrain vehicles, and marine outboard engines. It said that it is exiting the car business because of slow sales, unfavorable foreign exchange rates and high costs due to U.S. regulatory requirements. Read about Suzuki’s plan to exit the U.S. auto market here.
Most East Coast Dealers Reopen, Face Gas Rationing
Close to 100 percent of New Jersey's new-car dealerships were back up and open Monday, but about 30 percent of them were operating without electricity, Jim Appleton, president of the New Jersey Coalition of Automotive Retailers, estimated. Late last week, nearly 70 percent of the state's dealerships were still without electricity, phones, and the Internet, according to Automotive News. About one or two dozen dealerships in the state had severe damage and are unable to service vehicles, Appleton said, but are open for sales. In New Jersey, car sales have increased since the storm as consumers begin to replace damaged or destroyed vehicles. "Dealerships are seeing a lot of traffic, people are coming in to their stores," Appleton said. Sandy churned through an area that generates about 25 percent of U.S. auto sales. Some manufacturers are filling up gasoline tanks before delivering vehicles to dealerships, Appleton said. The New Jersey retailers' group plans to ask the governor to make an exception to the rationing rule so dealers can fill up new cars, while the Greater New York Automobile Dealers Association is working to provide vouchers so cars can be delivered half full or less. Click here to read about how northeast dealers are recovering following Hurricane Sandy.
Hyundai May Lose $100M in MPG Case
Hyundai Motor Corp. and its Kia Motors unit's decision to revise downward its North American fuel economy estimates and reimburse owners for gasoline will cost the Korean automaker $100 million, Moody's Investors Service says. But Moody's said the move would not prompt a lowering of the Korean automaker's credit rating. Last week the brands announced they would reduce fuel economy estimates on nearly 1.1 million of their vehicles.The Detroit News reports that Hyundai is reducing the combined Hyundai-Kia 2012 fleetwide mpg by 3 percent to 26 mpg from 27 mpg. "This incident will damage their brand recognition," Moody's said. "However, there will be no impact on the Baa1 ratings and stable outlooks, because Moody's believes both companies have adequate financial cushions and the impact on their competitive positions will be manageable." Last week, Hyundai's top U.S. executive John Krafcik told The Detroit News the costs would be "a big amount," but declined to estimate. "Our focus is on making it right for the customers. We're honestly not so focused on that cost," he said. Click here to read about the impact on Hyundai and Kia, which will revise its CAFE estimates.
This is the Season – for Deals on Luxury Cars
At Mercedes-Benz of Novi in suburban Detroit, cars in the showroom are wearing big blue bows, and sales manager Mike Dega is gearing up for a record two months of holiday-season sales. “It’s started right now,” Mr. Dega says. “We’ve got a full court push.” Luxury brands have traditionally used the final weeks of the year to clear out last year’s inventory, while stirring up interest for new models. This year, reportsThe Wall Street Journal, car buyers can expect more and earlier deals. The competition between makers is particularly fierce as the two leading German brands, Mercedes-Benz and BMW, vie for bragging rights as the No. 1 luxury brand in the U.S. market. So confident is BMW in its U.S. market that it is diverting more than 5,000 vehicles from slower-selling European and Asian markets—including popular all-wheel-drive 3 series sedans. Mercedes is countering with similar discounts aimed at keeping customers in the fold, along with deals they hope will prod people to switch from rival brands. Mercedes is also allowing drivers of leased cars to get out of their contracts up to five months early if they agree to take a new vehicle. Click here for more on the holiday season’s early luxury car deals.
Join Dealers in Orlando for AIADA’s 43rd Annual Meeting and Luncheon
Each year, AIADA’s dealers gather to consider where the international nameplate auto industry stands and prepare for what the future holds. Join fellow dealers and industry insiders in Orlando, Florida on February 11, 2013 for its 43rd Annual Meeting and Luncheon. This year, we’ll discuss how the economy is Driven by the international nameplate auto industry and what dealers can do to maintain their edge. Featuring keynote remarks by Mercedes-Benz USA President and CEO Steve Cannon, the presentation of the David F. Mungenast, Sr. Lifetime Achievement Award, and the passing of the gavel from 2012 Chairman Ray Mungenast of Missouri to 2013 Chairwoman Jenell Ross of Ohio, the 43rd Annual Meeting and Luncheon is a can't-miss event for international nameplate dealers, as well as their employees. Register today by clicking here or by calling 1-800-GO-AIADA.
Around the Web
Rock Bouncer vs. Police Chaser [Motoramic]
Land Rover to Expand Lineup to 16 Models by 2020 [AutoGuide.com]
2012 VW Beetle: Never Enough Time on Roadtrips [Edmunds Inside Line]
Audi Launches Black Edition Models in UK [Autoblog]