House leaders crafted a bill over the weekend that would provide third-party arbitration for rejected General Motors Co. and Chrysler Group dealerships using criteria more favorable to dealers than those proposed by the automakers last week. According to Automotive News, the legislation, which is being forwarded to Senate leaders for consideration, would allow dealers who want to appeal their closures to "present any kind of relevant information during the arbitration," a copy of the new bill shows. The arbitrator is directed to consider the dealer's experience, past profitability, current economic viability, and the demography and geography of the local market, the legislation says. The bill would be attached to a financial-services spending bill in a congressional conference committee formed to resolve differences in the legislation passed by each chamber. The goal is to have both the House and Senate approve the final spending measure, with the dealer amendment attached, and send it to President Barack Obama by Christmas recess, a House aide said. On Friday, GM and Chrysler outlined plans for rejected dealerships and broke off settlement talks intended as an alternative to legislation. The automakers' arbitration criteria rely on each company's original business standards in marking dealerships for elimination. Click here for more on proposed legislation that would benefit rejected Chrysler and GM dealers.
Hyundai Motor Co. plans to increase manufacturing capacity in China by 60 percent over the next three years, reflecting its high confidence that the world's largest auto market by unit sales will continue rapid growth, a senior executive said. According to the Wall Street Journal, plans include a fifth plant in China, scheduled to open by 2012. Hyundai, which has seen rapid growth in sales of its Hyundai- and Kia-brand vehicles in China, also plans to increase manufacturing capacity at its four existing plants in China by 20 percent next year to a combined 940,000 vehicles annually. The new plant will be capable of producing 300,000 vehicles a year and should boost overall capability to 1.24 million cars when it is completed. Even as they have scaled back in many of their home markets, international auto makers are racing to expand production in China. Helped by government stimulus measures, vehicle sales in China have grown about 40 percent so far in 2009, and are likely to exceed 13 million vehicles for the full year, surpassing the U.S. as the world's largest auto market. Although growth is expected to slow in 2010, many auto executives feel the Chinese market has years of significant expansion left, given that its rates of car ownership remain low. Click here for more on Hyundai's plans to expand its Chinese operations.
Federal regulators have launched an investigation into complaints of engine stalling on certain Toyota Corolla and Matrix models, the latest in a series of safety issues facing the Japanese automaker. According to MSNBC, the National Highway Traffic Safety Administration (NHTSA) said last week it had received 26 complaints of engine stalling on 2006 Corollas and Matrixes equipped with 1ZZ-FE engines. Some complaints said vehicles stall randomly while driving, including on highways and in intersections, according to the agency. In addition, some have complained about restarting the engine or recurring stalls following an engine restart. NHTSA said it is looking into the frequency, scope, and safety consequences of the possible defect. According to a Toyota spokesman, the company is complying with requests from the government for additional information. The investigation does not necessarily mean a recall will take place. Last month, Toyota said it would replace the gas pedals on 4.3 million vehicles in the U.S. because the pedals could get stuck in the floor mats and cause sudden acceleration. Click here for more on a federal inquiry into claims of stalling on some Toyota models.
According to Automotive News, American Honda is passing Chrysler Group to become the No. 4 auto maker in the United States. Through November, American Honda had sold 1.044 million units, holding a 200,000-unit lead over Chrysler. At this time last year, Chrysler led Honda by 21,000 units and squeaked out a 25,000-unit victory at year's end. "We only look at our sales and our objective," said John Mendel, American Honda vice president. "We may look at Civic and Corolla or Accord and Camry, but not at who ranks where." Mendel says the current recession has thrown everyone's sales numbers into confusion. "We are all in the same hospital, and some of us are more critical than others," he said. "Everyone is hurting. We cut Formula One. We cut 200,000 units of production. It was the right thing to do, but it was painful." He added: "Either you pay in production cuts, increased fleet sales or increased incentives, but everyone is paying right now." Click here for more from Automotive News on Honda's recent sales figures.
Thousands of dealers nationwide are adjusting to what will likely be an 11-million-unit sales market this year. That's down considerably from the 13.2 million units sold in 2008. Part of that adjustment? Managing how many vehicles they have on the lot at once. Leave too many Toyota RAV4's sitting unsold on the lot and the market will adjust accordingly, rapidly depreciating values and resale prices. Provide too few, and dealers lose money on sales they could - and should - have made. Forbes has compiled its projections for the most popular cars of 2010 using day-supply data provided by Ward's Automotive Group, as well as automaker-supplied data as a measure of dealer inventory levels. Vehicles with the lowest days' supply made the publication's initial list (Ward's says the industry average is 63 days), which was pared down using J.D. Power and Associates' average retail turn rate for each segment in November. The average retail turn rate for all vehicles is 48 days. It's 32 days for Asian brands, 47 days for brands in Europe, and 63 days for domestics. For this list, Forbes evaluated only vehicles from major automakers, not limited-production models that sometimes have years-long waiting lists for bespoke treatments and individualization. Click here to view a slideshow of the list. Click here to read in depth analysis on Forbes picks on the most popular cars of 2010.
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