February 22, 2012
Carmakers' Sales Targets Outpace Forecasts for Industry
In more buoyant times the wisecrack went something like this: "Add up all the automakers' sales projections for the year and you're looking at a market of 20 million units." Toting up all of the 2012 forecasts won't get you to 20 million, but you'd be well north of what any analyst says total industry sales actually will be in 2012. According to Automotive News, Honda is aiming for a 25 percent increase this year; Nissan, 18 percent; and General Motors, Toyota, and Chrysler all believe their brands can gain around 15 percent. All those internal targets easily outpace overall industry growth estimated to be 8 percent. The analysts’ consensus is that sales will be 13.6 million to 13.8 million this year, up from 12.8 million in 2011. But the combined internal targets of 15 automakers comes to 14.3 million. And that does not account for all the small brands, which should push the total to 14.4 million or higher. Click here for a chart of the 2012 sales projections for 15 automakers. The danger is that production plans are derived from sales goals, which means a half million or so units could go begging at auto dealerships this summer and fall. Click here for the full story.
Consumer Reports Supports Cars of the Future
Consumer Reports magazine announced its support Tuesday for so-called vehicle-to-vehicle technology, which will allow autos to communicate with each other electronically – and potentially save thousands of lives. According to CNN, vehicle-to-vehicle communication, or V2V for short, allows cars and trucks to communicate with other vehicles in a given area. Each vehicle broadcasts its own speed and direction, making it easier to avoid potential collisions. A vehicle could even send out an alert as its wheels begin to skid, alerting vehicles behind it to a slippery surface ahead. Click here for video of a Mercedes that almost drives itself. The technology has been under development by major automakers for years. The Department of Transportation's National Highway Traffic Safety Administration is expected to rule next year on moving forward with research into the technology. V2V technology could help drivers avoid or minimize about 80 percent of crashes involving sober drivers, according to NHTSA. The systems can also be used to communicate, not just with other cars, but with things such as street signals and signs, allowing cars to react automatically to red lights or school zones. For more on this new technology, including how it works and privacy concerns, click here.
Fiat Retools Marketing After Poor Launch
U.S. Fiat dealers are seeing the first results of Chrysler Group's efforts to fix its poorly executed Fiat 500 launch. Automotive News reports that Tim Kuniskis, 45, took over as head of the Fiat brand in North America in November, replacing Laura Soave, who left the company after 20 months. Since his promotion – and armed with a mandate from Chrysler-Fiat CEO Sergio Marchionne to fix what had gone wrong – Kuniskis visited each of the brand's nearly 140 U.S. dealers during a two-week period. He has changed the way the 500 is marketed, and increased national and local advertising for the car. Fiat has suspended its fall marketing effort that starred entertainer Jennifer Lopez and was aimed mainly at women. The brand moved its advertising to a more broad-based effort to introduce the 500 to a wider audience. Click here to watch the popular “seduction” commercial that aired during the Superbowl. Many dealers had spent $3 million or more establishing separate Fiat showrooms on sales projections that Fiat would sell 50,000 vehicles per year in North America, and complained last year that they were losing money. Click here for the full story.
While Detroit Gets the Spotlight, Foreign Carmakers Quietly Rev Production Plans
While the big media spotlight has been on Detroit‘s comeback, another revival is taking place in the American car market. Forbes reports that European and Asian automakers are quietly stepping up their production plans in the United States and Canada, responding to currency concerns as well as stronger sales demand. In 2011, vehicles built by European and Asian car makers in the United States and Canada accounted for three out of every 10 cars and trucks sold in the United States. It’s possible that they could grab more U.S. sales going forward. Toyota said last week that it is looking at shifting Lexus and Prius production east from Japan, due to the super-strong yen. That’s on top of a $400 million expansion that’s taking place at Toyota’s Princeton, Ind., plant. And, Toyota’s new plant in Blue Springs, Miss., which opened in November, is already up to its full component of 2,000 workers. Honda is expanding in Ohio, where it’s building a new engine and transmission family. It also will build the NSX, which returns in 2015 for the first time in a decade, at a new facility in Marysville. Go to AIADA’s www.whatisanamericancar.com for more on international brand investment in the U.S. Click here for the whole story.
S. Korea, U.S. Free Trade Deal to Take Effect March 15
According to Reuters, a long-delayed free trade deal between the United States and South Korea will go into effect on March 15. The pact was signed nearly five years ago but faced tough resistance from some industry and agricultural interests in both countries. South Korea's Minister for Trade Park Tae-ho told reporters that implementation of the deal would help South Korean exporters who have lost sales to Europe because of that continent's debt crisis that has hurt consumer and business demand. "Coming at a time such as this, the U.S. free trade agreement is a positive opportunity for our exports to the United States, which is the world's largest developed market, to grow significantly," he said. U.S. Trade Representative Ron Kirk, in a statement, said the pact will help support tens of thousands of American jobs in export industries. "Entry into force of this agreement will open up Korea's $1 trillion economy for America's workers, businesses, farmers, and ranchers while also strengthening our economic partnership with a key Asia-Pacific ally," Kirk said. Read the latest about the U.S.’s new free trade agreement with South Korea here.
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