Japanese Luxury Brands Reboot

First Up 03/08/12

March 8, 2012

Obama Proposes Higher Tax Credits for Alternative-Fuel Vehicles
President Barack Obama proposed expanded tax credits and community research grants to make alternative-energy cars and trucks more attractive to buyers. According to Automotive News, electric, natural gas, and hydrogen-powered vehicles would be covered by the plan, which Obama announced Wednesday in North Carolina. Obama called on Congress to make two changes in tax law to coax drivers into less-polluting vehicles. One would raise the tax credit to $10,000 from $7,500 for the purchase of a so-called advanced vehicle. The credit would be applied instantly at the dealership. The administration's goal is to make electric vehicles as affordable and convenient as gasoline-powered vehicles by 2020. The second tax change would target buyers of electric and natural gas powered commercial trucks, including semi-tractor trailers. Those vehicles would qualify for a 50 percent tax credit for half the additional cost over a conventional truck, to help overcome the initial upfront cost. The proposals came as Obama visited a Daimler Trucks North America plant, which has begun hiring hundreds of workers to meet demand for heavy-duty trucks, a sign of economic recovery. For more on President Obama’s tax credit proposals, click here.

Japanese Luxury Brands Reboot
Three decades after crashing the European luxury car party, Japan's top brands – Lexus, Acura, and Infiniti – are stepping up their game. While Toyota's Lexus division quickly made solid inroads into the premium market segment from its start in 1989, Honda's Acura offshoot and Nissan's Infiniti nameplate have found the going much tougher. The Detroit News reports that now all three Japanese brands are revising their strategies and launching a flood of new models. For U.S. consumers, the result is a forthcoming host of fresh alternatives to the traditional European offerings. In the case of Lexus, the arrival this summer of the new generation GS midsized sedan signals a much more aggressive approach to design and vehicle dynamics. Acura is aiming to reboot its image with a series of new models that take a more measured approach to design while maintaining a focus on performance. At Infiniti, there are rumors of an NSX-rivaling supercar in the works to spice up the brand's appeal in showrooms. With this fresh onslaught from the Japanese brands, luxury car buyers from top to bottom are in for an exciting ride. Read more about the resurgence of Japanese luxury brands here.

BMW Lifts Dividend as Profit Surges
BMW AG today reported a sharp jump in full-year net profit, fueled by booming demand for luxury vehicles, and said it will raise its dividend. "The past year has been the best year in the BMW's corporate history," Chief Executive Norbert Reithofer said in a statement. "We have achieved new sales volume, revenues, and earnings highs, and exceeded our targets." According to The Wall Street Journal, the car maker reported a 51 percent jump in full-year net profit to €4.91 billion ($6.46 billion), and said it plans to raise its dividend to €2.30 per common share, up from €1.30 last year, and €2.32 per preferred stock, up from €1.31. BMW's closely-watched earnings before interest and tax, or EBIT, rose 57 percent on the year to €8.02 billion. Revenue improved 14 percent to €68.8 billion. Vehicle sales rose 14 percent year-on-year in 2011 to 1.67 million BMW, Mini, and Rolls-Royce cars. The Ebit margin in BMW's core automotive segment was 11.8 percent, making it one of the world's most profitable car makers. BMW is scheduled to release detailed earnings for the full year, including fourth-quarter results, on March 13. For more on BMW’s profit surge, click here.

4 Big Carmakers Battle it Out for Small Car Buyers
According to Forbes, if you combine the Honda Civic, Toyota Corolla, Ford Focus, and Chevrolet Cruze, you end up with a red hot race for small car buyers. Automakers, who face stricter fuel economy standards, need to sell as many small cars as they can in order to meet them. They realize that smaller vehicles may be the only ones that budget-strapped consumers can justify buying new. And, lifestyle changes mean that some buyers have turned away from the big vehicles they used to own. To be sure, the compact market isn’t limited to just those four vehicles. The Mazda 3, Nissan Sentra, and Hyundai Elantra are also making a showing. Today’s small cars are not the cheap vehicles of the past. “It’s been interesting to see the market’s acceptance of small cars loaded up with luxury features,” said Jeremy Anwyl, the chief executive of Edmunds.com. This quartet is setting the pace for the rest of the market, and each company has something to prove. It’s likely to be a heated battle for the rest of the year in the small car market, especially if gasoline prices keep rising. Click here to read more about the race to capture America’s small car buyers.

Honda Looks to Dealers to Boost Natural Gas Station Network
According to Bloomberg, Honda Motor Co., the only automaker selling compressed natural gas-powered cars to U.S. drivers, wants some of its dealers to also install pumps to sell the fuel as its seeks to double sales of Civic Natural Gas (CNG) vehicles. Boosting sales of Indiana-built CNG sedans requires more fuel stations, Steve Center, U.S. vice president for environmental business development, said in an interview. “If the dealer had a fueling station, it would really reduce some of that concern for the customer,” Center said at Honda’s U.S. headquarters in Torrance, California. “It’s not our place to create infrastructure, but it’s a chicken-and-egg situation and we’re going to have to nurse that egg along.” Currently, 270 U.S. Honda dealers plan to sell the Civic Natural Gas, a revamped version of the Civic GX compact sold since the 1990s. The Tokyo-based carmaker’s initial goal is to sell “4,000 to 5,000” CNG vehicles annually, double the previous rate, Center said. Honda builds the model at its Greensburg, Indiana, plant. For more on Honda’s efforts to have natural gas pumps installed at some of its dealerships, click here.

Find Out How to Get a 30% Drop in Property & Casualty Claims
Dealer members who implement the loss control methods presented in Federated Insurance’s Designated Risk Manager (DRM) seminar have an average 30 percent drop in loss claims within 12 months after attending the class. AIADA’s Affinity Partner, Federated is hosting the upcoming DRM seminar June 11 - 13, 2012, at Federated’s corporate headquarters in Owatonna, Minnesota. The seminar is free (valued at $2,000) for AIADA members and you do not have to be insured with Federated to attend the class (travel, lodging, and incidental meals are the responsibility of the attendee). Click here to complete the registration form. In the two-and-a-half day program, attendees are provided with the proper tools they need to assess risk, develop a risk management program, and effectively implement solutions for risk analysis and problem solving. Attendees will learn about key dealership loss categories, how an underwriter views and prices your dealership, and claims handling procedures. Attendees will receive a customized, individual loss analysis for their dealership. Register Now – space is limited and the registration deadline is May 11. For additional information, contact Royetta Spurgeon at (800) 533-0472 or rlspurgeon@fedins.com.

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