August 22, 2012
Auto Buyers are More Satisfied with Major Automakers, List Says
According to The Detroit Free Press, customer satisfaction with major automakers has returned to its highest point in the nearly 20 years of the widely tracked American Customer Satisfaction Index (ACSI). The industry achieved an overall ranking of 84 out of 100, tying 2009 for its best-ever mark. This year is the industry's most impressive performance, said David VanAmburg, managing director of ACSI. In 2009, customers were happy because vehicle prices hit rock bottom when the U.S. government launched the Cash for Clunkers incentives in the summer of 2009 during the depths of the Great Recession. Prices have since rebounded – but consumers are still satisfied. ACSI measures three-year satisfaction among new-vehicle buyers. Despite improvement among the domestic brands, international companies still lead. Toyota's Lexus luxury brand was second-best at 89, up 2 points. Subaru (87), BMW (86), Hyundai (85), Mercedes-Benz (85), Toyota (85), and Volkswagen (85) all beat the industry average. Click here to see how several international nameplate brands fared compared to previous years. The auto industry beat the scores of the U.S. government (67), banks (75), hospitals (76), newspapers (64), and software (77), but trailed credit unions (87), consumer electronics (85), and soft drinks (85). Read more about consumer satisfaction here.
GOP Seeks Review of Fuel Economy Rules
Three top House Republicans asked the White House Tuesday to delay finalizing the 2017-25 fuel economy rules, reports The Detroit News. House Oversight and Government Reform Chairman Darrell Issa (R-Calif.), Rep. Jim Jordan (R-Ohio), who chairs the subcommittee overseeing regulations, and Rep. Mike Kelly (R-Pa.), an auto dealer, wrote to the Obama administration's top regulatory review official, calling for further review. The committee asked Boris Bershteyn, acting administrator of the White House Office of Information and Regulatory Affairs, "to return the rule to the agencies for further consideration of its adverse consequences to consumers and the economy." Kelly said "the new CAFE standards will limit choice, compromise safety, and increase costs for millions of Americans who are already struggling to get by in the Obama economy. The American consumer was not given fair representation at the CAFE negotiation table, and they have since been put on the menu." The National Highway Traffic Safety Administration and Environmental Protection Agency last week abandoned a self-imposed deadline of finalizing the 2017-25 rules by as early as Friday, with one House Republican suggesting the administration was having second thoughts. Click here for recent developments in proceedings to finalize new fuel economy standards.
Auto Loan Defaults Drop to Lowest Level Since 1999
More auto buyers are making their payments on time. For the second consecutive quarter, auto loans that are at least 60 days past due are down. In fact, reports USA Today, they are at their lowest levels since TransUnion, the big credit bureau, started keeping track in 1999. The percent of buyers more than two months due dropped to 0.33 percent in the second quarter, down from 0.36 percent in the first quarter. Compared to the same quarter a year ago, auto loan delinquencies dropped by 25 percent from 0.44 percent, according to TransUnion. The declines took place in 37 states when compared year over year. “Consumers now value their auto loans more than their credit cards and mortgages," said Peter Turek, automotive vice president inTransUnion's financial services business unit, in a statement. "This is partly due to the need for transportation to get to work or to seek employment." Plus, he says consumers with car loans have more equity in their vehicle than in the past and don't want to risk losing the vehicle to repossession. The number of subprime loans increased 9 percent in the second quarter compared to the same period a year ago. Click here for more on auto lending.
The Return of Small, Impractical, and Sexy
Two of the hottest-selling cars in America right now are a pair of impractical sporty coupes designed to make the daily commute feel like a day at the races. The Scion FR-S and the Subaru BRZ, launched at the beginning of summer, aren't packed to the gills with sexy tech features. They don't warm the high-mileage hearts of the eco-conscious set. And they're pretty much worthless when it comes to hauling kids or lugging a week's worth of groceries. Not that these considerations matter to enthusiasts like Darren Seeman, who put down a deposit on his FR-S in February – more than three months before the official launch – and watched the shipping docks in his hometown of Portland, Ore., to see when his car landed. Mr. Seeman says he likes cars that are light, driven by the rear wheels, and not too expensive – a combination that just a couple of years ago was close to extinct in the U.S. market, except for the aging Mazda Miata. The Wall Street Journal reports that sporty cars sales are growing as the market recovers and more companies field new models. Read more about renewed demand for small, RWD sports cars here.
9 Cars You Won't See in 2013
Discontinuing a car line isn't like closing a Broadway show or cancelling a television series. In addition to hundreds of millions of dollars in sunk cost, a lot of marginal profit is being sacrificed – the profitability of a car line can actually increase as it ages because the development costs have been amortized. But at some point, a mercy killing for the weak is required. Sales have fallen too low, another model has come along to replace it in the product lineup, or the car has simply become an embarrassment. At least two of the three were the reasoning behind Daimler's decision to stop making all five Maybach models in June, six months ahead of schedule. Often compared to an airport executive lounge on wheels, the car never found an audience among either the established or nouveau rich. Its sales had sunk to a pitiable level. Through July, only seven Maybachs had found buyers this year vs. 224 for Rolls-Royce. CNN Money reports on some other models that will be breathing their last at one point or another in 2013. Click here to see the list.
Around the Web
BMW 'is' Models to be Replaced by M Performance Line [MotorAuthority]
10 Cheapest Cars and Minivans to Insure for 2012 [Motor Trend]
Web Series: Comedians in Cars Getting Coffee [comediansincarsgettingcoffee.com]
Monterey Auctions Sell $260M in Classic Cars [Motoramic]