Kelley Blue Book: August U.S. New Car Sales to Rise 19%

First Up 08/24/12

August 24, 2012

U.S. Auto Efficiency Rules Coming Soon, Feds Say
The U.S. government said on Wednesday it plans to complete rules "soon" that significantly boost automobile efficiency, despite calls from some Republicans for further evaluation of the regulations. The Obama administration had planned to finalize standards last week that would require companies to reach an average fuel efficiency across their U.S. fleets of 54.5 miles per gallon by 2025, but the release of the regulations was delayed. While declining to provide a specific timeline, the Transportation Department stressed the rules are moving forward. "The rule is still undergoing interagency review and we expect that process to be completed soon," department spokeswoman Lynda Tran said in a statement. According to Automotive News, some Republican lawmakers, led by House Oversight Committee Chairman Darrell Issa, have raised concerns about the fuel economy proposal that was crafted after months of negotiations between the Obama administration and automakers. The process used to arrive at these new efficiency targets was flawed, lacked transparency, and failed to adequately assess how the new rules would affect safety and vehicles costs, Issa and committee colleagues Jim Jordan and Mike Kelly said on Tuesday. Click here for the latest on new U.S. auto efficiency rules.

Mazda Bows Out in Flat Rock
According to The Detroit News, the last Mazda is expected to roll off the assembly line in Flat Rock, Mich., today as the Japanese automaker hands the keys to the plant back to its one-time parent, Ford Motor Co. Known as AutoAlliance International, the plant has been run as a joint venture between Ford and Mazda since 1992, producing the Mazda6 sedan and the Ford Mustang muscle car. Workers will mark the end of Mazda production with a small ceremony inside the plant today. "The strategic cooperative relationship between Ford and Mazda has spanned nearly 30 years, and is one of the most successful partnerships in the automobile industry," said Ford spokesman Todd Nissen. "The alliance has been and continues to be an effective way to utilize the resources of both organizations and maximize joint synergies." The Flat Rock factory began life as a Ford casting plant in 1972, but the automaker closed the plant in 1981. Mazda purchased the factory in 1987 and transformed it into an automobile assembly plant. It produced the Mazda MX-6 and the Probe. Click here for coverage of Mazda’s departure from its Flat Rock, Mich., facility.

Kelley Blue Book: August U.S. New Car Sales to Rise 19%
August new car sales in the U.S. are expected to jump 19 percent from a year earlier as retail demand from consumers remains steady, according to a report by Kelley Blue Book. The publication estimates August new car sales to hit about 1.3 million units. When adjusted for an additional selling day in August, car sales are expected to rise 14 percent. The daily selling rate is expected to decline nearly 1,000 units a day compared with July, due to a seasonal decline in fleet sales taking place during the second half of the year, Kelley Blue Book said. Retail sales volume is expected to be relatively flat month-over-month, outperforming seasonal expectations. The Wall Street Journal reports that although the economic recovery remains sluggish, consumer sentiment improved slightly last month thanks to a growing belief that the housing market has bottomed. Kelley Blue Book noted that improved confidence bodes well for auto sales, though high unemployment will continue to pressure sales in the long term. “Although economic jitters remain top-of-mind for many, those consumers seeking replacement vehicles continue to opt for new cars, with used-car values remaining high,” said Kelley Blue Book senior market analyst Alec Gutierrez. For more on projected auto sales for August, click here.

Fewer Tech-Savvy Teens are Driving
Teenagers talking about speeding these days are more likely to be referring to their phone and Internet connections than cars. The more time young people spend connecting through texting, email, Facebook, and other social media sites, the less interest they have in driving, according to researchers at the University of Michigan Transportation Research Institute. The Los Angeles Times reports that in 1983, 69 percent of 17-year-olds had a driver's license. But just 46 percent of that age group had a license in 2010. Driver's license rates for 18- and 19-year-olds also have plunged over the same time period. The licensing rate reduction persists all the way through people in their 30s, Sivak said, "Consequently, there are fewer potential buyers of vehicles in a major segment of the buying population," said Michael Sivak, who is a professor at the institute. Other issues are probably contributing to the decline in license rates for younger people. "The current economic downturn makes it more difficult for young persons to own a vehicle because of the initial expense, maintenance, gas, and insurance," Sivak said. Click here to read more about the licensing rate among today’s young people.

'Win Small' Wins Big for MINI Among Potential Car Buyers
MINI recently played up its underdog status in a new campaign “Win Small” as part of its sponsorship for the Olympic Games, reports Forbes. Perception of MINI has increased among people planning to purchase a car in the next 6 months since its “Win Small” campaign was launched online and on mobile devices on July 17. Click here to view the online campaign on YouTube. The campaign celebrates small competitors achieving victory against the odds. A commercial aired from mid-July sees various small people win over their bigger or larger competitors. The “Win Small” campaign also included billboards featuring small competitors, and a social media channel encouraging fans to share their experience of overcoming adversity. Tom Salkowsky, head of MINI USA marketing, said: “Our Win Small content underscores MINI’s size but also our mind set of being the feisty underdog overcoming the odds and skeptics.” The pint-size campaign coincides with strong sales figures. The most recent MINI sales report for July 2012 reported the brand’s most successful July to date in the US. It sold 5,855 automobiles in the month of July, up 9.8 percent from July 2011. Click here for more on MINI’s “Win Small” ad campaign.

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