BMW Bets All-Wheel 3 Series Will Help Top Mercedes in U.S.

First Up 09/17/12

September 17, 2012

BMW Bets All-Wheel 3 Series Will Help Top Mercedes in U.S.
BMW is betting a new all wheel-version-drive of its 3 series sedan will help catch a resurgent Mercedes that has outsold BMW all year long in the U.S. market. The perennial race among BMW, Daimler AG's Mercedes-Benz, and Toyota Motor Corp.'s Lexus in the U.S. has become more important than ever, reports The Detroit News. A slowing economy in China and a five-year slump in Europe have raised the stakes in the U.S., where premium cars continue to sell briskly. "North America is the only bright spot, and in the luxury race that's shaping up to be really important," said Michelle Krebs, an analyst with researcher "It's vital for the German automakers because their home market of Europe is a mess." Both Mercedes and BMW are thriving in the U.S, but BMW is determined to do better after trailing Mercedes this year even though it introduced a redesign of its popular 3 Series in February. The early-year stumble may have been the result of offering the Munich-based brand's top-selling model without a four-wheel drive version, popular in cold-winter markets such as New York and Boston that are chock-full of luxury-car buyers. Click here for the latest on BMW’s quest to be tops in U.S. luxury sales.

U.S. to Launch Automotive Trade Case Against China
The United States will launch a trade complaint against China over what the Obama administration says is Beijing's unfair government backing of its auto industry, a White House official said. President Barack Obama will announce during a campaign tour of Ohio today that he is initiating a case against China at the World Trade Organization over allegedly illegal subsidies for automobiles and auto parts, the official said. Obama has said Beijing is abusing trade laws by imposing more than $3 billion in duties on U.S. auto exports. In addition to launching the subsidies case, Automotive News reports that the president is taking the next formal step in the World Trade Organization to protest those duties. The move allows Obama to take a stand on China and advance the interests of a major job-providing industry in a state that could tip the balance in a close election. His opponent, Mitt Romney, has attacked Obama for what he says is an overly cautious approach to pressuring China into observing international norms for trade, foreign exchange, and patents and trademarks. Click here to read more about President Obama’s reported plans to lodge a trade complaint against China for its auto industry policy.

U.S. Balks at GM Plan
The Treasury Department is resisting a push by General Motors GM to sell the government's entire stake in the automaker. U.S. taxpayers kept the nation's largest auto maker by sales afloat with a $50 billion bailout in 2009 and now own 26.5 percent of the company. But GM executives have grown increasingly frustrated with that ownership, and the stigma of being known as "Government Motors." Executives have said the U.S.'s shadow is a drag on its reputation and hurts the company's ability to recruit talent because of pay restrictions. Privately, executives are also irked at the continued curbs on corporate jet use. Earlier this summer, GM floated a plan with Treasury officials to repurchase 200 million of the roughly 500 million shares the U.S. holds in the auto maker, according to people familiar with the discussions. Under the plan, Treasury would sell the remaining shares through a public stock offering. But Treasury officials aren't interested in GM's offer at the current price and aren't in a rush to offload shares, reports The Wall Street Journal. The biggest reason: A sale now would leave the government with a hefty loss on its investment. Click here for more on tension between GM and the Treasury Department.

Natural Gas Gets Nod from Auto Analysts as Vehicle Fuel of Future
The Detroit Free Press reports that natural gas got a strong vote of confidence as a future vehicle fuel at the Society of Automotive Analysts Strategic Planning Summit in Southfield, Mich., on Friday. New methods of extracting the gas are one of the biggest changes affecting the auto industry in years, General Motors chief economist Mustafa Mohatarem said. "The U. S. now has a 100-year supply of natural gas," he said. "I'd make a bet it's the next big transportation fuel. The price is so much lower than gasoline – people will find a way to use it." The idea got a second from John Casesa, senior managing director of investment banking at Guggenheim Partners. "We're also very high on natural gas," he said. "It's a massive change for the United States, and probably a big deal for the motor industry." The meeting marked the Society of Automotive Analysts' 25th anniversary. Maryann Keller, managing partner of Maryann Keller & Associates and one of the SAA's founders, said the greatest lesson automakers should draw from the last 25 years is to eliminate anything that distracts them from developing great vehicles. Click here for more on how the natural gas is expected to play a role in the U.S. auto industry.

San Francisco Auto Dealers Team on New Trade Group to Promote Economic Growth in City
Auto dealers in San Francisco have come together to form a new trade group, with the goal of using their economic powers for the good of their city, reports Auto Remarketing. The new trade group, called the San Francisco Auto Jobs Alliance, aims to preserve the city’s automotive heritage, and promote job creation and economic growth, the group announced on Thursday. Dealers comprising the Alliance represent numerous brands, including Land Rover, Range Rover, Jaguar, Lotus, Lamborghini, Bentley, Volkswagen, Audi, Volvo, Mazda, Honda, Toyota, BMW, Mini, Mercedes, Smart, Hyundai, and Scion. Combined, these franchised dealers in 2011 generated almost $700 million in car sales in San Francisco, and nearly $9 million in sales tax revenue for the city’s general fund, the group noted. They also employ more than 1,500 people. “Simply put, franchise auto dealers are the economic engine that powers Main Street in cities and towns all across America,” said Alliance chairman Andy Hansen, the chief operating officer of Royal Automotive Group. “We contribute to all sectors of the local, regional, and national economy, from employee training and job placement to advertising, real estate, and manufacturing.” Click here for more on an alliance between San Francisco area dealers.

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