Hyundai, Kia Misstate Mileage Claims

First Up 11/02/12

November 2, 2012

Despite Sandy’s Impact, October Auto Sales Continue to Rise
Although Hurricane Sandy stifled auto sales at the end of October, the month was still a successful one for America’s international nameplate dealers, according to AIADA’s Market Watch. Sales for all brands, unadjusted for business days, were up 6.9 percent from October 2011 and 13.8 percent year over year. AutoData Corp. estimated the seasonally adjusted annual rate (SAAR) at 14.29 million units, an improvement over 13.34 million units one year ago. Subaru (up 30.1 percent), Toyota (up 16.8 percent), and Volkswagen (up 22.4 percent) enjoyed the biggest gains from October 2011. Nissan, whose stronghold is in the northeast, saw sales fall 6 percent from October 2011. In response to the storm, Nissan and Infiniti will both offer employee discounts and financing to eligible residents in FEMA disaster areas. Across the board, incentives were down 2.9 percent from September and 5.6 percent from October 2011. “Hurricane Sandy may have put a crimp in sales, but consumer confidence and personal income are both climbing,” said AIADA President Cody Lusk. “That’s good news for auto dealers and the communities they support.” Click here to read the rest of AIADA’s October Market Watch sales report.

Hyundai, Kia Misstate Mileage Claims
Hyundai Motor America and Kia Motors America on Thursday said they overstated estimated fuel economy posted on window stickers of about 900,000 vehicles sold since late 2010. Prompted by an ongoing investigation by the U.S. Environmental Protection Agency, the automakers are lowering the fuel economy estimates on a majority of 2012-13 models after EPA testing found discrepancies between its own results and the company's data. In an interview with The Detroit News, top Hyundai and Kia U.S. executives apologized. They vowed to compensate owners for the misstated mpg claims. "Given the importance of fuel efficiency to all of us, we're extremely sorry about these errors," said Hyundai Motor America President and CEO John Krafcik. "We're going to make this right." Krafcik attributed the problem on "procedural errors" in the company's fuel economy testing. "We've identified the source of the discrepancies between our prior testing method and the EPA's recommended approach," he said. Read Hyundai’s press release on the issue here. Michael Sprague, Kia America's executive vice president for marketing and communications, said the company "really regrets deeply the errors and . . . we sincerely apologize to all our owners." Click here for more on Hyundai and Kia’s mileage claims.

Automakers Donate to Charities, Offer Customers Support in Storm's Wake
Superstorm Sandy has triggered an outpouring of charitable outreach from automakers, reports Automotive News. For example, Toyota Motor Corp. will give $1 million to the American Red Cross and other non-profit groups to aid relief efforts for storm victims in regions that took the heaviest damage, the company said late Wednesday. Beyond its own donation, Toyota will match employee contributions to the American Red Cross and other non-profits assisting impacted cities. Mercedes-Benz U.S.A., which has 83 dealerships in the northeast, also said the same day that it will make a $1 million donation to the American Red Cross. American Honda Motor Co. today pledged to give $500,000 to the American Red Cross Disaster Relief Fund. The Volkswagen of America Foundation, on behalf of the Volkswagen Group of America, said today that it will make an immediate donation of $500,000 to the American Red Cross to provide support for affected areas across the northeast. Nissan North America is offering employee pricing and financing to help people in FEMA-designated disaster and emergency areas replace vehicles that fell victim to Sandy. Click here for the full report on what automakers are doing to help those impacted by Hurricane Sandy.

How Will Hurricane Sandy Impact Auto Sales? It Depends on How the Dealers Did
Rebecca Lindland, Director of Research at IHS Automotive, and a Forbes contributor, shared her take with Forbes writer Dan Bigman on how Sandy will impact auto sales in the weeks ahead. It’s too soon to tell with any precision, she says, but while there will certainly be short-term harm (no one shopped for cars this week), within days you’ll see a lot of people in dealer lots looking for replacement vehicles. And that’s when things will get interesting. Not only were tens of thousands of cars lost in the flooding on the streets, but, she points out, dealers are likely to be hard-hit too, putting a crimp in supply. Appearing on CNBC, Mark Schienberg, president of NY auto dealers association, bore that out, saying the impact was “quite severe” on dealerships in the New York metro area, with 60 percent still closed as a result of the storm. Supplies are a question, too. “Toyota just said they have about 4500 vehicles at the Port in Newark and they don’t know how many are damaged,” she says. Read more of Lindland’s take on how Hurricane Sandy will impact auto sales in the coming weeks here.

BMW Narrows Mercedes' Lead in U.S. Luxury Sales After 21% Oct. Gain
According to Automotive News, BMW's U.S. sales rose 21 percent in October, narrowing the lead of Mercedes-Benz in luxury auto sales this year. Sales for BMW climbed to 26,451 vehicles last month, boosted by a 26 percent gain for its 3 series. Mercedes reported a 5.9 percent increase from a year earlier to 23,978 on Thursday, helped by updated versions of the C class small sedan. Toyota Motor Corp.'s Lexus rose 9.7 percent to 19,850. The October results trimmed Mercedes' ten-month lead to 2,748 vehicles, from 5,221 at the end of September. The two German automakers are vying to be the No. 1 luxury-auto brand in the United States after BMW outsold Lexus last year. Lexus, hurt in 2011 by vehicle shortages following natural disasters in Asia, had been the top-selling luxury brand in the U.S. for 11 years. Mercedes U.S. sales through October rose 12 percent to 215,596, according to the automaker. BMW posted a 6.7 percent increase to 212,848. For all of 2011, BMW outsold Mercedes in the U.S. by 2,715 vehicles. The sales results don't include Daimler's cargo vans and Smart cars and BMW's Mini brand. For more on the race to be number one in luxury auto sales, click here.

Deadline Extended: Nominate a Dealer for AIADA’s Lifetime Achievement Award
Every year, during its Annual Meeting and Luncheon, AIADA honors a highly respected member of the international nameplate auto industry with the David F. Mungenast Sr. Lifetime Achievement Award. The award was created to honor the legacy of Dave Mungenast and recognize some of the truly outstanding leaders in our industry who possess an unparalleled work ethic and a commitment to their families and communities. Recognizing members of our industry who reflect the values and commitment that Dave exemplified is the best way we have to honor his memory. If you know someone in the international auto industry like Dave, AIADA wants to know!  Due to Hurricane Sandy, AIADA has extended the deadline for nominations, which are due by the close of business on Monday, November 5. Please take the time to read more about the award and nominate a distinguished member of our industry by clicking here.The 2013 recipient of the David F. Mungenast Lifetime Achievement Award will be honored at AIADA’s 43rd Annual Meeting and Luncheon on February 11, 2013 in Orlando, Florida. If you’re not already registered, click here to do so.

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