Luxury, Small Cars Take Charge at L.A. Auto Show

First Up 11/27/12

November 27, 2012

Luxury, Small Cars Take Charge at L.A. Auto Show
California is king when it comes to small cars, and this year's Los Angeles Auto Show will reinforce that title. Automakers will debut nearly 50 vehicles, including 24 world debuts, at this week's show. Most are small, fuel-sipping cars, with many hybrids and electrics. But luxury vehicles will make a strong showing, too. The show, which is open to the public beginning Friday and runs until Dec. 9 at the Los Angeles Convention Center, will showcase a variety of new luxury vehicles as that segment tightens and becomes increasingly competitive. High-end vehicle debuts include the 2014 Porsche Cayman sports car and Mercedes-Benz SLS AMG Black Series. "It's actually a good mixture with a bit of emphasis on the luxury segment," said Jesse Toprak, auto analyst at "We're seeing a lot of luxury automakers coming out with force this time around." Other debuts include the world debuts of Volkswagen AG's Beetle convertible; Kia of America's Forte sedan; and Honda Motor Co.'s Accord plug-in. Honda will also introduce a refreshed Civic compact car, according to The Detroit News. Click here to read more about the vehicle debuts at the Los Angeles Auto Show.

Honda CEO Aims to Boost Exports from U.S.
According to The Wall Street Journal, Honda Motor Co.'s chief executive said his company wants to ramp up vehicle exports from the U.S., part of a broader shift of development and production away from Japan to escape the effects of the strong yen. "Our U.S. plants export just 6 percent to 7 percent of production. But they should be able to do more than that," CEO Takanobu Ito said in an interview Monday. "If there's enough demand from other regions for larger vehicles, then closer to 20 percent is conceivable." As it battles persistent yen strength – which raises the price of exports from Japan and erodes repatriated profits – Honda is also retooling domestic operations to focus on the ever-smaller cars sought by Japanese buyers. This bifurcated strategy has been a hallmark of Mr. Ito's approach since he took over as president and chief executive in 2009. As part of the shift, the company is relocating engineering responsibilities for its next-generation Civic compact sedan to the U.S. It is considering doing the same for its full-size Accord, Mr. Ito said. Click here for more on Honda’s strategy to increase U.S. exports. Hyundai, Kia May be Losing Buyers Over MPG
Buyer interest in new Hyundai and Kia vehicles may be softening following the South Korean automaker's admission that it inflated its gas mileage on several models, says According to USA Today, the finding is based on what it considers to be people logging onto the site with "purchase intent" for specific models in the past three months. It says purchase intent is "a metric for measuring a model's share of consumer demand." Of 23 Hyundai and Kia models and variants, only three, Hyundai's premium Equus, Genesis sedan and coupe, showed an increase in buyer purchase intent from Sept. 2 to Nov. 18. All the others took a hit to varying degrees. For instance, Hyundai's popular compact sedan, the Elantra, saw its intent fall from 8 percent to 6.3 percent, according to the data provided to USA TODAY. Kia's popular Soul hatchback, which saw the biggest gas mileage reduction of any Hyundai or Kia model with up to 4 miles per gallon in combined city and highway driving, had buyer interest drop from 9.4 percent to 7.3 percent. Read about consumer response to Hyundai and Kia’s misstatement regarding its vehicle mileage claims here.

Japanese Brands Rush to Add North American Plants
Japanese automakers are building new North American assembly plants at a breakneck pace to regain lost U.S. market share and reduce their dependence on a homeland that's become prohibitively costly. Japan's dwindling work force and seemingly endless recession provide more reasons for automakers to move work offshore, reports The Detroit Free Press. "Five years ago, nobody expected this kind of manufacturing shift to North America," said Haig Stoddard, WardsAuto analyst. "Replacement of Japanese imports with North American production is the main driver." Hundreds of thousands more Japanese-brand vehicles will be built in North America by 2014. German automakers are also expanding in the U.S. and Mexico. Click here for a list of vehicles that will soon be built in the U.S. WardsAuto forecasts at least 10 vehicles imported from overseas will go into production in North America by 2016. Several more all-new models will add to the production boom. For Americans, the likely results are greater competition here as U.S. sales rise and Europe and Japan stagnate and higher exports to the rest of the world from Japanese-owned plants in the U.S., Canada, and Mexico. For more on expanding North American production, click here
CNW Predicts 'Roaring' Used Sales Rebound for Franchised & Independent Dealers
CNW Research said Superstorm Sandy pulled about 250,000 used sales out of the market in October, but many of those buyers have come “roaring” back this month. According to Auto Remarketing, analysts project this month’s used sales figure to come in at 3.04 million, which would represent a 17.6-percent jump from November of last year. The prediction is coming with a bright forecast for dealers, as CNW thinks used sales will climb 39 percent at franchised dealerships while inventory turns will spike 41 percent at independent stores. CNW also spotted another positive development that could push used sales, what it’s calling the emotional buyer. President Art Spinella described this individual as “someone who purchases a used vehicle because they’ve ‘always wanted one.’” During the depths of the recession, CNW noticed fewer than 3 percent of used-car buyers fit into this category. The most recent data shows more than 7 percent of used-car shoppers are looking for that “special” used model. “Simultaneously, the share of used-car buyers who say they are replacing a vehicle that is no longer reliable is increasing,” Spinella said. Click here to read more about what is driving this month’s used auto market.

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