10 Things to Watch For in the 2013 Car Business

First Up 01/03/13

January 3, 2013

Subaru to Hike U.S. Production Capacity by 30%
Fuji Heavy Industries Ltd.'s Subaru brand will increase production capacity at a U.S. plant by about 30 percent by fiscal 2016, the Nikkei business daily said. The company will invest about 20 billion yen ($230 million) in Subaru of Indiana Automotive Inc, its only overseas vehicle assembly plant. Fuji Heavy plans to raise its production capacity by 30,000 vehicles by 2014, the paper said. According to Automotive News, the facility can currently produce about 170,000 units of Subaru models as well as 100,000 Camry cars for Toyota Motor Corp. Fuji Heavy sold nearly 330,000 vehicles in the United States last year but had to ship half of them from Japan. The strong yen has undermined the profitability of many models assembled in Japan and exported, prompting Nissan, Mazda, and others to shift output overseas. Fuji Heavy's expectation of a jump in North American demand for its Subaru Impreza model prompted the increase in production, the Nikkei said. The company said in 2011 that it would increase global sales to 1 million vehicles in ten years. For more on Subaru’s ramped-up production plans, click here.

Toyota Matures its Scion Youth Brand
Like the twenty-something who graduates to cabernet from six-packs and comes to appreciate creased slacks instead of ratty jeans, Toyota is taking the same approach with its youth sub-brand. Scion was Toyota's iconoclast for almost a decade, a grand effort to reach Generation Y as if they are an entirely new kind of customer. The lineup stressed personalization and quirkiness to set itself apart from the cars that everyone else drove. But Toyota's once-highflying division is facing lackluster sales. To fight back, the company is aiming Scion's marketing toward a slightly more mature shopper. To recharge the brand, Toyota appointed Doug Murtha, 47, a veteran product planner to head Scion. Murtha downplays the decision to recast the marketing to focus on an older customer, telling USA Today “We still are a youth brand" that seeks 18- to 34-year-old buyers. The goal is to "recast the image of our buyer," which means "notching up from young 20s to mid-20s." The age difference might not sound like much, but a slightly older buyer is more likely to have graduated college, hold a job, and qualify more easily for credit. For more on the future of Scion, click here.

10 Things to Watch For in the 2013 Car Business
As we begin a new year, Forbes has identified 10 of the stories they think will dominate the auto industry in 2013. They include everything from Toyota’s next move to Honda’s new Accord. One of the biggest stories involves the battle for luxury market domination. Mercedes-Benz is in a dog fight with BMW and Audi for world leadership in the luxury market. It's betting on a raft of small vehicles, including the C-Class, which will be produced at its plant in Vance, Alabama. But a recent survey estimated that BMW's market capitalization is twice that of Mercedes, if Daimler's heavy truck business is set aside. Can Daimler CEO Dieter Zetsche build value for the Stuttgart-based brand? Another topic auto analysts are focusing on: China. China is now a bigger car market than the United States and a place where the world's carmakers are pouring billions of dollars. But China's market may be getting oversaturated. And political conflict between China and Japan has caused Japanese carmakers to rethink their investments. How will things in China play out for the country, the carmakers and consumers? Click here for a slideshow of all ten automotive things to watch for in 2013.

VW to Woo U.S. Car Buyers with New Design Language, Detailed Precision
Expect more emotional design language from Volkswagen as it looks to win over more U.S. consumers and increase its worldwide sales tally, its chief designer says. According to Wards, the German auto maker has not been shy about its goal to deliver 800,000 vehicles in the U.S. in 2018, but to do that it has had to tweak some of its European-styled cars to meet American tastes. This meant refreshing the Jetta and Passat sedans with a “one-size-fits-all” approach, chief designer Klaus Bischoff told reporters. It took the two restyled sedans to capture U.S. buyers’ attention, and similar changes have been migrating to other VW products. The Beetle, long criticized for its too-round styling, already has received a more aggressive makeover, and the next-generation Golf and GTI compact cars also will reflect the auto maker’s new design language, Bischoff says. However, the designer is most looking forward to VW’s future hybrid products, which he says will buck the traditional bland designs seen on today’s electrified vehicles. “We’ll be very elegant,” Bischoff says, not revealing too much about VW’s hybrid and EV design strategy. For the full story, click here.

U.S. Rising as Production Base for Honda, Other Foreign Carmakers
On Dec. 5 Honda President Takanobu Ito congratulated Marysville, Ohio plant workers who had just produced the 1 millionth Honda built in the United States for export. "Quality for the world, made in America, has been an important Honda commitment," Ito said, adding he hoped exports from the U.S. would keep rising. The Tokyo-based automaker expects to reach an even bigger milestone in a couple of years, when its vehicle exports from North America — now numbering close to 100,000 a year — are expected to exceed its imports from Japan. According to the Detroit News, the shift underscores the importance of the U.S. not just as a massive market, but as an increasingly important and affordable production base for Honda and other Japanese automakers. The dollar's relative weakness against many currencies in recent years has attracted foreign manufacturers, as has the rising quality of American workmanship. Germany's BMW is a major exporter from the U.S., shipping out just more than 160,000 vehicles, or more than two-thirds of the SUVs assembled at its Spartanburg, S.C., plant to China and other markets. Toyota Motor Corp. also exports U.S.-built vehicles to markets outside North America, and it is considering exporting components from the U.S., too. To read more, click here.

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