Jan. 14, 2019
Ghosn's Japanese Crisis Spreads to America
The widening Carlos Ghosn crisis has reached U.S. shores. Automotive News reports that part of Nissan's investigation into the scandal, which has led to Ghosn's arrest and removal as chairman, focuses on how some U.S. franchises were awarded. Under review is a California group run by an associate of the Saudi businessman at the center of breach-of-trust allegations against Ghosn. Meanwhile, one of the ousted Nissan chairman's closest allies and one of the automaker's most powerful executives, Jose Munoz, quit his job as chief performance officer late last week after having been given a leave of absence. Munoz's sudden sidelining had many U.S. dealers worried about Nissan's retail strategy. The company is fine-tuning an overhaul of his often-controversial U.S. dealer incentive programs. "It's a tremendous loss to the dealer body," said Ray Brandt, Nissan National Dealer Advisory Board member and CEO of Ray Brandt Auto Group in Harvey, La. "I am very concerned." For more on the investigation into the awarding of Nissan franchises and the leadership shuffle, click here.
Genesis G70, Ram 1500, Hyundai Kona win NACTOY awards
Ram won the Detroit truck wars to take the North American Truck of the Year Monday, but Korea's Hyundai dominated the car and SUV awards. The Detroit News reports that the prestigious North American Car, Truck, and Utility of the Year awards kicked off the Detroit Auto Show at Cobo Hall. Genesis, Hyundai's young luxury arm, won for car with its compact G70 sedan. Then the parent brand followed with SUV of the Year for the Hyundai Kona. The Ram 1500 held off the General Motors siblings, the Chevy Silverado and GMC Sierra, to take truck honors. "Consumers are seeing the same thing this jury saw in the Ram truck,” said RAM chief Reid Bigland. “In the last three months sales were up 20 percent and in the last month sales were up a whopping 47 percent.” The Genesis G70 beat out the Honda Insight and Volvo S90. The Hyundai Kona compact SUV bested the Jaguar I-Pace and Acura RDX. Click here for a slideshow of the winners, and their competition.
The Next American Car Recession Has Already Started
American automakers are closing factories, cutting shifts and laying off thousands of workers. According to Bloomberg, the industry is behaving like a recession has arrived. In one segment of the market, it has. Detroit is in the grips of a car recession marked by the collapse of demand for traditional sedans, which accounted for half the market just six years ago. Familiar sedan models such as the Honda Accord and the Ford Fusion made up a record low 30 percent of U.S. sales in 2018, and things will only get worse. “You could classify this as a car recession,” said Jeff Schuster, senior vice president of forecasting at LMC Automotive. Outside Detroit, auto executives are sticking with sedans. Between the U.S., Canada, Mexico and Puerto Rico, Toyota sells 375,000 of its Corolla compacts each year. The Camry sedan likewise moves in big, albeit shrinking, numbers. “We are not going to get out of that business,” Jim Lentz, chief executive officer of Toyota Motor North America, said in an interview last month. “We still see an opportunity there.” For the full story, click here.
Losers and a Few Winners: Here’s the Cars That Bucked the Trend in 2018
While the industry coasted to a surprising, yet slight, year-over-year volume increase in 2018, automakers can’t thank America’s desire for traditional passenger cars for eking out a win. The Truth About Cars reports that light trucks carried the day, with car sales plunging to new lows. Industry-wide, U.S. car sales sank 13.1 percent in 2018, pushing their share of the market to just over 31 percent. Within this soup of sales, a handful of conventional passenger cars exist that held their ground, straining mightily against gale force headwinds. They include the Toyota Avalon whose controversial makeover, which saw the addition of perhaps the largest car grille of the 21st century, helped the Avalon post a YoY December sales gain of 4.6 percent and a full-year gain of 3.1 percent. Click here to see it. The BMW 5 Series proved that dignified, sporting, midsize luxury was not a disappearing trait at BMW last year. The brand’s 5 Series earned itself an 8.1 percent sales increase in 2018. For more cars that bucked 2018 sales trends, click here.
AutoNation Looks Outside for Next CEO
AutoNation Inc. will pluck a new CEO from outside its own ranks, giving the nation's largest new-vehicle retailer a fresh face at the top for the first time since Mike Jackson joined the company 20 years ago. Jackson, who announced in September that he'd step down as CEO this year, told Automotive News last week that AutoNation will go with an outside candidate for his replacement. That person will be named in the next two to three months, though the next chief executive will start at a later date, said Jackson, who will move to a new role as executive chairman once his replacement is in place. The new CEO will guide a leaner organization in the wake of a $50 million cost-cutting and restructuring plan announced last week that includes the departures of four high-level executives, including COO Lance Iserman, and the consolidation of AutoNation's three regions into two. The reason for the restructuring is twofold: worries about tougher business conditions in 2019 and the determination that AutoNation's next CEO would not come from within. For more on what’s next for AutoNation, click here.
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