How Honda Survived a Trade War with the U.S. and Won Over Americans
In 1979, 22-year-old Neil Vining spotted a job advertisement that took him by surprise. Japanese automaker Honda was hiring American workers for its first plant on U.S. soil. "It was a bit of shock that Honda decided to come to Ohio," says Vining, now a chief engineer at Honda's Marysville auto plant. Today, reports CNN, Honda, Nissan, Toyota, and Subaru all operate manufacturing plants across the United States, with Toyota and Mazda planning a new $1.6 billion auto assembly plant in Alabama that will employ around 4,000 people when it opens in 2021. Last year, Japanese carmakers created 1.6 million jobs in the U.S., according to the Japan Automobile Manufacturers Association. Since setting up shop in the United States, Honda has crossed many milestones. It produced its 25 millionth US-made car in 2018, and employs more than 31,000 people in the United States to make products that include cars, trucks, vans, SUVs, motorcycles, lawn mowers, and even robots. Read more here.
Morrie's Hires Former AutoNation Exec Iserman as CEO
According to Automotive News, Lance Iserman, former COO of retailing giant AutoNation Inc., has been named CEO of Morrie's Automotive Group, a dealership group headquartered in Minnetonka, Minn. Iserman, 54, will take the top spot at Morrie's on Monday. He replaces interim CEO Ken Czubay, a former Ford Motor Co. executive, who will remain a board adviser to Morrie's. Czubay, 70, took over for former Morrie's CEO Karl Schmidt this year, according to local media reports. Morrie's is majority owned by the Fremont Group, a private investment firm, which bought its stake in the dealership group in 2016 from longtime dealer Morrie Wagener. Alan Dachs, CEO of Fremont Group, said a nationwide search was conducted over the last few months. Read more here.
Edmunds Warns of a Tough 2019 for U.S. Auto Industry
U.S. auto sales are estimated to have fallen by about 2% during the first half of the year, setting the industry up for its second year-over-year decline since it emerged from the Great Recession nearly a decade ago, two new studies warn. CNBC reports that how much deeper the downturn will go is a matter of debate, as is the timing of a market recovery, according to researchers from both the AlixPartners consultancy and auto data firm Edmunds. But even the modest decline predicted over the next three or so years, the studies agree, will strain the resources of automakers who have seen costs rising, even as sales and revenues slow. “Automakers are fighting a war on multiple fronts right now,” said Jeremy Acevedo, manager of industry analysis for Edmunds, which released its midyear forecast Wednesday. Read more here.
Auto Industry Fleet Sales Get New-Found Respect
“Fleet” no longer is a dirty word, according to WardsAuto. In the past, the auto industry deemed fleet sales as second-class citizens compared with individual retail deliveries carrying higher profits. For automakers then, high fleet numbers were seen as signs of weakness and near-desperate ways to prop up sales and dispose of bloated inventories through volume discounts. Although overreliance on fleet business remains questionable, it is gaining respect. And market share. “Bad fleet is less bad today,” says Michelle Krebs, a Cox Automotive senior industry analyst. Of 17.2 million light vehicles sold in the U.S. last year, fleet units were up 4.3%. In contrast, new-vehicle retail sales and leases fell 0.4% and 0.2%, respectively, according to Cox. “Fleet is the new normal,” Jonathan Smoke, Cox’s chief economist, says at the company’s annual midyear review here. “It keeps on growing.” Read more here.
Average Age of Vehicles on U.S. Roads Hits 11.8 Years
The average age of light vehicles in operation in the U.S. has risen again as consumers continue to hold onto cars and light trucks longer, reports Automotive News. Driven by technology and quality gains, the average age of light vehicles on U.S. roads is 11.8 years, based on a snapshot of vehicles in operation Jan. 1, an analysis by IHS Markit found. That's up from a light-vehicle population that was, on average, 11.7 years old in 2018. The number of registered light vehicles in operation in the U.S. hit a record of more than 278 million this year, an increase of more than 5.9 million, or 2.2 percent. IHS Markit began tracking the age of vehicles in 2002, when the average age was 9.6 years. "The average age of a vehicle has continued to grow ever since cars started coming out from Henry Ford's production line, if you will," said Mark Seng, director of the global automotive aftermarket practice at IHS Markit. "People are hanging onto them longer because they're lasting longer." Read more here.
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