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Archive for May, 2011

Fewer Car Buyers Late on Loans

by on May.31, 2011

Lenders lossen credit, but delinquencies and defaults still decline, reports TransUnion.

Whether it’s a sign of an improved economy may be unclear, but the number of consumers late in paying their car loans has fallen to the lowest level since 1999, and is nearing an all-time low.

The number of car buyers 60 days or more behind in their payments has plunged to just 0.49%, or less than one in 200, nearing the lowest figure ever recorded by credit reporting agency TransUnion.  By comparison, the figure stood at 0.66% during the first quarter of 2010.

Meanwhile, the number of auto loans started during the first quarter of 2011 increased by 22%, tracking with the overall increase in U.S. new car sales this year.

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The agency reported that the highest number of auto delinquencies for the quarter were in Mississippi, Louisiana and Oklahoma, while the lowest were found in Montana, Washington, D.C. and Wyoming.

Low interest rates – often subsidized by manufacturers hoping to spur demand may be a factor in current loan trends.  Other factors TransUnion cited include a stronger automotive market and higher consumer confidence.

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Delphi Files for IPO

Once-bankrupt supplier hoping to raise millions, possibly billions, through stock offering.

by on May.31, 2011

Delphi CEO Rodney O'Neal prepares to take the supplier public again.

Delphi Corp., which endured the longest corporate bankruptcy in U.S. history, has filed with the Securities Exchange Commission asking for permission to sell shares through an initial public offering that plays up the company’s potential for growth in China and other overseas markets.

Delphi filed for bankruptcy in 2005 in a bid to scrap what it described as an unsustainable business model that included a heavy reliance on its former parent, General Motors, and a large manufacturing base in the United States. The bankruptcy wiped up Delphi’s old shareholders and left the company’s salaried pension fund in the hands of the Pension Benefit Guarantee Corp.

The Troy-based automotive supplier spent four years under Chapter 11 protection before emerging from bankruptcy in October 2009 with a much smaller manufacturing presence in the U.S. and a focus on supplying high-tech componentry, including safety equipment, fuel-management and electronics.

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The new Delphi is now counting on growth in the automotive market in the next few years to impress would be investors.

Global vehicle production is forecast to grow at a compound annual growth rate of 6.8% from 2010 to 2015. In the near-term, the mature markets, including North America and Western Europe, are expected to grow at 3.3%, from 2010 to 2015, for an increase of approximately 6.9 million units, while the emerging markets are forecast to grow at 10.3%, during the same period, for an increase of approximately 22.2 million units.

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First Drive: Infiniti G37xs

Changing perceptions, one car at a time.

by on May.31, 2011

Infiniti's G37xs takes on some tough competition.

When one thinks of sporty premium mid-size sedan, BMW’s 3-Series likely hops immediately to mind. Well, Infiniti has been trying to change that perception for years with the G35–now G37–and after a stint behind the wheel, one could make the case that Infiniti has succeeded.

See, the problem with the 3-Series is that while it offers almost near-perfection, it gets expensive with options. Not so our fairly loaded 2011 Infiniti G37 test car, which checked in at $44,875. Not exactly bargain basement, but a fair value in this class.

Our all-wheel drive G37xs Limited Edition sedan came with the 328-horsepower 3.7-liter V-6 mated to a seven-speed automatic transmission. It also boasted a lengthy list of options that could take up half a review on its own.

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That money buys you a pretty competent commuter that has some serious guts. Step on the gas and the G comes alive, launching forward in a manner that’s all business. The V-6 snarls a sinister tune as the G hunkers down, with the promise of swift returns on the investment made by your right foot. The only thing holding the car back is the weight of the all-wheel drive system. While AWD might be appreciated in the snow belt, the added weight does acceleration no favors, even if the additional traction helps keep the car planted.

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Ford Raises Prices – Again

Consumers getting socked this spring.

by on May.31, 2011

Ford has now raised prices on products like the new Explorer three times since January.

It’s a tough spring for U.S. car buyers.  Not only are many popular models in short supply but prices are heading up – fast.

The latest maker to bump up sticker prices is Ford, which says it will tack another $124, or 0.4%, onto the sticker of its average model.  That might not cause much pain were it not for the fact that it’s the third time since January Ford has raised prices, its average vehicle now costing $375, or 1.3%, more than at the end of 2010.

Ford officials point the finger at steel, rubber and other commodities, where costs have risen sharply in recent months.

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Most major makers have been raising prices this year, in part due to commodity price hikes but also because the industry is finally trying to regain some pricing momentum after several years of painful restraint.  Manufacturers were loath to risk angering consumers during one of the worst sales downturns since the Great Depression.

“This time, the price hikes are likely to stick,” said Rod Lache, analyst with Deutsche Bank.

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Fiat Planning to Buy Remaining U.S., Canadian Shares in Chrysler

Italian maker will push well past 50% stake.

by on May.31, 2011

CEO Sergio Marchionne wants to buys the Chrysler shares now held by the U.S. and Canadian governments.

Fiat intends to buy the remaining shares in Chrysler now held by both the U.S. and Canadian governments, said Sergio Marchionne, CEO of both the American and Italian automakers.

The announcement followed a discussion with Canadian officials and came just days after Chrysler finished paying back $7.5 billion in government loans it received during its 2009 bailout.  By refinancing those loans, Fiat was already able to boost its stake in the American automaker to 46%.

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The Canadian and Ontario governments took a 1.7% stake in Chrysler in return for their help.  The U.S., meanwhile, currently holds a 6.6% stake in the carmaker.  The White House has long indicated its desire to get out of the automotive business and is expected to sell off its holdings as soon as practical.  Canadian officials, however, stressed that they want to see how things go with the American sale before deciding whether to also accept Fiat’s offer.

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Nissan Americas’ Tavares Named New Renault COO in Wake of Spy Scandal

Renault’s gain could be Nissan’s loss.

by on May.31, 2011

Nissan Americas CEO Carlos Tavares - shown here with the Leaf battery car - will become Renault's new COO.

Carlos Tavares, the chief executive of Nissan Americas, will be heading across the Atlantic to serve as the new chief operating officer of the Japanese maker’s French affiliate, Renault.

The new assignment comes as Renault struggles to shake off the scandal that followed the firing of three senior executives falsely accused of spying for the Chinese.  That brouhaha led to a shake-up of Renault’s top management, including the ouster of COO Patrick Pelata.

The decision to move Tavares back to France has been widely expected, TheDetroitBureau.com first reporting on it more than six weeks ago.  It’s a homecoming of sorts, Tavares having spent 23 years with the French carmaker before being assigned to the U.S. in 2004.

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The move comes at a critical time for Renault, which had been struggling to regain traction in the European market – and grow its overseas base, especially in China – even before the espionage scandal.  The loss of Pelata threatened to leave a significant void in the carmaker’s senior ranks as the former COO was considered a close confidant and ally to Carlos Ghosn, who serves as chief executive officer for both Renault and Nissan.

In a statement, Ghosn described Taveres’ appointment as “a first step in strengthening Renault’s management.” But his reassignment could be “a significant loss” for Nissan Americas, cautions Deutsche Bank’s Kurt Sanger.

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Toyota’s U.S. Plants Down for a Week

Production of new Honda Civic won’t recover until “sometime” in autumn.

by on May.27, 2011

The 2012 Honda Civic will remain in short supply until at least the coming autumn.

Toyota’s entire U.S. production network will be sitting idle next week, the maker deciding to stretch out the normal Memorial Day holiday break because of ongoing shortages of Japanese-made parts.

Honda, meanwhile, says that while its global factory network appears to be recovering faster than it first anticipated it will be facing more problems getting production up to speed for the new 2012 Civic model, which is likely not to reach normal volumes until “sometime” in autumn.

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A new report underscores the magnitude of the crisis touched off by Japan’s March 11 earthquake and tsunami.  In Japan, Toyota production was off by 74.5% for all of April, while its global production declined 48%.

The disaster had only marginal impact on automotive assembly plants but 100s of supplier facilities were damaged or destroyed.  Others have been struggling under the rolling blackouts implemented after the quake touched off a triple meltdown at the Fukushima nuclear plant.

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Marty’s Marketing Minutia: Taking Gas

Memorial Day special edition.

by on May.27, 2011

Nissan's new ad campaign examines a world where everything is powered by gas.

Nissan Leaf ad asks what would happen if everything used gas

Have you filled the tank of your new Nissan Leaf?  Excuse me? Nissan’s new Leaf campaign takes a tongue-in-cheek look at what would happen if everything in our daily lives used gasoline and the problems that would cause. This somewhat different approach comes from the brand’s creative manifesto which, in part asks, “What if everything ran on gas? No electricity. No renewables. Just gas.” Like your alarm clock and your dentist’s drill’

But everything doesn’t run on gas,” the series points out. “Most things run on electricity, which is clan, and quiet and uses fewer parts, and needs less maintenance. Most things can be plugged in and charged up and don’t need a tank or a pump.”

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And the payoff is of course the all-electric Leaf.  When questioned about this approach, Jon Brancheau, Nissan’s vice president of marketing commented, “By using humor and asking the simple question, ‘what if everything ran on gas’ we’re able to rationally make the case that electric cars’ time has arrived.”

The campaign is a full multimedia push using television, online, print and direct marketing to convey the message. And the campaign, which breaks Monday, Memorial Day, takes every day products and situations and injects gas-powered-humor to sell the Leaf with these four :15-second teaser commercials: (more…)

Small Cars Overcoming Safety Concerns

Many new models commanding highest ratings in crash tests.

by on May.27, 2011

A Ford Focus in the IIHS side impact crash test.

When Ellen Pierson’s daughter was ready to get her license, the suburban New York mother of three fretted about what to let the high school student drive.  “It had to be as safe as possible,” Pierson says, “so I began thinking something in a big SUV.”

Her daughter Lynn, on the other hand, wanted something hipper and, like many of today’s young drivers, something that was more environmentally friendly.  She was eying a Ford Fiesta.  Almost small enough to fit in the back of some of the big SUVs, mother Pierson was aghast – until she checked the crash tests and realized that the Fiesta was ranked right up there with some much bigger vehicles.

Told to chip in with some of the money she had earned over several summer vacations, Lynn got the car of her young dreams.

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Ellen Pierson isn’t the only one surprised by what she has discovered about today’s new crop of small cars.  Indeed, the Insurance Institute for Highway Safety has announced that six of the 13 compact vehicles it recently tested earned the industry-funded groups “Top Safety Pick.”  None landed in the “poor” category in any of the four crash tests each vehicle is subjected to.  The latest to earn the top ranking were the Ford Focus, Honda Civic, Hyundai Elantra, Nissan Juke, Toyota Prius and Lexus CT200h.

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Saab Resumes Production

Deal with Pang Da moves forward.

by on May.27, 2011

Saab 9-5s rolling off the Trollhattan line.

For the first time since April 4, cars are rolling off the Saab assembly line in Trollhattan, Sweden, marking a turning point in a financial crisis that came close to crushing the struggling maker.

Operations at the maker’s headquarters plant came to a halt when suppliers launched a boycott over unpaid bills.  With sales running short of expectations, the maker was forced to seek additional sources of short-term funding, but several initial proposals – including a deal with Chinese automaker Hawtai — fell through, raising questions about Saab’s viability.

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But, earlier this month, the Swedish maker lined up an alternate deal with the major Chinese dealership chain, Pang Da.  The preliminary agreement is moving ahead and Saab was able to reach an agreement with its vendors to once again begin stocking its Trollhattan plant.

“This is a great day for our company and it is great to see the plant running again. We have gone through a rough patch in recent weeks, but Saab is back in action again,” said Victor Muller, chairman of Saab and the head of the Dutch-based company that acquired the Swedish firm from General Motors in February 2010.

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