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August Auto Sales Defying Gloom-and-Doom Forecasts

Japanese makers still struggling through product shortages.

by on Aug.31, 2011

GM products like the Chevy Cruze continued to post sales gains in August.

Despite the roller-coaster ride on Wall Street, sales of new vehicles remained steady during August with Detroit makers collectively experiencing an increase in demand, according to new estimates of current sales trends.

If there was any drag on the U.S. new car market for August it was the result of the ongoing product shortage faced by some of the key Japanese makers due to the March 11 Japanese tsunami and earthquake.

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Both Edmunds and, two Internet sites that collect and analyze car and trucks sales data, indicated August sales will be up 8% over year-earlier totals — and also up slightly from July — despite the turmoil in the stock market.  That echoes other recent reports that suggest that despite concerns about a possible double-dip recession consumers have been slowly loosening their pocketbook strings.

The sales projections, however, were made before Hurricane Irene hammered the East Coast on what is usually a busy weekend for sales, so the final numbers that are due out later this week could be weaker than initial projections.

Detroit’s automakers — General Motors, Ford and Chrysler — are all expected to post double-digit, year-over-years sales increases, but only GM and Chrysler will see month-over-month sales increases in August from July.

“Auto sales stayed on a relatively flat road this month, even as the stock market took a roller coaster ride,” said Lacey Plache, Edmunds chief economist.

“Stronger buying conditions are telling consumers to go ahead and make their car purchases, but a weak economic landscape is telling them to wait until later this year, or even longer. This is the battle that will determine exactly how much the auto industry will grow this year,” she said.

Plache said Edmunds also projects Toyota has done little in August to build on its momentum from July, when it gained a modest 1% in sales — with August expected to bring a decrease of 0.2 percentage points in market share over the same period. Toyota’s August sales are expected to be down 14.4% compared with last year.

Even with lingering inventory issues still to sort out, Honda will likely show some month-over-month sales gains this month. projects that Honda’s August sales will grow 5.4% over July, with a market share gain of 0.2 percentage points. Compared to last year, however, August sales are still expected to be off about 25%.

“We fully expect August will be the worst month of the year in terms of the inventory situation” caused by the March disaster, said Mike Accavitti, Honda of America’s new marketing chief.  “The good news is that our plants are back up in full production and product is now on its way to dealers,” which could bode for a better performance in September. forecasts that Ford will be the only major automaker this month to report a decline in sales from July to August. Ford’s sales are expected to be down 0.5% from July, leading to a market share loss of 0.5 points.

“The auto industry is a mixed bag this year, due to economic uncertainty; sales have improved compared to last year, but nowhere near the potential we had expected,” said Jesse Toprak, VP of Industry Trends and Insights for

“The strongest correlation to new car sales is the Dow Jones Industrial Average and it was shaky and nervous in August,” Toprak said.

For August 2011, new light vehicle sales in the United States are expected to be 1.077 million units, up 8% from August 2010 and 2% from July 2011.

The August 2011 forecast translates into a Seasonally Adjusted Annualized Rate, or SAAR, of 12.2 million new car sales, flat from 12.2 million in July 2011 and up from 11.5 million in August 2010, according to Edmunds.

Retail sales are up 4.9% compared to August 2010 and fleet and rental sales are expected to make up 20% of total industry sales in August 2011.

The industry average incentive spending per unit will be approximately $2,663 in August 2011, which represents an increase of 3%, Edmunds predicted.

Toyota Officially Recalls 430,000 Prius Hybrids – but Do More Problems Exist?

TheDetroitBureau’s exclusive report cautions earlier Prius model-years may also have brake problems.

by on Feb.09, 2010

Prius under the microscope: 2010 models recalled, but could braking problems plague earlier models?

Admitting his company is not “infallable,” Toyota President Akio Toyoda today announced the recall of 430,000 Prius hybrids worldwide, saying it is time for the embattled automaker to “face up to the facts” and deal with its safety problems.

The recall involves not only the latest, 2010 Prius but also another dedicated hybrid, the new Lexus HS250h.  About 127,500 vehicles are being called back in the U.S., while another 53,000 are involved in Europe.  The vast bulk of the recall affects hybrids sold in Japan, where the Prius is not just the best-selling gasoline-electric model but the top seller among all vehicles sold in Toyota’s home market.

“I don’t see Toyota as an infallible company that never makes mistakes,” said a chastened President and CEO Akio Toyoda, during a Tokyo press conference today. “We will face up to the facts and correct the problem, putting customers’ safety and convenience first.”

But even as Toyota steps up with a recall for the third-generation Prius model, which it launched last spring – addressing a problem first reported on December 24, 2009 – this magazine finds there could be further brake issues with Toyota’s most popular hybrid not covered by the new service action. Click Here for the complete story.

(Prius owners with complaints should report them to the NHTSA Vehicle Safety Hotline at 1-888-327-4236 or, and Toyota at 800-331-433. Have your VIN number in front of you when you call. )

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An investigative report uncovered a sizable number of complaints to federal regulators that involve Prius vehicles sold prior to the 2010 model-year.  It is yet unclear precisely how serious the potential issue is, or how extensive, but a number of owners tell they experience the same sort of momentary brake loss Toyota now plans to correct on the 2010 hybrids.


“Breakthrough” Needed for Battery Cars

Study finds electric vehicles likely to remain niche through at least 2020.

by on Jan.07, 2010

The cost of the batteries in this prototype Volvo C30 would have to plunge from $20,000 to barely $5,000 to make the battery-electric vehicle competitive, warns a new study.

Without a battery breakthrough, electric vehicles are likely to remain little more than a niche segment in the global automotive market, according to a new study that also sees little likelihood this can happen during the coming decade.

Battery costs are coming down, according to a study by the Boston Consulting Group, but not nearly fast enough to make electric vehicles and plug-ins competitive with the time-tested internal combustion engine, or ICE, the report found.

“We need to have breakthroughs in fundamental battery chemistry,” declared Xavier Mosquet, leader of Boston Consulting’s automotive practice, during an appearance at the Automotive Press Association, on Thursday.

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That’s not to say batteries aren’t improving.  They’re getting smaller, lighter and more powerful.  And BCG’s study predicts that the cost of a typical lithium-ion battery will drop from more than $1,000 a kilowatt-hour today to somewhere around $400 by 2020.  But Mosquet stressed that to be competitive, prices need to fall even further, to “somewhere in the $200 to $250 range” per kWh.