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Auto Industry Likely to End Year with Strong Sales

Preliminary signs suggest year-end buying surge.

by on Dec.23, 2011

Christmas shoppers will put plenty of cars under the tree this year.

The auto industry has been doing much of the heavy lifting, in recent months, helping fuel a late-2011 surge in the economy and it looks like the car market’s recovery from its worst downturn since the Great Depression is continuing into the year-end holidays.

In fact, December is on track to be the strongest month of the year, an unusual development as American consumers typically focus their spending on smaller presents they can pile up under the tree.

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But if preliminary reports hold true for the month as a whole, December could see retail U.S. car sales surge past the 1 million mark for the first time since the 2009 Cash for Clunkers program, according to J.D. Power and Associates.

“The industry has managed through another series of external shocks and is in a healthier position as the year closes,” said John Humphrey, Power’s senior vice president of global automotive operations.

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July Car Sales Look Promising – But Japanese Shortages Remain a Problem

Market showing signs of increasing consumer confidence.

by on Jul.22, 2011

Business is picking up at U.S. showrooms.

Things are beginning to look more promising in the U.S. automotive market after an unexpected downturn heading into the normally robust spring-summer buying season, industry analysts say.  But the pace of preliminary July sales still are lagging behind the more robust automotive recovery seen earlier in the year.

July is likely to come in well ahead of year-ago levels, and will be a definite improvement over May and June 2011.  But the current sales rate – if averaged out over the full year, would fall just short of 12 million vehicles.  Until the mid-spring downturn, the U.S. market seemed on track to top 13 million.

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“Consumers continue to face obstacles in their willingness and ability to purchase a new vehicle,” cautioned Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. “The ongoing debate regarding the debt ceiling and stagnant economy are creating added pressure on top of a generally weaker vehicle sales environment.”

Total light vehicle sales for July, Power predicts, will come in at just short of 1.1 million units, an 8% year-over-year gain.  The retail portion of the market, at 913,000, will be up a similar amount.  Adjusted for seasonal fluctuations, that would work out to an annual total of 11.9 million vehicles, at the current pace, or 9.8 million sold at retail.  Earlier in the year, numbers approaching 13 million were readily being quoted.

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Ready to Deal? Some Japanese Bargains Still to Be Found

Despite shortages, some Asian models still a bargain.

by on Jun.15, 2011

Despite shortages, there are some surprising bargains on Japanese products, such as the 2011 Honda Accord.

Think you’ll be paying thousands more for a new Japanese car due to the current shortages? Not necessarily — at least not if you’re ready to do your homework.

The Japanese earthquake of March 11 has played havoc with the auto industry, as most anyone who has shopped for a Toyota, Honda or Nissan, in recent weeks can attest to.

Though production is slowly returning to normal, most Japanese makers have had to curtail factory operations due to parts shortages, since the disaster struck.  In the near-term, manufacturers will likely fall more than a million vehicles short of their original production plans.

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That has translated not only into shortages of popular models, like the new 2012 Honda Civic, but into sharply higher prices.  The data service Edmunds estimates that American shoppers are now paying nearly $3,000 more for a Toyota Prius than they did before the earthquake.

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Nissan Bucks Trend with Profit Gain

Japanese maker expects full production by October.

by on May.12, 2011

Nissan CEO Carlos Ghosn reports increased earnings but forecasts a loss in market share.

Nissan has become the only one of the major Japanese automakers to post an increase in earnings for the January to March quarter, profits rising 7.2% despite the impact of the March 11 earthquake and tsunami that virtually shut the Japanese auto industry down.

The maker also reported that it expects to be back to full production at its home and foreign-based assembly operations by October, one to two months before arch-rival Toyota, which on Wednesday reports a 77% decline in profits due to a mix of factors including the March disaster and a sharp rise in the Japanese yen.

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Nonetheless, Nissan, like its Japanese competitors, has been hard hit, and “We’re going to have to accept the fact that in some markets we’re going to have significant losses in market share,” acknowledged CEO Carlos Ghosn.

Nissan reported a quarterly net profit of 30.8 billion yen, or $347.5 million, compared with a loss of 11.6 billion yen.  It also announced an 88.6 billion yen, or $1.1 billion operating profit for the final quarter of the Japanese fiscal year, which ended on March 31.

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GM Raising Prices

Latest maker to pass rising costs onto customers.

by on Apr.19, 2011

You'll soon be paying more for GM products like this Buick Regal.

General Motors is the latest automaker to ask customers to help cover its own rising costs.

The typical GM product will cost about $123 more, starting May 2nd, which the maker attributes to the higher price it is paying for commodities such as steel and oil.  Steel is the dominant material in a car, but higher oil prices translates into increased costs for plastics – and the tank of gas a new model leaves the factory with.

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GM is by no means alone.  Ford has bumped up prices.  And so has Toyota, which plans to add an additional 1.2% to 2.2% to the sticker on its Toyota, Scion and Lexus products, come May.

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