The Truth About Cars » united states The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 17 Jul 2014 19:25:56 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » united states US Politicians Appeal To Base Through Humble Vehicles Fri, 20 Jun 2014 13:10:29 +0000 2014 Chevrolet Silverado 1500 Exterior

As campaign season rolls out, politicians are appealing to their constituents — or at least, trying to appeal to them — by appearing to be on their level, including their choice of vehicle that they otherwise may have traded in for a Lexus or Mercedes a long time ago in their political career.

Bloomberg reports candidates are trading in their luxury rides for image-building vehicles such as Chevrolet Silverados, Harley-Davidson Road Kings, Toyota Prii, or — if vehicles in general would negatively affect their campaigning — the Shoe Leather Express. The strategy is meant to bring an air of humility on the campaign trail, which is needed to counter the charge that those who work on Capitol Hill are out of touch with the people they represent.

Aside from those who already see this tool through a cynical lens, vehicular appeal can have its drawbacks. In his failed bid for presidency, 1988 Democrat nominee Michael Dukakis turned up in a tank to appeal to those who heavily support the military. While the tactic worked for British Prime Minister Margaret Thatcher, and despite his service in the United States Army, the photo-op turned into a tool for opponent George Bush’s campaign, lambasting Dukakis for looking silly.

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Keystone Vote Looms Amid Iraq Implosion Mon, 16 Jun 2014 13:22:40 +0000 photo2-505x600

Global oil prices are on the rise as the crisis in Iraq contributes to market instability. Large chunks of Iraq’s oil production infrastructure have fallen under militant control, leading to a sharp drop in output. Meanwhile, Canadian officials are upset with the Obama administration’s handling of the Keystone pipeline. They contend that the inaction on Keystone is keeping millions of barrels of Alberta crude from reaching more profitable markets.

Bloomberg reports that market analysts are divided on how much the Iraq crisis will influence crude prices in the future. This isn’t particularly surprising, given the number of variables in that still-developing situation. However, all observers expect that the price will only go up. The price of Brent crude on the London exchange has already crested $113 a barrel as of June 13; this is the highest level since last September. In the United States, West Texas crude is near $107, also the highest price since the previous September. Most forecasters expect oil to reach around $120 a barrel by the fourth quarter, when rising demand will also drive up prices. Longtime oilman T. Boone Pickens told CNBC that a complete shutdown of Iraqi production could drive oil into the $150-200 range by destabilizing world markets.

Part of the problem is attributable to the OPEC oil cartel’s difficulties in increasing supply. Since the Libyan revolution, oil production in that key OPEC member has declined precipitously to barely 10% of previous output. Meanwhile, fluctuating production in Nigeria and other OPEC members has introduced more volatility into the supply and demand curve. A report issued by the International Energy Agency last week states that Iraq could provide up to 45% of all growth in global oil output through 2020. As militants from the hyper-violent Islamic State in Syria and Iraq (ISIS) group overrun ever-larger swaths of the country and curb down production, that future is looking cloudy.

The latest Iraq crisis comes just as negotiations surrounding the embattled Keystone XL pipeline are finally coming to a head. The U.S. Senate Energy and Natural Resources Committee will likely vote this week to approve the pipeline. The bill under consideration is an attempt to sidestep the regulatory approval process, which critics say the Obama Administration has intentionally drawn out. The bill is unlikely to make it far in the Senate, due to general gridlock as well as the opposition of several key Senators.

The government of Canadian Prime Minister Stephen Harper is displeased with the Obama administration’s perceived stalling on the pipeline. Finance Minister Joe Oliver and Natural Resources Minister Greg Rickford have both criticized Obama, stating that continued delay of the pipeline is hurting the Canadian economy. Currently, crude from the Alberta oil sands is undervalued due to a transportation bottleneck, leading to lower prices. The Canadian Chamber of Congress estimates that this bottleneck is costing the Canadian economy as much as $50 million a day in lost revenue. Therein lies the contradiction at the heart of the dispute.

Environmental concerns and global warming have long been cited as the Obama administration’s reasons for drawing out the Keystone approval process. In reality, the economics of the pipeline are heavily skewed in Canada’s favor, to the possible detriment U.S. consumers. Keystone is the most visible manifestation of the long-term goal of Canadian energy companies to find markets outside the U.S. As the Wall Street Journal explains, and the Canadian Chamber of Commerce and Harper government freely admit, Keystone’s biggest benefit will be to Canadian oil producers, not American consumers. Keystone will enable them to export oil outside of the low-priced American market to higher-priced markets in Asia, Europe, and the developing world. Keeping Canadian crude from hitting world markets is in the best interests of the U.S., but not the Canadians. Of course, it’s not exactly kosher to say that out loud, considering that the United States is still getting about half its oil imports from Canada.

Given that, the “solution” to the Canadian oil price problem is probably going to be built entirely on Canadian soil. Oil companies are already developing a “Plan B” system of trans-Canada pipelines, should Keystone not be approved. Even so, the long-term viability of the Alberta oil sands depends on a relatively high minimum price floor. The highly adulterated quality of that oil, and the resulting expense of processing and refining it, means that Albertan production can only be profitable when the price of oil is relatively high.  This reason combined with new technology is the explanation for why Canadian tar sands haven’t been highly productive until recently. A worldwide decline in the price of oil, such as what happened in the 1980s and 1990s, could still be devastating to tar sands production.

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Alfa 4C Arrives In 86 North American Showrooms, Brings 342 Pounds Of Luggage Wed, 11 Jun 2014 10:00:11 +0000 Alfa-Romeo-4C-17

Fiat Chrysler Automobiles has just released their initial list of dealerships who will have the right to sell the Alfa Romeo 4C to North American customers, while the sports car will bring 342 pounds of luggage for the trip from Modena to the selected showrooms.

Autoblog reports all but four dealerships will be in the United States — the remaining four are in Canada — and the majority of those will be concentrated in three of the 33 states on the initial list: California, Florida and Texas. The chosen ones were drawn from a list of existing Fiat and Maserati dealerships, and though expected cities like Los Angeles, Orlando and Austin will be among the chosen, a few big names didn’t make the first cut, including New York, Seattle and Louisville, Ky.

Meanwhile, the chosen dealerships “will have a unique staff dedicated to the brand’s premium market clientele,” per the words of Chrysler Group vice president of network development Peter Grady. The dealerships are undergoing “an intensive curriculum” to ensure the success of the 4C and limited-edition 4C Launch Edition as FCA presses forward toward its goal of over 300 Alfa dealerships in North America.

As for the 4C itself, Jalopnik says the sports car packed on an additional 342 pounds to its 2,153-pound Euro-spec frame for the U.S. market, coming into port at 2,495 pounds. Aside from the usual federalization mandates, some of the weight comes from the standard air-con and radio equipped in the U.S.-spec model.

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Diesel Grows In Popularity Despite Price Fluctuations At The Pump Fri, 23 May 2014 12:00:32 +0000 2014-RAM-1500-Eco-Diesel-Exterior-001

Though diesel power is experience increased popularity among United States consumers, the wild fluctuations in the price for a gallon of diesel may put some potential oil-burner owners back on the gasoline bandwagon.

Detroit Free Press reports the price fluctuations are linked to circumstances unrelated to those affecting prices for gasoline. chief oil analyst Tom Kloza explains that part of the swings that occurred this winter was due to the similarities between diesel and heating oil in wide use throughout Europe and the Northeastern United States. Another factor was increased demand for natural gas, prompting utilities and businesses to use diesel to generate electricity. Those and other unnamed factors drove the global price for a barrel of diesel between $119 to $130 in Q4 2013 and Q1 2014.

As for the overall market, organizations such as IHS Automotive and Diesel Technology Forum expect adoption rates of 6 percent to 9 percent by 2020, compared to 3 percent of the U.S. market currently. In addition, some 40 new vehicles are expected to enter showrooms within the next two years, ranging from pickups and SUVs to compact cars.

Diesel’s new-found popularity in the U.S. and developing economies means the oil fuel is the most common around the globe, surpassing gasoline. In turn, refiners and governments will see more profit in production and taxation from diesel.

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Subaru: No WRX Hatch For U.S. Market Wed, 23 Apr 2014 13:00:39 +0000 Subaru Impreza WRX STi Hatchback

For those who want a Subaru WRX or WRX STi, but prefer the utility of the previous hatchback over the current sedan offerings, they should start breathing again, as Subaru will not be bringing such a beast to the United States after all.

Motor Trend reports that last month, WRX project manager Masuo Takatsu informed that Subaru “received strong interest from the US” for a hatchback variant, citing the 50 percent uptake by the U.S. market for the previous hatch. The statement came as a surprise to Subaru of America, who weren’t expecting anything more than the sedans:

We do not know about, nor do we have, any plans for a WRX hatch. Takatsu San is the product general manager of the WRX, but this is not something he has discussed with us.

One exchange between Subaru of America and Subaru of Japan later gave the final word: No WRX hatch will be forthcoming to the U.S. market, citing cost issues against producing both sedan and hatchback models.

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BMW May Build Second NA Plant To Fend Off German Rivals Wed, 09 Apr 2014 14:04:23 +0000 BMW Spartanburg

In its battle against Mercedes-Benz and Audi for record sales, BMW is mulling over the possibility of a second plant in North America.

Bloomberg reports the automaker would place its second factory in Mexico, with two sites under consideration. The decision to expand will take a few months according to BMW production chief Harald Krueger, Should the move be given a green light, the Mexican plant is likely to build the 3 Series.

The second factory would add to the long-term growth strategy BMW is using to fend off its German premium market competitors in a heated battle for records global sales, fueled by growing demand in the United States and China. Mercedes will add the C-Class to its Alabama facility in June with a new plant in North America due near the end of this decade, while Audi is in the middle of setting up shop in Mexico with a $1.3 billion plant set to produce crossovers beginning in 2016.

Previously, BMW announced it would invest $1 billion to expand its South Carolina plant by 50 percent in 2016, as well as add the X7 large SUV to the X Series lineup currently produced in the plant.

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BAIC Seeks To Acquire US, European Brand Fri, 04 Apr 2014 11:05:24 +0000 Senova BAIC C10

Looking to expand its global presence beyond its native China, Beijing Automotive Group announced they would like to acquire a “mid to high-level brand” in either Europe or the United States, and already has a list of potential brands in mind.

Reuters reports BAIC originally looked towards Europe for their potential acquisition, but has now expanded their search to the U.S. President Dong Haiyang told reporters that his company’s brand is little-known outside of China, and sees a European or American brand as a shortcut into the global marketplace.

At home, BAIC purchased two smaller rivals in 2013, and signed a joint investment agreement with Daimler AG last month, delivering $5.51 billion into their joint venture in order to double production by 2015.

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Japanese Automakers Find New Export Base, Opportunity In Mexico Tue, 11 Mar 2014 14:45:26 +0000 Mazda3s Loading Onto Three-Tiered Train Car

Within four months of each other, Honda, Mazda and Nissan have opened new factories in Mexico, taking advantage of the opportunities within the nation’s automotive industry to grow a new export base into the United States, Latin America and Europe while also gaining ground in the rapidly expanding local market, all in direct challenge to the Detroit Three and other automakers on both sides of the border.

Automotive News reports Mexico will become the No. 1 exporting nation to the U.S. by 2015 at the earliest in large part due to the 605,000 units per year added by the three Japanese automakers. Meanwhile, Toyota will begin production in 2015 at Mazda’s newly opened Salamanca plant prior to deciding whether or not to build a new factory of their own. Nissan’s premium brand, Infiniti, may also set-up shop in Mexico.

In turn, the Japanese will see benefits from the move, from mitigating losses from a weaker yen in exports from home and greater profit due to cheap labor, to no tariffs on exports to the U.S. due to the North American Free Trade Agreement and improved product availability resulting from shorter distances between markets.

Speaking of free-trade agreements, Japanese automakers will also have access to some 44 countries and up to 40 million sales annually as a result of Mexico’s many agreements, allowing them to take on competitors in Latin America and Europe.

Finally, the Japanese have taken market share away from the Detroit Three in Mexico’s own automotive market, holding a collective 42 percent over Detroit’s 35 percent in 2013, when just four years earlier Detroit dominated with 57 percent of the market over Japan’s 23 percent.

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Mexico Besting Japan, Canada In Auto Exports To The U.S. Mon, 24 Feb 2014 13:38:27 +0000 2015 Honda Fit

Mexico’s auto industry is set to ship more product north to the United States than Japan and Canada by the end of 2015, in part due to the effects the North American Free Trade Agreement has had on the country since its signing two decades ago.

USA Today reports that with operations at Honda’s new $800 million plant in Guanajuato now online, the 200,000 Fits destined annually for the U.S. will push total Mexican exports to 1.7 million units this year, just 200,000 more than Japan’s exports from their home market. Mazda’s newest plant 25 miles away, when open this week, will add 230,000 units annually to the total, pushing Mexico past Canada by the end of 2015 to become the No. 1 exporter to the U.S.

At the time of NAFTA’s signing, the auto industry in Mexico produced 6 percent of the total output in North America. Twenty years later, that figure is now 19 percent, with 3 million units leaving the factory floor. Total valuation of the nation’s exports surged to $70.6 billion from $40 billion in 2007. The industry is now Mexico’s primary source of foreign currency, surpassing oil exports and remittances from migrant labor along the way.

This growth is driven by low wages — $16/day on average for Mexico’s 580,000 auto workers — which critics attribute to maintaining Mexico’s poverty rate between 40 percent and 50 percent two decades on. Meanwhile, the nation hasn’t fared any better as a whole, with overall economic growth at 1.1 percent in 2013, the worst rate of growth since the beginning of the Great Recession.

For Eduardo Solis, president of the Mexican Automotive Industry Association, the boom is about more than low wages, citing a new generation of local engineers and increases in automotive research as positive outcomes:

It’s not only about lower salaries. That’s short-sighted. It is a component of a larger equation that has to do with the expertise we are developing.

Aside from NAFTA opening the floodgates, the lack of tariffs has allowed Japanese manufacturers — the main driver behind new production in Mexico — to set up shop easily. Incentives from local governments, such as employee training, tax exemptions and infrastructure improvements, have helped to draw new factories to their cities.

Correction: an earlier iteration mistakenly quoted Mexican auto ages at $16 per hour.

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U.S. Average Fuel Economy Increases In January Tue, 11 Feb 2014 18:00:55 +0000 2014 Ford Fiesta Hatchback Exterior

According to the University of Michigan Transportation Research Institute, the fleetwide fuel economy in the United States increased for the second consecutive month to 24.9 mpg during the month of January 2014.

Though the average peaked at 25 mpg late last year, the current figure is up 1.2 percent over the 24.6 mpg average gained at the same time last year, while already ahead of the overall 2013 average of 24.7 mpg. The gain is in spite of falling green-car sales in the same month, where 14 percent less hybrids and EVs left the showroom floor than had done so in 2013.

The cause? The Toyota Prius, whose four variants on the same theme lost 23 percent of what was sold at the same time last year to more three- and four-pot models such as the Ford Fiesta and Chevrolet Spark, whose application of fuel economy technology differs greatly from EV and hybrid offerings while also capable of pulling customers away from the truck lots.

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Nissan Outsold By Honda In Home, U.S. Markets Thu, 30 Jan 2014 18:30:23 +0000 Nissan-Sport-Sedan-Concept-01

Though Nissan remains Japan’s second-biggest automaker with a wide gap ahead of Honda, the latter continues to outsell the former in the United States and at home, much to Nissan’s dismay

According Automotive News, Nissan’s global sales for 2013 increased 3 percent to 5.1 million units, while Honda’s rapid 12 percent growth in sales only managed 4.3 million units in the same period. Further, Nissan sold 86 percent of its 5.1 million vehicles — 4.4 million, to be exact — outside Japan, Honda doing as well by selling 3.5 million of its 4.3 million overseas. Overall, Nissan beat Honda in Europe, Mexico, China and most of Asia, yet lost to Honda in Japan and the U.S.

At home, the reason is due to Honda’s popular line of kei cars (all made in house), and all having undergone a total revamping as of late. Meanwhile, Nissan has partnered with Mitsubishi to make kei cars after years of farming out the practice to the former’s rivals. Though things appear to be looking up for Nissan, they will be looking up at Honda for a good while: Honda sold just over 400,000 kei cars in 2013 to Nissan’s 186,000, while also growing 27 percent in kei car sales against the latter’s 21 percent.

Across the Pacific, Nissan is gaining on Honda’s other home turf, selling 1.2 million units for a 9 percent increase in sales against their rival’s 7 percent increase and 1.5 million units in 2013. Market share in the U.S. held at 9.8 percent for Honda while Nissan took a tenth of a percentage for an even 8 percent in the same period.

Though Honda has done well for itself since becoming the first Japanese auto manufacturer to build a factory in the United States back in 1982 for the Honda Accord — such as exporting more cars around the world from the U.S. than from Japan in 2013 for the first time ever — Nissan aims to turn up the heat through the tandem of new production coming from Mexico, and aggressive tactics devised by Nissan North America’s new chairman Jose Munoz, who is under standing orders to boost his employer’s share of the U.S. market to 10 percent.

Either way, both Honda and Nissan still have a ways to go to take on Toyota; the No. 1 Japanese and global automaker moved 9.98 million units worldwide in 2013.

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Renault Eyeing Return To Iran When Sanctions Lift Fri, 24 Jan 2014 18:18:40 +0000 Renault Tondar 90. Picture courtesy of Iran Khodro

For the past few months, sanctions against Iran for their nuclear ambitions have sidelined PSA and Renault from the Persian market. Behind the scenes, General Motors outmaneuvered PSA despite their one-time alliance allowing them to muscle their way into aan emerging market via loophole abuse and an unknown quantity of Camaros. With GM out of the way, however, PSA would now be free to regain their footing once sanctions were lifted.

PSA won’t be alone in the upcoming battle, of course, as their compatriots at Renault have plans to return to Iran to reclaim what was lost, and then some.

At the World Economics Forum in Davos, Switzerland this week, Renault-Nissan CEO Carlos Ghosn announced that Renault would be willing to return to Iran once sanctions were lifted so as to capitalize on the potential 50 percent growth in sales. Currently, the sanctioned market represents between 700,000 to 800,000 vehicles, but could explode to between 1 million and 1.5 million units by the end of the 2010s once the market is freed, benefiting both Renault and PSA due to the popularity of French brands in Iran.

Renault’s departure from the Iranian auto market early last year, was out of fear of non-compliance of the sanctions issued against Iran by the United States, consequences of which would have led to Nissan having a tough time as far as U.S. sales were concerned. The pullout cost Renault 64,500 units worth of sales in the nation — 40,000 less than predicted by French newspaper La Tribune back in late July 2013 — and a first-half provision of $698 million that contributed to a 95 percent plunge in net income from Persian sales in the same period.

The vehicles sold in Iran by Renault consisted of Dacia Logan variants built locally from component kits in a partnership with local manufacturer ICKO.

With the noted presence of Iranian President Hassan Rouhani at the annual Davos gathering, Ghosn is confident that the “well-engaged” discussions about resuming international ties between Iran and the West are a sign of good things to come for his company, and for all others waiting to stake a claim. Iran’s auto market is expected to explosively to 1 million units, or 50 percent larger than Australia’s own market, by 2020.

Not that Tehran is waiting, of course.

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Reuss Wants America to Have a Wagon Tue, 21 Jan 2014 12:00:24 +0000 Chevy Cruze Wagon

Should General Motors new product boss Mark Reuss have his way, there may come a day when a new affordable wagon could be driven off the lot onto the highways and driveways of America.

Reuss was asked at the 2014 Detroit Auto Show what type of vehicle that was missing from GM’s current lineup should be given life. In response, he noted that no automaker in the United States currently offers an affordable wagon for the masses, one described as “mainstream, fun, good-looking, hot-looking, [and] fun-to-drive.” Reuss acknowledged that there were some wagons already for sale, such as the soon-to-be discontinued Cadillac CTS Sport Wagon and offerings from BMW and Mercedes-Benz, though all of them were too expensive for the space he wishes to fill.

Currently, crossovers hold dominion over the space once occupied by SUVs, minivans and wagons. To bring crossover owners into the wagon train, Reuss said his dream wagon would have to be compelling and be “really fun to drive” for it to be a hit with that market. He would also need to convince his new boss, CEO Mary Barra, to sign-off on a made-for-America wagon, which could be underpinned by the architecture found in the Cadillac ATS and next-gen Chevrolet Camaro.

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Porsche’s Bernhard Maier: China Could Become No. 1 in 2014 Fri, 10 Jan 2014 12:00:50 +0000 Porsche 911 GT3-R Hybrid in China

In a sign that the 21st Century could belong to China after all, Porsche’s head of sales and marketing Bernhard Maier predicts that the United States will finish second on the podium to China as far as 911s and Macans are concerned by the end of 2014 at the earliest.

Though Maier’s ultimate goal is for Porsche to have “qualitative, sustainable and profitable growth” — defined as an ROI over 15 percent with a return on equity of over 21 percent, thus allowing Porsche to remain the most profitable automaker in the world while financing their investments through net cash flow — in opposition to volume, he believes that China could become the automaker’s No. 1 single market as soon as 2014, if not sometime in 2015, knocking the United States from the top.

In China, the Cayenne and Panamera are Porsche’s two best-sellers, with more growth potential in 2014 due to a product changeover with the second-generation Panamera creating a shortage in the market. Overall, their current balance of global sales is divided evenly between the Americas, Europe and Asia, with the Macan leading the way toward growth in mature and emerging markets.

Speaking of the Macan, Maier has high hopes for the compact SUV, which will debut in European showrooms in April, with the United States following soon after before China gets theirs in August. Serving as one of two entry points into Porsche’s paradise — the other being the Boxster — Maier expects 50,000 units to head out on the highway by the close of 2014, with overall sales fast approaching Porsche’s 2018 goal of 200,000 units/annually by next year.

Why so soon? Maier says that when Porsche outlined their strategy back in 2011, the automaker sought to go all in with both guns blazing the global marketplace. With market forces expecting an increase in the luxury segment by over 4.5 percent, and annual global sales demand climbing to 100 million, 200,000 yearly sales by 2015 appears to be possible.

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Hyundai, Kia See Weakest Annual Sales Growth in a Decade Thu, 02 Jan 2014 16:59:53 +0000 kia-k900-la-auto-show-14

2014 may only be a day old, but it’s already shaping up to be a rough year for Hyundai and Kia as they prepare to increase global sales by just 4 percent this year, the lowest and bleakest forecast for the Korean duo since 2003.

Though the foreseen growth will be fueled by revamped models and increased production in China, and is in line with overall projected global sales in 2014, a stronger won and weaker yen — the latter brought about by Japan’s desire to support its export industry and to find a way out of the 20-year trek through the economic wilderness — have eroded the price advantage Hyundai and Kia held over their Japanese competitors.

While the duo experienced market growth in Brazil and China last year, they lost market share in both their home market and in the United States, the former through a free trade pact between the European Union and South Korea. Sales in 2013 totaled 7.56 million units worldwide, with a total projection of 7.86 million going forward in 2014.

Shares of the parent automaker haven’t fared well in the outgoing year, advancing only 8 percent against GM’s 41 percent and Toyota’s 60 percent surges on the trading floor.

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Toyota Set to be #1 in Recalls for Fourth Time in Five Years Mon, 30 Dec 2013 13:00:36 +0000


Barring a last minute campaign from another manufacturer, Toyota will be number one in recalls on the American market for 2013. This will be the second year in a row that Toyota has topped the recall rankings. Since the 2009 sudden unintended acceleration controversy, Toyota has led the nation in recalls every year except 2011.

A recent overview published in the International Business Times highlights the recall problems of major OEMs globally, with a focus on the United States. Official NHTSA statistics for 2013 won’t be available until next month, but a rough count of major recalls places Toyota in the lead. In 2012, Toyota recalled 5.3 million cars for a variety of maladies. Honda was number two, with 3.3 million cars recalled. Lowlights in the recall race include Toyota’s 870,000 units with randomly deploying airbags due to spiders, Chrysler’s 280,000 units with potentially faulty rear axles and 2.7 million Jeeps for potential  fire hazard, BMW’s 569,000 units that could randomly shed battery cables leading to stalling, and Honda’s 777,000 units with missing rivets leading to airbag malfunctions.

None of Toyota’s major recall campaigns in the United States in 2013 were related to unintended acceleration. Instead, airbags and seatbelts top the list of problematic components. Besides the aforementioned airbag issues in Camrys and Avalons, Toyota recalled over 750,000 Corollas and Matrixes for problems with electronic circuitry that could lead to random deployment of airbags or seatbelt pretensioners. 209,000 FJ Cruisers and 342,000 Tacomas were also recalled for seat-belt issues, as were 170,000 other units for faulty airbag inflators. In addition, 615,000 Sienna minivans were recalled for transmissions that can slip out of park without prior application of the brakes. Although no cars in the U.S. were recalled for SUA-related issues in 2013, Toyota just announced a recall of 400,000 units in Saudi Arabia to install brake override systems. That recall is meant to address concerns about possible unintended acceleration.

Toyota’s problems with airbags can be traced at least partially to the widespread reliance of multiple manufacturers on large suppliers. As the IBT article explains, Toyota’s recall for faulty air bag inflators is part of a widespread problem that has also affected Honda, Nissan, and Mazda. All of these companies used air bags manufactured by the Takata Corporation at its Mexican facility from 2000-2002. All of these companies have announced recalls to address the same problem. This illustrates the way in which component defects at the supplier level can spread widely throughout the industry. If headaches like this continue for OEM’s, one has to wonder if they might insource more production of critical safety systems. At the very least, it is likely that suppliers of these components will face tighter scrutiny in an effort to avoid costly recalls.

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Gasoline Power To Dominate U.S. Highways Through 2040 Fri, 20 Dec 2013 13:30:56 +0000 2014 Chevrolet Corvette Stingray

The green warriors who hoped EVs and hybrids would be the dominate force on the highways of America may need to wait a bit longer: the United States Department of Energy predicts gasoline will be the fuel of a generation until at least 2040.

In fact, the DOE’s Energy Information Administration states in a report issued earlier this week that 78 percent of all vehicles on the road in 2040 will still burn fossil fuels, though more efficiently; the EIA predicts an average of 37.2 mpg at that point in time. While 42 percent of all vehicles will use some form of advanced fuel-saving technology, plug-in hybrids and full EVs will each account for only 1 percent of sales.

As for the pump, the EIA believes a gallon of gas will rise to the equivalent of $3.90, with diesel tagged for $4.73. The agency also predicts 30 percent increase in miles traveled from 2012 through 2040, and overall fuel consumption in the nation’s transportation sector to fall by 4 percent.

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Chevrolet U.S. Marketing Chief Chris Perry Resigns Fri, 20 Dec 2013 04:22:05 +0000 General Motors Vice President Global Marketing Chris Perry

Following on the heels of General Motors CEO Dan Akerson’s recent resignation, Chevrolet’s chief marketing officer for the United States Chris Perry has called it a day effective immediately.

Perry came aboard from Hyundai in 2010 through former GM chief marketing officer Joel Ewanick, going through numerous title shifts until the automaker hired former Volkswagen of America executive Tim Mahoney as the Bow Tie’s global chief marketing officer last spring.

Prior to his hiring, Perry was Hyundai’s top U.S. marketing executive after Ewanick left for GM. The duo were responsible for the Korean automaker’s Hyundai Assurance program, allowing customers who financed or leased out a new Hyundai to return the model within a year should the customer lose their income.

Regarding Chevrolet, Perry spearheaded both the Tim Allen-voiced “Chevy Runs Deep” ad campaign — since replaced by the “Find New Roads” theme after customers didn’t take a shine to the depths of the golden bow tie — and the ongoing “Under the Blue Arch” retail campaign, where fictional characters promote Chevrolet’s lineup.

GM has yet to announce a successor.

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Mercedes to U.S. Dealers: Expect Fewer CLAs For Now Mon, 16 Dec 2013 06:22:11 +0000 2014 Mercedes-Benz CLA

Due to high demand from customers jumping aboard the CLA bandwagon, Mercedes-Benz has warned dealers in the United States that supply of the new four-door coupe will be limited for the first half of 2014.

The popularity of the CLA helped the Stuttgart automaker widen its lead in the U.S. over the Bavarians at BMW while also bringing in a younger demo to the showroom; the median age of a CLA lessee is 46, while 57 is the age of majority for Mercedes overall.

In the meantime, supply of the front-driven coupe will be tight up through June 2014 as the factory screwing them together is at maximum capacity.

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U.S. Government Sells Remaining General Motors Stock Tue, 10 Dec 2013 10:30:21 +0000 gmstock

It’s official: the United States government has sold off its remaining $49.5 billion investment in General Motors.

U.S. Treasury Secretary Jack Lew announced that of the aforementioned investment — made during the fallout of the Great Recession — $39 billion came back to the government’s coffers while the taxpayer lost $10.5 billion on the deal. The government originally received 912 million shares — or 60.8 percent total ownership — in exchange for saving the automaker from certain doom in 2008. Once the company regained its footing in November 2010, the government began selling shares in a divestiture that lasted until this afternoon, when only 2 percent remained of GM remained in the federal investment portfolio.

On the other side, GM’s stock rose to $41.17 during regular trading hours, the highest peak the stock has seen since their IPO debuted in 2010. The automaker currently sits upon a nest egg of $26.8 billion in cash, and is considering bringing back dividends to their stockholders. Most of the nest egg was built during 15 consecutive months of profitability based on the strength of their brand and rising sales in North America and China.

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Canadian Auto Workers More Cost Effective Than U.S. Workers, Study Says Thu, 14 Nov 2013 14:23:49 +0000 Canadian Autoworker

The land of Canadian Tire, Tim Hortons and Michelle Creber has yet another thing going for it: Their auto workers have a cost advantage over their two-tiered brothers and sisters down south according to a study from Toronto, Ontario-based Scotiabank.

In the report, Scotiabank chief economist Carlos Gomes explains that, as a result of the recent Unifor contract, new hires to Canadian assembly plants are more cost effective than those brought on board in United States-based facilities. The price tag? $37 for a U.S. new hire versus around $30 (in USD) for a Canadian new hire.

Furthermore, while someone screwing together a Camaro will reach parity with older workers in 10 years’ time, a new hire building Escapes will remain below senior workers for the entirety of their career. A weaker Canadian dollar, pegged at 96 cents USD as of this writing, also adds to the Great White North’s competitive streak.

With the threat of overcapacity and bottlenecks looming over the North American auto industry, along with increased demand from global markets, automakers are looking at what they can do to keep the machine running. For Ford, it means a $700 million investment in the retooling of its Oakville plant to build crossovers for export markets, while for General Motors, it means delaying the shutdown of their Oshawa plant until sometime in 2016. And of course, according to Gomes, Canada can begin to diversify its automotive exports beyond the NAFTA zone, a result of signing a free trade agreement with the European Union.

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September 2013 Sales: A Stellar Month For Subaru Tue, 01 Oct 2013 20:07:04 +0000 IMG_2610-550x366

September was a great month for Subaru, with the brand up 15 percent. Ford, Chrysler, Jaguar Land Rover and BMW also posted solid gains. General Motors,Hyundai/Kia, Toyota, Nissan and Honda saw declines, as the SAAR dipped to 15.3 million units amid decreased consumer and business confidence. Table below the jump.

Automaker Sept. 2013 Sept. 2012 Pct. chng. 9 month
9 month
Pct. chng.
BMW Group 28,958 26,739 8% 262,956 235,639 12%
    BMW division 23,568 21,761 8% 212,565 186,397 14%
    Mini 5,306 4,899 8% 49,635 48,531 2%
    Rolls-Royce 84 79 6% 756 711 6%
BMW Group 28,958 26,739 8% 262,956 235,639 12%
Chrysler Group 143,017 142,041 1% 1,357,003 1,250,670 9%
    Chrysler Division 25,251 24,850 2% 237,746 241,466 –2%
    Dodge 48,576 47,356 3% 461,834 391,912 18%
    Dodge/Ram 77,145 73,770 5% 731,130 611,272 20%
    Fiat 3,157 4,176 –24% 32,742 32,742 0%
    Jeep 37,464 39,245 –5% 355,385 365,190 –3%
    Ram 28,569 26,414 8% 269,296 219,360 23%
Chrysler Group 143,017 142,041 1% 1,357,003 1,250,670 9%
Daimler AG 27,474 25,987 6% 236,933 214,387 11%
    Maybach 4 –100% 36 –100%
    Mercedes-Benz 26,849 24,953 8% 229,996 207,040 11%
    Smart USA 625 1,030 –39% 6,937 7,311 –5%
Daimler AG 27,474 25,987 6% 236,933 214,387 11%
Ford Motor Co. 184,452 174,454 6% 1,887,672 1,685,068 12%
    Ford division 177,999 167,652 6% 1,827,820 1,621,188 13%
    Lincoln 6,453 6,802 –5% 59,852 63,880 –6%
Ford Motor Co. 184,452 174,454 6% 1,887,672 1,685,068 12%
General Motors 187,195 210,245 –11% 2,117,459 1,967,715 8%
    Buick 15,623 14,673 7% 157,503 137,262 15%
    Cadillac 13,828 12,579 10% 133,414 103,512 29%
    Chevrolet 127,785 149,801 –15% 1,493,329 1,420,383 5%
    GMC 29,959 33,192 –10% 333,213 306,558 9%
General Motors 187,195 210,245 –11% 2,117,459 1,967,715 8%
Honda (American) 105,563 117,211 –10% 1,159,012 1,066,458 9%
    Acura 11,648 14,366 –19% 120,830 115,773 4%
    Honda Division 93,915 102,845 –9% 1,038,182 950,685 9%
Honda (American) 105,563 117,211 –10% 1,159,012 1,066,458 9%
Hyundai Group 93,105 108,130 –14% 964,601 974,728 –1%
    Hyundai division 55,102 60,025 –8% 548,218 539,814 2%
    Kia 38,003 48,105 –21% 416,383 434,914 –4%
Hyundai Group 93,105 108,130 –14% 964,601 974,728 –1%
Jaguar Land Rover 4,700 4,640 1% 47,806 41,224 16%
    Jaguar 1,313 1,004 31% 12,447 9,550 30%
    Land Rover 3,387 3,636 –7% 35,359 31,674 12%
Jaguar Land Rover 4,700 4,640 1% 47,806 41,224 16%
Maserati 379 269 41% 2,241 1,984 13%
Maserati 379 269 41% 2,241 1,984 13%
Mazda 22,464 24,135 –7% 220,490 209,481 5%
Mazda 22,464 24,135 –7% 220,490 209,481 5%
Mitsubishi 4,001 4,806 –17% 44,981 46,122 –3%
Mitsubishi 4,001 4,806 –17% 44,981 46,122 –3%
Nissan 86,868 91,907 –6% 941,116 866,484 9%
    Infiniti 9,040 9,445 –4% 80,919 86,596 –7%
    Nissan Division 77,828 82,462 –6% 860,197 779,888 10%
Nissan 86,868 91,907 –6% 941,116 866,484 9%
Subaru 31,755 27,683 15% 313,407 245,463 28%
Subaru 31,755 27,683 15% 313,407 245,463 28%
Suzuki* 1,921 –100% 5,946 19,149 –69%
Suzuki* 1,921 –100% 5,946 19,149 –69%
Toyota 164,457 171,910 –4% 1,698,179 1,571,424 8%
    Lexus 19,522 20,386 –4% 190,760 170,990 12%
    Scion 5,131 6,743 –24% 54,090 56,490 –4%
    Toyota division 139,804 144,781 –3% 1,453,329 1,343,944 8%
    Toyota/Scion 144,935 151,524 –4% 1,507,419 1,400,434 8%
Toyota 164,457 171,910 –4% 1,698,179 1,571,424 8%
Volkswagen 48,377 51,660 –6% 463,066 450,830 3%
    Audi 13,065 12,302 6% 114,411 100,694 14%
    Bentley 253 239 6% 1,859 1,644 13%
    Lamborghini* 46 44 5% 414 388 7%
    Porsche 3,093 2,736 13% 31,549 25,015 26%
    VW division 31,920 36,339 –12% 314,833 323,089 –3%
Volkswagen 48,377 51,660 –6% 463,066 450,830 3%
Volvo Cars NA 4,188 4,977 –16% 48,193 51,626 –7%
Volvo Cars NA 4,188 4,977 –16% 48,193 51,626 –7%
Other** 253 246 3% 2,277 2,209 3%
TOTAL 1,137,206 1,188,961 –4% 11,773,338 10,900,661 8%

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Ghosn Issues VW-Like Sales Goal To America Mon, 13 May 2013 12:00:39 +0000 Carlos Ghosn. Photo courtesy Bertel Schmitt.

Weaker than expected growth in the United States has led Carlos Ghosn to issue an even more ambitious goal; double Nissan’s sales by 2017.

Nissan North America sold 1,141,656 vehicles in the United States last year, with just over 1 million of those vehicles coming from the Nissan brand. To achieve Ghosn’s goal, Nissan will have to post 18 percent gains every year for the next four years.

Automotive News reports that some of the blame has been placed on production issues, while Nissan is also looking to boost efficiencies at the retail level to help increase sales. Nissan wants to double the number of unit sales per outlet by the end of fiscal year 2017, from 959. By comparison, Toyota sells 1,491 units per franchise while Honda sells 1,220. Adding dealers in the West, Midwest and Northeast is also a possibility.

To say that Nissan’s plan is aggressive is an understatement. When Volkswagen issued their call for 800,000 units in the United States, it set a target date nearly a decade into the future, and matched it with a strong product push targeted squarely at the tastes and budgets of U.S. consumers. While there’s still another 5 years to go, Volkswagen is already at 438,133 units in the U.S. as of last year.

With Europe in the toilet and Japan and China looking shaky, America is one side of Ghosn’s magic coin (the other being low cost cars), since it’s a locale where auto sales are not in freefall. Ghosn’s pursuit of marketshare for Nissan is reflected in the newest round of products, like the Versa, Sentra, Pathfinder and Altima, which emphasize comfort, interior space and value. In this context, their decision to slash prices to make their cars more competitive in online comparisons makes sense. With such a short timeframe and such a far-fetched target, every little bit will help move Nissan across the board.


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EU-US Free Trade Deal Begins, Completion Expected In 2015 Wed, 13 Feb 2013 18:18:47 +0000

The United States and the European Union will begin talks on a free-trade agreement, which may take as long as two years to complete. The deal is expected to be worth some $613 billion annually, and could have some interesting implications for the auto sector.

The first and most obvious possibility is the end of import duties for passenger cars and light trucks; 2.5 percent for cars and 25 percent for trucks. Such a deal would amount to an end for the “chicken tax” for European made light trucks.

This may have an impact on the manufacturing profile for the world’s automakers as well. Mexico is currently in vogue due to low labor costs and the ability to export Mexican made cars to the United States and Europe. But with a US-EU free trade deal, there may be an extra incentive to bring some production to Europe, particularly if there’s unused capacity burning a hole in their pocket.

Also worth keeping an eye on is vehicle safety standard harmonization. The FMVSS standards vary from the UN/ECE standards used by pretty much everyone else, and this deal may bring about some kind of agreement on harmonization between the two. The FMVSS is frequently cited as a non-tariff barrier to trade by many observers. Not many would be sad to see it go.

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BMW Shifts Units From Europe To U.S. Thu, 18 Oct 2012 16:40:29 +0000

Europe’s auto market implosion has led BMW to shift units earmarked for the continent over to the United States and China, where demand remains strong.

BMW Sales Chief Ian Robertson told Bloomberg that a recovery in Europe could take years, and that Europe’s crisis was having effects in other regions. “The slowdown in China is part of what’s happening in Europe,” Robertson said.

BMW’s global sales were up 14 percent in September, buoyed by the introduction of the new 3-Series. But the company must take measures to stop the bleeding in Europe, with Robertson remarking that a restructuring of its Spanish dealer network is under consideration.

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