Theft Rings Use Straw Buyers to Bilk Dealers:

• "Given modern anti-theft devices, cars are becoming more difficult to steal. This is the wave of the future." -- Pete Pierce, senior deputy district attorney, Orange County, CA

• "They [straw buyers] came in preapproved. They had drivers licenses, insurance cards, everything. We were paid with cashier's checks from credit unions." -- Richard Eaton, owner, Eaton Motors, Fountain Valley, CA

• "Our first line of defense is educating dealership employees." -- Calvin Washington, manager, fraud control, DaimlerChrysler Financial Services

Sourced From: Automotive News, February 26, 2007

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         Subaru Legacy Limited is New Production Model  

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Situation US "stuck in reverse" when offering consumers wide selection of fuel-efficient vehicles Civil Society Institute research shows growing "fuel-efficient car gap" Vehicles in US achieving combined gas mileage of 40 mpg dropped from 5 in 2005 to 2 in 2007 - Honda Civic hybrid, Toyota Prius hybrid Overseas, primarily in Europe, 113 vehicles get combined 40 mpg, up from 86 in 2005 Nearly 2/3 of 113 unavailable to US consumers made by automakers w/ US operations In Europe, cars on average get 40 mpg, compared w/ 20.4 mpg for US cars

Honda Civic hybrid

• Poll conducted for CSI shows millions of Americans would welcome fuel-efficient cars
• Fuel efficiency standards for passenger cars unchanged for 2 decades at 27.5 mpg
• Most European vehicles cited have diesel engines; don't meet US emission standards
• Many European models not marketed in US due to labor union objections
• Detroit automakers essentially in denial about consumers' desires for years

• http://www.automotivedigest.com/view_art.asp?articlesID=21658

Sourced From: MSNBC, February 28, 2007

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Situation Mitsubishi posted $35M quarterly net profit; 1st time since it started reporting quarterly in 2004 Brand crushed by product recall scandal; on track to post 1st full-year profit since 2003 Mazda/Suzuki wowing buyers, impressing rivals; smart designs, imaginative business plans Mazda's recovery achieved w/o Ford investing heavily Suzuki sold 690K cars in Japan in 2006; only 10K fewer units than Honda Fuji Heavy Industries less spectacular; sluggish performance at home, losses in US

• Toyota, Honda may get all the press among Japanese automakers
• Second-tier players making impressive gains
• Smaller Japanese automakers operating under radar making strides
• Despite unrelenting bad news from Ford, one big positive is alliance w/ Mazda
• Not all 2nd-tier Japanese automakers basking in the sun

• http://www.automotivedigest.com/view_art.asp?articlesID=21693

Sourced From: Business Week, March 1, 2007

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Situation US was model for global car industry for many years; single largest car market in world Now US represents less than 1/4 of world industry; its market share will decline further Growth in global auto industry in next decade to come from emerging market countries Small car fastest-growing segment; only size affordable to burgeoning middle classes Automakers developing low-cost cars: Renault, Fiat, Peugeot, Daewoo, Hyundai, Daihatsu Ford, GM behind Toyota w/ flexible-fuel concept cars; some years away from mass production

• US car market already reached saturation point
• Global demand for small cars, price below $10K, to grow by 30% in next 5 years to 18M
• Essentially 2 car markets: US w/ low fuel prices, low population, big cars and rest of world
• Will change only when US raises gas prices to world levels
• Attitudes changing, even in US; more consciousness about environmental issues
• Big cost and technical barriers to spread of alternative technology; 10-20 years

• http://www.automotivedigest.com/view_art.asp?articlesID=21671

Sourced From: BBC, February 28, 2007

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Situation For years, America built some of world's most coveted luxury cars Increasing competition forced Detroit to concentrate on high-volume cars beginning in 1970s Ceded luxury segment to rivals in Japan and Germany Cadillac and Lincoln became punch line, car of choice for retirees and funeral homes In Jan Cadillac debuted new 2008 CTS sedan; on heels of several successful designs Lincoln wrestling w/ brand image; can it pursue traditional luxury customer

• Cadillac finally able to again attract younger, more affluent audience
• New CTS wrestled control of interior away from accountants, back to designers
• Much riding on new CTS; 2nd generation of Cadillac's entry-level, RWD sedan
• Tough competition from BMW's 3 series, Lexus IS, Mercedes C-Class sedans
• Question if Cadillac customers psychologically willing to accept it on par w/ BMW, Lexus
• Cadillac must offer competitive sedans and coupes to succeed

• http://www.automotivedigest.com/view_art.asp?articlesID=21682

Sourced From: Business Week, March 1, 2007

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Situation Toyota/Honda get top marks overall in Consumer Reports' 2007 Annual Car Reliability Survey Toyota, Honda, Scion, Acura, Lexus took top 5 places of 36 most reliable car brands for 2007 Mercury highest-placed US nameplate ranking 10th; GMC came in 14th, Dodge placed 22nd In addition, 55 of 59 used cars recommended were Japanese, dominated by Toyota/Honda Top Picks: Toyota RAV4, the Infiniti G35, Toyota Sienna, Mazda MX-5 Miata, Honda Fit Survey compiled by responses from over 1.3M magazine subscribers

• All top car picks Japanese brands for 2nd time in 10-year history of annual list
• Snub by Consumer Reports comes at time of crisis for Detroit-based automakers
• Biggest increase in reported problems for cars comes between 5 and 6 years old
• Point where Toyota and Honda's models excel in reliability
• Average 10-year-old Toyota/Honda has same, or fewer, problems than 4 or 5-year-old US car
• European automakers continue to lag Asian and N American automakers in reliability

• http://www.automotivedigest.com/view_art.asp?articlesID=21662

Sourced From: MSNBC; Detroit Free Press, March 1, 2007

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Situation Ford tells employees about new subcompact car for US market Will be based on Mazda2, which debuts at Geneva Auto Show

• Ford doesn't have small car like Toyota Yaris, Chevy Aveo in US
• Mazda-engineered platform will also be used for Ford Europe
• Some analysts who have seen Mazda2 are impressed
• Ford's version will not be "world" car but tailored to each market
• Some say car might be built in Brazil, others think Mexico
• Ford used Mazda6 platform to build Fusion, Lincoln MKZ

• http://www.automotivedigest.com/view_art.asp?articlesID=21665

Sourced From: Detroit News, March 1, 2007

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Situation Despite generally flat Feb market, GM sales climb 3.7% from year ago GM trucks set pace as Chevy Silverado outsells Ford F-150, 58,696 to 55,251 Downswings persist for Ford, down 13.4%, Chrysler Group, down 7.7% Toyota/Lexus/Scion chalk up 12.2% bounce, fail to outsell Ford brands for 2nd place Asian brands, BMW top 2006 totals; Toyota leads, then Honda, BMW, Kia Final Feb total 1245M vs 1257M year ago w/ 1091M sales Jan 2007

• Domestic sales losers rode on Ford rental fleet sales cutback, uncertainty w/ Chrysler
• New products boost GM volume, include GMC Acadia, Saturn Outlook crossovers
• Biggest leap from Toyota's all-hybrid Prius sedan, up whopping 86.6% in 2006
• Ford also posted new-product sales gains--Edge crossover, Lincoln MKX
• Truck sales get boost from new Toyota Tundra w/ total 2006 units at 9669
• Share: GM, 23.4%; Toyota, 15.5%; Ford, 14.9%; DC, 14.1%; Honda, 9.0%; Nissan, 7.2%

• http://www.automotivedigest.com/view_art.asp?articlesID=21667

Sourced From: The Wall Street Journal, March 1, 2007, Detroit Free Press, Detroit News, March 2, 2007

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Situation AutoUSA announces special finance leads service to dealers in subprime industry Service in response to dealer demand for more special finance customers AutoUSA verifies consumer data entered on web site, makes lead available to dealers Dealers purchase leads on per-lead basis at prices based on market conditions Company works w/ over 4K franchised dealers, may expand to independents AutoUSA owned by AutoNation, formerly known as AutoVantage

• Credit-challenged consumer fills out form at www.autousa.com website
• Must be employed in order to qualify
• Must also list mortgage/rent, whether ever filed for bankruptcy
• Leads become available in real time
• AutoUSA aiming to provide leads resulting in highest closing ratio in industry
• Can tailor customer screening to certain dealer requirements

• http://www.automotivedigest.com/view_art.asp?articlesID=21668

Sourced From: SubPrime Auto Financing, March 1, 2007

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Situation Xquisite Empire Inc, Duty Free Auto Club paid individuals w/ good credit to buy vehicles Vehicles turned over to brokers who resold, subleased them on black market When payments stopped, no vehicles left to repossess Prosecutors say schemes using straw buyers becoming more frequent Warn dealers to check buyers' credit w/ credit bureaus, verify employment w/ pay stub Also should verify insurance coverage, get articles of incorporation for businesses

• 20 people in Atlanta, GA, charged w/ fraud in Xquisite Empire case
• 24 straw buyers, 6 ringleaders charged in Orange County, CA, in Duty Free Auto Club case
• Some of US's largest dealership groups victimized by subleasing scams
• Schemes happening all over country, involve 100s of vehicles, millions of dollars

• http://www.automotivedigest.com/view_art.asp?articlesID=21631

Sourced From: Automotive News, February 26, 2007

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Situation When DCX announced it may sell Chrysler unit, many analysts mentioned Chery as suitor Chery denied deal was in works; analysts skeptical, citing Chery's small size, political hurdles Chery Automobile China's #1 independent automaker, auto exporter; business in 30 nations Sold 300K+ cars in 2006, roughly 25K exported; in 2007 expects to sell nearly 400K Competitive advantage: excels at manufacturing small, gas-efficient vehicles at low cost Chery's inclusion in discussions of Chrysler's future is major milestone

• Chery may seek to exploit another possible outcome of a Chrysler deal
• Private-equity company might want to buy Chrysler unit; then sell it off piece by piece
• Chery could pass up plants and other assets but seek to buy Dodge brand
• Chinese auto firms could be serious presence in US in as little as 3 years
• Chinese car companies have made clear their ambition to become global players
• Used acquisitions as means of acquiring new technology and marketing clout

• http://www.automotivedigest.com/view_art.asp?articlesID=21690

Sourced From: Washington Post, March 2, 2007; Financial Times, February 28, 2007

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Situation Ford Americas chief Mark Fields asserts determination to rescue Ford Fields admits setbacks in last 16 months of running Ford's core group Fields cites problems in shutting plants, reducing workforce, lowering dealer count Miscalculations about marketplace, demand for more fuel-efficient vehicles, haunt Ford

Mark Fields

• Fields returned to US in 2005 after decade of successful work w/ Mazda, Europe
• CEO Alan Mulally voices confidence in Fields as automaker misses several targets
• Fields determined to fix Ford, would have liked to have moved faster by now
• Ford's historic $12.7B loss last year blamed heavily on Americas division

• http://www.automotivedigest.com/view_art.asp?articlesID=21628

Sourced From: Detroit Free Press, February 25, 2007

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Situation R L Polk reports hybrid-vehicle sales rose 28% from 2005, to 254,545 units Increase is 2nd-lowest year-over-year increase since 2000--Toyota in lead Toyota Prius continues to be top hybrid seller, then Highlander, then Honda Civic

• In mid-2006, Polk conducted survey of 700 consumers regarding hybrid viewpoints
• CA leads other metro areas in hybrid-vehicle registrations w/ 22.3%
• Most Americans familiar w/ hybrid tech see it as alternative to high gas prices only

• http://www.automotivedigest.com/view_art.asp?articlesID=21647

Sourced From: R.L. Polk, February 26, 2007

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Situation Sonic Automotive reports 9.5% spike in 2006 revenues Total year's revenues of $7.97B include record 54% from luxury brands Net income plunges 11.6% to $81.1M, reflects loss from discontinued dealerships 4th Q showed net income up, to $23.2M, on revenues of $1.95B, 6.5% gain

• Sonic president/CEO Jeff Rachor: continued progress on maintaining margins, cost control
• Sonic's 159 stores boost new-vehicle sales 6.2% to 156,247, 15,517 were fleet
• Sonic also reports used-vehicle sales rose to 66,891 or 8.8%
• Sonic keeps tight lid on inventory of new vehicles after last year's stock run-up

• http://www.automotivedigest.com/view_art.asp?articlesID=21651

Sourced From: Sonic Automotive Press Release, February 27, 2007

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Situation Autobytel survey shows interest in Toyota Tundra on the rise among customers planning full-size truck purchase 26% say will buy new Tundra Crew Max Compared w/ 20% who intend to buy Ford F-150, and 19% planning to buy Chevy Silverado or GMC Sierra Only 5.5% of respondents plan to buy Dodge Ram Autobytel said reliability primary reason given for choosing Toyota over trucks from Detroit-3 Survey also showed decreasing loyalty to trucks made by Detroit-3

• Vehicles from Detroit-3 accounted for 91% of 2.2M full-size trucks sold in US last year
• 39% of respondents said have "been and plan to remain loyal to a specific Big-3 brand"
• 12% said were loyal to an import brand; 21% not loyal to any brand
• 15% said "loyal to domestic trucks or brands, but more open to imports for their next purchase"
• Toyota plans more marketing emphasizing Tundra is "made in America for Americans"

• http://www.automotivedigest.com/view_art.asp?articlesID=21659

Sourced From: Auto Remarketing, February 26, 2007

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