Monday, June 30, 2008

The Detroit News, June 28, 2008

Automotive News, June 27, 2008

=========================================Advertisement=========================================

Situation Power Information Network analyzes retained values for 3-year-old vehicles Vehicles sold in May 2005 valued at 56% of original purchase price That's down 3% from last May PIN also says Toyota Prius has quickest retail turn rate at just 4 days Followed by Honda Civic Hybrid, 10 days, Honda Fit, 11 days

2006 Honda Fit 4dr Hatchback

• Officials cite soft market for decline
• Noted that domestics declined but still lower than national average
• Honda, Toyota slightly up; Nissan slightly down
• Korean automakers improving but still below average
• Industry average retail turn is 57 days, just 1 day quicker than last year

• http://www.automotivedigest.com/view_art.asp?articlesID=24693

Situation Imploding pickup market giving automakers truckload of trouble they never imagined Ford and GM underscored the collapse last week by pushing back updates of full-size pickups Ford will delay rollout of redesigned F-150 by at least 2-months GM halted work on next-generation Silverado; diverted engineers to car programs Deep incentives, from $4,226 on Toyota Tundra to $5,897 on Dodge Ram 1500 Chrysler will go ahead w/ planned Sept rollout of new Ram pickup

2009 Ford F-150

• Market share of pickups fell in May to 9.3% of new vehicle sales vs. 18.6% in July 2005
• Shoppers w/ pickups more likely to owe more than it's worth
• Dealers, already awash in used pickups, aren't inclined to offer much for them
• To sell trucks, automakers offering deep incentives
• Longer-term prospects for pickups better than for truck-based SUVs

• http://www.automotivedigest.com/view_art.asp?articlesID=24699

Situation High gas prices spur sales of compact cars Many still question safety of small cars Automakers making big strides in safety improvements But numbers show occupants still not as protected as in larger vehicle

2008 Smart Fortwo

• Death rate for drivers of small cars at 106 per million vehicles
• Down from 165 10 years earlier but on par w/ deaths in full-size trucks
• Safest category: large sedans w/ 41 deaths per million vehicles
• Total of 32,092 deaths recorded in 2006; most were drivers
• Automakers improving crash worthiness of small cars
• 14 of 17 top-selling small cars get "good" frontal crash-test ratings from IIHS

• http://www.automotivedigest.com/view_art.asp?articlesID=24712

Situation Consumers interested in hybrid-electric powertrains both before and after average market price ($5,000) revealed, according to JD Power survey Study finds before market price revealed, 72% "definitely/probably" interested in having hybrid-electric tech in next new vehicle Considerable increase from 2005 study, when 58% said they were interested in the technology After average price point of $5,000 revealed, consumer interest remains relatively high at 46% in 2008

• Clean diesel technology has relatively low interest in comparison, may derive from lack of education w/ technology
• Study also finds interest highest for blind spot detection (76%), backup assist (74%), navigation systems (73%)
• After revealing average market price, interest is highest in backup assist (68%), active cornering headlight systems (65%), wireless connectivity systems (53%)
• Wireless connectivity had considerable jump in rankings after average price of $200 revealed; interest heightened as more states may prohibit use of cell phones while driving

• http://www.automotivedigest.com/view_art.asp?articlesID=24706

Situation Consumer demand for pickup trucks and SUVs plummet due to record gas prices Weak sales, high fuel prices and sluggish economy hurting automakers High steel prices adding to commodity cost for struggling automakers Fitch Ratings cut GM's and Chrysler's ratings from "B" to "B-" w/ poor outlook Review of Ford and Ford Credit over next 6 weeks could result in their downgrade Standard & Poor's also may downgrade the 3 companies

• GM and Ford stock and bond prices rose slightly June 25th
• Had suffered heavy losses earlier in month
• Additional restructuring needed at GM
• Ford Credit may be headed for "CCC" rating, dragging parent company down w/ it

• http://www.automotivedigest.com/view_art.asp?articlesID=24717

Situation GM 72-Hour Sale featured 0% financing for up to 72 months on select 2008 models Offer only available for qualified buyers 0% offer not combinable w/ other existing GM incentive programs Strategic marketing activity to continue sale momentum around holidays

2008 Chevy Tahoe

• Sale includes multiple models from Chevrolet, Buick, Pontiac, GMC, Cadillac, Hummer, Saab and Saturn
• Sale doesn't include 2007 and 2009 model-year units or hybrids
• Other manufacturers offer similar sales

• http://www.automotivedigest.com/view_art.asp?articlesID=24707

Situation Ford rumored to be in negotiations w/ Chinese company Shanghai Automotive to sell Volvo A Russian investor is also rumored to be interested in Volvo But Ford claims that Volvo is not for sale Volvo sales good in Europe, but face challenges in the US In related news, Volvo announced that it will cut 2K jobs

• Volvo cutting 1,400 white-collar jobs and 600 blue-collar jobs
• Ford investor Kirk Kerkorian has said he'd like to see the company rid of Volvo
• Ford purchased Volvo for 50B Swedish crowns in 1999
• Volvo currently asking unprofitable US dealers to leave the brand

• http://www.automotivedigest.com/view_art.asp?articlesID=24713

Situation Chrysler tapped a $2B line of credit from owners Cerberus and Daimler Move designed to boost company's liquidity in midst of a nightmarish sales downturn Action had been expected Chrysler's market share falling dramatically w/ few fuel-efficient vehicles to offer Company hasn't said what the money will be used for Chrysler says currently meeting or exceeding financial targets despite considerable challenges

• $2B loan required in agreement w/ Daimler and Cerberus
• $1.5B will come from Daimler, w/ remainder coming from Cerberus
• Chrysler's small and midsize cars represented 5.2% of US passenger-car segment in May
• Cars represented 28% of Chrysler's May sales, w/ remainder being trucks, SUVs, minivans
• Moody's Investors Service lowered outlook on ratings for Detroit-3 last week, citing liquidity concerns

• http://www.automotivedigest.com/view_art.asp?articlesID=24710

Situation California unveils plan to fight global warming, reduce emissions Aims to reduce pollutants by 10% from current levels by 2020 Also has goal of driving investments in energy technologies Other parts of country, even world, may follow lead Governor Schwarzenegger supports plan

• Plan calls for cap-and-trade program on CO2 emissions
• Buildings, appliances would be required to use less energy
• Oil companies make cleaner fuels; utilities use more renewable energy
• Also more hybrids, hydrogen-fuel vehicles
• Critics say plan is costly, may drive out manufacturing; some prefer more nuclear
• Officials say overall benefits should help state's economy by 1%

• http://www.automotivedigest.com/view_art.asp?articlesID=24720

Situation High oil prices killing demand for light truck products of Detroit automakers Weak dollar making problem worse Even Toyota caught off guard opening V8 pickup plant in San Antonio GM, Chrysler and Ford all likely to need infusion of cash despite drastic restructuring

• Big 3 better off now than 2005, 1991, 1979 or 1974 to handle current economic downturn
• Were more heavily encumbered by costly, inflexible labor agreements in 2005 than today
• Product mix includes more cars and crossovers today than 2005

• http://www.automotivedigest.com/view_art.asp?articlesID=24727