July Auto Sales

U.S. auto sales appear to be improving substantially in July. Overall auto sales for July were down only 12% percent, with June down 28% and May down 39%. So, it appears that the sales trend is improving substantially.

It appears that the U.S. based automakers and some foreign manufacturers are having a rebound in sales....helped by the Cash For Clunkers program. Meanwhile sales of luxury cars are still in the dumps. ales were the best they have been since the summer of 2008....with a annual run rate of over 10 million cars.

Ford is the sales winner with a 2% increase in sales over last year. GM sales were down 19%, meanwhile Chrysler sales were down only 9.4%. An interesting fact is that GM and Chrysler sales were not impacted by the bankruptcies as much as anticipated.

• Saab down 72%

• Porsche down 51%

• Mitsubishi down 50%

• Jaguar down 45%

• BMW down 32%

• Nissan down 25%
  

• Mercedes down 22%
  

• Mazda down 15%

• General Motors down 19%

• Honda down 17%

• Toyota down 11%

• Chrysler down 9%
  

• Volkswagen down 3%

• Ford up 2%

• Kia up 5%

• Hyundai up 12%
  

• Volvo up 26%

• Subaru up 34%

Ford seems to be the beneficiary of increased sales lately. It appears that the GM and Chrysler bankruptcies have sent a number of customers over to Ford. The following Ford models had material increases in sales Focus up 44%, Escape up 94%, and the Fusion was up 66%.

Other notable increases were posted by the Toyota Prius up 30%, Toyota RAV4 up 33%, Hyundai Elantra up 30% and the Volkswagon Jetta up 31%.

July sales were up at a fairly decent run rate of 11 million cars annually. So, it appears that consumers had more faith in the future to spend money on high ticket items.

SUMMARY:

This month the Cash For Clunkers program had a substantial impact on auto showroom traffic and sales. Unfortunately, the government implemented a half way program. Increasing sales for the automobile manufacturers would do more than all the government loans available.

An interesting anomaly is that sales of U.S. built cars both by domestic and foreign manufacturers appears to be increasing. Meanwhile imported luxury cars continue with the steep declines over last year.

Ford Sales Increase Due To Bankruptcies

Here is an interesting article on the American psyche.....it is interesting to see people's perceptions. Based on a survey released today from Rasmussen Reports....46% of Americans are more likely to by a Ford than vehicles from GM or Chrysler. The reason is that Ford did not take bailout money from the government. Apparently, there is a lot of resentment against the bailout.

The latest sales report for June substantiates the survey. Ford sales were down only 11% and GM sales were down 33% and Chrysler down 42% respectively. GM was in the midst of the bankruptcy during June so that may have had an impact on the survey. Chrysler had already come out of the bankruptcy.

One issue not addressed in the survey is that Ford quality has been continually improving over the last few years. In addition, they have brought out some very competitive cars like the Fusion Hybrid, Taurus and the Mustang. So, both quality and competitive cars could be part of the increase sales.

Personally, I was incensed the way that Chrysler closed 789 dealers giving them a minimum of notice...whereas GM gave their dealers that they were closing over a year to wind down the business. Closing that many dealers in the month of June may have impacted Chrysler sales in that month.....so we will see how this trend continues.

In fact, there were a number of people and organizations that were burned by the bankruptcies. The worst were people that had been severely hurt by vehicle malfunctions that now do not have much recourse since GM and Chrysler have gone into bankruptcy. I will be doing a future post on the damages inflicted due to the bankruptcies.

Another interesting fact is that 41% of Americans expect the quality of GM cars to get worse now that the government is the majority owner.


SUMMARY:

I don't necessarily agree with all the perceptions that have been outlined by the Rasmussen survey. I did not like the fact that GM and Chrysler had to be bailed out...but I viewed it as the only scenario that would work to save a number of jobs and deepening an extremely severe recession.

I hope that the government will stay out of GM and Chrysler management. In two or three years, the economy will be rebounding and auto sales will be increasing materially. I suspect that the GM will prepare a stock offering and the government will be out within a couple of years after that.

2011 Ford Fiesta

Today's post is about one of the most successful global cars produced with over 10 million sold.....the Ford Fiesta. The Ford Fiesta is a small front wheel drive super mini car designed by the Ford Motor Company. The Fiesta is build in Europe, and seven other countries and marketed thru out the world. The Fiesta has not been sold in the U.S. until the 2011 model is introduced to the U.S.

Ford is currently the small car leader in Europe and the automaker’s design studios developed the next generation Fiesta in concept is called the Verve sedan and hatchback.

Ford has been producing the European designed Fiesta for a number of years...the current version is very popular in Europe. So, they are finally bringing the Fiesta to the U.S. Ford is changing production at it's Cuautitlan, Mexico, plant from assembling Ford F-150 pickups. Production is scheduled to begin in early 2010.

Ford has a made a corporate decision to focus on manufacturing small cars rather than pickups and SUV's. Many auto writers have complained over the years that Detroit had virtually ignored the car market to focus on pickups and SUV's....the danger being that if energy prices skyrocketed it would substantially expose the auto companies financial health. The energy crisis of last summer emphasied that Detroit's strategy was foolhardy and extremely subject to fluctuations in the price of fuel.

The sedan was always a given for this market, but the automaker was gauging public reaction to different body styles of the Verve concepts shown at past auto shows to determine interest in the five-door hatch—the three-door hatch shown will probably not be produced for the U.S.

We also waiting on the details on the powertrain, which has been described only as a fuel-efficient four-cylinder of undisclosed displacement and performance. Pricing has not been announced but it is thought that the Fiesta will be priced with the Ford Focus.

Ford also says it is adding a new diesel engine line at its Chihuahua engine plant in Mexico that already makes inline-four-cylinder gasoline engines. The diesels will be used in light and medium-duty trucks globally, including Ford’s first diesel application for the 2010 F-150.

SUMMARY:

The Fiesta is a high end small car which is very popular in Europe. The question is that are Americans going to pay a higher price for a quality small car. It may take a while to catch on but my thought is that they will.

Currently, Americans pay a premium for a BMW, Audi or Mercedes small cars...which are luxury autos. My thought is that as gasoline prices increase....this will not only be a highly successful small car but highly regarded.

Auto Sales for May

U.S. auto sales are still down 39% versus a year ago, which is still a substantial decline. It appears that the U.S. based automakers are having a rebound in sales with the exception of Chrysler. Sales were the best they have been since the summer of 2008....with a annual run rate of 1.1 million cars.

Ford and GM sold more cars in May and cut the downward spiral sales for the month. During April, Ford and GM sales were down 32% and 35% respectively. An interesting fact is that GM declared bankruptcy during May but their sales were up from the prior month. Meanwhile, Chrysler stayed down 47% for both months.

Mitsubishi down 58%
Chrysler down 47%
Honda down 42%
Toyota down 41%
Mazda down 40%
Nissan down 33%
Mercedes down 31%
General Motors down 29%
BMW down 28%
Ford down 24%

Volvo down 23%

Hyundai down 20%
Volkswagen down 16%
Kia down 16%
Subaru down 5%

It appears that new products were the reason behind the twenty percent increase in sales over April. The Ford Fusion, Ford Flex and the company's hybrids set sales records. In addition, two new Lincoln sedans the MKZ and the MKS helped Lincoln post a 2% increase.

Ford's Fusion set a record of 18,321 cars breaking into the top three mid-size sedan market for the first time since July 2002. The Ford Fusion and Mercury Milan have the best predicted reliability among all mid-size sedans. The Japanese brands have dominated the mid-size segment with the Toyota Camry and the Honda Accord.

May sales were up at a fairly decent run rate of 1.1 million cars annually. So, it appears that consumers had more faith in the future to spend money on high ticket items.

An interesting anomaly is that sales of Japanese brands continue with the downward spiral meanwhile U.S. manufacturers seem to be improving. We will have to monitor to see if that is a trend that will continue!

Ford Posts $1.4 Billion Loss

Prior posts have brought up the precarious state of the auto industry in the the U.S. and the world. Ford announced yesterday that it lost $1.4 billion dollars for the first quarter of 2009. OK, that is a huge number for any corporation!

Ford stock was up 11% percent yesterday on the news. Wall street had been expecting a larger loss based on the first quarter severe downturn of 37% in sales from 2008. So, Wall street voted with their pocketbooks and purchased the stock based on perceived positive news.

Ford CEO Alan Mulally has turned around the company since joining in the company in 2006. One of his first major moves was to obtain $23 billion bank loans in 2006. He had to mortgage every asset the company owned including the Ford blue oval.

Since Ford was able to obtain financing in 2006, they have been able to weather the financial crisis much better than GM and Chrysler. Mulally had the vision to know that if times were tough that cash is king. His financial acumen is paying huge dividends now...Ford has not needed a government bailout. Ford currently over $21 billion dollars in cash! They project that they have sufficient funds to go thru 2010 without any additional government support.

My take on this is that Mulally has done a superb job at Ford! They have not had to beg for government money...instead they can focus on getting to profitability.

There are two potential problems! First, if GM or Chrysler file for a chapter 11, that may negatively impact some of the automobile suppliers which could possibly disrupt Ford's ability to produce cars. A Chrysler bankruptcy appears eminent at this time! Second, if sales continue at this negative pace or get worse then they would require governmental assistance in 2011.

Check out the article written by Ken Bensinger of the LA times!

Ford Mustang GT

The new and revised Mustang has to be one of the best new models that Ford will introduce for 2010. A really hot pick out of their offers is the Mustang GT. The automobile magazines think it is the best Mustang every, probably the best out of the new muscle cars Chevrolet Camaro, Dodge Challenger and the Hyundai Genesis Coupe. The Mustang has been in production in various forms since 1964, that is one of the longest production runs of any model. Besides the coupe a convertible version is available also.

The chief designer of the 2010 Mustang is Doug Gaffka, who was responsible for the 2008-2009 Bullitt and other Ford vehicles. The new Mustang's exterior is an evolution of prior Mustang...sculpted for a leaner, more muscular look with better aerodynamic performance.

The Mustang's interior styling has improved with higher quality interior surfaces, available real aluminum trim, and improved fit and finish.

The 2010 Mustang GT's 4.6 liter V8, has been revised to the same specifications as the 2008-2009 Mustang Bullitt's 4.6 L V8, with 315 hp. The performance statistics are impressive the 0-60 mph is 5.1 seconds, braking is exceptional at 70-0 mph.- 164 ft and the skidpad is .92. Take the new Mustang GT for a spin!

Options for the 2010 Mustang include Ford SYNC, which is an incredible system, dual-zone automatic climate control, an updated navigation system with Sirius, a capless fuel filler, and a reverse camera system to aid in backing up.

The 2010 Mustang will be scheduled for a launch date during the Spring of 2009.

Information provided by Wikipedia!

2010 Chevrolet Camaro SS

The last forth generation Chevrolet Camaro rolled off the production line in 2002, meanwhile the Ford Mustang continued in production since 1964. When Ford came out with the new "retro" Mustang in 2005, it started the "pony wars" all over again. Since then Chrysler has come out with a 2008 Dodge Challenger, and now Chevrolet will come out with the 2010 Camaro. The cars should be rolling into show rooms this Spring. See the Camaro SS video

Today's post is about a car that I believe will become a collectors car....the 2010 Camaro SS. The insignia SS stands for "Super Sport". The SS has two engine options the L99 V-8 with 400 h.p. or the LS3 with 426 h.p. With the LS3 motor, the SS 0-60 time is 4.8 seconds. Braking is exceptional at 70-0 of 161 feet, right in Corvette territory. The skidpad results in .92G, which is top of the class. Fuel economy is actually a decent for such a powerful muscle car 16/24...city/highway rating.

I am of the opinion that this car will be come a collectors car for two reasons CAFE, which is the Corporate Average Fuel Economy regulations that auto companies have to comply with. CAFE has been increased by the Obama administration, CAFE in prior years have killed off many of the muscle cars. The second issue is that if gasoline prices go above $4 per gallon for a consistent period, GM will cancel the higher output motors.

Pricing for the SS starts at $30,995, which is a bargain price for such exceptional performance! The price for a base V-6 with 304 h.p. is $22,995. I cannot wait to drive one! For more information go to the Chevy Camaro website.

I first viewed the 2010 Camaro as a concept car at the Los Angeles Auto Show in 2006. Wow, people were continuously lined up to see the new Camaro. Based upon that reaction, the car should be a popular seller! The question is will GM's precarious financial status turn off enough buyers of the new Camaro.

March Car Sales Are Up In Parts of The World

Government incentives are having an impact in various areas of the world for the month of March. Most of the increases are due to government programs to increase auto sales. Brazil auto sales are up 17% versus last March, the first increase in six months. Sales also rose strongly in France and Italy, with the decline slowing in Spain. China has just reported and sales are up 25% over last year. Germany has a new car for old car program in which almost a million people have taken advantage.

In Japan, the auto sales dropped 25% from last year, meanwhile Korean auto sales decreased by 19%. U.S. sales are still down substantially but by slightly lower number that in February.

• General Motors down 45%
• Ford down 41%
• Chrysler down 39%
• Toyota down 39%
• Nissan down 38%
• Honda down 36%
• Hyundai down 2%
  

GM is asking for $6 billion in aid from several countries, including Sweden, Germany, Britain and Thailand. German Chancellor Angela Merkel indicated that they need a viable restructuring plan before Germany considers any bailouts.

Many of the manufacturers think that the market may be bottoming and that we could start seeing sales increases by the end of the year. Share prices for the auto manufacturers increased today on speculation that the industry will start increasing sales. Toyota, Honda and Nissan were up 6 - 10% in trading in Tokyo.

GM and Ford Announce New Buyer Assurance Plans

I do not agree with many of the actions taken by President Obama, I applaud President Obama's actions with regard to the auto companies. He has acted boldly, swiftly and decisively. I did not vote for him but I have been impressed with his leadership ability. These are difficult times and it requires substantial actions to get us thru these difficult economic times. The banks and AIG should have been handled in a similar manner to the auto companies.

The same needs to said of the leaders of our troubled companies. Today, Fritz Henderson the new CEO for GM announced its "Total Confidence" program. The Total Confidence program will make up to nine payments for up to $500 if the buyer is laid off during the first year of ownership. Customers do have to qualify for state unemployment to be eligible for the program.The program appears to be testing the waters, since it is effective from April 1 thru April 30th.

Ford Motor Co. also announced a similar program Tuesday, which will take over customer's payment of up to $700 a month for a year in the event of job loss. The Ford program goes thru June 1st.

These programs are similar to the Hyundai's program which has limited severe declines in their sales via a creative incentive for its customers. Hyundai will cover a new vehicle's depreciation if customers return a car within 12 months because they are unable to make payments due to a job loss, disability etc. GM's U.S. sales declined 51 percent and Ford's U.S. sales were down 44 percent in the first two months of 2009, compared to a market that declined 39 percent overall. Hyundai's sales rose 5 percent over the period.

These type of programs directly impact buyers concerns about the future. Buyers lack confidence that they will have their jobs in a few months, so why would someone buy a car under that scenario. People are also concerned about buying a car from a bankrupt company.

My take is that the U.S. based companies need to be aggressive to reassure their buyers that they are going to survive and prosper. GM and Ford should have instituted these programs originally, not in reaction to Hyundai's program.

2010 Ford Taurus

Everyone reading my blog is familiar with the problems of the auto industry, specifically the American manufacturers. Ford is the only American company not going to the government well for a hand out! Mainly due to the foresight of Alan Mullaly, CEO of Ford, who arranged for lines of credit in 2007 when the capital markets were much better. In addition, Ford quality has improved substantially where they are on a par with the Japanese manufacturers.

Back in 1986 Ford set Ford's sales charts on fire with the new Taurus with a spacey stylish design. I was not a fan of the car in that I thought the styling was unusual and not to my preference. The drive was OK but unexceptional. Over the years the Taurus was downgraded to a rental car status.

Ford purchased Volvo in 1998 and one of the benefits was the Ford 500 which came out in 2005. The Ford 500 was underpowered and connected to a CVT transmission and did not sell well. The Ford 500 was based on the Volvo S80 platform and is one of the safest cars on the road. In 2008, the name was changed to the Ford Taurus and upgraded the powertrains.

I drove a rental 2008 Ford Taurus last summer when I was in New York city. My associate commented that he thought this was the one of the best American cars. It drove smoothly, handled well for a sedan and braked well!

The 2010 Ford Taurus is prime example of the quality car that American manufacturers are capable of producing. It has the 3.5-liter V-6 which makes 264 hp, which is connected to a six-speed automatic.. The Limited model comes with a different six-speed transmission along with paddle shifters.

They are resurrecting the SHO (Super High Output) model which is shown below. The SHO will have a twin-turbo, high output, twin-turbocharged 3.5 liter EcoBoost V-6 with an estimated 350 hp. That is a lot of power for a sedan!

Is This The BEST Muscle Car Ever?

The new and revised Mustang has to be one of the best new models that Ford will introduce for 2010. The pick of the litter is the Ford Shelby GT500. I can remember back in the late sixties The Ford Shelby GT500 was the hottest Mustang you could buy. Today Carroll Shelby is still working his magic with the 2010 model.

The Shelby GT500 has a supercharged 32-valve 5.4 liter V-8. The engine generates 540 horses of raw power and it is hand built by one technician at Ford's Romeo Michigan plant.

The cars appearance is an evolution of the current Mustang styling. It appears to be based on the 1968 Mustang but with a much bolder stance.

The car show is in Grabber Blue with red stripes. Wow!! This car is hot!! The pricing is expected to be $47-$49K. For more information go to Motor Trend. Enjoy!!

Can Detroit Build Hybrids?

Ford has hit a a big one over the fence with the 2010 Fusion Hybrid. This product has received great reviews from the automobile writers. The car is unexpectedly refined, gets great gas mileage and is fun to drive! This hybrid was actually developed in Dearborn with Ford technology. Ford's other hybrid vehicle the Mariner Hybrid uses a version of the Toyota Synergy Drive licensed from Toyota.

The Ford Fusion actually won a comparison test in Car & Driver versus the Toyota Camry Hybrid, Nissan Altima Hybrid and the Chevrolet Malibu Hybrid. Click here to see the full article in Car&Driver.

The American companies have made a number of major management mistakes over the last twenty years. My opinion is that should have been investing enough money in product development and research and development. That would have produced better cars allowing them to compete effectively. Instead they were purchasing foreign brands that now they are forced to sell at bargain basement prices. So,it is comforting to see them developing some good products.