Archive for September, 2008

Big Three Dealerships face tightening credit from Auto Makers

  The finance arms of Detroit’s Big Three auto makers are selectively tightening credit to many financially strapped dealers, making it harder for consumers to get loans, particularly for new cars. The credit squeeze is likely to ram down the brakes on already tepid new auto sales because auto dealers use a large chunk of this funding to stockpile new cars. At the same time, it also offers an opportunity for Chrysler Financial, GMAC LLC and Ford Motor Credit to whittle down their bloated retail networks as they struggle to shore up capital. “Given the credit crunch and problems of funding, these lenders will turn up the heat on dealerships,” says Jerry Breen, a senior director at ABSNet. ABSNet is a data provider for structured securities, including those made up of loans by auto finance companies to their dealers. “The harder it is for dealerships …

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Certified Used Car Sales Up

  Auto sales and economic conditions are on the upswing, provided you’re talking certified used automobiles. In a year when new vehicle sales could settle below 14 million, the lowest in almost a decade, certified used sales are up 2%, through August, per Autodata, Woodcliff Lake, N.J. Comparatively, new vehicle sales are down 11.2%.   More than 40 million used vehicles are sold every year in the U.S., from the in-family transfer for $1 to the 1.7 million units that will be sold as certified used vehicles this year. Add to that the fact that several automakers, including Ford and General Motors, earlier this year scaled back their leasing programs, and the market for used is very strong. “There are a lot of people who right now just can’t afford a new vehicle,” said Jim Hossack, vp at industry consultancy AutoPacific, Tustin, Calif. “And there …

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Auto Industry Hit Again – this time by tightening Credit Markets

  The troubles on Wall Street are clobbering the car lot on Main Street, with automakers and dealers saying tougher credit requirements are knocking potential buyers out of the market at a time when the struggling industry can least afford it. At AutoNation Inc., the largest U.S. dealership group, tougher credit requirements from banks and finance companies — and limits on money to fund leases — have cost the 250-store chain 20 percent of its sales volume so far this year, CEO Mike Jackson said. “It’s a huge problem,” Jackson said in a recent interview. “The volume of the industry for both manufacturers and retailers is being dramatically restrained by credit. Sales are far below demand and far below trend.” Customers are having trouble getting loans, and if they do qualify, they are paying higher interest rates. That’s forcing the whole U.S. industry to lower prices …

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Pickup truck sales in August were the highest they’ve been all year

  Despite a long, hot summer of uncertainty – when sales fell 30 percent because of $4-a-gallon gas – pickups will again take center stage at the State Fair of Texas today.Dodge will prominently display its 2009 Ram pickup, including a Lone Star edition of the all-new truck, when the fair opens this morning. Ford, meanwhile, will show its 2009 F-150 pickups, as well as a new model of the big Super Duty called the Cabela Edition. Trucks still matter. Both companies are far more optimistic now about the critical pickup segment – the domestics’ largest source of profit – than they were just 90 days ago. “For the time being, we have hit bottom,” said Mark Fields, president of Ford Motor Co.’s Americas division. “We’ll see some variations in sales from fuel costs. But I don’t think we’ll see the big swings …

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Compressed Natural Gas could be the primary fuel for future vehicles

  Toyota is taking a fresh look at compressed natural gas as a power source for U.S. automobiles, and plans to unveil a Camry Hybrid concept car powered by the fuel at the Los Angeles Auto Show in November.Toyota officials made the announcement Tuesday at a sustainability forum in Portland, where they said the abundance, pricing and clean-burning properties of natural gas could make it an attractive fuel in an era of tightening oil supplies and increased regulation of automotive emissions. Irv Miller, a Toyota Motor Sales group vice president, said compressed natural gas could become a “prime energy source for the future.” Back in 1999, Toyota marketed a CNG-powered four-cylinder Camry as a fleet vehicle to some California customers. But the program - at a time of much lower oil prices - did not catch on and was discontinued later. The United States now has …

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Chrysler to develop a full lineup of electric vehicles

  Chrysler looked like its old, scrappy self Tuesday in announcing ambitious plans to develop a full lineup of electric-drive vehicles, one of which it says will be ready for sale by the end of 2010. The move immediately and surprisingly puts Chrysler in the race to develop an electric car along with General Motors Corp. and others by 2010 and gives the Auburn Hills automaker something exciting to talk about after a year of dramatically scaling back its business. The announcement also comes as Chrysler, GM and Ford Motor Co. are lobbying the U.S. government for at least $25 billion in loans to help retool so they can make more fuel-efficient vehicles. Unlike GM’s Chevrolet Volt, Chrysler is working on range-extended electric vehicles based on current models – the four-door Jeep Wrangler and the Chrysler Town & Country minivan. In addition, Chrysler is proposing …

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McCain draws criticism for owning multiple vehicles

  First it was his seven homes. Now John McCain’s ‘man of the people’ image has been dented by the revelation that he owns 13 cars. The 72-year-old Republican White House hopeful was last night accused of being out of touch with ordinary Americans. His Democratic rival, Barack Obama, owns just one vehicle. Mr McCain also came under fire for ‘flip-flopping’ on the financial troubles of the U.S. Just a week after saying ‘the fundamentals of our economy are sound’, he was forced to admit: ‘We are in the most serious crisis since World War Two.’ Earlier this month, the Arizona senator admitted he couldn’t remember how many homes he owned with wife Cindy, who is the heiress to a brewery fortune. Yesterday, he revealed the existence of a fleet of cars that makes John ‘Two Jags’ Prescott sound positively frugal. The McCains own three foreign cars – …

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Some Important Facts When Looking for a Used Car

  Buying a used car may seem like a simple topic. But when you begin slicing and dicing the various possibilities among approximately 3.3 million vehicles that are for sale at any given time, interesting insights into consumer preferences begin to emerge. For Krista Glotzbach, director of marketing at Vast.com, the San Francisco, California-based aggregator of data (which provides used vehicle search data for AOL Autos), the various permutations are nearly endless. But users shouldn’t worry because, with the help of search filters, vehicle fashion statements (what color do you want) and budgetary considerations (what price range do you want) easily come to the surface for faster used car searching. Because Vast.com has a variety of sources for its data, including Web “crawls” (an automated Internet search for used vehicle information), the data is, by definition, revealing in its own right. But industry player CARFAX, which …

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Average fuel economy for 2008 model vehicles highest in 25 years

  US average fuel economy for 2008 model autos may be the best since 1993 as consumers buy fewer light trucks and manufacturers build more-efficient vehicles. The projected rate of 20.8 miles per gallon is 0.2 mpg better than in 2007, the Environmental Protection Agency said yesterday. The figures, intended to reflect real-world driving, differ from Corporate Average Fuel Economy rules automakers must meet. Buyers’ switch to cars instead of trucks is being driven by gasoline prices that reached a record $4.11 a gallon in July. Cars accounted for 52 percent of US new-vehicle sales through August, compared with 47 percent a year earlier, according to Autodata Corp. in Woodcliff Lake, N.J. “It is extremely likely that the projected fleetwide average” for 2008 is too low, the EPA said. “This value is based on . . . projections made by automakers at a time …

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Financial Crisis has Toughened New Vehicle Loan Terms

  U.S. auto sales were hobbled in the first half as gasoline prices jumped to record highs. Now, a financial crisis that pushed Lehman Brothers Holdings Inc. into bankruptcy has toughened new-vehicle loan terms and may further depress sales.“The panic over fuel prices this year brought the quickest shift from trucks and SUVs to cars I’ve ever seen,” said Dave Zuchowski, vice president of sales for Hyundai Motor Co.’s U.S. unit, in an interview yesterday. “The new story is access to credit. That will impact us more in the second half.” U.S. auto sales dropped 11 percent through August from a year earlier, putting the industry on course for its lowest volume since the early 1990s. A Lehman report, issued last month before the company’s collapse, estimated that tighter auto- lending standards in the second half may cut sales by as much …

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