Archive for August, 2009

Shipping used cars by train

  Niche business branding targets commercial auto traders. What’s in a name? Union Pacific Railroad thinks a more direct branding plan can help it boost revenue by putting more used cars on its trains. Changing the name of both a subsidiary and a Web site to “ShipCarsNow” from their previous, less focused name “Insight Network Transportation,” UP wants to do for the used-car market in cross-country shipments what the rail industry already does for new-car hauls. “Nearly 20,000 U.S. auto dealers already receive new vehicle shipments from manufacturers by an efficient intermodal rail and truck network,” the carrier said in a statement explaining why it was adopting a hard-to-miss brand name. “Until now, this network has not been readily available to used car shippers. ShipCarsNow was formed by Union Pacific to open up this robust transportation network to the remarketing and fleet industries.” If it …

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GM has increased expectations for their existing dealers

  General Motors Co. dealers who survived the automaker’s bankruptcy were told Friday they will have to average higher sales and spend more updating their facilities. Some will also have to get used to selling smaller, more fuel-efficient and better-equipped vehicles than during the industry’s SUV-crazy heyday. GM executives met with 430 dealers from around the Midwest at the Rock Financial Showplace as part of a nine-city tour to discuss the future of the automaker’s four core brands: Chevrolet, Cadillac, Buick and GMC. The dealer tour began as GM said it expects to see U.S. auto sales increase 15 percent next year to about 12.1 million vehicles because of renewed consumer confidence in response to government stimulus programs. Speaking on the sidelines of the dealer meeting, Brent Dewar, Chevrolet vice president, told reporters the company expects “to see a modest recovery in …

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Honda Formula One engineers redeployed to tackling fuel efficiency for mass-produced cars

  Honda Motor Co.’s withdrawal from Formula One racing in December to save money may give it an advantage over rivals: fresh blood from an elite cadre of engineers to improve its Civic compacts and Odyssey minivans. The automaker reassigned the racing team’s 400 engineers to speed up development of new technologies to improve fuel efficiency and emission levels for mass-produced cars. “F-1 was all about pursuing the best energy efficiency to achieve speed,” Kazuo Sakurahara, who led Honda’s team of F-1 engineers, said in an interview at the company’s research center in Tochigi prefecture, north of Tokyo. “In that sense, the approach to our new job is exactly the same as it was then.” Honda is boosting the brainpower of its research and development team as automakers hasten to meet stricter pollution regulations by moving away from cars powered solely …

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GM, Ford, and Chrysler’s future plans a work in progress

  For the American auto industry, the now successfully completed bankruptcy filings may seem like child’s play compared with the gargantuan task of mapping out the future of individual brands. Those brands will face an obstacle course of consumers more skeptical than ever that domestics are worth bothering with. And many are still furious that General Motors and Chrysler took taxpayer-backed loans to keep from closing their doors forever. Meanwhile, Toyota, Honda and Nissan may suffer from falling sales, too, but they are not exactly rolling over and playing dead. Each has a slew of new models coming that will make life difficult for domestic brands. So how should domestic car companies respond? It will be a long process that will have to be done one vehicle at a time, said Gary Dilts, senior vice president of global automotive operations at J.D. Power and Associates. “They …

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New car sales expected to increase 18% in August

  New-vehicle sales are expected to increase 18% in August from July in the U.S. on the popular “Cash for Clunkers” government program, but still remain down 6% from a year earlier, according to Edmunds.com. But the car-shopping Web site said sales are tumbling as the month comes to an end, with senior analyst Jessica Caldwell saying that “does not bode well for September.” In addition, inventories are near historic lows as the annual sales rate for cars fell slightly below 10 million the first half of the year, prompting widespread production cuts and stoppages. Sales bounced up in July as the last week of the month was boosted by “Cash for Clunkers.” Such sales ended this past weekend, and Caldwell put the current annual sales rate at around 8 million from 15 million earlier this month and 19 million when “Cash for …

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Almost 700,000 used cars were traded in during the Cash For Clunkers program

  The so-called “Cash for Clunkers” program has come to an end, with more than 690,000 clunkers traded in and $2.88 billion in rebate applications submitted by the deadline, according to the U.S. Department of Transportation. Congress approved $3 billion to run the program. Eighty-four percent of participants traded in trucks and 59 percent purchased passenger cars. The average fuel economy of the vehicles traded in was 15.8 mpg and the average fuel economy of vehicles purchased is 24.9 mpg – a 58 percent improvement, according to the DOT. Cars made in America topped the most-purchased list, from the Ford Focus to the Toyota Corolla to the Honda Civic. “American consumers and workers were the clear winners thanks to the cash for clunkers program,” said U.S. Transportation Secretary Ray LaHood. “Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to …

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‘Cash for Clunkers’ a huge success with over $20 billion in new car sales

  The avalanche of potential new-car sales that took down the government’s computers in the final hours of its “cash for clunkers” program Monday is evidence of the program’s overwhelming success. The program leveraged $3 billion in clunker rebates into $20 billion-plus in new-car sales. That far exceeded the initial goals for what is arguably the most successful of the government’s recent economic-stimulus programs. “It’s been absolutely fantastic,” said Scott Gruwell, general-sales manager of Courtesy Chevrolet in Phoenix. The clunker program boosted Courtesy’s sales by 60 percent and prompted the dealer to hire additional employees to keep up with demand. But with the outward success come other concerns that the program may have pulled a year’s worth of sales into a month and that demand will shrivel for the rest of the year. Dealers have been frustrated because of paperwork issues and slow payments from …

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Demand for used cars is high while supply is low

  Morrie’s Automotive Group Inc. has only $6 million worth of used cars available for sale at its eight Twin Cities dealerships, two-thirds less than it had a year ago. Demand is relatively high for used cars, but declining supply and the corresponding rise in prices are making it difficult for Minnetonka-based Morrie’s and other local dealerships to purchase enough vehicles to keep their lots fully stocked. “That’s probably one of our biggest challenges right now — acquiring inventory at what we consider a reasonable price,” said Morrie’s Chief Operating Officer Karl Schmidt, who estimated that his company is paying an average of 10 to 15 percent more for used cars than it did a year ago. Used-vehicle values have risen for seven straight months due to decreased supply, according to the most recent Used Vehicle Index from Atlanta-based Manheim Consulting, which operates auto …

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Used car dealers happy to see “Cash for Clunkers” program officially ended

  Cash for clunkers is on its way out, which is a relief for some car dealers. The popular program has cleared dealer inventory across America, but it wasn’t good news for everyone. The rules only allowed customers to buy new cars, so many used car dealers saw a decline in sales. The program’s nearing its end and that has used car dealers hoping their sales will turn around. The sign on the window reads “open,” and the lot is full of cars ready to be purchased, but there aren’t many customers stopping in to M&M’s Auto Sales to buy, because cash for clunkers doesn’t apply there. Mel Strong, M&M Auto Sales, Inc.: “Traffic has gone down.” Mel Strong owns the used car dealership. He says his business has been hit hard by the slow economy. Mel Strong: “It’s hurt us.” And he says the …

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GM to sell first batch of Chevy Volts on eBay

  With initial demand for the new Chevrolet Volt likely to outstrip supply, General Motors has approached eBay with a view to selling its first batch of cars on the auction website. It is thought that the Volt may be sold at a small loss per unit to begin with, as the development and technology equipment costs on the electric car are high in comparison to a conventional vehicle. However, with massive interest in the new electric car, GM reckons it could potentially benefit from bidders upping the price via the auction website to be among the first owners. Reports suggest that a trial bidding system could be implemented for Californian buyers, traditionally keen to try out the latest ‘green’ machines. Amid GM’s financial woes, the company has continued to push the development of the innovative Volt forward and prototypes are currently undergoing pre-production testing, …

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