Archive for December, 2009

Good used cars sell almost immediately

  ”I was just looking for something small for my 16-year-old daughter to start driving — something in the $4,000 or $5,000 range. But I couldn’t find anything,” Elgin business owner Pat Smith said. The first auto dealer he approached “had a huge old conversion van, and a Dodge Durango truck with 100,000 miles. I did a lot of Internet searching, too. “After a couple months, I finally found a car. But it wasn’t really what I was looking for. It was settling for what I could find,” Smith said. “A lot of people are looking for vehicles in the $10,000 price range and there aren’t many out there,” said Rachel Clark, a saleswoman at Feeny Chrysler-Jeep-Dodge in Elgin. “Any time we get in a decent trade-in worth about $10,000, it sells almost immediately.” John Fenzel, owner of Fenzel Motor Sales in Hampshire, said, …

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Used car inventories are shrinking and prices are up

  No matter how many times we’ve been told that the economy is getting better, the most recent Reuters/University of Michigan Index of Consumer Sentiment suggests that the public is not buying it. Coming in at an anemic 73.4 (although up from November’s reading), this is a long way from the 100 baseline that denoted consumer optimism in years such as 1985, which led directly into the first year in which U.S. car sales topped the 16 million mark. In forecasting U.S. car sales for 2010, most prognosticators set the mark only slightly higher than today’s level—from 11.2 to 11.5 million sales. The auto industry’s dynamics suggest that much higher volumes are attainable. For one thing, the momentum of the used car market—which most new car dealers have promoted to stay profitable over the past seven years—is undergoing a major reversal. …

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Now is the best time to buy a brand new Pontiac or Saturn

  News of General Motors’ aggressive discounting program for outgoing Saturn and Pontiac vehicles led to an avalanche of end-of-the-year businesses for GM dealerships — and consumers might be challenged to find the model they want. “I’m down to about 15 cars and it could be even less,” said Russ Shelton, owner of Shelton Buick-GMC in Rochester Hills. All of those, he added, were Pontiac G6s. GM is paying dealers $7,000 for remaining Saturn and Pontiac models in what amounts to a sweetened incentive aimed at clearing inventories of the brands that are being discontinued as part of GM’s post-bankruptcy restructuring. As of Nov. 30, Pontiac dealers had 8,500 vehicles in its U.S. stock, while Saturn dealers had 5,700, GM spokesman Tom Henderson said. The new incentive program plan, which is in effect through Jan. 4, allows dealers to sell the remaining 2009 vehicles as …

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Toyota bets on minivans coming back

  Toyota, sensing new respect for minivans and a looming rebound in their sales, will launch an updated Sienna in February, hoping to be the freshest minivan in showrooms if a renaissance kicks off. The conservative mainstream automaker’s investment in what has been a vanishing market segment is striking and contrary. Some car companies, in fact, have abandoned minivans and successfully replaced them with crossover-utility vehicles. Ford Motor, General Motors, Nissan and even Hyundai, which lately has had the Midas touch in the U.S., have axed vans recently. “We have no plans to re-enter the minivan business,” says Hyundai Motor America CEO John Krafcik. Only Nissan plans a replacement van at some point. The others have switched to crossovers. But a significant number of owners of the 12.6 million minivans on the road are ready for new ones, says Toyota U.S. Vice …

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Lamborghini sees auto industry rebound in 2011

  Lamborghini expects to post a roughly 35 percent slide in 2009 sales as the global economic downturn slams the brakes on spending from even the super-rich, with growth likely to pick up again only in 2011. Next year will remain challenging for the supercar maker, which is a unit of Europe’s No. 1 automaker Volkswagen AG, though bright spots such as China may help salve the pain. CEO Stephan Winkelmann said on Wednesday that Lamborghini was on track to end 2009 with about 80 cars sold in China — a sliver of the company’s annual 2,000-odd production but a market that should rank among its biggest in coming years. Lamborghini sold 70 cars in China in 2008. “It was tough, it’s still tough,” Winkelmann told Reuters in an interview in Los Angeles before opening the company’s first fashion and accessories boutique outside China. “2011 …

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The U.S. is no longer the world’s top car market

  DESPITE the bankruptcies, bailouts and plunging sales that quaked the auto industry this year, perhaps nothing sums up the misery better than this: The United States is no longer the world’s top car market. As 2009 draws to a merciful end, J. D. Power & Associates estimates that the Chinese will end up buying 12.7 million vehicles, compared with Americans’ 10.4 million purchases. How much has the market contracted? Consider that in 2000 United States sales reached an all-time high of 17.4 million. The slippage came despite an unprecedented effort to assist those who make and sell cars, including the summer cash-for-clunkers program that doled out $2.9 billion in government rebates to spur sales of 690,000 new cars — while taking that many guzzling older models off the streets. Despite that program’s temporary jolt, nearly 1,500 dealerships had shut their doors through …

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Luxury car buyers are back but spending less for the holidays

  This holiday season, the luxury car buyer is offering a simple phrase: I’m not spending too much. Wealthier shoppers are trickling back into showrooms after staying away much of the year. But there’s a catch. Many are pinching pennies, sort of, by choosing smaller BMW and Mercedes models, or they’re buying top-of-the-line cars from cheaper brands. This year, almost 14 percent of luxury buyers replaced old vehicles with brands other than traditional high-end names such as Audi, BMW, Cadillac, Infiniti, Jaguar, Lexus, Lincoln, Mercedes and Porsche. That’s up from just 4 percent in 2006 and a reminder that these buyers still don’t feel as wealthy as they once did. Home values are still down and portfolios shrunken, despite the stock market’s gains this year. Two potential beneficiaries of the shift are Buick and Hyundai, brands offering luxury models that are much cheaper than …

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Who is the car company trying to save Saab

  One Swedish car maker down and another to go. With Chinese auto maker Geely Holding Group sealing its deal to acquire Volvo from Ford Motor for about $2 billion, that leaves only Saab’s fate up in the air. The only hope for Saab is a small, ultraluxury sports-car company, Spyker Cars NV, which has kept its bid alive to buy Saab from General Motors. Who is Spyker anyway? Outside of Formula One racing circles and the celebrity scene (Jennifer Lopez bought a Spyker), the Dutch auto maker is hardly a household name. Spyker does have one thing in common with Saab: both sell relatively few cars. Saab has sold 93,000 cars this year, the least of any GM brand. Spyker has sold 36 cars through the third quarter. Ok, this isn’t exactly an apples-to-apples comparison. That is because Spyker makes hand-built, high-end sports cars …

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GM is reviewing several inquires about Saab

  General Motors Co. is in active negotiations with sports-car maker Spyker Cars NV over its latest offer to take over auto maker’s Swedish Saab brand, two people familiar with the situation said Monday. Spyker presented GM with a new offer to buy Saab on Sunday, two days after GM broke off talks with the company saying it would be impossible to reach a deal. Spyker said Monday it extended the deadline for that offer, which was set to expire at 5 p.m. Eastern Time. Major hurdles remain to salvaging the struggling brand, which GM has been trying to sell for nearly a year. Making Saab become profitable could cost billions in restructuring and product development costs. GM said Sunday it was reviewing several inquiries about Saab. Interested parties include private-equity interests, individuals and more-established industrial companies, a person familiar with the situation …

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Cash for Clunkers took a lot of used cars off the road

  When December rolls around, car dealerships typically want to unload the old to make room for the new. But not this year. “Traditionally, right now, you’d get a great deal on last year’s models, but because of ‘cash for clunkers’ those cars are pretty much gone,” said Jack Gillis of the Consumer Federation of America. The program paid out thousands for gas guzzlers, prompting a summer buying spree. So what’s on the lot now? Next year’s models, and they’re on sale. “The deals now are actually far better then they were under Cash for Clunkers. It’s just the customer doesn’t perceive it as that,” said Tammy Darvish of DARCARS Automotive Group. Since the government stopped offering incentives to buy, dealerships are back offering deals such as zero percent financing and cash back. “Even if your clunker is only worth 3 or 4 thousand, you add the 0 …

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