Archive for March, 2010

Car sales growth continues at a strong pace

  Three economic indicators fueled a fragile optimism that car sales in March may have hit their strongest pace since last summer’s cash-for-clunkers program. For the first time, Americans scrapped more cars than they bought in the 15 months ended last Sept. 30, according to R.L. Polk, the Southfield company that tracks car buying habits. To be precise, 14.8 million cars and trucks went to the recycling center in that period, and 1.2 million of them were not replaced by a new vehicle. Second, the Conference Board’s Consumer Confidence Index rose to 52.5 in March, up from 46.4 in February and more than double its all-time low of 25.3 in February 2009. Finally, the S&P/Case-Shiller home-price index rose 0.3% in January, indicating the battered housing market may be stabilizing. The jump in scrapped vehicles, however, is particularly good news for automakers and their suppliers. “It foreshadows …

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Sergio Marchionne expects Chrysler to break even this year

  Chrysler, which began its path into bankruptcy a year ago, expects to break even this year, its chief executive, Sergio Marchionne, said on Tuesday. Mr. Marchionne, speaking at an automotive forum on the eve of the New York International Auto Show, said the automaker had slightly more than $5 billion in cash on hand. That is about half the amount Chrysler had in 2007, after Cerberus Capital Management acquired it from Daimler of Germany. A subsequent slump in car sales led to a financial crisis that prompted Chrysler, and General Motors, to seek federal bailouts. One year ago Tuesday, Chrysler’s plan to restructure independently was rejected by the Obama administration, beginning the company’s journey into Chapter 11. Chrysler entered bankruptcy on May 1, and emerged about six weeks later, with federal assistance. Fiat, which Mr. Marchionne also runs, took management …

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Ford sells Volvo to Chinese car maker Geely

  The Chinese car maker Geely has signed a deal to buy Volvo from US car giant Ford, a Volvo spokesman has said. The size of the deal has not yet been disclosed, but is expected to be worth around $2 billion, and will be finalized in the coming weeks. That would make it the biggest overseas purchase by a Chinese car manufacturer. Ford has been looking to offload Volvo, along with other brands, since 2008 when it ran into financial difficulties along with much of the car industry. Ford agreed to sell Volvo to Geely in December. It is hoped that the sale will allow Ford to pay off debts and allow it to focus on its core brands. It has already sold its Jaguar and Land Rover to India’s Tata Motors. Analysts have also suggested that the move will be …

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Chrysler is allowing 86 eliminated dealers to reopen

  Chrysler, which eliminated a quarter of its United States dealerships in the company’s bankruptcy last year, said on Friday it would let as many as 86 of those dealers reopen. Chrysler said it was notifying 50 dealers this week that they could apply for reinstatement, almost nine months after they were forced to abruptly close. The carmaker said 36 of its 789 rejected dealers had previously been given an offer of reinstatement. The notifications come as nearly 400 of the former dealers prepared to fight Chrysler’s decisions through an arbitration process created by Congress. They were the first sign that Chrysler might be easing its steadfast defense of the cuts. Until now, the company had argued that the closures were necessary given its diminished market share and warned that reinstating dealers could jeopardize its recovery. “The 50 dealers are in locations that offer customer-service …

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Saab to start shipping new cars to dealers next week

  A shipment of fresh Saab cars, the first in nine months, will begin arriving at U.S. dealerships next week as the company starts anew under the ownership of Spyker Cars NV. Saab is also preparing once again to offer a leasing plan coupled with the arrival of the new vehicles, said North America President Mike Colleran. Leasing could be available as early as next month. “We are looking forward to getting back into business,” Colleran said during an interview. Saab must re-establish itself as a brand after doubts over the company’s future and the idling of production confused consumers while eroding sales. Saab’s sales fell to 8,264 vehicles in the U.S. in 2009 compared with 20,336 in 2008, according to Ward’s Automotive Group. The delivery of new vehicles–which includes the debut of the 9-3 convertible–is the latest step for Saab after …

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Chrysler sees 51% increase in new car sales

  Chrysler Group LLC said it is seeing a surge in retail sales this month, and executives hope to continue the momentum with a newly launched marketing campaign for the Ram Truck brand. March retail sales are 51 percent above last month, but overall sales, which include fleet sales, could be down 12 percent from a year ago, said Fred Diaz, head of sales and the Ram brand. All four Chrysler brands — including Chrysler, Jeep and Dodge Car — are enjoying increased retail sales this month, “which is huge,” Diaz said Wednesday at an event outlining Ram’s advertising and marketing plans. But when March results are reported April 1, total Chrysler sales could be down 12 percent from a year ago, when the automaker was piling on the incentives. “We were buying the market,” Diaz said of discounts of as much as $8,000 last …

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Honda CR-Z hybrid sports car orders exceed forecast by 10 times

  As Toyota Motor Co. attempts to rebuild its reputation around the world, Honda Motor Co. on Wednesday said orders for its new hybrid sports car exceeded its forecast by 10 times, quietly stealing the march from its main Japanese rival. Honda Motor Co. unveiled its CR-Z model in Japan roughly a month ago, making it the first mass-market hybrid sports car to hit dealerships. The company said cumulative orders for the car had exceeded 10,000 vehicles, far surpassing its monthly sales target of 1,000 vehicles. Japan’s second-largest car maker plans to introduce the model in the U.S. and Europe after June, with a combined annual sales target of 40,000 to 50,000 in the three markets. The move comes as Honda has quietly benefited from its chief rival’s woes. Toyota has recalled more than eight million vehicles world-wide, denting consumer confidence in …

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New vehicle sales projected to surge 30% in March

  New U.S. vehicle sales to retail customers are projected to surge 30% this month from a year earlier, said J.D. Power & Associates, as consumers return to showrooms after harsh weather and following worries about recalls during February, which has led to an incentives battle among some auto makers. J.D. Power, which gathers data from more than 8,900 dealers, said based on the first 11 selling days of the month it anticipates retail sales of 883,300 vehicles this month. There are 26 selling days this month, one more than last year, when sales were at decades-long lows amid the fallout of the financial crisis. Including fleet sales – those to customers such as car-rental companies–J.D. Power anticipates a seasonally adjusted annual selling rate of 12.1 million cars and light trucks for March. That is slightly more than the research firm expected last …

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BMW to supply Police Car Maker high performance diesel engines

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  BMW will supply transmissions, cooling systems and hi-tech diesel engines for start-up police company Carbon Motors, the two companies announced Monday. “The strength of BMW as a partner will allow us to provide our women and men in uniform with a diesel engine capable of the performance they desire, along with the significant reduction in fuel consumption and emissions that U.S. taxpayers need,” William Santana Li, CEO of Carbon Motors Corporation, said in a corporate announcement. Diesel engines provide much better fuel economy than gasoline-powered engines along with more pulling power. When completed, the Carbon E7 will accelerate to 60 miles per hour in just 6.5 seconds, according to the automaker. At the same time, the company has said it expects fuel economy of 28 to 30 miles per gallon. Most of the vehicles BMW sells in Europe — including 80% of 5-series …

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New car buyers should avoid focusing on the wrong aspects of the deal

  Car buyers often focus on haggling down a dealer’s offer toward invoice price. That’s OK, but often that’s not where the real money is, says a former car dealer in his new book. Instead of the purchase price, consumers should focus on other components of the deal, especially loans, trade-ins and their desire to buy more car than they can afford, said Mark Ragsdale, author of “Car Wreck: How You Got Rear-Ended, Run Over & Crushed by the U.S. Auto Industry.” “You’d be better off paying MSRP and paying attention to the big stuff,” Ragsdale said. “But dealer profitability gets the lion’s share of consumer focus and attention.” Here, Ragsdale said, are a few things to consider other than price: That upside-down feeling: Negative equity is when you owe more on your car than it’s worth. This is true of most who drive a financed …

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