GM MAY BREAK UP SUV-TRUCK MARRIAGE TO CUT FUEL USE, EMISSIONS

May 8, 2008—General Motors Corp. may be forced to break up a seven-decade marriage of pickups and large sport-utility vehicles as Americans restrict the fossil-fuel diet of their transportation. Under pressure to produce a more fuel-efficient and cleaner-running line of vehicles, GM is investigating ways to design a lighter replacement for its biggest SUVs, such as the Chevrolet Tahoe, without relying on a heavier pickup-truck frame ... The Tahoe and its predecessors have shared the design of the Chevy Silverado pickups since the model was introduced in 1965. While no decision has been made, GM engineers are considering a shift in 2012 to a car-like construction for successors to the Tahoe and other large SUVs, including the GMC Yukon and Cadillac Escalade ... A shift away from a 72-year history of building an SUV off a large pickup-truck chassis would echo other moves by Chief Executive Officer Rick Wagoner as he tries to meet a government requirement to cut fuel use 40 percent by 2020. Ford Motor Co. and Chrysler LLC are also making fewer heavy-duty trucks to reduce their fleets' fuel consumption and meet the future mandate of a national average of 35 miles a gallon. Lighter vehicles would not only reduce emissions and dependence on gasoline amid record fuel prices, they may also help GM sell more vehicles. Seeking to draw fuel-conscious buyers and end three years of losses, the automaker has already begun to eliminate larger eight-cylinder engines and is developing more models that use electric power and burn fuels from plant waste. The cost for cars and light trucks of complying with the first phase of the standards, from 2011 to 2015, would be about $47 billion, according to an estimate by the National Highway Traffic Safety Administration. GM Vice Chairman Bob Lutz ... estimates it will cost as much as $7,000 a car to meet the fuel requirements. (Bloomberg)

TOYOTA REPORTS 28 PERCENT DROP IN PROFIT

May 8, 2008—TOKYO — Toyota's profit for the January-March quarter sank 28 percent from the previous year as a strengthening yen and lagging North American sales chipped away at the Japanese automaker's earnings. Toyota, the maker of the Prius gas-electric hybrid and Camry sedan, forecast even tougher times ahead. For the current fiscal year through March 2009, it said Thursday that it expects sales to drop for the first time in nine years —and net profit to plunge 27 percent. The pessimistic outlook for this year underlines how even Toyota—with its small cars reputed for good gas mileage—hasn't emerged unscathed from the risks of a global slowdown, a U.S. credit crunch, volatile currency fluctuations and soaring material and energy costs. "We are facing a severe business environment," Toyota President Katsuaki Watanabe said. "Toyota considers this headwind as a valuable opportunity to turn it into a more flexible and stronger company." Like other major automakers, Toyota has been gradually switching its focus to China and other emerging markets. Toyota, however, still makes about a third of its sales in the North American market. Toyota—the world's second-biggest automaker after General Motors Corp.—also warned it will need to spend more in technology research and carry out cost cuts to stay competitive. (Associated Press)

TRADE-IN CUSTOMERS FIND SUVS WORTH LESS

May 8, 2008—BLADENSBURG, Md.—The shiny, black 2005 Navigator sitting on a Bladensburg used-car lot cost its former owner $62,000. The SUV is re-selling for $32,000 and appears to be going nowhere. The consumer guides put out by the National Automobile Dealers Association confirm what has happened to the values of used SUVs and light trucks. They are heading downhill as gasoline prices continue going up. "They've come down in the last 12 months by about $1500, and so that's made the trade-in appraisal kind of difficult for the customer and the dealers," says Paul Taylor, Chief Economist for NADA. Taylor says between March of 2007 and March of 2008, the value of used light trucks dropped from $16,000 to $14,500. The value of most used SUVs went down from $17,200 to $15,500. "The dealerships can't give more than the wholesale market is telling them the vehicle is worth, but it means some disappointed customers when they come in with their vehicle for trade-in," says Taylor. NADA's Dealer Academy teaches owners how to make profits in good times and bad. Many of them are coping with a slump in new car sales as well as falling values for used light vehicles. "I think everybody will pull through it as long as we can control our expenses," says Elliot Martin. His family has owned car dealerships in Pennsylvania for 86 years. (WUSA-TV) (CBS affiliate, Washington, DC)
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TOYOTA RAISING PRICES ON SOME MODELS THIS MONTH

May 8, 2008—TOKYO — Toyota Motor, the world's second-biggest automaker by annual vehicle sales, is raising its prices on some U.S. models later this month amid increased worries about its profit growth in the American market. The price increases, which will start in the middle of May, include a hike of $200 on the 2008 Yaris sedan, which will cost $12,425. The 2009 Camry will go up $200 to $18,920, the automaker's U.S. unit said in a statement released Friday. The hybrid Camry, introduced as a 2007 model in late 2006, will cost $300 more, at $25,650, Toyota said. Toyota faces a challenge in maintaining profits partly because of the recent decline in the dollar, which erodes the value of overseas earnings of Japanese exporters. (USA Today)

FORD PROGRESS, CONTROL IN FOCUS AT ANNUAL MEETING

May 8, 2008—DETROIT—Ford Motor Co. investors a year ago were questioning whether the No. 2 U.S. automaker had the right idea in its turnaround plan under relative newcomer CEO Alan Mulally. But after an 18-percent gain in Ford stock since then and a surprise first-quarter profit, Mulally enters Thursday's annual meeting in Delaware with new momentum and the unsolicited endorsement of billionaire investor Kirk Kerkorian. The cautious optimism on Ford marks a reversal from a year ago, when Ford investors, stung by a $12.6-billion net loss in 2006, chided Executive Chairman Bill Ford Jr. at the annual meeting for the company's slow progress. Analysts see Ford as on the right track, but with a difficult road ahead. (Automotive News) (Subscription required.)

FORD BOOSTING FUEL EFFICIENCY

May 8, 2008—Ford Motor Co. said it plans to double the number of six-speed automatic transmissions in its models by the end of next year, increasing fuel efficiency to the point where it is equal to or better than that achieved by manual gearboxes. The company also said 98 percent of its North American transmissions will be six speeds by the end of 2012... The computer-controlled transmissions give drivers a 4 to 6 percent gas-mileage boost compared with the four- and five-speed models now in widespread use in Ford's front-wheel-drive vehicles. (The Wall Street Journal) (Subscription required.)

BMW SAYS U.S. SLOWDOWN, RISING GASOLINE HAVING IMPACT

May 8, 2008—Bayerische Motoren Werke AG, the world's largest maker of luxury cars, said the U.S. economic slowdown and rising gas prices are weighing on consumer spending in the world's largest automobile market. "In Europe we are used to high fuel costs but for Americans this is a new experience," Chief Executive Officer Norbert Reithofer said in a speech today to shareholders in Munich. Reithofer reiterated that annual pretax profit and vehicle sales will advance even with the "major challenges" of a weaker dollar, higher raw-material costs and slower U.S. growth. BMW plans to boost deliveries with the introduction of the new 7-Series sedan, which Reithofer confirmed today will come to market later this year, and by adding two convertibles. BMW said yesterday that global sales rose 13 percent in April to 133,205 vehicles on demand for the Mini small car. Four-month sales climbed 7.5 percent to 481,155 cars and sport- utility vehicles. The company forecast last month that Mini- brand sales will reach 240,000 cars this year for the first time. First-quarter net income fell 17 percent to 487 million euros ($760 million) after a slowing U.S. economy hurt prices in the world's biggest automobile market, BMW said April 29. Revenue advanced 11 percent to 13.3 billion euros. (Bloomberg News)

NADA USED CAR GUIDE SAYS TODAY'S MARKET DEMANDS SPOT PRICING AND DEPRECIATION TRENDS

May 8, 2008—McLEAN, Va.—With new-vehicle sales down 9 percent through April year-to-date, franchised new-car dealers are increasingly focusing their attention on used-vehicle operations to meet changing consumer preferences and build profitability in a struggling economy. Essential to their success is accurate used-vehicle valuation information, reflecting both “on-the-spot” wholesale pricing information and cyclical depreciation trends in a car's value. “Together, AuctionNet Data® and the NADA Official Used Car Guide give dealers the most complete and accurate picture of the market today, for all timeframes, and that helps them make informed business decisions that can drive profitability on the used side,” said Mike Stanton, vice president and chief operating officer of NADA Used Car Guide. “AuctionNet® is the most accurate, comprehensive and timely wholesale database available—period,” said Terrence Wynne, director of editorial and data services for NADA Used Car Guide. “Differentiated from the competition, it reports current rates from actual auction transactions, rather than trying to approximate it with more frequently reported guidebook values.” (NADA Newswire)

AUTOMOBILE DEALERS PREPARE FOR CENTENNIAL CELEBRATION

May 8, 2008—On May 15, ... central Connecticut dealers are planning to attend the centennial celebration of the Greater Hartford Automobile Dealers Association... Some of the association's 68 members recently talked about their past, today's challenges and their strategies for the future. U.S. car manufacturers have died off by the hundreds since the Hartford association was officially formed in 1908. For several decades after the automobile emerged in about 1880, almost 3,000 brands rolled onto the nation's ragged, muddy streets. Legions of investors and backyard entrepreneurs struggled for a slice of the market. "It was like the dot-com deal," author and industry historian Joel Finn of Roxbury said. "Everybody jumped into making automobiles." The Hartford Automobile Dealers Association (there was no "Greater" in the early name), was formed, in large part, to establish some order among the chaotic competition, according to a Jan. 14, 1908, article in The Courant. "In the automobile industry, as in any industry which springs up in a night, unsettled conditions were bound to exist," the newspaper reported. "There was no gradual growth of the business which could establish precedents and a trade etiquette; there was no long apprenticeship which could give a time honored position to any one man—any dean of the industry." (The Hartford Courant)

NADA 2008 CONVENTION & EXPO DETAILS
Saturday, February 9, coverage ...
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