Monday, December 5, 2011
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US auto sales come in strong in November By Tom Krisher and Dee-Ann Durbin The Associated Press
Wilfredo lee/AssociAted Press files
A Lime Squeeze Metallic 2012 Ford Fiesta SE is seen Aug. 31, at the Maroone Ford of Miami dealership in Miami. Ford Motor Company’s U.S. retail sales rose 20 percent in November — the largest year-over-year increase in nine months.
DETROIT — People are finally replacing the cars and trucks they held on to during the economic slump, giving a big boost to U.S. auto sales in November. Chrysler, Ford, Nissan and Hyundai were among the companies reporting double-digit gains from last November, which is normally a lackluster month because of colder weather and holiday distractions. This November, buyers were lured by good deals, improving confidence in the economy and the need to trade in older cars. “Consumers are just starting to say ‘it’s time to start spending money again,’ ” says Larry Dominique, executive vice president of data for the TrueCar.com automotive website. An early blitz of holiday advertising helped convince some people that it was a good time to buy. Ken Czubay, Ford’s vice president for U.S. sales, says dealers saw the same rise in sales that other merchants did on Black Friday and the Saturday after Thanksgiving Several analysts expect the pace of U.S. auto sales to be the fastest in more than two years. They project the annual rate for November to range between 13.3 million and 14 million cars and trucks after carmakers finish reporting
new vehicle sales Thursday. That’s a far better rate than the 12.6 million through the first 10 months of the year. Sales could even approach the 14.1 million annual pace from August of 2009, when the government offered big rebates for drivers to trade in their gas-guzzling clunkers. Car companies expected sales to improve as people who held on to cars during the economic downturn return to the market. The average age of a car on U.S. roads is a record 10.6 years, according to Polk, an auto industry research firm. And the rate of cars that are scrapped has surpassed sales for several years. “There were a lot of people that waited quite a bit of time to get a vehicle,” says Ryan LaFontaine, whose Michigan car dealer chain sells 16 foreign and U.S. brands. He says commercial truck sales were strong during the month. A better selection of cars at Toyota showrooms also brought more shoppers back into the market. Many buyers spent the summer waiting for those inventories to improve after the March earthquake and tsunami in Japan squeezed supplies, says economist Jenny Lin, who works for Ford Motor Co. Toyota’s sales rose 7 percent for the month, the first time the company has seen a yearover-year increase since April. See SALES, Page 2
Page 2 / Monday, December 5, 2011
Tallahassee Democrat / OnTheMOve
Chevrolet banking on growth in key markets By Mark Phelan Detroit Free Press
Five cities scattered across the globe hold the key to Chevrolet’s future. They are Frankfurt, Germany; Guangzhou, China; Los Angeles; Rio de Janeiro, Brazil; and San Francisco, Joel Ewanick, GM vice president and global chief marketing officer, told me at the Los Angeles auto show last week. If Chevrolet can drastically increase its sales in those cities, it’s on the way to being a global powerhouse. That would put General Motors in the strongest position it’s been in decades. Chevrolet accounts for more than 60 percent of GM’s global sales. Chevrolet has built and sold vehicles around the world for most of the brand’s 100 years, but it was a piecemeal effort until recently. Over the last five years, Chevrolet has developed a single coherent model line. The next challenge is crafting a brand image that works all over the world. Ewanick’s key cities represent a mix of Chevrolet’s old and new markets, but they share one trait: they’re bellwethers for regions in which Chevrolet is weak. “We need to do better in these cities,” Ewanick said. “If we sell well in them, we’ll sell well in their surrounding areas.” If Chevrolet’s market share in California — where Japanese automakers dominate — matched its sales in the rest of America, the brand would be a powerhouse and GM would be raking in money. The same goes for Rio and Guangzhou. Chevy’s very strong in the rest of China and Brazil — the brands’ No. 2 and 3 markets around
lynne Sladky/The aSSociaTed PreSS
The Chevrolet logo is featured on the hood of a 2012 Colorado pick-up truck Oct. 28, at the 41st annual South Florida International Auto Show, in Miami Beach.
COMMenT the world, respectively. VW and Fiat dominate those areas because they have plants there. “Our biggest competitors are very strong in those areas,” Ewanick said. “Our gain is their loss.” Chevrolet has grown quickly in Central and Eastern Europe, but it’s a fringe player in the north. If it strikes a chord in Germany’s financial and industrial heartland, Ewanick is convinced the brand will to do better throughout Western Europe. The vehicles are holding up their end of the deal. The Chevy Cruze compact seems to be a legitimate hit. Chevy sold a million of them around the world in slightly over two years. It’s been America’s best-selling small car for much of 2011, although the natural disasters that hampered Japanese automakers contributed to that. The new Sonic subcompact has been well received in America, Asia and Europe. Chevy’s new Colorado midsize pickup looks like strong player in Asia, Latin America and the Mideast. On the marketing side
of the equation, Ewanick is counting on social responsibility and soccer balls in addition to traditional tools like advertising and special events. Chevrolet began a carbon-offset program in the U.S. last year that planted trees, insulated houses, invested in wind farms and used other techniques to generate clean energy and goodwill. There are questions about how effective some of the programs are, but Ewanick is convinced of the importance of establishing Chevrolet as a brand that does good. Chevy is also working with singer Sting and a foundation that gives indestructible soccer balls to kids in poor countries so they can play the world’s most popular sport. (Watch “one world futbol vs. a truck” on YouTube for an amazing demonstration.) Another program works with customers to help educate children. “People appreciate companies that try to do the right thing,” Ewanick said. “Our brand needs to become part of society and stand for something more than just selling a car.” And then, it needs to sell more cars in L.A., Rio, San Francisco, Frankfurt and Guangzhou.
Paul Sancya/The aSSociaTed PreSS
A 2012 Jeep Wrangler is shown June 3, next to the assembly line at Chrysler Group’s Toledo Assembly complex, in Toledo, Ohio. Chrysler said Thursday its U.S. sales jumped 45 percent last month thanks to strong demand for the Jeep brand.
Sales From Page 1
Sales of the subcompact Yaris more than doubled. Sales of the Prius hybrids — which now include the original car as well as the new Prius V wagon — were also strong. But Honda Motor Co. continued to struggle, partly because of flooding in Thailand that forced the company to slow down U.S. production. Honda sales fell 10 percent for the month. Chrysler Group LLC’s sales rose 45 percent from a year earlier. They were led by the Jeep Compass small SUV, which had a nearly ten-fold increase in sales. Jeep brand sales rose 50 percent, while Chrysler brand sales nearly doubled on strong demand for its 200 and 300 sedans. Chrysler raised its incentives to nearly $3,300 per vehicle, up 6 percent from October. At General Motors Co., buyers snapped up small cars and pickup trucks. Sales of the Chevrolet Cruze compact rose 64 percent,
while the Silverado pickup, GM’s top-selling vehicle, saw sales jump 34 percent. “We are seeing a broad spectrum of customers return to the market,” says Don Johnson, GM’s U.S. sales chief. GM’s overall sales were up 7 percent. Ford’s sales rose 13 percent, fueled by the new Explorer SUV, whose sales more than tripled over last November. The increases reflect improving consumer confidence, which rose to its highest level since July last month, according to the Conference Board. Attractive leases also spurred sales. Dealers offered good terms because low interest rates and high used-car values make leased vehicles worth more when they’re returned. GM, for instance, is offering a Cruze lease at $169 per month for 39 months. According to TrueCar. com, an auto pricing site, the average industry spending on incentives such as leases and low-interest loans was $2,534 per vehicle in November, up 2.5 per-
cent from October. Jeremy Anwyl, CEO of the auto information site Edmunds.com, estimates that 200,000 to 300,000 buyers who held off purchases over the summer and are coming back to the market now. But he thinks sales could soften this spring once those buyers are exhausted. “I wouldn’t view this as suggestive of a fundamental economic rebound,” Anwyl says. Instead, he expects the recovery to continue the bumpy progress it has seen all year. Other automakers reporting Thursday: n Nissan Motor Co. says sales were up 19 percent. The new Versa small car led sales with a 38 percent increase, but SUV and truck sales also rose 32 percent. n Hyundai Motor Co. says sales rose 22 percent thanks to sales of the new Elantra, which jumped 44 percent. n Volkswagen AG says sales were up 41 percent on the strength of the new Jetta and Passat sedans. Volkswagen sold 6,018 Passats in November, compared to 374 last November.
Monday, December 5, 2011 / Page 3
OnTheMOve / Tallahassee Democrat
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Page 4 / Monday, December 5, 2011
Tallahassee Democrat / OnTheMOve
Don’t assume dealer flushed fluids By Paul Brand Star Tribune (Minneapolis)
QUESTION: I have a 2005 Chevrolet Uplander van with 91,000 miles. After the van has been driven for more than 150 miles or so, the transmission apparently slips. When starting from a dead stop, the engine races a little and then the van moves with a jerk. It also jerks hard when it upshifts into each gear. It does not miss any gears and shifts at the proper engine RPM. If the van is allowed to sit overnight, the problem doesn’t happen again until after about 150 miles of driving. The transmission fluid is bright in color, has no unusual odor, and is up to the full level. The instrument panel does not indicate any failure codes. I suspect the problem existed before I bought the van at 68,000 miles. At the time of purchase an independent mechan-
Q&A
ic suggested the transmission fluid be changed, and I assume the dealer did so. What do you think? ANSWER: Remember what “assume” stands for! According to the recommended maintenance schedule, transmission fluid/filter service isn’t called for until 100,000 miles under normal driving conditions. Even though the recommendation is 50,000 miles under “severe” conditions, I doubt the dealer performed this service before selling it to you with 68,000 miles on it. I found several service bulletins in my Alldata automotive database addressing harsh first-gear starts and slippage. All point to potential problems in the transmission’s hydraulic valve body. All suggest removing the valve body from the transmission for inspection and repair or replacement. I’d try an additive like TransTune first.
Even though the recommendation is 50,000 miles under “severe” conditions, I doubt the dealer performed this service before selling it to you with 68,000 miles on it. Q: I own a four-cylinder 2003 Camry. Lately, on a cold start I notice some light blue smoke emitting from the exhaust. The Toyota dealer tells me it is most likely that the valve guides are worn and may need replacement, which they say is quite expensive. I did put in oil additive recently and it seems to have helped a little. Do I have a serious problem? A: I don’t think so. Valve guides do precisely what they describe: guide and support the
intake and exhaust valves as they move rapidly up and down, opening and closing the intake and exhaust ports. After tens of thousands of miles, some wear is normal. The slightly increased clearance between the valve stem and guide can allow a tiny bit of oil to drain down the valve stem, sit on top of the valve head and then be drawn into the combustion chamber and burned upon startup — thus the slight puff of blue smoke. Consider it “upper cylinder lube” — this tiny amount of oil isn’t doing any harm. Unless oil consumption becomes excessive or a drivability problem develops due to fouled spark plugs, I wouldn’t worry about it. Just make sure you keep the oil topped up. Q: My 2010 Ford Fusion has P225/50R17 tires. My dealer says I can upgrade these to a softer-riding tire. My wife and I are both 75. What would you
suggest that would still maintain our warranty? A: The standard size tire on the base model 2010 Fusion is P205/60R16. The taller sidewall, indicated by the 60 aspect ratio rather than the shorter sidewall with the 50 aspect ratio, would likely provide a somewhat softer ride. But, of course, you’d need to swap the 17-inch wheels for 16-inch wheels and ensure that the tire pressure monitoring system remained intact and functional. I would ask the dealer if they could swap your wheels and tires for a 16-inch set from another Fusion. This should not affect your warranty. If you choose to keep your wheels, I could not find a 17-inch 60-series tire, which would be very close to the same rolling diameter. You could try a different P225/50R17 tire, but I’m not sure how much improvement in ride quality it would offer. Slightly lower tire pressure, perhaps 30 pounds per square inch, might help a little.
Study: Booting hybrids from carpool lanes slows everyone down By Ronald D. White Los Angeles Times
LOS ANGELES — Until earlier this year, many California motorists looked on with envy or perhaps some stronger emotion when those single-occupant hybrids zipped by in the carpool lane. Others who had gone to the trouble of coordinating schedules and establishing real carpool relationships probably weren’t too happy with their solitary HOV-lane brethren either. Surely, fairness was restored over the summer when the interlopers lost their carpool-
lane rights; the real carpoolers have seen their speeds increase, right? Wrong. A University of CaliforniaBerkeley study released Monday says banishing those lone hybrid drivers from carpool lanes has made traffic slower for everyone. As an example, they cited a 4-mile stretch of carpool lane on Interstate 880 in Hayward, Calif., which has seen a 15 percent reduction in speed since July 1, when single-occupant hybrids were expelled. What gives? Researchers at UC-Berke-
A University of California-Berkeley study released Monday says banishing those lone hybrid drivers from carpool lanes has made traffic slower for everyone. ley’s Institute of Transportation Studies said they used trafficflow theories and six months of data from roadway sensors measuring speed and congestion along all freeway carpool lanes in the San Francisco Bay Area to reach their conclusions. Among other things, the report’s authors found that the additional vehicles in the regu-
lar traffic lanes slowed speeds substantially. That slower traffic made it more difficult for carpool drivers to move in and out of the HOV lanes, slowing them down as well, according to the report written by Michael Cassidy, a UC-Berkeley professor of civil and environmental engineering, and Kitae Jang, a doctoral student in civil and
environmental engineering. They were examining the end of a program that began in 2005 and concluded July 1 that gave consumers an extra incentive to buy low-emission cars. By 2011, about 85,000 low-emission vehicles were carrying yellow stickers that gave them access to carpool lanes. “Our results show that everybody is worse off with the program’s ending,” Cassidy said. “Drivers of low-emission vehicles are worse off, drivers in the regular lanes are worse off and drivers in the carpool lanes are worse off. Nobody wins.”
Monday, December 5, 2011 / Page 5
OnTheMOve / Tallahassee Democrat
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Page 6 / Monday, December 5, 2011
Tallahassee Democrat / OnTheMOve
China’s Chery launches new Qoros brand By Elaine Kurtenbach AP Business Writer
SHANGHAI — Chinese automaker Chery Automobile Co. and partner Israel Corp. are launching a new brand, seeking fresh appeal both overseas and in the slowing local market. The 50-50 joint venture Qoros Automotive Co., introduced Monday at Shanghai’s former Expo zone, intends to be one of the first Chinese car makers to meet stringent 2013 Euro auto safety standards, the companies said. Chery and Israel Corp., an industrial holding company, originally launched their joint venture as Chery Quantum Auto Co., in 2007. Since then, the company has kept a relatively low profile. Originally, the plan was for Chery, one of China’s biggest independent automakers, to contribute “in kind” as in many joint ventures, providing, for example, land or workers. But that vision has evolved to one of starting from scratch, said Volker Steinwascher, vice chairman of Qoros. Chery is now only a financial investor, leaving the company free to develop its own models and keep the brand separate. “You don’t have to have any legacies,” Steinwascher said in an interview. Qoros plans to introduce its first model, a compact sedan, in China and Western Europe in 2013, executives said. After that, plans call for a hatchback, an SUV and then an electric vehicle. The name Qoros was a “new word meant to represent a company that stands
for quality and works together like a chorus,” the companies said in a statement. “People like brands and products they can be passionate about,” Steinwascher said. “Quality, design, connectivity and simplicity, these are the key drivers of our brand,” he said. Israel Corp. is Israel’s largest holding company, with interests mainly in chemicals, shipping and energy. Chery, whose best-selling model is the compact QQ, and other domestic car makers have struggled to break through with brands of their own. Joint venture brands and foreign imports still account for about 70 percent of sales, with domestic car makers holding only 30 percent. A slowdown this year in vehicle sales, after years of double-digit growth, has proven a special hardship for some domestic makers already struggling with slender profit margins. Chery has not yet followed through with earlier projects of its own aimed at launching sales in the U.S. For now, Qoros has no plans for the American market, where prices are “extremely competitive” and product liability issues a big concern, Steinwascher said. The lack of powerful brand names and core technologies and the stringent safety standards in North America and Western Europe have prevented Chinese manufacturers from making strong inroads in those more mature markets, although they have expanded sales in emerging markets. Qoros is aiming high, intending to meet 2013 Euro-
EugEnE HosHiko/THE AssociATEd PrEss
Chery Quantum Auto Co., Ltd. CEO and Chairman Guo Qian delivers a speech near a new brand car model during the new brand launching event in Shanghai, China, on Nov. 28. Chinese automaker Chery Automobile Co. and partner Israel Corp. are launching new brand Qoros, seeking fresh appeal both overseas and in the slowing local market. pean 5-star quality levels of the NCAP, an agency that assesses car safety. To do so, it is working with Austria’s Magna Steyr, a major independent automotive design firm, and has hired designer Gert Hildebrand, formerly of BMW Mini. Other suppliers include major auto parts companies like TRW, Bosch and Valeo. “All our leading talent is in-house,” said Steinwascher, who retired from Germany’s Volkswagen AG in 2006 but said he found it was “too early.” “We’re looking for very good people. We want to have a few people but good people,” Steinwascher said. Qoros is building a factory in Changshu, an industrial city west of Shanghai, that will have an annual capacity of 150,000 vehicles, which could expand in the future to 300,000. It has a research and development center in Shanghai.
EugEnE HosHiko/THE AssociATEd PrEss
Two hostesses stand to reveal a new brand car model in Shanghai, China on Nov. 28. Chinese automaker Chery Automobile Co. and its partner Israel Corp. are launching a new brand, seeking fresh appeal both overseas and in the slowing local market.
Monday, December 5, 2011 / Page 7
OnTheMOve / Tallahassee Democrat
Mercedes-Benz looking to soar again By Terry Box Dallas Morning News
GRAPEVINE, Texas — On the hot morning in July when Park Place Mercedes-Benz quietly opened, the dealership didn’t stay silent for long. Customers were waiting when the sleek glass doors swung open at the facility in Grapevine, and by midday “it was like a mall in here,” general manager Robert Hinkle said. “It was a soft opening — we were still finishing the service department — and people still came by,” he said. That should please Mercedes-Benz. It remains a powerful brand, but Mercedes trails BMW in luxury sales in the U.S. and has fallen behind BMW and Audi in worldwide sales. Moreover, Mercedes-Benz is not growing anywhere near as vigorously as BMW and Audi. Its year-to-date sales were up 7 percent worldwide through September, compared with 17 percent at BMW and 17.4 percent at Audi. The once-dominant automaker plans to reclaim its status as the best-selling luxury brand in the world. “Our goal is to be No. 1 (again) in profitability and sales in the premium segment,” Deiter Zetsche, CEO of Mercedes’ parent company, Daimler, told Automotive News last month. “The objective is clear, and so is our commitment.” Mercedes-Benz dealerships such as Park Place and Mercedes-Benz of Plano are likely to play substantial roles in that push. Both adopted Mercedes’ new Autohaus look in their facilities, which is part of a plan to give the 350 Mercedes-Benz dealerships in the U.S. a common look and feel. The design should be more appealing to younger buyers, the company says — replacing the stuffy, dark-wood clubbiness of some Mercedes deal-
ers with a lighter, more open, contemporary look. “It was meant to appeal to a broad array of people — from our traditional buyers to new buyers,” said Ken Schnitzer, founder and chairman of Park Place Dealerships, which closed an older MercedesBenz store in Bedford to build the 177,000-square-foot facility in Grapevine. Mercedes-Benz wants the dealership makeovers as part of its plan to strengthen the brand. In 2009, Mercedes-Benz of Plano spent a year remodeling its facility in accord with the Autohaus look — a masonry exterior, blue columns, a strong roof line, lots of glass and dark-tile floors with lightcolored wood inside. Owner Finn Ewing has no regrets. “Our dealership was built in the late ‘70s, so it was time,” he said. “But the new look did wonders for our sales and for our employees. Our sales are up 23 percent for the year, and they’re up in every category.” Nonetheless, Mercedes faces considerable challenges in its climb back to the top, says Jesse Toprak, vice president of industry trends at TrueCar.com. “German brands are not a slam-dunk anymore,” Toprak said. “Younger buyers tend to look more at distinctive design and are influenced more by performance, and those have not been Mercedes’ strengths.” The primary buyers for Mercedes-Benz vehicles in the U.S. are middle-aged or older men, he said. “They want a car that kind of drives itself,” Toprak said. Still, Schnitzer said he wouldn’t have invested millions in his new dealership — he declined to say exactly how much — if he had not been confident about the automaker’s future. “I think you will see a significant increase in their volume in the next five years,”
he said. Located off busy State Highway 114, Schnitzer’s new dealership occupies much of a Southwestern-landscaped 17-acre site. A curved front comprising mostly square glass panes opens to a tall, airy showroom with an industrial-looking gray ceiling. The huge showroom had 18 vehicles parked on the dark-tile floor on a recent afternoon — essentially Mercedes’ entire lineup. The lighter areas behind the showroom featured simple, modern leather furniture and abstract art on the walls. As part of the Autohaus look, all 60 bays in the service department are fitted with matching royal-blue toolboxes. “We have the ability in this place to be a top five store,” said Hinkle, the general manager. “In our first month, our sales were 20 percent over expectations.” Consultant Todd Turner wonders, though, whether Mercedes is selling its soul. The automaker recently offered some models of its new C-class car on leases for $350 a month — comparable to the cost of a mainstream sedan. “It used to be they were viewed as the best-engineered car in the world and worth their high price,” said Turner, president of Car Concepts in Thousand Oaks, Calif. “Now they’re talking the latest technology and the sportiest styling, and they’re chasing volume.” Considering the intense competition in the segment, Mercedes-Benz must stay viable and continue to grow, Schnitzer said. “One of the things that Mercedes is trying to do with the new products is reach out to new, younger buyers,” he said. “If you can bring younger buyers in for, say, a C-class car, then you have the opportunity at some point to trade them up to an E-class and begin adding to your base.”
Mercedes-Benz/McT
Mercedes sharpened the looks and performance of the 2012 SLK 350. The once-dominant automaker plans to reclaim its status as the best-selling luxury brand in the world.
Page 8 / Monday, December 5, 2011
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