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July 28, 2014
'Cash for Clunkers Opened Up the Floodgates'
It's hard to imagine that words like "U.S. sales bonanza" were ever used to describe anything that happened in 2009. But they were, reports Automotive News. The Car Allowance Rebate System, also known as cash for clunkers, was a lifeline at a desperate time in the U.S. auto industry. Consider this: When U.S. vehicle sales fell 28 percent in June of that year, the drop wasn't seen as being so bad. Every other month that year had been worse. "We were getting our teeth kicked in," recalled Paul Lunsford, a Toyota dealer in Orange County, Calif. Cash for Clunkers changed that, if only for a couple of months. Nearly 700,000 vehicles were traded in through the $2.85 billion program, which provided consumers as much as $4,500 each to trade in an old gas guzzler for a more fuel efficient new model. Cash for Clunkers turned July and August 2009 into bright spots during what was otherwise a year that most in the industry would rather forget. The seasonally adjusted annual rate of sales jumped to 11.4 million in July. That was the first time the SAAR topped 10 million that year. Click here to read more of Automotive News’ look back at 2009’s Cash for Clunkers program.
Nissan Profit Rises on Strong Sales, Cheap Yen
Nissan’s quarterly profit rose nearly 37 percent, helped by a favorable exchange rate and healthy sales in North America and China, reports The Detroit News. Nissan Motor Co. reported Monday a better-than-expected net profit of 112 billion yen ($1.1 billion) for the April-June first fiscal quarter, up from 82 billion yen a year earlier. Analysts surveyed by FactSet had forecast a quarterly profit of 85 billion yen ($835 million). Quarterly sales jumped 10 percent to 2.466 trillion yen ($24.2 billion). Nissan’s vehicle sales grew in the robust North American market, on solid demand for the Rogue crossover and the Altima sedan, offsetting shaky Japan, where a rise in the consumption tax dampened sales overall. “Nissan continued to make progress in the first three months of the fiscal year as encouraging demand for new products, benefits from recent plant investments, and improving market conditions in North America, China, and Europe combined to lift both revenues and profits,” said Carlos Ghosn, president and chief executive officer. Nissan sold 1.24 million vehicles globally during the first quarter, a 6 percent rise from the previous year. Click here for more on Nissan’s first quarter profit.
NLRB Orders Mercedes Plant to Change Rules
A judge has ruled Mercedes-Benz U.S. International (MBUSI) violated labor laws while dealing with employees interested in forming a labor union, reports The Gadsden Times. An administrative law judge for the National Labor Relations Board (NLRB) ordered MBUSI to revise rules in its employee handbook governing the solicitation and distribution of materials at its auto manufacturing plant in Vance, Ala. The United Auto Workers accused Mercedes managers of stymieing pro-union employees' efforts to distribute information about the union. Mercedes said its only restrictions were designed to protect worker safety and production. Administrative Law Judge Keltner Locke ruled that employees who are not on working time can solicit support for a union from other employees, even if they are in work areas. Click here for coverage of the NLRB’s ruling regarding MBUSI’s rules regarding solicitation and distribution of materials at its Vance, Ala., manufacturing facility.
Summer Auto Sales Continue to Heat Up in July
Total and retail light-vehicle sales in July 2014 are expected to reach their highest levels for the month since 2006. According to CBT News, for the sixth consecutive month, the retail seasonally adjusted annualized rate (SAAR) in July 2014 is demonstrating year-over-year growth and is expected to produce the second-highest retail SAAR of 2014. The SAAR for retail sales in July is expected to be 13.8 million units, an increase of 600,000 vehicles, compared to July 2013, and the second highest so far in 2014 behind 14.1 million units in May. New-vehicle retail sales in July 2014 are projected to reach 1.2 million units, a 5 percent increase on a selling-day adjusted basis from July 2013 (which had one fewer selling day, compared to July 2014). Retail transactions are the most accurate measure of true underlying consumer demand for new vehicles. New-vehicle retail transaction prices in July 2014 are more than $29,000, the highest level ever for the month of July. Total light-vehicle sales in July 2014 are expected to hit 1.4 million units, a 5 percent increase from July 2013. Click here for more from CBT News about expectations for July auto sales figures.
Honda Pushes Dealers for Buyers' Signatures on Airbag Liability
American Honda Motor Co. wants its dealers to require buyers of certain 2001-11 used Honda and Acura vehicles to sign a document indicating they recognize the risk of recalled airbags installed in the vehicles. According to Automotive News, the document comes in addition to Honda's suggesting a stop-sale order on the vehicles unless there is an acknowledgement that the vehicles are subject to a recall related to defective front airbag inflators, a Honda spokesman confirmed. Honda's Airbag Inflator Recall Disclosure and Acknowledgment document acknowledges that occupants could be "injured or killed" if the front airbags deploy. Laurie McCants, managing partner of Honda of Covington in suburban New Orleans, says she believes the signed document helps protect dealers. "If there is a process and we follow the process, I don't feel liable," she says. Neither does Joe Wagner, operating partner of Winter Haven Honda in Florida. He says he is getting no pushback from consumers about signing the document. Honda is among at least seven automakers recalling older model vehicles with potentially defective airbag inflators made by Japanese airbag supplier Takata Corp. Click here for more on Honda’s decision to require buyers to sign airbag liability documents.
Around the Web
Jaguar Buys World's Largest Collection of British Cars [Autoblog]
The Anatomny of a Productive Sales Rep [Salesforce Blog]
The Iconic Vehicle That Paved the Way for Modern Cars [Wired]
USA Today's Speed Challenge [USA Today]