February 3, 2010
January Auto Sales Up
U.S. auto sales rose 6 percent in January. However, sales were hurt by weak demand from consumers and Toyota's highly-publicized pedal issues. According to CNN, Toyota said Tuesday that its January sales fell 16 percent from a year earlier. Honda and Chrysler both said January sales fell from the same period last year. Nissan's overall sales rose 16 percent from a year ago, a bit better than expectations of a 14 percent increase. Hyundai Motor, which includes both the Hyundai and Kia brands, posted a combined 13 percent rise, far better than the 1 percent drop forecast by Edmunds.com. Most of the companies reporting increases suffered from declining sales to consumers, a sign of continued headwinds facing the industry. Click here for a chart of auto sales figures by brand for the month of January, courtesy of the Detroit Free Press. Paul Ballew, a consumer economist at financial services company Nationwide, said automakers will continue to face significant trouble because Americans are still not ready to spend big. "Consumers are hesitant for legitimate reasons," he said. "We're expecting the recovery to be very modest and gradual." Click here for more on how automakers fared during January's sales period. AIADA's Market Watch coverage of international nameplate sales will hit inboxes later today.
Volkswagen Sets Targets to Dethrone Toyota
Volkswagen AG, the world's third-biggest carmaker, aims to boost group vehicle sales by nearly 60 percent and improve profit margins by 2018 in its drive to become the world's largest automaker. According to Automotive News, the targets approved by the German group's management board on Tuesday underscore VW's ambitions to seize the industry lead before the decade is out. VW earmarked vehicle sales of 8 million in the medium term, rising to above the 10 million mark by 2018. It sold 6.3 million vehicles last year, up 1.1 percent, to grab 11.4 percent of the global vehicle market. VW, Europe's biggest automaker and global No. 3 behind Toyota and General Motors Co., also plans eventually to generate an operating margin of at least 5 percent in its core automotive business and a group pretax margin over 8 percent. The 5 percent margin target does not include the planned integration next year of Porsche, which had to accept a reverse takeover by VW after a daring raid to acquire its much larger peer backfired. "The Volkswagen Group is seeking global economic and environmental leadership in the automotive industry by 2018," VW said in a statement detailing its "Strategy 2018." Click here for more on VW's plans for the global auto market.
Toyota to Cover Costs for U.S. Dealers
Toyota Motor Corp. has told is U.S. dealers they will be receiving checks from the automaker to cover the cost of fixing cars recalled for faulty gas pedals and to ensure the dealers provide top customer service. According to the Wall Street Journal, the amounts will range from $7,500 to $75,000, depending on how many cars dealerships sold last year. In a letter to owners of dealerships, Bob Carter, a Toyota group vice president, acknowledged dealers are running up additional costs to keep longer hours and add amenities to make it easier for customers to have the necessary repairs done. "Within the next several days, you will receive a check from us [no strings attached] with a simple request - 'do the right thing on behalf of Toyota customers,'" Mr. Carter said in the letter. The letter explained that dealerships that sold 500 or fewer vehicles would get checks for $7,500, and those that sold 501 to 1,000 vehicles would get $15,000, this person said. The amounts increased depending on 2009 sales volume to a maximum of $75,000 for stores that sold more than 4,001 vehicles last year. For more on Toyota's plans to send checks to its dealers working to correct gas pedal issues, click here.
Honda Profit Soars Six-Fold from Previous Year
Honda's quarterly profit soared sixfold on cost cuts and strong sales of green vehicles, boosting the Japanese automaker's full year forecast. According to USA Today, Tokyo-based Honda said Wednesday it booked net profit of 134.6 billion yen ($1.49 billion) for the October-December quarter. It was the first time fiscal third quarter profit had increased in two years, underlining a recovery in world auto sales. The automaker, known for the Insight hybrid, Accord sedan and Odyssey minivan, reported an 11.5 percent drop in sales for the quarter at 2.24 trillion yen ($24.8 billion), partly because of the strong yen. Honda has weathered the auto slump better than some of its bigger rivals because of its strength in emerging markets and its solid motorcycle division. The company raised its profit forecast for the fiscal year through March 2010 for the third time to 265 billion yen ($2.9 billion), almost double the 137 billion yen profit it had posted the previous year, and its first annual profit rise in two years. For the quarter ended Dec. 31, Honda sold 914,000 vehicles around the world, down 2.8 percent from 940,000 vehicles a year earlier. Click here for full coverage of Honda's recent sales profit.
From Spyker to Saab, a Quest for Miracles
The top executives at most car companies can rattle off the names of their models. Victor R. Muller, founder of Dutch automaker Spyker, can tell you the names of his customers. That intimacy helps to explain the appeal of Spyker, a Dutch builder of six-figure sports cars that many people had never heard of until Muller began bidding to acquire Saab from General Motors late last year. Click here for a photo of Muller. Speaking to the New York Times last week, just hours after he addressed thousands of cheering Saab workers at the company's museum in Trollhattan, Sweden, Muller used the term "little miracle" to describe Spyker's 11th-hour acquisition of the endangered marque. He acknowledged the questions that attend any David-swallows-Goliath deal: How can a company that makes roughly 40 cars a year hope to rebuild and manage Saab, which in 2008 was churning out nearly 100,000? Muller said that Spyker's distinctiveness and passion actually made it an ideal steward for Saab, whose Swedish quirks and personality were a big part of its appeal. And while industry critics accused G.M. of erasing Saab's Swedish identity, Muller said G.M. also left Saab with new technology and advanced manufacturing and testing facilities that can greatly reduce Spyker's production costs. Click here for more on Spyker CEO Victor Muller's plans for the company's acquisition of GM's Saab unit.
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