January 10, 2012

To Survive, Mercedes is Thinking Small
To survive in an automotive market of rising fuel standards, Mercedes-Benz President and CEO Dieter Zetsche says he’s thinking small. With luxury automakers facing a future in which they’ll be held to the same fuel economy standards as more affordable brands like Honda and small-car brands like Mini, Zetsche told MSNBC Monday that Mercedes aims to move into the compact car segment with the goal of selling enough fuel-sippers to offset sales of its traditional luxury limousines. But as Mercedes moves into smaller cars, small car makers are adding the kinds of features and technology that once differentiated Mercedes from lesser cars. Zetsche said the carmaker will be preserving the gestalt of Mercedes’ traditional attributes in its compact models. “The overall character of a Mercedes is what defines it,” he asserted. “It is not the product of any specific amenity. It is top-notch quality, comfort, a dynamic approach to styling and safety – all of this together is what defines a Mercedes,” he said. At the Detroit Auto Show Zetsche unveiled a new SL sports car that is lighter but slightly bigger than the current model. Click here for more on Mercedes-Benz’s strategy to navigate tougher fuel standards.

Global Carmakers Target U.S. Market
Two years into its slow recovery, the U.S. auto market is emerging as one of the most promising for global automakers, which rolled out new models and innovative technologies on Monday to increase their share of sales. More than 50 models are making their international debut at the Detroit Auto Show. The Detroit News reports that Japan's automakers, battered last year by devastating natural disasters, are displaying a raft of new models at the show in a bid to regain market share they lost after severe production disruptions and parts shortages. Germany's automakers also are stepping up their efforts in the United States amid growing signs that the debt crisis in Europe is slowing the regional economy. With Europe's economy weakening and the explosive growth in China's auto market slowing down, the U.S. is now a bright spot on the industry's map. Forecasters expect U.S. auto sales – bolstered by signs of economic growth, increasing consumer confidence and pent-up demand – to grow this year as much as 10 percent, to up to 15 million cars and light trucks, although the outlook could darken depending on what happens in Europe. Read more about the U.S. auto market, and the opportunities it presents for automakers, here.

Honda Looks to Rebuild Acura's Momentum in Performance Cars
Honda, looking to recapture momentum lost during a disaster-plagued 2011, will build three new Acura models in Ohio and Indiana, including a reborn NSX, an ultra sports car aimed at injecting much-needed excitement among its customers. According to the Detroit Free Press, the NSX will be launched within the next three years at a new plant Honda will build in Ohio. Click here for a picture. The ILX, a compact sedan that will come with either gas or gas-electric hybrid powertrains, will be assembled beginning this spring at Honda's Greensburg, Ind., plant. The 2013 RDX will be assembled at the company's East Liberty, Ohio, factory, according to Jeff Conrad, vice president of Acura. Honda's U.S. sales fell 6.8 percent last year as the Japanese earthquake in the spring and flooding in Thailand disrupted its flow of parts, forced production cuts and left dealer showrooms understocked. Honda expects sales of its mainstream brand to grow to 1.25 million vehicles in the U.S. this year from about 1.15 million in 2010. Acura expects sales to rise to 180,000 from 123,000 in 2011, Honda CEO Takanobu Ito said. Click here for coverage of what Honda and Acura are doing to regain momentum.

Automakers' New Reality: Cars Aren't a Must for Kids
Automakers are facing an intractable problem in trying to design and market cars that appeal to young buyers: Many of their potential customers couldn't care less about owning a car in the first place. Fewer teens today are getting their driver's licenses and more 20-somethings aren't sold on owning a car. The Wall Street Journal reports that even those who want to buy a car face greater economic pressures today than their counterparts did 20 years ago. Carmakers are coming at the problem from a variety of angles. BMW AG right now is featuring ads including an Olympic athlete from the U.S. who was given a BMW by her parents after earning a gold medal in swimming. Nissan-Renault Chief Executive Carlos Ghosn insists appealing to younger buyers is an engineering, design, and marketing challenge, not a fundamental problem for the industry. Cars also have to be safer so that parents will feel more comfortable putting their teenagers into new cars, or will want to buy new cars to get the latest safety equipment rather than buy used cars for new drivers, he said. For more on today’s young drivers, and what their habits mean for automakers, click here.

Will the Passat Propel VW to No. 1?
American car buyers and the motoring press are giving a warm welcome to Volkswagen's new Passat midsize sedan, the German automaker's latest salvo in a campaign to achieve No. 1 sales status worldwide. November sales of Passat, which was named Motor Trend magazine's Car of the Year following its introduction in September, barely topped 6,000. Although that number is less than half that of the leaders in its segment, it represents an impressive total compared to that of the previous, smaller, and more expensive Passat. According to Doron Levin at CNN Money, the increase suggests that VW buyers as well as loyalists of other brands are adding Passat to their shopping lists. VW sales overall were up 40 percent for the month in the U.S. Wolfsburg, Germany-based Volkswagen's goal is to lead the world in unit sales of vehicles by 2018, which would require the automaker to increase sales in all major automotive markets. It is currently third in the world; and the top seller in Europe. "VW's goals are very aggressive," says Michelle Krebs, an analyst for Edmunds.com, an automotive website. "Next year will be competitive in the midsize sedan segment." Click here for more on the Passat’s role in VW’s strategy to become the world’s leading automaker.

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Around the Web 

Audi Confirms 3.0T Powertrain for 2013 Audi A8 in U.S. [Autoblog]
4 Things to Know Before Buying a Small Car [Forbes]
Honda Enlists Civic for Entry-Level Luxury Duty [Wheels]
Lexus Shows Sexy LF-LC Sports Car Concept [DriveOn]

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