Automotive News - June 23, 2008 - (Page 39)

JUNE 23, 2008 • 39 2009 Chrysler hybrid SUVs start at $45,340 DETROIT — Chrysler LLC last week revealed pricing for its hybrid SUVs. The 2009 Dodge Durango Hybrid will start at $45,340. The 2009 Chrysler Aspen Hybrid will start at $45,570. Both prices include shipping. The vehicles are to arrive in showrooms in August. Chrysler’s new hybrid SUVs will be priced lower than General Motors’ two hybrid SUVs launched in January. compared with the year-ago period. Ford idles Mich. truck plant DETROIT — Ford Motor Co. is shutting its Michigan Truck Plant for nine weeks this summer. The factory assembles the Lincoln Navigator and Ford Expedition. Ford had planned to close the plant for five weeks starting today, June 23. The downtime includes the usual two-week company shutdown in July. As of June 1, Ford had a 100-day supply of the Expedition and a 124-day supply of the Navigator, according to the Automotive News Data Center. OHIO Lawsuit by state alleges sales scam continued from Page 8 Ford calls off Ohio plant sale DETROIT — Meridian Automotive Systems Inc. said last week a deal to buy a lighting systems plant in Sandusky, Ohio, from Automotive Components Holdings LLC has been called off. Meridian said Automotive Components Holdings and parent Ford Motor Co. told Meridian that North American vehicle production cuts made the sale impossible to complete under the original terms. last week to requests for comment. Don Smith, general manager of Hugh White Honda, says NAL Group failed to pay for six new vehicles worth $160,000. He says his dealership retains title to the vehicles, which he declined to identify. David Brown, a lawyer for Hugh White Honda, told Automotive News the dealership “did nothing but engage in a commercial transaction with National Auto Lease. National Auto Lease illegally sold cars to consumers.” Michelle Gatchell, a spokeswoman for Ohio Attorney Gen. Nancy Rogers, estimates the state has received 30 to 40 complaints from consumers who said they bought vehicles from NAL Group but never received titles. Gatchell says the state lawsuit names the Honda and Acura dealerships as defendants because they allegedly sought to recover their vehicles from consumers. That action violated state consumer law, the suit claims. The dealerships “were trying to go after the consumer who had nothing to do with” the alleged fraud, Gatchell says. Brown says Hugh White Honda did not repossess or try to repossess vehicles. The dealership will keep the titles while it negotiates a resolution with the attorney general’s office, he says. “In Ohio, physical possession of a certificate of title is ownership,” Brown says. ‘Company has no assets’ Charles Kaps, a lawyer for NAL Group, acknowledges violations in the vehicle sales. But he says the company’s majority owners, Steven Roper and Patrick McNamara, are guilty of nothing more than poor accounting practices. He says the families of Roper and McNamara have paid about $200,000 in restitution for 24 of the disputed vehicles. The families cannot afford to make restitution for the remaining 20 sales, Kaps says. “We’re not declaring bankruptcy,” Kaps says. “There is no need to. The company has no assets.” The state lawsuit seeks to force NAL Group to reimburse affected consumers and pay a fine of at least $25,000. No hearing date is set. c Dodge Journeys recalled DETROIT — Chrysler LLC last week said it is recalling 6,692 Dodge Journey crossovers with 3.5-liter engines because the engine wiring harness could come into contact with the left transaxle mount and possibly start an engine fire. TRUCKS $4 gasoline sinks price of large models continued from Page 1 CarMax net earnings decline RICHMOND, Va. — Declines in store traffic and in light-truck prices helped slash CarMax Inc.’s net earnings in its fiscal first quarter. The used-vehicle retailer’s net income totaled $29.6 million in the three-month period that ended May 31, down 55 percent from the same period last year, company executives told analysts in a conference call last week. Total sales revenues increased 3 percent to $2.21 billion in the quarter ’09 Porsche SUV prices rise ATLANTA — Porsche Cars North America Inc. last week said prices of its 2009 Cayenne SUVs will be 2.3 to 4.3 percent above the 2008 versions. The base 2009 Cayenne is priced at $45,495. The Cayenne S starts at $60,295. The Cayenne GTS is priced at $71,795, and the Cayenne Turbo starts at $98,595. All prices include shipping. The 2009 Cayennes are scheduled to arrive in showrooms July 14. Sales and prices of large used trucks continue to slump. Last month, used full-sized pickups sold at auction for an average price of $9,343 — a 21.3 percent decline from May 2007, ADESA says. The average wholesale price of large SUVs plunged 19.7 percent to $11,271. The market for big used trucks shifted “overnight,” says Patrick Walsh, a Ford dealer in rural Atwater, Minn. “I don’t think any of us were ready for that.” stock watch Manufacturers BMW-ADR Fiat S.p.A.-ADR Ford General Motors Honda-ADR Hyundai-ADR Nissan-ADR PSA-ADR Renault-ADR Suzuki-ADR Toyota-ADR Volkswagen-ADR Closing price June 20 Closing price June 13 Weekly percent change 52-week high 52-week low Earnings plunge Late last week, Ford Motor Credit Co. said it will take a pretax loss this year, mainly because of “further weakness in large truck and SUV auction values.” Last week, CarMax said its net income for the three months that ended May 31 fell 55 percent from the year-ago period, to $29.6 million. Company CEO Tom Folliard cited a 25 percent drop in wholesale prices of big trucks in the quarter. The steep decline has continued in June, Folliard said. “This is the longest-lasting depreciation of a large segment we’ve ever seen,” he said during an earnings call last week. DCH Auto Group, of South Amboy, N.J., owns 31 dealerships in California, New York, New Jersey and Connecticut. Last year, sales of large pickups and SUVs accounted for 25 to 30 percent of the private group’s usedvehicle sales. Now it’s 15 to 20 percent, the company says. “This collapse is a major issue for us,” says DCH CEO Susan Scarola. $51.40 25.50 6.20 16.36 35.59 15.80 17.75 54.96 100.77 26.00 102.28 53.66 Closing price June 20 $54.05 25.50 6.04 16.22 35.32 15.80 17.71 59.65 100.77 26.00 102.64 53.30 Closing price June 13 –4.9% – 2.7 0.9% 0.8 0.2 –7.9 – – –0.4 0.7 Weekly percent change $68.80 34.85 9.70 43.20 37.80 23.16 23.75 92.50 165.75 33.25 128.33 60.85 52-week high $48.60 14.15 4.95 15.50 27.01 14.25 15.88 54.96 98.10 23.60 91.21 29.20 52-week low The 2005 BMW X5 4.4i, above, and 2005 Toyota Tundra Ltd. fourwheel-drive Double both lost 22.9 percent of their value since Jan. 1. Big losers How wholesale prices of some used big trucks fell between January and June. All vehicles are 2005 models. JUNE 15 JAN. 1 CHANGE Retail Groups Asbury Automotive Group $14.27 AutoNation 13.82 Group 1 Automotive 22.35 CarMax 17.80 Lithia Motors 6.42 Penske Auto Group 17.18 Sonic Automotive 15.63 $15.67 14.45 24.38 18.58 6.94 18.43 17.82 –8.9% –4.4 –8.3 –4.2 –7.5 –6.8 –12.3 $26.41 22.86 42.96 27.42 27.58 22.92 30.60 $11.71 11.72 19.81 15.81 6.05 13.57 15.63 BMW X5 4.4i Toyota Tundra Ltd. Double 4wd Ford F-150 Lariat SuperCrew 4wd Chevrolet Silverado 1500 LT Crew 4wd Infiniti QX56 awd Nissan Armada SE awd Source: Black Book $24,200 $16,525 $16,100 $15,675 $23,800 $15,150 $31,400 $21,425 $20,500 $19,875 $30,000 $18,800 –22.9% –22.9% –21.5% –21.1% –20.7% –19.4% Suppliers Biggest weekly swings from among the Automotive News top 150 suppliers to North America whose stocks are traded in the United States Closing price June 20 Closing price June 13 Weekly percent change 52-week high 52-week low “ This wreaks havoc on the bottom line. PONCHO REDFERN Thomason Auto Group ” Wreaking havoc Dealer Redfern says his dealerships typically have earned gross profits of $1,500 to $2,000 on the sale of a used truck, not including finance and insurance. On a new car, he says, the typical profit margin is $300 to $700. The collapse of used-truck sales is especially painful, he says. “You can’t outrun it in F&I,” Redfern says. “There’s only so much you can honestly earn in that department. This wreaks havoc on the bottom line.” In May, an informal Automotive News survey found that one out of 10 dealers no longer accepted big SUVs and pickups as trade-ins. Other dealers said they didn’t have that option but were offering far lower trade-in prices. “We can’t turn them away,” says Ken Cooper, sales manager of Alex Chevrolet in rural Charles Town, W.Va. “We are in a small town. If it gets around that we weren’t taking trucks as trade-ins, we wouldn’t be doing any business.” Customers who want to trade in a big truck for a fuel-efficient new car are having the hardest time, Redfern says. Some new trucks carry factory incentives of several thousand dollars, he notes, while the incentive on a car might be just a few hundred dollars. Owners who owe money on their sharply depreciated big trucks are in for an even bigger shock, he adds. “We see people with $10,000 in negative equity,” Redfern says. “A dealer does not have enough room to help the customer out of it.”c Alysha Webb contributed to this report Winners ArvinMeritor Cummins Engine Co. SPX Corp. Johnson Controls Stoneridge Inc. Losers American Axle Cooper Tire & Rubber Lear Corp. Hayes Lemmerz Int. Tenneco Automotive $16.59 72.16 139.30 33.12 17.48 $13.95 9.57 21.22 3.37 20.48 $14.78 67.08 129.67 31.54 16.97 $15.59 10.66 23.52 3.65 22.08 12.3% 7.6 7.4 5.0 3.0 –10.5% –10.2 –9.8 –7.7 –7.3 $23.65 74.23 139.30 44.46 18.74 $31.00 28.50 41.33 6.13 37.73 $9.08 38.11 73.31 29.47 6.86 $13.64 9.14 20.00 2.75 19.66 Information obtained as of 4:00 p.m. on Friday, June 20, 2008. Because of a lag in the reporting of trades the closing prices disclosed above may differ slightly from the eventual closing prices. ADR = American Depository Receipt Compiled by PricewaterhouseCoopers, Intraweek data provided by Comstock. Powered b

Table of Contents Feed for the Digital Edition of Automotive News - June 23, 2008

TRW exec: We're in the 'sweet spot' for growth 'Like house of cards,' used trucks fall Detroit 3 a big drag in global supplier race Ford rethinks big-block V-8 plan Looters and broken levees Plastech's Brown stands to get $9.25 million Lawmakers: Redo roof rule Hunt takes job at Gallup Lawmakers urge roof rule rewrite Webinar offers tips on going green Lawmakers: Redo roof rule Webasto sees more demand for retractable hard tops Why small isn't always big To move metal, hire an Ironman Chevy limits ZR1 Corvette to top dealers Lithium ion battery is key to hybrid growth With Russia hot, Ford will boost Europe production BMW exec: We can grow in U.S. The man who put the wind in GM's sales GM's parts ordering comes down to Earth More Fits for U.S. in fall GM: Volt buyers deserve tax credit Mercedes exec seeks more exclusive technology from suppliers Bosch, Mahle execs to lead turbo venture Supplier personnel ZF moves steering operations in Ky. Slowing Volvo, Saab add to Sweden's industry woes Feds: Drivers don't have to hang up phones Magna eyes new growth strategy: Powertrain-driveline modules Alleged sales scam snares Ohio dealers GM center troubleshoots IT in plants around the world Senator: Plants have capacity for plug-ins Lots of talk but little to show Going green pays off The Detroit 3 are smart to cut sales to fleets Drop Mercury? No; Ford needs it Awareness isn't GM's problem Leno was off base in bashing U.S. cars Roofs, rollovers and reckless driving Big-truck sales fall 15.2% in May Serra deal reflects GM channel strategy No. 2 vehicle hauler to go out of business Chinese company's car looks a lot like a Mini Honda taps star power for fuel cell car Dealer wanted media attention — and got it Dealers European sales dip 7.8% in May Merger gives Hughes Telematics a cash boost Mexico sales bounce back in April Suzuki dealers test system to turn Web leads into sales Bosch-Samsung venture to make lithium batteries Hyundai plans Elantra hybrid for Korea in '09 RV sales drop 8.5% in April Japan’s best-kept secret Utilities join automakers for plug-in r&d Ford likely to build '11 Focus at 2 plants Glut of '08 Ford F-150s delays launch of '09s '09 Porsche SUV prices rise Ford calls off Ohio plant sale Ford idles Mich. truck plant CarMax net earnings decline Dodge Journeys recalled 2009 Chrysler hybrid SUVs start at $45,340 GOP: Climate bills would make $4 gas look cheap EVs on eBay: It's all the rage In terms of market value, the General is a buck private Sign of the times: Hummer store to be used-car lot Bob Stempel's legacy is the future Flying 1 series? It's BMW's joke Dealer hurt in sky-dive navigates the road to recovery Opel car recognizes signs; BMW plans similar system JCI, Magna unit buy main parts of Plastech The little engines that could Suppliers to the 2008 Dodge Viper

Automotive News - June 23, 2008

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