Automotive News - October 6, 2008 - (Page 1) autonews.com ® OCTOBER 6, 2008 Entire contents © 2008 Crain Communications Inc. All rights reserved. $155/YEAR; $5/COPY T H E G R E AT C O L L A P S E September was awful, and 2009 looks ugly Richard Truett rtruett@crain.com Sept. 2008 sales, by automaker, % change from Sept. 2007 Nissan –37% Ford –36% Chrysler –33% Toyota –32% Honda –24% GM –16% Source: Automotive News Data Center and company sources Many dealers floored by floorplan limits, costs Donna Harris dharris@crain.com DETROIT — For the auto industry, September could be the start of a really bad stretch. Last month, U.S. light-vehicle sales declined 26.6 percent, and industry executives glumly predict that a turnaround won’t occur until 2010. Some analysts expect that U.S. sales this year could be as low as 13.0 million cars and trucks, a precipitous downturn from last year’s 16.2 million. Next year won’t be any better, predicted Ford Motor Co. CEO Alan Mulally. “We won’t see a recovery until 2010,” Mulally told reporters at the Paris auto show last week. General Motors COO Fritz Henderson was just as downbeat: “We are all under some pressure until 2010.” MORE TALES OF RETAILING Reaction mixed on Chrysler spiffs ➤ 4 40-42 Sales analysis and tables ➤ Toyota offers 0 percent loans ➤ 44 In September, U.S. sales dipped below 1 million units in a month for the first time since February 1993. And — uncharacteristically — the carnage was spread fairly evenly. No one was spared from a toxic mix of high gasoline prices, nationwide job losses and Wall Street’s financial crisis. Suzuki seeks floorplan partner ➤ 44 In recent weeks, each of the Detroit 3’s captives — GMAC Financial Services, Ford Credit and Chrysler Financial — has raised the interest rates it charges dealers for inventory financing by about half a percentage point. Major banks such as Bank of America and Wells Fargo also have increased interest rates on dealer inventories, or floorplans. At the same time, many lenders are demanding more collateral for floorplan loans. Some lenders are refusing to floorplan unprofitable dealerships, to the point of recalling their loans. And sluggish car sales have made a bad problem worse. U.S. new-vehicle see LEND, Page 43 Toyota stumbles After Toyota Motor Sales U.S.A.’s sales declined 32.3 percent in September — its worst sales downturn in 20 years — Toyota unleashed a 0 persee COLLAPSE, Page 42 The credit crisis — which has made lenders reluctant to finance dealerships’ vehicle inventories — is helping force hundreds of dealers out of business. The National Automobile Dealers Association projects that as many as 700 dealerships could close this year, out of 21,461 as of Jan. 1. The last decline of this magnitude occurred during the recession of the early 1990s. Dealers have fallen prey to poor sales, high gasoline prices and ruinous price wars. But a lack of credit is a big factor in this year’s shakeout, says NADA chief economist Paul Taylor. “Credit conditions need to be improved somehow, and quickly,” he says. Fuel frenzy At the Paris show last week, automakers offered a dozen ways to stretch a gallon of fuel. And for those who want to avoid gasoline altogether, automakers pitched electrics. Electric cars gain momentum Page 3 Volvo to produce hybrids Page 6 Designers make sedans look like coupes Page 8 Lexus IS250C: Hard-top convertible The small Mercedes-Benz GLK goes on sale next year. Amid a U.S. stall, Europeans think small Amid a soft U.S. economy, Europe’s automakers are adding small cars and superluxury sedans to their U.S. portfolios. Even Mercedes is going down-market with a small, entry-level car. This week, we highlight Europe’s product plans for the United States, starting on | PAGE 22 | A version of the Chevy Orlando concept is expected in the U.S. Complete Paris show coverage on our Web site. autonews.com The Audi A1 may come to the U.S. See Page 6. PHOTOS BY PHILIP MEECH GMAC is out of leasing — at least for now Alysha Webb and Jesse Snyder awebb@crain.com GMAC Financial Services, the nation’s largest auto lessor as recently as midyear, virtually has stopped writing leases in the United States. In September, leases accounted for less than 2 percent of General Motors’ U.S. new-vehicle sales, according to J.D. Power and Associates. A year earlier, Power noted, GM’s leasing rate was 16.8 percent. Automakers and dealers use leases as sales tools for customers who seek lower monthly payments and a way to cover negative equity in their current vehicles. But the credit crisis forced Chrysler Financial to exit the leasing business this summer, and other lenders have cut back sharply on leasing. Leases accounted for 12.3 percent of all new-vehicle sales in September, Power reported. That’s down from 18.0 percent a year earlier. Last week, Mark LaNeve, GM’s vice president of North American NEWSPAPER sales, conceded that GM did “hardly any leasing in September.” During a conference call reporting monthly sales, LaNeve said GM wants GMAC to put more money into leasing. GMAC spokesman Mike Stoller said the company’s policy is not permanent. “At such a point as leasing makes sense, you will see a return to leasing,” he said. But GM COO Fritz Henderson appears pessimistic about GMAC’s possible return to leasing. Last week, he see GMAC, Page 43 Creditors aim to sell 8 Heard stores by Oct. 14 NEWSCOM Creditors are moving swiftly to sell the dealerships owned by bankrupt Bill Heard Enterprises Inc. They aim to complete the sales of 8 stores by Oct. 14. | PAGE 4 | http://www.autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - October 6, 2008 Automotive News - October 6, 2008 Many dealers floored by floorplan limits, costs THE GREAT COLLAPSE September was awful, and 2009 looks ugly GMAC is out of leasing — at least for now Versical, Nussel take new Automotive News posts GM to shut Ohio SUV plant 2 years ahead of plan VW commits to minority purchasing goals in Tenn. Chrysler exec to outline EV strategy at green conference Automakers are high on electrics Dealers give mixed reactions to Chrysler incentive program Chrysler boosts 2009 vehicle prices Lenders move fast to liquidate Heard's stores Mazda Kiyora Toyota, Audi mull tiny cars for U.S. Audi to decide next year on U.S. production Volvo plans diesel hybrid by 2012 Coupelike styling is back in a big way Honda Insight target price: Around $19,000 Mercedes plans U.S. sales of hybrids in S, E, C classes BMW is working on 2 small crossovers VW-Porsche feud risks growth plans Let's get clunkers off the road and spur the economy Europe: Still very different from us It could improve Caddy's image Shouldn't Cadillac try something new? A 4-cylinder is just what Cadillac needs Government's a player in Europe, too The Chevy Cruze should be big news Simple steps would revive industry Ford stops buying nonessential factory supplies Chevy, Mazda execs to speak at congress Automakers find India tough market to conquer Mahle CEO: Most engines will be smaller by 2012 GM begins streamlining purchasing TL stretches factory's flexibility Personnel Study: Dealers gain on independent shops Chrysler offers service contracts on certified vehicles No label Flashes of genius, years of turmoil VW seeks excitement with Routan, CC, Rabbit Sales soft, but Europeans plan to expand lineups 2010 redesign planned for Bentley flagship Alfa beyond Competizione Ferrari: Recession-proof and turning ... green? Maserati: Sporty gets even sportier Uncertainty surrounds Volvo's product plan Rolls-Royce goal: Add customers Panamera: Can Porsche defy skeptics again? Audi longs to join luxury big-leaguers in U.S. BMW plans more variants beyond sedans, wagons Under new owner, Aston Martin back in the race Lagonda's forte: Luxurious sedans that go very fast Couped-up? Lamborghini considers a sedan 250-mph Bugatti boosts the excitement Mercedes returns to the luxury suite Mini follows BMW's lead Smart ambitions, like car, remain small Suppliers cut staff, output to cope with downturn Driver monitoring systems differ High-tech mirrors are poised to make big gains IAC will open first India plant Supplier personnel Engineers call for common electric car standards Land Rover aims to boost the fuel economy of its SUVs Maybach adds open-top 62S Landaulet Saab gets a crossover in 2009; everything else is on hold Jaguar regains its focus on low volume, high end Dealers Economic winds batter Sept. sales Jaguar Land Rover joins group Ford aids minority suppliers CarMax plans 600 job cuts Ruling could ease disputes Feds seek more time for roof strength rule Suzuki seeks floorplan credit partner for dealers Toyota battles Detroit 3 with cheap loans $25 billion: How'd they do that? Peapod: Innovator's little big idea FOR SALE: Heard condos, mansion, jet Is film a flash in the pan? Ford hopes so VW: Next New Beetle will be 'more mature' Renault's U.S. ally of choice? Probably not Chrysler Automotive News - October 6, 2008 Automotive News - October 6, 2008 - GMAC is out of leasing — at least for now (Page 1) Automotive News - October 6, 2008 - GMAC is out of leasing — at least for now (Page 2) Automotive News - October 6, 2008 - Automakers are high on electrics (Page 3) Automotive News - October 6, 2008 - Lenders move fast to liquidate Heard's stores (Page 4) Automotive News - October 6, 2008 - Lenders move fast to liquidate Heard's stores (Page 5) Automotive News - October 6, 2008 - Volvo plans diesel hybrid by 2012 (Page 6) Automotive News - October 6, 2008 - Volvo plans diesel hybrid by 2012 (Page 7) Automotive News - October 6, 2008 - BMW is working on 2 small crossovers (Page 8) Automotive News - October 6, 2008 - BMW is working on 2 small crossovers (Page 9) Automotive News - October 6, 2008 - VW-Porsche feud risks growth plans (Page 10) Automotive News - October 6, 2008 - VW-Porsche feud risks growth plans (Page 11) Automotive News - October 6, 2008 - A 4-cylinder is just what Cadillac needs (Page 12) Automotive News - October 6, 2008 - A 4-cylinder is just what Cadillac needs (Page 13) Automotive News - October 6, 2008 - Simple steps would revive industry (Page 14) Automotive News - October 6, 2008 - Simple steps would revive industry (Page 15) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page 16) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page S-1) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page S-2) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page S-3) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page S-4) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page S-5) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page S-6) Automotive News - October 6, 2008 - Chevy, Mazda execs to speak at congress (Page 16A) Automotive News - October 6, 2008 - Automakers find India tough market to conquer (Page 16B) Automotive News - October 6, 2008 - Automakers find India tough market to conquer (Page 16C) Automotive News - October 6, 2008 - GM begins streamlining purchasing (Page 16D) Automotive News - October 6, 2008 - Personnel (Page 17) Automotive News - October 6, 2008 - Personnel (Page 18) Automotive News - October 6, 2008 - Personnel (Page 19) Automotive News - October 6, 2008 - Chrysler offers service contracts on certified vehicles (Page 20) Automotive News - October 6, 2008 - Flashes of genius, years of turmoil (Page 21) Automotive News - October 6, 2008 - Sales soft, but Europeans plan to expand lineups (Page 22) Automotive News - October 6, 2008 - Alfa beyond Competizione (Page 23) Automotive News - October 6, 2008 - Alfa beyond Competizione (Page 24) Automotive News - October 6, 2008 - Alfa beyond Competizione (Page 25) Automotive News - October 6, 2008 - Rolls-Royce goal: Add customers (Page 26) Automotive News - October 6, 2008 - Rolls-Royce goal: Add customers (Page 27) Automotive News - October 6, 2008 - Panamera: Can Porsche defy skeptics again? (Page 28) Automotive News - October 6, 2008 - Panamera: Can Porsche defy skeptics again? (Page 29) Automotive News - October 6, 2008 - BMW plans more variants beyond sedans, wagons (Page 30) Automotive News - October 6, 2008 - Couped-up? Lamborghini considers a sedan (Page 31) Automotive News - October 6, 2008 - Smart ambitions, like car, remain small (Page 32) Automotive News - October 6, 2008 - Suppliers cut staff, output to cope with downturn (Page 32A) Automotive News - October 6, 2008 - Driver monitoring systems differ (Page 32B) Automotive News - October 6, 2008 - High-tech mirrors are poised to make big gains (Page 32C) Automotive News - October 6, 2008 - Engineers call for common electric car standards (Page 32D) Automotive News - October 6, 2008 - Jaguar regains its focus on low volume, high end (Page 33) Automotive News - October 6, 2008 - Dealers (Page 34) Automotive News - October 6, 2008 - Dealers (Page 35) Automotive News - October 6, 2008 - Dealers (Page 36) Automotive News - October 6, 2008 - Dealers (Page 37) Automotive News - October 6, 2008 - Dealers (Page 38) Automotive News - October 6, 2008 - Dealers (Page 39) Automotive News - October 6, 2008 - Dealers (Page 40) Automotive News - October 6, 2008 - Economic winds batter Sept. sales (Page 41) Automotive News - October 6, 2008 - Economic winds batter Sept. sales (Page 42) Automotive News - October 6, 2008 - Feds seek more time for roof strength rule (Page 43) Automotive News - October 6, 2008 - Toyota battles Detroit 3 with cheap loans (Page 44) Automotive News - October 6, 2008 - Toyota battles Detroit 3 with cheap loans (Page 45) Automotive News - October 6, 2008 - Renault's U.S. ally of choice? Probably not Chrysler (Page 46) Automotive News - October 6, 2008 - Renault's U.S. ally of choice? Probably not Chrysler (Page 47) Automotive News - October 6, 2008 - Renault's U.S. ally of choice? Probably not Chrysler (Page 48)
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.