Automotive News - November 24, 2008 - (Page 3) NOVEMBER 24, 2008 • 3 83rd year — No. 6335 Used-vehicle demand shrivels Despite low prices, many dealers decline to buy Arlena Sawyers asawyers@crain.com Ford will cut more output DETROIT — Ford Motor Co. is adding an extra down week at a Michigan plant and two extra down weeks at its Chicago factory next month. The announcement comes after Ford said on Nov. 7 that it would cut 40,000 additional units from its fourth-quarter production plan. The Chicago plant — which assembles the Ford Taurus and Taurus X, Lincoln MKS and Mercury Sable — will close the weeks of Dec. 15 and 22, said Ford spokeswoman Angie Kozleski. The Ford-Mazda joint venture plant in Flat Rock, Mich., which assembles the Mazda6 and Ford Mustang, will close the week of Dec. 22, she said. The Flat Rock closing is in addition to a scheduled shutdown the week of Dec. 1. — Amy Wilson GM tweaks production plan DETROIT — General Motors is altering its production schedule for December and January. GM spokesman Chris Lee said some plants will get a week of extra downtime, while others will go on overtime to make more vehicles. GM would not indicate how many units will be cut from production schedules. The changes affect car and truck assembly plants in Oshawa, Ontario; Lordstown, Ohio; Orion Township, Mich.; Kansas City, Kan.; and Wentzville, Mo. Lee said overtime or partial overtime would be reinstated at four other plants. Also, the closing of the Oshawa plant that builds pickups has been moved from July to May 14. — Richard Truett As recently as this summer, Larry Merriam bought about 60 used vehicles at auction each month to stock his three Hyundai and Mitsubishi dealerships in Connecticut. Today he buys no more than 10 a month. Even so, he says, the dealerships’ supply of used vehicles has ballooned to 60 days, from 45 days. “By and large, I’ve put a moratorium on buying (used) cars until I reduce the inventory I have,” Merriam told Automotive News. When new-vehicle sales tanked, franchised dealers looked increasingly to used vehicles to help take up the slack. But as the industry recession deepens and the credit crunch afflicts dealers and buyers, used cars and trucks are piling up on dealership lots and at auctions. Wholesale prices have plunged to their lowest level in nearly 14 years. Many dealers such as Merriam are buying used vehicles only when they have buyers lined up or expect to sell the cars and trucks quickly. “Spec” buying is out. GARY HODGES/JON RIES PHOTOGRAPHY Days supply up “Dealers are not putting a lot of used vehicles on their floorplan line,” says Tom Kontos, executive vice president of customer strategies and analytics at ADESA Inc., the No. 2 U.S. vehicle auction company. “Either they can’t, or they don’t want to.” At the end of last month, Kontos says, wholesale auctions had a 66day supply of vehicles, up from 43 days at the same time in 2007. That amounts to 250,000 more cars and trucks in auction lanes, he says. CNW Marketing Research calculates Tim Walters, a Chevrolet dealer in Pennsylvania, says he’s taking advantage of a “wicked buyer’s market” by purchasing high-quality, off-lease vehicles at low prices; advertising them aggressively; and selling them cheaply. that in the first 10 months of 2008, franchised dealers retailed about 11.2 million used vehicles — 7.0 percent fewer than in the year-ago period. Last month’s sales were down 20.1 percent from October 2007, CNW says. Sales of factory-certified cars and trucks fell 10.7 percent last month from October 2007, to fewer than 120,000 units. see USED, Page 28 Price break Used-vehicle prices are falling along with sales. These are average wholesale prices of some 2-year-old vehicles by segment on Oct. 31 of this year and last. 2008 2007 Entry-level/compact cars Full-sized pickups Full-sized/luxury SUVs Luxury cars Source: Black Book $11,075 $16,797 $26,301 $31,978 $11,238 $20,452 $30,973 $35,000 Mitsubishi: No to Detroit Mitsubishi Motors Corp. is pulling out of the Detroit auto show in January as it looks to save money, according to AutoWeek, a sister publication of Automotive News. Rolls-Royce, Land Rover, Ferrari and Suzuki also have withdrawn from the 2009 Detroit show. Porsche left after the 2006 event. And more floor space may open up. Other automakers say privately that they are reviewing their plans for all auto shows. Press days for the Detroit show are Jan. 11-13. — Greg Migliore Down the road and a continent away Ralph Kisiel GREENSBURG, Ind. — The dark cloud that hangs menacingly over Detroit seemed light-years away on Monday, Nov. 17, as Honda Motor Co. CEO Takeo Fukui celebrated the opening of an assembly plant here. While the Detroit 3 CEOs set off to Washington to beg for a bailout package, about 1,000 new Honda employees clapped along to Van Morrison’s “Bright Side of the Road” blaring from speakers. The celebration of Honda’s sixth assembly plant in North America seemed a continent away from troubled Detroit, where each day seems to bring more bad news for General Motors, Ford Motor Co. and Chrysler LLC. comment Ralph Kisiel is an Automotive News staff reporter. start on Honda’s 50th anniversary of business operations in America, another celebration to look forward to in 2009. Employees watched as Indiana Gov. Mitch Daniels choked up as he recalled how he sat in a Tokyo hotel room on a spring night in 2006 waiting for the call from Honda with news that Indiana had won the big prize. Honda says that it received combined state and local government incentives valued at $73.6 million to put the plant in Greensburg. O’Neill will lead Power J.D. Power and Associates has appointed veteran auto executive Fin O’Neill its next president. O’Neill, 56, takes over in January from the retiring Stephen Goodall, 53, who has been president for 12 of his 30 years at J.D. Power. O’Neill joined the market research firm in March to head international development. — Chrissie Thompson CEO Takeo Fukui: Tough times are an opportunity for Honda. are closing assembly plants and laying off thousands of employees, Fukui dedicated Honda’s new $550 million investment on what was 1,700 acres of farmland just two years ago. As the Detroit 3 battle to remain in business next year, Honda’s Fukui reminded employees and government guests that this gala was just a jump- Festivities in the farmland Honda Manufacturing of Indiana LLC stopped the Honda Civic assembly line so its employees could hear Fukui speak. When the line came to a halt, the employees, dressed in white outfits and green caps, poured into the aisles and headed to the festivities in a corner of the factory. At a time when some automakers ‘A very challenging time’ The employees cheered as the Indiana plant’s Japanese president, Yuzo Uenohara, drove a dark 2009 Civic up to the podium, carrying three beaming employees with him. In Fukui’s only nod to the economic turmoil in the United States and his competitors’ plight in Detroit, he noted that the new plant has begun operation “at a very challenging time” with a “difficult economy and increasing competition.” He added that these challenging times also represent opportunity for Honda and its fuel-efficient Civic. When the festivities concluded, Fukui was whisked away from a large contingent of newspaper, TV and radio reporters. Fukui left perhaps the day’s most important message to a corporate affairs officer attending from Honda’s offices in Torrance, Calif. The message: While Honda celebrates, it does understand the need of Congress to examine some form of support for the Detroit 3. Honda supports measures that would maintain the short- and long-term viability and stability of the auto industry. But Honda also knows it’s good to be on the bright side of the road. You may e-mail Ralph Kisiel at rkisiel@crain.com
Table of Contents Feed for the Digital Edition of Automotive News - November 24, 2008 Iacocca tip: 'Equality of sacrifice' Ch. 11 would hit dealers hard â fast Detroit 3: Bankruptcy = doom Down the road and a continent away Used-vehicle demand shrivels O'Neill will lead Power GM tweaks production plan Mitsubishi: No to Detroit Ford will cut more output Nardelli: Chrysler is running on fumes GMAC on brink of bankruptcy, S&P warns Off with their heads! (But whose?) In defense (kind of) of Detroit Bailout Motors? Britain went down that road CEOs could have pre-empted the grilling Ford: We still want Mazda expertise Imports clog ports as sales plunge Volvo's N.A. boss will resume leases to boost volume Nissan expects Chrysler pickup deal will survive Toyota: Venza is a trendsetter, not a crossover It's time to put partisanship aside; Detroit needs help What GM needs is GMAC.2 'Buy American' talk won't help industry Readers weigh in on auto industy woes No one bailed out Oldsmobile It's time to move to mass transport We still need manufacturing Bankruptcy is a bet Let's get wages under control Will America be better off? First step: Bring the jobs home America owes it to GM to help The answer is simple: Leasing What about dealerships? Detroit 3 CEOs must offer to quit Oct. truck sales fall 17.4% Honda plant adds parts center They're sold on Camaro Drawn to Ferrari Japan poised to control key batteries Europe's worst month hits all automakers Dealers BMW: Diesel 7 series could come to U.S. Honda's FC Sport mixes green and go Infiniti G37's hard top retracts in 30 seconds Redesign of Lexus RX series hard to see Mini electric: Jolt comes from sticker Ford hybrid sedans aim at Camry After only 3 years, Ford revamps Fusion Hyundai plans new crossover, turbo engine Restyled Mustang: More refinement, horsepower Honda: Don't count on CR-Z gasoline variant '09 Nissan Z delivers more of what fans like Mazda3 gets new look, powertrains Nissan Cube joins the box brigade Infiniti upgrades powertrains Lincoln MKZ gets a makeover Porsche won't stall Panamera 2010 GLK priced below rival Bentley's Azure T gets 500 hp Detroit 3 squeezed by credit, cash â politics Waxman could mean trouble for Detroit GM formulates a 'Plan B' if it doesn't get federal loan Infiniti replaces Igo Sharks vs. Jets, D.C.-style What's good for â uh, how'd that go again? Mazda deal imperils Ford training ground More like Toyota, Honda? Careful what you wish for Maybe he's Buck-a-year Bob now Romney: Bankruptcy, not bailout Automotive News - November 24, 2008 Automotive News - November 24, 2008 - (Page Intro) Automotive News - November 24, 2008 - Detroit 3: Bankruptcy = doom (Page 1) Automotive News - November 24, 2008 - Detroit 3: Bankruptcy = doom (Page 2) Automotive News - November 24, 2008 - Ford will cut more output (Page 3) Automotive News - November 24, 2008 - Off with their heads! (But whose?) (Page 4) Automotive News - November 24, 2008 - Off with their heads! (But whose?) (Page 5) Automotive News - November 24, 2008 - CEOs could have pre-empted the grilling (Page 6) Automotive News - November 24, 2008 - CEOs could have pre-empted the grilling (Page 7) Automotive News - November 24, 2008 - Volvo's N.A. boss will resume leases to boost volume (Page 8) Automotive News - November 24, 2008 - Volvo's N.A. boss will resume leases to boost volume (Page 9) Automotive News - November 24, 2008 - Toyota: Venza is a trendsetter, not a crossover (Page 10) Automotive News - November 24, 2008 - Toyota: Venza is a trendsetter, not a crossover (Page 11) Automotive News - November 24, 2008 - 'Buy American' talk won't help industry (Page 12) Automotive News - November 24, 2008 - 'Buy American' talk won't help industry (Page 13) Automotive News - November 24, 2008 - Detroit 3 CEOs must offer to quit (Page 14) Automotive News - November 24, 2008 - Drawn to Ferrari (Page 15) Automotive News - November 24, 2008 - Japan poised to control key batteries (Page 16) Automotive News - November 24, 2008 - Dealers (Page 17) Automotive News - November 24, 2008 - Dealers (Page 18) Automotive News - November 24, 2008 - Dealers (Page 19) Automotive News - November 24, 2008 - Dealers (Page 20) Automotive News - November 24, 2008 - Dealers (Page 21) Automotive News - November 24, 2008 - Dealers (Page 22) Automotive News - November 24, 2008 - Mini electric: Jolt comes from sticker (Page 23) Automotive News - November 24, 2008 - Restyled Mustang: More refinement, horsepower (Page 24) Automotive News - November 24, 2008 - Bentley's Azure T gets 500 hp (Page 25) Automotive News - November 24, 2008 - Bentley's Azure T gets 500 hp (Page 26) Automotive News - November 24, 2008 - GM formulates a 'Plan B' if it doesn't get federal loan (Page 27) Automotive News - November 24, 2008 - Infiniti replaces Igo (Page 28) Automotive News - November 24, 2008 - Infiniti replaces Igo (Page 29) Automotive News - November 24, 2008 - Romney: Bankruptcy, not bailout (Page 30) Automotive News - November 24, 2008 - Romney: Bankruptcy, not bailout (Page 31) Automotive News - November 24, 2008 - Romney: Bankruptcy, not bailout (Page 32)
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