Automotive News - September 29, 2008 - (Page 4) 4 • SEPTEMBER 29, 2008 Chase cuts back on auto leasing Donna Harris dharris@crain.com More or lease In the first half of 2008, these were the largest U.S. vehicle lessors other than automakers’ captive finance companies. COMPANY U.S. MARKET SHARE (%) Chase Auto Finance, the No. 3 U.S. auto lender, has slashed its leasing business. On Sept. 1, Chase stopped writing new leases on all but Subaru and Saturn vehicles. The lender has contracts to provide financial services to those brands. Next month, Chase will launch a similar relationship with Mazda. In the first half of 2008, Chase Auto Finance had nearly 5.2 percent of the overall U.S. auto lending market, trailing only Toyota Financial Services and GMAC Financial Services, according to Experian AutoCount. Chase had 1.8 percent of the leasing U.S. Bank Chase Auto Finance World Omni Financial Corp. Fifth Third Bancorp Source: AutoCount, Experian Automotive 1.9 1.8 1.4 0.6 market, Experian estimated. Chase spokesman Mary Kay Bean said the bank is “focusing on the profitable segments of the business. … We decided to limit our lease and balloon financing offers to our manufacturing partners to keep our lease portfolio small.” Chase stopped writing leases on Chrysler LLC vehicles in August, shortly after Chrysler Financial abandoned U.S. leasing. Other large auto lenders also have cut back on leasing. At the end of July, Wells Fargo Auto Finance stopped writing leases. This summer, GMAC and Ford Motor Credit Co. reduced their leasing business, especially to customers with poor credit. In the first half of 2008, one of every five new vehicles sold at retail in the United States was leased, up from one in seven in 2003, according to J.D. Power and Associates. But high gasoline prices have caused values of large trucks to depreciate sharply. The lease business deteriorated as lenders lost money on used vehicles coming off lease. Nine of the 10 largest vehicle lessors in the United States are automakers’ captive finance companies, according to Experian. The 10th-ranked lessor, U.S. Bank, remains committed to leasing, spokeswoman Jennifer Wendt said. Some banks say the departure of other lessors gives them the opportunity to pick up lease business. Nicholas Stanutz, executive vice president of consumer credit for Huntington Bancshares Inc., said the Columbus, Ohio, company now offers leases through Chrysler LLC dealers in Michigan. The leases are for terms “we’re comfortable with,” Stanutz said. “The credit quality is outstanding.” Stanutz said he hopes dealerships that send retail lease business to Huntington also will finance loan customers through his bank. He said Huntington wants to work with dealerships on inventory financing, noting that GMAC and Chrysler Financial recently raised dealers’ floorplan costs. Said Stanutz: “We want to grow in this industry.”c Target for Traverse: No. 1 in large crossovers Amy Wilson awilson@crain.com BRENDA PRIDDY & CO. ■ Tucson revisited Hyundai’s next-generation Tucson crossover was caught last week during testing out West. Two noticeable differences from today’s model are the greenhouse and beltline. On the new model, the beltline slopes upward as it flows to the end of the vehicle, while the greenhouse roof slopes downward, leaving space for a small window behind the C-pillar. The redesigned Tucson will go sale in 2010 as a 2011 model. Hyundai will drop the current six-cylinder engine option and offer only a four-banger. DETROIT — Toyota and Honda dominate the large-crossover segment, but Chevrolet says it can beat them both with the new Traverse. How to outsell the segment leaders, the Toyota Highlander and Honda Pilot? With a bigger retail network, of course, and incentives from the getgo. Toyota sold 127,878 Highlanders in 2007 and Honda sold 117,146 Pilots. Chevrolet boss Ed Peper says the Traverse can do better. Chevy plans to offer a cash rebate to non-General Motors vehicle owners who buy a Traverse. That cash is not yet available. “We need to conquest,” Peper said. “We need fresh people.” Chevy already has a $2,000 cash rebate available to buyers coming off leases with GMAC and other financing companies. That offer applies to all Chevrolet models, a company spokesman said. The Traverse starts at $28,990, including shipping. As of last week, the Traverse’s main incentive was a $2,000 cash rebate available to buyers coming off leases with GMAC and other financing companies. That offer applied to all Chevrolet models, the spokesman said. Besides established competitors such as the Pilot and Highlander, the Traverse will compete against the new Ford Flex and three GM siblings: the Buick Enclave, GMC Acadia and Early incentives could help the Traverse beat Highlander and Pilot. Saturn Outlook. Commercials for the Traverse began airing during the Summer Olympics in August. In the third week of September, the crossover began arriving at dealerships. After a brief hiatus, ads resumed in September and will run through year end, Peper said. He declined to share the Traverse’s marketing budget. Chevy dealers are glad to get the Traverse in their showrooms. But with four similar crossovers from GM, the challenge for dealers will be getting customers to tell the family members apart. That’s been a major criticism of GM’s platform-sharing strategy. Brian Boyd, general manager of Charles Boyd Chevrolet-PontiacCadillac-Buick-GMC in Henderson, N.C., said he has to be careful with his Traverse orders so as not to crowd the higher-priced GMC and Buick models. He plans to order lower-priced versions of the Chevrolet and higher trim levels of the GMC and Buick. “We have to price-point this vehicle so we can still sell our Envoys and Acadias,” Boyd said, “because they are duplicate vehicles to a point.”c BMW’s new 7 series: Timing may be all wrong Diana T. Kurylko dkurylko@crain.com The redesigned BMW 7: It’s sleeker, and the iDrive is simpler. WOODCLIFF LAKE, N.J. — BMW’s new North American chief is worried about the launch of the redesigned 7 series next year. With credit markets collapsing, Jim O’Donnell, CEO of BMW (U.S.) Holding Corp., says he has little hope for increased sales of the flagship sedan. At best, he says, BMW wants its new 7, which goes on sale in March, to do better than the overall import luxury segment. “As a percentage of the segment, it will do better, but the segment will continue to be depressed this year and through next year,” O’Donnell says. The United States continues to be the car’s biggest market. The price of the current 7 series ranges from $77,625 to $126,625, in- cluding shipping. The new car’s price is expected to rise. Dealers don’t have pricing or detailed product data. Ordering will start at year end and deliveries in March. O’Donnell is confident the current model will be sold out by year end: “We’ll have a two-month gap — and that will be ideal — when there’s not a car in sight.” O’Donnell says the iDrive control system has been further simplified. The system has a larger display screen, and climate control adjustments are on the instrument panel. The shifter on the steering wheel — a feature that annoyed customers — has been moved back to the center console. The styling also has changed. The prominent rear deck — dubbed the “Bangle butt,” after BMW’s chief de- signer, Chris Bangle — has been replaced with a much smoother rear. But despite the sniping, several manufacturers copied the rear because of the aerodynamic benefits. The redesigned 7 series gets a newgeneration, 4.4-liter V-8 engine with direct injection and twin turbocharging. Weight has been reduced by extensive use of aluminum in the body and major components. The suspension is new and has damping control that sets shock-absorber firmness. Advanced technology includes lane departure warning, blind-spot detection, a head-up display, night vision with pedestrian detection and backup cameras.c
Table of Contents Feed for the Digital Edition of Automotive News - September 29, 2008 GM, Ford and Chrysler place new-product bets Credit freeze could mean cash crisis Mr. Big Volume reaches the end of the line Korea's revolving door Mazda quits Ford Credit for Chase Mitsubishi, UAW reach tentative agreement Volt could break feds' 100 mpg ceiling Chase cuts back on auto leasing Target for Traverse: No. 1 in large crossovers BMW's new 7 series: Timing may be all wrong Tucson revisited Can Ford light fire under Fiesta? Lithia puts brakes on used-car stores Revived Mercury will focus on 3 segments VW taps 'zealots' to promote diesels Farley, Leuliette will kick off World Congress The new Soul (and nose) of Kia Hyundai: Drivetrain key to more mpg Taxpayers at risk if firms get fed loans - then fail GM plans high-tech small engines for Volt and Cruze Buick looks upscale Denso says U.S. woes will cut its profits Denso: No plans to make hybrid parts in U.S. Bailouts are a bad idea Chic small cars? Check them out at the Paris show Credit's no problem, but a weak brand is Helping dealers helped GM Ford field rep didn't help at all Who knew? Electric cars are fun to drive Where is the power going to come from? Hyundai shifts its U.S. ad agency Hyundai, Kia mold separate identities Behind on hybrids, Hyundai sets high goals Dealers Flashes of genius, years of turmoil No cop-out; car designed for police use PICTURE THIS: A trip to the bank RV sales drop 31.9% in June Mexico sales off 4.8% in Aug., 1.2% for 8 mos. Suzuki to aim pickup at motorcycle owners Experts: Learn Korean hierarchies Readers' comments on Bill Heard's collapse Bill Ford sells some Ford stock CarMax net income falls ArvinMeritor raises forecast Toyota plans CNG concept Chrysler cuts 250-300 salaried workers Minority supplier drops stamping business Will Cerberus buy up Chrysler to wave bye-bye? Rioters kill supplier exec in India No pickup seen for pickups Piech's ploy was masterstroke in war with Porsche Honda's highway groove music: It sounded better on vinyl St. Louis dealer to paper that outsourced typesetters: 'Deal me out' Automotive News - September 29, 2008 Automotive News - September 29, 2008 - (Page Intro) Automotive News - September 29, 2008 - (Page Bellyband1) Automotive News - September 29, 2008 - (Page Bellyband2) Automotive News - September 29, 2008 - Mr. Big Volume reaches the end of the line (Page 1) Automotive News - September 29, 2008 - Mr. Big Volume reaches the end of the line (Page 2) Automotive News - September 29, 2008 - Volt could break feds' 100 mpg ceiling (Page 3) Automotive News - September 29, 2008 - Tucson revisited (Page 4) Automotive News - September 29, 2008 - Tucson revisited (Page 5) Automotive News - September 29, 2008 - The new Soul (and nose) of Kia (Page 6) Automotive News - September 29, 2008 - The new Soul (and nose) of Kia (Page 7) Automotive News - September 29, 2008 - Buick looks upscale (Page 8) Automotive News - September 29, 2008 - Buick looks upscale (Page G1) Automotive News - September 29, 2008 - Buick looks upscale (Page G2) Automotive News - September 29, 2008 - Buick looks upscale (Page G3) Automotive News - September 29, 2008 - Buick looks upscale (Page G4) Automotive News - September 29, 2008 - Buick looks upscale (Page G5) Automotive News - September 29, 2008 - Buick looks upscale (Page G6) Automotive News - September 29, 2008 - Buick looks upscale (Page G7) Automotive News - September 29, 2008 - Buick looks upscale (Page G8) Automotive News - September 29, 2008 - Buick looks upscale (Page G9) Automotive News - September 29, 2008 - Buick looks upscale (Page G10) Automotive News - September 29, 2008 - Buick looks upscale (Page G11) Automotive News - September 29, 2008 - Buick looks upscale (Page G12) Automotive News - September 29, 2008 - Flashes of genius, years of turmoil (Page 9) Automotive News - September 29, 2008 - Denso says U.S. woes will cut its profits (Page 10) Automotive News - September 29, 2008 - Denso says U.S. woes will cut its profits (Page 11) Automotive News - September 29, 2008 - Ford field rep didn't help at all (Page 12) Automotive News - September 29, 2008 - Ford field rep didn't help at all (Page 13) Automotive News - September 29, 2008 - Where is the power going to come from? (Page 14) Automotive News - September 29, 2008 - Where is the power going to come from? (Page 15) Automotive News - September 29, 2008 - Hyundai, Kia mold separate identities (Page 16) Automotive News - September 29, 2008 - Hyundai, Kia mold separate identities (Page 17) Automotive News - September 29, 2008 - Behind on hybrids, Hyundai sets high goals (Page 18) Automotive News - September 29, 2008 - Behind on hybrids, Hyundai sets high goals (Page 19) Automotive News - September 29, 2008 - Dealers (Page 20) Automotive News - September 29, 2008 - Dealers (Page 21) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 22) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 23) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 24) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 25) Automotive News - September 29, 2008 - RV sales drop 31.9% in June (Page 26) Automotive News - September 29, 2008 - Mexico sales off 4.8% in Aug., 1.2% for 8 mos. (Page 27) Automotive News - September 29, 2008 - Suzuki to aim pickup at motorcycle owners (Page 28) Automotive News - September 29, 2008 - Experts: Learn Korean hierarchies (Page 29) Automotive News - September 29, 2008 - Readers' comments on Bill Heard's collapse (Page 30) Automotive News - September 29, 2008 - Chrysler cuts 250-300 salaried workers (Page 31) Automotive News - September 29, 2008 - Minority supplier drops stamping business (Page 32) Automotive News - September 29, 2008 - Minority supplier drops stamping business (Page 33) Automotive News - September 29, 2008 - St. Louis dealer to paper that outsourced typesetters: 'Deal me out' (Page 34) Automotive News - September 29, 2008 - St. Louis dealer to paper that outsourced typesetters: 'Deal me out' (Page 35) Automotive News - September 29, 2008 - St. Louis dealer to paper that outsourced typesetters: 'Deal me out' (Page 36)
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