Automotive News - November 10, 2008 - (Page 14) 14 • NOVEMBER 10, 2008 A rough ride is nothing new for autos The industry has been down and come back before Ray Windecker These are difficult days for the auto industry, but, hey, the industry has had tough times before and has survived and prospered. It will work its way through this time of horror, although it won’t be easy, and it won’t be quick. Let’s go back in history and look at some of the difficult periods. In the early 1980s, the auto industry was experiencing one of its all-toocommon short-term sales declines. Sales of new cars and light trucks plunged from 14.9 million in 1978 to 10.4 million in 1982, a decline of 30.5 percent. Some analysts and pundits were forecasting that a fundamental alteration of the long-term automotive sales growth trend would be brought about by many factors, including: High retail prices. Longer ownership cycles. The end of buyers’ love affair with the automobile. Over-regulation of the industry, which resulted in dull product. The end of the fun-truck phenomenon. Dealers and would-be buyers will recall that loan rates were as high as EDITORIAL STAFF 313-446-0361 E-mail autonews@crain.com Web site www.autonews.com Keith E. Crain Publisher and Editor-in-Chief Peter Brown Associate Publisher and Editorial Director DETROIT 313-446-0361 Fax: 313-446-0383 1155 Gratiot Ave. Detroit, MI 48207-2997 David Sedgwick Editor dsedgwick@crain.com Edward Lapham Executive Editor elapham@crain.com Richard Johnson Managing Editor rjohnson@crain.com John K. Teahen Jr. Senior Editor Mary Beth Vander Schaaf Deputy Managing Editor Charles Child International Editor David Kushma Retail Editor Dave Guilford News Editor James B. Treece Industry Editor Jesse Snyder Senior Writer Karen Faust O’Rourke Insight Editor COPY EDITORS: Bob Allen, Tom Fetters, Patricia C. Foley, Kenn Jones, Gregory Skwira Susan Zavela Bamford/Graphics Editor Rick Kranz/Product Editor REPORTERS: Leslie J. Allen, David Barkholz, Mary Connelly, Ralph Kisiel, Jamie LaReau, Arlena Sawyers, Robert Sherefkin, Richard Truett, Bradford Wernle, Amy Wilson Mary Raetz Director, Automotive News Data Center Debi Domby, Camille Pippen Research Assistants Dan Jones Office Manager Peaks and valleys Decline in U.S. sales during automotive recessions CAR-TRUCK UNIT SALES CHANGE 1955 1958 1978 1982 1988 1991 7.8 million 5.1 million 14.9 million 10.4 million 15.5 million 12.3 million –34.5% –30.5% –20.2% Note: Percentages reflect actual rather than rounded numbers. 15.5 million in 1988 shriveled to 12.3 million in 1991, off 20.2 percent. But once again, an upturn was quick and positive. Sales reached a record 17.4 million in 2000 and stayed nicely above 16 million until this year. That has been the pattern. Want to go way, way back? Let’s try 1958. It was the first recession after the end of World War II, and car and truck sales fell like a rock. The 1958 total of 5.1 million was down 34.5 percent from 7.8 million in 1955, the record at that time. In 1960, the total grew to 7.2 million, and in 1963 it was a record 8.5 million. comment Ray Windecker, once research and analysis manager for Ford Motor Co., now heads Autodatum Inc. in Livonia, Mich. day’s economic situation by federal and state governments, sales years of 16.5 million to 17.0 million are on the horizon. Oil embargo hurt 20 percent for floorplanning and for vehicle purchases. Happy days were not here again. All those blips on the screen were difficult times to be selling cars, but many dealers survived, and the trend continued upward. The oil embargo cost the industry 3.2 million cars and trucks from 1973 to 1975, but the numbers were back in gear in 1977. This year is bad; make no mistake. But if sales follow the 1978-82 path, the industry could drop to 12.4 million or fewer deliveries. Yes, as expected, the sales growth trend is slowing as population and employment trends flatten. Yet as more people and jobs come in to the economy, our national transportation fleet must grow because cars and light trucks are the mass transit system of this country. With some understanding of to- What do you think? We would like to hear from you. Send a letter to the editor via e-mail (autonews@crain.com) or to the Detroit address near the top of the box at right. Here’s what we need. No more than 250 words Your name and title, company name if we can print it, city and state; or tell us about your connection to the auto industry Your phone number or e-mail address Your permission to print it Big boom in 1986 But the dire predictions didn’t come true. The recession of those days hung around through 1983; but when the industry started to get well, it got well in a hurry. In 1986, sales zoomed to 16.0 million, a record that lived until 1999. That happened despite even higher prices, more government hurdles and longer ownership cycles. The love affair continued, and the truck market grew 22.5 percent from 1978 to 1986. The early 1990s weren’t anything to write home about, either. Sales of U.S. trade policy gives it all away continued from Page 12 Robertta Reiff Editorial Assistant Corinne M. Price, Michael Garrison Information Center LOS ANGELES Mark Rechtin/Bureau Chief 310-739-8009 Fax: 310-832-6362 Kathy Jackson/Reporter 323-370-2481 Fax: 323-655-8157 Alysha Webb/Reporter awebb@crain.com 6500 Wilshire Blvd. Los Angeles, CA 90048-4947 NEW YORK Diana T. Kurylko/Reporter Phone/fax: 908-273-6059, dkurylko@crain.com WASHINGTON Donna Harris/Reporter 540-668-7295 Fax: 540-668-7296 Harry Stoffer/Reporter 202-662-7212 Fax: 202-638-3155 814 National Press Building Washington, DC 20045-1801 MID-SOUTH Lindsay Chappell/Bureau Chief 615-371-6654 Fax: 615-371-6655 April Wortham/Reporter/615-371-6617 104 East Park Drive, Suite 315, Brentwood, TN 37027 SHANGHAI Steven Ribet/Staff Reporter (86) 21 6431 1227 sribet@crain.com TOKYO Hans Greimel/Asia Editor +81-3-3828-9060 Fax: +81-3-3828-9061 hgreimel@crain.com Yurakucho Denki Bldg., 20th Floor 1-7-1 Yurakucho, Chiyoda-ku, Tokyo 100-0006, Japan TURIN Luca Ciferri/Reporter/lciferri@craincom.de +39-011 961 0194 Fax: +39-011 961 0113 Viale Cavaglia, 8 10029 Villastellone (TO) Italy STAFF CORRESPONDENT: Eric Freedman/Legal file, 517-337-0269 www.autonews.com DETROIT Dave Versical/Editor Automotive News Online dversical@crain.com 313-446-6789 Philip Nussel Managing Editor, Automotive News Online Victor Galvan/Web Editor vgalvan@crain.com 313-446-0345 Scott Kennedy/Multimedia Editor To the Editor: The United States vs. Japan: What is the difference between a Toyota Camry built in Georgetown, Ky., and a Chevrolet Malibu built in Orion Township, Mich.? Both are built in America with 75 percent or more American content and with an American work force. With respect to legendary Japanese quality, what makes a Camry built in Georgetown better than a Malibu built in Orion Township? Is the worker in Kentucky better educated than the Michigan worker? Is Japan a leader in innovative technology or a consumer of incremental improvement of American and European technology? The United States has given Japan start over. I have lost my two automobile dealerships, my condo, my farm, all my retirement funds and all the money I had in the bank. The government did not try to bail me out or help me in any way. Why should it bail out Chrysler and GM because of 25 years of bad management? I have no one to help me get started after 36 years. Why should they? JOHNNY WATKINS London, Ky. The writer is a former dealer. He owned Johnny Watkins Chrysler and Johnny Watkins Buick-Pontiac-GMC. The letter writer asks: What makes a Toyota Camry, right, built in Kentucky better than a Chevrolet Malibu, left, built in Michigan? a free ticket to participate in the world’s largest automotive market. Are we going to give away the automotive industry in the same manner that we did the development and manufacture of the TV set? It is time for a new trade policy in this country. We should tell the other nations of the world, “Our trade policy is what yours is.” If you make nothing, you are nothing. The credit default swap proved that you cannot make something from nothing. GENE MARKEL Owner GEM Enterprizes Troy, Mich. The writer, an automotive technical writer and training developer, retired from GM. He was an engineer there for 30 years. Many dealers turn to credit unions To the Editor: Regarding “Va. dealers turn to local credit unions,” Oct. 27: Evidently, the auto dealers in Virginia have just realized that credit unions can be a valuable resource for their customers. In the story, a dealer is quoted describing doing business with credit unions as “a new approach” in an effort to keep sales afloat. There is nothing new about dealerships doing business with credit unions. Dealerships have been sending their customers to credit unions for many years. In 2006 and 2007, CUDL — for Credit Union Direct Lending — credit unions accounted for more than 17 percent of all U.S. auto loans; and through this September, CUDL had funded more than 433,000 loans amounting to $8.9 billion in sales. Thousand of dealers and hundreds of credit unions nationwide already knew that credit unions have the financing that fits for the automobile dealer. RON LEAVITT Dealer Account Representative CUDL Rancho Cucamonga, Calif. CUDL is a Web portal where dealers can have access to credit union financing. Dealer’s politics were pertinent To the Editor: Automotive News did its readers a great disservice by not disclosing openly Don Beyer’s political affiliations when it presented him as just another dealer in an Oct. 13 article contrasting the Obama and McCain tax proposals (“2 views: How the candidates’ tax plans affect dealers”). Surely Automotive News is aware that Don Beyer was the Democratic lieutenant governor of Virginia in 1990-98 and that he ran for governor as a Democrat in 1997. He endorsed Barack Obama publicly and obviously was familiar with the Obama campaign’s talking points on tax policy. ED MOLCHANY Canton, Mich. The writer for http://www.autonews.com http://www.autonews.com
Table of Contents Feed for the Digital Edition of Automotive News - November 10, 2008 Life at 11 million: Slash, rethink The options: Bailout or disaster Can Toyota reheat the frozen Tundra? Chrysler dealers cheer halt to merger talk VW will unveil roadster at Detroit auto show BMW boosts dealers' year-end ad money Mercedes' $220 million flagship Mercedes hit hard in Northeast, once a sales stronghold Mercedes will kill CLK, add larger coupe, convertible Mitsubishi reclaims its finance business Toyota's Esmond to speak at congress Loss is more: Europe snatches bigger share of U.S. market Cash burn rates threaten GM, Ford GMAC: We're nobody's captive As losses mount, suppliers risk cash-flow crunch Tata: Yes to Jaguar XF derivative, no to SUV U.S. aid is needed now, but not to help Cerberus They are too big to fail Why should we help GM and Chrysler? First and foremost, you must be flexible U.S. trade policy gives it all away To the Editor: A rough ride is nothing new for autos Dealer's politics were pertinent Chrysler's 1st electric: Probably a cargo van Auto meltdown forces Mercedes to scrap prediction of sales record Boosting mpg will bump up stickers, too Adding up the tab for fuel economy Camaro Black: Eye-catching, affordable and available Honda sees green in Civic HFP's street performance Honda offers peek at future Fit Ford F-150 Raptor flies off-road Souped-up, tricked-out â and headed for the showroom Report: Toyota plans $5,000 car Amid gloom, Mazda chief sees revival in 2009-10 Report: Past-due subprime loans jump Toyota aims to win loyalty with credit card Study: Car buyers turn green for different reasons Thanks, buddy Hyundai helps Dealers Metaldyne offers pennies to bondholders Obituaries Personnel As expected, Oct. sales sank Another Chinese automaker plans Mexico factory Honda backs off U.S. clean diesels Industry pal, foe vie for key post in Congress Industry expects more activism from D.C. N.A. output falls 19.9% Toyota moves in striking distance of GM's U.S. sales crown Going, going . . . An ex-GM exec's view: It's going to get nasty Sex, Nazis, chicken and BMW: A scandal that puts fiction writers to shame Recession rips up roadster market Toyota takes heat for 'the herpes of the advertising world' Want to boost mpg? Turn up the heat on AC Cutting energy loss: A nibble here, a nibble there ... Carbon slashes weight, but it's still too pricey Carmakers shift to gears in search of mpg gains Natural gas draws interest as alternative fuel Friction? Ay, there's the rub Electric for a week Automotive News - November 10, 2008 Automotive News - November 10, 2008 - (Page Intro) Automotive News - November 10, 2008 - (Page Bellyband1) Automotive News - November 10, 2008 - (Page Bellyband2) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 1) Automotive News - November 10, 2008 - The options: Bailout or disaster (Page 2) Automotive News - November 10, 2008 - VW will unveil roadster at Detroit auto show (Page 3) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 4) Automotive News - November 10, 2008 - Mercedes hit hard in Northeast, once a sales stronghold (Page 5) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 6) Automotive News - November 10, 2008 - Loss is more: Europe snatches bigger share of U.S. market (Page 7) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 8) Automotive News - November 10, 2008 - As losses mount, suppliers risk cash-flow crunch (Page 9) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 10) Automotive News - November 10, 2008 - Tata: Yes to Jaguar XF derivative, no to SUV (Page 11) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 12) Automotive News - November 10, 2008 - First and foremost, you must be flexible (Page 13) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 14) Automotive News - November 10, 2008 - Dealer's politics were pertinent (Page 15) Automotive News - November 10, 2008 - Auto meltdown forces Mercedes to scrap prediction of sales record (Page 16) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 17) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 18) Automotive News - November 10, 2008 - Boosting mpg will bump up stickers, too (Page 19) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 20) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 21) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22a) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22b) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22c) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22d) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22e) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22f) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22g) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22h) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22i) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22j) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22k) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 22l) Automotive News - November 10, 2008 - Adding up the tab for fuel economy (Page 23) Automotive News - November 10, 2008 - Souped-up, tricked-out â and headed for the showroom (Page 24) Automotive News - November 10, 2008 - Amid gloom, Mazda chief sees revival in 2009-10 (Page 25) Automotive News - November 10, 2008 - Toyota aims to win loyalty with credit card (Page 26) Automotive News - November 10, 2008 - Hyundai helps (Page 27) Automotive News - November 10, 2008 - Dealers (Page 28) Automotive News - November 10, 2008 - Personnel (Page 29) Automotive News - November 10, 2008 - Personnel (Page 30) Automotive News - November 10, 2008 - Personnel (Page 31) Automotive News - November 10, 2008 - Personnel (Page 32) Automotive News - November 10, 2008 - Personnel (Page 33) Automotive News - November 10, 2008 - Personnel (Page 34) Automotive News - November 10, 2008 - Personnel (Page 35) Automotive News - November 10, 2008 - Personnel (Page 36) Automotive News - November 10, 2008 - As expected, Oct. sales sank (Page 37) Automotive News - November 10, 2008 - Honda backs off U.S. clean diesels (Page 38) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 39) Automotive News - November 10, 2008 - Industry expects more activism from D.C. (Page 40) Automotive News - November 10, 2008 - N.A. output falls 19.9% (Page 41) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 42) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 43) Automotive News - November 10, 2008 - Toyota takes heat for 'the herpes of the advertising world' (Page 44)
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