Automotive News - May 12, 2008 - (Page 10)

10 • MAY 12, 2008 Suddenly, small was big in April John K. Teahen Jr. April was a terrible month for the overall sales of new cars and light trucks, but one segment of the market feasted while the others fasted: Small cars. Ever since the price of gasoline began heading for the stratosphere, those in the know have been talking of a small-car boom. Not exactly a divinely inspired idea. With gasoline leaping past $3 a gallon and pushing $4 and with much talk of $5, car buyers naturally want to wring as many miles as possible out of every gallon. But the move to small, four-cylinder gas-sippers was slow. In the first quarter, small-car sales rose only 1.8 percent. The tiny tots (the Kia Rio, Scion tC , Honda Fit and Toyota Yaris) were up sharply, but the small-car class as a whole had just as many losers as winners. Then came April. A lot of incurable optimists who were expecting the price of gasoline to fall apparently woke up to reality. They bought the high-mpg model they had been looking at but hoped they would never have to drive. Small-car sales rose 19.2 percent in April compared with April 2007. They had dropped 2.2 percent in March. salestales John K. Teahen Jr. is the senior editor of Automotive News. quarter, pickup sales were down 15.0 percent. In April, the drop was 19.9 percent. SUVs were smacked harder: down 24.5 percent for the quarter but off 32.8 percent in April. Here’s how some of the big pickups fared in April: The Toyota Tundra was off only 6.0 percent from last year, but the Nissan Titan was down 51.1 percent. Sales of the Detroit 3 pickups — the Ford F series, Dodge Ram, Chevrolet Silverado and GMC Sierra — declined 21.0 to 24.7 percent. George Pipas, Ford Motor Co.’s sales analyst, estimates that 25 to 30 percent of pickup buyers don’t really need a pickup. Well, they’re not buying them anymore. SUVs suffered even more, especially the midrange nameplates (the Chevrolet TrailBlazer, Dodge Durango, Hummer H3, Nissan Pathfinder and Ford Explorer). TrailBlazer sales in April were down 73.0 percent from last year. Other declines included the Mercury Mountaineer, 55.7 percent; Durango, 45.1 percent; H3, 47.0 per- cent; and Pathfinder, 40.9 percent. But the premium-priced large SUVs dipped only 4.5 percent in April — lines such as the Cadillac Escalade, Lincoln Navigator and Lexus LX 470. Buyers in that price stratum obviously are not concerned about a little thing like $4-a-gallon gasoline UAW vote may be nearing at Honda’s Alabama plant Ralph Kisiel rkisiel@crain.com The fad is fading General Motors announced last month that it has eliminated several shifts at pickup and SUV plants, cutting production by 138,000 units for the rest of this year. It was Page 1 news in Detroit, but it came as no surprise to regular readers of SalesTales. I have been warning for a long time that the pickup boom was about to run its course and that buyers would again want cars — a product that the Detroit 3 are woefully short of. I must admit I didn’t foresee $4-a-gallon gasoline this soon. But pickups are falling from favor, and the fall will continue. As for SUVs, I’ve called them a fad, and I’ve been royally excoriated by devotees of those vehicles. I’ll stick to my guns; fads run their course, and that’s what is happening to SUVs. Think Hula Hoop, yo-yo, Rubik’s Cube. To my mind, the end of the fad has just as much to do with the decline of SUV sales as the rising price of gasoline. You may e-mail John K. Teahen Jr. at jteahen @crain.com Trucks, SUVs collapse Just as the small-car market came into its own in April, the pickup and SUV markets collapsed. In the first Employees at Honda Motor Co.’s Lincoln, Ala., factory could be voting within several months on whether to join the UAW. UAW representatives have been helping a core group of Honda workers at the factory generate support for a union. The plant assembles the Honda Odyssey minivan and Pilot SUV. Honda Manufacturing of Alabama LLC employs 4,500 workers there. “We know all the issues that the associates have. We’re beyond that point,” Mychal Boyd told Automotive News. “I think we’re moving forward. We’re close to a vote. It may be just months away.” Boyd, a quality assurance employee at the plant, is part of the core group. The group of employees pressing for union representation has grown from 40 last summer to about 180 today. The group invited the UAW to try to organize a union at the plant. In two meetings in mid-August, about 500 Honda employees met with UAW representatives at a nearby motel. Since then, the core group has identified employee concerns, distributed literature and talked with colleagues about the benefits of a union, Boyd said. The Lincoln plant, about 35 miles east of Birmingham, Ala., opened in November 2001. Wages are not an issue with employees, Boyd said. He identified the three top employee concerns as favoritism in promotions, high medical insurance premiums and lack of retirement health benefits. The core group meets once or twice a week and now has its own meeting hall in Lincoln. Boyd said Honda employees are willing to listen to the group’s pitch. “We’re well into the process of educating everyone about a union, its benefits, the pros and cons,” he said. In response to the organizing effort, Honda sent employees a pointed, anti-union letter in September reminding them that Honda’s North American auto operations have managed to avoid even a single layoff for nearly 30 years. Mark Morrison, the plant’s communications manager, said he has not heard about an approaching vote. Union supporters are allowed to distribute literature to employees at the plant entrance on their own time during noncore hours, he said. The union supporters have not been disruptive, Morrison said. The plant began mass-producing the redesigned 2009 Pilot on April 15. “Our focus has been on getting everything right with the ’09 Pilot,” Morrison said. “We’ve had a smooth startup.” c The Ford Technical Career Entry Programs (TCEP) are your connection to the technicians you need today to provide quality service to Ford or Lincoln Mercury vehicles. We cover a wide range of certification levels to meet your needs. Because all our graduates receive Ford Service Technician Specialty Training, they have the right credentials to add to your service department’s success. “We h eartily en d o rse t h e ML R p ro g ram, its s t u d e n ts an d o f co u rse it s teach ers . . . ” Gerry Nu cifo ra M alo u f F o rd -L in co ln Mercury N o rt h Bru n swick, NJ C o n n e cti n g Yo u r De a l e r sh i ps w i th W i n n i n g Te ch n i ci a n s Add Technical Career Entry Programs to “My Top Spots” on your FMCDealer home page today! “The future of our business depends on trained techs, a n d NT I F ACT i s p r o v i d i n g wh a t w e n e e d . ” Ra n d y Z y d o i k Service Manager Hu n t s v i l l e F o r d

Table of Contents Feed for the Digital Edition of Automotive News - May 12, 2008

Automotive News - May 12, 2008 Factories Punish Rogue Exporters U.S. Firms Sink on Supplier List Clarke: Buyers Don't Know Saturn Brand Greer Takes Top Sales Post At Automotive News Sonic Sues Mercedes-Benz Fiat Ponders Mexico Plant Ford: Wait on Kerkorian Going Green: It's No Longer An Option LaSorda Reaffirms Axle Plant Plan Chrysler: Jeep Seats From India Make Sense Toyota Exec: Maybe It's Time to Raise a Prius Hybrid Gamily Chevy Traverse, Ford Flex Face Off This Year As U.S. Waits, Chrysler Sends Cars Made in China to Mexico Nissan Plans Wide Range of Electric Vehicles Honda: Sales are Flat, But Market Share Soars Kia to Bring Small Car to U.S. Changing Models Yearly Created Object of Desire Fla. Law: Automakers Can't Force Dealer Upgrades Partnership Seeks "Premier" Stores GM Payback for Axle Bailout: Lower Prices, Innovation UAW Vote May Be Nearing a Honda's Alabama Plant Suddenly, Small Was Big in April GM's Big Problem: Too Many Brands Irvin Was Smart, Friendly, Helpful Dealers Are Tuned in to Absorption Figures Dealers Should Sell Alternative Fuels Museum Funding is Bold Watch Your Car-Truck Inventory In Tough Times Dealers Must Coddle Customers Ford's Challenge: Long-term Reliability Nissan N.A. Unit Gets New Head of Communications Maserati North America Taps Luxury-Segment Veteran Eulberg as CEO Former GM PR Chief Joins BMW Nissan: N.A. Off the Hot Seat VW Uses Free Service to Improve Sales, Image Shops Cited For Labor Violations Survey: Consumers Like Indie Shops Report Cites Trends in Repair Costs Aftermarket Center Opens at Mich. College Dealers Mich. Stores Merge Under Project Genesis VW is Europe's Top Seller Honda Exec Red-Flags Detroit 3 Aid Court: Auction Not Liable for Truck Defect Retail Personnel Canada Sales Post 3.8 Percent Gain in April Chrysler Asks Dealers to Donate to Museum Obituaries Complaint Will Delay UAW Revote at JCI Plant Supplier Deals are Smaller, Fewer GM's Truck Inventories Up Despite Strike Profits Up at Superior Industries Autobytel Post $2 MIllion Loss eBay Motors Courts Automakers Ford Touts 6-Speed Transmissions Toyota Raises Some Prices No Pickup for Hyundai, Kia April Output Drops 7.8 Percent Trustee Must Untangle the Chamco Debacle Scientists Say Chysler's Gas Plan is Just a Dodge From Cookie Sales to Auto Dough? In Europe, Small SUVs Soar; GM's Snore Daimler Seems to Be Betting On Peace in Iraq When Soccer Booms, VW Will Be Ready Molder AMP is a Case Study in Auto-Suppliers' Travail Spinoff Dismatles ArvinMeritor Ambitions GKN Driveline to Grow in China Kia Supplier Builds Ga. Plant BorgWarner Adds Turbo Capacity Supplier Personnel Supplier IAC Consolidates Operations and Know-How Mann + Hummel Sees Growth

Automotive News - May 12, 2008

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.