Money & Company

Tracking the market and economic trends
that shape your finances.

Category: Jerry Hirsch

Real Estate | Autos | Consumer | Economy

Auto sales: Toyota, Honda slide while rivals post October gains

Toyota

The biggest Japanese automakers continue to have trouble in the U.S. market.

Toyota said its October U.S. sales fell 8% to 134,046 vehicles. 

The company has struggled to rebound from a series of large recalls and more lately production and inventory disruptions caused by the Japanese earthquake back in March. 

Now both Toyota and Honda are suffering from new problems in their parts supply chain caused by flooding in Thailand.  Both are dialing back production, even at their North American factories.

Honda said its October sales fell 1% to 87,218 vehicles.

However, Nissan North America said its U.S. sale rose 18% to 82,346 vehicles. Its Nissan brand set an October record, increasing 22% for the month. However the company's Infiniti luxury car division went in reverse. Sales fell 14% compared with the same month a year earlier.

The Nissan brand sales were helped by better availability of vehicles compared with Toyota and Honda. Nissan was less affected by production disruptions and inventory shortages caused by the earthquake. 

Any new shortages that develop for Honda and Toyota because of the flooding in Thailand will probably benefit Nissan in the coming months, said Bill Visnic, an analyst with auto information company Edmunds.com.

Other foreign automakers also are doing well in the U.S. market.

Hyundai said its sales rose 23% to 52,402 vehicles. The South Korean automaker's year-to-date sales of 545,316 vehicles broke its full-year sales record of 538,228 set in 2010. The company is on pace to sell more than 600,000 vehicles this year.

Kia, Hyundai's corporate sibling, also had a strong month. It posted its best-ever October, logging sales of 37,690 vehicles, a 21% increase over the same period last year and the company's 14th straight monthly sales record.  It also has surpassed all previous annual sales records, having sold more than 405,000 vehicles so far this year.

Meanwhile, BMW Group reported combined October sales of is BMW and Mini brands reached 27,288 vehicles, an increase of 18% from the same month a year earlier.

“Auto sales are probably the best indicator of economic direction and the critical fourth quarter has made a good start,” said Ludwig Willisch, chief executive of BMW of North America.

Mercedes-Benz USA reported October sales of 24,449 vehicles, a 28% increase from a year ago and the company's highest October U.S. sales on record.

The domestic auto companies all posted gains in October.

Ford Motor Co.'s sales rose 6% to 167,803 vehicles, with sport-utility vehicles including the Escape and Explorer selling briskly.

General Motors Co. said its sales rose only a modest 2%, to 186.895 vehicles, compared with October of 2010.

Chrysler Group said its sales rose 27% to 114,512 vehicles, its best October since 2007.

RELATED:

Can auto industry sustain sales gains?

General Motors October auto sales stall 

European brands have reliability woes

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: A 2012 Toyota Camry on display at a car dealership in San Jose, Calif. Credit: Associated Press

Auto sales: Ford gains 6% in October, but can industry surge last?

Fordgetprev

Ford Motor Co.'s U.S. auto sales rose 6% in October to 167,803 vehicles, with sport-utility vehicles including the Escape and Explorer selling briskly.

Ford's report came as part of what most analysts expect will be a strong month for auto sales.

General Motors Co. said its U.S sales rose only a modest 2%, to 186.895 vehicles, compared with October of 2010.

But Chrysler Group said its sales rose 27% to 114,512 vehicles, its best October since 2007.

The industry is humming at an annual sales pace of more than 13 million vehicles, the best rate in several years.

While the October sales reports looked good, some in the industry believe the pace isn’t sustainable.

The strong numbers for both September and October represent shoppers who deferred their purchases due to the high prices and shortages in late April through August, said Jeremy Anwyl, chief executive of auto information company Edmunds.com.

Edmunds estimates that the sales of about 200,000 were deferred from earlier this year and that the industry is now playing catch-up.

“Depending on pricing and availability through December, most of this should play itself out by year-end,” says Anwyl. “This suggests we should view sales in October with a degree of caution. The performance over the past few months is not the start of a trend. It is more of a mini-bubble.”

But others believe the industry has some strength heading into the year-end.

“We expect the industry will be approaching 13 million in terms of absolute sales for the year,” said Jonathan Browning chief executive of Volkswagen Group of America. “The momentum is there although it is somewhat fragile” because of mixed economic data and sagging consumer confidence. 

Volkswagen had a particularly good October. Its sales rose 40% to 28,028 vehicles, its best October since 2001. The results did not include the company's Audi brand.

And Browning said the company has already surpassed its annual total for 2010,

RELATED:

GM October auto sales stall

European brands have reliability woes

Ford tumbles in Consumer Reports reliability ratings

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: 2011 Ford F-150 trucks at a dealership in Glbert, Ariz. Credit: Associated Press

Auto sales: General Motors stalls in an otherwise strong October

Chev

October was one of the auto industry's best sales months in years.

General Motors Co. said its U.S sales rose only a modest 2%, to 186.895 vehicles, compared with October of 2010.

But Chrysler Group said its sales rose 27% to 114,512 vehicles, its best October since 2007.

“In what is turning out to be a strong new vehicle sales industry we continued to outperform” the industry, said Reid Bigland, the automaker's sales chief.

He said consumers were behind Chrysler's big gain. The automaker's retail sales -- after subtracting out the vehicles that go to rental car companies, governments and commercial users -- rose 40% over the same month a year earlier.

And other automakers were expected to do well. 

Volkswagen said its sales rose 40% to 28,028 vehicles, its best October since 2001. The results did not include the company's Audi brand.

“As the all-new Passat and Beetle start to enter the marketplace, demand for Volkswagen vehicles has already exceeded last year’s annual volume in the first 10 months of the year, “ said Jonathan Browning, chief executive of Volkswagen Group of America,

By the time all the carmakers report, auto information company Edmunds.com estimates an annual sales pace of 13.4 million. Other estimates come in lower but almost all are above the 13-million mark.

“The relatively strong selling rate seen again in October suggests that the fourth quarter may close stronger than previously expected,” said Jeff Schuster, an analyst at J.D. Power and Associates. “Recent bright spots in the economy may also help calm nerves and support stable vehicle sales, but risks remain and consumer confidence is still low, tempering the outlook for 2012.”

There is some division in the industry as to whether the stronger sales rate in October was an indicator of stronger economy -- ot withstanding recent negative consumer confidence measures -- or a byproduct of lost sales earlier this year resulting from an inventory shortage caused by the Japanese earthquake. 

Shoppers may have delayed purchases until brands such as Toyota and Honda had a better supply of vehicles to choose from.

The Japanese automakers have been building back their inventories in recent weeks. But now flooding in Thailand threatens their recovers. Honda plans to cut North American production back by at least 50% in early November because it can't get certain electronics parts out of Thailand. Toyota said it is limiting overtime and also ratcheting back some production.

RELATED:

European brands have reliability woes

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: Sales associate Chuck Monsour, left, shows Rita Hovermale a Chevy Malibu at the Bobby Murray Chevrolet dealership in Raleigh, N.C. Credit: Bloomberg

Honda will slash production because of new parts shortage

 

Honda will cut production of cars at its North American factories because of parts shortage caused by flooding in Thailand.

Just as Honda was recovering from a production disruption and inventory shortage caused by the Japanese earthquake, it has been hit with another natural disaster –- flooding in Thailand that is causing a parts shortage.

Honda says it will slash production at its U.S. factories by half through Nov. 10 and shutter its factories for a day on Nov. 11. It also has cut all overtime production for November.

About 87% of the Honda and Acura automobiles that the automaker sells in the U.S. are assembled here.

Most of the parts come from North American suppliers, but Honda said it also buys “a few critical electronic parts” from Thailand and other regions of the world.

Honda said it is working with suppliers in Thailand and elsewhere in its network to resume production of the parts it needs for its North American factories.

Honda said it will try to help out its U.S. factory workers by counting any “non-production days” as “no pay, no penalty” days. That means Honda employees can report to work, use a vacation day, or take the day off without compensation or penalty.

Honda’s U.S. sales have slid 6% to just under 860,000 vehicles so far this year. It’s share of the U.S. market has slid to 9% from 10.6%.  A portion of the decline has come from the shortage of vehicles it had available for sale caused by the parts shortages from the Japanese earthquake and tsunami in March.

Meanwhile, Honda said that its net profit for its fiscal second quarter ending in September fell 56% to 60.4 billion yen ($788 million.) Revenue slid 16% to 1.885 trillion yen ($24.6 billion.)

RELATED:

European brands have reliability woes

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: 2012 Honda Civic. Credit: Honda Motor Co. 

Chrysler Group swings to a profit in third quarter

Chrysler earned a third quarter profit.

Chrysler Group said it swung to a profit in the third quarter.

The company, which is gradually combining its operations with majority shareholder Fiat, the Italian automaker, said it had net income of $212 million in the third quarter, contrasted with a net loss of $84 million in the same period a year earlier.

“Chrysler is outpacing the industry this year with sales up 26.1% third quarter to third quarter and 23.1% for the year. In addition to higher vehicle sales volume -- thanks largely to Jeep -- Chrysler has lowered incentives, and that’s helped to boost the average transaction price. That's the not-so-secret formula for accomplishing profits and a turnaround,” said Michelle Krebs, an analyst with auto information company Edmunds.com.

The company has been helped by the introduction of well-received new models, including the Jeep Grand Cherokee, Dodge Durango and the Chrysler 200 and its alliance with Fiat.

Third-quarter revenue rose 19% to $13.1 billion.

“In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009, said Sergio Marchionne, Chrysler’s chairman and chief executive. “This house continues to be fully focused on financial performance and making outstanding cars and trucks by fully leveraging its alliance with Fiat.”  

On Wednesday, the United Auto Workers said its members have ratified a new labor agreement with Chrysler. 

The Chrysler "agreement adds 2,100 new UAW jobs which, together with jobs added at GM and Ford, mean more than 20,000 direct manufacturing jobs will be added to our economy," said UAW President Bob King. 

The UAW represents 26,000 Chrysler workers, including 3,000 salaried employees, at 48 Chrysler facilities in the United States, making vehicles and components with the Chrysler, Jeep, Dodge, Mopar and Ram Truck brands.

Also Wednesday, Ford Motor Co. posted a third-quarter profit, but it was slightly less than the same period a year earlier as losses in Europe and Asia dragged earnings down.

Ford said it had net income of $1.6 billion, about 2% less than the same period a year earlier.

It was profitable in North America and South America but lost money in other regions of the world. Revenue rose by $4.1 billion, or 14%, to $33.1 billion.

RELATED:

European brands have reliability woes

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: Sergio Marchionne, chief executive officer of Chrysler Group LLC and chairman of Fiat SpA, answers reporters' questions during the Frankfurt Motor Show, in Frankfurt, Germany. Credit: Bloomberg.

UAW ratifies new labor agreement with Chrysler

UAW ratifies Chrysler contract.
The United Auto Workers said its members have ratified a new labor agreement with Chrysler Group. 

With agreements just reached with Ford Motor Co. and General Motors Co., the Chrysler agreement looks to give the domestic industry four years of labor peace.

The agreements also pave the way for the UAW to focus on trying to organize U.S. factories operated by overseas automakers, especially in the southern tier of the country, which has grown into an automotive manufacturing region that rivals Detroit and the Midwest.

The Chrysler "agreement adds 2,100 new UAW jobs which, together with jobs added at GM and Ford, mean more than 20,000 direct manufacturing jobs will be added to our economy," said UAW President Bob King. 

The UAW represents 26,000 Chrysler workers, including 3,000 salaried employees, at 48 Chrysler facilities in the United States, making vehicles and components with the Chrysler, Jeep, Dodge, Mopar and Ram Truck brands.

“No one involved in the bargaining process leading to this agreement could forget about our near death experience slightly more than two years ago and the second chance we were given by the American and Canadian taxpayers. The faith that was placed in us then has been fully repaid,” said Sergio Marchionne, Chrysler Group Chairman and CEO. “This agreement is a credit to our workforce and the UAW leadership. It recognizes the significant contributions they have made toward our continuing recovery. It rewards them for the current and potential future success of the company while ensuring Chrysler Group will be able to remain competitive.”

RELATED:

Wall St. doesn't like Ford's earnings report

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: Chrysler's 2011 Jeep Grand Cherokee is one of the new or redesigned vehicles expected to aid the automaker's turnaround. Credit:  European Pressphoto Agency

Ford shares slide despite big third-quarter profit

Fordgetprev

Ford Motor Co. posted a big third-quarter profit, but it was slightly less than the same period a year earlier as losses in Europe and Asia dragged earnings down.

Ford said it had net income of $1.6 billion, about 2% less than the same period a year earlier.

It was profitable in North America and South America but lost money in other regions of the world.

Revenue rose by $4.1 billion, or 14%, to $33.1 billion.

“We delivered solid results for the third quarter despite an uncertain business environment,” said Alan Mulally, Ford’s chief executive.

Ford’s shares fell 81 cents, or 6.5%, to $11.62 midway through the trading day.

“Overall, it was a respectable quarter but there was nothing there to get the stock moving,” said Matt Collins, an analyst with Edward Jones.

He said Ford remains “on a gradual path to recovery, although the path is a bit bumpy.”  

The automaker continues to make progress improving its balance sheet. Ford sliced its debt to $12.7 billion by the end of the third quarter from $26.4 billion at the end of the same period a year earlier.

Company officials said Ford's financial health has improved to the point that it is considering reinstating a dividend, but they did not provide details on the timing.

The company borrowed heavily to restructure its business going into the recent recession. The strategy helped Ford avoid the bankruptcies and government bailouts that saved General Motors Co. and Chrysler Group, but left the automaker with heavy debt that it has been working to pay off.

Last week, Standard & Poor's Ratings Services raised its corporate credit rating on Ford and the automaker's lending arm, to BB+ from BB-. That puts the company just one notch below an investment-grade rating, which is an important measure of corporate health and would reduce the automaker's borrowing expenses.

Ford's "new four-year labor contract with the United Auto Workers has been ratified; we believe the contract will allow for continued profitability and cash generation in North America,” Standard & Poors said.

But the automaker suffered a setback this week when Ford fell to 20th place among 28 brands rated for vehicle reliability by Consumer Reports, an influential guide for car buyers. Last year Ford was 10th.

Consumers have complained about problems with the new transmission systems in the company’s Fiesta and Focus models. The automaker was also hurt by glitches with the MyFord Touch information and entertainment system on many of its models.

Ford acknowledged the issue in its earnings report, saying, “Quality remains mixed due to some near-term issues in North America, which Ford is addressing.”

RELATED:

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

Chevrolet plans big California sales and image campaign

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: Ford Chief Executive Alan Mulally introduces the Focus ST at the 2011 North American International Auto Show in Detroit in January. Credit: AFP/Getty Images

Consumer Reports lists 10 most and 10 least reliable cars

  2011_Lexus_CT_200h_001

Consumer Reports is out with its annual reliability rankings. Here is the list of the 10 best 2011 model year autos for predicted reliability followed by the 10 least reliable vehicles.

  1. Lexus CT 200h
  2. Honda CR-Z
  3. Infiniti QX56
  4. Scion xD
  5. Toyota Highlander (4-cyl.)
  6. Lexus ES
  7. Nissan Titan
  8. Honda Fit
  9. Toyota Prius
  10. Toyota RAV4 (4-cyl.)

Here’s the worst 10 (worst first)

  1. Jaguar XF
  2. Jaguar XJ
  3. Audi Q5 (V6)
  4. Chevrolet Silverado 2500
  5. GMC Sierra 2500
  6. Nissan Z
  7. Volkswagen Routan
  8. Ford Edge (AWD)
  9. Mini Cooper Clubman S
  10. Lincoln MKX (FWD)

RELATED:

PHOTOS: Auto reliability ratings 2011

Ford tumbles in Consumer Reports reliability ratings

Detroit automakers still struggle to win California sales

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: A Lexus hybrid tops Consumer Reports' list of the most reliable vehicles. Credit: Toyota Motor Corp.

Detroit automakers still lag import cars in California sales

Honda Civic is the best selling car in California. American car manufacturers are making some sales gains in California, but new data from a statewide trade group show they lag far behind the import brands.

The Detroit auto companies are expected to have about 32% of the California market this year, up from just under 30% in 2010, according to the California New Car Dealers Assn. report.

Jeep, GMC, Ford and Chevrolet all are seeing double-digit growth in vehicle registrations statewide.

But only the Ford Fusion cracked the list of the 20 bestselling passenger-car models in California through the first nine months of this year.  And it was way down the list, ranking 17th, according to the report.

Led by the Honda Civic -- some versions are built at a factory in Indiana -- every other car on the list was an import brand. Rounding out the top five are the Honda Accord, and Toyota’s Camry, Prius and Corolla. Both the Accord and the Camry are built in the U.S.

One reason is that consumers believe the Japanese brands are more reliable than the American nameplates.  This perception has been reinforced by Consumer Reports, which in its just-released reliability ratings said Japanese and South Korean brands were the most reliable, followed by the American manufacturers.

German brands also sell well in California. Volkswagen’s Jetta was No. 6, and the BMW 3 Series sedans were seventh.

Domestic makes did better in the truck, minivan and SUV segment, which accounts for about 40% of the market.

Honda’s CRV, a small crossover, was the top seller, followed by Ford’s F series and Chevrolet’s Silverado, both big pickup trucks. They were followed by Toyota’s Tacoma truck and its Sienna van, and then the Lexus RX 350 SUV.

The dealers group expects to see 1.3-million light-vehicle registrations in California this year, up about 11% from 2010. The California auto market has seen growth now for nine consecutive quarters.

RELATED:

Which cars are the least reliable?

GM pulls ad that offended cyclists

Chevrolet plans California sales and image campaign

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: Honda's Civic is the best selling vehicle in California. Credit: Associated Press.

Consumer Reports slams expensive European cars in reliability ratings

Xf_12my_driving_010211_01_LowRes

European brands are the least reliable vehicles sold in the U.S. and often the most expensive.

Consumer Reports is out with its annual reliability ratings and has yet again found that Volkswagen, Mercedes-Benz, BMW, Mini, Audi, Porsche and Jaguar all scored in the second half of its rankings. Japanese models, the South Korean manufacturers Hyundai and Kia and the Jeep and Lincoln brands dominated the most reliable list.

The Jaguar XF had the poorest reliability of all 246 vehicles rated. Jaguar also was the lowest rated brand. Audi and Porsche rounded out the bottom three.

PHOTOS: Auto reliability ratings 2011

So if these vehicles all perform so poorly in the reliability ratings, why do people continue to buy them, often paying the price of two cars for one vehicle?

“Snob appeal,” said David Champion Sr., director of Consumer Reports’ Automotive Test Center in East Haddam, Conn.

Champion, who drives hundreds of different car models annually, concedes that many of the cars of these brands also share another quality. “They can be really nice cars to drive,” he said.

But that doesn’t mean they will be reliable.

Consumers are helped by the fact that most of the European models are premium vehicles that carry warranties that last four years, or 50,000 miles, and that helps blunt the cost of problems.

Champion believes part of the reliability issue with European cars is caused by a cultural gap between the Old World and the United States and Asia.

“When you look at the problems these vehicles have, they are mainly electrical or electronic issues,” he said. “I believe that the Japanese and the Koreans have a leg up on these technologies because they have a lot of experience designing and building consumer electronics.”

European makers also don’t appreciate the size of the U.S., the lack of public transit available to use while someone is having their car fixed and the effort people make to take a car into the dealership for repairs.

“We really see this when we talk to people from the home offices of these companies about the ratings we are giving their cars,” Champion said.

RELATED:

PHOTOS: Auto reliability ratings 2011

Chevrolet plans California sales and image campaign

Japanese dominate Consumer Reports reliabilty ratings

-- Jerry Hirsch

Twitter.com/LATimesJerry

Photo: The Jaguar XF was the poorest performing model in Consumer Reports' annual reliability rankings. Credit: Jaguar

Electric-vehicle maker BYD opens U.S. headquarters in Los Angeles

Hertz will use this BYD electric shuttle bus at Los Angeles International AirportChinese electric car company BYD has opened its North American headquarters in Los Angeles and said it plans to hire about 150 workers to staff the office.

As part of the opening celebration at its offices on Figueroa Street in downtown L.A., BYD displayed one of the electric shuttle buses to be used by Hertz to transport rental car customers at Los Angeles International Airport.

The BYD eBUS-12 can to run for about 155 miles on a single charge in urban conditions, BYD said.

BYD also showed off what it called an electric “passenger SUV.”

There's no word on when the company might begin selling vehicles in the United States.

"BYD looks forward to entering the U.S. consumer market, though a launch date has not yet been set. Fleet trials of BYD's cars in Los Angeles began in December of last year, and the first electric bus trials are beginning this month," said Micheal Austin, vice president of BYD America.

RELATED:

Scooter sales zoom

Fashion designers discover bicycles

Halo effect of electric cars starts to shine

-- Jerry Hirsch
Twitter.com/LATimesJerry

Photo: Hertz will use this BYD electric shuttle bus at Los Angeles International Airport. Credit: BYD

Connect

Recommended on Facebook


Advertisement

In Case You Missed It...

Video




Categories


Archives