March 11, 2010

Toyota Sales Rebounding
According to The Detroit News, Toyota Motor Corp.'s sales are picking up after the Japanese automaker boosted incentives to contain the damage from two big recalls and continuous reports of Toyota vehicles with problems. "Right now, it would appear we're tracking substantially over last month, and substantially over a year ago," said Don Esmond, senior vice president of Toyota Motor Sales USA. Toyota has turned on the spigot and is offering incentives such as zero percent financing for five years and attractive lease rates. In addition, returning Toyota customers will receive two years of free maintenance as part of the deals on offer until April 5. Some dealers will press the company to maintain the incentives for more than a month, which would turn up the pricing pressure on Toyota's rivals in the market. Rosario Criscuolo, owner of Toyota and Lexus stores in Lansing and Ann Arbor, said business picked up sharply after Toyota posted the incentives last week. "We're trying to hire sales people to handle the customers," Criscuolo said. "It's like Cash for Clunkers for us right now." He said Toyota appears to be keeping its customers. "If we're losing business, it's people who are on the fence." To read more about Toyota's sales projections, click here. 
 
Media Coverage Fuels Spike in Prius Complaints
Reports of sudden acceleration in the Toyota Prius have spiked across the country. But that doesn't mean there's an epidemic of bad gas pedals in the popular hybrid. According to MSNBC, experts on consumer psychology say the relentless negative media attention Toyota has received since the fall makes it much more likely that drivers will mistake anything unexpected - or even a misplaced foot - for actual danger. "When people expect problems, they're more likely to find them," said Lars Perner, a professor of clinical marketing at Marshall School of Business at University of Southern California. For problems with the brakes, 1,816 complaints were filed so far this year versus just 90 in all of 2009 and fewer than 20 in every other year of the last decade. Click here for a chart showing the uptick in complaints since Toyota's recall issues have been front and center in the press. Toyota recalled 440,000 Priuses on Feb. 8 because its antilock brakes seemed to fail momentarily on bumpy roads. It's doubtful the Priuses of the past two years suddenly became more dangerous than those made in years past. After all, Toyota's own recall for Prius floor mats that can trap gas pedals covers model years 2004 to 2009. Click here to read more about how media coverage is impacting the number of Toyota owners' complaints.

Suppliers, Wall Street Bank on Auto Recovery
Auto suppliers that cut their costs during the industry's downturn in 2009 are banking on success as auto sales tick up during the next few years. According to the Detroit Free Press, Wall Street is making that bet, too. Shares of several auto suppliers, some of which have soared since hitting all-time lows in 2009 - continue to climb in 2010. Suppliers have continued to "rally when traditionally the speed would slow down," said David Sowerby, portfolio manager at Loomis Sayles. For the year, shares of American Axle & Manufacturing are up 24 percent, shares of Tenneco are up 22 percent, and shares of Gentex are up 15 percent. "The troubles of last year are behind us. Automotive volumes going forward will increase and should stabilize," said Chris Price, a managing director at O'Keefe & Associates' investment banking division. "Volume is the rising tide that will lift all boats." Two Michigan-based suppliers are tapping investor interest in the automotive sector and have made public stock offerings. Cerberus Capital Management is planning a $100-million initial public offering for Livonia-based Tower Automotive.The Blackstone Group, a private equity firm and the largest shareholder of TRW Automotive, also in Livonia, offered 11 million of its shares in the publicly traded supplier last week.For full coverage on auto suppliers' projections for auto industry recovery at the Detroit Free Press, click here.

The Secrets to Subaru's Success
Subaru's message of high safety ratings, fuel economy, and resale values is resonating with more drivers, especially highly educated ones that automakers like to capture. According to the Detroit Free Press, last year, Subaru's sales rose 15.4 percent, even as U.S. auto industry sales fell 21 percent, the best performance of any automaker. That helped the Japanese automaker's U.S. market share grow from 1.4 percent to 2.1 percent. While small, that market-share gain is a huge jump for a niche automotive brand. Subaru is seen as a quirky company that appeals as much to drivers who need their cars to haul skis as to engineer and professor types looking for a practical vehicle. James Bell, executive market analyst at Kelley Blue Book, called Subaru one of the most "well-placed companies" in the industry. "They seem to be limber enough and flexible enough to find a way to make themselves successful no matter what the rest of the market tends to do," Bell said. Since mid-2008 - as U.S. auto sales started to dive - Subaru updated its lineup. It received high marks for safety and praise from Consumer Reports as well as Motor Trend magazine. Click here to read the full article at the Detroit Free Press on what is driving Subaru's sales success.

Handling a Speed Addiction
William R. Snyder at WSJ Magazine writes of his recent experience on the German Autobahn with BMW's new 5 Series Gran Turismo diesel. He writes that the GT has the wheelbase of an SUV, the backseat of a limo (BMW's head designer, Adrien van Hooydonk says the design process started with the interior and worked out, and it's obvious in a good way with a huge, tricked out navigation system consuming the dash, large bucket seats in the front and a couch-like backseat), the long hood of a sportster, and the hunch on the back of a hatchback. Even with these various body parts stitched together, the car has an even, muscular line and scoots along with plenty of umph from the 300hp inline-six. Once an open road for dragsters, today, only 20 percent of the notoriously speed-friendly highway system isn't posted. Snyder writes that starting to accelerate on a stretch of the speed-limit-free Autobahn south of Munich, the first hour on the speed limitless stretches of die Autobahn is like that first taste of a 30-year-old island scotch. You realize there's a world beyond rail whiskey that needs a liter of coke just to be palatable. Even 100 mph starts to feel like a plodding. Click here to read more about Snyder's experience on the German Autobahn.

Pennzoil Ultra Keeps Engines Closest to Factory Clean
Earlier this month, AIADA Affinity Partner Shell Lubricants announced the release of its most technologically advanced motor oil, Pennzoil Ultra. Pennzoil Ultra goes beyond just lubricating and protecting an engine; it far exceeds the most stringent car manufacturer standards for cleanliness and protection. Pennzoil Ultra's new Hyper Cleansing Technology^TM is the output of a global team of scientists pursuing the goal of maintaining an engine in factory clean condition. Because today's engines are much more complex than those of just a few years ago, greater stress is put on motor oil. No leading synthetic motor oil provides better wear protection than Pennzoil Ultra, preventing and cleaning up existing sludge. Cleaner engines are better protected, more efficient, and better performing. Help your customers protect their vehicle investment and increase engine efficiency. Pennzoil Ultra is backed with a 500,000 mile, 15-year lubrication limited warranty and is the only motor oil recommended by Ferrari North America. "We are very proud to be able to state that 'Nothing keeps an engine closer to factory clean than new Pennzoil Ultra,'" said Pennzoil Global Brand Manager Debbie Van Schalkwyk. Click here to learn more about the AIADA Member Benefits program with Shell or contact Michael Burns, North American OEM/Automotive Dealer Group Manager at 712-546-6327.