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The US Auto Industry’s Worst – Is It?

Carnage of the automotive industry continues, with each passing week throwing in a host of surprising knock out news. Be it the auto major Toyota overtaking GM in auto sales, or the deepest nosedive of Daimler’s stock since 1998, or the Ford’s job cuts of 200 salaried jobs to achieve a 15% workforce reduction by August 2008. Each is indicative of the prevailing turmoil, and has repercussions.

As consumers choose smaller cars auto part manufacturers brace up for supplying more of small car parts. And auto makers have begun contemplating mergers as a more creative way to sail safely through the storm.

June 2008 has seen the worst performance for the US auto industry since 1993 based on Y-on-Y month comparisons.

An analysis by JD Power uncovered the fact.

Harrowing Forecasts

Earlier, the projections for the sale of light-vehicle for 2008 was about 14.95 million units, but today the forecast stands corrected at 14.2 million units for the year.

Compared to 2007, a 12 percent decrease is expected for light vehicle sales in 2008. Further, the decrease would spread over differently across segments.


Almost double the decrease is expected in fleet sales when compared to retail sales. The trend is indicative of the notion that manufacturers would reduce fleet sales, while continuing to salvage earnings from retail sales during the low phase. Incentives too are supposed to be moderate.

For instance, while the retail sales are projected to decline by 10 percent to 11.6 million units, the fleet sales would experience a 21 percent decrease to 2.6 million units. An overview of the automobile industry reveals that it is large and has performed over the past couple of years, but only this year its performance has nosedived.

Another obvious trend is that consumers’ are switching to smaller vehicles ever since concerns about fuel economy increased, and skyrocketing gas prices fueled the worries more than ever. While the sales of SUV’s have decreased for sure, but the simultaneous increase in sales of smaller autos hasn’t been sufficient to offset the losses due to the fledgling sales in SUV segment.

Consider this, compared to the first half of 2007, the 2008 sales figures for SUVs did plummet by 26 percent during the corresponding period, the concurrent compact car segment sales were up only 28 percent. Not enough to make up for the decrease in SUV segment.

A lack of a sharp enough rise in sales in the compact auto segment can in part be attributed to inefficient supplies. For instance, the number of days these cars rested with the dealers (the “days to turn” measure) was an average of 57 days from January till June 2008. But it did show an improvement from May through June by averaging 47 days.

The Reasons

Although the hike in gas prices is often cited as the prime reason affecting the auto industry, other factors such as a weakening economic circumstances (viz. rising inflation, higher unemployment), and the long term side effects of the credit crises are in no way less important.

The Worst Is Yet To Come

Every time things worsen I wish that this is the nadir of it all, but an overwhelming majority of experts opine, that this is to last till at least a year. And now even the earlier forecasts for lower sales have been downgraded further.

Realistic expectations are that the worst is indeed yet to arrive, and that June’s dismal performance isn’t anything out of the ordinary. In fact it’s just a page in the book of industrial downturn. A year’s time is the least that’s needed before things begin to look up. But even a year later it wouldn’t be like abruptly waking up from a nightmare. As in 2009 too, a sudden recovery isn’t expected. Only a small upping to 14.3 million units in sales is forecast, with most of it attributed to retail sales.

Auto Trend – Small Cars, Big Buzz

Purchasers lead the auto industry to an exciting trend consisting of small, chic and fuel-efficient cars. Sales reports lay the fact on the table – small cars create a really big buzz!
Automakers in the industry are now aware of the obvious: the market is swiftly shifting to small fuel-efficient cars. This is why they strive hard to produce cars that tease the fantasies of aficionados.
Earlier, the General Motors Corp. stimulated some publicity with a website asking netizens to vote on which of three super-small vehicle concepts the automaker should build. The auto giant was ‘blown away’ over positive global response to the concepts. To note, approximately 870,000 votes cast for one of the plucky rides.
The poll conducted is remote from scientific, as the automaker has no way to stop people from weighing in multiple times. Nonetheless, the upsurge of interest has the automaker thinking more seriously about bringing minicars to the United States. “We were pretty blown away,” GM spokesman Michael Albano said. “It has certainly opened our eyes to that segment here.”
The three minicar concepts include the Chevrolet Groove, Trax and the Beat. The upbeat concepts are part of the automaker’s global approach to design and manufacturing. They were designed in Inchon, South Korea, and assembled in the United States and India. GM also builds minicars in other markets. But the automaker has not settled on whether there is compelling enough demand to deliver the minicars to the United States.
Analysts said the potential is growing as fuel price increase and consumers are shifting toward small, fuel-efficient cars. According to statistics, minicars account for about five percent of worldwide market, with some estimates suggesting that they could account for 15 percent within a decade.
GM’s mini concepts were unveiled at the New York International Auto Show in April. The Beat is a three-door hatchback that would offer front-wheel-drive high performance. The Trax is a flat-faced micro-SUV, featuring a single molded plastic front end to help reduce weight, tighten its design and advance the vehicle’s gas mileage. The Groove, dubbed as the “Funkastalgia,” is a five-door model with a lengthened profile and flared fenders created to offer longer, tougher look.
As of Friday, the Chevrolet Groove was leading the vote with 54 percent to the Beat’s 37 percent and Trax’s nine percent. The online voting, which includes input from around the globe, won’t single-handedly drive GM’s decision to build here. The automaker still plans to conduct more traditional market research and would have to consider the logistics and costs of producing such a car and selling it in the U.S.
So far, GM has said that it is not likely to bring one of the three vehicles to the United States anytime soon, and none of the three is built to meet U.S. safety standards. After the New York debut, Bob Lutz, GM’s product czar, said only a dramatic prolonged increase in fuel prices or an “unforeseen” change in demand for American small cars would justify selling them in the U.S.
But the cyberballots will be greatly considered into decision making at the automaker, GM said. “We’re going to get continuous feedback and see what the right portfolio is moving forward,” said Courtney Moody, a marketing executive with Chevrolet. “Even if the Groove doesn’t come to market, some of what we learn when we put a concept out there, we can use on other vehicles.”
The automaker would be wise to get a foothold in the segment in the United States, since consumer demand is trending toward smaller vehicles, said Erich Merkle, a senior auto analyst with consultant IRN Inc. in Grand Rapids. “The generation known as the echo boom, whose parents belong to the baby boom generation, are hitting the age where they’re driving their first vehicles and are going to want attractive, affordable options,” Merkle noted. “They will, just like their parents, be looking for affordable, economical transportation,” he noted. “They’re going to want these types of cars.”
Customer feedback is essential to the success of the vehicle. This is why automakers are ensuring quality of their product lines. The Nissan control arm, Ford engines, Toyota technology and other auto parts accessories have undergone meticulous testing to deliver superb quality.

Auto Trends We’d Love to See!

Automotive technology continues to impact car engineering, bringing forth technologies which can help squeeze more power and torque out of an engine while improving fuel economy.

The internal combustion engine isn’t about to disappear, but it certainly doesn’t behave like past generation carburetor sparked models. Today’s engines feature fuel injection, turbochargers, multiple valves per cylinder and are often made from aluminum. Powerful and lightweight, you get more oomph even when the motor weighs significantly less.

New Technologies

But engines, transmissions and other under the hood components aren’t the only stuff being changed with today’s cars. New technologies are rolling out that impact safety, passenger comfort and even internet connectivity while others are being worked on and refined for many years down the line.

Let’s take a look at some important auto trends on the horizon. Stuff we’d love to see in our upcoming vehicles:

Going Online – Thanks to Bluetooth connectivity, lots of people can access the Internet from their cars. But offering full access from the driver’s panel hasn’t been something automakers are concerned with, given the distractibility of these screens. Mercedes has found a solution: the German automaker has developed a split screen, one where the front passenger sees the Internet while the driver only sees the usual cabin commands. Rear passengers in many cars already enjoy this sort of technology.

Staying Safe – Automakers long resisted adding safety devices to their cars, but today’s consumers want and are willing to pay for them. Airbags, side curtain airbags, knee airbags and traction and stability control are commonplace today. Today’s collision avoidance systems are about to become even more sophisticated, with some systems being designed to stop your car or move out of the way of another vehicle all by itself. Ford, Volvo, Mercedes and Toyota are among the automakers pioneering this technology.

Riding Fine – Let’s face it: most cars could stand an improvement when it comes to seating. Certainly, many premium, luxury and sport models offer superior ride comfort, but most other models could use a makeover. Besides lumbar support, heated and cooled seats and bolstering, seating that rotates the pelvis forward can help ease lower back pain. That technology has already found its way into Lotus production cars and will gain acceptance in coming years. Less pressure on the spine can do wonders!

Driverless Riding – The day when we can get in our cars and fall asleep without worrying about a crash is not too far off. In fact, GPS technology able to move cars down the road without a driver behind the wheel was successfully tested in the 1990s. But what works on a track needs to scaled for the street, something that will likely roll out in congested cities long before it goes to the interstate. And, unlike technology exclusive to a particular automaker, this option will likely be government implemented and controlled.

Disposable Cars – Are you tired of seeing junkyards filled with thousands of cars and parts? Well, cars made from recycled or easily recyclable parts are now possible. In addition, organic materials can be used in the roofliner, trunk floor, carpeting and elsewhere. Ford is using recycled plastics in their Fusion Hybrid seats while other manufacturers are exploring the use of reusable materials in the fascia, trim, lining and elsewhere.

Cost Factor

Cost has always been a factor when it comes to introducing new technologies. Many of these features have already been lab tested, but getting costs down to a level everyone can afford takes time. But once a product is ready to go and catches on, the price drops. A lower price means that futuristic technology will have suddenly gone mainstream.

Auto Tips For Winter Driving

Is there a chill in the air as you drive your car to work? Are you turning the auto heat on rather than the air conditioner? Do you find the need for the auto defrost? Nature is warning you that there is a change in the air and it is time to prepare for that change. Soon your auto will be confronted with ice on the windshield, low vehicle start temperatures, slippery roads, and all the challenges that come with winter months.

The good news is you can prepare your auto now for those months and have a trouble free automotive winter experience. The bad news is if you do not prepare your car for those months, winter will play havoc on your automotive drive.

Here are a few auto tips for winter driving that will give you peace of mind and keep you in your car nice and cozy, rather than outside of it shivering waiting for the tow truck. Check your car battery to make sure it has the energy for those low temperature starts. Make sure your antifreeze has the right consistency for low temperatures. You do not want that to freeze up on you. Check your tires for good tread. If there is any doubt replace them so that yout tires have a good grip on those snowy roads. You don’t want to end up in a ditch because of worn tires.

Get an oil change so the gunk is out of the engine and you have quicker engine starts. The quicker the engine starts the less wear on the battery and the sooner you are warm and toasty. Always keep your gas tank full. It is best to fill your auto gas tank when the gauge shows half full. The extra weight will help for better traction and if you should get stranded a full tank of gas will be added safety for you.

Check the auto lights, belts and hoses, and windshield wipers, and replace if necessary. Its a good idea to keep a blanket in the car, a flashlight with good batteries, and a first aid kit for any road emergency.

Prepare your auto now for the winter months and you and your car will enjoy the winter months more. Take the stress out of your winter driving by preparing for it now.

New Concessions For Auto-Entrepreneurs

The government has introduced new concessions in the rules applicable to auto-entrepreneur business status in France.

An ‘auto-entrepreneur’ is a form of micro-enterprise, with particular rules concerning liability to social security contributions and business registration. Under this business status, social security contributions are payable as a percentage of your gross sales; if you do not realise any sales in an accounting period, then no social security contributions are payable.

So the great innovation here is that unlike other forms of business status, no minimal social charges are payable: no sales = no social security contributions. Although you may realise no sales, you still retain your social security rights, notably affiliation to the French health system.

More precisely, in the case of no sales, access to the health and social security system continues to be available for up to 36 months (which may not be continuous) or 12 consecutive quarters. In the event that there are no sales over this period then, not only is the right to social security benefits removed, but so is entitlement to auto-entrepreneur business status.

The lack of sales amongst auto-entrepreneurs is surprisingly widespread. Last year around 300,000 auto-entrepreneurs set up shop, but according to government figures, 60% of them recorded no sales! The average level of sales per quarter was EUR4000.

The lack of sales does suggest that many were finding difficulty in getting the business going, or that the status was being used as a complementary activity to existing employment, or to support a retirement pension, or higher education studies.

On the darker side, there is also evidence that some employers are inveigling some employees to convert to auto-entrepreneur status, often under the threat of redundancy. There are huge financial benefits for the employer in doing so, for they then cease to be responsible for employee social security contributions, amounting to 40% or more of the basic salary.

For the employee, the benefits are less evident, for although they become ‘their own boss’, they lose their right to unemployment benefit, not automatically available to the self-employed.

However, on the evidence of your e mails, it does seem that the auto-entrepreneur system is working for many of you. Tom Dryden, who lives in the Limousin, wrote to us recently to say, ‘I arrived in France in January 2008, and last year I signed up for the auto-entrepreneur system, offering general DIY services to other expats in the area.

My turnover in the year was EUR4370, on which I have paid several hundred Euros in social security contributions. However, late last year I contracted a serious illness, since when I have had two major operations. Although I am still unable to work, I remain fully covered for health care.’

Easier Access for ‘Professions Liberales’

In a further relaxation of the rules, those currently involved in a business activity as a self-employed professional (profession libĂ©rale) affiliated to the retirement insurance fund ‘CIPAV’ can now opt for auto-entrepreneur business status. There are around 150 professional business activities affected by this rule, embracing a wide range of professions, such as architect, security guard, financial advisor, designer, osteopath, music teacher and cinema technician.

The new rule grants access to auto-entrepreneur for both new and existing business professionals in CIPAV. An existing business has been granted until 28th February 2010 to change their business status for this year. If you do so, you will be pay 18.3% of your turnover in social security contributions, which you can elect to pay monthly or quarterly. In all cases, auto-entrepreneurs cannot exceed the maximum annual turnover levels applicable for their type of business, and they are also required to comply with any minimum qualifications or experience that is necessary in order to persue the activity.

Multiple Business Activities

In a further clarification of the regulations on auto-entrepreneur business status, the social security authorities have been giving consideration to the social security obligations of those auto-entrepreneurs who run more than one business activity.

As the percentage rate of social security contributions depends on the type of business activity you pursue, the question arises as to whether one or more rates apply for those with multiple business activities that do not have the same contribution rate.

In a rare instance of where an administratively simple and clear procedure has been adopted by the authorities, it has been decided that only one rate should apply, that being the rate that applies to the principal business activity. Accordingly, if for instance, you run an artisanal business and you have a separate but secondary commercial business, you will pay social security contributions on both activities at the rate applicable for artisans.

Clearly, if you run two or more businesses within the same business category, then a single rate will apply on the total turnover of the businesses.

Important Trends To Consider In The Auto Shipping Industry

We humans are an inquisitive sort. We want to know all the latest trends, news, gossip, etc., and we will go online, to the magazine rack, to newspaper subscriptions and to television to get it all and get what’s happening right now. And of course, to do that, we must be in the moment, anything less is stale. Thing are ever-changing in this world and we want to know what’s up right now. We live in the moment.

Take that maxim to the auto shipping industry and you will find there is nothing different there either. This is an industry that depends greatly on outside influences and constant change. The law and finances are as much of a concern to auto shippers as they are to other businesses. Let’s take a look at some of the issues in these fields.
Fuel and the financial issues attached to it are ever in the forefront of any major transportation effort. The price of gas, supply of diesel and miles per gallon are always hot topics under discussion with companies in transportation as well as your average, everyday motorist. Auto transportation is an industry that depends heavily on market conditions. When disposable income dries up, car manufacturing slumps and car buyer’s put off their purchase – all of which lead to a drop off in the need for auto transport.
Other newsworthy financial matters in the auto shipping industry may include toll increases, taxes, and rising business maintenance and employee costs. Bankruptcies, consolidations and technological innovations will also always be financial fields of reference within the confines of vehicle transportation. Road improvements, upgrades, and additions, often come into play when sorting out the financial angles of auto shipping. Staying up on the latest monetary related trends and note worthy happenings in vehicle shipping is a perfect way to stay one step ahead of the market.
Just as the financial landscape is always changing so is the legal one. Rules and regulations related to work hour limits are apt to change. Add to this drug testing innovations and the legal ramifications of driving under the influence. Don’t forget that the laws regulating interstate commerce are also items of shipping news.
Among legally related vehicle transportation subjects are also theft protection and prosecution, licensing agreements and safety program certifications. For those businesses engaging in international auto transport, those professionals with an in-depth current knowledge of customs guidelines will find the field has branched into a respected full-time career position.. This is definitely becoming a trend as more and more auto transport companies go global. Then there is the legal issue of carrying hazardous materials as well as what the definition of a hazardous material is and in what circumstances. The materials that can be transported, or not, are always at the heart of some discussion or other in the shipping news media. Whatever type of auto transport a company deals with, they must stay on top of trends in their industry.
Auto shipping as an industry is heavily involved with breaking news. With so much that can be changed so quickly, there is nothing static about the industry. From the process of auto shipping quoting and brokering, to loading and driving there is always flexibility of the best and legal means to go about these tasks. As the market fluctuates and as the laws are revised, renewed and newly instigated, the auto shipper has a whole lot to keep on top of. Auto shippers need to accept and embraces these changes as their industry is becoming more and more important to the mobile nature of people’s lives in this modern world.

What You Don’t Know About Auto Insurance

Most people understand that they need auto insurance. In fact, it’s the law, if you drive a car, it has to be insured and the penalty for driving without insurance is pretty severe. However, insurance policy wordings are not easy for everyone to understand. And what you don’t know about auto insurance can hurt you. Here’s some clarification of a few things that are commonly misunderstood about auto insurance.
Personal property in your vehicle is not covered on an auto insurance policy. Auto insurance policies provide coverage for automobiles. For instance, items like compact discs, laptop computers and cell phones are not covered on an auto insurance policy. Items like these can be covered on a property insurance policy. What this means is that if the contents of your car, like the items listed above, are damaged in an accident or lost by fire or theft while in your car, you’ll need to file a claim for your contents on your property insurance policy.
If you loan your car, you’ve also loaned your insurance. If your friend is involved in an accident while driving a car borrowed from you, there’s good news and bad news. The good news is, your insurance company will most likely cover the accident (except in extenuating circumstances like if the driver isn’t licensed, or was impaired at the time of the accident, then coverage can be denied or limited). The bad news is, your insurance company treats the accident as if you were driving your car. This means that the accident your friend had while driving your car, is on your insurance record. It’s as if you were driving the car yourself. Best advice, don’t loan your car out.
When you change insurance companies, you MUST officially cancel your old policy. With most insurance companies, you can request the cancellation of your policy at any time by notifying them in writing stating the date you wish your policy to be cancelled. So many people misunderstand this and presume that if they decide not to renew a policy, all they have to do is ignore the bill. DON’T DO THIS! Unfortunately, the insurance companies most times will send you another bill and then when the premium isn’t paid, they will register a cancellation due to non-payment of premiums on your insurance record. Having a non-payment cancellation on your insurance record is serious stuff and getting this straightened out after the fact can be a real hassle. What you’ll want to do when you change insurance companies, is request cancellation of your old policy in writing. Make sure you watch the dates (the date you’re canceling one policy and starting another policy) so that you have continuous coverage while making the change between insurance companies. You don’t want to be without auto insurance for a day or so while you make arrangements for new insurance.
The best advice on any of these things if you’re not sure is to contact your broker and ask for their advice. Doing this will ensure that you have the coverage you need when you need it the most and it could save you a head ache or two down the road.

Automotive Industry News Points to Recovery

There have been some very grim headlines from automotive industry news feeds for about 2 years now, since the beginning of the 21st century recession. The auto industry was one of the hardest hit markets to fall victim to the economic slump, but it looks as though this downturn is now looking up. Analysts in the auto market have been forecasting positive recovery for the year to come. Companies who have been keeping their focus on the future, beyond the recession, will most likely be the first companies to jump start their recovery.
A double whammy recession for the auto industry is not likely, according to analysts. On the contrary, they predict. Good things are to come to auto makers and retailers this year. Many car makers are putting back in place some of the jobs they cut due to the recession. Although some companies are reluctant to do such a thing because they still have not healed from the recession, you will find a surprising number of companies that are reinstating jobs that were lost.
Some of these reluctant manufacturers have barely made it through the recession and still bare the battle scars. It will take some absolute numbers for them to recover. Their logic makes sense. They want to be able to hold on to new employees once they are hired. Just like consumers, these types of companies just need some confidence that the economy is really back on the road to recovery.
Stock piled supplies are not as large as they used to be in retail car shops or manufacturer warehouses. Although you will not see an overly loaded car dealership, you will see new models coming in for the bright predictions of recovery, just not in the quantity we are used to seeing. The economy is sending signals that we should get ready for a recovery, but it will still take some more time to encourage both the consumer and the retailer to spend on new cars.
Auto industry specialists gathered to come up with innovative ideas to move the car market forward. Most companies are moving forward but with extreme care. They are being encouraged to take the lead and stimulate the economy for further gain. After nearly two years of abiding to strict budgets, consumers are now ready to splurge on a big ticket item such as a car, and dealers are being encouraged to take advantage of this big spending nostalgia.
It is precisely due to this reason that after the recessions of both the 80′s and 90′s one of the first places on the market to recover was the auto industry. Experts are hopeful this will happen now as well. When people see positive signs of an economic recovery the chances of them buy a car increases.
Finally, some good automotive industry news! A positive forecast is much needed for this market. But wait. There may be a downside for you as a consumer. A car that you will purchase this year could cost you a little more than it would have if you had bought it last year at this time. After several months in a recession car makers really want to see profits rise. One way to see them rise is to charge you more. Although not all car makers are raising prices it would be wise to do your homework before you go out and buy a new car.
Make sure you prepare yourself by reading up on the latest automotive industry news before buying a new car in this economy. Do your research on prices, get quotes from different dealerships. You may not find this advice in your regular automotive industry news outlet but being prepared can save you a lot of money.