RepairPal Blog:Industry News
Important info from government agencies and the automotive industry
Last night, President-Elect Barack Obama shared more of his thoughts about the suffering US auto industry on CBS 60 Minutes. He talks about, "creating a bridge loan to somewhere as opposed to a bridge loan to nowhere" so that the money does not keep GM, Ford and Chrysler in business just for another 6 months. Obama also reasserted that he is still focused on energy independence. See the interview below:
The Green Car Journal recently named five finalists for their 2009 Green Car of the Year Award. The Award was created to reward environmental responsibility among automakers.
The five finalists are:
California Governor Schwarzenegger has proposed increasing state sales tax 1.5% from 7.25% to 8.75% for 3 years to make up for the $11.2 billion budget shortfall. Included in the governor's proposal is levying sales taxes on auto repair services, which currently are not taxed. Up until this point, only auto parts have been taxed.
Such efforts to tax auto repair services in Florida have met strong opposition and have failed. Schwarzenegger is now going to face a similar backlash. The governor says the increases are needed to stabilize the state budget.
David Leggett mentions today in his blog at just-auto.com that in the midst of the horrible economic turmoil and uncertainty facing General Motors, the company has opened an auto manufacturing facility outside of St. Petersburg in Russia.
The plant opening ceremony was last week, and Russian President Dmitry Medvedev attended, so it was obviously a pretty big deal. Mr. Leggett makes the important point that despite the recent nasty rhetoric being flung between Russia and the United States, an American company has made a big investment in Russia, and Russia likes it.
Today President-Elect Barack Obama hosted his first press conference since being elected. He made the following comments about his plans for the US auto industry:
"The news coming out of the auto industry this week reminds us of the hardship it faces -- hardship that goes far beyond individual auto companies to the countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry. The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil.
It's all over the Internet this morning: General Motors had another astoundingly bad quarter and continues to hemorrhage cash.
You can read about it in Autoblog or in the New York Times.
While some automakers seem to be getting ready for a firesale, Nissan is busy shrinking engines and price tags. Nissan is coming out with a Versa just 10 bucks shy of $10,000 ($10,685 including shipping). You can get the cheapest car in America starting November 19th.
The Versa features a 1.6 liter, 107hp engine, manual transmission, manual windows, and 4x60 climate control (all windows down at 60mph). With sales off nearly 40% from this time last year, Nissan is offering 0% financing for 36 months to try to help move cars.
According to The New York Times, selling gas just isn’t what it used to be. With profit margins disappearing due to factors such as state environmental requirements requiring costly upgrades to equipment, it simply no longer makes sense to sell gas. While some gas stations have diversified to highly profitable offerings (repairs, emissions testing, and selling candy), many have stopped selling gas altogether. They’re simply shutting off the pumps.
General Motors, the world’s largest auto manufacturer, made an announcement today: worldwide passenger car sales fell by more than 1 million units (that’s 6%) in the third quarter of 2008. No surprise, consumers are delaying new car purchases given the credit crisis (and a loss of confidence in the economy). Poor GM, they’re drastically having to cut costs – the most painful part is a huge cut in their workforce.
I read this morning (on Autoblog) that while overall new car and truck sales have taken an absolute bruising in recent months, the share of those sales going to new SUVs and trucks has actually increased. The article notes that this gain coincides with a slide in gas prices over the same time period: "Truck sales fell below 10% of overall vehicle sales back in May and June, but the price of gas falling from an average of $4.11 per gallon to $2.78 has helped the share of trucks rise to 14.1% of the overall market for September." This would also mean that trucks and SUVs should be making big gains right now, with oil prices plummeting.
The huge incentives that auto makers have lobbed at these slow-sellers also probably plays a part. In fact, a friend of RepairPal recently brought in an ad from a Vegas newspaper that showed a still-hard-to-believe offer: buy a Dodge Ram, and they'll throw in a Dodge Caliber for a penny.