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 Industry News

Important info from government agencies and the automotive industry

The Automotive Aftermarket Industry Association (AAIA) published their quarterly industry indicators this week, and there was a lot of interesting and very depressing news, but the following graphic (source: AAIA) describing the recent relationship between gas prices at the pump and the total miles driven by American, month over month, is astounding! The precipitous drop in miles driven is profound, and though it looks as though when gas hits 4 or more dollars a gallon, driver behavior changes, my guess is that there is more going on.  The  relationship may be between how quickly prices go up and the change to miles driven.  The more sharp the spike in prices, the more sizable the response from consumers, whereas a gradual increase in prices doesn't spark a similar downward trend.

The LA Auto Show is one of the big car events of the season, it starts this Friday the 21st and continues through the 30th.  The LA Auto Show seems to be the venue of choice for learning about the latest hybrid technology -- it has turned into the place to show off new green, alternative automobiles.  With the LA Auto Show about to start, the big manufacturers are reaching out with exciting news about their alternative vehicles about to appear in the months ahead.  Today, Ford announced that it plans to beat Toyota when it comes to hybrids.  

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.