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AUTO TRENDS: Industry pitching fuel efficiency

Article from the Courier-Post

September 20, 2005

In America's auto industry, alarms are sounding about sky-high gas prices, Gannett News Service reports. Executives watched helplessly as sales of their most profitable vehicles, large SUVs, slipped amid escalating gas prices even before Hurricane Katrina struck the Gulf Coast.

Fearful that the shock of having to shell out $3 for a gallon of gas may warp buyer sensibilities, auto executives are scrambling to find ways to play up fuel savings.

Automakers are rushing out ads and showroom signs to point out gas-stingy vehicles. They're trying to figure out how to retune existing models to squeeze a few more miles a gallon out of them. And they're trying to perfect aerodynamics of new models to boost sales as they work feverishly to move hybrid gas-electric models to market.
Published: September 20. 2005 6:00AM

20th September 2005

China's passenger car sales in August rose at their slowest pace in three months as rising oil costs and falling car prices deterred buyers, and major competitors including FAW Group Corp. and SAIC Motors Corp. saw sales fall.

Car sales rose 24 per cent year on year in August to 292,400 units while production increased 35 per cent to 315,500 units, according to China Association of Automobile Manufacturers data released today. said today. August sales of all vehicles, including cars, vans and trucks, rose 9 per cent year on year to 418,700 units while production rose 17 per cent to 441,600 units.

Shanghai VW cut prices on 18 models last month by as much as 14 per cent, but the result of these first across-the-board price cuts this year appears to have been to cause consumers to delay purchase in the expectation of further price cuts to come.

(China Knowledge/Bloomberg, 19 September 2005)

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By Poornima Gupta

DETROIT (Reuters) - Ford Motor Co.'s (F) chief operating officer on Tuesday declined to predict when the struggling automaker's North American operations would again be profitable, but said he sees difficult times for the whole industry in the next 18 to 24 months.

"I think the nature of competition in the marketplace is very, very challenging for all of us," Jim Padilla said at the Reuters Autos Summit in Detroit.

Strong competition, soaring health-care and raw material costs, and a slide in U.S market share has forced the second-largest U.S. automaker to slash its profit forecast twice this year. Ford's North American auto operations swung to a pretax loss of $1.21 billion, including charges, in the second quarter.

The automaker also said it would no longer provide a quarterly financial forecast, echoing a move by cross-town rival General Motors Corp.

"I get impatient too but I also don't walk on water," Padilla said when asked to forecast a financial turnaround for in the North American business.

The automaker has said it will announce a restructuring plan this fall and has not ruled out deeper job cuts in its salaried workforce or the closing of manufacturing plants.

This would be the second time that Ford has put together a financial turnaround plan. A multi-year restructuring program was launched in 2002, which included 35,000 job cuts, the shuttering of up to seven North American plants and the elimination of unprofitable vehicle models.

"I don't think it went wrong," Padilla said, referring to the 2002 plan. "None of us anticipated the aggressive pricing in the marketplace."

"When we put our plan together we assumed that incentives and the like would be in the range of 13 to 14 percent," he said. "Reality is that incentives has been 18 to 20 percent for the last several years.

Padilla said Ford has no plans to extend its big employee pricing discounts -- under which the consumers can purchase a vehicle at the same low price as a Ford employee -- beyond October 3 or offer it on 2006 model-year vehicles.

Ford currently offers the big rebates on 2005 model-year vehicles. The deal, which boosted Ford's sales in July and August, was offered on 2006 model year vehicles for a limited time in August.

In wide ranging comments, Padilla automaker does not see high U.S. gasoline prices affecting sales of pickup trucks.

despite a decline in the sales of large gas-guzzling sport utility vehicles.

Ford is on track to sell 900,000 F-Series trucks this year, he said.

Padilla said the automaker could be offering more hybrid vehicles if it weren't for the shortage of specialized components, partly due to the "predatory" approach taken by some Japanese auto makers.

"It is a supply issue, and it's supply of several technologies," Padilla said.

The COO also said "everything is on the table" as far as its ailing European luxury Jaguar division is concerned, but added that Ford has no immediate plans to sell the group.

Ford owns Jaguar as well as Volvo, Aston Martin and Land Rover, all brands in its Premier Automotive Group (PAG), which posted a pre-tax loss of $740 million last year.

"That's not something that we've been pursuing," Padilla said when asked whether he sees a Ford future without Jaguar.

©2005 Reuters Limited.

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Protecting Yourself from Hurricane Flooded Cars
Sept. 19, 2005
Brock Spencer

Buying a good used car can be a daunting task, but imagine purchasing a vehicle with hidden flood damage. It could be a problem coming near you.
Hurricane Katrina has destroyed many cars beyond repair. But, State and Local Auto Theft Enforcement officers ,also known as S.L.A.T.E., said some of those vehicles can be restored to look almost new, fooling unsuspecting buyers.
If your looking to purchase a used car, auto mechanics recommend checking for rust and smelling the interior for any strange odors. During the Mississippi River floods in the early 1990's, slate officers encountered cases where vehicles were restored to look good on the outside. But, the water had corroded wires and other hidden parts.
Sgt. Jeff Boone with S.L.A.T.E said, "Wiring for example, computer electronic components of the vehicle that is something that I would say 95 to 90 percent of the people don't even consider when buying a used car."
Gary Walker with Walker's Topline Autobody in Creve Coeur said "Look underneath the car, underneath the seats in that area, maybe lift the mats up, look for any rust, get in your truck areas."
If the car was flooded by a hurricane, auto mechanics said there's a good chance of finding salt residue from the ocean water. Illinois requires all cars with more than 33 percent damage to be inspected by the state before being resold.
However, this doesn't include vehicles without insurance claims or out of state cars. It's also a good idea to check the vehicles title before buying and to ask for any maintenance records.