October 20th, 2011 at 11:40am
Argentina is punishing companies that are hurting its trade balance. Nissan is one of those companies. Prices for iron ore, aluminum and other commodities are plummeting, and it’s all because of the Chinese economy. Car sales in the U.S. have steadily increased throughout the year and the top economists at Ford and GM say next year will be even better. All that and more, plus John responds to your questions and comments in the “You Said It!” segment.
This is Autoline Daily for October 20, 2011. And here are all the changes that happened since yesterday.
NISSAN IN GRAPE DANGER
Sometimes as an automaker, you just gotta do what you gotta do. Argentina is coming down heavy on companies that are hurting its trade balance. And it turns out, one of those companies is Nissan. So the Japanese automaker just agreed to export $52 million of Argentine wine. Let’s see, at wholesale prices, I’d estimate that would involve about 10.4 million bottles.
PRICES FALL AS CHINA COOLS
Earlier this year we reported on how raw-material prices were soaring. Well now, just the opposite is happening. Prices for iron ore are plummeting. Same goes for aluminum. And this is all because the Chinese economy, while still growing, is starting to slow down. We warned that car prices would go up as raw material prices climbed, and they did. But now with raw-material prices going down don’t look for lower car prices. That’s not how it happens.
2011 < 2012
Car sales in the U.S. have steadily increased throughout the year and the top economists at Ford and GM say next year will be even better. Ford’s senior economist, Jenny Lin, says the main reason is that the average car is over 10 and half years old. GM’s Chief Economist, Mustafa Mohatarem, says sales will be better but there won’t be huge gains. He says that based on the U.S. population, car sales should be around 16.5 million, but it won’t be until 2014 or 2015 that sales recover to that level.
CRISIS? WHAT CRISIS? (subscription required)
Speaking of car sales, over in Germany sales are up 8 percent compared to last year. According to Ward’s, that strong growth made up for losses elsewhere in Europe. Overall, the EU saw just a 0.7 percent increase in sales last month and through September sales are down 1.1 percent for the year. I keep saying how can the economy be that bad if so many people are buying new cars? Answer: the economy isn’t as bad as it’s made out to be.
NOW IT’S PERSONAL (subscription required)
A simple hatchet is enough to fell a mighty redwood. Misappropriating company funds can have the same result in the corporate world. As we reported earlier in the week, Ernst Lieb was fired from his lofty post as the head of Mercedes-Benz’s U.S. operations. Now, The Wall Street Journal reports Herr Lieb was canned over allegations he used company funds for personal expenses. As a 36-year veteran, he had been in charge of its U.S. operations since 2006.
There’s more than one way to skin a cat, or in this case start a car. Autoblog posted a neat little video showing a pair of guys getting a hatchback running with little more than a couple jack stands and a piece of rope. They lifted one of the car’s wheels off the ground and then wrapped a line around said wheel. A swift pull was all it took to get things moving. Apparently the battery was too dead to crank the engine, but it had enough juice to run the coil and spark plugs. I’ve got to ask; wouldn’t push-starting have been easier? Maybe they were just bored . . . or wanted to make a YouTube video.
Coming up next, it’s time for You Said It!
Pedro Fernandez saw our report on how hatchbacks are making a comeback in the American market and he kinds of shakes his head in amazement. “Let’s see, Vega, Pinto, Chevette, Citation? It’s a miracle that the hatchback survived that past.”
All I can say Pedro is that probably a lot of people buying hatchbacks these days are young enough to have never heard of those cars.
Cwolf doesn’t like the executive who has been named to replace Ernst Lieb at Mercedes-Benz. “I’m surprises no one has said a word about Lieb’s replacement! Werner is a bean counter and should never hold such a position! IMO, there goes any progress that has been made under Lieb. Making Werner head of MBUSA is like making DeLorenzo head of the UAW!”
Well, Cwolf, I don’t know Werner, but my guess is that will only be a temporary assignment.
tj Martin wants to know why so many cars are catching on fire all by themselves. “With today’s announcement that the MINI Cooper S is now amongst the ranks of Spontaneous Combusting New Cars the number of automobiles doing so is becoming STAGGERING. Isn’t it about time someone does an In Depth Investigation into this ever expanding trend?”
tj, I’d agree, if it turns out to be true that these things are catching fire all on their own. Maybe there really is a problem, but strange cases like these make me suspicious. I wonder how many of these spontaneous fires are just people trying to collect on their insurance and get out of their car payments.
Swinglow33 laments the tragic Indy Car race in Las Vegas where race drive Dan Wheldon was killed. “RIP Daniel. This race should not have ever happened. Weren’t there complaints that the track was too small for the number of cars in the race? This could have been avoided in my opinion.”
Swinglow33, I think you’re on to something here. I think Indy Car turned a blind eye to the dangers, all with idea of making the racing more “exciting.” Same goes for NASCAR. At the Superspeedways they know there’s going to be The Big One, a big wreck where all kinds of cars get smashed up. They know it’s going to happen and they do nothing about it because they know it’s good for the ratings. I think Indy Car could even be vulnerable to a law suit over the race in Las Vegas. Knowing how dangerous that track is for those cars, that race should have never been run.
And we’ll be getting deeper into this topic tonight on Autoline After Hours. Join me and the Autoextremist, Peter De Lorenzo, for some of the best insider discussion in the business. We’ll also have Jack Hollis, the head of the Scion brand, as well as Michelle Krebs from Edmunds.com. Check it out tonight at 7:30 p.m. Eastern Time at Autoline.tv
And that wraps up today’s show, thanks for watching, we’ll see you tomorrow.