February 25th, 2009 at 12:18pm
Obama supports the American auto industry, but polls show the American people are not with him on this one. China chooses four automakers to become large scale producers as part of its industry restructuring. Car sales could bounce completely back within four years thanks to population growth and scrappage rates. All that and more, plus John answers viewer questions in the “You Said It!” segment.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Obama supports the American auto industry, but the American people do not. China chooses four automakers to dominate its auto industry. And car sales could bounce completely back within four years.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Wednesday, February 25, 2009. And now, the news.
Good thing the Detroit automakers have a president who supports them and their union. If you heard President Obama’s speech last night, he singled out the auto industry saying “we are committed to the goal of a retooled, reimagined auto industry that can compete and win.” But the American people are not with him on this one. The Detroit News reports that polls show two-thirds of Americans are opposed to more aid to the auto industry. Even in Michigan, home to the Big Three and the UAW, only 52 percent are in favor of helping them. Only 52 percent!
Meanwhile the News also reports that the car czars met with the Purchasing executives of GM, Ford and Chrysler, as well as with the Motor Equipment Manufacturers Association, or MEMA. That’s because it’s now dawning on the politicos in Washington that suppliers may be in more need of a bailout than the Big Three. As we’ve reported here before, if only a few key suppliers fail, they’ll bring the whole industry down with them. Think about it. If you’re missing just the steering column or just the crankshaft, you can’t build a car.
As we reported yesterday, several European countries instituted a cash-for-clunkers program to encourage new vehicle sales, and it’s boosting sales. Now WardsAuto.com reports that new car sales in Taiwan jumped 26 percent last month (subscription required) thanks to cutting the commodity tax, or sales tax. I see a pattern here. Help the car companies by helping people buy cars.
Could car sales bounce back far faster than everyone seems to think? WardsAuto.com is carrying a story about CSM Worldwide forecasting that new vehicle sales will only hit 11.5 million in the U.S. this year (subscription required), but could hit 17 million within four years. That’s thanks to the U.S. population growing by three million people every year and a scrappage rate of old cars of about 12 million a year.
Last year we showed you the NV2500 commercial van concept from Nissan and now it’s introducing the NV200, for both commercial and passenger applications. Nissan boasts it has the most cargo room in its class or it can be configured to hold up to seven people, and comes with either a gas or diesel engine. The NV200 goes on sale first in Japan this summer and then moves to other markets later in the year. Sure looks to me like they’re going after the Ford Transit Connect.
The United States was the largest Chinese automotive export market in 2008 according to data released by the China Association of Automobile Manufacturers. China shipped over $9.4 billion in parts and assembled cars to the U.S. last year more than double what it exported to Japan which is number 2 on the list. In other China news, the country selected four automakers to become large scale producers as part of its industry restructuring. SAIC, FAW, Dongfeng, and Changan will be allowed to expand through mergers at the national level but the country won’t allow foreign mergers at this time.
Coming up next, it’s time for You Said It!
And now it’s time for some of your feedback.
This is “You Said It!” Every day we get dozens of comments and questions from you, our viewers. “You Said It!” gives me a chance to respond.
Ed Miller from Honda saw our report on how Ford killed torque steer with its new RevoKnuckle and wrote in to say, “Hey John, if torque steer is dead, will there be a funeral? If so, which cars would you expect to see in the Torque Steer Funeral Parade?”
Ed, the worst torque steer I experienced was with the Saab 9-3 Viggen. It had so much torque steer you could go around corners with your hands off the wheel. More recently I thought the Volkswagen Tiguan had an unacceptable amount of torque steer, too.
And the prolific Pedro Fernandez asks, “Do you foresee the day when the current dealership system would give way to manufacturer-owned outlets?”
Pedro, no I don’t see this happening. Throughout the history of the automotive industry, car companies have proven beyond a shadow of a doubt that they don’t know anything about the retail side of the business. Every time the factory has tried to run a dealership it has been an abject failure. They know how to build cars, they don’t know how to sell them.
And Wayne Lamothe sent us this video email with some comments comparing the treatment of the banks versus the car companies in their request for bridge loans.
Thanks for that video comment Wayne, and don’t forget folks that we’ve made it very easy for you to send us video comments of your own.
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That’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.