Episode 88 – Americans Oppose Auto Aid, China Chooses Big Four, Car Sales Could Rebound

February 25th, 2009 at 12:18pm

Runtime 7:00

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.

Autoline Daily reaches a wide audience ranging from top decision makers in the industry to everyday consumers. They all have one thing in common. They love the auto industry, the cars it makes and the technology that goes into them. We have thousands of viewers from 140 different countries in the world. If you’d like to advertise your company or product to these people, contact our director of sales, Jim Moskus, using the info on your screen or click “Contact Us” at AutolineDetroit.tv.

That’s it for today’s top news in the global automotive industry. Thanks for watching, we’ll see you tomorrow.

13 Comments to “Episode 88 – Americans Oppose Auto Aid, China Chooses Big Four, Car Sales Could Rebound”

  1. G.A.Branigan Says:

    I don’t agree that most americans don’t like the big three.We don’t like the bull***t loans to them,(gm and chyrsler)or to the banks.I in fact do support the loans to the oem suppliers.That I believe is about mandatory by now,wouldn’t you think? Look,if the other two go bankrupt,what longterm harm will be done?None I say.Both will merg with someone else,regroup,maybe even pull their heads out for some sunshine and do things right for a change.Looks like Ford has and is setting a fine example of what to do.

  2. Pete Says:

    I hope those in the demographics that support the 17 million unit sales forecast actually have the good paying jobs to buy the vehicles…

  3. pedro Fernandez Says:

    John: in answer to your question, I am the proud owner of a Nummi-built Corolla, 1998, with 279,000 miles and going strong. All my previious cars were American nameplates and none got to 100,000 miles. I do support the American auto industry, I don’t like the way they’re run.

  4. RJ Says:

    I believe the problem still remains with regard to imports/exports. Do not the Japanese & Koreans limit the number of cars our manufacturers can import into their countries. If that is true, then why do we give them unlimited access to our country? I’ve owned cars & trucks from all parts of the world, but I am now committed to car manufactured by American companies.

  5. Len Says:

    End closed shops!! UAW ,IAM, et al ,have ruined many a Corporation.

  6. Dave Kopitzke Says:

    Any car built today, if properly maintained will run for 300,000 miles. But if will all kept our cars that long, you could say god-bye to the auto industy as we know it.

  7. Dan Clemons Says:

    Blue Oval management is doing a really great job managing their company, building a really great product, and are building cars American’s want to buy and drive. They are also way out ahead of GM and Chrysler when it comes to hybrids too. I love their commercial with the gal that says she falls in love with her Ford Fusion every time she drives it. If they only made a hatchback Fusion, I would seriously consider buying one.

    A tip of my hybrid hat to all the employees at Ford.

  8. Salvador G. Says:

    John,

    Is it possible that people of Michigan just misunderstood the poll question?…
    Seriously, I just don’t think, well; people hear now the word Bailout and just stop listening everything else.

    Its not like the question was ‘Are you oppose to the goverment efforts to save your car manufacturing industry??

  9. pedro Fernandez Says:

    John: Re: Ford, is it a coincidence that they hired an exec NOT from the auto industry, but from outside of it, instead of recycling the same old backward thinking “car guys” and as a result they are doing better than the other 2?

  10. John Says:

    “That’s thanks to the U.S. population growing by three million people every year ”

    Wait a minute.

    Obama says his stimulus plan is going to create about 3 million jobs … hum, how many billion of future generations income did congress just waste?

    Three Million new people, Three Million new jobs…

    So, how exactly does that help U.S. Middle Class Citizens that have lost their ability to earn income due to Wall Streets and K Streets global agenda?

    Somebody better calculate the interest rate for auto loans before they get their “hopes” too high for four years down the road.

    You may want to watch this.

    http://www.youtube.com/watch?v=IH1bgWvRIgw

  11. Alex Kovnat Says:

    It is a disappointment that so many people are opposed to aid for our domestic, American-flag automotive industry.

    What I favor is aid to the American-flag auto industry that will create a win-win situation for the American road-going citizenry and the auto industry here in Michigan. Let me explain what I mean.

    I’ve heard a lot of arguments for pulling the plug, turning off the respirator, disconnecting the feeding tubes, etc., and letting our domestic manufacturers die. That would not be a win-win situation for the American people, because Toyota, Honda and Hyundai would then become the new GM/Ford/Chrysler. Our choices in the market would be greatly diminished.

    I’ve heard some people advocate saving the American auto industry by using force of law to limit access to what Toyota, Honda, etc. have to offer. That might be a win situation for the UAW, but a big LOSE situation for the American people. Trade protectionism is a zero-sum game, and I won’t have any part of it.

    That leaves us to a sensible, win-win strategy. I recommend that nothing whatsoever be done to limit American consumer access to what Toyota and other non-American flag manufacturers have to offer. At the same time, I favor reasonable financial aid to GM to help them get back on their feet.

    What a lot of Detroit-bashers may not understand is this: If you are driving down the street in your subdivision and somebody’s beloved 4 year old daughter or granddaughter runs in front of your car and you can’t stop in time, does anybody think it will make any difference whether your wheels are a Honda Accord or a Chevy Malibu? In other words, if Detroit-haters succeed in pulling the plug on our domestic auto industry, we will still be facing the same issues of safety, global warming (real or imagined), and so on.

    Not even Toyota can guarantee they can produce cars that get 43 miles per gallon while also meeting ever more stringent safety requirements.

  12. Jim Hamilton Says:

    John,
    It disturbs me greatly when I hear people not supporting THEIR American Auto Industry and even more when they are apparently making decisions based on unsupported data. The Internet is a wonderful thing in many ways but, you have to realize that ANYBODY can put ANYTHING they want out there whether they know what they’re talking about or not. It’s all just DATA; to become information someone has to consider that data and make sense of it.

    It’s bad enough when much of the press doesn’t weigh thru all the BS and do their job of informing the rest of us and instead are feeding people “doom and gloom” because it either sells or worse because it suits their political leanings. (I think Autoline is trying to do it right) But, when someone puts something out there just because they like to see their blatherings in print…think about this: the failure of the American Auto Industry is not just so many words it is very, very, very serious, it may very well be the beginning of the end for a socio-economic entity which has been living beyond its means for a long time.
    The “big three” are no different than ANY of the Western Societies and their people – Want that car but don’t think you can afford it? Hey, buy it anyway, want a bigger house than you can afford ? Heck, the banks will loan you the money – they’ll even lie about your ability to pay to make their deal ! Want to get rich quick ? Listen to the Bernie Madoffs, sounds too good to be true ? Ignore it. Everything’s going to be OK, the “banks” say so, the politicians say so, don’t take any responsibilty for the MESS YOU HELPED TO CREATE BY GOING ALONG WITH IT!!
    At least the “big three” are trying, GM and Ford both have product as good or better than anything, but still, many uninformed Americans refuse to look at an American auto and persist with the infuriating view that Toyota etc are as American as the “big three” ! The rest of the world identifies America by its big business logos: MacDonald’s, Boeing, Microsoft,IBM, Chevrolet, Ford, etc., nowhere outside the USA is Toyota, Mitsubishi, or Sony seen as “American”. And if a big American logo goes down then those who wish to see America fail will be celebrating !
    Most of us (even we lowly Canadians) must shoulder blame because we didn’t stand up and say “this is crazy !” We just went along…we let the crooks make millions (and billions) ’cause we forgot that the greatest responsibily as citizens of a democracy is all of us sharing that responsibility. We let others usurp our democratic power by our silence and now we expect one man to make everything right…God help him get it right !

  13. Gordon Garside Says:

    John, your article on the Nissan NV200 got me thinking. While I have not been in Europe since last May, it strikes me that the NV200 looks like a slightly tweaked version of a very common vehicle badged Citroen/Peugeot/Renault (take your choice) that is used in a variety of commerical and private applications. In fact we rode to Charles de Gaulle airport in what I believe is a Renault Diesel version of this vehicle.