Episode 199 – July Sales Reported, CARS Stalled in Senate, GM Begins Leasing Again

August 4th, 2009 at 12:00pm

Runtime 6:41

Automakers in the U.S. sold nearly 1 million vehicles in July. Despite the success of the cash-for-clunkers program, the $2 billion refresh that the House passed, sits awaiting Senate approval. General Motors is starting to lease vehicles again. All that and more, plus a look at Audi’s efforts to get diesel to catch on in the American market.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Automakers report July sales. The U.S. cash-for-clunkers program may be stalled in the Senate. And GM is starting to lease vehicles again.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Tuesday, August 4, 2009. I’m Murray Feldman from Fox 2 News here in Detroit filling in for my friend John, who is out of town on “business” again. And now, the news.

U.S. auto sales got a much-needed jolt in July courtesy of the cash for clunkers program. Overall manufacturers sold nearly one million vehicles throughout the month (subscription required) with almost a quarter of those sales coming from the clunker program. Now that was still down over 12 percent from last July, but it brought the industry’s 2009 SAAR number – its annual sales measure – up to over 11 million vehicles. The big month-over-month winners were Porsche, Suzuki, Mazda, Toyota and Chrysler, while the big losers were Isuzu, Jaguar-Land Rover, Volkswagen and BMW.

Meanwhile, despite the success of the program, Washington is still working on re-funding it. The $2 billion dollar refresh that the House passed last Friday sits awaiting Senate approval as many dealers throughout the country are hitting the pause button on the program since it’s unclear how much of the original billion dollars is left. The White House is urging the Senate to adopt the House bill before it goes on vacation this Friday.

One more note that may help revitalize the cash-for-clunkers program. Early numbers from the Department of Transportation report that the gas mileage on the cars and trucks that people are buying to qualify for the rebate is significantly higher than expected. Cars are averaging just over 28 MPGs, with SUVs about 22 and trucks just over 16. The New York Times reports that the environmental aspect to the program has been a concern to several Senators worried about refunding clunkers. This could put them over the top.

GM is starting to lease vehicles again. The company has partnered with U.S. Bank to start a program in five states. If you live in New York, New Jersey, Connecticut, Michigan or Ohio you’re eligible to grab one of eight different 2009 or 2010 models through the end of the month. When the new Cadillac SRX launches later this year it will kick-off a new nation-wide lease program.

General Motors is excepted to lay off thousands of workers after its latest round of buyouts fell short. Only about 6,000 hourly employees took the severance package, about half as many as the company had hoped. The New York Times reports that it still employs about 48,000 factory workers which is about 7,500 more than it wanted to have at year’s end. Since 2006, about 66,000 hourly workers have taken buyouts or early retirement offers from GM.

The AP reports that Toyota posted an $819 million loss for the second quarter of this year. A strong yen and falling sales in almost all regions it sells in contributed to the loss. Toyota also said it expects to post a nearly $5 billion loss for the fiscal year.

The Chairman of Tata motors, the company that now owns Jaguar and Land Rover, says it is considering building all future vehicles for the two British marques with lightweight aluminum bodies. According to Motor E Magazine, Tata is making the consideration in order to reduce weight to help improve fuel economy and reduce CO2 emissions.

Coming up next, a look at Audi’s efforts to get diesel to catch on in the American market. We’ll be back right after this.

Diesels have a bad reputation in the U.S. Most Americans think of them as smelly, noisy and black smoke-belching. While that may have been true in the past, it certainly is no longer the case. That’s why for the past month Audi has been championing the virtues of clean diesel to the American public.

The company launched a large campaign that includes TV ads, a website about the benefits of clean diesel, and a viral video that can be viewed on many online video sites. Perhaps the most interesting tactic was “clean graffiti” displayed on the streets of several U.S. cities.

Here is the man in charge of Audi’s North American operations, Johan De Nysschen explaining the benefits of clean diesel.

It’s good to educate the public on the benefits of diesel but as Johan De Nysschen points out, more must be done.

Except for heavy-duty pickups, pretty much all automakers in the American market, except for the Germans, have scrapped their diesel plans. Part of the reason is the stringent emission standards that cost thousands for automakers to meet. And the other part of the problem is the fluctuating price of diesel at the pump.

So, until those two issues get addressed, diesel faces an uphill battle to catch on in the U.S.

And that’ll do it for today’s top news in the global automotive industry. Again, I’m Murray Feldman from Fox 2 News here in Detroit, thanks for watching, we’ll see you tomorrow.

13 Comments to “Episode 199 – July Sales Reported, CARS Stalled in Senate, GM Begins Leasing Again”

  1. Willi Says:

    if my company was running the clunker program, we would have every detail resolved, all check points in place, and a back up system to ensure every cent is accounted for – especially with a huge sum of money involved – as it should be – i can’t believe the government is so irresponsible as to hang our tax money out there to be so terribly mismanaged, and unable to account for every cent – it would be the end of our business, yet this huge government brushes it off with just another loss … our taxes would be greatly reduced if we had responsible people in place, as does the private sector …

  2. Dcars Says:

    It would be nice if the Germans were friendlier to US manufactures ie GM, after the US’s EPA made concessions to German luxury brands.

  3. Max Christensen Says:

    Willi,

    I’m no lover of government programs, but as an employee of a state government, trust me, it’s not nearly as easy as it seems. The rush for this money was way larger than anyone expected – so just imagine trying to keep the money straight as hundreds of requests for the cash are coming in literally every minute! There has to be a “cool down” period to track exactly how much has been spent, how much is left, etc.

    And who is saying the dealers sending the requests for the money are doing the requests correctly??? In my office, fully 99% of the problems we encounter are actually occuring from mistakes being made from claims being filed from the OUTSIDE! Most don’t take the time to read the SIMPLE instructions, and thus make a mistake on the claim for which we get blamed! Walk a mile in our shoes before you lay down the guilt trip!

  4. DukeT Says:

    Willi,

    Max is correct . . . it is very easy to say “if my company was running the clunker program . . .” but unless you are far superior to numerous private companies in your ability to accurately foresee the immediate success of a program, then it is probably a good idea to not pre-judge the handling of a program.

    I could name literally dozen of examples, but here’s just one: when Apple released the iPhone with AT&T exclusively as the carrier, what happened? Immediately they had supply, connectivity and even security issues for those initial customers (and it took several months to get it straightened out). Maybe if you were the head of Apple, or AT&T — that wouldn’t have happened, eh?

    250,000 (+/-) in the first week in apps. Most private companies sites would crash with a deluge like that starting from day one.

    Even a local dealer admitted that Max’s statement is correct in that they admitted that they found out that they were not accurately completing the apps – but that they would have that straightened out shortly. And they were selling 30 cars a day. Gee, I wonder how they would have done with reviewing 35,000+ apps per day?

    Take a big breath, chill out, and realize that gov’t is not the big bad wolf causing all of our problems. In fact, big business is raping you — and you don’t even know it.

  5. Shirell Patterson Says:

    How can Isuzu cars be down on sales last month if they left America over a year ago?

  6. Episode 199 - July Sales Reported, CARS Stalled in Senate, GM Begins Leasing Again « Suzuki Says:

    [...] Read more here: Episode 199 – July Sales Reported, CARS Stalled in Senate, GM Begins Leasing Again [...]

  7. Dave Says:

    “I can’t believe the government..” that is the key to the whole statement. If the Government get control of anything it is a safe bet that it WILL get messed up and cost all of us a TON more $$$ than they said..

  8. Roger T Says:

    Dcars is right. It’s very difficult to understand why we’re cutting slack for german vehicles. There’s no excuse for the German provision, especialy when our economy is in such dire condition. Anyone, please explain to me how this makes sense.

  9. David B. Fishburn Says:

    Hey Murray, keep up the good work! I’ve been watching you for years on channel 2, wishing you many more good years there. I can see where many people got there perceptions of diesels from, trucks and buses that have not been maintained properly. Gm really did’nt help with their stupid bungle on the 350 diesel. These morons took a gas engine block, and put diesel parts on it, instead of designing a completely new engine. If they had done that right, then the engines would have done better. The other problem is education about the maintenance of diesel engines. Gas engines could run with the ignition timing a little off, but diesels cannot run well with the fuel injection timing a little off. The new electronic controls will help avoid those problems. Fuel prices is another problem- diesel fuel prices need to be lower.

  10. JIm Thykeson Says:

    CARS needs to roll on!, but not involving foreign brands! When they did this in Germany they wern’t subsidizing Ford and Chevey! These programs are to stimulate the ‘home-tean’, not the visitors. And please say no to Tata Mtrs. We just can’t stand to have our domestic market share further diluted.

  11. C-Tech Says:

    For those of you who have a problem with “foreign” brands participating in the CARS program, I suggest taking a step back and looking at the big picture. The U.S. Government has to deal with trade issues around the world and getting those countries to open their markets to the us sometimes means setting the example, thus an open CARS program. Also consider that there are a variety of factions in Congress which need to be satisfied to get their vote. Cutting out foreign brands potentially loses the votes of representatives in Alabama(Hyndai), Tennessee(Toyota), Florida(Jacksonville is the port of entry for many foreign brands). Compromise is part of the nature of this democracy.

  12. G.A.Branigan Says:

    Kudos to Audi for taking on the infamous diesel.Most americans have a misconception about diesels,especially the new “clean” diesels.Stop thinking about that smelly,noisey city bus,and the traveling overworked under maintained older diesel trucks.Life ain’t like that anymore.The benefits to the “clean diesel” technology in our daily transportationwill go along way to energy independence.Bio-diesel is much easier to produce,and burns extremly clean.Give it a chance people.

  13. Willi Says:

    first, i very much appreciate the response by government employees – it is definitely an issue that can be viewed by either side; getting a discussion started here will go far in solving this of type issue down the road; it is a model for the problems we have today, certainly very complex, and will ultimately be decided by VOTERS – yes, voters, those that vote with knowledge, those that vote not knowing the issues, and those that take sides; and that is where we need the most CHANGE: educating voters and getting them to the poles; i feel that most issues resolve themselves once voters get informed, although the issues are complex, and it takes alot of time, it starts here with involvement
    Now back to the issue of comparing the private sector and government programs: difference is the private sector business decisions are not done with your money, taxes, and they may come and go, with profit or in bankruptcy, but they did it with their own money ( although gained illicitly at times, the players volunteered )