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Episode 201 – Toyota Plans Sports Car, Suppliers On Their Own, Top Clunker Sales

August 6th, 2009 at 12:00pm

Runtime 6:43

CEO Akio Toyoda confirmed that Toyota is developing an affordable sports car. Ron Bloom, who heads up the Automotive Task Force, said don’t expect the government to step in to save suppliers. A list of the most purchased vehicles under the cash-for-clunkers program. All that and more, plus John answers viewer questions about the cash-for-clunkers program in the “You Said It!” segment.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Toyota goes sports car crazy. Ron Bloom tells suppliers they’re on their own. And a list of the top selling clunker cars.

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

This is Autoline Daily for Thursday, August 6, 2009. And now, the news.

Toyota has sports cars on the brain. At the Management Briefing Seminars, an annual automotive conference, Akio Toyoda, confirmed that Toyota is developing an affordable sports car, aimed at attracting Gen-Y buyers. It sort of sounds like Toyota’s answer to the Mazda Miata. Interestingly, this is a joint project that Toyota is doing with Subaru. At the other end of the spectrum, Toyota is developing the Lexus LFA, that sounds like Toyota’s answer to the Nissan GTR. Clearly Toyota is out to change its image of an automaker that builds high-quality cars that are boring to drive.

Also at that same conference, Ron Bloom, who heads up the Automotive Task Force, said don’t expect the government to step in to save suppliers. He said just as GM and Chrysler had to reduce their manufacturing capacity to realistically match up with sales, now suppliers have to do the same. Bloom said GM and Chrysler could not get the financing they needed to go through bankruptcy. The government had to step in. But now that those automakers look likely to survive, private capital is willing to finance the bankruptcies of suppliers.

A report by CSM Worldwide says that global auto sales will begin to recover next year. But don’t get too excited, according to the Detroit News, those sales will start to rebound in places like South Asia, Latin America, China and other emerging markets. The study predicts that sales in Europe and the U.S. won’t recover for another five years. Survey says: global sales will come in at nearly 53 million this year and 75 million by 2015.

Union workers at Ssangyong Motors finally agreed to end their strike. According to the AP, management and workers reached a deal to reduce the number of jobs it had originally planned to cut. Union workers have occupied a plant in South Korea since mid-May, ceasing all production. Riot police have spent the past week raiding the plant to try and end the occupation, which often ended in violent clashes with workers.

Vice President Joe Biden visited Detroit yesterday to announce details about the $2.4 billion federal grant program that’s designed to spur the development of electric vehicles and battery technology. Among the big recipients, Johnson Controls will receive nearly $300 million while GM is getting $241 million, the most of the Detroit Three, to produce batteries for the Chevy Volt. Nissan is another big winner in the government giveaway. It’s getting almost $100 million in federal money to jumpstart a regional electric vehicle pilot program. The company will put 1,000 of its new LEAF EVs available in five markets across the U.S., including Tennessee, Oregon, San Diego, Seattle and the Phoenix/Tucson area. Among other things, the project aims to study how electric vehicles perform under varying conditions and evaluate the effectiveness of the charging infrastructure.

The Toyota Corolla has overtaken the Ford Focus as the most-purchased vehicle under the cash-for-clunkers program. According to The Detroit News, the Department of Transportation made the announcement yesterday. The remaining top 10 vehicles purchased include: the Honda Civic … Toyota Prius … Toyota Camry … Hyundai Elantra … Ford Escape … Dodge Caliber … Honda Fit … and the Chevy Cobalt.

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!” where I get a chance to respond to some of the mail that comes in every day.

Dan B. wrote in to ask, “Will there be a hangover in the new car market once clunker sales are done? I’m guessing sales will drop quite a bit.”

Dan, I agree with you, there will be a payback when the clunker money is gone. But Jim Lentz, the president of Toyota Motor Sales USA, says that most of the clunker sales went to people who would otherwise not buy a new car. And he says there’s enough pent-up demand out there that it will make up for any drop off after the clunker money is gone.

We got a lot of mail on this one, but John V saw our report on Honda stopping production of motorcycles in the US, and asks, “Does anyone know why Honda is no longer making bikes in the U.S.? Is it no longer profitable?”

John, Honda decided to consolidate assembly of all its big bikes in one giant new plant and it decided to build that plant in Japan. Motorcycle sales are down worldwide, but I don’t think that was a factor in Honda’s planning. It just wanted a centralized source of production.

And speaking of clunker money, AP Meterman asks, “I wonder how much the $4500 for the clunker is going to eventually raise my taxes? This must be getting paid with all the money that the government is currently creating with unicorns and leprechauns.”

AP, the Clunker program so far has cost $1 billion. Looks like another $2 billion will be added to that. I remember when $3 billion was considered a lot of money, but now that we’ve gotten used to saying “trillions,” the clunker bill is merely a drop in the bucket.

That’s it for today’s top news in the global automotive industry. But don’t forget to tune in to Autoline After Hours, tonight at 7 p.m. Eastern when our special guest will be Kurt Ritter, who runs Toyota’s advertising, and who used to do it for Chevrolet. I’m sure we’ll get some good comparisons between how GM and Toyota do business.

Thanks for watching, we’ll see you tonight, and tomorrow.

13 Comments to “Episode 201 – Toyota Plans Sports Car, Suppliers On Their Own, Top Clunker Sales”

  1. bdc Says:

    So John, do we know what vehicles were the most traded in on the cash for clunkers bill. I betting on mid 90′s ford explorers with firestone tires, but that’s another story.

  2. Chuck Grenci Says:

    Toyota just recently (I think 2007) dumped the MR2 (mister two, in some parlance’s), so what’s with a new affordable sports car (I guess they’ve got something up their sleeve). That’s a pretty competitive segment already.

  3. pedro Fernandez Says:

    bdc: check out today’s news story on that very subject, The top 10 were all American made SUV’s with 4 wheel drive and also Ford and Chevy 4wheel drive pickups, If this was an election, I would say that by looking at the results, Americans still don’t trust the Detroit 3′s products, just look at the top selling during the clunker frenzy, all Asian makes were on the top 10 sellers. The Dodge was due to the $4500 matching bonus from Chrysler. then Focus and Cobalt showed up at the rear.

  4. Steve Henderson Says:

    John,

    Welcome back. Great daily show as usual. And you’ve got some nuts working with you. LOL

    I almost wished I’d waited for the cash for clunker deal. In short I bought a NEW 2008 Crew Cab Sierra on June 2, 2009 just after Generous Motors became Government Motors. I’d went to 4 dealers on June 1st with an open mind ready to write a check. None of the 4 wanted to deal anymore than the current rebate. It was as if they didn’t care. C’mon !!! Some of the vehicles were 2007 models. I finally agreed to a price on an 08 model that was built in 12/07. I’m happy with the vehicle. But if they could just produce EV that could tow a bass boat….

  5. pedro Fernandez Says:

    Dateline, WashingtonDC Aug 08 2012 Pres Obama signed a bill setting aside $5 billion of make believe money in order to bail out those folks who bought cars during the $3 billion clunkers plan of 2009. I appears most of these folks can’t pay their loans and are at the brink of losing their cars. Bill sponsor, Congressman Sean Penn D Calif. said: “it would suck for all these people to lose their cars while rich Rebublicans keep driving their fancy cars, man”

  6. Salvador G. Says:

    John Mc., with about a trillion dollars given to banks and wallstreet, why does a billion for clunkers that end-up supporting jobs get people so angry???… Do you think people in Germany and Japan got just as angry with their clunkers money??

  7. pedro Fernandez Says:

    Salvador: the problem is that most cars that were sold were foreign cars, even though most are made here, the biggest chunk of the money goes to the country of origin, Japan or Korea. It just shows that the Detroit 3 don’t have the products that most Americans want to buy, perhaps they should have waited a couple of years when Ford and GM will have more fuel efficient cars, who know they may re-do the clunker program again in 2 or 3 yrs.

  8. C-Tech Says:

    Is anyone reading the stats on CARS program? About 45% of the new vehicles sold were U.S. companies. Unless I am mistaken, ALL of the dealers were U.S. dealers. By raising the number fuel efficient cars on the road, that should help reduce the dependence on foreign oil. All good things. The program is not perfect, but it is good. Given the reformed credit market, I doubt too many of these qualifying buyers will get their cars repossesed. I’m looking forward to see what Toyota will do with thier new sports car.

  9. John V Says:

    Mr. McElroy:
    Thanks for answering my question about the bikes!
    I agree with C-tech.
    I have been hearing a lot of politicians and other people on TV talking about how the CARS program is not cost effective. I LOL. The purpose was to reduce dependance on petroleum while stimulating the economy. CARS has accomplished a little of both. The change in total fuel consumption may be significant.
    It’s just too bad that my ’96 Olds 98 with the hail damage gets such good mileage (21 mpg using new EPA standard) that it does not qualify!

  10. Jim Hamilton Says:

    Pedro,
    It seems to me as a Canadian who travels a lot in the USA that the problem is not that the big 3 don’t make fuel efficient vehicles now; they do. Finding a more penurious group than Canadians would lead you straight to Scotland and checking the average parking lot here, you’d find that North American automobiles are still in the majority. However cross the border and imports especially Japanese imports, are in the majority. And most of my American friends seem to think them a superior product. Hmmmmm the Mitsu A6M “Zero” was also considered superior, then along came the Grumman F6F “Hellcat” !
    I think you’re correct in respect to the Big 3 eventually producing a superior fuel efficient product but will Americans buy them or will the American advertising industry persuade them that the Japanese have something better ?
    I think that is the problem, the Japanese have more advertising $$, they make good product and they have certainly convinced the present generation of Americans that they make the superior “all singing, all dancing” auto-product.
    It would now appear that the future of the American Auto Industry depends on convincing the “computer” generation that America also makes good products. I wish them good luck ! I think here they’re already losing the battle ! Young Canadians seem to equate the Japanese with quality. Funny how things change isn’t it ? And what are the Koreans going to do to the Japanese ? And the Chinese ? How long before they catch up and add cars to the products they’re beating us to death with ?

  11. pedro Fernandez Says:

    last night’s show would have been interesting if this were an ad show, but it’s not. There was a lot of news this week specially the clunker plan that did not get touched on. Perhaps when you have 3 panelist you don’t need another guest. I would like to see a show with just the panelist talking about the week’s news and products, just an opinion.

  12. Robert Love Says:

    Since the “Clunker” program has been so successful, instead of the Government passing additional short term appropriations, why don’t they gradually phase out the rebates, ie., over a 3 year period, to allow sales to stabilize?

  13. Badal Says:

    Hope Toyota will launch it soon in Asian markets.
    The engine power and rpm will be key factors for evaluation