Detroit – Page 2 – The Bunch Blog!

By Paul A. Eisenstein, msnbc.com contributor

It’s automotive award season, so expect to see a lot of commercials touting cars, trucks and crossovers that are “best” in one category or another.

But few trophies carry the heft and credibility of the one that will be handed out following the opening ceremony of next week’s 2012 Detroit auto show.

Unlike most automotive awards, the winners of the North American Car and Truck of the Year (“NACTOY”) are decided by a panel of 50 U.S. and Canadian journalists. The methodology is designed to make sure that no single media outlet’s editorial — or advertising — policies influence the verdict.

The widely regarded, and oft-quoted, NACTOY is something most manufacturers actively and aggressively seek, so even landing among the finalists is considered a major victory — or a serious setback if you’re left off the list.

And, for the first time in quite a while, there are no Japanese autos among the finalists for North American Car of the Year — a potentially significant development when the major Asian carmakers seem more vulnerable than they have been in decades.

The car-of-the-year finalists — the Ford Focus, the Hyundai Elantra and the Volkswagen Passat — are nonetheless an international bunch. But surprisingly absent are two particular models that would, in years past, have been absolute shoe-ins, at least for inclusion among the finalists: the 2012 remakes of the Honda Civic and the Toyota Camry.

The choice of an American, Korean and a German car “reflects the fact that every manufacturer is getting better these days,” suggested Joe Phillippi, chief analyst with AutoTrends Consulting. At the same time the Civic and Camry “certainly don’t break new ground,” he said.

They’ve both taken a fair share of criticism in recent months. Honda’s CEO Takanobu Ito has promised to rush a major update of the new Civic to market as soon as possible. This will likely happen sometime in 2013, years before a replacement or even a mid-cycle freshening would normally be expected. The latest Civic came to market only last spring.

It’s difficult to say exactly how important winning a NACTOY trophy is beyond the bragging rights, though Ford President of the Americas Mark Fields described it as “a huge marketing opportunity for us and [one] we [would] definitely use to our advantage.”

It would also serve as “significant validation,” he added, for the carmaker’s One Ford strategy, which has seen a shift away from developing separate products for individual regions of the world in favor of a single product, like the Focus, that can be tweaked slightly to meet the needs of specific markets.

Since about 80 percent of the components on a Focus are shared in all regions, that means much greater economies of scale. In turn, explained Fields, the strategy allows Ford to come up with a compact model that is not just more attractive, but also more lavishly equipped than past small car offerings.

That has proved particularly critical considering the growth of the compact segment. It’s one of the largest niches worldwide and among the fastest-growing in the U.S. as American buyers downsize to reduce their fuel bills.

In decades past, the compact segment was filled with boring and sparsely equipped “econoboxes.” Hyundai pitched its offerings by focusing on rock-bottom pricing. No longer. The Hyundai Elantra that is the second of the three NACTOY Car-of-the-Year finalists is a strikingly attractive and well-equipped offering that is helping the Korean carmaker transform its once-stodgy image.

No wonder, according to Dave Sullivan of AutoPacific: “The Koreans have clearly gained the respect of the Japanese as worthy competitors.”

If the Elantra were to win, it would be just the second NACTOY victory for the Koreans. The original Hyundai Genesis, the carmaker’s first foray into the luxury market, won four years ago.

The third contender for North American Car of the Year is perhaps the most “plain vanilla” when it comes to design, suggests long-time automotive author and analyst Mike Davis.

But it is no less significant. The 2012 Volkswagen Passat is the centerpiece of the German automaker’s plan to more than double its U.S. sales by 2018 — and to become the world’s largest automaker by that date.

Significantly, the American Passat is bigger than the European version of the sedan — so large is its interior tha it actually slips into the full-size category, with enough room for a squad of NBA players front and back. While it may not boast the edgy styling of the Focus or Elantra, the new midsize Passat is equally well-equipped and, perhaps most significant for buyers, it comes at a price tag thousands less than the model it replaced.

It’s also the first new product to roll out of VW’s new assembly plant in Chattanooga, Tenn.

A quick survey of the 50 NACTOY jurors suggests it will be a close race, with the Passat given an ever-so-slight edge.

As for the truck side of the NACTOY balloting, there’s another big surprise, with not a single American offering in the mix. But that is more a reflection of the unusually small number of light truck models introduced over the last 12 months.

Ironically, then, Honda has landed a spot among the three finalists with its newly-updated CR-V crossover, with the other spots filled by the redesigned BMW X3 and Land Rover’s first-ever car-based crossover, the Range Rover Evoq.

The winners of the North American Car and Truck of the Year will be announced following the ribbon cutting at Detroit’s Cobo Center next Monday.

By AP / Tom Krisher – Monday January 2, 2012

(DETROIT) — After hitting a 30-year low in 2009, U.S. auto sales are poised for a second straight year of growth — the result of easier credit, low interest rates and pent-up demand for cars and trucks created by the Great Recession.

The sales forecast bodes well for the industry’s continued recovery and for the broader American economy.

In 2009, Detroit automakers were in peril. Car sales plunged as unemployment soared, and loans became harder to get. Chrysler and General Motors filed for bankruptcy protection. Ford avoided bankruptcy only by borrowing billions.

Now credit is more available, interest rates are low and Americans need to replace old cars and trucks they kept during and after the downturn. Millions of drivers in their teens and 20s are expected to buy vehicles, too. That could mean more jobs, more factory shifts and overall growth.

Vince Powell, a retiree from Winfield, Pa., recently traded in his wife’s 7-year-old Chrysler 300 luxury sedan for a 2011 model. The old car had 145,000 miles on it, but it was the deal he got that most attracted him: a low interest rate (2.7 percent per year), a six-year loan term and a big discount off the $31,900 sticker price.

“I’m getting a $300 per month payment,” he said just before closing the sale at Beaver Motors in Beaver Springs, Pa., near Harrisburg. “I’ve never had a new car for 300 bucks a month.”

In their effort to survive, all three automakers downsized and positioned themselves to turn profits — even if sales remained depressed. Now that sales are rising, the outlook has brightened considerably.

Automakers report U.S. sales for 2011 on Wednesday. When final figures are calculated, sales of new cars and trucks are expected to reach 12.7 million, up from 11.5 million in 2010 and 10.4 million in 2009, the worst year since 1982.

In 2012, they could climb as high as 13.8 million, close to what experts consider a healthy market — around 14 million.

December sales could reach an annual rate of 13.4 million, which would make it the second-strongest month of the year. Only November was better. Auto website Edmunds.com forecasts a 37 percent rise in sales at Chrysler Group LLC in December, thanks to new and revamped products such as the Jeep Grand Cherokee SUV and the Chrysler 200 midsize sedan.

Carmakers have announced plans to crank up factories and add thousands of jobs. Last January, Ford said it would hire 7,000 workers over the next two years. During the summer, GM said it would add 2,500 at the Detroit factory that makes the Chevrolet Volt electric car. Volkswagen hired 2,000 for a new plant in Tennessee, and Honda added 1,000 in Indiana. The industry will add 167,000 jobs by 2015, a 28 percent increase over current levels, predicts The Center for Automotive Research in Ann Arbor, Mich.

During the summer, the auto industry was adding jobs at a faster pace than airplane manufacturers, shipbuilders, health care providers and the federal government. It kept adding jobs even when the national unemployment rate rose above 9 percent, Standard & Poor’s downgraded U.S. debt for the first time and the stock market tumbled.

Government estimates show Americans spent roughly $40 billion more on new cars and trucks in 2011 than in 2009. Based on annualized figures from the first quarter of 2011, new-car spending totaled $206 billion, or 1.3 percent of the gross domestic product, Commerce Department data shows. That compares with $166 billion in 2009, about 1.2 percent of the country’s economy.

And the momentum in auto sales is likely to continue because people need to replace aging cars, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an automotive consulting company in Troy, Mich. The average American car is now 11 years old.

U.S. auto sales peaked at 17 million in 2005, when Detroit’s automakers were much bigger and overproduced cars that they were forced to discount heavily. Sales could eventually reach that level again around 2018, said Schuster, because of 70 million so-called millennials born between 1981 and 2000 who need to set up households and buy cars.

Other trends emerged in 2011. Many people bought smaller vehicles as gas prices hit a record average of $3.53 per gallon. Fuel-efficient compact cars, which have been vastly improved by automakers, are likely to unseat the midsize sedan as America’s favorite passenger car for the first time in 20 years.

At the other extreme, pickups rebounded as businesses started to replace older trucks. Sales for the year were expected to rise 11 percent, and Ford’s F-Series will remain the country’s top-selling model, a title it has held for more than three decades.

For much of the year, U.S.-based automakers took advantage of Japanese car shortages to increase sales, especially in the compact car segment normally dominated by the Honda Civic and Toyota Corolla. Japanese companies ran short of popular models after an earthquake and tsunami disrupted production in Japan in March.

Ford, GM and Chrysler saw their combined share of the U.S. market rise by 200,000 cars and trucks between the end of 2010 and November, 2011. The Detroit Three’s market share rose from 45.1 percent last year to 47 percent through November of last year. At the same time, Honda’s share fell 1.6 percentage points to 9 percent, while Toyota’s dropped 2.5 percentage points to 12.7 percent.

Schuster expects Japanese carmakers to take back some of the sales they lost.

Geoff Pohanka, who runs a chain of car dealers in the Washington area, said his December has been strong, thanks especially to the restocking of cars at his Honda and Toyota showrooms. He predicts Japanese car companies will offer incentives to regain lost sales.

Automakers vying for top honors at Detroit auto show

US Auto Industry to Post Good Sales Year

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