Category Archives: Auto Industry News

AutoNation posts growth on back of used car sales

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Posted in Auto Industry News

AutoNation, one of the largest chains of auto dealerships in the U.S., reported a strong uptick in sales during the second quarter, signalling that consumer confidence may be returning to the auto industry.

The growth came on the back of a 28 percent surge in used car revenue, along with a 20 percent increase in new car sales. Combined, the result was a 25 percent increase in revenue derived from sales and a 20 percent overall revenue growth compared with the previous year. According to analysts polled by Reuters, the results were beyond expectations.

“We delivered strong double-digit growth in the second quarter, which was driven by both new and used vehicle unit sales and revenue. We continue to expect full year industry new vehicle unit sales to be in the range of 11.5 million new units,” said CEO Mark Jackson. “We continue to see a solid automotive recovery going forward.”

AutoNation purchases dealerships and runs them under their own brand, which gives them the largest amount of cars for sale in the country, according to the company. For example, AutoNation recently announced the acquisition of the Toyota Mall in Atlanta, the city’s largest new and used Toyota dealer.

The company said that domestic brands strongly contributed to the growth, especially Ford and Chevrolet.

U.S. may have been too hasty in closing down car dealers

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Posted in Auto Industry News, Chevrolet, Chrysler - DO NOT USE, General Auto News

A new report by the Troubled Asset Relief Program has found that the United States Treasury Department should have carefully considered its decision to order GM and Chrysler to close hundreds of dealerships while the two companies were in the bailout process.

GM and Chrysler both went bankrupt during the financial crisis, forcing the government to step in and take over the companies’ balance sheets. The Treasury Department rejected GM and Chrysler’s plan to close dealerships over a five-year period, calling the measures “too slow,” and instead asked the two automakers to close hundreds of dealerships immediately in an effort to cut costs. Now, many are questioning the decision, as GM and Chrysler have rebounded to the point that they are reinstating many of the dealers.

Special inspector general Neil Barofsky wrote in his recent report that “such dramatic and accelerated dealership closings may not have been necessary and underscores the need for the Treasury to tread very carefully when considering such decisions in the future”

With the closing of so many dealerships, many lightly used cars have found their way onto the pre-owned market. Drivers in areas with a closed GM or Chrysler dealer may want to head to a used car lot in order to find deals and savings.

Toyota and Tesla to work on electric RAV4

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Posted in Auto Industry News, Toyota

Toyota has announced plans to work with electric car company Tesla in order to develop a battery-powered version of its popular RAV4 crossover.

The Toyota-Tesla partnership began when Toyota invested about $50 million in the small company earlier this year. Since then, Tesla successfully went public and began plans to take over Toyota’s closed NUMMI factory in California.

The new electric RAV4 is the first joint venture on a vehicle between the two. Toyota will provide most of the parts for the vehicle, while Tesla will contribute its electric powertrain and battery technology, according to the Los Angeles Times.

Interestingly, the car is not the first electric RAV4. Toyota previously made several limited edition prototypes of the vehicle earlier in the decade, but never commercialized the product for the mass market.

“The Toyota RAV4 EV has been a terrific workhorse for the past decade. Hundreds of the original cars are still running seven to 10 years after manufacture in both fleets and private hands,” Paul Scott, one of the rare owners of the first-generation RAV4 EV, told the news source.

Those who still prefer their vehicles powered by gas may want to consider purchasing a used Toyota RAV4.

Automakers focusing on gas mileage

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Posted in Auto Industry News, Chrysler - DO NOT USE, General Auto News, Honda - DO NOT USE

Traditionally, automakers only make small changes on models year-to-year, only truly changing the cars with their publicized “redesigns.” However, sometimes automakers make small tweaks to increase a car’s appeal, as they have been doing lately in attempts to improve gas mileage.

Fuel economy has become an important consideration for consumers looking to save at the pump. With that in mind, some automakers are making slight changes to their vehicles in order to improve their EPA-rated mileage, according to the Associated Press.

Honda, for example, has made some slight changes to its popular Accord model for the 2011 model year. Changes to the car’s aerodynamics, gears, and engine friction have increased mileage from 31 to 34 miles per gallon on the highway and 21 to 23 in the city. That puts it in second place of the midsize models for fuel economy, trailing the Hyundai Sonata’s 35 mpg.

Chrysler has also announced plans to make similar changes to its Sebring and Dodge Avenger models, promising large increases to their current ratings of 21 city/30 highway miles per gallon.

Those looking to save money might want to look at fuel efficient used cars, as they will save money not only at the pump, but also at the dealer.

Ford and Chrysler are the latest to recall

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Posted in Auto Industry News, Chrysler - DO NOT USE, Ford

In the wake of the massive Toyota recalls, the National Highway Traffic Safety Administration is cracking down on auto companies’ safety defects more than ever. The two latest brands forced to recall vehicles are Ford and Chrysler.

According to Reuters, Ford will recall 33,700 of its Transit Connect commercial vans, due to an interior liner flaw that may not properly protect a driver in case of a crash. The vans are popular among small businesses and similar ventures.

“In the event of a vehicle crash, an occupant could be at increased risk of injury,” the NHTSA summarized in a letter to Ford.

Meanwhile, Chrysler will recall 22,000 of its 2010 model Dodge Nitro, Ram 1500, and Jeep Liberty and Wrangler trucks and SUVs, due to a tube problem that may leak brake fluid.

Those in the market for a vehicle may want to avoid new cars until recalls and defects are sorted out. Small businesses, for example, may opt to buy a used Ford Transit with no history of defects in order to ensure their business runs smoothly and uninterrupted by safety recalls.

Nissan plans hybrid move

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Posted in Auto Industry News, Nissan

Nissan has announced that it will debut its own hybrid system, over a decade after competitors have already been selling the vehicles.

The Japanese automaker may be late to the hybrid game, but the company says that its patience has paid off in the form of more effective hybrid technology. According to Reuters, Nissan’s in-house developed system features a single electric motor that detaches from the gasoline engine when fully charged, allowing travel on purely electric power. In addition, its battery is made of lithium-ion, a lighter and more efficient option than the nickel used in vehicles like the Toyota Prius.

Nissan will debut the features on its upcoming Infiniti M hybrid. A spokesman for the automaker says that the car will get at least 60 to 90 percent better fuel economy, and hopes to double its EPA-estimated mileage per gallon. The company also plans to begin selling its all-electric Leaf model in December.

Although lithium-ion is lightweight, it is also more expensive than its nickel-metal counterparts. Those who want a more affordable hybrid vehicle may want to search for a used Toyota Prius.

Toyota recalls to continue

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Posted in Auto Industry News, Toyota

The past couple of months have not been kind to Toyota. The Japanese automaker, whose Corolla and Camry models have often been praised for their durability and safety, may reportedly institute even more recalls. The company has already recalled 10 million vehicles since September, with many due to an unintended acceleration problem that has put the automaker in hot water with the National Highway Traffic Safety Administration.

However, those aren’t the only problems the automaker faces. In recent weeks, Toyota has also recalled some Lexus hybrids for a fuel leak problem, as well as several thousand more cars for a problem with airbag deployment.

Now, there is widespread speculation that Toyota will recall 27,000 more vehicles for faulty engines. According to the Associated Press, the company has received over 200 complaints of engine issues, some of which cite a strange noise coming from the vehicle. While the company has yet to issue a recall, a Toyota spokesperson has said the company is considering its options.

While new Toyotas have been plagued by a variety of issues, used Toyota cars may still provide the reliability that drivers are looking for. In addition, the resale value of Toyotas has taken a hit in the wake of these announcements, so drivers may be able to find deals.

Mercedes coupe-crossover in the works?

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Posted in Auto Industry News, Mercedes-Benz

Mercedes-Benz may be developing a coupe-crossover model to compete with the likes of the Acura ZDX and BMW X6.

According to Motor Authority, the company is planning to introduce a smaller version of the its GLK model, dubbed the GLC, in order to truly enter into the emerging coupe-crossover class. Crossovers built on compact coupe platforms have become especially popular at luxury car manufacturers, who already have the technology in place with coupe platforms and traditionally sell a large amount of crossovers.

The new model will be based on the upcoming new B-Class platform. The news source theorizes that Mercedes will likely use one of its four-cylinder engines on the crossover, either the 1.8-liter with 204 horsepower or 2.2 with 250. At just fifteen feet, the GLC will be smaller than its competitors.

However, a new, smaller coupe-crossover class may be emerging. The Range Rover LRX will be very similar to the proposed GLC, and BMW may be planning to introduce a smaller version of the X6 in the near future.

Those who don’t want to wait for the new models may want to search for used BMW X6s or Mercedes GLKs at their local pre-owned dealer.

Ford continues turnaround, paying off debt

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Posted in Auto Industry News, Ford

Ford has announced that it will pay off nearly $4 billion in debt to the United Auto Workers retirement trust fund, defying investors’ expectations for the automaker.

Although the company has been profitable for several quarters now, investors were hesitant about the company’s turnaround because of its outstanding debt, the largest of which was owed to UAW. However, increased sales have allowed the automaker to pay the deficit off ahead of schedule, using cash rather than stock options.

“We expect to continue to improve our balance sheet as we deliver on our plan. Importantly, our business results make it possible to take these actions while still accelerating the investments we are making in our business to serve our customers with the very best cars and trucks," CEO Alan Mullaly said in a statement.

The company has pulled off a remarkable turnaround as of late, shaking off the effects of the economic downturn. Its new models, especially the Mustang and Fiesta, have won considerable critical acclaim, and the company’s finances seem primed for future growth.

That being said, consumers are unlikely to find the recession-buster deals at the new car lot they did in the past. Drivers who see themselves in a Ford might want to take a look at the used car market in order to find a good deal.

Questions abound over unintended acceleration

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Posted in Auto Industry News, Toyota

Toyota has come under fire for an unintended acceleration problem in its vehicles, which the National Highway Traffic Safety Administration says may have accounted for over 80 fatalities. The NHTSA slapped the Japanese automaker with a 16.4 million dollar fine for not responding quickly enough to the problem.

Now, NHTSA head David Strickland is saying the cases need further investigation to prevent future accidents, according to BusinessWeek. While Toyota claims that faulty floor mats stuck on pedals caused the problem, there is widespread speculation that the true cause might be in electronic control systems.

"We must do everything possible to fully understand if there are vulnerabilities in these systems to cause this happening," Strickland told the news source. He went on to say that problems similar to Toyota have been reported for “every major automaker,” although not as widespread. NASA is currently looking into the matter on behalf of the agency.

The problems marred Toyota’s previous sterling reputation for safety. Until the cause of the issues are found, safety-conscious drivers may want to look at used cars without electronic control systems.