Car Biz Weekly

Month after month, automakers and car dealers have seen dismal sales numbers have driven plenty of people out of business. However, June sales may be a turning point, as the month showed glimmers of hope for sales. The question remains whether this glimmer of hope is a sign that the worst is over.

General Motors finished the month with a 33 percent decline in sales, down only slightly more than analysts predicted. In addition, Toyota and Chrysler both faced declines that were worse than predicted. The only automaker to perform better than expected was Ford.

While auto sales data from June is by no means overwhelmingly positive, Florida Commercial Trucks points out that the sales numbers have improved compared with other months earlier in the year. June sales overall slipped from 9.9 million cars to 9.7 million cars. But despite the declines, June still marked the second best performing month yet this year, which again may not be too exciting, but it’s something.

The auto industry has a long way to go before it can return to its former health. Rather than a sharp bounce back, auto sales are likely to recover only gradually over a long period of time suggests Yonkers Used Cars. But analysts with Edmunds.com suggest that the leveling off of sales declines seen in the month of June is at the very least a sign of stabilization.

Other analysts have been even more optimistic, stating that current auto sales suggest that the worst is now over. A sign that this optimism is warranted is the fact that GM saw a 10 percent increase in sales in the U.S. compared with last year. Peoria Chevy says that the overall decline at GM was actually attributed to a huge hit to fleet sales. With Chrysler already out of bankruptcy, its partnership with Italian automaker Fiat has yet to have an effect on its lineup. Meanwhile, a used cars Saginaw dealer suggests that fleet sales have also hurt Chrysler’s overall sales figures.

As already mentioned Ford has fared better, both increasing market share and performing better than predicted. It still faced a sales decline, but the drop was not nearly as bad as recent months. In another encouraging sign of momentum according to Jersey City Lincoln Mercury, Ford has also noted declines in inventories and will also be increasing production for the third quarter of this year.

Typically, Korean and Japanese automakers have been far more resilient when compared with the Big Three. However, automakers such as Toyota have not been immune to the devastating effects the economy has had on the auto industry. Toyota June sales were worse than predicted. Both Honda and Nissan saw significant sales declines as well, but were relatively aligned with predictions. Continue reading ‘June Auto Sales May Suggest Hope’

The bailout package for Detroit has sparked controversy and mixed feelings as some have felt that the Big Three brought trouble on to themselves. But with many others hoping the government will step-in soon to provide vital financial help, it isn’t only American drivers hoping for a bailout. Toyota and other Japanese automakers also endorse the use of federal aid to keep General Motors, Chrysler, and Ford out of bankruptcy and in the marketplace.

Toyota recently released statements that uphold the notion of a bailout for the Big Three. Toyota is in support of any initiative that helps the automotive industry. While this may seem unusually for a competitor of the Big Three to hope for their survival, a Toyota dealer Cheyenne say it makes much more sense than it may initially seems.

The dynamics of the auto industry are such that the fate of each are intertwined with each other, and as such as Toyota and Honda hope for the survival of GM and Chrysler, even if it seems counter intuitive on the surface. First, Asian automakers produce 3 million vehicles per year at facilities within the U.S. If the Big Three fell into bankruptcy, the Asian automakers fear that their own production may be in jeopardy, as a Cleveland used Toyota notes Toyota accessory and parts suppliers may also be sucked into financial peril with a Big Three bankruptcy.

With a great amount of overlap between those supplying the automakers, Birmingham Honda dealers think it will be inevitable that the production will be disrupted due a potential bankruptcy.  It could take months before Toyota or another automaker would be able to stabilize production and return operations back to normal.

Asian automakers have made steady gains in the North American market in recent years. With manufacturing and dealer operations working in their favor, one used car dealer boston believes that Japanese automakers don’t want to mess with a good thing and see Detroit place strain on their manufacturing output.

But manufacturing isn’t the only area where a Big Three bankruptcy will cause intense strain. Dealers in the U.S. often sell a combination of domestic and overseas brands such as Spokane Chevy. Not only would inventory be affected, but dealers also believe that a Big Three failure would also eat away at the already low demand for new cars. November auto sales saw substantial declines in demand, causing a 26-year low for auto sales.

The U.S. remains the largest market for Toyota, Honda, and Nissan, which is why a stable market, with the Big Three alive and well, is essential to helping theses automakers maintain momentum. Already, weak overall demand in the U.S. has forced Japanese automakers to lower their sales projections, which is why the automakers,  points out one Pittsburgh Honda dealer, are hoping for any measure that will bring stability to the industry and bring about consumer confidence.

With weak sales and a poor economy, Toyota and other automakers are simply not immune to sales and production issues. For example, this week Toyota cut its plans to open a new manufacturing facility in Mississippi. The plant was scheduled to produce the next generation Toyota Prius, which has previously been in high demand at Toyota Albuquerque and elsewhere across the country.

It’s expected that the Japanese automakers would gain greater market share should a Detroit automaker fail. However, Nissan Tacoma fears that having to sell inventory of the failed brand would depress the prices of new cars throughout the inventory, at least in the short term.

While the failure of a U.S. automaker could place strain on Japanese automakers, it could open doors for others. An Indian or Chinese automaker, for example, could purchase assets of the failed company and become a low cost option for American consumers. India’s Tata and China’s Geely are two such automakers that are gaining ground in developing markets, and may see such an opportunity to enter the lucrative U.S. market cost effectively. Regardless, Acura Auto Service Pittsburgh and others in the auto industry feel that a ripple effect will eventually reach them from the fall out of a Big Three bankruptcy.

Having upstart companies from overseas compete within the U.S. is nothing new. Korean automakers have slowly been carving out their own market share for years, with more even greater moment in recent years thanks to attractive, high-value models says Hyundai Chicago dealers. But by piggybacking off of the assets, design, and dealer network of a U.S. automaker, an Indian or Chinese automaker would have the opportunity to grab market share at a quicker pace than their Korean rivals.

To prevent upstarts maintain the inroads they’ve gained over decades of hard short, Japanese automaker such as Toyota are hoping for the survival of GM, Chrysler, and Ford. They also don’t want to see an upstart automaker make inroads in the wake of a domestic automaker’s failure. Continue reading ‘Why Toyota, Honda, Nissan, Support Federal Bailout for Detroit’