The Current State of the US Auto Market

dieselone

Speaking of weaker Toyota vehicles - the new Avalon must be one.

Sales say otherwise as the new Avalon has sold 23,846 through April. Only 29.5k were sold in all of 2012, so sales are way up. For comparison, the LaCrosse has sold 11,373 YTD (through April).

fintail

But 2012 was the end of an old design, buyers were waiting for the new one, and it seems to mainly have gone to rental fleets. 05-07 sales would be a better comparison, IMO.

I have seen several though, so they are selling. Ugly can sell too.

andre1969

I have seen several though, so they are selling. Ugly can sell too.

I really wonder what Toyota was thinking, when they did up that front-end on the new Avalon? Actually though, I don't think it would take too much of a restyle to fix it. I think my biggest beef is that big lower grille/airdam/whatever is so flat-faced, while the upper part of the front, comprising the headlights and the "proper" grille, is more prow-shaped.

It also suffers a bit from what I call the "1961 DeSoto Effect", where the upper grille has nothing at all in common with the lower.

I wonder if it would look better if they got rid of the upper grille, and just went with that lower part? With the exception of the front-end, I don't think the rest of the car is too bad looking. But, with it losing a bit of interior room, I being to wonder if it's really worth the premium over a Camry, which seems to have grown a bit.

dieselone

But 2012 was the end of an old design, buyers were waiting for the new one, and it seems to mainly have gone to rental fleets. 05-07 sales would be a better comparison, IMO.

From 05-07 the Avalon avg. 85k/yr or so. I don't know if that's an apples to oranges comparison as the market was stronger then. But for what it's worth, the Lacrosse avg. 70k a year during the same period. The much improved Lacrosse has never come close to matching the boring '05-'07 model.

I don't believe most go to fleets. According to Automotive Fleet, only 4.2% of total Avalon registrations were to fleets. (2011 is the most current info) The Taurus is the fleet queen of the large cars with nearly 50% (not including the old Impala).

dieselone

With the exception of the front-end, I don't think the rest of the car is too bad looking

I agree. I like the lines of the back 3/4 of the car. Honestly, for what ever reason, the front end doesn't bother all that much. I don't particularly like it, but I don't hate it either. IMO, it definitely looks more premium vs. the Camry.

andre1969

Strangely, I think the new Hyundai Azera almost looks more like a Toyota up front than the Avalon does! The upper part of the Avalon's grille makes me think a bit of a mis-mash of an '03-ish Accord and a Saturn, while the lower grille makes me think of the older Chrysler Concordes and Sebrings.

fintail

True the market was stronger then, but it can be adjusted. Say if it is 70% as strong now, sales are still sharper - as it is new model vs new model rather than new model vs old.

A big fleet sale came in 2012, as Enterprise Holdings started choosing the car. Maybe to make up for sagging retail sales.

I have yet to meet a private party who owns a new Taurus, although I do see private plated ones here and there.

fintail

That's the problem, the lower and upper parts look like different cars. 61 DeSoto, Exner, Toyolex - no coincidence. It's weird. A Lexus ES might be worth the premium it carries, too, as shockingly, it might be the best looking Lexus sedan right now.

I am not sure about the 6 window sedan trend going on, but the Impala might carry it nicer than others, at least outside of premium brands. Passat is ok too.

stever

I for one think GM should have gone through a normal BK, no Gov help.

Old GM couldn't have found debtor-in-possession financing so the only "normal" financing they could have found would have be a liquidation Ch. 7.

I now have two "direct" relatives doing auto supplier work, and they both are in Chattanooga. One has been struggling for a while. Thank you booming car industry. "Indirect" relatives over in N. Alabama also work in the industry and one of those makes GM engines.

busiris

Old GM couldn't have found debtor-in-possession financing so the only "normal" financing they could have found would have be a liquidation Ch. 7.

One can only imagine the amount of flak the administration would have received over GM going Chapter 7. No president would ever want that event as part of his legacy.

And, you're right. There wasn't any financial entity (short of the government) able to step up in a large enough way to make any difference.

It didn't have to end up the way it did, but by the time everyone finally got serious about realizing the old GM and Chrysler were toast, there really wasn't any realistic alternative to government intervention.

stever

I wonder how many years (or decades) the bail-out argument will be around.

Chrysler paid back their loans early the first go around, and you don't hear much about it any more. Maybe GM can donate a zillion to the Red Cross one year soon and generate some good will among the nay-sayers.

nvbanker

I really wonder what Toyota was thinking, when they did up that front-end on the new Avalon?

I have to agree. IMO, Toyota took some bad acid or something with most of their new styling - while their outgoing designs had that L-finesse influence, which was pretty flowing and beautiful for Toyota, best to date - they look like they didn't even try on this new Camry and Avalon! The insides are just as wierd as the outside. Seem disjointed, incongruous, confused to me. No flow to them at all. I'm a huge Toyota (car) fan - but would have a hard time buying a new Avalon or Camry. Would have to probably look at a Fusion or Altima/Maxima.

TAURUS - Outstanding car - ugly back end - tight interior, high price. Unfortunately, the new Avalon isn't quite ugly enough to force the Taurus to sell. How sad is that? I hope they can get it restyled very soon, before the car is scrapped completely.

Of course, I could be wrong.....

nvbanker

I don't have a problem "bailing out" GM. It would have been irreparable to the country to put all those people out of work. I didnt' like the way it was done though. I felt they should have gone through Bankruptcy first, jettisoned some of the ridiculous obligations, such as the jobs bank, first - then after they were down to core operations, give them this eggregious amount of money so they would have a reasonable chance to pay it back with profits. Not enough change was forced this way, and I'm afraid in 5 years, they'll be back for more. People think (have been misinformed) that they have paid back their loans. Only partially true, and billions have been forgiven.
The taxpayers have paid for this company's decades of inefficiency and arrogance - and I personally, won't support them further by purchasing one of their mediocre cars as well.

Conversely - I really admired what Mulally and Ford did.

stever

Ford hocked everything, even though the feds would have bailed them out too. But the Ford family would be out of the car business if that had happened. There's still a lot of rumbling about their priority stock ownership in the company.

My guess is that a bailout was Plan B if they couldn't survive by putting liens on everything; but yeah, they were more aggressive than GM or Chrysler when the recession hit.

busiris

Ford also went through a period of amassing liquidity in the couple of years prior to the crash, too.

http://www.nbcnews.com/id/29304253/ns/business-autos/t/how-long-until-ford-also-- needs-bailout/#.UZ1xrny9KSM

From the link:

A little more than two years ago, Ford secured a $23 billion line of credit to fund its now-scrambled turnaround, then called "The Way Forward." Arranged by Goldman Sachs, J.P. Morgan Securities, and Citigroup, the massive deal securitized and then hocked almost all of the company's North American assets, including the Ford logo. Even at the peak of the credit bubble, Ford's double-down strategy was viewed as reckless. All three major rating agencies downgraded Ford's debt after the deal was announced.

In hindsight, however, Ford appears to have gotten while the getting was good. The deal gave the company access to a cash pile that has set it apart from its rivals: At the beginning of February, Ford withdrew more than $10 billion to bankroll its capital-destroying manufacturing operations. Under the terms of the deal, its lenders couldn't say no. The main reason that Ford doesn't need a government bailout now is that it already received the private-sector equivalent.

Mr_Shiftright

Also worth considering is the buying public. Who wants to buy a new car from a company tottering on disaster?

stever

That trashing of their credit was likely a factor in GM and Chrysler's inability to get private financing.

The State of the US Auto Market would sure look different without the bail-outs.

Mr_Shiftright

I think the demise of General Motors would have caused a collective national mental depression.

iluvmysephia1

My guess is that a bailout was Plan B if they couldn't survive by putting liens on everything; but yeah, they were more aggressive than GM or Chrysler when the recession hit.

in light of the coming danger? Of course it was. Ford is by far the most aware and most intelligent car company in the U.S. It's hard to put down the decisions they made. The fact that they were daring should not be construed as either weak, stupid or ten times dumb. I respect Ford Motor Co. for how they handled 2008 and how people can support a bunch of dolts like GM (not Dodge, they're innocent bystanders) through this and actually plunk down hard Yankee currency for one of their rigs is beyond me.

No kidding.

tlong

There's the other side. Why assume GM is always the problem child and the one at fault? That was the theme in the previous GM discussion that closed.

Well there are always various points of view. IMHO Toyota out-competed the D3, whereas GM couldn't even out compete Ford. If you believe in survival of the fittest, then GM was an abject failure and shouldn't have survived. If OTOH, one believes in propping up poor performers for the sake of the "local economy" and "patriotism" then GM is a great story. I suspect that most people who believe the latter situation would also be in favor of keeping our markets closed, since that would also (in the short to medium term at least) "help" the local companies.

iluvmysephia1

I was probably a bit harsh in my comment about supporting GM. It is a free country and folks can spend their money on whatever car they wish. I think that saving all of those jobs was very, very important economically for the nation. I mean, we're talking about a million + jobs connected with GM, right? I have been laid off from Boeing before and it's not a nice thing ta go through. It's downright harrowing. I am glad their jobs were saved.

Now it's time to start buying 1961 through 1974 VW Bugs! Step to! :shades:

stever

not Dodge, they're innocent bystanders

Curious why Dodge skates but GM doesn't?

iluvmysephia1

I just like Dodge rigs more than GM. I was kidding. Haven't you gotten used to my personality by now? I can't be trusted!

Just kidding. I do love the new Dodge Challenger design. Anyone else notice that the Challenger is called a Dodge Challenger and not a Plymouth Challenger? Wasn't the Mopar Challenger called a Plymouth Challenger back in 1969?

tlong

....investing in things like this.

Tesla Motors announced today it has completely repaid the $465 million loan from the U.S. Department of Energy the company received in 2010. The funds were generated by Tesla through a recent sale of their stock, worth close to a billion dollars. The stock price had risen sharply after the company reported its first profitable quarter (and the stock still sits roughly 50% higher than before their earnings release). Today's payment of $451.8 million finished off both the loan's principal and its interest, nine years before the final payment was due. Tesla CEO Elon Musk said, 'I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the ATVM program, and particularly the American taxpayer from whom these funds originate. I hope we did you proud.'

stever

LOL, but you like everything. Until the next one shows up on your radar. :shades:

ohenryx

Anyone else notice that the Challenger is called a Dodge Challenger and not a Plymouth Challenger? Wasn't the Mopar Challenger called a Plymouth Challenger back in 1969?

Revisionist history? George Orwell, "NewSpeak"?

No, it was indeed a Dodge Challenger. The first year was 1970, I owned one, a convertible as a matter of fact. The Plymouth equivalent was the Barracuda, and I owned one of those as well. The Barracuda first shipped in 1964.

iluvmysephia1

iluv and the Mopar challenge is all. Keeping up with Chrysler and their constant changes can be a part-time job, ya know what I mean, Vern?

iluvmysephia1

LOL, but you like everything. Until the next one shows up on your radar.

True, and I don't know where this recent obsession with 1959-1974 VW Beetles comes from, only that it keeps panting on in my mind. I've already scared one of my family members concerning this, a sis who lives in Washington state. I truly laughed out loud after reading a Facebook post of hers regarding this issue the other day.

This one will be ongoing, I'll say for right now.

andre1969

No, it was indeed a Dodge Challenger. The first year was 1970, I owned one, a convertible as a matter of fact.

Which engine did your Challenger have? I imagine a convertible Challenger must be pretty rare, regardless of engine. I usually see a good number of them at the Mopar show in Carlisle PA...of course, that's a show that tends to bring out a concentration of them. I also see a bunch of DeSotos at that show as well...doesn't mean they're a common occurrence in everyday life, though!

What year Barracuda did you have? I always liked the '67-69 style.

lemko

The new LaCrosse is also a more upscale car than the old one. We only paid around $23K for our 2005 model when it was new.

anythngbutgm

I think Dodge skates because they got sold to FIAT in the whole thing and therefore it isn't Americans who need to keep them afloat anymore. Heck, when they were bought by Daimler was when I stopped associating them with Domestic makes myself...

The thing I don't get is how the whole bailout out of GM was so black and white when it came to outcomes? Why all the fear mongering that GM was going "Go out of business" and millions were going to be jobless, and the Country was going to turn into some 3rd World Depression zone? Why do we have these clowns up on such a pedestal and have so many believing that they are the Spine of the US economy?

According to this link, they have 200 thousand or so employees in the entire World, not "Millions"...

link title

News flash: GM doesn't operate in the vacuum of the US. In fact, out of those 200+ thousand, only 69 thousand of those are actually IN America! And how quickly we forget, while the company was failing here in the US, they were dominating up and coming areas like China and India at the same time.

But sadly, not many realize that GM has operations in Countries people never even thought of before either. So many just think that they Fail here, they Fail everywhere. Never mind the operations in Mexico, Uzbekistan, Poland, Korea, China, India, Canada, Thailand, Indonesia, etc, etc, etc... Again, Fear mongering by the press combined with the Zealots out in full force on Auto Forums had them believing the US economy revolved around the RenCen... :sick: The joke is on us. Americans got played...

But whatever, old news. The US bailouts are 3 years old now. Time to move on. The Bailout bug for the remaining (2) brands is now on the shoulders of the People of Australia.

link title

Mr_Shiftright

Well first of all, nobody said "millions". I think the number of GM employees was posted at 266,000.

But, let's not quibble. You ask a good question---why the panic and distress?

I think one has to remember the "national state of mind" at that time. Things WERE REALLY BAD in 2008. They were also moving really FAST. I don't think that the total collapse of the economy was out of the question.

Panic was in the air then.

We, with the benefit of hindsight, get to see how it all worked out. But "they" (whoever that might have been) were working in the "fog of war" and made decisions based on the information at hand, as it was developing.

A government has to move fast in situations like this. Whether it does too little or too much is somewhat beside the point---ACTION is very important.

anythngbutgm

I was referencing nobody in particular on the "millions" comment, but I recall the argument being made on numerous occasions here that if GM "went under" (LOL) basically the Country (suppliers, dealers, sales, janitors... ) would be left wandering the streets looking for food and shelter.

Because what happens to GM drives how the rest of the Country operates, or so the Zealots would have us believe...

andre1969

If GM had been allowed to go under, I'm sure the repercussions would have been worse, and it would have taken down a lot of other suppliers et al with it. I don't think Ford, Chrysler, Toyota, etc would have been able to pick up the slack quickly enough, so even though suppliers would have had other customers, they still might have gone under, and that could have had a domino effect, as other car makers would have to stop producing when they ran out of parts.

It would have all been sorted out eventually, of course. But, I think if GM had gone under, they were still big enough that it would have done a lot of damage to this country. And, while things are far from perfect today, we might not have even recovered to this point, had GM gone under.

Mr_Shiftright

One also has to consider GM's relationship to national defense.

Will we outsource our tanks to China? :P

anythngbutgm

I agree with you about how bad things were in 2008. I was affected by it financially myself and the company I worked for (Military/Government contracts) almost went out of business as well, had it not been bought by a larger conglomerate. Hey, where was our bailout? :shades:

anythngbutgm

I see where you are coming from, but my argument is that GM would not have, and could not have fully "gone under". It's not a light switch, it's not instantaneous.

Again, they have Operations all over the globe, they also have partnerships with other companies like Mahle, GMDAT, Linamar, LG Chemical, SAIC, Camcor, Fuji, about 100 different companies in China, etc.

They were essentially "Too big to fail". But Americans don't know the big picture, so they were duped into believing the worst was in store.

imidazol97

>Will we outsource our tanks to China?

Naaah. I'm sure toyota and Nissan would be happy to convert their factories to produce war machines as was done in WWII. :P :shades:

imidazol97

>fully "gone under". It's not a light switch, it's not instantaneous.

I don't understand that. Have you known anyone who worked for a company where the money ran out? They close down and quit operation. They don't just say, oh here's a few hundred million more we'll spend from our lenders, besides the billions we already owe them.

Even with individual stores in a chain, one morning the doors are locked and armed guards escort people to their desk to retrieve personal property and they're escorted off the property with a cardboard box.

Of course the idea of restructuring via a bankruptcy was the hope. But the unions and Obama had different ideas about "restructuring" than most bondholders and the general working public had. The company ends up partially owned by the union and the union still existed in contractual relationship with GM. I suspect most of us here would assume the union and past agreements should have been null and void and new agreements much more favorable than the ones GM historically owned because of past management's mistakes would have been put into place.

anythngbutgm

Cadillac to recall 20,000 SRX models over wheels that could fall off

Mr_Shiftright

I'm with imidazo on this one--I think GM could fold up its tent and lock the doors within a few weeks, at least domestically.

If anything, I think 2008 proved how incredibly fragile corporations can be, because many of them (not all, certainly) are so strung out that they aren't much different from a family of 4 living on credit.

Some companies might be sitting on piles of cash, but there's a definite interlocking system going on here, and the weaker can pull down the stronger.

Why do you think everyone is so freaked out about cyber-attacks?

Exactly....bad things can happen VERY quickly in our complex, interconnected economy.

Sure, the GM buildings don't go away...I mean, much of Detroit is still there, but look at it.....

tlong

If GM had been allowed to go under, I'm sure the repercussions would have been worse, and it would have taken down a lot of other suppliers et al with it.

I like the suggestion made by another poster that instead of bailing GM, the government could have bailed the suppliers to support them and let GM go. Then companies like Ford would have taken up much/most of that GM slack, and the truly valuable parts of GM would have survived through other companies or entities.

Alas, ancient history now.

tlong

Naaah. I'm sure toyota and Nissan would be happy to convert their factories to produce war machines as was done in WWII.

Well, we've been supporting Japan's defense for >50 years, so maybe it's time for them to put some skin into our game!

tlong

I don't understand that. Have you known anyone who worked for a company where the money ran out? They close down and quit operation. They don't just say, oh here's a few hundred million more we'll spend from our lenders, besides the billions we already owe them.

Yes, but a lot of the time that doesn't happen, as well. In fact, I believe that total liquidation is fairly rare versus other modes of failure.

fho2008

Exactly...we will never know.

fho2008

There was a major grocery store chain here in the Chicago area that after being here in my small town for many years, and about a year after building a new store here decided one day to close down.

They pulled the plug after over 100 years. Shut down.

Did the suppliers suffer? A little I'm sure. Did the grocery stores sit unused? Not for long. Another store bought em, changed the store name to their name and a few other things and guess what? Business as usual, one less competitor, but theres always competition. Start ups. Nationwide stores.

So I don't buy how letting GM learn from decades of mistakes would have been such a disaster.

Suppliers sold milk and potato chips to other stores......I can guarantee you none of the companies that make the pizza, chips, bread that we all buy went out of business because of this.

And we would have been just fine with a smaller GM that got what it deserved.

tlong

Hi, I recently rented a car on a business trip and managed to get a brand new Ford Fusion Hybrid. Here are some thoughts:

• This car is big, bigger than I like. Feels noticeably larger than the previous gen Fusion

• For the amount of size outside, it doesn't feel all that big inside. The sleek shape cuts into interior room

• The cream leather upholstery was very nice and smelled good, too

• Where the upholstery was impressive, the interior was decent but not what I'd call excellent

• The dash is cool. It took me a bit of time to figure out how to "start" the car. You insert the key and still "turn" it as if you were starting the engine. But instead of starting the engine, it just turns on a sort of "ready to drive" symbol in the dash. When you put the car into gear, you start rolling if the brake is off and it behaves just like an automatic transmission, even though the engine is not running yet. Once you start to accelerate under electric power, the engine kicks in.

• The engine is a bit coarse compared to the smoothness of the electric drive

• The car drives well and has an impressively tight turning circle for a vehicle of this size

• The trunk has a "ledge" in it which I assume is the batteries taking up a bunch of space. It's sort of unfortunate that so much of the trunk floor is taken up by two levels of floor rather than one flat floor - it was nearly a problem for my luggage.

• Fuel economy appears to be pretty impressive for a vehicle of this size

Conclusion - although it wouldn't be a car for me (as it's bigger than I like), I was pretty impressed. Ford is doing some great things and the effort shows. The Fursion hybrid was very nice inside and quite refined. If you want a midsized car that is fairly luxurious and gets great mileage, then this should be on your consideration list.

busiris

They pulled the plug after over 100 years. Shut down.

Did the suppliers suffer? A little I'm sure. Did the grocery stores sit unused? Not for long. Another store bought em, changed the store name to their name and a few other things and guess what? Business as usual, one less competitor, but theres always competition. Start ups. Nationwide stores.

I would say that depends on a lot of factors. I could just as easily make the opposite observation by citing the number of K-Mart and Circuit City stores nationwide closed years ago that remain vacant to this day. In my area, there are several auto dealerships that closed due to GM and Chrysler restructuring, and they're also still vacant, awaiting tenants.

In the case you cited, its great someone else came in and filled the vacuum, but as we all know, one example doesn't necessarily make a rule.

tlong

I would say that depends on a lot of factors. I could just as easily make the opposite observation by citing the number of K-Mart and Circuit City stores nationwide closed years ago that remain vacant to this day.

For the closed Circuit City stores, as an example, those buyers are now using Best Buy or Target or WalMart or Amazon. So the business didn't go away, it just moved to a different supplier. The weakest supplier (Circuit City) failed and closed.

Of course if the overall electronics market is shrinking, then everybody is going to see that downturn and the effects are not limited to one company.

One of the benefits of our system, when allowed to take it's natural path, is that the weakest effectively extinguish themselves, and the strongest survive. For societies where industries have been propped up, typically mediocre or worse products prevail due to the stifling of that competition. Look at the cars from Eastern Europe during the Cold War as an example.

This is why allowing some natural selection is important. I want to see the U.S. produce the best products. Allowing failures to become successful weakens our ability to be the best, in the long run. Does anybody doubt that Ford and GM vehicles are better than they would have otherwise been if not for the "Japanese invasion" in the 70's and 80's?

andre1969

In my area, there are several auto dealerships that closed due to GM and Chrysler restructuring, and they're also still vacant, awaiting tenants

Same here. In fact, the old Chevy/Dodge/Isuzu dealer that I bought my Intrepid from (and my Dad bought an '03 Regal from, my uncle bought a '94 GMC and '97 Silverado from, and Mom even bought an '86 Monte Carlo from ) got shuttered a few years ago, and to this day stands vacant on busy Route 301 in Upper Marlboro, MD.

Awhile back, we also lost a big dealership just south of College Park, MD. For years it sat vacant, although now the land is finally getting razed, subdivided, and they're putting up condos and trying to pass it off as some kind of trendy, artsy-fartsy area to live.

We lost Border's Books last year, or the year before...can't remember which now. It was replaced, at least. But, by a Dollar Tree. So, there are still some jobs there, but I'd imagine the Borders jobs paid a bit better. And, there's a few empty WalMarts here and there, as they occasionally like to uproot and move to better areas, and leave behind an empty shell that's usually too big for anybody else to use.

But, overall, unemployment is fairly low in my area, so I guess those lost jobs and such are getting replaced, somewhere.