Tag Archive | "Ford"

Will Auto Dealers Become an Endangered Species?

It’s been the best of times for auto dealers since the recession.

Those that survived picked up business from those that didn’t. They reorganized their operations to be leaner and more efficient. Auto sales soared 59 percent to 16.5 million last year from the 2010 low point, reports The Detroit News.

But reports from two different analysts say that dealers better start preparing for stormy, disruptive weather.

Looking several decades out, expect auto sales to plunge, Brian Johnson, an analyst at Barclays Research, recently told auto industry investors.

This will be caused by the rise of autonomous, or robotic, cars.

Looking forward 25 years, Johnson says about half of people will still purchase vehicles for driving in rural areas and for jobs that require driving. Everyone else — people who use vehicles purely as a means of transportation — will be sharing autonomous cars.

That would slash annual U.S. auto sales to 9.5 million.

“A historical precedent exists — horses once filled the many roles that cars fill today, but as the automobile came along, the population of horses dropped sharply,” Johnson said.

He estimated that such a transition would force manufacturers “to shrink dramatically to survive,” with General Motors and Ford slashing North American production by up to 68 percent and 58 percent, respectively. Such a reduction could turn thousands of auto dealerships into surplus real estate.

Meanwhile Adam Jonas of Morgan Stanley Research is telling investors to expect a massive consolidation among new and used car dealers and the service business.

“The U.S. auto retail pie is worth nearly $1 trillion split roughly 10,000 ways,” Jonas said.

“Putting aside dealer franchise laws … just given the technological changes we anticipate hitting the automotive industry, we think there could be some room for a bit of consolidation here,” he said, predicting the business will fall to “as few as tens of groups in the future.”

Much of this will come from people bypassing dealers.

“As consumers move from owning cars to sharing cars auto retailers will face fundamental changes to their place in the mobility ecosystem,” Jonas said.

This will raise legal questions as dealers attempt to use the patchwork of state franchise laws to protect their turf.

Efforts by dealer groups in various states to limit Tesla Motors’ move to bypass car dealers and sell its vehicles through company-owned stores is an early example of this tension

Other analysts are already pointing to the lawsuit filed earlier this month by the California New Car Dealers Association against TrueCar Inc., which operates a digital platform for car sales, as an example of dealers attempting to protect their business from technology-based interlopers.

“If a tech firm were to operate a fleet of say 10 million cars in a pay-by-the-mile or by-the-minute model, would such a business fall under the umbrella of current dealer franchise laws?” Jonas asked. “It’s a gray area. But as this issue attracts broader scrutiny and analysis we expect the gray to become black-and-white rather quickly.”

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Ford’s U.S. Vehicles Sales Dip 1% in May

DETROIT – Ford Motor Co.’s total U.S. vehicle sales slid 1 percent year-over-year to 250,813 units in May, with retail sales down 2 percent to 171,535 vehicles and fleet sales flat at 79,278 units, reports mlive.

While trucks and SUVs have been strong sales drivers in the U.S. for automakers this year, Ford’s results were mixed, which is curious, especially after the company announced Tuesday it was reducing its production-shutdown schedule this summer to meet demand in these segments.

Sales of the company’s best-selling vehicle, the F-Series truck, fell 10 percent in May to 61,870 units. However, Ford said Tuesday that result was on “tight supply, as the second F-150 facility – Kansas City Assembly Plant – ramps up to full line speed this quarter.”

Meanwhile, the Ford Edge established a May sales record, and commercial vans had their best performance in the month since 1978. The company also noted that its 2016 Explorer went on sale in May, and sales were up 24 percent.

Here’s a closer look at sales by brand and segment:


Sales of Ford-brand vehicles dipped 2 percent to 241,639 units in May, compared with the same month in 2014.

Ford cars

Sales of Ford cars were up 2 percent to 85,846 units. The increase was led by rises of 31 percent to 9,426 units for the Fiesta and of 40 percent to 13,616 units for the Mustang. Focus sales edged up 1 percent to 23,934 units. Sales of the C-Max dipped 8 percent to 2,607 units, while Fusion sales also dropped 8 percent to 31,325 units.

Ford utilities

Ford utilities sales slipped 1 percent to 72,541 units. Escape sales fell 8 percent to 29,2487 units, Flex sales declined 14 percent to 2,443 units and Expedition sales dropped 18 percent to 4,147 units. Those decreases were partially offset by a 34 percent rise in Edge sales to 14,399 units.

Ford trucks

Sales of Ford truck were down 5 percent to 83,252 units in May. As mentioned, the F-Series fell 10 percent to 61,870 units. Sales if the Transit connect rose 8 percent to 4,576 units, while sales of Heavy Trucks dipped 2 percent to 727 units.


Lincoln-brand vehicle sales were up 4 percent on an annual basis to 9,174 units in May.

Lincoln cars

Sales of Lincoln cars fell 14 percent to 3,909 units. The MKZ was off 11 percent to 3,296 units, and the MKS dropped 28 percent to 613 units.

Lincoln utilities

Lincoln utility sales climbed 23 percent to 5,265 units. Sales of the Navigator grew 50 percent to to 1,046 units, and the MKC sold 2,289 units, compared to 677 for a previous model. Sales of the MKX dropped 38 percent to 1,488 units, and the MKT fell 12 percent to 442 units.

“We continue to see strong consumer demand for our newest products, including Edge, F-150, Mustang, Transit Vans and Lincoln MKC,” Mark LaNeve, Ford’s vice president of U.S. marketing, sales and service, said in a release. “Our all-new F-150 is still turning on dealer lots in 26 days against tight supply, and F-150 average transaction prices set a record in May, as customers continued buying a rich mix of high-series pickups.”

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Takata Air Bag Recall Expands to Record 34 Million Vehicles

As part of an agreement with Takata, federal regulators expanded the recall of vehicles equipped with the company’s air bags to 33.8 million in the U.S., making it the largest safety recall in the nation’s history, reports Detroit Free Press.

The move essentially doubles the number of vehicles being recalled to replace potentially lethal air bags made by the Japanese supplier. At least six people have died and more than 100 have been injured from shards of metal from exploding air bags.

Takata, for its part, officially acknowledged the defects for the first time on Tuesday, even though 17 million vehicles with its air bags already have been recalled.

Mark Rosekind, recently appointed administrator of the National Highway Traffic Safety Administration, said no one knows how long it could take to fix the vehicles, but “it could take some years. … We intend to make sure at the end of this process there is a safe airbag in every vehicle.”

The NHTSA recall now involves 11 automakers, including the Detroit Three, most affecting 2002 through 2008 model years. Takata is partly owned by Honda, which has the highest percentage of recalled vehicles. The total number could change as automakers sift through the specs of all of their models to determine which ones contain any of the four defective inflators, which activate the air bags in a collision.

Many consumers will have to drive their vehicles for a long time before the parts are available to fix them, with the industry unable to manufacture replacement bags fast enough. They could also be waiting months for the notification their vehicle is subject to recall because automakers must prioritize vehicles at most risk based on their age and geographic location

The announcement is the second example in as many days of Rosekind cracking down on automakers to address safety on U.S. roads. On Monday, Rosekind announced he has scheduled a hearing in July for Fiat Chrysler Automobiles to explain their slow response in completing repairs in 20 different recalls.

NHTSA has been pushing for Takata to expand its air bag recall. Automakers had recalled about 17 million vehicles, many of them from Honda. The latest move largely makes this a national recall of vehicles from 11 automakers with vehicles that potentially have faulty inflators in the driver or passenger-side air bag.

“Up until now Takata has refused to acknowledge that their airbags are defective, that changes today,” said U.S. Treasury Secretary Anthony Foxx. “Takata has agreed to declare their air bag inflators are defective.”

Takata Chairman Shigehisa Takada, in a statement, said, “We are pleased to have reached this agreement with NHTSA, which presents a clear path forward to advancing safety and restoring the trust of automakers and the driving public.”

The supplier has also agreed to enter into a consent order with NHTSA to supply all related documents and information about the defective airbags and pledged full cooperation going forward.

In return, NHTSA has suspended more than $1 million in accumulated fines — $14,000 per day since February — for not responding to all NHTSA’s inquiries. The agency has not ruled out more fines in the future and there could be further civil penalties.

Initially the exploding air bags were considered a problem only in hot and humid climates but the recall has been expanded nationally as Takata and affected automakers continue to try to identify the root cause of the problem so they can fix it.

The recall has also expanded to cover both driver and passenger side air bags in more vehicles and regions.

Automakers with affected vehicles include Honda, Toyota, Ford, BMW, Fiat Chrysler Automobiles, General Motors, Mazda, Mitsubishi, Nissan, Subaru and the newly added Daimler Trucks. The automakers formed a coalition and hired independent engineering firm Orbital ATK to try to find the cause of the exploding air bags. Their investigation is in addition to those being conducted by NHTSA and Takata in an industry-wide effort to find the reason for the defect to make sure it is fixed properly.

NHTSA also is opening its own testing program to focus on ensuring the remedy is completely safe. Rosekind said while the replacement air bags are safer than the ones they replace, he cannot guarantee their long-term safety at this time.

“We are doing our best to keep focused on the investigation,” said former NHTSA Administrator David Kelly who was hired to oversee the investigation by the automakers. Efforts to determine the root cause are still in the early stages of testing, he said.

Safety officials warn consumers to keep checking their vehicle VIN number on the www.safercar.gov website because even some of the vehicles previously fixed – or excluded in the past — could be back on the recall list in the future.

Consumer who receive recall notices should call their dealer immediately.

“Folks shouldn’t have to drive around wondering if their airbag is going to explode in their face or if their car is going to be on another recall list,” said U.S. Sen. Bill Nelson, D-Fla., the top Democrat on the Senate Commerce Committee and a key figure in a congressional probe into the defective airbags. “We’ve seen the recall list double now to 30 million cars. Let’s hope Takata’s admissions today tells us the whole story.”

Rich Newsome, an attorney representing seven victims of faulty Takata air bags, including Corey Burdick, a Florida man disfigured and blinded in one eye by shrapnel from an exploding air bag in May, called it a victory for consumer protection.

But, he said, “today’s expanded recall is already too little, too late for people injured and their families. Hopefully today’s news will push the agenda for recall reform to the forefront and result in legislation that will help NHTSA identify these kinds of defects before regular families with defective cars are needlessly harmed in the future.”

Automakers say they will continue to work with NHTSA and share test results. Honda said many of the recalls announced Monday already were included in previous safety campaigns and the automaker is “reviewing the information released (Monday) to determine what new actions may be required.”

Honda owners can check their recall status at www.recalls.honda.com or call 800-999-1009. Acura owners should go to www.recalls.acura.com or call 800-382-2238 and press option 4.

“A recall of this scope illustrates the potential for massive automaker expense and consumer inconvenience when a common, mass-produced part is defective,” said Karl Brauer, analyst with Kelley Blue Book.

“While this is the largest consumer recall in history it’s likely we’ll see future vehicle recalls of similar, if not larger, size as the automotive industry becomes more globalized.” Brauer said.

Takata boosted production to 450,000 replacement kits per month in March, up from 350,000. Other suppliers are also ramping up capacity to meet the demand the recall has created as the industry works to address the problem collectively.

Autoliv, another global supplier of airbags, said Tuesday it could make more airbag inflators than it has already promised to the industry.

In January, Autoliv committed to providing several automakers with as many as 25 million airbag inflators and could begin delivering them later this year.

“Our focus has really been to help the industry and the customers in this situation and clearly if we would be asked to supply more we would work to do that as rapidly as we could,” said Thomas Jonsson, spokesman for Autoliv.

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Manheim Reschedules Make-A-Wish Car Show

CLARKSVILLE, Ind. — Manheim Louisville has rescheduled its Cruisin’ for Wishes car show and fundraiser for June 13, after the event was rained out on May 16.

The Criusin’ for Wishes car show will be held from 10 a.m. to 3 p.m. at Manheim Louisville. Registration for the car show begins at 9 a.m. and the event is free and open to the public. Proceeds from the show will benefit the Ohio, Kentucky and Indiana chapter of the Make-A-Wish foundation.

More than 100 vehicles are expected for the show with prizes going to the Best in Show winner as well as second and third places. There will also be awards for individual brands including Buick, Dodge, Ford, General Motors, Oldsmobile, Plymouth and Pontiac.  Trophies will be given out at 3 p.m.

The fee to showcase a classic car is $20. To reserve a spot in the show, contact Manheim Louisville’s David Saylor at 812-258-4318.

“Please join us and show off your beautiful car, truck or motorcycle and help children at the same time,” said David Kaflik, general manager of Manheim Louisville. “This fundraiser can really make the difference in the lives of many children and their families.”

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FCA Stock Closes Ahead of Ford’s for 2nd Time in a Week

Shares of Fiat Chrysler Automobiles NV closed up 13 cents to $15.60 a share on Tuesday, a dime higher than Ford Motor Co. — the second time this week that shares of the Auburn Hills automaker have topped its Dearborn rival, reports The Detroit News.

Ford stock was down 8 cents Tuesday, dropping 2.6 percent during the past year, while FCA’s stock has gained nearly 75 percent since its Oct. 13 debut on the New York Stock Exchange. This week marks the first time since the listing that FCA’s stock has surpassed Ford’s.

Analysts say the stock price jump doesn’t mean much, since Ford’s market capitalization remains far ahead of FCA’s.

Ford’s relatively low stock price raised at least one question at Ford’s annual shareholders meeting last week in Delaware, but analysts remain optimistic about Ford’s fortunes through the rest of the year.

“They’ve had some medium-term pain because of some launch costs for some products,” said David Whiston, a senior equity analyst with Morningstar Inc. “But I think going forward, including this year, Ford has a lot of potential for some nice upside.”

That potential hinges on Ford’s most profitable vehicle, the new F-150 pickup. The automaker will reach full production at its two F-150 plants by the end of this quarter. Whiston said that, coupled with new models of the Edge and Lincoln MKX will help boost profit margins and stock price.

“I think things will start to change during the end of the summer,” said Barclays analyst Brian Johnson.

During Ford’s shareholders meeting, Roger Heymann, a shareholder from Rockville, Maryland, voiced concern over the company’s stock price. Executive Chairman Bill Ford responded by saying he checks the stock price daily, if not hourly.

“We’re on track for a very good year,” Ford said. “I believe the stock price will take care of itself.”

Efraim Levy, equity analyst at S&P Capital IQ, said in a recent note to investors that FCA’s stock should perform well, as profit and margins expand in 2015.

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Ford Recalls 12,500 F-150s for Potential Steering Issue

DETROIT, MI – Ford Motor Co. said Tuesday it is recalling 12,300 F-150 pickup trucks from the 2015 model year for a potential steering issue, reported MLive.

The Dearborn automaker said the safety recall involves “an upper I-shaft that might have been riveted improperly, potentially causing it to separate.” If that happens, it could result in a sudden loss of steering.

The company said it is unaware of any accidents or injuries related to the issue, but knows of at least one report of a loss of steering believed to be related to it.

Specifically, the recall covers 12,328 potentially affected F-150 trucks, including 8,963 in the U.S., 3,343 in Canada and 17 in Mexico. However, of that total, 6,722 have not been sold, so only 5,606 of the affected F-150s are in customers’ hands, Ford said.

The affected trucks were built at Ford’s Kansas City Assembly Plant from March 19-21, 2015, and at Dearborn Truck Plant from March 21-30, 2015.

Dealers will inspect and, if necessary, replace affected I-shafts free of charge.

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