Auto sales set to recover strongly in the U.S.?

Auto sales are set to jump in the coming years but will high gas prices put a strain on the auto recovery?


FORTUNE — It has been a dismal three-plus years for U.S. auto sales.

After a halcyon stretch early in the 2000s, when annual sales of cars and light trucks topped 16 million for nine straight years — and even poked above 17 million at times — they have been sharply depressed.

Sales tumbled to 13.2 million in 2008 and then fell all the way to 10.4 million in 2009, helping to send General Motors and Chrysler into bankruptcy.

Since then, sales have improved slightly, recovering to 11.6 million last year — but still well below long-term trends.

Now, in a surprisingly upbeat forecast, economist George Magliano of HIS Global Insight sees better times ahead — much better, in fact.

Read the full article.


Ford passing Toyota in U.S.

With all of Toyota’s current problems, projections for 2010 are tilting towards Ford Motor Company retaking the #2 spot in the US for sales with GM currently retaining the #1 spot. This could be a big blow to Toyota as for years they just kept of trucking along towards the #1 position but it looks like the faulty gas acceleration problem is torching their plans and the bleeding hasn’t stopped.

It is truly amazing that one year after Ford was on the brink of disaster, the blue oval is now the darling of the US auto market. Hint to Ford: Learn from Toyota’s mistakes. One more hint: Toyota won’t take this laying down and will come back with a vengeance and big time product to get back on track.


According to a report by auto research website, Ford Motor Co. (F – Analyst Report) has become the second-biggest automaker in the U.S. behind General Motors. With this, Ford has overtaken Toyota Motor Corp. (TM – Analyst Report) in the wake of Toyota’s damaging parade of recalls.

According to the website, Toyota is expected to lose more than 1 percentage point of the U.S. market share to hit 16.45% in 2010 due to its global recall of 8.5 million vehicles related to their problem accelerator gas pedals and braking systems. Meanwhile, Ford is expected to achieve 16.57% of the market in the year following General Motors with 18.12% of the market.

Read the full article here.

Photo from fOTOGLIF


Hyundai gets agressive in the U.S.


Hyundai has begun a major marketing push in the United States with increased sales and the weakening Korean won.

U.S. car sales plunged to a 27-year low in January, dragging down Detroit’s Shrunken Three and even mighty Toyota Motor (TM). But one automaker has bucked the trend: Hyundai Motor. The Korean company, whose name was once synonymous with cheap, logged a 14% sales gain in what was a dismal month for almost every other carmaker.

It’s too soon to say whether that marks the start of a trend that could see Hyundai emerge from the shadow of its larger Japanese rivals, Toyota and Honda Motor (HMC). For one thing, the jump owes much to Hyundai’s 22% drop in sales in January 2008. And the company has piled on the discounts. Incentives on its Sonata sedan, Santa Fe SUV, and other models average $2,611 per vehicle—about triple those of a year ago. Faced with bloated inventory at its single U.S. factory in Montgomery, Ala., Hyundai has scaled back production there and is unloading cars on rental-car agencies: Nearly 30% of the 24,500 vehicles it sold in January went to such fleet buyers at virtually no profit.

Hyundai can afford to sell its cars on the cheap, at least for a while. Its balance sheet is far healthier than those of its Detroit peers. And it’s getting a big lift from the weak won. The Korean currency has dropped by nearly a third against the dollar in the past year, so Hyundai pockets more cash from each car it sells in the U.S. Toyota and Honda, on the other hand, are seeing their earnings wiped out by a yen that is hovering at a 13-year high. Brokerage Korea Investment & Securities figures more than half of Hyundai’s projected $1.5 billion profit in 2009 will come from the favorable exchange rate. “The currency swing has been a godsend for Hyundai,” says Park Kyung Min, chief executive of Seoul fund manager Hangaram Investment Management.

As the other auto companies have reigned in advertising, Hyundai is devoting ore resources to marketing, evn buying ads during the Super Bowl and the Academy Awards.


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