November US Auto Sales: the real data to watch at year-end

November U.S. auto sales are out tomorrow morning.  Get ready for hype of how many red 2-door V-6’s this automaker or that moved on Black Friday.  It’s not relevant.  I really don’t care whether the month tracked at 15.5 or 16.1 million SAAR.  We are closing on on the shift from a rapidly expanding market to a market where costs will automakers will have to control costs and command price.  

Here are three things to look at as the year ends.  More important than overall volume.

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  1. Inventories have crept up.  If December is a blow-out, +16 million, then this may adjust.  If it paces in mid 15’s.  Say 15.5-15.7, then I expect continued inventory build to be a worry.Capture
  2. Sub-prime lending is getting to aggressive.  If macro indicators are improving, Continue reading
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Peugeot breaks tradition with Tavares

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Philippe Varin swept into PSA in 2009 to prepare to prepare the French OEM for the current European economic malaise, and now his tenure is up.  In a move that is surely printing as much ink in the gossip pages in Paris as the economic journals, PSA has signed former Renault COO Carlos Tavares to take over.  This is just not done in Paris where niceties may be superficial, but are strong.  Well it’s been done now.  It may not be GM or Ford as Tavares had suggested in an August Automotive News interview, but leading a revival of near dead PSA presents a tantalizing and potentially highly rewarding challenge to the international auto veteran.

While Tavares may lack some of the product flair of his Nissan predecessor Patrickimages (2) Pelata, he corralled a Nissan organization that was lacking any top-level direction below CEO Carlos Ghosn.  At Nissan, he cemented the importance of U.S, product and sales discipline, and balanced Ghosn’s quest for market share Continue reading

Breaking News: Japanese car brands are alive and well in the U.S.

Newly assembled 2013 Ford Escapes sit on plant lots ready to be shipped out to dealers at the newly transformed Louisville Assembly Plant in LouisvilleSo Japanese brands are back in the U.S. auto market. I wasn’t aware they ever left.

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Japanese brands gained during crisis, but overall have been stable.

Sure, the past two years have given us production upsets from a tsunami, the Tsunami and a hyper strengthening of the yen all while the US auto market has bounced back from historic lows during the financial crisis. Japanese brand market share peaked in 2 Continue reading

LA Auto Show; slimmer, sleeker power and connectivity

 

BMW i3: poster child for carbon fiber

BMW i3: poster child for carbon fiber

Auto show season really kicks off this week with L.A and Tokyo sharing the same week.  I’m out in LA for the week getting ready to see the lineup of luxury cars and Japanese brands unveiling new products and features.

What to look for this week?  Sleeker, slimmer, lighter new cars sporting high

Porsche slims down the SUV

Porsche slims down the SUV

tech accessories, but most importantly new materials.  Aluminum, carbon fiber and new composite materials are the order of the day to optimize the weight to power on cars facing tougher emissions regulations.

 

Accompanying the show is a conference on connected cars.  Over the past three years we’ve seen a boom on suppliers focusing on fuel economy and emission reduction. We’re already seeing strong results from suppliers on consumer connectivity.  I look forward to seeing some in action.

 

#laautoshow

#connectedcars

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Daimler Tesla – dating again?

c0ourtesy car & driver

courtesy car & driver

The on again, off again love affair between Daimler and Tesla seems to warming up again and Elon Musk and Tesla fans couldn’t ask for better timing.   At a press briefing in NY this week, Daimler CFO Bodo Uebber, confirmed he has urged his team to “learn more from Telsa

Early on, Daimler took a 10% equity stake in Tesla (since sold down to 4.3%), providing smart_evthe company not only with much-needed capital but two more important assets; legitimacy and orders for the SmartForTwo and B-Class.  Along with Toyota, Daimler hedged it’s entry into the electric market via Telsa with a smaller order for 2400 Rav4 E.

It strikes me as interesting that this comment comes on the heels of an announcement from Thomas Weber, Daimler’s Head of R&D that the company would deepen its relationship with Continue reading

News from CARB: Tougher ZEV credits? Risk for TSLA?

cardNews today from California and the CARB (California Air Resources Board) cabal on zero emission credits and efforts to spur more zero emission vehicle (ZEV) sales.

1) Expect to hear a lot of traders screaming this is the end of Telsa ride as ZEV credits may be cut from 7 to 4.  This would cut TSLA profit from selling these credits.  This argument hasn’t been realized for the past six months that I’ve heard it.  We might see some dip as people shy away, but the true TSLA believers are banking on GEN3 not ZEV credit profits.

2) If the states really step up efforts to make it hard to just pay the penalty, we will see more ZEV plug-in hybrid (PHEV) and battery electric vehicles (BEV) in production.  Players like BMW with the new i3 and others like Ford and Toyota will increase production squeezing GM and Nissan who have been Continue reading

PSA, an existential outlook. UG or not UG

psa

Will PSA be here as a company in 5 years.  Sure it will, as a brand, company and equity.  But in what way shape or form seems to shift each day.  Six months ago the market was pretty hedged on that question, a couple of weeks ago they seemed to have a plan.  After Philippe Varin’s comments this week on “alliances” fear is creeping back.  So, is there an existential threat to PSA at least as an invest-able vehicle?

Worries over the partnership with GM dying out are overblown.  The real cost savings PSA-RADD2012-EN_01_img_58have always been closer to 2017-2018.  At the same time, Opel and PSA do have a number of areas where they can cooperate. Mr. Varin made it clear that while the B platform is “under review” the B- and C-MPV projects are Continue reading