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| Used-car sales rebound, but carmakers don't To hear auto industry executives tell it, a bump in used-car sales is a good sign. When General Motors turned its fix-it plan in to the Treasury Department last month, executives said that stability in used-car prices indicates that there is some underlying demand for cars. Both BMW and Audi have crowed that sales of their certified used cars are growing nicely. BMW says it’s on pace to beat last year’s record 104,000 certified used cars. But is it really a good sign? I beg to differ. What this tells me is that people who once had cash for a brand-new Bimmer or Audi are strapped. Banks are getting tougher with lease terms so the only way brand-conscious buyers can get an affordable payment is through the used lot. On the company’s earnings call, Audi of America Executive Vice President Johan de Nysschen said that the percentage of sales that go through lease has fallen from as high as 58% to 43%. Since leasing was one of the air pumps that inflated the auto bubble of the past decade, a drop in lasing indicates that demand for new cars won’t be returning to those rosy 16 million or 17 million markets anytime soon. For sellers of mass-market cars, it's also worrisome. Some of the pent-up demand they are waiting on is being satisfied on the used lot. Sure it’s good for brands like Audi and BMW to keep their loyal buyers in the family with a used-car. If I’m de Nysschen, I’d rather see someone coming out of a lease buy a used Audi that drive off in, say, a Toyota. But nobody’s plants build used cars. The dealers make a tidy profit but the companies continue to struggle. A rebound in used-car sales does mitigate some of the damage. When people buy used cars, it pushes up the resale value. That makes it easier for car companies to offer cheap lease payments since lessees pay for the value of the car above the residual. Eventually, as used-car prices get closer to new car stickers buyers will look at new cars again. But don’t be fooled. This is no sign that car sales are bouncing back. rss.businessweek.com |
His Nascar Career Over, Dario Franchitti Is Roaring Back at Indy Dario Franchitti, Indy’s 2007 champion, will make his return in the front row after failing to make a successful leap to Nascar. nytimes.com |
Massa awake, condition improved after near-fatal crash A doctor says there has been a significant improvement in the condition of Felipe Massa, who is now awake and has been talking ... rssfeeds.usatoday.com |
Alonso confirms Ferrari deal Spain's two-time Formula One world champion Fernando Alonso has joined Ferrari for three years, commencing in 2010. foxsports.com.au |
Detroit Auto Show: Chrysler goes Euro There’s no doubt about it. Chrysler brand is going Euro. While the struggling carmaker didn’t have a press conference to unveil new models at the Detroit auto show, they did put up one new idea on their show stand. Chrysler--or more appropriately Fiat-Chrysler--took the Delta hatchback from Fiat’s tony European Lancia brand, fashioned a Chrysler brand nose and grille on it and put it out there to get feedback at the show. It’s not necessarily for production, Olivier Francois, the French head of Chrysler brand told me. It’s really an exercise to show where the Chrysler brand is headed. And it looks like Chrysler’s namesake brand will get a heavy dose of European flair. In a round table meeting with the motoring press, Fiat-Chrysler CEO Sergio Marchionne said that in a few years, the product lines for Chrysler and Lancia will be married up. That means the Chrysler brand will soon be selling Lancia’s premium sedans, coupes and hatchbacks. Lancia could get Chrysler vehicles like the 300 sedan or Town and Country minivan to sell in Europe. “On Chrysler-Lancia, these are two brands that will share completely a common destiny,” Marchionne said. “They will share completely their product portfolio.” That’s not the only way the Italians are bringing European culture to Chrysler. Fiat-Chrysler’s auto show stand turned heads and generated buzz at the auto show with leggy, scantily-clad models. The Lancia–Chrysler concept car was accompanied by models wearing gold-toned mini dresses that covered the bare minimum. The tiny Fiat 500 was surrounded by models strutting around in thigh-high leather go-go boots. It wasn’t in poor taste, but it is more risqué than Americans have seen at the Detroit auto show for many years. That kind of thing is a mainstay at venues like the Paris Auto Show. Not so in America’s industrial heartland. Francois told me that he wasn’t trying to sex it up. That’s just what he does in Europe. Says Francois: “I’m doing here what I know from there.” The models turned heads, but giving Chrysler some allure will be a bigger challenge than sparking chatter among coffee-addled automotive writers. Dressing Lancia cars up as a Chrysler models will be a head snap. The brand that sells the gangsterish 300 sedan, retro PT Cruiser and posh Town and Country would then get small luxury cars designed for Europeans. Jeremy Anwyl, CEO of Edmunds.com, says the idea isn’t completely daft for the Chrysler brand because it doesn’t really have much of an image. That gives the Italians a clean canvas. A slate of Lancia models could help it start anew, he said. He has a real point. But the Town and Country, 300 and PT Cruiser all have one thing (and only one thing) in common. They make very American statements. A Lancia with a Chrysler grille does not. On a positive note, I think the car looked pretty good. But the brand will get a makeover that will be a real departure from what most Americans think of Chrysler. The cars will need to have some substance to make it work. rss.businessweek.com |