Speaking to CNN, former Shell Oil President John Hofmeister warns that, although American oil consumption may have already peaked, high prices at the pump could come back with a vengeance over the short and medium term.
The issues that gave rise to high priced gasoline in 2007 and 2008 are repeating themselves, except the world demands even more oil in the next several years than before. Asian growth is continuing, e.g. 17 million new cars per year just in China, and will demand more oil. U.S. economic recovery has brought demand back to where it was before. Economic growth means even more demand. But the U.S. Government is prohibiting expansion of U.S. domestic crude oil production which puts upward pressure on global crude oil prices… If we stay on our present course there is no question but that prices will rise to the $5.00 gallon level by 2012 in my opinion.
With profits returning to the auto industry in large part thanks to rebounding sales of large cars and SUV/Crossovers, this is the kind of warning that should ring out in the headquarters of the major manufacturers. Gas prices have been on a subtle upward trend since bottoming out at just over $1.60 in December of 2008, and the national average seems to be creeping up to the level it was at before it skyrocketed to over $4/gal in the Summer of 2008. Which makes you wonder: will the automakers be better prepared to deal with a spike in gas prices this time around?
So who will be the world’s largest automaker this year? Like it or not, this is decided by numbers of units produced, size doesn’t matter. Some time in summer 2011, OICA will publish the official worldwide manufacturer ranking. Let’s try to figure out the top three. Number 3 is easy: (Read More…)
Edmunds expects December car sales to be the highest of any month of this year. They figure that approximately 1,127,000 units will have changed hands when the month ends. This represents a 10.2 percent increase from December 2009 and a 30.4 percent increase from November 2010. Why? (Read More…)
Automotive News [sub] reports that Mitsubishi Motors North America has reached a deal with the workers of UAW Local 2488 to keep its assembly plant in Normal, Il open for the foreseeable future, building vehicles based on a new platform. Mitsubishi previously missed a deadline to assign new products to the Normal plant, forcing the firm to increase base wages there. With wages increasing and no new products in the offing, many have speculated that Mitsu would exit the US market, a move its CEO has strongly rejected. In fact, it now appears that Mitsubishi will cut back or abandon its European production rather than exit the US. But the new deal with its US labor force hasn’t shed any new light on how Mitsubishi will achieve its goal to quadruple sales… and until the firm announces new products for US production, this mystery will only deepen.
Data coming in from their 8,900 reporting dealers throughout the United States prompt J.D. Power to predict a strong new car December. “It appears that 2010 will end on a high note,” said Jeff Schuster, executive director of global forecasting at J.D. Power and Associates. (Read More…)
What the government giveth, the government taketh away: After the Japanese government discontinued subsidies for “fuel-efficient cars” (well, just about anything that was street legal, including a handful of American gas-guzzlers that received preferential treatment) Japan’s domestic auto sales are forecasted to drop 9.9 percent in 2011 from this year, Japan Automobile Manufacturers Association JAMA tells The Nikkei [sub] today. All in all, no big drama. (Read More…)
Tata is doing everything possible to revive the shriveled sales of the Nano. Sales of the ultra-lowpriced Nano recently crashed to ultralow levels: In November, only 509 units changed hands, reluctantly. The success of the much hyped diminutive conveyance more and more looks like a flash in the pan, literally. The Nano became infamous for going up on flames. Then, Tata had to raise the ultralow price a few times. On top of that, Nano buyers were seen as bad credit risks by Indian banks and were hit with ultrahigh interest rates. Stir, simmer, and you have a recipe for disaster. Now, Tata has decided to fight back. However, the counter-offensive appears less inspired compared to the enthusiasm when the car was launched. (Read More…)
Ever since four-door coupes became a dime a dozen, the European auto industry has been looking for a new niche, and for much of the past year or so, it seemed that the next big thing would be “small premium.” Inspired by the MINI, European automakers from Alfa to Audi have been trying to get consumers to spend big money on tiny, plush cars. But with Audi’s A1 starting at €15,800 ($20,873), it seems that even the efficiency-happy Germans aren’t willing to pay the price of entry for this new niche. Audi built capacity for 100k A1s at its Brussels plant, but since introducing the car in August, Audi has sold only 20k of the pricey subcompacts. And yes, the slow sales do seem to be tied to the exorbitant pricetags.
Today, Bloomberg delights its readers with the news that “General Motors Co.’s passenger-car venture in China sold its millionth unit this year, becoming the first carmaker to reach that sales level in the world’s largest auto market.” Spinmeistery at maximum revolutions.
We’ve been slacking a bit on our sales analysis over the last few months, but with the end of the year rapidly approaching we’re getting ready to look back at a year of sales, statistics and trends. To catch you up on the evolving US market sales picture, we now present the top six sellers in each of the six most important segments. Midsized and compact sedans, midsized and compact crossovers, pickups and “luxury low” (better known as “3 Series Fighters”) are all represented with today’s wide but shallow snapshot of car sales in 2010. Will the Sonata pass Malibu this year? Having beaten the Toyota Highlander, will Subaru’s Outback take down the Honda Pilot? Will the CR-V hold off the Escape? Best And Brightest, this is your cue to start prepping those year-end sales analysis talking points…
With the effects of the various scrapping incentives across Europe slowly working themselves out of the system, the worst appears to be over in Europe. According to the official numbers of the ACEA, registrations of new cars across the EU27 fell by 7.1 percent to 1,069,268 units in November. However, this November is above the 904,577 units sold in November 2008. From January to November, a total of 12,349,743 new cars were registered, or 5.7 percent less than over the same period of 2009. All in all, Europe seems to have weathered the carpocalypse much better than the New Country. (Read More…)
We have said the race for who will be the #1 luxury brand in the U.S.A. is too close to call and that it will come down to the wire. Now, those weenies of Mercedes throw in the towel and concede defeat. “I’m pretty sure we’ll be No. 3,” Ernst Lieb, president of Mercedes-Benz’s U.S., told Bloomberg. Whatever happened to “we will never surrender?” (Sorry, that was a Brit.) But look at those numbers, and join us in shouting “boohoo” at Lieb. And Mercedes. No fight left in them no more? (Read More…)
The “News. Any way you want it” syndrome is no longer an exclusive of China. You can have it from Ford as well. Looking for Ford success? No problem! Looking for Ford market disasters? We can deliver! Would you like the good news or the bad news? (Read More…)
Chinese car sales were strong this year, increasing by 34.1% in the first 11 months of this year according to the China Association of Automobile Manufacturers and the WSJ. But those numbers have largely been driven by government incentives on cars with 1.6 liter engines or smaller, a segment that accounts for some 70 percent of the passenger car market. But, according to the CAAM
China will likely extend one incentive for small-car purchases–a cash subsidy of CNY3,000 a car for purchases of certain fuel-efficient vehicles with 1.6-liter or smaller engines. The purchase tax for small cars, however, will likely rise to 10% from the special low rate of 7.5% currently
Moreover, some cities (including Beijing) could start regulating the number of car puchases allowed, and this combined with a reduction in subsidy levels could cause sales to start declining.
When GM introduced the Chevrolet Cruze to the market some three months ago, it wasn’t just launching a car, it was trying to change one of its most persistent perception problems. GM managers know that their firm has never built a memorably successful compact car, a fact that was underlined by President Obama’s bailout-era question “why can’t they build a Corolla?” The Cruze was supposed to change all that, but a short three months after its launch, even the hometown cheerleaders at the Detroit Free Press are beginning to wonder if GM is “running out of time to kick Cruze sales into high gear.” After all, the Cruze was just fifth on the C-Segment sales chart last month, losing out to such aging offerings as the Civic, Corolla, Focus and Elantra, all of which are due to be replaced within the next 3 to 12 months. And since the Crue took its time getting to the US market, one analyst concludes
As a result of having been in production two years, it will age more quickly. The relevance in the market is one of the things consumers are willing to pay premium for
This seems to reinforce the conclusion drawn by the WSJ’s Dan Neil who wrote of the Cruze
But I’m sorry to say Chevrolet’s compact car of tomorrow feels more like its car of this afternoon, about 3:48 p.m. This is a car of quickly expiring market advantages.
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