N.M. DEALER CHARLEY SMITH ELECTED 2004 NADA CHAIRMAN
October 22, 2003—NADA yesterday elected Charley R. Smith as its 2004 chairman. Smith is chairman of the board of Watson Truck & Supply, Inc., Hobbs, N.M. Jack A. Kain, owner of Jack Kain Ford, in Versailles, Ky., was elected vice-chairman. The election was held at NADA’s board of directors meeting in Scottsdale, Ariz. Smith and Kain will assume office at NADA’s convention and exposition in Las Vegas in February. Smith, a new-car and truck dealer since 1985, is the association’s 2003 vice-chairman. In recent years, he has served as chairman of NADA’s government relations and strategic planning committees and vice-chairman of the association's Region IV. Smith has been a member of NADA’s information technology, dealership operations, finance, convention, and industry relations committees. In addition, he has served on the NADA Insurance Trust Board and in the National Automobile Dealers Charitable Foundation. Kain, a new-car dealer since 1952, also owns Kain Family Ford/Lincoln-Mercury, London, Ky. He is NADA’s treasurer, chairman of the finance committee, finance chairman of the Dealers Election Action Committee, and executive committee liaison and past chairman of the convention committee. He also serves on NADA’s Guide Company Committee.
(NADA Newswire)
http://www.nada.org

DETROIT’S BIG THREE IMPROVE OUTLOOK

October 22, 2003—The Big Three U.S. automakers continued to use cost-cutting and their strong financing business in the third quarter to shore up weak earnings in automotive operations. But all three, including General Motors Corp., Ford Motor Co., and Chrysler Group, a unit of DaimlerChrysler AG, said they are optimistic that auto sales and profits are gaining momentum, and some analysts have jumped on the bandwagon. The three automakers have used incentives, like zero-percent financing and cash back, to lure buyers in the face of losing market share to Japanese and European rivals. "Most analysts have been raising their estimates for the fourth quarter for GM and Ford, as I have," said David Healy, an analyst with Burnham Securities. "The Big Three did better with their automotive operations than I expected, largely due to cost-cutting and a richer mix of trucks to cars." Early Tuesday, DaimlerChrysler reported a net loss of $1.9 billion in the third quarter, below analysts’ expectations, mainly due to writing off an aerospace business. In the quarter, the Chrysler unit rebounded to post a small profit of $117 million, after shocking the market by losing more than $1.1 billion in the second quarter.
(Dow Jones Newswire)
http://www.wsj.com

HONDA PLANS TO BEEF UP SAFETY

October 22, 2003—Honda says it will make an array of safety hardware standard in all U.S. models and will phase in changes aimed at reducing crash damage. That will make Honda the first automaker to put all its safety equipment in all its models, even the least expensive. "Honda is doing what the rest of the industry is about to do," says Brian O’Neill, president of the Insurance Institute for Highway Safety. "In some sense, it’s a little easier for Honda because they only have a few car lines." The package of safety goods would include stability control, side-curtain air bags, and antilock brakes, premium hardware that most manufacturers don’t offer on low-price vehicles and usually charge hundreds for on others. Honda plans to make those items and possibly others standard even on its $14,000 Civic, its cheapest U.S. model.
(USA Today)
http://www.usatoday.com/money/autos/2003-10-21-honda_x.htm

THE ELECTRIC-CAR SLIDE

October 22, 2003—The auto industry’s electric-car movement—which gained momentum in the 1990s thanks to a push by California regulators—is now all but dead. GM and other major automakers are abandoning their efforts to produce a battery-powered car for the mass market. Instead, they are focusing on hybrid vehicles that boost the mileage of a gasoline engine with the use of some electric power. Ultimately, the industry hopes—perhaps decades from now—to offer vehicles powered by hydrogen fuel cells, a fledgling auto technology that delivers power by converting hydrogen to water. The death knell for pure electric cars sounded this summer when California’s regulators, responding to industry arguments that battery power wasn’t economically feasible, backed away from stringent antipollution rules that had accelerated the vehicles’ development. Toyota Motor Corp., Honda Motor Co., Nissan Motor Co., Ford Motor Co., and DaimlerChrysler AG all have canceled electric-car programs this year. GM is now taking back EV1s as their leases run out. Battery-power enthusiasts staged a mock funeral for their cars in July in a Hollywood cemetery, complete with a hearse and bagpipes. Automakers say that electric vehicles cost too much to manufacture and that batteries will never provide as much driving range as a full tank of gas. But scientists who have spent careers working on batteries say the auto industry is retreating just as progress in battery technology is finally pushing toward a breakthrough.
(Washington Post)
http://www.washingtonpost.com/wp-dyn/articles/A61508-2003Oct21.html

THE N.A.D.A. OFFICIAL USED CAR GUIDE CO. AND AUTOMOTIVE LEASE GUIDE FORM STRATEGIC PARTNERSHIP

The two will develop Web referral program and map data.

BIG 3 BULLISH ON SELLING USED CARS TO RAISE PROFITS

October 20, 2003—DaimlerChrysler, General Motors Corp. and Ford Motor Co. are trying to collect more for repossessed and returned-from-lease autos because U.S. automakers' profit margins are shrinking because of no-interest loans and other discounts. Ford and GM increased loan loss reserves for this year by $1 billion because of lower car-resale revenue. Selling cars returned by rental companies for less than automakers expected contributed to a $1.1 billion second-quarter loss for DaimlerChrysler's U.S. unit. U.S. automakers have themselves to blame: the companies are lowering resale values by discounting new cars to try to boost sales. GM, Ford and Chrysler discounts rose 34 percent to $4,258 per vehicle on average in the first nine months of this year from $3,166 in 2001, CNW Marketing Research said. At the same time, Toyota Motor Co., Honda Motor Co. and Nissan Motor Co. incentives climbed 11 percent to $1,833 from $1,648. GM, Ford, and Chrysler are going to greater lengths than their Asian rivals to curtail used-car losses because U.S. car models retain less value over time. U.S. automakers' models fetch about 39 percent of their original price after one year, less than the 50 percent for a Honda and 47 percent for non-U.S. vehicles, according to Automotive Lease Guide, which estimates values of used cars returned after leases. "More Honda and Toyota dealers are willing to keep vehicles that are coming back off lease to sell themselves," said CNW President Art Spinella. Like DaimlerChrysler, GM and Ford are moving autos around the United States and offering enticements for used cars, such as extended warranties. (Bloomberg News)
http://www.detnews.com/2003/autosinsider/0310/20/c07-301161.htm

TOYOTA PLANS NEW APPROACH TO STYLING OF CARS AND TRUCKS

October 20, 2003—In an effort to shake the company's reputation for mundane styling, top Japanese car maker Toyota Motor Corp. will outline later this week a new approach to designing cars, company officials said. Toyota is planning to group its huge model lineup into families of vehicles centered around a core group of mainstream models like the Camry and Corolla sedans. The groups will use shared styling cues, such as similar grilles, to give them a common look. Previously, Toyota designed its vast array of vehicles without giving much thought to whether they were easily recognizable as Toyotas. Toyota will be implementing its new approach as it introduces new cars over the next several years, company officials said. Other vehicle groups might include sport-utility vehicles, such as the Land Cruiser and small, niche models such as the boxy bB, which is sold as the Scion xB in the U.S. "We have so many new cars that our design identity has become gray," says Hideichi Misono, Senior General Manager of Toyota's Design Center. "We want to make it clearer." (Wall Street Journal)
http://www.wsj.com

GM'S CEO PRAISES PARTNERSHIPS WITH JAPANESE AUTOMAKERS