Polk Predicts 15.3 Million New Car Sales

New light vehicle registrations in the U.S. in 2013 are expected to rise 6.6 percent over 2012 levels to 15.3 million vehicles, according to Polk.

At the same time, Polk analysts forecast North American production volumes to increase to the 15.9 million unit range (an anticipated 2.4 percent increase from 2012), driven by an improving economy and capacity expansion in the region.

According to Polk's analysis, new vehicle introductions in 2013 will escalate dramatically, with 43 new vehicle introductions in the U.S. planned for the year, up nearly 50 percent over 2012 levels. In addition, 60 vehicle redesigns are expected in the coming year. New launch and refreshed product activity is likely to result in an uptick in registrations as showroom traffic and, in turn, sales tend to increase in the timeframe surrounding new introductions.

The large pick-up truck segment, which has declined over the past five years, will likely grow with several important new launches in 2013 and into the 2014 model year, with GM, Toyota and Ford planning to showcase redesigned vehicles in this segment during the next 18 to 24 months. Increased marketing activity to support these launches, together with a recovering market for new housing starts, which impacts registrations of new pickup trucks within the construction industry, will result in growth in this segment in the coming year, according to Polk.

The mid-size sedan segment will continue to lead the industry. Currently at more than 18.5 percent of the overall market, the industry's largest by two percent, Polk anticipates it will continue to grow in the coming year.

The luxury segment in the U.S. also will be one to watch in 2013, according to Polk, as it will see significant launch activity within its compact sedan segment, which currently accounts for 2.9 percent of the overall industry. In addition, if gas prices continue to decline, Polk analysts expect the small luxury crossover segment will continue to swell.

In addition, non-luxury compact crossover vehicles have grown by more than 50 percent in the last five years. Additionally, increased competition in this segment has created pricing pressures, which will result in continued growth, according to Polk analysts.

Polk also forecasts the industry will experience continued growth in the compact and subcompact segments, as OEMs are introducing several new models in the coming year.

While the number of available hybrid models in the U.S. will increase this year, Polk anticipates only a slight improvement in this category from its current level of approximately 2.9 percent of the overall market. Reasons for this include the continued significant price differential between hybrids and traditionally-powered vehicles, and the high number of traditionally-powered vehicles that achieve similar mileage targets as those in the hybrid segment.

Polk analysts are currently reviewing global light vehicle forecasts with customers through 2023. Polk expects a return to 16 million units in the U.S. by 2015, if not before, barring any unusual activity in the marketplace. The U.S. market last achieved 16 million units in 2007.

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Suzuki Recalls SUVs for Fuel Leaks

American Suzuki is recalling 2,830 model year 2007 XL-7 vehicles originally sold or currently registered in Arizona, California, Nevada, and Texas; and manufactured June 13, 2006, through Dec. 22, 2006.

Some of these vehicles have a condition in which the plastic supply or return port on the fuel pump module may crack, which could cause a fuel leak.

Fuel leakage in the presence of an ignition source may result in a fire.

American Suzuki will notify owners, and dealers will replace the fuel pump module, free of charge. The manufacturer has not yet provided a notification schedule.

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Transaction Prices Up More Than 1 Percent

Transaction prices rose last month despite higher incentives.

TrueCar, Inc. estimated that the average transaction price for light vehicles in the United States was $31,228 in December, up $542 (1.8 percent) from December 2011 and up $396 (1.3 percent) from November.

In addition, TrueCar estimated that the average incentive for light vehicles was $2,409 in December, down $238 (9 percent) from December 2011 and up $99 (4.3 percent) from November.

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Used Car Prices Set to Fall

A surge in off-lease vehicles will drive down used-car prices in 2013.

Edmunds.com projects that there will be as many as 500,000 more car buyers coming off leases in 2013 than in 2012. That's 500,000 more potential new car customers to buttress the remaining pent-up demand.

Those lease terminations should have a ripple effect on the auto industry -especially on used cars. Off-lease vehicles and more trade-ins will flood the used car market and help to bring down prices. Edmunds.com expects the average used car price to fall $200-$300 per vehicle in 2013, which will continue the price drop we saw this year after used car prices peaked in 2011.

New-car sales will grow in 2013, but that growth will slow to a single-digit pace, says Edmunds.com, the premier resource for car shopping and automotive information. Edmunds.com projects 15 million new car sales in 2013, a four percent increase over 2012. And while next year's sales won't have as much momentum as recent post-recession years, there is still plenty of optimism in the auto industry.

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Consumer Reports Exec Joins Nissan

Nissan announced the hiring of former Consumer Reports auto test center senior director, David Champion, for the newly created position of executive adviser, competitive assessment and quality.

Champion will report to Steve Monk, director, vehicle evaluation and testing and chief marketability engineer for Nissan Technical Center North America, and he will be based at its Arizona testing center. His work also will align closely with customer satisfaction efforts overseen by Carla Bailo, senior vice president, research and development.

Champion's hiring marks his return to Nissan, where he served as a quality assurance engineer from 1994 to 1997, working to identify and correct customer dissatisfiers.

Prior to his roles at Consumer Reports and Nissan, Champion was a principal engineer at Land Rover of North America, where he established remote test facilities throughout the United States and Canada. Champion earned dual bachelor's degrees at University of Aston, Birmingham, England, in mechanical engineering and metal and material science.
Champion joins Nissan on Sept. 10.

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Vehicles on Road Grow Older

Experian Automotive announced that there were 17.3 million more light-duty vehicles seven years and older on the road in the United States than there were three years ago.

According to its Q1 2012 Vehicles in Operation (VIO) market analysis, Experian Automotive also found that there were more than 245 million vehicles on U.S. roads, and that the age of vehicles increased when compared to the first quarter of 2011, up 1.9 percent to an average age of 11 years.

Additional data from the report showed Ford as the most prevalent make on the road in first quarter, followed by Chevrolet, Toyota and Honda for both Canada and the United States. At the model level, the U.S. analysis showed that the Ford F-150 had the largest volume on the road, followed by the Honda Accord, Toyota Camry and Chevrolet Silverado.

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Hertz Finally Lands Dollar Thrifty

Hertz Global Holdings Inc. and Dollar Thrifty Automotive Group Inc. announced that they have entered into a definitive merger agreement under which Hertz would acquire Dollar Thrifty for $87.50 per share in cash in a transaction valued at a corporate enterprise value of approximately $2.3 billion.

The combination of Hertz and Dollar Thrifty will create a global, multi-brand rental car leader offering customers a full range of rental options through its strong premium and value brands. The boards of directors of both companies have unanimously approved the transaction.

Hertz also announced that it has reached an agreement to sell the Advantage business to Franchise Services of North America ("FSNA") and Macquarie Capital. FSNA is an experienced rental car operator with subsidiaries including, among others, U-Save, Rent-a-Wreck, Practicar and X Press Rent-a-Car. The closing of that divestiture is conditioned upon, among other things, Hertz completing an acquisition of Dollar Thrifty.

The transaction has been structured as a two-step acquisition including a cash tender offer for all outstanding shares of Dollar Thrifty common stock followed by a cash merger in which Hertz would acquire any remaining outstanding shares of Dollar Thrifty common stock. The transaction is subject to the tender of at least a majority of the shares of Dollar Thrifty common stock, as well as other customary closing conditions. The successful completion of the transaction is also subject to regulatory clearance by the Federal Trade Commission.

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Used Luxury Becomes More Expensive

A sharp decline in the supply of luxury brand used cars and light trucks will result in higher prices this year, according to the National Automobile Dealers Association Used Car Guide.

NADA predicts the supply of luxury used-vehicles up to five years old will decline by 13 percent in 2012 compared to a year ago, resulting in an average price increase of 1.9 percent this year. Prices in the overall used-vehicle market are expected to increase 2.9 percent in 2012.

Prices for luxury brand used vehicles increased 9 percent in 2011.

NADA's price forecast for the following luxury brands in 2012, include: Acura (up 4.8 percent), Audi (up 3.3 percent), BMW (down 0.2 percent), Cadillac (up 0.5 percent), Infiniti (up 1.5 percent), Lexus (up 1.6 percent), Lincoln (up 2.6 percent), Mercedes-Benz (up 0.7 percent) and Volvo (down 3.1 percent).

The decline in used-vehicle supply was caused by the 2007-09 economic recession when fewer new vehicles were purchased or leased, resulting in a drastic drop in trade-ins and off-lease vehicles returning to the market. In 2011, mainstream (non-luxury brands) and luxury brand sales grew by 11 percent and 4 percent, respectively, compared to 2010.

In the luxury sector alone from 2009 to 2011, prices for used-vehicles up to five years old grew by about 22 percent, with appreciation across brands ranging from a low of 14.7 percent for Volvo to a high of 29 percent for Mercedes-Benz, according to the NADA Used Car Guide. Prices for luxury used vehicles are still at historic high levels.

NADA anticipates another year and a half of losses before the supply of luxury used-vehicles swings back up again. Although the upturn in overall supply is still some ways off, shorter-term off-lease supply is set to improve much sooner. In fact, NADA estimates that 36-month off-lease supply is already on the rise, and that supply for these units will be 9 percent higher in the second half of the year than it was in the first.

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Firm Recalls Electric Cars

Fisker Automotive is recalling certain model year 2012 Fisker Karma passenger cars manufactured from June 15, 2011, through July 9, 2012. A manufacturing defect in the low temperature cooling fan may result in a direct short.

A direct short may ignite the fan housing, shroud and surrounding components, causing a vehicle fire.

Fisker will notify owners, and dealers will remove the two potentially affected low temperature cooling fans and replace them with one improved low temperature cooling fan, free charge. The safety recall was expected to begin on Aug. 27.

Fisker's recall campaign number is 520120016.

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RouteOne Enhances App

RouteOne Enhances AppRouteOne announced the availability of additional enhancements to its free iPhone app.

The app includes the ability to forward 'send' applications to new finance sources, securely text message with supporting finance sources, get payoff quotes, and capture leads into the Lead Manager within RouteOne. This enhanced functionality is also available on the RouteOne app for Android. RouteOne has also optimized its app for iPad and for RetinaTM displays, making browsing long lists and filling out forms even easier. Users can update their app today or install it by searching for RouteOne in the App Store.

The additions enhance the base functionality of the app; allowing users to view and manage RouteOne deals and leads and request and view credit scores instantly, whether in the F&I office or outside the dealership. In addition to its iPhone app, RouteOne offers an industry-leading suite of mobile tools, including apps available for use on the Android, BlackBerry, iPad, iPod, and Windows 7 Phone.

RouteOne.net is also compatible with the mobile browsers for Android devices, iPhone, iPad, iPod touch, and Internet Explorer on the Windows Phone.

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Experts Expect Higher Sales

New-car sales slowed in July, but were still better than last year.

J.D. Power and Associates and LMC Automotive project August new-vehicle retail sales of 1,066,200 units, which represent a seasonally adjusted annualized rate (SAAR) of 12.3 million units.

Incentives are down slightly in August, compared with July ($106 less per vehicle, on average).Total light-vehicle sales, including fleet, are expected to come in at 1,285,300 units, a 16 percent increase from August 2011. Fleet represents only 17 percent of total light-vehicle sales, which is lower than the 21 percent year-to-date average.

LMC Automotive recently revised the outlook for total light-vehicle sales in the United States downward to 14.3 million units from 14.5 million units, with retail sales at 11.4 million units, down from 11.5 million units.

Kelley Blue Book predicts August new-car sales will hit 1,273,000 units overall.

However, the daily selling rate is expected to decline nearly 1,000 units per day compared to July 2011.

From a segment perspective, Kelley Blue Book expects a jump in sales of compact, subcompact and hybrid cars as consumers seek respite from rising fuel prices. Gas prices have increased by $0.30 per gallon since early July, and as a result, Kelley Blue Book has seen an increased interest in fuel-sipping small cars both in terms of KBB.com shopper activity and retail sales volume. Mid-size car sales also remain strong at 16.8 percent market share. The Toyota Camry will continue to lead segment sales; however, the 2013 Nissan Altima could sway consumers with its segment-leading 38-mpg highway.

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Dealership Finance Firm Expands

BMO Harris announced that its dealership finance team is expanding into Virginia with the hiring of Jeff Carmines as director, commercial dealership finance, BMO Harris Bank.

Carmines will focus primarily on business development in the Greater Washington Area, Maryland and Virginia, although he will also have responsibilities for the surrounding states as well.

The BMO Harris Dealership Finance team already has offices in Chicago, Milwaukee, Minneapolis, Tampa, Indianapolis, Kansas City, St. Louis, Joliet and Crown Point, and has plans to continue to expand into new markets. BMO Harris' parent company, BMO Financial Group, has been actively serving the financial needs of auto dealers for the last 35 years.

Carmines has a banking career that spans 28 years with 24 of those years managing automobile dealer relationships. Most recently he spent 12 years at SunTrust Bank, where he was responsible for the growth and management of a large portfolio of auto dealerships in the Greater Washington area of Maryland and Virginia. Previously, he managed a national auto dealer portfolio for JM Family Enterprises.

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Tire Group Supports Right to Repair

The Tire Industry Association applauded the passage of the Right to Repair law in Massachusetts.

The group strongly urges Congress to pass a comparable federal law.

The Motor Vehicle Owners' Right to Repair Act requires that car companies provide full, fair access at a reasonable cost to all non-proprietary service information, tools, fault codes and safety-related bulletins needed to repair motor vehicles. The Right to Repair Act was introduced into the 112th Congress by Reps. Edolphus Towns (D-NY) and Todd Russell Platts (R-PA), and has reached 51 co-sponsors.

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BMW Parts Get Recalled

Valeo is recalling certain engine cooling fans, part numbers 696121, 696273, and 696275, used as service replacement parts for model year 2008-2011 BMW 1-Series, 2006-2011 BMW 3-Series, 2000-2009 BMW 5-Series, 2004-2005 BMW 6-Series, and 2006-2007 BMW 7-Series vehicles.

A metal-oxide semiconductor may overheat due to insufficient screwing of the semiconductor on the aluminum heat sink. This primary failure could cause adjacent components on the fan assembly motor circuit board to overheat and short.

This condition could cause the fan motor to become inoperative, or cause the motor circuit board in the assembly to overheat, potentially leading to a fire in the engine compartment.

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Honda Recalls CR-Vs

Honda is recalling 1,316 model year 2006 CR-V vehicles.

The weld strength attaching the sub-frame bushing collar to the passenger-side front lower arm is insufficient. The collar can separate from the arm due to vibration while driving.

As a result, a loss of steering can occur, increasing the risk of crash.

Honda will notify owners, and dealers will inspect the production lot stamp on the passenger-side front lower arm and, if necessary, replace the lower arm, free of charge. The safety recall is expected to begin on or about April 17.

Honda's recall campaign number is S33.

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Trade-In Marketplace Marks Milestone

AutoTrader.com's Trade-In Marketplace (TIM) reached a notable milestone in February, generating the three millionth Instant Trade-In Offer since January 2010. In the last year alone, the volume of offers has increased 62 percent.

Trade-In Marketplace aims to take the mystery out of the trade-in process by giving consumers an instant offer for their vehicle, sight unseen, that is redeemable at participating auto dealerships across the country. In addition to the three millionth offer being generated, TIM also experienced a single-day record of 9,000 offers generated on Feb. 20.

Initially launched in a few select markets in June 2009, the TIM tool became available nationwide in October 2010. In October 2011, AutoTrader.com partnered with one of its subsidiaries, Kelley Blue Book, to bring the TIM tool to its website, kbb.com. To date, more than 300,000 offers have been generated from kbb.com consumers.

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BBB Vets Cars.com

Cars.com has become a formally accredited Better Business Bureau (BBB) company, and has received the BBBs A+ rating the BBBs highest consumer protection rating.

The non-profit BBB cited Cars.coms length of time in business, low volume of complaints (as compared to company size), effectiveness in responding to consumer complaints, and resolution of complaints as contributing factors to the A+ rating.

More than 11 million car shoppers use Cars.com every month for its wide selection of new and used vehicles, expert vehicle reviews, consumer dealer and vehicle reviews, vehicle side-by-side comparisons, photo galleries, videos and pricing tools.

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Procon Is Now Spireon

ProconGPS Inc. announced its new corporate name, Spireon, Inc.

The new corporate name and identity was officially launched at a special ribbon-cutting event held at the companys new Technology Center in Irvine, Calif., on March 24.

The Spireon name binds the strategic merger of ProconGPS, Inc. with Enfotrace and PFS, LLC.

The unusual name is derived from the words spire and inspire.

As part of its new corporate identity and branding efforts, Spireon, Inc., announced a new corporate sponsorship with Joe Gibbs and Joe Gibbs Racing.

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Dealer Pleads to Bank Fraud

The owner of several used-car dealerships in the Kansas City, Mo., metropolitan area pleaded guilty in federal court for his role in a bank fraud conspiracy that resulted in losses of millions of dollars by several financial institutions.

John A. Hart III, 51, of Kansas City, pleaded guilty before U.S. District Judge Ortrie D. Smith to the charge contained in information that was filed in lieu of the Sept. 21, 2011, federal indictment.

Between May 2000 and February 2009, Hart operated several used car dealerships at various locations, including Better Than New Automobiles, LLC, On Time Auto and Hart Family Motors.

Hart and others obtained loans and lines of credit from various financial institutions in connection with vehicles involved in his auto sales business. Hart admitted that he provided false and fraudulent financial information to obtain loans and lines of credit. Hart also admitted that he obtained multiple loans in which the same vehicle was pledged as collateral, and failed to disclose to the financial institutions that vehicles pledged as collateral for loans were already encumbered at another financial institution or in another loan.

Hart also admitted that he and his wife borrowed more than $1 million from First Missouri National Bank between Nov. 15, 2006 and March 26, 2008. They provided copies of their 2004 and 2005 income tax returns to the bank. However, according to the plea agreement, they did not actually file their 2004 and 2005 returns until 2009.

The filed returns were materially different than the tax returns submitted to the bank in support of their loan application. According to the plea agreement, the filed returns claimed a much lower adjusted gross income.

The government believes the loss attributed to Hart is between $2.5 million and $7 million. Under the terms of the plea agreement, Hart reserves his right to argue what the appropriate loss calculation should be at the sentencing hearing.

Under federal statutes, Hart is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution.

A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the U. S. Probation Office.

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KBB Marks Milestone

Kelley Blue Book reports a one million-download milestone for its kbb.com Android mobile application. Launched in November 2010, the free, interactive app provides users with crucial car-buying information to help make confident purchase decisions.

The kbb.com Android app provides shoppers with access to new and used Kelley Blue Book Values, including MSRP, invoice, fair purchase price, certified pre-wned, suggested retail, private party and trade-in values. Car buyers and sellers can use this information in vehicle transaction negotiations to ensure they get the best deal possible, wherever they may be.

The application also offers several features for car shoppers, such as a dealer locator with detailed maps and directions, 360-degree vehicle photos, new-car video reviews from kbb.coms expert editors, and the kbb.com Twitter feed for the latest automotive news and information from Kelley Blue Books team of car aficionados.

The kbb.com Android app features a widget that can be positioned on the phones home screen to track a vehicles value. Whether users want to track their trade-in value prior to buying a car or stay up-to-date on their car values performance in the marketplace, the widget provides the latest information. The widget is automatically updated to show the latest vehicles values, just like Kelley Blue Book Values on kbb.com. The widget can be accessed after downloading the Android app.

In addition to the Android app, Kelley Blue Books kbb.com also offers free apps for iPhone and Windows Phone 7 users. Kbb.coms app for iPhone launched in May 2010, followed by Android and Windows Phone 7 in November 2010.

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