Diana T. Kurylko Automotive News October 6, 2008
PARIS — In the next several years in the United States, Mercedes-Benz will sell a hybrid powertrain vehicle in each of its three major volume lines, Daimler CEO Dieter Zetsche said. The company also will sell an electric version of the Smart ForTwo. The first hybrid, the S400, goes on sale in the United States next fall. It will be powered by a 3.5-liter V-6 gasoline engine and lithium ion batteries. An E-class hybrid will debut when the new generation goes on sale in 2010. A C-class hybrid will be last, most likely coming when the current generation gets a freshening. "We have decided on hybridization on all of our cars in the future and so far we have had a lot of questions and excitement, but I don't know how that will translate into a take rate," Zetsche said at the Paris auto show. Mercedes also will build 1,000 electric Smart ForTwo cars in the coming year for trials in Europe and possibly the United States, he said. In 2012, annual production will rise to between 12,000 and 15,000 electric Smart cars, and some will be offered in the United States, Zetsche said. He said the electric and hybrid programs are part of Mercedes' strategy to meet rising corporate average fuel economy standards in the United States and carbon-dioxide regulations in Europe with technology rather than downsized vehicles.
Wednesday, October 8, 2008
FERRARI: RECESSION-PROOF AND TURNING ... GREEN?
Luca Ciferri Automotive News October 6, 2008 - 12:01 am ET
VILLASTELLONE, Italy — High gasoline prices. A melting credit market. Ferrari owners don't care. Ferraris sent to the United States are sold before they even arrive. Once sold, most models appreciate wildly. But Ferrari is adjusting its successful formula a bit because the automaker wants to send a signal that it is environmentally conscious. The new Ferrari California has specifications similar to those of the F430, but its emissions are lower and fuel economy is better. The California will be the fourth Ferrari model.
California: The California debuted this month at the Paris auto show. One model is offered — a two-seat convertible with a retractable hard top. Sales in Europe will begin by the end of this year; shipments to the United States begin next June. The all-aluminum Pininfarina-designed California has a 460-hp, 4.3-liter V-8. The engine is mounted behind the front axle. On the California, Ferrari unveils direct gasoline fuel injection. The car also introduces Ferrari's seven-speed dual-clutch transmission.
F430: The midengine F430 will be redesigned in the second half of 2009. The car will feature a new aluminum chassis and a direct-injection engine derived from the California, as well as the new seven-speed dual-clutch transmission.
599 GTB Fiorano: The car has a yearlong waiting list; the planned retractable hardtop variant has been rescheduled for 2011 or 2012.
612 Scaglietti: A replacement is planned for 2011.
Limited-edition car: The time frame is unclear for Ferrari's next limited-edition high-performance car, possibly 2010 or 2011.The car will use lightweight construction inspired by the Millechili concept, which was unveiled last year at Ferrari's 60th anniversary event. The concept has a 550-hp, twin-turbocharged, direct-injection 3.0-liter V-8. The production car will be powered by a V-12.
VILLASTELLONE, Italy — High gasoline prices. A melting credit market. Ferrari owners don't care. Ferraris sent to the United States are sold before they even arrive. Once sold, most models appreciate wildly. But Ferrari is adjusting its successful formula a bit because the automaker wants to send a signal that it is environmentally conscious. The new Ferrari California has specifications similar to those of the F430, but its emissions are lower and fuel economy is better. The California will be the fourth Ferrari model.
California: The California debuted this month at the Paris auto show. One model is offered — a two-seat convertible with a retractable hard top. Sales in Europe will begin by the end of this year; shipments to the United States begin next June. The all-aluminum Pininfarina-designed California has a 460-hp, 4.3-liter V-8. The engine is mounted behind the front axle. On the California, Ferrari unveils direct gasoline fuel injection. The car also introduces Ferrari's seven-speed dual-clutch transmission.
F430: The midengine F430 will be redesigned in the second half of 2009. The car will feature a new aluminum chassis and a direct-injection engine derived from the California, as well as the new seven-speed dual-clutch transmission.
599 GTB Fiorano: The car has a yearlong waiting list; the planned retractable hardtop variant has been rescheduled for 2011 or 2012.
612 Scaglietti: A replacement is planned for 2011.
Limited-edition car: The time frame is unclear for Ferrari's next limited-edition high-performance car, possibly 2010 or 2011.The car will use lightweight construction inspired by the Millechili concept, which was unveiled last year at Ferrari's 60th anniversary event. The concept has a 550-hp, twin-turbocharged, direct-injection 3.0-liter V-8. The production car will be powered by a V-12.
GMAC is out of leasing — at least for now
Alysha Webb and Jesse Snyder Automotive News October 7, 2008 - 12:01 am ET
GMAC Financial Services, the nation's largest auto lessor as recently as midyear, virtually has stopped writing leases in the United States. In September, leases accounted for less than 2 percent of General Motors' U.S. new-vehicle sales, according to J.D. Power and Associates. A year earlier, Power noted, GM's leasing rate was 16.8 percent. Automakers and dealers use leases as sales tools for customers who seek lower monthly payments and a way to cover negative equity in their current vehicles. But the credit crisis forced Chrysler Financial to exit the leasing business this summer, and other lenders have cut back sharply on leasing.
Leases accounted for 12.3 percent of all new-vehicle sales in September, Power reported. That's down from 18.0 percent a year earlier.
Last week, Mark LaNeve, GM's vice president of North American sales, conceded that GM did "hardly any leasing in September." During a conference call reporting monthly sales, LaNeve said GM wants GMAC to put more money into leasing. GMAC spokesman Mike Stoller said the company's policy is not permanent. "At such a point as leasing makes sense, you will see a return to leasing," he said. But GM COO Fritz Henderson appears pessimistic about GMAC's possible return to leasing. Last week, he said he expects GM's lease rate to remain "minimal" throughout the fall. "We've really reverted our marketing program to cash," Henderson said at the Paris auto show. "For the foreseeable future, that's where we're going to focus our attention."
Wall Street turmoil
GM cannot dictate GMAC's leasing policy. Last year, GM sold a controlling 51 percent share of GMAC to Cerberus Capital Management. Amid Wall Street's meltdown, GM and GMAC executives say, the captive finance company has been finding it nearly impossible to raise money by selling securities backed by bundles of auto leases. Financial institutions "are not buying the paper," said Kim Kosak, Chevrolet's general director of advertising and sales promotion. "That's a big concern, particularly with Northeast dealers." Congress' $700 billion Wall Street bailout may ease the credit crunch, since it empowers the Treasury Department to purchase auto loans. But until credit markets improve, LaNeve warned, "getting leases is like squeezing blood out of a turnip." Dealers confirm that GMAC stopped subsidizing leases in August, especially for cars and trucks with low residual values. A residual value is a prediction of what a vehicle will be worth at the end of a lease, usually 36 months. A vehicle with a low residual value requires the customer to make higher monthly lease payments, unless the automaker subsidizes the lease. That practice, called subventing, has been extraordinarily costly for automakers.
Lenders such as GMAC lost huge sums this year when the end-of-lease residual values of many large trucks proved to be much lower than original estimates. John McEleney, who owns two GM dealerships in Iowa, said the virtual elimination of subvented leases has added $70 to $90 a month to the retail cost of leases. "That's driven people away from leasing," said McEleney, who will become chairman of the National Automobile Dealers Association next year. Amid the near-freeze on leasing, GM new-vehicle sales last month dropped 15.6 percent from September 2007 — a smaller decline than its largest competitors. LaNeve cited GM's employee pricing incentive program for the company's relative sales success.
Dethroned
Through mid-2008, GMAC was the largest U.S. lessor of new and used vehicles, with 13.0 percent of the lease market, according to Experian Automotive's AutoCount. GMAC has fallen to second place among U.S. auto lenders overall, trailing Toyota Financial Services, Experian said.
Henderson said GM's U.S. leasing now "is focused primarily on premium vehicles." But Cadillac was not immune from the downturn: Last month's lease rate for Cadillac was 8.1 percent, down from 43.6 percent in September 2007, J.D. Power reported. Chrysler Financial, which is owned by Cerberus, formally stopped U.S. retail leasing Aug. 1. Last month, Chrysler LLC's lease rate was less than 2 percent. Ilya Shnayder, corporate finance director of International Cars Ltd., a dealership group in Danvers, Mass., that sells Chevrolet and Saturn vehicles, said GMAC has not announced an end of leasing "because it would have adverse dealer reaction. But for all intents and purposes, they are out of leasing." Many consumers still want to lease vehicles, said John Blair, CEO of Automotive Lease Guide, which estimates residual values for the industry. But profits on leases have fallen so low, Blair said, that lenders such as GMAC "just can't do it."
GMAC Financial Services, the nation's largest auto lessor as recently as midyear, virtually has stopped writing leases in the United States. In September, leases accounted for less than 2 percent of General Motors' U.S. new-vehicle sales, according to J.D. Power and Associates. A year earlier, Power noted, GM's leasing rate was 16.8 percent. Automakers and dealers use leases as sales tools for customers who seek lower monthly payments and a way to cover negative equity in their current vehicles. But the credit crisis forced Chrysler Financial to exit the leasing business this summer, and other lenders have cut back sharply on leasing.
Leases accounted for 12.3 percent of all new-vehicle sales in September, Power reported. That's down from 18.0 percent a year earlier.
Last week, Mark LaNeve, GM's vice president of North American sales, conceded that GM did "hardly any leasing in September." During a conference call reporting monthly sales, LaNeve said GM wants GMAC to put more money into leasing. GMAC spokesman Mike Stoller said the company's policy is not permanent. "At such a point as leasing makes sense, you will see a return to leasing," he said. But GM COO Fritz Henderson appears pessimistic about GMAC's possible return to leasing. Last week, he said he expects GM's lease rate to remain "minimal" throughout the fall. "We've really reverted our marketing program to cash," Henderson said at the Paris auto show. "For the foreseeable future, that's where we're going to focus our attention."
Wall Street turmoil
GM cannot dictate GMAC's leasing policy. Last year, GM sold a controlling 51 percent share of GMAC to Cerberus Capital Management. Amid Wall Street's meltdown, GM and GMAC executives say, the captive finance company has been finding it nearly impossible to raise money by selling securities backed by bundles of auto leases. Financial institutions "are not buying the paper," said Kim Kosak, Chevrolet's general director of advertising and sales promotion. "That's a big concern, particularly with Northeast dealers." Congress' $700 billion Wall Street bailout may ease the credit crunch, since it empowers the Treasury Department to purchase auto loans. But until credit markets improve, LaNeve warned, "getting leases is like squeezing blood out of a turnip." Dealers confirm that GMAC stopped subsidizing leases in August, especially for cars and trucks with low residual values. A residual value is a prediction of what a vehicle will be worth at the end of a lease, usually 36 months. A vehicle with a low residual value requires the customer to make higher monthly lease payments, unless the automaker subsidizes the lease. That practice, called subventing, has been extraordinarily costly for automakers.
Lenders such as GMAC lost huge sums this year when the end-of-lease residual values of many large trucks proved to be much lower than original estimates. John McEleney, who owns two GM dealerships in Iowa, said the virtual elimination of subvented leases has added $70 to $90 a month to the retail cost of leases. "That's driven people away from leasing," said McEleney, who will become chairman of the National Automobile Dealers Association next year. Amid the near-freeze on leasing, GM new-vehicle sales last month dropped 15.6 percent from September 2007 — a smaller decline than its largest competitors. LaNeve cited GM's employee pricing incentive program for the company's relative sales success.
Dethroned
Through mid-2008, GMAC was the largest U.S. lessor of new and used vehicles, with 13.0 percent of the lease market, according to Experian Automotive's AutoCount. GMAC has fallen to second place among U.S. auto lenders overall, trailing Toyota Financial Services, Experian said.
Henderson said GM's U.S. leasing now "is focused primarily on premium vehicles." But Cadillac was not immune from the downturn: Last month's lease rate for Cadillac was 8.1 percent, down from 43.6 percent in September 2007, J.D. Power reported. Chrysler Financial, which is owned by Cerberus, formally stopped U.S. retail leasing Aug. 1. Last month, Chrysler LLC's lease rate was less than 2 percent. Ilya Shnayder, corporate finance director of International Cars Ltd., a dealership group in Danvers, Mass., that sells Chevrolet and Saturn vehicles, said GMAC has not announced an end of leasing "because it would have adverse dealer reaction. But for all intents and purposes, they are out of leasing." Many consumers still want to lease vehicles, said John Blair, CEO of Automotive Lease Guide, which estimates residual values for the industry. But profits on leases have fallen so low, Blair said, that lenders such as GMAC "just can't do it."
Saturday, October 4, 2008
Chase Cuts Back on Auto Leasing
Donna Harris Automotive News September 30, 2008
Chase Auto Finance, the No. 3 U.S. auto lender, has slashed its leasing business.
On Sept. 1, Chase stopped writing new leases on all but Subaru and Saturn vehicles. The lender has contracts to provide financial services to those brands. Next month, Chase will launch a similar relationship with Mazda.
In the first half of 2008, Chase Auto Finance had nearly 5.2 percent of the overall U.S. auto lending market, trailing only Toyota Financial Services and GMAC Financial Services, according to Experian AutoCount. Chase had 1.8 percent of the leasing market, Experian estimated.
Chase spokesman Mary Kay Bean said the bank is "focusing on the profitable segments of the business. ... We decided to limit our lease and balloon financing offers to our manufacturing partners to keep our lease portfolio small."
Chase stopped writing leases on Chrysler LLC vehicles in August, shortly after Chrysler Financial abandoned U.S. leasing.
Other large auto lenders also have cut back on leasing. At the end of July, Wells Fargo Auto Finance stopped writing leases. This summer, GMAC and Ford Motor Credit Co. reduced their leasing business, especially to customers with poor credit.
In the first half of 2008, one of every five new vehicles sold at retail in the United States was leased, up from one in seven in 2003, according to J.D. Power and Associates.
But high gasoline prices have caused values of large trucks to depreciate sharply. The lease business deteriorated as lenders lost money on used vehicles coming off lease.
Nine of the 10 largest vehicle lessors in the United States are automakers' captive finance companies, according to Experian. The 10th-ranked lessor, U.S. Bank, remains committed to leasing, spokeswoman Jennifer Wendt said.
Some banks say the departure of other lessors gives them the opportunity to pick up lease business.
Nicholas Stanutz, executive vice president of consumer credit for Huntington Bancshares Inc., said the Columbus, Ohio, company now offers leases through Chrysler LLC dealers in Michigan.
The leases are for terms "we're comfortable with," Stanutz said. "The credit quality is outstanding."
Stanutz said he hopes dealerships that send retail lease business to Huntington also will finance loan customers through his bank. He said Huntington wants to work with dealerships on inventory financing, noting that GMAC and Chrysler Financial recently raised dealers' floorplan costs.
Said Stanutz: "We want to grow in this industry."
Chase Auto Finance, the No. 3 U.S. auto lender, has slashed its leasing business.
On Sept. 1, Chase stopped writing new leases on all but Subaru and Saturn vehicles. The lender has contracts to provide financial services to those brands. Next month, Chase will launch a similar relationship with Mazda.
In the first half of 2008, Chase Auto Finance had nearly 5.2 percent of the overall U.S. auto lending market, trailing only Toyota Financial Services and GMAC Financial Services, according to Experian AutoCount. Chase had 1.8 percent of the leasing market, Experian estimated.
Chase spokesman Mary Kay Bean said the bank is "focusing on the profitable segments of the business. ... We decided to limit our lease and balloon financing offers to our manufacturing partners to keep our lease portfolio small."
Chase stopped writing leases on Chrysler LLC vehicles in August, shortly after Chrysler Financial abandoned U.S. leasing.
Other large auto lenders also have cut back on leasing. At the end of July, Wells Fargo Auto Finance stopped writing leases. This summer, GMAC and Ford Motor Credit Co. reduced their leasing business, especially to customers with poor credit.
In the first half of 2008, one of every five new vehicles sold at retail in the United States was leased, up from one in seven in 2003, according to J.D. Power and Associates.
But high gasoline prices have caused values of large trucks to depreciate sharply. The lease business deteriorated as lenders lost money on used vehicles coming off lease.
Nine of the 10 largest vehicle lessors in the United States are automakers' captive finance companies, according to Experian. The 10th-ranked lessor, U.S. Bank, remains committed to leasing, spokeswoman Jennifer Wendt said.
Some banks say the departure of other lessors gives them the opportunity to pick up lease business.
Nicholas Stanutz, executive vice president of consumer credit for Huntington Bancshares Inc., said the Columbus, Ohio, company now offers leases through Chrysler LLC dealers in Michigan.
The leases are for terms "we're comfortable with," Stanutz said. "The credit quality is outstanding."
Stanutz said he hopes dealerships that send retail lease business to Huntington also will finance loan customers through his bank. He said Huntington wants to work with dealerships on inventory financing, noting that GMAC and Chrysler Financial recently raised dealers' floorplan costs.
Said Stanutz: "We want to grow in this industry."
Subscribe to:
Posts (Atom)