The major car rental companies will be moving cars with Toyota decals to the back of the lot, as both Avis Budget and Enterprise are opting to not rent out the Toyotas currently under recall. The peddle problems generally don’t manifest themselves in the low-mileage cars in the rental fleets, but the rental car companies don’t want to be seen leasing flawed cars.
Fleet sales to rental car companies are large parts of car company’s sales. They are also good marketing tools, as people might go on to buy a car they drove as a rental; I recall giving the PT Cruiser a serious look after driving one as a rental car. Having the major rental car companies pull most of their Toyotas will mean that customers won’t get that experience.
If the affected Toyotas get a bad reputation and people prefer not driving them, the fleet cars could be retired early. That would lead to some premature car hauler business taking the old Toyotas in the rental car fleet to auctions or used car lots and bringing replacement cars in.
On the bright side, this might loosen up a tight used car market. The Cash for Clunkers program took a lot of old cars off the market, but there might be a new set of “clunkers” heading into used car lots to offset their loss. I put “clunker” in quotes, for the cars should be just fine once the accelerator issue is fixed, but they may well have a bad reputation if the press of this week is any indication.
Source: http://online.wsj.com/article/SB1000142405...ustryCollection
Friday, February 5, 2010
Toyota to Close NUMMI, Teamsters, UAW Protest Job Losses, car transport, car hauling
The NUMMI plant in California, a joint venture between Toyota and GM, seems to be on its last legs, much to the chagrin of Teamster car haulers. GM has abandoned its share of the plant during bankruptcy and Toyota is about to do likewise; the Corolla produced there is part of the recall that has set Toyota on its heels. Toyota is planning to shift production of the Tacoma pickup to San Antonio and move Corolla production to Canada and Japan.
That might please the Canadian Auto Workers, but the UAW doesn’t like it; the move has set up a tag-team protest of the NUMMI closure between the Teamsters, the UAW and the environmental group Friends of the Earth, who are going to exchange unpleasantries at the Japanese embassy in Washington on Thursday. Protesting in front of Toyota HQ might be more effective, but doing so in Washington in front of the Washington press corps makes for better PR; the Teamsters protested Chrysler’s apparent lack of interest in unionized car transport in front of the Italian embassy last year, playing up Chrysler’s Fiat connection.
The move should cost some Teamster car hauling jobs, as the Japanese imports are more likely to move by rail than the NUMMI-made cars. The environmental angle here is that moving the cars by sea from Japan will leave a greater carbon footprint.
However, NUMMI’s time has come and gone. When it got started in 1984, it was a way for GM to learn Toyota’s quality-control tricks and for Toyota to get pointers from GM on how to manufacture in the US. A quarter-century on, and Six Sigma black belts abound in US manufacturing; we’ve gotten the quality control bug and Toyota has gone native, as the Lexington high school football highlights from Toyota Stadium in Georgetown point out.
Source: http://www.joc.com/node/416309
That might please the Canadian Auto Workers, but the UAW doesn’t like it; the move has set up a tag-team protest of the NUMMI closure between the Teamsters, the UAW and the environmental group Friends of the Earth, who are going to exchange unpleasantries at the Japanese embassy in Washington on Thursday. Protesting in front of Toyota HQ might be more effective, but doing so in Washington in front of the Washington press corps makes for better PR; the Teamsters protested Chrysler’s apparent lack of interest in unionized car transport in front of the Italian embassy last year, playing up Chrysler’s Fiat connection.
The move should cost some Teamster car hauling jobs, as the Japanese imports are more likely to move by rail than the NUMMI-made cars. The environmental angle here is that moving the cars by sea from Japan will leave a greater carbon footprint.
However, NUMMI’s time has come and gone. When it got started in 1984, it was a way for GM to learn Toyota’s quality-control tricks and for Toyota to get pointers from GM on how to manufacture in the US. A quarter-century on, and Six Sigma black belts abound in US manufacturing; we’ve gotten the quality control bug and Toyota has gone native, as the Lexington high school football highlights from Toyota Stadium in Georgetown point out.
Source: http://www.joc.com/node/416309
Thursday, February 4, 2010
Seller's Remorse, KY Hyundai Dealer Reneges on eBay Deal
Online car auctions are a growing tool for selling cars; it’s also good business for car haulers, since winning bids can often come from the other side of the country, if not the world. However, this story on a car auction gone bad comes from my old neck of the woods of Lexington; I can recall driving past the "villain" of the piece, Glenn Hyundai, on Richmond Road as we went to the nearby Eagle Creek library.
Glenn forgot to put a reserve price on a lightly used (5000 miles) Hyundai Genesis Coupe on an eBay auction, and then when the buyer came to Lexington from out of town to pick up his car (sorry, car transporters, no business here), Glenn refused to honor the deal, which was about $3000 lower than normal market value for the car.
The buyer then posted the story online, and Glenn has got a lot of nasty phone calls and e-mails from car enthusiasts for playing hardball on the deal. The buyer is also now in the process of suing Glenn to honor the deal. Glenn seems to be getting more than $3000 worth of badwill out of the deal, but it does point out that you can have seller’s remorse as well as buyer’s remorse in an auction.
In a traditional auction, the buyer takes possession right away and the seller doesn’t have a good recourse if the auction didn’t quite go their way; the car carrier has already come and taken the car away before seller’s remorse can set in. If there is a time-lag between the auction and taking possession of the car, the seller can try to back out of the deal and may be forced into court if they refuse to honor their end of the bargain.
Source:http://www.autoblog.com/2010/01/25/its-on-...e-buyer-jilted/
Glenn forgot to put a reserve price on a lightly used (5000 miles) Hyundai Genesis Coupe on an eBay auction, and then when the buyer came to Lexington from out of town to pick up his car (sorry, car transporters, no business here), Glenn refused to honor the deal, which was about $3000 lower than normal market value for the car.
The buyer then posted the story online, and Glenn has got a lot of nasty phone calls and e-mails from car enthusiasts for playing hardball on the deal. The buyer is also now in the process of suing Glenn to honor the deal. Glenn seems to be getting more than $3000 worth of badwill out of the deal, but it does point out that you can have seller’s remorse as well as buyer’s remorse in an auction.
In a traditional auction, the buyer takes possession right away and the seller doesn’t have a good recourse if the auction didn’t quite go their way; the car carrier has already come and taken the car away before seller’s remorse can set in. If there is a time-lag between the auction and taking possession of the car, the seller can try to back out of the deal and may be forced into court if they refuse to honor their end of the bargain.
Source:http://www.autoblog.com/2010/01/25/its-on-...e-buyer-jilted/
Wednesday, February 3, 2010
Sharp Decline in Vehicle Carrier Transits
As per the 2009 Annual Report of The Panama Canal Authority (ACP), vehicle carrier segment registered a double digit fall in important traffic indicators in the fiscal year 2009 spanning from Oct 1, 2008 to Sep 30, 2009. Vehicle carrier transits plummeted by 42.6% (469), tonnage by 36.9% (25.1 million) and toll revenue by 28.8% (B/.87.2) in 2009 compared to the last fiscal year. Substantial drop in demand and subsequent fall in car sales, poor consumer confidence and weak credit badly affected the auto industry during 2009 recession. Vehicle shipment volumes of the shipping companies, thus, fell.
The container segment registered a drop of 5% each in transits and PC/UMS (Panama Canal / Universal Metric System) in 2009 over the previous fiscal year. Reduction in finished good consumption and demand, economic downturn and cost control measures by shipping companies are ascribed to the drop.
Despite recession in Eurozone, the U.K., the U.S. and Japan, total trade flow via the Canal did not fall substantially in the fiscal year 2009. The total Canal transits decreased from 14,721 in fiscal year 2007 to 14,702 in 2008 to 14, 342 in 2009. Vessel tonnage recorded a fall of 3.4% to 299.1 millions of PC/UMS in the fiscal 2009 from 309.6 millions of PC/UMS in the last fiscal year. PANAMAX vessel transits fell by 1.2% in 2009 due to decline in vehicle carrier and container transits.
ACP is responsible for the Canal administration, operations, improvements, modernization and maintenance.
Source:
http://www.pancanal.com/eng/general/report...mePDFingles.pdf
The container segment registered a drop of 5% each in transits and PC/UMS (Panama Canal / Universal Metric System) in 2009 over the previous fiscal year. Reduction in finished good consumption and demand, economic downturn and cost control measures by shipping companies are ascribed to the drop.
Despite recession in Eurozone, the U.K., the U.S. and Japan, total trade flow via the Canal did not fall substantially in the fiscal year 2009. The total Canal transits decreased from 14,721 in fiscal year 2007 to 14,702 in 2008 to 14, 342 in 2009. Vessel tonnage recorded a fall of 3.4% to 299.1 millions of PC/UMS in the fiscal 2009 from 309.6 millions of PC/UMS in the last fiscal year. PANAMAX vessel transits fell by 1.2% in 2009 due to decline in vehicle carrier and container transits.
ACP is responsible for the Canal administration, operations, improvements, modernization and maintenance.
Source:
http://www.pancanal.com/eng/general/report...mePDFingles.pdf
Tuesday, February 2, 2010
Manheim Pulls Toyotas From Auctions, Fix Found for Toyota, Honda Recalls Fits
Toyota is facing more fallout on its recent pedal issues with significant ramifications for car haulers. Two congressional committees have started hearings on the issue and, more importantly, the National Auto Auction Association has suggested that the affected cars not be sold at auction; the largest car auctioneer, Manheim, has pulled all affected Toyotas from its auctions.
That’s going to mean a drop in auction business and a drop in car transportation until Toyota does fix the problem. The news of today has the potential fix being a metal shim inserted into the friction level so that it does stay stuck. It seems to be an inelegant solution for a company that taught the US car industry how to do quality control, but any solution will be an improvement.
In the meantime, the liquidity of a Toyota dealer’s used car inventory is next to nil, as the option of selling a car at auction if it isn’t moving in the used car lot has been taken away. That might prove problematic for some dealers with a lot of Toyotas on hand and might be the final straw for a few car dealers.
Right in the middle of the critical pile-on over Toyota, Honda has announced that they are recalling 646,000 Fits, who proved to not quite live up to their name; their power window switch controls could allow water in and catch fire, which has happened at least three times. If you’re going to have a recall, this is the time to do it, as Honda won’t face near the bad press in the auto news universe.
http://www.autoblog.com/2010/01/29/honda-r...ound-the-world/
http://www.detnews.com/article/20100129/AU...-Toyota-recalls
http://www.autospies.com/news/Nation-s-Lar...-Toyotas-51500/
http://www.autoblog.com/2010/01/29/report-...nvolving-shims/
That’s going to mean a drop in auction business and a drop in car transportation until Toyota does fix the problem. The news of today has the potential fix being a metal shim inserted into the friction level so that it does stay stuck. It seems to be an inelegant solution for a company that taught the US car industry how to do quality control, but any solution will be an improvement.
In the meantime, the liquidity of a Toyota dealer’s used car inventory is next to nil, as the option of selling a car at auction if it isn’t moving in the used car lot has been taken away. That might prove problematic for some dealers with a lot of Toyotas on hand and might be the final straw for a few car dealers.
Right in the middle of the critical pile-on over Toyota, Honda has announced that they are recalling 646,000 Fits, who proved to not quite live up to their name; their power window switch controls could allow water in and catch fire, which has happened at least three times. If you’re going to have a recall, this is the time to do it, as Honda won’t face near the bad press in the auto news universe.
http://www.autoblog.com/2010/01/29/honda-r...ound-the-world/
http://www.detnews.com/article/20100129/AU...-Toyota-recalls
http://www.autospies.com/news/Nation-s-Lar...-Toyotas-51500/
http://www.autoblog.com/2010/01/29/report-...nvolving-shims/
Tesla Files IPO Paperwork With SEC, Roadster Production on Hiatus in 2011
Tesla Motors, the luxury electric car maker, has issued the initial registration of its IPO registration with the SEC, but while they hope to be shipping cars that don’t need any gas, their Roadster may be taking a hiatus in 2011.
Back when I was teaching finance, I pointed students to the Management Discussion and Analysis section of a company’s annual 10-K report with the SEC, for there is often some good in-depth information that you might not get elsewhere. The folks at Wired’s Autopia blog caught an interesting point in the MD&A of the S-1 form; on page 62, Tesla notes that they will be changing versions of the Roadster and that only the new Model S will be available in 2011. Manufacturing of the Roadster is being contracted out to British car-maker Lotus and retooling there will have their lines down in 2011.
That is going to make Tesla a dicey stock, since they will be banking on the Model S to make money in 2011. If there are any problems getting the Model S up and running, there will not be moving cars in 2011.
That may make investors in Tesla a bit skittish, as will the red ink that has already been endured at Tesla and the position of convertible preferred stockholders ahead of them at present and as future fellow common shareholders in the future. However, the nature of the stock will have both car enthusiasts and green investors interested in the stock, so that the Tesla IPO might come out at a price higher than it would if it were a more mundane stock.
However, if all goes well, car haulers will have some new customers to deliver to as Tesla goes more mainstream.
Sources: http://www.sec.gov/Archives/edgar/data/131...htm#toc51863_12
http://www.wired.com/autopia/2010/01/tesla...o-exit-in-2011/
Back when I was teaching finance, I pointed students to the Management Discussion and Analysis section of a company’s annual 10-K report with the SEC, for there is often some good in-depth information that you might not get elsewhere. The folks at Wired’s Autopia blog caught an interesting point in the MD&A of the S-1 form; on page 62, Tesla notes that they will be changing versions of the Roadster and that only the new Model S will be available in 2011. Manufacturing of the Roadster is being contracted out to British car-maker Lotus and retooling there will have their lines down in 2011.
That is going to make Tesla a dicey stock, since they will be banking on the Model S to make money in 2011. If there are any problems getting the Model S up and running, there will not be moving cars in 2011.
That may make investors in Tesla a bit skittish, as will the red ink that has already been endured at Tesla and the position of convertible preferred stockholders ahead of them at present and as future fellow common shareholders in the future. However, the nature of the stock will have both car enthusiasts and green investors interested in the stock, so that the Tesla IPO might come out at a price higher than it would if it were a more mundane stock.
However, if all goes well, car haulers will have some new customers to deliver to as Tesla goes more mainstream.
Sources: http://www.sec.gov/Archives/edgar/data/131...htm#toc51863_12
http://www.wired.com/autopia/2010/01/tesla...o-exit-in-2011/
Monday, January 25, 2010
Russo & Steele Auction Closed By High Winds, Muscle Cars Damaged By Tent Debris, Auto transportation, car haulers
The Phoenix area is a hotbed of classic cars, as two large car auctions, the Barnett-Jackson and Russo and Steele actions are being held in Scottsdale this week; that’s going to mean a lot of auto transportation opportunities this week in the Southwest. However, the bad weather that dumped two feet of snow in Flagstaff to the north of Phoenix brought high winds that damaged and disrupted the Russo and Steele Auctions.
When you look at the Russo and Steele website, the overriding vision is of classic cars under large tents. The problem with tents is that they don’t do well in heavy winds, and two of the big tents were blown over, with tent poles sent crashing into cars and the tents themselves getting blown onto the 101 beltway. According to Autoweek, $1.5 million dollars of damage was done to vehicles at the site. AZCental.com adds that about half of the 600 cars on consignment at Russo and Steele were damaged, with damages averaging about $500 a car.
Russo and Steele held a consignees-only meeting Saturday morning, where that million dollars of bad news was likely being discussed. The normal Wednesday-Sunday format is tentatively slated to extend into Monday, which will throw people’s schedules and hotel plans into a tizzy. That includes car haulers who were slated to be taking cars to their new owners this weekend; they might wind up hanging around the Phoenix area a bit longer than planned.
The Barnett-Jackson auction centralized activity in one main tent on Thursday night, putting tractor-trailers around the tents a shield for the fierce winds, but otherwise stayed on schedule.
Sources:http://www.autoweek.com/article/20100123/CARNEWS/100129966
http://www.azcentral.com/business/articles...r-shows-CR.html
http://www.russoandsteele.com/
When you look at the Russo and Steele website, the overriding vision is of classic cars under large tents. The problem with tents is that they don’t do well in heavy winds, and two of the big tents were blown over, with tent poles sent crashing into cars and the tents themselves getting blown onto the 101 beltway. According to Autoweek, $1.5 million dollars of damage was done to vehicles at the site. AZCental.com adds that about half of the 600 cars on consignment at Russo and Steele were damaged, with damages averaging about $500 a car.
Russo and Steele held a consignees-only meeting Saturday morning, where that million dollars of bad news was likely being discussed. The normal Wednesday-Sunday format is tentatively slated to extend into Monday, which will throw people’s schedules and hotel plans into a tizzy. That includes car haulers who were slated to be taking cars to their new owners this weekend; they might wind up hanging around the Phoenix area a bit longer than planned.
The Barnett-Jackson auction centralized activity in one main tent on Thursday night, putting tractor-trailers around the tents a shield for the fierce winds, but otherwise stayed on schedule.
Sources:http://www.autoweek.com/article/20100123/CARNEWS/100129966
http://www.azcentral.com/business/articles...r-shows-CR.html
http://www.russoandsteele.com/
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