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Auto Sales Helping to Drive the Economy
auto industry is powering up to help the economy. Surging car sales could boost
economic growth this year by nearly a full percentage point, its biggest
contribution to the economy in more than a quarter-century, according to a new
analysis. Pent-up demand from consumers who are feeling more sanguine
about job security and income levels could drive sales volume to as many
as 13.6 million vehicles this year, said Carl J. Riccadonna, senior U.S.
economist at Deutsche Bank in New York. That would be a 17% increase from the
11.6 million vehicles sold last year and could add as much as 0.8% to U.S.
gross domestic product, the most since 1984, Riccadonna said. Auto sales could
keep rising throughout the year as consumers feel more confident in the economy
and as lenders become more generous with credit, Riccadonna said.
Source: Los Angeles Times
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Volkswagen Expects 20% Rise In U.S. Sales In 2011
CHICAGO – Volkswagen AG expects its
U.S. sales to increase about 20% this year as the German auto maker counts on a
big investment by its U.S. dealers and a new assembly plant in Tennessee to
maintain VW's sales-growth momentum in the U.S. Volkswagen's U.S. chief
Jonathan Browning said VW's U.S. car lineup is designed specifically for U.S.
drivers and the company anticipates rapid increases in sales to continue in the
coming years. Volkswagen's U.S. sales rose 20% last year from 2009 levels to
256,830 vehicles. "We expect
about the same increase again this year," Browning said during remarks to
the Chicago Economic Club on Wednesday. "Our dealers across the country
are preparing aggressively for these higher volumes." Browning said 61
dealers have invested more than $155 million in new or upgraded facilities to
accommodate larger customer volumes. The company has 580 dealers in the U.S.
Many dealers "have been urging us for years to make a total commitment to
the market," he said. "Now that we have done so, they are dealing
with the challenge of a significant increase in customers and sales."
Source: Dow Jones
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Hyundai Says Price War Under Way in U.S. Car Market
CHICAGO -- The first shots have already been fired in what could be an escalating price
war between major automakers in the U.S. market, according to a Hyundai Motor
Co executive, "I think we can officially say that a price war broke out in
the industry," John Krafcik, president and chief executive of Hyundai
Motor America said on the sidelines of the Chicago auto show. "There is
apparently a lot of pressure to deliver sales results." Increased
discounting on new car sales would be a boon to consumers but could chip away
at the profitability that many investors had projected for automakers at the
start of the second year of a still-developing recovery in U.S. auto sales.
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Ford Making Mobile Marketing the Cornerstone of its 2011 Vehicle Advertising
On the eve of the 2011 Chicago Auto Show at the Windy City’s legendary McCormick Place, Ford Motor Co. announced that social media and other “new advertising strategies” will be employed to market all of the carmaker’s 2011 vehicles. Jim Farley, chief marketing executive at Ford, told those gathered at the Auto Show pre-opening revue that the only media that grew in 2009 and 2010 was online and mobile. As a result, Ford will change how it reaches both current and
prospective Ford customers. “With 500 million people on Facebook, we can reach more potential customers in a more personal way,” Farley admitted. Ford launched it’s new 2011 Explorer through Facebook in mid 2010 and as a result of a substantial social media push, the sports utility vehicle has reached 140,000 Facebook fans. The Chicago Auto Show, at McCormick Place in Chicago, is open to the public today through February 20th.
Source: Mobile Marketing Watch
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Fraud Alert: Dealers Targeted in Loan Marketing Scheme
NADA is warning dealers to be on the lookout for possible fraudulent activity related to dealers' retail loan portfolios. Certain individuals have recently targeted dealers with a scam involving a promise to “bundle a dealership’s car loans and market them to investors," essentially selling the car dealers’ collectible debt. The individuals then require dealers to pay car buyers’ first two to three months’ payments up front. These individuals
collect the fees, but never market the loans. One such group of individuals in Washington state was recently sentenced in federal court for their role in such a scheme. This group operated under several names including Auto Credit Solutions, Sub-Prime Financial Services, Easy Credit Store, Instant Funding Systems, Great Northwest Financial Services and Western Empire Financial Services. Dealers are encouraged to be diligent in selecting business partners, and if a dealer suspects such
fraud is being attempted, they should contact the Internal Revenue Service Criminal Investigation, U.S. Postal Inspection Service or their local police department.
Source: IRS/NADA Legal Affairs
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"A key issue in the sale of hybrids is the cost of gasoline. It
doesn't make sense to spend an extra $10,000 on a car to save $500 a year on
-- Mike Omotoso, senior manager of global powertrain research at J.D. Power
and Associates, referring to the fact that car shoppers will not give up their
conventional vehicles until alternative-fuel vehicles become more
wallet-friendly, Chicago Sun-Times
, Feb. 10
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