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Inside this issue
Opinion: Higher Gas Prices Will Slow, Not Stop Auto Sales
Report: Americans Keeping Vehicles Longer due to Better Quality, Economic Uncertainty
Mazda Eyes $2 Billion Share Offering as Strong Yen Bites
Peugeot Is In Talks With General Motors on Possible Alliance; Shares Surge
GM to Gingrich: You Can Put a Gun Rack in a Volt
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Opinion: Higher Gas Prices Will Slow, Not Stop Auto Sales
By Phil LeBeau

With gas prices surging to a record high for this time of year ($3.57/gallon national average compared to $3.17/gallon a year ago) the question now is not whether gas will hit $4.50 or $5.00 a gallon. It's a pretty safe bet we'll hit those prices this Summer. Heck, parts of California are already seeing $5/gal. The automakers knew this day was coming. Maybe that's why you won't find many of them freaking out over surging gas prices. Unlike the last time gas prices surged to record highs (July 2008 the natl. avg. hit $4.11/gal) the auto industry has far more fuel efficient cars and trucks sitting in showrooms. If the average price of gas surges to $5.00 or $5.50, the real and psychological impact could be so great many buyers might stay on the sidelines. But for now, my gut says the automakers continue posting strong sales, even with prices at the pump moving higher.
Source: CNBC

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Report: Americans Keeping Vehicles Longer due to Better Quality, Economic Uncertainty

Americans are keeping new and used vehicles longer because of better quality, concern about debt and economic uncertainty, according to a report released today by the Southfield research firm R.L. Polk. Based on data collected in the third quarter of 2011, new vehicle owners kept them an average of 71.4 months, or nearly six years, the longest in the eight years Polk has done the survey, and nearly two years longer than the average life of ownership in 2003.
Source: Detroit Free Press

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Mazda Eyes $2 Billion Share Offering as Strong Yen Bites

Mazda Motor Corp said on Wednesday it was looking to raise up to 162.8 billion yen ($2 billion) in its second public share offering in 2-1/2 years, underscoring the Japanese automaker's vulnerability to the stubbornly strong yen. While the strong yen has hammered all Japanese automakers, Mazda has been hit hardest with about 70 percent of its production in Japan - 90 percent of that for export. This month, Mazda said its net loss would balloon to 100 billion yen in the year ending in March, for a fourth straight annual loss and far worse than the previous forecast for a 19 billion yen loss. "With the plants they have now, they're just not viable," said Christopher Richter, auto analyst at CLSA Asia-Pacific Markets. "They need to get out from under this yen burden."
Source: Reuters

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Peugeot Is In Talks With General Motors on Possible Alliance; Shares Surge

PSA Peugeot Citroen, Europe’s second-largest carmaker, is in talks on a possible alliance with General Motors Co., French Labor Minister Xavier Bertrand said. Chief Executive Officer Philippe Varin informed the minister of the talks yesterday, Bertrand said in an interview with radio station Europe1 today. Peugeot spokesman Jonathan Goodman didn’t respond to calls requesting comment. Peugeot surged as much as 21 percent, the most since at least 1989. “A partnership with GM would make sense, because Peugeot and Opel both lack scale,” said Sascha Gommel, a Frankfurt- based Commerzbank analyst with a “hold” rating on Peugeot shares, adding that Fiat SpA in Italy is also a potential partner. “Peugeot’s in a difficult situation because competitors like Volkswagen and Renault-Nissan can produce much higher volumes and so have a scale advantage.”
Source: Bloomberg

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GM to Gingrich: You Can Put a Gun Rack in a Volt

General Motors Co. launched a new blog Tuesday, and responded to Republican presidential candidate Newt Gingrich's suggestion the Chevrolet Volt is an "Obama car." "You can't put a gun rack in a Volt," Gingrich said in a line that drew cheers at a speech in Georgia this weekend, and is now appearing in his stump speech. "We believe in the right to bear arms and we like to bear the arms in our trucks." GM spokesman Selim Bingol responded to Gingrich on the new GM blog: "Newt Gingrich has taken up saying that 'You can't put a gun rack on a Volt.' That's like saying 'You can't put training wheels on a Harley.' Actually, you can. But the real question is 'Why would you?' In both examples: It looks weird. It doesn't work very well, and, there are better places for gun racks and training wheels — pickup trucks and little Schwinns, respectively."
Source: The Detroit News

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The NADA Story

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with 32,500 franchises, both domestic and international. For more information, visit www.nada.org.

 
Quotable
"... my gut says the automakers continue posting strong sales, even with prices at the pump moving higher."

   
-- Phil LeBeau, CNBC correspondent, on rising gasoline prices, CNBC.com, Feb. 21
 



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