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Inside this issue
Easier Credit Should Keep Auto Sales on Track
Auction Prices To Continue Slow Descent; Pickups Prove Outlier Once Again
Toyota Investing $200 Million at 3 U.S. Plants
Ford Outlines New China Investments
Backup Camera Rule for Cars in U.S. Pushed Back to 2015
Mad Men's Auto Characters Are Fiction, but Loosely Based on Reality
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Easier Credit Should Keep Auto Sales on Track

Easier credit, even for risker subprime borrowers, has fueled what should be the U.S. auto industry's best year since 2007, but there is little danger that consumers are overextending themselves, according to data from a credit-monitoring firm. “I think most people agree it's very healthy. The growth still seems to be rather well managed,” said Melinda Zabritski, senior director of automotive credit for Experian Automotive. “From what I am hearing from the lenders, (there is) a very strong sense of optimism.” But more buyers are financing their new vehicles over longer terms, between five and seven years. That trend could present problems for those consumers if they want to buy again in three or four years because they will owe more than their vehicles are worth. For now, the good times are rolling. U.S. industry sales have increased 8.2% for the first five months of this year and are expected to top 15 million this year for the first time since 2007.
Source: Detroit Free Press

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Auction Prices To Continue Slow Descent; Pickups Prove Outlier Once Again

As overall auction prices are expected to drop this week, large pickups are once again, proving to be an outlier. In fact, as used-vehicle prices are expected to drop by an average of .2 percent, or $25, relative to the two-week average, large pickups should rise by .8 percent, or $175, according to AuctionNet data from NADA Used Car Guide. This may not come as a surprise to the industry, though, as increasing construction rates have helped large pickups retain value in the lanes this spring. Though large pickups are far ahead in terms of price increases, luxury cars are also expected to see a slight .3-percent, or $75, lift this week. Moreover, midsize vans are expected to strengthen by 0.7 percent, or $100. Wrapping up the increases, compact utility and midsize car segments are positioned increase by a slight $25 apiece. “In terms of declines, decreases should be rather mild this week,” NADA UCG said.
Source: Auto Remarketing
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Toyota Investing $200 Million at 3 U.S. Plants

Toyota Motor Corp., the world's largest automaker by vehicle sales, said it's investing $200 million at three U.S. plants. The spending includes $150 million at a Huntsville, Alabama, engine plant, according to an e-mailed statement yesterday. Toyota is also investing at factories in Troy, Missouri, and Jackson, Tennessee, which supply the Alabama facility. The automaker, based in Toyota City, Japan, saw its U.S. vehicle sales rise 5.2 percent this year through May, less than the 7.3 percent industrywide sales increase. Toyota has spent about $2 billion in North American manufacturing investments the past two years. The plans disclosed today are to boost machining capacity and engine part output for V-6 engines. Toyota will complete an expansion of the engine plant by early 2014. The machining project announced today is scheduled to be completed by July 2015.
Source: Bloomberg
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Ford Outlines New China Investments

Ford Motor Co. on Thursday disclosed plans to build a new automobile engine plant in China with commercial-vehicle partner Jiangling Motors Co., and committed to building new sport-utility and commercial vehicles with Jiangling as well. Ford didn't say what the new vehicles would be. Ford currently makes the Transit van for the Chinese market with JMC. Earlier this year, Ford said it increased its stake in Jiangling to 31.5% from about 30%. The announcement came the same day Ford opened a new $500 million plant in Chongqing with another other Chinese partner, Changan Ford Automobile Ltd., that will make 1-liter and 1.5-liter engines for passenger cars, as the company continues to pour resources into China. Chief Executive Officer Alan Mulally has been sweeping through Asia, announcing expansion plans in India and China, as the company seeks to push the region from 15% of total sales today to 40% by 2020. The efforts come as there are growing signs that China's economy is slowing.
Source: The Wall Street Journal
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Backup Camera Rule for Cars in U.S. Pushed Back to 2015

A rule that would require backup cameras in new cars sold in the U.S. is being delayed until 2015 as regulators consider giving incentives in their safety ratings to vehicles containing that technology. U.S. Transportation Secretary Ray LaHood, who plans to step down once his replacement is confirmed, announced the delay today in a letter to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va. More analysis of the rule's cost, which the agency had said would be $2.7 billion or as much as $18 million per life saved, is necessary before issuing the mandate, LaHood said in the letter. The agency had previously delayed the rule three times, most recently missing a Dec. 31 deadline. Automakers have complained about the rule's cost and that as proposed it would apply to all vehicles, while they say it makes sense only for larger ones.
Source: Bloomberg
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Mad Men's Auto Characters Are Fiction, but Loosely Based on Reality

Maybe some auto executive or dealer really ticked-off a writer on Mad Men at some point and now that writer or producer is exacting revenge. That's how it seems when the series repeatedly bashes folks in the auto industry, often taking misguided stereotypes to an extreme. Sunday it was Chevrolet executives turn to get pummeled when fictional ad agency executive Ken Cosgrove referred to the Detroit car executives he worked for as, "Fat yahoos in cheap suits." Cosgrove begged an agency partner to take him off the lucrative Chevy account even though it might set his career back. He had good reason. Turns out the "yahoos" had taken him hunting and accidentally shot him in the face, leaving him injured with a patched eye. In real life, Chevrolet had Campbell Ewald as its ad agency of record for nine decades until it lost the $600 million account in 2010. But this hunting incident isn't entirely fictional. In 1959, retired General Motors President Harlow "Red" Curtice shot and killed retired GM Vice President, Harry Anderson, in a duck-hunting accident.
Source: Automotive News
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Quotable
"Banks have money ... and from what I have seen ... banks have looked to autos as a segment that has held up extremely well." 

     --- Reid Bigland, Chrysler's head of U.S. sales, commenting on easier credit fueling what is predicted to be the auto industry's best year since 2007, Detroit Free Press, June 20


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