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Inside this issue
Trouble Looms as Industry Zooms
GM Must Face Ignition Suit That Spurred Recalls
Fiat-Chrysler Merger Now Awaits Shareholder Buyouts
Nissan Closes U.S. Sales Gap with Honda with Stylish Designs, Discounts
Oil Boom is a Bonanza for Full-Sized Pickups
Hyundai Goes Global with Store Design
Tata Motors Profit Triples on Jaguar Land Rover Sales
Lexus is Putting its Global Marketing Heads Together
Click here for more auto industry news at NADAFrontPage.com. .
Top Stories
Trouble Looms as Industry Zooms

Forecasters: China, jobs, housing market among threats to recovery

As U.S. auto sales and output roar back to levels many in the industry feared they would never see again, leading industry economists and forecasters have a warning: Dark clouds are on the horizon. For starters, how about the specter of road congestion and air pollution curbing auto sales in the world's most explosive growth engine, China? Ford Motor Co.'s senior economist, Emily Kolinski Morris, sees more immediate concerns looming. One problem: New housing starts are still lagging. Homebuilding activity goes hand-in-hand with sales of full-sized pickups. And full-sized pickup sales are a critical source of profits for the Detroit 3. Ford, GM and Chrysler, along with Toyota and Nissan, are poised to square off next year for an intensified battle in the segment -- without the benefit of robust homebuilding. Another problem that more people should be concerned about, the experts said: student loans. Young consumers are so strapped with student loans today that many are forgoing car purchases, warned Yen Chen, senior research economist with the Center for Automotive Research, which hosts the seminars. Chen also pointed to lackluster growth in full-time employment, which also historically drives new-car sales, and the declining employment rate among young consumers, who will be counted on to buy vehicles in the coming years.
Source: Automotive News
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GM Must Face Ignition Suit That Spurred Recalls

General Motors Co. failed to convince a Georgia judge to dismiss a lawsuit over the death of a 29-year-old woman that helped trigger the recall of 2.59 million cars over faulty ignition switches. Cobb County State Court Judge Kathryn J. Tanksley rejected GM's motion to dismiss the revived lawsuit at a hearing today in Marietta, Georgia, and set a trial date for April 2016. The lawsuit, brought by the parents of Brooke Melton, who died in a 2010 crash of a Chevy Cobalt, was settled in September 2013. The Meltons filed a new complaint in May, claiming General Motors fraudulently had concealed defects in the Cobalt and withheld evidence before the accord was reached. General Motors contended the Melton suit couldn't go forward because it was settled. Allowing the new case would mean that anyone could unilaterally redo a settlement, Robert D. Ingram, GM's lawyer, said at today's hearing.
Source: Bloomberg
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Fiat-Chrysler Merger Now Awaits Shareholder Buyouts

Marchionne says sell-off might delay deal, but it won't stop it

Following shareholder approval of the proposed merger of Fiat and Chrysler, Sergio Marchionne now faces an uncertain few months waiting to find out whether he has to postpone the tie-up because too many shareholders want to be bought out. Marchionne, who heads both companies, plans to incorporate the two carmakers into Netherlands-registered entity Fiat Chrysler Automobiles. That would pave the way for a U.S. listing that is key to funding his ambitious investment plan to boost annual global vehicle sales to 7 million by 2018 from 4.4 million last year. Fiat won the two-thirds majority it needed to go ahead with the merger at an extraordinary shareholders meeting Aug. 1. But Marchionne has said he will postpone completing the tie-up if Fiat has to spend more than the 500 million euros ($668 million) set aside to buy out shareholders who are not interested in being a part of FCA.
Source: Automotive News
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Nissan Closes U.S. Sales Gap with Honda with Stylish Designs, Discounts

For more than 25 years, the contest among Japanese car makers in North America has been a two-horse race, led by Toyota Motor Corp. with Honda Motor Co. in second place and Nissan Motor Corp. in the rear view mirror -- trailing far behind. Not anymore. Nissan, thanks to the launch of models that are getting high marks for styling, its wider range of vehicles and aggressive discounting, is catching up with Honda. In the next couple of years it could easily pass its rival in U.S. car sales for the first time since 1987.
Source: Automotive News
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Oil Boom is a Bonanza for Full-Sized Pickups

A housing recovery would be even better

Full-sized pickup sales are rebounding nicely, thanks to the booming oil industry. And pickups sales should get even better when homebuilders open their wallets. "The big missing factor in this recovery so far has been the housing market," Emily Kolinski Morris, chief economist for Ford Motor Co., told an audience last week at the CAR Management Briefing Seminars. Morris and other industry forecasters predict a stronger performance for the segment and overall sales. "As we look a little bit further out, we see the potential for some additional upside, particularly in full-sized pickup sales as the housing recovery eventually catches up with the rest of the economy," she said.
Source: Automotive News
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Hyundai Goes Global with Store Design

U.S. dealers spared for now

Hyundai Motor Co. is rolling out a global dealership design initiative aimed at creating a unified look at its stores worldwide before the end of the decade. The plan comes just four years after Hyundai revamped its design standards for U.S. dealerships under a dramatically different vision, prompting about 470 of the automaker's roughly 820 U.S. dealers to invest millions of dollars to renovate their stores or build new buildings. Hyundai says it won't force its U.S. dealers to adopt the new global program. The new effort, called the Global Dealership Space Identity, was developed primarily for emerging markets and countries where Hyundai has lacked a facility design program, according to company officials.
Source: Automotive News
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Tata Motors Profit Triples on Jaguar Land Rover Sales

Tata Motors Ltd., India's biggest automaker, posted a threefold jump in profit that beat analyst estimates as sales climbed at its Jaguar Land Rover unit. Net income surged to 54 billion rupees ($882 million) in the first quarter ended June, the Mumbai-based company reported today. That surpassed the 37.9 billion-rupee median of 34 analysts' estimates compiled by Bloomberg and was the biggest profit increase since the three months ended December 2010. Earnings were boosted by contributions from Jaguar Land Rover, where profit before tax rose to 924 million pounds ($1.55 billion) on demand for the F-Type convertible and Range Rover SUVs. The luxury unit is helping buoy Tata Motors, which is struggling to revive profitability of the Indian business that sells Tata-brand cars, buses and trucks.
Source: Bloomberg
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Lexus is Putting its Global Marketing Heads Together

Strategy boosts consistency, cuts costs

Lexus has overhauled global marketing to help leverage creative input from around the world, cut costs and deliver more consistent brand messaging. The first vehicles benefiting from the new strategy are the NX compact cross-over that just went on sale in Japan and the RC sporty coupe due in the United States later this year. Before, marketing officers in each country devised their own advertising and brand messaging. They might also pool their ideas in a shared library of marketing content. But that data dump came after they had spent money and time producing the content. Now, global marketers meet up to a year before a vehicle's initial launch to plan product messaging and pick the best content. While the change still allows for tailoring marketing to individual markets, it makes sure all markets tout the same brand message. It also reduces costly overlapping efforts, such as filming vehicles driving along coastal roads in multiple markets.
Source: Automotive News
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Quotable

"However, it will not mark the end of the road."

   
-- Arndt Ellinghorst, ISI Group analyst, commenting on what will happen if the merger of Fiat and Chrysler does not get approved, Automotive News, Aug. 10

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