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Inside this issue
Takata to Double Output of Replacement Inflators to 900,000 a Month
Ex-Obama Adviser Seeks Seat on GM Board to Raise Price
GM Faces Roadblocks in Rebuilding Cadillac Brand
Marchionne Says Ferrari IPO Can Be Sold Before He Eats a Bagel
Vehicle Leasing Could Set Record This Year
Falling Gas Prices Don't Always Influence Car Buyers' Choices, Studies Hint
VW Calls on Government to Invest More in EVs
Georgia Steps Up Auto Industry Push With Mercedes HQ, Rumored JLR Talks
Chicago Auto Show: Consumer Appeal is Front and Center
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Top Stories
Takata to Double Output of Replacement Inflators to 900,000 a Month

Embattled supplier under gun to fill backlog

Takata Corp., in a race to meet a huge backlog of orders for replacement airbag inflators, plans to double production to 900,000 units a month by September. Company spokesman Jared Levy confirmed Tuesday that Takata is boosting output of replacement inflators for automakers that have recalled nearly 25 million vehicles since 2008. According to Levy, Takata has completed the ramp-up of two new assembly lines at a plant in Monclova, Mexico. That expansion has raised monthly production of replacement inflators to 450,000 units, up from 300,000 units. Now Takata is expanding again. Levy said the company’s global network of plants will produce 900,000 units a month, without specifying which factories will produce them.
Source: Automotive News
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Ex-Obama Adviser Seeks Seat on GM Board to Raise Price

A former Obama administration auto adviser who helped engineer General Motors’ bankruptcy and bailout wants to join the automaker’s board — with the backing of four hedge funds — and convince the company to buy back $8 billion in shares. Harry Wilson, who was a senior member of the auto task force that pushed GM into bankruptcy in 2009 as part of a $49.5 billion bailout, said he plans to seek election by shareholders to the board at the company’s 2015 annual meeting. He wants the automaker to repurchase $8 billion in stock by mid-2016. The effect of a buyback would be to boost the value of the remaining shares.
Source: The Detroit News

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GM Faces Roadblocks in Rebuilding Cadillac Brand

General Motors' strategy of rebuilding the Cadillac brand has run into twin roadblocks: the carmaker can't persuade enough American sedan buyers to switch from foreign competitors such as BMW or Mercedes, and it can't make enough of its Escalade SUVs to satisfy domestic demand. Even though chrome-bedecked Escalades retailing for more than $100,000 each are rolling every day out of an Arlington, Texas, factory that's been working weekend overtime for months, Cadillac still can't keep more than a few weeks' worth of the big SUVs in stock. By contrast, its dealers are offering discounts of thousands of dollars on the ATS sedan, intended to compete with the BMW 3 series, and on the CTS sedan, meant to rival the Mercedes E-class.
Source: Reuters
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Marchionne Says Ferrari IPO Can Be Sold Before He Eats a Bagel

Taking Ferrari public will be an easy job for the banks handling the offering, said Sergio Marchionne, chief executive officer of the automaker’s parent, Fiat Chrysler Automobiles NV. “It won’t be a difficult placement,” Marchionne said Tuesday in an interview. “I wish they were all like this. The execution of this is going to be very short. We just need to be very focused on which investor base we’re going after and once we do that, you could probably sell it by the time you and I have a bagel in the morning.” Fiat Chrysler is holding a “beauty contest” to select the underwriters and will decide in March or April, Marchionne said. An IPO of the maker of the exotic sports-cars is possible by July and the process should be quick, he said.
Source: Bloomberg
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Vehicle Leasing Could Set Record This Year

For an automaker, a well-structured lease usually depends on payments tied to reasonably accurate residual forecasts of what a vehicle will be worth a few years out. But in the late 1990s and early 2000s, many off-lease vehicles did not live up to ambitiously high residual predictions. Attractive lease payments were predicated on those residual forecasts. Lessors ended up losing money at the back end when predicted and actual residuals collided. Then there’s the issue of what to do with all those off-lease vehicles. Some people worry they’ll soon glut the used-car market. “A burgeoning off-lease supply will increase,” says Jonathan Banks, an analyst for the National Automobile Dealers Association. But automakers run certified pre-owned programs through their dealers for the purpose of managing and remarketing vehicles coming off lease, says Joy Falotico, a Ford Credit executive vice president. “The strength is the CPO program.”
Source: WardsAuto
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Falling Gas Prices Don't Always Influence Car Buyers' Choices, Studies Hint

When gas prices go down, sales of electric vehicles go down too, right? And by the same token, you'd think that lower gasoline prices must mean increased sales of gas guzzlers and decreased sales of electric vehicles and hybrids. But that's not the case, new studies show: Electric-vehicle sales, and sales of high-gas-mileage cars, continue to hold steady, while the current increase in sales of light trucks began before gas prices started to fall. "Nobody is trading in their Nissan Leaf for an Escalade. And vice versa," said Chris Coleman, founder of Carlypso, an online firm that facilitates private-party sales of used cars.
Source: The Los Angeles Times
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VW Calls on Government to Invest More in EVs

Volkswagen of America’s top product executive called on federal and state governments to do more to spur electric vehicle sales and EV infrastructure development at an event [Tuesday]. Joerg Sommer, vice president of product marketing and strategy at VW of America, also announced that the automaker will invest $10 million in EV charging infrastructure by 2016. In a keynote speech at the Electric Drive Transportation Association’s annual conference, Sommer said VW’s investment and those made by other companies should be joined by additional governmental investment to support EVs.
Source: Automotive News
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Georgia Steps Up Auto Industry Push With Mercedes HQ, Rumored JLR Talks

Last week’s announcement Mercedes-Benz expects to complete construction of its new U.S. headquarters near Atlanta by 2018 and press reports Georgia now is pursuing a potential assembly plant project with Jaguar Land Rover refocuses the spotlight once again on the American auto industry’s shift South. New Jersey-based Mercedes-Benz U.S.A. revealed Feb. 3 the exact location of its new nerve center, which will be built on a greenfield site in Sandy Springs, GA, about 15 miles (9 km) north of Atlanta. Mercedes U.S. initially announced the move to Georgia in January after also considering sites in Texas and North Carolina.
Source: WardsAuto
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Chicago Auto Show: Consumer Appeal is Front and Center

The auto show circuit continues in Chicago this week where thousands of consumers might spend the Valentine season falling in love with a new vehicle. The North American International Auto Show in Detroit is a news-making event each year that attracts CEOs of every major automaker and 5,000 media from around the world, while the Chicago auto show is focused on the buying public. Chicago rarely attracts CEOs and features about a dozen vehicle premieres compared with at least 40 global debuts in Detroit. The roughly 3,000 media are largely from North America. Automakers recognize the show as a place to generate news that might have been overshadowed in Detroit and when the doors open to the public on Valentine's Day on Saturday, Chicago really shines.
Source: Detroit Free Press
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Quotable

"A burgeoning off-lease supply will increase."

   
-- Jonathan Banks, executive analyst for NADA Used Car Guide, commenting on predictions that vehicle leasing could set a record in 2015, WardsAuto, Feb. 11

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