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February 1, 2016 FacebookTwitterFlickrRSSSEND TO A FRIENDPRINT
Inside this issue
Iowa Sees a Boost in New Car Sales
Surge in End-of-Lease Cars Seen Pressuring Prices in Record Year
Toyota Halts Japan Output Next Week on Steel Plant Explosion
GM Lines Up Urban Mobility Deals, While Ford Experiments 'Everywhere'
FCA's 2018 Lineup? Here's a Guess
Top Stories
Iowa Sees a Boost in New Car Sales

For car dealers, it’s nearly the perfect storm: Low interest rates, plunging gas prices, pent-up demand and a bevy of new vehicle options promoting safety and fuel efficiency have boosted car sales nationally and in Iowa. National automobile and truck sales reached 17.5 million vehicles in 2015, narrowly beating the previous high of 17.3 million in 2000, according to the National Automobile Dealers Association. In Iowa, new car registrations topped 143,000 vehicles last year, up about 3.2 percent from 2014. Nationally, auto sales were up 5.7 percent from 2014. The trend is expected to continue this year. “Sales seem to be on an upward trend in Iowa,” said Bruce Anderson, president of the Iowa Automobile Dealers Association.

David Ringgenberg, president of Iowa State Bank, said interest rates on new cars have hovered around 3.5 percent to 4 percent. His Des Moines-based bank doesn’t have a high volume of auto loans because car dealers are offering better deals. “With dealer rates at 1 percent to 2 percent, it’s difficult to compete,” he said. He encourages customer shopping for loans to take advantage of dealer offers, he said.
Source: The Des Moines Register
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Surge in End-of-Lease Cars Seen Pressuring Prices in Record Year

A surge in cars and SUVs coming out of leases have analysts predicting pressure on prices of both used and new models, curbing investor enthusiasm over sales records projected for this year. Increased availability of of two- and three-year-old models with modern safety and technological features should pull used-car prices down from record highs and provide more competition for new vehicles. More than 3 million autos will reach the end of their leases this year, a 35 percent jump from last year, according to the NADA Used Car Guide, which uses data from J.D. Power’s Power Information Network. It’s the most off-lease vehicles since 2003, according to Manheim Consulting. To prepare for the increase, many brands and dealers are ramping up their certified pre-owned vehicle programs, which allow them to attach an extended warranty and other perks to late-model used vehicles and sell them at a premium.
Source: Bloomberg
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Toyota Halts Japan Output Next Week on Steel Plant Explosion

Toyota Motor Corp. said it will suspend production at all assembly plants in Japan next week in the wake of a steel factory explosion, interrupting the supply of crucial models including the new Prius hybrid. All domestic assembly lines will halt Feb. 8 through Feb. 13, Toyota said Monday in a statement. The company counts on Japan for more than 40 percent of vehicle production, including all assembly of the Prius and some Lexus models including the NX crossover. Toyota’s Japan shutdown springs from the Jan. 8 explosion at Aichi Steel Corp.’s Chita plant, which supplies specialty steel for engine, transmission and chassis components. The lost output underscores the fragility of the automaker’s supply chain, which was disrupted by Japan’s 2011 earthquake and tsunami, even as it leads the industry in sales. “It’s always challenging to deal with something like this because maintaining a lean production system is Toyota’s goal,” said Koji Endo, an analyst at Advanced Research Japan. For the Prius and some SUV models exported to the U.S., “supply and demand is relatively tight, so if they have to reduce output, that’s going to be a problem.”
Source: Bloomberg

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GM Lines Up Urban Mobility Deals, While Ford Experiments 'Everywhere'

A car company looks out at the city, senses a change in transportation habits and seizes the chance to usher in new modes of urban mobility. That's the short version of what happened in the 1920s, when a young but mature General Motors began amassing struggling urban streetcar systems across the country. The gradual conversion of electric streetcar lines to motorized buses allowed GM -- rather than the electric utilities -- to steer the course of urban mobility over the ensuing decades, even as the company's automobiles helped fuel a flight to the suburbs. GM and its competitors now find themselves at a similar juncture, determined to get on board with changes in technology and demographics that are bringing people back to cities and car-sharing and ride-sharing into the mainstream. The question is how: Buy existing mobility companies or just invest in them? Strike technological and business partnerships or build services from scratch?
Source: Automotive News
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FCA's 2018 Lineup? Here's a Guess

What will Fiat Chrysler Automobiles' U.S. product lineup look like when CEO Sergio Marchionne's new business plan is fully executed? Few details were provided last week, but it probably will appear as though fuel economy targets had been thrown out the window. There will be lots of SUVs, crossovers and pickups, a minivan or two and a smattering of large cars. Unlike 2014 when the company provided granular detail of its five-year product plan, this time Marchionne said FCA is keeping the details to itself.
Source: Automotive News
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Quotable
"With dealer rates at 1 percent to 2 percent, it’s difficult to compete."

   
-- David Ringgenberg, president of Iowa State Bank, on why he encourages customers shopping for auto loans to take advantage of dealer offers, The Des Moines Register, Jan. 29

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