On January 01, 2013, the Chinese government will be implementing new automotive recall laws to increase consumer protections against lemon automobiles. The laws are likely to created disputes within the market as new regulations increase the accountability of manufacturers when it comes to quality control and documentation. Continue reading
Category Archives: Automotive News
Auto Financing Scam
In 2011, the Federal Trade Commission (FTC) held a series of discussions to explore corrupt practices in the automobile lending market. One abuse that seemed to be particularly prevalent was the “yo-yo scam”. Reports showed that consumer’s dealing with auto finance problems experienced a yo-yo scam approximately 30 percent of the time. Continue reading
US Suzuki Files For Bankruptcy
California based U.S. Suzuki, announced yesterday that they will stop selling automobiles in the United States as a plan to restructure the business. According to Suzuki, slow sales, low foreign exchange rates and expensive state and federal regulatory requirements Continue reading
Advancements In Auto Headlight Technology
The first automobile headlamp was introduced in the 1880’s. It used burning acetylene or oil because the flame was resistant to wind and rain. By the early 1940’s, the first round sealed beam headlamp was introduced and soon became a requirement for all vehicles sold in the United States. Since then the shape has changed, there has been the invention of replaceable bulb construction, halogen infrared reflective (HIR) lighting, and high intensity discharge (HID) lighting. For most, automobile headlamps did not offer much excitement, Until Now!
In 2004, Lexus introduced the first light emitting diodes (LEDs) headlight. The LED not only offered a fascinating assortments of tiny bright light sources, but can be used for multiple functions, such as parking lamps, brake lamps, and turn signals. This allows automobile manufacturers develop headlights that fit in with the sleek futuristic design of today’s vehicles. They also offer lower power consumption and a longer lifespan.
The biggest innovation to come with LED headlamps is the ability to allow automatic headlamp systems. Automatic headlamps have been available since the mid 1960’s, but until now, have only been offered on luxury models. These systems can optimize the headlight beam to the vehicles steering and suspension, as well as weather, visibility, vehicle speed, and road curvature and contour. The driver no longer needs to activate the correct beam for driving conditions because everything is done automatically, allowing the driver to focus on the road.
LED’s have had a dramatic aesthetic impact on vehicle lighting. They can be arranged in countless configurations and combined with reflectors and filters to produce awe inspiring effects. Because they are now manufactured in large quantities they can be found on both inexpensive and luxury vehicles, and are expected to eventually surpass the use of HID headlamps.
New Generation Automobile Buyers
A trend in the automobile industry shows that the younger generation is not as interested in driving as the generation before. Not only are they buying fewer vehicles, but many don’t even have drivers license. Some reasons for this change include:
- The younger generation are more connected through internet and iPhones making them less reliant on owning transportation.
- Many live in urban areas where everything is at a walking distance, there is good public transportation or they have access to car sharing programs.
- Young people are facing soaring tuition costs, and the money they’re earning in their part-time, summer and first jobs is going toward paying for school and rent. Even if they could afford to buy a car, insurance is expensive and gas prices keep rising.
- They have grown up in an era where they have had much more exposure to environmental concerns.
Automakers have known for a while that they were going to have a problem selling vehicles to this generation but are unwilling to believe that they will not want actual cars. As a result, automakers spend more time talking about how well their cars interact with an iPhone than they do about engine performance, ride, and horsepower. Technology such as voice recognition are important to many of the younger drivers because it allows them to safely drive while still staying connected.
They are trying to attract the younger urban buyer by developing a fashionable small car that is easy to park and uses less fuel. Car makers have begun shrinking the size of engines, subtracting cylinders while adding turbochargers to maintain horsepower and acceleration. Smaller engines have become a selling point even in the United States, which would have been unthinkable a few years ago. The idea of electric vehicles has also become more widely accepted.
As these technologies become more common they will also become more affordable, hopefully attracting more buyers. While today’s young buyer seems more open toward the trend of smaller autos with more features, car makers have not abandoned the hope that as this generation gets older and becomes parents they will graduate towards roomier vehicles.
Gas Prices No Longer Affect Auto Sales
Gas prices no longer seem to be as big of a factor when it comes to consumers purchasing vehicles as automobile manufacturers build more fuel efficient cars. August was a perfect example of this as gas prices rose and automakers reported sales also grew by almost 20%. According to analysts, the wide rang of fuel efficient, hybrid, and electric vehicles have made it easier for consumers to spend their hard earned money as the average car and truck on the road reaches over 10 years old. The biggest gains came from Toyota and Honda who experienced low sales last year in the wake of an earthquake and tsunami in Japan. Detroit automakers also showed substantial gains with the introduction of their high mileage car lineup. General Motors (GM) United States sales grew over 10%, driven by strong sales of the Chevrolet passenger cars like the Sonic subcompact and the Spark minicar. Ford also reported an almost 13% increase with the sales of the Focus compact car and the Escape, one of the smallest sub compact sport utility vehicles (SUV) on the market. According to analysts the strengthening industry has surpassed expectations and has helped automobile manufacturers keep inventories stable and sales incentives relatively low.
Europe Auto Industry Restructuring
After a year of the lowest car sales since 1994 and factories operating at ten percent below the profit margin, European automobile manufacturers are being forced to restructure companies by cutting payrolls and closing factories just to survive. But with political resistance to cutbacks, strong unions, and strict labor laws, the question is whether companies can do it fast enough to survive.
In the 2009 recession, France and other European countries spent billions bailing out car companies. Instead of using that money to downsize factories and cut payrolls, it was used to subsidize salaries and offer consumers incentives to buy new cars. With automobile manufacturers back in the same position, they are once again turning to the government for help. But for a recovery plan to work, European leaders need to reconsider a free trade agreement with South Korea. Automobile executives say that these agreements are significantly hurting the industry by allowing Korean automakers to gain a jump in the market share.
The European automotive industry is key to the strength and competitiveness of Europe. The sector not only provides direct employment to more than 2.3 million people but also supports another 10 million jobs indirectly.
May Automobile Sales Rise
Automobile manufacturers reported the sales of new vehicles rose 26% in May compared to last year despite the slow recovery of the American economy. Americans bought over 1.3 million new vehicles last month according to Autodata Corp., giving automobile manufacturers a reason to add jobs and increase production. Analysts say the numbers are distorted because last year major Japanese auto companies were dealing with shortages brought on by the aftermath of the tsunami and earthquake in Japan. This year they posted some of the largest gains. Industry analysts, however, had predicted an even better year over year increases, predicting the annualized sales rate would be 14 million to 15 million. Much of the higher demand for new vehicles is being blamed on the age of existing models on the road. Vehicle registration data shows the average vehicle age at 10.8 years. Better sales, combined with the deep restructurings in recent years, have also resulted in healthy profits for the car companies.
Auto makers expressed confidence the industry will remain on an upward trajectory. “I don’t believe that the employment data in and of itself will have an impact,” according to Ken Czubay, Ford’s U.S. marketing and sales chief. “The dealers are telling me that they had excellent traffic over the weekend. There is significant pent-up demand in the marketplace.”
