Friday News Mashup
By: Michael Fox
Friday May 25, 2012
Since its Friday we’ll start with this; a truck driver was put in jail overnight for having “Truck Nuts” on the hitch of his…yep, truck. The truck driver was pulled over by a sheriff in South Carolina for donning the Truck Nuts. After which it was discovered that the driver did not have a driver’s license and was given a citation for the Truck Nuts and a night in the county lockup for the lack of a license. Now I am no fan of these bizarre accoutrements, but I am a big fan of the constitution and this arrest seems way out of line because of how everything went down. Also, where is the outrage from those who claim that profiling is should be illegal? Anyway, I think the sheriff is nuts and should be given a citation! In other news, General Motors stock has been in a rut for almost a year with no improvement at all and the U.S. government is stuck with 26% ownership. It has decided not to sell the shares it owns because it would be at a loss; a loss of $15 billion. Yikes! That means the stock price would need to double from its current price of $22 per share. In GM’s best days their shares were pricing at $75 per share and I don’t see those days coming back anytime soon. Meanwhile Ford and other auto makers are showing profits and rising stock prices. Turning to Cars and TV, we have 2 items on that front. First, Jerry Seinfeld is working on starting a project called “Comics and Cars” where he would basically sit around with his friends talking about cars and such. That should resonate with the average American. Wealthy, Hollywood types sitting around pontificating about cars that the other 99% of us can’t even afford to look at let alone purchase. Next, and here is something we can all sink our eyeballs into; “World’s Wildest Police Videos” is coming back to TV on the Spike network Monday nights. The creator is the son of the mastermind behind the show “COPS” and we all know you watch it. You may not admit it, but you do. This show features real-life dash cam video from police cars all over the world. So grab a beer, or whatever you prefer, sit back and watch someone have a bad day and maybe you will have a better view of yours…that is unless you are on the show.
As Detroit Auto Goes, So the Economy Goes
By: Michael Fox
Thursday May 24, 2012
Auto makers are adding extra shifts just to keep up with demand. Demand for new cars and parts for used cars is on the rise and auto manufacturers are scrambling to keep up. Ford has announced that they are adding a third shift to their EcoBoost engine plant in Cleveland, OH and Hyundai has added a third shift as well in their Montgomery, AL plant. The extra shift at Ford will not necessarily add jobs to the economy but it will preserve them. The 250 workers will be coming from another plant that has finished production; so while it is a wash for the workers, it is still a positive for the U.S. economy. The Hyundai plant on the other hand will be adding 3,000 workers to their payroll which will increase output by 20,000 cars per year. Now that is a big deal for the American workforce and a big deal for the auto transport companies. More cars mean more sales and more sales mean more money moving through the economy. All of these and other positives have allowed Detroit to stake claim as the auto industry capital again. The big 3 (Ford, Chrysler and GM) are showing strong recoveries and profits. It should be noted that GM was given an unfair advantage by having the taxpayer bail them out. This also shows that companies don’t need help from the government or the taxpayer to recover from and downfall. Ingenuity and talent are what it really takes and Ford and Chrysler have shown that to be true to the greatest degree. We love our cars and we live and die by the auto industry here in America, so it is good to see them starting to regain their former glory. This is also good for Americans emotional state when it comes to the economy since our spending habits are directly tied to our emotions which are directly tied to how well our auto industry is doing.
What Will It Take To Trade-In Your Car?
By: Michael Fox
Wednesday May 22, 2012
Following up on the Used Car article from yesterday is the question of what it will take for a car owner to trade in their current vehicle. There is currently a reservation among owners to keep their current vehicle rather than trade it in. There is a sweet spot for consumers that falls right between having equity but not so old that they have to start making repairs. This is what the dealers are looking for and they are willing, if you are savvy enough, to make great deals for those cars. See, there is almost 3 times the profit on a used car sale than on a new car sale which is why the dealers want your used car. So what will it take for a dealer to get you to trade in for a new car? The current consensus is a great car that the buyer wants, at or below what they are currently paying monthly, a year or two of free maintenance and a real reason to start over with monthly payments. Most people would really like to own their car and not have monthly payments; if only for a year or two before they trade in. Dealers must be willing to go the extra mile and even pay a premium for trade-ins with low mileage, an original owner and no accident history. Since dealers are hurting for used car inventory, they seem more than willing to oblige those car owners in the so called sweet spot. There might be another thing the dealers could do to help boost trade-ins and that is to reduce the amount of time people wait after they strike a deal to actually get all the paperwork and such done. For some reason it takes 30 minutes to an hour for the dealership to finish the process once you and the salesman reach an agreement. That is a long time to wait and every minute that ticks buy is another minute the customer has a chance to change their mind. Close that gap and watch your closure rate go up.