Volkswagen Wants to Be Number One

VW wants to dominate the automotive industry with its strong brands by 2018. To demonstrate their confidence in their products, VW AG put on a marvelous exhibit featuring their newest goods from all their brands. Martin Winterkorn, VW's board chairman, announced to the display’s attendees that VW’s brands will help VW meet their goal to become the world's largest automaker in 2018.  With their new strategy, this German company desires to sell ten million vehicles yearly internationally.

Winterkorn believes VW’s strong brands will gain VW a top status. Winterkorn has high hopes for VW as he declared, “Volkswagen has sold 5 million vehicles globally so far this year and plans to introduce 70 new models globally in the upcoming year.”

Their multiple brand approach hopes to gain a sales increase by approximately 60 percent. This auto giant wants to be ahead of Toyota. Toyota's advantage over VW is their powerful position in the U.S. market. VW brands are not as well regarded as Toyota’s. VW’s new strategy will help it be a better competitor against other major automakers. For VW to rise above their underdog position, they need to increase their production in the U.S. I think the auto industry has to keep an eye out for VW. This auto maker has been doing well so far this year and has good management, making them tough competition.

Irene Kalis

http://www.autoobserver.com/2010/09/how-vw-plans-to-rule-the-industry-brands.html#more

Leaders in the Automotive Industry

One of the biggest players in the automotive recently has been president Obama. He has highly invested in the American based car companies, thinking that it will stimulate the economy. One specific action that he took to help the automotive industry was signing the Cash for Clunkers bill. This bill helped the automotive massively. It made thousands of americans drop their old cars and go buy new ones. This all started because Obama signed off on the bill.

I think that Obama has taken huge initiatives to help our economy and especially the automotive industry. He bailed out GMC when they filed for bankruptcy because he knows how many jobs the huge companies create for americans. Jobs range from the actual workers who work at the factories to the corporate managers. The automotive industry is crucial to the american economy and our president realizes that.

Problems for Hyundai?

Hyundai recently recalled 139,500 2011 Sonatas. Hyundai claimed that the steering mechanism may not have been properly tighten, which could cause a loss of control for drivers.

Hyundai cars are a good value for the consumer; they are dependable, efficient, long lasting, and receive high safety and satisfaction ratings. But I think this problem could present a problem for Hyundai considering the recent recall and media scandal with Toyota, and may change the image of the company. When Toyota suffered from reports of defective cars, Hyundai capitalized on it's mistakes and came out ahead as the leading competitor.

Although Hyundai has issued the recall upfront, the Sonata is Hyundai's most highly rated and popular vehicle, and with a recall issued, I think buyers may become hesitant towards Hyundai when car shopping , especially when considering the safety of their families.

The 2011 Hyundai Sonata is a new design, and a new direction for Hyundai, away from their more modest looking body designs. I think this recall puts them on a bad first step into the future. Hopefully they will not be remembered for this mishap, seeing that they did take all measures to prevent potential problems by issuing an immediate recall, yet it is still a setback, especially in a time when consumers may still be hesitant.

Article:

http://blogs.wsj.com/drivers-seat/2010/09/27/hyundai-recalls-as-many-as-139500-new-sonata-sedans/?KEYWORDS=hyundai+recall

"Influence in the Auto Industry"

In different regions around the world there are different preferences for automobiles.  In general, the top automobile companies in the Global Automotive Industry  are Toyota Motor Corporation, General Motors Company, Volkswagen Group, Ford Motor Company, and Hyundai Kia Automotive Group.  These auto makers have a global reputation and the top motor vehicle manufacturing companies.

Among these companies there is great competition, especially because in regards to these companies there is little variation in product.  The automobiles produced by these companies are generally affordable and efficient.  They usually try to appeal to the same customer and manufacture in a specific manner is influenced by today's latest trends.


Patrick Mehlert

Aptera Motors Offers "Wingless Flight" to Drivers

Since the company's founding in 2005, Aptera Motors has been developing high-efficiency road vehicles. The name Aptera means "wingless flight" in Greek, and the company truly lives up to its name with their development of vehicles such as the "2 Series", whose advanced aerodynamics and carbon-construction allow it to get over an estimated 300 miles per gallon. The California based company has been developing various high-efficiency vehicles since 2005 and has already begun accepting pre-orders from in-state residents. The Aptera 2 Series will be a two-seat, three-wheeled passenger vehicle. It is planned to be available in both all-electric and hybrid configurations, at prices ranging from mid-twenty to mid-forty thousand dollars. It features optional roof-mounted solar panels, always-on climate control, and keyless ignition and entry. An in-car touch screen computer serves as entertainment, navigation, and communication system as well, making it just as accommodating as any conventional vehicle. Early crash and crush tests that have been performed on the vehicle also indicate that it is just as safe as conventional vehicles, however this has yet to be confirmed in government safety tests.

With the introduction of the "2 Series" and the announcement of its estimated fuel economy, Aptera now has the most fuel-efficient vehicle currently being developed. It will be available for purchase within a matter of years, and could quite possibly change the face of the automotive industry. More and more automakers are jumping aboard the alternative-vehicle bandwagon and are developing more fuel-efficient and environmentally friendly vehicles. They certainly have some catching up to do, as Aptera's 300 mile per gallon vehicle is one that an ever more scrutinizing market will welcome happily.

Morgan Duff
http://www.aptera.com/

Miles Ahead of Gas

Electric vehicles are becoming more prominent in both the consumer and commercial markets. Consumers want "greener" cars and low gas prices, while commercial fleets look to minimize maintenance costs and fuel costs, as well.

MILES, a smaller manufacturer of electric vehicles, is an emerging company of the electric market. It currently produces two low-speed models, targeted towards different institutions as well as well as the the city-dwelling consumer. A company such as MILES is important for promoting change as companies look to make their fleets more efficient. Since the practical electric car is still out of the hands of the everyday consumer due to low competition and brand new technologies, an expansion of the commercial market allows for R&D to take place at the expense of larger companies who are willing to indirectly fund these startup electric automobile companies.

As MILES continues to expand, their features will only become better, and their pricing more and more affordable (their price is already around $20,000 for a base vehicle). A company like MILES holds a pretty promising future for itself, especially as the demand for these efficient cars continues to rise

Source:

www.milesev.com

Tesla offers cool and environment friendly car

In the past 5 years Telsa has started to put cars on the streets. The Telsa is a high powered fully electric car that is very cool. It is quite expensive though. That is about the only thing that is negative about the car. It is a very attractive looking car that requires absolutely no gas.

This car is more of a luxury car so it has been affecting the luxury car industry. The appeal is that it is a faster sports car and requires no gas. It takes away from the companies like Porche and BMW. This player has offered a new perspective on sports cars. It allows people to have a cool car yet be environmentally friendly. So they can retain two different images at once.

The Tesla as been fairly popular for only being out for 4 years. It is still on the rise, with the rising gas prices I think that it is safe to say that we will be seeing a lot more teslas on the road in the upcoming years.

How Popular is Zipcar?

For the past few years ZipCar has created a name for itself.  Although it has been around since 2000, just recently in the ZipCar has increased its popularity.  ZipCar allows its members to rent from a wide variety of automobiles and pay for their service by the hour or day.  

ZipCar is gaining popularity from the numerous benefits it provides its customers.  Members can choose between any car in the ZipCar fleet.   This allows the members to choose a specific car for a specific reason, for example a large pick-up truck for an individual needs a car for moving.  In addition, ZipCar has been proven to be environmentally friendly, by taking around 15-20 cars off the road and less driving by the its members.

In 2007, ZipCar merged with its competitor Flexcar, to become the world's largest car sharing service.  It has spread across Europe, buying out European car-sharing companies, and has put its name on the global spectrum. As of right now various car-sharing companies are losing out to ZipCar, as ZipCar is either buying out the competition or just acquiring more customers. 

ZipCar is an example of how a company can rise through the ranks of its market in a short period of time.  In ten years ZipCar became the largest car-sharing company in the world.  I think that by the right advertising and options it provides to its members, ZipCar blew away the competition.  Now Automobile Companies are trying to be part of ZipCar's fleet of cars because they know that its a profitable investment.

Patrick Mehlert

http://www.zipcar.com/

http://www.commuterpage.com/carshare.htm

Karma... It Can Be a Good Thing!

Fisker Automotive was founded in the summer of 2007 by Henrik Fisker. Fisker, the chief executive of Fisker, is a well-known designer in the automotive industry. He designed the luxurious Aston Martin DB9, V8 Vantage and the BMW Z8 roadster. He is an eco-friendly minded automaker. 

On April 23, Fisker Automotive received $528.7 million from an Energy Department loan. Now that Fisker has essential capital from the government, they want to produce its Karma by the end of this year. Fisker Automotive challenges other car companies with its new high-performance hybrid, the Karma. Its dazzling Karma is an $87,900 plug-in hybrid car. In the field of electric cars, the Karma appears to be a threat to Tesla, Nissan, and GM. Fisker’s Karma is promising because it’s a slick-looking car and consumers are willing to change their style of vehicle in order to be environmentally sensitive. 

Appealing to people wanting a high-performance car, “Fisker Automotive promises its big sedan, the Karma, will rip from 0 to 60 in under 6 seconds and have a top speed over 125 mph thanks to a plug-in hybrid technology it calls Q Drive.” At “about the size of a Mercedes S-Class”, the Karma will impress those who want an environmentally friendly or/and high performance vehicle. 

Consumers will have to keep an eye out for this car because “Fisker Automotive says its super-luxe Karma plug-in hybrid gets better fuel economy than the Toyota Prius, the reigning EPA MPG champ, and emits less carbon dioxide to boot.” 

This innovative car projects a positive image because it will help bring more jobs to American workers while having a more positive impact on the environment.

Irene Kalis

http://www.popularmechanics.com/cars/news/4291426

http://wheels.blogs.nytimes.com/2010/05/04/fisker-karma-ready-to-roll/

http://www.wired.com/autopia/tag/fisker-karma/#ixzz10J1ThebZ

Cutting Corners on 2011 VW Jetta SEL

Volkswagen restyled Jetta to obey new safety standards and to triple U.S. sales by 2018.  Volkswagen's redesigned Jetta is going to be on sale next month.

The VW of America biggest obstacle to increasing U.S. sales was the cost. The existing Jetta costs a $17,735. The 2011 VW Jetta SEL costs just $15,995. This new model is $1,740 less than the retiring model. This cost cutting is affects the engine of the new model. The new model is going to have an “antique” as an engine. VW was trying to sell more of a car for less money but really it’s selling less of a car for less money.

The styling of the car has also suffered as a result of VW’s cutting corners moneywise. Their car is now criticized for its odd appearance.

There is little improvement to the car in the new version. The new model is 2.9 inches longer and has more legroom than the outgoing model.

As a result of the VW of America wanting to significantly increase its sales by 2018 by saving money on the Jetta, it is hurting themselves in the end. With a less slick exterior and interior, VW will not appeal to consumers even for the cheaper price. I do not see VW meeting their goal in tripling their sales by 2018. In their process of cutting corners, they will not be a good competitor against the Honda Civic and Toyota Corolla. VW displays unethical behavior by cutting corners on such essential equipment in their vehicle. VW is just more concerned about earning money than the actual performance of their car.
Will their cutting corners cost a life?

Irene Kalis

http://online.wsj.com/article/SB10001424052748704644404575481663295463730.html

US Government Wary of Foreign Investors in GM

The US Treasury is concerned with the amount of overseas investors it should allow to buy large stakes in GM through its initial public offering this fall. Currently the Treasury owns a 61% share in the company, and although GM would like to eliminate it's US stake to stop dissuading potential customers, the issue is very complicated as US taxpayers contributed nearly $50 billion to fund GM's bankruptcy reorganization last year. The Treasury would like to hold off on selling its share so the government might break even or possibly make a profit on its investment, but that would probably involve selling smaller stakes of the company over a long period of time. Political fallout could result from a massive sale of one of the country's most prominent companies, but most would agree that it would be best to sell GM off to foreign investors including the company itself. The sale of our governments stake will most likely happen gradually although it might be in our best monetary interest to sell it off completely this upcoming november.


It is important to understand why the government would act against a potentially profitable deal. This act of holding out on selling its share would show that the government wants to support for GM and appear as if they still believe in the possibility of future success for the struggling company. GM's success is as important to many American citizens faith as it is to the nation's economy, and the idea of foreign investors owning a major share of the company is a frightening one. Many citizens believe that selling GM is like selling a part of our nation's culture, while at the same time many others believe that it is within our best interest to unload the company while others are still interested in taking it on. Either way, it would certainly have a big impact on the US car market as it would leave Ford as the only prominent US owned and manufactured automaker left. It will certainly be interesting to see how Ford's sales will be affected by this event and what direction they will take in the future.

Morgan Duff
http://online.wsj.com/article/SB10001424052748704206804575467992376504722.html?mod=WSJ_auto_MiddleSecondHighlights

"Ferrari Recalls New 458 Italia After Some Catch Fire"

Ferrari has recently recalled its new 2010 458 Italia after there have been incidents involving the automobile catching fire.  Ferrari is taking care of this issue with full consideration as it has recalled the vehicle.  This is a another example in the automotive industry of business ethics, in which automobile companies have dealt with their vehicle problems by recalling automobiles.

In Ferrari's case, they had to recall their 458 Italia model due to problems with the engine heat shields.  In addition to the recall the manufacturers have replaced the current engine shields with a more efficient engine shield that uses rivets instead of glue. Ferrari will most certainly take this issue very seriously as the automobile costs around $230,000.

Ferrari is known for providing their customers with the best sports car in the industry.  As a major sports car company and a key player in the automotive industry Ferrari will do anything to keep its reputation at a high. 

http://blogs.wsj.com/drivers-seat/2010/09/06/ferrari-recalls-new-458-italia-after-some-catch-fire/?KEYWORDS=recalls

Patrick Mehlert

Toyota, cares more about morals than money

In July Toyota faced some major problems with their most valuable production, the prius. There had been many cases of unintended acceleration and in some cases some serious injuries. They faced a moral decision. Do they not say anything and keep selling the earth friendly vehicle and keep all the profits or do they do the right thing and recall the car and suffer major damage to their profits, and their future?

Toyota made the right decision and decided to recall the car. This did not come easily though. The cars sales dropped 26% over the past year. This could also be because of the cash for clunkers program that the government installed last year, but they still suffered heavily either way. They had to make a decision that would cost them a lot of money but it was morally the right one to make. Toyota does value doing the right thing and helping people. That is why they have such a big push to help the environment.

The repercussions were dramatic but in the end it was the right thing to do. We do look at toyota in a different way because of the quality of their product. But we do know that Toyota cares about us because they stick to their morals even when the consequences are extreme.

Goals for Tesla

For this week I looked up some of the company values and goals for Tesla, a Silicon Valley based manufacturer of electric cars.

Their mission is the increase the quantity and variety of electric vehicles available to the public. They do not produce or intend to produce hybrids or hydrogen powered vehicles; They are committed solely to electric power.


They employ very innovative technologies, and have designed the most dense battery pack of it's kind available on the market. They pride themselves in being innovative, and adapting to customer demands, as they are a small company and are able to do this. 


While the prices for their vehicles are currently high,(base price is $108,000 for the roadster) Tesla hopes in increase the amount of vehicles in the market, which should eventually come through competitors, in turn lowering the price of production. They are still a small company, so Tesla's prices will remain high for some time.


To account for much of the high price is also the luxury factor. Tesla prides themselves on not only producing an efficient vehicle (88 percent compared to around 20 percent for internal combustion), but also a comfortable one, centered around the demands of the driver. This includes a comfortable ride many of the driver comforts found in any vehicle in the same price range


Tesla is a small and innovative company that has the ability to adapt. They are challenging the status quo and doing what no other company has done before, which is produce a financially successful, all electric vehicle. They started up in 2003, and went public in June of 2010. They've shown that "electric can be awesome"and still sensible, and hopefully their goals and future success will encourage other companies to introduce more models and expand the market.

New Bentley, New Technology

Released yesterday, is the new, lighter 2011 Bentley Continental GT. This 143lb lighter, brand new car is equipped with 6.0-liter twin-turbo W12 engine, hitting 567 hp. The new, thinner yet more comfortable cabin seats have a near heating and cooling technology as well as new, leather lined cup holders. But, what is the best upgrade of all? The interior technology. The new GT boasts an eight-inch touch screen interface with 30GB of memory, and an incredible navigation system with Google Maps. How fast does it go? The newly turbo charged GT goes from 0-60mph in 4.4 seconds and 0-100 in 10.2. It’s max speed is 198mph which is 4 mph less then the 2010. The price hasn't been publicized but is expected to be higher than the previous model.

I wonder whether consumers are going to buy this car without thought, or are they going to take a step back, because of the economic market, and question if the car is really worth it. Are they going to wait until Mercedes Benz, BMW and Lexus come out with their new car for the season?

David Kabakow

http://blogs.forbes.com/hannahelliott/2010/09/07/bentley-unveils-new-continental-gt-coupe/ 

GM's OnStar verses Ford’s Sync

The battle is on between General Motors Co.’s (GM) OnStar and Ford Motor Co.’s Sync. The following year, GM's OnStar will pose tough competition against Ford’s Sync because OnStar may provide free services. OnStar will rival Ford's Sync, which is a “music and information system.”

 GM’s in-car system is “a subscription service that provides accident alerts, directions and vehicle diagnostics.” The improved, upgraded OnStar system will threaten Sync livelihood because it will connect cars to online social networking websites like Facebook and will have a voice-to-text system. OnStar may also link a consumer’s Smartphone to “entertainment and information services” for free. With the significant rise of the use of Smartphones, the auto industry needs to cater to those that have them. OnStar’s new system will attract the tech-savvy, young generation and people in the professional world.

The computer-generation will be keen on the ability to access social networks sites and music on OnStar. This competition between GM and Ford will encourage all manufactures to provide technology to please customers by providing the ability to access music, GPS and internet social networks. The availability of these technologies will play a key role in determining which device a consumer will purchase. Will systems, like OnStar’s updated version, be a must-have in new cars for future generations? Will having social networking sites available to access be too much of a distraction?

Article: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100908/OEM06/100909917/1182#comments

Irene Kalis

A recent study at the University of Michigan projects that in the next 25 years the average US gas car will 74 miles per gallon. This will not only have major impacts on the environment but the automotive industry in general. It is estimated that that the average car would emit 47 tons less carbon dioxide than the average car in 2005. This is not only a great way to help the environment but it will stimulate the car industry also. It will cause masses of people to purchase a new environmentally friendly car. This will not only help the US economy by creating more jobs for the US car companies but it will help the environment.

This is important to the industry because its going to cause serious shifts, people are going to have to sell their old cars and purchase new ones. Once they create these cars then people are going to have to sell or get rid of their old ones and buy the new and improved models. This will help the industry because everyone will want a new car that will save them money on gas. I wonder if it is a good time to invest in these companies now so we can make as much profit as possible over the next 25 years. 

http://wheels.blogs.nytimes.com/2010/09/03/gas-cars-could-get-74-m-p-g-by-2035-a-researcher-says/?scp=1&sq=us%20cars&st=cse

Billy Knutsen

"Ford Is Driven to Cut Debt"

Since 2005, Ford Motor Company has been trying to pull its way out of debt.  Currently, Ford has $27.3 billion in automotive debt, however Ford's Chairman William C. Ford Jr. has promised to get rid of the debt completely and quickly.  After making around 40,000 firings and shutting down around twelve plants to deal with the low demand for automobiles, the company is beginning to hire again to try to rebuild.  In addition to shutting down facilities and the firings, Ford has sold off  numerous of its following brands, such as Land Rover, Jaguar, and Volvo.  Now Ford is focusing on a single the Lincoln brand to try to build off its success and its own.
Ford's actions are important to the automotive industry as it is now relying on the success of only two automotive companies, itself and Ford.  By letting go of its other company's, this business move allows Ford to get out of debt.  As a business student this interests me because it illustrates how a company gets out of debt and why they choose specific actions.

Proposed Regulation in the Auto Industry

A new proposal by the Obama administration call for attaching a letter grade to each new car for sale, based on annual fuel costs and emissions. The intention is relatively clear; provide an incentive for consumers to buy a fuel efficient car and hopefully move from gas to electric. But the idea of assigning letter grades to cars seems a bit ridiculous, considering that fuel economy and vehicle price are already the most important figures to a consumer when purchasing a vehicle. Still, no one can feel very good driving home from the dealership with a big "D-" attached to their car.

If a consumer needs an F-250 diesel pickup truck, they won't expect to see a rating of B+, and thus will not be affected by the rating system. The same idea goes for the purchaser of a new Toyota Corolla, for example, which gets excellent gas mileage at a low vehicle cost (they will expect to see a high grade)  . For these reasons, I feel that it is unnecessary to bring in another government rating system such as the one being proposed (with the intention of dissuading consumers from buying heavy-pollutiong vehicles). Virtually all auto makers have greatly increased fuel efficiency, introduced hybrids, or have made plans to do so. People already demand cleaner vehicles. While I don't think the proposal can do significant harm, I think it's still unnecessary given current demand; competition in the industry alone will make the switch from gas to electric over time. I think the government needs to step back on this one.

Jack Lambrecht

http://online.wsj.com/article/SB10001424052748703369704575461602043868916.html

Vehicle Market in China Growing

Although not quite at the pace of last years sales, major global automakers such as GM, Toyota, and Ford have reported moderate sales increases for the month of August. GM reported that their sales were up 19% from August of 2009, while Toyota reported a 16% increase and Ford 24%. In a month notorious for slow sales in the automotive market around the world, these moderate increases can be viewed as a success for each company. These sales may be due to government offered discounts and incentives, but the important trend to notice is the newly expanding automotive markets countries such as China.

 A senior Ford executive told the Wall Street Journal that he expects 70% of the companies global growth this decade to come from the Asian-Pacific region including markets such as China and India. Newly emerging markets such as China and India are arriving at an opportune time as the critical markets of the US and UK are struggling. Globalization is having a major effect on the auto industry because these new foreign markets help major US based makers to survive in a tough economy. The industry will continue to grow as long as new markets begin to develop and a demand for automobiles exists.

Morgan Duff


http://online.wsj.com/article/SB10001424052748703431604575467272785951934.html?mod=WSJ_auto_IndustryCollection

“Ford Uses Wi-Fi to Customize Cars”

Ford Motor Co. is installing software via Wi-Fi in cars on their assembly line. This software is sent wirelessly into the Edge and Lincoln MKX. This software will provide drivers plentiful customization options. Drivers can tailor their cars to their liking wirelessly without costing the automotive manufacturers money on different parts for the car. This technology enables automakers to provide customization for their buyers without having to pay or having to put together uniquely designed vehicles.

This innovation will attract busy, working people because it offers “Wi-Fi “hotspots” in the cars so passengers using laptops or other devices can tap into the Internet while on the road.” Because their installation procedure is wireless, it reduces labor expenses and does not slow the assembly-line rate. Ford’s new technology will revolutionize the auto industry. Ford is the leading carmaker to offer Wi-Fi hotspots in their vehicles. General Motors Co., Chrysler Group LLC and  Volkswagen AG are planning on following Ford’s lead. The auto industry is moving forward to update their vehicles with more technology-friendly systems. Ford’s technology will spark competition between the leading carmakers. These carmakers will compete to create the most convenient and technology-advanced vehicle.

Options of customization range from “power-seat preferences to how quickly the transmission shifts gears”. This advance feature benefits both consumers and automakers. Just like how Smartphones have weaved themselves into the daily lives of many Americans and have become an important business tool, Ford’s invention may become the new Smartphone. Though this new technology presents itself to be a positive enhancement, will it prove to cause more problems? Will this high-tech new device cause a spike in the amount of car thefts and distract drivers?

Article: http://online.wsj.com/article/SB10001424052748704504204575445642013867472.html

Irene Kalis

Too Early to Bail Out?

General Motors, which hit rock bottom in early 2009, was bailed out at the taxpayer’s expense for roughly $50 billion. In august, GM showed $1.3 billion in profit for last quarter, their best since 2004. And This week, with a new CEO in place, they have filed for their IPO, reentering an already volatile market.  It has not been said what portion of the company will hit the market, but with a $50 billion dollar debt to pay off, it should be a significant amount. 

The U.S. Government currently owns 61% stake in the company. The political tie has dissuaded potential GM product buyers, but plans to go public certainly open opportunities for investors and product purchasers, especially foreign investors, who are expected to snap up large shares of initial offerings for a low price.

We will see what the future holds for GM as it hits the market later this year/early 2011.  Their recent profits look promising, but nothing is certain. The government a intends to keep smaller stake in the company than it currently holds, as to make the best possible return on investment. But if profits are predicted to rise, why pull out now? Sure, taxpayers’ money will be protected, but as for GM financial security, nothing is certain once they enter the market, no longer padded by federal funds.  A flood of foreign dollars into one of the U.S.’s largest production giants may be just what GM and the country need, but only time will tell.

Jack Lambrecht

"Ford Plans 8 New Models to Drive Sales in Growing Indian Market"

August 27th, 2010- Ford Motor Company currently has plans to increase itself into India's automotive market.  To do this Ford will introduce 8 new car models that will expand Ford's reputation in India.  Ford is seizing its opportunity to expand globally and gain from India's rapidly growing car market.  This will be just the beginning of Ford's expansion, John Hinrichs, President of Ford Asia-Pacific and Africa, claims that 70% of Ford's global growth will come from the Asian-Pacific and African regions.  To highlight on some of Ford's recent accomplishments, during the time between April and July 2010 Ford vehicle sales increased to 31,597 vehicles.  In addition, Hinrichs and Ford are predicting that 10-11million people will make the change from scooters to cars which would further Ford's increase in vehicle sales.

As a business student I believe that this issue is very important to the Automotive Industry.  This is one example of how globalization is allowing for domestic automotive companies to expand and grow to foreign regions.  Ford saw its opportunity to expand in India and will gain from its expansion.  It should also be noted that Ford realized that India has a growing economy and their decision will allow them to benefit in the future.  So the question I have is how do competing automotive companies react to Ford's expansion and what consequences (if any) does Ford face by expanding?

Patrick Mehlert

Automotive Sales Raise in China

As the US based companies spread over seas their sales have been erratic. For example GM sold 1.57 million vehicles in China in its 8th months. After a while the sales did start to slow so the main companies started to offer discounts and incentives to help their product. But this back fired because it caused many people to wait even longer to see if there would be a better price. But as US companies keep expanding across the globe their sales continue to rise. Ford sales have risen 32% from a year ago in the African region and 42 % total from a year earlier.

I think that now would be a good time to invest in Ford because the demand for their product is high according to the recent numbers pertaining to their sales. They have to assembly line plants under construction in the Asian Pacific area and I think that with the high demand Ford will come through with the supply and make a large profit. Is now a good time to invest in US based car companies due to global expansion?

Cash for Clunkers = The auto industry in the dumpsters

August 2010 car sales hit a 28 year low of 997,468 cars sold, compared to 1,261,997 cars in August 2009. If you adjust for population growth, August 2010 had the lowest car sales since World War II. Why? It depends on whom you ask; In my opinion, it has to do with Cash for Clunkers, along with the current economic recession. Last year Cash for Clunkers ran from July 1^st, 2009 until August 24^th, 2009, and gave the public a $3500 or $4500 credit if they got rid of their 25 year old car for a new and more energy efficient car. The program resulted in around 680,000 cars traded in for new ones. One year later, those 680,000 customers don’t need a new car.

It was obvious that there was going to be a dip in car sales if the government gave the public an incentive to trade in their car in a one month period.  Usually, people sell their cars and then buy new ones throughout the year, but since there was an incentive for only one month, everyone rushed in to trade.

Should there be another government program like Cash for Clunkers for those who missed it in 2009 and to re-stimulate the auto industry until the economy gets better? Or would that just make the car industry dependent on government funding?

David Kabakow