New-car Dealers Increase Security. Precautions taken in wake of eco-terroists
attacks that target sport utility vehicles

New car dealers across the country are facing higher insurance premiums
and security costs in the wake of recent attacks by radical
environmentalists at dealerships selling sport utility vehicles. Extreme
environmental groups are suspected of being behind the torching of SUVs
at four dealerships in California last month. In the most recent
incident Friday, 12 SUVs were damaged at Land Rover Santa Fe in New
Mexico. Charles Henson, president of the New Mexico Automotive Dealers
Association, said vandals stenciled words like "avarice" and "gluttony"
onto the vehicles. They also sprayed expanding insulation foam into the
tailpipes, causing serious exhaust system damage. The FBI and local
authorities are investigating. Henson said characteristics of the attack
were consistent with the Earth Liberation Front, a radical environmental
group that was behind the vandalism in California, but the ELF has not
claimed credit for the Sante Fe incident. At least 10 dealers have been
targeted in similar attacks since mid-2001. Many retailers are taking
precautions to ward off future attacks and better insulate themselves
from property damage. "A lot of dealers are reading their insurance
policies very carefully," said Carl Ragsdale, chief operating officer
for dealer services at the National Automobile Dealers Association. Car
dealers expect security and insurance expenses to climb because of the
attacks, which could mean higher consumer prices for repairs, service
and even new cars or trucks, some dealers say. "If dealers' overhead
goes up, they have to pass it along to the customer." said Peter Welch,
executive vice president of the California Motor Car Dealers
Association.
(Source: The Detroit News)


August is Best Month of 2003 – But Don’t Tell that to Big 3

August was the best month of the year for sales of new cars and light
trucks, but auto people weren't dancing in the streets in Motown. As in
the joyless Mudville of long ago, mighty Casey (the Big 3) struck out.
Consider these August happenings:

-U.S. sales of 1,631,143 new vehicles were down 4.4 percent from last
year's 1,705,647. But Big 3 sales were down 9.3 percent. Conversely,
Toyota Motor Sales U.S.A. Inc. was up 7.4 percent; American Honda Motor
Co. was up 7.3 percent; and Nissan North America Inc. was up 10.1
percent.

-Ford and Chevrolet were third and fourth in car sales behind Toyota
and Honda.

-Toyota has been the leader four times this year, but Toyota and Honda
have ranked 1 and 2 only once before, in December 2001.

The August decline of Chevrolet and Ford to the third and fourth places
in car sales was a shock, but not an unexpected one. In recent years,
the Big 3 have preferred to focus their efforts on pickups and SUVs.
Toyota and Honda are strong in those segments, too, but they are even
stronger in cars.
(Source: Automotive News)


DaimlerChrysler to Weigh Possible Job Cuts at U.S. Unit

Senior executives of DaimlerChrysler AG will meet today in Germany to
review options for shoring up its U.S. arm, including the possibility of
job cuts, people familiar with the matter said. A decision on any major
measures, however, may not come until the end of the month when the
company will have a clearer picture of the Chrysler division's
third-quarter performance, these people said. Hurt badly in the bitter
price war with U.S. rivals General Motors Corp. and Ford Motor Co.,
Chrysler reported a $2 billion operating loss for the second quarter. A
large part of the loss stemmed from an accounting measure that lowered
the value of cars sitting in dealer inventories, a move that was
supposed to enable Chrysler to keep pace with the rebates and financing
deals GM and Ford have been offering. Chrysler also promised to
accelerate cost-cutting measures and to reduce its head count by 2%
during the next six months through attrition. But Chrysler's sales
continue to lag behind. In August, its U.S. sales fell 6% to 190,388
vehicles, pulling its market share down to 11.8 %, its lowest level in
15 years. The company was also supplanted by Toyota Motor Corp. as the
third-largest car maker in the U.S. market, behind GM and Ford.
(Source: The Wall Street Journal)


Racy Rides Auto Dealers Learn that Customizing Can Speed Sales

Fast and flashy cars have caught the attention of auto manufacturers and
dealers, and they're racing ahead with new models and accessories. "The
manufacturers are going to sell what the public wants," said Bill Morie,
president of the Georgia Auto Dealers Association. Sales of after-market
car parts exceeded $180 billion in 2002, $27 billion of which was spent
on performance parts and accessories. “Tricking out” cars with hip
hoods, fender flares and decals is a big business, and auto
manufacturers and dealers want in. "There is a whole market developing
in dealer customization," said Skip Potter, a vice president of the
Automotive Aftermarket Industry Association. Car customizing can be as
simple as replacing the stereo or a new paint job, or as complex as
upgrading the exhaust or installing nitrous-oxide systems. Such options
were once available only from auto repair shops and high-performance
centers. The new trend is to provide accessorized cars on the lot, Mr.
Potter said.
(Source: The Augusta Chronicle)


U.S. Car Sales Put Europe to Shame

Booming car sales in the U.S. in August make an interesting contrast
with miserable conditions in most European markets. For instance, in
August French new car sales declined 14.2% year-on-year while those in
Italy fell by another 5%. Spanish sales and U.K. sales were up, but just
a touch at 3.6% and 2.4% respectively. The mixed European picture, made
gloomy by low consumer confidence and weak economic growth, contrasts
with an emerging view that the volume car sector looks undervalued. A
market recovery could be in sight for Europe next year, but that doesn't
mean profits of Europe's volume carmakers will be heading for better
times. Meanwhile U.S. market sales soared in August. Of course, everyone
knows the main reason U.S. light car sales are so high is that
incentives offered to consumers are at record levels - though with
earnings of the big three U.S automakers still a shadow of what they
were just a few years ago, incentive logic may be starting to lose
momentum. But perhaps not just yet, for though GM (GM), Ford (F) and
Chrysler (DCX) face a variety of self-made problems they also face one
big common enemy: the importers. The same import worry argument runs
true in Europe. It's not on the scale of the U.S., but it remains a
situation that European carmakers need to watch. So far Europe has
escaped the scale of the U.S. incentive battle, but it should remain
braced for something similar in the months ahead.
(Source: The Wall Street Journal)