Tag Archives: Automobile industry in California

A Good Time To Get Rid Of Your Used Car

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Shortages in supply and increases in demand have made that fuel efficient used car sitting in your driveway a good investment. Car dealers looking to get their hands on well maintained used cars, especially fuel efficient ones, are willing to pay good money for it. The earthquake and tsunami in Japan continue to affect the supply of compact and hybrid cars, low car sales in 2008-2009, and automobile owners keeping their cars longer have also contributed to the lack of inventory. While the Toyota Prius seems to be the most sought after used car, a 2008 Honda Civic Lx price has increased by $2,000 since January, a 2010 Chevrolet Aveo Ls, by over $3,000, and a 2008 Ford Focus is worth about two thirds of its original sticker price .

WSJ’s Joe White explains in the above video how your can get the best deal when selling your used car.

Chevy Volt Tax Incentives Not Guaranteed

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With the price of fuel on a steady rise, consumers have turned to environmentally friendly hybrid and electric vehicles. The demand for these vehicles is leading to shortages throughout the United States and have resulted in dealership markups, some over $20,000 above the suggested retail price. Government incentives allow a $7,500 tax credit on these vehicles, but consumers may be surprised to find that some Chevrolet Volts found on dealership lots are being sold as “used” and no longer qualify..

A report in the National Legal and Policy Center (NLPC), say that some Chevrolet dealers are selling hybrid cars to other dealerships who are claiming the tax credits for themselves. Mark Modica, and investigator for the watchdog group, claimed that one Chicago Chevrolet dealer was selling a used Volt with only 10 miles on it. GM spokesman, Robert Peterson, says that while they do not encourage these transactions between dealerships, there is nothing GM or regulators can do about it. He does not believe that these transactions are done for the sole purpose of claiming the government tax credit, but are dealerships who are ineligible to sell the new Volts, trying to get these cars for their showrooms. He encourages dealers’ to have patience as the Chevy Volt rolls out nationwide. GM expects to produce only about 10,000 Volts this year, but hopes to increase production to 45,000 in 2012.

Tesla Releases 5.3 Million Additional Shares

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Tesla Motors Inc. has announced that they will be releasing another 5.3 million shares in a secondary public stock offering of $28.76 per share. These shares will be in addition to a private sale of 1.4 million to Elon Musk, CEO and co-founder of Tesla, plus an additional 637,475 shares to Blackstar Investco LLC, an affiliate of Daimler AG. The company hopes to raise about $211 million which will go towards developing their new SUV like vehicle, the Model X.

In June of 2010 when Tesla first went public, the sale was a big success. The stocks were estimated to sell at about $15 a share but ended going up to as high as $19. Just two days after the release, the stock shot up to almost double the first offering. Despite the huge success, the Tesla IPO soon lost it’s momentum.

Tesla is not expected to make a profit for another two years. They currently sell just one vehicle, the Roadster, a sporty electric car popular with the rich and famous. The first public stock offering has allowed them to develop a more affordable model, the Model S, which will be released to the public next year. The company is currently developing battery packs and chargers for Daimler and Toyota, and have been working with Toyota to develop an electric version to the RAV 4. Tesla shares currently remain steady around $27.00.

Alleged Unfair Dealings At Chrysler Grow

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A new dealership group know as “California Superstores” is buying up former Chrysler dealerships in California as a way to beat the high cost of real estate and rebuild Chrysler’s slow market in the United States. Complaints from existing Chrysler dealers say that the alliance between Chrysler and the New York Hedge fund is leading to an unfair advantage for existing dealerships. They have alleged that Chrysler is providing below market rent subsidies that have not been offered to them. Peter Welch, president of the California dealers association, said he is unfamiliar with the terms of the California Superstores venture, but has heard many concerns among existing Chrysler dealers.

California Superstores has already opened six stores in California, and plans to open eight more in areas where Chrysler has done poorly. The plan is to eventually open stores on the East Coast, according to Carlos Hoz de Vila, managing partner of California Superstores.

In an unrelated situation, the state dealers association has brought forward complaints against Chrysler, saying that they are operating an illegal factory owned store at Motor Village L.A. in downtown Los Angeles. The California New Motor Vehicle Board has asked the state Department of Motor Vehicles to investigate the complaint.

Chrysler has recently announced that they have paid back $7.5 billion in government loans allowing them to continued their integration with Fiat, a merger that has been in the making for almost two years now.

New Fuel Economy Window Stickers

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The Environmental Protection Agency (EPA) and the Department of Transportation (DOT) unveiled their new fuel economy window stickers on Wednesday, saying that the new stickers will show the most changes in thirty years. The new labels will allow consumers to compare conventional cars, hybrids and all electric vehicles, giving information on greenhouse gas ratings, emissions, smog ratings, and fuel costs. The new stickers are scheduled to appear on the new 2013 models, but automakers have the option to start using them on on 2012 models as well.

Federal regulators had originally considered using a letter grading system from A to D, comparing fuel economy and air pollution to those of the entire fleet of new cars, but automakers objected, saying that the stickers were too simplistic and potentially misleading to automobile consumer’s. The government instead decided to go with a much busier label with more information and a sliding scale comparing vehicles across classes. According to transportation secretary, Ray LaHood, “These labels will provide consumers with up-front information about a vehicle’s fuel costs and savings so that they can make informed decisions when purchasing a new car.”

The label will also include a Quick Response Code (QR Code) that can be scanned by a smart phone to get information on cost estimates based on a consumer’s driving habits and the price of gasoline and electricity of their area. This information will also be accessible to vehicle shoppers online.

California Hybrid Owners Carpool Privileges

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California has always been a leader in environmentally friendly living. In 2004 we were one of the first to pass a law restricting vehicles’ greenhouse gas emissions and since then the legislation has been extended twice. One of the stipulations of the legislation gave almost 85,000 hybrid owner access to drive in the carpool lanes. On July 1, these get out of traffic free cards are about to expire, and this has hybrid owners protesting

Since the inception of the law, the amount of hybrid, and now electric vehicles on the road have significantly increased. This increase is starting to make car pool lanes more congested especially in the state of California where the percentage of hybrid is now well over 24%. According to state senator, Fran Pavley, one of the original sponsors of the legislation, “An extension of the carpool lane privileges in unlikely to bear fruit.” She says that taking away these privileges ranks right up there with taking away someones firstborn. She added that the legislation should be extended for at least one more year since vehicles that qualify for the new green sticker program do not go on sale until next year.

California Hybrid carpool privileges

Small Cars Profitable For Auto Dealers

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During April, the sales of small fuel efficient cars made up almost 20% of the automotive sales market, that equates to a 19% increase from a year ago. Governments incentives to have more environmentally friendly vehicles on the road as well as rising fuel prices, has led consumers to re-think the buying of big trucks and SUV’s. Some of the big sellers include the new Ford Focus and the Chevrolet Cruze.

The overall industry is expected to report slightly higher sales, as the market continues to recover from the recession. Automobile and automobile part shortages as well as the lack of discounts will be a big factor in consumers decision to purchase new vehicles. Consumers may decide to keep driving their old vehicles until the deals return.

Fiat Increases Ownership Of Chrysler

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On Monday, Fiat announced they will be increasing ownership of Chrysler by 16% for a total 46% of the company. Once the auto manufacturers government loans have been paid, Fiat hopes to take a 51% majority stake in Chrysler as early as by the end of this year.

Sergio Marchionne, chief executive of both auto makers, says that this is an important step towards the integration of Fiat and Chrysler, started under two years ago. The result will be the creation of a global auto maker. They have chosen to speed up the pace to bring about the birth of a single group capable of international activities. Fiat outlined its plans after reaching an agreement with Chrysler’s shareholders, which include the U.S. Treasury Department, the United Auto Workers’ health trust fund and the Canadian government. The move shows that there is confidence in Chrysler turning around and becoming a profitable auto manufacturer. It does not mean Chrysler is fixed, it does show that Marchionne believes it is on track.