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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

Mazda, Suzuki, Yamaha — more vehicle data fabrication found in Japan

TOKYO — Mazda, Suzuki and Yamaha improperly tested vehicles for fuel economy and emissions, the Japanese government said on Thursday, revealing fresh cases of compliance failures by manufacturers. The results came to light after the Japanese government had ordered the automakers to check their operations after revelations of improper testing at Subaru and Nissan last year. The conduct of automakers globally has come under intense scrutiny after Germany's Volkswagen AG admitted in 2015 to installing secret software in hundreds of thousands of U.S. diesel cars to cheat exhaust emissions tests, and that as many as 11 million vehicles could have similar software installed worldwide. In the Japanese cases, the carmakers have not broken any laws or prompted massive recalls. But a growing list of improprieties has tarnished the image of the country's manufacturing industry for high-quality products and efficiency. Suzuki, Mazda and Yamaha cleared vehicles for emissions or fuel efficiency even in cases where they were tested under invalid conditions, the ministry said in a statement. The errors related to slight deviations in the speed of the vehicles during testing that should have invalidated the test results. The automakers examined tests they had conducted over different periods of time, and in Suzuki's case they stretched back to 2012. None of the automakers found significant problems with actual emissions and fuel economy performance of the vehicles, which were destined for sale in Japan, and do not plan any recalls. Suzuki, Japan's fourth-largest automaker, said that of 12,819 sample vehicles tested for fuel economy and emissions since June 2012, around 50 percent of them had been inspected improperly. "I deeply apologize and will lead efforts to prevent recurrence," Suzuki Chief Executive Toshihiro Suzuki told a news conference. Mazda said there were irregularities in 4 percent of similar inspections on its cars, or just over 70 vehicles. In Yamaha's case, irregularities were found in 2 percent of inspections, or just a handful of vehicles. Both Mazda and Yamaha apologized. Suzuki and Yamaha shares fell 6 and 5 percent, respectively, and Mazda shares were down 1 percent, underperforming a steady benchmark Nikkei average. In July this year, Nissan admitted it had improperly measured exhaust emissions and fuel economy for 19 vehicle models sold in Japan.

Mazda3 sales off to rocky start despite massive critical acclaim

Like just about every other auto publication we've seen, we loved the way the Mazda3 drove when we reviewed it a few months ago, but those glowing reviews apparently aren't helping its sales. The new compact may be falling victim to a sales war between the Toyota Corolla and Honda Civic, with the newcomer getting squeezed out by those with more established names and bigger marketing budgets.
According to Automotive News, Mazda3 sales have fallen every month since last August, and its sales are down 27 percent in the first two months of 2014. It certainly isn't helping that the entire compact segment is down five percent this year as well.
The biggest problem for the new model seems to be its price compared to rivals. Mazda is not offering the incentives that are on the hood of competitors. With the previous generation, the company offered more than $2,700 on the hood to move them out, but the current model only carries about $1,233 in markdowns, according to AN.