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Hydrogen deal between GM, Honda getting factory real

Honda and General Motors may take their cooperation on hydrogen fuel cell technology to the next level by opening a joint factory to produce the components. If the plan comes to fruition, the two automakers could open the plant by 2025 at the latest. "By cutting costs with General Motors, we hope to increase our FCV production capacity to help achieve the government's goal," and anonymous Honda official told The Asahi Shimbun. The Japanese newspaper didn't specify where the companies might build the factory, but the plant would allow the automakers to share the expensive costs of mass-producing fuel cells. Honda and GM would continue to independently develop the actual vehicles that would use these components. The automakers teamed up in 2013 to split the massive investment that's required to develop fuel cell components. Despite years of research focused on driving costs down, the amount of money required to build a hydrogen car can quickly add up for any company because of the expensive metals that the fuel cell stacks require, and there's the additional expense of creating technology in this still burgeoning field. By sharing common parts, Honda and GM can lower prices through economies of scale. Both automakers continue to move forward with hydrogen vehicles. For example, the Honda Clarity Fuel Cell (pictured above) launches in Japan this year, and it should help the country's goal to have as many FCVs on the road as possible in time for the 2020 Olympics in Tokyo. Meanwhile, GM has a fleet of fuel-cell test vehicles that has driven over 3 million miles.

Honda exec says US market near capacity, could hurt subprime buyers

Is there a point in the US auto industry where companies should start considering the welfare of their customers ahead of selling more cars? American Honda Executive Vice President of Sales John Mendel thinks that level exists, and we may be getting very close to it.
According to Automotive News, Mendel believes that finding more customers in the market could require pursuing subprime buyers and offering longer-term loans. However, he refuses to use those tactics. While selling models this way can improve things briefly, the strategies hurt resale prices and lower vehicle profits over time. The company won't do "stupid things in the short-term that damage the person who bought yesterday," he said to Automotive News. "It's a very, very short-term tactic especially in the subprime area."
American Honda, which combines the Acura and Honda brands, has seen market share decline from 9.7 percent to 9.1 percent through July 2014, according to Automotive News, and Autoblog's By the Numbers stats showed it posted falling sales in five of the seven months with data this year. Though, Mendel claims that was partially because the company focused on retail sales over fleets. The delays of the launches for the Honda Fit and Acura TLX likely didn't help either.

How new car shortages may impact your buying experience

If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.
With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.
Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.