2007 Jeep Grand Cherokee Laredo on 2040-cars

Auto blog

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.

Weekly Recap: GM scales back as Russian auto market teeters

General Motors' extensive plans to scale back its Russian operations are the latest sign the automotive market in the former superpower is collapsing – and there are few signs of recovery. GM said Wednesday it will stop selling mainstream Chevrolets and shutter the entire Opel brand in Russia. The moves leave GM with a luxury-focused presence consisting of Cadillac and Chevrolet's Corvette, Camaro and Tahoe. The cutbacks will be completed by the end of the year. The automaker will also idle its factory in St. Petersburg and end a contract-assembly agreement with Russian manufacturer GAZ. "We had to take decisive action in Russia to protect our business," Opel Group CEO Karl-Thomas Neumann said in a statement. "We confirm our outlook to return the European business to profitability in 2016 and stick to our long-term goals." GM is the latest automaker to scale back in Russia as the economic conditions, volatile currency and uncertainty over the conflict in the Ukraine all have sandbagged new car sales. Last month, vehicle sales collapsed 38 percent in Russia to 128,298 units, according to the Association of European Business, which records sales. Joerg Schreiber, chairman of the AEB automobile manufacturers committee, didn't even feign optimism in a statement announcing the figures. "The market is entering a very difficult phase now, and February is only the beginning," he said. "Industry sentiment is the next few months will be extremely difficult and the market bottom has yet to be found." The dovetails with industry experts, who predict the Russian auto sector will remain in the doldrums. IHS said earlier this year it expects Russia's sales to slip to just 1.8 million units in 2015, which is a 40-percent drop from 2012. Other News & Notes Chief leads Jeep's Easter Safari stable Jeep is bringing seven attention-getting concepts to Moab for its annual Easter Safari off-roading celebration in Utah, but the Chief is perhaps the standout of the group. It salutes the 1970s Cherokee with a throwback appearance and surfer styling cues. The Chief has a custom modified razor grille made famous by the Wagoneer, and it rolls on 17-inch slotted mag wheels. The surf theme comes in with ocean blue paint, floral cloth and leather seats and a tiki-style shifter handle. Based on the Jeep Wrangler, the Chief has removable sides, a 3.6-liter V6 engine and a six-speed manual gearbox.

$40M award for boy's death in Jeep fire upheld by Georgia high court

The Georgia Supreme Court on Thursday unanimously upheld a $40 million award to the family of a 4-year-old boy killed in 2012 when the 1999 Jeep Grand Cherokee in which he was riding was rear-ended and burst into flames. A lower court in 2015 reduced a jury verdict from nearly $150 million to $40 million. Fiat Chrysler spokesman Michael Palese said the company was "disappointed in this decision. We are considering our legal options." The Jeep's fuel tank was placed near the back of the vehicle, which plaintiffs said made it vulnerable to rear-end collisions. The Supreme Court ruling said "evidence showed that Chrysler had long known that mounting a gas tank behind the rear axle was dangerous. Evidence also showed that Chrysler's placement of the gas tank behind the rear axle was contrary to industry trends, which favored placing tanks in front of the rear axle." Fiat Chrysler lawyers said during the trial that the fire did not cause Walden's death and blamed the driver of the pickup truck that hit the vehicle. The company said Thursday it "continues to extend sympathies to the family of Remi Walden for their loss." On appeal, the company contended it was prejudicial to raise Fiat Chrysler Chief Executive Sergio Marchionne's compensation, which totaled more than $68 million, according to a company executive who testified at trial. The automaker had denied there was a safety issue and has said the vehicles were no more dangerous than comparable SUVs built at the time. The National Highway Traffic Safety Administration (NHTSA) linked more than 50 deaths to the Jeep fuel-tank issue. Under government pressure, Fiat Chrysler recalled 1.56 million 2002-07 Jeep Liberty and 1993-2004 Jeep Grand Cherokee SUVs in June 2013 to address fire risks and agreed to install trailer hitches to protect the gas tanks. The recall and a "customer satisfaction campaign" that covered the Jeep in the fatal Georgia crash occurred after Marchionne held private talks with senior U.S. Transportation Department officials in 2013. The Georgia Supreme Court opinion said the award was proper in part because Marchionne was "alleged to have specifically interjected himself in a federal safety investigation to the detriment" of the Walden family. In 2015, NHTSA announced Fiat Chrysler would pay a then-record $105 million civil penalty over lapses in safety recalls involving millions of vehicles, including older Jeep SUVs for fire risks. Reporting by David ShepardsonRelated Video: