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Trucks, SUVs drive U.S. October new vehicle sales

DETROIT — Major automakers posted mixed U.S. new vehicle sales in October on Wednesday, though America's love affair with high-margin pickup trucks and SUVs remained in full bloom as larger, pricier vehicles fared better than passenger cars. Auto industry publication WardsAuto put the seasonally-adjusted annualized rate (SAAR) for light vehicle sales in October at a robust level of 18 million units. But after a long boom cycle, carmakers are still ill-prepared for the slight decline in sales anticipated for full-year 2017 and have taken too few steps to trim production, said Doug Mehl, a partner in consultancy A.T. Kearney's automotive practice. "When you make a new vehicle, you have volume assumptions tagged to it, and who wants to be the guy who says, 'I'm going to make less of this really cool model'?" Mehl said. "But eventually the market is the reality, and it's going to force companies one way or other here." General Motors GM reported a sales drop of 2.2 percent for the month, with consumer sales down 6.6 percent. But sales of high-margin pickup trucks, sport utility vehicles and crossovers all rose. GM also cut its inventory of unsold vehicles — a source of concern for the market — slightly. The automaker has worked to reduce its volume of excess inventory, including through significant production shutdowns in the third quarter. GM had said its inventory would rise in October. "We are heading into the fourth quarter with good momentum, thanks to a strong U.S. economy and very strong pickup and crossover sales," said Kurt McNeil, GM vice president for U.S. sales operations. GM slightly reduced consumer discounts as a percentage of average transaction prices to 13.5 percent, from 13.7 percent in the third quarter. Industry experts believe consumer discounts above 10 percent of the average transaction price are unhealthy as they erode resale values and are unsustainable in the long term. Consultants J.D. Power and LMC said last week that based on preliminary October sales numbers, discounts have exceeded 10 percent in 15 of the past 16 months. Ford The U.S. auto industry posted record sales of 17.55 million vehicles in 2016. New sales received a strong boost in September as consumers replaced vehicles damaged in southeast Texas by Hurricane Harvey the previous month. Full-year 2017 sales are expected to be slightly lower than 2016.

In Jamaica, it's not easy to sell or buy hybrid cars

Jamaica's mellow reputation and Rasta vibe contributes to an international reputation of an island nation that moves at a leisurely pace. And the term "leisurely" certainly applies to the rate of sales of hybrids there. And we thought Mitsubishi i sales in the US have been slow. The country's Toyota dealership is still in the process of explaining hybrid technology to many of its prospective customers, with the widespread perception remains that a standard Toyota Prius needs to be plugged in for electrical charging, the Jamaica Gleaner reports. Because of such slow exposure, Toyota has only sold about 10 hybrids in Jamaica since the Japanese automaker started selling them there in 2010. And we thought Mitsubishi i sales in the US have been slow. Toyota dealers in Jamaica continue to tout hybrid technology that can boost fuel economy by about 30 percent but are going up against the fact that Toyota's hybrids now need to be pre-ordered and aren't kept in stock because of sluggish demand. There's also the fact that Toyota's Japanese operations insist on an approval process that ensures the hybrids sent there can handle Jamaica's road conditions, and it typically takes three to four months for a Prius to get to Jamaica once ordered. Island locales provide a curious dichotomy for advanced-powertrain vehicles. On one hand, the driving distances tend to be relatively small, lengthening the amount of time it takes to pay back the original cost premium. On the flip side, importing fuel to islands makes gas prices skyrocket and can prove costly for the economy in island nations. Late last year, for instance, the government of another Caribbean nation, Barbados, estimated it spends about $250 million a year on gas used for personal vehicles. That's why the government there is pushing for more electric-vehicle adoption, though the number of EVs on the island was in the low double-digits as of mid-2013.

Toyota prepped to spend $1.3B on plants in Mexico and China

Toyota is getting set to expand its manufacturing operations in a big way, with a pair of sources reporting to Reuters that the company was preparing to make a roughly $1.3-billion investment to add two new factories in China and Mexico. If Reuters sources turn out to be correct and the company's upper management decides to greenlight the two new factories, Toyota's annual output would grow by 300,000 units per year. Two-thirds of the capacity would come from the new Mexican factory, where the company may produce the next-generation Corolla, due in 2019. That facility would be in the state of Guanajuato, in the central part of the country, the sources told Reuters. The Chinese factory, meanwhile, would likely be built in Guangzhou, and may become a source of Yaris production sometime in 2018.