Author :

Donna Messer

Donna Messer is a networking expert. She is the author of “Effective Networking Strategies” a Canadian Best Seller. Donna is a motivational speaker, addressing audiences on three continents. To reach Donna or get a copy of her book - www.connectuscanada.com

Last year was a tough one for the auto industry. Not only did we witness massive government
bailouts, epic bankruptcies and a huge drop in sales, we saw over 1,500 car dealerships close their doors.

According to statistics, the total number of new cars purchased last year in North America was at just about 10.5 million that is about 7 million short of the high reached in 2000.



The good news was that the Car Allowance Rebate System (CARS) program, some called it “ Cash for Clunkers ” gave out $ 2.8 billion in $3,500 - $4,500 rebates and resulted in 700,000 new car sales.



When we entered 2010, the auto industry landscape looked very different from years past. There hasn’t been a time in recent memory where there were so many shakeups, changes of ownership and the jettisoning of brands as in the last couple of years.



Couple this with globalization and the increasing partnerships formed between large automakers, it was easy to miss exactly what happened. We thought it would help to quickly run through a few of the car manufacturers to see where the industry stands in 2010 and moving on to 2011.

CHRYSLER (Chrysler, Dodge, Jeep, RAM)



From 1988 until 2007, ownership of this company rested in the hands of Germany’s DaimlerChrysler AG group (now Daimler AG). In May 2007, a majority stake in Chrysler was sold and the company changed its name to Chrysler LLC.

In the beginning of 2009, Chrysler LLC filed for bankruptcy and emerged as Chrysler Group, with
management controlled by Fiat. They also had the option to increase ownership. The US government owns 8% and the Canadian government 2 % and the UAW a 55% share.

The new CEO of Chrysler and long-standing Fiat chief, Sergio Marchionne, announced a 5 year plan to mix and match brands. Chrysler, Dodge and Jeep will retain their American styling sensibilities but will benefit from Italian engineering.

FORD (Ford, Lincoln, Mercury)



Ford suffered a tough year, but was the one auto company that didn’t take any government funds. This was a huge boon to its public image and perception of stability.

In addition, in a time when many companies were cutting back on R&D, Ford showcased their innovation by delivering new fuel-sipping Eco-Boost engines, along with the widely exulted Fusion Hybrid.

GM (Chevrolet, Buick, GMC, Cadillac)



GM took $50 billion from the government in exchange for a 60% share in the company. Pontiac is gone.

GM decided to retain one international brand. This is actually good news for consumers who will get some solid German engineering applied to Buick.

TOYOTA (Toyota, Lexus)



Last year, Toyota took a $4.8 billion loss for their fiscal year as sales across the globe dropped. They also rolled out the largest recall in the company’s history affecting nearly 4.2 million cars and trucks in danger of “ floor mat entrapment of accelerator pedals. ” Since 2002, it has been reported that as many as 19 people have lost their lives due to this engineering problem.

HONDA (Acura)



Honda always seems to keep it slow and steady and this past year has been no different. Even though it took a sales hit like everyone else, the company managed to jump ahead of Chrysler to become #4 in sales behind GM, Toyota and Ford. Honda has continued its push into alternative energies and showcased the FCX Clarity, a hybrid hydrogen fuel cell vehicle. The company’s biggest challenge looks to be the revival of its luxury brand, Acura, which has fallen behind the likes of Lexus and Infinity.

HYUNDAI - KIA



While the American car companies were struggling in the downturn, South Korea’s automotive powerhouse was in a prime position to capitalize. With outstanding warranties and price points that offered more features per dollar, the company was able to steal plenty of sales away from the Big 3. Hyundai went up to 4 points in market share with a 6% increase in sales. KIA did even better by boosting sales 8%. On the global stage, Hyundai - KIA jumped past Ford, to become the world’s 4th largest automaker behind Toyota, GM and VW.

Hyundai shocked everyone with their Genesis sedan, winning every conceivable automotive award, and the Genesis Coupe was heavily embraced by the import crowd. They also delivered their industry jarring Hyundai Assurance Plan, (HAP) which appeased the fears of those worrying about making payments if they lost their job by allowing returns if certain conditions were met. Soon after the HAP was launched, Ford and GM unveiled similar programs.

SMART



After becoming a press favorite in 2008, Smart looked like it had a promising future as a quirky new brand. But when the recession struck, their message of fuel economy and low price still couldn’t get a commitment to drive such tiny automobiles. Sales dropped almost 40%. Many are wondering if these vehicles are just a fad that may not keep consumers attention. Only time will tell…

SUBARU



Subaru came out of 2009 as a true rock star. While nearly everyone else was seeing red they were firmly in the black with almost a 14% sales gain, topping the industry. How did they do so well ? They had a solid lineup of new cars including the Legacy, Forester and Outback that helped offset percentage declines amongst the Impreza and Tribeca models, and allowed Subaru of America to record several record setting months.

VOLKSWAGEN



The saga between the Volkswagen Group and Porsche this past year would make for a great movie. Porsche tried to work some financial wizardry to take over the much larger Volkswagen. But as the global economy entered a massive recession, Porsche racked up $14 billion in debt in a failed attempt to gain a majority stake. In fact, the process almost forced Porsche into bankruptcy. It was the VW board chairman, who turned the tables and absorbed Porsche instead. It may take awhile, but some pretty fantastic automobiles may result from the combining of technology.

The New Centre of Gravity for the Automobile Industry Could be Asia



The center of gravity in the global auto industry may have shifted to Asia. This shift will have unpredictable effects on major auto makers.



Buick sells far better in China than Toyota’s Prius. GM sales in China were higher last year than GM’s American sales. The Chinese government is planning to grow their auto export industry; they are not just looking to build cars for their domestic market.



The Asian market is a far different market than North America or Europe. Statistics show that every year there are hundreds of thousands of first-time car buyers. China currently has about 40 cars per thousand in population, while G7 nations average 600 cars per thousand people.



For the first time in history annual car sales in China topped those in North America. This clearly shows a trend.



India’s auto market is also growing rapidly, and Indian private firms are building domestic and export brands. And Detroit can’t even claim the year’s first auto show, there was already one in New Delhi and the big word is small cars.

Japan’s domestic auto sales were down 9 % from the previous year, but government subsidies boosted sales by more than 35%.

So what’s going to happen to the Auto Industry in North America in 2011 ?



General Electric is going to buy as many as 25,000 rechargeable cars, almost half of them from GM. This may herald more purchases of electric vehicles for corporate fleets. GE unveiled its order as automakers prepare a new generation of battery-powered autos, including GM’s Chevrolet Volt and Nissan’s Leaf. Other early adopters may follow suit. Companies like UPS or FedEx, could be the logical first movers.



Corporate purchases can help nurture a viable commercial market for these cars. Mass adoption by consumers of electric vehicles will happen slowly because of range anxiety and cost. However, fleet operators may react differently, because the business case for electric vehicles is financially sound.

Tax credits



While purchase prices may be higher for these new vehicles, corporations could reap savings from tax credits and lower costs for electricity than gasoline. According to the experts, it’s easy to install charging equipment at a fleet garage.



GE would see an additional boost, because they are positioning the company to benefit from energy - efficient technologies by producing batteries, car - charging stations and smart - grid systems.



At United Parcel Service Inc., hybrids and other alternative-fuel vehicles account for about 2 percent of their global fleet of 102,000 vehicles. FedEx Corp. said its total is about 2.5 percent of the 75,000 vehicles in its Express and Ground units, excluding its freight operations. Between them, UPS and FedEx deliver about 80 percent of all packages in North America.



UPS doesn’t have a timetable for adding more alternative fuel vehicles, nor does FedEx.

Google Inc., has 30 hybrid and plug-in models in use for employees at its headquarters in Mountain View, Calif. It’s been said that they intend to transition and expand that fleet next year with new electric vehicles that are coming into the marketplace.



Enterprise Holdings Inc. and Hertz Global Holdings Inc., the two biggest North American rental-car companies, have ordered hundreds of electric vehicles, including Nissan Leafs.



It would appear from all of the information we’ve gathered that anyone in the automotive aftermarket should gear up for the new electric and hybrids models.



While the Volt is designed to go 25 to 50 miles on electric drive before an onboard gasoline engine starts charging the battery, buyers who choose to purchase this type of vehicle will be eligible for a $7,500 rebate from the government.



Business backing for this new technology is going to be more important as government spending wanes.

The world is in it’s infancy with these new hybrid and plug in models, getting on board could be lucrative, it could also be risky !