Some Brands Up, Others Down in Sales

In January certified used sales hit 109,000 units sold, which is down from last January by a whopping 22%. January 2009 was a record-setting month in the automotive industry and this January is record-setting for the largest drop from year to year in history. Some automakers did show gains, such as Lexus and Honda, though others posted huge losses such as Ford, GM and Chrysler. Honda rose 2.3% over last January while Acura fell by 19% and Ford dropped by 28%.

This is no surprise to the auto transport industry, which can see trends like this coming simply by watching the number of vehicles being moved at any given time. However, it is surprising that Ford’s numbers were so far down from last year given the fact that they have been making great strides in customer satisfaction and loyalty, as well as Toyota’s recall problems. In fact, Toyota was down 5.3% from last year because of the recall, but that is still nowhere near Ford and GM, which dropped 44% this past month. In the long run these numbers don’t mean much – it’s yearly numbers that are most important – but it does show how people are buying, and you can bet that Ford doesn’t want a repeat of January.

Apparently the cheap gasoline that we’re enjoying now (yeah, cheep, that’s it) is going to end. And soon. Crude oil prices have been fluctuating for quite some time, with prices rising to around $83/barrel in early January and then dropping to $72/barrel in 2010. Diesel prices may drop for a bit in the late winter months of 2010 and into early spring, but they will go back up. This isn’t good for anyone but especially the auto transport industry which relies heavily on diesel trucks to move vehicles. Diesel is going to rise to around $2.95/gallon in mid-to-late 2010 and up to $3.16/gallon in 2011.

The largest factor in the rise of diesel is the fact that demand will go up as more companies introduce clean burning diesel vehicles – Volkswagen has been doing this for quite some time, it seems, and now even their sedans are going to be powered by diesel. Gasoline will hit about $2.84/gallon in mid-to-late 2010 and almost $3.00/gallon in 2011, with prices in summer 2010 hitting upwards of $3.00/gallon as more people go on vacation during the summer and go out of town on holidays.

Lithium Battery Sources Hard to Find

According to Reuters, the hopes of the electric car boom rests on the ability to find new lithium sources to support the lithium-ion batteries that are currently in many electric vehicles. Newer finds could be of a lower quality and would be costlier to develop – this includes synthetic versions and while they can meet demands for lithium, they won’t be of the same grade and quality of deposits already found.

This hits the auto transport industry hard as the entire industry is looking forward to new finds in the electric vehicle industry. Some countries have higher deposits of lithium than others, and Mexico is currently sitting on over 800,000 tons of highly reactive and versatile lithium which may solve the problem, at least temporarily. But if scientists could find a way to cheaply and quickly synthesize lithium, this could be a thing of past. If they can do it. Argentina and Chile also have large deposits, and Toyota has already launched a huge project to develop jointly with Australia’s Orocobre Ltd to develop new lithium-powered batteries – the project comes it at just under $100 million. Pipelines are also going up in Australia, Finland, Canada and the United States to quickly and easily get lithium to manufacturers, but if they can’t find new lithium, it could be a moot point.

A new hydrogen highway linked network is being built across the entire world. It is a system of hydrogen fueling stations for fuel cell or H2 combustion engine vehicles and is vital for the hydrogen vehicle market should it get off the ground. The latest addition to the highway is from Wales to England along the M4 Corridor and there is already one in place from Oslo, Norway to Stavangar which covers over 600 kilometers.

It is a part of the broader HyNor project which already has seven fuel stations, and the plan is to have 20 operating stations and fifteen satellite fueling stations that will support 100 buses, 500 cars and 500 specialty vehicles. This is great news for the auto transport industry, which has long been looking for a way to bypass the strict emissions standards in the United States and, specifically, California. Currently there are fueling stations in the United States, Canada, Japan, Norway, Sweden, England, China and South America, with more coming in Germany and across Europe.

According to the Detroit Free Press Ford dealers are looking for ways to cut their energy bills, and it seems that Ford has a solution. The plan is amazingly simple: simply swap out interior lights with more efficient light bulbs and cut down on the amount of energy used. Not only that, but new light sensors will be added at Ford dealerships that will turn the lights off if enough sunlight is coming into any room with a sensor, and low-flow toilets will be replacing the high-powered toilets that are now in many dealerships.

The auto transport industry could take a leaf out of Ford’s book, that’s for sure. They have long been looking for a way to save money, and this could be the first step toward that. Ford has stated that most dealers would see at least a 20% energy reduction and an even smaller energy bill each and every month. Dealers could also qualify for state and federal tax credits and incentives following the plan, though this isn’t for sure. The plan is likely to cost upwards of $500,000, but will even out and eventually be profitable over time.

With the Toyota recalls now in full swing, hybrid and full-electric vehicles have taken a huge hit. 311,000 Toyota Prius vehicles have been recalled in the United States alone for problems with their regenerative braking system, and the recall has called into question the safety of all hybrid-electric vehicles that use regenerative braking, and, indeed, all hybrid vehicles in general. The largest problem is the fact that with technology that is new and not fully accepted, small things like this (hiccups, in other words) could really hinder the hybrid-electric vehicle industry for a long time.

But it’s supposed to be short term. The future of hybrid-electric vehicles has yet to be in serious danger even though people don’t trust hybrids as much as they did before. Mainstream acceptance of HEV’s has yet to be hurt, and the auto transport industry has actually seen a small rise in the number of competitive hybrid vehicles that are being sold and shipped in the wake of Toyota’s recall problems. So rest assured – nothing is going to happen to the hybrid vehicle industry. At least not yet.

Trade groups have long been alerting collision repair shops about unsafe aftermarket parts and have focused their priorities on unsound aftermarket replacements. The trouble is that insurance companies often require collision repair shops to use aftermarket parts in order to reduce costs, which can be a problem if the parts don’t fit well or are not built to standard. NSF International has taken it into their hands to watch for bad parts and make changes in the aftermarket industry, though as of yet nothing has been done.

Collision repair shops, especially those that service the auto transport industry’s many trucks, are concerned about ill-fitting parts, but the biggest problem is that many companies can’t tell if the aftermarket parts are better, worse or equal to OEM standards, so with NSF now doing inspections the collision repair industry is really looking forward to having new, better parts soon. Aftermarket parts are always cheaper than OEM parts though not always as effective – this new inspection regimen could change all that.

NSF International has launched a new certification program that will certify certain aftermarket collision repair parts, which will verify the parts’ quality and performance. NSF is going to use testing and inspections to make sure that the aftermarket parts that it inspects are up to snuff, which has actually been a major problem recently as many collision repair shops need those aftermarket parts, which can be built shoddily and won’t last long.

The auto transport industry is very interested in these new inspections as it uses mostly aftermarket parts to fix trucks that break down or need replacement parts. If those parts are built poorly, the trucks have an increased risk of breaking down, which is bad for business. The program that NSF is implementing will also compare aftermarket parts to OEM parts and will include on-site inspections and parts testing prior to the parts being sold. A new traceability requirement will also make recalls much more effective in the coming years.

According to SearchAutoParts.com, Frost & Sullivan have released new research on aftermarket brake components and private-label brake components. Private-label brands are now taking more market share and are gaining more acceptance from installers who, for the most part, rely only on aftermarket parts when they fix vehicles. Auto transport companies rely almost exclusively on aftermarket parts, but now that private-labels are becoming more accepted they might just switch it up a bit. Either way, people now have a choice, which is good news for everyone.

Private-label brands include companies such as NAPA Auto Parts, DuraLast and PartsMaster, who all sell their own brand of parts such as shocks and brakes. Private-label parts are often less expensive than regular aftermarket parts and the market share for private label brands could jump to over 60% by 2015, which is a huge leap considering where they are now. NAPA parts were actually preferred by 13% of installers, according to a survey done by Frost & Sullivan, and this number will only grow with time.

According to Edmunds.com Toyota’s market share is going to plummet rapidly. In fact, it already has. Edmunds.com has had to adjust its automotive sales forecast for 2010 just weeks after posting it and they are saying that Ford is going to overtake Toyota to reclaim their spot as the second largest automaker in the United States market. Edmunds.com has also taken the liberty of creating a free resource so consumers can keep track of the Toyota recalls.

The auto transport industry is hardly surprised by this. They’ve been watching Toyota slip and fall in the wake of these recalls and this is just more fuel on the fire. New vehicles from Toyota have already dropped by $150 in price and used vehicles being sold by dealers are selling for almost 3% less than earlier this year, with trade-ins garnering a full 6% less than they would have before the recall. Consumers could also see more price hikes in coming years by other automakers because automakers may have no choice but to put forth more resources to safety in the future as they don’t want to go the way Toyota has. Which is good news – I’d gladly pay a bit more for a car that I know won’t explode.

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