Gas Prices Linked To Lowest Consumer Confidence In A Year
Rising gasoline prices, as well as rising food prices, are contributing to less confidence in the economy, according to a survey released late last week.And with prices continuing to rise, albeit gradually, amid speculation about what will happen with supply from Libya, bruised confidence could further hamper the rate of recovery for major deferrable purchases—like cars.
The consumer sentiment index, as measured monthly by Thomson Reuters and the University of Michigan, fell to 67.5 in March. That's down a full ten points from February, the fifth consecutive month of decline, and the lowest level of consumer confidence since March 2009.
At the moment, crude oil prices are settling, at a slightly lower price of about $104.50, but the price of regular-grade gas is up to about $3.57 on a national level—up more than three cents from last week.
On a state-by-state basis, according to GasBuddy.com, those in Wyoming currently pay the least at the pump, with an average of $3.33 per gallon, while those in California pay the most in the continental U.S., at $4.02. Alaska and Hawaii are at about $4.06 and $4.20, respectively.
Economists are also concerned about inflation, which could put a dent in Americans' buying power and put the brakes on economic recovery.
Have rising gasoline prices affected you yet? Will inflation on food and other necessities put off a new-car purchase? Tell us what you think.
This story originally appeared at The Car Connection
Ford: Supply Limited For Black, Red Vehicles
If you're looking for one of several Ford or Lincoln vehicles in black or red, you'd better be ready to settle with what's out at the dealership—and potentially even paying a little extra. Ford has just told its dealerships to halt orders of some models with certain hues of semi-metallic red or black paint, because of a supply interruption due to the recent earthquake in Japan.
Tuxedo Black is temporarily not offered for order on a number of Ford trucks and SUVs, as well as the Ford Taurus and Lincoln MKX. There's also a problem with red for Ford F-Series Super Duty and Ranger pickups, Econoline vans, and the Ford Focus and Lincoln Navigator.
According to CNN Money, both hues rely on an ingredient called Xirallic to get a slightly metallic look, and the recent natural disaster in Japan caused a supply disruption from the company that was providing it.
Don't look for the shortage to last that long; Ford is looking for another ingredient to take its place.
This story originally appeared at The Car Connection
Exported From Detroit: 65 People A Day, Says Census
If you take recent media messaging—especially that from the auto industry—at face value, Detroit has been undergoing a resurgence.
While that's easy to see in the industry, in stronger, better-rated, better-received product lines from General Motors and Ford—and the winds of change at Chrysler—it's harder to say that about the city itself. Or by Detroit's numbers, which still say that it's a dying—or, to be kind, rapidly shrinking—city.
According to final census figures just released, Detroit has lost an average of 65 people a day, over the past ten years. That's close to a quarter of a million people since 2000.
Looks can be deceiving, as it appears that the city has come back to life in some respects. At least at city center, near the Cobo Center that hosts the annual North American International Auto Show, we've in recent years noticed new condos, more people walking on sidewalks, and a more inhabited look to the area. And there's been much said about a new entrepreneurial spirit in the city. That's apparently not the case for huge swaths of the city that, as our John Voelcker pointed out months ago, "properly evokes a mix of horror, pity, and contempt."
Chrysler has brought the focus back to Detroit with its successful Super Bowl ad this year, featuring Eminem, and the show Detroit 1-8-7 has also brought the city into the spotlight, if not always a positive one. The same goes for the seemingly endless "spoiled grandeur" slideshows (like this, this, or this) of Detroit and more than a few empty high-rises, large churches, and huge schools that remind us that all is not so well in the Motor City.
Can the city that's come to symbolize the U.S. auto industry make a comeback for itself—or get people to move back? Let us know what you think.
This story originally appeared at The Car Connection
Analysts: Gas Prices Could Bring Economic Recovery To A Halt
Just when it looked like people were more willing to spend money again on non-essential items—and on more essential (but deferrable) purchases like new cars—rising prices at the pump could grind some aspects of economic recovery to a halt.
After a major price spike in summer 2008, when prices topped $4 a gallon on a national average, gasoline prices plummeted at the end of 2008 to well under $2 then after a quick rise to about $2.50 have risen only gradually until about a month ago. Prices have risen about 40 cents a gallon over the past month.
Although prices this time aren't expected to spike with the volatility they did in 2008, many analysts haven't ruled out $4 gas this year—especially after political events in the Middle East and North Africa.
According to Nielsen Wire, a 50-cent increase in gas prices would cost the typical U.S. household about $52.50 per month, and if prices were to rise two dollars, that would mean $210 a month, or more than $2,500 a year.
Compounding the situation, Nielsen says, is that commodity prices are also on the rise, pushing profits down and leaving manufacturers and retailers afraid that if prices rise, they'll alienate shoppers. And with wages not keeping pace with inflation either, they will.
Ultimately, this stint of higher gas prices, however long it might last, will result in less eating out, more value-conscious shopping, and the increased use of coupons—along with trip compression.
Will this affect new-car purchases, too? It might be too early to tell, but as we've already reported that it appears to be creating a run on small, fuel-efficient cars, it likely will to some degree. As to whether it will damp an already depressed auto market even further...let's hope not.
This story originally appeared at The Car Connection
Tip: Yes, You Can Use Less Fuel Without Vehicle Downsizing
For those who drive a lot, or have a relatively thirsty vehicle, and tend to live paycheck to paycheck, the 40-cent jump in gas prices over the past month could be a pretty big deal.
But it doesn't have to be. Just by more following just a few easy-to-remember pieces of advice, it's likely that you could see a substantial improvement in fuel economy and ease any financial strain that higher gas prices might be causing.
So before you go rushing to the showroom for a smaller, more fuel-efficient car—a trend that's also fueling a price spike on used hybrids and small cars as of late, and possibly negating any cost savings—give it some more thought, and in the meantime consider taking several less-radical steps in your daily routine.
The video down below, from General Motors, has some very useful tips and sums up those small changes very well. Take a look at these tips, then watch the clip:
Make your driving style smooth. Accelerate gently and brake gently. Just by smoothing out your responses and looking farther ahead, you might be able to improve fuel economy by ten percent or more, covering the same ground in nearly the same time.
Lower your cruising speed. Most cars will get surprisingly good fuel economy at a steady 55 mph. At today's fuel prices, for every 5 mph above 60 mph, it's like adding 25 to 30 cents per gallon in costs, according to the AAA.
Be smart about using your A/C. Running your A/C might save fuel; but it might also add to your fuel bill if you use it at the wrong time. While shutting off the air conditioning and opening your windows on a hot day might save fuel if you're driving around town, above 40 mph you lose more energy to aerodynamic drag than to the A/C compressor. At high speed on a hot day, you're simply better off raising the windows and switching it on.
Maintain your vehicle regularly. Engine oil affects fuel economy more than you might think. Make sure you change it regularly, and that your mechanic uses the correct grade and viscosity.
Check tire pressures. Get in the habit of visually checking your tires whenever you get into the vehicle, but at least once a month check your tire pressures and make sure they're at the manufacturer's recommended pressure.
Avoid traveling during peak traffic times. Stop-and-go, idling, and creeping along wastes fuel, and the times you go into work or get out and do errands could affect your fuel budget.
[General Motors]
This story originally appeared at The Car Connection
Toyota: It’s Our Responsibility To Address Hybrid, Plug-In Confusion
Hybrids such as the Toyota Prius have now been offered for more than a decade. Yet as we learned from a study revealed just this past week, a surprisingly high percentage of new-car shoppers don't really know how hybrids work—or what makes plug-in hybrids or battery-electric vehicles different.That said, as part of California's ZEV (Zero Emissions Vehicle) mandate, major automakers (including, in the short term) Toyota, Honda, Ford, Nissan, General Motors, and Chrysler) are being required to sell a certain number of vehicles per year that are considered either zero emission or partial zero emission.
"If we want to sell cars in California, we have to earn certain credits by selling certain kinds of vehicles in the state," said John Hanson, Toyota's national manager for environmental, safety, and quality communications.
For Toyota, that means selling the Prius Plug-In Hybrid, which is essentially a Prius with a battery pack that, at about 5 kW-hrs, is just a fraction of the 2011 Chevrolet Volt and its 16 kW-hrs. That enables the Prius to travel in a wider speed and power range on electric power alone, and it can go about 14 miles without the gasoline engine firing up.
Known quantity, unknown success
But even though it's a known quantity—essentially a slightly more portly Prius, with the capacity to go much farther and faster in EV mode—will shoppers value (or understand) its differences?
"We have a clash point right now where government regulation and societal preparation are in conflict, potentially," said Hanson. "Is society ready for this yet? Well, we're being asked to bring it to market and we are. And we think that there's a market for it."
Synovate, the company behind that recent survey, said in a release accompanying the results that government has a role to play, not just in legislating more fuel-efficient vehicles but in educating Americans about how they relate to the national security and environmental protection issues.
If government mandates, does government educate?
But Toyota thinks otherwise. "If we're building the product, we need to educate the public," said Hanson. "It's our responsibility basically to market the vehicle, educate the buyer, make sure that they understand what they're getting into, and because this is so different from the way people have driven most of their lives—just by plugging it in—it's going to require a lot of education. And that's up to us."
Toyota doesn't know exactly how the market is going to react to it, so to prepare for consumer sales for the Prius PHEV, it's set up a demonstration program, with academic institutions, state and federal agencies, and public utilities, to study how people use the vehicles on a daily basis. And reaching consumers and teaching them about the vehicles is definitely part of it.
So what's a plug-in?
"What we need to do is invest in bringing these vehicles over and showing people what they're all about, and letting them understand, before they come to market, what to expect," said Hanson.
In in all eleven ZEV mandate states, plus Washington, Virginia, Hawaii, Oregon, Toyota plans to sell between 15,000 and 20,000 plug-in Prius models per year, starting next year, at a premium of between $3,500 and $5,000 over a comparable standard Prius.
"That's a lot of vehicles with a technology that no one's heard about," quipped Hanson, emphasizing the work that needs to be done in attracting shoppers who've thought about whether a plug-in is right for them. "I don't want someone walking into a Toyota dealership next year, having never heard of this vehicle, and letting the dealer try to explain to them why they should buy one; I want them to come to that dealership with some savvy."
This story originally appeared at The Car Connection
Feds Host Roundtables, Launch Investigation Into Dealer Practices
With the price of a new car averaging more than $28,000 and the average dealer-sold used car running around $14,000, most vehicle shoppers opt to either finance or lease.While dealer-arranged financing is certainly more convenient, it's not always fair, and it's not always straightforward. And certain types of dealerships have been discriminating against minorities, members of the armed forces, and military families—causing them to pay thousands of dollars extra over the long run, in return, in some cases, for kickbacks to the salesperson.
All this is of course forbidden by current laws, yet in many cases not enforced, says Consumer Reports.
And the situation didn't look poised to become better anytime soon. Last year as part of the financial regulatory overhaul bill, Congress decided not to hold auto dealers to the same stricter new rules as for other types of lenders, with the creation of the Consumer Financial Protection Credit Bureau. Instead the FTC was given authority over vehicle financing issues.
But it appears that the FTC is being proactive. To address all this unhappiness, and to gather information on what's happening at the consumer and dealership level, the FTC is hosting a series of roundtables, all free to the public.
The first roundtable will be held at Wayne State University Law School in Detroit April 12. For more information on the roundtables, their locations, and how to register, see http://www.ftc.gov. In the meantime, the FTC also maintains a complaint assistant, or you may call 877-382-4357.
If you've been taken advantage of by one of these scams, or you feel that you weren't given the same deal as another customer, blow the whistle, show up, or at least pick up the phone. And let us know below: Should the states be doing more to enforce issues such as these?
[FTC, via Consumer Reports Cars Blog]
This story originally appeared at The Car Connection
J.D. Power: Lexus, Lincoln–And Porsche 911–Found Most Trouble-Free
Looking back three years, Toyota has the most dependable vehicles, while Ford and GM again showed that many domestic-brand vehicles are far less trouble-prone than average.
That's as measured by J.D. Power and Associates, as part of its annual Vehicle Dependability Study (VDS), which tallies problems in the third year of vehicle ownership.
On a brand basis, Lincoln and Lexus topped this year's metrics, while Jaguar, Porsche, and Toyota rounded out the top five brands for dependability.
The Porsche 911 had the fewest problems among individual models. Toyota has the most segment winners, with the Lexus RX, Scion xB, Toyota 4Runner, Toyota Prius, Toyota Sienna, Toyota Tacoma, and Toyota Tundra all having the fewest number of problems compared to other vehicles in their class.
Power noted that, on average, domestic cars have fewer problems than imports (135 PP100 versus 147 PP100). The Ford Fusion, Ford Mustang, Lincoln MKZ, and Lincoln Navigator all topped their segments, giving Ford Motor Company [NYSE: F] the second-highest number of model awards. Honda winners included the Acura RL, Honda CR-V, and Honda Fit; and the Buick Lucerne, Cadillac DTS, and Chevrolet Tahoe represented three dependability wins for GM. Other model winners included the BMW X3, Mazda MX-5 Miata, and Mercedes-Benz GLK.
MINI, Jeep, Land Rover, Dodge, and Chrysler had the most problems—all over 200 problems per 100 vehicles.
Overall dependability was measured by J.D. Power at just 151 problems per 100 (PP100). Just two years ago the overall rate was at 170 PPM.
While that sounds impressive, Power notes that even though automakers have reduced problem rates for traditional issues like engines, transmissions, fluid leaks, electronic features such as audio, entertainment, and nav systems—as well as newer safety systems like tire-pressure monitoring—have caused a slowdown.
Fewer problems, according to J.D. Power, is a good thing as, perhaps counterintuitively, it leads to more customers returning to the dealership for scheduled service visits. With more problems, the firm says, owners are more likely to use non-dealer shops.
Specifically, the study totals issues experienced over a twelve-month period of ownership for more than 43,700 original owners who have three-year-old (2008 model-year, in this study) vehicles, and asks about 202 different potential problems.
This story originally appeared at The Car Connection
Gas Prices Fueling Price Spike On High-Mileage Hybrids, Small Cars
Gasoline prices are on the rise. And as surely as we can say that more Americans will start putting half-tanks into their cars and complaining loudly about the extra $20 or so a month they'll need to shell out—and schemes like drilling into fuel tanks emerge—let the rush on small cars resume.According to GasBuddy.com, the U.S. average retail price is about $3.53—that's up nearly 40 cents from a month ago—and they've already climbed nearly 35 cents in March due to the political turmoil.
And in this almost farcical, yet predictable turn—yes, it does seem that U.S. motorists have a very short-sighted take on the energy market—small cars and hybrids are suddenly looking like the stars of the showroom again. Even though hundreds or thousands might be lost in the trade.
It's a trend that's already being noted by the National Automobile Dealers Association (NADA) and its NADA Used Car Guide. According to them, auction prices for used vehicles are up one to 3.7 percent during February, with compact cars up the most overall—about 3.1 percent on average—and SUVs among those with the smallest gains. For compacts, that's a huge jump in a single month, and an indicator that used-car shoppers are scrambling for more fuel-efficient cars. And in price-pinching cases such as this, it's likely some major changes in the new-car market aren't too far behind.
Civic, Prius prices spike
According to NADA, citing AuctionNet used-car sales data, some small cars (like the Honda Civic and Chevrolet Cobalt, they cite) are poised for increases of up to six percent in March as truck prices have stabilized at a time of year when they would normally rise somewhat.
They're also seeing prices rise for used hybrids such as the Toyota Prius. Prices on the Prius have settled a couple of years, yet so far this year they've risen again, with cars at auction earning about $1,700 more through February, compared to November 2010. NADA points to a price spike just over the past week.
"Because of the recent spike in fuel prices, values for used compact and mid-size cars are increasing dramatically compared to the rest of the market," said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide. And with production disruptions in Japan, from the recent earthquake-and-tsunami disaster, Banks expects that prices for compact and mid-size cars will keep rising.
Not an about-face, like 2008
But even with those factors, Banks doesn't think that prices will swing quite as dramatically as they did in 2008. "Barring an extreme increase in gas prices driven by a potential domino effect in other Middle East and North African countries, it's unlikely that used-vehicle prices will experience the extreme volatility seen in 2008," he said.
We've seen with past price upswings that it's volatility, not the prices themselves, that scare shoppers into other types of vehicles. Last year prices continued a gradual rise, but there was never a rapid price spike like this and consumers remained largely attached to larger vehicles. While prices remain far below the $4.13 national average they reached in June 2008, the price swing of recent weeks might have been enough to scare drivers back to the showroom.
What would it take to get you to seriously think about downsizing or moving to a more fuel-efficient vehicle?
[NADA]
This story originally appeared at The Car Connection
HID Headlamps: Brighter, But Failing To Shine In The Mass Market
For some, the blueish, whitish beams of xenon high-intensity discharge (HID) headlamps are bothersome—or even blinding. But for most of us who have driven vehicles with them, it's hard to argue with their significantly improved visibility.That opening line sounds, unfortunately, like it could have been written ten years ago. While it could be argued that HID lamps offer improved safety, their adoption rate has risen very slowly compared to other safety-tech features. According to HID supplier Osram Sylvania, in a press release from earlier this week, only about 22 percent of new vehicles in 2007 came with HID headlamps as standard equipment, and even by 2015 only 38 percent of vehicles are expected to offer it as either standard or optional. Demand, in cases where it's optional, is only expected to increase slightly.
Why? Part of the issue, as we see it, is that automakers have only offered HID headlamps as part of expensive option packages. And oddly, HID lamps seem to cost more in less-expensive vehicles. For instance, on the BMW 3-Series, they're a $900 standalone option, but on the 2011 Mazda3 they're only offered on the top Grand Touring model, as part of a $1,835 Technology Package, and on the 2011 Volkswagen GTI they're only included in the Autobahn model, which costs thousands more.
The other issue, of course, is that HID headlights got off to a rough start in the U.S. Initially their efficacy was questioned, and there was a lot of controversy over their glare—which can be made worse with a coating of road grime on lenses. Years ago, the National Highway Traffic Safety administration logged thousands of complaints from motorists who were momentarily blinded by HID headlamps.
But it turns out, the positives of xenon lamps far outweigh the negatives. Safety studies failed to find any danger from the glare—just annoyance—and HID lamps produce three times the light output of halogen lamps, with better down-the-road illumination, a beam pattern that allows better peripheral vision while driving—something we've certainly noted over hundreds of test-drives—and whiter light that's better with the reflective paint used for road signs and lane markings.
Research has indicated that thanks to the higher illumination and the quality of the light, drivers of vehicles with HID lamps will see potential dangers 30 to 50 yards before drivers with halogen lamps.
Xenon HID lamps also use less power while putting out more light, and the lamps themselves last about 3,000 hours—three times that of halogens.
Meanwhile, Osram Sylvania has also advocated LED lighting in vehicles as a way to reduce electrical loads—especially for hybrids and electric vehicles. For the same light output as 240 watts of halogen high beams, the company's LED lamps draw 56 watts. Overall, according to a University of Michigan study from 2008, LED lights could save 50 percent of power in nighttime driving or 75 percent during daytime compared to traditional lamps.
This story originally appeared at The Car Connection
