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The US Auto Industry’s Worst – is It?

Carnage of the automotive industry continues, with each passing week throwing in a host of surprising knock out news. Be it the auto major Toyota overtaking GM in auto sales, or the deepest nosedive of Daimler’s stock since 1998, or the Ford’s job cuts of 200 salaried jobs to achieve a 15% workforce reduction by August 2008. Each is indicative of the prevailing turmoil, and has repercussions.
As consumers choose smaller cars auto part manufacturers brace up for supplying more of small car parts. And auto makers have begun contemplating mergers as a more creative way to sail safely through the storm.
June 2008 has seen the worst performance for the US auto industry since 1993 based on Y-on-Y month comparisons, a JD Power news release notes.
Harrowing Forecasts
Earlier, the projections for the sale of light-vehicle for 2008 was about 14.95 million units, but today the forecast stands corrected at 14.2 million units for the year.
Take a look at the US light vehicle sales during the last 11 years.
Compared to 2007, a 12 percent decrease is expected for light vehicle sales in 2008. Further, the decrease would spread over differently across segments.
For instance, while the retail sales are projected to decline by 10 percent to 11.6 million units, the fleet sales would experience a 21 percent decrease to 2.6 million units.
Trends
Almost double the decrease is expected in fleet sales when compared to retail sales. The trend is indicative of the notion that manufacturers would reduce fleet sales, while continuing to salvage earnings from retail sales during the low phase. Incentives too are supposed to be moderate.
Another obvious trend is that consumers’ are switching to smaller vehicles ever since concerns about fuel economy increased, and skyrocketing gas prices fueled the worries more than ever. While the sales of SUV’s have decreased for sure, but the simultaneous increase in sales of smaller autos hasn’t been sufficient to offset the losses due to the fledgling sales in SUV segment.
Consider this, compared to the first half of 2007, the 2008 sales figures for SUVs did plummet by 26 percent during the corresponding period, the concurrent compact car segment sales were up only 28 percent. Not enough to make up for the decrease in SUV segment.
A lack of a sharp enough rise in sales in the compact auto segment can in part be attributed to inefficient supplies. For instance, the number of days these cars rested with the dealers (the “days to turn” measure) was an average of 57 days from January till June 2008. But it did show an improvement from May through June by averaging 47 days.
The Reasons
Although the hike in gas prices is often cited as the prime reason affecting the auto industry, other factors such as a weakening economic circumstances (viz. rising inflation, higher unemployment), and the long term side effects of the credit crises are in no way less important.
The Worst Is Yet To Come
Every time things worsen I wish that this is the nadir of it all, but an overwhelming majority of experts opine, that this is to last till at least a year. And now even the earlier forecasts for lower sales have been downgraded further.
Realistic expectations are that the worst is indeed yet to arrive, and that June’s dismal performance isn’t anything out of the ordinary. In fact it’s just a page in the book of industrial downturn. A year’s time is the least that’s needed before things begin to look up. But even a year later it wouldn’t be like abruptly waking up from a nightmare. As in 2009 too, a sudden recovery isn’t expected. Only a small upping to 14.3 million units in sales is forecast, with most of it attributed to retail sales. So till the storm lasts, auto part makers and the auto industry as a whole have a tough time ahead.

The Impact Of Hybrids On Car Sales

Consumers caught sight of a momentous arrangement of hybrid cars at the Detroit auto spectacle, with innumerable car builders announcing fuel efficient automobiles, the majority of which will doubtlessly not be made available for sale for many years. There were a lot of technologies and configurations with a big exhibit space allotted to this special grade of cars. In spite of the developing portion of cars being announced at several expos, car sales for alternative energy in the preceding year were not more than three percent in the USA.
There are numerous factors for car producers to present their hybrid cars and provide the means for shaping up this technology in spite of hardly any car sales. The primary goal is positively the eventual outlook in which sales will finally be reaped from hybrid cars. Customers are at present delaying the decision to commit to one precise technology and withstand the probability of a scant resale rate for an outdated car. This might however rectify after this distinct part of the car market forms other main benchmarks and costs of innovative hybrids drop.
A distinctive virtue of the above argument is initiating esteem for hybrid cars for an era when folks are commonly ready to convert to this technology. The Toyota Prius is a wonderful instance of this tactic, with Toyota attaining the unparalleled car sales in this sphere all over the planet. A larger number of automobile lovers are inclined to accept a hybrid car from producers with an secure attainment versus firms only now getting under way in this sphere.
A clear social perception is a different essential motive for car producers to repeatedly invent fashionable hybrid cars. Present car sales in a selected manner rely on the auto producer’s flexibility to reform existing cars to Hybrid models eventually. There are distinct instances of car producers bringing out hybrid versions of current car models. This is fundamentally irrefutable for folks true to a special automobile.
Car producers are furthermore contending with incitement from administrations all over the planet to heighten conservation potential and are presenting capital with rigid tenets affiliated with cutting reliance on gas. Administrations are in addition administering resources to academies to assemble a branch appertaining to gas moderation principally for cars and remaining kinds of conveyance.
Prominent car producers such as Ford have displayed a vast percentage build up in hybrid car sales in spite of a waning trade. Though this shows that car owners are striving to convert to an essentially adequate technology granted a fitting cost and encouragement, Hybrid car sales might demand significant time to multiply to secure a conclusive effect on gas utilization and the Earth.

Shopping For Used Car Parts

Sometimes certain parts of our cars break down for one reason or another. We may need to replace the battery if it no longer holds a charge. We might need to get a new muffler for the car if the engine gets too loud all of a sudden. It is important to make sure that the car part that we are looking to replace is the right one. Used car parts are an alternative to purchasing brand new car parts, and this can save money. If it is not done correctly, you can lose money because you will have to buy yet another car part.
The first step is to figure out which part needs to be replaced. If the car seems to be making strange noises, find out where the noise is coming from. Note what function the car is performing when you hear the unusual noise. Do you hear a scraping sound when you step on the brakes? You might need to replace the brake pads. Examine the car for rusted or broken parts. Check under the hood as well as under the car itself.
Once you know which part needs to be replaced, consider the make, model and year of your car. While all of the basic parts of a car may be the same, the size and shape of each part will be different, as parts vary between makes and models. For example, the brake pads made for a 1997 Ford Mustang will not fit a 2000 Toyota Corolla.
When shopping for the part, check your local mechanic or car supply store. Many parts are relatively inexpensive. The true cost comes in when you need to pay for the labor to have the part installed. Used car parts are often available at a low price at these locations.
You may be able to find used car parts on the internet. Shop online and do some research on installing the part as well. You may be able to save money on the purchase of the used car part, as well as save money on labor if you know how to install the part yourself. When you conduct your search online, don’t forget to include the make and model of your car.
Finally, when you buy the used car part, inspect it for rust and cracks. Make sure that it is in working condition. Don’t buy it if it looks worn down or unusable.