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Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

Honda underreported 1,729 claims of injuries or deaths since 2003

Among these underreported cases were eight Takata airbag inflator ruptures not submitted. Following an independent audit of its safety reporting procedures, Honda has found massive holes in its methodology and practices that resulted in 1,729 claims of injuries or deaths going unreported to federal authorities dating back to July 2003. The cases should have been submitted to the National Highway Traffic Safety Administration as part of its quarterly Early Warning Reports (EWRs) under the TREAD Act, but they fell through the cracks for a variety of reasons. Honda blames the underreporting on three factors: data entry errors, computer coding problems and "an overly narrow interpretation of what constituted a 'written notice' under the TREAD Act." The first two issues were related to the computer program that collected the claims. If employees didn't enter a date in the "written claim received" field, then they were omitted from the EWRs. Also, the company's internal component codes didn't always match those used by NHTSA, and only the ones that were the same were disclosed. Finally, third-party documents, including police reports, were not considered. Honda says the computer error is now corrected, and the company is updating its data entry training. In the future, written and oral claims will be included in EWRs, as well. Among these underreported cases were eight Takata airbag inflator ruptures not submitted in Honda's EWRs, including one death and seven injuries. However, the automaker claims NHTSA was already aware of all of these incidents either from the agency's own records or from the company's notification outside of the EWR process. Unfortunately, this problem could have been stopped much sooner. The issue was first brought to light in 2011 but didn't result in a followup. NHTSA advised the automaker of discrepancies in January 2012, and it still did nothing. This third-party audit wasn't commissioned until September 2014. "Honda acknowledges that it lacked the urgency needed to correct its problems on a timely basis," it says in the announcement. Separately, the Japanese government is starting an investigation, as well. According to Reuters, the Japanese Transport Minister has created a task force to look into the Takata recalls and find out whether Honda under-reported incidents there. Scroll down to read the company's entire statement on the third-party investigation.

2014 Honda Accord Hybrid [w/video]

Delivering On Promises
The 2014 Honda Accord Hybrid should surprise no one. Its look is something we've seen since the non-hybrid versions went on sale last year. Its powertrain, mostly, we are familiar with from the already-on-sale Accord Plug-In model. And the overall vibe of the car? Well, it's an Accord, which has been a strong seller in the US for three decades, so much so that there's a very good chance you've been in one at some point, whether you noticed or not.
Honda's first attempt at an Accord Hybrid, released in 2005, put dynamic performance first, but it didn't match the public's maturing perception of what a hybrid is all about: fuel economy. The 2005 version was capable of a measly 28 miles per gallon combined, 25 in the city and 33 on the highway. Remember those numbers, and that the first-generation Accord Hybrid lasted all of three model years before being axed.