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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.

Toyota's $1.6B unintended acceleration settlement approved

Toyota is now one step closer to putting its unintended acceleration woes behind it as it has received approval from the US District Court for the Central District of California to settle loss-of-value claims to vehicles associated with the 2009-2010 recalls.
As we reported back in May, the Toyota settlement is worth $1.63 billion, which, according to Bloomberg, includes a payout of $757 million to affected owners, $227 million to attorneys and an additional $875 million for vehicle upgrades. (We did the math, too, and that totals $1.859 billion, but there is no justification for the discrepancy. Fuzzy math, eh?)
Based on the estimated 22.6 million vehicles said to be included in this suit, that would make the average payment about $33.49 per vehicle, but the article says that owners, lessees and even renters will receive varying amounts ranging from $9.74 up to as much as $10,000. This settlement does not affect suits filed for personal injury or wrongful death.

2013 Toyota Avalon Hybrid

People, us included, make a big stink about the importance of family sedans. There's no doubt they're critical - they represent a huge slice of the market's annual sales and profits. However, despite accounting for far fewer transactions than the midsize sedan segment, the fullsize sedan is getting attention from manufacturers now that our market's entire lineup of those (slightly) smaller four-doors has turned over in the last two years or so. As most of the fullsize segment's mainstays derive a fair bit of their platform and powertrain technologies from their midsize cousins, these larger four-doors offer the potential for fatter profit margins, too. And with the newly stylish duds found on many of the industry's most successful midsize sedans, it's only right that automakers no longer think about fullsizers as big, squishy, vanilla family haulers with flat seats, vague steering and a thin layer of 'luxury' in the form of faux wood trim.
As manufacturers have again started diving into large sedans feet-first, the cars themselves have become sharper. The interiors are now of a higher quality and loaded with tech, while the exteriors have become further extensions of each manufacturer's design language. There's perhaps no greater example of this than the Chevrolet Impala and Ford Taurus, two models that evolved from subpar offerings into market leaders. This segment-wide transformation happened quite quickly, whether because of coincidental timing or because manufacturers are trying to get more out of their big cars, recognizing they account for a small portion of overall sales (just 3.5 percent of the new-car market in the first half of 2013).
The 2013 Toyota Avalon Hybrid is one such vehicle. We remarked on the changes to the V6 variant last year, and while we previously had a quick steer of the gas-electric hybrid, we figured the new model was worth a closer week-long look.