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How new car shortages may impact your buying experience

If you want further proof that the auto industry is bouncing back, look no further than the empty lots and forecourts of your local dealership. According to a story by The Wall Street Journal, continued high demand for mainstream cars is overtaxing automakers' ability to produce enough models. Several dealers interviewed for the story are reporting two-week supplies as opposed to the typical two-month allocations.
With sales expected to hit 1.4 million units when August numbers arrive shortly and incentive spending down to its lowest amount since January, these limited supplies are pushing prices even higher. For example, according to the WSJ, the average price of a Ford Fusion is up past $26,000. Unfortunately, it's difficult for manufacturers to increase production quickly. If it invests in its facilities, as many manufacturers have done, it risks wasting cash if growth suddenly slows. At the same time, the momentum gained over the past several years could be short lived if vehicle supplies continue to dwindle. "Manufacturers are in a precarious situation," notes Karl Brauer, a senior director at Kelley Blue Book.
Low interest rates and a wealth of desirable features are also allowing customers to purchase more expensive vehicles while justifying their higher overall price tags, a situation that is compounding supply shortages. Even now, during the annual end-of-summer clearance season, deals on new vehicles are remarkably difficult to come by. According to the report, the Toyota Corolla is in a self-inflicted state of shortage, as Toyota clears out inventory in anticipation of the new 2014 generation arriving in dealers. Ford's supplies should rebound as Fusion production comes on line at its Flat Rock, Michigan factory. The Chevrolet Impala, Honda Odyssey, Civic, and Accord and Subaru Forester are also facing shortages.

Toyota World's Top-Selling Carmaker For Second Year

Toyota remained the top-selling automaker for a second year in a row, beating U.S. rival General Motors by some 270,000 vehicles in 2013, and set an ambitious target to sell more than 10 million vehicles this year. That would mark a milestone as no automaker has ever topped annual worldwide sales of 10 million. Toyota Motor Corp. said Thursday it sold a record 9.98 million vehicles worldwide last year, up 2 percent from the previous year. The Japanese automaker has made an impressive comeback from an earthquake and tsunami that devastated northeastern Japan in 2011, damaging auto suppliers and hobbling production. Toyota also outlined plans to sell 10.32 million vehicles and produce 10.43 million vehicles in 2014. General Motors Co. sold 9.71 million cars and trucks worldwide last year, outselling Volkswagen AG of Germany at 9.5 million. Toyota recaptured the global sales crown in 2012 from GM, which had been the top-selling carmaker for more than seven decades until being surpassed by Toyota in 2008. Toyota, which makes the Camry sedan, Prius hybrid and Lexus luxury models, had strong sales growth last year in overseas markets, although sales fell in long stagnant Japan. Toyota's U.S. sales totaled nearly 2.24 million vehicles, up 7 percent from the previous year. Its China sales were also strong, surging 9 percent to 917,000. Toyota remained optimistic about prospects this year for both regions, expecting sales to grow 3 percent in the U.S. to 2.3 million vehicles, while adding 20 percent in China sales to 1.1 million. The company was typically low-key about the bragging rights for being No. 1, reiterating its comments from previous years that it was merely making one car at a time to appeal to global consumers. GM has also expressed similar sentiments, but being the top seller is a key morale booster for the employees and related companies. The healthy results at the three rivals reflect the momentum of growth in the auto industry. Toyota has undergone tough times in recent years, such as a massive recall fiasco in the U.S. involving more than 14 million vehicles for sticky gas pedals, faulty floor mats, problematic brakes and many other defects, spanning several years from 2009. Related Gallery AOL Autos Test Drive: 2014 Toyota Highlander Toyota Ownership sales selling

Ford Fusion production scaled back just 3 months after it was accelerated

Three months after kicking off production of the Ford Fusion at its Flat Rock, MI factory, Ford Motor Company is taking steps to trim output in the face of heavily discounted competition from Toyota and a growing supply of vehicles.
The addition of Fusion production in Flat Rock - which also builds the Mustang - was meant to be what pushed the handsome mid-sizer past its arch-nemesis, the Toyota Camry. An extra facility building Fusions was also meant to curb the growing demand for Ford's highly profitable sedan.
But with word that Flat Rock would take "approximately" one extra week off for the holidays combined with an 88-day supply of Fusions - reportedly due in no small part to what Morgan Stanley analyst Adam Jonas called "aggressive discounting of the Camry" - some analysts are now beginning to wonder if Ford may have overextended itself by adding a second Fusion facility to the mix.