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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.

Japan could consolidate to three automakers by 2020

Sergio Marchionne might see his dream of big mergers in the auto industry become a reality, and an analyst thinks Japan is a likely place for consolidation to happen. Takaki Nakanishi from Jefferies Group LLC tells Bloomberg the country's car market could combine to just three or fewer major players by 2020, from seven today. "To have one or two carmakers in a country is not only natural, but also helpful to their competitiveness," Nakanishi told Bloomberg. "Japan has just too many and the resources have been too spread out. It's a natural trend to consolidate and reduce some of the wasted resources." Nakanishi's argument echoes Marchionne's reasons to push for a merger between FCA and General Motors. Automakers spend billions on research and development, but their competitors also invest money to create the same solutions. Consolidating could conceivably put that R&D money into new avenues. "In today's global marketplace, it is increasingly difficult for automakers to compete in lower volume segments like sports cars, hydrogen fuel cells, or electrified vehicles on their own," Ed Kim, vice president of Industry Analysis at AutoPacific, told Autoblog. Even without mergers, these are the areas where Japanese automakers already have partners for development. Kim cited examples like Toyota and Subaru's work on the BRZ and FR-S and its collaboration with BMW on a forthcoming sports car. Honda and GM have also reportedly deepened their cooperation on green car tech. After Toyota's recent buyout of previous partner Daihatsu, Nakanishi agrees with rumors that the automotive giant could next pursue Suzuki. He sees them like a courting couple. "For Suzuki, it's like they're just starting to exchange diaries and have yet to hold hands. When Toyota's starts to hold 5 percent of Suzuki's shares, this will be like finally touching fingertips," Nakanishi told Bloomberg. "I absolutely do believe that we are not finished seeing consolidation in Japan," Kim told Autoblog. Rising development costs to meet tougher emissions regulations make it hard for minor players in the market to remain competitive. "The smaller automakers like Suzuki, Mazda, and Mitsubishi are challenged to make it on their own in the global marketplace. Consolidation for them may be inevitable." Related Video:

Check out these cool displays from Honda's new Ohio museum

Honda undoubtedly has its roots in Japan, but when it comes to its US operations, the automaker holds some very deep ties to the Buckeye State too. The company has been building cars at its Marysville, OH, campus since 1982 and over 10 million Accords have left there since then. The latest addition there is something that might actually bring brand fans to the site, though. The newly opened Honda Heritage Center museum is part of the recently constructed 160,000-square-foot Technical Development Center. The place offers a chance to take a tour of the company's history. While it's not the lavish, multi-story affair from Japan, the site still shows off some quite cool vintage products. The exhibits include an area dedicated to Honda's racing efforts, examples of its many motorcycles and several of its early models, including a '70s Civic. A HondaJet and displays of some of the company's engines are there, as well. The Heritage Center will open to the public in January, and other portions of the Technical Development Center will be responsible for training Honda employees. The Marysville campus will keep growing in the near future too with production of the upcoming Acura NSX taking place at a new facility nearby there. Check out the gallery for a glimpse of just some of what Honda has on display at its new museum. Honda Heritage Center: A tribute to the past, a focus on the future New Museum in Ohio Showcases Honda History in North America Dec 18, 2014 - MARYSVILLE, Ohio The Honda Heritage Center in Marysville officially opened its doors today, offering the world a glimpse of the innovative history and growth the company has achieved in Ohio and North America during the past 55 years. "The new Honda Heritage Center is a collection of Honda dreams in the form of products that are responsible for millions of customer relationships," said Takuji Yamada, chief operating officer of Honda's North American regional operations. "The great variety of products on display – including powersports, power equipment and automobiles, as well as aviation and robotics – together with the major milestones highlighted, tell the stories of Honda associates in Ohio and from throughout North America." Ohio Gov. John Kasich joined Honda officials and state and local community leaders to celebrate the opening of the new $35 million, 160,000-square-foot facility, which includes a museum, Technical Development Center and office space for Honda North America.