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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.

Weekly Recap: Kia leads Korea's quality surge

The rapid rise of Korea's auto brands in the US market has been apparent on the sales charts for several years, and now it's showing up in an area that's just as crucial: quality. Kia and Hyundai earned the highest rankings among mainstream brands in the J. D. Power Initial Quality Study released on Wednesday. The study tracks problems owners report during the first 90 days they own their car. Kia reported 86 problems per 100 vehicles, or fewer than one problem per car sold, to take second in the rankings behind luxury sportscar-maker Porsche (80). Kia's score improved by nearly 20 percent compared with the 2014 study. "The big industry story is Kia," Renee Stephens, vice president of U.S. automotive quality at J.D. Power, said in a video statement, noting Kia's infotainment systems were the key reason for its improved performance. Hyundai was fourth for the second straight year, though its score actually worsened by one, to 95. Even with Hyundai's slight dip, Korean quality increased 11 percent, according to the study, which far outpaced American and European companies' three-percent increases. Japanese brands improved one percent. Hyundai Motor Co. (parent company of the Hyundai and Kia brands) captured four individual vehicle awards, which tied for the most with General Motors, Nissan, and Volkswagen. "The Korean brands have really taken off," Stephens said. "There's movement in the industry, and the patterns are shifting." Another luxury brand, Jaguar (93 problems), slotted in between Hyundai and Kia in third place. Infiniti was fifth, followed by BMW. Chevrolet was the highest domestic brand, taking seventh place, followed by Lincoln, Lexus, and Toyota, which were all well above the industry average of 112 problems per 100 vehicles. OTHER NEWS & NOTES Kirk Kerkorian dead at 98 Kirk Kerkorian, a billionaire activist investor who wielded enormous influence on the Detroit Three car companies in the 1990s and 2000s, died Monday. He was 98 years old. Kerkorian made headlines in 1995 for trying to take over Chrysler – with the help of former chairman Lee Iacocca – before being fended off by Chrysler management. His takeover attempt ultimately pushed Chrysler to be sold to German giant Daimler. He tried to buy Chrysler again in 2007 when Daimler put Chrysler on the market, but Kerkorian fell short and the automaker was sold to private equity firm Cerberus.

Honda to import Euro market Civic hatch to America

If you look at the Civic sedan Honda offers in America and look longingly at the hatchback version it sells in Europe, we've got good news. The latest word has it that the Japanese automaker will start offering the Euro-spec hatch in North America. The reason, however, may surprise you. According to Nikkei Asian Review, Honda wants to start selling the Civic hatchback in America less because it thinks that's the model Americans want, and more because it has excess capacity at its plant in the UK. Bringing it to the US would also give Honda an entry against the Volkswagen Golf and other competitors. Honda's plant in Swindon, England, is its sole assembly location in Europe, where the company's market share has dropped to a reported one percent. That doesn't mean Honda is giving up on the European market and its strong currencies, but with models like the HR-V to be manufactured in Mexico and the new Fit/Jazz to be imported from Japan, the Swindon plant doesn't have enough vehicles to produce to make use of its annual capacity of 250,000 vehicles. Producing 30,000-40,000 Civic hatchbacks each year for North America would help pick up some of the slack, but not all of it. It would also only represent a small fraction of the number of Civic sedans Honda moves here. Last year Honda sold over 325,000 Civics in America and over 336,000 the year before, making the Civic its second- or third-most popular model here after the Accord and closely positioned with the CR-V crossover. The reported number of Civic hatchbacks it would sell here wouldn't even keep up with the smaller Fit, but would far overshadow the CR-Z hybrid hatchback. The bigger question that performance enthusiasts will be asking is: What does this mean for the prospects of getting the new Type R hot hatch over here? Revealed in production form at the Geneva show earlier this month, the new Civic Type R is based on the European hatchback in question. Prior to the emergence of this report, the official line was that we wouldn't get the new performance model because its bodystyle isn't offered here altogether, and that our version would more likely be based on the sedan. If the five-door model makes its way here, though, we can't help but wonder if the Type R might not follow close behind. Reached for comment, Honda's US office didn't have anything official to add, but we'll be watching this development closely to see how it plays out. Related Video: