Auto blog

The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

Toyota's 'green bond' an industry first, quickly rises to $1.75 billion

Toyota is greasing the skids for more green car purchases with the announcement of a $1.75-billion bond designed to finance the purchase of high-efficiency Toyota and Lexus models. The Asset-Backed Green Bond is a first for the automotive industry and is making a lot of money available to buy or lease the following vehicles: any of the four Prius variants, Camry Hybrid, Avalon Hybrid, RAV4 EV, Lexus CT 200h and Lexus ES 300h. Originally, the bond was set at $1.25 billion, but Justin Leach, manager of public relations for Toyota Financial Services (TFS), told AutoblogGreen that demand was high and it was quickly oversubscribed. TFS has been looking at more ways to diversify its portfolio after a Diversity & Inclusion Bond that was announced in early 2013 and, with the new Green Bond, TFS is offering something for the "number of investors out there who are looking for investment opportunities in green." The way the money from the bond is used, basically, is that TFS takes the $1.75 billion and uses it to finance the purchase or lease of the nine vehicles listed above. As of right now, all the eligible vehicles are plug-in or hybrids, but the rules simply say that the cars in the program have to meet certain "powertrain, fuel efficiency and emissions" criteria. That means: Minimum EPA estimated MPG (or MPG equivalent for alternative fuel vehicles) of 35 city / 35 highway California Low-Emission Vehicle II (LEV II) certification of super ultra-low emission vehicles (SULEVs) or higher, which would include partial zero emissions vehicles (PZEVs) and zero emissions vehicles (ZEVs). TFS raises plenty of billions in other ways for the rest of the lineup, and got into asset backed securities in 2010, Leach said. Given the success of this first Green Bond, Leach said he expects TFS to keep this idea in its arsenal. "This one was so well received, I would be surprised if we didn't see it again," he said. "If anyone was going to do it, it should be Toyota, right?" Toyota Financial Services (TFS) Issues Auto Industry's First-Ever Asset-Backed Green Bond Bond Proceeds to Fund Consumer Loans and Leases for Toyota's Leading Portfolio of Green Vehicles TORRANCE, Calif., (March 24, 2014) – Toyota Financial Services (TFS) issued the auto industry's first-ever Asset-Backed Green Bond in the amount of $1.75 billion.

2016 Lexus GS gets 2.0L turbo engine, updated styling

The Lexus GS gets a number of enhancements for the 2016 model year, and the updated sedan makes its official debut in California during Monterey Car Week. The usual mid-cycle refresh styling nip/tuck is evident, but the bigger story is the addition of a new, rear-wheel-drive GS 200t model. Lexus' IS sedan isn't the only one getting turbo-four power for 2016. The GS 200t uses that same 2.0-liter turbocharged four-cylinder engine, good for 241 horsepower and 258 pound-feet of torque. It's paired exclusively with an eight-speed automatic transmission and rear-wheel drive, and Lexus says the GS 200t should be able to achieve 33 miles per gallon on the highway. Not to be left out, the naturally aspirated GS 350 gets a small power bump for 2016. The 3.5-liter V6 now produces 311 hp and 280 lb-ft of torque, up from 306 and 277, respectively. The GS 450h hybrid carries over with its powertrain unchanged, as well as its 29/34 mpg city/highway rating. Other changes for 2016 include standard bi-LED headlamps as part of the reworked front fascia, and a host of technology upgrades. The 12.3-inch central display screen now has full-width map capability, and the controller gets some extra "enter" buttons. Lexus also gave its Enform system some updates, with a Service Connect system. The ever-important Apple CarPlay and Android Auto features are missing from this update, though it's not exactly surprising. Have a look at the updated GS 200t in the gallery above, and scroll down for the full press blast. Related Video: Mingling with the Classics: Lexus Introduces 2016 GS During Pebble Beach Concours Celebrations New GS 200t RWD Model With 2.0-Liter Turbo Engine - More Power and Torque for GS 350 - Restyled Front End With Standard Bi-LED Headlamps - New Available Lexus Safety System + - Upgraded Multimedia Technology and for GS 350/GS 450h Standard Navigation - New Available Lexus Enform Service Connect - New Interior Colors and Wood Trim Selections MONTEREY, Calif. – Aug. 13, 2015 – The Pebble Beach Concours d' Elegance, the premier concours event in the United States, is an appropriate setting for the 2016 Lexus GS models to be introduced. The GS enters 2016 with a bolder design, a new GS 200t rear-wheel drive model and new luxury finishes that match the refinement of Monterey. The Lexus GS continues to feature impressive agility and sporty handling for turns along California Highway 1, as well as comfortable ride quality for extended highway driving.