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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.

Recharge Wrap-up: Eigg's renewable energy grid, Wulin City Car EV looks like i3

Scotland's Isle of Eigg's electrical grid relies solely on wind, hydro and solar power. It's the first grid of its kind after switching to renewable energy from noisy, unreliable diesel generators. Scotland's renewable resources are fodder for supporters of independence form the UK, and Eigg is a perfect example of that potential. Besides being a responsible community, it also seems like a lovely place to visit. Read more at Reuters. London Mayor Boris Johnson is calling for incentives for diesel vehicle scrapping. The goal is to improve London's air quality, encourage the purchase of clean vehicles and offset the inconvenience of charging diesel cars to enter the city's proposed Ultra Low Emissions Zone. Read more at Green Car Congress or in the press release below. BMW, Nissan, Renault and Volkswagen are teaming up to create a better EV charging infrastructure in the UK and Ireland. As part of the Trans-European Transport Network (T-ENT) program, the group aims to create extended EV-friendly roadways with the UK Rapid Charge Network, connecting major cities on the islands. Plans for the network include 70 rapid chargers along 684 miles of road. The four manufacturers also want to extend the project to mainland Europe to encourage the adoption of EVs. Read more at Hybrid Cars. Wuling is working on an EV, called City Car, which liberally takes visual cues from the BMW i3. The City Car EV concept is slated to make its debut in November at the Guangzhou Auto Show, while a production version could make its way onto Chinese roads next year. We might have to wait until the debut to know what powers the City Car, as those details haven't been released yet. General Motors is a 43-percent stakeholder in Wuling. Read and see more at Car News China. Taxi customers in New York will enjoy greater payment flexibility with the new interoperability between RideLinQ and Way2ride apps. Now customers will be able to use either app to pay in any of the city's 20,000 green and yellow taxis. There's no need for separate apps for separate cabs, and no need for drivers to install any new equipment. The groups behind the apps hope to expand this functionality to other cities across the country. Read more in the press release below.

Volkswagen lays off 500 Chattanooga workers

The redesigned Volkswagen Passat has been a decent seller since its debut in 2011, but sales have apparently dropped off enough that the automaker is trimming some of the employees from its Chattanooga, TN assembly plant. According to Automotive News, Volkswagen will be cutting shifts and laying off 500 contracted workers in response to slowing sales.
Currently, the plant has three teams running 10-hour shifts Monday through Saturday, but starting May 13, this will be reduced down to two teams running 10-hour shifts Monday through Thursday. This will be done to reduce dealer inventory (the article says that VW dealers, on average, have a 97-day supply of Passats) and production capacity (currently running at an annual pace of 170,000 units, which is more than the 150,000 annual units the plant was planned to produce).
This, of course, isn't saying that the Passat has been a failure since VW added 200 full-time employees to the plant in February 2012 to keep up with increased demand. The AN article says that automakers frequently overstaff plants during the launch of a new product - or in this case, a new product and a new plant - but eventually reduce the workers as things run smoother and more efficiently.