Auto News for the Week of May 28th, 2012

Auto Transport in America

Monday May 28, 2012

Auto transport in America should be doubling in business since economists are saying that half of the economic growth in the U.S. is due to auto sales. Now, the economic growth has only been 2.2 percent; giving the auto industry credit for 1.1% economic contribution. Economic growth of 2.2% is not a very big increase however in these times; any growth is a positive sign for the country. As I said earlier, as the auto industry goes, so America’s economy goes and that seems to be true. All the major car manufacturers have ramped up production which resonates through the economy like a stone thrown in a pond. Unfortunately the stock prices of the auto companies have not gone up in tandem with their sales. This may be due to the fact that people are still worried about the economy and waiting to see if any growth sticks. We have seen spikes like this a couple of times in recent years; just to watch them drop off again. People will be waiting and watching for stability and continued growth before they risk their hard earned money again. Ok, so the bad news first. A123 Systems will be posting a $125 million net loss for the first quarter of 2012. They are a lithium-ion battery manufacturer for hybrid and all electric type vehicles. They have had to replace battery packs that were made with defective cells at a cost of $51.6 million. Ouch! That still doesn’t account for the other $73 million in losses; especially since they were projecting a profit of $230 million to $300 million. Ouch – Ouch! Hopefully someday soon we will either get the battery issues worked out or we will start looking something else to replace the gasoline engine. That being said, here is some other good news for the American auto industry. Subaru is looking to stop manufacturing vehicles in China and is focusing its efforts on the United States. Their first move is to increase production at their Indiana manufacturing plant while looking for other regions of the U.S. to develop and/or increase their production capacity. BMW is set to launch their 2013 135is in both a convertible and coupe model. You can order them now but the first scheduled deliveries won’t be until sometime in the fall. This will be a replacement for their very popular 1 Series M Coupe that only lasted one year before it was discontinued. The new 135is runs on a 3.0 liter turbo charged inline six with 320 horsepower. You can choose from a six speed manual or seven speed dual-clutch transmission. It also includes visual upgrades (alloy wheels, black mirror covers and blacked out grill) and an upgraded sport suspension as standard. It will start at a measly $44,195 for the coupe and $44,895 for the convertible.