Used Car Prices Close the Gap on New

According to economist Paul Ballew, the slump in new car sales brought about by the GFC followed by reductions in the production of new cars, has culminated in the current shortage of used cars on the market.

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The news is good for manufacturers. Industry estimates suggest that by mid-2012, as many as 500,000 new vehicles will be sold to customers who would otherwise have opted for a used car.

In particular, record-high prices for luxury cars have led to more new cars being purchased. For example, a 2011 3-Series only costs $34 a month more to finance than a one-year old example.

“There’s a substitution effect going on between new and used,” says Ballew. “When you get those price gaps closing, you get people that are willing to shop new that wouldn’t have before.”

The effect is already being shown in increased demand for new luxury cars withBMW sales rising 13 percent in July, while Mercedes sales increased 7.3 percent.Ford also forecasts a 10 percent increase in new sales over the year.

If the trend continues, it is inevitable that with falling demand for used cars that sellers will drop their prices. However, an Edmunds analyst Joe Spina believes that there won’t be any dramatic decreases in used car prices for at least 18 months.

AMG created a beast known as the 2012 C63 AMG Black Series Coupe

Last time we brought you images of this hot coupe it was when Mercedes-Benztook to Germany’s famous Nurburgring to test out the highest-performance version of its C63 AMG Coupe yet. Today, we have the first non-camouflaged image thanks to a lea from the folks at SpeedFans.fr, who let loose a series of images showing off a bright red Black Series C63 AMG earlier today.

Mercedes-Benz and its performance-crazed AMG division have created a beast known as the 2012 C63 AMG Black Series Coupe and this hot rod has its sights firmly set on the BMW M3.

What we know
Following in AMG tradition, the Black Series will combine increased performance and a unique look with limited production numbers. Look for less than 10 percent of all C63 AMG Coupes to be Black Series models.

Like its sedan Black Series counterpart, the coupe will target the BMW M3 but will offer way more power. Expect two available power levels, with the base power coming in at 487 horsepower, while the addition of the Performance Package could raise the output to 517 horsepower from an amped-up 6.2-liter V8, as well as a performance-minded seven-speed Speedshift automatic transmission. Acceleration times will be around 4.3 seconds for the base model and closer to 4-seconds flat for the Performance Package-equipped Black Series.

Look for top speed to be governed at 186 mph (300 kph), although an unlimited model might be offered in some markets.

To make the best use of this grunt, the Black Series will gain a widened stance, as evidenced by the plump wheel arches of this prototype. A beefed up rear end will put power exclusively to the rear wheels, unlike the all-wheel-drive Audi RS5. Look for AMG to further perfect its stability control, which will feature several modes aimed at various driving environments. A mean and loud exhaust system will also be part of the package.

Inside, the Black Series will get its own seats, a unique steering wheel and some special trim.

Look for this performance machine to make its auto show debut in September at the Frankfurt Motor Show alongside the Black Series sedan.

It has not yet been confirmed whether or not the latest C63 AMG Black Series will be coming stateside or not.

Chevy cars outselling Chevy trucks for first time in 20 years

Between a rash of new bowtie-brand cars, a smaller parent company with fewer brands and higher gas prices, Chevrolet has hit its highest U.S. market share since 1991.

The mainstream division of General Motors says that its car lineup will account for just over 50 percent of its total volume for the first six months of 2011. New car sales figures for the first six months of the year are due out Friday.

“You’ll see continued strength in passenger cars, particularly in the compact and mid-car segments,” Chevrolet VP of sales and service Alan Batey told Reuters.

Much of the credit goes to the Chevrolet Cruze compact sedan, which is performing well ahead of its Cobalt predecessor. But the bowtie brand’s midsize Malibu remains a major player; it was the best-selling car in the United States last month.

Chevrolet’s cars aren’t necessarily nabbing market share from its trucks, however. While sales of the big Tahoe and Suburban SUVs are both down a bit (4.5 percent and 16 percent through the first five months of 2011, respectively), the second-best-selling vehicle in the U.S. remains the Silverado pickup (up 11 percent).

In part, Chevrolet sales are inevitably growing since GM eliminated most of the brand’s internal competition when it closed its Saturn and Pontiac brands after 2009.

References
1.’Chevy U.S. car…’ view

GM suggests that high fuel prices have had much to do with a general move toward more fuel efficient cars. The automaker says that about 46 percent of its retail buyers selected four-cylinder engines, a rate that is double what it was in 2006.

“We have been a very, very strong trucks brand and frankly have underperformed in cars,” Batey said. “It’s as simple as that. You have to go back a long way to see a car performance this strong.”

GM says that the last time cars outsold trucks was in 1991, when they accounted for about 52 percent of Chevrolet’s sales.

But Batey is conservative about the rest of the year. Trucks, he says, will probably account for 55 to 58 percent of sales for the entire year since, historically, the market tends to favor SUVs and pickups in the fall and winter.

Next year might be a different story, Batey acknowledges. The automaker isn’t planning to introduce any new trucks or SUVs over the next 12 months, but it has two high-profile car launches including the subcompact Chevrolet Sonic and the newly four-cylinder-only Chevrolet Malibu.

"U.S. Consumers no Longer consider Hyundai and Kia to be low-end-brands."

Long considered the bread and butter of the United States new car industry, the midsize segment was until recently forbidden fruit for Korean automakers. Sure, Hyundai and Kia offered midsize cars, but it wasn’t until their latest models that either brand was taken seriously enough to sell in big numbers.

The tides have changed, with last month marking the biggest milestone yet: The platform-mate Hyundai Sonata and Kia Optima combined for 30,155 units, enough to take home the largest slice of the midsize segment. That’s 22,754 Sonatas and 7,401 Optimas. Together, the Korean twins captured the largest share of the midsize sedan segment in March. And it’s likely that this trend will continue through the summer as inventory levels for Japanese-branded cars like the HondaAccord and Toyota Camry continue to be low.

Last month’s best-selling midsize sedan was the Chevrolet Malibu, but with the discontinuation of the Pontiac G6 and Saturn Aura, the Malibu is the only GM product to still ride on the automaker’s Epsilon architecture. Second in line was the Nissan Altima, but it too doesn’t share a platform with any other North American-market midsize sedan. That leaves the Optima and Sonata, both of which share powertrains, suspensions and platforms.

Certainly, it takes some number twisting to consider the Sonata and the Optima as the combined market share leaders for the midsize sedan segment. But that’s not stopping Korean media from jumping all over the story.

“The ranking signifies that U.S. consumers no long consider Hyundai and Kia to be low-end car brands,” an unnamed Hyundai spokesperson told the Yonhap wire service earlier today.

Gas prices down, truck sales up

Following a slight dip in May, industry experts are calling for improved new car sales in June. May car sales slid by 4 percent, but June’s figures could increase by as much as 14 percent.

Projections vary a bit, but industry analysts are calling for a May sales bump somewhere between 8-14 percent. That would put June’s seasonally adjusted annual sales rate in the 12 million unit range. May posted a SAAR of 11.78 million units.

May’s sales were slightly depressed due to higher gas prices and crimped inventories, both those burdens have eased during June. June’s stronger sales are so far being fueled by trucks and small cars.

“There has been some easing of negative variables in June, as the inventory shortage has not been as severe as expected, and gas prices have dropped noticeably from higher levels in April and May,” Jeff Schuster, executive director of global forecasting at J.D. Power and Associates, said in a statement.

Retails sales are expected to come in at 884,800 units, representing a SAAR of 9.9 million units. That figure outpaces May’s 9.3 million unit clip.

Official sales figures will be announced on July 1.

Is there really a market for hybrids?

With gas prices nearly a dollar above last year’s levels, convention wisdom might dictate that hybrids would be flying out of showrooms. That’s not quite the case – instead, buyers are flocking toward more premium compact sedans like the Chevrolet Cruze, Ford Focus and Hyundai Elantra over hybrids.

Hybrids had 3.6 percent of the market back in July of 2009, but they accounted for a mere 1.6 percent of all new car sales last month. In part, the demand decline could be attributed to the fact that inventory of the industry’s best-selling hybrid, theToyota Prius, was extremely low. But other hybrids like versions of the Ford Fusionand Hyundai Sonata weren’t exactly finding many buyers.

Automakers from Detroit and Seoul are hedging their bets on premium compact sedans, which come equipped with the kind of luxuries and uplevel engineering typically found on midsize cars. More expensive to build and engineer than traditional bargain basement compacts, these new wave cars are also priced higher – a loaded Ford Focus approaches $30,000.

Still, upmarket compacts are cheaper than similarly-optioned hybrids thanks to their relative lack of complex engineering, which more than offsets their marginally higher fuel consumption.

Hybrids aren’t a dying breed, however. Volkswagen has reportedly committed to offering a hybrid – and a diesel – variant of every model in its lineup and Toyota, with an expanded Prius family on the way, is still bullish.

“There are three things you can carve in stone: death, taxes and expansion of the hybrid market,” Toyota General Manager Bob Carter told the USA Today.

What We Know About the Facebook IPO

• JUNE 13, 2011, 2:21 PM ET

CNBC has caused a bit of a stir today with its reporting about Facebook and its IPO, which CNBC pegs as likely in the first quarter of next year. Without a doubt, Facebook will be the most hotly anticipated stock debut at least since Google, and maybe ever.

Associated Press

Facebook founder Mark Zuckerberg

The Wall Street Journal has swarmed all over Facebook’s evolving IPO plans like the Dallas Mavericks defense on LeBron James. Here is a look at the highlights:

Next Stop: $100 Billion: This is not a typo. People close to Facebook believe the company is growing fast enough to justify a valuation of $100 billion or more when the company goes public, our Journal colleagues Geoffrey Fowler and Anupreeta Das reportedsix weeks ago.

CNBC also reported the $100 billion plus valuation today. Only a couple dozen U.S. companies, including lions of corporate America such as Exxon Mobil, General Electric and J.P. Morgan Chase, have stock-market values above $100 billion.

Profit Powerhouse: Facebook is on track to exceed $2 billion in earnings before interest, taxes, depreciation and amortization for 2011, Fowler and Das reported six weeks ago. That’s even higher than the expected 2011 profit circulated in the early part of the year when Goldman Sachs and Russian investment house Digital Sky Technologies invested in Facebook at a $50 billion valuation. If Facebook ends the year with $2 billion in Ebitda, would IPO investors stomach a 50 times trailing multiple valuation? Seems bubble-like.

The IPO Swarm has Begun: Trust us. Wall Street bankers, lawyers, P.R. mavens, caterers and everyone else are slobbering for a slice of the Facebook IPO magic. Facebook has been meeting with potential bankers that want to shepherd the IPO. Goldman Sachs is thought to have an inside track to lead the IPO thanks to its recent investment in Facebook, but don’t count out big banks such as J.P. Morgan and Morgan Stanley, which have led recent big tech IPOs.

Why Go Public? Facebook CEO Mark Zuckerberg has been non-committal about an IPO for a long time. As recently as December, Zuckerberg gave his weird deer-in-headlights stare when “60 Minutes” asked him whether he would ever push his baby into the public markets. “Maybe,”was Zuckerberg’s answer. But momentum is taking over.

As The Journal has reported, the SEC requires companies with 500 or more private investors to begin disclosing financial information. Facebook has said it is slated to cross that mark by year end, giving Facebook until April 2012 to begin spilling its financial guts to the public and putting pressure on Facebook to go IPO to reap some benefit from the SEC requirement. Employees also are antsy to be able to sell the stock they’ve been accumulating in Facebook. The company has closed the door to employee stock sales in private markets such as Second Market and SharesPost, which have provided a controversial venue to buy and sell shares of non-public companies.

Even Zuckerberg’s adult supervision, COO Sheryl Sandberg, recently said a Facebook IPO is“inevitable.”