Automotive News - May 28, 2012 - 3

“Everybody rushed toward EV vehicles and hybrid vehicles. Now, they’re going back, and saying, ‘Actually, we need to look at engines.’”
Mark James, Lotus Engineering

President Barack Obama tried out a Chevrolet Volt in 2010 during groundbreaking ceremonies for a battery plant in Michigan that would supply Chevrolet and other EV makers.

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MAY 28, 2012 • 3

May draws a hurray on sales front
Big month leads analysts to raise full-year forecasts
Jesse Snyder
jsnyder@crain.com

SPLIT OVER PLUG-INS
White House pushes to get more vehicles on the road while industry shifts to traditional technologies
Christina Rogers
crogers@crain.com

Plodding along
While the White House pushes plug-ins, consumers aren’t buying in big numbers.
4 MONTHS 2012 4 MONTHS 2011

ASHINGTON — A disconnect is emerging between the White House and the auto industry over the short-term future of electric vehicles and plug-in hybrids. President Obama is pushing ahead with his goal of getting 1 million plugin vehicles on U.S. roads by 2015. He’s even redoubling his efforts for federal support.

N E W S A N A LY S I S
But automakers, while acknowledging EVs and plug-in hybrids as important to enabling them to meet longterm fuel-economy mandates, are emphasizing more traditional fuel-saving technologies in the short term. “Everybody rushed toward EV vehicles and hybrid vehicles,” said Mark James, director of Lotus Engineering, a consulting company that specializes in advanced vehicle technologies and fuel efficiency. “Now, they’re going back, and saying, ‘Actually, we need to look at engines,’”

BMW ActiveE 879 Smart electric drive 2 79 Chevrolet Volt 5,377 1,703 Mitsubishi i 215 Nissan Leaf 2,103 1,025 Toyota Prius plug-in hybrid 2,552 Total plug-in 11,128 2,807 EV share 0.2% 0.1% Ind. sales 4,651,956 4,218,042
Source: Automotive News Data Center, companies and HybridCars.com

especially ultra-fuel-efficient powerplants that can be built without a steep run-up in the cost to consumers. The problem is the market for EVs and plug-in hybrids hasn’t expanded as swiftly as some had anticipated. Major challenges remain: The vehicles tend to be more expensive than those

powered by internal-combustion engines, battery range is limited and charging stations are lacking. Last year, sales of the plug-in hybrid Chevrolet Volt and Nissan Leaf EV — electric-drive cars launched by major automakers in December 2010 — accounted for only about 0.1 percent of the U.S. light-vehicle market. Many EVs and plug-in hybrids are poised to go on sale in the next two years, and the segment’s sales are expected to grow. In March, the industry sold 4,148 EVs and plug-in hybrids, their best-ever sales month. But automakers are carefully targeting their new EVs and plug-in hybrids — and are keeping their sales projections modest. Ford Motor Co., for instance, is marketing its new Focus Electric mainly to EV enthusiasts. Ford is launching the car this spring in New York, New Jersey and California and plans to sell it nationwide by year end. Ford has not given a sales estimate. Toyota Motor Corp., which this spring launched the Prius plug-in hysee SPLIT, Page 24

Early readings of May U.S. auto sales are so strong that some analysts are raising their full-year forecasts by 200,000 units. Forecasters are predicting a fifth straight month with an annual selling rate above 14 million. “May sales are wonderful,” said Stacey Gillman Wimbish, president of the 18-store Gillman Cos. in Houston. Last week in Washington, sales executives for Kia, Volkswagen, Lexus and Acura described scrambling to meet high dealer demand. Sales boss Tom Loveless of Kia Motor America expects to set a 21st consecutive sales record this month, but only because Kia added a third shift at its U.S. plant and streamlined its import process. “We’re coming back a little bit by trying to get boats across the water and cars shipped from Georgia,” he said. “We build 50 percent of our Conrad: Sees 50 percent gain volume in the U.S.” Frank Trivieri, the sales boss that Volkswagen Group of America hired from General Motors, said the Beetle and Tiguan are joining the Passat and Jetta as big sellers. “Our brand is starting to have more than one horse in the stable,” he said. “We’re seeing a strong market and continued growth for the rest of the year.” Consultants and analysts generally are predicting May sales will finish with seasonally adjusted annual selling rates of 14.2 to 14.5 million. Last week LMC Automotive, forecasting for J.D. Power and Associates, raised its 2012 full-year sales forecast by 200,000 units, to 14.5 million. Edmunds.com raised its outlook to 14.4 million, even as Chief Economist Lacey Plache cited tepid economic growth, unemployment and housing as “potential roadblocks” the rest of the year. Dealers say traffic and sales have been steady all month. “Sales have been pretty consistent at all our stores this month,” said Marc Cannon, spokesman for AutoNation. “The major Japanese brands have just exploded.” Timothy Morrison, sales and dealer development boss at Lexus, sees growth beyond restored inventory. “Even though there’ll be huge increases because of last year’s tsunami-related production issues, there are really some good gems of growth coming for the luxury business, along with the nonluxury,” he said. Acura General Manager Jeff Conrad foresees a 50 percent sales increase in May because of restored posttsunami inventories and growing consumer confidence. “There is pent-up demand,” he said. “In the last few years — even for people who had the wherewithal to buy new cars — it wasn’t fashionable to buy a new car.” c Christina Rogers contributed to this report

HOW TO REACH US
Web site: autonews.com Editorial staff: 313-446-0361, e-mail autonews@crain.com Advertising: 313-446-6021 To locate information that has been published in Automotive News, call 313-446-0367.

F&I pros share their playbooks during free Webinars
Never skip a menu. Use the products that you sell. Pay service writers for referrals. Stay involved in the showroom. Read, read, read. These are some of the practices followed by Kelly O’Neill, finance manager of Infiniti of Honolulu. She will share her “Be Brilliant in the Basics” philosophy during the Automotive News F&I Week online conference next month. O’Neill will be joined by Ted Mixon of Ourisman Ford-Lincoln in Alexandria, Va., and Mike Hanks of Bob Hall Dealership Group in Yakima, Wash., in a session called “Dealers Share

GETTY IMAGES

F&I Week
What: A free, online conference When: June 19-21 Main events: Webinars at 1 p.m. and 3 p.m. EDT daily Sign up: fandiweek.com O’Neill Their F&I Best Practices.” Their ideas were among those gathered by Automotive News as part of a nationwide solicitation. The submissions were reviewed by Julie Becker-Myers, who teaches dealership finance and insurance at Becker-Myers

C O R R E C T I O N S
A story on Page 10 of the May 21 issue incorrectly reported to whom Ronald McCants, General Motors’ director of dealer development, reports. He reports to Brian Lee, director of dealer, state and government relations.

Northwood University in Midland, Mich. She will provide commentary on the panelists’ ideas as part of the session. Gabe Garroni of Ally Auto will

open the session with an overview. “Dealers Share Their F&I Best Practices” will be held at 1 p.m. EDT on Wednesday, June 20. The June 19-21 event is designed for F&I managers, dealers, general managers, sales managers and business development center personnel. Six free Webinars will be offered during F&I Week. The sessions can be viewed live from attendees’ desktops or played back later on demand. For more on F&I Week or to register, go to fandiweek.com. c

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Automotive News - May 28, 2012

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