| Japanese Automakers with North American Head | | | | unemployment realities came up in mid 2003. It is still |
| Quarters are moving the ball forward and pressing on | | | | all up in the air now in 2005.Honda has had good |
| into the future with new technologies for safety, fuel | | | | success all during the 1999-2002 auto sales boom as |
| economy and net-centric systems. Before retiring | | | | large city's streets and highways fill up to nearly |
| from the auto aftermarket franchise industry, I took | | | | gridlock. People knowing of Honda reliability and some |
| a tour around the nation to see what I had built and | | | | having been burned in the late 80's with lousy quality |
| visit all our franchisees. During this trip I visited all the | | | | would not buy an American car if you paid them. |
| all Major Japanese Auto Manufacturers North | | | | They are extremely loyal to Honda. In my early days |
| American Head Quarters as part of our 2002 Victory | | | | in business I had met the Honda Brothers when they |
| Tour.We are seeing a major push by Japanese Auto | | | | came to the US to buy a long range Cessna 150 |
| Makers to re-gain lost ground from post 9-11 lost | | | | Aircraft and even then they were very aggressive |
| market share by domestic manufacturers due to the | | | | with the latest and greatest technology. At the time |
| Zero/Zero Financing Strategies of 2001-2002. Toyota | | | | I was selling aircraft, boy has Honda come a long |
| had gained incredible market share in late 2002 | | | | way indeed. Today they maintain new prototypes in |
| against Ford, GM and DaimlerChrysler. Toyota started | | | | all five categories of hybrid cars, from mixed units to |
| to offer a new SUV option on an old and most | | | | pure hydrogen cell, from all electric to |
| popular model. The 4-Runner now with an All-Wheel | | | | thermo-hydrogen-electric, from natural gas to biofuels |
| drive version for add safety and performance. We | | | | such as bio-mass methane and ethanol. It is amazing |
| had the opportunity of going to the Dealership party | | | | to the secrets they keep in house with composites, |
| held by Toyota of North American Corporate to | | | | finishes and propulsion. Having spent the most of any |
| introduce the many Dealership Owners this new | | | | of the other foreign manufacturers on R and D |
| vehicle. Also on display were the Hybrid cars and | | | | projects, Honda looks to surpass the efforts of |
| trucks, which were soon be on the lots ready for | | | | BMW, DaimlerChysler and Ford in all categories of the |
| sale. They are selling many of those models today in | | | | newest Hydrogen Cell cars of the future. Meanwhile |
| 2005 and 2006 models. Toyota's profits were also | | | | the race continues to sell as many cars possible and |
| way up due to the 2001 value of the Yen against | | | | amass as much money as possible at all costs from |
| the Dollar. The Yen was at an all time low meaning | | | | nearly giving cars away on credit with free |
| that they could build the cars much cheaper and | | | | hamburgers to pay back in the future. All the |
| re-invest much of these profits in R and D projects, | | | | domestics are hard set on displacing the foreign |
| some of hit the streets as early as May of 2003 as | | | | manufacturers for good or buying them on the cheap |
| they released the 2004 models. This will be a war for | | | | in the case of a total collapse of the Japanese |
| all manufacturers as the aggressive Japanese Toyota | | | | economy if the bad loans are realized for what they |
| company goes for the gold.Mitsubishi Motors made | | | | are under the current political structure which would |
| quite a run in March, April and May of 2002 by | | | | not only hurt auto manufacturers but also cause |
| proposing a Zero/Zero/Zero plan. Zero Interest, Zero | | | | heads to roll in banking, securities and government. In |
| Down Payment and Zero Payments until 2003 on all | | | | 2005 the foreign automakers with their |
| Monteros, Gallants, Montegos and Eclipses. No one | | | | environmentally clean cars are out pacing domestics in |
| knew what the fall-out rate would be on these | | | | those categories presently due to fuel prices. They |
| vehicles selling starting in March of 2003 as 90 day | | | | will out run any bad debts on auto loan fallout rates |
| delinquent loans go unpaid from Mitsubishi Acceptance | | | | as the economy is back and people have jobs, the |
| Corporation. In hindsight the short-term strategy | | | | unemployment rate is extremely low in the United |
| worked but the fall-out rates were disastrous indeed. | | | | States now.Likewise in the US if domestics are |
| Ford Motor Credit had also run into problems on failed | | | | forced to raise prices as consumer fail to repay loans |
| auto loans in its major Ford Motor Acceptance | | | | and re-marketers sell 1-2 year old cars on the cheap |
| Corporations unit. My company was in the business | | | | next to the over inflated prices of new models, we |
| of washing car dealership lots in our Car Wash Guys | | | | may see a glut three times as big as that of the |
| Dealership Division which washed for many Mitsubishi | | | | used car dealerships, as we saw some of this right |
| Dealerships across the nation and counting them out | | | | after 9-11 and some at the time were worried that |
| now would not be a good bet as the 2003 models | | | | with no possible option of using financing incentives |
| were stacked and the prices were very good | | | | to bail them out things might get tough, that did not |
| compared to the increased prices of Domestic Cars | | | | happen and the industry ended up saving our |
| due to import steel tax and fallout rates of bad loans. | | | | economy in robust sales. If this did take place during |
| Even more of a situation exists as Domestic | | | | a period of slight inflation and fallouts in other financial |
| Automakers realize that the new 2003 fallout rates | | | | areas such as credit cards and new homes which |
| could reach over 8% and therefore have raised | | | | were purchased on 2-10% down we could have seen |
| prices 10% to counteract this offset.Nissan had done | | | | a grouped of upside down consumers with nothing in |
| well in 2000, 2001 and 2002 although had only gained | | | | the way of net worth to make them worthy of a |
| moderate ground against the other manufacturers | | | | new car and auto prices through the roof to cover |
| and most of that came in the light truck market. | | | | bad debts. It would have been a disaster waiting to |
| Infinity did not do as well in 2001-2002 as expected | | | | happen, luckily the Fed Acted properly and the tax |
| however the major consolidation in the auto | | | | cuts kicked in fueling small business investment. One |
| dealership industry by AutoNation, United Auto, | | | | thing is for sure there will be so many cars on the |
| Auto1, Sonic Automotive and others shielded them | | | | road you will spend 1-2 hours a day in traffic and that |
| from being hurt too bad as they are diversified with | | | | means a lot of dirty cars out there for my company |
| all brands from Hyundai to GM. This was a bad year | | | | to wash? CarWashGuys.comHow did everything get |
| for some manufacturers such as Daewoo, while | | | | so out of control in 2001-2002 Auto Markets?It was |
| other brands made good headway. 2001 delivered | | | | not all 9-11, it was not great before that as it |
| nearly 17 million cars to Americans and was said to | | | | appeared that 2001 would end with only 14.1-15 million |
| have saved our economy as those sales figures | | | | cars sold instead, they did slightly better with 15.1 |
| were thrown into the all retail sales categories | | | | million cars sold, which was still a disappointment from |
| showing consumer spending good as most retailers | | | | the 17.1 million of the previous year. However by the |
| had a lousy Christmas in 2001. Nissan did well due to | | | | end of the Zero-Zero of 2001 the game had changed |
| its ability to catch the consumer with flashy light | | | | and the future risks became greater. The real |
| trucks with pizzazz. Excellent marketing if you ask us | | | | question was this, would there an emerging middle |
| at the Car Wash Guys, knowing of course that it | | | | class that was expanding or would it be contracting? |
| was pure brilliance.Mazda did well in early 2001 | | | | If it was expanding and that sector was increasing |
| pre-9-11 due to the gasoline price spike, with its many | | | | now from let's say the Hispanic Population, would it |
| fuel economy models. But did not do as well during | | | | be expanding enough to continue this rate of |
| post 9-11 as the domestics took off like a banshee | | | | expansion in the auto industry. Can our roads handle |
| from hell with Zero/Zero and lots of retained earnings | | | | more cars? Can our bodies handle more pollution? Are |
| to carry them. GMAC took a big bite in Mazda's sales | | | | there going to be any big consolidations in the Auto |
| out of the gate in 2002 and Mazda is looked for it's | | | | Industry. What are the plans of the European Auto |
| 2004 models to help it catch up in Mid 2003. Mazda | | | | Companies with names like Volvo, Fiat, Jaguar, BMW, |
| also got hurt in the sales to rent-a-car companies and | | | | Rolls Royce, Volkswagen, Peugeot, Saab, Porsche, |
| due to its domestic partner and major shareholder | | | | will these mergers continue with American Auto |
| putting it in the back seat for now. Mazda Miata's sold | | | | Makers? Will one of these be on the leading edge of |
| excellent between 1999-2002 but not enough to | | | | new technology and leap-frog other companies with |
| carry the entire company. With a recent brand | | | | Hydrogen Cells? How many cars can our country |
| re-identification under way they missed the boat in | | | | hold, who will buy them and most of all who will pay |
| early 2002 meanwhile Chrysler and Ford met GM's | | | | for them? All these questions were still out in the |
| Zero/Zero and the horse raced out in front during a | | | | wind and we saw a lot of cars coming off the |
| Buy American post 9-11 craze, the rest was history. | | | | Rent-A-Car lines and hitting re-sale lots. Would cars |
| We are looked for an excellent return to market | | | | with two years old dates be worth 1/3 of new due |
| position by mid to late 2003 from Mazda and of | | | | to inflated prices to counteract fallout loan rates on |
| course their domestic partner as GM's relentless | | | | the Zero/Zeros? Would inflation take care of this? |
| pursuit of the Zero/Zero game slowed down. GM | | | | Would it not? Lots of dynamics out there and we |
| was out in those years to wipe the competition and | | | | saw many cards very well placed changing the game |
| with the GMAC home division and new housing starts | | | | in 2001-2003 as we visit the best players of the |
| issues if the real estate bubble caused walk always, | | | | greatest game ever created; The Free Market, and |
| these other companies may see things rally take off. | | | | no industry contains more out for blood players than |
| Good call as we see home sales robust even now in | | | | the Auto Industry...God we love the game. God Bless |
| Spring of 2005 and enough to carry the summer. Of | | | | the players, our customers and the Game. And folks |
| course if interest rates hike up and inflation occurs | | | | that is what the Auto Industry was all about in |
| GM made a perfect play and inflation is moving | | | | 2001-2003 and now you can see why things are the |
| forward and so is the FED with rate hikes, even if | | | | way they are now as the Auto Dealers and |
| money flows out of the country race past inflows. All | | | | Manufacturers move into hybrid fuel efficiency and |
| will be based on Iraq war, so far in 2005 we are 187 | | | | net-centric electronics in the 2005-2006 models. The |
| Billion into the re-construction of Afghanistan and Iraq | | | | auto industry is a huge important factor in the health |
| and we need those money flows back. North Korean | | | | of our economy; Think about it.Lance Winslow - |
| games and Iranian nuclear material standoff and the | | | | Online Think Tank forum board. |
| consumer's over all short-term debt and | | | | |