News Briefs: Jan. 31, 2012

Here’s what we have our eye on today:

  • Analysts expect January’s new-car sales to increase 6% over January 2011, reaching a seasonally adjusted annual rate of 13.4 million, Bloomberg News reports. That would fall short of the final months in 2011 — November and December saw a 13.6 million SAAR — but outpace the SAAR for the first 10 months of 2011. Why? Bloomberg cites familiar reasons: pent-up demand, declining unemployment, rising consumer confidence and higher credit availability — in essence, the factors expected to drive car sales through 2012. Analysts surveyed by Bloomberg expect Chrysler and Hyundai-Kia to post the largest sales gains among major automakers, while Honda and GM may see modest declines.
  • The consumer-confidence spin doesn’t add up, however. New York’s Conference Board released this month’s widely regarded Consumer Confidence Index, which stands at 61.1. That’s down from December’s 64.5 and January 2011’s 65.6, and it adds more static to this month’s otherwise upbeat economic news. Though unemployment has decreased month-over-month since last August and new-car sales have improved over the same span, new-home sales have also dipped, the Census Bureau reports.
  • Honda built fewer than 3 million cars worldwide in 2011, leading the Japanese automaker to slash profit expectations 65% for the fiscal year that ends in March, Automotive News reports. Hammered by natural disasters in Asia and a strengthening Japanese yen, Honda’s profits plunged for the final quarter of 2011. U.S. sales fell 7% in 2011, well below the industry’s 10% sales improvement.
  • In a widening investigation among automotive suppliers, Japanese companies Yazaki Corp. and Denso Corp. pleaded guilty for price-fixing on various car parts. Automotive News reports Yazaki will be fined $470 million — the largest criminal fine ever awarded for a Sherman Act antitrust violation — for fixing higher prices on two parts. Denso was fined $78 million.
  • Citing a decline in GM stock, the U.S. Treasury increased its loss estimate for its 2009 autos bailout to $23.77 billion, The Detroit News reports. That’s higher than the $23.6 billion forecasted earlier but far lower than previous estimates. The government initially projected losing $44 billion of the $85 billion package.
By Kelsey Mays | January 31, 2012 | Comments (1)


Amuro Ray

"U.S. Treasury increased its loss estimate"

Oh, big deal. It's not like we are paying for that. The PRC Gov't does. Besides, what's another $0.17 billion? Chump change.

And GM stock losing its value instead of gaining? Who would have thought?

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