Consumer Reports' Top 10 Automakers

Today, Consumer Reports released the results of its annual car reliability survey, which includes more than 1.4 million vehicles. This is one of the most important publications of the year for consumers interested in a car’s reliability. There were few surprises in terms of which makes are most and least reliable, with Scion maintaining the top spot. Porsche, Saab, Suzuki and Pontiac saw the biggest gains while Lincoln and Mini took the biggest hits. Check out Consumer Reports full report if you’re a subscriber. We list the top 10 most and least reliable automakers below.

More on the Made-in-America Debate

Cars.com’s American-Made Index details to what degree different models from different automakers are actually made in the U.S. The winner in the 2009 AMI is the Toyota Camry, which is built in Kentucky and Indiana. However, the other side of the made-in-America debate has to do with where the profits from each car sold actually go. Basically, Toyota’s headquarters and much of its R&D is done in Japan, so buying a Camry may help employ someone in Kentucky but it also helps people employed in Toyota City.

CNNMoney.com took up this second part of the debate and interviewed an economist from the Federal Reserve Bank of Chicago to see if the profits going overseas outweigh the benefits of U.S. employment. The result isn’t as cut and dry as our AMI, of course, but it seems the short-term benefits lie where the cars are built and long-term benefits boost the company’s hometown.

Surprise! Buying American still matters (CNNMoney.com)

Used-Car Prices Hit All-Time High

Used-car prices soared in September to a new record, according to the Manheim Used Vehicle Value Index, which measures the prices and values of used cars.

As we wrote in September, low inventories led to an increase in used-car prices. Much of this is due to the Cash for Clunkers program, which sapped new-car inventories and forced dealers to scrap and recycle vehicles that might normally be trade-ins. The higher prices were also influenced by fewer vehicles from rental car companies landing in the used market and a summer slowdown at many automaker factories, according to Manheim Consulting.

While higher prices are no good if you’re shopping for a used car, it does mean that the trade-in value of your used car has also increased.

The Manheim Index rose 6.9% in September to 118.5, which is a record high. The index comprises the wholesale or trade-in value of vehicles and has a baseline of 100, which represents used-car prices in January 1995.

The consulting firm also predicted that used-car prices have peaked. With the end of Cash for Clunkers, used-car prices should begin to creep back down.

Used Car Prices Reach Record High in September (Auto Loan Daily)

Luxury Car Sales Rebound in September

Do you ever watch the business news and wonder who’s making money in the stock market when most people you know are cutting back? Inexplicably, luxury automakers saw sales bounce back in September.

While sales of Toyota were down 19% in September, Lexus saw sales go up 7%; that’s mostly because of the new RX crossover, which had an uptick of 70%.

Ford sales were down 6%, but sales at its Swedish Volvo brand were up 16%, thanks largely to the new XC60 crossover.

With relatively no new models in its lineup, BMW sales were up 3%.

Even at GM where sales were down 45%, Cadillac sales were down just 8% because of swift sales of the redesigned SRX crossover.

Tight Supply and Demand Means More Expensive Cars

Detroit’s automakers are working to bring vehicle supply and demand into harmony by reining in their reliance on incentives and discounts to sell cars. This has raised vehicle prices during the recession, a move that seems counterintuitive. The Big Three’s vehicles sold for an average of $2,000 more in the second quarter of this year than in the first quarter, according to J.D. Power and Associates.

Ford and GM are leading the drive to cut incentives after learning the hard way that a bloated inventory and huge rebates aren’t the best way to make a profit. Rebates can help improve market share, but they cost automakers money. The Cash for Clunkers program teamed with a summer production shutdown created low inventory levels that haven’t been seen in years.

This is a lesson that the Big Three’s competitors have already perfected. Toyota offered an average discount of $1,584 per vehicle this year, while Honda offered $1,567, according to Autodata. Meanwhile, Ford offered $2,811 discount per vehicle; GM, $3,418; and Chrysler, $4,407.

Detroit’s automakers are attempting to match vehicle supply to demand more closely and decrease their reliance on incentives. This has cost consumers $900 million in net pricing in North America during the second quarter. The average price of a Detroit automaker’s car rose 7.8% from $25,567 a year earlier to $27,571 in the second quarter of this year, according to J.D. Power.

Unfortunately, what is healthy for automakers will cost consumers.

Buying a Car Gets Pricier as GM, Ford Cut Inventory (Bloomberg News)

Chrysler Returns to Leasing for 2010 Models

After a hiatus that covered the 2009 model year, Chrysler will return to leasing for all 2010 Chrysler, Dodge and Jeep vehicles. New 2009 vehicles still on dealer lots will get 0% financing for 72 months.

GMAC Financial is offering both the leasing and financing deals for Chrysler. The company discontinued the leasing program last summer when sky-high gas prices forced a shift in the car market and permanently injured the company, which eventually had to file for bankruptcy.

Chrysler’s lease deals go into effect Thursday.  

Survey Shows Buyer Hesitation for Shopping Small

With federal requirements for higher mileage cars looming, car shoppers may have fewer large choices in upcoming years. Automakers have to find a median between what the U.S. market wants — traditionally larger vehicles — and increased fuel economy, which often means downsizing.  

A recent study from AutoPacific surveyed more than 32,000 new car and light truck buyers in the U.S and asked what American car buyers want and how willing they are to downsize into smaller cars. The study found that while people are willing to buy a more fuel-efficient car, they don’t want to significantly downsize.

AutoPacific asked buyers of all types of cars what was important in their current purchase, how satisfied they are with their car and what changes they would make. So what did the buyers of small cars like the Toyota Yaris, Honda Fit and Chevrolet Aveo want, according to the survey? More acceleration, technology and cargo room. With their most recent purchase, buyers said they made a sacrifice for better fuel economy, but according to George Peterson, president of AutoPacific, “in the future they want something more — bigger, faster and with more bells and whistles.”

Dealer Supplies Hit Lowest Levels in Over 30 Years

Cash for Clunkers gave a much-needed boost to the auto industry but has left dealers with their lowest inventory levels since 1975. Still, this is not a terrible problem to have.

The number of vehicles on or being delivered to dealer lots fell to 1.4 million vehicles at the end of August. That’s 49% less than August 2008, according to WardsAuto.com.

While consumers might lose out during the month of September as dealers pull back on incentive spending and the number of model choices is limited, low inventory marks a win for auto workers. The cars and trucks on dealer lots have hit their lowest levels since 1975, and this means auto plants like Ford’s Wayne, Michigan Assembly Plant have been working overtime to churn out the top-selling Focus.

Despite low supply, demand is expected to also shrink, following the end of the federal Cash for Clunkers program and because September is normally a lower sales month than August in a typical year.

Less Supply Is Good News (Detroit Free Press)

Are Some Toyota Dealers Increasing the Price of the In-Demand Prius?

A year ago, the Toyota Prius was a smoking-hot commodity due to record-high gas prices. In fact, used Priuses were selling for more than new models cost because dealers simply couldn’t keep the new models on their lots.

Now it appears as if Cash for Clunkers has led to another Prius shortage and subsequent price markup.

Affordable, fuel-efficient cars like the Toyota Corolla and Ford Focus got a lot of media attention while they occupied the program’s top-sellers’ spots, and the Prius was flying off dealership lots, too. Once again, inventory ran low, which led some dealerships to add a market value adjustment (in other words, a price increase) of up to $5,000.

We also reported earlier that Toyota is having trouble making enough battery packs for its legendary hybrid, which is slowing production. This could also factor in the Prius-shortage.

With the Clunkers program over, though, and a little diligent searching on the part of consumers, buyers in the market for a Prius should be able to find one. Meanwhile, the market for highly efficient hybrids remains Toyota’s domain thanks to the Prius.

Exclusive: Rogue Toyota Dealers Price Gouging on Scarce 2010 Prius’s (Daily Tech via Autoblog)

Clunkers Depletes Inventories

At least it’s not the worst kind of problem the auto industry has faced in the last two years.

Now that the Cash for Clunkers program has come to an end, dealers find their new-car inventories depleted and their used-car supplies — already thin in a market that has favored used vehicles — greatly reduced.

Car buyers will likely have to deal with slim pickings for most of September as dealers reload — a process that usually takes 30-45 days as factories ramp up production. Supplies of the Clunkers program’s most popular vehicles might be especially hard to find.

The Toyota Corolla, Camry and Prius; Honda Civic; and Ford Focus were best-sellers under Cash for Clunkers.

Buyers could also see a jump in used-car prices. While all of those scrapped clunkers might not have ended up on used-car lots, the pool of used cars has likely been reduced enough to drive up the cost of the average used car.

‘Cash for Clunkers’ Deals Siphon Vehicle Supply on Lots (Los Angeles Times)