Why Luxury Sales Could Thrive in 2013

Leather-clad luxury cars may seem the domain of an affluent few. After all, this year's best-selling luxury car through March — the Mercedes-Benz C-Class — ranked 51st among all cars. But the group may be poised for a comeback. Total sales improved 12.3% in the first three months of 2013, outpacing the industry's 6.4% gain. By year's end, one in every 7.5 new cars sold in 2013 could be a luxury model.

That would buck a trend several years in the making. Luxury cars, including Buick, hovered around 13% of the new-car market from 2005 to 2010. In 2011 that share slid to 12.9%, and in 2012 it tumbled to 12.6%.

It seemed counterintuitive, given the wealthy are alive and well.

Fisker Edges Closer to Bankruptcy as New Details Emerge

The travails continue for Anaheim, Calif.-based Fisker. Executives at the struggling plug-in-vehicle maker met with Congress Wednesday, and new details emerged on Fisker's government dealings.

It goes like this. The U.S. Department of Energy approved $529 million in low-interest loans to Fisker in 2010 as part of its $25 billion Advanced Technology Vehicles Manufacturing program, which met political fire and ceased loans to any companies in 2011. But now the Detroit News reports Fisker received $32 million in program loans in February 2011 under the notion — as required by the DOE — that it had begun to build the Karma plug-in sedan. Karma production did not, in fact, begin until months later. The federal government found out, and in June 2011, after receiving $192 million of the $529 million awarded, Fisker lost its D.C. sugar daddy.

AAA: Cost of Car Ownership up 2% This Year

If you're planning on spending some of your tax refund on a new car or car maintenance, plan to put aside a bit more. According to a AAA study, the cost of owning and operating a vehicle has increased by nearly 2% in 2013.

The results of AAA's annual Your Driving Costs study show that U.S. motorists are paying an average of 1.96% more to own and operate a sedan. The study looks at the annual cost of fuel, vehicle repairs, insurance rates, taxes, license fees, rates of depreciation and average finance charges for a new car driven over five years and 75,000 miles.

"Many factors go into the cost calculation of owning and operating a vehicle. This year, changes in maintenance, fuel and insurance costs resulted in the increase to just over 60 cents a mile," John Nielsen, AAA director of automotive engineering and repair, said in a statement. 

Here's how each category of vehicle fared, based on driving 15,000 miles a year:

GM and Ford Team Up on New Nine- and 10-Speed Transmissions

In terms of the auto industry, Detroit is not exactly a big town — discussions between automakers happen more often than people realize, given that everyone working at these companies lives as neighbors. But General Motors and Ford Motor Co. have just announced a formal collaboration of their own, a new program to jointly develop nine- and 10-speed automatic transmissions.

The transmissions will be used in future cars, trucks and SUVs at both companies. The nine-speed automatic will be a front-wheel-drive transmission, while the 10-speed is destined for rear-drive applications. One company will develop the nine-speed and the other will develop the 10-speed, but neither company is saying which is taking on which.

Small-Car Leases on the Rise, Lease-Swap Company Says

Leases are gaining traction in an unlikely area: the small-car class. This is according to Swapalease.com, which released a report on Thursday that said small-car leasing swaps boomed 33% in 2012, outpacing 2011's 18% growth. The Cincinnati-based website counts everything from entry-level runabouts to traditional non-luxury subcompacts and compacts in the group, whose growth exceeded trucks (up 26%) but not luxury cars (up 38%).

Small cars took up a bigger piece of Swapalease.com's pie, but overall inventory increased just 9%. Spokesman John Sternal told us midsize cars, by contrast, were the big loser.

Does that mean actual leasing among small cars has improved? It's hard to say. The increase in overall small-car popularity in 2012 could be responsible for some of the leasing gain. New-car sales for all traditional non-luxury small cars improved 17.2% versus 2011, according to Automotive News data. Leasing overall continued to grow in 2012; CNW Marketing Research reported year-over-year leasing gains every single month.

How Korean Tensions Could Affect American Car Shoppers

Following a nuclear test and subsequent global sanctions, escalating tensions on the Korean peninsula have North Korea issuing near-daily threats against its southern neighbor and the U.S. — and the latest developments have left nearby nations girding for conflict. Keep holding your breath; one top U.S. admiral told Congress he couldn't recall a more tension-fraught period since the Korean War ended in 1953. Should aggressions against South Korea occur, it would doubtless affect the country's huge auto industry, and the shock waves would hit U.S. dealerships in a matter of weeks.

Just how big is the South Korean auto industry? Here's a snapshot. Hyundai claims its massive Ulsan facility, which employs more than 34,000 people on the country's southeast coast, is the world's largest auto plant. And GM Korea, which runs five assembly plants in South Korea and a sixth in Vietnam, builds a quarter of all Chevrolets sold across the globe.

Fisker Lays Off 75% of Workforce as Bankruptcy Looms

Leonardo DiCaprio may love his Fisker Karma, but the California automaker is listing like the Titanic. Less than a month after founder Henrik Fisker quit, the boutique car company laid off some 160 employees, the Detroit News reports, as it struggles to secure funding. That's about 75% of its workforce. Automotive News reports the automaker is now facing a federal lawsuit for failing to give those employees adequate notice.

Fisker set sail in 2007, but the voyage has seen icebergs galore. We reviewed the $103,000 (including destination charge) Karma plug-in hybrid in March 2012, and we found it, well, quirky. That same month, Consumer Reports bought a Karma that promptly broke down. Fisker recalled the car twice during the next five months, the second time for possible electrical problems that could lead to a fire.

Now the Detroit News estimates Fisker has just $30 million left. Just how little is that? Consider this: Bloomberg News reports the automaker had raised more than $1 billion from private sources plus $529 million in low-interest Department of Energy loans — part of the agency's controversial $25 billion Advanced Technology Vehicles Manufacturing program, whose recipients range from Tesla to Ford. The DOE stopped payments in 2011 after Fisker failed to meet conditions for the loan. Having already spent $193 million of the funding, Fisker suspended plans to build a more affordable car called the Atlantic at a shuttered GM plant in Delaware.

Detroit EV Maker to Build All-Electric Sports Car in August

Another day, another EV startup. This time it's Detroit Electric, a company that is resurrecting a brand not seen in more than 70 years. Former Lotus executive Albert Lam revived Detroit Electric in 2008, and now the company plans to launch a two-seat electric sports car next month. Headquartered less than 5 miles from GM's Renaissance Center in downtown Detroit, Detroit Electric promises to bring 180 jobs to the region by year's end.

Detroit Electric will build the car in Michigan in August at an unspecified site capable of manufacturing 2,500 cars a year. Expect a global debut for the car, teased in the photo above, at the Auto Shanghai 2013 auto show on April 20. The startup promises "two other high-performance models" by the end of 2014.

The EV maker has more big promises, including a "major partnership with a global carmaker" — all but essential given the recent struggles of EV startups. Aptera Motors closed its doors in 2011, found a Chinese buyer in 2012 and has yet to mass market any car today. Think closed shop in Indiana after multiple bankruptcies. Plug-in carmaker Fisker is struggling to find funding. Tesla has the most sustainable record, but we’ll have to wait and see how Detroit Electric fares.

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Volkswagen Could Build Full-Size SUV in Tennessee

Volkswagen could build a new full-size SUV in its 2-year-old Chattanooga, Tenn., plant. The Detroit News reports the automaker is mulling an expansion in Chattanooga, which produced around 180,000 Passat sedans in 2012, to assemble an SUV designed specifically for the U.S. market. That new three-row vehicle would compete with the likes of the Ford Explorer, Chevrolet Traverse and Honda Pilot. The automaker's current Tiguan battles their smaller siblings — the Ford Escape, Chevrolet Equinox and Honda CR-V — while Volkswagen prices the five-seat Touareg against luxury SUVs like the Lexus RX.

The new SUV is a long time coming. Volkswagen Group of America CEO Jonathan Browning told us in 2011 that a full-size crossover would be "a very natural extension to the brand." And at January's North American International Auto Show, VW showed a three-row CrossBlue concept SUV (above) that looks close to production ready.

Visteon's e-Bee Demonstrator Creates a Buzz

A new concept car has just been unveiled, but it's not from any automaker you've heard of. The car began life as a Nissan Leaf, but sit inside and you won't recognize anything from Nissan — there is no dashboard, no glove box, no visible airbags, no vents, no radio. No rearview mirror even.

This is the Visteon e-Bee, and it's a technology demonstrator from one of the world's biggest automotive suppliers — the companies that sell automakers the parts that become the cars you buy.

The "e" is for electric vehicle, "Bee" for the way it operates in concert with its surroundings — just like the insect, it is meant to be part of a larger, connected "hive" of vehicles, sharing information, traffic status and more. It represents a fascinating look at what the inside of the average new car could look like in the near future. Unlike many concept cars seen at auto shows, the e-Bee is not based on pie-in-the-sky ideas — all of the technology in the car actually works, and many of its systems and features will be in your driveway by the end of the decade.