A week after reports that the original $1 billion allocated for the Cash-for-Clunkers program was running low, President Obama today signed into law an additional $2 billion that will keep the program running and fuel a rebounding auto industry.

In just two weeks since the original bill was passed the Cash-for-Clunkers or CARS (Car Allowance Rebate System) has netted $920 million in rebates and has accounted for more than 220,000 new car sales.

The boost to the auto industry has prompted speculation that total car sales for the year, which only a few months ago were pegged at under 10 million, will now exceed the 13 million unit mark.

Automakers are also looking to boost production output as inventory levels have dropped to their lowest levels since 1992. Measured in the number of days worth of inventory a dealer has on its lot, Chrysler dropped its inventory from 71 to 40 days, Ford shed 9 days (from 57 to 48) while both GM and Toyota lost 18 days, from 82 to 64 and 47 to 29 respectively.

[Source: Automotive News 1 and 2]

Auto parts maker and engineering firm ZF Friedrichshafen AG says that its new lineup of driveline modifications and transmissions, when combined, can deliver up to 18 percent better fuel-consumption on traditional gasoline powered cars. The results are even more impressive for hybrids, with total fuel-economy rising 30 percent.

Harald Naunheimer, VP of research at ZF delivered the news at the Center for Automotive Research’s Management Briefing Seminars in Traverse City, Michigan, earlier this week. Naunheimer said all of his company’s new initiatives will make their way into production cars starting next year.

Included in the list of fuel-saving technologies are lighter transmissions with more gears, as well as electric, rather than mechanical, features. Electrical power steering can account for a savings of 2 to 3 percent, while electric active roll stabilizers add another 1 to 2 percent.

A start-stop function, which shuts off the engine at stop lights or when stuck in traffic, can save up to 5 percent while a new, lighter transfer case for all-wheel drive cars can add an additional 1 to 1.5 percent.

The single largest way to boost fuel-economy, however, is with a transmission with more gears. ZF says its new 8-speed box can deliver a 6 percent boost in fuel economy over a six-speed unit. Lexus already uses an 8-speed transmission and BMW recently launched a new 8-speed box in the flagship 760Li (pictured above). This, however, raises the issue of cost.

With an 8-speed in a six-figure BMW, we’re unlikely to see the same technology make it into a Toyota Corolla any time soon. Still, the race is on for improved fuel-consumption as the Obama Administration’s new CAFE regulations will see fleet averages for passenger cars rise to 35.5 mpg for 2016, up significantly from 27.3 mpg for 2011.

[Source: Automotive News]

If you’ve been trying to decide whether or not to trade in your gas guzzler on a new fuel-efficient model and cash in on the government’s $4,500 CARS rebate, you’ve waited too long. The program, funded with 1 billion dollars of tax payers’ money is already running low – just six days after the Obama Administration officially launched it.

According to the NHTSA (National Highway Traffic Safety Administration), by the end of the Wednesday work day dealers had submitted 22,782 claims for a total of $95.5 million. 

At that rate the program will run out of money long before the planned CARS (Car Allowance Rebate System) expiration date of November 1st. Reuters cites Bailey Wood, a spokesman for the National Automobile Dealers Association, who speculates the program will run out of funding before the date.

The Cash-for-Clunkers legislation had been criticized heavily before being passed for not being sufficiently funded. 

The good news out of this is that if the CARS rebate system is used up (early or not) it is expected to generate as many as 250,000 car sales – something which should help speed up an economy that already shows signs of recovering.

Reuters cites an unnamed inside government source for the tip, who says the CARS program wil be suspended shortly. There is no word on if there are plans to find additional funding and re-instate Cash-for-Clunkers at a later date.

[Source: Automotive News]

In a bid to get inventory moving out of showrooms in a hurry, Chrysler has decided to offer a new incentive program that would double the value of the government’s cash-for-clunkers program.

Chrysler will offer $4,500 off (or 0 percent financing for 72 months) on most of its 2009 inventory – excluding the Dodge Challenger, Sprinter, Jeep Wrangler and all SRT products. The $4,500 incentive is even available on vehicles that do not meet the requirements for the cash-for-clunkers program, which was recently signed off on by President Obama.

Cash-for-Clunkers, or CARS (Car Allowance Rebate System) gives a $4,500 rebate on a new car when it gets 10 mpg or more better fuel mileage than the one traded in. The rebate is $3,500 on vehicles that get 4 to 9 mpg better or trucks that get 2 to 4 mpg better.

Chrysler, now under new leadership from Italian automaker Fiat is hoping the incentive will help sales rebound. Chrysler has been hit particularly hard this year with sales down 45.7 percent for the first six months.

When combined, these two offers mean a $17,090, Dodge Caliber SE could leave showrooms for as little as $8,090.

Chrysler’s “Double Ca$h for Your Old Car,” incentive starts tomorrow and runs through August.

[Source: Automotive News]

BMW is looking at bringing back for-cylinder engines to the U.S. in order to meet tough new fuel-economy regulations. BMW’s engineering boss, Tom Baloga, told Bloomberg that the smaller and more fuel-efficient engines were likely needed in order to meet the Obama Administration’s 2016 CAFE regulations, which call for a new fleet average of 35.5 mpg – up from 27.3 mpg for 2011.

Last year BMW’s fleet-wide average was 26.5 mpg.

Currently BMW sells the 1 Series, 3 Series, 5 Series and X3 with four-cylinder engines overseas, where fuel-efficient diesel options are also popular. In fact, Baloga says that due to the high volume of diesel sales in Europe, the automaker’s current European fleet average would already meet the 2016 CAFE regulations.

BMW currently offers a high-performance 3 Series diesel, the 335d, in the U.S., but Baloga says BMW will not rely on diesels to offset less fuel-efficient models as demand for diesels in the U.S. isn’t high enough to make a difference.

The real issue in bringing over four-cylinder engines, says Baloga, is keeping the focus on performance. That being said, the four-cylinder models are likely to either be turbocharged or used in significantly lighter models.

BMW is also looking at growing its offering of 1 Series models in the U.S., with numerous new models planned. The higher sales volumes of the more efficient engines will also help to increase BMW’s fuel-efficiency fleet average.

[Source: Bloomberg]

Today the sun rose on a New General Motors, a move which will also see the sun set on a lot of people’s careers. GM emerged from bankruptcy protection at 6:30 a.m. Eastern Time with news of a serious corporate restructuring plan that will take effect over the next few months.

Due to leadership (and in some cases arm-twisting) by the Obama Administration, the new GM,  headed by CEO Fritz Henderson, is poised to return to its once-great status after shedding its debt and healthcare obligations by a massive $48 billion. Much of this comes as the UAW made serious concessions in accepting a new contract with the automaker. GM also hopes to significantly reduce its cash-burn after eliminating a third of it’s dealership network. Additionally, the automaker looks to profit from the sale of the Saturn, Saab and Hummer brands, as well as through selling-off much of its stake in its European operations, including Opel to Canadian autoparts manufacturer Magna International.

“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” CEO Fritz Henderson said in a statement.

Henderson’s plan will see 6,000 (or 20 percent of) white-collar employees lose their jobs by October, with 35 percent of all executives being dismissed. Many executives will be cut from the company’s old Automotive Strategy Board and Automotive Product Board, a complex, multi-tiered system of management which will be axed in favor of a small committee that will meet weekly to make decisions about the future of the company.

Henderson says the move will cut those making the decisions at GM in half as the automaker focuses on its four key brands – Chevrolet, Buick, GMC and Cadillac.

Sales and Marketing will also no longer be under the leadership of one individual, as that part of the company is split. Sales will report directly to Henderson, who was unclear about what that meant for the current Sales & Marketing boss, Mark LaNeve. GM will also bring back veteran Bob Lutz to manage marketing, as well as design, brands and communications.

This will be a particularly vital role as GM looks to introduce a new line of vehicles into the marketplace to help re-brand the company. In total 10 new vehicles will launch in the U.S. in the next 18 months, with 17 overseas.

[Source: Automotive News]

Late Sunday a judge approved the sale of GM’s assets to a group comprised of the U.S. government, the UAW and the Canadian and Ontario governments under the name NGMCO, Inc. The decision will see GM exit bankruptcy court quickly with the ‘New GM’ assets going to NGMCO, while the ‘Old GM’ assets will be sold off to the highest bidder.

Judge Robert Gerber then placed a stay on the proceedings to for four days to hear objections or appeals, but as most of those have already been dealt with, GM is expected to reemerge as a new government-owner company by Thursday.

In a statement Judge Robert Gerber said that he would, “prevent the death of the patient on the operating table.”

Gerber pointed out the seriousness of the matter and the alternative, stating that, “The only alternative to an immediate sale is liquidation – a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.”

The New GM will be majority owned by the U.S. government with a 60 percent stake in the automaker. The UAW will get 17.5 percent, while the Canadian and Ontario governments will get 12 percent.

In response to the news GM’s CEO Fritz Henderson released a statement saying that, “A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay.”

The Obama Administration’s auto task force has said that sale of GM back to the private sector could begin as early as next year.

[Source: Automotive News]

After passing through both the Senate and the House, the Cash-for-Guzzlers bill has been signed by President Obama. Known also as Cash-for-Clunkers, the official name of the legislation is CARS – the Car Allowance Rebate System.

Vehicles that are traded in must get 18 mpg or worse and be newer than 25 years old. For those who trade in their guzzler for a vehicle that gets (on average) 4 mpg more will receive a $3,500 voucher toward the new car, while those who choose a vehicle that gets 10 mpg more than their current auto will receive the full $4,500.

The rules are slightly different for trucks as the full $4,500 voucher will be available for gas guzzling trucks when traded in on a new truck that gets 5 mpg more.

The hope is that this new legislation will boost auto sales. Similar initiatives (but which target old cars and not gas guzzling ones) have been a huge success in countries like German.

The CARS act will take effect at the end of July.

Those looking for more info can visit the CARS website here:

http://www.cars.gov/

[Source: Automotive News via Autoblog]

The CEO of auto parts supplier Bosch today told a crowd at the National Summit for Clean Transportation that U.S. automakers must adopt diesel technology in order to meet the strict new CAFE standards the Obama Administration has laid out. The new legislation will see fleet averages for passenger cars rise to 35.5 mpg for 2016, up significantly from 27.3 mpg for 2011.

The words of Bosch CEO Peter Marks were echoed by Borg Warner CEO Tim Manganello, who noted that diesel engines get 30 percent better fuel economy over gasoline engines, with 50 percent more torque, while emitting 25 percent fewer emissions.

Marks then called on General Motors, Chrysler and Ford to act now to bring diesels to the U.S.

Both men, whose companies make parts for fuel-efficient cars like the Volkswagen TDI (pictured above), also expressed their lack of optimism in both the electric car and hybrids, noting that there are still several roadblocks in getting the electric car to the mass market and that hybrids don’t often deliver the fuel-economy they are touted to.

Manganello said that, “hybrids are not as attractive as the PR hype,” noting that 72 percent of hybrid owners choose not to purchase a second one.

Of the Big Three, Ford Chairman Bill Ford was in attendance and came to the defense of both hybrids and electric vehicles, noting the critical acclaim that the 2010 Fusion Hybrid has achieved – not to mention its fuel-economy. And to rebuff the suppliers skepticism about bringing electric vehicles to market, Bill Ford stated that the Ford Motor Company has a pure electric vehicle coming out this year and an electric Focus the year afterward.

Using the opportunity to promote Ford’s EcoBoost engine, a turbocharged V6 that gets V6 fuel economy and V8 power, Bill Ford did say that FoMoCo was ready with diesels if the North American market was open to them.

Ford is the second largest producer of diesel engines in Europe, he told the audience, before stating that if there was demand FoMoCo could easily bring them over for use in U.S. vehicles.

[Source: Wards Auto & The Detroit News]

Late yesterday the House of Representatives approved a bill that would offer consumers up to $4,500 to trade in their vehicle on a more fuel-efficient machine. The legislation must now go before the Senate before President Barack Obama is expected to give it final approval.

The bill passed with a strong majority of 298 to 119 and has also received the support of U.S. automakers.

Still, the CARS Act as it is being called is significantly different from the successful incentive programs used in Europe as its aim is not to sell cars, but to sell fuel efficient cars.

Vehicles that are traded in must get 18 mpg or worse. For those who trade in their guzzler for a vehicle that gets (on average) 4 mpg more will receive a $3,500 voucher toward the new car, while those who choose a vehicle that gets 10 mpg more than their current auto will receive the full $4,500.

Programs in Europe, like the incredibly successful one in Germany, target older cars, rather than gas guzzlers.

The CARS act is a temporary measure and is being funded through a $4 billion fund. It is also not retroactive.

If passed in the Senate and approved by President Obama, it is likely to go into effect 30 days afterward, which may mean consumers won’t be able to cash in on incentives until August 1st – a full six months after programs like the one in Germany were put into effect.

[Source: Automotive News and LeftLaneNews]