European Car Sales Aren't As Terrible As They Could Be

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1st Gear: But At A Cost

Let's not get into the European Central Bank and what they will or will not do, or the future of Europe, although all of these are related to the overall success of the European car market.


But for now, at least, automakers are providing a stimulus of their own with über cheap deals on cars, which helped propel the market up 6.1% year-over-miserable-year. That's not the big news, as Bloomberg reports they've done it across all major markets.

Registrations rose 5.2 percent in Germany, Europe’s biggest economy, reversing from a decline in August. Deliveries jumped 26.2 percent in Spain, where the government is offering incentives to trade in old vehicles to be scrapped. Rounding out the top five, sales rose 6.3 percent in France, 5.6 percent in the U.K. and 3.3 percent in Italy.


Europe, economically, is like one of those boats in a Charlie Chaplin movie that springs a new leak every time one gets covered up.

The other big story, of course, is how they did it:

German dealer rebates averaged 11.8 percent off the sticker price in September, unchanged from August, to remain at the highest levels this year, according to the data published by PulsSchlag. Fiat’s price incentives were at 12.2 percent, while French brands topped the charts at 13.9 percent.


Granted, you can probably put some of the Spanish groth on the fact that the car market has been so depressed for so long there had to be some growth at some point, but automakers seem to be trading higher profits for some kind of market share.

2nd Gear: Do You Know What's Up With Your Guard Rail?

Some of the better work that the New York Times has been doing lately have been their ongoing reports on Trinity Industries, a company that provided roadway guardrails that are now the subject of a whistle-blower trial.


I'm not sure who is in the right here, but it's been a fascinating look at something we take for granted and I recommend you check out their coverage, especially today's revelation that the company at the center of it didn't disclose five failed tests.

Brian Smith, a Trinity executive, testified Tuesday afternoon that the five failed tests were not reported, even after what are said to be problems with the ET-Plus came to light two years ago.

Trinity has defended its actions by saying that the five tests were only an experiment to see whether ET-Plus guardrails with a more “flared” design would work. The company said the flared guardrail was “never manufactured, sold or installed” on roadways.

In a statement, Trinity said the redesigned guardrail was “purely a research and development project and was never submitted to the Federal Highway Administration for acceptance.”

The plaintiffs, however, assert that since the five failed tests used the same ET-Plus rail head as those in use across the country, Trinity deliberately chose to hide the results from regulators.


The company has admitted to accidentally not disclosing a change to the guard rail and says that everything is fine.

3rd Gear: GM Considers Expansion In Lansing


People love those big full-size-crossovers-that-are-really-minivans-but-don't-have-sliding-doors-and-thus-don't-feel-like-minivans and GM is considering expanding their Lansing Delta Township plant to build more of them.

Via the Freep:

GM has not confirmed any plans for the Delta plant, where the Buick Enclave, Chevrolet Traverse and GMC Acadia full-size crossovers are built. A spokeswoman said only that GM is "developing a business case for a potential future investment" that could increase production.

But the new details shed light on the scope of the Detroit carmaker's proposed project, even without knowing what GM plans to do with the extra space. A larger body shop and general assembly building could allow the company to add or retool assembly lines, steps often taken when preparing to build a new or redesigned vehicle.


Those cars are due for an overhaul so it makes sense.

4th Gear: American Axle Offering Pension Buyouts


We like to pretend that the Carpocalypse is over, but many people are still living with the consequences. For instance, employees of some suppliers are still being offered lump sum buyouts for their pensions reports The Detroit News:

John Quiroz, a former American Axle worker of 16 years, said he plans to take the buyout because he’s afraid his pension could be eliminated if the company goes bankrupt like some suppliers did during the 2008-2009 downturn.

“I don’t believe it’s going to be there when I retire,” said the 56-year-old Detroit resident who now works at a stamping plant. “I’m going to grab it now.”

Dean Thurman, co-founder and senior partner of InvestWise Financial LLC, said pension buyouts are “the way of the future” and more employees and retirees are going to have to decide on how they want to manage their money.

“If you stick with a pension, that’s a lifelong decision,” he said. “It’s the most important financial decision of their life.”



5th Gear: VW Recalls 580,000 Cars In China


Per Reuters:

Volkswagen AG's joint venture in China, FAW-Volkswagen Automobile Co Ltd, will recall 563,605 New Sagitar models produced between May 2011 and May 2014 due to a problem with the rear axle arm of the cars, the General Administration of Quality Supervision, Inspection and Quarantine said in a statement on its website.

Volkswagen is also recalling 17,485 imported Beetles due to the same axle problem.


Well then.

Reverse: And The Malaise Era Was Born

The Organization of the Petroleum Exporting Countries (OPEC) implements what it calls "oil diplomacy" on this day in 1973: It prohibits any nation that had supported Israel in its "Yom Kippur War" with Egypt, Syria and Jordan from buying any of the oil it sells. The ensuing energy crisis marked the end of the era of cheap gasoline and caused the share value of the New York Stock Exchange to drop by $97 billion. This, in turn, ushered in one of the worst recessions the United States had ever seen.




Neutral: What's up Europe? Is it getting better or are we just riding the bottom?

Photo Credit: Getty Images

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