GM, Ford See U.S. Sales Recovery Undeterred by Japan Quake

DETROIT (Bloomberg) -- General Motors Co. and Ford Motor Co. said the recovery in their home market may continue in the face of Japan's disasters.

The March 11 earthquake that has shut factories of manufacturers and their suppliers may not have a "significant" impact on industry sales, Don Johnson, vice president of U.S. sales at GM, said Friday.

Ford said in a regulatory filing that while Japan could have an adverse effect on its financial condition and has led to a parts shortage, the impact on the U.S. economy will be "limited." Global automakers may have lost production of 585,000 light vehicles in March including 550,000 in Japan, according to IHS Automotive in Lexington, Mass.

The disruptions may result in a 1 million unit reduction in the industry's U.S. sales rate during the summer months, according to Rod Lache, an analyst at Deutsche Bank AG who predicted a 13 million rate for March.

"The issues in Japan should be temporary," Paul Ballew, chief economist for Nationwide Mutual Insurance Co. in Columbus, Ohio, said in a telephone interview. "The production issues are slowly but surely going to get worked out and facilities are coming back online. There's enough slack capacity out there to make up for lost units."

GM reiterates forecast

GM continues to see industrywide U.S. auto sales rising to 13 million to 13.5 million in 2011, including medium-and heavy- duty vehicles, Johnson said. Light-vehicle sales in 2010 rose to 11.6 million from a 27-year low in 2009. Annual U.S. deliveries were 16.8 million on average from 2000 to 2007, according to New Jersey-based Autodata.

"Based on everything I see now, I just don't see a significant slowdown happening," Johnson said on the Friday conference call with analysts and reporters. "All of that's going to depend on what we learn tomorrow, the next day and what we see from our competitors next week."

Ford's truck plant in Louisville, Ky., will be closed this week, starting Monday, due to a Japan-related parts shortage, Ford sales analyst George Pipas said on a separate conference call with analysts and reporters. The factory makes F-Series pickups and the Lincoln Navigator and Ford Expedition SUVs.

The shortage of parts, which Ford didn't identify, also will lead Ford to shut its plant in Genk, Belgium, next week, Pipas said. The factory makes the S-Max and Galaxy vans and Mondeo sedans.

'Limited' effect

The Japan crisis "should not derail the recovery in the U.S.," Jenny Lin, Ford's senior U.S. economist, said on the conference call. "The effect on the U.S. economy will be limited."

GM has also reported interruptions in output the week of March 21 at its Shreveport, La., pickup plant and factories in Zaragoza, Spain, and Eisenach, Germany.

Nissan Motor Co. and its Infiniti luxury brand both have about a 50-day supply of vehicles at the start of April, said Al Castignetti, vice president of U.S. sales for Nissan, and Ben Poore, head of North American sales of Infiniti.

"Our pipeline looks pretty good, at least where they are through May," Castignetti said in a Friday telephone interview. "Will the disruptions in Japan affect our retail ambitions? I think it will to some extent. I think the investigations that are going on are: anything we lose today, what can we get back tomorrow?"

Most vehicle production in Japan stopped after the earthquake and tsunami, which left more than 27,000 people dead or missing. Nissan said Thursday that it plans to resume all auto assembly in its home market by April 11 as suppliers restart parts deliveries.

"Production disruptions generally work themselves out because you're not fundamentally altering underlying demand," said Ballew, a former General Motors economist. "You're temporarily throwing a curve ball into availability of inventory."

GM ended March with inventory of about 574,000 vehicles, 57,000 more than a month earlier, according to a GM statement. The automaker's increased sales of the Chevrolet Cruze helped double GM's share in the compact-car segment to more than 11 percent in the first quarter, from 5.4 percent in the same period a year earlier.

Small-car 'headwind'

GM has a 73-day supply of the Cruze, said Alan Batey, vice president of Chevrolet sales, on the conference call.

Higher demand for small cars such as Ford's Fiesta and Focus "pinched" inventories, Pipas said. The Fiesta has about a 40-day supply, from 60 days at the beginning of March, and Focus inventory also declined, he said.

"Most likely, lean small car inventories will be a headwind on the industry's sales rates as we began this month," Pipas said.

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Citroen Boss Banzet Says DS Line is a Big Success

Citroen says its new DS3 sporty subcompact car is selling better than expected and is winning new customers for the French brand.

Frederic Banzet, Citroen managing director, said DS3 sales account for about a quarter of the volume for the C3 range. "This is twice as much as what we aimed for. The DS line is a huge success," he said.

Since its launch 12 months ago, the DS3, which is a sporty version of the C3 hatchback, has sold 80,000 units, compared with 300,000 for the whole C3 range, Banzet told Automotive News Europe.

He said the DS3 has a very high conquest rate and 56 percent of its buyers were new customers to the brand.

The DS line is also bringing wealthy buyers to the brand. As an example, Banzet cited the sale of a DS3 to a French couple where the husband drives a Maserati Quattroporte and his wife a Porsche. "They planned to buy a Mini, but they first tried out the DS3 and bought it instead. We would have never had appealed to these customers without the DS brand," he said.

The DS3 is the first model in Citroen's DS "distinctive series" upscale line. Citroen plans to launch the DS4, based on the C4 compact in May, followed by the DS5, based on the C5, early next year.

Banzet said the DS line "is aimed at less conventional drivers who want more emotion, more power, better quality. The DS4 and DS5 will further increase that trend," he said.

Possible softtop DS3

The DS3 will probably have new body variations such as a softtop version and special editions launched in cooperation with high-profile fashion brands to further increase the line's appeal, Banzet said.

He denied rumors that Citroen is considering launching a DS sports car that would have styling cues from the Survolt concept, which debuted at the 2010 Geneva auto show. "The DS line already has a performance car, the DS3 Racing," he said.

Citroen also may also launch a flagship DS, called the DS9, to compete with German luxury brands. The car would be a production version of the Metropolis concept unveiled at the 2010 Shanghai World Expo.

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Understanding How Hydrogen Powers Vehicles

By Levi Quinn

Cars driven by hydrogen have always captured the attention of the world on account of zero carbon emissions. While supporters of hydrogen-fuelled cars highlight the eco-friendly byproduct released by it and the need to be independent of fossil fuels, the opponents criticize the move of ignoring the greater picture. Evaluating the pros and cons of hydrogen as a fuel is, indeed, more crucial to better understand the concept.

This article aims to highlight the different aspects of hydrogen as an alternative fuel.

How does it work?

The conversion of hydrogen to provide torque for a vehicle can be performed in two ways. The first technique employs hydrogen internal combustion engines to burn hydrogen producing heat and water vapor. The burning of hydrogen also generates a small degree of other gases like oxides of nitrogen; but it is the zero carbon emissions that make hydrogen a popular alternative fuel.
Another way of employing hydrogen as a green fuel takes advantage of the fuel cells, wherein hydrogen reacts with oxygen to produce water and electricity, with the electricity forced to power an electric traction motor that powers the engine.

Advantages of hydrogen as a fuel

The advocates of hydrogen-fuelled vehicles throw the limelight on the capacity of hydrogen to provide the energy for powering the vehicle without producing carbon emissions. The byproduct of the reaction, water, can by no means cause harm to the environment.
Another fact that makes hydrogen popular is the abundance of hydrogen in the atmosphere. It can be found in water, fossil fuels, alcohols and many more sources, reducing the chances for its complete depletion. Moreover, as it is freely found in nature. There is no dependence for supplies from other countries as in the case when fossil fuels are absent.

Disadvantages of hydrogen as a fuel

Even though hydrogen is found in abundance, capturing of pure hydrogen is quite difficult. The property of hydrogen to bond easily with other elements makes the task of acquiring it in the pure form an expensive undertaking. For capacity to fuel vehicles, it has to be in its pure form to generate energy. Typically, electrolysis of water and reforming natural gas are the popular ways employed for separating it in its pure form.

Similarly, to power vehicles, hydrogen has to be compressed and stored in cylinders. With cylinders being bulky, many are not interested in this as a form of alternative energy. Moreover, as compressed hydrogen possesses less strength than in its liquid form, which is very expensive to generate, it adds to the disadvantages.

Today many companies like Ford and Renault-Nissan have withdrawn their efforts on developing hydrogen as an alternative fuel. Companies like Daimler and Hyundai, on the other hand, are on their way towards the mass production of FC vehicles that will hit the roads by around 2012.
A successful solution that will be capable of separating hydrogen producing maximum power will indeed be an essential breakthrough that this industry is looking forward to.

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