U.S. Sees Strong Sales in 2012

After 2011 starts with buoyant expectations and then goes through a roller-coaster year driven by devastating natural disasters in Asia, 2012 begins on a cautious note. Many auto makers and forecasters predict modest or flat growth for the coming year, with estimates ranging from 13.2 million units to 13.8 million for the U.S. WardsAuto offers one of the more optimistic forecasts of 14.4 million. 

The 2012 North American International Auto Show exhibits every sign of a recovering industry with dozens of strong new products and concepts. Detroit Three highlights include the new Ford Fusion, Cadillac ATS and Dodge Dart. The Lexus LF-LC concept is the star of the show, but the Honda Accord Coupe, Audi Q3 and Lincoln MKZ concepts also attract attention. 

After being shut out by Detroit auto makers in 2011, foreign brands win both the North American Car and Truck of the year awards. The Hyundai Elantra bests the Ford Focus and Volkswagen Passat for car honors and the Land/Rover Range/Rover Evoque beats out the BMW X3 and Honda CR-V in the light truck category. However, all the finalists are built in the U.S., with the exception of the Evoque, which is imported from Europe. 

The Hyundai brand achieves 36 mpg (6.5 L/100 km) corporate average fuel economy in 2011, four years ahead of the U.S. government’s rule for 2016 when all auto makers are mandated to achieve roughly that fleet average in the U.S. 

But in a harbinger of things to come, consumer watchdog dog groups complain models such as the Hyundai Elantra do not achieve stated mileage claims. In November, the Environmental Protection Agency agrees with critics and forces Hyundai and Kia to restate mileage on numerous models, a move that could end up costing the Korean auto makers hundreds of millions in fines, reimbursements and lost business. 

After facing much skepticism about whether fullsize pickup truck buyers would accept a turbocharged V-6 in place of a burly V-8, Ford quiets critics when it is forced to increase production of F-150 pickups equipped with its 3.5L EcoBoost V-6. After selling 100% V-8s in 2010, the take rate for the V-6 EcoBoost is running at more than 40% in early 2012. 

In early January WardsAuto breaks the news the next-generation version of the Ford F-150 pickup, America’s best-selling vehicle, will feature extensive use of weight-saving aluminum, including doors and fenders. Dubbed P552 and due in 2014, the move will mark a breakthrough in the fullsize-pickup market where steel long has been the gold standard. 

GM announces it will enhance the structure of its Chevrolet Volt extended-range electric vehicle to reduce the risk of a post-crash fire involving the car’s battery pack, but plans to stick with its current battery chemistry and cooling-system design.An investigation reveals the National Highway Traffic Safety Admin. did not de-power the battery pack of a Volt crashed during routine safety testing. The scrapped test car’s battery pack caught fire several weeks later, sparking an unusual partisan debate over the car’s safety and reinforcing the Volt’s status as a political football.  

The NHTSA announces in January it is mulling changes to its 5-star crash-assessment testing that will put emphasis on new electronic accident-avoidance technologies. 

Nissan says its new B-car plant in Aguascalientes, Mexico, is scheduled to open in late 2013 and bring the auto maker’s direct employment in the country to nearly 13,500.That will make the Japanese auto maker nearly as big in Mexico as Volkswagen, which employs more than 15,000 workers at its sprawling Puebla complex. 

Honda says it will invest $98 million in its Anna, OH, engine plant to build its next-generation powertrain technologies. The Anna plant will make high-tech pulley components for a new continuously variable transmission, which the auto maker says is part of its “Earth Dreams” powertrain-technology lineup, set to be deployed for the first time in the U.S. in the ’13 Honda Accord. 

In early February, former U.S. President George W. Bush tells the National Auto Dealers Assn. annual meeting that he was philosophically opposed to the $17.4 billion in credit to General Motors and Chrysler, but approving the bridge loans in the waning days of his presidency in 2008 was the right thing to do.When the auto industry hit the ropes, his advisors, chiefly Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, warned him that ignoring Detroit’s plight could put the economy into a second spin. “If not for the bridge loan, the gains we had made could have been affected and confidence in the country destroyed,” Bush says. 

As the Obama Admin. pushes for passage of tough corporate average fuel economy rules, NADA insists the technology to achieve the higher standards will drive up the costs of cars, pushing millions of American consumers out of the market. The U.S. Environmental Protection Agency estimates the new CAFE proposals will add more than $3,000 to the cost of a new vehicle. NADA estimates it will cost more. 

In February, two key Ford executives, Derrick Kuzak, Ford group vice president-global product development, and Lewis Booth, chief financial officer, announce they will retire in April. 

As the year progresses, opposition mounts against California’s passage of the Advanced Clean Cars Program, a set of emissions standards that call for 1.4 million zero-emission and plug-in hybrid-electric vehicles on roads in the state by 2025.If the regulatory package is implemented as written, with the mandate that ZEVs and PHEVs account for one of every seven new cars sold in the state in 2025, California will see another vehicle-market downsizing sometime around 2018, critics say. 

In late February, Fisker Automotive founder Henrik Fisker says he will focus on building brand awareness as executive chairman, while handing CEO duties to former Chrysler president Tom Lasorda. The transition comes as Fisker’s U.S. operations are in limbo, having laid off workers at a Delaware plant destined to produce its second vehicle, dubbed Project Nina, a less-expensive extended-range electric vehicle.Fisker received $528.7 million in Department of Energy loan guarantees in 2009 but has drawn less than a third of that amount, about $190 million, because it recognizes it will not meet agreed-upon product-launch deadlines. 

North American auto makers are back on sound footing in 2012 in terms of utilizing their assembly-line capacity as the industry rebounds from years of market-driven cuts. Manufacturers, including those building medium- and heavy-duty trucks, posted a 74.1% capacity-utilization rate in fourth-quarter 2011, the best since 75.3% in 2005. The rate was 62.6% in fourth-quarter 2010.Utilization for full-year 2011 was 70.7%, the highest since 73.7% in 2007. It also was well above 65.1% in 2010 and the low-water mark of 44.8% in recession-led 2009.Following a growing trend in the U.S., Volkswagen of America in March announces it will add a third shift at its Chattanooga, TN, assembly plant in 2012, adding 800 new jobs in order to meet demand for the Passat sedan. 

 Automotive legend Carroll Shelby, an auto racer, entrepreneur and philanthropist whose name is synonymous with old-school muscle-car performance, dies May 10 at age 89. 

After making tweaks for a year, the Obama admin. announces in late August aggressive new regulations that will nearly double fuel economy by 2025 to 54.5 mpg (4.3 L/100 km). With a few exceptions, most auto makers endorsed a framework for the standards in 2011, and welcome a new national standard while also acknowledging the new regulations will be difficult and costly to achieve. 

In November, Ford revives the position of chief operating officer, reassigns key top executives and adds duties for a few, as it prepares for Alan Mulally’s eventual departure – though the auto maker says its current CEO will stay on at least through 2014, maybe longer. Filling the COO slot is Mark Fields, 51, a move that has been expected for months, but Mulally, 67, makes no commitment to Fields as his eventual successor. 

Hurricane Sandy causes major damage and destruction on the East Coast, taking what should have been a 55-month high for U.S. sales in October and knocking an estimated 5% to 6% of volume off the month’s results. 

Barack Obama is re-elected U.S. president. His controversial rescue of GM and Chrysler is credited with playing a pivotal role in the final days of the election. 

The 2012 sales year looks far better by November than pessimists predicted months earlier, posting about 14.4 million light-vehicle deliveries, about where WardsAuto predicted it would be.