Automakers are hoping that new and redesigned vehicle models will do more than create buzz in the coming year – they want the premieres to create sales.

More than fifty new or redesigned vehicle models will be introduced this year, the most in at least the past five years. Enthusiasm from automakers will build in 2013, when there will be 74 introductions, according to J.D. Power and Associates.

Global Automotive Division Vice President John Humphrey expects these developments to correlate directly with new vehicle sales. “We’ll have new, exciting products that will generate excitement to get people into dealer showrooms,” he said.

Humphrey did temper his remarks with the warning that other economic factors play a role in the outcome. Those include the unemployment rate, global debt issues and geopolitical tensions.

What do you think? Will the new models bring Americans back to the showroom floor, or will the recession hold sales back?

Americans have set a new record: The average age of vehicles on the road has reached an all-time high of 10.8 years. Why does this matter? The cars and trucks are starting to break along with the records. Now, pent-up demand is poised to drive sales higher in 2012.

Combine the aging U.S. vehicle fleet with improved credit availability and a new wave of subprime buyers returning to the market, and the result is a strong sales boost. While dealers try to maximize profit with price increases and incentive cutbacks, there is an opportunity to steal financing from the captive companies.

Credit unions can make the most of a sales increase with special offers and lower interest rates. How will your financial institution capitalize on these new opportunities?

The latest Volvo ad campaigns urge consumers to choose their strength wisely. It’s an interesting command, coming from an auto manufacturer that plans to launch a captive finance arm in 2012.

Volvo recently announced its intent to partner with Bank of America, stating that consumer loan and lease products would be available by the end of the year. Volvo Car Financial Services’ loan products will license Bank of America’s proprietary underwriting and risk-based pricing technology to support the credit process.

This development will allow consumers to receive standard market rates and promotional rates supported by Volvo Cars of North America, creating another option in an already competitive auto financing market.

Now, local financial institutions must also heed Volvo’s advice and choose their strength wisely. Focus on personal attention, member advantages, rate discounts and convenient service to remain a top choice for vehicle financing.

Not one to rest on recent success, Chrysler-Fiat CEO Sergio Marchionne, 59,addressed the 2012 National Automobile Dealers Association Convention with strong statements about the future.

Regarding fuel standards, Marchionne said that the auto industry will need to meet proposed 54.5 mpg standards by 2025 despite dealer protests. “This standard is 14 years out,“ he told reporters after the speech. “If you start giving up on projects that are 14 years out, we might as well choose another occupation.”

The Chrysler-Fiat CEO also addressed the manufacturer-dealer relationship, noting that dealers should enjoy some autonomy to effectively serve their customer base. “We have been receiving accolades in the press, but the truth is that Chrysler itself didn’t sell a single car to consumers,” Marchionne said. “It was Chrysler dealers who moved the metal, one vehicle at a time.” 

Recognizing a growing trend in auto sales, Marchionnenoted the importance of Internet presence and encouraged pricing transparency among dealers. “Price negotiating is being taken out of [dealers’] hands, and it is a trend that will only continue.”

Marchionne effectively recognized the trends, tactics and technology affecting auto sales – which do you feel will make the strongest impact on the industry this year?

As car enthusiasts gear up for the 2012 Detroit Auto Show, the American auto industry is looking stronger than it has in years, and one surprising brand is leading the way: Chrysler.

A company that seemed doomed during the worst of the recession is now making great strides in dependability, appeal and even sales. “Chrysler’s had a fairly meteoric rise,” said David Champion, head of auto testing for Consumer Reports, in a recent interview. “There’s greater attention to detail, product quality, a more refined vehicle, overall,” he told CNN.

The accolades are plenty. In the most recent J.D. Power APEAL survey, which rates how new car owners feel about their vehicles, Dodge Charger, Challenger and Durango all topped their respective segments. Consumer Reports ranks the Chrysler 300 among the best large sedans sold in America, and lauds the Jeep Grand Cherokee and Dodge Durango for their superiority in their respective SUV class.

What do you think about Chrysler’s return to the spotlight? Is the automaker here to stay, or will they lose their focus on quality when sales improve and demand increases?

Despite posting positive sales figures for 2011, Detroit automakers still have a long way to go. Sales figures are exceptionally low when compared to activity from 1999 to 2007. In addition, General Motors and Ford both lost market share. Yet, there is good news for investors and workers alike.

Both GM and Ford had their debt rating upgraded and are close to shaking their junk bond status. Ford may even pay a dividend at the end of the first quarter. Plus, new labor deals create a better chance of profitability in years to come. As new employees are hired at a lower pay scale and with more affordable benefits than their predecessors, automakers can make the best of a bad situation.

As the audit leader for the U.S. automotive practice of accounting firm KPMG stated in a recent CNN report, “They are really poised with any uptick in volume to do really, really well.”

Will the new jobs and new U.S. automotive strength have an effect on consumer confidence and local economies? We’ll just have to wait and see.

For the first time since 2004, all three major American automakers expect to post a profit for 2011!

Though reports are not yet filed and final, General Motors expects to post a 26 percent increase in profits to roughly $6.1 billion. Ford will finish at $7 billion, up from $6.6 billion in 2010. Even Chrysler, which posted a loss last year, will end 2011 on a high note.

To top off these landmark figures, automotive experts are forecasting strong industrywide sales in 2012 and beyond. Some estimates predict that 2012 numbers will land between 13.5 and 14 million, and sales may reach 15 million by 2014. As Jesse Toprak of the website TrueCar told CNN.com, “In terms of profitability and outlook, this is the best conditions we’ve had for the U.S. auto industry in a long, long time.”

This is a tremendous turnaround from the recession, which began in 2008 and nearly marked the collapse of GM, Ford and Chrysler. Federal bailouts and bankruptcies in 2009 sustained GM and Chrysler, while Ford was able to squeak by on funds it had acquired prior to the economic crisis. Yet, with consumer credit in a strangle hold, waning demand and inventory issues, the future of American automakers was still in question.

What do you think is the biggest factor in these reports? Is the profitability due to increased quality, credit availability or something more? Let us know!

It seems buyers aren’t plugging into the latest vehicle technologies, as Chevrolet reports that they will miss their sales goal of 10,000 Volts in 2011. While dealers sold 1,139 of the plug-in hybrids in November, the company is more than 3,800 shy of its 2011 goal. So why isn’t the vehicle meeting sales expectations?

 

A big argument against the Volt is its price tag. Dealers nationwide report that a $42,000 vehicle is hard to sell when another fuel-efficient option – the Chevy Cruze – is nearby with a $18,000 sticker. Plus, even if consumers are prepared for the price, availability may be an issue. General Motors survey data revealed that 72 percent of customers who wanted to buy a Volt couldn’t because their dealer either didn’t have one to sell or didn’t have the right trim level or color.

 

Sales may take another hit now that the Volt is being investigated by the National Highway Traffic Safety Administration. The investigation was launched because Volt batteries caught on fire in the weeks following three government crash tests. The automaker has engineers working with NHTSA to establish the cause of the fires and no conclusions have been reached, the company said in December.

 

Do you think electric vehicles will take off in 2012, or are the drawbacks greater than the efficiency payoff?

Finding a quality used car for a great price has become a challenge for American consumers – high demand and tight supply make a good deal hard to find. And, though used car values have retreated from their summer peak, experts predict that prices will remain high in the new year.

 

NADA Used Car Guide Senior Analyst Larry Dixon told Automotive News that the average price of 2-to-5-year-old used vehicles has increased significantly compared to prices listed before the recession began. In fact, figures for August through October were 40 percent higher in 2011 than they were during the same months in 2008.

 

Seasonal factors won’t help the situation. Dealers usually buy additional inventory in anticipation of the spring selling season, which kicks off as soon as shoppers begin receiving income-tax refunds. Because the supply of available used vehicles is already thin, experts at Kelley Blue Book predict that prices could increase three to four percent in the first quarter instead of the usual two percent.

 

As high prices hold steady and consumers struggle to find a good deal on a used vehicle, credit unions should consider developing new sales tools and resources. Creating an outlet for repossessed vehicles and reminding buyers about the resources available through Credit Union Lending Systems is a great start. What else can your financial institution do to assist consumers in this tight market?

Subprime lending is making a comeback. Subprime specialist Exeter Finance Corp. has been purchased by private-equity firm Blackstone Group, and plans to expand the subprime business are in the works. With the confirmed participation of 2,000 dealerships nationwide, Exeter expects to originate more than $200 million in loans this year. Though this growth is highly ambitious for a company that took more than four years to reach its first $200 million in loans, it is part of a larger comeback for subprime lending. Experian Automotive reports that the market share for subprime loans in the new vehicle market rose 11.1 percent in the first quarter of 2011, and used vehicles accounted for an additional 3.6 percent in share growth. That only leaves the question: When it comes to subprime paper, how low will you go to secure loans for your financial institution?