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Merry Christmas, Flat Rock.

Ford's assembly plant in the Downriver community just went from the thinnest of ice to sitting pretty. After years of building the slow-selling Mazda 6 sedan and up-and-down Mustang, Ford's new contract with the UAW makes Flat Rock the source of two of the auto industry's most anticipated cars.

The stars are aligned for the all-new Fusion that goes on sale next year to be a massive hit.

The car combines dramatic new looks with technology and fuel economy that seem perfectly suited to the times. Ford provided an advance look at the new Fusion's looks with the Evos concept car it revealed at the recent Frankfurt auto show in Germany.

In addition to head-turning looks, expect the Evos to take Ford's Ecoboost, hybrid and connectivity technologies to the next level.

The sky's the limit for fuel economy and for sales. Watch for the new Fusion to debut at the North American International Auto Show in Detroit in January.

Flat Rock's production will supplement the Hermosillo, Mexico, plant that's already bursting at the seams trying to fill demand for the Fusion and Lincoln MKZ.

The 50th anniversary of the Mustang, arguably Ford's greatest car since the Model T, comes in mid-2014. Few companies know how to celebrate and promote a historic event as well as Ford. Watch for Flat Rock to be at the center of a Mustang love-fest as the anniversary approaches.

The all-new model of the original affordable sport coupe should go into production in time for the anniversary.

The Golden Anniversary Mustang -- model-year 2015 Mustang -- will be an all-new car. It will carry the Pony Car's fuel economy, technology and performance into the 21st Century and introduce a new look for Ford's performance icon.

The new Mustang's platform could also support the much-discussed small sporty Lincoln. Ford refuses to admit that model exists in the product plan, but a handling-oriented car -- probably rear-wheel drive -- is necessary if Lincoln's going to compete with global luxury brands like BMW, Cadillac and Infiniti.

The addition of the fuel-efficient and flexible Transit commercial van gives Ford's Kansas City assembly plant a bright future.

The E-series -- formerly Econoline -- van is on borrowed time, unable to meet upcoming safety, emissions and fuel economy standards. Ford's decision to invest $1 billion to build its big, modern commercial van should give the assembly plant steady work for years.

Don't confuse this truck with the little Transit Connect van Ford already sells. The full-size Transit is the size of a UPS van or Dodge Sprinter. It's one of the leading commercial vans in Europe, where it's a mainstay for purposes ranging from plumbers' trucks to airport shuttles.

Contact MARK PHELAN at [email protected]

NADA Issues State of the Auto Industry Report

McLEAN, Va. (June 22, 2011) – The financial performance of new-car and -truck dealerships improved in 2010 despite a slow economic recovery, says Paul Taylor, chief economist of the National Automobile Dealers Association (NADA), in the trade group's latest report on the state of the industry.

New-car dealerships on average employed 50 people with an annual payroll of about $2.6 million in 2010, an increase from 2009, according to NADA DATA 2011, an analysis of the U.S. car and truck industry with an emphasis on auto retailing.

"New-car dealerships improved their profitability in 2010 through strict cost control, such as reducing rent and real estate costs, cutting advertising expenses and maintaining lower floorplan costs,” Taylor said. “However, the difficult economic recovery and brands leaving the marketplace caused 760 dealerships to close in 2010.”

Net dealership profitability before taxes increased to 2.1 percent in 2010 from 1.5 percent in 2009, the report said. New- and used-vehicle sales (in dollars) per dealership on average were up about 19 percent and 21 percent, respectively, in 2010.

“Franchised dealers are major employers and significant contributors to their communities’ economies, tax bases and civic and charitable organizations,” Taylor added.

Medium- and heavy-duty truck dealerships saw unit sales increase by 9 percent in 2010, as inventories of goods that required transport were rebuilt in a wide range of U.S. industries, the report said.

Click here for the full report.

About NADA

NADA, founded in 1917, represents nearly 16,000 new-car and -truck dealerships operating about 32,500 franchises, both domestic and international. For more information, visit

About ATD

Founded in 1970, the ATD division of NADA is the only national organization representing dealers selling and servicing new medium- and heavy-duty trucks.
Last Updated: January 17. 2011 1:00AM

Gas price hikes could hamper Big 3

But Detroit carmakers are better prepared for $3 fuel than in past

Christine Tierneyand David Shepardson / The Detroit News

Auto executives were upbeat at this year's Detroit auto show, buoyed by a sales recovery that's gaining momentum, rising profits and renewed consumer interest in American cars and trucks.

But a rise in gas prices is casting a shadow across the industry's otherwise sunny outlook.

Prices at the pump have climbed above the $3-a-gallon level that catches drivers' notice, and Detroit's automakers are more exposed to rising gas prices than most of their rivals.

General Motors Corp., Ford Motor Co. and Chrysler Group LLC displayed an impressive lineup of small and fuel-efficient cars at the North American International Auto Show. But they still generate their biggest profits from light truck sales.

The U.S. automakers benefited last year from a rebound in truck and SUV sales, underpinned by stable gas prices. Two years earlier, truck sales had collapsed when gas prices surged above $4 a gallon.

Gas prices fell back during the recession, but now they're rising again. Since late August, nationwide prices have risen 15 percent to $3.09 a gallon for regular gasoline. In Michigan, regular gas retails for $3.12 a gallon, on average.

"As fuel prices go up, people put more emphasis on fuel economy," said Ford Chief Executive Alan Mulally. "We saw previously that as gas prices get above $3, people start making different decisions."

Ford's business plan assumes gas prices will be in a range above current prices, said Mark Fields, president of the Dearborn automaker's North and Latin American operations.

"The question now, since it's gradually rising, is atwhat point psychologically are people going to be saying, 'Oh my gosh, I just spent triple digits to fill my tank,'" Fields said.

GM Chairman and Chief Executive Daniel Akerson said rising oil prices would dampen the industry's profitability by skewing sales toward smaller vehicles, with smaller profit margins.

But he said GM is better equipped now to cope with higher gas prices after rolling out small cars, such as the Chevrolet Cruze and Sonic models and a very fuel-efficient Volt extended-range electric car.

"I won't say that we would be without impact, but I'm much more confident of our viability now than I would have been a year or two ago," Akerson told reporters at the show.

Ford also feels better prepared, now that it has a more balanced lineup of cars and trucks and a more flexible manufacturing system.

"If we see changes in the marketplace, we can change pretty quickly," Fields said.

The head of Chrysler Group LLC's Ram truck brand, Fred Diaz, said the Auburn Hills automaker has developed more fuel-efficient engines with its Italian partner, Fiat SpA.

Chrysler also has added the tiny Fiat 500 city car to its U.S. lineup. "We are better able to weather a storm," Diaz said.

'Timing is really good'

Japan's leading automakers appear to be rolling out the right vehicles for a run-up in gas prices. Honda Motor Co. displayed a concept version of the next Honda Civic subcompact at the Detroit show.

Toyota Motor Corp. unveiled a family of Prius hybrids, including a wagon and a concept for a small Prius urban car, and a Lexus hybrid compact, the CT 200h.

"Our timing is really good," said Mark Templin, general manager of Toyota Motor Sales USA's Lexus division. "Once you get to $3.50 (a gallon) on a national basis, I think you're going to see people's habits change again."

Hybrid vehicle sales are closely correlated to gas prices, and last year they declined.

Auto executives weren't sure what price levels would trigger changes in behavior, and some executives said people are not as shocked by rising gas prices as they were in previous years.

"Consumers are getting used to higher fuel," said Peter Schwarzenbauer, global sales chief for Volkswagen AG's premium Audi brand. "If you look at other markets around the world, you can see the same pattern."

In presentations to investors at a Deutsche Bank conference on the sidelines of the show, U.S. auto executives said they hadn't seen any change yet in the mix of vehicles they sell in response to rising gas prices. But for 2011, "the main downside risk to profitability was cited by many as a further rise in oil price," Deutsche Bank analyst Jochen Gehrke wrote in a research note.

Automakers' advantage

In the current context, however, high gas prices provide one advantage for automakers: They increase the relative affordability of high-tech fuel-efficient models that car companies are under pressure to develop to comply with tough emission regulations coming into force in the United States and other regions.

In five years, new U.S. regulations will require all manufacturers' fleets to have an average fuel economy of at least 35.5 miles per gallon. That represents a steep 42 percent increase from current mileage requirements.

Vehicles featuring the leading fuel-saving technologies — diesels, hybrids, battery-powered electric cars — cost at least a few thousand dollars more than similar cars with gas-powered internal combustion engines.

Audi offers diesel versions of its Q7 SUV and A3 small car. Diesels, which are around 20 percent more fuel-efficient than gas-powered cars, account for 43 percent of Q7 sales in the United States and more than half of A3 sales, Schwarzenbauer said.

Audi will offer diesel versions of its A6 and A8 cars in the United States. It is rolling out gas-electric hybrids, too, but expects them to account for only 2 percent to 3 percent of global sales.

Even though most premium car buyers are less sensitive to gas price increases than mainstream car buyers, BMW sees clients reacting by opting for more fuel-efficient engines, shifting from eight-cylinder engines to six-cylinder and diesel motors, said Jim O'Donnell, president of BMW of North America.

Because gas mileage has implications for the environment as well as the cost of driving a car, even the most exclusive luxury brands are working on improving fuel economy.

Bentley Motors will offer an eight-cylinder engine for the new Continental GT, which starts at $205,000. "It's currently powered by a 6-liter W-12," said Franz-Josef Paefgen, chief executive of Bentley. "We'll offer the 4-liter V-8 as an alternative."

With two days down, attendance for public days at the North American International Auto Show is up this year.

On Saturday, 86,622 attended the show compared with 83,715 on opening Saturday day last year, which is an increase of about 3.5%, NAIAS spokesman Sam Locricchio said.

Sunday attendance was 99,111 up from 96,623 for the same time period in 2010, he said. That is an increase of about 2.6%.

The attendance goal this year is 750,000-800,000 people, Locricchio said. In 2010, about 715,000 attended while in 2009, about 650,000 were at the show, he said.

The NAIAS is in its 23rd year.

Read more: Detroit auto show attendance up | | Detroit Free Press
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