Check Your Mirrors
Odds and ends about cars and the car business
By Brendan Moore
09.22.2008
WALL STREET woes are probably going to affect Main Street in regard to auto sales. Both consumer and commercial credit is tightening considerably. Consumers are having a tougher time getting approved for auto loans and auto leases are getting scarce. The buyers that do get approved are not getting the same sort of terms that they were getting a year ago from the banks and the captive finance companies because their cost of funds is much higher. Furthermore, the costs associated with inventory financing at the dealerships have risen substantially, which translates into the dealer needing more profit on each vehicle in order to cover his operating costs. This makes the average purchase price higher. What all this means is that fewer prospective buyers are getting approved, and a smaller percentage of those that do get approved can actually afford the payments. Take this one more step further, and you can see why some auto analysts are saying that 2009 will be an even worse year for auto sales than 2008 is shaping up to be.
FORD says that even in a slowing European economy, it expects to sell more of the new Ford Fiesta than the outgoing model. Ford is forecasting sales in excess of 400,000 units in Europe for the new car, the sixth-generation of the Fiesta. Ford sold 378,200 units of the outgoing model last year in a much healthier economy. “The last Fiesta was a great success but we will improve annual sales with this model,” Ingvar Sviggum, head of sales for Ford of Europe, stated. Sviggum noted that the Fiesta buyer population is very loyal to the model, and further, that there are a lot of them. Over 12 million people have bought a Ford Fiesta since the model was launched in 1976. The new model is very attractive and Ford expects to get quite a few conquest buyers from other cars in the segment as well. The new Fiesta launches in Europe over the next few months and is slated for North American sales in 2010, with production for the North American market sourced from Ford plants in Mexico. The launch of the 2010 Ford Fiesta is eagerly anticipated by some consumers and by Ford of North America itself. Continue Reading →














