From hybrids to SUVs, unsold cars pile up

[HARDCORE]

http://news.yahoo.com/s/nm/20081207/...us_autos_ports

7 December 2008

By Nichola Groom Nichola Groom


LONG BEACH, California (Reuters) – From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation's worst auto market in more than 25 years.

At the Long Beach port near Los Angeles, Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal.

The site became a gigantic parking lot when Toyota and Daimler AG's Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales.

"It's unusual that they would be here longer than a few days, but that's the situation now," said Art Wong, a spokesman for the Port of Long Beach. "They can't move it through their pipeline fast enough so they are asking for additional space while they keep their vehicles here more than a few days, and in some cases more than a few weeks."

The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.

Nissan Motor Co Ltd, which brings its cars in through the neighboring Los Angeles port, had been talking to Long Beach about leasing space, Wong said, though that arrangement fell through.

A Port of Los Angeles spokeswoman, Theresa Adams-Lopez, said Wallenius Wilhelmsen Logistics (WWL), which operates the terminal that brings in Nissan's vehicles, had shifted vehicle storage to another state.

Nissan spokeswoman Katherine Zachary said the company last increased its space at the Port of Los Angeles in February.

"As a normal course of business, we've got cars moving out of there all the time to various points across the country," Zachary said in an e-mail.

WWL, which is based in Norway, would not comment on specific customers, but said auto inventories were building up across the United States.

"We are seeing cargo buildup at ports of entry on both coasts as well as at other inventory points such as factories and rail yards and dealerships," Christopher Connor, the head of WWL's business in the Americas, said in a statement.

Other ports are also seeing a buildup of cars, though not all of them are leasing large tracts of land to automakers. The San Diego port, which brings in Honda Motor Co, Volkswagen AG and Mitsubishi Corp vehicles, has about 14,000 cars on its property. That's about 2,000 more vehicles than usual, according to spokesman John Gilmore, who said the additional cars belong to a range of manufacturers.

COLLAPSING DEMAND

Global automakers have been sideswiped by the collapsing demand for new cars and trucks. A market slowdown that began in the United States has spread to Europe and Asia.

Detroit's embattled automakers have been pushed to the brink of failure by the downturn and are asking the U.S. Congress for a $34 billion rescue package.

But the sharp decline in sales in October and November blindsided even the industry's better-performing manufacturers like Toyota and Honda.

Toyota said on Friday that it was cutting North American output by idling factories that produce vehicles such as the Camry and Corolla, the Japanese automakers' top-selling cars.

Toyota spokesman Mike Goss said inventory had been pushed to "unacceptably high" levels that would take 80 to 90 days of sales to clear.

That is still less than the 115-day supply of inventory on average for General Motors Corp, Ford Motor Co and Chrysler LLC, but it is double Toyota's inventory levels of just a year earlier.

The surge in inventories has been a small blessing to some in the industry. Automobile processors, who wash, repair and accessorize imported cars before they head to dealerships, said revenue from storing cars is helping offset the market's overall sluggishness.

MidTexas International Center Inc, whose Midlothian, Texas, facility processes vehicles for Kia Motors Corp, Mazda Motor Corp and Toyota's Lexus, expects to break even this year despite the dismal auto market because automakers are paying for cars to sit on its lots for longer.

"The inflow of vehicles is a lot greater than the outflow," MidTexas President Randy Denton said. "That helps to offset the loss of income from the vehicles that we're not processing."

(Editing by Carol Bishopric)

[darrels joy]

Electric Car Sales in Freefall; Industry Risks Collapse

I'm shocked, shocked I say.


Now then, how much of our money is going to be spent on cars we are unwilling to buy?

---

A bright star just months ago, electric car industry goes into dramatic reverse.

In what many will find a surprising turn of events, electric car sales have plummeted this year, plunging the fledgling industry into financial turmoil. Many manufacturers and dealers are cutting back operations; some have shut down entirely. Others are calling for government action to prevent the industry from wholesale collapse.

Many dealers understandably don't want to discuss declining sales. When asked how well their cars were selling, a spokesman for Electric Vehicles, Inc, in Tampa, tersely replied "no comment", and hung up. A dealer in Texas didn't answer the phone at all. Another in California had its number disconnected.

EPower, a retailer selling electric cars in Illinois, Iowa, and Missouri, has only sold two cars in the past three months. President Bruce Wood tells DailyTech that, "while there are a lot of tire kickers", few will actually commit to a purchase.

MCEV, the largest electric car dealer in the Pacific Northwest, has seen sales decline to 1-2 vehicles a month, down 80% from earlier this year. Buzz Duell, General Manager of MCEV, blames not only gas prices, but the economy as a whole. "No one wants to spend money right now", he says. Not only are individual buyers cutting back, but corporate and government sales -- which make up a large percentage of MCEV's revenue -- are also being impacted.

Duell expects a recovery in sales to take at least two years.

Tim Sankey, owner of an electric car distributor in Kansas concurs. "It will take time to build a customer base", he says, "but people haven't forgotten about high gas prices". Sankey hopes for a rebound next year.

Sales declines aren't limited to the U.S. In Britain, sales of electric cars have dropped a shocking 58 percent this year. For the first ten months of 2008, a total of only 156 vehicles were sold in the country -- nearly all of those confined to London itself. The announcement came just two days after the nation's Committee on Climate Change predicted electric car sales would increase substantially this year.

Tesla Motors, maker of the all-electric Tesla Roadster, announced a round job cuts last October, and said that plans for a mass-produced high-volume electric car would be "impacted" by the grim sales outlook. Rumors suggested job cuts could be up to half the company's work force, a figure Tesla officially denied.

Larry Shriner, Chief Financial Officer of Zenn Motors, an electric car manufacturer based in Canada, says government "needs to get engaged to give the industry some momentum". Shriner doesn't necessarily favor gas price supports, but he says government needs to ensure "people stay focused" on the benefits of electric car technology.

Sales of traditional cars have also declined, but not as sharply. According to tracking company Autodata, sales are down 37 period from the same period last year.

http://www.dailytech.com/Electric%20Car%20Sales%20in%20Freefall%20Industry% 20Risks%20Collapse/article13601.htm>>