We are checking in this afternoon with a quick update on the latest news in the ever-evolving auto industry landscape.
Saab Buyers Narrowed Down to Two
Saab recently announced that its list of potential buyers has been narrowed down to two. The two buyers purportedly are Swedish car maker Koenigsegg and the U.S.-based investment firm Renco Goup. Negotiations between the final two potential buyers for Saab are expected to begin this week with a decision expected sometime in the next two weeks.
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Additional GM Dealer Closings
According to an article by Robert Snell of The Detroit News yesterday, GM is eliminating more dealerships that had been initially reported. Additionally, those dealerships that remain open will likely face more stringent sales standards to avoid being eliminated. According to Snell, the move would have been “difficult, if not impossible, without a bankruptcy filing.”
Here as en excerpt from Snell’s article:
Dealers nationwide started receiving letters Thursday that outline higher standards that essentially replace contracts voided when GM filed Chapter 11 bankruptcy Monday. GM initially notified about 1,100 dealerships last month that their franchise agreements would not be renewed next year, but 250 more dealers were added to the list Thursday.
Snell also reports that the dealers being targeted for elimination will have 17 months to sell their unsold inventory. GM is also offering financial incentives to those dealers who sign wind-down agreements, with the incentives including money to keep dealerships open through the end of 2009 or early 2010 until their remaining inventory is solid.
Follow the link to view the article on the additional GM dealer closings from The Detroit News.
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Chrysler Asset Sale Put on Hold
Tiffany Kary and David Glovin of Bloomberg are reporting today that Chrysler’s intended plan to sell its best assets to Fiat SpA has been put on hold by a federal appeals court. Certain creditors of Chrylser are challenging the terms of deal, and their arguments will be heard in an appeals court tomorrow. Chryler is currently losing $100 million per day, according to the article, while it awaits the asset sale that is goaled at making it a “viable company in world markets.”
Follow the link to view the article at Bloomberg about the Chrysler asset sale being put on hold.
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And we have saved the best for last…
Rise in New Car Sales Expected
MSNBC.com is reporting that new domestic car sales are expect to rise this summer:
Experts are optimistic about stronger new car sales on the horizon. They point to:
- Renewed consumer confidence about the economy.
- Signs that the overall economy may be bottoming out.
- The recent surge in stock markets.
- A greater willingness by banks and other financial institutions to lend consumers money.
- Pent-up demand for new car purchases.
- “Fire sale” prices by car dealers who are going out of business.
“There are more people looking at and seriously researching new car purchases,” said Karl Brauer, editor in chief at Edmunds.com, the car-information Web site. “There’s a sense among a lot of people that we’ve hit bottom and the economy will be coming back.”
Follow the link to view the entire article at MSNBC.com about the expected growth in new car sales.
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