Major Developments Major Developments by Calendar Year

Consumers in the United States purchased more number of new cars in the month of March but increase in the demand, shrinking supplies are fueling worries of higher vehicle prices.

Smaller cars are selling more in US, in the month of January, compact and subcompact vehicles made up 19% of retail auto sales, according to Frod’s analyst. GM’s sales rose to 206,621 vehicles, a 9.9% increase from March 2010. Nissan also increased their sales and Nissan North America Inc. said its March sales rose 26.9% to 121,141, the most it has ever sold in any month in the U.S.

Small cars and hybrids were registered more sales when compared to other cars and the sales of Prius hybrid rose 58 percent and the Toyota is going to rise its car prices by an average of 1.7 percent starting in May. The popular Camry will go up $375, the Highlander SUV by $550.

GM slashed the incentives and discounts it offered in January and February and the over all industry incentives fells 5.6% from February to March. The prices of cars are also increasing due to less supplies of smaller cars with the best fuel economy. Nissan has less than a 30 day supply of small cars such as the Versa, Sentra and Rogue and Ford has taken 40 to supply Fiesta.

Even used car prices are starting to rise. With the natural calamity in Japan, auction prices for 2 to 5 year old compact cars such as the Honda Civic, Toyota Corolla and Ford Focus have risen about 11% compared with February, according to the National Assn. of Auto Dealers.

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The Swedish automaker Saab, has left the ownership of Gneral Motors, more than a year ago and is now in a near to death situation. It has temporarily shut down its production lines as it is negotiating with its suppliers who have gone unpaid.

Saab is hoping to revive ties with a Russian businessman whose participation had been a deal breaker during the negotiations when the Spyker purchased Saab from General Motors. The Russian investor, Vladimir Antonov, chairman of Snoras Bank is willing to invest up to $21 million in return he expects nearly thirty stake in Saab but this deal requires an approval from Swedish Government. Saab was acquired by Spykar which is a very small specialty sports car maker from General Motors in 2010 in an unusual deal. In February, Spyker said it would sell its sport cars business to CPP which is a British coach builder controlled by Mr. Antonov, for 32 million euros, or about $46 million, to shift its focus completely on Saab.

Sales of Saab increased slightly to 31,696 cars at wholesale in 2010 when compared to 2009 in which the company sold 27,482 units. This increase in sales for Saab is not enough to prevent a loss of $308 million in 2010 incurred by the company. Saab is planning to sell 80,000 units in 2011 which may not be possible for the company and it wants to return to profitability, which it sees possible with sales of 120,000 vehicles annually, in 2012. In March, Saab sold 830 cars in the United States.

According to data of the Society of Indian Automobile Manufacturers (SIAM), in the last financial year 2.5 million cars were sold in India and this rate is expected to slow down in this financial year because of higher borrowing costs and surging commodity prices. 64 new cars were introduced in to the Indian automobile market last year and sales of passenger cars, including utility vehicles, increased 30% in 2010-11.

Many of the key players in the automobile market including the Maruti Suzuki which is a market leader also increased the prices because of an increase in the prices of raw materials like steel, aluminium, copper, lead and natural rubber. The growth is predicted to be in between 12% – 15% in this fiscal year.

But there are 60 new cars and bikes that are to be introduced in India this year. All the automakers are hoping to see double digit growth in sales, as the economy is growing continuously and the urban and rural populations are experiencing increased income.

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