NextLevelNewsMarch122007

The world's most profitable automaker - and soon to be its biggest - now has a 15% market share in the U.S., where it sold 2.5 million cars and trucks last year. Because Toyota is already bigger than Chrysler in the U.S. and is about to pass Ford, Automotive News, the industry bible, has retired the "Big Three" moniker, GM, Ford and Chrysler will henceforth be known as the Detroit Three. Toyota gained a foothold coming in fresh by having some advantages over Detroit: It was unburdened by retiree obligations, union contracts that had been bid up over decades, and brands that refused to make money (or die). And yes, it was lucky to have small cars ready to sell when the first oil shocks hit in the 1970s. But, according to Fortune, the most important reason that Toyota became America's most prestigious automaker is that this quintessentially Japanese company has been better than Detroit at reading the American car psyche. Toyota has never been a style leader. It has never created a car as iconic as, say, the Ford Mustang. But it discerned correctly that many car buyers don't need the next hot thing. They just want a trouble-free product that looks fine - and they will pay a premium for it.

One way Toyota reads the public mind is the think tank at Toyota Motor Sales in Torrance, Calif., where a research department staffed by 116 people monitors the industry and keeps tabs on demographic and economic developments. Its mission: to predict consumer trends and create a lineup of cars and trucks to capitalize on them. Each professional is expected to spend time out in the field talking to car buyers. The Japanese have a name for it: genchi genbutsu - go to the scene and confirm the actual happenings.

Most big companies have something like it; what distinguishes Toyota is that its executives actually listen and have turned those insights into profits. When researchers found in the mid-1990s that Toyota was losing young buyers to hipper brands like VW, its marketers dreamed up the hugely successful Scion. Another case: GM was fooling around with electric cars as far back as the 1980s, but it was Toyota that tapped into the appeal of the green revolution with the hybrid-powered Prius. The Prius accounts for less than 5% of U.S. sales, but Toyota has won a fortune in good publicity.

12.1% of Consumers Intend to Buy in Next Six Months

The recent break in frigid temperatures appears to be warming consumers to the thought of buying a new car, more so than any February since 2002, according to BIGresearch’s February Consumer Intentions and Actions (CIA) Survey.

12.1% of consumers said they are planning on buying a new car or truck in the next six months, which is up over February 2006 when 11.8% said the same.

With the exception of 2002, consumers seem more optimistic than in previous Februarys about buying a car / truck,” said Gary Drenik, President & CEO of BIGresearch. “2002 was a unique year when incentives and 0% financing offers help stimulate automotive sales. With consumer confidence increasing in February and gas price impact moderating, consumers are feeling more comfortable about making longer term purchase decisions,” said Drenik.

Consumer interest in Hybrids appears to be cooling as just 4.9% said they are considering buying one versus 9.2% in February 06. However, 54.2% are considering a car, compared to 33% an SUV, 18.8% a truck, 14.9% a cross-over and 9.1% a mini-van.

Good news for Ford who increased their Consumer Equity Index to the positive side of the ledger in February to 0.18. This is the first time since April 2006 that Ford has been positive when they had an index of 1.52. (The Consumer Equity Share is calculated by subtracting the average percentage of those considering a brand 1^st choice or 2^nd choice from the current percentage of ownership of the same brand.)

Problems in Sub Prime Mortgage Finance Sector could move to Automotive Sector

Subprime delinquencies for US auto loans rose 4.1% in January versus December 2006, while the annualized net loss (ANL) index spiked 31.4%, according to Fitch Rating's 'In the Auto ABS Driver's Seat' newsletter.

'Approximately 70% of the transactions in the subprime ANL index recorded higher loss levels in January as the index hit its highest level in nearly three years,' indicated Hylton Heard, a Director in Fitch's Auto ABS group.

The subprime ANL jumped to 8.67% in January from 6.60% in December 2006, and on a year-over-year basis, the index was 24.2% higher versus January 2006. However, the spike in ANL may have been exaggerated slightly by one subprime issuer included in the index. This issuer implemented a change in their servicing policy resulting in a spike in their ANL. The large increase in this issuer's ANL was a product of a change in a servicing policy combined with weaker performance. Therefore, in coming months, Fitch expects ANL to come down somewhat once the change is fully implemented. The subprime delinquency index was at 2.82% in January, slightly higher than the 2.71% recorded in December 2006.

In the prime sector, 60+ days delinquencies were at 0.58% in January, 9.4% higher versus December 2006 and 3.3% lower on a year-over-year basis. Prime ANL were 0.89% in January, 7.2% higher than in December. This is the highest level the index has hit since February 2006. However, ANL remain down on a year-over-year basis by 17%.

Auto ABS issuance was quite healthy in January with $3.47 billion coming to market in four transactions, namely two subprime, one prime, and one motorcycle loan transaction. Issuance in early-to-mid February was active with over $8.0 billion issued through the first three weeks of February; $12.37 billion was issued in February 2006.

1. Make a Real Commitment

2. Use positive visuals as constant reminders

3. Keep yourself surrounded with positive people.

4. Feed your mind with positive information on a daily basis.

5. Replace sources of negative energy with positive energy.

6. Dress for success.

7. Use mental programming.

8. Take immediate action.