September auto sales in U.S. surge

In the U.S., auto sales were higher than they have been in four and a half years. Sales were calculated at 14.94 million vehicles on an annualized basis. Analysts had estimated the rate at 14.5 million. This is the highest rate since March 2008

Analysts expected a rise of less than 9% in U.S. sales but the actual increase was 13%. Cheap financing helped fuel the increase in sales. Almost a third of Toyota purchasers took advantage of no interest loans to finance their purchases.

Analyst Jesse Toprak said:

"The money is so cheap now... Higher resale values and cheap money has been enabling automakers to offer some of the most attractive leasing programs we've seen in years."

Interest rates on a 4 year new car loan were around 3.19% in September 2012 compared to 4.29% in September 2012 according to Bankrate.com.

Consumers delayed purchasing big ticket items during the recession. Average age of vehicles being driven rose to record highs. Now, as consumers need to replace their old vehicles and the economy begins to recover, auto sales are improving.

As fuel prices rise and consumers are less affluent, sales of smaller cars have surged. GM claimed that sales of its small and compact cars almost doubled in September. While Ford saw its sales virtually flat, its small car sales rose about 73%. Don Johnson, the Chevrolet sales chief, says that there is a definite trend toward purchasing cars over trucks.

Toyota had the largest increase in sales in September up a whopping 41.5%. from last September. Honda also saw a big rise of 31%. Of the U.S. big three, Chrysler did the best with a 12% increase. Chrysler, is now a subsidiary of the Italian car maker Fiat. Sales of the Fiat brand jumped 50% in September. The small efficient cars may be gaining a U.S. customer base. GM followed with a 1.5% gain but Ford sales were almost flat over a year earlier. Volkswagen also did well with a 34.4% increase. Nissan suffered a slight decline in sales.

No doubt, as fuel prices remain high, sales of small and more fuel efficient vehicles will increase as cash-strapped consumers are forced to replace their aging vehicles.

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French auto maker Peugeot to cut workforce by 10,000 claims union.

  As sales slump at Peugeot the company may cut up to 10 per cent of its work force in France to save money. Christian Lafaye head of a Peugeot union said: “They will raise the job cuts target in France alone to 8,000-10,000,”
  Peugeot is the second largest auto maker in Europe. Earlier it had announced up to 6,000 were to be cut in the area. In 2011 Peugeot employed about 100,000 in France and over 200,000 globally. Peugeot's Europena sales dropped 15 per cent over the last five months over twice the 7.3 per cent industry wide drop.
 General Motors has a seven per cent share in Peugeot French auto makers are hoping that the government may introduce incentives to buy more fuel efficient cars. For more see this article.
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In Euro zone unemployment reaches record highs

The figures are for March. Spain and Italy showed significant increases even though in both countries employment was already high. The increase is probably caused by autserity measures that cut state workers, wages, and pensions and thus weakening demand.

The average rate applies to the 17 countries that use the Euro currency. In February the rate was 10.8 per cent already high. The 27 member European Union had a somewhat lower rate of 10.2 per cent. However this represents close to 25 million people out of work.

Some countries are back in recession including Spain with an unemployment level of 24.1 per cent the worst in the zone. Other countries which saw rising unemployment were Cyprus, Italy, Netherlands, and Portugal. Unemployment actually fell in Austria Ireland, Slovakia and Slovenia. For more see this BNN article.

Kodak focusing on filing for bankruptcy

  According  to reports for Kodak the picture is gloomy as the company prepares to file for a Chapter 11 bankruptcy. While the bankruptcy could allow the company to restructure many think that it will be the end of the iconic firm.
   The company is based in Rochester N.Y. In 2010 the company revenue was 7.18 billion less than half the 15.97 revenue it had back in 1996. In 2006-7 share prices were in the 30 to 35 dollar range but now they are less than 50 cents each.
   The company was slow in recognizing the significance of digital photography and the competition within that field. Although Kodak itself jumped in to the digital market it lost out to competitors and failed to make money. I myself have a cheap Kodak digital camera. It has worked perfectly from the first and still works fine. For much more see this article.

Canada: TSX stock market loses 11 per cent for 2011

    The Toronto Stock Exchange lost almost 1500 points during 2011 a drop of 11 per cent from the beginning of the year. The exchange finished the year on a positive note closing up 113.9 points Friday.
    U.S. market fell on Friday but the Dow Jones index was up 640 points or 5.5 per cent for the year. The S and P index was almost flat. The NASDAQ ended down two per cent for the year.
     Gold and metals sub-indexes on the Toronto exchange also posted significant drops. Even though the price of oil rose over the year the energy index also declined. The loonie has risen slightly in relation to the U.S. dollar.

Asian stocks slump as China growth shows signs of slowing

 One factor in the decline is that Chinese manufacturing sector may actually be in decline. Exports to the U.S. will probably drop as U.S. growth slowed more than expected.
   Samsung Electronics lost 2.9 per cent on the Seoul exchange amid speculation that its exports will shrink. In Australia the world's larges mining company BHP Billiton lost over three percent as the Australian government has passed a mining tax.
   The MSCI Asia Pacific index(Hong Kong) fell  2.6 per cent to reach its lowest level since back on October 6th. Even in Asia there are worries that the European debt crisis is spreading to major economies and will curtail growth in European markets for Asian products. For much more detail see this Bloomberg article.