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Estimates of the contraction of the Iranian economy in 2012-2013 show GDP declines for 2012 and 2013. The IMF estimate of the economic contraction for fiscal year ending March 2013 was 6%. Former president Ahmadinejad's policies led to hyper inflation, a sharp depreciation of the currency rial, similiar to the situation in Venezuela under Chavez and Maduro. To get a sense of the the scale of the damage to the Iranian economy- a decline of 39% in vehicle production in 2012 with the lack of essental parts and decline in demand, oil production declining to about 700,000 barrels at one point in 2013 from over 2 million barrels in the period before 2012. This was a result of lack of access to needed technology and parts as sanctions began to take a toll, and because of the decline in exports from the enforcing of sanctions by 2013. By June 2014 the newly elected leader Rouhani had made economic recovery the to priority- inflation had been cut in half and the rial currency had recovered from the lows in 2012-2013, and oil production increased to 1.2 million barrels. The IMF forecast is for GDP growth of 2.35% for 2015. The auto maker Khodro Industrial Group is keen on increasing production and partnering again with Renault, which left the country with the sanctions. Iran's oil producing company estimate is that about 700,000 increase in production could be achieved quickly with the lifting of sanctions for oil technology and parts. Rouhani has put together a large group of business leaders inside Iran and overseas to improve Iran's image with investors and attract foreign investment....

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Companies in the U.S. automibile market are again increasing their dependence on incentives to promote sales. GM's average incentive per vehicle was $3,732 in February 2011, according to Credit Suisse, up 13% from 2010.

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According to a 2011 study from the University of Michigan, less than one third of 16 year old teenagers in the U.S. had a drivers license in 2008. This is a sharp decline from about half in 1983. For 18 year old teenagers about 80% had a drivers license in 1983, only about 66% have a license today. Many of today's teenagers live at home and are moving to large cities where they prefer to use mass transit. Economic difficulties are also larger in today's environment.

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Global supply chains in industries such as clothing and other consumer items, in autos, and in tech products are changing as the shift away from China continues with the Trump administration's tariffs war. The clothing and other consumer products manufacturing is shifting away from China. Auto production is centred on regional hubs for manufacturing under renegotiated trade agreements such as the one that replaced NAFTA in North America, correcting imbalances in wages and U.S. content. Mexico gets to stay as a auto hub with exports of $50 billion in 2018 but under new rules that the Trump administration sees as fair. India is being considered as an auto production hub in Asia. In tech products China continues to have an edge but this is changing gradually. Samsung has built a huge smartphone manufacturing complex in Vietnam. South east Asia is a beneficiary, so is Mexico. In the future India stands to gain as its manufacturing base expands and infrastructure develops. In this changed scenario China will be moving to produce more advanced technological products, as it shifts away from lower end products. This will also correct some of the grossly unfavorable trade imbalances that have developed with the U.S. ...

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VW's Scout Motors plans in 2026 to sell direct to buyers. A Scout Motors VP says of VW's plans- “We have heard over and over again, ‘Please give me an alternative. You see that there is very little trust in auto dealers today.”  Dealers have lobbied to have the laws in US set so that no one else but dealers can sell cars. Yet this may be becoming an outdated way to sell cars if car makers can provide good service over 10 years to buyers and make the whole process of buying and owning a car a pleasant experience for owners. It is far from that today and the experience is not one that is consistent in quality and have ease of use as the experience varies with each dealer and can change with a single dealer over time, quality is not assured.

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Private sector financing of $25 billion for a prepackaged bankruptcy with $5 billion from the US government under an option Secretary Paulson is considering is reported by legal experts on November 18. A decision expected by December 25, 2008 but one that tries to deal seriously with the issues facing the automakers rather than just hand over the funds.

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If you bought a Hyundai you had peace of mind that if youwere laid off Hyundai would buy the car back, and it would not affect your credit rating. Hyunda has bought back less than 100 cars under its Asssurance program which started in January 2009 according to a Hyundai spokesman. Yet it has done wonders for Hyundai's image in uncertain times. It put Hyundai in afavorable way on people's minds. Hyundai market share went up from 3.1% in November 2008 to 4.3% today according to Autodata Corp. And so Hyundai is the only car company that increased sales in 2008. Only two years back Hyundai was struggling to get respect in the American market. See "Hyundai gets No Respect," by David Kiley in Business Week in 2007.

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How ArvinMeritor navigated the treacherous waters of the automotive parts buzsiness since 2000 when the company was formed taking in the automotive business of Rockwell International in Troy, Michigan. The combination was designed to bring the automotive parts business for roof and door systems, chassis and wheel products with the comercial truck business which makes drivetrain systems and components like axles, drivelines and braking systems. The business is in turmoil and ArvinMeritor last recorded a profit in 2005. Here is how they did it. First, the combination provided some linited diversification for the cyclicality of the automotive business passenger cars and trucking together. By 2004 the foreign makers especially the Japanese were taking market share from the Detroit Big Three car makers which only accelerated after that when the Big Three overconcentrated on SUV's and had no competitive car lineup to match the Japanese in 2007 and 2008. The Big three closed plants and companies like ArvinMeritor closed plants also. In the last couple of years first GM and then Ford began to emphasize emerging market countries like China, Russia, Brazil and India. Wagoner GM's CEO in citing improved results in 2008 specifically referred to the $500 million profit in Brazil as making this possible. He also said that when investors see the improved results so early they are forgetting that the model that GM has setup has changed completely from the model that investors were used to in previous years which was a large and growing US focussed market base. Now its a global focussed market base with particular focus on emerging markets. ArvinMeritor has followed this pattern and set up parts plants in new countries like Russia to supply the Big Three's plants there. But it appears from Phil Martens, Arvin Innovation's CEO's statement that only 20% of global automotive sales for ArvinInnovation, the automobile part of the busines that is being setup as a separate company, are coming from the Big Three of Detroit. And 65% of the sales are coming from outside North America. Which suggests that 15% of sales are coming from the foreign carmakers in North America. ArvinMeritor closed 11 plants in North America and the new company Arvin Innovation has 42 facilities in 16 countries with sales of $2.2 billion in fiscal 2007. ...

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McCain says he would meet with automakers in his first month in office and would be frank about his expectations on fuel efficient vehicles, showing that this issue is becoming significant as oil prices rise.

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Kenyan president Ruto says after the tax hikes that led to protests were cancelled- this would increase the borrowing needs. The funding gap in Kenya's finances was 600 billion shillings or $2.7 billion, now he will add another 346 billion shillings to this borrowing.

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Starter interrupt devices have been installed by U.S. auto loan lenders on about 2 million vehicles, and feeding the boom for making subprime loans by reducing the delinquency rate. Its a new virtual repo system unlike anything known before, described in this exceptional piece by Corkery and Silver-Greenberg, with implications that reach beyond borrowers to the safety of the U.S. financial system. It means the lenders have a false incentive to reach deeper into the pool of subprime borrowers with lower and lower credit ratings, with the securities marketed using these loans spread out over the entire financial system waiting for another implosion like the one in 2008. Consider that the subprime auto loans have reached 27% of total loans in 2013, and $145 billion of subprime auto loans were made in just the first quarter of 2014. At some point this could reach the 36% in 2006 before the implosion in subprime securities of 2008, destabilizing the U.S. and global financial system. Are the regulators again asleep at the job? ...

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Sales of new vehicles are in even steeper decline in Japan than in Germany. Germany saw a boost with reunification with East Germany. Eastern Europe is next door for sales and manufacturing. Sales declined 7.6% in 2007 over 2006 to reach 3.406 million vehicles, the lowest level since 1972. With 9 new models Toyota's sales declined by 6% in 2007. Something is happening in the developed country markets that shows the markets there are declining relative to the new markets in Asia and other emerging markets. How automakers fare in the future and which survive and grow will depend on how they prepare and execute strategies for these markets focussing on new design, efficient manufacturing and new technologies These markets will bring a different set of customers looking for improvements.

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Much of inflation's rise in the US has been transitory after all, says Greg Ip in the WSJ, yet credit Jay Powell at the Fed for his resolute fight against inflation. Gasoline that was over $5.00 a gallon in June when inflation was at 9.1% following Russia's Ukraine war is now $3.27 according to AAA, and this is an important reason why inflation is at 6.5% in December 2023. Demand for autos after pandemic and lockdowns coupled with supply chain problems caused auto prices and used car prices to rise sharply. This is now reversing with price declines. Ultra low interest rates caused a jump in home prices- this is reversing with Jay Powell and the Fed increasing interest rates sharply.

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After premium increases in 2023-2024 auto insurance premiums have more than caught up with cost increases during covid years. This WSJ report shows auto insurance companies now have premiums that more than offset what they are paying out for repairs and other expenses. In Florida excess premiums led to $950 million being returned to customers, other states have similar laws. Competition between insurers should lead to lower rates says the WSJ.