News Brief: March 19, 2012

Here's what we have our eye on today:

  • Auto manufacturing output in the Midwest increased 17.5% year over year in January, according to the Chicago Fed Midwest Manufacturing Index. Total national automotive output increased 12.1% for the month as compared with 2011. Auto manufacturing output is now at levels last seen in mid-2008, according to a tweet from CNBC's automotive/airline correspondent Phil LeBeau.
  • Toyota Prius c sales are moving at a roaring pace. The carmaker moved 1,201 units during its first three days on sale. If that pace continues, expect significant, and continuous, supply constraints, according to Automotive News. Right now, the U.S. and Canada are collectively allocated about 6,000 Prius c hybrids a month from Toyota's Iwate assembly plant in northern Japan. Although the plant can make 30,000 Prius c vehicles a month, most of the hybrids have been allocated for sale in Japan. There's a backlog of 120,000 preorders for the Prius c by Japanese customers, according to Automotive News.
  • Toyota is adding an "excess wear and tear" policy to its leasing program, according to Automotive News. The policy covers up to $5,000 of excess wear and use, and up to $1,000 coverage for single "event" damage to a leased vehicle. Lexus vehicles get up to $7,500 in wear and $2,000 of single-event coverage. The plans must be bought at the beginning of the lease, and neither plan waives excess mileage charges. Pricing has not yet been disclosed. Toyota relies heavily on leasing: About 31% of all its new cars are leased through the company's captive financial firm, Toyota Financial Services, says Automotive News.
  • GM is having trouble forecasting a sales target for its tiny 2013 Chevrolet Spark, which goes on sale in July, according to Automotive News. The Spark will compete with the Fiat 500, Scion iQ and Smart ForTwo. All three vehicles have seen relatively little appeal with the American buying public, says Automotive News, but Chevrolet expects the Spark to be popular with city dwellers. It plans to offer a fun assortment of exterior paint colors, an optional 7-inch touch-screen and pricing that starts below the Chevrolet Sonic (which starts at $13,865) to help distinguish the vehicle in the marketplace.
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