Murphy’s Law is alive and well at Toyota; we’ve got one more recall, this time with a relatively small batch of Tacoma pick-ups, where they discovered cracks in the front driveshaft. 8000 of the Tacomas are being recalled. This might actually bring some business to car haulers, as the defects could be catastrophic if the driveshaft comes off and caused a loss of control of the vehicle; people might insist on having their trucks towed in to the dealership.

One drawback to the announcement as presented by the BBC was that the owners of the affected Tacomas won’t be notified until mid March. That’s a month away, and all 2010 Tacoma owners will be on pins and needles until they know if they own one of the affected trucks. They also interestingly chose to make the announcement on a Friday night after the dealerships had closed for the week, so they can put off having their service departments deal with panicked customers until Monday.

In dollar amounts, this shouldn’t be a big problem for Toyota. Even if replacing the driveshaft is a $2500 fix, it will only set them back $10 million to replace them. However, this will just add to the media pile-on that Toyota is getting right now, causing them hundreds of millions, if not billions, in negative goodwill.

This will hit the resale value of Toyotas and make them harder to sell; vehicle transporters will get some business taking them to auctions and possibly take them overseas if the rest of the world isn’t as Toyota-phobic.

Source:http://news.bbc.co.uk/2/hi/business/8513721.stm

Chrysler and Fiat are going to be making cars in Russia; they’ve entered into a deal with the Russia government and Russian car maker SOLLERS (they like to do their name in all caps) to build a Russian plant, making cars primarily for the Russian market, but moving cars towards the rest of Europe as well. The plant will be in the Tartarstan region of Russian and will make 500,000 cars a year when it comes fully on-line in 2016; the Russian government is putting up a $1.64 billion loan to help sweeten the deal.

SOLLERS is a good-sized company, having sold 122,000 cars in 2008 (the most recent year with an annual report) with revenue of $2.48 billion. However, western car companies have been leery of doing business with Russian firms in Russia due to the problematic relationship the Russian government has with firms who fall out of favor with the government.

The government loan is an important part of the deal; it makes sure that the Kremlin has some skin in the game. If the government has a large stake in the project, they’ll be less likely to play economic Calvinball and change the rules of the game as it progresses. That will give Fiat some assurances that they’ll be able to get a toe-hold into a developing market, which has not been their strong suit in the past.

Most of the cars made in the joint venture will be Fiats, but a few Chryslers are expected to be made as well. That will be bad news for domestic car haulers, for they will lose business that could have been done in domestic plants. However, some of the markets, especially in Eastern Europe, might need the low-cost advantage that a Russian plant might entail, so those Russian jobs might not have made sense in the US.

Sources: http://www.detnews.com/article/20100212/AU...OK-Russian-deal
http://www.sollers-auto.com/en/investors/key_figures/

Two stolen car haulers were in the news this week. One story was commented on in a tongue-in-cheek manner in the Baltimore Sun, where someone nabbed a shipment of Toyotas from a car transport company’s lot. As we go to press, there is no word on how much Toyota is making the thief pay to give the cars back.

The other story is a bit more serious; pirates hijacked the car carrier Asian Glory, which was carrying a load of Hyundais and Kias from South Korea to Jeddah, Saudi Arabia; the ship was being held in the renegade Somali region of Puntland; Puntland is right at the tip of the Horn of Africa by the entrance to the Gulf of Aden, which leads to the Red Sea and the Suez Canal. However, the ship has since gone back to sea, where it is rumored to being used as a pirate mothership.

The pirates are asking $15 million for the ship and its cargo, but the insurance company for the shipping company is expected to take the pirates down to something in the $4 million range. The 2400 cars on the ship could easily bring that on the black market in places where VIN numbers aren’t an issue, but the ship itself will be worth far more than that, so companies are willing to pay the ransom rather than stand on don’t-deal-with-criminals principle.

The level of piracy in the region is bad enough to have ships that would normally take the Suez Canal are now taking an extra three weeks to go around the Cape. However, the Asian Glory didn’t have a good option but to take the route they did, given that Jeddah is on the Red Sea.

Sources: http://weblogs.baltimoresun.com/news/crime..._blotter_1.html
http://www.arabnews.com/?page=4§ion=0&...&d=6&m=2&y=2010
http://www.business24-7.ae/Articles/2010/2...fb8efd6534.aspx

The car-collector market is a lucrative one for car haulers, for people will pay well to get their cars to and from specialty auctions. However, the bad economy in the last few years has put a dent in a lot of people’s disposable income; a lot of the coverage of the collector car auctions has focused on the bad economy.

If the Mecum auction in Kissimmee, FL late last month is any indication, the market for collector cars is growing nicely; sales were up 60% from 2009 at $25.6 million. That might be a left-handed complement, since January 2009 was right after the financial meltdown and folks may have not been in a buying mood.

Luxury car transport companies often supplement their income by moving collector’s car; the buyers of some of the bigger-ticket cars at the auction might be using them as a promotional tool and may need the vehicle transported to the site of the event. That will give the car hauler multiple jobs for the same car, so getting into that business could prove profitable.

The location of a lot of the auctions, especially in winter, can make for a fringe benefit for car haulers, the Mecum auction was a short drive from Disney World and a large batch of auctions went down in the Phoenix area earlier in January. There are worse places for a truck driver to be in the dead of winter, especially when the northern US is digging out of a foot of snow in a lot of place.

http://luxvelocity.typepad.com/luxvelocity...otal-sales.html

Officials from the Port of Portland fear that there may be fewer vehicle carriers looking to offload Toyota’s in the near future tanks to the recent recall. With fewer car carriers mean fewer cars; since the number of cars is the deciding factor in how many longshoremen are hired per job that means fewer jobs as well.

Every fifty cars equal one person to be hired for the job. Many are concerned that the massive recall on Monday, February 8th, will lead to work drying up for a while. The possibility is leaving many feeling a bit anxious about the availability of work in the near future.

"This is my livelihood," said Jeff Smith, president of the local longshoremen's union.

"Toyota is a big customer for us. It's a job-maker. It might create 90 jobs a day if we had the ships coming in," Smith said.

The Port of Portland use to see quite a few car carriers coming in and out of their docking facility. However, since the recession began a few years ago the number of cars coming in to the port has declined by 40%. It has only been recently that the number of imports has leveled off. Now that number is expected to take a big dip yet again.

There are some concerns that if the recent safety concerns about the popular automobile are not properly dealt with by the company that the number of car carriers visiting the Port of Portland could shrink even further.