This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

For the Auto Industry, California Already Has Seceded

LOS ANGELES ( TheStreet) -- In terms of the automotive market, California long ago seceded from the rest of the country.

The Los Angeles Auto Show, the auto show for the state where 11% of all U.S. retail auto sales occur, opens for the media on Wednesday and for the public on Friday. At the show, which provides a look at the industry from California's viewpoint, some 50 vehicles will make their global or North American debuts. The emphasis will be on green cars, imports and luxury cars.

California accounts for a third of all electric vehicles and a quarter of all hybrid vehicles sold in the U.S., according to It is among the few states where imports dominate. And its abundance of high-wealth households creates a strong market for luxury vehicles.

At the auto show, the top introductions will be the new Honda (HMC - Get Report) Civic and the Toyota (TM - Get Report) RAV-4. For Detroit, the principal event will be GM's (GM - Get Report) introduction of the new Chevrolet Spark electric vehicle. Ford (F - Get Report) will show the new Fiesta, first shown at the Paris Motor Show in September.

For the first nine months of 2012, the list of the top 10 new car registrations in the Los Angeles area didn't include a single Detroit vehicle, according to In the L.A. market, which accounts for more than half of California retail sales, the top 15 registrations included only one Detroit vehicle, the number 15 F-Series pickup. The top 20 includes only one other Detroit vehicle, the Chevrolet Silverado, at No. 20. Chevrolet Cruze was No. 28.

By contrast, the top 10 U.S. vehicles for the first 10 months are led by F-Series and Silverado, with the Dodge Ram at No. 8, Ford Escape at 10, Focus at 11, and Chevrolet Cruze at No. 13. California has "an import car bias," said analyst Jessica Caldwell, on a recent conference call with auto reporters.

As far as electric vehicles and hybrids, "California is big in the green market," Caldwell said. "If there is a green movement, it usually starts in California."

California believes it should play an active role in promoting green technology. For more than a decade, it has required automakers to sell a number of vehicles that produce little or no tailpipe exhaust. This regulation encourages electric vehicles, even if they lose money. For instance, the auto show introductions will include Chrysler's first battery-powered car, the Fiat 500e, which will cost the company $8,000 and $9,000 per sale, CEO Sergio Marchionne has estimated. Said Caldwell, "There will be an electric car in the portfolio of every domestic automaker."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
F $13.43 -1.40%
GM $31.25 -1.57%
HMC $26.76 -1.29%
TM $101.45 -1.00%
AAPL $95.18 1.64%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs