Fiat Deal with Russia Automaker
June 9, 2008
AFP - A joint venture will initially produce 50,000 Fiat Linea cars per year, said a statement from local authorities in Tatarstan in the Volga region, where the factory will be based.
The deal — signed on the sidelines of an economic forum in Saint Petersburg — is the latest example of a rush of foreign automakers to Russia, which is set to become Europe’s biggest car market in the coming months.
The first Fiat Lineas are to be produced by the end of this year using an existing plant. A new factory is to be built by 2009, and capacity could reach 150,000 cars per year, the statement said.
“The investment in the full cycle of production … will be around 120 million dollars,” the statement said. An additional agreement to produce diesel engines was worth at least 185 million dollars, it continued.
Severstal-Auto makes Russia’s UAZ trucks as well as other Fiat models. The deal signed on Saturday includes the creation of a distribution company that will handle sales in Russia.
Most Popular Car Body Style
June 8, 2008
The sedan is the most popular car body style, and offers interior space and access through two doors on each side (or more rarely one) and luggage security because of a locking, covered luggage compartment separate from the passenger compartment.
Sedans come in all sizes. Small examples include the Honda Civic and Toyota Corolla. Midsize sedans are the best-selling, with the Toyota Camry and Honda Accord leading. And large sedans, once the staple of the American industry in the 1950s and 1960s, refuse to die, keeping limo drivers happy in their Lincoln Town Cars, and police officers in their Ford Crown Victorias.
With over 100 sedan models to choose from it is important for potential buyers to “know before they try and buy”
If you want to know more (and we suggest that you do), The New Car Buyers Guide’s exclusive Rank By Specs tool allows consumers to become experts and rank and then compare every sedan sold in North America by every spec, dimension, capacity and performance criteria. CLICK HERE
Porsche is still No. 1
June 5, 2008
The Associated Press - The quality of new cars improved across the industry this year, with Porsche, Honda, Toyota, General Motors and Ford among the automakers leading the pack, the marketing and consulting company J.D. Power and Associates said Wednesday.
Porsche was the top brand in J.D. Power’s annual ranking of initial vehicle quality, which measures both mechanical and design problems in the first 90 days of ownership. Others in the top five were Nissan Motor Co.’s Infiniti, Mercedes-Benz, and Toyota Motor Corp.’s Lexus and Toyota brands.
In rankings by vehicle segments, Honda was the only brand with three winners — the Fit subcompact, Civic small car and CR-V crossover. Toyota, General Motors Corp. and Ford Motor Co. had three winners each across all their brands. Overall, 26 of the 36 nameplates in the rankings improved from last year.
Chrysler LLC’s Jeep was the worst performing brand, with 167 problems per 100 vehicles. Other brands in the bottom five were BMW AG’s MINI, Land Rover, GM’s Saturn, and Suzuki.
David Sargent, vice president of automotive research at J.D. Power, said the most improved vehicle this year was the Volkswagen Passat. He also cited the Chevrolet Malibu and Infiniti EX-Series, saying both vehicles had strong launches with relatively few problems, which is rare for all-new vehicles.
J.D. Power says overall quality improved to an average of 118 problems per 100 vehicles from 125 problems last year. Vehicle quality has steadily improved over the last decade; there were 176 problems per 100 vehicles in 1998.
The rankings were based on questionnaires from 81,500 people who bought or leased new 2008 vehicles between November and January. The questionnaires ask 228 questions on issues from handling, braking and engine trouble to seat comfort and stereo systems. Sargent said consumers reported that quality was up in every category except audio, entertainment and navigation systems.
The rankings are closely watched by automakers and are frequently used in advertising despite persistent questions about whether they show any real statistical difference between automakers. For example, if Jeep has 167 problems per 100 vehicles, that equals 1.67 problems per vehicle, making the difference with Porsche — at 0.87 problems per vehicle — seem less significant.
Sargent said there are more profound differences in the numbers for individual models, which aren’t released publicly but are shown to automakers.
“Most brands produce some very good cars, and many brands produce some cars or vehicles which are not so good,” Sargent said during the release of the numbers before a meeting of the Automotive Press Association.
He also said that even though the differences seem insignificant, they have an effect on consumers and whether they will stay with a brand or recommend it to others.
“For every small, incremental increase in quality, you will get more customers coming back to your brand,” Sargent said.
Sargent said rising gas prices had some effect on the rankings this year. While the average number of problems with vehicles’ fuel consumption stayed the same as in 2007, the owners of large vehicles were more likely to complain about high fuel consumption, while the owners of small vehicles were less likely to complain.
“I believe this is entirely due to increased gas prices and people’s sensitivity to the issue,” Sargent said.
Sargent also said hybrid vehicle owners were also slightly more likely to complain about fuel consumption.
J.D. Power also gave awards to the plants which produce the vehicles with the fewest mechanical complaints and defects. The Mercedes-Benz plant in Sindelfingen, Germany, was the best overall, averaging 33 problems per 100 vehicles. In North and South America, the winner was the Toyota plant in Baja California, Mexico, which produces the Toyota Tacoma. In Asia, the top plant was Toyota’s Fujimatsu plant in Japan, which makes the Toyota Prius.
GM: Hummer Will Drop from Market
June 4, 2008
MSNBC - General Motors is closing four truck and SUV plants in the U.S., Canada and Mexico, affecting 10,000 workers, as surging fuel prices hasten a dramatic shift to smaller vehicles.
CEO Rick Wagoner said Tuesday before the automaker’s annual meeting in Delaware the plants to be idled are in Oshawa, Ontario; Moraine, Ohio; Janesville, Wis.; and Toluca, Mexico. He also said the iconic Hummer brand will be reviewed and potentially sold or revamped.
Wagoner said the GM board has approved production of a new small Chevrolet car at a plant in Lordstown, Ohio, in mid-2010 and production of the Chevrolet Volt electric vehicle in Detroit.
Wagoner announced the moves in response to slumping sales of pickups and SUVs brought on by high oil prices. He said a market shift to smaller vehicles is permanent.
GM shares rose 43 cents, or 2.5 percent, to $17.87 in midday trading.
The cuts will affect 10,000 hourly and salaried workers. Many will be able to take openings created when 19,000 more U.S. hourly workers leave later this year through early retirement and buyout offers.
Wagoner said the company has no plans to allocate products to the four plants in the future.
“We really would not foresee the likely prospect of new products in the plants that we’re announcing today that we’ll cease production in,” he told a Moraine, Ohio, city official who asked a question in a telephone conference call.
More cuts will be announced later. Wagoner said GM will consolidate engine, transmission and other parts operations to go with the assembly plant actions.
The actions add to a string of plant closures by the Big Three in the last several years. GM, Ford Motor Co. and Chrysler LLC have announced the shutdown of 35 plants since 2005, according to Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor. Along with 35 additional closures at GM and Ford’s chief suppliers, Delphi Corp. and Automotive Components Holdings LLC, he said the total hourly and salaried jobs eliminated comes to 149,000.
In that same time period, foreign automakers have built or announced plans to build five U.S. assembly plants, he said. In 2007, foreign auto companies employed 113,000 people in the U.S., a number McAlinden projects will rise to 152,000 by 2011.
The Oshawa truck plant, which builds the Chevrolet Silverado and GMC Sierra pickups, likely will be shuttered next year. The Moraine plant near Dayton, will stop making Chevy TrailBlazer and other mid-size SUVs in 2010 “or sooner if demand dictates,” Wagoner said. In Janesville, the plant that builds medium-duty trucks and big SUVs like the Chevrolet Tahoe, will cease production starting at the end of 2009, finishing in 2010 or sooner if demand stays weak. In Toluca, production of medium-duty trucks will end by the end of 2008, Wagoner said.
The moves will save the company $1 billion per year starting in 2010. Combined with previous efforts, GM by 2011 will have cut costs by $15 billion a year over in 2005, Wagoner said.
Canadian Auto Workers President Buzz Hargrove said GM’s decision to close its Oshawa truck plant betrays the labor agreement reached two weeks ago. He said the union will consider all options, including a strike.
GM committed to keep the plant of 2,600 people open throughout the three-year agreement, Hargrove said.
Wagoner said General Motors Corp.’s board approved the production schedule of the Chevrolet Volt, and the company plans to bring the plug-in electric car to showrooms by the end of 2010.
Fully charged, the Volt could drive about 40 miles without using any gasoline, and a small conventional engine would recharge the vehicle, extending its range and allowing it to get the equivalent of 150 miles per gallon. GM plans to sell about 100,000 Volts a year by 2012.
Wagoner said the change in the U.S. market to smaller vehicles likely is permanent. “We at GM don’t think this is a spike or a temporary shift,” Wagoner said.
On the Hummer, Wagoner said GM is “undertaking a strategic review of the Hummer brand, to determine its fit with GM’s evolving product portfolio” in light of changing market conditions.
“At this point, we are considering all options for the Hummer brand… everything from a complete revamp of the product lineup to partial or complete sale of the brand,” he said.
Detroit’s automakers have been making the shift to more fuel-efficient vehicles, but not at the pace that matches consumers’ drive to hybrids and high mileage models made overseas. Gas prices have accelerated the retreat from trucks and sport utility vehicles, leaving the Big Three at the most critical crossroads in 30 years.
The U.S. market is difficult for every automaker, with consumer confidence weak and 2008 sales expected to be the lowest in more than a decade. But it is most difficult for the Detroit Three, who have relied more heavily on sales of trucks and SUVs than their foreign counterparts. Trucks make up 70 percent of Chrysler LLC’s U.S. sales, for example, compared to 41 percent at Toyota Motor Corp.
Audi A8 Review
June 4, 2008
Forbesautos - The Audi A8 is a high-speed cruise missile that is most at home covering long stretches of road. It is a big and fast sedan that provides confidence-inspiring handling even in adverse conditions. It also coddles occupants with myriad top-shelf luxury features.
The Audi A8 comes in both standard- and long-wheelbase versions. The latter, called “A8L,” has an extra five inches between the wheels for more interior room. The long-wheelbase variant can be equipped with a 12-cylinder engine, called “W12” for the way it fuses two V6 engines.
Both engines in the Audi A8 come mated to a six-speed Tiptronic automatic transmission that can be taken through the gears like a manual. This gearbox includes Audi’s Dynamic Shift Program, which automatically matches a motorist’s driving style to more than 200 pre-programmed shift patterns.
A light yet strong aluminum chassis combines with Servotronic speed-dependent power steering and an adaptive air suspension to give the Audi A8 capable handling characteristics and a smooth ride. The air suspension regulates the vehicle’s ride height and suspension dynamics according to four modes that provide varying degrees of comfort and sportiness.
The Audi A8 comes standard with quattro all-wheel drive. The system distributes power among all four wheels to afford both excellent dry-road handling and added traction when the weather turns ugly.
Standard features in the Audi A8 include adaptive headlamps that can help illuminate the road through curves at night; rain-sensing windshield wipers; and a Bluetooth hands-free cell phone interface that includes voice recognition. Voice recognition can also be used to operate the stereo system and navigation.
Safety features include Audi’s Anti-Slip Regulation and Electronic Stability Program, brake assist and electronic brake-force distribution.
Inside, the Audi A8 is richly trimmed in aluminum, leather and wood, and makes front- and rear-seat comfort a priority. In long-wheelbase A8L models, those in the back enjoy limo-like legroom. Backseat passengers in the W12 A8L are treated to a dual-screen video entertainment system with a six-disc DVD changer.
Audi’s Multi Media Interface incorporates navigation, audio, climate control and other functions into one unit that is operated by a joystick-like knob. While it’s easier to use than BMW’s iDrive system, it’s still more distracting than traditional knobs and buttons.
Detroit Automakers Make Fuel-efficient Vehicles
June 2, 2008
AP via MSNBC - Detroit’s automakers have been making the shift to more fuel-efficient vehicles, but consumers have been making the move even faster — to hybrids and high mileage models made overseas. Gas prices have accelerated the move away from trucks and sport utility vehicles at a furious pace, leaving the Big Three at the most critical crossroads in 30 years.
“In the early ’70s, we were caught flat-footed, without smaller, fuel-efficient cars. We had nothing to sell,” said Gerald Meyers, a former chairman of American Motors Corp. “That’s exactly what’s happening now.”
What could make this worse, says Lehman Brothers auto analyst Brian Johnson, is that the Detroit Three can no longer rely on import restrictions or raising prices, which helped pull them out of the slump in the 1980s. And if gas prices stay high, they can’t count on trucks and SUVs coming back, either.
“We believe that much of this reduction in full-size truck demand is structural, with many buyers downgrading to smaller vehicles who will likely not come back,” Johnson said in a note to investors.
Pickup, SUV sales down
As of April, year-over-year sales of large pickups were down 17 percent and large sport utility vehicles were down 29 percent, while sales of subcompacts jumped 33 percent and the Toyota Prius hybrid was up 23 percent, according to Autodata Corp. The shift was exacerbated by a perfect storm of high gas prices — which soared 10 percent between March and April alone — as well as the weak economy, tightening credit and the slowdown in home construction.
There isn’t likely to be much improvement in May. Himanushu Patel, an auto analyst with JPMorgan, predicted sales will fall 10 percent in May from the same month last year, and that General Motors Corp., Ford Motor Co. and Chrysler LLC will each see double-digit declines. Automakers report May sales Tuesday.
Despite automakers’ earlier hopes for a rebound in the second half of this year, many analysts are now expecting the pain to last well into 2009 and even beyond.
“It’s going to be a real critical time for the next two or three years,” said Kevin Tynan, an auto analyst with Argus Research.
Ford responded by cutting North American production by nearly 40 percent through the rest of this year, and it’s expected to cut thousands of salaried jobs this summer. GM is expected to announce production cuts and other restructuring efforts at its annual meeting Tuesday. Chrysler cut North American production by 16 percent in the first four months of this year but won’t say if further cuts are in the works.
“‘Not yet’ is the operative word,” Chrysler Chairman and Chief Executive Bob Nardelli said during a recent event in Virginia. “We’re constantly sensing the market and would make an adjustment if we needed to.”
Detroit Three hard hit
The U.S. market is difficult for every automaker, with consumer confidence weak and 2008 sales expected to be the lowest in more than a decade. But it’s most difficult for the Detroit Three, who have relied more heavily on sales of trucks and SUVs than their foreign counterparts. Trucks make up 70 percent of Chrysler LLC’s U.S. sales, for example, compared to 41 percent at Toyota Motor Corp.
Things are changing. Trucks and SUVs accounted for 70 percent of Ford’s sales in 2004; that reversed completely in April, with trucks and SUVs accounting for just 30 percent of retail sales. GM says it has 14 cars that get 30 miles per gallon or better, more than any other automaker.
There are even more fuel-efficient vehicles in the pipeline. GM aims to have its plug-in electric Chevrolet Volt on the market in two years, and Ford and Chrysler expect to have new subcompact cars in their U.S. lineups by 2010.
“It certainly could be better. But they actually do have some products out there,” said Jeremy Anwyl, chief executive of the Edmunds.com automotive Web site. “They’re in a lot of pain, but it’s not pushing them over the edge because they have been working pretty diligently.”
Still, some fault the Detroit Three for not acting sooner. GM, for example, is the only U.S. automaker selling a subcompact — the Chevrolet Aveo — in North America, and that car is seeing sales fall in the face of newer competition from Japan and Korea.
“If there’s any blame, we can blame people for not having foresight and understanding what happened in the 1970s,” Meyers said.
A market shift
Joe Hinrichs, group vice president of global manufacturing at Ford, acknowledged that the company should have seen the market shift coming.
“In the past, and it’s not important when that past was, we didn’t prioritize cars as much as we should have,” Hinrichs said during an event Friday at a small car factory in suburban Detroit. “Now we’re going as fast as we can.”
He said Ford is now focused on reengineering its Fiesta global subcompact to meet U.S. safety and emissions regulations for its North American release in 2010.
“Would we have liked to have had it sooner? Yes. In retrospect, should we have? Yes,” he said. “Right now we’re focusing on bringing it with great quality as quickly as we can.”
Tynan said he is concerned the Detroit automakers won’t have enough cash to restructure at the same time they’re making huge investments in new technologies. GM burned through $3.6 billion in the first quarter, ending with $23.9 billion in cash and $7 billion in additional credit. Ford ended the quarter with total liquidity of $40.6 billion. Chrysler, which is now a private company majority owned by Cerberus Capital Management LLC, doesn’t report earnings.
“This is not Chrysler in the ’80s inventing the minivan. This is not Ford coming out with the Taurus that saved the company. Now the vehicle that saves the company is about technology, fuel efficiency, emissions,” Tynan said. “Those that are ahead in that race now are the ones that are going to survive and prosper.”
Bruce Clark, an auto analyst with Moody’s Investors Service, said the automakers have more than enough cash to handle whatever happens in the next 12 months. He thinks their most critical challenge is overcoming consumer skepticism about domestic cars, since the Detroit Three can no longer afford to sell cars at a discount and assume they will make up for it with profitable trucks and SUVs.
Clark said that in the past, consumers have picked a domestic car over a Japanese one only if the domestic car is $4,000 to $6,000 cheaper, even though there are no significant differences in quality.
“They have got to be able to convince consumers to essentially pay a price that enables them to make profits,” Clark said.
