Now we know where GM is going to get the technology for the Volt's drivetrain: the Easter bunny. BusinessWeek reports that Bob Lutz escalated the war of the war of words between GM and Toyota at a meeting of the Western Automotive Journalists association. According to Lutz, Toyota's executive VP of R&D and product development said that the Volt is just an advertising ruse with battery technology that's "completely wacky." Max Bob's response? "Let's wait for the Easter Bunny," referring to his dream claim that GM hopes to will have a test mule with the Volt's drivetrain on the streets by spring of 2008. Maximum Bob also hinted that the General's the victim of a Japanese conspiracy. Japanese companies failure to bid on GM's battery proposals indicates "Lithium battery technology is being husbanded in Japan. It's like a secret weapon." Continuing his trip down paranoia lane, Maximum Bob blamed ethanol's bad press (re: questionable economic and environmental benefits) on a "multi-million dollar smear campaign" by the American Petroleum Institute. "They make it sound like ethanol is taking food out of the mouths of babes [and causing] taco riots in Mexico…" Let's just hope Santa Claus brings GM's Car Czar a clue for Christmas.

Toyota's freshly-minted CEO breaks cover in a Detroit News (DTN) profile with a home-town friendly headline: "Criticism shadows Toyota's success." The DTN repeats the charges: environmental insensitivity (for fighting higher CAFE standards) and quality control problems (that led to the Camry's ejection from Consumer Reports' recommended list). The blows go lower. "Unusually for Toyota, its U.S. sales growth for 2007 is running behind its forecasts, and its new Tundra's slow start in a slumping pickup market is viewed as further evidence of the automaker's fallibility." Rubbish. Along with every other U.S. automaker, Toyota has revised its forecasts to account for a shrinking new car market– but it still predicts market share growth. And while the Tundra's first year sales target of 200k units looks a bit dicey (unless they REALLY blow-out the price), they've sold 162k year-to-date. More importantly, check out Lentz 'tude: "What has always made Toyota strong is this sense of kaizen," Lentz said, referring to a tenet of the Toyota Way that means continuous improvement. "We have to use whatever shortcomings or criticisms we have as a way to re-energize that kaizen within our culture, to make sure that we fix issues that we have before they become targets of our critics." Are you listening Mr. Lutz?

Back when GM was offering zero percent loans to anyone with a pulse (i.e. "sub-optimal" FICO credit scores), we warned that this policy would come back and bite the automaker in the ass. CNNMoney reports that GM's glutes are in peril. "Lehman Brothers analyst Brian Johnson said in a research note Monday that GMAC is experiencing a 'sharp' increase in delinquency rates among its auto-loan customers since July. 'The precursor of credit loss is delinquency- and the 60-day delinquency rate is on the rise for recent issues of GMAC auto (asset-backed securities),' Johnson said. He noted that, with unemployment low, 'the deterioration in auto ABS credit conditions may be evidence of a likely spill-over of the mortgage woes onto the auto credit world.'" This is serious stuff; hundreds of thousands of bad loans nearly sank Mitsubishi. GM spokeswoman Gina Proia admitted a "small to modest uptick in [auto loan] delinquencies" in the third quarter and said GMAC is closely monitoring the portfolio (whew!). "We have taken some steps such as reducing the production of non-prime loans in auto finance. We have also expanded the collection force and we have placed an increased emphasis on the initial verification of applicants, especially those in the lower tier." What was that about escaped horses and barn doors? Oh, and GM stock dropped to a 17-month low.

Stop the presses! GM has a hit! Well, at least a hit with the media. In fact, the mainstream automotive press loves the new Chevrolet Malibu so much they’re ready, willing and able to tell the world that this is it! The product-led turnaround that GM’s quintessential non-car guy, CEO Rick Wagoner, predicted seven years ago. Arriving as it does immediately after GM’s new two-tier labor contract with United Auto Workers, the new ‘Bu seems the literal embodiment of a corner turned. But is it? Is the new Chevy a harbinger of a new dawn for the beleaguered America automaker? 

I remember when Mercedes, BMW and Volkswagen were all subsets of a larger brand: "German car." Although Mercedes best exemplified what is now called the moniker's "mindspace," all three German manufacturers were known for selling better-built cars than American machines. And don't tell me they weren't. Read Arthur Haley's seminal work "Wheels" and you'll appreciate Detroit's horrifically lackadaisacal attitude to product quality during the 60's and 70's. Suffice it to say, the exploding Ford Pinto was neither a surprise nor an aberration. When VW went native, becoming the first foreign manufacturer to plant its factory flag on American soil, the results were, initially, disastrous. Fortunately for VW, the brand's German car rep was so strong the company survived its own inability to build quality products on U.S. soil. And then Mexico. And Brazil. These days, everyone builds cars everywhere. Although globalisation has forced Americans to build better cars, I reckon it's removed something important from the car branding equation. Can Alabama or South Africa build a world-class automobile? Of course. Is the result something less than a "real" Mercedes? At the risk of pissing off the entire planet, I'd say yes. I can tell the difference. In the same sense, I can tell a "real" Cadillac from a Sigma-platformed, Nürburgring-fettled, European sports sedan wannabe. Is the difference all in my head? Of course. Where else would it be?  

Ever sit around on a Sunday around noon with your buddies and say "I could go for some Domino's or Papa John's." You know that obviously neither of the two is up to Michelin guide standards, and in fact neither one of them is even real pizza. But damn man, they really hit the spot. Well that's the new Cadillac CTS. It's snazzy looking, it's fun to drive, it's got all the toppings you could ask for. It's just not a Cadillac.

To be fair, every automaker and their mother is running some kind of year-end sale in the U.S. market; offering incentives, cash-back, discounts and finance deals to delay the deleterious effects of the downturn in new car sales. But GM's "Red Tag" sale is kind of special, in that it offers all of these deals in different amounts to different brands depending on the model and/or the model year. The passive construction workers at the Wall Street Journal describes it thus: "Dealers will use red tags on selected vehicles to advertise a lower price than what typically is asked. The discounted price includes a so-called factory-to-dealer incentive of as much as $1,000 on certain 2008 models, and is combined with other low-interest or cash-rebate offers that in rare cases are also available. On the remaining stock of 2007 models, GM is offering cash rebates or no-interest loans spanning five years in most cases… Chevrolet, Pontiac, Buick, GMC and Saturn products are covered under the program. GM's Saab and Cadillac brands are holding separate campaigns that revolve around the holidays." Why so much confusion? "GM generally has backed away from offering broad and sweeping incentive campaigns that make it appear the company's entire portfolio is on clearance." Even though it pretty much is.

Bob Lutz is a gift. The Car Czar’s uncanny ability to spout uninformed, arrogant nonsense makes analyzing GM’s corporate confusion a slam dunk. Unfortunately, the mainstream automotive press prefers to proffer a protest-free platform for Maximum Bob’s maximum BS. So be it. We can still read between the lines. In this case, Automotive News [AN] blesses us with a bit of Maximum Bob raw. It’s deeply worrying stuff.

Launched in 1998, Volkswagen's "New Beetle" was a solid hit– despite woefully inefficient interior packaging, a range of meh engines fitted in the wrong (right?) place (the front) and distinctly non-German provenance (hecho en Mexico). In the intervening nine years, nada mas, save the introduction of another meh engine in the thirsty and slow I5. Our resident photochopper Avarvarii sends news that J. Mays' retro homage to the iconic original is finally set for a redesign. Mr. A advises us to look closely at his artistry for the changes, which center on improved interior space and a strange desire to ape the new Scion xB's gangsta-style chop top. Yes, yes. Very nice, in a Yo! Yo! kind of way. Let's hope it sits on something a bit more modern than Ye Olde Golf Mk IV platform. And where's the damn diesel? Fit an oil burner into this empty nester's cutesy tootsy nostalgia-mobile and THEN Bug sales will reignite. 

[For more Avarvarii photochopistry, click here.]  

Autumn in Texas plays host to a weekly cultural phenomenon known as high school football. Burgeoning grid iron gods burst on to the field of play from inflatable tunnels through mists of smoke and a phalanx of sparkly drill team coeds. A 300-student marching band plays the school fight song while two dozen cheerleaders power tumble across the field to herald the arrival of the young jocks. The stadium fills with ten thousand spectators-– mostly proud parents and rabid students-– who arrived to the game in typical Texas fashion: by truck. It is under the glare of these Friday night lights that I examine the value of GM's new hybrid SUVs.

In case you were wondering how U.S. automakers could meet presidential hopeful Hillary Clinton's ambitious plan to raise Corporate Average Fuel Economy (CAFE) standards to 55 mpg by 2030, Wall Street Journal columnist Joseph P. White's got your answer. Actually, his solutions come from The Massachusetts Institute of Technology (MIT). White joins the chorus of environmental campaigners quoting liberally from "Factor of Two: Halving the Fuel Consumption of New Automobiles by 2035." "Consumers will have to accept little further improvements in acceleration performance, a large fraction of new light-duty vehicles sold must be propelled by alternative powertrains, and vehicle weight must be reduced by 20% to 35% from today." So go slow, go hybrid and go on a diet. White then shares one of the report's case studies. "A hypothetical Camry that weighed 2,525 pounds (1,148 kg), and had a 1.4 liter, 128-horsepower engine could accelerate to 60 miles per hour in 9.2 seconds, but would average 42 miles per gallon (5.5 liters per 100 km.) The same exercise applied to a Ford F-150 pickup would produce a vehicle that weighs 877 pounds less than today's vehicle, gets around on a 162 horsepower engine and averages 27 mpg, compared with 17.3 mpg today." White concludes his diatribe by dismissing Ye Olde Lutzian industry cost kvetching– and completely fails to mention safety. Side note: I'd LOVE to see White driving a Messerschmitt into Manhattan.  

iAfrica reports that DaimlerChrysler [sic] has sent its first shipment of South Africa-made Mercedes C-Class sedans to the U.S. Some 380 left-hand drive Mercs left the Republic's East London manufacturing plant on Thursday and hopped a boat for Baltimore, Jacksonville and Long Beach. The automaker will repeat the process every two weeks for the foreseeable future, devoting 70 percent of the plant's capacity to servicing the U.S. market. Will the Merc's prestige boost South Africa's image as a major manufacturing center for the German carmaker and others? Not surprisingly, the local pols are saying amen to that. "The mere fact that we are exporting internationally means that we are now on the international map," said Buffalo City municipal spokesperson Darby Gounden "However, the manufacturing of the C-class gives us in the region an opportunity to improve confidence and our image in world markets." As for U.S. consumer acceptance of South African-built C-Class sedans, if they buy 'Bama Benzes… In fact, African American and other politically-minded buyers might see it as a genuine plus. 

A recent study by South Africa's National Vehicle Testing Association (NVTA) concluded that 80 percent of the country's 8,544,902 registered vehicles are unsafe. The assertion has touched-off a national debate. iAfrica reports that the government rejects the notion outright. "The Transport Department Spokesperson Collen Msibi stopped short of denying that there were any unsafe vehicles on the roads. 'We've got institutions, such as the SAPS [the police], responsible for ensuring that cars on our roads are safe.'" As for reports of widespread corruption at government inspection stations, Msibi said the Justice Ministry was dealing. Be that as it may, NVTA spokesperson Wally Cracknell said the percentage of unsafe vehicles is probably higher than 80 percent. Their study was based on 1000 vehicles voluntarily submitted for inspection. "A lot of the vehicles that come to us for roadworthy tests fail outright. Adding minibus taxis and heavy commercial vehicles would blow the statistics 'right out of the water.'" Other evidence from the front line substantiates the claim. "The owner of Johannesburg-based Egoli Testing Station, Johan de Beer, said they tested between 55 and 60 privately-owned cars and trucks each day, with half failing on safety-crucial points like brakes, steering, tyres and shock absorbers." With world's worst automotive safety record (after Botswana), the South African government's unwillingness to tackle road safety on all fronts– licensing, inspection and enforcement– will continue to cost tens of thousands of motorists and innocent bystanders their lives.

Automakers are adding more and better safety features into new cars, right across their model lines. Needless to say, the insurance industry is down with that. According to MSNBC, the number of cars considered “safest” by the Insurance Institute for Highway Safety (IIHS) has grown by nearly 300 percent. Last year, 13 vehicles made the list. This year, 34 new models can tout an IIHS “top safety pick” award. Ford joined Honda on the virtual podium to claim the largest number of vehicles garnering the gong. According to the report, Toyota could have had 10 additional vehicles on the list (and Volkswagen four) if they offered better seat- and head restraint designs. Sidestepping the criticism, Toyota spokesperson Bill Kwong diverts your attention points out that their ‘08 vehicles have active headrests, which provide a “great level of safety for the customer in the real world.” 

When it comes to trimming Chrysler's bloated dealer network, spokesman Jason Vines knows the score. Join the club. Every industry analyst worth his TTAC bookmark understands that the American automaker would be in much better shape if it "downsized" its franchised dealer network. To put numbers to it, Chrysler has around 3700 dealers. Toyota has roughly 1700. According to the Detroit Free Press, Chrysler's overdealeritis leads to "inefficiencies" and "competition among themselves." Yes, but– as we've reported before, a 50-state patchwork of dealer-friendly franchise laws makes any move to terminate dealers [with extreme prejudice] a legal mine field. Fighting the dealers in court– or buying out them out– would cost billions. Even so, rumors are circulating that Chrysler is about to grasp the proverbial nettle, take cars away from Dodge and lop off a thousand stores. Vines acknowledged the wisdom of the idea, then clicked on over it itaintgonnahappen.com: "There is no way on God's green earth to get down to that number," Vines said. I guess Chrysler dealers better hope that the Talking Heads were right: Heaven is a place where nothing ever happens.