The Wall Street Journal put itself in the headlines this week. The august paper reported that General Motors may be considering (i.e. thinking about thinking about) shedding brands. While some of us have been saying– for years– that GM should refine, resell and/or retire it's octo-branded U.S. portfolio, this is the first time the mainstream media covered the issue since Oldsmobile was bricked-over in 2002. Not surprisingly, GM issued a flat-out denial, followed by a little deal hand-holding. Apparently, The General won’t shutter brands, only “reduce overlapping models.” Yes, it's the same old song, with a different Beat since you've been gone. 

In a move bound to raise howls of protest from the Chevy Volt's cheerleaders, GM (along with nine other manufacturers) has asked the National Highway Traffic Safety Administration (NHTSA) to lower the 4.5 percent annual increases in the CAFE standards projected between 2011 and 2015. To justify the request, GM stated they won't have enough Volts and Vue plug-in hybrid electric vehicles (PHEVs) on the road by 2015 to meet the more stringent standards. GM "strongly discouraged" any assumptions that their PHEVs would impact their corporate fleet average. Their NHTSA filing flatly stated "GM's game-changing (extended range electric vehicle) technology should be treated as a low-volume application." (Only GM could use "game changing" and "low volume" in the same sentence.) How low is "low volume"? The Detroit News reports GM plans to build fewer than 200k Volts in the first five years (40k per year average). To make matters worse– for the U.S. PHEV crowd– GM says many of those will be exported. Of course, this all assumes GM will start producing Volt and PHEV Vues in late 2010 as promised. So now, it's put up or shut time. The sad thing is that GM will do neither.

New Corporate Average Fuel Economy (CAFE) standards are enshrined in federal law. It's 35mpg by 2020, or a 4.5 percent annual increase. So why would The Big 2.8, Toyota and Porsche renew their efforts to raise the bar? Especially as someone might be looking for federal loan guarantees… As mob boss Carl Rojeck said in "My Favorite Year," "the fighting is in rounds." Now that the The National Highway Traffic Safety Administration's (NHTSA) writing the fine print, the kvetching starts afresh. To switch movie references, "Can you squeal like a pig?" The Detroit News reports that The Big 2.8 have filed paperwork urging NHTSA's pen pushers to "roll back proposed 4.5 percent annual increases in fuel efficiency requirements between 2011-15." Apparently, "the new rules will force them to slow the rollout of some advanced vehicles." Huh? Wouldn't it make them speed-up? Go figure. GM: We can't build enough Volts [more on that in a separate post]. Toyota: the 2011 requirements are "too aggressive." Ford: the proposal "seems to impose a disproportionate share of the burden on domestic manufacturers." Chrysler: ""It will cost Chrysler LLC thousands of dollars per vehicle in additional technology, not hundreds of dollars." Porsche: We might have to "leave the U.S. market until such time they develop new vehicles with advanced propulsion systems." Hyundai: bring it on! 

Gentlemen, start your engines. And head out to Nevada. The Shady Lady Ranch, located in a trailer 31 miles north of Beatty, Nevada, is offering a promotional sale. To cover the cost of gas for the 150-mile drive from Las Vegas, if you spend $300 at the legal brothel, they'll throw a $50 gas card your way. Three hundreds bones buys you an hour with one of their shady ladies, including (according to the website) Rio, Electra, and Dakota. In the first week, they gave out $1000 worth of gas cards. The downside: the 40-minute "quick man" special ($200) does not qualify customers for the gas rebate. As we already know, the cost of diesel has been pounding Nevada's brothel industry, especially in respect to truckers' custom. While this "let's keep America, uh, smiling" campaign may not solve the transportation-to-hookers problem, it should at least soften the blow. So to speak.

Automotive News [sub] reports that the perfect storm TTAC predicted last year is now a howling hurricane. "In June, used full-sized pickups sold at auction for an average price of $8,740 — a 25.4 percent decline from June 2007, according to auction company ADESA Inc. The average wholesale price of large SUVs plunged 27.5 percent to $10,577." Some say the worst is over. Tom Webb, chief economist for auction company Manheim, claims "wholesale prices of large SUVs appear to have reached bottom, while inventory of used large pickups needs to thin before prices stabilize." Appearances can be deceiving. While there may be a blip in light truck sales– as "bargain hunters" scoop-up cheap-as-chips vehicles– it's a dead cat bounce. The demand for pickups and SUVs has virtually disappeared. And there are millions of people who would get out of their gas-hungry vehicles if they could. But they can't. In short, as Frank reported in his June BTN, we've not seen the end of this downturn. TTAC's seemingly endless liturgical litany may sound as bleak as a Russian novel, but reality makes it so. Did you know that Russia considers Chekhov's supposedly dark dramas comedy? And anyway, when the going gets tough, the tough aren't phased. 

 As previously promised, here are the June 2008 market share numbers for the top five automakers.  Click here for a comprehensive chart of 2008's market share data

Automotive News China [sub] managing editor Yang Jian has a column warning Chinese firms not attempt to buy Volvo anytime soon. Yang considers the Shanghai Automotive Industry Works (SAIC) and First Auto Works (FAW) as the most likely suitors for Ford's Swedish division. They alone have access to the state-controlled bank financing needed to make the deal happen. Never mind that, Yang says, there are a wealth of lessons that China is still not ready to buy-up western car brands. The first-ever Chinese purchase of a western brand, Nanjing Auto Group's takeover of MG, led to an overleveraged NAG being bought up by SAIC. When SAIC bought Korean firm Ssangyong, it had to endure labor walkouts over plans to shift production from Korea to China, followed by a slide into unprofitability. As a friend of Yang's at SAIC puts it "SAIC certainly won't consider buying (Volvo) since we know how much hassle an overseas acquisition could create." So it turns out that a booming market isn't enough for Chinese firms to overcome their unfree-market disadvantages. 

I'm not talking about Hugo Chavez-style ownership. My question was inspired by the rumor that China's Chery might be buying Volvo. Is this a big deal? Despite Ford's worst efforts, Volvo didn't lose too much of its Volvoness when Ford CEO Jac the Knife won the Swedish automaker in a game of bondtolva. Volvos are still [presumably] safe, boxy and not intended for hoons. Of course, Ford almost bought Ferrari, which surely would have strangled the fabled Italian marque in Dearborn's corporate tentacles. And Saab lost its soul the moment GM breathed on it. But how about Rolls-Royce? I say the company is better than ever under Bimmer's tutelage. Audi's done a bang-up job with Bentley and Lamborghini, too. The world didn't stop turning when India's Tata Motors bought Land Rover and Jaguar. And the fact that a group of Saudi businessmen own Aston is no impediment to the brand, apparently. So what's the big deal about a Chinese automaker buying Volvo? Anything? Everything?

Toyota has been the matinée idol of mainstream automakers for some time now. Car buyers want to be with it, and car makers want to be it. But how does the Toyota stack up against other well-known (non-car) brands? The Global Pulse survey (pdf) by research firm The Reputation Institute shows that even compared against 1,000 of the worlds top brands, Toyota is the Worlds Most Respected Company. Setting aside the pure hyperbole of the title, and the fact that it comes from a firm that should have been voted "Most Pretentiously Named Company," this is a huge achievement. Indeed no other automaker cracked the list, save for Volvo Bilar and Tata Motors' parent company, Tata Group. And whence cometh these godlike achievements by ToMoCo? Very, very committed employees is one possible answer. Motor Authority reports that a Toyota engineer involved in developing the Camry Hybrid died as a result of overwork. Although overtime work is common in Japan, the late engineer was working 80 hours of overtime per month prior to kicking the bucket from ischemic heart disease. The last time we heard about a Toyota employee being worked to death was back in 2002, when a 30-year-old worker died after carrying 70 hours of overtime per month. Apparently, that's the kind of improvement that it takes to stay at the top.

With The Land of The Free deep in auto-market hell, our cheese-eating  surrender-monkey pals look set to follow suit. PSA (Peugeot-Citroen) has enjoyed relatively brisk metal moving thus far this year. But the automaker expects sales in its Euro-market bastion to start dropping through the rest of the year. Sales in Western Europe (where PSA gets its fattest profits) are down two percent year-to-date, and headed south– despite French-market tax incentives (where 22 percent of PSA sales originate). The Wall Street Journal reports that price increases set to go into effect this summer may help PSA's bottom line, but only at the expense of sales. At Renault, CEO Carlos Ghosn's ambitious ten percent sales growth target has been halved. "Realistically we are dealing in an environment which is very uncertain and we have to be very transparent in the fact that it can get better or worse," says Ghosn. Analysts say profitability goals are also likely to be abandoned. C'est la vie.

The National Highway Transportation Safety Administration (NHTSA) hasn't revised their crash test rating system since Tonya Harding's ex-hubby ordered a hit on Nancy Kerrigan's right leg (1994). As a result, "starflation;" some 96 percent of all cars sold in America get a four to five star rating. The NHTSA will roll-out new tests and standards in the fabled year 2010. The International Herald Tribune reports that the agency's looking to unify front and side impact results into a single one to five star rating. This should provide a more apples-to-apples comparison of overall vehicle safety, and bring the U.S. in line with European and Japanese testing standards. The NHTSA will add new front-impact tests and a side-impact pole test (sure to provide the Youtube crowd with hours of hilarity). They'll also begin tormenting smaller female dummies, in hopes of improving safety for smaller passengers, and more closely monitor leg crushage. Finally, los federales will note standard safety equipment such as electronic stability control, lane departure and forward collision warning systems in safety rating summaries. Welcome changes all. 

Everyone in the car biz knows that June was a catastrophic month for the U.S. new car market. Total sales dropped by 18.3 percent. The big change this time 'round: it wasn't just light trucks that took it on the chin. Car sales received some body blows, as well. If you're an auto industry exec [still] living in denial, it's best to stop here. If not, read 'em and weep. [NB: As per TTAC policy, sales numbers not adjusted for "sales days."] 

Cypselus von Frankenberg. Now that's what I call a name. (Even Mel Brooks would approve.) It belongs to MINI's spokesman. When Cypselus (can I call you Cypselus?) isn't busy calling media outlets to tell them to CAPITALIZE THE GOD DAMN NAME FOR CHRIST'S SAKE, he's updating journalists on the latest MINI variant. Did you know the MINI Mars Lander is due soon? Speaking of which, Automotive News [sub] reveals that the German-owned British brand is going to sell an electric vehicle version of the Cooper in the Golden State. "The [500] electric Minis [ARRGGGHHHH] are being built at the Mini [NOOOOOOO] factory in Oxford, England, without engines, gearboxes or fuel tanks, then shipped to Munich, Germany, where they are being fitted with electric powertrains." Needless to say BMW will take a bath on every EV MINI they sell. But the PR value will be priceless. Not only will the vehicles help satisfy CA Zero Emissions regs, but they'll be "leased to selected customers" (i.e. Hollywood's green glitterati). Hang on; how will bystanders distinguish an EV MINI from a "regular" MINI? "The electric Minis are painted silver and have yellow roofs." Although range and recharge times are unspecified (of course), it's unlikely that EV MINI will be slower than the original, 1.4-liter, 90hp MINI ONE, a vehicle that kept bumping into itself (i.e. it couldn't get out of its own way). But it's not impossible.

The expression "doing well by doing good" is totally hot in business/academia. This Third Way thinking attempts to reconcile the [allegedly] conflicting notions of "making enough money to buy a Ferrari and a house in the Hamptons" and "getting enough props for being socially responsible to keep the trophy wife happy." As your average Land Rover belches-out enough CO2 to offend every environmental group on planet earth, Land Rover's got to hold a pity party to make their PC bones. And so they have, by donating 60 vehicles (48 Defenders, eight Discoveries and four Freelanders) to the British Red Cross (BRC) and other national Red Cross societies in "troubled" countries (Sierra Leone, Mongolia, Liberia, Lesotho, South Africa). Accepting the gift, Sir Nicholas Young, the CEO of the BRC, remarked that the people they help are often "in the places that are hardest to reach." True dat. And we applaud both the positive impact of this largesse and its PR efficacy. Every time the BBC shows all hell breaking loose somewhere, the guys handing out medical supplies and food are in a butch Defender 110. Our only question: why didn't Land Rover ship some free vehicles to the Red Cross (or other worthy group) in Tata's Indian pridelands? 

The Lexus IS250 is a chick car. Funny that. Its predecessor, the IS300, was such a guy car. In fact, every time I see a male of the species behind the wheel of a Lexus IS, I check my theory by scoping the badge. Sure enough: it's an IS350. Strange. The IS250 is a great entry-level luxury car. While it's slower than the 350, not everyone can afford to pay that much needs that sort of power. So why aren't more guys driving one?