The decline of the US auto market is bad news for OEMs, but as usual shit flows downhill and auto suppliers could take the brunt of the impact. Sven Gustafson blogs an A.T. Kearney survey at MLive.com which says North American auto suppliers could lose up to $50b between 2008 and 2011. Caught between weakening demand for new vehicles and rising commodity costs, the survey estimates that the supplier sector will need $38b in incremental capital over the next five years. Another report by Grant Thornton LLC estimates that the hard times could put a full third of suppliers at risk of bankruptcy. Unsurprisingly, firms in the SUV supply chains face the highest risks thanks to their reliance on weak US sales. "The full impact of very low truck and SUV production in the second half of the year and any new production cutbacks this fall – something we believe is likely – will only make supplier cash flow problems more difficult to manage," saiys Grant Thornton principal Kimberly Rodriguez. And in the past these woes could have been turned around by acquisitions or mergers, but now the key to survival seems to be diversification beyond the auto industry. With credit tight, massive retoolings and turnaround plans also aren't in the cards for many suppliers who have little choice but to focus on successful core business to survive the rough patch. "I'd say things are being looked at very carefully," says Doug Grimm, CEO of supplier Citation Corp. "I think everybody's wondering if we've seen the bottom yet."

Toyota put out a press release today, in the form of a Detroit News article, declaring their intention to conquer the globe's luxury car sales. In Europe, where Lexus is fighting uphill, sales have grown. And in Japan, where Lexus is also not-so-very-popular, sales have not. Nevertheless, the Toyota luxo brand is going to keep up the fight. And how are they going to accomplish this lofty goal of global domination? With Pebble Beach special editions, of course! For the first time EVER, Lexus will offer an LS600h L "with a Truffle Mica exterior paint combined with an exclusive two-tone Alabaster and Black leather trim interior with Dark Grey Bird's-eye maple wood trim." Sounds like a kitchen. Lexus is also doing a sixth annual Pebble Beach edition SC430 coupe. Having spent the day driving one yesterday, all I can say is that it needs a lot more than fancy paint. This coming year was supposed to be the end of the road for the SC430; Lexus was going to "replace" it with the LF-A sports car (don't ask – I know they are 100 percent different). But with the LF-A program being canceled or at least indefinitely paused, the SC430 may soldier on. The horror.

All car manufacturers would like you to believe they're turning their back on fleet sales. It simply doesn't pay to be known as a "pile 'em high and sell 'em cheap" automaker– even if that's exactly what you are. Hence manufacturers' quarterly reports that highlight models whose rental sales have fallen. I repeat, rental. Lest we forget, companies and government agencies are also significant bulk buyers. So, BS aside, who leads the pack in the fleet sales that all carmakers say they don't rely upon to drive up their numbers and keep the factories humming?

Once again, former GM division and bankrupt parts supplier Delphi is proving to be the thorn in GM's side that could well prove to be a lance through its heart. Or something like that. Anyway, Automotive News [sub] reports that the feds are taking steps to sort out Delphi's pension liabilities, and The General could end up with one big ass bill. "In a letter to GM and Delphi, the federal Pension Benefit Guaranty Corp. warned it would lay claim to $8 billion if the automaker does not keep its pension plans intact, the [New York Times] paper said. This would dilute the claims of Delphi's other unsecured creditors, who are owed about $3.5 billion." To forestall that possibly mortal blow, "The U.S. government has asked bankrupt auto parts maker Delphi Corp. to transfer more than $1.5 billion of unfunded pension obligations to former parent General Motors by September 30." Whew! And here I thought we were talking about real money. 

I'm not a fan of the Ferrari California. I think it's a concession to the brand's "image buyers." And while valet parking poseurs are the bread and butter for all exotic car crafters, the California is a folding tin roof too far. That said, the California V8's audio clips are pure gold. But the "Virtual Test Drive" posted on the Ferrari California mini-site is a joke. As a collaboration with Gran Turismo, it's a less-than-merely-adequate preview of both car and game. The production values are game industry low (tail wag my ass). There is no car sound, no engine sound, and the actual clips are too short and obscure the California's actual appearance. Worst of all, the soundtrack was lifted straight from some God awful presentation at a 1999 computer software convention. This car just gets more disappointing by the day. Until, of course, I drive it.

Yup it twofer Friday over at The Standard of the World, as Cadillac unveils both the CTS Medusa Sport Wagon and this, the new SRX. And once again, the brand's Global (?) Design Director Clay Dean is talking about how he's clad a Caddy in the Art and Science motif– without using that term. "The next-generation SRX is the result of the continued exploration and refining of Cadillac design language, with the goal of creating dramatic presence in the luxury crossover space." Am I the only one in the automotive space who hates the current use of the word "space" by cubicle overlords? Who killed the word "market?" Speaking of which… “The next-generation SRX, along with the new CTS Sport Wagon, showcases Cadillac taking its dramatic design into new directions," Caddy GM Jim Taylor agreed with his copywriter. "Particularly cars and crossovers that are the right size at the right time for today’s luxury consumers." Hey, if loving Vue is wrong, I don't want to be right. 

Granted, these are the new CTS' Sport Wagon's most offensive angles (courtesy GM PR). And beauty is in the eye of the lease holder (zero percenter?). But to my jaded eyes, the new Caddy is one aesthetically- challenged automobile. Needless to say, that means GM is launching it at the Pebble Beach Concours d’Elegance, and hyping its looks. "It’s a taut design that not only suggests sleekness, but delivers it,” Caddy Global (?) Design Director Clay Dean announced, in that usual artsy, syntax-bending sort of way. “Indeed, the drama of the sedan is amplified in the CTS Sport Wagon, as the centerline cue that is part of the exterior and interior is more prominent and plays a stronger role in defining the design at the rear of the vehicle… The liftgate area, for example, is a confluence of angles and planes that typifies the vehicle’s design tension.” In short, the new CTS five-door is "a dramatic design that elevates and updates the classic wagon body style." I thought Lincoln was reaching higher? Well, at least the CTS-based Sport Wagon is reaching wider, with standard 19" wheels. Anyway, some of you have a major you-know-what for wagons and the CTS made our Top Ten list. So let's hope this design grows on you, but not like a fungus.

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Motorcyclists. Of course, Mary E. Peters didn't quite put it that way. “We have seen the total motorcycle participation in vehicle miles traveled go up,” Mary E. Peters, the secretary of transportation and a "longtime Harley-Davidson rider" told The New York Times. “We might see more people moving to that mode of transportation. We might see that data skew.” (I don't know about you, but I wouldn't use that kind of language around my fellow Hell's Angels.) By the numbers, "Deaths of motorcyclists surged 6.6 percent, to 5,154; 2007 was the 10th straight year of increase… Total deaths in motor vehicle crashes in 2007 declined to 41,059, a drop of 3.9 percent compared with 2006. Deaths in cars fell 7.8 percent, and in light trucks 2.7 percent. Even alcohol-related deaths fell." Obviously, there are enough unconfirmed variables to please/challenge any advocacy group: gas prices, passive safety, driver education, drink drive enforcement, changing demographics, helmet laws, etc. But common sense suggests that gas price hikes are a double-edged sword. At the moment, it looks like a net safety gain. Or loss. Or something. 

In the past five years, Volkswagen has had its pants around its ankles. Gas tripled in price, Al Gore invented the environment and the brand once known for frugality didn't have U.S. products that could compete on fuel economy. Volkswagen’s diesel-powered Jetta and Passat weren't even legal in VW-friendly California, NY and Massachusetts. After miles of regulatory legwork, VW brought one of its new generation European diesels up to fifty-state compliance. The Jetta 2.0 TDI hits dealers this fall. So is it The One?

The Volt PR drip-feed continues. The Hail Mary's Design Director hung with his homies in Traverse City (rated E for everyone), then jumped into GM's FastLane to release some teaser pics and say absolutely nothing ("The Chevrolet Volt’s exterior design is an attractive balance between aerodynamic performance and styling.") The Volt's Chief Engineer was more forthcoming– and forthright. Andrew Farrah tells the AP [via Autonet] that "GM workers are testing batteries to make sure they last at least 10 years or 150,000 miles. It would cost more than $10,000 to replace them." The batteries or the engineers? Anyway, "The Volt also is going through the same design issues as a new car powered by a conventional engine, Farah said. 'The program has all of those same things built in. We're just doing them faster because we have to.'" How reassuring is that?

Cornering's the thing, but I am an absolute horn dog for automotive aural sex. Yes, I bought an E39 M5 for the stealth style, comfort and continent-crushing high speed stability. But it was the car's low-speed V8 burble that captured my heart. I held off from Boxsterhood until Porsche finally put some genuine aggression in its exhaust note. (I could easily understand why a pistonhead would prefer a Corvette over a Porsche based on relative exhaust notes.) Folks, I've got 47 of my favorite engine sounds on my iPod. SL55 AMG. Ford GT. Lamborghini Murcielago. And the rest. And I still think the Ferrari F355's flat-plane crank eight-cylinder engine is the world's best sounding powerplant. It's nuts, then crazy, then insane, then maniacal, then the Four Horsemen of the Apocalypse leaving hoof-prints on your temporal lobe. You? [NB: Wait until the end of this video.]

Ferrari 355 on dyno - sound of magic

Frank Williams arrived at TTAC as a reader. He became a writer. Then an editor. Then Managing Editor. His tenure at the top has been a blessing, freeing me from the bonds of admin, buffering me from the buffoons who enter our little corner of cyberspace. At the same time, Frank's editorial contributions have been legion, from pithy blogs to in-depth statistical analysis. But more than that, Frank's been my constant companion and emotional support. As of September 1, Frank will be tapping computer keys on behalf of a Washington think tank. He's moving on to bigger, better-paying things. But I hope that Frank shares my belief that helping build and maintain TTAC's audience has been one of the best things he's ever done. While I welcome Justin as our new ME, I think our Best and Brightest will agree that Mr. Williams is an irreplaceable talent. His wit, wisdom and perspicacity will be missed. You know; later. For now, thanks for sorting out that Lego blog. You are one persistent son of a bitch. And for that, I'm truly thankful.  

Auto Motor und Sport reports supercar sales jumped 45 percent between 2002 and 2007, to a record 165k units per year. The German buff book details a study by the Instituts für Automobilwirtschaft (IFA) at the Hochschule für Wirtschaft und Umwelt (HfWU) in Nürtingen-Geislingen. It estimates supercar sales will increase by another 20 percent to 200k units by 2015. The IFA says much of this growth will be driven by newly wealthy criminals and dictators status-seekers in emerging economies like Russia and China. It also credits (blames?) "the spiral of exclusivity." "Many premium manufacturers have lost exclusivity by widening their model ranges. The small-volume firms can offer the exclusivity that is so important for supercar buyers." So although the horsepower wars of the 1990s may have reached their zenith with the 1001 hp Veyron, we can expect a steady stream of four-wheeled unobtainium– with carbon tax surcharges greater than the GNP of Belize.

Struggling Malaysian automaker Proton has been hunting for a major OEM partnership for some time. Rumors have linked the company to PSA and VW. GM snuggled-up to Proton last year, meeting with management and shareholders. According to The Motor Authority, GM's recent financial "challenges" haven't discouraged the The General's Prez for S.E. Asian Ops from continuing to play footsie. "If Proton wants to talk," Stephen K. Carlisle announced. "We are ready as we are always interested about collaborating with them." GM may be hunting for [another] low-cost, entry-level car for emerging markets. As Proton also holds a majority share of Lotus, Hethelmania may also be taking hold. But c'mon. Another brand? And what about the money question? "GM would be able to make a financial commitment for a collaboration with Proton," Carlisle told The Star. "If it made business sense now."  Yeah, sure.