We’re trying something new here at TTAC. Some folks really love the Farago + Berkowitz podcasts that focus more on industry and on what’s in the TTAC news. Others said that while they liked those, what was really up their alley were podcasts where I just had your average bar talk with Lieberman about cars. So why not both? While we don’t plan to have, say, eight divisions of podcasting, this way you get up to 20 minutes per day of TTAC podcasting, plus your choice of focus. And on the topic of doubling, the Berkowitz/Lieberman car chats will be posted over on Lieberman’s main master – Autofiends.com – as well. In today’s cast with Robert, we hit on the Mazda2, Edmunds, and Rick Wagoner.
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Displaying a knack for euphemisms, The Detroit News reports that the Securities and Exchange Commission have banned short sales of General Motors stock until October 2, “a move aimed at preventing the stock from being driven down amid rocky market conditions.” (As the DeTN puts it, “Investors who engage in short sales attempt to profit from falling stock prices. They sell borrowed shares, hoping the price will drop so they can repurchase the stock later at a cheaper price and pocket the difference.”) GM joins a second wave of around 90 companies added to the list of 799 companies whose stocks can no longer be purchased in the hope/plan/acknowledgement that their share price is headed for the crapper. So why is GM on this list? “The SEC said the temporary move was needed to ‘prevent short selling from being used to drive down the share prices of issuers even where there is no fundamental basis for a price decline other than general market conditions.'” Again, so why is GM on this list? [As of 1:55pm, GM’s stock price was at $12.40, having dipped below $10 several times this year.]
Dodge is launching its 2009 Ram into some rough sales seas. And don’t they just know it. Automotive News [sub] reports that Dodge is quietly offering $1k incentives on every all-new Ram to get sales going. But even cash on the hood of an all-new truck might not be enough. “You need money on it because you’re trading somebody out of a truck they’re upside-down in,” says Earl Hesterberg, chairman of a Houston-area Chrysler dealership group. In other words, Dodge salesfolks will have to sympathize with potential customers’ pickup depreciation before talking them into yet another (sure to depreciate like a Phoenix suburb) pickup truck. And all while the new Ram sits on lots cluttered with ’08 Rams with up to $10,500 on the hood. In other words, not good. A new 2009 Ram quad cab 4×2 SLT will sticker for $30,675, better equipped and a grand less than a comparable 2008. Remember when we told you that ChryCo was having a hard time pricing its RamBox option to be available on the new Ram Crew Cab? Well, Tom LaSorda’s baby will cost a tidy $1,895 as an option… but not until November. For that money you get lockable boxes on each side of the bed, each capable of holding “240 12-ounce beverage cans, with enough ice to keep them ready for a party,” according to Chrysler. And a stern lecture on not drinking and driving. You also get a bed divider and a bed extender. But is it gimmick enough to turn down ten grand on an ’08 model? In this economy, you’d have to guess no.
The Detroit Free Press finally offers us a timeline on when GM, Ford and Chrysler might get their share of $25b worth of federal low-interest loans. While congressional funding will most probably slip through this week, cash-in-hand is a whole ‘nother matter. “The Bush administration must still write the rules that will govern how the loans will be handed out, and the U.S. Department of Energy has said the process may not be done by the end of the year. After Congress set up a loan guarantee program to develop clean energy sources in August 2005, the DOE took more than two years to write the rules for it, and no money has been lent yet. With a new administration taking a couple of months to fill key jobs and restart the work, auto executives worry that without quick action on the rules, they would not see any money from the loans until mid-2009 at the earliest.” To his credit, The Freep’s Justin Hyde spells it out. “Given the estimates of slow auto sales through 2010, that kind of delay could make Detroit’s troubles look more like Wall Street’s.”
God forbid The Detroit Free Press should question the intellectual basis upon which bailout proponents stake their claim to $25b worth of taxpayer funded low-interest loans. (Or more.) No, the hometown paper feels obliged– obliged I tell you– to offer its own summary of how The Big 2.8 should argue their case for bailout bucks during this “challenging” time. Justin Hyde of their Washington staff reckons Wall Street’s financial meltdown helps Motown by blessing them with three talking points: “automakers and parts suppliers are pledging to pay back the money they receive;” the loans are “small change” and “helping blue-collar factory workers carries more political cachet than riding to the rescue of bankers.” And now the really good news! “Democratic leaders have said they likely will put the auto industry’s request into the budget resolution that keeps the government open through the elections — the only veto-proof bill that Congress must pass before it adjourns. That bill is expected to come to the floor sometime later this week, depending on how far lawmakers get on other matters.” Bad news to follow…
The Mazda3 is a perennial TTAC ten-bester, and a top pick for those who want some fun with their practical transportation. Now Mazda President Hisakazu Imaki worries aloud to Automotive News (sub) that introducing its Mazda2 subcompact could cannibalize sales of its long-soldiering Mazda3. “The Mazda2 is a very good product, and we’ve received very strong requests from dealers. But it is still under study,” says Imaki of the 2’s chances at a North American debut. “But I must also say that I don’t regret that we haven’t been able to supply the car thus far.” Beyond cannibalization of the 3 in the short term, Imaki worries that a moderation in fuel prices could slacken demand for the 2. Mazda sister company Ford has already commited to bringing the Mazda2-based Fiesta to America, but then it doesn’t have to worry about squeezing its volume sales leader to fit the Fiesta into its portfolio. Still, Mazda would be crazy to not bring the Yaris/Fit Fighter stateside. The 3 has set a consensus standard for fun-to-drive compact cars, and bringing the Zoom-Zoom attitude to the (on fire) subcompact market could only expand Mazdas brand. Honda’s Fit sells briskly even with dealer markups, in large part because it’s economical, practical and fun to drive. For some reason, nobody at Honda worries about it munching into Civic sales. Dear Mr Imaki, your concern is well taken, but it’s largely unnecessary. For a textbook example of real automotive cannibalism, please reference GM’s Lambda Platform. And bring on the 2 already!
Edmunds has a new review on the InsideLine home page. “BMW M3 vs. Audi RS5. V8 German Supercoupes Face Off.” And they subtitle it “2010 Audi RS5 meets 2010 BMW M3 CSL.” Except that they don’t face off and they don’t meet. There is no RS5 as of yet. And BMW cancelled the M3 CSL program. Edmunds has no review to offer here, and instead puts forth an anticipatory preview of what the two cars might be like in contrast. The ample pictures of the cars in motion are photochops. This isn’t the first time Edmunds has pulled the “click on our link” bait and switch, either. In February, before either car was on sale or available for even the most committed online buff book (Edmunds Inside Line) to drive, EIL “conducted” a comparison test between the Camaro and Challenger. This kind of dishonesty is not necessary. There’s nothing wrong with titling a post a “prospective preview” or publishing it as TTAC has done: as an editorial. But to mislead people into thinking that this is a “face off” between two cars is nothing but misdirection. In Edmunds case, it is particularly difficult to tell this is just a stats-based preview because they so regularly have access to preproduction cars. So it’s plausible that they could have driven the 2010 RS5, even if they are describing it as “coming down the pipleline.” I’m not as angry as I sound, but it’s crucial to keep in mind that when large websites squander the advantages – and the clean slate – offered by being online, they leave themselves looking no different than the print buff books.
GM’s burning its way through a reported $1b per month. So shelling-out $250m on a new research and development campus in Shanghai is no biggie. And here’s some PC for your PC: a significant part of the new research facility will focus on developing new green and alternative energy technology (whatever green means). When fully operational in 2009, the new facility will employ some 2500 people. And for those of you inclined to say “yeah right,” General Motors’ Asia Pacific President Nick Reilly says any problems in the Chinese market are all in your head. “Reilly attributed the downturn in the auto market to the Beijing Olympics in August, a sharply declining Chinese stock market, and an increase in fuel prices in June,” the GM suit told CNN Money. “But he added that ‘underlying demand is still there.’ Reilly said he expects vehicle sales to return to double-digit growth this month or next. He said he expects China’s auto market to maintain 10% to 15% growth after this year, without elaborating.” Elaboration? We don’t need no stinkin’ elaboration!
Over the last few years, the last generation Audi A4 was growing increasingly stale. Updated offerings from BMW, Lexus, Infiniti, everyone but Volvo have overtaken Ingolstadt’s brot und butter model. To keep the faith– or at least the faithful– Audi’s engineers initiated a massive redesign of the A4. Obviously, it’s a better car. Vorsprung and all that. But can the new A4 leapfrog the luxury brat pack? Or is it more of the same? Yes.
Audi’s dabbled in small cars for some time. Not all of their attempts have been successful. Despite all-aluminum construction and clever packaging, the A2 was a flop. Audi is back at it, though, unveiling their A1 city car at the Paris show. Considering Audi’s proclivity for up-to-the-second trendiness, it can’t be long before they announce– and maybe even build– an EV. The model would probably share a basic platform with compact VWs, most notably the VW Up! Concept. Ingolstadt’s boffins would need to elevate the floor to provide battery space. The “service hatch” first used on the A2 could also make a comeback on the EV, especially if we consider that it makes a good place for a plug-in socket. Add some chrome and lacquer finishes, LEDs and optic fiber in the lights, some fancy wheels and there you go: small, electric, trendy and premium.
Mothers Against Drunk Driving (MADD) is a formidable political force. As you’d expect, the group supports police “sobriety checkpoints,” a .08 blood alcohol content threshhold for drunk driving convictions and ignition interlocks for convicted drunk drivers. As we’ve reported before, the American Beverage Institute (ABI) opposes random roadblocks and believes that the .08 level is set too low. And they’re not happy about ignition interlocks for anyone convicted of drunk driving. Obviously, this means war. MADD has opened a new front in their anti-ABI campaign. A press release names ABI members and completely mis-characterizes the trade group’s position on drink driving (“ABI’s consistent stand is that America’s drunk driving laws are too strict and should not be enforced) and intimates that ALL “family restaurants” (quotation marks theirs) should quit the organization. “The American public wants to know why these so called ‘family-friendly’ restaurants appear to be putting alcohol profits ahead of public safety,” said Laura Dean-Mooney, national president of MADD. “We call upon these restaurants to explain to the public why they oppose laws proven to keep drunk drivers off the road or, preferably, to support these life-saving measures.” Ends. Means. Justification?
Say what you will about the evils of globalism. One thing’s for sure: if you’re a global playa, there’s no escaping the market’s judgment. The Washington Post reports that sure, falling oil prices have taken their toll on the Russian economy. But Vlad the Inhaler’s power-grab is the real deal. “Analysts say Russia faces continuing doubts about the investment climate, given the Kremlin’s concentration of political power. These concerns were exacerbated by Russia’s war with Georgia last month. Putin’s tough, anti-Western rhetoric raised fears of a turn against foreign investors and even greater state control of the economy. Investors pulled nearly $35 billion out of the country in the weeks after the war.” Translation: GM’s highly-touted Russian investments are not looking so good, these days. “Rising inflation is a political problem. Most analysts expect inflation to hit 14 or 15 percent this year, which for the first time in Putin’s rule would leave the average Russian worse off at the end of the year than at the start.” Oh, and Putin’s regime has increased Russia’s roadways by .1 percent. [thanks to wludavid for the link]
Well he would, wouldn’t he? As usual, George F. Will takes his sweet time getting to the meat of the matter: his final position on Uncle Sam’s $25b low-interest loans for The Big 2.8. And when he does, Will’s irony meter pegs out at 10. “Lemon socialism — the subsidization of the weak — is supposedly needed lest a U.S. automaker file for bankruptcy, causing the sort of civil disorder and social chaos that accompanied the disappearance of Studebaker, Packard, American Motors and others.” Will’s summation hedges his rhetorical bets, but the message couldn’t be any different from Washington Post stablemate and nominal car critic Warren Brown. “Detroit says, correctly, that some of its problems stem from fuel economy and other mandates imposed by the 535 automotive engineers on Capitol Hill. But that is beside the point, which is: No one thinks that the failure of an auto manufacturer would pose systemic risk to the economy. Americans would just buy a different mix of cars.” In fact, day after day, month after month, year after year, they already are. [thanks to loads o’ folks for the link]
“Their overriding challenge is: How do you manage eight different brands?” Well exactly. Dan Gorrell, founder of consultant AutoStratagem, understands that there’s only so much GM can do to promote any one brand or model when there are eight (minus HUMMER seven) hungry mouths (with over 40 models) to feed. No news there. The General’s inability to to trim its American ambitions has long passed the point where they can do much of anything about it (i.e. close or sell brands)– at least without without declaring C11. So the wind-down of what was once the world’s largest automaker continues on all fronts. Advertising Age reports the damage: “General Motors Corp. plans to cut its digital-media budget after dramatically increasing it in the past few years, the automaker’s North American marketing chief told Advertising Age.” Cutting as in no replacement. The Academy Awards are gone. GM Style at the LA and Detroit auto shows is gone. The Super Bowl is gone. So how much of GM’s $2b+ ad spend is left? GM’s Marketing Maven is characteristically cagey. “Mr. LaNeve said last week that GM has already implemented more than half the ad spending cuts it planned for the remainder of 2008. When asked where the reductions were, he said, “It’s 100 things. It’s a consolidation of promotions and getting out of some. It’s production, media, agencies, outsourcing contracts, structural costs and people.”

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