The ad for the new Mercedes GLK is targeted straight at owners of MB’s ML and GL SUVs. After all, the new GLK gives you the “same innovation in a smaller design.” Same agility. Same suspension. Same luxury. Same depreciation (my add). So, why bother paying more for one of Mercedes’ more much macho trucks? Sure, this baby brother routine hurts the automaker. The Nissan’s Rogue’s Murano-i-cide is but one example where a new, smaller vehicle robbed Peter to pay Paul less. But that’s the way it is. In Bailout Nation’s new era of hunker down austerity, downsizing is almost as fashionable as having a job. Big ticket buyer meets smaller ticket price on the dark side of town. The carmakers must figure that what they lose in profit they’ll recover in volume. Ask GM how well that works. In that sense the Mercedes GLK is a born win – loser. Or is it?
Latest auto news, reviews, editorials, and podcasts
An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Tokyo this week.
Here they come: China’s SAIC will sell its homegrown cars to Spain, UK, and Israel beginning in 2010, Gasgoo reports. Some of the cars will come directly from SAIC’s assembly plants in Shanghai and Nanjing, while others will come from the company’s UK assembly plants, which SAIC acquired from Rover. The UK will get domesticated Chinese. All cars will comply with EU Euro-5 emission standards.
Germany down 14 percent in January: Not quite 19 percent as feared yesterday, but close. Germany sold 14 percent fewer cars in January 2009 than in January 2007, Automobilwoche [sub] reports. If you are looking for a statistical savior: Adjusted for buying days, the drop is only 8 percent. All eyes on the clunker culling money, €2.5K. It was introduced 1/27, too late to save the first week of the year.
Sania rejects Porsche, Porsche happy: Much to the relief of Porsche, Sweden’s truckmaker, Scania, rejected a bid Porsche had to make after taking over VW, the Wall Street Journal [sub] writes.
Announcing the single greatest transfer of wealth in the world in the last six hours. Well, GM and Chrysler would like their United Auto Workers (UAW) employees to take your tax money and quit. That way the ailing American automakers can replace the highly-paid union workers with lower paid union workers (that would still pay the same union dues, ‘natch). And, thus, prove to someone on Capitol Hill that they’re satisfying the provision of their $17.4b “bridge” loans. To that end, GM’s offering its high wage union workers a $20k “bonus” and a $25k car voucher to piss off. Chrysler’s offering $50k and a $25k voucher. But there are all kinds of problems with this plan.
India’s Tata has gone from darling to dumpling in just a year. The high profile Nano People’s Car project still hasn’t gone into production, and the $2.3b purchase of Jaguar and Land Rover now seems spectacularly ill-timed. Business Week recently covered the story with these great opening notes: “What a difference a year makes.” India is in the throes of its own economic crisis; thanks to high inflation, high interest rates, tight credit markets, excessive corporate debt and a suddenly spending averse middle class. Pretty much like most places in the world, but a little different.
Following the Scottsdale auction season, dealers at the top end of the collector car market breathed a collective sigh of relief. As the the New York Times headline put it, the auction action proved that prices “Soften but Don’t Crash.” Maybe so, but there’s a hidden dynamic involved. “People tend to forget that the auction houses work just as hard at reducing the sellers’ price as they do on getting the buyers to pay it,” says Mike Nicholl, proprietor of Las Vegas’ Classic and Collectible Cars. In other words, the results simply reaffirm that car sellers’ willingness to take a hit currently matches buyers’ bargain-hunting budgets. The General Manager of Lamborghini Bergen County (NJ) agrees. He says pre-owned inventory levels are up, but the deals are still going down. “More people are hurting, looking to get out of their cars,” Alan Greenfield says. “But the lower prices are attracting new buyers.” Despite the market’s recent diet of anti-gravity pills, or at least away from the people dispensing same, there are signs that the high end market is headed for collapse.
The taxpayer advocacy group Citizens Against Government Waste (CAGW) has named U.S. Secretary of Transportation Ray H. LaHood its “January 2009 Porker of the Month.” “In his new position, Secretary LaHood will preside over the distribution of tens of billions of tax dollars for transportation projects in the stimulus package that is moving forward in Congress,” the group said in a statement. “As a member of Congress from Illinois between 1995 and 2009, then-Rep. LaHood made the most of his seat on the House Appropriations Committee and over time became adept at spending more and more of the taxpayers’ money… For his long-standing disregard for the taxpayers’ money and an abundance of concern over how he will administer the Department of Transportation, CAGW names Ray LaHood January Porker of the Month.”
Holy lack of internal controls Batman! Automotive News [sub] reports the “now it can be told” story behind the story of a Minnesota mega-dealer’s collapse. Chrysler pulled the plug on Denny Hecker last fall, forcing Hecker to close six of his 16 dealerships and sell three others. Turns out Chrysler Financial lent the “flamboyant 56-year-old entrepreneur” $550 million. And get this: $50m of that went to Hecker personally. The information surfaced after Hecker sued Chrysler Financial for canceling his dealerships’ credit lines “without warning.” Chrysler countersued, revealing that it loved them some Hecker. Post-Cerberus, ChryCo threw money at—I mean, “invested”—in Hecker’s dealerships, a rental car agency (since bankrupt), real estate and “investment firms.” Ford was behind the curve on this one; they’ve sued Hecker for a relatively paltry $3.1m for missing vehicle and parts payments. As the Detroit-shaped crater grows larger, look for more “revelations” from American automakers’ go-go past. Others may have done the same thing, but they won’t be facing the same volume or genre of music if/when their dealers end up in bankruptcy court. Meanwhile, Denny better hope his tagline doesn’t apply to his forthcoming court battles: “Nobody walks!”
Well good for them! Hat’s off to Audi’s marketing mavens for realizing that the people who can afford a V10 R8 are exactly the type of people who wouldn’t buy one cause the engines are known for sounding like shit. I mean, even a pistonhead could mistake the BMW M5’s V10 for a diesel at idle or a F1 car at full chat (which may or may not be a good thing). Personally, I’ve never met a V10 that sounded any other way. Not to overuse the scatological metaphor, but as the Brits would say, the engine config falls between two stools. Not as drop dead sexy as a V8 or as suave as a V12. This V10 sounds OK, although I’m a little suspicious of the mix. To these Peter Frampton assaulted ears (Do you hear like I do? I SAID…), the Audi’s audio sounds highly processed. Also, we’re not privy to the powerplant’s sonic signature from inside the cabin—a particularly important aural perspective given that the engine pretty much rests on your shoulders. Again, the first step towards fixing a problem is admitting you have it. Sounds like Audi’s on Step 3. At least.
Once upon a time, I commissioned Guy Broad Jaguar to build an XK120 from the chassis up. From the breakaway steering column to the oversized (though Jag-sourced) six, it was my idea of what an XK should be. She was built with as many upgraded repro parts as possible, by non-union labor. Before I could fettle the machine for something akin to drivability, I spun her on black ice and took out a small English village. (Come back Colleen, all is forgiven.) By the time the car was re-re-built, divorce had claimed my most beautiful asset. But I’ll never forget the consternation the car caused amongst the cognoscenti.
On March 31, President Obama will contemplate GM’s viability report and decide whether the ailing American automaker is, as it contends, “viable.” If so, more bailout bucks. If not, more bailout bucks, in the form of debtor-in-possession financing to the bankrupt behemoth. Either way… In the run-up to CEO Rick Wagoner’s ritual disembowelment for failing to get his company’s shit together, the press is sensing the fact that Wagoner doesn’t have this shit together. This morning, Automotive News [AN, sub] reports on GM’s continued cluelessness on the “pssst. want to buy a dead brand” front. “Just a couple of weeks before General Motors has to submit a detailed plan proving viability, GM executives have no idea what to do with their losing brands.” Yes, AN has found its inner TTAC, affirming my suspicion that the MSM is gradually turning against Detroit’s mindless mega-suckle.
Back from the dead after I’m back from Europe: An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Tokyo this week.
Itai: Japan’s domestic sales of new cars, trucks and buses dropped 27.9 percent year-on-year in January, declining for the sixth straight month, the Nikkei [sub] writes. Sales in January totaled 174,281 vehicles– the lowest for the month since 1976. The Nikkei: “Auto sales are closely monitored by economists since they are the first consumer spending numbers released each month.” And these figures don’t bode well.
Oichi: Honda downgraded its earnings forecast, but still expects to report an 80 billion yen group net profit for the year ending March 31, the Nikkei [sub] reports. Stalled sales in Japan, the U.S. and Europe, as well as the stronger yen, led the automaker to lower its projected profit by 105 billion yen. Strong motorcycle sales in Asia helped Honda skirt the losses seen by Toyota and Nissan.
Aua: Worldwide sales of all brands dropped 25 percent in January. Compared to that, VW’s January loss of 15 percent is not all that bad, says VeeDub’s Martin Winterkorn according to das Autohaus.
Recent Comments