Germany’s new car market continues to be anemic. In September, sales for the first nine months were down 27.5 percent. Official October data are expected later in the day, or tomorrow. Nobody expects sudden growth. (The whisper number is -20 percent.) Nevertheless, the German car industry runs extra shifts and out of cars.
Why? (Read More…)
The Sixth Sense. The “Saw” movies. The Vanishing (Original Dutch version). The Fight Club. What do all these films have in common? They are like the “Porsche-Volkswagen” saga. Always an unexpected twist. Let’s start at the beginning. When Porsche tried to takeover Volkswagen, it really was a case of the mouse biting the lion. The reality set in, the credit markets collapsed, and Volkswagen went from being the takeovee to the takeover…er (how I managed to pass English is a complete mystery to me). [ED. Takeoveror?] But like any good saga, there’s got to be a final bite and there’s a 30 percent chance this one will happen. (Read More…)
German media calls it the “second economic miracle.” The German industry is hitting on all cylinders, a lot driven by exports. Europe’s biggest economy is officially forecast to expand by 3.4 percent this year, equal to the rate of 2006 and the highest since German reunification in 1990. When the recession/credit crunch hit a couple of years ago, the mantra from management to the unions was quite clear. “We need concessions to keep the company competitive and prevent going under.” Unions gave the concessions and life went on. But now, the climate is different. Volkswagen announced massive profits and Ford are also rolling in it. Well, if things are that good… ? (Read More…)
As Herr Schmitt reported yesterday, it looked like it was going to be a bumper month for the Indian car market. In his article he mentioned that market leader, Maruti Suzuki posted a 39 percent gain, which is impressive considering production constraints is preventing them from selling any more. But let’s have a look at the other players in the Indian motor market. (Read More…)
Whoops; I’m way late. Sorry. But a virus or something ate my CC for Tuesday, and I’m up late rewriting it from scratch. Fun! Late or not, I do have to give a shout out to Dimwit who guessed the Caddy hearse. Congratulations indeed.
My friend, driving instructor, and fellow racer Brian Makse occasionally plays at being a Canadian auto journalist. Being a Canadian autojourno is very possibly the bestest job available, because even the third-tier guys get free cars and first-class flights to Europe. Right now Brian has a new Jaguar XJR in his garage. Unlike Mr. Makse, I owned a Jaguar when the company was British-owned and fiercely independent, not merely a pawn in various Asian financial shell games.
In an effort to write a better article than Makse’s upcoming Jag XKR review, I’ve decided to talk about a car that is so much cooler than the TataJag that a double shot of vodka placed on its bonnet would immediately freeze. I’m referring to a British automobile of such impeccable pedigree that even Bristol owners nod in its general direction with grudging respect. Ladies and gentlemen… the Lynx Eventer.
Reuters has followed up its look inside the Government’s involvement in GM with a breaking report on the specifics of The General’s IPO. According to Reuters sources, the IPO will include 365 million common shares for $26 to $29 each, for a total of between $9.5b and $10b. The Treasury is expected to sell between $1.5b and $2b of its 61 percent stake in GM, likely to “four or five sovereign wealth funds,” bringing its stake down to 43.3 percent. The Canadian and Ontario governments are expected to sell down their stake from 11.7 percent to 9.6 percent, while the UAW VEBA trust-owned stake is likely to to drop from 17.5 percent to 15 percent. A Reuters source concludes that
The IPO would likely value the entire company at close to $60 billion, below the $67 billion needed if U.S. taxpayers are to break even on the common stock held by the Treasury
At the midpoint of the proposed price range, GM’s stock outstanding, including warrants, would be worth about $50 billion, roughly the same level as Ford Motor Co. The IPO’s underwriters are hoping to sell at the top end of the range, and for the stock to rise 20% or more when trading begins. At that level, GM could be worth $60 billion or more.
You’re driving down the road at a spirited tempo when you see a big, black, tuned Taurus. No biggie, right?
(Read More…)
Even though Fiat CEO Sergio Marchionne’s disparaging comments about its over-reliance on Italian manufacturing have opened the door for more US manufacturing opportunities, United Auto Workers boss Bob King wants to make it clear that he won’t be taking advantage of Fiat’s rift with its Italian unions. Fiat tells Automotive News [sub] that failure to secure Italian union agreement with its new manufacturing plan could send increased production to Serbia, Poland and even the United States. King’s response [via Michigan Public Radio]:
They (automakers) won’t be pitting one worker in one country against another. We’re going to be part of working with our global partners in other unions and building a global middle class – and rebuild the American middle class, really.
Yes, in the brutally competitive international labor market, there is a way for everyone to win… really.
No story should ever start, as this one does, with “my First Rover Metro.” The implication that there are more Metros to come is all too obvious, and could probably be best categorized as a “cry for help.” In any case, my first Rover Metro was a teal 1995 1.1L Kensington edition, purchased for £60 from a friend in Bishop-Stortford. The Kensington edition meant I got shards of carpet over the door panels, and the kind of pizzazz that only an engineer from Coventry would be able to come up with. The Metro lasted only 19 hours in my hands before a brake failure led to its demise into the back of a yellow Hyundai. My second Rover Metro was a 1997 Tahiti Blue 1.1L Ascot edition*, which meant I got full wheel covers and blue piping in the velour. This only accelerated my descent into the world of English motoring, where I found joy and fulfillment in the death rattle of a Rover K-series engine.
*astute readers will recall that both vehicles are technically Rover 100’s, but are always remembered in pop culture as the Metro.
Last week, I reported on my decision to use E85 fuel in my 2009 Town Car for a week or so. How’d it go? Well, as it so happened, I accidentally veered off the road while texting and killed a
Last week Jack Baruth reviewed the press release that attended Consumer Reports’ latest auto reliability survey results. But don’t run out and buy a Porsche for the sake of reliability just yet. And it might even be safe to buy a Chrysler.
Jack was surprised that Porsche ranked second among makes. On top of this, the Boxster was reported to be the most reliable car. What CR didn’t include in the press release about its coverage of Porsche models:
Number of 2009s with enough responses: 1
(a solid black blob for the 911)
Number of 2010s with enough responses: zero
Consumer Reports’ response to virtually any critique has long been the large size of their sample. Yet their coverage of recent Porsches is almost nonexistent. CR’s predictions are based on however many of the three most recent model years they have sufficient data for. The prediction for the 2011 Boxster is entirely based on the 2008, because that’s the only year they have enough data for. Yet the 2009 included significant revisions. They have no reliability ratings for the Panamera or the all-new Cayenne. So they have little basis for ranking the entire Porsche’s 2011 line. Even so, they rank Porsche second from the top.
Data limitations don’t end with Porsche. CR also did not receive enough responses for…
In general, coverage of recent model years is much less complete than for 2008 and earlier. The severe downturn in car sales two years ago appears to have severely impacted Consumer Reports’ ability to gather enough data on the 2009 and 2010 model years. As a result, they make predictions for many 2011s based entirely on the 2008 model year, but do not clearly note this. In these cases any improvements (or declines) over the last two years have no impact. And yet they still conclude that some manufacturers have improved over the past year, while others have not.
Chrysler allegedly falls in the latter camp, with the press release reporting that it “remains the lowest-ranked manufacturer.” Chrysler has responded that, based on warranty claims,the quality of its products has greatly improved over the past two model years. Who’s correct? According to CR’s own results, quite possibly Chrysler. By CR’s count, Chrysler offers 28 models.
Number of 2009s with enough responses: 14
Number of 2010s with enough responses: 7
The problem, once again: CR’s coverage is far less complete than their overall sample size (1.3 million) suggests it should be. Chrysler’s rating is heavily based on the 2008 model year. And their products were mostly unreliable that year.
In two cases for which CR has enough data, the minivans and the Dodge Journey, the ratings improve from “much worse than average” for the 2009s to “about average” for the 2010s. This said, if other models have similarly improved, and if CR had had enough data on them, it still wouldn’t have been enough. The predicted reliability formula (which is confidential) appears to equally weight the model years, even though the most recent year is most likely to predict the current year. So a bad 2008 and 2009 can easily outweigh a much better 2010, and do for the minivans and the Journey. Even when CR does have enough data for all model years it often takes three years before an improvement is fully reflected in their predictions. When they don’t have enough data on the most recent years, it can take forever.
With such sparse data on the 2009s and 2010s, and some indication that the reliability of Chrysler’s products has improved while at least one Porsche has gone in the other direction, Consumer Reports probably should have reported that Chrysler’s and Porsche’s relative positions are currently unclear. Instead, they applied a formula that doesn’t take trends into account and that ignores substantial holes in their data. Porsche benefits. Chrysler does not.
Coming in Part II: Should you EcoBoost?
Tomorrow, you have two choices:
1.) Go vote.
2.) Watch the real time reporting of October new car sales on TTAC.
What should you do? (Read More…)
Ever since it became clear that the government would rescue General Motors and Chrysler, the Treasury Department has made it clear that it would stay out of “day to day” decision making at the rescued automakers. Allowing the rescued firms to operate independently was a political calculation based on the desire to keep politics from affecting sales at the two rescued automakers, but according to a Reuters special report, Treasury has not been able to keep its hands completely out of important decisions concerning the future of the two firms. Particularly in terms of setting up GM’s Initial Public Offering, Reuters found that the Treasury made important decisions affecting
its speed and size, the fees paid to the bankers and the potential involvement of offshore investors
Though this has kept the IPO out of election season and all of its potential for political problems, there is some downside to the Treasury’s involvement, particularly because it will not be exiting its equity position in GM until about 18 months after the IPO. As a result, analysts predict problems securing investors in a firm that may still be subject to ongoing government control. Morningstar’s David Whiston tells Reuters
I’m sure that there will be some institutional investors, and even some individual investors, that it scares away
Four driverless, autonomous vans finished a trek most drivers would never think of driving: From Italy through Eastern Europe, Russia, Kazakhstan and the Gobi Desert, all the way to Shanghai, China. They arrived there last Thursday, just in time for the Expo that closed last weekend. It was a long 8000 mile way, and they never got lost. (Read More…)
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