Our six month sales by brand chart is a bit crowded, so we’ve broken out luxury brands for today’s COTD. Bloomberg assembled a grip of analysts who all say that Mercedes is going to sock it to Lexus this year… and this chart certainly proves that the opportunity is there. But then, the opportunity is there for BMW too, if Lexus so much as stops for a breath. One thing is for certain though: Ford may be ruling the mass market, Lincoln is the last stop before Volvo-ville as you work your way down the luxury volume ranking. That’s not great, but given a choice between a respectable luxury brand and a $2.6b first-half profit, I know what nine out of ten auto executives recommend.
The walrus is famous for being immense, powerful, and oddly lugubrious, and for having a mouth that looks like Wilford Brimley after nine hours of cunnilingus. Ditto the Lincoln.
Vanity Fair’s Brett Berk channels his inner Robert Farago and comes up with one of the more memorable metaphors we’ve heard in some time. Word to Berk: PR folk don’t tend to celebrate the metaphorical marriage of the ridiculous and the sublime as much as… well, everyone else. As we’ve learned the hard way here at TTAC, sexually-tinged metaphors can get you cut off fromthe press car gravy train faster than you can say “flying vagina.” On the other hand, devastatingly accurate metaphors delivered with little regard for their consequences have a way of endearing you to a the best kinds of readers. And that, after all, is what this whole auto writing this about. Consider us inspired!
Now that GM’s acquisition of the subprime lender AmeriCredit has had 24 hours to sink in, howls of protest are starting to surface. The charge is being led by Senator Chuck Grassley, who has requested a review of the deal from the SIGTARP, saying
If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first. After GM’s experience with GMAC, which left GM seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if GM focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans.
And though Grassley’s criticism could be read as mere partisan gamesmanship from a leader of “the party of no,” there are a number of very good reasons for opposing the deal.
An anonymous Toyota Tech sent us these recent images of a 2008 Prius and its highly questionable pedal-floormat interface. Did nobody tell this guy that Toyota has had some problems with floormat pedal interference, and that there had been a recall? Did he somehow miss the months-long media frenzy? This is yet more proof that there is literally no way to completely prevent unintended acceleration, even if the problem has been identified and a recall has been issued. Remember folks, when it comes to cars only you can keep you safe.
Ford Motor Company has announced its second-quarter results for 2010, and the company says it earned $2.6b over the last three months on $2.9b in operating profit before special items. In a departure from the typical model for domestic automakers, Ford’s growth was largely driven by improvement in North American results: Ford earned $1.9b in pre-tax operating profits in North America after boosting its Ford brand to the top spot in the American market over the first six months of 2010. Ford earned $31.3b in Q2 revenue, a $4.5b improvement over Q2 2009 (a $7.4b improvement excluding Volvo). Ford’s operating cash flow improved by $2.6b despite ending the quarter with $21.9b in cash, a $3.4b drop since the end of Q1. However, that drop in cash-on-hand was the result of a $3.8b debt reduction, and Ford figures its total automotive liquidity (including all credit facilities) is $25.4b. Automotive debt was reduced by about $7b, to $27.3b, the result of both the UAW Retiree Medical Benefit trust buydown and a $3b repayment of a revolving credit line. The shutdown of Mercury has reportedly cost Ford about $229m so far, and Ford expects that amount to equal slightly under half of the total cost of eliminating the brand.
Ford’s results aren’t very surprising given the fact that it Ford brand outsold all other brands over the first half of 2010, but the healthy profit shows that a rumored dependence on fleet sales wasn’t enough of a factor to weaken Ford’s financial results. Though debt levels remain high and its overseas performance remains weak, Ford has proven once again that it’s the healthiest American automaker… if only in terms of its North American market performance.
More to the point, is it better to acknowledge that regrets might be common among Chrysler buyers and address the problem with an ad like this one… or does this campaign feed the perception that it’s trying to address?
Shanshan Du and Yu Qin of Troy, MI have been indicted on charges including conspiracy for allegedly stealing GM hybrid technology between 2003 and 2005. According to the Detroit News,
Du, who was hired at GM in 2000 and worked in the company’s Advance Technology Vehicle Group, copied thousands of pages of GM trade secrets onto a portable computer hard drive five days after accepting a buyout offer in 2005. The indictment alleges the theft of secrets dates back to 2003.
GM estimates the value of the stolen documents at $40 million, according to the U.S. Attorney’s Office.
The indictment charges that Du and Qin set up their own company in hopes of transferring technology to the Chinese automaker Chery, but that no technology ever made it to the Wuhu-based automaker. And though this is an obvious opportunity for a laugh at the expense of “Chinese R&D,” the real story here is just how stupid Du and Qin were for targeting The General’s hybrid technology between 2003 and 2005. (Read More…)
Via Twitter comes this, the first shot yet of the Dodge version of the new Jeep Grand Cherokee. Dodge won’t confirm whether the badly battered Durango name will grace its version of the JGC, but at least it’s clear that the brand is getting away from its truck-alike styling dependence. But with the new Grand Cherokee earning strong reviews, will Dodge’s (likely) decontented version be a letdown? It had better not be, because another big name from the SUV era is going to stake a claim in the mid-full CUV segment starting on Monday: Ford’s 2011 Explorer.
The automotive world largely yawned when Ford announced the 2011 Lincoln MKZ hybrid. After all, Ford already offered the Fusion and Mercury Milan in hybrid flavor, and the standard MKZ is hardly setting the world on fire with only 11,214 models sold in the first half of 2010. In search of a bigger publicity bump for its luxury hybrid, Ford has pulled a fun little gimmick out of its bag of tricks: the 2011 MKZ will offer a hybrid drivetrain for no price premium over the standard V6 version [press release here]. According to the AP [via Yahoo], this is the first time a manufacturer has offered hybrid and non-hybrid versions of the same car for the same price. And really, the move comes as no huge surprise. With Mercury on its way out, Ford doesn’t have to worry about the$35,180 MKZ Hybrid encroaching on the $32k Milan Hybrid, and if it had charged a hybrid premium, the MKZ hybrid could have cost closer to $40k where it would have faced tougher competition from better-established luxury brands. Besides, Lincoln needs to build some momentum somehow… but is value a good place to start rebuilding a worn-down luxury brand?
With Ford and Honda running away with the compact crossover segment, a tight pack of competitors is gathering around the 100k annual unit mark (graph after the jump). Hyundai has already thrown its redesigned Sorento into this fearsome battle with promising results so far (20k units YTD), but Kia’s Sportage has been battling in this segment since before it was cool. Literally. As far as we can tell, it’s the oldest continuously-sold compact CUV nameplate in the US market… which makes you wonder what a continuously-evolved Chevy Tracker might have become. Anyway, after years of Tracker-like neglect, Sportage is coming back with a fresh set of Peter Schreyer-tailored duds. Not to mention a direct-injection, turbocharged engine option (“270-plus horsepower” according to the press release), Bluetooth, and the UVO hands-free system (think SYNC). As you can imagine, the price has gone up some…
After months of speculation about GM’s re-entry into the subprime lending market, The General has announced a deal in which it will purchase the lender AmeriCredit for $3.5b. Founded in 1992, and managing assets worth $10b, AmeriCredit has been pursued by GM for the last month, according to GM CFO Chris Liddell in the WSJ [sub]. GM paid AmeriCredit stockholders $24.50 per share for a controlling interest in the firm, a 24 percent premium over its $19.70 closing price yesterday. Still, GM insists that acquiring AmeriCredit will have “a minimal impact” on its balance sheet, although no explanation is given as to how. $3.5b is at least ten percent of GM’s cash pile at this point, and it’s not clear if that qualifies it as a “minimal impact” or if GM is using some kind of financial instrument to purchase the firm. AmeriCredit says it will “expand its offerings” to support GM, likely in the area of lease deals, but it will also continue to offer loans to non-GM-brand car deals.
Car & Driver’s endearingly awkward Editor-in-Chief Eddie Alterman took to the interwebs today, with a “viral-style” video imploring enthusiasts to “save the manuals.” And though Alterman can’t help but sell the faux-sincerity, the message is brain-hurtingly mangled by his attempt to be the Old Spice Guy of the car world. (Read More…)
As a Nissan rep pointed out via email last night, yesterday’s Chart Of The Day hardly tells the whole story of “the other Japanese brand.” Since 1995, Nissan has made up for declining “core model” sales by catching the tail end of the SUV/Truck craze with its Titan/Armada/XTerra/Murano combo. And, as this graph shows, those four models gave the brand a big spike for most of the last decade before diving unceremoniously towards oblivion (with the exception of Murano). Since then, Nissan seems to be targeting the niche left open by Honda: small, value-laden, efficient cars like the Rogue and Versa are Nissan’s new meal ticket (in addition to the still-soaring Altima). With a new Versa-based Juke mini-CUV launching this Summer, Nissan is poised to continue building on that image, but it still has to contend with remnants of its “Japanese Pontiac” and “Mainstream BOF-slinger” identities. Can Nissan be all of these things at the same time? Or will the Leaf EV halo push Nissan towards ever smaller, more efficient offerings and a neo-Honda emphasis on compact value? We’re hearing that changes are underway at the highest levels of Nissan’s leadership… coming up with a coherent brand vision and product plan for Nissan North America will have to be one of the new team’s top priorities.
15 years ago, these six cars were Nissan. Sure, they sold a few Zs back in ’95 (4,176, actually), and the 240SX was in its last year of five-digit sales, but the Altima, Maxima, Sentra, Frontier, Quest and Pathfinder were the bread and butter. Needless to say, things change over 15 years, and though Nissan still sells all of these vehicles (excepting the Quest’s 2010 model-year hiatus), they’re no longer the reliable core they once were. Yes, the Altima sells like hotcakes, but Nissan’s other core nameplates are on steady steady glidepaths downwards, and the brand’s volume is largely being maintained by the introduction of new models. And as is so often the case in business, this shift away from core strengths is being rewarded by some thorough housecleaning. Having spent quite a bit of today talking with Nissan consultant Sharyn Bovat, yesterday’s rhetorical question What The Foxtrot Is Going On At Nissanis starting to come into sharper focus. Expect full reporting shortly, but in the mean time know this: things are changing at Nissan. My question now: does this chart help explain why?
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