Furious Fuschia counterpoint after the jump.
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Posts By: Edward Niedermeyer
As we’ve noted before, there are lots of ways to skin a segment. Here’s one of them. Notice that four of the top five sellers here are also available as sedans, the Honda Fit being the only exception. Interestingly, compact hatches tend to carry a premium over their sedan variants.
As the search for clues to what went wrong with Toyota’s much-vaunted quality rolls on, Automotive News [sub] has discovered that Toyota discontinued top-level quality-focused meetings shortly after Akio Toyoda took over early last year. The “Customer First” quality meetings were instituted under Toyoda’s predecessor Katsuake Watanabe as a response to Toyota’s 2005 recalls. A Toyota executive involved with quality decisions at the time tells AN [sub] that the Watanabe-headed committee simply disappeared over time:
We saw that the whole company and each division understood what they need to do in terms of Customer First operation. It became a daily activity rather than a special activity. So they didn’t need an executive to instruct them. Because Customer First is something like a philosophy, Customer First activities themselves are continuing. But we don’t have an official organization like a committee.
Ironically, Toyoda used the term “Customer First” repeatedly in his comments to the Japanese press last week. How he squares that emphasis with the decision to cut an executive-level committee named for that phrase remains very much to be seen. Meanwhile, his motivations for cutting the program couldn’t be more obvious, as the slow-and-safe approach added months to vehicle development time.
One more obstacle to the Spyker-Saab deal has been eliminated, as BusinessWeek reports that the EU has approved the Swedish government’s guarantee of a €400m ($547m) loan to the company from the European Investment Bank. EU competition commissioner Neelie Kroes approved the loan today, saying it would not cause “any undue distortions of competition,” and that Saab had offered “adequate remuneration” and collateral. The EIB still has to give the loan final approval, a prospect that Swedish government officials say is likely, despite the fact that €320m of the package was originally intended as an environmentally-friendly car development fund. As Bertel Schmitt put it, “keeping the lights on in Trollhättan while GM delivers parts doesn’t quite fit the purpose.” Unless of course you’re willing to justify anything to get your hands on the new 2010 9-3X “Cross-Combi,” which SaabHistory claims can now be pre-ordered from the remaining US Saab dealers. And if the sedated Swedes in this video are anything to go on, the 9-3X is sure to be, well, a Saab.
If there’s one certainty in the car business, it’s that you know a company is in trouble when their ads forgo showing off their latest models in favor of gauzy images of beloved products past. It’s a trick that the Detroit firms have played to death over their 30 years of decline, and now Toyota is dipping a toe in the soothing waters of nostalgia. For contrast, check out Hyundai’s “more-Toyota-than-Toyota” Super Bowl spot after the jump.
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I will be appearing on CNN’s Newsroom Saturday at 5:30pm Eastern/2:30pm Pacific to discuss the Toyota recalls, their impact on the market and the politics of automotive safety. Do tune in.
Does Tesla’s S-1 SEC filing leave you worried about the state of EV startups? The great thing about the seamy underbelly of the EV industry is that there’s always a shadier prospect out there to make even marginal cases like Tesla look good. Our perennial favorite in the EV vapor game is ZAP, the erstwhile maker of the Xebra EV (interestingly, the Xebra still shows up on ZAP’s webpage). Zap’s latest play in its never-ending quest for press-release fodder: a tie-up with (get this) a South Korean optics company, best known for its camera lenses and closed circuit TV security systems. Because sometimes you have to cross an ocean to find a sucker big enough to say things like:
Samyang decided to partner with ZAP because of its extensive industry knowledge in electric vehicle production and the breadth and maturity of its current line of electric vehicles
Oh dear.
I’ve been warned before by the B&B not to read too much into the forward-looking statements in SEC filings, especially the ones where companies ruminate over all the things that could still go wrong with their struggling firms. These legal disclosures of worst-case-scenarios often reflect unlikely scenarios and can be downright misleading, so we held off from diving too deep into Tesla’s IPO S-1 filing [complete document here]. Others around the web have jumped in without compunction, and this week has yielded a steady drip of troubling revelations. It’s a wild and woolly collection of issues, but given that people are going to be asked to invest in this nightmare of a company, it’s only fair that we give the grievances an airing.
Ford says emphatically no, but the evidence (such as it is) indicates certain similarities. Let’s take a look…
According to MSNBC, Toyota’s US-based spokesfolks are refusing to confirm a Nikkei report that Toyota has issued a recall of 270,000 2010 model-year Priuses for brake issues the company has already acknowledged. “We have no information on any decision to recall the Prius,” said Toyota Motor Sales USA spokesman John Hanson, who said the company is working with the NHTSA on a “preliminary evaluation” of the problem. According to another report, the recall (which will be filed “shortly”) involves 100k Priuses in the US market, with the remaining 176k in Japan.
While Toyota may or may not recall the Prius, Ford is not recalling its Fusion and Mercury Milan Hybrids for what appears to be a similar issue (poor transitions between regenerative and conventional brakes). Instead, Ford is instituting a “Customer Satisfaction Program” involving free software upgrades it says will fix the problem, which was first reported by Consumer Reports.
UPDATE: Ford responds with a press release after the jump.
UPDATE 2: While we sort some of these late-breaking developments out, here’s another spurious log for the fire: ABC News impugns “federal investigations were extremely limited in scope, after negotiations involving former safety investigators who had been recruited to work for Toyota’s Washington, D.C. office.”
UPDATE 3: Oy!
Ford only just announced Twitter integration for future vehicles at the Consumer Electronics Show last month, and it’s still not available on any Ford vehicles yet. Eventually though, Ford says that you’ll be able to receive and send tweets from your car using the hands-free SYNC system, a development that apparently has lawyers already counting the money they’ll make suing Ford’s pants off. The Law Offices of Barry Levinson already has a presser warning that:
Ford’s development of technology to facilitate driver computer use runs counter to the national trend, which sees authorities cracking down on distracted driving… Ford defends its Twitter technology, claiming to be making existing driver behaviors safer. But Ford’s assertion may not hold up to scrutiny. The 2006 driver distraction study found that talking and listening to conversation via cell phone was as likely to cause a crash as dialing a cell phone; if this seemingly apt analogy for the distinction between typing on a computer and talking into one holds up, it would undermine Ford’s justification for installing Twitter technology in cars.
Though this is clearly a bit of premature (press) release, it shows that Ford is wading into some dangerous water, and the sharks are circling. Besides, who the hell needs to tweet while driving?
Fiat’s Sergio Marchionne looked like a pretty shrewd operator when he was able to snag a bailed-out Chrysler from the US government without paying a penny. Between that and the booming European sales on the back of government-funded scrappage schemes, Fiat pretty much spent 2009 proving that automakers should cater to governments almost as much as consumers. But as 2009 wound down, Fiat’s government affairs winning streak came to a halt as the Italian government started asking for a little quid for its quo, and it’s been going downhill from there. Now that Fiat wants to shut down its Sicilian Termini Imerese plant, and right-size Italian production, the love affair is officially over. “We are examining the possibility of renewing [consumer incentives],” Italian Prime Minister Silvio Berlusconi told reporters from Automotive News [sub]. “But Fiat does not seem interested in them.”
Sergio Marchionne’s misguided obsession with the alleged brand equity of his recently-acquired Chrysler Group marques has deepened, as Chrysler, Dodge and Jeep launched new branded merchandise today [hilarious press release here]. The funniest part of the whole cross-branding effort is the very idea that significant portions of the population want their day-to-day goods slathered with Chrysler Group brand names. The second funniest? The products themselves. The Chrysler Collection features such “luxury gifts” as an $11.95 leather calculator, a $199.95 mahogany humidor, and a $21.95 mini umbrella, all tagged with Chrysler’s new Aston-alike logo and doubtless finished in the same fine materials as the Sebring’s interior. If Davos had a Wal-Mart, this is what they’d sell.
Agressive cost-cutting and improved sales yielded $1.68b in net profit for Toyota in the three months ending December 31, reports a press release in the WSJ. Sales revenue climbed 10 percent to $58.2b in the October-December quarter, boosting operating profit to about $2b. This quarter alone though, Toyota reckons the recall could cost the company $2b in repair costs and lost sales. For the fiscal year, ending on March 31, Toyota says the final impact should be limited to about $900m in losses on an operating basis, and has revised its fiscal year net profit projection to about $900m (compared to a $2.2b loss projected in November).
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