It’s just a mess, an absolute mess. There is a billion dollars of dealerships’ money on the road.
Says Duke Brubaker, general sales manager of Champion Ford-Lincoln-Mercury-Mazda in Owensboro, KY, to Automotive News [sub]. Champion has ceased clunker participation, along with 89 other dealerships surveyed in AN’s survey of 710 dealers. NADA officials allege that CARS’ rejection rates have climbed as high as 80 percent in recent weeks. NHTSA claims they have fallen in the last ten days. How’s about another $3 billion?
As much as Californians would like to see jobs at NUMMI saved by their homegrown automaker Tesla, the deal isn’t going to happen. For fairly obvious reasons. “We need about 500,000 square feet for our plant,” Tesla’s Rachel Konrad tells Automotive News [sub]. “NUMMI is 5 million.” Thanks to Your Shitty Economy, the EV automaker has plenty of plants to choose from. “The auto industry isn’t the only segment of the California economy that has been struggling,” says Konrad. “We have a lot of mothballed plants to choose from. There are some aerospace and chip factories around here that have closed.” Tesla has just announced that it will build powertrains for its Model S sedan at the Stanford Research Park in Palo Alto, CA. Model S production is likely to take place somewhere in Southern California.
Kia’s latest Peter Schreyer-designed mini-MPV is being shown in production form at the Frankfurt Auto Show. Unfortunately named the Kia Venga, this five seater is like a more practical Kia Soul. Only instead of getting funky styling you get standard stop-start technology. This car will almost certainly build more momentum for Kia in Europe, where scrappage mania has made Kia one of the fastest-growing brands. And this model was designed and engineered exclusively for Europe. In short, Kia is doing in Europe what VW wants to do in the US. And unlike VW, the image-shifting products are already arriving. Look out.
Charities have been some of the loudest opponents of the Government CARS stimulus, voicing fears that it would cause car donations to plummet. “It varies by market, but there’s been an 11 to 12 percent drop compared with last year,” Volunteers of America VP (vehicle donations) Jim Hartman tells Reuters. “We started seeing it right away in July.” VOA and The Military Order of the Purple Heart each typically receive 40,000 to 50,000 vehicle donations a year. Purple Heart estimates its C4C losses at $105 million over 24 months. Hartman tells Reuters that a bill is pending in congress to increase vehicle donation tax credit caps to $2,500 from the current $500 limit.
Ahem . . .Automotive News [sub] reports that VW is seeking a new ad agency, after four years with Crispin Porter & Bogusky. “Our goal of rapidly increasing our volume in a mature market requires the Volkswagen brand to evolve into a more relevant mainstream choice,” explains VW VP Marketing Tim Ellis.
The Volkswagen brand needs to inspire our base of enthusiasts as well as reach out and captivate those in mainstream America. Therefore, we are re-evaluating all areas of our business and after careful considerations have decided to take the necessary steps to ensure we have the right agency partner in place.
After all, VW is kind enough to dumb down its product line (cough) for America’s benighted mainstream. The problem must be the ads!
From the “how had that not happened yet” file [via AutoTelegraaf] comes word that Cadillac has finally euthanized its latter-day Cimarron, the Europe-only BLS. The Saab 9-3/Opel Vectra brand engineering victim sold just 7,365 units since its 2005 introduction. Was it worth it? “Think of the profit,” was the watchword for BLS backers. “Think of the brand,” is the obvious retort. Especially because Cadillac’s only real appeal in Europe is a variety of willful iconoclasm akin to . . . driving a Saab in the United States. And look what happened with GM’s similar effort there.
News is flashing across The Swedish Wire that GM and Koenigsegg have reached a final agreement on the future of the Saab brand. A share transfer agreement has been signed for an undisclosed sum and equally undisclosed technology and service understandings. Koenigsegg and its consortium partners are still waiting on $593 million worth of financing from the European Investment Bank. More details as they become available.
The Chevy Impala already gets dumped on for being a fleet queen holdover, but a Kansas City Star investigation reveals that it might not actually be fleety enough for buyers like Enterprise Rent-A-Car. It turns out that Enterprise ordered 66,000 Impalas from GM without the side airbags that are standard equipment on all retail Impalas. Worse still, hundreds of these Impalas were sold with the side bags listed as standard equipment. Enterprise saved $175 on each Impala by deleting the bags, for a total of about $11.5 million in savings. Thanks to the misleading online sales though, Enterprise is offering to buy back the nearly 750 Impalas sold under false pretenses for $750 over Kelly Blue Book Value. Beyond that effort though, Enterprise is defending its standard safety feature deletion by arguing that it never violated any federal mandate. Congratulations, guys, you aren’t criminals. Meanwhile, when it comes to buying fleet vehicles, buyer beware.
Volkswagen of America boss man Stefan Jacoby speaks with the Detroit News about VW’s US strategy going forward while admitting a few missteps. Jacoby acknowledges, for example, that the Passat “is too small, and it is almost knocking at the doors of the premium segment. That’s not where the volume is. What we need to do is improve our competitiveness in pricing.” And how does that admission jive with VW’s plan to bring the Phaeton back to the US? Keine ahnung. The DetN never asked.
After a week-long hiatus, the TTAC daily podcast returns to action. We’re still waiting on a shiny new microphone for Mr. Farago to complete our audio makeover, but please let us know if we’re making progress on the audio-level issues that we’ve been hearing about. Meanwhile, enjoy.
Originally published by Brandt Rosenbusch, Curator to the Walter P. Chrysler Museum and Historical Collection Coordinator for Chrysler Group LLC, at Chrysler’s Corporate blog.
In my role as Archivist for Chrysler Group LLC, I can appreciate in-depth research followed by thoughtful conclusions, even when the opinions differ from my own.
The Freep reports that Chrysler bankruptcy judge Arthur Gonzalez has given creditors permission to sue Daimler for diverting $9 billion from the automaker two years ago. Gonzalez only put one restriction on the suit: creditors may not use government funds for the effort. According to the Freep report, the suit is being brought by “AutoNation Inc., the nation’s largest auto retailer; DARCARS Imports Inc., a Maryland-based dealer group, the UAW and two people with personal injury cases pending against Chrysler.” What we still don’t understand is exactly which “important assets” Daimler allegedly stripped, and how they were worth $9 billion. The allegations have apparently been redacted to the point that they are not identifiable, and Daimler asserts the claims are “without merit.” Since Daimler is already out over $37 billion on its Chrysler misadventure, it could be hard to prove that Daimler benefited from any aspect of the transaction.
The price of any exclusive story is a straight face. Having scored some seat-time (and flack-time) with GM’s Corvette Stingray Concept, Jalopnik was obliged to report the experience sans critical filter. Which means we learn that the Stingray “represents a merger of GM design and technology from the past, present and future,” as well as “the merger of high technology with high design in the powertrain, exterior and interior.” Of course, in order to keep that all-important straight face, nearly everything about the concept has to be described using either the term “represents” or “theoretical.”
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