TTAC is the third most critical reviewers of automobiles, according to Motor Mouths, an ambitious project which seeks to aggregate and rate car reviews. With an average review score of 75.52, TTAC is the least forgiving non-print outlet that MM rates. Only Consumer Reports (70) and the Wall Street Journal (73.5) boast a more carmudgeonly average score of vehicles they review, with Automobile.com and the NY Times rounding out the top five. Of course, standardizing reviews is a tricky undertaking, making comparisons a bit of an apples-oranges exercise. Still, MM goes there, even comparing reviewers with owner feedback to create an index of “reviewer credibility.” Sadly, TTAC reviewers don’t rate in the top three “most credible,” but since MM has only been around to gather owner feedback since February, we’ll give it some time. Not that we’d necessarily expect to replace the LA Times’ Pulitzer Prize-winning Dan Neil at the top of that list.
A post at the former Tesla PR chief’s personal blog recounts the debate inside Tesla over where to manufacturer the firm’s WhiteStar sedan. Siry describes grappling with the tradeoffs between a reasonable price and skeptical public perceptions of Chinese cars. “The part causing the most conflict,” writes Siry, “was that it was clear in the world of consumer electronics and chip manufacturing that low cost manufacturing had been achieved while also maintaining the highest standards in quality. Why couldn’t this be the same case for automobiles?” After all, he argues, your iPhone is designed in California but built in China—and nobody confuses it with a purely Chinese product. Pointing to the Volt’s projected $40K price point for a Cruze-based compact/mid, Siry argues that cost is too important to phasing EVs into the market to be ignored. And that firms like his former employer will pay the price for not taking advantage of China’s opportunities.
Apologists for business-as-usual in the car game often took to blaming unnaturally high gas prices for last year’s trends towards smaller car sales and fewer vehicle miles traveled. When gas prices go back down, went the argument, Americans will go right back to buying thirsty SUVs and Crossovers and driving more miles. Not true, it seems. The New York Times reports that vehicle miles traveled (VMT) has declined for 14 months in a row now, despite the fact that gas prices are now hovering at about half of their peak levels from last June. “When the decline in American driving was first identified in late 2007, fuel prices were beginning to increase. The prevailing wisdom at the time was that the drop was due to increased fuel prices,” says Doug Hecox of the Federal Highway Administration which monitors traffic on America’s roads. The FHA estimates that VMT has declined by 115 billion miles in the period between November 2007 and December 2008.
The Freep reports that the newest UAW deal is similar to the recently-approved Ford deal in terms of economics, but is “drastically different” in other areas. How drastically? There are”no mandatory physical examinations in the UAW GM agreement,” according to the Freep’s union source. Also, “with regard to employee placement, other parts of the agreement are different to better fit the UAW GM culture.” Which doesn’t exactly sound encouraging. The Freep wanted to know more (don’t we all), but when asked, “A GM spokeswoman declined to comment. A UAW spokesman didn’t respond to questions.” Great. But it’s probably not worth losing sleep trying to discover the details (not that we wouldn’t love to have someone send us a copy). Locals won’t have the opportunity to approve the contract modifications until GM completes its debt restructuring anyway. Which has been dragging on for months now with no end in sight. If the locals even approve the deal which, based on Ford’s 58 percent approval showing, is hardly a foregone conclusion.
Do we want to place bets on how soon Chrysler will shift its sales strategy back towards fleet sales? Unfortunately for Americas struggling automakers, $565M in low-profit sales probably isn’t enough to make much of a difference to anyone’s bottom line. Especially considering that the expenditure is set to take place over the next ten years. On the other hand, AT&T is only replacing about 15,000 vehicles, meaning the average price per vehicle is budgeted at about $37K, which is pretty decent for fleet costs. So who will benefit? Ford, hybrids and natural gas, says Automotive News [sub]. The Telecom giant plans on buying about 8,000 compressed natural gas (CNG) vehicles from Ford, and will fill out its portfolio with hybrid and “other advanced technology power system” vehicles. Sorry, ChryCo!
Straightline tries its hand at funny with predictably lame results. They must have missed this. And this. And this. In fact, they must have missed the fact that sportscars are the only halfway viable EVs out there. Yeesh.
Or die trying given the late unpleasantness of all things economic. But the model that Euroda, a group of 4,000 Opel/Vauxhall dealers, is attempting is innovative enough to attract some attention. Under the arrangement, member dealers would donate €150 per vehicle sold over the next three years. Euroda would use the estimated €400m to buy a minority stake in Opel/Vauxhall, which cannot secure support from European governments without better long-term viability plans. Euroda seems to be acknowledging the symbolic nature of the effort, telling Automotive News [sub] that even taking a minority stake sends “a clear signal of support” to the government, worker and customer stakeholders.
That’s including the delivery charge, kids. And despite the fact that it’s priced only $2K and some change over a base Prius (which boasts a significantly better EPA rating) Honda is reporting 18K orders as of Monday, says the WSJ. Whether the Insight ever approaches the Prius’s 240+K sales remains to be seen. For the moment though, economy seems to make a stronger argument than environmentalism.
The thesis that name and form are inseparable, a truth endorsed by both the Theravedan Bhuddist text Visuddhi-Magga and Paul Niedermeyer, has found new support in the recently-released Polk Loyalty Study (PDF) (via PR Newswire). Studying brand repurchase and defection rates in Q1 2008, Polk and Co found that 55 percent of owners whose model was discontinued prior to re-entering the market defected to another brand. That compares to 47 percent defection for owners of non-discontinued models from the same brand. The elder Niedermeyer was particularly prescient in pointing out how this dynamic has hurt GM in particular, thanks to its pathological renaming of mid-sized and smaller offerings. This “same name dividend” is as high as 12.7 percent for compact cars according to the report, but fades to a “negligible impact” for large cars and pickups. The Cavalier to Cobalt transition in specific is said by the report to have cost GM “millions in potential sales.”
“I think the first duty of a leader is to keep his company in the black. To accept—and announce—at the beginning of the year that you will lose money is the worst sign of leadership you could give to your troops,” Fiat CEO Sergio Marchionne tells Automotive News Europe [sub]. “Car markets have gone from bad to horrible so far this year, but I will fight like hell to keep Fiat Group Automobiles profitable in 2009. Running an automaker these days is like driving in dense fog. You have just 100 meters of visibility so you must continuously adapt to what you suddenly face. Nevertheless, I refuse to accept even the idea that our auto operations will lose money.” Man, is he going to love working with Jim Press.
Ford gets props from anti-bailout folks for being the only Detroit automaker to not seek TARP bailout loans. But as several stories today indicate, Detroit’s putative last man standing is still seeking government sugar, if only in less direct ways than its hapless competitors. Automotive News [sub] reports that Ford is requesting the German government to extend its cash-for-clunker rebate, threatening temporary plant shutdowns if the handout sunsets at the pre-arranged 600K unit mark. “The bonus is smart, simple, and it works,” says Ford sales poobah Ingvar Sviggum. “Here is my appeal to the German government: The bonus is good for the auto industry, the country and for the consumer. So please stay with it. If the scrapping premium is not extended, there will be a dramatic decline in demand in the second half of the year as a result.” Just over 200K of the rebates have been claimed, leaving about 400K still to be claimed in the measure’s original run. But, y’ know, extend it anyway. Or else.
Germany’s Lidl chain of low-cost grocery stores has begun selling Opel Corsas and VW Polo Crosses online, reports The Age. In partnership with German distributor ATG-Automobile, Lidl is selling the subcompact commuters at about 25 percent below the suggested retail price (11K euros for the Corsa, 14K euros for the VW), offering Germans a new, low-cost way to cash in on Germany’s clunker-culling measure. Some argue that the online sales approach has been tried without success, as Germans prefer to do business with a dealership. “I think it will be very difficult for Lidl,” says Ferdinand Dudenhoeffer of Gelsenkirchen’s Center for Automotive Research. “People don’t want to buy high-value products from a discount grocery store.” Noting that Quelle, a German online marketplace, tried to sell cars online about five years ago, Dudenhoeffer says “it didn’t work, even though their site was visited fairly heavily.” As the automotive industry reinvents itself, however, OEMs will look to every possible sales outlet, transforming the dealer-only approach that has defined the business for years. Whether this approach pays off remains to be seen.
This time the bearer of good news is retired General Wesley Clark and his “Growth Energy” K-Street advocacy group. The special K says increasing the ethanol blend limit to E15 could create 136,101 new jobs and inject $24.4b into the US economy annually. How? According to the firm’s appalling report, bumping the federal blending mandate to E15 would double the “demand” for ethanol. As the report notes, in the mother of all Freudian slips “6 bgy of production capacity would be required to produce 20.4 bgy of ethanol (including current reserve capacity). This level of expansion could be met by the construction and operations of 60 100 bgy corn ethanol plants (emphasis added).” Of course they meant 60 100 mgy plants, but numbers have just become so darn confusing since billion became the new million.
There will be no more Easter Monday holiday for Ford’s UAW employees, as ABC reports that the Blue Oval’s unionized workers have approved proposed modifications to their labor contract. Voting was close (and divisive) though. According to the UAW, 59 percent of production workers and 58 percent of skilled-trades workers voted for the agreement. The concessions could give the UAW a 25 percent stake in Ford, as its VEBA benefits fund will receive $1.6B in (non-voting) Ford equity.
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