The US car market contracted by 23 percent between the 2006 and 2010 model-years according to WardsAuto data [via the Detroit News], but over the same period the total number of hatchbacks sold per year has increased some 63%, from 291,853 to 475,048. That’s right hatchback fans, after decades of underachievement in the US market, your favorite bodystyle is back in a big way.
Transportation Secretary and Supreme Allied Commander in the War On Distraction Ray LaHood is quite chuffed about initial pilot program results for his latest offensive against in-car cell phone use, and he’s taking to the airwaves to declare victory. The programs, modeled on the “Click It Or Ticket” and “Over The Limit, Under Arrest” initiatives combined an advertising blitz and waves of enforcement to crack down on the behavior, but more importantly to send the message that distracted driving is as serious a problem as drunk driving or not wearing a seatbelt. Thanks to the relative success of these earlier programs, the DOT has a strong template for its pilot anti-distracted driving campaign, the enforcement components of which took place in April, July, and October 2010 and March-April 2011. But was the “Phone In One Hand, Ticket In The Other” program actually as successful as LaHood claims?
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When a brand like Aston-Martin releases a new car, it’s de rigeur to assemble some cameras and hand out a freebie to a legend of the motoring world. But when a brand like Aston-Martin creates a deeply controversial car like the Toyota iQ-based Cygnet, the luminaries of road and track are hardly going to be lining up for the thing. Luckily if you ask nicely enough, they might be convinced, as apparently Sir Stirling Moss was, to re-gift the thing to the wife. That way he doesn’t have to endure the embarrassment of driving the thing, but Aston still gets to hype the fact that the Sir Stirling said
Since seeing a pre-production Cygnet in January I knew that it was the perfect car for Susie; a proper little piece of British luxury and perfect for our life in town.
Unfortunately, as Pistonheads points out, the Cygnet isn’t even exempt from London’s congestion charge… which is typically an important criteria for a car to be “perfect” for life in London town. Oh, and it’s about as British as yakisoba. But hey, Sir Stirling “bought” one for his wife so…. um… yeah.
After a brief commercial, the video above shows you… a brief commercial.
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Earlier today Bertel noted that the UAW’s goal of organizing “at least one” transplant automaker could be motivated by a desire to earn “brownie points” from the Detroit automakers. But the question that has remained unanswered ever since the union announced its transplant campaign is “which automaker will let the UAW into its plant?” Now that question may have its answer, as Automotive News [sub] reports:
Volkswagen AG and the UAW have intensified discussions about organizing workers at a new plant in Tennessee, German newspaper Handelsblatt reported in a preview of an article that will run Tuesday.
The newspaper, citing Volkswagen officials, said the union and automaker have held meetings and a workshop over the matter in the past few weeks.
VW insists that talks are still preliminary, and that no organizing campaign has yet begun. But, say the UAW, VW’s long tradition of worker unions “more willing to talk to unions about representation.” Ultimately VW says the decision to organize “belongs to our workers alone,” which implies a lot more openness to organization than Honda, for example, has indicated. But Southern workers seem to be largely ambivalent towards the UAW, so just because VW could let organizers into the plant doesn’t mean workers will necessarily vote for union representation. Meanwhile, there’s no word on how a possible UAW organizing campaign could affect a possible new VW/Audi assembly and engine plant that is being considered for the US according to AN [sub]. With Audi execs insisting on the need for more US production capacity, a UAW win in a Volkswagen vote could have serious implications for the firm’s future expansion.
When the White House opened negotiations over the next round of CAFE regulations for 2017-2025, I reckoned the automakers and regulators were “working in nearly unprecedented harmony.” Well, not so much any more. The WSJ [sub] reports that, although work on “the big number” is proceeding well, in the words of IHS Automotive’s Michael Robinet
This becomes a lot more politically divisive as they become much more specific in terms of the footprint of the vehicle.
In short, the original sin of CAFE, the two-tier system that drove SUV “light truck” sales and saw the creation of “trucks” like the PT Cruiser and HHR, has returned to haunt the latest round of negotiations. And, according to the WSJ, Japanese and Korean manufacturers are complaining that the new rules will motivate consumers to buy less-efficient offerings, and in turn give the Detroit manufacturers an unfair advantage. The kumbayas are over, and the gloves are off… but just how unfair are the newly-proposed rules?
GM still won’t comment on the matter, but a recent rumor that the Cruze’s two-liter diesel engine will be federalized for the 2013 model-year has been confirmed to the AP [via the DetN] by “two people briefed on GM product plans.” That motor, designed by VM Motori and built since 2006 by GM-Daewoo, was recently updated to Euro 6 standards, and according to the Holden website, the Australian-spec version makes 160 HP (at 3,800 RPM) and 236 lb-ft (at 1,750 RPM), while returning 42 MPG (combined with manual transmission) or 35 MPG (combined, automatic). Of course those aren’t EPA numbers, and they could easily change by the time the engine is certified for US emissions standards.
[Editor’s note: The video above depicts a Penske-era Smart ad. The new Mercedes-led marketing effort begins this fall]
Having taken over sales and distribution of the Smart brand from Penske and canceled a planned Nissan Micra rebadge, Mercedes is trying to inject some life into its flagging city car brand (Sales are down 24% YTD, at 2,556 units) with a new marketing campaign (coming this fall) and finance offers. Smart’s new General Manager Tracey Matura explains the problem to Automotive News [sub], saying
People are not avoiding the brand or the product, but there is a great majority of people who are not aware of the brand
Really? People don’t know or notice a brand that’s in its fourth year of US sales, offering a car that’s unlike any other on the market? It seems to me that the problem isn’t awareness, as the term “Smart Car” is almost universally synonymous with “hilariously tiny car,” even among non-expert consumers. The problem seems more precisely to be that Smart is neither as cheap nor as efficient as larger rivals, and American consumers are constitutionally resistant to the idea of paying more for less (a point that VW seems to be proving in spades). More promising: $179/month lease and finance deals backed by Mercedes-Benz Financial Services, not to mention the decision to ditch the snottier-than-thou Penske campaign embedded above. But even new ads and good deals aren’t likely to make Smart a truly viable brand in the US until new product arrives in 2014, hopefully in a more efficient, enjoyable-to-drive form. Or unless gas prices spike again, causing a 2008-style rush for conspicuously downsized vehicles.
With a new generation of BMW 3-Series on the way, you expect to see plenty of photos of it testing on the Nürburgring’s Nordschleife. What you don’t expect to see: photos of it being towed through the “Green Hell.” According to Auto Motor und Sport, this prototype’s breakdown on the ‘ring is “unusual at this stage of development,” but the German publication notes that the defect that caused it is unknown. They simply write that, in the midst of a test drive, the next-gen Dreier “ran out of breath.” Hopefully the boys at BMW will be able to suss out the problem before the new Dreier launches in Europe next year… nobody likes to see a car like the 3-Series making its way through the Nürburgring on a trailer.
Ford hasn’t built a Mercury in six months and 98 percent of its erstwhile dealers have signed termination agreements with the parent company, but the remaining 31 dealership owners are digging in their heels for a fight. Automotive News [sub] reports that these Mercury dealers recently spent huge amounts building or renovating their Lincoln/Mercury stores, and that Ford’s termination offers are embarrassingly tiny in comparison.
For example, the owner of Francis Scott Key L-M Inc. in Frederick, Md. claims to have spent $5.5m on a dealership expansion which was completed in 2007, but only received a termination offer of $181,026 from Ford. Liberty Lincoln-Mercury in Clifton, N.J spent $7.7m upgrading its facilities in 2004, only to receive a $733,575 termination offer from Ford. So far, AN counts four dealers who are suing Ford in federal court, and an undisclosed number have filed complaints with their state DMV. Ford, meanwhile, is trying to engage the holdouts in mediation, and though some have settled others are reporting bad experiences. Meanwhile, there’s another problem that underlines the the entire dispute: can a standalone Lincoln dealership even survive?
[Editor’s note: the initial draft of this piece misunderstood the structure of the deal. Youngman and PangDa have paid over $350m for a 51% of Swedish Automobile, Saab’s parent company (which has a market cap of $68m). Funding for the New Product Joint Venture (50% owned by Youngman, 50% owned by Swedish Automobile) has not been disclosed. See comments for more background.]
Just when the lights seem to be going out all around Saab, with employees calling for bankruptcy, suppliers in revolt and even the Swedish government pretending like nothing was happening, Saab always seems to find away to prolong the agony. Selling, then leasing back the factory was one step that’s been approved by the EIB. Getting the suppliers to take ten percent down on deliveries? Well, it turns out that management has some time to sort that one out, as the factory’s annual vacation starts in a week, and Saab is letting its employees go a week early rather than starting up and then shutting down the line. And the company is certainly hoping that it won’t have to restart the line simply to restore confidence, as it’s announcing the “final agreement” with China’s Youngman Auto and the dealer group PangDa for €245m (about $365m) which it hopes will clear up the perception that Saab is a sneeze away from death. Needless to say, this agreement fits squarely into the “stringing along” category rather than the “game changing” category…
In the battle for market share, Detroit is making something of a comeback. After decades of decline, the unprecedented taxpayer investment in Detroit seems to be yielding dividends in the form of solidifying signs of recovery. Of course, these firms still have a long ways to go before they’re done reversing their long declines, and the turnaround has doubtless been fueled by temporary phenomena like the Toyota recall and the Japanese tsunami. Still, these are some of the first big-picture signs of a serious change in fortunes for Detroit, and deserve the attention of market watchers (graphs can be found in the gallery after the jump, along with a graph of June and Y-T-D market share).
With every holiday, I marvel at the passage of time, and at the twists and turns my path has taken here at TTAC. In reflecting on the recent past, I can’t help but feel an immense gratitude to the inscrutable workings of fate which have conspired to keep me eagerly engaged in this site’s unending quest for automotive truth. And on this, the holiday of American independence, gratitude seems to me a highly appropriate theme. One of the deeply-removed gears of destiny that has created the opportunity that is TTAC is surely this nation’s fundamental belief in public discourse and a free press, the constitutionally and culturally enshrined belief that the open exchange of ideas can make life, and its most necessary evil, government, at least a little bit better. Even those who disagree on a fundamental level with the opinions that TTAC espouses must concede not only that we have the right to our opinions, but also that our criticisms ultimately give strength to their objects. Our founding fathers did not protect speech out of mere principle, but because they knew that free discussion is the dialectic of progress. Through what they saw as the divine power of reason, we could form more complete ideas about the world and be better equipped to take on the challenges of liberty, self-government and the free market.
Today I am not just grateful that our founding fathers created a culture which allows me to live in the world of ideas, and in pursuit of truth. I am not just grateful for legal protections of my free speech. I am not just grateful that I can serve consumers and industry alike by shining the light of discourse on the dark places of poor logic, market malfunction, and willful ignorance. Today I am most grateful that my fellow Americans continue to value their free speech enough to patronize sites like TTAC, where they may find ideas and opinions that challenge their view of the world, where these ideas are more important than advertising revenue, and where perspectives from around our shrinking globe can be compared and contrasted in an atmosphere of respect and rigor. In an era when the value of ideas and discourse seems to be losing ground to slickly-packaged distraction and ideological rigidity, it gives me faith that so many still crave the thrilling uncertainty of a tough debate, and a deep-seeded hunger for a better understanding of the world (if “only” the world of cars).
As we celebrate American independence today, I am grateful not only for this nation’s providential founding on the enduring principles of Life, Liberty and the Pursuit of Happiness (which I would define as being generally synonymous with the Pursuit of Understanding), but the fact that those values have endured in you, our ever-demanding, every hungry-for-knowledge readers. Let us endeavor, together, to live up to the lofty ideals the American spirit as we unflinchingly pursue the truth about cars.
While I was celebrating my independence from TTAC on a camping road trip through the wilds of Eastern Oregon this weekend, it seems that quite a little debate was stirred up by Bertel’s publication of the top 10 best-selling American-market cars in June. In hopes that more information will lead to a stronger debate, I’m dedicating a good chunk of my Independence Day to an overview of the American car market in the first half of this year, starting with this chart of the top 25 Year-To-Date performers. I’ve omitted year-ago numbers in the interests of chart cleanliness, but a snapshot of last Summer’s sales studs can be found here. The contrasts are… well, I’ll let you fill in that blank. With the exception of incentive and fleet sales mitigation, the numbers speak for themselves…
The transition from exclusively gasoline-powered vehicles to the new panoply of permutations of gas and electric power has not been easy on the old emm-pee-gee. The imperfect-yet-universal (in the US market) measure of efficiency finds itself at a loss to compare an electric car’s efficiency with that of a gas-powered car, and completely falls apart as a relative measure of efficiency between plug-in-hybrids which use gas and electricity in different ways (see the ongoing battles over the Chevy Volt’s efficiency). Into the breach have stepped several challengers to the emm-pee-gee’s supremacy, including the weak MPGe (which was responsible for the Volt’s disastrous “230 MPG” introduction), and the “Kilowatt-hours per 100 miles” measure championed by Motor Trend in a rare display of admirable pointy-headedness. But the Gordian contradiction of efficiency measures is that they must be both accurate and easy-to-understand… and if the MPG’s history tells us anything, it should probably err on the side of the latter prerogative.
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