California, the perennial thorn in the side of the EPA’s emissions-regulation scheme, has bowed to federal pressure and will wait until September of this year to release its 2017-2025 Model Year emissions standard proposal, by which time the EPA will be ready to announce its own national scheme. Prior to today’s announcement, California’s Air Resources Board (CARB) had “announced its intention” to release its proposal in March, a move which had automakers scrambling to complain to congress of the apparent lack of unity on emissions standards. GM and Chrysler even endured a (somewhat predictable) Naderite drubbing in the WaPo in order to to join the howls against the emerging “patchwork of state and national standards!”

Luckily for the automakers, CARB was willing to play ball. Per the WSJ:

Stanley Young, a spokesman for the California Air Resources Board, said the state agreed to the White House’s timetable after being assured the new fuel-economy targets would be based on studies currently being done on the feasibility of the proposed 62-mpg [by 2025] standard.

The studies are examining the technological and financial ramifications of the proposed standard, he said.

“We’re looking forward to seeing the results of the final data from the engineering studies,” Mr. Young said. He added that the board has always cooperated with the EPA and DOT and plans to continue to do so.

Then why stir up the pot by telling the world that you’ll create a de facto standard while the EPA is still looking at the engineering studies? If CARB was looking for ways to add to its resume of ill-advised overreaches, it succeeded admirably. If, on the other hand, it wanted to be seen as the lead partner in a national standard, it would have agreed to a joint announcement in the first place. Regardless of where the standards are set, surely even CARB understands that a truly national standard is the single most important achievement to be won in this process. Oh, and “making sure all the evidence was duly reviewed before ruling” should probably be the second most important.

One of the more dangerous conflicts embedded in the US auto bailout that was identified in the recent Congressional Oversight Panel report has been a TTAC hobbyhorse for some time, namely the tradeoff between GM’s success and that of its former captive finance arm GMAC (now known as Ally Financial). As we wrote back in May,

if government-owned Ally isn’t interested in underwriting GM’s volume gains with risky loans but also isn’t interested in seeing its auto lending business bought by GM, there’s trouble brewing. After all, that would leave GM with only two options: partnering with another bank, or starting a new captive lender. Either way, a new GM captive lender would likely force Ally into offering more subprime business anyway, or face losing its huge percentage of GM business.

Fast forward the better part of a year, and GM has indeed bought its own in-house subprime lender, leaving the COP to term The General’s lack of interest in taking care of “the Ally Tradeoff” as “disconcerting.” After all, with over 20 percent of GM’s equity and over 70 percent of Ally’s stick, the Government should have been able to work out some kind of deal that gets GM and Ally back on the same page… right? Not so fast, reports the WSJ. Ally turned down a $5b GM offer for its wholesale lending business earlier this year, and now it seems another deal may be in the works. But it has nothing to do with maximizing taxpayer payback, and everything to do with shoring up GM’s floorplanning credit. And it’s not coming from the government, but from GM’s newly-ubiquitous CEO Dan Akerson.

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If the British empire was built on cups of tea, the rise of the Korean automakers might just as well be chalked up to the restorative properties of spicy breakfast foods. There’s nothing like facing the day with sizzling tastebuds and clear sinuses to give a third-tier auto manufacturing nation the perspective needed to steal a march on its Japanese, European and American rivals. Possibly in deference to the healing powers of breakfast kimchi, Kia has named its newest city car the Morning for the Korean market and the Picanto everywhere else… and it’s sure to spice up Kia’s European sales, further extending Hyundai-Kia’s lead as the top Asian brand on the Old Continent.

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Production of Chevrolet’s Volt was supposed to be limited to 10k units this year, a target GM has already set its sights on surpassing. With 2012 volume projections now reaching 25k units, the next step in The General’s quest to prove that the Volt is a viable vehicle is a staggering goal: doubling its 2013 production target from 60k  to 120k units of production. According to Bloomberg, GM has not officially announced the 120k volume goal and may not build that many Volts in 2013 at all, if energy prices and supplier challenges don’t allow it. And though supplier issues could well leave the goal out of reach, even if GM is able to ramp up production to fulfill its 120k unit goal by next year, there are no signs yet that the market will support those production levels. After all, GM is essentially banking on the kind of volume-to-price niche that BMW has taken years to cultivate with its 3 Series… which starts at prices slightly below the Volt’s $41k, and still moved fewer than 110k units last year.

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Ignore the commas in the X-axis labeling, and you’ll see that this graph compares total sales volume for last year against each model’s year-of-introduction as we hunt for the missing links between product cadence and sales performance. Above, you can see that none of the major D-Segment competitors was introduced before 2007, and that newness alone is not linked to sales volume. In fact, in the D-Segment, volume seems to decrease with newness (although historical data indicates that this is a brand-loyalty issue rather than a consumer preference for older vehicles). Moreover, it appears that more recent introductions are merely narrowing the competitive gaps in the midsized sedan segment (although we’ll need new Accord and Camry replacements to tell if that trend is for real).

The compact segment, on the other hand, shows a far less surprising correlation between year-of-introduction and sales, as sales grow in a fairly consistent manner as you move across the x axis from older to newer nameplates. The major lesson from these graphs: Honda and Toyota continue to enjoy a “reverse perception gap” in which their aging models tend to most dramatically defy volume expectations relative to the age of the competition. But with more competition coming this year, as Chevy’s Cruze, Hyundai’s Elantra and Ford’s Focus come into the market, the consumer’s tendency to give Honda and Toyota “the benefit of the doubt”  could well be tested. And once perceptions start shifting, there’s no telling where they might end up.

The Department of Energy’s $25b Advanced Technology Vehicle Manufacturing Loan program was very nearly used as a slush fund to keep GM and Chrysler afloat during the dangerous days leading up to the federal auto bailout. Though President Bush’s decision to use TARP to rescue America’s failing automakers took away the need to tap the so-called “retooling loan” program to fund America’s auto bailout, that decision also contributed to a long delay in the allocation of the ATVM loans. Because the loans require applicants prove “financial viability,” GM and Chrysler’s requests (which account for $17.4b out of the remaining pool of $16.7b in non-allocated loans) have been on hold, and with them, every other automaker still seeking approval for its requests. And now, with no word from the DOE on the loan program since last April, congress is agitating for the DOE to make with the loans already. Senator Diane Feinstein captures the frustration in a letter published by the Detroit News

“On multiple occasions, the department has missed internal deadlines for initial decisions, term negotiations, final decisions and loan closure,” she wrote, saying the department failed to give applicants “a clear timeline.”

But did the DOE miss deadlines and string automakers along out of negligence, or because it had to wait in order to fulfill the loan program’s mission, namely supporting the bailed-out automakers?

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If you are the proud owner of a Porsche 997, which can slurp as much as 1.6 quarts of oil every 622 miles, you may be asking yourself “what do you mean am I ready?” But Porsche isn’t talking about upping the tolerated oil consumption numbers for its gas-powered flat-six engine… it’s considering adding a diesel engine to its US lineup, starting with an oil-burning version of its Panamera sports sedan and Cayenne SUV. With diesel versions of both of its two largest vehicles planned to debut at the Geneva Auto Show, Porsche’s Bernhard Maier tells Automotive News Europe [sub] that

We are discussing internally if we should introduce the Cayenne diesel in the U.S. this year. Also a Panamera diesel is an option.

Porsche has offered a 240 HP diesel version of its Cayenne in Europe since 2009, which gets over 30 MPG combined on the European test-cycle (non-EPA). And with 63 percent of Porsche’s sales last year coming from either the Cayenne or the Panamera last year, the firm is looking to those two nameplates for volume growth until its new products (like the next-gen 911 and a forthcoming “baby boxster”) hit dealerships. Offering diesels in the US may not create a huge surge in demand for Porsche’s most popular products, but it won’t hurt efforts to broaden their appeal.

With a number of shocking nameplate-engineering jobs on deck (who’s ready for a Chrysler 200-based Lancia Flavia?), Fiat’s easing into things with one of the more innocuous moves on the to-do list: rebadging Dodges Journey as a Fiat. In Europe, the Freemont will slip into obscurity between Fiat’s Qubo and Doblò, much as the real Fremont struggles to serve as more than a unnecessary and unwanted distraction between Oakland and San Jose. And even though European buyers don’t buy many midsized crossovers, and don’t come to Fiat when they do, the Journey has been reworked to live up to the refined tastes of the European soccer mom. From retuned steering and suspension, to diesel engines, a new instrument panel and more soft-touch materials, The Freemont is a Dodge Journey for people who aren’t willing to buy shockingly poor-quality vehicles on the strength of inane advertising alone. And since they’re not calling it the Multipla, there’s no tip-toeing around comparisons to storied predecessors. But the fact that Fiat isn’t used to selling vehicles like the Journey is already showing up in its marketing literature, which enigmatically refers to the Freemont as a

“factotum vehicle” which has been “designed to meet the diverse needs of families and those seeking a spacious, comfortable and versatile vehicle to cater for the frenetic pace of everyday life or weekend leisure time”

The EPA has followed up its ruling allowing E15 ethanol blends (15% ethanol, 85% gasoline) to be pumped to vehicles built for the 2007 model-year and later, now allowing the corn juice-enhanced gasoline to be distributed to any vehicle built after 2001. EPA Administrator Lisa Jackson announced the decision to Bloomberg arguing

Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps

But, as is the case with most ethanol-related decisions, this has more to do with politics than science. After nearly ending the boondoggle known as the “Blender’s Credit,” which pays blenders for every gallon of ethanol they mix into America’s fuel supply, congress relented to lobbyist pressure and extended the $6b per year giveaway for another year. And with that financial incentive in place (along with a “renewable fuel mandate”) but little to no consumer demand to support it, blenders need to find ways to slip ever more ethanol into American gasoline. But, as a recent study proves, even E15 won’t beat the so-called “blend wall”: at best E15 gives the ethanol industry four years of taxpayer-fattened profits before it will be forced to come back and ask the government to yet again increase the amount of ethanol allowed in the gas supply.

Meanwhile, the auto industry that once saw ethanol as a prime opportunity for low-cost greenwashing has made an about-face and is suing to stop the spread of E15, arguing that its effects on engine life haven’t been adequately studied. And because ethanol offers little to no benefits relative to gasoline in terms of environmental or efficiency impacts, the fact that the EPA may be endangering automobile engines in order to keep an oversubsidized industry on (expensive) life support is beyond galling. It’s clear that, with the legislative and executive branches of government held in sway by ethanol-friendly farm states, motorists are now dependent on the court system to do the right thing and end government’s senseless love affair with ethanol.

Though not technically a new debut at this year’s Detroit Auto Show, the “Prius C” concept was probably the most interesting vehicle Toyota showed at Cobo Hall this year. If nothing else, it certainly shows the promise of an expanded Prius brand far better than the “Prius V.” And if there’s a single market where this “baby Prius” can give Toyota’s eco-brand spin-off a boost it would be Europe, where small, efficient cars rule. But, it seems, this is not to be. Autocar reports

The strength of the Japanese yen seems almost certain to keep a production version of Toyota’s near-80mpg hybrid supermini based on the Prius C Concept hatch out of Europe. (Read More…)

Looking at this picture of Ferrari’s newest GT model, I can’t fight the smile that it brings to my face. Only yesterday, I asked TTAC’s Best And Brightest to square the eternal tension between the enthusiast’s love for unusual, communicative, original cars and the bland, practical vehicles that allow the industry to even consider the needs of those few of us who truly enjoy our cars. And while TTAC’s readers discussed the tortured relationships between enthusiasts and the industry they simultaneously love and hate, I spent some much-needed alone time in a car that could no more be described as boring than it could be described as a sales success (BMW sold nearly ten times the total production run of Z3 Coupes in each year of Z3 Roadster sales). And which has a remarkably similar profile to this new Ferrari FF.

Leave it to the Maranello madmen to popularize (and doubtless make tons of money off of) a look that previously separated the fans of unique quirk from even the sportscar mass market. No other automaker does as fine a job of turning the bizarre desires of the enthusiast community into a profitable business. Unlike BMW, Ferrari won’t need to sell ten twee soft-top versions of the FF to subsidize each sale of this handsome shooting brake… from its lofty peak atop the enthusiast-car competition, Ferrari can not only set the market’s tastes, it can make money doing it. But then, Ferrari has no more “freed millions from the tyranny of immobility” than I have… so perhaps this sudden embrace of a noble yet-neglected automotive form isn’t as significant as circumstances make it seem in my eyes.

[Hit the jump for actual information about the Ferrari FF]

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By the time you read this, I won’t be at my computer any more. I’ll be nestled in the firm leather seats of a sportscar, blasting along the banks of the mighty Columbia in search of an empty road that winds up the walls of the yawning Columbia Gorge. I’ll be enthroned in the dark, yet airy cockpit of something so rare, kids in the backseat of every car I pass will get whiplash trying to catch a glimpse of the silver streak slashing its way towards the emptiness of Central Oregon. My telephone will be off, but I will be in deep communication with four wheels, four points of short-travel suspension, and the melodic rasp of six cylinders. I’ll keep the corner of one eye on the few important gauges that line my cockpit cocoon, watching as the needle on the engine oil temperature dial climbs to the point where my car’s engine shakes off the seasonal chill and sings the sadness of the world away. But, more importantly, I will be feeling that engine shake off the cobwebs of underuse, feeling its confidence build, feeling my consciousness fuse with the collection of metal and plastic that shelters me, womb-like, from the mundanity of everyday life.

By the time you read this, my car and I will be jinba ittai, or “person and horse as one.” We will be united, joined in our mutual lack of purpose. We will be headed nowhere in particular, and loving every minute of it. This is why I spent my savings on this odd-looking, impractical piece of engineering: my car is an escape vehicle from the abstract analysis and information overload that is my day-to-day existence. It connects me to one of the most important aspects of the automobile: its ability to connect with individual human beings. The ability to form, over the course of one glance or one corner, the kind of deeply intimate relationship we so struggle to form with our fellow men.

But as I’m downshifting into a corner, as I’m applying the gas and feeling the car beneath me wrestle with the invisible forces of gravity and inertia, something will be bothering me. Something will be breaking the spell cast by this marvelous machine and a challenging piece of road. I will be thinking about all the people leaving their places of work, hopping into their cars and joining the joyless grind on the interstate that will eventually carry them home. I will be thinking about the fact that there are so many more of these people, in their individual metal pods stuck to the conveyor belt of life’s daily commute, that the industry I cover must ignore my spiritual communion. The hermit in his used M Coupe does nothing to keep the lights on in the sprawling factories that, in turn, keep us supplied with the numb, emotionless appliances that are the lifeblood of the industry and modern American life. My disdain for the highly-engineered tedium of new D-Segment sedans never hired a single full-time worker, or reliably gave millions of people freedom from the tyranny of immobility.

Do consumers prefer boring cars? Has the industry forced them to choose the anodyne over the unreliable? Or are boring cars the inevitable result of modern development patterns and industrial logic? I don’t know. Right now, I don’t even care.Right now, I’m pushing just a little bit harder into the next corner, catching my breath as the beauty of nature falls away before me into a Cathedral carved by centuries of erosion. Catching my breath as molecules of rubber gasify, and my car and I thrill at the new high that our relationship has reached. You, on the other hand, might just have time to help solve this essential dilemma before you hop into your car and drive home.

One of the questions that came up in yesterday’s post, The Truth About The Ten Best-Selling Sedans Of 2010, was how to interpret a high percentage of fleet sales. After all, “fleet sales” could describe a huge variety of sales to diverse buyers at widely varying price (and profit) points. Rental fleet sales are widely seen as being far worse than other types of sales, which is why the resale value trackers at Automotive Lease Guide keep such a close eye on what they call “Rental Fleet Penetration.” In its latest newsletter, ALG notes

ALG tracks several key metrics that impact residual values and brand health. Of these metrics, rental fleet penetration (RFP), which ALG measures as the total number of vehicles sold into rental fleet channels divided by total sales, has been found to have an impact on both residual performance and perception of quality… As a general rule, ALG recommends RFP levels below 10% for Mainstream brands and <5% for Luxury brands to avoid any negative impact from rental fleet sales on residual performance.

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For a company that’s crowing about its sales growth and profitability, General Motors has been doing the kind of executive shuffling we became accustomed to seeing in the bad old days before the bailout. Already this week, freshly-minted Global Marketing boss Joel Ewanick put his former Hyundai colleague Chris Perry in charge of Chevy’s US marketing, and transferred Buick marketing duties from John Schwegman to former Volt marketer Tony DiSalle. The head of Onstar, Chris Preuss, has also stepped down this week, leaving former Sprint Nextel and Verizon executive Linda Marshall in charge. And today came the big one: 49 Year-Old Mary Barra has replaced Tom Stephens at the top of GM’s new-product development team as Stephens ascends to the new position of Chief Technology Officer.

These changes come straight from the top, as CEO Dan Akerson created the chief global marketing officer and chief global technology officer positions, requiring other executives like Barra and Perry to move up in the company. But will “global” czars actually catch GM up on new product development, one of its major deficits vis-a-vis the competition? More importantly, will Barra simply become the latest GM lifer to bump up against the Peter Principle? The fact that she’s leaving Human Resources to take on The General’s most important task certainly has the scent of Old GM’s corporate politics on it…
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You know… that’s not a horrid-looking little interior right there. What does an adorable little “yacht tender” Aston Martin Cygnet cost, anyway Jeeves? £30,995 base? Why that’s a duke’s whisker away from fifty thousand of those colonial greenbacks! One could nearly afford three Toyota iQs for that amount of filthy lucre… and aesthetic improvements aside, they’re the same ruddy vehicle! But then, one imagines that the Aston version at least offers the sporting thrills one expects from such a storied… what’s that now? It takes 11.8 seconds to reach 62 MPH? Egad Jeeves, we’d go faster if you pushed me in the old S3! In fact, a peasant-powered Bentley is both lower-emissions and infinitely more befitting ones station than a rebadged Toyota. So much for all that “progress” nonsense…