BMW builds Bimmers in South Carolina. Mercedes-Benz manufactures Mercs in Alabama. Now Audi's considering an American factory. According to Auto Backstage, Audi CEO Rupert Stadler told Auto Motor und Sport that the weak dollar has forced Ingolstadt to consider building a factory in the U.S. Audi is aiming for an eight percent profit margin; an American assembly plant could help them realize that goal. Statler said his employer might produce the Q7 SUV stateside but didn't indicate when they might make the move. If they want to immigrate, there are plenty of southern states which would welcome them with open arms, cheap labor, loads of tax incentives and a hearty "Audi, Y'all!"
Posts By: Frank Williams
Pretty soon, citizens of Fairfax, California could be jailed for the heinous crime of washing their car. Fairfax is one of a number of cities the Wall Street Journal says is looking at drastically restricting or outright banning car washing at home or by charities. Santa Monica, California has already drafted a plan to ban car washes as fund raisers, stating they are "one of the biggest water wasters and pollution-generating events of this type." There isn't much concern over commercial car washes because some recycle water and others use the municipal sewer system to handle runoff. The Journal neglects to mention how much water the commercial car washes use, but then again, people who want to wash their own cars don't have an industry behind them lobbying to keep the focus off of them.
A British driver was killed after his Volvo literally flew into a first floor (American translation: second floor) flat (American translation: apartment). The Daily Mail reports that John Gordon entered a roundabout on the A15 in Werrington, Peterborough and somehow clipped a tree. His car became airborne, bounced, somersaulted then crashed backward into the flat's lounge (American translation: living room) which 19-year-old Laura Stevens had vacated literally seconds before. Gordon died of his injuries later that day, but his nine-year-old son escaped with cuts and bruises. There weren't any details about how fast he was going or other contributory factors that would explain how the Volvo managed to achieve liftoff. [Click through for a truly mind-boggling photo. And thanks to Starlightmica for the link.]
After divesting itself of every ancillary business from appliances to locomotives to raise operating capital, GM's started throwing the last pieces of furniture onto its cash conflagration. This past July they sold the Allison Transmission unit for $5.6b. Now The Flint Journal tells us they're getting closer to selling off their medium-duty truck line to International. Sales of the medium-duties– sold as the Chevy Kodiak, GMC TopKick and Isuzu T-Series– have been down this year. The United Auto Workers (UAW) will have to approve that sale and VP Cal Rapson says he won't go for it unless GM asks him nicely "it makes sense for Flint and the UAW." In the meantime, UAW workers at International are on strike over the planned layoff of 500 workers, which may complicate things. At the rate they're going, GM's "damaged brands" Pontiac and Buick better watch out — Chinese automakers would line-up cash-in-hand to get access to a ready-made U.S. dealer network.
First we had to give up (freebasing?) freon because it was eating a hole in the ozone layer. Now The New York Times tells us the European Union is banning R132a, the refrigerant currently used in auto air conditioners. You guessed it: it's a greenhouse gas. The most likely replacement? Carbon dioxide. Yep, the bane of environmentalists everywhere could be cooling off your BMW in a few years. Even though tests with other coolants are still underway, Audi, BMW, Mercedes, Porsche and VW have all named CO2 as their refrigerant of choice. While the U.S. isn't considering banning R132a (yet), they're looking at other possibilities like R152a which is less of a global-warming threat. Each has its unique problems, though. R152a is slightly flammable, and carbon dioxide has to operate at five times the pressure of current systems. Anyone want to place any bets on how long either of them lasts before they get banned too?
The station wagon is dead. Or not. It all depends on who you ask. Citing the Dodge Magnum and Malibu Maxx (?) as examples, MSNBC proclaims the "wagon wave, alas, crashed ashore against the hard rocks of reality and is now receding." They predict CUVs will put the final nail in the Family Truckster's coffin. What about companies like Volvo and Subaru who are still making a decent living selling station wagons? Well, they sell because of the brand, not the body style: "the remaining wagon buyers tend to be those companies' customers."
On the other hand, Brandweek is predicting a station wagon renaissance. They base their assertion on wagons coming from from BMW, Volvo and VW in the next year. However, as they point out, manufacturers are going to great extremes to avoid "the 'W' word." Interestingly (and probably more accurately) they classify CUVs like the Subaru Forrester and Volvo XC70 as station wagons. Taken that way, station wagon sales are on the upswing, and probably will continue to grow in popularity.
Honda got the biggest bang for their American advertising buck in 2006, according to Brandweek. A study by research firm Compete reveals that the Tokyo transplant spent just $118 in advertising per brand shopper last year, besting Toyota by $40 per. Ford was the biggest spender, forking-out $240 per vehicle to entice each shopper into their showrooms. Overall, foreign nameplates averaged $182 per shopper in 2006, while domestic manufacturers spent an average of $223 per shopper. Looking at individual brands, Scion spent a whopping $30 per shopper. "The smaller brands with a clearly defined target performed the best," Compete's Mike Jennings opined. "Brands like Scion and MINI have a product line that also corresponds, whereas Ford has to go from an F250 truck to a Fusion. It shows a fundamental of marketing, which is, ‘ID a target and hit it.'" It also shows that a product with a good reputation and high "gotta have it" factor doesn't need a lot of advertising. And we reckon GM's $150m Malibu launch campaign will probably help the General unseat Ford's ad spend per car when the 2007 figures are released.
Is there more than a joint minivan project in the future for Chrysler and VW? The Car Connection feeds the flames of corporate speculation. "There is going to be another round of mergers in the auto industry," the chairman for the Center for Automotive research asserts. "And the one company that matches up well with Volkswagen is Chrysler." David Cole feels Chrysler has a lot to offer the German automaker: U.S. production facilities, a large dealer network and recently reduced labor costs. With VW's stated goal of selling a million vehicles in the U.S. per year, they'll have to do something new. That said, the last Chrysler – VW collaboration gave unto us the Volksie-engined Dodge Omni/Plymouth Horizon twins. Just think of the possibilities now… The next Chrysler 300 could be built on the A6 platform, a revitalized Crossfire could feature a Boxster drivetrain, or the Golf/Rabbit could be the donor for the next Caliber. Of course, if if you switch that around, we could be looking at an A4-a-like with a Sebring-grade interior.
Surprise! The Detroit News reports that nearly half the vehicles listed in Consumer Reports' "most satisfying" list are manufactured by Japanese brands. And a quarter of the models listed were Toyotas. Only seven American brands showed up on the list. The Ford Fusion and Saturn Aura won high marks in the family car segment. While making up less than 10 percent of the market in the U.S., European models accounted for almost a third of the winners. The Toyota Prius was the overall most satisfying vehicle, followed by the BMW 335i and the Porsche Boxster. Domestic models dominated the "least satisfying" list, which consisted mainly of trucks and SUVs. Four of TTAC's Ten Worst winners are Consumer Reports bottom feeders: the Saturn Ion, Chevy Aveo, Chevrolet Uplander, Chevy Trailblazer/GMC Envoy.
U.S. automakers seeking contract concessions from their domestic union workers often play one plant against the other, threatening to shift work from recalcitrant locals to more amenable union members. The Detroit News reports that German labor union IG Metall has made a preemptive move to stop GM from playing that card internationally. IG Metall has nominated United Auto Workers' (UAW) Veep Cal Rapson to the supervisory board at Opel. (German law requires companies to give seats to their labor union.) "GM's globalization could lead to a dangerous process of downward spiraling competition among the GM plants and unions," pronounced IT Metall's spokesman. Talk about conflict of interest. If GM wants to shift production of an Opel model to the U.S., would the UAW's foreign emissary try to stop the move in support of their German brethren? Lest we forget, GM has already threatened promised to shift Saturn Astra production stateside should the compact car prove a hit with American consumers.
No matter how many hip-hop artists they hire to shill their products, domestic carmakers just can't get through to younger buyers. Mediapost's Marketing Daily reports that a new J.D. Power survey shows that the younger carbuyers are, the more likely they are to avoid domestic nameplates. On the other hand, buyers who go for domestic vehicles are more likely to shun a particular vehicle because it's an import. The study also showed a more domestic vehicle buyers are in the interior of the country while import buyers are more plentiful along the coasts. The reasons given for going with imports: perceived fuel economy, reliability, quality, depreciation. Domestic buyers go that way because of styling and cost. No matter which way they swing, consumers' decisions not to buy particular vehicles are most often based on consumer reviews on line, expert reviews, and manufacturer web site information.
Duemotori.com reports Jeep is racking up the awards in Europe. Earlier this year, the entire Jeep lineup won the 2007 Green 4×4 Award from 4×4 & MPV Driver Magazine. Now the same magazine has named the Patriot 2.0 CRD Sport as their 4×4 of the Year. In announcing the win, the magazine's editor, Bob Murry, states "The Patriot is a cracking car to drive… It adds a welcome dash of adventure and US style to a sometimes bland SUV market. At last you can have your American pie, and eat it, too!" That's not too bad for a vehicle that started life as a Dodge Caliber and has only sold 800 units this year. Interestingly, even though it's available with a 2.4L petrol engine it's only the highly-equipped CRD (diesel) Sport version that received the 4×4 of the year award.
The Japanese government has been ordered by a district court to pay worker's compensation to a woman who claims her husband worked himself to death at Toyota. Yahoo! says Hiroko Unchino applied for compensation after her 30-year old husband, Kenichi, collapsed and died at work in 2002. He'd averaged 80 hours of overtime per month in the six months prior to his death, and had 114 hours overtime for the month before his death. The government acknowledged death from overwork, or karoshi, as a basis for claims in 1987. Since then, they've acknowledged 147 cases. Uchino sued after the Labor Ministry said her husband's case didn't qualify as karoshi. Curiously, Toyota wasn't involved in the suit. Yet.
As a privately-held company, Chryslerberus doesn't have to reveal its financial information to the general public. However, executive VP of North American sales, Steven Landry, gave us a peek behind the curtain during a talk to students at his alma mater, St. Mary's University in Halifax, Nova Scotia. The Detroit Free Press reports that as he discussed Chrysler's efforts to return to profitability, he revealed they'll fall about $1b short of what they're spending. Their overall plan? "Lose a little money this year, break even next and rake it in during 2009 and 2010," according to a report in the Halifax Daily News."You have to come to the realization that in some instances, you've got to stop spending," Landry opined. "You've got to right-size what you do to the revenue that comes into the company." Of course, Chrysler's spinmeisters were all over his comments, qualifying them by saying Landry was talking in generalities to students. I wonder what Chrysler CEO Boot'em Bob Nardelli had to say to his talkative Veep upon his return to Auburn Hills.
Think the $10.2m salary and bonuses Rick Wagoner took home in 2006 is outrageous? That's chump change– at least compared to what Business Times reports Wendelin Wiedeking reeled in last year. Porsche's president finished the year with his bank account €70 healthier than when it started. That's $130.7m folks. For one year. The fat cats on the management board shared in the bonanza, splitting €113 million ($166.9m) between themselves. While it's true Porsche is the world's most profitable auto maker, less than half of its profits come from making autos. While the company reported €5.86 billion ($8.65b) of profit this month, €3.59 billion ($5.3b) came from stock option profits– most of which are "paper" profits on options to purchase more of VW. Porsche finance director, Holger Härter, describes the monetary machinations as "options on options on options" but denies there's anything shady going on.
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