Posts By: Michael Karesh

By on December 12, 2008

Saab’s 9-3 Turbo X SportCombi doesn’t live up to the make’s potential. So, what’s someone seeking a Swede that can haul (cargo as well as ass) to do? Well, Volvo also offers a wagon powered by a turbo six. Any enthusiast would prefer a turbocharged V70 to a turbocharged XC70, the latter essentially a V70 with high ride height, less grippy treads and SUVish exterior styling. But, thanks to lack of enthusiast love for the last R, the V70 isn’t available with a turbo in the U.S. So if you want power in a midsize Volvo wagon, it’ll have to be the XC70.

By on November 29, 2008

Over at The Huffington Post, ad man Adam Hanft argues that “Lousy Marketing – Not Lousy Cars – Killed Detroit.” Like most experts (and Buickman), Hanft suffers from blaming the bit he knows best (if you’re a hammer…). But he makes some good points. If Wal-Mart catches flack for paying so little, then why didn’t Detroit seek positive PR for paying too much? More broadly, Detroit’s ads have long been forgettably mediocre (at best) thanks to a stifling creative process. Many ads have targeted an America that no longer exists, if it ever did. Ditto Detroit’s un-fun dealerships. Sure, those for imports have often been at least as bad, but this gave Detroit an opening. Which it failed to take advantage of. Add numerous PR blunders to the mix, along with improving reliability scores, and it’s easy to see why Hanft blames marketing. Except that there’s more to cars than not breaking, and the cars have also had shortcomings. The problem hasn’t been the cars or the marketing. It has been both.

By on November 23, 2008

The most ardent fans of Detroit accuse those who don’t buy domestic cars of being disloyal, if not downright un-American. But loyalty only makes sense when it runs in both directions. And Detroit has not been loyal to Americans, whether they be its workers, its suppliers, or its customers. But, assuming General Motors and Ford survive the current crisis, it’s not too late. Let’s focus on car buyers. What might Detroit do differently to deserve our loyalty?

Well, a few things. But the most significant would be providing customer care that deserves the name. Most of those who refuse to “Buy American” do so because they were burned by an “American” car, sometimes multiple times. In these cases, not only did the car require too many repairs—which was bad enough in itself—but the manufacturer did little or nothing to accept responsibility for the design or manufacturing defect and take care of the affected car buyer. If Detroit does nothing to assist car buyers when design or manufacturing defects lead to expensive repairs, then why should car buyers support Detroit when it needs assistance? Read on …

By on November 22, 2008
Ford recently announced Employee Pricing PLU$, with the PLU$ for any rebate. As Ford employees get any rebates the general public gets, these aren’t really extra. Every 2008 and 2009 is included except for the hybrid SUVs and the new F-150. Of course, with Jet-gate and all, is anyone paying attention? In case someone is actually buying a Ford, Mercury (yes, they’re still around), or Lincoln this month or next, TrueDelta has supplied thetruthaboutcars.com with a close (within $25) approximation of the employee prices. The catch is the usual one: lower rebates. For example, the Ford Fusion rebate has been reduced from $3,500 to $2,500. One oddity: the rebate is $1,000 higher on the V6 Escape than on the four-cylinder Escape. Since Ford actually charges under a grand for the V6 at employee prices, Ford essentially will pay you $108 for the 69 extra horspower. Now, that’s a plus.
By on November 20, 2008

J.D. Power has released its latest Sales Satisfaction Index Study results. And once again, some people are confused by what this survey measures. Edmunds: “In an unusual twist, many Asian brands — including Honda, Toyota, Scion, Subaru, Suzuki, Hyundai and Mazda — ranked below the industry-average customer satisfaction score in the study, despite gaining market share over domestic vehicles.” Shock! Horror! How can customer satisfaction with the triumphant Japanese be below average? Because this survey has nothing to do with the car, and everything to do with the dealer. As in past years, the differences between the scores is small. Nearly every mainstream brand falls within 20 points of the average on a 1,000-point scale; the difference between the top and the bottom is less than 1,000 points. The most surprising result– also not news– the average car dealer scores 857 out of 1,000. Think of it this way: if car dealers are so good, and the average level of satisfaction is so high, then why do most people prefer root canal surgery to visiting a car dealer? [ED: By the same token, why doesn’t Anita Lienert read TTAC?]

[Michael Karesh runs TrueDelta, a TTAC data provider]

By on November 18, 2008

Fortune Magazine’s Allan Sloan writes that “It’s Time to Raise the Gas Tax.” And he’s right. Many people blame Detroit for not putting more money and effort into developing more fuel-efficient cars. Some have suggested that Detroit should promise to develop high-efficiency cars as a condition for getting any bailout money. But it has never made sense to force Detroit, through Corporate Average Fuel Economy (CAFE) or other legislation, to develop more fuel-efficient vehicles. Why not? Because it never makes financial sense to put money into developing products that consumers aren’t demanding. Maybe they’ll demand them in the future, if and when fuel prices spike? Businesses prefer products for which there is a more certain demand. There’s only one proven way to get manufacturers to develop fuel-efficient vehicles: raise fuel prices to the point that consumers naturally demand these vehicles, and then keep them there. This is what worked for Europe and Japan. And it’s what would work here, in the U.S.

By on November 10, 2008
Unless you must have a car now, if you’re considering a domestic car or even a U.S.-built car, wait. Many of the proposed legislative measures to “save” the domestic auto industry will cut car prices by thousands of dollars. If you buy a car now, you could pay thousands more than you will later. Automotive News [sub] reports on the most ambitious federal consumer bailout proposal yet. “Retired Chrysler President Hal Sperlich has written a position paper with Don Runkle, former vice chairman of Delphi Corp., calling for a $3,000 government cash incentive on the purchase of a Detroit 3 vehicle.” Chrysler and Delphi execs? You’re kidding, right? Nope. An incentive like this would be unfair in so many ways that it boggles the mind. And yet it’s such a bone-headed proposal that it– or something like it– could happen anyway. And the guys make an excellent point: for GM and Ford to survive (I wrote off Chrysler when Cerberus bought them), auto sales cannot continue at their current level. “In an interview today, Sperlich and Runkle said that without consumer incentives, the Detroit 3 will merely burn through any government loans they receive within a few months. ‘It will be a bridge loan to nowhere unless there are incentives to spur demand,’ Runkle said.” To boost auto sales in the current economy, actual purchase prices are going to have to come down. A lot. And if even one manufacturer cuts prices, the others will have to follow. So, if you don’t want to pay too much for a new car, wait.
By on November 10, 2008

Edward Lapham, executive editor of Automotive News, is so not a cheerleader anymore. In fact, the TTAC convert now reckons it’s going to be Lord of the Flies in Detroit. Lapham gathered this insight from an ex-GM exec who “has moved on to bigger and better things. Well, OK, at least better things. The exec has done enough since leaving GM that he has a broader view of the world.” [ED: is that code for some kind of deviant sexual practice?] The exec predicts that automakers, suppliers, and dealers were not likely to react to the current crisis by forming an alliance and working together to save their collective rear ends. Instead, each player will look out only for itself. For dealers, this means “wanton, willful, premeditated starvation.” GM won’t have to buy out weak dealers. It will simply feed them fewer and fewer models, and all but the strongest will die. My take: this should come as a surprise to no one who has studied the industry. Even in the best of times, Detroit’s senior executives have failed to build mutually-beneficial relationships with the unions, suppliers, dealers, car buyers, or even corporate middle management. And bad marriages rarely get better when debt piles up and bankruptcy looms.

By on November 10, 2008

Volvo did it. Acura still does it. Audi has been doing it for a long time. And now Saab is giving it a shot: start with a front-wheel-drive platform, add a powerful engine and an all-wheel-drive system (hopefully with a few tricks up its sleeve), and then try to pass the nose-heavy result off as a viable alternative to a balanced rear-wheel-drive BMW. To wit: the limited edition 2008 Saab 9-3 Turbo X, in sedan or wagon SportCombi form. Success? Not so much.

By on October 23, 2008

After David Champion, head of Consumer Reports‘ auto testing, presented this year’s reliability results, I asked two simple questions. 1. What month were most surveys returned (i.e. how old are the data)? 2. What problem rates do the dots represent? Or, to keep it as simple as possible, what was the average problem rate for a 2008 car? Unfortunately, Mr. Champion did not know the answer to either question. He could only respond that the surveys went out in “the springtime,” and that the dots are relative. As if the actual problem rates they represent were of no consequence. In fact, both things matter. The truth about CR, as we’ve noted here: before: 1. The data are already about five months old, and will be 17 months old before they are updated again. 2. The differences between the dots for a 2008 model are about one problem for every thirty cars. But, since even the head of CR’s auto research doesn’t know these facts, it should come as no surprise that their millions of subscribers haven’t a clue. And then things got ugly…

(Read More…)

By on October 20, 2008

Many cars are so middle-of-the-road in so many ways that nothing about them, good or bad, is memorable. You know they’re out there, somewhere, carrying on in quiet servitude. Some of them even have sport packages and/or sports appearance packages in a failed attempt to lift them above the mundane. And then there’s the Chevrolet Cobalt SS, a vehicle from the same school that somehow manages to rise above its station in life. If only just.

By on October 16, 2008

The first Camaros won’t reach dealers until next March, but dealers have just started taking orders. The 300-horsepower V6 starts just under $23k (with “heritage steel” wheels). The 422-horsepower SS V8–- with standard 20-inch higher performance tires–-starts just under $31k. Both prices are surprisingly competitive. The Camaro V6 lists for about $1,300 less than a similarly equipped Dodge Challenger V6. Adjusting for remaining feature differences reduces the price difference to about $700. And the Camaro’s V6 kicks out another 50 horsepower. The Camaro V6 costs about $1,600 more than a similarly equipped 210-horsepower Mustang V6. Adjusting for remaining feature differences–- such as the Camaro’s standard side curtain airbags and stability control–- makes the vehicles’ prices just about level pegging. Yet the Camaro V6 has as much power as the Mustang V8, an independent rear suspension and significantly larger rims. The Camaro V8 (which will arrive after the V6) clocks in at about $2k below the 376-horsepower Dodge Challenger R/T with six-speed manual and 20-inch wheels– despite being nearly as powerful as the much pricier SRT8. Compared to the 300-horsepower Ford Mustang GT, with 18-inch wheels and an antiquated live axle rear suspension, the Camaro SS lists for about $3k more, or about $1k more after adjusting for feature differences. Bottom line: if you’ve been wanting a new Camaro, the list price shouldn’t get in your way. Now getting a car loan…

[TrueDelta is a TTAC partner site. We pay TD for their pricing and specification data.]

By on October 3, 2008

With the full-size SUV market all but dead, General Motors and Ford are counting on large crossovers (and a few pennies from Washington) to keep them afloat. Sure, small cars are all the rage, but some people need space for six-plus people and their luggage— and will not buy anything with uncool sliding doors. Also, while large crossovers aren’t as profitable as large SUVs were in the 1990s, they are far more profitable than a Cobalt or Focus. The Chevrolet Traverse and Ford Flex recently arrived at dealers. Which is more likely to save its maker’s bacon?

By on September 29, 2008

A fine-handling car carries on a conversation with the tips of your fingers and the seat of your pants, and not just near the limit of adhesion. Whether the engine’s up front, in the middle or out back; whether the powerplant propels the front, rear or both wheels, a true “driver’s car” is a master of communication and balance. While many cars have been successfully marketed based on their “ultimate driving,” very few are capable of delivering such erudition. Many are downright pigs, offering nothing more than understeer followed by more understeer. As Jonny Lieberman’s review indicates, the Mazda RX-8 is not amongst them. It is an under-appreciated gem.

By on September 24, 2008

Let’s get one thing out of the way right from the start: the Kia Borrego might list for a couple grand less than a 2008 Explorer, but the larger rebate on the Ford eliminates this advantage. The story is similar with other established SUVs. Since the Kia won’t cost significantly less than its highly evolved competitors— at least until Kia tosses some similarly serious cash on the hood—the late-to-the-party truck better have another major selling point. So…

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