Well, you knew it would. But does it really matter? Now that both Chrysler and GM depend entirely on federal tax money for their survival, who cares if they don’t sell anything? OK, back up. America’s zombie automakers need to sell enough vehicles to maintain some sort of credibility as “viable” companies. But then they can just use the federal “loans” to subsidize lower prices and keep moving the metal, as Chrysler has done. Until, of course, they can’t. Because the general public is well and truly fed-up. First, James Brown sang “Living in America” not “Paying Taxes to Support Detroit.” At the same time, the MSM’s “will they/won’t they file for C11” coverage has buyers nervous about American Leyland’s warranties and residuals. And the two failing automakers have decided to go radio silent on the whole issue (don’t want to scare the horses or queer the lobbyists’ pitch). Bottom line: falling sales and lost “consideration.” As documented by a survey of 40,000 car buyers over the last two months by CNW Research [via Automotive News, sub]:

(Read More…)

I’ve been resisting calling Toyota “the new GM” for some time. And yet the world’s largest automaker is falling into the same traps that scuppered GM’s empire. By creating the entirely extraneous Scion “youth brand,” Toyota stole a page right out of The General’s poisoned playbook. Luxury brand reaching downwards, hoisting itself by its own petard? Lexus does as Cadillac did. Listen closely and you can hear ominous rumblings about Toyota’s declining build quality; a cancer that afflicted GM even as it soared to its zenith. And most damning of all: Toyota’s increasing portfolio of redundant, ill-conceived, poorly-executed products. Add the new Venza to that list.

At-home car wash season is upon us. I cringe every time I see someone cleansing their car by hand. I have never once observed a DIY auto scrubber use two buckets for the job (one for rinsing, one for soap). On the other hand, as an OCD sufferer, I don’t even crack the binding on the Griot’s Garage catalogue. Quite simply, if I started down that road, I’d never post here, ever. In fact, I’d probably start washing other people’s cars (my neighbors bless my snowblower). So, yes, I do wash and rinse my ride at an automated car wash. And then, sham wow! At one car wash I used to frequent, the owner showed me a secret stash of broken bits, mangled by the mechanical arms that put food on his table. Never went back there again. So, have you been a victim of a car wash? Or seen some poor fool get his clocked cleaned? Spill.

Troubled Assets Relief Program. TARP. And there I was thinking that the point of the fund was to provide “relief” for financial assets. You know; to defend and protect America’s financial institutions. But no. Ever since President Bush allowed technically bankrupt American automakers to raid the fund, the definition of the word “assets” has been… flexible. And now, it includes auto suppliers. Of course, in Bailout Nation, where the Chief Executive must form a 25-plus-member, multi-million dollar (hey, these ARE lawyers) Presidential Task Force on Automobiles to make a decision, you need a whole new level of bureaucracy to bail out auto suppliers. The AP reports.

(Read More…)

The Star reports that Magna International is closing its New York state New Process Gear plant after 52 percent of the plant’s union workers rejected a 20 percent wage reduction. The haircut would have pegged hourly salary at $16, and stipulated that the factory had to break even by July 1 (good luck with that). “The plant, which employs about 1,400 people, makes transfer cases to switch power from two- to four-wheel drive vehicles.” Make that made. Magna’s statement after the jump [thanks to cnyguy and Geo. Levecque for the links].

(Read More…)

The Detroit Free Press rightly points out that ChryCo execs are headed straight for the AIG bonus backlash.

Rep. John Dingell warned Chrysler Wednesday against paying more than $20 million in retention bonuses, and called for a 95% tax on all bonuses paid by companies receiving any money through the Troubled Asset Relief Program…

“While I recognize these are different from the AIG bonuses, it is still dumb for them to pay out these bonuses at this time,” said Dingell, a Dearborn Democrat. “Chrysler should think long and hard about the optics of executive bonuses, especially at a time when UAW workers and retirees are making remarkable concessions.”

(Read More…)

Hats off to GM Spinmeister-in-Chief Steve Harris. The guy’s got his finger on the pulse, at a time when the last thing GM can afford (never mind the U.S. taxpayer) is bad PR. And so, the ailing American automaker launched a major “the Volt is real” offensive, in the face of rumors (need I mention any names?) that the bailout-critical green car program is in chaos. (Cart and pony pics in gallery below.) The Detroit News reports that “Volt is on Track.” The words “GM Says” are conspicuous by their absence. But I e-quibble, ’cause I share Lyle Dennis’ willingness to accept Volt engineers’ “infinite confidence” that they can make Chevy’s plug-in gas/electric Hail Mary work. And here’s the news: like Tesla, GM’s already hard at work on Volt 2.0.

(Read More…)

Yes, in the midst of the GM – Opel divorce, the tell-me-why-we-went-upmarket-again Insignia turbo six has appeared on our favorite Spanish auto blog Motorpasion (hola amigos!). I could summarize their info, but I know that our Best and Brightest are a multilingual mob—or at least] listened to Dora the Explorer way too many times. So here’s the quatro uno uno from la boca de caballo. But remember: these are spy shots. No digas ni mu or ni pío de esto.

(Read More…)

I’ve never made a secret of the fact that I loathe auto shows. And I’m talking about the press days, where I can meet all my good friends from Automotive News, The Detroit News, Autoblog, Jalopnik, Motor Trend, etc. and score tons of child-friendly swag and jump into any vehicle I want without getting my knuckles rapped. Of course, it’s work. You couldn’t get to me to the civilian side of these events for love (for cars I got lots) nor money (which my writers could certainly use). Look don’t touch? Touch don’t drive? Line-up to see something you saw on the Internet weeks or months ago? Pay for the privilege? Crap food? I get the bonding with the kids thing, and I know there are OCD brochure collectors out there. Modelizers need apply. But other than that, why bother? Manufacturers are wondering the same thing. So . . . say goodbye to the British Motor Show, where attendance has plummeted in recent years. Tokyo’s next. Another sign that the traditional industry template is broken. And not a moment too soon. A bit late, actually. But there you go.

Is is that time again? The time when the MSM drinks copious amounts of Kool-Aid labeled J.D. Power Vehicle Dependability survey (VDS)? Assuming that there are TTAC readers who’ve joined us in the interim, let’s consider a couple of salient facts (as taught to us by Michael Karesh at the no-longer-TTAC-affiliated TrueDelta). First, the differences between brands in J.D.’s VDS is insignificant. Buick has 122 problems per 100 vehicles while Lexus has (shock!) 126 problems per vehicle. In the real world, this doesn’t mean you’re less or more likely to experience a problem in YOUR Buick or YOUR Lexus.

(Read More…)

Bloomberg (and a lot of other good-news-hungry outlets) are reporting that a recent surge in used car prices indicates that new car sales may soon rise. The theory: a falling supply of used cars and a glut of new cars will lead buyers back to the new car F&I guy. Of course, that assumes that there’s a falling supply of used cars. For that assumption, the MSM turns to . . . new car dealers: “A survey by Wachovia Securities analyst Rich Kwas showed that 42 percent of dealers report ‘too little’ used-car inventory.” Yes, well, they would do, wouldn’t they? As new car sales plummet, franchised dealers’ supply of used trade-ins declines by, oh, roughly the same amount. Or more. 

(Read More…)

After Germany’s cash-for-clunkers sales surge, it was only a matter of time, and not much of it, before the US followed suit. The idea failed to make into the federal stimulus package (which is like calling an all-you-can-eat buffet a Weight Watchers’ Special). And so, a bill is born. CNNMoney says aloha, clunker-mania.

The bill, introduced Tuesday by Rep. Betty Sutton, D-Ohio, would provide on- the-spot vouchers between $3,000 to $7,500 to consumers who trade in older vehicles for new, more fuel-efficient cars and trucks. The size of the vouchers would vary, depending on the fuel economy of the car being purchased.

The older vehicles, required to have been built at least eight years ago, would be scrapped and their parts recycled, while the new vehicles would have to meet a certain fuel economy standard – 27 mpg on highways for cars, 24 mpg for light trucks, Sutton said. Consumers could also opt to receive a $3,000 voucher toward mass-transit fares.

Sounds great! How could that possibly go wrong? You know . . . other than all the unintended consequences?

(Read More…)

BMW is not doing so well lately. I know; it’s tough all over. But there’s tough and then there’s a 90 percent profit plunge (to €330M). Aside from disappearing revenue, BMW shares something else with America’s domestic manufacturers: denial. Just-auto [sub] reports that Bimmer’s CEO reckons the sun will come out tomorrow. Well, the end of this year, anyway. And then everything will be alright, exactly as planned, ja?

BMW is sticking to the long-term targets set out in its so-called Number One strategy despite the current challenging economic times, the automaker said as it announced a fall in 2008’s net profit of almost 90% on Wednesday.

“2009 will be a transitional year for which we cannot yet make any reliable forecasts. Nevertheless, our long-term profitability targets for 2012 remain intact. We want to preserve the independence of the BMW group,” chairman Norbert Reithofer told the annual accounts press conference in Munich.

(Read More…)

GMAC is facing mounting criticism (lawsuits to follow) for suckling on Uncle Sam’s teat for $6B, then turning around and cutting car dealers off at the knees. And so, on the same day TTAC takes GMAC to task for doing the dirty on dealers, on the same day ChryCo CEO Bob “The Prowler” Nardelli is out and about, sniffing around the federal trough for even more bailout bucks for Chrysler’s former captive lender, GMAC has issued a press release defending its “death to dealers” policy. I mean, newfound financial probity. Color me unconvinced. As one of our Best and Brightest pointed out, where there’s smoke, there’s mirrors. (Grammarian mulligan evoked.)

Wholesale Financing

* GMAC is currently doing everything it can to provide broad-based funding support to auto dealerships during these very difficult times. For example, despite the tight credit markets, GMAC continues to provide wholesale financing for about 75 percent of GM auto dealers – a level consistent with the past five years.
* Dealers are not required to finance their wholesale inventory with GMAC; they are free to choose any lender. However, we recognize that many banks and financial institutions have ceased to offer auto wholesale financing given the strained credit markets and uncertainty in the industry. GMAC is working to preserve such funding for its existing wholesale dealer accounts.
* GMAC currently extends over $20 Billion in wholesale financing to U.S. dealers.

Dealership Default

(Read More…)