In The Land of the Free our choice of automobile brands is highly limited. Well, relatively. Dozens of European import brands have long fled our shores, curtailing our automotive freedom of expression. What happened to all those storied marques, such as Alfa-Romeo and Peugeot? And what’s keeping American pistonheads from once again enjoying the forbidden fruit of Europe’s exotic brands?

During the import boom in the fifties, Americans bought everything from Abarth to Zundapp. Sure, service at the gas station/cum Lloyd dealer was an iffy proposition. But eager Americans embraced the delicate and unadulterated European wares. Once in the hands of their hard-driving maintenance-shunning owners, most of them self-destructed exactly three days after their six month warranty expired.

The imports’ first Darwinian lesson: mechanical robustness and dealer support. VW and Mercedes passed with flying colors. Others, like Peugeot and Alfa, survived the great 1960 import implosion, if just barely.

Peugeot (known as the French Mercedes) built durable over-engineered rear wheel-drive (RWD) cars. The 404 was a regular winner of the grueling East-Africa Rally. Reliability, an unusually smooth engine, a velvety ride and comfy seats defined Peugeot.

Alfa built exquisitely beautiful coupes, roadsters and sedans that defined world standard for performance and style. The legendary twin-cam engine and RWD drivetrain was actually pretty solid, thanks to decades-long continuity of development and refinement.

Both of these brands had clearly identifiable and consistent qualities: distinctive RWD chassis, engines that excelled with their respective targets, the best styling money could buy (Pininfarina, Bertone), and top-notch performance. They were the Lexus and BMW of their time. So what happened?

Lexus and BMW.

That’s not the whole answer, but it’s a big part of it. The Japanese and Germans simply applied themselves to the business at hand in a more consistent way. The critical period was the seventies, during of a deluge of US government regulations. Draconian emission, fuel economy and safety regulations threw the whole auto industry into panic mode.

But some kept their heads cooler than others. Many smaller Europeans like Peugeot and Alfa began to founder. Cow-catcher bumpers and a tangle of emission controls ruined Alfa’s sumptuous design and performance. Peugeot’s reputation was destroyed because they couldn’t/wouldn’t properly engineer and integrate new electronics and peripherals.

Germanic engineering prowess and the Japanese system of continuous quality improvements flourished. The German’s long experience with fuel injection allowed them to keep performance mostly intact. Japanese reliability made cars like Peugeot and Alfa look increasingly unreliable, even if they were only standing still (relatively and literally).

Alfa and Peugeot could never get over the attitude of so many other European (think British) imports: America was an easy place to make money, especially when the dollar was flying high. They simply weren’t committed to having the U.S. be a key market. When the going got tough, they retreated to their home markets (or disappeared altogether).

Adding insult to injury, they also changed, for the worse. Alfa and Peugeot went down market in Europe with a full range of smaller, cheaper cars; and both abandoned their RWD platforms.

Peugeots today are frightfully ugly, with gaping maws that make Audi’s deep-throat mouth look positively prim. Peugeots share a range of cheap front wheel-drive (FWD) platforms with Citroen, another totally debased legendary marque. Peugeot competes in the mass-market; they’re NOT known for quality build or any other outstanding features.

Alfa was long assimilated into Fiat, and shares its FWD platforms, engines and other components, along with Lancia (yet another debased legendary marque).

Alfas and Peugeots would be instant dead meat in an effort to return to the US in their current all-FWD form. They’re not nearly distinctive and competitive enough to carve out a sustainable-sized niche. And that’s another key part of the story.

The US market is huge, for better and for worse. The bad part: enormous expenses establishing distributor and dealer networks and high media costs to launch an effective marketing campaign.

And the competition is deeply established. Lexus and other mid-premium brands offer Peugeot no opening. Going up against the Japanese and Korean mass-market brands would be seppuku. Alfa has a similar problem with BMW. The Bavarians never took their eye off the US market, starting with the 2002. The 3-Series is now untouchable.

Hope (and its sister, hype) springs eternal, especially in the car industry. MINI’s overwhelming success in establishing a brand-new import brand will surely feed the hope (and hype) machines.

Alfa rumors swirl through the auto-blogosphere on an almost daily basis. The Mito might make a cute companion in MINI showrooms, although its huge front overhang is disconcerting in the profile. A future range of RWD Alfas is a long-shot. But Peugeot (and current Alfas) joins the ranks of so much other European forbidden fruit that looks appealing from afar, but is rightfully left untouched.

Since this summer's sales slump, Detroit's stopped bitching about the so-called "perception gap." That's the alleged difference between consumers' idea of their vehicles' quality– relative to their Asian rivals– and "the reality." Suddenly, the concept is a lot less important than finding something, anything fuel-efficient to sell. Besides, there's a far more catastrophic "gap" in play, one that threatens Motown's very survival: the "gap" between what a SUV is worth new and its value come trade-in time.

For most of the SUV boom, U.S. truck resale values bucked the domestic passenger car trend toward higher (not to say killer) depreciation. These SUV residual values allowed the boys from Detroit to deploy a whole list of sales tricks no longer available in the car market, especially leases.

It also made it much less painful to get an SUV owner into a new loan before the old one was paid off. Resale values stayed high both because of demand (aspirational buyers who couldn't afford the full price) and general ruggedness (they WERE trucks after all). When the boom was in full swing, SUVs were both selling at huge mark-ups and "selling-on" to new owners long before the vehicles wore out. It was a license to print money.

SUV resale values held up well during the incentive wars of the last five years or so. You would have thought increased incentives would draw more "second-buyers" to buy new, but no. The most likely explanation: increasingly easy credit stretching the resale market ever lower. The Big 2.8  held their market share, at an ever-increasing cost to profits.

There was no way that the recent run-up in gas prices would NOT impact SUV demand. That said, the drop for The Big 2.8 has been dramatic, past the point of catastrophic. Some of this is due to the SUV market's violent contraction, making the domestics a victim of their old success. But the truth is rather darker, and does not bode well for any near-term recovery of light-truck sales.

There are two essential problems. First, obviously enough, supply and demand.

Just about everyone who wanted to buy a truck in the last five years has one. Aside from vehicles wearing out and people reaching driving age (or truck-love age), there is little "need" for more vehicles new or used– especially as the "fashion" SUV owners, looking for a way out, outnumber the new blood. This surfeit of sellers is driving SUV and pickup truck prices into the basement, and then padlocking the door.

This is bad enough. But the second factor makes the situation much worse. 

These days, most truck owners are "upside down" or "backwards" on their loan; they owe more than the vehicles' resale value. As re-sale prices continue to crater, their numbers are swelling into the millions. As the "gap" in value grows in a predictably ruinous way, truck leasing becomes practically impossible.

The only way to lure more buyers is with lower prices. This lowers resale value– again, more, still– and shuts more current owners out of the new market, as the depreciation exceeds the discounting. Again, the fact that these trucks/SUVs are quite durable (one reason they held value) is a bad thing.   

At some reasonable level of industry production, it will probably take five years to get the glut through the market, and perhaps another three to get prices back up. BUT the domestic truck makers can't afford to throttle back on light truck production. The Big 2.8 have counted on trucks to bring home the bacon for over a decade. As we've said here many times before, don't have a plan B ready to go.

Toyondissan are a little less exposed to this light truck debacle– they can count on making money in cars. Aside from pickups, they stayed out of the most vicious price wars. While this kept their sales volumes comparatively low, the strategy maintained resale values at a survivable rate. 

The Dai-san can shuffle factories, sell to the "choir" and maintain a presence in the U.S. market– until the sales environment recovers enough to sell to the "other" truck owners. Toyota can afford to take the long view on the Tundra. Honda can get by selling 200K "trucks" (Pilots, Ridgelines, Odysseys) to their loyal customers. Nissan can't afford the same luxury with the Titan; it's days are numbered.

For The Big 2.8, circles don't come any more vicious. They are STILL collectively building far more trucks than the U.S. market can absorb at a profit. If they cut production, they allow their competition to raise their prices just a little at the old volume. Cutting pickup production to salable levels would help the doer, but it would help the other two even more. 

In other words, Detroit's game of Last Man Standing is also a matter of waiting for the other guy to blink. When one U.S. SUV/pickup truck manufacturer cuts back, bails out or goes under, the others will prosper. Relatively speaking. Realistically speaking, in the next five years, this is the only way Detroit's truck glut could turn back into a short term asset.  

Ford’s survival may depend on the U.S. success of the European-designed Focus and Fiesta. An embattled GM agrees with FoMoCo's "world car" strategy, talking up its "global platforms." Meanwhile, Honda and Toyota’s dominant Camcordias were designed predominantly with the North American market in mind. Does success in the brutally competitive American market demand specifically tailored designs? Or are “world cars” the salvation to Detroit’s passenger car woes?

Detroit has been vacillating on this subject since the fifties, when they imported Opels and Euro-Fords. After 1960, these “captive imports” took a back seat to home-grown compacts, on the assumption that the hometown team knew better what Americans wanted: lazy six-cylinders and soft suspensions.

When these “compacts” became obese in the sixties, GM resumed importing the tin(n)y Kadett. By 1969, the Opel was the number two selling import. Turns out Americans really did like genuine Europeans– even if they were sold at the Buick dealer. So in its usual hubris, Detroit decided it could “leapfrog” the imports. Hence the Chevy Vega and Ford Pinto.

Suffice it to say, that didn’t work out so well.  Meanwhile, the Japanese invasion became a tsunami. GM’s GEO resumed importing captives from Isuzu, Suzuki, Toyota and Daewoo, with varying degrees of success. Ford’s European imports were a mixed bag. The “baby Mustang” Capri and the little front wheel-drive hatch Fiesta were genuine hits (for a while). But FoMoCo struck out with the [Bob Lutz-championed] Merkur-badged XR4ti and Scorpio.

Detroit’s big leap into “world cars” began in the late seventies, in response to expensive gas and inexpensive competition. First up: Chrysler’s 1978 Omni/Horizon twins. Designed in Europe, the “Americanized” Omnirizon (a.k.a Simca) was a success. But it didn’t receive the continuous development that the Japanese and Europeans lavished on their small cars. The models finally died in 1990, essentially unchanged from their original incarnation.

Ford’s global 1981 Escort was heavily (and dubiously) touted as the first “world car.” In its home market, the European Escort was a decent Golf-fighter. The U.S. version was flawed in the usual Detroit way: soft suspension, lousy gear ratios and cheap, ugly Americanized interiors.

GM committed its version of the crime on an even grander scale with its highly-promoted world car J-body of 1981. Known (and then despised) as the Cavalier in these Land of the Free, GM of Europe successfully adapted the same basic car as the Opel/Vauxhall Ascona.

These three world cars demonstrated that The Big Three were perfectly capable of designing world cars that could compete with Europe’s home grown best (e.g. the VW Golf and Passat). But it was their “Americanization”– especially reliability issues– that doomed them to declining market shares.

Even VW made the same deadly miscalculations. The Rabbit arrived in the US in 1975 as a totally unadulterated crisp German import. In 1978, the falling dollar inspired VW to open the States’ first transplant factory (sound familiar?) to build a U.S. version. 

Former GM exec James McLernon was hired to meet the 200k annual sales goal. His solution: “Malibuize” the Rabbit with cheaper and softer plush seats, softer suspension, dorky full wheel covers and (!) a smaller 1.4-liter engine. The result was largely a disaster, at least from the typical VW buyer’s point of view. The plant closed in 1989.

Meanwhile, the Japanese were happily selling their “world cars” in the U.S. It helped that seventies Japanese designs were closer to American tastes (think vinyl roofs, heavy chrome grilles and weird C-pillars). But Toyondissan’s ever-growing reputation for reliable, economical transportation transcended taste. That alone is a huge lesson. 

Ford essentially repeated its Escort mistake with the Mondeo/Contour/Mystique mid-size world-car. Designed jointly with the Europeans, the American version was flawed by being too compact, not to mention the usual reliability issues.

By the mid nineties, the Honda Accord and Toyota Camry were split from their home-market versions, due to the Japanese tax on vehicle width. But the “American” versions were– and are– also sold globally and in Japan, under different names.

The old rationale Detroit used for “Americanizing” their world cars or global platforms is now essentially dead. Taste in design was once provincial; it’s now global. We all shop at IKEA. Yes, some parts of the world prefer trunks while others hatchbacks. VW solved that problem decades ago with the Golf/Jetta twins. And European cars have grown to world standards (the new Mondeo is huge).

Ford and GM’s adoption of true world cars is economically obvious and long overdue. But their success hinges entirely on the exact same criteria that have always been the life-or-death determinants in this country: design, utility, price/value relationship, reliability, marketing and dealer support. That is, versus the competition. Which is… brutal.

Things are bad for Chrysler, Ford and GM. The Big 2.8 are burning precious cash, shedding valuable market share, choking on unwanted trucks, attempting to nurture (or excise) damaged brands and outmoded models, and struggling to bring relevant products to market. Bankruptcy looms large. And yet, there’s a silver lining to the recent, calamitous downturn in the U.S. new car market. But before we reveal the sliver of hope, let’s check in with the main engines of their destruction: Honda, Nissan and Toyota…

For Toyota, whose annual profits are more than twice GM’s entire market capitalization, the American consumer’s switch from light trucks to lighter cars is extremely annoying.

After investing some $2b in a brand new pickup truck plant in Texas, ToMoCo had to slash prices to the bone to move the metal. Now that their sales target is a cruel joke, they’ve backed off on discounting. Sales are sinking fast. Although Toyota’s still selling over 100k Tundras per year (at current rates), the plant was designed to build more than twice that amount.

As ToMoCo shuffles and “right sizes” production, the prescient addition of Camry production in Subaru’s space is paying off in spades. The “extra” capacity has allowed an increase in U.S. rental sales. Even so, the increase in total sales means the fleet percentage is well under 20 percent for the Camry/Corolla, which bodes well for maintaining the vehicles’ re-sale value (historically what kills fleet-queens). 

In this not-so-brave new market, Toyota’s biggest obstacle to further growth is structural; they can’t build popular models fast enough. The vehicle that best exemplifies gas-sipping, the Toyota Prius, can’t be constructed in anything other than a purpose-built (or highly modified) assembly plant. Equally important, battery suppliers must expand to meet the demand. Back when Toyota announced a target of over 200k Priora per year, there was talk of them being too ambitious. Turns out, they weren’t ambitious enough.

If the pickup truck debacle dented Toyota, it gutted Nissan. Even matching mad pricing only moved 80k Titans last year. With the ’08 numbers plunging off a cliff, Nissan is looking to get out of big-truck building (sourcing the Ram, if Chrysler’s still around). Meanwhile, the company’s juggling output to keep their factories busy. This is the first major market downturn since Nissan merger with Renault; it’s time to find out if they can thrive in adversity. 

The biggest issue Nissan faces in the U.S.: a lack of “first choice” vehicles. The Quest is off most minivan buyers’ radar. As good as they are, the Altima/Versa are on the tip of no one’s tongue. The Murano, one of Nissan’s only “stand out” vehicles, is slumping badly. The model’s thirst, extra size (without a compensatory third row) and cannibalistic smaller sib (the Rogue) have done it in.

So, while a truck-liberated Nissan will have the production space to grow, there’s not much hope for growth in the near future. 

Right now, Honda is the only major manufacturer increasing U.S. sales over last year– by about five percent. Offering a small-car heavy line-up has helped their bottom line. But so did limiting large vehicle production.

Last year, Honda changed over one line from making Pilot/sized vehicles to Civics. That left them with a natural cap of around 200k Pilots, Ridgelines and MDXs, and a similar limit on Odysseys. If the Odyssey outsells the Dodge Caravan this year, it will be a result of the Caravan falling (which it has been), not increases on Honda’s side.

All this shuffling freed production space to increase the sales of Civics, Fits and CRVs. The Accord is selling well enough, but there is a natural “cap” of about 450K. Given strong TL and Inspire (JDM US-style Accord) sales, they may not reach that. The limit on Civic sales are much higher; half a million would not be a shock. 

Even better, Honda is getting ready to open a new assembly plant in Indiana. While it has been listed to build Civics, it may directly or indirectly allow higher Fit sales. Even with a new plant online, Honda’s U.S. sales cannot get much above two million units per year without even more investment and time.

The good thing about this market-share-loss is that it’s mostly relative. Chrysler, Ford and GM have too many factories for what they sell, but they are also the only companies that could fill the gap if/when one of them shuts down. 

And there’s your silver lining. Assuming Chrysler's the first to go, assuming the American market doesn’t contract even more violently than at present, Ford and GM will be uniquely positioned to increase production to take-up the sales slack; which could be measured in hundreds of thousands. No one else has the necessary plant capacity. Last man standing. Dead cat bounce. Silver lining. Take your pick.

Everyone in the car biz knows that June was a catastrophic month for the U.S. new car market. Total sales dropped by 18.3 percent. The big change this time 'round: it wasn't just light trucks that took it on the chin. Car sales received some body blows, as well. If you're an auto industry exec [still] living in denial, it's best to stop here. If not, read 'em and weep. [NB: As per TTAC policy, sales numbers not adjusted for "sales days."] 

Family Cars

As SUV refugees seek car-shaped shelter, there were some big winners in June. Sales of the Chevy Malibu* rose by an astounding 73.4 percent over last June, up 31.2 percent year to date (YTD). Honda's Accord chalked-up a 37.3 percent gain for the month, up 12.9 percent YTD. Ford's Fusion finished the month 18.4 percent ahead of last June, up 11.7 percent YTD. Meanwhile… Chrysler's once-proud full-size sedan continues to tank; 300 sales dropped 61.6 percent from last June, down 36.5 percent YTD. And surprise: the Toyota Camry took a hard hit, dipping 10.8 percent below last June, posting a 0.3 percent loss for the year.  

Compacts

The Chevy Cobalt was another winner for GM, up 21.6 percent for the month and 18.5 percent YTD.  The Dodge Caliber was another loser for Chrysler, down 43.6 percent for the month and down 0.5 percent YTD. Worryingly, Ford's Focus dropped 5.5 percent in June. But it's still 27.6 percent ahead of last year. The Toyota Corolla** continues strong sales, up 15.6 percent on month. Yet it still trails last year by 3.8 percent. Honda's Civic* finished the month 9.5 percent ahead of last June and 17.9 percent ahead of last year. The Sentra didn't do as well for Nissan.  It was down nine percent on month, struggling to finish the first half of the year up 3.5 percent.

Subcompacts

Honda's fuel-efficient Fit was a big winner. Sales leaped 78.2 percent ahead of last June, finishing the semester up 67.4 percent. Nissan's Versa finished the month up 17.4 percent for June and 20.7 percent ahead YTD. GM's entry in this genre ran out gas. Sales of their Korean econobox Aveo were down 19.7 percent; down 1.7 percent YTD. Toyota's Yaris also lost ground, ending June down 7.5 percent; though staying 39 percent ahead YTD. 

Trucks

Brace yourself. Chevy's Silverado* sales tumbled by 23.7 percent on the month, 25.6 percent YTD. Dodge's Ram fell 48.1 percent in June, down 30.4 percent for the first six months.  Ford's F-Series sales dropped by 40.5 percent from June '07, ending the first two quarters down 22.7 percent. The Toyota Tundra , which had posted sales gains for the first quarter, finished the second quarter down 52.9 percent from last June; down 7.6 percent YTD. The Texas-built Tundra may soon drop below 2006's sales line.

Truck-Based SUVs

Chevy's Tahoe* showed a surprising gain from May (fleet sales?), adding about 2.5k units to the tally. finishing the month "just" 9.8 percent below last June. However, Tahoe sales are still down 26.6 percent YTD. The Dodge Durango continued its descent into oblivion, dropping a massive  67.3 percent in June, down 48.4 percent on the year.  The Ford Explorer showed an equally abysmal June, losing 52 percent from last June and 33.2 percent from last year.  Toyota's Sequoia continued its death-defying growth, surging by 25.1 percent in June, showing a 28.8 percent gain YTD.

Crossovers

The crossover bubble's burst. Thanks to a slow start last year, GMC's Acadia is up 8.5 percent on the year. But June sales fell off a cliff, down 40.1 percent from last June. Ford's Edge also dropped in June, this time by 19.9 percent. Robust sales earlier this year puts it 16.9 percent ahead of last year– for now. Toyota's woes continued, with Highlander* sales down 38.9 percent in June and 5.2 percent compared to 2007. The new Honda Pilot wasn't exactly pulling them in either; sales were down 29.8 percent for the month and 16.7 percent YTD.

Prius

Toyota's Prius dropped for the second month in a row. Due to short supplies and high demand worldwide, stateside sales are down 33.7 percent from last June. Sales drops in May and June pulled its year-to-date sales to 3.2 percent below last year. Toyota plans to produce 450k Priora in 2008; they've already sold 91.4k of them in North America alone so far this year. So look for their sales numbers to remain relatively low, in spite of growing demand.

By Manufacturer

GM's Hail Mary end-of-month 0% financing deal helped stave off a total rout. The General managed to finish June a "mere" 18.2 percent below last June's pace, down 16.3 percent for the year. Toyota's performance was June's shocker. ToMoCo ended the month 21.4 percent below June '07 (well below GM's dismal performance), dropping 6.8 percent on the year. Meanwhile, Chrysler sales fell by a staggering 35.9 percent for the month. ChryCo's trailing last year's sales by 22 percent. Ford was down 29.5 percent for June, 14.5 percent YTD. Honda managed to finish the month relatively unscathed, showing a 1.1 percent increase, with a 4.1 percent increase year to date.

Looking Ahead

July's misery may well eclipse June's. GM ran their 0% financing deal for the first week of the month, so they've up you-know-where without a you-know-what (small car?). Ford, Chrysler and Toyota are all offering incentives of varying sizes, particularly on the trucks and SUVs nobody wants. At what point will the deals become sweet enough to overcome the fuel bill? The sales numbers show we aren't there yet. As fuel prices climb, or even just hold steady, as the Fed declares that the economic gloom will extend well into '09, it's clear we're still a long way from the bottom of this combination of a violent contraction and a wholesale shift in product preference.

*Includes hybrids
** Includes Matrix

Click here for June's market share numbers 

Scott Held draws a line in the sand. “I firmly believe we will be selling Chrysler for quite a long time.” Held is the president and managing partner of Sherwood Partners. In the same year that Chrysler’s U.S. sales have shrunk by 35.9 percent, his group has just spent CA$18m on a new, super-sized Chrysler dealership in Edmonton, Alberta. What if Held’s wrong and Chrysler goes belly up? “I know I am taking a risk,” Held admits. "But I have faith."

Held’s been in the business for fourteen years, including the last three managing or running dealerships. He’s lived through Chrysler’s chequered past– and sees good things in its future. He disputes the widely-held belief that Daimler-Benz pillaged Chrysler.

“Yeah, it was a take-over. I mean, all the Chrysler execs were fired and replaced with Benz guys. But under Benz, I saw some of the product development; it gave us access to some high-technology Mercedes components we would never have had access to,” he states matter-of-factly. “It was better for Chrysler than it was for Benz. Benz bought the company for $40b and sold it for $7b,” he reminds me.

And yet, the sharp decline in bankable market value didn’t set off warning signs that Chrysler may be in bad shape.

Several factors fuel Scott Held’s optimism, not the least of which is the 22 straight months of sales increases for Chrysler’s Canadian retail operations. The success is in stark contrast to Chrysler’s U.S. misfortunes. Held attributes the Chrysler’s Canadian success to “aggressive marketing and incentives”, and, surprisingly, product.

“The Patriot, Caliber and Compass are giving us access to young people we’d never have seen… The Caliber is doing much better than the Neon.”

It’s difficult to say if Held’s analysis is on the mark. Though smaller SUVs have always fared better in Canada (where gas prices are currently hovering near $5.20/gallon), Chrysler advertises heavily in the U.S. also, and all of the models Held named are also on sale there. And doing badly.

Chrysler was one of the earliest automakers to cut Canadian MSRP to achieve parity with U.S. prices. I asked Held if he thought the move created a sales bubble, foreshadowing an eventual decline.

“They addressed the [rising dollar] very early. It didn’t give us a boost. November and December [2007] were tough months for all of Canada but we still kicked ass. If anything that just let us keep our customers we would have lost to the U.S.”

Held is fully confident in Canadian demand for Chrysler products; no bubble here, move along.

Held admits Chrysler has made a few mistakes over the years, most visibly on the Sebring. “That’s an easy one to pick on,” he jests. He was also worried about Chrysler dropping the short-wheel base Caravan for the new 2008 generation. “It did a lot of stuff for not a lot of money.”

But the bravado of the salesman always returns to the discourse. Those things “have been addressed” now. Old Sebring buyers are going for the Avenger, and SWB Caravan shoppers are going for the new Dodge Journey. “I’m surprised at how well that thing is doing,” he muses. 

Despite the “good years” under Daimler, Held thinks Cerberus is a better fit for the troubled Detroit automaker. “I’ve met Bob Nardelli,” he mentions. “They’ve done a significant amount of restructuring. They’ve committed to spending large dollar amounts on product development and on hybrids.”

Daimler, he recalls, was much more obsessed with diesel-powered cars, as befitted its European heritage. Held thinks the hybrid Durango/Aspen twins will be some great sellers. He’s so confident, that he’s ordered a “bunch of them” for his dealership. “A more volume-selling [i.e., smaller] hybrid is on the way. I think that’s where Jim Press wants to go.”

When prodded about Chrysler’s lengthy development time, Held concedes that Chrysler is a bit late to the hybrid party, but it still has to be done. “Honda and Toyota have the most success with hybrids on cars that are already fuel-efficient. We’ll be a bit late to the party, but I don’t think the party will be over.”

Held isn’t sure when such a car will come, as he doesn’t hear from Chrysler’s new, mysterious overlords much earlier than the Internet does, but his optimism isn’t tainted.

To my relief, Held’s not fazed by any of the doom-and-gloom I bring to the conversation. “I think that ‘operational bankruptcy’ thing was played up by the press because it makes a good story. The brand isn’t going to disappear.” One thing’s for sure: time will tell.

For the third time, a dramatic oil price spike has thrown the auto industry a curve ball. And once again, after years of supersizing, manufacturers are lacking the right-sized, economical products for which the market is desperate. Instead of spending three to five years developing new cars from scratch, it’s time to dust off the best from the past and put them back into production. An air bag here and some updated engines and technology there, and these seven classics are ready to save the day in each of the major categories: Read More >

Few things in this world are as dramatic as the start of a NASCAR race. War, for instance. Or the launch of a Saturn V rocket. The crowd rises from their seats in anticipation. The starter stands in his box with flag in hand as the bestickered phalanx of cars rounds turn four. After the pace car scurries from view into pit lane the violence of dozens of highly tuned V8 engines is unleashed in unison. You can sense the invisible force of the sound approaching.  Like others, I reverently remove my radio headphones so that I can fully ingest the aural assault. I feel the high frequency vibration in the aluminum stadium seats beneath my feet. And then it hits – a sound so big I hear it with my entire body. You don’t get that on TV.

These starts, which are repeated after every caution, are like hits of crack to NASCAR addicts. Add the excitement of aggressive bump-n-grind driving, a few spectacular crashes, and a dramatic finish, and the crowd could care less that the racers only turn left.

My latest foray into NASCAR society occurred at the Craftsman Truck Series Sam’s Town 400 at the Texas Motor Speedway (TMS) with my youngest son. Forget every exaggerated stereotype you might have of NASCAR fans. Real Truck Series fans outdo them all. A regular NASCAR car event looks like an NAACP convention compared to the gene pond from whence Truck Series fans hail. Equally homogeneous: the choice of vehicle that they drive to the stadium. That would be pickups.

TMS speakers blared alternative metal music while fifty-one thousand patrons found their seats. I don’t guess that many in the crowd have songs by Disturbed, Slipknot, or Mastodon on their iPods at home, but somehow the music is an appropriate prelude to thirty-five 700 horsepower 358 cu-in pushrod V8 engines screaming at full voice.

As second hand cigarette smoke wafted all about us, my host, a longtime Texas Motor Speedway season ticket holder, commented, “I know I need to lose a few pounds but in this crowd I feel skinny.” I don’t mean to disparage my fellow racing fans. They are what they are and proud of it. They’re knowledgeable of the sport and quite hospitable– that is unless your last name is Busch (Bush is okay). As in Kyle Busch, the most hated man in North Texas.

Busch is vilified as a dirty, nay evil, driver. Boos erupted as the man sporting a black cowboy hat was introduced. The NASCAR points leader was set to start in last position because he was a late driver change for the #51 Miccosukee Resorts truck. He was also in the midst of a very busy weekend, attempting to win a trifecta of races in three different classes at three different tracks on the same weekend. Pre-race gossip centered on the scandalous prediction that the bad boy had made before the race; that he would break into the top ten within the first fifty laps.

NASCAR Craftsman Truck Series pickups share little in common with the Chevy Silverado, Ford F-150, Dodge Ram and Toyota Tundra pickups that share their names. Sponsors such as Lumber Liquidators, Construction Corps, Power Stroke Diesel by International, Road Loans, and, my favorite, GunBroker.com, reflect the rural working class values. 

Pole position went to newcomer, Justin Marks. After the first dozen laps, five trucks withdrew due to mechanical problems. The race fell into a predictable rhythm: race for about twenty laps (until tires become worn), crash, pit under a caution flag, cleanup, lather, rinse, repeat.

Ron Hornaday Jr. in the #33 Camping World Chevrolet emerged early in what appeared to be the fasted truck in the field. True to his word, Kyle Busch made quick work of the rest of the field. By lap 55, Busch was in the number nine spot. From that point forward he seemed content to lurk between fifth and seventh place without pressing the leaders.  But every spectator knew where he was at all times and that he could surge to the top at will.

With eleven laps to go, Busch leapfrogged into second place. Tension built for an epic battle. Concerned fans held three fingers high with both hands in support of #33 Hornaday. This night good triumphed over evil. Hornaday’s car was just too fast; reaching the green-white-checkered flag 0.283 seconds ahead of Busch.

As for my son and me, we had a great time. And although our seats were nestled in the shade beneath the luxury boxes I think my neck turned a little bit red.

As GM’s FastLane and GMNext blogs have demonstrated, the U.S. automobile industry has fully embraced the concept of blogging– as press release. Toyota, of course, has entered the e-fray. Their Open Road blog may do little (as in nothing) to stretch the boundaries of Web 2.0-itude, but it offers the usual insight into the corporate culture from which it sprang. ToMoCo’s plugging the new Venza crossover, designed to fill the gaping hole in their lineup between the Camry, RAV4, Highlander, FJ Cruiser, 4Runner and Sienna. Into the depths we descend…

As you might expect, we keep close track of the search terms and key words that people use to get onto the Open Road.
You're shitting me.

You may be interested to learn that the Number 1 search word is "Venza."
If "Venza" is the number one search word bringing people to the Open Road blog, then you're not managing your website correctly. When people search for Venza, you should be sending them directly to the Venza microsite, not to the lame "Open Road Blog."

You remember Venza, right?
Honestly, I try not to. There are already plenty of crossovers out there.

It's a stylish car
Uh, if you say so. I'd go with "vehicle-ish vehicle." But we've already discussed the weird styling.

that was designed
by a monkey?

to capture the best characteristics of both the  roomy SUV and the efficient sedan.
Like a car, but with a hatch on the back. We could call it a "hatch back." Or maybe station wagon.

But the worst part about the Venza is that the exterior is bigger than it needed to be. A sedan, wagon, or hatch can be just as roomy as an SUV. It's the raised ride height that they have brought in from an SUV here, and they should be up front about it. There are benefits to it – SUVs can be easier to step into from the ground. But it also trades off a huge part of the efficiency, in size and weight.

Just sayin’…

We unveiled the Venza in January at the Detroit Auto Show, and we posted it here on Open  Road on January 15.
Please come Monday for the next meeting of History 204: Recent Toyota Marketing

You can go to our Jan. 15 post by clicking here.
You're on the Internet. You probably love five month-old news.

Now the real deal is coming in a few months, and since there's been so much interest,
Bullshit. This isn't the Camaro or the new Camry or a new Evo.

we wanted to provide a way for you to see the vehicle, and to learn more about it.
It's a public service, really. Thank you notes can be sent to: Toyota HQ, Snorefest, Ohio. 11101.

It's the Venza minisite at Toyota.com, which you can access by clicking here.
We did a press release a week or so ago, but why not plug it again?

What you'll find when you get there include, naturally, photos of the car.
I'd post them here, but then you wouldn't visit the microsite. Go to the microsite. It's like a site, but micro. As opposed to this site, which is not micro. Big site here. Plenty of space for pictures, like of the Venza. Oh crap.

But there's also an interview with its designer,
Nobody cares. Consumers don't give a crap about this. But hey, Toyota needed content to put on the microsite. Did you hear they have a microsite?

a list of specifications and features,
But not the gas mileage, which is the only reason this vehicle is significant. The whole point of the Venza is "crossover space, Camry mileage." So what's the mileage estimated to be? And what's the horsepower output and 0 – 60 time of the four-cylinder engine?

and a couple of interesting videos that detail the design process
Nobody cares. Consumers still don't give a crap about this.

and tell us some interesting stuff about the car's optional V6 engine.
Interesting stuff? Wow, that sounds amazing. I better rush over to the microsite. Microsite!

Oh and by the way, unless it's gas mileage or horsepower numbers, most consumers don't care. They began this blog post talking about how they're getting people from search engine results. You think those people are interested in the optional V6's variable valve timing?

There's also a place for you to sign up for updates on the vehicle,
Really? I love marketing mail. I want to hear more "interesting stuff."

which is set to make its sales debut later this year.
I'm sweating with excitement.

So go ahead, take a look.
I have permission? NICE! I'm going right now. Screw work.

Then tell us what you think.
We care. We're people people, damn it. Can't you people understand that?

Saturn is dead. Despite a thoroughly refreshed line-up– including a mild hybrid, a Lambda-dancing CUV, a sexy sports car and a cute ute– the brand can’t get wood. In fact, Saturn’s sales are the very definition of flaccid. Year-to-date, they fell 19.9 percent. In May, sales sank 32.7 percent. In this process of final dissolution, the once autonomous upstart GM brand has become an irrelevant Opel outpost. Saturn’s Spring Hill, Tennessee factory is now in Chevy’s hands. Plastic body panels and unique designs have been swapped for rebadged leftovers from the GM parts bin. Saturn’s slow homicide is more than a shame. It offers a discouraging glimpse into General Motors’ dysfunctional culture.

The Saturn brand was GM CEO Roger Smith’s $5b excellent adventure. Both internally and externally, GM sold its new brand dawning as the American automaker’s import fighter. And why not? The company’s homegrown initiatives to repel the import invasion– the Corvair, Vega, X- and J-cars, etc.– all flopped spectacularly. Equally important, Smith recognized the cultural paralysis within his own Empire. Something had to be done.

Saturn’s mission: drag GM kicking and screaming into the twenty-first century, the new era redefined by The General’s foreign competition. To do the deed, GM’s re-boot boasted all the hallmarks of the Toyota Production System– just-in-time inventory management, lean manufacturing methods, flexible job classifications– combined with plant automation that could eventually render the United Auto Workers irrelevant. In tandem with the California-based, joint NUMMI operation (with Toyota), Saturn would reinvent GM, if not the entire automotive business.

Smith singularly failed to cultivate the organizational buy-in necessary to implement the plan. Managers fond of rejecting anything remotely Japanese considered Saturn a parasite sucking resources from their pet projects. UAW leaders knew that Smith would use his beloved robots to sign their pink slips if given the chance.  Smith’s efforts to expand centralization and badge engineering among the existing divisions and his abrasive personality only deepened bureaucratic resentments.

Despite the acrimony, Saturn fulfilled its initial promises. Reviews were favorable. Buyer loyalty for the no-haggle proudly domestic car brand achieved cult-like status. But internal politics sealed the marque’s fate. Smith retired in 1990, just as Saturn’s first cars were launched.  Robert Stempel, Roger Smith’s loyal successor, resigned only two years later. As its champions disappeared, Saturn floundered no sooner than it had begun.

Saturn’s limited, aging lineup quickly stagnated. Sales peaked in 1994 at 286k units, well short of the 500k goal. In fact, 1993 was Saturn’s only profitable year.

Jack Smith became CEO following Stempel’s ouster.  Clearly no relation to Roger, the new Smith dismantled the trappings of his namesake’s regime. GM’s standby strategies favoring cost cutting and large, low R&D vehicles were restored. Smaller cars, sad aberrations best left to foreigners, would be obtained from overseas from marques such as Isuzu and Fiat. 

Current CEO Rick Wagoner continued Jack Smith’s agenda. Wagoner also peddled gas guzzlers, although this time to no avail, while completing the rogue Saturn’s dismemberment. If Jack Smith plunged in the knife, Rabid Rick twisted the blade.

Saturn really was “a different kind of company.” But resistance to change is a hallowed tradition within the GM family.

Peter Drucker, the father of management consulting, encountered GM’s insularity as early as 1946. His seminal study, Concept of the Corporation, extolled the automaker’s organizational successes, but advocated increased decentralization and empowerment of line workers. Drucker’s questioning of GM orthodoxy was considered blasphemy. Managers caught with the book were subject to termination. Then-Chairman Alfred Sloan was so incensed he later wrote his memoir specifically to rebut Drucker’s analysis.

Six decades later, little has changed. Success is perceived as an entitlement, deserved after decades of dominance. A not-invented-here mentality and superiority complex make meaningful change nearly impossible. Foreign rivals are still regarded with contempt, their tiny cars mocked as effete trinkets unsuitable to American tastes. Worker autonomy and equitable supplier relations, essential components of successful JIT lean production systems, are disdained for usurping management’s sacred duty of unilateral, top-down leadership.

From management’s perch above, the dismal sales of Aura, Outlook, and Astra confirm the fate of those who dare stray from the General’s path. Ironically, the dying legacy brands are adding to Opel West’s declining stature. Buick’s recent Chinese exploits and the baby boomer buzz of its Enclave crossover raise false hopes for the future of the Buick-Pontiac-GMC trifecta.

The upcoming redesigned 2010 Aura should deliver the knockout blow. GM intends to spoil that party by shackling the attractive Eurosedan with uninspired US-spec drivetrains. With their standalone stores and inadequate corporate support, Saturn’s dealers can expect to pay dearly for that mistake.

Sadly, the next Aura’s misfire will assure GM management of what it has believed all along: Americans don’t really want smaller cars. Caught within the quagmire of Michigan’s splendid isolation, Saturn never stood a chance.

There are two kinds of people: people who split the world into two kinds of people and people who don’t. I usually consider myself part of the latter group. However, after spending a few years with The Truth About Cars, I’ve become fascinated by the variety of opinions from readers who share so much in common. Type in anything to do with the Prius and watch the battle lines form. Last year, The Cambridge Strategy Center published some ideas that go a long way towards explaining why this website isn’t always unified, taken as gospel and/or followed like law. It seems there are two kinds of car people.

The Cambridge Strategy Center is a marketing/brand consultant think tank, serving clients as diverse as Coca Cola, Phillips and BMW (who embraced and set forth the Center’s ideas regarding car consumers).  Inspired by Jungian personality archetypes, the Center believes drivers are either ‘instrumentalists’ or ‘expressives.’

Instrumentalists believe cars should serve a variety of purposes: commuting, schlepping, joy riding, the works. In fact, the closer their car is to a Swiss Army knife, the better. 

Instrumentalists tend to name their cars, overlook windshield wipers that deploy with the high beams and believe that you can coax a car to start with a soothing voice. In general, instrumentalists want their car to be the kind of friend who helps you move on a Saturday, attracts the opposite sex and stays out of a ditch during a snow storm.

Expressives perceive their vehicles as [yet another] expression of their personalities. They are what they drive.

Expressives want a car that shows they are smart, rich, hip, practical and/or environmentally conscious.  Conversely, in a different form of expression, they might not give two puffs what you think.

Expressives like to drive. All driving is a form of competition, whether it’s racing the wannabe in the Honda Civic or owning the world’s most fuel efficient vehicle. The believe an automobile should do one thing and one thing well. Expressives want the best rock climber or dragster or delivery van.

The Caterham is extreme example of an Expressives’ ideal whip. Quick and harsh and so severally pruned for performance that only Jonny Lieberman might like it (and probably not even him). While any niche vehicle will illustrate the Instrumentalists’ desires, a Honda Insight or H1 also serve as excellent examples of their heart’s desire.

Both Instrumentalists and Expressive can care deeply about cars– for vastly different reasons. Their personal rating systems diverge, cross and curve like the streets of Boston. An instrumentalist might consider a Porsche Cayenne sublimely multi-functional; an expressive might contend that the same model is a waste of space and a brand betrayal. 

When it comes to the new car market, Instrumentalists rule. The preponderance of Camcordimas on American highways illustrates the point. By the numbers, these cars are almost identical. They’re also not far from the Malibu, LaCrosse, Galant, Aura and a host of others an Expressive would be too bored to list.

The entire SUV surge can also be explained by the preponderance of Instrumentalists. Sport and utility?  Both traits are severely compromised-– a Ford Explorer can't haul as much as an Econoline or traverse inner Greenland without some serious modification. It can ALMOST do everything, though. And that is the point of an instrumentalist’s instrument. 

For a car to appeal to both camps it must be useful for a number of tasks, and do at least one thing better than everything/anything else. Obviously, there aren't many cars that fall into this category. But any vehicle that does can attain both cult status (Expressives) and popular sales (Instrumentalists).  The Volkswagen Beetle, the early Toyota Corolla, a proper Land Rover, a genuine Jeep and, most recently, the Toyota Prius are the “real” crossovers.

A list like that just begs for debate. It has to, because everyone who comes to this site arrives with a different set of values. My guess is TTAC readers tend to be Expressives, though it’s not a black and white distinction. People are shades of gray. Most of us need to adapt pocket book to lifestyle to desire.  You can’t fit three kids in an Audi TT unless you’re very angry. In a Honda Pilot, the entrance ramp to the I-90 is simply no fun.

This would account for the large number of consumers who own two vastly different cars. RF’s Porsche Boxster S and Honda Odyssey make a strange, but entirely understandable pairing. How many “boring” sedans sit next to a Miata in the garage? Lots.

Personally, I don’t like to force the world into Venn diagrams. I lean different ways at different times. And I now know that many of the disagreements here stem from diverse values, not from the fact that one commentator is smarter than another. Present company excluded, of course.

I agree with TTAC reviewer Stephan Wilkinson : the new Nissan GT-R is the old Honda NSX. Once people actually start driving Nissan’s “everyday supercar”– as opposed to simply jumping on the hype bandwagon and bench racing numbers supplied by Nissan– they’ll appreciate the parallel. Although I'm still looking forward to my first hands-on experience with the GT-R, the reality of the car’s true nature and importance in automotive history is right under the fan-boys’ noses.

The GT-R allegedly 'outperforms' thoroughbred supercars at a fraction of the price. Yes, but what price? The sticker price, or the in-your-garage price? Considering the hype surrounding the car and the limited production numbers, it will be years before a single new $70k GT-R will be sold for under $100k. At the moment, comparing the Nissan to say, a Corvette Z06, obfuscates the truth. But what the [Green] Hell…

No small part of the current GT-R lovefest can be attributed to the car’s 7:38 Nürburgring lap time. As TTAC has pointed out, there are real questions about the Green Hellmobile’s qualifications for the title “second fastest production car around the ‘Ring.” The GT-R's suspension was modified from the current Japanese production model, supposedly to reflect the American and European spec. Supposedly. Will anyone get a chance to compare the fabled ‘Ring runner and a final production car? I doubt it.

Meanwhile, the YouTube video of the Nissan’s “historic run” clearly shows that the GT-R had a flying start. All other manufacturers testing at the ‘Ring use standing starts for published lap times. The video also proves that the car's lap time was not measured at the exact same location (start and stop). Take these two factors into account, and the 7:40 claim seems highly dubious.

The icing on the cake: GT-R chief engineer Kazutoshi Mizuno’s subsequent admission from that "We used cut slick tyres." If that doesn’t cancel their claim, nothing does.

In fact, a regular Corvette Z06 would probably beat the GT-R on the Nürburgring. When Road & Track tested the GT-R against the Z06 on a track much smaller than the ‘Ring, they concluded that the GT-R was fast in the corners, but they didn't shed a whole lot of light on how the GT-R performed on the straights. Although the ‘Ring has an enormous amount of corners, it also has some of the longest straight-aways in the world.

In Road & Track’s technical comparo, the GT-R was just as fast to 60mph as the Z06 (despite being less powerful). What many have over-looked is the trap speed at the end of the 1/4 mile. The Z06 is about seven mph faster than the GT-R. When you look at the graph that accompanies these numbers, the GT-R’s AWD system gave it a clear advantage– but only at the start. Applied to the Green Hell, the Z06 would outpace the GT-R on the straights.

The Z06’s fastest recorded lap time at the Nürburgring is 7:42.9 This lap was driven in 2005 by Jan Magnussen in 'muggy' conditions. Last year, Chevy revised the suspension on all Corvette models including the Z06. In theory, the new suspension and better weather conditions should be enough for a Z06 to equal or even better the Nissan GT-R's true time of +7:40. When you consider that the Z06 can achieve this time with a GM-standard standing start and production tires, it seems obvious that the GT-R is no match for the Z06 around the ring.

But what does it all mean? Well, not much actually. Every racetrack is different and some cars are suited to some tracks while others are not. The GT-R is suited to smaller tracks like the one R&T used, and the Z06 is suited to longer and faster ones like the ‘Ring.

So why did I bother ranting about this? Nissan has chosen to flaunt its Nürburgring lap times to show the world that their new, high-tech Nissan GT-R is the new bang-for-the-buck Alpha. But it’s not true. The cheaper Corvette Z06 is still the worlds best [unmodified] performance car bargain. What’s more, if the GT-R cannot handle a stock Z06, then how will it fare against the upcoming ZR1? Never mind the 'almighty' spec V model.

Given the GT-R’s looks and oft-reported lack of driving feel, there’s only one reason anyone would buy the uber-Nissan: to own the fastest thing on the road. In the corners, maybe. If you were committed enough to drive at 10/10ths (never mind how “easy” it is), you could probably blow-off a 911 or similar. Down the straights (the great American pastime), there are faster and cheaper choices– and that’s without exploring relatively inexpensive modifications.

In short, the GT-R is an awesome achievement, but Wilkinson’s right: it’s not all that. 

Union problems, soaring gas prices and a faltering economy made April the worst month for new vehicle sales since 1995. Continued production in the face of diminished demand helped maintain the manufacturer's cash flow, but it lead to the inevitable: swollen inventories. In other words, even as U.S. new car sales go down the toilet, the toilet's backing up. Fix the number 60 in your mind (the ideal number of days' supply for a new vehicle on a dealer's lot) and take a look at what's going down at your local automotive emporium.

You'd think GM's production "hiatus"– caused by the American Axle strike– would have reduced the General's truck inventory. Nope. The U.S. automaker ended April with a 109-day supply of trucks, up from the previous month's 98-day supply. The Buick Enclave's and GMC Acadia's low dealer stock (38 and 54 days, respectively) couldn't offset lingering Chevrolet Silverados (122-day supply), Tahoes (125 days), GMC Sierras (122 days) and Yukons (188 days). All four trucks were more abundant than they were during the month previous.

Ford's truck inventory wasn't quite as scarifying. A 39-day supply of Rangers and a 54-day supply of Escapes helped lower their truck inventory average to 80 days by month's end. Meanwhile, the F-Series' dealer inventory jumped from March's 97-day end-of-month supply, to April's 129 days. The Expedition's inventory rose from 67 to 98 days. Even though it's one of Ford's best-selling models, the Edge went from a 69-day to a 107-day supply. 

With Chrysler's plummeting sales, it's no surprise their inventory's up. The lame duck Dodge Ram's inventory jumped from 99 days to a 109-day supply. Dealer stock of the unloved Dodge Dakota ballooned from 73 to 110 days' supply. After starting with an 81-day supply, Jeep ended up with a 102-day stock of Grand Cherokees. The new Dodge Journey was ChryCo's sole bright spot. The CUV started April with a 130-day supply and ended with 57 days' supply on the lots. 

Of the two truck-heavy transplants Toyota fared best. They don't list inventory by model, but they finished the month with a 52-day supply of trucks, up only two days from the end of March. Nissan's numbers represent the nadir. Murano (76 days) and Rogue (82 days) clogged dealers lots the least, while Armada (203 days), Titan (232), Xterra (198) and Frontier (137) were super-abundant. 

No question: 2008 is the year of the car. As consumers left ten-foot pole marks on high profit trucks and SUVs, car inventory numbers were their best in months. The Chevrolet Aveo dropped to 65 days (from March's 113) and Cobalt finished the month at the 52-day level (down from 75). GM dealers started April with a 37-day supply of Malibus; they ended it with a 36-day supply. A 21-day supply of Impala turned into a 22-day inventory. The only real dogs were the Pontiac G6– which went from a 43- to 64-day supply–and Saab. GM doesn't break out their Swedish division's individual models, but the ostensibly Swedish brand started the month with a 77-day supply, and ended at 151.

As you might expect, Ford dealers are moving more small cars than big. The Taurus started the month at 60 days' supply and finished at 73 days. Volvo ended the month with an 88-day supply of 70-series, up 11 days.  FoMoCo stores' supply of Fusions dropped four days, starting at 52 and ending with 48. Their stock of Focus dropped by 11 days, to 43.  The 30-series Volvo ended April at a 94-day level, down from 120 days.

April was a mixed bag for Chrysler. The 300 went from a 61-day supply to 82 days, the Sebring shot from 42 days to 69 ,and Avenger finished at the 51-day level after starting at 35 days. On the other hand, Caliber's inventory dropped from 48 days to 39, Charger went from 58 days to 41 and the reportedly doomed PT Cruiser ended the month at 38 days' supply, after starting at the 50-day level. 

Toyota began April with a 51-day supply of cars and finished up with a 53-day supply overall. Nissan began with the ideal 60-day level of Sentras and ended  with a 59-day supply. Versa's inventory dropped from 53 days to 51. Altima, however, went the wrong direction, finishing at the 71-day level after starting at 48 days. Honda had a 67-day supply of Accord on the lots on April 1; on April 30 they had a 72-day supply. Civic inventory dropped from 52 days to 48 and Fit went from 27 days to 22.

The manufacturers are taking steps to adjust these inventory numbers- GM has even stopped filling orders from dealers for many of their large trucks. However, with sales down it could take months to get things leveled out. In the meantime, look for increased fleet sales and bigger incentives as The Big 2.8 and Nissan do whatever they can to clear the lots. Also look for Toyota to ramp up incentive spending gradually, balancing the need to move the metal against creating incentive-dependent customers.  

One year ago [Chrysler Suicide Watch 12] I opined that Jeep was morphing from the world's most uniquely-American brand into a schizophrenic abyss of muddled models. Of course, this analysis hardly required the keen insights of branding guru Al Reis.  Jeep had just introduced the unconvincing Compass and platform partner Patriot to the market. And they were preparing to launch a re-skinned Jeep Liberty.  The Liberty was the reigning best selling small SUV on the market. So one year later, how has the brand progressed?  As a Jeep owner and acolyte of [what's left of] the brand, I'm sorry to say that Jeep's crisis is far deeper than before.

After the "merger of equals" between Daimler and Chrysler, the Germans correctly surmised the Jeep brand's importance to ChryCo's overall health. When Jeep did well, Chrysler did well. When Jeep sales flagged, Chrysler tanked. The bellwether brand was ripe for expansion; it only had three models (Wrangler, Grand Cherokee and Liberty/Cherokee).  So the good Doktor wrote a prescription for more models.  From a business standpoint, it fit the "feed your successes, starve your failures" template to a T.

Und now…

The good news: Jeep sales are relatively flat in a sinking market, averaging 473,840 from 1996 through 2007. The bad news: the numbers are flat (Jeep sold just 475,237 vehicles in 2007). Remember: all three of Jeep's core models have been completely revamped in the last three years, and three new models (Commander, Compass, and Patriot) darken dealership doors. Jeep should be a lot further ahead.

In fact, call it "Are We Not Jeep?" Devolution is everywhere. The once ubiquitous Grand Cherokee has fallen the farthest. In 1999, Jeep sold more than 300k units. In 2007, they sold less than half of that total (120,937). The result seem quite so bad if you add in Grand Cherokee's platform-sharing sibling, the "we swear we're going to kill it" Commander. But even so, the platform is losing ground at an alarming rate.

Meanwhile, Liberty sales plummeted from a high of 171,212 in 2002 to just 92,105 last year. In 2007, Cherokee/Liberty sales fell below 100k for the first time in the last eleven years.

Much digital ink has been spilled deriding the Commander and its woeful sales. But it's the Jeep Compass that really needs to go. 

Jeep managed to sell more than twice as many Commanders during its first full year of production (88,497 in 2006) as the Compass did in it first full year (39,491 in 2007). Even if the Compass has a huge profit margin, one has to wonder why Cerberus would continue producing a chunky little Jeep with all the appeal of Hillary Clinton in a tankini.

Sales numbers for 2007 indicate nothing conclusive about the Patriot, which sold 40,434 units in a partial year. The Patriot at least looks like a credible Jeep and gets excellent gas mileage– compared to the rest of the Jeep lineup. It's a keeper, even though it's not nearly as good as it needs to be to compete with the likes of the RAV4 and CRV.

The only clear hero in the lineup is (may we have a military drum roll please)… the Wrangler. The jeepiest of Jeeps is shouldering the load of the brand-diluting models that Daimler, Chrysler and Cerberus leadership have in their infinite non-wisdom devised. Sales of this crude gas hog jumped 33 percent in 2007 to nearly 120k units. That's more than any other Jeep model except the Grand Cherokee (which barely edged it out, so to speak). Wrangler's year-over-year increase (39K) almost matched the number of Patriots sold during ‘07.

Clearly, the suburbanization of the Jeep brand has been an utter failure. Daimler failed to recognize that Jeep is not a plastichrome badge on a car. 

Jeep is an outdoorsman's lifestyle.  Jeep owners want to feel the wind in their hair– even if they don't have any– and the roar deafens them at highway speeds. They would rather have more torque than better fuel efficiency. They aren't as concerned with zero to sixty and quarter mile times as they are with ground clearance and break-over angles. They want the ability to drive anywhere; going around an oval doesn't much interest them. Jeep owners are participatory hands-on lovers of the untamed world.  They want to be in nature with the top down and doors off.

Even if they don't. Either way, Jeep's customers are most decided NOT bobblehead dolls chillin' in the ‘hood. Has Cerberus figured this out? If only. Consider this: the automaker quietly and unceremoniously scuttled the annual Camp Jeep for 2008. At a single stroke, the automaker betrayed the brand faithful and signaled to the keepers of the flame that said blaze flickers on the brink of extinction. America's Ferrari is an endangered species.

There’s an often-repeated statistic: U.S. Buick dealers sell just four cars per dealer per month. It’s true, but c’mon; that was last year’s totals. In March, Buick sales slipped to three cars per dealer. Thanks to TTAC’s Frank Williams, I’ve had a chance to examine the exact dealer and sales stats for the Beyond Precision people. Having deconstructed the data, I can declare that this seemingly absurd three cars a month number, while strictly true, isn’t the whole story. The “whole story” is much worse.   

First, to be strictly accurate, the 36 cars per Buick dealer per year stat doesn’t include trucks. Add-in Enclave sales and you’re up to 60 sales per dealer per year. (Only Ferrari, Isuzu and Rolls have lower averages.) You may wonder how any car dealer could survive on such meager portions. The short answer is, they don’t. GM’s 90 “exclusive” Buick dealers sell quite a bit more than a car per week. The problem isn’t these Buick stores; it’s the “dualed” and “tripled” Buick franchises; 29 of them for every solo dealer.   

To help you wrap you mind around those numbers, there are over 2700 places where you could, if pressed, buy a Buick. That “coverage” includes as many franchises as Toyota, Lexus, Honda and Acura. Combined. All to support numbers slightly larger than sales of Honda’s Odyssey. The scariest part ISN’T that the average Buick dealer sells a car a week (probably less). The bigger problem is that these franchises can survive selling so few.   

One of the less-mentioned side effects of The Big 2.8’s massive brand spread and bloated dealer networks: “franchise bloat.” GM, Ford, Chrysler have about 6500, 4000 and 3500 “dealerships” (i.e. buildings) respectively. Toyota/Lexus and Honda/Acura have about 1100 stores each; Nissan/Infiniti 1000. Now, let's talk franchises. Detroit automakers have 13,000, 6800 and 8300 franchises. Toyota clock in at about 1500; Honda and Nissan have about 1200 franchisees.    

Franchise glut means dealers are frequently bidding against each other on price, and fighting for product allocation. But there’s an even bigger downside for Detroit: multiple franchises give dealers greater leverage. A dealer receiving cars from two or more streams can concentrate their efforts where it’s most profitable (e.g. on whichever line is getting a marketing boost at the moment). The languishing brands can be milked for limited-allocation cars until a particular model catches fire. Or, in Buick’s case, not.

While it's been argued that single-line dealers lead to too many models spread across too many price points, at least a single-line car dealer can’t play Peter off against Paul at similar price points. In other words, they’re not hurting one brand by helping another.

But the single biggest problem caused by franchise bloat down Detroit way is that it’s made killing brands more difficult, rather than easier.

In theory, bringing in additional lines reduces the damages dealers can claim when you kill a given brand (Chrysler did this when axing Eagle). Yes, but– lopping off brands does nothing to trim the bloated number of dealers. A two or three-headed dealer may not be a money machine, but there is no real way to “starve” it.  

So, when you get right down to it, the real obstacle to killing Buick isn’t those 90 stand-alone dealers. They can be bought. It’s the 2600 other guys who will still be selling GM cars when the smoke clears.

Having to pay off 2700 dealers to reduce the “footprint” by less than 100 wouldn’t work even when GM was flush. Ford is in better shape; they at least only have effectively two brands (Mercury does not exist away from Lincoln or Ford). Of course, that makes terminating Mercury completely useless from the “reducing dealers” standpoint. And pity poor Chrysler/Cerberus. It really is a three-headed dog; some 75 percent of their dealerships are multi-branded, often offering all three marques.

Hang on. If franchise glut is such an enormous problem for Detroit, why is GM consolidating their dealer networks (Buick/ Pontiac/GMC; Cadillac/Saab/Hummer)? Hell if I know. The new multi-franchise system leaves GM with the same dealer glut as before. And now, if they really want to cut Buick dealers, they’ll have to kill Buick AND Pontiac AND GMC together.

In the meantime GM will have four competing “mainstream” distribution channels (including Chevy and Saturn). Well, at least sending one or two of these mega-franchises into that long good night is [theoretically] doable. Ford and Chrysler lack even that option.

And so three-cars-per-dealer Buick is, at the end of the day, a zombie. And now that GM (and Chrysler) doesn’t have the multiple billions needed to make these problems go away, there’s only way out of this entire over-dealered, over-franchised mess. But will anyone buy a car from a bankrupt automaker? From Buick NA’s perspective, it doesn’t really matter anymore. Now that’s scary.