You can argue who makes the best car in any given segment or genre ‘til you’re blue in the face. As for who has the best auto ads, there isn’t much debate: Volkswagen. Once again, the Boys from Wolfsburg have commissioned another Clio candidate. This time ‘round, it’s a talking (if ironically immobile) Bug named Max, starring as a talk show host. [Max ad not shown here; above is a vintage VW ad] The new ad, devised by Miami’s Crispin Porter + Bogusky agency, sums-up the automaker’s gestalt even better than “de-pimp my ride” and “Fast"– and not in a good way.

The first thing that stands out about the new ad: the fact that the host is a Beetle. Roots, rock, reggae be damned. At the risk of stating the obvious, the Beetle isn’t even made anymore. Not here. Not Mexico. Nowhere. CP+G know what they’re doing though; in her more lucid moments, even Lindsay Lohan recognizes that old thing. The Bug’s iconic shape is an instant attention-getter.

Yes, but, to what end? Why would VW want to remind its U.S. customers of a car whose looks, personality and market positioning better suit American car buyers than anything VW offers them today? Lest we forget, there’s a NEW Beetle out there, somewhere. What’s old is new and what’s new doesn’t count? Strange logic.

Anyway, if you think about it, despite the backup band, Max really isn’t really a talk show host. On the subconscious level, Max is a therapist. You know, one-on-one chat. German accent. Piercing questions. Sometimes a cigar is just a cigar– and sometimes it isn’t.

The funny thing is, if anyone should be “on the couch,” it’s the Beetle. Here ist ein volks wagen designed by a budding sports car maker (who ended-up building tanks and ass-engined hedge explorers) at the request of a failed artist who never learned to drive or met a country he didn’t want to invade.

Contemplating VW’s gleaming representation of past glory, the new ad raises enough uncomfortable questions to keep Dr. Phil busy for, oh, two episodes or so. For starters, how does Max feel about the fact that his children and grandchildren have lost their way? With some notable exceptions (e.g. the European Golf), grandpa’s progeny have misplaced and/or abandoned their ancestor’s world-beating strengths (not to say polluted their genetic advantage): reliability and frugality.

Nowhere is this more true than in the U.S. For much of the 1960s, the VW Beetle WAS the American import market. None of the Bug variants were fast. Few were pretty. Their handling would have been a scandal (if such things had been scandalous) and they had ergonomic “issues.” (One ad featured a snowplow driver driving his beetle to work; off-camera, he’d lit himself on fire to keep warm.) But Beetles were cheap to buy and even cheaper to keep running. 

And then Toyota and Datsun proved they could build appliances every bit as well using engineering that wasn’t 25 years old. Cute couldn’t keep the Beetle afloat forever (so to speak). The Bug’s children were in and out of rehab for years, guzzling gas, lost, never really finding a purpose in life. 

Dr. Phil would also ask Max how he feels about his parent’s move stateside. While Max might give Mama props for being the first U.S. transplant, the [not a real] Doctor would confront him with the fact that the relocation was an unmitigated disaster. In fact, a discussion of the quality of the resulting products might be better suited for the Jerry Springer show; at the risk of offending the good people of Pennsylvania, we’re talking total trailer trash.

Rabbit production at the Westmoreland factory was so god damn awful– and expensive– that the resulting products single-handedly destroyed VW’s U.S. reputation. Mama? She eventually fled for Brazil. So, Max, how does THAT make you feel?

Given the Bug’s world domination, getting Max out of denial is hardly a foregone conclusion. But we could arm Phil with some stats. VW sells 200k cars per year stateside. They’re now aiming to sell 1m. How? By reintroducing the Phaeton? Isn’t it time Max strolled into the boardroom, stare his inheritors straight in the eye and, Mommie Dearest-style, said “Don’t fuck with me fellas”?

Clearly, VW’s not-so-mad Max ad campaign is a huge mistake. It reminds people of what VW should be, but isn't. Other than making a car that doesn’t break and providing dealerships that don’t piss on customers from a great height, the ad highlights the fact that VW still doesn’t know where/what they want to be in the US market.

Until Volkswagen returns to the characteristics that made it great in the first place, until they get reality squared away with their image, they will continue to fail in America. It’s one thing to celebrate the past. It’s another to do so while ignoring its lessons. 

One of the things I love about this site is the consistent welcome we all have to disagree with founding father, Robert Farago. He knows the truth about cars doesn’t come from pronouncements, but from productive exchange. Which is my slightly weasly way of saying: What’s with all this focus on brand dilution? Is it really the cancer of the car industry? Or, is it as misunderstood as Paris Hilton’s state of celebrity?

Robert’s contention-– shared like a bottle of Boone’s Farm with every market manager under the bridge-– is that a company’s brand is precious. Luxury car makers shouldn’t build dump trucks; sports car makers shouldn’t make minivans. That type of thing.

And it’s almost true. As Paris Hilton will tell you, the brand is the thing. She doesn’t sing or act or speak well enough to be famous for anything other than being famous. That’s her schtick and she schticks to it. Her branding-– as a famous, naughty party girl-– is so powerful she needs nothing else.

Cadillac used to be that way. Now it illustrates the danger in brand devolution. If people think you’re one thing-– a fat, luxurious car-– and you turn out to be another-– a thin sports sedan car with lots of extra leather-– you quickly become nothing. Jaguar’s spilling down-market gave us the X-Type: an OK sedan in a sea of OK sedans. Very un-Jaguar. Volkswagen’s Phaeton tried the reverse, backed out the door and left everyone asking ‘where’s the people’s car?’

Porsche teeters at a precarious point in its history. The Cayenne is simply not a sports car; it has no business sharing a bunkhouse with 911s. The more un-sporty things Porsche builds, the more it runs the risk of losing its premier sports car mantle. If that’s the brand. I think the Porsche brand is more slippery than a 962.

Porsche, the brand, is built with superb engineering.  In fact, that is what it is. Superb design and execution that happens to result in some really cool cars. It also happens to result in a really cool SUV, probably a cool sedan, soon. If Porsche decided to start making tractors again, I bet they’d be cool too. Because that’s what they do – make cool things, mostly sports cars.

Porsche Design Group (a majority held subsidiary of Porsche AG) comes close to proving the point. They’ve designed, among other things, faucets, hard-drives, forklifts and subway trains. Very unsporting. The forklift should be about as far from a Carrera as you can get, except it’s not. Their forklift is cool and clever, so the whole brand earns a pass.

Honda is in the same personal watercraft. They make line trimmers and the S2000. Seriously, if Weedwacker built a $30,000 sports car could you ever be persuaded to open you checkbook? Moving from tractors to pumps to Formula One cars is quite an accomplishment, and probably couldn’t be done if Honda was known for any one of those things. They are known for competent engineering, regardless of what they engineer. 

The design-engineering brand is more valuable than a manufacture’s brand. It keeps a company from being a one-trick pony carmaker. If the market for muscular rear-wheelers fades, the engineering-designer can race off in a different direction. SUVs replace eco-boxes, eco-boxes replace SUVs.

So why doesn’t every company that makes things try to position themselves as engineering-design gurus?

That won’t work for everyone, according to Wendi R W McGowan of Wendistry, branding and marketing consultants. “A brand is a believable connection with the consumer.” It is not as simple as a crusty stamp on the side of a cow. A brand is an emotional attachment between company and customer.  Porsche and Honda have found one way of forging that bond. Other marks have found other ways. For example, no one buys a Ferrari because they expect it to be the most reliable car for the money.  

Brand dilution, then, is not so much a disease as a vector. McGowan states. “Chevy’s not building on what they have.”

As a rusty example of old Detroit, she singles out Chevrolet. The company has the Corvette and a popular line of trucks, but fails to build on the spirit, excitement and loyalty those products have produced. Once those emotional attachments have been made, a company needs to reinforce them. Let them grow. Detroit has a tendency to push products and marketing schemes down, as opposed to letting ideas develop from grassroots.

As long as a brand maintains its connection with you, it will be healthy. A good brand isn’t selling you a product, it’s taking an invitation into your life. Kind of like this site. It wouldn’t bother me one bit if Farago added The Truth About Dryers. I’d come up with a couple of stories.

In February, lovers old and new turn their attention to matters of the heart. No 'bout a doubt it: automakers weren't feeling the love. Overall U.S. light vehicle sales dropped 6.3 percent in February and 5.3 percent for the year.  With precious few exceptions, sales were down across the board. And this time, the usually impervious foreign nameplates and transplants felt the pain along with their Detroit counterparts (although not quite as badly). Let's take a closer look at the love's labor lost.

Pickup Trucks

As you'd expect, as gas topped $3 a gallon, pickup truck sales tanked.  Chevy's Silverado plummeted 24.9 percent compared to last February, down 17.4 percent year-to-date. Ford's F-Series didn't suffer quite as badly, losing just 4.9 percent from last February and 6.5 percent on the year. The Dodge Ram finished the month 20.9 percent below February ‘07, dropping 19.7 percent for the year so far. Toyota's Tundra showed a 48.9 percent gain on last February. The Texas-built  pickup gained 65.6 percent on the year. However, ToMoCo was introducing the new model this time last year; sales were low for the first few months.

Passenger Cars

Chevrolet must still be having production problems with their "everyone wants one" Malibu. The new 'Bu only managed to increase sales 6.5 percent over the old model's February sales (a good January pushed sales up 29.1 percent year to date). Ford's Fusion recovered from a slow start in January, finishing February 12.1 percent higher than last year, with year-to-date sales up 1.2 percent. Chrysler's 300 continues its nosedive, down 11.6  percent in February and 10.8 percent for the year. The Toyota Camry was one of the few cars showing sales growth. The perennial sales champ finished the month up 8.6 percent, 4.6 percent ahead of last year.  The newly-renlarged Honda Accord isn't doing so well. Sales are down nine percent for the month and eight percent for the year.

Truck-Based SUVs

Truck-based SUVs… ouch. The Chevy Tahoe continues selling at sub-2007 levels, dropping 26.4 percent in February and 20.4 percent year-to-date. Sales of FoMoCo's Explorer showed roughly the same performance, declining 27.1 percent from the month last year and 23.7 percent so far this year. The Dodge Boys might want to put a bullet in the Durango's head before it embarrasses them any more; model sales sank by 39.5 percent for the month and 35.8 percent drop for the year. The recently reviewed Toyota Sequoia sales increased 13.2 percent for February and 14.3 percent for the year. But like the Tundra, the numbers compare the new model to the old– and sales volumes are so low that we're only talking about a difference of 300 trucks in February.

CUVs

Although overall crossover sales were down from January, GMC's Acadia was still up 38.5 percent for the month and 122.1 percent for the year. The Edge was Ford's bright spot, racking up a 45.9 percent increase over last February and increasing sales for the year by 66.1 percent. The restyled Toyota Highlander jumped 12.2 percent for the month and 16 percent for the year. The old-style Honda Pilot did even better, growing 24.3 percent compared to last February and  7.7 percent compared to last year.

Prius

Even though gas prices went up in February, Prius sales went down 10.9 percent.  They're still up 8.5 percent overall above last year so far, but sales were so robust in the first half of 2007 they may continue at sub-'07 levels for the next few months.  At least until gas starts climbing to the $4/gallon mark.

Total Sales

GM's turnaround must have turned around. After blowing their horn over a black January, GM turned in a Valentine-red February. They were down 12.9 percent from February of last year. So far this year, the General's down six percent from last year. Ford didn't do quite as badly, turning in a 6.7 percent drop for the month and a 5.5 percent decrease for the year .  Chrysler performed about as expected sliding 14 percent in February and 13.1 percent year to date. Even normally bullet-proof Toyota suffered in February, down 2.8 percent for the month, trailing last year by 2.4 percent. Thanks to CR-V and Civic sales, Honda managed to show growth in February, up 4.9 percent in 2008. HoMoCo finished 1.5 percent ahead year to date.

The Future

Even as new versions of the F-Series and Ram warm up in the bullpen, it doesn't look like anything will pull the truck market out of its tailspin. The CUV market will continue to grow, as Honda brings on its new Pilot and Chevy steals market share from the other Lambdas with the Traverse. In the passenger car market, attention's shifting to small cars– where Ford and Chrysler are woefully lacking and GM offers the the Korean Aveo. Add in GM's and Chrysler's supplier problems and Ford's financial difficulties and the future looks pretty bleak they're pulling the shades. Can any of them tame the shrew haunting the U.S. new car market? Watch this space.

If you’ve ever stood at a Swiss platform and watched a train pull in within seconds of its ETA, you’ll know that this small country knows how to get shit done. The Geneva auto show is no exception. Its precise schedule and small scale make it the crown jewel of car confabs. This year, there was enough greenwashing to scrub the Amazon clean. Where once style, performance and a beautiful babe made show cars sexy, halo cars must now wear a badge proclaiming “Saving the planet one car at a time.” As if.

Of course, a hypocritical herd instinct does not an exciting auto show make. How many plug-in diesel-electric belt-assisted hydrogen-fuel-cell regenerative-braking lithium-ion dual-fuel unrealistically aerodynamic hybrid alibimobiles planned for 2011 were there? Lots. Suffice it to say, GM introduced its fifth hybrid powerplant at the Geneva show, a marginal improvement that’s testimony to the intensity of the PR war waged in the name your home planet.

And let's not talk about non-news such as the Audi A4 Avant. Or the Toyota Urban Cruiser (wasn't there an Al Pacino movie by that name?) which leaps to the top of the ten most boring Toyotas ever made in the history of the world, ever.

Meanwhile, the Tiny-Yet-Sexy niche continues to, uh, grow. We’re talking (comparatively) expensive little things that intend to make you feel good about yourself, the environment and parking (not necessarily in that order). As Paul Niedermeyer pointed out, this is the small car future that the MINI started. Toyota's iQ could take it mainstream. Priced higher than the larger Aygo, it looks great and sips fuel.

Another important trend: the Almost-Disposably-Cheap-Yet-Quite-Crap car. Mr. Tata brought the Nano to Geveva in his hand luggage. It’s an attractive appliance, a sympathetic amoeba on roller skates. Yes it has 12" wheels, but the original Mini had ten-inchers. The €9k-ish Dacia Sandero is of the same ilk. Taking purchasing power parity into account, that’s about $8k net, list. The Nissan Pivo is a bit more expensive and a lot more sci-fi, but if this is the future, include me in.

If you need another sign that Renault-Nissan is bursting with self-confidence, how about the Euro-Zone launch of their American (shhh) Infiniti brand? The FX50 is quite the looker. It’s not the segment buster they need, perhaps, but the FX is a lot more distinctive that the G-cars that’ll battle Bimmer’s best.

The stubby/cheeky Audi A3 Cabrio lives somewhere between laughable and laudable. The Cadillac CTS Coupe may not be the brand builder traditionalists seek (V16?), but it gets nothing but props here. It’s Caddy’s best chance abroad. 

I liked the suicide doors on the future Opel Meriva– it's a good sign when a company devotes itself to a topic as prosaic as entry and egress. Surprisingly, the Passat CC is a fantastic improvement on the conventional, frumpy Passat. Honda displayed its handsome, competent Euro-Accords on a blood-red floor. The setting was dramatic, but unnecessary– unless you’re a big fan of The Shining.

Kia's Soul concepts, which intend to emulate Scion in being young & groovy, is interesting, but not quite convincing. The Soul Burner: I thought that was something you ordered at the Indian-food takeaway. The Soul Diva: a bit Paris-Hiltonny, no? The Soul Searcher: this one I liked. Rural and tough-looking, but not macho or in-your-face. Sorta kinda like the Cévennes Turbo-CNG: a futuristic eco-car which rips off the Porsche 356? And the Magna-Steyr Hybrid is the way I like off-road vehicles: less fat, more fun!

BMW showed its X6. It looks a lot less ugly in the metal than on paper, but it still makes about as much sense as broken cuckoo clock. The Skoda Superb is a lot more sensible, although BMW called and they want their Hoffmeister kink back. Volkswagen should consider taking back– and Americans should stop lusting after– the new Portuguese-built Scirocco. It’s a lumpen, fat, graceless, derivative car: an amalgam of Alfa Brera, VW Passat and whatnot.

BYD– isn't that how they pronounce "bird" in the Bronx? In this case, it stands for Build Your Dreams, Chinese style. Of course, Geneva was full of catchphrases. Maserati had "Excellence through Passion." Bentley left the caps lock on, promising "RELAXING EXILARATION," "DRIVEN BY YOUR DESIRES" and "THE SEDUCTION OF YOUR SENSES.”

VW officially unveiled their new global mantra: Engineered Like No Other Porsche in the World. No, wait. It was “Das Auto” or “the car.” This must piss-off Pontiac, who now insists that Pontiac is Car. (This reminds of Garp’s father in The World According to Garp, who lost letters as he lost his life.) No matter what you call it, the main message coming out of Geneva is that small is beautiful. And there’s nothing wrong with that.

Click here to view Pixamo gallery of the Geneva Auto Show 

The automotive press is obsessed with new cars, and the automakers know it. As The Big 2.8 flounder on the shoals of their broken branding, badge engineering and bloated dealer networks, they highlight the latest bright shiny object as proof of future salvation. Jerry Flint: “The best news from the domestic industry is that the product, particularly at GM but also at Ford, is getting better.” Meanwhile, car hacks are ignoring the fact that the domestics' business is collapsing, as startling new data from J.D. Power illustrates.

For the first time ever, J.D.’s mob has combined customer loyalty and conquest survey data to create their “Customer Ratio” index. Speaking at the recent National Automotive Dealers Association (NADA) conference, J.D. Power's executive director of automotive research said a car brand must strike an ideal balance between customer loyalty (existing owners re-upping) and new-to-the-brand business. “When below-average loyalty makes up more than half your sales,” Steve Witten pronounced. “That's a brand in trouble." 

According to the J.D. Power, Ford's in trouble. Roughly 53 percent of Ford owners buy another Blue Oval model. On the face of it, that's a good thing. But it's a bad thing. These loyal customers represent 72 percent of the brand's retail sales. Translation: FioMoCo is losing twice as many existing Ford owners to rival brands as it’s winning from rival brands. Not to put too fine a point on it, the Ford brand is dying.

According to the survey, Chrysler, Jeep and Dodge also show “weak loyalty numbers.” What’s worse: Chrysler's three brands "mostly conquest sales from each other, while leaching sales to non-Chrysler brands.” Ominously, but not unexpectedly, “something similar is happening at Mercury, Pontiac and Buick.”

Only 13 percent of Saturn’s sales come from customers leaving transplant brands (Toyota, Honda, etc.). The majority of Saturn's new customers come from Chevrolet, Pontiac and Ford. And when Saturn owners leave the brand for other makes, they tend to migrate to Toyota, Honda and Nissan. As Witten remarked at the conference, the data shows that Saturn has utterly failed to fulfill its original remit as an "import fighter"

The study also reveals that GM and Ford’s so-called luxury brands are failing to compete with the German and Japanese luxury marques. Cadillac, Saab and Volvo are not even in the same ballpark as Mercedes, BWM, Audi and Lexus. Caddy, Saab and Volvo are gaining most of their customers from– and losing most of their business to– Toyota, Honda, Ford and Chevrolet. 

As this index demonstrates, Detroit’s biggest and most lethal mistake has been its chronic neglect of its branding. While Motown makes a number of terrific new cars, while the majority of these machines are now mechanically reliable, Ford, GM, and Chrysler have done nothing to protect, resurrect, redefine and "save" their brands. They continue to piss on whatever brand equity remains in their stable. When GM Car Czar Bob Lutz infamously described Pontiac and Buick as "damaged brands," he was guilty of epic understatement.  Virtually all of Detroit's car brands are terminally ill. 

Hummer is the exception that proves the rule. Last year, Hummer sold 55,986 new vehicles, down 21.7 percent from the year previous. The rising price of gas, Hummer’s negative image amongst the chattering classes and the contraction of the SUV market don’t bode well for the brand’s future. BUT J.D. Power says existing customers account for just 16 percent of Hummer's total sales. In other words, despite falling sales, Hummer is drawing in a large number (at least percentage wise) of new customers. In fact, of all GM’s eight brands, Hummer is the strongest.

Well of course it is. Hummer sells a limited line of vehicles that are all instantly recognizable as family members that all do roughly the same thing in roughly the same way. Their national advertising may be a joke to anyone with an environmental conscience, but Hummer's branding is focused, coherent and memorable. You could even say that the environmental blow-back has helped Hummer, setting it apart from the increasing diluted (but still relatively strong) Jeep brand.

Contrast Hummer’s tightly-gathered product line and brand focus with Saab, Pontiac, Buick, Chevrolet, Saturn, GMC, Cadillac, Ford, Lincoln, Mercury, Chrysler and Dodge.

If you really want a fright, contrast those weak, customer-leaking and fraternal brand-swapping car companies with Toyota. According to J.D., Toyota is “bringing in nearly three times as many new customers as it has old ones staying put. Toyota's 65 percent loyalty rating is the industry's best, yet represents just 41 percent of total sales. Its conquest sales are huge. Honda shows similar strong numbers.”

TTAC, the general public and the millions of people dependent on The Big 2.8’s health are not privy to the full data provided by J.D. Powers’ Customer Ratio survey. But even this snapshot provides a horrifying glimpse of a domestic industry in terminal decline. Never mind cost cutting. Why hasn’t Detroit fixed its broken brands? 

Or not. Despite all the noise about a Chrysler – Chery hook-up, despite Chinese manufacturers' presence at the North American International Auto Show, we have yet to see a single Chinese-built (let alone designed) vehicle here in the U.S. So, are they really coming? The short answer is yes, some of them, eventually. But not for quite a while yet.

The number one reason we haven’t see Chinese (or Indian for that matter) cars on these shores: home markets. Right now, the Chinese market is growing at a rabid clip. Local automakers are more concerned with increasing production and filling newly emerging gaps and niches than sinking scarce foreign currency into expensive export drives.

Before Chinese automakers look east (or south or west), their home market must reach a saturation point– a pause that may take a decade or more to realize. Sure, they may dip their toes in low-cost developing nations, but the real action is at home. Taking their eyes off the domestic market is a one-way ticket to marginalization.

This brings us to point two: there are a LOT of Chinese automakers and just one party running the country.  

You might think this could lead to issues of favoritism, once some of the makers make the leap abroad. That ain’t the half of it. Being a single-party government does not mean that the government has only one thought process (look at Chicago). Any Chinese maker looking to dive into the U.S. market must trust that China’s government officials will go to bat for them in international trade negotiations.  At the same time, the automaker has to worry about all the officials they DON’T own cutting them off at the knees (or worse).

There’s an even bigger problem with cracking the American market: the sheer scale of the undertaking.

To capture American market share, a carmaker needs dealers, parts, lawyers (lots of lawyers), national advertising, administrative staff, buildings, food, someone to keep the U.S. government happy and God knows what else. These are huge sunk costs.

Worse, all of these capital costs, goods and services must be paid in dollars– one case where a Chinese company’s main cost advantage cuts back at them.  Toyota and Nissan took 10 years to crack the American market. Hyundai took about seven to eight years to gain a toehold. And those are the “successes.” The list of car companies who failed in the American car market is long and illustrious, including Fiat, Peugeot, TVR and many more.  

Of course the Chinese could get a partner. After all, there are plenty of “joint” Chinese/foreign companies in their home market (and a few pure Chinese ones). And yet none have brought a Chinese-made vehicle stateside.

Again, their recalcitrance may be a matter of rational economics (make money in the booming market, don’t branch out). It may also represent a lack of trust re: reliability/build quality of Chinese-made vehicles. The dearth may also reflect a desire by Chinese companies not to give their “partners” leverage– in case they try to “nationalize” the subsidiaries.

But the biggest inhibition is history. Emigrating as a “captive” import has never been a path to American manufacturing glory. Isuzu just left, Suzuki hasn’t yet (but no one can really tell), Renault/AMC didn’t exactly set the world on fire. “Going it alone” would be a dangerous path for a Chinese automaker, but it at least offers the chance of success. The major players make lousy pimps.

Buying out an unsuccessful U.S. dealer network would seem to be the quick way around many of these problems. The problem here is with what’s available, or likely to become available soon.  Isuzu’s dealer network was nothing to write home about: sparse, truck-centered and closely tied to GM. On the other hand, if Chrysler should go on the block, it would be if anything, worse.

The first problem is scale. There are far too many Chrysler dealers right now (it’s one of the reasons they’re in so much trouble). As they stand, none of the Chinese automakers could fill a supply channel larger than Honda’s (with two to three times the dealers). Also, any procedure that sees Chrysler go on the block is likely to void most of the dealer contracts. “Chery”-picking may be possible once the dust settles. But in that case, there’s little difference from starting an all-new network (certainly not in terms of cost).    

All that said, the Chinese may still venture stateside. Believe it or not, failure will signal their arrival. Sooner or later, the Chinese market will stabilize—or tank (saturation, outside economic factors, government instability). Once the domestic market cools off, an established Chinese domestic car company or three will fail. Some of the survivors will merge. Others will look overseas for their survival. Then, the Chinese automakers will finally arrive in America, in force. 

Picture this: Toyota outsells GM and Ford combined. Chrysler is long gone, having sold their factories to a foreign automaker. Meanwhile, GM and Ford import all their products from low-wage countries except for large sedans, whose drooping sales figures are propped-up by fleet sales. Imports fill the top eight spots for retail sales. In the face of massive imports and a strong currency, the Big 3 (Toyota, GM, Ford) informs the feds that they’re considering ceasing all remaining domestic automobile production. Welcome to the Down Under (and out) car market of Australia.

American car enthusiasts tend to envision Australia as an American mini-me holdover from the good old days, when traditional RWD sedans with big straight-six and honking V8 engines dominated the roads and the sales charts. In that rose-tinted rearwards-gazing scenario, the Australian divisions of Detroit’s Big 3 carve-up big chunks of the market for themselves, stake claims on the best selling cars, and generate handsome profits for mother Detroit.

In reality, Australia’s domestic car industry is hanging on by a thread. In fact, the antipodean market offers a scary glimpse into the possible future of the American automobile industry.

Back in the day, Chrysler of Australia created some legendary machines with hemi six cylinder engines that Ford and GM’s V8s couldn’t catch. Ultimately, it was to no avail. In case you missed it (or you’re younger than thirty), Chrysler called it quits Down Under in 1980. Twenty-eight years after Chrysler handed the keys to their plant to Mitsubishi, they’ve announced its closure.

Analysts who think GM and Ford will get a boost if/when Chrysler goes bust in the US should consider the Australian example. Since Chrysler withdrew, GM's Holden and Ford-AU’s market share has fallen even more precipitously than their American parents'. Holden now accounts for about 15 percent of Australia's new car market. Ford is precariously close to single digits. Toyota dominates, with a commanding 25 percent market share and most of the top-selling cars and trucks.

And yet, Holden and Ford still claim bragging rights to the number one (Commodore) and number two (Falcon) selling cars in the land of Oz. Pay no attention to those men behind the curtain. In another eerie equivalent to stateside PR, their claims are based on smoke, mirrors and fleet sales.

In Australia, the major manufacturers have agreed among themselves to not reveal fleet sales. They believe (rightly) that the numbers would damage public perception of the home-town teams. The Sydney Morning Herald managed to get their hands on a set of stats– and no wonder they’re secret. No less than 81 percent of the Commodore’s sales and 88 percent of Falcon’s sales sailed with the fleets.

Amongst buyers paying with their own money, the Commodore was merely number nine; the Falcon a distant fifteen. Not surprisingly, the Corolla is tops with private buyers, followed by the Mazda 3 and the Toyota Yaris. Holden’s best seller (to the public) is the Korean-built Barina (a.k.a. Chevrolet Aveo).

It turns out that Australia isn’t a parallel universe, immune to oil prices and environmental trends. The market for large cars declined 37 percent in 2005 and 2006; and it’s still contracting. The Toyota Camry is the only locally-made four-cylinder large car. The Aussie Big Two never developed smaller cars, and didn’t build a single four cylinder car for… just about forever. Ford has only just started building the Focus locally.

Ford’s restyled Falcon has just been revealed, but it’s riding on a tired old platform that wouldn’t cut it beyond its loyal but rapidly shrinking fan base (think Crown Vic). Thankfully, Ford has just announced the final solution to the geriatric twosome: a clean-sheet next-generation RWD platform to be developed in Australia.

By the same token, Holden has become GM’s RWD “home room.” It’s vying for development of the small RWD Alpha platform. But exports of Aussie RWD vehicles are not viable (G8 excepted). In fact, Ford may import the next-gen RWD cars or stampings from the U.S. These development projects don’t guarantee a future domestic production industry.

Bottom line: GM and Ford’s Australian units are sinking fast. Holden reported a $145m loss in '06, and $146m in '07. Ford-AU nicked mother Dearborn’s pocketbook a bit more gently, with a loss of merely $40m. No wonder GM and Ford are throwing development dollars for rear wheel-drive (RWD) cars to the Aussies. Without the imported bucks, they might soon be toast.

Meanwhile, the Australian reports that senior auto executives are warning that “union trouble or higher wages would be a poison arrow” for local car manufacturing. And Toyota is “reviewing” local Camry production. At the same time, China has targeted Australia for future automotive exports.

Welcome to the future.

In Michelangelo Antonioni's film "Blow Up," Thomas (David Hemming) watches a rock guitarist smash his ax and toss the remnants into the audience. Caught up in the spirit of the moment, Thomas joins the scrum scrambling for a piece of the dead guitar. He grabs the lion's share and runs away. Dozens of fans give chase, attempting to wrest the prize from his grasp. Finally, Thomas is clear of the crowd. Alone with his treasure, he contemplates his booty– and then casually tosses it into a nearby trash can. Nissan GTR anyone?

Sacrilege! The new Nissan GT-R blasts from zero to 60mph in 3.5 seconds, navigates the Nürburgring as fast as the Porsche 911 Turbo and (allegedly) does so with more confidence than Stuttgart's finest. All this with a Manufacturer's Suggested Retail Price (MSRP) starting just under $70k. Clearly, it's the performance automotive bargain of the decade.

On the day the initial U.S. dealer allocations of GT-Rs were announced, the mathematics made the problem clear. Nissan deemed exactly 691 dealers "qualified" (i.e. large and financially productive enough) to sell the GT-R. During the model's inaugural year, Nissan will build 2500 GT-Rs worldwide, only 1400 vehicles of which will make it stateside.

It doesn't take long to divide 1400 by 691 and conclude that the anointed U.S. Nissan dealers will receive two GT-Rs (on average). Since these dealers were obliged to make an investment in the equipment needed to service the GT-R's unique run flat tires, it makes sense that they'd want to recoup that investment ASAP, over the two model transactions they'll experience in 2008. And, lest we forget, they're car dealers.

Bottom line: a "buyer's premium."   

So when I contacted my local dealer to place an order for my very own Nissan GT-R, I wasn't surprised to encounter a lot of squirming and shadow puppeteering. This, of course, gave me a reverse Groucho Marx; I wanted to join a club that didn't want me as a member. BUT–  

I am allergic to paying more than MSRP for anything (I have a doctor's note to prove it). The idea of forking over a significant premium for a GT-R in its first year of release makes me feel both elated and stupid.

To delete "stupid" from this equation, I began an on-line investigation, hoping to tap the experiences of other enthusiasts desperately seeking a Nissan GT-R. Most of the stories I encountered indicated that dealers were adding a $10k to $25k additional onto the car's MSRP.

About a half dozen commentators listed dealers committed to selling their GT-Rs at MSRP. This information did me little good, as one sale accounted for half of their allocation. By the time I'd identified the virtuous dealer their other GT-R was also sold. Living in California didn't help; the Golden State's love for fast cars seems to blur the lines of whatever rational decision-making may remain within state borders.

Of course, the upshot of this hot model fever is a four-wheeled Ponzi scheme. Aside from the Ferrari Enzo, you can count on one hand the number of cars that garnered a premium from the onset, and maintained that value (and you'd still have enough fingers left to make gang signs). Anyone remember the $100k dealers placed on top of the dreadful BMW Z8? The SL55 AMG for $50k on top? And yes, people paid above the odds for a Pontiac Solstice.

Eventually, as the hot model cools, someone gets burned. IF you're going to pay a premium for a hot car, the "trick" is to do so straight out of the chute, then sell the car before availability catches-up with demand. Given that the Nissan GT-R ain't no Ferrari, and Nissan dealers love money, I reckon Nissan will up production after the 2008 model year, big style. At that point, the premium will disappear, for both buyer and seller.

You want to talk about killer depreciation? Then you need to contemplate the concept of "front loading" an asset destined to shed value. A 2005 SL55 AMG with less than 20k on the clock can now be yours for $86k as a certified pre-owned car from an MB dealer- and a lot less as a private purchase. With Solsti piling-up on dealer lots, there isn't a single soul in the U.S. who'll pay you above the odds for a new one. Not one. 

So I'm hot on this quest to find someone who will accept my order for a Nissan GTR at MSRP and I've never even seen one in person– let alone felt the driving experience. Two questions. How long will the hype last? With all this demand and little supply, how long will there be someone willing to pluck this discard from my trash heap and pay ME more than MSRP for the privilege? Second, would I even like it?  

Yesterday, Consumer Reports (CR) rated Cadillac’s new CTS a better whip than both a BMW 328i and Mercedes C300. Never mind that CR preferred the Infiniti G35 and Acura TL. A Bimmer had been bested by a Caddy! This is news! Bimmers are the buff book benchmark! Yes, well, tying the commercial success of BMW’s 3s and 5s to their on-road abilities is a perfect example of false synchronicity. While many models are justly coveted for their dynamic delights, their on-road performance is tangential to their sales appeal. BMW’s mojo lies elsewhere, in a more precarious place.

It’s worth repeating: in most head-to-head competitions, BMWs no longer deliver a knock-out blow. Their straight-line speed is impressive, but there are faster. Their interiors are nice, but Audi’s are better. Their seats are wonderful, but the passenger accommodations offer precious little lebensraum for the buck. Speaking of which, BMWs are significantly more expensive and/or under-equipped vis a vis their price-equivalent competition.

This leaves one strong link to BMW’s “Ultimate Driving Machine” brand boast: handling. Again, there are better handling cars– especially considering BMW’s recent penchant for passion-killing run-flat tires and active steering. More generally, does anyone seriously suggest BMWs are the best handling cars throughout their [enormous] model range? Plenty of Mazda, Infiniti, Mercedes and (now) Cadillac fans are willing to throw down to the Roundel’s rep for corner-carving kudos.

The truth about BMW is this: while the brand gets mad props from motor-journalists, the German automaker banks its bucks thanks to a very different demographic with a very different concept of “performance.”

While BMW still aims for the luxury car market stratosphere (the 7-Series and Rolls, neither of which amount to much) and slums it in the lower reaches (the premium-priced MINI line), the propeller badge might as well be a rifle sight. And yuppies are in the crosshairs. 

No car is more identified with a particular rung of the corporate ladder than BMW. Nothing says “mover and shaker” more than an alphabet soup 3 or 5 in a reserved parking place. We’re not talking about the top slot; the truly highly-placed drive something with more presence. BMW is the ne plus ultra for upper middle execs, corporate clones whose cars must stand out from the “ordinary” (cynics might say “practical”) machines driven by the company’s lesser lights.

Overpaying is part of the cachet, “I’m going places, and I don’t need to worry about what it cost.” Sure, Bimmer’s rep for speed and handling is a nice seasoning. But truth be told, the sort of person who regularly buys/leases a BMW probably doesn’t have the time to go joyriding. The exact position of this “Bimmer spot” within the corporate hierarchy varies from country to country, but the template remains the same: Urban Professional on the Move. 

On the Move. Ultimate Driving Machine. Done. It doesn’t really matter if a BMW lives up to its strapline– just as long as this business suit-wearing herd member buys the brief. The ultimate driving in question is symbolic; the BMW brand represents the single-minded “drive” known as personal ambition. Not to coin a phrase, if you own a BMW, you’re moving forward.Onwards. Upwards.

BMW’s recent, phenomenal success is tied almost exclusively to the explosive success of this well-fed corporate demographic. Some argue that the brand’s move down market has hurt their brand cachet. The opposite may be true. Ironic as it sounds, appealing to the upper middle class pack mentality may have propelled the propeller people’s products to even greater heights, saleswise. 

And now, the reckoning?

If there is a significant worldwide economic downturn, existing and potential BMW buyers may not make enough bonus– or simply feel “safe” enough– to take on a new car after three to five years. Should the corporate axeman’s blade swing through the lower executive level with particular violence, BMW sales will suffer widespread decapitation.

That’s the problem with near luxury products. They’re not expensive enough to rise aove the fray, and they’re not cheap enough to fly under the corporate accountant’s radar.

Meanwhile, exchange rates are making things even more precarious. To compensate for currency fluctuations, BMW must either raise model prices and enter into entirely different segments or hold the line and take the hit on profits. Whether here [U.S.] or abroad, the falling dollar threatens to move its models up one or more “classes.” Instead of merely being notably more expensive than their Japanese and American competitors– for which “badge cachet” compensates– BMWs are becoming especially expensive.

If you thought the end of the SUV boom was bad for Detroit, The Big 2.8s exposure looks modest compared with BMW’s potential exposure to a general economic downturn. As Porsche proved back at the tail end of the 80s, if the worst happens, all BMW can do is… wait.

For four months, the Canadian dollar has been flirting with U.S. dollar parity. And yet the same vehicles cost more north of the border than south. As America’s NAFTA neighbor imports more and more American cars, basic theory holds that automakers would eventually cut Canadian prices to eliminate arbitrage. “Eventually” hasn’t happened. Just as it was back in October 2007, the Lincoln Navigator is still $28k cheaper in the U.S. than Canada. Why?

The answer probably lies in that great evil that has ruined many naïve economists’ dreams since man began to theorize: asymmetrical information. If we assume Canadians are rational buyers who maximize their well-being, we must conclude that they simply don’t know how easy it is to import a vehicle, or that many vehicle warranties still apply after import, or that a price difference even exists at all. So let’s call it what it really is: ignorance.

Seeking some anecdotal evidence, I probed my immense social circle on the possibility of importing a car. Most don’t even realize it’s possible. One claims there is no price difference. One claims they can’t be imported (he’s never been to www.riv.ca). Another friend claims he’d have to pay huge duties (none on vehicles built in the NAFTA zone, 6.1% on others).

And then there’s the warranty—or the perceived lack thereof. Notwithstanding that the Toyota brands (Lexus, Scion, Toyota, Subaru) all honor U.S. warranties for non-residents, the savings on an import can easily exceed the expected value of warranty repairs. It’s a medley of counter-arguments that make as much sense as Star Trek technobabble; which is to say, none at all.

The automakers, predictably, are reacting in a manner that highlights the self-imposed captivity of the Canadian market. BMW and Mercedes USA have retained the decision to allow exports from the U.S. on a car-by-car basis, forgoing the Canadian legal process for approvals en masse.

Porsche has announced a “price-matching cut” on some of its Canadian models. Cut, yes. Price match, no. A quick look at the actual numbers reveals that the 2008 base Cayenne now costs Canadians C$55,200, down from C$60,100 in 2007. That seems like screaming deal– until you discover it’s still about $7k more than what Americans pay for the exact same vehicle.

Other manufacturers played legal games. Honda, Subaru, Toyota and General Motors all refused to certify that their 2008 USDM models were equipped with immobilizers, making them illegal in Canada. In a delicious irony, a 2008 Honda Civic built in Ontario and exported to the U.S. could not, for a few months, be repatriated and legally plated in Canada. As “illegal” cars piled up in driveways and border depots, manufacturers eventually relented and gave their blessing to Transport Canada. The latest RIV.ca update includes all of Honda’s 2008 models.

Honda didn’t stop there. Last fall, Honda Canada launched an insidious marketing campaign that highlighted differences in American and Canadian Hondas, noting that Canadian Hondas are better prepared for the rigors of Canadian winters. "The vehicles that are produced for Honda Canada are supposed to be sold in Canada to Canadian buyers," said Art Garner, public relations manager for American Honda Motor Co, at the time.

Needless to say, Upstate New York, Minnesota, Maine and New Hampshire all are cursed with winters that easily match anything experienced by the 95 percent of Canadians who live within 100km of the U.S. border.

Faced with unjustifiable price differences, the apologists eventually came out of the woodworks. Consider David Booth, of the National Post, who recently advanced the idea that having Canadian prices pegged to fluctuations in the U.S. dollar is not practical due to currency volatility.

Bollocks! The Canadian dollar’s movements have been quite predictable since January 2004: a slow, steady rise from about $0.67 U.S. to $1.00 US today. The average model life of a car is about five years. Since 2004, many manufacturers have had ample time to revise Canadian pricing on newly-introduced models. This, when the trend was obvious to all but the most financially disinclined.

In fact, when the dollar hit its historic low of $0.6179 U.S. back in January 2002, the Navigator I mentioned at the beginning of this editorial was only about $2k cheaper in Canada. Put another way, the only time the Canadian dollar sank low enough to bring Canadians to the economic point of indifference for a Navigator was when it was in the biggest slump it has known since… wait for it.. 1858! Where’s the unpredictability in that?

Canadians imported over 137k vehicles in 2007. It wasn’t enough to “readjust” prices. As long as Canadians do not force equalizing adjustments to prices, automakers will be happy to trot out shady marketing and legal mumbo-jumbo in the pursuit of profits. In the meantime, captive Canadians will get the prices they deserve.

Acura’s finest marketing moment comes halfway through “Pulp Fiction.” Our “heroes” have made a mess of things; the boss has called in “the cleaner.” Cut to an NSX (the sensible man’s Ferrari) pulling into the drive. Clearly “the cleaner” is well paid, always in a hurry and has no time to worry about his car. Who but car geeks remember this seminal moment? Where is the NSX these days? In fact, where’s Acura? As Consumer Reports (CR) reported, the answer is simple enough: nowhere.

Acura executives were reportedly aghast at CR’s brand perception survey. The study placed the Japanese marque third from the bottom, just above Mitsubishi and Mercury. In many categories, such as “performance image,” not ONE of CR’s 1,720 respondents even MENTIONED Acura. A company spokesman claimed the study was inaccurate, unimportant, subject to change (new models are coming). But the simple truth is that Acura is invisible. 

First and foremost, Acura suffers from Honda’s success. Like most automotive brands, Honda offers plenty of toys that were once restricted to luxury cars, from electric windows to premium audio systems. Thanks to trickle down ergonomics, Acura has become a sort of “Mercury done right.” Acura sells a series of gently re-skinned, slightly posher, slightly faster Honda derivatives (sharing platforms, but not bodies). 

While Acura’s lineup resembles Mercury in execution, Acura’s inherent– and unexpressed– sales appeal is slightly different. The brand’s current tagline is Advance? Fuhgeddaboutit. At best, Acura is the sensible person’s BMW. (At worst, it’s the poor man’s BMW.)

Luxury cars generally come in two different flavors: wafters and carvers. Wafters emphasize smooth cosseting ride and rich interior fittings. Lexus is the ideal’s poster child. Jaguar and Caddy aim for it. Mercedes and Audi kinda want it, kinda don’t. Acura can’t do it.

On the flip side, carvers emphasize performance uber alles, selling sporty style and aggressive driving dynamics (again, we’re talking about perception). BMW is America’s upmarket carving King. Again, both historically and practically, this is Acura’s natural stomping grounds. This is why Acura’s line-up neatly mirrors much of the propeller people’s products.

In a Honda-sensible way. BMW’s are built for autobahns (though the top end is restricted to 155mph). Acura is built for highways, where 90-some-mph cruising is enough. BMW sells sedans with fussy controls, ridiculously priced options and penalty box passenger seating. Acura sells cars with virtually no options, intuitive ergonomics and actual rear seats. BMWs are expensive. Acuras are not. 

So, there’s the template. Now, how do you sell it?

For one thing, Acura needs to return to naming its cars. The Japanese brand ditched its legendary model names for alpha-numerics after Lexus successfully aped Mercedes’ and BMW’s model designations. It cost Acura a huge amount of momentum. Initials are not necessarily the kiss of death; the Honda CR-V sells in huge numbers– it was/is for Acura. But when you’re invisible, making it hard for people to remember your name is just plain dumb.

Acura also needs to address the huge gap in its line-up. The TSX and TL (confused yet?) slot-in neatly as lower-priced BMW 3 and 5-Series alternatives. The RDX and MDX also line up perfectly against Stuttgart’s X-series SUVs. Although Acura doesn’t compete against Bimmer’s ever-expanding line of niche vehicles (thank God), Acura’s top-‘o-the-range RL lacks a logical German competitor. 

Critics contend that the RL’s six cylinder engine can’t cut it in a market segment awash in testosterone. But price is the real problem. The RL stickers for around $50k. The 7-Series starts at $70k. More to the point, the Acura TL clocks-in under $34k. Except for a few gadgets and AWD– which the TL may soon receive– the TL is arguably the better car. 

That $15k gap contributes to the Acura RL’s less than stellar sales. It’s simply not a sensible choice. The TL is market-slotted right where the original Legend found favor: as the cheapskate’s BMW. Whereas the BMW 7-Series could be considered the wealthy snob’s 5-Series, the RL is nobody’s nothing. It needs to grow, grow stones or disappear. 

The importance of a “sensible supercar” at the top of Acura’s range is debatable. As the Consumer Reports brand perception survey indicates, Acura’s need for a powerful and sustained advertising campaign is not.

Lexus and Mercedes aim at the CEO who runs the company. BMW aims at the execs who think they run the company. Acura should be for the middle managers who actually run the company. This is a salable niche. In fact, the demographic is far less vulnerable to economic downturns in the economy than the Lexus, Mercedes or BMW model. But just like the higher-ups, they need to feel that their car is special.

If Acura can build the cars these men and women want and make them Acura-aware, they will be born again. If not, not. 

Day three of the North American International Auto Show in Detroit is comparatively quiet. I took advantage of the lull to chin wag with Clay Dean, Cadillac’s Global Design Director and Dave Caldwell, Caddy’s top spin man. Both men were refreshingly candid. So I challenged the duo on the brand’s marketing mix: product, price, place, and promotion. While the adulation heaped upon the CTS, CTS-V and CTS Coupe indicate that Cadillac’s lineup is better off now than when ‘Slade sales started slipping, what of Caddy’s future?

“When someone [at Cadillac] comes up with a really bad idea, we call it a Cimarron,” Dean declared. The Cadillacs of my formative years predate even this debacle. Back in the day, Caddy was the purveyor of over-sized flaccid barges for middle-income Florida retirees and active Mafiosi. Compared to the tightly-built imports of the day, Caddies seemed poorly packaged, clumsy handling and sloppily built— if only because they were.

To the automaker’s detriment, Cadillac clung to their bigger-is-better, living-room-on-wheels, mid-market brand identity while their target demographic was gradually interred en masse into nursing homes or burial plots. Meanwhile, the rest of the world continued to evolve technologically. Upmarket Americans gradually forsook wreath-crested wafting for a European snob appeal and driver-centric dynamics. By the turn of the century, the once-proud Cadillac brand embodied middle-income America’s obesity and sloth.

Finally, five years ago, Cadillac got serious about adapting to the market trends that they’d derided, denied and declaimed for the better part of two decades. In 2003, Cadillac introduced their 5-Series killer, the CTS. It was no hardened assassin, but the model signaled a fundamental change to the brand.

“Today, the closest vehicle Cadillac makes to the old standard is the Escalade,” Caldwell explained, echoing a sentiment oft expressed by TTAC readers.  “It’s really the only old style model left.”

Fair enough. But I harbor the radical notion that brand extensions are inherently dangerous. For example, pickup trucks are for hauling manure and pulling stumps. A pickup truck is fundamentally and irrevocably incompatible with luxury. I view the Escalade EXT a perfect example of Cadillac’s ongoing inability to stay focused. To do one thing better than anyone in the world. To just say no.

“Cadillac should never make a pickup truck,” I challenged the guys. “It erodes the brand.”

Spinmeister Caldwell carefully considered my take on luxury and thoughtfully responded. “Cadillac doesn’t make a pickup truck.”

“Maybe not in PR speak,” I calmly replied, “But if you ask one thousand people on the street one thousand of them will say that the Escalade EXT is a pickup, not whatever non-truck euphemism you’ve invented for it.”

Sensing that our conversation had taken an abrupt left turn, Caddy’s seasoned mouthpiece changed tack. “Sometimes we make products on a short-term basis to satisfy a particular market demand,” Caldwell corrected.

His answer underlined– rather than explained– Caddy’s willingness to tarnish their brand identity and sacrifice long-term viability on the altar of short-term gain.

Today, a Cadillac can cost less than $40K or more than $100K. It can be a two-seat roadster, executive sedan, SUV or pickup truck. So how does Cadillac sell itself as a strong and concise brand when it spans so many prices and genres, when it means so many different things to so many potential customers?

“Modern sporty Cadillac’s are not incompatible with the Cadillac legacy. Cadillac engines were long used in race cars because they were the most powerful,” said Dean. Yeah, but that was before I was born.

“A Cadillac can be any kind of vehicle, even a minivan,” Dean continued, referring to the hydrogen fuel cell Provoq (pronounced “PROvoke”) Concept. “Just as long as they deliver a Cadillac experience.”

And what, pray tell, is that? “To me, Cadillac is about desirability and drama,” Caldwell answered, once again releasing the PR vapors. “Yes, a Cadillac is flamboyant,” Dean added. In other words, it’s like porn; you can’t define it, but you know it when you see it.

I left the show with mixed feelings about Cadillac’s future. The new CTS is one of the best cars Cadillac has built in my lifetime. In fact, while it's still not quite up to world-class standards, the model's attention to detail represents a new high water mark for the entire U.S. auto industry. Yet the definition of what constitutes a Cadillac remains dangerously nebulous.

Cadillac’s brand identity seems to be at the end of a pendulum that’s swung from pathologically recalcitrant in the ‘80s and ’90s, to schizophrenically indefinable today. To achieve brand health, Cadillac find one path. It must integrate its multiple personalities into a cohesive core identity while setting defining parameters wide enough to accommodate changing market conditions, a stringent regulatory environment and fickle public tastes. Until and unless it does, Cadillac’s current success will be a fleeting phenomenon.

I’m not big on ceremony. Throw in a couple of blowhard politicians, a bevy of self-congratulatory industry execs and a swarm of self-important journalist jackals; and meetings like the 12th Annual International Car of the Year Awards are like kryptonite to my modest superpowers. The invitation from the friendly folks at Road and Travel Magazine read, “Regrets not Required.” In my case, regret was inevitable. Still, I donned a monkey suit and took one for the team with as much enthusiasm as I approached my first doctor’s visit after my fortieth birthday. Fortunately my doctor was quick and his gentle finger was warm, so that experience was not as bad as I had grimly anticipated. Unfortunately, I can’t say the same for the green-themed ICOTY award pageant.

If you are thinking, I know C&D, MT and R&T, but what the hell is RTM, it’s probably because you aren’t a woman. Road & Travel Magazine was founded in 1989 by the lovely Courtney Caldwell to entertain and inform the fairer sex about all things automotive. The periodical founded the ICOTY in 1996, as an Academy Awards for automobiles.

The evening got off to a bumpy start with remarks by Michigan Representative John D. Dingell. Give the congressman credit; he boldly and proudly referenced the draconian increase in Corporate Average Fuel Economy (CAFE) standards. His words hung in the air above the heads of the audience born by tension and uncomfortable silence. All was made right when the old Washington warhorse called for applause for all the workers and management who supported the legislation.

This year’s convocation marked the bestowal of the first ever Earth Angel Award. This sappy honorific is designed to laud the most environmentally harmonious automaker; the car company that best carries the torch for alternative fuel transportation and whose “company position and mission on global warming” is most politically correct.

“Global warming is top-of-mind for everyone these days,” said Caldwell. “Automakers are too often criticized for environmental insensitivity when the reality is that they’re really making enormous strides on a global level to improve the earth’s environment.” 

August former CBS newsman, Walter Cronkite, who wants mankind to turn back the tide of increasing global temperatures by driving new and improved cars, heralded in the inaugural Earth Angel Award via taped introduction. Carl Levin, Michigan's Senior Senator, bestowed the first-ever Earth Angel Award upon the General Motors Corporation. 

In the estimation of RTM’s esteemed panel, The General best allows pistonheads to purge themselves of guilt for ravaging the earth. How so? By mapping out a comprehensive plan that will transform the automobile from a filthy mechanical machine into a clean electric appliance. Riiiiight.

The culmination of the gala event: the announcement of the International Car of the Year Award winner. J.D. Power and Associates counts votes for the nominees (not a difficult job since the electorate is comprised of a panel of just 12 “respected” journalists).

Unfortunately, the group’s previous picks look like a menagerie of mediocre moribund models mired on a used car dealership: Pontiac Grand Prix (1997), Oldsmobile Intrigue (1998), Ford Windstar (1999), PT Cruiser (2001), Jaguar X-type (2002), and Dodge Charger (2006). This is hardly a lineup of the best cars in the world. More likely these pickings bear the undeniable stench of money mildewed by a passage under the desk of RTM’s advertising director.

If you still care, the night’s winners include:

•    Honda Accord Sedan, the International Car of The Year, and “Most Dependable” Sedan of the Year
•    Chrysler Town & Country, International Truck of the Year, and “Most Compatible” Minivan of the Year
•    GMC Sierra Denali, “Most Athletic” Pick Up Truck of the Year
•    Audi R8, “Most Sex Appeal” Sports Car of the Year
•    Mercedes Benz S63 AMG, “Most Respected” Luxury Car of the Year
•    Volvo C30, “Most Spirited” Entry Level Car of the Year
•    Chevrolet Tahoe Hybrid, “Most Resourceful” SUV of the Year

Clearly the Honda Accord was a safe choice, perhaps an attempt to atone for past indiscretions. The Audi R8’s selection proves that ugly is the new sexy. The only winner that seemed to rankle the crowd, at least those outside of the Ford family, was the inclusion of the pricy Volvo C30 in the entry level car category.

By night’s end, the sickening sweet smell of 1984 Ferrari-Carano Cabernet Sauvignon permeated the room and the band played on. In black ties and evening gowns, industry manager misters and their silicone sisters renewed old acquaintances within the attendant corps of scribes. To everyone’s relief, the charade was complete for another year. As for me, my doctor tells me that I have the prostate of a twenty year-old; the prognosis is good that I’ll live to suffer through the ICOTY Awards again in 2009. Assuming I'm invited.

Carburetors, fuel injection, headlights, satellite radios, ECU, ABS, air conditioning, drive-by-wire— today’s automotive technologies are variations on well-established themes. If “Crazy Henry” Ford resurrected, he’d have little problem driving– or understanding– a modern car. While automakers continue to tweak automotive systems for greater ergonomics, power, fuel economy and reliability; the improvements are evolutionary, not revolutionary. Even alternative powerplants aren’t game changers. But something else is…

To understand the next great leap, consider the camera. Never mind the changeover from film to digital image capture. Clock the fact that the device has morphed from a delicate piece of specialized equipment used by highly-trained professionals to an $8.99 mass market item sold at Walgreen’s. More importantly, drill down to the salient detail: a huge percentage of all cameras sold (even digital) are now disposable.

The car is about to repeat the exact same pattern. The era of the mass market disposable car is nigh. Let’s check the trend…

In 1909, Ford’s entry-level Model T cost $850. In 2008, the Ford Focus’ base price is $13,715. Priced in 1909 dollars, Ford’s entry-level U.S. model would cost $633. That’s a net savings of $217 in 1909 dollars compared to the Model T, or about 26 percent. And that’s without considering the vast improvements in safety, comfort, reliability, performance, etc.

According to the US DOT, there were 87m licensed drivers in 1960. Factoring 74m cars registered, we get a ratio of drivers to cars of 1.17:1. In 2003, 196m drivers owned 231m vehicles, giving a ratio of 0.83:1. As cars became cheaper, through cuts in technology cost or even through financing and leasing schemes, one-car families became two-car families. Two-car families bought a car for every person, parent or child. Then, dad bought a week-end whip. 

The innovation that arrived on the scene as a toy for the elite is firmly established as an “appliance” for the majority (while the elite have moved on to personal jets). While cars still have a ways to go before full commoditization, there’s no question they’re heading in that direction.

Well, if there WAS any doubt, India’s Tata Motors is about to eliminate it. Today’s the day the Indian automaker officially unveils their highly-anticipated “1-lakh car.” The name tells the tale; one lakh equals 100k rupees or roughly $2500. The 1-lakh car will be the world’s cheapest new car, and it’s a short trip from there to the truly disposable car.

How much of a car’s overall expense is due to its mechanical longevity? Remove that requirement and you’re suddenly free to substitute mass produced plastic, wood and other materials for the more expensive metal bits, from engine parts to the body panels. Combine this freedom with the “stripper” mentality (how many disposable cameras have a zoom function?), and your costs, and thus price, sink.

When we get a good look at the 1-lakh car, we’ll see just how much performance, safety and pollution control Tata could provide for $2500. But you can bet the car is not built for the long haul— because price is all. Ironically, even without fundamentally robust mechanicals, the 1-lakh car will probably “last” (i.e. remain in operation) a lot longer than western machines; by necessity, developing countries are endlessly innovative at repairing and recycling consumer goods. But the pattern of commoditization and [relatively] rapid disposability will be set.

Tata Motors anticipates that they’ll sell up to a million 1-lakhs per year. Going by America’s early automotive experience, it’s a highly conservative estimate. Once India’s enormous rural population has access to a fully functioning automobile, it will unleash an economic expansion the world hasn’t seen since, well, America’s early automotive history. And the more prosperous India’s population becomes the more Tata Motors 1-lakh cars they’ll buy.

And just as Henry Ford’s Model T (and its production process) spawned a hundred imitators, competitors for Tata Motors’ 1-lakh car will spring-up throughout the world’s largest democracy. Ford, Suzuki and all the other automakers operating in the Indian subcontinent are already rushing ever-cheaper small cars to market. It’s only a matter of time before the trend spreads to Africa and other so-called developing nations.

There’s only one thing standing in the way of the automobile’s commoditization: government intervention. It scarcely seems credible that a government could oppose its citizens increased mobility and, thus, prosperity, but, for numerous reasons, the Powers That Be have demonized the automobile. Western European thinkers and their like-minded foreign intellectuals see the disposable car as a global apocalypse. 

The truth is that it’s too late to stop the rise of the disposable car. The personal advantages of affordable personal transportation are too great to be denied. There’s too much money to be made fulfilling this desire. All we can do is make sure the disposable cars are properly recycled, as they should be.

One of the rare examples of altruism in pistonheads concerns the (nearly extinct) American station wagon. They passionately defend the one automotive genre that the vast majority of American consumers wouldn’t be caught dead in (excepting a hearse). Why so much love for a car shape that’s been fading from the American scene for the best part of 25 years? The passion comes from recognition. The reality we’ll have to blame on Darwin and his stupid birds.

Wagons increase a car’s cargo space without altering the donor car’s fundament shape. They’re a bit heavier and generally a little shakier than their sedan siblings, but still offer car-like driving dynamics. This is important to enthusiasts, who value driving dynamics sur tout. Ironically, pistonheads hate compromises; generally speaking, they don’t buy wagons. But they recommend them to others– especially SUV owners– based on the combination of handling and hauling.

The other reason American pistonheads root for the station wagon: foreign car magazines and websites are full of them. They have them, we don’t. So they must be really good, right? Well, maybe, but first we need to have a little talk about the birds.

When Charles Darwin was hanging out down in the Galapagos, he had a thing for finches. While there were many different types of finches on the islands, Darwin figured they were all descended from a single type of bird. Responding to their environment (a.k.a. natural selection), one species had expanded into a dozen [car word now] niches. 

Most foreign car markets divide cars into classes based on some combination of size and engine power. These classes are taxed at ever steeper rates as you move “up” the list. And the roads upon which they drive are narrower than our American highways and byways. This creates a demand for getting as much “bang for buck” on the smallest possible platform. Natural selection favors Eurowagonophilia.

On this side of the pond, save the gas guzzler tax and the ongoing financial penalties imposed by low mpg vehicles, the US has no size-related vehicular fees. If an American non-pistonhead wants a bit more space, there’s very little reason not to buy a SUV/CUV/Minivan. The price difference between a “normal” size (two-row) station wagon and a small “box” vehicle is minimal. 

The old rear-drive (three-row, with a penalty box) wagon has no advantage on a minivan/big CUV other than cornering. And who buys a people-hauler for that? This also explains why “small” three-row haulers (MPV/Villager, the old Odyssey, Tribeca) have such low sales; there isn’t enough price “room” for them to compete with the big boys.

It’s not that manufacturers haven't tried– and tried again– to sell station wagons. Fifteen years ago, the first car Honda designed in the USA was the Accord Wagon. For years, it was the most-exported American-built car. Back in Ohio, the most common sales drivers for the Honda wagon were transplanted Japanese employees encouraged to “drive local.” When the Accord design was split into USA and “rest of the world,” the Acura TL was brought to the states and the wagon was kept small and built overseas.

If this seems like the destruction of a tradition, it really isn’t. The “classic” large American wagon was a fairly recent development, dating from the “new” car designs of the late 1940s. Earlier “station wagons” looked a lot like modern SUV/CUVs. The Chevy Suburban was called a “station wagon” at its introduction.

Right from the beginning, these new wagons were criticized for their lack of utility. The classic 1960 book “Insolent Chariots” not only criticized contemporary vehicles for being all flash, it also ripped station wagons for being useless for camping and other duties (he wanted a Jeep, before Jeeps were that big). While VW buses, International Scouts, and “custom” vans cut into the “utility” market for the next 20 years, it was the minivan that killed the large wagon segment. 

The “secret” to the minivan was packaging. By using a “car-like” uni-body and transverse engine, minivans could haul like a wagon on a much smaller platform and offer genuine rear seats to boot. If you still needed to tow, there were always an SUV. As gas stayed cheap through the mid ‘80’s into the ‘90’s, more people moved into the “safer” (and much more commodious) SUVs and the new uni-body CUVs. The wagon had been well and truly “niched.”

Is the wagon due for an American revival? Doubtful. There’s always demand for a more space-efficient car– especially if utility not performance is the major selling point. Subaru and Volvo still sell a lot of wagons, but they are not in the heart of the market. The heart of the market either wants a car to drive or something to haul stuff. They don’t like to pay extra to do neither as well.