By on March 14, 2007

intimidator.jpgAfter a bleak January, February offered Detroit automakers a whiff of spring. The Chevrolet Impala had a 60’s sales flashback. Thousands more customers went fission for Fusions. And Chrysler Wrangled plenty of loot from new Jeep owners (boosting their bottom line to help Daimler get the Hell out of Dodge). While The Big 2.5’s supporters may conclude that the numbers presage Motown’s long-awaited recovery, starting a Deathwatch Deathwatch may be a bit premature.

Scanning the February figures, looking at year-on-year comparisons, some models just plain took off. Sales of the Chevrolet Impala rose 43.9 percent. Sales of the GMT900-based Silverado increased 26.5 percent. Avalanches were up a whopping 109 percent. Over at Ford, 46.1 percent more folks fixed on a Fusion. Thanks to the new Wrangler four-door, the model moved 62.9 percent better than ‘afore.

Overall, Ford’s sales slipped 21.5 percent on the car side, 9.9 percent on trucks. Even with red hot Wranglers, Chrysler’s truck sales fell 4.6 percent, while car sales tumbled by 15.6 percent. Silverado sales pulled The General’s trucks up an eight percent incline. But steep declines in every division save Chevy and Saturn yanked car sales 2.7 percent lower.

To avoid premature recapitulation, you gotta factor in product freshness. For example, if you look at a February vs. February comparison for the new Avalanche, it looks like the model’s a solid sales success. However, this February’s buyers can sign away their life for a box-fresh design; last year’s buyers had to make do— or not— with a five-year-old design. The Silverado’s increase may conform to the same principle; “intenders” kept their powder dry until Chevy released the new truck. When Mellencamp’s motor hit the showroom floor, the pent-up demand created an initial sales surge.

By the same token, sales of the current gen Ford F-150 experienced a generous up tick for several months following the new model’s introduction. Now they're down 12.1 percent from last year. GM’s supposed salvation, the GMT900-based Chevrolet Tahoe, also started well. It’s down 24.4 percent. At some point, the Silverado’s momentum will require conquest sales and casual shoppers. With competition from Toyota’s new Tundra, rising gas prices and Ford’s new marketing push, it’s gonna be tough.

How did the “other side” (i.e. the foreign-owned automakers) do in this battle for domestic market share? Feb on Feb, Toyota Camry sales– benefiting from an '07 refresh– rose 17.5 percent. The increase seems to pale next to Impala’s 43.9 percent jump— until you clock the raw numbers. The Camry outsold the Impala by 14k units. The killer Camry also outpaced the Ford Fusion by almost 36k sales. The Honda Accord was Camry’s closest market segment competition– and it trailed the Camry by 7400 units.  

Inventory levels are staring to look good across the board. Production cuts and incentives have brought supply and demand into a better balance. Many beleaguered automotive divisions showed double-digit drops in inventory levels from January. Saturn went into “Like Never Before” mode, quickly moving from a deeply worrying 153-day supply of product to a merely troubling 93 day inventory. OK, yes, it’s still a far cry from the 60 day ideal, but Saturn dealers must be happy with the big drop in carrying costs.  

Formerly minimalist U.S. Porsche dealer lots are beginning to look a bit lebensraum challenged. The Sultans of Stuttgart’s inventory levels have jumped from an unassailably delicious 42-day supply to a “come on down” 70-day level. Blame fading sales of Porsche’s pricey Cayenne SUV. Even though the new, refreshed model is here to save the day (after skipping a model year), the SUV slump in general and Cayenne doldrums in specific raise the question automotive marketeers dread to hear: “Has everyone who wants one got one?”

America’s most available model (how great does that sound) is the Mazda B-series truck. Can someone please turn off the tap? Mazda dealers now have enough petite pickups to last 228 days. Ford’s Zoom without a Vue subsidiary would happily swap with Honda. The econobox-of-the-moment Fit and increasingly creased CR-Vs are smokin’ hot, with 19- and 20-day supplies respectively.

On the vital sales per dealer (SPD) numbers, nearly everyone’s up from January. Even tumbleweed infested Buick dealers showed a slight increase, adding two sales per dealer (to a not-so-grand-national total of six). Saturn scored the highest increase, adding 19 SPD in January (from 31 to 50). At Porsche– normally a sales tiger as the weather improves– SPD dropped by five. In raw numbers, once again, Toyota reigns supreme. The automaker hit 136 SPD in February, up 10 sales from the month previous. Lexus dealers ranked second, with a whopping 105 sales per dealer.

The automakers are hoping for some March madness. But with gas prices on the rise, the housing market on the slow and sub-primes all lent out with nowhere to go, the madness could get seriously crazy. Watch this space.

By on March 13, 2007

car-lot222.jpgDoes anyone other than a masochist enjoy buying a car? Any survey of loathsome experiences would rank car buying just below root canal surgery, slightly above cleaning hair out of the shower drain. I have yet to hear an adult say “I need a new car,” without dread and trepidation in their voice. So they turn to me, their local automotive alpha, for advice on makes, models, prices and features. Until recently, all my knowledge couldn’t protect them from the dreaded car dealer. Here’s what they faced… 

They walked into the dealership, inhaling that heady blend of fear, desperation, and volatile organic compounds. Depending on how they were dressed, they were either A) ignored until they tried to break into a locked vehicle or B) forced to sit in front of a sadist sales manager who had to know how, when, where and with whom they drove. And then it was time for a little one-on-one with a sales prevention officer.

There were a lot of ways this went wrong. There are car salesmen who will only speak to a female customer’s boyfriend or husband, or vice versa. Salesmen whose definition of product knowledge includes improvisation, science fiction and outright lies. And self-righteous sales associates who think it’s acceptable to treat their customers with condescension, contempt and disdain. 

Occasionally, my car shopping friends encountered a good car salesperson: someone who didn’t smell like he was one missed payment from foreclosure. The salesman knew exactly what he was selling, handed them the keys, shut up and let them drive. That said, the chances of encountering one of these rare birds was about the same as finding an Ecuadorian Pale-Headed Brush Finch snacking on french fries under the Big Chicken in Marietta, Georgia. 

I always told my acolytes and referrals: if you don’t know anything, neither a listener nor an inquisitor be. Later, when these advice insensitive car buyers realized they’d been talked into a piece of junk– my strong-willed sister’s adoption of a Suzuki Verona springs to mind–  they only had themselves to blame. (As if.)

Anyway, once the test drive was over, the salesman sequestered them in the little room I call AHA (Abandon All Hope). After proffering false interest in their well-being (must get fives on that CSI survey), the salesman wrote numbers on disposable sheets. The potential customers were interrogated until they revealed exactly how much money they were willing to “invest” per month on a new car, and whether or not they were willing to transfer Junior into Community College to cover any shortfall.

Ludicrous words were spoken. “This car won’t be here tomorrow,” and “This is a one-time deal only.” As deep-vein thrombosis set in, the salesman invoked the specter of cold-hearted sales managers and their own bare-footed children.  The next thing they knew, my charges were either driving away in their old car, relieved at having escaped the lion’s den, or signing a sheaf of papers they were too tired to read. Either way, their underwear was in their pocket.

If they didn’t buy the car, they winced inwardly, knowing they had to lather, rinse and repeat until they encountered a salesman desperate enough not to stiff them.

Is it any wonder so many people I sent to dealerships threw in the towel and bought something, anything, just to stop the madness? Most consumers simply don’t have the time or stamina to physically explore their options. The salespeople know this. And once customers are on their turf, the dealer’s designate controls the tempo of battle. And prevails.

After a particularly gruesome negotiation session at one of Atlanta’s more notorious VW dealers, I saw the light. I surfed the Internet and requested price quotes online. A quick responder offered me invoice on my chosen mount. We negotiated back and forth over e-mail. A couple of days later, I walked away with the car I wanted for a fair price. I didn’t have to reveal my husband’s favorite sport or miss another episode of South Park. Bliss.

I realized that the $500 under invoice, no haggle, test drive, sign and go deal was the future.

So now, when friends and family ask me about a new car, I hit the net. I do 95% of the work for them: surfing for the right spec., price and dealer, and then showing them how to cut the deal before they darken the dealer’s door for the make-or-break test drive.

Clearly, the car sales paradigm is shifting. By the time I’m done with them, “my” people know exactly what they want and how to get it. Equally important, they know precisely what they don’t want: to waste their time battling with pushy, obnoxious salesmen. If car buyers can cut the traditional salesman out of the loop, why wouldn’t they? Thanks to me and I’m guessing you, now, they do.  

By on March 13, 2007

1stcorporate22.jpgPeople in business for a quick buck give everyone else in their field a bad name. They fully deserve the reputations they receive. More than a few CEO’s and their boards have ruined— are ruining– their companies by combining short term thinking and personal greed. To expedite their demise, more people should vote with their feet, and avoid mindless profiteers. That said, take it from the manager of an average sized Honda store: not all car dealers are crooks. 

Before I argue my point, take a look at Honda invoice prices at KBB and Edmunds (our customers do). Clock the difference between dealer invoice and what the site says you should pay. Then consider the cost of opening a dealer’s doors every day; from heat and light to payroll to bathroom tissue. Running a car dealership— even one as successful as ours– makes a savings account look like a sweet investment.  

Our geographical area is currently experiencing astounding growth rates. Despite the enormous amount of footfall on the showroom floor (and the need to keep the wolf from our door), despite the temptation of making hay while the sun shines, we stick to our basic values. Respect the customer. Don’t swing for the fences; if you miss, you’re out, and you look like an ass in the process. Play it straight, play it safe and get on first. Put another way, a little of something is better than a lot of nothing. 

When a hot product like the Civic Si or new CR-V hits the showroom floor, I do not allow the sales staff to charge over the Manufacturer’s Suggested Retail Price (MSRP) to customers who “gotta have it now, no matter what.” We only accessorize showroom cars for the sake of selling; we don’t cram high-profit dealer add-ons down peoples’ throats.  On the finance side, our staff has been trained to educate and discourage customers who want to borrow for more than sixty months.

It’s easy to understand why some car dealers lose faith and jettison their dignity. The traditional adversarial relationship between a dealer and the customer leads many customers to feel it’s OK to “screw the dealer back.” We have to put wheel locks on cars with alloys since they seem to walk off on their own. We get burned from time to time by unscrupulous customers who trade in vehicles with smoked transmissions, or the engine knock that gets masked by adding axle oil into the engine. 

I feel sorry for the domestic dealers faced with cynical customers, saddled with large inventories, surrounded by closely placed dealers of the same line/make. The temptations to cut corners are many; only personal integrity and long term thinking will stay a desperate dealer’s hand.

In college, I drove a Dodge Ram Van. Something on the front of the engine puked; I don’t remember what. But what I’ll never forget what happened next. The mechanic tore the front of the engine apart to replace said part– and failed to notice the drive belts were starting to dry rot.  Two days after I picked it up, the alternator belt snapped. 

I brought the Ram back, showed my receipt and asked why I wasn’t told I needed belts. I would have bought them without question if they replaced them the first time. The dealer replaced all the belts for free without hesitation. And I was willing to pay. Dealers face those sorts of decisions every day. The good ones make the right call. The bad ones don’t.

It must be said that bad dealer service often starts with a dysfunctional relationship between dealer and manufacturer. If you look at sales figures, the brands who grow consistently are the ones who share a partnership mentality with their dealers and vendors.  The ones who don’t, well, if it weren’t for state franchise laws, what would have happened to all those Chrysler/Dodge dealers who refused to accept the goofy vehicles sitting in the infamous “sales bank?”

Those of you who call for disbandment of the franchise system should click on the link to Dealer Magazine below, and see just one of the challenges U.S. dealers face when working with manufacturers. That said, there’s no question that a dealer’s biggest enemy looks out from the mirror each and every morning. They must decide whose interests are paramount. They must decide who they are, and what they stand for.

I believe that my reputation is worth more than the almighty buck. I live by those words, and the words of author and sales trainer Dave Anderson. "Are you just making money or are you making a difference? Focus on making a greater difference and you'll find yourself making more money as a result." Before you download your dirty dealer stories, remember this: we’re not all greedy bastards.

Click here for link to Dealer Magazine article 

By on March 8, 2007

merrie232.jpgIn 2002, Toyota sued Chinese automaker Geely for copying the Japanese automaker’s logo. In November 2003, a Chinese judge threw out the case. He claimed China’s trademark office had to reject Geely’s logo before Toyota could seek civil damages. The verdict provided yet more proof that China isn’t willing to lay down– or enforce– its copyright law. This lack of legal resolve is a clear and present danger to foreign automakers, and a stark warning of things to come. 

Until roughly 30 years ago, the concept of private property was an anathema to The People’s Republic of China. When the country’s communist leaders decided to abandon Soviet-style central planning for a “mixed” (i.e. controlled) market economy, they eventually allowed individuals to own property and commercial enterprises. Shortly before joining the Word Trade Organization (WTO) in 2001, these rights expanded to include intellectual property (IP). 

Since then, the number of IP cases in China has increased by some nine percent a year. A large number of these disputes involve China’s nascent automobile industry. And no wonder. China is now the world’s second largest new car market (having passed Japan in ’06). It’s expanding at about 17 to 25% a year. Tens of millions of Chinese are trading two-wheeled transportation for four.

Given the lack of copyright enforcement and the cost of developing a new car for sale– versus the cost-effectiveness of “borrowing” designs, manufacturing, parts, brand names and logos– it’s no surprise that the country’s native automakers are flooding the Chinese market with unabashed, automotive knock-offs.

For example, the [GM] Daewoo Spark and the [Chinese] Chery QQ are sheetmetal homonyms with, get this, interchangeable parts. (Rumor has it that Chery used the Spark with a Chery logo glued on to pass government crash tests.) Even when the running gear differs, Chinese manufacturers feel free to “riff” on trademarked designs. The Honqi HQD sedan looks like an ugly[ier] Rolls Royce Phantom– for about half the price.

Again, there’s very little incentive for a Chinese automaker to avoid building this sort of “homage.” According to China’s "Supreme Court Patent Trial Provisions," copyright thieves face a maximum statutory damage of 500,000 yuan (roughly $64k). And as Toyota discovered, “creative jurisprudence” makes attempting to legally right these wrongs a difficult bordering on pointless enterprise.

Further complicating matters, Chinese law stipulates that any foreign-owned automobile manufacture must share 50% of its Chinese division with a Chinese “partner.” The pattern of intertwined ownership works in the thieves’ favor. For example, GM held off suing the publicly listed Jiangling Motors for stealing one of The General’s designs. Jiangling Motors is partially owned by SAIC, GM’s Chinese partner. Nuff said?

While China’s foreign owned automakers wrestle with copycats and clones, trying to defend their technological investments and local brand equity, Chinese automakers are busy ramping up their export business. Last month, 500 Brilliance BS6s sedans left Dalian for Bremerhaven. This week, HSO Motors Europe announced it will distribute Brilliance vehicles in France and Switzerland.

Although Geely’s exports are currently restricted to Syria, Egypt and Latin America, the Chinese automaker plans to export 400k cars by 2010. The company’s recently announced deal with Chrysler to import a small Chinese-made car into the American market should account for a large amount of that business.

While many foreign manufacturers are willing to look the other way regarding IP infringement inside China, the advent of Chinese automotive exports threatens to bring the issue of IP rights to a head.

Later this year, Great Wall will export a small vehicle called the Peri to Italy. The machine looks an awful lot like Fiat's city car. With its Chinese ambitions and the obvious legal limitations within The People’s Republic, Fiat has been hesitant to take action against the Peri. But the arrival of a cheaper Panda clone on their home turf may well force their hand. It remains to be seen if a potential export backlash could dampen Chinese automaker’s “flattery.”

There is a darker side to these developments. The Chinese government’s willingness to turn a blind eye to cheap copies of foreign-designed automobiles may reflect their longer term strategy. At some point, when China’s joint venture automakers get up to speed, the government may give foreign automakers the boot, and allow their Chinese partners to assume full control. The student will become the master.

China's State Economic and Trade Commission’s tenth “Five-Year Development Plan for the Automotive Industry” predicts/dictates that "there will be two to three large automotive groups that have considerable strength in international competition. The domestic-market shares of products will exceed 70%, with some for export.”

How does that shake-out square with foreign interests? It doesn’t. Any foreign automaker that imagines itself as one of China’s Big Three better take a closer look at those clones. They may be China’s future. 

By on February 28, 2007

x07ca_xl01222.jpgCongratulations Cadillac. The GM brand scooped first place in BusinessWeek’s first-ever ranking for the best provider of automotive related customer service. Overall, the wreathed ones placed third, surpassed only by insurance company USAA and Four Seasons Hotels and Resorts. From its lofty perch near the top the elite twenty-five, Cadillac can look down upon such notable companies such as Starbucks (tenth), Southwest Airlines (thirteenth), and Apple (eighteenth). Caddy’s kudos offer beleaguered GM supporters a much needed glimmer of hope.

Of course, Cadillac is not the only automaker on BusinessWeek’s Customer Service Elite list. Lexus ranked seventh. Porsche staked its position on the leader board in seventeenth position. Buick and Lincoln round out the list in twenty-fourth and twenty-fifth places. Cadillac trumped its rivals with an A+ score for process (i.e. warrantees, service policies, etc.) and an A+ for its staff’s friendliness and conscientiousness.

BusinessWeek’s scoring system was based primarily– but not exclusively– upon data provided by J.D. Power & Associates. BusinessWeek aggregated 2006 J.D. Power customer service scores with their own survey data, weighted each company’s score based upon their prominence within their respective industry, and eliminated niche players and small-time operators. Companies such as Jetblue were also eliminated from the list based on recent unfavorable information.

As TTAC contributor Michael Karesh will tell you, that’s a lot of statistical tomfoolery. Even so, BusinessWeek’s conclusions are legitimate enough for water cooler analysis.

When not engaging in automotive floccinaucinihilipilification, I work in an industry highly dependent on top-notch customer service. I know first hand that providing class leading service is no accident. My company pays research firms to contact our customers to determine whether or not they’re satisfied with our service. Each month survey results are tracked, analyzed and acted upon by all layers of management.

Cadillac achieved distinction because their service organization is committed to world class customer service. Cadillac developed a strategy for delivering upon that commitment, and executed it.

To wit: last year, Cadillac took a page out of Lexus’ playbook. They empowered their dealers to decide for themselves if The General should honor warranty repairs after the warranty had expired. Additionally and at long last, Caddy now provides loaner cars to all customers while their ride is in the shop.

On the corporate level, Cadillac provides its dealer with large financial incentives– up to $100k per quarter– for maintaining high levels of customer service. Cadillac General Manager James E. Taylor says the program is worth the expense. He says buyers are five times more likely to buy another Caddy if they have a good service experience over a bad one.

You don’t have to be a Corvette owner abused by a Chevrolet dealership to know that Cadillac’s elite customer service status is evidence that there’s healthy tissue amid the gangrene afflicting the General’s seven other domestic limbs. Yet BusinessWeek’s survey results hint at the storm clouds gathering around this silver lining.

While Caddy scored 47 points higher than the auto industry average for customer service, only 51% of survey respondents said that they would definitely recommend the brand to other prospective buyers. By comparison, 79% of USAA customers said they’d recommend the brand. Seventh place Lexus and seventeenth place Porsche outscored Cadillac at 55% each.

This statistic is telling. It examines the composite buying and ownership experience, rather than just satisfaction with service. A person will only recommend the brand if they were also satisfied with the quality, reliability and prestige of the product, and are satisfied that they got a good deal (value).

While there’s no doubt Cadillac dealerships are vigorously pursuing customer service on the sharp end, the brand’s recommendation score is lower because their overall experience is compromised by the oft documented design and (perceived?) reliability woes that continue to plague General Motors.

Cadillac customer service is proof positive that [at least] one cylinder in GM’s corporate engine block is firing, but the company needs to be firing on ALL cylinders to reverse its terminal trajectory.

Customer service honors do nothing to relieve GM from constricting union contracts and burdensome legacy obligations. They don’t cure The General’s dependence upon light trucks. Or improve its ability to produce profitable small cars. Or eliminate its bureaucratic morass. Or prevent corporate bean counters from neutering innovative designs with cheap components. Or help the company divest wayward brands. Or focus its product offerings. Or increase the speed of product improvements.

Anyway, never let it be said that TTAC is incapable of giving any automaker– foreign or domestic– the respect it deserves. Cadillac’s customer service is a shining star in America’s automotive firmament. If General Motors addresses all its other problems with equal determination and commitment, the company might just pull itself out of its death spiral. We can only hope.

[To read the whole "Customer Service Elite" click here.] 

By on February 21, 2007

x05co_ft049ar222.jpgA recent post questioned the relative power of engineers and MBA’s in the automotive industry. A quick scan of corporate rosters reveals that the biz brains control most companies. The hierarchy makes sense; automaking is a business. Yes, but– whether their MBA's came from Harvard, Yale, or Vinny’s School of Business and Mortuary Services in Hoboken, the “suits” should know that too much unsold inventory is a bad thing. As a corollary, continuing production as unsold inventory piles up is a very bad thing. As in fatal.

Last year, Tommy LaSorda’s mob over at Chrysler put the theory to the test. At one time, the guys stuffed Chrysler’s “sales bank” with 100K excess vehicles. And there they sat, waiting for the dealers to catch up and cough up. After drastic production cutbacks and “if you’re breathing you’re approved” financing offers, dealers managed to whittle that number down to something a little less, um, dangerous.

The holiday break certainly helped; the two week shut down cut off the unwanted flow at the knees. As the sun rose on the New Year, Chrysler’s supply was closer to the industry’s Maginot Line: 60 days. The carmaker claimed a 51-day supply of 300's, a 68-day supply of Jeep Libertys and a not entirely horrendous 110-day supply of gas-guzzling Dodge Rams.

When production started again, inventory levels rose with tidal inevitability. In January, Chrysler averaged 14 sales per dealer. Dodge dealers dealt 28 sales apiece, and Jeep dealers averaged 13 sales per store.

The Chrysler Group then added an estimated 152K new cars to their inventory. And so, by the first of February, Chrysler/Dodge dealers sheltered a 78-day supply of 300’s, a 98-day supply of Libertys and a 111-day supply  of Rams.

Meanwhile, GM dealers are also choking on product. As of February first, GM’s “Like Always” brand (a.k.a. Saturn) had a 230-day supply of Ions (which is only 29K units, but there you go). GMC dealers were sitting on 20K or 211 day’s worth of Yukon XL’s, a 98% increase from January’s 113-day supply. 

And the hits just keep on not happening. In January, Buick dealers averaged just four new car sales per store. No wonder they have a 170-day supply of LaCrosses and a 116-day supply of Lucernes.

Ford can’t afford to laugh at their cross-town rivals. Mercury dealers only managed to move six cars apiece in January, staring down the barrel of 7K unsold Montegos (enough to last 147 days). Ford stores averaged just 35 sales each last month (mostly trucks), with 24K post-pre-Taurus Five Hundreds (a 169-day supply) going nowhere slowly. 

In a declining market with hundreds of available models, Toyota is the only transplant that seems immune to the temper of the times; they’ve got low supplies of, well, everything and an industry leading 126 sales per dealer.

Meanwhile, Honda holds a three-month supply of Elements and Ridgelines. Nissan can’t shift enough quirky Quests (144 days), Frontiers (122 days) and Maximas (113 days).

Even so, thanks to hot-selling Fits (25-day supply) and CR-Vs (19-day supply), Honda stores are cranking out 87 sales per dealer. While Nissan thanks its lucky Altima (51 days) and Versa (52 days) for helping dealers achieve 68 sales per month.

Mitsubishi? Not so good. The automaker started February with 3400 Eclipse Spyders (a 275-day supply). Relatively speaking, the Dodge-built Raider pickup is a hit. At the end of December, Mitsu had a 165-day supply. By the start of February, inventory had dwindled to 149 days. Of course, that’s still more than double the industry benchmark…

While manufacturers are quick to blame excess winter inventory on seasonal fluctuations, here’s the bottom line: unions.

Common sense says that when sales drop, you cut production. Unfortunately, the automakers’ contracts with the United Auto Workers (UAW) mandate that they must continue to pay their employees full whack even if The Big 2.5 cut back or stop production.

They’re caught in a classic Catch-22. Should they pay workers to do (and produce) nothing, or keep the lines running in hopes they might sell a few more vehicles?  Either way they’re screwed.

Rather than force a showdown with the UAW, automakers are going hey diddle diddle, straight up the middle. They’re paying the workers a big pile of cash up front to go away forever. Market share may be lost forever, but hey, they're gonna hit something and that’s the way it goes.

Even with the buyouts, supply continues to outstrip demand, leading to drastic deals. Buyers looking for bargains wait for the desperation sales and the cars’ reputations suffer accordingly. Brands become synonymous with “cheap”– regardless of product quality. Sales fall further as most consumers turn to undiscounted brands, figuring they must have higher quality. (There’s your perception gap.) And the production lines keep moving.

One way or another, it’s a death spiral that has to end. 

By on February 20, 2007

vw_rabbit_emblem222.jpgThe automotive media have their hands full chronicling the slow motion train wreck known as The Big 2.5. But there's another pile-up in progress. Here in the States, Volkswagen of America (VWoA) has transformed itself from a highly profitable purveyor of mesmerizing motors to a struggling brand with an ugly, overpriced and unpopular lineup. To properly parse this fall from automotive grace, let's start with the Phaeton. 

The Phaeton was VW's uberluxe sedan. The concept was so brand-defiling that the normally sycophantic buff books felt free to unleash juvenile taunts about the $70k “people's car.” While the VW-badged Mercedes tank killer gave birth to the immensely lucrative Audi A8 and Bentley Continental GT, it was an epic miscalculation that revealed a startling lack of focus. 

The Phaeton landed in America (with an almighty thud) in 2002. By then, the company's wandering eye had placed its U.S. operations in harm's way. The core of their product portfolio– which is to say every car other than the Phaeton– was decidedly stale. From 2001 to 2005, VWoA sales fell down some 37%, to 224,195. Even worse, the Germans didn't seem to care.

The Jetta and Golf ranges exemplify the product neglect. While the rest of the world savored the Golf MK V in 2003, the older MK IV models hung around in the U.S. until 2005. The competition grew larger, more powerful and less expensive; the centerpiece of VWoA's U.S. lineup stood still. Volksie's rep for clever and compelling advertising nosedived as well; the brand lost both its populist edge and its competitive advantage.

When the new Jetta and Golf Rabbit finally arrived (last year), the real trouble began. Whereas the previous Jetta was a tidy, micro-luxury car that epitomized the VW-Audi design language of the day, the new Jetta looks like a badly photochopped Toyota Corolla. Bizarrely, VW nailed the Jetta's design in Europe; subsidiary Skoda’s Octavia is a far more coherent proposition. 

The Golf arrived in better shape, spared the Jetta's awkward C-pillar and rear end. But the company's decision to retrofit the new model with the old American Rabbit nameplate (foreshadowing Ford's Taurus recall) highlighted their creative distress. Clearly, VW's US executives were trying to hearken back to a kinder, gentler time– before Japanese transplants stuffed the U.S. car market full of highly evolved and constantly evolving small car choices.  

VW has also widened the schism within its products' personalities. While the current GTI's engine makes it a terrific hoonmobile, the Rabbit's, Bug’s and Jetta's powerplants are less fun than a Form 1040. Their 2.5-liter inline five cylinder mill combines the fuel economy of a six (25mpg) with the power of a four (150hp). It's slow and buzzy AND loses the mission-critical fuel economy sweepstakes to its 35+ mpg Japanese and Korean competitors.

Diesel engines might have rescued the entire VW lineup from such ignominy. Unfortunately, the VW Group's amazing range of fast and frugal oil burners fell afoul of California emissions regulations. Next year's California-compliant Bluetec clean diesel could presage a turnaround, but VW should have found better motorvation in the meantime. Where is the magnificent Twincharger engine, with a supercharger and a turbo, putting out 150 horses while yielding 40 miles per gallon? 

Meanwhile, VWoA has failed to leverage its brand equity to exploit new niches. The Touareg SUV was a start– and a lousy one at that. Sales of the unpronounceable, under-promoted, gas-hungry five-seat off-roader fell 43.7% last year. The equally unpronounceable Tiguan CUV arrives sometime next year to take on the updated CR-V, Freelander and others. Given the large temporal stretches between VW model updates and their U.S. appearance, we could be looking at a provisional respite.

As other manufacturers deliver new compact cars, VW's showrooms are bereft of four-wheeled frugality, save for ageing Jettas and Bugs, expensive Golfs and unattractive Passats. Volkswagen already makes a sub-Golf car, the Polo. That should be the new Rabbit. And if we're looking for opportunities, what happened to the VW Bus concept– a slam dunk if there ever was one?

As far as anyone knows, Volkswagen still wants to sell small cars at premium prices. News flash: to do that you must offer something premium. Standard leatherette isn’t enough. Vee Dub’s once legendary reliability is now among the worst in the U.S. market. The brand's charming design and class-leading driving dynamics are also fading into the mist of time. 

Toyota has proven that you can conquer the world with focus, flexibility and, above all, speed. If VW wants to get back into the race, it must realize it IS a race. It's got to find new niches, refresh its models more quickly and get ahead of the powertrain development curve. If it wants to succeed stateside, the stodgy German brand must get its Fahrvergnügen on.

By on February 18, 2007

rekord222.jpgOur first car was a navy blue Opel Kadett. My father was off to sea; my mother took us on an inaugural daytrip. When my father returned to the Norwegian mainland, he dismissed the car as too small and upgraded to an Opel Kapitän. This was followed at short intervals by an Opel Rekord and an Opel Admiral. (The hierarchical naming scheme of Opel marketing in the 60s-70s was pretty obvious.) I’m sure my father would have moved to a Senator with time– but he was ready for a Mercedes. Once he’d switched allegiances, he never looked back.

They were good cars, the Opels, but they were also ”’tweeners”: the brand you bought until you made enough money to move on to something better. Then as now, Teutonic carmakers offer such a wealth of quality choices that it’s hard for Opel to stand out. For the last two decades it’s been the ”we’re here too” brand: a low to middle market alternative to higher-priced, better-regarded imports and homegrown ”names;” roughly akin to Chevrolet’s current position in the U.S. 

And now GM has decided to populate its ailing Saturn brand with Opels, both platform derivatives (Aura) and outright imports (Astra). The American brand born as GM’s ”import fighter” is down to relying on imported European design, technology and production for its salvation.

The irony is delicious, the choice of donor inauspicious. Although Opel is currently undergoing an extensive product redevelopment program, the Euro-brand’s tweener mainstream products are a stretch as pinch hitters for a quirky niche player. 

It’s hard to tell what GM has on its mind these days. They’re building Opel-platformed Saturns, Vauxhalls, Holdens, Chevrolets and Saabs (designed in Germany, sometimes rejigged and rebadged as Cadillacs). While platform sharing and international parts commonality shouldn’t be an impediment to shrewd, sustainable and distinctive branding, you wouldn’t think it from looking at the products coming from GM’s mashup of mid-market models. Can Saturn carve out a name for itself deploying generic German motors? Not likely.

There’s a Black Hole hovering over RenCen. This irresistible vortex devours any automotive brand with a definable identity, pulls it through the Event Horizon, and spits it back out again, bland and denuded. Every brand-specific selling point and distinguishing feature is lost, replaced by variations on the badge slapped to the hoods of identical look-and-feel automobiles. Saturn disappeared into that time – space distortion a long time ago. The new Aura may be a great car, but it’s not a great Saturn.

Hang on; what’s one of them, then? No one’s really sure anymore.

That such a fate should befall Saturn is tragic. Like Lexus, the brand was born an empty slate. Within a few short years, Saturn’s plastic-panelled vehicles, no-haggle pricing and customer-focused dealers built an intensely loyal following. While Pontiac stopped building excitement, Cadillac disappeared into a fug of mediocrity and Oldsmobile vanished, Saturn buyers stood by their brand. They knew they were a different kind of customer for a different kind of company.

This description once applied to Saab buyers. Talk about bad karma; The General bought the brand about the same time they started Saturn. As the import fighter found its inner quirk, the quirky Swedish brand born of fighters was stripped of its mojo. The General tried to turn Saab into a cut-price luxury marque (!), alienating the brand’s core customers. At the same time, GM’s mandarins gradually starved Saturn of product and marketing resources, until the brand’s soul was gone.

Which leaves GM with not one but two formerly distinctive brands that have lost their direction. The General is now talking about brand distinction, even as it begins badge-engineering on a global basis.

Too late. If GM had begun nurturing its divisions’ branding when it mattered, back in the late ’80’s, it would now have a lineup of companies serving a palette of consumer needs. Instead it has a vortex of brands pretending to be different, stacked up in the middle of each segment.

Saturn sits in a particularly tepid part of the goulash. Back when they began, Saturn dealers’ honesty, stress-free service and customer focus was a big deal. In these post-Lexus days of customer CSI’s and J.D. Power ratings, when Saturn hasn’t sold itself as the car customer’s best friend for over a decade, the brand’s [unstated] promise of warm fuzzies is no big thing. When they ditched plastic panels, product differentiation died. Which left Saturn with… nothing.

Take it from someone who’s grown up around Opels, Opelization will not save Saturn. Opel has no glamor to bestow upon Saturn; its geist is middle-of-the-road. This, of course, will not prevent The General from throwing its reserves at another researched-to-death brand melée. But Saturn’s customers have already moved on, as my father did with his Opels. And they’re not looking back. 

By on February 6, 2007

lees69ss2222.jpgThe Big 2.5 are floundering about, looking for new product ideas. And no wonder. Does anyone really think the beleaguered domestic automakers have the time, talent, energy and money to develop a Camcordima beater? A [profitable] B-segment car that can take on the Fit, Yaris or Versa? A luxury car to rival the Germans? As the founder of Federal Express said, the trick in business is not to do something a little better than the other guy. The trick is to do something different. Anybody remember the El Camino?

The iconic Chevrolet El Camino– half car, half truck– arrived in ’59. The original was based a full-sized Chevrolet Impala, sidewise tailfins and all. In 1964, the El Camino returned from hibernation as a variant of the mid-sized Chevelle/Malibu in ‘64. In ’68, the El was joined by the GMC Sprint, complete with an optional LS6 V8.

As “real” trucks increased in popularity, sales of the GM twins dwindled. Twenty years ago, after producing some 537k "elcos," GM pulled the plug on the Caballero (nee Sprint).

The El Camino was preceded and then mirrored by the Ford Ranchero. From ’57 onwards, the Ranchero’s development followed a similar theme, evolving atop the Fairlane, Falcon, Torino and Thunderbird/LTD platforms. The Ranchero faded from the scene in the mid-‘70’s, probably slinking off the automotive stage from the sheer embarrassment of having to wear imitation wood siding like a Country Squire.

There have been more than a few attempts at a nouveau camino. Most prominently, Subaru offered US consumers the BRAT (Bi-drive Recreational All-terrain Transport) and Baja (which bowed out last April). Chrysler served-up the Dodge Rampage and Plymouth Scamp (based on the Omni/Horizon platform). It must be said that none of these models set the American sales charts on fire.

The Honda Ridgeline is, perhaps, the only remaining modern equivalent, and it's WAY too ugly to consider a bona fide member of the "elco" family. Of course, the minivan platform sharing Ridgeline is [officially] a truck, which points to one of the main reasons why the El Camino disappeared from the scene.

When federal CAFE standards were introduced in ’75, the emissions and mileage requirements were far tougher on cars than “light trucks." A burgeoning selection of small pickups (e.g. the Ford Ranger) helped put the last nails in the El Camino's coffin compatible coffin.

New CAFE legislation bases required mileage on a given vehicle’s footprint, rather than averaging out an entire fleet. So, while trucks are still less hampered than cars, an El Camino shaped door has opened. The fact that Ford has completely neglected the Ranger and Dodge has supersized the Dakota only helps matters.

Ford has all the ingredients in its corporate cupboard to resurrect the concept. The Mustang needs only a little rework from the driver’s seat back. Use the same doors, quarter panels and rear floor; chop the roof, add a vertical window and the interior of the load bed, and there you have it. (The ‘Stang’s “antiquated” rear axle would become a genuine advantage/selling point for load luggers.)

For less than FoMoCo pays Carroll Shelby to sign a few autographs, a Ford is born. Call it the Ranchero and brag that it’s the fastest pickup on the market. That would spike up Mustang sales, just in time to help fight off the two C’s (Camaro and Challenger).

Chrysler could also resurrect the genre. The 300/Magnum/Charger platform is rear wheel-drive (a must if a truck is to have any kind of macho credentials) with a wide variety of engine choices. Of these, the Magnum is the best candidate for “caminoization.

Since it was designed as a station wagon (despite whatever DCX wants to call it), the Dodge Magnum already has the required length. Get rid of the back doors, truncate the roof (but keep the “chopped” appearance), and finish off the bed. Voila! Instant niche vehicle. While they’re at it, DCX should reinforce the chassis a bit and offer a towing package. With the Hemi, the Magnamino could easily pull ski boats, jet skis and small camping or utility trailers.

FoMoCo and DCX will have to move fast if they want to be the first on the retro elco block. GM is set to import their Australian division's Holden Commodore as the new Pontiac G6. Holden sells an El Camino-like variant called the Ute that's just begging for an American passport (both the paper and the radar detector). If they don’t badge it a Chevy and sell it as an El Camino, I'm going home. And yet…

The Chevrolet SSR reminds us that niche vehicles are a risky business. But the Big 2.5 have their collective backs against the wall. If they make a few low-cost bold moves sideways, they just might find some of the new product salvation they seek.

By on February 1, 2007

checker-sm222.jpgWhen Ford threatened to pull the plug on its Panther platformed rear wheel-drive cars, the livery and taxicab companies howled in protest and Ford backed down. Ford’s ancient leviathans are welded to the new car lot, but they’re a carriage trade mainstay; there’s no cost-comparable replacement. While rental fleets favor smaller econoboxes and mediocre midsizers, taxis, liveries and police departments still favor big, basic, practical, roomy, reliable, robust, rear-wheel drive automobiles. Sounds like it’s the perfect time to resurrect the Checker Marathon.

In the early 1900’s, America’s taxi business was booming. The demand for cars was so high that Checker Taxi of Chicago contracted with Commonwealth Motor Company to assemble taxicabs using bodies built by Markin Auto Body Corporation. The companies merged at the end of 1921. The Checker Cab Manufacturing Company was established in 1922.

By early 1923, Checker Cabs expanded its sales to New York City. In response to increased production demands (including sales to private buyers), the company relocated its assembly line to Kalamazoo, Michigan. Although the “Checker cab’s” driving dynamics were Paleolithic, the company’s vehicles were famous for their staggering durability and marvelous packaging. The design changed infrequently, which guaranteed consumer recognition and reduced maintenance and repair costs.

1962checker22222.jpgIn the late ‘50’s, as personal car ownership increased, the demand for taxi and other livery vehicles decreased. In 1961, to offset the decline in taxi company orders, Checker entered the consumer vehicle market. Although the Superba (a Checker taxi with more chrome and a nicer interior) was not a big hit, it helped keep the company afloat. In 1962, the Marathon replaced the Superba Special. In 1963, it became the company’s only commercial model. 

The Marathon remained virtually unchanged for the rest of its production run, save for a gradual switch to Chevy drivetrain components. Checker’s limited marketing campaign touted the car’s unchanging style and focused on durability, promoting it as a 200K-car. Meanwhile, taxi companies continued to be Checker’s largest market.

The 1970’s saw Checker sputter to halt. While its vehicles were still a paragon of durability, they weighed two tons and averaged fifteen miles per gallon. Soaring gas prices, double digit inflation, increasing costs, demand for fuel-efficient vehicles and the increasing reliability of Big Three iron made the purpose-built taxi an expensive proposition. Cab companies began converting conventional cars into taxis. Checker’s fate was sealed. The last new Checker rolled off the assembly line in 1982.

new-checker222.jpgSince then, no U.S. based manufacturer has stepped up to the plate with a line of vehicles specifically built for fleet use. With today’s reduced design, development and production costs (including platform sharing and flexible manufacturing), and plenty of component-related talent for hire, perhaps it’s time to resurrect the concept of a Checker Marathon-style vehicle.

If nothing else, such a vehicle could help limit the depreciation mainstream models experience when their rental fleets dump their inventory on the used car market. In fact, this “new Checker” could be parts-bin engineered by any of the domestic nameplates. There should be four models available for fleet discounts.

First up: a front wheel-drive midsize driving appliance for the rental car and company car fleets. It would have a distinctive body shape and one basic configuration, with limited color choices and optional satellite radio and nav system for those willing to pay a bit more at the rental counter.

doors2222.jpgThe other three models would be variations of the same full size rear-wheel drive car. The basic model would be a no-frills machine with a tight turning circle, hose-out interior, V6 engine and optional diesel. The package would maximize interior space; no need for high speed aerodynamic efficiency here (e.g. London’s Metro Cab and TX4). The base model would provide a basis for a blingified luxury-oriented vehicle with a V8, all the amenities and a cushy ride for the livery car and limousine/hearse conversion industries. 

Finally, there would be the law enforcement model combining the taxi platform’s robust underpinnings with a hopped-up V8 from the luxury variant and improved aerodynamics, suspension, brakes, and steering for the inevitable high-speed chases. The interior would be specifically designed to accommodate the various gear that has overtaken modern cop cars. It could even have a standard telematic system used to track the car and provide instant communications and diagnostics back to the station (think On-Star on steroids). 

There wouldn’t be any annual model changes, only running changes to keep up with the latest federal and state safety and environmental regulations. Prices would be based on volume sales, not individual units.

None of these fleet-oriented vehicles would be offered directly to the public. Eventually, they’d turn up in the used car market. But if they’re not worth much as used cars, so be it. There’s always someone out there looking for the cheapest transportation possible. It might as well be something built specifically for the job.

[RF interviews Checker Taxi Stand maven Matt Fry below.] 

By on January 30, 2007

a8fb4298222.jpgSince World War II, seeking national glory on the battlefield has become socially unacceptable. Countries now pour their national psyche into that great champion of industry: the car firm. As representatives of their homelands, automobile manufacturers live up to a national ‘meta-brand’, an image that is shared by its compatriots. National karma can now be read in meta-brands as if they were a pack of tarot cards.

Italian brands (Ferrari, FIAT, Alfa, etc.): hot, racy, and a little hydrophobic. French brands (Renault, Peugeot,Citroen, etc.): stylish, flamboyant and quirky. German brands (BMW, Mercedes, VW, etc.): technically proficient and austere, combining technical proficiency with a hint of condescension. America (Ford, GM): large, brash a bit dim-witted and powerful. Japan (Honda, Toyota, Nissan, etc.): reliable.

Building cars which do not conform to an established national stereotype is risky business. Honda, co-owner of the quality automobile mind space, tried to rebel against the Japanese meta-brand for anodyne family cars with the European-style NSX supercar. In spite of its impressive technical specification, the aluminium bodied mid-engined marvel never caught the market’s imagination. In 2005, the company sold 207 NSX in North American, while Ferrari found homes for 1,420 of their fragile steeds. 

The Germans "get it." VW knows its national meta-brand embodies an image of solid quality at a premium price (a fancy way of saying they overcharge us for a car made the way it should be in the first place). Facing an onslaught from Far Eastern value brands, VeeDub needed to offer products further down the price range that wouldn't sully its reputation for quality.

So, in 1986, they became majority stockholders of Spain’s SEAT. In 1991, they bought [what was then] Czechoslovakia’s Skoda. In both cases, the Germans were successful. They tidied things up a bit, slipped German platforms under foreign bodies and called it sehr gut.

The commercial logic of assembling brands to surmount meta-brand limitations suggests that there could be a great deal more cross-border portfolio building. By now, one would expect the Far Eastern brands to be sniffing round BMW and Porsche.

That that they are not doing so is partly because the newcomers are still far from reaching their potential. They do not yet have the means to be taking on the world’s automotive aristocracy. In any case, the feeding frenzy is going on elsewhere.

British brands deserve their place amongst the grandees of the industry. Yet the British meta-brand is deceptively multi-faceted. While the overall reputation is for conservative styling and country house interiors, the cars themselves seem to fit every niche imaginable.

Germany may make the best luxury cars in the world, yet Rolls-Royce is the most famous. Italy may have Ferrari and Maserati, yet both are eclipsed by the divine Jaguar E-Type. Jeep may be home on the range, but Land Rover rules an empire. Britain has a marque for every purpose. But the extraordinary thing is that the Brits are the very last to understand what they are about.

Take the [small cap] Mini. It’s one of the great British icons, whose launch supposedly heralded a small car revolution. Leaving aside some of the original model’s dead-end technology– such as the gearbox in the sump and the rubber-cone suspension– the only thing really wrong with the car was precisely what the British motorist considered its greatest asset: its diminutive dimensions.

BMW, however, saw the Mini as a kind of cute (if poorly built) sports car. When it designed a successor, the result preserved the sparkling ride and cheeky styling, but presented it in a much larger package. Unlike the original, the [all cap] MINI is now a major export success.

How about Rolls-Royce, perhaps the most imperious marque on Earth? The British believe quality comes with hand-crafting: building the cars like they were stately homes, complete with squeaky leather chairs and a gargoyle on the hood. Then there was Bentley, famed as the fastest trucks in the world. Both these brands are now in German hands– and all the better for some salutary lessons in quality standards.

This is not a story of British industrial decline; foreigners do not pick up British brands out of charity. But there is a caveat: the soggy little island can be a quagmire for the unwary.

Witness poor old Jaguar. What did Jaguar ever do to deserve lectures from Ford? As an underdog– or should I say undercat– Jaguar had the bravado to snarl at the opposition with inspiring designs. All that was lacking was quality, an area in which Ford were hardly qualified to provide advice.

And so the Yanks stuffed Jaguar so full with cash it grew corpulent and complacent. Ford is now on a crash diet. Perhaps that will be the lesson it can teach its British pet. 

In short, the deck may be reshuffled, but the wise automotive players know that the cards remain the same.

By on January 25, 2007

new-site222.jpgTo say the internet has become an important marketing tool for automobile manufacturers is like saying radial tires are beginning to catch on. And yet Forrester Research reports that many car companies' websites depend on clunky photo galleries, confusing spec tables, complicated car configurators and other layout clichés. “You can’t frustrate and annoy people into liking your brand,” counsels Ron Rogowski, one of the Forrester's senior analysts. “But a lot of automotive websites seem to be trying to do just that.” 

Forrester reviewed 900 automotive websites, looking at site organization and design. They found lots of server space for improvement. I spoke to Rogowski about the deficiencies. “Illegible text is the number one complaint," he revealed. "It’s hard to believe in this day and age that text would be so difficult to read on so many sites.”

Rogowski also chastised automakers for raising consumer expectations, and then failing to fulfill them. Brands run highly-focused, deeply sensuous print ads and TV spots that point customers to websites that are hum, without nary a ho in site. “Boredom is a brand killer,” Rogowski said, startling Camcordima drivers everywhere.

Rogowski singles out BMW AG’s site for electronic excoriation. As any pistonhead will tell you, Bimmer’s corporate mantra is ‘the ultimate driving machine.’ By contrast, their website is the ‘ultimate connecting your DVD player to your television experience.’ BMW’s car configurator came in for a critical caning; Rogowski called it staid and antiseptic. In fact, navigating BMW’s website is only slightly less of a chore than tuning-in an AM station via iDrive.

As you might have guessed, Rogowski is brand-o-centric. He implores car companies to creates user interfaces in keeping with established brand values. He singles out MINI's site for praise, lauding it for being as cheeky, dynamic and engaging as their vehicles.

Despite the MINI template, brand e-faithfulness is easier said than programmed– as illustrated by the fact that some of the best brands in the biz have some of the least compelling websites.

Jaguar’s site looks like a layout in Vogue– which does nothing to reflect the brand's visual warmth (burled wood anyone?) or leverage their heritage. Positioning themselves as a fashion accessory leaves a lot of dyed-in-the wool enthusiasts in the dust. 

Cadillac's website is guilty of the opposite sin; the opening animation focuses entirely on collector Caddies and their owners; it fails to offer a single compelling reason to purchase a new model. Even those brands with kick ass multi-media (e.g. Porsche) bury the good stuff in relatively obscure sub-menus. 

Audi’s site warns you, right up front: never follow. As in, anyone persistent enough to follow them into the sub-menus should abandon all hope of keeping with the program. Everything on Audi’s website looks and functions like medical equipment– and not in a good way.

At least Audi knows it’s suffering from sudden intended click-through. Speaking at the Automotive News World Congress January 16, Audi’s Head of Audi of America announced that he was frustrated Audi isn’t considered one of the world’s premier brands.

Johan de Nysschen has challenged its online agency, Factory Design Labs, to exploit the web’s “anything-is-possible landscape.” "Our goal is to drive the digital lifestyle and allow our prospects and customers to be even more involved with our products as well as demonstrate our product superiority."

More and more companies are sharing Audi’s realization that the internet is where image building and product familiarity gets done. Some even recognize that web-based branding is a whole new ballgame.

As an interactive medium, people expect more clarity of vision and functionality of form from a website than they do from a print ad, TV spot or brochure. From a design POV, the site’s graphics, sound and function all need to mirror a company’s values and position.

Manufacturers are also beginning to understand that websites are more revealing than other media. If a brand is ill defined, the murkiness becomes instantly clear; an effective website cannot be based on a broad, dysfunctional message. The feedback loop between image and internet grows tighter every year. Strong branding means a better web experience, a better experience enhances the brand. 

This movement hints at a fairly significant change: distinction equals success. The preeminence of big tent, something-for-everyone brands is declining as their message gets lost in static. The narrowly defined, purpose-driven brands are in accent.

There is, of course, a large piece missing: true interactivity. Branded automotive websites do not encourage the kind of [relatively] free, intimate and ongoing interaction between content provider and consumer that give sites like TTAC their power. Car companies need to treat websites as an open portal to the people who pay the bills.

When (not if) that happens, the car business will undergo its most profound evolution, as the gates to mass customization and other important commercial developments swing open. Meanwhile, well, that’s entertainment!

By on January 18, 2007

2007_tundra_152222.jpgTrivia buffs, scholars of ancient history and encyclopedia-reading geeks know the first month of the year is named for the Roman god Janus. Janus didn’t have any special powers. His entire claim to fame was based on having two faces, one on the front of his head and one on the back. Since Janus could keep an eye on what was coming as well as what was going, he was placed in charge of gates and doors, transitions, and beginnings and endings. Being two faced also meant he could talk out of two mouths at the same time. Kinda like Toyota.

Toyota spends millions of dollars touting themselves as the automotive equivalent of the Sierra Club. They’re out to save the planet with their Hybrid Synergy Drive and put OPEC sheiks on the public dole with their fuel sipping econoboxes. They’re so magnanimous they’re sharing their hybrid technology with Ford and Nissan (and anyone else willing to pay the price).

Toyota’s even bragging that their new manufacturing plants will produce no waste to clog the landfills. Yes, the birds are singing in the trees and daisies are blooming in the meadows thanks to Toyota. And then there’s the Tundra.

Toyota makes no bones about it: they want to be a major player in America’s lucrative full-size pickup market. After years of twiddling their toes in the water with a size 30-slim Tundra, they finally cowboyed-up and built them a gen-u-ine giant. The new Toyota Tundra is every bit as gi-normous and gluttonous as the Dodge Rams, Chevrolet Silverados and Ford F150's it faces. 

And they’re promoting it heavily. Over three-quarters of Toyota's NAIAS stand was dedicated to the Tundra. The display featured the he-man image the Japanese automaker wants to associate with their mega machine. And you can bet the Tundra’s advertising budget will be equal to or greater than that of their tree-hugger specials. Combined.

Meanwhile, Toyota’s playing footsie with federal regulations. Their Texas-built pickup hits dealer showrooms in February– at the same time other manufacturers are beginning to introduce some of their 2008 models. But Toyota is adamant the new Tundra is an ’07. That’s because the U.S. government is changing the way they calculate the fuel mileage ratings for ‘08 model year pickups. 

The new procedures will make the numbers on the window sticker more realistic (i.e. lower). ToMoCo can’t risk lower numbers against competition’s higher-rated ’07 models. They’ll get to display the higher numbers for a few months before the (unchanged) ’08 models go on sale this fall with ratings 8 to 12 percent lower than the ‘07s.

As you can imagine, Toyota’s heavy emphasis on their new gas-guzzling leviathan hasn’t gone unnoticed by auto-oriented environmentalists. In fact, environmental groups are finally facing reality: their automotive eco-darling is (gasp!) nothing more than a business. A business that conforms to all CAFE regulations, of course,  but will do whatever it takes to make a profit. 

Some environmentalists are none-too-pleased to discover Toyota’s enviro-friendly posture was based more on marketing and profits than saving the planet. The greenies are indignant, and they're striking back. 

Backed by groups like the Rainforest Action Network, The Freedom From Oil Campaign (FFOC) has put Toyota on notice: no more “free pass.” According to an FFOC statement, the group's launching a new campaign designed to ensure that “auto makers are taking the interim steps needed to show that they are truly committed to fuel economy and not just good PR.” 

While commending Toyota for its past record for fuel economy, they’ve added the transplant to their list of targets. It may not be long before the FFOC organizes pickets outside Toyota dealerships, as they’ve done at Ford dealerships. The Toyota Tundra could become the tree-hugger's next lightning rod, replacing the (so-ten-minutes-ago) Hummer H2.

You have to wonder why it took environmentalists this long to see the light (heavy?). Toyota’s trucks have never been what you’d call “parsimonious” with petrol. The automotive press has consistently panned their two hybrid SUVs for their disappointing real world fuel economy. Once the 2008 testing procedures are in place, it’ll be interesting to see where Toyota falls on the charts and how the more realistic numbers will affect opinions of their greenmobiles.

As a company that exploits its environmental responsibility, Toyota can't be pleased to find the eco-radicals on their case. The company will have to spin like a whirling dervish to handle the fallout. I’m confident, though, that they’ll pull out all the stops to protect their green rep. I can see it now: “Clean air for oxygen breathers courtesy of Toyota’s Hybrid Synergy Drive and carbon dioxide for plant life by the Toyota Tundra. We have the ecosystem covered!” Janus would be smiling– on both sides of his head.

By on January 11, 2007

twreck222.jpgThere’s a Lincoln ad on the back cover of this month's Automobile mag. It’s a rear three quarter shot of an MKZ on an empty road in a moody landscape, parked in front of a train crossing. A five line poem referring to astronautical countdowns, racehorses at the gate and quivering arrows hovers above the barrier. The last line is a little unsettling: “Ready or not, here I come.” (Uh, you might want to wait for that train to blow by.) The ad raises an interesting question: does Lincoln’s marketing department have any idea who might want to buy their car?

An hour after contemplating the ad, I caught site of a huge toothy grill glinting in the winter sun. My first thought: I’ve unfairly dismissed the MKZ’ sex appeal. As the rest of the model’s mid-market metal hoved into view, I returned to my original assessment. But I was captivated by the driver. She was straight out of central casting. Harry? Send me a woman of a certain age with perfectly coiffed grey hair, wearing a twin set and pearls and half glasses attached to her ample neck by an elegant chain. The MKZ suited her like a dry martini.

Well of course it did. I didn’t need to face her withering stare in a focus group to know she and her not-so-hot-rod Lincoln were made for each other. Bargain basement snobs need apply. More to the point, she was definitely NOT the type of woman to sit in her MKZ in the middle of nowhere waiting for a train barrier to rise so she could hammer the throttle and disappear in a cloud of front wheel-drive rubber. I could easily imagine her tapping the wheel with a manicured fingernail, pursing her lips, looking at her watch, wondering about lunch. 

I’m not saying this highly groomed battle axe was a “typical” MKZ buyer. I have no doubt Lincoln’s marketing department has discs of demographic data detailing the age, sex, income, location and belt size of their average customer– and Dame Edna’s not it. Even if she was, I’m certain there were long meetings on Madison Avenue and in The Glass House hammering out who the average Lincoln MKZ buyer should be– or who the average buyer thinks they should be– and it’s not her. Still, I’m beginning to believe automakers’ marketing efforts are more than a little misguided.

I discussed this idea with my local freelance marketing maven. Marketing be damned, I argued, it’s all starts with product, which begins with branding. Does it really matter how Detroit pitches a ride if it’s another one of those almost-but-not-quite-there products that doesn't conform to the brand's identity (if it even has one)? "Reach higher" sounds good to me, but how about making a car worthy of aspiration? He countered that there’s nothing particularly wrong with Detroit's brands or machinery. They just don’t know how to sell the metal. What successful person buys a Cadillac based on two-thirds of the self-evident truths identified by The Declaration of Independence– especially when its sold out of the automotive equivalent of K-Mart?

After realizing that not everyone shares my product passion (if they did, no one would buy half the crap I’ve driven), I’m beginning to appreciate his perspective. To wit: just inside Automobile’s cover, there’s a double-page spread with an Edge hovering over New York’s Hudson River (what is it with flying cars these days?). A couple promenades in the foreground. The woman is looking the other way. The guy is looking in the direction of the CG crossover– without actually seeing it. In the background, another couple is oblivious to the levitating automobile. The headline? “The Edge is never dull.” The body copy? “All-new Edge with attention-grabbing styling.”

Hang on; the Edge IS dull. Handsome yes; but dull. So what? Surely there are plenty of people who like that sort of thing. Surely Ford should identify what really makes the Edge unique and sell THAT. All this demographic obsession– where automakers shell out millions of dollars to identify a model’s “ideal” customer and get them to spill their subconscious desires– strikes me as an enormous waste of time and money. Why not just build something phenomenal and tell people about it?

In fact, the car industry is suffering from the same over-dependence on market research that led to Hollywood’s steady stream of po-faced rubbish. Of course, not ALL of it’s garbage– if only because of the law of averages is still in effect. But it’s clear that market research is filtering backwards into the design process, exerting more and more influence on what carmakers are building for whom. I’m not saying they should adopt the Field of Dreams strategy, but I reckon strong products from strong brands find their own market. Just look at the old folks clambering aboard Scion xB’s. How insanely great is that?

By on January 9, 2007

maybach_62_s-img_280.jpgWhen Maybach unveiled its tiny, cordoned-off piece of turf at the COBO Center on Sunday, its offerings were pinned against the back wall, stuck behind all the glitz that its corporate parent had to offer. Up front: the new Mercedes S-Class with 4-Matic replete with ice rink and the perkalicious Ocean Drive concept. And only one stand (and a world) away: Honda, whose inexorable rise stands in direct contrast to Maybach’s inevitable decline. The Maybach reps had to feel outpaced, out-planned and outdone. In truth, their golden goose is well and truly cooked.

The upmarket German luxury marque has had its day– again. Armchair analysts have watched with little shock and much awe as Mercedes-Benz took the venerable old Weimar marque off the dusty shelf in Stuttgart, refinished it, and sent the four wheeled Phoenix soaring into the luxury marketplace; only to be unceremonious shotgunned by older nameplates from drizzly Albion. And now Maybach’s a hit-and-run victim of Mercedes’ corporate ADD, hoping against hope its masters didn’t sign a DNR.   

281206-l-rr-l222.jpgContrast these sad affairs of state with Maybach’s drop-dead gorgeous, German owned, British branded rivals. Detroit sees Rolls Royce unveil their stunning drop head coupe. Bentley is performing a lovely reprise of its seven– count ‘em seven– sterling models, including the GTC that scooped The Robb Report’s COTY. While there’s something to be said for evolutionary consistency rather than radical overhaul (911 anyone?), Maybach has no postwar history to live up to. They’re set to hawk the sporting version of the for-chauffeurs-only 62S to a yawning media circus.

A “normal” Maybach 62 will haul its overstuffed, elongated, business-class carriage from standstill to 60 in an impressive if almost completely irrelevant 5.9 seconds. The new and improved 62S will perform the same task in– drum roll– 5.2 seconds. Oh and the springs stiffen just that bit more in sport mode, the brakes are a little sharper, and so on.

blur.jpgThe owner of the first 62 variant is best advised to keep that AMEX centurion card holstered in his alligator wallet; thereby saving himself the $100k swap-out expense. He should then instruct his deprived driver to simulate the difference by mashing the go-pedal when traveling downhill while there’s a stiff, direction-matching breeze.

It seems like only yesterday that the Queen Elizabeth II and the Maybach 62 sailed into New York together before the eyes of an admiring world. For that one, brief, shining moment– the interval between the Maybach’s helicopter ride off the Cunard ship and BMW’s introduction of the all new Rolls-Royce Phantom– Maybach owned the $300k+ market. 

chaueffeur.jpgIts reign was short lived, and rightly so. Let’s face it: the mighty Maybach was born old hat. When it made its début, the Maybach models were already a relic of 1990’s design. Fast, comfortable; sure. Stylish and sexy? Nein. Maybach never really delivered the competitor crushing excellence that the born-again division had set out to achieve. That special, bespoke quality that the Spirit of Ecstasy embodies, the M&Ms never owned. The Maybach looked too much like the (W220) S-Class, and its passenger flew business, not first. In its intended price bracket, soullessness is a felony offense. 

The killer blow: Maybach’s Mercedes masters decided to give the new S-Class a glamorous reskin and left the Maybach just so. The current summit of the Tri-Star’s achievement is a bolder and bigger design that exchanged creased sides for elegant curves and bulging arches. In fact, the new S (not to mention the semi-Maybachian CLS or the equally customer-challenged SLR-McLaren) makes the Maybach 57 and 62 look dowdy and demure. And while the Maybach’s motors are Herculean, there’s nothing slow about the uber-schnell S-Class models; the S65 AMG is 1.2 seconds quicker from zero to 60 than the new Maybach Sport, and far more agile in the bends. So how much is that extra legroom (and optional plasma TV) worth?

exerlero.jpgOn that point, the market has spoken. You can buy a 12k mile ’05 Maybach 62 from a New York dealer for $229k (or less); down $156,600 from the as-new ’07 price of $386,500 (without options). The Maybach’s forty percent depreciation suffers in comparison to “lightly used” examples of the popular Rolls Royce Phantom (27%), or a very bad night at the craps table. Sure, buyers at this price point can afford to take the hit, but that doesn’t mean they want to.

The best indication that Maybach is a floundering division: dealers are leasing them to hotels. When your most exclusive model becomes a glorified Lincoln Town Car, you’re done. Well, perhaps not. If Maybach builds the Exelero, there’s a shot. If ever there was a high-priced motor car that speaks of bespoke, the extreme Exelero is it. Why Maybach is NOT building the Exelero is a mystery almost as profound as why they started this whole business in the first place.  

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