Category: Industry

By on March 17, 2011

Carly Simon was right: When it comes to automobiles, these are the good old days. Don’t know which car to buy? No problem. Simply throw a dart at the listing of mass-market new cars for sale in the United States, purchase that car, and you can be more or less assured that you will experience 100,000 miles — or more! — of low-hassle, low-cost operation. The consumer expects that every car on the market is reliable, reasonably comfortable, and extremely safe by historical standards, and those expectations are met by everyone from Kia to Rolls-Royce. It’s a great time to be a new-car buyer, but there’s never been a worse time to be an automotive “journalist”.

Fifty years ago, a chummy cadre of insiders with million-strong captive print audiences lined up at an invitation-only perpetual buffet of manufacturer-paid perks and privileges. Today there are hundreds of media outlets, major blogs, and video producers all fighting for an ever-declining number of eyeballs, press cars, and wheel time. The journos of the Nixon era faced a delicious choice: either recommend 50,000-mile-life-expectancy garbage to the American driver and reap the considerable financial rewards for doing so, or fill up the poison pen and textually molest a lineup of sitting ducks like the Pinto, Vega, and Renault Le Car — while still making that bank. Their successors have a tougher job: explain the ever-shrinking differences between a vast array of perfectly competent automobiles in a manner which will generate “unique clicks” and repeat readership without burning too many personal and professional bridges. Get it wrong, and you’re history.

Scott Burgess got it wrong, but his mistake wasn’t an excess of ethics.

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By on March 16, 2011

With automakers keeping the incentive pedal pinned to the floor as they entered the new year, a price war has been brewing in the US market for a while now. Hyundai USA CEO John Krafcik has called the trend “a step backward for the industry,” pointing out that nearly every automaker had struggled to regain pricing power coming out of nearly three years of industry-wide weakness. But with GM and Detroit leading the way with high (if “targeted”) incentives, matched by uncharacteristically high incentives from import-brand rivals like Honda and Toyota, it seemed that nothing could prevent a volume-pumping, but profit-sapping price war in the US. At least until Japan was hammered by earthquakes, tsunamis and nuclear accidents. Now, with manufacturers and suppliers still struggling to understand the full impact of production shutdowns and reduced inventories, TrueCar has projected current price trends forward, and finds that supply interruptions could reduce supply to the point where prices actually start coming up again. Check out TrueCar’s spreadsheet on supply and pricing projections in XLS format here, or hit the jump for a few highlights.

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By on March 14, 2011

Honda’s in better shape than its contemporaries after QUAKEOLOPNIKPOCALYPSE or whatever our friends in the biz are calling this particular disaster. Although production will be stopped this week in several Japanese plants, the bulk of Honda’s automobiles worldwide are built, and sold, in North America. A little bird told me that Honda has weeks of Japanese-sourced parts for US production. Things are so good that the Big H can afford to donate a thousand portable generators (and five thousand gas cans) to the relief effort.

Let’s say production takes a while to come back, however. Here in the United States, that means dealers will face short supply of the Acura RL (who cares), Acura TSX (might be a problem) and Honda Fit (Uh-oh). Honda has an alternative to supply the latter. Will they take it, and make history in so doing?

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By on March 14, 2011

It appears that the Renault EV espionage case crazy train has rolled to a halt, as the FT reports that CEO Carlos Ghosn and his right-hand-man Patrick Pélata have apologized to the three executives they accused of spying. According to a Renault press release,

Mr Ghosn and Mr Pélata now plan to meet the executives, promising compensation for “serious prejudice” to their reputations and careers

And according to BusinessWeek, Mr Pélata will likely be offering his resignation today, as

Renault called an emergency board meeting for 4 p.m. local time that may lead to sanctions against managers involved in the case, two people familiar with the matter said. Prosecutors yesterday issued “organized fraud” charges against Dominique Gevrey, the security chief whose internal investigation led to the firing of upstream development chief Michel Balthazard and two other executives.

But, as AN [sub]’s James Treece puts it, Pélata likely won’t stay unemployed for long, as being fired for loyalty is almost a positive in the super-competitive world of high-level auto executives. The mystery now: did Mr Gevrey simply attempt to defraud Renault, or was he part of a coordinated effort to destabilize the French automaker? Gevrey won’t reveal the source of his information about espionage inside Renault, but we may yet learn more about this strange farce if he cracks under investigation.

[UPDATE via AN [sub]: Ghosn and Pélata plan to give up their 2010 bonuses and profits from 2011 stock options after they had to apologize publicly to the three men earlier on Monday, Renault said in a statement.]

By on March 13, 2011

Even if Japan’s nuclear power plants will be brought under control, even if roads, rails and ports are back up, the Japanese car industry will have to deal with a more serious problem: Blackouts.

On Monday, Tokyo Electric Power, or Tepco, will start turning off the power for three hours each to selected areas. This will happen once, in some areas twice per day. When the schedule was put up on Tepco’s website, the server crashed. That was just the beginning of the problems. Read More >

By on March 11, 2011

Amidst the rubble of earthquake and tsunami-racked Japan, a strange phenomenon: Three of the smallest local automakers suffered no interruption in production, while the very largest seemed to be hit the hardest. Toyota, Honda, and Nissan have all suffered some kind of production interruption since the quake hit, while Mazda, Suzuki and Mitsubishi remain untouched according to Automotive News [sub]. In a tragedy like this, some might be tempted to ascribe this division of suffering to some universal sense of justice, a cosmic leveling of Japan’s automotive playing field. But, as the map above proves, this twist of fate is purely geographic… Mazda, Mitsubishi and Suzuki happen to have all of their plants located well south of the affected area near Sendai. Besides, Subaru, one of Japan’s smallest automakers, closed five factories. There’s no making sense of a mess like this…

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By on March 10, 2011

Reuters reports that Saab/Spyker partner Vladimir Antonov has questioned whether Saab will hit its ambitious 80k unit global sales goal this year, saying

This means that the company could face capital problems

Thelocal.se provides a little more detail quoting Antonov as saying

I’m not involved in how the company is run so I don’t have access to the numbers. But according to earlier versions of the business plan, they have to sell 80,000 cars this year to stay with the plan. From my point of view, I think that’s a bit too optimistic.

If the goal isn’t reached it would be nice for Saab to have €50-70 million ($69-97 million) as a little something extra to lean on. We’re ready to provide that money if we’re allowed to do so by the [European Investment Bank].

Antonov went on to say that bringing in outside investors would be difficult and that if the EIB loan fell through, something he does not foresee, Saab could be bankrupt “in days.” Needless to say, Saab’s Chief Optimism Officer Victor Muller didn’t take kindly to Antonov’s remarks and is firing back in the press.

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By on March 10, 2011

Life as a Porsche owner/supporter is remarkably like being an Eric Clapton fan. You are continually assaulted with a veritable fusillade of utter and complete garbage created for no possible reason other than to squeeze every last red cent out of a thoroughly impressionable audience— Money and Cigarettes, the Cayenne, Clapton, the Panamera, Crossroads Festival 2010, the upcoming Cajun, the list goes on. Just at the moment when you’re ready to pack it in and find another object for your affection, however, you happen to put on the ’66 Bluesbreakers record or take a drive in the current GT3 or GT3 RS, which are likely to go down in history as the last great Porsches.

Last but one, anyway.

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By on March 9, 2011

The Freep reports

General Motors plans to add a second shift worth as many as 1,000 jobs to its Detroit-Hamtramck plant late this year, as the automaker prepares to ramp up production of its Chevrolet Volt extended-range electric car.

Current plans have second-shift workers arriving for training late this year and starting production in earnest in early 2012,

Now, it makes sense that any “more assembly jobs are coming” story would play big in Detroit, but does this mean GM has its suppliers lined up for a second shift of Volt production? Can the market support the increased volumes GM has been talking about (25k instead of 10k this year, 60k+ instead of the planned 45k next year)? As it turns out, those questions haven’t actually been answered yet…

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By on March 8, 2011

How did we miss Colin Bird’s Cars.com post about Buick outselling Lexus for the second month in a row? I suspect it’s because we aren’t on the GM-blogger approved-stories distribution list. Typically, writing a GM puff-piece after going on the free parrot-the-party-line trip means you’re then rewarded with a sweet whip to roll around and impress your friends. The only way your humble author is getting a Buick this week is by renting one. As Peter Green once said, oh well.

Back to the topic at hand. Buick outsold Lexus in February. Does it matter?

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By on March 7, 2011

What if Gawker redesigned their sites and people stopped coming? It’s a question being asked with more and more seriousness as the nice people at Sitemeter continue to display some genuinely terrifying statistics regarding pageviews for Jalopnik, io9, and the rest of the cutesy-name sites in the Denton Media Mafia, er, Family, er, Domestic Partnership. One recent chart suggests that Jalopnik readership has dropped by a staggering seventy-five percent since what’s been called “the worst site changes in human history, I mean, this makes that one crazy bridge somewhere that, like, wiggled and broke look like the Pyramid of Khufu, solidity-wise, kinda, uh, is my latte ready yet?”

Read on for the big picture and an alternative explanation for the crazy stats…
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By on March 5, 2011

When Toyota became the world’s largest auto manufacturer in 2008, they reluctantly accepted the title. Toyota knew that the title was not won by Toyota’s  strength, but by GM’s weakness. Toyota also was highly aware that the guy in front is everybody’s  target. Their worst fears became reality sooner than they thought.  Now, in an unusual departure from the usual Wolfsburg hubris, Volkswagen also realizes that too much success can make punch-drunk and lead to stupid or deadly mistakes. Read More >

By on March 5, 2011

Ever since the Renault spy story broke, we had our doubts. It simply did not pass the smell test. Now, the smelly stuff is hitting the fan. “France faced severe political embarrassment on Friday after carmaker Renault said the three top executives it sacked for industrial espionage in January might not be spies after all,” reports Reuters.

In an interview with Le Figaro, Renault COO Patrick Pelata, the man who was the driving force behind the scandal admitted: “A number of elements lead us to doubt.” He is not alone in his doubts. Read More >

By on March 4, 2011

When, in a former life, I wrote speeches for top execs at Volkswagen, I never made my guy admit failure. Bad for his career and my business. The secret phrase for full retreat was: “This is one of the many options we are looking at. We are in a changing world and must change with it.”

I must have a less circumspect colleague at Ford. Read More >

By on March 2, 2011

I don’t think the industry learned a lot of lessons from 2008—they will this time around

…said GM CEO Dan Akerson at the Geneva Auto Show [via the WSJ]. But which “lesson of 2008” is Mr Akerson referring to? Overproduction? Incentive and fleet sale dependency? There were so many lessons to be learned in 2008… right Dan?

It would not be a good thing to see $5-a-gallon gas right now.

Oh, he’s talking about getting caught flat-footed by gas price spikes. Fine, let’s ignore the other “lessons of 2008” and hash out the truth behind Akerson’s comment: is the industry ready for $5 gas? Remember, consumer choice tends to exaggerate changes in the price of oil. Or, is it possible that some OEMs are “too ready” for high gas prices? After all, if automakers overcorrect for high gas prices, profits will suffer when the spike subsides. Or is, as BNET’s Matt Debord suggests, Akerson just trying to get the market to price risk into GM’s stock value?

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