Remember the Converj concept Caddy rolled out for the Detroit show? You know, the good looking Volt coupe? The one that was held up as a reason to bring PNGV back from beyond the grave? Anyway, you probably had your hopes up for a quick production run. After all, GM’s Car Czar Bob Lutz hath already proclaimed that a production Converj would look “exactly” like the concept. So it’s official, right? Right? When Automotive News [sub] actually asks the question, Lutz’s maximum takes a moment to aknowledge the presence of reality. “Ready to go? Well, first we have to prove to ourselves that we have the money,” Lutz says. “And then that it’s a high enough priority to displace something else, and that we can actually make money on the vehicle, and that there is potential customer interest and so forth. We haven’t done any of that work yet.” So now we know: “proving to ourselves that we have the money” is step one (post-concept) for GM product development. With an estimated debt load of $60b and a market cap of you-depress-yourself-with-the-math, that process of “proving to ourselves that we have the money” must make for some entertaining material. Reality series!
Category: News Blog
While perusing the comments on the capsule SRT8 review, our own Karesh’s stood out, Specifically this part, “During media days at NAIAS I told every manufacturer who cared to listen (and a few who did not) that the largest unfilled hole in the market is a 3,000-pound RWD compact sedan with a base price in the mid-twenties.”There’s been talk for a while now about the joint Subaru-Toyota RWD Coupe (basically an AE86 replacement) that would sell for around $21,000 and have the drift kids pooping their pants with excitement. Sadly for them (and Hanes), it’s looking more and more like Toyota will be shelving that particular cheapie coupe until at least 2012, if not scrapping it altogether. So that particular hole in the market remains. Especially as the BMW 1-series is a joke in base trim and the twin-turbo edition is over $40,000. So yeah, I agree with Michael that right now a cheap, rear-driver coupe is the market’s gaping hole. You?
As Robert wrote earlier, GM is piling on the incentives to move metal in a January market that seems to be moving like molasses. And though GM and its finance units are benefiting from the largess of the federal bailout bonanza, their decision to delay incentive payments in December is putting the squeeze on its dealer network. Especially as they’re forcing dealers to buy more inventory in order to qualify for incentive cash. Automotive News [sub] reports that GM’s $4b loan “provided a short-term relief,” but “it didn’t fix the issue,” according to GM’s Mark LaNeve. La Neve tells AN that he isn’t planning on altering the incentive schedule. So, although payments have resumed, they are now two weeks behind schedule. And he doesn’t know when they’ll return to the normal schedule; it all depends on when tranche deux of the federal sugar shows up. Meanwhile…
I’m almost due for my next car. Well, in six months. Which might as well be tomorrow. My GTI will go back to Volkswagen so that some poor clod can own it out of warranty. And this leaves me shopping for a replacement. This is where I’m in trouble. Not only do I have car-lover’s ADD, but I am picky about cars I actually will drive and don’t want anything too common. Even though I’m a jerk, I won’t drive the official car of jerks everywhere. So that means no 3-Series. Did I mention I prefer a hatchback or wagon? All this hemming and hawing has left me thinking about a Volvo or Saab. The trouble is, despite stories of the better experiences (“My Volvo V70 has gone 400,000 miles with only routine maintenance), whatever I buy will be weird, and therefore will break down. It’s not the breaking down I mind so much, but the cost of parts and repairs. The trouble is, I’m not unhinged enough to actually think an Alfa or a Citroen makes sense to buy. So what I really want is an Alfa Romeo or Citroen with Honda build quality. And if you take away the breaking down, you take away quintessential European-car character. What this means is that I’m crazy, but not crazy enough.
As US sales continue to tumble of a giant cliff, it becomes tempting to spin a short-term trend into a long-term projection. Just as peak oil theorists were everywhere last summer, warning that gas would never again cost less than $4 per gallon, many analysts now think that the US car market will never again reach 17m per year. Automotive News [sub] takes on the debate, fielding arguments from both sides. On the pessemistic front, players like Pricewaterhouse Cooper see the 17 million years as “an aberration,” artificially pumped up by a false sense of personal wealth, lax lending standards and irresponsible automaker incentives. Daimler’s Dieter Zetsche, Mazda’s Jim O’Sullivan, and private equity baron Wilbur Ross fall in the sub-17m camp as well. They collectively estimate an eventual recovery of 15-16m units by around 2012-2014. The other side of the argument is concisely summarized by Robert Schnorbus of JD Power: “Of course we will return to 16 or 17 million. Every recession we hear this argument that Americans have fundamentally changed, but Americans love their features and comfortable cars.”
More artistry from the Best and Brightest. Our deadline is tomorrow night. Send jpegs to robert.farago@thetruthaboutcars.com.
Ex-Toyota and current Ford marketing maven Jim Farley tells Automotive News [AN, sub] that The Blue Oval Boyz “expect” to stabilize their U.S. market share– after a 13-year decline. And if that’s not stretching the boundaries of credibility (your call), Jimbo reckons the new Lincoln MKT and, what was it again? MKS “could” increase the luxury brand’s slice of the American pie. “We think we have a really good chance this year. We don’t know what the luxury market is going to look like, but the one thing we’re really focused on is making sure that people see our products as aspirational and they pay the price.” Although Farley fails to provide a plan to achieve this goal, AN reckons it could may maybe perhaps happen. “Lincoln could gain share even as the brand’s total sales fall below 100,000 for the first time since 1982. Lincoln finished 2008 with sales of 107,295, its lowest total since 1983. With forecasts for lower industry sales in 2009, executives acknowledged that new-vehicle entries may not be enough to keep Lincoln sales in six figures.”
Chrysler Cinquecento anyone? According to Reuters [via Automotive News Europe], Fiat is in talks with Chrysler LLC to form a strategic partnership. Automotive News says the deal could give Chrysler access to platforms, engines and transmission. The august publication also suggests the dalliance could lead to Fiat taking an equity stake in Chrysler. FIAT has been on the prowl lately to find a partner. PSA apparently gave the Italians the cold shoulder. Fiat’s CEO Sergio Marchionne had made noises that his company cannot survive alone and is in urgent need of a strong partner. Eh, Sergio! You said “strong” partner! Cosa fai?
Redflex Traffic Systems and ChinaTel Group this week announced their hope of invading the potentially lucrative traffic surveillance market in the People’s Republic of China. Under a joint agreement, ChinaTel, a small provider of wireless broadband connectivity, would provide the communications infrastructure required for the red light camera and speed camera ticketing systems as well as provide local sales. “ChinaTel and Redflex’s mutually beneficial partnership will fully leverage their respective strengths on global operation and local distribution, creating synergy, extending their customer base, and expanding potential sales revenue,” the companies explained in a press release. “Both parties recognize the importance of the market opportunity for camera enforcement systems in China.”
Automotive News [sub] reports that GM’s Zen Master/Product Guru Mark LaNeve is turning his back on ye olde (2006) “market pricing.” You know, where the sticker price reflects the actual selling price. Or thereabouts. “In terms of a pure strategy where we price right to market and have no incentive spending — we have very few vehicles where we’d do that. We’ll have some level of incentive spending almost across the board.” After that… I’m confused. Why has GM increased ’09 product prices by 2.7 percent (roughly $790)? And what’s this mean? “LaNeve said GM prefers to spend incentive money for competitive reasons — not to reduce inventory, as it has been doing, because the latter is ‘wasted money.’ “We continue to want to price our vehicles to the market. We’d like to see incentive spending wane once we get our inventories adjusted. I think it smoothes out after the first quarter. We’re hardly building anything in the first quarter.” So, Uncle Sugar’s paying GM not to build cars, so they can eventually offer incentives to steal market share from carmakers who aren’t being paid not to build cars? Sweet.
Definitely infrequent for a few weeks while I’m in Europe, hunting the elusive Euro: An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Berlin – when I’m in Berlin.
Hybrid price war: Toyota plans to lower the Japanese price for the existing Prius hybrid when it releases a redesigned, more efficient version in May, the Nikkei (sub) writes. Japan’s top automaker will continue to sell the existing Prius after the new version’s release in May. Toyota plans to cut the price for the current model to around 2 million yen. Rival Honda is slated to release the Insight hybrid in February, with a starting price of less than 2 million yen. The remodeled Prius will cost 2.5 million yen.
Mazda cutbacks: Mazda will slightly increase plant operating hours in Japan in February and March, but will stick with its plan to cut output through March by 100,000 vehicles or more in addition to the originally planned 73,000-vehicle cutback for the period, the Nikkei (sub) writes. Mazda has started cutting salaries of manager-level employees by up to 10 percent from this month. Its executives already began returning 20 percent of their salaries to the company from December.
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The [UK’s] Blackburn Citizen reports that Blackpool magistrates sent a bailiff to Andy Miller’s house to collect an overdue £60 speeding fine. Actually, £350, what with court costs and all. “Father-of-five Mr Miller was driven to Accrington town centre. The bailiff parked up and waited for Mr Miller, but he collapsed in Union Street before he reached a cashpoint.” The 78-year-old died of a heart attack. Although the coroner ruled out an inquest, Miller’s family feels the court contributed to his death. “His son Mick said he wanted answers from court bosses as their letter [to the court explaining why he hadn’t paid the fine] told them his father was suffering from memory loss and confusion. Mick, who lives in Lower Darwen, said: ‘Bailiffs should not be allowed to behave like this. Dad was put under incredible duress. I know how nervous he had been and what a strain this would have been on him.”
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