CAR Magazine is reporting that VW's 2002 concept car– the 1 Liter Car– is headed into production in [The Year of Our Overload] 2010. The name comes from the fact the VW uses 1 liter of gas per 100 kilometers (a standard European fuel economy format). Ferdinand Piech was seen cruising around in this puppy during his final days (or what we thought were his final days) at VW's helm. The crazy car, which looks more like a rolling fighter jet canopy, is mostly carbon fiber. It weighs an estimated 660 lbs. CAR figures it will have a two-cylinder diesel engine. The 1 Liter Car would likely be assembled in VW's prototype shop–  limiting production to 1000 units per year. The price is not yet determined, but reckon somewhere between 20k and 30k Euros. With such a small production run, this sounds more like a glamour and "we can do it" car (reverse halo?) from VW, rather than a true plan to save the world. And it'll still probably breakdown in my driveway.

There's no way to sugarcoat it: Ford's June sales sucked. Ford dealers moved 28 percent less metal– 167K vehicles– than last June. Compared with the first half of 2007, FoMoCo's sales fell a full 14 percent. In all fairness, the numbers are the first which don't include Jaguar and Land Rover (sold off to Tata motors). But based on recent months' sales, the two brands would have only added about another 4k sales. So it still sucks. Retail sales for cars were up three percent; cars and crossovers made up 59 percent of retail sales for the first half of the year. Fleet sales were down 11 percent for June. Ford mouthpiece Jim Farley explained "the rapid rise in gasoline prices, and the resulting shift toward fuel efficient vehicles, has been challenging." But fear not! "In addition to adjusting our capacity and production plans to produce more cars and crossovers, we are introducing several new vehicles with class-leading fuel economy." Hope springs eternal, but will it be this spring?

Click here for full Ford Press Release 

Volkswagen is amongst the first of the manufacturers sending out its SOS June sales numbers. Despite the numbers and the claim that they're enjoying the "best sales month since August 2006," the picture at VW is grim. if not for the new Tiguan, they'd be cratering with the best (worst?) of them. VeeDub's compact SUV-crossover-thingy sold 1044 units in June. Can the Golf-on-stilts keep-up the big Mo for the rest of the year? Equally worrying, has the Tiguan cannibalized sales of the Jetta and Rabbit, which were both down from last month? That's what should send Volkswagen of America boss Adrian Hallmark running for the Immodium. While a 1500 unit hit doesn't sound a lot, the percentages– Jetta down 11.3%, Rabbit down 18.9%– are straight-up scary. The explanation: unimpressive gas mileage from standard five-cylinder engines. Hello? Volkswagen has fleets of cars in Europe (under three different nameplates) that are all fuel efficient, fun to drive, and don't feel cheap. And none of them was designed or prepared for sale in the United States. A VW lineup including the Fox, Polo, Skoda Fabia or Roomster would be kicking ass in today's gas conscious U.S. market. The new U.S. diesel Jetta is great, but pricey (both to buy and run). Screwing itself, VW is.

As we mentioned previously, the U.S. vehicle market is about to be hit with a tsunami of off-lease SUVs. BusinessFleet is putting numbers to the news, courtesy of CNW Research's latest Retail Automotive Summary. They estimate 800k SUVs will come off lease this year, with a similar number expected next year. What makes those numbers so horrifying: residuals previously figured at 51 percent of original capitalized cost are now closer to 34 percent– assuming no further drop in value. CNW president Art Spinella estimates "that difference translates into more than $6,100 per unit in missed residual values or $4.88 billion." He estimates next year's figure could be as high as $4.74b. That's a lot of money for someone to absorb. SUV buyers note: even without GM zero percent offers on slow-selling trucks and SUVs (i.e. all of them), this is The Mother of All Truck Buyer's markets. And you've got plenty of time to shop.

We're getting reports from the front line that GM's 72-hour sale is a success– of sorts. One dealer reports that business was so brisk that both the Dealer World system (used to verify codes. locates, ordering, and more) and GMAC's computer comms crashed. "The F&I guys had to use the fax, then phone and stay on hold for an hour." Popular models are… gone. "Try and find a Cobelt or HHR at the ZERO for 72. Can't be done." Another dealer reported that he'd sold 15 additional units during the sale, a number he called "substantial." Which is, of course, a relative term. IF this plays out across the country, GM's Black Hole Tuesday numbers will be bad, but they won't be as bad as analysts' predictions. The downside: the prices– hence profits– are scary low. Loaded 1/2 ton pickups are walking out the door for $200 per month. And GMAC is ignoring the "when you're in a hole stop digging" maxim; offering low credit score buyers up to 150 percent loans (to get them out of their backwardsness). Worst of all, July and August. Despite the hit to the bottom line, and the long-term damage to GM's pricing, metal is being moved. Short-term thinking GM may extend the sale. The question is, can it afford to?

Back in the 70's former TTAC columnist Brock Yates coined the term Grosse Point Myopia: the tendency of Detroit's execs to use each other for their frame of reference. [Our own Andrew Dederer revisited GPM in October 2006.] And now Ford's Presidente de las Americas, Mark Fields, evokes the concept with his insistence that doing better than before is as good as doing well. Or being prepared. But you'd expect these sort of revisionist weasel words in an article by The Detroit News on the D2.8's troubles the day before the June sales numbers drop (as in off a cliff). Did you know that after last May's numbers, Ford and GM "executives were alarmed?" Yes, "eventually [eventually?] they made almost desperate decisions that will cost thousands of jobs, change the vehicles people drive and determine whether their businesses survive." And check this: Mike DiGiovanni, GM's executive director of global market and industry analysis, told scribe Tom Krishner "oil prices in February began to rise, still not to an alarming level because they were consistent with previous seasonal spikes. Gasoline was still at a nationwide average of $3.03 per gallon. In March, though, pickups' share of the market dove to just 11.6 percent and gas rose to $3.24. 'That's when I said 'Red Alert,' Digiovanni remembered. 'We're worried.'" To which Krishner adds "Even critics say it would have been nearly impossible for the automakers to predict the 74-cent-per-gallon spike in regular gas prices between February and May." This is going to be one Hell of a wake-up call. Or, even more worryingly, not. 

You want evidence that GM takes TTAC seriously? I got nothing. You want proof that GM should lend us an ear, or another indication that the American automaker's just too damn slow? No problem. Back in April, Edward Niedermeyer flagged the fact that Chevrolet was [all too quietly] selling a higher-mileage Cobalt XFE with re-jigged gearing and low-resistance tires. "These are exactly the kind of common-sense efficiency improvements Chevy (et al) should spread across their lineup," Edward opined. Yes, the Detroit Free Press reports that "thanks to quick action by GM's engineering and marketing teams," the Cobalt's twin-under-the-skin Pontiac G5 also gets the mods and the new badge. Quick? Yes! Quick! "We saw fuel prices rising early this year, and rather than sitting on the sidelines in a Motown hole-in-the-wall knocking-back boilermakers worrying, we did something," Chevrolet spokesman Terry Rhadigan boasts. Unfortunately, it doesn't look like GM's going promote these "new" cars; Lordstown's maxxed out as it is. And GM's hasn't quite committed to the XFE concept. "Chevrolet may apply the strategy — and the XFE badge — to other model lines. Other GM divisions may do the same, although they might not use the same XFE badge." Hey, what's the hurry?

Automotive News [AN] reports that the Wall Street Journal has got a hold of a J.D. Power report on June's sales stats. As you can see above, it ain't pretty. In fact, it's ugly as Hell. If J.D.'s mob are even remotely accurate, the U.S. market is undergoing a contraction violent enough to make a mother of five think twice. "J.D. Power and Associates is predicting the June seasonally adjusted annual sales rate will plunge to 12.5 million vehicles, down from 16.3 million last June. That is far below what other analysts have projected for the month's sales." Especially GM, which predicted (at last count) 14m new vehicle sales for the year. J.D. Power expects Toyota's sales to tank by 6.6 percent. "That would give it a market share of 18.7 percent, near GM's predicted 19.2 percent share." Yes, well, there is no way GM can sustain itself at a 19.2 percent market share of 12.5m vehicles. Chrysler? Again, I reckon their company-wide summer break will be terminal. Meanwhile, the real numbers will be released on Tuesday, and TTAC will be there. 

OK, OK, enough with the Yakov Smirnov references. China is no more communist than, say, California. And its vehicle sales prove it. With already-strong demand for passenger vehicles growing by 15 percent this year, Xinhua reports that Chinese automakers are set to sell 10m cars during 2008. According to information from the China Association of Automobile Manufacturers (CAAM), the demand is partly a product of falling car prices; a trend under threat from high steel costs. Moreover, as its car market matures, the Chinese government is poised to "move forward the industry restructuring by detailing standards on security, environment protection and energy saving," according to CAAM vice-chair Dong Yang. "We should keep a clear mind of the overall industry competence lagged behind that of the multi-national companies." Bringing domestically-produced Chinese cars up to international snuff will doubtless prove difficult. As the Chinese market matures and regulatory barriers to ownership increase, sales growth should level off. At some point, the People will bias the market towards home-grown products. Until then, it's double-digit growth as usual.

In the car biz, tire makers are something of a canary in the coal mine. And they're coughing like crazy. As America's car market falters, tire manufacturers are facing some plenty tough choices, as they try to manage rising prices and falling demand. Goodyear, America's largest tire company, is seeking relief abroad. Trading Markets reports that they're focusing on growth in foreign markets like Russia, China and Brazil, investing $500m in Chinese production and $600m on plants in Brazil and Chile. Goodyear hopes the investment will pay off with over $2b in savings by 2009. Some of those savings will come from plant closures (e.g. Australia) and longer-than-usual summer production lulls at plants worldwide. Meanwhile and in any case, most tire makers are increasing their prices. Bridgestone, Goodyear, Hankook, Yokohama, Michelin and Continental have all announced some kind of price increase this month alone. 

First, this was an easy call. Commodity costs have jumped significantly in the last year, eating into Toyota's– and everyone else's– profits. Second, as the new world leader, ToMoCo is best positioned to pass on those costs. Quoted by Automotive News [sub] CEO Carlos Ghosn admitted as much. "It's very, very difficult to move in a market without somehow the leader of the market (making a) move." Third, you gotta read between the lines here. "Our basic principle is to continue to work on cost reductions within the company first," said Toyota spokesman Paul Nolasco. "But we won't be able to avoid thinking about price hikes in the future considering a recent jump in raw materials costs." How… inscrutable. As I reported in General Motors Death Watch 182, here's real deal: Toyota wants to see what happens to the other guys– specifically GM– before upping its profits. "We'll make a final decision after evaluating April-June sales and production costs," a "top Toyota official" told The Nikkei business daily. 

C'mon, let's face reality here. If you were a foreign automaker aspiring to sell your products in the U.S., there are a few facts that should stop you dead in your tracks. 1) North America is the world's most competitive automotive market. There's a reason The Big 2.8 are fighting for their survival and it's not because they're the only kids on the block 2) You couldn't imagine a worse time to be selling cars in the U.S. The new vehicle market is in chaos. And it's about to get worse. When Chrysler, Ford and/or GM files for C11, there will be a cataclysmic and unpredictable market upheaval. 3) If there's one car brand you don't want to bring to the U.S. it's FIAT. I know people who've never SEEN a FIAT, who weren't BORN when FIAT sold cars in the U.S., who know that the Italian brand is famous for rust, mechanical failure and parts unavailability. You'd be better off pulling a Lexus and creating an entirely new brand; that cane won't hunt. Now, The Detroit Free Press' Mark Phelan has a corner (stay in that corner and don't come out until you have a story!), in which he reports "Italy's Alfa Romeo and Fiat cars are on the verge of returning to the United States, Fiat Group CEO Sergio Marchionne told the Automotive News Europe Congress." Yes, "The Fiat Group, which owns Alfa Romeo — and the Ferrari, Maserati, Fiat, Lancia and Abarth brands — plans to relaunch Alfa in America next year and may also sell the stylish Fiat 500 subcompact here." Oh, Alfa. That's alright then. Isn't it? 

Sajeev can breathe a sigh of relief. The Detroit News reports that the Blue Oval Boyz are considering offering the Ranger demi-pickup for two more years. Originally slated for the scrapheap in 2009, along with the Twin Cities Assembly Plant, the new plan puts a hold on the factory closure and extends production of the market's most fuel-efficient compact truck to 2011. That's when the "global" Ranger model hits the streets. Of course, Ford will neither confirm nor deny the reports. Spokesman Said Deep: "We do not discuss future product plans for fear we'll have to change our minds again competitive reasons." FoMoCo will build the global Ranger outside of the U.S. South Africa gets the nod, exempt as it is from the "chicken tax" on imported pickups. Now if they'd just start marketing the Ranger (when was the last time you saw a commercial for one?), they might just have a hit truck on their hands. You know; relatively speaking.

Edmunds Auto Observer is often the first website to review a new car– in the sense of showering it with love and happiness or, at worst, gumming it to death. Suddenly, uncharacteristically, under the guise of humor, the bloggers who still won't fully disclose car manufacturers' contributions to their editorial (a.k.a. junketeering) grew a pair. Ish. Writer Bill Visnic offers a list of cars that "don't have a chance." Of course, it's not the carmakers' fault. Oh, no these whips are doomed "mostly [due] to the new rules governing the auto industry" Some of the cars– which now "suddenly look titanically dumb"– are easy targets (VW Rotten). Others are guaranteed sales successes (Honda Accord). So we put it to you, our Best and Brightest: which of these things is not like the other? Which of these things will not belong? And what other vehicles should be on this list of future flops, and why?

BMW X6
Cadillac CTS-V
Dodge Challenger
Dodge Ram
Ford F150
Ford Flex
Honda Pilot
Honda Accord
Infiniti FX50
Lincoln MKS
Hummer H3T
Toyota Venza
VW Routan
VW Tiguan

The other day, we caught– but didn't have time to blog– a story about golf cart safety from the Associated Press. "The Ohio report, published in the American Journal of Preventive Medicine, said about 148,000 people have been treated for injuries related to golf carts since 1990. The UAB [University of Alabama] found there were some 48,255 golf-cart related injuries between 2002 and 2005 alone, or an average of about 1,000 each month." Bone fractures and head injuries were among the most common injuries. And, here's the kicker: "About half of the injuries occurred on golf courses or in other sports venues, such as football stadiums. The rest were on streets or residential property." So when I read an article in this morning's Detroit News about an entrepreneur hawking golf carts to beat gas prices, I was sure they'd mention the potentially lethal downside. Nope. "The cart, he said, is not only cheaper but fun to drive too. Now he's making plans to furnish similarly "pimped out" carts to others who want to cut their gasoline bills. Auld is working with a golf cart manufacturer to make and sell the street-legal vehicles to the public, starting next month." Donorcarts? [Note to Jennifer Youssef: Google is your friend.]