No question: The Big 2.8's supply chain is in disarray. Plastech, Delphi, American Axle– these are just three of the U.S. parts suppliers already in bankruptcy, with fully 25 percent of other major domestic parts makers teetering on the edge of Chapter 11. The domestics are operating on the assumption that the faster they outsource their parts production overseas, the better. Speaking to Automotive News [sub] analyst John Casesa warns that Chrysler's new purchasing czar John Campi's rush to confront domestic suppliers (Plastech) and seek low cost foreign replacements may not be such a good idea– especially when seen in historical context. "In the early 1990s, former GM purchasing chief J. Ignacio Lopez proved that point. When he bid out proprietary part designs to garner the lowest prices, Lopez launched a brutal price war that created lasting animosity between GM and its suppliers. The industry is still struggling to heal the wounds." And speaking of war, does it really make sense for the domestics to combine Just in Time production and long, long supply lines in this time of crisis? As Toyota's quickly resolved Tundra problems show, it's best to keep your friends close and your suppliers closer. 

We've just received info from Autobild on the Volkswagen Golf TDI Hybrid by way of yet another unauthorized embargo break (funeral for the embargo system will be held next Tuesday; in lieu of flowers, send donations to me). You know what's ridiculous about this car? It's got a hair over 100 horsepower, but likely gobs of torque from a diesel engine and electric motor. But the Prius-kicking stat: 69 miles per gallon. Hooah! Is it coming to America? There's no info one way or the other. I speculate that it might, since VW has announced plans for bringing more diesels here, and this will surely have lower particle emissions by virtue of an engine that's not even on below 25 miles per hour (that's a guess). What's more, the 1.4 liter powerplant comes from the current Volkswagen Polo Bluemotion. For normal people that don't follow the European car market, that's VeeDub's fairly clean diesel engine. Clean? High miles per gallon? Getting whooped by Toyota? Sounds like VW needs this car in North America STAT– assuming it can hit 60 in 10 seconds (the car, not the country).

Looks like Honda, Nissan, GM and Ford need to slap their advertising agencies around. It appears some greenies don't know they make hybrids! From Ourgreenbabysteps blog comes this tidbit: "I ran into someone at work today who owns a Honda Civic Hybrid.  I didn’t even realize there was another family hybrid car other than the Toyota Prius." Toyota probably also needs to increase the advertising budget for the hybrid Camry and Highlander, since they seem to be semi-unknown as well. I wonder what will happen when the blogger finds out he/she can even get a humongous SUV or all-American pick-'em-up truck with a hybrid powertrain. I'm thinking spontaneous cranial combustion.

TTAC reviewer Paul Niedermeyer slated the new, heavier, less fuel efficient, gansta-riffic xB as "a blot on Toyota’s relatively unblemished copybook." The other models aren't setting the world on fire and face new competition, from within and without ToMoCo. No wonder, then, Automotive News [AN, sub] reports that Scion sales have dropped for 16 straight months. "Since August, monthly sales have declined from each previous month, even though dealers have had two redesigned models in their showrooms during that period." Product isn't the only problem. Taking a cue from The Big 2.8, Scion has over-dealered. "Scion had 856 dealers as of Jan 1, 2005. But as sales soared in 2005 and 2006, more dealers piled on, even if they weren't in hip, urban neighborhoods. Currently, 963 of 1,224 Toyota dealers carry the brand." ToMoCo says they mishandled the old to new model changeover. And never mind, anyway. "Sure, we'd like to see more customers," ToMoCo prez Lentz admits. "but we're still seeing the right customers. The tC's average customer is under 25 years old. The overall Scion customer is in his early 30s, and primarily he is new to the brand… As we hit spring, I think we'll see some good sales results." Even at Toyota, hopes springs eternal.

The famously chauvinistic German monthly Auto, Motor & Sport (AM&S) recently gave the Toyota Land Cruiser 4.5 V8 the thumbs down. They called it uneconomical, expensive and declaimed the uncomfortable rear seats. The major (and headline-making) factor: AM&S says the Cruiser's brakes suck. More politely, they "perform miserably." To reach this conclusion, the Germans conducted ten braking tests. With cold brakes, the Land Cruiser needed 44 meters to come to a halt from 100 – 0 km/h. When the brakes were hot, the car needed an "alarming" 56 meters to come to a complete stop. Hang on, who carries out repeated high-speed panic stops with a 4X4, or an SUV? For its part, AM&S says there's no real reason why a SUV has to fail this test, since the Mercedes GL and G models fare way better (natch). In the past, many cars from Toyota and Lexus have performed poorly in the braking department in various Auto Motor & Sport tests. The Land Cruiser joins the Jeep Wrangler & Commander, Mitsubishi L200, Hummer H2 and Cadillac Escalade as the worst braking SUV's tested so far. Of course, a SUV that's used for lugging a trailer through the Rockies needs good brakes, but it seems likely that better testing criteria could be found for this task.

Ex-Toyota and current Chrysler president Jim Press says every car his new employer makes— or will make once the automaker starts/finishes their long-promised model cull– will be a hybrid. Eventually. Meanwhile, Popular Mechanics claims the Prez' promise was "the first by a major auto executive that openly embraces hybrid technology as an across-the board sea change.” Nope. As we reported previously, Toyota executive vice president Kazuo Okamoto predicted Synergy Drive would become ToMoCo’s default drivetrain. Anyway, we've heard nothing about/from Chrysler's semi-independent "ENVI" hybrid development team since the Detroit Auto Show's awkward concept cars. And speaking of champagne dreams and caviar wishes, Press said Chrysler plans to build and sell as many Chrysler-branded products overseas as are currently sold in the U.S. (roughly 2.7m units). Again, no idea of what, when or where. Why? Because they like you.

Everyone knows that when you travel to say, China, and someone offers you an amazing deal on a Swiss watch, you might not be getting the genuine article. Buy a discount Ferrari in Italy though, and you can safely assume you are getting the real deal, right? Wrong. The International Herald Tribune reports that Italy's financial police (?) have broken a ring of Ferrari counterfeiters who had built 14 fake 360 Modenas using, get this, "mostly Pontiacs as their base, but also Mercedes and Toyota." While visions of the notorious "Fiero-rrari" body kits are probably racing through your head, these fakes actually were fairly well done (if equally targeted at the chest-rug sporting crowd). Authorities say that seven of the faux-rraris were sold to people who knew the cars were fake, and simply wanted to impress the neighbors. Said neighbors were sadly unavailable for comment as to the full glory of a late-model Ferrari with the exhaust note of 20-year old Pontiac V6.

Back in the day, Toyota used local businessmen to find dealers and deal with local politics. ToMoCo eventually bought its distributors, save Southeast Toyota in Florida and Gulf States Toyota in Houstonm (who still control prices, model mix and availability in 10 states). In the '90s, Southeast shelled-out more than $100m to dealers who claimed the distributor was forcing them out of business. CNNMoney reports that Gulf States is now under the gun for "improperly encouraging" executives from a large dealer group to leave their company and buy a lucrative dealership in Dallas. Toyota continues to defend its distributors, claiming they "bring a culture of innovation, responsiveness and agility." What's more, consumer prices "are the same" or "even more competitive" than prices in regions where there are no distributors. If there's anyone who can give your perspective on dealing with a Toyota distributor, please contact us.

Do you know how many Matrices Toyota sold in the United States last year? That's not a rhetorical question; I have no idea. Toyota rolls the number into Corolla sales. No surprise there. The Matrix shares its underpinnings with the Corolla– and the Pontiac Vibe (same car, different wrapper). Even if the Matrix accounts for a fraction of Corolla sales, a fraction of a lot is a lot. And so, just as Toyota is bringing out the new Corolla, they’re unleashing the sequel to the Matrix. Let’s call it The Matrix: Rebloated.

Our brothers-in-arms over at Consumer Reports just released their not-so-creatively titled "Top Picks" for 2008. Surprises? A few. For starters, CR chose the Hyundai Elantra SE as their top Small Sedan. We'd of course pick the Mazda 3 instead– and they even admit the Mazda handles better– but CR feels you get more safety stuff for your buck. Who knew? And man, how far has the Civic fallen? Want to guess what car scored highest ever on the Consumer Reports road test? Why it's the Lexus LS 460L. Not only did the big limo score 99 out of a possible 100 points, but it's a top pick in the Luxury Sedan category. I spent some time with the hybrid version, and I'd have to give it 99 out of 100, too. If you didn't count handling. If you did include handling I'd score it 99 out of 110, as the car moves like a submarine. The Chevrolet Silverado beat out the Toyota Tundra in their Pickup Truck category. In point of fact, the Tundra scored more points, but the first-year Japanese V8 has been having reliability problems, so the Chevy got the nod. Go figure. Not so surprising is the Mazda MX-5 Miata beating out the Porsche Boxster in the Fun to Drive category. Consumer Reports reports that the Miata does everything the Boxster does, but for half the price. I agree with that, though the Boxster gets better gas mileage. And smells better. No, really.

According to The New York Times, Big Apple mayor Michael Bloomberg is about mandate that the City's 10k car service limos must average 25 mpg by 2009 and 30 mpg by 2010. As the vehicles in question currently average between 12 and 15 mpg, they'd almost certainly require hybrid drivetrains to achieve Bloomberg's lofty goals. The plan requires approval by New York's Taxi and Limousine Commission. Passage seems likely. Commissioner Mathew W. Daus' says "it is to the great credit of black-car industry leaders that they have collectively embraced Mayor Bloomberg's efforts to reduce harmful emissions." Daus' willingness to green-up may something to do with the fact that Hizzoner isn't going force limo companies to comply with the new standards through punitive fines. Instead, Bloomberg is proposing a state sales tax waiver on purchases of more efficient limos and low-interest financing, through corporate partnerships with Deutsche Bank, Lehman Brothers, and Hudson Toyota/Penske Auto Group. 

Other than a $1.3b manufacturing facility in Mississippi, ToMoCo has no plans to open another U.S. production facility. And yet The Salt Lake Tribune reports that local lawmakers are dangling the prospect of a new Toyota factory to justify HB436, a bill authorizing $5m for a statewide English literacy program. The money adds to a Toyota grant, which led Bill sponsor Rep. Greg Hughes, R-Drape to claim "Toyota is looking for opportunities to build a manufacturing plant. They are looking for communities they could bring this plant to that invest in their work force." In fact, the lawmaker's assertion was based on a letter sent to (not received from) Toyota's Veep Patricia Pineda, thanking the automaker for the grant. "We… understand that Toyota may have future interests for potential economic development that may include a motor assembly plant constructed in our state. As Utah's Legislature and Senate Leaders we welcome any such future thinking." The Trib reports that "attempts to reach Toyota Wednesday were unsuccessful." Next time, just drop us an email… 

So now we know why former Chrysler CEO Tom LaSorda was willing to punt BOTH of his turnaround plans, step aside for new CEO Bob Nardelli and share a co-presidency with ex-Toyota Prez Jim Press. According to The Wall Street Journal, Daimler's European accounts reveal that the Germans made the above payment (€10.4m) to Mr. LaSorda as a bonus for LaSorda's help liberating them from majority ownership of the American automaker. Yes, folks, that's on top of LaSorda's $3,223,116 (€2.13m) annual (which is to say ongoing) compensation package. Not to mention LaSorda's pension. Or health care. Or perks. And just in case you thought LaSorda's bonus and salary were performance related in the traditional sense of the term, Daimler's papers also show that Chrysler lost €1.94b ($2.9b) in an eight-week period last year. That's $51,785,714.29 a day. Hands-up anyone who thinks LaSorda gives a shit. [thanks to John for the link]

GM may soon be feeling some of Chrysler's pain over bankrupt suppliers. The CarConnection reports Cobasys, supplier of the NiMH batteries used in the light-hybrid Vue, Aura and Malibu and holder of "a key contract in the development of GM's much-anticipated plug-in hybrid, the Volt," is out of money. The battery maker lost more than $76m last year and expect to lose $82m this year. To make matters worse, the company's joint owners, Chevron and ECD, can't agree on the 2008 budget. So Cobays' operating budget is $92m short. Cobasys is now on GM's "distressed supplier list;" the General refuses to comment on the situation. In the meantime, GM has struck a deal to buy batteries for its two-mode hybrid trucks from a Panasonic – Toyota joint venture.  

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

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

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

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

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

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

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

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

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

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

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

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