When it comes to trimming Chrysler's bloated dealer network, spokesman Jason Vines knows the score. Join the club. Every industry analyst worth his TTAC bookmark understands that the American automaker would be in much better shape if it "downsized" its franchised dealer network. To put numbers to it, Chrysler has around 3700 dealers. Toyota has roughly 1700. According to the Detroit Free Press, Chrysler's overdealeritis leads to "inefficiencies" and "competition among themselves." Yes, but– as we've reported before, a 50-state patchwork of dealer-friendly franchise laws makes any move to terminate dealers [with extreme prejudice] a legal mine field. Fighting the dealers in court– or buying out them out– would cost billions. Even so, rumors are circulating that Chrysler is about to grasp the proverbial nettle, take cars away from Dodge and lop off a thousand stores. Vines acknowledged the wisdom of the idea, then clicked on over it itaintgonnahappen.com: "There is no way on God's green earth to get down to that number," Vines said. I guess Chrysler dealers better hope that the Talking Heads were right: Heaven is a place where nothing ever happens.

Hot on the heels of Steven Lang's editorial explaining the financial pitfalls of car depreciation, moments away from Justin Berkowitz review of the Infiniti G37, we're delighted to present CNNMoney's "Top 10 Best Resale Value Cars." The automotive analysts looked at Kelly Blue Book's guesses estimates of what different models might will be worth in five years. They then rated the cars based on their relative retained value. Not surprisingly, the list is import intensive. Surprisingly, three of the winners are Volkswagens. Here's the complete list in alphabetical order, with each model's predicted five-year retained value:

Chevy Corvette – 50 percent
Honda Civic Sedan – 52 percent
Infiniti G37 – 52 percent
MINI Cooper – 52 percent
Scion tC – 52 percent
Scion xB – 52 percent
Toyota Corolla – 52 percent
Volkswagen Eos – 52 percent
Volkswagen Jetta – 51 percent
Volkswagen Rabbit – 51 percent

Speaking to The Detroit News (DTN) at the LA Auto Show, Jim Farley criticized his new employer's history of pouring money into vehicle launches and then leaving the new models to languish in the market without… advertising support. You thought I was going to say "mechanical updates" didn't you? No such luck. While Ford's Toyota-poached multi-million dollar marketing maven (exact salary undisclosed) places a high value on hype advertising, he's doubly sure that "This is a time for us to be really realistic." In the spirit of this new realism, Farley said he wants to ignore/trample upon Ford's Volvo strategy and take Lincoln upmarket, "re-engage" Ford dealers (as opposed to long overdue euthanasia), meddle with product development ("That's where I can help Derrick and his team") and generally scare the **** out of Ford veterans ("What if we paid people if something went wrong with their car? It's an idea"). The DTN ends their "welcome to the club" feature by describing an encounter between Farley and an ex-Ford marketeer. "'There was no process. It was just chaos,' the former member of The Blue Oval Boyz told Farley. 'Now, I wish I'd stayed.'" Be careful what you wish for.

As IT Wire reports, the European Federation for Transport and Environment (EFTE) is kicking ass and naming names. Well, naming names. The environmental pressure group– claiming to represent 49 non-governmental organisations (NGOs) in 21 countries– compiled a list ranking auto manufacturers by tailpipe cleanliness, based on 2006 date. And who's the fairest of them all? The EFTE gives the green gong to PSA Peugeot Citroën SA. On average, the French manufacturer's cars emit 229 grams of CO2 per mile. Fiat SpA was next with 232 g/mile. The worst? BMW with 297 g/mile and Daimler AG at 303 g/mile. Here's how EFTE's ratings shake down:

1. PSA – 229 grams CO2/mile
2. FIat – 232
3. Renault – 237
4. Toyota – 246
5. Honda – 248
6. GM – 253
7. Ford – 261
8. VW & Suzuki (tie) – 268
10. Hyundai – 269
11. Nissan – 271
12. Mazda – 279
13. BMW – 297
14. Daimler AG – 303

“Is that yours?” Millions of car buyers spend billions of dollars hoping that this statement will be born of admiration rather than pity. When these words come out of a car dealer’s mouth at trade-in time, they can be especially hurtful– even if the salesman is as honest as their spiel is long. That’s the moment when most car buyers finally discover whether or not their automotive “investment” has walked off a cliff and fallen into the financial abyss known as depreciation. Here’s how to avoid the freefall…

It simply can’t be stressed enough. Depreciation is the mother of all automotive operating costs. Even if gas soars to four bucks a gallon, depreciation STILL repesents the biggest hit to the car owner’s wallet. To wit: The average cost for a new car in these great United State currently hovers around $24k. After seven to eight years– not far from the ever-increasing average amount of time American new car buyers hold onto their whips– the car’s owner will be looking at a depreciation rate somewhere between 70 percent and 85 percent.

In other words, come trade-in time, they’re facing an average loss between $16,800 and $20,400. That’s before any considering of the “opportunity cost” (i.e. money lost by NOT investing the cash in a house/money market/alpaca farm). Or inflation.

Bottom line: if you want to avoid depreciation, forget about buying a new car. Yes, a new car offers warranty-related peace of mind. But it's an extremely expensive security blanket. A carefully-selected used car may need repairs, but in most cases, they'll still cost a lot less than depreciation..   

If you're willing to forgo that new car smell, figuring-out your buying pattern is the next step. There are two basic buying types: Keepers (keep cars for the long haul) and Traders (trade them in after a few years).

Many Keepers are ready, willing and able to enjoy a vehicle for well over a decade. “Keepers” believe their car should be a cruising companion until the point where the perceived risk of owning it (usually the cash outlay for major repairs) outweighs the fact that ownership itself [eventually] costs them nothing/virtually nothing. In the automotive world, they are what we call "married."

The key to being a successful Keeper: marry genuine quality, not reputation. Say what you will about “import bigots” and brand loyalty, but the automotive market is a place where perceived reputation translates into dollars and cents. Toyotas and Hondas routinely receive price premiums– even though many of their products fall far short in value and performance as compared to their peers. By the same token, overlooked or unloved models represent an excellent way to keep the hounds of depreciation at bay.

In most cases, car buyers get more bang for their buck (power, features, etc.), lower up-front costs, and lower depreciation costs simply by buying a used example of a less well known/accepted car. Mitsubishi, Subaru, Saturn– there are plenty of brands that sell excellent products that simply fail to capture the public imagination. The fact that these cars take a huge initial hit on depreciation works entirely in your favor, both buying and selling. 

For example, if you’re looking at a midsized commuter, a 2004 Buick Century or 2004 Oldsmobile Bravada, both of which finished first in J.D. Power’s recent dependability study and received strong ownership ratings, will cost thousands less to purchase than a comparable Camry, Accord or Pilot. Remember: badge snobs must pay for the privilege. 

The Trader is a different animal, a shorter time horizon than the Keeper, requiring a different strategy.

To avoid depreciation, Traders are best off buying a carefully vetted five to seven-year-old car of their choice. At that point, depreciation has exacted the majority of its revenge. With due diligence, Traders can get a superb return on their money. The average five-year-old car kept for two years experiences minimal depreciation (20 percent or so). The average seven-year-old car experiences even less, and so on. It's a simple but highly effective buying pattern.

And then there is the Sage. The Sage can buy nearly anything and make a buck at it. Yours truly has enjoyed hundreds of vehicles over the last few years– and it’s only taken huge chunks of my free time to do it. Mechanics, auto auctioneers, wholesalers, retailers and hobbyists will always have an edge when it comes to depreciation costs. We know what’s hot, and we know plenty of people who appreciate hotness.

Again, wisdom comes at a cost. Sages don’t pay for depreciation (much), but their insight requires years of hard work, money (mistakes are never free) and a feel for the auto biz' cycles of fashion and fame.

Whether you’re a Keeper, Trader or Sage, remember: a car is an expense. It may excite you or be a daily nuisance, but it is still an expense. By minimizing depreciation you will avoid the single largest cost in the process. With that money you can save the world, buy groceries or save up for your next car.  

With all this talk about green machines (both real and imagined), the LA Auto Show is in danger of boring the snot out of the average driver. And with GM and Chrysler busy hyping hybrid SUVs, those red-blooded American who like driving big ass trucks may be thinking the red dot of political correctness and emissions regulations is trained on their V8-stuffed whips. Leave it to Toyota, the maker of the chattering class’ favorite ULEV fuel miser, to understand that selling vehicles– not press releases– is the name of the game. And so I give you the new bigger (yes bigger) and badder (yes faster) Toyota Sequoia. SUV lovers can now order their supersized ToMoCo truck with an all new 5.7-liter V8, boasting 401 ft.-lbs. worth of bass boat-schlepping, ass-kicking torque. The Sequoia finally joins Lincoln’s Navigator by offering an independent rear suspension, with optional air support. The Sequoia's cabin interior is also longer, wider and taller than afore– making it suitable for eight genuine adults. Fuel economy's up by 12 percent. There’s more. Suffice it to say, the previous Sequoia couldn’t quite match the ‘Slade and Navi for comfort, style or performance. This one looks like it can. Who ARE those guys?

After inadvertently posting incorrect prices for their hybrid Tahoe and Yukon on the Internet, GM finally released the real sticker. The base prices [including destination charges] from a GM press release via Autobloggreen are: Chevrolet 2WD Tahoe – $50,490; GMC 2WD Yukon -$50,945 (I guess GMC hybrid badges are more expensive than Chevy's); Chevrolet 4WD Tahoe – $53,295; and GMC 4WD Yukon – $53,755. All these hybrid SUVs come well loaded, including a "tire inflater kit"– which gives you an idea of the games hybrid makers play and how GM expects these SUVs will be used. TrueDelta lists the price difference between a loaded Tahoe and a similarly equipped Escalade as $15K, so you can make an pretty good guess what the 'Slade hybrid will run. Autobloggreen is estimating a $3 – $4K hybrid premium over a comparably equipped 5.3L version of the Yukahoe, but that doesn't factor in the usual discounts and rebates piled on the gas E85 versions. So even with a claim of "the same city fuel economy as the 2008 Toyota Camry with the base four-cylinder engine," buyers will have to do a lot of driving to yield any hybrid-related savings. But the PC halo remains in place at all times.

Not content to stand on the sidelines and watch GM and Toyota grab all the planet saving glory, Ford is jumping onto the green bandwagon. Again. According to Bloomberg, FoMoCo's CEO Al Mulally says The Blue Oval Boyz will make a "significant investment" into "more fuel-efficient vehicles that emit fewer greenhouse gases." They'll concentrate on smaller, turbocharged engines, lighter vehicles, diesels, hybrids, hydrogen and hamster wheels (just kidding). Big Al better be careful. A lot of people still remember Billy Ford's promise in 2000 to increase the fuel mileage of Ford's SUVs by 25 percent by 2005; a noble goal that remains resolutely out of reach. But SUV's won't be Ford's primary focus this time. The first model to receive the benefits of their greenification will be the Lincoln MKS. Changes to the drivetrain will be made "less than year" after it's introduced. Mulally didn't explain why Ford doesn't make the changes before the big Lincoln's showroom debut.

The Detroit Free Press reports GM's Vice Chairman of Global Product Development's most recent product prognostication: the Chevy Volt wil be "on the road" by November 2010. The comments came after the usual Lutz blusterfest, during which GM's Car Czar trash-talked Toyota. Or was it TTAC?  Anyway, Bob promised that his employer will have a test Volt on the road in early '08, and then couldn't resist adding "About Easter, we'll find out who's right and whose credibility takes a hit." Yes, well, there's a big difference between getting a hand-built prototype on the road and producing said vehicle. Considering Chevy's just taken delivery on experimental battery packs from A123 and LG Chem, considering how long it will take to gear up production of thousands of said  battery packs, considering that GM has had to totally redesign the car, and considering how long it'll take to gear up for production and train the line crew how to assemble a radically different drivetrain, you might think Lutz would reel back the rhetoric a bit. Or not. After all, spin doctors have families to feed too.

In the real world, cars hardly ever deliver their official government fuel economy ratings. This is still the case in the U.S., where testing procedures were revised to better reflect Joe Blow's lead foot, but it's even more true in the European Union. To prove the point, Autobild recently tested a number of cars in [their idea of] real-life driving conditions. Their circuit consisted of 54 km on the autobahn, 61 km on highways and 45 km of city driving. The cars were driven speedily but not hard– never above 75 mph. The cars tested were up to 53% thirstier than rated (and advertised). Some examples:

Audi RS4 Avant 420HP
Rated 13.5 L/100KM
Test 14.0 = +3.7%

BMW M5 507HP
Rated 14.8
Test 15.2 = +2.7%

BMW 118d Diesel
Rated 4.5
Test 6.2 = +38%

Ford C-Max Diesel 109HP
Rated 4.9
Test 6.7 = +37%

Honda Civic Hybrid 95HP
Rated 4.6
Test 6.6 = +43.5%

Lexus RX400h Hybrid 211HP
Rated 8.1
Test 12.0 = +48%

Mercedes ML350 272HP
Rated 11.7
Test 15.6 = +33%

Toyota Aygo 68HP
Rated 4.6
Test 6.1 = +32.6%

Toyota Prius 78HP
Rated 4.3
Test 6.0 = +39.5%

The cheerleading team over at The Detroit News (DTN) is happy to report the GM is set to launch "a massive, worldwide [environmentally-themed] marketing campaign and a lineup of vehicles that uses a variety of fuel-saving technologies — including some that have yet to be created." Skating over the potential irony of that statement (and the obvious connection to the Doobie Brothers' "What A Fool Believes"), they also reveal that "As part of the announcement, GM today will debut its gasoline-electric Chevrolet Silverado, the nation's first hybrid pickup." Huh? What about the Sierra SLE Hybrid we reviewed in July 2004, and the, uh, Silverado version launched at roughly the same time? Never mind. Apparently, "the automaker is struggling to overcome a less-than-stellar reputation when it comes to the environment, and trying to do so without an iconic hit like Toyota Motor Corp.'s Prius hybrid." Ya think? Oh, and here's the real news, GM will also provide Walt Disney with 10 more fuel-cell-powered Equinoxes to let the Hollywood entertainment company claim green credentials while their execs and stars shuttle around in limos transport workers and "others" at Disney facilities in California. Just in case you think we're being too hard on GM's newfound love of all things green (as if), we'll give the last word (as does the DTN) to Michael Robinet of CSM Worldwide. "Robinet said GM has the product to become credible, even among import-loving East and West coasters who want to drive green vehicles." Fair and balanced enough?

You'd think auto ad writers would have learned that dissing the locals is best left to the Simpsons. The latest car company issuing a mea culpa for stepping on finely-tuned political sensitivities: Toyota. BusinessWeek reports that a recent ad by the Japanese automaker raised the hackles of Fresno mayor Alan Autry and California senator Dianne Feinstein. The commercial in question showed the miserly Toyota Prius in a future where "gas stations will become nothing more than low-budget tourist stops. Like ghost towns… or Fresno." After Feinstein complained to the company, Toyota pulled the ad and edited out the reference. What penance must be done? Fresno city councilman Henry Perea says Toyota should open a Prius factory in his patch. Given the cost of doing biz in The Golden State, Perea should've simply asked for cash compensation (if he hasn't already). 

Last month. we broke the news (to the English-speaking world) that Toyota's Hilux pickup truck failed Sweden's now infamous Älgtest (Elk test). News flash from the frozen north: Toyota has admitted the problem and is taking drastic if limited action to correct it. According to Teknikens Värld, Michel Koch of Toyota Europe confirmed that the Japanese automaker is halting sales of the Hilux with 16" wheels. Although the Swedes found that a Hilux shod with 15" wheels Elk-tested just as poorly as one with 16" wheels, ToMoCo "does not consider the 15" version to perform dangerously." When faced with the same issue re: their new A-Class, Mercedes fit ESP to the car, and retrofitted a few thousand customer cars at the company's expense. While Toyota has the technology to add stability control to the new Hilux, given the vast number of Hilux that have already hit the highway (hopefully not literally), the money needed to retrofit existing Hilux would make the A-Class expenditure look like pocket change. The extra (some say needless) expense would put the product at a competitive disadvantage/dramatically lower Toyota's profits. But this could be the start if a general move towards stability control on pickups– as U.S. federal law is already mandating the systems for SUVs. 

The automotive spinmeisters were busy at the beginning of the month. They were either bragging about sales increases or suggesting that they didn't suck as bad as they could have. While it's easy to play fast and loose with sales numbers– estimated vs. actual, the effects of reduced fleet sales, etc.– inventory levels are a reliable indication of showroom reality. When you examine the number of cars a manufacturer's franchised dealers have littering their lots, you begin to know what's what. Let's take a gander at October's numbers.

[NOTE: a 60-day supply is generally considered ideal. Anything above 90-days indicates serious bloat.]

And the crown for lot queen goes to… the Hummer H1, with a 381-day supply. OK, that doesn't really count, but I couldn't resist calling a Hummer a queen. So pass the crown to the Chrysler Crossfire. Even though Bob Nardelli's mob finally whacked the Mercedes SLK-based two-seater, there are still 1100 units waiting for new homes. At the current rate, Chrysler dealers have a 248-day supply. If that isn't bad enough, there's actually a 2008 model on its way. 

The once super-nova Solstice is suffering a full lunar eclipse. Pontiac dealers are looking (and looking) at the second slowest selling car in America, with a 211-day supply on hand. Predictably enough, once the initial excitement for GM's niche model was satiated, sales plummeted. Unfortunately, pre-new UAW contract production didn't. Solstii are piling up on dealer lots, hoping that spring drop top sales increases are eternal. Pontiac's dealers could use the biz; they averaged nine sales per dealer during October.

Honda's next up (or down) with a 192-day supply of their unibody pickup truck, the Avalanche-a-like Ridgeline. Honda dealers are also sitting on a 169-day supply of S2000s, a 123-day supply of Pilots and a 103-day supply of Elements. Fortunately for their dealers, the new Accord's a well-stocked hit (45-day supply), the Fit is no longer hard to find (48-days) and the rest of the lineup sits below the 60-day inventory level (including the Odyssey). Overall, the brand ended the month with a 59-day supply of vehicles.

Jeep dealers wish they were so lucky. They're stuck with a 169-day supply of the [why haven't they killed it yet] Commander. Vindication for TTAC Ten Worst voters: there's a 150-day supply of the Compass, up from the previous month's 121-day supply. There's also a glut of Patriots (142-day supply) and Grand Cherokees (111-day supply). Jeep had 11 sales per dealer in October, the bulk of which were Wranglers (62-day supply) and Liberties (74-day supply). 

As you've no doubt heard, pickup trucks sales are slowing. You can see the stockpiles piling-up down at the dealers. GMC dealers are sitting on a 127-day supply of Canyons, with enough Sierras to last 116 days. GM's last next big thing, the Chevy Silverado, is hanging-out with the Colorado for 117 days. 

Dodges aren't flying off the lots either. The Ram languishes for 117 days, joined by a 110-day supply of Nitros, a 104-day supply of Dakotas and a 100-day supply of Durangos. The Dodge Boys' cars are doing a bit better, but there's still a 93-day supply of Calibers out there, somewhere.

Mercury dealers are struggling to unload the Sable (122-day supply), while customers are lined-up none deep for the old/new/I'm confused Taurus (110-day supply). Like the Solstice, the Mustang's shelf life has ascended (to 104 days). It's not lonely; Rangers clock-in at a 102-day supply.

GM needs to rethink rethinking American. Saturn dealers are holding 109 days' worth of the North American Car of the Year 2007: the Aura. And despite all the praise heaped on the Outlook, Saturn's got a 118-day supply of the Acadia's twin. On the plus side, if sales continue at the same pace, they'll be out of terminated IONs in 15 days.

Nissan dealers have a few slugs on their hands. The Titan and 350Z ooze out of the lots after 107-days. And while you might think gas prices have emptied Nissan lots of frugal Versas, not so. There's a 100-day supply, earning the Versa the dubious honor of America's slowest selling economy car.

At the opposite end of the spectrum, GM has a few fast movers. They only have enough Cadillac CTSs to last 24 days, and enough Enclaves to last 27 days. Chevy's done a good job of clearing out the old Malibu. Dealers welcome the arrival of the new version with a 39-day stock of the old model. 

Sadly for armchair analysts, ToMoCo doesn't break down their inventories by model. Dealers have a 26-day supply of Lexus trucks, a 27-day supply of Lexus cars, a 44-day supply of Scion and Toyota cars, and a 53-day supply of Toyota trucks. With an industry-leading average of 141 Scions and Toyotas and 115 Lexii sold per dealer, ToMoCo is still the one to beat.

Draw what lessons you will from this report. One thing's for sure: too little inventory (Malibu, Enclave) and it's an opportunity missed. Too much and profits evaporate. As you might imagine, an automaker that can balance production against demand has an enormous competitive advantage. Game on!

The "will they/won't they" question about a Prius-based plug-in electric vehicle (PHEV) is gradually being replaced with "how, when, what and where." Why? Because the Japanese automaker has announced it's sending a brace of Prius PHEVs to the University of California (UC) for study. They're current gen Prii fitted with extra nickel metal hydride batteries. Electric-only mode only kicks-in at slow speeds, intermittently, for seven miles, on a full charge. One of the PHEVs is headed for the boffins at the UC's Irvine's Advanced Power and Energy Program. They'll try to figure out how to rate the mpg on the wee beastie and whether or not there are any environmental benefits to partial plug-in power. The other PHEV goes to the social (not to say socialist) scientists at the University of California Berkeley. They're looking to determine whether not anyone wants the darn fool thing and what a PHEV has to do to hit the consumer sweet spot (e.g. range, charging time, battery size and battery costs). Toyota Motor Sales' Marketing and PR Communications Manager says buyers hot for a PHEV will have to wait 'til 2010, at the earliest. 

[Interview with Toyota PR on the whole PHEV thing below.]