The rise of the internet has had myriad effects on everyday life, not the least of which has been its profound impact on consumer behavior. With ever more data being made available online, and with the rise of independent alternative media outlets like TTAC, car buyers in particular are fundamentally changing their relationship to the car buying process. Dealers have been noting for some time that the internet has created better-informed buyers who, armed with more information, are demanding the car they want at the best possible price, wreaking havoc on traditional car dealer tactics like upselling and opaque pricing policies.

But as the eternal dance between supply and demand shifts in favor of consumers, some dealers and OEMs are having a tough time adjusting to the new reality. At the same time, the need to make money off of online consumer education has created some tension for the new breed of consumer-oriented websites. This conflict has now broken out into the open, as the auto transaction data firm TrueCar has found itself locked in a battle with American Honda over the downward pricing pressure created by more widely accessible transaction data. And the outcome of this conflict could have profound impacts on the ever-changing face of the new car market.

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With NHTSA opening a formal defect investigation into the Chevy Volt, GM is moving to defend its rolling lightning rod (no pun intended) and allay consumer fears about its safety. Yesterday I briefly appeared on Fox Business’s Your World With Neil Cavuto show to talk about what the intro to my segment referred to as “the hybrid from hell” and the “killer in your garage.” I tried to explain that the danger to consumers was basically nil, and that the real concern is for rescue, towing and salvage workers. And I would have explained why NHTSA’s tests still leave some serious questions open, but my “fair and balanced” approach meant that my segment ended up being extremely short. So let’s take the opportunity now to look past the hysteria and pinpoint the real issues with NHTSA’s investigation into the Volt.

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Knowing that some of the top PR professionals in the business are regular readers of TTAC (they could be anyone…), I can imagine a number of them shaking their heads in disapproval at the headline of this post. “It’s happened,” they’re probably muttering to themselves, “TTAC has finally lost the plot.” But instead of dismissing out of hand the seemingly preposterous premise of this post, I ask the assembled anonymous masses of PR pros to bear with me for a moment. As laughable as it might seem to postulate that the industry’s spin doctors can learn something from the most infamously “off the reservation” auto exec ever, the urge to write off this post is part of the very problem I hope to tackle. Allow me to explain…
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No, I’m not talking about the cars and SUVs that Mercedes assembles in Alabama. Yesterday, Jack Baruth told us about the relationship between the American Steinway and German Daimler companies and the cars that Steinway started assembling under license from Mercedes in 1905.  When I read Jack’s article I remembered that I had something in my collection of press kits, sales brochures, images and and assorted swag (with apologies to Mr. Zimmerman) that I’ve been accumulating for the past decade or so of working the press previews for the Detroit, Chicago and Toronto auto shows. In 2006 Mercedes Benz distributed a reproduction of a reproduction. It’s actually a very cool little piece of automobilia and a nice facsimile of a historical artifact, in a couple of ways.

It’s a small booklet, less than 40 pages, called The American Mercedes. It was originally distributed in 1906 by the Daimler Mfg. Company, on Steinway Ave. in Long Island City, and promotes the 1906 45 horsepower “American Mercedes”. It was reproduced in the early 1960s, and the copy M-B gave out in 2006 had a 1961 afterword and an insert from 1964. The whole package is chock full of historically interesting aspects.

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Having been asked by a certain newspaper to review the new book “American Wheels, Chinese Roads: The Story of General Motors in China [more info on that review coming soon], I’ve been spending my quiet moments over the last week or so looking into GM’s Chinese operations. The book’s author, Michael Dunne, documents GM’s rise in the Middle Kingdom from the perspective of a well-informed outsider, revealing just how delicate one of GM’s best-performing global maneuvers really was. But after following the rise of GM in China, Dunne notes the December 2009 announcement that GM was selling a 1% stake in its Shanghai-GM (SGM) joint venture to its Chinese partner SAIC (for the paltry sum of $85m no less), arguing that GM had made a dangerous leap of necessity. This sale, implies Dunne, could well have been the tipping point that leads to GM being surpassed by its erstwhile junior (in size, technology and global reach) partner, SAIC. And, in the words of “one GM executive who used to work in China,” GM would need

good luck getting that back.

But, back in June, GM CEO Dan Akerson told GM’s shareholder meeting that he wants to do just that, saying

We have an option to buy that 1 percent. It’s our intention to exercise that.

With Akerson’s announcement, the mystery of GM’s “golden share” sale deepened. At first the question was simply “why would GM sell its 1%?” but now there’s another mystery: why would GM want it back? After some digging, it seems that we are now able to resolve the first mystery, and report why GM sold its one percent. But the whole deal is still surrounded by several layers of mystery which conceal whether GM will in fact be able to regain its 50-50 partnership in SGM, why it would want to and whether its gambit was ultimately worthwhile. And given how important China has been (and continues to be) to GM’s global business, this is definitely an issue that GM- and industry-watchers will want to better understand.

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When should a redesigned car get a new name? Whenever the old one wasn’t a success? Or virtually never? Can car companies count on the excellence of a new car to reverse whatever damage was done to the public perception of the model name in the past?

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I am sitting in a parking garage in a throng of torpid auto-journalists, nearly all of whom are wearing the same glazed expression of terminal information overload. On-screen, molecules of fuel and air are doing a complicated little computer-animated dance, as narrated by Susumi Niinai, program manager at Mazda’s powertrain development division. His English, while Japanese-accented, is better than, y’know, mine, but the concepts he’s explaining approach the limit of comprehensibility to the lay-person. Mind you, it’s a pretty nice parking garage.

Some of you, like me, may have been hearing all the rumblings about Mazda’s new SKYACTIV technologies and been wondering whether it’s going to turn out to be a series of technological breakthroughs or, alternatively, a load of complete cobblers thought up by some Zoom-Zoom marketing guru.

Good news everyone! It’s the former. Bad news everyone! I have to try to explain it to you. And I borderline don’t understand it myself. Here goes…

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A final rule for 2017-2025 CAFE standards won’t be published until September, but a pre-publication notice by the EPA [PDF here] reveals some of the key details we’ve been looking for. The broad strokes, which we are already well aware of are shaping up as follows:

NHTSA currently intends to propose standards that would be projected to require, on an average industry fleet wide basis, 40.9 mpg in model year 2021, and 49.6 mpg in model year 2025.  For passenger cars, the annual increase in stringency between model years 2017 to 2021 is expected to average 4.1 percent, and to average 4.3 percent between model years 2017 and 2025. Like EPA, in recognition of the utility requirements of full-size pick-up trucks and the unique challenges to improving fuel economy compared to other light-duty trucks and passenger cars, NHTSA intends to propose a lower annual rate of improvement for light-duty trucks in the early years of the program. For light-duty trucks, the proposed overall annual rate of fuel economy improvement in model years 2017 through 2021 would be 2.9 percent per year.  NHTSA expects to change the slopes of the fuel economy footprint curves for light-duty trucks from those in the 2012-2016 rule, which would effectively make the annual rate of improvement for smaller light-duty trucks in model years 2017 through 2021 higher than 2.9 percent, and the annual rate of improvement for larger light-duty trucks over the same time period lower than 2.9 percent.  For model years 2022 through 2025, NHTSA expects to propose conditional standards with an overall annual rate of fuel economy improvement for light-duty trucks of 4.7 percent per year

We had heard that trucks would improve their efficiency at a rate of 3.5% rather than 2.9% for the 2017-2021, and a 2022-2025 growth rate of 5% rather than 4.7%. But then, cars were supposed to improve by 5% in the 2017-2025 period, so both truck and car standards seem likely to end up lower than what the president’s report seemed to promise. But that’s not the only bad news for anyone hoping for tough fuel efficiency standards (or, good news for truck-dependent automakers)… with the release of this notice, we have an initial sense of the loopholes that will be included, and they appear to be of the hefty variety.

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Electric vehicles present all kinds of challenges to the traditional ways of understanding cars. From design to differentiation, from range to refueling, EVs simply act different than the internal combustion-powered cars we’ve been refining for centuries now. And yet, through consumer incentives and subsidized charging stations, governments seem to be barreling headlong towards the goal of simply replacing our gas cars with electric ones, as if the two were fundamentally interchangeable. Sadly this is not the case, and a study by Project Better Place and PJM Interconnection [PDF] illustrates in stark terms just how costly an unplanned, uncoordinated rush to electric cars can be.

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The controversy over red light cameras, once relegated to websites like TTAC, thenewspaper.com, motorists.org and highwayrobbery.net, is hitting the mainstream media thanks to a new study by the IIHS [PDF here]. The study used the following methodology:

Telephone surveys were conducted with 3,111 drivers in 14 large cities (population greater than 200,000) with long-standing red light camera programs and 300 drivers in Houston, using random samples of landline and cellphone numbers. For analyses combining responses from the 14 cities, cases were weighted to reflect each city’s share of the total population for the 14 cities.

And what did they find?

Among drivers in the 14 cities with red light camera programs, two-thirds favor the use of cameras for red light enforcement, and 42 percent strongly favor it. The chief reasons for opposing cameras were the perceptions that cameras make mistakes and that the motivation for installing them is revenue, not safety. Forty-one percent of drivers favor using cameras to enforce right-turn-on-red violations. Nearly 9 in 10 drivers were aware of the camera enforcement programs in their cities, and 59 percent of these drivers believe the cameras have made intersections safer. Almost half know someone who received a red light camera citation and 17 percent had received at least one ticket themselves. When compared with drivers in the 14 cities with camera programs, the percentage of drivers in Houston who strongly favored enforcement was about the same (45 percent), but strong opposition was higher in Houston than in the other cities (28 percent versus 18 percent).

Sounds like those red light cameras are pretty great after all, doesn’t it? That’s certainly the IIHS’s takeaway…
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General Motors CEO Dan Akerson set off something of a firestorm a few weeks ago, when he said, in response to a question about forthcoming CAFE increases:

You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.

Predictably, populists and economic alarmists of all stripes took great umbrage at Akerson’s candor, questioning his leadership of GM as well as his perspective on the shaky US economy. But Akerson is not alone in his support of some form of gas-tax increase. Bob Lutz and  Tom Friedman (an odd couple right there, if ever there was one) agree with him. Edmunds CEO Jeremy Anwyl defended Akerson and even suggested a $2/gallon tax earlier this year. Bill Ford and  AutoNation’s Mike Jackson are of the same mind as now-retired Republican Senator George Voinovich on the issue. And yet, inside the Beltway, the subject tends to draw a chuckle and a roll of the eyes. Everyone wants it, but nobody wants it.

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Editor’s note: Ladies and gentlemen, for one night only, it’s the return of Curbside Classics to TTAC. You can catch Paul Niedermeyer’s work (along with contributions from an ever expanding crew of TTAC commenters and more) on a regular basis at the new Curbside Classics site. But this piece? It just had to be on TTAC.

There’s a big difference between creating and re-creating. The proto-hot rodders of yore scoured the junk yards for new solutions, not to replicate. The competition was as much in creativity as it was pure speed. Much of that has given way to endless replication, whether it’s a perfect restoration or a 1000 hp resto-mod. But creative juices are irrepressible, and they were certainly at work here. Want a daily driver Edsel, but not its 1950′s fuel-gulping ways? The solution was just a $200 junkyard engine away. But it had to be imagined first. Now that’s creativity, and a harbinger of the future. Which is exactly what the old car hobby needs: a new model, like this “Eco-Boost” Edsel.

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Mark Modica, a former Saturn dealer GM bondholder, has leveraged his financial loss at the hands of the government bailout into a blogging position at the National Legal and Policy Center, a conservative nonprofit that “promotes ethics in public life through research, investigation, education and legal action.” At the NLPC, Modica focuses on what he believes to be corruption surrounding the auto bailout, and has written a series of anti-GM posts that make TTAC look like a Detroit hometown newspaper (TTAC “bias police,” take note). Most recently, Modica has caught the attention of the auto media, including Automobile Magazine and Jalopnik, with a series of posts accusing Chevy dealers of “scamming” taxpayers by claiming the Volt’s $7,500 tax credit and then selling Volts as used cars. TTAC welcomes anyone seeking to cast more light on the bailout, but unfortunately, Modica’s attacks are too focused on making GM look bad and not focused enough on providing relevant information to the American people. Let’s take a look and see why…

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Tank testing at General Motors’ Milford Proving Grounds

To commemorate Memorial Day here in the US, we’re taking a look at how the American auto industry was mobilized into war production for World War Two. Because that mobilization was so extensive, the conversion to military production so complete, a blog post by it’s very nature cannot really do the subject justice. This is only the most cursory review of the topic, which truly deserves a book length treatment. As a matter of fact, historian Arthur Herman is currently working on a book about the “arsenal of democracy”, American industry during the war.

Herman will have a lot of material to work with.Today we’ll be looking at the role of the Big Three automakers in war production, starting with General Motors. (Read More…)

Chrysler A57 Multibank 30 cylinder Sherman tank engine made from five inline sixes

Memorial Day is a time set aside to remember those who gave their lives in military service to the United States. Today, even as we are fighting two wars and have men and women in harms way in yet other places, though, a relatively small fraction of Americans serve in the military. Few civilians, except military families, understand the sacrifices necessary to protect our country. There was a time, though, when the military conflict was genuinely existential and just about every able bodied man was drafted or enlisted, while virtually the entire civilian population was directly involved in the war effort, either through their jobs in military production, or more personally, because just about everything was rationed giving the military a higher priority for things like vehicles, tires, fuel and food. With the dawn of total war, the plants and proving grounds of Detroit became a new kind of battlefield, in which the tools of economic prosperity were turned into munitions and machines that would change the course of history.

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