Bloomberg seems to think GM is heading back towards bad habits, reporting
General Motors Co. is offering to waive the last three payments on existing leases if holders buy a new car, adding an incentive onto deals that last month exceeded offers made by rivals.
The promotion began this month and is valid on most models with leases that expire between now and Aug. 31, according to the company. GM raised incentive spending in January by 16 percent to an average of $3,663 per vehicle, the highest among major carmakers, according to researcher Autodata Corp. GM sales outpaced the industry that month.
GM said in a video presentation for its initial public offering in November that it intended to offer fewer incentives that crimped margins and created an impression that price was the main selling point for GM vehicles. Early-return leasing deals may conflict with the that pledge, said Jessica Caldwell, an analyst at Edmunds.com.
“I hope they’re not walking down that road,” said Caldwell….
Given GM’s decision to release less incentives data, the signs do seem to be piling up. But, says Chevy marketing VP Rick Scheidt
I am not seeing any internal behavior that suggests we have gone back to old ways. It’s still way too close to the bankruptcy for us to be sliding back into bad habits. We know everybody’s watching.
Ever since Mercedes released its CLK back in 1996, Mercedes has offered one premium coupe slotted between its E and C-Class sedans. Sure, it offered the unloved C-Class Sportcoupe (aka CLC) for a few years in the US as an attempt at an entry-level Mercedes, but nobody really seemed to notice. Otherwise, between there and the none-too-cheap CL, Mercedes offered one coupe, known as the CLK (not counting the CLS “four door coupe”). Now, however, Mercedes has moved in a new direction, offering an “E-Class Coupe” and a “C-Class Coupe,” the latter of which will debut shortly at the Geneva Auto Show. The strange part: they’re both built on the C-Class platform. Mercedes, it seems, has learned an important lesson: when it comes to selling cars, it’s what’s on the outside that counts.
Two years ago, when Kia Souls were just starting to arrive on dealer lots, the Peter Schreyer-styled mini-MPVs looked like “visitors from another planet” on lots filled with old-style Optimas, Spectras and Rios. Today, the Soul fits in fine with its newly-styling siblings… now it’s the old, dumpy Rio’s turn to feel out of place. Along with the frumpy Sedona, the littlest Kia reminds visitors to the Kia lot that once upon a time, not too long ago, Kia’s cars really were an automotive last resort. It’s not that these are fundamentally bad vehicles, but compared to the pop and sizzle offered by their new siblings, they simply aren’t trying to be more than basic transportation. But now, with a new global Rio set to debut at the Geneva Auto Show, even the littlest Kia is getting in on the family’s new flair for visual drama.
The WSJ reports that Mexico is emerging as one of the big winners the the automotive sector recovery, as Edward Solis, President of the Mexican Automobile Industry Association crows
We have a number that historically we’ve never had before. Fourteen of every 100 vehicles sold in the U.S. are Mexican-made in the month of January. Obviously, we can’t say that it marks a trend, that it’s going to continue like that, but it is very interesting that in our principal market we are growing in such a dynamic way.
Full-year US market share for Mexican-assembled vehicles was 11 percent for 2010, but with Hecho-en-Mexico cars like the Fiesta and new Jetta coming on strong, expect that to keep growing. Just don’t tell the hosts of Top Gear!
Is the auto industry headed for a price war? Hyundai Motor USA CEO John Krafcik seems to think so, telling Reuters
I think we can officially say that a price war broke out in the industry. There is apparently a lot of pressure to deliver sales results. I would call this a step backward for the industry. This is short-term thinking in a long-term process that hurts manufacturers and consumers.
Krafcik says GM kicked off the rush for increased volume by cutting prices in January, and that Toyota (which has increased its incentives by 37.5% since last January, according to TrueCar) “quickly” responded by matching The General’s price cuts. Honda, Nissan and Chrysler have also kept their incentives high, and Chrysler has told Automotive News [sub] that it plans on increasing sales by 45% this year. Says Krafcik
We’ll see if others decide to follow. It’s certainly not in our plan right now.
Krafcik has a point: though sales have recovered over the last year as the economy has come back from the depths of recession, industry-wide incentive spending is up 1.3% in the last 12 months. Rather than taking advantage of the economic recovery to bring incentives down and transaction prices up, automakers appear to be focused entirely on volume. That’s certainly the message GM has sent by announcing that it would no longer release its incentive data. And, as Krafcik points out, the industry has already suffered mightily from such short-term, unsustainable thinking… but not everyone shares his concern.
Rather than bringing back the long-running Z28 label for its new top-of-the-line Camaro, GM has reached back even further into the history books for an even more prestigious heritage label: ZL1. GM’s presser (more here) for the 6.2 liter supercharged, 550+ HP, Brembo- and Magnetic Ride Control-equipped ZL1 explains:
When the muscle car war was at its peak in the ’60s, enterprising and racing-minded dealers did everything they could to get more powerful cars from the factory. Some Chevrolet dealers discovered that the company’s special order system known as COPO – the acronym for Central Office Production Order – could be used for higher-performance powertrains. It was intended for dealers to place custom orders for things like special paint packages for fleet vehicles, not building factory hot rods. Nevertheless, Camaro-hungry dealers used the system to request larger, 427-cubic-inch engines and other equipment that wasn’t available in regular-production models. (Read More…)
Chrysler’s extended Super Bowl ad for its 200 sedan is making waves in the American auto business, for “bringing back the pride” in America’s automakers and the city that hosts them. But, as with most things Detroitean, there’s a cruel irony lurking just below the veneer of pride reborn. The Detroit News reports
Three workers from Chrysler Group LLC’s Jefferson North plant were arrested recently for alleged drug use during their lunch break after police were tipped off by the automaker.
The workers were arrested on Jan. 24 but have not been formally charged, said Det. Lt. Robert Honey, of the Michigan State Police’s County of Macomb Enforcement Team.
This is the second time in the last six months that workers at Chrysler’s Jefferson North plant have been caught indulging in overly celebratory lunch breaks. Despite all the feel-good Chrysler advertisements about Detroit Pride and quality craftsmanship, workers assembling the new much-lauded Grand Cherokee can’t seem to build the thing while sober. But there’s more to this than sheer irony: we don’t have details on the latest round of arrests, but a Chrysler-employed TTAC commenter has told us that the previous round of arrests came after second-tier workers turned in union brothers out of apparent resentment of the fact that their colleagues were making twice their second-tier wage while drinking and smoking their way through the work day. Which raises an interesting question: if Chrysler didn’t have a two-tier wage system, would Jefferson North’s 24 hour party people have been caught? Is it possible that the shop-floor tensions brought on by two-tier wages actually help curb UAW worker excesses?
Ford’s been fixing Lincoln for so long now, it’s almost surprising that things on the dealership level are still so broken. But, as Ford told its dealers at last weekend’s NADA convention [via Automotive News [sub]], it’s time to put up or become a former Lincoln dealership. By the end of this year, every Lincoln dealer must comply with a few of Ford’s “more than reasonable” expectations, to wit:
Offering what Lincoln calls “owner privileges.” That includes providing a free car wash and loaner vehicle to owners who come in for service
Having a dedicated service manager and dedicated sales staff for Lincoln, Bokich said. That applies specifically to Lincoln dealers paired with Ford stores.
Having only the word “Lincoln” appear on all franchise signage, not Mercury. Ford discontinued the Mercury brand as of Dec. 31.
Having at least 30 percent of used-vehicle inventory be certified pre-owned vehicles.
You know, those do sound like reasonable standards for a luxury brand dealer network… and if a Lincoln dealer doesn’t like them, well, Ford is looking to trim the network by 100 stores or so anyway. Still, isn’t Lincoln’s problem pretty conclusively product-related? There’s no word from Ford’s boffins on that front, which means some dealers may be happy to leave the Mercury sign up and become one of those used car lots that still has an Oldsmobile sign up. Yes, Lincoln needs a top-notch dealer experience (and an own-brand sales manager to keep marks away from the Taurus) to make Lincoln viable, but demanding it without even hinting at future product is to ask Lincoln dealers to make an incredible leap of faith.
The outgoing Ford Focus fell several spots in the C-Segment last month, and the Kia Forte bumped the Mazda3 down a bit… but as new products like the 2011 Elantra and Corolla, and the 2012 Focus hit the market, this crucial segment will see yet more turmoil.
Mahindra’s abortive plans to bring its rugged diesel-powered pickups to the US began back in 2007, just as gas prices were starting to run out of control. Now, after years of delays, steadily-increasing prices and general neglect of the compact pickup market have served only to whet our appetite for efficient little developing world-style trucks. Throughout the the last several years, Mahindra has battled with its US distributor, pulled out of other US efforts and generally failed to deliver… all while dangling the dream of a 30 MPG diesel pickup at hopeful enthusiasts. But, as it turns out, Mahindra’s problems don’t end with distribution: though its diesel engine was approved by the EPA, we hadn’t seen EPA confirmation for the long-held 30 MPG goal. Well, the EPA just released the window sticker for the Mahindra TR40 [via MahindraPlanet], a 4X4 four-door version of its 2.2 liter diesel pickup… and it gets nowhere close to 30 MPG.
Most foreign-based automakers see the United States as a market first and a production center second: If sales are good enough, production will follow. Mitsubishi, on the other hand, seems to be taking the opposite approach. The Japanese automaker has announced [via Automotive News [sub]] that it will replace production its weak-selling midsized offerings (Galant, Endeavor, Eclipse) at its Normal, Il factory with one model: the Outlander Sport compact crossover. The Outlander Sport (known elsewhere as RVR and ASX) is Mitsu’s newest vehicle, but the firm still envisions only abput half of Normal’s planned 50k units of production to be sold in North American markets (a safe estimate considering it’s still not outselling the Lancer). The other half will be exported to Russia, Latin America and the Middle East. That’s right, Mitsubishi is keeping its only UAW-represented workforce in order to build compact crossovers for export.
When GM’s head of North American operations, Mark Reuss, was giving The Detroit Bureau some choice quotes about GM’s newfound commitment to excellence, it may not have occurred to him that Mercedes had recently laid claim to the very cliche-laden territory he found himself on. To wit:
Reuss insists the new GM philosophy is to “be the best, or we’re not going to do it,”
Yes, Daimler may have to answer to some higher power for the insipid video above, but at least its lack of imagination has pedigree: the line “The Best Or Nothing” killed for Gottlieb Daimler back in the “good old days” of the early 20th Century. Reuss’s lyrical inspiration, on the other hand, is a corporate process. To be fair, the “knothole” as it is known, is a Lutzian legend of a mythical corporate process, aimed at
The perpetuation of excellence and the destruction of mediocrity.
Which sound like mighty fine goals for our fine public investment. So let’s give Reuss a pass for stomping into Mercedes’ marketing-cliche territory, and ask: what is this amazing “knothole” and why doesn’t every automaker have one? (Read More…)
Wherever you fall in America’s cultural geography, you have to cop to one cold, hard truth: trucks sell. In fact, in a market experiencing such odd automotive sales phenomena as no Honda Accord in the top ten, Altima taking second in the D-Segment and a Compact CUV in the top six, it almost seems like the only sure thing anymore is the F-Series and Silverado selling at or above 30k units per month. Whether you find that fact comforting or troubling, you’ll be sure to want to know the truck’s secret to success… which you’ll find just below the fold (along with a more extensive best-sellers chart).
Like any other diverse, multiethnic state, the US of A doesn’t so much have a distinct national culture as a no-holds-barred cultural cagematch of competing values, lifestyles, and perspectives. We call it “pluralism,” although more politically-minded commentators might call it “the war for America’s soul.” Anyway, with America’s cultural divide still creating yawning chasms between the experiences of citizens in “red” states and “blue” states, it’s not enough to simply look at sales statistics for the whole country. No, to truly understand the different cultures forming America’s automotive melting pot, we must look at car sales region-by-region in hopes of identifying the constituent parts of our larger car culture. And that’s exactly what TrueCar has done, breaking out both sales and discounts for the top-performing vehicles in one West coast state (California), one East coast state (New York), one Midwestern state (Illinois), and one Southwestern state (Texas). The result: a snapshot of our diverse market for cars, and a peek at our conflicting car cultures. [Data after the jump]
Worried that Chrysler has lost touch with young buyers? Worry no more! Chrysler’s Tim Kunisis tells Automotive News [sub]
There are two paths: the traditional Chrysler path and the S path. There’s a huge customer base for chrome and wood. There are also people who want something a little edgy.
As a result, Chrysler is introducing its “S” line, a trim level that stands for Style rather than Sport, which will encourage these edgy Chrysler customers to tart up their Mopar metal with non-traditional accessories. Nor is “S” a top-level trim designation, but will be available on the standard 300, the 300 Limited and the 300C. And though Chrysler is showing an “S” version of its outgoing 2010 300, the first new “S”-branded vehicle will be the 200, which should look something like the Moparized 200 shown at the Detroit Auto Show. And if the whole “what’s in-what’s out” question is giving you some trouble, AN [sub] provides the hand guide below.
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