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DETROIT — General Motors is trying to change its image, fast. So they chose the only person on hand that made sense as its image czar: an old car guy with some new ideas.
"(GM's) image is in tatters, and they need a real jump-start," says Peter DeLorenzo, editor of AutoExtremist.com. "I think Bob will bring it."
Bob Lutz, 77, was going to retire at the end of 2009, but decided to stick around and help GM revamp its advertising, internal communications and public relations. Lutz is the same guy who propelled GM's product design into the 21st century, and most critics say his tenure has helped the company turn out some pretty good vehicles.
"When I made the decision to retire, I thought we'd be in bankruptcy for a long time. I thought we'd lose our freedom to design and build the products the public wants as opposed to the products the government wants to see on the road," Lutz says. "I thought all of the fun is gone from the business. ... But lo, and behold, the government task force were not a bunch of ogres. They were extremely helpful, and their only agenda was to make GM the best company it could be."
Now, Lutz says, GM has to move fast to convince consumers it's changed. While the product design changes he made are taking hold over years, the ad changes could take hold in a month or so.
"There's a lot of stuff that irks me" with GM's current advertising, Lutz says.
Take, for example, recent print ads intended to talk about GM's car buyback program in case of job loss or illness. They were so weighed down with print, Lutz says, they quickly lost their meaning. He also dislikes the current Buick ads that show a Hollywood director fawning over the Enclave crossover and all-new 2010 LaCrosse sedan.
"That Buick commercial tested very well, which is not the same as saying that it's an effective ad," is how he tactfully put it in a Web chat this week. "I think you will very quickly see a drastic change in the tone and content of our advertising. And if you don't, it will mean that I have failed."
Lutz, a pilot and former Marine with a penchant for cigars who is known to commute by helicopter from his home outside Ann Arbor, Mich., to GM's headquarters in Detroit, has a reputation as a colorful speaker. That's sometimes landed him in trouble, but he's a favorite with the automotive media, who crowd around him at events to get his vivid, tell-it-like-it-is take on whatever he feels like talking about: cars, the state of the economy and global warming (of which he is famously skeptical).
Once he spent the bulk of an interview bemoaning the loss of scantily clad models at auto shows, pointing out that at one time, the Paris auto show was filled with topless models.
DeLorenzo says that although Lutz has said some things in the past that could come back to haunt him — such as once calling global warming "a total crock" — he is in tune with what people want, and has had a role in improving GM's green image.
"He's been one of the chief boosters of the Chevrolet Volt," GM's electric car due on the market in late 2010, says DeLorenzo. "To label Bob as someone who's not appreciative of the green sensibility or where a lot of consumers' minds are going, I don't think is accurate or fair."
Still, Lutz stands by his skepticism on hybrids, which he says are having trouble selling in the current market because gas prices are too low and the cars are not cheap. People still want bigger cars, he says, with more power.
"Other than in the media, there is not a groundswell toward green vehicles in the United States," Lutz says. "In fact, they're a very hard sell."
Lutz returned to GM, where he got his start in 1963, in September 2001 as vice chairman of product development. He spent 12 years at Ford in the 1970s and '80s and 12 years at Chrysler until 1998.
He was asked by former GM CEO Rick Wagoner to rejoin GM and help the company improve its product lineup. He started by giving the designers more control of the cars, rather than allowing the finance department to have the final call.
Ron Stampfl, a marketing professor at San Diego State University, says Lutz helped repair GM's product lineup to a remarkable point, and his challenge now is to get shoppers to consider the cars. "The problem is getting people willing to try a GM product early in their shopping process," Stampfl says. "Right now, it's not even on many people's shopping lists." That's something that can be fixed with effective advertising, Stampfl says.
And it's among Lutz's top priorities. "We must do a far more effective job communicating what we are and who were are," he says. "We have to reconnect with this depressingly large part of the American public who won't give us consideration."
Lutz expects to have impact within a month or so. His first meeting to go over future advertising was Tuesday, and before going into the meeting, he said he didn't expect to approve much of it.
And although he'll be overseeing communications, Lutz says he expects the public relations department also still will need to keep tabs on him and what he says publicly.
"I expect people to step in," he says. "But having said that, I do believe we have to be much bolder and much more self-aware, and in some cases, more controversial or willing to tell it like it is rather than putting out a more sanitized version."
When it comes to making reliable and attractive vehicles, Detroit's automakers say they are closing the gap with import brands -- and J.D. Power and Associates issued the latest in a string of surveys Thursday backing up that claim.
On a scale of zero to 1,000, American car brands, led by General Motor Co.'s Cadillac and Ford Motor Co.'s Lincoln, lag foreign brands by only five points in J.D. Power's 2009 Automotive Performance Execution and Layout Study measuring new car owners' satisfaction with the performance, features and layout of their vehicles.
That compares with a 15-point difference last year. "On a thousand-point scale, we're talking pretty fine differences," said David Sargent, vice president of automotive research at J.D. Power.
Excluding premium brands, domestics have a slight edge over their foreign rivals, according to the survey of nearly 81,000 people in the first 90 days since they bought or leased their vehicle.
J.D. Power recently issued its annual Initial Quality Study that also showed the domestics narrowing the gap with their foreign-based competitors.
Surveys by other firms, such as AutoPacific Inc. and Strategic Vision, also conclude that domestics have become more competitive in recent years.
But, as frustrated U.S. auto executives have come to realize, "truly closing the perception gap takes time," Sargent said. "They didn't lose their original image overnight and they won't regain it overnight."
He estimated that it takes several years for the perception of a brand to catch up with the reality.
Derrick Kuzak, Ford's group vice president of global product development, said the Dearborn automaker has been working hard to improve the basic reliability and performance of Ford vehicles and is now trying to equip models with features designed to delight the customer.
"We're still consumed with basic quality, but we're also now very focused on providing appeal and excitement," Kuzak said.
Ford captured top scores in two segments in J.D. Power's study, with the F-150 truck and Flex crossover. Honda Motor Co.'s Honda brand, Daimler AG's Mercedes-Benz, and Nissan Motor Co.'s Nissan brand also captured two segments.
Among the other findings:
• Chrysler Group LLC's Dodge was the most-improved brand, followed by GM's Pontiac, Buick and Cadillac.
• The Dodge Ram, Buick Lucerne and Ford F-150 truck were the most-improved models.
• Volkswagen models led in four segments -- more than any other brand -- with the CC, GTI and Passat cars and Tiguan compact SUV.
• Mercedes' S-Class sedan won the highest score of any model, but Porsche was the highest-scoring brand for the fifth year in a row.
• Improved fuel efficiency, coupled with lower fuel prices, helped nudge the average APEAL score to 779 from 770 in 2008.
For all-new and redesigned models, the average score was 11 points higher at 790.
BMW is recalling about 600 of its 2009 X5 and X6 vehicles because faulty rear brake discs could result in a loss of braking, according to the National Highway Traffic Safety Administration.
The company, which built the vehicles at its Greer plant, reported the potential problem to the federal agency June 25. No crashes or injuries have occurred because of the potential problem, said Dave Buchko, a spokesman for BMW of North America.
"The rear brake discs may not have been manufactured according to specifications," according to the NHTSA recalls summary of the problem. "As a result, a reduction in braking performance at the affected rear wheel could occur.
"In an extreme case, the affected rear brake disc could break, resulting in a loss of braking at that wheel, increasing stopping distances and the risk of a crash," the summary said.
The vehicles that may have been affected were built between May 22 and June 1, Buchko said. Fewer than 100 of the vehicles were sold in the United States. Since the recalled vehicles were in a recent production run, most were identified and inspected by BMW prior to being sold.
BMW has not provided the federal government with a remedy for the problem or a notification schedule for the recall. However, owners of the vehicles can call BMW at (800) 831-1117.
The company is mailing a notification of the recall before the end of the month to the owners of any affected vehicles, Buchko said. At that time, they can go to their BMW dealership for repairs.
BMW's Greer plant, which is completing a $750 million expansion that is adding a new assembly facility and expanding the paint shop, makes both the X5 sports activity vehicle and the X6 sports activity coupe. An X6 hybrid is expected to be produced and launched the end of the year, with production of the X3, a smaller SAV, moving to the plant next year.
If you don't like making decisions, forget about the BMW M3 Convertible.
This high-performance sports car gives its driver so many choices that only true aficionados will take full advantage of the menu.
For most of us, simply turning the ignition, latching the belt, shifting into "D," and powering up the AC and sound system will suffice.
People who love gadgetry and high-technology will never make it out of the driveway when they first meet the M3.
The fourth-generation of this legendary performer offers driver-adjustable settings for engine response, steering, damping and stability, with an optional steering-wheel-mounted "MDrive" button to store the preferences. There are a series of options for entertainment and navigation system settings via the iDrive controller on the center console.
The new double-clutch, seven-speed automatic transmission with Drivelogic takes some study before activating. Drivelogic offers 11 different shift programs, with five for automatic and six for manual shifts. Drivers can use the nubby shift lever or steering wheel paddles. You pull the right-hand paddle to shift up and the left to shift down.
And then, there's the ultimate question: Top up or down? The power retractable hardtop makes it easy to enjoy the open air, seamlessly raising and storing the roof in the trunk with no need for driver intervention. The top is so well integrated into the body, that there is no clear sign that this coupe is actually a convertible with the roof in place.
Bearing a base price of $66,500, the review car cruised to $80,320 with options. One of the idiosyncrasies of the German brands is a tendency to skimp on features that are standard on domestic luxury models. Cadillac, for instance, would probably not charge $400 for an iPod and USB adapter or $595 for a year of satellite radio on a CTS.
While most drivers would find all the technology excessive, the kind who shop BMW and Mercedes-Benz will be properly enthralled. The two German luxury brands are in a state of perpetual competition for cutting-edge credentials.
Some automotive scribes hate the i-Drive, a rotary dial within easy reach on the center console. The dial controls multiple systems, allowing you to choose one by pushing down on the dial. While it takes some getting used to, the system becomes quite intuitive with greater familiarity. The choices are displayed on an LCD screen on the center dash with large, visible lettering.
Meeting the new transmission may produce an inward groan about how these automeisters can't seem to leave "ultimate" alone. Frankly, I needed more than a week to get really comfortable with this system, which seems to prefer a manual mode over automatic. You flick the lever to the right once and you're in first gear; flick it again and you're in "Drive." And the gear selections on the instrument panel and the LCD screen seem to disagree: one shows you're in "Park" and the other shows your in "Reverse."
But the transmission is well matched to the first V8 in an M3, a lightweight engine that cranks 414 horses breathing through 32 valves.
Weighing only 445 pounds, the 4-liter engine is 7 percent or 33 pounds lighter than the previous model's Inline-6. The crankcase is made of a special aluminum-silicon alloy, eliminating the need for cylinder liners.
Fuel economy is bad enough at 14 city and 20 highway miles per gallon to earn a $1,700 gas guzzler tax.
The M3 represents a rich automotive legacy linked to motorsports. BMW introduced the first generation in 1986 to enter the motorsports version in the German Touring Car Championship. Amid growing demand, the sports coupe evolved into a better performer and more inviting road car in tandem with its 3-Series platform mate.
The first M3 in North America arrived in 1988 bearing a naturally aspirated 2.3-liter four-cylinder engine that produced192 horsepower. The next generation arrived in 1995 with a 3-liter (and later, 3.2-liter) 240-horsepower inline-six powerplant. The first M3 Sedan joined the family in 1997, and the first M3 Convertible followed shortly thereafter.
The fourth-generation is the first with a V8 and the first with the steering wheel mounted MDrive button that debuted in the M5. Included in the $3,250 Technology Package, MDrive allows the driver to personalize the convertible's driving characteristics, including the amount of wheel slippage allowed. The tech package also includes Electronic Damping Control, the BMW Navigation System with Real Time Traffic Data and the Comfort Access system that allows keyless operation of the vehicle.
WHAT'S NEW: Convertible version, first V8-powered M3.
In his Santa Monica gallery, Samuel Freeman displays a nifty bit of automotive art, a full-size replica of a Chevy V-8 engine made out of stained glass. But Freeman himself worships at the church of the electric car.
In November, Freeman was one of nearly 2,000 people who signed up to lease a Mini E -- an experimental electric-vehicle conversion of BMW's charming, capering retro-runabout. In early June, he was one of the lucky 450 Americans to get a car -- his is No. 104 -- and since then he's been ripping up the streets of Venice and Santa Monica, quietly.
"The acceleration is huge," says Freeman, 34, as he mats the accelerator. "It's got a tremendously lightweight feel."
"It's all the G-force of a sports car without the guilt," he says. "I love it."
But not everyone in the EV community is so enthused. For the last several months, a not-entirely-civil war of words has erupted on blogs and Facebook between BMW and those who'd volunteered to pay $850 a month for the privilege of leasing a Mini E for a year. Critics say the cars were months late in reaching customers. A shortage of high-power cables left many dealing with desperately slow recharging times. Some of what BMW calls its Mini E "pioneers" have dropped out of the program because of delays in the installation of home charging equipment, others because of the expense of upgrading their home's electrical service.
Late last month, the grass-roots EV advocacy group Plug In America, based in Santa Monica, denounced the Mini E program as "botched." BMW's muddled rollout of the Mini E "makes the whole technology look like it's not ready for prime time," says Chelsea Sexton, a member of the group's advisory board.
The accusation with the most sting is that BMW is exploiting a loophole in the California Air Resources Board's Zero Emission Vehicle mandate. Automakers who sell more than 60,000 units a year in California must offer a certain number of high-efficiency vehicles to the public. However, because the rules don't distinguish between selling and leasing vehicles, BMW is getting full credit for vehicles that will be on the road for only a year. (The hydrogen-powered Honda Clarity also benefits from the rules.)
For many EV advocates, the issue resurrects the painful memory of GM's EV1. When GM no longer needed the cars to meet state requirements, the cars were taken from lessees and crushed.
"We're afraid that it's going to be the '90s all over again," Sexton says.
Mini spokeswoman Nathalie Bauters says the company made no secret of trying to take advantage of the Zero Emission Vehicle credits ahead of the June 30 deadline. "There was no gaming of the system," she says.
As for leasing the cars, as opposed to selling them outright, she notes that the cars use experimental lithium-ion batteries. "Lithium is not used in vehicles sold to the public because we're not there yet." (The Mini E is only the second car on the road with such batteries, after the Tesla Roadster.)
Rich Steinberg, manager of product strategy for the Mini brand, concedes that "things could have been done better. There's legitimate criticism out there." However, he says, "BMW is clearly committed to this technology. We have learned a bloody ton, and we intend to use that learning in the future."
For instance, Steinberg says, the company underestimated the time and difficulty in coordinating the installation of the home recharging equipment among subcontractors, utilities and municipal inspectors. This is an issue that is certain to confront more homeowners as EVs enter the market.
Another problem: BMW's original plan was to use a beefy, high-power cable that had been in use in Europe, assuming it would be quickly approved by Underwriters Laboratories.
Unfortunately, UL's lengthy testing procedures created a major delay. Program managers also learned that all the equipment to recharge the car -- the wall box, cable and connector -- has to be approved separately and as a unit by UL. Meanwhile, electrical inspectors for different municipalities "all have a different read on the rules," Steinberg says. Some installations were quickly approved while others were turned down flat.
Ed Kim, an aerospace program manager in Irvine, finally received his high-power charging cable June 8 but ran into problems because the unit was not UL approved.
"Then I got angry," Kim says. "I was ready to get out."
BMW and the pioneers have also wrangled over who was entitled to the $7,500 federal tax credit for electric cars. However, it appears now that because the lease is only one year, neither BMW nor the lessees will be able to claim the tax credit.
"Some of these [tax] rules are not even written yet," Steinberg says.
As the online dispute got uglier last month, BMW was accused of dumping the Mini E on municipalities and other agencies, such as the Los Angeles County Sheriff's Department, in order to have all the cars on the road by June 30. "We directly refute that," Steinberg says.
The hostilities became so intense that one of the program participants, Jeff U'ren, a former EV1 driver, was told he would not be getting a car. "I am being punished for bad behavior," he says. BMW declined to comment on U'ren's situation.
Executives at BMW confess to being a little bewildered by the EV community's reaction. "We knew going in this was an extremely evangelistic audience," Steinberg says. "We also made clear that this was a field trial and not everything was going to go smoothly. That's why we call them pioneers."
Yet "we honestly feel like we are doing good," he says.
And BMW has its defenders, including Freeman.
"What they've done is legitimately stick their toe out," Freeman says.
"The cars are on the road. People will see it, talk about it, want to drive it. You can't do that with press releases and auto shows."
I sit right in front of the entire mini e team and i can tell you this article is full of crap. and its stuff like this why companies normally dont let normal people take part in developmental long term test drives.
The beat down rental car has been a symbol of the domestic auto industry's woes for decades now, but the recent upheaval has suddenly turned the tide. According to a report in the Los Angeles Times, rental companies are now buying more foreign cars than domestic brands.
"Hertz now carries as many Toyotas as Fords," according to the article. "The Nissan Altima has edged out the Chevy Impala as the top-selling car in the rental market. But the real shocker is the Koreans. Combined, automakers Kia and Hyundai grabbed a 9.5% share of the U.S. rental market last year, their highest total ever."
On one hand, getting rid of their dependence on fleet sales is a good thing for the domestics, but on the other hand, if it's done right rental cars can provide easy exposure. Should be interesting to see how it shakes out for the likes of Hyundai and Toyota.
We thought briefly about titling this post: Geeking Out: The Mustang II is the second-most popular ponycar of all time. But putting the universally ridiculed Ford Pinto-based Mustang II in the title is the ultimate traffic buzz kill.
For this the second installment of Geeking Out (click here for the first installment on Lamborghini sales), we looked at the total sales of all Mustangs in the model's nearly half-century run. And depending on how you slice the data, that hideous little heap is, indeed, in the second-place spot.
Follow the jump for an explanation and a heapin' helpin' of geekiness.
"But, look, the Mustang II column on the top chart is the shortest of all except for the current car," you say? Well, that's true. The Mustang II, which was produced for five years ('74 through '78), accounts for only 1,016,836 of a total of about 8.3 million total Mustangs built over the model's lifetime.
But have a look at the chart below.
Because some generations of Mustang ran for 10 years, some 15 and some only five, the only fair way to compare them is to calculate the average yearly sales within each generation. No surprise that the wildly successful first generation is still the king of Mustang sales. But every generation since then, average yearly Mustang sales have shrunk.
And before anyone pens a scorched-Earth comment about the utter falseness of our generational cutoffs, know that we have followed Ford's lead here in defining a generation not as a body style but instead on what platform underpinned the cars. So the Falcon-based 'Stang covers everything from a girly-white '641/2 convertible to a bloated 1973 side-burn transporter. The Mustang II covers 1974 through 1978. The Fox bodied cars were built from 1979 through 1993. The SN95 cars that were built from 1994 through 2004 are considered the fourth generation. And the 2005-to-present Mustangs use what's known as the S197 platform.
Here are a few other interesting thing revealed by the numbers:
* The Mustang's biggest selling year was 1966, when Ford unloaded 549,436 units. That's more than a Toyota Camry or Honda Accord sells in a good year. For perspective, Ford sold almost as many Mustangs that year as it did for the years 2005 though 2008 combined.
* The Mustang's worst-selling year was 1991, with a paltry 80,247 units moved. That's about 11,000 fewer Mustangs than Ford managed to unload last year in the amid the collapse of the American car market.
* The last time Mustang sales reached or exceeded 200,000 in a year was 1980. The last year Mustang sales topped 300,000 in a year was 1979, the year after the Mustang II was killed off.
BMW to Leave Formula 1 Racing | View Web
07/29/2009
Wall Street Journal
FRANKFURT -- BMW AG said Wednesday it will leave the Formula 1 motor-racing series at the end of the 2009 season as part of a wider move to streamline its cost structure.
"Of course, this was a difficult decision for us. But it's a resolute step in view of our company's strategic realignment," said BMW Chief Executive Norbert Reithofer in a statement.
BMW's executive board member Klaus Draeger added that the team had been "unable to meet expectations in the current season." The BMW team currently ranks eighth among the 10 Formula 1 teams with only eight championship points from 10 races.
Mr. Draeger said the number of job cuts resulting from the decision can't be specified yet. "Since we only made this decision yesterday, we cannot provide any more precise information," he said.
BMW's move underscores the fierce pressure for global auto makers as the industry experiences its most dramatic downturn since World War II and at the same time faces skyrocketing costs to develop green technology to comply with stricter emission regulations.
Demand for luxury cars has been battered in recent months as consumer confidence has waned and credit markets dried up amid the downturn.
BMW, the world's largest luxury car maker by sales, has been particularly hard hit due to its large exposure to the troubled U.S. market.
CEO Reithofer said that "premium will increasingly be defined in terms of sustainability and environmental compatibility. This is an area in which we want to remain in the lead."
High-profile racing series such as Formula 1 have come under increasing scrutiny due to a higher awareness among car buyers for environmental issues. Additionally, exploding costs and glitzy show events have earned criticism amid the financial crisis.
Formula 1 teams don't disclose their individual costs, but the investments of the top teams are estimated to be hundreds of millions of euros.
Reacting to the market downturn, the Munich-based auto maker initiated a far-reaching program, dubbed Number One, aimed at streamlining costs and restoring profitability.
BMW plans to exceed the initial target of €4 billion ($5.67 billion) of material-cost reductions by 2012 as part of a wider cost-cutting target of €6 billion.
BMW said it plans to continue some other racing activities such as the touring car series and the young driver promotion program Formula BMW along with the American Le Mans Series and the super bike world championship.
GM Plans a Return to Car Leasing | View Web
07/29/2009
Wall Street Journal
General Motors Co. and its financing affiliate GMAC Inc. are eyeing an Aug. 1 return to the auto-leasing market, according to people familiar with the matter, after massive government bailout packages allowed both companies to get back on their feet.
GM and Chrysler Group LLC pulled out of leasing in August 2008 amid a steady decline in vehicle resale values, a sales slump and troubles at their respective lending affiliates.
At the time, leasing represented about 20% of GM's new-car business in the U.S. and was causing losses for GM and other car makers.
Many of their key competitors, including Ford Motor Co., Daimler AG and Toyota Motor Corp., scaled back leasing but didn't pull out of the business completely.
In a recent conference call with analysts and reporters, GM said many of the company's former lease customers have decided to purchase vehicles instead from GM, or chose to buy a used car or defect to another auto maker.
GM, which filed for bankruptcy in June and emerged from court in early July, has said credit availability still remains a key drag on auto sales.
Details of GM's leasing plans are still being hammered out, but people familiar with the program said the company is looking at various models across its four-brand lineup as candidates for leasing. Those include the Cadillac CTS, which competes in a luxury market that is heavily dependent on the availability of lease deals.
GM spokesman Pete Ternes said the car maker has been studying ways to get back into leasing, but couldn't comment on the company's exact plans because they aren't finalized.
GMAC spokeswoman Gina Proia said her company "continues to evaluate ways to support" the auto industry with financing packages and "leasing is one of the options we are evaluating."
A GM executive working on the plans said the auto maker has talked with several banks as well to obtain financing for leasing. "Credit is easing, banks have capacity and [resale] values have been steadily increasing," the executive said.
After running into serious liquidity problems in late 2008, both GM and GMAC, a former subsidiary, have been propped up by more than $60 billion in government funds. GMAC's balance sheet was strengthened by $12 billion in federal capital in the second quarter alone.
GM sold 51% of GMAC in 2006 to Cerberus Capital Management LP, and was forced to give up an additional 40% of its stake after the December bailout of the lending firm. Currently, GM owns 9.9% of GMAC, which has become a bank holding company thanks to the bailout.
Despite GM's shrinking stake, the auto maker and GMAC remain contractually bound as preferred partners when it comes to new-vehicle financing. GMAC recently added Chrysler Group as a strategic partner following Chrysler's early-June emergence from bankruptcy protection. It is unclear when, or if, Chrysler will return to leasing.
Although GM dealers have been able to finance some buyers via lease programs through credit unions and other lenders over the last 12 months, those deals have represented a negligible part of its sales.
Historically, GM and GMAC were able to team up to offer cheap leases. GM would use marketing dollars, earmarked as vehicle incentives, to subsidize the cost of a vehicle lease that GMAC would originate and fund.
There are several factors behind GM's willingness to tiptoe back into offering new-vehicle leases at its dealerships, including the firming up of resale values for used cars and trucks.
When vehicle resale values, also known as residual values, decline, the fundamentals underpinning the leasing market are damaged because lease payments are typically calculated on the assumed value of a car or truck at the end of a lease contract.
If resale values are unstable, it becomes more difficult to run a profitable leasing business.
Daimler Swings to Loss | View Web
07/29/2009
Wall Street Journal
FRANKFURT -- Daimler AG swung to loss in the second quarter due to weaker demand for luxury cars and trucks amid the economic downturn and confirmed that full-year revenue and vehicle sales are expected to come in significantly lower than in 2008.
The Stuttgart-based auto maker reported a second-quarter net loss of €1.06 billion ($1.5 billion) compared with a profit of €1.4 billion a year earlier. The net loss was less severe than the €1.34 billion analysts had forecast. Second-quarter revenue fell 25% to €19.6 billion from €26 billion.
Earnings at the Mercedes-Benz cars, vans and financial services units showed some improvement compared to the gloomy first quarter, but "a comparison with the very good second quarter of last year shows that there is still a lot of work to be done," Daimler Chief Executive Dieter Zetsche said in a statement.
Daimler said its closely watched earnings before interest and tax, or EBIT, swung to a €1 billion loss as restructuring charges on top of deteriorating vehicle sales added fuel to the fire. But EBIT still came in ahead of analysts' expectations of a €1.53 billion loss.
Charges related to the sale of its remaining 19.9% stake in Chrysler LLC to Cerberus Capital Management LP shaved €387 million off earnings. A €204 million charge was booked in the second quarter for the restructuring of Daimler's Japanese truck unit plus €13 million in expenses for slashing capacity at the North American truck operations.
Daimler's core Mercedes-Benz division, which comprises the Mercedes-Benz, Smart and Maybach name plates, posted a €340 million operating loss compared to a €1.21 billion profit in the year-earlier period, but solid sales of the new generation Mercedes-Benz E-Class cushioned the fall.
Daimler's truck unit, the world's largest truck maker by sales, posted a €508 million operating loss as demand for trucks stalled amid the economic downturn after a €608 million profit in the same quarter last year.
The auto maker's shares traded up 5.5% while the blue-chip DAX index traded 1.8% higher. The stock has lost around 17% of their value over the past 12 months, compared to a 7% fall in the Dow Jones Stoxx Europe 600 automotive and parts sector index, highlighting the woes embroiling luxury-car makers and truck manufacturers, in particular.
i'm happy im not longer with them.... times will be tough for their NA employees
Peugeot, Honda Rally Shows Auto Slump May Be Easing (Update1) | View Web
07/29/2009
Bloomberg News
July 29 (Bloomberg) -- Automakers may be getting past the worst of the slump after PSA Peugeot Citroen said it generated cash in the first half and Daimler AG, Honda Motor Co. and Nissan Motor Co. posted better-than-expected quarterly results.
Peugeot said today it had 467 million euros ($660 million) in free cash after reducing unsold stocks by 31 percent. Honda reported net income of 7.5 billion yen ($79 million) versus a 40 billion-yen loss predicted by analysts, Daimler's 1.06 billion- euro loss was narrower than the estimated 1.14 billion euros and Nissan's 16.5 billion-yen loss beat a 58.5 billion yen forecast.
France, Germany and Japan are among countries offering a mix of credits, tax breaks and subsidies to get consumers to trade in old cars for newer, more fuel-efficient models. The policies are stemming the plunge in auto demand that helped push General Motors Corp. and Chrysler LLC into bankruptcy.
“It will be a very bad year, but it's getting better,” said Edwin Merner, who helps manage about $3 billion at Atlantis Investment Research in Tokyo. “The general consensus is that things will start to look a lot better from October.”
Paris-based Peugeot, Europe's second-largest carmaker, rose as much as 9.5 percent to 20.15 euros in the French capital, the biggest gain since June 1. The stock has added 66 percent this year, valuing the company at 4.71 billion euros. Stuttgart-based Daimler gained as much as 6.5 percent.
Honda advanced 1.1 percent to 2,770 yen at the 3 p.m. close of trading on the Tokyo Stock Exchange. The automaker has gained 45 percent this year. Nissan rose 0.8 percent to 631 yen, bringing gains to 97 percent. The companies are Japan's second- and third-largest carmakers, after Toyota Motor Co.
‘Fears Eased'
Peugeot's “surprisingly strong cash performance will ease fears over a rights issue,” said David Arnold, an analyst at Credit Suisse in London who rates the stock “outperform.”
The French company and European rivals have closed plants temporarily as they struggled to reverse a buildup of unsold cars. Chief Executive Officer Philippe Varin, who took over from Christian Streiff in March, is pressing ahead with measures to shorten vehicle development times and trim costs while seeking new partnerships and alliances to expand into emerging markets.
Peugeot had a net loss of 962 million euros in the half, compared with a 733 million-euro profit a year earlier, and revenue fell 22 percent to 23.5 billion euros. The company expects a full-year operating loss of 1 billion euros to 2 billion euros and a negative cash flow for the 12 months, it said in a statement.
Daimler Outlook
Daimler, the second-largest maker of luxury cars, forecast a “gradual improvement” in operating profit after the recession hurt sales of its Mercedes-Benz models. The company had 41,000 employees working at least 10 percent fewer hours, compared with 68,000 in April.
Honda raised its full-year earnings forecast by 38 percent to 55 billion yen for the year ending March. Nissan kept its full-year forecast unchanged at a loss of 170 billion yen.
President Takanobu Ito, 55, expects sales to recover in the second half and is raising funds in anticipation of an increased demand for car loans. A “cash-for-clunkers” program in the U.S., which gives consumers as much as $4,500 for trading in an old car, may spark 250,000 new car sales, lawmakers have said.
Japan has implemented tax cuts and subsidies on some fuel- efficient cars to spur auto sales. Consumers can apply for a 250,000 yen subsidy if they scrap a car more than 13 years old to buy a new one and 100,000 yen for a new car purchase without scrapping an old one.
Nissan Jobs
Nissan Chief Executive Officer Carlos Ghosn, 55, is slashing 20,000 jobs this year as the company expects global vehicle sales to slide 9.7 percent to 3.08 million vehicles. The value of Nissan's overseas sales last quarter was also hurt by the yen's 7 percent gain against the dollar.
“2009 continues to be a tough year,” Ghosn, who is also head of Renault SA, France's second-biggest carmaker, said in a statement. “We remain cautious in our outlook.”
Nissan's first-quarter global vehicle sales fell 23 percent to 723,000. Sales in Japan dropped 22 percent to 116,000 vehicles. In contrast, Honda's domestic sales were unchanged at 128,000 vehicles. At Peugeot, car and light-truck sales dropped 14 percent to 1.59 million vehicles in the first half.
Honda raised its global vehicle sales forecast for the year to 3.295 million units from a previous estimate of 3.21 million vehicles on stronger-than-expected demand in its home market. In Japan, the company introduced its Insight hybrid in February, which helped boost domestic sales by 5.7 percent in June.
“Honda has scope to raise its profit forecast further,” said Yasuaki Iwamoto, an auto analyst at Okasan Securities Co. in Tokyo. “Government incentives are helping.”
China Boost
China, set to overtake the U.S. as the No. 1 vehicle market this year, was a bright spot for both Japanese manufacturers.
Honda's first-quarter sales in China jumped 21 percent and Nissan's rose 9.3 percent. With its partner, Dongfeng Motor Group Co., China's third-largest carmaker, Nissan will expand capacity in the country to 600,000 vehicles from 360,000, buoyed by 5 billion yuan ($732 million) of investment.
“With the stimulus measures, the demand outlook is improving from what it was three months ago,” said Mamoru Kato, an analyst at Tokai Tokyo Research Center in Nagoya.
we have been hearing some rumbling of somethign bad as it pertains to nissan.... we shall wait and see. firing 22,000 people and running a full time ring program on an already fully developed vehicle would piss me off if i worked there.
BMW employees offered buyout | View Web
07/29/2009
Spartanburg Herald-Journal
Production associates at BMW Manufacturing's Spartanburg facility have been given a limited-time option of accepting a buyout to sever their ties with the company, a spokesman confirmed Tuesday.
The move is a result of the company's early 2008 announcement in Germany that it planned to cut 8,100 workers worldwide. According to BMW's most recent annual report, its workforce was reduced by about 7,500 employees last year.
Bobby Hitt, a spokesman for the Spartanburg facility, said the buyout option was being offered here simply because it was offered to production workers at every other BMW facility in the world. Conversely, if it wasn't offered here, employees would ask, "Why not?"
Hitt declined to discuss specifics of the packages.
"Everyone here knows the terms," he said. "There's a limit on how many packages can be offered. If more people do it than that, there's a process for determining who gets it. It's a voluntary program. No one is being asked to do this. If they want to do this, they can. If not, they can throw the letter in the trash."
Meanwhile, the Spartanburg facility is still on track to bring a 1.2 million-square-foot assembly plant online next year that will be the birthplace of the next generation of the X3 sports activity vehicle -- currently produced in Austria.
That project -- which also includes additions to the site's paint shop -- represents a $750 million investment and was originally announced as adding 500 jobs here.
When asked if those numbers were still solid, Hitt said, "The market tells us how many cars to build. We will hire the necessary people to build those cars."
He added that the new facility "speaks pretty well of our commitment to the area."
The BMW plant in Spartanburg houses about 5,000 employees -- mostly full-time, though the company does rely on a significant number of contract employees. A number of those contracts were not renewed at the end of 2008.
As of October 2008, BMW Manufacturing employed about 5,400 people at its Spartanburg facility -- about 4,500 permanent employees and 900 contract workers. At least 500 contract workers were expected to be let go. Hitt would not describe the makeup of the current work force.
Production associates -- basically, line workers -- do have a set time frame in which to make a decision about the buyout. Hitt would not say what the cutoff date was. Of the current workers in Spartanburg, there are about 3,000 production associates.
"They have all that information," Hitt said. "They can elect to do this or not. There's no pressure."
Baby boomers curb free-spending habits | View Web
07/28/2009
MSNBC.com
Mercedes is the quintessential boomer brand. Drive down an American highway, and odds are good that the person piloting the Benz in the next lane was born between 1946 and 1962. And Mercedes-Benz has prospered right along with America's huge postwar generation. Back in 1986, when the first baby boomers turned 40, Mercedes sold 99,000 cars in the U.S. In 2006, when those boomers hit 60, the automaker moved almost 250,000 vehicles, a fifth of its global total.
This year, Mercedes will sell a third fewer cars in America. In Montvale, N.J., Kristi Steinberg, who runs Benz's North American market research operation, has a nagging fear: that sales won't recover for a long time because boomers, history's wealthiest generation, are tapped out. "I don't know if anyone knows yet if this is a blip," she says, "or a defining moment like the Great Depression."
Executives such as Steinberg always knew boomers would curb their free-spending ways as they approached retirement. But not in their most nightmarish imaginings could they have predicted that an economic maelstrom would cripple the customers they have courted and counted on for 30 years.
Faith in rising markets
When 79 million people — nearly a third of Americans — start spending less and saving more, you know it won't be pretty. According to consulting firm McKinsey, boomers' conversion to thrift could stifle the economy's hoped-for rebound and knock U.S. growth down from the 3.2 percent it has averaged since 1965 to 2.4 percent over the next 30 years. "We would have gotten here in 5 or 10 years as boomers retire, but we pushed it up," says Michael Sinoway, managing director of consulting firm AlixPartners. "Now [companies] are scared things won't come back." And that's why everyone from Mercedes to Nordstrom to designer Vera Wang are scrambling to remake themselves for the Incredible Shrinking Boomer Economy.
Not so long ago, boomers were never going to die. Filled with a self-confidence born of unprecedented prosperity, many thought rising markets would assure their future. If the economy faltered, well, it would rebound more strongly than ever, as it had so many times before. And so boomers spent — and borrowed — as if there were no tomorrow.
Meet Tim Woodhouse, 56. He owns Hood Sailmakers in Middletown, R.I., a business that helped finance a plush life. Woodhouse owns a boat, five Ducati motorcycles, and every few years treated himself to a new Porsche 911. He figured he'd retire when he felt like it. Then the markets crashed, the economy tanked, and suddenly Woodhouse felt a lot poorer. In April, with business slowing and his real estate holdings leaking value, Woodhouse hit the brakes. "I was scared," he says. "My net worth took a real hit." Woodhouse sold the Porsche and bought a Mini Cooper. The boat spends more time tied up these days than out on the water. He and his wife dine out less often, and they don't entertain at home much either.
Woodhouse and millions of boomers like him are doing what people normally do when they near retirement: They're living more frugally. Companies have long factored in this actuarial reality, gradually tweaking their products and marketing to appeal to the next generation. With boomers, however, many companies became complacent. It wasn't that they ignored younger consumers but that they counted on boomers to keep spending longer. And why not? Until recently boomers typically reached their spending peak at age 54, according to McKinsey. Contrast that with the previous generation — a thriftier bunch whose consumption typically peaked at 47.
Now many companies are scrambling to appeal to Generations X and Y. You can already see this thrust in the stores. Clothing designer Vera Wang is selling a casual line called Lavender aimed at twenty- and thirtysomethings. It's fashion, but not the pricey garments the company typically has sold. Meanwhile, says Wang, her namesake brand needs to get a lot less expensive. In one instance, Wang made a high-end dress using fabric that costs $5 a yard instead of $12 but used the fabric in several layers to give the garment a richer look. As a boomer herself, Wang, 60, feels her generation's pain. "You don't have 30 years to reinvent yourself," she says.
Even as Mercedes continues to target boomers, it has quietly recruited 500 people aged 20 to 32 for a focus group it calls Generation Benz. Mercedes researchers are seeking their views on the economy, car ads, model designs, and more. The automaker sent 20 Generation Benzers into dealerships wearing flip-flops and other casual attire to see how much attention they received. Four of the 20 were ignored. The results, says Steve Cannon, vice-president for marketing, served as a wake-up call to Mercedes dealers "that we have to start paying a lot more attention to tomorrow's customers, especially if tomorrow is coming faster than we thought."
Value shopping
Can younger consumers pick up the slack? Consider the demographics. Generation X, Americans born between 1964 and 1980, is generally estimated to be about two-thirds the size of the boomer cohort. And with boomers working longer, especially since the crash wiped out many retirement funds, it may take longer for Xers to move into their prime earning (and spending) years. And what about Generation Y, the 81 million-strong group born between 1981 and 1994? Right now, 14 percent are unemployed and will have their own hole to claw out of when the economy revives, according to Edward F. Stuart, who teaches economics at Northeastern Illinois University. In other words, companies will need boomers for years to come.
The trick will be finding a way to fulfill the needs and wants of a generation that is used to being catered to — but is now on a budget. Timothy Malefyt, an anthropologist who studies consumer trends for the ad agency BBDO New York, argues that boomers, having ridden a wave of technological change, are highly adaptable and well versed in problem-solving. (Or at least they see themselves as such.) Already, he says, they are making a virtue of value shopping, once viewed by this group as hopelessly déclassé. For many boomers it's no longer about keeping up with the Joneses, it's about outthinking them. "If you make boomers feel they've failed, you'll lose them," Malefyt says. "They want to feel they've outsmarted the system or their circumstances."
That's why some companies are coalescing around "cheap chic," a marketing conceit that has become synonymous with Target but also has been tried by the likes of JetBlue, Ikea, and Mini. The latter is owned by BMW, another classic boomer brand. BMW didn't plan it this way, but the Mini is one solution for a company whose cars are becoming too pricey for many boomers. A fully loaded BMW 3 Series costs $40,000 plus change; a comparably equipped Mini: $25,000. The Mini, while a feat of engineering and retro style, can't compete with a BMW, which the company bills as "the ultimate driving machine." But the Mini possesses cheap chic in spades. In recent months, says BMW, fiftysomethings have been trading in their Bimmers and other luxury brands for Minis.
Pampering on a budget
Starwood Hotels & Resorts Worldwide has embarked on a crash course in cheap chic — or what it prefers to call "style at a steal." The chain has long appealed to the boomer yen for luxury and pampering. Its high-end W, Sheraton, and Westin hotels offer spacious rooms, well-staffed front desks, valets, and extensive room service menus. So the polyester sheets and small-bar soap that typify the value hotel experience wouldn't do. Starwood's 40-year-old chief of specialty brands, Brian McGuinness, also knew boomers grew up challenging convention and still like to feel that they're on the cutting edge. But they also demand creature comforts. "They once drove Beetles and ended up in Bimmers," McGuinness says. "We wanted to strike that balance." Plus, don't tell them, but boomers are getting older and presumably creakier. So edgy can't equal bare-bones minimalism.
After six months of research and brainstorming, Starwood came up with two cheap chic hotel chains: Aloft, named to echo the "urban cool" of loft apartments, and Element, a low-cost option aimed at people who prefer suites with every "element" of their daily lives — including spa-like bathrooms. Early last year the team mocked up an Aloft prototype and invited some boomer-age guests to stay. The mock hotel had an aggressive neon color palette, piped-in scents reminiscent of an Indian spice market, and garage band tunes on the sound system. To help bring the room rate down to the $150-to-$170 range, they cut out full-service restaurants, room service, and valets. The test subjects were fine with parking their own cars, and most said they'd rather explore and find their own restaurants than eat in their rooms. The garage music? Not so much. Starwood replaced it with contemporary rock and international music. The neon palette gave way to muted tones, and a mild citrus replaced the spice.
Starwood has opened 25 Aloft hotels so far, and McGuinness says occupancy rates meet or exceed the average in most metro markets. Starwood won't say if the downturn prompted it to accelerate the rollout of its new hotel brands. But the company is opening two Aloft hotels each month, the fastest rate the industry has seen. David Loeb, a Robert W. Baird analyst who has been covering the hotel industry for years, says Aloft's ambience may be too hip and jarring for fiftysomethings. But he says if the chain finds the right balance, it might appeal to boomers and Generations X and Y. Starwood is advertising the new chains heavily online. "Boomers and Gen Y congregate in the same places on the Web," McGuinness says.
Starwood started changing its approach to boomers before the economy went south. Other companies are adjusting on the fly. OSI Restaurant Partners has watched its eateries lose boomer customers, whether middle-class types who frequented the company's Outback Steakhouse and Bonefish Grill restaurants or wealthier people who once dined on filet mignon at the more upscale Fleming's Prime Steakhouse & Wine Bar. OSI's chief operating officer, Paul E. Avery, reduced menu prices and offered smaller cuts of beef at Outback to maintain margins before retiring in early July. The company has gone on an ad blitz pushing the more modest portions for $9.99. This is obviously a tricky balancing act at Outback, where a big slab of meat was the chain's main attraction.
The good news, says Chief Branding Officer Jody Bilney, is that people who order the less expensive entrées typically end up buying dessert or more alcohol, so the average ticket is still about $19 per person. At Fleming's, OSI is offering more wines under $10 a glass and a fixed-price menu that caps everything but drinks as low as $36 a person. Before the downturn diners typically spent $60 apiece. OSI is responding to a recession but is prepared to run its business this way if boomers remain frugal over the long run. "If anyone tells you they know that the impact of the last 12 months is permanent or temporary, they're blowing smoke," Bilney says.
Nordstrom isn't waiting to find out. The purveyor of affordable fashion believes that its customers — many of them boomers — will be under pressure for years to come. So even as it starts building fewer full-price department stores, Nordstrom has tripled the pace for opening lower-priced Nordstrom Rack stores. It will open 13 in 2009 and nine next year. Rack stores offer Nordstrom's usual name brands but for 30 percent to 70 percent less than they fetch in the main stores. Nordstrom figures boomers still want fashion, but at a discount.
What many companies are attempting to do now has worked in the past. After the crash of 1929, few people could afford a Cadillac, so General Motors created a budget model to keep its luxury sales going. The 1934 LaSalle had art deco touches, including chrome portholes along the hood. To cut costs, GM stuck the car on an Oldsmobile chassis and gave it a smaller engine. The LaSalle's cheap chic was a hit with Depression-era drivers, and when the economy recovered, Cadillac again became a totem of material success. Of course, America was about to experience the greatest boom in history. That's unlikely to happen this time.
Honda has announced earnings for the quarter ending June 30, and the results were more than a little surprising. While analysts expected a loss of 106 yen ($1.1 billion US), Honda instead turned an operating profit of 25.2 billion Yen ($267 million US).
Honda's surprise profit comes in part because of the success of the hybrid Insight in Japan, where the suddenly strong Yen doesn't run into currency exchange issues. Honda is forecasting continuing currency issues, as the automaker sees the yen gaining still more ground verses the US dollar later in 2009. The hot-selling Fit and always strong Accord are also helping the bottom line, helping stabilize sales while companies like Toyota continue to see theirs sagging.
Automotive News is reporting that Honda's Q1 earnings were strong enough for the conservative automaker to raise its 2009 earnings forecast from 40 billion yen ($420 million US) to 70 billion yen ($737 million US). Honda has reportedly also raised its vehicle sales forecast by 85,000 units, to 3.295 million vehicles for 2009.
Just in time for the weekend, rumor has it that General Motors and GMAC plan to crank up the leasing machine again on August 1. When GM stopped the practice last year, leases made up 20% of its business, but was costing the General money hand-over-fist. Dealers have continued to lease on their own, through outside banks, but the volume of cars leaving the lot as lease deals is "negligible".
The most either company would say on-the-record is that they are looking at ways to get back into it. GM is said to have spoken to several banks – not just GMAC – to gain a solid position. GMAC, now a bank holding company, is also one of Chrysler's partners; with credit slowly opening up and resale values slowly rising, it's not a bad time for the company to take steps toward leasing again.
For the moment, the only car mentioned for lease availability is the Cadillac CTS, as the luxury segment is traditionally the most lease-heavy.
FORD'S NEW FUEL-EFFICIENT VEHICLES PLUS "CASH FOR CLUNKERS" PROGRAM DRIVE SALES INCREASE IN JULY
Ford, Lincoln and Mercury retail sales increased 9 percent versus a year ago; total sales (including fleet) were 158,838, up 2 percent versus a year ago
Ford is first among major manufacturers to report sales increase in 2009; year-over-year total sales gain is the first for Ford since November 2007
Ford's fuel-efficient vehicles pace July sales results – Ford Fusion up 66 percent, Mercury Milan up 60 percent, Ford Escape up 94 percent, Mercury Mariner up 71 percent, Ford Focus up 44 percent and Ford Ranger up 65 percent; Ford hybrid sales up 323 percent
Ford was first to market with "Cash for Clunkers" website; more than 1 million consumers guided by www.LetFordRecycleYourRide.com
First 2010 model Ford Taurus and Transit Connect models were delivered to U.S. customers in July
Download Full Sales Release DEARBORN, Mich., Aug. 3, 2009 – Customer demand for Ford's fuel-efficient vehicles coupled with the U.S. government's Car Allowance Rebate System ("Cash for Clunkers") enabled Ford to post the first sales increase of any major manufacturer in 2009. Ford, Lincoln and Mercury dealers reported 118,197 retail sales in July, up 9 percent versus a year ago. Total sales (including fleet customer deliveries) were 158,838, up 2 percent versus last year. "We had another strong month in progress before the 'Cash for Clunkers' program started," said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. "Our products, our dealers and our advance preparation enabled us to leverage the program and drive traffic and sales to another level," he added. "In addition, we achieved a sales increase even though we decreased incentive spending in an increasingly competitive environment."
July Sales Highlights
Ford Fusion sales totaled 17,610, a July record and up 66 percent versus a year ago, and Mercury Milan sales were up 60 percent. The 2010 model Fusion and Milan and their hybrid versions are the most fuel-efficient mid-size sedans in America.
Ford Escape sales totaled 20,241, a July record and up 94 percent versus a year ago, and Mercury Mariner sales were up 71 percent. The 2009 model Escape Hybrid and Mariner Hybrid are the most fuel-efficient utility vehicles in America.
Ford Focus sales totaled 21,830, up 44 percent versus a year ago. The Focus is among the most fuel-efficient compact cars in America with an EPA highway rating of 35 mpg.
Ford Ranger sales totaled 7,695, up 65 percent versus a year ago. The Ranger is the most fuel-efficient compact pickup in America.
Ford Flex sales totaled 3,631, up 65 percent versus a year ago. The Flex is among the most fuel-efficient mid-size crossover utilities in America.
Ford's hybrid vehicles (Fusion, Milan, Escape and Mariner) posted combined sales of 5,353, a record for any month and up 323 percent versus a year ago.
"We have the freshest line of new products in the industry," said Czubay. "We're really encouraged by the growing number of consumers who are considering Ford for their next vehicle." Internal and external studies show a positive trend in the percentage of consumers with favorable opinions about Ford, and growing numbers of consumers who are willing to consider purchasing a Ford vehicle, thanks to improved fuel economy, smart technology and higher residual values.
More new products are on the way. The first new 2010 Ford Taurus sedans were delivered at the end of July, as well as the first Transit Connects.
The all-new Taurus is the smartest full-size sedan in America. The Transit Connect, a small, fuel-efficient purpose-built van, is the first ONE Ford global vehicle to be sold in the United States. This summer, Ford also will debut its EcoBoost engine technology in the Taurus SHO, Lincoln MKS, Ford Flex and all-new Lincoln MKT crossover vehicle. In these vehicles, EcoBoost provides the fuel economy of a six-cylinder engine and the performance of a V-8.
Toyota Loses $819 Million in Quarter; Better Than Analysts' Estimates
August 04, 2009 Toyota reported Tuesday it lost 77.8 billion yen -- the equivalent of $819 million (U.S.) in the most recent quarter. The loss was smaller than analysts had forecasted, suggesting the worst is over and that Toyota's full-year losses will be less than previously expected.
Toyota said it now expects to lose 450 billion yen ($4.7 billion) for the fiscal year that ends March 31, 2010. Previously, Toyota expected to lose 550 billion yen ($5.8 billion) for the year.
In a conference call with media and analysts Wednesday morning, Toyota Managing Officer Takuo Sasaki noted a dramatic drop in vehicle sales volume. "However, the introduction of demand stimulating measures by various governments, including Japan, has begun to trigger a revival in some regions," he said.
He said Toyota now expects a sales increase in Japan for the first time in five years, thanks to a government incentives for fuel-efficient vehicles. As a result, Toyota boosted its forecast for global sales to 6.6 million, up from 6.5 million forecasted in May. The added 100,000 units will come from Japan and be largely the Toyota Prius and Lexus HS250h hybrids. Despite the increased forecast, Toyota sales this year will remain below last year's. Toyota sold 7.57 million vehicles in its last fiscal year, which ended in March.
In the U.S., Sasaki said the July sales spike in the U.S., reported Monday, is good news and could push annual sales for 2009 closer to 10 million units than the 9.5 million, the bottom of the range Toyota had expected. He predicted the new Toyota Prius and Lexus hybrids will help the automaker in the U.S. "But there are still significant risk factors in the U.S., mainly rising unemployment," he said.
In addition to sales increases, Sasaki said Toyota's cost-cutting measures are bearing fruit -- even more than expected when emergency efforts began earlier this year. Akio Toyoda, who just took over as chief executive in June, has vowed to return the group to profitability in 2010-2011. Toyota has cut production, frozen new investments -- including mothballing a new assembly in Mississippi - and slashed thousands of contract jobs in Japan.
Sasaki said production cuts got Toyota close to optimal inventory levels by end of June so no further production cuts will be required. In fact, Sasaki said Toyota will steadily ramp up production.
Indeed, Toyota's inventories in the U.S. are low, with most vehicles at 30- to 40-day inventory levels, well below the 60-day optimum. "We have to gradually increase the inventory levels (in the U.S.)," he said.
Toyota's 77.8-billion loss in its first quarter compares with a net profit of 353.7 billion yen in the first quarter of last year. Still, most analysts had predicted a loss of 184 billion yen. In this first quarter, Toyota sold 1.4 million vehicles, down 785,000 vehicles from a year ago.
Despite continuation of cost cutting, however, Sasaki said Toyota will not reduce its capital expenditures and research and development spending, as it focuses on developing vehicles more in line with customer demand, including more environmentally friendly ones.-- By Michelle Krebs
Replacing Turbo Lag with Turbo Brag: The BMW X6 M | View Web
08/03/2009
Automobile Magazine - Online
BMW's M performance division has devised an exhaust manifold so clever that they've patented it. The manifold helps to reduce turbo lag, and here's how it works.
BMW's N63 engine--the 400-hp 4.4-liter twin-turbo V-8 used in the X6 and 750i--suffers from turbo lag like every other turbocharged engine in the world. Compared to other turbo engines, that lag is minimal. Compared to normally aspirated engines, though, the engine's response to the accelerator pedal is less than immediate.
Instant response has long been one of the trademarks of BMW M engines--they've historically used individual throttle bodies to minimize the delay between stepping on the gas and waking the beast. So when it came time for M to design its first turbocharged production engine, the S63, BMW's performance division set about reducing response times to levels we've never seen in turbocharged engines.
One step in accomplishing this goal was achieved by devising a turbo-lag-reducing exhaust manifold so clever that BMW has patented it. It works by ensuring that each turbo is given a burst of exhaust gas at even intervals--something that's normally not possible on a twin-turbo V-8 engine. Here's why, and a description of how BMW's manifold works.
First of all, the S63 shares the N63's reversed cylinder head orientation--both engines have their exhaust ports vent to the inside of the Vee rather than in the traditional direction, which is out to the side of the engine.
All V-8s with a cross-plane (90 degrees between throws) crankshaft have a firing order that results in two cylinders on the same bank firing in succession once every revolution or so, rather than having the power strokes equally spaced between the two banks. BMW's V-8 firing firing order is 1-5-4-8-6-3-7-2, where cylinders 1-4 are on the left side of the engine as viewed from the front of the car, and 5-8 are on the right. Shown in "L" for the left bank (cylinders 1-4) and "R" for the right bank (cylinders 5-8), the firing order looks like this:
L-R-L-R-R-L-R-L
The uneven firing (the double-Rs in the middle and the double-Ls at the end as the cycle repeats) are responsible for the burbly exhaust note that we hear from all cross-plane V-8s.
[In contrast, flat-plane V-8s, like the ones used in Ferraris, have crank throws 180' apart from another. They fire evenly between the banks, or L-R-L-R-L-R-L-R, so they don't burble. But they vviibbrraattee.]
On 'conventional' twin-turbo V-8s, including the non-M N63, each turbo is fed with the exhaust gasses from one bank of cylinders. Using BMW's firing order, let's look at what the N63's left bank turbo experiences as a function of crankshaft rotation:
Notice how the turbo experiences the following pulse pattern:
1 0 1 (0 0) 1 0 (1 1) 0...
I put the uneven parts in parentheses for emphasis--the 0 0 interval makes that turbo skip two strokes before getting another pulse, and the 1 1 interval gives the turbo two pulses in a row. These uneven impulses make it more difficult for a turbo to achieve and sustain its operating speed.
As you can see from the pictures in the gallery, BMW has color-coded a cutaway of the exhaust manifold. The following describes where the runners are connected:
Color From To
Green: Cylinders 1 and 7 to turbo L scroll 1
Red: Cylinders 4 and 6 to turbo L scroll 2
Yellow: Cylinders 5 and 2 to turbo R scroll 1
Blue: Cylinders 3 and 8 to turbo R scroll 2
So if we plug in the firing order, we can map out which turbo experiences what, when:
Crank Cyl Bank Turbo Scroll
0' 1 L 1 1
90' 5 R 2 1
180' 4 L 1 2
270' 8 R 2 2
360' 6 R 1 2
470' 3 L 2 2
580' 7 R 1 1
690' 2 L 2 1
0/720 1 L 1 1
As you can see, just like a regular twin-turbo V-8, there is an exhaust pulse going to one of the turbos every 90 degrees of crankshaft rotation. However with this manifold, each turbo gets a pulse every 180 degrees rather than at the uneven intervals.
If you look closely at which scroll receives the exhaust pulse when, you'll see that each turbo is fed by the same scroll twice in a row. That design likely maximizes any positive interference effect between the pulses.
And there you have it; a stroke of genius that helps the first turbo M engine retain M's trademark responsiveness. Not compared to its normally aspirated engines, of course, but compared to all other turbo engines. For those who love the power of turbos but loathe the lag (and that would be me) this small change makes the future seem a whole lot brighter. Because like it or not, we're going to see a lot more turbos in the future.
Bumpers on 4 of 6 midsize sedans improve;
none earns good rating in low-speed tests
ARLINGTON, VA — Bumpers on 2009 models of the Honda Accord, Hyundai Sonata, Mazda 6, and Nissan Maxima performed better than their 2007 predecessors in low-speed crash tests conducted by the Insurance Institute for Highway Safety. Bumpers on the 2009 Chevrolet Malibu and 2010 Ford Fusion did worse than earlier models. None of the 6 popular midsize sedans earns the top rating of good in a recent series of tests designed to assess and compare how well bumpers resist damage in everyday fender-benders. The Mazda 6 improves to acceptable from marginal, with an average repair cost of less than $900 after 4 tests at 3 and 6 mph. The Accord and Sonata improve to marginal from poor. The Fusion slips to poor from marginal, and the Maxima and Malibu remain poor.
"Consumers buy midsize cars for practical reasons. There's nothing practical about a $1,000-plus repair bill after a minor bump in commuter traffic," says Joe Nolan, Institute senior vice president.
This is the second group of vehicles the Institute has evaluated under a new bumper ratings protocol based on repair costs averaged and weighted to reflect real-world damage patterns and insurance claims frequency (see table below). The Institute rates bumpers good, acceptable, marginal, or poor based on performance in 4 tests — front and rear full-width impacts at 6 mph and front and rear corner impacts at 3 mph. Each vehicle is run into a steel barrier designed to mimic the design of a car bumper, with the barrier's plastic absorber and flexible cover simulating typical cars' energy absorbers and plastic bumper covers. These tests are designed to drive bumper improvements that lead to better damage resistance in a range of real-world crashes.
"Although midsize car bumpers still allow way too much damage in minor impacts, it's encouraging that some manufacturers are designing better ones," Nolan says. He points out that the front and rear bumpers of the 2009 Mazda 6 are wider, taller, and higher off the ground than the 2007 model. The Mazda 6 is only the fourth car tested under the new protocol to earn an acceptable rating for its bumpers. The others are the Ford Focus, Scion xB, and Smart Fortwo.
"Mazda is trying to protect buyers' pocketbooks while many other carmakers are letting them take a big hit in low-speed crashes," Nolan says.
Mazda, Honda, Nissan, and Hyundai improved the bumpers on their 2009 midsize cars so the bumpers would better resist front underride, which exacerbates collision damage. Bumpers have to be tall enough to engage, and to stay engaged, with the bumpers on other vehicles in collisions, even during emergency braking, or they'll bypass each other when the vehicles collide. Preventing override and underride means crash energy is absorbed by bumpers instead of pricey vehicle parts such as hoods, grilles, and fenders, or safety gear such as headlights and taillights.
The 2009 Accord, for example, has sharply lower repair costs in the full front and full rear tests, compared with the 2007 model, because its bumpers are higher than the previous version, plus the front bumper's reinforcement bar now is bolstered with metal pieces that extend upward from the bar to prevent underride. The changes helped the Accord earn a marginal rating instead of poor, but another change held back the car's overall performance. The 2009 Accord's bumpers aren't as wide as the 2007 model's, resulting in higher repair costs in both the front and rear corner tests. Weaker bumpers mean bigger repair bills: Ford and General Motors made design changes that increased repair costs for the 2010 Fusion and 2009 Malibu over repair estimates for 2007 models.
"Ford fit the Fusion's front and rear with weaker bumper beams, and this had a big effect on the test performance," Nolan explains. The difference is easy to see in the 6 mph full rear test, which simulates a common parking mishap like backing into another vehicle. The Fusion's bumper buckled, which caused it to underride the test barrier, resulting in twice as much damage as the 2007 model in the rear test. In the full front test, the Fusion had $2,529 in damage, more than any other vehicle.
GM raised the Malibu's rear bumper so it's higher than on the earlier model, but it's still the lowest among recently tested bumpers. In the full rear test, the bumper underrode the barrier, resulting in almost $3,500 in damage, the highest among the midsize cars evaluated. GM lowered the front bumper, which didn't help in the full front test. Damage totaled $2,092, partly because the Malibu's front grille overlays the center of the bumper. The result is that the grille, Chevy emblem, and decorative chromed plastic trim get hit before the bumper does in this test.
"Essentially you have to go through them to get to the bumper," Nolan says. "Replacing just the front grille and emblem cost more than $625."
Ford and GM, along with other automakers who sell the same vehicles in both the US and Canadian markets, no longer have to meet a tougher Canadian bumper standard. The Canadian government last year weakened bumper rules to match US regulations, which require only minimal protection. The previous Canadian standard required bumpers to prevent damage to vehicle safety equipment such as headlights in 5 mph impacts. Under the new rules, full front and rear tests are run at 2.5 mph and corner tests are run at 1.5 mph. How 10 other sedans rate: The designs of 10 other midsize cars haven't changed since their bumpers last were tested in the 2007 model year (see full bumper ratings). Performance in those tests earns the Mitsubishi Galant and Toyota Camry marginal ratings. The Chrysler Sebring, Nissan Altima, Pontiac G6, Saturn AURA, Subaru Legacy, Volkswagen Jetta, Volkswagen Passat, and Volvo S40 earn poor ratings.
Besides the amount of damage sustained in a low-speed impact, repair costs are influenced by both the price of replacement parts and the complexity of repairs. The Volvo S40's poor rating reflects recent increases in parts and labor costs. At $335 the S40's rear reinforcement bar has nearly tripled in price since 2006, while the front bar now sells for $311, up from $195 in 2006.
After nine straight years as America's best-selling luxury brand, Lexus slipped behind BMW in March. Yoshi Inaba, the new president of Toyota Motor Sales U.S.A., says giving a boost to the 20-year-old brand is one of his top priorities.
New products will be key. One issue is Lexus' heavy reliance on one model: the RX crossover. Another problem: The median age of buyers is higher for Lexus than for chief rivals BMW and Mercedes.
For the 2010 model year, Lexus introduced a hardtop convertible and a dedicated hybrid. General Manager Mark Templin does not rule out a new small sedan to counter the BMW 1 series and Audi A3.
"We aren't attracting enough 25- to 49-year-olds," Templin says. "Our goal is bring out product to reach those buyers."
Here are Lexus' product plans for the 2010-12 model years.
IC: A BMW 1-series competitor is being considered for the United States and could arrive as early as the 2012 model year. Sedan, coupe, convertible, crossover and hybrid versions are on the table.
IS: Lexus expanded the line in May with the introduction of the 2010 IS C hardtop convertible. The IS line is expected to be redesigned for the 2013 model year.
HS: The sedan is the first dedicated hybrid model offered by a luxury brand and is the first Lexus model to use a four-cylinder engine. Fuel economy is 35 mpg in the city and 34 on the highway. Sales began this month.
ES: The midrange sedan is due to be redesigned for the 2012 model year. A hybrid version will be added.
GS: A redesigned version will arrive as a 2011 model. It is unclear whether the GS-F performance sedan planned for the 2012 model year will survive in the plan. The issues are fuel prices and Toyota's budget cuts.
LS: The range-topping sedan is due to be redesigned for the 2013 model year.
SC: With the arrival of the IS convertible, sources say the more expensive SC hardtop convertible will be dropped. Lexus sold just 542 SC units through July.
LF-A: The performance car could appear next year as a 2011 model. Initially it was expected that it would be powered by a 500-hp V-10. Now there is talk of a twin-turbo V-8. No word on horsepower.
RX: A redesign of the small crossover debuted in February. The wheelbase for the 2010 RX is an inch longer, and the overall length is stretched 1.6 inches.
GX: This truck-based SUV could migrate to the GS car platform when it is redesigned for the 2010 model year. Seven-passenger seating will be retained.
LX: No major changes are planned through the 2012 model year
Novi -- General Motors Co. dealers who survived the automaker's bankruptcy were told Friday they will have to average higher sales and spend more updating their facilities.
Some will also have to get used to selling smaller, more fuel-efficient and better-equipped vehicles than during the industry's SUV-crazy heyday.
GM executives met with 430 dealers from around the Midwest at the Rock Financial Showplace as part of a nine-city tour to discuss the future of the automaker's four core brands: Chevrolet, Cadillac, Buick and GMC.
The dealer tour began as GM said it expects to see U.S. auto sales increase 15 percent next year to about 12.1 million vehicles because of renewed consumer confidence in response to government stimulus programs.
Speaking on the sidelines of the dealer meeting, Brent Dewar, Chevrolet vice president, told reporters the company expects "to see a modest recovery in 2010 and a better recovery in 2011."
GM is selling or phasing out the Saab, Saturn, Hummer and Pontiac brands as it restructures, and dropping from 78 nameplates to 34. At the same time, it will try to expand Chevy's global reach.
The company also is instituting tougher, costlier standards on remaining dealers, some of whom were anxious Friday to learn about GM's post-bankruptcy business plans.
GM also said it named Julie Heisel, previously director of business planning for sales and service, to the new position of director of customer life cycle management. It will be her job to reach out to the 3 million customers who bought vehicles from discontinued GM brands or nameplates, or from dealers whose franchise agreements were not renewed, and try to keep them in the GM fold, said Susan Docherty, general manager of Buick and GMC.
Strong sales reported
Docherty said Pontiac sales have been consistently strong in recent months, in part because of the "cash for clunkers" program, and the brand will run out of vehicles by the end of the year.
When GM decided to kill Pontiac, executives expected to have cars available until the third quarter of 2010, Docherty said. By next month, however, there will be 15,000 to 16,000 Pontiacs left.
GM is cutting its dealership ranks from about 6,000 today to as few as 3,600 by late next year, which will result in significant savings for the new GM. Remaining dealers were offered new franchise agreements, and more than 99 percent signed, agreeing to accept new performance standards for sales and customer service and to make facility improvements, in some cases.
But several dealers who attended Friday's meeting said details have been lacking. Others want more direction about operating changes and sales expectations under the new GM.
The meeting drew dealers from Michigan, Ohio, Illinois, Indiana, Minnesota, Iowa, Wisconsin and North and South Dakota.
"We're kind of in the dark," said Leaird Cameron, general manager of Cliff Anschuetz Chevrolet Cadillac in Alpena.
Additional meetings with dealers are scheduled for October, during which Cameron expects to hear more about new products.
"I'm happy with the lineup, but you always want to see some new products," he said.
Dewar said Chevrolet will introduce more models in the U.S. market "that will allow us to be more relevant in the youth and eco markets."
Two key models, the Chevrolet Cruze compact car and Volt extended-range electric vehicle, will be introduced next year.
Dewar impressed upon dealers the importance of selling smaller vehicles with premium interiors and options, which typically yield higher transaction prices and profits.
Smaller vehicles touted
"Small doesn't mean less," quality or content, Dewar said. George Fowler, general manager of Superior Pontiac-Buick-GMC in Dearborn, wanted to learn how GM will replace products once Pontiac is eliminated next year. The brand accounts for about 60 percent of Fowler's sales volume.
Last week, GM killed one new Buick vehicle dealers expected would help make up for the loss of the Pontiac brand.
The decision to ax the compact crossover, including a plug-in hybrid version, came days after it was panned by groups essential to the automaker's success.
"Buick has promised it will be coming out with new models, but the big question we want answered is, how are Buick-Pontiac-GMC dealers going to survive until they get the extra Buicks to us?" Fowler said. "If 60 percent of our sales volume is going away, now what?"
Dealers say cash for clunkers sparked a positive shift in consumer attitudes that will lift new-car sales in the months ahead, especially if economists are right about a handful of positive indicators.
But the next 60 days will be tough: Dealers have few cars and little cash, hampered by slow government reimbursement for clunker deals.
"I have maybe six or seven new cars and a dozen trucks," said Ford dealer Dennis Egglefield in Elizabethtown, N.Y., who had to lend his dealership $200,000 to cover the float in clunker payments. "This is normally my peak selling season, but I have almost nothing left on the lot."
Although some clunker sales were pulled forward, "there is still about a 300,000-unit bump upward this year," said Gary Dilts, senior vice president of J.D. Power and Associates. Because of the clunkers program, he has increased his 2009 forecast to 10.3 million from 10 million.
Dilts said dealers reaped another benefit: thinning out aged vehicles, which means lower floorplanning costs until inventories are replenished. "Dealers cleaned out a lot of bad inventory," he said.
Firming up
Some economic indicators favor auto sales growth.
-- Consumer confidence rebounds.
-- Jobless rate stabilizes.
-- Used-car prices rise.
-- Housing market steadies.
Cash crunch
With cash flow a concern, that's a blessing and a curse. R. Scott Brown, principal of Robert Chevrolet in Hicksville, N.Y., said last week that he is down to 40 new vehicles, about a two-weeks supply. "The lack of floorplanning cost is a bonus," he said. "But I'd rather have the 30 vehicles we have in the pipeline from the factory."
About two months ago, traffic picked up and customers became more receptive. "Now I'm short on the new Equinox," Brown said. "Back in January I had 300 cars, and I didn't know what to do. This is a better set of problems."
Everybody had predicted an immediate short-term downturn starting the week after the end of the clunker program, especially with inventory further depleted from already historic lows. Last week, dealers reported little showroom traffic.
"You could have skipped rocks through our parking lot and not hit anybody," Fred Blackwell, a sales manager at Frank Jackson Sandy Springs Ford in Atlanta, said. "All that flurry ended Monday."
Edmunds.com reported rapid drops in consumers' purchase intentions starting Aug. 22, based on vehicle research performed by visitors to its site.
But as dealers rebuild stocks in September and October, economists say, improvements in the U.S. economy will start to boost new-car sales.
Positive signs
Last week, citing a strong rebound of more than six points in the Conference Board Consumer Confidence Index in August over July, Brian Bethune, Global Insight's chief U.S. economist, predicted a "very gradual upward trend over the next several months."
But four economic markers that economists from the National Automobile Dealers Association and Ford Motor Co. last winter called "leading indicators" of an auto sales recovery are all turning positive.
1. Used-car prices are rising.
2. Unemployment rates fell slightly in August.
3. Consumer confidence rose.
4. Home sales are stabilizing.
While tight inventories hamper short-term sales, even that could help the industry because manufacturers don't need big incentives to clear a glut of merchandise, Dilts said.
"Maybe if automakers don't immediately go back to incentives, we can get the industry back on a profitable footing," he said. "We need consumers to look at the features of vehicles, not just the price."
MUNICH -- BMW will debut an eye-catching plug-in diesel-electric hybrid sports car concept at the Frankfurt auto show that the carmaker says combines high performance with high fuel economy.
Called Vision EfficientDynamics, the concept with gullwing doors is powered by a three-cylinder turbodiesel engine and two electric motors. BMW says the concept visualizes "the dynamic performance typical of a BMW against the backdrop of future demands in sustained mobility."
The 356hp concept has fuel consumption of 3.76 liters per 100km (62.6 U.S mpg, 75.1 imperial mpg) and CO2 emissions of 99 grams per kilometer.
It can accelerate from 0 to 100km (0-62mph) in 4.8 seconds and has an electronically limited top speed of 250kph (155 mph).
BMW says the concept aims to offer the performance of a car from its in-house M tuning division with the fuel economy of a small premium car.
The concept can run for about 50km (31 miles) in electric mode. Energy is stored in 98 lithium polymer cells, which take 2.5 hours to fully charge.
It has all-wheel drive with an electric motor at both the front and rear axles.
The sour economy has taken its toll on Acura's product plans.
Besides losing a V-10-powered sports car, Acura put its long-awaited V-8 and rear-wheel-drive vehicle programs on ice. That doesn't mean those programs won't be resurrected when the economy improves. Just don't hold your breath.
Also, some product redesigns may be delayed for a year as part of Honda Motor Co.'s cost cutting.
Here are highlights of Acura's product plans for the 2010-12 model years.
Compact: Acura left the compact segment at the end of the 2006 model year when it dropped the RSX. It was Acura's first step toward a more expensive model line and its goal to become a Tier 1 luxury brand.
But with the appearance of cars such as the BMW 1 series, Volvo C30 and Audi A3, Acura may offer a successor to the RSX to engage younger buyers. The earliest that could happen would be the 2012 model year. The vehicle would be based on the next-generation Honda Civic, arriving for the 2011 model year.
TSX: The 2010 TSX sedan arrived this spring. The car is a rebadged version of the smaller Accord sold in Europe. It is available with a 280-hp, 3.5-liter V-6 mated to a five-speed automatic.
TL: The mid-sized sedan was redesigned last year. New this fall is a version with a six-speed manual transmission, mated to the 305-hp, 3.7-liter V-6 with all-wheel drive.
Coupe: Although the CL coupe was dropped several years ago, Acura is considering re-entering the segment. But no plans exist now.
ZDX: Acura calls the 2010 ZDX a four-door sports coupe. Basically, it is a premium, five-door hatchback with such design highlights as a panoramic glass roof and hidden rear door handles. The leather on the instrument panel and door panels is hand-stitched. The ZDX will be powered by the 3.7-liter V-6.
Acura says the ZDX is the first vehicle styled from start to finish in the new Acura Design Studio in Torrance, Calif. Acura says the car shares no underpinnings with a new Honda model, the 2010 CrossTour. Instead, the ZDX borrows liberally from the Acura MDX.
RL: As recently as last summer, dealers had been promised a V-8-powered, rwd flagship for the 2011 model year. But the program was halted by Honda President Takanobu Ito as part of the company's cost cutting. The rwd program has been pushed back to 2015 at the earliest. Instead, a re-engineering of the existing RL's front-wheel-drive V-6 platform is scheduled for the 2011 model year.
Small sports car: Acura's sports car dreams were dashed in Honda's cost-cutting moves. An Acura version of the next-generation Honda S2000 has been killed.
V-10 sports car: Plans for a V-10-powered, rwd sports car are dead for now. The front-engine performance car was expected to be Acura's answer to the 485-hp Nissan GT-R. Some at Acura say the car was to have been the spiritual successor to the midengine Acura NSX, which was dropped in 2005.
RDX: A freshening of the crossover, including the addition of a fwd model, is planned for the 2010 model year. A redesign is slated for the 2012 model year but could be delayed until 2013.
MDX: A six-speed automatic transmission has been added for the 2010 model year. A redesign of the crossover had been scheduled for the 2012 model year, but expect a delay until 2013.
Terry Aust regularly drives about 250 miles from Louisville, Ky., to Columbus, Ohio. He is a BMW fan, and needs a larger vehicle for his family. His choice: A BMW X5 diesel.
In its gasoline-powered versions, the BMW X5 is a fuel-thirsty beast, rated at just 15 miles per gallon in the city—22 on the highway for the 5.0-liter V-8. With his diesel, Mr. Aust says, "I'm doing 30 on the highway. One of my neighbors has an X5 5-liter. He said, 'What are you getting for mileage?' I said, 'About 30,' and he said, 'I hate you.'"
The brief cash-for-clunkers mania may have given a timely boost to the efforts by German manufacturers to promote European diesel technology as an alternative for energy-conscious American consumers.
Many of the vehicles BMW AG sells in the U.S. were too expensive to qualify for the cash-for-clunkers program. But BMW decided to offer $4,500 off its X5 and 335d diesel models anyway, promoting the discount as an "eco-credit." The result: BMW dealers had just eight days' supply of 335d sedans in stock at the end of August, and only 14 days' worth of diesel X5s. (Mr. Aust bought his X5 before the promotion, but he's good natured about it, saying he did fine on his deal.)
The promotion helped boost total sales of BMW diesels from 305 vehicles in June, before the promotion, to 482 vehicles in August. No, that's not a lot of diesels–just under 2% of BMW's total sales for August. But it was encouraging enough for BMW to continue the diesel "eco-credit" promotion, and allow dealers to use the discount to write orders for diesel models not in stock, says company spokesman Tom Kowaleski. Long term, BMW's goal is to boost diesels to about 10% of its total sales.
Separately, Volkswagen AG is promoting its diesels, including the Jetta and Jetta wagon, on a new Web site, TDI Truth and Dare, http://tdi.vw.com/. The site aggregates positive reviews of diesel VWs, along with videos and product information about the new TDI (turbocharged direct injection) technology.
VW has done relatively little conventional advertising of its latest diesel models, but word is getting around. About 70% of the cash-for-clunkers sales done at VW dealerships were for diesel models, the company says. Company executives expected that about a third of Jetta sedans and about half of Jetta wagon models sold in the U.S. would be diesels. The actual figures have been closer to 40% of the sedans sold with diesel engines, and 80% of the wagons, says VW spokesman Steve Keyes. The Jetta TDI diesel wagon is rated at 30 miles per gallon in the city, and 41 on the highway. Buyers may qualify for a $1,300 tax credit that helps offset the roughly $2,000 price premium compared with the gasoline four-cylinder model.
VW's U.S. sales arm has now called for more diesel Jettas, and is considering offering only the TDI diesel Jetta wagon—dropping the gasoline model, Mr. Keyes says.
BMW, Volkswagen and Daimler AG's Mercedes-Benz brand are fierce rivals that share one common goal: They want—make that need—to convince more Americans to identify diesel passenger cars and SUVs as green transportation, on par with Japanese hybrid models such as the Toyota Prius or Honda Insight.
Modern diesel technology is now clean enough to pass environmental muster in all 50 states, and quiet enough for application in luxury cars. For people who drive long distances on freeways—that is to say, a great many people in the U.S. market—diesel makes more sense than electric vehicles or hybrids, which are at their best when running short hops in congested cities.
But diesel's big moment in the U.S. market never seems to arrive. It almost did when gasoline prices shot up to about $4 a gallon in 2008. Suddenly, the extra $2,000 or more that diesel power plants and the associated hardware added to the price of a car made sense, given the potential fuel-cost savings. Then gas prices collapsed, and diesel prices in many parts of the country drifted higher than the price of regular gasoline. (The two fuels currently are about even, on average, at about $2.64 to $2.65 a gallon, according to the Energy Information Administration's weekly fuel-price report.)
Mercedes-Benz shows the challenges. The brand has been selling diesel cars in the U.S. for years and has a loyal diesel fan base. Still, Mercedes says it sold just 670 diesel models in the U.S. last month.
Selling American consumers on the benefits of paying more up-front for an energy-efficient technology that costs less to operate over the long haul is no easy task. Just consider the ups and downs in demand for the Prius and the resistance to compact fluorescent light bulbs. Diesel technology faces other obstacles, including growing buzz over all or partially electric vehicles.
Cash for clunkers gave European brands another chance to put diesel back in the conversation. VW and BMW's results suggest a potentially meaningful cult following is building, albeit slowly.
NASHVILLE -- Nissan Motor Co. plans to export U.S.-made V-8 engines and engine parts to Japan to install in Infiniti SUVs that will be shipped back to U.S. dealerships.
The automaker determined that the round-trip export-import was quicker and more cost-efficient than tooling up an engine plant in Japan for the SUVs, the company said today in a released statement.
It is the first time Nissan has exported engines from the United States to its automaking operations in Japan.
The 5.6-liter V-8s will go into the full-sized Infiniti QX56, which has been produced in Canton, Miss., until now. But Nissan is moving the low-volume luxury SUV to an assembly plant at Shatai Kyushu, Japan. Ben Poore, vice president of the Infiniti business unit for Nissan North America, says QX56 inventories have been too low for Infiniti dealers this summer, and he has asked the company to increase production of the model.
The model sold 7,657 units in 2008, down from 12,288 in 2007.
Nissan already was producing the V-8 at its engine plant in Decherd, Tenn.
Nissan also will export V-8 engine blocks, heads and crankshafts from Decherd to its Yokohama plant where they will be used for the Japan-built Patrol SUV. The full-sized Patrol sells in markets around the world.
The engine-sourcing plan is something of a reversal of Nissan's North American manufacturing pattern for the past two decades.
Since the 1990s, Nissan has relocated SUV assembly from Japan to the United States, where SUV sales were strongest. It took Nissan longer to shift engine production from Japan to the United States.
But now that the SUV sales have softened in the United States, Nissan has evolved to a slightly different strategy. The company is converting a large part of its light-truck assembly capacity in Mississippi to build light commercial vehicles. Nissan wants to establish its Light Commercial Vehicle operations in the United States beginning next year, starting with a compact commercial van that is similar to Ford Motor Co.'s recently introduced Transit Connect.
As part of that plan, Nissan also is relocating its next-generation Quest minivan from the Mississippi plant to a Japanese assembly plant.
This is never a good sign when production starts to go back to the home company.
Manufacturer: NISSAN NORTH AMERICA, INC. Mfr's Report Date: SEP 10, 2009
NHTSA CAMPAIGN ID Number: 09V358000 N/A
NHTSA Action Number: N/A
Component: SUSPENSION
Potential Number of Units Affected: 26398
Summary:
NISSAN IS RECALLING CERTAIN MODEL YEAR 2009 AND 2010 ALTIMA AND MAXIMA PASSENGER CARS. THE UPPER FRONT STRUT INSULATORS MAY HAVE BEEN MANUFACTURED OUT OF SPECIFICATION RESULTING IN A POTENTIAL FOR THE STRUT INSULATOR TO CRACK.
Consequence:
IF THE STRUT INSULATOR IS CRACKED, THERE IS A POTENTIAL FOR THE STRUT ROD TO COME OUT OF ITS MOUNTING POSITION, WHICH COULD AFFECT VEHICLE STABILITY AND INCREASE THE RISK OF A CRASH.
Remedy:
NISSAN WILL NOTIFY OWNERS AND DEALERS WILL REPLACE BOTH LEFT AND RIGHT SIDE FRONT STRUT INSULATORS FREE OF CHARGE. THE SAFETY RECALL IS EXPECTED TO BEGIN ON OR ABOUT OCTOBER 5, 2009. OWNERS MAY CONTACT NISSAN AT 1-800-NISSAN1 (1-800-647-7261).
Notes:
OWNERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV .
TOYOTA OWNERS ARE CAUTIONED ABOUT FLOOR MATS AND ACCELERATOR PEDAL INTERFERENCE
Toyota to Launch a Safety Recall on Specific Toyota and Lexus Vehicles
The National Highway Traffic Safety Administration today alerted Lexus and Toyota owners about conditions that could cause the accelerator to get stuck open under certain conditions. The agency strongly recommends taking out removable floor mats on the driver's side in certain models and not to replace them with any other mat, either from Toyota or any other brand.
"This is an urgent matter," said U.S. Transportation Secretary Ray LaHood. "For everyone's sake, we strongly urge owners of these vehicles to remove mats or other obstacles that could lead to unintended acceleration."
NHTSA notes that there continue to be reports of accelerator pedal clearance issues which provide the potential for an accelerator pedal to get stuck in the full open position. A stuck accelerator may result in very high vehicle speeds and a crash, which could cause serious injury or death.
NHTSA said that Toyota has announced that it will soon launch a safety recall of various model year vehicles to redress the problem. However the safety agency warned owners to remove all driver-side floor mats from the models listed below immediately as an interim safety measure in advance of the recall.
Toyota and Lexus vehicles affected by this consumer alert are:
2007-2010 Camry
2005-2010 Avalon
2004-2009 Prius
2005-2010 Tacoma
2007-2010 Tundra
2007-2010 ES 350
2006-2010 IS 250 and IS350
In September 2007, Toyota recalled an accessory all-weather floor mat sold for use in some 2007 and 2008 model year Lexus ES 350 and Toyota Camry vehicles because of similar problems.
Today's advisory was precipitated by continued reports of vehicles accelerating rapidly after release of the accelerator pedal. The incidents appear to be related to factors including the use of a variety of unsecured mats, the particular configuration of the accelerator pedals in these vehicles, and the unique steps needed to shut off the engines in some of these vehicles with keyless ignition.
For more information, consumers can contact the National Highway Traffic Safety Administration's Hotline at 888-327-4236 or the Toyota Experience Center at 1-800-331-4331 or the Lexus Customer Assistance Center at 1-800-255-3987. Information from Toyota is also posted at http://www.toyota.com and http://www.lexus.com.
TOYOTAToyota/Lexus Consumer Safety Advisory Potential Floor Mat Interference with Accelerator Pedal
Toyota Motor Sales, USA, Inc. takes public safety very seriously. It believes its vehicles to be among the safest on the road today.
Recent events have prompted Toyota to take a closer look at the potential for an accelerator pedal to get stuck in the full open position due to an unsecured or incompatible driver's floor mat. A stuck open accelerator pedal may result in very high vehicle speeds and make it difficult to stop the vehicle, which could cause a crash, serious injury or death.
Toyota considers this a critical matter and will soon launch a safety campaign on specific Toyota and Lexus vehicles. Throughout the process of developing the details of the action plan, it will advise the National Highway Traffic Safety Administration (NHTSA).
Until Toyota develops a remedy, it is asking owners of specific Toyota and Lexus models to take out any removable driver's floor mat and NOT replace it with any other floor mat. The following models are affected:
• 2007 – 2010 Camry
• 2005 – 2010 Avalon
• 2004 – 2009 Prius
• 2005 – 2010 Tacoma
• 2007 – 2010 Tundra
• 2007 – 2010 ES350
• 2006 – 2010 IS250 and IS350
Should the vehicle continue to accelerate rapidly after releasing the accelerator pedal, this could be an indication of floor mat interference. If this occurs, Toyota recommends the driver take the following actions:
First, if it is possible and safe to do so, pull back the floor mat and dislodge it from the accelerator pedal; then pull over and stop the vehicle.
If the floor mat cannot be dislodged, then firmly and steadily step on the brake pedal with both feet. Do NOT pump the brake pedal repeatedly as this will increase the effort required to slow the vehicle.
Shift the transmission gear selector to the Neutral (N) position and use the brakes to make a controlled stop at the side of the road and turn off the engine.
If unable to put the vehicle in Neutral, turn the engine OFF, or to ACC. This will not cause loss of steering or braking control, but the power assist to these systems will be lost.
-If the vehicle is equipped with an Engine Start/Stop button, firmly and steadily push the button for at least three seconds to turn off the engine. Do NOT tap the Engine Start/Stop button.
-If the vehicle is equipped with a conventional key-ignition, turn the ignition key to the ACC position to turn off the engine. Do NOT remove the key from the ignition as this will lock the steering wheel.
In the event owners choose not to remove their floor mat, Toyota strongly recommends that they ensure that the correct floor mat is being used, that it is properly installed and secured, that it is not flipped over with bottom-side up, and that one floor mat is not stacked over another. Information on proper floor mat installation can be found on http://www.toyota.com and http://www.lexus.com.
Owners with questions or concerns, are asked to please contact the Toyota Customer Experience Center (1 800 331-4331) or Lexus Customer Assistance Center (1 800 255¬3987), or consult the information posted at http://www.toyota.com and http://www.lexus.com.
General Motors and Tengzhong Sign Definitive Agreement For Sale of HUMMER
DETROIT and SICHUAN, Oct. 9, 2009 - General Motors (GM) and Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd (Tengzhong), today announced that the companies have entered into a definitive agreement that will allow Tengzhong to acquire GM's premium all-terrain HUMMER brand.
Under the terms of the definitive agreement, the buyer will acquire the ownership of the HUMMER brand, trademark and tradenames, as well as specific IP license rights necessary for the manufacture of HUMMER vehicles. The buyer will also assume the existing dealer agreements relating to HUMMER's dealership network.
Tengzhong intends to purchase HUMMER through an investment entity, in which it will hold an 80 percent stake. Mr. Suolang Duoji, a private entrepreneur with holdings that include the Hong Kong-listed thenardite producer Lumena, will hold the remaining 20 percent stake. Financial terms of the agreement were not disclosed.
The transaction is subject to customary closing conditions and regulatory approvals and/or review by government agencies in the U.S. and China. The completion of the definitive agreement enables the companies to continue and further the overall regulatory review process.
"HUMMER is a strong global niche brand and this agreement signifies another important milestone in writing the next chapter for both GM and HUMMER," said Fritz Henderson, GM President and CEO. "For HUMMER, the combination of its knowledgeable leadership team, vehicle design expertise and the capital financing of Tengzhong portend a successful future."
Under the agreement, HUMMER would contract vehicle manufacturing, key components and business services from GM during a defined transitional time period. For example, GM's Shreveport assembly plant would continue to contract assemble the H3 and H3T and AM General's Mishawaka assembly plant will continue to assemble the H2. Both facilities will produce the specified vehicles until June 2011, with an optional one year extension until June 2012. The deal is expected to secure more than 3,000 jobs in the U.S. related to the sale and manufacturing of HUMMER vehicles.
HUMMER will continue to be managed by members of its existing leadership team including James Taylor, who will remain in his current role as HUMMER's chief executive officer. Prior to joining HUMMER, Taylor was General Manager of Cadillac where he oversaw a reinvigoration of the brand, leading key innovations in design and technology as well as the development of new models.
"We are fortunate to have a partner who understands and recognizes the importance of continuing investment in HUMMER's heritage as a U.S.-based and branded company with a view toward capitalizing on global opportunities," said Taylor. "Backed by a privately owned and well-capitalized company, we are going to be able to focus on providing customers with more efficient models that deliver HUMMER's promise of authentic, purpose-built design and engineering."
Once the transaction is complete, HUMMER will become the first automaker to offer an alternative fuel powertrain in every model, with the addition of E85 FlexFuel capability in the 2010 H3 and H3T. HUMMER is also in the process of obtaining emissions certification for a diesel H3 that will be introduced in markets outside of North America. The brand's future product development will focus on improving efficiency and performance in current HUMMER models with alternative fuel powertrains, more efficient gas engines, 6-speed transmissions and diesel engines.
"This transaction marks an exciting step for both Tengzhong and HUMMER, as we invest in a business that has significant opportunity in the U.S. and around the globe," said Yang Yi, chief executive officer of Tengzhong. "We are excited about some of the initiatives already underway at HUMMER that we believe our investment will be able to accelerate, particularly related to the creation of the next generation of more fuel-efficient vehicles to meet not only future regulations but also customer expectations."
Credit Suisse is acting as exclusive financial advisor and Shearman & Sterling is acting as international legal counsel to Tengzhong on this transaction. Citi is acting as financial advisor to GM.
For more information on the agreement go towww.transactioninfo.com/tengzhong.
Ford has expanded a recall of faulty cruise control switches to another 4.5 million vehicles. That brings the overall total to 16 million vehicles. The Ford recall is for switches that have been found to overheat which can cause a fire.
Today's recall includes the following Ford models: 1995-2003 Windstars, 2000-2003 Excursion diesels, 1993-1997 and 1999-2003 F-Super Duty diesels, 1992-2003 Econolines, 1995-2002 Explorers and Mercury Mountaineers, 1995-1997 and 2001-2003 Rangers and 1994 F35 motorhomes.
Owners should expect to receive recall letters later this month. Ford Recall Information
PRESS RELEASE Vehicle Make / Model: Model Year(s):
NISSAN / ALTIMA 2009-2010
NISSAN / MAXIMA 2009-2010
Manufacturer: NISSAN NORTH AMERICA, INC. Mfr's Report Date: SEP 10, 2009 NHTSA CAMPAIGN ID Number: 09V358000
Component: SUSPENSION Potential Number of Units Affected: 26398
Summary:
NISSAN IS RECALLING CERTAIN MODEL YEAR 2009 AND 2010 ALTIMA AND MAXIMA PASSENGER CARS. THE UPPER FRONT STRUT INSULATORS MAY HAVE BEEN MANUFACTURED OUT OF SPECIFICATION RESULTING IN A POTENTIAL FOR THE STRUT INSULATOR TO CRACK.
Consequence:
IF THE STRUT INSULATOR IS CRACKED, THERE IS A POTENTIAL FOR THE STRUT ROD TO COME OUT OF ITS MOUNTING POSITION, WHICH COULD AFFECT VEHICLE STABILITY AND INCREASE THE RISK OF A CRASH.
Remedy:
NISSAN WILL NOTIFY OWNERS AND DEALERS WILL REPLACE BOTH LEFT AND RIGHT SIDE FRONT STRUT INSULATORS FREE OF CHARGE. THE SAFETY RECALL IS EXPECTED TO BEGIN DURING OCTOBER 2009. OWNERS MAY CONTACT NISSAN AT 1-800-NISSAN1 (1-800-647-7261).
Notes:
OWNERS MAY ALSO CONTACT THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S VEHICLE SAFETY HOTLINE AT 1-888-327-4236 (TTY 1-800-424-9153), OR GO TO HTTP://WWW.SAFERCAR.GOV .
FORD POSTS THIRD QUARTER 2009 NET INCOME OF $1 BILLION; CASH FLOW TURNS POSITIVE; NORTH AMERICA PROFITABLE+
Reported net income of $997 million, or 29 cents per share, an improvement of $1.2 billion from the third quarter of 2008. Pre-tax operating profit totaled $1.1 billion, an improvement of $3.9 billion from a year ago. It is Ford's first pre-tax operating profit since the first quarter of 2008
Ford North America posted a pre-tax operating profit of $357 million, its first profitable quarter since the first quarter of 2005
Reduced Automotive structural costs by $1 billion, bringing the total reduction to $4.6 billion through the first nine months of 2009, and exceeding the full-year target of $4 billion
A strong product lineup drove market share gains in North America, South America and Europe as well as continued improvements in transaction prices and margins
Ended the quarter with $23.8 billion of Automotive gross cash, up $2.8 billion from the end of second quarter 2009++
Achieved positive Automotive operating-related cash flow of $1.3 billion for the third quarter, a $2.3 billion improvement over the second quarter
Ford Credit reported a pre-tax operating profit of $677 million, a $516 million improvement from a year ago
Ford now expects to be solidly profitable in 2011, excluding special items, with positive operating-related cash flow
U.S. light-vehicle sales -- bolstered by General Motor Co.'s first gain in 21 months -- declined less than 1 percent in October as the industry showed signs of a recovery without the aid of government incentives.
The drop was the smallest this year and made October the year's strongest month aside from August, which received a lift from the federal cash-for-clunkers program. The seasonally adjusted annual sales rate was 11.2 million. The rate had not risen above 9.9 million this year without clunkers help.
“Numbers in that range certainly are not, by historic standards, good numbers. But thinking of where we've come from, it's certainly a positive signal,” said Jeff Schuster, executive director of global forecasting at the market research firm J.D. Power and Associates. “We're through the worst, and we're beginning the slow trek to recovery.”
Gains from most of the biggest automakers propelled sales to within 216 units of October 2008's total.
GM's U.S. sales rose 5 percent last month -- the automaker's first advance since January 2008. Ford Motor Co. grew 3 percent.
Among Asian automakers, Nissan North America climbed 6 percent, Toyota Motor Sales gained less than 1 percent and Hyundai-Kia soared 47 percent. Subaru, Daimler AG, Volkswagen Group and Porsche all were up.
Chrysler Group, meanwhile, plunged 30 percent as it continued to struggle after its bankruptcy. Mazda and American Honda also declined. Suzuki fell 50 percent, while BMW Group trailed year-earlier sales by 19 percent.
The results show automakers benefiting from year-earlier comparisons, after the collapse of Lehman Brothers last October sent the U.S. economy into a deeper tailspin. Industry sales fell 32 percent in October 2008, dragging the seasonally adjusted annual sales rate below 11 million for the first time since 1983.
Industrywide sales remained stuck at 27-year lows this year until the federal government's clunkers incentive pushed demand to rates of 11.1 million units in July and 13.7 million in August. Without the clunkers benefit, September's sales rate dropped to 9.5 million units.
Ford's report of a year-over-year sales gain, its third in the past four months, came a day after the automaker posted a surprise $997 million net profit in the third quarter and its first operating profit in North America since the beginning of 2005.
Sales of the freshly redesigned Ford Taurus sedan more than doubled, while deliveries of the car to individual customers almost tripled from year-earlier levels.
Other automakers
Subaru gained 41 percent in October. Its sales have now risen 13 percent from 2008 levels -- the biggest increase among the few companies that have advanced this year.
Hyundai-Kia is also up for the year, reporting a 5 percent increase.
Volkswagen's results included a 1 percent slip from its Audi brand compared with a year earlier, when the brand set a record for October sales. Audi's Q5 crossover, introduced in February, sold 1,238 units last month or 17 percent of the brand's total.
Last month's GM gain compares with October 2008, when demand fell 45 percent, the most among the top six automakers.
“We're not going to declare victory here today, but we're making progress,” said Susan Docherty, GM's vice president of U.S. sales, on a call with journalists and analysts.
Despite the sales gain and a 0.9 percent year-over-year increase in market share, GM said it had decreased its fourth-quarter North American production forecast by 35,000 units to 620,000. That's 24 percent fewer than the automaker built last year.
The reduction mostly accounts for the loss of Saturn production, said Mike DiGiovanni, GM's executive director of global market and industry analysis. GM had not adjusted its forecast after Penske Automotive Group Inc. in September backed out of its deal to buy the Saturn brand and initially fill it with vehicles GM produced.
GM's “truck month” incentives helped push the company's light-truck sales up 18 percent. Because of its success, Docherty said, GM is extending the program through January 4.
Chrysler's 30 percent decline comes on the heels of a 35 percent drop the previous October. The Dodge Avenger sedan and Caravan minivan were Chrysler's only vehicles to post year-over-year sales increases.
Bottomed out
October's sales indicate that the industry probably bottomed out in the second quarter, said Standard & Poor's equity analyst Efraim Levy.
“Going forward, we should see a fairly steady increase in demand,” he said. “How fast, no one knows, but the trend is there.”
Higher sales will mean higher production, Levy said.
“That helps companies all over the industry,” he said. “Whether you're an automaker, auto supplier or auto retailer, it's good for you.”
The U.S. annual sales rate had averaged 10.2 million units through September, down from 13.2 million last year and 16.2 million in 2007.
Washington -- The government sharply criticized Toyota Motor Corp. Wednesday for its "inaccurate and misleading" suggestion that sudden acceleration in some vehicles bound for recall may be due only to improperly fitting floor mats.
The National Highway Transportation Safety Administration's criticism of Toyota's statement is the latest hit to the automaker's reputation from what will be the largest safety recall in its history: 3.8 million vehicles.
NHTSA said Toyota inaccurately suggested in a press release this week that the agency had concluded "that no defect exists in vehicles in which the driver's floor mat is compatible with the vehicle and properly secured," the agency said in a statement.
"It was never our intention to mislead or provide inaccurate information. Toyota agrees with NHTSA's position that the removal of the floor mats is an interim measure and that further vehicle-based action is required," said Toyota spokesman Brian Lyons.
"We are in the process of developing vehicle-based remedies to help avoid the potential for an unsecured or incompatible floor mat to trap the accelerator pedal."
On Monday, Toyota refuted suggestions that other defects might be causing the accidental acceleration, and pointed to the government's decision not to investigate a consumer complaint.
Bob Carter, general manager of the Toyota-brand division of Toyota Motor Sales USA, told reporters there is "absolutely no evidence" pointing to a defect other than poor-fitting floor mats.
Sean Kane, president of Massachusetts-based Safety Research & Strategies, said Toyota was "waving the agency's denial of the latest petition for a defect investigation like a victory banner."
While NHTSA hasn't found a vehicle-based defect that is causing unwanted acceleration, "it doesn't mean there isn't one," he said. "It just means that the agency hasn't found it."
NHTSA says removing the recalled floor mats is the most immediate way to address the safety risk.
"But it is simply an interim measure. This remedy does not correct the underlying defect in the vehicles involving the potential for entrapment of the accelerator by floor mats, which is related to accelerator and floor pan design," the agency said.
2010 Ford Fusion Sport – Click above for high-res image gallery
For the first time ever, Motor Trend announced the winner of its annual Car of the Year award this afternoon live via webcast. Though the field of 23 contenders was highly competitive this year (follow the jump for a complete list), we guessed immediately that the winner was a Ford as soon as the webcast came online. How'd we know? The fact they were broadcasting the announcement from Ford World Headquarters in Detroit was a not-so-subtle clue. The Fusion, Taurus and Mustang were all in the running, but it was Ford's redesigned mid-size sedan, the Fusion, that took home the coveted Golden Calipers.
In retrospect, the choice is a solid one and not all that surprising. The Fusion was extensively reworked for the 2010 model year and features a new exterior design, new models and new powertrains. Ford offers a four-cylinder model, two strong V6 options and a full-on parallel hybrid variant, which means buyers should have no trouble finding a Fusion that fits their needs. And indeed they have, as the Fusion has already broken its own yearly sales record – with two months left to go.
Like MT, we're big fans of the Fusion here at Autoblog, and even have high hopes that one day it could be the domestic car that knocks the Toyota Camry and Honda Accord from atop their perches as the best selling cars in the States. That said, this Ford still has a long way to go. Toyota has sold nearly twice as many Camry models as the Fusion so far this year, and the Accord and Nissan Altima are still flashing their taillights at Ford's CoTY winner. It's not just demand, as Ford doesn't even have the production capacity at the moment to match Camry sales, and it doesn't help that the Mercury Milan siphons off a few potential Fusion customers, as well.
Nevertheless, this is less about what the Fusion could be in the future than what it is today: the 2010 Motor Trend Car of the Year. Congrats to Ford and the Fusion team.
BMW 7 SERIES
BMW Z4
BUICK LACROSSE
CHEVROLET CAMARO
FORD FUSION
FORD MUSTANG
FORD TAURUS
HONDA INSIGHT
HYUNDAI GENESIS COUPE
KIA FORTE
KIA SOUL
LEXUS HS 250H
MAZDA3
MERCEDES-BENZ E-CLASS COUPE
MERCEDES-BENZ E-CLASS
NISSAN 370Z
NISSAN CUBE
PORSCHE PANAMERA
SUBARU LEGACY
SUZUKI KIZASHI
TOYOTA PRIUS
VOLKSWAGEN GTI
VOLKSWAGEN ROUTAN
For the first time in three years, none of Toyota Motor Corp.'s vehicles received “top safety pick” ratings from an insurance group, as tougher criteria pared the number of selections from 94 last year to 27 this year.
Ford Motor Co. led all automakers for the second year in a row with six 2010-model top safety picks from the Insurance Institute for Highway Safety, including four from Volvo, a brand that's being sold. Subaru and Volkswagen AG finished next with five qualifying vehicles, and Chrysler Group had four. Offerings from General Motors, Mercedes-Benz, Honda, Kia and Nissan also made the list.
The nonprofit insurance group, funded by auto insurers, tightened its top pick criteria for the second time since it started the award for the 2006 model year.
This year vehicles must have “good” ratings in the institute's rollover testing. Getting that rate requires doubling the roof strength required by the U.S. government, the group said in a statement.
That adds to existing requirements for receiving the “good” label in front, side and rear crashes and having electronic stability control.
Toyota was the only automaker among the six biggest in the United States that didn't have a winner. Before this year, Toyota, the world's top-producing automaker, had top safety picks in every year but 2007. The Camry almost qualified, the insurance group said. But it received a “marginal” rating in a rear crash test because the seats and headrests provided less than desirable protection against whiplash.
Here is a list of the 2010 top safety picks:
Large cars
Buick LaCrosse
Ford Taurus
Lincoln MKS
Volvo S80
Mid-sized cars
Audi A3
Chevrolet Malibu built after October 2009
Chrysler Sebring four-door version with optional electronic stability control (ESC)
Dodge Avenger with optional ESC
Mercedes C class
Subaru Legacy
Subaru Outback
Volkswagen Jetta sedan
Volkswagen Passat sedan
Volvo C30
Small cars
Honda Civic four-door version with optional ESC; excludes Civic Si
Gas-guzzling Houston, bete noire of environmentalists worldwide, is planting the seeds of an electric future.
On Tuesday, mayor Bill White and local electricity retailer Reliant Energy launched a plug-in hybrid program that includes 10 vehicle-charging stations around the city. Seven of the stations will be available to the public, and electricity will be free the first year, mayor White said.
The move comes amid a marketing and lobbying push by several electric providers and car maker Nissan–which has an all-electric vehicle due in late 2010–to quicken the pace of car electrification and the same day that General Motors said its electric Volt is on track for commercial production a year from now. At The Wall Street Journal CEO Council on Tuesday, Nissan Chief Executive Carlos Ghosn said that by 2020, 10% of all cars sold will be zero-emission vehicles.
The “Electrification Coalition” called for “electricity ecosystems,” or select cities where the electric-car revolution can take root. But who knew that would include Houston?
Last week, Reliant (a subsidiary of NRG Energy Inc. and a member of the carmaker's “Electrification Coalition”) and Nissan announced that they'd make the Texas city a “launch city” for the all-electric LEAF, due in late 2010. Reliant promised to install public charging stations and provide equipment to charge cars at home. Talk about taunting the devil in its own lair.
At first blush, it's hard to imagine a city less amenable to electrification of the transportation fleet than this sprawling metropolis, criss-crossed by tentacular highways. Many of Houston's more than 5 million inhabitants appear to think nothing of driving 30 miles to work on tricked-out pick up trucks getting 12 miles a gallon.
And many owe their livelihoods to the same oil-derived fuels electric car makers hope to displace. Houston is not only a big refining center, but home to ConocoPhillips and significant operations for the likes of Chevron, Exxon Mobil, Shell and BP.
There are plenty of challenges. Houston's public charging stations, 4-foot long cyliners, can take 8 to 10 hours to fully charge a car, for example. Leave the hazard lights on. And the SUV-loving market here may still find electric cars unpalatable—at least until all-electric Ford pickups hit dealer lots.
For all that, Houston actually makes a lot of sense. Unlike many places in the country, Texas' electricity grid isn't under stress, for starters. And from an environmental perspective, it's fairly clean, with a lot of juice coming from wind farms and natural-gas fired plants.
Electricity-guzzling cars that up the demand for natural-gas for power generation could even make the region's fossil fuels industry happy, says says Kenneth Medlock, an economist at Rice University. And since most cars would charge at night, Texas' booming wind-energy industry would find new customers, too.
In the end, America's fourth-largest city epitomizes the country's love affair with the car. Unlike in green urbs like San Francisco or Seattle, it's all but impossible to live here without wheels—so they might as well be electric. It will probably be cheaper and easier to electrify urban sprawl than rein it in altogether.
Who knows? Maybe in a decade Houston's famed ArtCar parade will be a largely electric affair.
News Release | August 6, 2009
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