I hope Chrysler enjoys the kudos over the next few weeks for its Aspen Hybrid full-size SUV. As Wheels writer Howard Elmer noted in his preview today, a 25 per cent reduction in fuel consumption is nothing to sneeze at.
But if the hybrid of Aspens isn't better received in the marketplace than its
nearest rival, the Chevy Tahoe Hybrid I drove last fall, Chrysler's positive press clippings won't last very long.
Despite similar fuel economy savings over a comparable gas model
using the same dual-mode hybrid system as the Aspen, with the Tahoe
(and its GMC Yukon counterpart), General Motors has achieved what
nobody in the industry would have thought possible a few months ago:
create a hybrid that no one wants to buy.
By this past April, the General had only sold about 1,100 of its large hybrid SUVs in
the U.S. since their introduction in January. That's well behind
its goal of 12,000 sales a year, and a sliver of the more than
100,000 hybrids sold so far in the States this year. GM has even gone
to the drastic measure of recently throwing on $4k worth of incentives.
Compare those numbers to Toyota's Prius. It's selling at a 23 per cent higher pace than last year. Or compact cars as a segment. They're up 40 per cent.
U.S. customers have spoken: with gas at nearly $5 a gallon, they want fuel misers.
Hybrid or not, the only sane primary reason anyone would buy a large, body-on-frame SUV like the Aspen or Tahoe these days is to
tow a bass boat/camper to the campsite/cottage. But with no end in
sight in the rise in gas prices—guess what?—trailers are being
unhitched and left at home as commuters save their gas money for essential driving, er, like maybe getting to work?
Add that any large SUV is basically a niche vehicle here in Canada anyway
(about 1/10 the traditional uptake from our friends to the south) and
even with its price advantage over the Tahoe and Yukon, it's hard to see why Chrysler will have
any better success with its hybrid behemoth than GM.
Despite the U.S. automaker’s consistent denials over the past two years that its Volvo cars division was not on the table, the news yesterday that Ford is in negotiations with a Chinese and/or a Russian company to sell its Swedish brand should be of little surprise to anyone following the struggling brand’s recent fate.
The For Sale sign’s been on the corporate lawn at Volvo ever since Ford CEO Alan Mulally arrived in late 2006. It’s just been a matter of finding someone (anyone!) to take the once successful brand off the Detroit automaker's hands, albeit at a reasonable price.
Despite Volvo’s safety expertise and resources, Western companies like BMW, Canadian-owned Magna, Renault, the private equity firm that bought Chrysler—Cerberus, and AB Volvo, the Swedish commercial truck manufacturer that sold its stake in Volvo to Ford almost ten years ago, have all taken turns kicking Volvo’s tires over the past two years. And all took a pass.
Maybe it has something to do that Volvo hasn't made a toonie of profit under Ford's ownership since 1999.
Or that its brand image has gotten away from its original identity of manufacturing the world's safest vehicles (see video above.)
It also hasn’t helped that the Volvo missed the boat on a natural brand tie-in with hybrids or diesels, and updated products like its C30 premium compact and XC60 compact crossover are following trends instead of leading them.
(In Canada, Volvo’s sales are down almost 30 per cent compared to this time last year.)
But safety expertise is something emerging market automakers have little experience in. And based on some early attempts at meeting European safety standards, owning Volvo would be a jump-start to selling cars for the Western world.
Of course, the question of what does Ford do now without Volvo is a good one.
Currently, the Taurus, Taurus X, Flex, 2010 Focus, and 2012 Escape all ride on Volvo platforms.
Even last summer, while denying Volvo was for sale, Ford President of the Americas, Mark Fields, said the product portfolios of the two brands are too interconnected, especially in Europe, for a breakup to work to Ford’s benefit.
Oh well. So much for that.
To give you an idea of the bread crumb trail leading up to what appears to be the current Volvo sale in the works, here’s a timeline on various leaks and denial-denial-denials over the past few years leading up to Volvo’s departure from the Ford stable:
September 2006 - Ford confirms that Aston Martin is up for sale (which the automaker would eventually sell to Kuwaiti owners.) Ford says Jaguar, Land Rover (both which will eventually be sold to Indian automaker Tata) and Volvo are definitely not.
May 2007 - Reports say BMW is so serious about buying Volvo, it requests financial data.
April 2007 – An associate of Ford shareholder and CEO of Tracinda Corporation, Kirk Kerkorian, says the automaker would do well to sell Volvo and drop Mercury in the U.S. Ford continues to state that its Swedish subsidiary is not for sale.
May 2007 - In total, in the past two years, Volvo loses $1.7 billion.
June 2007 - Ford President of the Americas, Mark Fields, claims that Volvo definitely isn't on the block. He says the product portfolios of the Ford brand and Volvo are too interconnected.
July 2007 – Behind closed doors, Ford decides, "in principle," at a board meeting, to sell Volvo. Potential buyers mentioned are: Canadian-owned Magna, BMW (again), and the private equity firm that bought Chrysler—Cerberus, and AB Volvo, the Swedish commercial truck manufacturer that sold its stake in Volvo to Ford almost ten years ago.
August 2007 – After a year of shopping the brand around in secret, the latest automaker to say “no thanks” is Renault.
August 2007 – Reports say Ford intends to wrap up its sales of Jaguar and Land Rover by September 30, and of Volvo by the start of winter (which it doesn’t).
December 2007 – In another obvious sign that Volvo is being shopped around, Ford asks its U.S. Volvo dealers to “voluntarily” close franchises to “better match demand with the (shrinking) sales infrastructure.”
January 2008 - Despite denials, Ford is ready to auction off Volvo as soon as its deal to unload Jaguar and Land Rover to Indian automaker Tata is done. The hope is Ford gets around $6 billion, a bit less than the $6.45 billion the automaker paid for the Swedish brand back in 1999.
March 2008 – Ford moves Volvo’s headquarters from sunny California to New Jersey to “cut overhead and increase the overlap in working hours with Ford in England and Volvo HQ in Sweden.”
June 2008 – As Ford lays off another 2,000 Volvo workers, reports say Ford’s finally found either Chinese or Russian buyers for its Swedish brand.
[Sources: Autoblog, Autocar, Automotive News, Detroit Free Press, Motor Trend, The Business, The London Times, The New York Times]
If you thought ever-tightening emission regs, the U.S. credit crisis, the shift to emerging markets, or the the out-of-control-price of gas that's forcing North Americans into small cars in historic numbers are the only challenges that have global auto execs downing Advils like popcorn, think again.
According to General Motors and Nissan, the rising price of material costs—specifically steel—is what's giving those who run car companies headaches these days.
Higher material prices are the "single most important challenge
facing the industry," Nissan grande frommage, Carlos Ghosn, told company shareholders in
Yokohama today.
Expect automakers worldwide to raise vehicle prices by about 2 or 3 per cent
in 2008 to offset the rising cost of raw materials, he
said.
"All car manufacturers will increase prices. It's a question of
time. How can you not increase prices if the price of raw materials
goes up 100 per cent?"
On Monday, GM announced that will raise prices of 2009 U.S. vehicles an average of 3.5 per cent. That would add $1,050 to the pre-tax cost of a $30,000 car.
A dealer who was in on the conference call said some of the price increase is due to more product content, but rising material costs and the weak U.S. dollar is also to blame.
Canadian GM officials have not commented yet if we'll see similar increases here.
Ultimately, this could mean more cars like Hyundai and Kia's $9,995 specials or Volkswagen's City versions will enter the market. In other words: decontented cars to keep the advertised prices down where once-standard creature comfort features like power windows, A/C, keyless entry, and ICE become optional add-ons.
You don't have to wait until Chevrolet rolls out its Camaro sometime in 2009 to find what it will cost. Its rival retro pony cars have already sealed its pricing fate.
With today's base model Ford Mustang priced at $24,799 (excluding$1,250 destination) and Chrysler Canada last week announcing its base model 2009 Dodge Challenger SE will retail for $24,995 (excluding $1,300 destination), Chevrolet pretty much has to price its new pony car somewhere in the under-$25k neighbourhood.
The question is, what kind of mill will you get in the resurrected entry level Chevy pony car?
Its been speculated that the refreshed 2010 Mustang will get Ford's new EcoBoost V6. But count on the current 210 hp 4.0L model to continue on to keep its low ball price.
And we know the Challenger SE comes with a 250 hp 3.5L V6.
All we know about the '10 Camaro is that we've seen the same 256 hp 3.5L V6 that's in the new Pontiac G8 running around in Camaro prototypes.
Yet that six-cylinder G8 starts at $31,995.
So, combined with the way gas prices are going, Chevy may have to use its 2.0L Ecotec turbo from the 260 hp Cobalt SS/Pontiac Solstice GXP/Saturn Sky Redline as a base engine in order to satisfy frugal customers and keep the Camaro's starting price competitive.
If that happens, just how relevant do you think a four banger muscle car can be?
What's more imortant? The number of horses or cylinders?
You may not be old enough to remember, but in the early '90s—the days before side crash ratings, crossovers and baby boomer driven retro design—small, fun-to-drive cars were The Future.
Cars like the Honda CR-X, Mazda MX-3 and Nissan NX were fresh ideas compared to retreads like Ford's Fairmont-based Mustang or Chevy's Z28 Camaro.
If you miss those days, or regret not being around to enjoy them, no worries. As I've been blogging ad nauseum here in The Crank, high fuel prices and escalating new car prices are bringing back small, sporty cars, yet again.
We already know Nissan is ready to take the lead in the rear-wheel-drive pocket rocket race. But now we have news that a second small Nissan sporty coupe is in development to take on Honda's upcoming CR-Z hybrid hatch. And like the '90s all over again, Nissan thinks the new Honda will also be its coupe's biggest competitor.
Based on the next-gen Versa's modified front-drive subcompact platform, reportedly the new hybrid 2+2 (speculated above) will be powered by 1.5L four mated to an electric motor and a six-speed dual-clutch manumatic with paddle shifters.
Hmm...front-drive...hybrid...paddle shifters...does this mean boomer retro coupes like the Mustang, new Camaro and Challenger are already The Past?
With the domestic auto industry looking more and more like "That '70s Show" each passing day, there's little surprise hearing that Ford is killing a so-called Boss V8 for the next Mustang.
Reminiscent of the neutering of early '70s muscle cars, Ford has issued a "stop work" notice on a new V8 that was to appear in a bunch of vehicles, including the refreshed 2009 Mustang (speculated left), F-150 and Super Duty pickups. The new V8 will now be limited to just the Super-size-me-Dutys that Ford says need a more fuel efficient mill than the current 6.8L V10 gas hog.
This was only the latest in a recent flurry of activity from Ford as it grapples with a market that almost overnight has rejected the automaker's cash cow pickups; a scenario has also caused the Detroit company to swiftly switch truck and SUV plants to producing small cars, and confirm the Euro-only Focus will indeed come to North America in 2010. But maybe the hardest decision of all was to delay the introduction of its best-selling refreshed 2009 F Series by two months this fall.
And like the early '70s when new smog regs wiped out old and dirty V8s in cars, today's market is rapidly moving to where the only customers buying pickups are the ones that actually need them.
Ford is saying over the past year its seen a significant change in the choice of cab models and engines being ordered as personal use buyers in the U.S. bungee jump out the segment.
Sales of regular cab pickups are rising, while crew cabs fall as core truck buyers (fleets, farmers, contractors) continue to buy pickups to replace old trucks while personal use buyers—the largest group of four-door pickups buyers—are saying "enough's enough", moving to smaller vehciles or holding off on getting a new rig.
Now let's assume this is an industry wide trend: definitely not good news for not only Ford, but General Motors and Chrysler as well.
All three count on big profit margins from crew cabs, especially the gussied up models. Think about this: a regular cab F-150 starts at $22,199, whereas a four-door King Ranch (a vehicle that virtually costs the same to design, engineer and build) starts at twice the price.
Which leaves us with the biggest question in Detroit these days: How do the domestic brands continue to exist living only off the profits of small cars?
Last month's Canadian new vehicle sales just came in with no surprises. Given the state of record high fuel prices or threats of tighter financial times ahead: small cars are hip, pickups and minivans are square.
The big winners over May from one year ago were Hyundai's Dollar Store Special $9,995 Accent (up 140 per cent), followed by Jeep's compact Patriot (up 96), and Honda's new Accord (up 58.)
Guess what? The two top losers were made in the General's Oshawa truck plant: GMC's Sierra sales were down 44 per cent compared to May 2007, Chevrolet's Silverado down 35. While Dodge's just revamped Caravan sold 20 per cent fewer units, the same percentage loss as Chevy's all-but-dead Uplander.
May's top ten sellers were led by Honda's Civic, which sold 8,727 units, followed by: Toyota Corolla (7,435); Ford F-Series (6,582); Mazda3 (6,200); Dodge Caravan (like the F Series, still hanging in there, at 5,665); Toyota Yaris (5,658); Hyundai Accent (4,182); Toyota RAV4 (4.034); Chevrolet Cobalt (3,989); and Ford's Escape (3,742) rounding out the list.
As driving big, luxury or performance cars becomes about as stylish as wearing a baby seal fur coat to a Greenpeace meeting, luxury and performance automakers are scrambling to jump on the premium compact bandwagon, a segment that analysts like JD Power say is ready to expand—big time.
We already know that Cadillac, Saab and Infiniti will bring competitors for BMW's Mini and 1 Series and Audi's A3 to market in the next few years—but Porsche?
Apparently, Yah-vohl!
If you look at Audi's existing premium compact A3 as nothing more than an overpriced VW GTI, how do you feel about a small Porsche, left, based on the same platform? Because according to German buff mag AutoBild, Porsche is working on a Porsche badged Volkswagen Golf for 2012. Just don't expect Vee-Dub-Ya pricing.
And you thought the Cayenne was blasphemous?
Do you think anyone will buy into this extreme form of badge engineering? Or will there be plenty of takers regardless, merely because of the Porsche badge?
Zero emissions. With both customers clamouring and governments legislating for such, it's the panacea every automaker is struggling to achieve.
But with the announcement earlier this week that Honda has kicked off production of its FCX Clarity, left, at the world's first dedicated fuel cell vehicle manufacturing facility in Japan, the automaker becomes the first (again!) company to make what others have only as concepts into actual reality.
As we reported from last fall's LA auto show, Honda plans to deliver about 200 FCX Clarity hydrogen fuel cell-powered vehicles in the U.S. and Japan to customers in the first three years of production. Three-year leases (Honda won't sell you an FCX Clarity) begin in July for U.S. customers at $600 per month; the world's first large-scale retail initiative for fuel cell vehicle technology.
If the hydrogen Honda sounds too good to be true, there's one big hitch for Canadians: you need to be a resident of California to even get a whiff of its hydrogen exhaust (OK, it's only water.) Even then, Honda would prefer if you lived close to one of its three authorized dealers and hydrogen filling stations in Southern California—Irvine, Santa Monica, and Torrance to be exact.
Honda does say that "lessons learned" from these first few FCX Clarity lessees will "help pave the way for eventual market expansion outside of the SoCal."
But with cold weather starting a major challenge with any fuel cell vehicle, my guess is Canada is well down on the waiting list.
The BIG question is the long term viability of hydrogen cars.
With filling stations scarcer than hair on a chihuahua, will cars like the FCX ever be more than simply super-niche green solutions?
From "the more things change, the more things change" department:
• Historically, automakers have used the Detroit, Frankfurt or Tokyo auto shows to make a splash. Made sense, right? These are the markets where they sold the most cars.
But recently, as an indication as to where they will eventually sell the most cars, we've started to see automakers make debuts in such far flung, non-traditional venues like Beijing and Shanghai, China, and New Delhi, India.
And now Mazda says it will present an all-new sporty, compact crossover SUV concept (left) designed especially for the Russian market at this year's Moscow International Automobile Salon.
Believe me. Mazda's not going to Moscow for the weather during this year's Salon's dates in late August.
Russia is one of Europe's fastest-growing markets, quickly becoming the areas largest automobile market, with SUVs having about a 20 per cent share of the new car market.
Merely more evidence that a half-century of automakers catering to Western car buyers' needs first seems to be rapidly coming to a close. In other words, Western car buyers are on the way out when it comes to influencing global car design.
• In a turnaround of a trend that's seen congested cities and consumers' general penchant for convenience all but kill off the manual transmission, Nissan may introduce its first clean-diesel in Canada exclusively with a gas, brake—and yes—clutch pedal.
Nissan says the turbo used in its new X-Trail SUV 2.0L four-cylinder clean diesel being introduced in Japan, creates a lot of lag when mated to an automatic, apparently, something Japanese and American drivers aren't use to.
The solution, says Nissan, is a good ol' stick, which a more direct and linear acceleration characteristics (doh! no kidding!.)
The first clean diesel in Canada, the Maxima (right), will get a 3.5L six in 2010. But the automaker is still concerned the herky-jerky motion may put off diesel neophytes—especially our friends to the south, hence the possibility of a unique stick in a segment awash in slushboxes.
Wheels writer John LeBlanc was the owner of an advertising and marketing firm before indulging his lifelong passion for cars by becoming an automotive journalist. Join in the discussion as he provides expert critical analysis of the foibles of the auto industry.
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