More than high gas prices fueling small car sales

Go figure. The price of gas at the pumps goes up, and people start buying smaller new cars. That’s the easy conclusion industry analysts like Dennis DesRosiers came to when looking at the detailed Canadian new car sales figures from this April.

Sure. Sales of wee subcompact cars were up 17.1 per cent, compact cars up 11.3 per cent, and compact sport utility vehicles up 16.6 per cent can all be related to per litre prices ranging anywhere between $125 and $1.50, depending where you live and what time of the day it is.

But I posit that it’s more than just the high price of gas that’s fueling small car sales (in fact, DesRosiers' figures show that year-to-date sales of the most fuel efficient vehicles—like hybrids—actually “underperformed the overall market”). Simply put, it's the product: small cars aren’t, well, so “small” anymore, which makes the decision to downsize a little bit easier.

Compare the barebones Fiesta Ford last sold here in the late-1970s to the new one launched last year. Not only is the new Fiesta larger, it’s safer, more comfortable, and has big car features like heated leather seats and navigation.

One size up, so-called all-new compacts like the Chevrolet Cruze, Hyundai Elantra (above) and Volkswagen Jetta are about the size of a midsize family sedan from a couple of generations ago. And these cars too can be outfitted like a luxury car to make the jump “down” a cushy landing.

Also helping is the old adage that “new product sells.” All-new subcompacts like the Fiat 500 are getting all kinds of attention from us media. And with impendingly higher fuel economy regulations to meet, automakers are ploughing more small cars into the market—and advertising them—like never before.

So, yeah. Some buyers will downsize to save some money at the pumps. But I think a bigger reason in the upsurge in small car sales is simply more choice and a better product.

[Sources: The Star, DesRosiers & Associates]

Jaguar defangs a supercar, again…

 

 

 

 

 

 

 

 

 

 

 

 

 

As you may have read in my last Autonews column, India’s Jaguar confirmed it’s taking its C-X75 super car from last year’s Paris auto show from concept to production form.

No doubt. One look at the sleek and exotic super car, seen above, designed to reassert Jaguar in the upper echelon of sports car brands with the likes of Ferrari and Porsche, will more than likely create utterances of “Oh yeah, baby!” from enthusiasts. However, with the announcement the production C-X75 won’t be powered by its most interesting bit of technology—a pair of one-litre Coke bottle-sized micro-turbine engines—only brings back memories of the automaker’s last ill-fated attempts at a super car: the XJ220 from the 1990s.

You may remember the XJ220, seen left. Like the new C-X75, it was a Jaguar like no other in its day: a mid-engine super car concept, first seen at the 1988 British Motor Show, designed to take on the likes of contemporary super cars like the Ferrari F40 and Porsche 959.

In concept form, it was powered by a V12 with an estimated 500 hp, and a claimed top speed of 220 mph (350 km/h). Hence the “XJ220” name. Trouble was, the XJ220 was never designed to be put into production. But Jaguar felt compelled anyway. Especially when prospective buyers were more than willing to plop down £50,000 deposits on the XJ220's 1989 price of £361,000.

Unfortunately—and really, to no one's surprise—by the time the production XJ220 arrived in 1992, the V12 was dropped in favour of a turbocharged V6, the car reverted to rear-drive only, and its top speed was downgraded to only 200 mph (320 km/h). Worse yet, the XJ220’s price had jumped to £403,000.

Ouch.

Remarkably, Jaguar managed to find 281 buyers of the neutered super car between 1992 and 1997.

So, is Jaguar going down the same path again with its latest super car concept?

With the C-X75 concept's revolutionary micro-turbine engines not making it to the production cars, do you think it’s still worth the estimated 700,000 to 900,000 British pounds asking price?

 

Does Porsche still need to go racing to sell cars?

 

 

 

 

 

 

 

 

 

 

 

 

 

OTTAWA, Ont. - After 20-odd years, Porsche Canada is jumping back into racing in Canada. The first of its inaugural Porsche GT3 Cup Challenge Canada races will be held this weekend at Calabogie Motorsports Park, about an hour’s drive west of Ottawa. Then, on the weekend before this year’s Montreal Grand Prix, the series moves to the Mirabel airport Circuit ICAR June 3-5, then wraps up July 23-24 at Mosport.

Porsche says it’s very happy to be back racing in Canada. Fans may remember the automaker’s first-ever one-make cup series was started here in Canada in 1986 with the Rothman’s–Porsche Challenge Series using normally-aspirated Porsche 944s.

Since then, Porsche’s GT3 Cup Challenge has become a very successful franchise for the German automaker. The Canadian series will bring the total number of Porsche one-make series to 20. And the series is definitely not a run-what-ya-brung proposition. Racers compete in factory-built Porsche 911 GT3 Cup cars, like the one above, which helps Porsche claim it’s the largest racecar maker in the world.

Because Porsche Canada made the decision to run the series this year only seven weeks before this weekend’s first race, many racers had already made their plans for the 2011 season. Thus, this weekend’s race will only see eight entries. But the goal is to have about 50 per cent more by the Montreal race.

“It’s realistic to expect fields of 20 or more cars for the 2012 season,” said Joe Lawrence, President and CEO of Porsche Cars Canada at the Calabogie race weekend's kickoff event this week.

Supporting the notion that racing adds credibility to any automaker that sells high-performance image cars, Lawrence went on to add that racing and Porsche go hand in hand. Racing is “part of Porsche’s DNA.” But if you look at the majority of cars Porsche Canada sells, you have to wonder if that’s really the case anymore.

With 323 vehicles sold in Canada in April, sales are up 44 per cent compared to last year at this time, allowing Porsche Canada to claim its best month ever and the first time it’s ever sold more than 300 vehicles in a month. But the reality is, the majority of those vehicles aren’t sports cars. In fact, the Cayenne SUV made up over half those sales, while sports cars (911, Boxster/Cayman) made up only 28 per cent, with the Panamera GT sedan filling in the remainder of the sales figures.

So, I ask: Does Porsche still need to go racing on Sundays to sell cars on Mondays?

Does a spec series like Porsche’s GT3 Cup Challenge Canada add credibility to the brand?

Or does this type of racing only preach to the converted?

[Source: Porsche Canada]

 

How high does gas have to cost before you’ll buy a more fuel-efficient new car?

Let the whining begin: Gas prices in Toronto are topping $1.40 per litre. And guess what? Nobody wants to pay that. Especially the majority of drivers who are still driving large, fuel-chugging vehicles. That’s right boys and girls. Despite countless warnings that fuel will only get more expensive as time goes on, and the scare we had in 2008, Canadians still refuse to buy smaller cars.

Of course, one way for Canadian drivers to stop complaining about high fuel costs is to buy a more fuel-efficent new car. I mean, it’s not like automakers and governments haven’t been doing their part. To fall inline with increasingly stringent fuel economy standards, car makers have been pushing a raft of interesting, well-made, small cars into showrooms at a record pace. And there are still more fuel sippers coming our way.

Yet, despite the influx of smaller vehicles that offer everything large cars offer in terms of features and style, the answer to the question as to how to get North American buyers out of their trucks, vans and SUVs has been, When gas prices go through the roof. But the stats prove otherwise.

Don’t believe me? Last month, more Canadians bought gas-guzzling full-size trucks, vans and utility vehicles than more fuel-efficient cars.

According to DesRosiers and Associates, 79,597 Light Trucks were sold in April (up 5.9 per cent compared to April 2010), compared to 70,061 Passenger Car vehicles. And based on the latest figures from March, the three best-selling new vehicles so far in 2011 are the Ford F-Series (20,364), Dodge Caravan (14,313), and Dodge Ram (13,154), with the Honda Civic (11,957) popping up on the sales charts down in fourth-place as the best-selling passenger car.

So I ask: At what price per litre does gas have to cost before you’ll ditch your older gas-hog for a smaller, more fuel-efficient vehicle?

$1.50?

$1.75?

$2.00?

Never?

[Source: DesRosiers and Associates]

Will Honda follow Toyota with its own annus horribilis?

 

 

 

 

 

 

 

 

 

 

 

While the manufacturing crisis in Japan has affected almost every automaker on the planet to some degree, the disaster seems to have particularly hit hard for Honda. And, seemingly, the crisis couldn’t have come at a worse time for the struggling Japanese automaker. Just as rival Toyota was measurably hurt last year as it went through its own problems with a recall crisis that affected millions of vehicles worldwide, 2011 may end up as Honda’s annus horribilis.

The combination of rising fuel prices and the manufacturing crisis caused by the earthquake in Japan in March is becoming a double-whammy headache for Honda. At a time when new car buyers are looking for small, fuel-efficient cars, Honda's most popular models may be in short supply. This week, the automaker said its Japanese-built Fits and Civic Hybrids will be in short supply until later in the year, while a “very limited number” of Japan-built vehicles like the CR-Z coupe, Insight hybrids and Acura TSX and RL sedans will be imported. It also added that even though gas versions of the new 2012 Civic are made right here in Canada, production will be "significantly reduced" through at least the summer months, while the launch of a new CR-V compact crossover later this year, has been put off, as well.

Even before the earthquake hit in Japan, 2011 wasn’t looking like a year Honda Canada was going to look back on fondly.

Recently launched new products (i.e. the Accord Crosstour, Insight and CR-Z hybrids, and Acura ZDX crossover-coupe), haven't exacty taken the market by storm, or caused rivals to go back to their CAD-CAM systems. And the proof can be found on the sales charts: For the first four months of this year, the combined sales of its Honda and Acura brands were down 8.1 per cent, making it the sixth-most popular automaker in Canada, behind the Detroit Three, Hyundai-Kia Motors, and Toyota.

And although the Civic has been the best-selling passenger car in Canada the past 13 years, it’s hard to see how Honda will keep that crown without a lot of factory sales incentives. Honda’s conservative redesign of the new 2012 Civic hasn't exactly wowed the critics that Honda's been resting on a reputation earned from past products. It doesn’t help that the so-called “new” Civic isn’t the class-leader anymore. It will make drawing non-Civic buyers into Honda showrooms—away from new rivals at Hyundai, Chevrolet, Volkswagen and Ford—even tougher as the year goes on. Honda enjoys one of the most loyal buyer groups in the industry. But how long can it keep relying on these aging Civic buyers?

And hey, let’s not forget a massive recall for an airbag problem that’s affecting a wide range of Hondas.

What do you think?

Based on the current Honda/Acura showrooms, do you see the automaker returning to its former glories?

Or, like what Toyota is going though, is Honda just continuing along on a long downhill slide?