European Auto Sales are a Tale of Two Continents

Or perhaps, a tale of two distinct parts of one continent.

By Chris Haak

01.31.2008

According to ACEA, the European automakers' association, in 2007, auto sales in Europe were more or less flat - up 1.1% overall (from 15,782,959 to 15,958,871). But the real story is the drastic contrast between how automakers fared in western Europe against how they did in the developing markets in eastern Europe.

Auto sales in western Europe grew just 0.2% - but made up about 93% of the total European vehicle market. Germany is the largest new car market, but saw its sales drop by 9.2%, while the second-largest market, Italy, saw a 7.1% sales growth. Rounding out the top three was the UK, where sales grew 2.5%. Sales in Germany were hurt by consumer uncertainty about possible CO2 taxes, while they were helped in the UK by private demand for diesels and small cars, and in Italy by government incentives.

In eastern Europe, rising personal wealth in countries such as Poland, Romania, and the Czech Republic led to a 14.5% increase in new vehicle registrations in eastern Europe. The fastest growing eastern European country's auto sales in 2007 was Latvia, at 26.8% growth (but a low number in overall sales), followed by Romania, at a healthy 26.3% clip. In fact, Romania passed Sweden, Austria and Greece in 2007 to move from the 12th spot to the 8th spot. Rounding out the top three eastern European nations in terms of sales growth was Poland, at a healthy 22.9% sales growth.

For manufacturers, there was both good news and bad news. Volkswagen AG (which includes VW, Audi, Seat, Skoda, Bentley, Lamborghini and others) is the largest automaker in Europe, but saw its sales fall by 1.1%. The second-largest automaker in Europe is PSA Group, which includes Peugeot and Citroen. Its sales went up by 0.6%. The rest of the top six companies were Ford, GM, Renault and Fiat, respectively. Fiat led the large companies in sales growth at 7.1%.

To me, there are a few takeaways from this data. One is that government actions can clearly cause harm or benefit to auto sales (Such as Germany's sales declines and Italy's increases), so government officials need to be aware that their actions will have a real impact on both the economy overall and the livelihood of those who depend on their auto industry for employment. Another point is that although eastern Europe's sales grew far faster than western Europe's did, western Europe is by far driving the auto industry in the near term, with over 90% of all sales in Europe. Whether the eastern European automobile market continues to grow briskly will depend on a number of factors, but having the appropriate vehicle mix for the stage of development that these former Iron Curtain nations are in should go a long way toward continued momentum.

Read more!

GM Holden Confirms Diesel Commodore Within 18 Months

By Chris Haak

01.31.2008

According to Australian website GoAuto, GM's Holden subsidiary in Australia is expected to offer the same 2.9 liter V6 turbodiesel (pictured) that GM will also offer in the Cadillac CTS in Europe (and possibly/likely in the US as well) in its VE platform vehicles. Among others, these include the Commodore, which is the vehicle that became the Pontiac G8 in the US.

Of course, since GM North America needs to improve fleet fuel economy, and because the G8 is built in Australia alongside the Commodore, it seems like a reasonable assumption that the G8 may eventually offer the same engine as an option. The V6 diesel's output is approximately 250 horsepower and 406 lb-ft of torque.

The same article said that it expects the South African-built (and Australia-sold) Hummer H3 to offer the same engine at some point.

Even more interesting would be whether GM took a play from Audi's playbook and fitted the upcoming 4.5 liter Duramax V8 turbodiesel into a high-performance HSV variant of the Commodore or G8. This "Baby Duramax" is intended for light duty trucks and SUV such as the Suburban/Tahoe/Yukon and half ton pickups, and is designed to fit into the space occupied by a small block Chevy V8. Imagine this engine, which will produce "at least" 310 horsepower and 510 lb-ft of torque in a sporty car!

I'm all for consumer choice and fuel-saving technology, so I hope to see more powertrain diversity from GM and others in the coming years. High economy/high performance diesels sound like a great combination.

For more on upcoming diesel offerings, click here.

Read more!

Hyundai Sales Goals: If you don't succeed several times, try again

By Chris Haak

01.31.2008

Hyundai's South Korean executives have had some ambitious sales goals in the US for several years. However, it has become apparent that either the bump in sales attributable to Hyundai's improved quality and solid value message that occurred over in the earlier part of the decade has likely plateaued. Until this year, the company's management in Korean didn't quite grasp the idea that their expectations for continued breakneck sales growth in the most competitive automobile market in the world might have been unrealistic. The result was inevitably missed sales targets and a revolving door in the executive offices of Hyundai's US subsidiary.

Last year, Hyundai hoped to sell 550,000 vehicles in the US. When it became apparent that goal wasn't going to happen partway through 2007, the target was revised downward to 512,000. After the numbers were tallied in early January, Hyundai even missed that goal by a mile. In fact, it even missed the half a million milestone, with sales coming in at 467,009.

In 2007, Hyundai dealers primarily blamed the product mix - a shortage of the smallest, most fuel efficient models, the Accent and Elantra. This is being addressed for 2008 by increasing the supply of both models to the US by 25%. Additional dealer incentive programs are planned which will enhance dealer profit margins and encourage greater sales volume and customer satisfaction.

The product cadence will also continue at Hyundai for 2008. The big launch is the large Genesis sedan, with its optional V8 and rear wheel drive. The car will be uncharted territory for Hyundai, but at least that means that it is probably unlikely to cannibalize many sales of its sister models. However, I'm guessing that the Genesis will be more or less a niche product, in spite of how great it looks on paper. Customers just won't be looking to Hyundai for an alternative to a Dodge Charger, Chrysler 300, Infiniti M35/45, or others. Another higher volume launch for 2008 is the five door Elantra Touring, which is intended to compete with the Toyota Matrix, Pontiac Vibe, and other stylish five-door compact hatches. Lastly, a revised Sonata sedan, with allegedly a much improved interior, arrives in the spring as an early 2009 model. Hyundai has been crowing about how the base Sonata's interior will be superior in design and materials to the high-end Chevy Malibu LTZ's, saying nothing for the base Malibu.

The goal for 2008 is 500,000 units. Hyundai has avoided some of the quality missteps that accompanied Toyota's rapid growth, so they may be able to pull it off, but some dealers are concerned that the efforts to move upmarket to the Genesis may cost the company some volume, as Genesis development was done at the expense of more "bread and butter" models. If they can't meet the goal, look for another "help wanted" sign again outside the executive offices of Hyundai USA later in the year.

Read more!

Ford Transit Connect Now Will Come to the US

By Chris Haak

01.30.2008

According to today's Wall Street Journal, "people familiar with the company's plans" have confirmed that Ford will, in fact, bring the Transit Connect European commercial van to the US. The move is expected to be announced at next week's Chicago Auto Show, with Ford expecting to sell about 20,000 units toward the end of 2009.

The Transit Connect, although it looks similar to Dodge's Sprinter (another European commercial van), is a smaller vehicle. In Europe, it is powered by a range of 1.8 liter common-rail turbo diesels, and the vans are actually assembled in Turkey.

The Transit Connect (or whatever name it has once its US sales begin) will be an interesting addition to Ford's lineup. Many people in the US have been pining for some of Ford's excellent European and Australian products, so this experiment will prove interesting to observers like me. Even more interesting, however, is the fact that Ford either really had a difficult time deciding whether to offer the Transit Connect in the US, or knew they were going to and just denied it to throw off journalists. Mark Fields, Ford's President of the Americas, told Autosavant only last month that it would be a long time before the US saw the Transit Connect, if ever:

I asked Mark Fields, Ford’s President of the Americas, about the Transit Connect in the States, and his answer was that it would not happen anytime soon. Pressed for a timeline, he would not commit to the Transit Connect coming here soon, or for that matter, ever. One has to assume that the dollar’s devaluation has made the prospect of importing foreign-built vehicles somewhat ridiculous for Ford. It cannot make economic sense at this point. To his credit, Fields seemed very familiar with the Transit Connect and then turned the tables on me, asking me what I thought the market was for the van here in the States, and how that would break out between commercial and consumer buyers. I responded as above. Fields was very gracious and polite, but I got the feeling Ford doesn’t think there would be any consumer demand for the Transit Connect; that the vehicle would sink of swim solely on its commercial appeal.

So, was Fields lying, or was the on again/off again Transit Connect program off in December and on again just a month later? It's impossible to tell right now. On one hand, Ford's product planning was in something of a state of disarray when the company came to the realization that some of their ideas weren't likely to be met with success in the marketplace. On the other hand, has anything really fundamentally changed since December? CAFE fuel economy standards had already been increased by then, so Ford should have known that it would need more fuel efficient commercial vehicles. Regardless, the arrival of the Transit Connect in the US will likely be the first of many moves by Ford to better leverage its global assets and achieve better economies of scale.

At any rate, it will be interesting to see how Ford presents the Transit Connect to the US in Chicago, and even more interesting to see how well Americans take to it. Apparently, Ford will market the van primarily to commercial customers, such as caterers. But will they also sell versions configured as passenger haulers to the retail consumer? Will they only offer diesel power, or will a gasoline engine be added to the mix as well?

Read more!

Why Chrysler's New Consumer Advisory Board Won't Work

By Chris Haak

01.25.2008

Deborah Meyer, Chrysler's head of marketing (whom the automaker recruited from Lexus last year) announced yesterday several product-related initiatives.

First, more Chrysler vehicles will offer extra features without extra cost to improve Chrysler's value message. Changes include things such as adding Stow 'n Go seats to the entry-level Dodge Caravan, 17 inch wheels on the Charger, and more. The goal with these changes is to simplify both the ordering and the manufacturing process for Chrysler vehicles. These changes are a good idea, as long as they are accompanied by the previously-reported interior improvements to vehicles like the Sebring and Avenger. Since many of Chrysler's current lineup is not class-leading, it's important that they at least can share a message of features, content, and value with potential consumers.

Their second initiative - establishing online Consumer Advisory Boards of up to 2,000 consumers total - may sound like a good idea at first glance, but I really don't think it will work. The theory behind them is to give Chrysler immediate feedback on products and marketing. Since the Dodge brand is currently heavily tilted toward the male side of the spectrum, one of the first panels convened will be a group of young female Dodge customers in an attempt to broaden that brand's demographic.

Here's why I don't believe this idea will work: when Chrysler has been at its best, it has had polarizing products. The 1994 Ram pickup - one of Chrysler's biggest hits of the past 15 years - eschewed the conservative style of its virtually ignored predecessor and established Dodge's pickups as the toughest-looking full-size pickups on the market. Many potential buyers hated them, but many loved them, and sales exploded. I don't know what kind of clinic work was done for the 1994 Ram, but I'm guessing that the objective was to actually have a polarizing style, rather than something benign that most folks found inoffensive (and also unexciting).

Think of another, more recent, Chrysler product hit: the 300 sedan. Again, polarizing styling, not attempting to be all things to all people. Ironically, compare the Chrysler 300 with the Ford Five Hundred, which competes for many of the same customers and was launched at nearly the same time. The Five Hundred was a handsome automobile, but its Novacain-influenced styling didn't get anyone's blood flowing. Nobody said the car was ugly, but few people wanted to buy a giant, underpowered version of the Audi A6.

On top of these examples, I recall Ed Welburn, GM's VP for global design speaking about the well-received Cadillac CTS Coupe Concept. He said that the car was never shown to customers in clinics; consequently, the car was not neutered and was shown to the public exactly as its designers intended. Some people who saw the car felt that the decklid was too short, or some other part needed work, but the overall reaction was positive.

The bottom line is, while soliciting customer feedback is important, many marketing people will tell you that the consumer has no idea what he wants - especially when you ask him.

Read more!

Toyota May Have Actually Beaten GM in 2007 Sales

By Chris Haak

01.25.2008

Autosavant - and basically every other media outlet - first reported on Wednesday that Toyota and GM had sold almost an identical number of new vehicles in 2007. That number was 9.37 million (for GM, it was specifically 9,369,524, and for Toyota, it was 9.37 million units). Since GM's figure rounded up to 9.37 million units, both automakers appeared to be tied for the title of "world's largest automaker." What wasn't certain at the time was whether Toyota was also rounding up to 9.37 million as GM did, or if it was rounding down to 9.37 million.

Around 11:15 a.m. Wednesday, Reuters broke with news that an unnamed source inside Toyota pegged their number at a more precise 9.366 million, apparently giving the title to GM. Autosavant later updated the article linked above with this new information; the difference between the two figures, depending again on whether Toyota's number was more precise, was around 3,000 to 3,500 sales, or about 0.06%.

Twenty four hours later, however, Automotive News broke with the headline, "We call it: Toyota topped GM in 2007." They went on to explain that GM was counting Wuling-branded vehicles sold in China and manufactured by its joint venture with SAIC, called SAIC-GM-Wuling Automobile Co. The problem with GM including these Wuling vehicles in its global total is that GM only owns 34% of the company, while SAIC (which stands for Shanghai Automotive Industry Corp.) owns 50.1%. Automotive News stated that industry practice is to exclude sales figures for only majority-owned subsidiaries, so it deducted the 516,435 units of Wuling sales from GM's total to arrive at a new figure of 8,885,599 vehicles. This is the same counting treatment that Ford gets for Mazda; Ford owns 33.4% of Mazda, so Mazda sales are not counted in Ford's global sales total.

Clearly, this makes a large difference in the quest for global bragging rights. Though both companies play down the importance of being #1, both companies also surely would like to hold the title.

I have no problem with the logic employed by Automotive News except that Toyota has not released its detailed 2007 sales number (nor does it expect to for another month or so), and I don't see how AN can be sure that Toyota is excluding any non-Toyota-branded vehicles made in joint ventures. I am not aware of any such ventures, but there may be some.

As of today, though, it sounds like there's a new #1 in the race for global automotive supremacy. Will it last for 76 years as GM's reign did? Will GM take back the title, or will Volkswagen swoop in and take it, as they hope? Time will tell.

Read more!

Lifan 3-Series is a Chinese Mini Cooper Knockoff

By Chris Haak

01.24.2008

Earlier this week, Chinese automaker Lifan showed its 3-Series sedan to assembled media. While the name would make one think that the vehicle is a clone of the BMW 3-Series, in fact, it's a clone of a different product in BMW's portfolio: The Mini Cooper.

Lifan has added its own twist to the Mini Cooper, however, by messing up the proportions in the front end and adding two more doors. It will reach Chinese consumers in the first half of the year; no word on whether they'd dare to try selling it in Europe, where it would meet legal objections similar to those faced by Shuanghuan when it attempted to show its Noble Smart ForTwo knockoff at the Frankfurt auto show a few months ago.

Thanks to CarScoop for the photos and information on this latest example of the Chinese disregard for intellectual property rights.

Read more!

Wal-Mart May Sell Hybrids for "Major Companies" - Chinese Ones?

By Chris Haak

01.24.2008

According to Bloomberg this morning, Wal-Mart Chief Executive Lee Scott gave a speech in Kansas City to store managers yesterday in which he has discussed selling gasoline-electric hybrid cars and plug-in automobiles at the company's stores.

Scott was deliberately vague about which companies he had discussed this with, using the term "major companies." He was also noncommittal about when or if it would actually happen, saying, "Maybe there isn't room for Wal-Mart in this right now, but something tells me that there may be some role for us in the future."

Considering that Wal-Mart is the #1 importer of Chinese goods in the US, and there is political opposition to selling Chinese cars in the US right now, it's not a huge leap of logic to assume that Mr. Scott is talking with Chinese automakers with aspirations of selling vehicles in the US market. It's also no surprise that, with the sorry displays put on by the Chinese automakers in Detroit last week and in crash tests posted to YouTube over the past few years, that he might be hesitant to name the companies, or even the country the companies are headquartered in.

Of course, I'm only speculating. In most cases, negotiations with automakers would be confidential until they are complete, so maybe he's talking with someone like Toyota. But would Toyota - or any automaker currently in the US - really want their marketing messages tied to the low-prices-at-any-cost marketing message that Wal-Mart offers? Also, state franchise laws would probably make it difficult, if not impossible, for manufacturers with an existing dealer presence in those states to sell vehicles at Wal-Mart stores.

I've heard whispers before that Wal-Mart would be the beach head by which Chinese automakers enter the US market. Nothing is confirmed at this point, of course, but it would not surprise me in the least to see this manifest itself as a reality over the next few years.

Read more!

Volkswagen's US Production Plans Take Shape

By Chris Haak

01.24.2008

As discussed earlier, Volkswagen has some ambitious US sales goals and wants to surpass both GM and Toyota as the world's largest automaker by 2018. However, the dollar's weakness relative to the Euro (or the Euro's strength relative to the dollar, as the case may be) makes it extremely cost prohibitive to sell European-built vehicles in the US. The fact that these are not luxury cars with the typical luxury car profit margins makes Volkswagen's situation even more difficult.

Now, VW doesn't build all of its cars in Germany - in fact, it builds Volkswagen New Beetle, New Beetle cabrio and Jetta in Mexico for US sales - models that make up 56% of its sales in the US. But some mainstream cars like the Rabbit, GTI/R32, and Passat - plus the Touareg SUV - are built exclusively in Germany for US sales, which makes their value proposition against Asian and domestic competition questionable. Sure, German engineering is nice to have, but is it worth paying 10%+ more for a Volkswagen with questionable quality than a comparable Chevy, Ford, Honda, or Toyota?

Consequently, VW is faced with a handful of choices. They could de-content their German-built vehicles, but that would go counter to their "affordable premium vehicles" marketing message. Another option would be to expand their production in Mexico, but VW of America CEO Stefan Jacoby said that the factory in Puebla, Mexico "has come to its limit" and will not be further expanded.

That leaves the option of building a new assembly plant in the US (assuming VW would not consider building a plant in a low-cost country for US sales). Since there is already a significant German supplier and auto manufacturing base in the US South (and VW has confirmed that it will build a new plant - not where specifically, but that it would be somewhere in the Eastern time zone), and rumors are that VW has scouted sites in North Carolina, South Carolina, and Georgia, it seems likely that their new plant will be in one of those states. The new assembly plant will produce up to 250,000 units per year.

Mr. Jacoby announced today that Volkswagen is also planning to build engine and transmission plants in North America to support the new plant. He also added that VW will announce the site selection for its plant within six months. Mr. Jacoby said in Detroit last week that the new plant would likely produce the core products for the US lineup - which means the Passat (currently built in Europe), the Tiguan small crossover (also currently built in Europe), and a new future crossover. Basically, they want to produce as much of their US sales volume as they can in the US or Mexico to avoid the strong Euro/weak dollar problem.

The result of increased US production will lower the price premium charged for products like the Passat from the current 10% over rivals' prices to 5% instead.

Read more!

Nissan Cube Coming to US

By Chris Haak

01.23.2008

The Nissan Cube, a small, boxy car similar to the original Scion xB in shape and concept, will be coming to the US market according to Nissan Motor Co. Ltd. global design director Shiro Nakamura. The Cube has been sold in Japan since 1998.

The company, however, has not made an official announcement on the Cube's impending arrival. Nissan had been studying whether to bring it to the US for at least two years, following the success of the Scion xB, but didn't move very quickly because it didn't have the urgent need to lower its buyers' median age that Toyota did (Nissan's age demographics skew much younger than many of its competitors do).

Personally, I prefer the looks of the Cube to the original xB, as its shapes (such as the rounded corners of the windows) are more interesting. Between the Cube and the current xB, it's no contest against that vehicle which so frustratingly deviated from its original bantamweight version. It will be interesting to see how well the vehicle does, as it shares nothing visible but the chrome Nissan logo on the grille with any other Nissans sold in the US. Hopefully Nissan will sell the Cube in its original form to US buyers and not sell a fattened-up, bloated version of it. If they do, perhaps fans of the original Scion xB will buy these instead of the new xB.

Read more!

2007 Was a Brutal Year for Big Truck Sales

By Chris Haak

01.23.2008

New government emission standards in effect for diesel engines beginning in 2007 made 2006 a decent year for medium- and heavy-duty (class 4-8) truck sales as trucking companies rushed to beat the price increases, which added $7,000 to $12,000 to the price of a new truck purchased in 2007. As a result, 2006 large truck sales were up 8.4% over 2005's levels. Basically, trucking companies pushed their purchasing plans forward to beat the price increases.

The predictable result for 2007 was an absolutely brutal year for every heavy truck manufacturer. Overall, the segment was down a whopping 31.4%. Ford was the only brand that posted "only" a single digit sales loss (down 6.4%). The shakeup also allowed Ford to leap from #3 to #1 in medium- and heavy-duty truck sales. In 2006, the top three were:

Freightliner: 125,041
International: 115,187
Ford: 100,434

For 2007, Ford jumped to the top of the list:

Ford: 94,003
Freightliner: 75,791
International: 69,943

Worst hit were the largest trucks, the Class 8 tractors, which fell 46.8%. Also, this is likely the reason that Ford jumped in front, as Ford does not sell Class 8 trucks and more than half of its sales were Class 4 trucks. In contrast, Freightliner's Class 8 sales made up 49% of its total sales, which is why their overall large truck sales results took more of a beating.

It will be interesting to see how results for 2008 compare with 2007's depressed results. I could foresee a slight gain, with larger sales increases coming in later years as trucking companies are forced to replace their fleets and pay for the additional emission controls.

Other than a possible recession slowing the economy, another possible ongoing hindrance to new large truck sales could be the rebuilding programs that some truck manufacturers offer. Manufacturers will rebuild a tired, old truck - keeping some key components such as the frame - so that it's still technically an old truck and not subject to the more strict emission regulations. In other words, we may be seeing more "re-tread trucks" to go along with their "re-tread" tires in coming years.

Read more!

Insure.com's Most and Least Expensive 2008 Vehicles to Insure

By Chris Haak

01.22.2008

Insure.com, a website that offers consumer information as well as acting as a broker with insurance companies, has released a list of the most- and least-expensive mainstream 2008 car models to insure.

Their methodology was to take the 20 top selling vehicles as of May 2007 and get insurance quotes for three different cities (one on each coast and one in the Midwest) from four different insurance companies in each city. The insurance cost among these 12 data points was then averaged to determine the average insurance cost per model. Insure.com then came up with two lists - the ten most expensive and the ten least expensive (both among the top 20 sellers). All of the quotes requested were for a single male driver, age 40, who owns his own home, has a bachelor's degree and no accidents or driving convictions, and works as a hospital administrator five miles from his home. Policy limits quoted were $100,000 per person and $300,000 per accident for bodily injury and $50,000 for property damage. The hypothetical policies have a $500 deductible and "no fault" insurance was chosen were possible.

The ten most expensive 2008 vehicles to insure are:

1. Dodge Ram Pickup
2. Chevrolet Silverado C/K Pickup
3. Toyota Prius
4. Honda Accord
5. Nissan Altima
6. Toyota Corolla
7. Ford Focus
8. Chevrolet Cobalt
9. Honda CR-V
10. Dodge Caravan

The ten least expensive 2008 vehicles to insure are:

1. Chrysler Town & Country
2. Ford Escape
3. GMC Sierra Pickup
4. Chevrolet Impala
5. Ford Econoline Club Wagon
6. Ford Fusion
7. Ford F-Series Pickup
8. Honda Civic
9. Toyota Camry
10. Toyota RAV4

According to the site, "Vehicles can land on the most expensive list for numerous reasons. They may be targets of theft, which can increase comprehensive premiums for all owners of that model; they may have high repair costs, which can increase collision premiums; or passengers may suffer more injuries in accidents, which can affect personal injury protection premiums."

I wonder if typical driver demographics play a role in insurance rates, because otherwise I'd assume that a Chevrolet Silverado (second most expensive to insure) would have very similar theft rates, passenger protection capabilities, and repair costs to a GMC Sierra (third least expensive to insure). Looking into details of the report, the Silverado has "substantially worse than average" losses for comprehensive claims, while the Sierra has "better than average" collision claims and "substantially better than average" personal injury protection, medical payment, and bodily injury liability.

The Dodge Caravan and Chrysler Town & Country both made the least expensive list, and are obviously very similar vehicles, but the Town & Country was the #1 least expensive while the Caravan was only the #10 least expensive (or, #11 most expensive).

The report also states that many consumers do not consider insurance costs at all when making purchase decisions, and only call their agent after the purchase is complete to transfer the policy and learn what the new rate will be. This has been true for me in large part; moving from an SUV to a minivan last month, I assumed that our rates would decrease, but it turned out that they actually went up by a few dollars.

My biggest critique about this list is that it's really omitting data on a LOT of vehicles. By restricting it to the top 20 selling vehicles, they are omitting data from more than half of the new vehicle market. Many people don't want to drive the same car that everyone else drives and prefer something less mainstream.

The lesson to take from this is that it pays to call your insurance agent before signing the dotted line on a car deal, as for some individuals the insurance premium can add a significant expense to the monthly tab for owning or leasing a new car. It's something I plan to do next time I buy another car, and is probably just as important as checking reliability statistics and current deals on the car that you want to buy.

Read more!

Lincoln MKT Concept Could Foreshadow Future Large Crossover

By Chris Haak

01.16.2008

Monday morning in Detroit at the North American International Auto Show, Lincoln revealed its MKT crossover concept. (Yes, another crossover introduction at the auto show!) The MKT is based on the architecture of the Ford Flex, but instead of the Flex's intentional boxiness, the MKT uses swoopy styling. According to Peter Horbury, executive director of Design, The Americas, "We envisioned this concept as a modern grand tourer, really a Learjet of the road."

The concept MKT seats only four, but has a cavernous cargo area and those four seats are very large (called "executive size" by Ford). The second-row seats fully recline and have heated and cooled thigh supports that deploy from under the seats. Were the MKT to go into production, it would almost certainly add a third row seat and more "pedestrian" first and second row seats. Ford confirmed that the MKT does have the capability to add a third row in a production model if it were to be approved for production, which is logical since it's based on the large three-row Ford Flex's platform.

The MKT concept's powertrain consists of a 3.5 liter EcoBoost (twin turbo) V6 that produces an estimated 415 horsepower and 400 lb-ft of torque on premium fuel or E85 and a six-speed automatic transmission. The power and torque numbers for this engine are, of course, a little high as concept vehicles tend to be, but if there were to be a production MKT, its EcoBoost engine would likely be close in output to the one that will appear in the MKS sedan's in a year or so. The MKS sedan's EcoBoost engine will produce 340 horsepower and 340 lb-ft of torque, which is still pretty good.

Of course, in spite of being a large vehicle, the MKT would have fallen out of the pattern for concept cars in 2008 if it didn't have sustainable, ecologically friendly materials used throughout the vehicle, and in its interior specifically.

I really believe that Lincoln will eventually produce the MKT, because in a world of 35 mpg CAFE standards, the V8 body on frame Expedition's days may be numbered. The MKT could also be a potential replacement for the very old Town Car in livery service, since it will be very spacious and comfortable, plus will probably be more fuel efficient than the old V8-powered Town Car. Now, if only they could fix its name; literally every time I see 'MKT' I think of "market," and I'm sure that Ford wants their crossover's name to evoke images of two couples going to the symphony rather than someone going to the MKT - I mean market - in the MKT.

Read more!

Cadillac Surprises Us With a CTS Coupe Concept

By Chris Haak

01.15.2008

The day after I mused about a lack of surprises at the auto show in my article about the Audi R8 V12 TDI, GM managed to keep a concept vehicle introduction under wraps until the vehicle rolled onto the stage. That vehicle was the Cadillac CTS Coupe concept.

Clearly taking a page from the styling that was implemented to critical and consumer acclaim in the 2008 CTS sedan, but adding a far more aggressive rear end treatment, shortened trunk, and sloped backlight, the CTS Coupe stayed close enough to its roots so that everyone knew what it was, yet also clearly moved the the needle further.

The car looked great in person. Its styling appears to be more polarizing than the sedan's. Nearly all of the negative comments I heard about the car concern its rear end treatment, which in terms of proportion appears to be closer to the look of a fastback rather than a traditional Cadillac shape. My first impression of the car was that the rear backlight was too aggressive and the trunklid was too short, but I understand why they needed to do something different with it rather than making a two door version of the CTS sedan, which would have required very little creativity.

Inside, the concept builds upon the CTS sedan's interior components, but with different, more exotic materials and a 2+2 layout rather than the traditional 2+3 layout of the sedan. The seats are covered with suede-like microfiber material with yellow ochre-colored inserts and yellow ochre trim throughout the rest of the interior.

The CTS Coupe is powered by GM's 3.6 liter V6 but is capable of handling the 2.9 liter V6 turbodiesel that will be fitted to the CTS sedan for international customers. The diesel will deliver approximately 250 horsepower and 406 lb-ft of torque. It hasn't been confirmed as a future engine choice in the US, but I wouldn't be surprised to see it at some point.

GM made no commitment to whether the CTS Coupe will see production, but insiders have speculated that the car will see production, and the production version will look very similar to this concept.

You can view GM's full press release about the Cadillac CTS Coupe Concept here.

Read more!

Toyota Venza "Crossover Sedan" Debuts in Detroit

By Chris Haak

01.15.2008

Yesterday afternoon, Toyota pulled the wraps off of its latest crossover (to be added to the ranks of the Highlander and RAV4, plus the Lexus RX350), called the Venza.

Like the Highlander, the Venza is based on the Camry's platform, but as the Highlander has evolved from little more than a tall Camry wagon in its first generation into a larger, more SUV-styled vehicle in its second (and current) generation, there was an opportunity for a stylish, five-passenger crossover that combined many of the comfort and luxury features (as well as the driving experience) of a traditional sedan with the ride height and extra space of an SUV.

The Venza will be offered in only one trim level - well-equipped - and is geared toward active boomers and young couples with small families. It will be available with both a 268 horsepower 3.5 liter V6 or a 2.7 liter four cylinder, and in front- or all-wheel drive. Seven airbags and the full complement of safety features are all standard, and a panoramic sunroof (the first offered by Toyota) is an option.

During the press conference at the Venza's introduction, Toyota claimed that the Venza was a crossover sedan that was defining a new segment of the crossover market. I have several issues with this statement; first, the Venza is not a sedan, which most people would define as a vehicle with four doors and a notchback roofline (i.e., not a hatchback). In the crossover segment, the closest thing to a sedan is probably the BMW X6, which still has a hatchback cargo door rather than a trunklid. Second, the Venza is not breaking new ground, but just joining the Nissan Murano in the luxury-focused, carlike section of the crossover market, which the Murano established in 2003. Even Toyota's own Lexus RX350 (on the market since 1999) occupies a similar niche, although when I asked Irv Miller, Group Vice President, Corporate Communications if they were afraid of the Venza affecting RX sales, he said that Lexus buyers are a different demographic than their Venza target market and they were not concerned.

Blame for all of the confusion about what category vehicles fall into should fall squarely on the shoulders of the manufacturers who first were afraid to call a crossover an "SUV," and now are afraid to call a crossover a "crossover," because nearly everyone else is selling them as well.

Also, when another journalist asked Mr. Miller if Toyota had any plans to offer a hybrid Venza, he smiled and said that it was under study, but he wouldn't be surprised to see it, though nothing was confirmed. When asked if there would be a hybrid RAV4, he was decidedly less candid. If I'm reading between the lines, it tells me that Toyota is seriously considering a hybrid Venza in the future, but not giving much consideration to a hybrid RAV4.

I believe that Toyota has a nice vehicle in the Venza - to me, it sort of looks like an updated RX350 with styling cues (particularly the front end) lifted from the Avalon sedan.

The Venza will go on sale in late 2008.

Read more!

Dodge Introduces its 2009 Ram Pickup

By Chris Haak

01.15.2008

Ford wasn't the only company to introduce an all-new full-size pickup at the NAIAS in Detroit this week: their crosstown rivals, Chrysler LLC, introduced an new 2009 Dodge Ram. Unlike in the 1970s and 80s, when Ford, Chrysler, and GM introduced all-new pickups roughly every 10-15 years, the segment is now so competitive and so critical to the financial health of these automakers that they are working hard to keep up with, and sometimes surpass, the competition much more frequently. By the 2009 model year when the new Ford and Dodge hit the streets, every entry in this segment will be completely new or extensively revised in the past two model years (the Chevrolet Silverado, GMC Sierra, and Toyota Tundra in 2007 and the Ford and Dodge in 2009).

Dodge has come up with some really clever innovations in an attempt to make a compelling argument to buyers to choose their truck over the competition's, as well as addressing criticisms that had been levied on its old Ram. Specifically, the outgoing Ram model had been criticized for its interior design and material quality (particularly after GM's 2007 Silverado and Sierra raised the bar in terms of pickup truck interior design), the old Ram's ride quality, and its fuel economy.

Among the more interesting tricks that Dodge added to the Ram are the optional RamBoxes, which are on the tops of the bed sides. They are waterproof, lockable, drainable storage boxes large enough to hold a set of golf clubs or up to 10 cases of 12 ounce beverages, for a total of 8.6 cubic feet of cargo space. The problem is, if you have a tonneau cover or cap on your truck, the RamBox is not usable.

Dodge has developed a coil spring, multilink rear suspension that is unique in the pickup market. Of course, it still uses a solid rear axle, but Dodge claims that the new suspension provides "unexpected" ride and handling capabilities for a pickup truck.

Inside the 2009 ram, interior materials have been upgraded and the design spiffed up. The Ram with the Lariat trim level may be the best interior I have ever seen in a Chrysler vehicle. I'm still not crazy about the overly square design that Chrysler's interior designers seem to favor, but it's a large leap from where it came. The door panels of the Laramie (top of the line) model have faux wood/chrome inserts, but are still rubberized plastic that afflicts so many of Chrysler's other products.

Under the hood, the 5.7 liter Hemi gets a power boost to 380 horsepower and 404 lb-ft of torque, while increasing fuel economy approximately 4%. Also, a light duty clean diesel will be offered after 2009, and a two-mode hybrid (co-developed with GM and BMW) will be available in the 2010 model year.

Having checked out the 2009 Ram in person in Detroit yesterday, I was impressed by it, particularly in the higher trim levels. Even the Ram Sport has stitched pleather on the upper dash panel similar to the Cadillac CTS, and it really does look great. The exterior styling retains the classic Ram look, but is cleaner, more modern, and more sophisticated. The front end angles back at the bottom of the grille similar to the Dodge Charger, and the truck is the most aerodynamic truck in its segment. I think Dodge pulled off the styling very well and now sells the best looking full-size pickup; there's only so much that can be done with the basic template, after all.

The bottom line is that most people in the market for this type of vehicle are very brand loyal. The Ford guys will buy Ford trucks, the Chevy guys will buy Chevy trucks, etc. I really don't think a buyer could go wrong with any choice in tihs segment. However, for buyers who aren't brand loyal, the Ram certainly merits consideration. It goes on sale this fall.

Read more!

Audi Shows R8 V12 TDI Diesel Supercar Concept

By Chris Haak

01.13.2008

It's getting to the point where vehicles revealed at auto shows aren't much of a surprise anymore. With embargo breaks, companies issuing press releases before the formal introduction, plus the old fashioned rumor mill all conspiring to ruin the surprise factor, few vehicles make it to the turntable without being seen by the world first.

To that end, few were surprised that Audi showed a V12 TDI version of its R8 sports car in Detroit today. In fact, some websites over the past few days obtained leaked video footage of the R8 V12 TDI. Although I wasn't surprised to see the car itself, I was surprised that, given the reputation of diesels in the US, Audi chose to drive the car onto the stage amidst an excessive amount of stage smoke. That irony may have been lost on Audi's German management, but it wasn't on me.

All of this doesn't take anything away from the fact that the R8 V12 TDI is an impressive piece of machinery. I've never been hugely impressed by the "Regular" R8, if only because it looked a little goofy in its profile (especially when equipped with the contrasting color side panel) and because its nose appeared to be too small or too low for my taste. Still, there wasn't much not to like about a sports car priced just over $100,000 based on its corporate cousin the Lamborghini Gallardo.

Audi has a lot of experience with diesel powertrains, and in fact has had two years of very successful LeMans campaigns with its diesel-powered R10 race cars. Those who have seen the R10 race cars in action have spoken of how surreal it was to watch race cars zip by at breakneck speeds, unaccompanied by the normal screaming engine sounds.

The R8 V12 TDI Concept builds on the pedigree of Audi's LeMans winning race cars with a new concept in road-going sports cars: putting a diesel engine under the rear enigne cover. In this Audi's case, it's a huge and hugely powerful diesel; it displaces 6.0 liters and produces 500 horsepower and 738 lb-ft of torque. That's 72 more lb-ft of torque than the most powerful light duty pickup sold in the US, the GM 6.6 liter Duramax diesel, produces (that engine produces 660 lb-ft), yet the R8 is a much leaner, lighter machine.

As an Audi, the car is, of course, equipped with Quattro all wheel drive and is capable of a 4.2 second 0-62 mph sprint and a top speed in excess of 186 miles per hour (300 km/h). Peak torque in the TDI V12 is reached at just 1,750 RPMs. Audi refers to its acceleration as "effortless," and I see no reason to doubt that claim.

The Audi R8 V12 TDI's fuel consumption is said to be approximately 24 miles per gallon, but Audi executives did not specify whether that was a highway mileage figure or a combined figure. Only the Chevrolet Corvette Z06, which actually has similar performance, can boast of a highway mileage figure in this vicinity (the Z06 is rated at 24 miles per gallon on the highway, but far less in the city cycle).

I don't doubt that Audi already has production plans in place for this vehicle. It would be the ultimate expression of diesel technology in a carbon conscious world. Rudolph Diesel would surely be impressed with what the Audi engineers were able to build in this car.

Read more!

Mitsubishi Reveals Concept-RA Diesel Sports Coupe

By Chris Haak

01.13.2008

This evening in Detroit at the North American International Auto Show, Mitsubishi revealed two new vehicles - one a production model and one a concept.

The production model was the Lancer Ralliart, which slots perfectly in the lineup between the Lancer GTS and the no-holds-barred Lancer Evolution. It's a pretty nice car that sounds great on paper - a twin-clutch transmission shared with the Evolution, a full-time 4WD drivetrain, and a turbocharged 2.0 liter DOHC four cylinder developing an estimated 235 horsepower and 310 lb-ft of torque.

Next, Mitsubishi revealed the Concept-RA. It's hard to know what other journalists are thinking when they first see a new vehicle, but those around me seemed to be pretty impressed by this one. In the presentation, the Mitsubishi executives joked about the fact that nearly every manufacturer had some sort of "green" or "environmental responsibility" message to share, so they were no exception. The Concept-RA (which I believe foreshadows the next-generation Eclipse) is powered by a clean (Tier 2 Bin 5) 2.2 liter turbo diesel that produces an estimated 201 horsepower and 310 lb-ft of torque, while still sipping the oily stuff at over 40 miles per gallon. Although Mitsubishi argues that sports car drivers love torque, I don't think they generally think of sports cars as the ideal application of diesel power, though Audi may also have something to say about that.

Other than the engine, other mechanical goodies include many of the complex, and very good, parts from the Lancer Evolution such as its all wheel drive system (which includes the acronym soup of ACD (Active Center Differential), AYC (Active Yaw Control), and ASC (Active Stability Control).

The styling of this car is almost perfect. I've always found Mitsubishis to be either a too avant-garde (such as the Galant, Endeavor, or the old Eclipse), too plain (such as the old Lancer), too derivative (such as the current Lancer's Acura TL-like profile), or too bulbous (such as the current Eclipse). The Concept-RA, however, just struck me as a car that had nearly the perfect shape for a sporty coupe. It looked like a Mitsubishi, but without the weirdness.

Mitsubishi officials made no comments about the production likelihood of the Concept-RA or what model it hints at, but the styling language to me clearly told me that it's a future Eclipse in one form or another.

Audi has made a diesel supercar - will Mitsubishi take the ball and become the first purveyor of a diesel sporty car? Although the Galant and Outlander had great years in 2007, Mitsubishi could probably use a game changing product like a diesel sporty coupe to carve a new niche for itself.

Read more!

Honda Reveals 2009 Pilot Prototype in Detroit

By Chris Haak

01.13.2008

Honda today revealed a "prototype" of its 2009 Pilot crossover. As I noted in this post a few days ago, the crossover segment is red hot (up over 20% in 2007's otherwise shrinking market), so the competition is intense. Honda's CR-V was the best-selling SUV or crossover in 2007, and I'm sure Honda would like to replicate some of that success in its larger Pilot crossover.

To that end, the prototype 2009 Pilot that Honda revealed today looked to be about 95% production ready. I could visualize some of the smaller details such as interior materials and switches changing in the production model, but it really looked to be both very close to production-ready, and very much along the lines of Honda's current design direction. That is, somewhat underwhelming. Or, to put it another way, offensively inoffensive. In my opinion, Honda played it too conservatively with the re-done Pilot. Other than attractive fender bulgs, it's nearly slab sided. It looks like an overgrown Jeep Liberty, which is itself a shrunken Jeep Commander.

Honda apparently doesn't see it this way. John Mendel, executive vice president of American Honda, said that the new Pilot will bear some bolder hallmarks, including "a strong front end," "crisp character" lines and "a confident stance." Sorry, but the thing is two boxes on wheels.

I really doubt, however, that people buy the Honda Pilot for its looks. It is relatively fuel efficient for its size, as well as being very spacious inside (with seating for eight adults in a pinch). The 2009 model will build upon both of those traits; it will be powered by a V6 engine that includes the latest version of Honda's VCM (Variable Cylinder Management) which allows the engine to run on 3-, 4-, or 6-cylinder mode depending on need, just like the 2008 Accord's V6 allows. The current Pilot's engine's older VCM allows only 3- or 6- cylinder mode. Inside, interior packaging (always a Honda hallmark) has been improved further and the third row has larger dimensions in most key areas, allowing an "average sized adult" to have adequate knee room in the third row for the first time. Since I'm about six inches taller than "average size," I assume that means I won't fit, but that's OK, as I don't plan to ride in the third row of a Pilot anytime soon.

Honda did not say so, but I would expect the 2009 Honda Pilot to go on sale in Fall 2008. Since it will be more spacious inside, have a "bolder" appearance, probably get fuel economy, and still drive as well as any other Honda, it should exceed the Pilot's sales of 117,146 in 2007.

Read more!

Tata Reveals Its Nano, A $2,500 New Car

By Chris Haak

01.10.2008

India's largest automaker (and future owner of Jaguar and Land Rover) Tata has come through in its pledge to reveal a $2,500 "people's car."

Clearly, you don't get a lot of luxury or power for $2,500. The car is powered by a 33 horsepower, 624 cc (0.6 liter) two cylinder gasoline engine, connected to a CVT. It has a top speed of 104-105 km/h (65 mph). The car will seat five people, and is designed to bridge the gap between motorcycles and traditional minicars - which are larger than the Nano.

Ratan Tata, chairman of Tata Group, said at the car's unveiling in India earlier today that he was struck by how many families were traveling unsafely aboard motorized scooters. "I'd go along the road and see the father driving with a kid sitting in front of him on the tank and the wife behind holding a baby. And I'd think 'Oh, my God, that's so dangerous.' It just got to me."

Tata said that the initial concept for the project was a soft-top rural vehicle, but the end result is a conventional automobile that meets international offset and side-impact tests. Tata believes that it can earn a profit on the Nano, and part of its business plan is to offer better-equipped, higher-priced versions elsewhere in the world. The car will be sold in India only for its first two years, and will later be sold in other developing markets such as Africa, Latin America, and Southeast Asia. Later, better-equipped versions sold in Europe may cost three times as much and include larger engines or diesels, but a $7,500 new car is still very affordable, particularly in a developed market.

The Nano has the potential to revolutionize the global automobile industry. Tata has proven that cars don't need to weigh two tons to meet crash-test standards, and also proven that a new car doesn't have to cost $10,000 and up to get newly mobile families on the road. I can't wait to see what Renault's response is, since they have also announced plans for a car for developing markets that costs about half of what its Logan does. Also, will the lessons learned by Tata in lowering costs be applied elsewhere in the auto industry, pushing down prices for mainstream vehicles - or even Jaguar and Land Rover? It will be interesting to watch.

Read more!

Ford Confirms It's Developing New RWD Cars

By Chris Haak

01.10.2008

In a move that sounds very similar to the way GM developed its full size RWD Zeta platform for global markets, auto industry publication Automotive News reported today Ford company leaders confirmed that Ford is developing new rear-wheel drive cars for its Ford and Lincoln brands in the US.

Ford's plans, which haven't yet been fully revealed, call for the company's Australian operations to develop a new global rear-wheel-drive architecture. This new platform would likely support production versions of well-received concepts such as the Ford Interceptor and the Lincoln MKR, both of which I saw in person and were very attractive, desirable vehicles. The platform would also likely support the eventual replacement for the old-as-dirt Crown Victoria, Grand Marquis, and Town Car. If it's as flexible as GM's new Zeta architcture is, it could also underpin the next all-new Mustang.

Unlike GM, which has consolidated all production of its large RWD vehicles in Australia (until Camaro production begins in Oshawa), Ford said that there are many reasons why not to produce all of their vehicles in Australia - namely, exchange rates and freight costs to go halfway around the world.

In the same week that GM canceled plans for a new DOHC V8 due to CAFE concerns, Ford is pushing ahead with a new large car architecture. This move shows not only that there may be life after 35 mpg CAFE, but also that 2008 is going to be a bumpy year for the industry.

Read more!

A Stroll Through the 2007 US Sales Results

By Chris Haak

01.09.2008

Late last week, manufacturers released their December 2007 (and therefore final annual) sales results. Overall, the total US light vehicle market (cars and trucks up to class 3) was down 2.9% in December, as well as down 2.5% for all of 2007 compared to 2006. I'm a really numbers oriented person, so I enjoy perusing sales figures, especially when it's a nice, clean break at the end of a year.

Somewhat surprisingly, with the news of gas prices and the housing slowdown all over the Internet, light trucks were actually down less than cars - 1.9% versus 3.0%, respectively.

Overall, the US Big Three didn't have a great 2007. Each saw its sales fall: Chrysler LLC was down 3.1%, GM was down 11.8%, and Ford was down 6.0%. Meanwhile, the so-called Japanese Big Three (Toyota, Honda, and Nissan) showed a different story: Honda's sales were up 2.8%, Toyota's sales were up 3.1%, and Nissan's sales were up 4.8%. Detroit's total sales decline, in terms of actual units, was 651,562 vehicles for the year. The three large Japanese manufacturers saw their US sales increase by 169,474 vehicles for the year. So, where did the remaining 482,088 units go? Some were lost to the overall market decline (407,037 units) while some went to other brands, such as Mazda (up 27,324 units or 10.2%), Hyundai-Kia (up 22,660 units or 3.0%), and BMW Group (including Mini) (up 22,259 units or 7.1%).

Not only did compact and subcompact cars do well (more on that in a moment), but I also find it fascinating the way the opposite end of the automotive spectrum - super-rich luxury vehicles - did in 2008. Rolls-Royce (+5.7%), Bentley (+3.5%), Maybach (+6.8%), Maserati (+20.5%), Lamborghini (+12.3%), Ferrari (+4.7%) all saw sales increases. Something tells me that the wealthy individuals buying these vehicles are neither concerned about the housing slowdown nor the rising cost of gasoline.

And, about those small cars? The Honda Civic (+4.6%), Honda Fit (+102%), Toyota Yaris (+20.6%), Dodge Caliber (+9.6%), Jeep Compass (+112.6%), Chevrolet Aveo (+15.1%), Kia Rio (+17.5%), Hyundai Accent (+3.8%), Mazda3 (+27.4%), Mitsubishi Lancer (+35.4%), Subaru Imprezza (+12.6%), Suzuki SX4 (+37.0%), Mini Cooper (+7.3%), Nissan Versa (+260%), and VW Rabbit (+119.2%) are all small cars that saw sales gains. The few exceptions to this trend included the Toyota Corolla (-4.1%), the Nissan Sentra (-9.7%) and the Hyundai Elantra (-13.3%). The Corolla figures were compared to a strong 2006 (where the car was up 17% in its 5th model year) and the current model is about to be replaced. The Sentra's problem is that its fraternal competition, the Nissan Versa (widely acknowledged as a spacious subcompact) is up 57,399 units), and eating the Sentra's lunch (the Sentra was down 11,400 units).

So, if small cars were up, big cars were down, right? Not necessarily; the Dodge Charger was up 4.5%, the Volvo S80 was up 125.8%, and the Chevrolet Impala was up 7.3%.

Taking a pretty rough beating were body on frame SUVs, specifically midsize ones. Overall, that market was down 20.0%, and of the nine models in the segment, not one saw a sales increase, and the smallest decrease was the Toyota FJ Cruiser(down "only" 1.9%). Overall, the midsize body on frame SUV segment lost 141,044 sales from 2006 to 2007. Rounding out this category were the Isuzu Ascender (-39.3%), Mercury Mountaineer (-19.3%), GMC Envoy (-34.7%), Nissan Pathfinder (-13.8%), Nissan XTerra (-17.6%) Toyota 4Runner (-14.9%), Saab 9-7x (-9.2%) Ford Explorer (-23.1%), and Chevrolet TrailBlazer (-23.0%). It's interesting to see the Explorer's fall from grace - it was once one of the top selling vehicles in the US, with over 400,000 annual sales, but now Ford is only moving about a third of that volume (137,817 in 2007). My theory on the near-extinction of the traditional midsize SUV is that they don't do anyting particularly well. What I mean is, they get similar fuel economy to a full size body on frame SUV (for instance, a 2008 Pathfinder 4x4 V6 is rated 14/19, which is the same rating as the Chevrolet Suburban 4x4), they have much less passenger space than a similarly-sized crossover, and can't tow as much as a full-size SUV. So basically, the runup in gasoline prices has separated the people who actually need an SUV from those who bought one for image reasons. The people who need an SUV or large family hauler are either going to buy a full-size SUV (this segment was down 4.2% compared to 2006, and would have only gone down 2.7% if Toyota Sequoia sales hadn't tanked in anticipation of the new (ahem) larger model). Also, GMC Envoy sales likely suffered worse than TrailBlazer sales did because the Envoy has the Acadia in the next parking space offering better looks, better fuel economy, and better interior space and comfort. Chevy does not yet sell a large crossover to "compete" with its own TrailBlazer.

Other former midsize SUV buyers are moving to crossovers, which have much of the style, more passenger space given the exterior footprint, and are more fuel efficient. Want to know where those 400,000 Explorer sales went? The RAV4 (172,752) and CR-V (219,160) are the two top-selling crossovers, and combined sold 391,912 units. As a segment, crossovers generally did very well, including the Edge, MKX, Acadia, Outlook, RDX, MDX, RAV4, CR-V. Some crossovers lost sales, but those were generally models due for replacement or cancellation soon, such as the Murano, PT Cruiser, Torrent, Pilot, Equinox, Tucson, and Endeavor. Excluding models that weren't sold in 2006 such as the Mazda CX-9, Buick Enclave, and Jeep Patriot, as well as models sold in 2006 but not in 2007 such as the Buick Rendezvous, the segment was up about 20%, or 313,000 units. Not bad in a falling market!

Lastly, let's look at the largest segment of the market, though the one that had the most trouble at the end of the year. Toyota made a bold prediction when it launched the 2007 Tundra that its first year sales goal was 200,000 units. After the truck got off to a slow start, Toyota started increasing incentives and sales took off. The Tundra finished 2007 just 3,445 units shy of its goal (196,555), but up a whopping 57.9%. Even with that dramatic increase, the overall full size pickup market was down 3.0% compared to 2006, but without the Tundra, the segment would have gone down 6.6%. The Tundra's sales increase for 2007 in a declining market shows that it is taking sales away from the other trucks in its segment. Ford and Dodge are fighting back in 2008, however, and the 2009 F-150 and Ram, respectively, will be making their worldwide debuts this weekend in Detroit. Ford really needs the help; the F-series was down 13.2% in 2007, and down a whopping 22.0% in December 2007.

There are a million different ways to look at sales data, but the biggest takeaway is that we'll probably see a completely different picture a year from now when we repeat this exercise. Predictions of even higher gas prices and a declining US auto market could shake things up even more. Will crossovers continue their rise? Will consumers continue to flock to small cars? Stay tuned.

Read more!

GM Shows Cadillac Provoq Concept at CES

By Chris Haak

01.08.2008

Today, GM unveiled its Cadillac Provoq (pronounced 'provoke') concept small crossover vehicle at the annual Consumer Electronics Show in Las Vegas. The exterior styling of the vehicle is an extremely strong hint at what the upcoming BRX small crossover will look like in 2009 (sharing a platform with a future Saab, as well as being a distant relative of the more pedestrian Saturn Vue and Chevrolet Equinox/Pontiac Torrent twins).

The reason GM chose the CES rather than next week's Detroit Auto Show to reveal the Provoq is because the Provoq concept is powered by GM's new generation of fuel cell(unlike the production BRX, which will be powered by conventional powertrains). As GM's flagship brand, the company wanted Cadillac to be at the forefront of its technical innovation efforts.

My take? The Provoq looks to be an attractive vehicle, which carries on Cadillac's new design mojo, established recently with the 2008 CTS sedan. I really don't see Cadillac having any sort of E-Flex propulsion system (as the Chevy Volt and Provoq concepts have) anytime in the near future until its performance characteristics (specifically driving range - although GM says that the Provoq can travel 300 mile - acceleration performance, and driving feel) match or exceed those of a "normal" vehicle.

With regard to the Cadillac BRX crossover that the Provoq's design hints at, small luxury crossovers are a growing segment of the market. Competition will be intense for the BRX when it debuts - competition will include the Infiniti EX, Acura RDX, Mercedes GLK, and BMW X3, X5, and X6, among others. Lexus is also rumored to be working on a small sub-RX-sized crossover. If the production BRX looks anything like the Provoq, and performance, pricing, and quality are where they need to be, Cadillac should do fine with it. Meanwhile, let's leave the fuel cells and hydrogen propulsion to Chevy.

The full text of the press release can be found here, and is printed below:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
CADILLAC PROVOQ FUEL CELL CONCEPT DELIVERS CLEAN, PETROLEUM-FREE PERFORMANCE AND SIGNATURE DESIGN

LAS VEGAS – Cadillac unveils a new vision for the future of luxury transportation with the innovative Provoq fuel cell concept – a hydrogen fuel cell crossover vehicle that continues GM’s commitment to displace petroleum through advanced technology.

The Cadillac Provoq fuel cell concept is the latest example of GM’s groundbreaking E-Flex propulsion system, combining the new fifth-generation fuel cell system and a lithium-ion battery to produce an electrically driven vehicle that uses no petroleum and has no emission other than water. The concept’s fifth-generation fuel cell technology is half the size of its predecessor, yet it has been developed to produce more power and performance.

“Cadillac is a natural fit for GM’s next step in developing the E-Flex platform,” says Jim Taylor, Cadillac general manager. “Cadillac, at its very essence, is about premium luxury, design and technology, so it’s fitting that Cadillac would be propelled by the most elegant solution. This signals Cadillac’s intent to lead the industry with alternative-fuel technology.”

Fuel-cell variant of the E-Flex system
The concept can drive 300 miles (483 km) on a single fill of hydrogen – with 280 miles (450 km) from hydrogen and 20 miles (32 km) on pure, battery electric energy.

A pair of 10,000 psi (700 bar) composite storage tanks beneath the rear cargo floor hold 13.2 pounds (6 kg) of hydrogen to feed the fuel cell stack, located under the hood. There, hydrogen mixes with oxygen to generate electricity – up to 88 kW continuous power. A lithium-ion battery pack can store up to a total of 9kWh of electrical energy and also provides a peak of 60 kW of power for additional performance.

The electricity generated by the fuel cell is distributed to a 70 kW co-axial drive system for the front wheels and individual, 40 kW wheel hub motors on the rear wheels, giving the Cadillac Provoq its all-wheel-drive traction and great driving dynamics. Its 0-60 mph (approximately 100 km/h) speed of 8.5 seconds is a more than 30-percent improvement over the previous-generation fuel cell system and with instantaneous torque to the wheels, it feels even faster. Provoq has a top speed of 100 mph (160 km/h).

“This is a vision of what comes next – a fuel cell electric vehicle that delivers the driving characteristics Cadillac customers want and allowing them to do it without using a single drop of petroleum, while emitting only water vapor,” said Larry Burns, GM vice president for research and development. “This is proof that alternate fuels and advanced technologies create even greater opportunities to satisfy the luxury buyer.”

Key features
With sleek, signature Cadillac bodywork, the Provoq concept redefines luxury crossovers, offering uncompromising passenger and cargo space to match its performance and cruising range. Additional vehicle features include:

• Solar panel integrated in the roof to help power onboard accessories, such as the interior lights, audio system and more
• Brake-by-wire technology
• Front grille louvers that close at highway speed to enhance aerodynamics, and open at low speed to provide maximum cooling to the fuel cell stack

Purposefully dynamic design
The Provoq has a sleek, athletic shape that builds on the second generation of Cadillac’s design renaissance, led by the 2008 CTS, with dynamic and purposeful features that support the hydrogen fuel cell powertrain and contribute to the vehicle’s overall efficiency.
“All the people- and cargo-carrying capability customers expect in crossovers and SUVs is available in the Provoq, along with the premium attributes expected in a Cadillac,” said Ed Welburn, vice president, Global Design.

Highlights include:

• Active front grille, with grille louvers that open when the fuel cell stack requires cooling
• Full underbody aerodynamic cover
• Left- and right-hand charging ports incorporated in stylish front fender vents
• Flush door handles that feature push-to-release operation
• Wind tunnel-shaped outside mirrors with integral turn signals
• Center high-mounted rear stop lamp incorporated into full-width, wraparound spoiler
• Signature vertical taillamps with subtle fin design
• Side glass mounted flush with pillars
• Wheels with clear-covered space between the spokes, creating a sleeker profile while maintaining Cadillac’s signature bold wheel design
• Low-drag roof rack

“From the strong, shield grille and vertical headlamps to the crisp body lines, the Provoq is instantly recognizable as a contemporary Cadillac,” said Hoon Kim, exterior lead designer. “Like the new CTS, it is bold and expressive, but there is enhanced shape between the edges – it’s a new proportion for crossovers, with a fast, almost coupe-like rear.

“Everything about the vehicle reinforces the notion that great style and environmentally conscious transportation can go hand in hand,” said Kim. “We didn’t sacrifice proportion, stance or Cadillac’s iconic design cues; we used them to support the efficiency of the vehicle.

“They are the features customers expect,” he said. “The adaptability of the E-Flex architecture enabled the designers to create a great-looking vehicle, regardless of its alternative-fuel powertrain.”

Kim points to the fender-mounted charge ports as prime example. They allow overnight, plug-in charging that extends the driving range. The ports have a satin-chrome appearance that incorporates an amber light to indicate the system is charging and a green light to indicate when charging is completed.

“The ports are functional, but rather than hide them, they are design elements of the Provoq,” he said. “Sweeping body lines that culminate at the top and bottom edges of the ports suggest forward thrust, even when the vehicle is stationary.”

The vertical, neon-lit taillamps blend style with functionality, too, as their finned shape was designed to make the Provoq as aerodynamically efficient as possible.

Indeed, the Provoq has short overhangs and a sporty ride height that is complemented by large, 21-inch wheels.

The wheels are wrapped in custom Michelin tires incorporating Green-X technology. These low-rolling resistance tires feature a tread pattern that mimics the “H20” notation for water.

The tire designers and engineers at Michelin North America enthusiastically accepted GM’s challenge to create a custom low-rolling resistance tire to complement the energy efficiency and reduced environmental footprint of the Cadillac Provoq. During the past 15 years, the tire maker has developed four generations of Michelin green energy-saving tires, and the team’s no-compromises approach to the project helped reduce the Provoq’s overall fuel consumption without sacrificing road performance, grip and safety.

When used in conjunction with the other energy-efficient solutions featured on the Cadillac Provoq, the benefits of Michelin green energy-saving tires include:

• A reduction in the consumer’s overall cost of ownership
• An extended vehicle range through a more efficient use of on-board energy and its storage capacity
• A reduction of vehicle impact on the environment through lower CO 2 and particulate emissions.

Uncompromising interior
Like the exterior, the Provoq’s interior blends style with function. It seats five and incorporates the comfort, convenience and infotainment features Cadillac customers seek. Most importantly, the fuel cell powertrain does not intrude on passenger or cargo room.
The hydrogen fuel tanks are mounted beneath the cargo floor, with the storage batteries located at the center of the chassis. The fuel cell stack is located under the hood, giving the Provoq the interior layout of a conventional crossover – including a full cargo area and a 60/40-split folding rear seat.

“The interior is roomy, well-equipped and offers the space people want in a crossover,” said Matt Erdey, interior lead designer. “There are no compromises inside the Provoq to accommodate the fuel cell powertrain and fuel tanks – a factor that proves the technology and real-world feasibility are growing closer together.”

There may not be compromising reminders of the powertrain in the interior, but the Provoq carries the instantly identifiable hallmarks of a contemporary Cadillac interior, with an expressive, well-crafted design.

“It picks up the cues, refinement and attention to detail of the new CTS and takes them to the next level,” said Erdey. “A contrasting color scheme, extensive use of ambient lighting technology and elements such as cut-and-sewn, hand-wrapped leather with French seams are elements seen in current Cadillac models, but they are amplified in the Provoq. “

The interior has a contrasting, dark gray and light gray color scheme, with chrome and satin-chrome accents throughout. Ambient lighting extends across the instrument panel and into the door panels, as well as the foot wells, sills and under the seats.

A unique instrument cluster with large, reconfigurable LCD displays offers a multitude of vehicle information readouts, including fuel cell information and vehicle performance. Like the CTS, the Provoq has a prominent center stack that houses the audio and climate systems, as well as a navigation system that rises out of the top of the instrument panel. Also like the CTS, there is an integrated hard drive that stores navigation maps, thousands of songs and more.

Between the front bucket seats is a large center console with a fully enclosed storage compartment that is home to ports for USB-connected devices and other electronics. The console also has a cell phone holder with built-in Bluetooth and inductive charging. The compact shifting mechanism on the console uses shift-by-wire technology to engage the gears, resulting in more storage space within the console.

A variety of recycled and recyclable materials were used, as well. Highlights include:

• The headliner is wrapped in a fully recyclable soy-based material
• The carpet is made of recycled polyester and jute
• Leather used to cover the seats and instrumental panel is free of harmful chemicals
• Xorel material used on the door panels and instrument panel; treated to perform as a carbon-fiber-type material
• Chrome trim made with less-harmful materials

The earth-friendly interior components blend seamlessly with the more conventional materials inside the Provoq, enhancing the vehicle’s integrated, customer-focused environment. The same goes for the cargo area, which features an auxiliary power outlet and a load floor that is level with the hatch opening.

“The integration of the features and technology is remarkable,” said Erdey. “If you didn’t know there was a hydrogen fuel cell stack under the hood, you’d never know it was anything but a roomy, functional crossover.”
~~~~~~~~~~~~~~~~~~~~~~~~~

Read more!

Camaro Prototypes Caught; GM Declares "No More Camo!"

By Chris Haak

01.04.2008

Yesterday, KGP Photography caught a car carrier near the Arctic Circle containing several lightly-disguised Camaro prototypes. The transporter was unaccompanied and the photographer was able to take several detailed interior photos. Copyright restrictions prevent us from sharing those photos in this space, but you can see a nice gallery at Autoblog. The car appears to be remarkably close to the concept, including the design of the interior, which on the concept (pictured) hearkened back to the 1969's style, while incorporating some futuristic-looking elements as well.

Hours later, on GM's Fastlane blog, Chevrolet General Manager Ed Peper surprised everyone by showing a completely undisguised Camaro test mule, presumably at a proving ground racetrack. He said that Bob Lutz has ordered that the camo be removed from all pre-production Camaros "so further evaluations could be done for aerodynamics and cooling efficiency." Sure. But, whatever the reason, it's nice to see the Camaro in the flesh - at least its backside.

You can see when comparing the photo from the Fastlane Blog with this photo of the silver 2006 Camaro Concept that it has stayed remarkably close to concept. Not surprisingly, the height of the windows has grown to a more practical level, and the B-pillar has appeared, but the car seems to have much the same aura as did the highly-regarded concept.

I really hope for GM's sake that they aren't going overboard with the "oopsies" and leaks about the Camaro. I realize they want to keep excitement for this car at a high level, leading up to its production debut and on-sale date, but I really think the car runs a risk of being overexposed. While it already hearkens back to the 1969 model (not as egregiously as Dodge's Challenger does), GM is taking a risk that the Camaro - which will have been seen for about four years from concept to on-sale date - has the look of a four year old car when it hits dealerships. The exposure in the past summer's Transformers movie certainly didn't help with this problem, either. Apparently, GM doesn't see it as a problem. I've never heard of a manufacturer driving undisguised prototypes - without even stripes or disguised paint - in public areas to test aerodynamics and cooling. I believe they have supercomputers and wind tunnels for those reasons.

Whatever the motivation, here's the Camaro!

Read more!

35 mpg CAFE Claims Its First Victim

By Chris Haak

01.04.2008

GM announced that it has canceled its program to create a next-generation DOHC V8 engine family for its luxury cars. The engines, known as the "Ultra V8s," were to be built at the Tonawanda, NY plant and were architecturally related to the so-called 3.6 liter "high feature V6" family found in the Cadillac CTS, STS, SRX, and many other newer GM products. This architectural relationship would not only have shaved development time and costs, but also reduced production costs, while still resulting in a competitive engine. The Northstar is an expensive engine for GM to produce, as it is not related to any other engines in GM Powertrain's lineup.

The new engine, which was to be built in Tonawanda after GM announced a $300 million investment in the facility in January 2007, with production scheduled to begin in 2009, was to have been a replacement for the 16 year old Northstar (pictured at left), which is found in the Cadillac DTS, STS, SRX, and XLR, as well as the Buick Lucerne. Originally, the Northstar's production was scheduled to end in 2010. The Ultra V8 would likely have had direct injection and had output somewhere around 400 horsepower without turbocharging or supercharging.

If we are to take GM's words about this move at face value, then we can lay the blame on CAFE. Kevin Smith, a spokesman for Cadillac, said, "We’ve really seen the V-6 become the predominant engine in sales on the (2008) STS because it’s so close in power to the V-8."

That doesn't necessarily mean that a V8 is not needed; it means that the V8 needed an upgrade/replacement. It means that the 302 horsepower V6 in the STS is priced more reasonably than a V8 that is only marginally smoother, heavier, and gets worse fuel economy. Granted, the V8 STS comes with some additional equipment, but the MSRP price difference is $9,420, which is an awful lot of money for 18 more horsepower and a V8 badge on the car (base MSRPs before incentives are $52,775 for the V8 and $53,355 for the V6). EPA fuel economy ratings for the STS V8 are 15 city/24 highway, while they are 17 city/26 highway for the STS V6 (2 miles per gallon better).

There are many other implications for this decision. Most importantly, it shows that Cadillac has abandoned its hope of joining the ranks of BMW, Mercedes-Benz, Audi, Lexus, and Jaguar as true premium luxury cars. Cadillac makes fine automobiles - I'd love to own a 2008 CTS - but the lack of a 7-series, S-class, A8, LS, and XJ competitor slotted above the CTS hampers that ambition. And I really don't think a V6 - even one with twin turbochargers, a supercharger, or whatever else GM might have up its sleeve - can begin to compete in the full size luxury class.

The decision also was obviously a blow for the Tonawanda engine plant. However, somewhat softening the blow is the fact that GM has committed to building its new 4.5 liter light duty truck diesel at the same plant (pictured at right). This engine, which will be available after 2009, will improve efficiency over 25% compared to the small block V8 gasoline engines in these applications currently. With more strict CAFE standards a reality, perhaps GM will devote even more resources to the small diesel, which is basically a baby Duramax, and still puts out a ton of stump pulling torque.

On a related note, the rumor mill abounds that another CAFE victim will be GM's on-again, off-again RWD Impala. Supposedly, plans for the car have now been shelved, disappointing enthusiasts who were hoping for a RWD V8 Impala. To my knowledge, GM has not yet confirmed the RWD Impala's demise, however.

My guess is that we will continue to see news of high performance vehicle programs biting the dust, victims of increased CAFE fuel economy standards. Will Ford continue its Boss V8 engine program for trucks? Stay tuned.

Read more!