The Smart Driver

Safety agency lists best, worst cars to insure

2009-09-27T11:48:00.000-04:00

By U.S. News & World Report

Next time you see a Subaru Impreza WRX in your review mirror, get out of its way. Speed up. Slow down. Pull over to the side of the road and let it pass. Whatever it takes - just get away from it. If you don't, you may regret it.

Edmunds Straightline Blog explains, "Every couple years, the Insurance Institute for Highway Safety (IIHS), the non-profit testing and research agency supported by auto insurance companies, releases its model-by-model insurance loss rate scores. And it just so happens that among 2005-2007 models, the Subaru Impreza WRX had the highest loss rate among all types of coverage."

That means insurers paid out more to repair WRXs than any other model of car. Insurers paid out more claims to repair cars hit by WRXs than those hit by anything else. WRX owners even claimed more non-crash-related damage than owners of any other car.

The Wall Street Journal notes, "Auto insurance costs aren't the first thing most shoppers think about when they evaluate a new car to buy. But it's an important cost to consider." For example, the Journal notes, a car shopper who buys "a big car that gets 20 miles to the gallon, instead of a small car that sips fuel at the rate of 30 miles to the gallon...could pay about $625 a year more for fuel." But if that small car is a WRX, the owner could quickly erase those savings with insurance payments.

The Journal obtained quotes from Allstate Insurance Corp, and assuming a Washington, D.C. address and a good driving record, found that the WRX could cost nearly $600 more per year to insure than a comparable Ford Taurus.

Your own perfect driving record won't necessarily help you avoid those charges. The Journal explains, "Even if you have a spotless record of safe, accident-free driving in a Subaru WRX, you are also paying for the damage racked up by the other WRX drivers who aren't as careful as you are with this high-performance, turbo-charged machine."

That may ultimately be the problem with the WRX - it's not the car, it's the people who drive it. After all, Edmunds Straightline notes, the WRX offers a lot of horsepower for a low price. "Build a performance car and price it low enough for younger drivers to afford, and then, the insurance companies step into to ruin the fun," they comment.

It's actually possible, IIHS data show, to buy a powerful sports car that's relatively easy to insure. The Corvette Convertible, for instance, makes the list of the ten best insurance risks. Even some relatively affordable sports cars, like the Mazda MX-5 Miata, crack the top ten.

The Ten Worst Vehicles to Insure, according to IIHS data:

1. Subaru Impreza WRX

2. Scion tC

3. Hyundai Tiburon

4. Mercedes CLS class 4dr

5. Suzuki Forenza

6. Honda Civic Si

7. Dodge Charger

8. Nissan 350z

9. Chevrolet Cobalt

10. Suzuki Reno

The Ten Best Vehicles to Insure:

1. Buick Rendezvous

2. Pontiac Solstice

3. Buick Terraza

4. Honda Odyssey

5. Mazda MX-5 Miata

6. Subaru Outback

7. Ford Five Hundred

8. Volvo V70

9. Chrysler Town & Country

10.Chevrolet Corvette Convertible

10 most expensive cars to own and drive

2009-08-25T15:42:00.000-04:00

From BankRate.com:

By Russ Heaps

Here is a list of the 10 most expensive-to-own new vehicles, according to Edmunds.com. Four are from Mercedes-Benz and all but one are European imports. When you consider that the cars on our least-expensive-to-own list cost $0.39 per mile or less to own, the idea of paying $3 to $4 a mile is staggering.

In addition to the average market transaction price and financing rates, the estimates of what it truly costs to own these cars include factors such as fuel, insurance, repairs, maintenance and depreciation. The end result is a ballpark figure for the total cost over the first five years of ownership, as well as the cost per mile based on driving 15,000 miles per year.

All estimates come courtesy of Edmunds.com which features a "True Cost to Own" calculator.

1. Mercedes-Benz SL65 AMG Black Series

Starting price: $301,750
5-year total: $364,471
Cost per mile: $4.86

What pushes the Black Series up the price ladder from the SL65 AMG is the wide use of carbon-fiber body parts and some under-the-hood enhancements. Its 670-horsepower, 6-liter twin-turbo V-12 slingshots this two-seater to 60 miles per hour in less than four seconds. It's also loaded to the gills with high-tech standard equipment.

2. Mercedes-Benz S65 AMG

Starting price: $202,825
5-year total: $244,363
Cost per mile: $3.26

Capable of reaching 60 miles per hour from a standstill in just over four seconds, the S65 AMG combines opulent interior appointments with outrageously aggressive performance. It uses the same 6-liter twin-turbo V-12 found in other high-end Mercedes models but in this application it develops 604 horsepower.

3. Mercedes-Benz CL65 AMG

Starting price: $205,575
5-year total: $230,771
Cost per mile: $3.08

A strikingly handsome coupe, the CL65 AMG is more than a pretty face. Its 604-horsepower, 6-liter twin-turbo V-12 is capable of going from zero to 60 in just over four seconds. Standard gear includes a rearview camera and nighttime vision assist.

4. Audi R8

Starting price: $126,400
5-year total: $159,753
Cost per mile: $2.13

If your goal is to get noticed, there is no surer way to do it than behind the wheel of Audi's R8. Sleek, fast and decadent, the R8 uses a mid-mounted 420-horsepower 4.2-liter V-8 to turn all four wheels. It can dash from zero to 60 in just over four seconds. Sure it's expensive, but it is arguably the most accessible exotic on the market.

5. Porsche 911 Convertible Turbo

Starting price: $141,650
5-year total: $159,393
Cost per mile: $2.13

With an extra-cost options list as long as your arm, this two-seat drop-top offers an array of customizing choices. A 480-horsepower, 3.6-liter twin-turbo flat six-cylinder engine funnels output to all four wheels through a six-speed manual transmission. It gets to 60 miles per hour in less than four seconds.

6. Audi A8 L W12

Starting price: $122,625
5-year total: $153,588
Cost per mile: $2.05

The "L" in its name refers to this luxury sedan's stretched wheelbase, while the "W12" indicates it packs the potent 450-horsepower, 6-liter, W-12 engine under its hood. Fewer than six ticks of the clock are needed for the A8 L W12 to reach 60 miles per hour. Among its standard features are massaging front seats and four-zone automatic climate control.

7. Chevrolet Corvette ZR1

Starting price: $106,620
5-year total: $146,096
Cost per mile: $1.95

The Zeus of 'Vettes, the ZR1 is a supercar by any measure. Motivating it to a zero to 60 time of just over three seconds is a 638-horsepower supercharged 6.2-liter, V-8. Although it doesn't possess the amount of high-end bric-a-brac many of the other entries on this list do, pound for pound and dollar for dollar it may just be the best sports car in the world.

8. Porsche Cayenne Turbo S

Starting price: $125,775
5-year total: $138,613
Cost per mile: $1.85

The only SUV on this list, the Cayenne Turbo S packs Porsche performance into an off-road-capable all-wheel-drive uber package. Turning all four wheels is a 550-horsepower, 4.8-liter, twin-turbo V-8. Reaching 60 miles per hour from a stop takes a hair less than five seconds. A 14-speaker surround-sound audio system and a hard-drive-based navigation system are standard.

9. BMW M6 Convertible

Starting price: $111,725
5-year total: $138,186
Cost per mile: $1.84

The high-performance version of the 6 Series, the M6 is fitted with a 500-horsepower 5-liter, V-10, providing this soft-top with zero to 60 sprints of less than five seconds. A 13-speaker Harman Kardon surround-sound audio system and adaptive xenon headlights are standard.

10. Mercedes-Benz CLS63 AMG

Starting price: $99,775
5-year total: $137,749
Cost per mile: $1.84

No sedan better captures the sleek flow of a coupe's styling than the Mercedes-Benz CLS. In its hopped-up guise as the CLS63 AMG, it complements its drop-dead curb appeal with an asphalt-chomping 507-horsepower, 6.2-liter, V-8 engine. Reaching 60 miles per hour requires just a bit more than four seconds with a top speed of more than 180 miles per hour.

10 Cheapest Cars to Own

2009-08-25T15:39:00.001-04:00

From BankRate.com:

By Russ Heaps
Tuesday, August 18, 2009

You've read it on Bankrate.com and heard it elsewhere: A well-informed consumer will get a better deal when buying a vehicle.

Research is the key. Every additional piece of information you have increases the likelihood that you will negotiate a fair price, lock in the best financing available and drive away in a car or truck you can afford. The emphasis here is on "afford." Affordability involves much more than down payment and monthly installments. It encompasses other costs such as insurance, fuel, maintenance, repairs and depreciation. You must factor these costs into your annual vehicle-ownership budget as well as into that magical dollar amount you feel you can afford monthly.

All of these factors, of course, may vary depending on the way you use and maintain your car.

Edmunds.com, a leading automotive Web site, features an interactive tool it calls its True Cost to Own calculator, which computes an estimated total five-year cost and the cost per mile based on driving 15,000 miles per year.

Here are the 10 cars that top Edmunds' current list of the most frugal cars to own and operate:

Hyundai Accent GS:

Starting price: $10,690
5-year total cost: $25,958
Cost per mile: 35 cents

As basic transportation, the Accent GS three-door isn't so basic. Its 110-horsepower, 1.6-liter four-cylinder engine delivers decent fuel economy with an EPA estimated 27 mpg in the city and 33 mpg on the highway. The interior is relatively roomy and comes with power accessories and air conditioning.

Nissan Versa Base

Starting price: $10,710
5-year total cost: $27,196
Cost per mile: 36 cents

Nissan Versa: A sedan for the frugal, Versa's stingy fuel consumption earns it an EPA rating of 26 mpg in the city and 34 mpg on the highway. A five-speed manual transmission ushers the 1.6-liter four-cylinder engine's 107 horsepower to the front wheels. Its relatively roomy back seat is a major attraction in this segment; otherwise, its cabin is devoid of frills.

Chevrolet Aveo5 LS

Starting price: $12,685
5-year total cost: $28,360
Cost per mile: 38 cents

Chevrolet Aveo5 LS: Chevy beefed up the Aveo's 1.6-liter four-cylinder for 2009 and it now produces 107 horsepower. EPA estimated fuel economy is a very respectable 25 mpg in the city and 34 mpg on the highway. Among its short list of standard features is a four-speaker audio system with an auxiliary input jack.

Suzuki SX4 Sedan

Starting price: $13,994
5-year total cost: $28,965
Cost per mile: 39 cents

Suzuki SX4 Sedan: A number of trim levels let consumers increase content in smallish dollar increments. In its base form, though, the SX4 offers full-power accessories and a tilt steering wheel. EPA fuel economy estimates are 23 mpg in the city and 31 mpg on the highway earned by a 143-horsepower, 2-liter four-cylinder engine.

Pontiac G3

Starting price: $15,055
5-year total cost: $29,049
Cost per mile: 39 cents

Pontiac G3: Compared to the first four entries on this list, the G3 is positively loaded with standard equipment. Air conditioning, a six-speaker audio system with CD player and auxiliary input jack, and a tilt steering wheel are all standard. A 106-horsepower, 1.6-liter four-cylinder engine mated with a five-speed manual transmission earns it an EPA rating of 27 mpg city/34 mpg highway.

Mazda3 iSport

Starting price: $15,360
5-year total cost: $29,271
Cost per mile: 39 cents

Mazda3 iSport: Six airbags, anti-lock brakes and a four-speaker audio system with CD player and auxiliary audio jack are all standard in this sedan. A 148-horsepower, 2-liter four-cylinder engine collaborates with a five-speed manual transmission to earn EPA estimates of 22 mpg city and 30 mpg highway.

Honda Fit

Starting price: $15,460
5-year total cost: $29,420
Cost per mile: 39 cents

Honda Fit: Nicely appointed, even the base Fit has air conditioning, full-power accessories and a four-speaker audio system with CD player and auxiliary input jack. Its performance is on par with this group and is provided by a 117-horsepower, 1.5-liter four-cylinder engine. Its fuel economy is among the best with EPA estimates of 27 mpg city/33 mpg highway.

Pontiac Vibe

Starting price: $16,735
5-year total cost: $29,512
Cost per mile: 39 cents

Pontiac Vibe: Fraternal twin to the Toyota Matrix, the Vibe in its base form is fairly Spartan. It does come with a four-speaker audio system with CD player and auxiliary input jack, and a tilt/telescoping steering wheel. Power arrives via a 132-horsepower, 1.8-liter four-cylinder engine. Fuel economy is acceptable, with an EPA rating of 26 mpg city and 28 mpg highway.

Toyota Yaris

Starting price: $12,955
5-year total cost: $29,595
Cost per mile: 39 cents

Toyota Yaris: You have to step up a trim level to get an audio system, but the base Yaris three-door hatchback does have air conditioning and a tilt steering column. Its power comes from a 106-horsepower, 1.5-liter four-cylinder engine. With an EPA rating of 29 mpg city and 36 mpg highway, its outstanding fuel economy earned it a spot on our list of top 10 fuel misers.

Nissan Sentra

Starting price: $16,070
5-year total cost: $29,623
Cost per mile: 39 cents

Nissan Sentra: With the most standard equipment of any entry on this list, the Sentra sedan comes with air conditioning, a four-speaker audio system with CD player and auxiliary input jack, and power windows and locks. Its 2-liter four-cylinder engine generates 140 horsepower. Its EPA rating is 25 mpg city and 33 mpg highway.

Best Car Deals: August 2009

2009-08-08T10:40:00.000-04:00

From U.S. News and World Report
By Sean Tucker

The U.S. government has poured a shot of rocket fuel into a depressed car industry. With the help of the federal Cash for Clunkers rebate program, Americans have begun buying cars again, at a pace not seen since late 2007.

The Car Allowance Rebate System, the impulse behind the surge, offers buyers a credit of up to $4,500 toward the purchase of a new, more fuel-efficient car when they turn in an older gas-guzzler.

Automakers have tailored their incentives around the CARS program this month. Most are offering additional rebates on top of the government's contribution, making for nearly unprecedented low prices on some models.

It's working. It may even be working too well. Some dealerships are running low on popular cars.

Chrysler, for instance, offered to match the government's rebate on almost every model it makes with its "Double Ca$h For Your Old Car" promotion when the program started, but had to restrict that offer to just a few models after one week because its supply of the most fuel-efficient models dwindled quickly once CARS launched. Volkswagen has nearly run out of its most fuel-efficient car, the diesel-powered Jetta TDI. Some Toyota dealers are having trouble locating another Prius to sell.

Still, great deals are available. And, with or without promotions, the fundamentals of car shopping still apply this month. Take good care of your credit rating, negotiate respectfully with a dealer who is trying to survive a troubled market, and apply any cash-back rebates to the down payment to knock down what you owe before you even drive away. If you keep those principles in mind, you'll be able to negotiate a good deal even if you can't take advantage of government funds.
...

The Best Deals we found this month are listed below:

2009 Hyundai Elantra

Up to $2,000 cash back plus $1.49/gallon gas for a year

Our 2009 Best Small Car for the Money isn't really a small car. The Elantra is so roomy that the EPA classifies it as midsize. Yet it's sold for a small car price, and gets small car gas mileage, with an EPA combined fuel economy rating of 27 mpg. This month, it's available with a $2,000 rebate ($1,500 for the Elantra Touring wagon edition), plus Hyundai's unique pricelock program, which caps the price of gas at $1.49 per gallon for the first year you own the car - refunding you the difference if you pay more. It's no wonder the Elantra has been one of the 10 fastest-selling vehicles under the Cash for Clunkers rebate program.

Note: The Elantra's combined EPA-estimated gas mileage is greater than 22 mpg, so it is eligible for the Cash for Clunkers rebate.

MSRP: $14,120 - $17,820

Invoice: $13,735 - $17,090

MPG: 24 City / 33 Hwy

2009 BMW 335D

$4,500 "eco credit" plus up to $5,400 in government rebates

The BMW 3-Series is widely considered the benchmark sport sedan. Other cars are judged on how close they come to matching this car. Because of that reputation, the German automaker generally doesn't discount the 3-Series much. However, a diesel-powered option introduced for 2009 hasn't been selling well. There's no good reason for that - the 335D offers more off-the-line torque than any other 3- Series model, and is the most fuel-efficient. Perhaps Americans simply aren't sold on the benefits of diesel. So the company has tacked a rare incentive onto the diesel 3 -- a $4,500 "eco credit." The car also qualifies for a $900 tax incentive for fuel-efficient diesel-powered cars. That's $5,400 off the price of the best Upscale Midsize Sedan on the market. If you have clunker that qualifies for the full $4,500 voucher, the discount climbs to nearly $10,000 - an unprecedented markdown.

Note: The 335D's combined EPA-estimated gas mileage is greater than 22 mpg, so it is eligible for the Cash for Clunkers rebate.

MSRP: $33,600 - $50,700

Invoice:$30,910 - $46,645

MPG: 23 City / 36 Hwy

2009 Ford Taurus

0% APR financing for 60 months or up to $3,500 cash back

The arrival of the exciting 2010 Ford Taurus has left thousands of 2009 Taurus models sitting on dealership lots gathering dust. On the outside, the '09 Taurus is certainly not the equal of the muscular new bull...but look deeper, and you'll quickly see that it's a solid and affordable choice for those who need a full-size car. One of the most fuel-efficient large cars, the Taurus is also a "Top Safety Pick" from the Insurance Institute for Highway Safety. This is a great month to buy one. It's available at a significant discount before you even start negotiating, and dealers are anxious to negotiate...they want to move this Taurus off the lot so they can replace it with the 2010 model that is earning all the good press.

Note: The Taurus' combined EPA-estimated gas mileage of front-wheel-drive Tauruses is greater than 22 mpg, so those cars are eligible for the Cash for Clunkers rebate. All-wheel-drive models are not.

MSRP:$25,170 - $32,520

Invoice:$23,103 - $29,718

MPG:18 City / 28 Hwy

2009 Ford Escape

0% financing for 60 months or up to $2,500 cash back

Americans have figured out that the 2009 Ford Escape is a great deal. It's been one of the ten fastest-selling vehicles under the Cash for Clunkers rebate program. The reasons are easy to see. An Insurance Institute for Highway Safety "Top Safety Pick," the Escape is a smooth driver and one of the more fuel-efficient SUVs. It's also high-tech, available with Ford's unique SYNC infotainment system, which allows drivers to control Bluetooth devices inside the car with voice commands. This month, it's available with no interest for five years, or $2,500 cash back.

Note: The Escape's combined EPA-estimated gas mileage is greater than 18 mpg, so it is eligible for the Cash for Clunkers rebate.

MSRP:$20,435 - $27,670

Invoice:$19,245 - $25,625

MPG:20 City / 28 Hwy

2009 Volkswagen Touareg TDI

0% APR financing for 60 months

The Volkswagen Touareg is one of the sharpest-looking SUVS on the road, and boasts an upscale cabin that wouldn't be out of place in a Mercedes-Benz or a Lexus. Its roomy interior includes a long list of standard features, including one of the more impressive stereos in the class. And unlike most sporty- looking SUVs, this one holds its own off-road. The diesel-powered TDI edition even meets Cash for Clunkers requirements. This month, it's available interest-free for five years, keeping payments reasonable.

Note: The Touareg TDI's combined EPA-estimated gas mileage is greater than 18 mpg, so it is eligible for the Cash for Clunkers rebate. Other Touareg models do not qualify.

MSRP: $39,300 - $48,900

Invoice: $36,203 - $44,997

MPG: 14 City / 20 Hwy

2009 Mazda CX-9

0% APR financing for 36 months plus $1,500 cash back

The Mazda CX-9 has many of the virtues of a large SUV, but few of the vices. As buyers of big sport ‘utes expect, the CX-9 can comfortably seat seven and haul a lot of cargo. But, somewhat unexpectedly, it's easy to drive - even a bit sporty. It's also among the most fuel-efficient large SUVs, and, in most configurations, carries an MSRP low enough to qualify for the Cash for Clunkers rebate program.

Note: The combined EPA-estimated gas mileage of two-wheel-drive CX-9s is greater than 18 mpg, so they are eligible for the Cash for Clunkers rebate, though four-wheel-drive versions do not qualify.

MSRP: $29,820 - $35,205

Invoice: $27,600 - $32,567

MPG: 16 City / 22 Hwy

2009 Dodge Ram

Up to $5,500 cash back or 0% APR financing for 60 months plus $2,000 cash back

The 2009 Dodge Ram is one of the smoothest-driving trucks ever built. Dodge designed the Ram with a unique coil-over suspension, giving it the sharpest handling on any full-size pickup. It also offers comfortable seating, a high-tech cabin, and innovative Rambox storage containers over the fenders, which can even be plugged and used as coolers - making you, hands down, the hero of the tailgate party. This month, it's available with up to $5,500 in rebates, or a combined rebate and interest-free financing offer.

Note: The Ram is available in many configurations, but most have a combined fuel economy greater than 15 mpg, so many are eligible for the Cash for Clunkers rebate.

MSRP: $21,520 - $43,490

Invoice: $19,390 - $38,769

MPG: 14 City / 19 Hwy

2009 Porsche 911

1.9% APR financing for 36 months

Porsche is in trouble, for reasons that have nothing to do with its extraordinary cars. The company overreached last year in a failed attempt to buy Volkswagen, and now faces a mountain of debt. Industry analysts widely expect Porsche to sell itself to VW in order to save its hide. But Porsche's moment of crisis is a moment of opportunity for car buyers. After all, the crisis was caused by overreaching management - the cars are still the stuff of legend. Porsche vehicles are almost never discounted. There is no need to mark them down because there is never a shortage of people dreaming of a Porsche. But this month, the company has tendered a rare financing offer on virtually all of its vehicles. While 1.9% APR is nothing revolutionary, it's unheard of from Porsche...and here it is, offered on the iconic 911, with its four-second zero-to-sixty time and legendary razor-sharp handling. The offer lasts until the end of September.

Note: The Cash for Clunkers rebate does not apply to cars in this price range.

MSRP: $76,300 - $103,900

Invoice: $68,490 - $93,330

MPG: 18 City / 26 Hwy

Doing the ‘Clunker’ Calculus

2009-08-08T09:48:00.000-04:00

In the New York Times:

The “cash for clunkers” program helped increase July auto sales to the highest level this year.

By MATTHEW L. WALD
Published: August 7, 2009

THE “cash for clunkers” program will be back in full swing this weekend after President Obama signed a program extension on Friday. The $2 billion infusion should help dealers sell thousands of cars to customers who can reap a bounty of $3,500 to $4,500 for trading in an old vehicle.

The short-term effect will be obvious, but the program’s longer-term value — either as a method of stimulating the economy or saving energy — is less clear. Economists say that most buyers simply moved up the timing of their purchase, and that the projected gasoline savings are exaggerated because many of the trade-ins were seldom used.

The program’s first $1 billion was considered money well spent, at least by the new car industry, because it lured a quarter-million buyers into dealerships; the vehicles they purchased would go about 60 percent farther on a gallon of gasoline than the ones they turned in.

But measuring the stimulative effect of the program would require employing scientific methods like those used in drug trials, where some participants are given a placebo instead of the drug being tested. The problem, according to market experts, is that nearly everyone who bought new cars would have done so at some point anyway.

So what will sales be like in the coming months, now that many consumers have moved up their plans to buy a new vehicle? There were extra sales in July and the same will be true in August. And the number of sales under the program will be measured precisely — the Transportation Department said 245,384 vehicles had been sold by Friday morning, with rebates totaling $1.03 billion.

But the Transportation Department will not be able to measure how many shoppers would have purchased a car this fall — when the 2010 models go on sale — or in the winter or spring.

Likewise the fuel savings will be hard to calculate. Here is a possible best case: The average clunker traveled 12,000 miles a year at 16 miles a gallon, consuming 750 gallons. It was replaced with a new vehicle — probably a car, although the “clunkers” offered by the public were often pickups or S.U.V.’s — that can travel the same 12,000 miles on 480 gallons, a savings of 270 gallons.

Multiply by 245,000, the number of vehicles purchased using the first $1 billion of incentives, and the country burns 66.2 million fewer gallons of gasoline a year, or about 1.6 million barrels. At the rate America burns oil, that is about a two-hour supply.

Here is a possible worst case: The clunker was a pickup or S.U.V. driven only a few thousand miles a year because the family had other vehicles. When the cost of fuel went up, the gas-guzzling clunker was relegated to the back of the driveway.

Now the family has traded the clunker for a new fuel-efficient sedan, which will be driven 12,000 miles a year. The miles it displaces are not the ones that would have been traveled in the old S.U.V., but by another sedan that is still on the road. That, in turn, reduces the mileage improvement and gasoline savings achieved.

In multicar households — which is to say, in most American households — the newest car often gets driven the most miles, and the oldest one the least. So, some researchers rightly ask, how fuel-efficient is the car the family still owns but which will now be parked more often?

“There’s no real way to calculate it without making a bunch of assumptions,” said Lee Schipper, a researcher at the University of California, Berkeley, and at Stanford.

Others acknowledge the problem. “The cash for clunkers program helps the economy a lot and improves oil security a little,” said Jason S. Grumet, president of the Bipartisan Policy Center and an old hand at energy and pollution policy. He formerly headed a multistate clean air agency, and served on President Obama’s transition team.

“The fuel-saving benefits pale in comparison to President Obama’s significant strengthening of mileage standards earlier this year,” Mr. Grumet said, “but every little bit helps.”

He was referring to the national fuel economy standard signed into law in May that will be phased in beginning with the 2012 model year. By 2016, cars will have to average 39 miles a gallon.

That raises more questions. Seven years from now, when cars have to average 39 miles a gallon, what will we think of a government program that enticed hundreds of thousands of consumers to buy vehicles that got 30 miles a gallon (and that in 2016 will be middle-aged)? Had the program not existed, some of those buyers might have waited until 2012, when the new mileage rules begin to be phased in.

But in the end, “cash for clunkers” may help undo a previous government program: for years, small businesses got a tax break for buying S.U.V.’s, but only if they were the very largest — at least 6,000 pounds.

Cars Hurt Most by the Recession

2009-08-06T18:09:00.001-04:00

From U.S. News and World Report:

By Rick Newman, U.S. News

Last summer, when the prospect of a General Motors bankruptcy started to materialize, CEO Rick Wagoner was insistent: A Chapter 11 filing would be ruinous.

He was wrong, but not by a lot. GM and Chrysler are both still in business following unprecedented bankruptcy filings—but only thanks to billions in federal aid and government guarantees backing their products. And the two automakers will look quite different in their new incarnations. At GM, Wagoner is gone. His replacement, Fritz Henderson, has cut half of GM's eight divisions, leaving Chevrolet, Cadillac, Buick, and GMC. Chrysler is now owned by Italian automaker Fiat and desperately awaiting fresh technology and new models needed to become competitive. Many current Chrysler models may simply disappear.

Those are the biggest headlines, but the rest of the auto industry is reeling as well. Overall sales are down about 35 percent from last year, which itself was a bust, thanks to $4 gas and an incipient recession. Toyota, the world's biggest automaker, lost nearly $5 billion last year and might fare no better this year. Other bankruptcies may be on the horizon, with conglomerates in China and India prowling for bargains and Western know-how amid the wreckage. While some familiar brands could vanish, new ones may soon arrive in U.S. dealerships. Warren Buffett, for instance, believes a Chinese firm called BYD is one of the world's most promising electric-car companies—and has invested about $230 million in it.

The next several years are likely to represent the biggest shakeout in the U.S. auto industry since the 1930s, and I decided to gauge who's falling behind in what has become a frenzied race to survive. With the industry in a tailspin, sales at every major automaker are down, so I used data from J.D. Power & Associates to measure which automakers have been losing the most market share. That reveals which models and manufacturers are doing worst relative to their competitors.

Since brand loyalty matters most when money is scarce, the automakers losing market share today are likely to flounder even if there's an upturn in the economy. These seven nameplates have lost the most market share so far in 2009, compared to 2008:

Chrysler (1.9 percent market share, down 0.9 percentage point from 2008). Fire sales at shuttered dealers may have attracted a few bargain hunters, but Chrysler is proving that bankruptcy is bad for business. Sales of every Chrysler model except the Town & Country minivan are down more than 50 percent in 2009, and there's little on the way over the next 12 months to brighten the picture. The parent company is now officially Chrysler-Fiat, but the Fiat-made Eurodarters we've been hearing about won't arrive until 2011 at the earliest. They could help revitalize the Chrysler brand, the weakest and smallest under the corporate umbrella (which also includes Dodge and Jeep). But it's also possible that the whole Chrysler division could be folded into other parts of Chrysler-Fiat—or sold or dissolved.

Dodge (5.5 percent market share, down 0.8 point). Chrysler's sister division is suffering from the same double whammy: trying to survive bankruptcy with a product lineup that's middling at best. The Ram pickup is the strongest Dodge vehicle, with sales down less than the industry average. A rebound in housing and construction could help turn Ram sales around. The flashy new Challenger muscle car gives the popular Ford Mustang and Chevy Camaro some competition. And the Journey crossover is thrifty and practical. But the rest of the Dodge lineup is aging and underwhelming.

Chevrolet (12.4 percent market share, down 0.6 point). There's reason for optimism at Chevy—GM's biggest division—which can boast a mainstream hit in the Malibu sedan and an exciting "halo vehicle" in the hot new Camaro. But nearly every other vehicle in the lineup has lost market share over the past year, evidence that GM's bankruptcy has hurt even its strongest division. With GM folding Pontiac and selling Saturn, Chevy needs to make a strong recovery if GM is ever going to return to profitability.

Saturn (0.9 percent market share, down 0.5 point). There are still a few loyalists, but Saturn's sales and market share began to plunge on the news that GM would sell its "no hassle" division. The new owner, Penske Automotive Group, hasn't said yet what kinds of cars the new Saturn will sell, but they could be imports from Korea or even China. Until those arrive in a year or two, GM will continue to provide lame-duck vehicles to help keep Saturn's 350 dealerships open.

Toyota (13.6 percent market share, down 0.4 point). The big loser for Toyota has been its Tundra pickup truck, which has failed to wrest key turf from Ford and Chevy even though it's made at an expensive new plant in Texas. The new Honda Insight hybrid undercuts Toyota's Prius on price, and Honda's Accord has been a tough competitor to the Camry. But one reason Toyota has lost market share is that is hasn't cut prices as much as competitors or offered the same costly incentives. Share is likely to bounce back as some GM and Chrysler buyers flee to more stable carmakers.

Scion (0.5 percent market share, down 0.4 point). The trio of small, inexpensive cars that make up Toyota's Gen Y division—the tC, xB, and xD—should appeal to buyers in lean times. But competing thriftmobiles like the Honda Fit and Mazda3 have more mainstream appeal than Scion's funky designs. And other compacts like the Kia Rio and Hyundai Elantra come cheaper.

Suzuki (0.8 percent market share, down 0.3 point). Yes, Suzuki still sells cars here, although it suspended production of its XL-7 SUV last year and pulled the Reno and Forenza sedans from its lineup. What's left? The Grand Vitara crossover, the SX-4 compact, and a pickup called the Equator. That's a pretty flimsy lineup, but if you buy an SX-4, at least you'll get three months of free gas. Better hurry, though: The last company that tried a promotion like that was Chrysler.

Reviewers Hurl Criticism at 2010 Honda Insight

2009-08-06T18:07:00.000-04:00

From Hybridcars.com

By Hybridcars.com

What’s the biggest obstacle to mainstream adoption of greener cars? Cost. The new generation of super fuel-efficient high-tech vehicles—including hybrids, clean diesels and electric cars—carry a higher price tag compared to their conventional counterparts. That’s why Honda designed its latest hybrid, the 2010 Honda Insight, with affordability as the main goal. With a base MSRP of $19,800, Honda achieved its objective. The Honda Insight’s marketing tag line is, “The Hybrid for Everyone.”

When the Insight was introduced in early 2009, the automotive press gushed with praise. Reviewers claimed that the Honda Insight is more compelling and fun to drive than the quintessential gas-electric car, the Toyota Prius, which is bigger, faster, and uses a more sophisticated third-generation of hybrid technology. Dan Neil, Los Angeles Times auto writer, described the Insight as “impeccably constructed, well planned and honeyed with high-tech surfaces and materials. Nothing feels cheap or compromised." Road and Track’s Dennis Simanaitis wrote, “The Insight will make a significant contribution to sustainable mobility.” Edmunds.com reviewers said, “Given its impressive talents and attractive price, it's hard to fault the 2010 Honda Insight.”

But in the past few weeks, a number of critics have found it quite easy to find faults with the Insight— harshly criticizing the car for the very traits that have allowed Honda to keep down the price.

1. The Honda Insight doesn’t feel solid.

David Champion, senior director of the Consumer Reports auto test center, said, “The Insight is a noisy, stiff-riding car with clumsy handling that is nothing like the Fit on which it is based.”

2. The Honda Insight is underpowered.

Scott Burgess of the Detroit News, wrote, “The Insight can feel underpowered at times, especially on the highway...There are paddle shifters mounted on the steering wheel, which can help a driver improve the car's pickup but can also make the engine scream like a toddler.”

3. The Honda Insight’s engine is buzzy.

UK reviewer, Jeremy Clarkson, wrote, “The Honda’s petrol engine is a much-shaved, built-for-economy, low-friction 1.3 that, at full chat, makes a noise worse than someone else’s crying baby on an airliner. It’s worse than the sound of your parachute failing to open.

4. The Honda Insight is too small.

Edward Loh of Motor Trend explained, “While the Prius qualifies as a midsize car, the 2009 Insight is a compact: shorter by 2.7 inches overall and 5.9 inches between the wheels. The Insight is also 1.2 inches narrower, with a roof height 2.5 inches lower, which is why Honda tells you its Prius-fighter is the more similarly sized Civic Hybrid.” Dan Edmunds of Edmunds.com, wrote, “Those approaching 6 feet in height will feel the roof and wish for more legroom [in the backseat]. The Insight's 100.4-inch wheelbase needs an additional inch or two. This, above all, reminds us that the Insight is indeed a compact car.”

Did early praise leave the Honda Insight open to hatchet jobs by contrary reviewers seeking dramatic headlines? Did the initial euphoria about an affordable hybrid wear off? Or did it just take time for the press to narrow in on the Insight’s shortcomings?

In the end, the look and feel of a car is subjective. Consumers shopping for a fuel-efficient hybrid will have to get behind the wheel and pass their own judgment on the feeling of solidity, the sound from the engine, and the ability of a compact car to provide enough space to meet their needs. Meanwhile, the hard numbers speak for themselves: $20,000, a long list of cutting-edge features, seating for five, and average city-highway mileage of 41 mpg.

America's Best-Loved Cars

2009-08-06T18:04:00.000-04:00

From CNNmoney.com

In J.D. Power's latest survey, new vehicle owners rate just how much they love their cars and trucks. The results include some pretty big surprises.
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By Peter Valdes-Dapena, CNNMoney.com senior writer

J.D. Power's latest car owner satisfaction survey includes some good news for Chrysler Group and Hyundai.

Chrysler hasn't done well in these sorts of surveys in recent years, but this time the new Dodge Challenger beat out its competitors as the most-favored mid-size sporty car. (Also worth noting: The Dodge brand, overall, earned above average scores in this survey after posting the largest one-year improvement of any car brand.) And Hyundai, not known as a luxury brand beat out higher-priced mid-sized luxury cars from BMW and Jaguar.

The market research company surveyed 80,000 new car buyers after 90 days of ownership asking them to rate as many 90 different features of their vehicles as well as their overall satisfaction. The J.D. Power APEAL survey -- it stands for Automotive Performance, Execution and Layout -- provides a measure of just how much new car buyers like their cars and why. Here’s a look at how the competition shook out.

Sub-compact Car: Smart ForTwo

2nd place: Scion xD

3rd place: Honda Fit

The ForTwo's main selling point is its tiny size and its tiny fuel costs. About as long as most mid-size cars are wide, the ForTwo is a breeze to park on congested city streets.

The tiny two-seater beat out roomier cars like the Scion xD and Honda Fit. While it may not be the most practical choice for a lot of people, the ForTwo delivers what its buyers are looking for, said David Sargent, vice president for automotive research at J.D. Power.

Compact Car: Mini Cooper

2nd place: Volkswagen Jetta

3rd place: Mitsubishi Lancer

J.D. Power's APEAL tends to favor cars with a strong emotional attraction. Cars like the Mini Cooper certainly apply.

The Mini's quirky retro design carries over into an interior that features a speedometer the size of a pie mounted between the seats. Engineers at parent company BMW also gave the Mini ultra-responsive handling to match the eye-catching design.

"Owners really do find it fun to drive," said J.D. Power's David Sargent.

Compact Sporty Car: Volkswagen GTI

The GTI was the only car to score above average in this category. It's basically a sport-tuned, performance version of the Volkswagen Golf economy car. VW pits it against Japanese compacts like the Honda Civic Si.

Besides driving enjoyment, the GTI scored very well for interior quality. That's always a strong point for VW.

Compact Luxury Sport: Mercedes-Benz SLK-class

2nd place: Nissan Z

The sleek little SLK, with its folding hard top, borrows its arrow-nosed look from Mercedes' far more expensive SL cars. Besides the design, the SLK offers its buyers a fun drive and nice little comforts like an optional "air scarf" that blows warm air around occupants' heads to make top-down driving on cold days more tolerable.

Among owners, the SLK scored particularly well for its high-quality feel.

Entry Luxury: Volkswagen CC

2nd place: Cadillac CTS

3rd place: Audi A4/5

With the CC, Volkswagen takes the Passat up a couple of notches. Besides its dramatic swooping body lines, the interior also gets high-contrast two-tone treatment.

An optional 280-horsepower engine and 6-speed transmission add a dose of power to the car's responsive driving character.

Despite its low-slung roof design, owners really love the roomy interior of the CC. It also scored well for storage space and fuel economy.

Mid-size Sport: Dodge Challenger
2009 Dodge Challenger
2009 Dodge Challenger

A big win for the Chrysler Group, the Challenger beat the long-time favorite Ford Mustang as well as the Mitsubishi Eclipse in this category. In fact, it was the only car in its category to score above average.

The Challenger scored well for its interior as well for its performance. The fact that the Challenger is an all-new model also helps, said J.D. Power's David Sargent. New models, particularly ones that attract a lot of attention, tend to do well in this survey.

At the time this survey was done, the Chevrolet Camaro had not yet been released, so we'll have to wait until next year to see if the Challenger can hold on to its title.

Mid-size Luxury: Hyundai Genesis

2nd place: Jaguar XF

3rd place: BMW 5-series

You can almost hear the champagne corks popping at Hyundai headquarters. The economy-minded brand's move into the luxury segment beat entries from Jaguar and BMW in this survey.

The Genesis scored very well for its features, roominess and comfort, but the car's low price, relative to its rivals, was probably a factor.

"People feel that they're getting a pretty good deal here," said David Sargent of J.D. Power.

Large Luxury: Mercedes-Benz S-class

2nd place: Lexus LS

Mercedes-Benz has this category locked up. The S-class has won here each of the past three years.

"This is one vehicle that really hit the mark," said J.D. Power's David Sargent.

The S-class offers a long list of optional features, including massaging seats in the front and back, infra-red night-vision cameras and cruise control that automatically maintains a following distance at any speed. Of course, there's also the car's refined and powerful performance.

Mid-size Car: Volkswagen Passat

2nd place: Mazda6

3rd place: Honda Accord

It's hard to find a Volkswagen car that didn't top its category in this survey. Two versions of this car, the other being the CC, outscored competitors.

As always for VW, interior quality and fuel economy were high points.

Large Car: Nissan Maxima

2nd place: Pontiac G8

3rd place: Toyota Avalon

The redesigned Maxima scored big points for its interior. Owners also love the audio systems, seating and visibility.

Click here to see all of America's best-loved cars at CNNMoney.com

House Votes for $2 Billion Fund to Extend ‘Clunker’ Plan

2009-07-31T13:51:00.001-04:00

From The New York Times:

By MATTHEW L. WALD
Published: July 31, 2009

WASHINGTON — The House of Representatives voted to provide an emergency $2 billion for the “cash for clunkers” program on Friday, and the White House declared the program very much alive, even though new-car shoppers appear to have already snapped up all the $1 billion that Congress originally appropriated for it.

The House shoved other business out of the way on its last day before the August recess to rush through a measure to address the cash shortage of the car program. The vote was 316 to 109, with significant support from Republicans as well as Democrats.

The Senate, which will be in session next week, will take up the program then. A spirited debate is likely, as some senators are expected to use the opportunity to push for tougher fuel-efficiency requirements. If the Senate does not go along with the House’s version, the House might have to return to work on a compromise.

The sudden legislative action was prompted by the overwhelming response to the program, formally known as the Car Allowance Rebate System, which its backers say has helped not only car-buyers but the struggling American automobile industry.

Earlier Friday, Robert Gibbs, the chief White House spokesman, offered assurances that the administration was looking for ways to continue the popular new program, which offers $3,500 to $4,500 for people who trade in an old car for a new one with higher fuel economy.

“If you were planning on going to buy a car this weekend using this program, the program continues to run,” he said. “If you meet the requirements of the program, the certificates will be honored.”

Mr. Gibbs declined to say how long the program could continue without an infusion of funds.

“We feel confident that we’ll have a solution that people can agree on moving forward, and that the program continues,” he said.

The $2 billion infusion approved by the House would come from money already set aside for an Energy Department’s loan guarantee program and give it to the rebate program.

“Consumers have spoken with their wallets,” Representative David R. Obey, Democrat of Wisconsin of chairman of the House Appropriations Committee, said in urging quick passage.

The panel’s ranking Republican, Jerry Lewis of California, complained that Democrats, who have a 256-to-178 majority in the House, were rushing the measure through with too little thought, let alone debate — “shoveling another $2 billion out the door,” in his words.

But in the end, there was enough support from Republican in states that rely on the auto industry to speed the measure along.

Before the House vote, Senator Carl Levin, Democrat of Michigan, said it was not clear how long funds for the program would last, “so people should go to their car dealers now if they want to take advantage of the program.

Representative Steve Israel, Democrat of New York, predicted that $2 billion would be enough until Congress returns in September. But he added, “there’s going to be a lot of confusion among consumers. We need to wrap this up today.”

The program has proved a boon to the battered auto industry as it struggles to regain its footing, drawing crowds of customers to some showrooms as dealers aggressively promoted the rebates in ads over the last week.

Representatives of the nation’s car dealers said Thursday that they had been told by the Transportation Department to stop offering the rebates because the funds had been quickly exhausted.

But a White House official then said the program had not been suspended, creating confusion about its status.

There was wide support for an additional appropriation for “cash for clunkers,” with members of the Michigan delegation in the forefront. But support was not unanimous and some members of Congress thought the requirements should be tightened.

Senators Dianne Feinstein, a California Democrat, and Susan Collins, a Maine Republican, said in a joint statement that “we will insist that any extension of the program requires that the minimum fuel economy improvement for newly purchased vehicles be at least two miles per gallon higher than it is under the enacted Clunkers program.” For cars, the current minimum improvement is five miles a gallon. And, they said, to help low-income car owners take part, they would include vouchers for fuel-efficient used vehicles.

But Representative Ed Markey of Massachusetts, one of the authors of the original bill, called for a simple extension. He declared Thursday night, “Cash for Clunkers may have run out of cash, but America’s consumers haven’t run out of clunkers.” He said it should be extended to cover 1 million vehicles, about four times the number covered so far.

Helene Cooper contributed reporting from Washington, and Micheline Maynard from Detroit.

6 New Cars Worth Waiting For

2009-07-30T17:23:00.001-04:00

From U.S. News and World Report
By Hamooda Shami

With the economy showing signs of life and plenty of great car deals to be had, many people may be more eager than ever to purchase a new car. A major added incentive has even appeared in the form of the federal government's Cash for Clunkers program, which offers up to a $4,500 rebate when you trade in your old car. It's quite the deal, but if you don't qualify and are still inclined to drop some cash on a new vehicle, here's a suggestion.

Wait. It may be tempting to head to the dealer today and walk out of there with a set of keys. But in this case, patience definitely has its rewards.

The automotive industry has witnessed the perfect storm over the last two years. Drastic drops in sales, unpredictable rises in gas prices, a punch-drunk economy trying to get its legs -- all of this has culminated in auto manufacturers being forced to make major modifications. Stagnant brands have been downsized and eliminated, while automakers have moved their focus from behemoth SUVS to small, fuel-efficient cars.

However, the time it takes for a car designed from scratch to make it into production is significant. Cars that have been in the works for the last year or two will only be rolling out on dealer lots starting next year and into 2011 and 2012. What that means is, eventually, the fallout from the automotive crisis will result in a whole slate of efficient, innovative cars making it to the market in true lemonade-out-of-lemons fashion. We've put together a list of our favorites. Start putting money aside now and you won't be sorry later.

Chevrolet Volt

Projected Release Date: Late 2010

When you're discussing anticipated autos, it would be poor form not to begin with the Chevrolet Volt. One of the most talked-about cars in the industry, it will be the first Extended-Range Electric Vehicle (E-REV) in mass production. The Volt is an electric car that employs a gasoline engine in order to expand its range. Price estimates place the Volt at around $40,000.

Ford Fiesta

Projected Release Date: Early 2010

Ford is taking a throwback approach to fuel efficiency with the nifty Fiesta. Instead of going with hybrid technology or a newfangled electric powertrain, the Ford Fiesta will simply be a small, lightweight car. In addition to being a lot cheaper to produce than its alternative-fuel contemporaries, it will match and surpass most of them in fuel economy. Pricing is unknown, but many expect it to be in the neighborhood of a lower-end Ford Focus.

Nissan EV-02

Projected Release Date: 2012

Gas-sipping cars are nice, but cars that don't use any gas at all are even better. Nissan hopes to be among the first to bring an affordable electric vehicle to production with its EV-02. Nissan has already made an EV mule available to the press (in the form of a Nissan Cube outfitted with components of the EV technology) for testing purposes. CNET says the "drivetrain was whisper quiet" and they were "quite impressed with the linear acceleration exhibited by the EV-02, and its willingness to move " Many details are yet to be revealed, such as the exterior, price and eventual name but for green drivers on a budget, the Nissan EV is an interesting proposition.

Chevrolet Spark

Projected Release Date: 2011

The second Chevy on our list, the Spark is the domestic answer to the Smart ForTwo. Where it has a leg up on the ForTwo is that it will be for four -- as in four passengers, and four doors for easy access. With a motorcycle-style instrument panel and a painfully cute exterior, the Spark is bound to have a large fan base. Pricing has not yet been announced -- though speculation is that it will be priced along the lines of the budget Chevy Aveo.

Chrysler Town & Country EV

Projected Release Date: Late 2010

Last fall, Chrysler shocked the industry when it unveiled a lineup of electric vehicles that are in development. While the Dodge Circuit has garnered the most attention for its mind-numbing performance and flashy styling, the Town & Country EV is innovative in its practicality. Most of the electric cars that are going to hit the streets are either sports coupes or miniature econo-boxes. The idea of an electric minivan that can transport the family while producing zero emissions sets the Town & Country EV apart from everything else in the works. Pricing information has not been released.

Scion iQ

Projected Release Date: Late 2010/Early 2011

The iQ is Toyota's attempt to take on the Smart ForTwo and the aforementioned Chevrolet Spark. To be released under their "alternative" brand, Scion, the iQ will feature a 3+1 seating arrangement (two in the front, one in the back) -- just don't expect to fit a full-sized adult in the rear seat. The price of the iQ hasn't been released as of yet, but expect it to be somewhere close to the $14,650 MSRP of the Scion xD.

Cars Hurt Most by the Recession

2009-07-16T07:50:00.000-04:00

From U.S. News and World Report

By Rick Newman

Last summer, when the prospect of a General Motors bankruptcy started to materialize, CEO Rick Wagoner was insistent: A Chapter 11 filing would be ruinous.

He was wrong, but not by a lot. GM and Chrysler are both still in business following unprecedented bankruptcy filings—but only thanks to billions in federal aid and government guarantees backing their products. And the two automakers will look quite different in their new incarnations. At GM, Wagoner is gone. His replacement, Fritz Henderson, has cut half of GM's eight divisions, leaving Chevrolet, Cadillac, Buick, and GMC. Chrysler is now owned by Italian automaker Fiat and desperately awaiting fresh technology and new models needed to become competitive. Many current Chrysler models may simply disappear.

Those are the biggest headlines, but the rest of the auto industry is reeling as well. Overall sales are down about 35 percent from last year, which itself was a bust, thanks to $4 gas and an incipient recession. Toyota, the world's biggest automaker, lost nearly $5 billion last year and might fare no better this year. Other bankruptcies may be on the horizon, with conglomerates in China and India prowling for bargains and Western know-how amid the wreckage. While some familiar brands could vanish, new ones may soon arrive in U.S. dealerships. Warren Buffett, for instance, believes a Chinese firm called BYD is one of the world's most promising electric-car companies—and has invested about $230 million in it.

The next several years are likely to represent the biggest shakeout in the U.S. auto industry since the 1930s, and I decided to gauge who's falling behind in what has become a frenzied race to survive. With the industry in a tailspin, sales at every major automaker are down, so I used data from J.D. Power & Associates to measure which automakers have been losing the most market share. That reveals which models and manufacturers are doing worst relative to their competitors.

Since brand loyalty matters most when money is scarce, the automakers losing market share today are likely to flounder even if there's an upturn in the economy. These seven nameplates have lost the most market share so far in 2009, compared to 2008:

Chrysler (1.9 percent market share, down 0.9 percentage point from 2008). Fire sales at shuttered dealers may have attracted a few bargain hunters, but Chrysler is proving that bankruptcy is bad for business. Sales of every Chrysler model except the Town & Country minivan are down more than 50 percent in 2009, and there's little on the way over the next 12 months to brighten the picture. The parent company is now officially Chrysler-Fiat, but the Fiat-made Eurodarters we've been hearing about won't arrive until 2011 at the earliest. They could help revitalize the Chrysler brand, the weakest and smallest under the corporate umbrella (which also includes Dodge and Jeep). But it's also possible that the whole Chrysler division could be folded into other parts of Chrysler-Fiat—or sold or dissolved.

Dodge (5.5 percent market share, down 0.8 point). Chrysler's sister division is suffering from the same double whammy: trying to survive bankruptcy with a product lineup that's middling at best. The Ram pickup is the strongest Dodge vehicle, with sales down less than the industry average. A rebound in housing and construction could help turn Ram sales around. The flashy new Challenger muscle car gives the popular Ford Mustang and Chevy Camaro some competition. And the Journey crossover is thrifty and practical. But the rest of the Dodge lineup is aging and underwhelming.

Chevrolet (12.4 percent market share, down 0.6 point). There's reason for optimism at Chevy—GM's biggest division—which can boast a mainstream hit in the Malibu sedan and an exciting "halo vehicle" in the hot new Camaro. But nearly every other vehicle in the lineup has lost market share over the past year, evidence that GM's bankruptcy has hurt even its strongest division. With GM folding Pontiac and selling Saturn, Chevy needs to make a strong recovery if GM is ever going to return to profitability.

Saturn (0.9 percent market share, down 0.5 point). There are still a few loyalists, but Saturn's sales and market share began to plunge on the news that GM would sell its "no hassle" division. The new owner, Penske Automotive Group, hasn't said yet what kinds of cars the new Saturn will sell, but they could be imports from Korea or even China. Until those arrive in a year or two, GM will continue to provide lame-duck vehicles to help keep Saturn's 350 dealerships open.

Toyota (13.6 percent market share, down 0.4 point). The big loser for Toyota has been its Tundra pickup truck, which has failed to wrest key turf from Ford and Chevy even though it's made at an expensive new plant in Texas. The new Honda Insight hybrid undercuts Toyota's Prius on price, and Honda's Accord has been a tough competitor to the Camry. But one reason Toyota has lost market share is that is hasn't cut prices as much as competitors or offered the same costly incentives. Share is likely to bounce back as some GM and Chrysler buyers flee to more stable carmakers.

Scion (0.5 percent market share, down 0.4 point). The trio of small, inexpensive cars that make up Toyota's Gen Y division—the tC, xB, and xD—should appeal to buyers in lean times. But competing thriftmobiles like the Honda Fit and Mazda3 have more mainstream appeal than Scion's funky designs. And other compacts like the Kia Rio and Hyundai Elantra come cheaper.

Suzuki (0.8 percent market share, down 0.3 point). Yes, Suzuki still sells cars here, although it suspended production of its XL-7 SUV last year and pulled the Reno and Forenza sedans from its lineup. What's left? The Grand Vitara crossover, the SX-4 compact, and a pickup called the Equator. That's a pretty flimsy lineup, but if you buy an SX-4, at least you'll get three months of free gas. Better hurry, though: The last company that tried a promotion like that was Chrysler.

America's Most Overpriced Cars

2009-07-13T09:12:00.000-04:00

From Forbes:

By Hannah Elliott

These days, car buyers have the upper hand when they walk into the showroom. They have access to dealer invoice prices and day supply data on the Internet--not to mention a recession that has spurred lowest-ever financing deals and unprecedented cash-back incentives.

But that doesn't mean every vehicle is a bargain; plenty are still overpriced. Right now, according to Vincentric, a firm that tracks vehicle ownership costs for the auto industry, several cars on sale now have market values far below their manufacturer's suggested retail price.

The Jeep Liberty, for example, has a true market value 20.9% lower than its MSRP; the Dodge Ram 2500 is worth 26% less; and the Chevrolet Trailblazer is worth 16.4% less than its MSRP.

Those three models, in particular, tell the story of the most overpriced autos currently on the market: Our entire list is comprised of vehicles manufactured by Detroit's Big Three. No foreign brands make the list, as those automakers' cars tend to be priced fairly when considering supply and demand as well as their high rankings on consumer-satisfaction surveys.

Behind the Numbers

To find America's most overpriced vehicles, we first looked at market price figures supplied by Vincentric. These are updated each month to reflect marketplace inventory, demand, rebates and incentives, and to represent the price that a buyer typically pays. We ruled out any vehicles where the gap between market price and MSRP was less than 10%--a natural breaking point in the data that left a list of about 150 overpriced vehicles to pare down.

We then used two pieces of customer-satisfaction information to better determine whether certain vehicles meet the expectations their brands promise--essentially, whether they justify their sticker price.

We used J.D. Power's 2008 Automotive Performance, Execution and Layout (APEAL) survey results, and ruled out vehicles that won their segments or scored better than two-and-a-half stars out of five: Any vehicle that scores less than 50% is likely not delivering on the thousands a consumer must shell out to buy it.

The list was further shortened by Consumer Reports' Owner Satisfaction results, data from a survey that asks owners--considering a wide range of factors, including price--whether they would buy a particular car again. Vehicles that scored less than 50 (on a scale of 100) made our list. We then ranked the remaining 15 vehicles by the amount overpriced (the difference between market price and MSRP).

The three most overpriced cars are the Dodge Ram pickup (worth 26% less than its MSRP), Mercury Grand Marquis (worth 21.4% less) and Jeep Liberty (worth 20.9% less).

Close the Gap

When it comes to the price of a car, the most important factor to consider is market value vs. MSRP, says Dave Freed, a managing partner for Vincentric. Even big cash rebates or 0% financing won't ensure you're getting the best deal on the lot, he says, and Vincentric's true-value information should give you a sense of how tough a negotiator you can be.

After that, research the top factors that cause a price to balloon out of proportion: availability, depreciation and gas prices. These points, in particular, are why American-made models comprise our entire list. Fleet sales and overproduction by GM and Chrysler has led to a dilution of resale value--and to dealers' lots overflowing with identical models. The Dodge Nitro is one of the worst offenders of this, according to Ward's, an automotive data and analysis firm.

Some cars tend to be overpriced partly because of their weakened brand image, which can lead to poor resale value. Vehicles that have this problem include the $17,430 GMC Canyon pickup truck, which has a resale value of 11.9% less than its MSRP; as well as GMC Envoy, with a resale value of 16.1% less than its MSRP.

"Where you might pay a higher price for a Honda Civic, you get it back at the end because it has a high resale value," says David Zoia, the editorial director for Ward's.

Lack of Luxury

While luxury vehicles cost thousands more than their non-luxury counterparts, none made our list. They all invariably receive extremely high satisfaction rates and APEAL scores. A Mercedes-Benz CL550 may cost a lot ($107,900 to be exact), and the E-Class costs a more reasonable $48,000, but the people who drive these cars think they're worth the price. It doesn't hurt that Mercedes keeps a tight rein on production levels too--you won't see a CL550 at your local Enterprise office anytime soon.

The $29,270 Mercury Grand Marquis sedan, however, is one to watch. Its market value is 21.4% lower than its MSRP, and it received low APEAL (2) and satisfaction (43) scores as well. So someone with her heart set on this vehicle shouldn't--in theory--pay more than roughly $23,000.

The Grand Marquis is the victim of a general move in the market away from larger, heavier sedans, says James Clark, general manager of Automotive Lease Guide, a California company that compiles automotive residual values. Those cars get worse gas mileage and cost more to insure, meaning they cost more to own in the long run. Similarly, U.S. consumers' move away from trucks and SUVs--also prominent on our list--has driven down those vehicles' true market values as well.

"It's a shift that we've experienced this past year due to the high gas prices we had last summer," says Clark. "With trucks and SUVs, a lot of those are showing up at the top of the list in terms of the highest cost to own."

America's Five Most Overpriced Cars

1. Dodge Ram 2500

2. Mercury Grand Marquis

3. Jeep Liberty

4. Dodge Nitro

5. Dodge Durango

Blazing a new trail for a muscle car

2009-07-05T15:31:00.000-04:00

Appeared in Daily Report, Monday, July 06, 2009
Blazing a new trail for a muscle car
The 2009 Dodge challenger picks up where its '70s predecessor left off, but adds a few modern tweaks
By Karl W. Ritzler, Special to the Daily Report

2009 Dodge Challenger:

Buy this car if: You want a trip back down memory lane with up-to-date technology.

Not for you if: Muscle cars are a turn off.

Look at me factor: In red, it looks like an invitation for a ticket.

Competitors: Chevrolet Camaro, Ford Mustang

What others are saying:

“The 2009 Dodge Challenger lunges off the corners and swallows the straights, its sustained thrust complemented by long riffs of resonant mechanical music.”—Edmunds.com

“While it's here, we'll enjoy the Challenger as a successful exercise in retro styling and Hemi muscle.”—Car & Driver

“What a fun, fun, hot car. It drives as fun as it looks, and that's pretty damn impressive.”—Automobile Magazine

The inferno red 2009 Dodge Challenger is a good ol' boy magnet.

From the thumbs up outside a McDonald's to a lively discussion outside a Wal-Mart about the Challenger's Hemi engine and what she'll do on the highway, guys gravitated to the car that's a faithful successor to the '70s muscle car.

Not everyone knew what they were looking at, though. Both a mom at a mall parking lot and a knowledgeable car guy both thought it was a Ford Mustang at first glance.

Right era, wrong car.

The Challenger in the new-for-2009 R/T (road and track) trim with the 5.7-liter, 370-horsepower Hemi V-8 under the hood evokes the pure muscle of earlier Challengers that toed the line with muscular Mustangs and uncaged Camaros.

Dodge's timing is nearly perfect, with the revived Camaro due out soon and the Mustang seeing its own revival. The Big 3 of Detroit's muscle car era are at it again. It's almost enough to make you forget about the nasty realities of expensive gas and automakers' bankruptcy.

The Challenger also comes in a new, wimpy 250-horsepower V-6, if you are worried about the price of gas. If not, the holdover SRT8 from '08 is still available with its 6.1-liter, 425-hp V-8.

Tune the satellite radio—a distinct upgrade from earlier times—to the '70s music channel, and the picture is complete, right down to the rumble of that luscious Hemi.

Not everything is out of the '70s, however. Start with the Challenger's profile. Below the beltline, it has the look any guy would want—what he had in the '70s. The front is that classic bandit look, with the “mask” wrapping around the headlights and grille. An air dam and fog lights reinforce the aggressive look.

The taillights are full width, topping the dual exhausts and tucked beneath a spoiler that looks like it really belongs there.

The greenhouse, however, is 21st century. It has the low look of contemporary Mopar products, giving the car an overall sleekness that one-ups its predecessor. The driver does pay a price, however, with reduced visibility.

The Challenger is built on the same platform at the Chrysler 300 and Charger sedans, but the wheelbase is four inches shorter than the Charger.

Dodge wants to make sure everyone knows there's a Hemi under the hood with bold lettering along the scoop line. Switch on the ignition, and it's a nostalgic trip back to the muscle car era. And the rumble from the exhaust rekindles the memory of 50-cent-a-gallon gas.

Stomping on the accelerator is satisfying, especially if you're next to an unsuspecting BMW. Handling is pure muscle—crisp and sure and powerful. Straight-line power is plentiful, if not race-track fast. Dodge claims zero-to-60 times of less than 6 seconds with the Hemi-equipped Challenger. But unlike its ancestor, the new Challenger is much better able to handle tight turns.

The engine is matched to a five-speed automatic transmission, but a six-speed manual is available.

Challenger buyers aren't necessarily worried about fuel economy. It's OK at 16 mpg city and 25 mpg highway, definitely on the low side for what the EPA considers a compact car.

Inside, the sport bucket seats are supportive. The black plastic and cloth and touches of chrome have been described as bland. There's no Euro, techy feel to the inside of the Challenger. Besides not being overpowered by gizmos and gadgets, the climate and audio controls are clearly marked and easy to use. Even the steering wheel stalks are uncluttered.

Don't plan on taking the gang for a ride in the Challenger, though. There's room in back only for a child car seat or a duffle bag for the gym. The trunk, however, is enormous. The 60/40 split back seat folds down for even more room, up to a maximum of 16.2 cubic feet.

Standard equipment on the R/T package includes side curtain front and rear air bags, stability and traction control, antilock brakes, air conditioning, tachometer, AM/FM/CD/MP3 audio, 18-inch aluminum wheels, performance tires and halogen headlights.

The R/T has a base price of $29,320, plus $675 destination charge. The test vehicle had only one option, satellite radio, at $195. But with the difficulties faced by the auto industry and Chrysler in particular, look for a deal.

Karl W. Ritzler is a freelance contributor to the Daily Report.

Study: Detroit lifts quality but Toyota still king

2009-06-22T16:10:00.001-04:00

From The Associated Press:

By DAN STRUMPF, AP Auto Writer

NEW YORK – Ford, General Motors and Chrysler have made strides in new vehicle quality over the last year, but they still lag behind their foreign competitors, according to a closely watched study released Monday by J.D. Power and Associates.

The initial quality of 2009 model year vehicles sold by the Detroit Three improved by an average of 10 percent from last year, the marketing and consulting company said. Industrywide, scores improved an average of 8 percent.

"The Detroit automakers are keeping their focus on designing and building high-quality vehicles, which is a precondition for long-term success," said David Sargent, vice president of automotive research at J.D. Power, in a statement.

Lexus, Toyota Motor Corp.'s luxury line, was the top brand in J.D. Power's initial quality study, an annual survey of vehicle owners that measures mechanical and design problems in the first 90 days of ownership.

Porsche was the No. 2 brand, followed by GM's Cadillac, then Hyundai and Honda.

Toyota, which supplanted General Motors Corp. as the world's largest automaker last year, also swept 10 vehicle segment awards. Its assembly facility in Higashi-Fuji, Japan, that builds the Lexus SC 430 and the Toyota Corolla took the J.D. Power's top plant award.

The worst-performing brand was Mini, with owners reporting 165 problems per 100 vehicles. Though Chrysler's scores improved year over year, it had no brands above the industry average. It tied for one segment award, with its PT Cruiser Wagon sharing the top award in the compact activity vehicle segment with Honda's CR-V. Chrysler, however, is discontinuing the car.

Cadillac and Chevrolet were GM's only two brands whose 2009 models performed above average. The four brands GM is purging under Chapter 11 bankruptcy protection — Pontiac, Saturn, Hummer and Saab — were the company's worst rated. The Chevrolet TrailBlazer and GMC Yukon SUVs were rated best in their segments.

Jamie Hresko, GM's vice president for global quality, said the automaker has worked hard to improve vehicle quality over the last five years. Chevrolet and Cadillac account for 70 percent of GM's volume, he said, and top marks for those segments are an indication the effort is paying off.

"Is it where we need to be? No," Hresko said. "To have our core brands — Cadillac and Chevrolet — be on par with Toyota, we have reached a level of quality that will allow us to change perceptions."

Ford Motor Co., the only major U.S. automaker that has not filed for bankruptcy protection or accepted government aid, also saw scores improve for three of its four brands: Ford, Mercury and Volvo. But its Lincoln brand's score fell, and only Ford and Mercury performed above the industry average.

The average industry score improved to 108 problems per 100 vehicles, down from 118 in 2008.

J.D. Power credited the improvement to several well-received new models that were launched in 2009. It said vehicles like Hyundai's Genesis, Kia's Borrego, Toyota's Venza and Volkswagen's CC performed better than their segment averages. Several redesigned 2009 models also scored well, J.D. Power said.

The scores come during a tumultuous time for the auto industry, with sales at their worst level in decades and taxpayers stuck funding the restructuring of GM and Chrysler Group LLC to the tune of billions of dollars. Although the two automakers have been pummeled by the economic crisis, many analysts have complained that a shortage of high-quality small car offerings has hobbled their performance in the down market.

GM has several new, small vehicles on the way that industry analysts say should help it better compete with established offerings from Toyota, Honda and other foreign competitors. It plans to start building the subcompact Chevrolet Cruze next year and says it will get about 40 miles per gallon. It also plans to sell the Chevrolet Spark minicar in the U.S. in 2011.

The road may be tougher for Chrysler. Cars like the sporty 500 made by its new owner, Italy's Fiat Group SpA, won't make it to the U.S. until late next year. The Auburn Hills, Mich., company plans to roll out new versions of its popular Jeep Grand Cherokee SUV and Chrysler 300 large sedan by the end of next year, along with a rechargeable electric vehicle, but these plans likely have been delayed by the bankruptcy process.

J.D. Power's rankings were based on questionnaires from 80,900 people who bought or leased new 2009 vehicles between February and May. The questionnaires ask 228 questions on issues from handling, braking and engine trouble, to seat comfort and stereo systems.

The rankings are closely watched by automakers and consumers, and are frequently used in advertising. However, some critics question whether they show any real statistical difference between automakers. Mini's ranking, for example, equates to 1.65 problems per vehicle. Top-performer Lexus had 84 problems per 100 vehicles, or 0.84 per vehicle. So on average, less than one problem per vehicle separates the best brand from the worst.

Used Car Lemons and Lemonade

2009-06-20T17:30:00.000-04:00

From US News & World Report:

By Jada A. Graves

Knowing where to place your bets with a used car can be tricky. The horror stories are all too common -- the pieced-together parts, the unexplained and unexpected sounds and smells, the bodies in the trunk ...

Okay. Maybe the last one isn't quite as common.

But buying used doesn't have to be such a gamble if you do your research. There's a wealth of online information available that can make it easier to avoid a lemon. With the federal government's vehicle defect notices and J.D. Power and Associates' reliability data the most common mechanical issues are all easy to trace. In addition, U.S. News' used car listings make the search easier for the best used car options in your area.

But we've already done at that research to help you narrow down your choices. Check out our list of the best and worst used cars. Remember, while this list is a good start, all used cars are different. Before buying, make sure you give any used car -- even one on our best list -- a thorough inspection.

Worst Used Cars:

GMC Canyon

The GMC Canyon successfully balances an imposing stance on the highway while providing coddling comfort in the cab. Reviewers also praise the 2009 model's new V8 engine for helping the Canyon effectively compete with meatier trucks in its segment. But Consumer Reports cites the Canyon's troubled reliability history as the reason it makes their Worst Used Cars list. According to Consumer Guide, Canyons from 2004 through 2008 are "underpowered for anything other than daily commuting," with pronounced road noise and a tiresome ride depending on the trim. Consumer Guide says some commonly reported problems for these model years include electrical wiring problems with the OnStar system and weak exhaust valve springs that could cause the engine to misfire.

Chrysler Sebring

As Chrysler dealerships close across the country, you can expect unbelievable prices on both new and used models of the Sebring sedan or convertible. It's just too bad that shaky reliability, poor cabin quality and disappointing performance lead most reviewers to say the Sebring was never a great buy to begin with. Consumer Reports chose the Sebring convertible as one of the Worst Used Cars based on reliability data from vehicles from 1999 through 2008. Meanwhile, CarComplaints.com shows many Sebring owners have reported problems with the engine, air conditioning and heating systems and airbags on both the 2001 and 2002 Sebrings.

Ford Explorer

The current generation of the Ford Explorer ranks mid-pack among affordable midsize SUVs, and is praised for its off-roading capabilities and a spacious cabin. But according to CarComplaints.com, car owners have recounted problems with the third generation of the Explorer -- made from 2002 to 2005 -- for cracked window panels and faulty transmissions. Consumer Guide also recounts this generation of Explorer has commonly had problems with coolant and oil leaks, rattling timing belts and ticking valves in the 4.6-liter engines.

Dodge Intrepid

The Intrepid was a Consumer Guide Best Buy or Recommended Pick almost every year of its 1998 to 2004 run. Reviewers liked the sedan's passenger and cargo room and praised the nimble handling, especially for the car's size. But a large number of Intrepid owners have reported engine troubles with the 2000 model, and the federal government previously recalled Intrepids for faulty airbags and seatbelts. Consumer Guide notes the Intrepid's most commonly reported mechanical problems include electrical problems with the cabin lights and headlights, plus an engine tapping noise when driving a V6 Intrepid.

Pontiac Aztek

The Aztek's brief four-year run in Pontiac's lineup is a testament to this midsize crossover SUV's unpopularity. We could fudge it and say that disdain for the SUV had to do with its low gas mileage or lacking cabin quality, but truly, critics say the biggest problem with the Aztek was its ungainly dimensions. According to Britain's Daily Telegraph, the Aztek's obtuse shape was "proof that Americans do ugly better than anyone else." On our side of the Atlantic, Consumer Reports lists the Aztek on its Worst Used Cars and TIME Magazine dinged the 2001 model as one of its "Worst Cars of All Time." According to TIME's writers, "This car could not have been more instantly hated it if had a Swastika tattoo on its forehead. ... a bulky, plastic-clad mess. ... The Aztek violates one of the principal rules of car design: We like cars that look like us." But if you can get around the Aztek's unconventional look, reviewers admit the SUV is a competent performer with stable handling and minimal road noise.

Best Used Cars:
2009 Honda Civic
2009 Honda Civic

Honda Civic

There's a reason the Civic shows up on many auto experts "Best" lists: When it comes to outstanding quality, safety and dependability, there are few better cars. Cars.com notes the Civic is one the most popular used cars sold from July to September of 2008, while Consumer Reports chose it as the best used car in the small car class because its "reliable, economical and fun to drive." CarsComplaints.com finds that some Civic owners have had transmission problems with the 2001 and 2002 models, but the current generation Civic, first sold in 2006, has a strong reliability record and few federal government defect notices.

Subaru Impreza

If you're looking for a distinctive design or thrills on the road, the Impreza probably isn't your first choice. But critics say the car is a safe choice, literally and figuratively. Writers praise the Impreza's secure dynamics with standard all-wheel drive, and highlight the safety features and strong safety scores from the federal government and insurance industry. J.D. Power and Associates lists the 2006 Subie Impreza as a top pick in its 2009 Vehicle Dependability Survey. Although Cars.com reports the 2009 Impreza has one of the best resale values (which means finding one that's used and cheap could be a challenge), Edmunds suggests an Impreza made between 1998 and 2001 as one of the best used cars for those on a tighter budget. "We found high-mileage (150,000-plus) 2.5RS models starting at around $4,500 on Auto Trader," they report. There's an even better deal in U.S. News' used car listings: a 1999 Impreza with 98,746 miles for only $3,995.

Toyota Prius

With every model year the Prius seems to make advancements in fuel efficiency. But even an older model Toyota Prius offers outstanding gas mileage. In 2001, the first year the car was available in the United States, the EPA gave it a combined rating of 41 mpg. Cars.com notes the 2009 Prius has one of the strongest resale values, and J.D. Power and Associates lists the 2006 model as the most dependable car in the compact category in its 2009 Vehicle Dependability Survey.

Ford Mustang

Car writers say nothing looks, drives or feels like a Ford Mustang, whether you buy one new or used. More importantly, buying used rather than new will help you get that retro-cool vibe the current Mustang is known for. According to Edmunds, any Mustang made between 1986 and 2004 is perfect "if you prefer a V8 rumble to drown out the rattles from your cheap ride's aging interior," and you should be able to find one from that time period for less than $5,000. Cars.com reports the Mustang is one of the top-10 most popular used cars based on reports from dealers and private sellers.

Mazda MX-5 Miata

It's sexy and affordable. It corners on a dime, and with an impressive reliability record, it's built to last. While it's not as powerful as some affordable sports cars, numerous automotive experts say the Mazda MX-5 Miata's nimble handling is great no matter what model year you choose. Edmunds notes, "this little roadster proves that the right sports car formula has real staying power," and notes that first generation Miata's made between 1990 and 1997 "are readily available for well under $5 grand." Not only that, but J.D. Power and Associates chose the 2006 Miata as the most reliable compact sports car in its 2009 Vehicle Dependability Survey, and Consumer Reports selected the Miata as its Best Used Sports Car.

High court won't block Chrysler sale

2009-06-09T20:37:00.000-04:00

From The Associated Press:

By MARK SHERMAN, Associated Press Writer

WASHINGTON – The Supreme Court on Tuesday cleared the way for Chrysler LLC's sale to Fiat, turning down a last-ditch appeal by opponents that included consumer groups and three Indiana pension plans.

The court rejected a plea to block the sale of most of Chrysler's assets to the Italian automaker. Chrysler, Fiat and the Obama administration had warned that the high court's intervention could have scuttled the sale.

A federal appeals court in New York had earlier approved the sale, but gave opponents until Monday afternoon to try to get the Supreme Court to intervene.

Justice Ruth Bader Ginsburg ordered a temporary delay just before a 4 p.m. deadline on Monday. A little more than 24 hours later, the court freed the automakers to complete their deal.

The opponents include a trio of Indiana pension plans, consumer groups and individuals with product-related lawsuits.

The court issued a brief, unsigned opinion explaining its action. To obtain a delay, or stay, someone must show that at least four of the nine justices find that the issue raised is serious enough to warrant hearing a full appeal and that a majority of the court will conclude the lower court decision was wrong.

"The applicants have not carried that burden," the court said.

Indiana Treasurer Richard Mourdock expressed disappointment with the decision and said options seem limited for opponents of the sale. "Obviously the supreme court of the land is the supreme court of the land," Mourdock said. "The United States government has, I continue to believe, acted egregiously by taking away the traditional rights held by secured creditors."

The White House issued a statement applauding the decision: "The Chrysler-Fiat alliance can now go forward, allowing Chrysler to re-emerge as a competitive and viable automaker."

The challenge was filed by the Indiana pension funds and other investors who claimed the sale unfairly favored Chrysler's unsecured stakeholders ahead of secured debtholders like themselves.

Chrysler has been working to complete the sale of its assets to Fiat before a June 15 deadline, a key element in its restructuring plans.

Early Tuesday, the pension plans seized on comments from Fiat officials that they would not walk away from the deal even if June 15 were to pass without completing the sale. The plans tried to persuade the justices that there was no reason to rush to meet that deadline.

But Chrysler, Fiat and the Obama administration stressed in response that Chrysler was losing $100 million a day and that the deal automatically terminates in less than a week, with no guarantee that a new agreement would be reached.

The court did not consider the merits of the opponents' arguments, only whether to hear their full-blown appeal.

Also on Tuesday, Chrysler returned to bankruptcy court to get approval to terminate 789 dealer franchises.

More than 25 attorneys representing hundreds of dealers from across the country opposed Chrysler's request, arguing that little would be gained by ending the franchises. The company said the move was a necessary part of its plan to cut costs and quickly emerge from Chapter 11 bankruptcy.

Many of the dealers were selling the last cars on their lots and preparing to shut their doors for good at the end of the day, while others planned to sell used cars or other brands after severing ties with Chrysler.

GM to sell Saturn brand to Penske dealership chain

2009-06-05T12:33:00.001-04:00

From the Associated Press:

By Dan Strumpf and Tom Krisher, AP Auto Writers

NEW YORK (AP) -- General Motors Corp. has a tentative deal to sell its Saturn brand to former race car driver and dealership group owner Roger Penske, both companies said Friday.

Penske has signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn's 350 dealerships, the companies said. Penske said that he expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for the immediate term.

"I would expect that the model that we're putting together, the distribution model, will be profitable day one," Penske said in an interview with The Associated Press. "We'll have less costs. We'll not be in the manufacturing side."

Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter.

Penske Automotive Group also distributes Daimler AG's Smart subcompacts in the U.S., but Smart has its own dealership network and Saturn dealers will continue to exclusively distribute Saturn vehicles, Penske said.

Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs, the companies said. But Penske said he is in talks with manufacturers around the world about building Saturn cars in the future.

"We will be selling as many GM cars -- a many GM-produced cars -- under the Saturn brand as possible," Penske told reporters in a conference call Friday.

GM had announced plans earlier this year to sell the Saturn brand. The car maker launched Saturn in 1990 with the tagline "a different kind of car company." GM's hope was that Saturn would attract younger buyers with smaller, hipper cars to better compete with Japanese imports. It built a new plant in Spring Hill, Tenn., devoted to Saturn production.

The factory had more flexible work rules than traditional GM plants for the employees who built the cars.

Despite a cult-like following that drew thousands to annual reunions in Spring Hill, the brand never made money for GM. The factory stopped making Saturns in 2007 and currently builds only the Chevrolet Traverse.

As GM focused more on high-profit pickup trucks and sport utility vehicles, Saturn began to languish in the late 1990s. Then in 2006, car buyers began to find Saturn's new models more appealing. But after a good year in 2007, sales dropped 22 percent last year as the U.S. car market withered.

Today, Saturn production is scattered at plants across the U.S. The Aura is built at GM's factory at Kansas City, Kansas. The Outlook is built in Lansing, Mich., while the Vue is built in Ramos Arizpe, Mexico.

The Saturn Sky roadster is built in Wilmington, Del., but that plant is scheduled to close in July and the model will be discontinued. The Saturn Astra was imported from GM's plant in Antwerp, Belgium, and was discontinued last year.

Penske Automotive will take over the separate Saturn parts factory in Spring Hill, which will continue to make Saturn components.

Penske Automotive owns the second-largest U.S. automobile retail chain by sales and consistently scores high in customer satisfaction surveys. the company also has race teams in the IndyCar, NASCAR and Grand-Am series. Penske received wide acclaim for heading Detroit's successful effort to host the 2006 Super Bowl.

Carl F. Galeana, who owns two Saturn dealerships north of Detroit, said Friday he was thrilled that Penske would be the Saturn buyer.

"Roger Penske is an icon in the business world," Galeana said. "I've worked with him personally. Nobody works harder than Roger Penske."

Galeana said the fact that Penske is interested in Saturn means the brand has value.

"It allows Saturn to get back to its original roots, which is to be an independent car company," he said.

GM, which filed for bankruptcy court protection on Monday, has said it plans to shed its Saturn, Hummer, Pontiac and Saab brands. Earlier this week, GM said it found a buyer for Hummer in China's Sichuan Tengzhong Heavy Industrial Machinery Co.

However, any such deal would require Chinese Commerce Ministry approval, and reports in state-run newspapers Friday said Sichuan Tengzhong had not yet obtained such an approval.

Tom Krisher reported from Detroit.

Chinese buyer will expand Hummer lineup, keep dealers, CEO says

2009-06-03T12:44:00.000-04:00

From Automotive News:

By Jamie LaReau
The Chinese manufacturer planning to buy General Motors' Hummer will expand the brand's lineup -- including alternative powertrains -- and retain its U.S. dealers, Hummer CEO Jim Taylor said today.

Bike for the Jetson set

2009-06-03T12:02:00.000-04:00

Appeared in Daily Report, Tuesday, May 26, 2009:

Lawyer motorcycle enthusiast adds a space-age Monotracer to his collection

By Karl W. Ritzler, Special to the Daily Report

There's both a practical side and a strong dash of fantasy to Shinji Morokuma's newest motorcycle, a space-age ride that looks more like a wingless airplane than a bike.

The director of the Georgia Supreme Court's Commission on Dispute Resolution is a self-admitted motorcycle nut. He'd love to drive a bike to work every day, but bugs, rain and heat can make a mess of his suit and tie.

The solution? An enclosed motorcycle. For Morokuma, it's a Monotracer, the only one of its kind in the United States and one of just five in the world.

“I intend to ride it to work most days,” he said.

That's the practical side. Most people don't spend as much as $80,000 on a motorcycle, let alone one that George Jetson might ride.

“It's a way for me to have an exotic vehicle at a relatively cheap entry fee,” compared with a Ferrari, for example, said Morokuma. “It's a fantasy. … I'm looking forward to seeing the faces of valets when I pull up” at a fancy restaurant.

The company's goal is to build a sporty vehicle that combines the fuel efficiency and touring style of a motorcycle while offering an enclosure that makes it usable every day, all year, like a sports car. “In short, it's the ideal vehicle for year-round fun and efficient daily commuting,” the company says in its brochure.

Morokuma's motorcycle is heavier than conventional bikes, and more top-heavy, so it has pop-down stabilizer wheels. Two passengers can ride inside, sitting upright. And unlike other motorcycles, the Monotracer has foot controls for the clutch and brakes.

It gets 50 to 60 miles per gallon—“a good vehicle for times when fuel prices are high,” said Morokuma.

The Monotracer isn't Morokuma's first unusual motorcycle. Several years ago, he purchased an exclusive Alligator Motorcycle built by auto racing legend Dan Gurney. That purchase, Morokuma said, helped him recover from the death of his wife from cancer.

“It was a talisman for my sanity,” he had said.

The Monotracer “goes back to the same feeling,” he said. “When an opportunity arises, when something is within reach, take the opportunity to pursue your interests and fulfill your fantasy. It was a crazy decision, but the opportunity to have a unique driving experience was too tempting.”

Morokuma's interest in the Monotracer dates to the 1990s, when he saw a futuristic movie in which police officers rode enclosed motorcycles.

“I thought they were riding movie props,” he said. “But I found out they were real motorcycles.”

The vehicles were Ecomobiles, predecessors to the Monotracer built by the same company, Peraves AG of Winterthur, Switzerland.

Morokuma said he entertained the fantasy of owning one and followed them on-and-off in motorcycle publications and blogs. About two years ago, the blogs were abuzz with Peraves' new vehicle, the Monotracer.

“I thought it looked better,” Morokuma said, and he put down a deposit with a special introductory discount. He took delivery two weeks ago.

In the meantime, Morokuma made two trips to Brno, Czech Republic, for on-track and on-road training—first on Ecomobiles and later on the Monotracer.

Recently, Arnold Wagner, the chief executive officer of Peraves, accompanied Morokuma's Monotracer when it was delivered. He came along to give Morokuma a refresher course on his new bike, as well as to clear the vehicle through customs and settle all the paperwork and emissions certifications. That included a trip to a Georgia State Patrol office, where officers verified the VIN number was properly displayed and gave the bike a thorough look over.

“People are curious about the vehicle and were willing to help us,” Morokuma said.

Getting insurance was a little easier. After explaining what his new vehicle was, Morokuma was able to include it on the policy with the rest of his vehicles.

Peraves switched to the Monotracer after a fire damaged Ecomobile body molds in 2005. It had built about 100 Ecomobiles.

Many of the mechanical components are similar to the Ecomobile, Wagner said. The engines are from BMW. Steering is motorcycle handlebars. The body, however is all new. “I'm coming from aircraft design,” said Wagner. “The old model looks like the fuselage of an airplane,” including a tail fin.

The new body, largely designed by a Czech industrial design student as his final project, is sleeker. It's made from layers of epoxy resin and carbon weave cloth, the same as in a glider cockpit, and molded into shape. That process limits production to about 120 Monotracers a year. However, Wagner said, he is in discussions with major motorcycle manufacturers for a mass-production version.

Wagner said the Monotracer is priced from about $50,000 to about $80,000 fully loaded. That will include features unusual for motorcycles, such as a trunk, air conditioning, GPS units, antilock brakes, three-point seat belts and cruise control.

The stabilizer wheels are needed to keep the bike, which can weigh up to 1,670 pounds, upright when stopped. The wheels pop up and down with a toggle switch. The bike can travel up to about 60 mph with the stabilizer wheels lowered. Wheels up and on a track, it's capable of 170 mph, and it can go from zero to 62 mph in about 4.8 seconds.

Morokuma said the stabilizers are one reason it takes some getting used to. “You have to be close to straight up and down to raise the wheels. … You have to get going on four wheels, then raise them,” he said.

“We drove two-and-a-half hours on the freeway, and it was very comfortable,” Morokuma said. And helmets weren't necessary because most states say you don't need them in enclosed motorcycles.

“People look at this and say, 'This is crazy,'” Wagner said, then pointed to a passing SUV with only the driver inside and commented, “This is crazy.”

Karl W. Ritzler is a freelance contributor to the Daily Report.

General Motors files for bankruptcy protection

2009-06-01T08:19:00.000-04:00

From Associated Press:

NEW YORK – General Motors has filed for bankruptcy protection as part of an Obama administration plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.

The fallen icon of American industrial might filed its Chapter 11 petition in New York on Monday. It marks the fourth-largest bankruptcy in U.S. history and the largest for an industrial company.

GM's reorganization plan will rely on up to $30 billion of additional financial assistance from the Treasury Department. That's on top of the $19.4 billion in taxpayer money GM already has received in the form of low-interest loans.

Visteon files for bankruptcy to protect U.S. operations

2009-05-28T09:23:00.001-04:00

From Automotive News and Reuters:

Visteon Corp., the auto-parts maker that hasn't posted an annual profit since being spun off from Ford Motor Co. nine years ago, said on Thursday it had filed for Chapter 11 bankruptcy protection for its U.S. operations.
Visteon said Ford has committed to ensure long-term continuity of supply and to support debtor-in-possession (DIP) financing for the restructuring efforts.
Ford is still Visteon's biggest customer and accounted for about 31 percent of its $1.35 billion of sales last quarter.
"During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment," Visteon CEO Donald Stebbins said in a statement.
No Visteon subsidiaries or joint ventures outside the United States are part of the filing in the U.S. Bankruptcy Court for the District of Delaware, the company said.

UAW says it has tentative contract with GM

2009-05-21T18:28:00.000-04:00

From Automotive News:

By David Barkholz

The UAW said that it has reached a tentative new contract with General Motors and the U.S. Treasury aimed at helping the automaker restructure.
The terms include modifications to a UAW-administered retiree health trust known as a Voluntary Employee Beneficiary Association, the union said in a statement today.
Terms were not released, pending a ratification vote by rank-and-file union members at GM.
The UAW agreed to the concessions as GM faces a June 1 deadline to prove its viability to the federal government or face Chapter 11 bankruptcy protection. Along with the labor concessions, GM and the U.S. Treasury also are asking GM bondholders to forgive about 90 percent of that unsecured debt.
Treasury has kept GM operating with about $15.4 billion in bailout loans.

The man-mobile: You don't buy a BMW 528i for its wood trim or leather seats; this midsize sedan is a driver's car

2009-05-18T07:43:00.001-04:00

As published in The Daily Report:

Monday, May 18, 2009

By Karl W. Ritzler, Special to the Daily Report
“This is a man car,” said my wife shortly after sliding into the passenger seat of the BMW 528i.

I agree, starting with the six-speed manual transmission—in a $54,000 car—and the 3.0-liter, 230-horsepower inline six-cylinder engine. It has a manly feel, synchronizing your feet and hands to shift through the gears, giving it enough gas to push the needle on the tachometer and sound an exhaust note that you can't hear with an automatic.

From her preferred spot in the passenger seat, my wife assumes the job of pressing buttons, opening storage areas and assessing cupholders in test vehicles. The verdict on the 528i: acceptable, except for the cupholders. There are only two, and they pop out from the dash on the passenger side, offering not only a clumsy reach but also too many spilling opportunities. The elegant leather and wood trim were masculine, she said, but still appealed to her good taste and sense of style.

But you don't buy BMWs for the cupholders or the view from the passenger side. The 528i is a driver's car. From the outside, it has the classic sporty grille of a BMW—ready to leap down the road—and finishes off with twin chrome-tipped exhaust pipes. The shifts are as smooth or racy as you make them, and the engine responds with verve. Handling is taught, as you would expect in a sporty German car. There's barely any sway on sharp side-to-side maneuvers, just enough to cause your latte to slosh around.

An open freeway or mountain road ahead is a pure joy as you finally can upshift all the way to sixth gear. The 528i hums along in the left lane like it was on the Autobahn. Atlanta freeway traffic, however, puts a damper on straight-ahead driving and requires constant shifting as you stop and start and poke along Georgia 400 or the Perimeter.

One of the tricks is getting started. Unlike other high-end cars with keyless ignition where you just push a button to start the engine, it's a three-step process: key in the ignition, press your left foot down on the clutch, then press the starter. On the positive side, the 528i is equipped with a device they should have put on cars with stick shifts when I was learning to drive. When you're stopped heading uphill, just tap the brake, and it will hold while you hit the gas and release the clutch to take off—no fear of sliding into the car behind you.

The tachometer and speedometer are equal and side-by-side in this instrument cluster. And for the environmentally aware, there's even a small gauge showing how your miles per gallon react to your driving. The EPA estimates mileage at 18 mpg city and 28 mpg highway, a bit on the low side for midsize cars. There are lots of controls on the three stalks on the steering wheel: lights, wipers, cruise control, audio and phone.

The trunk is deep, and there's even a diagram showing how to stow four golf bags. In this car, the rear seats do not fold down to increase cargo space. You don't take a BMW to Home Depot to buy lumber.

It's not just the driver who can enjoy this ride. The optional multicontour seats are long-haul comfortable in soft leather. Even in the back seat, you sink slightly into a form-fitting bucket seat, and you can stretch your legs as well. A massive center console in the rear makes a fine separation for two people, but I wouldn't want to be the one stuck in the middle if five people need to ride.

The one advantage of shifting gears is that the driver can't take time to mess around with the still-annoying iDrive system that controls climate, audio, car information and, when equipped, a navigation system. Better to preset your air conditioning and radio station at home and leave it alone.

The test car's base price was $45,800, plus a $825 destination charge. A sport package of 18-inch wheels and performance tires, sport suspension and multicontour seats added $2,900. A package with garage door opener and auto-dimming mirrors added another $2,400. You even pay extra ($400) for an iPod and USB adapter, among other things, raising the sticker to $53,920. The car is virtually unchanged from 2008.

Standard equipment includes halogen headlights and foglights, antilock brakes, stability and traction control, AM/FM/CD/MP3 player and airbags all around. The car earned three of five stars for the driver's side in frontal crash tests, but five stars for the passenger and for both seats in a side crash.

Karl W. Ritzler is a freelance writer who contributes to the Daily Report.

Toyota rolls out new Prius amid hybrid price war

2009-05-18T07:36:00.001-04:00

From The Associated Press:

By YURI KAGEYAMA
AP Business Writer

TOKYO — Toyota rolled out the revamped Prius on Monday, and said it already had 80,000 advance orders in Japan for the remodeled hybrid amid intensifying competition with Honda's rival offering, the Insight.

The world's largest automaker said it aims to sell up to 400,000 units globally a year of the car.

"We are resting the future of cars in this model," said incoming president Akio Toyoda, the grandson of the company's founder, who drove the new model onto a stage at a packed Tokyo showroom.

Both Toyoda's presence and the new Prius are symbolic of Toyota Motor Corp.'s pursuit of a turnaround from its worst annual loss since its 1937 founding.

The Prius, now in its third generation since its 1997 introduction, is the best-selling gas-electric hybrid in the world, racking up a cumulative 1.256 million units sold in more than 40 nations and regions. The new Prius will be sold in 80 nations and regions, Toyoda said.

But now Toyota faces a challenge from Honda Motor Co., whose more cheaply priced Insight has sold briskly since it was introduced in Japan in February. In April, the Insight ranked as the top-selling vehicle in Japan — the first time a hybrid clinched that spot.

Toyota said its Japan prices for the Prius would start at 2.05 million yen, or about $21,600, less than its predecessor model's Japan base price.

But in an unusual move aimed at competing against the Insight, Toyota also said it will continue to sell the current Prius in Japan — mainly to corporate and rental customers — and cut its price to 1.89 million yen, the same price as the Insight.

In Japan, Toyota is hoping to sell 10,000 of the new Prius a month, and an additional 2,000 of the cheaper old-style Prius.

The Japanese government is offering incentives to encourage people to buy green cars, which is expected to help the Insight and Prius sales here.

Christopher J. Richter, senior analyst with Calyon Capital Markets Asia in Tokyo, said Toyota may be making a mistake by competing with Insight's price because the Prius is a much bigger car than the Insight compact and gets better mileage.

"Given that the two vehicles are different animals, I think that probably isn't the way to go," he said. "It probably damages the Prius brand image by trying to chase after what is an inferior car in price."

Richter also noted that Toyota faces some challenges in selling the Prius not only because of the competition from the Insight but because of the global slowdown and a decline in oil prices.

Ravaged by a global slump, tight credit in the critical U.S. market and the strong yen, Toyota racked up a larger-than-expected 436.94 billion yen ($4.4 billion) loss for the fiscal year ended March 31, a dramatic reversal from the record profit of 1.72 trillion yen it earned the previous year.

Toyota had already given the U.S. prices for the 2010 Prius — starting at $22,000, unchanged from the base price for the 2009 model. It is also promising a more basic U.S. model as well for later this year starting at $21,000.

The Insight, which is smaller than the Prius, carries a lower manufacturer's suggested retail price of $19,800 for the base model in the U.S.

Honda has sold 19,492 Insights in Japan since it went on sale in February, and 2,665 in the U.S. since March.

"We've come up with a price that we think is close to what will make people happy," Toyoda said.

Toyoda, 53, was tapped in January to take the helm at the world's biggest automaker, the first time in 14 years it has turned to the charisma of its founding roots for top leadership — mainly to bring employees and affiliates together and steer the automaker through deep troubles.

The new Prius gets a combined 50 miles per gallon, compared with 46 mpg for the 2009 model, according to Toyota.

It does even better under Japanese government testing standards. Hybrids, by going back and forth between a gasoline engine and electric motor, tend to offer better mileage in slow-speed and stop-and-go driving common on Japanese streets, rather than on highways — just the reverse of conventional cars.

Toyota is promising 38 kilometers per liter, which converts to 90 miles per gallon, in Japan, for the latest Prius.

Underlining its determination to compete with the Insight, Toyota showed a clip from its Japan TV ad at Monday's Prius event, which showed Superman zooming around a city before returning to his human form as Clark Kent, the reporter, with a scoop about the car's low price.

Toyoda hinted there may be a wait for the Prius.

"I already ordered mine," Toyoda said. "If you want yours before the end of the year, go rush to your dealer."

GM eliminating about 1,100 dealer franchises

2009-05-15T13:03:00.001-04:00

From the Associated Press:

By DAN STRUMPF and TOM KRISHER, AP Auto Writers

NEW YORK – A day after Chrysler LLC moved to eliminate nearly 800 dealerships, General Motors Corp. on Friday told about 1,100 U.S. dealers their franchises will be terminated late next year.

The cuts are part of a larger GM plan to slash 2,600 of its 6,200 dealerships as the automaker tries to restructure to become profitable again. The moves likely will cause the loss of thousands of jobs across the nation. Governments will lose thousands of dollars in tax revenue as dealerships are forced to close.

Both Chrysler and GM say they are cutting dealers because they have too many outlets that are too close to each other, and the competition drives down prices. But as the ranks of dealers thin and competition decreases, that likely will mean higher prices for car and truck buyers.

As GM and Chrysler lost market share to Japanese and other overseas brands, the automakers, as well as Ford Motor Co., ended up with too many dealerships. Many are barely getting by and can't afford to upgrade their facilities or hire the best personnel to compete with the Japanese, who have far fewer dealerships.

With fewer dealers, consumers won't see as much competition, said Aaron Bragman, an automotive industry analyst with the consulting firm IHS Global Insight.

"No longer will people be able to shop between three or four dealers within 15 minutes of each other for the best cutthroat price," he said.

GM knows it will lose sales in the short-term, but over the long haul, fewer dealers will mean higher per-vehicle profits, Bragman said.

"As the dealers go, so goes the company in terms of financial health," he said.

In the 1980s, GM, Chrysler and Ford controlled more than 75 percent of U.S. sales, but that dropped to 48 percent last year. GM alone held nearly 51 percent of the market in 1962, but only 22 percent last year.

Bragman said GM likely will go into bankruptcy protection on June 1, but it's starting to negotiate deals ahead of the filing to speed up the Chapter 11 process.

"GM has been ... acting as if they are negotiating a prepackaged bankruptcy," he said.

Chrysler memo says 789 dealers will close by June 9

2009-05-14T10:24:00.001-04:00

From Automotive News:

By Bradford Wernle

Chrysler LLC will eliminate 789 dealers, or 25 percent of its U.S. network, by June 9, according to a memo sent today to retailers in one sales region.
Dealers are learning of their fate via UPS letters to be delivered this morning, the memo says.
Dealers will get 23 business days for a "court review" of their cases, according to the memo, from a sales manager to district dealers.
"All of this information is subject to change," the memo says. Chrysler officials said they could not comment until documents are filed in U.S. Bankruptcy Court.
"Chrysler will not be required [per bankruptcy law] to buy back the vehicles or tools and parts from rejected dealers," the memo says. "We will match you with an accepted dealers(s) to buy your parts, tools and vehicles."
The memo says Chrysler will send letters to 4 million customers of the rejected dealers after June 9, when the stores are to close.
In the memo, Chrysler says that after the closings, 80 percent of its dealers will carry all three brands under one roof, compared with 62 percent currently. Since early 2008, Chrysler has been consolidating its dealer body under Project Genesis, a plan to put the Dodge, Jeep and Chrysler brands under one roof wherever possible.

Stanley Fish: Car Nuts

2009-05-11T09:05:00.003-04:00

Opinion in The New York Times:

By Stanley Fish
Published: May 10, 2009
The news regarding the auto industry has been dire, but magazines devoted to car buffs just roll along. Read full article.

VW, Porsche to merge

2009-05-07T08:05:00.000-04:00

(CNN) -- Iconic German automakers Volkswagen and Porsche have reached an agreement to merge operations -- the latest move in an industry that has seen whiplash changes in recent weeks.
Porsche, which recently debuted its luxury sedan Panamera, will merge with Volkswagen.

The two companies have been in talks in recent weeks about merging manufacturing operations. A statement released on the Porsche Web site said the management boards of Porsche and Volkswagen have agreed in principle for the creation of an integrated car manufacturing group.

"In the final structure ten brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured," the statement said.

Porsche had been aggressively trying to take over Volkswagen, building a 51 percent stake in the company with ambitions to raise the stake to 75 percent. But Porsche also built a debt of nearly $12 billion as the world automotive market began to shrink during the financial crisis.

The agreement includes undisclosed "capital measures," the Porsche statement said.

The move comes as Chrysler filed for bankruptcy protection and Italian carmaker Fiat has announced ambitions to combine with Chrysler and GM Europe operations to form one of the world's largest car companies.

GM details plans to wipe out current shareholders

2009-05-06T09:55:00.000-04:00

From Reuters:
DETROIT (Reuters) -- General Motors on Tuesday detailed plans to all but wipe out the holdings of remaining shareholders by issuing up to 60 billion new shares in a bid to pay off debt to the U.S. government, bondholders and the UAW.
The unusual plan, which was detailed in a filing with U.S. securities regulators, would only need the approval of the U.S. Treasury to proceed since the U.S. government would be the majority shareholder of a new GM, the company said.
The flood of new stock issuance that could be unleashed has been widely expected by analysts who have long warned that GM's shares could be worthless whether the company restructures out of court or in bankruptcy.
The debt-for-equity exchanges detailed in the filing with the Securities and Exchange Commission would leave GM's stock investors with just 1 percent of the equity in a restructured automaker, ending a long run when the Dow component was seen as a bellwether for the strength of the broader U.S. economy.
GM shares closed on Tuesday at $1.85 on the New York Stock Exchange. The stock would be worth just over 1 cent if the first phase of GM's restructuring moves forward as described.
Once GM has issued new shares to pay off its debt to the U.S. government, bondholders and its major union, it said it would then undertake a 1-for-100 reverse stock split.
Such a move would take the nominal value of the stock back to near where it had been before the flood of new shares. But in the process, GM's existing shareholders would see their stake in the 100-year-old automaker all but wiped out.
The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders.
That borrowing would take GM's debt to the U.S. government to $18 billion, and the automaker said it expected to have to borrow a total of nearly $27 billion.

Non-guilty pleasure: The Tahoe Hybrid gets a respectable mpg for a full-size SUV

2009-05-05T21:31:00.001-04:00

As appeared in The Daily REport:

By Karl W. Ritzler, Special to the Daily Report

A full-size SUV without the guilt. Well, almost.

The 2009 Chevrolet Tahoe is big and comfortable. It's got lots of power and towing capability. And it gets a combined city/highway 21 miles per gallon, compared with a combined 16 mpg for the gasoline-only version.

OK, so that's not Toyota Prius class, but we are talking about a full-size SUV that doesn't feel like a compromise. Along with its General Motors siblings from Cadillac and GMC, it is the biggest vehicle out there available as a hybrid.

Chevrolet introduced the Tahoe Hybrid in 2008, and it describes the hybrid system “two mode.” Electric motors can start the car off, up to about 30 miles per hour, Chevrolet says, to boost in-city mileage. In real driving, the gasoline engine kicked on at about 15 mph. At highway speeds, the engine uses GM's active fuel management, under which four of the V-8's cylinders are shut off when all you need to do is maintain speed. That boosts highway mileage.

The 6.0-liter V-8 produces 332 horsepower and is augmented by two 60-kilowatt electric motors. The system also employs other, standard hybrid technologies, such as regenerative braking, which recharges the batteries when the brakes are applied.

A continuous hybrid transmission blends the gasoline and electric power plants. The result is a ride that is smooth, but not horsepower heavy. Other reviewers' comparisons with the standard Tahoe showed better performance in the Hybrid than in a Tahoe equipped with a smaller V-8.

The Tahoe Hybrid moved out smoothly for a heavy (5,617 pounds) vehicle, and there was never any question about its ability to merge into freeway traffic or ride in the left lane. Towing capacity is a respectable 6,200 pounds—down from more than 8,000 pounds for a gas-only Tahoe.

The Hybrid, because of the extra weight of its batteries and engines, is only slightly different from its gas-only counterpart. There are some lighter body elements, more aerodynamic additions and low rolling resistance tires.

This is a vehicle you'd want to take on a family vacation, with a caveat only if you plan to take a lot of gear and people. Either is OK, but not both.

The front seats—leather is standard in the Hybrid—are comfortably firm, just right for piling on the miles. A navigation system and satellite radio/CD/Bose premium sound system—all standard—make the trip enjoyable from the front seat, while the optional ($1,295) rear seat entertainment system keeps the back-seat passengers entertained. A rearview camera, also standard, makes backing up easier in a vehicle that can fill a driveway. A parking assist system beeps when you get too close to objects or cars in the next parking space.

The squeeze comes with the third row. It's a bit crowded back there for full-size people, and the seats eat into the rear cargo area. While many competitors have third-row seats that fold flat, you have to remove the Tahoe's seats to get full benefit of the 60.3 cubic feet of cargo room. With the third row in place, there's room for a load of groceries, but not the camping gear.

And you'll be safe. The Tahoe has five-star crash ratings all around as well as head curtain side air bags for all three rows. Antilock brakes and stability and traction control are standard.

The test vehicle had a base sticker price of $50,455 for the two-wheel drive Hybrid, not including destination charges. Beside the entertainment system, the only other option on the well-appointed vehicle was a power sliding sunroof ($995). There is only one trim level. That compares with a starting base price of $36,680 for the least expensive of three trim levels for the gasoline-only Tahoe, where buyers also have a choice of three engines, 4.8-liter 5.3-liter and 6.2-liter V-8's. Four-wheel drive is available in both Hybrid and gas-only Tahoes for $3,000 to $4,000 extra.

2009 Chevrolet Tahoe Hybrid:

• Buy this car if: You want a full-size sport utility and still want to feel good about the environment.

• Not for you if: You really want to make a difference about the environment.

• Look-at-me factor: The Hybrid labels all over the vehicle.

• Competitors: Cadillac Escalade Hybrid, GMC Yukon Hybrid, BMW X5 (non-hybrid), Acura MDX (non-hybrid)

• What others are saying: “Prius drivers may use less gas on their trips around town, but Tahoe Hybrid drivers will be able to bring more toys and people along, and arrive in comfort and style.”—US News & World Report

Karl W. Ritzler is a freelance contributor to the Daily Report.

GM accelerates Saturn shutdown to this year; no plans to rebadge Pontiac models

2009-04-29T08:15:00.000-04:00

From Automotive News:

By Richard Truett

General Motors plans to build the last Saturn vehicles this year, two years earlier than planned, as it speeds up plans to shed dealerships and divisions, CEO Fritz Henderson said today.
The Saturn brand still may survive if GM can sell it to another automaker or investor, but GM no longer will build vehicles for Saturn after the 2009 model year, Henderson said on a conference call.
In its Feb. 17 plan submitted to the U.S. auto task force, GM planned to build Saturn vehicles through 2011. Under a revised plan announced today, GM will shed Pontiac next year, leaving the automaker with just four U.S. brands: Chevrolet, Cadillac GMC and Buick.
Henderson also said that GM no longer will build Hummer vehicles after the current model year.

Pontiac is done by end of 2010

2009-04-29T08:13:00.001-04:00

From AutoWeek:

By Greg Migliore
Pontiac--the brand famous for the GTO, the Firebird, the Star Chief and most recently, the Solstice--is dead. It will be phased out by the end of 2010 as part of sweeping cuts announced Monday by General Motors as it tries to remake itself into a smaller company with fewer plants, workers and dealers.
GM said it will concentrate on four U.S. brands--Chevrolet, Cadillac, Buick and GMC--and that it expects to resolve the fates of Hummer, Saab and Saturn by the end of 2009. It also announced that it will offer stock to its debt holders in an effort to reduce its large debt load. GM warned that it expects to file for Chapter 11 bankruptcy if it does not get enough tenders for the exchange by June 1, but the automaker maintained that it prefers to not have to go into bankruptcy.

GM prepares to announce Pontiac closure next week

2009-04-24T14:29:00.000-04:00

From Automotive News:

Jamie LaReau

General Motors may announce early next week that its Pontiac brand will be eliminated, said a source familiar with the company's plans. The announcement will be made as part of an updated viability plan to the U.S. auto task force, the source said.
A second source indicated earlier this week that GM was considering phasing out the brand instead of sticking with the current plan to have it continue as a niche marque.
GM, surviving with $15.4 billion in U.S. government loans, had planned to keep Pontiac along with mainstream brands Buick, GMC, Chevrolet and Cadillac. Saturn, Hummer and Saab are up for sale.
Reports that GM is contemplating killing Pontiac surfaced today in Australia, where GM builds the Pontiac G8 sedan.

Toyota announces pricing for 2010 Prius

2009-04-22T10:34:00.001-04:00

By Karl W. Ritzler
Toyota has fired its salvo in the 2010 war of the hybrids.
The price of the redesigned 2010 Prius, Toyota’s hybrid flagship and the most numerous hybrid on the road, will remain essentially unchanged from 2009, according to the company’s pricing announcement this week.
Toyota is growing price sensitive about the Prius as new hybrid competition, especially from the all-new Honda Insight, comes on line. The Insight is a smaller car, even smaller than Honda’s Civic Hybrid, but is priced under the Prius. Toyota already has made one countermove, announcing that a hybrid system will be available in its subcompact Yaris.
Bob Carter, group vice president and general manager of the Toyota Division, said, “This model provides more than $2,000 added value, including the features most buyers want, at the same price as the current base model.”
The third-generation Prius has five levels, each with higher levels of features.
The lowest, base level is priced at $21,000 and will be available later this year. It’s aimed at businesses and fleet operators who want a no-frills vehicle.
Toyota says Level 2 is the base model, priced at $22,000, the same as this year’s base, and is aimed at most consumers.
All Priuses come with “a larger and more powerful yet more efficient 1.8-liter Atkinson-cycle, four-cylinder engine.” The company says. The gasoline portion produces 98 horsepower, and with the electric motor, it will generate a combined net horsepower of 134, an increase of 24 horsepower over the previous generation.
The car is also more efficient, with EPA fuel economy estimates of 51 mpg city, 48 mpg highway and 50 mpg combined.
Included in the Level 2 Prius are smart key with push button start; AM/FM/MP3 CD player with six speakers, satellite radio capacity and audio jack; cruise control; seven air bags; and four-wheel disc brakes.
Priced at $1,000 more, the Level 3 Prius upgrades the sound system and adds hands-free Bluetooth phone capability.
Level 4, priced at $25,800, adds a leather interior, heated seats and other upgrades. Level 5, priced at a line-topping $27,270, adds 17-inch alloy wheels, fog lamps and LED headlights.

Petite with plenty of pep

2009-04-19T14:17:00.000-04:00

Appeared in The Daily Report, Monday, April 20, 2009:

By Karl W. Ritzler, Special to the Daily Report

Subcompact cars have changed.
Yes, the category still is populated with cheap econoboxes that seem like a good idea only when you look at the sticker.
The Toyota Yaris, while the automaker's cheapest offering, is hardly cheaply made. It is roomy, even in the back seat, peppy and has the new, squarish look also popularized by competitors such as the Honda Fit, Nissan Versa and Toyota's own spinoff brand, Scion.
It says “youth” and “fun.” But the Yaris and its pals aren't a bad idea for the rest of us when gas climbs over $2 a gallon either. Even with the automatic transmission, it delivers 29 mpg city and 35 mpg highway. Because the car is so light, just 2,340 pounds, it has good acceleration onto the freeway and easily keeps up with traffic. Even hills aren't too much of a problem. You can feel its peppiness when pulling away from a stoplight— just don't try drag racing with a Camaro.
Base prices start about $12,000 for the three-door hatchback with a manual transmission, to just over $15,000 for the test car, a five-door hatchback S version with automatic that's a new model this year. All Yarises come with the 1.5-liter, four-cylinder engine.
And the test car was nicely equipped with a power package (power windows, locks, fold-flat rear seats and upgraded 15-inch wheels, $1,290 or $900, depending whether you choose alloy or the standard steel wheels). The only other options a Southern driver might want is the keyless entry ($230).
The front seats are comfortable, and the driver has a high position to watch outside traffic. Taller drivers, however, might find headroom getting a bit tight. The climate and audio controls are convenient and easy to use in their position in the center of the dash.
As an option in some models, the back seats, in addition to folding down for more cargo room, can slide fore and aft and recline.
Standard features are plentiful and just what buyers seem to want—front and rear cupholders, remote mirrors, convenient storage pockets, air conditioning, audio system with MP3 and CD player and an iPod jack. As a flourish on the S models, a ground-effects body kit, a tachometer, rear spoiler and fog lights are standard. Also standard this year are side-curtain air bags and antilock brakes.
Buyers also get Toyota's excellent reputation for reliability and a solid feel while driving.
Still, there are some compromises and quirks.
In a report issued earlier this month, the Insurance Institute for Highway Safety found that drivers of the Yaris and other small cars could face significant injuries in severe front-end crashes with larger, mid-size vehicles, according to a report by The Associated Press.
The institute crashed the Yaris into a Toyota Camry at 40 mph, a severe crash. The institute said the smaller car sustained damage to the door and front passenger area. However, the Yaris has received good ratings in previous front and side crash tests. Toyota spokesman John Hanson said the car-to-car test had little relevance to consumers because of its severity.
In other examples, don't expect 6-plus-footers to be comfortable in the back seat on any but the shortest trips. Toyota says it will seat five, but three of them had better be children. Two adults will fit just fine, though. And the 9.3 cubic feet of cargo space behind the rear seat disappears quickly on a trip to the grocery store. With the rear seats folded flat, cargo space grows to 26 cubic feet.
Toyota also has centered the driver information display in the dashboard. Aside from giving the passenger seat rider an opportunity to question your speed, it's distracting for the driver to have to look to the right.
The front cupholders also took a bit of time to find. There's no place to put a beverage on the center console, and the two front cupholders are pull-downs in the far left and right corners of the dash.
In addition to the three-door and five-door hatchbacks, the Yaris also is available as a more conservatively styled sedan.

Karl W. Ritzler is a freelance writer who contributes to the Daily Report.

Toyota Yaris

• Buy this car if: You want style and comfort in a subcompact package.

• Not for you if: You need room for big passengers or lots of gear.

• Look at me factor: The eye-catching, boxy style is all the rage.

• Competitors: Honda Fit, Nissan Versa, Scion xD, Mazda 3.

Small cars get poor marks in collision tests

2009-04-14T10:43:00.001-04:00

From the Associated Press:

By KEN THOMAS

WASHINGTON — Micro cars can give motorists top-notch fuel efficiency at a competitive price, but the insurance industry says they don't fare too well in collisions with larger vehicles.

In crash tests released Tuesday, the Insurance Institute for Highway Safety found that drivers of 2009 versions of the Smart "fortwo," Honda Fit and Toyota Yaris could face significant leg and head injuries in severe front-end crashes with larger, mid-size vehicles.

"There are good reasons people buy mini cars. They're more affordable, and they use less gas. But the safety trade-offs are clear from our new tests," said Adrian Lund, the institute's president.

Automakers who manufacture the small cars said the tests simulated a high-speed crash that rarely happens on the road. They also said the tests rehashed past insurance industry arguments against tougher fuel efficiency requirements. The institute has raised questions about whether stricter gas mileage rules, which are being developed by the government, might lead to smaller, lighter vehicles that could be less safe.

"If you were to take that argument to the nth degree, we should all be driving 18-wheelers. And the trend in society today is just the opposite," said Dave Schembri, president of Smart USA.

Sales of small cars soared when gas prices topped $4 per gallon last year but have fallen off as gasoline has retreated to about $2 a gallon and the economic downturn has slowed car sales. The small cars are affordable — prices of the three cars tested range from about $12,000 to $18,000 — and typically achieve 30 miles per gallon or more.

The tests involved head-on crashes between the fortwo and a 2009 Mercedes C Class, the Fit and a 2009 Honda Accord and the Yaris and the 2009 Toyota Camry. The tests were conducted at 40 miles per hour, representing a severe crash.

In the fortwo collision, the institute said the Smart, which weighs 1,808 lbs, went airborne and turned around 450 degrees after striking the C Class, which weighs nearly twice as much. There was extensive damage to the fortwo's interior and the Smart driver could have faced extensive injuries to the head and legs. There was little damage to the front seat area of the C Class.

Schembri said the test simulated a "rare and extreme scenario" and noted that the fortwo had received solid ratings from the government's crash test program. The fortwo has received top scores from the Insurance Institute in front-end and side crash tests against comparably sized vehicles but in the front-end tests against the C Class, the institute gave the mini car poor marks.

In the Fit's test, the dummy's head struck the steering wheel through the air bag and showed a high risk of leg injuries. In the vehicle-to-vehicle test, the Fit was rated poor while the Accord's structure held up well.

Honda spokesman Todd Mittleman said the tests involved "unusual and extreme conditions" and noted that all 2009 Honda vehicles had received top scores from the Insurance Institute.

In the Yaris test, the institute said the mini car sustained damage to the door and front passenger area. The driver dummy showed signs of head injuries, a deep gash on the right knee and extensive forces to the neck and right leg.

The Yaris has received good ratings in past front and side testing but received a poor rating in the crash with the Camry. Toyota spokesman John Hanson said the car-to-car test had little relevance to consumers because of its severity.

"It's fairly obvious that they have an agenda here with regard to how smaller cars are going to be entering the North American market in larger numbers," Hanson said.

2009 Dodge Charger

2009-04-07T14:38:00.002-04:00

By Karl W. Ritzler

Dodge brought back the Charger for 2008 to recapture the muscle car spirit of the 1970s, when Chargers, Camaros and Mustangs – and their corporate siblings – ruled the roads.
The R/T version, often with a 5.7-liter, 340-horsepower V-8 Hemi under the hood and a Dukes of Hazzard orange paint job, brings back those memories. The more mainstream SXT, with its 3.5-liter V-6 and four-speed automatic, leaves those memories at the curb.
This is a tamer Charger. There’s a noticeable engine lag in the downshift when you stomp on it. While, it’s very capable at speed, don’t expect muscle-powered acceleration. But it’s no econobox either. Mileage is a respectable 17 mpg city and 25 mpg highway, compared with the 15/23 in the fuel-thirsty R/T.
This Charger is more mild than wild, a family sedan that looks sporty but which is really a sheep in wolf’s clothing. It seems like a car made for Dad to haul the family to church or soccer practice while keeping up appearances of his misspent youth.
Comfort gets the nod over horsepower, with good success. The front seats are supportive and comfortable for middle-aged derrieres, and there’s enough room in the back – this is a four-door sedan – for even older kids or adults. The comfortable seats are separated by a fold-down armrest, which contains two of the few cupholders.
There’s no confusing the Charger with a minivan. The styling looks low and fast, and the test car was painted in write-me-a-thicket red. The cupholders in from are adequate at best, but they won’t hold a mug with a handle from the kitchen. But they do have a soft glow so you can find them at night.
Centered on the dash is a nice, big screen that would be perfect for a navigation system, if the tester had one. What it showed instead was more information than was necessary for the audio and climate control systems. Even with the standard satellite radio (subscription extra), though, it felt like cable TV: hundreds of stations and nothing on.
Watch out for the front doors. The hinges are especially springy, and more than once, the doors swung closed on legs that were still emerging from the car.
The trunk has lots of space, but the high rear deck can block rearward vision.
Also, you have to pay extra ($1,185) for the protection group, which includes side-curtain and seat-mounted air bags and an auto-dimming rearview mirror with microphone, whatever that’s needed for. Also extra ($2,405) was a package that includes leather seats and trim, power and heated front seats, power windows, dual-zone climate control, 18-inch aluminum wheels and a rear stabilizer bar.
Add a destination charge of $700, plus $950 for a power sunroof, $650 for an audio upgrade and $225 for the red paint job, and the sticker totaled $31,625. That’s a lot of money when compared with offerings from Lexus, Acura or Audi.

Getting the most out of the 2010 Prius

2009-04-02T20:57:00.003-04:00

By Karl W. Ritzler

In a little less than a decade, Toyota’s Prius has established itself as the icon of hybrid cars.
The third generation debuts this spring with the 2010 model that promises more technology, more power and more miles per gallon. As part of its introduction, Prius challenged automotive journalists – usually considered to be lead-foots – to a mileage competition over a 20-or-so-mile suburban course with lots of stop-and-go driving and a short interlude on the freeway. It felt like a typical day behind the wheel.
The Environmental Protection Agency rates the ’10 Prius at 51 mpg city and 48 mpg highway, but Toyota officials said hypermiling experts had squeezed out number in the 90s mpg. My driving partner, Steve Hammes, an automotive videographer and journalist from Albany, N.Y., and I didn’t expect to do that good, but we figured we had a chance to win. We did – by nearly 5 mpg over the second-place finishers.
Like a fisherman telling about the one that got away, we just missed hitting 70 mpg for the trip. We got tripped up on our own strategy. By using the Prius’s electric motors as much as possible during the drive, we were low on battery charge as we rolled into the final mile. The gauge said we were at 69.9 mpg, but the gas we were required to use on the home stretch dropped us about a half-mile per gallon.
We followed a lot of the hypermiling concepts: no quick starting from traffic lights, slowing down well ahead of stops to avoid using the brakes (In the Prius, that meant we weren’t recharging the batteries, either.), and driving at efficient speeds even when traffic is whizzing by you questioning your parentage.
The Prius had three driving modes: Power for getting up to speed quickly upon entering a freeway or for passing, Eco for normal, economical driving, and EV, electric only and good for up to 25 mph for about a mile. We were in Eco the whole time. We had hoped to cruise the last mile on EV, burning no gas at all, but the battery has to be fully charged.
We got lucky, too. At the time of our one-exit sojourn on the freeway, it was jammed – slow but not stopped. It was slow enough to allow maximum efficiency yet smooth enough to avoid sudden braking.
As we came to a halt at the end of the drive, a pair of journalist who had completed the course excitedly said they were in first place at 62 mpg. The very quickly found themselves in second place, and later, even lower.
It’s not the type of driving recommended for normal commutes or errand-running. The slow, rolling starts from traffic lights can be dangerous as others cars pile up behind and try to pass. It’s not safe at all at normal freeway speeds, falling well below the minimum speed posted. And slowing down early in anticipation of stops seems to invite other drivers to cut you off, necessitating one of those dreaded emergency braking maneuvers.
Still 51 mpg isn’t so bad.

Toyota ups ante in green car race with Yaris-based hybrid

2009-03-28T15:52:00.001-04:00

From Automotive News:

By Hans Greimel
TOKYO -- The green car race between Toyota and Honda is heating up.
Toyota Motor Corp. plans a new small hybrid car to take on the Insight, the inexpensive Honda hybrid that just reached the United States.
The small gasoline-electric car being planned will be an low-priced spinoff of the Toyota Yaris, said Akihiko Otsuka, chief engineer of the redesigned, third-generation Toyota Prius.
"We are developing a low-priced hybrid vehicle like Honda's Insight," Otsuka said. "We are going to compete by expanding our hybrid-vehicle lineup to smaller hybrids, in the class of the Vitz [sold in Japan] and Yaris." He did not say when the small hybrid would debut, but it could arrive as early as 2011, according to Japan's Nikkei business newspaper.
Toyota's plan is the clearest sign yet that it is worried about the inroads that its domestic arch rival is making into small, low-priced hybrid vehicles. The Honda Insight, which starts at around $20,000, is selling briskly in Japan and will be followed by a hybrid version of the Fit compact.

Buick, Jaguar overtake Lexus in reliability ranking

2009-03-19T07:41:00.001-04:00

From Automotive News:

By Chrissie Thompson

Buick and Jaguar shared first place for brands with the most-dependable vehicles in a study released today, ending Lexus's 14-year reign.
Buick climbed from sixth place last year in market research firm J.D. Power and Associates' Vehicle Dependability Study, and Jaguar soared from 10th. They were followed by Lexus, Toyota and Mercury in the survey of owners of 3-year-old vehicles.
Buick's No. 1 ranking reflects General Motors' efforts to shake a reputation of poor dependability, said David Sargent, J.D. Power's vice president of automotive research.
"Part of GM's historical challenge has been that the customer's perception of GM's vehicles has been not in line with reliability. GM, as well as Ford, has made a lot of strides recently," he said. "Maybe 10 or 15 years ago their vehicles weren't as reliable as some of the imports, but I think today they've virtually caught up."
Jaguar, sold by Ford to India's Tata Motors last year, has fought similar stereotypes, Sargent said. In the U.S., the brand has had a reputation "of being somewhat unreliable."
Original owners of Buick and Jaguar models reported an average of 122 problems per 100 vehicles, four fewer than Lexus. In compiling the rankings, J.D. Power used surveys taken in October of more than 46,000 owners of 2006 model-year vehicles.

Atlanta auto show awards

2009-03-18T17:18:00.004-04:00

From Greater Atlanta Automotive Media Association:

The Buick LaCrosse was named Best in Show and the Cadillac SRX was chosen the Best 2010 model at the AJC International Auto Show by the Greater Atlanta Automotive Media Association (GAAMA).
A five-person panel of GAAMA judges chose the GM models over dozens of other candidates and presented the "GAAMA Peach" awards prior to the auto show opening March 13.
"The judging was very close with several candidates gathering votes from the panel. But in the end, the Buick LaCrosse and Cadillac SRX were the clear winners," said GAAMA President Jim Tucker.
"The 2010 Buick LaCrosse embodies contemporary elegance," said Brad Flaaen, Regional Sales & Marketing, Buick, Pontiac and GMC . "With its unique design elements , fit and finish, and advanced technology -- the new LaCrosse will certainly provide consumers with a world-class experience. Our award-winning LaCrosse builds on the success of Enclave as the next step in Buick's revitalization and we thank GAAMA for recognizing this."
"Cadillac boasts a tradition of bold, head-turning design and our 2010 SRX Crossover builds on that reputation," said Jennifer Costabile, Regional Sales & Marketing, GM Premium Channel. "The redesigned SRX being awarded Best 2010 model by GAAMA is proof positive that technical precision blended with old world craftsmanship will continue to charm the emotional and pragmatic sides of our luxury consumers." Both vehicles are on display at the auto show through March 22.
This was the first year of the awards from GAAMA, a year-old association comprised of automotive journalists, corporate communications specialists, media organizations, auto manufacturers and other professionals working in the automotive media industry from the greater Atlanta area as well as other nearby cities in the Southeast.

Atlanta's auto show

2009-03-17T11:49:00.005-04:00

By Karl W. Ritzler

From a little bit of Soul to a Cadillac station wagon, the 2009 Atlanta Journal-Constitution International Auto Show has a sprinkling of new vehicles that tend to be smaller, more efficient and utilitarian.
Perhaps it’s an answer to the hard times the auto industry – and the entire country – are facing. But Detroit – and Stuttgart, Tokyo and Seoul – are showing 2010 models and concept cars that are greener and more useful than many of the gee-whiz, techo-packed, horsepower-breathing vehicles of the past.
Here are some highlights from the show, which is sponsored by the Metro Atlanta Automobile Dealers Association:

Kia
Georgia’s newest car company – Kia is building its first assembly plant near West Point – is showing off the 2010 Soul, which is arriving now in dealerships.
“It’s all about personalization,” said Michael Sprague, director of marketing in the United States.
That’s the same tune that Scion played in introducing the xB several years ago, and the Kia Soul is one of many new vehicles joining the chorus.
It has the same two-box shape and a long list of options as Kia’s answer not only to Scion but also the Honda Element and the Mini Cooper.
As for the new car factory, Sprague said production is expected to start near the end of this year and hit a total of 300,000 vehicles a year at peak capacity. But what they will build is still hush-hush.
It might be an all-new crossover utility vehicle called the Sorento overseas, but which will likely get a different name here because Sorento is already taken. It also could be Kia’s new compact sedan, the Forte, or even the Soul. Most likely is the new CUV.

Ford
Ford will continue to redo its lineup in 2010 and into the future, said John Felice, marketing manager for Ford.
At the top of the list in the company’s redesigned flagship, the Taurus full-size sedan (see story below). Added to the Taurus stable is an all new, top-of-the-line SHO version designed especially for the driving enthusiast.
Also on the calendar are the new Lincoln MKX crossover; the redone Ford F-150 pickup truck, still a top-seller despite the economy; two new hybrid versions of popular models, the Ford Fusion and Mercury Milan mid-size sedans; and a redesigned 2010 Ford Mustang.
The Taurus SHO -- for Super High-Output – gets a 3.5-liter twin turbocharged V-6 Eco-boost engine. A 3.7-liter Eco-boost powerplant will be available in the all-new Lincoln MKT crossover.
But the future looks smaller. Lincoln is showing the C concept, a global small car platform that looks like it would fit inside some of those big ol’ Lincolns from the ‘50s.
The concept even showed “suicide” back doors among the more high-tech gadgetry and sleek seats that look like they belong on the deck of a beach house.
It is equipped with a 1.6-liter four-cylinder Eco-boost engine that is designed to deliver 180 hp and 43 mpg.

Cadillac
It’s the return of the station wagon.
The 2010 Cadillac CTS is being shown in wagon form – Cadillac officials still won’t use the term “station wagon,” but they will say “sport wagon.”
The company squared off rear end of the CTS sedan, creating 25 cubic feet of cargo space, double the sedan’s trunk space, behind the back seat. And it’s powered by a more fuel-efficient 3.6-liter V-6 with direct injection. The price premium is about $1,500.

Honda
The Insight is back.
Fortunately, it’s not the odd-looking, two-passenger hybrid that was among the first alternative-fueled vehicles on the road.
The new Insight looks suspiciously Prius-like, has four doors and the proportions of a real car while still getting 40/43 mpg. Prices are expected to start around $19,000 and peak out around $21,000 in three trim levels.
Unlike the Prius, though, Honda has front-loaded most of the batteries to increase the trunk space.

Infiniti
Infiniti is showing off a beauty – the G37 convertible.
The drop-top version of its splendid G37 coupe has all the power in the 325-hp V-6, and it is redesigned from the A-pillar back to add rigidity without messing up the stylish lines found in the coupe. A clamshell trunk stores the top more compactly, leaving a bit more room for cargo.
Infiniti hasn’t forgotten the amenities, adapting both the audio and climate control systems for a convertible.
Speakers are placed in the front-seat headrests, and microphones in the speakers listen for road noise, then adjust the sound. It’s more like surround sound than earphones, an Infiniti spokesman said.
The climate-control system also senses the wind, car speed and temperature and adjust both heat and air conditioning to maintain the right mix of temperature and fan speed.
It will launch in June, and estimated pricing is in the mid-$40,000s.

Nissan
Nissan joins the Scion copiers with its Cube.
One display at the auto show was the top-of-the-line Krom (like chrome, but not too sparkly) Cube.
The swing-open tailgate is an added twist to the asymmetrical rear window. The vehicle has been available in Japan since 1998, but is just coming to America.
The Krom, said a spokesman, is the wild side trim level. It’s aimed at the young, aftermarket-hungry buyer. It will be priced at $19,000 and up, while the base Cube will start at $13,000. They will be available in May.

Read Karl’s auto show overview story and a profile of MAADA Academy graduate Arvind Sarathy in the official auto show guide.

Ford brings the new 2010 Taurus SHO to Atlanta

2009-03-16T16:35:00.004-04:00

By Karl W. Ritzler

First Ford brought back the Taurus, fitting the well-tested
Photo: Ford Motor Co.
The Ford Taurus SHO

name to its full-size sedan formerly known as the Five Hundred.
Now, the company has taken another step to boost the brand by looking at its heritage. It has introduced the 2010 Taurus SHO as the top-of-the-line trim option.
It’s not just a bunch of fancy gizmos and leather seats stuffed into a regular Taurus, either. The new Taurus SHO has a more aggressive look and a powerful, yet economical, powerplant.
Earl Lucas, who led Ford’s design team for the new Taurus, showed off the new vehicle before it got its Atlanta debut at the Atlanta Journal-Constitution International Auto Show, going on this week at the Georgia World Congress Center.
It’s more expressive, a “me” car – as in look at me – Lucas said, while fulfilling design goals of being American, strong and modern and still keeping Ford design DNA.
The faces for all the ’10 models are more aggressive than their predecessors. But the SHO adds an extra touch behind with a deck-mounted spoiler and twin chrome exhaust tips.
“There’s nothing wring with a full-size car being expressive,” Lucas said.
Under the hood is Ford’s Eco-boost V-6 engine, which Lucas said will deliver the power of a V-8 and mileage in the mid-20s mpg.
The SHO, he said, “speaks to the enthusiast.”
John Felice, marketing manager for Ford, credited fans of the old SHO for bring the new one to production. “This car wouldn’t have been built without the enthusiasts,” he said.
“We wanted to stick to the core nameplate, yet keep it fresh,” Felice said of the redesign.
There are four trim lines on the ’10 Taurus: SE, which will be priced the same as its ’09 version; SEL; Limited; and SHO, which is aimed at the sportier driver who still wants a full-size sedan.
The Taurus is Ford’s flagship car, and the redesign reflects the company’s response to tighter times. The whole process took a little under three years, nearly a full year shorter than a redesign in the past. The car is being built at Ford’s Chicago plant, which once was a twin with the now-closed Hapeville Taurus plant.

Best in-car electronics

2009-03-12T09:38:00.001-04:00

From AOL Autos:

By Rex Roy
Not all that long ago, this author owned a car that had no working electronics.
The engine had a carburetor and a mechanical ignition. What electronics it did have were broken ... another way of saying the radio didn't work.

Unlike some of today's cars that will provide a complete weather forecast, back then if I wanted to know the temperature, I rolled down the window.

Today, cars offer a dizzying array of features that can do almost anything a 21st century driver wishes. Most of these features are classified as "Infotainment", that modern intersection of information and entertainment.

Currently, no one manufacturer offers everything, but read on to see who offers what today and if it's worth spending your money.

General Motors' OnStar

GM launched OnStar 12 years ago. It was the auto world's first experience with telematics. Using a wireless connection and GPS technology, GM crafted a powerful communications system that has saved thousands of lives by contacting a nearby emergency service provider in the case of an accident.

Early OnStar features were geared toward providing extra safety, but today OnStar is expanding services as more GM vehicles are equipped with OnStar hardware. One of OnStar's newest features is eNav, an enhancement of their Turn-By-Turn Navigation service. AOL Autos: Research Chevy cars and trucks

If your GM vehicle has OnStar and you're a subscriber, you can use your computer to find your destination, and then MapQuest sends the route directly to your vehicle. Simple voice commands let you access the route. See more at OnStar.com.

Cost: Comes installed but plans start at $18.95.

Ease of use: Easy, you'll be using it right away

Ford SYNC

Ford introduced SYNC last year. Developed with Microsoft, SYNC has a powerful speech engine. This is the key to giving drivers voice control over their car's entertainment systems as well as linked external devices (via USB and wireless connections). With SYNC, when you talk to your car it will really hear you. AOL Autos: Research Ford cars and trucks

Once you've wirelessly linked to your Bluetooth phone and MP3 player (via USB), these devices can be voice-controlled, but it takes practice. Unlike GM's On-Star that uses built-into-the-car cellular hardware, SYNC provides services like emergency response and traffic routing using a paired cell phone.

Learn more about SYNC at syncmyride.com.

Cost: $395, rolled into the price of the vehicle. No monthly charge.

Ease of use: Easy-ish. You'll be using it in 15 minutes

Acura Link

Acura is Honda's luxury brand. In typically humble Honda fashion, in the years since the first Acura debut in 1986, Honda has quietly expanded its line of high-quality premium automobiles. In addition to featuring one of the best audio systems (ELS Surround Sound), Acuras have optional features suited for traffic and weather junkies. AOL Autos: Research Acura cars

If you're addicted to traffic and weather info but have tired of reports from local AM radio, then Acura's real-time traffic and weather are for you. In addition to trip routing, this NAV calculates real-time routes based on current traffic flow.

Other screens show local weather radar and 3-day forecasts. Get more at Acura.com.

Cost: Technology package, approximately $3000.

Ease of use: Easy. You'll be using it right away

Lexus' navigation system

New Lexus vehicles equipped with NAV feature casual-speech recognition. Systems like OnStar and SYNC require specific verbal commands, but Lexus eases things up. You can say, "Call Bob at home," or "Gimme a Japanese restaurant," instead of regimented verbal cues. AOL Autos: Research Lexus cars

More details at Lexus.com.

Cost: Technology package, approximately $6000

Ease of use: Easy. You'll be using it right away

AT&T CruiseCast

This spring, the old phone company takes their CruiseCast system live, offering 22 TV and 20 radio channels. A small satellite receiver on the vehicle's roof pipes entertainment to an A/V system. Never hear "Are we there yet?" again. Check out CruiseCast.com.

Cost: Hardware is $1300, fees are $28 per month

Ease of use: Easy. You'll be using it right away

Chrysler and Sirius offer Backseat TV

If you're shopping for a new family hauler and want a simple-to-use, kid-quieting A/V system, consider the Chrysler Town & Country and Dodge Caravan with the 2-screen option. It pipes 3 channels of kid's shows into twin overhead monitors. Kids listen over wireless headphones. AOL Autos: Research Chrysler cars

See more at Chrysler.com

Cost: $2000

Ease of use: Easy. You'll be using it right away.

AudioVox amps up aftermarket A/V

If you already own a capable family hauler but want the latest in rear-seat entertainment, AudioVox offers several choices. Headrests matched to your interior include a monitor and DVD player, but the monitors auto-link for 2-player video game action. Satellite TV is a new-for-2009 option. Details at AudioVox.com.

Cost: Approximately $400 per headset

Ease of use: Easy-ish. You'll be using it in 15 minutes

Chrysler 200C -- glimpse of the future

The Chrysler 200C easily ranked as one of the most significant concept cars at this past January's 2009 Detroit Auto Show. If the striking shape didn't stop you, news of its electric powertrain would. However, the most innovative feature of the show car was its gesture-based instrument panel. The technology provides a glimpse of our driving future.

It's no surprise that the company behind the iPhone's gesture-based instrument cluster (Nartron) also works with Apple and other major electronics suppliers. The reconfigurable LCD display shows a glimpse of what the future of infotainment will look like. The button and switchless dashboard integrates multiple video monitors, GPS units, Internet access and much more.

Cost: Not for sale

Which of Consumer Reports' picks for best used cars gets the best gas mileage?

2009-03-09T16:47:00.001-04:00

From The Daily Green:
By Dan Shapley
Consumer Reports released its annual list of best cars recently, naming the 2009 Toyota Prius as the overall best-value new car. It's in its own class in terms of fuel economy, as The Daily Green's Most Fuel-Efficient Cars and SUVs of 2009 feature shows. It bests its nearest rival (the Honda Civic Hybrid) in city driving by 20%.

But the annual report also includes a list of the most reliable used cars on the market -- reminding us that for fuel efficiency, "sticker" price, and often reliability, used cars are the best value. (The 2000 Honda Insight -- if you can find one -- achieves a combined 53 mpg, which would easily beat the 2009 Toyota Prius by a long shot.)

But buying a used car can be more challenging than buying new, for those who don't consider themselves car buffs. It takes more research (try Edmunds.com to start). How do you know you're getting a good value? And who can you turn to if something goes wrong? That's what makes the Consumer Reports list invaluable. Here you have it: 10 used cars that are likely to offer you good value for the money.

The Daily Green has done one better by ranking the small cars among Consumer Reports' picks by fuel economy. The years were chosen at random, but the fuel economy shouldn't differ within a model. (Do your own comparisons with fueleconomy.gov.)

Most Fuel-Efficient and Reliable Used Cars
2005 Toyota Echo - 31 mpg
2006 Honda Civic - 30 mpg
2005 Scion xB - 29 mpg
2007 Toyota Corolla - 29 mpg
2006 Toyota Corolla - 29 mpg
2005 Toyota Matrix - 27 mpg
2007 Pontiac Vibe - 27 mpg
2006 Mazda 3 - 26 mpg
2003 Mazda Protege - 24 mpg
2004 Subaru Impreza - 22 mpg

The Worst Cars for the Money

2009-03-04T11:56:00.001-05:00

From US News and World Report
By Lauren DeAngelis

The Worst Cars for the Money were identified using data from the U.S. News car rankings, which are based on the collective opinion of the automotive press. This tells us how "good" or "bad" a car is according to a large number of critics. We then weigh the rankings against how much value the car packs in. Using data from IntelliChoice, an industry leader in determining ownership costs, we include how much buyers can expect to spend up front, how much they'll spend on maintenance and fuel, and how much of a hit they'll take from the car's depreciation during the first five years.

The result is a list of cars you may want to think twice about before buying. But also keep in mind the unwritten part of a car's value: if you really like one of these models, then chances are you'll be happy driving it no matter what - which means that in the end, it could be the best car for your money.

Compact Car: Pontiac G5
The G5 trails the majority of compact cars when it comes to comfort, quality and performance, leading to a poor U.S. News ranking. Its sticker price is also a bit higher than many competitors, and it's expected to depreciate as much as 60 percent within the first five years of ownership - twice as fast as its top-ranked competitors. In addition, five years of fueling and maintaining the G5 is estimated to cost you $5,000 to $10,000 more than Honda's Fit or Civic. The G5's future is unclear since GM has announced plans to shrink the Pontiac model line significantly. Pontiac sold just 767 G5s nationwide in January.

Better values: If you're in the market for a compact car, consider the Honda Fit and Hyundai Elantra.

Compact Crossover: Suzuki XL7
While it's a competent people hauler, the Suzuki XL7 can't match the acceleration, handling and interior quality of top rivals and ranks around the middle of its class. Its five-year cost of ownership is quite high - almost $47,000 as compared to the Honda CR-V, which is about $37,000. Depreciation is the major cause - like the Pontiac G5, the XL7 is expected to lose more than 60 percent of its value over five years.

Better values: If you're in the market for a compact crossover, you may do better with the Mazda Mazda5 or the Ford Escape Hybrid.

Full-Size SUV: Jeep Commander
The Jeep Commander is a good choice for off-road enthusiasts, but buyers who spend the majority of their time on the pavement should look elsewhere. U.S. News ranks the Commander last among large SUVs. Its cost of ownership over five-years is $10,000 more than the Mazda CX-9 crossover and even higher than the popular Chevrolet Tahoe, another off-road-ready vehicle. While the Commander's sub-$30K sticker may look appealing, this big SUV is expected to depreciate 50 to 60 percent over five years. Sales were down 56 percent last year, and there's speculation that it may be discontinued after 2009.

Better values: If you're in the market for a full-size SUV, the Chevrolet Tahoe and Mazda CX-9 are worth a look.

Full Size Pickup: Nissan Titan

2009 Nissan TitanWith rugged practicality and a strong powertrain, the 2009 Nissan Titan isn't out of place in the full-size truck market. However, after more than three years on the market, the Titan still hasn't pulled in a lot of American buyers. Sales were down almost 50 percent in 2008. That may be because the Titan's value equation just doesn't make sense. It's generally well liked, but it costs up to $5,000 more than solid American options. The Titan also lags the competition in fuel economy, with only 13 miles per gallon in the city for the base model. Nissan has announced it will end production of the Titan in 2010 and is planning to replace it with a pickup based on the Dodge Ram.

Better values: Consider the Ford F-150 and Chevrolet Silverado.

Upscale Car: Volvo S60
The Volvo S60 is based on a nine-year-old design and has been left in the dust by continually improved competitors like the Infiniti G37 and BMW 3-Series. On the plus side, the S60 could save you two or three thousand dollars over five years, compared to the 3-Series or the Cadillac CTS. But consider that the existing S60's deprecation will likely only get worse: Volvo debuted a new concept at this year's Detroit Auto Show that will make the current S60 extinct.

Better values: If you're in the market for an upscale car, consider the Infiniti G37 or Lexus ES.

Sports Car: Mitsubishi Eclipse
The Mitsubishi Eclipse offers aggressive sports car styling, but critics claim it lacks the power and agility they expect in a sports car. This contributes to an underwhelming performance in the U.S. News rankings. The Eclipse isn't such a bad deal if you just want to look the part of a speed racer - there are just other sports cars that are better. The Eclipse's sticker price undercuts most of its rivals. The car will run you about $40k + to own over five years - about $5,000 less than the Honda S2000. The Eclipse's sales numbers confirm that it has loyal buyers. Sure, sales are down about 38 percent from a year ago, but the Eclipse still sold better than the S2000 or Mazda Miata. The Eclipse just received a refresh for 2009, which means it probably won't be going anywhere soon.

Better values: Still, for cars that perform better within the mainstream sports car class, take a look at the Mazda MX-5 Miata and Nissan 370Z.

GM, Ford, Toyota plunge more than 39% in Feb.

2009-03-03T20:29:00.000-05:00

From Automotive News:
Analyst: 'We are in an automotive depression'

By Chrissie Thompson

Ford, Toyota and General Motors sales plunged more than 39 percent last month in what early reports indicated was the weakest February sales performance in at least 34 years.
GM, which is staying afloat with U.S. loans, dropped 53.1 percent. Ford Motor Co. slid 49.5 percent, while the three biggest Japanese automakers -- Toyota, Honda and Nissan -- were all down more than 37 percent.
"We are in an automotive depression amid 'The Great Recession,' " Standard and Poor's analyst Efraim Levy said in a report. "Shellshocked consumers fearful for their jobs, the value of their homes and stock market assets are wary of making the sizable discretionary purchases of new vehicles."
The results for the five biggest automakers were worse than most analysts' forecasts and reinforced projections that last month's sales tally would be the lowest for any February since at least 1976, the most distant year of available data.
U.S. sales haven't risen since October 2007, in stride with a 15-month recession.

Mercedes-Benz revives its classic Gullwing two-seater as the SLS

2009-03-02T11:00:00.000-05:00

From AutoWeek:
By Greg Kable | 03/02/09, 9:32 am et
Mercedes-Benz's gorgeous 300SL--or Gullwing, as it is affectionately now known--has been reborn five decades after the iconic two-seater first sent the motoring world into a spin at the New York auto show in 1954.
We were the first to report Mercedes' secret plans to resurrect the Gullwing following Dieter Zetsche's decision not to forge ahead with a second supercar in collaboration with its Formula One partner, McLaren. Now we can confirm the name--SLS--along with details of its state-of-the-art construction, unique driveline, performance and much more.
The SLS will highlight the Mercedes display at this September's Frankfurt motor show, with North American sales starting mid-2010. Expect the price to be in the $250,000s range.

'Consumer Reports' Targets Best Values, Used Cars

2009-02-26T20:23:00.000-05:00

From NPR:
By Joshua Brockman

Best New Car Overall Value

* Toyota Prius Touring
* Mini Cooper
* Volkswagen Rabbit
* Honda Civic EX
* Honda Fit

Top Used Cars

* Small cars: Honda Civic
* Family cars: Honda Accord
* Upscale cars: Lexus ES
* Minivans: Toyota Sienna
* Small SUVs: Toyota RAV4

Source: Consumer Reports' April issue of Best & Worst 2009 cars

NPR.org, February 26, 2009 · The domestic car industry could use its own set of air bags — not to mention some electronic stability control.

General Motors Corp. said on Thursday that it lost $9.6 billion and its car sales dropped by 26 percent for the last quarter of 2008.

Those kinds of numbers make one wonder whether anyone wants to buy a new car. There may be few buyers these days, but Consumer Reports' latest car issue is full of advice for the budget conscious. That includes a new section on the best new-car values and the magazine's largest section ever devoted to used cars.

It's no surprise that the magazine says in its April issue of best and worst 2009 cars that Japanese automakers still remain on top when it comes to manufacturing the best all-around vehicles for the U.S. market.

Honda, Subaru and Toyota received the top scores in the magazine's automaker report card for comfort, fuel economy, performance and reliability. Meanwhile, Ford, GM and Chrysler remain at the bottom of the class.

Ford has been making improvements in its reliability over the past few years (the magazine says some models "now rival the best from Japan"). But Ford's cars lack customer appeal, with styling that is "so-so" and interiors that are "bland," says David Champion, senior director for Consumer Reports' Auto Test Center. "They just need to get some more passionate products that will excite the consumer."

GM has the opposite problem. The company is getting some things right when it comes to overall build quality and fit and finish, but reliability has been "very inconsistent," he says.

Each company has already made some strides with cars like the Ford Flex and the Chevy Malibu, says Rik Paul, automotive editor for the magazine. "If you could merge the two, you'd have one quality company."

Meanwhile, Consumer Reports dropped Chrysler's reliability rating to "below average" this year, and no vehicles from Chrysler, Dodge or Jeep made it onto the magazine's recommended list.

Bang For Your Buck

The magazine has added a best values category to its review of new cars. And the winner isn't necessarily the cheapest car — it's a Toyota Prius Touring, priced at just under $25,000. The determination is based on road test scores, five-year owner cost estimates and predicted reliability ratings. The other top four in this category are the Mini Cooper, Volkswagen Rabbit, Honda Civic EX and Honda Fit.

"These are the cars that give you the most for your money," Paul says. What's at the bottom? GM's Hummer H2, which the magazine says is a "terrible deal."

Used Car Sales

Used cars have always outsold new cars, and with people looking for ways to save money, it's still a sound strategy. The magazine, which devoted 19 of its 100 pages to this category, also used data going back to 1999 to compile its first-ever breakdown of the best used cars in nine categories. These include the best of small cars (Honda Civic), family cars (Honda Accord) and minivans (Toyota Sienna).

"A two-or three-year-old used car is probably one of the best values out there," Champion says. And Paul says visitors to the Consumer Reports Web site have been gravitating toward the used car section.

Just be sure to kick the tires and honk the horn when you get offline.

GM posts wider loss, burns through $5.2 billion in cash

2009-02-26T17:05:00.000-05:00

From Automotive News:
By Jesse Snyder

General Motors, battered by a global economic collapse and buoyed by U.S. rescue loans, posted its sixth straight quarterly loss and burned through $5.2 billion in cash as revenue shrank 34.2 percent.

The net loss of $9.6 billion in the fourth quarter compares with a loss of $1.5 billion a year earlier. The operating loss was $5.9 billion. Revenue fell to $30.8 billion from $46.8 billion.

The loss sealed CEO Rick Wagoner's fourth straight year without a profit and reflect the distress that GM showed last week when it asked the U.S. Treasury for as much as $16.6 billion in additional U.S. aid. GM, which has received $13.4 billion so far, said the request reflected a market that was deteriorating more rapidly than anticipated.

"2008 was an extremely difficult year for the U.S. and global auto markets," Wagoner said in a statement. "We expected these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions."

GM ended the quarter with $14 billion in cash. In GM's last quarterly report in early November, GM said it was close to exhausting its cash supply. The automaker then petitioned Congress for help, was rejected by the Senate and bailed out by lame-duck President George W. Bush.

This year, GM has officially yielded the global sales title to Toyota Motor Corp., which itself is about to post its first annual operating loss in 70 years. GM recorded a 49 percent sales decline in January U.S. sales, as demand sank to its lowest mark since 1981.

GM's fate now rests with a task force appointed by President Barack Obama, who told Congress this week that the Detroit 3's ills were largely self-inflicted as he pledged to help create an industry that "can compete and win."

Wagoner was scheduled to meet later today with the task force, headed by U.S. Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.

GM, like smaller rival Chrysler LLC, faces pressure to wrap up concession talks with the UAW on how to cut funding promised to a health-care trust fund. Chrysler has received $4 billion in U.S. loans and seeks $5 billion more.

Saab files for reorganization, seeks $1billion to survive

2009-02-20T08:47:00.000-05:00

From Automotive News:

Saab is seeking $1 billion (793 million euros) to be self-financing, the company said today after it filed for reorganization under a self-managed Swedish court process.
The General Motors-owned Swedish brand said it will work "to create an independent business entity" and will concentrate production, design and engineering in Sweden.
Saab said it would continue to operate as normal during the reorganization process, with GM and the Swedish government providing some support.
Saab Managing Director Jan Ake Jonsson said: "We explored and will continue to explore all available options for funding and/or selling Saab. It was determined a formal reorganization would be the best way to create a truly independent entity that is ready for investment."
Saab's application for reorganization was filed with the Swedish district court in Vanersborg. Under the procedures, the court appoints an administrator to review Saab and its business plans.
If the court approves the reorganization, the process will run for three months. A proposal for Saab's future will be presented to creditors within three weeks, Saab said in a statement.
Saab estimates that it made a loss of around 3 billion crowns ($340 million) last year and would run a similar loss this year, the carmaker said in documents submitted to the Swedish court today.

Saturn alerts customers it is considering a spinoff

2009-02-19T12:35:00.000-05:00

From Automotive News:
THE AUTO INDUSTRY BAILOUT

DETROIT -- Saturn has begun alerting customers that it may be spun off by General Motors as an independent marketing and distribution company.
In a letter sent to about 1.5 million Saturn owners last night, Saturn said it would have to line up products to sell -- either from other manufacturers or from GM in the role of a vendor -- after GM's current commitment to build Saturn products ends after the 2012 model year.
"The Saturn Distribution Corporation already exists as an indirect subsidiary of GM," wrote Jill Lajdziak, general manager of Saturn, in the letter. "It's the entity with which our retailers have their franchise agreement.
"An independent Saturn would still have its great retailers, and it would continue to source current products from GM through 2011. If successful, SDC at that point would source products from other manufacturers."
A Saturn spokesman confirmed the letter and its contents. The purpose of the letter is to reassure current and potential Saturn owners that Saturn is a viable brand and that GM will back its warranties and product quality, says spokesman Steve Janisse.
The goal of a spinoff would be to find future vehicles "that match the Saturn Brand: fuel-efficient, safe, reliable and affordable," Lajdziak said. "From a retailing perspective, we would build on our core strength of unmatched customer service."

Brands: What Stays, What Goes

2009-02-19T07:31:00.001-05:00

From CNN Money

As Chrysler and GM work through their viability plans, they're looking to unload some of their models.
By Peter Valdes-Dapena, CNNMoney.com senior writer
PT Cruiser – Gone
In the "viability plan" that Chrysler submitted to the Treasury department the carmaker laid out some more changes to its product line-up.

Some of those changes had already been announced shortly after Chrysler's new owners, Cerberus Capital Management, took over in 2007. The new management team quickly announced that the Chrysler Pacifica crossover, Dodge Magnum wagon and PT Cruiser convertible would be dropped.

As part of its latest announcement, Chrysler co-president Jim Press told reporters that the hard-top PT Cruiser, shown here, and two of Chrysler's SUVs, are being dropped from the line-up as well.

Chrysler also said that new versions of two of Chrysler's popular sedans would be coming soon, as well as a new Jeep. Chrysler also has vague plans to bring an electric car to market next year.

Dodge Durango - Gone

Chrysler shut down the factory that made the Durango and the closely related Chrysler Aspen late last year. High gas prices combined with the economic downturn forced the plant's early closure.

The plant shut down only a couple of months after production had started on hybrid versions of the two large three-row SUVs.

But the Durango may rise from the dead. Chrysler hopes to bring it back around in 2011. Next time, it may be a car-based crossover, according to several published reports. An image in Chrysler's viability report shows a much sleeker, more aerodynamic vehicle.

Hummer – Gone

General Motors will make a financial decision about Hummer soon. Either way, it seems it won't be a GM brand anymore. It will be sold, or it will be phased out.

Hummer had the worst sales fall-off of any brand in America last year, dropping by half to 27,485 vehicles.

High gas prices pushed customers away from truck-based SUVs, which are all Hummer sells. And as a love-it-or-loath-it niche product, the brand has always been highly dependent on new model introductions that sell hot for a while before they fizzle.

When sales of the original H1 started to fade, the smaller H2 came in to pick up the slack. Then, as the H2's welcome wore thin, in rode the smaller-yet H3. There will be nothing more beyond that.

No More Saturn
The Saturn brand has been amazingly resistant to success. After years of hard work, GM has finally admitted the car line has been "disappointing" and it is in discussion with its dealers about what's next.

For now, GM isn't planning to do anything with Saturn beyond the life-cycles of its current models. If no one steps forward wanting to take Saturn over when the models are done in 2011, the brand is done too.

Over the last few years, Saturn has had a complete makeover of its once drab line-up. The new cars are flashy-looking and mostly well-received by critics.

The Saturn Aura was even voted car-of-the-year by auto critics at the 2007 Detroit Auto Show. When its close relative, the Chevrolet Malibu, received the same honor in 2008, its sales took off. But the Aura's sales never took off and fell even lower last year.

Part of the problem has to do with Saturn's "No haggle" pricing policy. In exchange for agreeing not to finagle on deals, Saturn dealers got big exclusive territories with many miles between them. But that means it's much harder to find a Saturn dealer than one who sells Chevrolets or Pontiacs.

Jeep Grand Cherokee Gets a Redesign

If all goes well with Chrysler's latest funding request, an all-new version of the Jeep Grand Cherokee will hit the market in the next year as a 2011 model-year vehicle.

Chrysler promises fuel economy of between 21 and 25 miles per gallon on the highway compared with 20 for the current version.

New from Chrysler: The 200C Concept

At this year's Detroit Auto Show, Chrysler showed off a concept car called the Chrysler 200C. It was slightly larger than the current mid-size Sebring sedan but smaller than the full-size 300.

Chrysler's lead designer, Ralph Gilles said that a car looking very much like the 200C is intended for near-future production. The look is much sleeker and cleaner than current Chrysler designs. The car displayed at the show was an electric-powered vehicle to boot, Chrysler said.

Chrysler has said its plan is to make vehicles like the 200C available in both gasoline- and electric-powered versions. A plug-in of some type is planed for next year, but Chrysler still isn't saying what it will be, only that more are supposed to follow.

Chevy Volt: Look for More

It's well known, by now, that GM intends to produce an extended range electric vehicle called the Chevrolet Volt beginning late next year. In its restructuring plan, GM revealed that two more vehicles using the same technology are planned for 2012.

GM isn't saying, yet, what those vehicles will be. One possibility is represented by the Cadillac Converj, a concept vehicle unveiled at this year's Detroit Auto Show.The Converj is, essentially, a luxury version of the Volt.

Chrysler, Meet Fiat

Chrysler has entered into a tentative deal with Fiat that would allow the Italian automaker to take a 35% equity stake in the American automaker. In exchange, Chrysler would get access to Fiat engineering, and possibly some whole vehicles. Fiat would also be able to sell some of its products in the Unite States and use some of Chrysler's factories here, as well.

In all, Chrysler will get seven new small vehicles out of the deal, the carmaker said in its restructuring plan. It will also get six new engines and transmissions.

Chrysler says it still has an agreement with Nissan under which Chrysler will produce a version of the large Dodge Ram truck for the Japanese automaker, and Nissan will produce a small car for Chrysler. But that agreement is reportedly on hold while the two companies work out financial details.

Saab – Gone

One GM brand has had even lower market share than Hummer, and that's Saab. And now it finds itself in the same position - under "strategic review." If no buyer is found, Sweden-based Saab will likely fade away.

Even including Europe, Saab sales are small for a parent company the size of GM. Its best year worldwide was 2006 when about 130,000 sold in the U.S. and Europe, a Saab spokesman said. By contrast, GM sold more than 300,000 Buicks in the U.S. alone that year.

GM is asking the Swedish government for financial help as it tries to find a buyer for Saab.

They're not just cars

2009-02-18T11:22:00.001-05:00

From The New York Times
February 17, 2009, 6:40 pm
They’re Not Just Cars
By The Editors
As part of its restructuring plan to make a case for more loans from the federal government, General Motors will cut its work force further, shutter more plants in North America and reduce its lineup of eight brands to four by phasing out Saturn entirely, ending Pontiac as a full division, and selling off Saab and Hummer.

While many industry experts have long felt that the Detroit automakers were saddled with too many brands and too many models, lots of consumers have felt differently. Pontiac and Saturn have their loyalists. Why do brands still matter to consumers?

Diana LaSalle, marketing consultant
Colin Comer, muscle car expert
Peter M. De Lorenzo, publisher of AutoExtremist.com
Bob Merlis, car collector

--------------------------------------------------------------------------------

All Driving Is Personal
Diana LaSalle is the co-author of “Priceless: Turning Ordinary Products into Extraordinary Experiences” and a marketing consultant.

The news that G.M. is axing or contracting four brands may make sense financially, but for a lot of consumers, it will just seem wrong. For many, a car isn’t just transportation, it’s part of one’s self-image. Where car companies have blundered is not so much in having too many brands, but in losing the essence of the brands.

Coca-Cola almost made a similar misstep in the early 80’s when it announced the withdrawal of its original Coke to make way for New Coke. To millions of people, memories, relationships, very identities were wrapped up in that little red can.

When a brand is shuttered, consumers are apt to feel that their loyalty was misplaced — or worse, that the company doesn’t know what it’s doing.
Pontiac loyalists are likely to suffer the same sense of loss. This brand represented the “cool generation” in its heyday. The 82-year-old brand was parent to performance cars like the Firebird Trans Am, Grand Prix and GTO, considered by many to be the greatest muscle car of all times. The brand is part of Americana and is connected to the youth of a large Boomer market who loved the cool factor along with hot performance. The question for G.M. is why did it allow the brand to lose its “cool” and is it possible to get it back?

Saturn had a different appeal. It was the brand for the “smart generation.” Billed as a different kind of car company, the values it promoted were intelligent choices and straight talk with consumers.

It did a good job of promoting these values, but when you say you’re going to be different, you have to deliver the experience.

The intention was there, but the innovation wasn’t. People wanted a different kind of experience more than they wanted a different kind of car — one that put their needs ahead of the company’s. Saturn’s demise will make it more difficult to convince consumers that different is possible.

Hummer and Saab owners will feel a similar let-down. G.M. is likely find out that these moves will have more than financial ramifications. When a brand is shuttered, consumers are apt to feel that their loyalty was misplaced — or worse, that the company doesn’t know what it’s doing. If G.M. wants to regain its footing, it will have to convince consumers that the company hasn’t deserted them along with the brand.

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I Want My GTO
Colin Comer is a noted muscle car authority and the author of “Million-Dollar Muscle Cars” and the forthcoming “Complete Book of Shelby.” A self-proclaimed Pontiac guy, he has “somewhere around 15” original Pontiac GTO’s in his extensive muscle car collection.

Our beloved American auto industry is in big trouble. Sure, they did it to themselves, but the fact remains that Detroit is a national treasure and on the brink of being gone forever. Our once-proud General Motors, the former “Standard of the World,” is perhaps now nothing more than the standard to which all terminally ill corporations will be judged. I can hear it already, “Yeah, we’re in trouble but we are no G.M.!”

I, for one, am in favor of anything that can be done to save Detroit. But it is with a heavy heart that I report the news that G.M. is essentially going to kill off my favorite division, Pontiac. Yes, it was sad to see the Oldsmobile carried off in a pine box, but Pontiac?

Of all the G.M. divisions, Pontiac has one of the most loyal followings. As a young boy, I lusted after those GTO’s. I wanted to be like Burt Reynolds in “Smokey and the Bandit” with that incredibly cool Trans Am.

So where did Pontiac go wrong? I don’t know, somewhere between the T1000 and the Aztek, I assume. The new-generation 2004-2006 GTO, which was little more than a gussied-up Holden Monaro, didn’t help either.

But recently Pontiac guys like me have had hope. The new G8, and the promised G8 GXP, got us excited. Pontiac seemed to be learning from its mistakes and was getting back to cars with real performance. Cars that would sell. It may be awfully late in coming, but Pontiac was making a come back.

There’s no doubt, G.M. has some fat to cut. Heck, lose Saab, Hummer, even the environmentally conscious Saturn division. I won’t shed a tear. But Pontiac, that’s another story. It could regain its loyal following. Hopefully G.M. will give the legendary brand a chance to prove it.

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Brand Loyalty Only Lasts So Long
Peter M. De Lorenzo is publisher of AutoExtremist, an auto industry blog, and the author of “The United States of Toyota.”

In past decades, brand loyalty was paramount and a very real and powerful aspect of the auto business. In Detroit’s heyday it was common to hear people say things like, “I’m a Ford man” or, “We’re a Chevy family” or, “I’ve always been a Chrysler girl.”

Those days went away long ago. When Detroit began its 20-year slide into oblivion (around the late ‘70s) the concept of traditional brand loyalty eroded along with Detroit’s dwindling market share.

Sometimes a brand can’t be revived even if it the product is good.
But does that mean that brands like Pontiac are totally dispensable? No. Which is why G.M. is very likely going to retain at least two, if not three Pontiac models going forward (and probably sell them through G.M.C. dealerships).

Pontiac was once a glorious American nameplate known for its “march to a different drummer” cars that oozed attitude and swagger, and there are still a lot of people who really have a strong connection with the brand. Are there enough customers out there to support a whole divisional array of models? No. But there are probably enough people who would keep the Pontiac brand in existence as a niche performance vehicle within the abbreviated G.M. product portfolio.

Saturn’s fate teaches a different lesson about branding. It was very successful when it was launched by G.M., and enjoyed tremendous brand loyalty. But G.M. failed to nurture Saturn with new models, right when its core group of initial buyers were needing larger and more versatile vehicles. The result was that many of those Saturn loyalists moved on to other brands. Now, even excellent Saturn vehicles (the Aura and the Outlook) can’t gain any traction in the market, proving that sometimes a brand can’t be revived even if it the product is good.

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Hail to the Chief
Bob Merlis is a contributor to Automobile Magazine and a car collector whose fleet currently includes three Studebakers, an Alfa Romeo, a 1967 Fiat 500 Giardinera (station wagon) and a 1963 Lincoln Continental convertible.

As a guy who earns some of his living writing about cars, friends often ask my advice about potential purchases. A while back, a woman I know told me what she was looking for in terms of utility and size and described the Toyota Matrix/Pontiac Vibe twins. Both are made in the same plant using the same mechanical components, the lone example of a cooperative venture between General Motors and Toyota that springs to mind.

I told her that the Pontiac version retails for quite a good deal less than its Toyota equivalent and was really worth looking into. Her response?

“I’m not going to drive a Pontiac!” Clearly, the image of that brand, which soared to great heights during my childhood and adolescence, was damaged.

Fireball Roberts famously piloted a “Poncho” during the early Nascar days and “Little GTO,” this “modified Pon-Pon” equipped with “three deuces and a four-speed and a 389” was Ronnie and the Daytonas first and only hit record. “We build excitement” was Pontiac’s slogan but, ultimately, there just wasn’t any. It devolved into an anonymous brand, interchangeable with Buicks and Oldsmobiles built on the same platforms, using the same running gear. Consumers ceased to care because G.M. management seemed to be asleep at the switch in terms of responsible stewardship of the marque. Still, it’s sad to contemplate what is essentially the departure of Pontiac, more because of what it was than what it now is.

There was a wing nut in my old neighborhood who drove around in a ‘55 Pontiac Star Chief that sported a light-up hood ornament (Chief Pontiac rendered in streamlined amber plastic). I’ll always think of the chief pointing the way; too bad G.M. didn’t follow their forward-thinking symbol.

2009-02-18T11:10:00.002-05:00

From The New York Times:
A Painful Departure for G.M. Brands
By MICHELINE MAYNARD
Published: February 17, 2009
DETROIT — The brand that was once hailed as an important part of the future of General Motors now will be part of its past.
G.M. said Tuesday that it would phase out its Saturn brand by 2012. It does not plan to develop any more new vehicles for Saturn, which began 19 years ago as an effort to attract owners of small Japanese cars.

G.M. also said it was considering its options for the Pontiac division. The Pontiac name, part of the car business since 1932, could remain on some models, but may no longer be a separate division. G.M. said Pontiac would be a “focused brand” with fewer models.

The disclosures by G.M., contained in a viability plan submitted to the government, means that G.M. plans to cut its brands in half, to four: Chevrolet, Cadillac, Buick and GMC.

It said last fall that it would try to find buyers for Hummer and Saab. On Tuesday, it said it would decide on Hummer’s fate by March 31.

But is four the right number?

After all, most of its big competitors, including Toyota, Honda and Chrysler, build their businesses around three brands or fewer in the United States. Ford is moving to shed its foreign brands and plans to focus primarily on three — Ford, Lincoln and Mercury.

“A volume brand and a premium brand can get the job done. Toyota has proven that,” said Karl Brauer, editor in chief of Edmunds.com, a Web site that offers car-buying advice. “Cadillac, Chevy, done.”

The more brands a carmaker has, the more it must spread money around to develop vehicles and market them.

As a result, “every brand suffers,” said A. Andrew Shapiro, a managing partner with the Casesa Shapiro Group. “No particular brand or brands can achieve the share of voice that they need.”

Its extensive brand lineup has long been G.M.’s primary weapon. Founded in 1908 by William C. Durant, who brought together a collection of car companies, G.M. made the concept of “a car for every purse and purpose” its strategy during the 1920s for retaining buyers from their first car to their last.

Brands were a crucial element in G.M.’s effort to thwart Ford, then the country’s biggest car company, whose founder joked that buyers could have any color they wanted, as long as it was black.

G.M.’s strategy paid off during its best years, when it controlled more than half the American car market. But it held only 22 percent of United States auto sales last year, with more than half of its share coming from a single division, Chevrolet.

G.M. found out last decade just how expensive it could be to unwind a brand. It spent more than $1 billion to buy out dealers at Oldsmobile, which built its last cars in 2004.

Rick Wagoner, G.M.’s chief executive, said the automaker had set aside money to buy out dealers, but declined to specify a figure. “We have reserves in our plan to facilitate that,” he said.

He cited the economic downturn as the reason G.M. was phasing out Saturn. “Frankly, the opportunity for any brand, and for our volume as a whole, just looks radically different,” he said. “It is unfortunate and it seems like a cruel twist of fate at a time when Saturn is loaded up with a fantastic product portfolio.”

In a letter sent Tuesday to Saturn dealers, G.M. said it would entertain a plan from Saturn dealers or other investors for a spinoff of the division to keep it operating. It said it would provide information to potential investors.

But it warned a spinoff would be “a difficult and complex task, and some of the issues that must be resolved include product sourcing, capitalization and financing issues,” G.M. said in the letter signed by Mark LeNeve, a G.M. vice president for North American sales, and Jill Lajdziak, the general manager of Saturn.

When Saturn was started in 1990, as a “different kind of car, a different kind of car company” aimed at owners of small Hondas and Toyotas, its small cars were immediate hits. But G.M. executives decided in the mid-1990s that they needed to support G.M.’s other brands over Saturn, which by then had cost $5 billion.

G.M. did not add any new vehicles to the Saturn lineup for five years, despite pleas from dealers for bigger vehicles. Earlier this decade, G.M. decided to start selling vehicles from its Opel division, with some design changes, as Saturns in the United States.

Saturn sold 188,004 vehicles in 2008, down 21.7 percent from the previous year. Its best-selling vehicle was the Saturn Vue, a small sport utility vehicle.

Strict franchise laws protect dealers across the country from seeing their operations shut down without advance notice.

G.M. dealers said they were led to believe that the company was committed to the division.

“G.M. is picking on Saturn,” said Sherrill Freeborough, who owns Saturn dealerships in Grand Ledge and Okemos, Mich. “I want G.M. to be successful but I don’t think that always happens the other way around.”

In 1992, when G.M. began discussing the end of Oldsmobile, the division sold 412,000 vehicles. Except for Chevrolet, none of G.M.’s current brands sold that many vehicles last year.

Mr. Shapiro, the analyst, said G.M. should have rethought its divisions in the 1980s, when a number of new brands appeared in the United States, including Acura, Lexus and Infiniti, the Japanese luxury brands, and the Korean makers Hyundai and Kia.

“There were always good short-term reasons for not doing something,” Mr. Shapiro said.

Ed Dena, a Pontiac dealer in Dinuba, Calif., said he would eventually have to focus on his other G.M. brands, including Chevrolet, Buick and GMC. “Of course we’re sad because Pontiac is an icon,” he said. “But right now, in this industry, nothing is a shock anymore.”

Mary M. Chapman contributed reporting.

2009-02-17T22:22:00.001-05:00

From Automotive News:
THE AUTO INDUSTRY BAILOUT
UAW reaches new agreements with Detroit 3
Debt-for-equity negotiations continue
By David Barkholz
DETROIT -- The UAW today reached tentative agreements with the Detroit 3 on concessions to help the automakers weather the recession.
But the thorny issue of swapping debt owed to retiree health-care funds for company stock remains unresolved.
General Motors and Chrysler LLC were seeking concessions as part of their viability plans for federal bailout money. Ford Motor Co. is not seeking bailout money but wanted parity with Chrysler and GM.
A source familiar with the talks said the concessions involve overtime, bonuses and limits on unemployment benefits.
But the UAW had not reached agreement on a proposed debt-for-equity swap with Chrysler and GM, a condition of federal aid to the automakers. The Bush administration, which loaned money to GM and Chrysler in December, wanted the UAW to take half of the remaining money owed to its Voluntary Employees' Beneficiary Associations in company stock.

2009-02-14T16:12:00.000-05:00

From Reuters:
GM considering Chapter 11 filing, new company: report

CHICAGO (Reuters) – General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

GM declined to comment, the story said.

General Motors and Chrysler LLC face a Tuesday deadline to file restructuring plans to the government in exchange for receiving $17.4 billion in federal loans.

Automakers have struggled as U.S. auto sales have tumbled amid a recessionary economy. U.S. auto sales in January tumbled to a 27-year low.

GM has been in talks with bondholders and the United Auto Workers union to get an agreement on a restructuring that would wipe out about $28 billion in debt for the auto maker, sources have told Reuters. However, it appears unlikely a deal could be reached by the Tuesday deadline, they said.

GM has already announced plans to cut 10,000 salaried workers worldwide, or 14 percent of its staff, impose pay cuts for most remaining white-collar U.S. workers and has offered buyouts to its 62,000 U.S. workers represented by the UAW.

In addition, it is trying to sell its Hummer SUV and Swedish Saab brands and is reviewing the status of its Saturn brand.

2009-02-13T09:14:00.001-05:00

From Automotive News:
Toyota moves deeper into U.S. work cuts

Lindsay Chappell

NASHVILLE -- Still refraining from laying off any North American workers, Toyota Motor Co. said Thursday night that it is adopting wage freezes, reduced hours and a voluntary exit program for workers.
The new measures, which Toyota dubbed a "shared sacrifice" philosophy, come as Toyota faces its first financial losses since 1950 and the unfamiliar specter of idle auto factory lines.
Toyota has gone out of its way to keep its mostly non-union U.S. and Canadian production workers on the clock, even as it has shut down assembly lines.
But a statement released Thursday night by Toyota Motor Engineering & Manufacturing North America Inc., the company's U.S. manufacturing headquarters, said there is now a "strong possibility" that it will reduce work and pay at some plants.
Toyota is considering a schedule in which some workers would work 72 hours in a typical 80-hour, two-week period.

2009-02-12T23:16:00.001-05:00

From Automotive News:
THE AUTO INDUSTRY BAILOUT
Congress scales back tax break for car buyers

Harry Stoffer

WASHINGTON -- A proposed tax break for new-vehicle buyers is dramatically scaled back in the final version of the economic stimulus bill.
Auto dealers and their allies had sought to make interest on auto loans and the sales and excise taxes on new-vehicle purchases deductible from federal taxes. Proponents say those measures are needed to boost showroom traffic and sales.
But the final stimulus bill -- a compromise between House and Senate negotiators -- makes only sales and excise taxes deductible. The loan interest provision was dropped, a spokeswoman for Sen. Barbara Mikulski confirmed today.
Sources said the trim in the tax break for new-vehicle purchases reduced its cost from about $11 billion to about $2 billion. Congressional negotiators sought to limit the cost of the stimulus bill to pacify lawmakers worried about spending.
Mikulski, D-Md., sponsored the original provision on vehicle purchases at the request of dealers. The spokeswoman said Mikulski considers the deduction for sales and excise taxes an important victory.

2009-02-11T23:18:00.000-05:00

From Automotive News:
GM's Bob Lutz is retiring at year-end

Jamie LaReau

DETROIT -- General Motors product czar and often colorful spokesman, Bob Lutz, will retire at the end of this year.
Lutz, 76, is currently GM's vice chairman of global product development. In a statement on GM's Website, the company said Lutz will become a vice chairman and senior advisor on April 1.
Lutz will provide "strategic input into GM's global design and key product initiatives until his retirement at the end of 2009." Lutz will continue to report to CEO Rick Wagoner.
Tom Stephens will replace Lutz as vice chairman of global product development. Stephens, 60, will report to COO Fritz Henderson. Stephens is presently executive vice president of Global Powertrain and Global Quality. In this new assignment, Stephens will maintain his responsibility for overseeing GM's global quality activity.
"Bob Lutz was already a legendary automotive product guy when he rejoined GM in 2001," Wagoner said in the statement. "He's added to that by leading the creation of a string of award-winning vehicles for GM during his time here. His 46 years of experience in the global automotive business have been invaluable to us."

2009-02-03T20:31:00.001-05:00

From Automotive News:

JANUARY U.S. AUTO SALES
Ford, GM drop more than 40% as industry nears 27-year low

Chrissie Thompson

Ford Motor Co. and General Motors said sales plunged more than 40 percent in January, putting the industry on pace for its worst month since August 1982.
Ford's 41.6 percent fall and GM's 49 percent drop were steeper than analysts' forecasts. Honda, Nissan and Toyota posted declines ranging from 27.9 percent to 31.7 percent, cementing the industry's fourth straight monthly slide of more than 30 percent.
Ford sales analyst George Pipas projected industrywide sales for the month would fall below 10 million on an annual selling rate basis. That would be below analysts' average projection of a 10.3 million rate and the lowest in almost 27 years.
"The biggest reasons for the decline in the sales rate was the fleet market," Pipas said. "We estimate the industry fleet sales were down 65 or more percent from a year ago."
Ford said its sales to individual customers fell 27 percent, while its fleet sales plunged 65 percent. The fleet figure includes a 90 percent drop in sales to rental companies.
VW down, Subaru up
The Volkswagen brand was down 11.7 percent, while Daimler AG said sales of its Mercedes-Benz and Smart vehicles slipped 35.5 percent. Subaru, the only automaker to post an increase in U.S. sales last year, was up 8 percent.
Ford is trying to continue operations without federal aid, despite burning through $5.5 billion in cash last quarter. Last week the automaker said it finished the year with cash reserves of $13.4 billion and will tap $10.1 billion in credit lines. Ford needs at least $10 billion in cash to operate, analysts say.
GM and Chrysler LLC, which reports sales later today, are preparing viability plans for the U.S. Treasury Department to preserve the $13.4 billion in federal loans they have already received.
Analysts had expected the biggest Japanese automakers to report less severe declines than the Detroit 3 as the industry looks to recover from its worst U.S. sales year since 1992. Last year's light-vehicle sales dropped to 13.2 million, as soaring fuel prices in the first part of the year and a global credit crunch later in the year deepened a national recession. In 2007, 16.1 million light vehicles were sold in the United States.
Most analysts say sales levels will be suppressed through the first half of 2009 at least.
Falling production
Last week, Pipas said January production levels in North America that were two-thirds lower than last year's might trigger an industrywide 60 percent decline in fleet sales compared with January 2008. The retail rate for January would be in line with recent months, Pipas and GM both predicted -- about 8.3 million units.
January fleet sales fell partly because of U.S. automakers' extended plant shutdowns after the year-end holidays, analysts say. In addition, some corporations took advantage of GM's December fleet incentives. December fleet deals helped GM unload about 300,000 more vehicles than Deutsche Bank's Rod Lache expected, the analyst said in a note to investors.
The industry started 2009 with a 94-day supply of vehicles, more than 50 percent above the level recommended by analysts.

2009-02-03T20:29:00.000-05:00

From Automotive News:
Senate approves tax break for auto loan interest

Harry Stoffer

WASHINGTON -- The U.S. Senate voted today to make loan interest and sales taxes on vehicle purchases deductible from federal income taxes.
The proposal, championed by the National Automobile Dealers Association, was added to an economic stimulus bill under debate in the Senate. The vote was 71-26.
The provision was not in a House-passed version of the more than $800 billion package of spending increases and tax cuts.
A conference committee will decide whether the provision stays in. The bill is a top priority of President Barack Obama.
If the measure passes, taxes on auto loans will be deductible for the first time since 1986.
The provision on deductibility of loan interest is the first significant measure aimed at getting consumers back into showrooms and buying vehicles to get action from Congress. NADA says the measure will save consumers about $1,500 on a $25,000 vehicle.
Some experts have criticized the provision for not having enough up-front punch. Too many worried would-be buyers aren't thinking ahead to cutting future tax bills, they argue.
But the measure is a significant incentive and NADA had to focus on what could be accomplished politically, an organization spokesman said today.

2009-01-29T10:25:00.000-05:00

From Automotive News:
Ford burns through $5.5 billion in 4th quarter as losses mount

By Amy Wilson

DETROIT -- Ford Motor Co., the only U.S. automaker operating without federal loans, burned through $5.5 billion in cash during the final three months of 2008 as losses mounted.
Ford finished the year with cash reserves of $13.4 billion as it tries to avoid borrowing money from the U.S. government. Ford said it is immediately drawing down $10.1 billion in available credit lines because of concerns about the instability of the capital markets and the uncertain economy.
The company reported a net loss of $5.9 billion for the fourth quarter, compared with a loss of $2.8 billion a year earlier, capping its third straight year without a profit. The pre-tax operating loss, excluding special items, was $3.7 billion, compared with a loss of $620 million during the same period in 2007.
Some analysts say Ford needs at least $10 billion on hand to run its operations. At the current cash burn rate of $1.83 billion a month, Ford would have crossed that threshold by the end of February.
Drawing down the $10.1 billion would give Ford overall liquidity of $23.5 billion, minus the amount of cash been used thus far in January. Based on its current assumptions, Ford continues to say it has adequate liquidity to fund its business plan.
Ford executives have said they may ask for government help if industry sales don't start to recover this year.
U.S. rivals General Motors has received $9.4 billion in loans so far, part of a $13.4 billion packaged granted by President George W. Bush. Chrysler LLC has received $4 billion and says it needs at least $3 billion more.

2009-01-27T19:24:00.001-05:00

From The Washington Post:
Obama Issues Orders Toward More Fuel-Efficient Cars

By Steven Mufson and Juliet Eilperin
Washington Post Staff Writers
Tuesday, January 27, 2009; Page A04

President Obama issued two orders yesterday that could ultimately toughen fuel efficiency requirements for new cars and light trucks in what could prove stiff medicine for a U.S. auto industry already hobbled by financial troubles.

With General Motors and Chrysler leaning heavily on billions of dollars of federal loans, Obama is in a strong position to remake the industry with an eye toward cutting U.S. petroleum consumption and greenhouse gas emissions.

"Our goal is not to further burden an already struggling industry," Obama said, but to help American automakers "prepare for the future" and "thrive by building the cars of tomorrow."

The president raised hopes on all sides for a resolution of years of divisive debate over fuel efficiency requirements. Environmentalists and many state officials said they hope that Obama would endorse tough tailpipe emissions standards proposed by California. Automakers, meanwhile, want the administration to establish uniform nationwide mileage standards while moving to ease the cost by providing assistance and incentives for car buyers.

"If you're a stakeholder, you hope the stake goes in ground and not in your back or chest," said David McCurdy, president of the Alliance of Automobile Manufacturers, who watched Obama sign the orders yesterday at the White House.

Flanked by Transportation Secretary Ray LaHood and Environmental Protection Agency Administrator Lisa P. Jackson, Obama directed the EPA to reconsider granting California and other states waivers to set their own strict regulations over tailpipe emissions. California would require a 30 percent cut in those emissions, a mandate more stringent than the federal mileage standards. The new review process could take several months.

Obama also instructed the Transportation Department to draw up new interim targets for mileage standards starting in 2012 that ensure new vehicles reach the 35 mile-a-gallon level set by Congress for 2020. He left intact Bush administration guidelines for 2011 models already being designed.

"The days of Washington dragging its heels are over," Obama said. Saying the nation has arrived at a crossroads, he said: "It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs."

Separately, the State Department named Todd Stern the new U.S. envoy on climate change. Stern, a partner in the Washington law firm of Wilmer Cutler Pickering Hale and Dorr and a senior fellow at the Center for American Progress think tank, served as the top White House negotiator on the Kyoto talks on global warming from 1999 to 2001.

Obama's announcement on fuel efficiency standards encouraged state officials who want to institute their own greenhouse gas curbs but faced opposition from the Bush administration. Ian Bowles, Massachusetts secretary of energy and environmental affairs, said his state had encountered "a strong headwind from the federal government" over the past two years. But "to my mind, today's announcement represents a shift in direction that will lead to a significant federal tailwind."

Maryland Gov. Martin O'Malley (D) also applauded Obama's announcement. In 2007, the Maryland General Assembly passed a so-called clean cars law that would set stricter emissions standards for vehicle models hitting the road in 2010. The law would eventually raise average fuel efficiency of cars told in Maryland to 43 miles per gallon.

"In the long run, it's best for American automakers as well," O'Malley said.

Automakers in the past have not seen it that way and have filed at least three lawsuits in different jurisdictions to stop states from setting their own emission standards. "The suits are still there," said Gloria Bergquist, a spokesman for the Alliance of Automobile Manufacturers. But, she added, "We're the first to say we would like to find a better way forward."

Environmental groups argue that controlling tailpipe emissions from vehicles will do much to address climate change. According to the advocacy group Environment America, applying the California standards to the 14 states that have already adopted them will reduce global warming pollution by more than 450 million metric tons by 2020, an amount equal to eliminating all of the pollution from 84.7 million of today's cars for a year.

Staff writer Lisa Rein contributed to this report.

2009-01-27T19:02:00.000-05:00

From the New York Times:
January 25, 2009

Collecting

What Crisis? Collector Car Prices Soften but Don’t Crash

By ROB SASS

Scottsdale, Ariz.

FANS of classic cars often like to think of them as time machines. But the notion has recently taken on an unintended meaning, as prices in some sectors of the collectible-car market have turned the clock back to levels not seen since 2004-5.

All things considered, however, the market showed resilience in the string of auctions in and around Scottsdale, Ariz., this month. The long-predicted free fall in prices did not occur.

And there were some genuine surprises among the individual sales as more than $100 million worth of cars changed hands.

Perhaps the most unexpected results came at the Gooding & Company auction, which flew in the face of expectations and surrounding circumstances by a considerable measure. With $32.4 million in sales, compared with $21 million at last year’s sale, it seemed more like the summer of 2008 than the winter of 2009.

Gooding had the top-dollar sale of the final weekend with a 1960 Ferrari 250 GT California Spider, a late consignment that brought $4.95 million. And while seven-figure lots had become commonplace across Arizona over the last several years, this year there were just seven such sales and all were confined to Gooding, the last of the major auctions to get under way.

With the no-sales of some big-ticket cars at the RM Auctions sale and the still unfurling economic crisis on the minds of attendees, the mood at the beginning of the Gooding auction was tense — think back to the first “Saturday Night Live” broadcast after 9/11.

The $1.4 million sale of a 1929 Duesenberg Model J Dual Cowl Phaeton, just nine lots in, had the same ice-breaking effect as when Lorne Michaels, the show’s producer, asked Mayor Rudolph W. Giuliani if it was all right to be funny.

Mayor Giuliani’s impeccably timed response: “Why start now?”

David Gooding, chief executive of Gooding & Company, said there was still a strong market for good quality cars that were priced fairly and truly for sale. He did allow, however, that prices were down somewhat in the $250,000-$850,000 midrange of postwar European cars, although he sensed no similar weakness in prewar American cars in that range.

At the moment, vintage cars seem to be showing more strength in the market than other collectibles. Leigh Keno, a host of “Antiques Roadshow” on PBS, said that in general, presale estimates for American decorative arts sold at auction this season have been as much as 50 percent lower than they would have been two years ago. Mr. Keno said, “There is a sense that the market will reward more conservative estimates.”

At RM, the star car, a 1963 Chevrolet Corvette Grand Sport — one of just five examples of a Corvette racecar whose incredible potential was cut short by General Motors’ decision to stop supporting racing — didn’t sell during the auction. Nevertheless, RM sold a very respectable 83 percent of its lots for a total of approximately $18 million.

According to Ian Kelleher, RM’s chief operating officer, the sale attracted a record number of bidder registrations for the event, and a number of cars that could be considered “sensitive” in the marketplace sold quite well. An example of the latter was a 1967 Ferrari 275 GTB/4 Berlinetta that brought $918,500. While this was a bit less than some sales before October 2008, the price was a healthy increase over the $816,750 that RM got for a similar car at a May 2007 auction in Italy.

Given the economic circumstances, there was great interest in cars priced under $100,000 that would also serve as summer weekend drivers. Cars that are easy to find parts for, and eligible for events like vintage rallies and tours, did well.

RM, for example, sold a 1967 Alfa Romeo Duetto Spider — similar to the car driven by Dustin Hoffman in “The Graduate” — for $46,200. Gooding sold a 1954 Nash Metropolitan hardtop for $19,800, Barrett-Jackson garnered an astonishing $59,400 for a 1979 Pontiac Firebird Trans Am and Russo & Steele managed $49,000 for a 1961 Triumph TR3A. All were at the least strong results, and perhaps records.

Robert Pass of St. Louis was the consigner of the 1961 Triumph. Mr. Pass has been collecting cars since the late 1950s and said he was not aware of a TR3 ever approaching $50,000 at either a public auction or in a private sale. Mr. Pass credited Russo & Steele’s arena-style format, and the enthusiasm of Drew Alcazar, the company’s owner, for pushing the car over the top.

According to Craig Jackson, chief executive of the Barrett-Jackson auction house, his company anticipated the demand for more accessible cars and purposely adjusted its offerings to favor cars in the $50,000 to $100,000 range. This was reflected in the overall sale figure of $63 million, down some $20 million from last year, but a bit higher than the company’s 2005 results of $61 million.

Mr. Jackson said that his company worked hard with consigners to ensure that there was a “meeting of the minds” where sale expectations were concerned. Nevertheless, there were notable high sales, including the second 1957 Chevrolet produced, a two-door from the entry-level 150 series with just 46,133 miles, that brought $165,000. Barrett-Jackson also continues to be the sale known for drawing new people into the hobby, with 70 percent of registered bidders being first-timers.

One of the notable aspects of the Barrett-Jackson sale was the sale of 214 cars from the General Motors Heritage Collection. Most were prototypes or concept cars and included the striking 1996 Buick Blackhawk. Built to celebrate Buick’s 100th anniversary in 2003, it recalled the granddaddy of all design studies, the striking 1938 Buick Y-Job; the Blackhawk sold for $522,500.

Nearly all the cars in the G.M. offering were sold on either a bill of sale or a scrap title, according to Barrett-Jackson. The former, Mr. Jackson said, can never be legally registered for road use. Fortunately, the Blackhawk was sold on a scrap title so it can be registered and driven on public roads. It would be a shame for it to spend its life behind a velvet rope.

Aside from the Buick Blackhawk sold by Barrett-Jackson, few concept cars were offered in Arizona. An exception was the 1954 Dodge Firearrow III sold by RM for $880,000. While some 1950s dream cars look as if they took too much styling inspiration from the Air Force’s latest interceptor, the Firearrow was exquisite in every way.

Perhaps the best buy of the G.M. collection was a 1989 Corvette ZR2, a one-of-a-kind prototype with a big-block V-8 that sold for $71,500. Tom DuPont, a Florida collector, discounted those who tried to tie the timing of the G.M. sale with the company’s dire financial condition. Mr. DuPont said he thought G.M. was simply managing its collection as many private collectors manage theirs, eliminating some cars to make for a more orderly display of the remainder.

There is certainly some common ground between the perceptions of Mr. Gooding and Mr. Jackson in the collector car market, and Mr. Keno in the antiques world. Mr. Keno said he believed that the midrange of the American decorative arts market was the softest now, as is the case with the collector car market. “However,” he said, “the great things will always do well.”

2009-01-21T19:16:00.000-05:00

From Automotive News:
GM's sales fall, ending reign as world's largest automaker

General Motors said worldwide sales fell 10.8 percent in 2008, ending its 77-year claim as the world's largest automaker.
GM sold 8.36 million vehicles last year, putting it about 616,000 units behind the 8.97 million reported by Toyota Motor Corp. Tuesday.
The 2008 results cap an advance by Toyota that has seen the Japanese automaker overcome a 3 million deficit since the start of the decade, fueled in large part by gains in the United States. In 2008, both automakers posted sales declines.
At the time of the announcement, just before 9 a.m. Wednesday, GM defined itself on its Web site as "the annual global industry sales leader for 77 years.''
GM President Fritz Henderson had said the previous evening that retaining the title wasn't "terribly important," to him. He told the Automotive News World Congress last night that it's more critical that GM, which hasn't posted a profit since 2004, is strong financially.

2009-01-20T19:21:00.000-05:00

From Automotive News:
Fiat confirms plan to acquire 35% stake in Chrysler
TURIN, Italy -- Fiat S.p.A. and Chrysler LLC confirmed today that the Italian company intends to acquire an initial 35 percent stake in the U.S. carmaker.
In a joint statement, Fiat, Chrysler and Chrysler's majority shareholder Cerberus Capital Management L.P, said they have signed "a non-binding term sheet to establish a global strategic alliance."
The pact "would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrains, and components to be produced at Chrysler manufacturing sites," the companies said.
Under the terms of the deal, first reported on Monday by Automotive News Europe, Fiat would make available its distribution network in key growth markets. "Substantial cost savings opportunities" would be available to the alliance, the companies said.
The transaction already has the blessing of the UAW. UAW President Ron Gettelfinger said in the press release:
"This is great news for the UAW Chrysler team and we look forward to supporting and working with them to ensure Chrysler's long term viability."

Toyota projects first operating loss since 1941

2008-12-22T13:45:00.001-05:00

From AP via Yahoo:

By Yuri Kageyama, AP Business Writer

NAGOYA, Japan (AP) -- Toyota Motor Corp. projected its first-ever operating loss since it began such reports, acknowledging Monday that its nine-year stretch of global vehicle-sales growth had stalled.

Crashing auto demand, especially in its key U.S. market, and the profit erosion from a surging yen proved too much for Japan's top automaker, which had been booming on the success of its fuel-efficient models, incluading the Camry sedan and Prius gas-electric hybrid.

Gloom dominated the annual news conference by Toyota's president, who in recent years had outlined ambitious expansion plans. This year, Toyota President Katsuaki Watanabe even refused to give a worldwide vehicle sales goal for 2009.

"The tough times are hitting us far faster, wider and deeper than expected," he told reporters at Toyota's Nagoya office. "This is an unprecedented crisis requiring urgent action."

Watanabe also blamed the strong yen, which has risen to 13-year highs against the dollar to about 90 yen recently.

Toyota lowered its net profit forecast to just 50 billion yen ($555 million) for the year through March 2009 -- a tiny fraction of the 1.7 trillion yen it earned the previous fiscal year.

Toyota expects to lose money on an operating basis of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began giving such figures in 1941. The only such loss it has had is an internal calculation for the year ending March 1938, a year after the company was founded.

Operating income reflects a company's core business performance. Last fiscal year, Toyota had a whopping operating profit of 2.27 trillion yen.

Toyota also lowered the number of vehicles it expects to sell globally this calendar year to 8.96 million, down 4 percent from a year ago. Earlier this year, Toyota had expected to sell 9.5 million vehicles around the world in 2008.

Initially, it had an even more aggressive target of 9.85 million, and expectations had been growing that the tally would reach 10 million in coming years -- allowing Toyota to dethrone General Motors Corp. as the world's top automaker.

Watanabe vowed Toyota would grow so lean it would realize profitability even if its worldwide sales slid to as low as 7 million vehicles -- what he called the basic "bottom line" for Toyota.

"We must change to become more slim, muscular and flexible," he said.

Tsuyoshi Mochimaru, auto analyst for Barclays Capital in Tokyo, warned worse may be ahead. U.S. auto sales won't start recovering until toward the end of 2009, and the dollar may lag further, he added.

"The problem is next year," said Mochimaru. "It's unmistakable that things are extremely tough for Toyota."

Watanabe and other executives said production plans and other investment will be on hold, including a new plant in the southern U.S. state of Mississippi and expansion plans in India.

The automaker will focus on hybrids and small cars, and invest in ecological technology to prepare for long-term growth, they said.

Mitsuo Kinoshita, a Toyota executive, said he hoped the results for the fiscal year through March would mark a bottom, partly with the help of dropping material prices. Soaring prices of steel and oil had hurt automakers, but such costs have fallen back in recent months.

But unfavorable currency shifts will slash 200 billion yen ($2.2 billion) from its results for the fiscal year through March, while marketing activities, including measures to deal with sinking sales, trimmed another 570 billion yen ($6.3 billion), according to Toyota.

While Japan's automakers are in far better financial shape than their cash-strapped American counterparts, the global slowdown is hitting them hard.

At a similar news conference last week, Takeo Fukui, president of No. 2 Japan automaker Honda Motor Co., also lowered profit and sales forecasts and declined to give a vehicle sales goal for 2009.

Toyota said it will reduce temporary workers at its Japan plants to about 3,000 by March from an earlier 6,000. Full-time employees will have job security.

Toyota is a relatively old-style Japanese company that offers lifetime employment, and only in recent years has hired and let go of temporary workers to adjust production. It was reviewing overseas jobs but had not reached a decision, it said.

Monday marks the second time Toyota reduced its forecast. Initially, it had projected 1.25 trillion yen ($13.9 billion) in net profit for the year through March 2009, but last month lowered that to 550 billion yen ($6.1 billion). It lowered its fiscal sales forecast to 21.5 trillion yen ($239 billion), down about 18 percent on year.

Toyota's U.S. vehicles sales plunged by a third on year in November, when overall sales fell to their lowest level in more than 26 years. And there is little hope for a quick fix as consumers hold back big purchases amid a credit crunch, rising unemployment and fears about the future.

"The change that has hit the world economy is of a critical scale that comes once in a hundred years," Watanabe said.

The company's stock fell 5 yen, or 0.17 percent, to 2,895 yen in Tokyo.

GM, Chrysler to get bailout money

2008-12-19T09:10:00.002-05:00

From Bloomberg:

General Motors Corp. and Chrysler LLC will get $13.4 billion in government loans to keep operating in exchange for a restructuring under a rescue plan that President George W. Bush will announce this morning.

The money will be drawn from the Troubled Asset Relief Program and the automakers will get an additional $4 billion from the fund in February, according to a statement from the Bush administration. The money would allow GM and Chrysler to keep operating until March.

Under the terms of the plan, if the companies can't demonstrate financial viability by March 31 the loans will be called and the money must be returned, the statement said.

The Year's Best- And Worst-Selling Cars

2008-12-19T08:47:00.000-05:00

From: Forbes

Big trucks and small cars see strong sales, but SUVs have been left in the dust.

By Jacqueline Mitchell

2009 Ford Focus

In a year when gas prices topped $4 a gallon and automakers ran to Congress seeking a $25 billion bailout, one would assume that low-margin, fuel-sipping small cars are far outselling big gas-guzzlers. Indeed, seven of the 10 best-selling vehicles so far this year are small cars or sedans that get high gas mileage.

MORE AT FORBES.COM

But when gas prices go up and the economy heads south, "buyers shift ... from what they want to what they need," says Jeff Bartlett, deputy online editor of autos for Consumer Reports. And what many buyers still need are big pickup trucks, such as the Ford F-150 and Chevrolet Silverado--the two best-selling vehicles in America so far this year.

The F-150 attracted 473,933 buyers this year, making it the No. 1-selling vehicle for 2008--it's been the best-selling vehicle in America for 27 years running. Another 431,725 buyers drove off Chevrolet lots in a Silverado.

"The pickups are a solution to a need," says Bartlett, as those who buy the vehicles use them for their towing, off-road and cargo-hauling capabilities.

What Americans don't need, however, are gas-guzzlers that don't serve a purpose. Such is the case for the Nissan Armada, which rolls in at No. 5 among the worst-selling vehicles so far this year. Armada sales are off 49.1% this year compared to last year, with only 14,753 buyers purchasing the big and brawny SUV. It gets a combined 14 mpg.

The pickups don't do much better on fuel economy, but their utility equates to their enduring, strong sales. Buyers who have a choice between an SUV and a smaller car, however, want good fuel economy, according to a survey Consumer Reports conducted in the summer. That's why the Armada, Bartlett says, "is losing consumer appeal."

Behind the Numbers

To generate our lists of the best- and worst-selling cars so far this year, we used automaker-provided sales numbers from January to November. The vehicles with the highest unit sales made the list of best-sellers.

To find the worst-selling cars we looked at the lowest sales figures for the same time period, as well as the percentage decrease in sales from 2007 to exclude high-end luxury and performance cars that are produced only in small numbers each year. The vehicles with the lowest sales made the list.

2009 GMC Envoy

As bad of a year as it's been for sales of the aforementioned Armada, it's not the worst-selling vehicle in 2008. That title goes to Hyundai Entourage minivan, with only 5,405 sold this year. Not far behind, at No. 4, is the Chrysler Pacifica, a cross between an SUV and a minivan that sold only 6,671 units so far this year, a drop of 87% from the same period a year ago. No turnaround is in the works, either--Chrysler announced at the beginning of the year that production has ceased on the Pacifica, Chrysler Crossfire and Dodge Magnum.

The problem with the Pacifica and other crossover vehicles like it is that consumers have not embraced them as the new family car, says David Thomas, senior editor at Cars.com. "Buyers just aren't buying them. None of them have done well."

Joining the Armada, Entourage and Pacifica in the top five worst-selling vehicles are the Mitsubishi Endeavor, with only 5,687 units sold through November, and the Hummer H2, with only 5,721 sold.

No SUV brand is immune from the sales slump. In the second half of the list of the worst-selling cars, all five--the Toyota FJ Cruiser, Jeep Commander, GMC Envoy, Dodge Durango and Hummer H3--are SUVs. Furthermore, all five have seen a staggering percentage drop in sales of around 50% from the same 11-month period in 2007.

The Bright Spots

While consumer interest in most SUVs has waned, many fuel-efficient small cars have seen very strong sales in 2008.

Buyers purchased 352,248 Honda Civics and 184,152 Ford Focus cars this year, ranking sixth and 10th on our list, respectively. The gas-powered Civic gets 29 mpg, but the sales numbers also include the even more efficient hybrid version, which gets a combined fuel economy of 42 mpg.

Joining the two trucks and the Civic in the top five best-selling vehicles so far this year are the Toyota Camry (411,342 sold) and Honda Accord (350,638 sold).

But while gas prices had an impact on the sales of some small cars and hybrid vehicles, they haven't had as big of an effect as the economic crisis and credit crunch, experts say. In other words, their sales should be much higher.

"We have seen the best deals in terms of rebates and incentives in the last four months, but we are not seeing auto sales go up," says Thomas. "The economic crisis is stopping people from buying cars."

Chrysler to Shut Factories for a Month

2008-12-17T19:39:00.000-05:00

From: The New York Times

DETROIT — Chrysler said Wednesday that it would close all its factories for at least one month, starting at the end of this week, in response to plunging vehicle sales in the United States.

The company said the plants would resume production no sooner than Jan. 19. Some plants will remain closed for several more weeks. Normally, the Detroit automakers close their factories for about two weeks at the end of the year.

Workers at the plants will be laid off during the down time, but the companies’ jobs bank program ensures that they will continue to receive most of their pay. The United Automobile Workers union agreed this month to suspend the jobs bank to help the companies save money, but it is unclear when that change will take place; after it does, workers whose plants are idled will receive only unemployment benefits.

Meanwhile, worries that Chrysler could be forced to file for bankruptcy have spooked many dealers into borrowing so much money from the automaker’s lending arm that the company said it might need to suspend the loans.

Dealers have been requesting nearly $60 million a day from a fund used to finance vehicle inventories, and a total of $1.5 billion since July, Chrysler Financial’s chief executive, Thomas F. Gilman, told dealers in a letter dated Dec. 12. Mr. Gilman called the requests “troubling” and urged dealers not to borrow more than “what’s absolutely necessary for the operation of your business.”

The announcements come with vehicle sales in the United States at the lowest level in 26 years. Chrysler’s sales were down 47 percent in November, compared to a 37 percent decline for the industry over all.

Chrysler’s chief executive, Robert L. Nardelli, told Congress this month that the company needed an immediate loan of $7 billion to help it survive into the new year. Senate Republicans blocked legislation to aid Chrysler and the other Detroit automakers last week, but the Bush administration is expected to step in with some form of assistance.

G.M., which has said it needs $4 billion this month to stay afloat and another $14 billion after that, said last week that it would shut 20 plants in North America for at least part of the first quarter. Ford has also announced significant production cuts but says that it is healthier than the other two companies and does not need any loans immediately.

“People just don’t want to buy cars,” Anthony Viviano, the chairman of Sterling Heights Dodge and Meadowbrook Dodge near Detroit, said. “Hopefully, by Friday the president O.K.’s this thing. We just have to calm everybody down.”

Mr. Gilman’s letter, first reported Wednesday by Bloomberg News, showed that dealers were feeling jittery along with their would-be customers.

“They don’t know what to do. They’re just running wild,” Mr. Viviano said. “They’re getting scared.”

Money that car dealers borrow to cover the cost of vehicles on their lots is known as floor-plan financing. At Chrysler Financial, early loan payoffs go into a “cash management account,” which the dealers can then borrow from as needed. The dealers get 2 percent bonuses on money they keep in the account for a certain period of time.

Without access to floor-plan financing, few dealers would be able to order new vehicles.

“Chrysler Financial finances 75 percent of all vehicles shipped to U.S. dealers, and we continue to support our dealer body with uninterrupted wholesale financing,” a Chrysler Financial spokeswoman, Amber Gowen, said.

Chrysler said its dealers, during a recent meeting at the company’s headquarters in Auburn Hills, Mich., told executives that they had lost 20 percent to 25 percent of their volume because consumers were unable to obtain loans.

“They have many willing buyers for Chrysler, Jeep and Dodge vehicles but are unable to close the deals, due to lack of financing,” Chrysler said.

In addition to idling their plants, automakers have been trying to save money by shrinking the size of their work force.

In November, Chrysler cut about 5,000 salaried jobs through a buyout and early retirement program. By the end of this month, it is expected to have eliminated more than 1,800 hourly positions.

Foreign automakers have been reacting to the sales slowdown, too. Toyota said this week that it would delay work on a new factory in Mississippi that is scheduled to build the Prius hybrid sedan, and Honda said it was reducing first-quarter production by 119,000 vehicles.

What makes a car American?

2008-12-13T09:13:00.000-05:00

From CNN:

By Ashley Fantz

With the top U.S. automakers in economic survival mode, "Buy American" is a frequent cry among those trying to save jobs at home.

Georgia trucker Douglas Sullivan says he's concerned more about quality than the origin of a vehicle's parts.

But buying a car to benefit the U.S. economy has become an ambiguous, complicated challenge.

"How you define an American car is one of the great conundrums of this world," said Dutch Mandel, the editor and associate publisher of AutoWeek.

Fewer than half of the parts on some Big Three vehicles are made in the U.S.

Looking at a Ford Fusion? It is assembled in Mexico. The Chrysler 300C is assembled in Canada, but its transmission is from Indiana; the brand's V-8 engine is made in Mexico. Engines in the Chevrolet Equinox sport utility vehicle are from China.

On the other hand, Toyota's Camry is comprised 80 percent of parts made in the United States, and 56 percent of Toyota's vehicles sold in the U.S. also are made here, according to Toyota spokeswoman Sona Iliffe-Moon.

The Toyota Sienna and Tundra also have 80 percent of their parts manufactured in the U.S.

"When you have manufacturers from around the world building cars in the U.S. with 85 percent domestic content -- engine, transmission, assembly -- is that an American car?" Mandel asked. Or, he asks, is it considered foreign because the profits go back to a foreign country?

"It's truly a global industry," said Thomas Klier, a Chicago, Illinois, economist who co-authored "Who Really Made Your Car?" an encyclopedic analysis of the auto industry melting pot. "When you think of buying American, you should focus on three points -- its engine, transmission and where it was assembled," Klier said.

To get that information, read a vehicle's window sticker. U.S. automakers are legally required to detail the origin of a car's parts and its final assembly point.

"Unfortunately, there are few people who know about the sticker or even bother to look at it," said Bernard Swiecki, a senior project manager at the nonprofit Center for Automotive Research in Michigan, which follows trends in the industry.

The sticker's details were news to Douglas Sullivan, 43, a truck driver from Snellville, Georgia. Though he prefers foreign brands, believing them to be of higher quality, he said he used to favor U.S. brands because he wanted to support American workers.

"I wanted to keep the jobs right here," Sullivan said.

Swiecki said many people think about image of a brand, rather than the way that brand has evolved over decades as the market has grown more diverse and competitive.

"They will think, 'I'm buying a GM, I'm getting an American car,' " Swiecki said.

Foreign car manufacturers generate billions of dollars in jobs and community infrastructure in the U.S., but there is a difference between Detroit's economic footprint and that of its foreign rivals.

The Center for Automotive Research says Detroit's Big Three employed almost 240,000 people in the U.S. at the end of 2007. Foreign makers had about 113,00 U.S. employees at the time.

The key difference in how the Big Three and foreign brands support jobs in the U.S. comes outside the factories, according to a 2006 study by the Level Field Institute, a group formed by Big Three retirees in Washington.

"What's driving the difference in jobs ... is investment in research, design, engineering and management," Level Field President Jim Doyle said in a statement on the 2006 study.

The Center for Automotive Research said the Big Three had 24,000 engineers on U.S. payrolls in 2007. The Japan Automobile Manufacturers Association said its member companies had 3,500 U.S. research and development employees in 2007.

Level Field found that every 1,000 vehicles sold by Detroit's Big Three in the U.S. support more than twice as many jobs as 1,000 vehicles sold by foreign nameplates.

Most Americans consumers understand that the industry is global, Swiecki said, and they are more savvy than ever in purchasing vehicles.

"For the most part, gone are the days of people going to a car lot and paying a buck to take a swing of a hammer at a foreign-made car," Swiecki said.

But there are exceptions.

A Savannah, Georgia, Ford dealer sold 15 cars last weekend after he ran a radio ad blaming Japan for Detroit's financial funk.

While 15 was substantially better than weekends before the ad, dealer O.C. Welch said, it was still about half of the business he did a year ago.

"All you people that buy all your Toyotas and send that money to Japan, you know, when you don't have a job to make your Toyota car payment, don't come crying to me," Welch says in the ad. "All those cars are rice ready. They're not road ready."

Sullivan, who was at an Atlanta, Georgia, dealership Thursday to pick up his American brand minivan from the service department, said he has had a different experience.

He said the vehicle has given him trouble, and whenever he replaces it, he'll probably go with a foreign brand, regardless of whether any of the parts were made in the United States.

"What I look for is good gas mileage, and when I pay it off in four or five years, it's still running," said Sullivan, who has owned several American and foreign brands. "It seems I get better quality with a foreign car."

Gimme A Car That's Cheap, Sporty And 'Green'

2008-12-13T08:50:00.000-05:00

From NPR:

By Tanya Ballard Brown

Troy Witcher/Lindsay Mangum

After being denied the role of Wonder Woman, the author is now lamenting the lack of affordable energy-efficient sports car options.

Enlarge

Kristie Bull

Actor Daniel Craig took the Aston Martin DBS through its paces during the opening scenes of the latest James Bond movie. AP Photo/Graylock.com

Enlarge

Remy de la Mauviniere

The Tesla Roadster can accelerate to 60 mph in 3.9 seconds. The car is priced at $110,000. AP Photo

Enlarge

Kiichiro Sato

The Fisker Karma is a luxury plug-in car priced at about $87,000. Fisker is taking pre-orders for late 2010 delivery. AP Photo

December 10, 2008

This week congressional Democrats and the White House are finalizing a $15 billion emergency loan package to help prevent the collapse of General Motors Corp. and Chrysler LLC.

Maybe they wouldn't need these loans if they just made an affordable "green" sports car.

I love sports cars.

Cars with manual shift transmissions. Cars with engines that rumble and roar when you turn the ignition. Cars with sleek, aerodynamic bodies that sit low to the ground, grip the road, hug curves and limit the number of passengers.

While other people might have drooled over actor Daniel Craig in the latest Bond flick, Quantum of Solace, I couldn't tear my eyes away from the Aston Martin DBS he drove during the opening scene car chase. At one point I turned to my husband and whispered, "I WANT THAT CAR!"

So recently when a local TV station did a spot on the latest trends in hybrid and electric cars, I wondered for the 8,000th time, "Why are all of these cars ugly?"

My love of sports cars is an old one, born when my uncle bought his Datsun 280ZX in 1978. I practically worshipped that car and begged him to give me rides all of the time so I could watch him changing gears and pushing the clutch.

For years I would play games with my cousin, where I pretended to be racing down highways in the Z darting in and out of lanes, dodging traffic and the police and and ... well, let's just say, I get Danica Patrick.

When I turned 16 and got my driver's license my uncle tossed me the keys to the Z and told me to ride out. I rolled down hills, stalled at stop signs and held up traffic at several intersections while I figured out what a friction point was and how to control it.

I love sports cars.

I also understand the need to save the environment. I saw An Inconvenient Truth. I read the recent stories about acorns disappearing. And admittedly, I likely will end up putting about town in a Smart Car when it's all said and done.

But what I don't understand is why car manufacturers can't create a reasonably priced, energy-efficient vehicle that looks like a Porsche. OK, maybe that's revving it up too much, but surely there is some aesthetic middle ground between that flashy eyecatcher and the Smart Car.

At some point more of the Tesla roadsters will hit the road, but if the manufacturer sticks to the $110,000 per car pricing plan, I won't be driving it. And some of the other options coming to the market — the Venturi Fetish, Lightning GT and the Fisker Karma — are also priced for people who likely have more disposable cash than the average two-income family. Sigh.

But if the goal is to get more people driving cars that cause less damage to the environment, it would seem a no-brainer that car manufacturers would start designing jazzier-looking, reasonably priced cars. Those cars would appeal to people who care about the environment, but also get excited about the driving experience and crave a car that looks and performs like the Aston Martin DBS.

Hopefully one day soon I'll be able to say "I love hybrid sports cars."

Tanya Ballard Brown is an editor for NPR.org.

Administration may aid automakers

2008-12-13T08:12:00.000-05:00

From N.Y. Times:

By STEPHEN LABATON and DAVID M. HERSZENHORN

Published: December 12, 2008

WASHINGTON — The Bush administration said on Friday that it was prepared to intervene to prevent the collapse of General Motors and Chrysler after Republican senators blocked a compromise proposal to rescue the automakers.

The decision came after a tense standoff this week in which senior White House officials pleaded with Senate Republicans not to block the measure, including a warning by Vice President Dick Cheney that they would be remembered for decades as the party of Herbert Hoover if the industry collapsed.

But while Senate Republicans stood their ground — in open revolt against President Bush — it was the White House that gave in.

Shortly before the American markets opened on Friday morning, White House and Treasury Department officials, concerned that steep declines in overseas stock markets could provoke a new round of market panic in the United States, said the administration would consider providing temporary relief.

After refusing for weeks to tap the $700 billion financial rescue fund, the administration suggested it would dip into the fund to at least permit the companies to continue their operations until the new Congress and new administration arrive next month.

“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” said Brookly McLaughlin, a Treasury spokeswoman.

Administration officials said they had not decided how much to loan the auto companies or on what terms, and were spending Friday examining their books and cash-flow projections.

The government officials said they expected the companies and the unions would be asked to make significant concessions. They also did not rule out the prospect of a bankruptcy for one or more of the companies, but vowed that it would not be “uncontrolled,” meaning that enough financing would be provided to enable a reorganization.

Senior administration officials spent part of the day talking to auto executives and their lobbyists. People briefed about the discussions said that Chrysler had asked for financing to make it to February or March and the company was hoping that the administration would decide to lend it and General Motors about $11 billion. G.M. has said it needs $4.4 billion this month and another $4.4 billion next month

Administration officials said they feared a collapse of one or more of the car companies could have broader implications for the economy.

Some 3,000 suppliers, for example, are owed about $13 billion by the auto companies, according to Neil De Koker, chief executive of the Original Equipment Suppliers Association in Troy, Mich., a trade group that represents auto suppliers. Most suppliers sell parts to all three companies, as well as to Japanese auto makers. The fear is that if one of the Big Three fail, it would take down important suppliers who would then be unable to send parts to the others.

The flat financial markets on Friday appeared to give some breathing room to the administration as it worked to hammer out a plan. Officials cautioned that this rescue plan might not resemble either the House bill or the alternative put forward by Senate Republicans.

The White House had initially expressed reluctance to intervene in the auto crisis, and instead supported redirecting $14 billion that Congress had allocated to help the automakers retool to make more fuel-efficient cars. All but $15 billion of the first $350 billion of the financial rescue fund has been committed by the administration to banks and other financial institutions, and Treasury officials had been saying before Friday that they did not know whether they would seek permission from Congress to use any of the other $350 billion. But Congressional leaders have said that the lawmakers have no intention of returning to Washington until the new session begins next month.

Labor leaders in Detroit hailed the announcement by the administration.

“I think it’s great news, the responses we’ve been getting out of the White House and the Treasury,” said Ron Gettelfinger, the president of the United Automobile Workers union. “It’s important for the White House to exert their influence to release this money as quickly as possible. We cannot afford a run on the banks.”

Both G.M. and Chrysler have said they are in desperate need of cash by the end of December to pay suppliers that have already delivered parts, as well as to make employee payrolls.

The two automakers have both hired bankruptcy counsel, but have repeatedly said that a Chapter 11 filing is a bad option because of the difficulty in getting financing while reorganizing.

The companies are also cutting costs deeply to preserve their dwindling cash hoards. Chrysler just cut another 5,000 salaried jobs through buyouts and early retirements at the end of November. G.M. said Friday that it would drastically reduce vehicle production in the first quarter of 2009 by 250,000 units.

Agreement reached on $15 billion plan to rescue GM, Chrysler

2008-12-10T09:13:00.000-05:00

From Reuters via Automotive News:

WASHINGTON -- The White House and congressional Democrats on Tuesday night reached an agreement in principle on a $15 billion proposal for bailing out U.S. automakers and forcing them to restructure or fail, officials said.A Bush administration official and a Democratic leadership aide said the outline covered key points but final issues needed to be resolved and put in writing.Democrats have arranged to have the House of Representatives vote on a bill as early as Wednesday and send it to the Senate for consideration.President George W. Bush and President-elect Barack Obama were both urged by a key lawmaker to help rally support by Democrats and Republicans for the pending measure."Bipartisan hard work has paid off," said Democratic Sen. Carl Levin of Michigan whose home state headquarters General Motors, Ford Motor Co. and Chrysler LLC."I understand an agreement has been reached," Levin said in a statement.The bailout is designed to allow GM and Chrysler to avert threatened bankruptcy through March with short-term loans. Ford Motor Co. is not requesting immediate help but would like a $9 billion line of credit in case its finances worsen.The parties that negotiated the tentative deal agreed last week that the money would come from an Energy Department fund established in September to help Detroit make more fuel-efficient cars.

Congress sends White House auto aid proposal

2008-12-08T17:20:00.000-05:00

From Associated Press:
WASHINGTON – Congressional Democrats on Monday sent the White House a draft of a roughly $15 billion auto bailout they aim to bring to a vote this week, but White House officials gave a cool initial response.
The measure would rush bridge loans to Detroit's struggling Big Three but would also demand that the auto industry restructure itself in order to survive and would put an overseer chosen by President George W. Bush in charge of monitoring that effort, according to a draft obtained by The Associated Press.
The White House had just begun evaluating the Democratic language, according to officials who would comment on the continuing negotiations only on condition of anonymity. But they said the draft didn't appear consistent with the principles behind a broad agreement to give long-term financing only to viable companies. They said it was hard to tell definitively whether their doubts were warranted and they would continue talking to Capitol Hill representatives.
At the Capitol, Senate Majority Leader Harry Reid, D-Nev., said, "While we take no satisfaction in loaning taxpayer money to these companies, we know it must be done." He added, "This is no blank check or blind hope."
Earlier Monday, the White House and a top Democratic lawmaker said they were likely to strike a deal quickly on the multibillion-dollar bailout, which places strict restrictions on the automakers while they're receiving the loans and mandates that the government overseer keep close tabs on their efforts to restructure.
The emergency loans would be drawn from an existing program meant to help the automakers build fuel-efficient vehicles.
Among the requirements included the draft proposal is one that the carmakers getting federal help get rid of their corporate jets — which became a potent symbol of the industry's ineptitude when the Big Three CEOs used them for their initial trips to Washington to plead before Congress for government aid.
The White House said the fundamental approach in the language does not appear to meet Bush's main test: that long-term financing with taxpayer dollars only be made available to companies with a viable future in the marketplace. Bush officials believed congressional negotiators were on board with this idea as well.
The proposal also gives the overseer — a kind of "car czar" — say-so over any major business decisions by the automakers while they're taking advantage of federal aid. The companies would have to open their books to the government, including informing the overseer of any transaction of $25 million or more and any "material change" in their financial condition.
Under the plan, the carmakers' could get emergency loans right away. Then the overseer would write guidelines, due on the first of the year, for restructuring the companies that received them.
In testimony before Congress last week, General Motors Corp. and Chrysler LLC, which have said they are weeks from collapse, made it clear they would need a total of $14 billion to $15 billion to survive through early 2009. Ford Motor Co. has said it has enough money to stay afloat unless one of the other Big Three goes under or the economy deteriorates more sharply.
While the measure would put an administration official selected by Bush in charge of setting terms for restructuring, the decision about whether the terms were being met would not be made until President-elect Barack Obama had been sworn in. Congressional Democrats and the White House were working to find a broadly supported candidate who could span the two administrations.
Congressional officials said Kenneth Feinberg, the lawyer who oversaw the federal Sept. 11 victims' compensation fund, was under consideration for the position.
Asked if a deal could be struck for a vote as early as Monday, White House spokeswoman Perino said, "I think it's very likely." That was before the Democrats sent their draft.
Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, said that he, too, expected a deal by the end of the day and enactment by week's end.

GM says it "disappointed" and "betrayed" consumers

2008-12-08T13:23:00.000-05:00

From Reuters:

DETROIT – General Motors Corp on Monday unveiled an unusually frank advertisement acknowledging it had "disappointed" and sometimes even "betrayed" American consumers as it lobbies to clinch the federal aid it needs to stay afloat into next month.
The print advertisement marked a sharp break from GM's public stance of just several weeks ago when it sought to justify its bid for a U.S. government on the grounds that the credit crisis had undermined its business in ways executives could never have foreseen.
It also came as Chief Executive Rick Wagoner, who has led the automaker since 2000, faces new pressure to step aside as GM seeks up to $18 billion in federal funding.
"While we're still the U.S. sales leader, we acknowledge we have disappointed you," the ad said. "At times we violated your trust by letting our quality fall below industry standards and our designs became lackluster."
The unsigned open letter, entitled "GM's Commitment to the American People" ran in the trade journal Automotive News, which is widely read by industry executives, lobbyists and other insiders.
In the ad, GM admits to other strategic missteps analysts and critics have said hastened its recent decline.
"We have proliferated our brands and dealer network to the point where we lost adequate focus on the core U.S. market," the ad said. "We also biased our product mix toward pick-up trucks and SUVs."
But GM also says in the ad that it was hit by forces beyond its control as it tried to complete a restructuring earlier this year.
"Despite moving quickly to reduce our planned spending by over $20 billion, GM finds itself precariously and frighteningly close to running out of cash," the ad says.
A failure of GM would deepen the current recession and put "millions of job at risk," according to the ad, which also highlights the automaker's pledged restructuring and intention to begin repaying taxpayers in 2011.
GM spokesman Greg Martin said the ad was an attempt by the automaker to present "a pledge directly to the public."
"We believe we need to deliver this commitment unfiltered since quite a bit of media commentary has not kept pace with our actual progress to transform the company," Martin said.
Senate Banking Committee Chairman Christopher Dodd, a Democrat from Connecticut who is central to the effort to craft an auto bailout bill, on Sunday said GM should replace Wagoner.
GM says Wagoner has the support of the company's board.
(Reporting by Kevin Krolicki, editing by Dave Zimmerman)

UAW agrees to suspend Jobs Bank, Gettelfinger says

2008-12-03T14:21:00.000-05:00

From Automotive News:
By David Barkholz
The UAW has agreed to suspend the Jobs Bank program and allow the Detroit 3 to delay making payments to a retiree health care trust in 2010 to help the automakers through their cash crisis, UAW President Ron Gettelfinger said.Gettelfinger spoke after summoning the presidents and chairmen from Detroit 3 locals for an emergency meeting in Detroit today.The union is willing to make modifications to the 2007 contracts reached with General Motors, Ford Motor Co. and Chrysler LLC, said Jeff Everett, a local Chrysler president who attended the meeting. He said concessions on wages and benefits for active workers weren't discussed. "Times are tough, and we are going to do what we have to do,'' said Everett, president of UAW Local 1166 in Kokomo, Ind., in an interview. Under the so-called Jobs Bank program, laid-off factory workers can receive as much as 95 percent of their regular pay.Gettelfinger and the automakers' CEOs are scheduled to appear before the Senate Banking Committee tomorrow and the House Financial Services Committee on Friday.

America's most- and least-stolen cars

2008-12-02T10:39:00.001-05:00

From Forbes.com:

Big trucks and SUVs are among the most appealing to car thieves.

By Jacqueline Mitchell

2007 Dodge Charger

Big trucks and SUVs are among the most appealing to car thieves. In the past few years, big, bold SUVs have become almost synonymous with the success of entertainment and sports stars. You make it big, you buy an Escalade. Or a Hummer.

Hopefully, there's money left over to hire a full-time driver who can watch over the car, because these two vehicles are among the most likely to be stolen.

The 2007 Cadillac Escalade ESV, a full-size luxury SUV, has the highest theft-claim frequency of any vehicle by a long shot. It's 15 times more likely to end up in the hands of thieves than the least-stolen car, the luxurious Mercedes E Class sedan, according to the theft-claim frequency report for 2005-07 model year cars, SUVs and light trucks, produced by the Highway Loss Data Institute (an affiliate of the Insurance Institute for Highway Safety). The E Class, Buick Rainer and Subaru Forester have the lowest theft-claim frequency reports.

"The Escalade has been the star of the show with car thieves for the better part of the decade," says Russ Rader, an IIHS spokesperson. "It has pop-culture appeal, and thieves are attracted to it."

While the Escalade is the most coveted among thieves, the Hummer H2 and the Hummer H2 SUT (a sport utility truck with a small pickup bed in the rear compartment), are also highly desirable--and among the top 10 vehicles with the highest theft claim frequencies. Given a choice between a Hummer and a small car like the Ford Focus or a wagon like the Volvo V70, a thief is eight times more likely to go for the SUV.

To generate lists of the most- and least-stolen cars, the IIHS annually reviews insurance-claim reports to determine theft-frequency rates based on the number of claims filed for every 1,000 vehicles insured each year. The 2008 report, released in October, only includes 2005, 2006 and 2007 model-year cars, light trucks and SUVs, with the exception of the Cadillac Escalades (only the 2007 model is included because it was redesigned for that model year) and the Dodge Charger (only the 2006 and 2007 models are included since it was not available in the 2005 model year). Based on the claims filed, the IIHS also calculates the average loss payment--the amount paid to the consumer by the insurance company--made for each claim filed. Although there are plenty of sedans and smaller models that are attractive to thieves, most of the vehicles comprising the list of the top 10 most-stolen cars are big trucks and SUVs.

There are many reasons why thieves choose popular, large vehicles over everyday family cars, but one is accessibility, says Rader. "If you've got a typical family sedan ... it is most likely spending the night in a suburban garage."

Desirability, however, is a big factor. The Escalade (11.3 claims per 1,000) and its slightly larger sibling, the Escalade ESV, are likely popular among thieves, says Rader, for the cars' expensive parts and accessories. Escalade owners are known to add premium audio equipment, flashy rims, extra chrome and interior accessories as well. That might explain why the average claim loss paid for a stolen Escalade is $14,657 and $13,060 for the ESV. The average loss payment, across all vehicles, is only $9,396.

Thieves are also attracted to a vehicle's cargo. The Ford F-250 and F-350 SuperCrew pickups have open beds that may include expensive equipment or tools that are just as appealing to thieves as the truck itself. The average loss payment claim for these vehicles are among the highest ($19,250 and $20,138, respectively), which may also include claims for whatever equipment or cargo these trucks may have been holding at the time they were stolen.

Cadillac recognizes that the appeal to thieves "is an unfortunate side effect of the desirability" of the Escalade, but says it is doing its part to make the vehicle harder to steal, according to a Cadillac spokesperson. For the 2009 model year, Cadillac added a theft-deterrent feature through General Motors' General Motors OnStar communication system. When an Escalade or Hummer is reported stolen, OnStar will remotely shut off the vehicle's power, making it virtually impossible for anyone to drive it.

2007 Mercedes Benz E-Class

But reporting a vehicle stolen needs to happen quickly, since a thief wants to offload it quickly--either whole or as parts. The Insurance Information Institute, a nonprofit organization, estimates a car is stolen every 24 minutes.

The best deterrent of all, however, is buying the kind of car that thieves tend not to steal, especially something like the Volvo V70 (the claim frequency is only 0.8 out of 1,000 per insured vehicle year). Nevertheless, if the V70 or any other car suddenly were to become attractive to thieves, auto experts say there is relatively little that a car owner can do to stop them. If professional thieves want a certain kind of car badly enough, they'll go to just about any lengths to get it.

"If a thief wants your car, they will load it on a flatbed," says Rader. They will either strip it for parts or head for coastal borders "where it will end up on a boat and be exported overseas."

Ford says it might sell Volvo

2008-12-01T11:02:00.001-05:00

From Automotive News:
By Amy Wilson

DETROIT -- Ford Motor Co. said today it will consider the sale of Volvo Car Corp. as it explores "strategic options" for the Swedish brand. Ford said it would review its options for Volvo because of the significant decline in the global auto market and severe worldwide economic instability. The company expects the review to take several months to complete.A possible sale of Volvo would help Ford strengthen its balance sheet, officials said. It is part of Ford's efforts to make sure it has enough resources to introduce an array of new products intended to turn around the automaker's financial fortunes."Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo," said Ford CEO Alan Mulally.

Auto Dealerships Teeter as Big Three Decline

2008-11-29T19:02:00.002-05:00

From the New York Times:

By CLIFFORD KRAUSS
Published: November 29, 2008
QUINCY, Fla. — Bruce Thomas washed cars at his father’s General Motors dealership here at age 12, changed oil in high school, and sold his first Pontiac during college.
His commitment to a famed American industry, part business and part romance, never waned. He took over his family’s two dealerships, building a small fortune. In turn, he showered generosity on local churches, school athletic teams, charity golf tournaments and a group that helps women find jobs out of prison.
But suddenly, all of Mr. Thomas’s success appears to be melting away.
Days go by without a sale. His debts are mounting. His friends offer him cash to get by. “I’m trying to survive as a car dealer,” said Mr. Thomas, now 59, “and I don’t know if I can.”
Top executives of the Big Three automakers are preparing to return to Washington this week with business plans they hope will lead to a federal bailout. But any government help will probably come too late for thousands of dealers like Mr. Thomas who sell American brands.
They have been struggling for years, as Detroit’s fortunes waned, but what remains of their sales is evaporating along with consumer confidence and credit.
The National Automobile Dealers Association predicts that roughly 900 of the nation’s 20,770 new-car dealers will go out of business this year, and automobile analysts say the number of failed dealerships could rise into the thousands next year.
Even if Ford, Chrysler and G.M. survive, many believe a comeuppance is inevitable among dealerships; indeed, for years the nation has had more dealers for domestic brands than warranted by the sales volume of the Detroit automakers.
The economic toll of a mass failure of dealerships around the country has already begun to harm the broader economy. In October alone, 20,000 employees of auto dealerships lost their jobs nationwide, more than half of those who were newly unemployed in the retail trade, according to the Labor Department.
The auto dealers association estimates that new-car dealers produce a $54 billion annual payroll for 1.1 million workers and nearly 20 percent of the retail sales and sales taxes in small and large communities alike.
The auto dealers are not just businesses, of course. Most of them are deeply rooted in their communities, and each is a slice of Americana — their big flags flying, their radio advertisements compelling attention and their Little League sponsorships and other charity helping to improve the lives of local people.
In this small town outside Tallahassee, Mr. Thomas had 50 employees only two years ago when his two dealerships sold an average of 24 new vehicles a month. But now Mr. Thomas is lucky if he sells three new vehicles a week, and he has had to dismiss 10 of his remaining 40 employees in recent days.
Salesmen at Mr. Thomas’s two dealerships — one selling Chrysler-Dodge-Jeep cars and the other General Motors models — are so idle, they spend their time doing Sudoku puzzles, reading sports magazines and calling and writing old clients. They repeatedly implore the mail carrier to buy a car on mornings when he is the only one to come in the door.
Calmly resolute, Mr. Thomas spends his days talking to lawyers and bankers, trying to keep his business alive. Mr. Thomas has lost a lot of money in an investment in a cousin’s Georgia dealership, but many of his problems appear to be not of his making.
The last couple of years of rising gasoline prices took the steam out of the market for his Dodge Ram 2500 heavy pickup trucks and GMC Yukon sport utilities. In recent months, gasoline prices came down, but unemployment began rising here. The weak economy has hurt farmers, government workers and others. Quincy’s middle class is hurting because of plummeting values for homes and stocks.
And now the credit market — the lifeblood of any car dealership — is frozen. Finance companies have tightened credit both for car buyers and for dealerships like Mr. Thomas’s that stock their showrooms with vehicles bought on credit. The car companies are delaying some payments to dealers because of their own problems.
Mr. Thomas has gotten behind in payments to GMAC, G.M.’s financing arm, so the company sent a representative to his dealerships two weeks ago to take control of the keys of new cars on his lots to guarantee that GMAC is paid when any vehicles are sold.
Mr. Thomas has stopped ordering new vehicles, and he is relentlessly cutting costs, including his own salary. He is slashing medical benefits and matching funds for the retirement accounts of his remaining employees. He has stopped giving free oil changes and tires to charities, stopped offering coffee to customers and even canceled janitorial services for the bathrooms.
Salesmen are passing out their résumés to visitors, and they say they are not sure they will get paid from one week to the next.
“You have to laugh to keep from crying these days,” Lynn Mayo, the office manager at the G.M. dealership, said as she wiped away tears. “The whole mess is hard.”
The downturn has been years in the making. Mr. Thomas’s total sales, including repairs and used cars, fell to $26 million in 2007 from $32 million in 2005. This year he hopes sales will reach $20 million based largely on stronger business during the first half. During the last two months, sales and repairs hit a wall.
It is a big comedown for a business that began with Mr. Thomas’s father, Howard, who came to Quincy after World War II to start a used-car business across the street from a Chevrolet dealer. Howard Thomas was so successful, the Chevrolet dealer bought him out and brought him into the new-car business as a manager.
In 1967 Howard Thomas bought half of the local Pontiac-GMC store, and 12 years later it became a Thomas family operation run by him and his son. The business expanded to two dealerships and became a major benefactor to the local Little League team, theater and other charities. More than 400 people attended Howard Thomas’s funeral in February. The business has long been the biggest retail employer in the town after Wal-Mart, and has produced $1 million in sales taxes annually in recent years.
Local officials say they know Mr. Thomas is in trouble, and they fear the consequences of his going out of business. “It would be a huge tragedy for us,” said Quincy’s mayor, Andy Gay, whose first job after getting married was selling cars at a Thomas dealership.
Mr. Thomas’s business is a microcosm for the whole industry. At least 70 percent of the dealerships that have closed so far this year sell American cars, and better than 60 percent of the remaining dealerships sell the troubled Detroit brands. “A lot of them will go out of business,” predicted Rex Henderson, an auto analyst at Raymond James & Associates.
“We have never seen anything like this,” said Denny Fitzpatrick, owner of a Chevrolet-Hummer dealership outside Oakland and chairman of the California New Car Dealers Association. Having already dismissed 56 of his 114 employees, Mr. Fitzpatrick added, “You lay awake at night trying to figure out how to keep these doors open.”
Car dealers are not entirely blameless for their fate. Auto analysts say they did not push Detroit hard enough to build better-quality, more efficient cars. They note that the dealers lobbied hard in state capitals for laws to protect their franchises from the Detroit manufacturers who wanted to limit their numbers and determine their locations.
Mr. Thomas lays some blame on the unions that drove hard bargains with the automakers, some on a news media that “glorified” imports, and some on the Big Three for being “slow to react to the market and what the public wanted,” especially when gas prices rose in recent years.
To compensate, Mr. Thomas said he had changed his inventory the last couple of years to include fewer trucks and sport utilities, adding more fuel-efficient vehicles like the Pontiac G6. He shifted his advertising away from newspapers to the Internet. He gradually reduced his business’ charitable giving, once $30,000 a year, to $1,900 this year.
He has begun a radio campaign offering zero percent financing on all his 2008 Chrysler, Dodge and Jeep vehicles for 36 months, and savings of up to $12,000 on Yukon XLs.
But sales have not budged.
Speaking in an office decorated with antique golf clubs, autographed baseballs and a photograph of his grandfather posing beside a 1952 Buick Roadmaster, Mr. Thomas said he had no major regrets.
“As a kid I dreamed about cars,” he said. “The business has changed and the cars have changed, and it’s been fun to be part of that.”
But he said he saw more trouble ahead.
“At this point, I see no light at the end of the tunnel,” he said, closing his eyes for a moment to think. “I only see it getting worse. Any bailout to Detroit will take a while to get to Main Street.”

Take car of that car

2008-11-28T17:19:00.000-05:00

By Craig Howie
AOL Autos
A little yellow warning light appeared on the dash of my minitruck restoration project over the summer.
As a good motorist, I took it to a local mechanic who advised me that it was nothing to worry about, that he had had a similar problem with a minitruck he once owned, and he drove it for three years with the warning light on until the bulb behind the light fused.
Great advice, I found, if you want your engine to blow a couple of weeks later (as I found to my great cost, too).
My advice: Don't ignore that warning light. A little warning light also should go off in your head if you detect strange smells emanating from your car, or hesitancy on acceleration, or the car pulling in one direction. All are symptomatic of a growing problem and should be investigated.
Quickly, you'll find that a little routine maintenance can keep you safe and free of more expensive repairs. Most require little more time than it takes to refill the windshield wiper fluid (and don't forget to do that regularly, either).
Here are some top tips to help keep the average motorist safe and, hopefully, trouble free:
Engine oil
Don't stray too far from the mantra of changing your engine oil every 3,000-5,000 miles. Change nearer the 3,000 mark if you pull weighty loads or drive in town or on frequently jammed freeways. The oil level should be checked every couple of weeks, or monthly at least.
When the engine is warm to the touch, check your oil by lifting the hood and finding the dipstick, which will likely be labeled "oil". Pull it out and wipe the bottom of it on a rag, then dip it back into its slot. Pull it out again and inspect the fluid level at the bottom of the stick. It should be at a level between the marker lines, nearer the "full" line is preferable.
If the oil looks dirty or black, take it to your mechanic to be changed, or do it yourself if you're handy. If the oil is clear but at a lowish level, top it off with more engine oil -- ask your dealership which brand it recommends -- though be aware that a very low oil level may indicate a leak.
Transmission
You can detect problems in your transmission if you are experiencing problems shifting gears. A quick check of the transmission fluid level -- similar to an oil check -- could detect if your fluid level is low, which could in turn indicate a leak.
When checking the transmission fluid, make sure your car is running and in "park." You may also wish to put some chocks behind the back wheels.
The trick for transmission fluid is that it should have a slight pinkish tint: Once you've dipped, wiped, dipped and re-examined the fluid level, sniff it to check that it doesn't smell burnt and check that it's not brackish-brown. If it's low, refill with a lubricant recommended for your car, using a funnel to avoid spillage.
Spots of the pink fluid on your street or garage floor usually indicate a leak, which can prove troublesome as the transmission is a closed system. Your mechanic should be able to pinpoint the problem for you.
Safety-wise, make sure you clean up any spilled lubricant immediately -- that sweet, pink liquid proves mighty tasty for household cats and dogs -- as, in my experience, vet bills can easily match a mechanic's.
Coolant
Coolant is the mixture of antifreeze and water used to dissipate heat and maintain temperature throughout an engine by utilizing the radiator. On older cars, check fluid levels by unscrewing the radiator cap, but never when your vehicle is hot. Wait for it to cool down first and also make sure your car is parked on a level surface.
Newer cars will have a sump or reservoir usually placed to the engine's right. If your coolant is at a satisfactory level as marked on the reservoir, and is clear rather than cloudy or brown, you're good to go.
Change your coolant and flush your radiator every two years or so, and make sure your radiator is free of corrosion.
Tires, spare tire and jack
Overinflation and underinflation of tires carry their own perils in terms of safety, tire wear and fuel efficiency. Check your tire pressure every couple of weeks with a handheld pressure tester you can buy at your local automotive mart, or take your vehicle to the "Air" pump at your service station.
Check your owner's manual for the recommended tire pressure and fill accordingly. If you're unsure how to do this, take somebody with you who knows how to do it, and you should be able to do it yourself from then on. Remember to inflate your spare tire, too (temporary spare tires usually have a 50- to 100-mile life expectancy).
A penny is often the simplest way to check tire tread: Stick a penny into a groove with old Abe's head pointing down. If the tread is lower than Lincoln's quiff, your tire level is unsafe. Check all four tires as the tread level may be uneven, which also indicates you have to rotate your tires more frequently.
You can do this yourself with a jack and a strong back, or your mechanic should be able to do this for $20 or so. They'll also be able to check the car's alignment and rebalance your wheels accordingly, which the home mechanic may find tricky.
Battery
Batteries last about three and a half years in general, though extreme weather can also affect lifespan. Keep your battery and its connecting cables free of corrosion by scrubbing them with a stiff wire brush and a mixture of baking soda and water (always making sure you catch the run-off in a tray or suchlike).
Make sure the battery is disconnected before beginning. If you're understandably squeamish about fussing with chemicals and a power source, a qualified professional can always do this for you. Cracks in the battery shell or suspicious bulges usually indicate you'll need a new battery. Replace it before you get stranded in an area you'd rather not be.
Brakes
Your car will tell you when your brakes need work through inimitable but never endearing whines, screeches, grinding and pulling, or a softness when you press the stopping pedal. A red light on your dash will probably be lit also.
You may need to check your brake fluid level, which you can do by checking the master cylinder and comparing the fluid level with the level indicated, and refilling accordingly with fluid recommended for your vehicle. You can also check the condition of your brake hoses; worn hoses will exacerbate other problems.
Others -- in fact, almost all -- will admit defeat and take the car to their mechanic. Early action usually avoids the need for a full brake system overhaul, which is expensive, and minimizes safety issues.
Emergency kit
So you didn't do any of the above and you're stranded -- hah! I'm just kidding: Even the most cautious motorists get let down by their steed.
Here's what your emergency safety kit should contain: Jumper cables, engine oil, de-icer fluid , flashlight , emergency flares, distress flag, first aid kit, pocket knife, water and snacks, blankets , gloves, scarf, hat, cell phone , ice scraper, shovel, tow chain or rope and a jack.
© 2008 AOL, LLC. All Rights Reserved.

Ford, with help from Volvo, tops safe car list

2008-11-25T10:21:00.000-05:00

From Associated Press, via Yahoo

By KEN THOMAS, Associated Press Writer

WASHINGTON – The insurance industry named dozens of new cars and trucks, led by Ford Motor Co. and its Volvo subsidiary, to its annual list of the safest vehicles Tuesday, helped by the increased use of anti-rollover technology.
Ford and Volvo had 16 vehicles in the 2009 model year on the Insurance Institute for Highway Safety's list of the safest new cars, followed by Honda Motor Co. with 13 vehicles.
Seventy-two cars, trucks and SUVs received the top safety pick designation for 2009, more than double the number of vehicles in the 2008 model year and three times the number in 2007.
"The sheer number of this year's winners indicates that automakers have made huge strides to improve crash protection," said Institute president Adrian Lund.
The selected vehicles are the best in protecting people in front, side and rear crash tests based on institute evaluations during the year. The vehicles are required to have electronic stability control, or ESC, to qualify for the award.
IIHS said electronic stability control is now standard equipment on virtually all new SUVs and three-quarters of passenger cars for the 2009 model year. ESC is standard on more than one-third of 2009 pickups.
Ford was led by the Ford Fusion and Mercury Milan midsize cars with optional ESC; the Ford F-150 pickup, Ford Edge and Ford Flex midsize sport utility vehicles; and the Ford Escape and Mercury Mariner small SUVs. The list also included the Mazda Tribute, which has the same underpinnings as the Escape and Mariner.
Ford CEO Alan Mulally argued last week in Washington that the automaker had made safety strides when he testified along with other Big Three executives seeking massive government aid.
"Every year, we're going to improve the quality, we're going to improve the fuel efficiency, we're going to improve the safety, and we're going to keep improving the productivity so we can offer the consumer the very best value," Mulally told a House committee.
Honda and its Acura unit had vehicles in nearly every category, including top-sellers such as the Honda Accord; the Honda Civic 4-door with optional ESC; and the Acura MDX and RDX midsize SUVs; and the Honda Fit with optional ESC. The Fit is the first mini-car to earn the safety award.
Volkswagen AG and its Audi brand had nine vehicles on the list, including the Volkswagen Jetta and Passat and the Audi A3, A4 and A6.
General Motors Corp. and Toyota Motor Corp. both had eight vehicles on the list. GM's included the Cadillac CTS and the Buick Enclave, Chevrolet Traverse, GMC Acadia and Saturn Outlook large SUVs.
Toyota's top performers were the Toyota Corolla with optional ESC, Toyota RAV4, Toyota Tacoma, Toyota Tundra and Scion xB.
Using the awards, consumers can compare vehicles without having to review results from multiple tests. Automakers pay close attention to the institute's findings and frequently note positive ratings in television commercials.
The institute has advocated for an early adoption of anti-rollover technology such as ESC ahead of a government requirement for the systems by the 2012 model year.
Electronic stability control senses when a driver may lose control and automatically applies brakes to individual wheels to keep the vehicle stable and avoid a rollover. It helps motorists avoid skidding across icy or slick roads or keep control when swerving to avoid an unexpected object in the road.
IIHS said Chrysler LLC was the only major automaker that did not receive a single award. They said Chrysler could have picked up five awards if the head restraints had been improved in the Dodge Avenger and Chrysler Sebring, the Sebring convertible and the Dodge Grand Caravan and Chrysler Town and Country.
Chrysler spokesman Cole Quinnell said he could not comment on whether the head restraints might be upgraded in the future. He said Chrysler vehicles are equipped with a variety of safety features and the institute's results "are just one of the sources of information about a vehicle's crash performance."
___
On the Net:
Insurance Institute for Highway Safety: http://www.iihs.org

GM, Tiger Woods part ways

2008-11-24T20:29:00.000-05:00

From New York Times:

By KATIE THOMAS
Published: November 24, 2008
General Motors and Tiger Woods are ending their longtime endorsement agreement one year early. The automaker is looking to cut costs and Woods plans to spend more time with his family, a General Motors spokesman said Monday.
Woods’s contract ran through the end of 2009, said Peter Ternes, G.M.’s director of communications for sales, service and marketing. “Tiger is expecting a second child in his family and he’s looking for more time in his schedule,” Ternes said. “At the same time, General Motors is looking to cut costs.”
Mark Steinberg, Woods’s agent, called the decision “very amicable and very mutual.” According to a statement on Woods’s Web site, Woods said, “I am very proud of the longstanding partnership I’ve had with G.M. and have enjoyed being a part of the company’s dramatic product evolution.”
The announcement ends a nearly decade-long relationship that sought to popularize the Buick brand among younger drivers and coincided with Woods’s growing dominance in golf. In 2000, his first year endorsing the Buick line, Woods became the youngest golfer to win all four major tournaments.
He appeared in numerous advertisements for the automaker, and the Buick logo was prominently displayed on his golf bag.
Ternes and Steinberg declined to say how much the endorsement deal was worth. But Bob Williams, the chief executive of Burns Entertainment and Sports Marketing, which tracks celebrity endorsements, estimated that the deal was worth about $7.5 million a year.
Ternes said the endorsement helped expand the car into an international brand, and added that Woods has said he will continue to drive some Buicks.
Steinberg said Woods had been impressed with the way Buick transformed its image, doing away with stodgier models and releasing more updated cars.
“We saw that it was going to work,” Steinberg said. “We saw what Buick wanted to do with their brand.”
G.M. has long been a major sponsor of sporting events and athletes, but has scaled back its spending on sports. It will not have a Super Bowl ad this year, and it has withdrawn its sponsorship of the Masters.
Ternes said General Motors had no plans to end its sponsorship of two PGA tournaments, the Buick Invitational and the Buick Open. Those contracts expire in 2010.

Nissan pulls out of Detroit, Chicago shows

2008-11-24T20:22:00.000-05:00

From Automotive News
DETROIT AUTO SHOW

Lindsay Chappell

Nissan North America has canceled plans to participate in the annual Detroit and Chicago auto shows, citing depressed economic conditions.The decision puts Nissan and Infiniti brands onto a growing list of automakers that are skipping out on the major Detroit international marketing event in 2009. Also withdrawing from the January show are Mitsubishi, Suzuki, Land Rover, Rolls-Royce and Ferrari.The Chicago auto show is scheduled for February.Both shows draw media attention to new products from all over the world, in addition to displaying the product line-ups to local consumers.Nissan corporate spokesman Alan Buddendeck said the decision reflects the current state of the industry and not the Detroit and Chicago shows themselves

Review: Dodge Charger R/T

2008-11-24T16:04:00.000-05:00

Dodge Charger R/T

By Karl W. Ritzler

There aren’t many places to pass when driving between Dahlonega and Ellijay. And when they come along, you have to be quick to use them.
Thank goodness for the spirits of the Dukes of Hazzard and their 1969 Dodge Charger, the General Lee.
The test car was the new Charger R/T (That’s Dodge-speak for Road and Track.), and you could practically hear Bo and Luke Duke whoop it up when it was time to stomp on the gas, fly by a rickety pickup and get back in the right lane before the arrival of the oncoming traffic.
The 5.7-liter, 340-horsepower V-8 Hemi under the hood didn’t hurt any, either.
The new Charger is distant cousin of the ’69 muscle car. Despite concessions to fuel-efficiency and pollution requirements, it’s a close as you can get to a good ol’ muscle car these days. Based on the popular Chrysler 300 platform, the Charger looks lower, faster and, well, more country.
It’s made the car show tours in General Lee orange. All it needs is that musical horn, and you can imagine fishtailing around the dirt roads of Hazzard County just ahead of Sheriff Coltrane and Boss Hogg.
The 2009 model is little changed from the ’08 test car.
There’s no mistaking the rumble of the Hemi. It’s the sound effects for the aggressive look to the car. The image is confident and strong – just what you’d expect for a muscle car.
Just remember that gas doesn’t cost 50 cents a gallon anymore. The Charger drinks it thirstily, 15 mpg in the city and 23 mpg on the highway. And the EPA doesn’t test for aggressive driving, jumping creeks or fleeing sheriffs.
A five-speed automatic transmission with Auto Stick is standard. The Charger is available in rear- or all-wheel drive. Expect to pay about $2,000 more for AWD.
Even in North Georgia, the test vehicle with the chrome word “Hemi” and Michigan tags was a ticket waiting to happen. Good thing the coast was clear when that burst of acceleration was needed.
You don’t need to divert your attention from the road to drive the Charger, either. The tachometer and speedometer are centered in front of the driver, with the compass direction, radio station and outside temperature conveniently displayed right below.
The controls are straightforward. The car doesn’t overflow with gimmicky convenience or technology goodies – you get what you need.
The seating in front is comfortable without being cushy. And the back seat is more than adequate for adults with more legroom than you find in some competitors. The low roofline, however, means headroom isn’t all that generous. There are audio plugs and climate controls in back and grab bars to help passengers get out.
Up front, the climate controls are easy to use, but the navigation screen is smaller than the ones found in many vehicles. Cupholders are just OK.
Luggage capacity is an acceptable 16.2 cubic feet, expandable by folding down the rear seats.
Base price for the ’09 is $31,860, up about $1,000 from the test car. For that, standard equipment includes leather-trimmed seats, four-wheel performance antilock brakes, traction and stability control, performance dual exhaust with chrome tips, power everything, heated front seats, and 18-inch aluminum wheels.
Options in the test vehicle were the red paint ($225); a package with upgraded audio system and illuminated cupholders ($2,100); a package with supplemental air bags and run-flat tires ($1,185); power sunroof ($950); navigation system ($890); high-intensity headlights ($695); and rear entertainment system ($1,595). With the $700 delivery charge, the test vehicle’s sticker totaled $39,095.

Buy this car if: You want a modern American muscle car.
Not for you if: You want to look and act like a grown-up.
Look at me factor: The face of a muscle car and the engine rumble to go with it.
Competitors: Ford Mustang, Ford Shelby GT500, Chevrolet Camaro, Pontiac G8
What others are saying:
“This one's a keeper. Please don't paint a Confederate flag on its roof.” – Car & Driver
“Dodge Charger R/T delivers grins and giggles in equal measure for enthusiasts who appreciate driving as well as the extra utility of its four-door sedan body style.” -- Edmunds.com
“The Charger is fun to drive and enjoyable for just cruising along.” – NewCarTestDrive.com

Maserati sounds off

2008-11-24T15:58:00.000-05:00

Maserati is trying a new approach to attracting attention.

Says the company: "According to a recent study by British-based luxury car insurer Hiscox, in which participants were asked to listen to the sound of a variety of cars, from exotics to economy models, the sound of a Maserati engine was shown to spark a biological response among women -- in fact, 100% of the women studied had shown higher testosterone levels after listening to the exhaust of a Maserati than any other car!"

The company even has a weblink which offers cell phone ringtone access to compete with all those annoying songs other folks have on their cellphones: http://stag.condenastdirect.com/gq/connects/lowdown_maserati.asp

Karl W. Ritzler

Los Angeles auto show

2008-11-20T23:42:00.000-05:00

From the New York Times:

ACROSS the United States, the inventory of unsold new vehicles accumulating at dealerships and on storage lots topped three million earlier this month. More cars and trucks arrive each week by the thousands in container ships, glutting the docks at the ports of Los Angeles and Long Beach, just 23 miles from the convention center here.
That bloated inventory — a record, said Mary Raetz, assistant managing editor for data services at Automotive News, an industry weekly — was no doubt on the minds of auto executives last week at previews of the Los Angeles auto show. Yet there were even more introductions of even more models here at the unofficial kickoff of the 2009 auto show season.

Full story: http://www.nytimes.com/2008/11/23/automobiles/autoshow/23SHOW.html?8dpc

Update: Congress delays bailout action

2008-11-20T15:11:00.000-05:00

From Automotive News:

THE AUTO INDUSTRY BAILOUT
Harry Stoffer

WASHINGTON -- Democratic leaders of Congress today rejected a proposed bipartisan compromise that would have provided $25 billion in emergency federal aid to the Detroit 3.Sens. Carl Levin and Debbie Stabenow, both Michigan Democrats, announced this afternoon that they were signing onto a Republican proposal to redirect $25 billion in loans aimed at helping automakers build more fuel-efficient vehicles. Instead, those funds would provide bridge loans to the Detroit 3 to help them address fiscal crises.But before a news conference announcing that compromise, House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and seven other Democratic leaders entered the room in which the event was to be held. They said they did not support the proposal.

Senate reaches compromise on auto industry bailout

2008-11-20T14:00:00.000-05:00

From Automotive News:

THE AUTO INDUSTRY BAILOUT
Compromise reached in Senate on auto bailout
David Barkholz and David Kushma

U.S. Sen. Carl Levin, D-Mich.
Key members of the U.S. Senate have reached a bipartisan deal to fund a rescue package for the Detroit 3, according to a spokesman for U.S. Sen. Carl Levin.It remains unclear whether the senators have enough votes or when the matter will be taken up. It's also unclear if Senate Majority Leader Harry Reid, D-Nev., has signed on to the compromise.A draft of the compromise was being worked on by Levin, D-Mich., and Sen. Christopher Bond, R-Mo., among others.Bond and Sen. George Voinovich, R-Ohio, with White House support, on Wednesday introduced legislation that would redirect $25 billion in loans to the auto industry as bridge loans to the Detroit 3 automakers.

Play it safe

2008-11-19T01:45:00.000-05:00

If you want the safest vehicle out there today, join the Army. An Abrams tank won’t tip over even if you’re fording a river, and it can take a hit from car as well as a missile.
But they get really lousy gas mileage – worse than a Hummer – they won’t fit in a parking space, and the driver can’t reach the drive-thru window at Starbucks.
Safety means tradeoffs. Generally, larger vehicles are safer than smaller ones. But large cars and trucks also tend to cost more and burn more gas than subcompacts.
So if a tank isn’t on your car-shopping list, try a large car or minivan to maximize safety, says Russ Rader, a spokesman for the Insurance Institute for Highway Safety, one of the agencies that runs crash tests.
“Typically, large cars and minivans are the cars that have the lowest death rates in real-world crashes,” he said. “They have the benefits of size and weight – which protects people in a crash – and are less likely to roll over than SUVs or pickup trucks.”
Of course, one of the best ways to survive and accident is not to get in one. That’s where traction and stability control systems can help. The insurance institute and the National Highway Safety Administration (NHTSA), the folks who give out the stars in crash tests, think so highly of the systems that they recommend electronic stability controls (ESC) be standard equipment in every car sold in America, saying it could save 10,000 lives a year.
On a curve or slippery road, it’s easy to lose control of a vehicle. With ESC, a computer matches your car’s path with where you intended to go by monitoring steering, throttle and brakes. When needed, it can apply the brakes to individual wheels and cut the engine power to avoid skids and rollovers -- and give the driver the ability to maneuver out of trouble.
While ESC now is found mostly on high-end vehicles, the most affordable and widely available options – and often standard equipment -- are antilock brakes and side air bags.
No matter how your vehicle is equipped, who you are and how you drive is just as important to safety.
Insurance statistics show young men, charged with testosterone and beer, are more likely to be involved in more and worse accidents than mature drivers with families, no matter what vehicle they are driving. In fact, data from the insurance institute show that despite being well-equipped for safety, large pickup trucks have higher-than-expected fatality rates. The reason? They tend to be driven by younger men.
And a driver yakking on a cell phone, not paying attention to the road, is more likely to be in an accident. That’s why several state and local governments have banned or restricted cell phone use by drivers.
There are things to look for in a vehicle that can give you a safety edge.
First is size – bigger is better. Big vehicles tend to be heavier, so they’ll take a hit better than a small car. “We can’t repeal the laws of physics,” says the insurance institute’s Rader.
But vehicles can get too big. Rollover accidents are especially dangerous for passengers, and vehicles with a high center of gravity, like pickups and sport utility vehicles, are more prone to tipping.
Big vehicles also tend to have big blind spots, especially to the rear. Increasingly common are rear cameras or sensors that detect if there is someone or something behind you. That’s especially helpful when you’re trying to back up in a crowded parking lot.
Another thing to look for is a car that can accelerate from zero to 60 mph in under 10 or 11 seconds, says Emunds.com, an auto-information Web site. We’re not talking sports car speed here, but it is enough to merge quickly in high-traffic areas.
Underinflated tires also contribute to a loss of control, but they aren’t always obvious even to those who look each time they get gas. Tire-pressure monitors will flash a dashboard warning light to indicate low pressure. Don’t ignore it; get air in that tire now.
If the worst should happen and you do get hit, advanced frontal air bags are better than the single-stage air bags that have been required for years. Advanced air bags instantly sense occupant size, seat position and crash severity to determine how powerfully to inflate. That can eliminate the problem in older cars, where the force of the air bags’ inflation sometimes was as dangerous as the crash.
Side curtain air bags add another level of head protection for rear-seat occupants, and side-impact air bags protect front-seat occupants in a side crash.
And, finally, consider an emergency crash notification system. General Motors’ OnStar is the most common, but other automakers have their own systems as well. The system can tell when you’ve been in a crash and contacts emergency assistance, even pinpointing your location. These systems also can be used to summon help for a flat tire, breakdown or even unlocking your car if you left the keys inside.
But even the simplest step – and one that the law requires – can do wonders. Buckle your seat belt. It might be a bumpy ride.

By Karl W. Ritzler
Originally posted on divinecaroline.com

New shoes for the car

2008-11-19T01:41:00.000-05:00

When the time comes to buy the car a new set of shoes, style doesn’t matter very much.
Instead of looking for something in just the right color or the perfect heel, when you buy tires, you are looking for something that will perform like a sleek pair of running shoes and have the strength of a solid pair of hiking boots.
But if style is important – if raised white letters or a racy red stripe are gotta-haves – look for them after you have chosen a tire with the right tread and size for your vehicle.
The National Highway Transportation Safety Administration points out that good, well-maintained tires improve vehicle handling, protect you from breakdowns and avoidable accidents, and improve fuel economy.
Just like your shoes, the most important determinant of comfort and safety is size. Buy tires that are the same size as the ones that came on the vehicle when it was new. Unless you have changed the wheel size, your car was designed to wear specific tires.
Check the tire placard, usually located inside the edge or post of the driver’s door, the glovebox door or trunk lid, or your owner’s manual.
The tire size is a combination of letters and numbers, like P215/65R15. The “P” means it’s for passenger vehicles, the next three digits are width in millimeters from sidewall to sidewall. (The larger the number, the wider the tire.) The number after the slash is the aspect ratio, or the relationship of the height to the width. (A number of 70 or smaller indicates a tire with a short sidewall best suited for sharp handling on dry pavement.) The “R” means radial, which almost all tires are these days. The last two digits are the rim diameter in inches, or how big around your wheels are.
The other numbers that may or may not be on the side show the tire’s load index, or how much weight each tire can carry, maximum speed rating and whether the tire is rated for mud and snow use.
Also pay attention to the tread. Good tread keeps your tires from slipping on wet roads. It’s easy to spot a bald tire, but it’s much safer to change them before you get to that spot. Generally speaking, you should replace your tires when there’s just 1/16th of an inch of tread left.
One way to check is look for the tires’ tread-wear indicators. They are raised sections of rubber spaced in the grooves of the tread. When you see what looks like a stripe across the width of the tire, even with the outside of the tread, it’s time to change the tire.
Another way to check is with a penny. Hold the penny with Lincoln’s head upside down in the groove. If you can see the top of Lincoln’s head, it’s time for new tires.
And don’t be cheap. It’s usually best to replace all four tires at once. They all probably started wearing at once, and if you’ve taken good care of them, they probably are wearing down at the same rate. With a new set, you can be sure all your tires are the same quality and condition.
However, if the budget is too tight or you are replacing a newer tire that has gone flat, at least replace two tires. Have the tire store or garage put the new ones where they’re needed most – in front. Because you steer with the front wheels, they usually get the most wear. In addition, front-wheel-drive vehicles add all the force of traction up front. Take the two best remaining tires and put them on the back. And start saving now for replacing those tires. You’ll need to do it sooner then you think.
You can stretch the use you get out of a set of tires by practicing good tire maintenance.
The single most important thing you can do is keep your tires properly inflated. NHTSA says underinflated tires and overloaded vehicles are the primary causes of tire failure. That can mean more trouble than just a flat. A blowout at street speed can cause an accident or sent your vehicle into a roll.
You can find the information for both the correct inflation pressure and maximum load on the placard or in your owner’s manual. The tire pressure number printed on the side of the tire is NOT the one you should use. That’s the maximum pressure the tire can take. Pressure is measured in sounds per square inch, or psi.
Load is the lesser worry. Unless you regularly haul a trunkload of stones or pull a heavy trailer, you are most likely well within the load limits.
Inflation, however, is something you need to check regularly. Buy an inexpensive tire gauge at an auto parts or discount store and keep it in the car.
NHTSA says all tires can lose air over time, and with radial tires, it’s impossible to tell if the tire is underinflated just by looking at it.
Check your tires at least once a month, after the car has been sitting for at least three hours. When you drive, the friction between the tire and the road heats up the air inside, giving you a false, higher pressure reading.
Check the pressure with your gauge at the valve stem, the little nozzle toward the inside of the tire. Unscrew the cap and put the head of the gauge over the nozzle until you hear a short “pfft” sound. The gauge will show you how much pressure is in the tire.
If there’s too much, let a little air out of the tire with the help of your gauge. There’s usually a small knob on the head. Press it down on the small pin in the center of the nozzle. That releases some air. Recheck the pressure with your gauge.
Underinflation is more common than overinflation. If the tire doesn’t have enough pressure, go to the air pump at a nearby service station and add air.
Put the head of the pump on your capless nozzle and push until you hear a “pfft.” Many pumps automatically start pumping, while others may have a handle you have to squeeze. Check you pressure again with your gauge until the tire is about 1 psi over the recommended amount. (Remember, warm tires show higher pressure, and you had to drive to the service station.) Check the tires again when they are cold to see if you need to add more air.
While watching your tires’ pressure is important, it’s not the only care your tires need.
They also need to be rotated to maintain even wear. This is something best left to your service garage or tire store.
Check your owner’s manual for how frequently they should be rotated and the pattern of rotation. Usually, tires should be rotated about every 5,000 miles.
You also need to be sure your tires are properly aligned and balanced. Usually, this is checked when you take the car in for its periodic checkups, but if you feel vibration of shaking, get it in for an alignment and balance check.
Balancing wheels involves taking them off the car and placing them on a balancing wheel. If they are out of balance, a small lead weight is snapped on the rim to offset the heavy spot.
Alignment requires special machinery that can check the angle of the wheels on the vehicle’s frame and adjust it if it’s out of whack.
It usually takes some event to knock a wheel out of balance or alignment. Losing a lead weight will unbalance a wheel, and something as simple as driving hard over a curb or hitting a pothole can affect alignment.
If you do get a flat tire, it might be possible to repair it.
A hole in the tread from a nail, for example, can be plugged and patched. That involves taking the tire off the rim, inserting a plug in the hole and patching it on the inside.
If you get a hole in the sidewall, however, it’s time for a new tire. And remember, all tires wear down over time, so replace them in pairs. You wouldn’t wear one new shoe with one that’s been in your closet for a couple of seasons.

By Karl W. Ritzler
Originally posted on divinecaroline.com