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Archive for November, 2008

The new look of the American auto industry?

November 30th, 2008
Coming to America!

Alfa Romeo: Coming to America!

Of the 15.5 million vehicles built in America in 2007, foreign manufacturers built 6 million. That’s a number primed to grow as the U.S. automakers struggle and foreign companies see value in increasing operations here.

Cars will always be built in America, even if our homegrown Big 3 go belly up.

Even Alfa Romeo, who withdrew from the U.S. market in 1995, is coming back with new models and could possibly move production here in 2011 or 2012.

Honda has built cars in the U.S. for years, with a major operation in Ohio and another being built in Indiana. Last year 1 million Hondas were built in America and the Indiana plant will add capacity to build 200,000 more. Honda is also considering moving production of the Fit stateside, as Honda is looking for ways to keep up with demand. Honda’s overall sales were down 28% in October of this year, but sales of the Fit rose by that same percentage.

Toyota has a similar philosophy, having recently opened a new plant in Texas, and is building another in Mississippi to handle the production of Highlanders and Prius hybrids. In 2007, Toyota built 1.3 million cars in America.

BMW produced 150,000 vehicles in America last year and is investing to bring their capacity up to 240,000. Production of their X3 will move from Europe to South Carolina. Nissan is building a new plant in Mississippi, Kia is building a new plant in Georgia and Hyundai recently completed a plant in Alabama. Volkswagen will build a U.S. production plant in Tennessee, where they intend to build a car designed for the U.S. market.

All of these new plants are paying decent wages and have real advantages over Detroit, with younger workers and much lower benefit costs.

There’s a lot to be excited about in America’s future of auto production, even if that future is void of GM and Chrysler.

If automotive jobs are still in America, what are your thoughts on foreign companies providing those jobs?

-tgriffith

Car Industry News, Car Minded, Domestic Cars, Exotic Cars, Foreign Cars, General Chat

Here are the cars the U.S. should’ve been building for years!

November 28th, 2008

Ford, GM and Chrysler have been getting a lot of bad press lately. While much of it is deserved, there are some high points coming out of Detroit that we should all be thankful for. Here are some of the best cars coming out of America right now.

Ford Fusion


Not since the Taurus was introduced has Ford had a real turning point in the midsize sedan segment. With the Fusion, Ford offers plenty of legroom, pleasant driving dynamics and a unique exterior that actually makes a statement. And get this: The Fusion is priced lower than other class leaders, with prices starting under $20,000. Just the kind of car a struggling automaker needs!

Ford Fiesta


While it won’t be introduced in the States until 2010 or 2011, this is Ford’s evolution into the global market. The compact Fiesta brings big-car features to the small-car segment, offering a stronger, safer, more fun to drive small car than an American company has ever produced. Question is, is this car coming too late for Ford? This car could be the game changer!

Chevy Malibu


Honda perfected the efficient and reliable sedan in the 1980s. It took GM until the early 2000s. Well, 20 years late is better than nothing. With the new Malibu, fuel efficiency, performance, and a long list of standard amenities come wrapped in a design that GM says carries the new face of Chevrolet. It features a precise build quality and refined driving dynamics, along with a standard 169-horsepower, 2.4-liter four-cylinder engine that delivers 30 mpg on the highway. If this car had arrived 10 years earlier to the party, maybe GM wouldn’t be on the verge of collapse today.

Saturn Outlook


In GM’s history of building overly truckish SUVs, the Saturn Outlook is proof that someone in GM corporate finally caught wind that buyers weren’t looking for that anymore. The Outlook is the result of a valiant effort to package eight-passenger seating, real cargo capacity, and a pleasant driving experience into the skin of one hot SUV.

Cadillac CTS


I won’t try to top what Motor Trend said about this car: “If you were one of those who wrote off General Motors as a dying dinosaur — after all, it’s been a decade since any GM car took home the Golden Calipers (the Chevrolet Corvette won back in 1998) — prepare to rewrite everything you think you know about what’s in the General’s store. With this bold, savvy, uncompromising showpiece of a sedan — the all-new Cadillac CTS — GM has leapt straight from the rabble’s side of the velvet rope into that coveted, highly selective inner sanctum marked ‘World’s Finest Cars.’ For that remarkable achievement, and for making us grin like lottery winners every time we drove it, the CTS is our enthusiastic choice for Motor Trend’s 2008 Car of the Year.”

Is this list missing your favorite American-made car?

-tgriffith

Find Used Cars in Your Area at CarGurus

Car Industry News, Car Minded, Domestic Cars, General Chat

What bankruptcy would mean for automakers

November 26th, 2008

Bankruptcy is a very scary word. For many of us, it conjures up images of financial devastation and companies going out of business for good.

So when we talk about bankruptcy and the three biggest auto companies in America, we become afraid that if they file for bankruptcy they will disappear forever. That is just not the case.

The fact is, GM and Chrysler are already bankrupt. They are out of money, all that’s missing is the formal filing.

If any of the Big 3 were to file for bankruptcy, they’d file for chapter 11. Cases filed under chapter 11 of the bankruptcy code are sometimes referred to as “reorganization bankruptcies” because it lets the company stay in business while changing the way they operate. A judge decides how and when debts are repaid.  

Reorganization is what the Big 3 need, along with getting out of their current financial obligations such as labor costs, executive salaries, union workers benefits, dealer agreements, etc. Right now, it’s those union agreements that are resulting in a financial loss for every car sold. Logically that can’t continue. 

A financial bailout would provide money to the automakers to continue business as usual, but provide little incentive to actually restructure. Chapter 11 bankruptcy would be like wiping the slate clean and starting over, continuing business while reorganizing. 

For consumers, warranties would stay in effect and dealers would continue selling and servicing cars.

Of course there are consequences to filing for bankruptcy, one of which is consumer confidence. Given the choice of a bankrupt auto maker and a financially sound one, the decision may not take people long. 

Considering though that GM and Chrysler are already out of money and in desperate need of cash, are you in favor of bankruptcy or bailout for the automakers? 

-tgriffith

Car Industry News, Car Minded, Domestic Cars, General Chat

Forget the government, let Big Oil bail out the auto industry!

November 24th, 2008

 

There's big money in Big Oil

There's big money in Big Oil

I’ve got to give my wife a lot of credit, since last night she had an idea that could save the auto industry. 

We were reading an article in the paper about the record profits Big Oil is hauling in… $44 billion in the last quarter. That translates to $176 billion in profits over a year. That’s PROFITS, not revenue. How much is the auto industry asking for? A measly $25 to $50 billion? I’m sure you see where my wife went with this. 

Let’s let Big Oil bail out the Big 3. 

It makes so much sense! The oil companies wouldn’t be living the good life if it weren’t for regular citizens like you and me buying and driving cars. The oil and auto industries rely heavily on one another, and Big Oil is sitting on the cash it could loan to the Big 3. 

Of course, Big Oil may not have the vested interest in forcing automakers to adhere to strict fuel economy standards, but they do have the money and the influence to demand competitiveness while saving U.S. taxpayers from footing the bailout bill. 

Imagine the scenario: Big Oil foots the bill and bails out the Big 3. Now they have a substantial financial interest in whether or not the automakers survive. If they do, Big Oil gets their loans paid back and earns even more profit. If the Big 3 still go under, Big Oil doesn’t get their money back.

And that’s not a group that likes to let profits slip away and would do whatever they must to ensure they get paid and the automakers succeed. 

What do you think of Big Oil bailing out the Big 3 instead of the government? 

-tgriffith

Car Industry News, Car Minded, Domestic Cars, Gas for your car..., General Chat

Consumers gravitate to used cars during these tough times.

November 24th, 2008

CarGurus survey reveals a greater percentage (54%) of respondents plan to purchase a used car versus a new car (46%) for their next car purchase.

CAMBRIDGE, Mass., Nov. 24 – CarGurus® (http://www.cargurus.com/), a leading online automotive community, today announced the results of its latest survey of more than 2,500 online automotive consumers worldwide. Fifty-four percent of respondents said they plan to buy a used or pre-owned car for their next car purchase. Only 46% said they plan to buy a new car. Given the tough times and lack of consumer credit, shoppers appear to be turning to the less expensive option of a used car.

Finding Value in Used Cars
“I was surprised to see that a higher percentage of consumers intend to buy a used instead of a new car. However, given the tough economic times, it’s reasonable to see that consumers are looking for value,” remarked Langley Steinert, CEO/co-founder of CarGurus. “Instead of buying a new 2008 model, consumers can save substantial money buying a used, low-mileage 2006 or 2007. Dealers and manufacturers should take note of this trend and perhaps turn more of their attention towards marketing their used-car inventories.”

Survey Results
Across the CarGurus Network, respondents answered the question:

For your next car purchase, which will you buy?
(Total Votes = 2,500)
New Car   46%
Used Car   44%
Certified Pre-Owned Car   10%

About CarGurus LLC
Located in Harvard Square, Cambridge, MA, CarGurus LLC is a leading online automotive community founded by Langley Steinert and Nick Shanny, formerly co-founders of TripAdvisor LLC, the 3rd largest online travel site in the world. CarGurus’ founders, board, and investors bring a wealth of experience from such leading web companies as TripAdvisor, eBay, Expedia, and Yahoo. For more information about CarGurus, visit us at www.cargurus.com.

CONTACT: Steve Halloran, Editor, CarGurus LLC
617-354-0068, x12
press@cargurus.com

Car Industry News, Car Minded

Can we declare the end of the gas crisis?

November 24th, 2008

The indicator of a gas crisis

Over the past year, I’ve been able to gauge how bad the gas crisis is by looking in my dad’s driveway.

Dad has a 2001 Chevy Suburban 2500 with the 8.1L V8 engine that he bought to lug around his 10,000 pound mobile espresso trailer. The Suburban is beautiful and decked out with all the luxuries…truly a joy to drive.

Except when the cost of that joy translates into a $150 hit at the pump.

Ideally my dad would drive this rig on all his daily trips, regardless of the 9 MPG he achieves. He’d love to take it to Costco, to go buy a Sunday newspaper, to take my kids out to dinner, whatever. Instead the gleaming white chariot sat in his driveway as gas crossed the $4 per gallon mark. He drove my mom’s 2000 Honda CR-V for such trips instead, saving a bundle in gas. The Suburban turned into an essential-business-use-only truck.

And then the price of gas dropped.

A couple of nights ago my parents picked up the kids to take them out to see a local stage production of Peter Pan. Dad’s car of choice? Here’s a hint: Gas now costs $1.84 per gallon.

Looking out my window and seeing his Suburban turn into my driveway was one of those ‘ah-ha’ moments as I realized that this must be the true indication that the gas crisis has ended.

It’s probably happening all over the country too, as thirsty V8s are being fired up again and people are excitedly hopping back into their SUVs.

The question is: Can gas prices stay down if we fall back into old habits?

-tgriffith

Car Minded, Domestic Cars, Gas for your car..., General Chat

One place where GM’s business is cruising

November 21st, 2008
The U.S. Lacrosse

The U.S. Lacrosse

Buick is making a comeback, and is one of the best sellers among middle-class families looking for a little luxury.
Don’t believe me? You must not live in China.
 
Yup, the best selling foreign automaker in China is Buick. In fact, GM sold more than twice the number of Buicks in China than in the U.S. in 2007.
Buick’s product line in China is different from their U.S. offerings though they use some of the same names: Enclave, Park Avenue and Lacrosse. In China they also offer a smaller model called Excelle and a minivan called the GL8. The Park Avenue is actually a version of the Holden Statesman and the Lacrosse just looks so much cooler in Chinese dress than in American. 

The Chinese Lacrosse

The Chinese Lacrosse

It’s those differences that have spurred chatter online about why GM doesn’t offer some of the Chinese models in the states, or why the American Lacrosse isn’t as sleek as the Chinese version.

It all comes down to market differences, or at least perceived market differences by GM. The Chinese auto market really isn’t that different from ours, with consumers demanding semi-luxurious youthful cars that are fuel efficient and well built for a good price. Pretty simple really, and it seems GM got it right in China while their business decisions in America have led to a near collapse.

Perhaps it’s time for the U.S. automakers to take a long hard look at China and apply some of their strategies at home. Or how about this possible outcome: GM stays in business, but builds the majority of their cars in China and exports them to the U.S. Why not? Chevy’s U.S Equinox has an engine built in…China.

Would you buy a GM vehicle that wasn’t made in America

-tgriffith

Car Industry News, Domestic Cars, Foreign Cars

2009: The year GM dies?

November 19th, 2008
Is it too late to save the Big 3?

Is it too late to save the Big 3?

Can we even call them the Big 3 anymore?

There’s news today that the massive automotive bailout plan is heading for defeat. Even if it passed, I doubt it would guarantee the long-term survival of the former automotive giants.

Here’s why: The finances of Ford, GM and Chrysler are being sucked dry by the labor unions and retirees. Current management of these companies have made poor strategic decisions leading, at least partially, to the mess they now find themselves in.

A financial bailout is nothing more than a band-aid and is useless unless it’s a bailout that addresses the above issues. As a car junkie and an American patriot, it’s hard for me to believe I’m even writing this, but I believe at least one of these 3 will cease to exist within the next year.

The options for success just aren’t there, as a financial bailout is becoming unlikely and bankruptcy… well, who’s going to buy a car from a bankrupt automaker?

We’re at the brink of automotive history. We can read what automotive bloggers have to say about the situation and argue about whether or not we should try to prevent collapse, but it’s already happening.

One way or another, major change is on the horizon, and all we can do now is band together and make the best out of whatever change brings us.

Comment here: How would the collapse of at least one of the Big 3 affect you?

-tgriffith

Car Industry News, Car Minded, Domestic Cars

The ripple of an auto industry meltdown?

November 18th, 2008

This YouTube video is causing a stir in the auto world.

It seems like the PR departments of the Big 3 have been hard at work, creating a video that gives disturbing facts set against urgent, haunting music to create an atmosphere of fear; all in an attempt to gather support for a government bailout.

And I’m not buying it.

Look, the bottom line is this: The U.S. auto industry needs to change. It needs a complete restructuring if not a total rebuild. Loaning them money so they can continue business now will not help them down the road.

Plus, even if they do get bailed out, will Americans buy their products knowing the shaky ground they stand on? Then there’s the news that Chrysler is doling out $30 million in executive bonuses as they lobby for a government bailout. Americans are smart and won’t support that kind of business behavior.

Yes, a collapse will result in a lot of lost jobs; I won’t argue that. It’ll hurt the already hurting economy.

A collapse of the U.S. automakers won’t completely kill off the entire auto industry, though. Car parts will still be needed for auto maintenance. Americans will still buy new cars (many made in America by foreign-owned companies), and they’ll still need to be serviced. New companies may sprout up and build domestic autos. Old companies may be reborn.

It wouldn’t be the dramatic apocalypse people make it out to be. It would eventually give birth to a vibrant and strong auto industry the U.S. could be proud of.

But a collapse would certainly change things, dramatically and immediately. And if there’s anything people in this country fear more than anything, it’s change.

Does this video influence your thoughts on the auto industry?

-tgriffith

 

Car Industry News, Domestic Cars, Foreign Cars, General Chat

2009 Ford F-150 vs Ram 1500

November 17th, 2008

Both the F-150 and Ram 1500 are being introduced for 2009 with major overhauls, and both Ford and Dodge are airing TV commercials saying they have the tougher truck.

The market for these trucks has been cut in half during the last 4 years, with nearly 3 million pickups selling in 2004 and a projected 1.6 million this year. Which pickup is truly the toughest and most deserving of your cash?

I’m going to get to the bottom of this and tell you.

First, the 2009 Ford F-150:

The 2009 F-150 borrows it’s looks from last year’s Super Duty truck and creates one massive and intimidating front end, with a body to match. It’s offered in a near-endless array of trims with prices beginning around $20K and sailing all the way across the $40K barrier. The big news here is that all trim levels have a base 4.6L V8 engine. No more V6’s for the ol’ F-150!

Step up to the 5.4 V8 though and get slightly better fuel economy, to the tune of 15/20. Not bad for a mighty truck!

Innovation in the F-150 includes a trailer towing package that monitors your trailer and adjusts itself if it senses sway, giving you a level of trailer control never seen before. Speaking of trailers: the F-150 can tow up to 11,300 pounds and offers a payload capacity of 3,030 pounds.

Ride quality though is where the tradeoffs may come, as Ford continues to rely on the traditional rear leaf spring system. Why not though, since no self-respecting truck company would ever build a truck with sissy coil springs. Right?

Enter the 2009 Dodge Ram 1500:

It’s true; they broke the cardinal rule of truck-dom and are using coil springs on the rear. Albeit massive coil springs, but still…

Well not to worry! Dodge took a risk and it looks like everything’s going to work out just fine, though at the cost of not matching Ford’s tow numbers. 

Ram is offered with a 3.7L V6, probably for under $20K. Prices and trim levels of course multiply from there, ending upwards of $40K for the top of the line version. Dodge’s 390 horsepower 5.7L V8 Hemi will tow a max of 9,100 pounds and achieve gas mileage of 13/18.

But those coil springs will provide a ride quality never before felt in a pickup.

So which truck should you buy? Well OK, I’ll let you tell me:

Better MPG and higher tow rating of the F-150, or a smoother ride and decent tow capacity with the Ram 1500?

 -tgriffith

Car Review, Domestic Cars, Trucks & SUVs