How important are auto shows to the industry?

Are auto shows necessary?

With the LA Auto Show set to begin this week, and Detroit’s North American International Auto Show beginning in January, this is a prime time to gauge the health of automakers around the world.

It’s no secret that the U.S. companies are facing their lowest sales numbers in a quarter-century, and their presence at these shows is a potent indicator of that.

Check this out: GM cancelled all vehicle unveilings at the LA show, in addition to canceling all planned news conferences. Chrysler is forcing local dealers to pay for the company’s exhibition space, won’t debut any new vehicles and has cancelled all news conferences.

Ford meanwhile has no plans to cut back, and will debut the 2010 Mustang complete with an extravagant party. They will also debut 5 other models including 2 new hybrids. It would appear, based on this information alone, that Ford is the strongest of the Big 3.

For the Detroit show, GM has announced that it has cancelled their traditional pre-show kickoff media party. Chrysler is considering cutting back or eliminating their legendary Detroit Firehouse party. Even foreign companies Ferrari, Rolls Royce, Land Rover and Suzuki have pulled out of the Detroit Show completely. Volkswagen cancelled their press conference and concept car debut for the LA show and rescheduled for Detroit.

The auto show industry is known for extreme extravagance, so I say all this with one question in mind:

Are auto shows a necessity for automakers or an expendable marketing luxury?

-tgriffith

 

 

 

What will Obama mean to the auto industry?

Will he bring relief to the Big 3?

Will he bring relief to the Big 3?

I’ve written in this blog that I don’t believe the U.S. auto industry should be bailed out by the federal government. I’m a believer that people and companies need to suffer or be rewarded the appropriate consequences of their actions.

I can see the point, though, that a failed auto industry would wreak havoc on other businesses and cost the country thousands of jobs. That’s certainly not a good outcome, and it’s why the government is considering a bailout.

President-elect Obama addressed the issue briefly in his first news conference, saying, “The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil. I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted.”

That’s an eloquent way of saying he wants to fund a bailout. Obama appears in strong support of a proposed $50 billion bailout package, with $25 billion in direct loans and another $25 billion to come later, intended to help fund a United Auto Workers retiree health care trust.

I’m absolutely thrilled that Obama won the election and am proud to live in an America with him at the helm. I’m also a huge supporter of the auto industry and am a true car-nut. Yet I can’t bring myself to support the bail out of companies that have made poor choices.

Under Obama, the U.S. automakers will likely receive the help they need and avoid bankruptcy. If, that is, they can hold on until President Bush hands over the presidential reins.

My opinion, though, is that Ford, GM, and Chrysler would be better off – and we’d see better vehicles and stronger companies in the future – if they were forced to reorganize themselves under bankruptcy.

Do you agree?    

-tgriffith

 

Will Hyundai save Chrysler and American jobs?

Hyundai could keep jobs in America

Hyundai could help save American jobs

We’re living in a global economy.

While the U.S. auto industry supplies millions of people with jobs, the truth is that industry is collapsing. All 3 major U.S. automakers are on the brink of financial disaster with their only hope being a federal bailout.

But for Chrysler, there’s hope from Hyundai.

With talks of the grand GM/Chrysler merger now out the window, Hyundai, that little carmaker from South Korea, is poised to sweep in and buy out Chrysler. Or at least part of it.

Just a couple of years ago the idea of Hyundai taking over Chrysler would have been laughable. Now though, it just might make sense.

Had GM succeeded in their bid to takeover Chrysler, it might have worked to keep the company name around but I doubt it would have saved any jobs. A GM that consists of Chevy, Pontiac, Cadillac, GMC, Saab, Buick, Hummer and Saturn can’t even hold on, so adding Chrysler, Dodge and Jeep would only add redundancy and ultimately lead to massive layoffs. Just like a bankruptcy would.

The Hyundai scenario is a little different, because of the redundancy issue. It’s highly unlikely that the Chrysler of today will remain intact because there are pieces of it that will appeal to other automakers. If Hyundai doesn’t absorb all of Chrysler, it could buy Jeep. Nissan has mentioned buying Dodge. 

Under a scenario like this, jobs could stay in America though they’d be managed from an office in Asia. And the Chrysler as we know it would be gone.

Cerberus Financial, the current owner of Chrysler, has said they are not interested in selling pieces of the company. But if they are at all interested in saving American jobs, I think they’ll have to.

I ask you: Are you more concerned with saving Chrysler, or with saving American jobs?

 -tgriffith

 

What will Tata Motors do with Jaguar?

Expect great things from Jaguar under Tata

Expect great things from Jaguar under Tata

 

It’s been a while since we’ve last heard from the new owners of Jaguar. The luxury automaker struggled while under Ford ownership, and new owner Tata Motors has been pretty quiet about their plans for the storied brand.

That has caused some fear in Jaguar loyalists as they wonder how in the world the same company that builds the world’s cheapest car can possibly succeed in doing justice to the elegance of the once-British car company.

Ford really didn’t do any favors to Jag though, attempting to bring the essence of Jaguar luxury to the masses. The result: An entry-level sedan that failed miserably and a mid-size sedan that has ended up on more than one list of ugly cars.

There was even talk at Ford of building a Jaguar SUV.

Tata Motors doesn’t have any experience building luxury automobiles, but I won’t let that stop me from believing they are going to be the savior Jaguar fans have been hoping for.

First of all, Tata plans on moving Jag back up market by deciding against an entry-level sub $40K vehicle. They’ve also firmly backed away from creating an SUV, a move that makes sense considering they also own the SUV king: Land Rover.

Here’s what to watch for in the coming years from the new Jaguar: 

         New V8 engines in early 2009

         A Supercharged XF-R in mid 2009

         A redesigned XJ in 2010 (look for XF design cues)

         In 2011, 2012 and beyond, watch for a possible XF coupe and a smaller roadster to compete with the Porsche Boxster and BMW X4   

I think these are exciting times for Jaguar. I predict that we’ll see Jags that are truly luxurious with the performance to match. Tata Motors is a company with a lot to prove, and I’m willing to bet that they won’t let us down.

What do you think: Will Jaguar return to glory under Tata? 

-tgriffith

A reader responds

The U.S. really can't complain about fuel prices

The U.S. really can't complain

I want to respond to a comment left about a recent blog.

In that blog, I said that since U.S. gas prices are going down so much, I’m second-guessing my commitment to breaking our addiction to oil. Here’s the comment I want to address:

“Feel lucky that you are not paying the prices around Britain, as you wouldn’t be able to run your car. Based on your 11 gallon car, you would have to pay approx $71 at the current price of fuel over here to fill your car. Maybe you shouldn’t complain so much about the price of fuel as you have it a lot better than most other western countries around the world, and we are all struggling too.”

OK, point taken. I understand that fuel prices in Britain are MUCH higher than in the U.S., even when U.S. prices were near $5 per gallon. We’ve been spoiled on this side of the Atlantic for years, and I’m sure those in Britian and across Europe were thrilled to watch us go into panic mode as our prices skyrocketed. Now that our prices are headed south again, I’d imagine there’s a little jealousy that their prices remain high.

To the person who wrote the comment, and to everyone in Europe: Yes, our fuel prices are lower than yours. But at least your prices have fueled a stable and even enviable auto industry, while our prices have led to the likely demise of ours. You have Porsche, Audi, Mercedes, BMW, Ferrari… should I keep going? We have Chrysler.

What do you have to say about that?

-tgriffith

Why we shouldn’t feel bad for U.S. automakers

The Associated Press yesterday released a story about U.S. automakers facing disaster after 30 years of ‘denial.’

The quick point of the story: Honda and Toyota slowly eroded market share of efficient, reliable cars since the early 1980s. In the 1990s, gas was cheap and Ford, GM and Chrysler were making a killing selling high-profit trucks and SUVs, never stopping to consider what would happen should gas prices rise.

Plus, because of union agreements, labor costs were outrageous and there was no way to make a profit selling small cars. The small car market was ceded to the Japanese, then the Koreans, but life was still great because of America’s love affair with trucks.

Then the economy collapsed and gas prices skyrocketed. Now the U.S. automakers face near certain bankruptcy and executives are whining about how the government won’t help them. 

But why should they be bailed out? They all made the choice to follow the money and ignore the possibility of fuel prices catching up with the rest of the world. The consequences of that greed are now becoming evident.

I don’t argue that a strong automotive sector isn’t important to a vibrant domestic economy. I just believe that the industry needs to suffer it’s consequences then find a way to rebuild; without the help of the U.S. government.

Even a recent Cargurus.com survey of over 8,000 auto enthusiasts found that a majority of them are against a federal bailout of the auto industry.

The price of denial can be high… and this case could even lead to bankruptcy.

What do you think? Did U.S. automakers cause the mess they’re in?  

-tgriffith

 

The $20 fill up that changes everything

How low will they go?

Something incredible is happening.

Not long ago, in this very space, I said: “Americans could very easily get used to 3 dollar gas.” Well. Silly me. I would have never guessed that within a month I’d see 2 dollar gas!

I live in a state with relatively high gas taxes, and my local station is selling regular unleaded for about $2.25. That’s incredible, considering last summer that same station was selling fuel for $4.25. I could very easily spend my time here delving into the reasons for such a dramatic drop, but that’s not nearly as exciting as thinking about the consequences of the price drop.

The little Suzuki I drive has an 11 gallon gas tank and was costing just over $40 to fill up, which for such a small car was quickly becoming infuriating. I was ready to trade it in for a Vespa and seriously adjust my driving habits even with that. I was prepared to do whatever I had to so America could cut it’s use of foreign oil and usher in the era of hydrogen to power the next generation of cars.

Then I watched prices on the digital sign at my local gas station plummet, and I filled up Friday night for just over $20. It’s the 20 dollar fill up that is changing my outlook on our country’s gas situation.

Now I’m considering trading in my Suzuki again… only this time a Tundra sounds kind of attractive. Or maybe the practicality of a Pilot. Heck, if I can fill one of those up for 40 or 50 bucks, I’ll be one happy consumer of oil; wherever in the world it comes from.    

How low will prices go before they are no longer an issue?

-tgriffith

What does the SEMA Show tell us about the auto industry?

2007 Lamborghini Murciélago LP640

2007 Lamborghini Murciélago LP640

 

The SEMA auto show ends November 7 in Las Vegas.

SEMA, the Specialty Equipment Market Association, draws some of the greatest minds and hottest products in the auto industry. The show features new and old cars, modified with the best in aftermarket products.

With the economy in the tank and fuel prices recovering from their highest points ever, does this year’s show feature ways to save money on you car?

Well, let’s take a quick look at some featured cars and make an assumption:

2009 Ford Mustang GT 

Supercharged with air/water intercooler; high-flow air filter; exhaust headers; high-flow catalytic converters with race exhaust; lightened flywheel; high-performance clutch.

2007 Lamborghini Murciélago LP640

Capital 19×9 front and 20×13 rear forged three-piece wheels; Pirelli tires.

2006 Chrysler 300 Touring 

Dodge Viper V10; T-56 six-speed manual transmission. 

2003 Infiniti G35

GT Motorsports engine; 502 horsepower with 10 pounds of boost; ZEX nitrous system; candy apple red carbon-fiber valve covers and battery covers.  

2008 Dodge Challenger SRT8

JBA exhaust and header system; Paxton supercharger.

2008 Ferrari F430 Scuderia 

4.3L V8 engine; 503 horsepower and 347 lb.-ft. of torque; F1 paddle-shift transmission; Singh Autosport ECU upgrade; prototype race exhaust.

I’m not going to lie and say I don’t think these are cool. Spectacular even.

But I ask you: Is this a sign that even those in the auto industry have yet to wake up to the reality of our economy and fuel usage?

-tgriffith

FOUND: The perfect gifts for auto lovers!

The Neiman Marcus BMW

The Neiman Marcus BMW

The holidays are coming!

For those of you who want to get started on your shopping lists but aren’t sure where to start, relax. I’ve got you covered. These suggestions are readily available in catalogs nationwide. You probably won’t even have to leave your home to order up these gifts that are sure to please even the most discriminating auto aficionado on your list.

Of course it’ll also help if you’re a multimillionaire, but I’m just giving you the benefit of the doubt and assuming you are.  I mean, who isn’t these days?

Catalog: Neiman Marcus

Product: 2009 Limited Edition BMW 750Lis

Product Description: Swathed in an exclusive Diopside Black paint scheme applied by BMW’s in-house Individual design studio, each vehicle includes a piano black interior trim, Champagne Merino leather and BMW Individual badging throughout.

Price: $160,000 (includes a European driving experience. Presumably in Europe.)

The Bloomingdales Infiniti

Catalog: Bloomingdales

Product: 2009 Infiniti G37 Convertible, Premier Edition

Product Description: Powered by a 330 horsepower 3.7L V6, the automobile gets a dark gray Platinum Graphite exterior, exclusive Monaco Red leather-trimmed interior with hand-crafted, red-stained genuine maple wood trim, a special grille and 19-inch aluminum wheels.

Price: If you have to ask… call Bloomingdales when they go sale on November 10, at 12:00 p.m. CST

You can thank me by simply ordering 2, and sending one my way.

What do you think of ordering cars through a catalog?

-tgriffith

Is there such thing as an 8-speed transmission?

The Genesis may be a candidate for Hyundai's new transmission

The Genesis may be a candidate for Hyundai's new 8-speed transmission

 

No one can argue that the best way to save fuel is to build cars that use less of it.

The first function of fuel economy is weight: the lighter the car the higher the MPG.

The second function is RPM. The more an engine revolves per minute, the lower the MPG the car achieves.

Since there’s a limit to how light a car can be, I’ve always wondered why cars didn’t have an extra gear or two for highway speeds. At 70 MPH, my 5-speed manual Suzuki SX4 gets about 25 MPG. Why not have a sixth gear so I could decrease the engine speed and achieve 30+ MPG? Sure seems like I could save a lot of gas cruising the highway at 2000 RPMs rather than 4000.

Enter Hyundai.

The Korean car company has recently announced the production of an 8-speed automatic transmission, for introduction in 2010. Designed to maximize engine torque and improve fuel efficiency, vehicles equipped with this tranny should see a dramatic improvement of highway MPG ratings.

I believe technology such as this is the immediate answer to decreasing our use of oil, and applaud Hyundai for their forward thinking.

What makes the most sense to you: efficient gas-powered cars or hybrid/alternative fuel vehicles? 

-tgriffith