The Auto Biz: Finally Facing Reality

Pontiac Aztek

Carmakers sold nearly 17 million cars and light trucks in the U.S. in 2005. As of September 2009, reported figures are 9.2 million.

If you think sales are ever going to come back to that earlier level, I’ve got a used Pontiac Aztek I’d like to sell you. Americans are buying fewer cars for a number of potent reasons, and the NY Times recently traced some of these: Younger buyers have less cash, older buyers are moving back to the city; all groups seem to be downsizing (in both vehicle size and number of cars per family); environmental concerns are growing; and, not insignificantly, the emotional charge of buying/owning/driving a car seems definitely on the wane. These trends, I think, are only going to continue.

For manufacturers, it’s the most difficult of times. How are they going to anticipate demand in such a fluid environment? Figure out what kind of vehicles to build? Determine whether, as the Times said, they are in the car business or the transportation business—and not end up like the cigarette companies?

Comes the government into the picture, and many are still trying to figure out whether it is savior to the auto industry or inoculator of a new form of social disease. For many Americans, the man of the hour is Kenneth R. Feinberg, the Treasury’s pay czar. He told reporters Wednesday that there would be big, big cuts in cash and stock compensation for execs at the seven companies—including AIG, Citigroup, Bank of America, GM and Chrysler—that have together received a total of $300 billion in taxpayer (TARP) funds. Details, particularly concerning the auto firms, are here, and a lot of people are cheering, even though it is still generally business as usual on Wall Street.

To get some handle on where things are headed, it’s necessary to know how we as a nation got here. Steven Rattner, who headed the Obama auto task force, has written for Fortune a short history of how his team came to terms with the crisis that unfolded last winter in the industry. It is fascinating reading and offers a few unforgettable insights into the key players, like Rick Wagoner and the President himself, as they reacted to the course of events.

Both GM and Chrysler, says Rattner, were in a state of denial.

At GM’s Renaissance Center headquarters, the top brass were sequestered on the uppermost floor, behind locked and guarded glass doors. Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors (no mixing with the drones).

This isn’t Michael Moore-type commentary, since most of it has to do with the financial rescue and the decisions that led to it. For car gurus, this should be required reading.

If GM, Chrysler and Ford (not to mention the transplants) are facing much-lowered expectations, how will they execute in the coming years? Do you see major successes or failures ahead?


Where the Wild Cars Are

Bugatti Veyron in California: Yours for $1.6 million

Bugatti Veyron in California: Yours for $1.6 million

The movie “Where The Wild Things Are” is out in theaters. I’m sure it’s a fine movie, and I’ll probably see it, but when I think of “wild things,” two things come to mind. One is not appropriate for this blog, and the other is cars.

So I got to thinking: Where in the USA are all the wild cars? My first guess of course was California. Last time I was there I was passed by a Lamborghini, a few Bentleys, and a Maserati. On one highway.

I figured the best way to get an idea of where the wild cars are in our country would be to find out where the dealers are. I used this map from Turns out we’re surrounded by wild cars (by my definition, cars that cost at least $100K) with not much to speak of in the middle of the country.

1st Place: California

Check out these numbers: California has five Ferrari dealers, five Lamborghini dealers, five Maserati dealers, seven Bentley dealers, five Aston Martin dealers, and 17 (!?) Maybach dealers. Oh, and three of the 9 U.S. Bugatti dealers. I could end this blog right now, because California is no doubt where the wild cars are. Nearly all of them. But I’m curious, so I’ll keep going.

2nd Place: Florida

Ferrari 612 Scaglietti: available in Florida!

I should’ve known. Florida is basically the East Coast’s California, but with more Buicks. The state does have some impressive wild-car numbers, though: Five Bentley dealers, five Aston Martin dealers, two Lamborghini dealers, four Ferrari dealers, four Maserati dealers, and even the elusive Bugatti dealer.

3rd place: Texas

Bentley Continental GT: The perfect oilman's car. Just needs a set of steer horns on the hood.

Oil millionaires have ample opportunity to spend their cash and fuel their oil addiction with two Aston Martin dealers, two Bentley dealers, three Ferrari dealers, one Lamborghini dealer, three Maserati dealers, and three Maybach dealers.

4th Place: The Northeast

A screamin' deal on a Maserati!

I guess it’s the winters and the mountains that keep the money-saturated Northeast out of the Top 3. Who wants to drive a Lamborghini on a frigid Boston day? Still, the Connecticut, New York, Rhode Island and Massachusetts area combines for some decent numbers. Between the states, Aston Martin, Ferrari, Bentley, Maserati, and Lamborghini are all represented.

5th Place: Tie between Arizona and Washington

Aston Martin DB9: yours for just under $200,000!

Believe it or not, rain-soaked Washington and sun-spoiled Arizona are pretty similar in numbers. In Washington you can find one dealer each for Aston Martin, Bentley, Ferrari, and Maserati. Arizona also has Aston Martin, Bentley, Ferrari, and Maserati. Neither has Lamborghini. Arizona’s tiebreaker could be the presence of Bugatti in Scottsdale.

Dead Last Place:

Everywhere from Idaho, Montana, and Wyoming to Minnesota, Iowa, and Wisconsin. The only wild cars here are the trucks used to hunt the real wild things: hogs, elk, and bears.

Where do you live, and have you ever seen a real exotic car on the road in your area?


The Curse of the Koenigsegg

Koenigsegg CCX Crashed

Another one has crashed. Yup, one of the world’s fastest, most exclusive sports cars, the Koenigsegg CCX, bit the dust, this time driven by a New York dealer who apparently was racing a Porsche 911 GT2, hit a guardrail, and damaged the Porsche as well. No word yet on what the owner of the car had to say.

There are only 10 Koenigsegg CCXs in North America out of 25 produced for the world. The price I see most frequently quoted is $545,568. There have been at least three crashes now, as I count them. Besides this one, Norwegian millionaire Tommy Sharif gave us a fabulous example of how not to drive a high-powered car in the video below.

Mr. Sharif returned the car, says MotorAuthority, and it was then sold to another owner who “ended up crashing the car within 18 hours of taking delivery”—into a garbage truck, no less. Earlier, in May 2007, a Koenigsegg engineer put the biofuel-powered CCXR into a ditch and really messed up the world’s first green supercar.

Clearly, the car is too hot to handle, at least for most mortals, and that’s a shame, because it is truly state-of-the-art in design and performance. The standard-bearer CCX, for instance, will do 0-100 km/h (0-62 mp/h) in 3.2 seconds, 0-300-0 km/h in 29.2 seconds. Its top speed is 395+ km/h (245+ mph), and it will come to a stop from 100 km/h in 32 meters. Incredible. These figures are from the factory website, which has lots of interesting info and some history.

And yes, Koenigsegg is the same group that wants to buy Saab from GM. Yesterday the European Investment Bank approved a €400 million loan, with possibly more loans to come from the Swedish government, thus bringing the deal close to fruition. Let’s hope a little of this money can be used for better owner-driver education programs.

Koenigsegg has shown that it can go toe-to-toe with Lamborghini, Ferrari, et al. Is there some reason why drivers keep crashing its cars?


Cars Coming Soon->Should We Look to Tokyo?

The future of Honda minivans?

The future of Honda minivans?

The Tokyo Motor Show is under way right now.

Normally when a major international car show is happening, I’m overwhelmed with news of what hot new cars might make it to the U.S. soon. This time, the news is a bit… underwhelming.

First, Honda is showing a concept called the Skydeck. While there are no production plans whatsoever on this design exercise, it could be a peek into what future Honda minivans will look like. This concept has scissor Lambo-style front doors and wooden seats inside. Exciting, huh?

Tokyo is at least bringing some sexy to the party, with the super hot Lexus LF-A (which we brought to you yesterday) and the FT-86 Concept, but other than that, we’re not getting a lot of drool-worthy material. There are lots of “green” cars and electric concepts, which my fellow blogger jgoods will cover soon, but not much that offers real driving excitement and horsepower.

For that we need to look elsewhere, and we’ll start in Italy.

MSN reports that the Alfa Romeo 159 Sedan, Brera Coupe, and Spider will make it to the U.S. for 2010. Frankly, I have my doubts that is true. I’d bet that any Alfa making it to these shores will be at least two years away and then come to us wearing Dodge clothes, courtesy of Chrysler’s new Italian overlords at Fiat. But maybe MSN’s Bill Gates and Fiat’s Sergio Marchionne had dinner and made some arrangements. Who knows?

Okay, now lets get to some serious business, in the form of 487 horsepower. Mercedes-Benz has revised its C63 AMG with a new package called the Performance Package Plus (PPP). The PPP increases pony output over a “standard” C63 AMG by 30 to the aforementioned 487 and reaches 62 miles per hour in 4.4 seconds. MB hasn’t said whether or not this animal will come to the States, but as long the company isn’t saying no, we’ll latch onto the possibility that there’s still a chance.

If you need to race across a desert anytime in the near future, or just impress the heck out of your friends and neighbors, take a look at the newly available Ford F-150 SVT Raptor. The word “beast” is often used to describe a truck, but this one earns the label. What other truck comes direct from the factory with racing shocks, massive 35-inch tires, and a 320-horsepower, 5.4-liter V8?  This ain’t your neighbor’s F-150. This is the truck he wants his F-150 to be. And at under $40,000, it’s actually a pretty good deal.

For $40,000, would you be more likely to buy a Ford F-150 Raptor or an Alfa Romeo 159?


Selling a Car Company Ain’t Easy

Volvo S60 Concept

Volvo S60 Concept

Both Ford and GM are experiencing problems selling off their foreign carmakers—Volvo and Opel, respectively. One of the reasons is concern about intellectual property.

For 10 months, Bloomberg reports, Ford and Geely (China’s largest car company) have been trying to finalize the transfer of Volvo, but they’re stuck over whether and how Geely will assure Ford that its technology and new-model blueprints will be kept secret. As we all know, some in China have little regard for patents and intellectual property rights.

Fueling this fire is the October 14 arrest of former Ford engineer Xiang Dong Yu, accused of stealing over 4,000 Ford documents in order to get himself a job with a Shanghai auto firm.

Because Volvo is “completely integrated into Ford’s product development,” said one analyst that Bloomberg quoted, selling it is “like selling a room on your house. You can’t separate it easily.” Back in July, General Motors rejected an offer to buy Opel because a Chinese company couldn’t provide design and technology safeguards to its liking.

Opel Astra, Frankfurt 2009

And there are still snags to the Opel-Magna deal being worked on in Germany. Last week it looked like the European Union and its Competition Commissioner were pressuring GM to reconsider its sale to Magna. The €4.5 billion in state aid offered by Germany to promote the sale appeared to them to be, well, a bribe—or maybe we should say “an improper inducement.” But today, the Commission backed down, saying they would not oppose a sale. They just want to be sure all the rules are followed. Mmm, right.

GM’s troubles aren’t over yet. Spanish Opel workers have just turned down Magna’s latest offer and scheduled a four-day strike. It’s about job cuts, of course.

If Hummer finally went out the front door to China, Opel is having a very tough time making it through the various political minefields set up by the Europeans.

Is it right for the EU to insert itself in a deal between a U.S. corporation and a Canadian-Russian combine for a German car company? Let us have your opinion, please.


Lexus LF-A: Specs for the Exclusive Supercar


If this car doesn’t help change Toyota’s reputation for building boring, sensible, and practical cars, the company is screwed. (As any Car Guru knows, Lexus is Toyota’s luxury brand, as Acura is for Honda and Infiniti is for Nissan.)

We’ve talked about the FT-86 concept, Toyota’s joint effort with Subaru to build a RWD sports coupe, but the real excitement lies in the Lexus LF-A. This super-Lexus has been in the rumor mill for about two years, but is set to debut at the Tokyo Motor Show in production form. “Production” is a very loose term, though, as only 500 will be made.

The car is exceptionally hot, with all the right curves, angles, and intakes. From the outside, it seems Toyota has created a Lexus worthy of our lust. I even like the triangular triple exhaust pipes. My only issue with the design is with the taillights – mere slits sitting on top of acres of empty space. The question with the LF-A has been: Will the performance numbers stack up? Until now we’ve only been able to guess.

Thanks to our friends at Autoblog for digging up some details. The LF-A features:

4.8-liter 72-degree V10 putting out 560 hp at 8,700 RPM (that’s 116.5 hp/liter) and 354 lb.-ft. of torque at 6,800 RPM Redline: 9,000 RPM Titanium valves, connecting rods, forged aluminum pistons, dry sump lubrication and a titanium exhaust manifold Six-speed sequential gearbox Torsen limited slip differential 3,263 pounds with a 48/52 front-to-rear weight distribution Power-to-weight ratio of 5.8 pounds/hp 65 percent of the body is carbon fiber 20-inch BBS wheels wrapped in 265/35 ZR20 Bridgestone tires in front and 305/30 ZR20 in the rear. 0-62 MPH (100 km/h) in 3.7 seconds Top speed of 201.94 MPH

For all this, you’re looking at a $400,000 Lexus. But check out the video below and watch (and listen to) the white LF-A scream out of the parking lot then tell me the price isn’t worth it. As the guy says at the end, Savage!

Is Toyota back on track to building exciting cars? Would you take an LF-A over something like a Ferrari?


Find Used Cars in Your Area at CarGurus

More on the LFA (don’t miss the update at the bottom)

Green Update–>MINI E, Ford Focus BEV, Nissan V-Platform, Toyota Sai—and More


We’re going to give you short takes with headlines today, because there’s a whole lot of news on the green car front. Let’s lead off with Times Online’s Giles Smith, always good for a chortle. All-electric MINI E is a blast to drive: Giles says the MINI E goes like “the electric clappers” and actually looks like a car (even though the back seat is full of batteries). A group of 20 cars will go out for a six-month trial in England, with 20 more to test next year. There are many unanswered questions about the future of electrics, among them their styling.

The great failure of all electric models to this point has been their weakness in encouraging desire. How much wider a take-up might there have been for the gawky G-Wiz [shown here] if it didn’t resemble something that Laurel and Hardy had just driven through a sawmill? It’s been like the old joke about Superman. If electric cars are so smart, how come they wear their underpants outside their trousers?

Focus BEV to test in London: Ford seems to be on the same page as MINI and is testing out 20 new Focus Battery Electric Vehicles with household drivers for three months. Early next year, a charging infrastructure will be installed. A somewhat different BEV appeared on “The Jay Leno Show” last month.

Michigan needs plug-ins: But it needs the infrastructure and coordinated development, too. Such is the theme of a current Motor City conference with some big-wigs.

“We talk about public utilities. We talk about cars. But we haven’t really talked about them together,” said David Cole, chairman of the Automotive Research Center in Ann Arbor. “What we’re going to be seeing is a merging of these two industries.”

Along these lines, GM’s FastLane Blog has an interesting webchat that featured Tony Posawatz, Vehicle Line Director for the Chevy Volt. We learn particular details about the Volt as well as some considerations about the future of EVs from Felix Kramer of the California Cars Initiative. Worthwhile exchanges in that chat.

There are still plenty of questions about the Volt, many of them critical, as put forward by CNN’s Alex Taylor here. Mainly these focus on cost/benefit issues, and we can’t help thinking the car comes up short.

Nissan’s V-Platform Coming to the U.S., maybe in 2011; to Thailand, India, and China in 2010. And Nissan wants to sell 1 million a year. It’s a low-cost, low-weight car that Nissan’s betting heavily on to compete with the Fiesta, among others—a world car. Nissan also made news by announcing its commitment to a “next-generation battery,” i.e., lighter and less expensive. These will be produced at the New Smyrna, Tennessee, factory and sold to “whoever is interested.” So says CEO Carlos Ghosn.

Infiniti jumps into the electric competition: The firm is reportedly working on a small car to compete with the Audi A3 and BMW 1 Series, as is Lexus. The comments came from an “insider” at the Tokyo Motor Show who also claimed that the new car would share powertrains with the Nissan Leaf (which kind of makes sense).

Honda is also considering going electric, per CEO Takanobu Ito. He still likes hydrogen-powered fuel cell cars for the future, but they will be a long way off. One factor influencing his change in strategy may be the poor showing of the Insight against the Prius, at least in terms of sales.

Toyota Sai hybrid launches in Japan: Showing for the first time in Tokyo this week, the Sai is a larger and more luxo Prius, it seems, and is sister to the Lexus HS 250h, which is now on sale in the U.S. Whether it will come here is not known, but the two very similar cars will compete against each other in Japan. What was that old line about the inscrutable Japanese?

DOE funding for three-wheelers approved: Which means, according to Autosavant, that companies like Elio Motors and Aptera can finally get development money. Three cheers, and let this be a counter to Giles Smith’s complaint about weird styling.

For those people that complain that everything on the road looks the same these days, the rebuttal to your complaint is a three-wheeler. All of the three-wheel vehicles in the pre-production pipe look like nothing else on the road today.

Three-wheeled cars certainly don’t look like anything else on the road today. But should they? Do you want cars that look like cars or like airplanes (the Aptera)?


GM’s 60-Day Guarantee Update: How Many Cars Returned?


In the middle of September, GM rolled out its ambitious plan to guarantee that buyers would love their GM cars. If not, GM would take the cars back for a full refund.

According to the rules, an unhappy owner could return a car after 30 days of ownership and before 60 days. Now that 30 days has passed since the program launched, how is the General doing on his promise?

Well, pretty good so far! According to, only one car has been returned. Yup, one.

But there’s a little more to the story. GM has sold about 150,000 vehicles since the program started, but only about 100 folks accepted the guarantee offer. The other 149,900 people took $500 cash instead of the guarantee.

Plus, we’re only just now getting to the point where those 100 people will become eligible to return their cars. The program ends on November 30, so it’ll be interesting to see final numbers come the end of January.

Perhaps the bigger story here, though, is that so few people are taking GM up on its offer. Either customers are already GM fans and sure they’ll love their cars, or they’re just looking for a bargain and figure they’ll like the cars enough that another $500 off the price is worth more than the hassle of trying to bring a car back.

Because it turns out returning a car isn’t like returning a sweater at Walmart. Unhappy buyers can’t just pull up to the dealer, get a refund, and take the bus home. According to the GM web site:

The customer will need to return the vehicle to the original selling/participating dealer. In addition, the customer will need to contact the administrator of the program and submit required documentation. Once the administrator has reviewed and verified the documentation requirement, the customer will be contacted to take the vehicle to the selling dealer to have the vehicle appraised.

Sounds to me like that process leaves a lot of room for “the administrator” to find reasons to not take a car back. But even with a bunch of hoops to jump through, I trust GM will hold up its end of the bargain for those who want to return a car.

If you were buying a GM vehicle, would you want the 60-day guarantee or the $500? I think I’d negotiate both!


Blowing Up a Phantom for Phun

Stretched Rolls-Royce Phantom, by Mutec

Here’s a video that tickles my heart: blasting and bombing an armored Rolls-Royce Phantom, presumably to show off its staying power in the face of an assault. Not that all Rollses should be bombed, but if you’re going to spend scads of money on protection, it’s not unwise to want some proof. A German company, Mutec, makes luxury armored vehicles like this one, and a stretched Phantom like the one above.

Anyhow, we found the video on Carscoop, which got it from Autoblog Español, which is not inappropriate, since some customers for the Mutec Rolls may well come from Latin America, where there are plenty of armored vehicles.

About ten years ago, yours truly was part of an NGO group that visited Mexico City and held meetings with Various Important Persons, both U.S. and Mexican, including an audience with Vincente Fox shortly before he became president. We were shuttled around in armored GMC Suburbans built, I think, by Kroll-O’Gara, a company like Mutec that constructed a lot of these tanks. Outwardly, the cars looked like ordinary Suburbans, but they were a good deal smaller on the inside.

Ever since, I’ve wondered what it would take to blow one up. Well, now we know: At least with a Rolls, you can’t do it with ordinary means. Although the bombs did look kind of puny, didn’t they?

If anybody knows more about how personal armored vehicles are constructed, and by whom, please post a comment.


Suzuki’s Hot New Sedan (Seriously!)


It wasn’t long ago that I riled up a group of Suzuki SX4 owners by wondering if Suzuki was kaput. I was among a group of people seriously thinking the time had come for Suzuki to pack up its fleet of mediocre U.S. vehicles and ship ’em back to Japan.

The SX4 was good (I even bought one) but the Grand Vitara, XL-7, Verona, Reno, and Forenza didn’t have any real selling points other than being cheap.

Suzuki needed a home run, and when the company teased its Kizashi concept, hopes were high. But not too high.

Now that the Kizashi is finally in production form, it’s receiving “first drive” tests, and the initial reviews are in. I’ll let a few quotes speak for themselves:

Autoblog says,

No, the Kizashi isn’t a supercar. Not even kinda. But the Kizashi is remarkably sporting, dare we say shockingly so. Because frankly, we were expecting some sort of already also-ran Camry competitor. Instead, Suzuki gifts the automotive world with an inexpensive five-seater that can embarrass cars costing 150% as much, if not more.

Leftlane says,

Thanks to a sports tuned suspension and a super-stiff chassis – as well as a curb weight of just over 3,200 pounds – the Kizashi is easily the most athletic car in its class, and even a few rungs up. How do we know? We tested the Kizashi on Virginia International Raceway against competitors like the Mazda Mazda6Nissan Altima, and Subaru Legacy, and even some cars a few classes up like the Volkswagen Passat CCAcura TSX and Audi A4.

Car and Driver says,

Fit and finish is [sic] first-rate, and the interior is above average in terms of materials and design, with enough room in the rear for a pair of adults. Ride quality is smooth and fuel economy (Suzuki projects 20–23 mpg city and 29–31 highway, depending on powertrain) is respectable. You could certainly do worse.

Seems to me Suzuki has designed a car with killer good looks that drives as good as, or better than, some world-class competition. Prices will start around $21K, which includes a 185-hp four-cylinder engine that propels the Kizashi to 60 mph in 7.4 seconds. With options like AWD and leather, the only thing that could hold back some buyers is the Suzuki name.

And that’s a shame, because if the Kizashi is a preview of things to come, Suzuki could be around for a very long time.

What would it take for you to consider buying a Suzuki? Think the Kizashi belongs in the same sentence as an A4?