By Brendan Moore

04.30.2007

IN a survey of 1000 adult drivers done by Response Insurance recently, 57% of drivers in the U.S. admitted that they do not use their turn signals when changing lanes. You probably didn’t need a survey to tell you that, but here are some other interesting results from the same survey.

About 7% of the drivers that eschew their turn signals say they do so because it makes driving “more exciting”. Approximately 42% of the drivers that don’t use signals state that they’re too pressed for time to use their signals, with another 23% owning up to the fact that they’re just too lazy to flick that turn signal stalk up or down. About 17% don’t use their turn signals because they’re afraid they won’t remember to turn it off (Welcome to Florida – Enjoy Your Stay!), and get this; 11% say they’re much too busy changing lanes frequently to bother with signaling. I’m pretty sure I see that guy every evening on my way home. The survey also noted that 62% of men change lanes without signaling, while only 53% of women admit to doing so. The survey has a margin of error of approximately 3%.

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By Brendan Moore

04.29.2007

Let’s take a quick look at India’s auto industry, now and in the future.

Of course, everyone in the auto industry talks about the new golden boy that is China, and a lot of the car companies have something going on in China, with even bigger things planned for the future. With good reason – the China market will possiby see a stunning 10 million vehicles (commercial and light-passenger) produced in 2007 calendar year.

But India is quietly coming on very strong, and although currently a small market by Chinese standards, is a market with tremendous potential. Both the domestic vehicle producers and the foreign transplants in India together make 1.4 million vehicles annually and with the pace of investment having considerably increased in the last 6 months, that number is expected to double in calendar year 2008. If that happens, that will put India ahead of places like Canada, Australia and the U.K, and get them extremely close to the projected output of Brazil and Mexico. The chances of India hitting or exceeding 1.5 million units in production in 2008 are excellent at this point. And things look very promising beyond 2008 as India has a huge rural market that is basically without personal transportation, the Country’s demographics skew heavily towards under-30 years old, incomes are rising steadily, auto financing as a loan product is finally starting to come into it’s own, and the national economy is growing at 9% or greater every year. Just as an example of one of these market factors, approximately 1.8 million vehicles financed in India last year; this in a country of approximately one billion people. As recently as ten years ago, the number of auto loans was close to zero, with almost every sale done on a cash basis. Just imagine if all auto sales worldwide could only be done on a cash basis; it’s a safe bet that overall sales would be very much lower.

Taking into account all of the above market attributes, it is not unreasonable at this point to forecast annual production of 4 million-plus vehicles by 2015, with over 3 million of that total sold in India for domestic consumption.

And Indians want cars with a hunger that is almost palpable. Think of America in the early Fifties, with a great economy and lots of pent-up demand, and not coincidentally, a tremendous amount of new highways being laid down. That is India now, except more so – current vehicle penetration among India’s population is 6 cars per 1000 people. Indians are finding out what Americans found out about owning their own cars – it gives that intoxicating combination of control and personal freedom, it provides a measure of status, you can go places quickly, you have privacy in your own car and finally, as always, the promise and satisfaction that ownership of anything large and tangible brings.

Interestingly, India is increasingly a hotbed of high-quality inexpensive car design and engineering. Unlike the Chinese, who are copying everything in sight, and using OEM components from foreign manufacturers to assemble their cars, a few companies in the Indian auto industry are working on several fronts to develop the “one-lakh” car. One lakh is 100,000 rupees which is around $2100 USD. That would make the car in development roughly half of what a Renault Logan costs, the Logan being the lowest-cost car currently sold by a major manufacturer in India. Hard to say if it will happen, but very good progress has been made by Tata, India’s largest automaker, in the last 12 months, and without belaboring the obvious, if the efforts to build a one-lakh car are successful, it could have ramifications for all the other auto manufacturers as well as consumers in other countries beside India. The current Tata brief for the one-lakh car is four doors, a 33-HP engine and a 5-speed manual transmission, with everything, including an extra rear-view mirror or a radio, optional and at extra cost.

Renault-Nissan, who just signed a deal with Mahindra and Mahindra for a joint venture to produce the Logan in India, stated that, they too are working an inexpensive car, namely, a cheaper version of something they already make, like the Logan. The Logan currently costs about $9500 USD in most places in the world, but is expected to cost less in India. Carlos Ghosn, CEO of Renault-Nissan, says they are shooting for a price point of $3500 USD for the as-yet unnamed low-cost car, and he expects it to show up before the end of the decade.

If either of these cars or both of these cars show up before the end of the decade, then all bets are off in terms of production and sales projections for the Indian market. It is entirely possible that sales only in India could close in on 7 million units by 2010. Production figures would be much higher, because, as we noted above, the market ripples would not stop there. Many auto industry analysts believe the global market for passenger vehicles priced under $10,000 USD will be 17-18 million units by 2012. I think it’s going to be a little higher than that, perhaps as much as 19 million units by 2012 and 22 million units by 2015. Indian auto production could increase geometrically in the instance of this sort of successful model development. Here is another factor favoring India in this sort of scenario: an important difference between Indian auto production and Chinese auto production is that while production costs are very low in both countries, vehicles made in China are not anywhere close to meeting the emissions and safety standards that are required in order to sell cars in most countries, while Indian auto production is able to satisfy those requirements.

And not to belabor the obvious, but competing models in this price range will follow quickly in India, should production of a single model by any manufacturer occur. Maruti, Suzuki’s subsidiary in India, owns 51% of the Indian market and will not likely be left behind in the cheap car race. Hyundai, with 11% of the market, will also not sit idly on the sidelines in this potential market environment. Fiat, GM, Toyota, Honda and VW are also pouring resources and capital into the Indian market and will of course want a piece of the market. GM, in particular, has 2.8% of the market in India, sees India as “China, The Sequel”, and has publicly stated it wants 10% of the market in India by 2010. China has been a wonderful, almost giddy success story for GM, and India looks like more of the same to General Motors. In fact, the fashionable 20-somethings in India’s Bollywood and it’s music recording industry have sort of adopted a small Chevy as “their” car, so that can’t hurt.

Most industry analysts agree that approximately 70% of automotive sales growth in the next 10 years is going to happen in the Asia-Pacific region, and that growth is going to happen in emerging markets like India. The differences in opinon usually center around which countries will come in at which percentage of the overall number. I say, keep your eye on India.

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By Brendan Moore

04.29.2007

I love interesting statistics, and here is an interesting statistic:

New Zealand residents bought more bicycles than cars in 2006; in fact, 30,000 more new bikes were sold than new cars in NZ last year. Bicycle sales have increased 40% over the last four years according to sales figures supplied by both Statistics New Zealand and the NZ Motor Trade Association. There are approximately 4 million people in New Zealand.

Just that one statistic alone about bicycles outselling cars would make some people want to move there.

Gasoline (petrol) in NZ costs about $4.17 USD per gallon unleaded.

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By Chris Haak

04.24.2007

This has become nearly a non-event because of all the speculation that it would occur sometime this year, but Toyota Motor Corporation has finally surpassed General Motors as the world’s largest automaker in terms of sales for the first quarter of 2007. Toyota sold approximately 2.35 million units worldwide in the first quarter, while GM sold 2.26 million vehicles, so Toyota outsold GM by 90,000 units.

It remains to be seen whether Toyota will retain the title for the full year of 2007, but other than some weakness in the full-size Tundra pickup’s launch, they are not showing any signs of slowing down their sales pace this year in the US. Overall, Toyota’s US sales are up 11.2% so far in 2007, while GM’s are down 5.5% (however, GM’s US market share remains much larger than Toyota’s).

GM has had the title of “world’s largest automaker” for 76 years, but it has consistently shot itself in the foot over the past few decades with product missteps, quality blunders, and poor marketing. Meanwhile, Toyota has managed to avoid most of those same problems, at least in the same scale that GM ran into them. The title was earned by Toyota just as much as it was lost by GM.

Unfortunately for GM, the emerging markets where they are seeing swift sales growth with attractive, competitive products – China comes to mind, as does Russia) did not grow quickly enough to offset Toyota’s strength throughout the rest of the world.
There are some signs that Toyota may be slowing down the pace of its US expansion to let quality and engineering teams catch up with the pace of new model introductions. The company’s biggest asset is its reputation for bulletproof reliability, and any chinks in that armor will be addressed as quickly and efficiently as possible. Toyota has already delayed several new models to conduct further testing (such as the upcoming Corolla, which was originally supposed to already be on sale in the US) and is working on hiring 8,000 engineers globally to ensure that future models are as well-engineered as Toyotas of the past have been.

As for GM, now that it does not have to check its mirrors every month to see Toyota breathing down its neck, it can concentrate on building attractive, efficient, desirable vehicles instead of some of the excuses that have been “bean-countered” to the point of visible cheapness. Build a product that people want and can trust, and the customers will come – or at least stop leaving.

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By Brendan Moore

04.24.2007

1965 Opel Diplomat 5.4 Coupe

I was reading a piece in a European classic car magazine from 2005 (I know, a little late) that featured the Opel Diplomat 5.4, a car completely unknown here in the States, but one of my long-time favorites.

The article was mostly a road test against some other “super-coupes” of the era, and so was short on many of the details that I like most about the Diplomat 5.4 Coupé. Fortunately, since I am a bit obsessive about things like this, I can provide those details.

The first Opel Diplomat V8 Coupé rolled off the assembly line of body maker Karmann in Osnabrück, Germany in the summer of 1965. The top Opel was virtually handmade by the workers at Karmann. Since only 347 of the 5.4 Coupes were ever made, this handmade status would not be a problem in terms of satisifying demand, but it did conspire to drive the high price even higher. The price was approximately 25,000 DM, which at that time would buy you seven Volkswagen Beetles, nicely equipped. The car cost Mercedes-Benz money, but without the Mercedes star and this was a tough sell in Europe. The American-style looks and size (almost 200 inches) were both loved and reviled on the Continent. The car was not a sales success for Opel.

The Opel Diplomat V8 Coupé was the absolute zenith of the Diplomat range and came with a 5.4-liter V8 engine –advertised as the same engine that was used in the Chevrolet Corvette at the time and paired with the GM two-speed automatic transmission, the 230hp V8 engine pushed the Coupé from zero to 100 in under 10 seconds. That was incredibly fast for the era, and gave the Diplomat 5.4 owner bragging rights everywhere he went in Europe. Maximum speed was 206 km/h (125 mph), which was a pretty good top end for a two-speed transmission.

And the interior? I’ll let Opel itself tell you what the interior was like – this is from the company’s press release noting the 40th anniversary of the Opel Diplomat Coupe in 2005: “The top-of-the-line model was characterized by restrained luxury and elegance. The two-door vehicle was equipped with hydraulic steering and braking boost, disk brakes and fog lamps. The interior was dominated by thick carpets, opulent upholstery, real-wood inserts as well as a band speedometer going up to 250 km/h. Power windows, power exterior mirrors and rear foot-well lamps are among the exclusive details the great mass of drivers in Europe would have to wait for quite some time yet.”

Now, here’s something about the Opel Diplomat V8 Coupé that even the few people that know pretty much everything about the cars usually don’t know. Every article written about the car states that the 5.4 liter V8 (known as a 327 small-block V8 here in the U.S.) in the Opel Diplomat is the engine from the then-contemporary Corvette. Owners of the car will tell you the same thing. Even Opel itself makes that statement. Until recently, I too thought this was the case.

An auto enthusiast magazine here on this continent had a retrospective of the Chevrolet small-block V8 in one of it’s past issues from a few years ago (hey, I’ve been busy, OK?), and one of the interesting anecdotes regarding the fabled engine is from the interview with from Bob Lutz, currently Vice-Chairman of GM worldwide, and formerly Head of Sales at Opel over 40 years ago when the Diplomat 5.4 was developed. In the interview, he happens to mention the Diplomat 5.4 Coupé and its use of the famous small-block.

Apparently, the small-blocks used in the Opel Diplomat 5.4 are special “endurance racing” versions of the standard Chevrolet small-block engine owing to the fact that the guys at Opel kept burning up the various small-block powerplants (including the standard Corvette engine) sent to them by Chevrolet during the sustained high-speed testing they did for the Diplomat. In order to replicate Autobahn conditions, they ran the cars at a sustained speed of 125 mph for hours on end, and in the process, destroyed quite a few engines. The Opel engineers first went through the stock Chevrolet 5.4 small-block engine, then a special “enhanced” engine that had some Corvette pieces, then the actual Corvette engine, and then were finally sent the “endurance racing” engines which made the grade and thus became the only V8 offered in the Diplomat 5.4 model.

So that’s the engine you got if you had an Opel Diplomat 5.4, and this may also explain why, that although not many Opel Diplomat 5.4 models were produced, you see a fair percentage of the few cars left with very high mileage and still running strong. The Opel Diplomat sort of had a Corvette engine, but not the production engines used in road-going Corvettes – it had the engines used in the Corvettes (and other cars) that did hard-core endurance racing like at Sebring and LeMans. It was a tougher, more durable, higher-revving (and more expensive) small-block V8 than the production Corvette engine, and a better engine all around.

It is unknown how many of the 347 Diplomat Coupes built between 1965 and the end of 1967 survive. One of the remaining ones is in the Opel Museum in Germany. It is a shame it is not driven anymore, but it is there to serve as testament to the grand experiment that Opel launched in 1965.

Many thanks to Karin Loeffler and Klaus Kukwa working on behalf of Adam Opel GmbH, PR, Germany for the photos provided. All rights to photos belong to Opel GmbH and cannot be copied, reproduced, or used in any fashion without express permission of Opel GmbH.

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By Brendan Moore

04.21.2007

1960 saw the introduction of Chrysler’s famous Slant Six engine in the Plymouth Valiant with a gross horsepower rating of 101 ponies. The straight-sixes the company used before 1960 were awful, and Chrysler needed another engine for the happening Sixties.

The development engineers leaned the engine 30 degrees to the right, leaned the transmission 30 degrees to the left, and were able to get an approximately even weight balance in this fashion, hence the “Slant Six” name. The 170 cubic inch (round off to 3 litres) production design had extremely large main bearings which meant very low engine stressing, and the Slant Six started setting testing records in performance and durability right away. These results were mirrored in the Chrysler, Dodge and Plymouth customer population, with the Slant Six getting a reputation as being an engine that you couldn’t kill, even if you abused it. Ordinary citizens would run their engines up to 200,000, 300,000 miles with regularity. And by Sixties standards it got pretty good fuel mileage as well.

Increasing the size of the engine to 225 cubic inches and the horsepower rating up to 160 did nothing to decrease its longevity. One thing it couldn’t do, however, was run clean enough (with enough horsepower) to pass modern emissions standards.

The last Slant Sixes were produced for cars in 1984, for trucks in 1987, and, finally, in 1991 for marine use.

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04.20.2007

I was looking through the Reuters news items yesterday and came across an article about the prices of gasoline in different countries and how those compare to the extremely low prices charged for a gallon of gas in the United States.

According to the American Automobile Association (AAA), gas is an average $2.86 per gallon (3.785 liters) for regular unleaded in the United States. Reaction in the U.S. to the recent rises in the retail price of gas which drove the average price to the current $2.86 have been all over the place, from a shrug of the shoulders to hysteria and talk of oil-company conspiracies. Some states (e.g., California) have much higher prices due to a more expensive, more environmentally acceptable formulation of the gasoline required by state law. As an example, where I live in Northern California, the average price of gasoline is around $3.59 per gallon of unleaded.

Of course, the price is the U.S. is a pittance compared to what the EU countries pay on average. The AA Motoring Trust has collected price data across the EU, with the following jumping out at you: The United Kingdom, as usual, has the highest price per gallon; petrol costs a staggering $8.37 a gallon, much higher than the next one down. Pity the poor Brit. The Netherlands is next, with the Dutch paying $7.52 a gallon. Then we get to No. 3 on the list, Norway.

Norway is an interesting case. Norway does not have a lot of people, but it has a lot of oil, courtesy of the country’s rich North Sea oilfields. Norway has so much money from selling oil that the treasury has had to establish special cash reserves just to have someplace to park it, as the government is afraid to spend any more money in public works or public benefits in Norway because they’re concerned that more money in the economy will spike inflation. So, you might ask yourself, “Well, if they’ve got that much money and that much oil, then why is gasoline so expensive in Norway?” The answer is simply that Norway has made a decision to keep the price of gasoline high in order to encourage conservation and reduce pollution from cars as well as traffic congestion. People in Norway are not interested in having more cars or SUVs roaming the cities and the countryside, burning more gasoline. Gasoline could be 20 cents a gallon in Norway, but instead it costs more there than every place on Earth, save two. And the citizens of Norway are, for the most part, pretty happy with the arrangement.

Working my way down the list, I finish with the EU, and get to Japan, which is the developed country closest to the United States in terms of the price of a gallon of gas, with a gallon costing $4.16 in The Land of the Rising Sun. Then, a big drop to the $2.86 it costs in the U.S. Then, every other country with a lower retail price than the U.S. is both a developing country and a country that heavily subsidizes the retail price of gasoline. Some examples include Kazakhstan at $2.75 a gallon, Russia at $2.68, Nigeria at $1.92, Saudi Arabia at $0.45, and Venezuela at $0.19 a gallon.

The summing up is this: Wherever you are in the world, if you’re unhappy about the price of gasoline, it could be worse – you could be in the U.K. If you are in the U.K., then, sorry about that remark. If you’re in the States, you have it pretty easy. Probably not much condolence as you’re struggling to fill up your 3-ton, 12 mpg, 7-passenger Lexus LX 470 on your way to the office this morning, but maybe Venezuela or Nigeria is a possibility in terms of emigration. No? Nah, not for me, either. Guess we’ll have to make do.

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