By Brendan Moore

10.31.2007

Specialty Equipment Market Association (SEMA) show, Las Vegas: The 2009 Toyota Matrix, the hatchback version of the Toyota Corolla, debuted at the SEMA show along with the new 2009 Corolla.

The new Matrix, essentially a twin of the Corolla except for the sheet metal, is not the sales leader that the Corolla is, but nevertheless sells in numbers that a lot of other auto makers would kill for. Toyota believes it will sell 300,000 Corollas and 60,000 Matrix hatchbacks just in the U.S. in calendar year 2008, so that should give you some idea of the contrast in sales between the two, as well as their significance to Toyota.

The 2009 Matrix looks a lot more like a crossover than a wagon, which is what the current Matrix looks like. The new model is more aggressive-looking, which is probably a smart move by Toyota; it should get them some younger male buyers without alienating the current demographic of buyers.

The new Matrix will be available in four trim levels, Standard, S, S-AWD and XLS. The engines and transmissions are identical to those offered in the 2009 Corolla.

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By Brendan Moore

10.31.2007

Amid Fiat’s resurgence in Europe, its Lancia brand has been somewhat passed over in terms of new models and press coverage.

But Fiat has not forgotten about the old Italian marque, and some new models are on the way, and Lancia is rebuilding its dealer network and making marketing plans to publicize the new models.

Lancia Delta HPE concept

One of the most anticipated new models is the Lancia Delta HPE, a new model based on a stretched Fiat Bravo platform.

Although no prices or trim details have been released yet, a range of gasoline and diesel engines is expected, ranging in power from 120bhp to more than 200bhp, a goodly amount for any small car. Fiat’s brand-new and highly-anticipated twin-turbo four-cylinder diesel engine is expected to be offered in the range from the start, and that will be a huge plus in the European market.

The new Delta HPE is expected to compete in the same segment as the VW Golf and the Ford Focus. While it certainly won’t throw a scare into either car or its attendant sales figures, it may appeal to those motorists looking for an alternative to the usual fare served up by European automakers.

The production Delta HPE is expected to look very much like the concept version shown over the last year, which has gotten good reviews overall.

Will Lancia return to the U.S. anytime soon?

Well, we don’t even have Fiat or Alfa Romeo back yet, so it’s not likely. American buyers will see the extravagantly priced Alfa Romeo 8C soon at their local Maserati dealer, which is fitting since it is more or less a Maserati, but there are no firm plans for the rest of the Alfa lineup. So, don’t hold your breath for Lancia. Frankly, I would be delirious if we could just have the Fiat lineup available here in the United States. That would be a great start.

Lancia is expected to show their final production version of the Delta HPE at the Frankfurt Auto Show next year. Sales are expected to commence a few months after the Frankfurt show.

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Iconic brands still to be sold

By Brendan Moore

10.30.2007

It’s been sort of pushed into the background lately as a result of Ford’s recent lousy financial results and their upcoming wrestling match with the UAW, but the sale of Jaguar/Land Rover is still grinding forward, albeit slowly.

Ford expects to draw up a list of preferred bidders for the two British subsidiaries in November, and by all accounts from people inside the companies, there are at least six serious suitors for the package deal of Jaguar and Land Rover. The would-be buyers definitely include both industry and private equity buyers, and there is also the somewhat far-fetched rumor that one of the potential buyers is a private individual that has formed a legal company solely for the purpose of buying the two auto makers.

Some of the known interested private equity parties include (amazingly) Cerberus, which would seem to have its hands more than full with Chrysler, Ripplewood, Terra Firma and TPG. The strongest private-equity bid is expected to come from One Equity, the investment group headed by former Ford CEO Jac Nasser. Nasser is quite familiar with both companies, has a high opinion of both companies’ prospects and his ability to realize those prospects, and further, is reportedly champing at the bit to re-enter the auto industry.

Tata, the Indian vehicle manufacturer, is certainly one of the industry players interested in Jaguar and Land Rover. The other Indian vehicle manufacturer, Mahindra and Mahindra removed itself from the bidding two months ago.

Jaguar currently employs approximately 7300 people in England, and Land Rover employs around 8300 people, with almost all of those also in England.

One of the problems that bedevils both Ford and any purchasers of Jaguar/Land Rover is that the valuation of both companies is a moving target. Industry analysts pegged the package deal at a maximum price of $3 billion USD just a few months ago; however, ailing Jaguar has reduced both its losses and operating costs since then, and healthy Land Rover has experienced higher than projected sales of its new models. The two companies together may be worth almost $4 billion now, although this seems like wishful thinking to this writer.

Of course, for Ford, it’s not just about the money. Ford wants to keep supplying major components like engines and transmissions to both Jaguar and Land Rover and any deal is contingent on maintaining that supplier relationship. Ford also wants to replicate the terms of the recent sale of Aston Martin by retaining at least a 10% stake in both companies. Some sources suggest they may want to retain as much as 20% in Land Rover in the transaction. There may also be a “right of first refusal” clause in the agreement which would allow Ford the option of buying back either company should they be come up for sale in the future. Lastly, some of the potential buyers want Ford to lend them the money to buy the two marques, providing “staple debt financing” in order to help any buyer fund the purchase. Ford is loath to do this, but it may be required for Ford to get the deal and the buyer they want.

Ford has stated that it hopes to resolve the question of whether Jaguar and Land Rover will be sold by the end of 2007 or the first quarter of 2008. But of course this official statement from the company is disingenuous as Jaguar and Land Rover will be sold; Ford really has no choice as it desperately needs all the cash it can get to fund its turnaround efforts. The only open question is who Ford will sell the two prestigious British marques to, and for how much.

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Czech auto company is on a roll

By Brendan Moore

10.29.2007

Skoda Auto announced that their YTD profit jumped a whopping 37.7% over the same 9 months of 2006. Skoda reported profit of 424 million euros compared to last year’s profit of 308 million euros.

Skoda, the Prague-based Czech subsidiary of VW, Europe’s biggest car company, just seems to do everything right lately. They have successfully staked out the value segment of the European market, and have not put a foot down wrong while rolling out successful models one after the other.

Skoda’s sales rose 12.6 percent in this same period to reach 462,400 cars, compared with 410,700 a year earlier. Skoda sold 549,667 cars in 92 countries last year, and expects to hit one million units sold in 2010.

And they should get there easily, considering their current sales trends and the fact that they keep pouring more money into production R&D and new model development every year. This year Skoda increased their budgets for same another 34% over last year, which in itself was a record year for expenditures in these areas. A company spokesman stated, “Our investments aimed primarily at innovation and expansion of our model lineup”, and certainly, the results so far speak for themselves.

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By Brendan Moore

10.28.2007

Volvo has the best certified used vehicle program in the luxury segment, and Volkswagen took the honor among non-luxury brands for the fourth year in a row, according to IntelliChoice, a company that specializes in automotive ownership cost and value analysis.

The firm has been ranking certified used vehicle programs for the past nine years. The results for this year’s ranking were announced three days ago at the 2008 Remarketing Conference and Used Car Expo in Las Vegas.

Volvo replaces Cadillac in the No. 1 spot this year, only one year after Cadillac dislodged Jaguar from the top spot, a position Jaguar had held for years. Cadillac and Jaguar are tied for second-place in the luxury segment this year.

Over 1 million CPO (Certified Pre-Owned) Vehicles will be sold in 2007, and it is expected that that number will be bettered in 2008. IntelliChoice analyses CPO programs from 31 major manufacturers at this point.

The top five CPO programs in the luxury segment, according to IntelliChoice:

Volvo
Cadillac
Jaguar
Saab
Lexus

The top five CPO programs in the non-luxury segment:

VW
MINI
Hyundai
Honda
Scion

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By Chris Haak

10.26.2007

At the Tokyo Auto Show, Honda confirmed that the 2009 US Accord will have an optional 2.2 liter diesel engine. Boost levels, and therefore output, have not yet been finalized, but it’s expected to make at least 150 horsepower and 260 lb-ft. of torque, while likely eclipsing the fuel economy of both the old V6 Accord Hybrid and the current Toyota Camry Hybrid.

This will be an impressive engine for several reasons. Other than the respectable power and torque for a four cylinder and expected strong fuel efficiency (likely well over 40 miles per gallon in the real world), the engine will mark the debut of Honda’s Clean Diesel technology in the US. The engine will be 50 state-legal (unlike many 2007 model year diesels), and unique to Honda, the engine will not require a urea injection as Mercedes and larger VW diesels to remove harmful NOx from the exhaust (Mercedes calls their diesels BlueTec, and the urea injection liquid, which must be periodically refilled at the dealer, is called AdBlue). Instead, Honda’s solution is a NOx converter that – without adding any chemicals – produces its own ammonia through a chemical reaction that reacts with the NOx to produce harmless nitrogen and water.

Honda is also planning to begin sales of its new dedicated hybrid model, likely to compete directly with the popular Toyota Prius. The new Honda hybrid (which still does not have a name) will be a five passenger vehicle. This vehicle may be followed later by a smaller, sportier hybrid model similar to the Honda CR-Z concept (shown to the left) previously shown by Honda.

The best news about these new engines and vehicles is that Honda has directly addressed one of the biggest criticisms of hybrid and diesel vehicles: that is, diesels and hybrids typically save fuel, but the added complexity and components makes the vehicles too expensive to have any kind of economic benefit. Instead, Honda expects that the breakeven point (where fuel savings have equaled the additional price premium for a diesel or hybrid) will be two years for these new models. An earlier rumor on the Accord Diesel’s pricing was that it would slot somewhere in the middle of the lineup, so it certainly seems plausible. If Honda keeps the pricing in that sweet spot, 2009 Accord Diesel sales should take off.

Editor’s note: Since this was published, Honda has released a statement regarding the diesel engine in the Acura TSX. Click here for that story.

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By Brendan Moore

10.26.2007

Toyota has announced at the Tokyo Auto Show that the iQ, a projected Mini competitor, has been pushed up in the production queue and will be in showrooms as early as Fall 2008. The diminutive car will be the smallest 4-seat car sold in the world when it goes on sale, at approximately 10 feet long and 5.5 feet across. For comparison, that is 25.6 inches shorter than a Mini, 22 inches shorter than the new Fiat 500, but 11 inches longer than the Smart car which goes on sale here in the United States in the first quarter of 2008.

Toyota stated that the car will be shown at the Geneva Motor Show in March 2008 and go on sale by the end of the year. Toyota expects to sell around 80,000 units in Europe in 2009. The car is not slated for sale in North America.

Rumors are rampant at the Tokyo Show that the iQ will be powered by a Yamaha motorbike engine, but senior Toyota sources brush those rumors off as not credible. One Toyota executive did point out, however, that Toyota does own part of Yamaha, and that the bike engine specialists often get involved with Toyota’s engine development.

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