Editorials

Another Winner Not in Your Driveway

9 Comments 31 December 2007

By Ian Grasso

12.31.2007

So, Automobile Magazine named the Audi R8 as its “Automobile of the Year.” This is not exactly breaking news, and there is no doubt that the R8 is a fabulous car, but it confirms one of my many criticisms of mainstream auto publications – their standards are not geared to realities of the mainstream buyer. In a day when even GM has a blog, the major U.S. automotive magazines have been relegated to selling fantasies that no one can afford, testing in ways that no one drives, and giving awards that mean less and less.

A look through a recent issue of the Ann Arbor, MI-based Automobile Magazine is on par with browsing the Du Pont Registry – pages upon pages of halo vehicles described in tired puns, with minimum space devoted to cars that people actually drive. A columnist rants about the existential crisis caused by having a Lamborghini Gallardo Superleggera delivered to him at his Hollywood Hotel. Later, an in-depth look at the Porsche GT3. Next, the magazine publishes the results of its annual “All Stars” testing (read: 0-60 sprints, quarter miles, skidpad, etc) to the obvious conclusion of the typical Corvettes, Porsches and BMWs and even a Lotus Elise. The Chevy Malibu, the Mazda CX-9 and Volvo C30 being the common-man outliers. Finally, we are enlightened by a classic car auction section, where buyers are in turn criticized or lauded by author for their choice of 50’s Detroit, 60’s Italian, or the like.

Every time I read a monthly car magazine I am reminded that traditional publishing is, along with major music labels and network TV, an industry whose best days are most certainly behind it. For those who are not yet indoctrinated to its joys, the Internet provides far more information than any issue of Automobile, Car and Driver, or Motor Trend. Car enthusiast forums, blogs like this one, and even corporate websites provide more detail and should be the preferred source for the non-Private-Jet-Owning masses when searching for a new car.

Some may argue that forums and blogs do not have the same level of fact checking, editorial balance, and attention to detail as the major magazines. I would counter that while this is probably true, anyone with a healthy dose of common sense can quickly wade through the chaff to find useful and accurate information. In fact, the chaff often includes the monthlies own websites (Road and Track’s looks like it was built by a junior high student for a class assignment) which are covered with pop-up ads and in most cases offer limited information to non-subscribers. When the huge and popular New York Times offers its content and archives (from 1891) to all for free, this is inexcusable.

While I may be a cynic, the fact that major magazines are almost entirely bankrolled by manufacturer print advertising leads me to read their reviews with a particularly large grain of salt. Case in point: directly after the write up of the Malibu as an “All Star” in Automobile, there was a two page pull out (read: expensive) advertisement for the car. Hmmm, what a coincidence…

I would like to see a major monthly auto mag, just for fun, say something akin to what Los Angeles Times columnist Dan Neil wrote about the Chrysler Sebring back in August:

Not just bad, but a veritable chalice of wretchedness, a rattling, thumping, lolling tragedy of a car, a summary indictment of Chrysler’s recent management and its self-eradicating product planning, all cast in plastic worthy of a Chinese water pistol. The Sebring drop top does something I thought impossible: It makes me long for the exquisite craftsmanship of the Pontiac flipping G6.

Of course this would never happen – insulting two major manufacturers in one article would cause some major headaches at the editorial desk. If indeed something overtly critical was written it would be followed by paragraphs scratching for some sort of positive in the “I can’t believe I got stuck with this as my rental car” horror that is the Sebring. After all, a car manufacturer has to find a good quote to cull out of the article for its TV advertising.

I do feel for the editors and writers of these car magazines – it takes guts that I probably wouldn’t have in their situation to say something that will get millions of advertising pulled from your magazine and perhaps also cost you a job. That being said, the R8 was a wise choice for “Automobile of the Year.”

You, normal car-buying guy, probably can’t afford the 15% Lamborghini-sourced Audi and most likely won’t ever drive one. Even if you did happen to get the keys you would be crazy to take it out in the rain, snow or even a very windy day. But put yourself in the shoes of that Automobile magazine editor who made the choice – If you pick the Malibu, you piss off Toyota and Honda and maybe even Ford. If you pick the Accord you most definitely piss off Bob Lutz and probably the cyborgs running Toyota. So, the safe choice is a limited production $109,000 supercar that is such a ridiculously overwhelming automobile that the high volume manufacturers can’t do anything but shrug – and keep buying advertising.

But who says some boring domestic or Japanese volume brand always has to win just because most people drive them? Furthermore, does any of the nonsense in these magazines even matter? No, because for the 99.99% of you in the market for a car other than the R8, you probably aren’t looking at the major auto magazines for information on your next car. You are going to Google and the dealership – finding out for yourself like a smart consumer. The major automotive monthlies have not only written themselves out of the legitimacy for car buyers, they have become fantasy magazines that do nothing more than catch your eye at the airport newsstand with brightly covered exotics on the cover. In fact, the only people who care about the awards they give are their own advertising sales departments and the manufacturers who can add the notation “Automobile of the Year” or “10 Best” to their print and TV campaigns.

I would appreciate your comments on which, if any, magazines or publications you rely on when making the major decision to buy a car, new or used. I am preparing a series based on the actual process of buying the car, including research, dealership experience, and the test drive.

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Editorials

Favorite Cars of 2007 and More

6 Comments 31 December 2007

By Brendan Moore

12.31.2007

The year is over and its time for a look back. This is standard operating procedure at a lot of automotive publications and we’re not proud here at Autosavant, so I’m going to go with the flow, and give you the benefit of my thoughts on the year’s newcomers.

First, the cars – lots of new iron in 2007, and these were the ones that really stood out for me:


Cadillac CTS: The best Cadillac from General Motors in a long, long time is finally the equal of the BMW, Lexus and Mercedes-Benz offerings. Does it match those cars everywhere? No, it doesn’t, but those cars themselves don’t match their competition in every aspect, so it’s not required that the CTS win every battle on every feature. And, oh my goodness, the interior just makes you feel sort of all gooey and warm in your own personal interior.


Audi A5: Somehow, Audi just keeps putting out better and better cars. Poor German relations to BMW and Mercedes not so long ago, Audi is threatening to take away BMW’s dominance in sports sedans and Mercedes-Benz’s dominance in luxury sedans, and not look back. Audi is even expanding into Porsche territory, more on that in a minute. Audi sales are going through the roof, and cars like the A5 are the reason; beautifully rendered in metal, wonderful inside, and performance out the exhaust pipe. At $40,000 USD, they’re not cheap, but they’re worth the price.


Audi R8: This is a loud shot across the Porsche 911’s front bumper from Audi and what a shot it is! The 420 hp V8 coupe makes great noises, it tracks like a laser, and, of course, it is stunning to look at inside and out. At $110,000, it is aimed directly at the sweet spot that Porsche occupies in the market. Its not going to convert any die-hard Porschephiles, because they are blind to any other make, but anyone with an open mind needs to take a long hard look at this beautiful coupe.


Honda Accord: I love the interior, love the drivetrain, and the exterior of the sedan makes me grit my teeth. I like the coupe version, but hardly anyone will buy it, so what does it matter what it looks like? And since I am not all-powerful, it doesn’t really matter what I think of the incredibly bland sedan exterior, because Americans will line up to buy the wonderful new Accord sedan, just as they’ve been doing for many years. The ground has now shifted in the mid-size sedan segment with the Honda Accord clearly leagues ahead of the Toyota Camry in this category, and the new Chevrolet Malibu between the Accord and the Camry.


Chevrolet Malibu: If I were a buyer in this mid-size segment, the new Chevrolet Malibu is the car I would buy, and that’s saying a lot coming from someone who has eviscerated GM (and rightly so, I might add) for its lousy product over the years. The aforementioned Honda Accord is a little better mechanically and inside, but the Malibu is so much better-looking and so close in mechanical goodness that, personally, I would gladly give up the tiny edge of refinement the Accord has for the huge advantage in looks the Malibu possesses. Has the world gone mad?


Mercedes-Benz C-Class: Volume, volume, somebody turn up the volume. The new, redesigned C-Class is supposed to be the answer for Mercedes-Benz’s simmering quality issues of the last 10 years, and the early returns look very promising. Mercedes is counting on that outcome because the C-Class is one of the main ingredients of good financial health for Mercedes-Benz. The C-Class is understated in exterior design, but much improved in almost every aspect and the quality issues have been banished, according to the folks at M-B. The only serious knock against the new C-Class is the decidedly-average horsepower levels of the new cars, but with the price of gasoline going up, that might be a non-issue soon.


Buick Enclave: Buick has a big hit on their hands with the new Enclave, and the attention is well-deserved. It’s now the class leader in this segment. It’s extremely attractive, the fit and finish is superb and the Enclave moves out smartly with the smooth powerplant GM has provided for the crossover. There are actually waiting lists for the Enclave, if you can believe it. People waiting in line to buy a Buick – who woulda thunk it?

Now, astute readers may notice that Audi and General Motors get a lot of play on this list.

That’s just the way it worked out, but from a personal perspective, I must confess that in addition to dogging GM for a very long time, I was also an Audi-basher for quite awhile. To me, Audis in the Seventies, Eighties and into the Nineties were overpriced, under-powered cars with poor reliability that sold mainly off the appeal of their German origins to an American public. That changed for the better in the mid-90’s and Audi has never looked back. GM, of course, has had its own problems the last few decades.

And now, here I am, praising their cars.

But the cars I’m listing here are really good cars and will probably end up being great cars, depending on well they stay bolted together, so the past sins of either company don’t really enter into it at this point. Right?

Well, it certainly works that way for Audi, but let’s not kid ourselves, it just doesn’t work that way for GM yet. The recency of GM’s awfulness has not faded away for most of the American public, so they will be paying the wages of sin for sometime going forward.

But, regardless where the cars on this list come from, I can recommend them. Every one of them provides their owner with some high level of car-related pleasure. Drive one, buy one, love one.

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Features

The Extraordinary Aaglander – Keeping the Horseless Carriage Alive

6 Comments 28 December 2007

By Andy Bannister

12.28.2007



Eccentricity is not a hallmark generally associated with Germany’s car industry, which has built its huge success on a combination of efficiency, attention to detail and not taking too many risks.

One gloriously unusual company in at work deep in Germany’s countryside, however, bucks this trend by producing possibly the strangest automobile on sale in the world today.

Aaglander uses some of the latest technology and engineering to produce two models which are a conscious attempt to hark back to an elegant 19th century world of horse-drawn transport for pleasure.

In appearance Aaglander’s two-seat Duc and four-seat Mylord models look remarkably like the very first motorised vehicles of the 1890s, although these are not replicas in the established sense. They are, quite literally, traditional carriages where a horse has been replaced by an engine designed to provide a similar sensation of slow, stately progress.

Instead of a steering wheel, the Aaglanders are operated by means of two stiff leather reins, to give the sensation that the driver is holding the reins of a horse. The company’s technical staff include some masters of long-forgotten crafts in the motor industry, including carpenters, ironmakers and goldsmiths.

Underneath, however, the Aaglanders boast a modern 20hp diesel engine developing 719cc with automatic transmission. The vehicles are fully road-legal and can be driven on a normal car licence, although it is to be hoped not many turn up on the open road as the top speed is deliberately held down to around 12mph. The cars are, however designed to climb steep gradients easily.

Computer-aided design techniques shaped the steel tube frame cabriolet bodies of the Duc and Mylord, and both Aaglanders have four disc brakes and two independent hydraulic braking systems. As you might expect with a German product they are of the highest quality and conform to European safety standards.

This weird juxtaposition of old and new technology continues with modern halogen lights concealed in traditional carriage lanterns, and a state-of-the-art GPS system to help with navigation in the countryside. There is also a built-in heater (probably quite important, as the cars are otherwise open although some shelter can be afforded by a traditional cantliever canopy).


The cars are built in the confusingly-named rural area of Germany known as Franconian Switzerland, where they are ideally suited to outings across fields, old lanes and woodland tracks.

The company’s charmingly understated sales brochure talks of allowing those who love truly special things to revel in the luxury of a slower pace of life…it gives its passengers a glorious sense of time and leisure…a travel sensation that allows one’s thoughts to wander freely at one with the passing landscape.

It continues: A relaxing outing in the Aaglander has the similar aspect as river cruising through lovely landscape…and who can resist the incomparable sensation of arriving at the opera in style in an Aaglander?

All in all, then, the perfect car for making a splash in at that New Year’s Eve fancy dress party…

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Features

How Our Readers Would Encourage Americans to Use Less Gasoline

15 Comments 28 December 2007

By Brendan Moore

07.28.2007

Some of our regular readers may have noticed that we ran an online poll over the past week regarding our readers’ preferences for five methods the federal government could use to get American motorists to use less gasoline. We offered five distinct choices in the poll.

The question was posed as follows:

Here is the problem: the U.S. government wants people to use less gasoline. There are various ways of doing this. Of the choices offered below, what is your preference?

Here are the choices along with percentage of poll respondents that selected each choice:

1. Raise CAFE standards and subsidize ethanol fuel as the current energy bill stipulates – 3% of all votes

2. Raise the gas tax so that gasoline costs $6 a gallon and offset the gas tax with a decrease in the federal income tax rate – 26% of all votes

3. Massive federal subsidies to develop alternative energy vehicles, paid for by increased taxes – 7% of all votes

4. A combination of large taxes on vehicles that get poor fuel economy, levied annually, and tax credits for buyers of vehicles that are highly energy-efficient – 27% of all votes

5. Do nothing – the market will determine when alternatives to gasoline make economic sense – 37% of all votes

I wish to say that I know some of you will want to email in or perhaps comment on this post that YOU would have certainly offered different choices, like “Develop light rail everywhere possible” or “Outlaw SUVs in the U.S.” or “Build lots of nuclear power plants and allow only electric vehicles to be sold in the U.S.” or whatever, but those are the breaks. Five choices is already a lot of options for a poll, and these are the ones we picked. Sorry your favorite solution didn’t make the cut.

OK, first, I was surprised by a few of the results. One, I thought the energy bill that was just signed into law (choice #1) would get more votes than it did. I personally think it’s an incredibly stupid way of trying to get people to use less gasoline, but I thought more Americans were behind the measure. Doesn’t anyone except politicians like this new law?

Second, I was surprised that choice #5 didn’t get more votes than it did. We are, after all, Americans, and Americans generally like to put off any hardship or sacrifice as long as possible. The 37% of people that voted for “do nothing” is quite a bit lower than I would have predicted before the voting began.

Third, in that same vein, I must admit that I was surprised at the high percentage of people that were willing to endure higher taxes in some fashion in order to push consumers and industry towards more fuel-efficient cars or alternative fuel vehicles. Just do the math and you’ll see that the aggregate percentage of people who are willing to tax vehicles that get lousy gas mileage or tax gasoline so that people who drive vehicles that get lousy gas mileage pay more to drive those vehicles (choices #3 and #4 together) is a combined 53% of poll respondents.

People that don’t wish to tax gasoline or vehicles that use a lot of gasoline directly, but are willing to pay more general taxes through the subsidization of ethanol or the subsidization of research and development of alternative energy vehicles (choices #1 and # 3 together) is a combined 10% of poll respondents.

Add all of those percentages together of people that are willing to pay more taxes in order to promote using less gasoline via one of the methods in choices 1-4, and you have 63% of all respondents to the poll. That is surprising to me, but perhaps it reflects the desire among those readers to see something happen sooner rather than later regarding the problem of our dependence on oil as an energy source.

Of course, one thing it doesn’t reflect is the popular belief that any politician that proposes a gasoline tax or an annual tax on gas-guzzlers is committing political suicide and that’s why the American public will never be presented with that option. The politicians would much rather make the vehicles cost more through the new CAFÉ requirements and subsidize (using ridiculous logic, I might add) ethanol through the general tax fund, which, of course, also makes Americans pay more. It’s just a shell game but it does keep our political leaders from having to utter the dreaded phrase “gas tax”. The money from consumers will just have to come in another way, that’s all.

This is the popular belief, and just to put my cards on the table, I am a subscriber to that premise; that is, that any politician advocating this type of tax will get drummed out of office quickly. And I still believe that, despite our poll results.

Is this a case of people saying that they support something that they really wouldn’t support once they actually to pony up the extra taxes? Or is the popular belief that any politician that supports increased taxation on gasoline or gas-guzzlers will be booted out of office by his/her constituents simply a myth?

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News

SAIC Buys Nanjing Automobile

3 Comments 27 December 2007

By Brendan Moore

12.27.2007

It only seems like it took forever.

Shanghai Automotive Industry Corp (SAIC), corporate parent of Shanghai Motor Corporation in Beijing, has acquired Yuejin Motor Group, parent of Nanjing Automobile (Group) Corp.

The much-anticipated deal allows SAIC to take over all the key assets of Nanjing (which includes MG Rover) for the price of approximately $286 million USD.

The deal not only gives SAIC a great launching pad into Europe via the MG and Rover brands and the factory that produced same in Longbridge, England, it also consolidates part of the second-largest auto market in the world; that is, their home market of China. The same home market, incidentally, that put up a gaudy 35% growth rate in 2006. The takeover of Nanjing Automobile will make SAIC a much more formidable competitor to the foreign companies like GM and VW that currently control the largest market shares in China.

Part of the deal also requires Fiat to divest their 50% of Nanjing by selling it back to Nanjing. The guys at Fiat probably threw a party when they got that news because the joint venture has never met a single production or sales goal since it opened, and Fiat has been unhappy in that marriage for some time now. As an example, Fiat had forecast their sales from the joint venture to hit 300,000 units by 2010, and they just barely made it above 30,000 this year. So, Fiat will hardly be crying all the way to the bank when they cash that check for their 50% of Nanjing.

Fiat says that they will continue to cooperate with Nanjing on commercial vehicles and parts manufacture, but I think that statement is probably just window-dressing on the divorce so that both companies can save face concerning the break-up.

As a result of the acquisition, SAIC should reach capacity of around 2 million vehicles annually under their own brand in the next two years.

China’s annual economic growth has averaged 9 percent annually over the past 10 years, which has produced a tremendous amount of middle-class and upper-class car buyers new to the market. The country overtook Japan late last year as the world’s second-largest vehicle market after the United States.

Vehicle sales in China will pass eight million this year, and easily surpassed the full-year tally for 2006 in the first 11 months of 2007, according to the China Association of Automobile Manufacturers. There has been some discounting recently as manufacturers try to gain market share, but the overall new car market in China is expected to stay strong for years to come.

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News

Chrysler Undertakes Urgent Vehicle Improvement Steps

3 Comments 26 December 2007

They figured out what the rest of us already knew.

By Chris Haak

12.26.2007

There has been a lot of ink spilled over the past week about how things may be worse at Chrysler than Cerberus expected when they bought 80.1% of the company from DaimlerChrysler AG (now Daimler AG). Today’s credit markets are not friendly to the types of financial needs that Chrysler would have in order to turn around their lineup with all world-class vehicles, and many of their recent products have been met with both critical and consumer complaints. Specific concerns surround perceived quality, interior materials and fit and finish, and styling. Basically, Chrysler needs to improve sales in the short term in order to fund improved future models, because it will be very difficult for the company to raise additional funds from external sources in today’s environment.

Last week’s Wall Street Journal contained several articles about Chrysler’s situation, but one of the most interesting ones (to me) was that on August 6, when CEO Bob Nardelli started working, he immediately drove as many of the company’s products daily as he could. Now, in spite of owning a Plymouth Prowler, Nardelli is not a car guy, but he is a bright guy, and also being a wealthy individual, probably also has a clue about what a quality product looks and feels like. Supposedly, Mr. Nardelli did like the Jeep Grand Cherokee, but found the wind noise and interior materials “totally unacceptable” in the Chrysler Sebring convertible. In fact, after his experience with the Sebring convertible, he sent a “terse” e-mail to the company’s design chief, Trevor Creed, which read, “I found the wind noise totally unacceptable and bordering on offensive at speeds of 80 mph.” He also took a shot at the interior quality, adding, “I sure hope that as we go forward, we don’t punish the customer by thrifting the interior to meet a cost target.”

The interior quality concerns, which have been a point of contention with Chrysler’s critics, are going to be addressed immediately, according to an article in industry publication Automotive News on Monday. A team, composed partially of senior managers and directors who recently took buyouts and are returning to work as contract employees, will specifically address interior design and materials for the Sebring and Avenger.

The articles made no mention of the timeframe for when to expect to see the revised Sebring and Avenger, but if the project just got off the ground, I’d expect it to take two years to finalize the design and engineering and get suppliers on board with parts in production.

Meanwhile, I find it disappointing that the company who brought us vehicles such as the Viper, the original minivan, the Plymouth Prowler and the Chrysler 300C sedan rested on its laurels so much when creating the Sebring. The fact that the car has been on sale for only a year, and made its debut near the bottom of critical press comparison tests – and on retail shoppers’ lists – while becoming a favorite of rental car agencies should be, and apparently was, very eye-opening to Chrysler management. I hope that they can fix this car’s shortcomings (a little help with the exterior styling wouldn’t hurt, either) before it’s too late.

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News

The Volkswagen Polo

5 Comments 26 December 2007

By Brendan Moore

12.26.2007

I received a PR email about the new VW Polo Match from Volkswagen UK this morning, which made me reflect for a bit on the fact that 99% of the American public are oblivious to the fact that there is another world (from a size perspective) that exists in the VW lineup underneath the Golf (now the Rabbit again). This is not any Johnny-come-lately model; the Polo has been available in the VW lineup in Europe and other parts of the world for decades now.

But we’ve never seen it in the United States because, well, because, gasoline and diesel has always been pretty cheap here, and not only that, the Polo is smaller than the Rabbit, which a lot of Americans already consider too small. VW looked at those two big reasons to keep the little car out of the States and decided against bringing it to the U.S. many times over the years.

But the Polo has always sold well in Europe, and now that we have a couple of cars here in the U.S. that punch in the same weight/size class (e.g., Honda Fit), I am wondering if the time might be right for VW to consider producing the Polo here or in their Mexico plants for sale in the U.S. The VW Polo, like the Honda Fit, slots nicely between the speck-sized Mercedes-Benz Smart and the Volkswagen Golf, and most importantly, like the Fit, feels like a real car.

Just to give you a feel for the car, here is an excerpt from the press release copy from VW:

Set to be the biggest selling model in the Polo range the Match replaces the S level in the line-up. Compared with the S, the new Match offers even greater value and increased equipment while retaining the virtues of quality, efficiency and practical ability for which the Polo is famed.

The new Polo Match is distinguished by a set of 15-inch ‘Charade’ alloy wheels and body-coloured bumper strips, door strips, door handles and wing mirrors inset into which are integrated indicators. At the front a pair of foglamps are set into the twin airdams.

The revisions continue to the Polo’s interior. A leather-trimmed steering wheel, gearknob and handbrake grip are joined by the option of either a six-disc CD autochanger or an iPod connection to allow access to your digital music library on the move. Practical additions include electric front windows, a split folding rear seat, height adjustment for the driver’s seat and a useful drawer under the passenger seat.

All these enhancements represent an £825 improvement in value.Powering the new Polo Match is a choice of engines ranging from the compact petrol 1.2-litre unit up to the flexible 1.4-litre TDI engine – the latter of which is placed in VED band ‘B’ equating to an annual tax bill of only £35.

It’s worth noting to our American readers that the Volkswagen Polo returns over 70 mpg (imperial gallon, which is a little larger than a U.S. gallon) in one of the diesel models, and no, that’s not a misprint. The Polo gets around 73 mpg on the highway, and does this while producing very low emissions. It will put any Toyota Prius to absolute shame in the fuel economy category.

Of course, there are many cars the size of the Polo sold in Europe whose diesel-powered versions get extraordinary fuel economy, and I’m offering up the VW Polo merely as an example – it is the one I got the press release on this morning. Whether it’s a VW or an Opel or a Nissan, these small diesel-powered cars would fill the needs of a lot of American motorists nicely.

It really begs the question: When will we see these cars in the States? The new CAFE requirements are now in place, so the question now is not so much if, but when. If the retail cost of gasoline keeps rising, it might be within 24 months. If gasoline settles in around $3.00 a gallon for unleaded regular, then it may be much longer. Up until recently, there was also the issue of making the diesels meet the emissions requirements here in the States, but it looks as if that will not be a problem going forward in the next few years as the manufacturers are making great strides in cleaning up the exhaust from their respective diesel engines.

With such great fuel mileage, it’s difficult to argue the viability of a car like the VW Polo as a commuter car. Many Americans commute long distances in their cars every day, alone, and don’t need a large car for that sort of drive. Something like the Polo might be perfect for their needs.

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News

Volvo Plans Large Cuts in U.S. Dealer Network

5 Comments 25 December 2007

By Brendan Moore

12.25.2007

Volvo has announced plans to considerably reduce its current dealer network of 355 retail stores.

The company plans to contact their unprofitable and/or marginal dealers in the coming months in order to discuss the surrender of their Volvo franchise rights. They also plan to lay off employees at Volvo Cars North America.

Volvo is getting squeezed in the U.S. market by the falling dollar (all Volvos are built in Europe using euro costs), a model lineup in need of refreshing, and last, but certainly not least, the declining new-vehicle market in the U.S. overall. None of these negative factors are expected to diminish in 2008; in fact, all are predicted to increase. Volvo sales are expected to keep falling in this type of scenario.

Volvo sold a peak of 139,037 cars in 2004 and should end up with around 106,000 units over the curb in 2007. Sales in 2008 will probably fall below the 100,000 mark and may conceivably drop below 90,000 if the dollar keeps falling and the overall new vehicle market plummets to 14.5 million because of a nationwide recession.

Regarding the planned dealer cuts, Automotive News, an auto industry publication, quoted Anne Belec, CEO of the U.S. sales arm of Volvo, as saying, “We have dealers losing money this year, last year and the year before. If they couldn’t make money two or three years ago, then they are going to really struggle going ahead. We want to talk with them.”

More from the same Automotive News article:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Belec expects 2008 sales to fall 10 to 15 percent from this year’s estimated 106,000 units. Volvo’s sales peaked at 139,067 in 2004 when the small S40 and V50 wagon arrived and the XC90 hit its stride. But they’ve been declining ever since. The small cars have been seen as overpriced, and the S60 sedan grew old. Even though an XC70 and V70 have debuted, Volvo expects sales to slip next year because it is basically walking away from the smaller cars.

In 2004, Volvo’s 350 franchise holders sold about 400 new vehicles each. If 2008 volume falls to the level Belec forecasts, sales per store would be about 260.

“Some retailers are not going to make it at these volume levels,” said Belec, a 45-year-old French-Canadian who began her career at Ford of Canada and was once general marketing manager at Lincoln Mercury division. “We have to help them craft a way out. This is a voluntary approach, but we have to have a plan in place.”

Belec said funds have been allocated for the program but declined to say how much or how they would be used. Neither would she say how many stores are targeted for closing but made clear that it is more than a handful.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Personally, I can’t see things looking up for Volvo anytime soon. The overall vehicle market will continue to be tough in the U.S., they’re not in a lot of the hot developing-nation markets, they don’t have any product stunners under wraps ready to spring on an adoring public and the dollar is going to be weak against the euro for quite sometime into the future. Which, by the way, is why all the European vehicle manufacturers are considering putting up production facilities in the U.S. now, but I don’t think Ford has any plans to move any Volvo production to the States anytime soon. So, a tough market environment for Volvo just seems as if it’s going to get tougher and tougher.

What to do, what to do if you’re Volvo? Well, nothing, really, except spend as little as possible until things like product, the foreign exchange rate and the overall market improve. The next few years might be a little hard on Volvo and its dealers but I don’t see any alternative at this point.

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News

Indian Luxury Segment Heats Up

2 Comments 25 December 2007

By Brendan Moore

12.25.2007

As we’ve noted before, the Indian auto market is red-hot, and that heat has now radiated out to the luxury segment. The luxury segment, which is referred to as the “super-luxury” part of the market in India has experienced approximately 26% growth in 2007 as Indian buyers of means flex their economic muscle. The Indian super-luxury market basically consists of Mercedes-Benz and BMW currently, and almost all of those sales are C-Class and 3-Series respectively, but that is set to change very shortly.

In 2008 Chrysler, Lexus, Renault, Alfa Romeo and Maserati are scheduled to start selling their luxury cars in India. But hold the phone, because now Nissan is also making noises about introducing their Infiniti brand to Indian buyers.

According to The Economic Times of India, Nissan Motor Director (marketing & sales) Neeraj Garg stated: “We are strongly considering the Infiniti range for the Indian market as there is immense potential for such luxury vehicles. Like all premium car makers we are also studying the growing market though we are yet to commission any market study to determine the right potential for such a brand.”

However, according to other sources within Nissan and the Indian press, the decision has already been made (but not publicly announced) to bring most of the Infiniti line into the Indian market next year in order for Nissan to have a presence in the growing luxury market.

The rumors are also rife in India of Volkswagen making a full-frontal assault on the Indian luxury market by offering its full Audi lineup as well as the Volkswagen Phaeton luxury sedan and the highest-trim Volkswagen Touareg. VW has promised that they will go after the Indian market with a vengeance and there is no reason to doubt their resolve at this point. They have dipped their toe in the luxury market with tiny numbers of the Audi A6 sold so far, but you can expect they’ll have a bigger presence in this segment going forward.

All in all, these are exciting times for the Indian auto enthusiast, and even more exciting times for the auto manufacturers in India, as they cannot help but salivate at the prospect of all the new buyers available to them in India going forward.

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Features

France‘s Long History of Executive Car Failure

8 Comments 24 December 2007

If at first you don’t succeed…

By Andy Bannister

12.24.2007

I had one of those head-turning moments the other day, when I saw a sleek and beautiful car I didn’t immediately recognise, a very long five-door with a coupé profile. Then it dawned on me I’d experienced a rare sighting of Citroën’s C6, the ultimate example of that noble tradition – big French cars that just don’t sell.

That’s not to say the C6 is a bad car, in fact probably quite the reverse. It’s an elegant vehicle, with a cossetting interior and ride, and is arguably Citroën’s most successful piece of large car styling for many years, harking back to the glory days when models like the DS and CX looked like spaceships compared to the boxy offering of other manufacturers.

It is just that for decades now French manufacturers have been stubbornly persevering in spite of overwhelming evidence that big cars from France simply don’t succeed with buyers. Depreciation as steep as Mont Blanc has frightened off all but the bravest customers.

In spite of this, Peugeot and Renault as well as Citroën still produce cars which in theory at least compete with the all-conquering Germans. Of course, President Nicolas Sarkozy needs some suitable home-built transport to whisk him to and from the Elysée Palace, but one look at the streets of Paris itself demonstrate most luxury car buyers have headed off to Audi, BMW or Mercedes showrooms in droves.

Wind back time more than 30 years to 1975 and Peugeot and Renault were both launching, for the first time in many years, new luxury cars. Thanks to a joint venture with Volvo to produce a new 2.7-litre (PRV) V6 engine (the self-same unit used in the ill-fated De Lorean sports car, no less), the two rival French makers were able to compete in a potentially rich new market.

Peugeot, purveyor of solid middle-class saloons like the 504, almost pulled it off with their first effort, the square-cut luxury 604, which still looks quite handsome today. Renault opted for a big five-door hatchback, the 30, which was rather more ordinary in appearance, and was soon undermined by the launch of a downmarket sister, the 20, which initially featured a small 1647cc engine in the 30’s body. Long-term, neither the 604 or the 30 were a great success, and mainly succeeded in hitting sales of Citroën’s CX.

A fourth French marque also dipped a toe in this part of the market and produced yet another spectacular failure. Talbot, the company created by Peugeot from the ruins of Chrysler’s European arm in 1979, committed corporate suicide with the launch the spectacularly unsuccessful Tagora model. This boxy executive car for the 1980s with its all-plastic interior sank without trace and helped take Talbot down with it.

Far from learning from these early setbacks, however, a succession of French luxury cars have regularly limped onto an unimpressed market right up until the present day.

Peugeot’s 604, having initially died without replacement, was belatedly succeeded by the incredibly bland and boring 605, which was popular with taxi drivers but few private buyers. Mercifully there was no 606, but Peugeot currently tops its range with the 607, which appears unfeasibly long by European standards and looks about as good a long-term investment as real estate in Afghanistan just at present.

In the 1990s Citroën used Peugeot’s near-invisible 605 as the basis for its rather more radical-looking luxury offering, the angular XM. Even its name celebrated failure, evoking as it did memories of the gloriously-unsuccessful Maserati-engined Citroën SM luxury coupé of the early 1970s. The XM sold for more than a decade and was the ultimate eccentric’s choice, making most sense in its very roomy wagon version, but is best remembered nowadays for poor reliability and for being almost impossible for its hapless owner to trade in without losing a small fortune.

For Renault, the poor reception accorded to the hatchback 30 back in the 1970s did not prevent it clinging to this concept to the present day. The 30’s successor, known as the 25, had a role to play in an abortive French attempt to seize a slice of the lucrative American market, through the ill-fated AMC-Renault tie-up. Ironically, having snapped up AMC it was Chrysler that would end up having to try and sell the Canadian-built offspring of this venture. This featured a Renault 25 body reworked as a stodgy sedan, and rejoiced in the name of Eagle Premier.

In Europe, meanwhile, the 25 was replaced by an equally bland hatchback for the 1990s, the Safrane, which true to form failed to make any impact on the market even after an emergency facelift intended to inject a bit of character. Renault then decided to take a very different tack with its two most recent offerings, which came to the market together in 2002.

One, the Renault Avantime, flopped so quickly it had the unusual distinction of making the Talbot Tagora look like a success by comparison. The Avantime was a brave, some might say foolhardy, attempt to answer a question no-one had ever posed – what would a 2-door luxury MPV coupé look like? The answer was like nothing else on earth, particularly around the upright rear window. Unfortunately for Renault, almost no-one on earth wanted to buy this brave attempt to break the executive car mould and it fizzled out after two years.

This would not have been so bad if the Safrane’s true successor, the Vel Satis, had been a success. Slightly less radically styled than the Avantime, this five-door hatchback, still on sale in some markets today, still manages to be one of the more peculiar sights on the road. It is particularly notable for its unusual frontal treatment, and its steeply-raked wrap-round rear window.

Now Renault is so close to Japanese partner Nissan it might do well to study the success of that company’s Infiniti division in designing desirable, upmarket cars and selling them from posh showrooms where buyers aren’t tripping over customers doing a deal on a 1.0-litre hatchback.

Meanwhile, if only Citroën could do something to prop up its used car prices, the C6 might have a lot going for it for those exclusivity-seekers who find there are just too many Bentley Continentals or Maserati Quattroportes on the road.

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