Check Your Mirrors

Odds and Ends About Cars and the Car Business

By Brendan Moore

05.01.2008

Well, it has been a long time since I did one of these; hopefully I’ll remember the succinct style that proved successful before. Herewith, a quick overview of some small but noteworthy things happening in the world of cars.

DAIMLER kept almost 20% of Chrysler when it paid Cerberus to tow the rest away in 2007. That 19.9% stake was valued on the books at that time at $2.18 billion USD. In what has to be an embarrassment to Chrysler LLC, Daimler has now written the value of that stake down to $851.2 million USD, owing to Chrysler’s poor financial performance and a subsequent decline in its value. Chrysler, for it’s part, sputtered a little bit about how international accounting methods are very different from American methods, and stated that Chrysler has “enjoyed positive operating earnings” ever since the Cerberus acquisition.

TOYOTA has gone on record as warning owners of its Prius hybrids that replacing the factory battery pack with a lithium-ion battery pack from A123System may void the factory warranty. The aftermarket battery pack is designed to boost the all-electric capability of the car using a plug-in platform that may let users realize a potential 100 mpg. Says Bill Kwong, Toyota’s spokesperson in Torrance, CA, “We don’t recommend customers modify our vehicles. It wouldn’t automatically invalidate the warranty, but if they put this in and it fries the electrical system, for example, obviously that would not be covered.” A123System is the same supplier that is the acknowledged vendor the future Chevrolet Volt plug-in hybrid and the TH!NK electric vehicles.

HONDA has agreed to supply 100 Honda Civic Hybrids to British Airways fleet services for use by BA employees. “Environmental performance was the key consideration in British Airways’ decision to invest in the new fleet,” said Gary Meades, environmental manager, British Airways. “The hybrid technology not only meets the highest environmental targets for vehicle emissions but will also deliver greater fuel efficiency.” It is anticipated that each employee driving a Honda Civic will reduce their CO2 emissions by 33% in every year of use. The BA deal is the second-largest hybrid fleet deal in the UK; the largest was the purchase of 400 Prius models by Sainsbury earlier in 2008.

SATURN boss Jill Lajdziak said last week at an evening event for bloggers that, knowing what she knows now, she would not have shut down Oldsmobile. Ms. Lajdziak stated that, armed with current hindsight, that the decision to close Oldsmobile “probably didn’t result in a gain for GM, but a net loss in customers.” The reason the subject of Oldsmobile came up during a Saturn media event was that the head of Saturn was asked whether Saturn considered picking up the last-generation Aurora at the time of Oldsmobile’s death and re-branding it as a Saturn. Ms. Lajdziak replied that no consideration was given to that move at the time, even though she though said that the last-generation Aurora was a fine car among its then-contemporary competition. Ms. Lajdziak also spoke at length about the challenge of changing Saturn’s image as more and more Opel-based product shows up on Saturn lots.

RENAULT says that a Gulf state is very interested in their environmentally friendly electric car project. Renault CEO Carlos Ghosn would not disclose the name of the Middle Eastern country, but stated in a news conference that Renault was in serious discussions with that country to launch an EV. Renault has plans to put a production EV on the road by 2010, and Ghosn says that with oil around $120 USD a barrel, the business case for an electric is more or less a walk in the park in terms of value justification. According to Thomson Financial, Ghosn said “”The electric car of the past was huge with a big battery … Today [they have] very attractive designs. [They are] sexy cars with attractive designs with no emissions. An electric car has to be at normal cost or lower … [the] battery and electric charge has to be cheaper than gasoline. At 120 dollars per barrel, it will be very easy.” Renault already has an agreement on developing electric cars in Israel, and is in talks with several other countries, such as Denmark.

DANICA PATRICK, fresh off her IndyCar win two weeks ago, has now stated that she would like to test for F1 if possible. “Every driver would love to drive a Formula One car at some point in their life, so yeah,” she told Autosport. “I don’t think there’s anything wrong with a real, proper test. I was asked to do a demonstration lap at Indy in 2005, and I said, ‘No way. You’re making me a show. That’s embarrassing.’ But I would say that a real test is absolutely something I would do.” The lure of having a competent female driver would be huge for a couple of teams, so now that she’s made her desire known, here’s betting she gets her test soon.

FORD has announced that it has appointed a new Managing Director of Ford India. The new man is Michael Boneham, formerly the Executive Director of Operation for Ford India. The previous Managing Director, Arvid Mathew, is being given a position with Ford in Detroit in their Global Product Development Team. Ford has a total investment plan of approximately $875 million USD for India and has very high hopes for market expansion in the next five years. Ford intends to have production capacity of around 300,000 units by 2013, as well as plans for an engine plant with capacity of 250,000 units annually.

NISSAN is going to sell the Cube in the U.S., and apparently, Europe as well. Nissan has confirmed that the future-generation Cube will be sold in Europe in 2010. The Cube has a 105 bhp gasoline engine and a CVT engine and seats five within it’s distinctive box shape. There is a seven-seat model sold in Japan, and it is an open secret that an electric version is being strongly considered. The Cube is based on the Nissan Micra platform, and is cheap to produce, thereby making it a profitable (and desirable) car for Nissan to sell everywhere they can. Expect to see one on a road near you in the near future.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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4 Comments

  1. Saturn’s Jill L. is wrong about closing Oldsmobile. If anything, GM still has too many brands, too much overlap, too much cannbalism, and too much of a lack of brand focus.

    Losing Oldsmobile alone didn’t cause GM to lose buyers; it was decades of lousy-engineered cars built by people who didn’t care, styled by blind people.

    Corporate arrogance –starting with creating Saturn exactly when Chevy also needed the resources– also helped GM lose, lose, lose.

    GM needs to grow a spine and start slashing the product portfolio. It needs to resist the siren song of badge-engineering. But, apparently, their dealers are the Borg and resistance IS futile.

    It’s too expensive and time-consuming to kill off brands and buy out franchises, but GM can limit each brand to 2 or 3 “core” products and wean itself of off cannibalistic practices, such as having four –count ’em, four– mostly identical crossovers.

    Astra and Cobalt are built off the same platform, but look and feel different enough that they can co-exist… GM needs much more of this kind of differentiation, even while consolidating platforms globally.

  2. I know that aftermarket battery pack for the Prius has been crash-tested and passed with flying colors. I think it goes in the spare tire wheelwell. You have to wonder how many people will take the plunge and have one installed.

  3. I think GM should not have killed off Oldsmobile, either. Further, once they did, Saturn should have taken the Intrigue/Aurora platform and used it, because it would have been a better car than what they were selling then.

  4. I have a somewhat different opinion, kind of a blend bewtween the other two. I think GM should have killed off Oldsmobile, AND that the Aurora should have definitely been moved over to Saturn,

    I also think Buick should have been killed off as well, at least in the U.S. Let it prosper in China.

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