Check Your Mirrors
Odds and Ends about Cars and the Car Business
By Brendan Moore
Sirius and XM are getting closer to the merger initiated last year as an important federal regulator signaled that he was agreeable to the proposed merger. FCC Chairman Kevin Martin confirmed that he would support the deal and stock prices at both companies rose accordingly. Antitrust regulators at the Justice Department have already approved the merger in March of this year, saying that they believe there is no antitrust concern since satellite radio has plenty of competition in the marketplace from iPods, MP3 players, traditional and HD radio, audio on mobile phones, etc. The approval from Martin was contingent on some conditions laid down by the FTC; those conditions would require a pledge to make 24 radio channels available for noncommercial and minority programming, an agreement to cap prices, provide interoperable radios and offer programming on an “a la carte” basis. XM has about 9.3 million subscribers, versus 8.6 million for Sirius.
Auto dealers are in crisis mode concerning inventories of small fuel-efficient cars. Almost every dealer is sold out of new cars that fit that description, and the pressure to keep the used car lot stocked with late-model cars that possess good fuel economy is intense. This has led to bidding wars at the wholesale auctions, and fat trade-in values for consumers when they’re trading in a small car. Conversely, the big iron like SUVs and pickups goes unwanted and unloved on the new car lots as consumers continue to react to $4.00 a gallon gasoline. The wholesale auctions present an even more damning arena for the formerly high-flying SUV and pickup segment, with used car managers from every dealership making the sign of the cross and hurrying away when an SUV or pickup truck comes across the block.
GM says (June 16th) they’re feeling pretty confident about the Chevrolet Volt meeting all of its performance goals and its promised 2010 launch. Bob Lutz says they are also close to naming the battery supplier for the EV that will carry the green flag for GM in the near future. “I would say there’s almost no reasonable doubt in our minds anymore that this is going to work,” said Lutz, who heads vehicle development for GM. Lutz stated that the Volt prototypes are routinely exceeding the desired battery performance parameters, and under some adverse conditions in terms of speed, load, etc.
Skoda says that despite all the rumors of their new SUV being introduced at the London Auto Show next month, the Skoda Yeti will be introduced next year. According to an article in Automotive News, “the SUV will be built at Skoda’s Kvasiny site alongside the large Superb and the Roomster medium minivan. The two Kvasiny assembly lines have a total production capacity of 200,000 units. Skoda will target central Europe with its Yeti and is expected to sell around 50,000 units annually. “It will be positioned to fill the gap of both SUV and MPV (minivan) that are not part of the Skoda product line-up,” said Walt Madeira, manager of European vehicle sales forecasts at the UK office of CSM Worldwide. “Skoda must try to get a piece of the pie as SUV sales are very lucrative.” Eckhard Scholz, Skoda board member in charge of technical development, said in March the car will come in four-wheel drive and front-wheel drive-only variants: “I expect most customers will have the four-wheel drive variant.” I would say that is a pretty safe bet, Eckhard. For those of you that are unfamiliar with Skoda’s recent successes in the marketplace, suffice it to say that they have not put a foot down wrong the last few years, and are transforming themselves into quite a European powerhouse. Skoda is an important part of parent company VW’s plan for world domination by 2020.
Toyota is actively considering converting some truck plants in the U.S. to car production, which should not be a surprise to anyone after the last month of news coverage concerning changing consumer tastes regarding small cars. Mighty Toyota is not immune to those market forces; sales of the full-size Toyota Tundra fell 31.5% in last month compared to sales in May 2007. “Because of the declining sales of the Tundra and SUVs and the resulting decrease in the rate of operation of the lines producing those vehicles in the United States, we may consider a change in structure to enhance the rate of operation,” stated Toyota Executive Vice President Takeshi Uchiyamada. May also saw two Toyota cars, the Corolla and the Camry (along with two Hondas), post some gaudy sales numbers and dislodge the Ford F-150 pickup truck from its usual perch as best-selling vehicle every month, a spot the Ford pickup has held every month since 1991.
Chrysler LLC is probably going to get their upcoming Hornet from Nissan. Nissan will use the Nissan Versa platform to build the sub-compact in Oppama, Japan. The Hornet will be built in 2009 and retail as a 2010 model. Chrysler hopes the Hornet will compete with cars like the Versa, Honda Fit, MINI, VW Rabbit, etc. Chrysler is desperate for some presence in the segment, since the company is extremely weighted towards large trucks and SUVs, and many of their best selling cars are also fairly thirsty. The Hornet concept was originally shown in 2006, caused a stir, and has been waiting for someone to wave a magic wand over it since. It appears that events have now pushed production of the car onto the fast track.
SAIC Motor plans to start production again at its British plant in August making MG-brand sports cars, its president, Chen Hong, said recently. The plant is located in Longbridge and has been idle since last year, when the limited production was pinched off to nothing. Nanjing, the original buyer of MG, was itself acquired by SAIC, another Chinese car company, and as little as three months ago, SAIC was dropping broad hints that they would abandon the Longbridge production site. When Nanjing originally announced the reopening of the famous Longbridge plant, hopes were high that the Chinese company would employ a considerable amount of the former workers, but those hopes were quickly dashed after Nanjing stated that only the MG TF would be produced there. Now SAIC is circling around to the original Nanjing plan. Strangely enough, Nanjing had also planned to produce the MG TF in the small town of Ardmore, Oklahoma in the United States. That early announcement, made quickly after their purchase of MG Rover, was met with head-scratching on both sides of the Atlantic. And after that early announcement, nothing much was ever heard about Ardmore, Oklahoma again, even though Nanjing said they had to make MGs in the United States since they were going to sell so many of them in the United States after the triumphant return of the MG octagon to these shores. SAIC will retail the British-made MG TF sports cars in the UK through approximately 40 dealers, starting at the end of August or in early September, Hong said at a shareholders’ meeting. We shall just have to wait and see if they are able to make that timeline. I have my doubts.
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