Force Reductions Slated at GM and Nissan

By Kevin Miller

07.31.2008

GM will eliminate approximately 5000 white-collar jobs, which equates to about fifteen percent of its workforce. This is yet another aspect of the automaker’s drive to raise liquidity by cutting around ten billion dollars in costs, which was slated to include reduction of costs by twenty percent through headcount reduction, benefit changes, and related savings. Additionally, salaries will be frozen this year and next, and bonuses for senior level managers have been suspended. GM’s headcount reductions will be achieved through normal attrition, early retirements, mutual separation programs and other separation tools.

Meanwhile, Nissan announced that they will be offering voluntary buyouts to Tennessee workers in their assembly plant in Smyrna and their powertrain plant in Decherd in an attempt to cut around 1200 positions. Technicians and salaried employees in those locations will be offered an opportunity to receive a lump sum of $100,000 or $125,000, depending on tenure, plus medical and car purchase benefits. Nissan employs about 5,500 hourly and salaried employees at its vehicle assembly plant in Smyrna, and about 1,100 hourly and salaried employees at its powertrain assembly plant in Decherd.

“We feel this program is a good opportunity for employees wanting to transition to another phase in life,” said Nissan’s Bill Krueger, Senior Vice President, Manufacturing, Purchasing, Supply Chain Management and Total Customer Satisfaction. “This will provide many with the financial means to take a step they otherwise might not have been able to take.”

Nissan cited rising fuel prices and economic downturn, which reduced demand for full-sized trucks and SUVs, and ever-increasing productivity at its plants, as the rationale for reducing its workforce. Cuts will not occur at Nissan’s manufacturing plant in Canton, MS.

Nissan’s cuts will span three years. Employees can elect now if they would like to participate in fiscal year 2008, 2009 or 2010. The election period for 2008 ends September 12. Employees also will have an opportunity to sign up again for the program in 2009 or 2010, although benefits will be reduced compared with levels available in 2008.

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Lessors bail out on the thirsty trucks

By Brendan Moore

07.30.2008

Chrysler has already stopped leasing any vehicles through Chrysler Credit, GMAC LLC, GM’s leasing arm, has halted leasing in Canada and is scaling back leasing in the U.S. and Ford has announced that they intend to make the lease terms on trucks and SUVs so onerous that no one will want to lease one.

Chase Auto Finance told Chrysler dealers that Chase will not be leasing any Chrysler vehicles in the near future, and Wells Fargo said they’re out of the vehicle leasing business as of July 9.

The culprit here is the fact that the value of used SUVs and pickup trucks has plummeted as gasoline has gotten more expensive.

This isn’t a problem for a lender but it is a HUGE problem for a lessor, the company that does the leasing. It’s a problem because the lessors get a large percentage of those SUVs and pickups back when the lease is up, and instead of, say, the 45% residual they calculated at the beginning of the lease, now the vehicle in question might be worth only 25%. They take it to auction, it goes across the block for the 25%, which is perhaps a few thousand dollars less than they expected when they wrote the lease, and now they’ve lost a lot money on the lease. Multiply that by a million vehicles and you see how you would have some problems.

Let me explain it just a little bit more.

Everyone started to figure out pretty quick in the last few months that the residuals on SUVs were way too high. Unfortunately, for the lessors, this was two years into a lease they already written for a term of 3 or 4 or 5 years. Consumers that had the leases have figured out the same thing about the residual values, and are not exercising the option to purchase their leased vehicle at the end of the lease term, and instead, are just giving back the car to the lessor when their lease is up. Suddenly the lessors are getting swamped with end-of-lease vehicles, which all have to be sold by them somehow. Since the banks and finance companies don’t have huge used-car lots (and the requisite dealer’s license) scattered all of the United States, those returned cars, which by this time are mostly SUVs and pickups, have to go to auction. So many of the same thing showing up at the wholesale auto auctions just depresses the values of those used vehicles even further, and causes huge shortfalls from the original stated residuals on these vehicles, which in turn, wiped out any profit the lessors had made on the front end. Lessors, whether they are banks or finance companies, are sustaining massive losses, and they are now getting out of the leasing business as quickly as possible.

This problem was further compounded by the prevalence of subsidized leasing, which is called subvented leasing in the retail auto finance business.

What is subvention, you might ask quizzically? When lessors subvent a lease, they typically artificially bump up the residual value of the vehicle leased, or, lower the lease finance rates, or, lower the FICO credit scores needed by the lessee in order to be approved for the lease. There was a lot of this activity going on in the past few years, and none of this subvention activity is helpful when the secondary market has already collapsed for the vehicle in question. But this is the situation that the lessors find themselves in; not only has the used car market collapsed for SUVs and pickups, the heavy subvention of these leases in the past is making things even worse for the lessors from a financial perspective.

Paradoxically, the same market factors that have made lessors of SUVs and pickups trucks very unhappy have made the lessors that have leased small, fuel-efficient cars to consumers the last few years deliriously happy. A car they might have calculated to be worth 45% after three years when they leased is now worth 60%. Of course, that’s if the lessee doesn’t exercise the purchase option at the end of the lease and the lessor gets it back. But if the lessor does get it back, they will have made much more money than they originally projected on the lease because the car is worth so much more money than originally forecasted.

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Autosavant was also interviewed on NPR’s Marketplace on this same subject – the interview was fairly substantial but the audio clips they used are brief. Nonetheless, if you want to hear those clips, go here and then here.

By Dennis Haak

07.30.2008

San Francisco Bay Area transportation officials have approved a plan to allow solo drivers in regular (non-hybrid) vehicles to use high-occupancy vehicle (HOV) lanes on 12 highways by paying a per-mile premium via an electronic in-car transponder.

The project would cost about $3.7 billion to implement and take decades to implement. Eventually, it would cover about two-thirds of the Bay Area’s 1,200 miles of freeway lanes. Officials expect that the project will eventually generate $6 billion in revenue by 2035, which would of course pay for itself as well as other transit initiatives. Of course, the backers of this plan are forgetting about the time value of money – investing $3.7 billion in 2010 at a modest 3.5% interest rate would be worth $8.8 billion in 2035. Increase the interest rate assumption to 4.0%, and the future value is $10.0 billion.

So, the economics of the plan may not be sound at face value, but of course it could have other benefits. Transportation officials feel that the carpool lanes are underutilized currently, and that people who were truly in a hurry to get to their destination once in a while would be willing to pay a premium of a few cents per mile to travel about 15 miles per hour faster (officials estimate that the carpool lanes will average 54 miles per hour and the non-carpool lanes will average 39 miles per hour by 2035). The plan is to introduce the pay-per-use tolls on the carpool lanes starting in the 2010-2011 timeframe with an initial cost of 20 to 60 cents per mile. By 2030, officials expect the per-mile charge to increase to $1 or more. Because the tolls would be collected electronically via an in-car transponder, it will be possible to charge different prices at different times of day. Charges would be higher, of course, during peak periods, but could theoretically be reset each minute depending on the road’s current conditions.

We’ve learned as a nation that building more highways, and even more lanes, rarely fixes traffic congestion. As soon as more capacity is added to popular routes, drivers who had been avoiding those routes to avoid congestion flock back to them, quickly clogging them up again.

Critics of this plan have called the carpool lanes “Lexus Lanes,” as they fear that the only people who will use them will be the rich (the folks driving Lexuses, although car-savvy readers of this site know that most Lexus models are not necessarily the vehicle that the filthy rich aspire to own). However, proponents of the plan point to studies that state that in toll lanes in Southern California, people of all income levels used the lanes, generally when they needed to get somewhere quickly. (Click here for a link to a PowerPoint summary of one study’s findings).

To me, the concept behind HOV/carpool lanes is a sound one; you’re rewarding people for sharing their car with another commuter with a faster commute. Many local and state governments also decided a few years ago to reward buyers of hybrid cars with access to the HOV lanes; encouraging hybrid sales is also an admirable goal in terms of environmental friendliness and reducing fuel consumption. Now, Northern California bureaucrats and politicians have decided to encourage further utilization of the unused capacity in the HOV lanes – to raise revenue (a favorite pasttime of many politicians) and to theoretically lower traffic volume on the non-”premium” section of the highway, and reducing wasted fuel from idling in traffic.

To give some perspective on how the proposed per-mile tolls stack up, the Pennsylvania Turnpike charges about 6.4 cents per mile, and the New Jersey Turnpike charges about 5.7 cents per mile during peak periods, and 4.3 cents per mile during off-peak periods. When we travel to visit family about once a month, we could take “free” roads that are a bit more direct to our destination, but include traffic lights and slower speed limits, or we could take the Pennsylvania Turnpike, and we often choose the turnpike, particularly if our young children are napping in the car, as the smooth, steady drive keeps them sleeping for longer periods of time, so the concept of paying a premium for a better experience isn’t foreign to those of us in the Northeast US accustomed to toll roads. However, the proposed rates for the Bay Area HOV lane access start between 5 and 12 times more than I’m paying for access to the Turnpike, and eventually will be 20 times more expensive. Even if I “drove a Lexus,” I’d be hesitant to pay, say, $25 each way on a 25-mile trip into the city for work, plus all of the other expenses associated with car ownership such as insurance, registration, maintenance, city parking, gasoline, repairs, etc.

It will be interesting to see studies over the next several years on the reasons that certain solo motorists chose to pay a fairly hefty premium per mile for the privilege of driving past congestion.

For more information about this initiative, click here to visit the Metropolitan Transportation Commission (MTC) website’s page on it.

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By Kevin Miller

07.29.2008

For several years, Saab has offered a 4 year/ 50,000 mile bumper-to-bumper warranty on its vehicles sold in the US, as well as free scheduled maintenance for 3 years/ 36,000 miles. These warranty and maintenance programs are fairly standard for premium vehicle lines sold in the US.

In early 2007, GM rolled out their 5 year, 100,000 mile extended powertrain warranty across all model lines sold in the US, including Saab. This extended powertrain warranty picked up where the 4/50 bumper-to-bumper warranty left off, and provided roadside assistance and courtesy transportation for the entire 5/100 term of the warranty. This warranty exceeded that offered by Saab’s competition.

For 2009, GM will not be providing the 5/100 extended powertrain warranty on Saab vehicles, which will instead revert to the prior 4/50 warranty. Saab dealers were informed of the change last week on Friday, and GM confirmed this change to the media yesterday. GM’s other premium US brands, including Cadillac and Hummer, are still slated to have the 5/100 extended powertrain warranty.

This announcement closely followed GM’s announcement earlier in the month declaring their intention to cut $10 billion in costs. With margins already thin on Swedish-built Saab vehicles, the generous warranty which is not matched by Saab’s competitors is a relatively transparent way to cut costs on those vehicles. A GM spokesperson indicated that buyers of premium import vehicles look for the basic warranty and free scheduled maintenance in that class of vehicle, leaving unsaid the fact that most buyers in that segment are not expecting a longer-term powertrain warranty.

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By Chris Haak

07.29.2008

Kia is in the news lately because it is introducing its new large midsize, three-row, V8-powered SUV, the Borrego, this summer. Meanwhile, seemingly out of nowhere, Kia has a fairly broad selection of SUVs and crossovers, especially considering the size of its lineup. While we at Autosavant patiently await our chance to put a 2009 Borrego through its paces, Kia provided us with a loaded Sportage 4×4 as temporary consolation.

Kia’s smallest CUV, or “cute ute,” the Sportage, is on its second generation. The original off-road capable (yet poorly designed and built) model was sold from 1995 until 2002, then the Sportage went on a hiatus for a few years, and was reborn in 2005 as a crossover, with – by all accounts – a better interior, more power, and more modern engineering than its predecessor.

The Sportage is available in either all wheel drive or front wheel drive, and with (depending upon trim level) a 2.0 liter four cylinder or a 2.7 liter V6. Four cylinder models can be had with a five-speed manual transmission, while the V6s only come with four-speed automatics. The model lineup consists of LX, LX V6, and EX V6. Standard features in all models include 16 inch alloy wheels, dual power mirrors, integrated roof rails, rear privacy glass, six-speaker AM/FM/CD stereo, air conditioning, power windows, power locks, cruise control, cloth seats, six airbags, four wheel disc brakes with ABS, and a tire pressure monitoring system. The EX model that I tested adds a power tilt/slide moonroof, V6 engine, four-speed automatic transmission, body color mirrors, fog lights, AM/FM/CD/MP3/cassette six-speaker stereo, remote keyless entry, trip computer, rear cargo cover/cover net, and leather wrapped steering wheel/shift knob. Finally, to top off my EX test model, it had four wheel drive and the Luxury Package, which includes color-keyed bumpers, leather seats and door panels, automatic headlamps, auto-dimming inside mirror with Homelink, and a CD changer with subwoofer.

Since their introduction, I’ve never been a fan of either the styling of the Sportage, or of its Hyundai Tucson cousin. It’s hard to pin down exactly what the problem is, but as I looked through some photos to begin writing this review, I had a “eureka” moment: most of the problem centers around the wheels and fenders; the body of the Sportage is too large for its meager 16-inch wheels, which makes a relatively compact vehicle look somewhat top-heavy. Also, the “muscular” fender flares (which are really just tacked on plastic cladding) don’t surround the entire wheel opening; instead, they stop when they reach the rear or front bumper (depending which wheel you’re looking at). The visual effect is that the fenders don’t surround the entire wheel opening, when in reality, the issue is just the appearance that the fender flares go straight front or back instead of around the wheels, and the bumpers fill in as fenders around almost half of each wheel opening. The dual exhaust outlets at the back of the Sportage are a somewhat attractive visual touch, as are the beefy integrated roof rails, and my test vehicle is far more attractive to my eyes than models that have different-colored bumpers or mirrors, but the overall look still does almost nothing for me.

Inside, the interior doesn’t scream “this is a value-oriented vehicle” at first glance, but it sort of does at first touch. The material covering the seating surfaces is allegedly leather (perforated, no less), but felt more like vinyl on the driver’s seat. I suspect that it was really some sort of leather, but certainly not of the “glove-soft” variety you’ll see other vehicles’ seats occasionally referred to. The front passenger seat ironically had smoother leather, so perhaps the cow who gave its life for the driver’s seat had a skin condition. There were a few nice touches, such as an auto dimming rearview mirror, reasonably convincing faux stainless steel surrounding the HVAC and audio controls on the center stack, a power tilt/slide moonroof, and a leather wrapped steering wheel. The lack of a center console was a big issue; it requires the driver to – gasp – keep both hands on the wheel, or to rest his right hand on the passenger seat (assuming that seat is empty, or the person sitting there doesn’t mind the intrusion).

Some details in the interior were ignored by Kia’s engineers; I’m not a nit-picker, but the huge, uncovered gap beneath the steering column (see the full photo gallery in the link at the bottom of this review) was wide enough for me to put a finger into the opening. Also, some of the junctions between different interior trim pieces could have been designed with better transitions, such as less-obvious seams and more consistent textures.

The top-end Sportage has a decent stereo; although I did not test its MP3 capability (or CD, or cassette tape capability), it tuned AM and FM radio stations well and was intuitive to operate. It also was equipped with a subwoofer that added some decent heft to the music I was listening to.

I’d be remiss if I didn’t mention the unique smell of the interior plastics. I’m quite certain that my test vehicle was quite clean and well-detailed by the fleet company when it was delivered to me, but the “new car smell” in the Sportage was somewhat more chemical-smelling and less pleasant than any other new car I’ve spent time with. Usually, you can smell the leather seats in a new car equipped with them, but all I was able to detect was the odor of plastic and/or chemicals. It wasn’t overpowering and only readily apparent when getting into the vehicle for the first time each day. Assuming you are in the market for such a vehicle, it’s safe to say that you will quickly realize whether the odor is something you can live with during your test drive or not, so don’t let my sensitive nose stand between you and a new Kia.

The 173-horsepower 2.7 liter V6 starts easily and is fairly smooth and quiet, at least at more pedestrian speeds. It’s really bringing a knife to a gunfight, though, as its 2.7 liters is smaller than its V6-powered competitors such as the Toyota RAV4 (which has a 3.5 liter V6 that pumps out nearly 100 more horsepower), and the four speed automatic that it’s coupled to doesn’t help matters. Sometimes, vehicles such as the Chevy Equinox with the 3.4 liter V6 or the Dodge Grand Caravan with the 3.8 liter V6, can overcome a less-powerful engine with an extra gear ratio or two, but the Sportage doesn’t have that benefit. The V6 doesn’t have a flat torque curve – it has a flat horsepower curve, and it seemingly reaches its peak around 2,000 RPMs, and just goes through the motions beyond that. Flooring the accelerator from a stop will give a brisk jump for the first few feet, followed by the “oh, crap, this thing is really underpowered” sensation for the next 11 seconds until it hits 60. Leaving the automatic in “drive” results in a smooth 1-2 shift, but one of the slowest ones I’ve experienced. It’s as if the transmission stops for a full second, thinks about what gear should be next, puts it in that gear, and resumes acceleration. The far-apart ratios also do their best to keep the engine out of its powerband with each shift. Fortunately, the Sportage has a standard manumatic feature that allows the driver to tap the gear selection up or down, which actually seems to shift more quickly than the transmission on its own is able to. The Sportage will upshift as it approaches the redline even in manual mode, and will not allow itself to bump against the rev limited, but we’re not talking about a sports car after all.

The power rack and pinion steering had decent feel for a sorta-truck, and the brakes seemed to grab well enough. The Sportage’s narrow track and tall-ish profile did make me tread very carefully on curvy roads. I never felt unsafe or unstable with it, but I also didn’t want to tempt fate either. At least I’d be pretty safe had I rolled it over, since it has six airbags and a five-star safety rating all around. (The government actually gives the Sportage four stars for a rollover rating, which is great for an SUV/CUV).

Fuel economy in mixed driving was 18.6 miles per gallon. That figure actually included very few highway miles, and was mostly done on back roads. According to the EPA, the Sportage should get 17 mpg in the city and 21 on the highway; in fact, the first day I had it, I had 20.1 miles per gallon appearing after a 27-mile trip. Still, for the relatively small size and uncompetitive engine power, mileage could be far better – for example, the much-larger, much more powerful 2009 Chevrolet Traverse is rated at 16/23 in AWD guise. By the way, the four cylinder Honda CR-V AWD is rated at 20/26 and the Toyota RAV4 AWD is rated at 20/25 with the four cylinder and 19/26 with the V6. The CR-V’s four cylinder produces 166 horsepower to the Sportage V6’s 173, so there’s not much benefit to buying the Kia just to get a V6.

In spite of losing some paper battles with its competitors such as the CR-V, the Sportage is significantly less expensive (over $3,500 cheaper than a CR-V and almost $5,000 cheaper than a four cylinder RAV4 according to TrueDelta, when factoring in rebates on the Kia), and includes a 10 year/100,000 mile limited powertrain warranty. I’d probably look pretty closely at a CR-V and RAV4 before committing to buy a Sportage, but from a pricing standpoint, it’s almost competitive with USED CR-Vs and RAV4s instead of new ones.

Not having a lot of familiarity with the suddenly-popular compact SUV/crossover segment, I wasn’t sure what to expect from the Sportage. What I found was a versatile vehicle that had enough space for my tall wife and me, plus enough room behind us for two car seats, in a package that offers a lot on paper, but needs some work in the powertrain and refinement departments. I’d probably buy a different vehicle if I was shopping in this segment, or wait for the next generation, as Kia has been improving its vehicles by leaps and bounds from generation to generation. I’d wager that the Borrego, in spite of competing in a completely different size and price class, improves greatly on many of the criticisms that I had of the Sportage’s attention to detail and powertrain.

For more images of the Kia Sportage 4×4 EX, click here.

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By Andy Bannister

07.28.2008

Fiat is hoping to consolidate its grip on the substantial Brazilian market with two new small locally-engineered models to replace its current ageing budget line-up (like this Palio 1.8R) over the next two years.

The move signals the huge importance of Brazil – soon to become its biggest single market – to Fiat Auto, and tacitly admits that previous attempts by the company to produce a global world car were not a great success.

Given its plethora of existing and forthcoming small models in Europe, the last thing you would imagine Fiat would need is yet more economy models for its line-up. However, the requirement to produce cheap, sturdy designs tailored to what local consumers in one of the world’s largest countries want, means this is just what the company intends to do.

Fiat’s current entry-level car in Brazil is the Mille version of the evergreen Uno, born in 1983, which, incredibly, is still in production in South America in a rather clumsily-facelifted version and sold at a low price.

It is also exported to a number of other key developing markets globally to help keep Fiat’s flag flying in the smallest price bracket.

The Italians have certainly got their investment back from the Uno, which was one of the iconic small hatchbacks of its era in Europe and a best-seller there for a decade.

Above the Uno in the company’s current Brazilian line-up sits Fiat’s last serious attempt at a “world car”, the 1996 Palio. This was specifically designed to be around the size of the company’s European Punto but more rugged and cheaper to build in emerging markets.

This strategy worked well in Brazil, where the Palio three-door and five-door hatchbacks – and their Siena saloon and Strada Pick-up derivatives – all enjoy big sales thanks to regular updates keeping them looking fresh.

The Palio family has been much less successful in other markets where Fiat had big ambitions for it, including China, India and Eastern Europe. The company has, however, left no stone unturned in its search for new countries to sell the car, even gaining an unlikely and politically incorrect assembly foothold in the Stalinist dictatorship of North Korea.

The Palio hatchback’s replacement, known as Project 326, should debut in Brazil in 2010, with the Uno replaced by a smaller model, Project 327, the following year.

Brazil’s market offers tax breaks to companies selling cars with engines under 1000cc, so the two new models will need to still compete in this class. As well as keeping old designs going way past their normal shelf-life on other markets, another long-established Brazilian peculiarity is to sell cars with engines which run on ethanol, and today most manufacturers offer flexible-fuel vehicles which can run on both ethanol and gasoline.

Fiat has been a big player in Brazil since it arrived in the mid 1970s with the 147, a locally-adapted version of the Italian Fiat 127 hatchback. Today the company has a more diversified range and expects to sell over 600,000 models in 2008 including modern European designs alongside the locally engineered best-sellers.

Volkswagen and GM (which sells mainly Opel-derived designs under the Chevrolet banner) are Fiat’s key competitors, but Ford is also strong and Renault, Peugeot and some Japanese makers are also present.

Brazilian cars are widely exported, particularly to other countries in South America, and a few come to Europe. It is not, however, expected the new models will be aimed at European consumers, with Fiat developing Zastava in Serbia as its low-cost production base on the continent, augmenting its long-established plants in Poland and Turkey.

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By Alex Ricciuti

07.28.2008

I pushed the start button and ‘That’s the way, uh-huh uh-huh, I like it’ blared from the radio. Several metal panels on the dash turned around and revealed themselves to be air vents. The car began to breathe. A knob arose from the transmission tunnel, awaiting my touch. Yes, indeed, I do like it.

That knob was the innovative rotary shift known as the JaguarDrive Selector. A simple knob used to engage the automatic transmission which is the easiest gear shifter you have yet to see. Unfortunately, it looks a little too much like the iDrive on a BMW, so, one must be careful or you may find yourself suddenly in neutral as you’re trying to change channels on the radio.

But that is really the worst thing you can say about the XF SV8. It is of such supple, delicate construction, the kind of classic car you always imagined a Jaguar to be. The kind of Jag Jags should have always been but often haven’t. If this is the car that is supposed to allow Jaguar to reclaim itself as a truly sexy, luxury brand then Jaguar may be on its way to accomplishing that feat.

The XF has a spot-on feline character. The variable-ratio power steering is reactive and light to the touch. The car’s grip is intense around bends but keeps the driver poised above it all. That’s due to Jaguar’s CATS adaptive-damping system where the dynamics on the road are sporty and tight but with a soft and silent ride that tip-toes effortlessly over rough patches. The suspension is soundly tuned, pitch-perfect, somewhere between notes of comfort and performance.

The supercharged version of the XF, called the SV8, also provides a fairly rousing purr from under the hood, far more than you really need to enjoy the qualities of this Jaguar. With its 4.2 liter V8 pumped up to 420 hp, it will take you and anyone else who happens to be along for the ride from 0-to-100 km/h in just 5.1 seconds. Fuel economy is spare enough, I guess, given the number of horses. 12,6 liters/100km in mixed driving, which can likely be credited to the slick aerodynamics since the XF needs to watch its diet, weighing in at 1964 kg, about 200kg more than a comparable BMW 5 series.

Now, let’s get to the good stuff. Sitting in this cockpit, you, well, just enjoy sitting there. Design is supreme and strikes the right stylistic balance between retro and modernist functionality as form. A wood finishing is seamlessly integrated with the metallic dashboard panel and fine leather seats. The interior design creates the most fitting tone and ambiance you can imagine. It’s like a set design in a Hitchcock thriller, it’s all mood and it defines the car. Sitting in the cockpit there is a certain air of classical elegance that takes you into the past and back again. Buyers even have a choice of American Walnut, Burl Walnut or Rich Oak. Now, with options like those you may feel like you’re decorating your living room. Well, this car does have a TV.

This Jaguar is a film noir – all desire and decadence. Women meet their lovers in this Jag. Yes, Jaguar has put the romance back in the automobile. You want classic chic? This car has a TV in the on-board computer display – that is; not on the back of the seats for your kids to watch. Because, this Jag is for adults only.

If you’re going to spend 62,000 dollars on a car, you should want one that gives you something more than a premium badge, a solid and powerful ride, and a luxurious feel. Don’t you? You want a car that’s a flirt — with you, with everyone around. You want adventurous and shameless decadence on display. You want…you want this car, don’t you?

Alex Ricciuti is a freelance writer and automotive journalist based in Zurich, Switzerland. He writes frequently for Automotive News Europe. He also blogs on all things automotive at eurocarguy.blogspot.com.

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Odds and Ends about Cars and the Car Business

By Brendan Moore

07.27.2008

HONDA announced their quarterly earnings on the 25th and those announced earnings came in above the market estimates, but Honda still lowered their 2008 outlook. Honda earnings for the quarter came in with an 8% rise, surprising most analysts. But Honda cut their sales forecast in the U.S. and worldwide by 1.4% each, citing rising costs for raw materials and a sickly U.S. consumer market. Honda could sell a lot more Civics in the U.S. if it had them to sell, thereby eliminating some of the expected sales losses from declines in sales of the Ridgeline and Pilot trucks, but Civic production is running flat out. There are no more Civics to be had for the short-term. The situation will be alleviated somewhat when the new Civic production line starts up in Indiana this fall, but those cars won’t start showing up on dealers’ lots until after January 2009. The outlook is for extra Fit production is even more constrained; every Fit sold in the U.S. is made overseas and production volume is maxed out. You can be certain that executives at the other auto companies in the U.S. feel just awful that Honda cannot make enough of two of the hottest-selling cars in the U.S. market.

GM is allowing U.S. employees to offer GM employee pricing to one non-employee until the end of July. The savings are pretty substantial for a lot of the vehicles in the GM lineup. Of course, it’s to clear out inventories, not because GM likes you so much, but whatever the reason, if you’re in the market for a GM car or truck, it might be just the ticket for you.

KIA is doing it’s best to be somebody in the States; the Kia Soul will be sold here in April 2009 and the Kia Coupe will be sold here in September 2009. Both vehicles are better than Kia’s bland current offerings by a factor of at least 5. The 5-door hatchback Soul looks a lot like its distant corporate cousin, the Scion xB, and comes with either a 1.6 liter or a 2.0 liter four-cylinder engine. The Coupe, based off the Koup Concept shown recently, will replace the current Spectra, and will spawn a sedan, which will show up before the Coupe, sometime in July 2009. Kia says they may change the name to something other than Spectra, but no word on what that might be if indeed it happens. Both vehicles were designed by Kia’s stylists in the U.S.

GAZ is apparently getting ready to sign a deal with GM to create a 1 billion dollar (USD) joint venture in Russia. The head of light vehicles at the Russian automaker let the cat out of the bag to a Reuters reporter last week, but GM has remained tight-lipped about any possible joint venture. It is well-known that GM has been on the prowl in Russia for a deal ever since Renault’s blockbuster deal with AvtoVAZ, the other Russian auto giant. In fact, GM was the frustrated suitor left behind when AvtoVAZ signed with Renault in a surprise move. GAZ is also very keen on such a tie-up, as it wants a big brother to protect it from the newly-muscular AvtoVAZ in the Russian market. The Reuters report said the joint venture will churn out 300,000 vehicles a year. The Russian auto market is expected to become the largest auto market in Europe next year as it will post 3 million sales this year to Germany’s 3.2 million sales, and is forecasted to blow by Germany in 2009. Just as in China, every Western automaker sees a chance for sales salvation in Russia, since sales are declining in their mature markets.

TATA had a few things to say at their recent shareholders meeting in Mumbai, India; the first was that demand for the $2500 (USD) Nano is expected to outpace supply considerably the first twelve months of production. The Nano will be launched in October 2008. The second was that Tata is considering building both an electric version of the car as well as a version that uses an engine that runs on compressed air. This engine was designed by a French technology firm and has been shown off to the press the last couple of years. The third thing was the fact that they have been in preliminary discussions with Chrysler LLC about a Chrysler-branded version of the Nano that may be offered with two different types of propulsion systems. They also mentioned to the shareholders that Tata Motors plans to raise $1.7 billion from three rights issues to help fund its acquisition of Jaguar and Land Rover, and gave reassurance that these issuances would not be delayed by a volatile market.

BMW stated that it sold 28.1% more cars in China during the first half of this year then the company sold in 2007. Sales for January to June came to 30,325 units, up from 23,667 units, with strong increases in 3-Series, 5-Series and MINI sales. The Chinese have recently discovered luxury cars and BMW is well-positioned to benefit from the new Chinese appetite for foreign luxury. BMW has a manufacturing venture with Brilliance Automobiles, the much-maligned Chinese manufacturer, to produce BMWs in China.

THERE was an interesting article in The New York Times this morning about the changes in the love affair between Americans and their cars. Regardless of whether you agree with the premise, it is an interesting read. The title of the piece is “Putting the Dream Car Out to Pasture”.

TOYOTA is planning to increase production of its Prius hybrid 70% in 2009, bringing worldwide production to approximately 480,000 units. The sizzling sales of the Prius in the U.S. would be much higher if dealers could get all the units they’re crying for; but Toyota cannot make any more. By juggling production at different plants next year, Toyota intends to meet the demands of the U.S. market a little better, and when the plant in Mississippi comes on line in 2010, the waiting times for the Prius should ease considerably. Toyota has a goal of selling at least 1 million hybrid vehicles annually by 2011, with most of those unit sales forecasted to take place in America.

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By Andy Bannister

07.26.2008

Some car designs were just born under an unlucky star, and none more so that the hapless bit of metal rejoicing in the name of the Austin Allegro.

This was a product of the late, unlamented British Leyland and first limped out of its factory in Longbridge, England, back in 1973. If you are American you won’t be familiar with the Allegro, which mercifully never made it across the Atlantic. The almost complete US failure of its predecessor, the Austin America, and its more conventional brother, the Austin Marina, saw to that.

Some 25 years after its demise, however, the Allegro still strikes a chord with the British public It recently came top of an internet poll to name the country’s worst-ever car. Yet, perversely, it also has a growing number of diehard fans to whom this most hated and unsuccessful of cars is the perfect quirky statement of individuality.

Launched with unjustified fanfare, the Allegro was meant to be the high-tech front-wheel-drive model to compete with the best Europe had to offer and be the pride of the modern British car industry. Even at first sight this looked a forlorn hope, for the car was saddled with a dumpy body, featuring a pinched-in nose and curved sides which defied attempts to improve it with a facelift.

It lacked a hatchback at the time most European contemporaries were gaining them, it was smaller inside than it predecessor, and it was mechanically unreliable. Worst of all it was thrown together by the couldn’t-care-less workforce of a company which was on strike more often than not as it careered headlong towards committing industrial suicide.

British Motor Corporation, one of the companies caught up in the disastrous British Leyland merger, wasn’t always a basket case, however. In fact its front-wheel-drive designs were years ahead of their time, notably the 1959 Mini and the 1963 1100, – the car which was so advanced that for a time it scared Ford UK witless and was Britain’s best-seller for years and even an export success.

Something went horribly amiss, however, by the time the Allegro finally made its appearance. British Leyland decided it needed a gimmick to make the new car memorable, and latched on to a designer doodle which became the “quartic” steering wheel, instantly dubbed square by the motoring press. It was a device guaranteed to make the car a laughing stock from day one.

Another remarkable foible was the rear screen’s tendency to “pop out” when the car was jacked up, dismaying many owners already suffering from a host of niggling faults. The car’s musically-inspired name quickly was changed to “All aggro” by the popular press, and the mud stuck.
Initially a two-door or four-door saloon, the Allegro later gained one of the most peculiar looking estate car bodies ever, with a swept-up tail and a ridiculously long single rear window. The car’s technically advanced but underdeveloped “hydragas” suspension struggled to cope with heavy loads, which didn’t help its chances.

One of my favourite Allegros ever was the limited-edition Equipe model sold in 1979 and pictured at the top of this piece in a typically ’70s ad style. This had the top-of-the-range 1750cc engine and weird body stripes which were meant to invoke the image of the popular Starsky and Hutch TV series earlier in the decade. It also featured a new and untried style of alloy wheel which turned out to be porous and led buyers to report constantly flat tyre. Like most Allegros the Equipe proved a challenge for the hapless dealerships to sell.

An even more bizarre variant was the Vanden Plas 1500, a “mini-limousine” by the people who provided upmarket Daimlers. An upright grille of outstandingly ugly proportions was grafted on to the car, which also featured a remarkable wood-and-leather interior. Most buyers (and there weren’t many) seemed to be retired colonels aged over 80.

Despite its obvious lack of sales appeal, British Leyland even cranked up a plant at Seneffe in Belgium to cope with an anticipated European demand which never happened. Instead, Belgian Allegros filtered back into Britain to make up for the gaps in supply caused by the endemic strikes tearing the UK industry apart in the 1970s. The Seneffe Allegros were also better built than their British counterparts, so in a strange way were quite sought after.

Italy also had its own locally-built version of the Allegro, known as the Innocenti Regent, with modifications to the nose, wheels, lights and interior to suit Italian conditions. This car was regarded with incredulity by Italian consumers who en masse refused to buy it, so the Regent is now one of the very rarest Allegro variants.

Over the years the car was doggedly improved – the square wheel being quietly dropped after a year or two – and by the end of its surprisingly long career (in 1983) it had sold a respectable 642,000 – way below its predecessor, however. During the Allegro’s time the state-owned company’s market share plummeted like its reputation, never to recover.

Today, as well as a being an incomparable testament to industrial and design failure, surviving Allegros are sought after in a way they never were when new. To some buyers, including quite a few young people, it’s so uncool it’s cool.

British Leyland managed some more entries in the Worst Car top ten, incidentally. Just behind the Allegro came the Morris Ital (a last-gasp facelifted version of the aforementioned Austin Marina), and a good number of votes also went to the resolutely wedge-shaped BL Princess. The only model seriously sold in North America to make the top ten was the Triumph TR7 although it got off lightly, securing only 2 per cent of the public vote (the Allegro got a massive 24 per cent).

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By Chris Haak

07.26.2008

If you want to keep a low profile and not attract attention, the Challenger is not the car for you. If conservation of natural resources is a priority, there are far better choices than the Challenger. If your needs require a spacious interior with easy access to all seating positions, move along to the next review.

That being said, if you enjoy discussing your car with strangers (and getting thumbs-up signs and waves from people of all walks of life), if you put a premium on performance over efficiency, and if you will usually only use the two front seats, the Dodge Challenger SRT8 might be just what you need. Especially when the car is Hemi Orange.

After having driven a Challenger SRT8 for a long weekend, courtesy of Chrysler, it will be hard to forget some memorable moments. The afternoon the car arrived, our neighbor asked my wife where I got a Challenger, saying that he had been looking for one at local dealers to check out, but couldn’t find one anywhere. He also insisted on a ride, which I gave him later that evening. Following that, I took it to the grocery store. As I was locking the car, a woman in her late-40s said, “that’s a beautiful car.” On my way home from the store, I had the windows down and was at a traffic light in town, and a man across the street yelled, “Yo man, that’s a TIGHT ride!” Two days later, en route to my parents’ house, a man in a minivan followed me from their town square to their house to ask about the car. Later that afternoon, a man actually parked his car across the street and rang my parents’ doorbell just to talk about the car. Several motorcyclists gave me the hand-down wave they usually reserve for fellow bikers when they encountered me traveling in the opposite direction. The man from the fleet vendor who dropped off the car did warn my wife people would stop us to ask about it – he was right.

So, the Challenger has the ability, at least as a new model, to make you feel like a B-list or C-list celebrity. To me, that beats the anonymity I usually experience in an Accord, or even worse – the anonymity that I’m experiencing this week testing a Kia Sportage.

The Challenger is obviously an interesting vehicle to look at. Without having a 1970 Challenger on hand for reference, its exterior looks almost like it leapt right out of the early 1970s, but was lowered a few inches, updated for modern times with gigantic 20 inch aluminum wheels and body colored, integrated bumpers. Comparing some dimensions between the 1970 and 2008 models, the 1970 model is far lower, but also wider. The 2008 model stays true to the 1970 model’s overall styling theme, with the shape of its rear quarter window and upturned character line aft of the doors, but has a shorter greenhouse (plus a fixed B-pillar for side impact and structural rigidity reasons), along with some added aero tricks such as a flat black chin spoiler and tasteful flat black decklid spoiler, which, according to Chrysler, allow the car to keep its stability at triple digit speeds. It’s interesting how the car appears to sit so low to the ground, but is actually quite tall. A very cool retro touch is the chrome gas cap, which looks very much right out of the 1970s, but functionally is just a standard fuel filler door, hiding a standard plastic screw-on gas cap. By the way, premium unleaded is recommended.

Inside, it’s a different story. You can tell you’re not in 1970 the minute you open the door. Actually, before you open the door, as you begin to lift the handle, the indexed window drops down a quarter inch to make it easier for the doors to open, yet allow an airtight seal once the door is closed. The front seats are well-bolstered and very comfortable, as long as you aren’t of very large stature and don’t mind being hugged by your seat, both on your legs and your back. My wife found the front passenger seat uncomfortable (she’s slender, too), but I spent a lot more time in the car than she did, and I had no issues with seat comfort. The seats are covered by Alcantara (synthetic suede) on the seating surfaces, and with leather on the bolsters and headrests. Alcantara also covers the door panel inserts. The dashboard itself is soft to the touch, although its texture and dark charcoal appearance are somewhat low-grade. There is carbon fiber-looking plastic surrounding the center stack (HVAC and audio/navigation controls) to lend a somewhat sporty appearance, and chrome plated plastic can be found in the area around the gearshift lever and on the door handles, as well as surrounding the gauges. It’s kind of disappointing that Chrysler did not give the interior as much personality as the car’s exterior. Although many parts are shared with the Challenger’s LX platform mates, the dash is a unique design, and could have been much more interestingly designed.

The Challenger has standard keyless pushbutton start, allowing you to start and operate the car with the key fob in your pocket, but does not have a key-free/fob-free way to enter the car as some competitors such as Toyota and Nissan have. Instead, you have to unlock the doors the semi-old-fashioned way (clicking a button on the remote fob), then stuff the key back into your pocket. Once settled into the car, the startup routine is as simple as holding your foot on the brake pedal and tapping the Start/Stop button. With that, the 6.1 liter Hemi V8 fires into action, and settles into a deep, lusty bass rumble. I’m sure the kids up the street from me were scared every time I started it.

The steering wheel is right out of the Chrysler parts bin (aside from some detail differences, it’s the same as the one in the Magnum, Charger, and 300C), but has a carbon fiber-like appearance in the top section of leather. That appearance is carried over onto the leather wrap on the gearshift knob. Once the car is in gear, forward visibility is fairly good (though the retro-length hood is quite a bit longer than the hoods of most other new cars. Lateral visibility is also decent, but the huge C-pillars and short backlight create real difficulties in backing up safely. Since the navigation screen/head unit is apparently the same one available in the Chrysler Town & Country, and that same unit can work with a backup camera in the T&C, maybe it wouldn’t be a bad idea for Chrysler to hide a small camera somewhere in the rear of the car to eliminate blind areas when backing up the car.

The interior is fairly roomy if you’re only using the front seats. The back seat is adequately wide, but legroom suffers significantly relative to the 300C and Charger, because the Challenger’s wheelbase is four inches shorter (and consequently rear seat legroom is eight inches shorter than it is in the Charger. Trying to squeeze to car seats into the back seat would have been significantly easier if there were another eight inches of clearance, although I’m fully aware that the car’s outstanding proportions would have been ruined with the sedan’s longer wheelbase. We did manage to get the seats into the car, although getting the little ones into those seats was another challenge (is that why they call the car the ‘Challenger’?) To put a sleeping seven month old into his rear-facing seat, I had to thread him between the front seats, onto his spot. Surprisingly, he stayed asleep, and didn’t really mind riding back there. When tilting the front seatbacks forward for rear seat access, they do not slide forward automatically, and the seatback angle is reset to the most-upright position when the seat is returned to upright. Although those front seats are large, comfortable, and supportive, the tilt/slide mechanism really could have used some improvement; the 1993 Oldsmobile Achieva SCX I owned during my college years didn’t even suffer the same annoyance.

Acceleration with a 425 horsepower, 420 lb-ft, 6.1 liter Hemi is, of course, instantaneous. The powerful engine does a great job of disguising the car’s fairly considerable mass, because so many horsepower are working toward the cause of moving the big guy. Published road tests for the Challenger SRT8 show fairly consistent 0-60 times of 4.7 seconds and a quarter mile of about 13 seconds at about 109 miles per hour. I wasn’t brave enough (or couldn’t find a safe spot to try) the quarter mile acceleration test, but the car has a performance mode on the digital instrument cluster that will give 0-60, 1/8 mile, 1/4 mile, 60-0 braking, peak g-forces, and more. The best 0-60 I could manage was 5.0 flat, but traction control stayed on, I had a passenger, and I didn’t power brake (release brake, depress gas, and go). Oh, and it was slightly downhill. I’ve heard that the performance metrics on these built-in computers aren’t very accurate compared to the GPS-verified used by the mainstream automotive media, so I’m taking that number with a grain of salt anyway, but it is a pretty cool thing to have.

The Challenger SRT8 comes with outstanding Brembo brakes that bring the fun to a brisk halt if called upon. Having some quick, yet safe, fun with the car on a back road with tight curves, the brakes never showed any sign of fade or fatigue. The red calipers also add a bit more visual spice to the exterior. The only problem with great brakes is that they generally produce more brake dust marring the aluminum wheels; in spite of most of my time with the Challenger being on the highway with my family, in about 400 miles with the car, the wheels started to get pretty dirty.

Helping not only the aforementioned braking, but also steering, were the huge 20 inch, 45-series Goodyear Eagle F1 Supercar tires (255/45ZR-20 in the rear; 245/45ZR-20 in the front). The tires are considered “three season” (summer) tires, and are grippier in dry conditions than the standard all-season rubber, but completely inappropriate in winter (as if a 425-horsepower rear wheel drive muscle car would otherwise be appropriate in the snow).

The exhaust note is absolutely intoxicating from about 3,500 RPMs to 5,000, and I found myself tempted to manually keep the car in a lower gear than necessary just to hear the roar of the big V8. My wife reported (via frequent scolding) that the exhaust that sounded so great to me from the driver’s seat was a bit booming in the back seat where our sons were riding. Although I spent most of my lower-speed driving with the windows down and sunroof open, the car is actually quite sedate with everything closed. When the boys were sleeping for a long stretch, I referred to the car as a “pussy cat” more than once. Driven gently, the Challenger SRT8 emits just a serene purr from the engine compartment that sounded not unlike the more pedestrian 5.7 liter Hemi in the Chrysler 300C that I tested a few months ago. But, kick the five-speed automatic down a few gears, and it barks with a ferocity seen in few modern vehicles. It was almost a Jekyll-and-Hyde dichotomy, completely under the control of my right foot. My only complaint about the driving experience is that the automatic does not hold your gear choice up to the rev limited when in AutoStick (manual) mode; instead, it holds on until the redline, then upshifts. So, if you know a corner is coming soon and want to keep the car in a lower gear to blast out of the corner, you’ll have to either back off the gas a bit so the car doesn’t upshift itself, or downshift mid-corner (a potentially risky move). Or, you could wait for the 2009 model year and buy a six-speed manual, which will cost about $1,000 extra, but will be the beefy Tremec 6060 used in the 600 horsepower Viper SRT10.

Unsurprisingly, I barely turned the stereo on, but it’s an impressive one. It is a 13-speaker Kicker system with a 322-watt amplifier and 200-watt subwoofer that resides on the left side of the trunk. As with the V8 underhood, the stereo had an overabundance of power. The trunk was also quite spacious, leaving plenty of space to carry as much as two empty-nesters (who could afford to buy and feed this car) would need for a weeklong vacation. As a bonus, the lid was supported by gas shocks and not the cheaper gooseneck hinges found in some cars; as a result, there is no risk that the contents of the trunk will be crushed when closing the lid.

As mentioned in the opening sentences of this review, if you’re looking for fuel economy, look elsewhere. The EPA rates the Challenger SRT8 at 13 city/18 highway. The 6.1 liter SRT-massaged version of Chrysler’s Hemi V8 does not include variable displacement technology to shut down four of the cylinders under light load condition, which really helped the 300C AWD on the highway. However, gentle driving and setting the cruise control at 72 miles per hour on the highway yielded a relatively impressive 19.2 miles per gallon according to the car. However, it also cost me $46 to bring the tank back up to almost-full of premium after about 200 miles, including that aforementioned “economical” highway trip. Overall, my mileage was about 17 miles per gallon, which came from about 80% highway and 20% city mileage. That’s about what I got from the 300C AWD, but the Challenger had the luxury of far more highway miles than did the 300C.

The base price for the 2008 Challenger SRT8 is $37,320. My test vehicle included every available option, including the (mandatory) gas guzzler tax ($2,100), power sunroof ($950), MyGIG system with navigation ($890), and summer tires ($50). Chrysler actually does not charge a destination fee, which is impressive since many manufacturers are actually increasing their destination charges in this time of high fuel prices. The final tally was $41,310 – if you can get a dealer to sell one to you for MSRP. The original party line was that the entire 2008 production run of 6,400 cars was sold out, but as of this writing, there were stories that some Dodge dealers had multiple examples in stock, so if you want a 2008 model, do some research and shopping around. The advantage of a 2009 model will be the availability of an optional six-speed manual transmission with pistol grip shifter, plus a mechanical limited slip differential (the 2008 model has an electronic limited slip differential, which isn’t quite the same). Aside from fuel economy, pricing, and safety (it has standard stability control and side airbags, plus seatbelt pretensioners and seatbelt force limiters), the only other consumer-related item to mention is that the SRT models do NOT include Chrysler’s lifetime powertrain warranty. Instead, the powertrain falls under the same 3 year/36,000 mile basic limited warranty that covers the rest of the car.

It really was an awesome feeling to spend a long weekend with the Challenger. It was one of the rare cars that was very difficult for me to give back, although it would have probably cost me half of an extra car payment’s worth of money to fuel the car often enough for daily driving. But the feeling of having seemingly limitless power underfoot, plus the feeling that the orange car you’re driving around is making other people smile at you, really has a lot of value for some folks. My empty nester, baby boomer father loved the Challenger, and he’s a classic car/modern truck guy at heart. As Ferris Bueller memorably said in 1986, “It is so choice. If you have the means, I highly recommend picking one up.” Truer words have not been spoken. The Challenger is a sweet ride, and I feel privileged to have had a chance to enjoy it firsthand.

Click here for more photos of the 2008 Dodge Challenger SRT8.

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