Check Your Mirrors

Odds and ends about cars and the car business

By Brendan Moore

07.07.2008

High gas prices are causing Americans to buy less gas, and that’s one of the reasons that gas stations are going out of business at an unprecedented clip, according to an article in The Wall Street Journal. It almost seems counter-intuitive that gas stations would be losing money as gasoline goes ever higher in price, but that’s exactly what is happening nationwide. Almost 3000 stations have closed just in the last 12 months, and industry analysts say that many more will follow. What does it mean for consumers? Less stations mean less convenience and less competition, which will probably result in higher prices on average that what prices would have been with more stations open.


VW has rolled out a 235 mpg car for the press that was engineered and built six years ago with a projected launch date of 2012. The car is the One-Liter Car concept vehicle, and it is called that by VW because it will travel 100 kilometers on a single liter of gasoline. The 2012 date was arrived at as a result of the expectation that it would be that long until the carbon fiber that the super-light car body is made of would be cheap enough for the car to make sense from an economical standpoint. Well, now, gasoline has jumped up in price and the cost of carbon fiber has dropped, and VW says that a 2010 launch is more like it. The car meets all regulations and crash tests in Europe, with ABS brakes, airbags, stability control and built-in crash tubes, but no word on a US debut. It is reported that the car will use a two-cylinder turbo-diesel engine.

Chrysler could run out of money in the second half of 2009 if current market conditions stay the same or get worse, according to some industry-watchers. Chrysler does not have the same ability to raise money as Ford and GM, two public companies, and some analysts believe this may hobble the company if more cash is needed in their turnaround efforts next year. It’s worth pointing out, however, that since Chrysler LLC is a private company controlled by the secretive Cerberus investment entity, these guys are merely guessing because no one outside of Chrysler and Cerberus knows just how much cash Chrysler has on hand at any given time.


Chamco Auto is done; stick a fork in them. In addition to all of its other troubles, the wanna-be importer just lost its Chinese supplier of vehicles. Chinese automaker Hebei Zhongxing Automobile Co. was supposed to deliver large numbers of an inexpensive SUV and pickup truck to Chamco for sale in the US, but Chamco has been torn asunder by infighting at the company, lawsuits and counter-lawsuits, and last, but not least, the headlong flight of more than a dozen auto executives from the company, including Steve Saleen. Chamco was shut down by order of a New Jersey Superior Court judge, and control of the company was remanded to a court-appointed trustee in April of this year. Chinese manufacturer Hebei Zhongxing Automobile Co. said, that’s it, we’ve had enough, and we’re out of here. Hebei Zhongxing still hopes to sell their vehicles in the US, but it won’t be through Chamco, that’s for sure. Although they may want to rethink that SUV/pickup lineup. Steve Saleen has already started SMS, an automotive performance company that will enhance many makes, not just Ford models as Saleen performance previously did. And what of the 37 dealers that paid an average of $250,000 USD for their Chamco dealer franchise? They are out of luck.


Now some oil industry analysts are saying that oil could very well be $200 a barrel by the end of 2008. That translates into $6 a gallon gasoline. Why the huge acceleration in time frame for $200 a barrel oil? The simple explanation is that there are a lot things driving up the price of oil and nothing pushing it down. Look for blood in the streets of Detroit if this happens, and a whole bunch of people deciding that an apartment in a city with good mass transit might not be such a bad idea the next time they have to move.


GM is seriously considering bringing the Beat, a small 3-door hatchback, here to the US, but first it must be engineered to meet safety and emissions standards. The Beat is about the size of a Honda Fit, has a 1.2 liter turbocharged engine, and should get around 43 mpg on the highway. GM suggests a MSRP of around $10,000 USD would be the price point. The Beat is currently scheduled to be made in South Korea.


Mahindra & Mahindra is sticking to its plan to sell a diesel-powered pickup and SUV in the US in 2010. The Indian company plans to sell a minimum of 10,000 vehicles annually, despite the savage downturn in SUV and pickup sales in the American market. Mahindra says their diesel engines will make all the difference.

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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8 Comments

  1. Mahindra is going to have a pretty bad time of it meeting their goals with a pickup and SUV, even if it does have a diesel. Diesel fuel costs more in the US and I don’t see how diesel gets them much in terms of consumer appeal.

  2. GM should be selling the Beat here right NOW, along with at least one the other two shown as part of the mini-car triplets last year. Too little, too late is GM’s motto.

  3. Like you know anything about the oil markets. The price of a barrel of oil is dropping today as I write this. Stick to cars, something you know about.

  4. Yeah, it’s always best to forecast the rest of the year off of a single day’s activity in the market – that’s what all the stock market experts do.

  5. “Stick to cars, something you know about.”

    Cars and oil are more than a little related. If one knows cars, one knows that the price of gas at the pump is a big deal to this industry. There will never be as big a paradigm-shift in this industry as the one created by a sudden jump in oil prices (whether or not oil prices hit $200 a barrel). I’d love to see prices reset to pre-Bush levels, however I am also intrigued by what the future might hold, should the trend continue.

  6. Anon, the author is not predicting oil prices. Page A6 of today’s Wall Street Journal has the $200 per barrel oil story.

  7. Lots of media outlets have the $200 a barrel prediction, not just the journal. It’s in the news all over lately. You can’t say he’s predicting the price of oil when he’s just mentioning that others are predicting the price of oil. And I agree with “expert on oil prices”, you offering up today’s prices as proof that $200 a barrel isn’t going to happen is just kind of stupid.

  8. How many of those cars can VW sell, I wonder? I wonder just how many takers there would be. Obviously the price of petrol has a lot to do with it, but let’s say petrol is $11 a US gallon in 2010. DO they sell 5000 of the cars or 50,000 of the cars?

    Ray Kwan

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