Odds and Ends About Cars and the Car Business

By Brendan Moore

01.30.2009

FORD sustained their worst quarter ever in the last quarter of 2008, burning though $5.5 billion USD in only three months. Ford lost $14.6 billion for all of 2008. Ford officials stated, however, that they still have $13.4 billion in the bank, approximately $10 billion more in credit lines and think they’re not going to have get money from the US government. Meanwhile, Ford of Europe had a fantastic (and very profitable) year, but their last quarter looked pretty ugly, too, and they expect 2009 to be in the red.

NISSAN says that the Fiat interest in Chrysler will not affect their deal with Chrysler which calls for Nissan to supply Chrysler with two small cars and for Chrysler to supply Nissan with a full-size pickup. All this is supposed to happen in 2010, which also happens to be the year that Fiat will be supplying Chrysler with a lot of small cars. Chrysler may go from having no good small cars to an embarrassment of riches in that segment.

2009 will finally see the launch of a federal national database for badly damaged vehicles, that is, vehicles that should have been junked. There have always been companies and individuals that buy these sorts of vehicles cheap, rebuild them to various degrees of road-worthiness and then sell these vehicles to unsuspecting buyers for large profits. For the very first time, salvage yards, junkyards and insurance companies will be required to report vehicles that had been totaled in an insurance claim, and that data will reside in a national database. This data will be available for free (what is to become of CarFax?) and is scheduled to be complete (with data from every state) by the middle of 2010. So, if you have ever unknowingly bought a smoker (car that was totaled because of fire), a swimmer (car that was totaled because of flood damage), etc. in the past, maybe this will happen. If course, there will still be clickers (rolled-back odometer cars) on used car lots, so be careful out there. Continue Reading

By Chris Haak

01.29.2009

When I tell most people that I used to own a 1993 Oldsmobile Achieva SCX, I typically get one of two reactions.  Either they have never heard of the car before, or they have heard of the car and think that I immediately lose all credibility as a gearhead for having owned a car as lousy as the Achieva.

On the lack of name recognition, I’ll attribute that to a combination of GM’s propensity to rename the next generation of a model rather than just, you know, improving it (the Cutlass Calais begat the Achieva, which begat the Alero, which was the last Oldsmobile ever produced), and the fact that on the whole, the Achieva was a forgettable car with a stupid name.  My explanation to this group is usually something like, “it was the Oldsmobile version of the Pontiac Grand Am, but with a nicer interior and a Groucho Marx face.” Continue Reading

By Chris Haak

01.29.2009

Industry publication Automotive News reported this week on the tentative plans that Chrysler and Fiat have for sharing products in the venture that the companies announced last week.  The automakers have a March 31, 2009 deadline for coming to a final agreement, and Fiat CEO Sergio Marchionne visited Chrysler headquarters in Auburn Hills, Michigan today to look over the company that Fiat has agreed to acquire 35% of.

Before the ink was even dry on the “non-binding term sheet” – in fact, when the alliance was reported as “likely” and not a sure thing, our own J.S. Smith walked through some of his ideas about how the Chrysler-Fiat partnership would work.  Now, some more concrete details – though still not officially confirmed by the two companies – are starting to emerge. Or to leak, as the case may be.

Overall, Chrysler will sell seven Fiat, Fiat family, or Fiat-engineered vehicles in the US at Chrysler dealerships; the seven vehicles will be built on four different platforms.  The likely candidates are mostly small cars; Chrysler has no entry in the B-segment (subcompacts) and only the Caliber, Compass, and Patriot in the larger C-segment (compacts), and needs to boost its CAFE number significantly in coming years, which will be difficult without efficient products in the lineup to offset the 15 mile per gallon Hemis.  Here are the plans as reported by Automotive News: Continue Reading

By Brendan Moore

01.28.2009

After a combination of begging and cajoling from Vauxhall, Jaguar and Land Rover over the past 90 days, the British government finally announced they were making £2.3 billion ($3.2 billion USD) available to the British auto industry.

The money is coming in the form of loans, not outright grants, but it still represents a very positive development for the car companies. The auto industry in Britain registered record low sales in December 2008 – the worst drop in sales in twenty years.

Of course, just like in the US, there was a lot of political back-and-forth before the aid happened – the Conservative party (currently the party not in power in England) lambasted the government for “too little, too late” regarding its efforts to help the auto industry. They claimed government officials hesitated too long before deciding to offer the auto industry assistance, putting valuable British jobs in mortal danger.

Besides the US auto bailout, other European governments have already set up a tab at the bar for their national automakers. France has guaranteed a large credit line of up to €6 billion ($7.9 billion USD) to PSA Peugeot Citroen and Renault SA together, as long as the jobs are kept. Opel has gotten a commitment of €1.8 billion from Germany’s federal government.

It’s worth noting, however, that there is some ambivalence among the British themselves about bailing out automakers, since every car company of any meaningful size is foreign-owned. There is also the bad cultural hangover of the massive amounts of government aid given to now-gone British car companies in the Seventies and Eighties, which, in retrospect, was money flushed down the toilet.

But, that aside, the government made its decision, and is now moving forward with the aid.

What the auto industry in England wants most is easier access to auto loans to encourage now-abesent motorists back into the showrooms and state-backed loans or short-term funding to subsidize layoffs. They feel they can make it through this bad patch with that help.

The British auto industry is responsible for 850,000 jobs in-country and produced 1.65 million cars last year. Three-quarters of those vehicles are exported, making the auto sector quite valuable to the country in terms of trade surplus/deficit calculations.

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By David Surace

01.28.2009

Reuters has reported tonight that Japan’s number 1 tire maker, Bridgestone, as well as German automotive supplier Continental AG (specifically its UK subsidiary, Dunlop) and three other companies have been fined a total of 131.5 million euros, or around $174 million in greenbacks, for participating in a cartel with the intent to fix prices for marine oil hose.

The fiscal smackdown comes courtesy of the European Union Competition Commission, whose commissioner, Neelie Kroes, laid down some tough words: “I will not tolerate illegal cartels and will continue to impose heavy fines on those companies found guilty of this kind of serious malpractice.”

Continue Reading

By Andy Bannister

01.27.2009

I’ve just come back from a trip to the Spanish Atlantic island of Gran Canaria, where I spent a week negotiating hairpin bends in what should be that most quintessential of cars made in Spain, a Seat Ibiza.

For those who don’t recognise the name, Seat (it is really an acronym, SEAT, meaning Sociedad Española de Automóviles de Turismo) is the most obscure brand in the Volkswagen family, being little known outside Europe. Its values are (I think) supposed to be sporty affordability.

My transport was an example of the newly-launched (fourth-generation) Ibiza, a surprisingly large five door hatchback with a rather feeble 1.2-litre engine. Seat’s current styling theme for the Ibiza is based on rather odd upward and downward body creases, which may look good on a bright red show car with fat alloy wheels, but looked slightly incongruous on a black-painted hire car with skinny tyres and plastic wheel trims. Continue Reading

By Chris Haak

01.27.2009

Having sampled most of Infiniti’s current lineup at one time or another, the M was never one of my favorite models (incidentally, the one model I haven’t driven before).  The original M45 was wrapped in extremely conservative styling, but featured the fire-breathing 340-horsepower V8 of the larger and more expensive Q45 flagship; it was basically a Japanese muscle car.

The second-generation Infiniti M added a less-expensive V6 model, as well as the availability of all wheel drive, all in a body that was far more curvaceous than the previous model.  The interior also enjoyed a new design, with one of Nissan/Infiniti’s first implementations of its new touchscreen/control wheel navigation interfaces at the top of a large center stack.  The M is a fairly expensive car, but it also contains a lot of slick technology.

When I learned that I’d be getting an M35 to review, I was initially disappointed that I was getting the “slow one,” rather than the 4.5 liter V8-powered M45.  As it turned out, I honestly never once for a second felt a need for the extra 22 horsepower that the V8 would bring to the table.  The VQ 3.5 liter V6 is rated at 303 horsepower in the M35s (versus 325 horsepower for the now down-rated 4.5 liter V8 in the M45), and makes that power without the use of direct injection or forced induction.  When my parents visited last weekend, my father assumed that the “s” in the model designation indicated a supercharger; from a power standpoint, it might as well have (it means “Sport,” by the way).  Even with traction control engaged, the M could spin its rear tires (note that my test vehicle was an M35s, not an all-wheel drive M35x) in both first and second gears without careful throttle application, and the car really accelerated from nearly any speed with a huge sense of urgency, with one exception:  in D(rive) mode or in DS (Drive Sport) mode, the transmission sometimes didn’t kick down far enough for maximum performance, in spite of having plenty of available ratios.  Shifts were smooth and quickly actuated, with my belief that the only limitation that the M35′s transmission suffers is a lack of shift paddles behind the steering wheel for manual gear changes. Continue Reading

By Chris Haak

01.26.2009

Fulfilling a campaign pledge, President Obama announced today that he has instructed the Environmental Protection Agency to reconsider its 2007 decision that denied California and the 13 states that have adopted California’s auto emissions rules a Clean Air Act waiver that would have allowed them to establish limits on CO2 emission from automobiles.

California and the other states (Arizona, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington) wanted the EPA to allow them to restrict CO2 as it allows them to restrict other pollutants from internal combustion engines, but the EPA’s argument was that California’s rules at the time would result in actually higher greenhouse gas emissions (and fuel consumption).

Unlike the smog-forming pollution that California and its compatriot states are allowed to regulate, CO2 is not a smog-forming gas, but a greenhouse gas, that has been linked to an increase in global warming.  California argues that CO2 is something that it should be able to regulate; historically, California has been allowed to set its own pollution standards because it enacted the first of its emission standards prior to Federal regulations covering the same; however, the Federal government has historically held the authority to set fuel efficiency standards.  Basically, California’s regulation to reduce CO2 emissions is a de-facto fuel economy standard, because the only way to reduce CO2 emissions is to burn less fuel.  As fuel is burned, CO2 is released; that’s the simple science behind it. Continue Reading

He said, she said – we don’t usually get the opportunity to hear the always different male/female perspective on the same vehicle, but we have that exact opportunity this month with the Chevrolet Traverse. Our writer Roger Boylan and our guest writer Victoria Mason both drive the Traverse for a week and report the results. Follow the link at the end of this review to read Roger’s take on the same vehicle.

By Victoria Mason

01.26.2009

Within minutes of having the Chevy Traverse LTZ dropped off in my driveway my neighbors began to ask questions and prowl around it. I drove the Traverse, Chevy’s newest crossover vehicle, for a week. This vehicle turned heads and that was just sitting in park. I was quite surprised; from the chrome trim on the outside, to the impressively stylized cockpit inside, everyone on my block wanted to take peek at something on this vehicle.

Chevy designed the Traverse to be the ultimate family vehicle and to compete with the Honda Pilot, Ford Flex and Toyota Highlander. I have driven all but the Ford Flex and can safely say that the Traverse is just as smooth a ride as those other two crossovers. It handles corners remarkably well for its bulk and you barely hear or feel the engine whether you are idling at a light or cruising down the highway. The Traverse is a large vehicle that drives like a small one. There are tight tolerances between body components, the results of which are enhanced by the Traverse’s rigid body structure. The aerodynamic look of the Traverse is actually functional as it reduces wind noise, too.

The Traverse has a 3.6L V-6 engine and it gets 17 mpg city and 24 highway in FWD and 16 mph city/23 highway on the AWD. It took me a week of preschool runs and local errands to go through a tank of gas. I will freely admit that I loved being behind the wheel of this vehicle despite not being in love with the look of the Traverse. It just screamed station wagon to me, and for this Mom, that is not going to sell me. Continue Reading

By Andy Bannister

01.26.2009

There are some unusually nervous faces at Toyota’s European operations just now as bosses anxiously wait to see what reception will be given to the company’s latest mid-range car, the third generation Avensis.

Smaller than the Camry – which has always been too big and bland to achieve much success in Europe – the Avensis was designed in France and is built in England. It is aimed squarely at some pretty formidable competition, including the class-leading VW Passat, Ford’s Mondeo, and the GM Insignia, recently crowned European Car of the Year.

Toyota sales have been disappointing of late, even before the current economic woes began to bite. The company was left with egg on its face after its grandiose ambitions to become the leading import brand in Germany in 2008 failed to materialise. Growth has also stagnated in other key markets. Continue Reading