Check Your Mirrors

Odds and ends about cars and the car business – What better way to end the year?

By Brendan Moore

12.31.2009

TOYOTA (and its reputation for quality and customer care) really takes a beating in an articleToyota logo-small published in the business section of the Los Angeles Times on December 23. This is merely the way it begins:

[Quote] During a routine test on its Sienna minivan in April 2003, Toyota Motor Corp. engineers discovered that a plastic panel could come loose and cause the gas pedal to stick, potentially making the vehicle accelerate out of control.

The automaker redesigned the part and by that June every 2004 model year Sienna off the assembly line came with the new panel. Toyota did not notify tens of thousands of people who had already bought vans with the old panel, however.

It wasn’t until U.S. safety officials opened an investigation last year that Toyota acknowledged in a letter to regulators that the part could come loose and “lead to unwanted or sudden acceleration.”

In January, nearly six years after discovering the potential hazard, the automaker recalled 26,501 vans made with the old panel.

In a statement to The Times, Toyota said that there was no defect in the Sienna and that “a safety recall was not deemed necessary” when it discovered the problem in 2003. The company called the replacement part “an additional safety measure.” [Quote]

For the whole article, click here…

GM logo smallGM has offered Pontiac and Saturn dealers $7000 USD per unit to sell their remaining vehicles to themselves. GM envisions that the vehicles will be put into a dealership’s service vehicle fleet or their vehicle rental fleet, and then eventually moved to the used car lot, where the vehicles will be sold as heavily-discounted used vehicles. Everyone wins – the dealers receive $7000 per unit, get the vehicles they need for service customers when repairs are going to take awhile, and, they get to make money on the vehicle when it is sold as a used vehicle, and GM gets to book the sale as a fleet sale in 2009, and, perhaps reduce some of their warranty costs as the cars will be used less during the warranty period then they probably would have otherwise. The program has a short timeframe – it ends January 4, 2010. Of course, the plan doesn’t work too well if all you have is the single brand, since you can’t put a vehicle into a service vehicle fleet for a Pontiac or Saturn dealership that will soon not exist at all. All you can do is fill out the paperwork, and then sell it as quickly as possible as a used car.

KIA says it will offer an “infotainment” system similar to Ford’s Sync in 2010. It will be the first North American competitor to the popular Sync. Kia is using Microsoft’s Windows Embedded Auto Software platform for their system, which is also what Ford uses. Kia stated that their system will have features unique to their vehicles. Kia’s system will be called UVO.

THE NEW YORK TIMES auto writers have ginned up their Top Ten vehicle lists for 2009 and it’s interesting to look at the differences of opinion, and, the vehicles upon which there is agreement. Just go to the Automobiles Section if you would like to peruse their lists.

India Auto Expo 2010 logoINDIA AUTO EXPO kicks off in New Delhi next week, and will offer the spectacle of many of the world’s global automotive giants elbowing each other aside in an effort to get some attention in India, a market with huge potential. Among the model intros:

Maruti Suzuki, the clear Number 1 in India, will show off their new mini MPV, the Concept R3

Toyota will introduce their EFC (stands for Entry Family Car) compact car concept

Ford will show their Figo

Fiat, Tata’s partner in India, will launch their Palio model in the country

Honda will present their “New Small Concept”, which is supposed to slot in underneath the Jazz (Fit to the Americans)

VW will display the new Polo, which just started local production in India

GM will introduce the production version of the Chevrolet Beat, a compact car developed specifically for the Indian market and scheduled to go on sale in 2010

All the models are small cars because that is what sells in large numbers in India. The country craves very small cars – despite its phenomenal growth, India is still a country that considers a nicely-equipped VW Golf or a Honda Civic a luxury car. The competitors will be going at it hammer-and-tongs as the lessons of the Chinese market still reverberate among the major auto makers. The most important lesson of that market is that playing catch-up once others have established their brand in-country is very tough.

2007 Saab 9-5 Sport Combi

BAIC, the Chinese auto manufacturer that recently bought tooling and technology from Saab to produce the old 9-5 and 9-3 models under their own brand for $200 million USD, is planning to spend approximately $4.8 billion in vehicle R&D over the next 36 months, says the company chairman. “Someone has commented that the purchase of Saab’s intellectual property can help cut short the development time for Beijing Auto’s own-brand passenger vehicles by 4-5 years,” BAIC Chairman Xu Heyi told reporters last week. “We basically agree with the view.” The company quickly bought the Saab assets in a hurry-up drill after the Koenigsegg’s deal to purchase Saab collapsed at the last minute, and it appears that they got quite the bargain. BAIC is also said to be interested in buying the rights to the Saab brand should there be no deal to sell the company whole, and GM resorts to shutting down Saab and selling the company assets off piecemeal.

Toyota logo-smallTOYOTA is going to unveil a subcompact hybrid vehicle at the Detroit Auto Show on January 11, according to The Detroit News. If the car is indeed of subcompact size, that would make it about the size of a Toyota Yaris. Has the news of a potential hybrid Honda Fit and the introduction of the supermini Ford Fiesta and the supermini VW Polo to the US Market giving some new urgency to Toyota’s actions regarding high-efficiency small cars in North America? Not at all, says Toyota. Their plans were, and still are, to come to market with a fuel-cell car, a pure EV and a hybrid vehicle.

COPYRIGHT Autosavant – 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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11 Comments

  1. BAIC did get a great deal. But it wasn’t as if there were a lot of other bidders, if any. But, man, they made out pretty well.

  2. There must be a lot of buzzy little cars running around India. Hate to think what rush hour will look like in Mumbai a few years from now.

  3. The article about Toyota in the Times is hardcore anti-Toyota. That’s not going make the Toyota people happy.

  4. That LATimes article is brilliant and all I have to say is that it’s about time! Toyota has been getting away with all kinds of vehicle failures and safety problems for years and it’s been ignored the whole time. I hope the Feds go after them big time.

    Thanks for the link. I wish everyone could read that article, especially the people so blindly devoted to their Toyotas and so critical of domestic cars.

  5. IF the new Chineses owners of the old 9-5 can build the same car and sell it for 60 percent of what it was previously sold for, I’d imagine they’d get a lot of takers on those cars.

    IMO, the Saab 9-5 is not a good value at it’s current pricing, but it would be a lot of car for the money at 60% of current retail average price. Hell, it would be a lot of bang for the buck at 70% of current retail.

  6. If Kia has half the success with UVO as Ford has had with SYNC, it will be worth every penny of the R&D budget.

  7. The Saturn dealers are giving you $6500 to buy any NEW car that left, so I guess this doesn’t mean much fo the consumer, only GM and the dealer.

  8. “Any new car that is left” is what I was trying to write above.

  9. Hiding problems or solving them in secret is a part of Japanese culture. Japanese find it difficult to accept failure because in Japan failure even once means you are done and will never recover. Failure is simply not an option. Japanese consider themselves superior compared to other nations. That is why Japanese companies will never admit their fault especially to foreigners and continue blame others. Same thing happened to Mitsubishi ten years ago, now it is Toyota hiding safety issues. Tomorrow it may be Honda, Nissan and so on. Who knows what dirty secrets other Japanese companies hide from us. You will never know until there is a scandal or death involved. Japanese are very loyal to their employers and it helps to hide issues from outsiders.

  10. Yes, thank you very much for giving us all that help. We will now be in the American market four years quicker than originally planned.

  11. Is that the same Chevrolet Beat that was shown as a concept car a few years ago? If so, why is it confined to the Indian market?

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