The Truth About Cars » Global http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Wed, 23 Apr 2014 16:58:35 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Global http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/editorials/global-editorials/ At Toyota, Craftsmen Get Hands-On In Search Of Innovation http://www.thetruthaboutcars.com/2014/04/at-toyota-craftsmen-get-hands-on-in-search-of-innovation/ http://www.thetruthaboutcars.com/2014/04/at-toyota-craftsmen-get-hands-on-in-search-of-innovation/#comments Thu, 17 Apr 2014 12:17:45 +0000 http://www.thetruthaboutcars.com/?p=801290 Toyota factory near hard-hit Sendai. Picture courtesy cbsnews.com

Twenty years ago, as a young Merchant Mariner, I was sent to Japan where the ship I was assigned to, the Sea-Land Spirit, was undergoing a major refit. The ship had begun life as a LASH ship, a vessel that carried cargo-filled barges which it offloaded from its stern via huge, rail mounted cranes that ran on tracks down the length of its deck, and now, after the demise of that business model, it was being converted it into a container ship.

Prior to the refit, the ship had been virtually abandoned, left to rot in some bayside backwater for many years, and it had taken a pounding from the elements. To get it back into service, the ship was towed to Korea where it underwent most of the major modifications, after which it was then taken to the giant Mitsubishi works in Kobe, Japan for the final touches. It was there, so I was told, that Japanese laborers called into question the quality of the Korean’s work. Some of the massive steel braces that had been welded to the deck, they found, were as much as a centimeter off. Shocked by the poor quality of their counterparts’ work, the Japanese shipyard workers cut the braces off the deck, moved them a fraction of an inch and welded them down again.

Photo courtesy of cdn2.shipspotting.com

Photo courtesy of cdn2.shipspotting.com

The Japanese have a reputation for doing things right. Who else could take an iron ore of questionable quality and forge it into blades renowned for their strength, flexibility and sharpness? Who, but the Japanese, could take a pasty skinned, round face little girl and turn her into an object of enduring sexual desire? All cultures make things, but it is only in Japan that the making of things, “monozukuri” is elevated into an art unto itself, and where skilled craftsmen, who spend their entire lives honing their craft to perfection, become “gods.”

In recent years, however, thanks to the amount of production that has been handed over to robots, the number of “gods” on the factory floor has dwindled. Toyota, in particular, has noticed the problem and, according to a recent Bloomberg article, the company if now taking steps to reverse what it sees as a new form of brain drain by taking jobs away from robots and giving them back to men. The logic is slyly simple but infinitely deep, craftsmen, it goes, will always look for ways to innovate, always seek out easier more efficient methods and even find ways to reduce waste while robots can only do what they are programmed to do.

robots.jpg

Over the past three years, the article continues, Toyota has introduced more than 100 “manual-intensive” workplaces at factories all around Japan. In one of the sections, men manually turn and hammer red hot steel as it is forged into crankshafts in much the same way that Henry Ford’s workers once did. True to form, the men in the section have been watching and learning and the result of their efforts has been a 10 percent reduction in material waste and a shortening of the production line that will soon be applied to the automated processes used to make crankshafts in the next generation Prius Hybrid.

There is no doubt that the robots are here to stay, but Toyota’s recent experiments show that keeping humans closely engaged in the process can pay real dividends. By empowering workers and encouraging them to become skilled craftsmen who truly understand what it takes to build cars, Toyota is setting the stage for innovation. It is, I think, a uniquely Japanese solution but it could be applied here in North America as well. Despite the many people who decry the lack of skills and poor work ethic of the North American factory worker, I believe that there are a great many men and women in our factories who would jump at the chance to work harder. Everyone, I think, wants to be valued and most people want to make a difference. This could work here too, maybe some of our own best and brightest should take a look at what’s going on.

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Tokyo Motor Show: Are The Japanese Really Back? http://www.thetruthaboutcars.com/2013/11/tokyo-motor-show-are-the-japanese-really-back/ http://www.thetruthaboutcars.com/2013/11/tokyo-motor-show-are-the-japanese-really-back/#comments Mon, 25 Nov 2013 15:30:01 +0000 http://www.thetruthaboutcars.com/?p=663562

Three of the world’s most important auto shows began last week. Since my invitations to the various press events must have been lost in the mail I, like virtually everyone else in the world, followed them over the internet. I’m OK with that, really. I hate fighting the crowds and by the time a show closes high resolution photos of the most important cars are always all over the world-wide-web, anyhow. With the photos are the journalists’ impressions. Some are good and some are bad, but they all make me think. For example, there’s this article from the Top Gear website on the Tokyo motor show that asserts, on the strength of the cars at this year’s show, “Japan is back.” Hold on – Really?

To be sure there were some important and exciting cars at this year’s Tokyo motor show. Honda showed us a new NSX and the S660 sport compact that compares favorably to the Beat kei class sports car that Honda produced back in the last century. Nissan showed us the amazing three-seat, electric “Bladeglider,” a hotted up Nismo GTR and the retro themed IDx. Toyota’s performance car offerings came in the form of the Lexus RC and a convertible FT86. While Toyota ripped the top off of their Toybaru twin, Subaru went the opposite route and gave baby some back with their Cross Sport. So far as I could glean, that was about it for cars intended to stir the hearts and minds of enthusiasts. That would have made for a pretty small show though, so augmenting the really interesting stuff were was a whole slew of hybrid/electric/gas, etc SUVs, sedans and city cars intended to appeal to the masses.

Click here to view the embedded video.

From my perspective what we got are some new toys of the uber rich, two small cars that my all-American ass won’t fit into, a couple of modifications on a car I probably won’t buy anyhow and one wanna-be-retro Nissan that might actually have some possibilities if they don’t screw it up with a powertrain that serious enthusiast wouldn’t want. The emphasis on products with hybrid or alternative energy powertrains and other technical innovations says some good things about state of Japanese industry and the many different body styles on display indicates that the Japanese have noted the success of Korean cars’ design language and are finally looking somewhere other than Mercedes for inspiration, too. Good news for sure, but does any of it mean Japan is back?

For me, the glory days of Japanese cars happened roughly between 1985 and 1995. The cars of that era had good, solid lines and, while the designs weren’t daring, they did have their own unique sense of style. There was technical innovation too and it came wrapped up in practical packages. Real performance was offered across all the price ranges and the variety of new cars was enormous. There was something there for everyone and if you could not afford a Twin Turbo Supra or a Turbo 300ZX, you could, at the very least, take home on of the good looking down-market alternatives: the AE86 Twin-Cam Corolla or the 200SX Turbo. Today, that wide aray of choices is no longer a part of Japan Inc.’s current line-up.

I’m not sure why that is, but in the process of writing this article it suddenly hit me that the cars on display at this year’s Tokyo motor show says something about how our society has become ever more divided over the past couple of decades. It doesn’t take an economist to point out that the rich have gotten richer and the rest of us poorer. The market reflects that reality. The rich get supercars, those of us in the middle get family trucksters and the odd toy while the unwashed masses receive battery powered practicality. The choices are gone and fun is being increasingly reserved for those who can afford it. It wasn’t that ay 20 years ago and the sad truth is that Japan isn’t anywhere close to being back. But then, none of us are, are we?

Thomas Kreutzer currently lives in Buffalo, New York with his wife and three children but has spent most of his adult life overseas. He has lived in Japan for 9 years, Jamaica for 2 and spent almost 5 years as a US Merchant Mariner serving primarily in the Pacific. A long time auto and motorcycle enthusiast, he has pursued his hobbies whenever possible. He also enjoys writing and public speaking where, according to his wife, his favorite subject is himself.

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Beyond The BRICs http://www.thetruthaboutcars.com/2013/10/beyond-the-brics/ http://www.thetruthaboutcars.com/2013/10/beyond-the-brics/#comments Wed, 23 Oct 2013 12:30:02 +0000 http://www.thetruthaboutcars.com/?p=632226 Not business as usual_1

Emerging markets have been a big theme at TTAC for the past few years, with our coverage going beyond the cursory articles on automotive developments in the BRIC countries. Our articles on places like North Africa and Indonesia aren’t always the most popular, but we keep an eye on them for a very important reason. These countries are the final frontier for growth in the automotive sector.

Boston Consulting Group released a report that urges auto makers to look beyond the BRICs, to a group of 88 countries that contain roughly 40 percent of the world’s population. Collectively, annual growth of 6 percent is expected, below India’s 10 percent, but on par with China and outpacing both Brazil and Russia.

Rather than cover all 88 nations, BCG identified the “Future 15″ countries where car sales are expected to show strong increases in sales (Iran, Turkey, Saudi Arabia, the Ukraine, Indonesia, South Korea, Thailand, Malaysia, Taiwan, Mexico, Argentina, Colombia, Chile, South Africa and Algeria), as well as four regional areas that will serve not only as sales hot spots, but also as future locations for assembly plants, R&D and sourcing. Not surprisingly, these are based in North Africa, the ASEAN region, the Middle East and the Andean region in South America.

The need for specific regional strategies is a key theme in the report, with BCG devoting plenty of space to the need for product, financing and sourcing solutions that are best adapted to regional characteristics. Among their examples are the importance of offering a vehicle with a low tax burden in the Middle East, a tailor-made financing plan for Latin American consumers from Chevrolet and Renault’s North African assembly efforts for its Dacia brand.

One of the more interesting examples highlighted by the report was that of the ASEAN countries. Toyota is overwhelmingly dominant in Indonesia, its biggest market, and one possible reason is because of its ability to build products at an appropriate price-point that strongly resonate with local buyers. A side by side comparison between the Japanese market Sienta MPV and the Indonesian Avanza shows how this is done.

On the surface, the two seem indistinguishable, but under the skin, they are vastly different cars. The Sienta rides on a platform shared with the Yaris, while the Avanza uses a rugged, body-on-frame rear-drive layout with increased ground clearance, to handle Indonesia’s rougher roads and frequent flooding. Its powertrain and interior are much less advanced, and the Avanza has fewer creature comforts. But it’s built to a price, costing as much as $5,000 less than a Sienta, a fact that’s reflected in the slab-sided body panels, which are easier and cheaper to stamp. This kind of specialization is what’s allowed Toyota to capture 90 percent of Indonesia’s market, giving them an enormous head start in what is expected to be the next big place to sell cars.

ASEAN is not the only region where Toyota enjoys the top spot. The auto maker is leading slightly in volume in the Middle East, though second-place Kia is essentially equal in terms of market share. Chevrolet is regarded as the leader in the Andean belt, while Renault and Dacia are tops in North Africa. While Korean OEMs also have a strong showing, both Renault and Peugeot are strong in the Middle East and Africa, even as their efforts falter in Europe.

The common thread with all of this is an emerging middle class in regions where that notion did not exist. With prosperity on the rise, they are eager to attain greater mobility and freedom though an automobile of their own. Along with personal transportation comes the possibility of good jobs in assembly plants, sales and after-sales, logistics and other related industries. Renault and Dacia have begun to look to North Africa as a regional hub not only for the African market, but for the Middle East and even Europe. Nissan’s Datsun brand is one of the first to explicit target the “Beyond BRIC” countries, with stated aims to expand into Indonesia and Africa in the near future.

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The 1973 Oil Crisis: 40 Years Later http://www.thetruthaboutcars.com/2013/10/the-1973-oil-crisis-40-years-later/ http://www.thetruthaboutcars.com/2013/10/the-1973-oil-crisis-40-years-later/#comments Mon, 21 Oct 2013 16:00:03 +0000 http://www.thetruthaboutcars.com/?p=630010 Landscape

Forty years ago this month, the Organization of Arab Petroleum Exporting Countries (consisting of OPEC’s Arab members plus Egypt, Syria and Tunisia) began an oil embargo that would last through March of 1974.

The cause of the embargo: Intervention. During the Yom Kippur War between Egypt and Syria versus Israel, other Arab nations had lent their support to their brothers in northern Africa (as well as the Soviet Union, who supplied weapons). In turn, the United States helped their ally (who had gone on full nuclear alert) by supplying arms and other goods through President Richard Nixon’s authorization of Operation Nickle Grass. This prompted OAPEC to respond by beginning an oil embargo whose effects still linger to this day.

In the United States — the main target of the embargo –this led to long lines at the pumps during the weekdays (after a suggestion by Nixon that gas station owners voluntarily not sell fuel on Saturday night and Sunday; 90 percent complied with the suggestion), odd-even fuel rationing, three-color flag systems denoting availability (or lack thereof) of any fuel, and the passing of the Emergency Highway Energy Conservation Act, better known as the act that would set the national speed limit at 55 mph for the next two decades.

Though the first oil crisis would end when OAPEC accepted the promise of a settlement negotiated between Syria and Israel through the United States, the effects of the five-month-long embargo would linger for the rest of the decade and beyond.

Prior to the embargo, the most popular cars sold were large and in charge with big V8s to pull them along the highway. After the shock, however, most motorists sought out smaller, more fuel efficient offerings from Europe and Japan. The shock also gave birth to compact trucks, such as the Chevrolet LUV and Toyota Hilux, and prompted the Big Three to offer their own import fighters prior to downsizing their entire lineup of cars by the end of the 1970s, and the switch to front-wheel drive that would come to dominate the 1980s.

The shock also affected motorsports, with the cancellation of both the 24 Hours of Daytona and the 12 Hours of Sebring in 1974, and NASCAR reducing all race distances by 10 percent.

And of course, the 1973 oil crisis set off the movement to find as many energy sources as possible (and ways to conserve said energy) to reduce if not outright eliminate dependence on foreign oil, as any Albertan or North Dakotan could explain in detail today to anyone who will listen.

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America’s Hot Export Article: “Import” Cars http://www.thetruthaboutcars.com/2012/12/americas-hot-export-article-import-cars/ http://www.thetruthaboutcars.com/2012/12/americas-hot-export-article-import-cars/#comments Fri, 07 Dec 2012 13:11:02 +0000 http://www.thetruthaboutcars.com/?p=469473

 

Many people don’t realize that most of the “import” cars bought and sold in America no longer roll off a boat, but off an assembly line somewhere in the American heartland. Or at least in the North American heartland. It comes as an even bigger surprise that these cars are one of America’s most successful export products, going from American ports to many countries in the world – where people often are likewise ignorant of the car’s American origin.

Yesterday, we were surprised by the news that Honda aims to become a net exporter from North America in two years. Numbed by the PSTD of too much moronic electioneering, we often forget that “the American Auto Industry” also consists of names like Hyundai, Volkswagen, or Toyota. “Foreign” automakers employ more than an third of America’s autoworkers, who build more than a third of the Made in America cars.

What is very little known is that for many years, these foreign companies have been exporting an increasing number of the American-made cars. While bailed-out GM is busy creating jobs in China (this year alone, GM built some 2.6 million cars in China, vs. 1.9 million in the U.S.) foreign automakers do more to build export-based auto jobs in the US than the companies rescued in the bailout.

  • BMW exported 70 percent of the 276,000 cars it built 2011in Spartanburg, SC, helping South Carolina overtake Michigan as the No. 1 exporter of automobiles. BMW X3, X5, and X6 go from Spartanburg to 130 countries.
  • Mercedes-Benz exports half of its cars made at its Birmingham, Ala. plant to countries outside NAFTA.
  • Honda started exporting U.S. made Hondas 25 years ago. On Wednesday, the 1 millionth Honda automobile to be exported from the U.S. rolled off the line at the company’s Marysville Auto Plant. The 2013 Honda Accord EX-L Sedan is on its 8,000 mile way to South Korea. Since 1987, Honda has exported more than $22 billion worth of automobiles and components from the U.S. American Honda exports the Accord, CR-V, Civic, Odyssey, Pilot from its factories in the U.S.
  • At Nissan, “the numbers are trending toward Nissan being a net exporter,” a spokesman in Yokohama said. In 2012, Nissan exported 247,779 units from NAFTA, imported 418,248 and built 1,157,612 in the region, for a net import balance of 170,469 units. “The tipping point comes when we localize production of the next-generation Nissan Rogue in the U.S. at the end of 2013,” the spokesman said. Nissan is on pace to sell more than 140K Rogues in the U.S. this year. Once they are built stateside, they will reduce Nissan’s import number to less than 300,000, and with increased exports, Nissan could become a net exporter from North America in 2014. Nissan exports the Altima, Frontier, Maxima, Pathfinder, and X-Terra from its factories in the U.S.
  • Toyota began exporting U.S.-assembled vehicles in 1988, and now exports U.S.-assembled vehicles to 21 countries around the world. These exports are expected to increase in calendar year 2012 to more than 130,000 units – a 52% increase from last year and an all-time high for Toyota. The company began exporting Indiana-assembled Sienna minivans and Kentucky-assembled Camry sedans to South Korea last year. Other exports include the Kentucky-produced Avalon sedan, the Indiana-produced Highlander and Sequoia SUVs and the Texas-produced Tacoma and Tundra pick-up trucks. In November, Toyota announced the export of U.S.-assembled Venza crossovers to its distributor in South Korea.
  • Subaru exports the Legacy, Outback, and Tribeca from its factories in the U.S.

17 percent of the cars made at Japanese plants in the U.S. were exported in 2011 for a total of 259,908 units. This total is expected to increase drastically in 2012 and in the coming years.

Free trade agreements are a main driver behind these exports. Free trade agreements get rid of a small 2.5 percent tariff on auto imports to the U.S., but they also eliminate often much higher tariffs on auto imports to other countries. This, a low dollar, and volume production in the U.S. make a strong business case for exports from America. A free trade agreement between American and South Korea made transport of “Japanese” cars from America to Korea more attractive than shipping them the much shorter way from Japan.

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Fifty Years of the Trans-Canada Highway http://www.thetruthaboutcars.com/2012/07/fifty-years-of-the-trans-canada-highway/ http://www.thetruthaboutcars.com/2012/07/fifty-years-of-the-trans-canada-highway/#comments Sun, 01 Jul 2012 05:45:24 +0000 http://www.thetruthaboutcars.com/?p=450831

Currently, two of TTAC’s regular writers are lumberjacks dirty communists Canadians: myself and Derek Kreindler. Today we celebrate our country’s one hundred and forty fifth year of being a sort of chillier, politer version of Australia.

I love Canada. It’s really… big. It’s big. Sure we discovered insulin and invented the pacemaker and created that game that’s a bit like hockey except there’s some baskets and a big orange thingy that you bounce around (can’t remember the name, tip of the tongue), but really, all true sons and daughters of the North are proud of one thing above all else: Canada’s the biggest country in the world. Apart from Russia, of course.

We do things big up here. We’ve got great big hairy bears; sprawling, desolate arctic wastes; vast, unchartable offices filled with incompetent bureaucrats; and huge tall trees – even your own Mitt Romney has remarked, “I love Canada, they got tons of trees up there.” Indeed we do: we’ve also got the longest highway in the entire world.

(Except for Russia, or course. And the Australians – but they cheated, the bloody convicts).

As I write these words, I am standing at the beginning (or the end) of the Trans-Canada Highway: mile zero at the foot of Douglas street where it joins Dallas road in a t-junction. Below, the Pacific laps gently at the cliffside shoreline; behaviour that befits its name, the peaceful ocean.

Eight thousand kilometres away lies the road’s terminus (or its beginning), the capital of Newfoundland, St. John’s. Let me just say that again: eight thousand kilometers. Seven time zones. All ten provinces.

If I was to jump in my car and drive day and night at an average constant speed of 100km/h – the nominal national speed limit – it would take me three and a half days without an hour’s sleep. And I’d still be in the same damn country!

Not that you’d notice. Roll into Newfoundland in a car with BC plates on it, and everyone will assume that you’re there to sell marijuana. Pull into Victoria in a car with Newfoundland tags and… well nothing much, I suppose. Someone will try to sell you marijuana and then not understand your weird accent, duuuuude.

It’s a glorious highway, crossing the majestic Rockies, the billiard-smooth and monotonously boring prairies, the lake-studded Canadian Shield, alongside the Great Lakes, through the national capital of Ottawa and then down through the close-clustered maritime provinces with their brightly coloured fishing villages and clusters of close-harmony coal miners.

This year, the Trans-Canada celebrates its fiftieth anniversary, meaning that you’ve been able to drive clear across this vast nation since the very first MGB hit the road. The road officially opened in September, amidst the towering peaks of the Rogers Pass in my home Province of BC. Prime Minister John Diefenbaker joined representatives from each of the ten provinces in declaring the road open for travel, which was a bit cheeky, considering that a full third of it remained gravel and dirt.

It took twenty full years to complete the Trans-Canada properly; it was fully paved by 1970 at a total pricetag of over a billion dollars, or approximately the cost of running our publicly funded medical system for 2.5 hours.

Mind you, the road was still bloody dangerous: dozens would die over the years as the result of icy weather, animal collisions, or just plain falling asleep at the wheel when driving through Saskatchewan, the rectangular-est province. Slow, incremental improvements have improved safety, but the responsibility for upgrades rests not with the federal government, but with each cash-strapped individual province.

More than a road, it’s a mountain. Any number of charitable causes have been supported by people attempting to cycle, run, walk or propel a wheelchair along its endless length. Perhaps the best-known journey is one that was never completed.

Terry Fox lost his leg to cancer at the age of nineteen. It would take his life in a New Westminister hospital bed at twenty-two. After diagnosis, amputation, and chemotherapy, he came up with the idea of running across the country to raise money for cancer research: his “Marathon of Hope”. A stubborn, hitching gait got him from St John’s to Thunder Bay, a distance of 5300 kilometres. He would have had four provinces and the Rockies still to conquer.

Today, Terry is a national hero, his legacy a lasting one. The road itself is just as important, an umbilicus that connects us all as we huddle against the 49th parallel for warmth.

Most of us will never drive the whole thing. It’s too daunting and onerous a task, compared with the relative ease of developing deep-vein thrombosis while entering the fifth hour of being parked on the tarmac in one of the fine aircraft operated by our national airline. The Rockies may be majestic, but the prairies will have you reaching for the fast-forward button, and then there’s the long drive back, unlike the Australians with their circular route.

Still, there at my feet is mile zero. The first step on a journey that would take me through the land that my immigrant parents chose for me. I’d see things, meet my fellow countrymen, explain to them that I wasn’t holding with an apologetic shrug.

Someday, I’ll make that trip. Not today though, there’s a Rita McNeil special on, eh?

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Someday, GM Will Own the Streets of Hanoi! http://www.thetruthaboutcars.com/2012/04/someday-gm-will-own-the-streets-of-hanoi/ http://www.thetruthaboutcars.com/2012/04/someday-gm-will-own-the-streets-of-hanoi/#comments Thu, 05 Apr 2012 15:00:26 +0000 http://www.thetruthaboutcars.com/?p=438443 During my visit to Vietnam last month, I photographed many Honda Super Cubs, but I always kept one eye open for other interesting vehicles. I spotted a few Toyota Crown Royal Saloons, which was cool, but catching a Geo Chevrolet Tracker at a Hanoi intersection was one of the weirder sightings. Studying the photograph later, I realized that three of the four (non-two-wheeled) vehicles in the frame were GM products that show the breadth of The General’s Asian empire. In the foreground, there’s a Chevrolet Matiz, made by Daewoo (I saw plenty of these things, badged as Pontiacs, when I visited Nayarit State in Mexico last year). Then there’s a Toyota Innova, which we can ignore. After that, the Tracker, made by Suzuki (yes, it has a snorkel). Then we’ve got a Daewoo bus in the background.
I think the GM product I saw in Hanoi that I’d most like to see sold in the United States is the Daewoo Labo Roach Coach; this thing seems to have about the same footprint as a Honda Fit, if it’s even that big. We need more Kei Truck Roach Coaches!

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Blind Spot: Catching Up With Chrysler http://www.thetruthaboutcars.com/2012/03/blind-spot-catching-up-with-chrysler/ http://www.thetruthaboutcars.com/2012/03/blind-spot-catching-up-with-chrysler/#comments Tue, 27 Mar 2012 22:26:30 +0000 http://www.thetruthaboutcars.com/?p=436754

With the government still waiting to see how much it will get out of its equity in General Motors, The General seems to be attracting more of the media commentary than Chrysler these days. And not without good reason: GM saw the greatest drop in market share last month of any Detroit automaker, its government-hyped Volt is flopping, Opel continues to be an open sore and it can’t help but flaunt its cluelessness about youth marketing. But interest in GM’s shortcomings seems to be driven by little more than election-year political implications, which Chrysler was able to avoid by borrowing cash and misleadingly claiming to have squared up with the American taxpayer. After all, Chrysler is facing just as many challenges as GM, if not more. And despite having formally closed the bailout chapter of its history, Chrysler’s performance still bears on the decision to rescue America’s weakest major automaker.

Evidence that Chrysler is receiving something of a free pass from the media is not difficult to find, with Sunday’s CBS interview with CEO Sergio Marchionne serving as Exhibit A. A fluffy profile of the Fiat/Chrysler boss, the CBS piece is so lacking in journalistic rigor that ends up providing more misinformation than verifiable facts. The “paid back the loans with interest” line makes an appearance, without any qualifications that might have explained the full truth of Chrysler’s “payback.” Another straight-up whopper: Sergio’s assessment that Chrysler can “afford” to screw up on a single car. Chrysler only has one new post-Fiat car on the immediate horizon, the 2013 Dodge Dart… if Chrysler has “screwed up” that car, it will be a PR disaster that the company might not survive. Besides, with Fiat 500s piling up on dealer lots (82 days supply as of 3/1, down from 132 days supply on 2/1) despite $500 rebates or 0% financing, it seems that Fiat/Chrysler has already used up the one “screw up” that Marchionne says it can afford.

Speaking of the Dart, Marchionne claims that the crucial compact is “mechanically outstanding” and has “nothing to apologize for”… and yet, it appears that it’s already facing some challenges. Earlier this month, Marchionne said he was bumping the Dart’s rollout from April 1 to “avoid being jinxed” by April Fool’s day (Allpar notes that the April 1 launch was a “delay” from the planned January launch). That excuse is flimsy on face value, but the fact that Mopar will only build 2,000 Darts in May and that full dealer availability won’t finalize until June shows that there are probably bigger problems under the surface than mere superstition. And Dodge boss Reid Bigland seems to already be turning down the wick on expectations, saying the delay is

“not a concern. Given the size of the segment throughout North America and the enthusiasm for the Dart, we think it’s going to go OK.”

What Bigland leaves out is that, although the segment is large, the competition among compact sedans is fierce. And the Dart is likely not as well-positioned as CBS implies when it claims its “base price just under $16,000 with 40 miles to the gallon.” The EPA doesn’t have fuel economy numbers for the Dart, but with an efficient 1.4 Turbo engine listed as an option, it seems highly unlikely that a 40 MPG highway version of the Dart will be available at the base price (at least until a 9-speed transmission becomes available next year). Oh, and the government’s condition that Fiat build a 40 MPG Chrysler only requires 40 MPG combined unadjusted, a benchmark that is far less than 40 MPG EPA, and barely competitive with compact sedans already on the market. And with only 120,000 or so units of production planned at Belvidere, and exports planned from there to 40 different markets, it seems that Chrysler isn’t banking on competitive sales figures (Focus and Cruze have been selling over 20k units per month).

But if you dig deeper, you find that the mainstream media’s breathless boosterism is sharply contradicted in the online press, where rumors of trouble in Auburn Hills are starting to pile up. Over at Autoextremist, the auto industry insider’s outsider is posting emails from sources like “Anonymous in Auburn Hills,” which indicate that there are either a few truly bad apples at Chrysler or (as the Autoextremist himself concludes) the Fiat-Chrysler marriage is facing serious issues. “Anonymous” writes

All you need to do is work at CTC [Chrysler Technical Center] and you will see just how correct AE [Autoextremist] is on this Fiat issue.

In that building resides a morass of poor decisions, poor planning, poor time management, and ass backwards 80′s era engineering think…

…They want to build good cars but can’t make a decision to save their live.

My God, they can’t even get their CAD system figured out! I mean who is stupid enough to introduce a new CAD system on a whim?? did they not think you need time to integrate all of the other computer related systems?

It is a joke of epic proportions.

Another AE reader adds:

Arrogant. Irrational. Belligerent. Such a perfect description of Fiat management, [Autoextremist] must be moonlighting within the walls of CTC somewhere…

…Fiat practices finger-snap management as its true core philosophy. Cut product development time in half! How? Just cut it in half, easy! What testing should be eliminated? What efficiencies should/will allow this? No answer. Build a new production line but with half the capital funding! How? Easy, just spend half as much! You get the picture.

In an industry that so closely controls its PR, this burst of leaks is evidence enough that some serious dissatisfaction is brewing at Fiat/Chrysler. Add the Dart’s delay to this, and the emerging picture at Chrysler is not of a company bound for great things. More troubling still is the counterpoint between these worrying signs and the dizzying ambition of Fiat/Chrysler’s new product development plans. The Dart is built on a widened version of Fiat’s C-EVO platform, but according to Allpar, that platform will be stretched further and converted to rear-drive to accommodate the forthcoming midsized Alfa Giulia and Dodge Avenger replacement. Oh, and the LX platform also has a front/rear-drive replacement under development as well, the E-EVO, which will underpin everything from minivans to an Alfa sports sedan. According to an Allpar source,

This new D architecture is a joint project, but it’s being developed in Detroit with Fiat engineers who have been flown over to be embedded permanently in the project. … This decision (having a RWD D-segment architecture) was a costly proposition, and they took a good two years of tinkering between finance and marketing before they finally reached the decision to go ahead with this. … E-Evo was discarded [for this purpose] last year, when it became obvious that if you shorten it too much you can’t produce an aerodynamic, sexy looking D-segment car, on that huge beast.

So, an apparently-dysfunctional, trans-Atlantic team is developing expensive, complex D- and an E-segment platforms that are convertible between front-drive, rear-drive and all-wheel-drive, and will underpin mass-market offerings as well as premium cars. If this sounds oddly familiar, it should: it’s like a worst-of mashup of the cross-cultural issues of the DCX days and the engineering overreach of the early LH platform development (which Bob Lutz describes as having been “trapped in the classical ‘more is more’ planning maze”). And at the root of this mind-boggling complexity is yet another unsolved issue: Fiat/Chrysler’s bloated brand portfolio, which demands this ultimate (and expensive) platform flexibility.

Meanwhile, the context for all this is even worse, as Fiat faces a crushing downturn in the European market, made worse by the fact that Fiat is dependent on the Mediterranean markets that are being hit the hardest. Fiat lost half a billion dollars last year, its stock is on a 12-month downward spiral, it has frozen European investments, and it is grappling with numerous union issues (including a hauler strike that could cost it 10% market share in Italy). And with essentially no presence in China to offset European contraction, Marchionne’s solution is another alliance with yet another struggling automaker, like Mazda or Suzuki. But the “tying two rocks together to see if they float” plan clearly isn’t a path forward, and more merging will only wreak further havoc on Fiat/Chrysler’s troubled culture. Meanwhile, Fiat is only just starting [sub] its third attempt at a Chinese production JV (building Fiat-branded Darts), and it’s moving into Russia just as that market’s growth slows.

With huge losses likely to come out of Europe, and giant outlays likely on both Chinese and Russian expansion as well as investments in complex, multi-purpose platforms, Fiat-Chrysler has a seriously tough row to hoe over the next year or so. Successes will have to come from its stronghold in Brazil, which is seeing disappointing sales numbers so far this year, or from the US. With only the Dart coming down the pike, one hopes that its delays yielded serious results and that it makes an unequivocal case for Chrysler’s Fiat-led future. Otherwise, we could easily find ourselves here a year from now, wondering once again if Fiat/Chrysler is going to make it through another 12 months.

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North Korea Diary: All Roads Lead To Pyongyang http://www.thetruthaboutcars.com/2011/12/north-korea-diary-all-roads-lead-to-pyongyang/ http://www.thetruthaboutcars.com/2011/12/north-korea-diary-all-roads-lead-to-pyongyang/#comments Sun, 25 Dec 2011 13:00:27 +0000 http://www.thetruthaboutcars.com/?p=423442

The familiar wail of a police siren cuts through the chilly early winter morning air rudely snapping me out of a cold-induced slumber. Our minibus slows to a crawl as our minder winds down the window to wave his papers at a bunch of stern-faced traffic policemen.

The officer that checked the papers gave the 17 university students on the bus a once-over before waving to his partner to turn off the siren. It seems that a Toyota Coaster minibus filled with students is a rare sight in this part of the world.

Then I caught sight of a little round badge bearing the smiling face of the “Eternal President” Kim Il-Sung on the officer’s coat.

“Toto, I’ve a feeling we’re not in Kansas anymore,” the voice in my head whispered.

Welcome to the Democratic People’s Republic of Korea (DPRK), or better known as Communist North Korea.

In the capital city of Pyongyang, the roads are wide but not as empty as you might think. An eclectic mix of cars ply the six-lane dual carriageways, sharing space with run-down electric trolley buses and trams.

The most common car seen on the streets is the Romanian-built Dacia 1310. Most of them are part of the city’s taxi network though our minders were quick to add that these taxis are expensive to take and most citizens only take them as a last resort.

How expensive is an average cab ride?

According to one of our minders, Mr. Kim Mun-Chol, the fare upon flag-down is 3 USD and a 15-minute ride would set you back nearly 20 USD. The international exchange rate stands at 1 USD : 133.75 North Korean Won (KPW) but the local exchange rate is closer to 1: 100, presumably for easier rip-offcalculation. Foreigners are explicitly forbidden to use or even hold onto the local currency and are only allowed to deal in USD or Euros.

Most other Dacia 1310s seem to be private vehicles barely kept in running condition with homemade parts and the owners’ tenacious will to get by. I saw a local attempt to change a wheel on his Romanian love just outside the restaurant that we were about the have lunch at.

The pins holding the brakes together were roughly cut bolts that looked seemingly as if they were scavenged pieces of metal put together. The amount of welding done within the wheel well also hinted at the numerous repairs that have been performed to keep this car going in a country where getting spare parts is difficult to say the least.

Just as I was about to take a photograph of the man working, another of our minders appeared in front of my camera and said with an almost too cheery a grin: “This way please, we are having lunch here.”

He refused to budge till I entered the restaurant.

With housing issued by the state, where you stay is a poignant reminder of your social status. For the roughly three million citizens living in the city, they consider themselves amongst the fortunate ones in the country with barely acceptable access to electricity, food, and running water.

Whilst some struggle to keep their cars going, others indulge in conspicuous consumption with Mercedes Benz topping the unofficial chart of most popular marque in the city.

Mercedes of various models and age serve as the premium mode of transport for the rich and powerful. Parked right outside the Koryo Hotel, a North Korean rated five-star hotel where we stayed, is a fleet of presumably armoured S-Classes wearing the Red Star marked diplomatic plates.

And it is not just the stereotypical “dictator special” S-Class that is the mark of a made man here. More modern products like the GL-Class and the latest E-Class models are occasionally seen barreling down the road at speeds well above the legal limits with relative immunity from the local law enforcement.

For those just a few rungs beneath the top of the social ladder, Volkswagens, in particular, the Passat and Jetta are choice picks. Further down, citizens seem to shower their favour equally between locally made Pyeonghwa Motors products and Chinese-made Brillance, BYD, and FAW products.

The roads in Pyongyang are never packed enough to cause any real traffic jams and drivers mostly subscribe to the driving style of the right-of-horn. But that is not to say that they disregard lights at junctions. At the few working traffic lights in the city, drivers, regardless of how expensive the car they are driving, placidly wait out the change of lights.

At junctions without traffic lights, and there are quite a few in a city with hardly enough electricity to go around, there are female traffic police officers conducting traffic. One of our minders joked that these ladies are picked for their attractiveness and dedication to the job. Judging from the officers’ rosily made up faces, it seems that there is a seed of truth in his jest.

And as I wonder how these ladies keep traffic flowing all day while bearing the brunt of the sub-zero winter cold, our driver pulls into a petrol station to top up the tank. North Korea imports most of its oil from neighbouring China at “friendly prices,” said one of our minders and declined to elaborate on further enquiry. His carefully worded reply did little to prepare me for the biggest surprise of the trip.

Total fuel bill: 50 Won

The price of diesel is one Won per litre.

And I doubt the price of petrol is any more expensive.

 

The author was part of a team of 16 journalism students from the Wee Kim Wee School of Communication and Information at Singapore’s Nanyang Technological University chosen to tour the country from Dec 3 to 10 on a reporting practicum offered by the school.

The trip is fully funded by the Wee Kim Wee legacy fund.

All images courtesy: Wong Kang Wei & Edwin Loh

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