By Frank Williams on May 21, 2009

How many Mercedes owners change their own oil to save a few bucks? The latest “Meet the Volkswagens” TV ad doesn’t just insult Benz owners’— and everyone else’s—intelligence. It’s also racially insensitive. By depicting a white guy with his face blackened with oil, it raises the specter of 19th century minstrel shows. OK, that’s a stretch. But so is VW’s supposition that reminding customers of their over-familiarity with their local dealer’s service department is a good thing. And what does a Microbus sliding out of a nearby garage have to do with anything, Amigo? Wait . . . cue-up the Routan commercial . . .

There’s that Microbus again, with its “Cars” rip-off happy hippy stoner’s voice (as opposed to the Beetle’s Arte Johnson-esque German accent). In this ad, the Routan asks an Odyssey owner if her van has an “autobahn-tuned suspension.” Instead of checking her meds, soccer Mom replies that there’s no autobahn in Japan. True! Nor is there an autobahn in Canada, where Chrysler builds the Routan. Or Lincoln, Alabama, where Honda builds the Odyssey. Or the rest of America, where Odyssey mom lives. To the same point, the day a Routan driver explores the limits of her minivan’s autobahn-tuned suspension is the day I’m parking my Audi.

Needless to say, VW doesn’t have the corner on bad commercials. Suzuki’s “Supercar” ad makes it look like an SX-4—or any other car— can’t traverse a pothole without shifting into 4WD. How about Saturn’s recent campaign, where they attempt to reassure their remaining customers that they’re still the “just plain folks” brand that they were back when they were barbecuing—I mean building cars—in Tennessee? A Saturn salesman warns viewers that there’s a car company out there that’ll take your car away from you if you lose your job. Jeez. How un-American is that?

He’s alluding to the “Hyundai Assurance” program where you can return the car with no impact on your credit rating if you lose your job and can’t make payments. Mr. Saturn makes it sound like Hyundai’ll hunt you down and pry the car from your hands as soon as you’re unemployed. Then Saturn man assures you that his [temporary] employer would never treat you that way. Really? Anyone want to guess what Saturn will do the day after their nine-month grace period on payments expires and you’re still unemployed and not making the payments?

And what happens to Saturn’s “Total Confidence” plan after GM sells the “ReThink” brand to the Chinese or Roger Penske or whomever shows up with cash in hand? Or no one at all? Call me cautious but I wouldn’t feel too confident about Saturn’s ability to back any of their promises at this juncture.

Chrysler’s latest commercials proclaim that the bankrupt company (shhhh!) builds dugouts, lockers, easy chairs, radar systems, TV stations, starting gates, skyscrapers, fish finders, battery chargers, base camps, luxury suites, transporters, mechanical bulls, sanctuaries, viewmasters, security cameras, troop transports, and moving vans. No wonder their sales numbers looks so bad. They’ve been building all these neat things while everyone else is building cars and trucks. But don’t worry, be happy! It’s all backed by the U.S. Government, so buy your whatever-it- is they build with total confidence!

Ford wants you to know they’re still building trucks. BIG trucks. In fact, one commercial highlights their extra-cost tailgate and bedside steps and tells you how much you need them to get in and out of the bed of the F-150.  Well, if they’re that important, why aren’t they standard? Or even better, if it’s such a chore to get stuff out of the back, why doesn’t Ford make the F-150 a more manageable size so you can just reach over the side to get what you want, like you could a few years back?

If you’re Chevy, and you can’t match the competition’s feature, you just make fun of it! In a Silverado commercial, Howie Long ridicules an F-150 driver (the usual stereotypical clumsy, balding, overweight schlub they use when they want you to know someone’s less than a “real” man) for using his “man step.” It’s the same sort of “you’re a faggot” put-down used by brain-dead high school football players (not to stereotype or anything) on classmates who can program a computer.

After questioning their competition’s customers’ sexuality, Chevy brags about Silverado’s “unbeatable” five year/100K mile powertrain warranty. But they won’t compare their warranty to the Dodge Ram’s lifetime powertrain warranty. Instead, they just belittle the Ram’s less-than-real-man owner for having a heated steering wheel and a manicure.

One good thing that’s come from the auto industry meltdown: fewer car commercials. Unfortunately, the remaining ones are getting worse, as the automakers grow increasingly desperate for sales. They’ll try anything to attract attention, whether it’s lying, belittling the competition or insulting viewers’ intelligence. Come to think of it, what’s changed?

By Sajeev Mehta on May 8, 2009

All’s not well with Turtle Wax. To wit: in a recent Piston Slap article, numerous commentators made less-than-flattering remarks about the brand’s products and image, indicating that Turtle Wax is suffering a dramatic loss of brand equity. It’s a big problem at a bad time. Last October, 3M acquired Meguiar’s. Barry Meguiar is a tireless and charismatic promoter who’s deeply in tune with car care gestalt. With the normally staid Triple M’s enormous resources behind him, the Divine Mr. M could put a serious hurt on Tommy the Turtle. It’s time to put the terrapin’s marketing under the microscope.

The crux of Turtle Wax’s problem was apparent the moment I entered the company’s wood-paneled conference room. The company displayed a farrago of Turtle Wax branded products, sporting vastly different color schemes, graphics, containers and brand names. Why wasn’t everything in a “Turtle Wax Green” bottle, with Tommy the Turtle placed front and center?

Potato chips. Your local grocery store carries a huge variety of potato chips: regular, fat-free, low-calorie, ruffled, jalapeño, small bags, big bags, etc. Potato chip makers don’t like this product fragmentation; it’s expensive to create and stock new variations. But retailers want their shelves filled with as much variety as possible. If a potato chip maker doesn’t play the game, another manufacturer grabs their shelf space.

Same deal at AutoZone. They allocate shelf space according to product lines, not sales of individual products. In other words, the classic green bottle may account for 40 percent of Turtle Wax sales, but it doesn’t get 40 percent of Turtle Wax’s shelf space. The challenge: how do you create a huge “family” of car care products that look similar enough to extend the brand without triggering Stendhal Syndrome?

In this Meguiar’s has the edge. All of its products feature a large script of the brand name over a black/maroon background. In contrast, Turtle Wax has reduced Tommy to a polo shirt logo, and slapped him on all manner of color schemes and container types (thanks to the logo, they all include the word “wax”). AND there are completely Tommy-less Turtle Wax products, some of which have nothing to do with traditional Turtle Wax car care (e.g., CD2 Engine Treatment).

Turtle Wax is aware of their packaging problems. Their redesigned Zip Wax bottle shows progress towards a more unified front, but there’s no question that their band extensions are cannibals out of control. The Turtle Wax website has a prominent “Help Me Choose” function where you can select from three products that all do roughly the same thing—without being able to choose multiple preferences.

Turtle Wax’s ICE brand points to an even uglier truth: success doesn’t always breed success.

Thanks in part to a distribution deal with Wal-Mart, ICE is America’s number one car care product. But the product’s association with the massest of mass market retailers alienates a wealthier, more automotively diverse demographic of car enthusiasts. Which creates a perception gap large enough for the Zainos (via word-of-mouth), Mothers (with their über-exclusive Shine Award) and Barry Meguiars (Host of Car Crazy) of the world to cut into their business.

ICE’s mass market positioning—offering a product without prominent Turtle Wax branding—makes it vulnerable to attacks from below (cheap, no-name knock-offs) and above (premium products reaching down for sales). Turtle Wax reps said the recession is adding brand insensitive customers looking to shine their old ride. It’s not clear how co/re/de-branding a Turtle Wax product could be considered the best way to create future loyalty.

For those who believe branding is bullshit and choose products for their attributes, consider this: after relaying TTAC commentator kurtamaxxguy’s query about the polymer quality of ICE versus its competitors, Turtle Wax indirectly admitted the differences are like consumer perception for Coke and Pepsi. And the (claimed) lukewarm reception to Proctor and Gamble’s excellent “Mr. Clean” system proves that better living through better chemistry isn’t The Truth About Turtle Wax.

Does any of this sound familiar? A company that adds sub-brands to expand its market share, and then loses market share to more focused competitors? The parallels with GM run even deeper.

Turtle Wax is big in China. Channeling their inner Buick, Turtle Wax does well at Chinese Sam’s Club outlets, selling the same ICE kit that you’ll find in the US for roughly five times more coin (about $100). Each store averages around 100 units annually. Meanwhile, Turtle Wax doesn’t sell their full product range in the PRC; the Chinese ICE brand (not Turtle Wax) has no fraternal or external competitors. For now.

Like GM, Turtle Wax’s future depends on recognizing and highlighting their core values and applying them across a more limited product spectrum, in a coherent, effective and instantly recognizable way.

[Turtle Wax paid for Sajeev's airfare, transfers, hotel, meals and accommodation. They have also provided sample products for review at no charge.]

By Edward Niedermeyer on April 23, 2009

Britain’s recently presented budget contains a new vehicle scrappage incentive, making Old Blighty the final major European economy to jump on the alleged “green stimulus” bandwagon. Thirteen other European nations, including France, Germany, Italy, Spain and Poland, have introduced similar measures, which provide government incentives to new car buyers who scrap an older vehicle. But will Britain’s new program (which offers up to $2,900 in incentives) have the same salutary effects on new car sales as France (March sales up 8 percent) and Germany’s (March new registrations up 40 percent)? Closer to home, how will the solidified Euro-consensus on scrappage schemes affect the chances of a similar program in the US? Although the programs have already been hailed as the savior of European new car-sales, these things don’t always translate well across different markets. Under a critical lens, issues with the latest British plan indicate a number of problems with bringing such a program stateside.

Britain’s plan to provide about $3K towards a new car purchase per 10-year-or-older scrapped vehicle seeks to limit the measure’s impact on an already-tight budget, likely in response to Germany’s massive oversubscription to the program. As our Bertel Schmitt has reported, what began as a €1.5 billion program has ballooned into a €5 billion expenditure. To limit this kind of cost overrun, the British plan (sensibly enough) limits the offer to “only” 300,000 purchases. But beyond the numerical limitation, the British government is also requiring the “auto industry” to provide half of the incentive, about $1,500 per car. Who will be responsible for providing the second half of this incentive (importers, retailers, manufacturers)? Still no word from Downing Street.

Commentators like The Telegraph’s Mike Rutherford have expressed concerns as to whether the industry will actually step up with the extra $1,500. It’s safe to say that the industry’s  enthusiasm level likely won’t equal the government’s, which will see its modest outlay more than returned by new vehicle VAT receipts. Moving past the question of whether this is a $1,500 incentive not a $3K incentive, Rutherford isn’t alone in expressing serious doubt as to whether consumers will materially benefit from the measure.

A web-based auto retail manager defines part of the problem to Bloomberg: “The U.K. car market is entirely different to those on the continent in that buyers typically change their car after three years when the finance agreement and warranty expire.” Besides a possible shortage of older cars to be scrapped, there’s also an issue of new vehicle availability, as imports to the Isles have been cut in line with falling demand.

And, as Rutherford points out, many 10-year or older vehicles may be worth considerably more than even the manufacturer-matched full $3K (especially considering Britain is crawling with classic and near-classic car nuts). Even more troubling, the incentive could end up shrinking the massive incentives already offered by manufacturers on new cars. $7,000 incentives on Fords and 40 percent discounts on Opels could dry up in the face of government stimulus, actually creating worse conditions for new car buyers. Throw in the likelihood of a dramatic drop-off in sales when the stimulus runs out (assuming it functions as planned) and the devastating effects on newer used car prices and fleet values (estimated to wipe out nearly $9 billion in value nationwide) and the British plan appears fraught with potential problems, even having learned from the experiences of continental cash-for-clunker experiments.

Back in the states, there seems to be little doubt that some form of cash-for-clunker scrappage bill will become law. Reuters reports that Goldman Sachs is already upgrading FoMoCo’s rating on the twin assumptions that GM and Chrysler will enter bankruptcy and that a clunker bill will be passed. Two competing bills have already been introduced (Tom Harkin’s S.3737 and Betty Sutton’s H.R.1550) and industry lapdog John Dingell has promised to include a similar provision in the upcoming climate change bill. This despite warnings from Britain that clunker bills are extremely inefficient as an environmental measure at best, and could actually increase carbon emissions.

The major concern with a possible US clunker bill is the indication that only “domestically produced” vehicles would qualify for federal bob. Both Harkin and Sutton’s bills have some form of “Buy American” stipulations. Harkin’s is particularly protectionist, while Sutton’s includes vouchers for certain vehicles built in North America (although at lower levels than vehicles “manufactured in the US”). Dingell will certainly try his darndest to funnel voucher money directly to Detroit. Though these measures seek to mitigate a lack of manufacturing stimulus that has been a noted criticism of European scrappage bills, yet more unintended consequences await such provisions: namely challenges on free-trade terms from Canada and Europe.

But such measures will be necessary to ensure any benefit at all to the US industry, which has weaknesses in its small-car portfolio, where scrappage-stimulated sales have been boosted the most. Absent environmental and manufacturing benefits (assuming the US wants to avoid a nasty trade war), a scrappage bill will benefit only scrap yards and new-car dealers. And yet an overabundance of dealers is fundamental to the auto industry’s wider woes. Though Europe’s scrappage results look good on paper to a sales-starved US industry, the consequences don’t seem to outweigh the benefits.

By Edward Niedermeyer on April 20, 2009

A few weeks of vacation from the blogosphere’s non-stop news cycle can leave a blogger feeling a bit behind the times. Two weeks is an eternity in internet time, but stepping away from the barrage of news, spin, hype and hysteria is good for the sense of perspective. Especially if the down time is spent exploring countries on the local typical family vehicle, complete with two wheels, four speeds and about 100ccs of thundering power. Beyond the sheer novelty of seeing entire families commuting on a moped (”Daddy, Nguyen isn’t staying on his side of the pillion seat”), travel in the developing world shows how insulated America is from the transportation realities of the rest of the world. If the $1,000 entry to the world of moped ownership is a major (if attainable) hurdle for workaday Vietnamese, even sub-$10K vehicles face what a GM sales release might call “a challenging sales environment.” Try to explain the “green premium” for hybrids and plug-in vehicles to an auto-aspirational third-worlder, and watch as the idea of paying more for less room and power draws only puzzled bemusement. Hair shirts, it appears, are strictly a fad for the western and wealthy. Case in point: the world’s first plug-in hybrid, the Chinese BYD F3DM.

BYD’s Corolla-aping PHEV raised more than a few eyebrows (many skeptical) when specs and concepts first appeared. Warren Buffet’s hefty investment into the cell phone battery maker quieted the skeptics and gave green-hued futurists a license to thrill. A 60-mile plug-in range, a multiple-mode hybrid system and a price tag under $25K had American hypermilers factoring in local tax credits and greengasming at the fantasy of it all. But in the world’s new largest market for automobiles, even $20K is a huge amount of money. And it turns out that one society’s eco-fantasy is another society’s overpriced, overly-complex answer to a question nobody has asked.

Xinhua reports (yes, nearly a week ago) that BYD’s F3DM has utterly failed to attract Chinese consumers; the firm has sold only 80 models since it went on sale in December. Apparently 20 of those were bought by the city of Shenzhen (think China’s Detroit) with the rest going to the local branch of China Construction Branch. In fact, BYD never even attempted to target private consumers with the model, despite the fact that an F3DM costs 30-40 percent less than a Toyota Prius (which only sold about 3,500 units in China between 2006 and 2008). Even the government isn’t rushing to put its citizens in the alleged volks-hybrid, offering a $7K hybrid subsidy to fleet buyers only.

Even with government help bringing the F3DM’s price under $20K, fleet sales aren’t as strong as BYD had hoped. Shenzen’s plan to buy more for the city’s taxi fleet is on hold as even BYD officials admit that the price needs to come down. BYD’s CEO Wang Chuanfu says that increasing production volume could help bring the F3DM’s price to a more-realistic $15K, but without institutions stepping up to prime the sales pump, the promise of a sub-$10K PHEV (after government subsidies)—and mass market sales—remain out of reach.

And even though the F3DM isn’t dependent on a charging-station infrastructure, price isn’t the only concern keeping buyers away. BYD faces an image challenge having never made anything more car-like than a laptop battery just a few years ago, and even its much-vaunted battery technology seems to struggle to meet on-paper performance numbers. According to Xinhua (hardly bomb-throwers when it comes to Chinese businesses), the 60-mile electric range is only attainable driving at a steady 30 mph. And recharging from a home wall socket takes nine hours.

But these tradeoffs and the correlating plug-in efficiency rewards only have meaning in the context of price, and here the lesson for Chevy’s Volt are plain to see. GM’s $40K profitless wonder defies fiscal logic on a comparable scale, offering only the most image-conscious greenies a value proposition worth even including. Like the F3DM, the Volt’s target audience (if not consumer) is the government, and the same increased volume-decreased price mirage lingers on the horizon. But unlike China (BYD expects its sales to double for the second year in a row, hitting 400,000 units), America’s demand for automobiles is in double-digit decline. And that includes demand for the much cheaper hybrids that are already available in the marketplace.

But we don’t have theorize about private PHEV sales levels for much longer. Shenzhen rolled out hybrid subsidies for private consumers this month which would cut the price of an F3DM in half, to about $10K. This coincides with a BYD plan to launch “a mass marketing excercise to promote the car to private buyers.” But if the car-crazed, yet pragmatic Chinese do start buying the F3DM, it will be at half the original MSRP, a feat that GM can’t hope to pull off with its Volt. Unless they just slap in powertrains from BYD, which is hedging its consumer-market gamble by offering to license technology to Western firms. In any case, BYD’s consumer sales push will give us some idea of private PHEV demand (and its required stimulus) by the time the Volt launches. Sales trends are easier to follow when they start at 80 units per quarter.

By Bertel Schmitt on April 18, 2009

In November 2007, VeeDub head honcho Martin Winterkorn announced his version of the Schlieffen Plan. Dubbed “Strategie 2018,” Winterkorn plotted the overthrow of GM and Toyota from the top of the worldwide sales charts. Winterkorn called for VW to rule the world in sales, profits, innovation and customer satisfaction by 2018. When the plan was announced, the MSM feted it, insiders (this reporter included) rolled their eyes and denounced the announcement as the usual hubris of an incoming CEO, a suit who’d be busy collecting his pension by the time 2018 rolled around. In any case, by 2018, the Generalstabsplan would long be forgotten and superseded by at least five other grand strategies.

A month ago, the worker’s council at Volkswagen said that the plan has merit. “All at Volkswagen agree that the targets of Strategie 2018 haven’t changed and that we will reach them,” said workers council chief Bernd Osterloh. That story didn’t get much traction. The few who read it sighed. Through plain dumb luck and the incompetence of others, VW may be closer to “mission accomplished” than anybody dared to think.

It’s a done deal: VW will surpass GM in sales this year to become world number two, behind Toyota. Now, Reuters reports that “Volkswagen AG may have overtaken Toyota Motor Co to become the world’s top-selling carmaker in the first quarter, thanks to government incentives that fueled demand in VW’s major markets.”

VW’s overall deliveries to customers worldwide fell 11 percent to around 1.39m vehicles in Q1. Others fell faster and harder, enabling VW to increase its share of the global passenger car market by 130 basis points to 11.0 percent.

“Toyota has given no forecast for retail sales, but its latest estimate for shipments for the 2009 first quarter is 1.23m vehicles, down 47 percent from a year earlier,” Reuters says.

“Volkswagen has the luck of being strong in the markets that are currently growing, while Toyota is exposed to those that are collapsing,” says motor mouth Ferdinand Dudenhoeffer in a rare case of seeing the obvious. VW’s failure to get anywhere in the toxic US market is now its savior. Where you have no significant sales, you cannot have significant losses.

Volkswagen has a very strong position in the world’s only significant growth market, China. In the PRC, VW surpassed the 1m mark last year. It produced more cars in China than Germany. Toyota has seen sales fall every month of this year in China, its third-biggest market. Volkswagen is benefiting from government stimulus plans for the car industry that have boosted demand in Germany, China and Brazil, its three biggest markets that together accounted for half of all group sales in the first quarter.

While VW is lucky to be in the right place at the right time, Toyota definitely finds itself in the wrong places at the wrong time: Toyota’s first-quarter US sales fell 36 percent, while sales in Japan for the core Toyota brand plummeted 31 percent. The two markets account for just under half of its global sales.

Volkswagen China’s Winfried Vahland quickly positioned himself as the top general in Volkswagen’s audacious plan to subjugate Toyota. “We have launched Strategy 2018 in line with the long-term objectives of the Volkswagen Group in China,” Vahland said to China Daily. Note the “We have launched.” Vahland said he would increase annual vehicles sales in China from the current 1 to 2 million units as well as enlarging its fleet by least four models per year by 2018.

The former controller, Vahland, had an uneventful career at VW and his dispatch to Beijing as head of the Volkswagen Group in Beijing was widely seen as a promotion to Volkswagen’s Siberia. The real power centers of VW China are at SAIC in Shanghai and FAW in Changchun. Now, Vahland basks in the limelight of being the frontline general of Volkswagen’s attack on a weakened Japan.

In Germany, VW benefited from the Abwrackprämien boom. Deliveries rose 4.5 percent to about 251,500 vehicles during the quarter. More than 160,000 new orders were booked as owners turn in their clunkers for a new one and €2.5K from the government.

Even in cratering Russia VW grows. Despite a 39 percent contraction in overall Russian demand, Volkswagen grew its volume by 14 percent, making VW the fourth-largest manufacturer in the country.

NPR can’t believe their ears: “Come on? Volkswagen? The world’s top selling automaker? That sounds impossible. Last year, Toyota crushed VW, selling almost three million more cars and trucks. But in the first quarter, Volkswagen sold more vehicles than Toyota even estimates it shipped. Analyst John Wolkonowicz at IHS Global Insight calls it a fluke.”

The disturbing news of the arrival of the former axis member at the gates of Aichi, Nagoya, results in grave head-nodding in the land of the rising sun. “Volkswagen is a big competitor for Toyota,” said Koji Endo, auto analyst at Credit Suisse in Tokyo. “Audi is strong, Volkswagen is strong, and they’re making good use of their small cars.”

The stock market greeted the news by lifting VW’s tock price. VW has also moved up in stock value ranking, grabbing the No. 2 spot behind Toyota, whose market capitalization of $133b still outstrips the German carmaker’s $100b. For now.

By Sajeev Mehta on March 27, 2009

Our president recently hit the late-night talk show scene, giving all a taste of the “Washington Bubble.” He’s not alone: Judging by the comments around the Interweb, every red-blooded American automotive journalist totally hearts the 2010 Taurus SHO. But does the journos’ wish for a reincarnated SHO jibe with the harsh reality of Ford’s market demographics? Or to paraphrase Norm MacDonald, “while the SHO may not prove anything, it certainly does nothing to disprove the theory that Volvo-based Fords are a waste of money.” Yeah, it takes brass balls to knock a car you’ve touched, but haven’t driven. But the circumstances around the all-new Taurus give me pause . . .

First off, how often to you hear about the regular Taurus? One key to the SHO model’s original success: The bread-and-butter version stood on its own for three years before the SHO’s arrival. But the average 2010 Taurus is almost old hat: We’ve seen this story unfold the past five years and nobody (with an open checkbook) cares one way or the other. Just like its 2005 counterpart, the latest version of the Taurus will be a respectable car. But this does nothing to disprove my theory that Volvo-based Fords are a waste of money.

Second, what makes lightning strike twice? Styling. Much of the first model’s interpretation of the Euro-Sierra worked. The 2010’s “kinetic” energy comes from the Mondeo. Only not so much. In pictures and in person, the Taurus fails to inspire. It’s no flying jellybean: There’s a Subaru-ish nose and a host of sheetmetal adaptations of the badass Ford Interceptor concept on the dorky hard points of the D3 chassis. Yet Peter Horbury, Ford’s North American design director, proclaims, “like the 1986 original, the new 2010 Taurus differentiates by combining style with substance.”

Too bad about that. There’s an obvious difference between a clean-sheet creation and a quickie conversion of a (failed) platform. Even worse, the 2010 Taurus redesign loses the previous model’s quarter window for black C-pillar trim, giving the illusion of a sleeker profile from a longer DLO (daylight opening). Which almost works—if you ignore the fat-assed beltline and tacky faux ventiports. No surprise, cash is tight and the basic badness of the D3 must remain intact.

The first two generations weighed around 3,300 lbs.; the engine put out torque-steer-free 220 hp; and there was a readily available manual transmission. The Taurus SHO was stupid fun in any dynamic event. Plus, the previous 100 percent American chassis scored safety ratings on par with Volvo sedans of the time.

The latest SHO is the Fat Elvis of sport sedans. The engine stumps up 365 hp, there’s mandatory all-wheel drive and automatic transmission, and a curb weight around 4,300 lbs. (300 lbs. over the Pontiac G8). The safety is stellar (because it is a Volvo). Given the feature creep of the Ford Flex, the SHO could sticker north of $35 large. With options, maybe over $40 grand. How great is that? I’ve voiced these concerns to pistonheads around the web and one answer comes back: Nobody pays sticker for a Ford, just wait for the discounts. So maybe this is a Taurus after all.

And if taking the Ford Taurus up to a dee-luxe apartment in the sky was bad enough, Ford didn’t learn from others’ mistakes. The Toyota Cressida/Avalon and Nissan Maxima prove that unique platforms for poser luxury sedans are out of the question. Mulally loves the Taurus, but he forgot its intrinsic appeal. The four-door was the go-getter working late nights in a cubicle, not an endowed trust-fund baby overdressed in a tuxedo at a garden party.

Not to mention the critics were proved right when calling out Ford’s decision to split the original Taurus’s market with two nameplates on two foreign chassis. It was a colossal falure in 2005. And 2008.

Come 2010, it will be three strikes against Ford’s great experiment. And even with the SHO’s halo, the market for Volvo-Fords over $30K is not promising. Which spells doom for the company spending millions (billions?) supporting a unique platform that’s yet to justify its existence to a fully leveraged Blue Oval. And with Volvo on the chopping block, what exactly does Ford expect to gain from billions of dollars in sunk cost?

If this “cut and run” attitude sounds unpatriotic, consider what Dearborn’s finest could’ve done with the money spent on the Taurus’s three generations of continuous improvements. With Mulally’s blessings, the Blue Oval Boyz could have used the money to make a Camry-killing sedan by now. But the saving grace now belongs to the Ford Fusion and its Hybrid halo. The writing is on the wall: Nobody gets a free ride. If the 2010 Taurus fails to SHO up with some cheddar, this dead weight has gotta go.

By Kristjan Ambroz on March 5, 2009

Was Aston Martin’s expansion into lower reaches of the luxury automotive food chain a good idea? The development of the AM V8 Vantage was at best a dangerous move. Why risk devaluing a storied brand? Looking at top line figures, it seems as if Aston’s “entry level” model is a solid success. Aston Martin’s sales have increased to levels the company hasn’t experienced since . . . ever. Thanks in part to the AM V8, Aston Martin turned a profit in the two years prior to its removal from the FoMoCo family. But looking one level deeper, the British automotive brand’s move down market triggered several less-than-savory consequences. They may be returning to bespoke, fragrant leather coops, but the prodigal chickens are back, and they’re bad.

When a luxury brand faces introduces a substantially cheaper offering, it “pulls forward” potential sales. Aston’s cheaper alternative to a previously ultra-exclusive automotive product gave people who very much wanted to buy into the brand a chance to do it a lot sooner. This sounds exciting to the marketing folks, both in terms of total revenue generated and brand prominence. But the fact that AM intenders were fulfilling their yearning for a luxury product at a much lower price got lost in the buzz.

In other words, in a related, unintended, but hardly unpredictable consequence of lowering the barrier to entry, Aston’s V8 sales reduced the pool of potential customers. Did the AM V8 attract buyers who would otherwise never have thought of an AM? Unlikely. But by putting more people into a cheaper AM, the company ran the very real risk of those customers failing to upgrade to a more expensive model later on. The chances are high that the Vantage V8 fully scratched their owners’ AM itch. Oops.

You can see the same thing happening over at Porsche. Although the Boxster/Cayman twins are cheaper, less powerful and less prestigious than the 911, they’re damn fine automobiles in their own right. If you really love your Boxster or Cayman, why not save yourself some money and stand pat? Which is exactly what has happened.

The 911 is a vastly more profitable car for Porsche. Hence Stuttgart fought nail and claw against this happy-Boxster owner dynamic. It took, what, 13 years before the Germans offered a limited slip differential in their mid-engined marvel? And yet, they caved anyway, offering the usual minor upgrades on their lower-priced model, giving Boxster/Cayman owners an excellent reason not to make the jump to hyper-price.

Note: the Boxster and Cayman did not cannibalize 911 sales directly. I highly doubt many Porsche owners traded down from a 911 to a Boxster. If you look just at the sales numbers, there was no initial negative effect from the Boxster. Armchair analysts tend to forget that Porsche was on the ropes when the Boxster was launched, and customer loyalty meant that 911 sales were relatively robust and stable. However, when the economy boomed in the ’90s and early 2000s, the 911 sales bump was way under expectations, exactly because of the Boxster.

Let’s have a look at Aston Martin’s numbers. [Click here for AM sales chart]

In 2006, the take-off of DB9 and Vanquish sales (seen in 2004 and 2005) reversed abruptly. When the V8 Vantage came to market, the 2005 levels of the high margin cars effectively halved. [I apologize for having only the European numbers in the graph, since I do not have access to global sales ones.]

It’s a familiar story. Jaguar XJ sales effectively halved with the arrival of the S-Type and never recovered. S-Type sales dropped by 40% with the introduction of the X-Type. Other premium brands have perhaps not experienced as pronounced an effect, simply because the much cheaper offering sold in much higher numbers (declines of 30-50 percent For the Bentley Arnage and Lamborghini Murcielago upon the arrivals of Conti GT/Flying Spur and Gallardo). Are these brands really better off for opening the gates wider?

For Aston, the answer seems pretty obvious. If nothing else, Aston residuals have started dropping rapidly. Most of this is due to the current economic crisis, but pre-AM V8 Vantage, the fall would not have been nearly so dramatic. When a seller gets rid of a two-year-old V8 Vantage for $60K, this drives down residuals for the DB9s and Vanquishes as well.

The new Aston Martin Rapide aims to add some luster to a brand tarnished by its own short-sighted model management. Oddly, both Porsche and Lamborghini are following the exact same trajectory at the same time. In all three cases, the brands are ignoring Ben Franklin’s sage advice: it takes many good deeds to build a good reputation, and only one bad one to lose it.

More than that, just as you can’t unring a bell, you can’t drag a brand back upmarket—at least not without waiting a long time for the dissonant echoes to fade.

By Marcus Topia on February 25, 2009

Over the years TTAC has witnessed many skirmishes in the war between those who support car dealers (mostly car salespeople) and those who oppose car dealers (the rest of the known sentient universe).  It’s time to put this particular argument to rest. Car dealers suck. Here’s why: buyers never know what kind of deal they got.

It really is as simple as that. Sure, there’s anecdotal evidence up the wazoo about pushy, intimidating, lying, cheating, incompetent, scummy salespeople. But here’s a little secret: Mother Theresa could be the salesgal and Gautama Buddha could be the F&I guy for Allah’s Ford Lincoln Mercury dealership and I still wouldn’t trust that I got a good deal.

Between sticker price, invoice price, dealer add-ons, incentives, rebates, discounts, hold backs, various employee/college grad/military/loyalty/your mama cash backs, weekly/monthly/yearly manufacturer-to-dealer quota deals and the other probable dozen or so on-again, off-again programs of which I have no knowledge, trying to make a good deal with a car dealer is a bit like trying to make a good deal with the devil himself.

Even when I think I made out like a bandit there’s always that lingering smell of rotten eggs in the air. And if I think I got a good deal shouldn’t I just be happy? Aren’t dealers entitled to make a profit, too? Absolutely not. Given the choice between thinking I got a good deal and knowing I got a good deal, I’ll take the knowing each time.

Unfortunately, after hearing twenty different price quotes from half a dozen dealers, each one implying it was as good an offer as I could get (until the next one, evidently), the knowing is nigh impossible. And even if the dealer is absolutely, positively, completely, 100%, without-a-doubt losing their shirt on the deal, 1) I’m not going to believe it because over the last hour(s) of sales negotiations you’ve lowered your price more than once so I’m getting the sense that there’s wiggle room, and 2) my concern isn’t whether or not you lose money, but rather that I get a good deal.

Car dealers, are you getting the point here? I don’t care if you don’t make a single red cent. I don’t care if the new salesguy I’m working with hasn’t made his first sale yet or if you go out of business and can’t feed your kids because of that great deal I just got (okay, I actually do care about the kids, but not enough to buy rust-proofing). I want to know I didn’t get ripped of while buying my brand-spanking-new massively depreciating “asset.” That’s it.

And assuming for just one infinitesimally small moment I actually did care if you made a tidy profit, just why exactly would I trust you to determine for me what a fair share of my money in your pocket is? I don’t know what you paid for the car, what it costs you to keep the car on the lot, or what kind of money/bonus you’ll get from the manufacturer when you sell it to me.

I have zero knowledge of your financial situation—except for the fact that you want to maximize your profit on the car you are trying to sell me. Which is absolutely groovy and above board given this wonderful free market society we live in. But don’t expect me to like it when your profit comes from my (non-self imposed) ignorance.

Yes, ignorance. Despite the plethora of pricing information on vehicles available online, there’s absolutely no way for the buyer to be aware of what a car costs you, and thus, what a fair deal for you would be.

A quick aside: while we’re all busy celebrating and abiding by that wonderful capitalist free market system, let’s not look too far behind the curtain at all those laws you passed in your state legislature to make sure that you were the only way I could continue to get my fix on those shiny dollops of addiction we call new cars.

If I never know what kind of a deal I got then I don’t know if I can trust you and if I don’t know if I can trust you then I’m not going to feel comfortable in my dealings with you and if I’m not going to feel comfortable in my dealings with you you’re either going to have to learn to deal with all the negative backlash that’s thrown your way or find a better way to do business and I guarantee you the only thing longer and more painful than this run-on sentence is the truth of said same.

I’m tied to you for new car sales and warranty work and the only ones who want it that way are you. That sucks. You suck. I’m done. We’re done.

By William C Montgomery on February 21, 2009

Public relations people say the darndest things. Shills for the car companies that chose to speak to the press at the 2009 Dallas Auto Show were no exception. The folks at Chevy are still “excited about the Camaro” a full three years after they excitedly announced the product. What impressive stamina they have. Buick intends to “shatter the myth that Buick only builds sedans for old people” Good luck with that. Chrysler Corp. claims twenty-four new cars and trucks are under development. “If taxpayers can support us, we’ll have some sweet products for you to test drive.” Goodie, maybe I’ll get to drive another redesigned Sebring. That’d be super sweet! But the biggest story coming from the show is what the PR refused to talk about.

“We’re here to talk about product,” the Dodge mouthpiece declared. “Any questions ’bout the company will be referred to Corporate.” This was a common theme. GM’s hackles shot up when a writer asked whether the new Lacrosse would be marketed in China, where the interior and electronics were designed and tested. “We can’t comment on what GM plans to do or not do in China,” the PR hack tersely said, cutting off the questioner. The phrase most oft uttered at the Ford, Buick, and Dodge press conferences: “We’re not prepared to comment on that.”

Other automakers simply didn’t even bother to speak to the press at all. This year’s itinerary of scheduled press conferences was only six manufacturers long and concluded by lunchtime. In recent years we have heard from Toyota, Cadillac, Nissan, Lexus, Hummer, Aston Martin, Saleen, Infiniti, Honda, and Subaru. All of these manufacturers were all present at the show (except Saleen); they just had nothing to say to the press corps.

Furthermore, the first two press conferences, Ferrari and Lamborghini, weren’t press conferences at all. The media assembled at the Ferrari display but there was no presentation so everyone dissipated. It wasn’t until later that I realized that one of the individuals gathered there was actually a soft spoken Ferrari rep. Ditto Lamborghini. Don’t the Italians have anything to tell the public about their cars, how their product is evolving, and all of the rest of the PR drivel that is communicated in a proper press conference?

But enough of all that. Here are the 2009 DAS winners and losers:

Winner: Buick Lacrosse. I’m not saying that this car will save Buick or GM or that it will even sell well. But The General certainly put his best spit-shined boot forward with this car. American styling built by Canadians on a new European developed platform with Chinese innards, this is truly an international car. The car bests Buick wannabes from Toyota and Lexus with dynamic styling and matches them with an outstanding interior. If this car drives half as well as it looks, it could be a contender. Buick claims to be in the midst of a “design renaissance.” That bit of hyperbole might actually be true.

Loser: Acura. Would somebody light that car a cigarette? The grille blighting every new Acura has the expression of Iron Man aglow in post-coital ecstasy—not something I want to see.

Winner: Ford Taurus SHO. Ford designer Earl Lucas shows that Americans can design a mature and subtle executive’s performance sedan. The car possesses the power and elegance of an NFL linebacker in a tuxedo. The D-sized sedan had the press mob drooling on the SHO’s exclusive Atlantic Green paint.

Loser: Chevrolet Camaro. The car is beautiful. The power is impressive. The price is right. The timing is awful. Look for the 2010 Camaro to makes its debut later this year. Its launch coincides with Transformers: Revenge of the Fallen, the sequel of the movie that it starred in two years ago (along side the lovely Megan Fox and the dopey Shia LaBeouf). The Camaro has been so prominent at auto shows and in GM advertising for so long that it’s already due for redesign.

I sat on the front row in the Buick press conference admiring the contemporary look of the 2010 Lacrosse. As I did so I realized that GM could not have produced a car of this caliber ten years ago. Neither could Ford. Life or death competition has forced these companies to break from many of the lazy and lardy practices of their past.

It might be too late for GM to right its ruptured and sinking ship, but the positive and constructive influence of free market pressure is in full display in their latest products. On the other hand, Chrysler remains distinctly unimproved. For every one thing they do right, they are doing five things wrong. This is about the same ratio of incompetence that they operated under two decades ago.  No amount of marketing spin masks that.

By Michael Karesh on January 12, 2009

Auto execs NAIASWell, the first day at the 2009 North American International Auto Show wasn’t such a bust in the end. I began the day by attending the Intro and North American Car of the Year Awards. During the intro talk the Detroit show sought to demonstrate that it was still relevant by trotting out senior executives from the auto companies that didn’t opt to skip this year’s show. Among the execs from GM, Ford, Toyota, Honda, VW, and so forth was… Henrik Fisker. “Which one of these is not like the others…” started running through my head. Pretty good for a guy who reskinned SL’s and 8’s until he figured out it was better to ride the green gravy train. But that’s the way Detroit rolls these days.

Looking over the finalists from my place amidst a press release of journalists, I wondered what the G37 was doing amongst them. The Infiniti’s engine is new for 2009, but the rest of the car is entering its third model year. Well, it wasn’t the Infiniti. The car in question was a Hyundai Genesis, which won the award. Apparently, when you can only see the top half of the car the resemblance is rather strong.

I then attended the General Motors presentation. A couple years ago, when the then-new Cadillac CTS was introduced, I commented that it was nice to see the people involved in creating the car up on stage with it. Especially since I knew some of them. This year, GM kicked itup a notch. They brought in a crowd of 100+ employees to stand behind the seated press and engage in a pep rally. Holding signs that said things like “here to stay.” The foreign journalist besides me asked who the prostesters were.  

The presenting GM execs called for a cheer from said cheering section each time a car rolled up on stage– and they paraded about 15 of them. A couple of times the exec called for a louder response. A bit much.

2010 Chevrolet Equinox instrument panelSome of the new GM cars were surprisingly impressive. The interior of the 2010 Equinox compact SUV is the best interior in a Chevrolet so far. It’s much nicer than that in a Toyota RAV4, and I’d also place it ahead of the Honda CR-V. Seat comfort is also excellent, front and rear. Why aren’t the seats in the larger Lambda crossovers nearly this good?

2010 Chevrolet EquinoxI actually found the firmer seats in the Cadillac SRX less comfortable than those in the Chevrolet. There’s also less rear seat and cargo room in the SRX. Overall, while the Cadillac’s interior is nicer than the Chevrolet’s, it will also be much more expensive. I expect the Cadillac will have a much harder time achieving its sales targets.

2010 Buick LaCrosse exteriorThe new Buick LaCrosse is a mixed bag. The exterior doesn’t quite work for me. The “sweep spear” comes up too high on the overly tall front fender. As a result, your eye is pulled in one direction by the beltline (base of the windows) and in the other by the “sweep spear.” Beyond this, the proportions of the front fender are generally forced and awkward.

2010 Buick LaCrosse door panelOn the other hand, the interior of the new LaCrosse is outstanding, the best yet from GM– better even than that in the Cadillac CTS. Real stitching on the instrument panel and door panels has been achieved at a Buick price by molding the stitching into the polymer panels. The panels aren’t actually upholstered as they are in newer Cadillacs, but they look upholstered. The center stack is nicely executed, with a definite upscale appearance. The curvy door panels are exceedingly well done. They combine a nicely padded armrest with a comfortable door pull, flowing organically into the instrument panel.

Is an outstanding interior enough to get people under 70 to consider a Buick sedan? Probably not.

2010 Chevrolet Cruze exteriorLooking back across the GM area, I wondered what a previous generation Audi A4 was doing there. Another case of mistaken identity: the Chevrolet Cruze. In the metal, the Cruze looks great– at least when it’s fitted with 19-inch five-spoke alloy rims. Inside, the instrument panel in the Cruze is trimmed in a woven fabric. This might not be to everyone’s taste, but it’s a huge step up from most compact car interiors.

2010 Ford Taurus exteriorFord has thoroughly revised the Taurus. The new car looks much more upscale, inside and out. Though the new grille is a bit too Subaru nondescript, the rear fenders have strong Bentley overtones. Viewed from the side the car has more presence than a Taurus has any right to.

2010 Ford Taurus door panelThe interior of the 2010 Ford Taurus is not far off the related Lincoln MKS’, but not up to the level of the Buick LaCrosse. The panel fits aren’t as tight or as precise, and the materials seem a bit cheaper. I was surprised to hear that features such as adaptive cruise control and massaging seats– usually only available on expensive luxury cars– will be available on the Taurus. On the downside, the interior is much less roomy than that of the current Taurus. Inside, it does not feel like a full-size car.

Chrysler 200C EVI skipped the Chrysler presentation, figuring the company had nothing in the pipeline. I later learned they’d shown a possible next-generation 300, billed as the 200C EV with an alt fuel powertrain. This concept’s much more curvy than the current 300; a huge advance over recent Chrysler efforts like the Sebring. But is there enough trunk space inside the sportily bobbed tail?

That’s it for today. More tomorrow.

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