Hyundai ix55: Worst Alphanumeric Name Ever?
By Justin BerkowitzSeptember 5, 2008 - 1,476 views
Yes, we all hate the alphanumeric nomenclature, snaking over the auto industry like poison ivy. And with only so many letters and numbers, we always expect some repeats (Lexus LS/Lincoln LS, Chrysler 300C/Mercedes C300, BMW X5/Mazda MX-5). Has Hyundai gone a character too far? The car we North Americans know as the Veracruz is being introduced to Europe as the ix55. Not only is this a bizarre thing to say down at the pub (Oh, I drove my ix55), but it’s awfully close to, well, a lot of other cars. Hyundai’s new scheme for European car names is to begin with the letter “i,” because if it worked for Apple, it’ll work for them. Or Mitsubishi’s “i car.” The X we can assume refers to this vehicle being an AWD crossover, and of course the 55 is because it has a 5.5 liter V8. Erm, no. Instead, it sounds to me like a mish-mash of BMW (xDrive 50) and the 55 immediately conjurs memory of a trillion Mercedes AMG cars with 55 at the end, from C55 to E55 to S55 to CL55 to CLK55 to ML55 to G55). Besides, what was wrong with Veracruz?
Posted in Branding | Capsule Reviews | Europe | Future Vehicles | Gizmology | High Finance | New Cars | News Blog | 28 comments 
Bailout Watch 24: “The playing field is not balanced”
By Justin BerkowitzSeptember 5, 2008 - 1,464 views
So writes former Chrysler outside counsel Steven Roby in a rebuttal Op-Ed in the Los Angeles Times today (the original LAT Op-Ed contended that the US government should not bail out American manufacturers). His thesis of “It’s not the Big 3’s fault” is supported with inventive arguments such as “It’s not the Big 3’s fault” and also “It’s not the Big 3’s fault.” More specifically, he writes that GM, Ford, and Chrysler are just ridiculously, unreasonably burderend by high health care costs, that foreign governments directly subsidize manufacturers, and that other countries manipulate currency. We’ve been through this, time and time again. (He also accuses foreign governments of indirectly subsidizing “their” automakers through grants to research universities. Apparently this lawyer has never heard of the Bayh-Dole Act, which allowed for private patents of government funded research at Universities. And I take it he also has never visited Stanford, Berkeley, Duke, UNC-Chapel Hill, Michigan State University, and so on.) But the big problem is that Roby’s article never recognizes any Detroit mistakes: that the Big 3 spent years raking in piles of cash because of SUVs, or benefitted from the chicken tax on pickups, or benefitted from the special EPA status of “light trucks,” or that Chrysler already was bailed out in the past 30 years, or that GM, Chrysler, and Ford haven’t built a truly competitive small car. Roby writes that “The Times should not judge GM, Ford and Chrysler unless it can walk in the shoes of the executives and production workers.” The production workers have gotten the shaft, and nobody is blaming them. But I’d love to walk in the shoes of an executive like Rick Wagoner, whose company can lose billions upon billions of dollars and still go home with a $14 million paycheck. No, the global market for cars is not completely fair. Time to stop complaining and deal with it. Still.
Posted in Bailout Watch | High Finance | Industry | News Blog | 34 comments
Bailout Watch 13: One Bailout to Unite Them All
By Edward NiedermeyerAugust 28, 2008 - 1,058 views
![We should all be screaming \"Don\'t do it!\"](http://www.thetruthaboutcars.com/wp-content/uploads/2008/08/detroit1.jpg "We should all be screaming \\"Don\'t do it!\\"")
Say what you want about Detroit, it still has some class. The media may already be counting the bailout billions, but the once-big three will be waiting until after Labor Day to visit Washington, hat in hand. Per Emily Post's corporate welfare etiquette, natch. The Wall Street Journal also reports that the Detroit three will speak with a single voice during upcoming meetings with federal loan officers. As in no screwing over Chrysler for a better deal. Of course that means the projected $50b will have to be split three ways. And then there's that damn CAFE ramp-up to worry about. In fact, Detroit insiders are already saying that 2011 compliance alone could take up the whole $50b. Why, it's almost as if Detroit might need even more money! But with political season in full swing and the economy emerging as a major issue, Detroit knows it has only to ask. Posturing representatives will hand out loans for the electoral feel-good, and before you know it there'll be a Volt in every pot. And billions of dollars in taxpayer liability for three spectacularly failing enterprises.
Posted in Bailout Watch | Chapter 11 | High Finance | Industry | News Blog | Politics | 8 comments
Chrysler Thinking About Selling Viper
By Frank WilliamsAugust 27, 2008 - 1,547 views
Rumors have been flying for quite a while that Cerberus would sell off parts of Chrysler. Most of the conjecture centered around Jeep being the first to go. However, Automotive News [sub] reports the Dodge Viper could lead the exodus through the gates guarded by the three-headed dog. This morning Chrysler said they're "exploring strategic options for the Dodge Viper business… as the Company focuses on enhancing its core business and leveraging its assets." CEO Bob Nardelli doesn't deny they're considering the sale. "We have been approached by third parties who are interested in exploring future possibilities for Viper." Then, proving he's unable to speak in any tongue but ManagementSpeak, he added, "As the Company evaluates strategic options to maximize core operations and leverage its assets, we have agreed to listen to these parties." But fans of the hotrod Dodge needn't feel betrayed. "Viper is an integral part of this Company's heritage. While this is a strategic review, our intent would be to offer strong operational and financial support during any potential transaction, in order to ensure a future for the Viper business and perpetuate the legacy of this great vehicle." In other words, "we're going to sell the IP rights to it lock, stock and sidepipes then market the remaining dealer stock as 'last of a legend' to get every cent we can out of them."
Posted in Branding | High Finance | Industry | News Blog | 21 comments
Euro Cars Top Lease List
By Frank WilliamsAugust 26, 2008 - 1,301 views
The Detroit automakers are trimming or eliminating their leasing programs due to plunging resale values and inflated residuals. In fact, in July leases accounted for only 19.7 percent of retail volume for the U.S. auto industry. However, leasing remains the way a lot of automakers use to put someone into an expensive car they really can't afford. And four of the most-commonly leased vehicles in the U.S. are BMWs (7 Series, Z4, 6 Series and X3). Bucking the current trend, sales and marketing VP at BMW Group Financial Services, Daniel DeChristopher, told BusinessWeek "we are still very committed to the leasing business." That's even though 70 percent of off-lease vehicles are returned to BMW Financial to be resold, usually as certified pre-owned cars. BMW is hedging its bet on leasing, though. They're also offering 0.9 percent APR loans during their "gotta unload these '08s before the '09s show up" sale. The top ten most commonly leased vehicles, and the percentage of them leased between January 1 and August 10 this year are:
BMW 7 Series - 85.3 percent
Saab 9-7x - 82.2 percent
Audi A6 - 74.1 percent
BMW Z4 - 70.7 percent
Mercedes E-class - 70 percent
Range Rover - 69.6 percent
BMW 6 Series - 68.6 percent
Audi A4/S4 - 68 percent
BMW X3 - 67.3 percent
Jaguar XJ - 65.8 percent
Posted in High Finance | Industry | News Blog | Sales | 21 comments
Arabian Investors Express Interest in HUMMER
By Frank WilliamsAugust 26, 2008 - 941 views
Why doesn't GM just go ahead and admit they're selling HUMMER? In spite of accusations of media "speculation" and assertions they "have not negotiated with any parties" by HUMMER GM Martin Walsh, GM just keeps moving steadily towards the auction block. In a phone interview, General Motors Middle East Managing Director Terry Johnson told Reuters: "There has been interest from various parties within the Gulf … there is a precedent in the cases of Aston Martin, Ferrari or Daimler and those kinds of solutions could be very realistic solutions." GM is getting their paperwork ducks in a row and "has initial expressions of interest from [two] potential buyers that it hopes to develop into formal sale talks." However, in keeping with the corporate party line, Johnson also stated that keeping HUMMER humming is still "a realistic option" and selling was not a "forgone conclusion." The sun rising tomorrow isn't a "foregone conclusion" either, but the smart money is still on it happening.
Posted in High Finance | Industry | News Blog | 17 comments
Bailout Watch 11: A Bailout By Any Other Name…
By Frank WilliamsAugust 25, 2008 - 1,273 views
In Farago's editorial about the domestic automakers' attempts to get $25b in federal loans, he stated, "it's a prelude to a kiss: the REAL bailout (in for $25b, in for another $25b)." Well, it didn't take long for both sides to pucker up. The International Herald Tribune reports this morning the total has grown to $50b– it turns out the $25b was just for the first year. That would be followed by additional $15b in the second year and $10b more in the third year. Why? The UAW's legislative director, Alan Reuther explains "the amount of concern and urgency from the Detroit companies has increased in the last month and significantly ratcheted up what they're communicating what their funding needs are." But he makes it clear you don't dare call it a bailout: "We don't see it as a bailout. We see it as government assistance to help retooling tied to the production of these advanced technology vehicles." Whatever. It still amounts to billions of the taxpayer's dollars going to fund companies which have been driven to the brink of bankruptcy by inept management who collected obscene salaries for doing so. If they do get these handouts, it should include an oversight committee from outside the industry and from outside congress to make sure the money goes for vehicle design and retooling. Not a cent should be allowed to go to executive salaries or perks, bonuses, lobbyists or any of the other thousands of ways the automakers seem to find to fritter away money. And once that's gone, that's it. No third chances! And furthermore… Huh? … Oh… OK. Here comes the attendant with my Thorazine. I'll go sit quietly in the corner now.
International Herald Tribune »
Posted in Bailout Watch | High Finance | Industry | News Blog | Politics | 22 comments
Toyota Tops GM in Lending
By Frank WilliamsAugust 25, 2008 - 911 views
As you might expect, with Toyota nipping on GM's heels sales-wise, the two companies' financial arms have also been neck-and-neck. Automotive News [sub] reports for the first half of 2008, though, Toyota Financial Services pulled ahead of GMAC as the biggest U.S. auto lender. Research done by AutoCount estimates TFS had a 6.35 percent share the lending market, while GMAC held 6.2 percent. With GMAC's cuts in leasing, they expect TFS to stay ahead for the rest of the year. In the first six months of this year, 58 percent of Toyota, Lexus and Scion vehicles sold in the U.S. were financed in-house. About 46 percent of GM vehicles in North America were financed by GMAC. Other captive finance companies in the top ten were: American Honda Finance at fourth overall with 4.95 percent of market share; Ford Credit at fifth with 4.77 percent; Chrysler Financial holds seventh place with 3.15 percent and Nissan Infiniti Financial is eighth with 1.87 percent market share. The other four spaces are held by various banks. Perhaps a more interest and relevant stat would be the total lost in over-estimated residuals and bad credit risks. Anyone want to guess who'd be most likely to top that list?
Posted in High Finance | Industry | News Blog | 2 comments
Bailout Watch 10: TTAC Called It– Wall Street Journal Reveals Motown’s $25b Bailout Plan
By Robert FaragoAugust 22, 2008 - 2,740 views
And so it begins. The Wall Street Journal' s lead editorial makes it perfectly clear that Motown's plans to tap your taxes is well advanced. And guess what? It's a god damn conspiracy! "Earlier this month… the top dogs at Ford, GM and Chrysler had a meeting of the minds and decided that the way out of their current losing streak would be to ask the feds for a lifeline. They figure they'll need $40 billion or so to ride out their current troubles until they reach the promised land of hybrids, the Chevy Volt, and, who knows, maybe even profits. We've since heard that lobbyists for the car makers are taking their pitch for direct federal loans around Washington, with a goal of unveiling the plan after Labor Day — conveniently in the frenzy of the fall election campaign. They've briefed Congressman John Dingell, the dean of Michigan Democrats, as well as officials in the Bush White House… The plan is for the government to lend some $25 billion to auto makers in the first year at an interest rate of 4.5%, or about one-third what they're currently paying to borrow. What's more, the government would have the option of deferring any payment at all for up to five years." TTAC will have an editorial on this shortly.
Posted in Bailout Watch | Chapter 11 | High Finance | News Blog | Taxes | 92 comments
GM CEO on HUMMER: Should it Go or Should it Go?
By Frank WilliamsAugust 22, 2008 - 1,394 views
It's always good to know the boss has your six. Yesterday we reported HUMMER's general manager said all the talk about GM selling eco-unfriendly-brand was "just speculation." According to the Wall Street Journal, Rick Wagoner announced that his employer is "preparing data and other materials to open formal talks" with "potential buyers." So much for "speculation." The usual "people familiar with the matter" told WSJ that GM is no longer "seriously considering" revamping HUMMER. Basically, GM can't afford to do it because of "a potential liquidity crunch" (to put it mildly). Of course as WSJ points out, selling HUMMER would be only "a minor part of GM's plan to raise the $15 billion in additional liquidity by the end of 2009 that it needs to remain viable." The only real hurdle they'll have in shutting down HUMMER and shuffling it off to India, China or Russia will be dealing with approximately 170 HUMMER dealers who have state franchise laws on their side. No doubt the vultures lawyers are already circling.
Posted in High Finance | Industry | News Blog | 7 comments
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