The Truth About Cars » Industry 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 Jul 2014 16:29:19 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 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 » Industry http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com/category/news-blog/industry/ 2015 Toyota Yaris Has “European Flavor”, We’re Afraid To Ask… http://www.thetruthaboutcars.com/2014/07/872122/ http://www.thetruthaboutcars.com/2014/07/872122/#comments Wed, 23 Jul 2014 15:00:01 +0000 http://www.thetruthaboutcars.com/?p=872122 2015_Toyota_Yaris_001

 

Toyota is touting a new “European flavor” for the 2015 Yaris. I’m not sure what that means, but it does evoke bad memories of the chevre I left in my suitcase after coming home from the Paris Auto Show. All jokes aside (and that was bahhhhh-d), our Yaris will likely be built in France, but Toyota is looking for a way to both incorporate that into their messaging, and avoid telling everyone that their new subcompact is built by a bunch of socialist surrender monkeys. It’s not easy to explain the poor economics of building a subcompact car in Japan, but telling American consumers that its made in France is likely even more difficult. Not much has changed mechanically, and the 4-speed automatic still remains. C’est la.

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Been Dacia’d And Confused For So Long It’s Not True… http://www.thetruthaboutcars.com/2014/07/been-daciad-and-confused-for-so-long-its-not-true/ http://www.thetruthaboutcars.com/2014/07/been-daciad-and-confused-for-so-long-its-not-true/#comments Wed, 23 Jul 2014 14:50:42 +0000 http://www.thetruthaboutcars.com/?p=872090 420x280xvauxhall-viva-fr.jpg.pagespeed.ic.Q1f1uLPQ4g

General Motors took the step of killing off Chevrolet in Europe earlier this year, and has long attempted to position Opel and Vauxhall as mainstream but slightly more premium offerings (analogous to how Volkswagen was once marketed in the United States). And that makes news of a new line of budget cars all the more confusing.

Just-Auto reports that Opel and Vauxhall will launch two new budget models to attract customers who may have previously opted for Chevrolet cars. First is the new Viva, based on the next-generation Chevrolet Spark. A small SUV, set to rival the Dacia Duster, is also being considered.

Rather than aiming for a brand that specifically targets no-frills motoring, it appears that GM is aiming to emulate Skoda, which at least has some measure of style and chic appeal, even as it positions itself as a value brand. The new Viva looks to be a pretty stylish car, but the brand positioning appears to be contradictory. How can Opel and Vauxhall aspire to sell pseudo-premium sedans like the Insignia while also pushing a new line of budget cars? Then again, nobody can ever accuse GM of having a consistent or coherent brand strategy in Europe.

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UAW Aiming For Works Council In Tennessee http://www.thetruthaboutcars.com/2014/07/uaw-aiming-for-works-council-in-tennessee/ http://www.thetruthaboutcars.com/2014/07/uaw-aiming-for-works-council-in-tennessee/#comments Wed, 23 Jul 2014 14:22:19 +0000 http://www.thetruthaboutcars.com/?p=871474 0

The UAW’s new “voluntary” union local at VW’s Tennesse assembly plant will be aiming for the first Works Council at a North American plant.

Just-Auto reports that Gary Casteel, the UAW’s secretary-treasurer, told the outlet

“The commitment of this Local is to form the first works council – we intend to negotiate the first German-style works council.”

The announcement comes on the heels of VW global works council head Bernd Osterloh being appointed to the board of directors for Volkswagen Group of America. Osterloh, who has previously made waves over any moves that would harm union organization, will be a powerful ally for the UAW, and their union allies in Germany.

Osterloh’s appointment to the board could very well have been a concession to the powerful IG Metall union, which has ties to both Osterloh and the UAW. Having exhausted all other options, including a plant vote on organization and an appeal to the National Labor Relations Board, Osterloh’s board seat and the “voluntary” union are the last options the UAW likely has in their arsenal.

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Lord, I Was Born A Ramblin Van http://www.thetruthaboutcars.com/2014/07/lord-i-was-born-a-ramblin-van/ http://www.thetruthaboutcars.com/2014/07/lord-i-was-born-a-ramblin-van/#comments Wed, 23 Jul 2014 14:00:54 +0000 http://www.thetruthaboutcars.com/?p=870458 hyundai-cargo-van-spy-photo-01

Is Hyundai making a play for the commercial van market in North America? Automotive News seems to think so.

These spyshots (from AutoGuide.comshow Hyundai testing a new large commercial van somewhere in Europe, whereas AN caught it testing in California. Either way, it’s clear that Hyundai wants in on the action that the Sprinter, Ram ProMaster and Ford Transit are eagerly targeting.

 

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SAE J2601, J2799 Standardize Hydrogen Fueling, Increase FCV Range http://www.thetruthaboutcars.com/2014/07/sae-j2601-j2799-standardize-hydrogen-fueling-increase-fcv-range/ http://www.thetruthaboutcars.com/2014/07/sae-j2601-j2799-standardize-hydrogen-fueling-increase-fcv-range/#comments Wed, 23 Jul 2014 13:00:29 +0000 http://www.thetruthaboutcars.com/?p=871970 hydrogen_fueling_station

It took 13 years, but SAE International has introduced a new standard for hydrogen fueling stations: SAE J2601.

Autoblog Green reports J2601 will enable fueling of FCVs at 35 and 70 megapascals (MPa) of pressure, delivering 3- to 5-minute fueling times like those of gasoline-powered vehicles. This will likely be good news for all involved in the hydrogen movement, especially as infrastructure is only in the embryonic stage at this point — most located in California.

Meanwhile, another standard — SAE J2799 — will better enable communication between the FCV and the pump via wireless transmission, helping to boost driving range to over 300 miles per tank via a high State of Charge, or SOC.

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Galhotra Takes The Reins As Lincoln’s New President http://www.thetruthaboutcars.com/2014/07/galhotra-takes-the-reins-as-lincolns-new-president/ http://www.thetruthaboutcars.com/2014/07/galhotra-takes-the-reins-as-lincolns-new-president/#comments Wed, 23 Jul 2014 12:00:04 +0000 http://www.thetruthaboutcars.com/?p=871938 ashwani-kumar-galhotra.img.1375822969106

As one of his first major moves since becoming CEO, Ford’s Mark Fields named vice president of engineering Kumar Galhotra as president of Lincoln, effective September 1.

Automotive News reports Galhotra, who will report directly to the new CEO, will be the premium brand’s first president since Al Giombetti left the post in 2007. The move will also reduce executive vice president of global sales, service and marketing Jim Farley’s role with Lincoln, which will be focused on marketing the brand once Galhotra takes over.

The new president — an engineer and product executive who has worked with Lincoln, Ford and Mazda in the past — will bring his marketing experience to the table as Lincoln prepares to launch in China later in 2014; he headed Ford’s Asia Pacific division from 2009 to 2013, and helped bring about the new Ranger pickup to market.

Speaking of the division, engineering director Jim Holland will move from there to replace Galhotra as Ford’s vice president of engineering, reporting to global product development chief Raj Nair.

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Daimler To Enter FCV Market In 2017 http://www.thetruthaboutcars.com/2014/07/daimler-to-enter-fcv-market-in-2017/ http://www.thetruthaboutcars.com/2014/07/daimler-to-enter-fcv-market-in-2017/#comments Wed, 23 Jul 2014 11:00:48 +0000 http://www.thetruthaboutcars.com/?p=871914 Mercedes Blue Efficiency

While Japanese and Korean automakers like Toyota and Hyundai are jumping into the hydrogen game, Daimler plans to begin its own journey in 2017.

Automotive News interviewed Daimler head of corporate research Herbert Kohler about his employer’s hydrogen plans. Kohler briefly reflected on how Daimler were questioned on focusing upon fuel-cell technology before everyone else, stating that if an automaker wasn’t now at least considering the game, it would have to ask itself “some uncomfortable questions.”

As for the timetable of releasing an FCV by 2017, he states that while Daimler had planned to do so by 2015 at the latest, its joint partnership with Nissan and Ford to develop the technology will give all three time to bring the tech’s high costs down amid increasing volumes by the time 2017 rolls around.

Finally, when asked how much Daimler would charge for their FCV — in light of the $68,000 price tag for the 2015 Toyota FCV — Kohler says his employer’s goal is to price its FCV on par with “the hybrid version of a comparable model.”

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Tata To Enter Global Passenger Market With Help Of Jaguar Land Rover http://www.thetruthaboutcars.com/2014/07/tata-to-enter-global-passenger-market-with-help-of-jaguar-land-rover/ http://www.thetruthaboutcars.com/2014/07/tata-to-enter-global-passenger-market-with-help-of-jaguar-land-rover/#comments Wed, 23 Jul 2014 10:00:44 +0000 http://www.thetruthaboutcars.com/?p=871890 Tata-Xenon-11

Having done well with Jaguar Land Rover in its portfolio, Tata Motors is now turning to its premium subsidiary for its own foray into passenger cars and SUVs.

Drive.com.au reports the parent company is using the technical and design know-how JLR to begin growing its passenger vehicle line in Australia and beyond, though Darren Bowler, managing director of importer Fusion Automotive, assures that no badge engineering would occur between the two brands.

What would be shared, according to Bowler, would be platforms and engines, such as the global platform underpinning the upcoming Nexon SUV that could “be used as an Evoque… a Tata, [or] a Jaguar,” as well as the Ingenium family of four-cylinder engines that will soon turn up under the bonnet of many a JLR product.

In the meantime, Tata Australia plans to tackle the medium- and heavy-duty markets with the Ultra and Prima, both joining the light-duty Xenon.

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Ford Announces 2.7L Ecoboost Powertrain Details http://www.thetruthaboutcars.com/2014/07/ford-announces-2-7l-ecoboost-powertrain-details/ http://www.thetruthaboutcars.com/2014/07/ford-announces-2-7l-ecoboost-powertrain-details/#comments Tue, 22 Jul 2014 16:24:22 +0000 http://www.thetruthaboutcars.com/?p=871610 15FordF150_04

Ford has announced power figures for the 2.7L Ecoboost engine powering the new F-150 – and later on, other Ford models – while also announcing a sub-5,000lb curb weight.

The new 2.7L engine makes 325 horsepower and 375 lb-ft of torque, with a maximum tow rating of 8,500 lbs and a 2,250 lb payload capacity. The venerable 3.7L V6 will be dropped for a 3.5L version that makes 283 horsepower and 255 lb-ft of torque. Towing capacity is up 900 lbs from the 3.7L to 7,600 lbs while payload capacity sits at 1,910 lbs.

Curb weight for the new trucks should sneak it at under 5,000 lbs, with the new Lariat trim shedding 732 lbs versus the 2014 truck. According to Ford, a 2015 Lariat will weight 4,942 lbs, though the actual fuel economy numbers weren’t announced alongside these figures, nor was any indication given regarding the power figures for the 3.5L Ecoboost or 5.0L V8.

All in all, we still don’t know a lot about specific weights, trim levels, engine options, axle ratios or fuel economy numbers. Without that data, it will be hard to make cross-comparisons between the new F-150 and competitor trucks. As it is, some GM trucks also weigh less than 5,000 lbs, so Ford’s PR boast is a bit meaningless without the proper context. But without more information, all we have to go on right now is Ford’s corporate messaging.

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Foxx: No Penalties Issued Within NHTSA Over GM Ignition Recall http://www.thetruthaboutcars.com/2014/07/foxx-no-penalties-issued-within-nhtsa-over-gm-ignition-recall/ http://www.thetruthaboutcars.com/2014/07/foxx-no-penalties-issued-within-nhtsa-over-gm-ignition-recall/#comments Tue, 22 Jul 2014 14:00:50 +0000 http://www.thetruthaboutcars.com/?p=871434 Anthony Foxx + Barack Obama et al

Though General Motors gave 15 of its employees the ax over their part of the February 2014 ignition switch recall, U.S. Transportation Secretary Anthony Foxx told those in the National Press Club Monday that no one in the National Highway Traffic Safety Administration was fired or disciplined over their part of the recall and subsequent fallout.

The Detroit News reports that while no one was penalized in the slightest within the agency, Foxx ordered a review on the NHTSA’s handling of the recall and other complaints:

I’ve asked our inspector general to go through and do an after-action on this GM situation to see if there is anything we didn’t do that we should have done. We will learn from that report, and until that time we have our team intact.

Foxx also defended the NHTSA in regards to the possibility of rehiring former employees who are currently working in the auto industry, proclaiming it has “ethical requirements that really guard against” undue influence in favor of the automakers.

Meanwhile, both houses of Congress are planning a second round of hearings with the agency later this year, with the goal to determine why it failed to link a series of complaints over ignition/airbag issues in Chevrolet Cobalts and Saturn Ions to the out-of-spec switch at the heart of the February 2014 recall.

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Tesla Idles Plant For Two Weeks For Model X-Related Production Upgrades http://www.thetruthaboutcars.com/2014/07/tesla-idles-plant-for-two-weeks-for-model-x-related-production-upgrades/ http://www.thetruthaboutcars.com/2014/07/tesla-idles-plant-for-two-weeks-for-model-x-related-production-upgrades/#comments Tue, 22 Jul 2014 12:00:38 +0000 http://www.thetruthaboutcars.com/?p=871402 tesla-model-x

Those who just ordered their Tesla Model S may need to wait a bit, as the premium EV automaker has idled its California factory in order to tool up for the upcoming Model X SUV.

Bloomberg reports the reconfiguration — including 25 new robots on the floor and other modifications — began June 20, and will conclude in two weeks to the tune of $100 million and a 25 percent increase in production.

Tesla has given its assembly workers the option of reporting for maintenance and training shifts during their time off, as well as using that time for vacation.

Once completed, the newly upgraded floor should pump out some 1,000 units of the Model S per week, as well as allow for both the S and the X to be screwed together next to each other. Pricing for the EV-SUV has yet to be announced.

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2016 Ford Mustang GT350 Will Get Even More Hardcore Track Model http://www.thetruthaboutcars.com/2014/07/2016-ford-mustang-gt350-will-get-even-more-hardcore-track-model/ http://www.thetruthaboutcars.com/2014/07/2016-ford-mustang-gt350-will-get-even-more-hardcore-track-model/#comments Tue, 22 Jul 2014 11:30:06 +0000 http://www.thetruthaboutcars.com/?p=870434 450x298xMustang-SVT--450x298.jpg.pagespeed.ic.TcgSm69vlE

With recent spyshots of the Ford Mustang GT350 hitting the web, we contacted our Ford sources for more info, and got a few more tidbits about the car.

Our sources tell us that a magnetic shock absorber system is under development, along with an even more hardcore, track-focused model. Details on this were scant, but better brake cooling and “cooling pump ports” for the transmission. If so, this would echo the last-generation Boss 302 and the Laguna Seca model, which went even further in its performance-focused mission by doing away with the back seats and adding additional bracing.

One notable absence on the new GT350: an engine cover. Ford has apparently decided to show off the all-new 5.2L Ti-VCT naturally aspirated motor, without any plastic adorning the engine bay. What a relief.

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Mercedes Debuts B-Class Electric Drive To US Market http://www.thetruthaboutcars.com/2014/07/mercedes-debuts-b-class-electric-drive-to-us-market/ http://www.thetruthaboutcars.com/2014/07/mercedes-debuts-b-class-electric-drive-to-us-market/#comments Tue, 22 Jul 2014 11:00:23 +0000 http://www.thetruthaboutcars.com/?p=871330 2014-b-class-electric-drive-2

If the upcoming Smart ForTwo isn’t quite to your liking, yet you do want something about as small with a tri-pointed star on its nose, Mercedes has brought over its B-Class Electric Drive.

Autoblog Green reports the EV compact made its world showroom debut in the United States last week, appearing in 10 coastal states at first before heading inward toward the heartland down the road. Price of admission begins at $41,150, which will net the driver an 87-mile single-charge range and 84 MPGe, about the same as the Nissan Leaf and BMW i3.

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Book Review: Stealing Cars http://www.thetruthaboutcars.com/2014/07/book-review-stealing-cars/ http://www.thetruthaboutcars.com/2014/07/book-review-stealing-cars/#comments Tue, 22 Jul 2014 10:30:28 +0000 http://www.thetruthaboutcars.com/?p=870282 81EbHc-EfRL._SL1500_

TTAC’s had periodic posts about car theft, from a recent news item on a student project disappearing in the night (here) to hacking into a car (here and here). A recent book however provides a, well, book-length treatment.

Stealing Cars: Technology & Society from the Model T to the Gran Torino ( Johns Hopkins, 2014. ISBN 978-1-4214-1297-9) is an examination of the phenomenon of car theft through the era of the automobile. Authors John A. Heitmann and Rebecca H. Morales lead off with this quote

“‘When I leave my machine at the door of a patient’s house I am sure to find it there on my return. Not always so with the horse: he may have skipped off as the result of a flying paper or the uncouth yell of a street gamin, and the expense of broken harness, wagon, and probably worse has to be met.’ That solitary impression soon proved to be wrong.” (p. 7)

First, there’s the historian at work, ranging from the first report of car theft in the Horseless Age of 1902, to the new methods of stealing cars noted on TTAC. Then there’s the organization behind it, or the lack thereof: from joyriding and local transportation in the early days (90% of all thefts, corresponding to a 90% recovery rate), to criminal operations seeking entire cars or merely parts – from pulling tires off cars during the WWII era of rationing rubber to cartels today paying for stolen cars with drugs. This thread is backed by an appendix with tables of data.

Then there’s the response to car theft, from the individual level to the lobbying of insurance companies. Technological responses were one avenue. These ranged from ignition keys (though the Model T only had 24 types of keys, with the type stamped on both the key and the starter plate; p. 12) to digital rolling codes tied required to enable the ECU (engine control unit computer). As the authors detail, all had defects – and all can be circumvented by stealing a key. Institutional responses began with the 1919 Dyer Act; for decades a central focus of the FBI was car theft, helped because it so frequently crossed crossed borders. Over time this extended to a system VINs and car registrations that sought to make it hard to remarket stolen parts or to get a stolen vehicle titled. Again, this system has holes. Finally there are sociological responses, particularly the development of garages and gated communities (pp. 73-77).

International theft figured from early on. Canada and Mexico were natural destinations, but on the East Coast rings such as that headed by Gabriel “Bla-Bla Blackman” Vigorito for over two decades (1930s-1950s) shipped cars to Europe and South America, grossing over $1 million in 1952 (pp. 61-3). The book is particularly detailed on the Mexican connection, reflecting the particular contribution of Morales. But it’s also empirically important: the top 10 theft “hot spots” stretch from Washington State through California, particularly near intersections of major highways that are trans-shipment points for drugs (Chapter 5 and Table 4.5 p. 173).

Then there is the depiction of car theft; Heitmann is a devoted watcher of movies and more generally an observer of automotive culture (the subject of an earlier book). Scattered throughout are references to a dozen-plus films, a handful of novels, and of course computer games. Press stories on car theft, ads for gadgets, and other miscellany are sprinkled throughout the book. Then there’s the racial aspect: joyriding whites were shuttled to dad, blacks were carted to prison. That was fine with J Edgar Hoover.

All of this makes for a fun book, and a quick read (159 pages of text). However it’s also disjointed; the authors love anecdotes, and don’t want to leave the best out. The narrative suffers, but quite frankly most on TTAC would probably rather have the anecdotes than the narrative. The book has no maps and only a few photos; it should have more! Likely the publisher resisted, and the authors wanted to get it done. It certainly is not because they lack in such materials: I invited John Heitmann to speak to my auto industry students in May 2014, and he came with a fascinating array of powerpoint slides and additional tales. (For those who want more, join the Society of Automotive Historians (of which he is currently president) or read through his essay on sources and copious footnotes.)

For additional quotes and details, see student journal entries on five chapters under the “Stealing Cars” pull-down menu on the Economics 244 Auto Industry web site at http://econ244.academic.wlu.edu/. Order your own copy from Amazon as either an inexpensive hardcover or for Kindle.

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2014 Chevrolet SS To Pace 20th Running Of Brickyard 400 http://www.thetruthaboutcars.com/2014/07/2014-chevrolet-ss-to-pace-20th-running-of-brickyard-400/ http://www.thetruthaboutcars.com/2014/07/2014-chevrolet-ss-to-pace-20th-running-of-brickyard-400/#comments Tue, 22 Jul 2014 10:00:46 +0000 http://www.thetruthaboutcars.com/?p=871274 Actor Chris Pratt To Drive Chevrolet SS Pace Car At Brickyard

Monday, we alerted you that the 2015 Chevrolet SS will come with a manual transmission and Magnetic Ride. Today, the current SS has thrown on some red and silver pace-car clothing to lead its tube-frame brethren over the strip of bricks at Indianapolis Motor Speedway for the 20th running of the Brickyard 400.

Autoblog reports the driver behind the wheel of this SS will be none other than actor Chris Pratt, whose latest film, Marvel’s “Guardians of the Galaxy,” will be in theaters August 1. Pratt said it was “a dream come true to drive the pace car” for the Brickyard 400, renamed the John Wayne Walding 400 by sponsor Crown Royal in honor of the Army veteran who lost part of his right leg during the Battle of Shok Valley in 2008.

The silhouette Sprint Cup version of the SS is doing well for itself since the start of its racing career in 2013, winning 16 out of 36 races in the previous season, and claiming nine of the first 10 events in 2014. Meanwhile, the Camaro and Corvette will take up pacing duties for the support events around the Brickyard 400.

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The VW/FCA Merger And Its Impact On The American Market, In One Chart http://www.thetruthaboutcars.com/2014/07/the-vwfca-merger-and-its-impact-on-the-american-market-in-one-chart/ http://www.thetruthaboutcars.com/2014/07/the-vwfca-merger-and-its-impact-on-the-american-market-in-one-chart/#comments Mon, 21 Jul 2014 13:35:12 +0000 http://www.thetruthaboutcars.com/?p=870130 BtEaJD6IYAABZ0q

 

Despite repeated denials from all parties, I’ve yet to give up on the idea that Volkswagen and FCA will eventually come together in an, ahem, Auto Union of sorts. Tim Cain’s chart shows us why there are synergies for both parties.

Yes, a combined VW/FCA would be just behind GM in overall market share for the month of June, and one month does not make the case for a merger. But there are plenty of benefits from a product portfolio standpoints, like a strong SUV, truck and commercial arm for VW, while FCA would finally get the global scale it’s been chasing so desperately, as well as the advanced technology to help its brand portfolios thrive well into the next era of automotive sales and manufacturing. Interestingly enough, Automotive News envisions a scenario where FCA’s hugely successful Latin American operations are sold off, perhaps to the Chinese.

The merger would also solve a huge problem for Volkswagen, namely the lack of traction its had in the American marketplace. America is the one major region where VW has failed to really establish itself, and by adding FCA’s brands, it could essentially buy its way in to further volume and a large dealer network, in addition to what it already has with Volkswagen, Audi, Bentley and Bugatti.

Oh, and Ferdinand Peich would finally get Alfa. But not before a massive web of complex financial, managerial and logistical matters are ironed out. Don’t expect anything to happen for a while – but I’m still pacing my bets on “yes”.

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The New York Times Shines A Light On Subprime http://www.thetruthaboutcars.com/2014/07/the-new-york-times-shines-a-light-on-subprime/ http://www.thetruthaboutcars.com/2014/07/the-new-york-times-shines-a-light-on-subprime/#comments Mon, 21 Jul 2014 13:20:41 +0000 http://www.thetruthaboutcars.com/?p=870066 20subprime-blog480

The issue of subprime car loans, specifically loans with exorbitant interest rates for used cars, has filtered into the New York Times, with the paper’s Dealbook section running an investigation into the practice.

The NYT article serves as a primer on the subprime auto loan crisis, though it focuses on used cars, and the unscrupulous practices of dealers who charge interest rates as high as 25 percent for used cars, which are frequently repossessed and then re-sold, enabling dealers to make vast profits many times over on the same car.

The Times also found evidence of hardball sales tactics and fraudulent loan documents, with some salesmen facing criminal charges related to their heavy-handed sales tactics and fraudulent loan applications. The article also focuses on the securitization of these loans, and Wall Street’s hunger for them thanks to the higher yields that they pay

Investors, seeking a higher return when interest rates are low, recently flocked to buy a bond issue from Prestige Financial Services of Utah. Orders to invest in the $390 million debt deal were four times greater than the amount of available securities.

What is backing many of these securities? Auto loans made to people who have been in bankruptcy.

An affiliate of the Larry H. Miller Group of Companies, Prestige specializes in making the loans to people in bankruptcy, packaging them into securities and then selling them to investors.

The average interest rate on loans bundled into Prestige’s latest offering, for example, is 18.6 percent, up slightly from a similar offering rolled out a year earlier. Since 2009, total auto loan securitizations have surged 150 percent, to $17.6 billion last year, though some estimates have put the total volume even higher. To meet that rising demand, Wall Street snatches up more and more loans to package into the complex investments.

Much like mortgages, subprime auto loans go through Wall Street’s securitization machine: Once lenders make the loans, they pool thousands of them into bonds that are sold in slices to investors like mutual funds, pensions and hedge funds. The slices that include loans to the riskiest borrowers offer the highest returns.

Rating agencies, which assess the quality of the bonds, are helping fuel the boom. They are giving many of these securities top ratings, which clears the way for major investors, from pension funds to employee retirement accounts, to buy the bonds.

None of this is news for anybody that has been following the topic on TTAC, nor does the NYT article cover the risks related to subprime lending in the new car market. But the Times does advance the argument that the lending practices of certain banks could pose a systemic risk if the subprime auto loan market faces a major downturn.

While losses from soured car loans would be far less than those on subprime mortgages, the red ink could still deal a blow to the banks not long after they recovered from the housing bust. Losses from auto loans might also cause the banks to further retrench from making other loans vital to the economic recovery, like those to small business and would-be homeowners.

If those losses materialize, they could pummel a wide range of investors, from pension funds to insurance companies to mutual funds held by Americans preparing for retirement. For the huge baby-boomer generation, including many whose savings were sapped by the 2008 crisis and the ensuing recession, any losses from the auto loan securities could deal them another setback.

After outlining the deteriorating underwriting standards and outright fraud used to get unworthy buyers into overpriced cars with usurious loan terms, NYT article closes by noting that in Q1 2014, repossessions were up 78 percent year over year. While the NYT points the finger at ratings agencies for being complicit in fueling the subprime bubble, at least one agency has taken notice.

As it stands now, the average vehicle loan term is 66 months, according to credit rating agency Experian, with loan terms of 73 to 84 months make up nearly a quarter of loans originated in Q1 of this year. The average amount financed for a new vehicle loan and the average loan payment also hit new highs in that same period. All of this suggests that Americans are financing vehicles with ever higher transaction pricing and stretching out the payments to unprecedented lengths, all in the name of a lower, more manageable monthly payment with little regard to how affordable the actual vehicle is. But as well all know, it’s different this time.

]]> http://www.thetruthaboutcars.com/2014/07/the-new-york-times-shines-a-light-on-subprime/feed/ 69 2015 Chevrolet SS Order Guide Confirms Manual Transmission, Magnetic Ride http://www.thetruthaboutcars.com/2014/07/2015-chevrolet-ss-order-guide-confirms-manual-transmission-magnetic-ride/ http://www.thetruthaboutcars.com/2014/07/2015-chevrolet-ss-order-guide-confirms-manual-transmission-magnetic-ride/#comments Mon, 21 Jul 2014 13:00:24 +0000 http://www.thetruthaboutcars.com/?p=870026 Chevrolet SS

Those who were waiting for the Chevrolet SS to have a manual transmission to go with its Australian power, they can now breathe: The order guide confirms the 2015 model will that, as well as the Magnetic Ride suspension.

Jalopnik reports one of their commentariat had looked through General Motors’ online Fleet Order guide when they came upon the revelations. In addition, more of the commentariat pointed out a number of new colors 2015 SS owners could drool over, including Regal Peacock Green and Alchemy Purple; Dodge and SRT may have to dust off a few oldies to keep up.

2015 Chevy SS Form A 2015 Chevy SS Form B ]]>
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Chrysler Group Asks For Hitch Production Boost Amid NHTSA Inquiry http://www.thetruthaboutcars.com/2014/07/chrysler-group-asks-for-hitch-production-boost-amid-nhtsa-inquiry/ http://www.thetruthaboutcars.com/2014/07/chrysler-group-asks-for-hitch-production-boost-amid-nhtsa-inquiry/#comments Mon, 21 Jul 2014 12:00:22 +0000 http://www.thetruthaboutcars.com/?p=870010 2002-2004_Jeep_Liberty_Sport

A day after the National Highway Traffic Safety Administration asked what was taking so long for a supplier to make enough hitches to cover 2.5 million recalled vehicles, Chrysler Group ordered its supplier to boost production.

Automotive News reports the inquiry, sent July 2, noted that it would take five years for Chrysler to repair all 2.5 million 1993 – 1998 Jeep Grand Cherokees and 2002 – 2007 Libertys with trailer hitches meant to minimize the potential for fuel tank ruptures and fires in low-speed rear-end accidents. In turn, Chrysler told supplier Northern Stamping Inc. to raise its daily production rate from 2,205 to 3,511 hitches.

The affected vehicles will be able to be equipped with the hitches beginning August 1, with the last ones to receive theirs by March of 2015.

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Clean-Diesel Sales Up 25 Percent In The US For 2014 http://www.thetruthaboutcars.com/2014/07/clean-diesel-sales-up-25-percent-in-the-us-for-2014/ http://www.thetruthaboutcars.com/2014/07/clean-diesel-sales-up-25-percent-in-the-us-for-2014/#comments Mon, 21 Jul 2014 11:00:18 +0000 http://www.thetruthaboutcars.com/?p=869994 2015-Volkswagen-Jetta-13

Though hardly any of the offerings can be found in a brown wagon with a six-speed manual pushing power to the back, U.S. sales of clean-diesel vehicles have climbed up 25 percent this year.

Autoblog Green reports clean-diesels are set to double their current 3 percent of total vehicles sold in the U.S. by 2018, according to Diesel Technology Forum. The group also noted the 25 percent jump is besting overall sales thus far in 2014, having only seen a boost of 4.2 percent in comparison.

As for the cause of the leap into oil-burning, consumers seeking better fuel economy find a 30 percent gain when the engine quietly purrs, especially when 27 of the 46 available clean-diesel models for the U.S. market are cars and SUVs. Winners include Audi and Chevrolet, both moving 8,100 and 3,000 units through the first half of 2014. Meanwhile, Volkswagen, lost 8 percent in sales during the same period, though still lead the way with 42,000 vehicles leaving the lot.

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2015 GM Trucks Get 8-Speed Transmission http://www.thetruthaboutcars.com/2014/07/2015-gm-trucks-get-8-speed-transmission/ http://www.thetruthaboutcars.com/2014/07/2015-gm-trucks-get-8-speed-transmission/#comments Fri, 18 Jul 2014 15:31:25 +0000 http://www.thetruthaboutcars.com/?p=869370 cq5dam.web_.1280.1280-437x350

Now that the new GM 8L90 has made its way down to the C7 Corvette, it was only a matter of time before GM put the new transmission in their pickup trucks.

Starting in 2015, all of GM’s full-size, body-on-frame pickup trucks and SUVs will get the new 8-speed gearbox. Fuel economy improvements haven’t been announced, though GM claims that the new transmission will allow for numerically lower final drive ratios, which should have a positive impact on highway fuel economy.

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Forty Land Rovers Seized By Homeland Security In Ongoing Investigation http://www.thetruthaboutcars.com/2014/07/forty-land-rovers-seized-by-homeland-security-in-ongoing-investigation/ http://www.thetruthaboutcars.com/2014/07/forty-land-rovers-seized-by-homeland-security-in-ongoing-investigation/#comments Fri, 18 Jul 2014 13:00:30 +0000 http://www.thetruthaboutcars.com/?p=869330 Defender90

Hide your kids, hide your wives and hide your Land Rovers, because the federal government is rounding up a handful due to questionable importation paperwork.

Jalopnik reports 40 Land Rover 90s, 110s and Defenders were rounded-up by the Department of Homeland Security Tuesday as evidence in a federal investigation over illegal importation of the iconic SUVs into the United States. Owners of the 40 dispute the agency’s claims, one owner stating his 110 was a 1983 model — citing the vehicle’s VIN — despite police claiming it to be 2000 model.

The seizures may be a part of an ongoing investigation into an importer in North Carolina who brought in Defenders younger than 25 years into the U.S., though none of the parties involved can comment. U.S. Immigration and Customs Enforcement representative Vince Picard says the 40 owners “will have an opportunity to seek restitution for their losses.”

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Ghosn Presents 2020 Autonomous Drive Roadmap http://www.thetruthaboutcars.com/2014/07/ghosn-presents-2020-autonomous-drive-roadmap/ http://www.thetruthaboutcars.com/2014/07/ghosn-presents-2020-autonomous-drive-roadmap/#comments Fri, 18 Jul 2014 12:00:37 +0000 http://www.thetruthaboutcars.com/?p=869314 Carlos-Ghosn-5112012-10

Before the Foreign Correspondents’ Club of Japan Thursday, Renault-Nissan CEO Carlos Ghosn issued a roadmap outlining the automaker’s path toward the first autonomous vehicles in 2020.

The Wall Street Journal reports the following steps Renault-Nissan will take towards its 2020 Autonomous Drive target:

  • 2016: The automaker will introduce a traffic jam pilot and fully automated parking systems, the former of which would allow vehicles to safely drive their passengers through rush hour and other congestion scenarios.
  • 2018: Vehicles will use multiple lane controls to safely negotiate road hazards and lane changes.
  • 2020: Vehicles will use intersection autonomy to delivery their passengers safely through intersections without the need for driver intervention.

Ghosn emphasized the difference between his company’s approach to autonomy over those like Google, who are pursuing vehicles that drive themselves:

Autonomous Drive is about relieving motorists of everyday tasks, particularly in congested or long-distance situations. The driver remains in control, at the wheel, of a car that is capable of doing more things automatically. Self-driving cars, by comparison, don’t require any human intervention — and remain a long-way from commercial reality. They are suitable only for tightly-controlled road-environments, at slow speeds, and face a regulatory minefield

He concluded that the 2020 roadmap was only the beginning, with further advancements to come on the momentum generated by the plan.

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Barra Defends GM Top Lawyer In Second US Senate Hearing http://www.thetruthaboutcars.com/2014/07/barra-defends-gm-top-lawyer-in-second-us-senate-hearing/ http://www.thetruthaboutcars.com/2014/07/barra-defends-gm-top-lawyer-in-second-us-senate-hearing/#comments Fri, 18 Jul 2014 11:00:35 +0000 http://www.thetruthaboutcars.com/?p=869290 General Motors CEO Mary Barra Testifies Before Senate Committee About GM's Recalls

Under fire from the U.S. Senate Commerce Committee for not having fired General Motors’ top counsel Michael Millikin, CEO Mary Barra defended her decision to keep him on the company payroll during Thursday’s hearing over the February 2014 ignition recall crisis.

Automotive News reports Barra believed Millikin, who has served as GM’s general counsel since 2009, to be “a man of incredibly high integrity” in spite of a number of his charges failing him and the automaker, five of whom were among the 15 let go from the company last month as a result of the Valukas report.

For his part, Millikin testified that he has enacted a number of changes into how his department functions, including bringing in an outside firm to review the automaker’s litigation practices, as well as bringing to his attention any lawsuits linked to a death and/or injury as a result of GM’s products. Millikin also claimed he was not aware of the issues surrounding the out-of-spec ignition switch until the February 2014 recall was issued.

Other highlights in today’s hearing include the testimony of GM supplier Delphi CEO Rodney O’Neal, proclaiming that said switch, despite being out-of-spec, “met the requirements” put forth by the automaker; Kenneth Feinberg’s testimony, where he explained to the Senate committee how he would help affected consumers find the proof needed to process a claim, as well as stating the list of eligible vehicles under the Feinberg plan was one of the few parts of the plan decided upon by GM; and consumer advocate Ralph Nader calling upon the automaker to bring aboard an independent ombudsman who could serve as a firewall from retribution for employees wanting to blow the whistle on a potential problem, then report the problems to the CEO.

The Senate committee will hold a separate hearing with the National Highway Traffic Safety Administration over their part of the February 2014 GM ignition recall, though no date has been given thus far.

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Blumenthal, Casey Introduce Hide No Harm Act http://www.thetruthaboutcars.com/2014/07/blumenthal-casey-introduce-hide-no-harm-act/ http://www.thetruthaboutcars.com/2014/07/blumenthal-casey-introduce-hide-no-harm-act/#comments Fri, 18 Jul 2014 10:00:25 +0000 http://www.thetruthaboutcars.com/?p=869266 Sens Casey + Blumenthal

Wednesday, Sens. Richard Blumenthal of Connecticut and Bob Casey of Pennsylvania introduced the Hide No Harm Act of 2014, which would criminalize the act of corporate concealment.

Automotive News reports the act would deliver prison terms of up to five years and fines for corporate executives who know about a given product’s defects and their potential to do harm, yet do nothing to warn their consumer base or employees.

Blumenthal noted that the act — meant to serve as a deterrent to future cases should Congress approve the bill — would not apply to the ongoing General Motors debacle, believing current criminal law was the right fit for the case.

The Hide No Harm Act of 2014 is co-sponsored Sen. Tom Harkin of Iowa, and provides legal protections for executives who do notify regulators and consumers about potential problems.

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