“What happened to the podcasts?” has been an increasingly common refrain in the TTAC mailbox. To which we reply, “it’s freaking summer!” Messrs. Farago and Niedermeyer have been too busy chasing across the country a supermodel in a Ferrari 308 GTS to do any podcasting over the last month or so. But now that the Wagon Queen Family Truckster is broken down, it’s time to get back to the grind. You think you hate it now, but wait ’til you drive it!
After a week-long hiatus, the TTAC daily podcast returns to action. We’re still waiting on a shiny new microphone for Mr. Farago to complete our audio makeover, but please let us know if we’re making progress on the audio-level issues that we’ve been hearing about. Meanwhile, enjoy.
The second tranche of cash-for-clunker money could be approved as early as today, reports Automotive News [sub]. Not that there’s any suspense about how the vote will turn out. Whether it passes today or tomorrow, pass it will. The NHTSA’s program feels enough like a success to guarantee a re-up. And as psychologically motivated as markets are, sometimes feeling like a success is enough. But congress can’t be motivated by a mere uptick in overall dealer traffic alone. After all, our government is no longer a passive proponent of American industry as a whole: we’ve picked sides. And the teams we picked, namely GM and Chrysler, aren’t seeing any real benefit out of the CARS program. And remember, if the $3 billion worth of clunker culling doesn’t help our inept wards of the state, we’ll be looking at pouring at least that much directly into them. Again.
If the CARS program has proved anything, it’s that America loves a deal. Big surprise there. In fairness, it also proves that giving away a billion bucks takes more than 30 days of preparation. And that good news is always welcome, even if it isn’t exactly good news. In the short term, the “success” of CARS is almost certain to bring about a re-up in funding; Cash for Clunkers will probably keep rolling along. In the longer term, there are two major issues to worry about. First, is the pull-forward effect. Redlining the market with federal stimulus will probably only delay a sustained and sustainable recovery in car demand. The second issue is that when the economy starts showing signs of sustainable, organic recovery, taxes are most likely going to be increased thanks to short-term stimuli like C4C. As the second most expensive purchase in a consumer’s lifetime, cars are likely to be especially vulnerable to reductions in take-home income. Doubly so if demand has already been pulled forward by said stimulus. With Cash for Clunkers, we are once again mortgaging long-term market stability and recovery for an orgy of feel-good consumption. Let’s try to enjoy the buzz while it lasts.
Seriously? If Alfa and Fiat are going to be added to the Chrysler/Dodge/Jeep mix, something has got to give. And why not Chrysler? Maybe it’s just that every time I hear the word Chrysler, my immediate association is Sebring. Which is more than enough motivation for me to wish the brand dead. Perhaps the Chrysler name could live on as an umbrella brand (i.e., GM). As a vehicle brand though, Chrysler is toast. Or am I missing something?
Unlike the Subaru Outback, which doesn’t do anything for Legacy wagon fans, today’s TTAC podcast really does have something for everyone. And coincidentally, the ability to be all things to all people also happens to be the major challenge for mass market brands. Which is why Messrs. Farago and Niedermeyer agree that Ford should embrace its “built Ford tough” tagline, and use it to build the Ford brand across every segment. The line is well-established, it is associated with one of Ford’s most successful products, and, most importantly, it conveys a powerful but versatile brand image. In the past, we’ve wondered aloud about what exactly a Ford is supposed to be. Built Ford Tough could apply to a cheap Fiesta as much as it could to an upmarket Taurus. It’s an all-encompassing value that anyone, if not everyone, can relate to.
The list of CAFE violators (in PDF form) reads like a valet’s to-do list: Mercedes, Porsche, Ferrari, Maserati. These firms pay CAFE fines because, well, they can. CAFE fines are calculated by multiplying each tenth of a mile per gallon of average non-compliance by $5.50, then multiplying that dollar amount by the number of vehicles sold. As a result, luxury firms pay the highest fines when they try to go mass market: Merecedes paid about $30 million for 2007. But if CAFE is already weighted to let small companies off the hook, why are we hearing about new rules which seem to relax standards for firms selling fewer than 400k vehicles per term? Aren’t the regular loopholes enough?
As promised in today’s podcast, here’s a teaser image of the forthcoming Audi A8 (courtesy of Top Gear‘s blog).
No, we’re not talking about stalking women of a certain age. To my summer flu-addled mind, this Focus-based softroader should be on the US market already, cashing in on one of the few successful segments left here. We hear it’s going to be built in Kentucky, but when?
Cash for clunkers has moved up the “hey, you know about cars, right?” list of questions. Friends and acquaintances with little intrinsic interest in the world of cars have been asking “what the deal is” with the program with surprising regularity. Needless to say, it’s difficult to explain and I usually end up pointing people to the CARS website and Kelly Blue Book’s clunker calculator. And guess what. Despite having been asked about the program by a number of people, I know of nobody who has actually qualified. In other words, the program is already a success. After all, the biggest fans of clunker-culling admit that the current plan has too many strings and not enough money to truly impact new car sales on its own. And yet, everyone knows that the program exists without knowing whether they qualify. The resulting search for information drives curious souls who don’t have automotive blogger friends straight into the arms of dealers. Cash for clunkers is a classic come-on. If there was any doubt before, Chrysler’s latest Big Summer Incentive proves it.
In between long stints behind the keyboard and the wheel of an Audi, I’ve been reading Robert Lacey’s epic Ford: The Men and the Machine. Catching up on the story of Ford, one can’t help but wonder what would have happened if Crazy Henry had somehow cheated death and was still around to witness the recent travails of his company. Ford’s deep commitment to basic transportation may have been a liability in the heyday of the American automobile, but things seem to be coming full circle. The decades of glamor and expression in automotive design and marketing launched GM to dizzying heights and threatened to leave stolid old Ford behind. But Ford never completely embraced the planned obsolescence and marketing-heavy development patterns that defined GM’s success. The Blue Oval’s best products always had a certain affordable and rugged charm that seems to be coming back in style. Ford now finds itself positioned to become the first American automaker with a lineup weighted towards competitive small and mid-sized cars. If it can succeed with this strategy and stay focused, Ford has a chance to reinterpret its original brand appeal and vindicate Henry Ford’s philosophy in a thoroughly 21st Century fashion.
As Robert posted below, TTAC is redoubling its efforts to get timely road tests by reaching out to the very manufacturers we lay into on a daily basis. But why, you might ask, would these giant firms feed the mouth that bites them?
Like most people under the age of 40, I never read car magazines. Actually that’s not true. I’ve been stealing copies of Auto Motor und Sport from my dad for years. Even after its long trip across the Atlantic, the anal-retentive German’s anal-retentive car magazine still manages to scoop the American mags on many of the most compelling industry developments. But the real draw is the mag’s road testing, which really confirms every stereotype of Teutonic attention to detail. No metric is too mundane to be measured, graphed and scored… think Consumer Reports for people who actually like cars and think OCD medication is for the weak. On the other side of the equation is evo magazine, which is hands-down the best enthusiast-oriented car magazine.
GM claims to be calibrated to break even at a Seasonally Adjusted Annual sales Rate (SAAR) of 10m sales. Which assumes that GM’s portion of those sales will remain steady. As we’ve learned today, that’s not likely. GM’s market share is being pummelled by bad news, bailout backlash, and (according to the Merrill Lynch report) poor product replacement rates. While GM talks up the Volt, discusses a Prius fighter and touts an American-made compact, its major product push has been centered around a single dying brand (Buick) and its single new product, the LaCrosse. Yes there’s a new Equinox, but has anyone noticed? Camaro may be the choice of bold, audacious lemmings everywhere, but for how long? It’s gut check time . . .