The worldwide car market contracted in the first five months of 2009 by about 20 percent. And what did VW do? Last month, all brands of Volkswagen actually edged out a little growth, 1.5 percent over May 2008. The core VW brand increased 10.2 percent in May, says Automobilwoche [sub]. For the first five months, all VW brands were down 7 percent worldwide, way above the -20 percent world average. Why? VW is strong, and they are strong in strong markets such as China (+ 45.2 percent), Germany (+36 percent) and Brazil (+4 percent). In the US, VeeDub can only do better. Their market share in the U.S.A. was an anemic 2.1 percent in May.
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The German government is sending strong signals to GM to move on the Opel deal with Magna — or else. Their message: “Get on with it, or Opel will be Chinese.”
I’m honored that the Wall Street Journal (WSJ) has decided to publish my Op-Ed on GM’s political entanglement in tomorrow’s paper and online. [link here] I trust the piece will bring TTAC some fresh eyeballs. But it’s not the most important aspect of the deal. This website didn’t get to 1 million visits per month through powerful links (thanks, Instapundit), media showboating (shukran, Al-Jazeera) or celebrity journalism (oy, Yates). We did it by providing you, our Best and Brightest, with a steady diet of no-holds-barred automotive news, rants and reviews. The most thrilling bit of the WSJ publication: it will confer legitimacy on our collective mission. Meanwhile and in any case, thanks for your patience with our recent technical troubles. TTAC’s new owner, a Canadian outfit called VerticalScope, is gradually cleaning up some of the, uh, challenged back end software. Our new tech guy, Jonathon Marshall, is a creative, methodical and tenacious bastard. Kinda like us. And you. Cue the “Barney” song. Or better yet, not.
And I predict Ford CEO Alan Mulally will be proven wrong. Of course, I could be wrong about Mulally being wrong. I mean, I’m the not-so-proverbial nutter in the attic. Big Al’s probably got an entire building full of MBA-owning sales analysts doing nothing but crunching numbers (and hanging out by the water cooler talking about how TTAC talked about them hanging out by the water cooler). I base my false dawn dismissal on three main facts. First, Detroit’s been blowing smoke up the media’s ass since The Boston Americans beat the Pittsburgh Pirates by two runs to clinch the inaugural World Series. If not before. I don’t trust a word they say. Second, same again, only this time not discounting the fact the automakers may actually believe their own delusions. Which is some deeply scary shit. Still. And third, housing starts.
My first car was a 1970s–era Opel Rekord. It was one of the most beautiful cars GM ever made. It was also roomy, reliable, as well as cheap to own and service. Those typical brand values made Opel a star player in Europe, and demoted Ford and many others to the status of also-rans. Later, Opel lost the reliability and beauty part of the plot. Is today’s Rekord, the Opel Insignia, good enough to lead an almost-dead company to the future?
The latest effort from GM-Euro sure looks good enough. The Insignia sports a spectacular design that gets almost everything right. From the side, it has that leaping-panther silhouette. From the front, you see a successful implementation of the puppy-resting-on-paws motif, combined with a dash of HR Giger’s evil alien in the grille. So it’s cute but aggressive. It looks like a contemporary version of the Xedos 6, which itself was an excellent interpretation of what a small Jaguar should look like.
The boldness goes on inside, where swoops and swathes and weird angles reign supreme. Some of it works well, such as the blade-like door handles. The interior treatment is certainly distinctive, without being over-the-top like the Euro-Civic’s is. But to my mind, the net effect is overwrought and over-buttoned. I prefer the Renault Laguna’s simple elegance, or the C-Class’s utilitarian look. Also, some of it just doesn’t work so well. From my POV, the thick steering-wheel rim obscured the temp and gas instruments, and the speedometer typography is unnecessarily small.
Which leads to a major point of complaint: the coupe-like Insignia seems designed in general more for looks than for functionality. Visibility is poor, what with small windows and thick beams. Space is at a premium: this is a 4+1 and not a proper five-seater, and it has insufficient headroom and foot room in the back. (The trunk, however, is big.) I understand the positioning logic: family space is what minivans are for, and sedans are nowadays tailored to professionals. But I don’t buy it. Why should I, when buying a new car, accept a downgrade? Do I look like a schmuck? Nobody makes me pay business for economy.
Most journalists have reported Audi-like interior quality, which sure indicates the value of providing prepared press vehicles. I can say that although the interior feels, smells and looks good, it ain’t no Audi: I heard a faint pip-scratch from the center console when driving over expander joints, and the gearshift surround is made of cheap and ugly plastichrome that crackles at a touch.
My tester had a fantastically tractable 160 HP oil burner coupled to a well-tuned 6-speed automatic. This Opel was quiet, fast (0-60 in under 9 sec), torquey (350 Nm (258 lb·ft)) and economical (providing 28 mpg despite often driven in town or around 120 mph). Once again, a good Diesel in combination with a modern auto is a near-dream team. (If it only had a chain cam . . . )
Handling is pretty fine: stable and secure at high speeds, composed and allowing high turning speeds on country roads. I seldom managed to make the ESP intervene, but when it did, it was discreet. The Insignia lacks the Mondeo’s magic however, with less precise steering and not quite as linear reactions near the limit. This is for a reason: the Opel’s development benchmark for handling was to achieve 80% of the Ford’s prowess. Also, in contrast to most other reviewers, I felt that the Insignia’s ride quality was definitely inferior to the Mondeo’s, with an autobahn experience that is closer to that of the bumpy 1-Series.
I could now stress how the Insignia has all kinds of standard gadgets such as an optical sign-recognition system that reminds you of speed limits, or a lane-departure warning. But I come from the school that says gadgets are only important if the basics are great, unless you belong to the Plymouth Horizon fan club.
I also come from the school that says having some strong merits don’t matter when they don’t fit the brand. Nobody needs a fuel-sipping Lamborghini. A successful Opel needs to be beautiful (check), affordable (Insignia prices are well below comparable Passats, so, OK), reliable (given recent Opel history, check), economical to own (maybe not, given the electronic gadgets), and family-friendly (no way!)
Up to a point, sexiness sells, and the Insignia has had a great sales start. But in time, Opel will have to answer the obvious question: why buy an Insignia from a zombie company, when you can get a (better) Mondeo from a viable one? For a GM car, this Opel is great. For a car that’s supposed to save a bankrupt company, it’s just not good enough.
I am responding on behalf of my colleague Bob Lesino [PR for the General Services Administration] and at this time we can’t provide any other information than what was in the press release.
Gee, I wonder if this has anything to do with the country of origin for these vehicles . . . TTAC will now file a Freedom of Information Act request. Press release after the jump.
Now that New GM is aborning, does Toyota feel obliged to become old GM? Seriously. I’ll forgo the recap (feel free to discuss this amongst yourselves) and get straight to the latest ill-advised Toyota: the new Lexus HS250. Yes, they’re right: they’ll sell 25,000 of the suited and booted Prius clones in the first year (which says bad, bad things about the Volt’s prospects BTW). And I’m sure the HS’s hybrid powertrain will kick ass, ’cause the Lexus LS 600hL is a sweet motor. But why are these Lexus guys constantly chasing volume, in a Cadillac kinda way? And if you think I’m just putting the hate on ToMoCo (Death Watch transference?), consider the fact that the group vice president of the Lexus Division for Toyota North America is seeing lights at the end of tunnel—just like the federal teat suckling infernal optimists over in Detroit.
Did you know that BMW owns Rolls-Royce? Of course you did; you’re the Best and Brightest. Which means you also know that the new Ghost is not going to be a very expensive, modified 7-Series with bespoke bodywork and cabin. (Of course not.) But you’ll also recognize that the chassis technology trumpeted in today’s RR press release below is boilerplate BMW. I mean, they didn’t even change the names, dear boy. Which makes me wonder: what should they call this stuff? Active Roll Stabilisation [English spelling, Jeff] implies, well, roll. Variable Damping Control should at least have “en” in the middle of the middle word for the car’s effect on the fairer sex. Any suggestions (bonus points for clever acronyms)?
At the heart of the Rolls-Royce Ghost’s magic carpet ride will be a state-of-the-art chassis which uses an intelligent four corner air suspension system and multi link aluminium front and rear axles. Designed to be fully integrated, each of the cars dynamic handling and safety systems has been engineered to work together in harmony. Systems such as Active Roll Stabilisation, four corner air springs and Variable Damping Control operate as one, imperceptibly to the driver and passengers to provide the best possible comfort for occupants and to ensure that the tyres maintain optimum contact with the road, even on rough surfaces for driving safety.
Over the last year, as this unparalleled automotive sales depression has picked up steam, I have observed unprecedented vitriol directed at both Chrysler and General Motors. Here on TTAC; on Autoblog, Jalopnik, CarDomain, et al.; and in the mainstream press, the companies receiving federal aid have been criticized. I just couldn’t understand it. It’s as if the only vehicles these companies ever built were the Jeep Compass and Pontiac Aztek. Critics seem to have completely forgotten all the great cars both companies are building right now and have built over the years. At the same time, they’ve overlooked Chrysler and GM’s importance to their employees, suppliers and countless communities from coast-to-coast. “Stakeholders” who have a direct impact on as many as one-in-ten domestic jobs.
Then came the contentious debate about bailing out Chrysler and General Motors which culminated in President Obama’s address on March 30. Obama gave Chrysler thirty days fix its balance sheet and close its alliance with Fiat—or face liquidation. GM was given an additional thirty days to restructure itself or face bankruptcy. While Chrysler came within days of escaping bankruptcy, a few of its dissident bondholders balked and Chrysler was thrown into a Chapter 11 filing that many pundits felt it would it would ultimately result in liquidation. While many observers rooted for it to failure, Chrysler has emerged from bankruptcy with unprecedented speed. Congratulations.
Back in early November, in what seems like a lifetime ago, the talk in the automotive world was of a possible “merger” between GM and Chrysler. I thought that this was a bad idea and would quickly lead to the dismantling of the Auburn Hills automaker and the loss of at least 30,000 US jobs. I came out and said that there was a far better partner for Chrysler who needed small car technology that they couldn’t afford to develop on their own. That partner was Fiat, which had the obvious and complementary need to sell vehicles in the United States in its quest to become a truly global automaker.
On January 20, Chrysler announced it was in serious partnership talks with Fiat to merge their operations; a move that would help both cope with and survive in the deepening worldwide automotive sales depression. This sales implosion was not only was impacting weak regional automakers but successful global ones like BMW, Honda, and even Toyota. All were seeing sales volumes declining by 40% or more as the virus was spreading around the globe.
Then, as now, I believed that an alliance with Fiat was Chrysler’s best and probably last hope for survival and was pleased to see yesterday’s deal between Chrysler and Fiat concluded. I truly believe that it will have a positive impact on both companies and will give us, as car enthusiasts, additional choices. After all, what can possibly be bad about Alfa Romeos returning to our shores?
Meanwhile, it should be said that other nations have taken extraordinary steps to protect their home-based industries. Why shouldn’t we do the same, especially since we have provided completely open access to our market allowing them to build their export industries? For example, I have absolutely nothing against Hyundai and Kia. But what’s fair about the fact that South Korean manufacturers can sell more than 600,000 vehicles a year here in the United States, yet our manufacturers sell fewer than 10,000 units annually south of the 38th parallel?
Last year, when driving to cover the Los Angeles Auto Show, I was forced to take a detour off the freeway. I stopped at a Starbucks in the Asian enclave of Alhambra off I-10 to get my e-mail. As I pulled into the parking lot, I noticed something strange: there wasn’t a single American brand car in the lot. While there were a few BMWs and Mercedes, every single car in the lot was of Asian origin. I walked into the Starbucks thinking to myself that Asian buyers, consciously or unconsciously, appear to buy homogeneously, supporting their nation’s car builders. Why don’t Americans? It’s because our market is so open that we can. In retrospect, maybe this explains why the American public—and our politicians—gives our own companies such a cold shoulder.
I hope the restructuring of General Motors is ultimately successful. The fact that some are calling for a boycott of “Government Motors” strikes me as absurd. Collectively, we as Americans will soon own 60 percent of New GM. Why would we not buy vehicles from a company we own?
[Read more of Rich Truesdell's work at automotivetraveler.com]
Swedish supercar firm Koenigsegg has signed a letter of intent to purchase Saab, reports Reuters. “Final negotiations about details on the deal will go on in the next months.” Meanwhile, imagine the synergies. On the one hand, 1,000 hp+ supercars, on the other the 9-5. High tech plutocrats and befuddled history professors shopping under one roof. How do you say schizophrenia in Swedish? Speaking of crazy, who else is dying to know how much Saab is being purchased for? Or is this one of those Marchionne-style, no-money-down deals?
In recent months we have seen the Obama administration nationalize the majority of the domestic automobile industry. A recent poll indicates that a decisive majority of Americans think this is a really, really bad idea. Furthermore, the action is illegal. The Constitution of the United States of America has endowed the congressional branch of the government with the sole power to spend money. Article 1, Section 9: “No money shall be drawn from the treasury, but in consequence of appropriations made by law [i.e., by the legislative branch].” This makes the financial seizure of General Motors with money appropriated by congress for the use of stabilize the banking system a brazen act of embezzlement. (The witless leader of the House of Representatives says that King Obama has not requested that they pass legislation authorizing expenditures to GM and Chrysler, so it must not be needed.) And so there has been cry among some right wing bombasts to boycott the purchase of GM cars. This too is a bad idea.
Twenty-six years ago my father traded in our family Buick for a Toyota Camry. It was the first time that a Buick had not darkened our family garage, but this car, a gas guzzling ’77 Skylark had been fraught with problems from the first day that we brought it home. I vividly remember watching the red vinyl-topped gray car get dragged by winch out of our La Mesa, California, garage onto a flatbed the morning after dad brought her home because the transmission had seized. The tranny was fixed and we had her back in a few days but at 30 thousand miles a multitude of other components began to fail. Before long my folks were ready for something much more dependable and something that provided a little relief at the pump.
The cream colored Camry was a breath of fresh air blowing in from across the Pacific. The Toyota felt light and maneuverable after the stodgy Buick and the high-revving I4 engine loved to sing while delivering 35 mpg on the highway. The steering was nicely weighted and, other than excessive body roll, it handled reasonably well. And despite accusations to the contrary, it was safe, comfortable, and did not rust and blow away.
By the time the Camry arrived I was driving and was highly attuned to all things automotive. The country was in an uproar because the domestic steel industry was in full meltdown and Motown’s long decline was already underway. The mantra of those attempting to guilt trip the country into buying over-priced second-rate domestic manufactured goods was, “Buy American.”
My response was, “Buy the best.” Even then it was clear to me that sheltering the manufacturers from superior competition would only exacerbate the problem. Sure, “Buying American” might provide some short-term relief to the complacent industries, but it would rob American consumers the best goods and remove the incentive for what was left of domestic manufacturers themselves. If Americans “Buy the best,” the market will stay strong and healthy, fueling an economic engine that will continue to provide jobs and pull people—at home and abroad—out of poverty.
Today, to those that advocate boycotting General Motors, I say, “Buy the best.” Right now The General has numerous products that should be on any consumer’s short list. Chevrolet Corvette, Cadillac CTS, Chevrolet Camaro, Chevrolet Silverado, Chevrolet Malibu, and the Pontiac G8, come to mind. In business we say, “Feed success and starve failure.” These cars are successes and deserve consideration—even if Mr. Goodwrench now lives at 1600 Pennsylvania Avenue.
The Obama administration, or anyone’s administration for that matter, lacks the expertise and motivation to make a success out of something as complicated as the manufacture and marketing of automobiles. If they remain control of GM for long, its products will undoubtedly become outclassed by stronger free competitors. But that day is not here yet, so “Buy the best” even if it means condescending yourself to buy from a government-owned company.
To those who think that a government-owned auto industry is a wonderful marriage of the greatest attributes of the public and private sectors, I would ask, would you trust the next George W. Bush (Sarah Palin?) that gets elected to manage the domestic auto industry? Eventually it will happen and there will be regret, even if Obama manages to make lemonade out of GM lemons in the near term.
Let political considerations be political considerations and let your choice of cars be for that car that best serves your needs and wants at the price you are willing to pay. Eventually Congress will become re-staffed by those that recognize their mandate in counterbalancing excesses and misuse of Executive Branch power. As in the 1980’s, politics must be remedied in polling booths, not in dealership showrooms.