Latest auto news, reviews, editorials, and podcasts

Stimulated Toyota Posts Unexpected 2Q Profit, Lower Annual Loss; Denies Floor Mat Cover-up

By Paul Niedermeyer
November 5th, 2009

Thanks largely to stimulus programs in the US and Europe, Toyota announced that it has eked out an operating profit of 58 billion yen instead of the average estimated loss of 63 billion yen from five analysts. Toyota now is forecasting a lower operating loss of 350 billion yen ($3.9 billion) for the year through March 31, and is presumably on track to a profitable following year. But with the stimulus programs’ end, Toyota continues to hunt desperately for cost savings, like its recently announced elimination of the F1 program, which cost a tidy $300 million per year. (more…)

Posted in Industry | News Blog | Safety | 8 comments

California Toll Road: Penalties Were Unconstitutional

By Robert Farago
November 5th, 2009

California motorists hit with massive fines for minor, alleged toll infractions won a settlement last month from the Orange County Transportation Agency (OCTA) and Transportation Corridor Agency (TCA). The toll road operating entities agreed to pay $1.4 million in restitution and waive $41 million in unpaid toll penalties after admitting the fines were “excessive” and that the denial of due process to the accused was “unconstitutional.” Over a dozen motorists sued in 2007 claiming that fines of up to $123,000 for skipping tolls were outrageous. In several cases, such as that of Stephanie and Brian Young, the violations were inadvertent. The couple racked up $580 in unpaid tolls in 2003 after the credit card linked to their toll transponder account expired. For this mistake, OCTA demanded that they pay $53,550 in fines. Similarly, Maria and Pablo Gonzalez allegedly failed to pay $60.14 in tolls and were billed $78,780.

(more…)

Posted in Crime & Punishment | News Blog | 17 comments

NHTSA to Toyota: Stop Lying About Floormatgate

By Robert Farago
November 5th, 2009

The Brits have an expression for this situation: “When you’re in a hole, the first thing you do is stop digging.”

The National Highway Transportation Safety Administration (NHTSA) issued a statement today correcting inaccurate and misleading information put out by Toyota concerning a safety recall involving 3.8 million Toyota and Lexus vehicles:

A press release put out by Toyota earlier this week about their recall of 3.8 million Toyota and Lexus vehicles inaccurately stated NHTSA had reached a conclusion “that no defect exists in vehicles in which the driver’s floor mat is compatible with the vehicle and properly secured.” NHTSA has told Toyota and consumers that removing the recalled floor mats is the most immediate way to address the safety risk and avoid the possibility of the accelerator becoming stuck. But it is simply an interim measure. This remedy does not correct the underlying defect in the vehicles involving the potential for entrapment of the accelerator by floor mats, which is related to accelerator and floor pan design. Safety is the number one priority for NHTSA and this is why officials are working with Toyota to find the right way to fix this very dangerous problem. This matter is not closed until Toyota has effectively addressed the defect by providing a suitable vehicle based solution.

(more…)

Posted in Marketing | News Blog | Safety | 31 comments

Chrysler’s Financial Plan: Leveraged Assumptions

By Edward Niedermeyer
November 5th, 2009

Chrysler’s financial plan is where the rubber hits the road for Sergio Marchionne’s turnaround. It starts with a break-even projection for 2010 on net revenue of about $42.5b, which is more than double the projections for 2009 of $17b net revenue. As the previous sales projection chart and product plan analysis indicates, a short-term turnaround of this magnitude seems highly unlikely. Unfortunately, because Chrysler plans to spend $23b on R&D and other capital expenditures (capex) between 2010 and 2013 without injecting any fresh capital, this sales turnaround absolutely has to happen in order for the rest of the plan to move forward. Though this plan is said to be stress-tested for a zero-SAAR growth by 2011 scenario, there’s no indication that these projections consider the possibility that Chrysler’s market share won’t grow. In this weak-market/strong share growth scenario, Chrysler believes that despite a $7b drop in revenue, $.4b operating profit could be rescued through cost interventions. But it’s not specified where those cost interventions would come, leading to the inevitable assumption that product development (the crucial factor in any market share growth) would be drastically reduced. It’s worth noting again that Fiat does not plan on contributing any new capital to Chrysler.

(more…)

Posted in High Finance | News Blog | 23 comments

New Porsche Boxster Spyder, with Added Fast Forward

By Robert Farago
November 5th, 2009

[Thanks to Porsche986 for the link]

Posted in New Cars | News Blog | 16 comments

Editorial: Opel, Aftermath and Prelude

By Bertel Schmitt
November 5th, 2009

On Tuesday, twenty years after the fall of the wall that separated the two Germanies, German Chancellor Angela Merkel went to Washington. For the first time since Germany’s Chancellor Adenauer in 1957, the topmost German addressed Congress—to roaring applause.

There was another wall. A wall of silence. Nobody in the US government—owner of General Motors—supposedly had heard a whisper that their most expensive ward of the state had changed their mind, decided to keep Opel, and go home alone. Before the speech, Angela chatted with Barack about high finance and the crock of shit also known as global warming. Not a peep about Opel.
(more…)

Posted in Editorials | Industry | 58 comments

What’s Wrong With This Picture: Planning Sales Edition

By Edward Niedermeyer
November 5th, 2009

This graph is representative of a major assumption underlying the entire Chrysler Group turnaround plan: namely, that 2009 is a trough year and that (despite the lack of new mass-market product until 2012) 2010 will see Chrysler not only holding the line on plummeting sales, but actually increasing them dramatically. Where does this optimsim come from? In part, a projected rise in SAAR. Otherwise, the only rationale for this assumption is that the financial plan requires this kind of short-term growth to succeed. [Apologies for the giant images... like Chrysler, we're doing what we can with what we have]

Posted in 3WTP | News Blog | Sales | 22 comments

Chrysler: Refresh And Market Like Crazy

By Edward Niedermeyer
November 5th, 2009

Are you seeing a pattern here? Although Olivier Francois is in charge of the most damaged brand in the Chrysler Group (and yes, that’s saying a lot), at least he’s been here before with Fiat’s problem brand Lancia. So it’s no surprise that Francois’s branding video for Chrysler is remarkably similar to a Lancia ad: it projects a kind of sophisticated sexyness, with lots of celebrities, architecture and passionate-sounding classical music. The only real difference is the copy that goes on and on about the good old days when Americans arrived in style. And unlike Ralph Gilles’ Dodge presentation, Francois’ vision of Chrysler’s brand actually works. But vision is only a tiny part of the battle for the Chrysler brand, and the rest is execution. On that front, things aren’t looking quite so good

(more…)

Posted in Branding | Marketing | News Blog | 12 comments

Death Of A Chinese Car Salesman: European Brilliance Importer Crashes

By Bertel Schmitt
November 5th, 2009

Did we mention that China’s Brilliance hasn’t been doing so, well, brilliantly? The joint venture partner of BMW, and maker of supposedly homegrown Ersatz-BMWs (the sight of which makes any BMW engineer reach for a bottle of Jägermeister) had racked up losses to the tune of 9b Chinese Yuan ($1.3b) in the first half of the year. And now, its European importer went kaputt. HSO Imports, located in tax-friendly Luxemburg, declared insolvency. To the tune of silent, but audible “hipp-hipp, hurrah!” amongst Germany’s automakers. Break out the bubbly, another attempted Chinese invasion has been repelled.
(more…)

Posted in China | Europe | News Blog | 21 comments

Curbside Classic: 1968 Chevmobile Impala

By Paul Niedermeyer
November 5th, 2009

Hybrids are big in Eugene, but some are just plain huge. The Prius is the official new car here, having dethroned Subaru. But here’s a hybrid of a different color: instead of a marriage of two drive systems, it’s a cross between two brands, the engine of one transplanted into another. Back in the day, when these were popular, the goal was speed, not better mileage. And the resulting names of these cross-species hybrids were more colorful than Prius or Insight: Fordillac, Studillac, Fordick, Fordolet. Well, here’s a new one: a Chevmobile. (more…)

Posted in Curbside Classics | Editorials | 28 comments

Curbside Classic Clue

By Paul Niedermeyer
November 4th, 2009

Last but not least, it’s time to play CC Clue. Nothing like blogging to make the time fly by. Daniel J. Stern identified the Volvo 122 on the second guess of that round. Can he do it again? Do I need to make them harder?

Posted in Curbside Classic | News Blog | 21 comments

Chrysler’s Cash Claim: A Cruel Con?

By Robert Farago
November 4th, 2009

Sergio Marchionne stunned the mainstream media—literally—with his revelation that Chrysler has improved its post-C11 cash position from $4 billion to $5.7 billion. “’Some of you have been surmising we’re burning through cash,’ he said in brief remarks opening the company’s presentation of its five-year plan. ‘This is not true.’” Uh, yes, it is. Can you say “accounts payable?” When Chrysler entered into bankruptcy, it stopped production.  Remember the Chrysler Cash for Clunkers product drought? Like that. Since then, Chrysler’s been taking in [meager amounts of] cash without paying out anything much, as production more or less stopped during the interregnum. And now that production has resumed? Chrysler’s about to pay those 90-day payables. Look for Fiatsler’s cash pile to erode like a California beach during an El Niño storm.

Posted in Chapter 11 | High Finance | News Blog | 23 comments

Positive Post of the Day: Chrysler Has Cash, Will Produce Diesel Wrangler

By Edward Niedermeyer
November 4th, 2009

Surprise! There’s some good news coming out of Chrysler’s five-year plan presentation. Okay, the really surprising part first: Sergio Marchionne has revealed that Chrysler has $5.7B in cash, up from $4B when it exited bankruptcy in June. The somewhat less surprising part: Jeep is bringing a stop-start-equipped, diesel-powered Wrangler. How niche-tastic is that?

Posted in Future Vehicles | High Finance | News Blog | Positive Post Of The Day | 25 comments

Dodge Versus Ram Case Study: Nitro

By Edward Niedermeyer
November 4th, 2009

The problem with branding exercises like Chrysler’s decision to split Ram from Dodge, is that they tend towards abstraction. Luckily, the back-from-the-dead Nitro is a good case study for how this split will play out. You might think that based on its aggressive styling and upright stance that it would make sense as a Ram-branded vehicle. But you’d be wrong. It will actually be positioned as a youth-market vehicle, within the Dodge brand. Hit the jump for an official concept of the Nitro’s possible repackaging.
(more…)

Posted in Branding | Marketing | News Blog | 31 comments

Hi, My Name Is: Ram

By Edward Niedermeyer
November 4th, 2009

Ram is brand. According to the new Ram CEO Frank Diaz, the Ram was “overshadowing” Dodge’s non-truck products… never mind that Dodge’s truck-cued car styling made that phenomenon unavoidable. There’s not much to say about the new Ram brand, except that it will include pickups, heavy-duty trucks and commercial vehicles (read: no SUVs), marketed with the usual John Wayne, hard-working, never quit attitude. Think of any truck ad you’ve ever seen, and you’ll understand everything there is to know about Ram’s branding.
(more…)

Posted in Branding | Marketing | News Blog | 28 comments