By on February 12, 2011

Though the the impact of nationality on the auto industry may be fading, the issue couldn’t be more central for Sergio Marchionne and his Fiat-Chrysler Empire. Having accepted aid from both the Italian and American governments, the future merging of Fiat and Chrysler raises a delicate question: will a merged Fiat/Chrysler be an Italian or American firm? When Marchionne suggested that the Fiat-Chrysler alliance could be headquartered in Detroit, Italy erupted in recriminations. The Italian government called Marchionne onto the carpet to explain himself, even as critics lashed out saying

The government is moving too late, but better late than never. Marchionne is more oriented strategically toward the U.S. than Europe

And sure enough: Fiat restated its commitment to investing some $27b into Italian production, but as AFP reports

the question of whether Fiat would remain based in its birthplace of Turin remained unclear, with local officials saying it had been put off for three years and would depend on the company’s performance.

But, while American and Italian stakeholders bicker over the “national character” of a merged Fiat-Chrysler, the proposal establishing four headquarters in Turin, Detroit, Brazil and “somewhere in Asia” points to the real issue: Fiat-Chrysler must orient itself around its markets, not any national corporate character. The longer the divide between Italy and the US is played up, the more Fiat-Chrysler runs the risk of developing a dysfunctional corporate culture like the DaimlerChrysler “marriage of equals.” It’s just too bad that, by tying itself up with the governments of the USA and Italy, Fiat allows the “national character” question to take such prominence.

By on February 5, 2011

Kurt Wiley writes in:

Having been a long time reader of TTAC, I now pose a question to the Best and Brightest:

Should one who likes the driving experience offered by German brands, but abhors their reliability and maintenance expense, seek safety with an extended warranty? Or will purchasing one of those warranties be an utter waste of money?

Considering I’m about to embark on a weekend roadtrip in a 12-year-old M Coupe, I’m hoping the answer to this question is “no.” At the same time, I’m willing to admit that I bought the car I wanted and that a little bit of risk was part of the deal. But then, I’m just a callow youth with no kids to worry about… I’ll let TTAC’s Best and Brightest bring their wealth of experience to this question while I pray that Mr M doesn’t blow a gasket this weekend.

By on January 30, 2011

Well, the problem isn’t so much that compact cars aren’t youthful… it’s that the buyers of compact cars are surprisingly un-youthful. The C-Segment, compact cars in the class of Honda’s Civic, Toyota’s Corolla, Ford’s Focus and Chevy’s Cruze, are typically thought of as “Kid Cars,” or first-time automobile purchases for younger buyers. That stereotype may still be true, but if it is, the young buyers aren’t actually buying the cars. This week, Ford’s executive in charge of launching compact cars like the forthcoming 2012 Focus turned my perspective on the C-Segment upside down by telling me that Ford’s research showed that the average age of a compact car buyer was… get this… 57 years old. Given that TTAC has questioned the viability of the Buick brand for having an average buyer age in the low-to-mid 60s, it’s worth considering the reasons for the surprising age of C-segment buyers. And while we’re at it, let’s throw another stereotype on the fire, namely the old chestnut that compact cars are “basic transportation” for folks who can’t afford a car in the next class up. According to Ford’s data, 50 percent of C-Segment buyers come from households making $75,000 per year or more.

I wish TTAC had more of this kind of demographic data to share, so we could track changes in compact car-buying demography over time, but it seems fairly clear that the compact class is attracting older, more affluent buyers than it once did. So we want to know: how do you interpret these trends? Will older, richer buyers continue to downsize, or is this a short-term phenomenon driven by gas prices and economic recession? Meanwhile, what impact will this shifting demography have on compact cars themselves?

By on January 2, 2011

As this is both the end of the week and the beginning of the year, let’s reflect, scratch our heads and ponder: Who won’t survive 2011?  Car brands never die, they just go to a new owner. (Not always…) So let’s make that: Who won’t survive 2011 with the same owner? (Read More…)

By on November 20, 2010

Having ignored the first wave of EV enthusiasm, Toyota turned to Tesla in the aftermath of its recall scandal as an investment that could potentially catch it up with other EV makers, and possibly help its battered image along the way. Officially, the deal was brokered after Toyota CEO Akio Toyoda drove the Tesla Roadster, and came away impressed with its “splendid flavor.” Toyota then dropped $50m on Tesla’s stock and another $60m on the Tesla-developed RAV4 EV prototype, raising the possibility of re-starting production at the NUMMI plant, which Tesla bought from Toyota as part of the hookup. But with Toyota also developing an EV city car in-house and talking up the return of hydrogen cars, Tesla’s role in Toyota’s future is clear as mud. If the RAV4 EV makes financial sense, Tesla could contract-build them at NUMMI, adding much-needed volume to a giant factory that would otherwise be building only the Model S (at a rate of about 20k per year).  But there’s the rub: Tesla clearly needs Toyota more than the other way around; it needs Toyota’s volume, manufacturing expertise and legitimacy. But what will Toyota get out of the relationship? An expensive EV compact crossover? Goodwill from the American people? The ability to keep in-house development looking past a short-term fad for EVs?

So here’s today’s puzzle: if you were Akio Toyoda, would you A) double down on Tesla, and buy a controlling share or even roll it into the parent company, B) quietly sell the stake and move on, or C) keep Tesla around as a speculative EV offshoot of the main company? It’s a complex question, and answers should touch on the market potential of EVs, Tesla’s strategy and viability, Toyota’s relationship with EVs, the PR benefits of keeping an American EV startup alive, and much, much more. Enjoy!

By on November 14, 2010

I’ve made no secret that if I wanted one of Detroit big 3 to succeed it was Chrysler. I’m not really a Ford fan and any affection I had for GM got killed off with Bob Lutz’s insane ramblings. Chrysler was always considered the most broken. Heavily dependent on fleet sales, woeful reliability and bleeding money. Then Chapter 11 came and I thought it was game over for Chrysler. Until recently. (Read More…)

By on November 6, 2010

History is written by the victors, or so the saying goes. You lose, not only do you get beaten up in real life, but also in the history books. Few losers come much bigger than Rick Wagoner. The man who oversaw the last slide into Chapter 11. Yep, there wasn’t much love out there for “Red Ink” Rick. Until a few days ago. (Read More…)

By on October 23, 2010

The world of business all has their fair share of career bullshitters, and the car industry is no different. So this week’s Weekend Head Scratcher is this: Who do you think was the worst car executive ever? (Read More…)

By on October 16, 2010

Over the past few weeks, I was surprised by the responses to my “Weekend Head Scratchers” (WHS). It seemed that you lot liked them, a lot. This is why I kept writing them. Throughout the week, I’d be sitting at my desk or asking myself for ideas, trying to get inspiration for the next WHS. I felt like a priest trying to tie something in the news to his next sermon. Then, I did something bad. I jumped the shark. Last week, I created a game for the week WHS, where we played “Fantasy Car Maker” whereby you had to create your own car company by buying car brands from around the world and justify why you bought them. It flopped, big time. I bet you don’t even remember seeing it. But that’s what happens when you believe your own bullsh*t! Well, for this week, I’m going back to basics and keeping it simple. (Read More…)

By on October 9, 2010

This week’s “Weekend Head Scratcher” is a little different. It’ll require quite a bit of thought, so pay attention! This week we’re going to play a little game I created. It’s called “Fantasy Car Maker”! (Read More…)

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