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Archive for September, 2009

More New Car Shoppers Make Decisions on Web

A dealership salesperson increasingly doesn’t get a chance.

by on Sep.29, 2009

Maruti Suzuki performs well in persuading shoppers to purchase.

Number one in sales, Maruti Suzuki performs well in persuading 40% of shoppers to purchase.

As Internet use among new-vehicle shoppers in India grows, increasing numbers of buyers are rejecting and selecting specific models before visiting dealerships, according to the J.D. Power Asia Pacific 2009 India Escaped Shopper Study released today.

The study, which analyzes the reasons why consumers consider a vehicle model, but ultimately purchase a different make or model, finds that 69% of new-vehicle shoppers report having visited a dealership in 2009, compared with 82% in 2008. Power interprets this drop as an increasing proportion of vehicle shoppers are rejecting certain models without ever visiting dealerships.

Since web use and web trends are global, differing only in nuance, the latest study has implications for automakers and car buyers in all markets.

The study finds a greater proportion of new-vehicle shoppers use the Internet to find information about makes and models –increasing from 21% in 2007 to 34% in 2009. Technical specifications, vehicle price, vehicle features or accessories, and vehicle brochures/pictures are the topics most frequently researched by new-vehicle shoppers on the Internet.

In addition, the percentage of shoppers who seek information from friends and relatives during the vehicle selection process has increased from 70% in 2007 to 74% in 2009.

Web Shopping!

Web Shopping!

“Due to the prevailing economic conditions, shoppers are carefully considering and researching their options and are increasingly seeking information from unbiased sources,” said Mohit Arora, senior director at J.D. Power Asia Pacific, Singapore.

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Instant Car Wash?

Above ground rack adds water recycling to meet regulations.

by on Sep.29, 2009

No permits, no construction, and no run off.

No permits, no construction, and no run off.

Hydro Engineering Incorporated has packaged its Hydropad above ground wash rack with water recycling and a pressure washer to provide an instant car wash.

The company claims this is a breakthrough in “green” water technology.

The car wash requires electric power and water for operation, and can be placed on any surface. It does not require a connection to a sewer. All the collected wash water is recycled through the “Hydrokleen” filtration system, where it is then processed back to the Hydroblaster pressure washer. One touted advantage of the car wash system is that it can be either permanent or allow for a mobile wash– it can be moved with no construction required.

Here is how the instant car wash system works:

Clean News!

Clean News!

The vehicle or equipment is driven up onto the wash rack. The recycled water is sent to a wash brush used for cleaning. A pressure washer connected to fresh water is used to rinse the recycled water from the car. This adds water to the systems that is lost in the wash process due to evaporation.

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Q&A: Land Rover’s Gary Temple

Building a business case for "environmentally friendly" SUVs.

by on Sep.29, 2009

First shown at the 2007 New York Auto Show, Land Rover has approved production of the LRX, which Gary Temple, head of U.S. operations, promises is a model of an environmentally-friendly Land Rover.

Land Rover has approved production of the LRX, which Gary Temple promises is a model of an environmentally-friendly Land Rover.

Earlier this month, the British SUV maker, Land Rover, confirmed that it will be going into production with its distinctively styled LRX concept vehicle.  But the news was accompanied by an unusually blunt assessment of the current economy and the company’s precarious fate – its global sales are down by roughly a third since the recession began.

A few years ago, that might not have been a problem, when Land Rover was owned by the American automaker, Ford, which seemed content to endlessly finance the loss-making company, but that was before its sale to the ambitious Indian carmaker, Tata.

For a sense of the challenges facing Land Rover – and its sibling brand, Jaguar – TheDetroitBureau.com spoke with Gary Temple, president of Jaguar Land Rover North America.  Based in New Jersey, Temple started working with the Jaguar brand in 1983, then switched to Land Rover after it was purchased by Ford in 2000.  Here’s his candid assessment of what’s ahead.

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TheDetroitBureau: How have the challenges you face changed since the acquisition of Jaguar and Land Rover (JLR) by India’s Tata Motors?

Temple: Our challenges were always internal, to come up with the finances to build new models, and to overcome our quality problems.  Now our challenge is mostly external: the economy.

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ACEA Rejects South Korean Free Trade Deal

Forty percent of the EU trade deficit comes from auto trade.

by on Sep.28, 2009

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The export-driven South Korean car industry sends 73% of its production overseas.

The group representing virtually all of the automakers in Europe has come out against a proposed free trade agreement (FTA) with South Korea because it does not allow sufficient access by automakers to the restricted South Korean market. ACEA says the FTA “must improve.”

The export-driven South Korean car industry sends 73% of its production overseas. About 650,000 cars were exported to the EU markets in 2007, while just 31,000 were exported to South Korea from the EU according to European customs services.

“We support trade liberalization, but EU manufacturers must share equal benefits in fair trade agreements. It’s crucial that the forthcoming deal with South Korea is handled properly because it sets precedents for further arrangements with countries like Canada and India,” said Ivan Hodac, Secretary General ACEA.

"Surprise the world."

"Surprise the world."

Mong-Koo Chung, chairman of Hyundai Motor Company, says the goal this year “is increasing global sales and surprise the world once again in 2009.”

The European automobile industry operates vehicle assembly and engine production plants in 28 countries in Europe, with the number of plants adding up to 294. It is responsible for 6.7% of EU GDP with 2.3 million workers directly employed and another 9.8 million indirect jobs. ACEA members annually invest € 20 billion in R&D and vehicle taxes bring in € 378 billion a year

A similar FTA is on hold in the United States as the global Great Recession drags on.

Automobiles and related parts are the largest single component in trade between the European Union and South Korea. Forty percent of the EU trade deficit comes from disequilibrium in automotive trade.

European Union member states postponed a decision in July on the FTA after a many countries expressed clear concerns and several asked for further improvements, including changes in the wording. In addition, several EU Commissioners publicly expressed opposition.

It is expected that negotiations will continue over the coming months, but with massive unemployment in Europe and no end to the recession in sight, progress on the agreement will be difficult if not impossible.

Furthermore, European business federations have repeatedly called for a “balanced agreement,” which means both sides must benefit.

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Voluntary Crash Compatibility Agreement Achieved

September vehicle production sees 100% compliance.

by on Sep.28, 2009

People aren't compatible with truck grilles.

People aren't compatible with truck grilles.

Automakers have completed a voluntary agreement whereby all new cars and light trucks are now designed to be more compatible in front- and side-impact crashes.

Since launching the agreement in 2003, manufacturers have been increasing the percentage of vehicles with the “compatibility engineering,” by matching the front structural components of different vehicles so that they align.

This simple design change enhances the vehicle’s ability to manage and absorb crash energy. The agreement covers BMW, Chrysler, Ford, General Motors, Honda, Hyundai, Isuzu, Kia, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Subaru, Suzuki, Toyota and Volkswagen.

Insurance Institute for Highway Safety (IIHS) field studies support the substantial real-world benefits of the re-designed vehicles. The fatality rate of belted car drivers in frontal crashes with 2000-03 model light trucks during 2000-04 was 19% lower when the light trucks already met the criteria than when they did not. The research also found a 19% reduction in car driver fatality rates when the cars were struck in the side by light trucks meeting the criteria.

Buckle Up!

Buckle Up!

To improve head protection in cars struck in the side, the automakers have also installed head-protecting enhancements such as side airbags. Insurance Institute for Highway Safety (IIHS) research indicates that side airbags with head protection are reducing driver fatality risk by about 37% percent in crashes involving the driver’s side of the vehicle.

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Nissan Motor Global Production off 14%, Sales -13%

No surprise that China is only market up significantly.

by on Sep.28, 2009

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One of the issues facing Japanese makers is the value of the Yen. It is currently trading at less ¥90:$1, which means decreased revenue.

Nissan Motor Co., Ltd. today announced its global production in August decreased 13.7% year-on-year to 217,954 units. In the U.S., production decreased 31.4% to 33,598 units. In China, production saw a significant increase of 60% year-on-year to 44,441 units marking an all-time record for the month of August.

Global sales for Japan’s third largest automaker decreased 0.2% year-on-year to 299,400 units, compared to the same month last year. Year-to-date sales are down 13%.

China recorded a record month in August, with sales up a significant 67% year-on-year to 62,937 units due to continued demand for Teana, Sylphy and Tiida models. Sales in other regions were down 26% from the previous year to 37,994 units

Export business was off sharply in August decreasing 36% year-on-year to 38,566 units. Exports to North America, where Nissan traditionally earns half of its profits, declined 29%. There are unconfirmed reports coming out of Japan that claim Nissan will drop production of its Q56 full-size SUV from Mississippi  back to Japan next years. Nissan has lost billions on its failed foray into full-size pickup trucks and SUVs for the U.S. market.

Nissan’s forecast for the full fiscal year is an operating loss of ¥100 billion ($1.05 billion based on ¥95:$1) and net loss of ¥170 billion yen ($1.79 billion). One of the issues facing all Japanese automakers is the value of the Yen. It is currently trading at less ¥90:$1, which means decreasing revenue for all export dependent automakers at the same time that sales are depressed.

First Drive: 2010 Volkswagen Routan

This ain’t no Microbus.

by on Sep.28, 2009

A Microbus it ain't, but the 2010 Volkswagen Routan does deliver a roomy and utilitarian interior.

A Microbus it ain't, but the 2010 Volkswagen Routan delivers a roomy and utilitarian interior.

It’s been 40 years, the mainstream media have repeatedly reminded us, since the concert at Woodstock.  As we Boomers get older, we start sounding more like our grandparents, reminiscing about “the good old days,” but the memories are a wee bit different, as a good friend — a former journalist – recently reminded me, his eyes rolling back and a smile creeping across his face as he recalled the drive up the New York Thruway for the legendary gathering of peace, drugs and music.

There were far more of them crammed into that VW Microbus than it was designed for, but back then, who cared.  In fact, I am suspicious about my friend’s claim to attending Woodstock because, as other friends point out, “If you can remember it you probably weren’t there.”

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Get Breaking News Alerts - Free!

I’ll save that debate for another time, but one thing is clear, Volkswagen had a firm grip on the Woodstock generation, the Beetle or the Microbus being the vehicles of choice for hippie motorists.  So, there was plenty of interest when the German maker announced, earlier this decade, plans to bring out an all-new version, showcased in concept form, at the Detroit Auto Show.

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Toyota Motor Production Declines 10% in August

Year-to-date output drops 35%.

by on Sep.28, 2009

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Exports are off 55% YTD.

Toyota Motor Corporation (TMC) announced its production, domestic sales and export results, including those for subsidiaries Daihatsu Motor Co., Ltd. and Hino Motors, Ltd., for August 2009 this morning and it showed slump continuing, although at a lower rate than previously.

Toyota’s production fell for a 13th straight month, declining 9% to 508,673 vehicles from August a year earlier, though the drop has been shrinking since March, and the company said. Honda’s output fell 17%. Nissan’s production was off 14%.

Year-to-date, TMC production is off 35%.

Toyota’s overseas production in August increased for the first time in 13 months, due to North America and Asia. China posted the largest gain, a 53% increase.

Toyota’s North American production gained 12%. This was largely the result of shutting all production of Tundra and Sequoia trucks last August. That shut down continued for three months.

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Honda Global Production Declines Again

China sets record, but not enough to offset a total drop of -17%.

by on Sep.28, 2009

Year-over-year output and sales continue to decline.

Year-over-year output and sales continue decline.

Honda Motor Co., Ltd. said this morning in Tokyo that through August of this year production declined in all regions for the 11th straight month, -17%.

The decline began in October of 2008, after the collapse of Lehman Brothers in September sent global markets into a tailspin from which they haven’t recovered.

In Japan, it was the tenth straight monthly decline.

Record production in China was not enough to offset the far larger drops in the Asia region.

In the U.S., Honda production was off 36%.
Total exports from Japan in August 2009 experienced a year-on-year decrease for the 11th consecutive month, as well.

In its last quarterly report ending this past June, Honda’s global automobile sales totaled 766,000, a decrease of 20% from the same period last year. In Japan, unit sales amounted to 128,000 thousand units, the same level compared to the same period last year due mainly to favorable sales of Insight and Freed despite weak demand in the market. Vehicle sales outside of Japan decreased 24% to 638,000 from the corresponding period last year, due mainly to decreased vehicle sales in North America.

Latest Results!

Latest Results!

To cope with the drops in the U.S., Honda scheduled downtime, mostly Fridays off, late last year and into the summer this year. Inventories are now lower, partly as the result of Cash for Clunkers, which spurred small car sales and helped sales of its Civic and Accord models. Honda is now beginning to schedule some overtime production on Saturdays at its plants in Ohio and Alabama.

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Worldwide Sales of Toyota Hybrids Top 2 Million

What started in '97 as a niche is now a formidable business.

by on Sep.28, 2009

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Next Prius is a plug-in hybrid design, although Toyota remains leery of lithium ion batteries.

Toyota Motor Corporation (TMC) has steadily expanded its line-up of hybrid-electric vehicles, or HEVs, since launching the first version in Japan, the “Coaster Hybrid EV,” during August of 1997. The Prius followed  that December in Japan, and sales of the mass-produced Prius models began in North America, Europe and elsewhere in 2000.

Executives at other Japanese companies, as well as U.S. and European automakers, scoffed at what was a technological triumph. Only Honda was seriously pursuing this emissions cutting and fuel economy-increasing technology during that period.

Today, virtually all other makers are scrambling to catch up with the innovation, while also trying to protect their investments in older technologies at a time when regulations are making it increasingly expensive, perhaps prohibitive to pursue both paths at once. Add in the ongoing negative  effects of the Global Great Recession, with its concomitant collapse of vehicle sales — especially in what were the most profitable big truck and SUV segments, and the collapse of the  luxury segments — and you have a potential radical recasting of the global automotive order.

I am reminded of the lead of Tale of Two Cities with fat kings and queens on long established thrones thinking things were pretty much settled forever. Some older automotive companies and their royalty are now in a similar position.

Worse, if you are a competitor, Toyota promises to eventually offer hybrid technology in virtually every product in its line-up. A clear challenge to the established monarchies. And this challenge doesn’t stop there. As TheDetroitBureau.com first reported last month, senior American officials at Toyota have been seeking to broaden the use of the Prius name, essentially creating a hybrid-based brand-within-a-brand. It could therefore become the strongest  global name in automotive  history.

Yes, there are caveats here aplenty.

The first is Toyota’s own weakened financial position, which has and will slow down its expansion of hybrids. Iits operating income has drastically declined in all  sectors: Toyota Motor Corporation finished fiscal 2009 with a huge $7.7 billion loss during the fourth quarter of the traditional Japanese year, which ended March 31. The fourth quarter loss left the Japanese auto giant with a decidedly non-traditional full-year loss of $4.4 billion, the largest in the company’s 71-year history. Net revenues dropped 22%.  Toyota also released guidance that it expects another loss ¥550 billion or nearly $6 billion for the coming year. The company, used to never-ending expansion, is having extreme difficulties managing a forced contraction.

However, virtually all other automakers are having the similar problems. And they don’t have the experience in  hybrid technology, so catching up will be hard — and complicated by the  experience,  intellectual property rights and the patents Toyota holds. And here, Toyota’s record of hybrid design progression and sales expansion is formidable.

What happened after the  initial Prius revolution, that caught automotive royalty eating cake, is a tale of a changed world. Toyota’s  next big step was  the second-generation Prius in 2003 and the expanded use of its hybrid system to minivans, SUVs and rear-wheel-drive sedans. As a result on May 31, 2007, the global cumulative sales of TMC’s hybrid vehicles topped 1 million.

This year, TMC continued to expand its hybrid vehicle lineup, launching the Lexus  RX450h in April, the third-generation Prius in May and the Lexus HS250h—the first dedicated Lexus hybrid model—in July.

No Lithium!

No Lithium!

All three vehicles are well received, although the Great Recession has drastically decreased the planning volumes. Nonetheless, they are expected to contribute to the ongoing popularization of hybrid vehicles.

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