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Archive for April, 2011

Ragtop Renaissance Threatened by Fuel Economy Concerns

Assortment of new drop-tops debut in New York.

by on Apr.27, 2011

Bentley adds the Supersports Convertible to its line-up.

Spend some time wandering New York’s Jacob Javits Convention Center and you might think there’s a ragtop renaissance underway.  There are a score of new and more familiar convertibles on display at this year’s New York Auto Show.

But despite their seeming abundance, convertibles are barely making a dent in U.S. automotive sales charts, and some analysts warn that demand for al fresco driving machines may continue to slide as consumers shift focus to more fuel efficient products.

“We think there’s a small but viable market for a convertible like the CrossCabriolet,” suggests Mike Drongowski, senior product planning manager for Nissan, which is just launching sales of the new model, which shares the basic platform of the maker’s hardtop Murano – making it the world’s first crossover-based convertible.

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The New York Auto Show served as the backdrop for the introduction of both the Fiat 500C convertible (Click Here for more), and the Bentley Supersports Convertible.  But there are plenty of other new models on display, including the BMW 6-Series Convertible and Chevrolet Camaro Convertible, as well as more familiar offerings, such as the Mazda Miata, Volkswagen Eos, Mini convertible and Audi’s R8 Spyder and A5 convertibles.

Prices range from $23,905 for the Miata to $280,400 for the new Bentley, which goes on sale this coming summer.


Team Lotus Buys Caterham Cars

Both trace roots to Lotus founder Colin Chapman.

by on Apr.27, 2011

Caterham rolls out a special-edition 7 to celebrate its sales to Lotus.

Team Lotus Enterprises has expanded its motorsports base by acquiring Caterham Cars, an investment group led by London-based Corven Ventures. Terms of the deal were not disclosed.

Both makers trace their heritage back to Colin Chapman, the founder of Lotus Cars, the British sports car company – with which there are no current ties.

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“Caterham has a unique place at the heart of the motoring world. As well as being proudly and staunchly British, it has an enviable and uniquely unblemished reputation within the industry for performance, handling and engineering excellence,” said Lotus chief Tony Fernandes, who also owns Air Asia.

To celebrate the new deal, Caterham plans to produce a limited run of 50 Team Lotus Seven club racers bearing the team’s green and yellow colors.


Petersen Automotive Museum Lands “Monstrous” $100 mil Donation

by on Apr.27, 2011

The Petersen Automotive Museum will soon get another 135 vehicles for its collection.

Even with one less zero it would have been a significant chunk of change, but at $100 million, the “wonderful, generous” donation announced by the Petersen Automotive Museum is expected to secure its future and expand its displays significantly.

Opened in 1994 by the late magazine publisher Robert E. “Pete” Petersen, the museum has had plenty of struggles over the years, especially when it was operated as part of the Los Angeles County government.  Petersen rescued the museum shortly before his death in 2007.  But the new donation takes things to a whole new level.

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The donation by his widow, Margie, and the Margie and Robert E. Petersen Foundation actually consists of three components collectively valued at $100 million, explained Buddy Pepp, the museum director:

  • The 300,000 square-foot museum building, on Wilshire Blvd., at one of the busiest intersections in Los Angeles;
  • Petersen’s personal collection of approximately 135 vehicles housed in the building but not available, until now, for public viewing;
  • And what Pepp would only describe as a “monstrous” check.


Costs, Range Issues Likely to Limit Green Car Sales

“Automakers will be fighting” for the few green buyers, warns Power study.

by on Apr.27, 2011

Ford's Focus Electric will be one of 159 battery-based vehicles on the U.S. market by 2016 - but will car buyers care?

Despite the endless headlines and the steady roll-out of battery cars, plug-ins, hydrogen vehicles and natural gas-powered sedans, the market for alternative powertrain vehicles is likely to remain extremely limited for some years to come, warns a new study that predicts “automakers will be fighting over the relatively few consumers who are willing to drive green.”

Though large numbers of U.S. car buyers might say they want a clean vehicle, cost and convenience matter more than the environment when it comes time to buy, concludes the Green Automotive Study released today by J.D. Power and Associates.

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“It is the financial issues that most often resonate with consumers, whether it is the higher price of the vehicle itself, the cost to fuel or charge the vehicle, or the fear of higher maintenance costs,” said Mike VanNieuwkuyk, Power’s executive director of global vehicle research. “The bottom line is that most consumers want to be green, but not if there is a significant personal cost to them.”

By 2016, Power forecasts there will be 159 hybrid and electric vehicle models available in the U.S., a more than fivefold increase from the 31 marketed in 2009.  But they’re collectively expected to account for just 10% of the total U.S. automotive market.


Saab Rescue Delayed Again

Asset sale stalled, plant still shuttered.

by on Apr.27, 2011

Image By: Len Katz

Saab Chairman Victor Muller may be looking for an alternate rescue plan to reopen the company's plant.

With a proposed rescue plan still stalled, struggling Swedish automaker Saab’s headquarters assembly plant remains shuttered for the third week, raising questions about its long-term prospects.

The European Investment Bank, which provided the loan permitting Dutch-based Spyker Cars to buy Saab last year from General Motors, has so far refused to approve a deal that would involve the sale of Saab’s factory and other assets to a Russian businessman.  A one-time Spyker partner, Vladimir Antonov would then lease those assets back to the Swedes.

That has sent Saab scrambling to line up other options, the company announced in a release that states, “Spyker and Saab Automobile continue to work on securing additional funding. To that end Spyker and Saab Automobile are negotiating equity and debt financing and/or technology licensing with various strategic partners, including various Chinese car manufacturers. No commitments have been received to date.”

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There have also been reports that Saab may turn to former owner General Motors for assistance.

The crisis was touched off, on March 29, when several suppliers demanded immediate payment of overdue bills before they would unload trucks delivering parts needed for the Trollhattan assembly line.  The suppliers briefly agreed to work with Saab but the boycott resumed a few days later.  The closure of the factory, located next to Saab’s Swedish headquarters, is now in its third week.


GM Goes to War

"War room" strategy could push GM past Toyota in 2011.

by on Apr.27, 2011

Toyota CEO Akio Toyoda with the now-delayed Prius V.

General Motors has gone to war.  Struggling to avoid the sort of parts shortage problems crippling its Japanese rivals, the maker has assigned several hundred managers to three “war rooms,” in Detroit, Tokyo and Shanghai, with the aim of keeping its assembly lines stocked and running.

That’s no easy task in the wake of the March 11 earthquake, tsunami and subsequent nuclear plant disasters that all but shut down the Japanese auto industry for more than a month.  Toyota alone lost about 542,000 units of production in March, it revealed this week, and the global sales leader does not expect to have its worldwide production network back up and running at full speed until November or December.

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Toyota is by no means alone, the March disaster hitting hard all of the Japanese automakers – and impacting virtually all major car companies worldwide to at least some degree.  GM, in fact, was forced to briefly close a plant in Louisiana, with two European plants also affected.  But the maker is working hard to ensure even worse problem don’t develop.  And if it can keep things running reasonably smoothly, industry analysts say GM will likely end 2011 as the global sales leader, a title it lost three years ago, shortly before its bankruptcy.

“The war rooms stay in touch around the clock and have the authority to move parts around as needed,” explained Tim Lee, head of GM International Operations.


UAW May Skip Strike Deadline in Talks With Detroit Big Three

“Creative problem solving” is goal, says union boss Bob King, not confrontation.

by on Apr.26, 2011

The UAW is seeking "creative" solutions, said Pres. Bob King during a meeting with reporters.

The United Auto Workers Union will put the emphasis on “creative problem solving,” rather than confrontation as it reopens contract talks, this summer, with Detroit’s Big Three automakers.

Intent on putting aside the traditional hardball tactics that have defined automotive labor/management relations over the last 75 years, UAW President Bob King said union negotiators may not even set a strike target as they approach their mid-September deadline.  But that would be a limited option anyway, he acknowledged, as terms of the government’s 2009 bailouts of General Motors and Chrysler mean that only Ford could even be threatened with a walkout this year.

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During a meeting of the Detroit Automotive Press Association, the UAW president meanwhile offered both a carrot and a stick to companies like Toyota, who have managed to so far avoid union organizing efforts.  Give workers a fair chance to vote, King promised, and the union will accept the results, win or lose.  But resisting calls for an election, he asserted, could lead to a global boycott.

“Creative problem solving,” said King, “is the ideal we’re both striving for.”  Confrontation, he insisted, was a thing of the past.


Toyota Dominates Among African-American Car Buyers

But domestics, Koreans make major gains.

by on Apr.26, 2011

Toyota products, like this Camry, dominate in the African-American automotive market.

Toyota is the overwhelming brand of choice among African-American car buyers, according to a new study by Polk, a Detroit firm that tracks motor vehicle registrations.

But domestic makers are by no means out of the picture.  Ford ranks second among African-American motorists, according to the report, with Chevrolet rounding out the Top 3.  And the resurgent Buick posted a more than 70% jump in demand among this key buying group.  Korean brands are also making big gains.

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Scoring with the African-American community is critical, analysts say, considering the group generated 7.4% of all new vehicle registrations in 2010, sales of 641,090 up 11.5% over the year before, (that growth rate well ahead of gains in other ethnic communities).

“With the U.S. population growing faster in the African-American segment than others, there’s a significant opportunity for automotive manufacturers and dealers to begin to align marketing initiatives toward this specific audience,” said Polk product strategist Marc Bland.  “Those companies that are ahead of the curve, like Toyota, are already reaping the rewards.”


Wuling: GM’s secret weapon in fight for China

Targeting the next generation of Chinese motorists.

by on Apr.26, 2011

The new Baojun 630 will target the next wave of new Chinese car buyers.

Far from the bright lights and sophistication of its base in Shanghai, General Motors has developed a secret weapon in the duel for supremacy in the Chinese market.  In 2010, SGMWuling, or Wuling for short, generated roughly 50% of all GM’s sales in China.

Based in LiuZhou, a gritty industrial city some 1,400 kilometers (875 miles) south of Shanghai, Wuling is now the single largest brand sold in all of China – by far dominating the more familiar Buick brand that was GM;s first entry into the Chinese market. Wuling’s small, utilitarian vans dominate one of the largest and most important segments in China’s fast-growing vehicle market and it’s quickly adding capacity to capitalize on its recent success.

In addition, Wuling is launching its own car brand, Baojun, which will fill in price points below Chevrolet and appeal to motorists in China’s second, third and fourth-tier cities where buyers tend to be more concerned about value and affordability than status.

“Wuling is most respected in rural areas,” notes Kevin Wale, president of GM China, adding Baojun is aimed at market where buyers want value. Thus, the prices for the Baojun 630, which was unveiled at the Shanghai Motor Show last week, is expected to start at around $8,500. SGMW hasn’t confirmed any prices yet, however no vehicle in the line now costs more than $9,500.

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Wuling already sells one passenger car, the Letchi, which is based on the old Chevrolet Spark, and the plans are to add more models to the Baojun line fairly quickly.  It will compete for sales in inland China with regional brands that play an important role for ambitious local Chinese auto companies such as Geely and Chery.

Matthew Tsien, Wuling vice president and one of a small cadre of GM personnel assigned to LiuZhou, explained that Wuling is a three-way joint venture between GM, its Shanghai-based partner SAIC and a local, state-owned enterprise, LiuZhou Wuling Motor Co. Ltd.


Ford Earnings Exceed Expectations

Increase aided by improvements in Europe, North America.

by on Apr.26, 2011

"World cars," like the Fiesta, helped drive Ford earnings beyond analysts' expectations.

After disappointing analysts during the final months of 2010, Ford Motor Co. has delivered another surprise – but this time it has well exceeded even the more optimistic forecasts for the first quarter of the New Year, posting $2.6 billion in net income.

That’s a 22.4% year-over-year bump, and works out to 61 cents a share compared to a consensus forecast by a score of Wall Street analysts that Ford’s first-quarter 2011 earnings would come in at a still-respectable 50 cents a share.  During the same period in 2010, Ford earned $2.1 billion, or 46 cents a share.

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All told, the maker had its largest earnings for the January – March quarter since 1998.

“Our team delivered a great quarter, with solid growth and improvements in all regions,” said Ford president and CEO Alan Mulally.

Ford’s revenues jumped 18% in the latest quarter, from $28.1 billion to $33.1 billion.  That reflected strong sales in a number of key markets, notably including Europe, where the maker was able to climb out of the red.