July Sales: Cash for Clunkers Spurs FoMoCo; Toyota Regains Second-Place

DETROIT – Ford Motor Company is ebullient about its first year-over-year sales increase since November 2007. Total Ford-Lincoln-Mercury sales, including fleet, rose 2 percent in July 2009 compared with July 2008, and of that, retail sales rose 9 percent. Still, it’s too early to party. The Great Recession isn’t over yet.”Right now, the legs under the economy are not strong enough to sustain a 14-16 million sales rate as we saw at the end of July,” says Ford analyst George Pipas. “A sales increase in July is not the end of the journey.”Aside from the minor increase compared with a very weak July ’08, when gasoline averaged $4.11 per gallon, Ford proved through individual model sales that the Cash for Clunkers program helped move fuel-efficient metal. Probably not coincidentally, the low-priced cars and trucks that consumers who until now were driving clunkers could afford to buy moved the most. Ford Focus sales surpassed Fusion sales, although both models were up compared with last year. Even though a four-cylinder Fusion is within a couple mpg city/highway, the smaller, cheaper Focus easily outsold the Fusion, 21,830 (up 43.6 percent) to 17,610 (up 66 percent).The redesigned-for-2009 Focus became Ford’s darling when gas topped $4 per gallon. Earlier this year, the facelifted 2010 Fusion was Ford’s savior in some of the slowest sales months in decades. Advertising dollars targeting new models helps.If Cash for Clunkers money drew a lot of prospective buyers to Ford lots in the last week, I’ve got to bet that some of those consumers trading in ’90s Explorers chose, say an $18,000-list Focus over a $23,000-list Fusion because it better met their budgets. Many of those clunkers undoubtedly were third or even fourth cars, driven by the high schoolers in the family. Estimates of how much oil the program saves may be a bit of a stretch.No matter. The program is a success for bringing consumers back into the market — either those who have been holding off or those who figured credit had dried up so much, it wasn’t worth it to walk into a showroom. General Motors estimates July sales for all makers totaled an annual rate that would equal about 11.3-million vehicles, marking the first month in 2009 above the 10-million level.And GM has just announced a lease program with U.S. Bank for Chevrolets, Buicks, GMCs and Cadillacs (its core four in North America) for New York, New Jersey, Connecticut, Michigan and Ohio through August 31. U.S. Bank leases for the new Cadillac SRX are available nationwide.Meanwhile, Chrysler says that The Wall Street Journal got it wrong Monday morning. Chrysler will continue to offer matching incentives of up to $4500 on certain models whether you bring in a clunker or not. Obviously, if your local dealer is out of, say, 2009 PT Cruisers, you’re not going to get $4500 off a 2010 model. And so, to the numbers:GM: 189,443, off 19.4 percent.Inventory of about 466,000 is the lowest on record, says sales veep Mark LaNeve.With inventories dropping for all automakers, the deals aren’t likely to get any more desperate.Chevy division sales were relatively strong, at 124,948, still down 9.3 percent.Equinox was a rare gainer, up 77.8 percent to 10,834. About 60 percent were ’10 models, and most of those were four-bangers.Buick Enclave remains strong, selling 3,797, off 2.5 percent.Cadillac, at 6,171, off 52.6 percent, was the biggest loser of the core four.Saab was off 71.7 percent to 574 and Hummer was off 57.4 percent to 799.Impala was up 9.6 percent to 14,649 but Malibu was off 7.8 percent to 15,339.Modern wagon wars continues: Toyota sold 9,407 Highlanders, (+39.1 percent), Chevy sold 6,690 Traverses, Honda sold 6,430 Pilots (-15.3 percent), Dodge sold 4,165 Journeys (+21 percent) and Ford sold 3,631 Flexes (+64.7 percent).The new Camaro continues to be in short supply. Chevy sold 7,113, vs. 6,686 Ford Mustangs (-37.6 percent) and 886 Dodge Challengers (-69 percent).GM will build some 2010 G6s for fleet customers, LaNeve said, making it the last Pontiac.The New GM of Chevy, Buick, GMC and Cadillac, sold 160,078 vehicles, a couple thousand more than Ford/Lincoln/Mercury but short of Toyota.Toyota-Scion-Lexus: 174,872, off 11.4 percent.Toyota division accounted for 156,355 (including Scions), off 10.8 percent, making Toyota the U.S.’ best-selling brand.Lexus fell 16.5 percent to 18,517.Prius jumped 29.7 percent to 19,173. Camry sales fell 19.4 percent to a still-strong 33,974.RAV4 may have benefited from the clunkers credit, up 32.5 percent to 15,912.Midsize pickups also are doing well. Tacoma was up 7.6 percent to 12,552.Monthly Scion numbers: 6,754, vs. 11,906 in July ’08.Ford-Lincoln-Mercury: 158,838, up 2 percent.Focus was Ford’s best-selling car, up 43.6 percent to 21,830.Fusion was up 66 percent to 17,610.F-150 remains Ford’s best-selling vehicle, off 19 percent to 36,327.Escape was up 94.2 percent to 20,241.Ranger was up 64.5 percent to 7,695. Looks like another Cash for Clunkers winner.Taurus was off 57.1 percent to 1,760 as Ford ramped down the old model.Mercury Milan was up 59.8 percent to 2,934 while Mariner was up 70.5 percent to 3,682 as the Lincoln side of the showroom suffered a 24.3 percent drop.Inventory of 295,000 vehicles, averaging less than a 50-day supply, is 41 percent thinner than at the end of July ’08.Honda-Acura: 114,690, off 17.3 percent.That’s 106,028 Hondas, off 15.8 percent, and 8,662 Acuras, off 32.5 percent.Civic was up 3.1 percent to 30,037.Accord was off 28.1 percent to 29,774.Fit was off 27.6 percent to 8,876 but CR-V was up 9.9 percent to 19,151.Acura RDX was off 62.5 percent to 519 and TSX was off 35.8 percent to 2,232.Chrysler LLC: 88,900, off 9 percent.Winners were small models, helped by heavy incentives. Chrysler PT Cruiser was up 24 percent to 4,092 sold.Jeep Patriot was up 134 percent to 8,084 and Compass was up 95 percent.Jeep Wrangler, which posted increases for the first five months of the year, was down for the second month in a row, off 25 percent to 4,540.Dodge Caliber was up 63 percent to 7,814.Avenger was up 30 percent to 5,616.Sebring was off 27 percent to 2,781. Chrysler has sold 13,466 for the entire year so far, well below Ford Fusion’s monthly sales.Chrysler Town & Country fell 15 percent to 6,837. Dodge Caravan was up 15 percent to 8,405, however.Ram was off 17 percent to 17,723.Nissan-Infiniti: 71,847, off 24.6 percent.Nissan division was off 24.8 percent to 64,751.Infiniti was off 23.3 percent to 7,096.Nissan Versa was off just 2 percent to 8,530, though Sentra fell 13.5 percent to 9,496.Rogue sales were up 3.8 percent to 6,770.Z was up 11.9 percent to 890. Inexplicably, Infiniti QX56 was up 0.4 percent to 553.Nissan GT-R was off by 19 units to 128.OTHERS …Hyundai says 22 percent of its trade-ins were “clunkers.” Sales rose 12 percent, to 45,553. Accent, Sonata, Elantra and Genesis all posted gains and Santa Fe was down very slightly.Kia sold 29,345 units, up 1,324 units from last July. Subaru was up an impressive 34 percent, to 21,839. Mazda sold 19,032, off 15.1 percent.BMW Group, including Mini, was off 26.7 percent, to 21,253. BMW brand sold 16,381, off 31.5 percent. Mini was off 3.8 percent, to 4,872. Only all-ne
w models gained sales last month; BMW Z4 (up 33.8-percent) and 7 Series (up 14.5 percent), and Mini Cooper convertible (up 45.1 percent).Cash for Clunkers helped Volkswagen, which was up 0.7 percent, to 20,590 while Audi says it outperformed the premium segment, dropping just 5.8 percent, to 6,407. The clunkers program does not help with new cars north of $45,000.Mercedes-Benz USA, sold 17,646, including 16,228 Mercedes (off 21.7 percent) and 1,418 smarts, off 44.6 percent.Jaguar Land Rover fell 25 percent, to 2,607. Jaguar was down 45 percent, to 785 cars and Land Rover was down 11 percent, to 1,822.
Source : blogs.motortrend.com/6564996/car-news/july-sales-cash-for-clunkers-spurs-fomoco-toyota-regains-second-place/index.html

Open Letter to Fritz Henderson

DETROIT – You’ve had a rough couple of weeks, personally, during the early stages of taking what was once the World’s Largest Automaker through Chapter 11 reorganization. You’ve been quoted as saying you expect to remain General Motors’ chief executive officer after the proceedings are over. And just now, some of GM’s investors and bondholders have filed objections to the Section 363 plans in bankruptcy court. Some critics suggest you get the boot, like your predecessor and mentor, Rick Wagoner.

They say GM needs to change its culture, pointing to Ford Motor Company, which changed its ways when William Clay Ford gave up his CEO title to Alan Mulally. The rank-and-file aren’t scared to ask probing questions out there in Dearborn, anymore.

I agree with those critics that GM needs to change its culture, but that doesn’t mean you need to go. Mr. Henderson – Fritz, if I may – you need some fresh blood at the top of the organizational chart. Bob Lutz, who retires at the end of this year, was a good start. But even if he questioned things like no one at GM before him (okay, maybe since John DeLorean, at least) you need to find even more radical gadfly executives.

With Lutz running the product side, you’ve had far more, and greater, successes than failures the last five years. I’m not going to count anything in development before the ’04 Pontiac GTO, or Bob Lutz would have to take responsibility for the Pontiac G6. He can take credit for the ’08 Chevy Malibu and Cadillac CTS, the Pontiac G8 (a good car, even if a marketplace failure), the Buick Enclave and ’10 LaCrosse, the Opel Insignia, ’10 Cadillac SRX and Chevy Equinox, and upcoming models like the Chevy Cruze, Volt and Orlando.

There’s one recent failure, though, that epitomizes what’s been wrong with GM for decades. I’m talking about the Pontiac Solstice and Saturn Sky. Surprised? Yes, and I’m surprised that the Solstice, which was the best-selling two-seat roadster in the U.S. for a short time after it launched has lasted just one lifecycle. And not a full lifecycle at that.

Pontiac is going away and Roger Penske is about to buy Saturn. Penske won’t get the Sky, not even for a year or two. The Wilmington, Delaware factory and with it the Kappa rear-wheel-drive platform, are history. This would not have been an inconsiderable flushing of money down the toilet — not only for New GM, but for Old GM as well. It recalls the Pontiac Fiero, a radical design with some promise until they started catching fire in the unfavorable, literal sense of the term.

What, precisely, went wrong with the Kappas? Us car guys in general love cars built to be fun-to-drive, and car guys like me, specifically, like lightweight roadsters with the emphasis on handling rather than straight-line acceleration. Franz Von Holzhausen’s voluptuous Solstice design certainly was pleasing to the eye.

That was the first problem, though; the primacy of GM Design over practical engineering and Lutz’s determination that the production Solstice look like the concept, and that it come in cheaper than a Mazda MX-5 Miata.

Now, you needed an all-new, RWD platform, one that used some FWD small-car bits. No problem there – the 1990 Miata was very much a parts bin car, including some parts from the only other RWD Mazda car, the RX-7. The Miata undoubtedly had a longer gestation period, but it worked, right out of the box. And Mazda has managed to update the car without straying from its basic nature, as a lightweight, tossable roadster that most new-car buyers can afford. Unlike the British and Italian sports cars that served as its inspiration, Miatas tend to last, making it affordable for most used car buyers, too.

Your basic problem is this: the Pontiac Solstice began with a drawing, then a concept. Then it got a platform and a drivetrain. It was designed from the outside-in.

Colin Chapman would have done it as Mazda did (if you don’t know who he is, you should find out, fast): it designed the Miata from the inside-out. Front engine with the driveshaft running to the rear wheels, within a backbone chassis, designed first. Give it quick, precise steering and stiff, but compliant handling and ride. Add two seats, then – and only then – wrap some sheetmetal around it.

Somehow, Mazda managed to eke out trunk space and interior cubbies out of this design. Your Solstice/Sky had room for no more than a briefcase in the trunk. And because GM stuck with the early Corvette-style “headrest” moldings in the trunklid, you have to open the trunklid the wrong way. No fun in the rain.

Meanwhile, inside, there’s no room – nothing – for basic necessities like parking cards, sunglasses, iPods, tollbooth change. Unless you count that cheap plastic bin between the seats. It’s hard to reach while you’re driving, and on our unsuccessful Car of the Year entrant, the latch came broken.

To raise or lower the top, you have to get out of the car. There are those recalcitrant remote-operated latches on the top’s flying buttresses. Pop those up from inside, then get out, fold up the front of the top and then smush the glass backlight down, hard, until you think you’re about to crack it in two. Engineering this top added cost and time to the Kappa program. It’s a convertible top, fercrissakes, not extended-range electric technology.

Full disclosure. Between my wife and me, we’re on our third Miata. On my first one, a ’94 R-package, I could raise or lower the top from behind the wheel, without unbuckling my seatbelt. It’s fun, see, to keep the top down until the rain is just about ready to pour.

We have an ’08 with the folding hardtop, now, the epitome of elegant design. We lose no precious trunk space, top up or down, and can raise or lower the two-piece hardtop in about half the time it takes to raise or lower the Solstice/Sky’s ragtop. Without leaving our seats.

You’ve just released a hardtop Solstice, while at the same time pulling the plug on Pontiac. It doesn’t even have space to store the removable hardtop in its hatch-boot.

I know. Sports cars aren’t meant to be practical. Believe me, I’ve owned nearly as many two-seaters as four/five-passenger cars. (The header latches on the Solstice/Sky, by the way, were done as well as the ones on the ’77 Triumph Spitfire I had in the early ’80s.)

I’d forgive the lack of practical space if the Solstice/Sky matched the Miata for handling. Not even close. The Solstice/Sky felt like an overweight two-seat, cut-down version of the 2002 Pontiac Firebird, with all the understeer you’ve built into your small cars since Ralph Nader published “Unsafe at Any Speed.”

It took the upgrade from a 2.4-liter four to the Solstice GXP/Sky Redline’s 2.0-liter turbo to make the cars the least bit fun to drive. I know, you’ve heard enough of the name “Miata,” but that car was fun to drive out of the box, even with an anemic 116-horsepower Ford Escort engine.

Pontiac launched the Solstice some 17 years after Mazda launched the Miata. Didn’t GM take a look at the competition, the benchmark? I’ve heard that GM designers and engineers had just one Mazda Miata in its competitive fleet as it was finishing up the ’06 Solstice. Just one. And it was an automatic.

Fact is, even in the dismal market of 2008, when the Miata outsold the Solstice and Sky individually in the U.S., Solstice/Sky combined sales outpaced the Miata, 19,801 to 10,977. The ’07 numbers were 28,042 for Solstice/Sky, versus 15,075 for the Miata, while Mazda sells more than twice that U.S. number globally, in a good year. Figure total Kappa sales topped 35,000 globally, including the Opel GT variant, and the sales in a good year was nothing to sneeze at, for a niche car. Tell me that Kappa is being discontinued because you’re getting rid of Pontiac and Saturn and I won’t believe it. Another lifecycle, as a Chevy, would give you a better chance of making money on the platform.

You can point to stricter fuel economy standards, but there will be room for cars like the Miata, or Sky, even if they have to run on one-and-a-half liter turbo engines instead of what they’ve got now. In the future, with people buying fewer cars, the Miata will be a first or second car more than a third or fourth, which is why folding hardtops and minimal luggage space will be more important than ever.

This reeks of GM’s 50-year habit of launching innovative small cars, failing to meet consumer expectations, failing to make money on them, and then dropping them for another model with a new name. Corvair, Vega, Citation, Cavalier … even the Cobalt turns out to be a single-cycle model. It will be replaced with the ever-important Chevy Cruze. You can’t afford not to make profitable, high-quality compacts and subcompacts. They all will be front-wheel-drive.

I fear that the problems with the Kappa and larger Zeta rear-wheel-drive platforms will give you an excuse to give up on inexpensive rear-drive platforms, forever. Only Cadillacs, including a compact “Alpha,” and the ultra-niche Corvette are likely to live on to 2020.

It’s one thing to admit a car like the Solstice/Sky isn’t working and drop it quickly. It’s another to figure out that there is a small, but enthusiastic following for this kind of car, the kind of following that could tout your FWD compacts to the great, non-enthusiast masses. So I’m having trouble believing that GM’s current upper-management can react to Kappa’s failure by ordering designers and engineers back to the drawing boards, to design a new, better, small RWD platform. That’s where cultural change comes in; the kind of change that would prove me wrong.

Source : blogs.motortrend.com/6523729/editorial/open-letter-to-fritz-henderson/index.html

Koenigsegg Is the Right Size to Own Saab

DETROIT – “GM’s reinvention achieves another milestone,” reads the press release announcing the automaker’s sale of Saab Automobile AB (a redundant name, given the “ab” in Saab) to Koenigsegg Group AB. And so one tiny, proud Swedish automaker will own another tiny, but somewhat larger Swedish automaker. Good match. And good deal for Koenigsegg. The “reinvention” of GM includes selling off unwanted divisions, including Hummer and Saturn, for just about nothing.

Like Fiat picking up 20 percent of Chrysler with no cash down, there’s no indication so far that Koenigsegg will pay GM anything for 100 percent of Saab. Meanwhile, the European Investment Bank now is willing to kick in $600 million to keep Saab’s expensive factory in Trollhattan running under Koenigsegg ownership. That’s operating capital that GM was unable to procure for Saab. And yet, those true blue-and-white Saabs will run on GM underpinnings for some time to come.

Trollhattan will build the all-new 2011 9-5 beginning next year. It’s based on the Epsilon II platform (Opel Insignia, ’10 Buick LaCrosse). That factory also will continue to build the 9-3, which is on the Epsilon I platform (Chevy Malibu, etc.). And all indications are that GM will go forward with 9-4x production in Ramos Arizpe, Mexico, alongside the new Cadillac SRX.

The 9-4x has all the makings of becoming what the 9-7x could never be — a real Saab, and not just by its ignition location. The production 9-4x is said to be very close in interior and exterior design to the concept, making it perhaps the most handsome midsize crossover in the segment. It’s critical to maintaining a Saab presence, no matter how small, in North America. And that segment is important in Europe (BMW X3/Audi Q5/Mercedes GLK, etc.) too.

But there lies the problem GM has had in owning Saab. It bought 50-percent of the Swedish company after it lost Jaguar to Ford Motor Company in the late ’80s, then bought the remaining 50 percent a decade later. GM tried to turn a small, quirky automaker that had a small, quirky and loyal following into a kind of mainstream entry-level luxury manufacturer.

Saab and Volvo operate two of the most expensive manufacturing facilities in the world, in southern Sweden. This explains why of all Ford’s foreign brands, selling Volvo is the toughest proposition.

It will be tough for Koenigsegg to keep costs, and prices down. At least to the low-volume exoticar manufacturer, Saab already is far more mainstream and high-volume. If Koenigsegg can be satisfied with small margins and can keep the volume 9-3 model in the upper $20s to $30s in current U.S. dollars, Saab will have a future, once again, as a small-volume maker of interesting, quirky automobiles for people who don’t want to see their cars coming and going.

Source : blogs.motortrend.com/6521869/corporate/koenigsegg-is-the-right-size-to-own-saab/index.html