The CarGurus Blog

2010 Opel Astra

GM has reneged on a deal that was almost closed, choosing not to sell Opel/Vauxhall and leaving the Germans angry. The latest chapter in this complicated story came after a Tuesday GM board meeting in Detroit that put forward the new corporate strategy. The company has pledged to pay back about €1.1 billion in bridge loans from German sources.

GM’s move is a setback for Magna, the prospective buyer, and the German government, which reacted predictably, and the German unions, which have offered to strike. As we last reported, the decision comes on the heels of European Union officials questioning the deal and workers in Opel factories in other countries protesting possible job cuts.

The decision came about because the company’s fortunes have been recently improving. European sales across the board are better, and GM’s U.S. sales were up 4 percent last month—no great shakes but the first increase in 21 months. (Ford saw a 3 percent increase; Chrysler a 30 percent decline.) Also, as one commentator said,

GM decided they just couldn’t envision a future without their German subsidiary, which provides most of their presence in Europe and is the main source of their fuel-efficient global vehicle platforms.

The company desperately needs these platforms and needs to be part of the global playing field. Restructuring Opel will cost some $4.4 billion—less, the board figured, than they would have had to pay out under the Magna deal, even with help from Germany.

The case for the renege also rested on keeping the company’s Insignia and Astra cars away from the competition in Russia (Magna’s interest was financed by a Russian bank). But GM is in no way out of the woods. Paul Horrell of Top Gear put it this way:

GM needs to have a solidly profitable European arm. So difficult days await the 55,000 workers in Britain and the rest of Europe, because factories will have to be shut to make sure that Opel and Vauxhall have a cost base that’s realistic for the number of cars they can sell. And more political battles will affect the result.

Despite the furor the decision has caused and will cause, I think it makes sense for GM to keep Opel. What do you think?

—jgoods

Car Industry News, Car Minded, Car Politics, Foreign Cars, General Chat

2009 Ferrari California

I’m a little jealous today of people in the UAE.

Normally, I count my blessings to live somewhere that never sees 120-degree days. Occasionally, though, it would be nice to experience something a little more exotic.

Take parades, for instance. In my city, the only parades we see consist of second-rate high school marching bands. Sometimes those parades include an “exotic” car, something like a 1987 Corvette. I can only dream of what a parade of over 100 Ferraris might look and sound like.

For those living in Dubai, though, a Ferrari parade is exactly what happened as part of the inaugural festivities of the city’s new (and world’s largest) Ferrari dealer. The Italian supercars wound through the streets of the UAE and ended up at the new Yas Marina Circuit in Abu Dhabi.

Lucky for us Ferrari-deprived Americans, the cameras were rolling and captured nearly 10 minutes of exotic car heaven. Check it out:

According to TopSpeed,

Among those participating in the parade included no less than some of the most important and influential personalities in Ferrari, including company chairman Luca Di Montezemolo, seven-time F1 champion, Michael Schumacher, current Ferrari drivers Kimi Raikkonen, Felipe Massa, and Giancarlo Fisichella, and the region’s ambassador to Italy, Claudio Doniosi.

That’s a pretty distinguished list of paraders… one I’d take over a marching band any day. Even if that day was 120 degrees.

Did anyone in the Dubai area see the convoy of Ferraris? If you could see 100 versions of any kind of car in a parade, what would you choose?

-tgriffith

Car Industry News, Car Minded, Exotic Cars, Foreign Cars, General Chat

The new BMW ActiveHybrid 7 was recently spotted by an alert Autoweek reader in Los Angeles. Car and Driver gave it a skeptical first-drive review, suggesting (without saying so exactly) that this is a somewhat ridiculous, redundant car in the BMW lineup.

What makes the ActiveHybrid 7 strange is BMW’s boast that it is the quickest hybrid sedan on the market. If speed is the objective, we’re not sure why a hybrid is the answer. Likewise, if fuel economy is the end goal, tuning the twin-turbo V-8 gas engine for an additional 40 hp and 30 lb-ft of torque seems silly. However, if a 7-series customer believes he needs a car more powerful than the 750i but doesn’t want to step up to the 12-cylinder 760Li—which we think he should—and also wants 15 percent or so better fuel economy, BMW has just the model.

Looking at the many entrants in the rarefied-price stratum of hybrids, the question we finally ask is “Why?” Particularly since the BMW goes head to head with the Lexus LS600h L, available now for at least two years. Why would one spend all that money to get a car that offers minimal performance and fuel economy advantages? To be hybrid hip, I guess.

Fisker has a different idea. They don’t want to build $110,000 BMW or Lexus-type hybrids but “affordable” plug-ins. We wrote last week that they were in negotiation for the old GM factory in Wilmington, Delaware, where they will reportedly build in three years a “family-oriented plug-in hybrid sedan that will come in at around $40K” after federal tax credits. The Karma S sedan (right) will start at $87,000. CEO Henrik Fisker isn’t all that concerned about engines. He told Autoweek that he “envisions a future where hybrids will get their own niche powerplants, specially tuned to the need of alternative technologies. A hybrid for example, probably doesn’t need to rev to 8,000 rpm.”

Fisker got a very good deal from a Department of Energy grant to buy and refurbish this plant, and that surely will give the company a leg up on the competition. Tesla just received a $29 million tax break from the state of California, which makes that state the likely home for the company’s future production.

Another stimulus, this one for electric car production, has come to Seattle to build a network of more than 2,000 car charging stations. “By December 2010, drivers in Seattle should be able to buy mass-produced, plug-in electrics that create no emissions and run for pennies a mile.” And the state has aggressively pursued not only federal money, which will fund this effort, but also the efforts of many hi-tech businesses that are greening up.

Another reason is that lots of “Generation Y” folks live in the Northwest, and they are partial not only to hybrid powertrains, but also to considering the purchase of Chinese or Indian brands of hybrids. This according to a study by AutoPacific reported in egmCarTech. If they are really hot for hybrids, they would do well to use the Hybrid Payback Calculator, which you can download here. It helps you determine whether the cost of a hybrid is really worth it. You enter in the car’s cost, miles per gallon, price per gallon of gas, and the estimated miles you drive in a month. Clever, eh? Maybe a prospective BMW ActiveHybrid 7 purchaser could use one.

What’s your opinion on high-priced hybrids? Are they worth it—and to whom?

—jgoods

Car Industry News, Car Minded, Domestic Cars, Exotic Cars, Foreign Cars, General Chat, Green Updates, Hybrid Cars

Back when Acura was doing it right

It’s not often an automaker throws up its arms and says, “Oops, we kind of screwed up and need to start over.”

While Acura hasn’t exactly gone that far, parent company Honda admits there’s some confusion regarding the brand. Autoweek is reporting that Honda’s CEO Takanobu Ito said about Acura,

We are in the midst of big changes. We’ve changed the direction of research and development.

That simple statement has huge implications. Changing direction on research and development is as close to starting over as automakers get, considering new models spend years in the R&D phase. Dump the products in the R&D pipeline and lose a good two years of new product introductions.

Since that pipeline was going to provide V8, RWD models to go head to head with the likes of BMW, Lexus and Audi, Acura dealers are being left in a bit of a lurch. Especially the ones who have spent millions on new showrooms to feature the now nonexistent new vehicles.

Just 18 months ago, Acura promised its dealers five new models. Now there will be only two, the TSX Sportwagon (which we briefly covered here) and the ZDX crossover. Neither will do much to stop Acura’s four-year sales decline.

On the positive side of all this, I’m thrilled to see an automaker realize it has been playing somewhere it shouldn’t be. It goes back to the problem with automotive advertising, when brands try to be everything to everyone. Acura is realizing that it can let BMW build BMWs and just focus on its core values and the cars it builds best.

The place Acura can really compete and succeed is back where it started: with sensible, fun, entry-level luxury cars. Remember the original Integra? I think that’s the route we’ll see future Acuras take, with a few modern luxurious and efficient twists, I’m sure.

There’s nothing confusing about an Acura that is sensible and practical.

What kinds of cars do you think Acura should be building?

-tgriffith

Car Industry News, Car Minded, Foreign Cars, General Chat

The Chinese car industry has slowed down somewhat but, as most of you know, is still thriving. Much of its manufacturing capability has been traditionally grown by foreign carmakers who planted the seeds years ago. For instance, GM in 1997

established two joint ventures with the Shanghai Automotive Industry Corporation in China. One was for manufacturing. The other venture, for design and engineering, is the Pan Asia Technical Automotive Center. The center has done the engineering to adapt various G.M. global models for the Chinese market.

This from The New York Times, recently reporting how the design of a new version of the Buick Riviera is being led by a team in China, as was done with the LaCrosse (above), the car responsible for much of GM’s sales success in that country.

My correspondent in Xi’an, Yue Han, remarked that the popularity of Buick has remained very steady over the years and is increasing in this decade. In Xi’an (home of the terracotta warriors and the giant wild goose pagoda), the LaCrosse is considered a highly desirable upscale car, as evidenced by the numbers seen on local roads. The car has become a status symbol because of its comfort, styling, and electronic amenities. Says Yue, “It is really an upper-middle-class car. But the Big People still drive Mercedes and BMWs.” That’s no different from what Buick’s market has almost always been in the U.S.

Shanghai Automotive Industry Corporation (SAIC) partnered not only with GM but also with Volkswagen in a joint venture in 1984. They created Shanghai Volkswagen, one of China’s largest car factories, producing 500,000 vehicles a year. The plant makes everything from Polos (right) and Santanas (below) to Škodas (the Czech marque owned by VW since 1991). Amidst a plunging third-quarter profit, VW was pleased to announce that it was still in the black, thanks basically to its China sales.

VW Chairman Martin Winterkorn noted that while the business climate is still “tough,” China remained the company’s largest market, accounting for one in five vehicles sold. Similarly, Buick sells far more cars in China than in the U.S. Said the Times,

For the first nine months of 2009, for instance, Buick sold 312,798 vehicles in China; in the United States, it sold 72,389.

What are the implications of China’s coming dominance in automobiles? What are its implications for GM’s future? Leave us your thoughts in a comment, please.

—jgoods

Car Industry News, Car Minded, Domestic Cars, Foreign Cars, General Chat

In a shrewd marketing ploy, Maximum Bob Lutz, GM’s noisy vice chairman, challenged all comers (driving comparable four-door sedans) to beat him in a race at the Monticello track in the Catskills. The race was yesterday, and Lutz came in seventh, behind a bunch of other CTS-Vs (driven by GM engineers and a couple of professional drivers) and a BMW M3, driven by a young whipper-snapper (as Lutz later termed his competitors), Michael Cooper.

The event was cooked up to attract auto journalists, and Jalopnik responded first, with an entry of a Jaguar XF R, later to be withdrawn owing to brake concerns. Driver Wes Siler entered a Mitsubishi EVO instead, and came in eighth. The Truth About Cars entered a CTS-V driven by Jack Baruth, which came in fifth.

Now, from one mid-70s guy to another, let me say congratulations to the man who was not only a good loser but a good driver. We all know how badly older people can drive, but here’s a guy who’s not only kept his skills, but shown the world how to get ink for a great product. Everybody from The New York Times to Facebook has been in on this story.

Cadillac recently fired its ad agency—the one that produced spots featuring a sexy lady driving a red CTS and asking, “When you turn your car on, does it return the favor?” Lutz says stunts like his challenge are lots cheaper and more effective in attracting buyers. What do you think?

—jgoods

Auto Racing, Car Industry News, Car Minded, Domestic Cars, Foreign Cars, General Chat

We’re seeing some interesting renderings of what purports to be the new Porsche 928. The car is presumed to be built on a shortened Panamera platform, giving the company another way to spread development costs and expand its range of offerings. The Panamera is supposedly in line for a gas-electric hybrid version to debut next year in Europe, and the sportier 928 could potentially use that powertrain too. Pricewise, it will come between the Panamera and the 911.

Other details from Auto Express:

The engine line-up will mirror that of the Panamera, so a 4.8-litre V8, with or without a turbocharger, producing 500bhp or 400bhp, will be available. The naturally aspirated variant is set to come with four or rear-wheel drive, while the range-topping turbo model will be 4WD only.

At this stage, much of what we hear is speculative, but the car does seem likely to be built, and the renderings look good. The 928 would basically fit into the Volkswagen-Porsche development plan tgriffith outlined recently. For a rear view, click on “Pictures” here.

1995 Porsche 928 GTS

For those of you too young to remember, the original 928 broke the rear-engine mold for Porsche and became (after the horrible 924) its first front-engine, water-cooled grand touring car. Built from 1977-1995, the car had lots of interesting tech features, including a rear-mounted transaxle, and I desperately wanted but could not afford one.

I still can’t afford one, but Porsche could be making a very smart move in bringing back the iconic 928. Until you get into the rarefied Ferrari-Aston Martin territory, the grand touring market is wide open.

Porsche’s development plans seem to make sense, at least so far. Do you foresee any roadblocks ahead as VW absorbs the company?

—jgoods

Car Industry News, Car Minded, Exotic Cars, Foreign Cars, General Chat, Hybrid Cars

Can you guess what this is?

One of the greatest parts about having kids is getting to raid their candy at Halloween. That way, I get the treats without the work of going door to door.

If you don’t have kids, or are just too ethical to steal candy from them, no worries. Cars Coming Soon has some treats for you, too. You can’t eat them, but they’re sure to raise your excitement level and give you something to look forward to in the coming months and years.

So let’s get to it!

Euro-spec Honda Accord Tourer

First, Honda isn’t known for products that create a ton of excitement. But when any company announces that a much-loved European model will surface in the States, folks tend to go a little berserk. Even if said model is a Honda station wagon. (Proof that Americans go gaga over anything we perceive as being Euro-cool.)

Expect the Honda Accord Tourer to show up in America as an Acura TSX sport wagon. Don’t confuse this with the much ballyhooed Honda Accord Crosstour that is also on the way. The TSX sport wagon, according to the good folks at Autoblog,

will be based on the TSX sedan, which is itself basically a Euro Accord. It is unclear which powertrains we’ll get, or if styling will be tweaked from its European counterpart, but it is expected to arrive next fall. Color us excited.

Ford Kuga

In other Euro news, production of the Ford Kuga SUV will move to America by 2011. Car and Driver suspects that move could lead to the Kuga replacing the aging Ford Escape. Let’s hope that’s true, because the Kuga is sleek and refined, while the Escape is bulky and well…ugly. Feel free to make your own “Kuga on the prowl” joke while gazing at the loveliness of European SUV design.

Reports have been floating around that Volkswagen is working on a U.S.-built sedan that would replace the Passat in 2011. The new midsize sedan, dubbed the NMS (shown on top!) should start at around $20K, making it much more affordable than the $27K Passat. Sketches are emerging, and it appears that Volkswagen is taking a page out of Chevy’s book. Anyone else see the Camaro resemblance here? Regardless, it looks like the NMS will be much sexier than the current Passat.

What other European models do you hope make it to the United States?

-tgriffith

Car Industry News, Car Minded, Cars Coming Soon, Domestic Cars, Foreign Cars, General Chat

Compare a Ford corporate ad...

Do you believe advertising?

TV advertising has less effect on me every day. Heck, I worked as a creative director at an ad agency, and I still don’t trust 90 percent of the ads I see. This is because companies don’t seem to sell their best attributes anymore – they’ve turned to using tactics designed to sell product regardless of how far the truth is stretched.

Advertising for the auto industry is especially complicated, because it seems to have its own set of rules. How can any company properly advertise something that has no real set price and many different features that appeal differently to many different people? It’s a tall, tricky order, and I think it’s being done wrong for these reasons:

1. The price can’t be clearly stated
Consumers are confused and on guard right away, because we know a car’s price is never set in stone.

• We know the price the manufacturer thinks a car is worth (the MSRP).
• We know we don’t ever need to pay that much.
• We look online and at newspaper and TV ads and see all kinds of special offers and prices.
• We go to the dealer and find out they would like us to pay more than the MSRP.

This is a pricing nightmare that is specific to the auto industry (you sure don’t see it at the grocery store).

2. No car does it all
When consumers start car shopping, we look at the selling points of cars (and carmakers) we are interested in. Some of us are looking for the best performance, while others want the best fuel efficiency. Some want cars that are visually appealing, while others would rather have a car that can comfortably haul a family. Some want cars that will hold their value, while others simply want the lowest price up front. Some of us want all of that in one package, as promised by some car ads, and are disappointed when we can’t find it.

...with a Ford dealer ad (combined with Toyota).
Where is the brand experience?

3. Advertising messages fall flat
We are bombarded with car ads every day. We see ads from Ford, Chevy, Toyota, and more that strive to make vehicles look amazing while artfully showing off features and performance. But minutes later we see ads from car dealers that scream (literally) about insanely low prices. From a consumer’s point of view, this is confusing, because we are having two very different experiences with the same brand. In our eyes, dealers are extensions of the manufacturers, and any sales schemes they create are reflected right back onto the automaker, which cheapens the brand message instead of reinforcing it.

I think dealer advertising tends to cancel out manufacturer advertising, leaving consumers to trust only their judgment and the opinions of people we trust.

How to fix it
The first issue, price, is something we can’t do anything about. When taken with the other two issues, though, that works itself out. We pay what we feel the car we want is worth to us.

Which brings us to the second issue: No car does it all. You know what kind of car appeals to you and why. If you’re a speed freak, you might want a Cadillac CTS-V simply because it was a few seconds faster around the Nurburgring than a BMW M5.

If you have a family, you might be in love with the Honda Odyssey because of its reputation for reliability and for holding its value. The fact that a Kia Sedona might be less expensive or a Ford Flex might be more attractive has no impact on your purchase decision.

Instead of trying to be everything to everyone, carmakers need to give it up and just honestly say what they are best at and why. Instead of searching for a new agency to produce a new gimmick every time sales take a dive (which GM is doing with Cadillac), why not work with the agency to identify core values and then build up the brand around those?

When a company focuses on its core values, the advertising falls into place (at least on the corporate level). Going a step further would be controlling dealer advertising and forcing it to conform to the corporate brand, which I think absolutely must be done.

Car consumers are smart. We know what we want. Automakers: Just tell us what you stand for, tell us what you do best, and we’ll buy your cars. Simple as that.

Does automotive advertising influence you, or do you rely on reviews and opinions of others when car shopping?

-tgriffith

Car Industry News, Car Minded, Domestic Cars, Foreign Cars, General Chat

With a population of 20 million growing at 2 percent a year, Mexico City has long been the smog capital of the hemisphere. It’s the third-largest urban area in the world and has been fighting air pollution with greater and lesser success for years. At the heart of the problem, of course, is the automobile, and specifically the proliferation of old, stinky, polluting taxis.

Now we have a far-out proposal from industrial designer Alberto Villareal for a fuel-cell-powered, drive-by-wire, solar-paneled (on the roof) taxi called MX-Libris (above), which may be just radical enough to do the job. The car won the Red Dot Design Award in 2008, and two Mexican firms have shown interest. Funding would come from the Centro de Transporte Sustentable, which promotes green transport. Go, Alberto!

Toyota FT-EV-II

Why do most electric cars look so ugly and commonplace? Do their designers deliberately turn out plug-ugly plug-ins because of some kind of group-think? These and other questions are delightfully addressed by Alice Rawsthorn in a New York Times piece. They are boring and ugly, she says, because of the problems inherent in new-car design, the reluctance of the industry to experiment and take chances, and the fears engendered by the huge investments required. As ever, however, there can be no reward without risk. Tesla has done it. Why can’t others?

New (U.S.?) Mazda 2

The Japanese want to take the lead in green car technology and production, and they are making noises as if they can and will do it. In particular, Mazda is working on the feasibility of diesels for the U.S. and, not surprisingly, they are looking at VW’s ability to market the diesel here with some success. The Mazda2 might be a diesel candidate, and there has been much speculation on what the 2008 World Car of the Year will look like, what will power it, etc., when it comes here. The car will get to the U.S. most likely in late 2010.

Honda CEO Takanobu Ito spoke out last week to a group of journalists (we mentioned it here) on Honda’s commitment to hybrids, EVs, fuel cells, and a really green, i.e., hydrogen-powered, sports car, “not like the Lexus” (the V10-powered, $375,000 Lexus LFA supercar). Plans include hybrids for the larger Honda models (Accord, etc.), but all this will take time. In any case, the CR-Z is coming soon, and that is good news.

Proof that green technology is catching on comes with the increasing competition for manufacturing facilities. Reva, the Indian carmaker, announced it was opening a plant in upstate New York; the Nissan Leaf will be made in Tennessee as well as Japan; and Fisker is redeveloping a GM plant near Wilmington, which event will naturally be announced by Delaware arch-booster Vice President Joe Biden.

Finally, we were caught up last week by a Wall Street Journal piece on “Five Technologies That Could Change Everything.” One of these is truly pie in the sky (space-based solar power panels), and another would trap and bury CO2 underground. The rest are: advanced car batteries, utility storage, and next-gen biofuels. Each clearly involves the concept of storage, which, as all car gurus know, is what finally, instrumentally, enables our vehicles to move. The costs and engineering challenges will be enormous, but in the end what choice do we really have but to move ahead? Just where to put the bets down will be the first problem.

How about letting us know what kinds of energy topics you would like to see covered in future Green Updates? Please leave us a comment.

—jgoods

Car Industry News, Car Minded, Domestic Cars, Exotic Cars, Foreign Cars, Gas for your car..., General Chat, Green Updates, Hybrid Cars