23 June 2007

Beware of the Fleet Queens

Yesterday, I came across some interesting data on fleet sales as a percentage of total sales for each car and truck sold in the US for the first half of the 2007 model year. There were some surprises and some non-surprises in reviewing the list.

Before pointing out some of the more notable items, let's talk about fleet sales. What is a "fleet sale" anyway? Well, auto sales are broken into two main categories: retail sales and fleet sales. Every manufacturer wants high retail sales, because they're not giving volume discounts on the vehicles, retail units are generally better equipped than the ones sold to fleets, and retail sales don't end up at auctions or used car lots for half of their original MSRP with 10,000 miles after only a year. Heavy fleet sales (and thus a large volume of fleet vehicles on the used car market) depress residual values of every one of that model, including ones sold to retail customers , making unhappy retail customers and likely further reducing retail sales.

Fleet sales can also be broken down into a few subcategories: commercial, government, and rental. The daily rental fleet sales are the worst kind, because the cars are driven by hundreds of different people during their time owned by Hertz or Avis, and not necessarily babied by their drivers. They are also quickly sold back to the manufacturer, as opposed to a car sold to a company for use by a sales representative, where he or she would keep the car for three years before turning it in. Also, having a substandard car in your lineup that is a "rental car favorite" is not a good way to turn renters into future buyers, because you're not putting your best foot forward as a manufacturer. For example, imagine if the general public thought that all GM sedans were on par with the Grand Prix, when the reality is that many are better.

The source of my data is http://www.fleet-central.com. Fleet Central is a website for automotive fleet managers and appears to be pretty comprehensive. Fleet percentages given are as a percent of the model's total sales midway through 2007 unless otherwise noted, and include commercial, government, and daily rental sales.

The Non-Surprises
Ford Taurus

Think about the cars you have rented over the past few years. Most likely, they were models such as Chevy Malibu (58.8%) or Impala (53.9%), Ford Taurus (96.5%), Pontiac Grand Prix (77.6%), etc. For this reason, these models are all leaders on this list. Some others on the list are not surprises; the Ford Crown Victoria, a government favorite (thanks to police departments) sold 91.3% of its overall sales to fleets, mostly governmental agencies. The Ford Econoline, a favorite of plumbers and contractors, was 69.2% fleet sales because not many retail buyers need or want the capability and size of a full-size van.

The Surprises
Dodge Avenger

This part is more fun, but it's not necessarily good news. There are some 2008 model vehicles, just introduced in the past few months that are already selling more than half of their production to fleets (and mostly daily rental fleets). Offenders include the Chrysler Sebring (63.5%) and Dodge Avenger (79.4%!!). No wonder Chrysler management is so concerned about those two vehicles and has implemented an immediate improvement program to make them more attractive to people who want to buy the cars, not just catering to people who rent them and don't get to choose.

Other relatively new models with somewhat high fleet percentages include the Kia Optima (52.8%), Dodge Caliber (45.1%), Ford Edge (32.0%), and Chrysler Aspen (31.2%).

The Fleet "Hall of Shame"
Pontiac Grand Prix

The following vehicles sold more than half of their overall sales to fleets; if you would like to buy one of these cars for yourself, you can probably get a great deal on a slightly used one, but you're likely to take a huge depreciation hit if you decide to be in the minority and buy one of these new from the dealer.
  • Chevrolet Express (58.4%)
  • Chevrolet Impala (53.9%)
  • Chevrolet Malibu (58.8%)
  • Chevrolet Uplander (70.9%)
  • Chrysler Sebring (63.5%)
  • Dodge Avenger (79.4%)
  • Dodge Caravan (54.8%)
  • Dodge Charger (56.2%)
  • Chrysler Crossfire (70.6%)
  • Chrysler PT Cruiser (61.8%)
  • Dodge Magnum (60.9%)
  • Ford Econoline (69.2%)
  • Ford Taurus (old version) (96.5%)
  • GMC Savana (50.9%)
  • Kia Optima (52.8%)
  • Mercury Grand Marquis (50.0%)
Study the list above carefully; odds are, next time you visit the rental car counter, they'll hand you the keys to one of the models above.

The full lists are available here:

Cars: http://www.fleet-central.com/af/stats2007/cars_web.pdf
Trucks: http://www.fleet-central.com/af/stats2007/trucks_web.pdf

22 June 2007

The Hype Around The 2008 Cadillac CTS Is Premature

The automotive equivalent of Jesus Christ is coming to Cadillac next year. Or that's what assorted fanboys of the GM persuasion would have you believe. A better interior, a sleeker exterior package, and upgraded engines are all cited as being reasons for this optimism. But dig deeper and what do we find?

1. Excessive Mass
The CTS will weigh 3861 pounds in manual transmission form, 3872 pounds in automatic transmission form, and a whopping 4101 pounds in all wheel drive configurations, according to THIS GM press release. That's hefty. For the sake of comparison, a BMW 335xi tops out at 3825 pounds, an Infiniti G35x tops out at 3703 pounds, an Audi A4 3.2 Quattro tops out at 3780 pounds, and a Lexus IS350 tops out at 3527 pounds. All of the competition noted, except for the Lexus have AWD in those weights listed. Note that ALL of the AWD competition actually weighs LESS than a regular old 2WD 2008 CTS. Ladies and gentlemen, the next gen CTS is a porker. How this will translate into a 'sports sedan' is yet to be seen, but for the sake of argument, the A4 is often derided as being too heavy. So what are we to expect of a 4100 pound CTS?

2.Barely Enough Power
If the 2008 CTS was released as a 2006 model, I would have no complaints. It features two engines- the much loved regular 3.6 HF V6 from the GM family, and a brand new 3.6 HF DI V6 making a confirmed 304 horsepower. Yes, the torque curve is very flat. Yes, it's competitive. But note my point- if it came out in 2006, it would be more than enough. As it stands, a yet to be released 2008 CTS already trails the Lexus IS350, the Infiniti G35, and the BMW 335i (300/300) in power stats. Incredible. If you want a perfect example of GM failing to take into account the competition and benchmarking moving targets, this is it. Yes, the base engine is more powerful than most others in the class. No, that doesn't mean shit, since most advertising centers around the top end engine outputs. Not to mention that in a few months, Infiniti will be dropping a 3.7 VQ into their G coupe (which will no doubt make its way to the sedan). Combine barely competitive power with excessive weight, and the prognosis doesn't look good.

3. Dull Styling
Yeah yeah, styling is subjective. But honestly, apart from the front fascia, how much major change has been made to this vehicle? A similar argument can be made for the redesign of the G35- it looks a lot like its predecessor, but then again, the G35 isn't the next stage of a 'design revolution' for Infiniti, like the CTS is for Cadillac. Yes, it's a bold grille. Yes, the side vents are cute, if a bit played out. But beyond that, I could be looking at a current generation STS. Just a big let down in a field where Cadillac could have really made a splash.

4. Missing Features
I'm not like some others that will bemoan the lack of push button start and the lack of Bluetooth as reasons why someone wouldn't buy a CTS- but the question remains- why the hell is GM so against upgrading their products to at least the minimum of the market standards? If even one sale is lost because someone wants Bluetooth and/or push button start in their vehicle, that's one sale too many, and a sale that GM could have easily kept. Instead, their reliance on OnStar has become a boon and a burden to the company- they're afraid to poach OnStar customers with Bluetooth capability, but will never move forward technologically unless they do so.

At the end of the day, the biggest issue that the new CTS will encounter is how to overcome its weight and power issues. The new interior will no doubt boost lagging sales, but if the goal of Cadillac is to once again become the standard of the world, they'll have to do much better than this- because 'this' is competitive with vehicles of today, never mind vehicles that will be released and available in 2008.

21 June 2007

Tom Cruise: Future Attorney General

Via the Globe & Mail-

The government has the power to seize and destroy cars that have been adapted for street racing, and can do so before a race takes place or any charges are laid, Ontario Attorney General Michael Bryant said Wednesday.

Car junkies who pour thousands of dollars into their vehicles to make them as fast as possible are wasting their money, Mr. Bryant said.

He warned potential racers that all it takes is a tip from police to seize and destroy their cars.

“If we can establish someone has parts and they're juicing up their car — obviously for the purpose of street racing — then we can seize those vehicles,” Mr. Bryant said.

In the last couple of weeks there have been two high speed accidents in the Toronto region that have caused deaths. The most recent was a few days ago, when a Grand Am and a Mustang on their way up to cottage country, were swerving in and out of traffic at high speed, causing a tractor trailer to fishtail and subesequently crash, killing the driver almost immediately.

Yes, it's tragic.

Yes, the idiot drivers should be prosecuted to the full extent of the law (which is laughably lenient).

No, it's the not the fault of street racers.

There's a very real difference between street racing and idiotic driving. Street racers are, well, racing. And idiotic drivers, well, are driving idiotically.

My real beef here is that the government of Ontario is apparently taking a page from Supreme Court Justice Antonin Scalia, and interpreting fictitious events as being plausible in the real world. No Mr. Bryant, this is not 'Minority Report'- you can't predict who will be street racing their vehicles, who will be making their vehicles more powerful just for kicks, and who will be actually taking their vehicles to the track. Using this line of reasoning, anyone who bodybuilds for the purposes of being stronger should theoretically be pre-arrested for assault. And anyone who buys a legal gun for the range should theoretically be pre-arrested for murder. And anyone who buys a DVD burner should be pre-arrested for piracy. And anyone who takes a penny from the 'take a penny leave a penny jar' should be pre-arrested for armed robbery.

Another issue with what Mr. Bryant has said is exactly what constitutes a street racing vehicle? Is the idiot down the street with the fart can muffler and racing decals looking to street race his Honda Civic? Or is it the guy who just bought an AMG CLS with about 600 HP? Or the kids who just had their parents buy them a WRX STi for their birthday? As seen from the accident a few days ago, you don't need a performance car OR mods to street race- the Grand Am being a prime example.

Not that I'm surprised at their actions. With a provincial election coming soon, and the Toronto media in an uproar over these 'idiot' kids speeding everywhere around the city (funny, because I drive everyday and I don't see them), the easy decision for a government is to overreact. And they satisfied the criteria with this move.

Unfortunately, the real issue here, and the overlooked issue here, is that police forces, not just in Toronto, but around North America, are not interested in having safe roads for the most part- they're interested in ticket revenue and catching speeders. And until that changes, we're going to continue to see such accidents.

20 June 2007

RIP Monte Carlo: Don't Let the Door Hit Your Ass on the Way Out

GM announced today that the last front wheel drive, W-body Monte Carlo "sports coupe" has been built. The Monte Carlo of the past several years took all that was wrong with the Impala (review here) and added to it a cheaper looking interior, large and impractical coupe doors, the biggest quarter panels since a 1976 Coupe de Ville (slight exaggeration), and a redneck/NASCAR owner stereotype.

Similar to the Impala, the Monte Carlo is a perfect example of the OLD GM and exactly the kind of car that it should not be building. I'm glad that they finally gave up on it. Sales were a lukewarm 34,113 in the 2006 calendar year, and were down over 30% so far in 2007. Few buyers want coupes after their first two years on the market, and even fewer want ones with gangly styling, a NASCAR alter ego, and chassis architecture that dates to the late 1980s (albeit with periodic improvements).

I'm not going to miss the Monte Carlo, at least as it was in this form. My favorite style is the first generation. The second generation was way too overstyled, and the next generation began a trend of mediocrity for the car. The low point, though, was probably the Lumina-looking Monte Carlo of the 1990s that had ZERO style, grace, or character. At least the last generation had a little style, even if it wasn't exactly a current style.

Rest in peace. Now, will the NASCAR fans in the South start driving Impala SSs? It's hard for me to imagine, unless they release a special "Intimidator" edition with black paint and silver ground effects.

Chrysler Finally Figures Out How To Rid Itself of 2006 Models

I don't live anywhere near Detroit (about 550 miles away), but even I've heard the stories over the past year or two of Chrysler overproducing vehicles to keep the factories running, even in the face of falling demand for their products (particularly the larger, more fuel-thirsty ones). Since they were unable to convince dealers to take many of them, and still had a huge inventory problem, many of them were being parked in overflow parking lots at the airport in Detroit. There were acres upon acres of new 2007 Jeep Commanders, Dodge Durangos, and more.

Chrysler finally wised up a few months ago and discontinued this practice, after having at one time or another over 100,000 unsold, unordered new vehicles in the "sales bank." Chrysler watchers (or Iacocca autobiography readers) may recall that this very thing - the sales bank - nearly bankrupted the company in the late 70s/early 80s. This time, all it did was cause a multi-billion dollar loss, the head sales & marketing guy (Joe Eberhardt) to lose his job, and lead to much of the pressure that lead Daimler to unload the Chrysler part of its name.

Meanwhile, most of the damage was done. The sales bank vehicles were already built, and there were billions of dollars in finished goods inventory that nobody wanted, sitting in the Detroit weather, with birds crapping on them and the sun, rain, wind, and snow depreciating them. Last I heard, most of them had been accepted by dealers. But at this point, with many 2008 models hitting dealers, who wants to buy a "new" 2006 that was built almost two years ago, when 2007s are becoming heavily discounted?

Chrysler's solution to this was to basically allow dealers to buy the leftovers themselves. You see, dealers who held 2006s and used them as loaners or test drivers for as little as one day could be considered used cars, transferred to the used car lot, and counted as a new car sale. So, aside from helping to clear out excess [old] new car inventory, this policy change also bumped up Chrysler's May 2007 sales results. Previously, the rule was that a vehicle had to be a loaner for 90 days before it could be considered a used car. What's not clear is who is eating the loss in value - Chrysler or the dealers - when a vehicle priced at $30,000 suddenly becomes a $22,000 vehicle overnight. But if you're in the market for a new Chrysler vehicle, particularly one where there might be new 2006 models still out there, it might be a good time to go shopping. According to the company, there were 9,800 2006 Chrysler Group vehicles in dealer inventory as of May 31, 2007.

Toyota Changes Course

The Wall Street Journal reported this morning that Toyota is putting the brakes on its factory building activities in the US, once the new plant for Highlander crossovers in Tupelo, Mississippi is finished in 2010. Toyota has already scaled back its plans for the Tupelo plant, reducing initial production capacity from 200,000 to 150,000 vehicles and delaying its opening date from 2009 to 2010.

It seems that the company is concerned about several factors - increased US labor and material costs, a geographically diverse North American manufacturing base, and the quality problems that have uncharacteristically confronted Toyota for the past few years. Also, the company is in the unfamiliar position of having excess production capacity at its North American plants (it can build about 100,000 more Tundras per year than it's on pace to this year).

Over the years, Toyota has built factories in the US for two main reasons: to build political support in as many communities/states as possible, and to provide a sort of "insurance policy" against protectionist policies and currency fluctuations that would make putting all of its factory "eggs" into one basket potentially disastrous. However, with the Japanese yen being inexpensive relative to the dollar, it's more profitable for Toyota to import cars from Japan.

According to the article, the policy shift was driven by two of the company's former presidents: Shoichiro Toyoda (1981-1992) and Hiroshi Okuda (1995-1999) who are still members of the company's board. These men were concerned that Toyota has built too many plants in the US too quickly, and hadn't fully considered the economics of the decisions.

The supply chain complexities that come from a geographically diverse manufacturing base (Toyota has plants for engines, parts, or vehicles in eight states). Toyota's four most recent assembly plant projects have only one production line each (the most efficient plants Toyota operates have two or more lines).

In contrast, most of Toyota's factories in Japan are concentrated in Toyota City, which makes the supply chain much easier and less expensive to manage, and most of the company's plants in Japan can build up to six different models each, instead of one or two built in the company's North American plants.

My take: It appears that Toyota has allowed themselves to become a little complacent over the years...almost making very expensive factory construction decisions on auto pilot, when there may have been a better alternative. I congratulate them on identifying the problem before it's too late, like most of their domestic competition did for the past two decades. If Toyota's record profits of the past year or two are coming on the back of some fundamentally unsound decisions like these, imagine what they can accomplish if they sharpen their focus and concentrate more on profitability and cost reductions than on political goodwill and making the "automatic" choice.

19 June 2007

The Ugliest Vehicles On The Road Today

It's amazing to note that even with all the increased marketing dollars out there today, and with all the focus on what the customer wants, we still see the styling monstrosities out there on the road that we still do. One part of me says that's a good thing- it means that companies don't just want to create 'me too' products. Another part of me says that sometimes it's better being anonymous and unseen.

Lost in all the hoopla over the upcoming G8 is that this likely means the end of the road for the W-body Pontiac- the Pontiac Grand Prix. Up until the current generation, it was easily the best looking of the group, and was actually one of the best looking sedans on the market. You know the one- the touted 'wide track' version that actually wasn't a wide track at all. But I digress. Whoever was responsible for the current gen took all the good out of the old design and tacked on an unneeded 'sedan coupe' element in the C-pillar which completely destroyed whatever lines the car originally had. Paired up with a far too blocky front end, and a rear end that reminds me of fish gills for some odd reason, and you've got a recipe for hideousness.

There are very few things that current day Detroit innovates in, but big trucks and SUVs is definitely one of them. And it was because of this innovation and the success it engendered that Nissan threw their hat into the ring with the Nissan Armada (nee Pathfinder Armada) and Infiniti QX56. In my opinion, the Nissan almost gets a pass on the styling simply because of what I stated earlier- at least it was trying something different. But to go and simply slap a big chrome grille and huge wheels on the Infiniti model only made what was once good looking butch into simply butch. To this day, I have no idea what they're thinking with the rear door handles and the way the back pillar sort of swoops forward.

Always trying to be different, Honda struck out big time when they dropped the bomb that is the Honda Ridgeline on the public. Looking like a retarded future version of the Chevy Avalanche, but without any sort of masculinity or machismo, it was destined to fail as a 'real' truck for 'real' truckers from the moment it was released. The worst part about the ugly styling? It's not even ergonomic- the high bed makes lifting things over the side impossible, and the C-pillar design leaves a huge blind spot.

Back in the day, Toyota released the T100, and expected it to take the full size market by storm. It was too wimpy, too tired, and too bland. So they went back to the drawing board and came out with a new truck with a new name that didn't evoke Arnold- the Tundra. And it too was too wimpy, too tired, and too bland. So for the third time, they said screw it and decided to make a truck that was full of testosterone, and apparently, every visual cue they could pilfer from other manufacturers in the market. The result is the new Toyota Tundra. A bit of Dodge Ram in the front, a bit of Ford F150 in the side profile, and a bit of GM twins in the stance. It's all there. Of course, Toyota also forgot to make it coherent. To these eyes, the Tundra looks like a constipated baleen whale.

Toyota #2 on the list. The story of the current gen Toyota Camry is almost the same as the Tundra, but with a LOT more sales. So the question is- why would Toyota tinker with success? On second thought, scanning the sales figures, they haven't really messed the success up. But nonetheless, much like Coke did in the 80's when they copied Pepsi and failed miserably, the Camry is an example of a market leader that for some reason has decided to morph itself into the competition. Namely, a front end gracelessly pilfered from the Mazda 6, and the same bloat evident in the Tundra at all angles. Even the SE badge with requisite body kit does nothing but enhance the overall visual bulk of this land barge.

The 2007 Chrysler Sebring. Nuff' said.

You're Lincoln. You've basically created the upscale large SUV market with your Navigator- the only certified hit for the brand of the last 15 years. It drives old customers to the dealership, it drives young customers to the dealership. It's featured in music videos everywhere, and is a status symbol to most everyone who sees it and who isn't a member of Greenpeace. What to do with your updated model? Apparently the answer is to leave everything well enough alone except for affixing the automotive equivalent of 1930's braces to the front of your vehicle. I won't even mention reincarnating your dashboard of the 50's. Kudos Lincoln!

The Nissan Sentra has always been the ugly duckling of the Nissan lineup. Always too square. Always not proportioned right. Always looking a bit dorky. The peak of such dorkiness was in the late 90's versions, which looked like what a Japanese designer envisioned an accountant would want to drive. Fear not however, for the current gen Sentra is here to take that honour away! You'd think that Nissan would follow a simple formula- nicely styled Altima - a few inches here and there = good looking Sentra. But no, they went and fuxxored it all up by taking a few inches off at each end, but forgetting to take it off from the top too. The result is a weirdly shaped too tall vehicle that looks more tippy than a Suzuki Samurai, and slower than a fully laden Hummer H1. Not good.

The last monstrosity on the list is the Mercedes R-Class, or as it should be called, the 'Mercedes That No One Asked For'. Apparently there was a clamouring for a Mercedes minivan in the market. Maybe there was. What I do know for sure is that there couldn't have been much of a demand for what appears to be the redheaded bastard child of an unholy union between a Honda CR-V and a Chrysler Pacifica.

More to come I'm sure.

Digg This!

2008 Corvette Pricing Announced

Well, another Corvette article this week...

Rick "Corvette" Conti, a Corvette specialist at EVS Chevrolet in Random Lake, WI, posted the 2008 Corvette pricing on his website today. To me, as a Corvette enthusiast (and wannabe owner), the most pressing questions about 2008 Corvette pricing were:
  1. How much will the base price increase, with the new LS3 6.2 liter engine?
  2. How much will the 4LT/3LZ trim package cost (leather wrapped dash/trim)?
  3. How much will the performance Z06-style exhaust cost?
Well, the news was actually pretty good. GM was prudent to keep the price increase relatively modest, in light of falling Corvette sales for 2007 versus 2006.

The base price (including destination) increased from $45,075 to $45,995, which is an increase of $920, or 2.0%. Included in the base price is a 7.5% horsepower increase (400 to 430) and standard XM and OnStar.

The 4LT/3LZ trim package, which includes everything the 3LT/2LZ packages (last year's top trim levels) get, plus the leather wrapped dash and door panel trim, adds $3,500 to the price of a 3LT/2LZ. Motor Trend predicted that it would cost $4,000 to $5,000, and said that those prices were worth it, so I guess $3,500 is reasonable. I don't plan on considering it if I get a new one, though...the budget would already be stretched pretty thin.

The NPP performance Z06-style exhaust, which adds 6 horspower for a total of 436, costs $1,195, which is about what I was expecting it to cost. No matter how good it sounds at wide open throttle, I don't think $1,195 for 6 horsepower is worth it to me.

The nice thing about XM and OnStar being standard in the base 1LT Corvette for 2008 is that, since they were previously standard in the 3LT, the price of a 3LT with no other options goes up only $480, from $50,020 to $50,500. That's only an 0.9% increase.

Kudos to GM for continuing to build a [relatively] affordable sports car! Now, fix the attitude of your Chevy dealers who don't let people test drive them.

17 June 2007

2009 Nissan 370Z/400Z/WhateverZ?

The good people at GT Channel Auto News have this picture and are calling it the next gen Nissan Z car. I'll refrain from calling it a number at this point, because who knows what they're going to do with it- will it have a neutered (see: non turbo) version of whatever they're sticking under the hood of the GT-R, or will it have the exact same 3.7 VQ found in the forthcoming G37 Coupe? At this point, I have no idea.

Regardless, it's a nice looking evolution, and I know it sounds stupid to say this from just a picture, but it LOOKS smaller- which would fit the mule pictures from last week of what appeared to be a shortened 350Z on a track doing some testing.

We will see.