Auto Observer

Baby Boomers Shift Car Buying Choices

Fri, 19 Mar 2010 18:23:28 -0800

The gas-price spike of 2008 followed by the economic disaster of 2009 has prompted baby boomers to re-evaluate their vehicle choices.

"It was once thought that when baby boomers could put college tuition payments and other parenting expenses behind them, they would reward themselves with expensive luxury cars," commented Edmunds.com Senior Analyst Michelle Krebs, who presented on the topic to the Seventh Annual What's Next Boomer Business Summit in Chicago today. "But that was before economic catastrophe struck. Now that their kids can't find jobs and their nest eggs have shrunk, they are rethinking everything, including their vehicle choices."

Their vehicle choices fall into a trio of sweeping categories: efficiency, lifestyle and indulgence.

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Chrysler Starts Production of New-Age V6

Fri, 19 Mar 2010 13:31:49 -0800

A crucial symbol of Chrysler Group LLC's prospect for survival as a car company with a future came today with hitting the start button on the Trenton, MI, assembly line for Chrysler's all-new Pentastar V6 engine.

The new-generation Pentastar eventually will supplant no less than seven dated V6 engines, Chrysler says, but its first application is a critical one: the Pentastar is the standard engine for the 2011 Jeep Grand Cherokee, due for showrooms in the second quarter.

"The Pentastar engine is a cornerstone of Chrysler's efforts to re-invent its business model with strong, brand-focused, world-class quality products," Scott Garberding, head of manufacturing, summarized in a statement.

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Nissan Scoops Up Hyundai Marketing VP

Fri, 19 Mar 2010 08:11:07 -0800

High-flying Hyundai Motor America took one on the chin this week as Nissan North America Inc. pirated Hyundai Marketing Vice President Joel Ewanick -- father of the company's cogent Hyundai Assurance buy-back program -- to become the new vice president of marketing for the Nissan division.

Word is that Hyundai is not amused to lose Ewanick, whose work netted him a handful of awards last year, including Chief Marketer of the Year from Forbes, Grand Marketer of the Year from Brandweek and Advertising Age's Marketer of the Year.

Ewanick, who had been with Hyundai since 2007, held positions outside the auto industry and also worked for Porsche Cars North America Inc.

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What We're Reading: Lessons for Toyota, Deconstructing Apple, China Auto Sales in Perspective

Fri, 19 Mar 2010 08:00:00 -0800

The staff at Edmunds is a diverse group with hundreds of different perspectives on the auto industry and the world at large. Here's a look at what we're reading and thinking about this week...

The Checklist Manifesto: How to Get Things Right by Atul Gawande

Everyone has known about checklists but this book takes it to a new level. The author backs up his points with evidence from working in the medical industry.

Edmunds staffer says: This book is an entertaining account of a simple tool for getting things done. If checklists save lives, they can also help you get things done in your life. -- Phil Reed, Sr. Consumer Advice Editor, Edmunds.com

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IHS Global Insight Buys CSM Worldwide

Fri, 19 Mar 2010 07:09:07 -0800

Industry consultant IHS Global Insight announced this week it is acquiring auto-supplier data and forecasting firm CSM Worldwide for $27 million.

Global Insight delivers financial and economic analysis for a broad range of industries and entities, but its automotive-sector consultancy is one of its better-known businesses. The acquisition of CSM Worldwide will give Global Insight direct access to CSM's supplier-focused data and market information.

"CSM's strengths in the supplier market, production and powertrain analysis, and North American and Asian customer markets are highly complementary to services provided by IHS," the company said in a statement.

"Becoming a part of IHS creates tremendous opportunity and allows us to leverage the experience and expertise of both organizations to better serve our customers around the world," said CSM Worldwide founder, president and CEO Craig Cather, who will direct the combined automotive forecasting and analysis operations of CSM and IHS. "Our combined automotive forecasting business will offer clients unparalleled intelligence related to the global automotive market."

Jerry York, Industry Exec, Straight-Talker and Critic, Dies at 71

Thu, 18 Mar 2010 15:31:02 -0800

Former auto executive Jerome York is dead at the age of 71 after suffering a brain aneurysm on Tuesday.

In the 1970s, York held high executive posts at Ford Motor Co. and Chrysler Corp. and was a central player in Chrysler's early 1980s turnaround, yet always was a vocal and strident critic of Detroit automakers for what he characterized as a myopic management culture.

York's seemingly perpetual prediction that Detroit would fall if it did not change essentially came to fruition with last summer's bankruptcies at General Motors Corp. and Chrysler.

York had a colorful career for someone who often was characterized as relentlessly methodical and calculating - a perception that may have cost him the CEO chair at Chrysler when legendarily emotional Lee Iacocca retired in 1992.

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Incentives Drive Sales Rate to 13.2 Million, Edmunds.com Reports

Thu, 18 Mar 2010 15:01:05 -0800

A mid-month look at March auto sales indicates a Seasonally Adjusted Annual Rate that is flirting with 13.2 million vehicles, thanks largely to intense incentive competition, according to Edmunds.com.

"The industry has been recharged by incentives offers from Toyota and other automakers who responded in kind," said Edmunds.com Senior Analyst Jessica Caldwell. "There is a lot of money in the marketplace right now, and people are responding."

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Edmunds.com Predicts Average Transaction Price Declines

Thu, 18 Mar 2010 13:36:11 -0800

It's definitely not what a battered auto industry wants to hear after months of scrabbling for the start of a rebound, but analysts at Edmunds.com project, through the new True Market Value Predicted Price Trends metric -- that average transaction prices, even for plenty of usually strong-selling models, will fall in April.

Common sense might suggest with improving weather and the coming of spring that auto sales would tend to start increasing in April, but historically, such is not the case. Analysts at Edmunds.com note that in just the past eight years, sales have declined in April from March in seven of those years. Hand-in-hand with a decline in sales volume comes a typical reduction in average transaction prices during April.

April also is a poor springboard for auto sales because there are no long holiday weekends and the month holds, for many, the ominous prospect of filing tax returns.

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J.D. Power: Vehicle Dependability Improves Industry-Wide; Caddy DTS, Porsche Tops

Thu, 18 Mar 2010 11:47:28 -0800

Overall vehicle dependability has improved 7 percent and for the first time in more than a decade, a domestic vehicle is the industry's dependability leader, says the latest Vehicle Dependability Study from J.D. Power and Associates.

Power's latest version of its widely-watched dependability study was based on 52,000 responses from owners about their experience over the last year with their 3-year-old, 2007-model vehicles.

General Motors Co.'s Cadillac DTS was the study's leader, beating all individual models with 76 problems per 100 vehicles; the industry average was 155 problems per 100 vehicles, a 7-percent improvement over the average 165 PP100 reported by owners last year.

Porsche was the overall nameplate leader at an average of 110 problems per 100 vehicles and Ford Motor Co.'s Lincoln brand climbed six rungs since last year to finish in second place with a 114 PP100 rating. Overall, 25 of 36 brands improved their rating from last year and 14 brands performed better than the industry average.

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Volkswagen Getting Cozy with New Big Stakeholder

Wed, 17 Mar 2010 13:12:45 -0800

The Volkswagen Group and its recently acquired Porsche Automobil Holding SE, owner of Porsche Cars, said this week a delegation that included the German State of Lower Saxony traveled to the Emirate of Qatar to "intensify cooperation" with the Emirate in the areas of research, development and education.

Last year, the complex financial and investment arrangement that led to VW's takeover of Porsche (after an improbable attempt at the opposite was aborted) led to Qatar becoming VW's third-largest shareholder - after the Piech family and Lower Saxony - with about 17 percent of VW. Through the deal, Qatar also holds about 10 percent of Porsche Automobil Holding SE.

Volkswagen said in a statement, "Topics discussed included possible research cooperation into new materials, energy production and storage, fuel economy optimization in engines, and the medium-term openings for establishing a vehicle materials test laboratory."

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Grand Cherokee, Car Washes Don't Mix

Wed, 17 Mar 2010 06:57:09 -0800

If you're seeing a lot of particularly dirty Jeep Grand Cherokees these days, there might be a good reason.

Doug Newman, owner of conveyer-belt style carwash chain in Milford, Connecticut, told Bloomberg news last week the Chrysler Group LLC sport-utility is an unintended acceleration beast, accounting for all four of the unintended-acceleration incidents that have occurred at his operations since 2000.

Little more than a month ago, a worker piloting a 2006 Grand Cherokee at the Octopus carwash in Albuquerque, New Mexico, killed another worker after the driver said the Jeep accelerated uncontrollably, smashing the worker against a wall.

And a member at Edmunds.com's CarSpace social-media forum identified as Octo30yrs said the Grand Cherokee's unintended-acceleration reputation with the carwash community is such that some operations now are either pushing through Grand Cherokees or rejecting them altogether.

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European Car Sales Rise on Extended Scrappage Schemes

Tue, 16 Mar 2010 11:57:51 -0800

New car sales in Europe rose 3 percent in February to 1 million vehicles due largely to the return of Cash for Clunker-like programs in some countries.

Sales were up double digits in France, Italy, the United Kingdom and Spain where the programs were in effect. In contrast, sales in Germany fell 30 percent where the scrappage program had expired in late 2009.

A downturn in vehicle sales this year is predicted for Western Europe.

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Ex-GM's Stempel: From Gasoline to Batteries to Water

Tue, 16 Mar 2010 09:26:57 -0800

Robert C. Stempel, General Motors' CEO in the early 1990s, is joining the board of directors of Genesis Fluid Solutions Holdings, a water purification company in Colorado Springs, Colorado.

Stempel was chosen for the company's board for not his automotive experience but his chairmanship of the Council of Great Lakes Industries. That experience provided him with valuable insight into the complex problems that plague America's largest bodies of water, said Genesis Chairman Michael Hodges in a statement.

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Saab: Getting Back to Business

Tue, 16 Mar 2010 08:33:30 -0800

Swedish automaker Saab is showing signs of life.

With its sale by General Motors to Dutch sports-carmaker Spyker complete, Saab now is setting up its North American shop away from GM headquarters, building its management team in Europe and preparing to build and sell cars again.

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Commentary: No Easy Answer for the Toyota Problem

Tue, 16 Mar 2010 04:02:14 -0800

Edmunds.com CEO Jeremy Anwyl argues in a Washington Post OpEd that the U.S. Transportation Department and its National Highway Traffic Safety Administration should lead in coordinating an effort to get to the bottom of the industry problem of sudden acceleration. Here's his argument as published by the paper Monday:

Lately it seems that each day brings another report of a driver's terrifying experience with an out-of-control Toyota. There have been at least four congressional hearings in as many weeks.

Even the most confident consumer has to wonder what is causing all this and, more fundamentally, whether Toyotas are safe to drive.

The second question is easier to answer. Despite the flurry of reports, incidents with speeding vehicles are rare. And vehicles today, including Toyotas, are safer than ever.

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