Check Your Mirrors
Odds and Ends about Cars and the Car Business
By Brendan Moore
ROGER PENSKE is interested in buying Saturn, according to the latest rumor. Penske’s automotive group has 149 dealerships representing 40 brands. Penske’s group is the one that distributes Daimler’s Smart microcar in the United States. Penske has a (well-deserved) reputation for turning around companies and is a master at retailing cars, so if this rumor turns out to have some substance, Saturn dealers will be very happy.
TATA has announced that they have received 203,000 paid orders so far for their Nano, far more volume than they can build in their first stage of production. And so far, the orders are not shaking out as predicted in terms of trim level; the lowest trim level accounts for 20% of the orders, and the highest trim level accounts for 50% of the advance orders. Since Tata is nowhere close to full production capacity, and since production doesn’t start at all until June, with cars scheduled to be sold in July, the first 10,000 cars will be sold via a lottery.
TESLA showed it’s Model S four-door to the press last month in Los Angeles, although no one has been allowed to actually drive it yet. Reporters get to ride along with a Tesla representative. We haven’t seen it in the metal yet here at Techshake, but the photos look good, showing a sleek design that is interesting without being too radical. The New York Times when Elon Musk, the CEO of Tesla, was in NYC for a guest spot on the Late Night with David Letterman show, and the car simultaneously made its NYC debut. The claims for battery life in the Tesla S are aggressive, but the company has stuck to them in print and public statements, so they’re confident, even if others are somewhat skeptical.
FORD has been playing catch-up in China for years, behind such China automotive leaders like GM and VW, and not doing it very well, either. Ford’s sales in China last year were down 6.5% in a market that grew 6.9%. It’s puzzling and frustrating for Ford as they do so well in their other global markets. But, help may be on the way in the form of the new Fiesta. Ford launched the Fiesta in China in March, and preliminary reports suggest that the car is doing well there. It is Ford’s first entry-level car offered in China, and people are responding. Just as a reminder, people in the US see the Fiesta in March, 2010 (behind the rest of the world). Ford has got to be hoping that the price of gasoline is higher by then, as the small but very good Fiesta may get a lukewarm welcome in the States if prices stay where they are now.
GM next for bankruptcy? Well, before Chrysler’s bankruptcy, I would have put those odds at around 60%. After Chrysler’s bankruptcy, I have to believe that the odds are now around 90%. The same circumstances that propelled Chrysler into bankruptcy are there with GM, except more so. The differences for GM are that they don’t have a Fiat waiting for them to keel over, and they have a much better product line-up than Chrysler. But, they do have a great many creditors that probably won’t agree on debt settlement, they have the UAW and the CAW, and lastly, they also have way too many dealers.
FORD isn’t getting much press lately because the news these days is all about Chrysler and GM failing, but they’re doing OK. The outsold Toyota in the US last month, picked up some market share, and lost less than they have been (along with everyone else). It appears Ford is picking up some Chrysler customers; it will be interesting to see if they also pick up GM customers as time goes by.
TRENDS often start in California and then fan out across the rest of the country. And the recent trend in CA is that gasoline consumption in the state is dropping every year since 2002, regardless of the price of gasoline or economic indicators. People are citing a variety of reasons for driving less; they’re walking more, biking more, buying more fuel-efficient cars, using mass transit more and simply driving less and combining trips. It appears to be a combination of ecological concerns and economic concerns responsible for this behavior across the general population of CA.
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