By Andy Bannister
Similar schemes have been a big success in Germany, France and Italy, seemingly turning round a dramatic slump in sales. Steep rises have been particularly evident in purchases of new, fuel-efficient small cars.
Faced with an ever-deepening recession and some dire economic indicators, the British Government has been under immense pressure to do something to help both the domestic industry and the important car retail sector. New car production in the UK plummeted over 51% last month compared to a year ago.
The British scheme, due to last until next March, could theoretically see 300,000 extra drivers behind the wheel of a brand new car, significantly boosting trade thanks to a £2000 ($2920) discount off the showroom price.
Dig below the surface a little, though, and the outlook for the industry and the majority of new car buyers doesn’t look nearly so rosy.
By David Wright
I bought a new 2008 Honda Fit last July. It was an attractive purchase for a couple of reasons, namely fuel economy, price, and shiny orange paint. The 5-speed manual transmission helped me average 36 mpg, driving 40 miles a day to work and back, my regular errands to the grocery store and recycling center.
But the longer I drove the Fit, the more I felt uncomfortable in it. The stickshift became a nuisance on a daily commute that features 15 traffic lights each way. While the child safety seats necessitated by my six-year-old and his nine-month old sister fit into the back seat, I found it impossible to sit comfortably in the front seat with the children actually back there. I just didn’t have the heart to ask my son to get his legs out of the way so Daddy could move his seat back far enough to be relaxed. The console was sparse; functional, but sparse. Not even an armrest or closed storage space.
Performance-wise, the 109-horsepower, 1.5 liter engine got the job done, but I can’t imagine pulling onto the highway without that pesky stick. It was fun to drive, a bit like a go-kart on the twisty roads in my area, as the handling was tight and controlled, and once I shifted into 5th gear, the ride was smooth, if not a little noisy. For a car of this size at this price (about $16,000 new), I won’t complain too loudly.
By Brendan Moore
GM’s press conference this morning brought the news we have been expecting; that is, the announcement of Pontiac’s closure. Pontiac is gone next year, sooner than many thought last week. Additionally, in remarks made to the press, Fritz Henderson, CEO of GM, stated that no Pontiac models would be rebadged as other General Motors surviving brands.
If you want a new G8 or a Solstice, you had better get one soon. At least both models should be discounted considerably in the near future.
Somewhat oddly, GM said that they may sell the Pontiac Vibe through 2010, depending on how the contract with Toyota shakes out. The Vibe is the brother of the Toyota Matrix, manufactured through a joint production agreement between Toyota and GM.
Additionally, GM mentioned, just as an aside, that no more Hummers would be built after this model year.
GM also announced that the company intends to slash the amount of dealers by half as part of their restructuring acceleration.
In a surprise move, General Motors more or less pulled the rug out from underneath Saturn, stating that the last Saturn would be built this year as opposed to their previous assurance that Saturn would continue until 2011. Now the company plans to have only four brands in 2010; Cadillac, Buick, Chevrolet and GMC, the truck division.
So, as with Pontiac, if you want one of the new Saturns not shared with other GM divisions (Sky, Astra), you should act soon.
All in all, a very tough and painful day for General Motors.
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By J. Smith
Since this story was posted, GM has sent us a link to a press conference scheduled for 9 AM EDT Monday, April 27. The link to live video of the press conference is available starting at 9.
Pontiac, which began life as an offshoot of General Motors’ long-defunct Oakland line of cars, looks to be headed for a visit with fellow Detroiter Jack Kevorkian. According to . Although still billed as the “excitement” division of GM, recent decades have seen a slew of not-so-exciting products, many that were thinly veiled knock-offs of other GM offerings, from the Chevette-based T1000 to the Pontiac G3 Aveo clone, and others which were bizarrely undesirable like the Aztek.
Although an of-shoot of Oakland, Pontiac soon surpassed its parent, which was axed in the midst of the Great Depression. Pontiac now seems poised to become a victim of the Great Recession, although years of confusion and neglect have taken it to this point. Alfred Sloan’s five division structure for GM had Pontiac slated above Chevrolet and below Oldsmobile (RIP, 2004). For the decades following its birth, it was the Buick of its day, appealing to elderly and conservative buyers.
Under Bunkie Knudsen and John Z. DeLorean, Pontiac introduced high-performance “wide track” models beginning in the mid-to-late 1950s, shedding its geriatric image with models like the tri-power 1958 Bonneville, which sported three two-barrel carbs. It captured the hearts of baby boomers with what many consider to be he first true muscle car, the 1964 GTO, with “three deuces and a four speed, and a 389,” as phrased by Ronnie and the Daytonas. On the strength of attractive Coke-bottle styling and a performance image, it catapulted past Plymouth (RIP, 2001) to take third position in the US market, behind only Chevrolet and Ford.
By Brendan Moore
GM is almost certainly going to announce next week that Pontiac is shutting down. The news may come as early as Monday.
GM stated initially that Pontiac would survive as a “boutique” brand, but has apparently changed its mind under pressure from the Treasury Department.
Pontiac was launched in 1926, put out bread-and-butter vehicles until the Sixties, when it kicked off the muscle-car trend with the GTO, was thereafter marketed as the “Excitement Division”, started to sag along with the rest of GM in the Seventies, and, has recently had a minor revival of sorts. The most cars Pontiac ever sold in a single year was 896,980 in 1978, which also happens to be when they were churning out mostly awful iron.
The first car I ever drove was a Pontiac Starchief convertible with a 347 with triple carbs. My father, when I was a very small boy, would slide over a bit on the seat, have me stand on the seat, and help steer the car while working the pedals. He especially liked to do this in the deserts of California on the long straight roads typical of the area while other people were coming towards us – he would duck down as far as he could behind the dash (and still be able to see the road), thereby fooling the oncoming cars into thinking a little kid was driving the car at 60 mph. Very big fun.
After awhile, I could actually steer it myself, so I did. I was driving, after a fashion.
When my mother found out, she was unhappy. And both my parents were unhappy when I got into another Pontiac sedan in the driveway a few years later, started it up and drove it down the driveway across the neighbor’s lawn and over their mailbox. I think I was seven.
Of course, my mother had a big ‘ol seven-seater Safari wagon when I was in my teens. I would borrow it when I needed a lot of friend-carrying capacity. One of my friends from a well-off family had a brand-new Pontiac Firebird given to him for a birthday, and so I ended up driving that quite a bit.
I bought a Pontiac Bonneville and a Pontiac Tempest with the OHC six in my twenties, when the cars were as old as I was. Then a long drought of Pontiacs in the late Eighties and Nineties (they weren’t making anything I wanted to buy) which has continued to this day.
By Brendan Moore
In an interesting twist, it appears the Treasury Department has made plans for Chrysler to file bankruptcy as early as next week, before the government-mandated deadline for restructuring. Restructuring, from the government’s point of view, is Chrysler consummating a merger with Fiat. Anything else, while not inconsequential, is not anywhere good enough to satisfy the Treasury’s conditions for viability.
Bankruptcy will undoubtedly make Cerberus, which gained control of Chrysler in 2007, go away. Bankruptcy will also make the minor shareholders disappear as their equity will be wiped out.
Bankruptcy also gives Chrysler tremendous latitude in terms of what assets (brands, physical plants, etc.) it wants to keep, and it voids labor union agreements, contractual agreements with suppliers, dealer franchise agreements, etc.
It should be noted, however, that Treasury now has an agreement with the UAW, which would wipe out an extremely contentious issue in any Chrysler bankruptcy or restructuring. Regardless of what happens, Chrysler will need workers to build vehicles if they stay in business as a viable entity.
Bankruptcy also relieves Chrysler of its debt obligations, but there is going to be a problem with the large lenders (mostly banks and some hedge funds) that hold most of Chrysler’s debt. The problem (for Chrysler, that is) is that most of that debt is asset-based loans. Chrysler promised physical assets as collateral for those loans, tangible assets like production plants, brands, etc. So, the creditors will press their claims in any bankruptcy process, and try to claim those assets so they can then sell them on the open market and redeem that sale price against the total debt. As an example, if Chrysler owes a bank $1 billion dollars USD, and the bank has two production plants as collateral, the banks would try to claim those assets as the bankruptcy moves through court so that they could then subsequently sell the two production plants. If they were to able to sell those two plants for $500 million, then they would get 50 cents on the dollar regarding the defaulted loan.
By Chris Haak
Today, I’m happy to announce that we are teaming up with the folks at BBC Video who are brought Top Gear Season 10 to DVD earlier this week for Techshake’s Dream Garage Contest. First prize (OK, the only prize) is a copy of Top Gear Season 10 on DVD, delivered to your door. We at Techshake are big fans of the pre-eminent motoring show. I’ve already exposed my three year old son to the famous Toyota Hi Lux abuse episode, and he was quite amused by the whole thing. Season 10 has some wacky moments, like a race between a Bugatti Veyron (definitely Dream Garage material, by the way!) and a Eurofighter Typhoon, driving full speed through the Kalahari Desert in 20 year old junkers, or crossing the English Channel in amphibious cars. In case you don’t win this contest, you can purchase the video for $29.98 .
Here’s how the contest will work. Send an e-mail towith a list of the 10 vehicles that we’d find in your dream garage. Include your name, shipping address (just in case!) and a phone number in the message. They can be common or exotic, expensive or inexpensive – just as long as they have wheels and are legal for highway use (sorry, no bicycles, boats, or F1 race cars, although motorcycles, three wheelers, and amphibious vehicles would be OK). Entries must be received by 11:59 EST on Friday, May 8, 2009. Techshake’s writers and editors will then choose the best entrants from among those submitted, and we’ll put up another post the week after the entry deadline, and all readers can vote for their favorite Dream Garage list in the comments for that post. Although you don’t need to justify or explain your list as our writers have done in the past, you may choose to do so in order to improve the chances that other readers will like your choices/logic and vote for your selections. A few rules: No more than three entries per person. Techshake reserves the right to disqualify any votes that are suspicious or duplicate in nature. One vote per person in the comments! If you have any questions about the contest, feel free to comment below, and I’ll respond in public.
By Kevin Miller
Mitsubishi has been trotting their iMiEV (Mitsubishi Innovative Electric Vehicle) to various locations across the US in the name of green partnerships, and they celebrated Earth Day under cloudy skies in Portland, Oregon, showing off the electric transportaion pod to the state’s governor, Ted Kulongoski. The visit was made to highlight a new ZEV (Zero Emission Vehicle) partnership between Mitsubishi, the State of Oregon, and electric utility Portland General Electric (PGE).
While I spent Earth Day roaring around Portland in Techshake’s 5.7-liter Hemi V8-powered 2009 Dodge Ram 1500 Lariat, Gov. Kulongoski took his first test drive of the all-electric vehicle from PGE’s headquarters at Portland’s World Trade Center.
PGE continues to partner with Oregon businesses and governments to roll out its network of charging stations to support these next-generation electric vehicles and plug-in electric vehicles. During my drive around the Portland metro area, I drive past two municipal EV charging stations, so the partnership is bearing visible fruit.
Mitsubishi plans to deliver its i MiEV to Oregon for fleet testing in late this year. Powered by an advanced lithium-ion battery, the Mitsubishi i MiEV will be one of the first of the new generation of lithium-ion-powered electric vehicles to be developed by a major automobile manufacturer that will be available to the public.