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Opel and Saab to Build Future European Chevrolets
Jan24

Opel and Saab to Build Future European Chevrolets

By Andy Bannister

01.24.2008

General Motors has big plans to sell a million Chevrolets annually across the whole of Europe; including Russia, and within two years, mostly by increasing local production using underutilised GM factories.

Opel’s Russelsheim plant in Germany and the Saab factory in Trollhattan, Sweden, are in the frame to build various Chevrolet models, reports say. This would take pressure off GM Daewoo’s Korean factories which are struggling to keep up with worldwide demand for its Chevrolet-badged products.

Chevrolet Epica


The German plant could build the Chevy Epica – a traditional four-door saloon – and Sweden is pencilled in for the replacement (and hopefully much improved) Lacetti. The Lacetti (known as the Suzuki Reno/Forenza in the US) is due to share a platform with the next generation Opel Astra.

Quite how this plan sits with Chevrolet’s position as GM’s value brand is unclear, as high-cost European factories don’t normally equate with low prices.

In 2007, Chevrolet’s almost entirely Korean-supplied range sold 167,700 units in western Europe (up 10% on 2006), and did even better in the remainder of Europe (including Russia) with a total of 284,000 units (up 51%).

Chevrolet Tacuma

This success is based more on metal-for-money rather than outstanding products. As well as the Lacetti and Epica, the ex-Daewoo models wearing the Chevy badge in Europe include the old-before-its-time Tacuma small MPV and the Matiz microcar.

Chevrolet Captiva

The best of this Korean bunch is probably the good value, new Chevrolet Captiva SUV, also sold in slightly different form as the Opel Antara.

American Chevrolets hardly get a look in so far in Europe although small-scale sales of the HHR have just started in some markets, including Germany and Italy. Corvette is a marque in its own right here, sold half-heartedly through Cadillac’s struggling dealers, and so does not share a showroom with the Korean-built line-up.

European-made Chevolets are, however, already starting to come on stream. The old FSO factory in Poland, which used to make deeply undesirable models based on the technology of 1960s Fiats, is now producing the Aveo saloon, which is sold alongside its Korean-built Kalos hatchback brother.

The further east you go the more Chevy seems to be a success in Europe. In Russia it is now the top foreign make (Ford is second) selling 190,000 vehicles in 2007. By contrast, GM’s Opel marque shifted 66,000 units.


In Russia the Chevrolet line-up is even more of a mixed bag than further west, thanks to the GM Avtovaz joint venture with Lada, by far Russia’s most successful indigenous manufacturer.

One product unique to Russia is the Chevrolet Niva, a small SUV which is an evolution of the original Lada Niva 4X4 dating back to 1977. The Niva has a 1.7-litre engine and excellent off-road capabilities.


Other Chevrolets sold on the Russian market include the Viva, which is basically a rebadged version of the previous generation Opel Astra saloon. Budget buyers can also choose the Chevrolet Lanos, a version of the old Daewoo of the same name.

A number of other models including the Aveo, Lacetti and Tacuma are manufactured in the Russian enclave of Kaliningrad.

For once, GM seems to have pulled off a real success story, taking a marque which was virtually unknown in Europe and making into a real contender. With future platform sharing set to improve the quality of the line-up, it looks like Chevy is here to stay on this side of the pond.

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Volkswagen’s US Production Plans Take Shape
Jan24

Volkswagen’s US Production Plans Take Shape

By Chris Haak

01.24.2008

As discussed earlier, Volkswagen has some and wants to surpass both GM and Toyota as the . However, the dollar’s weakness relative to the Euro (or the Euro’s strength relative to the dollar, as the case may be) makes it extremely cost prohibitive to sell European-built vehicles in the US. The fact that these are not luxury cars with the typical luxury car profit margins makes Volkswagen’s situation even more difficult.

Now, VW doesn’t build all of its cars in Germany – in fact, it builds Volkswagen New Beetle, New Beetle cabrio and Jetta in Mexico for US sales – models that make up 56% of its sales in the US. But some mainstream cars like the Rabbit, GTI/R32, and Passat – the Touareg SUV – are built exclusively in Germany for US sales, which makes their value proposition against Asian and domestic competition questionable. Sure, German engineering is nice to have, but is it worth paying 10%+ more for a Volkswagen with questionable quality than a comparable Chevy, Ford, Honda, or Toyota?

Consequently, VW is faced with a handful of choices. They could de-content their German-built vehicles, but that would go counter to their “affordable premium vehicles” marketing message. Another option would be to expand their production in Mexico, but VW of America CEO Stefan Jacoby said that the factory in Puebla, Mexico “has come to its limit” and will not be further expanded.

That leaves the option of building a new assembly plant in the US (assuming VW would not consider building a plant in a low-cost country for US sales). Since there is already a significant German supplier and auto manufacturing base in the US South (and VW has confirmed that it will build a new plant – not where specifically, but that it would be somewhere in the Eastern time zone), and rumors are that VW has scouted sites in North Carolina, South Carolina, and Georgia, it seems likely that their new plant will be in one of those states. The new assembly plant will produce up to 250,000 units per year.

Mr. Jacoby announced today that Volkswagen is also planning to build engine and transmission plants in North America to support the new plant. He also added that VW will announce the site selection for its plant within six months. Mr. Jacoby said in Detroit last week that the new plant would likely produce the core products for the US lineup – which means the Passat (currently built in Europe), the Tiguan small crossover (also currently built in Europe), and a new future crossover. Basically, they want to produce as much of their US sales volume as they can in the US or Mexico to avoid the strong Euro/weak dollar problem.

The result of increased US production will lower the price premium charged for products like the Passat from the current 10% over rivals’ prices to 5% instead.

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Nissan Cube Coming to US
Jan23

Nissan Cube Coming to US

By Chris Haak

01.23.2008

The Nissan Cube, a small, boxy car similar to the original Scion xB in shape and concept, will be coming to the US market according to Nissan Motor Co. Ltd. global design director Shiro Nakamura. The Cube has been sold in Japan since 1998.

The company, however, has not made an official announcement on the Cube’s impending arrival. Nissan had been studying whether to bring it to the US for at least two years, following the success of the Scion xB, but didn’t move very quickly because it didn’t have the urgent need to lower its buyers’ median age that Toyota did (Nissan’s age demographics skew much younger than many of its competitors do).

Personally, I prefer the looks of the Cube to the original xB, as its shapes (such as the rounded corners of the windows) are more interesting. Between the Cube and the current xB, it’s no contest against that vehicle which so frustratingly deviated from its original bantamweight version. It will be interesting to see how well the vehicle does, as it shares nothing visible but the chrome Nissan logo on the grille with any other Nissans sold in the US. Hopefully Nissan will sell the Cube in its original form to US buyers and not sell a fattened-up, bloated version of it. If they do, perhaps fans of the original Scion xB will buy these instead of the new xB.

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GM and Toyota Virtually Even in 2007 Sales

By Brendan Moore

01.23.2008

In a sales race that is still way too close to call, GM (General Motors) and Toyota seem to be tied for all intents and purposes.

GM released sales results this morning showing that they sold 9,369,524 vehicles worldwide last year. Toyota released a statement earlier this month stating that they had sold 9.37 million vehicles in 2007 calendar year, but it is not known whether Toyota rounded up or rounded down to arrive at the 9.37 million units sold figure.

Toyota’s U.S. market growth and GM’s U.S. market decline has moved the two companies considerably closer in sales results in the last couple of years. Only a dozen years ago, Toyota’s global sales were a little less than half of GM’s. But Toyota has been growing at an annual rate of 7.5% for the past 10 years, while GM’s annual growth has been at 1.5%.

Toytota stated they they will release more precise sales figures by the end of the month.

UPDATE 11:30 a.m.: According to Automotive News, a Toyota source confirmed to Reuters today that Toyota’s global sales were 9.366 million units, so GM is just barely the #1 global automaker, by about 3,500 units, or about 0.03%.

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2007 Was a Brutal Year for Big Truck Sales
Jan23

2007 Was a Brutal Year for Big Truck Sales

By Chris Haak

01.23.2008

New government emission standards in effect for diesel engines beginning in 2007 made 2006 a decent year for medium- and heavy-duty (class 4-8) truck sales as trucking companies rushed to beat the price increases, which added $7,000 to $12,000 to the price of a new truck purchased in 2007. As a result, 2006 large truck sales were up 8.4% over 2005’s levels. Basically, trucking companies pushed their purchasing plans forward to beat the price increases.

The predictable result for 2007 was an absolutely brutal year for every heavy truck manufacturer. Overall, the segment was down a whopping 31.4%. Ford was the only brand that posted “only” a single digit sales loss (down 6.4%). The shakeup also allowed Ford to leap from #3 to #1 in medium- and heavy-duty truck sales. In 2006, the top three were:

Freightliner: 125,041
International: 115,187
Ford: 100,434

For 2007, Ford jumped to the top of the list:

Ford: 94,003
Freightliner: 75,791
International: 69,943

Worst hit were the largest trucks, the Class 8 tractors, which fell 46.8%. Also, this is likely the reason that Ford jumped in front, as Ford does not sell Class 8 trucks and more than half of its sales were Class 4 trucks. In contrast, Freightliner’s Class 8 sales made up 49% of its total sales, which is why their overall large truck sales results took more of a beating.

It will be interesting to see how results for 2008 compare with 2007’s depressed results. I could foresee a slight gain, with larger sales increases coming in later years as trucking companies are forced to replace their fleets and pay for the additional emission controls.

Other than a possible recession slowing the economy, another possible ongoing hindrance to new large truck sales could be the rebuilding programs that some truck manufacturers offer. Manufacturers will rebuild a tired, old truck – keeping some key components such as the frame – so that it’s still technically an old truck and not subject to the more strict emission regulations. In other words, we may be seeing more “re-tread trucks” to go along with their “re-tread” tires in coming years.

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Acura TSX to Get New Diesel
Jan23

Acura TSX to Get New Diesel

By Brendan Moore

01.23.2008

Honda has announced that their new clean diesel engine will make its Noth American debut in the redesigned 2009 Acura TSX sedan.

According to (paid subscription required), Honda will put its new diesel in the TSX, although Honda officials would not confirm this.

More from the Automotive News article, in italics:

“All along, we’ve said there would be a diesel in Acura,” said Dick Colliver, executive vice president of American Honda Motor Co. “The whole direction is to separate Acura and Honda more. In five to six years, Acura will be a tier 1 luxury brand. The face of Acura will be totally different.”

Honda’s new 2.2-liter, four-cylinder i-DETC clean diesel will be available on the redesigned Honda Accord in Europe this summer. The European Accord and the TSX are basically the same vehicle.
Honda will introduce a V-6 diesel around 2010. That engine likely will go in the mid-sized Acura TL sedan and the MDX crossover as well as some Honda-brand vehicles.
Acura sales fell 10.5 percent in 2007 to 180,104 units. Colliver expects sales to rise this year to just under 200,000 units.
“We get the TSX in the spring and the new TL in the fall,” he said. “We knew going into 2007 that we were facing tough times because the product line was aging, and there was a lot of new competition. To compete with BMW, we must build cars in those segments. We need more crossovers and an image car.”
So, it’s pretty obvious that Acura wants to play in the same sandbox as BMW, Audi, Lexus, Infiniti and Mercedes-Benz, etc., as opposed to just being thought of as a really nice Honda.
Does this mean that the Acura line is going to go rear-wheel-drive? Or, if not the whole lineup, at least the top model? Will the cars jump way up in price as they get more content in them in order to better compete in the rarified air of the true luxury segment? And will Acura go sport first and luxury second, as in BMW, or will they go luxury first and sport second, a la Mercedes-Benz? And, of course, there is always the third way; the Lexus way of luxury and almost no sport, but given Acura’s performance-oriented past, that doesn’t seem likely.
All good questions – maybe the answers will make themselves known shortly.
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New Taurus Coming Next Year
Jan22

New Taurus Coming Next Year

But will it be the 2009 Taurus or the 2010 Taurus?

By Igor Holas

01.22.2008

The Ford crowd has been buzzing for while with the imminent coming of a brand-new Taurus, and after some initial offhand comments last year, and a frank admission yesterday, from Mulally himself, we now know it is indeed coming. In the summer of 2007 Mulally confessed he had seen the new Taurus and that it made his “eyes water.” Yesterday, Mulally added oil to the fire by stating the new Taurus is coming next year.

Design
The car will be much more attractive than the outgoing model. The car will be a child of designer Freeman Thomas. This is the guy responsible for the Interceptor concept (and previously, the Chrysler 300, and Audi TT). Given the choice of designer, and the design themes shown recently by Thomas, it is not unreasonable to assume the Interceptor was a preview of the Taurus styling.

Going RWD?
The big unknown is which platform will underpin the new car. Originally, it was a given that the new Taurus will ride on “D32”, the new architecture that debuted with the Lincoln MKS. The D32 originated from the D3 on which the Taurus rides now, but was substantially reworked: it was made smoother, stronger, and more responsive. The D32 platform was developed as a Lincoln platform and the original plan was for Ford was to use a slightly cheaper version for its models.

Recently, however, insiders have been mentioning a rear-drive Taurus more and more prominently. This came as a bit of a surprise to many Ford observers. First, the Taurus heritage is quite tame and family friendly; not the best canvas in the past for a performance-oriented large sedan. Insiders have pointed out that the D3 and D32 platforms can be modified for RWD, but given the FWD nature of MKS, this still seemed too good to be true, and simply unlikely. Ford is also working on the new global RWD platform, but that architecture seems to be still at least two years away.

At this point, no one at Ford is speaking aloud about the underpinnings of the new Taurus, and it is quite possible that the RWD chatter concerns the next generation of this vehicle – the one probably debuting around 2014.

EcoBoost and Hybrid
One thing that is a given is the engine. The 3.5l V6 from the current Taurus will carry over without any changes, and so will the six-speed automatic transmission. The newly introduced 3.5l EcoBoost engine will also be offered, and finally, if Ford plays its cards right, a new 2.0l I4 EcoBoost developing 275 horses and foot-pounds and a 3.5l V6-based full-hybrid will be there to round up the engine offerings.

Revealed in Three Weeks?
We left the best for last. Inside information is pointing to Ford revealing the new Taurus in Chicago Auto Show in less than three weeks. Ford has not told us anything yet, and we do not know yet whether what we see will be a concept or a production vehicle, but the chance is pretty good that we will not have to wait too long to see the new car.

Correction: The designer of the Interceptor is Freeman Thomas, not Friedman and not Thomas Freeman (we seem to be having a brain freeze with poor Mr. Thomas’ name) – we apologize mightily for the errors and the correction has been made. We will now proof everything with Mr. Thomas’s name in it a dozen times or more in the future.

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Insure.com’s Most and Least Expensive 2008 Vehicles to Insure

By Chris Haak

01.22.2008

, a website that offers consumer information as well as acting as a broker with insurance companies, has released a list of the most- and least-expensive mainstream 2008 car models to insure.

Their methodology was to take the 20 top selling vehicles as of May 2007 and get insurance quotes for three different cities (one on each coast and one in the Midwest) from four different insurance companies in each city. The insurance cost among these 12 data points was then averaged to determine the average insurance cost per model. Insure.com then came up with two lists – the ten most expensive and the ten least expensive (both among the top 20 sellers). All of the quotes requested were for a single male driver, age 40, who owns his own home, has a bachelor’s degree and no accidents or driving convictions, and works as a hospital administrator five miles from his home. Policy limits quoted were $100,000 per person and $300,000 per accident for bodily injury and $50,000 for property damage. The hypothetical policies have a $500 deductible and “no fault” insurance was chosen were possible.

The ten most expensive 2008 vehicles to insure are:

1. Dodge Ram Pickup
2. Chevrolet Silverado C/K Pickup
3. Toyota Prius
4. Honda Accord
5. Nissan Altima
6. Toyota Corolla
7. Ford Focus
8. Chevrolet Cobalt
9. Honda CR-V
10. Dodge Caravan

The ten least expensive 2008 vehicles to insure are:

1. Chrysler Town & Country
2. Ford Escape
3. GMC Sierra Pickup
4. Chevrolet Impala
5. Ford Econoline Club Wagon
6. Ford Fusion
7. Ford F-Series Pickup
8. Honda Civic
9. Toyota Camry
10. Toyota RAV4

According to the site, “Vehicles can land on the most expensive list for numerous reasons. They may be targets of theft, which can increase comprehensive premiums for all owners of that model; they may have high repair costs, which can increase collision premiums; or passengers may suffer more injuries in accidents, which can affect personal injury protection premiums.”

I wonder if typical driver demographics play a role in insurance rates, because otherwise I’d assume that a Chevrolet Silverado (second most expensive to insure) would have very similar theft rates, passenger protection capabilities, and repair costs to a GMC Sierra (third least expensive to insure). Looking into details of the report, the Silverado has “substantially worse than average” losses for comprehensive claims, while the Sierra has “better than average” collision claims and “substantially better than average” personal injury protection, medical payment, and bodily injury liability.

The Dodge Caravan and Chrysler Town & Country both made the least expensive list, and are obviously very similar vehicles, but the Town & Country was the #1 least expensive while the Caravan was only the #10 least expensive (or, #11 most expensive).

The report also states that many consumers do not consider insurance costs at all when making purchase decisions, and only call their agent after the purchase is complete to transfer the policy and learn what the new rate will be. This has been true for me in large part; moving from an SUV to a minivan last month, I assumed that our rates would decrease, but it turned out that they actually went up by a few dollars.

My biggest critique about this list is that it’s really omitting data on a LOT of vehicles. By restricting it to the top 20 selling vehicles, they are omitting data from more than half of the new vehicle market. Many people don’t want to drive the same car that everyone else drives and prefer something less mainstream.

The lesson to take from this is that it pays to call your insurance agent before signing the dotted line on a car deal, as for some individuals the insurance premium can add a significant expense to the monthly tab for owning or leasing a new car. It’s something I plan to do next time I buy another car, and is probably just as important as checking reliability statistics and current deals on the car that you want to buy.

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