Thursday, 6 March 2008

Drivers hanging onto cars and trucks longer as median vehicle age remains high

R. L. Polk & Co. just released its 2007 vehicle population report analyzing the median age of trucks and passenger vehicles currently in use. Passenger cars retained the median 9.2 years that was achieved in 2006, while light trucks increased to 7.1 years from 6.8 last year. Polk attributes the truck increase to a maturing population of pickup trucks and SUVs that consumers bought in the 1990s.

Increased longevity and durability of modern vehicles is seen as the reason behind the older median ages, although slumping new car sales cannot be ignored either. It’s an interesting situation: successful car companies have build reputations on reliability, which consumers embrace by purchasing fewer cars (and happily when their financial situations are stressed). As vehicle emissions laws tighten and manufacturers work to catch up across all vehicle segments, drivers may continue to hold onto older vehicles as long as possible.

Source and image: Green Car Congress

Posted by industry at 8:54 AM in Headlines in the automotive world
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Thursday, 28 February 2008

Fewer 16-year-olds signing up for driving tests

Searching for trends in the automotive industry often leads in predictable directions – sales up or down, certain vehicle segments are leading and new technology is taking over. We hear it all the time, from various sources.

An interesting read via The New York Times highlights one surprising statistic that has plummeted: the number of 16-year-olds with driver’s licenses. In 1998, the Federal Highway Administration reported 43.8 percent of 16-year-olds were licensed; in 2006, that percentage has fallen to 29.8. What could cause such a dramatic decline?

For one, fewer schools are offering driver’s education – about 20 percent today. Back in the 1980s, 9 out of 10 high schools provided instruction. Expensive private schools and filled the gap, but many cannot afford the private rates.

Stricter licensing programs designed to keep 16-year-olds off the roads are a major hurdle, as are higher insurance rates for parents adding a child to an existing policy. But what might really be going on is that parents are simply more willing to play the role of driver. And with kids glued to the Internet and various entertainment devices, the incentive to venture into the driver’s seat as soon as possible has probably waned.

Source: The New York Times

Posted by industry at 3:45 PM in Headlines in the automotive world
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Tuesday, 4 December 2007

White ends silver’s run as most popular vehicle color

For seven consecutive years, the color silver has been the most frequently chosen among car buyers. Granted, “silver” now comprises a wide range of shades, with distinctive brown, green, blue and gold hues mixed in. DuPont reports for 2007, however, that white has come out on top, accounting for 19 percent of the total vehicle market in North America. Last year, white came in second to silver, according to a PPG survey.

DuPont interprets the shift as indicative of “global trends in home furnishings, fashion, consumer products and industrial design, where we’re seeing a return to white as a clarifying agent before change, a color of purity and minimalism.” This may be the case, or perhaps consumers are just searching for inexpensive, low-maintenance paint schemes.

Source: Automotive News [Subscription required]
Image: Ford/Lincoln/Mercury media

Posted by industry at 3:17 PM in Headlines in the automotive world
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Wednesday, 31 October 2007

“Venerable” Ford Crown Victoria headed out of production, at least on the retail side

Ward’s Auto is reporting that the Ford Crown Victoria, a full-size rear wheel drive sedan in production for decades, will be discontinued after the 2008 model year due to slumping customer demand. Since the year 2000 retails sales of the Crown Vic have declined at an astonishing rate, dropping almost 90 percent.

The good new for Crown Victoria fans, or at least those that enjoy being escorted by them, is that Ford will continue to build a fleet car version available to police departments and taxi operators. The mechanically similar Mercury Grand Marquis will remain available to retail customers, however.

Ford used to boast a firm grip on the police fleet industry, but more and more departments are switching to Chevrolet Impala and Dodge Charger models. Some taxi fleets are shifting away from V8-powered sedans, the best example being New York City. By 2012, all 2,500 Crown Victorias there will be replaced by hybrid electric cars and SUVs.

The market for full-size sedans is also changing thanks to the efforts of competing automakers. For example, the 2008 Honda Accord is now a large car, rendering dated vehicles such as the Crown Victoria obsolete.

Source: Ward’s Auto
Image: Ford media

Posted by industry at 3:00 PM in Headlines in the automotive world
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Tuesday, 30 October 2007

Chrysler and Ford want to simplify vehicle lineups, cutting models and option packages

We often hear about the need for automakers to develop and launch the next “winner.” Who will dethrone the Toyota Camry from the position of American’s best selling passenger car? Can foreign automakers really compete with domestic iron in the full size truck segment? How can anyone match the Chevy Corvette Z06’s performance-to-price ratio? All are important questions.

What we don’t often consider, perhaps due to our inherent forgiving natures, is which models a manufacturer should axe in the interest of profitability. But according to The Detroit News and Automotive News, both Chrysler and Ford are planning to simplify their lineups in the near future, cutting out the deadweight and developing leaner operations.

Chrysler’s board of directors is expected today to approve the discontinuation of the Chrysler Pacifica crossover, Dodge Magnum wagon and Chrysler PT Cruiser hatchback. All three have experienced sales volume drops around 30 percent this year. However, they haven’t always been forgettable models. When the PT Cruiser debuted it won the 2001 North American Car of the Year award, beating out the first generation Toyota Prius and Honda Insight hybrids. Car and Driver also declared it one of the “Ten Best” vehicles that year.

The Magnum was renowned in 2004 for its Hemi-power option and innovative liftgate, but has always been overshadowed by the related Chrysler 300 sedan. Chrysler applied a facelift to the Magnum for the 2008 model year, which regrettably increased its resemblance with the all-new Dodge Grand Caravan. Finally, the Pacifica has never been received as warmly as expected, despite Mercedes-Benz derived suspension and strong crash test performance. Chrysler updated the Pacifica for 2007, revising the exterior and adding a new V6 engine paired with a six-speed automatic transmission.

Ford is embracing a different strategy, cutting trim levels and options packages from existing models and including more equipment as standard. Back in May The View from Inside reported that both Ford and Chrysler were aiming to streamline their products offerings, as 16,000 different Ford Mustang V6 Deluxe unique configurations is a bit excessive. Ford’s CEO Alan Mulally told Automotive News that the simplification process is underway, and that “Ford will build on it every year with every model.” We’ll be interested to watch how Ford packages, prices and markets the new model lineups.

Sources: The Detroit News and Automotive News [Subscription required]
Image: Chrysler Media [2008 Chrysler PT Cruiser]

Posted by industry at 9:00 AM in Headlines in the automotive world
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Friday, 19 October 2007

Toyota addresses Consumer Reports reliability scores via company blog

When Consumer Reports released its annual reliability study earlier this week, the big news was that Toyota had fallen from the top spot and was no longer a universal recommendation by CR due to below average reliability rankings of the Toyota Camry V6 and Toyota Tundra 4WD V8. “Consumer Reports will no longer recommend any new or redesigned Toyota-built models without reliability data on a specific design. Previously, new and redesigned models were recommended because of the automaker’s excellent track record,” was the organization's official statement.

A lot of people declared Consumer Reports’ findings indicative of a “crumbling” Toyota empire, especially since domestic automakers like Ford improved with vehicles such as the F-150 pickup, Mercury Milan and Ford Fusion. Nevermind the fact that Toyota Motor Company products such as the Toyota Yaris, Toyota Prius, Lexus GS450h, Scion xB, Toyota Highlander, Toyota Land Cruiser, Toyota Tundra 2WD and Toyota Tacoma were declared “Best Picks” in their respective segments.

As expected, Toyota addressed the Consumer Reports in its company Open Road Blog. While defending the manufacturer’s performance, Group Vice President of Corporate Communications Irv Miller also acknowledged the shortcomings. “We aren’t happy with the results and will re-double our efforts to strengthen our quality and reliability--to Kaizen (continuous improvement). After all, these two issues are of the utmost importance to consumers and the hallmark of our brands,” he remarked. We’ll be watching to see if Toyota brings the goods in upcoming surveys.

Source: MSNBC and Open Road Blog

Posted by industry at 3:33 PM in Headlines in the automotive world
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Friday, 12 October 2007

Chrysler strike ends; UAW ratifies General Motors labor contract

The strike waged by the United Auto Workers against Chrysler on Wednesday seemed to work just as intended: later that afternoon the UAW announced that a tentative agreement had been reached, pulling workers off the picket lines after not even a full workday. Details of the agreement have not been disclosed, and the contract is still subject to UAW ratification.

Chrysler’s brief work stoppage overshadowed another announcement by the UAW on Wednesday: the approval of a new labor contract by General Motors works. GM shut down almost three weeks ago for a similar contract disagreement, but that strike was also short-lived and terminated after two days. Sixty-six percent of GM UAW members voted favorably for the 4-year contract.

Source: UAW

Posted by industry at 12:58 PM in Headlines in the automotive world
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Wednesday, 10 October 2007

Round 2: United Auto Workers strike again, this time against Chrysler

Just over two weeks ago approximately 73,000 members of the United Auto Workers walked off the job in protest of General Motors not reaching a labor agreement with the UAW. Two days later they were back on the assembly lines, as a tentative accord had been solidified.

Late this morning Chrysler union members went on strike, as night-long deliberations could not create consensus on Chrysler’s new labor contract. The walk-out reportedly affects 49,000 workers at 31 United States facilities. Within a day, Chrysler factories in Canada could freeze as their parts supplies are interrupted.

Neither Chrysler nor the UAW has said anything about the dispute publicly, but the main issue is familiar: Chrysler wants to free itself from health care costs by creating a union controlled retiree health care trust. Job security is also a top concern.

Due to excess inventory of various products, a short strike will actually allow Chrysler to sell down some slow-moving models. However, a few vehicles are more critical: the fast-selling Jeep Wrangler is one, as is the redesigned – and just launched - Dodge Grand Caravan and Chrysler Town & Country. Both need to be in showrooms to maintain their momentum.

Source: Automotive News [Subscription required] and the Detroit Free Press

Posted by industry at 1:52 PM in Headlines in the automotive world
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Monday, 1 October 2007

General Motors’ future product plan revealed via United Auto Workers contract

The detailed future product plans of major automakers are rarely released beyond company walls due to strategic and competitive purposes. But as part of the recent agreement reached between General Motors and the United Auto Workers, GM has disclosed various upcoming programs and plans for production to the UAW as a means of guaranteeing investment in U.S. jobs. Last Friday, the UAW publicized the largest U.S. automaker’s plans.

Page 11 of the full report, available via The Wall Street Journal, lists the “Product Commitments at GM Assembly Facilities” for 16 distinct locations. Among the highlights: the Chevrolet Volt plug-in hybrid electric vehicle will be built in Hamtramck, Michigan beginning in 2010, following another small car on the same platform in 2009. Earlier rumors had speculated that the Volt could be built in Mexico or by a third-party manufacturer. Lordstown, Ohio will be home to “Alpha” platform subcompact models beginning in 2011. Currently responsible for the Chevy Cobal and Pontiac G5, Lordstown will also build new “Gamma” four-door notchback models, starting in 2010.

Popular existing U.S. built models have also been slated to remain domestically produced. For example, Bowling Green, Kentucky is the home of the Chevy Corvette and Cadillac XRL, and will remain so when replacement models arrive in 2012. The HUMMER H3, Chevrolet Colorado and GMC Canyon will continue in Shreveport, Louisiana through 2011, and next-generation H3 models will remain there beyond 2011. General Motors trucks and SUVs built on the GMT900 platform (Chevy Tahoe, GMC Yukon, Cadillac Escalade) and currently assembled in Arlington, Texas will stay at that location when the next generation arrives in 2013.

Sources: Detroit Free Press and The Wall Street Journal
Image: GM Media Online [Chevrolet Volt concept]

Posted by industry at 10:40 AM in Headlines in the automotive world
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Wednesday, 26 September 2007

And just like that, the General Motors strike ends as the UAW and automaker reach labor agreement

The first national strike in over 30 years by the United Auto Workers ended after just two days, as the UAW reached a tentative agreement with General Motors early this morning regarding the new labor contract. A press release by the UAW indicates that negotiation finally ended successfully at 3:05 a.m. this morning, and that the strike was called off shortly, at 4:00 a.m. Workers will return to their posts starting with today’s second shift.

Full details of the agreement have not been disclosed, and the contract must still be ratified by UAW members. However, members of the UAW International Executive Board and GM National Negotiating Committee have unanimously recommended its ratification. Once approved, the deal would be subject to court approval and review by the Securities and Exchange Commission.

A major clause of the agreement was the establishment of a union-controlled trust to fund future health care obligations estimated by General Motors to be a $55 billion liability. Of course GM must contribute money to that fund in the form of cash, stock and debt, but relieving the American automaker directly of health-care costs is a huge step to getting back to profitability and competing with Japanese automakers such as Honda and Toyota. General Motors also promised significant investment in future U.S. manufacturing, potentially providing the type of job security that members of the union had sought.

Sources: General Motors and United Auto Workers press releases, The New York Times and CNN Money

Posted by industry at 10:21 AM in Headlines in the automotive world
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