GM’s Whitacre Getting Impatient -- Heads Roll

Tuesday, March 9, 2010



Not satisfied that GM’s sales are growing fast enough, CEO Ed Whitacre is shaking up the executive ranks once again and will bring some previously axed dealerships back into the fold.

The latest victims of his impatience are Cadillac’s marketing and sales departments. Bryan Nesbitt, who headed the brand’s sales and marketing and who starred in the Cadillac presentation at the Detroit car show just eight weeks ago, has been demoted back to the design department. Other execs at Cadillac were let go altogether.

Recognizing that you can’t sell cars from empty lots, GM also announced that it will let more than 600 dealers who had been flagged for termination back into the tent. The move will also reduce by half the number of arbitrations that the company will face over the closings.

Was GM stung by Ford’s sales lead in February? Does management think they should be picking up more disaffected Toyota owners in the wake of that car maker’s recall problems? GM officials, of course, won’t say one way or the other, but obviously there is no such thing as status quo at the Ren Center right now.

--M.D.

Get ‘em While They’re Hot: Viper Production About to End

Sunday, March 7, 2010

At the end of this month, Chrysler will begin building the last 500 Dodge Vipers, the brand’s halo sports car that has been in production for nearly twenty years. A number of special package versions as well as 50 ACR models will be included in this last batch, according to the Detroit News.

The Viper was first introduced as a concept car during the 1989 car show season and was championed by none other than Bob Lutz, who was working at Chrysler at the time. Chrysler surprised the automotive world when it announced that the Viper would actually be produced for sale in 1992 and would include a V-10 engine that it developed with Lamborghini. From the beginning, the Viper’s hallmark was its brute force.

It is not certain if or when the Viper might come back. Dodge chief Ralph Gilles told reporters at the Chicago Auto Show that his team is working on a new version of the Viper but it is too soon to know whether it will see production. Given that Chrysler’s parent company, Fiat, also owns Ferrari and Maserati, a 21st Century version of the Viper could be an interesting exercise.

--M.D.

GM's Lutz To Retire -- Again

Wednesday, March 3, 2010


After much speculation and an aborted retirement attempt last year, the legendary Bob Lutz will retire from GM for good on May 1st of this year, according to the Detroit News.

One of the most colorful and forceful figures in Detroit in at least a generation, Lutz has worked, at one time or another, for all three American car makers and was the driving force behind such notable vehicles as the Dodge Viper, the Pontiac Soltice and the Chevrolet Volt.

No official statement has been forthcoming from either GM or Lutz, which is driving speculation regarding the retirement. He had been critical of limits on executive pay packages in the wake of GM’s bankruptcy and subsequent government oversight of the company’s operations. He also had found himself at odds with other GM executives over projects such as the Cadillac Converj which Lutz believed should be brought to market but which GM officially canceled just this week.

--M.D.

February Sales: Good News for Ford

February sales figures are all in now and Ford came out the winner with a 43% increase in sales over February 2009. What’s more, Ford managed to edge out GM for the first time since . . . well, it’s been a long, long time. The totals: 142,006 for Ford vs. 141,535 for the new GM.

Toyota, not surprisingly, saw a decline of 9%, though, given the recall turmoil, many experts were expecting an even bigger drop. Subaru and Nissan posted nice gains at 38% and 29% respectively while Honda showed a more modest increase of 13%.

Chrysler sales were essentially flat with an increase of barely 400 units over last year. While up is always better than down, Chrysler will need to come on much stronger than this if it is to meet targets set by Fiat chief Marchionne for 2010. With few fresh products planned until late in the year, it seems unlikely that its numbers will look much better in coming months.

The biggest losers? Smart dropped by nearly 69% and Suzuki was off 61%. One has to wonder if the market for the Smart ForTwo was more limited than parent company Daimler thought and has already saturated. Suzuki has been trying hard to raise its profile in the U.S. market with products such as the new and well-received Kizashi but, apparently, to no avail. With its strength in other markets, most notably India, one wonders how much longer Suzuki will keep trying to establish a foothold here.

--M.D.

Volvo’s Lofty Goal: No One Dies In Their Cars

Sunday, February 28, 2010

Since the introduction of auto safety standards, highway deaths in this country have been on a steady decline. At one time automobile deaths hovered around 50,000 per year. That number now is closer to 35,000 despite more cars on the road and more miles being driven.

However good that news is, Volvo wants it all. The auto maker has set as a goal zero highway deaths in their cars by 2020, according to Wards Automotive. Other manufacturers are said to be examining this as well, though none has been bold enough to announce it publicly.

As the saying goes, “We have the technology”, but is there a risk for Volvo in going down this road? Could it be interpreted as a promise that could expose the company to increased risk of litigation?

The vast majority of car crashes are caused by operator error and this element can be difficult if not impossible for a manufacturer to control. New safety measures such as Volvo’s City Safety system can do much to reduce crashes, but they can also lull drivers into a false sense of security and make them even less engaged in the operation of their cars.

A better idea: More comprehensive driver training and higher standards for licensing. (IMHO.)

--M.D.

Auto Credit Market Shows Signs of Loosening Again

Tuesday, February 23, 2010

The down turn in auto sales over the past two years was partially due to the weak economy and diminished consumer confidence but was also driven by a lack of available credit for car loans in the market place.

Automotive News reports that the credit side of the equation is improving and lenders not only have access to more lendable funds but have also relaxed lending standards -- somewhat. For at least a year getting a loan was difficult even for buyers with fairly good credit. Now, with more money available, buyers with less than super prime credit ratings are finding it easier to get approval.

It helps that those buyers are also coming into the market better prepared. The article notes that they are paying down credit cards and bringing larger down payments to the table when applying. The expanding availability of credit is also helping dealers build their inventories.

--M.D.

Honda Gains Most From Toyota's Woes

Sunday, February 21, 2010

The Detroit News is reporting that Honda seems to be profiting most from Toyota’s recall problems. Comparing sales data from the first twenty days of February to the same time frame in January, the newspaper found that Toyota’s market share has taken a nose dive, dropping from 17.5% to 12.2% in just one month. At the same time Honda’s share rose from 11.2% to 13% while Ford, posting the second best gain, saw a bump from 10.6% to 11.7%. The numbers reflect retail sales only.

The data show that the Chevrolet brand also slid slightly from 10.3% to 10.0% despite generous incentives and heavy marketing. Honda went fairly light on the incentives and avoided special offers to Toyota owners to entice them to trade. Also interesting to note that the two Korean brands, Hyundai and Kia, now account for 7% market share.

If the trend continues for the rest of the month, Honda will emerge as America’s most popular brand and, with a little push, Ford could regain its number two position.

--M.D.