Ford’s Feisty Fiesta ST

Posted on May 15, 2012 by Don Williams

When the two-door, Ford Fiesta ST hatchback concept car was unveiled at the 2011 Frankfurt Motor Show there was little doubt that it would make it into production.  Last March, Ford Motor Company made it official by unveiling a production-spec version of the 2013 model at the 2012 Geneva Motor Show.

The Fiesta ST features an EcoBoost turbocharged 1.6-liter inline four-cylinder engine that delivers 178 horsepower and 177 pound-fee t of torque. The front wheel drive Fiesta ST also features a six-speed manual transmission and can go from 0-62 mph in under seven seconds. The ST has a top speed of 136 mph.

To handle the increased power, the Fiesta ST is fitted with lower suspension tuning, a three-mode stability control, and Torque Vectoring Control system.

In addition to the mechanical upgrades, the ST also features a new body kit that includes a roof spoiler, side skirts, dual exhaust tips and lower front and rear fascias. Recaro seating compliments the body work. In keeping with the sportier styling, Ford has given the ST metal foot pedals. As is becoming the norm for Ford vehicles, the ST is equipped with the automaker’s popular Sync voice recognition technology. The ST will also feature Ford’s MyKey technology – an innovative safety feature which acts as a performance governor when less experienced motorists are behind the wheel.

In an interview with MotorTrend last March, Ford’s director of Global Performance Vehicles Jost Capito said motorists “will be blown away by the new Fiesta ST.” And an engineer with Ford’s Special Vehicle Team said the ST was “designed to reward excellent drivers, and flatter novices.” Ford road tested the ST on Germany’s famed Nurburgring test track.

The Fiesta ST is not currently available in the U.S., but the four-door concept model received an enthusiastic response when it was shown at the Los Angeles motor show last fall. Ford has said it is open to the idea of marketing the four-door Fiesta ST in the U.S. but has no immediate plans to do so.  The two-door model is scheduled to launch in Europe and Australia next year. The base sticker price is expected to be around $25,000.

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Ferrari to Launch Hybrid Successor to Enzo

Posted on May 15, 2012 by Don Williams

Ferrari plans to launch a successor to its limited-edition Enzo later this year. The new model will be a gas-electric hybrid supercar which it says will be more powerful and more fuel efficient.

The new hybrid is scheduled to go on sale in limited numbers in the U.S. next year. Ferrari has dubbed the new model the F70. The automaker has not yet announced pricing for the new sports hybrid, but it industry insiders expect the price to be at least as high as the Enzo’s $850,000 price tag.

The Enzo (named after Ferrari’s founder) was produced between 2002 and 2004. A mere 400 units were made.

The F70 will incorporate the same Hy-Kers hybrid technology used in Formula One racing and will feature two electric motors and a 12-cylinder gasoline engine. The combination will reportedly reduce fuel consumption by about 40 percent.

Passione Rossa Ferrari owner’s club chairman Fabio Barone is enthusiastic about the new F70. “Boosted by the electric motors, the new supercar may have more than 900 horsepower,” he said. “It’s going to be a sensational car, and it also lowers emissions.”

In the Hy-Kers system, an electric motor delivers an extra 100 horsepower “instantaneously” between the 12-cylinder gasoline engine and the electric motors through one of the vehicle’s two clutches.

Ferrari is not the only high performance sports car maker going green. Porsche already sells hybrid variants of its popular Cayenne SUV and Panamera four-door coupe, and plans to begin selling a hybrid version of its 918 Spyder next year.  The hybrid Spyder will feature a 500 horsepower gasoline engine teamed with 218 horsepower electric motors to deliver a top speed of 199 mph.

BMW also has a hybrid supercar in the works. Its i8 plug-in hybrid is scheduled to launch in 2014. And Volkswagen AG’s Bentley division is reportedly considering producing a plug-in hybrid SUV.

According to IHS Automotive, demand for hybrid supercars like the F70 is expected to increase from less than 100 in 2012, to upwards of 2,100 by 2015.

Ferrari is Fiat S.p.A.’s most profitable brand and reported a 13 percent increase in operating profits, to 60 million euros, during the first quarter.  The company limits annual production to approximately 7,000 vehicles and offers “tailor made” customization which allows it to increase prices between 20 percent and 60 percent per auto.

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Nissan Sets Its Sights High with 2013 Altima

Posted on May 15, 2012 by Don Williams

On Tuesday, May 15, 2012 Nissan North America began production of the redesigned 2013 Altima sedan at its Smyrna, Tennessee production facilities.

With the new Altima, Nissan has set its sights on dethroning the Toyota Camry as the best-selling family sedan.

Speaking with reporters at the Smyrna plant, Nissan Americas vice chairman Bill Krueger said, “We didn’t put all of the investment into this product and put in all the features with an expectation to be No. 2. Ultimately the consumer’s going to vote with their purchase whether or not we sell more than anyone else.”

In the wake of the 2011 Japan earthquake and tsunami, the Altima surpassed the Honda Accord as the second-best selling family sedan.

Nissan, however, is not alone in its quest for the top spot in the mid-sized sedan segment. Honda hopes to recapture the No. 2 position and the Ford Fusion, Chevrolet Malibu and Hyundai Sonata are also in the hunt.

According to Krueger, Nissan is not willing to raise its incentives on the Altima in order to be more competitive.

“I’m willing to build demand by putting value out in the market place,” said Krueger, “but I’m not willing to cut and trim profit margin to try and beat a number that one of our competitors is doing. We don’t have any intention of piling incentives on it to try to chase a number.”

Nissan plans to increase production capacity at the Smyrna factory and at its Canton, Mississippi facilities. At the Smyrna plant, Nissan plans to add 1,000 new workers and to add a third shift later this year. The company also hopes to increase production at the Canton plant by 20 percent.

Even with the proposed increases in production, both Toyota and Honda have ample capacity to out-produce Nissan if the market demand is there to support it.

Last March, Nissan sold 41,000 Altimas. If demand remains constant at that level, Nissan expects to sell 500,000 Altimas by year’s end.  Even though production of the 2013 model has begun at the Smyrna plant, Nissan plans to continue making 2012 models at the Canton plant in order to satisfy demand for the current-year model.

In addition to the Altima, the Smyrna plant will also begin making Leaf all-electric vehicles this coming December.

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BMW to Launch New Three-Door M135i in Europe

Posted on May 14, 2012 by Don Williams

BMW has announced that it plans to add a new model to its M Performance Automobile line. The M135i three-door will essentially be a redesigned 1 Series small hatchback fitted with a more powerful 320 horsepower inline-six engine and M-tuned suspension.  The current 1 Series comes with a choice of either a four-cylinder gasoline or diesel engine.

The new M135i’s engine will be paired with either a manual six-speed or automatic eight-speed transmission. The new M model will also feature a revamped body kit and interior and will ride on 18-inch wheels.

BMW said the new M135i will have 0-60 acceleration under 4.9 seconds and an electronically limited top speed of 155 mph.

The automaker does not plan to sell the new M135i in the U.S. American consumers will have to wait for the launch of the redesigned 1 Series three door, which will be available in three flavors; Sport, Urban and M Sport.

The new 1 Series will reportedly will be 85mm longer and 30mm wider than the current version to provide more rear legroom and cargo space. Buyers will also have the option of having either two or three rear seats. BMW will also make the new 1 Series available in coupe and convertible body styles.  A spokesman for the company said, “We have no plans to bring the three-door to the U.S. in any configuration.”

The new 1 Series will feature an array of driver-assistance goodies, including adaptive headlights, lane departure warning technology, cruise control, parking assist, rear collision warning, high-beam assistant and a rearview camera.

The M135i will be the first M model to be available as either rear-wheel drive or all-wheel drive. Other M models, including the M3 and M5, have only been available with rear-wheel drive transmissions.

BMW has also given the M treatment to the turbodiesel variants of the X5 sedans and X6 SUV. For some purists, the new M135i represents a watering down of the M designation when compared with the 1 Series M Coupe which featured a 335 horsepower engine and placed a premium on performance at the expense of refinement.

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Opel’s CEO Outlines Plan to Return to Profitability

Posted on May 14, 2012 by Don Williams

General Motors Company’s Opel/Vauxhall division is considering broadening its alliances beyond the one it currently has with France’s PSA/Peugeot-Citroen.  Among the alliances under consideration is one to build a Chevrolet model.

Speaking to workers at the company’s headquarters in Russelsheim, Germany today, Opel CEO Karl-Friedrich Stracke said the automaker is studying a number of options.

Stracke has outlined ten objectives aimed at returning the struggling Opel brand back to profitability.  They include expanding the automaker’s model lineup with new offerings like the Adam minicar and the Mokka small car, and broadening its reach into emerging markets including North Africa and South America, as well as more established markets like China, Russia and Australia.

Another of Stracke’s primary objectives is improving the company’s product quality and customer service. He also stressed the importance of lowering Opel’s material costs and streamlining its manufacturing processes to increase profit margins.

Stracke said, “Given the forecasted market volumes, it would not be viable to produce (the Astra) in more than two plants. If we run these two plants with three shifts, the production costs for the next Astra generation will be significantly below the costs of building the current Astra. Right now we’re operating three plants with just two shifts.”

Stracke did not indicate which of Opel’s factories will build the new Astra, but sources familiar with the matter have hinted that production will take place at GM’s facilities in Ellesmere Port in England and Gliwice in Poland. According to reports Opel’s ITEZ factory in Russelsheim, will be retooled to produce the Citroen C5 midsized model.  The plant currently produces Astras.

Stracke said that his strategy for returning Opel to profitability will be presented to Opel’s supervisory board next month.  “It is not a cost-cutting plan at all,” said Stracke. “It is much rather a comprehensive plan to quickly improve profitability, irrespective of if and how much the market is going to pick up steam. The plan will allow us to significantly increase our margins, market share and sales.”

During the first quarter, Opel/Vauxhall posted losses of $265 million as production volume fell by 16 percent to 227,590 units.

According to Stracke, the shakeup will not result in job losses at the ITEZ facilities. The plant currently employs approximately 6,500 workers. Instead, he said the company will honor its current labor contracts which are in effect through 2014. “The quicker we become profitable,” Stracke told workers, “the quicker we’ll share it with you.”

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Chinese Automakers Ramp Up Exports to Emerging Markets as Domestic Demand Dwindles

Posted on May 13, 2012 by Don Williams

Chinese automakers have begun looking to emerging markets, including Egypt, Indonesia and Ukraine as the market at home continues to cool down.

The lion’s share of Chinese autos being exported to these emerging markets are low-cost models like Great Wall Motors’ Haval SUV and the Panda minicar, made by Zhejiang Geely Holding Group Company.

Great Wall Motor vice president of overseas markets Xing Wenlin said, “The rapid growth phase of China’s auto market is coming to an end, and we see exports as one possible outlet for all the capacity we have built up. We need to go beyond the China market to survive.”

Although many of the low-end Chinese autos might not fare well in the U.S. and European markets, they’re of sufficient quality to satisfy the needs of many motorists in emerging markets. And with an average sticker price of around $6,300, they’re also affordable. Recently consumers in some Western markets, including Italy and Australia have begun to take notice of these no-frills models.

In 2010, Zhejiang Geely Holding Group Company acquired Volvo, and has begun to incorporate some of the its advanced technologies into its vehicles as a way of broadening their appeal to Western audiences.

Geely and Volvo Chairman Li Shufu said, “My vision is to sell outside China the same number of cars we sell within China.” This year, Geely expects to sell upwards of 450,000 vehicles worldwide. Of those vehicles, between 60,000 to 70,000 will be sold overseas.

A number of other Chinese automakers, including Chery Automobile Company and SAIC Motor Corporation have begun looking to overseas markets to maintain their dwindling sales numbers.

In the past, Western automakers were able to maintain their supremacy in the market, in part by refusing to share their design technology with others.  Geely’s technology and product-development chief Frank Zhao says that much of that technology and design know-how is available to any automaker willing to pay for it.

After posting 30 percent increases in both 2009 and 2010, demand for light vehicles in China grew by a meager 2.5 percent in 2011 while exports rose by 50 percent compared to 2010 according to the China Association of Automobile Manufacturers. The vast majority of exported vehicles were sold in Algeria, Brazil and Russia.

Great Wall Motors’ vice president Xing said breaking into the U.S. market is “an ultimate objective.” But AutoPacific analyst Dave Sullivan says that objective may remain out of reach for the foreseeable future. Sullivan said, “The sheer cost of setting up a dealer network, building a brand… It is a significant amount of money and to do it for a new brand, it is very, very difficult.”

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April Auto Sales Continue Upward Trend

Posted on April 30, 2012 by Don Williams

It is expected that automotive sales for the month of April will match the pace of March sales, meaning the first quarter high demand for new vehicles is not slowing. Jeffries & Company analyst Peter Nesvold’s research note states, “April sales have not been influenced by any extraordinary demand events and appear to be driven by good old-fashioned consumer demand for new cars.”

Thomson Reuters’ survey of 41 analysts revealed expectations for April sales to reach an annualized pace of 14.4 million vehicles, which beats the previous year’s April numbers. Reports of U.S. sales by automakers should be out by Tuesday.

Still, some analysts are voicing concerns related to the higher than average temperatures this spring as well as the potential effect of the upcoming presidential election. Morgan Stanley analyst Adam Jonas said, “There’s a feeling that the first quarter is as good as it gets. The rest of the year is going to be complicated with more European tail risks and political risk.”

As the job market improves, so does consumers’ appetite for new vehicles. Cheap financing proves an ongoing incentive to car buyers eager to replace aging vehicles that consume more gasoline. As a result, March sales rose approximately 13 percent, making the first quarter of this year the best since 2008. The average age of vehicles in the U.S. has climbed to almost 11 years, which is the highest on record. Fuel prices have also risen, creating the need for drivers to replace the aging vehicles with more fuel efficient, later models.

Recovery for the auto market has been spotty for the past 24 months, but March sales hint at a more consistent recovery of the economy and of improving auto sales now and in the future. Many buyers have been waiting until the job market and the economy improved before making a new purchase, and now the market is seeing the results of improving consumer confidence.

It is expected that April sales will be between 14 million to 14.2 million vehicles, according to Jefferies research. Edmunds.com predicts an even bigger 14.4 million and incentive levels falling to their lowest level since 2002.

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Hybrid and EV Sales Soared During First Quarter

Posted on April 30, 2012 by Don Williams

During the first quarter, U.S. sales of hybrids, plug-in hybrids and all-electric vehicles increased 44 percent, to 113,457 units, compared with the same quarter a year ago.  In March, sales of vehicles in with alternative powertrains were double what they were in January.

For makers of these types of vehicles, the Q1 sales figures go a long way toward validating their steadfast belief in the viability of the segment, despite low demand, cynicism and political bantering.

Hybrids have proven to be the most popular type of alternative powertrain autos with consumers. During the first quarter U.S. consumers purchased 106,207 hybrids.  Plug-in hybrids and all-electric models accounted for a much smaller piece of the pie with only 7,220 units being sold.

Sales of the Toyota Prius, including the new wagon and subcompact models, were up significantly during the first quarter. And sales of the Nissan Leaf all-electric vehicle reached 1,733 units – quadruple the number sold in the first quarter of 2011. March was also a high water sales month for the Chevrolet Volt plug-in hybrid.

One reason for the improved numbers is undoubtedly the surge in prices at the pump. Nationwide average prices for gasoline and diesel climbed 19 percent during the first quarter, but there is apparently more to it than simple economics. Dramatic increases in fuel prices in the summer of 2008 and spring of 2011 didn’t produce a similar boost in purchases of hybrids and EVs. Most analysts and dealers agree that pent up demand and more affordable pricing are behind the surge in sales.

The Japan earthquake and tsunami in March 2011 hampered production of a number of top-selling hybrid models, including the Prius.

Automotive consultant Alan Baum says, “This year that supply problem has largely been solved, and you’re seeing increased demand on top of it,” and he predicts, “We’re going to see hybrid sales only get stronger in coming months.”

CEO of Northcutt Chevrolet-Buick-Toyota, Leonard Northcutt, sold all seven of the Priuses on his lot in ten day period in March. In the past, it would have taken a month and a half to sell that many Priuses.  Northcutt attributes the brisk sales to higher prices at the pump. He said, “I think some people are saying ‘Uh-oh, I’ve seen this before.’ They already worry that gas prices are headed above $4 so they want to do something before it gets to that point.”

In March, sales of the Toyota Prius reached 27,800 units, up 49 percent from a year earlier. Of those, 4,937 were Prius Vs which launched last fall, and 4,875 were Prius C or plug-in models which launched last month. At $19,710, the Prius C is priced about $4,000 below the regular Prius liftback and gets an estimated 53 mpg/city.

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Mitsubishi Considering Reintroducing Mirage Small Car in U.S.

Posted on April 29, 2012 by Don Williams

Mitsubishi Motor Company plans to launch its new Mirage small car in the North American market sometime in early 2013, but is currently undecided whether or not the launch will include the U.S.  The announcement of its North American aspirations was included in the company’s annual earnings presentation which was released on Friday.

Mitsubishi spokesman Roger Yasukawa said the chances of selling the Mirage in the U.S. are about 50/50. The model was last sold in the U.S. in 2002.

Mitsubishi’s U.S. dealers have been starved for fresh products since the automaker killed the Eclipse, Endeavor and Spyder in 2011, but tight marketing budgets may prevent, or at least postpone, a reintroduction of the Mirage.

The company’s marketing budget has already been stretched thin but this summer’s launch of the Outlander mid-sized crossover.

In an interview with reporters at the company’s U.S. headquarters in Cypress, California last week, Yasukawa said, “Our concern from a timing standpoint is that with the Outlander coming out next year, not too far from a possible launch of the [Mirage] we have to really think about resources,”

There are also concerns about whether or not the new Mirage’s suitable for the U.S. market at this time. The Mirage, which is currently being assembled in Thailand, is extremely small and was designed with the developing Southeast Asia market in mind.

The Mirage is a mere 146.1 inches long and 65.6 inches wide – more than 12 inches shorter than both the Ford Fiesta and Kia Rio subcompacts. The Mirage comes with either a 1.0- or 1.2-liter three-cylinder gas engine and a continuously variable transmission.

If Mitsubishi does decide to sell the Mirage in the U.S., it won’t be the only automaker betting on the minicar segment. General Motors Company’s Chevrolet Spark (due to launch this summer) is about the same size as the Mirage.

Yasukawa said, “There are competitors out there that are still new and most of them have just launched or are coming out soon. It’s still a young segment that’s growing in the U.S., and we have to account for that in our decision.”

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Chrysler Group Q1 Profits Quadruple to $473 Million

Posted on April 27, 2012 by Don Williams

Chrysler Group LLC has set a full-year profit target of $1.5 billion based on Q1 earnings of $473 million, up from $116 million a year ago.  In a statement, Chrysler said first quarter

Chrysler-Fiat CEO Sergio Marchionne said, “It’s fair to say that Chrysler is firing on all cylinders. It’s been a great quarter, and I think that the indications for the remainder of the year are absolutely positive.”

Last year Chrysler posted its first profitable year since the company entered bankruptcy restructuring in 2009.

On Wednesday, Chrysler announced that it will not extend its operating agreement with Ally Financial Inc. (formerly GMAC) when the current contract expires on April 30, 2013.  The automaker is actively looking for another bank to manage its vehicle financing operations. Chrysler reportedly generates approximately $25 billion in vehicle loans annually.

Marchionne has been adamant about not brining Chrysler’s financing operations in-house.  He says the advantage of having an outside financing operation is that “you can’t get stupid, because no one will finance it. If you’re trying to get straight and stop drinking,” he says, “stop hanging around the bar.”

As of the end of the first quarter, Chrysler had $12.6 billion in debt.  Q1 interest payments on the debt totaled $227 million, down 20 percent from a year earlier.

During the first quarter, Chrysler shipped 607,000 vehicles, including models manufactured for its parent company Fiat S.p.A.  Global sales for the quarter reached 523,000 units, up 33 percent from a year earlier.

Retail sales in the U.S. increased 40 percent, outpacing the industry-wide increase of 13 percent for the quarter.  International sales, including models sold by Fiat, soared 80 percent to 67,000 units.

Chrysler predicts it will ship between 2.3 and 2.4 million light vehicles by year’s end and post net revenues of approximately $65 billion.

Production of the 2013 Dodge Dart was scheduled to begin last Monday. The Dart compact sedan will be the first model to come from the Chrysler-Fiat tie-up and is based on the Alfa Romeo Giulietta platform. It will reportedly have a base sticker price of $16,790.

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