2008 Promises to be Recent Low in New Vehicle Sales

At a recent meeting I was giving a presentation on the State of the Automotive Industry (SOI) in the United States. The SOI includes information on consumer expectations, state of the economy, the growth in nameplates and AutoPacific's forecast for the industry through 2013. Clearly, the industry is in the dumps in 2008 with sales being forecast to be 15.8-million units. Sales could even be lower with the first two months coming in at a rate of about 15.2-million units.

Record Sales Years on the Horizon

So, in light of this Annis Horribilis (quoting Queen Elizabeth in 1997 "Horrible Year"), the AutoPacific forecast for light vehicle sales going forward peaks at about 18-million units in 2013. That's after three years when overall sales are higher than the previous 2000 record of 17.3-million units.

Economic Doldrums - Short Term

Several things are keeping sales depressed right now. The sub-prime mess, credit crisis, devaluation of the dollar, slow down in housing, high fuel prices, etc. All negatively impact sales and consumer confidence in wanting to acquire a new vehicle. These issues impact brands and vehicle classes and vehicle lines differently. For instance, full size pickups are hurt because commercial users defer purchases until the housing sector picks again and retail users who have primarily been buying big pickups for personal use can decide not to buy a new one or add one to their family fleets. The dynamics are really churning.

However, the factors stressing out the economy are generally cyclical and right themselves over time.

GenY to the Rescue

But the ace in the hole, as the economy bounces back, is the emergence of Generation Y (Those car buyers who today are 18 to 30 years of age). GenY is the largest population cohort - equaling or surpassing the Boomer generation (43 - 61). They are just now getting into their vehicle acquisition and family formation years, so they will stimulate sales. At the same time, Boomers are not going quietly into the night. They will continue buying new vehicles well after retirement. So, demographic shifts will provide much of the push for higher sales going forward.

Don Esmond at Toyota has said a 20,000,000 unit year by the middle of the next decade would not be surprising. Don't know about 20,000,000, but 18-million does seem possible.

Posted by George Peterson at 10:44 AM | Permalink | Comments (0)

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This has nothing to do with cars or trucks, but about the halftime shows shown at extravaganzas like the Super Bowl and BCS Championship Game. Our stories about auto company and Bridgestone ads stimulated the idea.

Super Bowl Halftime Lame - Bring On the Marching Bands

I don't know how much Tom Petty cost to entertain the nation for twenty minutes, but it was too much. And it's not that I don't like Tom Petty. I have just gotten sick of these extravaganza halftime shows that Bowl Games think are necessary to put on while people are getting their snacks and going to the john. At least Petty did not have a wardrobe malfunction and the manufactured crowd was on their best behavior - young and energetic.

God Wants Marching Bands: But, God intended for football halftime shows to feature marching bands. Not Tom Petty. Not Janet Jackaon. From time immemorial, marching bands have been featured at every high school and college game. Some bands are military bands. Some are pageant bands. Some do a little of both.

Military Bands - Precision and Discipline: The military bands have the toughest job. They will have an eight minute drill in which they continuously change formation from one geometric pattern to another. Countermarches. Minstrel turns. Freeze steps. Parallelograms. Squares. All precisely designed to amaze the audience. Texas A&M is a rare example of a military band. I say rare, because a military band takes a lot of practice to make look good. Lines have to be straight. Timing has to be perfect and the music has to be great. Takes a huge amount of discipline.

Pageant Bands - Easier than Military: The pageant bands may begin a show with a military fanfare, but then evolve into designs and pictures that usually have the band members wandering from one spot to another. Much more chaotic than military bands. But the fans seem to like them and it's easier to train a pageant band than a military band.

National Band Contest: So, here's the idea. Scrap these halftime concerts and have a national band contest. The national band contest would end at the Super Bowl where the best high school marching band in the country would go against the best university marching band in the country. I guess you could have military and pageant band sections. The university bands would be judged by conference - an ACC Champ, a Big Ten Champ, a Pac Ten Champ, etc. Then at the national championship game - the BCS game, the best college band would be selected. High schools would be selected on a state-by-state basis with state winners moving to regional, sectional and, finally, national.

Still have to find a way to judge military bands vs. pageant bands, but there must be a way. Just find a way to get us away from the terrible halftime shows the BCS and Super Bowl have subjected us to for the past decades.

Posted by George Peterson at 02:30 PM | Permalink | Comments (1)

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DISCLAIMER: VehicleVoice is totally non-denominational and takes an agnostic, i.e. non-biased, approach to analytical issues. This summary details the position published by the Catholic Church on June 19, 2007.

Pastoral Care of Road Users

The Holy See of the Catholic Church in the Vatican has issued a "DOCUMENT OF THE PONTIFICAL COUNCIL FOR THE PASTORAL CARE OF MIGRANTS AND ITINERANT PEOPLE: GUIDELINES FOR THE PASTORAL CARE OF THE ROAD". Part of this document are the Ten Commandments for Road Users included in "The Pastoral Care of Road Users". Other sections include: "Pastoral Ministry for the Liberation of Street Women", "Pastoral Care of Street Children", and "Pastoral Care of the Homeless (Tramps)".

After hearing about the new Ten Commandments for Road Users, we decided to find out exactly what was included and how the Vatican rationalized developing this document. Visiting the Vatican website provides a comprehensive summary of the document and the rationale the Vatican used when developing it. Perhaps the most interesting part of the rationale is that the Church intends to evangelize the issue of the Ten Commandments for Road Users and Road Safety. It'll be interesting to see how much traction this document achieves internationally and what impact it, indeed, has with driving, drivers, and pedestrians.

Drivers’ “Ten Commandments”

The Vatican document states "We have drawn up a special “decalogue” for road users, in analogy with the Lord’s Ten Commandments. These are stated here below, as indications, considering that they may also be formulated differently." The fact that the Vatican saw fit to issue a document like this = the whole thing is very comprehensive - is an indication that the Church believes the roads may be getting a bit out of control. Even though this is an "international" document, it likely has a slight "Italian" spin. Now, how in control is traffic in Italy?

I. You shall not kill.

II. The road shall be for you a means of communion between people and not of mortal harm.

III. Courtesy, uprightness and prudence will help you deal with unforeseen events.

IV. Be charitable and help your neighbour in need, especially victims of accidents.

V. Cars shall not be for you an expression of power and domination, and an occasion of sin.

VI. Charitably convince the young and not so young not to drive when they are not in a fitting condition to do so.

VII. Support the families of accident victims.

VIII. Bring guilty motorists and their victims together, at the appropriate time, so that they can undergo the liberating experience of forgiveness.

IX. On the road, protect the more vulnerable party.

X. Feel responsible towards others.

The rationale given for the document by the Vatican is shown below the fold.

Continue reading "Ten Commandments for Road Users - Catholic Church Takes a Stand" »

Posted by George Peterson at 12:06 AM | Permalink | Comments (1)

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Chrysler is Back in Private, American Hands; Current Management Stays On
On Monday, May 14, DaimlerChrysler and Cerberus announced the pending sale of the Chrysler Group, including Chrysler Financial. Among the firestorm of conferences, board meetings, and announcements following, we attended a Chrysler press conference where the new Chrysler Corporation boss Tom LaSorda gave a short briefing and took some direct questions.

Perhaps the most significant element of the change in ownership is not who makes up the management team, or even in which country home base now is. It isn't whether or not Wolfgang Bernhard returns to Chrysler, or even who is the boss. It is that the new company is privately held.

The new Chrysler Corporation is not required to report quarterly (or annual) sales, profits, returns, management salaries, production, or most of the other indicators that Wall Street watches so closely. The negative of quarter-by-quarter reporting and evaluation is a tendency to think short term, which can be deadly for a business whose core products have a four- to six-year natural lifecycle. (Including LaSorda's and other managers' salaries, which he seemed nearly gleeful that he'll no longer report.) When pressed, LaSorda cited short-term focus as the driver for the ill-fated sales bank strategy, and as something done to please the German bosses and done against long-term strategy and goals. As a private company, LaSorda says, they "will be able to run it as we want, without worrying about quarterly numbers and what people think of them." Chrysler Corporation will not report quarterly earnings (nor management salaries/benefits), and LaSorda would not commit to continued reporting of monthly unit sales.

LaSorda expects a Cerberus to demand a similar level of governance than they are used to, and they will have to ultimately make money for them. They will also need, as LaSorda recognized, to clearly define goals and metrics for employees to be able to target and meet. But these elements need not be part of the public forum or debate, and ownership support for long-term over short-term objectives can significantly impact overall strategy.

LaSorda was clear and emphatic that the Chrysler Corporation's management team will not change from that today at the Chrysler Group. No further job cuts are planned as a result of the new ownership, but the 13,000 cuts spelled out in February are still on the chopping block. Speculation will continue as to whether or not Wolfgang Bernhard is brought aboard again, but plans to make that change were vehemently denied.

Continue reading "The Chrysler Corporation Returns" »

Posted by Stephanie Brinley at 03:22 PM | Permalink | Comments (0)

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In early December, Ford hosted an event that allowed VehicleVoice and AutoPacific staffers to peek into the future for Ford, Mercury and Lincoln vehicles. One of the more intriguing presentations had to do with the future design direction of their Lincoln brand.

Peter Horbury, a Brit credited with launching Volvo's distinctive styling and now Ford's North American styling chief, discussed the results of a design analysis of Lincoln's heritage design cues. After evaluating coveted Lincolns from the past, the Lincoln design language was distilled into seven distinctive cues. The Lincoln MKR Concept Car seen at the 2007 North American Auto Show is the first vehicle to use all seven of the cues. In the future, every new Lincoln will incorporate at least three of these seven cues.

Based on the styling of the MKR, if Ford does indeed launch Lincolns using these design cues, they may have real winners on their hands. Now, can Alan Mulally find the money to bring these vehicles to market as quickly as they are needed?

Cue 7: Grille - Lincoln cars will have a distinctive split grille opening. There are several variations on this theme, each with a different grille texture. But Lincoln designers have evolved a face that at-a-glance will be identifiable as a Lincoln.

Cue 6: Cantrail - OK, we had never heard this term before either (it appears to be a terms used in railway car design), but this is the intersection point between the A-Pillar and the Roof. To convey an impression of strength, Lincolns will have a strong Cantrail.

Cue 5: Bodyside - Taking a cue from the famous Lincolns of the '60s, '70s and early '80s, Lincolns will have a clean, uncluttered bodyside. This not the vertical slab sides seen on these earlier Lincolns, but can have some curvature in it.

Cue 4: Beltline - Lincolns of old had relatively straight beltlines sometimes with a slight hop-up over the rear fender. This strong beltline often was topped with a chrome molding. Lincoln's modern interpretation shows a more muscular haunch than on previous Lincolns.

Cue 3: Chamfer - Adding to the strong beltline is a break-line in the beltline surface aft of the front doors. This contributes to the muscular haunch idea.

Cue 2: C-Pillar - Lincolns have had a wide C-Pillar that projects a very strong, upscale image. This strong C-Pillar can be used in cars, crossovers or traditional SUVs.

Cue 1: Taillamps - A major identifying design cue for Lincoln is a distinctive taillamp design. Usually this has been a wall-to-wall design as seen on the Mark VIII.

More details on Lincoln's design cues can be seen below the fold.

Continue reading "Lincoln in the Future - Design Themes" »

Posted by George Peterson at 10:20 AM | Permalink | Comments (2)

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Happy New Year from your automotive news and research providers at VehicleVoice and AutoPacific. We are looking forward to giving you even better car, truck, and industry coverage in 2007. There will be even more opportunities for you to express your opinions on automotive topics through VehicleVoice surveys.

If you have not yet joined the VehicleVoice automotive Internet survey panel, please click here and you will be linked to a very brief join-up survey.

Posted by George Peterson at 12:00 AM | Permalink | Comments (0)

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AutoPacific's signature image is an original work by Robert Blumhagen in Orange County California. Robert calls his style "California Realism" and that certainly is the case with the great paintings he has done over the years.

This classic Hudson conveys AutoPacific's love for all things automotive from yesterday, to today, to the future.

Posted by George Peterson at 12:00 PM | Permalink | Comments (0)

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As we approach the year end of 2006, VehicleVoice would like to wish all of our readers and survey takers Happy Holidays and best wishes for a successful 2007.

There are over 60,000 of you now and you have helped make VehicleVoice one of the fastest growing automotive news sites since VehicleVoice was launched in November, 2005.

We look forward to continuing the dialog with you in the coming year.

Have a Great Holiday Season!

Posted by George Peterson at 10:46 AM | Permalink | Comments (0)

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The Los Angeles Auto Show has lived in the shadow of the larger Detroit Auto Show - pardon me, the "North American International Auto Show" - for decades now. Through a folly of scheduling, Los Angeles and Detroit were always scheduled on top of each other in early January. Why more people didn't opt for LA in January rather than Detroit was beyond us. But it wasn't until LA moved away from the January date (which Detroit will keep because that is where the Detroit Auto Dealers Association wants it) that it has begun to reach critical mass.

Of course, VehicleVoice and AutoPacific crews were there to document the most recent LA Auto Show and determine if it has succeeded in separating itself from Detroit.

LA Gets International Sanctioning

For its "New Beginning", LA received international sanctioning from the Paris-based Organisation Internationale des Constructeurs d’Automobiles (OICA). This is a big deal because only two shows per continent can be sanctioned each year by OICA. But it is French, so who cares?

LA Moves Even Earlier in 2007 for 101th LA Auto Show

In 2006, LA moved from January to just after Thanksgiving. Press days were on the 29th and 30th with several companies throwing soirees on Tuesday evening the 28th. This moves LA five to six weeks earlier than Detroit and opens up the ability to trot out more concept vehicles and new vehicle introductions.

For the 2007 show, LA straddles the long Thanksgiving holiday with the show getting more attendance from the Thursday and Friday of the week when prospective show goers are sated with American football and avoiding the shopping malls like the plague. Good move, LA.

Posted by George Peterson at 12:11 PM | Permalink | Comments (0)

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Which cars and trucks are planted to the dealer's floor? In other words, which vehicles take the longest to sell? Who cars? Why does it matter, anyway?

Well, while it may not seem that important to you, it's critically important to the industry s a whole... from the manufacturese, component suppliers, dealers and quite a few financial institutions. First, if you know the time it takes to sell a vehicle, you know how much it is dragging on the dealer's floorplanning costs. Floorplanning is the term for the amount it costs the dealer to finance the a vehicle in inventory waiting to be sold. If a vehicle has been hanging around for weeks, he'll be more likely to deal aggressively to get rid of it. Also, vehicles that have high days supply may be less popular. From that perspective, they may be the ones you want to stay away from.

Continue reading "Stuck to the Dealer's Floor - Inventory Numbers Tell the Story" »

Posted by George Peterson at 02:01 PM | Permalink | Comments (0)

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The Ford Taurus ceases production during the week of October 23, 2006. Since the Taurus was launched on December 24, 1985 as a 1986 model year product over 7 million Tauruses have been sold. Taurus, over the years, is the second best selling Ford car after the Model T. What began as a bold move into contemporary automotive design was allowed to wither in the vine and eventually fade into a fleet-only product.

1986 Taurus Redefined the Mid-Size Car

The 1986 Taurus arguably rescued the Company following its early 1980s trauma and set a new direction for Mid-Size Sedans in the USA and world markets. Taurus quickly became a benchmark for competitive entries and even when competitors criticized its "jellybean" styling, they emulated it in one manner or another.

I was there when Ford used a Hollywood sound stage to launch the first generation Taurus. This "reveal" was the conclusion of a year-long string of teaser public relations leaks that helped guarantee that the public was ready for the Taurus and not surprised by its advanced new styling.

Best of All Tauruses - 1992 Through 1995

Where the 1986 Taurus was an aggressive change, Ford research concluded that the original concept was right on target and the second generation Taurus was what many considered a mild evolution of the original car. Keeping the basic concept the same, Ford tweaked the Taurus and the result was perhaps the best of all the Taurus line - the 1992 through 1995 Taurus.

Because the 2nd generation car was so evolutionary, the automotive media jumped all over it criticizing it for being too tame after originally redefining the Mid-Size Car. Ford management twitched at this criticism and vowed to break the mold again with the DN101 - the 1996 Taurus.

Continue reading "Ford Taurus Laid to Rest - Dies of Neglect" »

Posted by George Peterson at 03:03 PM | Permalink | Comments (2)

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Today marks the final Saturday morning Crystal Cove mini concours in Newport Beach. Starting at 0700 each Saturday morning for years, Crystal Cove has become the spot for car owners and enthusiasts to gather over coffee and donuts on Saturdays. Unlike Donut Derelicts up Pacific Coast Highway that has a hot rod flavor, Crystal Cove had a exotic car flavor even though there were a few hot rods and classics thrown in. VehicleVoice and AutoPacific correspondents and many local auto industry folks were on hand to bid farewell.

Irvine Company Crushes Crystal Cove Car Event

Seen here is Barry Meguiar of Meguiar Waxes and Freeman Thomas of Ford. Meguiar is explaining what has gone on concerning the weekly Crystal Cove event. He describes typical Irvine Company "gestapo tactics" in shutting down the event. An approach to local upscale mall - Fashion Island - led Irvine Company to warn the retailers there not to discuss holding the event at Fashion Island.

What were the reasons for kicking the event out? Apparently there was too much traffic congestion. The Newport Beach Police said traffic was not a particular problem. The cars were too high performance and unsafe at speed. Newport Beach Police said that they had not given out an extraordinary number of tickets before, during or after the event for the years it has been held. And finally, the local residents complained of noise and congestion. Heck, the local residents were some of primary participants.

The event was over each Saturday at 9AM a full hour before the retail stores in the upscale Crystal Cove strip mall where there is a Starbucks, nice pastry shop and Trader Joes. The Starbucks and pastry shop will sorely miss the Saturday morning crowds - business they wouldn't get otherwise.

Ford to the Rescue

Ford circulated flyers at the final Crystal Cove event and opened their Premier Automotive Group and Mazda Campus to the Crystal Cove enthusiasts. PAG and Mazda is adjacent to the Irvine Spectrum - another upscale shopping area, but without the oceanside ambiance of Crystal Cove. The Ford venue promises to be more spacious and more inviting... but I think it is on Irvine land as well.

Continue reading "Crystal Cove Concours Kaput - Goodbye Croissant Derelicts!" »

Posted by George Peterson at 09:55 AM | Permalink | Comments (1)

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Unlike many media/analysts, AutoPacific and VehicleVoice staffers actually have their own cars. We actually go to dealerships and buy them just like normal folks.

Two years ago just as the lease was coming due on my 2003 Ford Expedition Eddie Bauer I was driving through the local auto mall and rolled past the Infiniti dealership where they were having a fire sale on out-of-production first generation M45s. You remember the 1st M45. It was a Nissan Cedric/Gloria/Cima with "sporty" cues like a fast greenhouse and frameless door windows. The M45 had been put in the Infiniti lineup as a stopgap between the fading-fast I30 and the already faded Q45. Only a short-term proposition, Infiniti did what it could to differentiate the car and make it an "Infiniti" - did a pretty good job.

New Lease Chosen for Most Horsepower for the Buck

Frankly, I didn't like the way the car looked, but the price was too good to pass up. Turns out I have gotten into the mode of leasing vehicles based on horsepower per lease payment dollar. The 340 horsepower for the M45 made the discounted lease they were offering a real deal.

The M45 was the 1st sedan I had personally had for ten years. The previous five two-year leases had been SUVs - one Jeep Grand Cherokee Laredo and four Ford Expeditions. Just could not bring myself to get sixth SUV for this iteration.

On the upside, the Infiniti was very, very fast. The V8 sounded outstanding at full roar. Handling was OK. The seats with temperature controls interfering with your inboard thigh were among the most uncomfortable in the industry for few years. They were shared with the G35 and FX and thankfully they have been replaced by better seats for its most recent cars.

Continue reading "Good Bye Ol' Paint - Infiniti M45 Off Lease" »

Posted by George Peterson at 08:59 AM | Permalink

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As part of Ford's semi-annual Way Forward plan, Ford announced that they will not cancel the venerable Lincoln Town Car after all. They made the sensible decision to move the Town Car from its decades-old home of Wixom, Michigan to the Ford Crown Victoria/Mercury Grand Marquis Plant in St. Thomas, Ontario.

You can see what we at VehicleVoice think/thought of Ford's plans for Lincoln in our Lincoln commits suicide blog of August 24, 2006.

Keeping the Town Car around helps Ford's revenue picture, keeps the livery business happy and increases the utilization of the St. Thomas plant (where Ford just dropped one of two shifts). Apparently, the transition from Wixom to St. Thomas is not as easy as many believed. There will have to be some substantial changes to the cars to accommodate all three on the same line.

Posted by George Peterson at 02:50 PM | Permalink | Comments (1)

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Had to visit the Costco in Derby just to see if it was different from the Costco stores in the USA. NO! While the merchandise is slightly different (not as much Kirkland private label merchandise), the layout is very much the same. Much larger liquor department with an emphasis on champagne and cases of wine. Still at a substantial value.

Years ago, I read an interview with a Costco exec working on the planning for Costco stores in the UK. He was rubbing his hands with glee thinking about how their strategy of merchandising could transform British retailing. The uniquely American approach to the mass market is something dramatically different than traditional British retailing.

The parking lot was the surprise. Arriving at 10:45 AM (store opened at 10AM) the parking lot was only about a third full and many of the vehicles in the lot were saloon cars (sedans with trunks) rather than the Chelsea tractors (SUVs) that are found in the USA... at least in Orange County.

Note the parking spaces are relatively generous. Not the sub-compact spaces found in most other car parks in England.

Still, felt like a touch of home.

Posted by George Peterson at 11:12 AM | Permalink | Comments (0)

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For the past few days, I have been driving a Cadillac CTS around England. This evaluation is special because the CTS is the winner of AutoPacific's 2006 Vehicle Satisfaction Award for Entry Luxury Cars in the USA. The evaluation started at Heathrow Airport, driving to the outskirts of London and then North to the East Midlands. This drive isn't as unique as that of former-colleague Rex Parker's when his father shipped the family 1964 Lincoln Continental convertible to the UK for an extensive driving vacation in the '60s, but the reaction to American iron is interesting and instructive.

CTS - D-Segment Luxury Entry in Europe

The CTS is an Entry Luxury Car in the USA, but is relatively large for the English driving environment. It dwarfs smaller Renault Clios, Ford Focus C-Max, smarts, Vauxhall Tigras, Ford Kas and the myriad of B and C-Class transportation available in Europe but not in the USA.

The CTS sold in the UK is built in Belgium and has right hand drive. While the CTS may be a bit large for the local car park of B and C-Class cars, there are fair number of BMW 5-Series, Mercedes E-Class, Volvo S60, Audi A6, Peugeot 407, Renault Laguna and even the remaining Rover 75s and MG ZT saloons to compete with. With few CTS saloons sold in England, the car turns heads usually in the slow motion maneuvering through city centres. Young guys crane their heads to see what the Cadillac is.

Continue reading "Cadillac CTS in England - Not the Ugly American" »

Posted by George Peterson at 12:11 PM | Permalink | Comments (1)

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OK, I know I shouldn't take this personally, but Lincoln's latest chapter in its abortive new naming strategy is almost laughable.

Let's Copy Them Nice Folks at Cadillac!

First, Ford decided that Lincoln should use an alphanumeric naming strategy just like Cadillac, the Europeans and Japanese luxury car brands. It doesn't matter that case studies like Acura have proven that this strategy is fraught with peril. "Let's go be exactly like Cadillac! They are real smart folks, so they must be doing it right - even down to Escalade not using alphanumerics. " So Navigator is still Navigator instead of MKN.

Lets Pronounce it "Mark Z"!

Then, at the 2006 Chicago Auto Show, Ford execs and PR folks couldn't get how to pronounce the new names straight. Some were saying the new name for the year-old Zephyr should be pronounced "Mark Z" while others were spelling it out "EmKayZee". Well if the folks internally couldn't get it straight, who can?

Asking for clarification at a high level luncheon, we were told emphatically that it was "Mark Z", "Mark X", "Mark S".

NO, Let's Pronounce it LINCOLN EmKayZee!

But now Ford has flipflopped on the naming again. Now, we are to spell it out, but be sure to include the word LINCOLN before the alphanumerics. You see, this was to strengthen the LINCOLN name and not the vehicle line names.

Poor Lincoln.

Posted by George Peterson at 04:02 PM | Permalink | Comments (0)