LRX Demonstrates Atomization of the SUV Market
Not all that long ago, we (and most other pundits) would have prescribed a pretty failsafe formula for how to create a successful SUV. Make it big, make it really upright, and give it plenty of power, OPEC be damned. Sure, everyone knows now that fuel prices are high, driving demand for more efficient means of transportation, but there are plenty of other factors driving the atomization of the once cookie-cutter SUV market.

Whatever you want to call them – body-on-frame utility vehicles, crossovers, car-based utilities, whatever – SUVs as a genre have matured to the point where there is plenty of space and demand for unique niches within the larger segment. In fact, consistent with the greater overall consumer demand we see nowadays for tailored, unique products that fit every taste (how many ways can you have your Starbucks?), the SUV segment is quickly becoming as diverse as the passenger car market. So is there a market for a sustainable, eco-friendly coupe-like Land Rover? Even five years ago, we probably would have given the notion a big thumbs down.

Seeking New Blood and New Concept Space
Land Rover’s LRX concept previews a niche luxury entry SUV product that we’re expecting to see within the next few years. This product would come in below the car-based Freelander, theoretically casting a wider net and providing a larger gateway to the Land Rover brand. We can see their logic here. Today’s oldest Gen Y buyers are coming of age and are starting to earn real money, and a huge number of them have grown up valuing prestige and premium branding. As a struggling brand (especially in Europe, where the traditional truck-based SUVs that Land Rover specializes in have become more irrelevant than ever), Land Rover has got to find some new blood – and the key hopefully lies in these young and open-minded buyers.

Continue reading "Land Rover LRX Concept: Times are Definitely Changing" »

Posted by Ed Kim at 06:05 PM | Permalink | Comments (0)

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The reigning king of the Luxury SUV hill is probably the Range Rover. High priced at $77,175. Features most couldn't conceive of in an off-road environment. Extremely competent off road. The top of the Land Rover line has established a tremendous reputation and following as THE aspirational Luxury SUV. Range Rover is not the best selling Luxury SUV, but it casts a wide shadow. And has since the early 1970s. VehicleVoice was on hand at The Grand Del Mar Hotel for the media preview of the Lexus LX570. Priced at $73,800, LX570 undercuts the Rangie, but is no less competent.

LX570 - 3rd Generation Lexus LX

Lexus entered the upper end of the Luxury SUV market in 1996 with a facelifted and upgraded Toyota Land Cruiser - the Lexus LX450. The 1st Gen LX was replaced in 1999 by the LX470 which was freshened in 2002 and 2005. So, after a ten year run, it is time for Lexus to bring its latest LX to the market - the LX570.

The first two LX generations did not set the world on fire from a sales standpoint. They were functional-looking SUVs loaded with features. Not head-turners. Not something to make your blood rush. They did, however, bring a very interesting clientele to Lexus. Younger, highly affluent, not wanting to make a strong statement with their vehicle. Confident, not having to show off their wealth. The 3rd Gen LX follows the same formula and hopes to attract the same type of buyer for slightly under 10,000 units per year or 3.5 LX570s per month for each of Lexus' 223 dealers.

Continue reading "2009 Lexus LX570 - Luxurious Anonymity" »

Posted by George Peterson at 02:25 PM | Permalink | Comments (0)

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The rumors are heating up that the buyer of Jaguar and Land Rover is close to being finalized. The front runner appears to be the huge Indian conglomerate Tata and its automotive arm Tata Motors. Others involved in the due diligence process thought to be less advantageous to Jaguar Land Rover for various reasons. The two private equity firms - Apollo and One Equity Partners (led by former Ford CEO Jacques Nasser) - are thought to be a bit too aggressive to have the best interests of the Jaguar and Land Rover brands and their workers at heart. Profit, profit, profit is the name of the game among the private equity sharks. A second car company that is interested in JLR is Mahindra & Mahindra another Indian manufacturer specializing in SUVs and 4x4 vehicles. M&M may be a good fit with Land Rover, but Jaguar is well out of their experience zone.

So, Tata may be the winner when the dust settles adding JLR to its recent acquisitions of Tetley Tea and Corus Steel.

A November 23 Economist article is below the fold with more details.

Continue reading "Jaguar/Land Rover Sale - Rumors Heat Up That Tata Will be Buyer" »

Posted by George Peterson at 10:14 AM | Permalink | Comments (0)

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While Range Rover may arguably be the most prestigious Sport Utility Vehicle on the market it certainly meets or exceeds the product requirements for its buyers winning the Most Ideal Luxury Sport Utility Vehicle Award for 2007. Land Rover’s decades of experience in producing luxurious and capable SUVs coveted by affluent SUV buyers has certainly paid dividends. The Range Rover scores well in all 15 categories, but package considerations such as exterior size, passenger room, cargo space, visibility, and interior storage place the Range Rover at the head of the class.

Posted by Keagan Patrick at 11:35 PM | Permalink | Comments (0)

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This article appeared today on The Economist website and provides their typically British spin on the automotive industry in Britain sometimes to the exclusion of others. Included here with VehicleVoice commentary.

Beauty on the Block

August 30th 2007

From The Economist print edition

A new car and six potential buyers signal hope for Jaguar

EMOTION is said to play a part in many car purchases, but it is less likely to be a factor when buying a car company. Even so, the reaction this week to the first pictures of Jaguar's new XF saloon will have done nothing to still the beating hearts of the half-dozen or so likely bidders for Jaguar and Land Rover, the two British marques being auctioned together by their beleaguered owner, Ford.

But who will buy it?

It would be hard to exaggerate the importance to Jaguar of the XF, which is certain to be one of the stars of the Frankfurt motor show in September. It represents a complete design departure from the frumpy “retro” look with which Jaguar has saddled its often well-engineered saloons for the last decade. If the XF's swooping lines and elegantly modernist interior are a hit with younger customers who would never previously have thought of owning a Jaguar, then the firm, under new ownership, may have a future after all.

VehicleVoice - In our story of August 28, the XF represents a potential saviour for Jaguar - a car that is coveted by buyers of mid-size luxury cars the world over. As we mentioned then, Ford may be getting out of Jaguar just as it turns the corner. Of course, the very conservatively styled, but excellent, XJ premium luxury entry needs to get an injection of XF DNA the next time it is freshened and that is years off.

Although Ford has refused to name the prospective buyers, they include Tata Motors (a division of Tata Group, an Indian conglomerate), probably another Indian car company, Mahindra & Mahindra, and at least four private-equity firms. These include Cerberus Capital Management (which relieved Daimler of Chrysler), One Equity Partners, Ripplewood Holdings, and Texas Pacific Group.

All the bidders are now deep into due diligence as they prepare to table non-binding offers at the end of September. As well as poring over the books, they are touring facilities and examining plans for future products. They are also competing in a beauty contest for the backing of potentially hostile unions, which fear for the jobs of 19,000 members employed in several British factories. Ford is publicly confident of concluding a sale by early next year at the latest. But reaching a sensible valuation of the two marques, which Ford says must be sold together because their operations have become so tightly integrated, is not proving easy.

VehicleVoice - Don't forget... The Land Rover LR2 (Freelander II) and Volvo XC60 share a common platform. That's about the limit of cross marque sharing among Jaguar/Land Rover and other Ford brands. Pulling away from Volvo would be much more problematic for Ford because of cross-platform sharing with Volvo and Ford's big cars in the USA (Taurus/Sable/Taurus X) and the S60-V70-S60 plus sharing of the European Focus/Mazda3/Volvo C30-S40-V50.

Judging how far the XF will halt the slide in Jaguar's fortunes—its sales have fallen by almost half from a peak of 130,000 a few years ago—is only one question among many. How long will the weak dollar eat into the sales and earnings of both makers? Is it necessary to have three factories and a separate design centre to build fewer than 270,000 cars a year? What will happen to Jaguar and Land Rover, which make relatively big and thirsty vehicles, if the European Commission goes ahead with its plan to impose upon car manufacturers an average CO2 emission target of 130g/km by 2012? And how will the onset of a global credit squeeze affect what private-equity groups can pay for a capital-intensive business with a time horizon of three to five years?

The answer to the last two questions may depend on the kind of deal that Ford is prepared to do. All the possible bidders seem likely to want something similar to that wrung from Daimler by Cerberus. The German firm not only agreed to hold on to a 20% equity stake in Chrysler, but also provided substantial financing. Any new owner will want to ensure that Ford retains an interest in the future of the business, in part because it may be possible to persuade the commission to count Jaguar and Land Rover as part of Ford's bigger and more economical range for the purpose of measuring emissions.

As for Ford, its priority is just to get a respectable deal done. Alan Mulally, its chief executive, is adamant that running luxury brands has no part in the company's future. He also concedes that the credit market's tightening “absolutely is an issue”. Lovely though the XF may be, Mr Mulally wants someone else to be its proud owner as soon as possible.

VehicleVoice - All true, Economist. But where does that leave Volvo? The rumor mill continues to mention possible sale of Volvo as well, but Volvo is profitable and intimately linked with Ford in a prduct sense. The idea of Ford keeping an equity stake to convince the EU to let Ford's volumes count against those of Jaguar and Land Rover in emissions regulations is probably absolutely necessary. After all, the present product decisions at Jaguar and Land Rover were made under that scenario - having Ford as a balancer for their worse CO2 emissions.

Posted by George Peterson at 03:29 PM | Permalink | Comments (1)

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This article appeared in the July 26th web-release by the British business magazine The Economist. VehicleVoice commentary is peppered throughout.

Ford: A costly distraction

July 26th 2007: From The Economist print edition

Ford is selling off its premium brands. Who will buy them?

Ford's High Hopes for the Premier Automotive Group Never Materialized

WHEN Jacques Nasser, Ford's boss in the late 1990s, bought two premium European car brands, he had high hopes for his new luxury-car division, which came to be known as the Premier Automotive Group (PAG). By 2005, the firm predicted, Aston Martin, Jaguar, Land Rover and Volvo would sell 1m cars a year, earn more than $1 billion annually and account for about one-third of Ford's profits. But eight years on the PAG is consistently losing money and sells about one-third fewer cars than predicted—and Ford itself is haunted by the spectre of bankruptcy.

New Ford Regime Under Alan Mulally Puts PAG on the Block Piecemeal

After some initial hesitation Alan Mulally, the chief executive brought in from Boeing last September, decided to put bits of the PAG on the block. In March he sold Aston Martin for $848m, and in June he appointed three banks to field potential buyers for Land Rover and Jaguar. The bidding period ended on July 19th with an unexpectedly high number of potential suitors, thought to include Cerberus Capital Management (the private-equity group that bought Chrysler in May), TPG Capital, Ripplewood Holdings and One Equity Partners (a private-equity firm where Mr Nasser now works), along with India's Tata Motors and the Mahindra Group.
Click here to find out more!

VehicleVoice Spin: How much of this is circuitous reporting by the international media? Ford has admitted that potential sale of Jaguar and Land Rover is on the horizon, but how accurate is the list of potential bidders The Economist cites? Wouldn't it be interesting if Cerberus bought Jaguar and Land Rover to be the luxury marques for Chrysler Group?

Ah, Here Comes the Volvo Rumor Again...

Ford is also considering a sale of Volvo, a Swedish maker of premium cars, and the most valuable and profitable bit of the PAG. Last year Volvo is believed to have made a profit, though the PAG as a whole lost $2.3 billion. (Ford does not break out details of the division's financial results.) But although selling Jaguar and Land Rover would make sense, it is less clear that the same is true of Volvo, says Jonathan Steinmetz, an analyst at Morgan Stanley, an investment bank. Volvo is more integrated into Ford than the two other brands, with several Ford and Volvo vehicles sharing chassis designs and parts. Volvo is also far bigger by units sold—it accounted for 7% of sales in 2006, compared with 3% for Land Rover and 1% for Jaguar—which helps to spread development costs.

Former Chairman of AMC Says Ford Should Unload All of PAG and Tend to Knitting

But Gerald Meyers, a former chairman of the American Motors Corporation, a carmaker bought by Chrysler, thinks Ford should sell all of the PAG and get what cash it can. Since Ford is in the middle of a multi-year turnaround plan, any distraction from rescuing its core American business is counterproductive, he argues. (In a sign that the plan might at last be working, Ford announced a surprise profit of $750m for the second quarter on July 26th.)

Now This One Doesn't Make Much Sense

BMW of Germany is one possible bidder for Volvo. BMW says it is keeping its eyes open for takeover targets, though it has had its fingers burnt by acquisitions in the past. Volvo and BMW are compatible premium brands, says Marc-René Tonn, an analyst at MM Warburg, an investment bank in Hamburg. But they do not fit technically: Volvos rely on front-wheel drive, BMWs on rear-wheel drive. Renault would be a more logical buyer, says Thierry Huon at Exane, a brokerage in Paris. Renault needs a premium brand, having failed to build one itself. And the Renault and Volvo brands, with their common emphasis on safety, fit together well.

VehicleVoice Spin: BMW tried its hand with "The English Patient" - Rover and Land Rover - in the 1990s. BMW ended up selling Rover to an investment group for £10 and selling Land Rover to Ford for a couple billion dollars. Volvo cars are based on front wheel drive platforms, BMWs are rear wheel drive (with the exception of MINI). There isn't much synergy here. Much different mindsets as well. This could well be The English Patient all over again if BMW is so anxious to acquire more brands.

Volvo Group Buys Back Volvo... Now That's an Idea

Another possible buyer is Volvo Group, the lorry-making (heavy trucks, to Americans) parent firm that sold its car unit to Ford in 1999. This would reunite the two divisions, but there are no synergies between carmaking and lorry-making, which is why the cars were spun off. It is more likely that Renault will sell its 21% stake in Volvo Group to help finance its purchase of the carmaker.

Can Ford Recoup Its Investment in Money and Resources in the PAG Units?

Estimates of the proceeds from a sale of the PAG range from $8 billion to $16 billion. Ford could invest the money in its remaining brands—Ford, Lincoln, Mercury and Mazda—or in product development. But it would probably be wisest to restructure its health-care liabilities, which it is currently discussing with the United Auto Workers (UAW), the car industry's main union. Mr Mulally is pressing the UAW to set up a union-managed trust that would enable Ford to take tens of billions of dollars of retiree health-care liabilities off its balance sheet. Such a trust would need to be funded up front—so cash from the sale of the PAG would come in handy.

VehicleVoice Spin: <Ford's immediate headache is the 2007 UAW negotiations and indeed medical costs are a major part of the equation. Ford needs concessions to improve its profit picture and help guarantee those UAW workers their jobs. But, this is still the car business and Ford has fallen behind. Not as far behind as Chrysler, but General Motors has certainly taken the lead in product development of late. Ford needs to restructure not only the Company but also its product lineup. If getting rid of PAG - including Volvo - gets their attention back on the ball, so be it.

But think of these things... Many Ford middle managers now have positions with PAG brands either in Europe or headquartered in Irvine, California. Would they go back to the mother ship? Have they learned enough at PAG brands to be an asset to Ford? Would their departure hurt the PAG brands further? On the product sharing side, The Economist article rightly states that Volvo, Ford and Mazda are successfully sharing platforms. How could Volvo continue that in a cost-effective way if they were to be sold? The transfer pricing would be a bitch. Don't forget either that the new Land Rover Freelander II/LR2 shares its architecture with the upcoming Volvo XC60. Wow, this is complicated.

Posted by George Peterson at 09:58 AM | Permalink | Comments (2)

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The Motorist Choice Award is in its second year and is a collaboration between AutoPacific and IntelliChoice.com. AutoPacific, widely known for its industry expertise and research, and IntelliChoice, known for its comprehensive cost of ownership information, designed the Motorist Choice Award to help consumers identify the most satisfying cars and trucks that are also the least expensive to own.

Using data from AutoPacific's national Vehicle Satisfaction research and the IntelliChoice Best Overall Value information, AutoPacific and IntelliChoice have developed a unique tool that can be used by consumers to help them sort through the myriad of choices in today's automotive marketplace.

Here are the 2007 Winners of the 25 individual segment awards:

SEGMENT - Winner

Aspirational Luxury Car - Lexus IS
Compact Car - Mazda3
Compact Crossover SUV - Chevrolet HHR
Compact Pickup - Toyota Tacoma
Compact Sport Utility/ORV - Toyota Tacoma
Economy Car - Honda Fit
Image Compact Car - Volkswagen GTi
Large Car - Toyota Avalon
Large Heavy Duty Pickup - Chevrolet Silverado HD
Large Light Duty Pickup - Chevrolet Silverado 1500
Large Luxury Car - Cadillac DTS
Large Sport Utility - GMC Yukon XL
Luxury Crossover SUV - Acura MDX
Luxury Mid-Size Car - Nissan Maxima
Luxury Sport Utility - Land Rover Range Rover Sport
Mid-Size Car - Volkswagen Jetta
Mid-Size Crossover SUV - Honda CR-V
Mid-Size Sport Utility - Toyota 4Runner
Minivan - Honda Odyssey
Premium Luxury Car - Lexus LS
Premium Mid-Size Car - Nissan Altima
Premium Mid-Size Crossover SUV - Nissan Murano
Premium Sports Car - Lexus SC
Sports Car - Porsche Boxster
Sporty Car - Scion tC

The press release can be found below the fold.

Continue reading "2007 Motorist Choice Awards Announced" »

Posted by George Peterson at 08:00 AM | Permalink | Comments (0)

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AutoPacific Take on Land Rover Range Rover Sport Win – Owners’ satisfaction ratings for styling and interior build materials strongly contribute to the Range Rover Sport’s class-leading performance in the Motorist Choice Awards® Luxury Sport Utility category. The Range Rover Sport dominates the Luxury Sport Utility segment with acclaimed ride, handling, power and acceleration.

IntelliChoice take on Land Rover Range Rover Sport win - The Land Rover Range Rover Sport has better than average fuel costs and retained value. When you combine this with the AutoPacific survey the Range Rover Sport beats out the competition.

Posted by Keagan Patrick at 12:00 AM | Permalink | Comments (0)

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In some ways, we have been remiss with our coverage of the potential restructuring of Ford Motor Company through the sale of Aston Martin, Jaguar, Land Rover and Volvo. Most of the reporting in the popular and business media has been tilting at windmills. Reporters reporting rumors without verifying facts. And the latest twitch that Ford is to soon announce it is selling Volvo may indeed be the same.

Jaguar, Land Rover and Volvo comprise Ford's Premier Automotive Group and their American headquarters are just five exits south of AutoPacific on the 5-Freeway. Of course, Ford has already sold off Aston Martin for just shy of $1 billion. Is there more to follow? We don't KNOW, but we have some ideas.

Is the Press Generating its Own News?

If you have followed the business news, the British press has piled on Ford selling Jaguar and Land Rover. Jim Hall's June 27 story puts much of the rumor blame on Keith Crain's Automotive News having overreacted to a short blurb in British car mag Autocar. Once AutoNews ran the story everyone else jumped on. Similarly, recent reports have Ford selling Volvo a much larger and more profitable proposition than selling off Jaguar and/or Land Rover. Would there be a likelihood that Ford could off-load all of PAG? Another don't KNOW, but it would be difficult. More on that later.

Loans Collateralized by Jaguar/Land Rover/Volvo Assets At Risk?

The huge loans Ford took last year used its automotive assets as collateral. That included Jaguar, Land Rover and Volvo. Should Ford attempt to unload those assets, then the basics of the loan would have to be renegotiated. And Ford's automotive assets without Jag/LR/Volvo or any of the three may not meet the coverage requirements. That's another don't KNOW, but a guess.

Unbundling Product Sharing Will be a Problem

Over the years, Ford Motor Company has attempted to make its product development activities more efficient by sharing products between Ford/Jaguar/Land Rover/Volvo/Mazda. In fact, Ford's super successful European Focus/Mazda3/Volvo S40/V50 platform has resulted in excellent vehicles for each brand. Similarly, the Land Rover LR2 (Freelander II)/Volvo XC60 will be shared. Ford based the Jaguar S-Type off the LS Platform which also yielded the Lincoln LS, the Ford Thunderbird and, loosely, the Ford Mustang.

While these relationships may be maintained or even strengthened if Ford sells-off one or more of the PAG brands, it won't be easy.

And if Ford gets rid of its PAG brands it will miss out on the revenue and profit potential of the critically acclaimed Jaguar XF sport sedan and the Volvo XC60 Crossover SUV.

We Believe 'Em, Don't We?

So, as of July 18, 2007, we believe it when Ford says it is looking at all options, but that the Company has not made a decision to sell Jaguar, Land Rover or Volvo. Think about it this way, Chrysler's merger of equals with Daimler-Benz was not leaked before it happened. Great security. Similarly, Ford's acquisition of Volvo came out of the blue. Maybe there is just too much smoke now for there to be any fire.

Posted by George Peterson at 01:59 PM | Permalink | Comments (1)

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I really wanted to drive a Land Rover Freelander II (LR2 in the USA) when I was visiting England, but the Land Rover folks "only" had a Range Rover Sport available with automatic transmission and a navigation system. Apparently, the available Freelander IIs were all manual trannies and shifting with my left hand is not a forte of mine. The RR Sport was featuring the all new 3.6L V8 Twin Turbo diesel and, for an American driver, getting the diesel was a treat.

The Range Rover Sport is a sporty derivative of the more boxy Discovery II - known here as the LR3. In fact, the RR Sport looks much more like the range topping Range Rover than the LR3, but the innards come from the less expensive Land Rover. Besides the unique body styling and faster rear end, the Sport has extractor vents on the front fender. But then who doesn't these days?

Range Rover Sport at £52,000... Such a Deal

The particular vehicle I drove as a Range Rover Sport HSE V8TD and it was priced at £52,000 - or about $104,000 including Britain's 17.5% VAT (value added tax). That makes it about $86,000 before taxes.

Living with the RR Sport for a week provided the opportunity to evaluate the vehicle and its powertrain over about 700 miles of driving. While the Sport is not a huge SUV by American standards, it certainly is in England. Dodging parked cars and threading your way down narrow B-Roads is a challenge due to the width of the Range Rover. It is very maneuverable with a tight turning radius so the tight conditions were pretty easy to handle. Going mirror to mirror with even wider lorries coming the other way was always a concern, but never happened. In the Lake District, the generous shoulders found on some roads in southern England were non-existent. In fact, the overgrowth often hid stone walls just inches from the edge of the road. Whew. No body damage!

Parking the RR Sport in a shopping center parking lot is a challenge. Parking spots in England - this is in Henley the day before the Regatta - are designed for B and C-Cars - not for "Chelsea Tractors".

Interior Very Livable - Luxury SUV-Style

The interior of the Range Rover Sport HSE is comfortable, easy to get into and out of and has good visibility. Living with a Ford S-Max for the week prior to the RR Sport had me preferring the Ford navigation system with the redundant turn-by-turn display in the center of the instrument cluster, but the Land Rover system was just about as good. "Penelope" (the voice of the system) managed to avoid motorways for the most part, and only took me down a couple of cowpaths.

V8TD is Superb!

But the story is really the engine. The V8 diesel is a delight to drive. It has great pulling power from stop and its "TED" (time exposed to danger) while passing is minimal. Lugging the heavyweight Range Rover Sport around was no problem. The sound of the engine is outstanding. Not the normal diesel chugga chugga, the twin turbo has a authoritative snarl when the accelerator is downed. The 700 miles came on two tanks of fuel - not bad but still a shock when filling up the vehicle took over $100 (diesel was about 98 pence per liter or almost $8 per gallon).

Cargo Room Adequate for a Long Weekend Jaunt

Having swapped a Ford S-Max Crossover for the Range Rover Sport in Manchester, I was interested to see how well it would swallow the luggage compared with the S-Max with its 3rd row of seats stowed. The five passenger RR Sport has just about equal cargo capacity as the S-Max - generous, but not up to the level of an Expedition or Navigator with the 3rd row seat down.

Posted by George Peterson at 09:24 AM | Permalink | Comments (0)

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Every Freelander sold in the USA hurt Land Rover's image. It was a fortunate folly that Freelander lost the source of its anemic 2.5L V6 engine when Rover collapsed in England. This gave Land Rover North America a convenient reason to kill the Freeloader, uh, Freeboater, uh, Free...

Freelander continued in Europe with one engine - fortunately the EU powerplant of choice - an oil-burning diesel.

That the Freelander was a sales leader in Europe and an also ran in the USA shows how competitive the American SUV market is and how cutthroat it can be. There is simply no room anymore for a substandard entry.

Land Rover launched the all new Freelander 2, to be named the LR2 in the USA, at the British International Motor Show in London this week. It will come to the USA in Spring 2007.

LR2 Adds Guarantees Land Rover Sales Records Will Continue

Land Rover has set sales records in the USA for the past few years and remains a bright spot in Ford Motor Company's Premier Automotive Group. If Land Rover were an independent company today, their managers would be rolling in bonus cash, but, alas, Land Rover exists within struggling Ford.

Come 2007, when the LR2 is added to the American Land Rover lineup, Land Rover will have a fourth model to add to their impressive volume achievements. Not huge volumes, but very respectable profits.

Platform Shared With Volvo's Upcoming XC50

Based on a platform shared with the Volvo XC50 (and is a derivative of the S40/V50 platform) that comes about a year later, the LR2 carries over some Freelander styling cues including proportions that yield a hood that looks a bit too long.

Engine from Volvo Still with Full Time 4WD

In the USA, LR2 gets one engine - a 3.2L in-line 6-cylinder from Volvo turning out about 230-horsepower. This finally puts the small Land Rover in a relatively competitive position powertrain-wise, but with similar sized SUVs like the Acura RDX putting out 240-horsepower (4-cylinder turbo starting at about $33,000) and the much cheaper Toyota RAV4 V6 putting out 269-horsepower (at a bit over $22,000 for the V6) the Land Rover brand name is going to have to do double duty to attract customers.

Like Jeep-of-old, Land Rover strongly believes that all wheel drive is part of its cachet, image, reputation adn the LR2 has full-time 4-wheel drive standard with no two-wheel drive derivative available.

Interior Upgrades Very Welcomed

The interior of the LR2 is substantially improved over the old Freelander. Where it appeared that Rover engineers could not spell the word "ergonomics" the LR2 looks much more user friendly.

The rear seats do not fold fully flat, a packaging error from our perspective. The front passenger seat does not fold flat either... another interior compromise that should have been eliminated.

Pricing - Volumes

With the Acura RDX boldly priced at $33,000 with a 4-cylinder turbo, we'd expect the Land Rover LR2 to be positioned in the mid-$30s as well. We wish the base price actually would be below $30,000. Land Rover plans to produce 80,000 Freelander 2/LR2s worldwide with 40% headed stateside. If they put down 32,000 LR2s, Land Rover becomes an altogether different proposition in the market.

Posted by George Peterson at 08:56 AM | Permalink | Comments (1)

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Automotive Lease Guide is an influential and closely watched barometer of the value of brands and vehicles in the USA. ALG's data are used by leasing companies to set the values for vehicles two and three years in the future and are critical in determining what lease rates a lessee will pay.

While ALG's Residual Value Awards are not of the ilk of Motor Trend, Automobile, Car & Driver enthusiast awards, they provide an interesting counterpoint to awards based test track measurements, zero to 60 times and seat of the pants opinions. Here is the text of the ALG release...

ALG's annual Residual Value Awards honor those vehicles in each automotive segment predicted to retain the highest percentage of their original price. For the third consecutive year, American Honda Motor Company, Inc. heads the list with the Honda Brand winning the Industry Brand Residual Value Award. Honda also received two individual segment awards: the Odyssey for the Minivan Segment and the Accord for the Midsize Car Segment. This is the fifth consecutive win for the Honda Odyssey and the second win for the Accord.

Acura, a division of American Honda Motor Company, Inc., is the winner of the Near Luxury Car Segment for the TL.

BMW of North America, LLC has once again made a strong showing by winning the Luxury Brand Residual Value Award for the third consecutive year. MINI USA, a division of BMW of North America, has won the Compact Car Segment for the MINI Cooper for the fourth time.

Toyota Motor Sales, USA, Inc. took home the most Residual Value Awards this year by winning six individual segment awards: the Avalon for the Fullsize Car Segment, Tacoma Pick-up for the Compact Truck Segment, Tundra for the Fullsize Truck Segment, RAV4 for the Compact SUV Segment, 4Runner for the Midsize SUV Segment, and the Sequoia for the Fullsize SUV Segment. This is the fifth consecutive win for the Toyota Tacoma, Tundra and Sequoia; and the third consecutive win for the 4Runner.

Mercedes-Benz USA LLC is the winner of this year's Luxury Car Segment award for the CLS Class.

The Sports Car Segment award this year goes to Porsche Cars North America, Inc. for the 911 Carrera.

And last but not least, the CUV (Crossover Utility Vehicle) award goes to Land Rover North America, Inc. for the Range Rover Sport.

"In an era of negative pricing and overcapacity, Residual Value excellence is increasingly difficult to achieve," said Raj Sundaram, President of Automotive Lease Guide. "Both the segment and brand winners clearly demonstrate that quality products combined with effective pricing strategies will rise to the top." Sundaram added that, "While the top rankings did not change, several brands have shown significant improvement over last year, highlighting the importance manufacturers are placing on residual value as a long-term objective."

This year's awards are based on 2006 model year vehicles. For the fourth year, ALG has also included awards for the brand with the highest predicted resale value of all industry and luxury vehicles. The awards are derived after careful study of segment competition, historical vehicle performance and
industry trends. Award winners are featured on http://www.alg.com, The Wall Street Journal, Automotive News, and other automotive publications and websites dedicated to bringing the industry's best performing models into the
public eye.

Continue reading "Automotive Lease Guide Releases Residual Value Awards" »

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Kiplinger's Personal Finance magazine (December 2005) selects the Best New Cars in several price classes. Their selections are as follows:

Best New Car under $18,000: 2006 Honda Civic. "With its sleek, aerodynamic look, the new Civic gets more power without sacrificing fuel efficiency. Six airbags are now standard equipment." [Best in Class: Volkswagen New Beetle]

Best New Car - $18,000 - $23,000: 2006 Hyundai Sonata. "It has classy good looks and is surprisingly refined for around $20,000. It also has the most standard safety equipment in its class."

Best New Car - $23,000 - $30,000: 2006 Dodge Charger R/T. "Under the hood it's a whole lot like the Chrysler 300C. But it has a sportier suspension, a lower sticker price and the DNA of a Daytona winner." [Best in Class: Mini Cooper S Convertible]

Best New Car - $30,000 - $45,000: 2006 Buick Lucerne CXS. "Buick's large-sedan replacement for the LeSabre offers V6 and V8 power, heated and cooled seats, and remote start. Front bench seats are an option." [Best in Class: Acura TL]

Best New Car - $45,000 and Over: 2006 Mercedes-Benz CLS55 AMG. "From the performance division of Mercedes-Benz comes a new class with style and luxury to spare. It smothly powers from zero to 60 mph in 4.5 seconds." [Best in Class: Lexus LS430]

Best New Sports Car: 2006 Mazda (Miata) MX-5. "The best-selling roadster gets a thoughtful redesign. Now there is more zoom as well as more room - enough to fit a supermarket haul in the trunk." [Best in Class: Chevrolet Corvette]

Best New SUV: 2006 Range Rover Sport. "Think of it as a rugged sport sedan, equally at home on city seats or on the savanna." [Best in Class: Jeep Grand Cherokee Overland]

Best New Crossover Vehicle: 2006 Toyota Highlander Hybrid. "This hybrid utility vehicle gets 33mpg in the city, but it's no slouch when accelerating. The electric motors give it more power than the V6 gas model." [Best in Class: Honda Pilot]

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