GM ending Hummer brand after failed deal

Written by buzz. Posted in Cars

Hummer H2

General Motors has announced that it will begin to wind down Hummer operations after the take over deal with a Chinese firm failed.  Sources have reported that Beijing had refused to approve the take over, though as of yet no official statement has been given.  One reason proposed by Klaus Paur, North Asia director of market research company TNS, is that China’s government is set on producing energy-efficient vehicles, and that the Hummer brand is fundamentally outside of this goal.

The deal was originally conceived last year, when GM went into bankruptcy protection and began divesting many of the famous brands it had purchased over the last few decades.  The Sichuan province-based Tengzhong firm, which specializes in road and construction equipment and energy industries, sought to by the Hummer brand from GM.  While Hummer’s reputation consists of military-styled, gas guzzling SUVs, Tengzhong’s mission was to improve fuel efficiency in the Hummer models.  This mission included the introduction of a line of diesel engine Hummers.

In the wake of the failed purchase, GM has stated that they will still honor Hummer warranties.  Likewise, GM will continue to provide vehicle service and spare part support for all current Hummer owners. While no word has been given as to when GM plans to halt production, chances are that like Saturn and Pontiac, Hummer will be phased out by the end of the year.

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Toyota needs aggressive plan to counter recalls

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Toyota Motor Co.

When it comes to keeping its current customers while attracting new ones amidst massive recalls, Toyota has its work cut out for them.  But, as Don Esmond, senior vice president of Toyota Motor sales USA, put it, “We’ll figure what the right cruise missile will be.”  A cruise missile is an accurate metaphor for the incentive plan the automaker will need to implement.  With more than 8.5 million vehicles recalled worldwide, the number one car company’s reputation is on the line and needs swift, powerful action to staunch any further bleeding.

Toyota has already offered returning customers a $1,000 “loyalty” bonus, an incentive also offered by rivals GM, Ford, Chrysler, and Hyundai in an effort to lure away customers.  According to sources, one option Toyota is considering is to offer another $1,000 rebate to customers.  Another option being considered is a free maintenance program, which would include oil changes and regular services, and a revamped warranty program that would at least match Hyundai’s leading 10 year, 100,000 mile powertrain warranty.

Of the 131,000 inventory vehicles recalled in the United States, Toyota executives state that most have already had their faulty pedals replaced, and expect almost all of them to return to the showroom floor.  Hopefully part of the company’s plan involves incentives to try and convince consumers to buy recalled vehicles.

Spyker needs more cash for Saab

Written by buzz. Posted in Cars

spyker logo

Spyker Cars

If Spyker wants to make Saab a profitable enterprise, they’re going to have raise more cash and do it soon.  Analysts say that in order to put the Swedish auto company into the black they will have to sell upwards of 75,000 vehicles per year.  This number is a far cry from the 39,903 they sold last year, and light years away from the 300 or so cars Spyker has sold in its entire decade of being in business.  In order to meet this goal, which is 250,000-500,000 cars short of projected goals, Spyker will have to invest hundreds of millions of dollars – dollars that will have to come from new investments.  The company asserts that it has enough capital for financing, but CEO Victor Muller recently told shareholders that he wants to list Spyker in the London and Stockholm stock exchanges in order to have closer proximity to investors.

Besides new capital investments and increased production, Saab will also have to sell, service, distribute, and offer parts and warranties to its customers, two-fifths of whom are in the in the United States.  Trying to rebuild strong distribution and service networks to meet all these tasks in this turbulent auto climate will be an uphill battle for Spyker and could delay or stifle their ambitious plans.  On the other hand, Saab sales have dropped so low in the past few years that even moderate improvement could be seen as success.

Saab purchased by Spyker

Written by buzz. Posted in Cars

saab logo

Saab Motor Co.

The wake of General Motors‘ June 2009 bankruptcy left several brands stranded: the military-turned-civilian Hummer was sold to a Chinese machinery company, the affordable line of Saturn cars is set to be totally phased out and off lots by this October, and iconic American brand Pontiac will vanish by the end of 2010. Not all of GM’s brands are doomed to the scrape heap, though.  On January 26th, Dutch supercar maker Spyker announced that it had purchased the often unnoticeable Saab for $74 million dollars after months of negotiation.  Its plan for Saab: make it competitive with the well established sedans of companies like BMW and Audi, with the hope that this will make the brand profitable 2012.  Spyker’s plan is an optimistic one, given Saab’s underwhelming financial performance during its tenure as a GM brand.

The purchase offers Spyker a way to enter the lucrative luxury sedan market.  Currently, Spyker produces less than 50 cars a year, each with a price tag well over $200,000.  In stark contrast, they expect to sell between 100,000 and 125,000 Saabs annually.  At the very least, with the increase in workers Spyker will need in order to maintain production capacity for Saab, the company can hope to increase production of its supercars to around 100 a year.

Ford releases details on 2011 Shelby GT500 Mustang

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Ford 2011 Shelby GT 500

2011 Ford Shelby GT 500

On February 8th, Ford Motor Company released details on the 2011 Shelby GT500 Mustang.  Ford Special Vehicles Team (STV) made several significant changes to the Shelby GT500, showing their determination to improve upon an already impressive car.  For starters, the Shelby GT500 gets 10 horsepower increase, upping the number from 540 to 550.  This power increase comes from the new all-aluminum engine manufactured for the Shelby GT500.  Not only does the new engine boost performance, it also helps the Shelby GT500 shed some weight.  102 pounds are lost by using aluminum instead of cast iron for the engine block.  The power increase plus the weight loss signals that STV are trying to get as much improvement in performance as possible.

Ford released a couple of other important numbers in terms of performance: the Shelby GT500 delivers 23 mpg on the highway and 15 mpg in the city.  While these numbers are only a 1 mpg improvement over the 2010 Shelby GT500, they give the car a combined mpg that allows it to avoid the gas guzzler tax ($1000 for the 2010 Shelby GT500).  Ford clearly considered all of the numbers while building the 2011 Shelby GT500, and make no mistake they improved on some big ones.

Ford could be #2 automaker in 2010 due to Toyota recall

Written by buzz. Posted in Cars

Ford Logo

Ford Motor Co.

Toyota’s current recall woes could mean a big increase in the United States for Ford Motor Company in 2010.  While the year is still young, initial figures predict that Ford will sell 16.57 percent.  Toyota, on the other hand, is expected to lose more than a percent on its sales, dropping down to 16.45 percent.  This would mean that Ford would overtake Toyota as the number 2 automaker for the first time since 2007.

Though there are still 10 months left in 2010, the numbers for January and February definitely represent Ford’s upward momentum.  Ford’s January numbers were 2.5 percent higher than they were a year ago, rising to 16.7 percent.  Even more dramatic is the rise in Ford’s share for February.  They are currently averaging a 16 percent market share, which is 11 percent more than usual.  On the other hand, Toyota’s January numbers fell to 14.1 percent, the lowest they’ve been in four years.

Ford isn’t the only company that stands to gain from Toyota’s recent problems.  General Motors’ market share stands to jump from 17.87 to 18.12 percent, keeping their spot as the number one U.S. automaker firmly in place.  Honda is also predicted to gain a modest amount of the market, going from 11.14 to 11.32 percent, though these numbers don’t take into consideration their recent recall of 379,000 more cars due to airbag issues.

Volkswagen wants to be number 1

Written by buzz. Posted in Cars

vw logo

Volkswagen

Coming on the heels of the recent Toyota recalls, Volkwagen recently unveiled an ambitious plan to overtake Toyota as the world’s biggest car company before the end of the decade.  VW currently stands as the third largest automaker, behind Toyota and General Motors.  With its new plan, VW aims to sell 10 million vehicles by 2018, which is over 3 million cars more than it sold in 2009 (6.3 million, if you were wondering).  Somewhere in the middle of now and 2018, they hope to sell 8 million vehicles.  This would put them still under the 8.27 million Toyota projects to sell this year, but supposedly would be on par with their overall goals.

The announcement comes at a crucial moment for Toyota.  The company is currently mired by massive recalls due to cars that are unintentionally accelerating.  While VW probably did not plan to capitalize on Toyota’s current woes, it undoubtedly makes their goals presently more feasible.  The plan also does not factor in VW’s recent takeover of Porsche, who, as it turns out, tried to take over its much larger German peer.  Much can happen in the next eight years, but as long as VW isn’t putting out cars that go all Speed Racer on their drivers, there’s no reason to believe their plan can’t ultimately succeed.

Toyota declines Japanese award for Prius

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Toyota Prius

Toyota Prius

What does an auto company do when it’s offered an award in the middle of a massive recall?  If the company is Toyota, decline it.  Japan’s government recently awarded Toyota an energy efficiency award for the company’s hybrid car, the Prius.  Because of the Toyota recall affects the Prius, spokesman Paul Nolasco said that Toyota must decline the award because accepting it would be inappropriate.

The award is given annually by Japan’s trade minister and is given to products that exemplify energy efficiency and ecological quality.  The Prius was one of three products to receive the award this year.  Toyota’s insistence on declining the award is fueled by the February 9th announcement that 437,000 of their hybrid vehicles, including the Prius, would be recalled to fix brake problems.  This latest announcement brings the total number of Toyota cars recalled since last October to 8.5 million worldwide.

While the problems facing the Prius have nothing to do with the nature of the award, Toyota clearly feels that no model facing such a widespread problem should deserve being awarded. The Prius was the only car in the field of winners; Mitsubishi Electric Corp. won the award for an air conditioner, while Fuji Xerox Co. won for a multifunction copy machine.

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