Auto Sales for May

U.S. auto sales are still down 39% versus a year ago, which is still a substantial decline. It appears that the U.S. based automakers are having a rebound in sales with the exception of Chrysler. Sales were the best they have been since the summer of 2008....with a annual run rate of 1.1 million cars.

Ford and GM sold more cars in May and cut the downward spiral sales for the month. During April, Ford and GM sales were down 32% and 35% respectively. An interesting fact is that GM declared bankruptcy during May but their sales were up from the prior month. Meanwhile, Chrysler stayed down 47% for both months.

Mitsubishi down 58%
Chrysler down 47%
Honda down 42%
Toyota down 41%
Mazda down 40%
Nissan down 33%
Mercedes down 31%
General Motors down 29%
BMW down 28%
Ford down 24%

Volvo down 23%

Hyundai down 20%
Volkswagen down 16%
Kia down 16%
Subaru down 5%

It appears that new products were the reason behind the twenty percent increase in sales over April. The Ford Fusion, Ford Flex and the company's hybrids set sales records. In addition, two new Lincoln sedans the MKZ and the MKS helped Lincoln post a 2% increase.

Ford's Fusion set a record of 18,321 cars breaking into the top three mid-size sedan market for the first time since July 2002. The Ford Fusion and Mercury Milan have the best predicted reliability among all mid-size sedans. The Japanese brands have dominated the mid-size segment with the Toyota Camry and the Honda Accord.

May sales were up at a fairly decent run rate of 1.1 million cars annually. So, it appears that consumers had more faith in the future to spend money on high ticket items.

An interesting anomaly is that sales of Japanese brands continue with the downward spiral meanwhile U.S. manufacturers seem to be improving. We will have to monitor to see if that is a trend that will continue!

Chrysler Exits Bankrupcy

The Chrysler assets sale to Fiat Group SpA was consummated today. The deal saves Chrysler from liquidation in bankruptcy and turned Chrysler management over to Fiat CEO Sergio Marchionne....who was immediately named the new CEO. The Italian automaker did not put any money into the deal but will give Chrysler small car and engine technology.

The deal clears the way for a new Chrysler Group LLC to emerge from bankruptcy. The bankruptcy cleared away billions in debt, thousands of employees, 789 dealerships and high labor costs. The United Automobile Union gets stock in the new Chrysler but did not have to give up much in terms of wage concessions.

Apparently, the Indiana pension appeals were not enough to get the Supreme Court involved in the legalities of the issue. The debate centered around the fact that secured bond holders were put in an unsecured position receiving a small percentage of what they thought they should receive.

Some of the factories that had been closed will be reopened shortly! Others will remain closed and liquidated thru the bankruptcy.

The new Chrysler will will focus on small vehicles. "Work is already under way on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward," a press release from the company indicated.

Jim Press, will take the position of Vice Chairman and President. Press was formerly Toyota's top U.S. executive but was enticed to join Chrysler in 2007 when Cerberus Capital Management purchased Chrysler.

SUMMARY:

My take on this deal is that it stinks! The Obama administration basically ignored the rule of law where secured creditors are secured by assets....the Chrysler bond holders were robbed and had no recourse. First the liabilities were stripped, which are owned by U.S. companies and citizens, then the assets are given to a foreign corporation Fiat with government financing. This is the sweetheart deal of the century. Fiat did not have to pay $.01 US cent!

Fiat does not have the cash or credit lines to acquire any other large company. If the economy turns worse than expected Chrysler could be in this sad state again! Fiat would be able to walk without much difficulty.

I was very unhappy about the way that they treated the 789 dealers that were closed. It is grossly unfair to the dealers, employees and customers.

Shown above is a concept electric car the Chrysler 200 CC!

2009 Cadillac CTS

Earlier posts have gone over General Motors (GM) financial problems....and a number of my recent posts cover some the of the best cars that GM manufacturers. Today, I would like to bring you the best production sedan that GM manufacturers for the North American market....the Cadillac CTS.

As I have outlined in a previous post the CTS has chosen by Car And Driver as one of their 10 Best for both 2008 and 2009. Cadillac has not been on the 10 Best List since the Seville won in 1992. See the complete list at Car and Driver 10 Best List.

The CTS is the first Cadillac, in recent memory, to have good driving dynamics, an upscale interior. It also offers edgy styling, a refined driving experience and offers a manual for automotive enthusiasts.

Three engines are offered in the CTS....the base engine is a 3.6 liter DOHC V-6 with 263 hp and 253 lb-ft of torque. An optional direct-fuel-injection version of the 3.6-liter V-6 that generates 304 hp. All engines have h V-6s come with a six-speed automatic or a six-speed manual. The base 3.6 liter engine was only 0.4 second slower in 0-60 mpg acceleration....something most buyers will never notice.

On the tech side, the CTS has a voice activated infotainment package featuring intelligent iPod® integration, 40 GB hard drive and an advanced hard-disk navigation system.

The pick of the liter is the CTS-V. This is a SUPER SEDAN! This car is a very refined and extremely capable sedan, handles extremely well, and brakes well.

The CTS-V’s supercharged 6.2-litre V8 engine delivers a heart pounding zero to 60 mph in 3.9 seconds and on to 191 mph where legal and 175 mph for the automatic transmission. These outstanding performance figures enabled the CTS-V to claim the unofficial lap record for a production car (7 mins 59.32 secs) around the Nürburgring’s legendary Nordschleife circuit in October 2008. Click here to see a video of a CTS-V in action, also note the exhaust note - it is even better in person.

The Cadillac CTS-V is fitted with the latest generation of the world’s fastest-reacting suspension technology, Magnetic Ride Control (MRC), which uses shock absorbers controlled by electro-magnets, rather than mechanical valves, accelerating response time. The CTS-V is also equipped with powerful Brembo brakes which account for the excellent stopping distances. These features, along with four-channel ABS, hydraulic brake assist and dynamic rear brake proportioning, ensure that the immense power is kept safely under control.

It’s not all about performance however, as the Cadillac boasts a range of luxury features fitted as standard including new, 14-way adjustable Recaro® performance driving seats, ‘hand cut-and-sewn’ double stitched leather and sueded material, and a high-gloss black Obsidian surface finish. The CTS-V is currently available in left-hand drive only and priced from at $59,995 in the US and in England £56,495 on-the-road (£58,995 for the automatic transmission model).

Summary:

These are the kind of cars that GM should have been building for years. Actually, I could not believe I was driving a Cadillac! I had to take a look at the crest on the steering wheel a couple of times. The standard CTS is well composed, quiet and sophisticated. The CTS-V is a beast that can only be described as an incredible machine.

It appears that GM has transferred its engineers from any of the advanced vehicles like the CTS-V to other duties. It is highly probably that they will quit manufacturing the CTS-V after this production run.

GM Sells Saturn Dealer Network to Penske

General Motors (GM) has signed a memorandum of understanding that would sell the Saturn dealership network of 350 dealers to the Penske Automotive Group (Penske), which is owned by Roger Penske. It is anticipated that Penske will offer all the dealers new franchise agreements and will retain all 13,000 employees for the interim. This is an excellent choice for GM since Roger Penske has a substantial business and automotive background.

Penske is the owner of 252 dealerships.....with 151 based in the U.S. He also owner the Penske Racing and a number of other businesses. He is also a corporate director at General Electric and Chairman of the Super Bowl XL.

Penske anticipates that they should be profitable initially since none of the manufacturing facilities are included in the deal. This deal is strictly for the dealership network and a parts manufacturing facility at Spring Hill, Tennessee.

GM will be manufacturing the Saturn Aura....a four door midsize sedan, the Vue....a small SUV, and Outlook...which is a full size SUV...in addition to other GM models. Saturn will discontinue the Saturn Sky, which is a convertible roadster and the Astra model, which is a small two door coupe imported from Europe. Penske also anticipates selling other models manufactured by other manufacturers outside the U.S.

Yet industry experts are sceptical that the mergers and alliances will work any better than the failed marriages of the past. It is difficult to put together companies with different philosophies and approaches to the automobile. Due to the difficult financial situation, it may be a necessity to survive.

Summary:

I have always been impressed with Roger Penske's business acumen! He will make the Saturn brand a successful enterprise. I am of the opinion that he should have been selected as the CEO of General Motors in 2005. GM would be in much better financial shape today!

It appears that we are experiencing is the expansion of the number of brands in the world. Current thought in the automobile world is that bigger is better since it is a capital intensive industry and large companies can get better deals from part suppliers.

Porsche is the most profitable automobile company based on the profit per car....but Porsche is a small manufacturer. The current automobile market is very fragmented. What works here may not work in Europe or Asia and vice versa!

2010 Buick LaCrosse

The car above is the new 2010 Buick LaCrosse...this is one of the cars that will bring GM back from the depths of bankruptcy. GM has decided to have their Buick brand compete against Lexus....so, the LaCrosse is aimed squarely at the Lexus ES350.

It appears that Buick has done an exceptional job on the interior of the car....it is a far cry from Buick's of the past. The is blue ambient lighting that emanates from a number of different points....the dash has plenty of wood and there is hand stitching on the dash and seats.

There are three trim levels for the 2010 LaCrosse. The base CX a front wheel drive automobile powered by a 255-hp, 3.0-liter direct-injection V-6....with a six-speed automatic. The next level up offer the same powertrain but has available all-wheel drive. The top of the line LaCrosse CXS is equipped with a 3.6-liter direct-injection V-6 with 280 hp. Fuel economy will be about 18 mpg city/27 highway for the 3.0-liter, according to GM.

An interesting feature of the car will be a head-up display for the gauges. Actually, GM developed the head-up display back in the 1980's. They did deploy them on a few early 1990's cars...the head-up display did not attract much consumer attention and it was shelved.

A head-up display was a technology originally developed for the the military in fighter jets. The system has a projector that displays the images on the windshield. That way the pilot had his head-up during difficult maneuvers. In the automobile world, it is virtually the same technology but with a few key gauges...ie speedometer, tachometer, gas gauge etc.

The LaCrosse has available options of a rearview camera, rear sunshade, adaptive, steering directed headlamps. It does have blue tooth connectivity, USB input jacks and navigation. This is a video from Car and Driver video.

Buick's reliability has been exceptional based on the J. D. Powers rankings. So, this should be a very reliable car.

Pricing is attractive for CX in USD at $27,835, CXL at $30,395 and the top of the line CXS at $33,765. A comparable Lexus starts at $35,145 and can reach $45,000 with options.

Summary:

The Buick LaCrosse is one of the best efforts that GM has put forth lately. They finally decided to compete against Lexus one on one. They have added Lexus like options which were not available before.

It appears that they have decided to market the Cadillac brand against BMW, Mercedes and Audi. It is an interesting marketing strategy!

Buick should have made the exterior styling more attractive to distinguish Buick from Lexus....the interior is the strong suit for the LaCrosse.

Buick has priced the LaCrosse to be a bargain!

GM Sells Hummer To Chinese Company

The GM bankruptcy is going to speed things up very quickly. GM and the government have prepackaged this bankruptcy so it should be very quick approximately 60-90 days... the assets will be transferred to a new GM. There will be issues to be resolve in the old GM for approximately 2-3 years.

GM has apparently sold the Hummer brand to a Chinese manufacturer....Sichuan Tegzhog Heavy Industrial Machinery Co. Sichuan Tengzhog manufacturers road construction materials, plastics, and other industrial businesses. I have predicted for a while that the Chinese wanted to enter the U.S. market. I am surprised that one of the Chinese auto companies did not purchase Hummer...since Hummer already has a built in dealer network.

GM will manufacturer Hummers at the GM Shreveport, Louisiana plant thru 2010. It is estimated that the sale will save 3000 jobs temporarily between the plant, dealers and suppliers.

Summary:

I personally would not recommend that we sell U.S. assets to the Chinese. I am not a fan of the Chinese government economic practices or the business practices of many Chinese companies.

The Chinese have kept their currency artificially low so they can get more revenue and sales from the U. S. In the meantime, they have not purchased sufficient U.S. goods to have balanced trade.

The Chinese will keep production in the U.S. temporarily but then transfer the manufacturing to China. So, most of the U.S. jobs will be lost in 2-3 years. Hummer also supplies the military with the military Humvee! Are we now going to buy our military equipment from China?

2010 Camaro LS

Today was a day of reckoning for General Motors....with GM formally declaring bankruptcy. I knew it was coming for a long time....the GM financial statements indicated that GM had severe financial problems. I predicted that GM would go into a government sponsored bankruptcy in my post on February 16th, GM Time to Pay The Piper.

So today, I thought that I would bring up a sports car that GM has just debuted. This car has more stories written about the concept car than any other in recent memory. This will one of the cars that will add some sales and profits to GM once that they are out of bankruptcy.

The 2010 Chevrolet Camaro LS...this is a car with exceptional performance at a bargain basement price of $23,040 USD plus options. This comes with a Aisin six speed manual standard at this price. The Camaro styling is reminiscent of the 1967 original with a long hood and short deck.

The 3.6 liter 304 h.p. V-6 features variable valve timing, direct injection and dual overhead cams. This is the same optional motor that powers the Cadillac CTS, which is a $40K USD plus options automobile. The underpinnings of the car are the same a the Pontiac G8. The engine performance is exceptional at 0 to 60 mph 5.9 sec, braking, 70–0 mph: 173 ft. and a skidpad of 0.87 g. The Camaro LS does get fairly good gas mileage with an estimated city/highway driving of 17/29 mpg.


What is exceptional about the Camaro LS is the performance for the dollar. The Camaro LS outdrags the V-6 versions of the Ford Mustang and the Dodge Challenger. It lacks the power to run with the big boys....the Ford Mustang GT has a 0-60 mph. of 4.9 seconds, and the Chevrolet Camaro SS has 0-60 mph. of 4.8 seconds.

Summary:

My take is that the Chevy Camaro makes a compelling case as a sports car...at an exceptional price! The Camaro LS and LT basically offers a lot of car for minimal dollars. The Pontiac G8 chassis has the Camaro remarkably composed even over bumpy roads and the interior is fairly quiet.

Camaro's are starting to arrive at dealers now!