Month: June 2010

Is Jeep interested in doing a pickup?

Several times last decade, Jeep seemed on the verge of creating a compact or mid-sized pickup before bailing out.

But things may have changed now that Fiat is in charge.

“That’s a segment that I’m very curious about,” says Mike Manley, Jeep CEO. “I know it’s had a rough time here in the U.S., but globally it still seems to be an important sector.”

Manley is quoted in a story that appears at news.pickuptrucks.com.

The last Jeep pickup was the Comanche, produced in 1992.

General Motors Co. is in talks with JPMorgan Chase and Wells Fargo on deals aimed at providing improved access to consumers for auto loans at its U.S. dealerships, two people with knowledge of those talks said.

The sources were not authorized to discuss the still-confidential negotiations and asked not to be named.

Some GM dealers have complained of difficulty securing loans for subprime customers and in financing vehicle leases after GM sold control of Ally Financial Inc, formerly known as GMAC LLC. The sale made GM the only major automaker in the U.S. market without a captive finance company.

Dealers have identified the lack of financing as a potential barrier to GM winning back U.S. market share, now near 19 percent, the sources said. GM’s market share exceeded 48 percent of the U.S. market in 1960 and was around 35 percent in 1990.

The negotiations with JPMorgan and Wells Fargo are intended to broaden the availability of auto financing — particularly to subprime borrowers and for leases. Such a move would remove a potential investor concern around GM ahead of a planned initial public offering, according to the sources.

JPMorgan and Wells Fargo could not be immediately reached for comment.

GM said it was “developing relationships” with banks other than Ally “for specialized financing needs, such as leasing and subprime financing.”

“Access to financing is an important part of the vehicle sales process,” GM spokesman Tom Wilkinson said in a statement. “We believe the auto financing business will continue to evolve and we’ll continue to assess our overall needs.”

As late as May GM had been considering options that would have given it back a captive auto financing company.

But Detroit-based Ally, now 56-percent owned by the U.S. Treasury, balked at proposals to transfer control of the auto finance portion of GMAC. The company provided financing for about 30 percent of GM car buyers in the first quarter.

JPMorgan Chase was the No. 1 U.S. auto lender in the first quarter while Wells Fargo was No. 2, according to data for the first quarter compiled by Experian Automotive.

Hyundai this month will ramp up production of the hot-selling redesigned Sonata at its plant in Montgomery, Ala.

Dealers report severe shortages of the mid-sized car and also the redesigned Tucson crossover. Production of the Tucson, which is built in South Korea, was increased in March.

“We knew Tucson would be a problem because it’s global,” says Hyundai Motor America sales chief Dave Zuchowski. “But if you had told me Sonata would be a problem, I would have told you you’re crazy.”

Dealers sold 18,935 Sonatas in March, and Zuchowski expected sales of at least 18,000 in April, compared with 12,406 in April 2009. The redesigned 2011 model debuted in March.

Tucson sales totaled 3,084 in March, up from 1,346 in March of last year.

“We’re out of cars,” says John Staluppi Sr., owner of four Hyundai stores on Long Island in New York. “No Sonatas, Tucsons — even Elantras are low.” May “could be a tough month if we don’t get product,” Staluppi says.

Zuchowski says the Tucson and Sonata are flying off dealership lots within 20 days.

He says the Alabama plant, which produces both the Sonata and Santa Fe crossover, is now running on 10-hour shifts — up from eight-hour shifts — including some Saturdays. The plant shipped 28,000 vehicles in March, the most in any month since the factory opened in 2005.

The plant was turning out about 1,000 vehicles a day on an 8-hour shift — 70 percent Sonatas. A 10-hour shift gives Hyundai about 200 extra vehicles a day.

In March, Hyundai added 20,000 Tucsons to the 2011 model year production plan.

“I think we’ll be all right,” Zuchowski says.

But dealers are pressing both Zuchowski and Hyundai Motor America CEO John Krafcik.

“I told Krafcik, ‘Brother, your role is to get us more cars or we could be held back,” says Scott Fink, Hyundai dealer council chairman and owner of Hyundai stores in New Port Richey and Wesley Chapel, Fla.

Fink says it’s difficult to buy vehicles from other dealers.

“This is one of the first times that the lion’s share of dealers are selling cars,” Fink says. “Nobody is giving up product. This could be restrictive, moving forward, in terms of meeting our overall sales objective.”

Cherie Watters, general manager of Puente Hills Hyundai near Los Angeles, ordered 150 Sonatas early on. But while her Sonata inventory is in pretty good shape, she has only one Tucson in stock.

“No one was expecting this kind of growth,” Watters says. “Inventory never used to be the problem. Getting customers was the problem.”

Ford Motor Co.’s plan to unveil the redesigned 2011 Explorer online — and not at an auto show — is raising eyebrows among organizers of the Detroit auto show.

The automaker is gradually releasing snippets about the crossover on Facebook. This summer, Ford will reveal the vehicle on the social media Web site, says Eric Peterson, Ford’s crossover marketing and communications manager.

“We wanted to have the Explorer stand out” from the crowd of unveilings and other events at a big auto show, Peterson says.

Sam Locricchio, a spokesman for the North American International Auto Show here, agrees that Facebook is a great way to draw buzz. But Ford also needs to give customers a hands-on experience, he says.

“When you’re making the second-largest purchase in your life next to your home, you’re going to want to have that close-up experience,” Locricchio says. “You want to know if those lines match up or if it’s just like that on your computer screen.”

Peterson says Ford also plans to show the 2011 Explorer at auto shows starting this year.

Volkswagen still has a long way to go to achieve its aim of selling more cars than world No. 1 Toyota, but the German automaker is already ahead of its Japanese rival when it comes to bringing technical innovations into production, an academic study shows.
VW group, including its luxury Audi subsidiary, topped a survey that graded carmakers’ technological advances according to whether they have appeared in production models.
With 64 innovations that made it into cars last year, VW was ahead of second-place Toyota, which introduced 56 innovations that customers can order, according to the study by the Center of Automotive Management at the Bergish Gladbach University of Applied Sciences in Germany. Ford was No. 3 in the center’s ranking, followed by Daimler, BMW and General Motors.
VW, like all the 19 global automakers studied, is concentrating its research and development on making cars more fuel efficient. Powertrain innovations helped the automaker win a high score in the study. An example cited by the center is the advances that brought to market an Audi A3 with CO2 emissions of 99 grams per kilometer and fuel economy of 3.8 liters of diesel per 100km (62 U.S. mpg).
Center director Stefan Bratzel believes the contest between VW and Toyota for global leadership will largely be fought on a technological level and green technologies will be decisive.
“Automakers, even premium brands, have learned that they can’t sell cars with poor fuel economy and a bad environmental image,” Bratzel told me.
He said VW has an advantage because it has greater flexibility, although Toyota is catching up because it is improving the fuel efficiency of its conventional gasoline and diesel powertrains and not just relying on hybrids to boost its green image.
Said Bratzel: “Carmakers strove for faster, bigger and more comfortable cars in the past — now the mantra is to build cost-effective and environmentally friendly vehicles.”