Posts filed under 'Industry News'
October 27th, 2006
With the summer rush over and everyone settling into the fall/winter routine, the oil prices have started to drop. The record gas prices set in the summer have started to fall but the consumer has been driven to seek better fuel efficient vehicles to break the dependency of continual refueling and of course to save money. The disposable income that one once had is being eaten by the gas companies as they gloat over their record breaking profits. During the peak of the price increase large SUVs such as the Ford Expedition and the Chevy Suburban were eating gas at a rate of 25 cents a mile, assuming you were getting 12 miles to the gallon, causing a major backlog of SUVs on dealers lots, prompting a reduction in manufacturing output. All of the three domestic manufacturers have lost ground to their Asian counterparts with Toyota being the better equipped to deal with the oil crisis selling record numbers of their Toyota Prius.
The rush is on, every vehicle now being developed by major automotive manufacturers are striving for increased gas milage and the government backed initiative for the hydrogen fuel cell has been touted as the savior for mass transportation.
What does this all mean you may ask?
The beauty of the hydrogen fuel cell is that it resolves a lot of issues that are tied to the petroluem industry such as dependency on petroleum imports, poor air quality, and greenhouse gas emissions. The one hang up is the method in which to safely store and pump the hydrogen to the vehicle on a large scale, together with the infrastructure needed to make this an acceptable alternative.
There are several issues that have to be overcome before the acceptance of the fuel cell as a mainstream alternative. The cost of the system has to be reduced to make it comparable to existing technologies and reliability has to be the same as a conventional vehicle, lasting at least to 150000 miles. The size of the cell needs to be such that the distance per fill equates to 400 miles without compromising space. That being said, I think we are a long way off before hydrogen becomes accepted as a mainstream alternative, unless there is a revelation overnight.
While companies such as GM, Ford and DaimlerChrysler research this technology neither one of the domestic motor manufacturers is standing still. Each one is advancing their gasoline engines to push their milage into new territory. Take the new selection of General Motors SUVs, even though the recent trend is to shy away from this type of vehicle, the new Tahoe and Surburban both gain several miles per gallon over the previous 2006 model, quite impressive for a vehicle weighing over 5000lbs.
Needless to say, as the research continues to perfect the hydrogen cell we can expect better milage from future gasoline engines until the break through has been made for a competitive alternative. The dollar sign rules and to create an infrastructure to rival the petroluem monopoly will take considerable doing, leaving the majority of drivers at the mercy of the ever fluctuating gas price.
August 14th, 2006
On the wave of J.D.Powers and Associates 2006 Vehicle Dependability Study on August 9th, General Motors announced one day later that it will put into production the dramatic vehicle that they had on show at this years North American International Auto Show, the Chevrolet Camaro. The long awaited return of Chevy’s muscle car has prompted many an enthusiast to bombard the corporate Blog demanding its return.
Since the demise of the fourth generation Camaro in 2002 with a little over 42,000 units being sold, the pony car war was handed over to Ford Motor Company who now has the segment totally to itself with the Mustang. With Dodge expecting to bring to market its own vehicle, the Dodge Challenger in early 2009 to compete with the Ford Mustang what was GM to do. There can be only one answer, bring back the Camaro.
Rick Wagoner in his statement said, “The Camaro would commence production late in 2008 and be on sale in the first quarter of 2009.” The likelihood that the production vehicle will be very close to the concept will only wet the appetite for those already chomping at the bit. Couple this with improved fuel economy, better fit and finish and a rear wheel drive platform, things are certainly taking a turn for the better. Available in V6 or V8 format with stick or automatic transmissions. I can already see the next headline from the Pontiac brethren, “Where is our Firebird.”
With the Australian arm of GM, Holden, being the RWD specialists they will get the engineering task of bringing the Camaro to market with “no compromises” in the words of Bob Lutz, with North America getting the job of productionisation of the design. This can only be good news for everyone who is a diehard muscle car fan and no doubt in 2009, when the first cars come to market, we are going to see some extraordinary sale figures for both GM and DaimlerChrysler. Ford may be enjoying it’s solo existence as of now but those days are number as the pony war is soon to heat up.
August 2nd, 2006
As the rumors of the past week filter through, Peter Schreyer of Volkswagen/Audi fame is leaving the German company and heading to Kia to head up the Kia Global Design Operation. For Kia, this must be the coup of the century giving them the much needed credibility that is always hard to deliver in an environment of heavy weight car manufacturers. Kia’s quality and design language has improved dramatically over the last five years and couple this with a ten year warranty and market beating prices it’s hard to find a better deal. Now with Peter coming on board, his experience of Volkswagen’s no nonsense approach to quality materials and fit and finish will no doubt propel Kia to even greater heights.
With his new position he will be influencing the future design philosophy for Kia which can only have the competition more than a little concerned. I should imagine that we will be seeing a bolder more masculine looking Kia in the future rather than the cute Kia of today.
With the latest sales figures just released the momentum of the Korean manufacturing group Hyundai of which Kia is a part of, is in full swing, with the group enjoying a 3.7% rise in sales over the same period a year ago with July sporting a 4.5% increase in sales over the same period. With sales in an upswing what better time to bring on a new Design Chief, ensure the momentum, built confidence in the brand and pursue great new products. For me this is a totally different company to the one that I worked for in the early 90’s when it opened it’s first Design Studio in Southern California.
Today’s Kia has confidence, purpose in design and a resolve to become bigger, combine all these factors and it is only a matter of time before they will be snapping at the Japanese manufacturers heels, after all wasn’t it the same thirty years ago for domestic manufactures when Japanese cars started to make in roads to the Big 3’s domain.
Peter’s pedigree is unquestionable, graduating from the Royal College of Art in London, England, with a “Master of Transportation” design degree, chief designer for Audi, chief designer for Volkswagen. Worked on renown vehicles of today such as the Audi TT and the Audi A6, all in all Kia must be looking to the future with great anticipation.
July 1st, 2006
It was only a matter of time before the quirky little car company called Saab would be eaten up and put right by it’s domineering owner General Motors. Since General Motors took a 50 percent stake in 1989, Saab thought that this would be the end of it’s monetary problems allowing it to compete more in a global market. Unfortunately the company still lost money but the General was there to step in and purchase the other 50 percent making it a totally owned subsidiary of General Motors.
Now, since the beginning, Saab was an aircraft manufacturer only venturing into the automobile business when the sales for aircraft dropped considerably after the conclusion of World War Two.
As a car manufacturer the Design Center has always resided in Trollhattan, Sweden but as of June 30th 2006 at 15.06pm Trollhattan time (GMT +1) the Design Center official transfers to the new GM Design Europe facility in Russelsheim, Germany. This fact is confirmed by a long time friend and colleague, Mike Cartwright, who I have known for over twenty years. He had the unfortunate task as Studio Manager of wrapping up shop as we say.
The Saab has always been renown for its quirkiness but driver oriented design, especially before the acquisition by General Motors and many a traditionalist has decried the watering down of the fundamentals that make up the DNA of a true Saab. This may be true in some respect but if the take over had not happened would Saab still be a viable automotive manufacturer now.
In any event the move to Russelsheim may bring all European Brands for GM under one roof but can the unique identities still be kept separate. In todays extremely tough market, separate identities may be the only thing that keeps a brand alive, will this be the same for Saab after uprooting it from its homeland and from the people who know best.
June 28th, 2006
Here we go again, the vehicles are stacking up and after the bravado statement of, “We are weaning ourselves off of incentives and offering value pricing” the summer sell off is underway. General Motors is set to offer six years interest free on most of its 2006 inventory after stating that the sales for this year are down and business is slow. With the up and coming 2007 model year just around the corner we dare not be caught with excess vehicles, is the general concensus. Even existing 2007 models fail to beat the cut, with 3 years interest free being offered.
Last years offering was to offer the unprecedented, employees discount for everyone. By that token, this years sales are off by 30 percent compared with the same time last year. Even with the push to market of the 2007 Tahoe and Surburban with the new engine configuration for better fuel economy, sales are still floundering and market share is dropping at an alarming rate. The combined forces of the Asian counterparts, namely, Toyota Motor Corp. and Honda Motor Corp. who are enjoying record sales leading to a bigger slice of the market. What does that tell us, sales cannot be made without the extortionate incentives and as we all know, is the death of profit for any company.
What is the answer we ask ourselves, well for one, the obsession with large vehicles is not doing GM’s business case much good. In these times of $3.00+ gasoline prices, Joe on the street has had plenty of time to get use to the idea that it’s here to stay and I cannot see the price dropping very much in the very near future. The CAFE standard (Corporate Average Fuel Economy) has been increased in excess of 10 percent for light trucks for the model years 2008-11 to 24 mpg from todays standard of 21.6 mpg. What this means in real terms is, lighter trucks to get the better fuel economy hence maybe a shift in the safety aspect or a down sizing of the vehicle to get a better power to weight ratio for improved milage.
Either way the setting is looking rather bleak. What about Ethanol you may well ask. OK, yes this is good, E85 is made from U.S. grown corn 85 percent ethanol, 15 percent gasoline but wait, where is the infrastructure. Yes, we have approximately 750 filling station from about 170,000 total nationwide. GM that certainly satisfies the alternative fuel problem.
So, back to the point, premium mid/small cars are needed with an emphasis on fit and finish that oozes quality. No sharp edges on tail lights, spend the extra bucks to make the tooling that allows a small radius to finish off the edges on the lamps, just like the Asian and Europeans do. The same goes for the interior treatment, no sharp razor edges. I don’t want to have to tell my children not to stick their fingers around the tail lamps or play in the pockets for fear of sharp edges. Ensure real quality and not perceived quality.
Once that is achieved, then the playing field becomes smaller and then maybe a REAL chance of getting off the incentive bandwagon and making a profit.
What product type do you feel is needed in the portfolio that will make the likes of Ford and GM become more competitive again?
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