April 2, 2008

The Biz. From "The Sky is Falling" File, comes word that March sales were in the dumper (no big surprise), and with no relief in sight it's shaping up to be a grim spring and summer. Toyota sales were down 10.3 percent. For the record, that makes seven out of the last nine months of downward sales for "The Juggernaut," which hasn't happened in 25 years. Chrysler sales were down 19.4 percent. GM, down 18.7 percent. And Ford sales were down 14 percent. Even though there were two fewer selling days, March was u-g-l-y. Bright spots? The Ford Edge is selling well in California (an encouraging sign), and the new Ford Focus was up more than 30 percent in March. GM's Buick Enclave-GMC Acadia-Saturn Outlook trio performed nicely, as did the Chevrolet Malibu and Impala. Other than that, the car biz is reeling, and it will get worse before it gets better.

Toyota. The Japanese automaker's conquer-the-world growth plans have been derailed by the swooning economy in the U.S,. and the dreaded "O" word - for overcapacity - is now becoming part of the Toyota lexicon. The good news, at least for Michigan? the automaker is pumping another $100 million into its existing complex outside Ann Arbor to do research on safety and efficiency.

Porsche. For the company formerly known as a maker of exclusive sports cars, March was a heapin', steamin' bowl of Not Good, with sales down 24.7 percent.

Saturn. Publisher's Note: It's clear that Saturn as a brand within the GM solar system is in trouble. What once seemed like an embarrassment of riches when it came to new product coming on-line - what with the totally revamped VUE and the full-size Outlook crossovers, the handsome Aura sedan and the new Astra small car - Saturn looked poised to make some real noise in the U.S. market. But the reality of GM marketing having to juggle eight divisional brands in the air is killing Saturn. The Aura is lost in the Malibu's white-hot glow, the Outlook is MIA compared to the Buick Enclave, the excellent VUE deserves much more attention, and the Astra's tenure in this market will be short-lived if the dollar stays where it is. With a new ad campaign blitz about to bow for Saturn, one tough issue remains: If the corporation can't afford to support and sustain the new products Saturn has, then maybe its time to rethink Saturn's product future altogether. It's ironic that the division that was once wandering around lost in the wilderness starved for new product finally finds itself with a very competitive vehicle showroom, yet it can't gain traction in the market because it doesn't have the marketing firepower to get it done. Not Good is an understatement. - PMD

GM. What, no tribute ad on the occasion of Hal Riney's passing last week? He not only put Saturn on the map, without "Spring Time in Spring Hill" there probably wouldn't even be a Saturn today. A missed opportunity.

The UAW. As the UAW's strike action against American Axle goes into its fifth week idling or slowing 30 GM plants, the company puts feeler ads out in newspapers and on-line for replacement workers - and proceeds to get inundated with job applicants. The union actually naively believes that it and its members could never be replaced. Think again.

Japan, Inc. In the March 24 issue of BusinessWeek, Jim Press, vice chairman and president of Chrysler LLC and a former board member at Toyota was quoted as saying, "The Japanese government paid for 100 percent of the development of the battery and hybrid system that went into the Toyota Prius." A Toyota spokesman issued a denial today saying: "I can say 100 percent that Toyota received absolutely no support - no money, no grants - from the Japanese government for the development of the Prius," Toyota spokesman Paul Nolasco said. Well, which is it? We told you Press can change his stripes at the drop of the hat, and now that he's "Captain America" in his new role at Chrysler it wouldn't be beyond him to exaggerate to make a point. The Japanese government's close links with its auto industry, however -  particularly with Toyota - are well known, so we're choosing to believe Press on this one. It may not have been "100 percent," but it sure as hell wasn't a passive role either.

The Motor Press Guild. Publisher's Note: I heard from an old friend today - Chuck Koch - who is now the Executive Director of the Motor Press Guild out in Los Angeles, and he relayed a timely summation from the MPG's regular monthly lunch meeting, which took place yesterday. The subject? A panel discussion on Automotive Design featuring the heads of the major transportation design schools: Stewart Reed, Transportation Design Department Chair, Art Center College of Design; Tom Matano, Executive Director, Academy of Art University; and Mark West, Interim Transportation Department Chair at the College for Creative Studies. The panel (which was moderated by Eric Noble of The Car Lab) was asked before hand to rate the four qualities that are important in design and which companies are doing the best job in meeting these qualities.

First, the four qualities in the order of their ranking by the panel:

1) Innovation and Originality, 2) Beauty, 3) Strategy, and 4) Brand Fit.

And how did the panel think the various manufacturers did in meeting these qualities?

Innovation, Top 3: BMW/Mini, Mazda, and VW. Bottom 4 in no particular order were Mitsubishi, Chrysler, Subaru, Suzuki.

Beauty, Top 3: Aston Martin, Ferrari, BMW. Bottom 4 - Chrysler, Mitsubishi, Subaru, Suzuki.

Strategy, Top 3: BMW/Mini, Porsche, Ferrari. Bottom 4 - Chrysler, Mitsubishi, Ford, Suzuki

Brand Fit, Top 3: BMW/Mini, Porsche, Ferrari. Bottom 4 - Chrysler, Mitsubishi, Ford, Suzuki

So, if design is the essence of the machine, then Chrysler, which just a few short years ago was on the top of the design world, has completely fallen off the radar screen, according to the three leading educators who are training the next generation of auto designers. And it's clear that Jim Press (forgetting Bob Nardelli altogether since he isn't even remotely qualified) doesn't have the tools to pull up on the yoke before auguring in.
- PMD