Losing the War on Relevancy!

While Ford is busy shutting down it's truck & SUV production lines to make room for manufacturing the new euro-based Focus and world car Fiesta, GM is busy stumbling along in a fog of ineptitude.

I'm no Ford fan-boy, but when they saw that their Focus was selling like hotcakes while their F-150s (once their staple) languished on lots all over America they were fast to react.

General Motors on the other hand is anything but.

Their stocks have been falling at an unprecedented rate, and have recently traded below $9 which is the lowest they've been in 50 years.

Earlier this week they announced sweeping cuts to reduce costs, as well as major cuts (300,000 units less by 09) to truck production. Up to this point, it all makes sense. Then they lose the plot...

In April of last year (2007) Chevrolet unveiled 3 compact concept cars at the New York Auto Show. Yes, that is New York, as in... the United States. GM then created a website for the Triplets, urging the American public to vote on which was their favorite. Heck, they even managed to get the all-important product placement. The Beat (which won the online vote) will make an appearance in the upcoming Transformers movie sequel, much like the coming (one day... soon... eventually... or so they say) Camaro did in the first film.

With the North American automotive market in the state it's in, surely now would be the perfect time to release that Beat (and even it's siblings!) to the American car-buying public. Small cars are selling faster now than ever. MINI can't keep cars on the lots, Toyota and Honda are both into single digit inventory days for their sub compacts, and many other automakers like Mazda and Ford are working hard and fast to get their smallest world cars selling on this continent.

So what about GM and the Beat?

Well, they're planning on having it for sale in Europe next spring.

But according to Bob Lutz, GM's "car czar", GM didn't intend for the Beat (or Spark as it will be called in Europe) to be offered in the U.S., so it doesn't meet federal safety and crash standards. He says it would take too much money and about two years to bring the Beat up to snuff for sales in the U.S., and therefore it wouldn't be coming to the U.S. until the next generation arrives...

WHAT?!?

A "generation" in cars years is about 5 or 6 years at least. If Europe is only getting the new car in 2009, that means North America won't see a Beat (Spark, whatever) until 2015. And all because they didn't think that maybe it was time to design a car to be sold globally?

With that kind of brains at the helm of GM it won't even be around long enough to sell the next generation.

And just who were the marketing genius's that decide to release and promote the Triplets in the USA, while never having any intention of actually selling them here?

So, what is GM planning for the North American automotive market? Well, according to Lutz, they've got some new compact SUVs coming this fall. That's brilliant! Just what we need... even more trucks! Really, I'm being totally serious. While the rest of the world is getting sub-compact Beats that get great fuel mileage and are having their tedious old Cobalts replaced with the new Cruze (which gets 40+ miles per gallon, versus the Cobalts low 30s) we here are stuck with Aveos and Cobalts, neither of which is especially economical or even nice to look at.

Aren't we lucky?

But wait, GM will have another relevant vehicle for sale soon... the Cadillac Escalade HYBRID!

Car Buyers More Interested in Gadgets Than Fuel Efficiency

According to the results of a J.D. Power & Associates study released yesterday, hybrid technology vehicles rank pretty high among consumers interest. In fact, 72% of people asked said they were "definitely/probably" interested in hybrid technology. However, once they were told that this technology would add about $5000 to the price of their vehicle, the number if still interested buyers dropped to 58%.

What ranked higher than the fuel efficiency of a hybrid though? Blind-spot detection technology at 76%, and back-up assist at 74%.

Oh great, that's just what the world needs... technology to help incompetent drivers pay even less attention to what they're doing behind the wheel.

Here's what I think of that:


Unless they're installing KITT in my dash, I don't not want my car thinking for me.

But I digress.

I have to wonder where they got the $5000 "average" from though. When I first read the report it seemed awfully cheap compared to the hybrid premiums I've seen, but I figured those were the price differences in American dollars for the American sold cars. So, I did a quick check across a few of the cheaper hybrids in Canadian dollars and came up with the following:

-Honda Civic Sedan:
Conventional: $19,490.00 (w/AC+automatic)
Hybrid: $26,350.00
Difference: $6860.00

-Toyota Camry:
Conventional: $23,400.00 (w/AC+automatic)
Hybrid: $30,660.00
Difference: $7260.00

-Toyota Prius vs Toyota Corolla: (since the Prius doesn't have a conventionally propelled equivalent I'm comparing it against the Corolla, which is Toyota's closest offering)
Corolla LE: $19,900.00 (w/AC+automatic)
Prius: $29,500.00
Difference: $9600.00

Toyota Highlander:
Conventional: $36,900.00
Hybrid: $41,075.00
Difference: $4175.00

Chevrolet Malibu:
Conventional: $22,995.00
Hybrid: $26,995.00
Difference: $4000.00

Chevrolet Tahoe LT:
Conventional: $47,155.00
Hybrid: $66,125.00
Difference: $18,970.00

That's an average premium of nearly $8500.00. While the MSRP for cars in Canada is always higher than in the US, their estimated $5000.00 for the added cost of a hybrid still seems a little low.

One interesting detail I noted while compiling those numbers was that while a Civic Hybrid costs nearly $7000 more than a similarly equipped conventional Civic, the fuel savings are in the range of 30%. If a Civic owner drives 25000 kms per year (~15000 miles) that's nearly $1000 in savings each year at current fuel prices. The Chevy Malibu, on the other hand, only costs $4000 more for the hybrid, but the fuel efficiency is less than 8% better. That's only about $250 per year saved. Honda's hybrid premium pays for itself in 7 years, while Chevrolet's takes about 16 years. (I really hope those buyers are choosing a hybrid to "make a statement", and not to save money...)

Sadly, of all the different features and options mentioned in the survey, clean diesel ranked last. Why? I'm not sure. I mean, who wouldn't want 50+mpg from a conventional (read: simple & uncomplicated) drivetrain?

As Mike Marshall, J.D. Power & Associates director of automotive emerging technologies, said:

One explanation for this may derive from a lack of education with the technology. Many consumers cannot differentiate between clean diesel and traditional diesel fuel—which in the past had a negative connotation with unpleasant vehicle emissions. As consumers become more educated in the benefits of clean diesel through increased product offers launching later this year, interest in the technology may increase.

I suppose the European companies that are starting to make this technology available in North America have along road of re-education ahead of them. The masses are still stuck on the old stereotype of diesels being noisy, smelly, and generally a nuisance. It's a stigma that may take a while to be rid of.

You can read the full report HERE.