May 30th, 2006 by admin
Can GM breath some life into this struggling brand?
Recently, GM decided against scrapping its Saturn brand. Instead GM gave it a new image. Once again they face this same choice with their Pontiac brand. Pontiac sales have been declining and many see it as a dying brand.
GM still thinks it has some life left in it. Just like Saturn, Pontiac will get an image make over. They looked to modern European design to infuse Saturn with for new life, but they will take a different approach with Pontiac. They will look back into Pontiac’s past. Pontiac’s new focus will be providing high performance rear-wheel-drive cars.
This plan, which is not final yet, will phase out the front-wheel-drive Pontiacs over the next two years. These will be replaces with rwd models. Some of these models will be brand new, while others will be rwd versions of current ones.
This move may reduce the volume sales Pontiac will incur, but GM is focusing on more streamlined line-ups from its brands.
GM is pressuring dealers to combine Buick, Pontiac and GMC franchises into single stores by cutting the brands’ product lineups.
GM is continuing to get its house in order as they restructure. Saturn and Pontiac are just two of their brands. Look for them to continue shaking things up until they get things turned around.
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May 29th, 2006 by admin
Problems and possible solutions concerning diesel engines.
Last week I discussed the possibility of diesel engines becoming more popular in America, this is something that has already happened in Europe. I mentioned one setback was the fact that diesels emit nitrogen oxides and emission standards in this country are continuing to crack down on those.
Some of these new standards will soon be taking effect and will most likely hurt Volkswagen, who is a leader in the area of diesel passenger cars. They will not be able to offer diesel versions of several popular models in 2007. However, they hope to be up to the standards by 2008.
In last weeks blog, I mentioned a few options for automakers to use when lowering nitrogen oxide emissions. Honda has just announced a patent for new technology to do just that.
In Honda’s treatment system, exhaust flows through a plasma reactor, or gaseous layer of electrically charged atoms, according to a U.S. patent obtained by Bloomberg News. That separates out harmful nitrogen oxides and forms nitrogen dioxide that’s then reduced or absorbed by alkali metals and silver.
It looks like the diesel models will have to stick to the other side of the Atlantic for now. However, in time they might make the jump to our shores in full force.
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May 26th, 2006 by admin
Used SUV prices are plummiting
Anyone with any sense knows that the automotive industry is not in the best of shape right now. And everyday it seems as things are getting worse. Yesterday was actually the first good news about the auto industry in a while. However, today we’re back to the problem with American auto makers.
Most of Ford and GM’s revenues come from large SUV sales, and with high gas prices, less and less people are buying used SUVs. This, in the long run will be detrimental to ford and GM, since they have such a high volume of large SUVs. The price for large SUVs has been declining extremely fast over the past few months because of high volume and high gas prices.
Ford Sales analyst said that he expects to see a double-digit percentage decline in 2006 for large SUV sales. So, what does this mean for the consumer? Well, it means if you’ve ever wanted a large SUV now is probably the time to buy one, or you can wait a few more months to see what will happens with the prices. However, I think by consumers not buying large SUVs we’re showing auto makers we want more fuel efficient cars.
Honestly, Ford and GM should’ve seen this coming 10 years ago. It seems that foreign automakers saw it, so why were American automakers oblivious to this trend? Well, I’m not too sure, but I hope that they get the picture soon.
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May 25th, 2006 by admin
GM stocks are upgraded
On Wednesday, General Motors Corp. shares jumped. The shares jumped because an analyst upgraded GM’s stock to “buy” status. That’s where a company wants to be. GM’s restructuring model looks as though it is working. The restructuring of most companies is usually laying people off and GM is no different. GM will reduce its workforce by 30,000 by the end of 2008.
After the analyst announced the “buy” status, GM’s stocks rose $1.86 or 7.6% to $26.34 per share. Merrill Lynch’s John Murphy announced that the capacity reduction plan will boost shares by about $4 in the future.
Murphy more than doubled his 2007 earnings estimate to $4.10 from $1.90 and increased his 2008 estimate to $5.25 from $3.15. The increase also accounts for an adjustment for the portion of earnings from GM’s financial arm, which will be sold in late 2006/early 2007, Murphy said.
Hopefully Murphy’s estimates are correct ,and GM will pull out of this slump. That wold greatly boost the economy and maybe GM could higher some of its workforce back once it gets rid of the nasty overhead it’s having to deal with now.
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May 24th, 2006 by admin
Hillary Clinton proposes cut our addiction in half by 2025
Senator Hillary Clinton is pushing for a major reform with dependence on foreign oil; she proposes that we cut our dependence in half. That would be 8million less barrels a day, and she proposes that we should be at that point by 2025.
Now, there are two ways to interpret this “reform” of hers. We could say she is legitimately concerned about our dependence on foreign oil, or she’s making a political stab at George Bush. There is a small chance that she wants people to see that she has a date that we can look ahead to and marvel at and then realizes that not much has happened since GW announced his concern. And, do remember that she is one of the leading candidates for the Democratic nomination.
Nevertheless, she thinks that tax credits, private investment, and new research will push our country into a heavenly bliss when it comes to being dependent on foreign oil. She hopes that these incentives will help auto makers to bring more fuel efficient cars to the U.S. and help scientist make ethanol more useful.
The “new research” that she wants to occur would be in ethanol. Ethanol defiantly has a future in the U.S., but it’s taking a long time to become popular. Clinton wants ethanol gasoline or E85 to be in at least 50% of America’s gas stations by 2015. While this is a good goal, E85 currently is only at 1% of all America’s gas stations. If E85 was at 50% of all gestations in a few years, I can almost see this goal being met.
"Senator Clinton’s energy policy consists of a unique balancing act involving partisanship, political pandering and yesterday’s mistakes," said Tracey Schmitt, press secretary for the Republican National Committee. "Voting against meaningful legislation that would increase domestic production is harmful enough, but adopting the energy policies of the 1970s is a price Americans cannot afford."
Clinton also begged automakers to migrate toward higher fuel standards and incorporate more fuel flex vehicles. We have to realize, most of the technology is out there. Brazil already has a large majority of their vehicles running on ethanol. Why is it taking America so long to catch on?
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May 23rd, 2006 by admin
Ford to offer more all-wheel drive vehicles.
The Ford Motor Company lost $1.2 billion in the first quarter of this year but they don’t plan on staying down for long. They have big plans to make a splash in the AWD market. Right now Subaru is king of the hill when it comes to all-wheel-drive cars but Ford could challenge them for dominance.
Ford’s goal is to sell half a million by next year. This would definitely make them a major player in this area because the total sold for this year was only 1.5 million. Ford’s aim will be to capture the middle market. BMW and Audi, among others, offer AWD luxury models while Subaru has catered to the other end of the market.
The plan will bring all-wheel-drive to the company’s Ford Fusion, Mercury Milan and Lincoln MKZ mid-sized sedans in August and to the new Ford Edge and Lincoln MKX crossovers this fall. Ford already offers it as an option in other vehicles, such as the Freestyle crossover and the Five Hundred full-sized sedan.
Many drivers value AWD vehicles for their stability in harsh conditions and off-road terrain. Currently, most AWD vehicles are trucks or SUVs. Ford is hoping to attract these SUV buyers as some are turning to crossover SUVs based on car designs.
Ford is not the only automaker getting into this field. GM and Chrysler will offer new AWD options soon, although on a smaller scale than Ford. You might expect Subaru to feel some pressure now, but they seem to welcome the help to convert the masses to all-wheel-drive passenger cars.
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May 22nd, 2006 by admin
Can the diesel engine have success in the U.S. like in Europe?
Right now, 35% of the passenger automobiles sold in Europe have diesel engines. This number could grow to as much as 50%, during the next ten years. In contrast to these numbers, there is currently only one diesel passenger car available in the U.S. This would be the Volkswagen Golf TDI.
Diesels have flourished in Europe because of expensive gasoline and tax breaks for diesel. Many European governments promote diesel because it emits less carbon dioxide into the atmosphere. On top of lower fuel prices, diesel drivers experience increased fuel efficiency. The diesel engine is a more efficient design than the gasoline powered engine.
So, what’s stopping diesel engines from invading our cars here in America? It may still happen but there are a couple of obstacles.
First, diesel fuel is not cheaper than gas here in the States. We enjoy lower gas prices than our European friends, and our government does not offer the nice tax breaks on diesel like most European governments. Therefore, diesel is harder to come by and more expensive in the U.S.
The main reason for the tax breaks in Europe and lack of them here is a difference in the way we set up environmental standards for our vehicles. This is the second obstacle. In Europe the focus is on low carbon dioxide emissions but here in the States the EPA wants low levels of nitrogen oxides and particulates. This is because nitrogen oxides may be carcinogenic and particulates help form smog.
There are solutions to these environmental questions, but these as well as the diesel engine add to the cost of the automobile. This may keep buyers away. Tax breaks, like those in Europe, may be needed to entice buyers.
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May 18th, 2006 by admin
High gas prices are not scaring drivers as much as has been expected.
The so called experts have been expecting hybrids and smaller cars to knock SUVs off the throne ever since gas hit $3.00 a gallon. However, it is going to take more than that to dethrone the current rulers of the rode. After all, they are very big.
The SUV is alive and well today. In fact, it seems to be thriving. For example, Escalade sales were up 127% last month. These statistics do not show a nation of drivers fleeing from big vehicles into the arms of the hybrids.
This is a very different situation from 25 years ago. During the late 70’s early 80’s gas prices rose dramatically and there were shortages. This propelled people towards more fuel efficient cars. Apparently, today’s motorists aren’t as easily scared.
This can be attributed to a couple of reasons. First, the average household spends about half as much on gas, based on percentage of income, than in 1981. Basically, there are plenty of people out there with the means to pay for a lot of gas. Second, we have become a nation of SUV and truck drivers. It is going to take more than $3.00 a gallon to change this. Now, the experts are saying it will take $4.00 a gallon for a prolonged period of time to bring change, but as we are finding out, they have been wrong before.
The reign of the hybrids might have to wait a little while longer. For now, it is still long live the SUV.
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May 18th, 2006 by admin
Honda jump starts its plans for the future.
Honda is currently over half-way toward the deadline of its “2010 Vision.” This vision was first stated in 1998, and with only four years left the Japanese auto maker recently announced its plans to complete the process.
Honda’s 2010 Vision is a long-term corporate initiative "to become a company that society wants to exist." Initiated in 1998, this three-part 2010 Vision calls for the expansion of Honda’s global operations through the year 2010 through "creating new value" for the customer, expanding local operations through "glocalization" and advancing environmental and safety technologies through a "commitment for the future."
Honda has two main points of focus during the next four years. They will increase their presence in North America and further lower emissions.
To accomplish the first goal they will build new plants in the U.S. and Canada starting in 2008. Honda already produces 1. 4 million units in North America. These proposed expansions will bump that number up to 1.6 million. Even at this time almost 8 out of 10 Hondas and Acuras sold in North America are made here.
The other focus will be to lower emissions across the board on all of their vehicles. Honda already has the current lowest Corporate Average Fuel Economy (CAFÉ) but they are not satisfied. Their goal is to lower emission by 5% by 2010.
Honda has increased its North American sales for 9 straight years and it doesn’t look like they plan on breaking that trend any time soon.
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May 17th, 2006 by admin
Could ethanol be in NASCAR’s future.
If you pay close attention to auto news or have read this blog
in the recent past, you know about ethanol and it’s E85 blend. There are many reasons for consumers to jump on the ethanol band wagon. These include high gas prices, environment reasons, and the need to decrease our dependence on foreign oil. Sadly, only the first reason I mentioned holds any bearing over most consumers, and that may not be enough to see ethanol flourish in the near future.
Don’t get me wrong, Ethanol has been gaining supporters and popularity. In Brazil most passenger cars run on ethanol. Automakers are beginning to promote it more too. GM already sales flex-fuel vehicles that can run on gas or E85. However, it is still hard to find stations that offer E85.
Ethanol might be the way of the future but what it needs right now to help boost awareness is a celebrity spokesperson. How about spokes persons? As in the NASCAR drivers.
GM and Senator Tom Harkin have already asked NASCAR officials to consider the alternate fuel. The move would not be without precedent either. The Indy Racing League is currently moving towards ethanol. The move could also be very good for NASCAR’s image.
However, a switch to ethanol might not be in the near future for the popular racing league. NASCAR is just now moving away from leaded gasoline to unleaded. So, ethanol might have to wait a little longer for the spotlight.
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