GRAMPS SS
04-12-2009, 03:54 PM
This was pulled off YAHOO.................
The American auto industry is hanging by a thread, with the fate of General Motors and Chrysler largely in the hands of the federal government. Taxpayer loans are keeping them alive for now, but their long-term success will depend on whether they have the cars and trucks that people desire.
Detroit's record on that has been spotty--witness the awful Pontiac Aztek or the subpar Chrysler Sebring--which is one reason car companies are in the mess they're in now.
But for every dog Detroit has tried to push on the American people in recent years, there have been clear winners too: The new Chevrolet Malibu, for instance, tops the Honda Accord and Toyota Camry in fuel efficiency and independent quality surveys. The bold rear-wheel-drive Chrysler 300 generated buzz that Chrysler hadn't experienced in years. And the new 41-mpg Ford Fusion hybrid is the most fuel-efficient mid-sized car in America. (Toyota's new 2010 Prius, at 50 mpg, is considerably smaller.)
And despite the beating Detroit has taken in recent months for its focus on gas-guzzling trucks, Ford Motor's F-150, Chrysler's Dodge Ram and GM's Chevy and GMC pickups are still extremely popular and will remain an important source of profits for the foreseeable future.
U.S. carmakers really can make world-class vehicles that consumers want (though the public hasn't always given them credit for it). They'll need every ounce of that capability to pull themselves out of their current tailspin.
But it's not just consumers that Detroit automakers have to please; now they have to satisfy the government's policy objectives too. And what the Obama administration and the Democrat-controlled Congress want--more hybrids and fuel-efficient small cars--are not necessarily what the public is willing to pay for. Fuel-efficient technology is expensive; if consumers won't pay extra for it, carmakers will have to sacrifice profits, which will only make their recovery more difficult.
President Obama's auto industry task force acknowledged as much in its assessment of GM's viability when it referred to the most prominent car on the horizon for GM, the Chevy Volt. Due in November 2010, it's a plug-in electric car that can go 40 miles on a single charge, before a small gasoline engine kicks in to recharge the battery.
"While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable," the panel said.
Everyone knows the Volt will not save GM financially, according to John Wolkonowicz, automotive analyst at IHS Global Insight. But it's critical to the company's future, he says, because "it showcases to the world what GM is able to do."
"The car that's going to save GM," suggests automotive consultant James Hall, of 2953 Analytics in Birmingham, Mich., "is the Chevy Cruze, and the derivatives that will come off it."
The Cruze is a fuel-efficient compact designed in Korea that will sell in markets throughout the world. It goes on sale in North America in the first half of 2010. A small seven-passenger van built off the same platform, the Chevy Orlando, is expected a little later. By selling in huge volumes, perhaps as many as 1.7 million worldwide, the Cruze family could allow GM to be profitable on small cars for a change.
Like GM, Ford's future is also tied to world-class small cars like the upcoming Fiesta and Focus, designed in Europe, and to advanced engine technology. Ford's direct injection, turbo-charged Ecoboost engines allow motorists to achieve 20% to 30% better fuel economy without sacrificing performance. By 2013, Ford says Ecoboost will be available on 90% of its lineup, including the next-generation 2011 Ford Explorer, due next year.
2011 Chevrolet Cruze"The Explorer is maybe the best example of what will make them successful," says Wolkonowicz. "Give consumers everything they want, plus the better fuel economy the government is demanding. You're not likely to get that anywhere else."
For Chrysler, the future is a lot sketchier. Obama's task force didn't buy Chrysler's argument that it's viable as a stand-alone company. It has given the company until April 30 to reach an alliance with Italy's Fiat SPA, or face liquidation.
Fiat could provide Chrysler with the small-car technology and fuel-efficient engines it lacks. Its 500 minicar, MiTo subcompact and Lancia Delta compact are good candidates for shared technology. The problem is that no Fiat-engineered vehicle can come out of Chrysler's North American factories before mid-2011. In the meantime, there's not much on the horizon that can reverse Chrysler's sales nosedive, down 49% so far this year, following a 30% drop in 2008.
"By 2011 there are a lot of new products coming, and you'll be seeing the best lineup these companies have had in their history--if they can just span this miserable period we're in right now," says Wolkonowicz .
Five Cars That Can Save Detroit
1. 2011 Chevy Volt
2. Chrysler 200C concept
3. 2010 Buick Lacrosse
4. 2010 Ford Fusion hybrid
5. 2011 Ford Fiesta
6. 2011 Chevy Orlando
7. 2011 Ford Explorer
8. 2011 Chevy Cruze
9. 2010 Ford Focus
10. Fiat 500
The American auto industry is hanging by a thread, with the fate of General Motors and Chrysler largely in the hands of the federal government. Taxpayer loans are keeping them alive for now, but their long-term success will depend on whether they have the cars and trucks that people desire.
Detroit's record on that has been spotty--witness the awful Pontiac Aztek or the subpar Chrysler Sebring--which is one reason car companies are in the mess they're in now.
But for every dog Detroit has tried to push on the American people in recent years, there have been clear winners too: The new Chevrolet Malibu, for instance, tops the Honda Accord and Toyota Camry in fuel efficiency and independent quality surveys. The bold rear-wheel-drive Chrysler 300 generated buzz that Chrysler hadn't experienced in years. And the new 41-mpg Ford Fusion hybrid is the most fuel-efficient mid-sized car in America. (Toyota's new 2010 Prius, at 50 mpg, is considerably smaller.)
And despite the beating Detroit has taken in recent months for its focus on gas-guzzling trucks, Ford Motor's F-150, Chrysler's Dodge Ram and GM's Chevy and GMC pickups are still extremely popular and will remain an important source of profits for the foreseeable future.
U.S. carmakers really can make world-class vehicles that consumers want (though the public hasn't always given them credit for it). They'll need every ounce of that capability to pull themselves out of their current tailspin.
But it's not just consumers that Detroit automakers have to please; now they have to satisfy the government's policy objectives too. And what the Obama administration and the Democrat-controlled Congress want--more hybrids and fuel-efficient small cars--are not necessarily what the public is willing to pay for. Fuel-efficient technology is expensive; if consumers won't pay extra for it, carmakers will have to sacrifice profits, which will only make their recovery more difficult.
President Obama's auto industry task force acknowledged as much in its assessment of GM's viability when it referred to the most prominent car on the horizon for GM, the Chevy Volt. Due in November 2010, it's a plug-in electric car that can go 40 miles on a single charge, before a small gasoline engine kicks in to recharge the battery.
"While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable," the panel said.
Everyone knows the Volt will not save GM financially, according to John Wolkonowicz, automotive analyst at IHS Global Insight. But it's critical to the company's future, he says, because "it showcases to the world what GM is able to do."
"The car that's going to save GM," suggests automotive consultant James Hall, of 2953 Analytics in Birmingham, Mich., "is the Chevy Cruze, and the derivatives that will come off it."
The Cruze is a fuel-efficient compact designed in Korea that will sell in markets throughout the world. It goes on sale in North America in the first half of 2010. A small seven-passenger van built off the same platform, the Chevy Orlando, is expected a little later. By selling in huge volumes, perhaps as many as 1.7 million worldwide, the Cruze family could allow GM to be profitable on small cars for a change.
Like GM, Ford's future is also tied to world-class small cars like the upcoming Fiesta and Focus, designed in Europe, and to advanced engine technology. Ford's direct injection, turbo-charged Ecoboost engines allow motorists to achieve 20% to 30% better fuel economy without sacrificing performance. By 2013, Ford says Ecoboost will be available on 90% of its lineup, including the next-generation 2011 Ford Explorer, due next year.
2011 Chevrolet Cruze"The Explorer is maybe the best example of what will make them successful," says Wolkonowicz. "Give consumers everything they want, plus the better fuel economy the government is demanding. You're not likely to get that anywhere else."
For Chrysler, the future is a lot sketchier. Obama's task force didn't buy Chrysler's argument that it's viable as a stand-alone company. It has given the company until April 30 to reach an alliance with Italy's Fiat SPA, or face liquidation.
Fiat could provide Chrysler with the small-car technology and fuel-efficient engines it lacks. Its 500 minicar, MiTo subcompact and Lancia Delta compact are good candidates for shared technology. The problem is that no Fiat-engineered vehicle can come out of Chrysler's North American factories before mid-2011. In the meantime, there's not much on the horizon that can reverse Chrysler's sales nosedive, down 49% so far this year, following a 30% drop in 2008.
"By 2011 there are a lot of new products coming, and you'll be seeing the best lineup these companies have had in their history--if they can just span this miserable period we're in right now," says Wolkonowicz .
Five Cars That Can Save Detroit
1. 2011 Chevy Volt
2. Chrysler 200C concept
3. 2010 Buick Lacrosse
4. 2010 Ford Fusion hybrid
5. 2011 Ford Fiesta
6. 2011 Chevy Orlando
7. 2011 Ford Explorer
8. 2011 Chevy Cruze
9. 2010 Ford Focus
10. Fiat 500