Tag Archives: auto industry

Alleged Unfair Dealings At Chrysler Grow

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A new dealership group know as “California Superstores” is buying up former Chrysler dealerships in California as a way to beat the high cost of real estate and rebuild Chrysler’s slow market in the United States. Complaints from existing Chrysler dealers say that the alliance between Chrysler and the New York Hedge fund is leading to an unfair advantage for existing dealerships. They have alleged that Chrysler is providing below market rent subsidies that have not been offered to them. Peter Welch, president of the California dealers association, said he is unfamiliar with the terms of the California Superstores venture, but has heard many concerns among existing Chrysler dealers.

California Superstores has already opened six stores in California, and plans to open eight more in areas where Chrysler has done poorly. The plan is to eventually open stores on the East Coast, according to Carlos Hoz de Vila, managing partner of California Superstores.

In an unrelated situation, the state dealers association has brought forward complaints against Chrysler, saying that they are operating an illegal factory owned store at Motor Village L.A. in downtown Los Angeles. The California New Motor Vehicle Board has asked the state Department of Motor Vehicles to investigate the complaint.

Chrysler has recently announced that they have paid back $7.5 billion in government loans allowing them to continued their integration with Fiat, a merger that has been in the making for almost two years now.

Fewer Cylinders Now Offer More Power

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In April of 2010, when the Department of Transportation (DOT) and the Environmental Protection Agency (EPA) came out with their national greenhouse gas emission standards, there were concerns about how the new requirements would be received. It was expected that automobile manufacturers would turn to more efficient conventional technologies, while others would go one step further and pursue more advanced fuel saving technologies like diesel, hybrid and electric vehicles. Today, with gasoline prices on a steady rise, Americans are demanding that their new cars not only meet, but exceed the standards set by the government. Because some consumers are still skeptical of the new hybrid and electric technologies, many have chosen to trade in their V-6’s for more fuel efficient four cylinder engines.

Four cylinder engines now account for almost 65% of all vehicles built in the U.S., Canada and Mexico. This is the biggest shift since the 1980’s when consumers traded in their V-8’s for the smaller V-6 engines. It is expected that within the next five years, over half the vehicles in the U.S. will be four cylinder engines. But todays consumers don’t have to give up power to drive the smaller engine vehicles. New technologies have left the underpowered four cylinder engines a thing of the past, and automakers have changed their marketing strategies to focus on the horsepower and fuel economy instead of the number of cylinders a vehicle has.

Ford new generation Explorer will soon offer two liter four cylinder “Eco Boost” engine and are already working on a 1.0-liter, three-cylinder engine.

BMW, who has not built a four cylinder engine in the U.S. for over a decade is now offering their customers the new Z4 sports car scheduled to go on sale this year, and have also been working on a three cylinder engine.

Hyundai has almost abandoned anything bigger than a four-cylinder, which accounts for nearly 90% of its U.S. sales.

And finally, automobile manufacturers like Honda, Toyota and Nissan, who were once criticized for their small powerless vehicles, are now leaders in the new fuel efficient, environmentally friendly technologies.

New Fuel Economy Window Stickers

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The Environmental Protection Agency (EPA) and the Department of Transportation (DOT) unveiled their new fuel economy window stickers on Wednesday, saying that the new stickers will show the most changes in thirty years. The new labels will allow consumers to compare conventional cars, hybrids and all electric vehicles, giving information on greenhouse gas ratings, emissions, smog ratings, and fuel costs. The new stickers are scheduled to appear on the new 2013 models, but automakers have the option to start using them on on 2012 models as well.

Federal regulators had originally considered using a letter grading system from A to D, comparing fuel economy and air pollution to those of the entire fleet of new cars, but automakers objected, saying that the stickers were too simplistic and potentially misleading to automobile consumer’s. The government instead decided to go with a much busier label with more information and a sliding scale comparing vehicles across classes. According to transportation secretary, Ray LaHood, “These labels will provide consumers with up-front information about a vehicle’s fuel costs and savings so that they can make informed decisions when purchasing a new car.”

The label will also include a Quick Response Code (QR Code) that can be scanned by a smart phone to get information on cost estimates based on a consumer’s driving habits and the price of gasoline and electricity of their area. This information will also be accessible to vehicle shoppers online.

California Hybrid Owners Carpool Privileges

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California has always been a leader in environmentally friendly living. In 2004 we were one of the first to pass a law restricting vehicles’ greenhouse gas emissions and since then the legislation has been extended twice. One of the stipulations of the legislation gave almost 85,000 hybrid owner access to drive in the carpool lanes. On July 1, these get out of traffic free cards are about to expire, and this has hybrid owners protesting

Since the inception of the law, the amount of hybrid, and now electric vehicles on the road have significantly increased. This increase is starting to make car pool lanes more congested especially in the state of California where the percentage of hybrid is now well over 24%. According to state senator, Fran Pavley, one of the original sponsors of the legislation, “An extension of the carpool lane privileges in unlikely to bear fruit.” She says that taking away these privileges ranks right up there with taking away someones firstborn. She added that the legislation should be extended for at least one more year since vehicles that qualify for the new green sticker program do not go on sale until next year.

California Hybrid carpool privileges

NHTSA Investigates Ford Freestyle SUVs

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The National Highway Traffic Safety Administration (NHTSA) has opened an investigation into Ford Motor’s Freestyle crossover SUV after receiving almost 240 complaints of unintended lunging. Reports filed with the NHTSA say that the vehicles lunged forward at low speeds when the driver’s foot was not on the accelerator pedal. 18 of the reports claimed to have resulted in an accident, including one with minor injuries. Owner said that the problem seemed to have worsened when the vehicles’ air conditioning was turned on or the steering was turned sharply. Spokesperson for the Michigan based automaker said that, Ford will fully cooperate with the NHTSA in an attempt to rectify the problem. The investigation will include about 170,000 Ford Freestyle SUV’s, of the 2005 to 2007 model years.

Saab Automotive Future Questionable

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The future of Saab is once again being questioned after negotiations between Spyker Cars and China’s Hawtai Motor Group were terminated. Saab hoped that money obtained through the million dollar agreement, would allow Saab to reopen their Sweden factories, which have been closed since April due to lack of credit from suppliers. Hawtai confirmed that talks have fallen through saying that both sides were unable to reach an agreement in the allowed time frame, but hope that negotiations will continue. The lack of consensus of the deal is being blamed on a hasty agreement put together by Spyker’s chief executive and chairman before full approval was obtained from its backers.

Spyker also continues to remain in discussion with another potential investor, the Russian businessman Vladimir A. Antonov. Negotiations between the two parties was blocked last year by G.M before they sold the Swedish automaker. Allegations of suspicious financial dealings was the reason for the breakdown of those negotiations.

Update

Things are starting to look better for Saab today as they signed a tentative deal with one of the largest publicly traded car distributors in China. The finance and import deal with Pangda Automobile Trade, comes after several negotiation collapsed with other potential Chinese partners. Under the agreement, Saab will receive $63 million for an unspecified number cars, plus almost $90 million for equity in Spyker Automotive, giving them some control in Spyker and Sabb management. The deal will include a joint venture to make and distribute cars in China under the Saab brand and a new brand not yet announced. According to Victor Muller, chief executive of Spyker and Saab, “The agreement is a tremendous boost for the company, allowing them to sell imported Saabs in China.”

Ford Uses Dandelion Rubber For Auto Parts

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Ford to use dandelion rubber for automotive partsFor most people, Dandelions are a pest, and many do what ever they can to get them get rid of them. The Ford Motor Company in conjunction with Ohio State University plans to turn this common weed into a replacement for synthetic rubber to be used for automotive applications such as floor mats, cup holders and interior trim.

Taraxacum kok-saghyz (TKS) is a Russian Dandelion or Rubber Root that has been used for its production of high quality rubber as far back as 1932. The Ohio State Agricultural Research and Development Center is growing TKS for Ford, hoping that the rubber produced will be durable enough for automotive applications. Before the Dandelion rubber can be used in automotive applications, Ford will test how it performs with different plastics to make sure it is durable enough. Ford has been experimenting with alternative building materials for automobiles for some time now. The company currently uses soy foam and wheat straw in seats and other components of its vehicles.

Small Cars Profitable For Auto Dealers

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During April, the sales of small fuel efficient cars made up almost 20% of the automotive sales market, that equates to a 19% increase from a year ago. Governments incentives to have more environmentally friendly vehicles on the road as well as rising fuel prices, has led consumers to re-think the buying of big trucks and SUV’s. Some of the big sellers include the new Ford Focus and the Chevrolet Cruze.

The overall industry is expected to report slightly higher sales, as the market continues to recover from the recession. Automobile and automobile part shortages as well as the lack of discounts will be a big factor in consumers decision to purchase new vehicles. Consumers may decide to keep driving their old vehicles until the deals return.