When an automaker introduces a brand new vehicle, they always hype it as much as possible, and say how it will increase sales. For example, Brand X sells 200,000 vehicles per year. They introduce the brand new Ultra Mega Crossover, with a sales goal of 40,000 units per year. With this in mind, they expect / forecast sales of 240,000 vehicles per year. Makes sense right? Absolutely, one hundred percent wrong.

I’m going to use Nissan as a perfect case study. Very recently, Nissan introduced two brand new models – the Altima Coupe and the Rogue. Both models have done pretty well thus far. However, Nissan sales have been declining overall. Shouldn’t it be the opposite? Let’s take a look at who buys the Altima Coupe and Rogue.

The Murano is a pretty popular CUV – lots of folks want to be seen in one. The problem is the price – not everyone is comfortable swinging that large of a monthly payment. The Rogue is a perfect switch vehicle – 90% of the style for a fraction of the price. Over on the Altima Coupe side, the problem is similar. Buyers aren’t conquests from the Accord coupe. Buyers are would-be Altima sedan buyers – already one of the sportiest midsize sedans on the road. A switch to a coupe just makes sense.

Just because an automaker enters a new market, does not mean their numbers will go up. In-brand cannibalization is a huge concern, and one that manufacturers have a horrible habit of ignoring.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. New Models Don’t Always Mean Sales Increase is a post from: Houston Cars, home of the best darn car reviews around.

Agent009 at Autospies wrote an article yesterday called “What if Toyota Bought Chrysler?”  You can read it here. 

The gist is pretty simple, and Agent009 points out Chrysler’s excess production capacity as a benefit for Toyota, and the fact that Chrysler’s brands are more recognized as “American” brands, which could help Toyota cultivate their American Made image. 

Chrysler would benefit, of course, by having a new sugar daddy, since Daimler-Benz is getting tired of them quickly.  Toyota certainly has the deep pockets to absorb Chrysler’s prolific losses without blinking an eye.   But could Toyota actually turn Chrysler into a profitable enterprise? 

My thinking is, no.  Toyota has exactly zero experience in turning around a failing automotive empire.  Zero.  None.  Toyota has never, in it’s history, been in serious financial straits.  Turnaround is not their game – they simply don’t get into trouble – that’s their game.  If anyone *could* turn Chrysler around, then the answer isn’t Toyota, it’s Renault.  When Renault, and Carlos Ghosn, took over the failing Nissan brand, they performed a miracle, and Nissan is a thriving company today as a result.  That being said, Renault should steer clear of Chrysler as well.

Daimler will be looking to unload Chrysler, likely this year.  To whom, I have no idea.  Someone with a deep, burning desire to fail, and lose a lot of cash in the process, probably.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. What if Toyota Bought Chrysler is a post from: Houston Cars, home of the best darn car reviews around.

The Freestlye is getting an update for 2008, and supposedly better than ever.  My question is why?  Why on earth does the Free style exist?  It’s not that it’s a bad vehicle.  Boring, yes.  Bad, no.  It’s just that there doesn’t seem to be any room in the Ford lineup for such a vehicle.  The Edge has the stylish CUV market handled.  The Explorer has the 3-row midsize SUV side taken care of. 

What we really need is a new, exciting Explorer, not a third vehicle in a pretty crowded area.  I think what we’ll see is nothing more than cannibalism within the Ford mid-size SUV/CUV lineup.  Not good for Ford. 

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. Why does the Ford Freestlye exist? is a post from: Houston Cars, home of the best darn car reviews around.

The Truth About Cars came up with a list of the worst car names – and it’s a must-read.  My favorite is from Volkswagen

Volkswagen Touareg

Impossible to pronounce or spell correctly without lessons, this name takes the cake for being the most gratuitously recondite car name of the past 30 years – not to mention its unfortunate link to a slave-trading North African tribe.

There’s tons more to read – go check it out and have a laugh.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. Worst Car Names is a post from: Houston Cars, home of the best darn car reviews around.

Wisebread posted their 10 steps to buying a car from a dealership.  There is some good advice in here, but there is also some terrible advice.  Here’s his tips, and my take on each.

1. Research, research, research. – This one’s a bit of a no-brainer, but spot on nonetheless.  Do your homework before you go shopping.  Find out what you want, and what you feel a fair price is.  If you don’t, you’re just guessing, and you’ll probably end up paying more than you should.
2. What can you afford? - If you have a $20,000 budget, don’t look at Nissan Armadas and GMC Yukons.  It’s just not practical, and it’s a waste of time for everyone.  Even more, take this a step further.  Figure out your monthly budget.  If you can afford no more than $400 per month, again, don’t look at Yukons or Infiniti M45′s.  Be realistic about what you can afford to pay for every month.
3. Trading-in your old car – Here’s one of the big areas where Wisebread and I are on way different pages.  Wisebread recommends that you don’t mention the trade until you’ve already negotiated the deal on the new car.  This accomplishes only one thing – it will piss off the salesman that you’re working with.  In a previous life as a car salesman, I have asked customers to leave after pulling BS like this.  If you expect honesty and integrity from your salesman ( as you should ), you must be honest yourself.  If you don’t want to talk about the trade, say so – that’s fine.  Say that you’d rather discuss the trade after working out the price of the new car.  But don’t lie, all you’ll end up with is a pissed of salesman, and that doesn’t do you much good at all.  Oh, and your car is very unlikely to match up to KBB “Good” value.. especially if it’s a truck/suv in this down market.  Hondas and Toyotas are more likely to be very close.
4. Financing ahead of time – Yes, yes, yes.  If you have good credit and aren’t vastly upside-down in your trade, get financing ahead of time.  The blank check in hand is a powerful negotiating tool – it lets the dealership know that you can and will buy a car, right now, if you’re happy with the numbers.  They don’t have to worry about your credit at all.  That being said, give them the chance to earn your financing – they may be able to save you some cash.
5. The dealership, the sales staff, the horror. – Blah blah blah.  If you don’t like buying a car, don’t.  Keep driving that rustbucket that is breaking down all the time.  No one is forcing you to buy another one.  And please, on please, don’t bring the folder.  Salesman will run from you like vampires from daylight.  If you want an easy, no b-s experience, handle the beginnings of the business via the dealership’s internet department.  There, you can confirm availability, agree on price, and set up an appointment for a test -drive and contracting. 
6. IF IN DOUBT, WALK OUT. - Absolutely.  If you don’t feel comfortable withe deal, or you don’t feel the dealership is being honest with you, leave.  Walk away and don’t turn around.  There are plenty of dealerships around, so you don’t have to settle for an uncomfortable experience.  On the other hand, Wisebread is confused in a few areas.  I’m not aware of any ‘law’ requiring the dealership to show you the invoice.  I don’t get to see the invoice price when I buy a new washing machine.  If you’ve done your homework like you should’ve, you already know the invoice anyway.  And again, DO NOT wait until the end to mention your trade.  It will end badly.
7. The salesman, or woman, is not your friend. - True, though this is not to say he’s automatically a bad person.  His job is to get you to buy what he has to sell, right now, for as much as possible.  That’s his job, and the whole good cop/bad cop routine aids in this process.  Don’t buy it, but don’t hold it against him either.  He’s just doing his job.
8. Deal’s done. Off to financing hell. – Again, these guys are just doing their job.  If you want to buy an extended warranty, negotiate the price.  You should buy GAP, either from the finance office or your bank.  Either way, have GAP before you drive away ( unless you have equity in the car from a large down payment. )  Other than that, simply make sure the numbers match ( everyone makes mistakes )  and be on your merry way.  If you have your own blank check, financing doesn’t have to be an ordeal.
9. Check your vehicle. - Try to buy during the day if possible, so you can see any issues that wouldn’t show up at night.  This is important, because once you drive off that car is yours.  If there are issues, make sure you fill out a “we-owe” form, and have it signed by a manager.  Take your copy with you.  This will help you make sure that you get any problems resolved. 
10. Relax. – Well duh.  You just bough ta new car – ENJOY IT.

Overall, it’s a good list.  Just remember, DO NOT LIE to the salesman, sales manager, or finance manager.  You expect honesty, so give it.  If it’s not returned in kind, leave and go somewhere else.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. 10 Steps to buying a car is a post from: Houston Cars, home of the best darn car reviews around.

When does platform sharing cross the line and become badge engineering? We can all agree that platform sharing is a good thing – it allows manufacturer’s to keep costs down while offering a variety of vehicles. That means more choices at a better price.
We can also all agree that badge engineering is a very bad thing. Taking a vehicle, making only superficial changes, and then slapping a different badge on it does not a different vehicle make.

So, let’s look at an example of successful platform sharing. One that springs quickly to mind is Nissan, and their use of their FM platform. Currently the FM platform is the foundation of the Maxima, Murano, and Quest. Each of these vehicles is a distinct body style ( sedan, suv/cuv, and minivan ), and has it’s own personality. No one would confuse one with another, and shoppers aren’t likely to consider more than one of these vehicles.
Both the Murano and Quest are relatively low volume units, so they absolutely benefit from being able to use the Maxima platform, rather than needing one developed from scratch.

Now, for the other side of the fence – badge engineering. There are many blatant examples of badge engineering, but one that comes most readily to mind is from Daimler Chrysler. The Dodge Caravan and Chrysler Town and Country duo is one of the very worst offenders. The vehicles are both minivans, with the same equipment, similar pricing, same level of quality, and even remarkably similar styling. The two vehicles serve the same exact purpose and are targeted at the same exact market. There is simply no good reason for both to exist.

And that right there is what marks the difference between platform sharing and badge engineering. If there’s no major differences between the vehicles, and no reason for both to exist, they just shouldn’t.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. Badge Engineering vs Platform Sharing is a post from: Houston Cars, home of the best darn car reviews around.

Currently, the US government offers a tax credit on many hybrid models. As a general rule, the more fuel efficient the model is, the bigger the tax break. So you see tax credits as low as $650 for vehicles like the full-size GM pickup mild hybrids, all the way up to $2100 for a Honda Civic Hybrid.

Toyota once had the highest tax credits available on the Prius and Camry Hybrid, but due to limitations on the tax credit, Toyota’s incentives are dropping. The tax credits are based on volume of hybrids sold, and once a manufacturer passes 60,000 units, the tax credit begins to phase out.

Why do I care?

As consumers, we usually look for the best value. When comparing a hybrid model vs a non-hybrid model, the price difference is usually several thousand dollars. A $2000+ tax credit can ease that difference significantly, and make the difference in which vehicle we purchase. Take away that tax credit, and the math starts to get fuzzy… it will take longer to make up the price difference in gas savings, and many people will choose the gas only model. If there is a strong tax credit available on the hybrid vehicle, you may decide to purchase it. In doing so, you’ll save money on gas, and pollute less. I’m no green freak, but if we can spew less crap in the air without too much trouble, then great.

Use less foreign oil

Just turn on the television or surf to your favorite news site. You can’t help but hear that we as Americans use too much oil, and depend too much on foreign oil. Compounding the problem is the constant strife in the Middle East, one of our main sources of oil today. If the government helps people buy more hybrids, then people will buy less gas. Less gas means less oil, which means less money flowing to the most violent region in the world. It also frees up dollars for American consumers to spend in other areas, which will help spur the American economy. With the housing issues and energy prices the way they are, this will become more and more important in the coming years.

Auto Manufacturer’s can’t do it all

It’s often said that selling hybrids is unprofitable for automakers. Whether that’s true or not, I doubt that we’ll ever truly know. I don’t have access to their books, so we’ll have to take their word for it. If Honda loses money on every single Honda Civic Hybrid they sell, where is their motivation to produce more? If they build and sell more, that simply means they’ll lose more money. If they’re simply going after marketshare, they don’t have any room to offer pricing incentives, since the cars are already sold at a loss. In a nutshell, they have no room to maneuver.

Permanent tax credits can help

If the US government puts permanent, or more likely, long-term, tax credits in place for hybrid vehicles, that gives automakers some much needed assistance. With strong enough tax credits, automakers could raise hybrid prices slightly, enough so that they are profitable to sell. This will spur an increase in R&D dollars for even more fuel-efficient vehicles that the public will love. More variety will give us, the consumers, more choices when we’re going hybrid shopping. We won’t have to limit ourselves to goofy-looking tree-hugger mobiles. ( Though that’s not necessarily the case today, either. )

I don’t know if we’ll ever see long-term or permanent hybrid tax credits. But if the US government is serious about reducing our dependency on foreign oil, and I think they should be, then they should play ball. US citizens want to do the right thing ( it’s hidden deep-down at times ) , but they do need a little push. A tax credit won’t convince the guy who’s buying a Yukon XL to go the hybrid Camry route. But it may convince the guy who’s looking at the Altima and Camry. A hybrid of either model with a big fat, juicy tax credit may get him to come over to the other side. The US government needs to rewrite the hybrid tax credit program, quickly, and decisively.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. Why Hybrid buyers should get tax credits is a post from: Houston Cars, home of the best darn car reviews around.

2006 has been an interesting year for the automotive industry. I have a feeling that we’ll see some truly remarkable things in 2007, and I want it on record that I called it. So here’s my list of predictions for 2007.

Toyota will overtake Ford, then GM to become the largest automaker in the world

This is one that everyone has seem coming, but no one really wants to believe. Many think that Toyota will level out at number two, as if GM has some magic trick up their sleeve. They don’t, so ToMoCo will take the number one slot from them, and they will hold it for the foreseeable future.

Gas prices will skyrocket again

While it has been very very nice to enjoy ( reasonably ) low gas prices, at least compared to this past summer, it’s not realistic to expect them to stick around. Gas prices ( and of course, oil prices ) are very much driven by demand. Last time I checked, the demand for gas hasn’t been dropping. Don’t expect it to anytime soon either. That means gas prices will be on their way back up, and we should be prepared for it.

Hybrids will regain their lost popularity

Once gas prices came back down to earth, hybrids became more attainable. The waiting lists shrank, and the premiums over MSRP began to fade. It’s no longer entirely unrealistic to walk into a dealership, test-drive a hybrid, and purchase it that day for MSRP. With the expected gas price increase, expect hybrids ( though not the ‘performance’ variety ala Honda Accord Hybrid ) to begin to shine again. Get yours early.

Ford will part ways with Jaguar

This is something the Blue Oval has needed to do for a very, very long time. For whatever reason, Ford insists on keeping around this marque that just continues to bleed money year after year. If Ford can’t find someone willing to exchange cash for Jaguar, they should find someone willing to accept the burden. In other words, cut their losses and give the marque away. It’s better than continuing to add red ink to the bottom line each year.

Daimler-Chrysler will become Daimler-Benz and Chrysler, once more

Daimler-Benz made a devastating error when deciding to take over merge with Chrysler. As I have said for quite some time, Chrysler is the most troubled of the American automakers, even though for a long time they seemed the best off. Daimler-Benz is best to find a way to part ways with Chrysler, though it will be very difficult, and costly. Ultimately, it’s best to pay the price as soon as possible, cut their losses, and move on down the road. Well, best for Daimler-Benz, that is. Not so good for Chrysler.

Saab will continue to flounder

GM won’t sell off Saab. Yet, that is. For some reason, GM doesn’t want to admit that it made a mistake with Saab. For that reason, Saab will stick around, at least for another year. Bleeding red ink, and failing to be a meaningful brand.

Compact cars, not subcompact cars, will rule

Looking across most brands’ offerings, compact cars achieve similar, if not better, gas mileage when compared to their subcompact brethren. They also offer more space, comfort, and a higher level of safety. People will begin to shy away from the mini cars, and flock towards the slightly larger, small cars.

The full-size SUV market will continue to diminish

Not so long ago, full-size SUV’s were a niche vehicle. They served a specific need for people, and only the people who had those needs purchased one. Since then, of course, they have become a status symbol. The full-size SUV of today is a far cry from the one of 10 years ago – now you can get every luxury item imaginable. Even Lincoln and Cadillac have a full-size SUV in their lineup – who would have thought that? Now, with high gas prices looming over our heads, and the threat of global warming ever present, people are downsizing in record numbers. Instead of purchasing that Ford Expedition, maybe they go with an Explorer. People will skip the Suburban, and buy an Acadia. Increasingly, the large SUV is seen as a symbol of gluttony and excess, rather than status.

Hyundai will enjoy a strong sales increase

The increase will unfortunately be at the expense of the Big 2.5. Hyundai’s cars have been improving at fantastic speeds, and more people are taking notice. No longer is a Hyundai an unreliable, poorly made machine. Expect Hyundai to post big numbers in 2007. Kia, Hyundai’s sister brand, still carries a strong stigma of cheap and unreliable.

The year of the diesel

Will not be 2007. While some important steps are going to be made this year, with the low-sulfur fuel becoming available, and several manufacturer’s releasing 50-state emissions engines, we’ll definitely see more diesels on the road than in past years. The problem is the word diesel – most people are still afraid of it. When you mention diesel, many folks still think of a big honkin F-350 or Dodge 3500 pickup, with their massive, deafeningly loud diesel engines. As you and I know, this isn’t the case anymore. Diesel engines for commuter cars are nearly as quiet as gas engines, and they don’t have the horrid smell of the larger, older diesel engines.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. 10 Auto Industry predictions for 2007 is a post from: Houston Cars, home of the best darn car reviews around.

Wendelin Wiedeking, that’s King Porsche in case you didn’t know, whose company owns a little more than 27% of Volkswagen, is a bit delusional. He recently made a statement saying that he sees Volkswagen taking on Toyota – yes, he actually said that statement. Since Mr. Wiedeking didn’t elaborate much, let’s dig a little deeper here.

Volkswagen is a company with a very confused recent past and present. Long ago, they were known as makers of small, fuel efficient, inexpensive cars. The Beetle comes to mind ( Not the New Beetle, mind you. ) They were fairly successful in this area, and that’s why everyone knows their name today. One day, Volkswagen woke up and said “I’m going to be a luxury automobile brand!”

And behold, such cars as the $24,000 Jetta, the $40,000 Passat W8, and the $90,000 Phaeton were born. And the automotive world shuddered, and said WTF? There is also, of course, the many mechanical and electrical gremlins that plague just about every VW ever born.

Even the thought of a brand like VW ever approaching Toyota is simply ridiculous. I mean, WTF?

Source.

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. Volkswagen to beat Toyota? Not in this life is a post from: Houston Cars, home of the best darn car reviews around.

For quite some time, the focus of Detroit’s troubled present and future has been on Ford and GM – and rightfully so. They’re the 2 largest domestic automakers, and besides – Chrysler was taken over by merged with Daimler-Benz, so they have a German sugar daddy to take care of them. All along, I’ve been saying that Chrysler was in the woods right there alongside Ford and the General – and maybe they had it even worse ( as if that’s possible ). Why do I say that? Well, let’s take a look.

Chrysler is offering it’s dealers absolutely massive incentives to move leftover 06 product. When I say massive, I mean really, really big. As much as $7,000 – and that’s American dollars, not Canadian funny money. For every 06 Dodge Ram a Dodge dealer sells, Chrysler will send them a check for $7,000 – that’s no joke. I know, some of you are saying ‘ OMG that’s a great deal I always wanted to get me a Dodge pickemup truck yeehaw! ‘ But the rest of you are hopefully thinking that it’s the dumbest thing you’ve ever seen. How bad does your product have to be that you need to stroke a $7,000 check to your dealers for selling one? I mean, really. Chrysler will take an absolutely massive hit for this desperate attempt to reduce inventory promotion.

And that brings me to my next point – analysts are suggesting the big C may lose as much as $2 billion ( yes, with a B ) in the 4th quarter of this year. This is following a cool $1.5 billion loss in the third quarter – you’re going the wrong way guys! Anyone want to take bets on how long until Daimler-Benz tries to separate from this monetary black hole? I’d suggest that they sell it, but who in their right mind would pay money for Chrysler?

Hi there – could you help spread the word about Houston Cars? I could really use your help in getting my work out to new readers. If you would send someone a link, email, or even mention it to your friends, I would appreciate it. Chrysler on the rocks? is a post from: Houston Cars, home of the best darn car reviews around.