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Hyundai is Awesome. Even Honda Admits It!

Remember when Hyundai was a joke?

Remember when Hyundai was a joke?

When Japanese automakers entered the U.S. market, they changed the very fabric of the American auto industry. The cars they offered were small, inexpensive and quickly built a reputation for reliability that exists to this day.

Toyota, Honda and Nissan happily took market share away from the U.S. automakers and never looked back.

Today though, the Japanese are forced to glance backwards because South Korean automaker Hyundai is storming forward and steadily taking customers away; just as Japanese companies did to the U.S. automakers.

The irony comes full circle with this quote from Honda CEO Takanobu Ito:

Hyundai is awesome. They are undoubtedly a threat because their products are cheap, and the quality is improving.

To say Hyundai’s quality is “improving” is like saying the Pittsburgh Steelers are Super Bowl contenders. Hyundai isn’t improving, the company has improved to the point where I believe it could build a better Honda than Honda does.

Toyota’s chief even went so far as to say that his company is “grasping for salvation” and is in the final stages of corporate decline.

While that may be a bit of an exaggeration, Nissan’s senior vice-president Shiro Nakamura compared the whole situation to food by saying,

We have to offer the equivalents of sushi, tempura and kaiseki to compete against Korean barbecue.

I think what he was trying say, in a really weird way, is that Japanese automakers need to find a way to make sure consumers see the value in paying more for Japanese cars. I’m not sure that’s a winning proposition, as this Great Recession will only motivate more buyers to look for long-term value and reliability.

That’s an equation Hyundai has a very firm grasp on.

Will Hyundai continue its rise and overcome Japanese automakers? I think Mazda and Nissan are more at-risk than Toyota or Honda, but what do you think?

-tgriffith

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Please, Don’t Ban Texting While Driving!

Sometimes, I think it's safe to text while behind the wheel

Responsible texting can be safe

I live in Washington state, which is one of many states to ban making phone calls on handheld devices while driving. No one actually pays attention to the ban, as evidenced by my recent count of six cars in a row with drivers chatting it up with phones glued to their ears.

An easy way around that ban is to send a quick text rather than having an entire conversation. Texting is faster and can be done at a red light in the time it takes for it to turn green, leaving time to devote the required attention to driving while still meeting my communication needs.

Now though, a group of 11 automakers has formed the Alliance of Automobile Manufacturers (AMM) to push for an all-out ban on texting while behind the wheel.

I’m not going to say that I think texting while driving is completely safe… it’s far from safe when the car is moving. But I do believe there’s a time and a place where it’s OK, such as while stopped at a red light. In those few moments when I have nothing else to do, I don’t want anyone telling me I can’t send a note to my wife telling her I’m x-ited 2 C her 2 nite.

Then there’s this little contradictory gem: Some states offer a service sending text message updates on traffic and weather conditions. Will that be outlawed too? Reading a text message is probably more dangerous than sending one, as seasoned text pros can compose messages without even looking at their phones.

Texting while driving is often compared to drinking and driving, which I think is absurd since texting can done responsibly. (I’ve never known anyone who could be drunk only at red lights.) Drunk driving is a serious and dangerous offense… texting doesn’t have to be any more involved than changing the radio station or adjusting the iPod (uh-oh… watch iPod bans come next).

If I want to send and read texts when I feel it is safe to do so, I want that right. The biggest consequence I see is getting honked at for being a moment late in realizing the light turned green, and that’s a risk I’m willing to take.

What are your views on texting while driving? Should it be outlawed to text while behind the wheel?

-tgriffith

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Volkswagen Could Take Stake in Suzuki by 2010

Suzuki Kizashi: Will we ever see a TDI version?

Suzuki Kizashi: Will we ever see a TDI version?

Just five days ago I wrote about Volkswagen’s desire to add two more brands to its growing lineup of companies after the Porsche deal is done. I took a guess that Suzuki might be of interest to them.

About the same time, though, Bloomberg was reporting that

Volkswagen has no interest in buying Suzuki Motor Corp., Chief Executive Officer Martin Winterkorn said in an interview last night, calling the Japanese carmaker a “nice company.”

Nice company, indeed. Apparently, nice enough to buy. Check out what the Autoblog guys say:

Apparently, a Suzuki executive at the Frankfurt Motor Show mentioned that an agreement between the two automakers would be in place by the end of the year. “For Suzuki and VW this connection would be a win-win situation. Suzuki would have access to a variety of VW’s technology, while Volkswagen would have a solid supporting leg in India and Southeast Asia,” the unnamed source said.

Neither VW nor Suzuki are making any official statements, but a possible VW/Suzuki takeover could have a ton of possible ramifications. For instance:

Maybe VW would pull Suzuki from the U.S. market,  as some analysts have recommended doing, and then just rebadge Suzukis as V-dubs to charge a premium price and gain a better small-car presence here.  The quote above is evidence that the Suzuki brand would likely still exist to build VW’s Asian presence.

If I was leader of the growing German regime, that’s probably what I would do in my quest to dominate the auto world. And hey, I’ve been right before….

I wouldn’t mind seeing Volkswagen take a share of Suzuki. What do you think? If it happens, I want first dibs on a Kizashi TDI!

-tgriffith

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The Most Exciting Cars of 2010: Camaro? Mustang? Nope!

Is this wagon exciting?

Is this wagon exciting?

What’s the most exciting car of 2010?

Nope. According to TIME Magazine, the Koreans nabbed the two most exciting cars of ‘10, with the number 1 spot going to the Kia Soul.

While I, and certainly many others, have an issue with calling the Soul “exciting,” I won’t argue that it isn’t cool. For me, calling a car exciting means thrilling driving dynamics, agile cornering, and a completely unnecessary amount of horsepower.

Not tween-inspired styling and clever interior lighting.

TIME’s number 2 pick is closer to my definition: the ‘10 Hyundai Genesis Coupe. A rear-wheel-drive, 300-hp V6-powered coupe certainly qualifies to appear on anyone’s list of exciting cars, especially considering its $25,500 price tag.

Rounding out the Top 3 is the Ford Taurus SHO, a car our own jgoods certainly didn’t like that much. If they could shave off some of its 4,368 pounds of weight, maybe that 365-hp V6 would feel way more exciting than it does.

And how’s this as a sign of the times? A station wagon also made the list. Granted, it’s the Cadillac CTS Sport Wagon, but still, it’s a station wagon that someone labeled “exciting.” We’ve come a long way since the ’70s, man. I guess 26 mpg on the highway from a V6 engine is exciting, just not in a pedal-to-the-metal kind of way.

Other cars that made the list include the Jeep Grand Cherokee (enter your own joke here), Toyota Venza, Suzuki Kizashi, VW Golf, and Mercedes E-Class. Only one car they picked genuinely fits the bill: the Nissan 370Z.

All of these are cool cars and worthy of consideration when car shopping… but I’ll bet CarGurus blog readers can come up with a list of 2010 cars that truly excite.

So let’s hear it: What are the most exciting cars of 2010?

-tgriffith

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Convertibles, V8 Ultra-Muscle and Hot Hatches… Oh My!

Audi RS3 rendering

Audi RS3 rendering

Whoa, baby, we’ve got some cool cars coming to America!

What do you like: convertible muscle cars? You’re covered. A little more horsepower for your Challenger? Check. A small hatch that is affordable and still fun to drive? It can be yours. What about a 340-hp hatchback that’ll scoot to 60 mph in 4.5 seconds? We can only hope.

camaro_convertibleChevrolet is readying the popular Camaro with a rag top, according to the boys over at Autoblog. Check out this picture of a group of fresh-off-the-line convertibles sitting at the Holden plant in Australia. Anyone up for buying a 2011 convertible Camaro? Even in the silver/tan color scheme?

Owners of ‘08 or ‘09 Dodge Challengers now have an option of upgrading to the Classic Design Concepts Group 2 Challenger, a series of options that can raise the horsepower to a stellar 560. Also available are 12.5-inch-wide rear tires, Baer brakes, lowering springs, a custom hood, and more. The full upgrade can bring the cost of an SRT Challenger to over $79K, putting it close to Viper territory. Still though, at that price, it’s dang-near worth it.

suzuki-sx4-sportbackLooking for something much less expensive but still fairly fun to drive? Suzuki hopes to catch your eye with the 2010 SX4 Sportback. Looking nearly identical to the SX4 Crossover at first glance, the Sportback sits lower to the ground, has 17″ wheels and tires, isn’t offered in AWD, and lacks roof rails. And it has only 410 fewer horsepower than that Group 2 Challenger.

But a six-speed manual tranny, performance shocks, and anti-roll bars should help the SX4 Sportback provide a fun drive while getting 30 miles per gallon. In my mind, the SX4 Crossover and Sportback are further proof that Suzuki is ready to seriously take on the U.S. market.

Finally, we’re nearly beyond words at the thought of the new Audi RS3 (pictured at the top of this story) hitting America. Granted, the odds aren’t great that we’ll see it here, but it’s not out of the question. So for now we can drool over these numbers provided by the good folks at Leftlane:

At the heart of the RS3 will be an Audi TT RS-sourced 2.5-liter five-cylinder turbocharged engine. Tuned to produce 340 horsepower and 332 lb-ft of torque, the RS3 should be able to easily scoot from 0-60 in about 4.5 seconds, with the electronic nannies kicking in at about 155 mph.

We’ll keep an eye on next month’s Frankfurt Motor Show, where Audi should release more info and prices.

Are there any new car debuts you’re eager to see?

-tgriffith

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Feds Call for Distracted Driving Summit: It’s About Time!

Yesterday, Transportation Secretary Ray LaHood called for a September summit to investigate the dangers of texting and other deviant behavior while driving.

People in America got fed up with their children and loved ones being killed by drunk drivers. And people in America are very tired of the idea that people can text and drive and use cellphones and drive in some states.

If it were up to me, I would ban drivers from texting, but unfortunately, laws aren’t always enough. We’ve learned from past safety awareness campaigns that it takes a coordinated strategy combining education and enforcement to get results. That’s why this meeting with experienced officials, experts and law enforcement will be such a crucial first step in our efforts to put an end to distracted driving.

[Quotes from The New York Times and a DOT news release.]

The Secretary’s message implies, and state efforts demonstrate, the great difficulty of enforcement. We’ve seen the same thing with seat-belt and drunk-driving laws, and many of us remember how long these measures took to take hold.

We’ve seen a recent slew of articles and news reports about cell phones and other distractions (including ours, here and here). But the issue goes back several years and has always been bubbling on the back of the stove.

Sixteen states, including California, and Washington, DC, have passed laws prohibiting texting while driving, but that’s not the only problem by a long shot. The LA Times reports that “Earlier this year, a 56-year-old Illinois woman on a motorcycle was struck and killed by a woman who was applying nail polish while driving.”

We leave you with one more instance of impossible behavior posted two years ago:

Mark Stevens is a multitasking maniac. A couple of months ago, the White Plains, New York, marketing consultant was working his cell phone with one hand and his Blackberry with the other while trying to steer his Mercedes SL500 with his wrists and knees—when he plowed it into a rental vehicle in an Enterprise parking lot. That followed his fourth ticket in four years for talking on his cell phone while driving.

“If you are a determined multitasker, it’s an addiction—and you can’t stop it,” said the 59-year-old Stevens.

Talk about distracted driving. Even during a short trek, he said, he’s likely to sip a Diet Coke and a bottled water, eat a sandwich, read a copy of The Economist, write notes to himself and listen to NPR, in addition to performing his cell phone and Blackberry action—oh, and driving. “I’m a driven person, and that’s why I do all this stuff while I drive.”

Driven person? Mark Stevens should be driven to jail. This stuff would be funny if it weren’t so tragic. Ray LaHood is moving in the right direction.

Do you have any stories of distracted driving—either your own or someone else’s? Do you think the DOT summit will do any good?

—jgoods





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Max Caves, Formula One Teams Win

Max Mosley, FIA PresidentWell, sort of. In fact FOTA (Formula One Teams Association) and FIA, the sport’s governing body, do need each other, and the tradeoff the teams got was having Max Mosley, FIA president, agree not to run for reelection in October as Supreme Leader. That will be a result very much to the good of the sport and its fans.

Edward Gorman of the Times Online put it well:

The reign of Max Mosley as ruler—for that is what he was—of world motorsport and Formula One has come to an end. Like all men who enjoy almost unfettered power, there was always a danger he would over-reach himself and that, in the end, has been the case with Mosley.

After constant battles with the teams and the recent imposition of a “voluntary” budget cap, the teams had had enough. Thus the split we reported. Nobody trusted the guy. Still, the sport needs a governing body, and it became apparent that the teams recognized this. If they split off from FIA, how would they organize themselves and pursue a viable 2010 season?

So, as one wag put it in the comments section of the Jalopnik story, “It means only that he’ll have a lot more time for Nazi orgies.” In the end, money talks, and the FIA controls a great wad of it.

Now, when and how are they going to get rid of Bernie Ecclestone, the other half of this dynamic duo?

—jgoods





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A New GM Division?

2010-corvette-grand-sport1

Here’s another brilliant idea I came up with in the shower, incubator of my genius.

GM has obviously had some recent success with its new high-powered specialty and sports cars: the Corvette (Grand Sport, above), the Cadillac CTS-V (below left), the Camaro (below right), and the Pontiac G8. We’ve given them great reviews, as have others in the automotive press. The public likes them: Witness the 18,000 Camaro orders tgriffith recently wrote about. This could be a strong niche market at several price points.

2009-cad-cts-vYet bankruptcy will likely doom them all (except for the Corvette, says GM). It’s ironic and unfair that these are some of the best cars the company has ever built. But somebody, somewhere is going to buy the tooling and technology from GM to keep building them.

Here’s my idea: GM should keep building them—in a new specialty division dedicated to producing affordable performance cars for buyers who can and will pay the freight. There are many people still in the market with cash to spend who will buy such cars, notwithstanding the tremendous social, political, and economic pressures to go small, green, and efficient. By the way, the Camaro trim with a V6 gets 29 mpg.

Besides, the American market is never going to accept the overpriced Volt or the Korean-built Cruze. If GM bets the farm on these, it can’t survive. A sport specialty division could at least help fill the gap until better fuel-efficient small cars that people want come to market.

There would be production synergies, since Corvette engines power the CTS-V and one version of the Camaro. Some parts and platforms could interchange. One or two assembly plants could produce all these cars, keeping at least some GM folks working. Setting up dedicated dealerships would stanch some of the bleeding from that wound. Mileage improvements, per the new Obama proposal, would apply to these cars as well.

My idea won’t rescue GM, but may keep it breathing a while longer while the company comes back to life. People clearly want to buy these cars, and they should have the opportunity to keep doing so. If they won’t eat multi-grain bread, let ‘em eat cake.

Do you think there is a viable market for these cars that would help GM stay alive?

—jgoods



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Fiat Is Still Hungry

opel_logo2

We hear that Sergio Marchionne has started talks with GM to buy Opel—and most of GM’s European operations. The Fiat CEO has some appetite. Without so much as a burp after digesting Chrysler last week, he pulls up to another table for what could be an even bigger meal.

If he gets GM and the German government to agree, the deal would give Fiat another new car company, including Chrysler, Opel, and Vauxhall (U.K.), potentially generating some $105 billion per year. Marchionne believes consolidation is inevitable in the car industry and an individual firm can’t be viable unless it produces around 5 million units a year. The GM deal would give Fiat at least a 5.5 million car capacity, and maybe as much as 7 million.

The Fiat-Chrysler-Opel alliance actually makes some sense. GM must find a partner to run Opel (whose Insignia we praised) by June 1 or bankruptcy looms. While it has other suitors, the synergy with Fiat would be better, and it’s a great fit for the latter.

There are lots of problems, however, not least of which is present overcapacity (estimated by the unions to be 1 million vehicles). There will be big debt for the new company—some 20 billion euros if the deal goes through. And then there’s the small matter of convincing the German government to kick in 3.3 billion euros to (maybe) guarantee investor loans to finance the acquisition. Fiat will likely need to terminate thousands of Opel jobs in a bad recession, no easy prospect for the government to face, as the European economy is expected to grow still worse.

So maybe Sig. Marchionne is biting off more than he can chew. It’s always fascinating to watch an overreacher, even at the dinner table.

As my mother used to say, “pigs is pigs.”

Tell us what you think would be the good things about a Fiat-Chrysler-GM combination. What kinds of cars would we get?

—jgoods



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Imaginary Management at GM

drunkdriving-sheltonIt’s kind of like driving drunk: You think you’re doing just fine, and bam, you’re pulled over (or you hit the wall). From everything I know, GM leadership has been so insulated, so obtuse, so drunk, if you will, that they finally hit the brick wall. And like any good drunk, they denied everything and refused the breathalyzer test.

Here’s why they got bailed out without having to spend even one night in jail:

In April 2008, General Motors ranked as the world’s ninth-largest public company [my emphasis] by revenue, according to the Forbes Global 2000 list. GM’s revenues outpaced every company in the world except for eight, and every car company in the world save Toyota. Yet, GM finished at #573 in the overall rankings. And for the same year, GM lost a net of nearly $40 billion—ranking dead last among the world’s public companies. From this cursory view, it would appear that GM’s products are selling just fine—second-place in its industry, and 9th across all industries—and instead that GM’s troubles run deeper than just products.

In this piece, Forrester researcher Chris Townsend points out the lack of systemic innovation behind GM’s fall. Well, sure, we all can recognize that. But what is it about the company’s failed management that stifled innovation and produced its “fortress mentality”? When its market stopped expanding in the early ‘70s, why did it fail to adjust? Why did it continue drinking the same old booze?

Bob Sutton, a researcher who has studied GM over the years, has some answers. They reveal a management out of touch with its competition, with its employees, with its customers, and with its market. These are people who imagined they were doing their jobs while the world changed around them.

Foremost in Sutton’s indictment is the top-down, kiss-ass culture at GM:

The norm in meetings is that the highest status person in the room does all or most of the talking. Plus, more so than any organization I have ever dealt with, employees are expected to express agreement with their bosses. Why didn’t anyone have the guts to tell the executives that taking a private plane to beg for a bailout was a bad idea? I suspect that it is just standard operating procedure: GM is a culture where subordinates are expected to shut-up and kiss-up when the boss is around.

Also, managers get cars as perks (some with drivers), but their cars are handpicked off the line, and the system sees to it that maintenance is taken care of. Naturally, these folks don’t go through the arduous process of dealing with dealers for shopping, purchase, service, or sale of a car. In other words, they are totally insulated from the realities of car ownership. Nor do they EVER drive a competitor’s car.

Thus, GM people are managing in a bubble, in a woozy dreamworld where they become victims rather than actors, where no one steps up to the plate, where the answer is usually “no, we can’t” when innovations are suggested.

The fact is that their bankruptcy has been going on for years. Sutton says that GM’s failure makes him sick: “I saw the pain that people were experiencing in Flint in the early 1980s, the depressed workers and former managers, the ripple effects on businesses, and the helplessness. It is all much worse now. I don’t know if the U.S. auto industry can be saved.”

None of us knows. But we do know that the binge is over. When a DUI behaves this badly, you take away his license.

Fire all top levels of GM management: Yes or No? Leave us your comment.

–jgoods



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But all this brings me to the reason I’m thankful for this economic crisis:. ...

I’m kind of thankful for the economic crisis.

This is essentially a credit crisis that began with risky and sometimes flat-out bad home loans. The consequences of these poor banking decisions have extended all the way to Wall Street.

As bank after bank collapses, consumers are finding it increasingly difficult to snag a good deal on a home loan, even when home prices are way down.

It’s really no surprise to speculate that a similar crunch will happen in the auto industry. Banks can’t afford to take risks anymore.

I’ve bought a lot of new cars in my time, and I’ve been offered nearly every incentive that’s ever been conceived: Cash back, low financing rates, long terms, you name it. Basically, the deal was mine to dictate.

In the very near future, financing institutions will be the ones with the upper hand and will decide who gets financed. Say so long to those “no credit, no problem!” ads that have dominated our radio waves for the last decade!

Unless you have a near perfect credit rating and a sizeable income, even getting a modest car loan will be a challenge.

Here’s the new trend in car loans we’ll see very soon: higher rates, shorter terms and decreased loan amounts.  

No doubt it will be much harder, if not impossible, for lower-income people with poor credit to purchase a new car. Car dealerships and auto makers are going to struggle even more than they already have.

But all this brings me to the reason I’m thankful for this economic crisis:

The only people who will be able to buy a new car will be the ones able to afford one.

Imagine that!

What are your thoughts? How will tightening the requirements for car loans influence you?

 -tgriffith



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