Auto Manufacturer Review

182 Miles to Go...

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Got to thinking about the calendar as a race where every day equals one mile, and since we just passed the half-way point, now is as good a time as ever to take a deep breath and review the field. Probably too early to predict the winner of The Big Race version 2007, but it is becoming clear which participants are in better condition and might have extra power in case the race gets tight at the finish line.

For simplicity's sake, I will handicap what I like to call the "Big 7" and present them in alphabetical order, to keep you from noting any bias or drawing assumptions.

Chrysler/Dodge - Maybe it is unfair to even ask Chrysler, Dodge and Jeep to keep a competitive pace in the 2007 race given the internal turmoil the companies and their troops have faced since January. Recall that German parent company DaimlerChrysler announced that they were exploring the sale of the Chrysler side early in the game, so you should allow them some slack. But when you look at many of the vehicles that went on sale this year, the full offspring of the failed "merger of equals," you realize that this was going to be a bad year no matter the boardroom fireworks.

2008 Cadillac CTS

The Jeep Compass, Chrysler Aspen and Jeep Commander all came into the market with a roar but will leave with a whimper. Still early days on the all-new Chrysler Sebring, Dodge Avenger and Jeep Patriot, but indications are that these might follow their brothers into the rental car swamp. But not all hope is lost. The all-new Jeep Wrangler is in high demand, especially the higher-profit 4-door Unlimited versions, and the Chrysler 300 continues to be the cream of the full-size car crop. Chrysler's new owners, Cerberus, know the challenge and opportunity and are assembling a strong supporting cast. The clouds should start to clear over your local Chrysler/Dodge/Jeep dealer soon.

Ford - The timing for this column couldn't be better--or worse--for Ford Motor Company. I just returned from a "Ford Forum" hosted in Dearborn where the top brass presented a breakdown of their progress thus far in 2007 and an advance opportunity to drive many of their new-for-2008 models.

Their new main marketing slogan appears to be "More Products People Want," and I couldn't help but smile when it was broadcast. After all, Ford is still in the early days of their big product renaissance, and I think they are a bit early to make such a bold statement. But their struggle is to reverse consumer perceptions of the brand, so maybe this will plant the seeds once the "wanted" product is released. The F-150, Mustang, Fusion and, to a degree, the new Edge CUV have captured the imagination of their intended markets based on aggressive design or heritage. However, the rest of the stable seems to be almost sired by a different horse, as the '07 Five Hundred/'08 Taurus, '07 Freestyle/'08 Taurus X, and '07 Montego/'08 Sable, which were the big story, have not done much to narrow the gap between them and the Chrysler 300 and '08 Chevy Malibu. Ford had a second chance to make the undesirable Five Hundred/Montego, but erred on the conservative side. Better mechanicals, but nothing to make a shopper run out for a test drive.

The 2008 themes in the halls of Ford are: 1) Grow the car business, 2) dominate the SUV/CUV segment, and 3) protect their truck leadership. And they intend to do this by recreating or refreshing 70% of their current line-up by 2010. The race for 2007 will not be theirs, but the race for 2010 is theirs to lose.

General Motors - The General took off at a rapid pace when the race began in January, but it appears that they might have used the old "1/2 full fuel tank" plan to save some weight and out-accelerate the rest. It appears that they now need a pit stop or two. The early arrival of their full-size trucks and SUVs (with Motor Trend bestowing the coveted Truck of the Year on the Silverado) plus the successful intro of their new CUVs (the Acadia, Outlook, and as reviewed in this space in May, the Enclave) tempted many to assume that this was going to be a great race for GM. Sure, Toyota officially took over the crown of #1 manufacturer in the world, but I saw this as a pesky (and heavy) monkey finally off the back of GM that would only help them speed towards their aggressive internal goals. But the award-winning Saturn Aura has not changed the midsize car galaxy in the way hoped for, and fear of rising fuel prices have crimped everybody's truck and SUV sales. In the second half, we look forward to the new Chevy Malibu and Cadillac CTS, plus aggressive fleet Fuel Economy and Closeout 2007 marketing, to give them a bit more throttle going into the final turns.

Honda - Every race that Honda enters reminds me that they really are little more than a motor company that happens to also assemble vehicles to host their wonderful engines. And I say this with all respect and enthusiasm, as they are entering the 2nd half of the race with faster and faster lap times. The all-new CR-V is flying off the lots and meeting internal objectives to keep current owners in the family as well as attract new members. The Fit raced to an early and stylish lead in the new and vastly improved subcompact or "B class" segment, and the Odyssey and Pilot continue to do well even as both age versus their competition. But the burst of speed Honda has missed thus far this year will come from the introduction of the all-new Accord. This vehicle is key to Honda's success, and they have had plenty of time to tear apart the competitive Camry, Aura, and Fusion in order to come to market with a killer. Oddly enough, to my eye, early spy photos expose elements of the current Hyundai Sonata in the new design. This is a strange market, indeed!

Hyundai - Way too many words have been written as of late on Hyundai's recent 'reversal of fortune,' as if you should call sales down just 1% to 2% compared to 2006 something to cry about. But if you look closely, it is easy to see that their race car is starting to show the benefit of extra hours in the wind tunnel and on the tuner's bench. The Sonata seems to be finally catching on after a very long honeymoon, as is the all-new Santa Fe. And I recently spent quality time with the all-new Veracruz that I can only call remarkable. When I read that the Lexus RX350 was the benchmarked target for this vehicle, I thought someone had slipped a very effective mickey into the air ducts at Hyundai's HQs in Seoul and Southern California. But the news is not in that the CUV itself is remarkable, but in what it should portend for the brand moving forward. We all know that the Chinese are coming in 2009 and this fact obviously sent a chill through the Hyundai (and sister Kia) hallways. As a result, they are in a supplemental race to go 'upmarket' and no longer be considered primarily for low purchase prices or full warranties. If they can continue the massive strides in refinement and tangible quality found in the Veracruz, coupled with a new focus on exceeding the current market leader in each segment rather than just keeping up, this will be the team to watch. And don't forget that the Genesis concept shown in New York was powered by a 300+ hp V8 ... could this be Hyundai's "Hemi"?

Nissan - 2007 is shaping up to be the year that Nissan takes a deep collective breath after running full throttle since 2004. Few other companies have reinvented themselves or their offerings as thoroughly as Nissan/Infiniti, and for that I applaud them. After all, Carlos Ghosn and his team get the standard that "product is king." The Versa stands proudly next to the athletic Honda Fit, solid Toyota Yaris, and successful Chevy Aveo as a true alternative worthy of consideration in the important fuel-efficient B-class segment. The all-new Altima seems to be hitting its stride after a bumpy launch, and the Infiniti G35 Sedan/G37 Coupe are the only legitimate thorns in the side of the BMW sport/luxury juggernaut. On the down side, the Armada, QX56, Pathfinder and Titan are all suffering from common market malaise, though the new Infiniti EX and FX CUVs are look very promising.

Toyota - The new global #1 manufacturer stands a unique crossroads in their incredible history of growth. The old monkey is off GM's back and now lives in Toyota City, so the pressure to succeed will not fade. But at what price? GM learned the lesson the hard way by being way too dependent on fleet and out-of-favor vehicles in order to hold sales numbers high. What will Toyota do?

2007 has been very good to Toyota in the U.S. thus far, and my crystal ball predicts more of the same. The Tundra has not been the bottle rocket Toyota hoped and invested for, but they are learning hard lessons that will help them in the future. (Odd, however, that years of preparation didn't anticipate today's distribution and feature/build requirements.) The Yaris has solidified itself as the boring but practical new subcompact on the block, and the Corolla amazes all by continuing to sell high numbers in the twilight of the current design. The Lexus brand also continues to roll sales-wise and is now illuminated by the glow of the all-conquering LS600 hybrid. And Scion has two all new "bros" on the block in the xB and xD.

So the fear is maintaining quality in light of their phenomenal growth, and already there have been cracks big enough for top management to realign new product planning such that they now take more time to ensure quality. No shortcuts will be allowed, and this is just the kind of luxury that only the richest OEM can take.

Posted on 2007-07-02 | Permalink | |

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