DAILY EDITION: Feb. 3, 2003

February 3, 2004

TCC'S DAILY EDITION: Feb. 3, 2004

Auto Stocks Down on Ratings, Softening Earnings

Shares of Ford, General Motors, and DaimlerChrysler have been drifting lower on signals pointing to rising interest rates and softening earnings outlooks. On Monday, Ford fell 59 cents, or 4.1 percent, to $13.95 while General Motors gave up 98 cents, or two percent, to $48.70. The broader market was up. DaimlerChrysler escaped the selling and rose three cents to $47.56. Ford traded above $17.00 a month ago. GM traded above $54.00 as recently as Jan. 22. On Monday, Deutsche Bank analyst Rod

Lache downgraded Ford from hold to sell and lowered Ford’s price target to $12.00 based on the bank’s uncertainty about Ford hitting its mid-decade earnings goal. Signals from the Federal Reserve that higher interest rates are looming spells trouble for automakers who have been leaning on zero-percent loans and extremely low rates that allow consumers with negative equity trade-ins to roll the money they owe into a new auto loan. Higher rates will make that less appealing to consumers. On Friday, Goldman Sachs downgraded GM stock while holding Ford’s rating. —Jim Burt

Kerry: U.S. Needs More Efficient Vehicles by Joseph Szczesny (2/2/2004)
Democratic candidate will need Detroit against Bush.

Chevy, Caddy Score Big in Super Bowl Ads

Ads for Chevrolet and Cadillac didn’t finish in the top ten most popular Super Bowl commercials, according to USA Today’s annual Ad Meter. But they scored very high and beat the usually much hipper Mitsubishi advertising. A Chevy ad showing kids eating soap after presumably uttering expletives while reacting the Chevy SSR scored highest among car ads with a 7.73 rating, good enough for no. 12. The top ad scored 9.04 out of a possible 10.0, and the worst scored 4.08. The Ad Meter is based on the reactions of 136 adults. An ad showing large athletes getting into the Chevy Aveo scored 7.04, and finished 22nd out of 60 ads tracked. The punchline was that the athletes shown inside the car looked like Liliputians in the “roomy” Aveo. A spot for the Dodge Magnum scored 6.87 for 27th place. A Cadillac SRX ad scored 6.63 for 33rd. The Caddy ad showed a cool special effect of Cadillacs speeding like torpedoes through water, capturing the turbulence of the fluid displacement. “Power. Style. Luxury.” “As predicted in the space long ago: Cadillac is back, Jack,” opined Advertising Age critic Bob Garfield. Garfield and Adweek columnist Barbara Lippert both praised the Chevy ad, and felt it was better than some of the top-ten winners. A cliffhanger spot for the Mitsubishi Galant scored relatively poorly, at 6.40 and 39th. The ad showed crash avoidance technology, with the Galant up against the Toyota Camry and Honda Accord. The ad stopped short of showing how a potential accident ended up, and directed viewers to the company’s Web site. A Honda ad, part of ongoing series about a Pilot owner raised by wolves is very funny, but didn’t tickle too many game viewers. It scored a relatively poor 6.35 for 42nd. A car ad has never won best ad in the newspaper’s Ad Meter, with Anheuser-Busch and Pepsi dominating the winner’s circle every year. It’s a pity given the emotional appeal of automobiles over soft drinks and beer. A Bud Light ad finished number-one in Sunday’s game. —Jim Burt

Cadillac Reveals 2005 STS by TCC Team (1/19/2004)
New full-size, rear-drive sedan to take on Germany's best.

Chrysler Prices New Minivans

2005 Chrysler minivans

2005 Chrysler minivans

Chrysler Group said Monday it reduced prices on its 2005 minivans by an average of $3000, while it made its new Stow ’n‘ Go seating and storage system standard on most of its extended-wheelbase minivan models. Chrysler officials say the new pricing matrix gives them a fifteen-percent price advantage over comparably equipped Toyota Sienna and Honda Odyssey minivans. That Chrysler, the sales volume market leader, singled out Toyota and Honda in its announcement shows that the company realizes that the two Japanese automakers are seen as the new leaders in minivan design. With Stow ’n‘ Go, owners of the new 2005 Chrysler Town & Country and Dodge Grand Caravan will have the ability to fold their second- and third-row seats into the floor in approximately 30 seconds, with a one-handed effort. In seconds, the third-row split bench (60/40) may be flipped, individually or in its entirety, completely rearward for convenient, comfortable tailgate seating complete with a weather shelter provided by the liftgate. Stow ’n‘Go will be a standard feature on the extended-wheelbase 2005 Chrysler Town & Country LX, Touring and Limited, and the 2005 Dodge Grand Caravan SXT, while it will be an optional feature on the 2005 Dodge Grand Caravan SE. The manufacturer's suggested retail price for the standard-wheelbase Chrysler Town & Country is $20,995, which includes $665 destination without Stow ’n‘ Go. The MSRP for Town & Country LX with Stow ’n‘ Go is $25,450, which includes $680 destination. T&C prices go up to $35,750. Dodge Caravan prices start at $18,995 without Stow ’n‘ Go. The bottom-priced Grand Caravan with Stow n' Go is $24,990. Chrysler invested $400 million in the new seating and storage system. It is hoping that it will allow it to protect its market share from declining much more in the face of mounting competition from Toyota and Honda. Ford is out with a new Freestar and Mercury Monterey minivans, but they are improved on the interior only, and pale in comparison with the Sienna, Odyssey and Chrysler product, and already are selling for $2000 below invoice. —Jim Burt

2004 Chrysler PT Cruiser Convertible by Bob Hall (2/2/2004)
As the PT Cruiser drops its top, will sales go up?

Lincoln-Mercury Launches Ad Blitz

Ford’s domestic luxury brands, often described as staid and out of touch, kicked off barrage of ads Monday in an effort to tweak perception and attract buyers to its lineup of new and old product. According to L-M marketing chief John Fitzpatrick, Lincoln-Mercury general marketing manager, the company will air about ten new television ads on shows like ABC’s “World News Tonight,” “CBS Evening News,” as well as cable channels such as HGTV and the Food Network. Earvin “Magic” Johnson will serve as spokesman for Lincoln in some ads airing on ESPN and during basketball games. Lincoln-Mercury ads will also grace the pages of The New York Times and USA Today, as well as magazines such as People, Newsweek, and AARP Monthly. The adverts are meant to communicate technology, spontaneity, and American elegance. —John D. Stoll

Crises Test Suppliers, Automakers

Everything from terrorism on 9/11, to severe weather and disruptions to the electric grid have rocked the auto industry in North America over the past couple of years and forced automakers to take a close look at their preparations for emergencies. Indeed only last week, the roof of General Motors Service Parts Operation warehouse and processing plant outside Flint, Mich., collapsed under the weight of blowing snow that had created drifts an estimated fifteen feet high on the plant’s roof. Fortunately, no one was hurt and GM and the plant went back into operation shortly after GM officials made an assessment of the damage to the plant. In the face of the chronic security issues, the Automotive Industry Action Group in Southfield, Mich., has developed guidelines to help companies, large and small, both survive and recover from both natural and man-made disasters.

Crises Test Suppliers, Automakers (2/1/2004)
Better crisis management planned in wake of severe weather and national emergencies.

Small Cars Making a Comeback?

“If we’d listened to the market research, we’d have never done the MINI,” says the British brand’s U.S. boss, Jack Pitney. The fact is, for most American motorists, bigger is better. So how explain the success of the pint-sized import, which despite its diminutive dimensions proved one of the hits of 2003? That’s the question a lot of automakers are asking as they rethink their own small-car strategies. Before the decade is out, an assortment of domestic and foreign makers, including General Motors, BMW, Mazda, and Mercedes-Benz, are expected to weigh in with their own MINI and microcars. The question is whether these new products will tap into a new market niche or prove fanciful failures.

Small Cars Making a Comeback? (2/1/2004)
Against all odds, small cars seem to be in the midst of a revival.

WORLD REPORT: Europe by Ian Norris


GM Opens Geneva’s Preview Parade

2005 Opel Tigra

2005 Opel Tigra

It’s a month to the press previews of the Geneva Auto Show, and GM is the first major manufacturer to reveal something of the new cars it will be unveiling in Switzerland. The first out from behind the curtain is the Tigra, a new entry in one of Europe’s hottest niches, that of the retractable hardtop coupe. The format was first put into production by Mercedes, with the SLK, and it was followed by Peugeot, which currently has two models of this type, the 206CC and 307CC, in its range, and Renault, which has recently put a coupe/convertible into its Mégane range. The concept of a hardtop that can be quickly retracted is popular in markets like Britain, where soft tops often do not give sufficient protection from the weather.

The Tigra, which takes over the name of a small coupe that started life as a Frankfurt show concept and went into production between 1994 and 2000, is a two-seater that will be sold with 1.4-liter 90-hp and 1.8-liter 125-hp Ecotec four-cylinder power units. Initially it will be sold only with a five-speed manual transmission, to appeal to sporting drivers. It’s likely, however, that an automatic box will be made available to satisfy the women drivers who form a large proportion of European coupe/convertible buyers.

The Tigra will be produced for GM in France by Heuliez, the body-building specialists that have become experts in the development and manufacture of retractable hardtops. It will go on sale in the late summer of this year under GM’s two European nameplates: Vauxhall in Britain, and Opel in the rest of Europe.

Geneva Launch for Toyota’s Compact Euro-MPV

2004 Toyota Corolla Verso

2004 Toyota Corolla Verso

Another Euro-niche, that of the compact multi-seat MPV, will get a little more crowded in May when Toyota launches its new seven-seat Corolla Verso after taking the wraps off at Geneva. The Corolla Verso is another example of Toyota’s policy of working on a world scale, designing, building and selling unique regional versions of its products in Asia, North America, and Europe. The Europe-only Verso has exterior design from Toyota’s ED2 design center in southern France and it will be built exclusively at Toyota Motor Manufacturing Turkey’s facility at Adapazari, which also manufactures Corolla sedans and wagons.

The major competition between the manufacturers making C-segment MPVs in Europe is not just the total number of seats that can be used, but how many of those seats can be stowed away completely when they are not required. GM scored points with its Zafira, in which the rearmost of the three rows of seats folds away into a flat floor. Toyota, however, is claiming an advantage by engineering the Verso in such a manner that all five rear seats fold into the floor, providing a flat load area.

Design cues have been taken from both MPVs, which have influenced the bulk of the lower half of the car, and conventional cars and coupes, which give the Verso its flowing roofline.

A Truck With French Accent

2004 Renault Deck'up Concept

2004 Renault Deck'up Concept

In the days when French manufacturers sold cars in the U.S., Renault sold its small sedan, the Renault 5, as ‘Le Car’. The company’s latest concept — which will not be sold in the U.S. or anywhere else, for that matter — could be called ‘Le Pickup.’ It almost is, in fact, for it labors under the title of the “Trafic Deck’up” — and no, “Trafic” isn’t a misprint, it’s the name Renault gives to its delivery truck range in Europe and it’s the way the French spell “Traffic.”

Based on a van rather than a car, the Deck’up is big — a fact that can be judged from the way in which the 20-inch wheels look positively MINI-sized in comparison to the bulk of the vehicle. The concept seems to draw its inspiration from a series of Japanese concepts of the mid-1980s, when every local manufacturer was building cars aimed at birdwatchers and those who appreciated the great outdoors. It therefore has a rear loadspace designed for two people with binoculars, rather than the motorbikes, building materials or coon-dogs that American pickups are meant to carry. In the same perverse way, the four-door, four-seat ‘crew-cab’ offers more space than many five-seater sedans.

The Deck’up has all-wheel drive and is “designed with off-road adventure in mind.” But not, it would seem, America’s view of off-road adventure — the power unit is a 135-hp, 2.5-liter four-cylinder diesel.

FROM THE SOURCE headlines from the latest press releases


PRNewswire

The Dodge Ram SRT-10 unleashed its Viper power today, taking its place in the Guinness Book of World Records as the “World’s Fastest Production Pickup Truck.” Only recently off the Saltillo, Mexico, assembly line and not modified in any way for additional power or enhanced aerodynamics, the Dodge Ram SRT-10 posted a two-lap, both-directions average speed of 154.587 mph over a “flying kilometer” on the 4.71-mile oval at the DaimlerChrysler Proving Grounds here in Chelsea. The record run by the Dodge Ram SRT-10 was certified by Guinness World Records and the Sports Car Club of America (SCCA). The previous record was 147.54 mph, set last July by the Ford SVT F-150 Lightning, before the Dodge Ram SRT-10 went into production.


THE TICKER

Name Symbol Last Chg
AUTOLIV ALV 41.76 +0.41
AUTONATION INC AN 16.45 +0.07
ARVINMERITOR ARM 22.01 -0.19
AMER AXLE & MANU AXL 38.70 -0.06
BALLARD PWR SYS BLDP 11.68 +0.30
BORG WARNER BWA 91.93 -0.99
COLLINS AIKMAN CKC 5.91 +0.09
CUMMINS INC CMI 49.82 -0.91
DANA CORP DCN 21.26 +0.46
DAIMLERCHRYSLER DCX 47.56 +0.03
DELPHI CORP DPH 10.49 -0.09
DURA AUTO SYS DRRA 14.34 -0.41
EATON CORP ETN 117.46 +1.31
FORD MOTOR CO F 13.95 -0.59
GENERAL MOTORS GM 48.70 -0.98
GENTEX CORP GNTX 43.48 -0.17
GOODYEAR TIRE GT 9.53 +0.03
HONDA MOTOR CO HMC 21.07 -0.27
JOHNSON CONTROLS JCI 58.83 -0.02
LEAR CORP LEA 64.19 -1.47
MAGNA INTNL MGA 80.39 -0.79
MOTOROLA INC MOT 16.45 -0.13
NISSAN MOTORS NSANY 21.64 +0.33
SONIC AUTOMOTIVE SAH 22.35 -0.03
SIRIUS SAT RADI SIRI 2.79 +0.09
TOWER AUTO TWR 6.07 +0.01
TOYOTA MOTOR TM 67.75 +1.35
UNIT AUTO GRP UAG 28.35 +0.01
VISTEON CORP VC 10.86 +0.16
XM SATELLITE XMSR 23.58 +0.16

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