Daily Edition: August 19, 2004

August 19, 2004

ME-412 Could Live On Without Bernhard

A decision on the future of Chrysler's high-performance concept vehicle, the ME-412 supercar, is likely to be made in the next few months. "Within this year, we should be able to come to some conclusion," Chrysler Group CEO Dieter Zetsche told TheCarConnection,com during an interview this week. A running version of the two-seat supercar was recently rolled out for testing at the Laguna Seca raceway, on California's Monterey Peninsula, and as Zetsche proudly noted, it lived up to many of the pronouncements made when the ME-412 concept was previewed last January. Even though the hand-built prototype was limited to about 75 percent of its rated power, it easily launched from 0-to-60 mph in less than 3.0 seconds. There had been expectations the supercar project would be scrubbed after the departure of former Chrysler Chief Operating Officer Wolfgang Bernhard, who'd personally spearheaded the program. But the project has acquired a new patron saint, DaimlerChrysler Chairman Juergen Schrempp, who has been closely following the ME-412's progress in recent weeks. "We can count on the total support" of Schrempp, Zetsche said, if a solid business case can be made for the high-performance sports car. But while Chrysler engineers appear comfortable they can deliver on spec, the question becomes whether the ME-412 is right for Chrysler and can be counted on to pay its own way. Though it would certainly "spotlight" the brand, Zetsche cautioned that he would not justify the effort by charging it off "as marketing costs." The ME-412 would have to be a profit center, and that means coming up with the right balance of costs, volume and price. "It would be great if it were viable," said the Chrysler CEO, but "I don't know right now." If given the go-ahead, the ME-412 will be an outsourced project, stressed Zetsche. Outside suppliers, such as MSX and Roush, did much of the work on the prototype, and "it's an absolute given," said Zetsche, "if we did it, we would not do it in-house." -TCC Team

2004 Detroit Show, Part I by TCC Team (1/12/2004)
Chrysler supercar stuns show, Bronco comes fromBrazil.

Arvin Meritor

Liberty Likely First of More Chrysler Diesels

Though there are several potentially crippling hurdles, the new Jeep Liberty diesel is likely to be only the first in an expanding lineup of the fuel-efficient engines that Chrysler will bring to market over the next few years. CEO Dieter Zetsche told TheCarConnection that other diesel models are now under development, though how many actually make it to market will depend on factors such as new emissions standards, fuel quality and a government-sponsored study of the potentially carcinogenic effects of diesel particulates. Low-sulfur diesel will reach market later this decade, but about the same time that new rules go into effect at both the federal and California state level. These regulations will effectively require automakers like Chrysler to deliver diesels as pollution-free as today's gasoline engines. Zetsche said the technology should be available, but "the issue is whether in an economically feasible (form)." Chrysler has a particular advantage over its rivals, he suggested, because of the diesel hardware and know-how it can tap into at the sibling Mercedes-Benz division. Eventually, if the technology does prove out, Zetsche believes it would "not be unrealistic" to see diesels capture as much as a 10 percent share of the American automotive market. Asked about the hybrid-electric technology Japanese makers are focusing on, the Chrysler CEO admitted his company has been slow off the blocks, but is determined to catch up. A mild hybrid pickup will launch shortly and, said Zetsche, "we're developing hybrids that are more in the center of this niche." Chrysler could have an advantage, he asserted, because "we're promoting diesels, too. It's not a case of either/or." -TCC Team

Grand Cherokee, Diesels to Boost Jeep by Joseph Szczesny (8/16/2004)
Jeep survives because it's "authentic," says Bell.

Ernst & Young Daily Edition STD

Herbie Rides Again

Production is getting under way this month for the fifth Herbie The Love Bug film, which will come out next year, probably as a summer release.

The new Love Bug flick, Herbie, Fully Loaded, stars Matt Dillon and Michael Keaton, and features a Volkswagen beetle with a mind of its own mixing it up with racing cars.

Dillon, 40, will play a handsome "bad boy" of the racing circuit in the film, which is set in the world of NASCAR racing. Fully Loaded follows on from the original Herbie movie, The Love Bug, and three earlier sequels. The movie begins production in Los Angeles next week

Disney hopes the movie will cash in on the three-decade-old success of the original Herbie film and the three sequels: Herbie Rides Again (1974), Herbie Goes to Monte Carlo (1977) and Herbie Goes Bananas (1980).

The film comes along at a time when Volkswagen New Beetle sales are off nearly 20 percent when sales of the two-door hardtop and convertible are combined. How many more years VW even makes the Beetle is up for grabs, according to recent interviews with VW executives. There is no thought to a re-do, just continued year-to-year improvements, a few minor body changes and new paint colors. It has become fashionable to call the New Beetle a bust because it is so far off its initial sales cadence of some 70,000 vehicles a year. But such criticism ignores the fact that excitement around the Beetle between 1994 when it was shown as a concept car and 1998 when it debuted, pretty much saved Volkswagen of America.

A new and successful (re: not straight to video) Herbie film could add a few thousand sales based on piqued interest. The truth about the Beetle, though, is that people still have a wistful and more indelible love for the original Beetle, Karmann Ghia and Microbus than the current New Beetle. All three vehicles of yesteryear continually show up in films and TV commercials despite not being sold as new since the 1970s. Even "The Thing," the military style SUV sold in the 1970s was prominently featured in the 2001 film, The Rat Race. There is no truth, however, to the rumors that the Phaeton luxury sedan will be featured in a film next year called "The Bust." -Jim Burt

VW Profit Slumps in 2003 by Jim Burt (2/23/2004)
The U.S. waits on new models until next year.

Mechanic's Tale: Critical Analysis

In a small shop where two or three repair jobs may determine if you have a good day (profitable) or a bad day (unprofitable with wasted effort and possible confrontations), analyzing the customer you are dealing with is critical before you start putting effort into the car. There are lots of rules and lots of exceptions. For anything more than an oil change and tire rotation, the car should be dropped off. Leaving the car at the shop is a mark of serious intentions. When someone comes in with a Check Engine light on and a list of drivability complaints, and wants to sit in the office while I diagnose it, I gently but firmly inform them that they must find a day or two when they can be without the car. A customer waiting in the office will always dominate your focus to the detriment of other customers and other responsibilities. Of course there are exceptions. A parent who has dropped the kids off at school at 9:00 a.m. and needs the brakes on the Caravan done by 2:00 p.m. can almost always be accommodated, because it is a predictable job with a predictable profit.

Mechanic's Tale: Critical Analysis by Douglas Flint (8/16/2004)
Assessing the repair coming in the door can make or break you.

DAILY IN DEPTH

Jeep "Soft-Roader" On The Way

Jeep Willys concept

Jeep Willys concept

Look for DaimlerChrysler's Jeep division to deliver its long-rumored "soft-roader" within "the next couple years," Chrysler Group design director Trevor Creed revealed to TheCarConnection.com. But don't be surprised if it doesn't carry the Jeep badge, Creed cautioned.

Chrysler has long debated the need for an entry-priced sport-utility vehicle to challenge the likes of the Toyota RAV4 and Ford Escape. But until now, company officials have been reluctant to go head-to-head for fear of diluting the Jeep brand's "Trail Rated" reputation. The problem is that building in the sort of off-road capabilities Jeep products are known for carries a significant penalty, in terms of added content and higher costs. It also has a negative impact on the on-road manners of Jeep's most affordable product, the Wrangler. "The soft-roader is the only way to go" for affordability, explained Creed.

"You could make the assumption" that a RAV4 fighter is "well along" in the development process, Creed indicated. But he quickly cautioned against also assuming it will be just another light-duty entrant in the increasingly crowded field of crossover vehicles. Such a concern has echoed among Jeep aficionados, admitted Chrysler Group CEO Dieter Zetsche. "We've already scared people that we'll screw up Jeep." So expect the automaker to deliver a soft-roader that nonetheless remains true to its roots. "We would make it the most competent in its class," Creed emphasized. "We would probably still get it trail-rated," he added, though it would not be up to the sort of heavy lifting the Wrangler is capable of off-road.

While engineering work appears to be moving along at a rapid pace, Chrysler faces an equally difficult job determining what to call its new entrant. "The naming of a vehicle is often the longest part of the process," Creed said, and in the case of the soft-roader, it has been the subject of "much discussion." Make that anguished debate, according to other sources. "There are people justifiably nervous about putting the Jeep brand on it," Creed acknowledged, and some insiders have taken to calling the upcoming entry a "Jeep-ette." Others are exploring the idea of reviving some of the names previously used by American Motors Corp., which Chrysler purchased 20 years ago, primarily to acquire the Jeep division. One strong possibility is the Willys nameplate. Indeed, it's a badge Chrysler used on several recent concept vehicles designed to gauge reaction to the idea of a soft-roader. -TCC Team

Jeep Goes Urban with Treo by TCC Team (10/27/2003)
Jeep's urban mobility vehicle presages big changes at DaimlerChrysler's off-road brand.

FROM THE SOURCE headlines from the latest press releases

PRNewswire

AutoVIBES, a monthly automotive omnibus study from Harris Interactive(R) and Kelley Blue Book Marketing Research tracking 34 new model launches, reports that four out of the top five most buzzworthy vehicles come out of Detroit's domestic stable. For the third straight month, Chrysler's all-new 300 claims the No.1 slot. Daimler-Chrysler hits another home run in July, with car-buyers ranking the Dodge Magnum at No. 2. Detroit rounds out the top five with the Pontiac GTO and the Chevrolet Colorado. The only foreign manufacturer with a vehicle in the top five is Nissan with its Titan pickup; it has been holding tight to a top-five slot for three months straight.

Lear Daily Edition

Name Symbol Last Change
Autobytel, Inc. ABTL 6.50 +0.02 (+0.31%)
Autoliv Inc. ALV 41.75 +0.25 (+0.60%)
AutoNation Inc. AN 16.35 +0.28 (+1.74%)
ArvinMeritor Inc. ARM 19.11 +0.03 (+0.16%)
American Axle & Mfr. Holdings Inc. AXL 33.80 -0.10 (-0.29%)
Ballard Power Systems Inc. BLDP 5.90 +0.04 (+0.68%)
BorgWarner Inc. BWA 45.83 -0.31 (-0.67%)
Collins & Aikman Corporation CKC 4.55 +0.10 (+2.25%)
Cummins Inc. CMI 67.10 +0.48 (+0.72%)
Dana Corporation DCN 18.62 +0.24 (+1.31%)
DaimlerChrysler AG (ADR) DCX 41.87 +0.27 (+0.65%)
Delphi Corporation DPH 9.34 +0.07 (+0.76%)
Dura Automotive Systems DRRA 8.41 -0.02 (-0.24%)
Eaton Corporation ETN 61.68 -0.04 (-0.06%)
Ford Motor Company F 14.30 +0.15 (+1.06%)
General Motors Corporation GM 41.96 +0.38 (+0.91%)
Gentex Corporation GNTX 33.46 -2.38 (-6.64%)
Goodyear Tire & Rubber GT 11.08 +0.24 (+2.21%)
Honda Motor Co. Ltd. (ADR) HMC 23.85 +0.47 (+2.01%)
Johnson Controls Inc. JCI 54.40 -0.93 (-1.68%)
Lear Corporation LEA 53.01 -0.39 (-0.73%)
Magna International Inc. MGA 77.73 -0.17 (-0.22%)
Motorola Inc. MOT 15.62 +0.54 (+3.58%)
Nissan Motor Co. Ltd. (ADR) NSANY 20.93 +0.23 (+1.11%)
Sonic Automotive Inc. SAH 21.32 +0.44 (+2.11%)
Sirius Satellite Radio SIRI 2.16 -0.08 (-3.57%)
Toyota Motor Corporation (ADR) TM 76.15 +1.47 (+1.97%)
TRW Automotive Holdings TRW 19.20 +0.04 (+0.21%)
Tower Automotive Inc. TWR 2.87 +0.01 (+0.35%)
United Auto Group Inc. UAG 24.45 +0.39 (+1.62%)
Visteon Corporation VC 9.82 +0.25 (+2.61%)
XM Satellite Radio Hold. XMSR 26.49 +0.71 (+2.75%)

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