2005 Frankfurt Auto Show, Part I

September 12, 2005

2005 Frankfurt Auto Show Index by TCC Team (9/12/2005)



Volkswagen Eos

Wolfgang Bernhard 2005

Wolfgang Bernhard 2005

It was hard to tell whether the car was the star, or the new head of the Volkswagen brand, when the automaker rolled out its new Eos coupe/cabriolet. At the wheel was Wolfgang Bernhard, the new head of the flagship VW division, marking his first real public appearance since taking over the brand last year. The Eos is the latest in a growing list of hardtop convertibles, though it seems positioned to be the first to make it into the mass market due to delays with General Motors’ Pontiac G6 version. Bernhard noted that the Eos can go from hardtop to open-air in just 25 seconds. The five-part roof can also be partially retracted, serving as a more conventional sunroof. “A cabriolet is not just purchased on rational reasoning, so a car like this has to be truly thrilling,” suggested Bernhard, the former number two executive at Chrysler. Sales of the four-seater will launch in Europe next spring, starting at 25,950 Euros, a price tag including such features as electronic stability control and rollover protection. No details of the U.S. introduction were released.


2007 Volkswagen Eos

2007 Volkswagen Eos

Volkswagen used its half-hour in the spotlight to also unveil a new turbo- and supercharged diesel version of the Golf. The 1.4-liter powertrain will launch the popular VW model from 0-100 km/h (0-62.5 mph) in 7.9 seconds, and push it to a top speed of 220 km/h (137.5 mph). Look for the powertrain to appear in other models, Bernhard noted. And with increasing interest in the high-efficiency diesel, it may be just a matter of time before the engine to make its way across the Atlantic. The various powertrains and products debuting in Frankfurt are part of a big push by Volkswagen, which is struggling to reverse recent share and profit declines around the world. “By 2010,” noted Bernhard, “we’ll be launching another five to 10 new models that don’t have a true predecessor” in existing products.






Mercedes-Benz S-Class

2007 Mercedes-Benz S-Class

2007 Mercedes-Benz S-Class

While its product range has grown almost exponentially over the last decade, no model better defines Mercedes-Benz than its S-Class. And the German automaker pulled the covers off an all-new version of the flagship sedan on Monday, during the opening press day at the Frankfurt Motor Show. The roll-out also marked the return of Dieter Zetsche, who until recently headed the Chrysler Group, and took over as Mercedes chief just 12 days ago.

The new S-Class is decidedly more distinctive than the soft-styled model it replaces, though the edgier look, with such features as bulging rear wheel arches, could prove controversial. Perhaps Mercedes is hoping so, going up against a range of new high-line entries, such as the frequently-debated BMW 7-Series to the higher-priced Bentley Continental Flying Spur. The 2007 S-Class will debut with four different engine options, including a 388-horsepower V-8 version of the S500. That’s a sizable 82 hp more than the current S500. Early next year, a 570-hp, twin-turbo V-12 model will be added under the S600 nameplate.

Though Mercedes insists it has overcome some of the quality problems with its advanced technology – and made more intuitive its often vexing COMAND system – the new S-Class has more digital technology than ever. The new S-Class utilizes two overlapping onboard radar systems, for example. Its Pre-Safe system can see potential accidents coming, and take measures to avoid them, such as applying the brakes automatically. Mercedes also will offer an infrared night vision system, similar to that which failed to generate much interest at Cadillac a few years back. Mercedes officials insist their Night View Assist is easier to use than the old Caddy system and much sharper onscreen.

While Mercedes wants the S-Class to be seen as the world’s safest car, Zetsche also told TheCarConnection it is critical for the automaker to restore its reputation for building the highest-quality vehicles. That image was tarnished by a variety of problems in recent years.

Preview: 2007 Mercedes-Benz S-Class by Marty Padgett (8/29/2005)
Reinventing an icon, the more is more way.




Benz Puts Power Down with ML63

2007 Mercedes-Benz ML63

2007 Mercedes-Benz ML63

What fuel crisis? Mercedes put an emphasis on high-performance during its Frankfurt preview. Along with the big S-Class, the automaker rolled out the most powerful version ever of its M-Class sport-utility vehicle. The ML63 AMG features a new, 510-horsepower, 6.3-liter V-8 that can launch from 0-100 km/h (0-62.5 mph) in just 5.0 seconds. The new AMG engine will appear in other Mercedes models, starting next year, announced Mercedes’ new boss, Dieter Zetsche, including the R-Class crossover.

The automaker didn’t entirely ignore the global spike in petroleum prices. It also came to Frankfurt with the European version of its new R-Class. The R320 CDi is a European-specific, short wheelbase version of the R-Class, which will be assembled at DaimlerChrysler’s special, low-volume assembly plant in Graz, Austria . The 224-hp blown V-6 diesel won’t be a slug, however, boasting 0-100 km/h times of under 9.0 seconds, even while consuming just 9.3 liters of diesel per 100 kilometers, or the equivalent of 25.3 miles per gallon.


Jeep Compass and Patriot

2005 Jeep Patriot concept

2005 Jeep Patriot concept

In a bow to the fragmentation of the automotive market, Chrysler planners decided to bring two new takes on sport-utility vehicle to the Frankfurt show’s Camp Jeep display. The Patriot is a fairly traditional take on the “trail-rated” Jeep concept, while the Compass Rallye concept is what has come to be called a soft-roader. It boasts only moderate off-road capabilities, with more of an emphasis on on-highway manners, and it’s meant to broaden the brand’s appeal to those who normally wouldn’t consider a Jeep. Smaller than existing Jeep product, both have significant features in common under the skin, including their range of powertrains, including 1.8-liter, 2.0-liter and 2.4-liter packages. Were the two models to be sold in Europe , said a source, they’d likely also get diesel power.



2005 Jeep Compass concept

2005 Jeep Compass concept

Officially, the Patriot and Compass are just concepts right now, but company insiders confirm the pair is actively under development and should reach market by 2007. “Today, they’re just concepts,” hinted Chrysler’s new CEO, Tom LaSorda, “but concepts designed to meet real-world needs. Both Jeeps will be based off the same architecture as the upcoming Dodge Caliber, a crossover previewed at the Geneva Motor Show last spring.




When Show Plans Go Awry

Tom LaSorda 2005

Tom LaSorda 2005

Auto shows have become lavish multi-media affairs, with trapeze artists descending from ceilings, talking robots wandering the halls, and PR executives losing sleep waiting to see if everything comes together. It looked like things would work out for Jason Vines, the creatively eccentric PR chief at Chrysler, during four flawless rehearsals. To reveal the new Jeep Patriot and Compass models, the automaker had a large crate lowered to the ground by a giant crane. Then, CEO Tom LaSorda and other Chrysler execs were supposed to claw at the crate with crowbars. But an over-anxious crane operator raised the top of the crate while LaSorda was still talking to the assembled media. He was forced to come up with a couple quick ad-libs. Of course, it wasn’t the first big flub at a major auto show. Balky doors have trapped executives inside new vehicles, microphones have often failed, mid-speech. And, shades of Janet Jackson, there have even been a few “uniform failures,” which have prompted photographers to work on their reflexes.

Gallardo Goes Topless


2005 Lamborghini Gallardo Spyder

2005 Lamborghini Gallardo Spyder

It might be hard to remember the time when the auto industry was getting ready to kill off the convertible. There are plenty of models going al fresco in Frankfurt, and for those looking to feel some hurricane-force wind in their hair, Lamborghini unveiled the new Gallardo Spyder. The 500-horsepower V-10 found in the original Gallardo Coupe is being upgraded to put out a full 522 hp in the roadster. The cabriolet version features such niceties as a retractable rear glass window, but expect to pay extra should you prefer an ashtray, rather than a cupholder. According to Lamborghini CEO Stefan Winkelmann, the ’06 production run of Spyders is “nearly sold out.” Observers believe the convertible should help improve less-than-expected demand for the “baby Lambo.” The Italian automaker, a subsidiary of Audi AG, intends to take other steps, launching several other spin-offs of the Gallardo, including the new Special Edition, or SE, and what Winkelmann called the “ultimate” extreme version, the Concept-S shown in prototype form at the Pebble Beach Concours d’Elegance last month.



Benz Quality Top of Zetsche’s List


“Mercedes has to be positioned as the number one automaker” by whatever measure of quality you choose, declared the automaker’s new CEO, Dieter Zetsche. Early this year, former Benz boss Eckhard Cordes issued the surprise assessment that the automaker wouldn’t try to compete in a world where complaints about cupholders could cost his company the lead in a J.D. Power study. Speaking for the first time as Cordes’ replacement, after leaving the chairman’s spot at Chrysler, Zetsche stressed that "It is our objective to be number one in J.D. Power." Mercedes has to meet local market demands, whatever they are. Quality is “not up to us to define. If it’s different from Japan to the U.S. , we have to…respond accordingly.”


After just 12 days on the job, Zetsche politely declined to discuss some of the steps he might need take in the future, such as implementing job cuts at the company’s German assembly plants, but he made it clear that he intends to improve the luxury manufacturer’s competitiveness through a variety of steps. Cutting costs, Zetsche stressed, is “an enabler,” and not the total solution. The key to boosting Mercedes’ return-on-sales back to the targeted 7 percent, the mustachioed CEO emphasized, is by winning on the product front.


Zetsche’s move to Germany came a bit earlier than expected, when Cordes resigned unexpectedly. But the 52-year-old executive had already been tapped to replace Juergen Schrempp, the CEO of Mercedes’ Stuttgart-based parent, DaimlerChrysler AG, at year’s end. In that roll, he’ll oversee all the DCX brands, including the slow-selling Maybach and struggling smart. For the moment, Zetsche said he’s not going to focus on the ultra-luxury Maybach; meanwhile he’s waiting to see if the smart turnaround plan takes hold. So far, the year-to-date results are “on track to deliver their promises for 2005,” Zetsche said during a meeting with journalists at the Frankfurt Motor Show. He added that the goal is to make a decision about bringing smart to the U.S. next year. But the product designed to get it there won’t be ready until 2007.


Zetsche made it clear he is a diesel fan, though he admitted there’s a strong emotional factor building in favor of hybrid-electric vehicles. So “You cannot be a responsible manufacturer and limit your focus to just one of those solutions.”


Zetsche’s recent move up the ranks at DaimlerChrysler is likely a bitter pill for Ford Motor Co., and especially for the Michigan automaker’s Chairman, Bill Ford. In an unexpected revelation, the family scion told reporters he had tried to recruit Zetsche for Ford, apparently in 2003. Zetsche wouldn’t discuss specifics of their conversation, though he was openly surprised that Ford made the topic public. As for his long-term plans at Mercedes, Zetsche said there’s been no search to find a replacement once he becomes DCX CEO. A well-placed source later told TheCarConnection that Zetsche has said he plans to stay in both jobs, “indefinitely.” But the source added that he expected Zetsche will likely split his duties and find a new head for Mercedes by early 2007.



LaSorda Lays Out Chrysler Plans


Chrysler will roll out at least 10 new products in the coming calendar year, making it “our biggest launch year in our history,” said new CEO Tom LaSorda. Overall, the plan is to add or replace 25 products in a three-year blitz, LaSorda explained during a meeting with reporters at the Frankfurt Motor Show.


While the new chief executive tried to position Chrysler as having a solid grip on its future, LaSorda acknowledged that changing economic conditions and world events could force it to rethink many of its basic strategies. Soaring fuel prices are, not surprisingly, at the top of its list. And that could lead the American arm of DaimlerChrysler AG to increase the number of diesel products it sells in the U.S. “The likelihood,” hinted LaSorda, “is more than 50/50 there will be.”


Chrysler, he added, might also consider moving into new small car segment. Right now, there is nothing in the B-car segment, below the current Neon model, LaSorda stressed, because “it is tough to make money” in that segment. But hinting that the thought has been raised in Chrysler planning meetings, he added that “If we did, we wouldn’t do it alone.” Indeed, LaSorda pointed out, the U.S. automaker is looking at many opportunities to spread out risk. In Toledo, Ohio , it is building a new Jeep plant with the help of three major suppliers, each putting up a significant portion of the project’s total cost.


Recent media reports have suggested Chrysler might even expand the utilization of its minivan plants by producing a version for Volkswagen AG. During LaSorda’s meeting with reporters, Chrysler’s chief spokesman, Jason Vines, acknowledged the talks with VW, though he stressed a decision has not yet been made.


Asked about the impact of Hurricane Katrina, LaSorda noted that about 40 of Chrysler’s 4500 U.S. dealers were impacted, with “10 totally devastated.” Another 10 could take months to resume operations. Several thousand Chrysler vehicles were destroyed on dealer lots during the storm, he added, suggesting some overtime may be added at Chrysler plants to recover the losses. As the Gulf Coast begins to rebuild, LaSorda added, it actually could be a boon to the auto industry, especially light truck sales, since construction crews will need lots of new pickups.



Euros Join Hybrid Brigade


In steady procession, European automakers lifted the covers on an assortment of hybrids and gasoline-electric concept vehicles during the first day of media previews in Frankfurt . It’s a simple recognition of two facts, said one well-placed industry observer. First, fuel prices have risen so high, even grudgingly complacent European motorists have had enough. Secondly, he added, Japanese makers like Toyota have done too good a job making hybrids seem the greenest of all powertrain technology in the mind of the public. On Monday, Audi unveiled a hybrid-electric concept, based on its new Q7 sport-utility vehicle. MINI showed a prototype that could use the technology, as well.


Despite the growing groundswell, skepticism remains high among European industry leaders, most of whom see diesel power as a more effective alternative. During the Mercedes-Benz news conference, the brand’s new boss, Dieter Zetsche, repeatedly referred to a report in the German paper, AutoBild, which found that on an across-the-U.S. test drive, a diesel-powered Mercedes M-Class delivered significantly better mileage than the new hybrid Lexus RX400h (echoing concerns raised earlier this year by TheCarConnection.com). But even DaimlerChrysler isn’t writing off gasoline-electric technology. Mercedes will reportedly show a diesel hybrid later in the week, and its U.S. sibling, DaimlerChrysler, is developing a new form of gasoline-electric propulsion under a joint venture with General Motors. In fact, another frequent hybrid naysayer, BMW, signed on with the JV recently.



Paybacks Are Indeed a Bitch


After some serious setbacks earlier this year, things started to look a lot better over the summer for the U.S. Big Three. Of course, it didn’t hurt to have some of the largest incentive programs ever luring customers in. But a growing chorus of industry analysts fear that with Detroit ’s employee pricing programs now winding down, the coming months could prove disastrous. “A lot of folks who were originally planning to buy cars later this year decided to move their purchases up,” cautioned analyst Joe Phillippi, of AutoTrends, Inc. He believes there will now be significantly fewer potential customers in the market during the final months of the year.


A quick and admittedly unscientific survey of analysts suggests payback from the mid-year incentives could cut sales by perhaps 100,000 a month during the fourth quarter. Phillippi fears the situation could stretch well into 2006, though Michael Robinet, of CSM Forecasting, predicts things will improve by next year, but agrees there’s likely to be rough times in the near-term. Not everyone is so pessimistic. Speaking in Frankfurt, where he attended the annual motor show, Chrysler Group CEO Tom LaSorda insisted “We don’t see any major…payback.” Of course, he added, Chrysler got the last bang for its employee pricing buck, with sales relatively flat. LaSorda acknowledged that General Motors, which scored a 47-percent gain in July sales, has already shown signs of payback, with August sales down 13.2 percent.

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