Daily Edition: Feb. 10, 2006

February 10, 2006

2008 Toyota Tundra: One Big Mother?

In a market increasingly dominated by imports, there's one segment still controlled by the Big Three. But maybe not much longer, at least not if the 2008 Toyota Tundra connects with demanding American full-size pickup buyers. The long-awaited update of the Toyota truck blew into the WindyCity on Thursday, and as one company executive suggested, "it's a big, bad mutha." The Tundra Double Cab Limited on display at Chicago's McCormickCenter, boasts a whopping 145.7-inch wheelbase, a full ten inches longer than the '06 Access Cab model it replaces.

The 5.7-liter V-8 under the hood of the show car will be one of three different engines Toyota offers when the new Tundra comes to market next January. (There'll also be a 4.7-liter V-8 and a fuel-stingy 4.0-liter V-6, according to Toyota Motor Sales CEO Jim Press.) The big V-8 is mated to a new six-speed automatic. The automaker was selective with statistics, declining to provide precise mileage, power, and performance statistics - perhaps hoping to see what General Motors will claim when it rolls out its own new full-size trucks later this year. But one number did generate a buzz among the attendant horde of automotive journalists: the new Tundra will deliver Class 4 towing capacity of up to 10,000 pounds. Toyota officials are clearly nervous that the big truck will skew downward their corporate fuel economy numbers, tarnishing an image otherwise burnished by the high-mileage Prius hybrid. So they took pains to promise that Toyota will maintain the best overall fuel economy of any full-line manufacturer. And company insiders hint a fuel-efficient diesel option is under development, as well.

2006 Chicago Auto Show Coverage by TCC Team (2/6/2006)

 

Boom Times for the Industry?

Last year was the third-best ever for the U.S. auto industry, but just barely. Sales were heavily driven by lavish incentives, and tumbled late in the year when the programs wrapped up. Volumes showed some improvement in January, and Toyota Motor Sales' Jim Press believes the figures will reach 17.2 million for all of 2006, which would be the industry's second-best year. But that's just setting the stage for the boom Press is predicting for the next decade. During the keynote speech at this year's Chicago Motor Show, the Toyota executive said "We believe annual sales of 20 million are in reach within the next decade." Press pointed to a variety of factors for his optimism, including the coming of age of Millennial drivers, booming immigration, and the general affluence of American motorists. It also helps to have Baby Boomers living longer than ever and planning to keep driving as long as possible. Press did admit there's a potentially dark side to automotive growth: rising demand for decreasing reserves of oil, for one thing, resulting in global warming and increased traffic congestion. Products like the high-mileage Prius hybrid are an example, said Press, of how cars can "become part of the solution, not the pollution." And he said that while there's clear demand for more highways, technology will be needed to squeeze more cars onto existing roadways without reaching gridlock. -TCC Team

Domestics Pose Sales Surprise in Jan. by Joseph Szczesny (2/6/2006)
GM, Ford and Chrysler all up for the month.

 

LaSorda: Reports of DCX Collapse Overdone

Tom LaSorda, the Chrysler Group chief executive officer, said despite reports to the contrary, it was premature to suggest that Chrysler's comeback is over. While the company has been reducing production of some vehicles such as the Dodge Durango to reduce inventories, it is using incentives to boost sales of other vehicles. But it also is preparing to launch ten new vehicles this year, which promise to create new opportunities for sales. Most of the new products won't hit the showroom until the second half of the year, he added. However, the Chrysler Group is already studying the feasibility of adding a third shift to its assembly plant in Belvidere, Ill. which is now producing the Dodge Caliber and soon will build the Jeep Compass and Patriot. Production at the Belvidere plant is expected to double this year, he added. The introduction of other new vehicles such as the Dodge Nitro also will boost Chrysler's sales totals this year. LaSorda, however, also stressed the company is taking a close look at costs and has already launched a study of GM's plan to cap the pension benefits and post-retirement healthcare benefits of workers, to see if similar changes make sense for the Chrysler Group. -Joe Szczesny

Zetsche Tightens Control on DC by Joseph Szczesny (2/6/2006)
New DC CEO is putting more distance between his and the Schrempp era.

 

Chrysler Going Its Own Way to Fuel Gains

Ethanol fuel clearly has a place in the U.S. market. "You need to be there with a product," said Chrysler Group marketing czar Joe Eberhardt. But unlike its cross-town rivals, Ford and GM, the DaimlerChrysler unit does not intend to make a big push for E85. Chrysler will focus more of its attention on another type of fuel that could improve mileage and reduce dependence on import oil, said Eberhardt. "We'll take a leadership role in diesels," he told TheCarConnection.com. Chrysler already offers a diesel version of its Jeep Liberty model and a version of its big Dodge Ram pickup. Eberhardt declined to say what other models might be in the offing, but he said diesel will definitely have more of a role at Chrysler. Part of the problem right now is that tough new emissions standards require the most advanced diesel control systems. But that technology won't work in the U.S. until low-sulfur fuel becomes available, about a year from now. Until then, diesels will largely be locked out of markets such as California and New York. But, added Eberhardt, "Eventually, I would see it (the diesel) having the same penetration as hybrids." -TCC Team

 

LaSorda Hits Cost of Litigation

Lawsuits are adding $500 to the cost of every car and truck sold in the United States, said one of DaimlerChrysler AG's top executives. Thomas LaSorda, the chief executive officer of DaimlerChrysler's Chrysler Group, said during a visit to the Chicago Auto Show that the legal system levies what amounts to a tort tax, which results in higher consumer prices, higher insurance rates, higher healthcare costs, and less innovation by American-based companies.

"Perhaps a little blue-collar grounding and manufacturing common sense could go a long way in making sense of the U.S. legal system. It would allow all of us in business to use more of our limited resources where they count," said LaSorda, who was raised in a working-class household in Windsor, Ont., across the river from Detroit.

LaSorda said he was prompted to look at the high cost of the American legal system during his drive to cut costs within the Chrysler Group, which has eliminated 40,000 jobs since 2001. "It was the one area where costs kept rising and I asked why," he said.

What he found was that the legal system, which he says allows witnesses in product liability cases to tell only part of the truth, is badly in need of reform. In many states, juries aren't allowed to hear whether someone involved in an accident was wearing a seatbelt or if they were driving under the influence of drugs or alcohol.

"We need to set some reasonable and fair limits on damages," he added. "For every dollar awarded in tort liability, the typical injured party receives only about 46 cents to compensate them for injuries. That means the majority of every dollar goes elsewhere," added LaSorda, who noted that lawsuits have become one of fastest growing industries in the U.S. and now generate more than $46 billion in fees annually.

The U.S. now spends about 2.23 percent of its GDP on legal fees and other costs associated with litigation while countries such as France, Japan, and Canada spend less than one percent of the gross domestic product on litigation. "In my business, we have a word for this kind of non-value added cost: waste," LaSorda said.

LaSorda also said, "There is no question that the employer-based healthcare system is broken. While other countries have found a way to help their businesses with the burden, we've not done this in the United States. Healthcare is an important structural issue that needs to be addressed but this will require long-term solutions across all industries," added LaSorda. -Joe Szczesny

 

OnStar Readies New Service

General Motors Corp. used the tenth anniversary of OnStar's introduction back in 1996 to bring on a new service that offers drivers directions through the car's audio system. The new system will eliminate the need for video screens and helps the driver keep his eyes firmly on the road, according to Chet Huber, OnStar President. Users call an OnStar advisor and ask for directions. In turn, the advisor, using GPS, sends the most direct, step-by-step directions to the vehicle via the OnStar system. Audio directions are then played through the vehicle's stereo system when they are needed even if the driver is playing the radio or a CD. A small display on the instrument cluster also can be used to relay text directions. The system also will automatically issue corrective instructions if the vehicle strays off course. Huber said GM believes the new system will appeal to consumers who already depend on OnStar for peace of mind. GM is prepared to equip as many as one million new vehicles with the turn-by-turn technology at the start of the 2007 model year later this year, Huber said. The system uses an enhanced wireless data network and improved positioning technology. -Joseph Szczesny

 

Humvee Out, International MXT In the Army?

A quiet revolution is underway in the sourcing of military vehicles and the International Truck & Engine Corp. of Chicago is hoping that its new $69,900 MXT 4X4 can fit into the mix. "The new MXT is a symbol of our company's commitment to breaking through into new markets," said Dee Kapur, president of International Truck Group. Kapur said that International has been asked to provide prototypes of the truck to the U.S. Department of Homeland Security and the U.S. Department of Defense for use by agencies such as the U.S. Border Patrol, the U.S. Army, and other services. Kapur also confirmed that International also has won one contract from the DOD to build a prototype for a vehicle that would eventually become the replacement for the U.S. Army's fleet of Humvees. Lockheed Martin also won a contract to build a prototype. But AM General of South Bend, Ind., appears to have been shut out of the competition, which is being refereed by the U.S. Army's Tank & Automotive Command in Warren, Mich. -Joseph Szczesny

York: GM Should Drop Saab, HUMMER by Joseph Szczesny (1/10/2006)
Company has 1000 days of cash left, Kerkorian's wingman says.

 

MotorWeek Gives Civic the Nod

The Honda Civic walked away with "Best of Year" award from MotorWeek, the weekly PBS show that bills itself as television's "Original Automotive Magazine." John Davis of MotorWeek said that "the suite of Civics" that Honda brought out last fall were "the right vehicle for the right time." The Honda Civic also walked off with a Drivers' Choice award from MotorWeek as the Best Small Car, while the Hyundai Sonata was named the best family sedan. The Honda Odyssey was named the best minivan while the Pontiac Solstice was named the best convertible and the Infiniti M was named the best luxury sedan. The Ford Mustang was named the best peformance car and the Toyota RAV4 was named the best small sport-utility vehicle, while the Ford Explorer/Mercury Mountaineer walked off with a Driver's Choice Award as the best family sport-utility vehicle. The Ford F-150 was named the best pickup truck; the Toyota Highlander Hybrid was named the best eco-friendly vehicle; and the Chevrolet Corvette Z06, Dodge Viper SRT10 Coupe, and Ferrari F430 were named the best dream machines. -Joe Szczesny

 

AutoNation, Lithia Post 2005 Revenue, Profit Gains

AutoNation, Inc. and Lithia Motors weathered severe storms and sales downturns at General Motors and Ford in the fourth quarter, each publicly-owned dealership group recording revenues increases for the full year despite the challenging climate. Lithia's 94 western and southwestern dealers boosted total revenues for 2005 by ten percent to a record $2.94 billion. The Medford, Ore.-based Lithia, whose top vehicle supplier is Chrysler Group, reported that net income for the year advanced to $49.8 million despite a dip in the fourth quarter.  Chairman and CEO Sid DeBoer attributed the late-year decline to a "pullback" of new-vehicle sales caused by the "employee price" strategy used by the American brands in the summer months.

Top megadealer AutoNation was hit hard in the final period by Hurricane Wilma, which damaged nearly all the Fort Lauderdale-based group's Florida dealerships. Chairman and CEO Mike Jackson said that the fourth-quarter sales declined at AutoNation to $4.485 billion and net income to $75.3 million from $4.751 billion and $161.8 million a year earlier. "All our Florida stores are back in operation now," said president and COO Mike Maroone in a media/analyst conference call.

For the full year, AutoNation's 280 dealerships tallied $19,253 billion in revenues, up one percent from the prior year. Net income reached $496.5 million, up from $433.6 million in 2004. Jackson called on automakers to adopt "transaction prices" as their listed suggested retail prices, which would be markedly lower than the prices shown now on the Monroney labels. "If we can deal with market prices, we can accept the profit-margin trims the Detroit automakers have imposed," Jackson said. -Mac Gordon




  

FROM THE SOURCE headlines from the latest press releases

PRNewswire

A new survey reveals that more than 7 out of 10 consumers do not check their personal credit score (76 percent) or compare financing options from dealers (71 percent) and credit unions / banks (72 percent) before heading to the showroom. This is despite the fact that almost 6 out of 10 (57 percent) of those polled say they do conduct research on particular car or truck models before going to the dealer.

The Jeep(R) brand is celebrating 65 years of go anywhere/do anything capability with special edition models of the 2006 Jeep Commander, Jeep Grand Cherokee, Jeep Liberty and Jeep Wrangler, all equipped with popular and unique features. These limited production vehicles will be on display during press and public days at the 2006 Chicago Auto Show, February 8-19 at

McCormick Place
. The Jeep 65th Anniversary Edition vehicles will be offered in Light Khaki, Dark Khaki, Bright Silver, Black, and a new color, Jeep Green. The MSRP of the Jeep Commander 65th Anniversary Edition is $28,880 for the 4x2 version and $30,880 for the 4x4 version. The 3.7-liter V-6 engine is standard; the 4.7-liter V-8 is optional.




 

Name Symbol Last Change
Autobytel, Inc. ABTL 4.96 -0.02 (-0.40%)
Autoliv Inc. ALV 51.00 +2.63 (+5.44%)
AutoNation Inc. AN 21.36 -0.74 (-3.35%)
ArvinMeritor Inc. ARM 16.10 -0.28 (-1.71%)
American Axle & Mfr. Holdings Inc. AXL 16.73 -0.04 (-0.24%)
Ballard Power Systems Inc. BLDP 5.37 -0.02 (-0.37%)
BorgWarner Inc. BWA 53.80 -0.55 (-1.01%)
Cummins Inc. CMI 99.71 +0.01 (+0.01%)
Dana Corporation DCN 4.22 -0.09 (-2.09%)
DaimlerChrysler AG (ADR) DCX 57.14 +0.37 (+0.65%)
Dura Automotive Systems DRRA 2.68 +0.39 (+17.03%)
Eaton Corporation ETN 66.37 -0.34 (-0.51%)
Ford Motor Company F 8.36 +0.13 (+1.58%)
General Motors Corporation GM 22.14 +0.15 (+0.68%)
Gentex Corporation GNTX 16.96 -0.30 (-1.74%)
Goodyear Tire & Rubber GT 14.70 -0.12 (-0.81%)
Honda Motor Co. Ltd. (ADR) HMC 28.78 -0.08 (-0.28%)
Johnson Controls Inc. JCI 67.25 +0.22 (+0.33%)
Lear Corporation LEA 23.06 -0.04 (-0.17%)
Magna International Inc. MGA 72.14 +0.14 (+0.19%)
Motorola Inc. MOT 21.61 -0.08 (-0.37%)
Nissan Motor Co. Ltd. (ADR) NSANY 22.09 -0.06 (-0.27%)
Sonic Automotive Inc. SAH 24.00 +0.06 (+0.25%)
Siemens AG SI 90.46 +0.92 (+1.03%)
Sirius Satellite Radio SIRI 5.80 -0.18 (-3.01%)
Toyota Motor Corporation (ADR) TM 102.51 -1.39 (-1.34%)
TRW Automotive Holdings TRW 25.76 -0.01 (-0.04%)
Tower Automotive Inc. TWRAQ.PK 0.075 0.00 (0.00%)
United Auto Group Inc. UAG 38.70 -0.30 (-0.77%)
Visteon Corporation VC 4.84 +0.22 (+4.76%)
XM Satellite Radio Hold. XMSR 25.78 +1.17 (+4.75%)
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