Lexus Readying Second Hybrid

Lexus Readying Second Hybrid

Toyota’s luxury arm, Lexus, plans to roll out a second hybrid-electric vehicle with a media preview scheduled during the upcoming New York Auto Show. The GS450h will be the first luxury sedan with a hybrid powertrain, and the first HEV in any form on a rear-wheel-drive platform. Its Big Apple unveiling is scheduled to occur about the same time the first Lexus hybrid, the RX400h crossover, hits showrooms. Company officials are being tightlipped about specific details, but Lexus will start with the new GS430, and mate a version of its Synergy Drive system to the sedan’s already beefy V-8. Where early hybrids, such as Toyota’s breakthrough Prius, focused on delivering maximum mileage, Lexus is taking a different tack. The RX400h will trade off a bit of fuel economy to increase acceleration. And in the GS450h sedan, the emphasis will be on “pure performance,” hinted Lexus General Manager Denny Clements, noting that electric motors deliver maximum torque during initial acceleration. Expect to see the hybrid roll onto the market about a year after the launch of the new, gasoline-powered GS models. —TCC Team

2005 Toyota Avalon by John Pearley Huffman (1/26/2005)
Build a better Lexus, and possibly get fired?

Lexus Looking at Performance Badge

Lexus is looking at both ends of the powertrain spectrum and along with its fast-growing lineup of hybrid-electric vehicles, the Toyota division may also launch a high-performance brand-within-a-brand, along the lines of the Mercedes-Benz AMG series and Cadillac’s new V series. “It is being seriously studied,” Lexus General Manager Denny Clements told He quickly added that, “I’m not telling you we’re going to do it,” though Clements stressed that he is “absolutely” in favor of the idea. “We need to have a flagship in every segment, like AMG.” A hint of what might come was offered during the recent Detroit auto show, when Lexus lifted the covers on the LF-A supercar. The 200 mph two-seater is officially being referred to as a concept vehicle, though Clements acknowledged, “We really want to build the car,” which borrows on the know-how Toyota has gained through its efforts on the Formula One racing circuit. If priced around $125,000, the Toyota Group Vice President estimated there’d be a market for as many as 100 a month. The LF-A underscores the effort by Toyota to create more passion around the Lexus brand. “An imperative now is to create more buzz,” said Clements. “It’s not about volume. It’s about image.” —TCC Team

Hyundai/Kia Opens Proving Grounds

South Korea's top automaker Hyundai Motor Co., yet to open its Alabama plant in the U.S. in March this year, officially opened Wednesday its first U.S. proving ground in California City, Calif.

The 4300-acre, $60 million facility, named the Hyundai-Kia Motors California Proving Ground, is the test site for next-generation Hyundai and Kia vehicles, it said.

Hyundai Motor said the opening of the first Hyundai Motor's proving ground outside South Korea reaffirms its commitment to designing, testing, and building Hyundai products in the United States for North American consumers.

The Proving Ground site is located 100 miles north of Los Angeles in the Mojave Desert. Construction began in February 2004 and was substantially completed in October 2004. The grounds include a 6.4-mile oval track, 2-million square-foot Vehicle Dynamics Area (VDA), a 2.75-mile winding track, a 3.3-mile hill road, and various special surface roads constructed to duplicate U.S. highways.

The Proving Ground also includes a 30,000 square-foot office complex for its 50 staff members.

GM Spending in Fort Wayne Plant

General Motors will renovate its truck plant in Fort Wayne, Ind., as it prepares for the next generation of full-size pickups. The company said on Wednesday that it would spend $175 million to retool the plant, which currently has 2900 workers and will add 200 more to its workforce as GM ramps up production of the new vehicles. GM built nearly 250,000 Silverado and Sierra trucks in the plant last year. GM will also renovate a truck plant in Flint, Mich., in anticipation of the new big pickups.

GM Earnings Drop 37 Percent by Joseph Szczesny (1/24/2005)
The year ahead will be a struggle with healthcare costs.

Chrysler Spending $419 Million in Belvedere

Chrysler confirms that it will spend $419 million to retool its assembly plant in Belvedere, Ill., prior to the introduction of the replacement for the Dodge Neon and the introduction of new vehicles based on the same architecture. The plant will be outfitted so that it can build a variety of new models expected to come from the new mechanicals; in addition to a five-door wagon, a new four-door and small SUVs for Dodge and Jeep will be a part of the family of new vehicles coming to Belvedere. In addition, the plant will also be able to build vehicles in the mid-size class, which could affect production plans at Chrysler's facility in Sterling Heights, Mich., which currently assembles the Dodge Stratus/Chrysler Sebring sedans. The renovations in Illinois will bring with them an additional 1000 jobs, which could come from the ranks of Chrysler employees laid off in previous downsizing measures. Production of the new vehicles begins in early 2006.

Flint: (Pipe) Dream Cars by Jerry Flint (1/24/2005)
Instead of focusing on two-seaters, how about soccer moms and Dream Explorers?

Brady Suing GM Over Super Bowl Caddy Ads

Super Bowl champion and New England Patriots quarterback Tom Brady is suing General Motors, claiming that the automaker is airing ads outside of a contract he signed to promote Cadillac. Brady is suing GM for $2 million, Reuters reports, because GM ran ads featuring him for a month past the expiration date of January 1, 2004, after he declined to renew his endorsement deal. Brady is once again leading the Patriots into this year’s Super Bowl on February 6 in Jacksonville, when the Pats take on the Philadelphia Eagles.

GM's Adams The Latest Cookie Cutter To Leave Detroit

Roger Adams, General Motors’ executive director of advertising, marketing and customer relationship management, is leaving on February 3 to take a top marketing post at Atlanta-based Home Depot.

Adams, a former cookie and cracker marketer, is the latest packaged goods executive to exit Detroit. At the end of 2004, former Pepsi executive C.J. Fraleigh, who was head of the Buick-GM-Pontiac division, left GM to take a high-level post at Sara Lee Corp. Ford Division marketing chief Rich Stoddart, who came to Ford from ad agency Fallon-McElligott where he was best known for working on McDonald’s business, recently parted to go back to the ad agency world.

Adams, 48, came to GM in 1996 from stints at RJR Nabisco and Keebler as part of the great “brand management” experiment perpetrated by former GM president Ron Zarrella under the direction of former GM chairman John Smale. Smale, former CEO of Procter & Gamble, brought in Zarrella and had an idea about remaking GM’s marketing in the style of P&G. It didn’t work. Cars are not marketed like soap and toothpaste, and GM discovered it had become a slave to focus groups that were draining the blood out of nearly every design at the company. Ad campaigns treated products like Impala and DeVille as the main brands to be pitched, while the house brands like Chevy and Cadillac went underfed.

None of the packaged-goods executives recruited by Zarrella turned into permanent fixtures at GM. Adams had attained the highest position.

Adams took up his latest post at GM about a year ago after running Buick-Pontiac-GMC. While GMC’s marketing has been steady and successful, Adams allowed frequent changes to Buick’s and Pontiac’s marketing strategies that have left both brands adrift as new products are being added to the portfolios. —Jim Burt

GM Earnings Drop 37 Percent by Joseph Szczesny (1/24/2005)
The year ahead will be a struggle with healthcare costs.

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