Monday, May 28, 2007

General Motors At It Again!

A couple of weeks ago, we wrote about GM's suggestion that Chevy dealerships should put Toyota Camrys in their dealerships to show first-hand how their new Malibu stacks up. Well, now Saturn dealerships are apparently looking to implement a similar strategy by making available a Camry and / or a Honda Accord for comparison to the new Saturn Aura.

This article suggests that you'll not only be able to touch and feel these Aura competitors at your Saturn dealership, but that you'll be able to test drive them as well! My guess is that you could only pull that off in a Saturn dealership. Imagine the push-back you'd get from salespeople at other places, if they were asked to take people out on test drives for cars they couldn't even sell!

As Valdes-Dapena writes in his article, GM probably figures it has nothing to lose by putting competing models in its Chevy and Saturn showrooms, because it is trying to get people to just consider its products as alternatives to the Camry and Accord, the category leaders. But why don't they put the Aura in Chevy showrooms and the Malibu in Saturn ones? At least then they might drive incremental sales for GM instead of its competitors.

Thanks to CarDomain for the link.

Thursday, May 24, 2007

Got An I-Key?

Autoblog has a post on the danger of putting your Nissan Altima or Infiniti G35 I-Key in the same pocket as your mobile phone: Your phone can render the I-Key, which enables and disables the cars' keyless ignition system, totally inoperable. And there's no fix. You'd have to get a new one.

Nissan's apparently working to fix the bug and plans to get new I-Key fobs to owners once it's figured it out.

Wednesday, May 23, 2007

Making Your Point

In a nice followup to Todd's post about the danger of talking on your cell phone while driving comes this news item - California senator Carole Migden crashed her SUV while reaching to answer a call. By the time she actually crashed, the California Highway Patrol had already received six complaints from other motorists about her driving just before the accident. At one point, she actually bounced her SUV off of the concrete barrier on the side of the highway.

Why is this relevant? Well, Senator Migden was a recent signer of a bill banning talking on a cell phone while driving. Talking about going all out to prove your point!

Tesla To Sell Its Batteries To Other Electric Car Manufacturers

Inside Line reports: In a major development that is expected to spur development of batteries for electric cars in the United States, Tesla Motors has created a new division to sell batteries to other companies. The new division is being lauded as a bold step for Tesla that will help it expand faster while providing a launchpad for other electric-vehicle manufacturers.

Hey, I'm all for more fuel-efficient vehicles out there. And especially supportive of anything that might drop the price of this beauty.

A Few Articles On The Impact Of High Gas Prices

We've seen a number of articles in the past few days that discuss the rising cost of fuel and the impact on drivers' behavior and car-buying patterns. Here's the run-down.

Automotive Digest cites a Kelly Blue Book study that talks about where drivers plan to save money now that they're paying a lot more for their gas. At the top of the discretionary spending list are shopping, eating out, and entertainment. They also report that because of rising fuel costs, 59% of new vehicle shoppers are considering vehicles they wouldn't otherwise consider. That sounds like good news for those manufacturers with the most fuel-efficient offerings and bad news for the fuel-economy laggards.

The Driving Woman talks about a USA Today analysis that concludes that Americans are cutting down on their driving for the first time in 26 years. Would you believe 10% of survey respondents have actually changed their jobs to shorten their commutes? The graphics alone at the beginning of the USA Today analysis are worth a click-through.

And Jalopnik cites an article on msn.com claiming that higher gas prices have increased the cost of operating a passenger car in the U.S. an average of $146 so far this year. That's $20 billion total. And Jalopnik reminds us that if gas hits $4.00 per gallon by this summer, as many have predicted, the total cost per vehicle will be in the neighborhood of $400 this year, the same amount as the Bush tax cut from a few years back.

Tuesday, May 22, 2007

NYC Taxis To All Be Hybrids By 2012

The Wall Street Journal has an article today discussing New York City Mayor Mike Bloomberg's mandate that all NYC taxicabs will be hybrid vehicles by 2012. According to the article, less than 3% of NYC's roughly 13,000 cabs are currently hybrids.

Excerpt: City officials said the new standards, when fully implemented, are expected to reduce carbon emissions by more than 200,000 tons per year. Hybrid vehicles are typically more expensive, but the city said the increase in fuel efficiency will save taxi operators more than $10,000 per year.

When I read that, I wondered why more taxis aren't already hybrids. Savings of $10,000 per year? That looks like a no-brainer investment. Sure, you'd have to spring for a new car. But you'd get significant savings pretty quickly. There must be plenty of savvy financial institutions in NYC that would fund that kind of investment.

The New York Times also has an article on the matter. They raise the point that the car that now dominates NYC taxi fleets, the Ford Crown Victoria, has significantly more leg room for passengers than any of the approved hybrids. Maybe that's a reason for slow uptake of hybrids to this point.

There are apparently six hybrid models that can be used as taxis in NYC: Ford Escape, Toyota Highlander, Lexus RX 400H, Toyota Prius, Honda Accord, and Honda Civic.

Monday, May 21, 2007

Scam Proof Your Life

Edmund's Strategies for Smart Car Buyers blog tipped me off to Scam Proof Your Life. I haven't read it yet, but it looks like a winner. And it's on its way to my house from Amazon, where it gets top reviews.

Chapter 1 is apparently devoted to scams you'll encounter when buying a car. But I'm guessing everyone can find something of value in this book, whose subtitle is "377 Smart Ways to Protect You & Your Family from Ripoffs, Bogus Deals & Other Consumer Headaches". I'll write more when I've finished reading...

Saturday, May 19, 2007

Hands-Free Phone Conversations Dangerous For Drivers, Study Says

Many places, including the UK, have mandated the use of a hands-free calling device if a driver wants to use a cell phone while operating a vehicle. There has been concern for years whether making phone calls while driving--even with a hands-free device--is safe. Supporters of hands-free calling claim that such calls are similar to speaking with a passenger in the back seat, for example. Well, this study by the Transport Research Laboratory (TRL) of the UK's Department of Transport came to some pretty unsettling conclusions about such calls.

Automotive Digest recently summarized the findings of the TRL's study. (Original UK-based link here.) But TRL's main conclusion is:
  • "One clear implication is that using a mobile phone via a hands-free kit while driving is not equivalent to talking to a passenger. It is a much more difficult task. The obvious conclusion is that it is not worth the increased potential risk of using a hands-free carphone."

TRL suggests that hands-free calling is more difficult than talking to a passenger in the vehicle because:

  • The lack of proximity of the conversationalist and the possible pauses in the voice transmission require the driver to exert more mental effort on the conversation; and,
  • The person on the other end of the line is not present in the car like a passenger, and therefore cannot react to changing road conditions to help the driver in the same way a passenger can.

TRL also found that drivers engaged in hands-free calling tend to drive faster, with more variation in speed, and that their ability to safely follow vehicles in front of them lessened.

This study is the first I've seen that supports the evidence we've all seen first-hand on the road. How many times have you seen a car being driven poorly or dangerously on the road only to later notice that the driver is talking on a cell phone--hands-free device or not? If more such studies come to similar conclusions, we might see more companies ban their employees from having hands-free phone conversations while driving or even governmental regulations to prevent it. In the meantime, these conclusions may be enough to make you consider whether it's really worth taking a call next time you're behind the wheel.

Wednesday, May 16, 2007

A Look At Brand Value In The Auto Biz

Business Week has an interesting story in its current issue that deals with one auto manufacturer's struggle to improve its brand image and highlights the value of having a good brand in the auto biz. Before I tell you the companies discussed, take this little quiz:

How are the following manufacturers ranked according to J.D. Power's 2006 Initial Quality Study?

  • Honda
  • Hyundai
  • Toyota

Drum roll, please.....

  • Hyundai (3rd)
  • Toyota (4th)
  • Honda (6th)

But Hyundai's higher finish in this study doesn't mean consumers are feeling the same way. Business Week reports that just 23% of all new-car buyers in 2006 even considered a Hyundai, while 65% considered Toyota and 50% considered Honda.

Even worse for Hyundai is the implication is that its brand actually hurts its ability to sell its vehicles. Apparently, an ad agency bidding for Hyundai's business ran a test on Hyundai's new Veracruz crossover. As Business Week reports: "When a group was shown the vehicle without any identifying logos on it, 71% said they'd buy it. Once the Hyundai logo went on, however, that dropped to 52% [while] a Toyota logo lifts intent-to-purchase by more than 20%."

Looks like it's one thing for a company to improve the quality of its product above its competitors and another thing altogether for that company to actually convince consumers to vote with their wallets for their brand. It can take years to build a good reputation in the auto industry, and--barring a public relations disaster--would probably take years to lose a good rep as well.

Tuesday, May 15, 2007

HOV Lane Toll: $10 Minimum

While on a trip to Jakarta about 12 years ago, I saw a collection of people assembled just outside the entrance from a main motorway to the main road through the Central Business District. Curious, I asked my taxi driver what they were doing. He explained that Jakarta had driving restrictions in place during rush hour that prohibited cars with fewer than 2 people to use that road. The people were waiting to be hired by drivers with no one else in their cars so they could legally travel the road and easily pass through the police checkpoints without getting ticketed. "Only in the developing world," I thought.

Apparently not. AutoBlog reports that there's a guy in San Francisco who rents himself out for $10 - $20 one-way to help commuters bypass the congestion on the highway by getting them in the HOV lane. He's reportedly making $100 to $300 a day, or $2000 to $6000 per month (assuming 20 work days per month). It's a crazy world. Everywhere.

Monday, May 14, 2007

Coming Soon To Chevy Dealer Showrooms...Toyota's Camry!

Well, you don't see this every day. AutoBlog says that Chevy's car marketing director, Cheryl Catton, is suggesting that Chevy dealers put Toyota Camrys in their showrooms to let potential customers of the redesigned Malibu (expected around the turn of the year) compare the vehicles side-by-side. Catton, by the way, suggested that Chevy dealers should rent the Camrys so as to not artificially inflate sales of the competitor's vehicle. It'll be interesting to see if this actually materializes.

Cerberus is Chrysler "Winner"

Well, you can read about this one just about anywhere today: private-equity firm Cerberus is buying Chrysler from DaimlerChrysler AG. I happened to find an interesting article in The Wall Street Journal.

The Journal reminded readers that Daimler-Benz paid $36 billion for Chrysler Group back in 1998. Even though Cerberus has committed $7.4 billion to this deal, Daimler will receive just $1.35 billion of that (although Daimler will retain nearly 20% ownership in Chrysler), as Cerberus will pump the remaining $6.05 billion into Chrysler's businesses. Furthermore, Daimler is expected to write checks totalling nearly $2.5 billion to exit Chrysler's money-losing business between now and the time the deal actually closes. That is a colossal loss of shareholder wealth perpetrated by Daimler over the past nine years. Whoops.

Which begs the question why Cerberus--or any other private equity firm for that matter--would want to own Chrysler. Private equity guys normally pay up for businesses that generate huge, recurring amounts of free cash flow. Last check, that description didn't fit the auto industry in general and certainly not Chrysler specifically. In addition to the $7.4 billion in cash Cerberus is putting into this deal, they'll also inherit Chrysler's roughly $18 billion in retirement and health-care liabilities.

To Cerberus' credit, they do own a stake in GMAC, so there may be some potential synergies between that business and Chrysler's financing arm. And Cerberus' rental car holdings include Alamo and National, which make significant vehicle purchases for their fleets.

Still, it'll be interesting to see how this one works out financially, and whether Cerberus can get better returns than Daimler did with its Chrysler investment.

Sunday, May 13, 2007

Dave's Dream Car Available

Those BrightCar aficionados out there know that Dave's dream car is the Lotus Esprit submarine James Bond drove in The Spy Who Loved Me. Well, AutoBlog tells us that one of the four Lotus Esprits built for that movie is up for auction! Only problem, it seems, is that it's not equipped for road use. Oh well, I suppose you could tool around in it in the water, Dave.

Thursday, May 10, 2007

In-Car Navigation Systems Very Costly

Autoblog pointed us to a Kicking Tires post that cited this USA Today article. Basically, the value of in-car navigation systems depreciates quickly. People looking to buy used cars aren't willing to pay up for the technology.

I think this rapid depreciation is due to a few things:
  • In-car nav systems aren't really worth the $2000 or so dealers charge for them as options on new cars. The evidence: you can find nearly-comparable portable devices for about a third as much. Is it worth paying 3 times more than the cost of a portable GPS device to have it permanently affixed to your car?
  • Portable devices offer advantages over in-car systems. Namely, you can take them with you wherever you go. Going on a trip? Bring the portable for your rental car. You can use it for navigating unfamiliar streets as well as finding restaurants and attractions as you walk around town. Going overseas? Update your portable device with an overseas map set / data set and enjoy the benefits there as well. Also, if you buy a new car, you don't have to give up your portable GPS device, like you would an in-car system.
  • As James Clark in the USA Today article says, used car buyers might be more interested in finding a bargain than in finding a car with the latest technology. Furthermore, if you're looking to buy a used car that's, say, 3 years old, that in-car nav system is already 3 years outdated. I don't think I'd pay up for that either.

For what it's worth, I've got a nice little Garmin nuvi. I've found it very handy navigating the streets in my new town as well as helping me find what I'm looking for when travelling. It's very useful--more useful, in fact, than an in-car system that I couldn't take with me while traveling.

For my money, the portable GPS devices offer more functionality and usability for about a third the cost of in-car systems.

Tuesday, May 8, 2007

Oil change 101

Are you a real man (or woman, for that matter)? Do you chop your own firewood? Hunt your own food? Change your car's oil yourself?

Yeah, me neither. But I'd like too! At least, the changing my own oil part. If the day had about twice as many hours, I just might do it myself, but the Jiffy Lube on every corner is too tempting. If I were to do it myself though, This detailed walk-through from the Autoblog would be an outstanding resource. They really did a nice job with this guide, with lots of detail and a lot of useful photographs. Even if you already are a real man, you'll want to check that out. Heck, if you have no intention of ever dirtying your hands or crawling under your truck, I think you'll like knowing what's under there and what those guys are doing (or should be doing) when you go to the service station.

Since this is the BrightCar Blog, I'd be remiss if I didn't point out that BrightCar can help you schedule your oil changes. It's the most common routine maintenance you should be doing for your car and the one that seems to produce the most suggestions for just how often it should be done. The Quickie Lube places will tell you 3 months or 3,000 miles. Your owner's manual may tell you 5,000 miles and that expensive synthetic oil may say it can go 10,000 miles. Whichever one you want to go with, BrightCar can accommodate you. You don't need to look at that sticker on your window and try to remember to add 2,000 miles or look in your owner's manual and try to apply their rigid 5,000, 10,000, 15,000 etc. schedule to your actual driving habits and previous oil changes. BrightCar will remind you when you're due based on the schedule you want (or you can keep the schedule that BrightCar suggests based on your car's manufacturer's plan).

Saturday, May 5, 2007

Buying a European Car? Pick It Up Overseas.

Business Week's May 7 issue has an article about U.S. customers who purchase European cars at their local dealer and then travel to Europe to accept delivery. The customers pick up their cars at the manufacturer's "delivery center" and then usually embark on a European vacation behind the wheel of their new car. At the end of the vacation, the car then gets shipped back to the U.S. for the customer's use there.

Mercedes, BMW, Porsche, Saab, Volvo, and Audi apparently all offer these programs, which generally include a discount off the purchase of the car and pre-arranged travel packages. The discounts can range up to 12%, and some manufacturers may also throw in some spending money while overseas.

Of course, these discounts apply to the MSRP of the vehicle, so this might not be as great a deal as it sounds. For example, Edmunds says that the Saab 9-3 2.0T sedan referenced in the article has a True Market Value of $23,200 in my neighborhood. That's $3795 below MSRP. The discount given as part of the European vacation package is reported to be $3160.

From a manufacturer's perspective, I can see how relating such an experience with the purchase of a car would be beneficial, creating more of a personal connection with the brand. I wouldn't be surprised to see more manufacturers offer similar programs in the future.

Thursday, May 3, 2007

The Hunt Is On!

Volvo launches its second hunt on May 4. This is your chance to win a brand new Volvo XC90 and $50,000 in gold. All you have to do is find the treasure chest Volvo dropped somewhere in the ocean. Play along at volvocars.us.

Autoblog has more information and promises a lively discussion here. Good luck!

Wednesday, May 2, 2007

Does My Car Really Require Premium Fuel?

One of the questions we seem to come across a lot is whether it's really required to put premium-grade fuel (i.e., high-octane fuel) in vehicles whose Owners Manuals call for it. We've seen a few articles address this topic recently and this seems to be the consensus:

  • It probably won't hurt your car to put in a lower grade of fuel; and,
  • There may be a drop in performance and fuel economy if you use a lower grade of fuel, but you should test this yourself with a couple of tanks of gas.

As to the first point, Jonathan Welsh--in his Me & My Car feature in The Wall Street Journal--explains that most modern vehicles are equipped with engine-management systems that "adjust the engine's tuning automatically to accommodate a range of fuel grades." But he advises: "In most cases the higher-octane premium fuel allows a car's engine to run at tuning settings that generate optimal horsepower while still operating efficiently. Changing to a lower grade of fuel may result in a noticeable loss of performance, but your car also may run just as well. It's worth trying a thankful or two."

As to the second point, Chris Longhurst over at The Car Bibles explains why (You'll have to scroll down to the "Octane and gas mileage" section, just over a third of the way down) performance may drop with lower-grade petrol. (According to Chris: As the vehicle's engine-management system retards ignition timing to prevent engine knock, engine performance can drop.) He also shares a story of his experience using a lower-than-recommended grade of gas in his engine. (His fuel economy was nearly 20% higher with the higher-grade gas.)