Friday, June 29, 2007

More On Picking Up Your New Car In Europe

We previously wrote about buying a new European car and picking it up overseas. The Truth About Cars has a nice article on the process as well. Definitely worth a read, especially for people seriously considering this option. And those who aren't yet considering it just might get inspired to do so.

Wednesday, June 20, 2007

Autoblog On The Cost Of Having Too Many Dealerships

Autoblog recently highlighted one cost disadvantage domestic manufacturers have that relates to having too many dealerships relative to their competitors. Some of the numbers are striking. Autoblog reports:

  • "The three US carmakers have 15,741 dealers between them, while the Japanese carmakers have less than 4,000."
  • "Domestic dealers, on average, sell less than half as many vehicles per store annually than a Japanese brand dealer, and most sell far less than that."
  • "A new study by CNW Marketing Research has now tried to quantify the dollar cost [of excess dealerships] and come up with $3.9 billion, or $436 per vehicle."

So why not just reduce the number of dealers? Apparently, franchise laws make it nearly impossible to close a dealership unless the owner agrees. So, the Big 3 probably either have to live with this situation or pay the dealers to close. And the latter seems an unlikely outcome for any meaningful number of dealerships.

Monday, June 18, 2007

Vying For Consideration In The Auto Biz

The Wall Street Journal has an interesting article touching on some of the points made in our recent posts (and readers' comments thereon) on GM's decision to put competitors' cars in their Chevy and Saturn dealerships. (First post. Second post.) Joseph White writes, "The risk that visitors to the Saturn store who drive both cars will like the Camry better is real. But it's not greater than the risk that the Aura will just vanish in the swarm of cars chasing the Camry."

Indeed, Edmunds' data showed that the Aura didn't get a big boost in traffic even after it received the North American Car of the Year award. But, traffic is up lately. And that's all the challengers in any segment can hope for--just getting considered by potential buyers.

Friday, June 15, 2007

10% Higher MPG For Just $400

Would you pay $400 to improve your car's fuel economy by 10%? Autoblog is reporting that MAXAIR's ATMI (Automatic Tire Monitoring & Inflation) system, which may be available as an option on new cars in the future, can automatically monitor tire pressure and keep your wheels at the correct pressure.

Because under inflated tires can lower fuel economy by about 10% and cause undue wear on tires, the cost of this option might make it very appealing (and cost-effective) to new car buyers. Properly inflated tires also offer a safer ride.

As usual, the discussion comments at Autoblog are very interesting and insightful, ranging from how the MAXAIR system works and why it'll likely cost more than $400 to consumers to why you wouldn't just put a $15 air compressor in the trunk and monitor your tires' inflation levels yourself.

Wednesday, June 13, 2007

Some Cool Cars Coming

I'm still partial to the Tesla Roadster, the electric-powered, high-performance sports car expected to ship in late 2007 that you can buy now for a mere $98,000. But, AutoblogGreen has a post up introducing us to another high-performance electric sports car, Lightning Car Company's Lightning GT. Production for the Lightning GT is expected to begin in 2008. There are also all kinds of technical details about the Lightning GT in the post.

And Popular Mechanics introduced us to another interesting ride, the Gibbs Aquada. Dubbed "the Boatmobile," you can drive the Aquada on land and in water!

Monday, June 11, 2007

Saturn A Succes? Not Yet Claims AutoSavant

AutoSavant takes an interesting look at Saturn's heretofore unquestioned success in 2007. They claim that Saturn's spectacular increase in sales (+30% in 2007 and +75% in May) is a result of having more models available for sale. Even so, they point out that the following car models each sold more vehicles than the entire Saturn line: Chevy Impala, Honda Accord, Nissan Altima, Toyota Camry, and Toyota Corolla.

Their conclusion: Saturn must still prove it can capture sales by increasing demand for its established models and not just by introducing new ones.

More On Air-Powered Cars!

For those of you yearning for more information on MDI's air-powered car, Autoblog Green has an interview with Michael Celades, MDI's Sales Manager in Barcelona, which is definitely worth a read. Celades even hints that the cars--which are expected to go into production in India in the near future and in Europe shortly thereafter--could eventually come to American soil.

Does Initial Quality Matter?

You've probably seen a number of articles and posts recently about the J.D. Power and Associates recently-released Initial Quality Study. The most interesting report I saw was by The Wall Street Journal. With all the hoopla surrounding the J.D. Power and Associates report, they simply asked: Is Initial Quality Still Relevant?

Take a look at some of the "scores" from the study. Here is the list of the 5 brands that scored best in the study, including their respective number of "problems" reported per 100 vehicles sold in the first 90 days after purchase.
  • Porsche - 91
  • Lexus - 94
  • Lincoln - 100
  • Honda - 108
  • Mercedes-Benz - 111

The industry average number of problems has stayed between 118 and 124 in recent studies. That means that, on average, every new car sold is going to have "about" 1 problem with it. Does the difference between a "good" score of 108 and an "average" score of 120 mean a lot to the average car-buyer? Probably not in the first 90 days after purchase. Either way, you're probably still going to have to take the car to the dealer to fix something. (Although, maybe cars with higher scores also tend to have more problems later in their lives.)

The article does point out, though, that the difference highlighted above--i.e., 12 additional problems per 100 vehicles sold--does matter a lot for manufacturers. Basically, more problems means more things to fix (often mechanical requiring replacement parts), which means more parts and labor costs for the manufacturer. When you multiply those 12 problems per 100 cars over the total volume of cars sold for each brand, you start getting into some pretty big numbers.

One last interesting tidbit from the Initial Quality Study itself: J.D. Power and Associates found that 3 out of 4 newly-redesigned models perform worse in initial quality than their predecessors. Is that enough to give you second thoughts about waiting for the "new" version of model to come out before buying?

Tuesday, June 5, 2007

Revisiting In-Car Navigation Systems

Last month we wrote about the high cost of in-car navigation systems. The Truth About Cars blog had a related post yesterday which further discusses the pros and cons of in-car versus portable navigation systems.

One point they make is that buying cars, especially high-end models, without the expensive in-car variety is becoming more difficult. Maunfacturers, perhaps reacting to the competitive threat that portable devices pose, are increasingly offering in-car navigation systems bundled in options packages with other in-demand options, such as upgraded stereo systems. So, instead of seeing the in-car navigation option listed at $2000 (versus $500 or so for a portable device), you see that the in-car navigation system comes with the Technology Option Bundle, which costs $4200.

Bundling in-car navigation with other options might allow dealers to protect the huge markups they put on the in-car navigation technology. But car buyers shouldn't fall for it. The Truth About Cars says that the invoice cost of the in-car nav systems to dealers is $400 to $500. Don't pay more.

Saturday, June 2, 2007

Of Warranties And Air-Powered Cars

Autoblog had a number of interesting posts over the past few days.

Here, they talk about Hyundai's new extended warranty for its Certified Pre-Owned Vehicles. It's a limited powertrain warranty for 10 years / 100,000 miles dating from the original date of sale. As I understand it, that effectively means that buyers of Hyundai Certified Pre-Owned Vehicles will get at least a 5 year / 40,000 mile powertrain warranty (depending on the age of and mileage on the used car). That's pretty nice for a used vehicle.

We previously wrote about consumers' seemingly poor opinion of the quality of Hyundai products. With programs like this (and its similar warranty on new vehicle purchases), Hyundai may be able to win over more customers to experience its quality first-hand.

And here, Autoblog reports on the world's first air-powered car. It's hard to believe. But, apparently, it's going into production in India, and 12 other countries are interested in it as well. Autoblog doubts it will make it to the U.S., due to safety concerns stemming from its fiberglass and foam body.