It's not just us!

Even the wonderful perfect Toyota is scaling back its sales goals

Toyota lowers its worldwide sales goal Toyota lowered its global sales target for 2009 by 700,000 vehicles to 9.7 million Thursday, showing that even one of the world's most durable automakers is being hurt by rising material costs, a slowing U.S. market and soaring gas prices, Associated Press reports. "We have been going at top speed up to now," President Katsuaki Watanabe told reporters at a Tokyo hotel after announcing the numbers. "It is time to set more cautious targets." Toyota Motor Corp had previously set a 2009 global sales goal of 10.4 million vehicles. The lower target would still be a 2 percent increase from the company's 2008 sales goal of 9.5 million, but even that figure was cut last month from an initial 9.85 million units.

For Russia With Love

The Dodge Journey and the Jeep Cherokee are two vehicles being featured at this year's Moscow International Motor Show, a market where Chrysler is experiencing explosive growth.

Looking For Success Behind The US
Chrysler’s position internationally has been diminished significantly since the company’s much publicized divorce from Daimler in 2007. For nearly ten years, the company could depend on Mercedes to helping raise the visibility of its Chrysler, Dodge, and Jeep brands or at least provide the backing that the company needed in order to expand its European presence.

A small time player internationally, Chrysler LLC has suffered more than Ford and General Motors during the current economic downturn as its American competitors are well represented overseas. For Chrysler, the company’s business is 90% North American, which has been a disastrous mix for the automaker in a sour economy.

On Display In Moscow
One bright spot for Chrysler is Russia where the automaker is seeing sales increase at rates much higher than the rest of Europe. All three brands are represented in the former Soviet republic and Chrysler is now the third fastest growing brand in that country.

Coinciding with the 2008 Moscow International Motor Show which starts tomorrow and runs through Monday, Chrysler will be introducing two new models to that market — its Dodge Journey crossover and the Jeep Cherokee.

“Although sales in Russia are growing significantly, Russians are in fact only now starting to discover Chrysler vehicles. Let me remind you that Dodge brand was officially introduced in Russia as recently as two years ago here at the Moscow Motor Show,” says John Stech, CEO – Chrysler Russia. “Now, every second car sold by us in Russia is a Dodge and I am sure that the new cars presented here in Moscow will contribute even further to Russians’ interest in our brands.”

Jeep’s Universal Appeal
The Jeep Cherokee is expected to be well received, it having a history in Russia that spans its near 65 year history as the name for an entire segment of vehicles. Like in the US, where most SUVs at one time were all considered “jeeps” whether built by Jeep or not, the same can be said for Russia.

The Dodge Journey is expected to appeal to Russian families who customarily only have one vehicle per household. The Journey serves multiple purposes not the least being that it can seat up to six people or four with extra storage when the third row seat is folded down. Chrysler believes that the vehicle’s minivan attributes and passenger car efficiency will appeal to a Russian audience.

DAH!

For Korean Cars in the U.S., Cheaper Is Better
Sales of the Kia Sorento, a mid-sized SUV, have fallen nearly 37 percent in the last year.

By Jim Henry
South Korean brands Hyundai and Kia have spent years and billions of dollars to add SUVs, crossovers and near-luxury cars to their lineups to live down their reputations for building entry-level cars -- only to find that cheap, and especially fuel-efficient, vehicles are exactly what U.S. buyers want.
Sales have doubled for Hyundai's entry-level Accent.
Not YourFather'sKorean Cars
U.S. sales of tiny models like the Hyundai Accent, the Kia Spectra, and the Kia Rio are up sharply this year. Sure, they're fuel efficient, but it also helps that Hyundai has been largely able to undo its former reputation for poor quality. In July sales of the Accent were nearly double the year-ago month, according to AutoData of Woodcliff Lake, N.J.
But Hyundai's newest model, the Genesis sedan, is aimed at luxury-car shoppers. Starting at $33,000, it debuted in June. With an optional V8, the first V8 ever offered by Hyundai, the Genesis will go for $38,000 suggested retail. That's cheaper than competing V8 models but much higher than any previous Hyundai.
The company hopes to sell about 8,000 units this year, and then about 20,000 a year, says Michael Deitz, manager of product development for Hyundai Motor America in Irvine, Calif. He expects customers to buy about 80% V6 models, and 20% V8s. Right now only V6 models are available. The less fuel-efficient but more powerful V8 goes on sale in October.
A Switch to Unibody
Meanwhile, Kia this month introduces its most expensive model ever: the Borrego, a midsize SUV built on a traditional truck platform instead of a car-like unibody. The trend for the industry, including the next-generation Ford Explorer, is to switch to unibody construction. With its version of the optional V8, the Borrego starts at $31,745.
Kia recognizes what one of its executives called "the elephant in the room," meaning expensive gasoline and the industry trend toward small cars.
"Our head's not in the sand regarding fuel economy. It helps to be the best, or among the best in the segment, when you have consumers studying choices within the segment," says Tom Loveless, vice-president for sales at Kia Motors America. Next year, Kia will add the Kia Soul model for the U.S. market, a squared-off mini-crossover.
Deitz of Hyundai said at an Aug. 12 press introduction for the Genesis in Tarrytown, N.Y., that Hyundai is not abandoning its strength in entry-level models even though it is also introducing more upscale models.
"We're the third-most fuel-efficient brand out there. It's just that there are people who don't know about Hyundai," he said. Deitz cited Environmental Protection Agency figures to show that at a fleet average of 22.7 mpg, Hyundai is only a fraction of a mile per gallon behind U.S. market leaders Honda and Toyota.
Hyundai's Ambitious Plans
Hyundai and Kia both belong to Hyundai Group, which bought control of Kia in 1999. The brands share engines and some components but are still largely separate. Kia is the smaller partner in terms of auto sales, both in the U.S. market and in the domestic South Korean market.
Hyundai Group's big plans for the U.S. market have been dented but not killed by the present sales downturn. Its small cars are selling well this year, but as with other carmakers, sales are way off for its SUVs and minivans.
Kia said earlier it intended to double sales in North America from 2006 to 2010. That time frame has inevitably been pushed back, since sales in 2007 were only 3.8% ahead of 2006, but Kia hasn't dropped the goal, at least not publicly. If that sounds like a lot, consider that Kia's U.S. sales already more than tripled since 1998, to 305,473 in 2007.
Hyundai has been more careful not to put a number publicly on its long-range targets, but the carmaker nearly tripled its U.S. sales since 1999, to 467,009 in 2007. Hyundai is now the No.7-selling brand in the U.S., behind Toyota, Chevrolet, Ford, Honda, Dodge, and Nissan, but ahead of the Chrysler brand. Hyundai and Kia combined would still be No.7 behind Nissan.
Hopes for Global Growth
Hyundai Group is no less aggressive globally. By 2014 the group is expected to more than double its factory capacity from 2001 levels to about 6.7 million, including joint ventures in China and growing capacity in North America, South America, and Europe, according to consulting firm CSM Worldwide of Northville, Mich.
The group's expansion plans are "very, very hyper-aggressive," says Jeff Schuster, executive director of global forecasting for J.D. Power & Associates of Westlake Village, Calif.
"They don't take a step approach, where they focus one area, wait, and then go to another area. They take a buckshot approach. In mature markets like the U.S., they are planning huge expansion. They are also growing swiftly in developing markets, like China. They are in Eastern Europe and through there, they are spilling into Western Europe," he says.
Schuster says that besides the scale of Hyundai's growth itself, he's amazed the group has been able to grow and improve product quality at the same time, something that's tough to do. Some Hyundai and Kia models are among the leaders in J.D. Power quality surveys in the U.S. That would have been hard to imagine in the late 1980s. When Hyundai was first introduced to the U.S. market in 1986, its quality was terrible.
Moving Up the Ranks
"Hyundai in particular is one of the few manufacturers to have had a second chance at life, here in the U.S., anyway. Their quality problems, issues, in the mid- to late-80s essentially led to them leaving the market, but they have turned it around. They did it with long warranties, and they certainly did it with price," Schuster says.
Hyundai has a $1 billion assembly plant in Montgomery, Ala., which builds the Santa Fe crossover SUV and the Sonata midsize sedan. It started production in 2005. Kia is building a $1 billion assembly plant in West Point, Ga., to build the next-generation Kia Sorento SUV starting in 2010, and other models to be named later. Each factory can build up to 300,000 vehicles a year.
Hyundai's Deitz says that sooner or later, the company will move up the ranks of global automakers: "Consumers are slowly becoming aware of it, but Hyundai is one of those big brands out there."

Say it isn't so

NEW YORK -- Chrysler LLC said Wednesday it is weighing options for its iconic Dodge Viper sports car, which could include a sale of the nameplate.
The Auburn Hills, Mich., automaker is mulling strategic options for the Viper, and has been approached by third parties "interested in exploring future possibilities with Viper," Chairman and Chief Executive Bob Nardelli said in a statement.
Chrysler spokesman Todd Goyer declined to name the parties. He said the review is part of a move toward focusing on Dodge's core nameplates.
"Obviously, we want to ensure a strong future for the Viper, but as we focus on the core business we'll listen to people who have expressed interest," Goyer said in an interview.
He said the strategic review was for Viper alone, and added the company was simply reviewing options and no transaction might occur at all.
The review comes as Chrysler and other automakers grapple with a broader industry downturn brought on by a weak economy, high gas prices and slumping demand for large autos. Chrysler's U.S. sales are down 23 percent for the year while industrywide sales have declined 11 percent.
Chrysler has expressed interest in asset sales in the past as it copes with the downturn. Earlier this month, Vice Chairman Tom LaSorda said the company has identified more than $1 billion in "nonearning" assets that it intends to sell to generate cash.
Chrysler, which went private in August after private-equity firm Cerberus Capital Partners LP bought an 80.1-percent stake in the company, is not required to report financial results. However, it has said it's performing ahead of its own expectations, with $11.7 billion in cash on hand at the end of June and earnings of $1.1 billion in the first half of the year before interest, taxes, depreciation and amortization.
Goyer declined to say how much the nameplate might be worth. However, the Viper line, a high-end hot rod nameplate that has been part of the Dodge lineup since 1992, makes up just a fraction of Dodge's overall sales. Dodge has sold 682 Vipers so far this year, compared with more than 62,000 Chargers and 150,000 Rams sold.
Moreover, the Viper has its own assembly plant in Detroit and a manufacturer's suggested retail price of $88,125 on its 2008 model. The nameplate may be past its prime given that small scale and niche focus, said Mike Jackson, director of North American vehicle forecasts for CSM Worldwide.
"Chrysler has some greater priorities to tend to," Jackson said. "The market has changed significantly. Competition within that premium luxury category only intensifies, and as a result, it really puts something like the Viper at a competitive disadvantage from the standpoint that its obviously a very niche focus with limited scale."
In addition, the brand's designer, Trevor M. Creed, is retiring at the end of this month, Chrysler has said. Creed, 63, also designed the Challenger, Ram and Chrysler PT Cruiser.

Tweak Older Vehicles to Boost Mileage

Automakers tweak older vehicles to boost mileage

As gasoline stays near $4 per gallon and U.S. consumers continue to shift from trucks and sport utility vehicles to more efficient models, many automakers are tweaking their older models between model years to boost gas mileage.
In the 2009 model year, the Detroit Three are making multiple changes. But their biggest Japanese competitors, Honda Motor Co. and Toyota Motor Corp., say they aren't making changes in part because they already are using some of the technology.
Some of the models that are seeing improvements:
Chrysler LLC:
_Chrysler Sebring and Dodge Avenger with four cylinders, highway: Up from 30 miles per gallon to 31.
_Jeep Grand Cherokee, two-wheel-drive with 3.7 liter V-6: Up from 15 mpg city and 20 highway to 16 and 21.
_Jeep Commander, two-wheel-drive 3.7-liter V-6: Up from 14 mpg city and 19 highway to 15 and 20.

Ford Motor Co.:
_Ford Escape and Mercury Mariner, two-wheel-drive, four-cylinder engines: Up 2 mpg on the highway to 28.
_Ford Fusion and Mercury Milan, two-wheel-drive, four-cylinder, automatic transmission: Up 1 mpg on the highway to 29.
_Ford Explorer V-8, two-wheel-drive: Up from 13 mpg city and 20 highway to 15 and 21.

General Motors Corp.:
_Chevrolet Cobalt, Pontiac G5 XFE: Up 1 mpg on the highway to 37.
_Chevrolet Malibu, Saturn Aura, Pontiac G6 with four-cylinder engines and six-speed transmissions: Highway mileage up 1 to 3 mpg depending on model, to 33 mpg.
_Chevrolet Silverado, GMC Sierra XFE pickups with 5.3 liter V-8, six-speed automatic transmission: Up from 14 mpg city and 20 highway to 15 and 21.

Sources: Automakers, U.S. Environmental Protection Agency Web site.

DETROIT -- In a normal year, the 2009 Chevrolet Cobalt wouldn't be any different than the 2008 model, save for a few minor cosmetic changes. But this is far from a normal year.
With gasoline still hovering around $4 per gallon, many manufacturers are making far more than the usual tweaks to cars and trucks between model years to squeeze out one or two more miles per gallon and catch customers who increasingly rank fuel economy as a top factor when buying a vehicle.
Automakers say you can expect more of the same as they roll out new technology without waiting for full vehicle updates.
"Fuel economy is very important," said Greg Peterson, General Motors Corp.'s vehicle performance manager for compact cars, including the Cobalt. "That is one of the drivers in the changes that we made."
In the high-mileage version of the Cobalt and its Pontiac sister, the G5, engineers varied the intake and exhaust valve timing to make the 2.2-liter four-cylinder engine burn fuel more efficiently. They arranged with Goodyear Tire & Rubber Co. for tires with lower rolling resistance, and they changed the gear ratios of the five-speed manual transmission so the engine revs more slowly at highway speeds.
The result: an extra mile per gallon on the highway, boosting the Cobalt and G5 XFE models to an Environmental Protection Agency estimated 37 mpg.
GM's competitors also were busy tweaking existing vehicles between model years.
Ford Motor Co. engineers added a six-speed automatic transmission, electric power steering and variable valve timing to the Escape and Mercury Mariner small sport utility vehicles to get another two miles per gallon on the highway.
The four-cylinder, two-wheel-drive version will get 28 mpg, said spokesman Said Deep, yet the 2009 four-cylinder accelerates as quickly as the 2008 Escape V-6.
Changes were made in other models to get similar improvements, Deep said.
Six-speed transmissions, which are used by most automakers, make vehicles more efficient as they start and stop in the city. On the highway, they also require fewer revolutions per minute, increasing efficiency. Electric power steering reduces drag on the engine by removing the belt that powered the old hydraulic system.
At Chrysler LLC, engineers took similar measures on several models but also recalibrated gas pedals, changed to more efficient air conditioning compressors and tweaked transmission shift intervals to make them more efficient.
For instance, Chrysler was able to push the highway mileage of the Sebring and Avenger midsize sedans to 31 mpg, up from 30.
"These are things that we can do right now for the customer," said spokeswoman Sue Keighron. "They may have been changes that we would have made, but not necessarily as quickly as we are doing now."
Honda Motor Co. and Toyota Motor Corp., which have led the Detroit automakers in fuel economy in recent years, each said they weren't making similar changes to existing models, partly because they're already using some of the new technology.
"Honda's been a fuel economy leader for an entire generation because we bake in good fuel economy at the design stage," said spokesman Ed Miller.
The company does make changes to existing vehicles between model years when technologies are developed, Miller said. The Odyssey minivan V-6 engine, for example, was given the ability to work on three, four or six cylinders between the 2007 and 2008 model years, Miller said.
With the U.S. auto market continuing its shift from trucks and SUVs to more efficient cars and car-based crossovers, automakers say they'll keep adding technology from year to year to keep making their cars more efficient.
GM worked within an existing older design on the Cobalt and G5 to drive its mileage to what the company says is a leader among comparably equipped cars in the subcompact class.
The 2009 Toyota Corolla with a 1.8-liter four-cylinder engine is rated at 35 mpg on the highway. EPA mileage estimates for Honda's 2009 cars aren't yet available. "We did everything we could in calibration," GM's Peterson said. "We just really paid attention to detail in fuel economy."
And when new models come out, look for more dramatic improvements. GM, for instance, says the Cruze, the Cobalt's replacement coming in the second half of 2010, will get around 45 mpg on the highway.
Although the gains may seem small between model years, they will add up over time, the automakers say.
"All these little things, you start to get a half percent here, a percent here. You add these up, its that attention to detail, that's what's given some of our competitors in the past -- the Japanese -- an advantage," Deep said. "We've combined all that. We're going to overtake them or equal them."

Extended Cab to Extend Ram's Reach

PONTIAC, MI – Dodge dealers can’t seem to agree on the ’09 Ram pickup’s strongest selling feature, but Chrysler LLC is pointing to first-time extended-cab availability as the truck’s prime attraction.
“We’re playing in a space where we’ve never played before,” says Frederic DePerez, senior manager-sales and product training for Chrysler Academy, the auto maker’s in-house dealer-education organization. “That’s market share for us.”
How so? Even though the fullsize pickup market is sagging under the weight of volatile gasoline prices, demand for “crew-cab” models as Chrysler calls them, remains strong, DePerez says.
Through first quarter, extended-cab models, as defined by Ward’s segmentation, accounted for about one-third of fullsize pickup production. Among Chevrolet Silverados, nearly 40% of the builds were extended cabs. Toyota Tundra take-rates approached 68%.
See related content: ’08 Model U.S. Domestic Light Truck Production by Body Style
Without an extended-cab offering, the current Ram maintained its long-standing third-place sales ranking among fullsize pickups through July, according to Ward’s.
“A lot of (Ram sales) are going to be conquest,” DePerez says.
Styling is key selling feature of ’09 Dodge Ram, some dealers say.
The Silverado appears to be Dodge’s prime target. At a dealer-training event here, Chrysler reminds that the Chevy, redesigned for 2006, is the “oldest” truck in the segment.
And it doesn’t hurt that Ford Motor Co. has delayed the launch of its redesigned-for-’09 F-150 in a bid to whittle down ’08-model inventories.
“We’re shooting for ‘Truck of the Year,’” DePerez adds. “We want this truck to win every single award out there. (Ford) might be out of the running.”
Don’t count on it.
“You bet we will be out in time for (awards) consideration,” says Ford spokesman Said Deep.
Related Stories
’09 Ram Lacks New Feature Out of the Box; Management, Dealers Unfazed
Dodge Turns Over New Leaf With ’09 Ram
Other Ram upgrades include a new version of Chrysler’s iconic Hemi V-8 engine, beefed up to the tune of 390-hp; a breakthrough coil-spring rear suspension; aggressive styling with deceptively slippery drag coefficient of 0.42; a stylishly appointed interior; and unique storage solutions capable of accommodating everything from beverages to golf bags without comprising passenger comfort or conventional cargo-carrying.
What will resonate best with consumers?
“Besides the motor being jumped up? The interior,” says Chad Waters, sales representative at Charlie’s Dodge in Toledo, OH.
Al Johns of Dick Scott Dodge in Plymouth, MI, disagrees. Johns cites the new sheet metal. “As well as Rambox in the back,” he adds.
Available on up-trim levels, Rambox is a lockable dry-storage system built into the side rails of the truck’s cargo bed. Never mind that it won’t be available at launch.
“I can deal with anything,” Johns says. “You have to.”
Rams equipped with Rambox will be built at Chrysler’s pickup plant in St. Louis, which begins production 20 days after the lead plant in Warren, MI.
DePerez admits dealers would prefer to see such a unique feature arrive with the first transport, but there’s been no significant backlash. “I haven’t heard anything,” he says.
DePerez is unfazed by the flight of personal-use buyers who, stung by high pump prices, have traded down for smaller, more fuel-efficient vehicles.
“(They) won’t come back because of high gas prices, the economy,” he says. “But many people are true truckers. (Pickup ownership) is a lifestyle for them.”
Such core customers will have something special awaiting them in the Dodge showroom, DePerez claims.
Meanwhile, Johns discourages the notion that a more refined Ram will somehow alienate the buyer who needs a work truck.
“I did construction for 20 years,” he says. “(The new Ram is) going to pull everything I’d ever need. And I used to pull about eight grand around in tools and equipment.”
The new truck’s maximum payload is estimated at 1,850 lbs. (839 kg), while its tow rating is set at 9,100 lbs. (4,128 kg).
The work-truck buyer “wants payload, wants seating for four,” Johns says, adding the comfort afforded by interior and suspension upgrades is more than welcome.
“He’s in (the truck) all day,” Johns says. “Do you want to get beat up while you’re working all day?”