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“Trucks” to Continue to Outsell Cars – XSUV Segment

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500 wide Car Truck Sales 1987-2021500 wide Car Truck Mix 1987-2021AutoPacific, an automotive specialist research and product planning consultancy, forecasts that trucks, including XSUVs will be about 60% of the market for the foreseeable future.  In fact, reading the crystal ball for the next five years, this percentage of the mix may be low.  The charts above detail how cars and truck sales and market penetration have evolved since 1987 and the forecast for the future.

The hottest product segment in the American light vehicle market is the crossover SUV (XSUV).  A crossover SUV can be as large as a Chevrolet Traverse or as small as a Chevrolet Trax.  There are dozens of XSUVs in between.  And there will be more.

The XSUV segment has become so hot because this type of vehicle corrects the criticisms buyers had of traditional SUVs which sold very well, but were not optimal.  Buyers wanted products that were not hard-core off-roaders, but more civilized and city friendly.  The SUV market exploded in the early 1990s with the introduction of the Ford Explorer and Jeep Grand Cherokee.  It wasn’t until 1996 that the crossover SUV began slipping into the marketplace.  First the Toyota RAV4 and Honda CR-V appeared.  They were followed by the luxury crossover RX300.  Clearly the manufacturers were listening and reacting.

Here are just a few of the things we know about the evolution of the SUV market over the next five years…

Cadillac  Cadillac states that it has too few XSUVs (one, the upcoming XT5) and wants to add two or three more to its lineup while adding one more car as a range topper between now and 2020.

Buick  Buick is adding the small Envision XSUV to its lineup this Spring.  Envision is assembled in China.

FCA Drops Cars to Add XSUV and Pickup Capacity  Fiat Chrysler Automobiles is dropping its Chrysler 200 and Dodge Dart in favor of more capacity for XSUVs and pickups.  The Ram pickup will take over the FCA Sterling Heights, Michigan Plant when the Chrysler 200 is dropped.  FCA’s huge Belvidere, Ilinois plant will be populated by XSUVs when the Jeep Compass and Patriot plus the Dodge Dart fade away.

Toyota Pushing RAV4  Toyota Motor Sales has stated that they would not be surprised if the RAV4 XSUV overtook the Camry mid-size car as its best selling product.  Camry was the best selling car in the USA in 2015.

Lexus will add a 3-row XSUV above the RX350 in the next few years.500 wide SUV XSUV Sales 1987-2021500 wide SUV XSUV Mix of SUV 1987-2021

 

The charts above show the impact of crossover SUVs on the light truck market.  Huge volume increase and market share increase.

Hyundai Aggressively Adding XSUV Capacity  Hyundai is replacing 50,000 units of car capacity in its Montgomery, Alabama assembly plant with the Santa Fe Sport.  That drops capacity for the Hyundai Sonata and Elantra from 400,000 to 350,000 units per year.  Hyundai admits that they underestimated the demand for XSUVs years ago.  This capacity move reacts to market demand and dealer pressure to get Hyundai dealers more XSUVs that are easier to sell and require less incentives and discounting.

Hyundai will add 45,000 units to its Tucson compact XSUV volume this year.  Built in South Korea, Tucson has been limited because it is popular around the world and the vehicle was capacity constrained.

Hyundai also recognizes there is a hole at the bottom of their XSUV lineup and are adding a sub-compact B-Segment XSUV to fill that hole.  There is a possibility that a smaller A-Segment XSUV will replace the Hyundai Accent hatchback.


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Patrick Paternie

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I probably was the last person to ride with Patrick Paternie on a new vehicle evaluation.  Patrick passed away on March 10 following a race in his classic Porsche.

Patrick Paternie: Volvo Chili Cook-Off, Scottsdale, March 8, 2010

I spent two days riding in Volvos with Patrick.  He had sought me out to be his co-driver and I looked forward to his commentary and stories.  I knew he was a good driver and would never take risks that so many of the hot-shots on these press previews sometimes take.

Patrick regaled me with stories of how he and his wife Linda towed a big trailer behind a Suburban in Arizona and there just wasn’t enough oomph in the big SUV to keep up with traffic with the trailer following behind.  He talked about how Linda had come to like riding  in his Ford pickup because of all the room in the cab.  He was especially complimentary about a drive with the Aston Martin Rapide in Alaska.  He said the Rapide was much more capable than he would ever have thought.  The folks at Aston Martin admit the car has been “placed at a considerable discount”.  He travelled widely for his passion.  I was jealous.

We talked about heart surgery I had undergone last November.  “How did you know you had a problem,” he asked.  “Sprained ankle,” I replied.  That got me to the doctor’s office and to get a physical my medical insurance provides every year.  Surgery followed a few weeks later.

Patrick never alluded to having a heart problem.  He looked fit and healthy.  He raced.  He finished.  He was 65.  We miss him.


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North American International Auto Show: Ford Fusion is Serious

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Last week George asked us to share our pre-NAIAS thoughts on what the show might hold for each the VehicleVoice staffers. One of my interests centered on the reveal of the 2013 Ford Fusion, as it represents one for Ford’s single most important vehicles in maintaining momentum with US consumers. Ford’s last mid-cycle refresh of the Fusion, brought considerable attention to the vehicle and increased sales significantly. At NAIAS this week, VehicleVoice got the chance to review a completely updated model, which takes the Fusion to a new level.


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2008 Meadow Brook Concours d'Elegance

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On August 3, I finally returned to one of my favorite summer events, the annual Meadow Brook Concours d’ Elegance. Held the first weekend of August every year since 1979, this Concours is one of the premier events of its type. Not quite as prestigious as the Pebble Beach Concours happening the weekend of August 16 (yes, the same weekend as Detroit’s Woodward Dream Cruise), Meadow Brook has earned a strong reputation. For me, it’s simply a chance to wander among cars from storied brands of today and yesterday. Delahaye, Packard, Auburn, Duesenburg, Pierce-Arrow, Studebaker, Peugeot, Ferrari, Cadillac, Lincoln, Chrysler, Rolls-Royce, the list goes on and on.

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As you enter the Concours d’Elegance, the show starts.

Meadow Brook is home to a mansion of the same name built by the widow of John Dodge, one of the two Dodge brothers that helped establish the automotive industry we know today. The home and its property now belongs to Oakland University. Aside from the sheer joy and pleasure of celebrating the automobile as an art from, the event’s purpose is to raise funds for upkeep of the 88,000-square-foot mansion and its grounds. Seems a fitting choice of fundraising event.
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2009 Aston Martin DBS: Automotive Inspiration

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Aston Martin‘s history is of gorgeous design wedded to a racing engineer’s heart. These cars take your breath away, on the stand or on the road, even being crashed in James Bond films. Should I happen to find my life situation seeing the overwhelming change that would be needed to afford supporting a more than $300,000 DBS, would I? Maybe. As fantastic as these vehicles are, somehow they often get left off my what-if daydreams. They’re so beautiful, so expensive, and a sufficiently rare sight on my Midwestern roads that they can slip by. And there are so many terrific options these days it is only more and more difficult to choose. It truly is a wonderful time to dream, and in Frankfurt I was reminded to expand those dreams.

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As time came to replace the Vanquish, Aston looked to the VH platform under the DB9 and V8 Vantage coupe and roadster with its bonded, pressed, extruded, and cast aluminum components. After providing a sneak peak of the DBS first in one of the most amazing crash scenes ever filmed in Casino Royale and again at the 2007 Pebble Beach Concours d’Elegance in California (where Aston was this year’s featured marque), the car’s first auto show outing was at the 2007 Frankfurt auto show in September. The DBS is being built at Gaydon, near Warwickshire, alongside its DB9 and V8 Vantage siblings, rather than the Newport Pagnell facility where the Vanquish had been built. It will be available during the first several months of 2008.
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Who Will Ford Sell Parts of PAG To?

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This article appeared in the July 26th web-release by the British business magazine The Economist. VehicleVoice commentary is peppered throughout.
Ford: A costly distraction
July 26th 2007: From The Economist print edition
Ford is selling off its premium brands. Who will buy them?
Ford’s High Hopes for the Premier Automotive Group Never Materialized
WHEN Jacques Nasser, Ford’s boss in the late 1990s, bought two premium European car brands, he had high hopes for his new luxury-car division, which came to be known as the Premier Automotive Group (PAG). By 2005, the firm predicted, Aston Martin, Jaguar, Land Rover and Volvo would sell 1m cars a year, earn more than $1 billion annually and account for about one-third of Ford’s profits. But eight years on the PAG is consistently losing money and sells about one-third fewer cars than predicted—and Ford itself is haunted by the spectre of bankruptcy.
New Ford Regime Under Alan Mulally Puts PAG on the Block Piecemeal
After some initial hesitation Alan Mulally, the chief executive brought in from Boeing last September, decided to put bits of the PAG on the block. In March he sold Aston Martin for $848m, and in June he appointed three banks to field potential buyers for Land Rover and Jaguar. The bidding period ended on July 19th with an unexpectedly high number of potential suitors, thought to include Cerberus Capital Management (the private-equity group that bought Chrysler in May), TPG Capital, Ripplewood Holdings and One Equity Partners (a private-equity firm where Mr Nasser now works), along with India’s Tata Motors and the Mahindra Group.
Click here to find out more!
VehicleVoice Spin: How much of this is circuitous reporting by the international media? Ford has admitted that potential sale of Jaguar and Land Rover is on the horizon, but how accurate is the list of potential bidders The Economist cites? Wouldn’t it be interesting if Cerberus bought Jaguar and Land Rover to be the luxury marques for Chrysler Group?
Ah, Here Comes the Volvo Rumor Again…
Ford is also considering a sale of Volvo, a Swedish maker of premium cars, and the most valuable and profitable bit of the PAG. Last year Volvo is believed to have made a profit, though the PAG as a whole lost $2.3 billion. (Ford does not break out details of the division’s financial results.) But although selling Jaguar and Land Rover would make sense, it is less clear that the same is true of Volvo, says Jonathan Steinmetz, an analyst at Morgan Stanley, an investment bank. Volvo is more integrated into Ford than the two other brands, with several Ford and Volvo vehicles sharing chassis designs and parts. Volvo is also far bigger by units sold—it accounted for 7% of sales in 2006, compared with 3% for Land Rover and 1% for Jaguar—which helps to spread development costs.
Former Chairman of AMC Says Ford Should Unload All of PAG and Tend to Knitting
But Gerald Meyers, a former chairman of the American Motors Corporation, a carmaker bought by Chrysler, thinks Ford should sell all of the PAG and get what cash it can. Since Ford is in the middle of a multi-year turnaround plan, any distraction from rescuing its core American business is counterproductive, he argues. (In a sign that the plan might at last be working, Ford announced a surprise profit of $750m for the second quarter on July 26th.)
Now This One Doesn’t Make Much Sense
BMW of Germany is one possible bidder for Volvo. BMW says it is keeping its eyes open for takeover targets, though it has had its fingers burnt by acquisitions in the past. Volvo and BMW are compatible premium brands, says Marc-René Tonn, an analyst at MM Warburg, an investment bank in Hamburg. But they do not fit technically: Volvos rely on front-wheel drive, BMWs on rear-wheel drive. Renault would be a more logical buyer, says Thierry Huon at Exane, a brokerage in Paris. Renault needs a premium brand, having failed to build one itself. And the Renault and Volvo brands, with their common emphasis on safety, fit together well.
VehicleVoice Spin: BMW tried its hand with “The English Patient” – Rover and Land Rover – in the 1990s. BMW ended up selling Rover to an investment group for £10 and selling Land Rover to Ford for a couple billion dollars. Volvo cars are based on front wheel drive platforms, BMWs are rear wheel drive (with the exception of MINI). There isn’t much synergy here. Much different mindsets as well. This could well be The English Patient all over again if BMW is so anxious to acquire more brands.
Volvo Group Buys Back Volvo… Now That’s an Idea
Another possible buyer is Volvo Group, the lorry-making (heavy trucks, to Americans) parent firm that sold its car unit to Ford in 1999. This would reunite the two divisions, but there are no synergies between carmaking and lorry-making, which is why the cars were spun off. It is more likely that Renault will sell its 21% stake in Volvo Group to help finance its purchase of the carmaker.
Can Ford Recoup Its Investment in Money and Resources in the PAG Units?
Estimates of the proceeds from a sale of the PAG range from $8 billion to $16 billion. Ford could invest the money in its remaining brands—Ford, Lincoln, Mercury and Mazda—or in product development. But it would probably be wisest to restructure its health-care liabilities, which it is currently discussing with the United Auto Workers (UAW), the car industry’s main union. Mr Mulally is pressing the UAW to set up a union-managed trust that would enable Ford to take tens of billions of dollars of retiree health-care liabilities off its balance sheet. Such a trust would need to be funded up front—so cash from the sale of the PAG would come in handy.
VehicleVoice Spin: <Ford’s immediate headache is the 2007 UAW negotiations and indeed medical costs are a major part of the equation. Ford needs concessions to improve its profit picture and help guarantee those UAW workers their jobs. But, this is still the car business and Ford has fallen behind. Not as far behind as Chrysler, but General Motors has certainly taken the lead in product development of late. Ford needs to restructure not only the Company but also its product lineup. If getting rid of PAG – including Volvo – gets their attention back on the ball, so be it.
But think of these things… Many Ford middle managers now have positions with PAG brands either in Europe or headquartered in Irvine, California. Would they go back to the mother ship? Have they learned enough at PAG brands to be an asset to Ford? Would their departure hurt the PAG brands further? On the product sharing side, The Economist article rightly states that Volvo, Ford and Mazda are successfully sharing platforms. How could Volvo continue that in a cost-effective way if they were to be sold? The transfer pricing would be a bitch. Don’t forget either that the new Land Rover Freelander II/LR2 shares its architecture with the upcoming Volvo XC60. Wow, this is complicated.


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Audi Diesel Power Again Dominates LeMans

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The French are a different bunch of people. The 24 Hours of LeMans, run the weekend of June 16, took place in a small industrial city, nearly an hour south of Paris via high-speed train. The town is of little interest to tourists with the exception of the 24 Hour race, which takes place over ordinary town roads. But don’t let the sleepy little town fool you. It takes brass balls to step into the cockpit of a LeMans racer. “Le Mans is quite rightly billed as the hardest race in the world,” said Allan McNish, a former Formula One driver who has raced here seven times and who won in 1998.

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“In this 24-hour period, we will average more than 200 kilometers per hour, including all of the pit stops,” he said. “The car will complete nearly 5,200 kilometers – which is the equivalent of a Grand Prix season in one day. It will do that without a change of the engine, without changing the brake pads or discs, without changing the gearbox, without a change in the suspension or anything.”


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Ford Sells Aston Martin

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In a move designed to shed non-core businesses and focus resources on higher volume propositions, Ford Motor Company has sold its Aston Martin marque to a group headed by David Richards head of ProDrive. While other offers were on the table from, among others, a group headed by former Ford chairman Jacques Nasser and even a bid from Malaysia’s Proton, the $925 million deal from Richards’ group was the winner.
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Well it’s between the new Audi R8 and the Aston V8 Vantage in the auto lust of AutoPacific and VehicleVoice staffers.
Richards – Deep Auto Credentials
Richards has deep auto industry credentials. His company, ProDrive, has been closely aligned with Aston Martin in motorsports. Along with Richards, the consortium includes: John Sinders described as an “avid Aston Martin collector and backer of Aston Martin Racing”, Investment Dar, and Adeem Investment Company. Aston’s present head, Dr. Ulrich Bez, will stay on as Aston’s chief executive officer.
Ford Retains Stake – To Guarantee Source of Engines?

Ford is retaining a 15% stake in the company. This may answer questions about where Aston will be getting its engines in the future. As of now, Aston Martin units are sourced from Ford’s Jaguar unit and modified to Aston specs. With Ford retaining an equity stake this may guarantee Ford as the source for future Aston powertrains.
James Bond and Beyond
Aston Martin was founded in 1914 by Robert Bamford and Lionel Martin. It sold its first car in 1915. Perhaps Aston was best known as James Bond’s preferred transportation when heavily modified Astons appeared in early James Bond films. Goldfinger, Bond’s 1964 blockbuster, found Sean Connery driving an Aston Martin DB4. Aston Martins also appeared in a number of other 007 films, including “Thunderball,” “The Living Daylights,” “Goldeneye” and “Die Another Day.” More recently, Daniel Craig (he’s no Sean Connery) drove a DB9 as Secret Agent 007 in 2006’s Casino Royale.
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Ford Involved Since 1987
Ford bought a controlling stake in Aston Martin in 1987 and acquired full ownership in 1994.
It appeared at first that Aston Martin would remain a boutique brand or fade away completely. Annual production dipped as low as just 46 cars in 1992 and many people wrote off the brand. But as part of Ford’s Premier Automotive Group Aston has flourished. Its resurgence began under the watch of Wolfgang Reitzle and has reached fruition under the leadership of Ulrich Bez. With Henrik Fisker styling the iconic Astons on the road today, record 7,000 Aston Martins were sold worldwide in 2006 and a similar number are expected to be sold in 2007.
Aston’s two present production models, the DB9 and the V8 Vantage are assembled in Gaydon, England. Gaydon has about 1,800 workers. Stunning Porsche (that had just announced its Panamera 4-door sports car), Aston Martin showed its 4-door Rapide at the 2005 North American International Motor Show. The Rapide is expected to be launched later in 2007.
The press releases issued by Aston Martin and Ford Motor Company today are shown below the fold.


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LA Auto Show – 2008 Aston Martin V8 Vantage Convertible

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The Aston Martin V8 Vantage went on sale in 2005, taking up residence in Aston’s lineup and the bottom end as the “affordable” Aston and gunning for the Porsche 911. As true of most all Aston Martins, the V8 Vantage is beautiful, with a hand-crafted interior and engine. The next step, of course, is a convertible.
Can I have this as my AutoPacific company car? I’d give up my Audi TT for it!

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Aston Martin used Los Angeles as a backdrop for introducing their latest breathtakingly gorgeous roadster. Los Angeles is a strong market for Aston Martin, and convertibles as a rule sell in higher volumes than coupes in the States, so the decision to launch in Los Angeles is glamorous and smart. And Aston Martin convertibles command enough attention and carry enough presence that they don’t need a Hollywood starlet like Jennifer Love Hewitt (see the Sebring introduction) to introduce their convertible, though Jennifer’s scripted appreciation for the Sebring might have sounded more believable applied to the Aston. In fact, instead of a paid celebrity endorsement at the press introduction for the V8 Vantage convertible, Automobile Magazine Editor-in-Chief Gavin Conway presented Aston Martin with an All-Star award for the convertible. (For our discussion the full list of this year’s All-Stars, click here.)


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Automobile Magazine All-Star Awards

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Automobile Magazine, hot on the heels of Autobytel, has just released their “2007 All-Stars Awards.” Just as with the Autobytel Editors’ Choice Awards, this is an award that you wonder what the validity is. Unlike the AutoPacific Vehicle Satisfaction Awards and Ideal Vehicle Awards released each summer, Automobile‘s award does not factor consumer input into the equation. In fact, AutoPacific’s awards are purely based on consumer ratings. Automobile‘s award reflects their own opinion. Not all bad, but when reviewing the results, it is wise to remember that these folks are enthusiast-biased to the max.
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Automobile Magazine Announces Its 2007 All-Star Awards
November 29, 2006
Each year, the editors and bureau chiefs of Automobile Magazine convene to test, evaluate, and debate the performance, significance, and pure enthusiast appeal of the cars that have made the biggest impact.
“This year, we increased the number of All-Stars from six to 10, which reflects just how brilliantly the industry is doing at providing enthusiasts with even more choice,” said Gavin Conway, editor-in-chief of Automobile Magazine. “As always, the hard part was deciding what to leave out of our constellation of All-Stars. In the end, these cars are what any connoisseur would have in their ‘dream garage.”
The 2007 Automobile Magazine All-Stars are:
* All-Star: Aston Martin V8 Vantage—This car could just about make the cut for its sensational looks alone, but it also offers a sublime driving experience and a truly inspirational engine.
* All-Star: BMW 3-Series—Remains one of the most complete cars on sale today, from its driving dynamics, quality of build, and the sheer pleasure of ownership it offers.
* All-Star: Chevrolet Corvette Z06—A friendly daily-driver that’ll leave Ferraris and Lamborghinis for dead, the Vette is an all-American hero.
* All-Star: Chrysler 300C—This one is a classic American: big V-8, rear-wheel drive, and a unique style that absolutely charms. Practical to own, too.
* All-Star: Honda Ridgeline—A clear winner with its unibody construction that gives a tight, rattle-free ride; Honda quality; and its very clever underbed trunk. [VehicleVoice note: Ridgeline had a sweep of all three AutoPacific awards for 2006… Vehicle Satisfaction Award, Ideal Vehicle Award and Motorist’s Choice Award]
* All-Star: Infiniti G35—Thanks to its superbly balanced chassis, terrific grip, and a punchy powertrain, this car challenges the dominance of BMW’s 3-series.
* All-Star: Lotus Elise—An undiluted driving machine that deftly combines light weight, electrifying performance, and near-telepathic chassis response.
* All-Star: Mazda3—Terrific to drive, stylish, spacious, and capable of 155 mph in turbo guise, this proves that small cars can aspire to greatness.
* All-Star: Mercedes-Benz S-Class—One of the best-built luxury cars on sale at any price, its features technology that truly makes life easier and safer.
* All-Star: Porsche Cayman—With an extra-stiff structure, Porsche engineers were able to deliver stability, grip, ride, and composure that are just about unmatched.
Criteria and Evaluation
The Automobile Magazine All-Stars are chosen by its staff, its worldwide bureau chiefs, and its contributors, following an intensive test drive of the year’s most innovative and important new cars. Vehicles considered for the All-Stars awards combine the following traits:
* Redefines an existing category or creates a new market segment
* Provides excellent value and performance for the money
* Exhibits an exceptional design
* Offers pure driving enjoyment


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