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Let's Talk Cars: Exxon's Record Profits, Choosing Cars Based on Fuel Consumption, and Buy vs. Lease

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Welcome to “Let’s Talk Cars”

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Let’s Talk Cars this week sees David Barrett sitting down with two of AutoPacific’s industry analysts, George Peterson and Jim Hossack, to take on the timely issues of fuel prices and slumping American car sales.
First up, Exxon’s extraordinary reported profits for the second quarter of 2006. At over $1,300 a second, yeah, that’s PER SECOND, Exxon is raking it in faster than most bean counters can count beans. And there’s plenty of people up in arms with the ethics of record-setting fuel prices creating misery for the consumer and record-setting profits for corporations.
But how is this effecting the average American car buyer? According to Jim Hossack, months of higher prices at the pump are beginning to have an effect on the sales floors of dealerships around the country as Americans start turning away from SUVs and trucks, and start looking at smaller, more fuel efficient vehicles. And there’s an entirely new crop of very small, very efficient vehicles coming to the American market. David and Jim chat us up on all of these topics this week.
Plus, George Peterson went car shopping last week to see what deals were out there, and my, what a good time of the year to be getting into a new vehicle! The big question – should you buy or lease? George and David chew on that tidbit this week as well.
Show Rundown
00:58 Exxon’s Record Profits – VehicleVoice contributor David Barrett and AutoPacific Vice President and Senior Consultant, Jim Hossack
04:45 Choosing New Vehicles Based on Fuel Consumption – VehicleVoice contributor David Barrett and AutoPacific Vice President and Senior Consultant, Jim Hossack
06:25 Diesel as a Buying Choice – VehicleVoice contributor David Barrett and AutoPacific Vice President and Senior Consultant, Jim Hossack
08:53 June Fuel Survey Results – VehicleVoice contributor David Barrett and AutoPacific Vice President and Senior Consultant, Jim Hossack
11:04 Car Selling Slump in the U.S. – VehicleVoice contributor David Barrett and AutoPacific Vice President and Senior Consultant, Jim Hossack
14:15 New Crop of Small, Fuel Efficient Cars – VehicleVoice contributor David Barrett and AutoPacific Vice President and Senior Consultant, Jim Hossack
17:30 Buy vs. Lease and the Summer Deals to Be Had – VehicleVoice contributor David Barrett and AutoPacific President and Founder George Peterson


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Driver's Edge Team Creates Program Greater Than the Sum of Its Parts

Enthusiasm Breeds Successful, Quality Program
As I’ve described in a related VehicleVoice news story, I had the recent opportunity to see a Driver’s Edge teen driving education program in action. I attended with my nieces, Angel and Megan, and my sister-in-law Jane.
Watching from the sidelines as I was, neither parent nor student, a common element was easy to spot in the entire Driver’s Edge team. They all are dedicated and passionate about this program. The team is full of people leading rewarding careers doing what they love, and it shows in their overall approach and their optimism. This quality is just one of the reasons for the success of the overall program.
From support staff to leaders to in-car instructors, the team had the ability to connect with the students, to get them laughing while conveying serious information, and to keep them engaged through a four-hour program. Their heartfelt enthusiasm was catching, and the high quality of instruction reflected their dedication and interest. After each presentation, instructors were available for questions from students or parents, as were in-car instructors once they were out of the car.


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Mercedes E-Class – Luxury Taxi for the USA?

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I’ve just been wandering around in AutoPacific‘s Research Suite data and decided to take a look at the results for the 2006 Mercedes-Benz E-Class.
Mercedes E-Class owners completed AutoPacific’s Future Vehicle Survey either by mail or through the VehicleVoice website. This allows us to get a good look at them compared with the owners of competitive cars.

Mercedes E-Class SV Blog.jpg

Now, I know that E-Class is a popular car for use as a taxi-cab in Germany. The place is crawling with flesh-colored E-Classes with M-B Tex interiors, diesel engines and low feature loads. Of course, in the USA, the E-Class is positioned as a mid-level European Sport Sedan… or is it? Here is is a $50,000 luxury car… European, yes… Sport Sedan… maybe not.
Is E-Class the Anti-Sport Sedan?
Compared with other cars competing with the E-Class the differences are startling. Different from the Audi A6 and BMW 5-Series, the E-Class is bought by a person who tends to be substantially older, more likely to be married, much less affluent, less educated. They are much less likely to describe themselves as an auto enthusiast or to agree that a vehicle is a means of self-expression. They just aren’t into cars the way that Audi and BMW owners are.
Innovative technology is not particularly important. A navigation system or advanced audio system is not particularly important. Exterior styling? Who cares? Power and acceleration? Leave that to Audi and BMW. Fun to drive? Stodgy is OK.
AutoPacific Profiles Owners of Every Vehicle, But E-Class Profile is Surprising
Wow! I guess unless you track these things in detail all the time (which we do), results like these are very surprising. Mercedes’ product execution and communications strategy has brought a lower common denominator luxury car buyer into the franchise.
Where’s the excitement? Not with the E-Class!


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Cars – Pixar/Disney Movie Promises to be Car Guys Best

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Pixar Cars Logo Blog.jpg
Car enthusiasts may not know that they have been waiting for Cars, the movie released by Pixar and distributed by Disney on June 9. Cars promises to be a penultimate occassion for the car world. Populated with characters that are cars, but recognizable as people or race drivers, Cars popularizes the cars that we have all admired.

Pixar Doc Hudson Blog.jpg

Robert Blumhagen Original – AutoPacific’s Hudson
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Of course, VehicleVoice and AutoPacific likes Doc Hudson the best because AutoPacific’s long time image has been a 1951 Hudson parked in front of the AutoPacific building on a palm lined beach in Southern California. AutoPacific’s Hudson is an original painting by Southern Calfiornia artist Robert Blumhagen renowned for his California realism style of painting.


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Zoom Shop for iPod – Auto Integration a Must

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We decided to roll off the hill Saturday morning and drive overland the ten miles or so to Pacific Coast Highway in Newport Beach. Wandered through the neighborhoods looking at nosebleed priced homes of the fabulously wealthy (where do they get all the $$$$$$?) and even rode the Balboa ferry from Balboa Peninsula to Balboa Island (truly funky in spots – for multi-jillion dollar postage stamp sized abodes).
On the way back, we stopped by a Von’s Pavilion (big supermarket) on Newport Coast Drive and lo and behold, she who must be obeyed saw a Zoom Shop for Apple iPods. Here, just by inserting your credit card, this machine will dispense iPod accessories, iPod nanos, video iPods. Interesting concept that just reinforces the contention that cars today need to have iPod integration available if not standard.
As AutoPacific and VehicleVoice research continues to confirm, iPods are one of the fastest rising personal technology items a person owns. The car company that is not planning on some integration path for iPods is failing in its planning function.

zoom_vending_machine.jpg

Migod! If they are dispensing the things from vending machines now, what’s going to stop them?


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SUV Jihad Continues as SUV Segment Atomizes

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Back in November 2005, a VehicleVoice Blog commented on the existence of a periodic jihad on sport utility vehicles in the USA and worldwide. The introduction of General Motors’ GMT900 SUVs – the Chevrolet Tahoe and Suburban, the GMC Yukon and Yukon XL, plus the Cadillac Escalade and Escalade ESV have set the earth-is-flat crowd wailing again.

Audi Q7 Latest Target of SUV Jihad… This Time From British – Austrian Axis

But June 2006 intro of the Audi Q7 in the USA following its earlier introduction in Europe also will be watched closely. As Audi is about the last major brand to add an SUV to its lineup, it is a fresh target for the anti-SUV crowd. The March 2006 issue of CAR Magazine is a case in point. Georg Kacher, a 6-foot, 13-inch Austrian based in Germany, writes, “Big, heavy, chunky, aggressive, unwieldy – SUVs deplete our resources, tear up the countryside and flatten whatever they hit.

Audi Q7 SV Blog.jpg

So why does a company like Audi, renowned for advanced engineering enter this bad karma segment?”
Because the market is allegedly craving a mud-crawler made in Ingolstadt, and because Audi firmly believes it can add a new dimension to the SUV game.”
As with many non-USA automotive journalists and even American buff book scribes, Kacher’s loathing of SUVs is mis-directed.
SUVs respond more to customer pull than manufacturer push. After the demise of station wagons (or estates as the Europeans so lovingly call them) and the image black hole called Minivans, came sport utility vehicles. These jack-of-all-trades vehicles carry people and stuff with aplomb. Well… more aplomb today than at any time in the past when they were admittedly crude trucks with a closed in cargo area. They go anywhere, anytime, with anyone, carrying anything within reason. They come in all flavors from the late and not particularly lamented Ford Excursion to the Suzuki Vitara. Populated between the Excursion and Vitara are SUVs of every ilk. Some are suited for suburban streets only. Some are rock crawlers. Some are designed to tow horse trailers and boats.
The beauty of SUVs is the breadth of choice within the segment. The SUV buyer has the luxury of choosing between more brands and more models than ever before. Like the overall auto industry, the larger SUV segment is atomizing into smaller and smaller niche entries.
Choice is good and Audi is welcomed.


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Mercedes CLS – More on Naming

It just can’t be helped…

Mercedes CLS Blog.jpg

Has anybody thought about the name of the Mercedes-Benz 4-door coupe?
CLS = CiaLiS

Looks like one of the many pitfalls of alphanumeric naming schemes.


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Of Blizzaks and Body Shops

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This is a blog about which I have been hesitant to write. You see, it has to do with accepting my own bad judgment and the requisite payment for the same. For twenty years I have lived where it snows quite regularly and accumulates on the ground. Until maybe ten years ago, I never gave snow tires a second thought. Primarily because I was usually driving in something with very good all-season tires and either front- or four-wheel drive. Mobility was rarely a problem. But about ten years ago, I bought a relatively powerful rear-drive sedan that was delivered with some very aggressive 18-inch Z-rated performance tires. To say the car was difficult to drive in the snow is misleading. The car was undrivable in the snow. The sticky summer tires turned hard as linoleum once the temperature got below 45°F, and the jumbo 27/35-18s at the rear were so wide they couldn’t bite down and get anything even remotely resembling grip in snow. Without snow tires, the car would be little more than an attractive driveway ornament for about a third of the year.
If you live where it snows and you drive something with performance tires. be it rear-drive, front-drive or even all-wheel-drive, you NEED snow tires.


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Guilty Pleasures – The Three Vehicles I Never Want My Friends To See Me Drive

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Long a car-sick motor head, over the years I’ve cultivated a rather ecclectic (and quite strong) list of likes and dislikes in the vehicles I have owned. Lots of overpowered coupes and sedans, a couple of oddball oversteering rear engined cars with more power than their engineers had envisioned when first they set pencil to paper, and only a single vehicle that could be categorized as a truck. And a pretty poor excuse for a truck at that.
Recently, after discussing favorite “Guilty Pleasure” films with some journalist pals, the topic turned the concept of Guilty Pleasure vehicles. Vehicles you like (or would like) to drive but would never admit it to a friend. At the top of the list were those small, innocous, underpowered economy cars that can be driven at ten-tenths all the time without raising the ire of police or other drivers. Why precisely these came up first is of some small concern to me. Perhaps I need a new set of journalist friends, but I digress.
Next the subject of traditional big American Iron came up. As in large, V8 rear-drive cars with primitive solid axle rear suspension systems better suited to buggies or heavy duty pickups than 21st century land transport. Nothing of any collectible interest or classic in nature, we’re talking about post 1985-metal. At the risk of trading in my VehicleVoice correspondent credentials and my AutoPacific analyst pass, the first of my automotive Guilty Pleasures comes to light, the Lincoln Town Car.


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Lincoln Naming – Cat Food By Any Other Name Would Still Smell As Sweet

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The Madness at Lincoln Continues.
Over that last two and a half months, Ford Motor Company has been misrepresenting its new naming strategy for future Lincolns. At an early reveal of the Lincoln MKS, Ford’s North American Supremo Peter Horbury called the car the “Mark Ess.” Yet at the Detroit autoshow a couple of weeks later, the model was verbally referred to as the “Em-kay-ess” by Ford management and P.R. types. Concurrently the Aviator replacing crossover utility was called the “Em-kay-ecks.” That’s MKX in badgespeak.
At the Chicago show this week, Lincoln unveiled a lightly restyled and reengineered Zephyr that will be called the MKZ. In the press release materials for the successor to the Zephyr, the car is identified as the “Mark Zee.” C’mon guys, make up you minds.


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