Are we nearing the end of Chrysler? Or the beginning of a new blended family? Or just another day at the rumor mill?
Late on Friday, the first stories began appearing about GM and Chrysler in possible merger talks. And at least in Detroit, dominated the weekend news cycle. GM’s stock went up this morning, but given that the Dow was up 5.6% and GM went up only about 3%, the stock bump might have happened without merger talk. GM closed on Friday at $4.89, a number some say is actually less than the company would be worth in capital assets alone.
All of this merger talk, whether these deals are realistic or not, does nothing good for public perception. The economy is weak, last week’s events on the stock market don’t reassure anyone, and talking about GM and Chrysler perhaps needing to merge to survive only further erodes confidence in American business. While GM and Chrysler LLC, as well as any other maker in trouble right now, needs to consider even unthinkable options and test our common assumptions as they get out of this trouble, this merger does not inspire hope.
Better say this right up front, with the possible exception of the new Chevy Malibu, Cadillac’s second-generation CTS may well be the most improved new car of the 2008 model year. To be sure, it’s the most impressive vehicle to carry the Cadillac badge since the stunning 1967 front-wheel-drive Eldorado
This car is so impressive it’s tough to recall how Cadillac got into the performance luxury sedan business to begin with. Like so many stories regarding General Motors as of late, this one has a significant overseas component. Almost five years after the astonishingly moronic proclamation of a now (fortunately) retired Cadillac chief engineer that, “Cadillac will be a front-drive car company,” the Catera debuted.
Little more than an Opel Omega with cosmetic revisions limited to a revised grille and rear decklid garnish with the requisite chassis retune and FMVSS compliance changes, the Catera was an expedient way to provide U.S. Cadillac dealers with a car the division hoped would help retain customers who had been leaving the nameplate for BMW and Lexus entries. Initially offered with a peculiar 56° vee 200HP 3.0L 24-valve DOHC six-cylinder engine mated to a 4-speed automatic, the Catera was the unfortunate recipient of what was barely a mid-pack powerplant. And the sometimes finicky V6 aside, while no 3-Series, the Catera was a decent car clothed in a decidedly innocuous wrapper. But if there’s one thing a Caddy should never
be, it’s innocuous. Not surprisingly, the Catera incurred the wrath of many journalists and self-proclaimed “analysts” from the get-go. One such insightful wag decreed the Catera spelled the “end of Cadillac” because it was not offered with a V8 engine. Yeah hum.
Three years ago, Jim Hall and I were in Adelaide, South Australia. We were actually on AutoPacific business and unfortunately it was in the middle of the American summer, which meant it was the middle of the Australian winter. Chilly. Anyway, that’s beside the point.
Good Iron Down Under – From Both General Motors/Holden and Ford
This brief trip down under confirmed what I knew academically from reading about Australian vehicles. They are really cool! Both Ford and General Motors have very competent rear wheel drive platforms in Australia that would do very well in the USA. A brief visit to the local Holden dealership had us both lusting after a Holden Commodore. And that was the previous generation Commodore. In July 2006, Holden launched the all new VE Commodore. More lust.
GM tried to import the Holden Monaro as the Pontiac GTO. The car failed because it wasn’t flashy enough and didn’t have the necessary DNA to be a believable GTO. Great car to drive, not ugly, just not head-turning.
GM to Add Holden Commodore to Pontiac Lineup as G8
Now, we may have chance to get the object of our desires. GM appears to be ready to announce that it will begin importing the Holden Commodore 4-door sedan as the Pontiac G8. This car would replace the front wheel drive Grand Prix and maybe reach upwards to fill the spot vacated by the front wheel drive Pontiac Bonneville. Rear wheel drive and powered by a V8 engine, the Commodore would cap a newly sporting Pontiac lineup. We can’t wait.
Ford to Use Australian Falcon as Basis for RWD V8 Sedans?
Across Detroit in Dearborn a similar strategy is hatching. Apparently, Ford is considering using the rear wheel drive V8-powered Australian Falcon as the basis for the “Mustang-based” Lincoln MKR. If Ford can find the resources, we may also see the Ford Interceptor concept car based on the Falcon platform.
Ah, those Australians!
Zest Minicar On Sale March 1
The Japanese market has seen variations on the tiny fuel-sipping car theme for many years. In the USA, we may refer to them as minicars. In Japan this class is called “kei cars”. We at VehicleVoice and AutoPacific can fondly remember the Honda City that came with a diminutive motor scooter in the cargo area circa the mid-1980s. Never made it to the States except as Honda test cars or gray market one-offs. The scooter was its claim to fame, but in American traffic a car the size of a Japanese kei car is just a bit frightening. But Japanese car companies need to compete with these types of cars in their home market where where are substantial tax benefits.
Honda introduced its new Zest kei car on March 1 in Japan. In Japan, the Zest kei car class is comprised of cars that meet certain exterior and engine size requirements. Among the requirements are a cap for overall length set at a 3395mm and a power output cap of 64HP. These small cars, while they fall in and out of fashion globally, are in part the result of government restrictions and manipulations in the Japanese economy. High taxes and government rules make kei cars attractive to many Japanese consumers, a situation that does not exist in the States. While on paper, these small cars sound like a terrific solution for U.S. buyers looking for ultra-economic transportation, they are too small to sell in sufficient numbers in the States to be profitable.
The Zest measures less than 134 inches long, though there is a terrific amount of space inside. While in Japan the segment with cars this size is significant, the Zest is a full sixteen inches shorter than the three-door Toyota Yaris hatcback. Other cars that U.S. buyers consider small have an overall length even further from the Zest, and are pictured below. Mazda’s MX-5 convertible is almost 156 inches long, Scion’s xB is 155 inches long, Toyota’s Yaris sedan is nearly 170 inches long, and Honda’s Fit is more than 157 inches long. These examples seem to be about as small as the North American buyer is willing to go, despite any inherent logic that a small city car may have in terms of inexpensive operation and a usable size for city driving. The fact is that we do not need cars as small as the Zest in the USA, and so far, it doesn’t seem that Americans want them, either. So, admire from afar kei-car enthusiasts! You’ll have to wait til your next trip to Tokyo to see the Zest in person.
An article in the Saturday, November 19, 2005 Wall Street Journal projects that Toyota may overtake General Motors as the highest selling carmaker in 2006.
While Toyota (Toyota, Lexus, Scion) may not sell more than GM (Chevrolet, Pontiac, GMC, Buick, Cadillac, Hummer, Saturn, Saab) in the United States, it may sell more worldwide. Toyota is concentrating much of its sales expansion in North America where it is pulling sales from General Motors and Ford. GM is bolstering production capacity in China and South America where it sees room for growth where Toyota is not yet strong.
The Wall Street Journal article is one of many recent media reports confirming the results of VehicleVoice research and forecasts by AutoPacific. VehicleVoice research shows a continuing deterioration in General Motors’ (and Ford and Chrysler traditional brands) market share in the United States under the concentrated onslaught of the Japanese Big Three. AutoPacific’s forecast of United States sales shows Toyota, Honda and Nissan increasing market share by adding new assembly capacity and models.