Monday, November 23, 2009

Tarrif cut: Bonus for new-car buyers?


Which cars could drip in price?

THE import tariff reduction applies only to imported passenger cars. Even more specifically, it applies to imported passenger cars from countries with which Australia does not have a free trade agreement — essentially Japan, the European Union, South Africa and Korea.

Japan Aims to Take Lead in Hydrogen Fuel Cell Cars

Tokyo, Japan — In the wake of last year's soaring crude oil prices, coupled with a growing environmental awareness, the development of alternative energy sources is moving into high gear. Among next-generation energy sources, hydrogen is proving to be a favorite.

Japan started selling the world's first household hydrogen fuel cell this year, and stands on the verge of selling fuel-cell vehicles. But there are still difficult challenges involving the manufacturing, storing and transporting of hydrogen. For these reasons, some experts say the advent of the hydrogen economy might be a pipedream.

Fossil fuels, which have been supporting modern civilization for over 100 years, contain two fatal flaws: they are not sustainable and they cause environmental pollution. In contrast, hydrogen can be manufactured even from water, and is clean with no harmful emissions.

"When the oil runs dry, it is necessary to substitute something different. Hydrogen is a leading candidate for alternative energy," said Professor Kazunari Sasaki, director of the International Research Center for Hydrogen Energy at Kyushu University in southern Japan.

Japan, with energy self-sufficiency of only 4 percent, has been forced to pursue diversified energy sources. It has been consistently developing fuel cells that generate electricity from hydrogen and oxygen, and is now in the forefront of this field.

Replacing oil with hydrogen all at once is unrealistic, Sasaki says. Therefore, he suggests, “We should increase the proportion of using hydrogen technology little by little in fields where there are benefits. Those are at home and in vehicles."

Japan imports most of its oil from the Middle East, and 40 percent of this is used in vehicles. If even a small part of the nation’s cars switch to hydrogen, it would be significant.

Only a handful of automakers are currently leasing fuel-cell vehicles, or FCVs, called the ultimate eco-cars because of their zero emissions, by way of experiment. These include Japan’s three major automakers – Toyota, Nissan and Honda – the German auto giant Daimler, and the U.S. auto giant General Motors. Less than 100 fuel-cell vehicles are on the road in Japan, and a few hundred in the world.

One obstacle is the high price of such cars. An FCV is currently valued at around US$1.1 million. Toyota leases its FCV for US$9,400 a month, or US$110,000 a year.

In 2015 Toyota and Daimler are expected to introduce mass production of FCVs, after 20 years of research and development. They will have to substantially reduce the price, however.

"By the time FCVs are commercially available in 2015 they will be cheaper than a Rolls-Royce, but it will be difficult to price them down to the level of a Corolla,” said Kenichiro Ota, a professor at Yokohama National University. A Rolls-Royce costs around US$550,000 and a Corolla $22,000.

The FCVs themselves seem to meet all expectations, apart from cost. At the Tokyo Motor Show in Chiba City east of Tokyo early this month, the author test-drove Toyota's latest fuel-cell vehicle, the FCHV-adv, believed to be the world's most advanced model. It runs 515 miles on a full 156-liter high-pressure hydrogen tank. The car’s motor is the same as that of an electric vehicle, with no unpleasant engine sounds and almost no vibration, and the ride was comfortable.

According to Shogo Saegusa, a senior researcher at the Japan Automobile Research Institute, FCVs face five key challenges: low efficiency, endurance reliability, cold-start durability, travel range and high cost.

However, Japan's three auto manufacturers have already extended the travel range of their FCVs to a level similar to that of gasoline vehicles. Toyota has achieved 515 miles, Honda’s FCX Clarity has reached 385 miles, and Nissan’s X-TRAIL FCV is up to 310 miles.

Hydrogen must be artificially produced as it does not exist in isolation in nature. This means it is a secondary energy like electricity, not a primary energy like fossil fuels.

Since hydrogen is a gas at room temperature, it must be reduced to minus 487 degrees Fahrenheit to liquidize it, or kept under pressure to retain it as a gas. In short, a great deal of energy is required at each stage of manufacturing, storing and transporting hydrogen. After several studies, car manufacturers adopted the high-pressure hydrogen tank for FCVs.

Although the cost of compression is less than that of manufacturing liquefied hydrogen, it still requires considerable energy and technology. Naturally, expanding the infrastructure of hydrogen stations is also a challenge in making the vehicles popular. Currently, Japan has only 14 stations in major cities capable of pumping compressed hydrogen into vehicle tanks.

Energy supplies are secure, however, as hydrogen can be made not only from natural gas or kerosene but also from water or seawater. That is the one reason Japan, in trying to build a society without fossil fuels, has been pushing ahead with hydrogen.

Some Japanese Cars Fare Better in Korea Than Japan

Several Japanese car models have been selling better in Korea than in Japan, a report revealed Sunday. More Honda Accords, Honda Civics, and Toyota Camrys were sold in Korea than in their home country during the first nine months of the year, according to the report by the Korea Automobile Importers and Distributors Association and the Japan Automobile Dealers Association.

Honda sold 1,468 Accords in Korea between January and September with average monthly sales of 163 units, while 1,057 Honda Inspires, a domestic Accord equivalent model, were sold in Japan with average monthly sales of 117 units. The Civic recorded total sales of 595 units with average monthly sales of 66 units in Korea, while only 10 units were sold in Japan during the same period.

The same story goes for Honda CR-V. Some 786 Honda CR-Vs were sold in Korea and 2,613 in Japan in the first nine months, while the Honda Legend achieved sales of 90 units in Korea and 340 in Japan. When the figures are adjusted to account for the fact that the Korean market is about one third the size of the Japanese one, the sales performance of the CR-V and Legend were about the same in the two countries.

Toyota sold 327 Camrys within just 20 days of its launch in Korea last month, while only 136 units were sold in Japan in September. The Lexus LS460 luxury sedan recorded sales of 562 units in Korea in the first nine months, compared to 1,103 units in Japan. On an adjusted basis, sales of the two models in Korea were double those in Japan.

The reason for the stronger sales performance in Korea is that most of these models are mid-size or large sedans, which appeal to Korean consumers but are unpopular among the Japanese. Hybrids, light passenger cars, and compacts dominate the Japanese market while mid-size and large luxury sedans are less common. The hybrid-electric Toyota Prius is the best-selling car in Japan, with sales of about 30,000 units per month, and only one or two mid-size or large sedans are among the top 50.

Wednesday, November 18, 2009

Cars are evil. Which one should I buy?



I need a car, yet I hate the very thought of them. Cars are responsible for the sprawling suburbs that have alienated us from one another. I see those long lines of commuters sitting on the 401, day after day, and I can only conclude cars are evil.


But I'm going to buy one and I want something cheap, reliable and I don't care about image. Fuel economy? Of course. A good warranty from a company that will back it up – I want that too.


So sharpen your pencils and get to work. What do I want?


Amelia.


Cato: You've come to the right country, Amelia. Canada may be a big place, but it's a small-car country, an entry-level nation, the land of frugal, affordable transportation. More than half the cars sold here are entry-level runabouts. You have choices.


Vaughan: Choices? Amelia has issues. If cars are evil and ripping the fabric of society then what has possessed her to suddenly abandon her principles and cross over to the dark side. She should either go straight to Honest Faustus Used Cars or, better still, just get a transit pass.


Cato: What are you doing Vaughan? This isn't the Life section. Just answer the question, suggest some cars and leave the amateur psychiatry to the amateur psychiatrists. Perhaps Amelia has seen the light – recognized the need and is going to fill it. With a subcompact or so-called B-sized car, I think.



2009 Toyota Yaris

Toyota

2009 Toyota Yaris



Vaughan: Accepting that even B cars clog the 401 and alienate us from one another, here's a list for Amelia: Honda Fit, Toyota Yaris, Chevrolet Aveo, Nissan Versa, Hyundai Accent, Kia Rio and Suzuki Swift.


Cato: To be honest, they all are completely functional, reliable, fuel-efficient runabouts. More like them, but even better cars, are coming next year.


Ford Canada in the summer will start selling the made-in-Mexico Fiesta subcompact – currently the second-best-selling car in Europe, and then toward the end of the year, Mazda has its Mazda2.


Vaughan: I see your strategy Cato. Delay her decision until she comes to her senses and gets that transit pass. Very good. Maybe you can join me in the Life section some day.


Cato: Amelia, ignore Vaughan's sad attempt at career advancement and put the Toyota Yaris on your list. Toyota sells not only a sedan version, but also a four-door hatchback and a two-door hatch.


All three versions share a 106-horsepower, four-cylinder engine. It's fuel-efficient and adequately powerful. This little runabout is an acceptable city car, but for long highway stretches the cabin is noisy and the seats are thinly padded.


Vaughan: You have plenty of padding so that's shouldn't be a problem for you, Cato.


Cato: Seen your profile lately? In any case, Amelia, the Yaris is solidly reliable and the U.S. Government gives it a good, but not great, four-star crash test rating right across the board.


Vaughan: I'm recommending the Hyundai Accent. We were just on a Hyundai dealer lot and it was advertising a new Accent for $9,995 – all in, with the incentives.


Cato: Yes, and Hyundai makes sedan and hatchback versions of the little Accent and both are powered by a 110-hp four-banger. The Accent does its chores nicely, with a pleasant interior and an airy cabin.


Vaughan: Reliability is not a worry, either. Plus safety. In frontal impacts, the Accent earned a five-star rating for driver and passenger.


Cato: And then there is the Nissan Versa. The Accent is loaded up with more sales sweeteners – incentives – but Nissan has a pretty attractive sticker, too.


Vaughan: I think the Versa is a real bargain here. The conscience-stricken Amelia has two body styles to choose from: a four-door sedan with a 107-hp, four-cylinder engine and a four-door hatchback with a 122-hp, four-banger. The sedan is cheaper and the smaller engine is more fuel-efficient.



2009 Nissan Versa

2009 Nissan Versa



Cato: The Versa is a big car for a subcompact. The cabin is very spacious and there is decent cargo room, too. Plus it has a four-star crash test rating for both driver and passenger.


Vaughan: I'd also suggest a test drive of the Honda Fit. It's pricey because it's imported from Japan, but is the most versatile and functional small car, period.


Cato: Great design. Seats flip and fold every which way and fuel economy is excellent, as are the safety scores. If you are willing to spend a bit extra, the Fit is an excellent buy. If not, I'd suggest the Versa.


Vaughan: I'd recommend the Accent and maybe a guilt donation to Friends of the Earth.

Ford, Subaru, VW win insurance industry picks


WASHINGTON — Ford, Subaru and Volkswagen lead the insurance industry's annual list of the safest new vehicles, according to a closely watched assessment used by car companies to lure safety-conscious consumers to showrooms.


The Virginia-based Insurance Institute for Highway Safety awarded its "top safety pick" on Wednesday to 19 passenger cars and eight sport utility vehicles for the 2010 model year. The institute substantially reduced the number of awards compared with 2009, because of tougher requirements for roof strength.


Ford Motor Co. and its Volvo unit received the most awards with six, followed by five awards apiece for Japanese automaker Subaru and German automaker Volkswagen AG and its Audi unit.


Chrysler Group LLC received four awards followed by two each for Honda Motor Co. and General Motors Co.


Toyota Motor Corp., BMW AG, Mazda Motor Corp. and Mitsubishi Motors Corp. were shut out in the annual IIHS review.


Ford's recipients include the Ford Taurus and Lincoln MKS passenger cars and the Volvo S80 and C30 passenger cars and the XC60 and XC90 SUVs.


Ford said in a statement it is "committed to providing customers with safe vehicles for a broad range of real-world crash conditions."


Subaru recorded winners with the Subaru Legacy, Outback and Impreza cars and Tribeca and Forester SUVs. Subaru was the only automaker with an IIHS winner in all four vehicle classes in which it competes.


The automaker, which has bucked the brutal U.S. sales market with a 13 percent increase during the first 10 months of 2009, attributed its safety success to a unique engine design that sits low in the vehicle chassis and moves down and under occupants in a frontal collision.


Tom Doll, executive vice president and COO of Subaru of America, said the awards were a "tribute to the engineering that goes into Subaru products."


Volkswagen scored with the 4-door versions of the Jetta, Passat and Golf, the Audi A3 and the Volkswagen Tiguan, a small SUV. Mark Barnes, Volkswagen of America's chief operating officer, said the "safety of our cars is of the utmost concern, from the initial design stages all the way through the maintenance procedures at dealerships."


Chrysler won the award for the Chrysler Sebring and Dodge Avenger sedans equipped with optional electronic stability control, the Dodge Journey midsize SUV and the Jeep Patriot with optional side thorax air bags.


Scott Kunselman, Chrysler's senior vice president-engineering, said the awards underscore the Auburn Hills, Mich., automaker's "engineering capability and leadership in occupant protection."


General Motors Co. and Honda Motor Co. both received two awards. GM was recognized for the Buick LaCrosse and the Chevrolet Malibu while Honda won for 4-door versions of the Civic with optional electronic stability control and the Honda Element.


Other winners included the Nissan Cube, the Kia Soul and the Mercedes C Class.


The vehicles are selected for best protecting motorists in front, side and rear crash tests based on Institute evaluations during the year. The vehicles are required to have electronic stability control, or ESC, to qualify for the award. Earlier this year, the Institute said vehicles would need to receive its highest score in its roof strength evaluation to qualify the safety pick designation.


"With the addition of our roof strength evaluation, our crash test results now cover all four of the most common kinds of crashes," said Institute president Adrian Lund. "Consumers can use this list to zero in on the vehicles that are on the top rung for safety."


The Institute awarded its top prize to 94 vehicles in 2009 and attributed the decline in awards this year to the roof strength requirement. The Honda Accord and the Ford Fusion both dropped off the list because 2010 versions didn't earn high enough scores on the roof test.


The Toyota Camry would have made the list, the Institute said, if it had received the highest rating in rear crash protection. The Institute said the Camry's seats and head restraints were rated marginal for protection against whiplash injuries.

Why is Ford on such a roll?

Ford did not need a federal bailout like GM and Chrysler did and it has been posting considerably better financial results.

Now comes word that the 2010 Ford Fusion was named Motor Trend magazine’s car of the year, beating out the Toyota Prius, BMW 7-Series, Chevrolet Camaro and others in the closely watched competition, Associated Press reports.

It was yet another accolade for Ford Motor Co.’s midsize sedan, which got high reliability scores in the most recent rankings from Consumer Reports and was the top-selling car made by a Detroit automaker through October.

What’s more, Ford, Subaru and Volkswagen lead the insurance industry’s annual list of the safest new vehicles, according to a closely watched assessment used by car companies to lure safety-conscious consumers to showrooms, AP reports.

Why has Ford been doing so well? Leadership? Innovation? Marketing? Execution?

Does its recent string of successes influence your buying decision?

Tuesday, November 10, 2009

Neb. court says dealers must check used-car safety

OMAHA, Neb. — Car dealers must inspect used vehicles for safety defects and either make repairs or warn potential buyers before they are resold, the Nebraska Supreme Court ruled Friday.

The high court said that an "as is" sticker does not absolve dealers of their duty to look out for public safety.

"There is a relatively great magnitude of risk of injury in the circumstance where an unknowing buyer drives off the dealer's lot in a used vehicle which has a patent safety defect, such as defective brakes or steering," the court said. "The dealer is better equipped than the purchaser to perceive such a defect before it causes harm."

The decision is similar to those handed down by courts in other state, including Kentucky, Minnesota, Montana and Ohio, that recognize dealers' obligation to ensure the safety of used vehicles.

With the ruling, the high court overturned the dismissal of a 2006 lawsuit filed in Douglas County District Court by an Omaha couple who alleged that Woodhouse Ford Inc. was liable for injuries caused when their van shifted out of park.

The high court said that while Woodhouse sold the van "as is" and disclaimed all warranties, the Blair dealership may have been negligent for not inspecting the vehicle for safety defects. It ordered the case back to the lower court for trial.

Melany Lanagan, the attorney for Elizabeth and Mark Wilke, said the court's decision was "a very positive thing for consumers who are going to be buying used cars. It's all about safety."

She said most consumers believe used cars bought at Nebraska dealerships were being inspected before being sold, but that isn't necessarily true.

Woodhouse has said in court documents that it has such a high volume of used vehicles that it is unable to inspect all of them.

The dealership's attorney could not immediately be reached Friday.

The Wilkes sued Woodhouse for negligence and breach of implied warranty of merchantability over the "as is" sale of a 2002 Ford Econoline on Sept. 18, 2004. They said the dealership should have known the vehicle was defective at the time of the sale.

The couple said in court documents that Mark Wilke drove the van off the lot, parked it at a friend's house and removed the keys. The couple's then-3-year-old daughter pulled the gearshift out of park and the vehicle rolled over Elizabeth Wilke's right foot and thigh, causing her to fall and hit her head.

A federal regulation requires vehicles with automatic transmissions be made so that the key must be in the ignition to shift out of park. An automotive engineering consultant said in court documents that there were problems with the van's brake shift interlock system, transmission shift cable and key shift interlock that allowed the Wilkes' van to shift out of park.

Woodhouse has said in court documents that Elizabeth Wilke's injures could have been prevented if Mark Wilke had used the emergency brake and if the girl hadn't pulled the gearshift.

The high court ruled that the Wilkes could not sue for breach of warranty under the Uniform Commercial Code because the van was sold "as is." But it said the couple could sue for negligence because car dealers have "a duty to conduct a reasonable inspection of the vehicle prior to sale in order to determine whether there are any patent defects existing at the time of sale which would make the vehicle unsafe for ordinary operation."

Woodhouse has said in court documents that it did not inspect the van before it was sold. But the high court said it would be up to a jury to determine whether the van's safety defects would have been found during an inspection.

CAR COMPETITION: Used car lots say finding inventory is a challenge


Iowans looking to spend less on a vehicle may consider choosing used over new. But lately used car aren't offering consumer the savings they have in the past. Analysts say the supply of used cars on the market is down for several reasons. The economic recession prompted people to hold on to cars longer. When drivers did trade them in, it was part of the federal government's Cash for Clunkers Program. The program required people to buy new cars and dealers to destroy the so-called clunkers. Now used car dealers say finding quality inventory to sell has never been more difficult.

"There are not very many used cars out there. So the prices are up right now, and I see them staying up through tax season," said Rob Maser, the Pre-Owned Sales Manager at Des Moines Imports.

The most recent numbers from October show wholesale used car prices were about 12.7% higher than October of 2008, according to the Manheim Used Vehicle Value Index. But there are signs of improvement. Prices are down 0.9% from a record-high in September.

Car sales a windy road

It might be a good time to consider trading in that late-model used car or truck and pick up a new one, according to two national automobile associations.

The auto experts base their assumption on a variety of factors:

• The Cash for Clunkers program depleted the used-car inventory, because the cars that were traded in were crushed, not sold again.

• People are holding onto their used cars for an average of a year longer than they did five years ago.

• Rental car companies are holding onto vehicles longer.

• And new cars are in short supply during the economic recession.

Local dealers have mixed views on the subject.

They all agree Cash for Clunkers was a success, but they also say the event pushed many buyers into the market early. Instead of waiting several more months to buy, they bought early, getting rid of their old cars and buying something new.

Other dealers say the program pushed many lifelong used-car buyers, who would have driven their rides until they could be driven no further, into the new car market for the first time.

Independent dealers say they are paying higher prices at used-car auctions. New dealers say their inventory of used cars is holding strong. Some dealers have refilled their lots with new vehicles, while other dealerships are waiting for factories to increase production. And a seller of lower-end used cars said he can’t keep up with demand.

“A dealer with normal demand, stationed in a normal metro area, should be able to give you normal market value (for your used car), because he is in need,” said Juan Flores, director of valuation at Kelly Blue Book. “Right now, as a customer, you might have a leg to stand on. You might be able to negotiate.”

Bottom line, said Paul Taylor, chief economist for the National Automobile Dealers Association: “There are currently about 5 million fewer used cars (coming) into dealerships on a yearly basis.”

The confluence of events has driven up the price of late-model used cars in each of the first eight months of the year, Taylor said in an e-mail to The Daily Sentinel.

Kenneth Simon, general sales manager for Western Slope Ford, Lincoln, Mercury, Toyota, 2264 U.S. Highway 6&50, said during the height of Cash for Clunkers there was a shortage of late-model used cars, but the market has corrected itself. And the manufacturers who supply new vehicles for his dealership have been able to maintain his inventory, he said.

The story is different at Grand Junction Chrysler Jeep Dodge, 2578 U.S. Highway 6&50. Chrysler shut down its factories for two months and is taking another month and a half to ramp up production, said Mike Edwards, general manager.

Edwards said the dealership would average 35 to 45 sales a month, but with vehicles going out the door and no new stock coming in, he’s down to 32 vehicles. Edwards said he expects 132 new vehicles during the next two months. When they arrive, his lot will be fuller than it has been in months.

Edwards said late-model used cars are holding their value, but Ron Bubar, owner of Grand Junction Subaru, 2496 U.S. Highway 6&50, said those used-car prices are now either leveling off or declining, compared with two months ago after Cash for Clunkers ended. Incidentally, Bubar said, during Cash for Clunkers the dealership sold 42 vehicles. It was the best month it ever had, he said.

Bubar said he is not overpaying for used trades at auctions because he doesn’t want to be stuck with cars sitting on the lot for months that he cannot sell.

“We want inventory to turn quick,” he said.

On the new-car side there are some shortages. Bubar said he has been in communication with his district manager four times this week, pressuring him for more inventory because of consumer demand. Subaru has increased its light-vehicle sales in the past 10 months by 13 percent, according to a report released Nov. 3 by Automotive News.

“It’s a good problem to have,” Bubar said.

The dealers that are suffering from increased used-car prices are the smaller independent used-car dealers, said Mike Alano, sales manager for Modern Classic Motors, 975 Independent Ave.

Alano said he is having to pay more for used vehicles at auction because dealerships that were dropped by downsizing manufacturers are now restocking depleted inventories through those same used-car auctions.

“Now I’ve got to compete with them,” Alano said. “Getting a nice used car right now is very difficult.”

Looking for a new used car for her son, Denise Huffines, from the Roaring Fork Valley, is learning the problem is not finding the car, but finding the right car at the right price.

“I never buy new,” she said while looking at a used Toyota in the lot at Grand Junction Subaru. For the $6,000 she is willing to spend on a used car, she is finding that a decade-old ride is going to cost in the neighborhood of $6,000, which she said was about right.

“I think they are pretty reasonably priced,” she said.

Meanwhile, Kay and Pier Maraschin, from Grand Junction, were shopping for a new Toyota Prius hybrid at Western Slope Toyota. They already own a 2006 model of the same car but want the latest features.

Kay said she won’t be trading in the Prius but is working hard on her husband to part with an old pickup. A trade-in could offset their biggest gripe about the car: It costs $4,000 more than they want to spend.

Until drivers decide they want new cars, those vehicles will sit on dealer lots.

Bob Belcastro, manager of Belcastro Motors, 841 N. First St., knows all about cars sitting for too long on his sales lot. He said sales are way down, and if no one is buying, no dealer wants to load up on used cars.

“No sense having 2 1/2 million (cars) sitting here if you only talk to 10 customers a month,” he said. “We’re not moving that much product. I don’t know who is.”

Jim Wilcox, owner of A Pawn Shop, 353 Pitkin Ave., said he is. His vehicles are, for the most part, around a decade old and sell for a few thousand dollars.

Compared to last year, Wilcox said he has twice as many people bringing in vehicles for loans, and half as many are returning to pay off their loan. Also, compared to a year ago, he is not shopping for inventory. Instead, people are bringing in more vehicles than he can sell.

“I am turning down cars that I normally would buy, and I’m selling the hell out of them, and it really surprises me,” he said. “I’m giving less for cars now and selling for less ... and doubling sales.”

Used cars in high demand, command premium prices

Dale Sharp's 6-year-old Honda minivan had been reliable, but no longer needed, so Sharp advertised it for sale for $8,000.

"The first caller bought it for the asking price," said Sharp, of Orlando. "No negotiation."

The ease of the transaction wasn't surprising. Used vehicles prices jumped an average of 16 percent in October compared with a year ago, according to Edmunds.com, an automotive information Web site.

Leading the rise are minivans such as Sharp's, up 27.1 percent. The Web site shows increases for 14 of 15 vehicle categories, with the only decline being a 1.6 percent drop in the price of mid-sized cars.

The dramatic increase stems from basic economic principals, said Joe Spina, analyst for the California-based Edmunds.com. "Used car supply is down, and demand is up," he said.

The supply has diminished for several reasons, Spina said. One is because many vehicle manufacturers cut their leasing programs several years ago, meaning there are fewer vehicles coming off lease and entering the used market.

Another reason is the federal
"Cash for Clunkers" program, which gave consumers an incentive of up to $4,500 to trade in older vehicles for new ones. Those older vehicles were destroyed, meaning nearly 700,000 vehicles that could have ended up in the used car market were eliminated.

And finally, new car sales are down — especially after the clunkers program ended in August, so fewer customers are trading in their used cars.

Meanwhile, demand is up because many traditional new car shoppers are now considering used because of the economy, Spina said.

All the price volatility "is making the used car business very difficult, very complicated," said Ron Thurston, one of the owners of Thurston's Used Cars in
Clermont. "Five years ago, we could pretty much predict what the market would do — what would sell, and for how much. It's impossible now."

Shawn Allen, general sales manager at Greenway
Dodge in Orlando, said that another reason the used market is hot is because the credit market remains tight.

"We're seeing a lot of people who want to come in and pay cash for a vehicle, versus financing a new one. A lot of our traffic is looking for a $6,000 to $8,000 car, rather than financing a new $20,000 automobile. People are saving up their money and putting cash down."

Consequently, with demand up, finding good used cars at the auctions is tough. "They're there," Allen said, "but you have to pay all the money for them."

That said, there is some evidence in the Orlando area that used prices might have peaked.

"We've seen a drop recently in price," said Joe Oberman, a sales manager for Mullinax
Ford in Apopka. And the supply is increasing slightly, he said.

"Good used vehicles are still hard to find, but it appears to be loosening up a little. Right after the clunkers program, it was really tight. Now, our buyers are out spending a little more time finding good vehicles, but they are there. You just have to look harder."

Indeed, Manheim Consulting, an analysis arm of one of the top auction houses, said that used-car prices hit at an all-time high in September, but October's numbers showed a slight decrease, the first drop in nine months. A drop in wholesale prices is typically followed by a drop in retail prices.

According to Cross-Sell, a data-gathering company in Kentucky that monitors new and used vehicle registrations, 168,304 used vehicles were sold in Florida last August, compared with 219,074 in September. October figures are not yet in, but are expected to be strong.

It's tough financing anything, new or used, for customers who don't have the perfect debt-to-income ratio, Oberman said. Even people with a very high credit score may have problems, he said, if the lending institutions suspect the customer is carrying more debt than he or she should. "The banks are very wary right now."

Thurston agreed that cash for clunkers skewed the market, and its lingering effects remain. Near the end of the program, when most of the clunkers customers who could finance a new car had already bought one, new car dealers were stocking more used cars to build up the inventory, Thurston said.

Now, though, prices are adjusting again, because the new car dealers don't need as many of the used cars as they did before.

"This has been the worst 18 months in the car business," said Thurston, who has been selling cars for 15 years. "Nobody knows what the market will do."

Sunday, November 8, 2009

FN Reliability Award Is Reason Enough To Buy A Used Honda

Honda_CivicReliability is a key factor to consider when purchasing a car and with the results of the Fleet News magazine 2009 top50 results just released it is the perfect opportunity for customers and consumers around the UK to take stock of the situation and make a informed decision about their next purchase and used Honda’s recorded staggering results.

The Japanese and German car manufacturers have come out of the latest survey very well, with the Honda Civic coming out with the top honour of being the most reliable car on the market today. There was even more reason for the Japanese car giant to celebrate with two more of their cars featuring heavily inside the top 5 cars with the Honda Jazz in third place and the Honda Accord scooping fourth place.

Maintaining a sense of European pride within the top ten was BMW who managed to take the second and fifth placing with their 3 and 5 series cars respectively. The BMW brand also managed to score another success with the subsidiary brand Mini which managed to come in eighth place.

The remaining places in the survey were filled by the Audi A4, the Mercedes C Class, Toyota Avensis and Volkswagen Golf. The two brands BMW and Honda were tied on reliability statistics but it was the German manufacturer who managed to walk away with the overall prize having taken more votes overall.

Car sales a windy road

It might be a good time to consider trading in that late-model used car or truck and pick up a new one, according to two national automobile associations.

The auto experts base their assumption on a variety of factors:

• The Cash for Clunkers program depleted the used-car inventory, because the cars that were traded in were crushed, not sold again.

• People are holding onto their used cars for an average of a year longer than they did five years ago.

• Rental car companies are holding onto vehicles longer.

• And new cars are in short supply during the economic recession.

Local dealers have mixed views on the subject.

They all agree Cash for Clunkers was a success, but they also say the event pushed many buyers into the market early. Instead of waiting several more months to buy, they bought early, getting rid of their old cars and buying something new.

Other dealers say the program pushed many lifelong used-car buyers, who would have driven their rides until they could be driven no further, into the new car market for the first time.

Independent dealers say they are paying higher prices at used-car auctions. New dealers say their inventory of used cars is holding strong. Some dealers have refilled their lots with new vehicles, while other dealerships are waiting for factories to increase production. And a seller of lower-end used cars said he can’t keep up with demand.

“A dealer with normal demand, stationed in a normal metro area, should be able to give you normal market value (for your used car), because he is in need,” said Juan Flores, director of valuation at Kelly Blue Book. “Right now, as a customer, you might have a leg to stand on. You might be able to negotiate.”

Bottom line, said Paul Taylor, chief economist for the National Automobile Dealers Association: “There are currently about 5 million fewer used cars (coming) into dealerships on a yearly basis.”

The confluence of events has driven up the price of late-model used cars in each of the first eight months of the year, Taylor said in an e-mail to The Daily Sentinel.

Kenneth Simon, general sales manager for Western Slope Ford, Lincoln, Mercury, Toyota, 2264 U.S. Highway 6&50, said during the height of Cash for Clunkers there was a shortage of late-model used cars, but the market has corrected itself. And the manufacturers who supply new vehicles for his dealership have been able to maintain his inventory, he said.

The story is different at Grand Junction Chrysler Jeep Dodge, 2578 U.S. Highway 6&50. Chrysler shut down its factories for two months and is taking another month and a half to ramp up production, said Mike Edwards, general manager.

Edwards said the dealership would average 35 to 45 sales a month, but with vehicles going out the door and no new stock coming in, he’s down to 32 vehicles. Edwards said he expects 132 new vehicles during the next two months. When they arrive, his lot will be fuller than it has been in months.

Edwards said late-model used cars are holding their value, but Ron Bubar, owner of Grand Junction Subaru, 2496 U.S. Highway 6&50, said those used-car prices are now either leveling off or declining, compared with two months ago after Cash for Clunkers ended. Incidentally, Bubar said, during Cash for Clunkers the dealership sold 42 vehicles. It was the best month it ever had, he said.

Bubar said he is not paying a lot for used trades because he doesn’t want to be stuck with cars sitting on the lot for months that he cannot sell.

“We want inventory to turn quick,” he said.

On the new-car side there are some shortages. Bubar said he has been in communication with his district manager four times this week, pressuring him for more inventory because of consumer demand. Subaru has increased its light-vehicle sales in the past 10 months by 13 percent, according to a report released Nov. 3 by Automotive News.

“It’s a good problem to have,” Bubar said.

The dealers that are suffering from increased used-car prices are the smaller independent used-car dealers, said Mike Alano, sales manager for Modern Classic Motors, 975 Independent Ave.

Alano said he is having to pay more for used vehicles at auction because dealerships that were dropped by downsizing manufacturers are now restocking depleted inventories through those same used-car auctions.

“Now I’ve got to compete with them,” Alano said. “Getting a nice used car right now is very difficult.”

Looking for a new used car for her son, Denise Huffines, from the Roaring Fork Valley, is learning the problem is not finding the car, but finding the right car at the right price.

“I never buy new,” she said while looking at a used Toyota in the lot at Grand Junction Subaru. For the $6,000 she is willing to spend on a used car, she is finding that a decade-old ride is going to cost in the neighborhood of $6,000, which she said was about right.

“I think they are pretty reasonably priced,” she said.

Meanwhile, Kay and Pier Maraschin, from Grand Junction, were shopping for a new Toyota Prius hybrid at Western Slope Toyota. They already own a 2006 model of the same car but want the latest features.

Kay said she won’t be trading in the Prius but is working hard on her husband to part with an old pickup. A trade-in could offset their biggest gripe about the car: It costs $4,000 more than they want to spend.

Until drivers decide they want new cars, those vehicles will sit on dealer lots.

Bob Belcastro, manager of Belcastro Motors, 841 N. First St., knows all about cars sitting for too long on his sales lot. He said sales are way down, and if no one is buying, no dealer wants to load up on used cars.

“No sense having 2 1/2 million (cars) sitting here if you only talk to 10 customers a month,” he said. “We’re not moving that much product. I don’t know who is.”

Jim Wilcox, owner of A Pawn Shop, 353 Pitkin Ave., said he is. His vehicles are, for the most part, around a decade old and sell for a few thousand dollars.

Compared to last year, Wilcox said he has twice as many people bringing in vehicles for loans, and half as many are returning to pay off their loan. Also, compared to a year ago, he is not shopping for inventory. Instead, people are bringing in more vehicles than he can sell.

“I am turning down cars that I normally would buy, and I’m selling the hell out of them, and it really surprises me,” he said. “I’m giving less for cars now and selling for less ... and doubling sales.”

New tough law on used cars out

THE Uganda National Bureau of Standards (UNBS) will on November 1 launch the pre-export verification conformity-to-standards scheme, targeting the road worthiness of all used vehicles imported into the country.

The inspections will be conducted from the country of origin before the vehicles are imported. The scheme will focus on detailing the condition, accessories, structural, functional and mechanical integrity of used vehicles destined to Uganda prior to importation.

Certification will then be issued to the vehicles that are appraised as road worthy and a report attesting to the inspection and certification will be given to the importer.

The UNBS explained in a statement this week that the country was experiencing an unprecedented influx of imported used vehicles, mostly originating from the Middle East, Japan and Europe.

“Unfortunately, some of these vehicles are substandard and in dangerous mechanical conditions that can endanger the public and the environment,” the statement said.

“In addition, some of the imported cars are obtained illegally in the country of origin and shipped to Uganda without following proper procedures.

“The situation is compounded by the fact that second-hand vehicles in most cases produce impermissible levels of emissions that pollute the environment, thereby adversely contributing to climate change,” the statement added.

The Japan Export Vehicle Centre Company, Jabil Kilimanjaro Auto Elect Mechanic & Paints Company, together with the East Africa Auto-Mobile Services, have been contracted to handle the exercise, expected to further increase the costs of imported used cars.

Richard Ebong, a UNBS senior market surveillance officer, told clearing and forwarding agents at a sensitisation workshop at Hotel Africana in Kampala that used vehicles entering into the country without an inspection certificate will be subjected to a penalty of 15% of the cost, insurance and freight (CIF) value. In addition, they will also be subjected to inspection.

Inspection fees for cars originating from Japan will be $145, Singapore $180, the UK 125 pounds, South Africa 1,685 rands and Dubai $125.

Kassim Omar, the clearing and forwarding national chairman, called for more public sensitisation to avoid the conflicts that may arise during the implementation of the scheme.

Japan's Great Auto Shift

What do American used cars, government incentives, and China have in common? They each get credit for a rebound in Japanese auto makers' fortunes.

But only one of those -- China's hunger for cars -- is something the companies can count on to continue.

Expected to post a second-quarter loss Thursday, Toyota Motor instead reported a $242 million profit. With substantial cost cuts ongoing, it joined rivals Nissan Motor and Honda Motor in upgrading earnings forecasts for the year ending in March.

[japan autos]

The rebounding value of used cars in the U.S. played a big role in this. Lower reserves for cars on lease and loan-losses contributed $810 million in operating profit at Toyota, and $817 million at Nissan. Both items were financial drains last year.

No doubt, the U.S. cash-for-clunkers program helped, as did similar incentives in Japan. Toyota topped the sales list under the U.S. program.

Neither of these is sustainable -- the clunker program, of course, has already ended. Sales growth in China, on the other hand, will continue.

Nissan's been a real beneficiary lately thanks to its small cars and a distribution network that reaches further inland than its rivals. Its sales in China are up 19.3% in the six months through September, but dropped in every other market. By the March year-end, China will have displaced Japan as Nissan's No. 2 market by volume.

Admittedly, a key driver of sales growth has been a tax cut that Beijing may or may not extend into next year. Some consumers, fearing its end, may have brought forward car purchases, which means sales will undoubtedly slow from their current heady pace.

But an improving economy, demand from second-and third-tier cities and increasing use of financing will keep growth going. Sales of Japanese cars in China, J.D. Power & Associates projects, will grow at 6% to 9% per year in the coming few years -- faster than the overall market.

The companies don't yet break out China profits, which pass through joint ventures. But the "other" category into which Nissan lumps Chinese earnings generated $314 million in operating profit in the first half of the year -- almost a third of the total.

There are risks in heavily depending on a single market for sales growth. With China, though, the greater folly would be not being there at all.

Tuesday, November 3, 2009

Dealers say used-car stocks are dwindling


HOUMA — As sales of new cars remain low, local used-car dealers say they're having trouble keeping up their inventories. Fewer new-car sales means fewer of the used trade-ins they sell to their customers, they say.


Independent dealers say the prices they pay for used cars are rising. And customers are facing diminishing selection and higher sticker prices.


When sales of new cars were up, the dealers say, new-car dealerships had stock they were willing to sell at a price the used-car lots could afford. Now the new-car dealers are holding on to more of the trade-ins they receive because their sales volume is down.


In Terrebonne Parish, tax records show new-car sales were down by 26 percent in September when compared with the same month in 2008. Lafourche does not break down sales tax by type.


Melissa Wyman, owner of Melissa's Auto Sales on East Main Street in Houma, was among dealers interviewed Monday who said there's plenty of evidence to demonstrate the trend. Increasingly harder to find, she and other dealers said, are the low-mileage, well-kept vehicles customers want.


“We used to be able to buy them. There were a lot of them out there to go get,” she said, referring to used cars meeting the grade she is comfortable offering to her customers. “I've been in business 20 years and never seen it like this.”


Wyman has had as many as 35 vehicles for sale on her lot at one time. Right now she's down to eight.


Kevin Rembert, a former Houma auto dealer now operating in Slidell, serves on the Louisiana Independent Automobile Dealers Association's board of directors. Rembert said there are several ways consumers will be impacted by the shortage.


“There will be a smaller selection for you to pick from,” he said. “You may not get exactly what you want sometimes and you may end up having to pay a little more for them.”


Rembert described the issue as “a little bit of a shortage” largely caused by people not trading in as many cars.


“Consequently there are less new cars on the market. New car sales are down, so since they are selling less new cars they are trading less … It's a snowball effect,” Rembert said.


Cars are also lasting longer, Rembert said, and people are holding onto them longer.


At N&N Auto Sales on West Main Street, salesman Ryan Arceneaux said the shortage has made for lean times.


“We're getting them, but it's few and far between,” he said of the inventory that helps him make a living.


The federal government's “Cash-for-Clunkers” program made a dent in the market too, some dealers said. Cars that were traded in under the program can't legally be resold. And one person's “clunker” could be another's dream car or truck. Arceneaux said big Ford pickups, for example, are all the rage among buyers locally and he's having trouble keeping them in stock.


New car dealers who also have used cars on their lots reported fewer difficulties than those whose stock is entirely used.


Used dealers did express hope that the shortage will be temporary, and improve as the economy recovers.


“I think after the first of the year it might get a little bit better,” Melissa Wyman said.

Ford's New Lease on Life

Ford Motor Chief Executive Alan Mulally loves to wax lyrical about the car company's slate of new trucks and cars. But he can thank sales of used vehicles for playing a big part in Ford's surprise third-quarter profit.

[ford and earnings]

Out of pretax profit of $1.1 billion, excluding special items, $661 million came from financial services. Many analysts expected a profit of perhaps $100 million to $200 million, or even a loss, from Ford Motor Credit.

The big swing factor was a sharp increase in the value of used vehicles sold at auction. The Manheim Used Vehicle Value Index has risen for nine consecutive months since December 2008's low point, hitting an all-time peak in September. Higher used-car prices reduce losses on vehicles that come back to Ford after their leases expire, which it then sells. Pricing of used trucks and sport utility vehicles has risen particularly strongly.

[ford and earnings]

Ford monster truck crushing clunkers at the Sawgrass Ford dealership in Sunrise, Fla.

Is it sustainable? Manheim, at least, suspects used-vehicle prices are reaching a plateau, with prices weakening noticeably in the last week of September. The dislocation in Detroit this year and efforts by the likes of Ford to sharply reduce bloated inventories have helped curb supply. That discipline will need to be maintained.

On the new-vehicle front, it remains to be seen how well sales hold up as government "clunker" programs end. Ford does boast one of the strongest new-product pipelines in the industry. But while Ford raised its guidance for 2011, it will be next quarter before it issues an updated outlook for 2010. And its decision to raise another $3 billion from investors speaks to the need to fix its balance sheet. Like any other auto maker, it needs a consumer-led recovery that isn't dependent on government steroids to really come into its own.

Ford May Be on a Roll, But Consumer Data is Still Mixed

A third-quarter profit at Ford (F) gave a big push to that Ford bandwagon I wrote about here recently, even though Ford itself sounded some cautionary notes in its third-quarter presentation.

Results for Ford’s captive finance company, Ford Credit, illustrate why. Even though economists are reporting that the current recession is already ended, consumers are giving mixed signals.

For instance, repossessions as a percentage of Ford Credit’s total portfolio remain high, relatively speaking, at more than 3 percent. Ford Credit’s average loss per repossession is down, but that’s probably a function of improving used-car values, rather than a positive reflection on consumers. Improved used-car values mean higher values for repossessed cars and trucks. Ford Credit auctions them off to dealers.

At the same time, delinquencies over 60 days old are trending down at Ford Credit. That could mean consumers are having an easier time keeping up with payments, but it could also reflect higher standards at Ford Credit for who gets a loan in the first place.

Meanwhile, Standard & Poor’s upgraded Ford to “Buy” from “Hold” yesterday on the strength of a nearly $1 billion quarterly profit for Ford, versus the rating agency’s earlier prediction of a loss, plus Ford’s forecast that it will achieve profitability for a full year sooner than expected, in 2011.

Interestingly, even though Ford upgraded its 2011 forecast yesterday, the company continues to soft-pedal the short-term outlook for the rest of 2009 and 2010.

Media coverage of Ford’s results emphasized the “surprise” aspect of the net profit, although there had been some hints beforehand that Ford had good news in store.

Fox Business News, for instance, did a mostly admiring interview with Ford President and CEO Alan Mulally. Interviewer Liz Claman did get in a couple of pointed questions, although she kicked off the interview by saying, “Talk about how you did it, Mr. Mulally!” She later added, “They’re never going to let you retire, Alan.”

The pointed questions were whether Ford could sustain a profit without the help of Cash for Clunkers, which helped third-quarter results. Mulally hedged and reiterated Ford’s earlier guidance that it will achieve positive cash flow in the fourth quarter. That’s a good thing, but short of a promise that Ford will achieve a fourth-quarter net profit.

Claman also asked what Mulally planned to do, to address Ford’s “angry” UAW workers in the United States, who rejected Ford’s latest proposed concessions. Separately, the same question came up earlier in the day, in Ford’s conference call with reporters and analysts.

Characteristically, Mulally ducked the question whether the union workers are angry and resorted to a Mom-and-apple-pie statement about “providing opportunities” and “competitiveness.” That may be bland, but Mulally is smart to avoid providing the UAW with locker-room quotations that can be used against him. The Ford bandwagon is rolling anyway, without a lot of grandstanding.

Thursday, October 29, 2009

New tough law on used cars out

THE Uganda National Bureau of Standards (UNBS) will on November 1 launch the pre-export verification conformity-to-standards scheme, targeting the road worthiness of all used vehicles imported into the country.

The inspections will be conducted from the country of origin before the vehicles are imported. The scheme will focus on detailing the condition, accessories, structural, functional and mechanical integrity of used vehicles destined to Uganda prior to importation.

Certification will then be issued to the vehicles that are appraised as road worthy and a report attesting to the inspection and certification will be given to the importer.

The UNBS explained in a statement this week that the country was experiencing an unprecedented influx of imported used vehicles, mostly originating from the Middle East, Japan and Europe.

“Unfortunately, some of these vehicles are substandard and in dangerous mechanical conditions that can endanger the public and the environment,” the statement said.

“In addition, some of the imported cars are obtained illegally in the country of origin and shipped to Uganda without following proper procedures.

“The situation is compounded by the fact that second-hand vehicles in most cases produce impermissible levels of emissions that pollute the environment, thereby adversely contributing to climate change,” the statement added.

The Japan Export Vehicle Centre Company, Jabil Kilimanjaro Auto Elect Mechanic & Paints Company, together with the East Africa Auto-Mobile Services, have been contracted to handle the exercise, expected to further increase the costs of imported used cars.

Richard Ebong, a UNBS senior market surveillance officer, told clearing and forwarding agents at a sensitisation workshop at Hotel Africana in Kampala that used vehicles entering into the country without an inspection certificate will be subjected to a penalty of 15% of the cost, insurance and freight (CIF) value. In addition, they will also be subjected to inspection.

Inspection fees for cars originating from Japan will be $145, Singapore $180, the UK 125 pounds, South Africa 1,685 rands and Dubai $125.

Kassim Omar, the clearing and forwarding national chairman, called for more public sensitisation to avoid the conflicts that may arise during the implementation of the scheme.

According to the standards watchdog statement, the scheme is expected to offer value for money in the purchase of used vehicles, reduced environmental problems, providing importers, especially online/internet buyers, with professional assessment, reducing incidences of importation of stolen vehicles and increasing the lifespan of vehicles.

Hyundai bets big on used car business

NEW DELHI: With its used car business growing faster, Hyundai Motor India has taken a fresh initiative to focus on Hyundai Advantage – the arm dealing with the used car business. Hyundai buys all the cars of any make and any model under the exchange scheme.

With the aim to cater to the needs of exchange customers, Hyundai Advantage was launched in 2006 with six dealers across six prominent locations in India. “Today, Hyundai Advantage boasts of 69 operational dealers across 49 locations in India and the plan is to take the number up to 108 across 59 cities by the end of 2009 and to 200 operational dealers by the end of 2010,” sais Arvind Saxena, Sr V-P, marketing & sales, HMIL.

Saxena said, “The size of the used car business in India is approximately 1.3 million
cars per annum. This number is expected to grow exponentially in the next few years. We want to aggressively focus on Hyundai Advantage, as it will not only help us retain our old customers through exchange and upgrade schemes but will also make an interesting business proposition given the phenomenal market for used cars in India.”

According to him, strict quality standards are maintained to ensure that the used cars sold are of a superior quality and the buyer gets complete peace of mind. “Each used car is put through a rigorous series of checks, which covers every aspect of the car’s functioning. Hence, each customer is assured of a certified used car in very good condition,” he said.

The Sorento goes global

WITH 900,000 UNITS SOLD, Kia didn’t need a celebrity-sport star flying through desert dunes to introduce the Sorento’s new from-the-ground-up replacement. Since 2002, the Sorento established itself with its unique character composed of big torque engines, all terrain toughness of a ladder frame chassis, innovative styling, and refined interiors.

RELIABILITY and the fun factor added: The new Kia Sorento
RELIABILITY and the fun factor added: The new Kia Sorento

This time, Peter Schreyer, Kia’s chief design officer, didn’t miss a chance to align the Sorento with Kia’s new design DNA as seen in the Soul, C’eed and Forte models. To wit; seamless grille and headlamp bezel interface, rising upper belt-line and trapezoid C-pillar. The new, longer bodyshell was a result of repositioned A-pillars and dashboard (moved forward) and extended tailgate (moved rearwards). The stretched cabin is much more spacious than the exiting model, with a 15% increase in luggage space. There’s space for seven passengers, though not as spacious as the one size bigger Kia Mohave/Borrego.

The new uni-body Sorento is longer and lower, losing some 215 kgs in the process. The drag coefficient is now 0.38, down from it’s predecessor’s 0.43. With a body structure composed of 70.4% high-tensile steel, the new Sorento achieves good NVH qualities. This new found stiffness gives the Sorento a EuroNCAP crash rating of five stars. It also makes the interior a better music chamber. Fully independent suspension all around enhance the car like driving feel. Dispensing with the ladder frame chassis allowed engineers to lower the suspension by 10 mm, moving the center of gravity lower by 54 mm.

In keeping with Kia’s new look, the video screen and major switches are outlined in red laser lights. The latest Kia trademarks �” the thick-rimmed three-spoke steering wheel and the “three-cylinder” instrument cluster with radiating “rays” of red from the center pivot of the gauge needles �” carries Kia’s new design language a step further. Well thought of cruise control buttons are mounted on the steering wheel. The Sorento comes with a rather accurate fuel meter. A welcome trend among Korean cars is the quicker steering ratio which avoids the "boring" feel of steering that is unresponsive around the center.

Kia embraces all the world’s car makers’ best practices. The outline of the greenhouse is similar to the Mitsubishi Outlander seven-seater as sold in the EU market. The Sorento has BMW-like keyless entry and start/stop button. It has a buttressed part-floating console and B-pillar air-con vents like a Volvo. Instruments set into nacelles are either inspired by the latest Mercedes Benz or cars from the ’70s. The clamshell hood used to be unique to SAAB and the BMW 1800Ti of the ’60s. Behind the wheel, one overlooks the hood’s raised fender guides, last seen on ’70s cars. Those raised edges also function as aerodynamic splitters, similar to those aftermarket stick-on appendages that was the go-faster optical tuning kits for the square-cut cars of the ’80s. Part of this globalization meant goodbye to the previous Sorento’s North American characteristics; the floaty ride and finger light steering.

It may look global in detail but it’s still a product of Korea. Translation: for the super smooth highways of Korea where ravines are bridged and mountains are tunnelled. Kia added a bit more weighting to the steering so as not to mislead a spirited driver in expecting Mazda Mx-5 responses as one rarely encounters curves on Korean city streets and country highways. Likewise, the ride of the fully independent suspension is better at high speed superhighways than the rough concrete of Third World countries. The Sorento follows Kia’s corporate move to more supple seats and classy looking black piano-lacquer that is as high quality as the rest of the interior.

The New Sorento is initially available with the 175PS four-cylinder 2.4-liter Theta II petrol engine mated to a six-speed automatic with +/- gated shifter for manual overrides. Being Euro V compliant, it is no point and squirt runabout but it does 10.98 kms/liter on the highway and takes 11.74 seconds to do the 0-100 km/h sprint. Its 185 km/h top speed is achieved at a lazy 3,900 rpm in 6th gear. A high-tech 197PS turbo diesel 2.2-liter CRDi, a 165PS 2.7-liter V-6 powered by LPG, and 277PS 3.8-liter 24-valve V-6 will follow.

Though a bit more homogenized than the uniquely styled previous model, the Sorento is still a handsome SUV which would probably be more fun as a diesel. Seven years hence, the Sorento has added reliability and fun factor to its impressive CV. Not bad for a brand hitherto known only for making small cheap cars.

Thursday, October 22, 2009

Japanese supercar to shake Ferrari, Lamborghini and Porsche


The Lexus LF-A is the most powerful Japanese car ever produced and is designed to cement the luxury brand as a technology leader with genuine supercar performance.


It's rarer than a Rolls-Royce, faster than a Ferrari and more expensive than a waterfront unit - and it's from Japan.


Meet the latest supercar to be conceived as the global financial crisis thaws and car makers regain confidence in building the sorts of vehicles owners love to dream of and beancounters love to sell.


The sleek sports car is designed to catapult Toyota's luxury brand, Lexus, in to a new dimension usually reserved for Italian and German brands with decades of heritage created by Hollywood, celebrities and some of the world's best race tracks.


Lexus has officially joined the supercar club with its two-door, V10-powered LF-A coupe that's designed to take on Ferrari and Lamborghini and position Lexus as a serious performance brand.


After various concept cars, years of speculation and spy photos, the Lexus LF-A has been revealed at the 2009 Tokyo motor show, bringing another Japanese sports car to the unofficial supercar club dominated by Germany and Italy.


The LF-A is the fastest, most expensive and most exclusive Lexus ever built.


It's also the most powerful Japanese car to ever be sold. Only five of the 500 that will be produced will be brought to Australia and each will have a price tag of "anywhere between $500,000 and $1 million".


Lexus says the LF-A has a recommended retail price of "approximately US$375,000", but that's before hefty Australian taxes - including import duty, GST and luxury car tax - are applied.


The exact price is yet to be determined but could swing by tens of thousands of dollars depending on the exchange rate.


The Lexus LF-A has a 4.8-litre V10 producing a supercar-like 412kW of power, which is enough to propel the two-seater to 100km/h to 100km/h in just 3.7 seconds.


Top speed of the LF-A is 325km/h. Unlike the eight-speed transmission in Lexus' LS limousine, the LF-A makes do with six forward gear ratios in a dual-clutch set-up similar to those used by Porsche and others.


The LF-A also gets massive carbon ceramic brakes as part of a sophisticated braking package that also relies on tricky electronics.


In keeping with the supercar theme, Lexus has worked on the advanced, lightweight body to ensure a low centre of gravity and weight distribution that puts 48 per cent over the front wheels and the remaining 52 per cent over the rear.


While only a handful of Lexus owners will ever experience the LF-A, it's expected to ensure the brand is mentioned in the same sentence as Ferrari and Porsche.


Rather than adding volume to the brand that trails Germany's dominant luxury brands, the LF-A is about cementing Lexus as a serious performance car contender.


"The LF-A proves to people you don't need to be around for 100 years to produce a supercar," says Lexus Australia boss John Roca.


"A brand that didn't exist in 1990 is building a supercar in 2009 - that's a bold statement.


"We've been accused of being non emotional (as a brand). You'll see emotion is all over it. Roca says the LF-A is all about brand building and putting Lexus on a very European-dominated sports car map.


"The LF-A is the halo over the brand. It has technology that will flow down through the range. It shows that not only can you build the world's best luxury saloon but you can build a supercar."


Roca defends the decision to import just five, when established supercar brands can sell dozens more than that each year.


"The market just isn't there for a supercar at the moment, regardless of the badge," he says.

Toyota’s FT-EV II gives glimpse at electric future


With new battery technology and a fresh ground-up design the radical FT-EV II concept car from the Tokyo motor show is a vision of tomorrow’s electric car.


The 2009 Tokyo motor show has shed more light on Toyota’s electric future with the unveiling of the FT-EV II concept car that highlights the flexibility of electric vehicle design.


The FT-EV II is an evolution of the original FT-EV concept and gives a glimpse of how an electric-powered city car of the future could look.


Smaller than any Toyota on the market – it’s even smaller than the diminutive iQ hatch that’s on sale overseas – the FT-EV II can accommodate four (friendly) people in a three-plus-one layout; like the iQ, the fourth seat can accommodate a child or luggage.


Sliding side doors allow easy access and make it easier to get in or out in tight car parks.


The electric motor can travel around 90km at up to 100km/h, making it most useful in the city.


Rather than a conventional steering wheel, Toyota has fitted the FT-EV II with joystick like controls more reminiscent of some aircraft.


Key to the FT-EV II’s space efficiency is careful placement of the battery and electric motor, freeing up space at the front of the car.


Toyota has also paid attention to improving vision with a large windscreen and airy cabin feel.


Even the LED tail lights form part of the rear vision, allowing the driver to see through them when reversing.


Toyota says the FT-EV II assumes that battery technology will advance significantly beyond the current lithium-ion batteries that are finding their way in to electric cars and hybrids and will be used in an electric car to be sold initially in the United States from 2012.


“We are looking ahead of the lithium-ion battery,” said Akihiro Yanaka, Toyota’s project manager for advanced vehicles.


“This vision [the FT-EV II] is a little bit further out in to the future. It assumes more developed forms of batteries, so that’s why it’s more compact and smaller (than other electric cars, including the original FT-EV)”


As part of the push for improved efficiency Yanaka said Toyota is working on improving the efficiency of all ancillary items, such as air-conditioning, with the view to reducing the load on the power source.


“We are trying to have a more effective way of creating comfort. You don’t have to heat up or cool down the entire compartment, but if the person’s body can be heated then that is sufficient.”

Toyota to launch Prius next year in India, small car by early 2011


Tokyo, Oct. 21 After what seemed to be a lull in its new vehicle plans for India, Toyota Kirloskar Motor (TKM) will launch a slew of new cars during the next 14 months.


The Fortuner sports utility vehicle was launched last month. The new Land Cruiser Prado is also being considered for a possible introduction. But next to hit the roads will be the Prius (pronounced pree-us) — Toyota’s first and most successful hybrid passenger car. Of course, the car that is most keenly awaited will be the small hatchback. It is expected to be launched by the end of 2010 and will, finally, mark the car major’s entry into the mass-market segment in India.


Talking to a section of the Indian media on the sidelines of the 41st Tokyo Motor Show here, Mr Kazuo Okamoto, Vice-Chairman and Member of the Board, Toyota Motor Corporation, said that the company was lagging behind in the Indian market, but that it will catch up soon with the rest of the competition.


As part of the plans to offer more vehicles to buyers in India, Toyota has decided to launch the Prius there by January 2010. After first being showcased at the upcoming Auto Expo in Delhi, the Prius will be available for purchase at Toyota showrooms.


The Prius is a standalone hybrid car, which seamlessly integrates an electric motor that is powered by a Lithium-ion battery pack and a regular gasoline engine using Toyota’s proprietary Hybrid Synergy Drive system.


The car is likely to be imported in the CBU (completely built unit) form from Japan and marketed in India. It is an extremely low emission vehicle and it is expected to help Toyota make a statement regarding its environment-friendly technologies.


TKM sources feel that though the car will be launched in January, its availability will be limited due to heavy demand from buyers in markets such as the US and Japan.


Toyota has carried forward its hybrid technology into its other cars such as the Camry and the Crown. Speaking about the possibility of carrying forward its hybrid technology into the new small car, Mr Okamoto said that at this moment, the company is considering a hybrid in the small car too.


Small car hub



“Technically, the new small car platform is capable of also being used for a hybrid version. But there are no specific plans for it currently,” he said.


Speaking about the importance of the new small car, Mr Okamoto said that depending on the success of the hatch, the Indian operations of TKM could well become the global small car hub for Toyota. “That is the direction we will be taking, but a lot depends on the performance of the new small car in India,” he said.


The small car is currently being developed in Japan with considerable inputs from TKM and will meet all the quality parameters required by Toyota. The domestic market is likely to be the initial focus for the new small car and in the future it is likely to evolve into a global model that can cater to other markets too. With the addition of the small car to its portfolio and the possibility of a sedan also being built on the same platform, Toyota is aiming to corner a 10 per cent share of the Indian market by 2015.


“With the possibility of the Indian market being about 3.5 million units, we want our share to be about 350,000 to 400,000 units by 2015,” Mr Okamoto said. And with Toyota’s global sales being about 9-10 million units by then, the Indian operations will constitute about three-four per cent of the total. If exports from out of India happen by then, the number could be higher.


Mr Okamoto also confirmed that at this moment the new small car being developed by Toyota for emerging markets such as India will be the cheapest-ever made by the Japanese company.


Though efforts will continue to reduce costs of future models, Toyota is unlikely to look at making an ultra low-cost passenger car on the lines of the Tata Nano or the proposed car by the Bajaj-Renault combine.