Australian Car Advice | News Blog

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I’ll ask you a simple question, when you’re going to buy a car, what’s the first thing you do? Come online and research it. Simple, however you won’t believe how hard this concept has been for us to emphasis to manufacturers. Some simply believe the internet is a fad and one that will disappear.

 If you’ve noticed, we rarely feature any reviews on Fiat, Alfa Romeo, Citroen, Ferrari and Maserati.  This is not because we don’t like them (we love them), but because the agency responsible (same agency for all brands) for the press cars doesn’t believe in new-age media such as CarAdvice. Although, ironically, its marketing department disagrees and you may well have seen constant advertisements for Alfa Romeo on CarAdvice in recent months. Somewhat bizarre!

The internet is still a new concept to some but given the financial turmoil some of these companies are in, I imagine this will change sooner, rather than later.

The reason I mentioned this is because I am going to go over some of the highlights of the past year and some of the cars that really changed my attitude to brands and car culture in general.  Unfortunately I can’t honestly say I’ve experienced all cars, for the reason already mentioned, but here is what I can tell you.

 The car that changed my perception of an entire brand. If you read my Volvo C30 T5 review, you may in fact realise that just a week before I wrote it, I had this deep hatred for Volvo as a whole. Yes, hate is the appropriate word as it was true.

Honestly, how many of you out there dislike Volvo? Don’t deny it, you know it’s true, you can’t even imagine driving a Volvo, you can’t ever imagine answering “Oh, what do I drive? Umm … a … uh … Volvo”. Unfortunately for the Swedish manufacturer cool is simply not a word that can be associated with its brand.

Well, I tell you what. The perception and conception is completely wrong. Here I was, going flat out, keeping up with Anthony in the Aston Martin DB9 around twisty mountain roads and I felt sick. Sick because I realised that I’d been so wrong. Sick because I realised I’d been propagating this anti-Volvo stereotype for years (something of which I am still guilty).

You see the Volvo C30 T5 is a brilliant car, it’s a good $3000 more expensive than it ought to be and the list of options is extensive but it’s still brilliant. It looks good and it goes like a rocket. Then there is the Volvo S80, the car that convinced me that Volvo can be cool.

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Treasury Department spokewoman Brookly McLaughlin said, “We’re working expeditiously with Chrysler to finalise that transaction, and we remain committed to closing it on a timeline that will meet near-term funding needs.”

Chrysler said it remained in talks with the US Treasury to finalise its own US$4 billion loan agreement and expected to receive its share of the funding soon.

“The discussions relating to Chrysler LLC have been positive and productive and we look forward to finalising the details of our financial assistance in the immediate future,” Chrysler spokeswoman Shawn Morgan said in a statement.

GM spokesman Greg Martin said his company and the Treasury agreed on the government loan at about 4:30pm Wednesday, and GM subsequently received confirmation of the transfer of US$4 billion from the federal government.

The Bush administration has promised another US$9.4 billion for GM in the next few weeks. The final US$4 billion of that amount will require congressional action.

The Treasury Department this week also approved US$6 billion in aid for automotive lender GMAC, after allowing it to become a bank, and has signalled a willingness to help those suppliers whose shut-down would bring car-makers to a halt.

Car-makers receiving emergency loans must file plans by February 17 describing how they will restructure to become viable for the long term.

Unless agreements are changed by the incoming-Obama administration, a President’s designee, or ‘car czar’, is to decide by March 31 if a car-maker’s restructuring plan is sufficient. If not, the first loans will be called in, possibly forcing that company into bankruptcy.

Ford Motor Company is not seeking an emergency loan but wants to be able to tap a US$9 billion government line of credit if necessary.

Together the Detroit three (GM, Chrysler, Ford) CEOs told politicians early in December they need access to at least US$34 billion from the government to get through the extreme economic downturn.

Some analysts and economists say much more government help will be needed.

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The vehicle, which will be built on the GM global platform know as Delta will be built in the Elizabeth, South Australia, manufacturing plant, alongside the current Commodore.

The plant currently builds the Commodore, including export versions which are sold as Chevrolets in the Middle East predominantly, and in the United States where they are marked as Pontiacs. It previously also built an earlier version of the Vectra.

It would appear that the project will not add jobs to the South Australian workforce as Mr Reuss said the program would require 500 to 600 existing employees at Elizabeth and is estimated to provide 500 to 600 local supplier positions.

The vehicle, based on General Motors’ global Delta small car platform and feature new technologies to increase fuel efficiency and reduce greenhouse emissions.

The new front-wheel-drive vehicle will be built as a sedan and hatch and design and engineering work will take place at the company’s headquarters in Port Melbourne, Victoria.

Mr Reuss said start-stop hybrid technology and capacity to run on alternative fuels such as E85, diesel, LPG and Compressed Natural Gas (CNG) are all being considered for the vehicle’s development.

It will be GM Holden’s first locally produced car beyond its current range of larger vehicles since the Asian economic crisis ended Vectra production in 1998.

The vehicle will be built in the south bodyshop of the Elizabeth facility, which was previously used for the Vectra assembly in the late 1990s.

Mr Reuss said the announcement provided an opportunity to take a leading role in developing alternative fuel and fuel saving technologies in Australia for Australians.

Mr Reuss said the program would be a major contributor to the economy, generating an estimated $70 million to $80 million in wages and $30 million in research and development.

“Together with Government, we are extending the scope and consumer appeal of our local manufacturing efforts,” Mr Reuss said.

“We have been building Holden cars to suit the needs of Australian motorists for 60 years and these plans build on that tradition.

“We recognise the needs and desires of motorists are evolving with growing concern around environmental factors and shifting consumer sentiment.

“Such evolution calls for an innovative approach to complement our current offering.

“Just as our leading Commodore range will continue to undergo technological development, this new vehicle will cater for growing demand for smaller cars focused on economy.

“We are planning for the future to produce a wider range of cars in Australia to cater for a variety of driving needs.”

He added that flexible manufacturing infrastructure would be introduced to the Elizabeth plant to make it capable of producing a series of GM global vehicles in years to come.

It also provides opportunity to develop an export program for the vehicle, particularly to other right hand drive markets around the world.

Mr Reuss paid tribute to the Federal and South Australian Governments for their ongoing commitment to the Australian automotive industry.

“The Rudd Government’s Green Car Innovation Fund has provided opportunity to turn our plans into reality,” Mr Reuss said.

“This announcement complements the vision we share with the Government of reducing Australia’s dependence on foreign oil and making motoring better for the environment.

“It demonstrates commitment to an Australian automotive industry which extends beyond manufacturing at GM Holden to thousands of suppliers and dealers across the country.

“That demonstration was clearly seen by our parent company in its decision to support this program.

“The support of the Federal and South Australian Governments in securing this program recognises the fundamental role which automotive manufacturing makes to national and state economies.”

GM Group Vice President and Asia Pacific President, Nick Reilly, today added his support to the program as proof of GM’s capacity to innovate across the region.

“This announcement recognises the ability of GM, GM Holden and the Australian automotive industry to see the future and move in the right direction,” Mr Reilly said.

Holden isn’t giving a lot away about the exact detail of the new vehicle, unlike Ford, which is well advanced with planning to build the next generation Ford Focus in Melbourne from 2011.

The new small, front-wheel-drive, four-cylinder vehicle to be built by GM Holden at Elizabeth will be based on General Motors’ global Delta small car architecture.

Other examples of the architecture will include the next generation Chevrolet Cruze and Opel, Vauxhall and Saturn Astra.

The architecture was primarily developed by GM Europe in Russelsheim, Germany for GM markets around the world.

Local design and engineering work on the Australian vehicle will take place at GM Holden’s Port Melbourne headquarters in Victoria.

Direct injected petrol and diesel variants of the vehicle will be produced with GM Holden considering a range of alternative fuel or fuel saving technologies including E85, LPG, CNG and start-stop hybrid capability.

Further details about the vehicle including its nameplate, design specifications and pricing will be determined closer to the time of production.

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Cerberus also announced that its Chrysler Financial unit would offer $2 billion to backstop the federal loan, which Chrysler must repay at the end of the first quarter. Cerberus acquired 80.1 percent of Chrysler from Daimler AG for $7.4 billion in 2007.

“Cerberus is really focusing on the lending side of the automobile industry,” said Lars Luedeman, head of auto analysis, referring to Cerberus’s stake in Chrysler Financial and GMAC, “They’re effectively offering up the automotive side of the operation.”

Craig Fitzgerald, analyst for Plante & Moran, said Chrysler’s best hope for the future lies with finding a partner or partners “that will cause some of their brands and products to be moved over to competitors.”

Cerberus’s move to give up its equity stake could help the restructuring, said Kimberly Rodriguez, also with Grant Thornton.

“It’s really a pre-packaged bankruptcy without the pre-pack where equity is no longer in control,” she said. “It’s a cooperative way of handing over your position in a company to help it see another day. It’s an industry-supportive move by Cerberus, which is more beneficial to the other OEMs.”

The offer came two weeks after Cerberus had been lambasted in congressional hearings. Sen. Bob Corker, R-Tenn., asked Chrysler CEO Bob Nardelli why taxpayers should fund a Chrysler bailout when Cerberus refused to put any more money in it.

In a statement today, Cerberus responded to that criticism. The company said it manages and allocates capital on behalf of its investors — including “retirees, teachers, municipal workers and ordinary citizens” — and its charter limits how much it can put in any single investment.

Said the statement: “Cerberus is not a deposit-taking institution that can act as an ATM machine for its portfolio companies.”

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Since the strategic appointment of Chief Design Officer Peter Schreyer in 2006, KIA has designed and produced a series of new and refreshed models, and concepts, focused around what Schreyer calls a “linear and minimalist” design language.

The backbone of this drive has been the creation and operation of a global design network which has included the opening of dedicated KIA design centres in North America and Germany.

“Our cross-company pursuit of design excellence since 2005 has finally come to fruition,” Euisun Chung, President of KIA Motors said, “We will use the Korea Design Award as a stepping stone to continue to infuse our creative design spirit throughout many aspects of KIA’s business, not just limiting our efforts to product design.”

The award also recognized the creative, above-the-line corporate advertising campaign introduced in the Korea market since 2007 as well as newly designed vehicles recently released locally, including the Mohave (known as Borrego in other markets), Lotze Innovation (Optima or Magentis), Forte (Cerato or Spectra) and Soul.

The Korea Design Awards are sponsored by the Ministry of Knowledge Economy, and supported by the Korea Institute of Design Promotion. The annual awards are considered the definitive design awards in Korea.

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The President took the action after Congress last week rejected legislation to provide US$14-billion in loans, a move which would have required more federal aid next year.

Reports from the US say Bush Administration officials had repeatedly said this week that under normal circumstances they would want companies to reorganise under bankruptcy provisions, but that these were not normal times.

GM and Chrysler have repeatedly warned that they could run out of cash within a few weeks as vehicles sales in the US have dropped to levels not seen since the early 1980s.

Ford Motor Company said it does not face a similar crisis but wants access to a federal line of credit in case market conditions worsen or one of its rivals fails.

The Chief Executive Officers of the three Detroit-based carmakers told Congress in hearings December 4 and 5 that they need at least $34 billion from the federal government to weather the economic downturn.

In a statement GM said, “We appreciate the President extending a financial bridge at this most critical time for the US auto industry and our nation’s economy.  This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us.

This will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success.  It will lead to a leaner, stronger General Motors.

Ford also welcomed the move.

“As we told Congress, Ford is in a different position. We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government,” Ford President and CEO Alan Mulally said.

“But all of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler. The US auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardise millions of jobs and further damage the already weakened US economy.”

Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of Chrysler and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company. 

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CEO Rick Wagoner announced the plant on September 25th and said it would produce two versions of a 1.4-litre four-cylinder engine, one with a turbocharger for the Volt and one without for the Cruze.

The delay reflects GM’s heightened efforts to reduce spending as its supplies of cash dwindle. GM is waiting for the White House to approve a bailout that will keep the automaker operating and avoid a Chapter 11 bankruptcy filing.

The postponement will allow GM to halt payments for construction materials, Basel said.

“Steel has been ordered but placed on hold, as have additional orders,” she said. “This has only to do with the construction of the plant, not the program timing. There is enough leeway in the construction schedule for it to build the engines on time after the temporary hold”.

Although Basel did not say when the work would resume, she was quick to add that the factory is being built with a common template used all around the world and as such can be assembled in less than a year.

GM already builds a non-turbocharged version of the engine for its European small cars though Basel said GM has no plans to import those powerplants from Europe if the US project ends up behind schedule.

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The NSX was expected to have had a front-mounted, V10 engine and would have been the successor to the first-generation NSX (which had a mid-mounted V6). That NSX went out of production in late 2005 after 14 years.

Its successor was expected to debut as a 2010 model and was poised to be Honda’s answer to the Audi R8 and Nissan GT-R.

The NSX was expected to be outfitted with advanced technologies, including the Super Handling All-Wheel Drive system. It was also likely to get aluminum and carbon-fiber parts to keep weight low.

The program appeared to be on track as late as this summer, when spy shooters caught what looked to be an NSX on Germany’s famed Nürburgring circuit, but for now at least, the new NSX has been confined to the history books. A sad day for Honda fans indeed.

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Chrysler Australia spokesman Jerry Stamoulis said, “A month down in production at this stage won’t make a difference to consumers considering our vehicles. This is a calculated decision to match production to demand.”

Employees will not return to work any sooner than January 19th, 2009. At the moment we don’t have any further news or comment from Chrysler but will be sure to keep you posted.

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You see unfortunately the US consumer seems to blame China for job losses over the last decade and although the critics don’t mention that inexpensive goods from China lower Americans’ cost of living, or that automation has taken a huge toll on American manufacturing jobs, and while it is now considered the Chery - Chrysler alliance is being made a scapegoat for Chinese - US relations, in the eyes of the politicians at least, the risks of a deal with Chery were too high.

Perhaps it is just the US trying to protect their manufacturing jobs, or perhaps it is a case of history repeating itself for twenty odd years ago much the same could be said of Japanese manufacturers. Japanese automakers were blamed openly for the loss of American factory jobs. Auto workers made sport of smashing Japanese cars with sledgehammers.

Now Japanese automakers are widely embraced in the US. Why? Japan’s automakers invested there. They opened factories and dealerships across the country. They became a strong part of the American economy.

There in lies a lesson for the Chinese, they should follow the same path. Chinese companies need to think globally and start investing in operations in America and Europe instead of holding so much of their operations base (and wealth) at home, and though it is probably too late to win back any hopes of an alliance for Chery and Chrysler, future co-operations could make for stronger operations across foreign shores helping car makers become less vulnerable to economic tough times.

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The Prius sold 8,660 units in November, down from 16,737 in November 2007. Total Toyota sales in the United States fell 32 percent in November.

This is the second time Toyota has changed plans on the $1.3 billion Mississippi project, which has already begun to draw component suppliers to the area.

In February 2007, Toyota announced it would spend $1.3 billion there to produce a new generation of Highlander crossovers. But after Toyota broke ground, SUV sales began to soften. In July of this year, Toyota said it instead would build the Prius there.

A spokeswoman for Toyota’s North American manufacturing operations says the company will continue constructing the building, which is about 90 per cent complete. The company made its decision today before it had begun ordering the equipment that would go into the plant.

Toyota has no timetable to resume the project, the spokeswoman says, but it will remain a Prius factory whenever the project restarts.

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