Episode 492 – Allstate Sues Toyota, BMW Goes FWD, 50th-Anniversary Mustang

October 5th, 2010 at 12:09pm

Runtime 8:10

Allstate, the giant insurance company, is suing Toyota because of damages it had to pay to customers when their Toyota’s were damaged due to unintended acceleration. BMW has confirmed that it plans to introduce a line-up of compact, front-wheel-drive cars. Ford is cooking-up an extra-special Mustang for the 2014 model year, which is the 50th anniversary of the ponycar. All that and more, plus John shows you around the city of Turin, a place that’s referred to as the Detroit of Italy.

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This is Autoline Daily for October 5, 2010. And now, the news.

Toyota says that after investigating 4,000 cars, it can find no evidence whatsoever of electronic gremlins causing unintended acceleration. Toyota also says that complaints about unintended acceleration have fallen 80 percent since April. It is also in the process of equipping all its vehicles with a brake-override system that disengages the throttle if both the brake and gas pedal are pushed at the same time. But Bloomberg reports that Allstate, the giant insurance company, is suing Toyota because of damages it had to pay to customers when their Toyotas were damaged due to unintended acceleration. Allstate accuses Toyota of negligence, product liability, breach of implied warranty and fraud. It cites evidence from a company called Safety Research and Strategies Inc. that blames the problem on “undisclosed flaws.” I would point out that while Safety Research and Strategies Inc. presents itself as an advocate of safety, it makes its income selling information to plaintiff attorneys who specialize in suing car companies.

We here at Autoline Daily have been keeping a close eye on China’s big slowdown in exporting the rare-earth metals that are critical to making hybrids and electric cars. And we’ve been watching the spat between China and Japan over this and other issues. Now, Japan is going to formally ask China to resume exports of the materials. Bloomberg reports that 31 Japanese companies say they have been cut-off from rare-earth exports from China. It’s a critical problem. Japan relies on China for 90 percent of the rare-earth metals that it imports.

SARKOZY TICKED-OFF AT GHOSN (subscription required)
France’s President, Nicolas Sarkozy is not happy with Renault’s CEO, Carlos Ghosn. According to Ward’s, Sarkozy is ticked-off that Renault is moving jobs out of the country after France provided financial support to the company. Ghosn says it has to grow in international markets, and so it must build cars overseas. He also points out that Renault will build its electric cars in France. France loaned Renault and PSA $4 billion each, eliminated a tax for building cars and also paid for the cost of temporary layoffs during the economic downturn. Sarkozy says no other country helps its auto industry so much, but over the last several years those companies are importing more cars into France than ever before.

Mercedes-Benz Financial announced that it will distribute Apple iPads to all of its dealers in the U.S. Unlike Hyundai which is giving them to Equus customers instead of a traditional owner’s manual, Mercedes will use the iPads to help sell its cars. The device gives dealers access to its proprietary dealer point-of-sale system called MB Advantage. The company tested the system at 40 dealers earlier in the year and found that the iPads increased mobility and efficiency during the sales process.

Is BMW forsaking everything it stands for? If a report on Autoblog is true, that may be the case. Apparently the company thinks Americans want small luxury vehicles and has confirmed that it plans to introduce a line-up of compact, FRONT-WHEEL-DRIVE cars that will be positioned below the 1 Series. Heresy I say, HERESY! The vehicles – yes that’s plural, meaning there will be more than one – are even getting four-cylinder engines. They’ll be sold under a new class called UKL. The models are expected to debut sometime before 2013. Worldwide, the company is looking to sell around 100,000 UKL vehicles per year. You know, BMW has always been called the “Ultimate Driving Machine.” But I have to wonder if it can do that with front-wheel drive. I thought that’s why they created Mini.

Ford is cooking-up an extra-special Mustang for the 2014 model year, which is the 50th anniversary of the pony car. I had a chat with J Mays, the company’s Group VP of Design and its Chief Creative Officer at the Paris Motor Show last week and he told me he really wants to improve the Mustang’s interior. He also said this is what it will take to get the car viable in Europe. No, it won’t be a huge seller in the old world, but it seems Ford is at least thinking of offering it in Europe. We’ll have an interview with J Mays on Autoline Detroit in a couple weeks.

Last week I got a chance to visit Fiat’s research labs in Turin, Italy. And that also gave me the chance to visit the city of Turin, or Torino as it’s called in Italy. I found it to be a charming place, and I’ll show you what I’m talking about, right after this.

When most tourists visit Italy, they usually go to Rome, Venice, Florence or other places in the country. Not a whole lot of tourists visit Turin. Two years ago the city hosted the winter Olympics, because the city is literally at the foothills of the Alps. And while that helped put a spotlight on the city, it’s still not on most tourists’ itineraries. Last week I got a chance to visit the city while on a trip to Fiat, and here’s my impression of what the place is like.

Turin is a city that’s usually referred to as the Detroit of Italy. That’s because Turin, or Torino as the residents call it, is the home to Fiat. But Torino doesn’t look anything like Detroit. Located in northern Italy, it’s almost completely surrounded by mountains.

Every Sunday evening they close-down the streets to traffic in the center of the city, and people come out to go window shopping, stroll around the beautiful plazas, listen to street musicians, and to pass the time people watching.

There are people of all different ages and all different income groups. It’s a great way of creating a real sense of community, a true sense of belonging.

Even though Torino is often described as a gritty city, it’s actually quite beautiful, with architectural masterpieces, incredibly beautiful bas reliefs, intricate carvings, plenty of statues, and cobblestone streets.

All different kinds of street performers show up, hoping to make a few extra euros. They’ve got everything from mimes, to balloon vendors, to fire jugglers. You can’t help but come away from this scene with a nice, warm feeling. While most tourists head for Rome, Venice, or Florence they’re missing out on one of the nicest cities in Italy. If you ever get the chance to go, don’t miss out on taking-in Torino, and make sure you’re there on a Sunday evening.

Cool place. I’d go back anytime I get the chance.

Hey don’t forget to join us for Autoline After Hours, the best insider-discussion of what’s going on in the industry. Our guest this Thursday night will be Warren Harris, the CEO of Tata Technologies. We’ll be talking about the super-low-cost Tata Nano, and other topics, so join us live, starting at 7:00 p.m. Eastern Time on Autoline After Hours.

And that’s it for today’s top news in the global automotive industry, thanks for watching, we’ll see you tomorrow.

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38 Comments to “Episode 492 – Allstate Sues Toyota, BMW Goes FWD, 50th-Anniversary Mustang”

  1. michael shipley Says:

    Hey! That street performer in white ! Was that Peter D?

    Mike Shipley

  2. Dale Leonard,Lakewood Ohio Says:

    Hey John,It’s interesting how that “Mime” in Turin resembled Peter DeLorenzo. Are you sure he didn’t hitch a ride in your suitcase?????

  3. Tony Gray Says:

    Arg! Could this be my beloved BMW’s “Jump the Shark” moment? Keep FWD with mini you knuckleheads!

    And Turin? I’d rather hit Maranello!!

  4. Kit Gerhart Says:

    I’m a little surprised that BMW is planning to build FWD cars bigger than those on the MINI platform, bet I’ll bet that they stay away from V-6 engines.

    I remember an article in Motor Trend a few years ago which had a flowery quote from a BMW engineer as to why they use in-line six cylinder engines. The quote could have been interpreted as something like, “By using band-aids like balance shafts and splayed crank pins, they can be made to work well enough, but V-6 engines basically suck, and BMW isn’t interested in building them.”

  5. pedro fernandez Says:

    BMW: I don’t know if V6 engines really suck, but I can tell you that FWD does SUCK big time. I really hate the technology, but we’ve been railroaded into accepting this crap for decades now. My dearly departed 86 Camry had about 80% of all its repairs due to the FWD system. Otherwise it would have been near flawless during its 12 yrs with me.

  6. Chuck Grenci Says:

    While Ford is still 3 years from the Mustang’s 50th, I’m more interest in what Chevy has in store for Corvette’s 60th (in 2013).

  7. Salvador G. Says:

    I remember a report that came out a while ago, which said that most BMW M1 owners didn’t know or couldn’t tell that their car was rear wheel drive… My guess now is that BMW simple came to the conclusion that -If people can’t tell the difference, why waste the money on building RWD cars.

    AHhh! La Dulce Vita Johnny, La Dulce Vita.
    Te’ Fortunato Bastardo!

  8. dcars Says:

    The problem with a country like China owning private industry is being played out in front of us. Politics regarding disputed Islands, rare earth metals and monetary policy all rolled into one. China is flexing is its muscles.

  9. pedro fernandez Says:

    Sal, I think the 1 series is a chick car for the most part and chicks couldn’t care less about the power train, only that they have room to carry their BFF’s. If BMW goes that way that would leave Merc with the only remaining all RWD line up, ps it does not make any sense to buy the 1 at the current price.

  10. LEX Says:

    Way to Go Allstate! The Legal Eagles at Allstate must have been sitting around the board room table think about what Pigeon they could de-feather now. Yes, I agree with you John. The majority of the Toyota Sudden Acceleration cases were due to driver error. However, Toyota should have added those few lines of Computer Code to their vehicles when it only would have cost them a few dollars per vehicle for the brake to over-ride the gas.

    I bet Toyota will settle with Allstate out of court to make this issue go away. If not this could escalate into brawl between Toyota any or all insurance companies which covered the damaged toyota’s and second or third parties injuried by these vehicles.

    I hope The CEO of Toyota and his senior management have brushed up on this english speaking skills. They will need it if Allstate does not get it’s pound of flesh.

  11. dcars Says:

    I think I also saw David Welch juggling!
    On my visit to Europe I was amazed by how well they have maintained their cities, even the industrial ones. It would be nice if the US did the same.

  12. HtG Says:

    Here I go again, but do you ever wonder how many BMW drivers could actually handle a rear wheel drive car without the driver aids? We had them back in the 80s, and they were a handful. It’s all computer controlled now anyway, BMW sells to a moneyed demo, and there’s no need to get all ‘wee wee’d up’ anymore.

  13. M Campbell Says:

    Nicely done on the Japan v. China graphic around John’s noggin!

  14. tj Martin Says:

    Oh dear . The FWD BMW has been in the news now going on six months overseas so how is it its only now arriving here ? Even the NYTimes has had a couple of stories on the upcoming FWD BMW . And you’re right Salvador G only it was all BMW owners that were surveyed and the majority had no clue whether their BMW was FWD or RWD, Which says more about the customer that buys a new Beemer these days than anything . Its all about the Status and to Hell with what it is or what it can do . Label first . Substance ……. dead last .

  15. HtG Says:

    tjM, was it really a survey of all BMW owners? I thought it was just the 1 series people.

    Kick me hard, but I think a car is a Bimmer and a bike is the Beemer.

  16. pedro fernandez Says:

    Somehow I don’t see Italians defacing their cities with graffiti or turning their neighborhoods into drug infested slums, I think there’s a lot of pride left in them.

  17. pedro fernandez Says:

    The rule should be for all cars: rear wheels provide the power, front wheels do the steering, period.

  18. GB Says:

    50th Anyversary Mustang and sales in Europe. Is this what it takes to have Ford re-do the interior? What about all the millions of Mustang customers and ethusiasts that have been supporting that model in the US for years? Don’t we deserve a good and confortable interior? The Mustang must have the worst seats in the market. Please re-do the seats or at least offer a Recaro option.

  19. Kit Gerhart Says:

    pedro fernandez Says:
    October 5th, 2010 at 12:49 pm

    “BMW: I don’t know if V6 engines really suck, but I can tell you that FWD does SUCK big time.”

    I suspect the BMW guy I referred to was a purist who didn’t like the idea of “extra tricks” that are needed to make a V-6 run smoothly, while an inline 6 is inherently smooth.

    While FWD doesn’t make sense for large, high-powered cars, it has several real advantages over RWD, especially in smaller cars. Packaging efficiency is better. Traction is better on slick surfaces. Handling is more “benign” when the car is driven to the limits of traction by someone not experienced with “high performance” driving, which means most of the drivers on the road. Also, FWD power trains have less power loss than RWD, but the difference is small.

  20. Ivan Sears Says:

    John, what is the big deal? BMW already builds a small front wheel drive car – called the Mini. So, now that they are going to go up size a smidge, everyone is freaking out? No way! Overall packaging of a vehicle simply works out better with Front Wheel Drive. And maybe, just maybe, BMW can get the superlative handling and feel down just right in this new vehicle as well.

  21. tj Martin Says:

    HtG ; There was a 1 series and an all BMW survey . The all BMW survey wasn’t as bad as the 1 Series but it still showed far too many BMW owners haven’t got a clue which end is driven .

    On the Bimmer Beemer issue you might just be correct . Anyone else care to clarify / comment ? I’m in the dark on this one . Maybe I’m spending too much time hanging out with the Brits on a UK site to the point of adapting too much of their lingo .

    So if HtG has it right let me/us know .

    @Pedro Fernandez – Oh how I wish your description of a Graffiti Free Italy was correct . Unfortunately if you go , there’s graffiti around every corner . In Rome , Milan etc. Sometimes even on the ancient sites . Graffiti is a sad and worldwide epidemic that for me at least can’t end too soon .

  22. Kit Gerhart Says:

    ” BMW can get the superlative handling and feel down just right in this new vehicle as well.”

    BMW did a good job with handling on the Mini. I have a “base” Mini, and it is a great handlng car. There’s no reason to think they can’t do a good job with a larger front driver.

    I learned the Beemer/Bimmer thing about 30 years ago when I had my first 2-wheeled BMW. It was a Beemer and the cars were Bimmers. I don’t know if this is just North American terminology, or if it holds true in the UK and other English-speaking countries.

  23. Bob Zigmanth Says:

    Maybe we should call a fwd BMW a “Bummer.”

  24. tj Martin Says:

    Kit Gerhart ;

    Well I’ve been berated for saying this , but since I own a MINI ( maybe a few more add ons like the Sport Package and Sport Suspension but other than that pretty basic as well ) and have driven E30 M3′s extensively I guess I’m qualified to say this . The closest comparison I have when describing the MINI’s handling to fellow gearheads is its a 21st century FWD E30 M3

    FYI Kit . Just took another longish road trip with the wife in the MINI . Just never fails to amaze me the way the car hunkers down at 75mph and above and how smooth for such a short wheel base car it is . We’re loving it as our main road trip car , letting the wifes Matriz stay home .

    Highly recommended . And thanks for the Bimmer/Beemer Clarification . The Brits seem to use both interchangeably . But I’ll be more Yank Correct from here on .

  25. HyundaiSmoke Says:

    Japan asks former colonial subjects that have now outgrown them in strength and economic power, (while many of these former colonial subjects still have a grudge and a vendetta against their former masters) for a resource that is very needed?

    Boy, have they become slaves to the lack of new Japanese hybrid tech development.

  26. pedro fernandez Says:

    Smoke, former colonization has nothing to do with China’s attitude, it’s the commie way baby and it’s only a matter of time when they will be the colonists and we will be helpless to do anything about it because they will overwhelm us with their numbers and weaponry. I know I’m a pessimist, but also a realist.

  27. pedro fernandez Says:

    ps they will also provide for North Korea to simply head south and take over just like the Vietcong did back when, remember that.

  28. Tom Martin Says:

    Even though the press has raved about the 2010-2011 Mustang interior, I agree that it’s still not there.

    It looks and feels cheap to me.

    I do like the steering wheel that comes with the Premium edition, however.

  29. dcars Says:

    Japan and China have battled each other for hundreds of years; sadly, Korea was always their battle ground.

  30. dcars Says:

    China’s cities have been choked with recently bought cars. Pollution is a major issue. Their mass transit system is more than adequate to handle their city’s transit needs, yet they keep buying cars at their governments insistence. Sooner or later these folks are going to wake up to a tragic planning mistake.

  31. Nick Stevens Says:

    As a very satisfied BMW 740iL owner (98, with more than 133k very satisfying miles, I am not a purist re RWD-FWD.

    Many here correctly pointed at the FWD MINI’s excellent handling.

    I also add my combined 34 years (!!!) experience with my 91 CIVIC and 90 Accord (the Acc. donated to charity in 2008), they handled EXCELLENTLY. There are FWD cars that handle like barges or have very unsatisfying, inaccurate, too much steering (Buicks and Toyota Avalons and even some Camrys and Corollas),but NOT my Hondas!

    Further, just forget RWD small cars, unless you are willing to pay a much higher price, the times of the VW bug have changed. So this dog will not run.

    If BMW and MErc want to expand to smaller sizes (volume and weight wise) they need to use FWD to keep the prices reasonable.

  32. Andrew Charles Says:

    Packaging of the smallest cars seems to work better with fwd, or at least it did before safety regulations required 4″ of space between the sheetmetal and engine. The efficiency difference is now negligible and seems to even favor rwd. I know a lot of people still dispute that, but in real life the results favor the longitudinal engine layout. I’ve checked, and I’ve re-checked and in practice a modern rwd system is better for efficiency. So why is BMW going to add fwd models? It needs cheaper, high volume, high efficiency models to balance its high output performance cars and meet CAFE and European CO2 limits, and fwd cars are according to BMW, “cheaper”. So there you have it. Fwd is here because BMW want’s to build a cheaper, smaller car than the 1 series, and it can only build one “cheaper” if it goes fwd. There have been plenty of sporty rwd models smaller than these proposed BMWs (BMW and Alfa have built plenty themselves). GM builds a million or so every year in China getting as much as 46 mpg, and the Japanese still build the odd rwd Keijidosha microcar with 660 cc engines, but of course these models though cheaper than almost any other cars, lack the refinement that BMW wants to build into it’s small BMWs.

  33. Kit Gerhart Says:

    “The efficiency difference is now negligible and seems to even favor rwd.”

    How so? The smallest RWD car with a back seat sold in the US is the BMW 1 Series. It is 6 inches longer that a Golf/GTi, but the VW’s have more of any type of cabin space you can measure. If you want to go back to the time there were RWD economboxes, compare a Chevette to an OmniRizon. There is no comparison. The OmniRizon has much more room, and especially a lot more front seat foot space.

  34. G.A.Branigan Says:

    @ Pedro: It wasn’t the VietCong who came down from the north to complete the takeover of VietNam,it was the NVA.They were highly trained,highly motivated,and extremely well equiped to do the job.I know this because I spent two years there,the last being up on the “Z”.

  35. pedro fernandez Says:

    G.A. must have been really tough to let watch these bastards just march in after so many died in vain and these commie pricks had their way after all, wasn’t the problem also that you really could not tell if they were vietcong or the regulars from the north?

  36. pedro fernandez Says:

    On the RWD vs FWD issue, the FWD is indeed cheaper to manufacture but it also adds more to the cost of maintaining these cars and keeping them running, all these CV joints, axles plus the expense of replacing strut assemblies just passed the extra cost to the consumer.

  37. Kit Gerhart Says:

    Are FWD cars really cheaper to manfacture with all those CV joints, etc., or are we comparing apples and oranges? There aren’t any “basic” RWD cars in the US market that can even be compared with, say, Corolla and Civic, or Golf.

  38. Andrew Charles Says:

    Comparing the Goolf v 1 series in the Us is a bit tricky, since you can’t make the same kind of direct comparison, engine v. engine etc. Compare a Golf Variant v. a BMW X1 though, and for a 2.0 diesel with similar power and transmission, the rwd BMW is more efficient than the fwd VW. Of course the BMW is not only rwd, but a rwd with optional straight 6, something no-one else would try even in a large car these days. That does take up a bit of room.