January 18th, 2011 at 12:00pm
The last few years have been tough on OEMs, but the Center for Automotive Research predicts sales will improve significantly in 2011. Toyota halted production in Japan, but not for any of the reasons you might think. Ford is rumored to be developing a front-wheel-drive replacement for the Falcon it sells in Australia. All that and more, plus guest host Murray Feldman from Fox 2 News, Detroit, shares some of his thoughts on a potential problem the Big Three face going forward as the price of oil climbs.
This is Autoline Daily for Tuesday, January 18, 2011. It’s hard to believe, but we’re already in our third week of the New Year. Murray Feldman here from Fox 2 News, Detroit. McElroy’s flown the coop again; he’s out of town driving some hot new cars. Lucky guy. We look forward to his reports, but in the meantime here’s what’s going on in the automotive world.
BACK FROM THE BRINK
The last few years have been some of the toughest the auto industry has ever faced. Plants closed, jobs were cut and GM and Chrysler went bankrupt. Thankfully things got better in 2010, with year-over-year sales increasing 11 percent, and this year is looking even better. According to CAR – that’s the Center for Automotive Research – sales are expected to improve some 12 to 14 percent in 2011 compared to last year. They attribute the expected growth to the availability of credit, which is making it easier for people to get into new vehicles and the average age of cars on the road today, which is more than 10 years old. According to The Detroit News, CAR also predicts that Michigan – the heart of the U.S. automotive industry – will increase its manufacturing employment this year by 23,000 jobs. Good news for all of us. Hopefully we’re finally putting the Great Recession in the rear-view mirror.
MAKING DUIs DOA
Automotive supplier Takata and TruTouch Technologies, a company that makes alcohol-testing systems, have teamed up to develop a non-invasive alcohol detection system for cars. TruTouch Technologies already has a system that can measure how drunk a person is by analyzing light reflected from their skin. The two companies will work to integrate this into a vehicle to make sure someone who’s drunk can’t drive. The partnership is part of a project by the National Highway Traffic Safety Administration to adopt technologies that will prevent drunk driving. According to the World Health Organization, 576,000 people die each year due to alcohol-related crashes.
TOYOTA STOPS PRODUCTION IN JAPAN
Last week we reported that Toyota is looking to move production out of Japan because the strength of the Yen is making it more costly to build there, but yesterday the company was forced to halt production in the country because of snow. According to the AP, the company stopped production at 12 factories because heavy snow caused traffic jams and delayed the delivery of car parts. Toyota says production will resume today and that workers will have to make up time for the missed production.
FRONT-WHEEL-DRIVE FALCON? (subscription required)
More and more automakers are surrendering to the call . . . of front-wheel drive . . . as fuel economy and emissions regulations clamp down. Australia has become a bastion for performance enthusiasts, as V-8-powered, rear-wheel-drive cars like the Holden Commodore are still offered. But even down-under that way of life is threatened. Ward’s reports that J Mays, Ford’s global design chief, strongly hinted at the Detroit Auto Show that the rear-wheel-drive Falcon’s days are numbered. It’s rumored the Blue Oval is leaning toward a front- or all-wheel-drive replacement for the car sometime after 2015. A company spokesman says design and engineering proposals are currently being considered but that no plans have been approved. Either way, this should send a chill down every enthusiast’s spine.
SCIROCCO HEADED BACK TO U.S.?
In other product news, Jonathan Browning, the head of Volkswagen’s U.S. operations, wants to bring the Scirocco back to the ‘States. The sporty hatchback hasn’t been offered here since the early ‘90s. According to USA Today, Browning said they weren’t able to make it work for this product cycle, but that he’d love to sell it here in the future. Is there a market for a sporty hatch like this in North America? Tell us what you think.
Coming up next, the Detroit Three have just righted the ship and things are really looking up, but are they on a collision course with another iceberg? Find out what I’m talking about right after this.
STORM CLOUDS ON THE HORIZON
Automakers are now rushing out more fuel-efficient vehicles. By latest count the Alliance of Auto Manufacturers notes there are 160 different vehicles out there that get more than 30 miles per gallon, and more are on the way.
However, many car makers – including the Big Three – are still heavy into larger vehicles. As noted here on Autoline Daily, those large vehicles are among the ones that really sell. People like the size, and the features, and the car makers like the larger profits that come from these big sizes. But with the price of gasoline over three bucks a gallon, heading to four or five bucks a gallon depending on which analyst you hear. Question is, will the redefined Chrysler and General Motors, and even Ford, get boxed-in again with too many high-profit but suddenly slow-selling vehicles because the price of gasoline sky-rockets and buying habits will switch to small.
We may soon see if the new flexible manufacturing plants which enable a carmaker to turn different vehicles out on a dime really work that way, and if carmakers can quickly adapt to a change in buying habits. They said they could if this happened. We may soon see. And if they do make the switch can they keep the profits coming in – profit on a small vehicle is often 10 percent of what they make on a larger one. Time for you to look into your crystal ball. What do you think? Let us know with a comment on this page
And with that we can wrap up today’s episode of Autoline Daily. Again, I’m Murray Feldman, thanks for watching and I’ll see you next time . . . unless of course you live in Metro Detroit where you can tune in every weeknight at 5:00 p.m. Eastern time for the best local news on Fox 2. If you’re in our neck of the woods check it out – watch McElroy send me a bill for that little commercial – if not I’ll see you around here on Autoline Daily. Bye for now!