Episode 647 – Vehicle Letter Grade Idea Dropped, Car Sales Fall in May, TRW’s Roof Airbag

May 20th, 2011 at 11:45am

Runtime 8:13

The Obama Administration has dropped its idea of handing out letter grades to vehicles based on their fuel economy. J.D. Power says that car sales in May will drop. It forecasts the SAAR at just 11.9 million units which was previously at 13 million units. Auto supplier TRW just introduced an airbag that’s installed in the roof which replaces the passenger airbag mounted in the instrument panel. All that and more, plus a preview of Autoline Detroit with Paul Mascarenas, the Chief Technology Officer of the Ford Motor Company.

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This is Autoline Daily for May 20, 2011. And now, the news.

VEHICLE LETTER GRADE IDEA DROPPED (subscription required)
The auto industry dodged a bullet as the Obama Administration dropped the idea of handing out letter grades to vehicles based on their fuel economy. The idea was to make it like a report card, but a vehicle would only get an “A” if it was a hybrid or electric car. The Wall Street Journal reports that the Administration concluded that handing out letter grades was “very subjective.” Here’s my interpretation. That means there was no fair and impartial way of awarding grades. Let me give you an example. Let’s say you have a young family and need a minivan. It would have likely only earned a “C,” under the government proposal, even if it was the most efficient minivan available.  And even though on a people-per-mile-per-gallon basis, it would be more efficient than most hybrids. Thank goodness the Administration dropped this idea. People don’t need the government to tell them if the fuel economy of a vehicle is good or not. They just need to read the label.

CHRYSLER BORROWING TO PAY OFF LOANS
Chrysler is raising enough money to pay off its loans to the U.S. and Canadian governments. Those loans came with sky-high interest rates, 14 percent in the U.S., 20 percent in Canada. To pay them off, Chrysler is borrowing money at lower rates from commercial loaners, and it is issuing bonds. But as Bloomberg points out, bond investors haven’t forgotten that they lost everything they invested in the company before its bankruptcy. So they are demanding an 8.25 percent yield on the new bonds. That’s a lot lower than what Chrysler is paying now, but Ford’s latest bonds only pay 5 percent. Even so, it could save Chrysler a couple of hundred million dollars a year in interest payments.

CAR SALES DROP IN MAY
New-vehicle sales in the U.S. have been accelerating all year, but according to J.D. Power, they may be losing steam in May. So far this month the forecasting firm estimates the SAAR at just 11.9 million units! This is a dramatic drop from the previous three months where it hit 13 million. We know fuel prices are up which is certainly playing a role in this, plus some models have limited availability due to parts shortages from Japan. But one analyst at Edmunds.com thinks a lack of incentives is causing the drop. He said aside from the Toyota Prius, there are NO other models that are unavailable right now.

TRW’s ROOF AIRBAG
Oh no, not another airbag! Auto supplier TRW just introduced an airbag that’s installed in the roof. But don’t worry, it actually replaces the passenger airbag that is mounted in the instrument panel. This new system allows for improved interior design flexibility because the dashboard doesn’t need to be developed to deploy an airbag and that also helps to save cost. TRW says it can be used in different types of vehicles and that it already has a production contract with a European automaker, but didn’t say which one.

NISSAN & CUMMINS DEVELOP DIESEL FOR TITAN
Truck lovers rejoice! Your wildest dreams may be coming true. According to PickupTrucks.com, Nissan and Cummins have teamed up to develop a four-cylinder diesel engine for the Titan. Now get this: the average fuel economy target is 28 miles per gallon while meeting the Tier 2, Bin 2 emissions standard. WOW! The engine displaces 2.8 liters and output could be 220 horsepower with 380 pound-feet of torque. One interesting feature: it uses steel pistons instead of aluminum, to handle high cylinder pressures and allow for a shorter stroke, which keeps the physical size of the engine down. The U.S. Department of Energy contributed some $15 million to help fund this $30 million project. It’s scheduled to run through September of 2014 when the next-generation Titan is expected to debut.

ZHONGXING HAPPY REBELS USE ITS TRUCK
Speaking of pickup trucks . . . After civil war broke out in Libya, Chinese automaker Zhongxing Auto was worried about how it would affect selling pickup trucks in the country. It sells more pickup trucks there than anyone else. But now the company is almost thrilled about the conflict. According to China Auto Web, Libyan rebels are using Zhongxing’s GrandTiger pickup truck to fight Muamar Ghadaffi’s forces. The company is amazed to see all the exposure the pickup truck is getting from images beamed all over the world. It hopes the GrandTiger pickup truck will be seen as one tough pickup truck. The company even posted a message on its website essentially bragging that its pickup trucks are battle tested. And it boasts that instead of the ubiquitous Toyota Hilux, and I quote, “the pickups employed in the Libyan war mostly came from Zhongxing.” It’s crazy. Seventy years ago there were Tiger tanks rolling across the Libyan desert. Now, there’s GrandTiger pickup trucks.

Ford came under a lot of criticism for its My Ford Touch system. Consumer Reports really tore into it. So what’s Ford doing about it? That’s up next.

THIS WEEK ON AUTOLINE
Paul Mascarenas is the Chief Technology Officer of the Ford Motor Company. That puts him in charge of all R&D and the company’s science labs. He’s my guest on Autoline Detroit this weekend, and in the following clip we asked him what the company is doing about its My Ford Touch system that has been heavily criticized.

You can see that entire interview right now on our website, AutolineDetroit.tv.  And by the way, Mark Phelan from the Detroit Free Press and Lindsay Brooke from Automotive Engineering magazine are also on the show.

And don’t forget to check out RoundAbout . . . tonight! The show starts at 6:30 p.m. Eastern Time, 3:30 Pacific. As always, it’s a fun way to start the weekend and we hope you check it out.

And that’s today’s report on the top news in the global automotive industry. Thanks for watching, we’ll see you Monday.

Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog and WardsAuto.com

39 Comments to “Episode 647 – Vehicle Letter Grade Idea Dropped, Car Sales Fall in May, TRW’s Roof Airbag”

  1. Cozy Coles Says:

    John, you are bashing the cafe rules, and displaying a chart on usage, but did you take into consideration all the extra drivers and cars since 1980 on our roads? we got to be using more gasoline than 1980. thanks bdc

  2. Army Ed Says:

    John,

    That Nissan with the diesel engine couldn’t come quick enough for us diesel pickup truck fans, just sad that with all the diesel engine experience our Big Three have that we have to wait for Nissan to come out with this great combination. Wake up Big Three, we want a light duty diesel pickup truck now, stop playing with yourselves and get it done! Cowards!

  3. pedro fernandez Says:

    Feel bad for G.A. finally a diesel pickup truck that he may want to buy and wouldn’t you know it, they announced the end of the world tomorrow, oh, well, maybe in your next life.

  4. pedro fernandez Says:

    The National Collision repair counsel just announced their support for more navigation and I-Touch type distractions in new cars, they’re very happy with the increased volume of business involving rear-end collisions.

  5. Phoenix Mark Says:

    What worries me is when I am ready to buy another vechicle, I won’t be able to buy one without a touch screen interface. Oh maybe, if I buy the one without carpet.

  6. Chuck Grenci Says:

    Low SAAR; it’s still the economy. The sales rebound, since the ‘great recession’, is from pent up demand and people who ‘have’ gotten back on their feet; there are still a lot of folk who used to buy new that haven’t and can’t yet.

  7. h Says:

    One wonders if those lost new car sales are showing up in the used car lot, or if people are buying their leases. Maybe it’s not just constrained supply of used cars that’s pushing up the prices.

  8. HtG Says:

    One wonders if those lost new car sales are showing up in the used car lot, or if people are buying their leases. Maybe it’s not just constrained supply of used cars that’s pushing up the prices.

  9. tj Martin Says:

    Gas Prices ;

    The Associated Press today is reporting that the Current Gas Prices are placing Four out of every Ten Households in the US in

    Financial Difficulty .

    Four out of every Ten

    So what do you say ? Lets revisit Raising Gas Taxes to lower fuel consumption .

    I mean …. what the heck ! We’ve still got Six out of Ten to play with before placing the entire Country into Dire Straights

  10. tj Martin Says:

    Also today the NYtimes is reporting on the potential of a Used Car Bubble which may be a vision of things to come .

    Bubbles ? In the US of A ?

    Never happen !

    Wait and see.

  11. HtG Says:

    tj, I also wonder if people have less room on their credit cards to pay for gas. In ’08 there was much more available credit, but since then banks have reigned in the proles. For their own good, you know.

  12. tj Martin Says:

    But I am getting a kick out of the Chrysler news ;

    Brother can you Spare a Dime

    ” Hey can you loan me $10 million ? So I can pay off a loan . While I’m borrowing another $10 million . To pay off another loan . But wait ! Can you loan me another $30 million ? To pay off yours and the other loans ? While I’m taking out another loan for $10 million . So’s the company can keep running for another two months . Can you ? ”

    For those old enough , Isn’t this beginning to sound an awful lot like Wimpy in the old Popeye Cartoons

    And Yes … I understand the lower interest rates etc : but looking at this you have to admit its beginning to look like another Never Ending Story : about to become an Unfortunate Series of Events .

  13. tj Martin Says:

    @ HtG

    I’d agree on limiting Credit . And perhaps that is playing a part in the dilemma .

    But the main point is 4 out of every 10 folks cannot afford to buy gas …. which means not being able to get to work ….. etc

  14. tj Martin Says:

    @ pedro

    “Its the End of the World as we Know It ….. And I feel fine ”

    But seriously … G.A. has nothing to worry about .

    So …. maybe a brand spankin new truck is in the hopper for our Mr Branigan ? Here’s hoping .

  15. HtG Says:

    @14, I think in the past it was easier to put the price spike on the credit card.

    Check it, shoppers.

    A family member got an offer to trade in their Nissan Versa at 110% of NADA for any in stock Nissan. NADA lists the car at 11,825, so that’s about 13000. The car is a 08 with 15K. If I recall, we paid about 14-15 for the new car at the end of 07.

    Last week it was Honda offering.

  16. tj Martin Says:

    Mission Impossible

    (sub-titled ; Tj buys a car )

    Here is the mission should we accept it ;

    Saturday Tj and Mrs Tj are to visit both the Volvo and the Infiniti dealerships and have a look at the XC60 , V50 and the EX35. No decisions are to be made , but all three cars must be observed and /or test driven thoroughly .

    Please be advised that should they get caught , the Government will disavow any knowledge of their presence or their actions , as well as any relationship they may or may not have to this Forum .

    This message will self destruct in 30 seconds …. or not !

  17. HtG Says:

    you’ll have an eye in the sky, brother

  18. tj Martin Says:

    HtG;

    The BMW/MINI just dealer bumped up his offer for the MINI ( against the trade for the 2010 X3 ) another $1000 .

    Amazingly while leaving the price of the X3 the same . Hmmn .

  19. HtG Says:

    tj, you have an in demand used car and cash. You are the belle of the ball. For now.

  20. Phoenix Mark Says:

    @tj,

    I still think it is a good idea to raise taxes on gas and diesel. I am willing to talk timing. Maybe when the Fed starts to raise interest rates.

  21. tj Martin Says:

    @ HtG

    What’s really funny is that last Fall , it felt like being a cash buyer was tantamount to having the plague in most dealers eyes

  22. tj Martin Says:

    @ Phoenix Mark

    Or maybe when this Economy has actually , rather than Virtually Recovered .

    Remember my friend the millions still out of work as well as that 2.7 million homes about to come onto the market via repossession .

    We’re not even close to Recovery . Granted , things have gotten a bit stable . But far from recovery .

  23. HtG Says:

    why was cash bad? You think they wanted the financing profits more? Who turns away cash? (Well ok, if the guys are 17 and packing heat and fancy sneakers)

  24. HtG Says:

    this does feel like the point of maximum pain for the dealers, tj. You may want to strike.

  25. HtG Says:

    the seats in the Volvo XC are the best, imho. And the accident prevention tech was really cool when I tried it. If only all cars had this, because some people are just too busy.

  26. HyundaiSmoke Says:

    Ok……., yeah sure the economy is recovering.

    If that’s true, then I have a bridge to sell you on Mars.

    You fu-king People are so brainwashed.

    WE’RE NOT BUYING IT CORPORATE MEDIA!!!

    They are only trying to keep people calmed down from Rioting with overinflated “Positive” economic news. I know people out of work for more than 3 years now. THIS IS AMERICA, PEOPLE CANT GO WITHOUT WORK FOR 3 YEARS WITHOUT TROUBLE. WE DONT HAVE THE GENEROUS SOCIAL BENEFITS THE EUROS HAVE.

    Then again this is being done on purpose, and soon you will see.

  27. HtG Says:

    fap, nap, then yap, HotStuff

  28. pedro fernandez Says:

    Again I’m in agreement with Smokey re the so-called economic recovery, it’s all BS it is the left wing media trying to make the Obama administration look good. But the mood of most everyone I meet is pretty gloomy.

  29. pedro fernandez Says:

    While the crap is hitting the fan, they’re trying to divert our attention with unimportant things like Arnold, the Botox Mom and other trivial crap!!

  30. pedro fernandez Says:

    Tj did you take this long to pick a wife?

  31. tj Martin Says:

    TJ is Gone like a Train !

    Said I would and I meant it .

    Toodles all

  32. HyundaiSmoke Says:

    The Government is scared- VERY SCARED.

    THEY SHOULD BE BECAUSE YOU CANT BEAT 200 MILLION OF US.

    DHS and their IT Teams have been hard at work trying to take down controversial websites, videos, and articles.

    They tried to nuke my site for my controversial articles about the “Anti Car Police State.”

    IT’S JUST A POWER GRAB. THE GOVERNMENT AND CORPORATIONS ARE WORKING TOGETHER TO PURPOSELY RIG THE ECONOMY NOT TO SUCCEED SO THE PEOPLE CAN RIOT/PROTEST AND THEY WOULD HAVE AN EXCUSE TO PULL AN “EGYPTIAN LIBERTY GRAB.”

    People in Egypt today have less rights than Before the Rioting- WHICH IS MAKING THEM RIOT AGAIN AS WE SPEAK. The same will happen here too.

    It’s too late to try to censor anything, they have the law which looks like will pass to do a MASS INTERNET KILL IF THEY NEED TO.

    I cant believe you guys still trust your politicians. The Very same Politicians who were Bitching about Egypt Shutting down their Internet, hours later were trying to lobby other lawmakers to get such legislation to occur here.

    Look this stuff up, and think for yourselves people.

  33. HtG Says:

    I’m sorry that’s the case, tj

  34. HyundaiSmoke Says:

    And look it up while you still can. Like I said, they are hard at work.

    This whole 5/21/11 thing really pisses me off, because it makes certain persecuted groups of people look bad. The guy who started it by the way was an Athieist.

    It’s all a scam to get people to say “See Christianity is nothing but Bullshit.”

  35. pedro fernandez Says:

    C’mon Tj, I came back even after the personal attacks against me, just do as I do just ignore his rants and read the others.

  36. HtG Says:

    @30 was too far, I thought

  37. HyundaiSmoke Says:

    About the Letter Grade, why are we trying to copy off of China? Let China do their own thing, and we do ours.

    Please stop the Lettering.

    Please stop the ever increasing stringent standards that push automakers to just to comply with the standards, as opposed to actually doing something to solve people’s transportation problems.

    MPG is a problem for most people. 30-40 MPG cars were great when gas was $2.15, but now they are virtually pointless.

    People were crying about $2.75 Gas to fill their 20 MPG Expeditions. People will cry about $5.50 Gas to fill their 40 MPG Accents.

    I’m working on a chart that shows Miles Per Gas Dollar Value. Many people in the car biz wont be happy, but the goal is change.

  38. Jesse W. Henry Says:

    The Nissan Titan diesel sounds great, now the real question is what will the price be? If they can’t keep it under 40 grand pretty loaded up it will be a tough sell I think. This is America after all and if you are only 6 or 7 thousand short of the price of a three quarter ton diesel lots of people will look there.

  39. cwolf Says:

    tj: just gambling that your curiosity would make you return. So I want to here about your test drives today and wich one the two of you decided upon. Must say the H/S has sver-stepped the boundaries of this forum, yet I simply scroll past them.