Episode 243 – Strong Yen Clobbers Japanese OEMs, Bosch Faces Loss, Toyota’s Tokyo Sneak Peek

October 6th, 2009 at 1:12pm

Runtime 7:48

The strong yen is clobbering Japanese automakers, and it has forced one big OEM to shut down a design studio. Bosch may post its first loss since World War II. Toyota gives us a sneak peek at the vehicles it’s unveiling at the Tokyo Motor Show. All that and more, plus John drives the Kia Forte and tells us whether or not Honda should be worried.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Strong yen clobbers Japanese automakers. Bosch may post its first loss in over half a century. And, Toyota gives us a sneak peek at what it will unveil at the Tokyo auto show.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Tuesday, October 6, 2009. And now, the news.

Chrysler shocked the auto industry yesterday by sacking two of its top executives. We now have more information on their replacements. Fred Diaz, 43 years old, is going to run the new Dodge Ram brand, which will only sell trucks. He previously he ran the company’s Denver region, making this a major promotion. Olivier Francois, 48, will run the Chrysler brand. He will also run the Lancia brand in Europe, and will also run worldwide marketing for the Fiat group.

The AFP says that reports out of Germany believe that Bosch could report its first loss since the end of the Second World War. It says the world’s largest automotive supplier could lose 3 billion euros, about $4.4 billion. Bosch calls this report speculative, but in an unusual move, the company recently sold its brake operations in the U.S. to Japanese supplier Akebono.

The strong yen is deeply affecting Japanese automakers. Autoblog reports that Honda is closing its European design studio located just outside Frankfurt, Germany. That studio has been in place since 1992. And the Wall Street Journal reports that both Toyota and Honda say the rise of the yen against the dollar will make it difficult for them to return to profitability. As of today, the yen stands at 89 to the dollar.

Bloomberg reports that the U.S. International Trade Commission will start a probe to see if Toyota has infringed on the patents of Paice LLC. As we’ve reported earlier, Paice is a private company that patented its hybrid system before Toyota did. It has won a civil suit against Toyota and is now trying to get the ITC to ban imports of all Toyota hybrids.

In other Toyota news, the company is gearing up for the Tokyo auto show with a number of interesting entries. The first of these is the FT-86 concept car, which Toyota says is pronounced Hachi-Roku, which means 86. Amazingly, it’s powered by a 2-liter boxer engine from Subaru. Toyota says the car’s light weight body and low center of gravity give it race-like handling.

Toyota will also officially unveil its plug-in version of the Prius. It uses a lithium ion battery pack to deliver 130 miles to the gallon, based on the Japanese driving cycle, will emit only 42 grams of CO2 per kilometer, and deliver 20 kilometers, or about 12 miles of pure EV range. The battery can be recharged in 2 hours on 100 volts, and just over an hour and a half at 200 volts.

Next up is the world premier of the FT-EV II. Toyota says this electric car is more compact than the tiny iQ, but can still hold four passengers. Note the extremely low cowl, with the extra glass below the windshield for better forward visibility. It has a top speed of 100 kilometers an hour, which is just over 60 miles an hour, and it has a driving range of 90 kilometers. That means it must have a pretty small battery pack, which could help hold down the cost.

Coming up next, a look at Kia’s handsome compact car, the Forte. But is the beauty only skin deep?

Hyundai and Kia are probably the most ambitious automakers in the business. Over the last few years these two South Korean brands have transformed themselves by building product that’s equal to or better than the competition. One of Kia’s newest offerings is the Forte sedan. Here are some of my thoughts on this stylish compact car.

The company really nailed the design and execution of the Forte. It’s sharp looking inside and out, and in typical Kia fashion it offers a lot bang for the buck. But the NVH issues were eye opening. The car really needs some more attention under the hood and probably a good six-speed automatic transmission to make it an all star.

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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31 Comments to “Episode 243 – Strong Yen Clobbers Japanese OEMs, Bosch Faces Loss, Toyota’s Tokyo Sneak Peek”

  1. Kurt Shanks Says:

    Nice Forte review — thanks!

  2. Nick Stevens Says:

    I could not agree more with John with his excellent evaluation of the cute but still lacking Kia Forte. The forte looks good on the outside, but when you drive it, the shortcomings are obvious. And the Civic does not look much worse, and is far superior overall, as John correctly said. But at $19k, the FOrte is way overpriced, esp. if equipped with that lousy 4 automatic. Unacceptable. Doesn’t Kia realize that you can’t sell a car inferior to the Civic (overall) for a price that is actually higher than most civics, and doesn’t it know that the Civic (and after it, the corolla) is the GOLD STANDARD in this segment?

  3. Jim Sachetti Says:

    Nick,

    I bet Kia knows it can’t sell this thing for 19k, but claim this is its price, and when you go buy it they will give you a nice $4,000 discount and you will feel like a really smart shopper and a great bargain.

    It is ludicrous how high car prices have gone. This is a SMALL KIA for God’s sake! KIA is the cheapest brand on sale in the US market. Cheaper than Chevy and Chrysler/Dodge and much cheaper than Ford.

    Not even a Civic or Corolla, and $19k?

  4. Nick Stevens Says:

    I just checked Kelley blue book to make sure, as I could not find the $19 k on the text of John
    ‘s newscast. and the base price of the cheapest Forte is a much more reasonable $14,200 or so. (manual tranny)

  5. Nick Stevens Says:

    However, the top of the line Forte Sedan with the auto tranny, lousy as it is, has an unbelievably high MSRP of $18,890.00, so I did not mishear John, KIA did dare to price a civic sized POS for close to $20k!!!

  6. dave Says:

    Well let me say that I bought new a 2005 sorento and with the dealer cut on price and the warr. The Sorento stiched for over 25 grand and I paid 21600 out the door nothing down and have No problems. I would buy another Kia, the big suv I have been looking at. Kia will sell that car for 16 grand and for that it is a good deal.

  7. Jim Sachetti Says:

    Dave’s last post confirmed my suspicion of a discount. Probably not $4000 for a $19k car, but based on Dave’s actual discount, as a %, more like $3k.

    “I bet .. and when you go buy it they will give you a nice $4,000 discount…”

  8. Nick Stevens Says:

    I also looked at the Forte’s specs, it should be an adequate car for a single commuter or a couple with small kids. The HP of 156 is more than adequate for a 2,700 lb car. (I remember the 1990 Accord had only 125 HP and weighed from 2822 (5-sp coupe) to less than 3,000 lbs (EX sedan auto)

    But they really should dump the primitive 4-sp auto for a 6-sp! 4-sp is not even good for a god-awful RENTAL!

  9. Alex Kajdi Says:

    John,

    You hit the nail on the head regarding the 2010 Kia Forte. It is a wonderfully styled car but the mechanics have alot to be desired. Unless you really need a vehicle you never buyt the first year of production. You wait for the manufacturer to get feedback from the real world customer and made improvements going forward. A 2.4L base engine and a 2.7L engine for the SX model both with six speed automatic transmissions would be a better combination for the North American Market.

    I still want to suggest the following: What about inviting Roger onto Autoline After Hours?Now that the deal between GM to sell Saturn to Roger Penske is in Limbo. Roger Penske was in talks with Ssangsong and Renault to build vehicles for Saturn. Did Roger ever talk with Kia or Hyundai about building vehicles for Saturn? I would especially think that Kia would love to get it’s hands on those 350 Saturn Dealerships. Kia is going through a transformation, as per your review of the 2010 Forte. The Saturn Nameplate, Dealership Network and Loyal Customer Base might be their ticket to an improved Corporate Image, Prosperity and Salvation for the Saturn Brand!

  10. Nick Stevens Says:

    I disagree, Alex.

    If Penske is as smart and successful as he is claimed to be, he should never have bothered to actually DO what you are suggesting, he already went to those who would listen to him, incl. Renault_Nissan, and they did NOT find a meaningful solution.

    But if Penske really knew what a loser Satusn is, he would never have bothered trying to use the dealers.

    Still, better late than never. Very bright people make as big, or bigger, mistakes sometimes, that very dumb people make. After all, Napoleon did invadce Russia.

    Penske was smarter, he figured out he never should have started anything with this worthless brand.

    It boggles the Mind what this idiot Roger SMITH, the creator of Saturn, what he expected from the brand, and how it has delivered NOTHING of all that expectation (to vanquish and… leapfrog the civics and corollas that were always vastly superior to any Saturn!)

  11. Kit Gerhart Says:

    It sounds like the Forte isn’t quite “there” as a serious competitior for Civic, but knowing what Hyundai/Kia have done over the last few years, I bet it won’t take long. Kia has competitive small SUV’s, and maybe the best of the smallish, funky-looking little wagons.

    Also, they seem to have a pretty good dealer network for an “upstart” car company. They have a stand-alone dealer about 20 miles closer than the nearest Saturn dealer to my Florida beach town home. They have another dealer near the Saturn dealership. I could be wrong, but I suspect they want to sell cars under their own name rather than have them re-badged as Saturns, or anything else.

    The part that I don’t understand, is why they use the Kia name at all. Why not just call all Hyundais Hyundais? I guess, for now, Kias are marketed as “lesser” Hyundais so they use both names.

  12. Dave Says:

    The main reason I picked the Kia (sorento) was a small to mid size suv with a full frame that can tow. No one else had one with the user reviews that were good at the time.

  13. C-Tech Says:

    Saturn a “loser” ? When Saturn was introduced, the quality rating was in the top 5, ahead of all other GM and Ford brands and many imports. They built a very loyal customer base. The selection of owners for their dealers and the uniform presentation was second to none. Later, GM managed to screw up the good things about Saturn, rather than take those lessons into the other GM dealers (please take note Buick exec’s as you try to compete with Lexus – it’s NOT just the car, but the presentation of the poduct!). I get what Penske was trying to do, its too bad he could not find acceptable product to fill the pipeline.

  14. Guy, Lakeland, FL Says:

    Maybe Kia forgot to tell you that the Forte also comes with a fuel efficient 2.0L engine with a 5 speed automatic that gets 36mpg hwy. Same as the Civic 1.8L w/ 5 speed auto.

  15. Brentton Says:

    I don’t want to put a kink in all the Forte talk, but does anyone have any thoughts on the FT-86? It seems awfully road ready for a concept. I think that they might put it into the NASCAR Nationwide series in 2011.http://bmfuller.wordpress.com/2009/10/07/a-prediction-of-the-pony-car-war-in-nascar/

  16. Jim Sachetti Says:

    http://www.autoextremist.com/

    Peter De Lorenzo’s take on Saturn, Penske and perhaps HYUNDAI. Comments?

    (My comment: Hyundai is on a roll now, but only a year or two ago it was in disarray. It has made mistakes before, and it may make even bigger ones again. I am not sure if it needs all these Saturn dealerships. I know Toyota actively encourages its dealers to MERGE instead of increasing their numbers, with the obvious goal to make them STRONGER, by having each dealer sell more cars and have greater profits.

  17. Jim Sachetti Says:

    “C-Tech Says:
    October 6th, 2009 at 5:02 pm

    Saturn a “loser” ? When Saturn was introduced, the quality rating was in the top 5, ahead of all other GM and Ford brands and many imports. They built a very loyal customer base.”

    What quality? Did you drive the first Saturns? In 94, I was offered to buy a top of the line coupe with the larger engine (or HP) and low miles. It SUcked big time! Very cramped and tiny, very noisy, really annoying, NO quality, NO refinement, not even close to the Civics and Accords of the time. (or Camrys for that matter)

    In addition, the owner, a collegue and onetime close friend, had the audacity to ask an arm and a leg for it, which made my decision real easy! I did not spend one more second looking at that POS.

    Saturn’s allure was the plastic no-rust panels and especially the no-haggle pricing, which is long overdue to all makers. But as a brand, it NEVER ever “leapfrogged Honda and TOyota” as this delusional and/or lying Roger Smith claimed. It did not even approach the civic, let alone leapfrog it!

  18. Jim Sachetti Says:

    # Guy, Lakeland, FL Says:
    October 6th, 2009 at 9:32 pm

    Maybe Kia forgot to tell you that the Forte also comes with a fuel efficient 2.0L engine with a 5 speed automatic that gets 36mpg hwy. Same as the Civic 1.8L w/ 5 speed auto.

    And how much does this version cost? John’s primitive 4-speed auto cost an arm and a leg for this kind of car, $19,000! Your 5-speed probably costs even more! Not long ago, one could buy an Accord coupe LX 4 for $15,000. Now you pay $20,000 and can’t even buy a civic. The $ has gone to the dawgs.

  19. Max Christensen Says:

    Go to the Kia website………..

    I did not see the 2.0 with a 5 speed auto listed – you have to go to the 2.4 to get the 5 speed automatic. And it is in the SX trim model only, which apparently is the highest trim level. Price? Base price is $18,195.

    BTW – I drove one of these exact models about a month ago when they first came out, and I was pretty highly impressed. One of my best friends has a new Civic, and the Forte I drove seemed better in almost every respect. The Civic rode like it has no springs under it at all – very hard riding – while the Forte just seemed to float!

  20. Jim Sachetti Says:

    “The Civic rode like it has no springs under it at all – very hard riding – while the Forte just seemed to float!”

    Perhaps you like Buicks? The above is not necessarily a minus for the civic. But I have owned a civic hatch since it was new in 1991 and still have low miles and it looks and drives like new, and I never noticed any such tightness.

    The Corvette is the car that comes to mind that has a very rough ride in any but autobahn-smooth as an egg surface.

  21. Jim Sachetti Says:

    Actually, since the Forte looks sporty in styling, even sportier than the Civic, perhaps Kia should FIX the suspension so it does NOT “float” all over the place, but feels tight, absolutely controllable, and goes straight like a train on rails!

    But this is secondary. They first need to replace the god-awful relic of a transmission. 4 speeds are unacceptable in the 21st century, even if they did not have the problems John Mc. ELroy encountered with it. ANd should replace with a SIX speed minimum, not a five, since the Forte is a new model and Kia must hope it will be around for a while.

  22. Kit Gerhart Says:

    There is nothing wrong with 4-speed automatic transmissions. The one in my Malibu shifts smoothly, provides good acceleration, and the car gets good gas mileage for a V-6 car its size. I agree that more speeds are “better” but the difference is minimal. Sure, you can get slightly smoother shifts by having more, and closer-spaced ratios. In some cases, the extra gears are used to get a slightly taller top gear. There are slight benefits in both cases, but Toyota still uses 4-speed autos in several of their cars, but I don’t hear them called “god-awful relics.”

  23. Max Christensen Says:

    Perhaps saying the Forte “floated” was a poor choice of words. It was extremely tight and went exactly where it was pointed. My friends Civic on the other hand just feels like when you hit a bump or pothole, there is nothing there to cushion it, while the Forte soaked up the bump much better.

    And I too don’t view 4-speed autos as “god awful relics”. Is a 5-speed or 6-speed better? Yes, but oftentimes the difference is very minimal. And if 6-speeds is so much better, why not go to 8 or 10-speeds?

  24. G.A.Branigan Says:

    I have a 4sp auto in my JK and it’s just fine.Thats not saying that it wouldn’t be better with a 6sp dual clutch set up.I am hoping that when Jeep finally brings us a diesel JK that it will have at least a 5sp auto available.They did on the 05 and 06 Liberty Limited’s.

  25. Dave Says:

    My father in law just picked up a 07 civic 4 door and it has a TON of wind noise with the bad windows down on the highway.

  26. Jim Sachetti Says:

    Dave:

    With the windows DOWN???? on the highway? Is your in-law deluding himself that he can save gas by turning off the A/C and having all windows down at 60 and 70 MPH? If he is, he does not have clue one! It burns far more fuel that way Due to the increased Aero drag!

    And, DUH, of course you would have a ton of noise with windows down on the highway, even a $500,000 ROlls Royce would!!!

  27. Jim Sachetti Says:

    When the 3 yr old Lexus model has an EIGHT speed Auto and the new 7 a SEVEN speed auto, and if you ever had the misfortune to rent one of these neanderthal Ford COntours in the 90s with what fdelt like a THREE speed, let alone a four speed auto, and if you had to suffer renting a god-awful Ford FOcus with its 4 speed auto and then drive a civic with a far smoother 5 speed auto, you would understand.

    The 4 speed auto transmission is indeed a relic and it is unacceptable in the 21st century.

    I wish most americans would drive 5-sp and 6-sp manuals, as they do over in Europe, and save even more on fuel, but since it is a fact that over 90% of all cars in the US are autos, let us at least get some half-decent transmissions!

    John McElroy rarely makes negative reviews, and if he was dissatisfied with the Forte’s 4-sp, I bet the avewrage driver would be even more so (assuming some auto literacy!)

  28. Jim Sachetti Says:

    “but Toyota still uses 4-speed autos in several of their cars, but I don’t hear them called “god-awful relics.””

    You just heard it. And Toyotas are hardly “Driver’s cars”. Most people here are enthusiasts, and if they occasionally have to own a toyota, there must be a good reason for it. ($, reliability etc). But even these people, like PEDRO, who has been absent the last few days, made a point of how much better the 5-sp auto on his rental civic was compared to another, 4-sp auto, he rented. And he owns an old corolla.

    YEah, back in the 60s, there were even 2-sp autos, but the cars had plenty of power and could still get the job done. ALso, there are differences between a MErcedes S-class 1990 with a 4-sp auto (a colleague has one of these, and the tranny is OK) and a Chevy 4-sp auto.

  29. Nick Stevens Says:

    “And I too don’t view 4-speed autos as “god awful relics”. Is a 5-speed or 6-speed better? Yes, but oftentimes the difference is very minimal.”

    They would no tbother to offer the more expensive 5 and 6s if the difference was minimal, and in addition, you are going to see many more 6 ans HIGHER speed trannys now under the new CAFE rules as makers scramble to meet the MPG criteria.

    ” And if 6-speeds is so much better, why not go to 8 or 10-speeds?”

    We are already there, as Jim mentioned, the LExus LS has an EIGHT speed auto that makes a HUGE difference in making this powerful, heavy car get excellent MPG on the highway, and BMW and MErc have 7 speeds in their top models now. Soon it will trickle down to the budget priced models.

  30. Dave Says:

    @jim
    WOW I just made a comment you are acking like a walked in and kicked your dog…what ran out of you meds or what ..WOW

  31. Kit Gerhart Says:

    Nick wrote:
    “They would no tbother to offer the more expensive 5 and 6s if the difference was minimal, and in addition, you are going to see many more 6 ans HIGHER speed trannys now under the new CAFE rules as makers scramble to meet the MPG criteria.”

    The adding of more speeds to automatic transmissions has as much to do with marketing as real advantages. There is a tranmission speed race, as it were. Is the 8-speed in the Lexus LS really better in a meaningful way than the 7-speed in the BMW’s and MB’s? Not really.

    As far as getting better fuel economy, adding gear ratios beyond 4 or 5 doesn’t make much difference with torque converter automatics. The serious efforts to improve MPG with autoboxes are torque converter-less units like VW’s DSG, and CVT’s, which are becoming more common. If they turn out to be reliable, CVT’s have a lot of promise. The Nissan Cube with the CVT has an EPA city rating of 28, pretty good for a box on wheels, even a smallish one.