Tommi Kaira Prius: All Show, Still No Go

Proof That It's Okay to Be A Hypocrite
(Image Credits: Autocar Magazine Online)

Fans of Gran Turismo will have heard of Japanese tuning outfit Tommi Kaira. While TK earned digital fame for its mental versions of the Skyline GT-R and Mitsubishi Lancer, it seems that the erstwhile wrenchmen wanted to do something a little more, how shall we put it, green. Enter the Tommi Kaira Prius. This is a very important car. Before you laugh that one off, let me explain why. There have been a whole raft of so-called "hybrids" out there; the Escalade, Silverado, and rumored Ferrari V12 hybrid come to mind. These are little other than normal gas-guzzlers with large hybrids. Think of them as thirsty beasts wearing a cuddly, Earth-friendly badge. Tommi Kaira have unwittingly produced the exact antithesis of these cars: a hybrid dressed up like a sports car! Wow! Like Andre Agassi said back in his Canon days, image is everything. The question I'm left with is, what image exactly is TK going for? It is a niche car, that is for sure. But how large can the niche be for people that want a sporty-looking, though not altogether sporty driving hybrid car? It's the sort of people who want to wear outdoor performance clothing, but don't want to have to go through the hassle of actually going outdoors. Hey, maybe TK is on to something...

The CC: Volkswagen Fails to Learn from History

Santayana Would not be Impressed by VW's Wanton Flouting of Its Own Recent History
(Image Credits: Microsoft Encarta Online)

To reveal how easy it is to get behind on the American market when one lives in Europe, I was absolutely stunned whilst watching the (resolutely awful) Virginia Tech vs. Miami game yesterday to see ads for the new Volkswagen CC. I'm sure that our astute readership has seen this one coming for a long time. Forgive my retardation on comment, I beseech you. Where oh where do we begin...

First, from the back it looks like VW had a look at the Buick Lucerne and said, "Ja! Das ist the auto that we must build." (Don't even get me started on Buick's new ad campaign; hip-hop from the early-90's? Is Gen-X retiring already?) From the front, it looks like a (earth-shattering surprise here) Passat. In fact, this is no surprise as, when the CC goes in sale in the UK, it will be sold as a trim level of the Passat. So what you in fact have (as the eminent Mr. Clarkson describes) is that the CC is to the Passat what the Mercedes CLS is to the E-class. But why? Are there enough takers for the Passat and a prettier, though fully equivalent, sister? Why not just make a prettier Passat? VW needs to learn from the CSI franchise, and fast; just running the exact same show every night of the week with a different cast and location will work in the short term, but eventually, you dilute the brand.

Second, what's with the name? I respected the fact that Volkswagen still gave its cars names (even if they weren't inspiring or evocative) while the rest of the industry had moved on to alphanumeric soup. Just today I was talking about how "Golf" is a really weird name for a car). Yet, starting with the Touareg, things have started going down hill. Sharan, Touran, Eos, and now... oh, what the heck, what are your two favorite letters? Yes, VW's most iconic and brilliant car is the GTi. Hands down. When I return to the US it's highly likely that that is what I will buy. But, CC? What does it stand for? Cubic centimeter? Curiously Coined? My wife had the best with "Country Club." Would make sense if that's where VW performed its market studies.

Third, and this should be blatantly obvious to students of VW history, VW has tried this before. This is not a new development in Wolfsburg. In fact, it is quite striking that VW could be so brazenly bold in the face of what was an historical chastening at the unyielding and merciless hands of the US car market. None of you will remember the 2004-2006 VW Phaeton and that is because it was the most forgettable car ever made. Ever. I mean, what car has ever been built that has a factory that is more exciting and technologically interesting than the car itself?! It all was one man's party piece: Ferdinand Piech. Mr. Piech is the luminary behind such brilliant VW efforts as the 1-Liter car, the Nardo concept car, and the Bugatti Veyron. Talk about a hit list. How in the world did the puffed-up Passat make this techno-whiz list? It seems that Mr. Piech bristled at the idea of showing up to meetings with the other big German automakers in an Audi when he was chairman of the VW Group (of which Audi is, of course, a part). The goal, then, was to make an aspirational VW that was not an Audi. See Jeremy Clarkson's hilarious, and insightful, review of the Phaeton here. My favorite Phaeton gadget has always been the draft-less HVAC system; runny noses begone!

The problem with the Phaeton is so manifestly inherent to Volkswagen that it lies in the very name of the company. Volkswagen is often translated into English as "the people's car." By nature, a VW cannot be an aspirational automobile. The foundation of the company is transportation for all. So, while VW can dream of having a standout among equals, they simply cannot compete with the badge caché of the likes of BMW, Mercedes, or yes, even Audi. Historical blindness was the bane of the Phaeton; it will prove to be the downfall of the CC, as well.

Waste Not?

The Only Clunk Heard Was That of My Head Striking the Desk
(Image Credits: Autocar Magazine Online)

The fact that I have no love lost for the Cash for Clunkers scheme is not news on this blog. Richard Bremner's latest in Autocar magazine, though, really drives the point home. Have a glance through the gallery at the twisted priorities of Western consumerism. Perfectly good cars traded in on a whim for something shinier, more satisfying(?), but certainly unnecessary. Admittedly--or rather, hopefully--these cars are outliers of an otherwise successful effort to get oil-burning rust-buckets off the street. But is it at all surprising that people used this scheme as an excuse to just get a new car? We do it with other consumer items, as well. Take for example, the iPod. Sure, it might be frustrating if the batter doesn't hold a charge for days on end like it did new, but if it still is holding a charge for at least a day, let alone 12 hours, is that not good enough for it to still be useable? The cars in these pictures were not good as new; they were probably not even good as used. Yet, they were by no means ready for the scrapyard. Cars, quite unlike consumer electronics, are meant to be maintained. In past lean times, people would "make do" with what they had. Scrappage schemes are an affront to common sense; rather than encouraging people to make sensible purchases, or educating people on basic personal finance, governments are throwing money out for any old purchase. Sounds like giving a man a fish, if you know what I mean.

Small Cars: Ankle Biting the Car Industry?

The Polo: Volkswagen's Bread, Volkswagen's Bane?

(Image Credits: www.jalopnik.com)

In an interesting summary of the state of the automotive industry on the even of the Frankfurt Motor Show, the Economist highlights some important trends that manufacturers must be aware of. Not the least important of these is that consumers--across most markets--are seeking smaller cars. For an industry accustomed to corporate/economic gluttony, this is a big problem for a couple of reasons.

1. The market is saturated

The car market as a whole is saturated. Demand cannot support the number of manufacturers that are currently offering products for sale. Even in relatively decision starved America, the process of purchasing a new car can be a very daunting task given the myriad of brands, let alone models that are vying for purchase. Companies rise and fall, but, in their latest actions, governments have cast doubt on whether the automotive industry can be allowed to endure such transience. This is a dangerous thing. Allow a mechanical analogy: a door. If a door is free swinging then it is possible to slam it shut. The faster the door is shut, the larger the slam. If, however, a damper is put on the door, then you can slam the door as hard as you like and it will still close at the same rate. If governments are going to take any meaningful and long-term action in the automotive industry, they must try and remove some of the energy of contraction, thus allowing it to occur gradually rather than suddenly. Keeping all the same brands open, whatever small demand may remain for companies like Saab, is not a solution. It only prolongs the fall.

2. Small Cars Have Small Margins

I grant you this: SUV sales were perpetuated by greedy and misguided consumers. People wanted big, strong looking vehicles to offer security, say something about them, and who knows what. But auto manufacturers were not unwitting accomplices to this trend. I have written before about how the Cash for Clunkers scheme had no teeth because the average fuel economy in US automakers' fleets was so abominably low. However, there was a simple financial incentive for producing SUVs: high margins. A margin, put simply, is the difference between what it costs to make something and the price for which you can sell that product. The Economist picks up on this:

To understand the importance of the mix, says Max Warburton of Bernstein Research, compare the cost of producing a small car such as the popular Fiat 500 with that of making a hulking sport-utility vehicle such as the Audi Q7. Mr Warburton calculates that the fixed costs are nearly identical, whereas the variable costs of making the Q7 (labour, raw materials and so on) are only about €10,000 ($14,700) higher for the Audi. Yet the Fiat sells for as little as €10,000, compared with a sticker price of at least €40,000 for the Audi. So a permanent shift toward smaller cars would devastate industry profits.

Large cars don't cost much more to make, but people are willing to pay a lot more for them. This, again, seems to be something that will be corrected over time. Automobile manufacturers like Toyota and Porsche have demonstrated unequivocally that massive amounts of cost can be cut by designing the process of assmebly as efficiently and intelligently as possible. This is how companies adapt to building a product with smaller margins. Higher margins provide a different kind of cushion, the sort that stunts rather than encourages efficient construction. Building a small car may be more expensive, but in the long run, its production that we can afford.

Renault Creates a New Paradigm for 'Team Orders'

Like the Dodo, Fair Play in Formula One (and Perhaps Sports In General) is Dead.
(Image Credits: http://lawyerkm.files.wordpress.com/2008/09/dodo_11.jpg)

With all the hubbub recently over such important issues as Serena Williams threatening violence against a US Open line judge, Kanye West performing one of the strangest social faux pas in recent memory, and, oh little things like health care reform, economic downturns, and the opening salvo of a trade war, you could be forgiven for missing this bombshell: Renault F1 has all but admitted that they conspired to fix a race. Not in any small fashion, mind you. This isn't Michael Schumacher and Rubens Barrichello being so dominant they try to trick the timing equipment into a nearly impossible dead heat. No, this was a blatant, tactical, and calculated action by a team to fake fortune, to create their own luck, and to hoodwink themselves onto the top step of the podium.

For a sport that desperately needed an image revamp after a controversy laden offseason, Formula One seems to be self-destructing in full public view. One manufacturer, BMW, has already declared its intent to leave the sport next season. Scandalous though he may be, Max Mosley has rightly pointed out that Formula One cannot stake its future on manufacturers, whose interests in the sport are far too ephemeral; extending only so far as profits, and success, allow. BMW has not won a world championship in four seasons' effort, therefore, they are cutting and running. How much longer will Toyota--who are rumored to have spent billions of dollars trying to build the perfect team--tolerate a lack of race wins, let alone championships? Now, it seems, the lot has fallen to Renault.

That a team could willfully ask one of its drivers to put his health, potentially even his life, just so that his teammate can have a better chance at winning is a damning indication of a deeply flawed culture within the Renault team. Only 15 years ago this type of crash could have killed Nelson Piquet, Jr. Is this an unforeseen knock-on from the superlative progress that the FIA and the Formula One teams have made in driver safety? Tell the old boy to get into a crash; he won't die. Make no mistake, the crash did not guarantee a win; Alonso's car could have easily come to a stop with a mechanical glitch, he could have had a real accident himself, or he could have been knocked off the track. Any number of things can happen; this is, after all, the nature of motorsport. As much science as Formula One teams like to put into the development of their cars, they still can only minimise, not remove, the uncertainty inherent in the sport. Renault's actions were the height of egotism and hubris; they are lucky to escape with banishment, if that is what it comes to. They deserved to have lived with the shame and horror of being the first team to suffer a driver fatality since 1994.

This is just another disheartening example of the erosion of sportsmanship in our increasingly self-centered and media-driven culture. Gene Wojciechowski wrote a marvelous article for ESPN.com in response to the Oregon-Boise State incident two weeks ago about how far we've come from days of respecting one's opponents and playing fair. Formula One teams, like Division I college football teams--with their massive budgets, stakes, and egos--are always looking for "the edge;" for that next thing that their competitors have yet to twig that keeps them out front. Often these advancements are on the cusp of legality; fulfilling the rules in word, though perhaps not in spirit. Yet Renault was not creatively interpreting a technical specification. They were tampering with the outcome of the race in a base, crass, and dangerous manner. When an organization sees itself as being above the rules, it is capable of anything, regardless of the dictates of honorable competition, fair play, or common sense.

As a follower of Formula One--ardently from 2001-2005 and casually since--I cannot see Renault remaining in the sport next year. Its star has been on the wane since Fernando Alonso won his world championships back in 2005 and 2006. The car has struggled to be relevant this year, and now there are the excoriating and damaging claims of such ludicrous and wanton flouting of the rules, let alone human decency. The CEO of the Renault Group, Carlos Ghosn, has never issued unqualified statements on the company's Formula One activities. In his own words, Mr. Ghosn stated that:

As long as we continue to perform well, we offer a good show, and obviously we are at the top level of Formula One, then there are not questions about the future in Formula One.

Mr. Ghosn also stated the importance of Formula One offering a "good return on investment" in order for Renault to continue funding the team. Unsurprising words from a man nicknamed "Le Cost Killer" for his slash and burn job that resurrected Nissan. No multinational corporation is going to stand having its name dragged through the muck in relation to breach of the rules of competition. Does Renault want to become a synonym for cheating? I doubt it. Flavio Briatore and Pat Symonds have stepped down, undoubtedly in an effort to stem the bleeding. Their efforts will be to no avail. When Nelson Piquet, Jr. crashed in 2008 he destroyed his car, the future of the Renault F1 team, and any good faith in the tattered shreds of the spirit of competition remaining in Formula One.

If you don't like it, give it back!

General Motors North America has announced a new advertising campaign, being called 'May the Best Car Win,' that will allow unsatisfied buyers to return their new GM automobile up to 60 days after purchase for a full refund.

The new program has a few limitations--for instance, the buyer must be up to date on his or her payment, the car cannot have more than 4000 miles on it, etc.--but overall, it is a customer-oriented push towards helping buyers gain some confidence in GM. While GM looks much different these days, post-bankruptcy--with the cancellation of the floundering Saturn brand, and the phasing out of Pontiac to merely a small, limited offering of a few vehicles through Chevrolet--GM hopes that this new incentive will revive their reputation, as well as their bottom line.

A 'money-back' guarantee is quite the drastic step for GM North America. It will be a difficult task for the company to win over the public and improve brand image. GM appears to be aware of such difficulty--they are spending $2 billion on advertising per year--and by most accounts, it will likely be a very critical time for the company's health. One is left to wonder, however, what will remain for the automotive giant if this new approach is unsuccessful.

Ferrari Hybrid: Because California Cares

Look! It's a Plug-In Ferrari. Oh Wait, It's Just a Toy.
(Image Credits: hobbytron.com)

In this Autocar Online posting, Ferrari announces that their first hybrid car 'is likely to be a V12.' The stated reason, according to Ferrari president Amadeo Felisa:

"California will be the model that drives our innovations," he said, "because we feel its customers are more concerned about these things."

As my peers put it, to which 'things' is Mr. Felisa referring? Hybrid vehicles? V12 engines? Precisely why does Ferrari need a hybrid vehicle? Most importantly, why does Ferrari need a hybrid engined V12? Presumably, to meet Corporate Average Fuel Economy (CAFE) standards for the brand, it would be possible to sell enough hybrid engined V8s to offset the consumption of the paltry few V12s that Ferrari sell. For example, the last V12 engined Ferrari was the Enzo. During its three year production run, only 400 examples were sold worldwide.

Let's cut through the marketing-speak to the motivations behind what Mr. Felisa is saying:

1. The possibility alone of a hybrid Ferrari keeps Ferrari relevant, both technologically and psychologically. There has been an awful lot of talk about how the 'supercar age' is on the wane. By incorporating 'green' technologies like hybrid drive into sports cars, the sports car companies show that they are not completely out of touch. However, the absurdity of a hybrid V12 engine shows that reality isn't mixed in the Kool-Aid in Maranello.
2. California is a huge market for Ferrari. Back in the 1980s, when emissions and crash standards were introduced in the United States, Ferraris and Lamborghinis were sold on the gray market to bypass federalization requirements. If California continues its tack of having more stringent emissions requirements than the rest of the nation, Ferrari could quickly find itself legislated out of one of its primary revenue sources. That is simply unacceptable from an economic standpoint.

I applaud Mr. Felisa's carefully chosen words; decidedly free from the 'greenwashing' rhetoric that seems to color so much of what's going on at Frankfurt. As the industry continues to struggle for relevance, its anamolous brands like Ferrari, Aston Martin, and Porsche will find it continually more difficult to justify their own existence. Whether hybrid sports cars provide that grounding is uncertain, but let's hope for clearer statements in the future.

VW: Over the Moon

Building a Car That Has No Market, That Takes Guts. That's How Development Occurs.

(Image Credits: Autocar Magazine Online)

In the 1960s, America put a man on the moon. This technological feat was possible because of the hard work and dedication of some very intelligent men. It was possible because of the faith of lawmakers in these men to be able to pull this daunting task off without tragedy or embarrassment. Most importantly, it was possible because we had cash reserves and export surpluses to match our purple mountains majesty. The situation at VW is very reminiscent of those heady early days at NASA.
VW's chairman, Ferdinand Piech, has been pushing the development of some of the most advanced automotive technology ever conceived. How many cars are made boring or uninteresting (dare I say, ugly?) in comparison with the factory in which they were built? Such it is with the VW Phaeton and its palatial birthplace. The Bugatti Veyron is often cited as Piech's greatest (and most asinine) accomplishment during his tenure as the top man. It is, without question, the most technologically advanced car ever made, in every way, just as it was designed to be. If you've never watched the first Top Gear Veyron race, you must. Your man card will be revoked, otherwise.
Rolling across the feed this morning came this little gem: VW plans to sell a revised version of its much hailed 1-Liter car by 2013. This is wonderful news. Granted, it looks a bit too much like Honda's ill-advised first generation Insight; a car driven predominantly by university professors in the Pacific Northwest. It won't appeal to a wide audience; certainly not in the United States where it is roughly the size of a Hummer wheel. But we have already been reaping the benefits of the 1-Liter car in the guise of the Bluemotion line on sale here in Europe. These ultra-efficient diesel cars flat out stomp their competition; hybrid cars especially. Now, the progenitor of that fantastic technology will be made directly available. Will it be the first aspirational eco-car? Probably not. But is it significant? Is it a good business decision? If it moves VW out in front of its Japanese competitors (rightfully, might I add) in the green races, then VW deserves to be the first to make that small step.

Ferrari Prostitution

A Prancing Pony?
(Image Credits: Autocar Magazine Online)

Fresh off the Autocar feed is the "Ferrari" Abarth 500; evidently the car that appeals to 'Ferrari owners who want a small everyday car.' Let's think about this: if Ferrari owners wanted small, everyday cars then they would have purchased small, everyday cars. Instead, they purchased Ferraris. There is nothing intrinsically wrong with this. If they have the money, why not buy a Ferrari? There are so few Ferraris on the road that the environmental ramifications are offset by plebes such as you and me.
However, this is nothing but prostitution. Ferrari is selling itself in the midst of a dire financial crisis in the hopes of cashing in on its brand name by selling a "Ferrari"-branded Fiat to yobs and wannabes. It's like owning a Ferrari hat or shirt or bottle of cologne that you can drive. The best part is that they try and pass it off as competition, since Aston Martin is releasing an 'Aston' version of the Toyota iQ called the Cygnet. This isn't competition, it's copying. Evidently, Ferrari is not so immune to the downturn as they would like us to believe. Both companies should beware, though. The appeal of both lies in their exclusivity. Imagine if Moët and Chandon decided to release a special M & C version of Coca-Cola; would it be anything other than a soda? Of course not. What you are looking at is 1.4L of tarted up soda.

Audi Boss States the Obvious... Media Lashes Back

In a rare move of German personality, Audi boss Johan de Nysschen made a statement about the Chevrolet Volt that has been promptly misinterpreted. De Nysschen did not say that the Volt was a car for idiots; he said that one would have to be stupid to pay the premium, that is, the decision is a stupid one. Even better, de Nysschen has seen fit to clarify his statement that had been misinterpreted. While I admit that de Nysschen could have chosen his words better, or that the attack could have been levelled against General Motors rather than leaving open the interpretation that somehow the 'innocent consumer' could have been the subject of his statement, I agree fully with de Nysschen's assessment. The Volt is not a car that makes sense.

Engineers can appreciate the technical complexity of cars like the Volt, the Toyota Prius, and the Honda Insight, however, they are not, in themselves, ideal solutions. They are part of a general trend to better fuel economy. The problem with the Volt is that it is a reactionary move; this has been the problem with the Detroit auto industry for the better part of the last 20 years. Has GM sought to outdo the level of engineering of the Prius or Insight or to break new ground? No. Instead, the Volt seeks to capitalise on the 'gadget factor' of the Prius or Insight. It is a car for people who want other people to know that these people are doing their part. More than that, they are Japanese cars; Japan is synonymous with high technology in the United States. Chevrolet (and American technology in general) isn't. An understated diesel Audi, while German and highly advanced, is not so flash.
Granted, an Audi is a bit of a repmobile. Yet de Nysschen is 100% correct that no one will pay a $15k premium over a comparably equipped Corolla for a Chevrolet. It doesn't make economic sense, it doesn't make practical sense, it doesn't even make environmental sense. The sad thing is, he made a poor choice of words by directing blame right on the people who should have been blamed. If Americans wanted more fuel efficient cars GM would have been building them. Shame on the Germans for being honest.