Tuesday, April 21, 2009

Your next car and the only way to save the auto industry

Thinking about buying another gasoline-engined vehicle some time in the not too distant future? If so, you owe it to yourself to answer the following 6 questions to your own satisfaction, which would have been irrelevant 10 years ago:
1. How confident are you in terms of a continued supply of affordable gasoline over the next few years, much less decades? If you have the sense to doubt the solidity or even desirability of this supply, then go to the next question:

2. What is the point of buy a vehicle with the quality to last for 50 years, when there may not be affordable gasoline within 5 years?

3. On CNN today: Many dealers are not accepting SUVs and pick-up trucks (unless diesel-engined) as trade-ins. Their resale value his plummeted. First question from this: What will the resale value of gasoline-engined vehicles be in general when there is no affordable fuel to run them?

4. Suppose this is the year 2014. If you can afford to own just one vehicle, and the one you currently have, which runs on gasoline, cannot be driven due to fuel shortage and cost, and therefore has little or no resale value, how can you afford to buy an electric car even if you wanted one then?

5. Why maintain your carbon foot print, contribute to oil-profits and exacerbate global heating, when you can go green with your very next car?

6. "But electric cars are too expensive." To this, there are 3 answers:

a. A gasoline car may soon be worthless.

b. China is coming out for 2010 with an up-to-standard pure-electric vehicle - the BYD E6 (google it) - which claims a per-charge range of some 200 mi/300 km (vs the GM Volt's 40 mi/60 km), a 110-volt 100%-recharge time of 6 hours, a 220-volt 100%-recharge time of only 2 hours, and an 80% 220-volt recharge time of only 15 minutes, powered by lithium-ion batteries with a longevity of over 1,000 full cycles (easily 10 years' driving) - for a price lower than an American or Japanese gasoline-engined subcompact, and it can seat 5 and looks sharp. Assuming the quality is par, this should be a prime prospective for your next vehicle.

2. One of the main objections to the electric car is its price. True enough. But first, if China can do it, why can't GM? Second, there is a way for this to happen, which is:

3. If GM has to be bailed out and subsidized, then subsidize only GM's electric car lines. This will, 1, advance the battery technology to make it competitive against China's, 2, produce these vehicles in large numbers, and 3, lower its price through both the subsidy and the sales volume.

This is the best and perhaps only way to save GM, and Chrysler for that matter. To dump money into gasoline cars is:

1. to continue playing the oil game, in which we as a species will lose.

2. creating and feeding something that should be dead.

3. to starve the electric car sector of R-&-D funds.

If the entire world subsidizes the electric car, it will be affordable, and it will take off.

Anthony Marr, founder and president
Heal Our Planet Earth (HOPE)

Cars that can save Detroit
Forbes.com - Joann Muller

The American auto industry is hanging by a thread, with the fate of General Motors and Chrysler largely in the hands of the federal government. Taxpayer loans are keeping them alive for now, but their long-term success will depend on whether they have the cars and trucks that people desire.

Detroit's record on that has been spotty--witness the awful Pontiac Aztek or the subpar Chrysler Sebring--which is one reason car companies are in the mess they're in now.

Ten Cars That Can Save Detroit

But for every dog Detroit has tried to push on the American people in recent years, there have been clear winners too: The new Chevrolet Malibu, for instance, tops the Honda Accord and Toyota Camry in fuel efficiency and independent quality surveys. The bold rear-wheel-drive Chrysler 300 generated buzz that Chrysler hadn't experienced in years. And the new 17.43 km per litre Ford Fusion hybrid is the most fuel-efficient mid-sized car in America. (Toyota's new 2010 Prius, at 21.26 km per litre, is considerably smaller.)

And despite the beating Detroit has taken in recent months for its focus on gas-guzzling trucks, Ford Motor's F-150, Chrysler's Dodge Ram and GM's Chevy and GMC pickups are still extremely popular and will remain an important source of profits for the foreseeable future.

U.S. carmakers really can make world-class vehicles that consumers want (though the public hasn't always given them credit for it). They'll need every ounce of that capability to pull themselves out of their current tailspin.

But it's not just consumers that Detroit automakers have to please; now they have to satisfy the government's policy objectives too. And what the Obama administration and the Democrat-controlled Congress want--more hybrids and fuel-efficient small cars--are not necessarily what the public is willing to pay for. Fuel-efficient technology is expensive; if consumers won't pay extra for it, carmakers will have to sacrifice profits, which will only make their recovery more difficult.

President Obama's auto industry task force acknowledged as much in its assessment of GM's viability when it referred to the most prominent car on the horizon for GM, the Chevy Volt. Due in November 2010, it's a plug-in electric car that can go 40 miles on a single charge, before a small gasoline engine kicks in to recharge the battery.

'While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable,' the panel said.

Everyone knows the Volt will not save GM financially, according to John Wolkonowicz, automotive analyst at IHS Global Insight. But it's critical to the company's future, he says, because 'it showcases to the world what GM is able to do.'

'The car that's going to save GM,' suggests automotive consultant James Hall, of 2953 Analytics in Birmingham, Mich., 'is the Chevy Cruze, and the derivatives that will come off it.'

The Cruze is a fuel-efficient compact designed in Korea that will sell in markets throughout the world. It goes on sale in North America in the first half of 2010. A small seven-passenger van built off the same platform, the Chevy Orlando, is expected a little later. By selling in huge volumes, perhaps as many as 1.7 million worldwide, the Cruze family could allow GM to be profitable on small cars for a change.

Like GM, Ford's future is also tied to world-class small cars like the upcoming Fiesta and Focus, designed in Europe, and to advanced engine technology. Ford's direct injection, turbo-charged Ecoboost engines allow motorists to achieve 20 per cent to 30 per cent better fuel economy without sacrificing performance. By 2013, Ford says Ecoboost will be available on 90 per cent of its lineup, including the next-generation 2011 Ford Explorer, due next year.

'The Explorer is maybe the best example of what will make them successful,' says Wolkonowicz. 'Give consumers everything they want, plus the better fuel economy the government is demanding. You're not likely to get that anywhere else.'

For Chrysler, the future is a lot sketchier. Obama's task force didn't buy Chrysler's argument that it's viable as a stand-alone company. It has given the company until April 30 to reach an alliance with Italy's Fiat SPA, or face liquidation.

Fiat could provide Chrysler with the small-car technology and fuel-efficient engines it lacks. Its 500 minicar, MiTo subcompact and Lancia Delta compact are good candidates for shared technology. The problem is that no Fiat-engineered vehicle can come out of Chrysler's North American factories before mid-2011. In the meantime, there's not much on the horizon that can reverse Chrysler's sales nosedive, down 49 per cent so far this year, following a 30 per cent drop in 2008.

'By 2011 there are a lot of new products coming, and you'll be seeing the best lineup these companies have had in their history--if they can just span this miserable period we're in right now,' says Wolkonowicz .

Anthony Marr, founder and president
Heal Our Planet Earth (HOPE)

No comments: