Automotive News - January 7, 2008 - (Page 12)

12 • JANUARY 7, 2008 opinion CAFE will put new entrees on auto show menu Big auto shows are changing — and the corporate average fuel economy legislation signed last month by President Bush will speed the transformation. The evolution of auto shows toward displays of more practical and fuel-efficient vehicles should be obvious at the North American International Auto Show in Detroit next week. Slowly but surely, automakers are shifting the mix of vehicles they display at major shows. Not long ago, the companies leaned heavily toward excessive horsepower and way-out concept vehicles to hawk products. But the changing concerns of showgoers and car buyers — most Automakers must recently, concerns about fuel economy and global warming — use auto shows have prompted automakers to to surprise and display fuel sippers and tout futuristic technologies alongside the delight consumers gas guzzlers. A year ago, at the 2007 Detroit with innovative, auto show, General Motors generated buzz by unveiling the space-efficient Chevrolet Volt concept, which it design and highmay produce for the 2009 or 2010 model year. tech fuel efficiency. The message is still mixed, of course; this year one of GM’s show stars will be the 620-plushp Chevrolet ZR1 Corvette. There are bound to be more environmentally friendly surprises from automakers at this year’s show. And as the new U.S. fuel economy standards prompt automakers to rethink and retool their product lineups, auto shows must be forums for showing off creative packaging — such as the 2009 Toyota Venza, which will appear in Detroit. It makes no sense to grumble that the new CAFE standards will force automakers to change the fleet of vehicles they build. That was the de facto intent of the regulations. U.S. consumers are accustomed to bigger vehicles with more horsepower and torque than their counterparts in most other parts of the world. But in the new reality of higher CAFE standards, successful automakers will find ways to give consumers the functionality they want in a package they need. Automakers must use auto shows to surprise and delight consumers with innovative, space-efficient design and hightech fuel efficiency. They don’t have to cram the biggest engine they can find into every vehicle on the stand. There is still a place in the market for vehicles with extraordinary horsepower and torque. But showing off technology and vehicles that matter must become the rule, not the exception. This year is shaping up to be one of the most challenging in recent memory. So many storms are approaching that it’s tough to predict how things will turn out. But at least the year will start on a high note. In less than a week, press preview days will begin at the North American International Auto Show in Detroit. It is the big show for the United States. As always, there will be dozens of world and U.S. introductions during the three press days. It’s more proof that product is king. Sure, you have to have the quality, distribution, pricing and marketing to make a new model a winner, but it’s the product that makes the difference in the marketplace. Everything else is just so much garbage. It is almost impossible to find a bad car or truck these days, although some new models from Third World countries must DAILY AUTO NEWS >> You can get the news you need every day. Go to www.autonews.com/signup and sign up for our daily e-mail newsletter. What an exciting way to start 2008 prove themselves. But so far, there isn’t a bad vehicle in the bunch. If you are planning a winner, you had better have enough money to market that new product. You must make it a lot better than your competitor’s product, not just as good. “Just as good” doesn’t get it done anymore. Pricing can help you stay in the game, but not win it. There is no more visible place to strut your stuff than at the biggest and baddest motor show in the United States. All your competition will be there, along with thousands of journalists from all over the globe. If you’re worried about competitors closing in on every single segment, you had better stay home. It’s a lot like what President Harry You have to have the quality, distribution, pricing and marketing to make a new model a winner, but it’s the product that makes the difference in the marketplace. Truman used to say: “If you can’t stand the heat, get out of the kitchen.” There will be plenty of heat during the Detroit auto show. Storms are sure to follow the industry all year long as issues such as global warming, new fuel economy standards and financial meltdowns will be front and center. But for a few days next week, enjoy the fruits of everyone’s labor. It is always exciting to see the new products. It’s the greatest show on Earth, and it’s in Detroit next week. (600 to 650) to prop up their falling yields, thus driving up loan delinquency and loan losses. That process doesn’t happen overnight. Historically, it takes 12 to 18 months to affect loan portfolios. And 84-month financing is not new; it has been around for many years and is helpful when used wisely. Unfortunately it has been used and abused to cover negative trade equity and high back-end product sales on low-scoring customers, driving loan advances and payments up. The length of a loan has nothing to do with credit losses. If it did, you wouldn’t see 30-year-plus home mortgages. The real problem with extended-term lending is its effect on trade equity, making it more expensive for a consumer to trade out of a vehicle. Excessive back-end combined with extended-term financing exacerbates the situation. GEORGE PULIZZANO Tampa, Fla. The writer works in business development and indirect lending. GM ad policy shift is good for dealers THE WEEKLY NEWSPAPER OF THE INDUSTRY Established in 1925, published every Monday by Crain Communications Inc. Why buy Japanese? Here’s an answer retail-oriented advertising with agencies of our choosing. It took GM seven years to come to its senses. JOHN de l’ORME CEO Thorson Motor Center (Buick-PontiacGMC-Isuzu) Pasadena, Calif. To the Editor: John K. Teahen Jr. had a great column in the Nov. 26 issue (“Where did Big 3 car owners go? Guess”). Out here in western Canada, it is scary how North American cars do not even seem to appear on the radar of consumers. I am a dentist and a car nut, so I have many car discussions with patients. I am a closet Ford man, so I take particular note of how my brand is doing: not well. Several patients who have driven Fords for years are now driving Honda Accords, Nissans and Toyotas. Even though their experiences with their Fords have been (mostly) great, in most cases they report that their adult children convince them to buy a Japanese product. My guess is that the children drive Japanese because people subconsciously want to drive something different from what their parents drove; and there have been 30 years of nonstop brainwashing by the media about the superiority of Japanese products. see LETTERS, Page 14 Keith E. Crain, Publisher and Editor-in-Chief Peter Brown, Associate Publisher and Editorial Director David Sedgwick, Editor Edward Lapham, Executive Editor HOW TO REACH US Web site: www.autonews.com Editorial staff autonews@crain.com Phone: 313-446-0361 Fax: 313-446-0383 Circulation Advertising subs@crain.com lschlagheck@crain.com Phone: 888-446-1422 Phone: 313-446-6790 Fax: 313-446-6777 Fax: 313-446-8030 Editorial data/research To locate information that has been published in Automotive News, call 313-446-1662. Customer service To start or renew a subscription or to report an address change or a delivery problem, e-mail subs@crain.com or call 888-446-1422 (in the U.S. or Canada) or 313-446-1662 (in all other locations). AUTOMOTIVE NEWS (ISSN 0005-1551) is published weekly at 1155 Gratiot Ave., Detroit, MI 48207-2997. Periodicals postage is paid at Detroit, MI and at additional mailing offices. Postmaster: Send address changes to AUTOMOTIVE NEWS, Circulation Department, 1155 Gratiot Ave., Detroit, MI 48207-2912. Canadian Post International Publications Mail Product (Canadian Distribution) Sales Agreement #40012850, GST#136760444. Canadian return address: 2-7496 Bath Road, Mississauga, ON L4T 1L2 Printed in the U.S.A. To the Editor: General Motors’ decision to give control of advertising spending back to dealer groups in April will get us back to the days (before 2000) when we had control (“GM dealer groups get ad control,” Dec. 10). The dealer marketing groups were better equipped to react to their local market conditions. In those days we did 84-month financing is nothing new To the Editor: This is in response to the Dec. 10 story “Credit blues in auto finance: High payments, longer loans.” I can’t speak for the entire country, but automotive finance interest rates in Florida have been very low in recent years and have dropped significantly during the past few months, resulting in dealer discount rates in the mid 5 percent range. The low interest rates combined with strong competition in 2006 and 2007 forced financial institutions to buy deeper into the credit bureau score bands autonews.com Did you know that you can use our Web site to write a letter to the editor? Here’s how. Go to www.autonews.com. Scroll down on the left side of the home page until you see “Opinion.” Click on “Letters to the Editor.” At the top of the letters screen, there will be a gray bar that says “Send us a Letter to the Editor.” Click on that and follow directions. http://www.autonews.com/signup http://www.autonews.com http://autonews.com http://www.autonews.com

Table of Contents Feed for the Digital Edition of Automotive News - January 7, 2008

Caddy V-8 is endangered species An industry turns green -- let's talk JAPAN TRIUMPHANT Ford, Microsoft to offer 911 service in Sync GPS will track fuel price Brose buys Siemens motor unit as step toward N.A. growth Expanding Meridian sees bright future Federal-Mogul CEO to stay Harbour Consulting sold Soft market threatens Tundra sales goal Ford dumps volume targets for dealer bonuses How HCCI engines work Visteon: 'We're leaner and smaller' Ford doubles regional promo money Gasoline-diesel combo moves closer to reality Rethinking retail: A hot topic at World Congress Denso expands hybrid plant CAFE fines may yield meager grants Some pay raise: To $8.3 million from $1 New Chrysler purchasing chief looks to Asia BMW adds jobs to boost S.C. output Continental layoffs follow production cuts at Chrysler Study: Indirect loan delinquencies soar No more peekaboo for Camaro Saturn's Lajdziak: GM is 'where I wanted to be' LETTER TO THE EDITOR Why buy Japanese? Here's an answer CAFE will put new entrees on auto show menu What an exciting way to start 2008 LETTER TO THE EDITOR 84-month financing is nothing new LETTER TO THE EDITOR GM ad policy shift is good for dealers JAMES B. TREECE Detroit show gets back on a global track LETTER TO THE EDITOR Too many dealers: Blame greed LETTER TO THE EDITOR Why not learn from Toyota? LETTER TO THE EDITOR A hot news item? Nah; it's 9 years old Suppliers to the 2008 Saturn Vue Supplier personnel Haldex farms out brake work The theme: Green and mean Dodge Ram gets interior upgrade BMW's 1-series coupe gets a soft-top counterpart Chrysler eye candy includes green jelly bean Chinese automakers increase their presence Concept offers a peek at Explorer's likely successor Ford goes global in styling its B-cars Forum concept is a clubhouse on wheels Dealers Simple safety: Green, amber, red Lexus SUV luxury will grow on you Personnel Gas prices boost Nissan car sales as trucks tank This year's U.S. sales forecast: Gloomy Ford: Tata is lead bidder for 2 brands Ex-Toyota manager goes to Audi Hyundai has new N.A. chief TRW buys Delphi brake assets Who's No. 1? Time for an official review Waning interest Solstice outguns Miata - again Once more into the legal fray? Lifan is the latest Chinese wannabe Things are looking up (and down) for MG Who has 1st Mustang - and what's it worth?

Automotive News - January 7, 2008

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