Automotive News - August 11, 2008 - (Page 46) 46 • AUGUST 11, 2008 SUBARU Dealers clamor for a smaller car continued from Page 4 Subaru cut its customer cash from $2,250 to $1,500 on the Outback, which was last redesigned for the 2005 model year but won’t be changed for at least another model year. Forester sales have cut into those of the Outback, but not substantially, Colbeck says. Outback sales this year are expected to drop at least 6 percent compared with 2007, he says. The Tribeca, which has been redesigned, repackaged, loaded up with incentives and then stripped of them, is doing miserably with sales down 53.1 percent in July. But Subaru won’t put back the $2,000 customer cash it had on the Tribeca before the 2008 model redesign that softened the radical styling and gave it more power. How long will streak run? How long Subaru’s U.S. sales streak will continue isn’t clear. The company has targeted sales of 230,000 to 240,000 units by 2011 but won’t add vehicles in any of the hot categories — subcompacts, diesels and hybrids — in the foreseeable future. Subaru sells diesels in Europe. Japanese management has said a diesel may come to the United States, but Colbeck says U.S. homologation will take years. Dealers are clamoring for a smaller car, but Tokyo has made no commitments. The problem with a smaller car is building an awd vehicle with performance “that we can all make money with,” Colbeck says. A hybrid is being developed with Toyota — which now owns 17 percent of Subaru — but there’s no public timetable or clear indication of which model will get the powerplant. Subaru of America management isn’t saying more. The promised rear-drive sports car being developed jointly with Toyota isn’t coming until 2011. c Nissan pins green hopes to new electric car Hans Greimel hgreimel@crain.com SOLDIERS Dealership’s run-ins go beyond military continued from Page 1 Johnston, 59, and his sons, Heath, 37, and Beau, 34, who manage the dealerships, concede mistakes. They admit selling vehicles with improperly recorded identification numbers — a clerical error, Beau Johnston says. And they acknowledge financing some deals without a needed state license — a bureaucratic mix-up, Rick Johnston claims. But Rick Johnston insists: “We’re not bad people. We’re just a family trying to make a living.” The three dealerships sold about 2,000 new cars and trucks last year. The Johnstons say bad publicity and other effects of the military ban could cut that business in half. Last month, Rick Johnston’s company filed for bankruptcy, looking for breathing space to reorganize. In a court filing, the company reported owing its 20 largest unsecured creditors more than $2.1 million. ALYSHA WEBB Says Rick Johnston, center, with sons Beau, left, and Heath: “We’re just a family trying to make a living.” Tuman returned to Fort Huachuca last year after a tour of duty in Iraq. Soon thereafter, Phil Maxey, a civilian lawyer on the base’s Armed Forces Disciplinary Control Board, proposed that the dealership pay Tuman $6,000 for his trade-ins and “cause any adverse entries to his credit report to be favorably corrected.” In return, Tuman would drop his complaint to the board. Beau Johnston calls Maxey’s offer “an extortion game.” But he says the Johnstons probably will pay Tuman the $6,000 if the bankruptcy court that is hearing their case approves. Maxey declined to comment. A soldier’s story Heath Johnston challenges officers at Fort Huachuca to “come up with one instance where we are hurting the morale and welfare of their soldiers.” The Johnstons defend their conduct in their dealings with soldier James Tuman. In February 2006, Tuman bought a used 1995 Pontiac Firebird from Ideal Automotive. He soon returned the car to the dealership, claiming it had mechanical problems. Tuman tried to cancel the purchase, financed by a $10,760 loan he had taken from Ideal Automotive, and buy a car at a competing dealership. But the Johnstons refused to return his trade-ins, a 1994 Isuzu Rodeo and a motorcycle. “We told him he could switch to another car on our lot,” Heath Johnston says. “But we’re not going to let you out of the contract.” Johnston threatened to identify the Firebird as repossessed, which would have blemished Tuman’s credit report. A bad credit rating can affect a soldier’s security clearance. An argument between Tuman and Beau Johnston in April 2006 led the dealership to call police. Tuman was cited for disorderly conduct and released. Ultimately, the Johnstons say, Tuman agreed to let them keep the trade-in vehicles in return for a voided sale that would not damage his credit rating. Heath Johnston says Tuman never signed the agreement. Tuman was not available for comment. falsely that aftermarket parts in a used car sold by Wildcat Mitsubishi were covered by a warranty. One of the complaints came from Andrea Gragg, 26, a server at a Sierra Vista restaurant. Last year, Gragg bought a used Dodge Durango from Ideal Automotive. The dealership allowed her to take the truck before financing was approved. After Gragg’s poor credit disqualified her from financing, she returned the Durango. But instead of refunding Gragg’s $750 deposit, she says, the dealership pressed her to buy a used Plymouth Neon. Again, she says, she drove away in the car before she was financed. When the dealership later quoted her a 28 percent interest rate on her loan, she brought the car back. Beau Johnston refused to return her deposit, she says. “He said he hasn’t given down payments back in as many years as he has owned Ideal, and he wasn’t about to start,” Gragg says. Only after she complained to the Better Business Bureau, she says, did the dealership refund her deposit. Heath Johnston denies that the dealerships engage in strong-arm sales tactics. When financing problems arise, he says, “nine times out of 10, we make appropriate adjustments,” such as reducing the sales price or offering larger trade-in allowances. YOKOSUKA, Japan — The mockup of Nissan’s highly anticipated electric car starts with beautiful silence when you turn the key and then cruises off with a satisfying electric hum. But it also lugs 300 kilograms (660 pounds) of lithium ion battery packs, enough to fill the floor space in the back seat and force passengers to scrunch up their legs. The test car also does 0 to 100 kph (0 to 62 mph) in a tepid 13 seconds. There’s a lot at stake in getting this car right. It is scheduled to debut in 2010, and it is the centerpiece of Nissan’s plan to leapfrog Toyota Motor Corp. and Honda Motor Co. in green technology. Its mission: Make Nissan a pioneer not only in lithium ion batteries but also in zero-emissions vehicles. Urban runabouts The back seat issue is mostly a layout problem. The mock-up’s electric drivetrain was wedged into the chassis of a Nissan Cube compact for test purposes. When the vehicle debuts in two years, it will be a new model — presumably with ample room for the battery. More important than space will be battery performance. Nissan’s lithium ion formula calls for flat, laminated cells with manganese anodes and carbon cathodes. They are cheaper and less prone to overheating than lithium ion batteries based on other chemistries, such as nickel-cobalt, Nissan says. Nissan’s first test will come against Mitsubishi’s i MiEV electric car, which goes on sale next year. Both cars are powered by lithium ion batteries and are envisioned as compact urban runabouts. It’s difficult to judge the performance of the Cube vs. the i MiEV, because the Cube is bigger. But the test Cube’s batteries are twice as heavy as the i MiEV’s. What’s more, Nissan’s battery has a range of 62 miles compared with the i MiEV’s 100 miles. In the end, pricing will be key, says Mitsuhiko Yamashita, Nissan’s r&d chief. Lithium ion batteries account for up to 30 percent of the total cost of electric vehicles, he says. The only way to make electric vehicles affordable at the start will be through government incentives such as tax breaks, Yamashita says. Nissan is pursuing that track in agreements with governments in Israel, Portugal and Denmark, as well as in Tennessee. The electric vehicle was shown alongside Nissan’s upcoming hybrid vehicle at a technology showcase last week at the company’s Oppama proving grounds south of Tokyo. Gas pedal pushes back Among other innovations Nissan showed off: An Eco Pedal accelerator that pushes back when lead-footed drivers stomp on the gas. The idea is to encourage more gentle, fuel-efficient driving. The feature will debut next year. A Safety Shield all-around collision-prevention system that uses sensors to monitor rear blind spots when shifting lanes or backing. It uses braking to steer the car away from danger. Smart Auto headlights that are sensitive to light conditions. They automatically turn on earlier at twilight but aren’t fooled by driving into darkened areas such as shadows. c Civilian complaints The dealership must address other issues. The Arizona Department of Financial Institutions has cited Ideal Automotive for making finance deals without a license over the past two years. The Johnstons say they forgot to renew the license but have now filed the proper forms. Jack Hudock, a spokesman for the state department, says the Johnstons could face fines of $5,000 a day for each violation. The case is pending. Last month, the state Transportation Department cited Wildcat Mitsubishi for violating a previous order to stop issuing temporary license plates. Five times, the department said, the dealership had issued temporary plates with the wrong vehicle identification numbers. The dealership could be fined $3,000 for violating the order, says Transportation Department spokeswoman Cydney DeModica. The department has not decided whether to assess the penalty, she says. Tom Collier, president of the Better Business Bureau of Southern Arizona, says other consumer complaints against the dealerships include refusing to return a deposit after a customer decided not to buy a car, selling
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