Author: Paul Eisenstein

Filed under: Car Buying, Budget, Sedan, Hatchback

Betting on small cars…

My friend, Sam, is your classic Texan. Big home, big pool, big personality and, of course, a big car, a Chevrolet Silverado pickup that he uses a couple times a year to haul lumber and yard supplies from the local mega-mart. But most of the time he’s sitting in Dallas traffic, running up big gas bills.

And that’s got Sam thinking about whether he really needs all that much of a truck. The last couple weeks he’s been stopping by the local mega-auto mall – where, as you’d expect, they carry just about every brand of car – looking at a number of alternatives, all of them a lot smaller. A classic Chevy truck fan, he’s leaning towards the new Equinox, though he could easily afford something more lavish.

When even Texans are starting to downsize, one has to ask what’s going on in the American automotive market. “There is an opportunity in small cars,” that General Motors hopes to exploit, says CEO Ed Whitacre, with an assortment of new products such as the pint-sized 2011 Chevrolet Spark. His counterpart at Ford, Alan Mulally, echoes that view, and has ordered up a variety of new models, including the subcompact Fiesta and the next-generation Focus.

Import brands are already invested in the small car segments, with models like the Honda Fit and Toyota Yaris. Even highline makers are downsizing, with offerings such as the Mini and the BMW 1-Series.

In a nation that has long felt that big is better, why is small suddenly beautiful? The first sign that things might be shifting came in mid-2008, when U.S. fuel prices soared to record level triggering, in turn, a collapse in sales of pickups and sport-utility vehicles. The trend was short-lived, however. Even before pump prices started slipping back, small car sales began to wane.

So, why is the industry betting so big on small cars now? For one thing, most expect gasoline prices to reach $4 a gallon in the long-term. Meanwhile, tough new federal fuel economy standards also press the industry to downsize.

Continue reading The DetroitBureau.com on Autoblog with Paul Eisenstein

The DetroitBureau.com on Autoblog with Paul Eisenstein originally appeared on Autoblog on Mon, 19 Apr 2010 16:41:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Filed under: Government/Legal, Recalls

Toyota Crisis Likely to Trigger Change Across the Auto Industry

Don’t be surprised to see yet another recall or two from Toyota in the coming weeks. Among other things, the embattled automaker may reveal a fix for unexpected stalling involving hundreds of thousands of recent Corolla and Matrix models.

That will be another setback for a company that is desperately struggling to push past its recent safety problems and get back to focusing on the business of selling cars and trucks. The maker has taken a more aggressive stance in recent weeks, underscored by efforts to discredit skeptics who insist there are unknown electronic gremlins with Toyota products, as well as an assault on a motorist who now looks likely to have staged a well-publicized incident involving a “runaway Prius.” But each step forward seems accompanied by two in reverse.

A number of key competitors have been hoping to take advantage of Toyota’s uncharacteristic stumbles, including General Motors and Hyundai, targeting Toyota owners with incentives and less than veiled marketing pitches that raise the specter of unsafe Toyota products. But the competitive efforts have, on the whole, been surprisingly subdued – and for good reason. Every automaker knows it could be next under the microscope. And, worse, Toyota’s near-term problems are likely to become a matter of concern for the auto industry as a whole, going forward.

Continue reading TheDetroitBureau.com on Autoblog with Paul Eisenstein

TheDetroitBureau.com on Autoblog with Paul Eisenstein originally appeared on Autoblog on Mon, 22 Mar 2010 16:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Filed under: Recalls, Toyota

We’re very pleased to announce that veteran automotive journalist and Publisher of TheDetroitBureau.com, Paul Eisenstein, has joined the Autoblog team as a Contributing Editor. His editorials will appear regularly on Autoblog, beginning with this one:

Toyota: From “Benchmark” to “Troubled,” the Decline of an Icon

It’s been said that when the gods want to punish a company, they first give it 40 years of success. Okay, we might quibble with the precise number, but that certainly seems to fit Toyota. Even with last year’s bankruptcy at General Motors providing perspective, it’s hard to find any more rapid fall from grace.

It was just a year ago that the giant maker seemed to have everything going for it. It had toppled GM, the long-time automotive king-of-the-hill, to become the world’s biggest carmaker. It was routinely touted as the benchmark for what industry types like to call QRD, or quality, reliability and dependability to everyone else. Its Toyota Manufacturing System was the benchmark that everyone else set out to emulate. And as former Ford Vice Chairman Allan Gilmore was fond of repeating, the Japanese maker had “more money than God.”

Yet, it didn’t take long for things to turn upside-down following the release of the global 2008 sales numbers. Even as Toyota was savoring victory in its battle with GM, which was quickly plunging towards Chapter 11, Toyota’s financial house turned out to be in alarming disorder, the maker reporting its worst – indeed its first – loss since the guns fell silent at the end of World War II.

Continue reading TheDetroitBureau on Autoblog with Paul Eisenstein

TheDetroitBureau on Autoblog with Paul Eisenstein originally appeared on Autoblog on Thu, 04 Feb 2010 14:59:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments