Posts Tagged ‘volkswagen’

The State of U.S. Auto Market and Domestic Makers

January 10, 2012 Leave a comment

Detroit! Detroit! Detroit! Seriously thought, seems like just yesterday the U.S auto market was in the state if gloomy confusion and some housekeeping needed to be done. The plummeting sales of all auto manufacturers around the world were linked to the energy crisis which made oil go for about $147/barrel in July of 2008. Unfortunately the big 3; GM, Chrysler and Ford got the worst of it. Ignoring the signs of the economy they kept producing cars that were at the forefront of their best selling vehicles for decades – the gas guzzling SUVs and Trucks. While their Asian counterparts were converting their cars to more fuels efficient and less gas hungry by including Hybrid propulsion mills and engines with less displacement in each line-up. The gas prices made U.S cars less appealing to the consumers, in desperation to keep the market share they turned to substantial discounts and rebates which in return sunk them completely and forced the bailout of GM and Chrysler.

Now comes 2012, which brings the global doubt of the financial markets caused mostly by European sovereign debt issue leaving European auto market in, let us say “uncertainty”. Brazil China and India are most likely to have very aggressive discount rates, as it is usually expected in emerging markets. However the story is very different for U.S. In 2011 all 3 domestic manufacturers took market share for the first time in 23 years, the analysts and auto makers are very optimistic about the upcoming year. Unemployment still high but steadily falling, the U.S private sector added some 325,000 payrolls in December of 2011 and the real median annual household income adjusted for inflation rose 2.7% since August of last year. As economic indicators point to the recovery in the economy, we might not feel it in our wallets just yet, but still the 4% growth of auto sales from last year is expected to skyrocket to 9% by the end of 2012. Now this brings good and bad news for the American auto makers. The good news is that the business conditions are getting better all you need is the demanded vehicles. The bad news are “there will be blood” – this year the competition will be fierce as Toyota and Honda rebound from last year’s dismay and Volkswagen is aggressively aiming to be the number one auto manufacturer in the world.

As for the vehicles demanded, after the previous automotive crisis the domestic manufacturers learned their lesson and will bounce back stronger than ever. This takes us to the International Detroit Auto Show where some proof of “lesson learned” can be found. Righ away we start with introduction of Chevy’s Sonic RS, equipped with a 1.4-litre 138 hp turbo and available in a six speed manual transmission, this looks like a vehicle that will be very appealing to the enthusiast out there, it has been a while since domestic automakers came up with something new to match the enthusiast scene dominated by the Japanese vehicles.

Along with Sonic RS Chevy introduced 2 very interesting concepts that are aimed at the affordable compact sports car sector. The 2 Chevy cars “Code130R” and “Tru140S” have a better appeal to them than they are named. Both equipped with a turbocharged 1.4-litre inline four with eAssist hybrid tech improving fuel economy and efficiency. These vehicles have potential if only they will ever see production they might steal some market share for GM.

Chrysler after the merge with Fiat gets a new host of engines and transmissions which it utilizes to hit the compact sedan sector hard. The new Dodge Dart was introduced at Detroit with a base price of roughly $16,000 and the impressions of auto press seem to be nothing but good, Sonata should watch it’s back. Dart will feature 3 different power plants 2 of which are naturally aspired – 2.0-litre Tigershark inline four producing 160 hp and 148 lb-ft, 2.4-litre Tigershark four with 184-hp and 171-lb-ft and the anticipated 1.4-litre turbocharged MultiAir four with 160 hp and 184 lb-ft. The Dart is a product of Chrysler and Fiat merge and a vehicle with potential that can sneak up on Sonata, the best selling vehicle in the segment and gain some market share for Chrysler in the small car market.

Last but not least my favorite introduction from Ford, it is the all new redesigned Fusion. This car reminds me of an Aston Martin DB9 with the price tag of what the wheels cost on DB9. Ford Fusion was ranked the 3rd overall selling vehicles in the United States last year yet Ford performed a total makeover of the vehicle, the question is. Why? The answer seems to be that Ford in some sense learned the lessons well enough that it anticipated “blood will be spilled” in 2012 and got itself ready for automotive warfare. Ford seemed to notice that Toyota which lost market share due to lawsuits and callbacks, Honda which also lost market share due to Japan disaster, will eventually both recover and storm the market. It probably also took “Ze German” threats to take over the world very seriously which proved to be not merely talk after the introduction of their new Passat. The standard Fusion will be offered with 3 different engines 2.5-litre four cylinder for the base model with 170 hp and matching torque, the fuel efficient 1.6-litre EcoBoost engine with 179 hp and 172 lb-ft and the high performance 2.0 EcoBoost four-cylinder 237 hp and 250lb-ft. A plug-in Energi PHEV Fusion with expected rating better than Chevy Volt and Prius PLug-in and a standard Hybrid propulsion mill also will be offered.

Will domestic manufacturer see their golden years ever again? As the economy is on recovery and the market seems stronger than ever the cars that are introduced by U.S auto makers are not half bad, we are learning something from Japanese after all, but there is still much work to be done. Toyota which lost 2.3 % of U.S market last year and Honda which is still rebuilding inventory after Japan Tsunami will come back more aggressive than ever. Hyundai-Kia partnership and VW posted the biggest U.S sales for last year and both feel confident and aggressive to keep taking the market share. VW which is currently the #3 auto maker in the world, and only has 2.5 % stake of market in U.S is planning to double U.S share and become #1 in the world by 2018. Now is the time for domestic manufacturers to rebound and I think cars like the Fusion have the potential to execute a comeback for us.


VW boosts sales

January 5, 2012 Leave a comment

Looks like Volkswagen starts the new year on a good note towards achieving their goal of # 1 automaker in the world. The new Passat might be the answer for VW in the U.S market where it had failed for years to grasp the American consumers with their vehicles built for Europeans.

Named Motor Trend Magazine car of the year and North American finalist for the car of the year the Passat that was introduced last September is for the first time ever built in America specifically for us at the new Chattanooga, Tennessee plant. Bigger, cheaper and superior to its predecessor the Passat only sold some 6000 units last month, that is roughly half of the leaders in the segment but significantly higher than previous months sales and overall VW sales are up 40%.

Imitating its European counterparts by bringing production to U.S is a good idea overall but VW has a long way before it tops the American market where it hold 3.5% of the share.

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