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Monday, April 16, 2012 For Advertising Information Contact Your Local Cars.Com On-The-Move Sales Team at 599-2329 Summer gas prices set to rise 6.3 percent over 2011 LOS ANGELES—Although gas prices have been easing lately, the Energy Depart- ment has predicted that U.S. motorists will be shelling out an average of 24 cents a gal- lon more for gasoline dur- ing the peak summer driv- ing season, defined as April through September. Peak prices will aver- age $3.95 for a gallon of regular gasoline, up 6.3 percent, or 24 cents, from last year’s April-Septem- ber driving season, accord- ing to the agency’s monthly Short-Term Energy Outlook. That represents an increase from last month’s peak sea- son prediction of a $3.295 average. The highest monthly aver- age is expected to be $4.01 in May, the agency said, put- ting the chance of a $4 aver- age in June at 40 percent. Gasoline prices will vary widely by region, with the West Coast leading the way at an average of $4.20 for the peak season. Gasoline prices have been rising primarily because crude oil prices are up, but refinery closures in the Northeast are contribut- ing, the Energy Depart- ment said. All of this pump-price pain is expected to reduce gasoline consumption by 0.5 percent this summer com- pared with last summer, according to the forecast. For the year, gasoline is projected to average $3.87 a gallon, implying an average annual household expendi- ture of $3,410, up $250 from 2011, the Energy Depart- ment said. Oil prices have been trending upward on fresh signs of a strengthening economy. Analysts point to signs of strength in China, the world’s second-largest economy, where the central bank reported a surpris- ing jump in new loans. U.S. businesses also have sold more goods abroad, push- ing exports to an all-time high. And the Fed has said it will keep interest rates low into 2014 as the econo- my recovers. U.S. retail gasoline pric- es continue to slide, losing nearly 3 cents in the past week to a national average of $3.91 per gallon, according to AAA, Wright Express and the Oil Price Information Service. While the relent- less rise in pump prices has paused, forecasters — including those at the Ener- gy Information Administra- tion — said the average for gasoline could still top the $4 mark over the next sev- eral weeks. By Nancy Rivera Brooks Los Angeles Times The highest monthly average is expected to be $4.01 in May, the agen- cy said, putting the chance of a $4 average in June at 40 percent. LET US TAKE AWAY THE HASSLE OF SELLING YOUR VEHICLE. STOP BY OR CALL 850-277-2600 Business Hours Open Monday thru Saturday 9am-7pm TD-0000204446 3959 Thomasville Rd • Tallahassee, Florida 32308 www.maclaymotors.org A/C, Tilt Wheel, AM/FM Radio, PW, PS. ‘05 JEEP Liberty $11,490 888888888 Maclay Motors A/C, Alloy Wheels, PB, V8, Tilt Wheel, PW, PDL, Leather Seats, Cruise, PS. ‘91 CHEVROLET Corvette $11,990 888888888 Maclay Motors A/C, AM/FM Radio, Auto. ‘07 JEEP Wrangler $19,990 888888888 Maclay Motors PS. ‘04 FORD F-250 $18,590 888888888 Maclay Motors 3.4l V6, Tilt-Adjustable Steering Wheel, PW, Cruise. ‘08 PONTIAC Torrent $15,990 888888888 Maclay Motors Tilt Wheel, AM/FM radio, PS. ‘04 JEEP Wrangler $13,990 888888888 Maclay Motors Tilt-Adjustable Steering Wheel, PW, PDL, Cruise, PS. ‘06 CHRYSLER Town & Country $9,990 888888888 Maclay Motors V8, Tilt Wheel, PW, PDL, Cruise, PS. ‘93 FORD Mustang $8,990 888888888 Maclay Motors A/C, Tilt Wheel, Pwr Sunroof, PW, PDL, Cruise, PS. ‘00 MERCEDES- BENZ M-Class $7,990 888888888 Maclay Motors A/C, Alloy Wheels, PB, Tilt Wheel, Pwr Sunroof, PW, PDL, Leather Seats, Cruise. ‘98 CHRYSLER Sebring $4,990 888888888 Maclay Motors A/C, Tilt Wheel, PDL, Leather Seats, Cruise, PS. ‘02 CHEVROLET Silverado 1500 $11,990 888888888 Maclay Motors A/C, AM/FM Radio, PS. ‘04 NISSAN Xterra $11,990 888888888 Maclay Motors FEA A A A A A A A A A A A A A T T T T T T T T T T T T T TU U U U U U U U U U U U UR R R R R R R R R R R R R R RI I IN N N NG We Sell Cars on Consignment! Forsythe W a y Forsythe Way Maclay Rd. 61 319 Alfred B. Maclay Gardens Thomasville Rd. Thomasville Rd. Maclay Motors
Transcript
Monday, April 16, 2012 For Advertising Information Contact Your Local Cars.Com On-The-Move Sales Team at 599-2329
Summer gas prices set to rise 6.3 percent over 2011LOS ANGELES—Although
gas prices have been easing lately, the Energy Depart-ment has predicted that U.S. motorists will be shelling out an average of 24 cents a gal-lon more for gasoline dur-ing the peak summer driv-ing season, defined as April through September.
Peak prices will aver-age $3.95 for a gallon of regular gasoline, up 6.3 percent, or 24 cents, from last year’s April-Septem-
ber driving season, accord-ing to the agency’s monthly Short-Term Energy Outlook. That represents an increase from last month’s peak sea-son prediction of a $3.295 average.
The highest monthly aver-age is expected to be $4.01 in May, the agency said, put-ting the chance of a $4 aver-age in June at 40 percent.
Gasoline prices will vary widely by region, with the West Coast leading the way at an average of $4.20 for the peak season.
Gasoline prices have been rising primarily because crude oil prices are up, but refinery closures in the Northeast are contribut-ing, the Energy Depart-ment said.
All of this pump-price pain is expected to reduce
gasoline consumption by 0.5 percent this summer com-pared with last summer, according to the forecast.
For the year, gasoline is projected to average $3.87 a gallon, implying an average annual household expendi-ture of $3,410, up $250 from
2011, the Energy Depart-ment said.
Oil prices have been trending upward on fresh signs of a strengthening economy. Analysts point to signs of strength in China, the world’s second-largest economy, where the central bank reported a surpris-ing jump in new loans. U.S. businesses also have sold more goods abroad, push-ing exports to an all-time high. And the Fed has said it will keep interest rates low into 2014 as the econo-
my recovers.U.S. retail gasoline pric-
es continue to slide, losing nearly 3 cents in the past week to a national average of $3.91 per gallon, according to AAA, Wright Express and the Oil Price Information Service. While the relent-less rise in pump prices has paused, forecasters — including those at the Ener-gy Information Administra-tion — said the average for gasoline could still top the $4 mark over the next sev-eral weeks.
By Nancy Rivera BrooksLos Angeles Times
The highest monthly average is expected to be $4.01 in May, the agen-cy said, putting the chance of a $4 average in June at 40 percent.
LET US TAKE AWAY THE HASSLEOF SELLING YOUR VEHICLE.
Reinvention under way for MKZDETROIT — The new 2013
Lincoln MKZ will have a vari-ety of engine choices, includ-ing at least one hybrid.
The car will launch initial-ly with just EcoBoost gaso-line engines, said Ford CEO Alan Mulally.
But “there will be a hybrid in the family,” said Chief Financial Officer Lew-is Booth.
With the same pains Ford took to make sure the Lincoln midsize sedan looks different from the new Ford Fusion midsize car, the automaker promises the cars will be different under the hood as well.
“The reinvention is under way,” Jim Farley, global head of sales and marketing, said at the recent global debut of a concept that is based on the production model that will go on sale this fall.
Because the design of the production model was fin-
ished before the concept was finalized, little imagination is needed to envision what the final product will look like.
Door handles must be add-ed, the side mirrors will be larger and the production MKZ will be a five-seater whereas the concept has only four seats.
The MKZ could share some 4-cylinder EcoBoost engines with the Fusion but they can be calibrated to change everything from noise control to the suspen-sion system and electronic throttle control, said Scott Tobin, vehicle line direc-tor.
But the vision is for option-al engines with unique dis-placements.
While the Fusion will be sold with a choice of three gasoline engines, a hybrid and a plug-on hybrid, the MKZ will only have gasoline and a single hybrid option.
But if there is a demand for a Lincoln plug-in, the auto-
maker could do it, said Scott Tobin, vehicle line director.
The MKZ is also expect-ed to have an 8-speed auto-matic transmission, continu-ously controlled damping to adjust the suspension to the drive and a host of other new technologies.
Farley would not say if Ford will continue the prac-tice of offering a Lincoln hybrid for the same price as the gasoline version but said that current practice is prov-ing very successful.
“The MKZ is the flag bear-er from a volume and image standpoint,” said Michael Robinet, managing director of IHS Automotive Consult-ing in Northville, Mich. Cadil-lac also started its current renaissance with the mid-size CTS.
“You start at the core of the market and expand out,” Robinet said
Lincoln’s resurgence starts with the high-volume MKZ and will end with the MKS
full-size sedan which just received a freshening to tide it over for a couple years.
Mulally said the company is planning a full marketing push for Lincoln to promote the MKZ as the volume leader for the brand going forward. “It will pull everyone into the family.”
Ford has promised seven new or significantly updat-ed vehicles for Lincoln by 2014.
After a series of bland designs for Lincoln, the new MKZ “is so striking it will cause people to aspire to own a Lincoln again,” said Dave Sullivan, product ana-lyst with AutoPacific in Ann Arbor, Mich.
“We spent time working on the vehicle to get it right,” said C.J. O’Donnell, head of Lincoln marketing and the first member of the Lincoln team created in 2010.
“The first steps for Lin-coln have to be exactly right,” he said.
By Alisa PriddleDetroit Free Press
Romain BlanquaRt/DetRoit FRee PRess/mCt
The Lincoln MKZ concept is unveiled Jan. 10 at the North American International Auto Show at Cobo Center in Detroit.
LOS ANGELES — Child safety seats are difficult to properly install in cars, according to an insurance industry research group, because of the design of most passenger seats.
Joint research conduct-ed by the Insurance Insti-tute for Highway Safety and the University of Michigan Transportation Research Institute found that just 21 of 98 top-selling 2010 and 2011 model year vehi-cles have seat designs that are easy to use with child restraints.
The low percentage was notable, considering that the auto industry is using a sys-tem called Lower Anchors and Tethers for Children, or LATCH, that was intended to make it easier to install the safety seats.
The problem, accord-ing to the insurance trade group, is that the manufac-turers haven’t paid enough attention to how the LATCH system works when design-ing passenger seats.
“Installing a child restraint isn’t always as simple as a couple of clicks and you’re done,” said Anne McCartt, the insur-ance institute’s senior vice president for research and one of the report’s authors. “Sometimes parents blame themselves when they struggle with LATCH, but oftentimes the prob-lem lies with the vehicle, not the user.”
The vehicles were test-ed by 36 volunteers, each of whom was asked to install three styles of child restraints in three vehicles. All the participants use child seats in their own vehicles. If they had questions about how to install the seats, they
could consult owners’ man-uals but received no other assistance.
Only 13 percent of the volunteers installed seats with lower anchors and top tethers to get a tight, secure fit at the right angle, according to the insurance group.
The researchers found that the lower anchors used to attach the restraint sys-tems were often set too deep in the seats to be easily accessible. Lower anchors — metal tabs that are used to secure the child seat to the vehicle — were visible in 36 of the 98 study vehi-cles. Researchers also found that seat belt buckles, bol-stering and other upholstery features hindered proper securing of the restraint system.
Finally, the designs of the passenger seats sometimes required those installing the restraints to make too big an effort — judged as using more than 40 pounds of force — to properly attach child seat hardware to the lower anchors.
“These are things that automakers can do to improve child restraint installations, and most of them aren’t hard,” McCartt said. “Lower anchors can be designed so they are easy to use.”
By Jerry HirschLos Angeles Times
Car design hinders use of child safety seats, report says
“Installing a child restraint isn’t always as simple as a cou-ple of clicks and you’re done.”Anne MccArttsenior vice president for research, Insurance Institute for Highway Safety
Nissan to woo more US car buyersDETROIT — Mention Nis-
san to most car drivers and they think of the Altima. And not much else.
The sedan is America’s second-best selling car and Nissan’s top seller by far. When the new version goes on sale in July, it will likely be a hit.
But Nissan’s other models — such as the Sentra small car and the boxy Cube — are struggling to win buy-ers, even as auto sales surge. They’re old, inefficient, or just plain odd. And their designs are inconsistent, which keeps customers from sticking with the brand when they move up or down a car size. That’s making it hard for Nissan to hang on to cus-tomers or woo new ones in the U.S.
Nissan is hoping to win over U.S. buyers with some new models in key segments. In addition to the Altima, Nis-san will roll out new ver-sions of the Versa hatchback, Sentra, and Pathfinder and Rogue SUVs over the next 15 months. The company promises more emphasis on fuel economy, more lux-urious interiors, handsome and consistent styling and updated dashboard technol-ogy. The new Pathfinder, for example, will be lighter and nimbler, which will improve fuel economy and make it a smoother ride.
The new vehicles should help Nissan step out of the shadow of its Japanese com-petitors, Toyota and Honda, who have outsold Nissan in the U.S. nearly every year since the late 1980s. Toyota’s Camry, the best-selling car in the U.S., bested the Altima by 40,000 vehicles last year, and Toyota commanded a 14 per-cent share of the U.S. market in the first three months of this year compared with 9 percent for Nissan. Nissan outsold Honda by 2,000 cars in that time, but to do that it
resorted to some of its worst habits, including high incen-tive spending and low-profit sales to rental fleets.
Nissan lost U.S. custom-ers in the 1990s, when it was faltering financially and pro-ducing bland cars. CEO Car-los Ghosn brought the com-pany back to profitability in the early 2000s, after join-ing forces with French car-maker Renault S.A. in 1999 and embarking on a multi-year restructuring. Ghosn’s feat is so celebrated in Japan that he is the hero of a comic book series there.
The profits have let Nissan invest in innovative prod-ucts like the Nissan Leaf, which was the first all-elec-tric car sold in the U.S., and the Murano CrossCabriolet, which is the only convertible
SUV on the market.
US part of the planBut Ghosn wants more. He
says Nissan’s improved qual-ity and broad lineup justifies a 10-percent share of the U.S. market. That would require Nissan to sell up to 400,000 more cars and trucks than the 1 million it sold last year. Increasing U.S. sales is part of Ghosn’s plan to command 8 percent of worldwide mar-ket share by 2016, up from 6 percent in 2011. The cur-rent leader, General Motors Co., holds an 11.9 percent share.
More marketing will help. One of the highest-profile efforts will be the opening next month of a seven-story Nissan and Infiniti dealer-ship in San Francisco, which
was designed as a regional hub for people interested in the Leaf and future electric cars.
The new products will also help. The Altima is expected to get 38 miles per gallon on the highway, up 20 percent from the old model and the best fuel economy of any gas-powered midsize car. It has a sharper exterior and more luxurious interior. It also features a new hands-free system that connects to the driver’s smartphone and new safety features like blind spot and backup warn-ing systems. At $21,500, it starts at just $1,000 more than the outgoing Altima.
The sedan has been Nis-san’s best-selling vehicle for at least a dozen years. But Edmunds.com analyst
Jessica Caldwell says the company’s reliance on the Altima, when it has 19 oth-er vehicles in its lineup, is a definite weakness.
Altima sales totaled 268,981 last year, or nearly one out of every three cars Nissan sold. The company’s next best-seller, the Rogue small SUV, sold 124,543.
“A car company’s sales should not ebb and flow based on the success of one model,” Caldwell says.
Beyond boringTo succeed beyond the
Altima, Nissan must strike a careful balance. The brand must appeal to more main-stream buyers while con-tinuing to please fans of its quirkier models, such as the Cube, which looks like a melt-
ing Jeep Wrangler, or the Juke, whose threatening top is paired with bulbous, frog-like wheels.
“I had no interest in buy-ing boringly styled cars,” says Beth Thompson, 45, a corporate trainer from Princ-eton, Mass., who is thrilled with the Juke’s edgy design and peppy ride.
Quirky designs can work on small-volume, niche prod-ucts like the Cube, which sold just over 2,000 in the first quarter. But IHS Automo-tive analyst Rebecca Lind-land says she thinks Nissan’s aggressive styling has hurt sales on vehicles that attract more conservative buyers. Take the family minivan: Sales of Toyota’s Sienna are five times those of Nis-san’s angular, tough-looking Quest.
“They push the envelope on products where people real-ly don’t want the envelope pushed,” Lindland says.
Another issue, Lindland says, is that Nissan lacks a consistent design, so even fans of the Juke can’t find another Nissan product that resembles it. Other automak-ers, like Ford or BMW, have a consistent look. The driver of a Ford car, such as a Fusion, will be drawn to the similar grille and look of the Ford Explorer when it’s time to buy a larger vehicle.
Scott Shirley, the chief marketing manager for Nis-san in North America, says the new products will make Nissan’s lineup work together better in buyers’ eyes.
“There will be no weak-nesses,” he says. “Histori-cally we haven’t been as con-sistent or focused.”
Nissan has been selling cars in the U.S. since 1958, the same year as Toyota and 12 years before Honda. The company sold small cars under the Datsun brand until the mid-1980s, win-ning customers with sporty yet economical models like
By Dee-Ann DurbinThe Associated Press
Kathleen GalliGan/Detroit Free Press/MCt
Nissan displays the Nissan Pathfinder concept at the North American International Auto Show on Jan. 10 at Cobo Center in Detroit, Michigan.
the 240Z. Nissan-badged cars like the Maxima were hits in the early 1990s, but as the company floundered financially, so did its prod-ucts. From 1997 to 2002, Nissan stopped selling its Z sports cars here while it focused on trucks and big SUVs. That hurt its reputa-tion for sportiness, says Jack Nerad, editorial director of Kelley Blue Book.
Nissan’s luxury Infiniti division has struggled to get noticed, too, in the hotly con-tested luxury market. Infini-ti sales fell 6 percent in the first quarter. Nissan plans a similar product offensive to boost that brand, starting with the Infiniti JX three-row crossover this spring.
A new confidenceRick Berry, a Nissan deal-
er in Holbrook, Ariz., says he can’t wait to acquire the new Altima, which he thinks will win buyers with its improved interior and luxurious styl-ing. Berry says Nissan has a history of relying on deals — and not great cars — to sell its products. But the new cars are changing that, he says, and making the com-pany more confident.
At the New York Auto Show on Wednesday, Ghosn said Nissan has consistently gained market U.S. market share for the last six years, despite economic turmoil and last year’s earthquake and tsunami in Japan.
“The progress demon-strates that Nissan can sus-tain significant growth for long periods through many obstacles,” he said.
Still, Nissan relies far more heavily on incentives than its Japanese rivals. Nissan’s incentive spend-ing jumped above $2,000 per vehicle in 2006 and has nev-er gone back down, accord-ing to auto information site Edmunds.com. Nissan spent an estimated $2,459 per vehi-cle on incentives in March, or $300 more than the indus-try average. By comparison, Honda spent $954.
Poll: Auto rescues helped economyDETROIT — The public
is far more supportive of the auto industry bailouts than the government’s decision to bail out distressed finan-cial giants in 2009, accord-ing to a Harris poll released April 9.
About 45 percent of those polled said the federal gov-ernment’s decision to extend more than $77 billion in emer-gency loans and bankruptcy financing to General Motors and Chrysler in 2009 “helped” the economy, according to the online poll conducted by market research firm Harris
Interactive between March 12 and 19. Harris surveyed 2,451 adults and found that about 29 percent of Americans say the auto bailouts “hurt” the economy. About 5 percent were unsure.
The bailouts have gener-ated fierce debate in the presi-dential campaign. President Barack Obama has cited the auto industry’s return to prof-itability and hiring as proof of the bailouts’ success. Repub-lican contenders, led by likely nominee Mitt Romney, have criticized the bailouts.
“These findings suggest that the 2008 and 2009 bail-outs may provide some useful political ammunition in the
presidential and congressio-nal election campaigns,” Har-ris said in a statement.
Some 23 percent of Amer-icans say the bank bailouts helped the economy, while 48 percent said the bailouts hurt the economy and 6 per-cent were unsure, according to the poll. About 15 percent of Americans said insurance industry bailouts helped the economy, while 42 percent said they hurt and 9 percent were unsure.
Harris cautioned that word choice can affect how voters view the government’s deci-sions, with “bailout” gener-ating negative opinions and “saving” or “rescuing” pro-
ducing positive thoughts. The Harris Poll referred to the government’s moves as “bail-outs” in questions to respon-dents.
About 59 percent of Demo-crats say the bailouts helped the economy, while 33 percent of Republicans and 48 percent of independents agreed.
The poll also found that the public would oppose addi-tional bailout funds for the auto industry by a margin of 70-30.
The poll comes as GM and Chrysler have returned to sound financial standing. After shedding debt, reduc-ing labor costs and cutting their manufacturing capac-
ity, GM and Chrysler have added thousands of jobs and returned to profitability.
Counterpart Ford Motor, which avoided a bailout and bankruptcy, is also profitable and has added thousands of jobs.
GM reported a profit of $7.6 billion in 2011, while Chrysler posted a $183-mil-lion profit. The auto compa-nies have added thousands of jobs over the last two years as sales surged.
The U.S. government still owns about 26.5 percent of GM stock. Chrysler, now majority-owned by Italian automaker Fiat, has repaid its loans.
By Nathan BomeyDetroit Free Press
Japanese automakers aim to cut costs, develop vehicles faster
TOKYO — Toyota Motor Corp. has announced the intro-duction of a new vehicle devel-opment system that will stan-dardize major auto parts in an effort to cut costs.
The system is intended to develop various models—in particular vehicles aimed at emerging countries—faster and more inexpensively. Nis-san Motor Co. and Germany’s Volkswagen AG are also tak-ing similar steps.
However, such systems can negatively affect auto parts makers and other related com-panies.
Under the Toyota New Glob-al Architecture announced this week, the automaker intends to standardize half its 4,000 to 5,000 major vehicle parts in the next few years. Parts to be standardized include engines and transmissions.
“This will be a way to make better cars,” Toyota President Akio Toyoda said during a press conference at the com-pany’s headquarters in Toyota, Aichi Prefecture.
According to Toyota Exec-utive Vice President Takeshi Uchiyamada, the new frame-work is aimed at “achieving cost cuts and product improve-ment at the same time.”
The automaker will aim to reduce engineering costs by at least 30 percent by stan-dardizing vehicle platforms and conducting research and development of multiple mod-els simultaneously.
Meanwhile, Nissan plans to introduce a system in 2013 in which vehicles will be devel-oped in four modules and designed by combining these modules in different ways. Under this system, 80 percent of Nissan’s vehicle parts will be standardized, up from the current 40 percent, the com-pany said.
The Volkswagen Group is scheduled to release a com-pact car developed under such an engineering system this year.
Toyota said the new system will standardize half of its major auto parts, enabling the parts to be used in different models regardless of vehicle
size. Auto parts and compo-nents are usually developed according to the size of vehi-cles.
The introduction of such new engineering systems is therefore considered a major turning point for the auto industry.
Also behind the moves is stricter environmental regula-tions around the world.
“Costs to improve fuel per-formance and safety mea-sures are expected to more than double in 2015 from 2010. So we’ve been forced to cut development costs,” a Nissan official said.
However, if such systems are introduced widely, auto-makers may no longer pro-cure auto parts from small and midsize companies.
Herbert Hemming, presi-dent of German auto parts maker Bosch Corp.’s Japanese unit, expressed concern over the possible trend at a press conference Monday, saying some parts makers could be forced out of the competition if the race to cut costs inten-sifies.
The Yomiuri Shimbun
Consumer survey: Top car brands’ lead shrinking
LOS ANGELES — The top car brands seem to be losing their importance in the eyes of consumers as competition across the industry heats up.
For years, Toyota, Ford and Honda have been the top names in Consumer Reports’ annual Car-Brand Perception Sur-vey. They are still at the top, but they have seen double-digit drops in their scores. That has narrowed the gap between the top names and middle-of-the-road car brands.
“Dramatic events in the automotive indus-try seem to be affecting how consumers view auto brands,” said Jeff Bartlett, Consumer Reports’ depu-ty editor for autos online. “It is harder for a single brand to stand out among the competitive field.”
Consumer Reports’ 2012 Car-Brand Percep-tion Survey measures how consumers perceive each brand in seven categories:
safety, quality, value, per-formance, environmental-ly friendly/green, design/style, and technology/inno-vation.
The magazine com-bines those factors to calculate a total brand-perception score. The scores are a measure of a brand’s image in con-sumers’ minds but are not meant to reflect issues such as quality, reliabil-ity or results from Con-sumer Reports testing of vehicles.
“Brand perception can be influenced by many things, from profession-al road tests to market-ing. Word of mouth from friends and neighbors can be a slower-moving though influential con-tributor as ownership transitions from the ini-tial honeymoon phase to the seven-year itch,” Bar-tlett said.
As in past years, Toy-ota was ranked at the top for overall brand percep-tion, although it slipped 17 points to 131 points from last year’s results.
Hyundai emerges as contender in USNEW YORK — Americans
were laughing at Hyundai’s cars when John Krafcik joined the company eight years ago.
The cars were ugly and often broke down. The only reason to buy one was because it was cheap. Jay Leno once joked that you could double a Hyundai’s value by filling it up with gas.
No one’s laughing now.The Korean automaker’s
quality has improved, and it’s among the leaders in fuel efficiency and styling. Sales are up more than 60 percent since 2008, the year Krafcik became CEO of American operations. Hyundai’s Elantra compacts and Sonata midsize sedans are in such demand that few discounts are offered. And although the company’s U.S. sales are just a fraction of General Motors’ or Ford’s, they’re growing so quickly that Hyundai is feared by every other carmaker.
Hyundai had already start-ed to change before Krafcik arrived, offering a 10-year, 100,000 mile warranty with its cars. But the transformation from joke to juggernaut accel-erated under his watch.
Krafcik, 50, is a Stanford-trained engineer and manu-facturing expert. He began his career as a manufacturing engineer at a General Motors-Toyota joint venture facto-ry set up so GM could learn how Toyota made cars. While working for the venture in the early 1980s, he saw the gap in standards between Japa-nese and American plants. He has focused on quality ever since.
Despite Hyundai’s turn-around, Krafcik still worries about quality.
“It only takes one small mis-take with a critical part in a safety-related system to derail all of the good work that we’ve done,” he says.
Krafcik, who often wears open-collar shirts, sport coats and jeans, recently spoke with
The Associated Press in New York. He talked about his man-agement style, cup holders and the success of his company, which has its American head-quarters in Costa Mesa, Calif. Here are excerpts, edited for clarity and style:
Q: Your company has made a remarkable turnaround since the early 1990s when it sold inexpensive cars that fell apart. How did you make the transformation?
A: First you had to build that foundation of quality and con-sumer trust. By the time we got to the late ‘90s, we knew that our quality was good. We knew our reputation was horrible. And the America’s Best Warranty, that 10-year, 100,000-mile powertrain war-ranty, ended up being huge. We were able to take ourselves from about 90,000 units (cars and trucks) per year at the absolute pits of our sales — this was in the late 90s — to 300,000 and 400,000 within four or five years.
Q: That was a bet-the-com-pany move?
A: It was an absolute bet-the-company move. If we had gotten that one wrong, then the company would have failed. And rather quickly, too, as the warranty expense and exposure are significant when you’re taking a bath that big.
Q: Hyundai has pushed the envelope in its car designs, and other companies are just now catching up with the Elan-tra and Sonata. How did you pull that off?
A: It just takes courage and a willingness to take risks. So with Sonata, the conventional orthodoxy in the industry was midsize cars should be styled con-servatively. This is typical market research talking. We know this because we talk to our midsize car buyers all the time. Here’s what they say: ‘Safety. Quality. I want a good value and a fair price.’ And about number seven or eight on the pecking order is design. From that mentality has come the point of view
that midsize cars should look like (Toyota) Camrys and (Honda) Accords and (Chev-rolet) Malibus.
Q: Why would you take a risk on design when it was conventional wisdom not to?
A: Products starting with the ‘05 Tucson and the ‘06 Sonata were designed in a safe and conservative man-ner. It didn’t move the nee-dle in terms of sales. You go through that and you finally see the pattern. You can’t just accept safe. So now when we do our research, we catego-rize people before they come (in) as either conservative or progressive in their design thought. And we can then weight the results. It gives more weight to what we call design progressives.
Q: What else happens in your market research?
A: We’ll send a couple of product planners and market researchers out with consum-ers and just literally spend a day or two with them, looking at their cars. Seeing how they live their lives around their cars. When they go to Costco, where do they put those big, huge things of toilet paper? It gives us insights. We’re try-ing to find what we call unmet needs.
Q: What are Americans looking for in cars now?
A: Fuel economy is definite-ly on their mind. It’s huge. As fuel prices go up, interest in the compact car segment goes up. So compact cars now are selling very, very well. Fuel-efficient cars are selling very,
very well. We’re seeing more discretionary car purchas-es now. More car purchases that aren’t driven specifically because my car is old or my car is fuel inefficient.
Q: What’s something that has surprised you about how people use their cars?
A: The car as personal living space. It’s amazing how much stuff people car-ry around. Finding room for people’s stuff is one of our priority focal points. Let me give you a great example. Cup holders and bottle hold-ers. This is a great success for Hyundai, and it took some time to convince the engi-neers that this is what we needed to do (because) cup holders cost money. If you’re going to do them right, they
have little gripper fingers and you have to make more expensive molds and stuff. Engineers never understand why a driver would need two cup holders and the front seat passenger would also need two cup holders.
Q: What could derail your sales growth?
A: It only takes one small mistake with a critical part in a safety-related system to derail all of the good work that we’re done. So we’re being so careful and cautious, putting in quality operating systems and insuring that everything is working with them. We need to get to this point of tier-one quality in everything we do. But we’re not there yet.
By TOM KRISHERThe Associated Press
Andre J. JAckson/detroit Free Press/Mct
Sung Hyun Park, president, Hyundai R&D Division, shakes the hand of John Krafcik, CEO of Hyundai of North America, after the Hyundai Elantra was awarded the Car of the Year award at the North American International Auto Show at Cobo Center in Detroit, on Jan. 9.
Q: What in Detroit’s corpo-rate cultures caused them to get into trouble and what did you learn from being there?
A: Hyundai’s culture is something refreshing. This idea that bold targets drive great things. (It) just stretch-es your boundaries, your mind and your team in ways that you wouldn’t otherwise have stretched and achieved. Working at GM, Toyota, and Ford, the approach was more focused on, ‘Let’s set targets that we’re fairly confident of being able to get to.” That’s OK, but the outlook is decid-edly less optimistic in a com-pany like that.
Q: How would you describe your management style?
A: My job is to set some aspirational targets and con-tinually communicate those targets. I believe in repetition of message.
Q: Is the auto industry becoming cool to work for again?
A: I would say so. There’s no industry cooler, no indus-try more complicated and more important to industrial economies. It’s always been a sore point for me that the industry has had a bit of a black eye. That people would think of us as not being quick on our feet, and not being responsive to consumer needs. And maybe, honestly, some of that has been true. But what we’ve been through in the last couple of years has gotten rid of a lot of old bad habits. I see the industry now stronger, more vibrant than it’s ever been. I do see us recruiting a lot of really smart people.
Q: Who are your mentors?A: Maybe the most influen-
tial guy was a fellow named Yoshimitsu Ogihara. He was a Toyota guy. He would teach like this: He would say ‘OK, John-san. I want to send you to Oklahoma City GM plant. You go there. Make one-page, Toyota-style report. And come back.’ And I’d say, ‘OK, Ogi-hara-san. What do you want me to look for?’
‘You will see.’So I go there. It was this
big place. Huge piles of inventory in cardboard box-es. People sleeping in those cardboard boxes. Massive parking lots filled with cars with parts missing. And the windshield wiper in the up position, which I later learned meant this car needed to be repaired. Every car in that huge lot, thousands of them, had their windshield wiper up. I remember writing this one-page report, just kind of detailing what I saw.
I said, ‘What do you think?’ He said, ‘OK. Now I need to send you to Toyota City.’ (the Corolla factory)
It was amazing. You could see from one end of the plant to the other. Every bit of floor space had a visual indica-tion of what it was for. The workers were working, but not crazy hard. No one was sleeping in cardboard box-es. I came back and wrote this one-page report. This was 1984, and no one really knew at the time that there was this big, huge difference between the way one com-pany built cars and another company built cars. And I was a 23-year-old kid and I suddenly knew. So I worked there another couple years under Ogihara-san. He taught me so much but nev-er through saying it.
Q: What was so effective about that approach?
A: You owned it. You just discovered it with your own eyes.
Q: How do you use that in management today?
A: I like to leave a cookie trail to the right answer. I find sometimes you can bring a horse to water but you can’t always get it to drink. But I don’t like to say, ‘Look, this is how we should do it.’ I like to provide some approach that helps the team that’s think-ing about the problem get to that answer. And when they get there, I might say some-thing like, ‘That’s terrific. I was hoping you’d end up there. What a great solution.’ It’s hard, though, when the team doesn’t get to where you want it to go. And then you have a difficult decision to make. Do you enforce your will or do you let the team learn from their approach?
HyundaiFrom Page 6
Federal regulators propose brake-override systems in all cars
WASHINGTON — More than 2 ½ years after the fatal crash of a Lexus in suburban San Diego led to the recall of millions of Toy-ota vehicles, federal regula-tors are taking their most significant step to prevent future vehicles from accel-erating out of control.
The National Highway Traffic Safety Adminis-tration formally proposed a requirement Thursday that automakers include a brake-throttle override system in all their passen-ger cars and light trucks to help drivers regain control when a vehicle accelerates suddenly.
The move came after the fiery 2009 Lexus crash and subsequent Los Ange-les Times stories triggered a flood of complaints about sudden acceleration in Toy-ota Motor Corp. vehicles. Lexus is a Toyota brand. The complaints led to high-profile congressional hear-ings and calls for tougher federal regulations.
Since then, Toyota has made a brake-override sys-tem standard, and most oth-er automakers offer such a system on many of their vehicles or are adding it.
Still, federal officials said they wanted to make sure every car or light truck sold in the U.S. came equipped with a system that allows drivers to stop the vehi-cle even when a throttle is stuck or jammed.
“America’s drivers should feel confident that any time they get behind the wheel they can easily maintain control of their vehicles — especially in the event of an emergency,” Transporta-tion Secretary Ray LaHood said. “By updating our safe-ty standards, we’re helping give drivers peace of mind
that their brakes will work even if the gas pedal is stuck down while the driver is try-ing to brake.”
Automakers would have about two years to comply once the proposal becomes final, which is expected. Some automakers might need to change their sys-tems to comply with the new regulations. But the pro-posal said there should be minimal cost to the indus-try to implement the new requirement because almost all 2012 light vehicles sold in the U.S. have a brake-override system.
“We have long been in favor of brake override,” said Clarence Ditlow, execu-tive director for the Center for Auto Safety. “But the devil is in the details. ... You have to say that everyone has a good brake override that won’t malfunction.”
Toyota said it was the first full-line automaker — one that sells cars, trucks and SUVs — to make a brake-override system stan-dard, implementing it in all vehicles the company sold by the end of 2010.
The system allows driv-ers to stop a vehicle if there is physical entrapment of the pedal or jamming of the throttle, Toyota spokes-man Mike Michels said. Entrapment was the sus-pected cause of the deadly Lexus crash.
A 60-day public com-ment will begin soon on the 98-page proposal. The Alli-ance of Automobile Man-ufacturers, which repre-sents Toyota, Ford Motor Co., General Motors Co., Chrysler Group and eight other large automakers, said it was reviewing the proposal. The group said it has supported making brake-override systems standard since 2010.
Michels noted that brake override is not completely
fail-safe because there are times when a driver needs to use both the brake and the throttle.
“It’s important to note that if the foot is first on the brake and the accelerator is then applied, the engine will accelerate. This is, of course, to permit drivers to hold a car on a steep hill using both feet,” Michels said.
But if the accelerator is applied first and the brake is then depressed, the over-ride will kick in.
Investigators believe that the Lexus ES 350 crashed after a floor mat was improperly installed and may have trapped the accelerator pedal, causing the vehicle to race down a highway outside San Diego at more than 100 miles per hour. The car crashed and burst into flames, killing off-duty California High-way Patrol Officer Mark Saylor and three members of his family.
That crash led to a recall of 3.8 million Toyota and Lexus vehicles to fix the floor mat problem. After a Los Angeles Times series of stories on sudden unin-tended acceleration, Toyota issued millions more recall notices to fix sticking gas
pedals and other issues. Safety officials believe
that brake-override sys-tems, in which the applica-tion of the brake pedal by the driver would instantly disengage a stuck throttle, can prevent such crashes.
“We learned as part of the comprehensive NASA and NHTSA studies of high-speed unintended acceler-ation that brake-override systems could help driv-ers avoid crashes,” NHT-SA Administrator David Strickland said.
“This proposal is one way the agency is helping keep drivers safe and continu-ing to work to reduce the risk of injury from sticky pedals or pedal entrapment issues,” he said.
The systems act as an electronic fail-safe that automatically releases the throttle when a car’s onboard computer sens-es that the brake pedal is depressed. Designed for cars with electronic throt-tle control, which use wires and software rather than mechanical cables to con-nect the gas pedal to the engine, it has been available for nearly a decade.
Some carmakers, includ-ing Nissan, Volkswagen, BMW and Chrysler, have been using brake-override systems for years.
But even if the systems become universal, there’s still some question as to whether they will reduce driver complaints about unintended acceleration.
“This technology is typi-cally raised as a solution to the issue of unintended acceleration. The problem is that the evidence shows this is usually a driver-error issue. In other words, the gas is being applied, not the brakes,” said Jeremy Anwyl, vice chairman of auto information company Edmunds.com.
By Jim Puzzanghera and Jerry HirschLos Angeles Times
“We have long been in favor of brake override. But the devil is in the details. ... You have to say that everyone has a good brake over-ride that won’t malfunction.”ClarenCe Ditlowexecutive director, Center for Auto Safety
