Big money for a little car

              Imagine spending 190 million dollars for a small sedan? That is what General Motors Co. plans to spend $190 million in a Michigan plant to build a small sedan for Cadillac. General Motors CEO Dan Akerson is supposed to reveal the news tomorrow at the Lansing Grand River assembly plant. The Lansing State Journal and The Detroit News reported the news today. GM officials and Lansing Mayor Virg Bernero,  the Democratic candidate for Michigan governor, announced the news together. The Cadillac ATS will be marketed below the CTS. CTS will no longer be the smallest Cadillac model. The ATS, a compact luxury coupe, is expected to go on sale as early as the 2012 model year. Speculators say Cadillac may sell coupe and wagon versions of the ATS as well. GM already builds the Cadillac STS sedan and CTS sedan, coupe and wagon at the Lansing factory. The Lansing City Council voted to offer GM about $9.8 million in tax breaks to persuade the company to build a new model at the plant, the State Journal reported. The paper said city officials expect the investment and addition of the ATS sedan to create about 600 jobs at the plant.
    It is a definite perk to investing that much money into a new model of a sadan that the plant provides 600 jobs. If it weren't for the people that are now able to support themselves from this plant, I would think it is a little extreme to waste that much money, time and energy on a model that, personally, doesn't have that much consumer appeal. Only time will tell if GM made the smart investment. 

http://www.autonews.com/apps/pbcs.dll/search?Category=SEARCH&SearchProfile=1250&exclcat=COPY;COPY01;COPY02;VIDEO;HOLD&noblankcheck=1&ProfileName=--%20Chrysler%20brand 

Consumer Reports Says Yay to Some, but Nay to Others

Surprisingly, Ford had the highest-ranked models in the family car segment with their Ford Fusion Hybrid and Ford Fusion V6 models. This vehicle beat the Toyota Camry and Honda Accord, which do not usually lose in this segment. However, Toyota led in five other segments, but scored only an average rating on their popular Prius model. This was a decline from last year. Toyota’s major recall on the brakes of the Prius caused it to score significantly lower than usual.

As the Japanese and most of the American automakers strive to the top of the charts, the European luxury brands were in a different category. BMW, Mercedes-Benz, and Audi performed very poorly. In particular, BMW had five of 11 models ranked below average.

The overall comparison ranked Scion as the best brand and Chrysler as the lowest-ranked brand. Unfortunately, Chrysler has not undated its model line to meet consumer demands and it has not improved like Ford and GM. I expect Chrysler to create even more of a financial deficit than it already has in the future and I am sure that it will run out of business within the next ten to fifteen years. Ford and GM have shown that they are taking the initiative to improve their image and their hard work is paying off. The improving ratings of these two brands has helped shift consumers eyes off of the popular German brands and redirect them to American automakers.

Source: http://online.wsj.com/article/SB10001424052702303341904575576454238670026.html?KEYWORDS=auto+industry

Fuel Efficiency Standards for Trucks

Fuel economy targets have been set for small vehicles, which inclues anything under 8,500 lbs.) for many decades. But now for the first time ever the Obama administration is attempting to set fuel-economy standards on trucks, buses and tractors. The goal they want the Industry to achieve is for all trucks to be 20% more fuel efficient by 2018.

This is such an important issue to address because although trucks over 8,500 lbs. only make up 3% of the vehicle fleet, they consume over 15% of the fuel. For example, a garbage truck takes 5 miles per gallon, while traveling on average 20,000 miles per year...thats means they consume over 3,600 gallons a year! With the implementations of these electric and hydraulic hybrids they are expected to save 1,100gallons of fuel within the first year.

Although it seems that there are only positive consequences to this change, that is not the case. Because of the new technological advances that will be needed to improve the fuel-economy, the expected cost of the improvements come out to 7.7 billion.
in order to bounce-back from this outstanding debt, they will raise the prices significantly to make sure the buyers recover the cost within the first year. The American Truck Dealers Association cautions that this plan will deter many small market buyers from purchasing trucks. But others argue that on average, a truck driver will save 74,000 over the span of a trucks life. These enormous savings should bring back and buyers that may have been in doubt.

At first a higher price tag on trucks, buses, and other heavy vehicles may make buyers question their purchase, but in the end I feel that they will realize that will save money. Before making a purchase they will speak to the sellers and they will eventually understand that they will save the money they would've normally put towards gasoline and spend half of it on the vehicle itself, and just pocket the rest. This idea to up the fuel efficiency standards is a fantastic plan to keep our overall fuel usage down.


http://online.wsj.com/article/SB10001424052702303467004575574251198447096.html?KEYWORDS=all+electric

Problem, Officer?

A study was conducted to see which car models received the most traffic tickets. Quality Planning, a company that analyzes driving statistics for insurance companies, looked through data on 2 million cars. High-performance luxury cars got a lot of tickets. This is probably because these drivers want to test out what these cars can do. Colorful SUVs and compact sporty cars with young drivers also got a lot of tickets. Overall an average of 1 moving violation was found for every 500,000 miles driven. The most ticketed model was the Mercedes SL, which received 4 times more tickets than the average model. Others on the top 10 most ticketed models list include the CLS 63 AMG sedan, the Scion tC, the Acura Integra, and the Toyota Camry Solora convertible. The least ticketed models include bland SUVs, minivans, and average looking cars. While Quality Planning doesn’t have an official conclusion, they suggested that drivers who want to drive fast often buy high-performance cars. This leads to these cars being on the receiving end of speeding tickets.

Some interesting finds in the article that were conducted in separate researches include:
• Out of town drivers who are caught speeding are more likely to pay and pay a higher fee for speeding than drivers from that town.
• Drivers caught speeding in cities with budget deficits were more likely to be handed pricier tickets.
• Young women received 33% less tickets than men, but women over 75 years old got tickets at the same rate as men.

I think it makes sense that luxury cars get more tickets than average cars. I agree that drivers who are riskier and more aggressive tend to drive high-performance cars. Another good reason these flashy cars get more tickets could be that these cars simply get more attention than the average car. A police officer sitting in his car with his radar gun sees cars speeding all the time. A car that triggers his attention is more likely to make him give chase. On the finding that young women get a third less tickets than men, I wonder if this meant women are less likely to speed or women are less likely to get a ticket when they are stopped. If it’s the latter, it would be interesting that police officers have such a bias.

http://online.wsj.com/article/SB10001424052702304510704575562313011143510.html?mod=WSJ_auto_TopRightCarousel_1

Environmental Limits

As we know, many auto makers are trying to produce better fuel efficient vehicles. This is why we have been noticing more hybrid gas-electric vehicles, as well as all-electric vehicles. Auto manufacturers have found that all-electric vehicles help cut greenhouse gases and smog, which is very beneficial to the environment. However, when it comes to hybrid gas-electric vehicles, there is not much of a difference between the two products. It's obvious that electric vehicles have lured in its customers because of "its ability to curb use of fossil fuels, which spew out pollutants including greenhouse gases." Studies have found that "charging an electric car over a 10 year span could be as much as 80% lower than driving a gasoline powered car." With this also comes and economic issue that troubles many individuals, and that is whether or not the battery packs used by plug-in hybrids will be recycled. Right now, there aren't many recycling companies that will take in such large batteries and because of this, GM Co. and Nissan Motor Co. are trying to find ways to give batteries a second life.

I feel as though no matter what the automakers try to come up with to build a more fuel efficient economy, there will always be an opportunity cost. There will be some benefits to their ideas as well as some disadvantages. Some people aren't always going to agree with the products being used because of how harmful it could be to society, such as the batteries not being recycled, but looking long-term, it's evident that using electrical vehicles are still better for out environment. The most important thing is to find ways to reduce greenhouse gases, and as long as that is taking place, there shouldn't be much disagreement with how the auto industry is working.

http://online.wsj.com/article/

Beijing demonstrating power equals halt to BYD Co.

The chinese government ordered BYD Co. to surrender land in a recent zoning dispute. They confiscated approximately 121 acres of land in Xian, a central chinese city.  This caused a slow in chinese national competition in the car battery and auto maker market. BYD was no longer able to build the car plant they were planning on building there next year. China's minestry of land and resources said that the reason for confiscating the land was because the land was illegally adjusted to industrial from agricultural. They also scolded dozens of government officials, and fired the main decision makers who were a part of planning how to build on the land. 


In addition to firing of government officials, they hit BYD with a 295 million yuan plan, which is 442,000 dollars in U.S dollars. Still, an individual close to BYD said the company, one of China's best car brands, might have to look for a different site in Xian to build a third assembly plant. Each existing plant in the city can produce 200,000 cars a year. BYD said Wednesday that its car sales in China last month fell 25% from a year earlier to 33,085 cars, even as China's overall vehicle sales rose 19%. 


I think It would be a shame that BYD, a main player in the Chinese auto industry would be out of the competition because of a mistaken use of land, and a fine. I think this was a little bit extreme of a consequence and I believe they should of approached BYD in a different manner and went into greater detail about why China's ministry of land and resources was taking the land.  I want to follow BYD in the future to see how they recover from this set back. 


http://online.wsj.com/article/SB10001424052748704763904575549793829052072.html?mod=WSJ_auto_IndustryCollection

Solar Cars in my neighborhood? Not for a while

Enough sunlight hits the earth in an hour that it could power the world for one year. In 2008 Louis Palmer drove around the world on a car that uses solar energy as power. In 24 hours he could travel up to 100 kilometers at night. However, these solar powered cars are very bulky and require plenty of sunlight to travel a decent distance. Throughout the years car makers have developed solar cars, but they have never reached the mass market because it is simply too impractical; solar panels just don’t generate enough energy. Currently a square meter of solar panels only get seventy-five percent of a kilo-watt hour per day. This would let you travel 2 miles. Despite these challenges, inventors and auto companies continue to research solar cells. Solar power could be fused with petroleum and electricity, helping shape a tribrid car. For $10,000 extra, the 2010 Toyota Prius can come with a solar roof. The Leaf hybrid car by Nissan can also be made with solar panels. When the day comes when an average car runs on solar energy, the solar panels may be on houses rather than the cars themselves. 10 square meters of solar panels on the roof of a house could power a car for 15,000 miles.

It’s unfortunate that technology isn’t advanced enough for solar panels to generate a respectable amount of energy. I do have hope that in the future that they will, and that would solve the energy crisis the world is going to face. I didn’t know that a Prius could come with solar panels, as that means the car utilizes 3 forms of energy already. I’m glad that auto companies are exploring solar energy as well as other renewable energy sources. With any luck, gas stations will become non-existent in my lifetime. I think one day almost all homes would have solar panels on the roof. It would be amazing if a house could function on its own just from generating energy from sunlight.

http://online.wsj.com/article/SB10001424052748704129204575505803617253926.html?mod=WSJ_auto_IndustryCollection