Prius or Pickups?
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Here's one for all those dimbulbs in Washington who think running a car company ain't that hard: If you were in charge of Toyota, would you have halted work this week on the $1.3 billion factory near Tupelo, Mississippi, that was intended to build the new Prius hybrid? After all, the Prius is precisely the sort of fuel-efficient car you've said the Detroit automakers should be building, at labor costs you've said they should be paying.
Except there's one small problem: Sales of the Prius last month were about half the level they were in November 2007. Meantime, helped by deep discounts -- up to $6000 on some 2008 models -- Ford F-150 sales for November were down just 18.5% compared with November last year, while Chevy Silverado sales were down just 22%.
Obviously, the meltdown in the economy accounts for some of the fall-off in Prius sales: Toyota's total volume in November was down 32% as fearful, credit-crunched customers stayed away from dealerships in droves. But the fact that gas in the U.S. now costs, on average, less than half as much as it did in the summer, is undoubtedly having an effect. The 8660 Priuses Toyota sold last month compares starkly with the 21,000-plus it sold in April as gas raced toward the $4/gallon mark. It also compares starkly with the 37,911 F-150s and 29,534 Silverados shifted by Ford and Chevy dealers in November despite frozen credit and swirling rumors of bankruptcy.
The Prius problem highlights the major challenge facing any bailout of the Detroit Three. If Toyota, allegedly the smartest guys in the room when it comes to the auto biz, can't figure out what American consumers want one month to the next (as of a few months back the Tupelo plant was actually slated to build Highlander SUVs) how on earth is Capitol Hill, or any so-called "car czar" for that matter, going to be able to figure out which direction Detroit's salvation lies? Building Prius clones? Or pickups? Which will give us the best chance of getting our loan money paid back?
There's no question gas prices will rise again once the global economy climbs out of the crater and demand for oil picks up. But as of right now, no one has any idea when that might happen and how fast gas prices might rise. Goldman Sachs recently forecast oil would slump to $30 a barrel, but these are the same geniuses who predicted it would hit $200 a barrel earlier this year. So it's anyone's guess, although futures for deliveries beyond 2013 are trading above $75 a barrel.
Against that background, full-size pickup trucks look like they could still be profitable business for a leaner, lower cost, slimmed-down Detroit for a few years yet.
As has been widely reported, it now looks likely President Bush will allow some of the TARP bank bailout funds to be used to throw GM and Chrysler a financial lifeline. The specter of a massive jump in unemployment -- and what that would do to an economy already reeling from a collapse in consumer confidence -- seems to have gotten the attention of even the hardliners in the White House. "If the auto industry goes belly up now," Vice President Dick Cheney told talk show host Rush Limbaugh, "there's a deep concern that would be a major shock to the system." D'oh...
Of course, any money doled out by the White House this week won't solve the problem. All it will do it buy time -- little more than three months -- to leave the freshly minted Obama administration between a rock (letting the Detroit Three fail and dealing with the grim social and economic cost of 12% unemployment within two years) and a hard place (pouring what has been estimated at $75 to $125 billion into creating a retooled Detroit that will almost certainly be composed of fewer companies making fewer vehicles).
President-elect Obama has said he won't let the American auto industry fail. But will he see pickup trucks as part of the solution? Or part of the problem that got Detroit in this mess in the first place.
Toyota announces natural-gas Camry hybrid
The first alternative-fuel car of the 2008 Los Angeles Auto Show has already been announced; Toyota will combine natural-gas and hybrid power in its CNG (compressed natural gas) Camry hybrid concept. (Camry SE shown.)
While natural-gas cars get roughly equivalent fuel economy as those powered by gasoline, the key difference is that emissions are cleaner. Plus, natural gas is clean-burning and in abundant supply in North America. However, tanks to hold natural gas are very large and hold relatively little fuel. Thus CNG-fueled cars tend to have a fairly modest driving range. And with only about 500 CNG stations nationwide open to consumers, the short range is a big problem. The hybrid system helps alleviate that somewhat. Our gasoline-powered Camry Hybrid had a range of 600 miles, so if the CNG version has conservatively half the range (roughly the same relationship of the Honda Civic Hybrid compared to the Civic CNG), it would be close to that in most gasoline cars.
In our testing of a gasoline-powered Camry Hybrid, we noted its relatively small trunk, worsened by constrained access resulting from the hybrid-battery cooling systems. With a large CNG tank, the trunk may be tiny. We’ll keep you posted when we see the car next month at the L.A. Auto Show.
For now, the CNG Camry Hybrid is a concept car; Toyota announced no plans to build more of them.
Look for live, daily coverage of the Los Angeles Auto Show starting November 19th.Toyota Doesn't Want You To Think of Venza as a CUV, Will Lower Ground Clearance
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DETROIT - Toyota wanted its new Camry-based Venza to run for Motor Trend's 2009 Car of the Year. Senior editor Ron Kiino compared its ground clearance numbers with other crossovers, and in the end, we Motor Trend editors decided it should compete for this year's Sport/Utility of the Year. Because Toyota wouldn't agree to that, the Venza did not compete at all.
Toyota won't take this disagreement sitting down. It figures the SUV craze is pretty much over, whether gas is $4.25/gal or $2.89/gal. Sales are sliding, when compared with cars, for the huge and growing fleet of crossovers, including Toyota's own three-row Highlanders and RAV4s.
So Toyota will lower the Venza for 2010, only its second model year. (It goes on sale before the end of 2008 as an '09 model.) Based on the Camry sedan, but with some Highlander parts, the Venza's 8.1-in. ground clearance tops the Infiniti EX's (5.7 to 6.5 in.), the Chevy Traverse's (7.2 in.) and the VW Tiguan's (6.9).
It won't be enough to make the Venza a car. The '10 model will be lowered about 0.8 in., so at 7.3, its ground clearance remains in SUV territory. Toyota figures it will give the crossover a more carlike appearance, making it a kind of modern wagon or large D-segment hatchback, two identifiers that haven't moved much metal in the U.S. recently.
Toyota may do this only with the front-drive version of the Venza, as the AWD's hardware may be hard to package at a lower ride height. Even if it's just the FWD version, that's likely to make up a majority of Venza sales. Chevrolet expects to sell about 65% of its new Traverses with FWD, for example. But then, Chevy isn't trying to pass off the Traverse as a car.
To the National Highway Traffic Safety Administration, the '10 Venza will still be a truck -- it doesn't need to meet all eight of NHTSA's criteria to be grouped in with other trucks for Corporate Average Fuel Economy standards. Remember, Chrysler got the PT Cruiser and Dodge Magnum classified as trucks, thanks largely to their flat load floors, to help balance out Hemi Rams and Durangos for CAFE. Optional rear privacy glass is the telltale sign.
Do you think this ploy will help Toyota move the Venza as a car? I don't. It still quacks just like a crossover sport/utility vehicle.
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Toyota to display CNG fueled Camry Hybrid concept
Hybrid vehicles are increasingly becoming mainstream, but so far all of the production units available on the market have used gasoline exclusively as the fuel for the internal combustion engine. Various manufacturers have also shown concept and one-off test hybrid vehicles with diesel and E85 capable flex-fuel engines. One combination we don't recall seeing is a CNG fueled hybrid. Toyota plans to address that oversight at the LA Auto Show in November with a CNG fueled Camry Hybrid. Vehicles running on compressed natural gas are nothing new, although the only one currently offered by a major automaker in the US right now is the Honda Civic GX. Since CNG vehicles have a shorter range, they have primarily been used by fleets with centralized filling stations. Toyota has built this vehicle as part of its wide ranging sustainable mobility strategy. With domestic supplies of CNG being comparatively plentiful, something like a CNG hybrid sedan could be a good option for someone who does most of their driving locally. Combine it with the Phill home fueling station and you'd never have to go to a gas station again. Press release after the break.
