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> On 5/5/05, allen taylor <[log in to unmask]> wrote:
>
> > well. Now when you fly into most cities you can see smog hanging over
> > the city, the coal plants in the Midwest conveniently pipe their
> > emissions high into the sky to that wind currents can carry them to
> > us. So think even if global warming is not an issue should we still be
> > doing these things? I pray that someday i won't have to stand on a
> > mountain peak and look at a smog cloud. I do believe that we are
>

And then I wrote:

>
> I'm an optimist.  I believe that solutions will come into being (if
> the "incentives" are right, and I'm not necessarily talking about
> taxes) that will solve a lot of these things.
>


Are the troubles of US automakers one such sign of optimism?  They
can't sell their parc SUV's as hybrids gain in popularity:

"Just this past week, General Motors Corp. and Ford Motor Co.
underwent the humiliation of seeing their credit ratings reduced by
Standard & Poor's Ratings Services to the status of junk. The reasons
are becoming clear -- the two big companies can't sell much of what
they produce.

The figures compiled by the auto industry research organizations are
pointing this year at what is quickly becoming the white elephant of
the industry -- that erstwhile favorite of the California shopping
mall, the gas- sucking SUV, a highly profitable vehicle that was the
darling of the 1990s but has now become the prime victim of
$3-a-gallon gasoline."

*****************

America's passion for burly SUV fizzles
Showrooms anemic, but customers paying full price for Toyota's hybrid
- Michael Taylor, San Francisco Chronicle Staff Writer
Sunday, May 8, 2005

It's a Saturday morning on San Leandro's Marina Boulevard auto row,
and the big SUVs have been sitting on the lots, waiting for someone to
come in and start that dealer dollar dance that ends up with the
customer slightly bewildered but paying a lot less for that vehicle
than he thought he was going to.

Once in a while, there are takers, although the dealer has to discount
the SUV heavily just to get it moving.

Salvador Sotello, for example, recently paid F.H. Dailey Chevrolet in
San Leandro $41,000 for a new Chevy Tahoe LT (yes, with leather) SUV
that had a sticker price of $58,000. The sale was an anomaly in what
is otherwise a pretty dismal selling season. "It's been pretty quiet,"
saleswoman Crystal Gonzalez said the other day. "Been pretty slow."

At Broadway Ford in Oakland, the grilles of the Mustangs, SUVs and the
lone Thunderbird smile at the passing traffic, but the showroom is
empty, it appears, of customers; several salesmen are in sight. Up at
Albany Ford-Subaru, salesman Myers Howard, sitting a few feet away
from a big Ford pickup truck, says things on the Ford side of the
showroom "are slow." That might be the understatement of the day.

Just this past week, General Motors Corp. and Ford Motor Co. underwent
the humiliation of seeing their credit ratings reduced by Standard &
Poor's Ratings Services to the status of junk. The reasons are
becoming clear -- the two big companies can't sell much of what they
produce.

The figures compiled by the auto industry research organizations are
pointing this year at what is quickly becoming the white elephant of
the industry -- that erstwhile favorite of the California shopping
mall, the gas- sucking SUV, a highly profitable vehicle that was the
darling of the 1990s but has now become the prime victim of
$3-a-gallon gasoline.

Sales of SUVs for the first three months of this year fell by nearly
15 percent from last year at this time, according to Ward's
Automotive, a Michigan firm that studies the industry. Sales of Ford's
Excursion and Expedition SUVs fell about 28 percent. At GM, sales of
the big Chevrolet Suburban were down nearly 30 percent; the Tahoe, a
slightly shorter Suburban, had a 22 percent drop.

Cars of yesteryear

What's happening here? How did these two mighty industrial giants trip
and fall? General Motors, mega-mother of some of America's monster
cars -- the Corvette, the Caddy convertible, the Pontiac GTO, the
slick Oldsmobile and Buick ragtops of the 1950s -- is in such bad
shape that people in the car industry joke openly that Toyota could
buy GM with the cash it has in the bank.

"Why are they not selling cars?" asks Csaba Csere, editor-in-chief of
Car and Driver magazine. "It's an inability to create cars that people
really want to buy. Ultimately, it's a customer-driven market right
now. Sales have been strong, hovering around 17 million units (cars,
SUVs and light trucks) a year. The last five years were the best in
history."

The car market, however, is saturated, Csere said, and "to connect
(with customers), you've got to be producing a vehicle they really
want to buy."

Like the Toyota Prius.

One of the bright, shining lights of an otherwise dismal spring in the
world of car sales is a Toyota showroom, particularly the one on
Shattuck Avenue in Berkeley, where, on Saturday morning, the contrast
with the somnolent Ford showrooms couldn't have been more pronounced.
Just outside the showroom floor, Luba Ross, a Point Richmond woman who
has just picked up her new Prius, a Toyota hybrid that can get as much
as 60 miles per gallon, is sitting in the front seat while salesman
Kiumars Maghsoodi explains the intricacies of how this thing works.

"I wanted it for the environment," she says of her car, "and for the
fuel efficiency." Asked whether she had considered an SUV, she looks
honestly puzzled. "They're too big," she says. "People don't need cars
that size."

Alan Shivers, the dealer's sales manager, says that of the roughly 105
cars he sells each month, 50 to 60 are Priuses. Nationally, Toyota has
already doubled the sale of Priuses in the first three months of this
year over the same period last year, according to Autodata Corp, as
reported by the Associated Press.

The rest of the Berkeley Toyota dealer's sales, Shivers says, run the
gamut of Toyota's line, and like the big American carmakers, Toyota is
suffering when it comes to selling gas guzzlers. Shivers says that in
the past month, he's sold none of the big Sequoia and Land Cruiser
SUVs and only "one or two" 4Runners. Ahh, but it's time for another
Prius. David Burrill, the salesman who specializes in hybrids, is
delivering another new car, this time to Dave and Dale Young, an
Oakland couple in their 60s. Thursday is Dale's 65th birthday, and she
says this is her birthday present to herself and the family. And it
was a hard sell to get her husband to go along.

"I didn't believe in the car," said Dave Young. "She made an
appointment (to see it). Then, after driving it and going over the
car, I couldn't wait to give (Burrill) a check."

Taking it for a spin

On a 15-minute familiarization drive for the Youngs, up in the hills
behind UC Berkeley's football stadium, Burrill points out on the car's
information screen how it recharges its battery while coming downhill,
going from one-third full to full in about five minutes. For a good
part of the journey, the car purrs along on its electric motor.

Burrill says realistic mileage figures are in the area of 46 to 50
mpg, and that the car can easily go more than 400 miles on a tank. A
lot of what has people flocking to the Prius and other hybrids these
days is rising gas prices.

But the problem of why GM and Ford are suffering so much is not just a
question of gas prices -- people who can afford SUVs and pickup trucks
that cost $40,000 or more can usually afford the nearly $3,000 annual
hit at the fuel pump (assuming 14 miles per gallon, driving 14,000
miles a year and paying almost $3 a gallon for gas).

The real problem, experts say, is that the market is rapidly moving
away from the big SUVs, costs for the big companies are far
outstripping revenues, and these and other ills that bedevil the
industry are all coming together at the same time.

"The reality," says David Zoia, editor of Ward's Automotive, "is that
there is a trend away from traditional truck-based SUVs."

Those big SUVs crowding the car lots are essentially pickup trucks
with sumptuous SUV bodies bolted to the truck frames. They may be
luxurious, but they're still trucks, and they bounce like trucks and
suck up gas like trucks.

"The growing market," Zoia says, "is for 'cross-utility vehicles,'
vehicles that are built on car platforms."

These CUVs, as they are called, have been out for a few years and are
clearly more popular than the old SUVs. Think Honda Pilot, Toyota
Highlander (soon to come out with a hybrid version), Lexus RX330, BMW
X5 and, from the domestic market, Ford Escape (already comes in a
hybrid version), Chrysler Pacifica, Saturn Vue and, at the luxury end
of things, the Cadillac SRX.

While there will always be a "hardcore market" for the old-style SUVs,
Zoia says, "You're seeing the non-hardcore SUV audience moving more
into these car-based things. They offer a better ride, and they're
getting the all-wheel- drive they've grown used to in SUVs."

Then, of course, there's the subject of quality, how vehicles are
built, how long they stay glued together before they begin repetitive
journeys to the shop.

The J.D. Power and Associates initial quality survey, released a year
ago, shows Toyota, Honda and Korean manufacturer Hyundai at the top,
but, as Zoia says, "in terms of quality and durability, the gap
(between the various manufacturers) has definitely closed. Toyota and
Honda are still at the top of the pyramid, but GM, Ford and Chrysler
are getting good. The difference is in the things you can see and
feel, the quality of the material, the way the vehicle is designed."

At the San Leandro Hyundai and Kia dealership, used car manager T.C.
Cummings takes a visitor outside and points to the hood of a 2004
Chevrolet Cavalier, a rather nondescript used sedan waiting for a
buyer.

All-important cup holder

He points at the hood, whose nose is skewed about one-third of an inch
to the left. "That's sloppy," he says. He opens the driver's door and
points out the cup holder, which sits in front of the floor-mounted
gearshift. In "Park," the gearshift obscures the cup holder.

"You come out of Starbucks with your big cup, and you can't put it in
the cup holder," he says. "It's the small things that add up. A cup
holder becomes a major thing to a customer. If he can't get to it,
what good is it?"

Zoia agrees. "The import (firms) have had more money to spend. And in
the case of GM, they have had to cut corners. It shows when you get in
the car. Gee, it's nice, but not quite an Audi or Toyota or Honda."

He says the big American carmakers are under such huge financial
pressure -- one exception is DaimlerChrysler, whose Chrysler 300 sedan
and Dodge Magnum wagon are big successes -- that "the brands don't
have marquee value. GM is forced to sell on price."

Customers, he says, will typically ask, "What's the rebate? They're
buying this car because it's a good deal, not necessarily because it
wowed them."

Then, of course, there's the thing that may wow them. Back in the
Toyota showroom in Berkeley, by Saturday evening, sales manager
Shivers says that in the six hours since Ross and the Youngs picked up
their Priuses, the dealership "sold three more, and we took orders for
three more."

One other thing: there are no rebates or discounts on these cars. They
sell for the price on the window sticker: $23,841.

E-mail Michael Taylor at [log in to unmask]

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