Mitsubishi gets its mid-term report card

October 30, 2006

Mitsubishi announced its mid-year earnings.  Not surprisingly, they are mediocre. The company actually saw net sales increase to 1,005.4 billion yen from 991.3 billion over the six month timeframe.  Interestingly, though, sales volume was actually lower…so credit favorable exchange rates for revenue increases.   Overall for the period, Mitsubishi had an operating loss of 5.5 billion yen, which sounds bad until one realizes that’s 14.1 billion yen better than this time last year.   

Looks like Mitsubishi is going for the Ford “cut costs” approach to car building.Speaking of Ford, one might say that Ford and GM’s complete lack of direction (and good products) have benefited Mitsubishi.  In North America, Mitsu sold an additional 3,000 units so far this year for a total of 84,000 – roughly the number of Ford Mustangs delivered in six months.  The company’s strongest gains came in the Russian region, where significantly increased demand resulted in 142,000 vehicles.   Evidently, Russians are more at ease with spending money for cars with sketchy reliability!

The most interesting part of the company’s press release was the section dedicated to operational initiatives.   For the American region these include:           

Increase buyer appeal and sales through introduction of the new Outlander and Lancer models
Reinforce sales capabilities via dealer training
Effective advertising focusing on Mitsubishi’s 25 years in the
U.S. market
Enhance sales through effective use of financial service operations
Improve productivity at the
Illinois plant

Many of these we simply cannot argue with.  Improving productivity is huge, as is releasing new products – especially the Outlander, which finally puts the ugly last generation model out to pasture.  Dealer training should be applauded, because it’s often ignored by manufacturers as a point of improvement.  One might say that this should be a number one focus, because the Mitsubishi dealer network is one step above Goodwill for quality of staff. The company, however, appears to be focusing just on sales when dealer service has long been one of the brand’s many Achilles heels.

Mitsubishi should be focusing on increasing quality throughout the company. It all starts with engineering-out the high failure rates of components within the vehicles.  This takes money, time, money, corporate commitment, plus money.  Products can look good, go like stink and be considered prestigious, but if the ownership experience is miserable from start to finish, then the company is doomed to generations of red ink…just ask Jaguar.

And if we read the “effective use of financial service operations” objective correctly, it appears that Mitsubishi will choose deep incentives over building the value of the brand.  Deep discounts might move product, but it isn’t great for long-term profitability.  Heck, it stinks for short-term profitability, as well.At some point Mitsubishi will realize what Mazda finally did: if you put as much effort into your mass-market cars (sedans, coupes, hatches, and crossovers) as you do your niche vehicles (Miata/Evo sports cars,) you can actually sell vehicles without deep discounts.  The profit made with improving sales can then go back into R&D, increasing the quality of product.Plus, as product strength increases across the brand, better employees are attracted to dealerships.  This provides an opportunity to train better-qualified sales and service personnel, which leads to better overall perception of quality.

Of course, they could simply continue to build a fun (yet cheaply built) Evo, an Eclipse that continues to miss its core target, and Galants and Outlanders that looked like the engineers “phoned-it-in” until the company’s value is so low Audi or BMW buys them out.  The company has so much potential — we know we’re not the only ones who see it.


Vehicles to Buy Your Parents When the Inheritance Tax is Repealed

October 26, 2006

fourwheeldriftAutomotive journalists often ponder which cars deserve to be on a list of “best” or “worst” vehicles of all time.  Here’s a different spin:  which models were the most dangerous? 

All relevant accident, death, dismemberment, and other data was thrown into The Four Wheel Drift’s proprietary DataCruncher3000 machine.  Since the DataCruncher3000 was built by the same group that created 1997-2004 Corvette steering column locks, it seized on us…so we’re pulling these ratings out of our bums. 

What we looked at to get our top five: where available — accident, injury and death rates; insurance ratings; historical reports…then we analyzed the way the vehicles were marketed in an attempt to discern if vehicles were safe or dangerous given the intended primary usage in the hands of the largest projected buyer segment.

5. Chevrolet Corvair / Porsche 911 (tie) – What list of dangerous models would be complete without two air-cooled rear mounted engine marvels?  Corvairs through 1964 are the only real offenders, simply because the too-slow steering and swing axle geometry were addressed for 1965.  

As for the Porsche 911, a wheelbase stretch for 1969 helped alleviate the tail-out happiness, as did wider wheels in the 1970s and 1980s.   But in reality it wasn’t until Porsche Stability Management (yaw control) debuted in 1998 that the cars were safe in the untrained hands that tended to buy them.  Heck, they don’t call them “doctor and dentist donors” for nothing. 

In all honesty, while the pre-65 Corvairs were prone to uncontrolled oversteer in even the best hands, the 911 was always very predictable, provided the driver understood the dynamics.  Even in the wet – hit the corner and if the tail starts to wag, counter-steer and hit the gas.  Tragically, American drivers would panic and lift-off the throttle, causing the rear to fly away like a Barry Bonds steroid-induced home run.  

4. Suzuki Samurai – Whoever decided it was a smart idea to make a 65-inch tall vehicle on a sub-80-inch wheelbase should be shot.  The fact that despite a 66 hp engine, the Samurai could still easily achieve speeds at which it was prone to rollovers is a statement of how dangerous that thing was.  In Suzuki’s defense, the Samurai was still statistically much safer than any of the company’s motorcycles. 

3. Mercedes 300SL “Gullwing” – It’s one of the most prized collector car in the world.  The 300SL stands out for many industry firsts – first use of gullwing doors, first true production car to use a complex tubular space frame, and first production car to use fuel injection.  Compared to contemporaries, the 300SL was one hell of a performer. 

The 300SL, however, had a dirty little secret.  The rear swing axle suspension was located in a way that made oversteer almost impossible to control under certain conditions.  Racers usually relocated mounting points to address the concern, but wealthy owners of street cars were generally caught off-guard.   Zsa Zsa Gabor, who rolled her 300SL in the Hollywood Hills, wasn’t the only one to realize that when the 300SL was upside-down, it was impossible to get out!   

2. Ford Explorer  If it were just Firestone’s fault, nobody would have actually died when tires on these SUVs separated.   Due to horrible suspension geometry and a high center of gravity, however, any type of mid-to-high speed disruption resulted in a rollover. 

Profit hungry Ford also knew damn well that in the case of a rollover accident, the Explorer could not withstand its own weight.  Instead of spending some money to ensure the safety of its buyers, Ford continued to sell a vehicle that would most likely kill one of the front seat occupants in a rollover accident when the roof buckled to one side under impact. 

The company knew that the Explorer would roll in accident avoidance maneuvers at speeds above 35 mph, yet they did nothing to remedy the situation.  Call it pure greed, because the Explorer was selling like hot cakes – the most popular SUV in America.  Ford marketed it as a safe family vehicle for daily transportation, when in reality, it was a rollover waiting to happen. 

After the rash of deaths, Ford finally redeveloped the Explorer with independent rear suspension, which helped stability immensely.  Of course, at the same time the company added a third row seat option to maintain competitiveness against larger SUVs.  Considering that the Explorer continues to be identical in size to Honda Accords and Toyota Camrys – how safe does it seem to put loved ones in that third row seat that occupies the same space as a Camry or Accord trunk?  Either the vehicle has a crumple zone in the third row, or it transfers a rear-ender crash energy to all passengers – there’s no way around it! 

Numero Uno — Dodge Viper RT/10 and GTS — How such an amazing sports car can wind up as the number one most dangerous car of all time is a testament to the lack of driving skill of American drivers, as well as the amazing ego of automotive executives.   But here’s the bottom line: in an effort to create the most bad-ass sports car since the Cobra, Chrysler Corp executives brought to market a vehicle so dangerous that it is nearly impossible to find an example that hasn’t been spun into the ditch at least once. 

The first generation RT/10 and GTS were monster sports cars.  Capable of low four-second 0-60 mph dashes and nearly 1g on a skidpad, these snakes would seem to be a great ride for the performance enthusiast.  But here’s where it gets interesting: In making the Viper, Chrysler decided that “purity” came at the cost of safety.  Antilock brakes were not offered for over a decade of production, so reigning in the speed often resulted locking-up the wheels.  Similarly, traction and stability control systems were not available. 

With so much torque on hand, the average driver simply was unqualified to keep the car out of harm’s way on public streets.  BMC Software in Houston, TX bought an RT/10 that was intended to be awarded to the sales person of the quarter as an ongoing incentive.  After the RT/10 was wrecked three times in less than a year (once in the company parking lot,) the car was sold. 

This isn’t an isolated occurrence.  Just yesterday a Viper owner told how her husband rolled their first RT/10 and wrecked the GTS that replaced it.  It was the same story – too much power coming on too fast, and a handling imbalance making the car impossible to catch when the tail violently broke away.  

Even on the track, Vipers have always been too much to handle even by experienced sports car drivers.   Despite high skidpad numbers, Viper racers often find themselves spinning uncontrollably as the cars break loose with vengeance. With some modifications and in the right hands on the suitable track, however, Vipers are perfect production race cars. 

And that’s the problem – Vipers are essentially race cars, but they are marketed and sold to anyone as drive-anywhere production street cars.  It was simply foolish of Chrysler Corp to allow the cars to hit the market without dialing-in more understeer, plus adding ABS, traction control, and eventually stability control to ensure that people didn’t kill themselves.  Bob Lutz wanted to beat Corvette…and he did — at least on this list. 


Mail-order Mania

October 19, 2006

fourwheeldriftIt’s official — you missed your chance to get one of the first 2007 BMW M6 Convertibles.   It took less than two minutes (1:39 to be exact) for all 50 examples available to Neiman Marcus customers to sell out.

Operators began taking orders from the annual Christmas Book at high noon, and BMW’s telling of the tale made it seem like teenage sex– over in a minute.  Evidently, there were more than enough people willing to spend $139,000 to be the first in the country club parking lot with BMW’s first M6 Convertible.

Needless Markup, err Neiman Marcus, has made a tradition of offering special-edition automobiles in its Christmas Book.  Past car offerings included the last-generation Ford Thunderbird.  As always, the cars are offered in one configuration, and in this case, the BMWs could be had in any color you wanted, provided you wanted black.

The M6 Convertible is an impressive vehicle.  The 500 hp V10 enables a 4.6 second 0-60 mph time.  Despite some tremendous girth (somewhere around 4500 pounds,) we hear it handles very well.  We’ve driven the heavier M5 sedan, and while it is no sports car, it is one hell of a great GT.

The question will be when the M6 Convertible hits the open market, will it be able to compete with Aston Martin, Bentley, Porsche, Mercedes AMG models, and other vehicles at this price point?   BMW’s sweet spot has been $50,000 cars.  The number of six-figure-priced models have been limited to the 12-cylinder 7 Series and the short-lived Z8 — both produced in very small numbers.  Even though they sold out quickly, that isn’t a predictor of long-term success.  Within two years the Ford Thunderbird had a 120-day supply of inventory rotting on dealer lots.

Excuse us if we weren’t one of the 50 to call and order.  It’s a policy around here never to pay an ego tax (the mark-up people pay to get a new car model.)  Hopefully the deep-pocketed people who did pay will enjoy their new Christmas Book M6 Convertibles.  We’ll be shopping for more reasonably priced items for the holidays… 

Come to think of it — it isn’t even Halloween yet.  It’s too damn early to be talking about Christmas.


Hit the Brakes, the Economy is Slowing!!!

October 16, 2006

fourwheeldriftI was channel surfing when I heard Fox News air a short segment on how speeding ticket infractions increase when local budgets fall on hard times.   If you’re curious, the story fell between calling Bush a hero for his Iraq policy and blaming the entire Mark Foley scandal on Democrats.  

The report cited a new study by the Federal Government that analyzed local governments in one US state.  The study showed that for every one-percent decrease in local tax revenues, moving violations increased by .38 percent.

Interestingly, when tax revenues increased with a positive economy, the amount of tickets didn’t increase.

The study normalized for factors such as population growth and changes in roads and commuting patterns.  It also established that the areas studied had absolutely no policy or request, formal or unofficial, by local elected leaders or policial sherrifs to offset declining revenues with increased tickets.

What is not immediately evident is if the number of tickets increased without an increase in “pull-overs,” or if the pull-overs increased as well.  In addition, the report didn’t specify if the average speed of infractions increased.

The Four Wheel Drift will go out on a limb and predict that there are two factors at play.  The first is that police officials do indeed try to boost revenues by issuing more tickets during a down economy, because police departments are often hardest hit by budgeting cuts at the local level.  Even if there is no policy to do so, officers generally perceive that if they write more tickets their precinct’s budget will be positively affected.  Bottom line: more money for the budget equals increased job security.

Secondly, people are certainly worse drivers during an economic downturn.  When the economy slides, people lose jobs, lose houses, become frustrated, drink more, work more for less pay, and generally are more frustrated.  Busy, frantic, upset people make fast, aggressive, crappy drivers.

We’ll try to get our hands on some more of the facts presented in this story.  In the mean time, let’s keep our speed down.  Fox News says the economy is great at all levels, but the four other cable news stations disagree.


Tesla Roadster: The Two Seat Electrical Jam

October 13, 2006

Tesla Roadster

Tesla’s Roadster does 0-60 mph in 3.9 seconds, 135mph and can go 250 miles on $2.50 worth of electricity.  (photo courtesy of Tesla)

 

fourwheeldriftA couple months ago my friend Danny sent me an email regarding the Tesla Roadster.  Danny is a fan of electric vehicles.  I’m a fan of sports cars.  The Tesla, the first electric-powered sports car, seemed to be common ground. Actually, Danny has been trying to find a new electric car worthy of my endorsement as viable in the mass market.  With the Tesla, he thought he had a winner. 

Let me get this out of the way – I think there’s a future for alternate-power vehicles, but the future isn’t here yet.  So many years of greed and low fuel prices pushed R+D to the back burner.  We’re not much further along with electric cars, gas-electric hybrids and other concepts now than Detroit was in 1910. 

I love the Tesla in theory:  a two seat sports car – basically just a Lotus Elise modified to run on Lithium Ion battery packs.  As with any electric motor, the Tesla’s can get to maximum power almost instantly, which translates to zero-to-sixty in under four seconds.  That’s Ferrari, Porsche and Lamborghini supercar territory, folks.  Its 135 mph top speed is more than adequate, plus it’s about twice as fast as any other electric car. 

When talking about electric cars, though, there’s always a catch.  Usually it’s range. Previous attempts at electric cars by other manufacturers have created ranges under 100 miles, which means that people couldn’t take them too far before heading home for an all-night charging session.   Electric car fans get blue in the face spewing facts about that the average driver only commutes under 60 miles per day, but this has done little to sell electric cars.   Mostly it is because consumers can’t justify one car for commuting and another for all trips over 50 miles away from home.

The Tesla can get up to 300 miles on a charge, but the company admits 250 is average.  Full power is restored with just 3.5 hours of charging time.  At current prices, that’s about $2.50 of electricity to go 250 miles.  Pretty sweet. 

Okay, there has to be a catch here.  Most of the major automotive press focus on the price catch – the $100,000 acquisition cost of the Tesla Roadster.  But guess what?  That isn’t it, in my humble opinion.  The real catch that took me a whole three minutes of reading Tesla’s site to find was battery life.  Here’s what the official marketing material says (courtesy of Tesla):

In estimating the life of our batteries, you can multiply the number of cycles by the range. Li-Ion batteries are good for 500 complete charge/discharge cycles. One cycle consists of discharging the pack from 100% state of charge (SOC) to 0% SOC. Realistically, drivers will not completely discharge their pack. More likely, drivers will drive the car for 50 or 100 miles then plug it back in to charge it up to 100% SOC. Driving only 50 miles is only a partial discharge, roughly using 20% of the charge. If a driver continues to drive 50 miles every day and recharges every night, then after 5 days they would complete the equivalent of one charge/discharge cycle.Thus, 500 cycles times 250 miles/charge works out to 125,000 miles, but our estimate is a more conservative 100,000 miles. However the cycle life of 500 cycles is based upon performance that is more challenging to the battery cells than our application. We believe that our pampered batteries will achieve more cycles due to temperature control of the batteries and minimizing the maximum charge voltage.

While the 100,000 mile average seems okay for a battery pack, the 500 cycles is scary when you break down the numbers.  What they are saying is that they expect the battery packs to last anywhere from 1.3 years to 5.2. years.  That’s not good, especially since you can guarantee that the battery packs are a) expensive as a weekend with a Park Avenue call girl and b) not covered by warranty. 

And let’s face it – when has a small manufacturer ever underestimated the life of a part?  If I were a betting man, I’d guess that the battery packs will start fading at 6 months to a maximum life of just over two years.  Certainly a two-year-old battery pack won’t have a 250-mile range.  Just look how long your laptop or cell phone lasts now compared to when you bought it.

Furthermore, unless you live in New York, Chicago, Los Angeles, San Francisco, or Miami, if your Tesla Roadster breaks down, you’ll have to ship it at your cost to one of these cities for repair.  Given that the last time I had a car shipped from Ohio to Washington it took a month, I’d expect that every time a Tesla breaks, it’ll be off the road for a long time.

If you think I’m saying I think the Tesla is a bad car, you’ve misunderstood me.  I think that it’s an amazing car — by far the best electric car ever produced.  I’d love to drive one for a road and track testing session.   From a pure marketing sense, though, it’s a product for the smallest tip of the early adopters – and rich ones at that!  I hope people do buy these cars to prove there is a viable market, which will help induce more manufacturers to dump R+D money into battery technology, which is (and has always been) the Achilles heel of electric cars.  If you have money to burn, go buy one. 


Snake oils, wonder products and other wastes of money

October 11, 2006

fourwheeldriftIt is not surprising that people spend so much hard-earned money on automotive products that seem too good to be true.  After all, GNC and other supplement retailers have made billions of dollars selling junk without any valid statistical studies to support manufacturer claims…and buyers are putting this stuff in their bodies rather than their cars.  (Just because it’s natural doesn’t mean it’s healthy, people.  Benzene, arsenic, cocaine, and E-coli are also one-hundred-percent natural!)   

I get asked all the time about specific automotive improvement products, which means there are many other people out there who need to know whether or not specific things are good, bad or indifferent.

The “Tornado”

Everyone knows this one by now.  You stick it in the air passageway and it creates a twister in your air intake, which supposedly improves the flow into your engine.  The claim is more power and better fuel efficiency.

Well, Auntie Em, the Tornado’s claims is as real as The Wizard of Oz.  As a general rule, adding something to an existing engine can either make more power or conserve fuel, but not both – reason being that to make more power, air and fuel must go into the cylinders at an appropriate ratio.  If Tornado makes air flow quicker (which it doesn’t,) then more fuel would be required, as well.

The other problem is that putting a finned piece of metal in the air intake couldn’t possibly have the same affect on carbureted engines as fuel injected engines, yet the company claims the same product works on both.  In a fuel injected engine, the tornado comes before the throttle body, which would negate any benefits due to the design.

And let’s face it – the Tornado is cheap to make, so don’t you think BMW, Porsche, Ferrari, Rolls Royce, or another cost-no object company would be installing them at the factory if it actually worked?  BMW utilizes air inlet passages that change length dynamically to improve power and efficiency, for god’s sake…if the Tornado achieved the same thing, I’d bet they’d have saved the millions of dollars in R+D costs.

I know, they show that a Chevy Impala has higher horsepower on the dyno.  Problem is that one can have a momentary higher peak horsepower, but lower hp and torque across the rest of the RPM band.

Slick 50 and Other Engine Oil Treatments 

Here’s the plain and simple truth: if you lose your oil while driving, it doesn’t matter what had been in there – your engine will seize.  So many of these products have been successfully sued by the FTC for bogus claims that it’s scary.

There are a couple engine oil treatments that are decent.  Restore actually helps minimize oil leaks and raise compression –slightly-.  As a mechanic friend of mine said many years ago “it’s all snake oil, but Restore is the best of them.”  Using Slick50 or any of the ultra-lubricants can actually make engines spring new leaks. 

Fuel Treatments

Here’s where it gets tricky.  There are many types of fuel treatments.  Some work well, others work if (and only if) your car is configured to benefit from them.  Others don’t work at all.  Fuel cleaners are great if you use grocery store gas with less chemical additives (that’s why the gas is cheaper, friend!)  Irrespective of regular, mid-grade or premium, if you use Chevron, Exxon, Mobil, or Texaco, chances are a fuel system cleaner is pretty worthless. 

Other treatments increase octane.  If you are running a 1969 Corvette with the L88 solid-lifter high compression engine, 92 octane simply isn’t enough, so an octane booster is needed.  If you think that your stock CRX will benefit from an octane booster, you’re fooling yourself.  The higher the octane, the less combustible the fuel, so the more it can be compressed before detonating.  If it detonates early, you’ll hear pinging.  If your car is made to run on regular or premium fuel, chances are that adding octane booster will do nothing, unless, of course, either you or the car’s computer can somehow adjust specifications like ignition timing to compensate for the extra octane.

Then there are the magic potion treatments that promise more power and better fuel economy.  Just say no…they don’t work, and chances are you’ll lose the desire to send the whole bottle and receipt back to the manufacturer to accept its money back guarantee.

Finally there are lead additives, which are designed to decrease valve seat wear in engines made before catalytic converters, which means prior to 1972.  For years the thought was that running an engine without hardened valve seats on unleaded fuel would kill it.  Now this seems not to be quite correct in most cases.

I have two close friends who are both SAE Certified Master Mechanics.  They also own plenty of pre-cat cars and trucks, such as first-generation Camaros, Cadillacs and even a 455 Rocket-powered Olds.  Both of these fellows have seen the inside of engines, and can’t find a reason to utilize lead additives.  Basically, valve recession is no longer a problem due to the increased quality of modern fuels.  In other words, the unleaded fuel of today is so much cleaner than the regular gas of 1970 that the additives don’t provide much, if any extra benefit.  Furthermore, very few people drive enough distance in these cars to do any damage, even if the fuel wasn’t up to par.

As for the pictures of recession in old engines that help the companies sell product – who is to say that the seats would have been any better using the additive?

I have a 1960 Triumph TR3 sitting in my garage that I drive all the time.  I’ve never once put lead additive in it, and it’s still going strong.

Magnetic oil plugs and oil filter magnets

It is true that if you install a magnetic oil sump drain plug that after 3000 miles you’ll probably find some small metal particles.  The same goes for a magnet wrapped around an oil filter.  The issue is not that they don’t attract particles; the problem is that any good oil filter would also trap them if the magnets weren’t there. 

Have a question about a product’s claims?  Ask about it by submitting a comment.  We’ll give you our opinions.


GM and Renault-Nissan Deal Fizzles

October 5, 2006

fourwheeldriftHow surprising was today’s announcement that GM would not merge with Renault-Nissan?  Let’s just say that it was as predictable as President Bush uttering the phrases “stay the course” and “cut and run” in his last speech.

From day one this rumor-turned dead-end proposal was simply a way for GM shareholder Jack “don’t call me Dr. Kevorkian” Kerkorian to up his shareholder value.  I just hope he sold some shares while the price was inflated.  Let me take that back, Kerkorian represents the type of stupid short-term stock-value mindset that landed GM and Ford in the dire situations that they both face today.

For the record, GM actually ended the talks on the basis that the R-N team, in GM’s opinion, was undervaluing it’s potential partner.  In other words, R-N was trying to lowball  GM.

Carlos Ghosn is no dummy…actually, far from it — he might be one of the smartest guys in automobiles.  He is definitely one of the most honest and charasmatic.  Ghosn was only interested in GM for its plant and distribution network.  Everything else, including contracts for parts and labor, current model lineup, R+D pipeline, and financial situation made sharing a bed with The General look a lot like sharing a bed with Danny Bonaduce.

So Ghosn valued GM like he was looking at a project car he had no intention of ever restoring: low enough so if the seller was desperate, he could buy it and flip it for enough profit to justify the hassle of winching it up and trailering the mess home.

To be fair, GM would have been foolish to walk into a deal with Renault-Nissan. R-N’s presence in America is mediocre, at best.  No doubt that Infiniti is a true bright shining star, but Nissan is Japan’s Chevrolet — offering a rental car quality product line with sub-par reliability. (The Titan pickup is a lone exception.)   GM would have picked up business in Europe with Renault’s good lineup of compact and subcompacts.

So in other words, GM would have gained one competitor of Cadillac and Saab, another for Opel, and a major competitor for Chevrolet and GMC.

We need to call this for what it was: a blind date with absolutely no chemistry.  Ghosn and GM CEO Rick Wagoner had dinner, made some small talk, went to a movie, then decided to just be friends.