With gas over $4 per gallon, on average, across the country, there is now a carpet bagger economy on the Toyota Prius.
Many dealers will still sell a new one at MSRP, but you are likely to wait 10 to 12 weeks before seeing a car. Yes, if you act quickly you can buy a used Prius, but this is where the real price gouging occurs. Case in point, a basic 2007 Prius with no options and 29,000 miles will cost you around $27,000. If you bought a brand-new car identical to this in 2007, it would have cost around $24,000, and Kelly Blue Book, the authority on used car prices, says that this car is worth just under $23k today.
Obviously, there is a new supply-and-demand curve in the market. Nothing illegal mind you; this is capitalism at work, but it just doesn't seem right. Gas may go up to $6 per gallon, or oil may go down to $80 per barrel; no one really knows, and there are bulls and bears forecasting both extremes. Since rationality has given way to speculation and panic, my advice to would-be Prius buyers is:
1. Do the math. A nicely equipped 2007 Honda Civic EX with equal mileage carries a suggested retail price of about $18,300. Assuming 30 miles per gallon for the Civic, and 45 miles per gallon for the Prius, it could take around 13 years to recoup the extra money for the Prius at $5 per gallon (assuming 12,000 miles per year of driving). Now I know that there are a lot of assumptions in this formula, but suffice it to say that when you do the math, the Civic seems like a better deal overall--not to mention that the EX has a Sunroof to boot.
2. Wait. Delaying a Prius purchase could have two benefits. First off, buyers get to see whether the price of gas goes up or down. If it does go down as some predict, the Prius premium is likely to disappear faster than a Lakers fan after the NBA finals. The other advantage to waiting is that the highbrow Prius will finally get some competition moving forward. Honda is rumored to have a 2009 hybrid Fit and brand-new five-passenger hybrid--with better gas mileage than today's Prius--waiting in the wings. Rumor also has it that VW, Hyundai, Ford, and others aren't far behind with high-mileage alternatives of their own. Finally, in 2009 or 2010 Toyota will introduce its own next-generation Prius that may offer plug-in capabilities and better gas mileage as well.
Supply and demand are constant market conditions, but shortages come and go. Is a used Prius really worth a $3,000 to $4,000 premium? The answer to this question can be summed in two sagacious words: caveat emptor!
Automakers used this year's Detroit auto show to launch a number of significant new cars and model upgrades, featuring the latest in cabin and powertrain tech. Ford and Dodge went head to head with new pickups, and we saw many exciting new sports cars.
Toyota shows its plug-in Prius on the show floor.
(Credit: CNET Networks/Sarah Tew)Toyota surprised us with a plug-in hybrid Prius on the floor at the 2008 Detroit auto show. The company has resisted the plug-in hybrid movement previously, citing the fact that you don't need to plug in the Prius as a virtue. But there has been quite a bit of interest in plug-in hybrids from individuals and even power companies. Plug-in proponents claim to get 100 mpg by modifying Priuses and recharging the batteries when the cars aren't being used. Toyota seems to have finally given into the plug-in pressure, starting up its own plug-in program and handing over a couple of prototype plug-in Priuses to the University of California. At the Detroit auto show, Toyota not only had a plug-in Prius on the floor, along with an informational display, but it also had two running around the city as VIP transportation. The plug-in Priuses still use Toyota's hybrid system, but have been modified with an additional nickel-metal-hydride battery pack, increasing electric range and speeds.
Ford also has a plug-in hybrid.
(Credit: CNET Networks/Sarah Tew)Ford also got into the game, showing off a plug-in Escape Hybrid in its display area. Ford is working on the plug-in technology in conjunction with Southern California Edison. The plug-in Ford Escape Hybrid uses lithium-ion batteries, giving it fuel economy of 120 mpg, according to Ford.
Volkswagen has four new car architectures planned as part of its revamp, according to reports.
In mid-November Volkswagen announced it would be investing 28.9 billion euros in its automotive division over the next three years. The company said the changes would focus on completely new vehicles as well "successor models and derivatives" for all of its product classes. The investment will include new powertrain technologies and updates to manufacturing plants.
Today it's been reported this will entail the introduction of four completely new base architectures from which Volkswagen will build its new models and updates, according to AutoBlog and Automotive News.
To save on manufacturing costs, several similar-sized cars are often built on the same original platform, though things like exterior sheet metal, engines, and interiors are different.
The R-line high-performance version of Volkswagen Passat unveiled on Monday.
(Credit: Volkswagen)In the case of Volkswagen, the company plans to use its MQB (Modulare Querbaukasten aka modular transverse component system) architecture for "upper-medium" cars like the Passat. The MQB system will be the base for over 6 million cars per year by 2018 and save up to 40 percent per car in development and manufacturing costs.
The MLB (Modulare Längsmotor-Baukasten aka modular longitudinal engine component system) will be used for the Audi A4 and A5. The MHB will be used for small rear-engine vehicles like the Space Up concept car Volkswagen has been unveiling at car shows. A fourth unnamed architecture is also under development for Volkswagen's mid-engine sports cars sold by Audi and Lamborghini, according to AutoBlog.
While Volkswagen released a statement on the revamp, it was not immediately available for comment on the particulars of what those changes would entail.
News of change for Volkswagen is not surprising given an October court ruling that gave Porsche, which holds over 30 percent voting interest in Volkswagen, the ability to exert more control. Porsche has repeatedly said it would like to revamp Volkswagen to make it competitive with Toyota in terms of global sales. Toyota is known as a pioneer for its efficient plants with modular car manufacturing.
The recently concluded K 2007 conference in Düsseldorf, Germany, featured a variety of recent advances in materials science that will change your life. No hyperbole there--just a safe prediction.
I didn't make it to the show, but I've been following the announcements on the Web site of Design News, a trade publication for mechanical engineers. The K Fair is all about plastics...but in truth, the line between plastic and metal is getting pretty blurry these days.
Indeed, companies such as DuPont are now talking about plastics climbing "the metals replacement curve." MetaFuse technology, co-developed by DuPont, Morph Technologies, Integran, and PowerMetal Technologies, combines "nanocrystalline" metals with engineering polymers to create objects with exceptionally high stiffness-to-weight ratios.
Carbon nanotubes promise to replace metal entirely in future automobiles, mobile electronics, and other products. At K 2007, companies such as Bayer and RTP showed carbon nanotube-based composite plastics. Earlier in October, Bayer announced it's building a second production facility for carbon nanotubes. The new facility's capacity is only 30 metric tons per year; Bayer and all of today's suppliers together can barely handle the demand for experimentation and prototyping, but Bayer says its "medium term" plan is to build another facility with the capacity to produce 3,000 tons per year. That's starting to become significant, I think.
Carbon-fiber composites are already strong enough to replace aluminum and steel in certain circumstances, chiefly where cost is secondary to weight or style, as in Toyota's 1/X concept, a carbon-fiber car weighing just 926 pounds, or the 2008 BMW M3--I'm planning to buy one of these next year myself.
But carbon nanotubes are so much stronger than carbon (graphite) fibers that they will likely enable entirely new design philosophies, in the same way that steel revolutionized shipbuilding, and aluminum made commercial aviation practical. We define prehistoric times in terms of materials science--the Stone Age, Bronze Age, and Iron Age--and we're on the cusp of a new age based on practical nanotechnology.
Questions about expense, reliability and profitability are good reasons for Toyota to take its time on a plug-in electric hybrid, a company executive said Monday.
Yoshitaka Asakura, project general manager in Toyota's hybrid vehicle system-engineering division, said Monday in an article in The Wall Street Journal that Toyota is taking into account that not all consumers, despite vocal environmentalist groups, may be interested in a car that has to be re-charged daily.
Toyota executives spoke at several break-out sessions on emissions reduction, battery technology and design strategy on Monday at the 2007 Tokyo International Automotive Conference, of which Toyota and The Wall Street Journal are sponsors.
Katsuaki Watanabe, Toyota's president, is scheduled to give a speech at the conference Tuesday to outline his company's goals.
The company's attitude toward plug-in electric hybrids is noticeably more conservative than the one that rival General Motors has put forth.
GM has promised that its Chevy Volt, a plug-in electric hybrid car that will run on lithium-ion batteries, will be tested in spring 2008 and available for purchase in 2010. The company has been touring the concept Chevy Volt car around the U.S. to promote its future sale.
Toyota has not given a timetable for when its plug-in electric car will be available to consumers, though it has been working on pilot projects with household plug-in cars in Japan.
The company has also said in the past that current battery technology may be too expensive at this point to make a plug-in electric commercially viable. Some have estimated that it costs about .
In answer to critics' questions of battery expense, GM has said a new business model of leasing a car's battery may be introduced to release its car at an affordable price.
All the rhetoric comes amid an ongoing battle of some automakers against new Corporate Average Fuel Economy standards that would require them to raise the average mpg per product line from the current 25 mpg to 35 mpg by 2020. The bill requires automakers to either improve the mileage of trucks and sport utility vehicles and/or introduce more efficient cars in their lineup to bring down their overall fleet average.
Where do you draw the line between a motorcycle and a car?
Toyota's iQ Concept, a concept car that debuted in Frankfurt and will be at the 2007 Tokyo auto show, might be better suited for the next rally in Sturgis, SD.
The iQ from Toyota.
Toyota is in collaboration with two Japanese companies to develop a 1-liter engine for the iQ that will be based on a Yamaha motorcycle engine, according to reports from Auto Blog and Automotive News Europe.
Toyota plans to produce about 80,000 iQ cars for Europe by 2009 and possibly more for the Indian and Chinese markets. But don't expect to see it in the U.S. anytime soon and probably for good reason.
The ultracompact is roughly as wide as a Mini Cooper, but almost one foot shorter. It holds about three adults and "one child (or luggage)," comfortably, according to Toyota.
Besides Toyota Motor and BMW, automakers haven't done a great job of building fleets that emit less carbon dioxide, according to an Environmental Defense report.
The organization's 80-page report, called "Automakers' Corporate Carbon Burdens" (PDF), evaluated the carbon dioxide emissions of vehicles from major automakers between 1990 and 2005. Companies graded were: Ford Motor, General Motors, DaimlerChrysler, Toyota, Honda Motor, Nissan Motor, Hyundai Motor, Kia Motors, Volkswagen, BMW, Subaru and Mitsubishi Motors.
"The rate of carbon dioxide emissions from new cars and light trucks in the U.S. dipped for the first time in two decades, but their overall contribution to global warming has continued to grow steadily since 1990," Environmental Defense said in a statement.
BMW achieved a 12 percent reduction in carbon dioxide emissions across its entire fleet of cars, more than any of the other car companies included in the study. Environmental Defense attributes the drop to the company's addition of the low carbon dioxide-emitting Mini Cooper to its lineup, as well as efficiency improvements made across its entire line of cars.
Toyota was rated the second best, reducing carbon dioxide emissions by 3 percent overall during that period, due in large part to its introduction of the Prius hybrid to its lineup and efficiency improvements made to the Corolla.
The report also rated the overall "carbon burden" that automakers placed on the environment, based on factors that included the emissions of their cars and the number of cars sold.
In this area, GM ranked No. 1, with a 6.5 percent reduction in overall carbon burden. Environmental Defense, however, attributed this to GM's loss of market share, not to the carbon dioxide emissions of its overall lineup, which actually rose 3 percent. In contrast, Toyota, while low in its 3 percent carbon dioxide emissions reduction rate, grew its carbon burden by 125 percent, due to an increase in overall sales.
Environmental Defense combined the average over an entire lineup of cars and light trucks from 1990 to 2005 to determine an automaker fleet's average carbon dioxide emissions rate:
• BMW, reduced 12.3 percent.
• Toyota, reduced 3 percent .
• Volkswagen, up 1.3 percent.
• Subaru, up 1.6 percent.
• General Motors, up 3 percent.
• Mitsubishi, up 4 percent.
• Honda, up 4.4 percent.
• Ford, up 4.7 percent.
• DaimlerChrysler, up 4.8 percent.
• Nissan, up 9.2 percent.
• Hyundai, up 17 percent.
• Kia, up 30 percent.
Jim Press leaving Toyota for Chrysler
(Credit: Chrysler)Chrysler has named Jim Press as a president and vice chairman, CEO Robert Nardelli said Thursday.
Press, former president of Toyota Motor North America, was the first non-Japanese person to be appointed to Toyota's board of directors in the company's history. He was appointed to the board in June, after working at Toyota for 37 years.
Press' resignation from Toyota is effective September 14. That same day, Shigeru Hayakawa, the current Toyota Motor North America vice president and managing officer, will become president, according to Toyota.
Press leaves Toyota to serve under Chrysler's Nardelli, alongside Tom LaSorda, who is also a vice chairman and president at Chrysler.
"Part of my new responsibilities will be strengthening and energizing the dealer body. This is something I was passionate about at Toyota and will be passionate about at Chrysler," Press said in a statement.
Press will be responsible for "North American and international sales, global marketing, product strategy, and service and parts" for Chrysler, while LaSorda will be responsible for "manufacturing, procurement and supply, employee relations and global business development and alliances."
In the midst of all the bleak news for the American car industry, there was a ray of hope of sorts. A recent survey on "retained value" (what percentage of retail price a car maintains on the used market) has the Hummer coming in the top 10. As Autoblog reports:
"[T]he new Power Information Network retained value rankings for the automakers came out, and while the top ten list is pretty much owned by imports, Hummer crashes the party, coming in at the #8 spot. Hummer vehicles retain 63% of their original value, an increase of 3.5% over their last showing. Scion sits in the top spot, retaining 69.8%
Toyota (Scion #1, Toyota #5, Lexus #6), Honda (Honda #2, Acura #4) and BMW (MINI #3, BMW #10) actually account for seven of the top ten, with Subaru (7th) and Nissan (9th) rounding out the list along with Hummer."
So the Hummer (or as the manufacturer would prefer, HUMMER--it's all about the yelling) is the only American nameplate to get into the Top 10. A ray of hope, but also worrying that it was the only brand to do so. And it will be interesting to see if it can sustain that in the face of increasing fuel prices - is this just a residual effect from Hummer's early rep?
Whatever you think about the Hummer, it provides a unique experience, and that is a large part of its appeal. The macho look, the huge size, the gonzo tires, the military image - your basic Chevrolet or Ford or Dodge pales by comparison.
But what was even more interesting was how this played out with the imports. Scion and Mini are both new brands (well, sort of in the case of Mini). Both are distinguished by creating holistic, coherent experiences across multiple touch points. From the cars themselves to their immersive websites, their characterful dealerships, their offbeat advertising, and of course how both allow large degrees of customer involvement in personalizing their rides. In all the ways that they speak with and interact with their customers they have had a clarity of focus to their messages, and executed them spectacularly.
How has this paid off? Scion at #1 outpaced its parent Toyota by 4 places, and Mini at #3 an astonishing 7 places ahead of blue ribbon parent brand BMW. I would argue that the quality and consistency of the user experience created by these brands has had a large role in pushing them so far ahead so quickly. Certainly they are not selling mainstream cars that try to compete on the usual dimensions - bigger, faster, more comfortable, and so on. They have succeed in spite of going against the grain with their product choices. This too has been part of their voice as brands - iconoclasm, appealing to people who consider themselves independent thinkers, yet still style-minded.
Infiniti was the only upscale Japanese brand not to make it onto the list, which in part surely has to do with its confused image for the last 10 years. In the last three years Infiniti has stepped up its game considerably, so expect it to do much better soon. Likewise Acura is on a resurgence after years of producing competent but mostly bland cars, perhaps explaining its sitting behind the lower-end parent Honda.
