Mercedes E-class BlueTec Hybrid

Without a doubt, the EU has become the leader in improving the pollution problem for the automotive sector. Recently the U.S. put in a 27.3 mpg average fleet requirement for 2011. Please see: http://www.nhtsa.dot.gov for the latest information and the impact analysis. But is the change enough to get us on the right track? How exactly do carmakers implement changes in their fleet to address the higher requirements?

The European Union defines specific emissions targets for the following 5 years as the following:

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For most of the decade now BMW has enjoyed a distinct competitive advantage – at least in the American market. They have offered a four-year, 50,000 mile maintenance-cost-free program called “BMW Ultimate Service”. The service includes free replacement of:

• Brake Pads
• Brake Rotors
• Wiper Blades
• Scheduled Maintenance (as outlined in the owner’s manual)
• Oil Changes/topping up of fluids
• Roadside Maintenance

It’s worth noting that BMW parts are generally well-made, and will not typically require new pads and rotors in this 50,000 miles. Still, it’s nice to know you’re covered. It’s also worth noting what the program does NOT include: tyres and alignment for starters. 

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Few companies are as steeped in tradition and history as Aston Martin. Following the post-World War II buyout of Aston by Sir David Brown (of DB designation), the company opened a factory, Newport Pagnell, in 1954.

The facility has seen the almost all modern Astons pass through it’s door, but as of July 19, all Astons will be built at the new facility opened in 2003 in Gaydon, Warwickshire, England.

With the recent consortium buyout of Aston Martin, coupled with the upcoming sale of Land Rover/Jaguar, the factory’s future is uncertain. From a strategic perspective, Aston will be well served by their current factory, which produces DB9s and V8 Vantages. In the future it will produce the DBS, the successor to the now retiring Vanquish line.

Jaguar and Land Rover will likely also have to move their product elsewhere, but Jaguar could probably stand to cut some production as demand has waned in recent years, in part due to a very aged product line. Both the S-type and X-type are due for major overhauls, though the lack of success in the X-type may prompt its demise from the company altogether.

To wind down the weekend, BTKM located a video from Golden Earring. The perennial classic is Radar Love. Turns out Dan Neil of the L.A. Times covered this topic earlier in the week:

HIGHWAY stripes are 10 feet long and 30 feet apart. That means one stripe every 40 feet. No one really knows how this fundamental increment of civil engineering came to be. Well, I say no one knows — I’m sure somebody knows, but that person works in the historical division of the federal Department of Transportation.

There are some wondrous synchronisms hidden in that white-stripe measure. At 55 mph, for instance, a car is traveling 80.66 feet per second, which means that two white stripes slip by every second. This tempo — 120 “beats” per minute — syncs up almost exactly with what is widely regarded as the best driving song ever, “Radar Love” by Golden Earring.

Fair enough, Dan. To get a feel for what he’s talking about, check out the video:

Enjoy!

Source: http://www.latimes.com/classified/automotive/highway1/la-hy-neil2may02,0,3863527.story?track=rss

On Monday, Ford announced that they sold their profitable brand Aston Martin to a consortium of buyers, including the owner of racing competitor Prodrive of the UK. This means that Aston now goes back to British ownership – at least partly. In addition, a well-known Aston Martin collector is investing in the buyout as well as two well-financed investment companies Adeem Investment Co. and Investment Dar, both of Kuwait. Ford will retain US$ 77 million (about 8.5% of the company). The whole deal is worth $925 in much needed cash for Ford Motor Company. Ford will still retain three brands in its Premier Auto Group: Volvo, Land Rover, and Jaguar. Ford has previously stated that Jaguar is losing money, and Land Rover (despite widespread quality problems) is said to be profitable. Both are known “British” companies.

As for Aston, we can expect to see some leverage on the buy-side of this deal. It is unclear if the two Kuwaiti investment companies are planning long-term investments, but a lot of leverage could mean a quick turn-around. Unlikely would be for David Richards, the chairman and founder of Prodrive, and John Sinders an Aston collector and racing backer, to resell the company in the short-term. Both seem to view this as a long-term investment.

Strategically, Ulrich Bez will remain the CEO of Aston Martin, and will continue to drive the product lineup in the future with the Rapide, a four-door Aston Martin, which will compete against the Maserati Quattroporte and the Porsche Panamera (due out in 2009). We should expect that plans for the Rapide will be accelerated to generate more revenue and better return on investment over the next few years.

On a final note, for those surprised by the Prodrive investment, we should note that Prodrive has considered investment in a production vehicle before. The well-known racing company commissioned a technologically advanced vehicle, the Prodrive P2. Prodrive couldn’t be bothered to put the sophisticated car into production, but we could view the purchase of Aston Martin as a foray into production sports cars. No doubt we could see Prodrive technology in future Aston Martins, thus giving Aston a specific product advantage.

Source:http://media.ford.com/newsroom/release_display.cfm?release=25635

The Financial Times first reported in early January that Ford was considering selling the Jaguar unit of the Ford Premier Auto Group, the Ford Company’s luxury division. Jaguar has been in the Ford stable since the 1980s, the same decade that Ford began to assemble the PAG.

Alan Mulally told the FT, “All good businesses continually review their portfolio, and we will continue to evaluate ours going forward.” Good plan Alan! With that statement Ford is on the right track. But then again this statement comes weeks after Ford announced that they were looking for buyers of the Aston Martin name, PAG’s ultra luxury supercar division. Oddly, Ford’ Don LeClair told the FT just days later that Jaguar was NOT for sale. Clearly, Ford needs to get the corporate message packaged cohesively.

And that leads use to wonder if Ford is really taking its own advice. In evaluating the reasons for the sale, it is of no doubt that Ford is looking to sell the now profitable Aston Martin because it needs cash flow. A sale would generate short-term cash flow. This much is true. Still, Ford needs to consider the long-term ramifications of this decision. Aston gives Ford some degree of legitimacy in international racing, and no doubt Aston Martin in far more profitable than it has been in the past.

Ford has done an excellent job of turning around Aston Martin, which made only 43 cars in 1993. 2006 resulted in over 5000 Aston Martin sales. This is much contrasted with Ford’s 1989 purchase of Jaguar. Jaguar has struggled since its inception, and has yet to make any money for the PAG. It does however represent a Ford’s prestige motorcar presence in the auto industry. It is the only luxury auto unit that Ford runs outside of the USA, and the only one which is known and respected worldwide.

Regardless of what happens to Aston Martin and Jaguar, you can bet that Ford’s PAG will attempt to keep Volvo and Land Rover, both of which are profitable, in its portfolio. As we have said before, a sale of Aston Martin is mistake, and as likely is a sale of Jaguar.

Some weekend enjoyment for you…

From Jeremy Clarkson’s “Meet the Neighbours” series.
http://video.google.com/videoplay?docid=563403645604465846

It was brought to our attention today that Ford Motor Company is bringing the end of the Ford Taurus sedan next week after 21 years, and 7 million units sold.

Our feelings on this: AMEN! The demise of the Ford Taurus was due long ago. Popular or not, the design got old and the car lost its appeal.

Then again it was only inevitable after FoMoCo’s Jaguar unite opted to style the front of the latest XK after that of the Taurus. Like we said, LONG overdue!

Thanks Ford!

In 1986, Ford Motor Company bought 75 per cent of Aston Martin. In 1993, they bought the rest of the company from Victor Gauntlett. Since then, Aston Martin has been turned upside down. Barely is the company recognizable to fans of the Aston of yesteryear. Today the company is lean, innovative, and more or less profitable. The brand is stronger than ever, as are the sales figures.

In a lot of ways, the acquisition of Aston into Ford’s Premier Automotive Group was strategically sound long-term investment. Ford had needed a well-known company to purchase, one which could be bought on the cheap and turned around to reap long-term profits. The secondary benefit is that Aston brought a super car to the company that lacked one. Additionally technology that has started in Aston as motorsports technology has filtered down. Some technology has also been filtered to other companies in the Premier Auto Group portfolio. The Aston shares many design concepts and parts with Jaguar. Both companies are located in the West Midlands in what was long considered the heart of the British auto industry.

Aston Martin also had long-term potential in motorsports. In fact, Aston announced in 2003 that they would bring the marque to Le Mans starting in 2005. The efforts in motorsports and in rejuvenating the production car lineup have proven fruitful in adding value to the brand.

Despite all of the benefits of having Aston in the Premier Auto Group, Ford announced at the end of October plans to sell the luxury sports carmaker in an effort to raise capital. The question is: “is now the best time?” Hindsight is always 20/20, but the question is certainly valid. Ford has serious financial problems, to be sure, but dumping companies in which they have invested serious time and money to resolve short-term problems seems absurd. The fact is, Ford isn’t suffering because of Aston Martin, they are benefiting from having the company in the portfolio. Selling this company at this juncture with growth almost certain would be a bad move.

In a future posting, BeyondTheKM will examine the strategic moves that Ford may take in securing the future of the Premier Auto Group.