A bit old, but at Beyond the KM, we like to look at the old news and see if the predictions have come true.

Audi R8 V10

Time Magazine: Audi Gets in the Fast Lane

In the last article published by BTKM, we discussed the phenomenon that is the “halo effect” of the automotive sector. The premise is that by creating an “amazing” and “expensive” car, you attract buyers to the brand, who then buy more moderately priced cars (and in great quantities!).

By the way, from Audi:

Audi announces U.S. 2010 model-year prices for its Audi R8 sports cars, including the V10-powered R8 5.2 FSI quattro

- Base MSRP on the all-new Audi R8 V10 model starts at $146,000
- Strong interest in the Audi R8 5.2 FSI quattro drives early shipment to certified Audi R8 dealerships this week
- MSRP on the V8-powered Audi R8 4.2 FSI quattro models remain unchanged from 2009 model-year pricing

HERNDON, Va., Jul 23, 2009  -  Audi today announced that the U.S. manufacturer’s suggested retail price for the highly anticipated 2010 Audi R8 5.2 FSI quattro V10 sports car will start at $146,000, with shipments to authorized Audi R8 dealerships across the country beginning this week.

Audi said the MSRP for the 2010 Audi R8 4.2 FSI quattro will start at $114,200, unchanged from the base prices for 2009 models:

2010 R8 5.2 FSI® quattro® (V10) pricing (excluding $1,200 destination charge, taxes, title, options and dealer charges):

R8 5.2 FSI quattro coupe (manual)      $146,000
R8 5.2 FSI quattro coupe (R tronic)      $155,100

2010 R8 4.2 FSI® quattro® (V8) pricing (excluding $1,200 destination charge, taxes, title, options and dealer charges):
R8 4.2 FSI quattro coupe (manual)      $114,200
R8 4.2 FSI quattro coupe (R tronic)      $123,300

Designing a car to be priced higher than its German rivals was an exercise in brand positioning, says De Nysschen. “We think we found a sweet spot in the market.” Bentley–which, like Audi, is part of the Volkswagen Group–successfully exploited a similar luxury-market niche when it positioned itself between supercostly Rolls-Royce and the sedans and coupes of BMW and Mercedes.

Source:

Time (linked above)

Audi of America

Bugatti Veyron 16.4 in all its glory!

If there was ever a doubt in the halo effect that accompanies a super car launch… if you ever thought Porsche’s Carrera GT, Lamborghini Reventón, Aston Martin’s One-77, VW’s Phaeton, Mercedes SLR, Acura’s NSX, Nissan’s GT-R, and Audi’s R8 were a waste of space and a money losing venture, you were wrong. VW Group’s crowning achievement is undoubtedly the venerable Bugatti Veyron 16.4.

Acquired in 1998 from Italian entrepreneur Romano Artioli, VW immediately set to work building a successor to the EB110. It was considered by many to be the most sophisticated car of its kind at the time, a trait that followed in VW’s iteration called the Veyron 16.4. Even at its introduction and production start in 2005, VW never intended the Veyron to surpass 300 units. Indeed, the company has said that after 300 are produced, the car will be discontinued. Interestingly, this has not resulted in a static design and the company has continued to pump out alterations including “special editions” and a Gran Sport, replete with a removable roof.

It has been said by many that the Bugatti is the ultimate supercar, not just of today, but also of all time. Those who make that argument point to the jaw-dropping 0-60 mph times under 2.5 seconds and a top speed in excess of 400 KM/hour (250+ mph). Others marvel at the 16-cylinder, 4-turbocharger engine or the 10 radiators onboard. Still others marvel that at full speed, the car runs out of full in 12 minutes and the tires burn to a crisp at 15 minutes. All of that in a rather un-dramatic, but stunning fashion.

It is the combination of those factors, the styling, and the EURO1,000,000+ price tag that make the Bugatti the ultimate halo product for VW Group. What is the halo effect, and why is it so important that VW stands to lose millions of euros for each Veyron produced? Halo products in general are the über-expensive, lower volume, highly publicized products that companies produce to create buzz for the company and the other products sold by that company. Even a low volume company like Porsche can benefit from a halo product because these products do so much to bring status and media coverage. A company that produces a rather low quality product can be perceived as one that more generally produces very high-end products. The company may actually lose money selling the halo product, but these halo products are often considered a marketing cost anyway. Ideally, a company would save massive amounts of money on advertising by introducing a product that is constantly covered by the media.

So it is with the Bugatti Veyron. Associating Bugatti with VW Group and providing otherwise sound business strategy has meant that VW has pushed past Toyota (IN A WEAK MARKET!) to become the number one producer of automobiles in not just Europe, but the entire world with 4.4 million units for the year according to IHS Global Insight.

http://www.autoobserver.com/2009/11/vw-pushes-past-toyota-as-global-production-leader.html

For an example of the aforementioned press coverage, see the following irrelevant, but positive pieces of new coverage:

• http://jalopnik.com/5401978/how-i-found-a-bugatti-veyron-engine-on-a-budapest-street
• http://jalopnik.com/5403061/16-million-bugatti-veyron-crashes-into-texas-lake
• http://jalopnik.com/5388709/bugatti-veyron-parking-fail

Radar Love...

So Haley’s comet has passed overhead again, or so it would seem, because my mother just had me arrange a new car for her. To preface this article it is worth mentioning that my mother suffers from what I like to call “look-aholism”. That is, she sees a car on the road that she likes and then she mulls it over repeatedly, until finally, something catastrophic happens with her current car and she is induced into buying a new one.

She started this trend with the Chrysler LeBaron convertible, by no means a looker, but nearly as gnarly as compared to today’s Sebring. It was a 1989 model, and before you ask, it was not the Maserati-produced version with the goofy removable hard top. It was the run-of-the-mill LE model with white exterior with maroon interior. I hated that car. Oh sure, it was a bit of fun to drive, but to sit as a passenger, especially in the back, where I inevitably got placed, was a painful experience. Exposed to the cool summer elements in the wild west of Nebraska, my senses were assaulted by the noisy, cold, and face-distorting speed produced by that 4-cylinder turbo racing down dirt roads at 80 miles per hour. So now you know the answer to the question: why not the Mazda Miata? Because my mother likes to torture her children in the back seat (a feature distinctly lacking in the Miata).

Read the rest of this entry »

Volkswagen

VW in an effort to promote the tons of eco-friendlier cars launched at IAA in Frankfurt in September has decided to pursue eco-sales with a new eco-friendly racing series. The company is starting a single-make racing series where all of the cars run on bio-produced compressed natural gas. The model used in the series is the new Scirocco and should reduce racetrack CO2 output by 80 per cent over today’s racing fuels. The 2.0-liter 4-cylinder cars will have 220 horsepower on tap. Not bad for an alt fuel car!

Source: http://www.wired.com/autopia/2009/10/volkswagen-cng/

On other green fronts, VW Group is working with Stanford University in California in a US$5.75 million project to make VW the largest carmaker with R&D in Silicon Valley. Already the two companies have produced autonomous (read self-driving) versions of the VW Passat and now the Audi TT-S. The Audi TT-S will attempt to drive itself up the 14,110-foot Pike’s Peak next year, according Wired.

Source: http://www.wired.com/autopia/2009/10/vw-vail/

Audi’s Johan de Nysschen, critical of the Chevy Volt, took an interview with Time recently to express his views on the state of the luxury auto industry. He stated that Audi’s goal is to be the “top” German luxury manufacturer, but not necessarily in terms of sales. He also reiterated the push for more fuel-efficient vehicles leading to Zero emissions cars in the not so distant future.

Source: http://www.time.com/time/business/article/0,8599,1933906,00.html

Bugatti

Bugatti has unleashed a new concept car the 4-seat, 4-door (can you believe it???) Galibier 16C. Autocar magazine claims the production will start in 2013 at £900,000. We will believe it when we see it! Interestingly, the car’s engine will be the same as in the Veyron but will only sport 800BHP. Apparently, 200 get lost when adding 2 doors.

http://www.autocar.co.uk/News/NewsArticle.aspx?AR=244753

Caterham

Rarely does Caterham make the news, except when they unleash new, wildly fun lightweight roadster, but unfortunately, Caterham’s found Graham Nearn died in late October. Nearn has been selling the then-titled Lotus 7 since its introduction in 1959, and then when the car was discontinued in 1973, Nearn bought the rights and has been producing the car ever since and in more exciting, evolving versions. You can even buy a kit and put a Caterham 7 together yourself. If you are not familiar with this brand, you should be!

Top Gear featured it in a segment awhile back:

http://www.youtube.com/watch?v=cOxHV6QfJkg

http://www.youtube.com/watch?v=8bhnE2rAWuA

Source: http://www.autocar.co.uk/News/NewsArticle.aspx?AR=244398

Ferrari

Beyond the KM has previously marveled at the sales resiliency of the Ferrari nameplate. But even THIS economy has the prancing stallion kow-towing to the bear market of Wall Street.

Its third quarter results for 2009 showed revenues of 396 million euros (£359m) – down from 450m euros (£408m) in the same period last year. It sold 1454 cars, down 4.3 per cent year on year.

However, Ferrari announced that it has grown its market share in every market it monitors, against a drop in supercar sales of around 40 per cent.

Read the rest of this entry »

http://howto.wired.com/wiki/Drive_on_the_Autobahn

Porsche 911 Sport Classic

Time for an update!!! Let’s recap the last couple of months, organized by OEM:

Aston Martin

Aston is launching the new 4-door Rapide at the 63^rd IAA in Frankfurt in late September. Beyond the KM will be at the IAA, so we are looking forward to check this one out! The exotic sedan is quickly filling up with Porsche and Maserati out with the Panamera and Quattroporte models, respectively. Out of the three, Porsche is offering the most options for powertrain and interior/amenties. For this reason the Porsche Panamera Turbo seems to edge out the Aston by nearly half a second.

Porsche

No doubt about it, some of the biggest European automaker news this Summer has been straight out of Stuttgart courtesy of Porsche. The august automaker has spent the last two years in audacious and clever takeover attempt of the continent’s largest automaker, Volkswagen Group. Due in part to the downturn in the economy and thus Porsche’s inability to pay down debt, Porsche’s ruling family has been forced to come to terms with VW and the Piëch side of the family.

Porsche was once one of the few companies family-owned and controlled, which commanded a fantastic share price, despite having no trading presence in the USA (partly due to the U.S. requirements of quarterly 10-Q shareholder reporting. The company was also one of the few that could command top-grade corporate bond rates and at the same time avoid holding an official rating from any of the major rating agencies.

But as Porsche CEO and CFO Wendelin Wiedeking and Holger Härter respectively resigned, VW and Porsche announced that they would merger. Wiedeking joined Porsche in 1983, spent nearly 16 years at its helm. When he took over the troubled carmaker in 1993, it was nearly bankrupt and running at a net loss. Last year, it reported 6.3 billion euros in profit, partially because of options it owned in Volkswagen. Wiedeking, already Germany’s highest paid executive at €77.4 million, will receive a €50 severance package from Porsche. However, Wiedeking has already set aside €25 million of that figure for charitable organizations.

Taking over Porsche will be Michael Macht, Porsche’s production chief who helped roll out the new Panamera and the Cayenne SUV.

According to VW, Porsche will act as an “independent” company within VW Group much in the same way that Audi has, but this begs the question for many Porsche-philes, “just how independent is Audi, anyway?”

In addition to the proposed merger, Qatar’s Investment Authority is also looking to buy Porsche’s derivates for VW stock, which would further reduce debt, but the Porsche family is also said to be injecting massive amounts of cash into the firm to make the VW deal happen. Several web sites are reporting that Porsche’s tax burden in the event of a merger would be in excess of US$3billion. The Qatar deal has been back by Porsche’s supervisory board. It does also appear that Qatar will buy a chunk of Porsche’s VW stock.

In the end, VW is said to be paying US$11.28 billion to make the merger happen.

In not-unrelated news, RUF has released it’s first new Porsche-variant in many years, called the Rt 12 S. The car produces 675 bhp and costs a whopping EU255,000.

http://www.autocar.co.uk/News/NewsArticle.ASpx?AR=241807

http://www.autonews.com/article/20090718/COPY01/307189997/1128

http://dealbook.blogs.nytimes.com/2009/07/23/porsche-ceo-wiedeking-steps-down/

http://www.leftlanenews.com/porsche-fires-ceo-cfo.html

http://www.leftlanenews.com/porsche-production-chief-michael-macht-to-be-new-ceo.html

http://news.bbc.co.uk/2/hi/business/8165524.stm

http://www.autocar.co.uk/News/NewsArticle/AllCars/241871/

http://www.autocar.co.uk/News/NewsArticle.ASpx?AR=241955

Lamborghini

Lamborghini has announced a new Gallardo LP550-2 Valentino Balboni, starting at a paltry $219,000. This car is named after recently retired test driver Valentino Balboni, who has been testing developmental Lamborghinis since 1973. Is there anyone luckier in all of Italy?

http://www.leftlanenews.com/lamborghini-gallardo-lp550-2.html

Car rentals in the U.S.

If you have rented a car lately, you may have noticed the lack of American cars at Hertz, Enterprise, or any number of the competition. The L.A. Times also took notice and discovered that rental companies are now focusing on buying imports, including Mercedes-Benz (if you can believe that!).

http://www.latimes.com/classified/automotive/highway1/la-fi-rental-cars22-2009jul22,0,7180244.story?track=rss

BMW

BMW, ever the leader in smarter energy technology in vehicles, is working on a new project to recover energy from a car’s exhaust system. The programme is called Efficient Dynamics includes technologies including a disconnecting alternator, stop-start engine technology, and low-resistance tyres. The new 1er will get features such as pre-heating for the engine, differential and gearbox oil to ensure the oil is working at its most efficient from the moment the car is started.

BMW has also announced a heat recovery system that uses waste heat from the exhaust to generate electricity to power the car’s ancillaries.

Daimler

Mercedes-Benz’s parent firm Daimler posted of a loss of more than a billion euros in the second quarter of 2009 before taxes, but this result was better than expected.

Mercedes expects to see a return to profit in 2010; this process should be helped by sales of the new E-class which went on sale earlier this year.

http://www.autocar.co.uk/News/NewsArticle.ASpx?AR=241941

In other news, as a show of technical possibility, the company has apparently fit a next-generation BlueEfficiency diesel into an old 190D model. This increased efficiency from 32 to 48 mpg. http://www.leftlanenews.com/mercedes-benz-190d-blueefficiency.html

Lotus

In addition to launching the Evora, Lotus has been busy prepping a team for Formula 1 to begin in the 2010 season. This brings the grid to 26 slots (across 13 teams). Mike Kimberly retired from Lotus as CEO earlier in the summer, but has now been replaced by Dany Bahar, who has Formula 1 experience but also served as a VP of sales for Ferrari’s road cars.

VW

The Volkswagen Group today announced an operating profit of more than £1 billion for the first half of 2009. VW has increased its global market share in the first six months of the year increased to 12 per cent.

http://www.autocar.co.uk/News/NewsArticle.ASpx?AR=241955

Audi

Audi of America head Johan de Nysschen apparently told MSN that the Chevy Volt was a “car for idiots”. He may well have a point, and the reality remains that the Volt represents a project that has thus far come too little too late. In fact, it will not launch until late 2010. By then Nissan’s Leaf electric car will be out. BTKM looks forward to see the Volt in person. Still $40,000 for a CHEVY seems a little mental.

Audi is also unveiling a super-cool R8 spyder at the IAA Frankfurt. Imagine the price to be Audi-rageous!

Rolls-Royce

Rolls-Royce launched the “entry-level” Ghost. It is the 4^th model for Rolls-Royce and while very powerful, the 12-cylinder is smaller and comes with a much smaller price tag of about US$250,000. That’s not cheap, or even attainable for 99% of the world, but it does given Rolls the opportunity to increase volume.

Bentley

While Rolls-Royce has introduced and entry-level model, Bentley has announced a new top-of-the-line sedan to replace the Arnage. The new model is call the Mulsanne and debuted at the Concourse d’Elegance and the IAA in Frankfurt.

Ferrari

Formula 1 troubles aside, Ferrari is launching a new car, the 458. This Michael Schumacher-tuned car is being unwrapped at the IAA in Frankfurt and replaces the F430.

Electric Diesels

Dan Neil of the LA Times is in Frankfurt and is writing about the IAA Frankfurt auto show. He does a thorough review of the new electric-diesel hybrids. Of particular note is VW’s L1 concept and BMW’s rather cool Vision sport coupé.

http://www.latimes.com/business/la-fi-neil18-2009sep18,0,820738.column

Check out this site: http://www.chevrolet.com/future-vehicles/orlando/

and compare to these shots snapped by us last week…

Gathered, in part from LeftLane:

Volkswagen says its diesel TDI vehicles are selling well. An impressive 81 percent of Jetta SportWagens were equipped with the TDI, as were 40 percent of Jetta sedans and 29 percent of Touaregs last month. Volkswagen, sales were down 18 percent to 19,027.

Volvo saw a 0.6 percent increase in sales compared to June 2008, though the Swedish marque is still off 35.6 percent for the first six months of the year. The all-new XC60 sold 1,032 units.

Porsche had a disastrous June; just 902 of the automaker’s sports cars left dealer lots, a 66 percent decrease that brought the automaker’s year-to-date sales down 36 percent for the year.

BMW, down 20.1 percent to 16,744.

Maserati, down 47.9 percent to 111.

Mercedes-Benz, down 22.6 percent to 15,155.

Mini, down 21.2 percent to 4,105.

Saab, down 58.4 percent to 779.

So this week’s link come courtesy of a new site called TrueCar.com

TrueCar provides shoppers with free price reports that show what buyers in their market area paid for new vehicles, including options. It also provides data on dealer cost, factory invoice prices and sticker prices. The site also uses some nifty graphs to help buyers decide whether or not the offer price from a dealer is a good one.

You might hold off buying a new car until Congress passes a scrappage program as in Germany, and soon in the UK.

I wish this was a daily segment on the Letterman show, but sadly, I don’t think he has dropped a safe on a Buick lately…

The General Motors brands

In a recent speech, Obama asked the question, does the GM proposal do enough to consolidate the unprofitable marques. The answer is obviously “no”. In fact, the proposal generated by GM did little to immediate liquidate assets for any of the brands, including Hummer, Saab, and Saturn, which are the first to go. GM is undoubtedly looking for buyers, but what happens when they cannot get adequate capital? You guessed it, more bailout money. This analysis will focus solely on brand management. Financial management, include dealership reductions will not really be covered here.

Perhaps a better strategy for GM is to spin-off Hummer and pitch it back to the military as was originally intended, then force the Swedes to take back Saab (the will do so of course because of their near-socialist governmental structure), then merge Opel and Vauxall, and Saturn, and sell it to Fiat. This would create a cross-border carmaker with particular focus on the low-end green market. Fiat has recently stated that it is interested in buying Opel anyway.

Under this plan, GM assesses the whole product/brand portfolio, not just the three “lesser” American marques. Selling Buick to the Chinese, who seem to think that their country is ageing and could care less about styling, could be the deal of the century. The Chinese buy more Buicks than pretty much anyone else anyway. GMC could stay on as GM’s sole “truck, Van, and SUV maker”. They seem to have competency in building large hefty vehicles anyway. That leaves Pontiac, Chevrolet, and Cadillac as the remaining core assets. GM has officially decided to eliminate the Pontiac division. Some have suggested that Pontiac become a “specialty” vehicles division, producing cars like the Firebird. That may be a waste, however. Perhaps it is better to consider Pontiac taking over the “tuning” segment much in the same way that BMW’s M-division, and Daimler Mercedes’ AMG unit have done. Does your Caddy need more power? Send it to the Pontiac tuning factory. Something like that would give Pontiac a decidedly sporty and meaningful position in the portfolio. This could also position Pontiac to bring out experimental and limited edition cars. Perhaps this division could introduce cars that run purely on hydrogen. Read the rest of this entry »

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