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  • Posted by: James Moore on Thursday, April 1 2010 10:55 AM | Comments (0)

    General Motors is turning the new Chevy Volt loose on our streets, a truly electric car that you plug in to "refuel." The Volt runs on electricity, but adds an on-board gas generator to recharge the batteries on the fly.

    The hope is the Volt will act as a halo for Chevy and the GM brand overall, signaling a major shift in their technological prowess and brand relevance to counteract negative public perceptions after decades of lackluster products and the recent government bailout.

    It's a huge gamble for GM. Only 10,000 units will find their way to the public during the initial run, each sold at a significant financial loss considering the billions GM has invested in R&D to bring the Volt to market. And you can't have one unless you live in California, D.C. or Michigan.


    The Volt name is a slam dunk. It's short, memorable, and represents units of electromotive force. It gives consumers an instant understanding that this is a very new and very different offering relative to the hybrid crowd. To further that image, GM has created an iPhone app that allows owners to control some vehicle functions and manage charging cycles. Sadly, GM has taken a great new product and bungled the launch with some questionable marketing tactics, giving the Volt its own theme song and dance.

    The Volt's technology considerably advances the fuel-efficiency game. While traditional MPGs aren't exactly the proper measurement for electric vehicles, GM estimates that you can operate the Volt for approximately US $1/day versus the US $3-4 it takes to run a traditional vehicle with a gasoline engine. One caveat for environmentalists looking to ride their high horse: The electricity still has to come from somewhere, so the car is only as green as its local power supply.

    Still, hope abounds, not just for the planet, but for the future of this venerable brand.

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  • Posted by: James Moore on Tuesday, February 16 2010 12:50 PM | Comments (0)

     

    Nissan has just launched a new small car called the LEAF, a name that puts a fresh spin on being green. It sounds good to the ear, makes you feel good inside, and functions as an acronym spelling out the company's strategic direction for the vehicle: Leading, Environmentally friendly, Affordable.

    The engineering team worked miracles developing the car's advanced technology, but securing the name was no easy task either. According to company insiders, LEAF was chosen since the process of photosynthesis is considered nature's “ultimate energy source” and the word itself translates well across languages and cultures.

    Unlike the hybrid vehicles currently zooming around our streets and highways, the LEAF is 100 percent electric and produces zero emissions. Like, no tailpipe zero. The car's battery takes four to eight hours to charge on a 220V home charging unit, but Nissan is going the extra mile by building quick-charge stations that gets 80 percent of your juice flowing in about 25 minutes. That level of infrastructure investment indicates Nissan means business about a zero-emissions future for the automotive industry.

    It should be noted that this is not the first vehicle of its kind, although the myriad technologies involved have advanced considerably from past offerings in the US. The car will initially be part of a pilot testing program similar to the leasing scenario GM set up for it's EV-1 electric car back in the late 90's. Thankfully the name has gotten better since then, too.

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  • Posted by: Josh Feldmeth on Thursday, January 28 2010 12:39 PM | Comments (0)

    GM has owned Saab since 1989. For all its efforts, including new models, shared technology platforms and access to GM’s international dealer network, GM’s experiment with Saab has failed. It hasn’t been profitable since 2001 and they can’t afford to continue. GM had been winding down the business and has been open to just about any real offer.  In the words of Ed Whitacre, GM’s Chairman and now permanent CEO, “It’s real easy - just show up with the money and you can have it.”

    Spyker appears to have done just that. But what exactly is Spyker buying and why?

    Thinking of tangible assets, the deal makes little sense. It’s not a technology play, as its 9-3 and 9-5 platforms as well as other power train technologies are going to BAIC in China. Spyker isn’t buying distribution. Saab is closing dealers and Spyker super cars are not the sorts of thing one shops for at the Auto Mall. And it’s clearly not about cash flow. Saab doesn’t make money and Spyker lost over 8 million Euros on the 21 cars it made in the first half of 2009. What could Spyker possibly see in Saab? Is this automotive madness?

    Probably. Saab has always had that effect on people. Almost immediately after entering the U.S. market in the late 1950’s, for instance, Saab attracted an educated, affluent, liberal, and zealous niche following. That passion continues today. A recent study by German psychologist Rüdiger Hossiep notes that Saab owners are 10 times more passionate that VW owners.

    That is the point: Spyker isn’t buying a business, it’s betting on a brand. In today’s economy, consumers no longer want more brands than they can afford to use. There are so many products with so much marketing support that consumers simply fail to attach to the brand. And in a world accelerating sameness, the Saab brand possesses a valuable yet illusive competitive advantage: emotional bonds with a high-value consumer targets.

    If the deal goes through, Spyker will need help from many sides: capital, automotive know-how and patient partners. It might not make it. Its one chance lies in the strength of the Saab brand. Saab’s new owners must recognize that the brand has performed poorly as part of a large conglomerate for a number of reasons; namely the product compromises that have diluted the clarity of Saab’s independent character and technical capability. It then needs to attach a re-sharpened Saab brand to a solvent business model, with products (maybe not just cars) that deliver the promise.

    The world is full of meaningless brands. Saab is clearly not one of them. Spyker is betting on the strength of the Saab brand to fix what has unfortunately become a very bad business.

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  • Posted by: Jez Frampton on Wednesday, November 4 2009 05:53 PM | Comments (0)

    When GM decided to sell Opel (which includes the second best-selling U.K. car brand Vauxhall) last spring ahead of bankruptcy proceedings, it met much criticism. Still, GM seemed ready to go through with it, as U.S. taxpayers weren’t eager to bail out GM’s foreign operations.
     
    But today, in a surprising turn of events, GM cancelled its plans. GM pulled out of the deal with Canadian car parts firm Magna and Russian bank Sberbank.
     
    Although Opel needs a large cash-injection to survive, the reversal was made with GM's strategic long-term interest in mind. Without Opel, GM loses its global presence, particularly in areas like Russia, which is expected to emerge as Europe’s largest market in the next few decades. If GM were to sell Opel off, it would find itself in a similar position to fellow troubled Chrysler–primarily a North American brand. 

    Additionally, Opel’s products and engineering are tightly interwoven with all of GM’s other operations. As reported by The Economist, both the Epsilon 2 platform, used by the new Opel Insignia, and the Delta 2 platform, intended for the next Astra, were developed at Rüsselsheim and will be used by almost every GM brand in future. Further, without Opel, GM will have a tougher time backing up its bids to build smaller and more fuel-efficient cars in North America.

    Finally, unlike others brands in GM’s portfolio, GM’s European operations are highly profitable. Vauxhall, in particular, has strong brand loyalty from customers. According to the Society of Motor Manufacturers and Traders, four Vauxhall models are UK’s top ten best-selling cars.

    So whilst GM has numerous challenges ahead in the short-term, (including repairing its relationship with the German government, which backed the sale and provided a loan to keep Opel afloat while it searched for buyers) today's undoubtedly tough decision was made with a focus on maintaining GM's global scale and competitiveness in the the long-term. We can only continue to watch GM closely to see how the decision pans out.

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