The Auto Sleuth: Ford, Subaru, China, Chrysler, BMW

Say good bye to the Ranger, but not for another year: It’s the final curtain call for one of North America’s small-truck icons. The Sleuth has learned that Ford will close the doors of its St. Paul, Minn. plant — which makes the Ford Ranger — at the end of 2009. The Ranger has been around for nearly 15 years in its current form . . . yes, it’s time for a change. Some reports have indicated that the Ranger could continue to be built in Thailand but high tariffs between the United States and Thailand would likely kill any profit. Ford sold 92,000 Rangers in North America last year, a 24-percent drop when compared to the previous year. It’s possible that Ford could entirely abandon the segment, much like it did when it recently killed off the Freestar minivan.

A non-AWD Subaru?: Diehard Subaru drivers, your brand might veer in another direction. To comply with new emissions and fuel-economy standards, Subaru could be forced to offer all-wheel-drive and its tried-and-true horizontally opposed “boxer” engines as available options rather than standard equipment. Both, no matter how good they are, are apparently viewed as hindrances to Subaru meeting new fuel-economy targets. The Japanese automaker has been making vehicles with standard all-wheel-drive since the 1980s, but its core technology could be in jeopardy. Subaru Australia chairman Trevor Amery said that if the changes were made, it would not be before 2010. “One of the reasons we chose to become an all-wheel-drive company only was so that we wouldn’t confuse people with our message — and these are some of the things that are going to stand us in good stead for some time”.

China looks to fulfill home market before beginning an export program to North America: U.S. and Canadian markets will not be flooded with an onslaught of Chinese cars anytime soon, the Sleuth hears. Despite persistent rumors that Chinese-made vehicles will soon hit our shores, China’s ambassador to the United States, Zhou Wenzhong, said at a conference recently that China’s automakers lack the production capacity to fulfill an export program. “The notion of Chinese cars flooding the U.S. market is not a real notion at the moment,” Zhou said. Because of the strong demand within China, automakers would be unable to meet the export demands of a large market such as North America as most Chinese auto plants are already running at or near full capacity. However, entry into North America is still in the long-term plan for Chinese automakers. Five Chinese automakers will show vehicles at the Detroit, Mich., Auto Show in January, indicating there is still an interest in the market. Chery, China’s largest automaker, will not attend the show.

Chrysler considers major overhaul to eliminate model overlap between brands: The Sleuth hears that Chrysler is considering giving each of its three brands — Chrysler, Dodge and Jeep — a unique identity. The move would eliminate the common practice of re-badging Chrysler vehicles for sale in more than one of its brand’s showrooms, which is largely intended to keep dealers just as happy as customers. The new plan calls for the Chrysler brand to sell the automaker’s passenger cars, Dodge to sell pickup and commercial trucks and Jeep to sell the company’s sport-utility vehicles. That would mean vehicles such as the Chrysler Aspen and Dodge Durango sport-utes would either be moved to Jeep or eliminated. While the plan is only one of several being considered, it appears to be the current front runner. According to the Detroit Free Press, a decision should be made by year’s end. The proposed plan could help Chrysler reach its goal of turning a profit by 2009. There are, however, obvious ramifications at the dealer level: possibly fewer of them, that is.

BMW won’t add another brand just yet: The German automaker has not ruled out adding a fourth brand to its automobile family, but any such plans are on hold for the time being, BMW USA boss Tom Purves said at the recent Los Angeles, Calif., Auto Show. BMW’s current brands also Mini and Rolls-Royce. Earlier this year, there was speculation BMW might acquire Volvo or Alfa Romeo. BMW later decided neither company would be a good match. “The plans on it are currently on hold,” Purves told Germany’s Deutsche Presse-Agentur. However, he made it clear the plans were not permanently scrapped. He said a fourth brand would probably be launched in North America first. “Heritage is not such an important issue here. Therefore if you were to bring a new brand (North America)could be a location where you could do that pretty successfully.”

Market indicators

Retro revivals: North American brands have been bringing back old vehicle names for decades. Toyota did it last year with the FJ Cruiser and now the company is planning to revive its Celica sporty coupe for Europe, the Sleuth hears. Toyota stopped selling the Celica in 2005. Details are scarce but a North American-bound Celica seems likely since the automaker is trying to instill its lineup with more exciting models. Earlier this year it was reported that Toyota and Subaru were co-developing a small sports car for the Japanese market but there is no information linking that car to the Celica.

2008 projected sales: Three top investors in the automotive industry — Jerry York, an adviser to billionaire investor Kirk Kerkorian; financier Wilbur Ross; and Thomas Stallkamp, a former Chrysler president — predicted a downturn in North American auto sales in 2008, one even predicting the lowest totals seen in more 15 years. According to trade newspaper Automotive News, York predicts auto sales in the United States to slip to 15.5 million units or less, representing a three percent decrease and the lowest total since 1998. Ross predicted a similar decline. Stallkamp, on the other hand, feels that 2008 sales could actually be much worse. “I’d say it’s somewhere between 14.5 (million) and 15 (million), somewhere in there and it’s hard to tell,” he said.