August 23, 2010

The Rick Report: It's Time to be Firm with CONGRESS on Trade Pact
AIADA Chairman Rick DeSilva writes that an editorial on trade in Automotive News got him thinking recently. The piece is titled, "It's Time to be Firm with Korea on Trade Pact." In it, the author or authors suggest that the South Korea - U.S. free trade agreement (KORUS FTA) needs to be renegotiated, specifically the sections of the agreement related to the auto sector. DeSilva disagrees. The agreement, as it was drafted and accepted by both countries three years ago, is fair and well-structured. Is it perfect in every way? No. But it was negotiated in good faith, and it will absolutely boost the economies of both the U.S. and South Korea. Re-opening negotiations on this extremely detailed and delicate pact would be like cracking an egg and then trying to put it back together again. Impossible. The U.S. is being left out in the cold on trade, and it is time to look beyond the tired old argument of "us vs. them" and "Detroit vs. everyone else". Those simplistic divisions no longer make sense in the global world in which we live, where 95 percent of consumers live outside the U.S. Embracing the pact means embracing new competition, new opportunities, and new prosperity. Click here for AIADA Chairman Rick DeSilva's entire column on the importance of ratifying a pending free trade pact between the U.S. and South Korea.

Hyundai, Kia Go Upscale, Add Segments and Pizazz
Hyundai and Kia are trying to hold on to their U.S. sales momentum by entering new segments, moving the brands upscale, and bringing out vehicles with more eye-catching design. Automotive News reports that Hyundai and Kia were part of an exclusive club last year: They were two of only three brands to achieve a sales gain in the United States. And each has improved its market share in 2010. Automotive News reports that as the two Koreans launch new and redesigned products, they hope to carve out distinct identities and go after different customers. Dave Zuchowski, Hyundai Motor America's sales boss, says the brand is pursuing baby boomers who in the past have sought quality and reliability in Honda and Toyota showrooms. On the other hand, Kia is targeting younger buyers with vehicles made to be stylish and fun to drive. Both are squeezing into new niches. Hyundai plans its $60,000-plus Equus sedan and the small, sporty Veloster coupe. Kia may replace the Rondo compact minivan with a tall five-door model based on the same platform as the Hyundai i30 sold in Europe. The brands also are moving upscale with the likes of the Equus, Hyundai's redesigned Azera and Kia's Cadenza successor for the Amanti. Click here for Automotive News' coverage of Hyundai and Kia's strategy to continue gaining customers in the U.S. auto market.

BYD Says Growth Will Slow Further
BYD Co.'s first-half net profit more than doubled from a year earlier, as the Chinese battery and car maker benefited from Beijing's measures to boost car sales. But Chairman Wang Chuanfu said in a written statement Sunday that sales growth in China's automobile market slowed down during the second quarter. He added that "modest growth" is likely for the domestic auto industry in coming months. According to the Wall Street Journal, the Shenzhen-based company also said it intends to establish regional sales offices in North America and Western Europe to seize greater market share and generate more revenue. BYD plans to sell its all-electric car, the e6, in the U.S. later this year. Established in 1995, BYD began as a manufacturer of rechargeable lithium-ion and nickel batteries and branched out into producing cellphone parts and alternative-fuel cars. The automaker, which benefited from Beijing's stimulus measures last year to encourage auto purchases during the global economic downturn, sold 450,000 cars in 2009, more than double the 170,000 cars it sold the previous year. The stimulus measures boosted overall sales in China, helping it overtake the U.S. as the world's biggest auto market in 2009. For more on Chinese automaker BYD's success, click here.

Even Free, Your Maintenance May Vary
More automakers are offering free scheduled maintenance. According to the New York Times, how much of a benefit these programs actually offer consumers depends on the brand of vehicle under consideration and the terms and duration of the coverage. Typically, tasks like oil and filter changes, listed in the owner's manual as required for proper upkeep but not covered under the vehicle's warranty, are included. Some brands also cover items that are normally expected to wear over time, like brake pads and windshield wiper blades. In April, as Jaguar was introducing its redesigned flagship sedan, the 2011 XJ, the company announced that it would provide complimentary scheduled maintenance for five years or 50,000 miles, starting with its 2011 models. In June, with the debut of its 2011 CTS Coupe, Cadillac said it would provide buyers of all 2011 Cadillacs free scheduled maintenance for four years or 50,000 miles. Cadillac and Jaguar join other brands, including Audi, BMW, Land Rover, Lexus, Mini, Saab, Volkswagen, and Volvo, in offering some level of no-charge maintenance services to their owners. But the fine print shows that savings can vary widely; some cover only the first oil change, while others cover oil changes and other services for several years. Click here for more on the differences in free maintenance plans being offered by today's automakers.

$375,000 Lexus LFA: Ferrari Fighter or Exotic Fantasy?
In the hermetic bubble of a racetrack - where economic reality has no pit pass - the Lexus LFA makes perfect, glorious sense. Lawrence Ulrich at the New York Times writes that as he rocketed around New Jersey Motorsports Park, this supercar physically compelled him to switch off skepticism, pay heed to the racing line, and happily marinate in waves of sensory stimulation: the Formula One shriek of its 552-horsepower V-10, the tightrope balance, and technical precision that makes even a Corvette ZR-1 feel like a Tinkertoy. While he's still in the driver's seat, he asked: is the LFA worth $375,000? Sure, for the rare person who would prefer a supercar from Japan, not Europe. Asked the same question after he'd skimmed the latest unemployment figures or calculated the relative fun of, say, a $135,000 Porsche 911 Turbo, and the answer was, what, are you nuts? Such contradictions make the LFA fodder for one of the year's most interesting auto debates. Judged purely as an adrenaline-inducing performance tool, the Lexus tops a number of supercars Ulrich has driven. The LFA is the kind of machine that might inspire Lexus or Toyota to inject some spirit into their lineups, or to create sports cars that real people can afford. Click here for a photo gallery of Lexus LFA. Click here to read Ulrich's opinion on the finer points of driving Lexus' new supercar.

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