Author: vandeveremarketing

Written by: Joe DeMatio on December 19 2011 11:11 AM

We received our first serious snow dump in Ann Arbor last week, but the Automobile Magazine fleet of Four Seasons test vehicles was ready for the cold, since we had fitted each car with a set of winter tires from various manufacturers well before Thanksgiving with the assistance of the Tire Rack, our official wheel and tire partner. We’ve been big proponents of winter tires at Automobile Magazine for more than two decades, and although I notice more and more vehicles here in Michigan are wearing them in the cold months, those cars are still definitely in the minority. I personally have counselled many friends, relatives, and acquaintances to use winter tires, preferably on a second set of dedicated wheels, but often the reason they don’t is due to the extra cost. When it’s December and the snow starts flying, a lot of people would rather buy a couple of plane tickets to Florida than invest $800 in a set of winter tires, which doesn’t seem nearly as exciting.

Last winter, I attended a media event in Quebec City at the invitation of John Taylor, whom I knew years ago during his tenure as head of product PR for Bridgestone. Taylor is now working for a tire company I’d never heard of and one I’d wager most Americans haven’t heard of, either, GT Radial. The company is a division of GiTi tire, which was founded in 1951 in Indonesia to make bicycle tires and only started making passenger-car tires in 1996. Although we’ve never heard of them, GiTi and GT Radial are huge, making millions of tires a year in factories in both Indonesia and China, supplying everyone in the Chinese market, from BMW to General Motors, and selling tires in some 100 countries worldwide. They also own Seyen, which makes wheels. The company’s international logo is an elephant, harking back to the original name of the firm in Indonesia, Gajah Tunggal, or “Supreme Elephant.” GT Radial is expanding in the North American market with a line of value-priced tires, including the IcePro and WinterPro winter tires. To give you an idea of the pricing, the IcePro ranges from $95 to $105 per tire in the common 195/65/R15 size for cars and $125 to $145 for the common 215/70R16 size for many SUVs and light trucks.

Up in Quebec, GT Radial had us drive front-wheel-drive cars shod with IcePro tires through a short slalom course on an indoor hockey rink, back-to-back with Firestone WinterForce tires under the same conditions. The GT Radials seemed to provide similar braking and turning capability as the more expensive Firestones. Then we stepped outside to a circular track set up on an adjacent athletic field. The sun was shining brilliantly but it was about 0 degrees Fahrenheit and the track was covered with several inches of snow. Here, we got to have some fun power-sliding rear-wheel-drive BMW 3-series sedans shod with both GT Radial WinterPro rubber and a comparable Firestone model. Again, the GT Radials seemed to acquit themselves pretty well, although these tests were purely seat-of-the-pants impressions, and we had no on-road driving at all.

This fall, I had a conversation with Woody Rogers, a product information specialist at the Tire Rack, about low-cost winter tires, GT Radials in particular. “I don’t have firsthand knowledge of the brand,” he admitted, “but with any third-tier brand, everything comes with a price. Their tires might be heavier than [more expensive tires], you probably have a faster wear rate on clear roads, and you probably don’t have ultimate ice traction, like in a packed-down, glazed-over intersection….that might be where they give up [some advantage] versus a more expensive tire. In deep snow, it’s the tread depth and the tread design more than the compound that are important.

“It takes effort and cost to make the tire relatively quiet on clear roads,” Rogers continued. “To handle well and wear well on clear roads, to stop the car well on clear roads. Just working in the snow is not the whole story with a winter tire, because it’s not just a snow tire. Most of the time, in most climates, the roads are clear to drive on, and it’s once or twice a week you might get a snowfall that you have to drive home in. 70% of the time the roads are wet, maybe slushy, and the tire has to work in that condition as well.”

I asked Rogers what the least expensive brand of winter tires is that the Tire Rack carries: “Well, across the board it’s probably the Firestone Winter Force or the General Ultimax Arctic, which will probably last 2 years, 2 seasons.”

“It’s better to have some winter tire than no winter tire, isn’t it?” I asked. “Indeed,” Woody confirmed. “I would put those [Firestone and General] up against any all-season tire for snow and ice traction, and it’s an incremental step. You put a better winter tire on and it’s [even better]. At some point you’re certainly better off having something than nothing. A new set of cheap winter tires is better than a 2-year-old set of all-season tires. I guarantee that’s the case.”

If you have a new car that you intend to keep for four, five, or six years, the best plan of action is to buy a set of high-quality winter tires from the outset, Rogers advises. That way, both the original-equipment all-season tires and the winter tires will have plenty of useful life for as long as you own the car. “Often when people keep a car for five years,” says our man at the Tire Rack, “that last winter on the original all-season tires is really a stretch,” as the winter performance can be quite compromised.

If, on the other hand, you have an older car that you don’t plan to keep much longer, a set of less expensive winter tires–whether Firestone, General, or GT Radial–might make sense. The Tire Rack doesn’t currently carry GT Radial.

In any case, I’ll say the same thing now that I say every year in December: winter tires are a very smart thing to put under the Christmas tree of someone you love. True, they’re not as glamorous as an iPad or a diamond necklace, but they’re more important. Start your shopping at www.tirerack.com. You can have a set of winter tires on your car before you ring in the New Year.

US Auto Industry to Post Good Sales Year

January 3, 2012

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By AP / Tom Krisher – Monday January 2, 2012

(DETROIT) — After hitting a 30-year low in 2009, U.S. auto sales are poised for a second straight year of growth — the result of easier credit, low interest rates and pent-up demand for cars and trucks created by the Great Recession.

The sales forecast bodes well for the industry’s continued recovery and for the broader American economy.

In 2009, Detroit automakers were in peril. Car sales plunged as unemployment soared, and loans became harder to get. Chrysler and General Motors filed for bankruptcy protection. Ford avoided bankruptcy only by borrowing billions.

Now credit is more available, interest rates are low and Americans need to replace old cars and trucks they kept during and after the downturn. Millions of drivers in their teens and 20s are expected to buy vehicles, too. That could mean more jobs, more factory shifts and overall growth.

Vince Powell, a retiree from Winfield, Pa., recently traded in his wife’s 7-year-old Chrysler 300 luxury sedan for a 2011 model. The old car had 145,000 miles on it, but it was the deal he got that most attracted him: a low interest rate (2.7 percent per year), a six-year loan term and a big discount off the $31,900 sticker price.

“I’m getting a $300 per month payment,” he said just before closing the sale at Beaver Motors in Beaver Springs, Pa., near Harrisburg. “I’ve never had a new car for 300 bucks a month.”

In their effort to survive, all three automakers downsized and positioned themselves to turn profits — even if sales remained depressed. Now that sales are rising, the outlook has brightened considerably.

Automakers report U.S. sales for 2011 on Wednesday. When final figures are calculated, sales of new cars and trucks are expected to reach 12.7 million, up from 11.5 million in 2010 and 10.4 million in 2009, the worst year since 1982.

In 2012, they could climb as high as 13.8 million, close to what experts consider a healthy market — around 14 million.

December sales could reach an annual rate of 13.4 million, which would make it the second-strongest month of the year. Only November was better. Auto website Edmunds.com forecasts a 37 percent rise in sales at Chrysler Group LLC in December, thanks to new and revamped products such as the Jeep Grand Cherokee SUV and the Chrysler 200 midsize sedan.

Carmakers have announced plans to crank up factories and add thousands of jobs. Last January, Ford said it would hire 7,000 workers over the next two years. During the summer, GM said it would add 2,500 at the Detroit factory that makes the Chevrolet Volt electric car. Volkswagen hired 2,000 for a new plant in Tennessee, and Honda added 1,000 in Indiana. The industry will add 167,000 jobs by 2015, a 28 percent increase over current levels, predicts The Center for Automotive Research in Ann Arbor, Mich.

During the summer, the auto industry was adding jobs at a faster pace than airplane manufacturers, shipbuilders, health care providers and the federal government. It kept adding jobs even when the national unemployment rate rose above 9 percent, Standard & Poor’s downgraded U.S. debt for the first time and the stock market tumbled.

Government estimates show Americans spent roughly $40 billion more on new cars and trucks in 2011 than in 2009. Based on annualized figures from the first quarter of 2011, new-car spending totaled $206 billion, or 1.3 percent of the gross domestic product, Commerce Department data shows. That compares with $166 billion in 2009, about 1.2 percent of the country’s economy.

And the momentum in auto sales is likely to continue because people need to replace aging cars, said Jeff Schuster, senior vice president of forecasting for LMC Automotive, an automotive consulting company in Troy, Mich. The average American car is now 11 years old.

U.S. auto sales peaked at 17 million in 2005, when Detroit’s automakers were much bigger and overproduced cars that they were forced to discount heavily. Sales could eventually reach that level again around 2018, said Schuster, because of 70 million so-called millennials born between 1981 and 2000 who need to set up households and buy cars.

Other trends emerged in 2011. Many people bought smaller vehicles as gas prices hit a record average of $3.53 per gallon. Fuel-efficient compact cars, which have been vastly improved by automakers, are likely to unseat the midsize sedan as America’s favorite passenger car for the first time in 20 years.

At the other extreme, pickups rebounded as businesses started to replace older trucks. Sales for the year were expected to rise 11 percent, and Ford’s F-Series will remain the country’s top-selling model, a title it has held for more than three decades.

For much of the year, U.S.-based automakers took advantage of Japanese car shortages to increase sales, especially in the compact car segment normally dominated by the Honda Civic and Toyota Corolla. Japanese companies ran short of popular models after an earthquake and tsunami disrupted production in Japan in March.

Ford, GM and Chrysler saw their combined share of the U.S. market rise by 200,000 cars and trucks between the end of 2010 and November, 2011. The Detroit Three’s market share rose from 45.1 percent last year to 47 percent through November of last year. At the same time, Honda’s share fell 1.6 percentage points to 9 percent, while Toyota’s dropped 2.5 percentage points to 12.7 percent.

Schuster expects Japanese carmakers to take back some of the sales they lost.

Geoff Pohanka, who runs a chain of car dealers in the Washington area, said his December has been strong, thanks especially to the restocking of cars at his Honda and Toyota showrooms. He predicts Japanese car companies will offer incentives to regain lost sales.

Carsharing — cars for those who don’t want to own one

January 3, 2012

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By Paul A. Eisenstein

After selling his San Francisco high-tech start-up several years ago, Murtaza Hussein decided to reward himself by buying a new BMW Z4 roadster, but he quickly realized the two-seater had limited functionality and was sitting unused in his garage most days.

So Hussein decided to rent it to friends who wanted to drive the Z4 for a day or so. And that gave him the idea that other folks might like a similar opportunity — the chance to get behind the wheel of a dream car without actually buying one.

Three months ago, he launched his own twist on the car sharing concept — a company called HiGear that connects owners of high-line automobiles with people who want to drive them.

“A lot of carsharing companies focus on people who need a car to go shopping,” Hussein explained. “Our business model is for people who want to be in a car like an Aston Martin for their birthday or some other special occasion.”

Shelby Clark’s new company was also created out of personal need. He was frustrated when, on a cold winter day in Boston, he had to ride his bicycle several miles to rent a car. Why not connect with car owners who are willing to rent their own vehicles, he wondered. Unlike, HiGear, Clark’s new firm, RelayRides, focuses on mainstream automobiles, but the basic concept remains the same. The two new companies are the latest twist on a concept called “carsharing” — an idea that’s quickly gaining traction in crowded urban centers like New York, Paris and San Francisco, and also in college communities like Ann Arbor, Mich., home to the University of Michigan.

“It’s a fact of life in those places that people want the convenience of a car, but don’t want the hassle of owning one,” said Dr. David Cole, chairman emeritus of the Center for Automotive Research, or CAR, which is based in Ann Arbor, Mich. “So, I think the carsharing concept is going to work.”

Perhaps the best-known name in the emerging business is Zipcar, which was founded in 2000 in Cambridge, Mass., and which now operates in dozens of markets in the U.S., Canada and the U.K.

Zipcar’s model is more conventional than either HiGear or RelayRides. It’s a sort of hybrid adaptation of the conventional car rental business. The firm owns its own fleet of vehicles, but makes them readily available in cities like Seattle and over 230 college communities by parking them in dedicated locations that can be scattered across town or campus.

A customer gets a Zipcard, which allows them to line up a rental on the fly, 24 hours a day, 7 days a week, online, by phone, or even at the vehicle itself using a smartphone app. The Zipcard will unlock the vehicle, where the customer can find the keys tucked inside. The typical rental is for a matter of hours, rather than days, as with more conventional rental car companies.

Zipcar has formed alliances with several major automakers, including Ford, which in August agreed to put 1,000 of its vehicles in use on college campuses across the country.

“We’re targeting a generation that only knows how to buy music by the song, so paying for a car by the hour is a natural for them,” explained Scott Griffith, Zipcar’s chairman and CEO.

Earlier in the year, Zipcar lined up a deal with Toyota to offer a small test fleet of the automaker’s new Prius Plug-In Hybrid, which it will formally bring to market later this year. The carsharing service is betting that younger buyers, in particular, will be drawn to the opportunity to try out new green vehicles.

In Paris, meanwhile, a new carsharing service, launched at the beginning of the month, will scatter a fleet of up to 250 small battery-electric vehicles around the city that can be rented on the spot, much like the city’s successful public bicycle rental program.

While green-minded consumers, especially those on college campuses, are a potentially lucrative target, carshare companies like Zipcar also target older customers, notably those commuters who might occasionally need to use a vehicle for a few hours during the business day to run errands.

“You have a lot of business models in what is a work in progress,” said CAR’s Cole, referring to the emergent carsharing business.

A challenge for a company like Zipcar is supporting a large fleet of vehicles with rentals that may only run for a few hours.

RelayRide’s Clark — like HiGear’s Hussein — thinks he has found a viable alternative — simply serving as the middleman between vehicle owners and those who occasionally need to use a set of wheels.

Last week, RelayRides lined up a partnership with General Motors’ OnStar division that could greatly expand the number of vehicles it has to share. As part of an exclusive relationship that will begin in early 2012, the carsharing service will focus on GM vehicles equipped with OnStar, which means the vehicle has a built-in data link that can be used to remotely unlock its doors for an authorized RelayRides user.

The service is particularly appealing in socially active communities, according to Clark, not only because a user might find a vehicle to rent in the same housing complex or campus, but because users “love that their dollars are going back to support the local community.”

RelayRides claims the average vehicle is generating $250 in rental fees a month, with an owner keeping 65 percent of that — enough to help pay a chunk of a car loan, or maintenance costs.

HiGear, meanwhile, reports the average rental cost for vehicles — ranging from BMWs to Lamborghinis — is topping $410. HiGear gives the vehicle owner back 70 percent of that amount, although the owner also has to cover the car’s insurance costs.

Few expect carsharing to significantly reduce the number of people buying cars. If anything, says analyst Cole, automakers see the concept as a way to get potential customers exposed to their products. Eventually, echoes Ford Chairman Bill Ford, if they have a good experience they may eventually buy one of the products they first drove using a carsharing service.

Read the whole story: Here.

Have you ever used a service like this? Would you?

Are Low-Cost Winter Tires Worth the Bother?

US Auto Industry to Post Good Sales Year

Carsharing — cars for those who don’t want to own one

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