Porsche Designs the First Volkswagen

To many of us who grew up with the car, it seems that the Volkswagen Beetle has been around forever. But it was on a summer day 75 years ago (June 22, 1934) that the Stuttgart, Germany-based company that now lives on as Dr. Ing. h. c. F. Porsche AG received the go-ahead to build the first Volkswagen. It was the beginning of a process that would create automotive legend.

By the time his technical and design firm got the commission from the Reichsverband der Automobilindustrie (in other words, the Association of the German Reich of the Automotive Industry, or RDA), Dr. Ferdinand Porsche was already world-famous as an automotive visionary. In the course of his career that had started in the 1890s, Porsche had developed no less than seven compact and small cars for various manufacturers. As the ultimate result of these projects in terms of technology and design, he finally created the Volkswagen in 1933, presenting the concept to the Reich Ministry of Transport on Jan. 17, 1934, in his Study for the Production of a Germany People’s Car.

Because there was a close collaboration between the Nazi regime and the German auto industry, political leaders had to be convinced of the worthiness of the concept that Porsche and his constructors had developed. That process took five months after the study was submitted, but in June, 1934, Dr. Ing. h.c. F. Porsche GmbH received the order to develop the car at the initiative of the Reich. The original agreement was to build only one prototype of the Volkswagen, but later in the year, the RDA increased the order to three cars, which were assembled in the garage of Ferdinand Porsche’s private residence.

The first Volkswagen prototype was dubbed the “V1” (for Versuchswagen, or “test car”). Though Porsche’s house was a limiting workplace, the V1 was ready to go almost exactly a year after the official development brief. Dr. Porsche presented the “saloon” to an RDA technical commission in July of 1935. The second test car, a convertible code-named “V2,” was delivered the following December.

For a time, it looked as if the Volkswagen concept might fall by the wayside not because the two prototypes were failures, but quite the contrary, because they were so good. With its central tube frame, torsion bar suspension and air-cooled four-cylinder “boxer” engine at the rear, the Volkswagen prototype was seen by the German auto manufacturers as so advanced it would become a serious competitor to their existing models. Fearing they might have to retool, the manufacturers began to pressure the RDA to drop the project. Instead, the German government -- headed by a guy named Adolph Hitler -- decided to change the game by building a separate plant for the new car, the Volkswagenwerk. Porsche was instrumental in the technical development and planning of the production facility after visiting several American automobile factories to learn the state-of-the-art techniques in car manufacture. Construction work on the factory started in May 1938 in the small town of Fallersleben (now Wolfsburg) just as a series of 30 prototypes (VW30) built by Daimler-Benz AG were concluding their large-scale testing in a regimen that covered a total of 2.4 million test kilometers.

By late 1938, the newest Volkswagen prototypes were hardly different from the subsequent production model that was poised for full-scale manufacture in 1939. Instead of a “marketing campaign,” the efforts put behind the new Volkswagen were more like a political movement. Rechristened the “KdF-Wagen,” a tangible expression of the German Reich’s “Kraft durch Freude” or “Strength through Happiness” strategy, the new beetle-shaped car was priced at an extremely low level: 990 reichsmarks. With that kind of price, it was attainable for most blue-collar workers, and the government instituted a plan in which potential purchasers were able to save 5 reichsmarks a week toward the purchase of a Volkswagen. But when World War II erupted in September of 1939, not one of the roughly 340,000 prospective buyers had reached his savings target and so not one single Volkswagen was delivered to a private customer. That would have to wait more than six excruciating years as the Hitler regime was defeated.

Fiat Controls Chrysler -- Now What?

One year ago, if you had asked auto industry analysts how to solve Chrysler’s chronic problems, we doubt that one of them would have said “Fiat.” Even though the venerable Italian auto company has reinvented itself in this decade, improving its status from laughingstock to midlevel player, it is still not looked upon as an industry leader. In fact, there are those close to the European market who would tell you that the success wrought by Fiat CEO Sergio Marchionne has largely been done with mirrors and puffs of smoke. Now, Fiat will be tested in the high-stakes U.S. market with the white-hot light of the media glaring down, interest piqued by the fact that none other than popular President Barack Obama anointed Fiat as the company that could pull a bankrupt Chrysler out of the woods.

While some might harbor lingering doubts of Fiat accomplishing with Chrysler what Daimler was unable to, one has to be impressed with the management moves Fiat made immediately after assuming control of Chrysler courtesy of the bankruptcy court and the U.S. Treasury Department. Among the best of those moves, in many analysts’ estimation, was retaining auto industry veteran Jim Press and giving him further latitude in directing American operations. Former head of Lexus and Toyota in the United States, Press has won praise for both his decisiveness and his personable nature -- two excellent qualities in a leader.

Analysts were also impressed that Marchionne moved immediately to place profit-and-loss responsibilities on individuals who will lead the Chrysler, Dodge, Jeep and Mopar brands. This should give clarity to the business that was harder to determine under the previous structure. As Marchionne is well-aware, the acquisition was the easy part; now, making Chrysler a functioning and profitable arm of Fiat is the challenge.

Questions about the Chrysler-Fiat marriage linger, however. Now that Chrysler has been married off to Fiat, the result of the rapid maneuverings of the Administration’s auto industry task force, it might seem to many that the Fiat-Chrysler hookup was the only option. That is how the administration positioned it to the press. And to be fair, as Chrysler’s situation deteriorated last summer and fall, there were few suitors eager or even willing to take on Chrysler’s big losses and dwindling market share in a period of economic turmoil. But there was one potential suitor, which was having troubles of its own, that was involved in an on-again-off-again romance with Chrysler: General Motors. And a GM-Chrysler merger was among the hot topics in the automotive rumor mill last spring.

Many analysts were cool to the idea because they had a difficult time figuring how cash-strapped Chrysler and cash-strapped GM could be worth more together than they were worth individually, but that was looking through the lens of a traditional, privately financed merger. Had $50-60 billion in government financing been thrown into the equation -- as has now been done with the Chrysler and GM bailouts -- the analysts’ thinking might well have been different.

An acquisition of Chrysler by GM had the potential to push GM’s market share back up to well above the 30 percent mark. GM would have acquired the Jeep business and Chrysler’s popular minivans, filling holes in its model lineup. Further, many analysts believe that combining the GM and Chrysler cultures would have been a much easier task than the shotgun marriage between Chrysler and Fiat. After all, Chrysler already suffered through a marriage with another European company that turned out badly. It is hard to imagine that a combined Chrysler-Fiat won’t have growing pains and a period of adjustment.

So did the automotive task force make the right call in picking Fiat as Chrysler’s partner while leaving GM to fend for itself? We’ll never know for sure. But what we do know is that all three companies still have the fight of their lives ahead of them.

Crossovers: The Decade's Vehicle Success Story

So just what is a “crossover”? Not only is it among the hottest vehicle types in a decidedly not-so-hot market this year, but it is also essentially a cross between a car and an SUV. More precisely, it is a high-profile vehicle that looks and behaves much like a sport-utility vehicle but is based on a car platform rather than a truck platform. Though nobody talks about the crossover craze the way they did about the SUV craze of the ’90s, the new vehicle type has proven to be among the most popular of the decade.

Perhaps the biggest reason for the success of the crossover segment over other segments is that there are just so darn many of them in all shapes and sizes and more are being introduced, seemingly every day. Crossovers are also appealing to a wide range of buyers because they offer much of the versatility of an SUV but the way they ride, handle and offer fuel economy is much more analogous to a sedan. In addition, their taller profile makes them easier to get in and out of than a conventional sedan, and many people like their upright seating.

These days, because of the soft automotive market, another thing people like about them is their affordable prices. Very often, these vehicles are discounted by several thousands of dollars versus MSRP, and they are usually less expensive than equivalent traditional SUVs. The “deals” take a number of forms: a combination of factory-to-customer cash, factory-to-dealer cash and special financing offers. Some great lease deals are also available on crossovers right now.

Sound appealing? Here are some crossovers worthy of your attention:

Honda CR-V
One of the granddaddies of all crossovers, the small CR-V was originally introduced as an SUV, but it offers all the advantages of the typical crossover in terms of ride, handling and fuel economy. It has grown more sophisticated through the years, but it’s still a bargain.

Toyota Venza The Venza has moved the crossover even closer to the sedan than many of its brethren, and it virtually eschews any semblance of off-road capability. In the old days, we would have called the highly styled Venza a station wagon.

Buick Enclave Luxury, style and quality from an American-based manufacturer? It’s all there in the Buick Enclave. This is an easy-riding vehicle that looks great, and it offers a wide variety of luxury amenities.

Acura MDX One of the most popular luxury crossovers, the MDX combines a future-look exterior with abundant space and a sport-sedan level of handling and performance. Some might be turned off by its looks, but the technology under the skin is stellar.

Chevrolet Traverse Based on the same platform as the Buick Enclave, the Traverse does many of the same things as the Enclave but at a much lower price. It is well-built and a great alternative to pricier crossovers in its size class.

Volvo XC60 This is touted as the safest Volvo of all time, and that’s really saying something. Beyond that, it might also be the best-looking Volvo of all time, with impressive exterior and interior style that transcends the stolid Volvo image.

Porsche Cayenne The Cayenne doesn’t hold all that many people or that much stuff, it’s not all that economical to purchase and its fuel economy is nothing to text home about. But of all the crossovers, it might well be the most fun to drive. And interestingly, it offers serious off-road capabilities in addition to its top-notch on-road abilities.

In Unsatisfactory Economy, Satisfaction Is Key

General Motors might be in bankruptcy, but its Cadillac brand is not bankrupt in terms of customer satisfaction. For the second straight year, Cadillac ranked highest among new-car owners in the prestigious AutoPacific Annual Vehicle Satisfaction Awards (VSA). Cadillac was able to capture the Highest Satisfaction Brand honors even with the turmoil surrounding General Motors and the industry as a whole.

While the current negative economic news has put a pall over the industry, other brands found reasons to smile as well. Riding the strength of its choice as the North American Car of the Year, Hyundai saw its overall brand satisfaction ratings jump 11 positions, earning it 2009 Rising Star honors. The Korean manufacturer’s move up topped the improvements by any manufacturer in the survey, and the Hyundai brand scored higher in 40 of 48 rating categories in 2009 compared with 2008. Two Hyundai products took individual Vehicle Satisfaction Awards this year: the Genesis in the Aspirational Luxury Car category and the Sonata in the Premium Midsize Car class.

“These are difficult times, with news of automaker bankruptcies, companies restructuring and dealer closures a daily occurrence,” said George Peterson, president of AutoPacific. “Clearly, the dynamics surrounding the Vehicle Satisfaction Award in 2009 are far different from anything we’ve seen in many years. Winners needed to overachieve to earn their awards.”

While Hyundai shocked some skeptics with its meteoric rise, a well-established name topped the leader board among individual models. The Lexus LS was the vehicle that registered the highest overall satisfaction in 2009. The LS, a large luxury sedan, scored 99 points above the industry average to place first among all 2009-model-year vehicles. The truck or SUV with the highest overall satisfaction score was the Cadillac Escalade luxury sport-utility, contributing to Cadillac’s win as the top-ranked brand for vehicle satisfaction.

As an indicator of just how competitive today’s auto market is, Vehicle Satisfaction Awards went to 10 different manufacturers. Global sales leader Toyota led the pack with six winners (Toyota 3, Lexus 2, Scion 1), Ford had four (Ford 3, Lincoln 1), Hyundai/Kia had three (Hyundai 2, Kia 1), Chrysler had two (Dodge 1, Jeep 1) and General Motors also had two (Cadillac 1, Chevrolet 1). Honda, Land Rover, Mitsubishi, Porsche and Volkswagen each took top honors in one segment.

The buyers of vehicles included in the Vehicle Satisfaction research purchased or leased their new vehicles during the fourth quarter of 2008. The relatively new owners judge their vehicles on value and satisfaction across a wide range of attributes. The winners were vehicles that performed well in 48 separate categories that objectively measure the ownership experience. Below is a list of the top 2009-model-year performers:

Highest Satisfaction Brand: Cadillac

2009 Rising Star: Hyundai

Individual Segment Award Winners, Passenger Cars
Premium Luxury Car: Lexus LS
Aspirational Luxury Car: Hyundai Genesis
Luxury Large Car: Lincoln Town Car
Luxury Midsize Car: Lexus ES
Premium Midsize Car: Hyundai Sonata
Midsize Car: Ford Fusion
Image Compact Car: Toyota Prius
Compact Car: Mitsubishi Lancer
Economy Car: Honda Fit
Sports Car: Porsche 911
Sporty Car: Scion tC 

Individual Segment Award Winners, Light Trucks
Large Pickup: Dodge Ram 1500
Compact Pickup: Ford Explorer Sport Trac
Luxury Sport Utility: Cadillac Escalade
Large Sport Utility: Chevrolet Tahoe
Premium Midsize Sport Utility: Ford Explorer
Midsize Sport Utility: Jeep Liberty
Luxury Crossover SUV: Land Rover LR2
Large Crossover SUV: Mazda CX-9
Premium Midsize Crossover SUV: Toyota Venza
Midsize Crossover SUV: Volkswagen Tiguan
Compact Crossover SUV: Kia Sportage
Minivan: Toyota Sienna 

The Most Highly Recommended Cars

Loving something is one thing; recommending it to a friend, now that’s something else again. For example, we presume you love your wife, but would you recommend her to a friend? OK, perhaps we’re straying a bit from the topic at hand here, which is automobiles, and more specifically, those automobiles that consumers are most likely to recommend to friends. It is, when you think about it, a good measure to examine. It goes beyond mere satisfaction, putting some of the onus on the person who is considering making a recommendation. (By the way, would you recommend your wife to a friend?)

AutoPacific, a California-based market research firm, has just used this gambit to get a new handle on the best cars and trucks in the land. The company did this by analyzing recommendation intentions from 25,000 new-car drivers who purchased or leased new cars or light trucks from September to December of 2008…and what a fine period that was.

“Typically, car buyers are very pleased when they first drive their new car off the dealer lot. But just as a vehicle’s worth depreciates over time, some car owners’ level of confidence depreciates,” said George Peterson, president of AutoPacific. “We have quantified their level of confidence to see which new-car owners will recommend their model most, and this is information which will help new car shoppers make informed, confident buying decisions. While many owners can be happy with their new cars, it takes another level of confidence to recommend it.”

So which brand of vehicle leads the pack? Perhaps unsurprisingly it is Porsche. In a close race, the vaunted luxury sports car brand garnered the highest owner recommendation of 91 percent. It is no mystery that Porsche owners love their cars and are evangelistic about them.

“Porsche owners’ feelings for their cars run deep; some might call it devotion,” Peterson said. “Clearly that is still the case as the Porsche lineup all scored well in this survey.”

While Porsche scored big on the brand side, a lesser-known vehicle took the top spot among individual models. The vehicle -- car or truck -- registering the highest overall owner recommendation in 2009 is the Infiniti G37, which was recommended by 95 percent of new owners. The truck with the highest overall recommendation score is the Ford F-150, recommended by 89 percent of its owners. In a tie, the SUVs with the highest overall recommendation score are the GMC Yukon XL and Honda CR-V. They were recommended by 93 percent of their owners.

At the manufacturer level, multiple top-ranking award winners include the following: Toyota with six top rankings (Toyota 6, Lexus 2), Ford with four (Ford 5, Lincoln 1), General Motors with two (Chevy 1, GMC 1), Chrysler with two (Jeep 1, Dodge 1) and Honda with one. The research objectively measured owner recommendations of newly purchased or leased passenger cars or light trucks by ranking owners’ responses to the question “Would you recommend your new vehicle to a friend or relative?” Scores are based on the responses, with choices ranging from “Yes, definitely,” “Yes, with reservations” or “No.” An “NFW” response was not included in the survey questions.

Models top-ranked for their percentage of owner recommendations were also identified in individual vehicle categories. Here are the winners:

Passenger Cars
Premium Luxury Car: Lexus LS
Executive Luxury Car: Jaguar XF
Aspirational Luxury Car: Infiniti G37
Large Car: Toyota Avalon
Luxury Mid-Size Car: Lexus ES
Premium Mid-Size Car: Toyota Camry
Mid-Size Car: Volkswagen Jetta
Image Compact Car: Toyota Prius
Mainstream Compact Car: Subaru Impreza
Economy Car: Honda Fit
Premium Sports Car: Chevrolet Corvette
Sports Car: Nissan 350Z
Sporty Car: Ford Mustang

Light Trucks
Large Light-duty Pickup: Ford F-150
Large Heavy-duty Pickup: Ford F-Super Duty
Compact Pickup: Toyota Tacoma
Luxury Sport Utility: Lincoln Navigator
Large Sport Utility: GMC Yukon XL
Premium Midsize Sport Utility: Toyota 4Runner
Midsize Sport Utility: Dodge Nitro
Compact SUV/Off-road Vehicle: Jeep Wrangler
Luxury Crossover SUV: Land Rover LR2
Large Crossover SUV: Ford Flex
Premium Midsize Crossover SUV: Ford Edge
Mainstream Midsize Crossover SUV: Honda CR-V
Compact Crossover SUV: Honda Element
Minivan: Toyota Sienna