Bad News for Detroit

Last year there was cheering in Detroit as two American brands -- Buick and Lincoln -- captured the top spot in the prestigious American Customer Satisfaction Index (ACSI). This year the tables have turned again. After falling last year in the wake of major quality problems, Toyota’s Lexus brand (which gained 2 percent) and the Toyota brand (which gained 4 percent) tied for first place in the most recent index at 87. Those two Japanese brands were matched by General Motors’ Cadillac (with a 1-percent gain). Overall, the auto industry ACSI score improved by 1.2 percent to 83, indicating the customer satisfaction was up -- but not by much.

According to the study’s authors, customer satisfaction resurgence for international carmakers puts Detroit’s fledgling recovery in jeopardy. The report investigated customer satisfaction with an array of nameplates offered by domestic and foreign automobile manufacturers, along with an update of the national ACSI, which was up marginally.

“Not only is the increase in the nation’s overall customer satisfaction minute, its impact on consumer demand weakens in a struggling economy,” says Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. “While demand generally shifts to companies that do a good job of satisfying their customers, aggregate demand in times of economic distress is hampered by other factors, such as doubt about the future, job uncertainty and lack of discretionary income.”

What happened to Buick and Lincoln, the leaders in 2010? Both brands endured 3-percent slumps to 86 and 85, respectively. Mercedes-Benz held steady at 86, while Honda inched up to 85 percent. Among the top seven carmakers in the ACSI, five are luxury brands, with Japan’s best U.S. sellers (Honda and Toyota) rounding out the group.

Ford and Nissan didn’t finish in the top seven. But on the strength of 2-percent gains, both finished with scores of 84, bringing them very close. Volkswagen experienced a steep drop in 2010, but recovered significantly with one of the biggest gains in the Index this year -- 4 percent -- and it too had an index of 84. While VW was experiencing a big gain, BMW had a big drop, tumbling 4 percent to a 14-year low of 83. That score put BMW on par in customer satisfaction with Hyundai (which gained 1 percent) and GMC (which was down 1 percent). Chevrolet experienced a big 3-percent increase, but reached an index of just 82. Kia had a 1-percent gain to finish at 81.

While General Motors and Ford got some positive news from the study, the third member of the Big Three -- Chrysler -- got nothing but bad news. It turned in the worst scores in the industry, despite that fact that its Dodge brand was up 1 percent and its Jeep brand was up 3 percent. With indexes of 79, both nameplates tied Mazda, the weakest Japanese offering. The Chrysler brand didn’t escape either. It suffered its second consecutive 5-percent slump to 76.

“Price discounting by Japanese automakers will make competition very difficult for all others, especially since industry sales remain weak,” says Fornell. “It used to be Detroit that was forced to use buyer incentives to compensate for its weaker customer satisfaction. Now, with the Japanese using discounts in addition to their strong customer satisfaction, Detroit will probably have no choice but to respond in kind, putting more pressure on profit margins as a result.”

Customer satisfaction averages for the three U.S. automakers show Ford maintaining its lead at 85, followed by General Motors at 84 (both down 1 percent from last year). Chrysler, in contrast, lags significantly behind at an average of 78, occupying the most precarious position with regard to both domestic and international competition. The ACSI is based on data from interviews with approximately 70,000 customers annually. The index was founded at the University of Michigan’s Stephen M. Ross School of Business and is produced by ACSI LLC.

Hidden Problems With CAFE Deal?

The recent deal on fuel-economy requirements that will kick in later in this decade and run through 2025 is being widely praised by a wide cross-section of industry and consumer groups, but the outcome might not be as rosy -- or non-contentious -- as it might seem now. The proposed 54.5-miles-per-gallon standard, which still requires approval, was the result of a compromise between environmental forces that were pumping for a 60-mpg standard and the car industry, which was seeking something in the 40- to 45-mpg range. The compromise that resulted wasn’t just a split-the-difference mpg figure; it also includes several more concessions to the car industry to try to turn opponents of the plan into supporters. That ploy worked, but it also riled the “greens,” and even the Sierra Club now admits that the standard might actually result in something more like a 40-mpg real-world result than the 54.5 mpg it claims to offer.

Among the biggest of the changes to the initial proposal is special treatment for light trucks, like pickups. Rather than hitting the 5-percent annual mpg increases that are required of new cars, new trucks will only have to achieve 3.5 percent annual increases during the first five years of the initiative, finally bumping up to 5 percent over the balance ending in 2025. This move was welcomed by not only the domestic Big Three, but also the United Auto Workers, who were leery of earlier proposals as job-killers.

Future controversy might erupt from the possibility of a midcourse review of the whole procedure that was also part of the compromise to draw in car manufacturers. It calls for a potential review and reworking of the regulations and implementation timetable prior to 2022, allowing manufacturers a chance to get relief if the standards actually prove to be impossible to implement, or if vehicle sales and auto industry jobs suffer. In essence, any proposed regulations for 2022 and beyond might be largely meaningless, except as a negotiating point.

Other credits worked into the proposal favor individual manufacturers and/or groups of manufacturers. For example, pickup-truck-makers would get special credit for hybridization beyond what would accrue to car manufacturers. Although all the details aren’t available as this is being written, it seems the proposal is designed to be reasonably palatable for environmental groups and the domestic car companies, while the Asian and European car companies are left to struggle.

Consumers might also struggle with the proposal, though there is a possibility that they won’t know what hit them. The administration has suggested that meeting the new standards will cost something like $2,000 per vehicle. That $2,000 is unlikely to be made up in fuel-cost savings during the vehicle’s initial ownership period. But if you want a new car, you’ll have to pay. Better fuel economy and less reliance on foreign-sourced petroleum are laudable goals, and compromise is a time-honored U.S. tradition. But this compromise might eventually serve no group well.

Heat Can Be Deadly

It seems almost inconceivable, yet, tragically, it has happened more than 500 times. What are we talking about? Children who have died of heatstroke while in a parked automobile. Leaving a child in a car alone is not a wise idea on the face of it, but it seems almost impossible that an adult could leave a child in an enclosed car long enough for the heat inside the car to prove fatal. Yet, according to Safe Kids USA, it happens 38 times a year on average. While some adults have intentionally left their children in vehicles for long periods of time, in more than half the reported incidents the driver was so distracted or forgetful that she or he simply left the child in the car without thinking when arriving at the destination. A preventable tragedy was the result in every case.

Heatstroke, an acute and sometimes fatal form of hyperthermia, occurs from prolonged exposure to excessive heat or a combination of excessive heat and humidity. In such an instance the body’s heat-regulating mechanisms -- sweating, for example -- cannot deal with the heat gain, resulting in body temperature spiraling out of control. Children are at a great risk for heatstroke since their bodies heat up three to five times faster than adults’. Leaving a child in a closed car unattended for just a few minutes can result in heatstroke.

“Don’t be fooled into thinking that this can never happen to you,” says Reggie McKinnon, a father who accidentally left his 8-month-old in a vehicle last year during a workday. “Unfortunately, I did. Before this accident, every time I would read of a child dying in a parked car of hyperthermia, I too would ask, ‘How could they forget their child? I would never do that. That only happens to people who are uneducated, drunk, drug addicts; not me.’”

Yet it did happen to him, and it can happen at any time. This summer has been especially hot and humid in many areas, but even if the weather cools off, it doesn’t mean the risk vanishes.

“These tragedies happen more often than one would think, even at temperatures in the low 50s,” said Meri-K Appy, president of Safe Kids USA. “And unfortunately, the number of heatstroke deaths from children being unattended in vehicles is trending upwards. As of today, 500 children have fallen victim to this tragedy. That’s why our goal is to create awareness and educate the millions of drivers on ways to stop these heartbreaks.”

Here’s what parents and caregivers need to do:

Lock cars and trucks.
Thirty percent of the recorded heatstroke deaths in the U.S. occur because a child was playing in an unattended vehicle. These deaths can be prevented by simply locking the vehicle doors to help assure that kids don’t enter the vehicles and become trapped.

Create reminders.
Many child heatstroke deaths occur because parents and caregivers become distracted and exit their vehicle without their child. To help prevent these tragedies, parents can place a cell phone, PDA, purse, briefcase, gym bag or something that is needed at their next stop on the floor in front of a child in a backseat. This will help you see your child when you open the rear door and reach for your belongings. In addition, set the alarm on your smartphone as a reminder to drop your child off at day care, and set your computer calendar program to ask, “Did you drop off at day care today?” Establish a plan with your day care so that if your child fails to arrive within an agreed-upon time, you will be called within a few minutes. Also, be especially mindful of your child if you change your routine for day care.

To prevent a tragic situation as it is occurring, dial 911 immediately if you see an unattended child in a car. EMS professionals are trained to determine if a child is in trouble. Children are much more vulnerable to heatstroke than adults, so check inside vehicles and inside their trunks first if a child is missing.

2012 Scion iQ: Great Expectations

We’ll soon find out if America is ready for what is being billed as the world’s smallest four-seat car. The Scion iQ is only 10 feet long, yet it will accommodate four people -- in a way. The “micro-subcompact” will arrive in Toyota-Scion dealerships this October, with a national launch slated for 2012. As you might guess, the iQ is not designed for the “Kate Plus Eight” crowd, but neither is it aimed at the stars of “Little People, Big World.” Instead, Scion says its new offering is designed to meet the needs of a new trendsetting generation of urban drivers, and it further claims that the iQ is a small car that offers the functionality and comfort drivers expect from a car twice its size.

How does it do so much with so little? The iQ contains six (yes, six) engineering innovations that are responsible for the iQ’s ability to be small in size, but large in capability. A compact front-mounted differential, high-mounted steering rack with electronic power-steering, and a compact air-conditioning unit enabled Scion engineers to make significant decreases in front-end length. In addition, the iQ is equipped with a flat gas tank housed beneath the floor that reduces rear overhang. Slim-back front seats optimize rear legroom, while the innovative (wacky?) “3+1” offset seating arrangement allows one adult to sit behind the front passenger and a child or small package behind the driver. (Our guess is a package would be more comfortable there than a child.)

The iQ isn’t so small that you can pick it up and take it into your apartment, but it’s close. With its minuscule 78.7-inch wheelbase and overall length of only 120.1 inches, it can park in spaces that might be difficult for a Honda Civic. In fact, it is only a little over 1 foot longer than it is wide. Happily, power comes from something more than a tightly wound rubber band. Instead, it offers a 1.3-liter, four-cylinder engine that produces a rather robust 94 horsepower and 89 pound-feet of torque, teamed with a continuously variable transmission for optimum efficiency. Interestingly, fuel economy is not as high as you might guess given the car’s diminutive size. Its EPA-estimated combined fuel economy rating is 37 miles per gallon.

Befitting its premium microcar label, the iQ is fitted with an impressive list of items for your safety, comfort and convenience. Included in the array are an industry-leading 11 standard air bags, including the world’s first rear-window air bag. (It’s almost like the air bags have air bags.) Also standard are antilock brakes (ABS), electronic brake-force distribution (EBD), brake assist (BA), traction control (TRAC), vehicle stability control (VSC), Smart Stop Technology brake-override, and a tire-pressure monitoring system. Also standard is the Scion Drive Monitor, which displays information, such as outside temperature, average MPG and an eco-drive indicator that helps the driver maximize the iQ’s fuel efficiency. The standard audio system might not let you tune in to radio broadcasts from Mars, but almost. The AM/FM/CD/USB 160-watt Pioneer audio system features Bluetooth connectivity, which allows hands-free phone connection and streaming audio capability, plus HD Radio. The iQ will have a suggested retail price of $15,265.

Photo Credit: Toyota - Scion

100 Years of Chevrolet

In 1911, if you asked Billy Durant -- the prototypical American promoter/businessman -- if Chevrolet Motor Company would sell 180 million vehicles by 2011, he probably would have said, “Damn right it will.” That was just the kind of guy William C. Durant was: always eager to make a deal. And if blowing smoke made the deal all the bigger, he wasn’t above that either. But in the case of Chevrolet, which he co-founded with race driver Louis Chevrolet on Nov. 3, 1911, Durant would have been spot-on. The former wagon-maker hit the mother lode when he created the brand whose symbol has become famous the world over. But, as with most things in Durant’s up-and-down career, it wasn’t easy.

With a gift for promotion, Durant was already a successful businessman by the time he first dipped his toe in the infant automobile business in 1904. Largely on the strength of his advertising and marketing skills, his Coldwater Road Cart Company was one of the country’s top-selling manufacturers of horse-drawn carriages. But when Durant took his first spin in a motorcar, he immediately realized that the horse-drawn carriage would soon go the way of, well, the horse-drawn carriage. He quickly rounded up a group of investors and purchased Buick Motor Company from its founder, David Dunbar Buick, who was also responsible for the process of bonding porcelain to iron, giving us the modern bathtub.

Buick was a burgeoning company, and Durant’s sales genius made it even bigger, turning it into the bestselling automobile brand in the pre-Ford Model T era. But that didn’t satisfy Billy Durant, a man whose dreams were always bigger than the next guy’s. He quickly bought up several other motorcar companies, including Oldsmobile, Cadillac and Oakland, which in the 1920s would morph into Pontiac. In 1908, he named the amalgamation of many car companies General Motors and seemed to be headed for domination of the American car market. But the rise of Ford Motor Company and other factors conspired to end his reign at General Motors just two years later.

Undaunted, by the end of 1911 he and Chevrolet (the man, not the company) had put together another car company, which was named to capitalize on the French race driver’s on-track exploits. Not that the first Chevrolet was a racing machine. The five-passenger touring car was powered by a six-cylinder engine that produced just 40 horsepower, though it did use twin camshafts. Dubbed the Classic Six, the first Chevrolet sold for $2,150, making it affordable only for the well-to-do. But at the same time he came to market with the Classic Six, Durant was also keeping an eye on Henry Ford, who was beginning to enjoy unusual success with the low-priced Model T.

Chevrolet’s first attempt at a low-priced car was the Series H, which he brought to market in 1914. With a suggested retail of just $750, the Series H was squarely aimed at the Model T. Like the Ford, it was powered by a four-cylinder engine, and it was a significant sales success, dwarfing the sales of the more expensive Chevrolet models. Buoyed by the Series H, Durant decided to continue on that path, creating the Four-Ninety, a car named for its retail price of -- you guessed it -- $490. In 1916, Chevrolet sold 110,000 Four-Nineties. That was just a fraction of the number of Model Ts that were sold that year, but still enough to establish Chevrolet as a key competitor in the low-priced market, a position it still holds to this day.

The success of Chevrolet allowed Durant to regain control of General Motors, but the post-World War I recession and boardroom politics resulted in his final ouster from the corporation in 1920. Ever the promoter, Durant would go on to found another car company, this time bearing his name, but his crowning achievement might well have been the creation of that quintessential American brand: Chevrolet.

Photo Credit: Getty Images