To Russia with Hope

Fifteen years ago, Russia was a powerful enemy of the United States and the other capitalist countries of the world. As the leader of the Communist world, its teachings and actions were antithetical to those of the free world, and within its borders free enterprise was officially treated as a disease to be eradicated. But much has changed in a decade and a half. In today's Russia, free enterprise is regarded as the key to success both by individual citizens and by the government. Because of this attitude, many of the world's car companies are flocking to Russia, seeing a growing market with unlimited potential.

It is easy to see why the world's carmakers, desperate to sell down some of the industry's endemic overcapacity, have set their sights (and their sites) on Russia. After all, Russia is a huge country (1.8 times the size of the United States) with a very large population (more than 150 million citizens.) And unlike the other "growth markets" in the world, it is not a Third World country bedeviled by illiteracy. In fact, its literacy rate is higher than that of the U.S. To auto marketers worldwide, this looks like a place where they can sell cars.

Trying to sell cars in Russia is something they have attempted with a vengeance, but the effort has been accompanied by a substantial amount of sturm und drang. After all, this is Russia -- where several centuries of characteristic impetuosity were smashed under the iron boot of Communism. To a people just beginning to taste the fruits of a free-market economy, there were bound to be upheavals, and that is just what took place in 1998.

Following the collapse of the Soviet Union (Russian Independence Day is June 12, 1990), most Western automakers took their time in assessing the Russian opportunity. But by 1998 several of them, including General Motors and Ford Motor Company, were ready to throw the dice on Rusian subsidiaries. Certainly, a huge opportunity seemed to lie before them. Though Russia's population is roughly four times that of California's, its all-time new-vehicle sales record is right around the number of vehicles sold in California in a typical year. That statistic, plus a literate, technologically skilled workforce, seemed to spell future car sales.

Despite this, the GM and Ford experience in Russia got off to a faltering start. The chief culprit was financial. In 1998 Russia's economy faced a crisis that sent the ruble tumbling versus the dollar and other hard currencies. By the time the ruble bottomed out, it was worth roughly a third of what it had been worth prior to the panic. This, in turn, made imported goods like automobiles significantly more expensive.

Another factor weighing heavily against importers is that fact that the average Russian still doesn't make much money, at least in Western terms. Because of the rather feeble personal income in Russia, its citizens most often opt to buy very inexpensive domestically built cars. Just how inexpensive are they? Some 90 percent of vehicles sold in Russian cost less than $4,500. This, of course, puts most importers at a very grave disadvantage. After all, when is the last time you saw a brand new $4,500 Chevrolet? Ford, which is planning to open a plant in St. Petersburg in the spring, will be trolling the upper-middle of the market with its Focus, an entry-level model in the U.S.

Obviously, one way to exploit the Russian market is to combine operations with Russian manufacturers. GM is doing just that, sinking $40 million into a joint venture with AutoVAZ to build a vehicle that will be marketed as the Chevrolet Niva. (No, not Nova; the Niva is a small sport utility.) Soon, GM may also control the Daewoo-operated factory in Ukraine that builds the Daewoo Nexia, which is Russia's top import model.

Another way to exploit the Russian market is to skim the cream from the very top of the market. Mercedes-Benz, BMW, and Volvo are three prestigious manufacturers who are doing just that, and all three have found that if Russian consumers have it, they flaunt it. The top-of-the-line Mercedes S-Class is the best-selling Mercedes model in Russia, and the flagship S80 is Volvo's best-selling model there. Volkswagen is another strong player in Russia, and its top dog is the Passat, not the lower-priced Golf, Polo, or Lupo.

Where will Russian sales go from here? The industry is predicting that 2001 will be a good year for Russian car sales, perhaps topping the previous record of 1.2 million car sales. (In comparison, U.S. car sales this year will be in the neighborhood of 17 million.) Imports are just a small percentage of the total, but those imports are expected to climb significantly as well. As to the future, it seems very bright as Russia joins the consumer culture of North America and Western Europe.

Based in Villeperce, France, Tom Ripley writes frequently about human relations and the world automotive scene.

Pall Over Frankfurt

To the automotive press, the Frankfurt Motor Show is like the arrival of Christmas. Exhibit hall after exhibit hall in the Frankfurt Messe is chockfull of bright, shiny new toys from all of the world's auto manufacturers. There is an air of excitement about the show that rivals that of the eve of a championship fight or a national election. Which new vehicles will win the fancy of the automotive press? Which will fall with an audible thud? Which will titillate the senses, and which will prompt a gag reflex?

This year's Frankfurt Motor Show was like no other because it virtually coincided with the terrorist attacks that resulted in tragedy in New York, Pennsylvania, and Washington, D.C. The attacks reverberated across the Atlantic Ocean as quick as you can dial a cell phone, and immediately a dark cloud descended over what is usually a gala multi-day event. Parties were cancelled, press conferences curtailed, and the normal hoopla that surrounds new-car introductions was reduced to a veritable whisper. Journalists and car company executives alike wondered when (and if) they would get home, as concerns for personal and family safety quickly overrode anything as trivial as the auto industry.

Still, the show went on, reluctantly but inexorably, and a wide variety of significant vehicles did, for the first time, glimpse the light of day. Here are some of the most important of the Frankfurt offerings for 2001.
  • BMW 7-Series
    The 7-Series is BMW's flagship sedan, and each completely new model is a bellwether for the industry. This time around, though, the exterior design of the car drew pans from several independent designers. Automotive News quoted noted designer Tom Tjaarda as saying, "Unfortunately the rear end was the first I saw of the car, and I could not believe my eyes. It is lumpy with confusing lines, and it looks as if the boot (trunk) is open." Some observers, including this one, see the overall exterior as looking very Volvoesque, which isn't bad, but is a little disappointing for a model whose previous editions have inspired many a competitive design. BMW execs are also privately concerned about the 7-Series' "joystick," which is said to control 700 functions within the car. (Quick, name 457 functions a car performs before I say Jack Robinson.) They, like journalists, wonder if rich execs who buy 7's will feel comfortable with a video game controller.

  • Lamborghini Murcielago
    Not to be confused with the Muncielago that pays tribute to a medium-sized Indiana city (okay, we're kidding), the Murcielago is the new supercar offering from the same boys who brought you the Countach and Diablo. Except they are not really the same boys, because Lamborghini is now being run by Audi, after its ownership bounced from car company to car company over the past few years. The Murcielago has a cleaner (some might say blander) exterior than the Diablo, and it is more user-friendly, which means you don't have to be a gymnast to get out of it. With 580 horsepower churning from its V-12 it is said to be capable of 205 miles per hour. Gosh, that'll get chicks.

  • Jaguar R-Coupe
    The Jaguar R-Coupe is not destined for production, according to Jag execs, but it is intended to show the future direction of Jaguar styling, which is fine with us, because this baby's a looker. It offers round headlights (albeit Xenon projector-style), driving lights (ditto), and a grille that would look appropriate on a Delage. And if the exterior isn't derivative enough (hey, derivative is fine if you're tracing around the right stuff), then get a load of the interior, which is said to have been inspired by jewelry, timepieces and upscale suitcases. The controls are highlighted by steering wheel-mounted paddles to choose up- and downshifts. Under the hood throbs a V-8 engine.

Tom Ripley reports on human behavior and business issues from his home in Villeperce, France.

Cool Weather Coolant Tips

In many areas of the United States, cooler weather is upon us, which means we've finally escaped one of the hottest summers on record. But just because the weather is turning doesn't mean that you can blithely ignore your cooling system until next summer. Though moderate exterior temperatures don't test a vehicle's cooling system the way extreme heat will, a failure can still leave you stranded. And when the temperature dips to below freezing, your cooling system gets another test. If it flunks, you're stranded again.

Just like people, cars need the right amount of fluids and care to avoid overheating or freezing. One clue to your cooling system's health is right on your dashboard. If your vehicle's temperature gauge rises significantly while you are climbing hills, pulling a trailer, or sitting in traffic, it most likely means that the engine and cooling system are living on the edge. This can result in a sudden breakdown, and perhaps even costly engine damage.

Pep Boys, one of the nation's leading full-service automotive aftermarket retail and service chains, offers this list of preventive maintenance procedures to perform on a vehicle to make certain its cooling system is in tip-top shape:
  1. Carefully check the radiator for leaks and debris. Leaves, plastic bags, and other detritus that collects on the radiator can seriously diminish the effectiveness of the system in dissipating heat.

  2. Carefully check the radiator and heater hoses and replace any that are worn, cracked, brittle, or mushy.

  3. Flush the cooling system every 24,000 miles or according to the vehicle manufacturers' recommendation. Replace the coolant with the proper proportion of water and manufacturer-approved coolant when low.

  4. Check your cooling system for leaks. If you see a puddle under your car or notice a sweet, moist smell, it is most likely a cooling system leak. This type of puddle should not be confused with evaporator drain, which is normal and not a cause for concern. Clear liquid under the middle of the vehicle is normal with air conditioner use, while greenish orange or muddy colored liquid under the engine area is a sign of a cooling system leak.

    If there is an external leak, tighten, repair or replace leaking parts. If there is an internal leak, it may originate from various areas within the engine. This could be a serious mechanical problem. In this case, have it checked by an ASE-certified professional technician. A pressure test can determine if and where there is a leak.

  5. Periodically replace the thermostat, which controls the flow of coolant between the engine block and the radiator. When the engine is cold, the thermostat restricts the flow of coolant to the radiator, permitting the engine to heat up. As the engine warms, the thermostat opens, allowing coolant to flow to the radiator and keep the engine temperature within ideal operating limits. Never remove the thermostat without replacing it, because the engine may not perform properly if it does not warm up to normal operating temperature.
If you follow these tips, you'll find that your cooling system will see you through the fall and winter months without a whimper, and you'll be ready for another cooling system check with the green leaves of spring.

Car enthusiast and writer Luigi Fraschini lives in Cleveland, so he's anticipating the fall and winter months with trepidation... and a window scraper.

Which Auto Brands Are Most Satisfying?

How many of us want to add hassles to our lives? Certainly not car buyers, according to the recently released J.D. Power and Associates 2001 Sales Satisfaction StudySM. The survey of new-vehicle buyers confirmed that consumers continue to prefer a hassle-free new-vehicle sales experience that features non-negotiable retail pricing, by naming General Motors' Saturn as the top brand in providing satisfaction during the selling process.

Saturn is the only automotive brand whose policy is to provide consumers with non-negotiable vehicle pricing. The marque, which is experiencing rather lackluster sales due to an aging lineup of vehicles, came out on top of the study's satisfaction index for the second consecutive year. It has been a perennial high finisher in the J.D. Power and Associates Sales Satisfaction studies since it came into the market slightly over a decade ago.

"This makes it clear that the pricing model established by Saturn retailers works very effectively for its customers," said Chris Denove, a partner at J.D. Power and Associates. "What makes Saturn's performance so exceptional is that it achieves this high level of sales satisfaction with non-luxury vehicles."

Saturn's rise to the top of the charts was a bit of an anomaly, because it is not a purveyor of luxury cars. Ten of the top 12 brands in the sales satisfaction index sell luxury vehicles. Another GM division, Cadillac, bested Lexus for second place on the list. Toyota's Lexus division, which tied with Cadillac for second last year, slipped very slightly to third.

"Luxury dealers generate higher customer satisfaction scores because they provide an environment with less pressure and sell to more sophisticated customers who feel empowered when working with dealers," said Denove. "Saturn buyers, by comparison, tend to be less trustful of dealers, which makes their high satisfaction scores especially impressive."

Nissan's Infiniti luxury division placed fourth in the study; Jaguar was fifth and Lincoln was sixth. Buick, the only other non-luxury brand in the top 10, finished in seventh place; Mercedes-Benz was eighth; Land Rover ninth and Volvo 10th.

Auto dealers continue to get a bad rap in the general press, but the study proved once again that the way to buyers' hearts is through honesty and respect. "Overwhelmingly, and contrary to popular belief, most buyers believe that their selling dealer is honest and courteous," said Denove.

The study, now in its 15th year, revealed that new-vehicle buyers overall are very satisfied with the dealers who sold them their vehicles, giving them an average rating of 8.5 out of a possible 10. The findings suggest that hard-sell tactics still employed by some dealers could backfire. This is particularly important for vehicle manufacturers to understand, because more than one million shoppers each year decide not to buy a particular vehicle make simply because they didn't like the way they were treated by the dealer when they walked into the showroom.

While many car buyers are now demanding respect, they certainly haven't given up their search for the best price. The survey found the biggest reason people choose one dealer over another is dollars. According to the study, one-half of all buyers say it is more important to find a dealer with low prices than one that provides friendly customer service.

Friendly service remains important, though, because the average customer spends nearly three hours at their selling dealer completing the purchase process. Moving that process forward quickly is directly linked to satisfaction. In particular, buyers are frustrated with wasted time, such as waiting to enter the business office to finalize the paperwork.

The Sales Satisfaction Study, which was conducted in April and May this year, is based on more than 46,000 responses from buyers and lessees of 2000 and 2001 model cars and light trucks.

Luigi Fraschini, who calls Cleveland home, is a frequent contributor to Driving Today.

Bullish on Bridgestone

Jack Nerad's exclusive interview with John Lampe was made possible through the assistance of our sponsor, Bridgestone/Firestone, Inc.

Tough times bring out the best and the worst in us. They test our mettle, check our guts and determine if we have the right stuff. John Lampe, president and CEO of Bridgestone/Firestone, Inc., knows what it is like to be over a barrel: The firestorm of controversy that has surrounded Firestone tires and the Ford Explorer sport utility vehicle has gone on for more than a year now.

Under the media microscope, in a business crisis of the highest magnitude, Lampe has led his company with a resolute straightforwardness that has gained respect across the globe. Taking the reins of the company in the worst possible climate, he has addressed problems decisively, accepted blame when due, and made the hard business decision of voluntarily recalling some 6.5 million tires in an attempt to rebuild the credibility of one of America's most-trusted brands.

What is lost in much of the general media coverage of this story is the nuance, and in this story the nuance is all-important. It is easy for the media to report that Firestone recalled 6.5 million "defective" tires. The fact of the matter, however, is a very tiny percentage of the recalled tires showed any vague sign of defect. Though Firestone has admitted a very few tires it built did exhibit problems, the company went to the unprecedented step of replacing each and every one of the 6.5 million tires at no charge to its customers.

"We had an extremely, extremely small percentage of tires that we had seen with any sort of issue," Lampe told Driving Today, "but because we were so concerned about public safety and we wanted to make sure we did the right thing and did it quickly, we went ahead and announced a full-blown program to make sure we would capture that very, very small percentage, and I think we were very, very successful in doing that."

Further, while some members of the media and the public saw the voluntary recall as a huge blow to the Firestone brand, a significant number of customers actually affected by the recall were impressed by the action and the efficiency in which it was carried out.

"We were actually able to complete about 90 percent of the replacement program within the first four months, and it's virtually, for all practical purposes, complete as we speak," Lampe said. "We had a number of customers who couldn't believe we were going to replace their tires that had 60, 70, and 80,000 miles, that had their tires for five or six or seven years and never had an issue or a problem, and I think they appreciated the fact that we did this voluntarily, that we did this at absolutely no charge to the customer when we replaced them in our stores, and we got them back on the road again with new tires. So we had a lot of very, very pleased people."

Ironically, one of the potential causes of tire failure might be the advances in tire technology that have made today's tires so good many consumers are prone to neglect them. Lampe noted one car-owner responsibility that is ignored all too often is a simple tire pressure check. Firestone recommends that motorists check their tire pressure at least once a month, because all tires tend to lose some air pressure naturally over time. This can result in under-inflation, which in turn can lead to heat build-up, the mortal enemy of any tire. To reinforce this and other important safety issues with the public at large, Bridgestone/Firestone created Tiresafety, a Web site filled with important tips related to tire maintenance and use.

In addition to Tiresafety, Bridgestone/Firestone is also taking decisive efforts in its own stores and with its dealers to restore consumer confidence in the Firestone brand. As part of this consumer education effort, Firestone has given out more than two million air gauges to its customers, accompanied by information on choosing the right tire for the right application.

"It's not going to be a 24-hour program," Lampe said. "It's a long-term program to regain the trust and confidence of the people who have trusted our products for so long."

As to the results of these efforts, Lampe says he is encouraged by both the responses he has received from consumers who have decided to stick with the brand, and from consumers who might have wavered in their loyalty but now are returning to the brand.