The Automotive News Week in Review - September 4, 2009

Mercedes-Benz Further Cuts Ties with Chrysler

The popular Dodge Sprinter van, a unique take on the cargo segment normally dominated by the Ford E-Series and the Chevrolet Express, will no longer be produced in Pentastar form. The vehicle was actually a licensed version of the Mercedes-Benz Sprinter, a van which is popular throughout Europe thanks to its diesel engine availability and tall roofline that enables even full-size adults to stand up inside without bumping their heads.

The move by Mercedes-Benz to terminate this platform sharing with Dodge is yet another in a long line of steps meant to distance the German automaker from spurned partner Chrysler. The latter’s recent acquisition by Fiat has sparked a renewed fervor on the part of Daimler AG to eliminate as many relationships as it can with the newly-funded competitor.

While the move is disappointing for Dodge and for the many fans the Sprinter made during its short tenure, which began in 2003, it also has serious consequences for Mercedes-Benz. The platform will now go from being represented by over 350 licensed Dodge dealerships to a mere 120 Benz dens qualified to maintain the van. The potential for brand confusion also exists as the Sprinter makes its American debut in Mercedes-Benz livery for the 2010 model year. Unlike the European division, the company is not well known for its commercial offerings in the United States.

August Roars Like a Lion on the Sales Front

After a year of disappointment, the North American auto industry saw sales figures in August that were higher than any in the previous 15 months. Overall, 1.25 million cars were sold, thanks in large part to the financial assist provided to automobile buyers on the fence in the form of the Cash for Clunkers initiative. News that the recession may finally be over has also spurred consumers into spending cash more freely than in the earlier part of the year.

Of the major car companies, Ford posted the most impressive gains, selling 17.2 percent more cars than it did in August of 2008. Both the efficient Ford Fusion and Mercury Milan showed sales gains of over 100 percent each. On the lower end of the scale but still quite impressive was a 9.9 percent increase from Honda and a 6.4 percent gain by Toyota. Honda’s Fit was perhaps the biggest surprise of all, as it saw a stratospheric 194.1 percent increase. General Motors and Chrysler each witnessed a drop-off in vehicles moved, despite stronger sales when compared to their earlier 2009 numbers.

Amongst smaller automakers, Hyundai and Subaru saw sales increases of around 50 percent, while Hyundai trumped every other brand with a 60.4 percent jump.

Toyota Struggles To Stay On Top

A slew of recalls, legal troubles and plant closures have cast a pall over the world’s most popular car company. Toyota, who in recent years outsold General Motors on the way to dominating the automotive market, has been hit by a number of difficult challenges both at home in Japan as well as in several of the markets it exports to.

The summer of 2009 has so far seen Toyota recall 95,700 vehicle in the United States and a further 688,000 automobiles in China due to a variety of different mechanical problems, with the America recalls focusing on a serious brake safety issue. At the same time, a racketeering lawsuit filed in U.S. federal court claims that the company routinely hid important evidence from plaintiffs attempting to make product liability claims – a stern charge that is being made by a former member of the company’s legal department.

On the labor front, not only is Toyota catching serious heat from the state of California about the 40,000 jobs being lost as a result of its NUMMI plant closure, but it is also being threatened with the loss of its temporary workforce in Japan due to new government proposals. The latter news could have a huge impact on Toyota’s bottom line, due to the heavy use of inexpensive temporary workers in the Japanese auto industry.

MINI Lineup To Be Expanded

BMW has announced that the family of automobiles bearing the MINI name is about to gain two new members. Although details of the exact models were not forthcoming, the fact that BMW made it plain that they would be revealed at the Frankfurt Motor Show shed some light on the most likely candidates.

Leading the way is the MINI Coupe Concept, a vehicle with Audi TT-like styling that seats two and attempts to capture a sportier section of the market than the current Cooper and Cooper S offerings. A Speedster convertible version is also in the cards. The second variant would seem to be a crossover vehicle named the Countryman, which would offer four doors and room for up to five passengers. It would also feature all-wheel drive, a first for MINI, and could conceivably eat into Clubman sales. The strategy is part of BMW’s plan to diversify into as many different product niches as possible in an effort to gain valuable market share.

Honda’s Crosstour Attracts Cross Talk

Honda officially released images of the upcoming Crosstour crossover vehicle (based on the Accord sedan) this week, but response from the public has been mixed at best. The renderings, which highlight an oversized grille and a seemingly disproportionate rear end have caused many fans of the brand to express disappointment at the direction the vehicle is heading. One publicity effort on noted social networking site Facebook was a particular focal point for negative comments about the vehicle, with posters almost instantaneously deriding its clunky and somewhat awkward appearance. The company’s strategy, which hoped to gather a grassroots surge of support for the new vehicle appears to have backfired, despite a concerted effort on the part of Honda. The Crosstour is slated to go on sale as a 2010 model.