December 18, 2009

The New Definition of a Luxury Car
We all know what a luxury car should be: Long, roomy, a big V8 or even V12, lots of electronics. Picture a Mercedes E or S Class, the BMW 7 Series, the Audi 8, or big Lexus or Cadillac. But that's an old definition. Nowadays, it's the brand that counts, so luxury may be a smaller Mercedes C Class or BMW 3 Series or Cadillac CTS. But, according to Jerry Flint at Forbes, there will be a broader definition of luxury or prestige tomorrow, because times are changing again. We are creating new markers to show that we are rich enough, and that we are caring enough, to spend thousands of dollars in the "green" cause. It's likely that traditional luxury carmakers will produce electric plug-ins, and charge more for them than for the big V8s. They may or may not have the performance or room of today's prestige cars - depending on how they are built - but they will be even pricier. And the luxury brands might make some quite small cars and sell them at relatively high prices for their size. Some of this exists now. Mercedes, for example, has its small A Class car that it sells in Europe but not here, and parent Daimler builds the tiny Smart. Click here for more on the changes in tomorrow's electric cars.

Hyundai Counts on Strength of Car Design to Sustain Sales Gains
Hyundai Motor Co. broke into the U.S. market in 1986 with a $4,995 compact car, the Excel. Now the automaker wants customers to buy its models for their looks. According to Bloomberg, after boosting its U.S. market share to a record this year, Hyundai aims to build on the gains with more stylish designs. The new focus on looks, kicking off with the 2011 Sonata sedan and revamped Tucson crossover, is also aimed at helping South Korea's biggest carmaker command prices on par with larger Toyota Motor Corp. and Honda Motor Co. Click here for a photo of the Sonata. "The basic idea is a car that looks like a premium car, but not at a premium price," Phil Zak, Hyundai's head of U.S. design, said. Seoul-based Hyundai has bucked an industrywide slump this year with a 6.2 percent U.S. sales gain through November, as a weaker won enabled the company to boost marketing spending while a stronger yen hurt its Japanese rivals. The Korean carmaker still lags behind Toyota and Honda in terms of brand value, according to analysts. Hyundai's U.S. market share this year has risen to 4.3 percent through November from 3 percent in 2008, with the help of marketing programs, enhanced distribution channels, and improved quality. Click here to read more about Hyundai's design strategy to build share in the U.S. auto market.

Kia Adds Ex-Saturn Stores to Build Share in East
With help from three new vehicles - the Soul crossover, Forte sedan, and Forte Koup - Kia has been one of only three brands to increase sales this year. But, according to Automotive News, another major factor is the addition of 24 stores in the top 20 markets. Many have been added on the East Coast, and 18 are former Saturn stores, said Tom Loveless, sales vice president of Kia Motors America. "Fifty percent of the sales in the U.S. come out of the top 20 markets, so we are looking to improve our positioning where we did not have access," Loveless said at the Los Angeles Auto Show. Unit sales are up 8 percent to 279,015 in a market down 24 percent. Loveless isn't saying how many dealerships he wants to add in 2010, but he says the East Coast presents the biggest opportunity. Loveless also has his eyes on big West Coast cities such as San Francisco and Los Angeles. Adding stores could become easier as Saturn dealers wind down. "There is no defined project to go after Saturn," Loveless said, "but they are in the right markets. We also got a few Hummer and Chrysler stores." For more on Kia's plans for future market growth, click here.

New Insight Ads will Stress Car, Not Lifestyle
Honda plans a new marketing approach for its Insight hybrid after the Toyota Prius-fighter's disappointing debut. An ad campaign starting early next year will focus more on the car's features and benefits, said John Mendel, American Honda Motor Co. executive vice president. One spot likely will detail the Insight's ability to "train" a driver to drive more efficiently. According to Automotive News, the ad will feature the Insight's fuel economy readout, which uses a scrolling video-game format on the instrument panel. Mendel said that ought to make the Insight appeal to buyers under 35 years old - the target market. Since the Insight's debut, ads have been lifestyle-oriented, for example showing the hybrid transporting young people to the beach. The ads also have been highly stylized, relying on quick-cutting and inventive camera work. New ads for the Honda Insight hybrid will stress features such as the fuel economy readout. Click here for a photo. Mendel described current market conditions as unfavorable for hybrids, what with fuel prices much lower than in the summer of 2008. Honda's initial 90,000-unit sales goal was revised to 60,000 because of the economy, but sales since its March launch total just 18,933 units through November. For more on Honda's marketing plans for its Insight hybrid, click here.

GM Will Close Saab; Sale to Spyker fails
Saab will be closed down, its parent General Motors Co. announced today after concluding that a sale of the Swedish brand to Dutch niche car maker Spyker Cars NV could not be completed quickly enough. "We regret that we were not able to complete this transaction with Spyker Cars," GM Europe President Nick Reilly said in a statement. "We will work closely with the Saab organization to wind down the business in an orderly and responsible manner." Reilly added that Saab's closure is neither a bankruptcy nor a forced liquidation process. "Consequently, we expect Saab to satisfy debts including supplier payments," Reilly said, "and to wind down production and the distribution channel in an orderly manner while looking after our customers." Click here to read Automotive News' entire story on GM's plans to shut down Saab.