Ford Should Make & Sell Only Hybrids & Small Cars

What if Ford stopped building big pickups and SUVs and made only hybrid vehicles as of January 1, 2009?

Ford sales in October were only a little over 130,000 units, many of which had to be sales to car rental customers like Hertz-- and were not small, fuel effecient vehicles. Instead, it looks like Ford is going to "ramp up production of trucks and SUVs, according to the Wall Street Journal.

It is very hard to really tell what is going on inside Ford and in the staff meetings on Monday morning with Mullaly, Farley, and Fields. One cannot even really get through the "car guy mentality" in the interviews published in Automotive News. But it does seem that Ford is really trying to bring small cars from Europe. However, it also seems possible for Ford to just outright convert their plants to making hybrids, small vehicles, and vehicles powered by ethanal, diesel, CNG, even electrics. The impact on the brand and their branding would be immense. The big challenge would be to raise the capital (they have some it already in the $25 B package) and keep dealers from going broke till the new vehicle line could be delivered.

Captives & Banks Leasing Losses Caused by Ignorance & Greed

Chrysler & Some Banks Halting Leasing is About Vehicle Capitalization: The reason that banks and captives keep reporting that they are losing money lease funding vehicles is because of the practice of putting the lease transactions on their books at the full MSRP as the capitalized cost, rather than at either the dealer cost or even the factory cost.

The capitalized cost or "starting point" of a vehicle for purposes of computing the lease residual, the "interest factor", and the ultimate monthly lease cost to the lessee is based, then, on an inflated "cost" or the MSRP of the vehicle, sometime even amount greater than the MSRP.

It is no wonder that the monthly depreciation reserve or the ultimate projected end of lease residual does not represent the wholesale used vehicle market value at the end of the lease.

At the same time, "Loan" funding transactions orginated by dealers and sent to captives and banks every day are also "inflated" because of "execessive loan profit markups" and the added "cost" of getting the buyer out of the "under water" situation with the customer's trade-in. So what is the difference between this loan and the lease transaction ?--- the customer is taking the "loss" on the residual or market value on the loan vehicle not the captive finance company or the bank.

Now, Chrysler and even the market saavy, Jim Press, are saying the "economic advantages of leasing has disappeared". Nonsense-- it actually is in Chrysler's best interest to immediate crank up their leasing entity by "capping the cars" at Dealer Invoice and using 1% over prime interest and then merchandize payments -- and they will start selling cars and even trucks again.

With all due respect, it all about how a loan or lease transaction are structured at the beginning of the transaction. By giving dealers the "carte blanche" on how vehicle leases and loans are booked and funded, the captives and banks are burying either their captives or their customers in funding transactions that are comparable to housing mess now causing all the market and financial downturn and subsequent recession and sales impact.

New Street Level GPS is HOT & Leading

STREET LEVEL, HI DENSITY 360 IMAGERY IS HOT NAV:

See http://www.bluedashertech.com/faq.php

From now on -- Nav systems are going to have to actually show you, if not take you, to your destination and the give your a street view of the route to get there.

How Street Nav Works: The latest and more technologically advanced seems to be Blue Dasher Technologies out of Florida, the leading creator and distributor of street level high-density, geo-coded 360-degree spherical digital imagery. The Company’s highly versatile images are applied to any location, navigation system, device or map-based application, including mobile devices. Unlike other approaches, when viewed online, the 360° images from Blue Dasher Technologies are seamless, creating an experience similar to driving down the street.

What is the Unique Selling Feature? This Miami-based company hopes to set itself apart by producing better-quality, seamless images that beat those of rivals such as EveryScape and Google’s Streetview.

GPS Nav Systems & Gas Mileage: There is a convincing argument that the judicious use of a good nav system can save fuel as well as save time.

Auto Buyers On Financial High Wire

New Book for Auto Execs & Dealers to Read & Ingest: The "book for the month of July" may well be Peter Gosselin's "High Wire: The Precarious Financial Lives of American Families".

The book's premise: A shift of economic risk has arrived at the door step of working Americans and their families and they are ill-equipped to handle or cope with the consequences. The financial fall "out" brought by astronomical gas prices, a weakened dollar, and massive layoffs are making people "pay" in every way including the loss of pensions and diminished security for their familes.

What this means: People are nervous and uncertain because they sense that they are only one or two steps from a deep financial fall. We are seeing it in housing, food purchases and car buying. They are looking for a "net" for their future.

What can dealers and manufacturers do about this?: Help people "manage their vehicles"-- by counseling them on how to deal with vehicle(s) they now own from gas mileage to sound maintenance practices. Dealers can survive and make it through this period by becoming "transportation management centers" and NOT car dealerships who are perceived to be only out to sell a car or truck. This will take some "high wire" leadership, marketing, and plain guts to position the entire dealership to help existing and new customers deal the reality of the "high wire" financial situation that every American is facing at the moment. As an industry, we have the opportunity to take the economic risk by getting on the "wire" with our customers.

Lending Detroit a Helping Hand

Detroit Calling Washington for Help Again: Both candidates for president are actively suggesting that they will lend a helping hand to Detroit-- from something less than a "classic bailout" to a fed investment of $150 B in green technology ideas. One candidate has suggested "some bridges" to help produce flex fuel vehicles and the other would make R&D tax credits permenant and keep the fed subsidies flowing to have midwest farmers produce more corn for ethanol.

GM officials who attended the sessions and panels held by the two candidates seemed "encouraged", welcomed a national debate on a solution, and talked about how GM and the Detroit manufacturers were engaged in a technology race with foriegn based rivals.

At this time, it does not look like Detroit can expect or will receive much relief from Washington, Congress, or the American consumer who is struggling to fill gas tanks each week. Meantime, we keep hearing a lot of talk about gaining a "level playing field" rather resolve to take action by getting on the market "field" with vehicles, solutions, and leadership that will provide the solutions to the problems Detroit brought on themselves and will NOT be solved in Washington --no matter who is the next president.

Stop Watching Women & Start Following

Top 50 Women Executives To "Follow" : Every once in a while a major business magazine publishes a 'list" of extraordinary women executives that we are all supposed to "watch".

The latest is an inhouse print ad in the Wall Street Journal this past week, asking for nominations by July 7th, The ad copy talks all about "women poised to play important roles in business in the years ahead." The car-guy, male dominated Automotive News does the same thing once a year, focusing on female executives in the automotive business that have somehow come to their attention.

It is time that we started putting more women into leadership roles at the automotive manufacturers, dealers, and the suppliers--not just in marketing, administration, and the legal department. We can "watch" them but really we should be listening to them and taking action on what they are saying-- following their leadership. What we would have happened or would be happening if a woman were now running Chrysler or GM -- or even more startlingly--Toyota-- or even AutoNation or Delphi?

The white, male car guys seem to be really struggling to figure out what vehicles to make, how to sell them, and how to adjust to a whole new market paradigm. It is time to mobilize & empower the people who can solve the current industry problems-- Women -- They buy or influence 85% of car purchase decisions -- why not have them make at least 85% of the "major decisions" about what vehicles (cars) get made and sold?

Role of Oil Futures Speculators Finally Under Scrutiny

A probe by the Commodity Futures Trading Commission & the UK's Financial Services Authority is finally underway to look into how oil trades are being made in at least two exchanges around the globe: the Intercontinental Exchange (ICE) and the New York Mercantile Exchange. Both ICE and NYMERC have agreed to provide "enhancements to energy market data reporting" or give out some more information about who and how these oil futures are made by and with energy traders.

If you want to get a sense of what is really going on with the major derivative contracts being bought and sold by your pension fund or insurance company, or your bank, read "RIGGED" The True Story of an Ivy League kid who changed the world of oil from Wall Street to Dubai".

You begin to understand that the bad guys in all of this gas price fiasco is not necessarily OPEC, the oil companies, or even an incompetent president, but rather a bunch of institutional investors buying and selling oil futures at the "MERC" in New York and make big gains on the back to U.S. economy and American drivers.---and no one is talking about how their speculation is driving up the price of a barrel of oil and thus of a gallon of gas---and making the American people pay for it.